Exhibit 99.2
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ASSET PURCHASE AGREEMENT
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BY AND AMONG
ZARLINK SEMICONDUCTOR LIMITED
AND
ZARLINK SEMICONDUCTOR INC.
AND
INTEL CORPORATION
AND
INTEL CORPORATION (UK) LIMITED
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XxXxxxxx Xxxxxxxx LLP
TABLE OF CONTENTS
PAGE
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ARTICLE 1 INTERPRETATION...................................................... 2
1.1 Definitions...................................................... 2
1.2 Knowledge........................................................10
ARTICLE 2 PURCHASE AND SALE...................................................10
2.1 Purchase and Sale................................................10
2.2 Excluded Assets..................................................11
2.3 Instruments of Conveyance........................................12
2.4 Assignment of Contracts, etc.....................................12
2.5 Assumption of Liabilities........................................13
2.6 Inventory........................................................14
ARTICLE 3 PURCHASE PRICE......................................................14
3.1 Purchase Price...................................................14
3.2 Tax Elections / Allocation of Purchase Price.....................14
3.3 Transfer Taxes...................................................15
3.4 Value Added Tax..................................................15
ARTICLE 4 WARRANTIES..........................................................16
4.1 Warranties of Vendor.............................................16
4.2 Warranties of Zarlink Canada.....................................30
4.3 Warranties of Purchasers.........................................31
ARTICLE 5 COVENANTS OF VENDOR.................................................32
5.1 Conduct of Business..............................................32
5.2 Examination......................................................33
5.3 Exclusivity......................................................33
5.4 Closing..........................................................34
ARTICLE 6 COVENANTS OF PURCHASERS.............................................36
6.1 Closing..........................................................36
ARTICLE 7 EMPLOYEES...........................................................36
7.1 Employees........................................................36
7.2 Contact with Employees...........................................37
7.3 Retention Bonus Payments.........................................37
PAGE
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ARTICLE 8 DATA PROTECTION.....................................................38
8.1 Compliance.......................................................38
ARTICLE 9 SURVIVAL OF WARRANTIES..............................................39
9.1 Survival of Warranties of Vendor and Zarlink Canada..............39
9.2 Survival of Warranties of Purchasers.............................39
ARTICLE 10 CONDITIONS OF CLOSING..............................................39
10.1 Conditions for the Benefit of Purchasers.........................39
10.2 Conditions for the Benefit of Vendor and Zarlink Canada..........40
10.3 Effects of Termination...........................................41
ARTICLE 11 INDEMNIFICATION....................................................41
11.1 Indemnification by Vendor........................................41
11.2 Indemnification by Purchasers ...................................42
11.3 Obligation to Reimburse..........................................42
11.4 Mitigation of Losses.............................................42
11.5 Notification.....................................................42
11.6 Defense of Third Party Claim.....................................43
11.7 No Compromise....................................................44
11.8 Failure to Defend................................................44
11.9 Limitation on Indemnification....................................44
ARTICLE 12 GUARANTEE..........................................................46
12.1 Guarantee Undertaking by Zarlink Canada..........................46
12.2 Nature of Obligations............................................46
12.3 Waiver...........................................................47
12.4 Not in Substitution..............................................47
12.5 Enforceability...................................................47
ARTICLE 13 CLOSING............................................................47
13.1 Date, Time and Place of Closing..................................47
ARTICLE 14 POST-CLOSING COVENANTS.............................................47
14.1 Books and Records................................................47
14.2 Access to Employees..............................................48
ARTICLE 15 MISCELLANEOUS......................................................48
15.1 Risk of Loss.....................................................48
PAGE
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15.2 Announcements; Confidentiality...................................49
15.3 Third Party Rights...............................................49
15.4 Further Assurances...............................................50
15.5 Successors in Interest; Assignment...............................50
15.6 Notices..........................................................50
15.7 Expenses.........................................................52
15.8 Counterparts.....................................................53
15.9 Agent for Service................................................53
15.10 Severability.....................................................53
15.11 Entire Agreement.................................................53
15.12 Gender; plural; business day.....................................54
15.13 Interpretation...................................................54
15.14 Currency.........................................................54
15.15 Headings; References to Legal Terms..............................54
15.16 Amendment........................................................54
15.17 Waiver...........................................................54
15.18 Governing Law....................................................55
15.19 Jurisdiction.....................................................55
ASSET PURCHASE AGREEMENT
AGREEMENT made in the Cities of Montreal, Canada and Santa Clara, California,
the 7th day of October, 2005
BY AND AMONG: ZARLINK SEMICONDUCTOR LIMITED, a corporation
incorporated under the laws of England and Wales under
registration number 0705031 and having its registered
office at Xxxxxx Manor, Swindon, Wiltshire, United
Kingdom, SNZ ZQW, herein acting and represented by Xxxxx
Xxxxxxxx and Xxx Xxxxxx, two of its directors,
("Vendor");
AND: ZARLINK SEMICONDUCTOR INC., a corporation incorporated
under the laws of Canada and having its registered
office at 000 Xxxxx Xxxx, Xxxxxx, Xxxxxxx, X0X 0X0
herein acting and represented by Xxxxxx X. XxXxxxxx, its
Senior Vice-President, Human Resources, General Counsel
and Secretary and Xxxxx Xxxxxxxx, its Senior
Vice-President, Finance and Chief Financial Officer,
("Zarlink Canada");
AND: INTEL CORPORATION, a corporation incorporated under the
laws of Delaware, with its registered office at 0000
Xxxxxxx Xxxxxxx Xxxx., Xxxxx Xxxxx, Xxxxxxxxxx, 00000,
herein acting and represented by Xxxxxx Xxxxxxx, its
Senior Vice President and President, Intel Capital,
("Intel US");
AND: INTEL CORPORATION (UK) LIMITED, a corporation
incorporated under the laws of England and Wales under
registration number 1134945 and having its registered
office at Xxxxxx Xxx, Xxxxxxx XX0 0XX, Xxxxxxxxx, Xxxxxx
Xxxxxxx, herein acting and represented by Xxxxxx
Xxxxxxx, its authorized signer,
("Intel UK")
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THIS AGREEMENT WITNESSETH THAT, in consideration of the mutual covenants herein
contained, it is agreed by and between the Parties as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
Where used herein or in any amendments hereto or in any communication required
or permitted to be given hereunder, the following terms shall have the following
meanings, respectively, unless the context otherwise requires:
a) "Accounts Payable" means all accounts payable, trade payables and
other amounts owed to creditors of Vendor and all accrued
liabilities in respect of the foregoing on the Closing Date.
b) "Accounts Receivable" means all accounts receivable, trade accounts,
notes receivable, book debts and other debts due or accruing due to
Vendor on the Closing Date.
c) "Affiliate" shall mean, with respect to any Person, any other Person
that directly or indirectly through one or more intermediaries
controls or is controlled by, or is under common control with, such
Person.
d) "Agreement" means this Asset Purchase Agreement, as amended from
time to time, including its recitals and Disclosure Schedule.
e) "Agreement Regarding Premises" means the agreement between Vendor
and Intel UK substantially in the form agreed by the Parties.
f) "Ancillary Agreements" means the Agreement Regarding Premises, the
Employee Consultation and Indemnity Agreement, the Non-Competition
and Non-Solicitation Deed, the Patent License Agreement, the Supply
Agreement and the Transition Services Agreement, collectively.
g) "Assumed Liabilities" shall have the meaning set forth in Section
2.5.
h) "Benefit Plans" shall have the meaning set forth in Section
4.1p)ii)B).
i) "Books and Records" means all TUPE Information, inspection records
and other records, books, documents and data bases recorded or
shared by means of any device, including in electronic form,
relating to the Business as are in the possession or under the
control of Vendor, but shall not include records, books, documents
and data bases of Vendor which pertain exclusively to the Excluded
Assets or businesses of Vendor other than the Business or any
records, books, documents or data bases of Vendor relating to Taxes
or Tax returns (except as provided in Section 5.4k). In the event
any of the above books and records
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pertain to both the Business, on the one hand, and the Excluded
Assets or businesses of Vendor other than the Business, on the other
hand, or if Vendor is required by Law to keep originals of any such
books and records, then the phrase "Books and Records" shall mean
copies thereof with all information not related to the Business
deleted.
j) "Business" means the business of the RF Front-End Consumer Business
Unit of Vendor as previously or presently conducted by Vendor,
consisting of the design, development, manufacture, marketing,
licensing, distribution and sale of tuner and demodulator integrated
circuits for satellite, terrestrial and cable market segments.
k) "Closing" means the completion of the purchase and sale of the
Purchased Assets contemplated hereunder and the payment to Vendor of
the Purchase Price required to be paid at Closing pursuant to
Section .
l) "Closing Date" shall have the meaning set forth in Section 13.1.
m) "CNDA" means, collectively, the Corporate Non-Disclosure Xxxxxxxxx
Xx, 0000000 dated February 11, 2004 and its Addendum No. 1 dated
August 12, 2005.
n) "Consents" means consents, approvals, waivers or the like from third
parties.
o) "Contracts" means the contracts, instruments, arrangements and
understandings listed in Section 1.1o) of the Disclosure Schedule
together with any contracts entered into by Vendor in connection
with, or used in or relating to, the Business, but excluding
licenses governed by the Patent License Agreement and Excluded
Contracts.
p) "Copyrights" means all copyrights that are either owned by or
licensed to Vendor in any Software, Technical Documentation or other
copyrighted work used in or relating to the Business.
q) "Customer and Supplier List" means the list of customers and
suppliers relating to the Business: (i) for which there is an
outstanding purchase order as at the Closing Date; or (ii) for which
a purchase order has been filled in the twelve (12) months prior to
the Closing Date, as disclosed in Section 1.1q) of the Disclosure
Schedule.
r) "Customer Data" means customer "personal data" (as defined in the
DPA) which form part of the Customer and Supplier List and/or the
Books and Records.
s) "Customs" shall have the meaning set forth in Section 3.4a).
t) "Disclosure Schedule" means the schedule dated the date hereof
addressed from Vendor to Purchasers.
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u) "DPA" means the United Kingdom Data Protection Xxx 0000.
v) "Employee Consultation and Indemnity Agreement" means the Employee
Consultation and Indemnity Agreement to be entered into by Vendor,
Zarlink Canada and Purchasers in the form agreed by the Parties
providing for (i) an employee consultation process during which,
among other things, Intel UK proposes to consult employees regarding
new terms of employment contracts with a view such that such
employment contracts become effective after Closing and (ii) the
allocation of consultation obligations and a related indemnity
between the Parties.
w) "Employee Data" means "personal data" (as defined in the DPA) of the
Employees which form part of the TUPE Information and/or the Books
and Records.
x) "Employee Payables" means all amounts payable to Employees or for
the benefit of Employees, including all accrued wages, salary and
benefits, accrued vacation and pay in lieu of notice obligations for
Employees as of the Closing Date, for Employees in respect of their
employment, or arising from events occurring up to the Closing Date,
and all employers' social security Taxes on such amounts.
y) "Employees" means the persons employed in the Business at the
Closing Date and consists only of those persons whose names are set
forth in Section 1.1y) of the Disclosure Schedule.
z) "Employment Claim" means any claim (whether arising by Laws, common
law or otherwise) by any Employee relating to his employment or its
termination including any claim in relation to redundancy; unfair
dismissal; discrimination on the grounds of sex, race, colour,
ethnic or national origin, disability, sexual orientation, religion
or belief; equal pay; wrongful dismissal; breach of contract; any
claim in tort and any other claim whatsoever within the jurisdiction
of any courts or tribunals operating within any jurisdiction,
including within the United Kingdom.
aa) "Equipment" means (i) all machinery, spare and repair or replacement
parts, equipment, motor vehicles, tools, computers, furniture,
fixtures, furnishings, office equipment (including word processing,
accounting, communication and reproduction equipment) owned or used
by Vendor in or relating to the Business (other than that which
forms part of the Excluded Assets or such equipment used, in part,
in the Business but primarily used in or relating to the businesses
of Vendor other than the Business), and (ii) all assignable
warranties of any Person covering all or any part of such items, all
of which having a net value of greater than US$1,000 being listed in
the Section 1.1aa) of the Disclosure Schedule.
bb) "Excluded Assets" shall have the meaning set forth in Section 2.2.
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cc) "Excluded Contracts" shall mean those contracts set forth in Section
1.1cc) of the Disclosure Schedule and any contracts with the
Employees other than the contracts of employment between Vendor and
the Employees transferred to Intel UK in accordance with TUPE on the
Closing Date as provided in Section 7.1.
dd) "Financial Statements" means the unaudited income statements
relating to the Business showing profit and loss items for the
calendar years ended December 31, 2002, 2003 and 2004 (excluding
revenues and expenses of Vendor not associated with the Business),
the unaudited income statement relating to the Business for the six
months period ended June 30, 2005, the statement of the Purchased
Assets as at September 23, 2005, all of which are attached as
Section 1.1dd) of the Disclosure Schedule.
ee) "Governmental Authority" means any domestic or foreign legislative,
executive, judicial or administrative body or Person having
jurisdiction in the relevant circumstances.
ff) "Indemnified Party" shall have the meaning set forth in Section
11.3.
gg) "Indemnifying Party" shall have the meaning set forth in Section
11.3.
hh) "Intellectual Property" means intellectual property of whatever
nature and kind, arising under the Laws of any jurisdiction anywhere
in the world, including all domestic and foreign trade-marks, trade
names, domain names, patents, trade secrets, data base rights,
Software, industrial designs, integrated circuit topographies and
copyrights, whether registered or unregistered, and all applications
for registration thereof, and inventions, discoveries, formulae,
processes and processing methods, technology and techniques,
know-how, manuals and all other items similar to any of the
foregoing.
ii) "Inventory" means all inventories, raw materials, work-in-progress
(other than work-in-progress located at the Swindon Foundry),
finished goods and supplies and maintenance items of Vendor used, to
be used in connection with, or relating to the Business.
jj) "Key Employees" means the Employees of Vendor engaged in the
Business designated by Intel UK as set forth in Section 1.1jj) of
the Disclosure Schedule.
kk) "Laws" means in any jurisdiction (i) all laws, statutes, codes and
regulations, and (ii) all judgments, orders, writs, injunctions,
decisions, rulings, decrees, and awards of any Governmental
Authority having the force of law, which in each of the above cases
binds the Party or Person referred to in the context in which such
word is used.
ll) "Leases" means the lease and sub-leases for certain Vendor premises
to be entered into by Vendor and Intel UK on the Closing Date as
contemplated by the Agreement Regarding Premises.
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mm) "Licensed Intellectual Property" means the Copyrights, Patent
Licenses, Topography Rights, Trade Secrets and other Intellectual
Property licensed by Vendor from third parties pursuant to the
license agreements listed in Section 1.1mm) of the Disclosure
Schedule.
nn) "Liens" means all mortgages, prior claims, pledges, liens, security
interests, conditional sale contracts, ownership or title retention
agreements and other encumbrances or rights of any nature whatsoever
or however arising that in substance secure payment or performance
of an obligation.
oo) "Losses" means any claims, demands, actions, causes of action,
judgments, settlements, awards, damages, losses, liabilities, costs
or expenses (including interest, penalties and reasonable fees of
attorneys and experts).
pp) "Material Adverse Change" means any material adverse change in the
affairs, business, operations, or conditions of the Business in the
aggregate or the Purchased Assets (such assets taken as a whole) or
in relationships with current and prospective customers, relative
competitive position, status of design wins as set forth in the
document provided to Purchasers by Vendor titled "Sales by Customer
Reports" and "Consumer Sales Pipeline", timeliness of satisfaction
of product milestones as set forth in the documents provided by
Vendor to Purchasers titled "Key Product Programs" or product
bookings projected in documents provided to Purchasers by Vendor
titled "Bookings, Billing and Open Backlog" and "Revenue by Market
Segment", in each case with respect to the Business, other than any
change relating to (A) the global economy including general,
political, financial or economic conditions or securities markets in
general or (B) the announcement or pendency of the transactions
contemplated hereby.
qq) "Non-Competition and Non-Solicitation Deed" means the
Non-Competition and Non-Solicitation Deed to be entered into by
Vendor, Zarlink Canada and the Purchasers on the Closing Date
substantially in the form agreed by the Parties
rr) "Non-Transferable Permits" means those Permits of Vendor used in or
relating to the Business which are not, by their terms or pursuant
to Law, transferable to Intel UK.
ss) "Owned Intellectual Property" means the Patents listed in Section
1.1ss) of the Disclosure Schedule and the Copyrights, Technical
Documentation, Technical Information, Topography Rights, Trade
Secrets and other Intellectual Property owned by Vendor and used in
or relating to the Business.
tt) "Parties" means Vendor, Zarlink Canada and Purchasers; and "Party"
shall mean any of them as the context may require.
uu) "Patents" means the registered patents and pending applications for
patents, throughout the world, owned by Vendor as at the Closing
Date, that are used in or
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relating to the Business, except for such patents set forth in
Section 1.1uu) of the Disclosure Schedule.
vv) "Patent License Agreement" means the Patent License Agreement to be
entered into by Intel US, Zarlink Canada and Vendor on the Closing
Date substantially in the form agreed by the Parties.
ww) "Patent Licenses" means the licenses for registered patents and
pending applications for patents throughout the world for which
Vendor has the right to sub-license without liability to a third
party as at the Closing Date that are used in or relating to the
Business listed in Section 1.1mm) of the Disclosure Schedule.
xx) "Permits" means permits, licenses, certificates of compliance,
consents, approvals and authorizations of, or registrations with,
any Governmental Authority, pertaining to the Business listed in
Section 1.1xx) of the Disclosure Schedule.
yy) "Permitted Encumbrances" means any unregistered Lien arising by
operation of Law and which has not become enforceable and
encroachments and other minor imperfections of title which do not
normally detract from the value or impair the use of the assets.
zz) "Permitted Loss" shall have the meaning set forth in Section
11.9iii).
aaa) "Person" means an individual, corporation, company, cooperative,
partnership, trust, unincorporated association, entity with
juridical personality or Governmental Authority.
bbb) "Prepaid Expenses" means expenses of the Business which have been
paid for by Vendor in advance of the period for which the related
goods and services have been delivered or performed.
ccc) "Proceedings" shall have the meaning set forth in Section 14.1.
ddd) "Purchase Price" shall have the meaning set forth in Section 3.1.
eee) "Purchased Assets" shall have the meaning set forth in Section 2.1.
fff) "Purchasers" shall mean, collectively, Intel UK and Intel US.
ggg) "Purchasers' Counsel" means Xxxxxx, Xxxx & Xxxxxxxx LLP.
hhh) "Purchasers' Indemnitees" shall have the meaning set forth in
Section 11.1.
iii) "Retention Bonus Payments" shall have the meaning set forth in
Section 7.3b).
jjj) "Rights" shall have the meaning set forth in Section 2.4.
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kkk) "Software" means computer programs, including all versions thereof,
and all related documentation, manuals, source code and object code,
program files, data files, computer related data, field and data
definitions and relationships, data definition specifications, data
models, program and system logic, interfaces, program modules,
routines, sub-routines, algorithms, program architecture, design
concepts, system designs, program structure, sequence and
organization, screen displays and report layouts, and all other
material related to such computer programs.
lll) "Specified Employees" means Employees of Vendor engaged in the
Business designated by Intel UK as set forth in Section 1.1lll) of
the Disclosure Schedule.
mmm) "Supply Agreement" means the Supply Agreement to be entered into by
Intel UK and Vendor on the Closing Date substantially in the form
agreed by the Parties.
nnn) "Swindon Foundry" means the semiconductor fabrication facility of
Vendor located at Swindon, United Kingdom.
ooo) "Taxes" or "Tax" means all taxes, including income, withholding,
real property, social service, corporation, capital, value added,
sales, franchise, excise, profits, gross receipts, customs duties,
stamp, transfer, water and business taxes.
ppp) "Technical Documentation" means reports, memos, drawings,
schematics, databases, engineering note books, data compilations,
product design flow and development information, datasheets, product
errata, product list and qualification reports and other documents
or materials in a tangible form containing any part of the Technical
Information, including those items set forth in Section 1.1ppp) of
the Disclosure Schedule.
qqq) "Technical Information" means work in progress, data, information,
know-how, descriptions of unpatented technology, techniques,
systems, product roadmaps, board layouts, integrated circuit
designs, net lists, RTL and high level definition language
descriptions of Vendor's products, bills of materials, experience
and other technical information used in or relating to the Business,
including proprietary processes, formulae, algorithms, models, user
interfaces, concepts, ideas, techniques, methods, source codes,
object codes and methodologies.
rrr) "Third Party Claim" shall have the meaning set forth in Section
11.6.
sss) "Time of Closing" shall have the meaning set forth in Section 13.1.
ttt) "Topography Rights" means integrated circuit topography rights that
are owned by or licensed to Vendor and used in or relating to the
Business.
uuu) "Trade Secrets" means trade secrets that are owned by or licensed to
Vendor, including Technical Information and any other information
that relates to
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manufacturing specifications or methods, processes, processing
procedures, research and development or other proprietary
information used in or relating to the Business.
vvv) "Transition Services Agreement" means the agreement to be entered
into by Intel UK and Vendor on the Closing Date, pursuant to which
Vendor will provide certain transition services to Intel UK,
substantially in the form agreed by the Parties.
www) "TULCRA" means the United Kingdom Trade Union and Labour Relations
(Consolidation) Xxx 0000.
xxx) "TUPE" means the United Kingdom Transfer of Undertaking (Protection
of Employment) Regulations 1981 together with any subsequent
amendments and alterations.
yyy) "TUPE Information" means information relating to the personnel in
any way engaged in the Business, as set forth in Section 1.1yyy) of
the Disclosure Schedule, in particular, but not necessarily
restricted, to the following:
i) the total number of employees employed by Vendor in relation
to the Business;
ii) the total payroll xxxx (i.e. total taxable pay and allowances
including employer's contributions to pension plans) of the
employees at (a) above;
iii) in respect of the employees referred to in paragraph (a), the
age, sex, job title, grade, general terms and conditions of
employment, the date continuous employment commenced and (if
different) the commencement date, enhancement rates, any other
factors affecting their redundancy entitlement and any
outstanding claims arising from employment; and
iv) details of any subcontractors or temporary workers employed or
used or engaged in the Business in the last twelve (12)
months.
zzz) "VAT" means value added tax in the United Kingdom.
aaaa) "Vendor" shall have the meaning set forth in the Preamble.
bbbb) "Vendor and Zarlink Canada Counsel" means XxXxxxxx Xxxxxxxx LLP.
cccc) "Vendor Group" means Vendor and its Affiliates from time to time
(all of them and any of them as the context requires).
dddd) "Vendor Indemnitees" shall have the meaning set forth in Section
11.2.
eeee) "Vendor Intellectual Property Rights" shall have the meaning set
forth in Section 4.1k).
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ffff) "Vendor License Agreements" shall have the meaning set forth in
Section 4.1k).
gggg) "Vendor Licensed Patents" shall have the meaning set forth in
Section 4.1k).
hhhh) "Vendor Sale Incentives" shall have the meaning set forth in Section
7.3a).
iiii) "Zarlink Canada" shall have the meaning set forth in the preamble.
1.2 Knowledge
Whenever any fact or matter is stated to be to the knowledge of Vendor, or any
similar reference, such reference shall mean that Vendor's officers or employees
listed on Section 1.2 of the Disclosure Schedule actually know the existence or
non-existence of such fact or matter, as the context requires. Each such
individual shall be deemed to have actual knowledge of a particular fact,
circumstance, event or other matter if (i) such individual has actual knowledge,
(ii) such individual would have had actual knowledge if he had performed a due
and diligent internal inquiry in the circumstances; or (iii) such fact,
circumstance, event or other matter is reflected in one or more documents
(whether written or electronic, including e-mails sent to or by such individual)
in, or that at any time have been in, such individual's possession within the
five years prior to the date hereof.
ARTICLE 2
PURCHASE AND SALE
2.1 Purchase and Sale
Upon and subject to the terms and conditions hereof, Vendor shall sell to
Purchasers, as applicable, and Purchasers, as applicable, shall purchase from
Vendor, at the Time of Closing on the Closing Date and for the Purchase Price as
allocated by mutual agreement of the parties, all of Vendor's right, title and
interest in the following assets of the Business as a going concern, wherever so
situate (collectively, the "Purchased Assets"):
By Intel UK:
a) the Inventory;
b) the Equipment;
c) the Contracts (subject to Section 2.4);
d) the Books and Records;
e) the Permits (other than the Non-Transferable Permits) (subject to
Sections 2.4 and 2.5);
f) the Prepaid Expenses;
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g) the cost and pricing information, customer and account information,
market segment information and sales strategies and the like
information of the Business;
h) all new and unused shipping and packaging supplies of the Business
owned by Vendor;
i) rights to use assets owned by Vendor's suppliers and customers that
are loaned to or temporarily used by the Business subject to the
terms of any Contracts;
j) the goodwill of the Business; and
k) except as provided through the Patent License Agreement or
Transition Services Agreement, all other assets comprising personal
property, tangible or intangible, used by Vendor in or relating to
the Business other than the Excluded Assets;
By Intel US:
l) the Owned Intellectual Property (together with any claims against
third persons for infringement, misappropriation or other violation
of any Owned Intellectual Property, whether for any past, present or
future infringement, misappropriation or other violation) and the
Licensed Intellectual Property (subject to Sections 2.4 and 2.5);
and
m) the Customer and Supplier List.
In addition, Vendor shall grant to Intel US a license to the Vendor Licensed
Patents upon and subject to the terms and conditions of the Patent License
Agreement.
The same covenants shall be deemed to be given by Vendor at Closing in relation
to the Purchased Assets as are implied under Part 1 of the Law of Property
(Miscellaneous Provisions) Xxx 0000 where a disposition is expressed to be made
with full title guarantee.
2.2 Excluded Assets
The phrase Purchased Assets does not include the following (collectively, the
"Excluded Assets"):
a) the Swindon Foundry;
b) all insurance policies of Vendor associated with the Business;
c) all Tax refunds and credits receivable by Vendor;
d) the names "Zarlink", "Zarlink Semiconductor", "Mitel", "Mitel
Semi-Conductor" or variations thereof, subject to the right to use
granted in Section 2.6;
e) all cash on hand, bank balances, moneys in the possession of banks
and other depositaries, term or time deposits, guaranteed investment
certificates, treasury
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bills, other securities and other similar cash or cash-equivalent
items (other than the Prepaid Expenses);
f) the Excluded Contracts;
g) the Vendor Licensed Patents;
h) the Accounts Receivable; and
i) the assets and rights provided by Vendor to Intel UK identified in
the Transition Services Agreement.
2.3 Instruments of Conveyance
In order to effectuate more fully and completely the sale, assignment,
conveyance and transfer of the Purchased Assets pursuant to the terms and
conditions hereof, Vendor shall deliver to Purchasers such bills of sale,
assignments and instruments of conveyance, including forms of patent, trademark
and copyright assignments, as requested by Purchasers, acting reasonably, to
permit the assignment, transfer and conveyance from Vendor to Purchasers and the
acquisition by Purchasers from Vendor of all right, title and interest of Vendor
in, to and under the Purchased Assets, the whole with effect as of the Closing
Date. Title to all Purchased Assets that can be transferred by delivery shall
pass on delivery and such delivery shall be deemed to take place at Vendor's
facilities used in the Business, as applicable, at Closing.
2.4 Assignment of Contracts, etc.
Vendor shall use commercially reasonable efforts (but without incurring any
material costs or out-of-pockets expenses save Vendor's responsibility for its
and the landlords' costs and expenses of obtaining consents to the subletting of
the Vendor premises contemplated by the Leases) to obtain all required Consents
necessary for the sale, assignment, transfer, sub-license, sub-lease and
conveyance by Vendor to Purchasers of any Contracts, Permits (other than
Non-Transferable Permits) and other Purchased Assets (collectively, the
"Rights") and the re-issuance in the name and for the benefit of Intel UK of
permits to replace Non-Transferable Permits of the Business on terms not less
favourable to Intel UK. Intel UK shall cooperate with Vendor in obtaining such
Consents including possible written assumptions thereof by Intel UK. In order,
however, that the full value of any Right may be realized for the benefit of
Purchasers, to the extent permitted by applicable Law, Permits and Contracts, as
the case may be, Vendor shall, in respect of Rights related to Consents for
which the other contractant or issuer has not responded, at the written request
and under the direction and expense of Purchasers, in the name of Vendor or as
otherwise specified by Intel UK, acting reasonably, take all such reasonable
action and do or cause to be done all such reasonable things which are necessary
and advisable in order that the obligations of Vendor in connection with such
Right may be performed by Purchasers as agent of Vendor in such manner that the
value of such Right shall be preserved and shall, as between the Parties, enure
to the exclusive benefit of Purchasers, and that the collection of moneys due
and payable to Purchasers in connection with such Right shall be received by
Purchasers. Vendor shall promptly pay over to Intel UK for the benefit of
Purchasers all moneys collected by or paid to or for Vendor in respect of every
such Right.
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Intel UK shall be entirely responsible for the timely performance of the
obligations associated with any such Rights it requests Vendor to maintain in
accordance with the above. Vendor shall not be required to make any expenditures
in connection with its obligations under this Section 2.4 to preserve Rights
and, in any case, all such obligations shall expire six (6) months after Closing
or as set forth in the Transition Services Agreement, as applicable.
Intel UK shall use commercially reasonable efforts to obtain the re-issuance of
Non-Transferable Permits required by Intel UK to continue the conduct of the
Business with the Purchased Assets. Vendor shall reasonably cooperate with Intel
UK in its efforts to procure the re-issuance of any such Non-Transferable
Permits.
Intel UK acknowledges and agrees that Vendor has no obligation to cause existing
suppliers and service providers to the Business to continue the existing
relationship or to provide Intel UK the terms and conditions provided to Vendor,
provided however, the foregoing is not intended to alter the agreements of the
Parties herein regarding the Contracts. Intel UK shall be responsible for the
negotiation of its own terms and conditions with such suppliers and service
providers.
2.5 Assumption of Liabilities
Subject to the completion of the transaction of sale, assignment, transfer and
purchase contemplated hereunder, but with effect from the Closing Date, each of
Purchasers, as applicable, hereby agrees, as part of the consideration for the
Purchased Assets, to assume, discharge, satisfy, perform and fulfill in a timely
manner, strictly in accordance with their terms, the following liabilities and
obligations of Vendor in connection with the Business (collectively, the
"Assumed Liabilities"):
a) in the case of Intel US, all liabilities and obligations which will
accrue on or after the Closing Date under the Licensed Intellectual
Property assigned or transferred to Intel US in accordance with the
terms hereof, but other than liabilities accruing as a result of a
breach of or default thereunder prior to the Closing Date; and
b) in the case of Intel UK, (i) all liabilities and obligations which
will accrue on or after the Closing Date under the Contracts (to the
extent transferred to Intel UK) and Permits assigned or transferred
to Intel UK in accordance with the terms hereof, but other than
liabilities accruing as a result of a breach of or default
thereunder on or prior to the Closing Date and (ii) all liabilities
and obligations relating to Employees (and no employees of Vendor or
any other member of Vendor Group who are not Employees) after the
Closing Date to the extent that they relate to employment by Intel
UK after Closing in accordance with Section 7.1 and the Employee
Consultation and Indemnity Agreement.
All liabilities (including all Accounts Payable) that are not Assumed
Liabilities shall remain the liabilities and obligations of Vendor.
-14-
2.6 Inventory
Intel UK and its Affiliates shall have the right to use the tradenames mentioned
in Section 2.2d) until the date of the first anniversary of the Closing Date for
the purpose of selling Inventory already marked or stamped with such names and
comprised in the Purchased Assets and for products of the Business manufactured
for up to sixty (60) days from the Closing Date or for such period as provided
in the Transition Services Agreement, as applicable.
Vendor acknowledges it has been informed that, with respect to Inventory located
in Korea and Malaysia at the Closing, Intel UK is purchasing such Inventory as
agent for Intel Service APAC Inc. and, at Closing, Vendor shall deliver title to
such Inventory to such entity pursuant to a xxxx of sale or other appropriate
documentation reasonably agreed upon by the Parties. If, prior to Closing, Intel
UK notifies Vendor that it has been appointed to act as agent to acquire any
other Inventory at the Closing on behalf of an Affiliate, Vendor shall deliver
title to such Inventory to such Affiliate as Intel UK requests in the same
manner as provided above for Intel Service APAC Inc. Nothing in this Section 2.6
or with respect to Intel UK's status as agent for its Affiliates shall abrogate
any of the obligations of Intel UK pursuant to this Agreement.
ARTICLE 3
PURCHASE PRICE
3.1 Purchase Price
The consideration for the sale, assignment, transfer and conveyance of the
Purchased Assets made pursuant to Article 2 (the "Purchase Price") shall be
Seventy Million U.S. Dollars (U.S.$70,000,000) less the amounts of any Vendor
Sale Incentives and Retention Bonus Payments pursuant to Section 7.3, subject to
the terms and conditions hereof. The Purchase Price shall be paid at or after
Closing, as contemplated herein, by Intel US or Intel UK on behalf of Purchasers
to Vendor, at its option, by way of certified cheque, bank draft or wire
transfer.
3.2 Tax Elections / Allocation of Purchase Price
The Purchase Price shall be allocated among the Purchased Assets as set forth in
the purchase price allocation attached as Section 3.2 of the Disclosure Schedule
or as mutually agreed by the Parties. The allocation of the Purchase Price shall
be final and binding upon the Parties for all purposes, including the filing of
all Tax or other returns and the preparation of all financial statements and
other documents and records.
The Parties shall make jointly the necessary elections and execute and file,
within the prescribed delays, the prescribed election forms and any other
documents required to give effect to the foregoing and shall also prepare and
file all of their respective Tax returns in a manner consistent with such
elections.
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3.3 Transfer Taxes
Purchasers shall be liable and shall pay all sales Taxes, registration fees,
license fees or other like charges properly payable upon and solely as a result
of the sale, assignment, conveyance and transfer of the Purchased Assets from
Vendor to Purchasers hereunder.
3.4 Value Added Tax
a) The Parties intend that article 5 of the Value Added Tax (Special
Provisions) Order 1995 shall apply to the sale of the Business and
UK Assets (as defined below) to Intel UK under this Agreement and
agree to use all reasonable endeavours to secure, including
submission of a request on or before the date hereof for a
confirmation from the HM Revenues and Customs ("Customs"), that the
sale is treated as neither a supply of goods nor a supply of
services under that article.
b) If nevertheless any VAT is payable on the sale of the UK Assets
under this Agreement and Customs have so confirmed in writing after
full disclosure of all material facts, Vendor shall deliver to Intel
UK a proper VAT invoice in respect of it, together with a copy of
the confirmation that VAT is payable from Customs. Intel UK shall
pay to Vendor the amount of that VAT together with any interest and
penalties on the later of (i) five (5) business days following
delivery by Vendor to Intel UK of the VAT invoice and the document
disclosing all material facts as described in Section 3.4c), and
(ii) five (5) business days before the date on which Vendor is
liable to account to Customs for such VAT.
c) For the purposes of Section 3.4b), VAT shall only be treated as
payable if Customs have so confirmed in writing after full
disclosure of all material facts.
d) Before sending any relevant letter to Customs, Vendor shall give
Intel UK a reasonable opportunity to comment on it, and shall make
such amendments as Intel UK reasonably requires.
e) Vendor shall, on request, make available any information and
documents in its control required to establish to Customs and any
tribunal or court that no liability, or a reduced liability, arises
on Intel UK or any other company under Section 44 of VATA 1994 as a
result of the sale of the Business and the UK Assets.
f) Vendor shall apply to Customs for a direction under Section 49(1)(b)
of VATA 1994 that the records of the Business relating to VAT shall
be retained by Vendor, but in the event that Customs refuse to give
such a direction, then Vendor shall transfer such records to Intel
UK.
g) Intel UK warrants to Vendor that:
i) it is or shall be at Closing be a taxable person and duly
registered for the purposes of Value Added Tax;
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ii) with effect from Closing, it intends to use the UK Assets in
carrying on the same kind of business as previously carried on
by Vendor; and
iii) it is not a Party to this Agreement as a trustee, nominee or
agent for any other Person.
h) For the purposes of this Section 3.4, "UK Assets" means such of the
Purchased Assets as are to be acquired by Intel UK pursuant to this
Agreement.
ARTICLE 4
WARRANTIES
4.1 Warranties of Vendor
Vendor warrants to Purchasers as follows and acknowledges that Purchasers are
relying upon such warranties in connection with the purchase by Purchasers of
the Purchased Assets and that Purchasers would not have entered into this
Agreement without such warranties:
a) Due Incorporation.
Vendor is duly incorporated and existing under the Laws of England
and Wales and has all necessary corporate power and authority to
own, lease and operate the Purchased Assets and to conduct the
Business as and in the places where such Purchased Assets are now
owned, leased or operated or such Business is now conducted.
b) Due Authorization. Vendor has the necessary corporate power and
authority to execute this Agreement and the Ancillary Agreements and
to perform its obligations hereunder and thereunder. The execution
of this Agreement and each of the Ancillary Agreements by Vendor,
and the performance by Vendor, of its obligations under such
agreements have been duly authorized by all necessary action on
their part. Except for the completion of notices or filings pursuant
to anti-trust or competition Laws, such execution and performance by
Vendor, do not require any action or Consent of, any registration
with, or filing, or notification to, any Governmental Authority
under any Laws to which Vendor is subject.
c) Enforceability. This Agreement and each of the Ancillary Agreements
constitute a legal, valid and binding obligation of Vendor,
enforceable against it in accordance with their terms subject to
applicable bankruptcy, insolvency, reorganization and similar Laws
affecting the enforcement of creditors rights generally and to the
fact that specific performance is an equitable remedy available only
at the discretion of the Court.
d) No Conflict. The execution of this Agreement and each of the
Ancillary Agreements, the consummation of the transactions
contemplated herein and
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therein and the performance by Vendor, of its obligations hereunder
and thereunder do not:
i) violate, contravene or breach, or constitute a default under,
the constating documents or by-laws of Vendor;
ii) subject to obtaining the Consents disclosed in Section
4.1d)ii) of the Disclosure Schedule, result in the breach or
violation of any Contract, agreement or other instrument
pertaining to the Business; or
iii) except for any filing or notification pursuant to applicable
anti-trust or competition Laws, violate, contravene or breach
any Laws.
e) No Options. There is no contract, option or any other right of
another Person binding upon or which at any time in the future may
become binding upon Vendor to sell, transfer, assign, pledge,
charge, mortgage or in any other way dispose of or encumber any of
the Purchased Assets other than pursuant to the provisions of this
Agreement or with respect to the sale of Inventory pursuant to
contracts and purchase orders accepted by Vendor in the usual and
ordinary course of business consistent with past practice.
f) Books and Records. The Books and Records of the Business have been
maintained in accordance with sound business practices and fairly
and accurately disclose in all material respects the financial
condition of the Purchased Assets and all transactions of the
Business.
g) Financial Statements. The Financial Statements fairly and accurately
disclose, in all material respects, the results of operations for
the periods therein indicated and the Purchased Assets at the end of
the period therein indicated in accordance with Zarlink Canada's
accounting policies, which accounting policies are based on United
States generally accepted accounting principles ("GAAP") and fairly
present the financial condition of the Purchased Assets as at their
respective dates.
Since March 25, 2005, there has been no Material Adverse Change.
h) Title to Property; Condition. Vendor is the owner of the Purchased
Assets (other than such movable or personal property consumed or
disposed of after the date hereof in the ordinary course of business
and in a manner consistent with past practice, and other than the
Owned Intellectual Property, Licensed Intellectual Property and
Vendor Licensed Patents which are covered exclusively by the
warranties in Section 4.1k)), free and clear of any and all Liens
other than Permitted Encumbrances.
Section 1.1aa) or Section 4.1h) of the Disclosure Schedule,
collectively, set forth a correct and complete list of all Equipment
and other tangible personal property assets that are owned or leased
by Vendor and are Purchased Assets. Except as set forth on Section
4.1h) of the Disclosure Schedule: (i) each such lease is in full
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force and effect; (ii) all lease payments due to date on any such
lease have been paid, and neither Vendor nor, to the knowledge of
Vendor any other party, is in default under any such lease, and no
event has occurred which constitutes, or with the lapse of time or
the giving of notice or both would constitute, a default by Vendor
or, to the knowledge of Vendor any other party, under such lease;
and (iii) to Vendor's knowledge, there are no disputes or
disagreements between Vendor and any other party with respect to any
such lease.
All items of personal property currently owned or used by Vendor in
the Business are in good operating condition and repair, subject to
ordinary wear and maintenance, and are owned outright by Vendor or
validly leased. None of the personal property is subject to any
agreement or understanding for its use by any Person other than
Vendor or its employees.
i) Inventory. The Inventory included in the Purchased Assets, subject
to a reasonable allowance for obsolescence, is good and usable and
is capable of being processed and sold in the ordinary course of
business. The Inventory levels of the Business have been maintained
at levels sufficient for the continuation of the Business in the
ordinary course of business.
j) Title to and Sufficiency of Assets. The Purchased Assets constitute
all of the assets used in or relating to the Business (other than
the Excluded Assets) and, together with certain third party
licenses, services and rights under the Supply Agreement, the Patent
License Agreement and the Transition Services Agreement, are
sufficient for the continued operation of the Business after the
Closing Date in the same manner in all material respects as the
Business was operated prior to the Closing Date. The foregoing
warranty does not apply to any Intellectual Property matters, all of
which are covered exclusively by the warranties set forth in Section
.
k) Intellectual Property. The Owned Intellectual Property and the
Licensed Intellectual Property, together with the Vendor Licensed
Patents to be licensed to Intel UK pursuant to the Patent License
Agreement, constitute all of the Intellectual Property (excluding
any Intellectual Property that is in the public domain) that Vendor
is using, or holds for use, in the operation of the Business (the
"Vendor Intellectual Property Rights"). No member of the Vendor
Group other than the Vendor owns any Intellectual Property used
exclusively in the Business. For the purpose of this Section 4.1k),
"Vendor Licensed Patents" means the Patents that are licensed by
Vendor to Intel UK under the Patent License Agreement. For the
avoidance of doubt, "Vendor Licensed Patents" are not included in
the Owned Intellectual Property.
Section 4.1k) of the Disclosure Schedule and Schedule 1.1g) of the
Patent License Agreement include a complete list of all Intellectual
Property rights applied for by or registered to Vendor that are used
or held for use in the Business, and specify, where applicable, the
current owner of record of such Intellectual Property rights
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and the jurisdictions in which each such Intellectual Property right
has been issued or registered or in which an application for such
issuance and registration has been filed, including the respective
registration or application numbers and, in the case of issued
patents, the name of at least one of the inventors.
Vendor is currently listed either under its current name or under
its former names "Mitel Semiconductor" or "Plessey Semiconductors"
in the records of the applicable United Kingdom, European or foreign
national governmental Intellectual Property agencies as the sole
owner of record of the registered Owned Intellectual Property and
the Vendor Licensed Patents. All registered Owned Intellectual
Property and the Vendor Licensed Patents have been duly maintained,
including the submission of all necessary filings in accordance with
the legal and administrative requirements of the applicable
jurisdictions, have not lapsed, expired or been abandoned prior to
the end of its ordinary term, and such registrations are valid,
subsisting, and in proper form (except to the extent that the name
of the current record owner needs to be updated to reflect Vendor's
current name). Section 4.1k)(i) of the Disclosure Schedule sets
forth a complete list of all material written licenses, sublicenses
and other agreements under which Vendor has granted to any other
Person any right to use any Owned Intellectual Property ("Outbound
License Agreements"), Section 4.1k)(ii) of the Disclosure Schedule
sets forth a complete list of all material written licenses,
sublicenses and other agreements under which a third party has
granted to Vendor a license to use any Intellectual Property owned
or controlled by such third party and used by Vendor in the Business
("Inbound License Agreements" and, together with the Outbound
License Agreements, the "Vendor License Agreements"), in each case
including the identity of all parties thereto and a brief
description of the nature and subject matter thereof. Except as set
forth in Section 4.1k)(iii) of the Disclosure Schedule, Vendor has
not granted any licenses or rights under any Owned Intellectual
Property except for non-exclusive use licenses granted by Vendor to
customers in the ordinary course of business. No termination of any
Vendor License Agreement (other than any expiration of the stated
term thereof) or loss or modification of rights of Vendor thereunder
is pending or, to Vendor's knowledge, threatened. There is no
outstanding or, to Vendor's knowledge, threatened dispute or
disagreement with respect to any Vendor License Agreement that
reasonably could be expected to materially affect any of the
respective rights and obligations of the parties thereunder. Subject
to Section 2.4, the execution, delivery and performance by Vendor of
this Agreement and the Patent License Agreement, and the
consummation of the transactions contemplated hereby and thereby,
will not result in the loss or impairment of, or give rise to, any
right of any third party to terminate, reprice or otherwise modify
any rights or obligations of Vendor under any Vendor License
Agreement. Vendor has not made any submission or suggestion to and
is not subject to any agreement with a standards body or multi-party
standards agreement that would obligate Vendor to grant licenses to
or otherwise impair its control of any Owned Intellectual Property.
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Except as disclosed in Section 4.1k) of the Disclosure Schedule,
there are no outstanding agreements or assignments in which Vendor
has granted any exclusive rights in any Vendor Licensed Patents or
whose terms otherwise are inconsistent with the provisions of the
Patent License Agreement.
Except as set forth in Section 4.1k) of the Disclosure Schedule,
Vendor is not a party to any agreement or commitment to pay any
ongoing royalty, licence or other fee with respect to the use of the
Owned Intellectual Property or the Licensed Intellectual Property.
Except as disclosed in Section 1.1mm) of the Disclosure Schedule,
Vendor is the owner of the Owned Intellectual Property. Vendor has
the right to use the Licensed Intellectual Property in the manner in
which it is currently used in the Business and either owns or has
the right to sublicense (and is not contractually obligated to pay
any compensation to any third party in respect thereof) the Vendor
Licensed Patents for use pursuant to the Patent License Agreement in
connection with the design, development, manufacture, marketing,
sale, distribution and support of the products that comprise the
Business.
Vendor has taken commercially reasonable steps to maintain the
confidentiality of all information that constitutes or constituted a
trade secret of the Business (excluding any information that, prior
to its publication or unrestricted disclosure to a third party,
Vendor determined in its reasonable business judgment not to
continue to protect as a trade secret).
Except as set forth in Section 4.1k) of the Disclosure Schedule, no
claim with respect to the Vendor Intellectual Property Rights has
been asserted, or to Vendor's knowledge threatened, against Vendor
by any Person challenging the ownership by Vendor of, the use of or
the validity or effectiveness of any Vendor Intellectual Property
Rights.
The conduct of the Business as currently conducted, including the
design, development, manufacture, marketing, sale, distribution and
support of the products that comprise the Business, does not
infringe, misappropriate or otherwise violate any Intellectual
Property rights of any other Person. Except as set forth on Section
4.1k) of the Disclosure Schedule, to Vendor's knowledge, no third
party is misappropriating or infringing any material Vendor
Intellectual Property Rights, excluding any misappropriation or
infringement that could not have a material adverse effect on the
Business. No source code of any Software owned by Vendor that has
been incorporated or embedded in any products that comprise the
Business has been licensed or otherwise disclosed to another Person
other than an escrow agent pursuant to the terms of a source code
escrow agreement in customary form. Except as set forth in Section
4.1k) of the Disclosure Schedule, no Software that has been
incorporated or embedded in any products that comprise the Business
contains any code that is owned by any third party, including any
code that is licensed pursuant to the provisions of any "open
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source" license agreement, or any other license agreement that
requires source code be distributed or made available in connection
with the distribution of the licensed software in object code form
or that limits the amount of fees that may be charged in connection
with sublicensing or distributing such licensed software (each, an
"Open Source License"). None of such products of Vendor, as a result
of the intermingling or integration of code owned by Vendor with any
"open source" Software licensed under any Open Source License is, in
whole or in part, subject to the provisions of any Open Source
License.
Except as disclosed in Section 4.1k) of the Disclosure Schedule, no
Vendor Intellectual Property Right is subject to any outstanding
decree, order, judgment, or stipulation directed specifically to
Vendor restricting in any manner the licensing or use thereof by
Vendor, the parties acknowledging the possible impact of applicable
export control legislation.
None of the Employees or former employees, officers or independent
contractors of Vendor holds any right, title or interest, directly
or indirectly, in or to any of the Owned Intellectual Property or
Vendor Licensed Patents, proprietary to Vendor, or has asserted any
claim with regard to Owned Intellectual Property or any Vendor
Licensed Patents, proprietary to Vendor. Vendor has obtained, from
its Employees or independent contractors involved in developing
Owned Intellectual Property or Vendor Licensed Patents, proprietary
to Vendor and working in a jurisdiction in which moral rights are
recognized by local law, a written waiver of any moral rights any
such Employee may claim to have in Owned Intellectual Property or
Vendor Licensed Patents, proprietary to Vendor. Vendor has obtained
from the Employees or such independent contractors an assignment of
all rights, title and interest to the Owned Intellectual Property
and Vendor Licensed Patents.
No Employee is obligated under any agreement (including licenses,
covenants or commitments of any nature) or subject to any judgment,
decree or order, or any other restriction that would conflict in any
material respect with the Vendor Intellectual Property Rights.
l) Litigation. Except as disclosed in Section 4.1l) of the Disclosure
Schedule, there are (i) no actions, claims, investigations,
arbitrations, or other proceedings pending before any Governmental
Authority or, whether or not pending, brought by any Person and
Vendor has not settled or compromised any such suit, claim, action,
arbitration, proceeding or investigation, whether filed or
threatened within the five (5) years prior to the date of this
Agreement, or to the knowledge of Vendor, threatened against, (a)
with respect to, or affecting in any manner, Vendor in connection
with the Business, the Purchased Assets or Employees or (b) Vendor
that could reasonably be expected to prevent, alter or delay the
transactions contemplated by this Agreement and the Ancillary
Agreements; and (ii) no outstanding judgements, orders decrees,
writs, injunctions, decisions, rulings or awards against, with
respect to, or in any manner (a) affecting the
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Business or any of the Purchased Assets or (b) could reasonably be
expected to prevent, alter or delay the transactions contemplated by
this Agreement and the Ancillary Agreements.
m) No Default Under Contracts. Section 4.1m) of the Disclosure Schedule
sets forth all the contracts, agreements, instruments, arrangements
and understandings that are material to the Business or the
Purchased Assets (the "Material Contracts"). Vendor in connection
with the Business (i) is in good standing and entitled to all
benefits under each of, (ii) has performed in all material respects
all obligations required to be performed under each of, and (iii) is
not in default under, or in breach of, the Material Contracts or any
of the other Contracts (other than, in the case of (iii) for such
other Contracts, any non-performances, defaults or breaches which,
in the aggregate, would not be reasonably expected to have a
material adverse effect on the Business). To the knowledge of
Vendor, no other party to such Material Contracts or other Contracts
is in default or breach thereof and there exists no fact, condition
or circumstance which, after notice or lapse of time would result in
the default or breach thereof by any such other party. All such
Material Contracts and other Contracts are in full force and effect,
unamended.
n) Tax Matters.
Vendor is a taxable person and is duly registered for the purposes
of Value Added Tax.
Vendor is not, and has never been, a close company for the purposes
of the Income and Corporation Taxes Xxx 0000.
There is no instrument which is necessary to establish Vendor's
title to any of the Purchased Assets which is liable to stamp duty
in the United Kingdom but which has not been duly stamped or which
would attract stamp duty if brought within the United Kingdom.
None of the Purchased Assets consists of a computer, an item of
computer equipment, buildings, civil engineering works (or a part
thereof) which are capital items for purposes of Part XV of the
Value Added Tax Regulations 1995 (SI 1995/2518) (adjustments to the
deductions of input tax on capital items).
Section 4.1n) of the Disclosure Schedule sets forth a complete copy
of all plans and arrangements pursuant to which Employees have
acquired (or have an entitlement to acquire) any securities,
interests in securities or securities options (as those terms are
defined for purposes of Part 7, Income Tax (Earnings and Pension
Act) 2003) where the right or opportunity to acquire such
securities, interests in securities or securities options were made
available by reason of the employment of any Employee by Vendor or
any of its Affiliates.
-23-
o) Permits. The Permits constitute all permits, licenses, certificates
of compliance, consents, approvals and authorisations of, and
registrations with, any Governmental Authority necessary or required
to conduct the Business as presently conducted. Vendor is in
compliance with all such Permits and all such Permits are valid and
in full force and effect, except where such failure to have Permits,
to comply therewith or to be in effect, in the aggregate, would not
reasonably be expected to have a material adverse effect on the
Purchased Assets or the Business. Vendor has not received notice of
any event, inquiry, investigation or proceeding threatening the
validity of such Permits. All such Permits are set forth in Section
1.1xx) of the Disclosure Schedule, which section of the Disclosure
Schedule, without limiting the generality of the foregoing, sets
forth all of the permits, licenses, certificates of compliance,
consents, approvals and authorisations of, and registrations with,
any Governmental Authority necessary for the continued operation of
the Business.
No fact, condition or circumstance has occurred to create, and the
execution of this Agreement and its performance shall not create,
any right to terminate, cancel, modify, amend, revoke or expire any
Permit, except that Vendor will seek from the appropriate
Governmental Authorities Consents to transfer or re-issue the
Permits (other than the Non-Transferable Permits) to Intel UK in
accordance with Section 2.4.
p) Employee Matters.
i) TUPE
A) Vendor has performed and observed all Vendor obligations
and those of any of its predecessors (whether arising
under common law, statute, equity or otherwise) under or
in connection with the contracts of employment of the
Employees (or any of the said obligations Vendor would
have had under or in connection with such contracts but
for TUPE);
B) Vendor has not made any deduction from the salary or
wages due to any of the Employees (otherwise than in
respect of PAYE and national insurance contributions)
unless such deduction shall previously have been
approved in writing by such Employees;
C) Vendor has not altered (whether to take effect prior to,
on or after the Closing Date) any of the terms of
employment or engagement of any of the Employees
(without the prior written consent of Purchasers);
D) Vendor has not terminated the contract of employment of,
nor dismissed (constructively or otherwise), any of the
Employees (without the prior written consent of
Purchasers);
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E) Vendor has not transferred, moved or redeployed any of
the Employees from working within the Business, induce
any such employee to resign his or her employment with
the Business, nor has it agreed, to transfer or move or
be redeployed any Employee from the Business, without
the prior written consent of Purchasers;
F) Vendor has at all times complied with all the provisions
and obligations imposed upon it by the DPA in respect of
Vendor's Employees;
G) Other than as set forth in the TUPE Information, Vendor
has not employed, engaged or used any temporary workers
or subcontractors in the Business during the past 12
months.
H) No Person is employed in (or, except as set forth on
Section 4.1p)i)H) of the Disclosure Schedule engaged in)
the Business (whether under a contract of service or
contract for services) other than the Employees, and
except as set forth in Section 4.1p)i)H) of the
Disclosure Schedule the Employees are all employed
directly by Vendor and each of the Employees is assigned
to the Business.
I) All the Employees are entitled under relevant
immigration laws to perform the jobs they are employed
to do for Vendor, and (except as disclosed in Section
4.1p)i)I) of the Disclosure Schedule) and employment of
the Employees (or any of them) will not result in a
breach or violation of any relevant immigration laws or
rules.
ii) Remuneration and Benefits
The TUPE Information shows all remuneration and other
benefits:
A) actually provided; and
B) which Vendor is bound to provide (whether now or in the
future) to each Employee and is true and complete and
include particulars of and details of participation in
all profit sharing, incentive, bonus, commission, share
option, medical, permanent health insurance, travel,
car, redundancy, pension contributions and arrangements
and other benefit plans, arrangements and understandings
(the "Benefit Plans") operated for all or any Employees
or their dependants whether legally binding on Vendor or
not.
iii) Terms and Conditions
A) The TUPE Information contains copies of all pension
contributions and arrangements, the standard terms and
conditions and a
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summary of any Employee's terms that vary from such
standard terms and conditions, and identifies which
terms and conditions apply to each Employee. The staff
handbooks and policies (whether contractual or not),
including disciplinary, dismissal and grievance
procedures, which apply to the Employees have been
delivered by Vendor to Intel UK.
B) There are no terms and conditions in any contract with
any Employee pursuant to which such Employee will be
entitled to receive any payment or benefit (other than
the Vendor Sale Incentives) or such Employee's rights
will change as a direct consequence of the transactions
contemplated by this Agreement.
C) All employees of Vendor have received a written
statement of particulars of their employment as required
by Section 1 of the Employment Rights Xxx 0000.
D) Vendor has in relation to the Business a Disciplinary
Policy, Dismissal Policy & Grievance Policy all of which
comply with the statutory minimum procedures as required
by the Employment Xxx 0000 (Dispute Resolution)
Regulations 2004 & the Employment Xxx 0000.
E) There are no negotiations for any increase in the
emoluments or benefits of any Employee which are current
or expected to take place within the next six months.
iv) Operation of Benefit Plans
A) Except as disclosed in Section 4.1p)iv)A) of the
Disclosure Schedule, Vendor does not operate any
occupational pension plans in relation to the Employees
or any other Persons, and Vendor is only paying pension
contributions to Group Personal Pension Plans held by
some of the Employees as detailed in the TUPE
Information and save for such payments is not a party to
any arrangements or promise to make or in the habit of
making ex gratia or voluntary payments by way of bonus,
pension, gratuity, superannuation, allowance, disability
or death benefit or the like to or for the benefit of
any Persons.
B) No Employee or any dependant thereof or any other
participant in any pension plan operated in respect of
the Business has made any claim against Vendor in
respect of any such plan.
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v) Notice of Termination, Leave of Absence and Outstanding Offers
A) No Employee has given or received notice to terminate
his employment or engagement and no Employee is entitled
(other than under Regulation 5(4A) or 5(4B) of TUPE) or,
to Vendor's knowledge, intends or is likely to terminate
such employment as a result of the parties entering into
this Agreement or Closing.
B) Except as disclosed in Section 4.1p)v)B) of the
Disclosure Schedule, there are no Employees who are on
secondment, maternity leave or absent on grounds of
disability or other leave of absence (other than normal
holidays or absence of no more than one week due to
illness).
C) There are no outstanding offers of employment or
engagement by Vendor in relation to the Business and no
Person has accepted such an offer but not yet taken up
the position accepted.
vi) Payment up to Closing
All Employee Payables have, to the extent due, been paid or
discharged in full together with all related payments to third
party benefit providers or relevant authorities.
vii) Industrial Relations
Except as disclosed in Section 4.1p)vii) of the Disclosure
Schedule:
A) no Employees are members of a trade union, staff
association or any other body representing workers and
no such union, association or body is recognized by
Vendor for the purposes of collective bargaining for the
Employees or any other employees;
B) there is no industrial action or dispute existing or, to
the Vendor's knowledge, threatened or anticipated in
respect of or concerning any of the Employees; and
C) no trade union has made a request for recognition in
respect of any bargaining unit of which any of the
Employees form part nor made any application to the
Central Arbitration Committee to decide the question of
whether the union has the support of a majority of the
workers constituting such bargaining unit and no request
has been made pursuant to the Information and
Consultation of Employees Regulations 2004.
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viii) Claims by Employees
No Employee or past or present employee has any claim or right
of action against Vendor or its Affiliates including any
claim:
A) in respect of any accident or injury whether or not
fully covered by insurance; or
B) for breach of any contract of services or for services;
or
C) for loss of office or arising out of or connected with
the termination of his office or employment
and no event or inaction has occurred which could or might
give rise to any such claim.
ix) Enquiries and Discrimination
A) Vendor is not engaged or involved in any dispute, claim
or legal proceedings (whether arising under contract,
common law, statute or in equity) with any of the
Employees and there are no enquiries or investigations
existing, pending or threatened affecting Vendor or the
Business in relation to any Employee by the Equal
Opportunities Commission, the Commission for Racial
Equality, the Disability Rights Commission or the Health
and Safety Executive or any other bodies with similar
functions or powers in relation to workers.
B) There are no terms or conditions under which any
Employee is employed nor has any act or omission
occurred that may give rise to any Employment Claim.
x) Redundancy
A) Full and accurate details are disclosed in Section
4.1p)x)A) of the Disclosure Schedule of any redundancy
payment (whether pursuant to a redundancy plan or
formula or policy or otherwise whether contractual or
discretionary) Vendor have made in excess of the
statutory redundancy entitlement to any employee of the
Business or former employee in the last year.
xi) Health and Safety
A) Full details of all health and safety policies and
procedures, health and safety committees, health and
safety representatives, and any complaints,
recommendations, investigations or claims relating to
health and safety issues made or carried out in the last
three (3)
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years and affecting the Business and its Employees and
former employees are disclosed in Section 4.1p)xi)A) of
the Disclosure Schedule.
B) The Business has complied with, and is in compliance
with, all conditions, limitations, obligations,
prohibitions and requirements contained in any Health
and Safety Laws and there are no facts or circumstances
which may lead to any breach of any Health and Safety
Laws.
C) Vendor has carried out all necessary risk assessments in
respect of the Business as specified under the Health
and Safety Laws and the current results of any such
assessments and any review of such assessments have been
considered by Vendor in giving these warranties. Vendor
has disclosed all the facts and circumstances which
might have been taken into account in preparing any such
assessment.
D) Vendor has not received any prohibition or improvement
notices from any enforcement body, including the Health
and Safety Executive and the relevant local authority,
with regard to breaches of Health and Safety Laws or
otherwise in respect of the Business.
E) For the purpose of this Section 4.1p)xi), "Health and
Safety Laws" means all applicable statutes, statutory
legislation, common law, treaties, regulations,
directives, codes of practice, guidance notes including
the Xxxxxxxxx Xxx 0000, the Offices, Shops and Railway
Premises Xxx 0000, the Fire Precautions Xxx 0000, the
Health and Safety at Work etc. Xxx 0000 and the
Construction (Design and Management) Regulations 1994
concerning the health and safety of those who work for
the Business whether as employees or otherwise, visit
the Premises or are in any way affected by the
activities of the Business or by Persons working for the
Business.
F) Vendor has adequate employers liability and public
liability insurance cover having regard to the
activities carried out by the Business. No claims in
respect of health and safety have been made or are
contemplated under such insurance policies.
q) Compliance with Laws. Vendor in connection with the Business has
complied and is in compliance with all Laws.
r) No Unusual Transactions. Xxxxx Xxxxx 00, 0000, Xxxxxx in connection
with the Business has conducted its business in the ordinary course
and, without limiting the generality of the foregoing, has not,
other than in the ordinary course of business consistent with past
practice:
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i) ceased to operate its properties and to carry on its business
as heretofore carried on nor has Vendor in connection with the
Business failed to maintain all of its properties, rights and
assets consistently with past practices;
ii) made any change in the rate or form of compensation or
remuneration payable or to become payable to any of its
Employees nor made any amendments or discontinued the terms of
employment or engagement of any Employee or any Benefit Plan;
iii) granted to any customer any special allowance or discount, or
changed its pricing, credit or payment policies;
iv) suffered any extraordinary losses whether or not covered by
insurance;
v) suffered any material cessation or interruption of services;
vi) modified or changed its business organization or its
relationship with its suppliers, customers and others having
business relations with it;
vii) incurred, assumed or guaranteed any indebtedness for borrowed
money in connection with any of the Purchased Assets or the
Business;
viii) made any (a) capital expenditure commitment relating to the
Purchased Assets or the Business by Vendor in excess of Ten
Thousand U.S. Dollars (U.S.$10,000) individually or
Twenty-Five Thousand U.S. Dollars (U.S.$25,000) in the
aggregate for additions to property, plant, equipment or
intangible capital assets comprising Purchased Assets or
related to the Business likely to occur, in whole or in part,
after the Closing Date, or (b) sale, assignment, transfer,
lease or other disposition of or agreement to sell, assign,
transfer, lease or otherwise dispose of, any Purchased Asset,
other than sales of Inventory in the ordinary course
consistent with past practice; or
ix) authorized, agreed or otherwise committed to any of the
foregoing.
s) No Broker. Other than CIBC World Markets Inc., none of Vendor or any
of its directors, officers, employees or agents has employed or
incurred any liability to any broker, finder or agent for any
brokerage fees, finder's fees, commissions or other amounts with
respect to this Agreement or any of the transactions contemplated
hereby.
t) Product Warranties. Except as set forth in Section 4.1t) of the
Disclosure Schedule, Vendor has not made any oral or written product
warranties and guarantees to third parties with respect to the
Purchased Assets. No tort claims, or claims with respect to product
warranties or guarantees exist relating to any of the Purchased
Assets or the Business, and none to Vendor's knowledge will arise
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after the Closing with respect to the foregoing in connection with
the Purchased Assets or the Business, including the sale of any
products by Vendor prior to the Closing or by Intel UK after the
Closing included in the Purchased Assets.
u) Supplier and Foundry Relationships. Section 4.1u) of the Disclosure
Schedule sets forth a complete and correct description of each (i)
foundry relationship, wafer and circuit board manufacturing and
fabricating agreement, understanding or commitment in connection
with the Purchased Assets or the Business, (ii) integrated circuit
die, circuit board, RF component, RF module or device purchase,
supply or service agreement, understanding or commitment, used by or
in connection with the Purchased Assets or the Business, in whole or
in part, whether written or oral, and (iii) any other agreements or
contracts, whether written or oral, under which Vendor has obtained
services or products for the Business and use in producing the
products ("Supply Contracts"). There are no fees, penalties, price
uplifts, shortfall payments, xxxx backs or other amounts outstanding
under such Supply Contracts. No condition exists that permits a
termination or a material change of such Supply Contracts by the
other party under such Supply Contract.
4.2 Warranties of Zarlink Canada
Zarlink Canada warrants to Purchasers as follows and acknowledges that
Purchasers are relying upon such warranties in connection with the purchase by
Purchasers of the Purchased Assets and that Purchasers would not have entered
into this Agreement without such warranties:
a) Due Incorporation. Zarlink Canada is duly incorporated and existing
under the laws of Canada.
b) Due Authorization. Zarlink Canada has the necessary corporate power
and authority to execute this Agreement and the Ancillary Agreements
and to perform its obligations hereunder and thereunder. The
execution of this Agreement and each of the Ancillary Agreements by
Zarlink Canada, and the performance by Zarlink Canada, of its
obligations under such agreements have been duly authorized by all
necessary action on its part. Except for the completion of notices
or filings pursuant to anti-trust or competition Laws, and
disclosing and filing this Agreement pursuant to applicable
securities Laws, such execution and performance by Zarlink Canada,
do not require any action or Consent of, any registration with, or
filing, notification to, any Governmental Authority under any Laws
to which Zarlink Canada, is subject.
c) Enforceability. This Agreement and each of the Ancillary Agreements
constitute a legal, valid and binding obligation of Zarlink Canada,
enforceable against it in accordance with their terms subject to
applicable bankruptcy, insolvency, reorganization and similar Laws
affecting the enforcement of creditors rights generally and to the
fact that specific performance is an equitable remedy available only
at the discretion of the Court.
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d) No Conflict. The execution of this Agreement and each of the
Ancillary Agreements, the consummation of the transaction
contemplated herein and therein and the performance by Zarlink
Canada, of its obligations hereunder and thereunder do not;
i) violate, contravene or breach, or constitute a default under,
the constating documents or by-laws of Zarlink Canada;
ii) subject to obtaining the Consents disclosed in Section
4.1d)ii) of the Disclosure Schedule, result in the breach or
violation of any contract, agreement or other instrument to
which Zarlink Canada is a party; or
iii) except for any filing or notification pursuant to anti-trust
or competition and securities Laws, violate, contravene or
breach any Laws.
4.3 Warranties of Purchasers
Each of Purchasers, jointly and severally, warrants to Vendor and Zarlink Canada
as follows and acknowledge that Vendor and Zarlink Canada are relying upon such
warranties in connection with the sale by Vendor of the Purchased Assets and
that Vendor and Zarlink Canada would not have entered into this Agreement
without such warranties:
a) Due Incorporation. Each Purchaser is duly incorporated and validly
existing under the Laws of its respective jurisdiction of
incorporation and has all necessary corporate power and authority to
own, lease and operate its respective properties and to carry on its
respective business as such businesses are presently conducted.
b) Due Authorization. Each Purchaser has the necessary corporate power
and authority to execute this Agreement and each of the Ancillary
Agreements, as applicable, and to perform its respective obligations
hereunder and thereunder. The execution of this Agreement and each
of the Ancillary Agreements and the performance by each Purchaser of
its respective obligations under such agreements to which it is a
party have been duly authorized by all necessary corporate action on
its part. Except for the completion of notices or filings pursuant
to applicable anti-trust or competition Laws, such execution and
performance by each Purchaser does not require any action or Consent
of, any registration with, or notification to, any Governmental
Authority, or any action or Consent under any Laws to which such
Purchaser is subject.
c) Enforceability. This Agreement and each of the Ancillary Agreements
to which each Purchaser is a party constitute a legal, valid and
binding obligation of such Purchaser, enforceable against it in
accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization and similar Laws affecting the
enforcement of creditors' rights generally and to the fact that
specific performance is an equitable remedy available only at the
discretion of the court.
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d) No Conflict. The execution of this Agreement and each of the
Ancillary Agreements to which such Purchaser is a party, the
consummation of the transactions contemplated herein and therein,
the performance by such Purchaser of its obligations hereunder and
thereunder and the compliance by such Purchaser with this Agreement
do not:
i) violate, contravene or breach, or constitute a default under,
the constating instruments or by-laws of such Purchaser;
ii) result in the breach or violation of or conflict with, or
allow any other Person to exercise any rights under, any
contract or instrument to which such Purchaser is a party; or
iii) except for any filing or notification pursuant to applicable
anti-trust or competition Laws, violate, contravene or breach
any Laws.
e) No Broker. Neither of the Purchasers nor any of their respective
shareholders, directors, officers, employees or agents have employed
or incurred any liability to any broker, finder or agent for any
brokerage fees, finder's fees, commissions or other amounts with
respect to this Agreement or any of the transactions contemplated
hereby.
ARTICLE 5
COVENANTS OF VENDOR
5.1 Conduct of Business
From the date hereof up to the Closing Date, Vendor shall conduct its Business
in the ordinary course and in a manner consistent with past practices and,
without limiting the generality of the foregoing, Vendor shall not, in
connection with the Business, without the prior written consent of Purchasers:
a) cease to operate its properties and to carry on the Business as
heretofore carried on or fail to maintain all of its properties,
rights and assets consistently with past practices, or fail to do
any and all things reasonably necessary and within its power to
retain and preserve the goodwill of the Business;
b) sell or otherwise in any way alienate or dispose of any of its
assets, including its Intellectual Property or Inventory, in
connection with the Business, except in the ordinary course of
business consistent with past practices, or terminate any of the
contracts set forth in Section 1.1o) of the Disclosure Schedule;
c) grant to any customer, or offer to any prospective customer, any
special allowance or discount, or change its pricing, credit or
payment policies, other than in the ordinary course of business;
-33-
d) modify or change its business organization, except in the ordinary
course of business, modify or change its relationship with its
suppliers, customers and others having business relations with it;
and
e) authorize, agree or otherwise commit to any of the foregoing.
In addition, and without limiting the generality of the foregoing, from the date
hereof up to the Closing Date, Vendor shall in connection with the Business:
f) comply in all material respects with all Laws and duly and
punctually file all reports and returns required to be filed by it
pursuant to any Laws or Benefit Plans;
g) maintain in full force and effect insurance policies on all of its
properties providing coverage and amounts of coverage comparable to
the coverage and amounts of coverage provided under its insurance
policies in effect on the date hereof;
h) maintain and keep its properties in accordance with existing
maintenance programs; and
i) maintain all Inventory located outside of the United Kingdom, other
than in Korea and Singapore, in "bonded warehouses" located in
Indonesia or the Philippines.
5.2 Examination
From the date hereof up to the Closing Date, Vendor shall continue to afford to
Purchasers and their legal, accounting and other representatives reasonable
access during normal business hours (without undue interference to the ordinary
conduct of the business of Vendor) to (a) the Business and Purchased Assets, and
(b) appropriate executive and other key personnel and auditors of Vendor to
consult with them in respect of (i) the Business and the Purchased Assets and
the manner in which the Business is conducted, held or used, and (ii) any
questions raised by the examination made by Purchasers and their representatives
pursuant to this Section 5.2.
In addition, Intel UK and its representatives shall be given reasonable access
to Vendor's Employee representatives (or the Employees themselves if no such
representatives are elected) for the purposes of assisting Vendor in complying
with their respective obligations under TUPE and TULCRA.
5.3 Exclusivity
Following the execution of this Agreement, neither Zarlink Canada nor Vendor
will and will cause its respective subsidiaries and Affiliates not to, nor
permit any of its or its Affiliates' respective directors, officers, employees
or representatives to, directly or indirectly, take any of the following actions
with any party other than Purchasers and Purchasers' directors, officers,
employees and representatives: (i) solicit or encourage inquiries or proposals
with respect to, furnish any information relating to (except as required by Law
or to fulfill the fiduciary duty of
-34-
directors of Zarlink Canada in connection with a potential sale of Zarlink
Canada), participate in any negotiations or discussions concerning, or cooperate
in any manner relating to any possible acquisition of the Business (whether by
way of merger, purchase of capital stock, purchase of assets or otherwise), any
material portion of the Business or any equity interest in it or its Affiliates
which could affect Purchasers' ability to acquire the assets of the Business (an
"Acquisition"); (ii) provide information with respect to the Business to any
Person relating to (except as required by Law or to fulfill the fiduciary duty
of directors of Zarlink Canada in connection with a potential sale of Zarlink
Canada), or otherwise cooperate with, facilitate or encourage any effort or
attempt by any Person with regard to, any possible Acquisition; or (iii) enter
into any agreement with any Person providing for a possible Acquisition. Vendor
and Zarlink Canada acknowledge and agree that the foregoing provision
constitutes an essential and necessary inducement to Purchasers' willingness to
enter into this Agreement. Vendor and Zarlink Canada warrant that neither
Vendor, Zarlink Canada or other Affiliate is currently involved in discussions
or negotiations with any third party with respect to an Acquisition. Vendor and
Zarlink Canada will promptly communicate to Purchasers the identity of any
potential third party purchaser making any such Acquisition proposal or contact
to Vendor, Zarlink Canada or any Affiliate (or any of their directors, officers,
employees or representatives) and the proposed terms and conditions thereof and
shall provide to Purchasers copies of any written (including electronic) offers
or other correspondence relating thereto from any such Person.
5.4 Closing
If each condition set forth at Section 10.2 is (i) performed or complied with,
or (ii) waived by Vendor and if the Agreement is not terminated in accordance
with Section 10.1, Vendor and Zarlink Canada, as applicable, shall on the
Closing Date at the place of Closing:
a) take all actions required to permit the Purchased Assets to be duly
and validly transferred to, and registered in the name of,
Purchasers free and clear of all Liens (except Permitted
Encumbrances);
b) execute and deliver to Purchasers all deeds of conveyance, bills of
sale, assurances, transfers, assignments and documents required
hereunder and any other documents necessary to sell, assign and
transfer all of the Purchased Assets to Purchasers including the
generality of the foregoing, assignments (to the extent permissible
by Law) of the Permits (other than the Non-Transferable Permits),
Owned Intellectual Property and the Contracts, and third party
Consents that have been obtained;
c) execute and deliver to Purchasers a certificate to the effect that
each of Vendor's and Zarlink Canada's warranties in this Agreement
are true and correct in all material respects as of the Closing Date
as if made on the Closing Date; except as to breaches of the
warranties contained in Sections 4.1l), 4.1p)i)C), 4.1p)i)D),
4.1p)v)A), 4.1p)vii), 4.1p)viii) or 4.1p)ix)B) arising as a result
of the Consultation Process (as defined in the Employee Consultation
and Indemnity Agreement) provided that Vendor and Zarlink have each
complied with such agreement; that
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Vendor and Zarlink have complied in all material respects with each
of its covenants in this Agreement; and that there has been no
Material Adverse Change. The warranties of Vendor and Zarlink Canada
made as of the Closing Date in such certificate shall be deemed made
as of the Closing Date with the same effect as the warranties made
by Vendor and Zarlink Canada, as applicable, herein.
d) deliver to Purchasers certified copies of resolutions of the board
of directors of Vendor and Zarlink Canada (in form and substance
satisfactory to Purchasers' legal counsel, acting reasonably)
authorizing and approving the sale, assignment and transfer of the
Purchased Assets from Vendor to Purchasers;
e) deliver to Purchasers a favourable opinion of Vendor and Zarlink
Canada Counsel substantially in the form agreed by the Parties;
f) execute and deliver to Intel UK a Transition Services Agreement
substantially in the form agreed by the Parties;
g) execute and deliver to Intel UK a Supply Agreement substantially in
the form agreed by the Parties;
h) execute (and, as necessary, cause any Affiliate to execute) and
deliver to Intel US a Patent License Agreement substantially in the
form agreed by the Parties;
i) execute and deliver to Purchasers a Non-Competition and
Non-Solicitation Deed substantially in the form agreed by the
Parties;
j) execute and deliver to Intel UK the Agreement Regarding Premises
substantially in the form agreed by the Parties;
k) if requested by Intel UK, deliver to Intel UK a copy of VAT records
relating to the Business in accordance with Section 49 VATA 1994;
l) deliver to Purchasers the supplement to the identification of the
Purchased Assets set forth in the appropriate sub-sections of
Section 1.1 of the Disclosure Schedule in a form reasonably
satisfactory to Purchasers; and
m) deliver or make available to Intel UK (or its Affiliates pursuant to
Section 2.6) all of the tangible Purchased Assets.
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ARTICLE 6
COVENANTS OF PURCHASERS
6.1 Closing
If each condition set forth at Section 10.1 is (i) performed or complied with,
or (ii) waived by Purchasers, and if this Agreement is not terminated in
accordance with Section 10.1 or 10.2, then Purchasers shall on the Closing Date:
a) execute and deliver to Vendor one or more officer's certificates to
the effect that Purchasers' warranties in this Agreement are true
and correct in all material respects as of the Closing Date as if
made on the Closing Date and that each Purchaser has complied in all
material respects with each of its covenants in this Agreement. The
warranties of Purchasers made as of the Closing Date in Purchasers'
certificate shall be deemed made as of the Closing Date with the
same effect as the warranties made by Purchasers, as applicable,
herein;
b) execute and deliver to Vendor assumption agreements in form
reasonably satisfactory to the Parties evidencing the assumption by
Purchasers, as applicable, of the Assumed Liabilities;
c) deliver to Vendor a favourable opinion of Purchasers' Counsel
substantially in the form agreed by the Parties;
d) execute and deliver to Vendor a Supply Agreement substantially in
the form agreed by the Parties;
e) execute and deliver to Vendor a Patent License Agreement
substantially in the form agreed by the Parties;
f) execute and deliver to Vendor a Non-Competition and Non-Solicitation
Deed substantially in the form agreed by the Parties;
g) execute and deliver to Intel UK a Transition Services Agreement
substantially in the form agreed by the Parties; and
h) execute and deliver to Intel UK the Agreement Regarding Premises
substantially in the form agreed by the Parties;
ARTICLE 7
EMPLOYEES
7.1 Employees
a) The Parties acknowledge and agree that pursuant to TUPE, the
contracts of employment between Vendor and the Employees will be
transferred to Intel UK in accordance with TUPE on the Closing Date.
-37-
b) Vendor will continue to be responsible for and will discharge all
Employee Payables in respect of all Employees and, to the extent not
paid directly to Employees by Vendor, Vendor shall promptly
reimburse Intel UK for any Employee Payables paid by Intel UK or
advance to Intel UK amounts to satisfy the payment of such Employee
Payables on or after Closing, and except as provided in Section 7.3,
including with respect to any payroll period commencing before, but
ending after, the Closing Date.
c) Vendor shall, or shall cause others to, take such actions as to
ensure that none of the Employees to be employed by Intel UK after
Closing shall have acquired any securities, interests in securities
or securities options as those terms are defined for purposes of
Part 7, Income Tax (Earnings and Pension Act) 2003 on or prior to
Closing, in circumstances where any liability to pay or account for
Tax could become a liability or obligation of Intel UK or any of its
Affiliates on or after Closing.
d) Vendor shall indemnify and hold harmless Intel UK and its Affiliates
in respect of any liability for Tax (together with any associated
costs, penalties and interest) as may arise on or after Closing in
respect of any securities, interests in securities or securities
options (as those terms are defined for purposes of Part 7, Income
Tax (Earnings and Pension Act) 2003) where the right or opportunity
to acquire such securities, interests in securities or securities
options were made available to any Person by reason of the
employment of the Employee by Vendor or any of its Affiliates.
7.2 Contact with Employees
Notwithstanding Section 5.2, from the date hereof until the Closing Date,
neither Purchaser, nor their respective employees, agents or other
representatives shall initiate or cause to be initiated any contact with any
Employee unless such contact is initiated with the permission of Vendor (which
permission shall not be unreasonably withheld) or otherwise as permitted by the
Employee Consultation and Indemnity Agreement and for the purpose of complying
with its TUPE obligations.
7.3 Retention Bonus Payments
Intel UK will pay an amount in the aggregate of up to Two million (US) dollars
(US$2,000,000) in Vendor Sale Incentives and Retention Bonus Payments as
follows:
a) Intel UK will pay an amount in the aggregate of up to Nine hundred
sixty thousand (US) dollars (US $960,000) (the "Vendor Sale
Incentives") to Vendor's employees pursuant to and in accordance
with the terms of the Vendor Sale Incentive letters relating to the
sale of the Business delivered by Vendor to Intel UK, on behalf of
Vendor, such payments to be made within 30 days after the Closing
Date in satisfaction of (and solely to the extent of) Vendor's
payment obligations thereunder.
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b) Intel UK will offer to Employees designated by Intel UK employee
incentive arrangements (the "Retention Bonus Payments") providing
for an aggregate of Two million (US) dollars (US $2,000,000) (less
the amount of the Vendor Sale Incentives) in incentive payments
payable in periodic instalments as set forth in the respective
incentive arrangement agreements accepted by the applicable
Employees. Intel UK shall promptly after execution thereof provide
to Vendor copies of the agreements setting forth the Retention Bonus
Payments and the terms thereof. If and to the extent Intel UK does
not pay any such Retention Bonus Payments in respect of Employees,
such unpaid amounts (other than such unpaid amounts subject to
dispute between Intel UK and an Employee) shall be paid to Vendor no
later than the second anniversary of the Closing Date.
ARTICLE 8
DATA PROTECTION
8.1 Compliance
Notwithstanding any other provision of this agreement, each of Purchasers, as
applicable, undertakes that, on receipt of the Customer and Supplier List, TUPE
Information and Books and Records:
a) it shall duly observe all its obligations as a data processor under
the DPA which arise in connection with processing of Customer Data
and Employee Data;
b) it shall comply with the eight Data Protection Principles set forth
in the DPA and, in particular, it shall process Customer Data and
Employee Data fairly and lawfully in accordance with the first data
protection principle for the purpose of the continued provision of
products and services to the Customers and in connection with the
employment of the Employees and in accordance with the terms and
conditions set forth in this Agreement;
c) it shall send a fair processing notice to each Customer and Employee
substantially in the form agreed by the Parties within seven (7)
business days of the Closing;
d) it shall respond to any request made by an Employee or Customer in
relation to the provision of details of the product(s) and services
in accordance with the "rights of data subjects" (as defined in the
DPA); and
e) it shall obtain, and at all times maintain, a notification under the
DPA appropriate to the performance of its obligations under this
Agreement.
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ARTICLE 9
SURVIVAL OF WARRANTIES
9.1 Survival of Warranties of Vendor and Zarlink Canada
Subject to Article 11, which shall exclusively govern the liability of the
Parties with respect to the warranties of Vendor and Zarlink Canada set forth in
Sections 2.1 final paragraph, 4.1 and 4.2, such warranties will survive the
completion of the sale and purchase of the Purchased Assets hereunder.
9.2 Survival of Warranties of Purchasers
Subject to Article 11, which shall exclusively govern the liability of the
Parties with respect to the warranties of Purchasers set forth in Section 4.3,
such warranties will survive the completion of the sale and purchase of the
Purchased Assets hereunder.
ARTICLE 10
CONDITIONS OF CLOSING
10.1 Conditions for the Benefit of Purchasers
The purchase of the Purchased Assets in accordance with the terms of this
Agreement is subject to the following conditions, each of which is hereby
declared to be for the exclusive benefit of Purchasers. Each condition is to be
performed or complied with in all respects at or prior to the Closing Date,
unless expressly waived by Purchasers in writing on or prior to the Closing:
a) Truth of Warranties of Vendor and Zarlink Canada. The warranties of
Vendor and Zarlink Canada contained in this Agreement or in any
certificate or other document delivered or given pursuant to this
Agreement (considered individually and collectively), shall have
been accurate in all material respects as of the date of this
Agreement; and except as to breaches of the warranties contained in
Sections 4.1l), 4.1p)i)C), 4.1p)i)D), 4.1p)v)A), 4.1p)vii),
4.1p)viii), 4.1p)ix)B) arising as a result of the Consultation
Process (as defined in the Employee Consultation and Indemnity
Agreement) provided that Vendor and Zarlink Canada have each
complied with such agreement, shall be true and accurate in all
material respects as of the Closing Date as though made on such
date. b) Performance of Covenants by Vendor. All of the covenants,
obligations and agreements that Vendor is required to perform or to
comply with pursuant to this Agreement at or prior to the Closing
Date (considered individually and collectively) shall have been
performed or complied with in all material respects at or prior to
the Closing Date.
c) Third Party Approvals. There shall have been obtained from all
appropriate parties the Consents identified in Section 10.1c) of the
Disclosure Schedule.
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d) Governmental Approvals. There shall have been obtained from all
appropriate Governmental Authorities all Consents and assurances, in
form and substance reasonably satisfactory to Purchasers' legal
counsel, necessary in order to permit the transactions contemplated
herein to be completed on the Closing Date without affecting or
resulting in the termination, cancellation or modification of this
Agreement or in the termination, cancellation, material modification
non-re-issuance or non-transfer of any Permit (including the
Non-Transferable Permits) identified in Section 10.1d) of the
Disclosure Schedule.
e) Litigation. There shall be no actions, claims, investigations,
arbitrations or other proceedings (whether or not on behalf of
Vendor or Zarlink Canada) pending or threatened to restrain, enjoin
or invalidate any transaction contemplated by this Agreement.
f) Employees. Purchasers shall have received, to its reasonable
satisfaction, evidence that all of the Key Employees, 85% of the
Specified Employees and 85% of all other Employees have indicated
"in principle" agreement to accepting employment with Intel UK on a
new contract of employment as contemplated in the Consultation
Process (as defined in the Employee Consultation and Indemnity
Agreement) whether by signing and returning the "in principle"
agreement letter referred to in the Employee Consultation and
Indemnity Agreement or by communicating "in principle" agreement in
some other manner.
g) No Material Adverse Change. Since the date of the Agreement, there
shall not have occurred a Material Adverse Change.
If any of the conditions of this Section 10.1 has not been satisfied on or prior
to the Closing Date, or if satisfaction of any of the conditions of this Section
10.1 becomes impossible, at any time before the Closing Date for reasons other
than Purchasers' failure to comply with their obligations under this Agreement,
then Purchasers may terminate this Agreement by notice to Vendor and Zarlink
Canada at any time prior to the Closing without further formality.
10.2 Conditions for the Benefit of Vendor and Zarlink Canada
The sale of the Purchased Assets in accordance with the terms of this Agreement
is subject to the following conditions, each of which is hereby declared to be
for the exclusive benefit of Vendor and Zarlink Canada. Each condition is to be
performed or complied with in all respects at or prior to the Closing Date,
unless expressly waived by Vendor and Zarlink Canada in writing on or prior to
the Closing:
a) Truth of Warranties of Purchasers. The warranties of Purchasers
contained in this Agreement or in any certificate or other document
delivered or given pursuant to this Agreement (considered
individually and collectively), shall have been accurate in all
material respects as of the date of this Agreement, and shall be
true and accurate in all material respects as of the Closing Date as
though made on such date.
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b) Performance of Covenants by Purchasers. All of the covenants,
obligations and agreements that Purchasers are required to perform
or to comply with pursuant to this Agreement at or prior to the
Closing Date (considered individually and collectively) shall have
been performed or complied with in all material respects at or prior
to the Closing Date.
c) Litigation. There shall be no actions, claims, investigations,
arbitrations or other proceedings (whether or not on behalf of
Purchasers) pending or threatened to restrain, enjoin or invalidate
any transaction contemplated by this Agreement.
d) Consents. Co-contractors and appropriate Governmental Authorities
shall not have imposed upon Vendor materially onerous terms in order
to give their consents to the transfers of Contracts identified in
Section 10.1c) of the Disclosure Schedule.
If any of the conditions of this Section 10.2 has not been satisfied, or if
satisfaction of any of the conditions of this Section 10.2 becomes impossible,
at any time before the Closing Date, for reasons other than failure by Vendor or
Zarlink Canada to comply with its obligations under this Agreement, then Vendor
and Zarlink Canada may terminate this Agreement by notice to Purchasers at any
time prior to Closing without further formality.
10.3 Effects of Termination
If this Agreement is terminated pursuant to Section 10.1 or 10.2, then all
further obligations of the Parties under this Agreement will terminate, except
that the obligations in Sections 15.2 (Confidentiality), 15.6 (Notices), 15.7
(Expenses) and 15.18 (Governing Law) will survive. Notwithstanding the
foregoing, if this Agreement is terminated by a Party because of the other
Party's failure to comply with its obligations under this Agreement, then the
terminating Party's right to pursue all legal remedies will survive such
termination unimpaired.
ARTICLE 11
INDEMNIFICATION
11.1 Indemnification by Vendor
Vendor shall indemnify and hold Purchasers and their respective Affiliates, and
each officer, director, shareholder, employee, representative and agent of the
foregoing (collectively, the "Purchaser Indemnitees"), harmless from and against
any claims for Losses which may be made against any Purchaser Indemnitee or
which any Purchaser Indemnitee may suffer or incur as a result of, arising out
of or relating to:
a) any incorrectness in, or breach of, any warranty made by Vendor or
Zarlink Canada in Section 2.1 final paragraph, Section 4.1 or in
Section 4.2 or in any certificate delivered or given pursuant to
this Agreement;
b) any violation, contravention or breach of any covenant, agreement or
obligation of Vendor under or pursuant to this Agreement, and
including the obligation of
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Vendor to be responsible for and discharge on a timely basis any
liability relating to the Purchased Assets or the Business that is
not an Assumed Liability;
c) any violation, contravention or breach of any covenant, agreement or
obligation of Vendor under or pursuant to the Patent License
Agreement; or
d) any violation, contravention or breach of any covenant, agreement or
obligation of Vendor or Zarlink Canada under or pursuant to the
Employee Consultation and Indemnity Agreement.
11.2 Indemnification by Purchasers
Purchasers shall indemnify and hold Vendor and its Affiliates, and each officer,
director, shareholder, employee, representative and agent of the foregoing
(collectively, the "Vendor Indemnitees"), harmless from and against any claims
for Losses which may be made against any Vendor Indemnitee or which any Vendor
Indemnitee may suffer or incur as a result of, arising out of or relating to:
a) any incorrectness in, or breach of, any warranty made by Purchasers
in Section 4.3 or in any certificate delivered or given pursuant to
this Agreement;
b) any violation, contravention or breach of any covenant, agreement or
obligation of Purchasers under or pursuant to this Agreement,
including the obligation of Purchasers to assume and discharge on a
timely basis the Assumed Liabilities; or
c) any violation, contravention or breach of any covenant, agreement or
obligation of Purchasers under or pursuant to the Employee
Consultation and Indemnity Agreement.
11.3 Obligation to Reimburse
The Party providing indemnification hereunder (the "Indemnifying Party") shall
reimburse, on demand, to the Party being indemnified hereunder (the "Indemnified
Party") the amount of any Losses suffered or incurred by the Indemnified Party,
the whole as of the date that the Indemnified Party incurs any such Losses.
Indemnification payments made pursuant hereto shall be treated as a reduction or
increase, as the case may be, in the Purchase Price for the Purchased Assets.
11.4 Mitigation of Losses
The Indemnified Party shall have the same obligation to mitigate its Losses as
it would have at law if the Losses were the subject of a claim for damages for a
breach of warranty.
11.5 Notification
Promptly upon obtaining knowledge thereof, the Indemnified Party shall notify
the Indemnifying Party of any cause which the Indemnified Party has determined
has given or could give rise to
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indemnification under this Article 11. The omission so to notify the
Indemnifying Party shall not relieve the Indemnifying Party from any duty to
indemnify and hold harmless which otherwise might exist with respect to such
cause unless (and only to that extent) the omission to notify materially
prejudices the ability of the Indemnifying Party to exercise its right to defend
provided in this Article 11.
11.6 Defense of Third Party Claim
If any legal proceeding shall be instituted or any claim or demand shall be
asserted by a third party against the Indemnified Party (each a "Third Party
Claim"), then the Indemnifying Party shall have the right, after receipt of the
Indemnified Party's notice under Section 11.5 and upon giving notice to the
Indemnified Party within thirty (30) calendar days of such receipt, to defend
the Third Party Claim at its own cost and expense with counsel of its own
selection, provided that:
a) the Indemnified Party shall at all times have the right to fully
participate in the defense at its own expense;
b) the Third Party Claim seeks only monetary damages and does not seek
any injunctive or other relief against the Indemnified Party;
c) legal counsel chosen by the Indemnifying Party is satisfactory to
the Indemnified Party, acting reasonably;
d) the Indemnifying Party shall take all steps necessary in the defense
or settlement thereof and shall at all times diligently and promptly
pursue the resolution thereof; and
e) the Indemnifying Party, with respect to such Third Party Claim,
acknowledges in writing to the Indemnified Party the Indemnified
Party's right to indemnification pursuant hereto to the extent
provided herein and provides assurances, reasonably satisfactory to
such Indemnified Party, that the Indemnifying Party will be
financially able to satisfy such claim to the extent provided herein
if such Third Party Claim is decided adversely.
Amounts payable by the Indemnifying Party pursuant to a Third Party Claim shall
be paid in accordance with the terms of the settlement or, the judgment, as
applicable, but in any event prior to the expiry of any delay for a judgment to
become executory.
Notwithstanding the above, if a Third Party Claim relates to any Intellectual
Property included in the Purchased Assets, Purchasers shall have the right to
control the defense of the Third Party Claim, and the reasonable fees and
expenses of counsel to Purchasers and other reasonable out-of-pocket expenses of
Purchasers shall be "Losses" for purposes of this Article 11, to the extent such
Third Party Claim is ultimately determined to be an indemnifiable claim.
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11.7 No Compromise
The Indemnifying Party shall not compromise and settle or cause a compromise and
settlement of any Third Party Claim without the prior written consent of the
Indemnified Party, unless:
a) the terms of the compromise and settlement require only the payment
of money and do not require the Indemnified Party to admit any
wrongdoing or take or refrain from taking any action; and
b) the Indemnified Party receives, as part of the compromise and
settlement, a legally binding and enforceable unconditional
satisfaction or release, which is in form and substance satisfactory
to the Indemnified Party, acting reasonably, from any and all
obligations or liabilities it may have with respect to the Third
Party Claim.
11.8 Failure to Defend
If the Indemnifying Party fails:
a) within thirty (30) calendar days from receipt of the notice of a
Third Party Claim to give notice of its intention to defend the
Third Party Claim in accordance with Section 11.6; or
b) to comply at any time with Sections 11.6c), 11.6d) or 11.6e),
then the Indemnifying Party shall be deemed to have waived its right to defend
the Third Party Claim and the Indemnified Party shall have the right (but not
the obligation) to undertake the defense of the Third Party Claim and to
compromise and settle the Third Party Claim on behalf, for the account and at
the risk and expense, of the Indemnifying Party.
If the Indemnifying Party does not or cannot assume the defense of any Third
Party Claim in accordance with the terms of this Article 11, the Indemnified
Party may defend against such Third Party Claim in such manner as it may deem
appropriate, including settling such Third Party Claim after giving notice of
the same to the Indemnifying Party, on such terms as such Indemnified Party may
deem appropriate. If any Indemnifying Party seeks to question the manner in
which such Indemnified Party defended such Third Party Claim or the amount of or
nature of any such settlement, such Indemnifying Party shall have the burden to
prove by a preponderance of the evidence that such Indemnified Party did not
defend such Third Party Claim in a reasonably prudent manner.
11.9 Limitation on Indemnification
a) After Closing, save in the case of fraud or fraudulent concealment,
the obligations of indemnification set forth in this Agreement shall
exclusively govern the liability of the Parties under this Agreement
for the warranties described in Sections 11.1a) and 11.2a) and shall
(with respect to the obligations of indemnification in Sections
11.1a) and 11.2a)):
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i) with respect to any particular claim for Losses, not apply and
save in the case of fraud or fraudulent concealment, the
Indemnifying Party shall have no liability unless notification
of any cause of indemnification has been given in accordance
with Section 11.5 within two years after the Closing Date
(except for any claim arising from (x) the intellectual
property warranty (Section 4.1k)) in which case notification
must be given within 18 months after the Closing Date and (y)
the transactional warranties (Sections 4.1b), 4.1c), 4.1d),
4.2b), 4.2c), 4.2d), 4.3b), 4.3c) or 4.3d)), in which case
notification may be given at any time and the Indemnifying
Party shall be liable for an unlimited period), except in the
event of fraud or fraudulent concealment, in which case
notification may be given at any time and the Indemnifying
Party shall be liable for an unlimited period;
ii) not apply and the Indemnifying Party shall have no liability
to the extent that any Loss results from the wilful
misconduct, bad faith, recklessness and/or fraud or fraudulent
concealment of the Party seeking indemnification;
iii) not apply and the Indemnifying Party shall have no liability
except if a Loss exceeds Five thousand (US) dollars
(U.S.$5,000) (the entirety, and not the excess over Five
thousand (US) dollars (U.S.$5,000) of such Loss, a "Permitted
Loss") and for these purposes each Loss resulting from a
series of related claims with respect to related facts or
circumstances shall be aggregated and deemed to be a single
Loss;
iv) not apply and the Indemnifying Party shall have no liability
until the Permitted Losses in the aggregate exceed Five
hundred thousand (US) dollars (U.S.$500,000) in which case the
obligation of indemnification shall apply to the entire
amount, except in the event of fraud or fraudulent
concealment, in which case the Indemnifying Party shall be
liable for the entire amount of the Losses;
v) not apply and the Indemnifying Party shall have no liability
to the extent that the Losses claimed have been actually
reimbursed through insurance to the Indemnified Party in which
case the Indemnified Party shall refund any amount recovered
to the Indemnifying Party to the extent such amount has
previously been recovered from the Indemnifying Party under
this Agreement;
vi) not exceed Twelve million (US) dollars (U.S.$12,000,000) in
the aggregate for all Permitted Losses relating to all claims,
except in the event of fraud or fraudulent concealment, in
which case the Indemnifying Party shall be liable for an
unlimited amount;
vii) be reduced by the amount of the Losses that are due to the
failure of an Indemnified Party to mitigate such Losses as
required by Section 11.4;
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viii) The obligations of indemnification set forth in Sections
11.1a) and 11.2a) shall not apply in respect of a claim to the
extent that the same or circumstances giving rise thereto are
fairly disclosed in the Section to the Disclosure Schedule
relating to the subject matter of the claim;
ix) Notwithstanding any other provision of this Agreement, no
provision herein shall be deemed a waiver by any party of any
right to specific performance or injunctive relief permitted
pursuant to this Agreement, or any right or remedy arising by
reason of a claim of fraud;
For the avoidance of doubt, for the purpose of Section 11.9a)vi), the obligation
to indemnify and limitation of liability shall apply as if Indemnified Party
meant the Vendor and Zarlink Canada taken together on the one hand, and the
Purchasers taken together on the other hand;
Neither the Vendor Indemnities, taken together, nor the Purchaser Indemnities,
taken together, shall be entitled to recover any sum in respect of any claim
pursuant to any indemnity provided in this Agreement to the extent that to do so
would involve recovery more than once in respect of the same Loss.
ARTICLE 12
GUARANTEE
12.1 Guarantee Undertaking by Zarlink Canada
In consideration for Purchasers entering into the Agreement, Zarlink Canada
hereby unconditionally and irrevocably guarantees to Purchasers the full, due
and punctual performance and observation by Vendor of all of the obligations of
Vendor under the terms of this Agreement and the Employee Consultation and
Indemnity Agreement (the "Obligations"). In the event of any failure by Vendor
to perform or observe such Obligations, Zarlink Canada shall be liable for such
Obligations arising hereunder as if it were a primary obligor.
12.2 Nature of Obligations
The Obligations of Zarlink Canada under this Article 12:
a) shall be continuing obligations in respect of all Obligations which
have not been previously discharged by Vendor and shall not be
satisfied, discharged or affected by any change in the constitution
or control of, or the insolvency of, or any liquidation, winding up
or analogous proceedings relating to Vendor;
b) shall be discharged on an ongoing basis by the due performance by
Vendor or Zarlink Canada of the relevant Obligations, but otherwise
shall not be discharged, prejudiced, lessened, affected or impaired
by any act, omission or circumstance whatsoever which but for this
provision might operate to release or exonerate Vendor from all or
any part of such obligations or in any way discharge, prejudice,
lessen, affect or impair the same; and
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c) shall not be released or diminished by any forbearance, neglect or
delay in seeking performance hereby imposed or any granting of time
for such performance or, except in respect of the variation of the
relevant Obligation under this Article 12 in accordance with this
Agreement or any variation of this Agreement or the Employee
Consultation and Indemnity Agreement, as applicable.
12.3 Waiver
Zarlink Canada waives any right it may have to require Purchasers first to
proceed against or claim payment from Vendor before claiming under this Article
12.
12.4 Not in Substitution
This guarantee is in addition to and without limiting and not in limitation of
or substitution for any rights or security which Purchasers may now or hereafter
have or hold for the performance and observance of the Obligations.
12.5 Enforceability
As a separate and independent stipulation, Zarlink Canada agrees that any
Obligations expressed to be given by Vendor which may not be enforceable against
or recoverable from Vendor by reason of any disability or incapacity on or on
behalf of Vendor shall nevertheless be enforceable against Zarlink Canada as
though the same had been incurred by Zarlink Canada and Zarlink Canada were the
sole and principal obligor in respect thereof and/or shall be performed or paid
by Zarlink Canada on demand being made on or after the time at which such
Obligation arises.
ARTICLE 13
CLOSING
13.1 Date, Time and Place of Closing
The Closing shall take place at the offices of XxXxxxxx Xxxxxxxx LLP on November
30, 2005 (in the City of Montreal) (the "Closing Date") at 12 p.m. (the "Time of
Closing"), or at such other place, on such other date and at such other time as
may be agreed by the Parties.
ARTICLE 14
POST-CLOSING COVENANTS
14.1 Books and Records
After the Closing until the sixth (6th) anniversary of the Closing Date, Vendor
and its representatives will have the reasonable right to inspect and make
copies of the Books and Records then possessed by Purchasers relating to Vendor,
the Purchased Assets or the Business on or prior to the Closing Date, and
Purchasers will have the reasonable right to inspect and make copies of such
books and records of Vendor or its Affiliates relating to the Business and the
Excluded Assets, in each case, to the extent such party requires such
information (i) for tax reporting or to contest tax assessments or
reassessments; (ii) to provide information required by
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Law; (iii) in connection with any action, claim, suit, demand, litigation or
arbitration proceeding, investigation, enquiry or any other proceedings
(collectively the "Proceedings") against such party or to which such party is a
party or for which such party has a legitimate interest (other than Proceedings
between Vendor and Purchasers or their Affiliates); or (iv) for any other
legitimate purpose. The foregoing right of inspection shall only be exercisable
upon prior reasonable notice to the other parties and in such a manner as to not
interfere unreasonably with the normal operations and business of the other
parties. The requesting party shall reimburse the providing party for its
reasonable costs and expenses in complying with this Section 14.1. To the extent
that the information contained in such Books and Records constitutes
confidential information of Purchasers, Vendor and its representatives will use
their due care to not disclose such information except to the extent such
information (i) is required to be disclosed pursuant to an order or request of a
judicial authority or Governmental Authority having competent jurisdiction or
(ii) which can be shown to have been generally available to the public otherwise
than as a result of a breach of this Section 14.1. The Books and Records may
nevertheless be destroyed by Purchasers if either of them sends to Vendor
written notice of its intent to destroy some or all of the said Books and
Records, specifying with particularity the contents of the Books and Records to
be destroyed. Such Books and Records may then be destroyed after the 30th
calendar day after such notice is given unless Vendor objects to the
destruction, in which case Purchasers shall either agree to retain such Books
and Records or deliver such Books and Records to Vendor.
14.2 Access to Employees
After the Closing, Intel UK shall make the employees of the Business available
to Vendor during normal business hours for the purposes of providing Vendor with
information and assistance that Vendor may reasonably require in connection with
any Proceedings, except as to any Proceedings between Vendor and Intel UK or
their Affiliates. Intel UK shall instruct the relevant employees to cooperate in
good faith with Vendor. Vendor shall exercise this right so as to minimize any
disruption to the operations of the Business and shall reimburse Intel UK and
the relevant employees for the reasonable costs they may respectively incur in
connection with the foregoing.
ARTICLE 15
MISCELLANEOUS
15.1 Risk of Loss
From the date hereof up to the Time of Closing on the Closing Date, the
Purchased Assets shall be and shall remain at the risk of Vendor. If, prior to
the Time of Closing on the Closing Date, all or any material portion of the
Purchased Assets are destroyed or damaged by fire or other casualty or shall be
appropriated, expropriated or seized by any Governmental Authority, then
Purchasers shall have the option on or prior to the Time of Closing on the
Closing Date:
a) to terminate this Agreement forthwith upon written notice to Vendor
to such effect; or
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b) to proceed with the Closing without reduction of the Purchase Price,
in which case all proceeds of insurance or compensation for
expropriation or seizure (up to the amount of the Purchase Price)
shall be payable to Purchasers and all right, title and interest of
Vendor to any such amounts not paid by the Closing Date shall be
assigned to Purchasers pursuant to an agreement of assignment in
form and substance satisfactory to the legal counsel of Purchasers,
acting reasonably.
15.2 Announcements; Confidentiality
Each of the Parties hereto will hold, and will cause their respective
Affiliates, consultants and advisors to hold, in confidence all documents and
information furnished to it by or on behalf of another party to this Agreement
in connection with the transactions contemplated by this Agreement and each of
the Ancillary Agreements pursuant to the terms of the CNDA. Prior to Closing,
any press release, public announcement or publicity with respect to the
transactions contemplated in this Agreement shall be made only with the prior
consent of the Parties unless such release, announcement or publicity is
required by Law or stock exchange rules, in which case the Party required to
make such release, announcement or publicity shall provide advance notice to the
non-disclosing parties of the information to be disclosed and provide the
non-disclosing parties a reasonable time (and if legally practicable to do so,
at least two (2) business days) and cooperation to request exemption from, or
confidential treatment of, such disclosure as is indicated by the non-disclosing
parties, and further, shall use its reasonable efforts to obtain approval of the
other Party to the form, nature and extent of such disclosure, which approval
shall not be unreasonably withheld. Each Purchaser acknowledges that Zarlink
Canada is obliged under U.S. and Canadian securities Laws and stock exchange
rules to issue a press release upon execution of this Agreement, which shall be
substantially in the form agreed by the Parties. Unless otherwise determined by
a court of competent jurisdiction, each Party shall keep this Agreement and each
Ancillary Agreement strictly confidential and make no disclosure thereof to any
Person except the Party's advisors and lenders and except as may be required in
connection with the consummation of the transactions contemplated hereby or as
may be required by Law (but subject to the preceding provisions hereof), without
the prior written consent of the other Parties.
15.3 Third Party Rights
a) The Parties to this Agreement do not intend that any term of this
Agreement should be enforceable, by virtue of the Contracts (Rights
of Third Parties) Xxx 0000, by any Person who is not a Party.
b) Article 11 to this Agreement confers a benefit on the Purchaser
Indemnitees and the Vendor Indemnitees and, subject to Section
15.3c) below, is intended to be enforceable by the Purchaser
Indemnitees and the Vendor Indemnitees by virtue of the Contracts
(Rights of Third Parties) Xxx 0000.
c) Notwithstanding Section 15.3b), any provision of this Agreement may
be rescinded or varied in any way and at any time by the Parties
without the consent of any Purchaser Indemnitees or Vendor
Indemnitees who are not Parties.
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15.4 Further Assurances
Each Party upon the request of another Party, whether at or after the Closing,
shall do, execute, acknowledge and deliver or cause to be done, executed,
acknowledged or delivered all such further acts, deeds, documents, assignments,
transfers, conveyances, powers of attorney and assurances as may be reasonably
necessary or desirable to effect complete consummation of the transactions
contemplated by this Agreement. Each Party undertakes in good faith to use all
reasonable endeavours from the date of this Agreement to procure that mutually
acceptable arrangements are entered into at or prior to Closing (whether by way
of assignment, licence, sub-licence or otherwise), with effect from Closing, in
respect of the items of Intellectual Property described in Section 15.4 of the
Disclosure Schedule.
15.5 Successors in Interest; Assignment
This Agreement and the provisions hereof shall enure to the benefit of and be
binding upon the Parties and their respective successors and assigns. None of
the Parties may assign this Agreement or any of its rights and obligations
hereunder without the prior written consent of the other Parties, provided, that
Purchasers may assign this Agreement to an Affiliate of either Purchaser without
the prior written consent of Vendor or Zarlink Canada. No such assignment shall
relieve the assigning party of its obligations or any liability hereunder if
such assignee does not perform such obligation.
15.6 Notices
Any notice, consent, authorization, direction or other communication required or
permitted to be given hereunder shall be in writing and shall be delivered
either by personal delivery or by telecopier or similar telecommunications
device and addressed as follows:
a) in the case of Vendor:
Zarlink Semiconductor Limited
Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx, Xxxxxx Xxxxxxx
XX0 0XX
Attention: Xxx Xxxxxx
Telecopier: (00) 0000 000 000
with a copy to:
Zarlink Semiconductor Inc.
000 Xxxxx Xxxx
Xxxxxx, Xxxxxxx
Xxxxxx
X0X 0X0
Attention: Xxx XxXxxxxx
Telecopier: (000) 000-0000
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with a copy to:
XxXxxxxx Xxxxxxxx LLP
0000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxx
Xxxxxx
X0X 0X0
Attention: Xxxxxx X. Xxxxxxx
Telecopier: (000) 000-0000
b) in the case of Zarlink Canada:
Zarlink Semiconductor Inc.
000 Xxxxx Xxxx
Xxxxxx, Xxxxxxx
Xxxxxx
X0X 0X0
Attention: Xxx XxXxxxxx
Telecopier: (000) 000-0000
with a copy to:
XxXxxxxx Xxxxxxxx LLP
0000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxx
Xxxxxx
X0X 0X0
Attention: Xxxxxx X. Xxxxxxx
Telecopier: (000) 000-0000
c) in the case of Intel UK:
Intel Corporation
0000 Xxxxxxx Xxxxxxx Xxxx.
Xxxxx Xxxxx, Xxxxxxxxxx
Xxxxxx Xxxxxx
00000
Attention: Treasurer
Telecopier: (000) 000-0000
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with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
Telephone House
0-0 Xxxxxx Xxxxx
Xxxxxx XX0X XXX, Xxxxxx Xxxxxxx
Attention: Xxxxxxx X. Xxxx
Telecopier: (00) 00 0000 0000
d) in the case of Intel UK:
Intel Corporation (UK) Limited
Xxxxxx Xxx
Xxxxxxx, Xxxxxxxxx, Xxxxxx Xxxxxxx
XX0 0XX
Attention: Legal Department
Telecopier: (00) 00 0000 0000
with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
Telephone House
0-0 Xxxxxx Xxxxx
Xxxxxx XX0X XXX, Xxxxxx Xxxxxxx
Attention: Xxxxxxx X. Xxxx
Telecopier: (00) 00 0000 0000
Any notice, consent, authorization, direction or other communication delivered
as aforesaid shall be deemed to have been effectively delivered and received, if
sent by telecopier or similar telecommunications device on the date next
following receipt of such transmission or, if by personal delivery, to have been
delivered and received on the date of such delivery, provided, however, that if
such date is not a business day in the jurisdiction of receipt, then it shall be
deemed to have been delivered and received on the business day next following
such delivery. Any Party may change its address for service by notice delivered
as aforesaid.
15.7 Expenses
Each Party shall bear and pay all costs, expenses and fees (including legal
counsel and accounting fees and disbursements) incurred by it in connection with
the preparation, execution and consummation of this Agreement and the
transactions contemplated hereunder.
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15.8 Counterparts
This Agreement may be executed in one or more counterparts, each of which when
so executed shall be deemed an original, and such counterparts together shall
constitute one and the same instrument.
15.9 Agent for Service
a) Zarlink Canada irrevocably appoints Vendor to be its agent for the
receipt of service of process in England. It agrees that any service
document may be effectively served on it in connection with
proceedings in England and Wales by service on its agent.
b) Intel US irrevocably appoints Intel UK to be its agent for the
receipt of service of process in England. It agrees that any service
document may be effectively served on it in connection with
proceedings in England and Wales by service on its agent.
15.10 Severability
Any Article, Section or other subdivision of this Agreement or any other
provision of this Agreement which is, or becomes, illegal, invalid or
unenforceable shall be severed herefrom and shall be ineffective to the extent
of such illegality, invalidity or unenforceability and shall not affect or
impair the remaining provisions hereof, which provisions shall (a) be severed
from any illegal, invalid or unenforceable Article, Section or other subdivision
of this Agreement or any other provision of this Agreement, and (b) otherwise
remain in full force and effect.
15.11 Entire Agreement
Save in the case of fraud of fraudulent concealment, this Agreement, including
the Disclosure Schedule, the Ancillary Agreements and the CNDA constitute the
entire Agreement between the Parties pertaining to the subject matter hereof,
and supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions of the Parties. The warranties of Vendor and
Zarlink Canada contained in Sections 2.1 final paragraph, 4.1 and 4.2 and the
representations and warranties of Vendor and Zarlink Canada contained in the
Ancillary Agreements are the only representations and warranties made by Vendor
and Zarlink Canada in connection with the transactions contemplated herein and,
for greater certainty and without limiting the generality of the foregoing, no
other representation, warranty or condition, whether contractual or legal,
either express or implied by Vendor and Zarlink Canada or construed or relied
upon by Purchasers, is made in connection with, arising out of or relating to
the transactions contemplated by this Agreement. The warranties of Purchasers
contained in Section 4.3 and representations and warranties of Purchasers
contained in the the Ancillary Agreements are the only representations and
warranties made by Purchasers in connection with the transactions contemplated
herein and, for greater certainty and without limiting the generality of the
foregoing, no other representation, warranty or condition, whether contractual
or legal, either express or implied by Purchasers or construed or relied upon by
Vendor or Zarlink Canada, is
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made in connection with, arising out of or relating to the transactions
contemplated by this Agreement and the Ancillary Agreements.
15.12 Gender; plural; business day
Any reference in this Agreement to any gender shall include both genders and the
neuter, and words herein importing the singular number only shall include the
plural and vice versa. "business day" means a day which is not a bank holiday in
the United Kingdom, in the Province of Ontario, Canada or the State of
California, United States of America.
15.13 Interpretation
The word "including", when following any general statement, term or matter, is
not to be construed to limit such general statement, term or matter to the
specific statements, items or matters set forth immediately following such word
or to similar statements, items or matters, whether or not non-limiting language
(such as "without limitation" or "but not limited to" or words of similar
import) is used with reference thereto, but rather is to be construed to refer
to all other terms or matters that could reasonably fall within the broadest
possible scope of such general statement, term or matter. In the case of any
direct conflict between a provision of this Agreement and a provision of any
Ancillary Agreement or the CDNA, the provision of this Agreement shall prevail.
15.14 Currency
All of the dollar amounts mentioned in this Agreement or in the Disclosure
Schedule annexed hereto or in any Ancillary Agreement shall be in United States
(U.S.) dollars, unless otherwise specifically denominated.
15.15 Headings; References to Legal Terms
The headings in this Agreement are inserted for convenience of reference only
and shall not affect the interpretation hereof. References to any English legal
term for any action, remedy, method of judicial proceeding, legal document,
legal status, court, official or any other legal concept shall, in respect of
any jurisdiction other than England, be deemed to include the legal concept
which most nearly approximates in that jurisdiction to the English legal term.
15.16 Amendment
No amendment to this Agreement shall be binding unless expressly provided in an
instrument duly executed by the Parties.
15.17 Waiver
No waiver, whether by conduct or otherwise, of any of the provisions of this
Agreement shall be deemed to constitute a waiver of any other provisions
(whether or not similar) nor shall such
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waiver constitute a continuing waiver unless otherwise expressly provided in an
instrument duly executed by the Parties.
15.18 Governing Law
This Agreement and the relationship between the Parties is governed by and will
be construed in accordance with the laws of England.
15.19 Jurisdiction
For the purpose of all legal proceedings this Agreement will be deemed to have
been performed in England and the courts of England will have jurisdiction to
entertain any action or dispute arising under this Agreement. Vendor, Zarlink
Canada and Purchasers each submit to the exclusive jurisdiction of the courts of
England.
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the date and at
the place first above mentioned.
ZARLINK SEMICONDUCTOR LIMITED
Per: /s/ Xxxxx Xxxxxxxx
-----------------------------------
Name : Xxxxx Xxxxxxxx
Title: Director
Per: /s/ Xxx Xxxxxx
-----------------------------------
Name: Xxx Xxxxxx
Title: Director
ZARLINK SEMICONDUCTOR INC.
Per: /s/ Xxxxxx X. XxXxxxxx
-----------------------------------
Name : Xxxxxx X. XxXxxxxx
Title: Senior Vice-President,
Human Resources, General
Counsel and Secretary
Per: /s/ Xxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxx
Title: Senior Vice-President,
Finance and Chief Financial Officer
INTEL CORPORATION
Per: /s/ Xxxxxx Xxxxxxx
-----------------------------------
Name : Xxxxxx Xxxxxxx
Title: Senior Vice President and
President, Intel Capital
INTEL CORPORATION (UK) LIMITED
Per: /s/ Xxxxxx Xxxxxxx
-----------------------------------
Name : Xxxxxx Xxxxxxx
Title: Authorized Signer
[SIGNATURE PAGE TO ZARLINK/INTEL ASSET PURCHASE AGREEMENT]