SHARE SALE AND TRANSFER AGREEMENT
BETWEEN
"▇▇▇▇▇▇" VERWALTUNGSGESELLSCHAFT ▇▇▇▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇. ▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ OF GERMANY
(HEREINAFTER REFERRED TO AS "SELLER")
AND
VISHAY INTERTECHNOLOGY, INC.
▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇.▇.▇.
(HEREINAFTER REFERRED TO AS "VISHAY")
AND
ATMEL CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
(HEREINAFTER REFERRED TO AS "ATMEL")
AND
ATMEL HOLDING GMBH I.G.
▇▇▇▇▇▇▇▇▇▇▇▇. ▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
(HEREINAFTER REFERRED TO AS "PURCHASER")
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DEFINITIONS
"Affiliate" of any company shall mean a company affiliated with such firstmentioned company
in the meaning of ▇▇.▇▇. 15 et seq. German Stock Corporation Act (Aktiengesetz).
Being "affiliated" shall have the corresponding meaning.
"TEMIC" shall mean Temic Telefunken microelectronic GmbH or any Affiliate thereof.
"TSG Discrete
Subsidiaries" shall mean the companies belonging to the Discrete Business.
"TSG IC
Subsidiaries" shall mean the companies belonging to the IC Business.
"TSG Part" shall mean the part of TSG neither being the IC Business nor the Discrete
Business.
1.
SALE AND TRANSFER OF THE TSG SHARE
(1) Economically effective as of the end of February 28, 1998 (24:00 hrs.) (the
date of such transfer is hereinafter referred to as the "IC Transfer Date")
and in accordance with, upon and subject to the terms and conditions of
this Agreement: Seller hereby sells and transfers to the Purchaser a
(partial) share in the nominal amount of DM 40,000,000 (the "TSG Share";
making up 50 % of the nominal share capital) of TEMIC Semiconductor GmbH, a
German company ("TSG "), all rights and obligations pertaining thereto for
the past and for the future, and with the right to receive the dividends
pertaining to the TSG Share resulting from (x) the profits realized in the
time from the IC Transfer Date on and (y) not yet distributed profits of
TSG and the TSG IC Subsidiaries (such as retained earnings).
(2) Economically effective as of the IC Transfer Date and in accordance with,
upon and subject to the terms and conditions of this Agreement, Seller
hereby sells and transfers to the Purchaser the following receivables
(Forderungen):
(a) receivable of the Seller against MHS S.A. in the amount of US-$ 51,9
million (the "Matra Receivable");
(b) receivable of the Seller against TSG in the amount of
US-$18,978,700.-- (the "TSG IC Receivable").
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(3) The Purchaser hereby accepts such sale and transfer referred to above under
subcl. (1) and (2).
(4) March 2, 1998, 24.00 hours shall be referred to as the "Effective Time" in
this Agreement.
(5) The notice to TSG of the share transfer pursuant to ss. 16 (1) of the
German Limited Liability Company Act will be given immediately after the
Effective Time.
2.
CONDITIONS TO TRANSFER OF THE TSG SHARE
The transfer of the TSG Share is subject to the conditions precedent that
a) the Purchase Price (as defined) including interest thereon, if any, for all
transfers contemplated by this Agreement be paid in full in accordance with
Section 10; and
b) a notification by the Federal Cartel Office (Bundeskartellamt) that the
purchase of the TSG Share by the Purchaser does not fulfill the prohibition
prerequisites of Sec. 24 (1) of the Act against Restraints of Competition
(Gesetz gegen Wettbewerbsbeschrankungen) be received by Seller or Purchaser
or their respective counsel.
Until the effectiveness of the transfer of the TSG Share, the Seller will ensure
that TSG will be managed in the ordinary course of business and that all major
issues are, to the extent legally possible, discussed with the Purchaser before
implementing them.
3.
REAL ESTATE
(1) Seller and Purchaser shall ensure that Seller or the Seller Spin-off
Company and TSG (as tenants) and Purchaser or the Purchaser Spin-off
Company (as landlord) execute, immediately after the effectiveness of the
Spin-off, lease agreements with the following main conditions and otherwise
at terms usually for lease agreements of this type.
(2) Basic terms:
Duration: 10 years
Rent and expenses: based on the allocation of rent and expenses used prior
to the IC Transfer Date if reasonable
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Sublease: Right of the tenant with continuing secondary liability
Moving-out: renovation obligations enabling landlord to continue leasing
without renovation costs
Environmental matters: full liability for environmental problems caused by
tenant.
4.
AGREEMENT REGARDING SPIN-OFF
(1) The Seller and the Purchaser shall ensure that, as soon as legally
possible, the business involving the design, marketing and manufacturing of
Discretes (Servo, opto) and Power ICs (hereinafter referred to as the
"Discrete Business") and the business involving the design, marketing and
manufacturing of ICs (hereinafter referred to as the "IC Business") be
split from each other (the "Spin-off") by spinning them off (abspalten)
into two separate companies (the "Seller Spin-off Company" and the
"Purchaser Spin-off Company"). The effective time of the Spin-off
(Spaltungsstichtag) shall be February 28, 1998.
(2) The Discrete Business is defined in more detail in Schedule 4.2.
(3) The IC Business is defined in more detail in Schedule 4.3. The IC Business
shall also include certain real estate to be mutually agreed upon between
Seller and Purchaser at a later date as being compatible with the IC
Business. To the extent that it is not possible or advisable to include
such real estate in the Spin-off, the parties may elect to choose other
ways of transfer from the Seller or its Affiliates to the Purchaser or its
Affiliates.
(4) The TSG Part is defined in more detail in Schedule 4.4.
(5) The organization of TSG until the time of the effectiveness of the Spin-off
(registration in the commercial register) is described in more detail in
Schedule 4.5.a and the organization of the TSG IC Subsidiaries until the
time of the fulfillment of the condition precedent contained in Section 2
(b) is described in more detail in Schedule 4.5.b.
(6) The parties agree that Seller is entitled to elect that Temic
Microelectronics Ges.mbH, Austria, is not part of the Spin-off. In such
case Seller shall purchase Temic Microelectronics Ges.mbH at such
conditions that no party is economically worse off than under the Spin-off
(would the Spin-off include Temic Microelectronics Ges.mbH).
(7) The parties agree that Purchaser or any of its Affiliates is entitled to
elect that Matra S.A., France is not part of the Spin-off. In such case
Purchaser or any of its Affiliates
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shall purchase Matra S.A at such conditions that no party is economically
worse off than under the Spin-off (would the Spin-off include Matra S.A.).
(8) The parties agree that Purchaser or any Affiliate of Purchaser is entitled
to receive the assets relating to the IC Business of Temic Semiconductor
(Phils.) Inc.. Once the Seller (or an Affiliate of the Seller) or TSG
becomes the shareholder of Temic Semiconductor (Phils.) Inc., the Seller
shall ensure that Temic Semiconductor (Phils.) Inc. transfers to Purchaser
or, at Purchaser's direction, to an Affiliate of the Purchaser, such assets
of Temic Semiconductor (Phils.) Inc. which belong to the IC Business. It is
understood between the parties that such assets belong to the IC Business
sold hereunder to the Purchaser so that no additional purchase price is
payable for such transfer of the assets. If a purchase price has to be
paid, for whatever reasons, the parties shall ensure that no party is
economically worse off than without any specific payment of a purchase
price.
Before Purchaser or any Affiliate of Purchaser exercises its right to
receive the assets relating to the IC Business of Temic Semiconductor
(Phils.) Inc., the Purchaser (or its relevant Affiliate) shall be
responsible for the part of Temic Semiconductor (Phils.) Inc. belonging to
the IC Business. Such responsibility shall include any costs relating to
the giving of notices to employees and environmental issues, all to the
extent they relate to the IC Business after the IC Transfer Date.
(9) The parties agree that the TSG IC Receivable will be part of the Spin-off
into the Purchaser Spin-off Company and that the TSG Discrete Receivable
will be part of the Spin-off into the Seller Spin-off Company.
(10) In case of disagreement between the Seller and the Purchaser regarding the
content of the spin-off documentation (including the employees, assets,
liabilities and contracts to be transferred), the Seller and/or the
Purchaser may submit the issue in dispute to an arbiter jointly elected by
the Seller and the Purchaser. If Seller and Purchaser cannot agree upon an
arbiter, KPMG and Hengeler ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ where Hengeler ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ shall be responsible for the legal matters and KPMG shall be
responsible for the non-legal matters shall decide the issue in dispute.
(11) The parties agree that the TSG IC Receivable and the TSG Discrete
Receivable shall be allocated to the IC Business (TSG IC Receivable) and to
the Discrete Business (TSG Discrete Receivable). The parties further agree
that the creditors of both such receivables shall not be entitled to (i)
interest from TSG but only from the Seller Spin-off Company and the
Purchaser Spin-off Company, respectively, and, (ii) repayment of any
principal amount from TSG.
(12) Seller shall be responsible for any taxes arising on the level of TSG in
connection with the Spin-off of the Discrete Business to the Seller
Spin-off Company and shall
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indemnify TSG for any such tax payments. Purchaser shall be responsible for
any taxes arising on the level of TSG in connection with the Spin-off of
the IC Business to the Purchaser Spin-off Company and shall indemnify TSG
for any such tax payments.
5.
EMPLOYEES; PENSIONS
(1) The parties will try to establish three lists of employees relating to
TSG (the "Service Employees"), the Seller Spin-off Company (the "Discrete
Employees") and the Purchaser Spin-off Company (the "IC Employees"), all
for the time after the effectiveness of the Spin-off (and prior thereto
to the individual business areas within TSG).
(2) The parties agree that all pension liabilities of TSG with respect to the
current IC Employees shall be part of the Spin-off into the Purchaser
Spin-off Company, that all pension liabilities of TSG with respect to the
current Discrete Employees shall be part of the Spin-off into the Seller
Spin-off Company and that all pension liabilities of TSG with respect to
the current Service Employees shall remain part of TSG. All pension
liabilities with respect to the former employees of TSG (including
retired employees) shall be part of the Spin-off into the Seller Spin-off
Company (to the extent legally possible). To the extent it is not legally
possible to transfer by way of Spin-off all pension liabilities relating
to all former employees of TSG to the Seller Spin-off Company, such
pension obligations shall remain with TSG and the Seller, Vishay and the
Seller Spin-off Company shall reimburse and hold harmless TSG for all
costs and expenses resulting from the pension obligations which have to
remain with TSG.
6.
AGENTS, DISTRIBUTORS; SALES OFFICES
(1) Independent sales agents and distributors active in the distribution of
goods of the Discrete Business and the IC Business shall, if the parties
so decide, continue to distribute goods of both such Businesses. In such
a case, both, the Seller Spin-off Company and the Purchaser Spin-off
Company, shall try to execute independent agreements with the agents and
distributors.
(2) If only one of the parties decides that it wants to continue with the
respective agent or distributor, the other party shall try to execute an
agreement with such agent or distributor on the terms of the termination.
In case such distributor is entitled to
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receive a compensation because of the loss of part of the business, such
compensation shall be borne by the party electing to discontinue with the
agent or distributor.
(3) With respect to sales offices of the Business, Seller and Purchaser shall
try to find an allocation of such sales offices to one or both of them
together with an agreement regarding the respective division of costs.
The Purchaser shall state which sales offices it wants to use. If the
Seller also wants to use such sales office the costs shall, unless the
parties agree otherwise, be shared in the relation of 60 % (Seller) and
40 % (Purchaser). In cases where only Seller or Purchaser want to use the
respective sales office the respective party shall bear all of its costs.
Where neither party wants to use the respective sales office, the sales
office shall be closed and the costs shall, unless the parties agree
otherwise, be shared in the relation of 60 % (Seller) and 40 %
(Purchaser).
7.
OBLIGATIONS OF SELLER AND PURCHASER AT THE EFFECTIVE TIME
At the Effective Time the Seller shall have put TSG and each of the TSG IC
Subsidiaries into the financial position that there is no negative balance on
the intercompany accounts ("IC Accounts") with Daimler Benz AG or any Affiliate
of Daimler Benz AG or Vishay or any Affiliate of Vishay and no negative balance
on the bank accounts ("Bank Accounts") nor that there is any bank debt
outstanding except for the following debt of TSG and the TSG IC Subsidiaries:
(1) debt of MHS S.A. against the Seller in the amount of US-$ 51,9 million
being the Matra Receivable;
(2) debt of TSG against the Seller in the amount of US-$ 18,978,700 being the
TSG IC Receivable; and
(3) debt of TSG against the Seller relating to the Discrete Business and being
referred to as the TSG Discrete Receivable in an amount equal to the
remainder between the total debt of TSG against the Seller (approximately
DM 112 million) and US-$ 18,978,700.
8.
CHANGE OF CONTROL AGREEMENTS
(1) Some of the contracts and agreements of TSG and the TSG IC Subsidiaries
contain clauses that give rise to a right of termination, cancellation or
acceleration in the event that the direct or indirect control of TSG or a
TSG IC Subsidiary should change. All
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material change of control agreements of TSG and the TSG IC Subsidiaries,
including but not limited to agreements with licensors and with customers
and clients, are listed on Schedule 8.1 (together with any such agreements
not listed on Schedule 8.1, the "Change of Control Agreements").
(2) Except as otherwise provided in this Section, Seller does not warrant, and
any warranty is expressly excluded, that the respective other party or
parties to the Change of Control Agreements will not assert a termination
right, renegotiation right or similar right as a result of the execution
and performance of this Agreement; this limitation of warranty also applies
to any statutory termination or similar rights in the event of a change of
control.
(3) Notwithstanding subcl. (2) above, Seller shall use its commercially
reasonable efforts, and shall try to obtain the assistance of TEMIC and/or
Daimler Benz AG to assist the Purchaser in its efforts to afford the
Purchaser the benefits of the continuation of the Change of Control
Agreements from and after the Effective Time, despite the sale and transfer
of the TSG Share to the Purchaser.
(4) With respect to the MHS S.A. (formerly "MATRA MHS S.A.") grant and
subsidies matter described in Section 6 (5) of the Vishay-Temic Agreement,
the Seller shall exercise all its rights described thereunder and shall
assign to or (if the assignment is not possible) pass on to the Purchaser
any benefits received thereunder, especially any reimbursements under the
80 %/20 % indemnity provision contained in such aforementioned Section. In
order to benefit from such indemnity, the Purchaser is aware that it will
have to comply with the obligations of the Seller contained in such
aforementioned Section.
9.
PURCHASE PRICE
(1) The purchase price for the TSG Share (the "Share Purchase Price") amounts
to US-$ 37,374,300 and includes the additional real estate referred to in
Section 4 (3), above. The purchase price of the Matra Receivable amounts to
US-$ 51,900,000 and the purchase price for the TSG IC Receivable amounts to
US-$18,978,700 (together the "Receivables Purchase Price"). The Share
Purchase Price and the Receivables Purchase Price shall together be
referred to as the "Purchase Price". Together, the Purchase Price
(calculated on a debt-free basis, see Section 7) amounts to US-$
108,253,000.
(2) The Purchase Price is reduced by any negative balance on the IC Accounts
and Bank Accounts (including any bank debt), other than the receivables
referred to in Section 7
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hereof, which have not been settled prior to the Effective Time as provided
for in Section 7 hereof.
(3) If the diputes/litigation matters with IBM and SGS-▇▇▇▇▇▇▇▇ lead to payment
obligations in excess of the sum of DM 1,8 million and FF 28 million then
the Seller shall pay to the Purchaser any excess above such aforementioned
sum up to a maximum of US-$ 1 million.
(4) To the extent that balance sheet adjustments in respect of the IC Business
or the TSG Part are being made in accordance with the provisions of the
Vishay-Temic Agreement then the Purchase Price is reduced by 100 % of any
negative balance of the adjustments relating to the IC Business and by 50 %
of any negative balance of the adjustments relating to the TSG Part on the
basis that the Purchaser shall benefit from any adjustments in accordance
with the provisions of the Vishay-Temic Agreement as if he were a party to
such agreement.
10.
PAYMENT
(1) In case the condition precedent contained in Section 2 (b) has not been
fulfilled on the date hereof, the Purchaser shall pay the Purchase Price
to the following escrow account:
Account: 844386
Bank: Nations Bank, Texas
Accountholder: Vishay Int. in trust for Atmel Corp.
The payment shall be made under the condition that the amount shall be
paid to the Seller upon fulfillment of the condition precedent contained
in Section 2 (b) provided this fulfillment occurs prior to June 30, 1998.
If the fulfillment of the aforementioned condition precedent does not
occur prior to June 30, 1998, the payment of the escrow amount shall be
made to the Purchaser. The interest accruing on the escrow account shall
be for the benefit of the Purchaser.
(2) 3 % over and above the discount rate of the German Federal Reserve Bank
prevailing from time to time is hereby agreed to be the interest rate for
all cases of payment default (Zahlungsverzug) among the parties to this
Agreement; the creditor may assert excess damage.
(3) Payment of the Purchase Price shall be made in U.S. dollars.
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11.
TAXES
(1) Definitions
a) For purposes of this Agreement, "Tax" or "Taxes" shall mean all
taxes, charges, fees, levies, penalties or other assessments
including, but not limited to, income, excise, property, sales,
transfer, franchise, payroll, withholding, social security, value
added, or other taxes, including any interest, penalties or
additions attributable thereto, imposed by the relevant federal,
state, or local taxing authority or a taxing authority of any
other country.
b) For purposes of this Agreement, "Tax Return" shall mean any
returns, statements, reports and forms (including estimated tax or
information returns and reports) required to be filed with any
taxing authority with respect to Taxes.
(2) Cooperation on Tax Matters
a) Purchaser and Seller and, to the extent reasonably required, TSG shall
cooperate fully, as and to the extent reasonably requested by the
other party, in connection with the preparation and filing of Tax
Returns, and any audit, litigation or other proceeding with respect to
Taxes. Such cooperation shall include the retention and (upon the
other party's request) the provision of records and information which
are reasonably relevant to any such audit, litigation or other
proceeding and making employees available on a mutually convenient
basis to provide additional information and explanation of any
material provided hereunder.
b) Purchaser and Seller agree (i) until one year after expiration of all
applicable statutes of limitation (as may be extended) to retain, or
cause to be retained, all books and records with respect to Tax
matters pertinent to TSG relating to any taxable periods ending prior
to or including the IC Transfer Date, and to abide by all record
retention agreements entered into with any taxing authority, (ii) to
give the other party reasonable written notice prior to destroying or
discarding any such books and records after the periods described in
(i) above, and (iii) if the other party so requests, allow the other
party to take possession of such books and records.
c) Purchaser and Seller further agree, upon request from the other party,
to use all reasonable efforts to obtain any certificate or other
document from any governmental authority or customer of TSG or from
any other person as may be necessary to mitigate, reduce or eliminate
any Tax that could be imposed,
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including but not limited to with respect to the transactions
contemplated hereby.
(3) Tax representation and indemnification, Set-off of Tax Benefit
Subject to Section 13 (6), (9) and - with the exception (b), below- (12):
a) Seller represents that each of TSG and the TSG IC Subsidiaries has
timely, completely, and accurately in all material respects, filed all
Tax Returns required to be filed by it on or before the IC Transfer
Date with respect to any taxable period or periods ending on or before
the IC Transfer Date, and has paid, or, as the case may be, has caused
its Affiliates to pay in a timely fashion all Taxes shown to be due on
such Tax Returns to the appropriate tax authorities. Except with
respect to any tax audits, there is no action, suit, proceeding,
investigation or claim for any Taxes been proposed, asserted or, to
the knowledge of TEMIC and/or the Seller, threatened.
Seller hereby indemnifies Purchaser against and agrees to hold the
Purchaser harmless from any unpaid Tax of (or levied against) TSG
and/or the TSG IC Subsidiaries with respect to unpaid Taxes with
respect to any periods ending on or before the IC Transfer Date.
b) Purchaser hereby indemnifies Seller against and agrees to hold Seller
harmless from any Tax imposed on a Vishay Company or any of their
Affiliates with respect to the business of the TSG IC Subsidiaries,
incurred with respect to any taxable period or periods beginning on or
after and ending after the IC Transfer Date. Seller hereby indemnifies
Purchaser against and agrees to hold Purchaser harmless from any Tax
imposed on an Atmel Company or any of their Affiliates with respect to
the business of the TSG Discrete Subsidiaries, incurred with respect
to any taxable period or periods beginning on or after and ending
after the IC Transfer Date.
c) Any indemnity obligation pursuant to Section 11 (3) (a) or (b) above
shall be (i) reduced by any Tax Benefit realized by the indemnified
party or any Affiliate thereof or successor thereto, with respect to
such Taxes or the adjustment giving rise to such claim for
indemnification, and (ii) subject to presentation of the final
assessment of such Tax, on or before the 60th day following the
expiration of the applicable statute of limitations. "Tax Benefit"
shall mean the present value or any present or future deduction,
expense, loss, increase in asset basis, credit or refund then or
thereafter realized by a party or an Affiliate thereof or successor
thereto, in respect of Tax Benefits in Germany or elsewhere calculated
using the interest rate of 6 % per annum.
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d) Each party agrees (i) to give within ten Business Days written notice
to the other party of any additional Tax (including, but not limited
to, any Tax assessments, whether final or not) or the assertion of any
claim or the commencement of any suit, action or proceeding in respect
of which such party may seek indemnity hereunder, and (ii) to give the
other party such information with respect thereto as the other party
may reasonably request, and (iii) upon the other party's instruction,
to file, or cause the company concerned to file, any notice, objection
or otherwise with the appropriate taxing authority. The indemnifying
party shall not be liable under this Section 11 (3) to the extent such
party is materially adversely affected by the indemnified party's
failure to comply with this provision.
e) An indemnifying party may, at its own expense, (i) participate in and
(ii) upon notice to the other party, assume the defence of any suit,
action or proceeding, including any Tax audit, concerning any Tax
liability as to which it may be liable under this Section 11 (3) and
as to which written notice was given pursuant to Section 11 (3) d). If
a party chooses to defend or prosecute any claim, all of the parties
hereto shall cooperate in the defence or prosecution thereof. A party
shall not be liable under Section 11 (3) to the extent such party's
liability under this Section is materially adversely affected as a
result of any failure or omission to do so on the part of the other
party or any Affiliate thereof or successor thereto.
12.
WARRANTIES OF SELLER
The Seller hereby represents and warrants to the Purchaser as follows:
(1) The description of and representations as to the corporate structure of
TSG and its Affiliates set forth, or referred to, in Section 1 (1)
through (8) of the Vishay-Temic Agreement are true and accurate in all
material respects. Seller is the creditor of the Matra Receivable and
the TSG IC Receivable; such receivables are due and payable with no
more than 10 days notice, they are free and unencumbered in all
respects and the respective debtors do not have any right to refuse or
delay payment thereunder. Upon execution of this Agreement, the
Purchaser will be the creditor of such receivables.
(2) TSG and the TSG IC Subsidiaries are a corporation, a limited liability
company or a partnership duly organized, validly existing and, where
applicable, in good standing under the laws of the jurisdiction of its
organisation. Each of TSG and the TSG IC Subsidiaries has all requisite
power and authority to own, lease and operate its properties and to
carry on its business as now being conducted, except where the
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failure to be so existing and in good standing or to have such power
or authority would not individually or in the aggregate have a
material adverse effect on the business, financial condition or result
of operations of TSG and the TSG IC Subsidiaries, taken as a whole (a
"Material Adverse Effect") in excess of DM 1 million. TSG and the TSG
IC Subsidiaries are duly qualified or licensed to do business as a
foreign corporation, foreign limited liability company or foreign
partnership and, where applicable, are in good standing to do business
in each jurisdiction in which the property owned, leased or operated
by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except in such jurisdictions
where failure to be so duly qualified or licensed and in good standing
would not, in the aggregate, have a Material Adverse Effect in excess
of DM 1 million. Schedule 12.2 sets forth a complete and accurate list
of all jurisdictions in which TSG and each of the TSG IC Subsidiaries
are qualified or licensed to do business. The Seller has heretofore
delivered to the Purchaser accurate and complete copies of the
certificate of incorporation and bylaws (or other similar charter
documents) or partnership agreements of TSG and the TSG IC
Subsidiaries (except inactive Subsidiaries identified as such on
Schedule 12.2), as currently in effect.
(3) The Seller has the requisite power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by the Seller and the
consummation by the Seller of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action on
the part of the Seller, except as set forth in this Agreement. This
Agreement has been duly and validly executed and delivered by the
Seller and, assuming the due authorization, execution and delivery by
the Purchaser, constitutes a valid and binding agreement of the Seller,
enforceable against the Seller in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting creditors'
rights generally.
(4) Except as set forth on Schedule 12.4 and except for applicable
requirements of the German GWB and ss. 3 of the German Currency Act
(Wahrungsgesetz) to the knowledge of the Seller, there is no
requirement applicable to the Seller or TSG to make any filing with, or
to obtain any permit, authorization, consent or approval of, any
governmental or regulatory authority, domestic or foreign, as a
condition to the lawful consummation by the Seller of the transactions
contemplated by this Agreement. Except as set forth on Schedule 12.4,
neither the execution and delivery of this Agreement by the Seller nor
the consummation by the Seller of the transactions contemplated hereby
nor compliance by the Seller with any of the provisions hereof will (i)
conflict with or result in any breach of any provision of the
certificate of incorporation or bylaws (or other similar charter
documents) of the Seller or TSG or any of the TSG IC Subsidiaries, or
(ii) assuming that the filings referred to in the first sentence of
this subcl. (4) are duly and timely made, to the
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knowledge of TEMIC and/or the Seller, violate any order, writ,
injunction, decree, statute, treaty, rule or regulation applicable to
the Seller, TEMIC, TSG, any of the TSG IC Subsidiaries or any of their
respective properties or assets; excluding from this clause (ii) such
breaches, defaults and violations which in the aggregate could not
reasonably be expected to have a Material Adverse Effect in excess of
DM 1 million.
(5) Except for the possibility that the French Government (Ministry of
Industry) might consider to claim repayment of French Franc 417 million
the Subsidy granted to MATRA MHS S.A., unless appropriate assurances
which may be expected by the French Government would be given by the
Purchaser, neither the Seller nor TEMIC have reason to believe that the
other parties to the Change of Control Agreements, which are material
to the Business, will upon the sale and transfer of the TSG Share to
the Purchaser or the Spin-off, exercise a right of termination,
cancellation or acceleration under any of the terms, conditions or
provisions of any such material Change of Control Agreement.
(6) All legal, administrative, arbitration or other proceedings or
governmental investigations (except tax audits) ("Proceedings") pending
or, to the knowledge of TEMIC and/or the Seller, threatened in writing,
against TSG or the TSG IC Subsidiaries, which are reasonably expected
to result in a damage award of more than DM 1,000,000 individually are
disclosed on Schedule 12.6. Except for Proceedings relating to
environmental or tax matters, there are no Proceedings pending or, to
the knowledge of TEMIC and/or the Seller, threatened in writing,
involving TSG or the TSG IC Subsidiaries (other than Maxim, SGS
▇▇▇▇▇▇▇▇ and IBM) which will result in aggregate damage awards of more
than the sum of DM 2,000,000.
(7) a) Except as set forth on Schedule 12.7, to the knowledge of TEMIC and/or
the Seller, TSG and the TSG IC Subsidiaries are in compliance with all
Environmental Law (as hereinafter defined) as presently in effect,
except for such violations which could not reasonably be expected
individually to have a Material Adverse Effect in excess of DM
500,000. Except as set forth on Schedule 12.7, to the knowledge of
TEMIC and/or the Seller, neither TSG nor any of the TSG IC
Subsidiaries has received any written communication from a
governmental authority that alleges that such company is not in
compliance with all applicable Environmental Law as presently in
effect, except for such events of noncompliance which could not
reasonably be expected to have a Material Adverse Effect in excess of
DM 200,000 in each individual case. All material permits and other
governmental authorization currently held by TSG pursuant to an
Environmental Law are identified on Schedule 12.7.
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b) Except as set forth on Schedule 12.7, there is no Environmental Claim
(as hereinafter defined) pending, or, to the knowledge of TEMIC and/or
the Seller, threatened in writing against TSG or any of the TSG IC
Subsidiaries or, to the knowledge of TEMIC and/or the Seller, against
any person or entity whose liability for such an Environmental Claim
TSG or any of the TSG IC Subsidiaries has or may have retained or
assumed either contractually or by operation of law, except for such
Environmental Claims which could not reasonably be expected to have a
Material Adverse Effect in excess of DM 200,000.
c) As used herein, the following terms shall have the meaning set forth
below:
(i) "Environmental Claim" means any claim or notice in writing,
received by TEMIC, the Seller, TSG or any of the TSG IC
Subsidiaries by any person or any entity alleging potential
liability (including, without limitation, potential
liability for investigatory costs, clean-up costs,
governmental response costs, natural resources damages,
property damages, personal injuries, or penalties) arising
out of, based on or resulting from (a) the presence, or
release into the environment, of any Hazardous Materials (as
hereinafter defined) at any location, whether or not owned
by TSG or any of the TSG IC Subsidiaries or (b) any
violation, or alleged violation, of any Environmental Law.
(ii) "Environmental Law" means all federal, state, local and
foreign laws and regulations relating to pollution or
protection of human health or the environment applicable to
the property and business of TSG or any of the TSG IC
Subsidiaries.
(iii)"Hazardous Materials" means materials defined as "hazardous
substances", "hazardous wastes", "solid wastes" or words of
similar import in any Environmental Laws, as presently in
effect.
(8) Except as set forth on Schedule 12.8, and except for standard corporate
policy, and except as provided for by law or collective bargaining
agreements or similar provisions, neither TSG nor, to the knowledge of
TEMIC and/or the Seller, any of the TSG IC Subsidiaries is a party to
or bound by any contract, agreement or arrangement with its employees
regarding an obligation to make severance payments in case of a
termination of employment.
(9) Intellectual property
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a) Except for such intellectual property the absence of which is
not material, Schedule 12.9 sets forth the following:
(i) all intellectual property rights (including
applications) that have been registered for TSG or any
of the TSG IC Subsidiaries in the corresponding
registry, and
(ii) all licences to intellectual property rights and
copyrights (except for standard software) that have
been licensed to TSG or any of the TSG IC Subsidiaries
on the basis of a licence agreement or other right
(passive licences), and
(iii) all licences granted by TSG or any of the TSG IC
Subsidiaries to third parties (active licences).
Schedule 12.9 is not intended to contain
- standard software licences;
- internal licences between any of the TSG IC Subsidiaries;
- licences under the foregoing subpara. (iii) that are
implicitly granted to customers in agreements with
customers, including licences to allow design,
service, repair and similar services to be performed
by third parties.
The intellectual property rights set forth on Schedule 12.9
pursuant to subpara. (i), above are hereinafter referred to as
the "Intellectual Property Rights"; the trademarks contained
therein are hereinafter referred to as the "Trademarks".
b) The Intellectual Property Rights registered for TSG or any of
the TSG IC Subsidiaries are owned by the respective company
and to the knowledge of TEMIC and/or the Seller free and clear
of any encumbrances or other rights of third parties, except
for employee inventor rights, sublicenses, and, to the extent
included on Schedule 12.9, cross license agreements and
co-ownership rights.
c) None of the Intellectual Property Rights, except applications,
has been adjudicated unenforceable or ineffective in any other
manner. Neither the Seller nor TEMIC has any knowledge that
any of the Intellectual Property Rights is not valid or not
subsisting.
d) The Intellectual Property Rights and the other intellectual
property rights including licences provided in this Agreement
to be conveyed to TSG and the
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TSG IC Subsidiaries are all material intellectual property
rights which belong to or are lawfully used in the Business
as defined in Section 1 (9) of the Vishay-Temic Agreement.
(10) a) Except as set forth on Schedule 12.10.a, TSG or any of the
TSG IC Subsidiaries ----------------- incorporated in
Germany have not entered into agreements with its works
council with respect to maintaining a certain number of
workers, a certain organization or salaries and wages that
are effective past December 31, 1997. All pension plans
applicable to employees of TSG or employees of TSG IC
Subsidiaries incorporated in Germany are also set forth on
Schedule 12.10.a. Except as set forth on Schedule 12.10.a,
to the knowledge of TEMIC and/or the Seller, there is no
strike, work stoppage, work slowdown or other material labor
disturbance involving employees of TSG or any of the TSG IC
Subsidiaries pending, or to the knowledge of TEMIC and/or
the Seller, threatened.
b) A true, correct and complete list dated January 31, 1998 of
all employees of TSG and the TSG IC Subsidiaries in the form
of the personnel statistics as routinely prepared as part of
the internal reporting system used by them is attached as
Schedule 12.10.b.
(11) Schedule 12.11 is a complete and accurate list of all material
insurance policies currently carried by TSG and the TSG IC Subsidiaries
(summarizing in all material respects the amount and scope of the
coverage provided by each such policy). Each such insurance policy is
in full force and effect and there is no material default by TSG or any
of the TSG IC Subsidiaries with respect to any provision contained in
any such insurance policy, including, without limitation, any failure
to give any notice or to present any claim under any such policy in a
timely fashion or in the manner or detail required by the policy,
except for such defaults or failures, which, individually or in the
aggregate, could not be expected to be material.
(12) a) The Seller has previously furnished to the Purchaser the audited
balance sheets of TTMG and those of its direct or indirect
subsidiaries relating to the semiconductor business as of December 31,
1996 listed on Schedule 12.12.a (the "GERMAN AUDITED BALANCE SHEETS"
or "AUDITED BALANCE SHEETS") and the related audited income statements
of TTMG and of its direct or indirect subsidiaries listed on Schedule
12.12.a for the fiscal year then ended (together with the notes
thereto) accompanied by the report thereon of the independent public
accountants (collectively with the German Audited Balance Sheet, the
"GERMAN AUDITED FINANCIAL STATEMENTS" or the "AUDITED FINANCIAL
STATEMENTS"). The Audited Balance Sheets (including the related notes)
as of the time when they were prepared fairly present in all material
respects the financial position of the companies concerned therein as
of De-
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cember 31, 1996, and the other related year-end statements included in
the Audited Financial Statements (including the related notes) fairly
present in all material respects the results of operations of the
companies included therein for the fiscal year then ended.
b) In addition to the Pro Forma Balance Sheet including the related
income statement, the Seller has furnished to the Purchaser pro forma
interim consolidated financial statements (including related income
statements) for the Business (comprised of the Discrete Business and
the IC Business) as of June 30, 1997, September 30, 1997, and December
31, 1997, which were routinely prepared in accordance with Schedule
12.12.b ---------------- consistently applied as part of the internal
reporting system used by TSG and the Subsidiaries (collectively,
including the Pro Forma Balance Sheet, referred to as the "PRO FORMA
FINANCIAL STATEMENTS").
(i) The Pro Forma Financial Statements, as of the time
when they were prepared, fairly present in all
material respects the financial positions of the
Business as of the respective dates thereof and the
results of operations of the Business for the
respective time periods covered thereby.
(ii) Except in connection with the transactions referred to
in or contemplated by this Agreement, since the time
of the preparation of the pro forma interim
consolidated financial statements as of September 30,
1997, (i) TSG and the TSG IC Subsidiaries have
conducted the Business in all material respects only
in the ordinary and normal course consistent with past
practice, and (ii) there has not been any material
adverse change in the operations or financial
condition of the Business.
Due to the scope of this Agreement, this subclause (12) only
grants rights to the Purchaser to the extent the IC Business
is concerned.
(13) a) Schedule 12.13.a contains a true and complete list of the following
important contracts to which TSG or any of the TSG IC Subsidiaries is
a party (a "GERMAN TSG PARTY") and, collectively, the "GERMAN TSG
PARTIES") and which have not yet been fully performed, except for
contracts required to be disclosed in any other schedule to this
Agreement and except for contracts exclusively relating to the
Discrete Business:
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(i) All manufacturers sales representatives agreements,
distributor agreements (including franchises) or
agreements providing for the services of an
independent contractor if such agreement involves
annual sales volume or an obligation of the German TSG
Parties of more than DM 2,000,000.
(ii) All loan agreements, indentures, mortgages, pledges
and security agreements, having (in the case of
indebtedness) a principal amount or providing for (in
the case of other agreements) aggregate payments in
excess of DM 1,000,000 and all guaranties with a
guaranteed amount in excess of DM 200,000.
(iii) All leases or lease purchase agreements providing for
monthly payments in excess of DM 40,000 or annual
payments in excess of DM 500,000.
(iv) All other contracts or agreements relating to the
business or operations of the German TSG Parties which
in the best judgement of the German TSG Parties are
important to the business or operations of the German
TSG Parties and which involve payments or receipts by
the German TSG Parties of more than DM 2,000,000
individually.
b) Schedule 12.13.b contains a list of all material contracts of
TSG and the TSG IC Subsidiaries with the United States or any
foreign government or any agency or department of any thereof
pursuant to which TSG or any of the TSG IC Subsidiaries is
entitled to receive grants, subsidies or similar financial
support.
To the knowledge of TEMIC and/or the Seller, the validity or
enforceability of the contracts listed on Schedule 12.13.a and 12.13.b
has not been legally contested or questioned in writing. To the
knowledge of TEMIC and/or the Seller, there does not exist any breach
or default on the part of TSG or any of the TSG IC Subsidiaries or the
other party thereto under any of the contracts listed on Schedule
12.13.a and 12.13.b, except such breaches or defaults which would not,
individually or in the aggregate, have a Material Adverse Effect in
excess of DM 4 million.
(14) All financial and other obligations which might result from the
judgement of the Supreme Court in Manila dated December 12, 1997 or
related judgements pertaining to the lay-off of workers and employees
by TEMIC Telefunken microelectronic (Philippines) Inc. are exclusively
obligations of TEMIC Telefunken microelectronic (Philippines) Inc. and
shall have no financial impact on TEMIC Semiconductors (Phils.) Inc.,
TSG or the TSG IC Subsidiaries.
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(15) Except as set forth on Schedule 12.15 and except for each event of
non-compliance or violation which would not have a Material Adverse
Effect in excess of DM 2,000,000, (i) to the knowledge of TEMIC and/or
the Sellerduring the three year period immediately preceding the date
of this Agreement, TEMIC, TSG and the TSG IC Subsidiaries have
conducted their respective businesses in material compliance with all
material applicable laws, and (ii) neither TEMIC, the Seller nor TSG
nor any of the TSG IC Subsidiaries have received any written notice of
violation of any applicable regulation, ordinance or other law which is
applicable and material to the Business. Only as a clarification of the
general rule contained in subcl. (28), it is hereby stated that this
subcl. (15) shall not apply to subject matters of an area which can be
the subject of a representation and warranty where this Agreement
contains a specific warranty, in other words, this subcl. (15) shall
not apply, e.g., to any environmental matter, whether or not covered by
subcl. (7), because environmental warranty matters are conclusively
dealt with in that subcl. (7).
(16) TSG and each of the TSG IC Subsidiaries has complied in all material
respects with all specifications and other requirements of the U.S.
Government (including, but not limited to, the Department of Defense
and NASA) (the "U.S. Government"), made applicable by the U.S.
Government to the design and manufacturing of the products manufactured
by TSG and each of the TSG IC Subsidiaries and directly, or with the
knowledge of TSG or TSG IC Subsidiaries, sold to the U.S. Government,
except for all such instances or events of non-compliance which would
not, in the aggregate, have a Material Adverse Effect in excess of DM 1
million. In addition, TSG and each of the TSG IC Subsidiaries have
complied in all material respects with all (i) government or military
specifications or requirements and Qualified Product Lists of the U.S.
Government published from time to time by the Defense Supply Center
which are applicable to products manufactured by the Business (the
"Qualified Product Lists") and (ii) established reliability, testing,
quality assurance or other similar procedures and/or regulations
(including, but not limited to, procurement regulations relating to the
failure to comply with such procedures and/or regulations) of the U.S.
Government incorporating such standards applicable to any products
manufactured by the Business prior to the date hereof, except for all
such instances or events of non-compliance and all failures to
establish such standards which would not, in the aggregate, have a
Material Adverse Effect in excess of DM 1000,000.
(17) Intentionally left blank.
(18) Schedule 12.18 contains a list of all contracts between TSG or any of
the TSG IC Subsidiaries, on the one hand, and the Seller or any company
in which Vishay or Daimler Benz AG hold a (direct or indirect) majority
interest (in terms of capital and votes), on the other hand, which (i)
have a term that will continue past the IC
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Transfer Date, and (ii) have resulted in annual payment obligations of
TSG or any of the TSG IC Subsidiaries in excess of DM 1 million.
Additionally, Schedule 12.18 contains a list of all contracts between
TSG on the one side and any of the TSG IC Subsidiaries on the other
side with the same conditions referred to under (i) and (ii) of the
preceding sentence.
(19) Intentionally left blank.
(20) Schedule 12.20 contains a true and complete list of the 10 major
customers and suppliers of the IC Business. Neither TEMIC nor the
Seller nor TSG nor the TSG IC Subsidiaries have any reason to believe
that any of the three largest customers listed on Schedule 12.20 will
not, in all material respects, continue its customer relationship with
the IC Business after the Effective Time.
(21) Schedule 12.21 contains a true and complete list of the current
directors and officers (or the persons holding equivalent positions,
where applicable) of TSG and each TSG IC Subsidiary.
(22) Schedule 12.22 contains a true and complete list of all major bank
accounts of TSG.
(23) The Seller has previously made available to the Purchaser true and
complete copies of the standard warranty provided by TSG and the TSG IC
Subsidiaries on sales orders and other related documents which are
delivered in connection with product sales. Except as set forth on
Schedule 12.23, TSG's and the TSG IC Subsidiaries' customary practice
is to include only such standard warranty.
(24) Intentionally left blank.
(25) Subject to the drop down transactions of TSG registered in December
1997, the assets, liabilities and operations of TSG and its Affiliates
are substantially the same as the assets, liabilities and operations of
the "TEMIC Semiconductor" business as it was previously conducted and
offered by TEMIC to the Seller and which formed the basis of the Pro
Forma Balance Sheet and the other Pro-Forma Financial Statements.
(26) Neither TEMIC nor the Seller has any reason to believe that the
relationship with Tomen will materially negatively change as a result
of the consummation of the transactions contemplated hereby.
(27) Except for the warranties set forth or referred to in this Section 12,
or expressly set forth elsewhere in this Agreement, the Seller
expressly gives no other warranties, whether express or implied; any
such other warranties are expressly excluded.
-22-
(28) The parties hereto are in agreement that if two or more of the
representations and warranties contained in this Agreement relate,
directly or indirectly, to the same subject matter, the more specific
representation and warranty shall be deemed to be the only
representation and warranty with respect to such subject matter and the
Purchaser shall not have any indemnification claim against the Seller
as a result of an inaccuracy of the more general representation and
warranty.
(29) It is not considered a misrepresentation or a breach of warranty if an
item of information is not set forth on the corresponding Schedule but
contained in another Schedule or elsewhere in this Agreement.
13.
INDEMNIFICATION
(1) If and to the extent that one or several of the representations or
warranties given by the Seller should be inaccurate, the Purchaser is
entitled to claim restitution of the warranted situation or, if and to
the extent that this is not possible or if and to the extent restitution
is refused, monetary damages except as limited elsewhere in this
Agreement. The claim for monetary damages exists in the amount that is
necessary to establish the situation as it has been represented and
warranted, or, if that is not possible, in the amount which is inevitably
necessary to make up for the foreseeable direct damage directly
attributable to the breach of warranty. In determining the amount of
damages, no missed profit (entgangener Gewinn) or other consequential
damage (mittelbarer oder Folgeschaden) shall be included.
(2) Except as otherwise expressly provided in this Agreement, the right of
the Purchaser to assert a claim under subcl. (1) above or under any other
provision or in connection with this Agreement shall expire on March 31,
1999 (statute of limitation, Verjahrungsfrist). Required and sufficient
for complying with this period is the assertion of a claim against the
Seller in writing setting forth conclusively in reasonable detail the
facts that support the claim and specifying in detail the amount thereof.
The assertion of a claim in this manner constitutes an interruption
(Unterbrechung) of the running of the above term, for a period of six
months, solely in respect of the claim asserted and the factual basis
therefor.
(3) During the period under subcl. (2) above the Purchaser agrees to give the
Seller prompt notice, in form and substance as provided in subcl. (2)
above, of any event, or any written claim by a third party of which
Purchaser, obtains knowledge, which could give rise to any damage,
liability, loss, cost or expense as to which it may request monetary
damages under subcl. (1) of this Section in order to provide the Seller
with the opportunity to bring about the warranted situation or to
mitigate the damages, but the failure to give such prompt notice shall
not affect the Purchaser's
-23-
rights hereunder, except to the extent the Seller were materially and
adversely prejudiced thereby.
(4) Notwithstanding subcl. (2) above
a) the statute of limitations for asserting any deficiencies in legal
title to the TSG Share and the shares in the TSG IC Subsidiaries
shall be five years from December 31, 1997;
b) the statute of limitations for asserting a claim under Section 11
hereof shall in respect of TSG and the TSG IC Subsidiaries be
three months after the date of the finality of the tax assessment
after the respective tax audit.
(5) The principles of offsetting benefits from damaging events (e.g.
insurance payments, offsets of reserves, tax effects etc.) against the
damage (Vorteilsausgleichung) shall be applied. This shall include, but
not be limited to the following:
If after the Effective Time, TSG or any of the TSG IC Subsidiaries
should reduce the scope of its insurance vis-a-vis the current
status, it shall be assumed, for purposes of applying the rules on
offsetting losses against benefits from the damaging events
(Vorteilsausgleichung), that no such reduction of the scope of
insurance has occurred. This assumption shall not apply to any
reduction in the scope of insurance of TSG or any of the TSG IC
Subsidiaries (i) if such reduction is the result of an
extraordinary industrywide increase of the premiums charged for
maintaining the relevant insurance coverage at current levels and
if, as a result of such increase, a substantial number of
businesses competing with the Business have similarly reduced the
scope of their respective insurance, or (ii) if a type of
insurance previously carried by TSG or a TSG IC Subsidiary is no
longer available throughout the insurance industry.
(6) Rescission because of error (Irrtumsanfechtung) and termination
pursuant toss.463 German Civil Code ("BGB") (Wandelung) are excluded.
(7) A claim under subcl. (1) can be raised only if and to the extent the
amount of a justified individual claim exceeds the minimum amount of DM
125,000and if and to the extent the total amount of all individual claims
raised (if and to the extent they each exceed DM 125,000) exceeds DM
3,500,000 in the aggregate.
(8) All other claims of the Purchaser against Seller under or in connection
with this Agreement are excluded, to the extent permitted under
applicable law, except as expressly provided in this Section 13.
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(9) Except for any liability arising from a deficiency in legal title of the
TSG Share or a deficiency in TSG's title in the shares in MHS S.A.,
Seller's total liability to pay damages under and in connection with this
Agreement and its consummation is limited to the higher of (i) US-$ 11
million and (ii) the total amount recovered by the Seller under the
Vishay-Temic Agreement.
(10) No party shall be liable for an unintentional inaccuracy of a
representation or warranty to the extent that the inaccuracy has been
disclosed to the other party by way of the information contained in this
Agreement and its Schedules.
(11) Claims relating to or resulting from warranties which are given herein
"To the knowledge of ..." or "have no knowledge ..." or are in some other
way linked to "knowledge", can be asserted only if such warranties in a
provable way were given despite the actual, not deemed or constructive,
knowledge (tatsachliches, nicht zugerechnetes oder fiktives Wissen) of
the director(s) (Geschaftsfuhrer) of the company (or companies) whose
knowledge is relevant, of the inaccuracy of the warranty so given. The
phrase "to the knowledge of ..., there is no ..." or phrases of similar
construction are to be interpreted to mean that the relavant company is
not aware of any facts which would make the statement inaccurate.
Knowledge of Messrs. ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, if any, shall be deemed
to be knowledge of TEMIC. Knowledge of Mr. Avi Eden shall be deemed to be
knowledge of the Seller. The warranties which are given "to the
knowledge" or "have knowledge" or are in some other way linked to
"knowledge" or "no knowledge" are given by the person or persons after
such person or persons having conducted reasonable inquiries expected
from a diligent businessman (ordentlicher Geschaftsmann).
(12) Unless explicitly provided to the contrary, the remedies of the
Purchaser against the Seller under Sec. 13 and Sec. 14 shall be limited
to the remedies realized and/or amounts recovered by the Seller under
the Vishay-Temic Agreement, provided however, that such limitation
shall not apply in case that a remedy under the Vishay-Temic Agreement
should not be realized and/or an amount not be recovered by the Seller,
whether in full or only partially, on the basis that
- certain information, which has not been disclosed in the
Vishay-Temic Agreement or in this Agreement, at any time, was
available, or was deemed or imputed to have been available, to
the Seller but not to the Purchaser, or that
- the effects of the event triggering the remedy are offset, or
are compensated in any other way, by benefits, of which the
economic effect is not allocated and flowing to the Purchaser
in full under this Agreement, or that
-25-
- the Seller, or any person whose acts or omissions to act are
imputed to the Seller, has taken, or has omitted to take, or
has refrained from taking, any action, whether of a legal or
factual nature, after the execution of the Vishay-Temic
Agreement, or that
- the Seller has not, or is deemed to have not, suffered damages
or negative effects of any kind for the reason that it has
entered into this Agreement, or that
- the Seller has settled, or has waived, or forfeited in any
way, any rights and remedies it would otherwise have had under
the Vishay-Temic Agreement.
unless the failure of the Seller to realize a remedy and/or to recover
an amount under the Vishay-Temic Agreement was the result of the
Purchaser's failure to give prompt notice to the Seller according
to Sec. 13.3 above.
In case that any of the above circumstances should result merely in a
limited availability to the Seller of remedies under the Vishay-Temic
Agreement, the remedies of the Purchaser under this Agreement shall be
available to the Purchaser to the extent they would have been available
if such circumstance had not occurred or become existent.
In case that a remedy under the Vishay-Temic Agreement should not be
available to the Seller as a result of caps or any maximum amounts
agreed in the Vishay-Temic Agreement being reached due to other
remedies asserted by the Seller, which do not directly relate to
remedies asserted by the Purchaser against the Seller under this
Agreement, the total maximum amount of the remedies of the Seller under
the Vishay-Temic Agreement shall be allocated proportionally to the
total amount of the remedies asserted by the Purchaser against the
Seller under this Agreement on the one side and to the total amount of
the other unrelated remedies asserted by the Seller under the
Vishay-Temic Agreement on the other side. The same shall apply, mutatis
mutandis, to the case that caps or maximum amounts agreed in the
Vishay-Temic Agreement for certain defined events are reached, with the
provision that the allocation shall then be made to the total amount of
the remedies asserted by the Purchaser against the Seller for such
defined events on the one side and the total amount of the other
unrelated remedies asserted by the Seller for such defined events under
the Vishay-Temic Agreement on the other side.
In case that a remedy under the Vishay-Temic Agreement should not be
available to the Seller as a result of baskets or minimum amounts
agreed in the Vishay-Temic Agreement, and provided that such baskets or
minimum amounts would be reached if the Seller asserted other claims it
has or had under the Vishay-Temic Agreement, the baskets or maximum
amounts agreed in the Vishay-Temic Agreement shall be
-26-
deemed not be applicable and do not limit Purchasers remedies
hereunder. In case that baskets or minimum amounts agreed in this
Agreement should result in negative effects to the Purchaser not being
compensated in full, and provided that the Seller is entitled to full
compensation under the Vishay-Temic Agreement, the respective baskets
or minimum amounts shall be deemed not to be applicable and do not
limit Purchaser's remedies hereunder.
In case that retainers agreed in this Agreement or in the Vishay-Temic
Agreement should result in negative effects to the Purchaser not being
compensated in full, and provided that other unrelated remedies are
available to the Seller under the Vishay-Temic Agreement, which fall
under the same or similar retainer, then the negative effects of such
retainer shall be allocated proportionally on the Seller and the
Purchaser according to the principles stated above for the case of caps
or maximum amounts applied mutatis mutandis. Any retainers, baskets or
minimum amounts agreed in this Agreement for remedies of the Purchaser
shall have priority over thresholds for retainers, baskets or minimum
amounts defined differently in the Vishay-Temic Agreement, with the
effect that the remedies under this Agreement shall be available for
the Purchaser against the Seller even though the respective remedy
should not be available to the Seller under the Vishay-Temic Agreement
as a result of such different definition of thresholds.
Without limiting any of the above, as a general principle it is
understood that the Purchaser should be treated as, and should be put
into the position it would be in,if any and all of the representations
and warranties given to the Seller in the Vishay-Temic Agreement had
been directly given to the Purchaser, and if the Purchaser had been the
"German Purchaser" under the Vishay-Temic Agreement.
The limitation of Seller's liability under this Sec. 13.12 does not
apply to warranties, which were given despite of the Seller's knowledge
(as defined in Sec. 13.11) of their inaccuracy and if such inaccuracy
is not known to the Purchaser. It does further not apply to the
warranty in Sec. 12.3 nor to the warranties under Sec. 12.4, 12.5,
12.18, 12.20 and 12.26 insofar as these warranties relate to the
Seller, Vishay, or any companies in which Vishay holds a majority
interest.
14.
INHERITED ENVIRONMENTAL LIABILITY
If and to the extent TSG or any of the TSG IC Subsidiaries suffers any liability
or incurs any costs or expenses relating to environmental matters the only
remedy of the Purchaser, in lieu of the first sentence of Section 13 (1), shall
be a compensation claim under the terms and subject to the conditions set forth
in paragraphs a) through d) of this section 14.
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a) If and to the extent that TSG or a TSG IC Subsidiary after the IC Transfer
Date is ordered with final and binding effect by an order, judgment or
similar decree issued by a competent governmental agency or court of law to
eliminate Inherited Environmental Liability (as defined hereinafter), and
if the TSG IC Subsidiary or the Purchaser or a company affiliated with the
Purchaser has not taken the initiative or otherwise promoted the issue of
the order, judgment or similar decree (compliance with duties to report,
the failure of which is subject to fines or penalties, shall not constitute
an initiation or promotion in the foregoing meaning) Seller shall indemnify
(in this context: freihalten) TSG or TSG IC Subsidiary. The duty to
indemnify shall exist only with respect to costs of the measures necessary
for TSG or TSG IC Subsidiary to comply with the order, judgment or similar
decree (including any necessary investigation costs, attorneys fees and
court costs arising in connection with the defense, if any).
b) The obligation of Seller pursuant to subcl. a) above shall exist only with
respect to costs for which subcl. a) above provides for indemnification and
only if and to the extent such costs exceed DM 1.5 million.
b) Notwithstanding Section 13, above, the statute of limitations for asserting
a claim for indemnification under this Section 14 shall be 63 months from
the IC Transfer Date.
c) "Inherited Environmental Liability" means any Environmental Claim resulting
from accumulations of Hazardous Materials existing on the IC Transfer Date
in the ground, in buildings, in other components of real property or in
ground water which under relevant provisions of Environmental Law are not
allowed to be present and the elimination of which can legally be demanded
by a governmental agency or a third party.
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15.
COOPERATION
(1) Subject to the terms and conditions herein provided, each of the parties
hereto agrees to use its commercial best efforts to take, or cause to be
taken, all action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate
and effect the transactions contemplated by this Agreement, including,
without limitation, obtaining all required consents and approvals, making
all required filings and applications and complying with or responding to
any requests by governmental agencies. For purposes of the foregoing
sentence, the obligation of the Seller and the Purchaser to use best
efforts to obtain waivers, consents and approvals to loan agreements,
leases and other contracts shall not include any obligation to agree to
an adverse modification of the terms of such documents or to prepay or to
incur additional obligations to such other parties.
(2) From time to ▇▇▇▇ ▇▇▇▇▇▇ shall use its commercially reasonable efforts to
cause TEMIC (to the extent the Vishay Companies are so entitled pursuant
to Section 15 (5) of the Vishay-Temic Agreement) and TSG and its
Affiliates to execute and deliver such documents to the Purchaser as the
Purchaser may reasonably request in order more effectively to consummate
the transactions contemplated hereby, to the extent permitted under
applicable laws. From time to time the Purchaser shall use its
commercially reasonably efforts to cause TSG and the TSG IC Subsidiaries
to execute and deliver such documents toSeller as the Seller may
reasonably request in order more effectively to consummate the
transactions contemplated hereby, to the extent permitted under
applicable laws. In case at any time after the IC Transfer Date any
further action is necessary or desirable to carry out the purposes of
this Agreement, each party to this Agreement will take or cause its
appropriate officers and directors to take all such necessary or
desirable actions.
(3) The Purchaser and Seller will consult with each other before issuing any
press release or otherwise making any public statements with respect to
this Agreement or the transactions contemplated by this Agreement, and
neither Seller nor the Purchaser shall issue any such press release or
make any such public statement prior to such consultation, except as may
be required by law or by obligations pursuant to any listing agreement
with any national securities exchange or the National Association of
Securities Dealers, Inc. in the U.S. or any rules or regulations of a
securities exchange in any other country upon which the securities of any
issuer are traded.
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16.
FILINGS, COMPLIANCE WITH ANTITRUST LAWS
The Purchaser and Seller shall use their best efforts to file, or cause their
respective ultimate parent entity to respond as promptly as practicable to all
inquiries or requests for additional information or documentation received from
the German Federal Cartel Office. The Purchaser and Seller will coordinate and
cooperate with one another in exchanging such information and provide reasonable
assistance as another may request in connection with all of the foregoing.
17.
PARENT COMPANY GUARANTEES
(1) Vishay hereby guarantees to the Purchaser the fulfillment of all
obligations of the Seller under this Agreement or as a consequence of the
Spin-off (joint and severally liability).
(2) Atmel hereby guarantees to the Seller the fulfillment of all obligations
of the Purchaser under this Agreement or as a consequence of the Spin-off
(joint and severally liability).
18.
OTHER COVENANTS
(1) Mutual "favored vendor" status:
Seller and Purchaser contemplate that they and their Affiliates will
continue (also after the Spin-off) to purchase their requirements of
goods manufactured by the respective other group, provided that such
goods are offered on competitive terms and conditions, including, without
limitation, competitive quality and pricing. Upon request of either side,
they shall use their best efforts to set forth the details of such
business relationship in an agreement or agreements.
(2) Names and trademarks: Telefunken, TFK and TEMIC
a) Names
aa) Neither the Purchaser, the Purchaser Spin Off Company,
TSG nor any of the TSG IC Subsidiaries shall be
entitled to use of the company name Telefunken in any
form or context or place; in particular not as part of
a firm name of TSG, the Purchaser Spin Off Company or
a TSG IC Subsidiary.
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bb) The parties acknowledge that Seller, Purchaser, the
TSG IC Subsidiaries, the TSG Discrete Subsidiaries,
the Purchaser Spin-off Company and the Seller Spin-off
Company are entitled to use the name "TEMIC" as part
of their firm names on a world-wide, royalty-free
basis according to Section 3 of the Trademark and Name
License Agreement concluded between TEMIC and TSG of
March 2, 1998 attached as Schedule ▇▇.▇.▇.▇▇.
b) Trademarks TFK, Telefunken Star and Telefunken
According to Section 19 (8) (b) of the Vishay-Temic Agreement,
TSG has been granted a license to use the trademarks
"Telefunken", "Telefunken Star" and "TFK" under terms and
conditions specified in the Trademark License Agreement
attached as Schedule 18.2.b. concluded between Licentia
Patent-Verwaltungs-Gesellschaft mbH and TSG on March 2, 1998
(for the purposes of this paragraph: the "License") with the
right to grant sub-licenses to companies directly or
indirectly controlled by Vishay or Atmel. The parties hereby
agree that, on demand of the Purchaser, TSG shall sub-license
to the TSG IC Subsidiaries and the IC Spin-off Company all
rights acquired under the License under the same terms and
conditions as set out in the License, provided, however, that
the TSG IC Subsidiaries and the IC Spin-off Company shall not
be entitled to make use of such sub-license in the Discrete
Business and the TSG Discrete Subsidiaries and the Discrete
Spin-off Company shall not make use of the License in the IC
Business.
c) Trademark Temic
According to Section 19 (8) (c) of the Vishay-Temic Agreement,
TSG has been granted a license to use the trademark "TEMIC"
under terms and conditions specified in the Name and Trademark
License Agreement attached as Schedule ▇▇.▇.▇.▇▇. concluded
between TEMIC and TSG on March 2, 1998 (for the purposes of
this paragraph: the "License") with the right to grant
sub-licenses to companies directly or indirectly controlled by
Vishay or Atmel. The parties hereby agree that, on demand of
the Purchaser, TSG shall sub-license to the TSG IC
Subsidiaries and the IC Spin-off Company all rights acquired
under the License under the same terms and conditions as set
out in the License.
(3) Patents licensed to TSG
According to Section 19 (2) (a-c) of the Vishay-Temic Agreement, TSG
has been granted a license to use the intellectual property rights
listed on Schedules 19.2a,
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19.2b and 19.2c of the Vishay-Temic Agreement under terms and
conditions specified in the three Patent License Agreements attached
as Schedule 18.3 concluded between TSG as licensee and Licentia
Patent-Verwaltungs-Gesellschaft mbH, Daimler-Benz Aktiengesellschaft
and TEMIC TELEFUNKEN microelectronik GmbH as licensor on March 2, 1998
(for the purposes of this paragraph: the "License") with the right to
grant sub-licenses to companies directly or indirectly controlled by
Vishay or Atmel. The parties hereby agree that, on demand of the
Purchaser, TSG shall sub-license to the TSG IC Subsidiaries and the IC
Spin-off Company all rights acquired under the License under the same
terms and conditions as set out in the License.
(4) Patents of TSG; Cross-license
(a) The parties agree that (i) all patents and other intellectual
property of TSG which relate to the IC Business will be part of
the Spin-off into the Purchaser Spin-off Company and (ii) all
patents and other intellectual property of TSG which relate to
the Discrete Business will be part of the Spin-off into the
Seller Spin-off Company.
(b) Patents and other intellectual property which relate to both, the
IC and the Discrete Business, shall remain with TSG. TSG shall
license the right to use such intellectual property (including
the right to grant sub-licenses to Affiliates) (i) to the Seller,
the TSG Discrete Subsidiaries and the Discrete Spin-off Company
for semiconductor components belonging to the Discrete Business
("Discrete Product Scope")and (ii) to the Purchaser, TSG IC
Subsidiaries and the IC Spin-off Company for semiconductor
components belonging to the IC Business ("IC Product Scope"). The
licenses granted by TSG shall be worldwide, unlimited in time and
royalty free.
(c) The Seller Spin-off Company and the Purchaser Spin-off Company
shall grant cross licenses to each other with respect to the
patents which were transferred to the them according to Section
18 (4) (a) limited to their respective product scope (i.e. IC
Product Scope or Discrete Product Scope as the case may be).
(5) Articles of Association of TSG
As soon as possible after the fulfillment of the condition precedent
contained in Section 2 (b) hereof, the Seller and the Purchasershall
convene a shareholders' meeting of TSG and resolve to adopt new articles
of association reflecting the principles referred to herein and otherwise
the character of a 50/50 joint venture. Until the time of registration of
such new articles of association, the Seller and the Pur-
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chaser shall, to the extent legally possible, behave and treat each
other as if the new articles of association would already be in
effect.
(6) Beginning with the effectiveness of the Spin-off, Seller and Purchaser
shall ensure that TSG executes service agreements regarding all services
presently rendered (within TSG) by the employees remaining with TSG, all
at-arms'-length conditions.
(7) Non-compete covenant
Seller shall, with respect to the IC Business, assign to the Purchaser or
use (if the assignment is not possible) all its rights under Section 19
(4) of the Vishay-Temic Agreement (including, without limitation, upon
the Purchaser's instruction the filing of legal action).
19.
MISCELLANEOUS
(1) This Agreement may be amended, modified or supplemented only by written
agreement of the parties hereto, unless a more stringent form is required
by applicable law.
(2) Except as otherwise provided in this Agreement, any failure of any of the
parties to comply with any obligation, covenant, agreement or condition
herein may be waived by the party or parties entitled to the benefits
thereof only by a written instrument signed by the party granting such
waiver, but such waiver or failure to insist upon strict compliance with
any such obligation, covenant, agreement or condition shall not operate
as a waiver of any other obligation, covenant, agreement or condition or
any subsequent or other failure. Whenever this Agreement requires or
permits consent by or on behalf of any party hereto, such consent shall
be given in writing in a manner consistent with the requirements for a
waiver of compliance as set forth herein.
(3) If one or several provisions of this Agreement should be or become
invalid or unenforceable, the remaining provisions hereof shall not be
affected thereby. The invalid or unenforceable provision shall be deemed
to be replaced by such valid or enforceable provision as the parties
hereto would have chosen upon entering into this Agreement in order to
reach the commercial effect of the provision to be replaced if they had
foreseen the invalidity or unenforceability at that time. The foregoing
shall also apply to matters as to which this Agreement is silent (▇▇▇▇▇
im Vertrag). If a provision of this Agreement should be held invalid by a
competent court or arbitration tribunal because of the scope of its
coverage (such as territory, subject matter, time period or amount), said
provision shall not be deemed to be completely
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invalid but shall be deemed to be valid with the permissible scope that
is nearest to the originally agreed-upon scope.
(4) The Arbitration Agreement (as hereinafter defined) and this Agreement,
including all Schedules and Exhibits hereto, constitute the entire
agreement and understanding of the parties hereto in respect of the
transactions contemplated by this Agreement and supersede all other prior
agreements and understandings, both written and oral, among the parties
or among or between any of them with respect to such transactions,
provided, however, that such prior agreements and understandings may to
the extent necessary and appropriate be used in interpretation of this
Agreement. There are no restrictions, promises, representations,
warranties, covenants or undertakings, other than those expressly set
forth or referred to herein.
(5) Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto without the
prior written consent of the other parties except for assignments to
Affiliates where the assignor remains liable to the other side for the
fulfillment of the obligations of the assignee.
(6) Seller hereby represents and warrants to the Purchaser with respect to
Seller and the Purchaser hereby represents and warrants to Seller with
respect to the Purchaser, that no person or entity is entitled to receive
from Seller or the Purchaser, respectively, any investment banking,
brokerage or finder s fees or commissions or fees for financial
consulting or financial advisory services in connection with this
Agreement or the transactions contemplated hereby.
(7) All notices and other communications hereunder shall be in writing,
unless a stricter form is required by applicable law. Notices and
communications shall be deemed to have been received by the receiving
party (i) on the date delivered if delivered in person; (ii) on the date
of the transmission if sent by facsimile to the addresses set forth
below; (iii) on the day following the date of dispatch if sent by
overnight courier; and (iv) five days after mailing if sent by registered
or certified mail (return receipt requested). The receiving party has the
right to prove that actual receipt occurred at a later date. Notices and
communications shall be sent only in the foregoing manner. Except in the
case of personal delivery, a further condition to the effectiveness of
receipt shall be that the notice or communication be sent to the
following addresses, or to such other addresses of which a party may have
informed the other party from time to time, which change of address shall
be effective only when received by the other parties:
a) If to the Seller:
Vishay Intertechnology, Inc.
▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-▇▇-
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇.▇.▇.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Avi D. Eden
With a copy to each of:
1. ▇▇▇▇▇▇ Eschenlohr ▇▇▇▇▇▇▇
Riesenkampff Fischotter
▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
Telephone: (069) 71 70 10
Facsimile: (▇▇▇) ▇▇ ▇▇ ▇▇ ▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇
2. Kramer, Levin, Naftalis & ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇.▇.▇. Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇ Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
b) If to the Purchaser:
Atmel Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇
With a copy to:
Bruckhaus ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
Telephone: (069) 273080
Facsimile: (069) 232664
Attention: ▇▇. ▇▇▇▇▇▇▇ Oesterhaus
(8) This Agreement shall be governed by and construed in accordance with the
laws of the Federal Republic of Germany (regardless of the laws that
might otherwise govern under applicable principles of conflicts of law
thereof) as to all matters, including but
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not limited to, matters of validity, construction, effect, performance
and remedies.
(9) Unless otherwise specified herein, all costs, fees and expenses in
connection with the execution and performance of this Agreement shall be
borne by the party who incurs them, irrespective of whether this
Agreement is actually performed. The notarial fees of this Agreement and
the fees payable to the German Federal Cartel Office shall be borne by
the Purchaser.
