EXHIBIT 2.1
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ASSET PURCHASE AGREEMENT
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B E T W E E N
AMI SEMICONDUCTOR CANADA COMPANY
AND
EMMA MIXED SIGNAL C.V.
AND
AMI SEMICONDUCTOR, INC.
AND
AMIS HOLDINGS, INC.
AND
DSPFACTORY LTD.
and certain of its Shareholders
September 9, 2004
TABLE OF CONTENTS
ARTICLE 1
INTERPRETATION
1.1 Defined Terms.......................................................... 7
1.2 Currency............................................................... 16
1.3 Sections and Headings.................................................. 16
1.4 Rules of Construction.................................................. 17
1.5 Accounting Principles.................................................. 17
1.6 Entire Agreement....................................................... 17
1.7 Time of Essence........................................................ 18
1.8 Applicable Law; Consent to Jurisdiction................................ 18
1.9 Knowledge.............................................................. 18
1.10 Amendment and Waivers.................................................. 18
1.11 Severability........................................................... 18
1.12 Schedules.............................................................. 18
ARTICLE 2
PURCHASE AND SALE OF PURCHASED ASSETS
2.1 Purchased Assets....................................................... 20
2.2 Excluded Assets........................................................ 21
ARTICLE 3
PURCHASE PRICE
3.1 Purchase Price......................................................... 22
3.2 Share Earn-Out......................................................... 23
3.3 Closing Date Payment................................................... 25
3.4 Escrow................................................................. 26
3.5 Allocation of Purchase Price........................................... 26
3.6 Transfer Taxes......................................................... 27
3.7 GST Matters............................................................ 27
3.8 Income Tax Election.................................................... 27
3.9 Working Capital Adjustment............................................. 27
ARTICLE 4
LIABILITIES
4.1 Assumption of Certain Liabilities by the Purchasers.................... 28
4.2 Excluded Liabilities................................................... 28
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE COVENANTORS
5.1 Organization........................................................... 29
5.2 Authorization.......................................................... 29
5.3 No Other Agreements to Purchase........................................ 29
5.4 No Violation........................................................... 29
5.5 Sufficiency of Purchased Assets........................................ 29
5.6 Title to Personal Property............................................. 30
5.7 Real Property Lease.................................................... 30
5.8 Leased Property........................................................ 30
5.9 Inventories............................................................ 32
5.10 Accounts Receivable.................................................... 32
5.11 Intellectual Property.................................................. 32
5.12 Insurance.............................................................. 34
5.13 No Expropriation....................................................... 34
5.14 Agreements and Commitments............................................. 34
5.15 Compliance with Laws; Governmental Authorizations...................... 34
5.16 Consents and Approvals................................................. 35
5.17 Books and Records...................................................... 35
5.18 Litigation............................................................. 35
5.19 No Liabilities......................................................... 35
5.20 Absence of Changes..................................................... 36
5.21 Non-Arm's Length Transactions.......................................... 36
5.22 Tax Matters............................................................ 37
5.23 Employment Matters..................................................... 37
5.24 Customers and Suppliers................................................ 38
5.25 Product Warranties..................................................... 38
5.26 Environmental.......................................................... 38
5.27 Residency.............................................................. 39
5.28 GST Registration....................................................... 39
5.29 Full Disclosure........................................................ 39
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
6.1 Organization........................................................... 39
6.2 Authorization.......................................................... 40
6.3 No Violation........................................................... 40
6.4 Consents and Approvals................................................. 40
6.5 GST.................................................................... 40
6.6 Residency.............................................................. 41
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF PARENTCO
7.1 Organization........................................................... 41
7.2 Authorization.......................................................... 41
7.3 No Violation........................................................... 41
7.4 Consents and Approvals................................................. 41
7.5 SEC Filings............................................................ 42
7.6 Authorized Capital..................................................... 42
7.7 AMIS Shares............................................................ 42
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ARTICLE 8
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
8.1 Survival of Representations and Warranties............................. 43
8.2 Implied Warranties..................................................... 43
ARTICLE 9
COVENANTS
9.1 Access to the Purchased Business and Purchased Assets.................. 43
9.2 Delivery of Books and Records.......................................... 44
9.3 Change and Use of Name................................................. 44
9.4 Conduct of Purchased Business Prior to Closing......................... 45
9.5 Delivery of Conveyancing Documents..................................... 46
9.6 Retail Sales Tax Certificate........................................... 46
9.7 Delivery of Closing Documentation...................................... 46
9.8 Bulk Sales Act Compliance.............................................. 46
9.9 Consents to Assignment................................................. 47
9.10 Action by the Purchasers and the Vendor................................ 47
9.11 Covenants Relating to the Share Earn-Out............................... 47
9.12 Key Employee Shareholders.............................................. 48
9.13 Discharge of Certain Permitted Encumbrances............................ 48
ARTICLE 10
ARRANGEMENT
10.1 Implementation Steps................................................... 48
10.2 Interim Order.......................................................... 49
10.3 Plan of Arrangement and Articles of Arrangement........................ 50
10.4 Vendor Information Circular............................................ 50
10.5 Preparation of Filings................................................. 50
ARTICLE 11
EMPLOYEE MATTERS
11.1 Offers of Employment................................................... 51
11.2 Offered Employees...................................................... 51
11.3 Fixed Term Employees................................................... 52
11.4 Transferred Employees and Transferred Fixed Term Employees............. 52
11.5 Employee Accruals...................................................... 53
11.6 Employee Information................................................... 53
11.7 Coverage of Remaining Employees........................................ 53
ARTICLE 12
CONDITIONS OF CLOSING
12.1 Mutual Conditions Precedent............................................ 54
12.2 Conditions of Closing in Favour of the Purchaser....................... 55
12.3 Conditions of Closing in Favour of the Vendor.......................... 57
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ARTICLE 13
CLOSING DATE AND TRANSFER OF POSSESSION
13.1 Place of Closing....................................................... 59
13.2 Transfer............................................................... 59
13.3 Further Assurances..................................................... 59
13.4 Risk of Loss........................................................... 59
13.5 Destruction of Instruments............................................. 59
ARTICLE 14
INDEMNIFICATION
14.1 Indemnification by the Covenantors..................................... 60
14.2 Indemnification by the Purchasers...................................... 61
14.3 Notice of Claim........................................................ 62
14.4 First Party Claims..................................................... 63
14.5 Third Party Claims..................................................... 63
14.6 Settlement of Third Party Claims....................................... 64
14.7 Co-operation........................................................... 64
14.8 Threshold and Maximum Indemnification.................................. 64
14.9 Exclusivity............................................................ 65
14.10 Set-Off................................................................ 65
ARTICLE 15
MISCELLANEOUS
15.1 Dispute Resolution..................................................... 65
15.2 Notices................................................................ 65
15.3 Construction........................................................... 66
15.4 Waiver of Jury Trial................................................... 67
15.5 Public Announcement.................................................... 67
15.6 Disclosure............................................................. 67
15.7 Expenses............................................................... 67
15.8 Confidentiality........................................................ 67
15.9 Successors and Assigns................................................. 67
15.10 Counterparts........................................................... 68
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SCHEDULES
Schedule 2.1(a) - Machinery and Equipment
Schedule 2.1(g) - Assigned Contracts
Schedule 2.1(h) - Transferred Permits
Schedule 2.1(i) - Intellectual Property
Schedule 2.1(j) - Third Party Software Licences
Schedule 3.2 - Dspfactory Products and AMIS Products
Schedule 3.3 - Contract Assignment Costs and Debt Pay-off Amounts
Schedule 3.4 - Escrow Agreement
Schedule 3.5 - Allocation of Purchase Price
Schedule 3.9 - Working Capital
Schedule 5.4 - No Violation
Schedule 5.5 - Sufficiency of Purchased Assets
Schedule 5.6 - Permitted Encumbrances
Schedule 5.7 - Leased Property
Schedule 5.11(c) - Limitations
Schedule 5.11(e) - Adverse Claims
Schedule 5.11(h) - Intellectual Property Claims
Schedule 5.12 - Insurance
Schedule 5.15 - Permits
Schedule 5.16 - Consents and Approvals
Schedule 5.17 - Insurance
Schedule 5.17(b) - Financial Statements
Schedule 5.18 - Actions, Suits, Proceedings
Schedule 5.20 - Absence of Changes
Schedule 5.21 - Non-Arm's Length Transactions
Schedule 5.23(c) - Employment Arrangements
Schedule 5.24 - Major Customers
Schedule 5.25 - Product Warranties
Schedule 9.11 - Sales Leads
Schedule 10.3 - Plan of Arrangement
Schedule 11.1(a) - Offered Employees and Designated Key Employees
Schedule 11.1(b) - Offered Fixed Term and Designated Key Fixed
Term Employees
Schedule 11.4(a) - Vendor Employee Plans
Schedule 11.4(c) - Employment Claims
Schedule 12.1(d) - Lease Assignment and Assumption Agreement
Schedule 12.2(f) - Share Purchase Agreement
Schedule 12.2(g) - Government Aid Agreements
Schedule 12.2(i) - Key Employee Shareholder Agreements and
Form of Lock-Up Agreements
Schedule 12.2(m) - Form of Opinion of the Vendor's Counsel
Schedule 12.2(n) - Phonak Agreement
Schedule 12.3(d) - Form of Opinion of the Purchaser's Counsel
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ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made the ninth day of September, ▇▇▇▇,
▇ ▇ ▇ ▇ ▇ ▇ ▇:
AMI SEMICONDUCTOR CANADA COMPANY,
an unlimited liability company existing under the
laws of the Province of Nova Scotia,
(hereinafter referred to as "AMIS Canada"),
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EMMA MIXED SIGNAL C.V.,
a limited partnership organized under the laws of the
Netherlands,
(hereinafter referred to as "EMMA"),
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AMI SEMICONDUCTOR, INC.,
a corporation existing under the laws of Delaware,
(hereinafter referred to as "AMIS"),
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AMIS HOLDINGS, INC.
a corporation existing under the laws of Delaware,
(hereinafter referred to as "Parentco"),
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DSPFACTORY LTD.,
a corporation existing under the laws of the
Province of Ontario (as such name may be changed
pursuant to Section 9.3),
(hereinafter referred to as the "Vendor"),
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DNN HOLDINGS LTD.,
a corporation existing under the laws of Ontario,
(hereinafter referred to as "Stork"),
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SOUTHBRIDGE INVESTMENT PARTNERSHIP NO. 1,
a limited partnership existing under the laws of the
Province of Ontario,
(hereinafter referred to as "Southbridge"),
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MVO INVESTMENTS LTD.,
a corporation existing under the laws of Ontario,
(hereinafter referred to as "MVO").
THIS AGREEMENT WITNESSES THAT, in consideration of the respective
covenants, agreements, representations, warranties and indemnities of the
parties herein contained and for other good and valuable consideration (the
receipt and sufficiency of which are acknowledged by each party), the parties
agree as follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINED TERMS
For the purposes of this Agreement, the following terms shall have
the respective meanings set out below and grammatical variations of such terms
shall have corresponding meanings:
"2005 DSPFACTORY REVENUE" means, in respect of the 2005 calendar year, the
Net Revenue generated through (i) the Sale of Dspfactory Products by the
Purchasers, Parentco or any of their Affiliates, (ii) the performance of
engineering, design, software development and other services provided to
third party customers that are associated with Dspfactory Products, and
(iii) the Sale of any products involving a software programmable digital
signal processing core or any of the Dspfactory Products and/or any
engineering, design, software development and other services relating to
products involving a software programmable digital signal processing core
or any of the Dspfactory Products by the Purchasers, Parentco or any of
their Affiliates, but not including any product of Purchasers, Parentco or
any of their Affiliates that existed or
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was under development or planning prior to the Closing Date, as set out in
Schedule 3.2, and that does not later become a derivative of a Dspfactory
Product;
"2005 EARN-OUT SHARES" has the meaning set out in Section 3.2(a);
"2005 EARN-OUT VALUE" has the meaning set out in Section 3.2(a)(ii);
"2006 DSPFACTORY REVENUE" means, in respect of the 2006 calendar year, the
Net Revenue generated through (i) the Sale of Dspfactory Products by the
Purchasers, Parentco or any of their Affiliates, (ii) the performance of
engineering, design, software development and other services provided to
third party customers that are associated with Dspfactory Products, and
(iii) the Sale of any products involving a software programmable digital
signal processing core and any of the Dspfactory Products and/or any
engineering, design, software development and other services relating to
products involving a software programmable digital signal processing core
or any of the Dspfactory Products by the Purchasers, Parentco or any of
their Affiliates, but not including any product of Purchasers, Parentco or
any of their Affiliates that existed or was under development or planning
prior to the Closing Date, as set out in Schedule 3.2, and that does not
later become a derivative of a Dspfactory Product;
"2006 EARN-OUT SHARES" has the meaning set out in Section 3.2(b);
"2006 EARN-OUT VALUE" has the meaning set out in Section 3.2(b)(ii);
"ACCOUNTS PAYABLE" means all amounts in connection with the Purchased
Business due and owing to traders, suppliers and other Persons (other than
Taxes payable), outstanding as of the Effective Time, which have been
incurred, whether or not invoiced, in the ordinary course of business, but
not including past-due amounts;
"AFFILIATE" means, in relation to any person, any other person that
directly or indirectly controls, that is directly or indirectly controlled
by, or that is under the direct or indirect common control of, such
person; provided, however, that (a) where one person controls another
person, any other person controlled by the first such person shall be
deemed to be an Affiliate of the second such person; and (b) any
corporation in respect of which any person owns beneficially, directly or
indirectly, not less than 50% of such corporation's voting securities,
shall be deemed to be an Affiliate of such person (for purposes hereof,
"control" means, in respect of any person, the power or authority to
direct, or cause the direction of, directly or indirectly, the management,
policies or actions of any other person, whether through the ownership of
equity securities or voting securities or by Contract or otherwise);
"AMIS HOLDINGS" means AMIS Holdings, Inc., the Purchasers' parent company
or any successor thereto (whether by amalgamation, continuance or
otherwise);
"AMIS SHARES" means the common stock in the capital of AMIS Holdings;
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"ARRANGEMENT" means the arrangement under Section 182 of the OBCA on the
terms and subject to the conditions set out in the Plan of Arrangement,
subject to any amendments or variations thereto made in accordance with
Article 4 of the Plan of Arrangement or as otherwise agreed in writing by
the parties hereto;
"ARRANGEMENT RESOLUTION" means the special resolution of the Shareholders,
holders of Vendor Options, holders of Vendor Warrants and holders of the
Dspfactory Debentures (all on an as exercised basis), voting together as a
single class, to approve the Arrangement substantially in the form
attached to the Circular;
"ARTICLES OF ARRANGEMENT" means the articles of arrangement of the Vendor
in respect of the Arrangement, in the form required by the OBCA to be sent
to the Director after the Final Order is made;
"ASSIGNED AGREEMENTS" has the meaning set out in Section 5.14;
"ASSIGNED CONTRACTS" has the meaning set out in Section 2.1(g);
"ASSIGNED THIRD PARTY SOFTWARE LICENCES" has the meaning set out in
Section 2.1(j);
"ASSOCIATE" has the meaning set out in the Business Corporations Act
(Ontario);
"ASSUMED LIABILITIES" has the meaning set out in Section 4.1;
"AVERAGE AMIS SHARE PRICE" means, on the third Business Day prior to any
particular issuance date, the average of the closing price of an AMIS
Share during the 10 consecutive trading days prior to such date, as quoted
on the NASDAQ National Market or any other nationally recognized stock
exchange or quotation system;
"BUSINESS DAY" means a day, other than a Saturday or a Sunday, on which
banks are open for ordinary banking business in ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇;
"CIRCULAR" means the notice of the Special Meeting and accompanying
management information circular or information statement to be sent to
Shareholders, holders of Dspfactory Debentures, holders of Vendor Options,
and holders of Vendor Warrants in connection with the Special Meeting, as
it may be amended from time to time;
"CLAIM" means any claim, action, demand, lawsuit or proceeding;
"CLEANUP" means any investigation, containment, cleanup, removal or other
remediation or corrective action;
"CLOSING DATE" means the third Business Day following the issuance and
entry of the Final Order provided that all other conditions contained in
Article 12 have been fulfilled or waived in writing but in any event not
later than November 30, 2004 unless otherwise agreed in writing by the
parties;
"CLOSING DATE PAYMENT" has the meaning set out in Section 3.3;
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"CLOSING FINANCIAL STATEMENTS" has the meaning set out in Section 3.9;
"CLOSING SHARES" has the meaning set out in Section 3.1(b);
"CONTAMINANT" has the meaning set out in Section 5.11(k);
"CONTRACT" means any agreement, indenture, contract, lease, deed of trust,
licence, option, instrument or other commitment, whether written or oral;
"CONTRACT ASSIGNMENT COSTS" means the aggregate, final, negotiated fees
required to be paid to the third parties to the Assigned Contracts and the
Assigned Third Party Software Licenses in exchange for their consent to
the assignment of such Assigned Contracts and the Assigned Third Party
Software Licenses to the Purchasers;
"COTS SOFTWARE" means commercial off-the-shelf software which is generally
available and subject to standard term licence agreements;
"COURT" means the Ontario Superior Court of Justice;
"COVENANTORS" means, collectively, the Vendor, Stork, Southbridge, and MVO
and individually means any one of them;
"DESIGNATED KEY FIXED TERM EMPLOYEES" means the employees of the Vendor
who are named in Schedule 10.1(b) as such;
"DESIGNATED KEY EMPLOYEES" means the employees of the Vendor who are named
in Schedule 10.1(a) as key employees;
"DIRECTOR" means the Director appointed pursuant to Section 278 of the
OBCA;
"DISABLING CODE" has the meaning set out in Section 5.11(k);
"DISSENT RIGHTS" means the rights of dissent in respect of the Arrangement
described in Article 3 of the Plan of Arrangement;
"DSPFACTORY DEBENTURES" has the meaning set out in the Plan of
Arrangement;
"DSPFACTORY PRODUCTS" means all products of the Purchased Business offered
for Sale by the Purchased Business or under any stage of development or in
planning prior to the Closing Date as listed on Schedule 3.2 hereof and
all derivatives, modifications, updates and successor products thereof;
"EFFECTIVE TIME" means the time on the Closing Date which is specified in
the Plan of Arrangement for the completion of the transactions
contemplated herein;
"EFFECTIVE TIME WORKING CAPITAL" has the meaning set out in Section 3.9;
"ELECTING SWISS SHAREHOLDERS" has the meaning set out in the Plan of
Arrangement;
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"EMPLOYMENT LEGISLATION" means, collectively, the Labour Relations Act
(Ontario), the Ontario Human Rights Code, the Occupational Health and
Safety Act (Ontario), the Pay Equity Act (Ontario), the Employment
Standards Act, 2000 (Ontario), the Pension Benefits Act (Ontario), the
Workplace Safety and Insurance Act, 1997 (Ontario) or predecessor to that
Act and the Employment Insurance Act (Canada);
"ENCUMBRANCE" means any encumbrance, lien, charge, hypothecation, pledge,
mortgage, title retention agreement, security interest of any nature,
adverse claim, exception, right of set-off, reservation, easement, right
of occupation, any matter capable of registration against title, option,
right of pre-emption, privilege or any Contract to create any of the
foregoing;
"ENVIRONMENTAL LAWS" means all federal, municipal and local laws,
ordinances, by-laws, codes, statutes, rules and regulations, orders,
directives, notices, decrees or judgments rendered by, and all policies,
guidelines and similar guidance of any Governmental Authority, relating to
(i) the protection of the environment; (ii) pollution; (iii) the Release,
threatened Release, Cleanup or manufacture, processing, distribution, use,
treatment, storage, transport or handling of Hazardous Substances; or (iv)
worker and public health and safety;
"ENVIRONMENTAL PERMITS" means all licences, permits, approvals, consents,
certificates, registrations or other authorizations required under
Environmental Laws;
"ESCROW AGENT" means a recognized financial institution agreed by the
parties;
"ESCROW AGREEMENT" has the meaning set out in Section 3.4;
"ESCROW AMOUNT" has the meaning set out in Section 3.4;
"ETA" means Part IX of the Excise Tax Act (Canada);
"EXCLUDED ASSETS" has the meaning set out in Section 2.2;
"EXCLUDED LIABILITIES" has the meaning set out in Section 4.2;
"FINAL ORDER" means the final order of the Court approving the Arrangement
as such order may be amended at any time prior to the Effective Date or,
if appealed, then, unless such appeal is withdrawn or denied, as affirmed;
"FINANCIAL STATEMENTS" means the audited consolidated financial statements
of the Vendor dated February 29, 2004, a copy of which is attached as
Schedule 5.17(b);
"FIRST PARTY CLAIM" has the meaning set out in Section 14.3;
"FIXED TERM EMPLOYEES" has the meaning set out in Section 11.1(b);
"GOVERNMENT AID AGREEMENTS" means (a) the Technology Partnerships Canada
Agreement dated February 5, 2002 made between the Vendor and Her Majesty
The
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Queen in Right of Canada, as represented by the Minister of Industry, as
amended by Amendment No. 1 dated July 23, 2004 and an amended or otherwise
modified prior to the Closing Date pursuant to Section 12.2(g); and (b)
the Industrial Research Assistance Program Agreements dated September 1,
1999 and November 26, 1999 made between the Vendor and the National
Research Council of Canada, as amended or otherwise modified prior to the
Closing Date pursuant to Section 12.2(g);
"GOVERNMENTAL AUTHORITY" means any national, federal, provincial, state,
county, municipal, district or local government or government body, or any
public administrative or regulatory agency, political subdivision,
commission, court, board or body, or representative of any of the
foregoing, foreign or domestic, of, or established by any such government
or government body which has authority in respect of a particular matter
or any quasi-governmental body having the right to exercise any regulatory
authority thereunder;
"GST" means all taxes payable under the ETA or under any provincial
legislation similar to the ETA, and any reference to a specific provision
of the ETA or any such provincial legislation shall refer to any successor
provision thereto of like or similar effect;
"HAZARDOUS SUBSTANCES" means any substances, chemicals, materials or
wastes that are toxic or hazardous or any pollutant or contaminant which
is now or hereafter restricted, regulated, prohibited or penalized by any
Environmental Laws; "Hazardous Substances" specifically includes
asbestos-containing materials, radioactive materials and petroleum and its
fractions;
"INDEMNIFIED PARTY" means a person seeking indemnification as set out in
Section 14.3;
"INDEMNIFYING PARTY" means a person providing indemnification as set out
in Section 14.3;
"INTELLECTUAL PROPERTY" means industrial and intellectual property,
including all:
(a) trade secrets, confidential information and confidential
know-how, including all unpatented inventions, customer and
supplier lists, formulae, processes, technology, inventor's
notes, unpublished studies and data, research designs,
research results and notes, prototypes, drawings, design and
construction specifications, production, operating and quality
control manuals, marketing strategies, and current or proposed
business opportunities;
(b) copyrights, including all copyrights in software;
(c) industrial designs, design patents and other designs;
(d) integrated circuit topography rights;
(e) patents; and
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(f) trade-marks, including both registered and unregistered
trade-marks and service marks, designs, logos, indicia,
distinguishing guises, trade dress, trade names, business
names, internet domain names, any other source or business
identifiers and fictitious characters, and all goodwill
associated with the foregoing,
and all registrations, applications for registration, reissues,
extensions, renewals, divisions, continuations, continuations-in-part,
proprietary information, documentation, licences, registered user
agreements and other agreements relating to the foregoing;
"INTERIM ORDER" means the interim order of the Court in respect of the
Arrangement, as contemplated by Section 10.2;
"KEY EMPLOYEE ESCROW AGREEMENTS" has the meaning set out in Section 9.12;
"KEY EMPLOYEE HOLD-BACK AMOUNTS" means seventy percent of the aggregate
amounts to be paid to the Key Employee Shareholders pursuant to Section
2.2(r) of the Plan of Arrangement minus the aggregate amounts paid by such
Key Employee Shareholders for their Dspfactory Shares, as such term is
defined in the Plan of Arrangement ;
"KEY EMPLOYEE SHAREHOLDERS" means ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, and ▇▇▇▇ ▇▇▇▇▇.
"LEASE" has the meaning set out in Section 5.7;
"LEASE ASSIGNMENT AND ASSUMPTION AGREEMENT" means the lease assignment and
assumption agreement in respect of the Lease substantially in the form
attached hereto as Schedule 12.1(d);
"LEASED PROPERTY" has the meaning set out in Section 5.7;
"LOCK-UP AGREEMENTS" has the meaning set out in Section 12.2(i);
"LOSSES", in respect of any matter, means all Claims, losses, damages,
obligations, liabilities, deficiencies, fines, costs and expenses
(including all legal and other professional fees and disbursements,
interest, penalties and amounts paid in settlement) arising, directly or
indirectly, as a result of such matter (but excluding any consequential
losses);
"MAXIMUM SHARE EARN-OUT" has the meaning set out in Section 3.1(c);
"NET REVENUE" in respect of Sales of a particular product or service,
means all revenue generated with respect thereto, minus any returns,
refunds, or credits provided in the ordinary course of business and not
including any amounts received for shipping, taxes, duties and tariffs;
"NON-TRANSFERRED PERMITS" means those (a) government permits, and (b)
other approvals, consents, registrations, certificates and other
authorizations held by or granted
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to the Vendor which are applicable to the Purchased Business or the
Purchased Assets and which are not being transferred by the Vendor to the
Purchaser;
"OBCA" means the Business Corporations Act (Ontario) as now in effect and
as it may be amended from time to time prior to the Effective Date;
"OFFERED EMPLOYEES" has the meaning set out in Section 11.1;
"PARENTCO SEC DOCUMENTS" has the meaning set out in Section 7.5;
"PERMITS" has the meaning set out in Section 5.15;
"PERMITTED ENCUMBRANCES" means:
(a) liens for taxes, assessments and governmental charges due and
being contested in good faith and diligently by appropriate
proceedings (and for the payment of which adequate provision
has been made);
(b) inchoate liens claimed or held by any Governmental Authority
or a public utility in respect of the payment of taxes or
utilities not yet due and payable; and
(c) the Encumbrances described in Schedule 5.6;
"PERSON" means an individual, firm, corporation, limited liability
company, syndicate, partnership, trust, association, joint venture,
unincorporated organization, Governmental Authority or other legal or
business entity;
"PLAN OF ARRANGEMENT" means the plan of arrangement substantially in the
form and content of Schedule 10.3 and any amendment or variations thereto
made in accordance with Section 10.3 hereof or Article 4 of the Plan of
Arrangement;
"PREMISES" has the meaning set out in Section 5.8;
"PURCHASE PRICE" has the meaning set out in Section 3.1;
"PURCHASED ASSETS" has the meaning set out in Section 2.1;
"PURCHASED BUSINESS" means the business carried on by the Vendor prior to
the Effective Time utilizing the Purchased Assets, consisting primarily of
the development, marketing and sale of ultra-miniaturized, ultra-low
power, software-programmable digital signal processing products;
"PURCHASERS" means collectively AMIS Canada, AMIS, and EMMA, and
"Purchaser" means any one of them;
"RELEASE" means any release, spill, emission, discharge, disposal,
dispersal, leaching or migration into the indoor or outdoor environment;
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"REMAINING EMPLOYEES" means all employees of the Vendor currently employed
in connection with the Purchased Business other than the Transferred
Employees and the Fixed Term Employees;
"SALE" includes any sale, lease, licence or other transfer to a party
other than Purchasers, Parentco or any of their Affiliates which shall be
deemed to have occurred when (a) in the case of semi-conductor chips or
other tangible products, such products have been shipped, or (b) in the
case of licensing, when the relevant license agreement has been executed
by the licensee and the subject technology delivered to the licensee, or
(c) in the case of services, when such services have been substantially
performed;
"SEC" means the United States Securities and Exchange Commission;
"SHAREHOLDERS" means the holders of shares in the capital of the Vendor;
"SHARE PURCHASE AGREEMENT" means the agreement between Parentco, AMI
Semiconductor Netherlands B.V., the Covenantors, and 2031272 Ontario Ltd
relating to the sale and purchase of the shares of dspfactory S.A.;
"SIGNING AMIS SHARE PRICE" means the closing price of an AMIS Share on the
date this Agreement is signed by the parties, as quoted on the NASDAQ
National Market;
"SPECIAL MEETING" means the special meeting of the Shareholders, holders
of Vendor Options and holders of Vendor Warrants, and holders of
Dspfactory Debentures, including any adjournment or postponement thereof,
to be convened to consider, and if thought advisable, to pass the
Arrangement Resolution;
"SYSTEMS" means: (a) all computer systems, hardware, equipment and
peripherals and all computer software and files included in the Purchased
Assets, including the Assigned Third Party Software Licences; and (b) all
process controls, environmental controls and any other support systems
included in the Purchased Assets which employ, store or process date/time
information in electronic form, which are used by the Vendor in the
operation of the Purchased Business as currently carried on by the Vendor
and are either owned or controlled by the Vendor;
"TAX" or "TAXES" means all taxes, charges, fees, levies or other
assessments, including all income, capital, sales, use, transfer, goods
and services, franchise, withholding, social security, payroll, premium,
employment, health, education, excise, business, property or other taxes,
customs duties, surtaxes, fees, assessments, assessments as required
insurance (such as workers' compensation insurance), late filing or
payment penalties, charges or governmental or statutory imposts of any
kind whatsoever imposed by any Governmental Authority or other taxing
authority, together with any interest, penalty, fine or other amount on,
or in lieu of non-collection of, late payment of or otherwise in respect
of, such taxes;
"TAX ACT" means the Income Tax Act (Canada);
- 15 -
"THIRD PARTY CLAIM" has the meaning set out in Section 14.3;
"TIME OF CLOSING" means 10:00 a.m. (Eastern Standard Time) on the Closing
Date, or such other time on the Closing Date as the Vendor or the
Purchasers may mutually determine;
"TRANSFERRED FIXED TERM EMPLOYEES" has the meaning set out in Section
11.3;
"TRANSFERRED EMPLOYEES" has the meaning set out in Section 11.2(d);
"TRANSFERRED INTELLECTUAL PROPERTY" has the meaning set out in Section
5.11(b);
"TRANSFERRED PERMITS" are as referenced in Schedule 5.15;
"VENDOR EMPLOYEE PLANS" has the meaning set out in Section 11.4(a);
"VENDOR OPTIONS" means the options to purchase Vendor Shares granted under
the Vendor's stock option plans;
"VENDOR WARRANTS" means the warrants of the Vendor issued to MVO
Investments Ltd. as evidenced by warrant certificates dated November 20,
2000 (as amended by amending agreement dated October 31, 2001) and dated
October 31, 2001 and to ▇.▇. ▇▇▇▇▇ Holdings 2000 Ltd. (as amended by
amending agreement dated November 1, 2001) and dated October 31, 2001; and
"WORKING CAPITAL" means all current assets less all current liabilities,
excluding both Excluded Assets and those liabilities listed under the
heading "Excluded Liabilities" in Schedule 3.9. Using this methodology,
the Working Capital as of February 29, 2004 was $2,503,645 (Canadian).
Such calculation is further set out in Schedule 3.9.
1.2 CURRENCY
Unless otherwise indicated, all dollar amounts referred to in this
Agreement are expressed in United States dollars.
1.3 SECTIONS AND HEADINGS
The division of this Agreement into Articles, Sections and Schedules
and the insertion of headings and an index are for convenience of reference only
and shall not affect the construction or the interpretation of this Agreement.
Unless otherwise specified herein, any reference in this Agreement to an
Article, Section or Schedule refers to the specified Article, Section of or
Schedule to this Agreement. In this Agreement, the terms "this Agreement",
"hereof", "herein", "hereunder" and similar expressions refer to this Agreement
and not to any particular part, Article, Section or other provision hereof and
include any agreement supplemental or ancillary hereto.
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1.4 RULES OF CONSTRUCTION
In this Agreement:
(a) words importing the singular number only shall include the plural
and vice versa and words importing the masculine gender shall
include the feminine and neuter genders and vice versa;
(b) the words "include", "includes" and "including" means "include",
"includes" or "including", in each case, "without limitation";
(c) reference to any agreement, indenture or other instrument in writing
means such agreement, indenture or other instrument in writing as
amended, modified, replaced or supplemented from time to time;
(d) reference to any statute shall be deemed to be a reference to such
statute as amended, re-enacted or replaced from time to time;
(e) if there is any conflict or inconsistency between the provisions
contained in the body of this Agreement and those of any Schedule,
the provisions contained in the body of this Agreement shall
prevail;
(f) time periods within which a payment is to be made or any other
action is to be taken hereunder shall be calculated excluding the
day on which the period commences and including the day on which the
period ends; and
(g) whenever any payment to be made or action to be taken hereunder is
required to be made or taken on a day other than a Business Day,
such payment shall be made or action taken on the next following
Business Day.
1.5 ACCOUNTING PRINCIPLES
In this Agreement, accounting terms that are not defined herein
shall be construed in accordance with GAAP. "GAAP" refers to generally accepted
accounting principles in Canada as recommended from time to time by the Canadian
Institute of Chartered Accountants.
1.6 ENTIRE AGREEMENT
This Agreement, together with the agreements specifically
contemplated herein or entered into or delivered in connection herewith,
constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior agreements, understandings, negotiations
and discussions, whether written or oral (including the letter of intent dated
May 11, 2004 and the letter dated June 17, 2004 from AMI Semiconductor Inc. to
the Vendor). There are no conditions, covenants, agreements, representations,
warranties or other provisions, express or implied, collateral, statutory or
otherwise, relating to the subject matter hereof except as herein provided or as
provided in other documents executed and delivered by the parties in connection
herewith.
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1.7 TIME OF ESSENCE
Time shall be of the essence of this Agreement.
1.8 APPLICABLE LAW; CONSENT TO JURISDICTION
This Agreement shall be construed, interpreted and enforced in
accordance with, and the respective rights and obligations of the parties shall
be governed by, the laws of the Province of Ontario without reference to the
conflict of laws principles thereof. Each of the parties hereby attorns to the
exclusive jurisdiction of the courts of the Province of Ontario and all courts
competent to hear appeals therefrom.
1.9 KNOWLEDGE
Where any matter is stated to be within the Vendor's knowledge in
this Agreement, the Vendor shall be deemed for purposes of this Agreement to
have the knowledge of the relevant facts that a senior manager of the Purchased
Business with responsibility for the matter in question would reasonably be
expected to have after due internal investigation and inquiry. Where any matter
is stated to be within the Purchasers' knowledge or Parentco's knowledge in this
Agreement, the Purchasers or Parentco, as the case may be, shall be deemed for
purposes of this Agreement to have the knowledge of the relevant facts that a
senior manager of the Purchasers or Parentco, as the case may be with
responsibility for the matter in question, would reasonably be expected to have
after due internal investigation and inquiry.
1.10 AMENDMENT AND WAIVERS
No amendment or waiver of any provision of this Agreement shall be
binding on either party unless consented to in writing by such party. No waiver
of any provision of this Agreement shall constitute a waiver of any other
provision, and no waiver shall constitute a continuing waiver unless otherwise
provided.
1.11 SEVERABILITY
If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
such determination shall not impair or affect the validity, legality or
enforceability of the remaining provisions hereof, and each provision is hereby
declared to be separate, severable and distinct. To the extent that any such
provision is found to be invalid, illegal or unenforceable, the parties hereto
shall act in good faith to substitute for such provision, to the extent
possible, a new provision with content and purpose as close as possible to the
provision so determined to be invalid, illegal or unenforceable.
1.12 SCHEDULES
The following Schedules are attached to and form part of this
Agreement:
Schedule 2.1(a) - Machinery and Equipment
Schedule 2.1(g) - Assigned Contracts
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Schedule 2.1(h) - Transferred Permits
Schedule 2.1(i) - Intellectual Property
Schedule 2.1(j) - Third Party Software Licences
Schedule 3.2 - Dspfactory Products and AMIS Products
Schedule 3.3 - Contract Assignment Costs and Debt Pay-off
Amounts
Schedule 3.4 - Escrow
Schedule 3.5 - Allocation of Purchase Price
Schedule 3.9 - Working Capital
Schedule 5.4 - No Violation
Schedule 5.5 - Sufficiency of Purchased Assets
Schedule 5.6 - Permitted Encumbrances
Schedule 5.7 - Leased Property
Schedule 5.11(c) - Limitations
Schedule 5.11(e) - Adverse Claims
Schedule 5.11(h) - Intellectual Property Claims
Schedule 5.12 - Insurance
Schedule 5.15 - Permits
Schedule 5.16 - Consents and Approvals
Schedule 5.17 - Insurance
Schedule 5.17(b) - Financial Statements
Schedule 5.18 - Actions, Suits Proceedings
Schedule 5.20 - Absence of Changes
Schedule 5.21 - Non-Arm's Length Transactions
Schedule 5.23(c) - Employment Arrangements
Schedule 5.24 - Major Customers
Schedule 5.25 - Product Warranties
Schedule 9.11 - Sales Leads
Schedule 10.3 - Plan of Arrangement
Schedule 11.1(a) - Offered Employees and Designated Key Employees
Schedule 11.1(b) - Offered Fixed Term Employees and Designated
Key Fixed Term Employees
Schedule 11.4(a) - Vendor Employee Plans
Schedule 11.4(c) - Employment Claims
Schedule 12.1(d) - Lease Assignment and Assumption Agreement
Schedule 12.2(f) - Share Purchase Agreement
Schedule 12.2(g) - Government Aid Agreements
Schedule 12.2(i) - Key Employee Shareholder Agreements and
Form of Lock-Up Agreements
Schedule 12.2(m) - Form of Opinion of the Vendor's Counsel
Schedule 12.2(n) - Phonak Agreement
Schedule 12.3(d) - Form of Opinion of the Purchaser's Counsel
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ARTICLE 2
PURCHASE AND SALE OF PURCHASED ASSETS
2.1 PURCHASED ASSETS
On the terms and subject to the conditions of this Agreement, the
Vendor hereby agrees to sell, assign and transfer to the Purchasers and the
Purchasers hereby agree to purchase from the Vendor, pursuant to the
Arrangement, effective as of the Effective Time, all of the property and assets
used in connection with or otherwise relating to the Purchased Business (other
than the Excluded Assets), whether tangible or intangible and of every kind and
description and wheresoever situate (collectively, the "Purchased Assets")
including, without limitation,:
(a) Machinery and Equipment. The machinery, equipment, hardware,
instrumentation, test equipment, fixtures, furniture, furnishings,
parts, supplies, accessories, tools and other fixed assets,
including the machinery, equipment and furniture listed in Schedule
2.1(a);
(b) Leases of Real Property. All rights under the Lease, together with
all leasehold improvements relating thereto;
(c) Intentionally left blank;
(d) Inventories. All inventories, including raw materials, parts,
accessories and all prototype inventories;
(e) Accounts Receivable. All accounts receivable, trade accounts, notes
receivable, book debts and other debts due or accruing due to the
Vendor and the benefit of all security for such accounts, notes and
debts;
(f) Prepaid Expenses. All prepaid expenses;
(g) Contracts. All rights under all orders and all of the Contracts
listed in Schedule 2.1(g) (collectively, the "Assigned Contracts")
(h) Licences and Permits. The full benefit of all Transferred Permits
under applicable law, including Environmental Permits, for the
operation of the Purchased Business or to lease the Leased Property,
including those listed in Schedule 2.1(h);
(i) Intellectual Property. All Intellectual Property, including the
registered trade-marks, trade-▇▇▇▇ applications, registered
copyrights, patents, patent applications, registered industrial
designs and industrial design applications listed in Schedule
2.1(i);
(j) Third Party Software Licences. The full benefit of all third party
software licences in favour of the Vendor and associated maintenance
agreements, including the third party software licences and
associated maintenance agreements listed in
- 20 -
Schedule 2.1(j), and all machine readable media containing copies of
all source code, object code, data files, records and other
information subject to or provided in connection with such third
party software licences and copies of all documentation, including
documents setting out applicable licence terms, operating procedures
and error recovery procedures provided by third parties or prepared
by the Vendor in connection with such licences (collectively, the
"Assigned Third Party Software Licences");
(k) Computer Hardware and Embedded Software. All computer hardware and
embedded software, including all rights under licences and other
agreements or instruments relating thereto;
(l) Books and Records. All books and records (other than those required
by law to be retained by the Vendor, copies of which will be made
available to the Purchasers), including customer lists, sales
records, price lists and catalogues, sales literature, advertising
material, data, production records, employee manuals, personnel
records (with respect only to the Transferred Employees and the
Transferred Fixed Term Employees), working papers and files,
engineering notes, diagrams and drawings (with respect to all
employees), supply records, inventory records and correspondence
files (together with, in the case of any such information which is
stored electronically, the media on which the same is stored);
(m) Goodwill. All goodwill, together with the exclusive right for the
Purchasers to represent themselves as carrying on the Purchased
Business in succession to the Vendor and the right to use any words
indicating that the Purchased Business is so carried on, including
all of Vendor's right and interest to use the name "Dspfactory", or
any variation thereof, as part of the name or style under which the
Purchased Business or any part thereof is carried on by the
Purchasers, and any product names used in connection with the
Dspfactory Products and/or the Purchased Business, whether past,
present or under development;
(n) Cash and cash equivalents. All cash on hand or in banks or other
depositories, and
(o) Employee Plans. All rights in connection with, and all assets of,
the Vendor's retirement, pension and group plans relating
specifically to the Transferred Employees and the Transferred Fixed
Term Employees.
2.2 EXCLUDED ASSETS
The Purchased Assets shall not include any of the following property
and assets of the Vendor (collectively, the "Excluded Assets"):
(a) Income Taxes. All income tax instalments paid by the Vendor and the
right to receive any refund of income taxes paid by the Vendor or
credits of Taxes due to the Vendor including, without limitation,
all federal and provincial scientific research and development
credits and other investment tax credits;
- 21 -
(b) Intercompany Receivables and Payables. Any liability or asset of the
Vendor that is being held by an Affiliate of the Vendor and any
liability or asset of an Affiliate of the Vendor that is being held
by the Vendor or another Affiliate of the Vendor.
(c) Shares of dspfactory S.A. All issued and outstanding shares in the
capital stock of dspfactory S.A. which are the subject of the Share
Purchase Agreement between the parties and/or their Affiliates;
(d) Books and Records. All personnel records of the Vendor pertaining to
the Remaining Employees and any originals of books and records of
the Vendor required by applicable law to be retained by the Vendor
(provided that Purchasers shall receive copies of all such books and
records of the Vendor required by applicable law to be retained by
the Vendor);
(e) Actions, etc. All rights of action and claims of the Vendor against
any person or persons arising by reason of any facts or
circumstances that occurred or existed before the Time of Closing
whether or not an action or other proceeding shall have been
commenced before the Time of Closing, other than rights of action
and claims that relate exclusively to any of the Purchased Assets or
the Assumed Liabilities;
(f) Corporate Records. All of the Vendor's corporate charters, minute
and record books;
(g) Insurance. The benefit of all insurance policies;
(h) Employee Plans. All rights in connection with, and all assets of,
the Vendor's retirement, pension and group plans relating
specifically to the Remaining Employees;
(i) Non-Assigned Contracts. The Shareholders Agreement and those
Contracts set out in Schedule 5.16 which are indicated as being "not
required" to be assigned and for which the Vendor is unable with the
exercise of reasonable efforts to obtain the required consent to
assign to the Purchasers. The parties agree to amend Schedule 2.1(g)
prior to Closing to reflect only those Contracts actually being
assigned hereunder; and
(j) Notes. All notes issued by holders of In-the-Money Options (as
defined in the Plan of Arrangement) to the Vendor in connection with
loans made by the Vendor to such holders of the exercise price for
the In-the-Money Options.
ARTICLE 3
PURCHASE PRICE
3.1 PURCHASE PRICE
The consideration (the "Purchase Price") payable by the Purchasers
to the Vendor for the Purchased Assets shall be determined as set out below,
subject to adjustment pursuant to
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Sections 3.3 and 3.9 and shall not exceed $44,850,000, plus the assumption by
the Purchasers of the Assumed Liabilities, payable as follows:
(a) cash in an amount of $19,925,000 at the Time of Closing pursuant to
Section 3.3;
(b) a number of AMIS Shares (the "Closing Shares") equal to the quotient
obtained when $16,425,000 is divided by the Signing AMIS Share Price
pursuant to Section 3.3; and
(c) a maximum additional number of AMIS Shares having an aggregate share
value at the time of issuance of up to $8,500,000, subject to the
provisions of and payable on the dates and in the manner described
in Section 3.2 (the "Maximum Share Earn-Out").
3.2 SHARE EARN-OUT
(a) Provided that the 2005 Dspfactory Revenue is greater than $20,000,000,
the Purchasers shall transfer to the Vendor a number of AMIS Shares calculated
as follows (the "2005 Earn-Out Shares"):
(i) if the 2005 Dspfactory Revenue is $22,000,000 or more, that
number of AMIS Shares equal to the quotient obtained when
$8,500,000 is divided by the Average AMIS Share Price; or
(ii) if the 2005 Dspfactory Revenue is greater than $20,000,000 but
less than $22,000,000, that number of AMIS Shares equal to the
quotient obtained when the 2005 Earn-Out Value is divided by
the Average AMIS Share Price, where the 2005 Earn-Out Value is
equal to either (A) the product of (1) $8,500,000 and (2) the
quotient obtained when (I) the amount by which the 2005
Dspfactory Revenue exceeds $20,000,000, is divided by (II)
2,000,000; or (B) zero if the 2005 Dspfactory Revenue is
$20,000,000 or less.
(b) Provided that the 2005 Earn-Out Shares were not transferred pursuant
to Section 3.2(a)(i) and further provided that the 2006 Dspfactory Revenue is
greater than $23,000,000, the Purchasers shall transfer to the Vendor a number
of AMIS Shares calculated as follows (the "2006 Earn-Out Shares"):
(i) if the 2006 Dspfactory Revenue is $26,000,000 or more, that
number of AMIS Shares equal to the quotient obtained when (A)
the amount by which $8,500,000 exceeds the 2005 Earn-Out Value
is divided by (B) the Average AMIS Share Price; or
(ii) if the 2006 Dspfactory Revenue is greater than $23,000,000 but
less than $26,000,000, that number of AMIS Shares equal to the
quotient obtained when the 2006 Earn-Out Value is divided by
the Average AMIS Share
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Price, where the 2006 Earn-Out Value is equal to the amount,
if any, by which:
(A) the product of
(I) $8,500,000 and
(II) the quotient obtained when (i) the amount by which
the 2006 Dspfactory Revenue exceeds $23,000,000,
is divided by (ii) 3,000,000,
exceeds
(B) the 2005 Earn-Out Value.
(c)
(i) Within 60 days of each of the fiscal year-ends of Parentco
ending December 31, 2005 and December 31, 2006, Parentco shall
deliver to the Vendor and each Covenantor a report which shall
include the unaudited income statement of the Purchased
Business and all other financial statements and information
necessary to determine the amount of Dspfactory Revenue for
such year;
(ii) Any AMIS Shares paid pursuant to Sections 3.2(a) shall be
transferred on the date which is twenty (20) Business Days
following the public filing by Parentco of its audited
financial statements for the year ending December 31, 2005;
(iii) Any AMIS Shares transferred pursuant to Sections 3.2(b) shall
be transferred on the date which is twenty (20) Business Days
following the public filing by Parentco of its audited
financial statements for the year ending December 31, 2006;
(iv) In the event that there is a dispute between the parties over
the number of AMIS Shares to be transferred pursuant to
Section 3.2(a) or (b), Purchasers shall transfer that number
of AMIS Shares which is not in dispute as provided above and
any additional AMIS Shares thereafter due shall be transferred
on the third Business Day following the date of the resolution
of the dispute;
(v) Provided that the 2005 Earn-Out shares were not transferred
pursuant to Section 3.2(a)(i), Purchasers and their Affiliates
shall permit an independent certified public accountant hired
by the Vendor or its representatives at its or their sole
expense and an additional representative of the Vendor who is
familiar with Dspfactory Products, during normal business
hours and upon thirty (30) days advance written notice to
Purchasers, to examine those portions of Purchasers' or their
Affiliates'
- 24 -
corporate books, accounts, records and other documents which
are required to ascertain whether the Purchasers' calculation
of the amounts due pursuant to Section 3.2(a) was accurate and
included all of the revenues properly includable, taking into
account the definition of 2005 Dspfactory Revenue, Dspfactory
Products and Sale. Only one such examination shall be
conducted in 2006 relating to the payment of the 2005 Earn-Out
Shares. Provided that the 2006 Earn-Out Shares are not
transferred pursuant to Section 3.2(b)(i), a second
examination may be conducted in 2007 to ascertain the accuracy
of the amount paid pursuant to Section 3.2(b)(ii), including
the revenues properly includable, taking into account the
definition of 2006 Dspfactory Revenue, Dspfactory Products and
Sale. The additional representative of the Vendor shall be
required to represent to the Purchasers in writing that he or
she is not a director, officer, shareholder, employee,
investor, consultant of or supplier to a competitor of the
Purchasers or their Affiliates. The accountant and additional
representative of the Vendor shall sign a confidentiality
agreement with Purchasers agreeing to keep all such
information learned from the audit confidential except that
they may disclose the amount of 2005 Dspfactory Revenue and/or
the amount of the 2006 Dspfactory Revenue, as the case may be,
to shareholders of Vendor and may disclose to the Covenantors
(excluding any Covenantor which cannot represent that it is
not a director, officer, shareholder, employee, investor,
consultant of or supplier to a competitor of the Purchasers or
their Affiliates) the basis of the calculation of the 2005
Dspfactory Revenue and/or the 2006 Dspfactory Revenue, as the
case may be, (including the reasons for including or excluding
specific amounts) but not any material technical information
relating to the products of the Purchasers or their
Affiliates.
(d) Contemporaneously with any transferred of AMIS Shares pursuant to
Subsections 3.2(a) and 3.2(b), Parentco shall provide to the Vendor a
certificate of a duly authorized officer of Parentco certifying that at the time
of transfer of said AMIS Shares the representations and warranties of Parentco
in this Agreement are true and correct at such date of issuance with the same
force and effect as if such representations and warranties had been made at and
as of such time.
3.3 CLOSING DATE PAYMENT
(a) At the Time of Closing, the Purchasers shall pay to the Vendor
$19,925,000 adjusted as follows (the "Closing Date Payment"):
(i) the following amounts shall be subtracted: (1) a sum equal to
the pay-off amounts for the outstanding debts set out in
Schedule 3.3, and (2) one-half of the Contract Assignment
Costs as set out in Schedule 3.3 (the "Closing Date Payment"),
and
(ii) the following amount shall be added: the product obtained when
the Effective Time Price is multiplied by the aggregate number
of AMIS
- 25 -
Shares transferred to the Electing Swiss Shareholders as part
of the payment of the Preferred Share Price Consideration
pursuant to the Plan of Arrangement (all capitalized terms in
this Section 3.3(a)(ii) shall be as defined in the Plan of
Arrangement).
The Closing Date Payment shall be made by means of wire transfer in immediately
available funds to an account designated by the Vendor.
(b) At the Time of Closing, the Purchasers shall deliver to the Vendor a
certificate in the name of the Vendor representing the Closing Shares minus the
aggregate number of AMIS Shares transferred to the Electing Swiss Shareholders
as part of the payment of the Preferred Share Price Consideration pursuant to
the Plan of Arrangement (as such terms are defined in the Plan of Arrangement).
(c) In addition, at the Time of Closing, the Purchasers will pay the
Contract Assignment Costs and the pay-off amounts for the outstanding debts set
out in Schedule 3.3.
3.4 ESCROW
As security for the Covenantors' potential obligations with respect
to Section 3.9 and any indemnity obligations under this Agreement and/or the
Share Purchase Agreement, the Purchasers shall withhold and pay the sum of
$2,600,000 (the "Escrow Amount") to the Escrow Agent. The Escrow Amount shall be
held by the Escrow Agent pursuant to the terms and conditions of the indemnity
escrow agreement in the form attached hereto as Schedule 3.4 (the "Escrow
Agreement"), in a separate interest bearing escrow account. The Escrow Amount
held by the Escrow Agent pursuant to this Section 3.4 shall not limit the
indemnification obligations of the Vendor under this Agreement.
3.5 ALLOCATION OF PURCHASE PRICE
(a) The Purchase Price shall be allocated among the Purchased Assets in
accordance with Schedule 3.5.
(b) The Vendor and the Purchasers each:
(i) will complete and file all returns required by applicable
federal, state, provincial, municipal and local laws,
statutes, regulations and ordinances relating to Taxes in a
manner consistent with Schedule 3.5; and
(ii) will not take a position on any such return that is
inconsistent with the allocation provided for in Schedule 3.5
without the consent of the other party.
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3.6 TRANSFER TAXES
The Purchasers shall be liable for and shall pay on a timely basis
any payable federal and provincial sales taxes (including any retail sales
taxes) and any other taxes, duties, fees or other like charges of any
jurisdiction properly payable in connection with the transfer of the Purchased
Assets by the Vendor to the Purchasers.
3.7 GST MATTERS
Within three Business Days prior to Closing, the Purchasers shall notify the
Vendor in writing as to whether each of the Purchasers is a registrant for the
purposes of the ETA and, shall provide the Vendor with each registrant
Purchaser's registration number. In the event that any of the Purchasers is not
a registrant, the Parties shall agree upon an amendment to Schedule 3.5, which
amendment shall set out a reasonable allocation of the purchase price paid by
such non-registered Purchaser for the assets purchased by it under this
Agreement. Upon Closing, the Purchasers shall pay to the Vendor in addition to
the Purchase Price all amounts payable pursuant to the ETA and the Vendor shall
remit such amounts as required pursuant to the ETA.
3.8 INCOME TAX ELECTION
The Purchasers and the Vendor agree to elect jointly in the
prescribed form under Section 22 of the Tax Act as to the sale of the accounts
receivable and other assets which are referred to in Section 2.1 and described
in Section 22 of the Tax Act and to designate in such election an amount equal
to the portion of the Purchase Price allocated to such assets pursuant to
Section 3.5(a) as the consideration paid by the Purchasers therefor.
3.9 WORKING CAPITAL ADJUSTMENT
Within 30 days after the Closing Date, the Vendor will provide the Purchasers
with unaudited consolidated financial statements of the Vendor as of the Closing
Date (the "Closing Financial Statements"), which Closing Financial Statements
shall be prepared on the same basis and consistent with the same accounting
standards, methods and policies used in compiling the Financial Statements, and
a calculation of Working Capital as of the Effective Time (the "Effective Time
Working Capital"), which amount shall be calculated consistent with the method
used to calculate Working Capital as of February 29, 2004. The Purchasers,
acting reasonably, shall have 30 days to review and approve the Closing
Financial Statements and calculation of the Effective Time Working Capital. If,
at the end of such 30 day period, the Vendor and the Purchasers have not agreed
on the Closing Financial Statements and the calculation of the "Effective Time
Working Capital, then the Closing Financial Statements and the calculation of
the Effective Time Working Capital shall not be determined pursuant to Article
14 but shall be determined in writing (which determination shall be final,
binding and not subject to appeal) by a Canadian nationally-recognized
accounting firm selected by agreement between the Vendor and the Purchasers. In
the event that the Effective Time Working Capital is less than Cdn. $2,000,000,
the Vendor shall pay Purchasers the amount of such difference (the "Working
Capital Adjustment") within 70 days of the Closing Date by wire transfer in
immediately available funds in accordance with instructions to be provided by
the Purchasers. In the event of a dispute between the parties as to the Working
Capital calculation, Vendor shall
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pay the undisputed amount within 10 days following the end of such 30 day period
any remaining amount shall be paid within fifteen (15) days of the determination
by the accounting firm. Each of the Covenantors (other than the Vendor), jointly
and severally, unconditionally and irrevocably guarantee in favour of the
Purchasers the due and punctual payment of any amounts due and owing by the
Vendor to the Purchasers under this Section 3.9. This shall be a continuing,
absolute and unconditional guarantee and shall not be subject to any set-off,
counterclaim, violation or other diminution.
ARTICLE 4
LIABILITIES
4.1 ASSUMPTION OF CERTAIN LIABILITIES BY THE PURCHASERS
On the terms and subject to the conditions of this Agreement and as
additional consideration for the Purchased Assets, AMIS Canada agrees to assume
on the Closing Date the obligations and liabilities of the Vendor with respect
to (a) the Accounts Payable, (b) the Transferred Employees to the extent such
liabilities and obligations arise from the employment of the Transferred
Employees by the Purchasers or the termination of such employment by the
Purchasers on or after the Effective Time (including, for greater certainty, the
portion of any severance payment required under Canadian law, whether statutory
or common law (but not pursuant to any contract or understanding with Vendor)
for a Transferred Employee employed and later terminated by a Purchaser which is
based upon such Terminated Employee's length of service with the Vendor and,
where applicable, with Unitron Industries Ltd.), and (c) the obligations and
liabilities (without duplication) of the Vendor in connection with the Purchased
Assets which accrue after the Effective Time under or in respect of: (i) the
Assigned Contracts; (ii) the Assigned Third Party Software Licences; (iii) the
Transferred Permits; (iv) the Lease Assignment and Assumption Agreement; and (v)
the Government Aid Agreements (collectively, the "Assumed Liabilities").
4.2 EXCLUDED LIABILITIES
Notwithstanding anything to the contrary in this Agreement, the
Purchasers shall not assume, and the Vendor shall be solely responsible for, any
liabilities relating to the Excluded Assets or liabilities other than Assumed
Liabilities, including but not limited to any indebtedness of the Vendor or any
of its Affiliates to any of its or their shareholders (collectively, the
"Excluded Liabilities").
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE COVENANTORS
Each of the Covenantors, jointly and severally, represents and
warrants to the Purchaser as follows except that the representations and
warranties set out in Section 5.2, the second sentence of Section 5.21, and the
first sentence of Section 5.29 to the extent it relates to Section 5.2 and 5.21
(second sentence only) are made severally only by each Covenantor with respect
to such Covenantor only, and acknowledges that the Purchasers are relying on
such representations and warranties in connection with its purchase of the
Purchased Assets:
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5.1 ORGANIZATION
The Vendor is a corporation duly incorporated and organized and
validly existing under the laws of the Province of Ontario and has the corporate
power to own or lease its property, to carry on the Purchased Business as now
being conducted by it, to enter into this Agreement and to perform its
obligations hereunder. The Vendor is duly qualified as a corporation to do
business in all jurisdictions in which the Purchased Business is conducted in a
manner so as to require such qualification.
5.2 AUTHORIZATION
This Agreement has been duly authorized, executed and delivered and
is a legal, valid and binding obligation of each Covenantor, enforceable against
each Covenantor by the Purchaser in accordance with its terms, except (a) as
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
and other laws affecting the rights and remedies of creditors generally, and (b)
as the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defences and to the discretion of a
court of competent jurisdiction before which any proceeding may be brought.
5.3 NO OTHER AGREEMENTS TO PURCHASE
No person other than the Purchasers has any written or oral
agreement or option or any right or privilege (whether by law, pre-emptive or
contractual) capable of becoming an agreement or option for the purchase or
acquisition from the Vendor of any of the Purchased Assets, other than pursuant
to purchase orders accepted by the Vendor in the ordinary course of the
Purchased Business.
5.4 NO VIOLATION
Except as set out in Schedule 5.4, the execution and delivery of
this Agreement by the Vendor and the consummation of the transactions herein
provided for do not and will not result in: (a) the breach or violation of any
of the provisions of, or constitute a default under, or conflict with or cause
the acceleration of any obligation of the Vendor under: (i) any Assigned
Contract, Assigned Third Party Software Licence or Permit with respect to the
Purchased Assets to which the Vendor is a party, or by which it or the Purchased
Business is bound or the Purchased Assets are subject; (ii) any provision of its
certificate of incorporation or by-laws or resolutions of the board of directors
(or any committee thereof) or shareholders of the Vendor; (iii) any shareholders
agreement entered into by the shareholders of the Vendor; (iv) any judgment,
decree, order or award of any court, Governmental Authority or arbitrator having
jurisdiction over the Vendor; or (v) any applicable law, statute, ordinance,
by-laws, regulation or rule; or (b) the creation or imposition of any
Encumbrance on any of the Purchased Assets.
5.5 SUFFICIENCY OF PURCHASED ASSETS
The Purchased Assets owned or leased by the Vendor are sufficient to
carry on the Purchased Business in substantially the same manner as the
Purchased Business is carried on by the Vendor prior to the date hereof except
that no representation or warranty is made to the
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extent that the ability to so carry on business is diminished by the absence of
employees who are not offered employment by the Purchasers or who do not accept
such offer. All tangible Purchased Assets are in good operating condition and
are in a state of good repair and maintenance, reasonable wear and tear
excepted. During the two years preceding the date of this Agreement, there has
not been any significant interruption of operations (being an interruption of
more than one day) of the Purchased Business due to inadequate maintenance of
any of the Purchased Assets. Except as set out on Schedule 5.5, all the tangible
Purchased Assets are situated at the Leased Property.
5.6 TITLE TO PERSONAL PROPERTY
The Purchased Assets (other than Intellectual Property) are owned
beneficially by the Vendor with a good and marketable title thereto, free and
clear of all Encumbrances other than Permitted Encumbrances.
5.7 REAL PROPERTY LEASE
Other than the Lease, the Vendor has no interest in any real
property, and except for the lease (the "Lease") described in Schedule 5.7
relating to the real property that is leased by the Vendor (the "Leased
Property"), the Vendor is not a party to any other lease or agreement to lease
in respect of any real property which is used in the Purchased Business, whether
as lessor or lessee. The Vendor occupies the Leased Property and has the
exclusive right to occupy and use the Leased Property upon the terms and
conditions contained in the Lease. The Lease is in good standing and in full
force and effect, and neither the Vendor nor to the Vendor's knowledge any other
party thereto is in breach of any covenants, conditions or obligations contained
therein. The Vendor has made available to the Purchasers a true and complete
copy of the Lease and all amendments thereto and no other terms apply to the
Leased Property.
5.8 LEASED PROPERTY
All buildings, structures, improvements and appurtenances situated
on the Leased Property (collectively, the "Premises") are in good operating
condition and in a state of reasonably good maintenance and repair, are adequate
and suitable for the purposes for which they are currently being used and the
Vendor has adequate rights of ingress and egress for the operation of the
Purchased Business in the ordinary course as currently conducted. To the
knowledge of the Vendor, none of such buildings, structures, improvements or
appurtenances (or any equipment therein), nor the operation or maintenance
thereof, violates any material restrictive covenant or any provision of any
federal, provincial or municipal law, ordinance, rule or regulation, or
encroaches on any property owned by others. Without limiting the generality of
the foregoing:
(a) to the knowledge of the Vendor, the Leased Property and the
Premises, the current uses thereof and the conduct of the Purchased
Business comply with all regulations, statutes, enactments, laws and
by-laws, including those dealing with zoning, parking, access,
loading facilities, landscaped areas, building construction, fire
and public health and safety and Environmental Laws;
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(b) no alteration, repair, improvement or other work has been ordered,
directed or requested in writing to be done or performed to or in
respect of the Leased Property and the Premises or to any of the
plumbing, heating, elevating, water, drainage or electrical systems,
fixtures or works by any municipal, provincial or other competent
authority, which alteration, repair, improvement or other work has
not been completed, and the Vendor knows of no written notification
having been given to them or to the Purchased Business of any such
outstanding work being ordered, directed or requested, other than
those which have been complied with;
(c) all accounts for work and services performed and materials placed or
furnished upon or in respect of the Leased Property and the Premises
at the request of the Vendor have been fully paid and satisfied and
no person is entitled to claim a lien under the Construction Lien
Act (Ontario) against the Leased Property or the Premises or any
part thereof, other than current accounts in respect of which the
payment due date has not yet passed;
(d) there is nothing owing in respect of the Leased Property and the
Premises by the Vendor to any municipal corporation or to any other
corporation or commission owning or operating a public utility for
water, gas, electrical power or energy, steam or hot water, or for
the use thereof, other than current accounts in respect of which the
payment due date has not yet passed;
(e) no part of the Leased Property or the Premises has been taken or
expropriated by any federal, provincial, municipal or other
competent authority nor has any notice or proceeding in respect
thereof been given or commenced;
(f) to the knowledge of the Vendor, there are no Encumbrances, other
than Permitted Encumbrances, which affect the Leased Property or the
Premises that would not be learned by conducting a title search on
the property in the normal course of business;
(g) the Leased Property and the Premises are fit for its present use,
and there are no material or structural repairs or replacements
which are necessary or advisable and, without limiting the
generality of the foregoing, there are no repairs to, or
replacements of, the roof or the mechanical, electrical, heating,
ventilating, air-conditioning, plumbing or drainage equipment or
systems which are necessary or advisable to permit the continued
operation of the Purchased Business, and none of the Leased Property
or the Premises is currently undergoing any alteration or renovation
nor is any such alteration or renovation contemplated; and
(h) to the knowledge of the Vendor, there are no outstanding levies,
charges or fees assessed against the Leased Property or the Premises
by any public authority (including development or improvement
levies, charges or fees).
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5.9 INVENTORIES
The inventories of the Vendor relating to the Purchased Business do
not include any material items which the Vendor has not recorded a sale for such
class of inventory item for a period of greater than six months, below standard
quality or of a quality or quantity not useable or saleable in the normal course
of business, the value of which has not been written down on its books of
account to net realizable market value. The inventory levels of the Vendor are
at such amounts as are required for the operation of the Purchased Business as
presently conducted by the Vendor.
5.10 ACCOUNTS RECEIVABLE
All accounts receivable, book debts and other debts due or accruing
to the Vendor in connection with the Purchased Business are bona fide and good
and, subject to an allowance for doubtful accounts which have been reflected on
the books of the Vendor in accordance with GAAP, collectible without set-off or
counterclaim.
5.11 INTELLECTUAL PROPERTY
(a) Schedule 2.1(j) lists all Contracts and amendments thereto which set
forth the terms of the Assigned Third Party Software Licences except for
Contracts in respect of COTS Software. Subject to the terms of the Permitted
Encumbrances, the Assigned Third Party Software Licences govern the Vendor's
rights to assign the Assigned Third Party Software Licences to the Purchaser.
(b) The Intellectual Property listed in Schedule 2.1(i), the unregistered
owned Intellectual Property of the Vendor, the COTS Software, and the Assigned
Third Party Software Licences (collectively the "Transferred Intellectual
Property") comprise all Intellectual Property required in order for the
Purchasers to conduct the Purchased Business in the manner conducted by the
Vendor prior to the date hereof.
(c) The Vendor is the beneficial owner of the rights which are to be
conferred by the assignment of the Transferred Intellectual Property, free and
clear of all Encumbrances except for Permitted Encumbrances and the terms and
conditions contained in the Assigned Third Party Licences and is not a party to
or bound by any Contract or any other obligation whatsoever that limits or
impairs its ability to sell, transfer, assign or convey the Transferred
Intellectual Property to the Purchaser, except as specified in the Contracts
specifically listed in Schedule 2.1(j), and except as set out in agreements
governing the COTS Software and except as set out in Schedule 5.11(c), and
except as set out in agreements governing the Permitted Encumbrances.
(d) None of the Transferred Intellectual Property (other than the COTS
Software) has been used or enforced or failed to be used or enforced in a manner
that would result in the abandonment, cancellation or unenforceability of any of
the Transferred Intellectual Property, except for the Intellectual Property
applications marked "abandoned" on Schedule 2.1(i). The Vendor has maintained or
caused to be maintained the rights to Transferred Intellectual Property in a
prudent and commercially reasonable manner (provided that no representation is
given that the Vendor has applied for all possible registrations of the
Transferred Intellectual Property) and,
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without limiting the generality of the foregoing, has registered or applied to
register the Transferred Intellectual Property as set out in Schedule 2.1(i),
has paid all applicable fees due under all Contracts, including the Assigned
Third Party Software Licences, for the Transferred Intellectual Property and for
all registrations and applications for registrations listed on Schedule 2.1(i),
and has renewed or made applications for renewal within the applicable renewal
periods for the Assigned Third Party Software Licences.
(e) Except as specifically disclosed in Schedule 5.11(e), the Vendor has
not received any notice of any adverse claim or litigation and is not party to
any litigation challenging the validity, ownership or enforceability of any of
the Transferred Intellectual Property, or of the Vendor's right to use or assign
the Transferred Intellectual Property to the Purchaser. Except as set out in
Schedule 5.11(e), the Vendor has no knowledge of any state of facts which casts
doubt on the validity or enforceability of any of the Transferred Intellectual
Property (other than the COTS Software).
(f) The products of the Vendor as at the date hereof operate substantially
in accordance with the specifications and documentation therefor provided to the
Vendor's customers.
(g) To the knowledge of the Vendor, the conduct of the Purchased Business,
as currently carried on by the Vendor, including the use of the Transferred
Intellectual Property (other than the COTS Software), does not infringe upon or
breach the Intellectual Property, domestic or foreign, of any other person. The
Vendor has not received any notice of any adverse claim or litigation and is not
party to any litigation alleging that the conduct of the Purchased Business, as
currently carried on by the Vendor, infringes upon or breaches any Intellectual
Property of any other person, except as specifically disclosed in Schedule
5.11(e). The Vendor has no knowledge of any state of facts or event which would
provide any other person with a reasonable basis for claiming that the conduct
of the Purchased Business, as currently carried on by the Vendor, including the
use of the Transferred Intellectual Property (other than the COTS Software),
infringes upon or breaches the Intellectual Property of that other person.
(h) Except as set out in Schedule 5.11(h), to the knowledge of the Vendor,
there is no basis for any claim that the Vendor's Intellectual Property rights
in the Transferred Intellectual Property (other than the COTS Software) are
being or have been infringed or breached by any other person.
(i) The Vendor has made available to the Purchasers true and complete
copies of all Contracts, software, media and documentation comprising the
Transferred Intellectual Property.
(j) Provided all required consents to transfer set out in Schedule 5.16
are obtained, the assignment by the Vendor to the Purchasers of the Transferred
Intellectual Property (except with respect to the COTS Software) does not and
will not violate any Contracts or invalidate any such Intellectual Property.
(k) The Systems owned by the Vendor and, to the Vendor's knowledge, the
Systems licensed to the Vendor, including the Assigned Third Party Software
Licences, are free of any disabling codes or instructions (each, a "Disabling
Code"), and any virus or other contaminant (each, a "Contaminant"), that may, or
may be used to, access, modify, delete, damage or disable
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the Systems or that may result in damage thereto. The Vendor has taken
reasonable steps and implemented all reasonable procedures to ensure that the
Systems are free from Disabling Codes and Contaminants. The Vendor has taken all
reasonable steps and implemented all reasonable procedures to safeguard the
Systems and restrict unauthorized access thereto.
5.12 INSURANCE
Attached as Schedule 5.12 is a list of all insurance policies
maintained by the Vendor in respect of the Purchased Assets. The Vendor is not
in default with respect to any of the material provisions contained in any such
insurance policy.
5.13 NO EXPROPRIATION
No notice or proceeding in respect of an action by a Governmental
Authority to expropriate any of the Purchased Assets has been given or
commenced, and the Vendor is not aware of any intent or proposal to give any
such notice or commence any such proceedings.
5.14 AGREEMENTS AND COMMITMENTS
Except as listed on Schedules 2.1(g), 2.1(i), 2.1(j) and 5.7 and
except for COTS Software and Contracts with employees who do not become
Transferred Employees, the Vendor is not a party to or bound by any Contract
that (a) will be required for the operation of the Purchased Business in
substantially the same manner as the Vendor currently conducts the Purchased
Business or (b) applies to the Purchased Assets. Schedules 2.1(g) and 2.1(j)
list the Assigned Contracts and the Assigned Third Party Software Licences,
respectively (collectively, the "Assigned Agreements"). The Vendor has performed
in all material respects all of the obligations required to be performed by it
and is entitled to all benefits under, and is not in default or, to the
knowledge of the Vendor, alleged to be in default in respect of any of the
Assigned Agreements. All of the Assigned Agreements are in good standing and in
full force and effect, and no event, condition or occurrence exists with respect
to the Vendor or, to the knowledge of the Vendor, with respect to the
counterparties to the Assigned Agreements, which, after notice or lapse of time
or both, would constitute a default under any of the Assigned Agreements. The
Vendor has made available to the Purchasers a true and complete copy of each
Assigned Agreement.
5.15 COMPLIANCE WITH LAWS; GOVERNMENTAL AUTHORIZATIONS
The Vendor has complied in all material respects with all laws,
statutes, ordinances, regulations, rules, judgments, decrees, franchises or
other governmental authorizations, guidelines, policies or orders applicable to
the Purchased Business and/or to the Purchased Assets. The Transferred Permits
and the Non-Transferred Permits (collectively, the "Permits"), as set out in
Schedule 2.1(h) and Schedule 5.15, respectively, are all the (a) government
permits; and (b) other approvals, consents, certificates, registrations and
authorizations (whether governmental, regulatory or otherwise) held by or
granted to the Vendor which are applicable to the Purchased Business, the Leased
Property, the Premises and/or the Purchased Assets, and there are no other
material (i) government permits (including Environmental Permits), and (ii)
other licences, approvals, consents, registrations, certificates or
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authorizations (including Environmental Permits) necessary for the Purchasers to
conduct the Purchased Business in substantially the same manner as the Vendor
currently conducts the Purchased Business or to own or lease any of the
Purchased Assets. Each Permit is valid, binding and in full force and effect,
the Vendor is not in violation, default or breach of any Permit, and no
proceeding is pending or, to the knowledge of the Vendor, threatened for
violation of or to revoke or limit any Permit. The Vendor has made available to
the Purchasers a true and complete copy of each Permit and all amendments
thereto.
5.16 CONSENTS AND APPROVALS
There is no requirement to make any filing with, give any notice to
or to obtain any licence, permit, certificate, registration, authorization,
consent or approval of, any Governmental Authority or any other person as a
condition to the lawful consummation of the transactions contemplated by this
Agreement, except for the filings, notifications, licences, permits,
certificates, registrations, authorizations, consents and approvals described in
Schedule 5.16. Except as set out in Schedule 5.16, under any Contract to which
the Vendor is a party or by which it or the Purchased Business is bound or the
Purchased Assets are subject, there is no requirement to give notice to, or to
obtain the consent or approval of, any party to such agreement, instrument or
commitment relating to the consummation of the transactions contemplated by this
Agreement.
5.17 BOOKS AND RECORDS
(a) The books and records to be delivered by the Vendor to the Purchasers
pursuant to Section 2.1(l) fairly and correctly set out and disclose in all
material respects all of the information contained therein.
(b) The Financial Statements have been prepared in accordance with GAAP,
applied on a basis consistent with prior periods, present fairly the assets,
liabilities (whether accrued, absolute, contingent or otherwise) and financial
condition of the Vendor as at the date of the Financial Statements and the
sales, earnings and results of operations of the Vendor for the respective
periods covered by the Financial Statements.
5.18 LITIGATION
Except as set out in Schedule 5.18, there are no actions, suits or
proceedings in progress or affecting or, to the knowledge of the Vendor,
threatened against the Vendor in respect of or affecting the Purchased Business,
the Leased Property, the Premises or any of the Purchased Assets or any part
thereof, at law or in equity or before or by any court, Governmental Authority,
domestic or foreign, or before or by an arbitrator or arbitration board. The
Vendor has no knowledge of any ground on which any such action, suit or
proceeding might be commenced with any reasonable likelihood of success.
5.19 NO LIABILITIES
There are no liabilities or commitments of the Vendor or its
Affiliates, whether or not accrued and whether or not determined or
determinable, in respect of which the Purchasers
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may become liable on or after the consummation of the transaction herein
provided for, other than the Assumed Liabilities.
5.20 ABSENCE OF CHANGES
Except as listed in Schedule 5.20, since February 29, 2004, the
Purchased Business has been carried on only in the ordinary and normal course
consistent with past practice and there has not been: (a) any material adverse
change in the condition (financial or otherwise), assets, liabilities,
operations, earnings, business or prospects of the Purchased Business; (b) any
damage, destruction or loss (whether or not covered by insurance) affecting the
Purchased Assets; (c) any obligation or liability (whether absolute, accrued,
contingent or otherwise, and whether due or to become due) incurred by the
Vendor in connection with the Purchased Business, other than those incurred in
the ordinary and normal course of the Purchased Business and consistent with
past practice; (d) any payment, discharge or satisfaction of any Encumbrance,
liability or obligation of the Vendor in relation to the Purchased Business or
the Purchased Assets (whether absolute, accrued, contingent or otherwise, and
whether due or to become due) other than payment of accounts payable, tax
liabilities and other debts and liabilities incurred in the ordinary and normal
course of business consistent with past practice; (e) any labour trouble
adversely affecting the Purchased Business or the Purchased Assets; (f) any
licence, sale, assignment, transfer, disposition, pledge, mortgage or granting
of a security interest or other Encumbrance on or over any Purchased Assets
other than licences granted and product sales made in the ordinary course of
business; (g) any capital expenditures or commitments relating to the Purchased
Business or Purchased Assets in excess of $100,000 in the aggregate; (h) any
change in the accounting or tax practices followed by the Vendor; (i) any change
adopted by the Vendor in its depreciation or amortization policies or rates; or
(j) any material change in the credit terms offered to customers of, or by
suppliers to, the Purchased Business.
5.21 NON-ARM'S LENGTH TRANSACTIONS
Except as listed in Schedule 5.21, with respect to the Purchased
Business: (a) the Vendor has not since February 29, 2004 made any payment or
loan to, or borrowed any moneys from or is otherwise indebted to, any officer,
director, employee, shareholder or any other person (other than Dspfactory S.A.)
not dealing at arm's length with the Vendor (within the meaning of the Tax Act)
or any Affiliate or Associate of any of the foregoing, except for usual employee
reimbursements and compensation paid in the ordinary course of the Purchased
Business and except for payments due and payable in the ordinary course of
business on outstanding indebtedness; and (b) except for Contracts of
employment, the Vendor is not a party to any Contract to be assigned hereunder
to the Purchasers with any officer, director, employee, shareholder or any other
person (other than Dspfactory S.A.) not dealing at arm's length with the Vendor
(within the meaning of the Tax Act) or any Affiliate or Associate of any of the
foregoing. No officer, director or shareholder of a Covenantor (other than the
Vendor) and no entity which is an Affiliate or Associate of one or more of such
individuals: (i) owns, directly or indirectly, any interest in (except for
shares representing less than one per cent of the outstanding shares of any
class or series of any publicly traded company), or is an officer, director,
employee or consultant of, any person which is, or is engaged in business as, a
direct competitor of the Purchased Business or a lessor, lessee, supplier,
distributor, sales agent or customer of the Purchased Business; (ii) owns,
directly or indirectly, in whole or in part, any property that the
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Vendor uses in the operations of the Purchased Business; or (iii) has any cause
of action or other claim whatsoever against, or owes any amount to, the Vendor
in connection with the Purchased Business, except for any liabilities reflected
in the Financial Statements and claims in the ordinary course of business such
as for accrued vacation pay and accrued benefits under any Vendor Employee
Plans.
5.22 TAX MATTERS
There are no actions, suits, proceedings, investigations or claims
in progress or to the knowledge of the Vendor, threatened against the Vendor in
respect of Taxes, government charges or assessments, whether paid or unpaid, nor
are any material matters under discussion with any Governmental Authority
relating to Taxes, governmental charges or assessments, whether paid or unpaid,
asserted by any such authority which could result in a claim against or
Encumbrance on any of the Purchased Assets or the Purchased Business. The Vendor
has paid or caused to be paid all sales and use taxes which have become due and
were incurred in connection with the Purchased Business. The Vendor has withheld
from each payment made to any of its past or present employees, officers or
directors of the Purchased Business, the amount of all taxes and other
deductions required by applicable law to be withheld therefrom, and has paid the
same to the proper tax or other receiving officers within the time required
under any applicable legislation. There are no liens for Taxes on the Purchased
Assets. None of the Purchased Assets is subject to any joint venture,
partnership or other agreement or arrangement that is treated as a partnership
for federal income tax purposes. The Vendor has remitted to the appropriate tax
authority, when required by law to do so, all amounts collected by it on account
of GST.
5.23 EMPLOYMENT MATTERS
(a) The Vendor has not (i) entered into any Contract with any labour union
or employee association in respect of any of the employees employed by the
Vendor in connection with the Purchased Business; or (ii) made any commitments
to or conducted negotiations with any labour union or employee association with
respect to any future agreements in respect of any of the employees employed by
the Vendor in connection with the Purchased Business.
(b) To the Vendor's knowledge, there are no current attempts to organize
or to establish any labour union or employee association in respect of any of
the employees employed by the Vendor in connection with the Purchased Business
and there is no certification of any such union with regard to a bargaining
unit.
(c) Except as disclosed in Schedule 5.23(c), since December 31, 2003, the
Vendor has not granted or offered any increase in the compensation of employees
of the Vendor (including any increase pursuant to any Vendor Employee Plan or
commitment thereunder and any severance, termination or change of control
benefits), or any increase in any compensation or bonus payable to any officer,
employee, consultant or agent thereof or executed or promised to execute any
Contract of employment with any officer or employee, or made any loan to, or
engaged in any transaction with, any employee, officer or director of the
Vendor.
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5.24 CUSTOMERS AND SUPPLIERS
Schedule 5.24 sets out the major customers of the Purchased Business
(being those customers of the Purchased Business accounting for more than 75% of
sales for the period May 31, 2003 to June 1, 2004) and since June 1, 2004 there
has been no termination or cancellation of, and no modification or change in,
the Vendor's business relationship with such major customers. The Vendor has no
reason to believe that the benefits of any relationship with any of such major
customers or any of the major suppliers of the Purchased Business will not
continue after the Closing Date in substantially the same manner as prior to the
date of this Agreement.
5.25 PRODUCT WARRANTIES
Schedule 5.25 is a complete list of all express, written warranties
given to purchasers of products or software supplied by the Vendor in connection
with the Purchased Business.
5.26 ENVIRONMENTAL
(a) The Purchased Business, the Leased Property and the Premises have been
and are in material compliance with all Environmental Laws.
(b) The Vendor has not used or permitted to be used, except in compliance
with all Environmental Laws, the Leased Property or the Premises to generate,
manufacture, process, distribute, use, treat, store, dispose of, transport or
handle any Hazardous Substance.
(c) To the knowledge of the Vendor, there are no underground storage
tanks, ozone-depleting substances or polychlorinated biphenyls in or on the
Leased Property or the Premises and the Premises have not been and are not
insulated with urea formaldehyde insulation or asbestos-containing material.
(d) The Vendor is not responsible for any Cleanup or any other remedy or
liability under any Environmental Laws in connection with the Leased Property,
the Premises, the Purchased Assets or the Purchased Business. The Vendor has
never received any formal or informal notice of, or been prosecuted for,
non-compliance with any Environmental Laws, nor has the Vendor settled any
allegations of any such non-compliance prior to prosecution. There are no
written notices, orders or directions relating to environmental matters or other
matters governed by Environmental Laws requiring, or notifying the Vendor that
it is or may be responsible for, any work, repairs, construction or material
capital expenditures to be made under Environmental Laws with respect to the
Purchased Business, the Leased Property, the Premises or the Purchased Assets.
The Vendor has never received a written claim or notice and otherwise has no
knowledge of potential liability or actual liability, relating to any Cleanup at
any off-site location arising out of the Vendor's or any other person's
activities or operations at the Leased Property or the Premises.
(e) The Vendor has not caused or permitted, nor has there been to the
knowledge of the Vendor, any Release of any Hazardous Substance on, in, around,
from or in connection with the
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Leased Property or the Premises or the Purchased Business or any such Release on
or from a facility which was previously owned or leased, or any such Release, to
the Vendor's knowledge, on or from a facility owned or operated by any third
party but with respect to which the Vendor in connection with the Purchased
Business is or may reasonably be alleged to have liability.
(f) All Hazardous Substances and all other wastes and other materials and
substances used in whole or in part by the Vendor in connection with the
Purchased Business or resulting from the operation of the Purchased Business
have been disposed of, treated and stored by the Vendor in compliance with all
Environmental Laws.
(g) The Vendor has made available to the Purchaser all documents in the
Vendor's possession or under its control relating to compliance by the Vendor
with or claims against the Vendor under Environmental Laws or to any other
environmental or occupational health and safety matter in connection with the
Leased Property, the Premises or the Purchased Business.
5.27 RESIDENCY
The Vendor is a resident of Canada for the purposes of the Tax Act.
5.28 GST REGISTRATION
The Vendor is a registrant for purposes of the ETA whose
registration number is 86885 4480 RT0001.
5.29 FULL DISCLOSURE
None of the representations and warranties of the Covenantors
contained herein and none of the information contained in the Schedules to this
Agreement contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to make the statements
contained therein not misleading. There has been no event, transaction or
information which has come to the attention of any Covenantor that has not been
disclosed to the Purchasers in writing which could reasonably be expected to
have a material adverse effect on the assets, business, earnings, prospects,
properties or condition (financial or otherwise) of the Purchased Business or
the prospects of the Purchased Business.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
The Purchasers represent and warrant to the Vendor as follows and
acknowledge and confirm that the Vendor is relying on such representations and
warranties in connection with the sale of the Purchased Assets:
6.1 ORGANIZATION
AMIS Canada is a company duly incorporated and organized and validly
existing under the laws of the Province of Nova Scotia and has the corporate
power to enter into this
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Agreement and to perform its obligations hereunder. AMIS is a corporation
validly existing under the laws of the State of Delaware, and has the corporate
power to enter into this Agreement and to perform its obligations hereunder.
EMMA is a limited partnership organized under the laws of the Netherlands and
has the corporate power to enter into this Agreement and to perform its
obligations hereunder.
6.2 AUTHORIZATION
This Agreement has been duly authorized, executed and delivered by
the Purchasers and each is a legal, valid and binding obligation of the
Purchasers, enforceable against the Purchasers by the Vendor in accordance with
its terms, except (a) as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the rights and remedies of
creditors generally, and (b) as the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defences and to the discretion of a court of competent jurisdiction before which
any proceedings may be brought.
6.3 NO VIOLATION
The execution and delivery of this Agreement by the Purchasers and
the consummation of the transactions herein provided for will not result in the
violation of, or constitute a default under, or conflict with or cause the
acceleration of any obligation of the Purchasers under: (a) any Contract to
which a Purchaser is a party or by which it is bound; (b) any provision of its
certificate of incorporation or by-laws or resolutions of the board of directors
(or any committee thereof) or shareholders of the Purchasers; (c) any judgment,
decree, order or award of any court, Governmental Authority or arbitrator having
jurisdiction over the Purchasers; or (d) any applicable law, statute, ordinance,
regulation or rule.
6.4 CONSENTS AND APPROVALS
There is no requirement for the Purchasers to make any filing with,
give any notice to or obtain any licence, permit, certificate, registration,
authorization, consent or approval of or from, any Governmental Authority or
regulatory authority as a condition to the lawful consummation of the
transactions contemplated by this Agreement.
6.5 GST
As of the Closing, the information provided to the Vendor pursuant
to Section 3.7 of this Agreement is correct.
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6.6 RESIDENCY
AMIS Canada is a resident of Canada for the purposes of the Tax Act.
Neither AMIS nor Emma is a resident of Canada for the purposes of the Tax Act.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF PARENTCO
Parentco represents and warrants to the Vendor as follows and
acknowledges and confirms that the Vendor is relying on such representations and
warranties in connection with the sale of the Purchased Assets:
7.1 ORGANIZATION
Parentco is a corporation validly existing under the laws of the
State of Delaware, has the corporate power to enter into this Agreement and to
perform its obligations hereunder.
7.2 AUTHORIZATION
This Agreement has been duly authorized, executed and delivered by
Parentco and each is a legal, valid and binding obligation of Parentco,
enforceable against Parentco by the Vendor in accordance with its terms, except
(a) as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the rights and remedies of creditors
generally, and (b) as the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defences and to the
discretion of a court of competent jurisdiction before which any proceedings may
be brought.
7.3 NO VIOLATION
The execution and delivery of this Agreement by Parentco and the
consummation of the transactions herein provided for will not result in the
violation of, or constitute a default under, or conflict with or cause the
acceleration of any obligation of Parentco under: (a) any Contract to which
Parentco is a party or by which it is bound; (b) any provision of its
certificate of incorporation or by-laws or resolutions of the board of directors
(or any committee thereof) or shareholders of Parentco; (c) any judgment,
decree, order or award of any court, Governmental Authority or arbitrator having
jurisdiction over Parentco; or (d) any applicable law, statute, ordinance,
regulation or rule.
7.4 CONSENTS AND APPROVALS
There is no requirement for Parentco to make any filing with, give
any notice to or obtain any licence, permit, certificate, registration,
authorization, consent or approval of or from, any Governmental Authority or
regulatory authority as a condition to the lawful consummation of the
transactions contemplated by this Agreement.
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7.5 SEC FILINGS
Parentco has filed with the United States Securities and Exchange
Commission (the "Commission") all reports and documents (the "Parentco SEC
Documents") it was required to file with the Commission. As of their respective
dates, the Parentco SEC Documents complied in all material respects with the
requirements of the Securities Act of 1933, or the Securities Exchange Act of
1934, as the case may be, and the rules and regulations of the Commission
thereunder applicable to the Parentco SEC Documents, and none of the Parentco
SEC Documents, as of their respective dates, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The consolidated financial statements of
Parentco and its Affiliates included in the Parentco SEC Documents complied as
to form in all material respects with the published rules and regulations of the
Commission with respect thereto, were prepared in accordance with United States
generally accepted accounting principles applied on a consistent basis during
the periods involved (except as may be indicated in the notes thereto or, in the
case of the unaudited statements, as permitted by Rule 10-01 of Regulation S-X)
and fairly presented in accordance with applicable requirements of United States
generally accepted accounting principles (subject, in the case of the unaudited
statements, to normal recurring adjustments, none of which will be material) the
consolidated financial position of Parentco and its Affiliates as of their
respective dates and the consolidated results of operations and the consolidated
cash flows of Parentco and its Affiliates for the periods presented therein.
7.6 AUTHORIZED CAPITAL
At the Time of Closing, the authorized capital stock of Parentco
consists of 150,000,000 shares of Common Stock and 5,000,000 shares of preferred
stock. As of August 26, 2004: (i) 82,975,703 shares of Common Stock were issued
and outstanding, all of which are validly issued, fully paid and nonassessable.
7.7 AMIS SHARES
The AMIS Shares to be issued to the Vendor pursuant to the terms of
this Agreement have been duly authorized for issuance and at the Closing Time
such shares will be validly issued, fully paid and nonassessable shares of
common stock in the capital of Parentco free and clear of any lien, mortgage,
claim, charge, security interest or encumbrance and subject to no pre-emptive
rights, but subject to the Lock-Up Agreement set out in Schedule 12.2(i). The
AMIS Shares are, and upon issuance thereof, each of the Closing Shares, the ▇▇▇▇
▇▇▇▇-▇▇▇ Shares and the 2006 Earn-Out Shares will be, listed for trading on the
NASDAQ National Market System and the AMIS Shares satisfy all requirements for
the continuation of such listing. Parentco has not received any notice that the
AMIS Shares will be delisted from the NASDAQ National Market System (except for
prior notices which have been fully remedied) or that the AMIS Shares do not
meet all requirements for the continuation of such listing.
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ARTICLE 8
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties contained in this Agreement shall
survive the closing of the transactions contemplated hereby and, notwithstanding
such closing or any investigation made by or on behalf of the party entitled to
the benefit thereof, shall continue in full force and effect for the benefit of
the party entitled to the benefit thereof; provided, however, that, subject to
Sections 14.1(a) and 14.2(a), the representations and warranties contained in
Articles 5, 6 and 7 or elsewhere in this agreement shall survive until the date
which is 18 months after the Closing Date; provided further that:
(a) the representations and warranties set out in Sections 5.1, 5.2,
5.3, 5.4, 5.6, 6.1, 6.2 and 6.3, 7.1, 7.2. 7.3 and 7.7 and, to the
extent relating to title to or ownership of Intellectual Property,
Section 5.11, shall survive and continue in full force and effect
without limitation of time;
(b) the representations and warranties set out in Section 5.22 shall
survive and continue in full force and effect until one year
following the expiration of the period, if any, during which an
assessment, reassessment or other form of recognized document
assessing liability for tax, interest or penalties under applicable
tax legislation in respect of any taxation year to which such
representations and warranties extend could be issued under such tax
legislation;
(c) the representation and warranty in Section 5.26 shall survive and
continue in full force and effect for a period commencing on the
date of this Agreement and ending five years following the Closing
Date; and
(d) a claim for any breach by any party hereto of any of the
representations and warranties contained in this Agreement involving
fraud or fraudulent misrepresentation may be made at any time.
8.2 IMPLIED WARRANTIES
The parties hereby agree that all warranties and conditions which
might otherwise be implied in this Agreement pursuant to any statute or treaty
relating to the sale of goods are hereby excluded.
ARTICLE 9
COVENANTS
9.1 ACCESS TO THE PURCHASED BUSINESS AND PURCHASED ASSETS
The Vendor shall forthwith make available to the Purchasers and
their authorized representatives and, if requested by a Purchaser, shall provide
the Purchaser with copies of all title documents, Assigned Agreements, financial
information, policies, plans, reports, orders, Permits, books of account,
accounting records and all other documents, information and data
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reasonably relating to the Purchased Business. The Vendor shall have afforded
the Purchasers and their authorized representatives access during normal
business hours to the Purchased Assets, the Leased Property and the Premises. At
the request of the Purchasers, the Vendor shall have executed such consents,
authorizations and directions as may be reasonably necessary to permit any
reasonable inspection of the Purchased Assets or to enable the Purchasers or
their authorized representatives to obtain reasonable access to all files and
records relating to any of the Purchased Assets maintained by a Governmental
Authority or other public authority. At a Purchaser's request, the Vendor shall
co-operate with the Purchaser in arranging any such meetings as the Purchaser
should reasonably request with:
(a) Offered Employees;
(b) customers, suppliers, distributors or others who have or have had a
business relationship with the Vendor in respect of the Purchased
Business; and
(c) the auditors, lawyers or any other persons engaged or previously
engaged to provide services to the Vendor who have knowledge of
matters relating to the Purchased Business or Purchased Assets.
The Vendor may conduct, at the request of a Purchaser and in
co-operation with the representatives or consultants of a Purchaser, such
physical review of the Purchased Assets as is necessary to confirm the values
presented on the Financial Statements, to the reasonable satisfaction of the
Purchasers. The exercise of any rights of inspection by or on behalf of a
Purchaser under this Section 9.1 shall not mitigate or otherwise affect any of
the representations and warranties of the Vendor hereunder which shall continue
in full force and effect as provided in Section 8.1 or in such other agreements,
as the case may be.
9.2 DELIVERY OF BOOKS AND RECORDS
At the Time of Closing, the Vendor shall deliver to the Purchasers
all the books and records described in Section 2.1(l). The Purchasers agree that
they will preserve the books and records so delivered to it for such period as
is required by any applicable law, and will permit the Vendor or its authorized
representatives reasonable access thereto in connection with the tax, any
dispute pursuant to this Agreement or other legitimate affairs of the Vendor,
but the Purchasers shall not be responsible or liable to the Vendor for or as a
result of any accidental loss or destruction of or damage to any such books or
records.
9.3 CHANGE AND USE OF NAME
The Vendor agrees that within one Business Day from the Closing Date
it shall change its name and the name of any of its Associates or Affiliates
which include the word "Dspfactory" to a name which does not include the word
"Dspfactory" or any part thereof or any similar words. The Covenantors agree
individually that, from and after the Closing Date, none of the Covenantors nor
any of their Associates or Affiliates will use the word "Dspfactory" and any
other trademarks and product names used in connection with the Dspfactory
Products and/or the Purchased Business and any part thereof or any similar
words.
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9.4 CONDUCT OF PURCHASED BUSINESS PRIOR TO CLOSING
Without in any way limiting any other obligations of the Vendor
hereunder, during the period from the date hereof to the Time of Closing:
(a) Conduct Business in the Ordinary Course. The Vendor shall conduct
the Purchased Business only in the ordinary and normal course in
accordance and consistent with past practice and the Vendor shall
not, without the prior written consent of the Purchasers, enter into
any transaction or refrain from doing any action which, if effected
before the date of this Agreement, would constitute a breach of any
representation, warranty, covenant or other obligation of the Vendor
contained herein (including terminate or pay or offer to pay
severance benefits to any Offered Employee other than an Offered
Employee who has rejected Purchaser's offer of employment or
terminating prior to the Closing Date, any Fixed Term Employee,
other than a Fixed Term Employee who has rejected a Purchaser's
offer of employment), and the Vendor shall not enter into any
material Contract with respect to the Purchased Business without the
consent of the Purchasers, which consent shall not be unreasonably
withheld;
(b) Continue Insurance. The Vendor shall continue to maintain in full
force and effect all policies of insurance or renewals thereof now
in effect, shall use its reasonable commercial efforts to take out,
at the expense of the Purchasers, such additional insurance as may
be reasonably requested by the Purchasers and shall give all notices
and present all claims under all policies of insurance in a due and
timely fashion;
(c) Regulatory Consents. The Vendor shall use its best efforts to
maintain, at or prior to the Time of Closing, from all appropriate
federal, provincial, municipal or other governmental or regulatory
bodies, the Permits described in Schedule 5.15;
(d) Contractual Consents. The Vendor shall use its best efforts to give
or obtain, at or prior to the Time of Closing, the notices, consents
and approvals described in Schedule 5.16;
(e) Preserve Goodwill. The Vendor shall use its best efforts to preserve
intact the Purchased Business and Purchased Assets and to carry on
the Purchased Business as currently conducted, and the Vendor shall
use its reasonable commercial efforts to promote and preserve for
the Purchasers the goodwill of suppliers, customers and others
having business relations with the Vendor;
(f) Discharge Liabilities. The Vendor shall pay and discharge the
liabilities of the Vendor relating to the Purchased Business that
come due prior to the Closing Date and would be payable by the
Vendor in the ordinary course in accordance and consistent with the
previous practice of the Vendor, except those contested in good
faith by the Vendor;
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(g) Corporate Action. The Vendor shall use its best efforts to take or
cause to be taken all necessary corporate action, steps and
proceedings to approve or authorize validly and effectively the
transfer of the Purchased Assets to the Purchaser and the execution
and delivery of this Agreement and the other agreements and
documents contemplated hereby and to cause all necessary meetings of
directors and shareholders of the Vendor to be held for such
purpose.
9.5 DELIVERY OF CONVEYANCING DOCUMENTS
At the Time of Closing, the Vendor shall deliver to the Purchasers
all necessary deeds, conveyances, bills of sale, assurances, transfers,
assignments and any other documentation necessary or reasonably required to
transfer all of Vendor's right, title and interest in and to the Purchased
Assets to the Purchasers.
9.6 RETAIL SALES TAX CERTIFICATE
The Vendor shall deliver to the Purchasers a certificate issued by
the Minister of Revenue of Ontario under subsection 6(1) of the Retail Sales Tax
Act (Ontario).
9.7 DELIVERY OF CLOSING DOCUMENTATION
(a) At the Time of Closing, the Vendor shall deliver to the Purchasers a
certificate of status and two copies, certified by a senior officer of the
Vendor as of the Closing Date, of its constating documents and by-laws and of
the resolution authorizing the execution, delivery and performance by the Vendor
of this Agreement and any documents to be provided by it pursuant to the
provisions hereof. The Vendor shall also execute and deliver or cause to be
executed and delivered to the Purchasers two copies of such other documents
relevant to the closing of the transactions contemplated hereby as the
Purchasers, acting reasonably, may request.
(b) Each Purchaser shall deliver to the Vendor a certificate of status and
two copies, certified by a senior officer of the Purchaser as of the Closing
Date, of its constating documents and by-laws and of the resolution authorizing
the execution, delivery and performance by the Purchaser of this Agreement and
any documents to be provided by it pursuant to the provisions hereof. Each
Purchaser shall also execute and deliver or cause to be executed and delivered
two copies of such other documents relevant to the closing of the transactions
contemplated hereby as the Vendor, acting reasonably, may request.
9.8 BULK SALES ACT COMPLIANCE
The Purchasers hereby waives compliance by the Vendor under any
applicable bulk sales legislation in connection with the sale by the Vendor to
the Purchasers of the Purchased Assets, and each of the Covenantors hereby
covenants and agrees to indemnify and save harmless the Purchasers from and
against any and all Losses suffered or incurred by the Purchasers as a result of
or arising from the failure of the Vendor to comply with the requirements of any
applicable bulk sales legislation in respect of the purchase and sale of the
Purchased Assets, except to the extent that any losses arise from a Purchaser's
failure to pay or satisfy any of the Assumed Liabilities.
- 46 -
9.9 CONSENTS TO ASSIGNMENT
If any of the Purchased Assets or any claim, right or benefit
thereunder (collectively, the "Rights") is not by its terms assignable or
transferable or is not assignable or transferable without the consent, approval
or waiver of any person who is not a party hereto and such consent, approval or
waiver has not been obtained at or prior to the Time of Closing, or the
assignment or transfer thereof to a Purchaser would constitute a breach of any
Contract, law, statute, ordinance, regulation, rule, judgment, decree or order,
then the Vendor shall hold such Purchased Assets or Rights, as the case may be,
and all benefits derived thereunder and therefrom in trust for the Purchaser.
The Vendor shall continue to use its commercially reasonable efforts to obtain,
where possible, as the Purchasers may direct, acting reasonably, any necessary
consents, approvals or waivers to the assignment or transfer of the Purchased
Assets or Rights, as the case may be, to the Purchasers following the Time of
Closing. Until such consent, approval or waiver has been obtained or if it
cannot be obtained, and provided that the Vendor is satisfied, acting
reasonably, that doing so would not constitute a breach of any Contract, law,
statute, ordinance, regulation, rule, judgment, decree or order, the Vendor
shall continue to maintain the existence of the Purchased Assets or Rights, as
the case may be, comply with the terms and provisions of the Rights, as agent
for the Purchasers at the Purchasers' expense and for the benefit of the
Purchasers, take all such actions and do or cause to be done all such things as
the Purchasers may reasonably direct, at the Purchasers' expense, in order to
preserve such Purchased Assets or Rights, as the case may be, and provide the
benefits thereof to the Purchasers, including collecting and paying promptly to
the Purchasers all monies payable under or in respect of such Purchased Assets
or Rights, as the case may be, and enforcing at the request and expense of the
Purchasers, or terminating at the direction of the Purchasers, any such Rights.
9.10 ACTION BY THE PURCHASERS AND THE VENDOR
The Purchasers and the Vendor shall take or cause to be taken all
necessary corporate action, steps and proceedings to approve or authorize
validly and effectively the transfer of the Purchased Assets from the Vendor to
the Purchasers, the assumption by AMIS Canada of the Assumed Liabilities, the
execution and delivery of this Agreement and the other agreements and documents
contemplated hereby and the performance of each party's respective obligations
hereunder and thereunder, and each party shall cause all necessary meetings of
its board of directors (or any committee thereof) to be held for such purpose.
9.11 COVENANTS RELATING TO THE SHARE EARN-OUT
Purchasers agree that through the earlier of payment of the Maximum
Earn-Out Shares or December 31, 2006, it will:
(a) not take any action intentionally designed to have an adverse material
effect on the ability of the Vendor to earn the Maximum Share Earn-Out,
(b) not move the primary operation of the Purchased Business to a location
which is more than ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇.
- ▇▇ -
(▇) not move the primary operation of the DSP hardware engineering and
design center outside of the canton of Neuchatel, Switzerland.
(d) not sell all or a material part of the Purchased Business to a third
party except in connection with the sale of all or substantially all
of the assets of Parentco. For purposes of this clause, a material
part of the Purchased Business means assets, the sale of which would
have an adverse material effect on the ability of the Vendor to earn
the Maximum Share Earn-Out.
(e) use reasonable commercial efforts to market, sell, and deliver those
Dspfactory Products that are commercially viable.
(f) will use reasonable commercial efforts to employ or contract with 5
sales representatives and 4 field application engineers who are
knowledgeable about the Dspfactory Products then being marketed and
sold.
(g) will allow the Purchased Business to make reasonable commercial
efforts to pursue the sales leads set out in Schedule 9.11 for so
long as such leads are commercially viable.
The Purchasers' agreement to Section 2.2(i) and the agreement
relating to the Phonak matter referenced in Section 12.2(n) shall not be
construed in any way as a violation of the Purchasers' obligations as set out in
this Section 9.11.
9.12 KEY EMPLOYEE SHAREHOLDERS
At the time it distributes the proceeds of this transaction to its
Shareholders, the Vendor agrees to withhold from the Key Employee Shareholders
and pay to the Escrow Agent, the Key Employee Hold-Back Amounts, which shall be
held by the Escrow Agent pursuant to the terms and conditions of the Key
Employee Escrow Agreements in the form set out in Schedule 9.12 (the "Key
Employee Escrow Agreements").
9.13 DISCHARGE OF CERTAIN PERMITTED ENCUMBRANCES
Upon Closing, the Vendor shall pay or cause to be fully repaid at
Closing the Permitted Encumbrances indicated on Schedule 4.6 as being fully
repaid from the Closing Date Payment.
ARTICLE 10
ARRANGEMENT
10.1 IMPLEMENTATION STEPS
The Vendor shall as soon as reasonably practicable:
(a) apply in a manner acceptable to the Purchasers, acting reasonably, under
Section 182 of the OBCA for the Interim Order, and thereafter proceed with and
diligently pursue the obtaining of the Interim Order so that, among other
things, the transfer of the Closing Shares, any ▇▇▇▇ ▇▇▇▇-▇▇▇ Shares and any
2006 Earn-Out Shares to Vendor and the transfer of such shares by
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Vendor to the holders of Amalco securities pursuant to the Plan of Arrangement
shall be exempt from registration under Section 3(a)(10) of the U.S. Securities
Act of 1933, as amended;
(b) convene and hold the Special Meeting for the purpose of
considering the Arrangement Resolution and for any other purpose as may be set
out in the notice for such meeting and approved by the Purchasers, acting
reasonably;
(c) not adjourn, postpone or cancel (or propose for adjournment,
postponement or cancellation), or fail to call the Special Meeting without the
Purchasers' prior written consent except as required by applicable law;
(d) use reasonable commercial efforts in compliance with all
applicable laws to solicit proxies in favour of the approval of the Arrangement
Resolution;
(e) use reasonable commercial efforts to take all other action that
is necessary or desirable to secure the requisite approval of the Arrangement
Resolution;
(f) subject to the terms of this Agreement and obtaining such
approvals as are required by the Interim Order, proceed with and diligently
pursue the application to the Court for the Final Order; and
(g) subject to the terms of this Agreement and obtaining the Final
Order and the satisfaction or waiver of the other conditions herein contained in
favour of each party, send to the Director, for endorsement and filing by the
Director, the Articles of Arrangement and such other documents as may be
required in connection therewith under the OBCA to give effect to the
Arrangement.
10.2 INTERIM ORDER
The notice of motion for the application referred to in Subsection
10.1(a) shall request that the Interim Order provide:
(a) for the class of persons to whom notice is to be provided in respect
of the Arrangement and the Special Meeting and for the manner in
which such notice is to be provided;
(b) that the requisite approval for the Arrangement Resolution shall be
66 2/3%, in aggregate, of the votes cast on the Arrangement
Resolution by Shareholders, holders of Dspfactory Debentures,
holders of Vendor Options (on an as exercised basis) and holders of
Vendor Warrants (on an as exercised basis), voting together as a
single class, present in person or by proxy at the Special Meeting;
(c) that, in all other respects, the terms, restrictions and conditions
of the by-laws and articles of Vendor, including quorum requirements
and all other matters, shall apply in respect of the Special
Meeting; and
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(d) for the grant of Dissent Rights to Shareholders, holders of Vendor
Options, holders of Vendor Warrants, and holders of Dspfactory
Debentures as contemplated in the Plan of Arrangement.
10.3 PLAN OF ARRANGEMENT AND ARTICLES OF ARRANGEMENT
The Vendor, the Purchasers and Parentco agree that, unless otherwise
mutually agreed, the Plan of Arrangement shall be substantially in the form
contained in Schedule 10.3. The Articles of Arrangement shall, with such other
matters as are necessary to effect the Arrangement, implement the Plan of
Arrangement.
10.4 VENDOR INFORMATION CIRCULAR
(a) As promptly as practicable after the execution and delivery of
this Agreement, the Vendor shall prepare the Circular together with any other
documents required by applicable laws in connection with the Arrangement and,
subject to obtaining an Interim Order, the Vendor shall cause the Circular and
other documentation required in connection with the Special Meeting to be sent
to each Shareholder, holders of Dspfactory Debentures, holders of Vendor Options
and holders of Vendor Warrants and filed as required by the Interim Order and
applicable law.
(b) During the course of preparing drafts of the Circular and prior
to printing a final version of the Circular, the Vendor shall provide the
Purchasers and their legal advisors with reasonable opportunity to review and
comment thereon.
10.5 PREPARATION OF FILINGS
(a) The Vendor and Parentco shall cooperate in and use reasonable
commercial efforts in:
(i) the preparation and filing of any application for the Interim
Order and the Final Order and the preparation of any other
documents reasonably deemed by the Vendor, the Purchasers or
Parentco to be necessary to discharge their respective
obligations under United States and Canadian federal,
provincial, territorial or state securities laws in connection
with the Arrangement and other transactions contemplated
hereby; and
(ii) the taking of all such action as may be required under the
OBCA in connection with the transactions contemplated by this
Agreement and the Plan of Arrangement.
(b) Each of the Vendor, the Purchasers and Parentco shall furnish to
the other all such information concerning it and its shareholders as may be
required for the effectuation of the actions described in Section 10.4 and the
foregoing provisions of this Section 10.5, and each covenants that no
information furnished by it in connection with such actions or otherwise in
connection with the consummation of the Arrangement and the other transactions
contemplated by this Agreement will contain any untrue statement of a material
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fact or omit to state a material fact required to be stated in any such document
or necessary in order to make any information so furnished for use in any such
document not misleading in the light of the circumstances in which it is
furnished or to be used.
(c) The Vendor, the Purchasers and Parentco shall each promptly
notify the other if at any time before or after the Effective Time it becomes
aware that the Circular contains any untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements contained therein not misleading in light of the
circumstances in which they are made, or that otherwise requires an amendment or
supplement to the Circular.
(d) The Vendor shall use reasonable commercial efforts to ensure
that the Circular complies will all applicable laws and, without limiting the
generality of the foregoing, that the Circular does not contain any
misrepresentation or untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
contained therein not misleading in light of the circumstances in which they are
made. Without limiting the generality of the foregoing, the Vendor shall use
reasonable commercial efforts to ensure that the Circular provides the
Shareholders, holders of Dspfactory Debentures, holders of Vendor Options and
holders of Vendor Warrants with information and sufficient detail to permit them
to form a reasoned judgment concerning the matters to be placed before them at
the Special Meeting.
ARTICLE 11
EMPLOYEE MATTERS
11.1 OFFERS OF EMPLOYMENT
(a) AMIS Canada acknowledges and confirms that it will offer, promptly
after the execution of this Agreement, on a conditional basis subject to the
closing of the transaction contemplated by this Agreement, regular employment to
those individuals who are listed on Schedule 11.1(a) (the "Offered Employees")
and who are employees of the Vendor at the Purchased Business on the Closing
Date in accordance with the terms and conditions of this Article 11. Schedule
11.1(a) also sets out the salary, bonus, if any, stock options, if any, and
benefits to be offered to each such Offered Employee.
(b) AMIS Canada acknowledges and confirms that it will offer, promptly
after the execution of this Agreement, on a conditional basis subject to the
closing of the transaction contemplated by this Agreement, employment for a
fixed term to the individuals who are listed on Schedule 11.1(b) (the "Fixed
Term Employees") and who are employees of the Vendor at the Purchased Business
on the Closing Date in accordance with the terms and conditions of this Article
11. Schedule 11.1(b) also sets out the salary, bonus, if any, stock options, if
any, and benefits to be offered to each such Fixed Term Employee.
11.2 OFFERED EMPLOYEES
(a) The Vendor acknowledges and confirms that Schedule 11.1(a) contains a
complete and accurate list of the names of the Offered Employees, including the
Designated Key
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Employees, as of the date hereof, together with the length of hire, title or
classification of each such person, the rate of salary or hourly pay at the
Vendor, any commission or bonus entitlements and any other remuneration payable
by the Vendor to each such person as of such date and the Vendor committed wage
increases up to and including the Closing Date.
(b) The Vendor covenants and agrees to work with and provide all
commercially reasonable assistance to AMIS Canada in procuring the employment by
AMIS Canada of the Designated Key Employees named in Schedule 11.1(a).
(c) The Vendor shall continue to employ each of the Offered Employees
until the Closing Date except for any such employee who, at any time prior to
the Closing Date (i) is terminated for cause; (ii) voluntarily resigns; (iii)
retires; or (iv) dies.
(d) Subject to the consummation of the transaction contemplated by this
Agreement, AMIS Canada shall employ all Offered Employees who accept its offers
of employment (the "Transferred Employees") in accordance with the terms of such
offers and of this Agreement. For greater certainty, the term "Transferred
Employees" does not include "Fixed Term Employees" or "Transferred Fixed Term
Employees".
11.3 FIXED TERM EMPLOYEES
(a) The Vendor acknowledges and confirms that Schedule 11.1(b) contains a
complete and accurate list of the names of the Fixed Term Employees, including
the Designated Key Fixed Term Employees, as of the date hereof, together with
the length of hire, title or classification of each such person, the rate of
salary or hourly pay at the Vendor, any commission or bonus entitlements and any
other remuneration payable by the Vendor to each such person as of such date.
(b) The Vendor covenants and agrees to work with and provide all
commercially reasonable assistance to AMIS Canada in procuring the engagement by
AMIS Canada of the Fixed Term Employees.
(c) The Vendor shall continue to employ each of the Fixed Term Employees
until the Closing Date except for any such employee who, at any time prior to
the Closing Date (i) is terminated for cause; (ii) voluntarily resigns; (iii)
retires; or (iv) dies.
(d) Subject to the consummation of the transaction contemplated by this
Agreement, AMIS Canada shall engage on a fixed term basis all Fixed Term
Employees who accept its offers (the "Transferred Fixed Term Employees") in
accordance with the terms of such offers and of this Agreement.
11.4 TRANSFERRED EMPLOYEES AND TRANSFERRED FIXED TERM EMPLOYEES
(a) Each of the Transferred Employees shall cease to accrue benefits under
the Vendor's retirement, pension, vacation, bonus, incentive and all other
employee benefit plans (the "Vendor Employee Plans") as of the Closing Date. The
Transferred Employees shall participate in any retirement, pension, vacation,
bonus, incentive and all other employee benefit plans of AMIS
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Canada as of the Closing Date. Each of the Covenantors represents and warrants
that Schedule 11.4(a) identifies and describes each Vendor Employee Plan and a
true and complete copy of each Vendor Employee Plan has been made available to
the Purchasers.
(b) The Vendor shall ensure that none of the Transferred Employees and
none of the Transferred Fixed Term Employees has any banked or outstanding
vacation pay in respect of the period prior to the Closing Date for such
employee and, if any such vacation pay does exist, the Vendor shall be
responsible for making any required payments.
(c) Each Covenantor represents and warrants that:
(i) Schedule 11.1(a) identifies any Offered Employees and Schedule
11.1(b) identifies any Fixed Term Employees who are on lay-off
or who have been absent continually from work for a period in
excess of one month, as well as the reason for their absence;
(ii) there are no complaints, claims or charges outstanding, or to
the best of the knowledge of the Vendor, anticipated, nor are
there any orders, decisions, directions or convictions
currently registered or outstanding by any tribunal or agency
against or in respect of the Vendor under or in respect of any
Employment Legislation;
(iii) the Vendor is in compliance with the Employment Standards Act
(Ontario), and other Employment Legislation.
11.5 EMPLOYEE ACCRUALS
The Vendor will pay all accruals for unpaid vacation pay, premiums
for unemployment insurance, health premiums, pension plan premiums, accrued
wages, salaries and commissions and employee benefit plan payments to the
Closing Date reflected in the books and records of the Purchased Business.
11.6 EMPLOYEE INFORMATION
AMIS Canada shall report all wages paid and taxes withheld by it,
and the Vendor shall report all wages paid and taxes withheld by it, for the
calendar year in which the Closing Date occurs.
11.7 COVERAGE OF REMAINING EMPLOYEES.
The Vendor shall be solely responsible for the payment of severance
and any other benefits or taxes payable upon the termination of employment of
any Remaining Employees and the termination of Vendor's employment of any
Transferred Fixed Term Employees as a result of the transactions contemplated by
this Agreement.
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ARTICLE 12
CONDITIONS OF CLOSING
12.1 MUTUAL CONDITIONS PRECEDENT
The sale and purchase of the Purchased Assets is subject to the
following terms and conditions for the benefit of both the Vendor and the
Purchasers (provided that no party may rely on the non-satisfaction or
non-fulfilment of any such term or condition to the extent the same resulted
from any misrepresentation or breach of warranty or covenant hereunder by such
party, or the failure by such party to exercise reasonable commercial efforts
and reasonable diligence to procure the satisfaction or fulfilment of such term
or condition), to be performed or fulfilled at or prior to the Time of Closing
(which conditions may be waived, in whole or in part, in writing by both of the
parties):
(a) No Action or Proceeding Regarding Completion of Transaction. No
legal or regulatory action or proceeding shall be pending or
threatened by any person to enjoin, restrict or prohibit the
consummation of the transactions contemplated hereby;
(b) No Action or Proceeding Regarding Carrying-on of the Purchased
Business. No legal or regulatory action or proceeding shall be
pending or threatened by any person which would enjoin, restrict,
prohibit or materially adversely affect the Purchaser from carrying
on the Purchased Business on or after the Closing Date in materially
the same manner as the Vendor carried on the Purchased Business up
to the Closing Date;
(c) Regulatory Consents. There shall have been obtained from all
appropriate Governmental Authorities such licences, permits,
consents, approvals, certificates, registrations and authorizations
as are required to be obtained by the parties to permit the
consummation of the transactions contemplated hereby and to permit
the Purchaser to conduct the Purchased Business after the Effective
Time;
(d) Execution of Lease Assignment and Assumption Agreement. The Lease
Assignment and Assumption Agreement shall have been executed and
delivered by the Purchaser, the Vendor and (if necessary) the
landlord under the Lease; and
(e) Arrangement.
(i) the Arrangement shall have been approved at the Vendor Meeting
by the requisite vote of Vendor's securityholders;
(ii) any conditions in addition to those set out in this Section
12.1 which may be imposed by the Interim Order shall have been
satisfied;
(iii) the Interim Order and the Final Order shall each have been
obtained in form and terms reasonably satisfactory to each of
the Vendor, the
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Purchasers and Parentco, and shall not have been set aside or
modified in a manner unacceptable to such parties on appeal or
otherwise.
(f) Escrow Arrangements. All required parties shall have executed (i)
the Escrow Agreement set forth in Section 3.4, as such Escrow
Agreement may be changed by agreement of the parties, and (ii) the
escrow agreements set out in Schedule 12.1(f), as such escrow
agreements may be changed by agreement of the parties;
(g) Registration Exemption. The transfer of the Closing Shares, any ▇▇▇▇
▇▇▇▇-▇▇▇ Shares and any 2006 Earn-Out Shares to Vendor and the
transfer of such shares by Vendor to the holders of Amalco
securities pursuant to the Plan of Arrangement shall be exempt from
registration pursuant to the exemption contained in Section 3(a)(10)
of the U.S. Securities Act of 1933, as amended.
12.2 CONDITIONS OF CLOSING IN FAVOUR OF THE PURCHASER
The sale and purchase of the Purchased Assets is subject to the
following conditions for the exclusive benefit of the Purchasers, to be
performed or fulfilled at or prior to the Time of Closing (which conditions may
be waived, in whole or in part, by the written consent of the Purchasers):
(a) Representations and Warranties. The representations and warranties
of the Vendor contained in this Agreement shall be true and at the
Time of Closing with the same force and effect as if such
representations and warranties had been made at and as of such time,
except for changes therein specifically permitted by this Agreement
or resulting from any transaction expressly consented to in writing
by the Purchasers, and a certificate of a duly authorized officer of
the Vendor, dated the Closing Date, to that effect shall have been
delivered to the Purchasers, such certificate to be in the form
agreed to by the Vendor's counsel and the Purchasers' counsel;
(b) Covenants. All of the terms, covenants and conditions of this
Agreement to be complied with or performed by the Vendor at or
before the Time of Closing shall have been complied with or
performed, and a certificate of a duly authorized officer of the
Vendor, dated the Closing Date, to that effect shall have been
delivered to the Purchasers, such certificate to be in the form
agreed to by the Vendor's counsel and the Purchasers' counsel;
(c) Consents. The Vendor shall have given or obtained the notices,
consents and approvals described as required in Section 5.16, in
each case in form and substance satisfactory to the Purchasers;
(d) Designated Key Employees. All of the Designated Key Employees and at
least eighty percent (80%) of the rest of the Offered Employees
shall have accepted AMIS Canada's offer of employment pursuant to
Section 11.1;
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(e) Designated Key Fixed Term Employees. All of the Designated Key Fixed
Term Employees and at least eighty percent (80%) of the rest of the
Fixed Term Employees shall have accepted AMIS Canada's offer of
fixed term employment pursuant to Section 11.3;
(f) Concurrent Switzerland Acquisition. The Purchasers and the Vendor,
or their Affiliates, shall have completed and satisfied all of the
conditions of closing contained in the Share Purchase Agreement and
the transactions contemplated thereby shall be completed
concurrently with the transactions contemplated by this Agreement;
(g) Government Aid Agreements. The Vendor shall have obtained all
necessary consents, in a form acceptable to the Purchasers in its
sole discretion, to amendments to the Government Aid Agreements set
out in Schedule 12.2(g);
(h) No Damage. No damage by fire or other hazard to the whole or any
material part of the Purchased Business or the Purchased Assets
shall have occurred prior to the Time of Closing;
(i) Lock-Up Agreements. All of the Offered Employees designated as
"major employee equity-holders" in Schedule 12.2(i) shall have
executed and delivered an offer letter provided by the Purchaser
which shall contain, among other things, a lock-up provision in the
form entitled "major employee equity-holder agreement" attached as
Schedule 12.2(i) and either all of the shareholders listed in
Schedule 12.2(i) or shareholders holding seventy percent (70%) of
Vendor's total number of shares have executed and delivered a
lock-up agreement in the form attached as Schedule 12.2(i), provided
that, in any event, each of the shareholders designated as "key
shareholders" in Schedule 12.2(i) shall have executed and delivered
such lock-up agreement. The lock-up agreements set out in Schedule
12.2(i) are collectively referred to as the "Lock-Up Agreements");
(j) No Material Adverse Change. The Purchasers shall be satisfied in
their sole discretion that there shall have been no material adverse
change in the condition (financial or otherwise), assets,
liabilities, earnings, business, operations or prospects of the
Purchased Business since February 29, 2004, provided that this
Section shall in no way diminish Vendor's responsibilities pursuant
to Article 5;
(k) Delivery of Conveyancing Documents. The Vendor shall deliver to the
Purchasers all necessary deeds, conveyances, bills of sale,
assurances, transfers, assignments and any other documentation
necessary or reasonably required to transfer the Purchased Assets to
the Purchasers;
(l) Legal Matters. All actions, proceedings, instruments and documents
reasonably required to implement this Agreement, or instrumental
thereto, and all legal matters relating to the purchase of the
Purchased Assets, including title of the Vendor to the Purchased
Assets, shall have been approved as to form and legality by the
Purchasers' counsel;
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(m) Legal Opinion. The Vendor shall have delivered to the Purchaser a
favourable opinion of the Vendor's counsel in the form attached
hereto as Schedule 12.2(m); and
(n) Phonak. Phonak, the Vendor and AMIS Canada sign the agreement set
forth in Schedule 12.2(n).
If any of the conditions contained in this Section 12.2 shall not be performed
or fulfilled at or prior to the Time of Closing to the satisfaction of the
Purchasers, the Purchasers, by notice to the Vendor, may terminate this
Agreement and the obligations of the Vendor and the Purchasers under this
Agreement, other than the obligations contained in Sections 15.5, 15.6, 15.7 and
15.8, shall be terminated, provided that the Purchasers may also bring an action
pursuant to Article 14 against the Vendor for damages (other than consequential
damages) suffered by the Purchasers where the non-performance or non-fulfilment
of the relevant condition is as a result of a breach of covenant, representation
or warranty by the Vendor. Any such condition which is waived in whole or in
part by the Purchasers shall be with prejudice to any claims it may have for
breach of covenant, representation or warranty.
12.3 CONDITIONS OF CLOSING IN FAVOUR OF THE VENDOR
The sale and purchase of the Purchased Assets is subject to the
following conditions for the exclusive benefit of the Vendor, to be performed or
fulfilled at or prior to the Time of Closing (which conditions may be waived, in
whole or in part, by the written consent of the Vendor):
(a) Representations and Warranties. The representations and warranties
of the Purchasers and Parentco contained in this Agreement shall be
true and correct in all matters and respect at the Time of Closing
with the same force and effect as if such representations and
warranties were made at and as of such time, except for changes
therein specifically permitted by this Agreement or resulting from
any transaction expressly consented to in writing by the Vendor, and
a certificate of a duly authorized representative of the Purchasers
and of Parentco, dated the Closing Date, to that effect shall have
been delivered to the Vendor, such certificate to be in the form
agreed to by the Vendor's counsel and the Purchasers' counsel;
(b) Covenants. All of the terms, covenants and conditions of this
Agreement to be complied with or performed by the Purchasers and of
Parentco at or before the Time of Closing shall have been complied
with or performed, and a certificate of a duly authorized
representative of the Purchasers and of Parentco, dated the Closing
Date, to that effect shall have been delivered to the Vendor, such
certificate to be in the form agreed to by the Vendor's counsel and
the Purchasers' counsel;
(c) Legal Matters. All actions, proceedings, instruments and documents
reasonably required to implement this Agreement, or instrumental
thereto, shall have been approved as to form and legality by the
Vendor's counsel;
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(d) Legal Opinion. The Purchasers and Parentco shall have delivered to
the Vendor a favourable opinion of the Purchasers' and Parentco's
counsel in the form attached hereto as Schedule 12.3(d);
(e) Payments. The Purchasers shall have made the payment to the Vendor
referred to in Section 3.1(a) and Purchasers shall have transferred
the AMIS Shares referred to in Section 3.1(b);
(f) Designated Key Employees. All of the Designated Key Employees and at
least eighty percent (80%) of the rest of the Offered Employees
shall have accepted the Purchasers' offer of employment pursuant to
Section 11.1 and all of the Designated Key Fixed Term Employees and
at least eighty percent (80%) of the rest of the Fixed Term
Employees shall have accepted AMIS Canada's offer of employment
pursuant to Section 11.3;
(g) Concurrent Switzerland Acquisition. The Purchasers and the Vendor,
or their Affiliates shall have completed and satisfied all of the
conditions of closing contained in the Share Purchase Agreement and
Vendor and the transactions contemplated thereby shall be completed
concurrently with the transactions contemplated by this Agreement;
and
(h) No Material Adverse Change. The Vendor shall be satisfied in its
sole discretion that there shall have been no material adverse
change in the condition (financial or otherwise), assets,
liabilities, earnings, business, operations or prospects of Parentco
since December 31, 2003;
(i) Dissenters. Holders of no more than 5% of the issued and outstanding
shares in the capital of the Vendor shall have exercised their
Dissent Rights (and not withdrawn such exercise) in respect of the
Arrangement; and
(j) Phonak. Phonak, the Vendor and AMIS Canada shall have signed the
agreement set forth in Schedule 12.2(n), and AMIS Canada shall pay
the Repayment (as defined therein) on or before the Closing Date.
If any of the conditions contained in this Section 12.3 shall not be performed
or fulfilled on or prior to the Time of Closing to the satisfaction of the
Vendor, the Vendor, by notice to the Purchasers, may terminate this Agreement
and the obligations of the Vendor and the Purchasers under this Agreement, other
than the obligations contained in Sections 15.5, 15.6, 15.7 and 15.8 shall be
terminated, provided that the Vendor may also bring an action pursuant to
Article 14 against the Purchasers for damages (other than consequential damages)
suffered by the Vendor where the non-performance or non-fulfilment of the
relevant condition is as a result of a breach of covenant, representation or
warranty by the Purchasers. Any such condition which is waived in whole or in
part by the Vendor shall be with prejudice to any claims it may have for breach
of covenant, representation or warranty.
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ARTICLE 13
CLOSING DATE AND TRANSFER OF POSSESSION
13.1 PLACE OF CLOSING
The closing including the completion of the Arrangement shall take
effect at the Time of Closing at the offices of Gowling ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP,
Kitchener, Ontario, or at such other place or time as the Purchaser and the
Vendor may agree upon in writing.
13.2 TRANSFER
Subject to compliance with the terms and conditions hereof, the
transfer of possession of the Purchased Assets shall be deemed to take effect as
at the Effective Time.
13.3 FURTHER ASSURANCES
From time to time subsequent to the Closing Date, each party
covenants and agrees that at all times after the Closing Date, at the expense of
the requesting party, it will promptly execute and deliver all such documents,
including all such additional conveyances, transfers, consents and other
assurances and do all such other acts and things as the other party, acting
reasonably, from time to time may request be executed or done in order to
evidence better or perfect or effectuate any provision of this Agreement or of
any agreement or other document executed pursuant to this Agreement or any of
the respective obligations intended to be created hereby.
13.4 RISK OF LOSS
From the date hereof up to the Time of Closing, the Purchased Assets
shall be and remain at the risk of the Vendor. If, prior to the Time of Closing,
all or any material part of the Purchased Assets which are necessary to carry on
the Purchased Business as currently conducted are destroyed or damaged by fire
or any other casualty or shall be appropriated, expropriated or seized by
Governmental Authority or other lawful authority, unless the Purchasers
terminate their obligations under this Agreement as contemplated by Section
12.2, the Purchasers shall complete the purchase without reduction of the
Purchase Price, in which event all proceeds of insurance or compensation for
expropriation or seizure shall be paid to the Purchasers in respect of the
Purchased Assets at the Time of Closing and all right and claim of the Vendor to
any such amounts not paid by the Closing Date shall be assigned at the Time of
Closing to the Purchasers.
13.5 DESTRUCTION OF INSTRUMENTS
The Vendor agrees to bring to the closing all unissued negotiable
instruments (such as cheques and share certificates) in the name of Dspfactory
in its possession so that they may be destroyed at closing.
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ARTICLE 14
INDEMNIFICATION
14.1 INDEMNIFICATION BY THE COVENANTORS
Each of the Covenantors shall, jointly and severally, indemnify and
save harmless each of the Purchasers, its directors, officers, shareholders,
Affiliates and agents and any successor to or assignee of the Purchasers'
interest in the Purchased Business or all or any substantial part of the
Purchased Assets and all directors, officers, employees and agents of each such
successor, shareholder or affiliate from and against any and all Losses suffered
or incurred by the Purchaser as a result of or arising directly or indirectly
out of or in connection with:
(a) any breach by a Covenantor or any inaccuracy of any representation
or warranty of a Covenantor contained in this Agreement (provided
that a Covenantor shall not be required to indemnify or save
harmless the Purchasers in respect of any such breach or inaccuracy
of any representation or warranty unless the Purchasers shall have
provided notice to the Vendor, with a copy to each of the other
Covenantors, in accordance with Section 14.3 on or prior to the
expiration of any applicable time period related to such
representation and warranty set out in Section 8.1);
(b) any breach or non-performance by the Vendor of any covenant to be
performed by it which is contained in this Agreement;
(c) any liabilities, obligations or commitments of the Vendor (whether
accrued, contingent or otherwise and whether or not determined or
determinable) related to the Purchased Business, the Leased
Property, the Premises or the Purchased Assets, existing at or prior
to the Effective Time other than the Assumed Liabilities;
(d) the sale of products by the Purchased Business up to the Effective
Time in respect of which product liability claims, but not including
warranty claims and other claims with respect to the quality,
suitability or compliance with specifications or orders of such
products are made against the Purchasers or their Affiliates;
(e) any claims by any employees of the Purchased Business, including
claims with respect to the Vendor Employee Plans relating to the
period prior to the Effective Time, other than claims by Transferred
Employees with respect to their employment with AMIS Canada after
the Effective Time;
(f) any event occurring or any condition existing at or prior to the
Effective Time relating to the Purchased Business, the Leased
Property, the Premises or the Purchased Assets which now or
hereafter constitutes a violation of, or gives rise to any liability
under, any Environmental Laws;
(g) any Release of any Hazardous Substances in, on, under or from the
Leased Property, the Premises or the Purchased Assets and whether by
the Vendor or any
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other person at or prior to the Effective Time and for greater
certainty, whether or not known at the Closing Date;
(h) any commission or other remuneration payable or alleged to be
payable to any broker, agent or other intermediary who purports to
act or have acted for or on behalf of the Vendor;
(i) any Canadian or foreign taxes of any kind incurred by Purchasers or
their Affiliates as a result of the reorganizational steps taken by
the Vendor and its Affiliates as set out in Section 2.2 of the
Arrangement other than the steps described in Sections 2.2(m) and
(n), and
(j) any claim by a third party alleging that the Transferred
Intellectual Property infringes an Intellectual Property right of
such third party to the extent of the damages associated with such
claim which arise from activities occurring prior to the Time of
Closing.
14.2 INDEMNIFICATION BY THE PURCHASERS
Each of the Purchasers and Parentco shall, jointly and severally,
indemnify and save harmless each of the Vendor, its directors, officers,
employees and agents, and its successors and all directors, officers, employees
and agents of each such successor from and against any and all Losses suffered
or incurred by such party as a result of or arising directly or indirectly out
of or in connection with:
(a) any breach by the Purchasers or Parentco of or any inaccuracy of any
representation or warranty of the Purchasers or Parentco contained
in this Agreement (provided that the Purchasers shall not be
required to indemnify or save harmless the Vendor in respect of any
breach or inaccuracy of any representation or warranty unless the
Vendor shall have provided notice to the Purchasers or Parentco in
accordance with Section 14.3 on or prior to the expiration of the
applicable time period related to such representation and warranty
set out in Section 8.1);
(b) any breach or non-performance by the Purchasers or Parentco of any
covenant to be performed by it which is contained in this Agreement;
(c) the operations of the Purchased Business after the Effective Time,
including the sale of products by the Purchased Business after the
Effective Time in respect of which product liability claims,
warranty claims and other claims with respect to the quality,
suitability or compliance with specifications or orders of such
products may be made by customers of the Purchased Business or other
persons or any failure by the Purchasers to pay, satisfy, discharge,
perform or fulfil on a timely basis any of the Assumed Liabilities;
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(d) warranty claims and other claims made by customers with respect to
the quality, suitability or compliance with specifications or orders
of products sold by the Purchased Business prior to the Effective
Time;
(e) any event occurring or any condition existing after the Effective
Time relating to the Purchased Business, the Leased Property, the
Premises or the Purchased Assets which constitutes a violation of,
or gives rise to any liability under, any Environmental Laws;
(f) any Release of any Hazardous Substances in, on, under or from the
Leased Property, the Premises or the Purchased Assets and whether by
the Vendor or any other person after the Effective Time;
(g) any breach or non-fulfilment of the terms or non-performance by the
Purchasers of any Assigned Contract, Assigned Third Party Software
Licences, Government Aid Agreements, the Lease following the
Effective Time;
(h) any claims after the Effective Time by Transferred Employees with
respect to their employment with AMIS Canada after the Effective
Time, including claims with respect to any employee benefit plan of
AMIS Canada, and including, for greater certainty, payment of any
severance benefits due on the termination of Transferred Employees
AMIS Canada that may be based on the Transferred Employees' length
of service with Vendor, or Unitron Industries Ltd;
(i) any claims after the Effective Time by Transferred Fixed Term
Employees, with respect to their engagement with AMIS Canada after
the Effective Time;
(j) any commission or other remuneration payable or alleged to be
payable to any broker, agent or other intermediary who purports to
act or have acted for or on behalf of the Purchasers; and
(k) any claim by a third party alleging that the Transferred
Intellectual Property infringes an Intellectual Property right of
such third party to the extent of the damages associated with such
claim which arise from activities occurring after the Time of
Closing.
14.3 NOTICE OF CLAIM
In the event that any party (the "Indemnified Party") shall assert a
First Party Claim or become aware of any Third Party Claim in respect of which
another party (the "Indemnifying Party") agreed to indemnify the Indemnified
Party pursuant to this Agreement, the Indemnified Party shall promptly give
notice thereof to the Indemnifying Party. Such notice shall specify whether the
Claim arises as a result of a Claim asserted by a third person against the
Indemnified Party (a "Third Party Claim") or whether the Claim is asserted by
the other party (a "First Party Claim"), and shall also specify with reasonable
particularity (to the extent that the information is available):
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(a) the factual basis for the Claim; and
(b) the amount of the Claim, if known.
If, through the fault of the Indemnified Party, the Indemnifying Party does not
receive notice of any Claim in time to contest effectively the determination of
any liability susceptible of being contested, the Indemnifying Party shall be
entitled to set off against the amount claimed by the Indemnified Party the
amount of any Losses incurred by the Indemnifying Party resulting from the
Indemnified Party's failure to give such notice on a timely basis.
14.4 FIRST PARTY CLAIMS
With respect to any First Party Claim, following receipt of notice
from the Indemnified Party of the Claim, the Indemnifying Party shall have 60
days to make such investigation of the Claim as is considered necessary or
desirable. For the purpose of such investigation, the Indemnified Party shall
make available to the Indemnifying Party the information relied upon by the
Indemnified Party to substantiate the Claim, together with all such other
information as the Indemnifying Party may reasonably request. If both parties
agree at or prior to the expiration of such 60-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such Claim, the
Indemnifying Party shall immediately pay to the Indemnified Party the full
agreed upon amount of the Claim, failing which the matter shall be referred to
dispute resolution pursuant to the provisions of Section 15.1.
14.5 THIRD PARTY CLAIMS
With respect to any Third Party Claim, the Indemnifying Party shall
have the right, at its expense, prior to any payment to the third person
asserting the Third Party Claim by the Indemnified Party or its Affiliates, to
participate in or assume control of the negotiation, settlement or defence of
the Claim. Subject to Section 14.6, if the Indemnifying Party elects to assume
such control, the Indemnified Party shall have the right to participate in, but
not control, the negotiation, settlement or defence of such Third Party Claim
and to retain counsel to act on its behalf, provided that the fees and
disbursements of such counsel shall be paid by the Indemnified Party unless the
Indemnifying Party consents to the retention of such counsel or unless the
representation of both the Indemnifying Party and the Indemnified Party by the
same counsel would be inappropriate due to the actual or potential differing
interests between them (such as the availability of different defences). If the
Indemnifying Party, having elected to assume such control, thereafter fails to
defend the Third Party Claim within a reasonable time, the Indemnified Party
shall be entitled to assume such control. In such event, the Indemnifying Party
shall be bound by the results obtained by the Indemnified Party with respect to
such Third Party Claim. Provided that the Indemnified Party has first provided
to the Indemnifying Party at least 10 Business Days prior written notice thereof
with reasonable details and during such 10 Business Days afforded the
Indemnifying Party an opportunity to provide to the Indemnified Party input
thereon (the Indemnifying Party shall not be obligated to give effect to any of
such input), the Indemnified Party shall be entitled to make a payment to any
person (a "Third Party") with respect to the Third Party Claim before the
completion of settlement negotiations or related legal proceedings where (a)
such payment is necessary in the reasonable view of the Indemnified Party acting
in good faith and in a manner consistent with reasonable commercial practices,
in
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respect of (i) a Third Party Claim by a customer relating to products or
services supplied by the Purchased Business where the Indemnified Party is the
Purchaser and the Purchased Business where the Indemnified Party is the Vendor,
or (ii) a Third Party Claim relating to any Contract which is reasonably
necessary to the ongoing operations of the Purchased Business or any material
part thereof by a reasonable and prudent operator in order to avoid material
damage to the relationship between the Indemnified Party and any of its major
customers or to preserve the rights of the Indemnified Party under such an
essential Contract, or (b) the Indemnified Party is required to do so by
applicable law or the order of any court, tribunal or regulatory body having
jurisdiction. In such event, the Indemnifying Party, forthwith after demand by
the Indemnified Party, shall reimburse the Indemnified Party for such payment.
If the amount of any liability of the Indemnified Party under the Third Party
Claim in respect of which such payment was made, as finally determined, is less
than the amount which was paid by the Indemnifying Party to the Indemnified
Party, the Indemnified Party, forthwith after receipt of the difference from the
Third Party, shall pay the amount of such difference to the Indemnifying Party.
14.6 SETTLEMENT OF THIRD PARTY CLAIMS
If the Indemnifying Party fails to assume control of the defence of
any Third Party Claim in accordance with Section 14.5, the Indemnified Party
shall have the exclusive right to contest, settle or pay the amount claimed.
Whether or not the Indemnifying Party assumes control of the negotiation,
settlement or defence of any Third Party Claim, and subject to the provisions of
Section 14.5 as to the rights of an Indemnified Party to make payment to a Third
Party before the completion of settlement negotiations, the Indemnifying Party
shall not settle any Third Party Claim without the written consent of the
Indemnified Party, which consent shall not be unreasonably withheld or delayed;
provided, however, that the liability of the Indemnifying Party shall be limited
to the proposed settlement amount if any such consent is not obtained within a
reasonable period of time for any reason.
14.7 CO-OPERATION
The Indemnified Party and the Indemnifying Party shall co-operate
fully with each other with respect to Third Party Claims and shall keep each
other fully advised with respect thereto (including supplying copies of all
relevant documentation promptly as it becomes available) and provide to each
other all reasonable assistance including the provision of documents,
information and personnel.
14.8 THRESHOLD AND MAXIMUM INDEMNIFICATION
No Claim shall be made pursuant to Sections 14.1 or 14.2 until the
aggregate Losses suffered or incurred by the Indemnified Party in respect of all
matters which could be the subject of such a Claim (whether under this Agreement
or the Share Purchase Agreement or both) exceed $100,000, at which time the
Indemnified Party may make Claims in respect of all Losses, including for
greater certainty, the first $100,000 thereof. The maximum aggregate amount
which the Indemnifying Party is required to pay pursuant to Section 14.1 or 14.2
of this Agreement and Section 14.1 or 14.2 of the Share Purchase Agreement is
$25,000,000.
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14.9 EXCLUSIVITY
(a) The provisions of this Article 14 shall apply to and are the sole
and exclusive remedy of each party with respect to any Claim for
breach of any covenant, representation, warranty or other provision
of this Agreement or any agreement, certificate or other document
delivered pursuant hereto (other than a claim for specific
performance or injunctive relief) with the intent that all such
Claims shall be subject to the limitations and other provisions
contained in this Article 14 and the provisions of Article 15.
(b) Notwithstanding any other provision of this Agreement, the
Purchasers and Parentco agree that the sole liability of the
Covenantors with respect to the title and ownership of Intellectual
Property shall be with respect to Section 5.11 and the sole
liability of the Covenantors with respect to infringement by the
Vendor's Intellectual Property of the Intellectual Property of other
persons shall be pursuant to the provisions of Section 5.11(e) and
5.11(g).
14.10 SET-OFF
In the event that a Claim of Indemnity by Purchasers or Parentco is
pending against a Covenantors at the time the Purchasers or Patentco is
obligated to make a payment to Vendor hereunder, the Purchasers shall make a
reasonable estimate of the amount of the claim and inform the Covenantors of
such estimate in writing and such amount shall be dealt with in accordance with
the provisions of this Agreement and, if applicable, the Escrow Agreement. Any
amount beyond the amount of such estimate shall be released to the Vendor.
ARTICLE 15
MISCELLANEOUS
15.1 DISPUTE RESOLUTION
For any dispute or claim arising out of or relating to this
Agreement, or breach hereof (other than as provided in Section 3.9), the
parties, prior to filing any claims in a court of law shall in good faith first
attempt to negotiate a written resolution of such dispute or claim within a
period not to exceed 15 days from the date of receipt of a party's request for
such negotiation. Such negotiations shall be conducted by managers of each party
who have authorization to resolve any such dispute or claim. Notwithstanding the
foregoing, either party at any time may apply to any court of competent
jurisdiction for injunctive relief in the event of an alleged breach of this
Agreement or otherwise to prevent irreparable harm.
15.2 NOTICES
(a) Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be delivered in person, transmitted by
facsimile or similar means of recorded electronic communication or sent by
registered mail, charges prepaid, addressed as follows:
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(i) if to the Purchasers and Parentco:
AMIS Holdings Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇.▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Vice-President and General
Counsel
Facsimile No.: 208.234.6035
(ii) if to Dspfactory Ltd.:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Facsimile No. 519.884.0228
(iii) if to any Covenantor other than the Vendor:
c/o DNN Holdings Ltd.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
(b) Any such notice or other communication shall be deemed to have been
given and received on the day on which it was personally delivered or
transmitted by telecopier, receipt confirmed (or, if such day is not a Business
Day, on the next following Business Day) or, if mailed, on the third Business
Day following the date of mailing or, if couriered overnight, on the next
following Business Day; provided, however, that, if at the time of mailing or
within three Business Days thereafter there is or occurs a labour dispute or
other event which might reasonably be expected to disrupt the delivery of
documents by mail, any notice or other communication hereunder shall be
delivered or transmitted by means of telecopier as aforesaid.
(c) Either party may change its address for service at any time by giving
notice to the other party in accordance with this Section 15.2.
15.3 CONSTRUCTION
The parties hereto acknowledge that their respective legal counsel
have reviewed and participated in settling the terms of this Agreement and that
any rule of construction to the effect that any ambiguity is to be resolved
against the drafting party, including the rule or doctrine of contra
proferentum, shall not be applicable in the interpretation of this Agreement.
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15.4 WAIVER OF JURY TRIAL
Each party hereto hereby waives, to the fullest extent permitted by
applicable laws, any right it may have to a trial by jury in respect of any
litigation directly or indirectly arising out of, under or in connection with
this Agreement. Each party hereto (a) certifies that no representative, agent or
counsel of the other party has represented expressly or otherwise that the other
party would not, in the event of litigation, seek to enforce the foregoing
waiver, and (b) acknowledges that it and the other party hereto have been
induced to enter into this Agreement by, among other things, the mutual waivers
and certifications contained in this Section.
15.5 PUBLIC ANNOUNCEMENT
The parties shall consult with each other before issuing any press
release or making any other public announcement with respect to this Agreement
or the transactions contemplated hereby and, except as required by any
applicable law or regulatory requirement, neither of them shall issue any such
press release or make any such public announcement without the prior written
consent of the other, which consent shall not be unreasonably withheld or
delayed.
15.6 DISCLOSURE
Prior to any public announcement of the transaction contemplated
hereby pursuant to Section 15.5, neither party shall disclose this Agreement or
any aspects of such transaction except to its board of directors, its senior
management, its legal, accounting, financial or other professional advisors, any
investment bank, dealer or financial institution contacted by it with respect to
any financing required in connection with such transaction or otherwise and
counsel to such investment bank, dealer or financial institution, or as may be
required by any applicable law or any regulatory authority or stock exchange
having jurisdiction.
15.7 EXPENSES
Except as otherwise provided herein, each party shall be responsible
for the expenses (including fees and expenses of legal advisors, accountants and
other professional advisors) incurred by it and its Affiliates, respectively, in
connection with the negotiation and settlement of this Agreement and the
completion of the transactions contemplated hereby.
15.8 CONFIDENTIALITY
The parties shall keep the terms and conditions of this Agreement
confidential pursuant to the terms and subject to the conditions contained in
the non-disclosure agreement dated January 20, 2004 made between the Vendor and
Parentco, as amended.
15.9 SUCCESSORS AND ASSIGNS
This Agreement shall enure to the benefit of and shall be binding on
and enforceable by the parties and their respective successors and permitted
assigns. Neither party may assign any of its rights or obligations hereunder
without the prior written consent of the
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other party, which consent shall not be unreasonably withheld or delayed. No
assignment by a Purchaser to its Affiliate will relieve it from any of its
obligations hereunder.
15.10 COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall
constitute an original and all of which taken together shall constitute one and
the same instrument.
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IN WITNESS WHEREOF this Agreement has been executed by the parties.
AMI SEMICONDUCTOR CANADA COMPANY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
_________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President
EMMA MIXED SIGNAL C.V.
By its Management Committee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
_________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Financial Officer, AMI
Semiconductor, Inc
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
_________________________________
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: President, AMI Acquisition
II LLC
AMI SEMICONDUCTOR, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
_________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Financial Officer
AMIS Holdings, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
_________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Financial
Officer
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DSPFACTORY LTD.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇
_________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: President and CEO
/s/ ▇▇▇▇▇ ▇▇▇▇▇
________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice-President, Finance and
Administration
DNN HOLDINGS LTD.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
_________________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
SOUTHBRIDGE INVESTMENT
PARTNERSHIP NO. 1, BY ITS GENERAL
PARTNER, SIPGP NO. 1 INC.
By Reg ▇▇▇▇▇▇▇▇
_________________________________
Name: Reg ▇▇▇▇▇▇▇▇
Title: President
MVO INVESTMENTS LTD.
By /s/ M. ▇▇▇ ▇'▇▇▇▇▇▇▇
_________________________________
Name: M. ▇▇▇ ▇'▇▇▇▇▇▇▇
Title: President
- 70 -
