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AGREEMENT OF PURCHASE AND SALE OF ASSETS
by and between
ORBIT SEMICONDUCTOR, INC.,
a Delaware corporation
and
PARADIGM TECHNOLOGY, INC.,
a Delaware corporation
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TABLE OF CONTENTS
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Page
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ARTICLE 1 DEFINITIONS....................................................1
1.1 Assets.........................................................1
1.2 Wafer Fab Operation(s).........................................2
1.3 Hazardous Materials............................................2
1.4 Insurance Policies.............................................3
1.5 Permits........................................................3
1.6 Premises.......................................................3
1.7 CIT Loan.......................................................3
1.8 CIT Loan Adjusted Balance......................................3
1.9 Associated Agreements..........................................3
1.10 Premises Lease.................................................4
ARTICLE 2 PURCHASE AND SALE OF ASSETS....................................4
2.1 Buy and Sell...................................................4
2.2 Purchase Price.................................................4
2.3 Payment of Purchase Price......................................4
2.4 Allocation of Purchase Price...................................4
2.5 No Assumption of Liabilities...................................5
2.6 Buyer's Sales and Use Tax......................................5
2.7 Seller's Real and Personal Property Tax........................5
2.8 Delivery of Title..............................................5
2.9 Documents to be Delivered by Seller at the
Closing........................................................6
2.10 Documents to be Delivered by Buyer at the
Closing........................................................6
2.11 Employees......................................................6
2.12 Operating Permits and Claims Concerning the
Assets.........................................................7
2.13 Buyer's Expenses...............................................7
2.14 Seller's Premises Lease Assumption.............................7
2.15 Buyer's Continued Occupation of Part of the
Premises.......................................................7
ARTICLE 3 WAFER PRODUCTION AND NOTE REDUCTION............................8
3.1 Buyer's Continuing Wafer Production............................8
3.2 Seller's Purchase Rights and Obligations.......................8
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER.......................8
4.1 Seller's Corporate Status......................................8
4.2 Authorization; Etc.............................................8
4.3 No Violation...................................................9
4.4 Consents and Approvals of Government
Authorities....................................................9
4.5 Material Changes in Seller's Financial
Condition.................................................... 10
4.6 Title to Assets; Encumbrances................................ 10
4.7 Seller's Lease............................................... 10
4.8 Zoning....................................................... 10
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4.9 Seller's Inventories......................................... 10
4.10 Seller's Property............................................ 11
4.11 Equipment.................................................... 11
4.12 Seller's Title............................................... 11
4.13 Benefit Plans................................................ 11
4.14 Employment Agreements........................................ 12
4.15 Employee's Claims............................................ 12
4.16 Labor Matters................................................ 12
4.17 Litigation................................................... 13
4.18 Insurance.................................................... 13
4.19 Contracts, Warranties and Equipment Leases................... 13
4.20 Permits and Other Operating Rights........................... 14
4.21 Compliance with Law.......................................... 14
4.22 Hazardous Materials.......................................... 14
4.23 Underground Storage Tanks.................................... 15
4.24 Environmental Reports........................................ 15
4.25 Seller's Compliance.......................................... 15
4.26 No Intention to Seek Protection From
Creditors.................................................... 16
4.27 Taxes........................................................ 16
4.28 Full and Truthful Disclosure................................. 16
ARTICLE 5 BUYER'S REPRESENTATIONS AND WARRANTIES....................... 16
5.1 Buyer's Corporate Status..................................... 16
5.2 Authorization; Etc........................................... 16
5.3 No Violation................................................. 17
5.4 Consents and Approvals of Government
Authorities.................................................. 17
ARTICLE 6 CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE.................. 17
6.1 Seller's Representations and Warranties are
True......................................................... 18
6.2 Seller has Performed......................................... 18
6.3 No Material Change........................................... 18
6.4 Seller's Certificate......................................... 18
6.5 No Legal Action Pending...................................... 18
6.6 Board Approval............................................... 18
6.7 Duly Authorized.............................................. 18
6.8 Necessary Consents........................................... 18
6.9 Delivery to Buyer............................................ 19
6.10 Assignment of Lease.......................................... 19
6.11 Associated Agreements........................................ 19
6.12 Xxxx-Xxxxx-Xxxxxx............................................ 19
6.13 Exhibits to be Delivered at Closing.......................... 19
6.14 Delaware Counsel Opinion..................................... 19
ARTICLE 7 CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE................. 19
7.1 Buyer's Representations and Warranties are
True......................................................... 19
7.2 Buyer has Performed.......................................... 19
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7.3 No Legal Action Pending...................................... 20
7.4 Board Approval............................................... 20
7.5 Buyer's Certificate.......................................... 20
7.6 Duly Authorized.............................................. 20
7.7 Necessary Consents........................................... 20
7.8 Delivery to Seller........................................... 20
7.9 Assignment of Lease.......................................... 20
7.10 Associated Agreements........................................ 20
7.11 Xxxx-Xxxxx-Xxxxxx............................................ 20
ARTICLE 8 THE CLOSING.................................................. 21
8.1 Closing Date................................................. 21
8.2 Seller's Delivery Items...................................... 21
8.3 Seller's Conveyance.......................................... 21
8.4 Seller's Assistance.......................................... 21
8.5 Buyer's Delivery............................................. 21
ARTICLE 9 SELLER'S OBLIGATIONS AFTER CLOSING........................... 22
9.1 Seller's Indemnity........................................... 22
9.2 Notification of Claims....................................... 22
9.3 Survival of Representations and Warranties................... 22
9.4 Limitations on Indemnification............................... 23
9.5 Limitations on Distributions After the
Closing...................................................... 23
9.6 Right of Offset.............................................. 23
ARTICLE 10 BUYER'S OBLIGATIONS AFTER CLOSING............................ 24
10.1 Buyer's Indemnity............................................ 24
ARTICLE 11 PUBLICITY.................................................... 24
11.1 Publicity.................................................... 24
ARTICLE 12 COSTS........................................................ 24
12.1 No Agencies.................................................. 24
12.2 Costs........................................................ 25
ARTICLE 13 FORM OF AGREEMENT............................................ 25
13.1 Headings..................................................... 25
13.2 Entire Agreement............................................. 25
13.3 Counterparts................................................. 25
ARTICLE 14 PARTIES IN INTEREST.......................................... 25
14.1 Third Parties................................................ 25
14.2 Assignment................................................... 26
ARTICLE 15 REMEDIES..................................................... 26
15.1 Arbitration.................................................. 26
15.2 Attorney's Fees.............................................. 26
15.3 Termination.................................................. 26
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ARTICLE 16 NOTICES...................................................... 27
ARTICLE 17 GOVERNING LAW................................................ 28
ARTICLE 18 SEVERABILITY................................................. 28
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AGREEMENT OF PURCHASE AND SALE OF ASSETS
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THIS ASSET PURCHASE AGREEMENT (the "Agreement") is entered into as of
November 7, 1996 at San Jose, California, between ORBIT SEMICONDUCTOR, INC., a
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Delaware corporation ("Buyer") and PARADIGM TECHNOLOGY, INC., a Delaware
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corporation ("Seller").
RECITALS:
A. Buyer desires to purchase from Seller and Seller desires to sell to
Buyer, on the terms and subject to the conditions of this Agreement, all the
Assets of Seller's Wafer Fab Operation as defined hereinafter below in exchange
for the cash and other consideration described herein below.
B. In consideration of the mutual covenants, agreements, representations
and warranties contained in this Agreement, the parties agree as follows:
ARTICLE 1
DEFINITIONS
As used herein, the terms set forth below shall have the meanings set forth
below:
1.1 "Assets." The term "Assets" shall mean all of the following:
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(a) All tangible items of equipment, fixtures and supplies of every kind,
character and description, whether real, personal or mixed, and wherever located
which are related to Seller's semiconductor wafer production business,
including, but without limitation, the following:
(i) All items listed on Exhibit A attached hereto and incorporated
herein by this reference, together with all connections, appurtenances, gas
lines, plumbing lines, sensing/monitoring systems, and all other items
involved in the operation of the Seller's Wafer Fab Operations (the
"Equipment"); and
(ii) All other supplies, raw materials, prepaid assets, work in
process, equipment, machinery, furniture, fixtures, motor vehicles;
(b) All Permits;
(c) The rights of Seller under all warranties and guaranties given by the
Equipment suppliers, contractors or others in connection with the Equipment or
Premises (the
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"Warranties"), which Warranties are described on Exhibit B attached hereto
and incorporated herein by this reference;
(d) The rights of Seller under all service, maintenance and other contracts
relating to the Assets (the "Contracts"), which Contracts are described on
Exhibit C attached hereto and incorporated herein by this reference, but only to
the extent that Buyer shall have accepted the assignment of all or any portion
of the Contracts (Exhibit C also indicates which, if any, of the Contracts Buyer
does not wish to accept);
(e) All of Seller's service records pertaining to the Equipment (the
"Service Records");
(f) All plans and specifications pertaining to the Equipment (the "Plans
and Specifications");
(g) All other files, information and records related to (i) the Fab
Employees (as defined in Section 2.13 hereof) who are hired by Buyer, (ii) the
Equipment or (iii) the Wafer Fab Operation;
(h) All blueprints, plans, drawings, floor plans, construction drawings,
site plans and any other written or electronically stored information regarding
the Premises; and
(i) All rights and benefits under personal property or real property leases
or other contracts for goods or services related to the Wafer Fab Operations.
1.2 "Wafer Fab Operation(s)." The term "Wafer Fab Operation(s)" shall mean
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all assets used and held for use in the semiconductor wafer fabrication
manufacturing facility operated by Seller, located at the Premises, except any
item specifically excluded in this Agreement.
1.3 "Hazardous Materials." The term "Hazardous Materials" shall include,
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but not be limited to, any substance, material or waste which is or becomes
regulated by any local governmental authority, the State of California, or the
United States of America, because of its toxic, flammable, corrosive, reactive
carcinogenic or other hazardous property, or which is now or hereafter defined
or listed as "hazardous substances," "hazardous materials," "toxic substances,"
"petroleum," "carcinogen," "asbestos," or "asbestos materials" in any federal,
state or local laws, rules or regulations (whether now existing or hereafter
enacted or promulgated) including, without limitation, the Federal Water
Pollution Control Act (33 U.S.C. xx.xx. 1251, et seq.) Hazardous Materials
Transportation Act (49 U.S.C. xx.xx. 1801, et seq.), Resource Conservation and
Recovery Act (42 U.S.C. xx.xx. 6901, et seq.), Safe Drinking Water Act (42
U.S.C. xx.xx. 3000(f), et seq.), Toxic Substances Control Act (15 U.S.C. xx.xx.
2601. et seq. Clean Air Act (42 U.S.C. xx.xx. 7401),
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Comprehensive Environmental Response, Compensation and Liability Act (42
U.S.C. xx.xx. 0000 xx xxx.), Xxxxxx Xxxxxx Department of Transportation
Hazardous Materials Table (49 CFR 172.101), California Health & Safety Code
(xx.xx. 25100, et seq., xx.xx. 25300, et seq., xx.xx. 39000, et seq.),
California Water Code (xx.xx. 13000, et seq.), California Labor Code ss. 6501.7
and ss. 9004, California Civil Code (ss. 2929.5), or any judicial or California
Civil Code (ss. 2929.5), or any judicial or administrative interpretation of
such laws, rules or regulations.
1.4 "Insurance Policies." The term "Insurance Policies" shall mean all
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insurance policies, certificates of insurance or other documents and instruments
evidencing all insurance policies issued in whole or part for the benefit of,
owned, held or formerly held by Seller covering the Assets, the Wafer Fab
Operation and/or the Premises.
1.5 "Permits." The term "Permits" shall mean all operating permits and
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licenses for the Wafer Fab Operations, which Permits include, without
limitation, those described on Exhibit D attached hereto and incorporated herein
by this reference.
1.6 "Premises." The term "Premises" shall mean that leased building and all
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that real property and improvements commonly known as 00 Xxxxx Xxxxxxx, Xxx
Xxxx, Xxxxxxxxxx, which is used as Seller's wafer fabrication facility (fab area
--cleanroom, fab peripheral area, and facility support-- pad area and cleanroom)
and as Seller's principal offices, and which is more particularly described,
without limitation, on Exhibit E attached hereto and incorporated herein by this
reference.
1.7 "CIT Loan." The term "CIT Loan" shall mean that existing obligation
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between Seller and the CIT Group/Equipment Financing Inc., a New York
corporation dated as of February 14, 1996, secured by Seller's Equipment, but
excluding certain items of test equipment and computer hardware which is not
necessary to the continued operation of Seller's Wafer Fab Operations and which
Seller has either paid for or otherwise arranged for the exclusion from this
loan (which equipment is described and listed in Exhibit F attached hereto and
incorporated herein by this reference).
1.8 "CIT Loan Adjusted Balance." The term "CIT Loan Adjusted Balance" shall
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mean the amount remaining unpaid on the CIT Loan after the excluded
non-essential test equipment included in Exhibit F has been paid off or
otherwise excluded as agreed between Buyer and Seller as of the Closing Date.
1.9 "Associated Agreements." The term "Associated Agreements" shall mean
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all those contracts, documents and instruments to be executed and delivered
under this Agreement.
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1.10 "Premises Lease." The term "Premises Lease" shall mean the lease
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entered into between the Seller and Sobrato Development Companies #871, a
California limited partnership ("Landlord") dated December 7, 1988.
ARTICLE 2
PURCHASE AND SALE OF ASSETS
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2.1 Buy and Sell. Subject to the terms and conditions set forth in this
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Agreement, Sellers agrees to sell, convey, transfer, assign, and deliver to
Buyer, and Buyer agrees to purchase from Seller, all the Assets.
2.2 Purchase Price. As full payment of the purchase price for the Assets
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(the "Purchase Price") for the transfer of the Assets to Buyer, Buyer shall
deliver at the Closing the following:
(a) The cash sum of SIX MILLION, SIX HUNDRED THOUSAND SIXTY-FIVE THOUSAND
DOLLARS ($6,665,000).
(b) Buyer's promissory note, dated as of the Closing Date, in the principal
amount of FOUR MILLION, EIGHT HUNDRED THOUSAND DOLLARS ($4,800,000) (the
"Promissory Note"), which note shall bear interest on the unpaid principal
balance at the annual rate of four percent (4%) shall be substantially in the
form of Exhibit G.
(c) Buyer's promissory note, dated as of the Closing Date, in the principal
amount of ONE MILLION DOLLARS ($1,000,000), in substantially the form of Exhibit
H.
(d) An assumption of the agreed CIT Loan Adjusted Balance due on Seller's
CIT Loan, estimated to be approximately SEVEN MILLION, FIVE HUNDRED THIRTY-FIVE
THOUSAND DOLLARS ($7,535,000); provided however, Seller shall be solely
responsible for any cost or expense including, without limitation, any transfer
or assignment fee required by CIT in connection therewith.
2.3 Payment of Purchase Price. Buyer shall pay to Seller the cash portion
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of the Purchase Price as described herein above in this Agreement in immediately
available funds at the Closing.
2.4 Allocation of Purchase Price. Buyer and Seller agree to negotiate in
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good faith concerning an allocation of the Purchase Price among the Assets, and
to establish such allocation no later than thirty (30) days after the Closing.
Buyer and Seller agree that all returns and reports made to the Internal Revenue
Service, the California State Franchise Tax Board, the California State Board of
Equalization or any other authority with respect to the purchase and sale of the
Assets
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shall be consistent with such allocation. Each of the parties agrees to
report this transaction for federal tax purposes substantially in accordance
with such allocation.
2.5 No Assumption of Liabilities. In no event shall Buyer assume or be
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liable for (or be deemed to have assumed or become liable for) or take the
Assets subject to (or be deemed to have taken the Assets subject to) any
obligations or liabilities of Seller of any kind, type or nature, whether known
or unknown, contingent or absolute, accrued or otherwise except for (a) the CIT
Loan and (b) Seller's obligations under the Contracts being assumed by Buyer, as
indicated on Exhibit C hereto (the "Assumed Contracts") arising from and after
the Closing. It is expressly understood and agreed that Buyer shall not be
liable for any of the obligations or liabilities of Seller of any kind and
nature except for (i) the CIT Loan and (ii) Seller's obligations under the
Assumed Contracts arising at or after the Closing. Notwithstanding any other
provision in this Agreement, the parties specifically agree that Buyer shall
have no liability with respect to the Assets or the Wafer Fab Operations,
including liability for claims or losses related to Seller's business prior to
the Closing Date and product liability or defect claims or losses or
environmental claims or losses, whether direct or indirect, tangible or
intangible, alleged or proven, together with any and all investigation, defense
and other handling loss, cost or expense, except for liabilities specifically
provided for herein. In addition to any other indemnity commitments of Seller,
Seller specifically agrees to indemnify and hold harmless Buyer from any and all
loss, cost or expense, including, without limitation, any and all investigation,
defense or other handling costs, related to liabilities or claims of liabilities
of Seller not specifically assumed by Buyer in this Agreement.
2.6 Buyer's Sales and Use Tax. Buyer shall pay sales and use taxes arising
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out of the transfer of the Assets. Buyer shall not be responsible for any
business, occupation, withholding, or similar tax, or any taxes of any kind
related to any period before the Closing Date.
2.7 Seller's Real and Personal Property Tax. Seller shall pay its portion,
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prorated as of the Closing Date, of current unpaid state and local real and
personal property taxes if any, of Seller's Wafer Fab Operation. The parties
also agree that utilities, rents and similar operating expenses shall also be
prorated as of the Closing Date.
2.8 Delivery of Title. At the Closing, Seller shall convey to Buyer good
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and marketable title to all of the Assets. In each case, title shall be conveyed
free and clear of any and all taxes, liens, charges, encumbrances, judgments,
obligations, security interests, liabilities or claims of any nature whatsoever
of any third party or parties. The conveyances shall be effected by means of:
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(a) a xxxx of sale ("Seller's Xxxx of Sale") executed by Seller in form
reasonably satisfactory to Buyer.
(b) an Assignment of Rights ("Seller's Assignment") executed by Seller and
Buyer in form reasonably acceptable to Buyer.
(c) an Assignment of Lease ("Lease Assignment") executed by Seller and
Landlord in form reasonably acceptable to Buyer and Seller.
2.9 Documents to be Delivered by Seller at the Closing. Seller shall
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deliver to Buyer the following documents at or prior to the Closing:
(a) The Seller's Xxxx of Sale duly executed by Seller.
(b) Seller's Assignment duly executed by Seller.
(c) The Lease Agreement duly executed by Seller and Landlord.
(d) Such other documents or instruments as may be reasonably necessary to
consummate the transactions contemplated herein.
2.10 Documents to be Delivered by Buyer at the Closing. Buyer shall deliver
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to Buyer at Closing such documents or instruments as may be reasonably necessary
to consummate the transactions contemplated herein.
2.11 Employees. At the Closing Seller shall, unless otherwise requested by
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Buyer, terminate all employees working in connection with Seller's Wafer Fab
Operation (the "Fab Employees") and thereafter, Buyer will give consideration to
the hiring of the Fab Employees. Buyer may, at Buyer's sole option, offer
employment to any, all or none of said Fab Employees. Seller shall use its best
efforts to assist Buyer in employing those Fab Employees as Buyer in its sole
discretion shall determine it wishes to employ after Seller has terminated its
employment of such employees. Buyer may in its sole discretion employ any Fab
Employees, which are described (as of October 7, 1996) on Exhibit I attached
hereto and incorporated by reference. Exhibit I also includes a list of
employees associated with the Wafer Fab Operations as of August 31, 1996. Seller
shall not hire any of the Fab Employees hired by Buyer for a period of at least
two (2) years after the Closing Date without Buyer's prior written permission.
The parties hereto specifically agree that Buyer shall have no liability
relating to the employment of the Fab Employees by Seller prior to the Closing
(all of which shall be the responsibility of Seller), including without
limitation (a) compensation and/or benefits paid or payable to the Fab Employees
in connection with their
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employment prior to the Closing and (b) any termination by Seller of any
Fab Employee.
2.12 Operating Permits and Claims Concerning the Assets. At the Closing,
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Seller shall, and hereby does, assign to Buyer (a) operating permits and
licenses relating to the Assets or the Wafer Fab Operations (to the extent
transferable, and Seller makes no representation or warranty that such permits
and licenses are transferable), and (b) all claims and rights of Seller with
respect to any unrepaired or unremedied damage to any part or all of the Assets
occurring prior to the Closing and which may be outstanding as of such date,
including, without limitation, claims against any insurance companies. Paradigm
will assist and cooperate, as required, with Buyer to transfer such operating
permits and licenses to Buyer.
2.13 Buyer's Expenses. Except as described herein, Buyer shall have no
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responsibility for any other expenses incurred in connection with the purchase
and sale of the Assets, or the transfer of the Wafer Fab Operations, including
but not limited to court costs, attorneys fees of Seller and any other expenses
associated with the purchase, sale and transfer of the Assets.
2.14 Seller's Premises Lease Assumption. At or prior to the Closing Date,
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Buyer and Landlord shall have entered into a new lease, assumption, or other
acceptable arrangement for Buyer's continued use of the Premises in place of
Seller's Premises Lease; provided however, the terms and conditions of such a
new lease must be satisfactory to Buyer in its sole discretion. Seller shall
have made a good faith effort to negotiate with the Landlord an assignment of
the Lease to Buyer to Buyer's reasonable satisfaction, and Buyer shall cooperate
fully with Seller in the negotiations for the new Lease. If appropriate, Seller
shall assign to Buyer any and all rights it had which are necessary in allowing
Buyer to commence a wafer fabrication operation on the same basis as Seller's
Wafer Fab Operation. Any transfer, termination, or assignment fee, or other cost
or expense related to the transfer of the use of the Premises from Seller to
Buyer shall be the Seller's sole responsibility.
2.15 Buyer's Continued Occupation of Part of the Premises. For a period of
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not more than six (6) months from the date of the Closing Seller will sublease
from Buyer on a month-to-month basis a portion of the Premises as agreed between
Buyer and Seller. Such sublease is for the purpose of facilitating Seller's
relocation of its remaining business operations. Buyer's sublease shall be
evidenced by a sublease agreement substantially in the form of Exhibit J (the
"Sublease").
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ARTICLE 3
WAFER PRODUCTION AND NOTE REDUCTION
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3.1 Buyer's Continuing Wafer Production. At the time of actual transfer of
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Seller's Wafer Fab Operations to Buyer, the Assets shall include normal
operating amounts (consistent with Seller's past operation) of raw materials and
other supplies sufficient to produce wafers in volumes at least equal to
Seller's past production.
3.2 Seller's Purchase Rights and Obligations. Seller shall purchase wafers
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from Buyer under and pursuant to the terms of a wafer manufacturing agreement
("WMA") to be entered into by Buyer and Seller as of the Closing Date,
substantially in the form of Exhibit K attached hereto.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
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Seller hereby represents and warrants to, and covenants with, Buyer that,
except as described on the Schedule of Exceptions attached as Exhibit L hereto,
the following matters are true as of the date hereof and shall be true and
correct as of the Closing Date:
4.1 Seller's Corporate Status. Seller is a corporation duly organized,
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validly existing, and in good standing under the laws of Delaware, has all
necessary corporate powers to own its properties and to carry on its business as
now owned and operated by it, and is duly qualified to do intrastate business
and is in good standing in the states of California, Georgia, Massachusetts and
Texas. These are the only jurisdictions in which the nature of Seller's business
or of its properties makes such qualification necessary except where the failure
to qualify to do business in a particular jurisdiction would not have a material
adverse effect on the business or operations of Seller.
4.2 Authorization; Etc.
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(a) Seller has the right, full power, legal capacity and authority to enter
into and perform this Agreement and the documents and instruments to be executed
and delivered hereunder (collectively, the "Associated Agreements") by Seller
and to carry out the transactions contemplated in this Agreement and the
Associated Agreements. Upon receipt of approval by the Board of Directors of
Seller, this Agreement and the Associated Agreements will be duly and validly
executed and delivered by Seller and will be valid and binding obligations of
Seller, enforceable against Seller in accordance with their terms, except as
enforcement may be limited by applicable bankruptcy,
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insolvency, reorganization, arrangement, moratorium or other similar laws
affecting creditors' rights, and subject to general equity principles and to
limitations on availability of equitable relief, including specific performance.
Any and all authorizations and approvals of the Board of Directors and
shareholders of Seller required by law or under Seller's Certificate of
Incorporation or Bylaws in connection with the execution, delivery and
performance of this Agreement and each of the Associated Agreements will be duly
obtained and remain in full force and effect at or prior to the Closing.
(b) Seller has the right, power, legal capacity, and authority to enter
into, and perform its obligations under, this Agreement, and no approvals or
consents of any persons other than Seller are necessary in connection with this
Agreement. The execution and delivery of this Agreement by Seller has been duly
authorized by all necessary corporate action on the party of Seller.
4.3 No Violation. Neither the execution and delivery of this Agreement by
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Seller nor the consummation by Seller of the transactions contemplated hereby
will:
(a) violate the Certificate of Incorporation or Bylaws of Seller;
(b) violate, or be in conflict with, or constitute a default (or an event
which, with or without due notice or lapse of time, or both, would constitute a
default) under, or cause or permit the acceleration of the maturity of, any
material debt, obligation, contract, commitment or other agreement to which
Seller is a party or any Assumed Contract;
(c) result in the creation or imposition of any mortgage, pledge, lien,
security interest, encumbrance, restriction or charge of any kind upon any of
the Assets; or
(d) violate any statute or law or any judgment, decree, order, regulation
or rule of any court or governmental authority by which Seller is bound.
4.4 Consents and Approvals of Government Authorities. No consent, approval
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or authorization of, or declaration, filing or registration with, any
governmental or regulatory authority is required on the part of Seller in
connection with the execution, delivery and performance of this Agreement or the
Associated Agreements by Seller and the consummation by Seller of the
transactions contemplated thereby, except: (a) the Xxxx-ScottRodino Antitrust
Improvements Act of 1976, as amended ("H-S-R"); and (b) consents to assignment
required in connection with the Assumed Contracts. Buyer shall pay for the H-S-R
filing fee required by the FTC, subject to reimbursement by Seller if the
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transfer of Assets contemplated by this Agreement does not for any reason
actually take place.
4.5 Material Changes in Seller's Financial Condition. Since June 30, 1996
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there has not been any:
(a) Increase in the salary or other compensation payable or to become
payable by Seller to any of the Fab Employees, or the declaration, payment, or
commitment or obligation of any kind for the payment, by Seller of a bonus or
other additional salary or compensation to any such person;
(b) Labor trouble or claim of wrongful discharge or other unlawful labor
practice or action with respect to the Fab Employees;
(c) Damage or destruction having a material adverse effect on the Assets or
the Wafer Fab Operations by fire, storm, or similar casualty, whether or not
covered by insurance; or
(d) Agreement by Seller to do any of the things described in the preceding
clauses (a) through (c).
4.6 Title to Assets; Encumbrances. At the Closing, Buyer will obtain good
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and marketable title to the Assets, free and clear of any and all taxes, liens,
charges, encumbrances, judgments, obligations, security interests, liabilities
or claims of any nature whatsoever of any third party or parties, except for
liens or security interests identified or disclosed in the Assumed Contracts.
4.7 Seller's Lease. Exhibit M to this Agreement is a complete and accurate
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legal description of the real property leased to Seller at 00 Xxxxx Xxxxxxx, Xxx
Xxxx, Xxxxxxxxxx. Exhibit M contains a description of all buildings, fixtures,
and other improvements located on such real property. The lease listed in
Exhibit M is valid and in full force, and there does not exist any material
default or event that with notice or lapse of time, or both, would constitute a
material default under this lease.
4.8 Zoning. The zoning of each parcel of property described in Exhibit M
------
permits the presently existing improvements and the continuation of the business
presently being conducted on such parcel. Seller has not commenced, nor has
Seller received notice of the commencement of, any proceeding that would affect
the present zoning classification of any such parcel.
4.9 Seller's Inventories.
--------------------
(a) The inventories of raw materials and work in process (collectively
called "Inventories") (included in Exhibit N)
-10-
consist of items of a quality and quantity usable and salable in the
ordinary course of business by Seller, except for obsolete and slow moving items
and items below standard quality, all of which have been written down on the
books of Seller to net realizable market value or have been provided for by
adequate reserves. All items included in the inventories are the property of
Seller. The Company's work in process as of the date of this Agreement is
sufficient in quantity to allow Buyer to avoid a material breach of its
obligations to deliver wafers to Seller in accordance with the WMA.
(b) No items are subject to security interest, except as set forth in
Exhibit O to this Agreement.
4.10 Seller's Property. Except as stated in Exhibit O, none of the Assets
-----------------
is held under any lease, security agreement, conditional sales contract, or
other title retention or security arrangement, or is located other than at the
Premises.
4.11 Equipment. All of the tangible Assets are in good operating condition
---------
and repair, normal wear and tear excepted.
4.12 Seller's Title. The Assets represent all of the assets that are used
--------------
in the Seller's Wafer Fab Operations. Seller is not in default or in arrears in
any material respect under any of the leases associated with the Assets. No
shareholder, officer, director, or employee of Seller; nor any spouse, child, or
other relative of any of these persons, owns, or has any interest, directly or
indirectly, in any of the Assets. Seller does not occupy any real property in
violation of any law, regulation, or decree.
4.13 Benefit Plans.
-------------
(a) Seller has never (i) maintained or participated in any plan
constituting an "employee pension benefit plan" for the Fab Employees or (ii)
contributed to any plan covering the Fab Employees which is a "multi-employer
plan" as defined in the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or the Internal Revenue Code of 1986, as amended, that
covers, or is required by applicable law to cover, Fab Employees.
(b) Seller does not maintain any plan to provide retirement benefits, or
fringe benefits to Fab Employees (collectively "Benefit Plans") which would be
binding upon Buyer after the Closing. Buyer shall have no liability with respect
to any Benefit Plan.
(c) No prior operator of the Wafer Fab Operations has maintained or
participated in any plan of the types described in subsections (a) or (b),
above.
-11-
(d) Seller has not taken any action that may result in Buyer being a party
to, or bound by, any defined benefit pension plan or defined contribution
pension plan qualified under Section 401(a) of the Internal Revenue Code ("ERISA
Plans"), and Buyer shall have no liability under, or be subject to any liability
on account of any ERISA Plan or any holiday, vacation or other bonus practice or
any other employee pay practice, arrangement, agreement or commitment of Seller
following the consummation of the transactions contemplated hereby.
4.14 Employment Agreements. Exhibit P to this agreement is a list of all
---------------------
employment contracts and collective bargaining agreements, and all pension,
bonus, profit-sharing, stock option, or other agreements or arrangements
providing for employee remuneration or benefits to which Seller is a party or by
which Seller is bound relating to the Fab Employees. All these contracts and
arrangements are in full force and effect, and neither Seller, nor any other
party is in default under them. There have been no claims of default and, there
are no facts or conditions that if continued, will result in a default under
these contracts or arrangements.
4.15 Employee's Claims. There is no pending or, threatened labor dispute,
-----------------
strike, or work stoppage affecting Seller's business. Seller has complied with
all applicable laws for its employee benefit plans, including the provisions of
ERISA if and to the extent applicable to the Fab Employees. There are no
threatened or pending claims by or on behalf of any such benefit plan, by or on
behalf of any Fab Employee covered under any such plan, or otherwise involving
any such benefit plan, that allege a breach of fiduciary duties or violation of
other applicable state or federal law, nor is there any basis for such a claim.
Seller has not entered into any severance or similar arrangement in respect of
any Fab Employee that will result in any obligation, absolute or contingent, of
Buyer to make any payment to any present or former employee following
termination of employment.
4.16 Labor Matters.
-------------
(a) There is no currently binding or effective union or collective
bargaining agreement covering any Fab Employees or any operations at the
Premises, nor are there any current negotiations for any such agreement.
(b) Seller is and has been in compliance in all material respects with all
applicable laws respecting employment and employment practices, terms and
conditions of employment and wages and hours and is not engaged in any unfair
labor practice, to the extent the same relate to the Fab Employees.
(c) There is no pending or, to Seller's knowledge, threat- ened claim or
litigation of any nature with respect to any Fab
-12-
Employees concerning any aspect of employment, employment conditions or
policies, compensation, termination of employment or similar matters.
4.17 Litigation.
----------
(a) There is no legal proceeding, claim, or action of any nature pending or
threatened, or, to Seller's knowledge, any basis for any such proceeding, claim
or action, which questions or challenges the validity of this Agreement, the
Associated Agreements or any action taken or to be taken by Seller pursuant to
this Agreement or the Associated Agreements or in connection with the
transactions contemplated thereby, or which would in any way affect Buyer's
ability to operate a business comparable to Seller's business after the Closing.
Seller is not charged with or threatened with a charge or violation of, or under
investigation with respect to a possible violation of, any provision of any
federal, state or local law or administrative ruling or regulation or executive
order relating to the Assets or the Wafer Fab Operations, and there is no basis
for any such charge or investigation.
(b) There is not pending, nor, to Seller's knowledge, threatened, any suit,
action, arbitration, or legal, administrative, or other proceeding, or
governmental investigation against or affecting Seller, or any of its
businesses, assets, or financial condition, which, if decided adversely to
Seller, will result in a material adverse change in the Wafer Fab Operations.
4.18 Insurance. Seller maintains (a) insurance on all of the Assets of a
---------
type customarily insured, covering property damage and loss of income by fire or
other casualty, and (b) adequate insurance protection against all liabilities,
claims, and risks relating to the Assets against which it is customary to insure
in reasonable amounts and levels. Exhibit Q to this Agreement is a description
of all such insurance policies. All these policies are in the respective
principal amounts set forth in Exhibit Q. Seller is not in default with respect
to payment of premiums on any such policy. Except as set forth in Exhibit Q, no
claim is pending under any such policy. All of Seller's insurance policies
relating to the Assets are occurrence-based (and not claims made) policies.
4.19 Contracts, Warranties and Equipment Leases.
------------------------------------------
(a) The Warranties and Contracts together constitute all instruments and
agreements affecting Seller's rights in and to the Equipment.
(b) Except for the Warranties and Contracts, there are no contracts and
agreements in effect relating to the Assets which will be binding upon Buyer
after the Closing or which would be necessary in order for Buyer to continue to
operate the Wafer
-13-
Fab Operations after the Closing on a substantially similar basis to
Seller's operations prior to the Closing.
(c) True and correct copies of each of the Warranties, Contracts and
Equipment Leases and all modifications and amendments thereto have been
delivered to Buyer by Seller.
(d) The Contracts and Warranties are valid, binding and enforceable in
accordance with their terms except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar
laws affecting creditors' rights, and subject to general equity principles and
to limitations on availability of equitable relief, including specific
performance, and are in full force and effect and there are no existing material
defaults by Seller or any other parties under any of the Contracts and
Warranties.
4.20 Permits and Other Operating Rights. All consents, variances, permits
----------------------------------
and similar rights relating to the use of the Equipment have been obtained.
Seller shall reimburse Buyer, promptly on demand, for any penalties or fines
arising out of Seller's failure to maintain in force, through the date of the
Closing, all permits necessary in connection with the operation of the
Equipment, including, without limitation, any permits required by any federal,
state, regional or local agencies.
4.21 Compliance with Law.
-------------------
(a) Seller has complied, and is currently in compliance, in all material
respects with all laws, regulations, permits, authorizations and other
governmental orders applicable to the Assets, including, without limitation, the
Americans with Disability Act, applicable safety (OSHA), environmental,
antipollution, building, zoning or health laws, ordinances and regulations.
(b) Seller has complied with, is not in violation of, any applicable
federal, state, or local statute, law, or regulation (including, without
limitation, any applicable building, zoning, environmental protection, or other
law, ordinance, or regulation) affecting the Assets.
(c) Seller has not received notice of any violation of any applicable
federal, state, or local statute, law, or regulation (including, without
limitation, any applicable building, zoning, environmental protection, or other
law, ordinance, or regulation) affecting the Assets.
4.22 Hazardous Materials. Except as permitted by applicable law, no
-------------------
Hazardous Materials are being or have been generated, stored or otherwise used
or held on, under or about all or any portion of the Property, or transported
to, from or across all or any portion of the Property, by or with the
-14-
permission of Seller or, to the best of Seller's knowledge, by any other
person or entity. Except as permitted by applicable law, Seller has not, and, to
the best of Seller's knowledge, no other person or entity has, released or
permitted the release or continuation of a release of any Hazardous Materials
on, under or about the Property or any portion thereof. No portion of the
Property is within two thousand (2,000) feet of a Hazardous Materials problem,
or is otherwise subject to any "borderzone" legislation or other restrictions on
construction, sale or occupancy on or of the Property, or any portion thereof,
under any environmental protection laws.
4.23 Underground Storage Tanks. There is not now nor has there ever been
-------------------------
any underground storage tanks on, under or about the Premises and there are no
underground storage tanks located on the Premises in which any Hazardous
Material, as defined below, has been in the past or is now being stored, nor has
there been any spill, disposal, discharge, or release of any Hazardous Material
into, upon, from, or over that real property or into or upon ground or surface
water on that real property. There are no asbestos-containing materials
incorporated into the buildings or interior improvements that are part of that
real property, or into other assets of Seller, nor is there any electrical
transformer, fluorescent light fixture with ballasts, or other equipment
containing PCBs on that real property.
4.24 Environmental Reports. Attached hereto as Exhibit R is a complete and
---------------------
accurate list of all environmental reports and opinions that have been issued
with respect to the Property and the Premises (the "Environmental Reports"), and
that are in Seller's possession, custody or control or within Seller's
knowledge, including names and addresses of all engineers, consultants and
experts who have inspected the Property and the Premises for hazardous or toxic
substances.
4.25 Seller's Compliance.
-------------------
(a) Seller has complied and is in compliance in all material respects with
all federal, state, and local environmental protection laws and regulations and
has not been cited for any violation of any such law or regulation. No material
capital expenditures are required now for compliance with any applicable
federal, state, or local laws or regulations relating to the protection of the
environment in effect as of the date hereof or which any federal, state or local
governmental authority has announced will take effect by a date certain in the
future. There is no pending audit known to Seller or any of its officers by any
federal, state, or local governmental authority with respect to groundwater,
soil, or air monitoring; the storage, burial, release, transportation, or
disposal of hazardous substances; or the use of underground storage tanks by
Seller or relating to the facilities of Seller. Seller has not made any
agreement with any third party or federal, state, or local
-15-
governmental authority relating to any such environmental matter or any
environmental cleanup.
(b) Seller has complied with all requirements of the Occupational Safety
and Health Act and its California equivalents and regulations promulgated under
any such legislation, the consequences of a violation of which could have a
material adverse effect on their operations, and with all orders, judgments, and
decrees of any tribunal under such legislation that apply to its business or
properties.
4.26 No Intention to Seek Protection From Creditors. Seller has no current
----------------------------------------------
intention to file for bankruptcy under the federal Bankruptcy Code, or to seek
protection from creditors under any similar federal or state law.
4.27 Taxes. Within the times and in the manner prescribed by law, Seller
-----
has duly filed all federal, state and local tax returns required by applicable
law and has paid all taxes, assessments and penalties due and payable under
applicable law.
4.28 Full and Truthful Disclosure. None of the representations and
----------------------------
warranties made by Seller, or made in any certificate or memorandum furnished or
to be furnished by it or on its behalf, contains or will contain any untrue
statement of a material fact, or omits to state a material fact necessary to
make the statements made, in the light of the circumstances under which they
were made, not misleading.
ARTICLE 5
BUYER'S REPRESENTATIONS AND WARRANTIES
--------------------------------------
Buyer represents and warrants that:
5.1 Buyer's Corporate Status. Buyer is a corporation duly organized,
------------------------
validly existing, and is in good standing under the laws of Delaware.
5.2 Authorization; Etc.
-------------------
(a) Buyer has the right, full power, legal capacity and authority to enter
into and perform this Agreement and the documents and instruments to be executed
and delivered hereunder (collectively, the "Associated Agreements") by Buyer and
to carry out the transactions contemplated in this Agreement and the Associated
Agreements. Upon receipt of approval by the board of directors of Buyer, this
Agreement and the Associated Agreements will be duly and validly executed and
delivered by Buyer and will be valid and binding obligations of Buyer,
enforceable against Buyer in accordance with their terms, except as enforcement
may be limited by applicable bankruptcy,
-16-
insolvency, reorganization, arrangement, moratorium or other similar laws
affecting creditors' rights, and subject to general equity principles and to
limitations on availability of equitable relief, including specific performance.
Any and all authorizations and approvals of the Board of Directors and
shareholders of Buyer required by law or under Buyer's Certificate of
Incorporation or Bylaws in connection with the execution, delivery and
performance of this Agreement and each of the Associated Agreements will be duly
obtained at or prior to the Closing.
(b) Buyer has the right, power, legal capacity, and authority to enter
into, and perform its obligations under, this Agreement, and no approvals or
consents of any persons other than Buyer are necessary in connection with this
Agreement. The execution and delivery of this Agreement by Buyer has been duly
authorized by all necessary corporate action on the party of Buyer.
5.3 No Violation. Neither the execution and delivery of this Agreement by
------------
Seller nor the consummation by Seller of the transactions contemplated hereby
will:
(a) violate the Certificate of Incorporation or Bylaws of Buyer;
(b) violate, or be in conflict with, or constitute a default (or an event
which, with or without due notice or lapse of time, or both, would constitute a
default) under, or cause or permit the acceleration of the maturity of, any
material debt, obligation, contract, commitment or other agreement to which
Buyer is a party except for approval of Buyer's lenders; or
(c) violate any statute or law or any judgment, decree, order, regulation
or rule of any court or governmental authority by which Buyer is bound.
5.4 Consents and Approvals of Government Authorities. No consent, approval
------------------------------------------------
or authorization of, or declaration, filing or registration with, any
governmental or regulatory authority is required on the part of Buyer in
connection with the execution, delivery and performance of this Agreement or the
Associated Agreements by Buyer and the consummation by Buyer of the transactions
contemplated thereby, except under the Xxxx-ScottRodino Antitrust Improvements
Act of 1976, as amended ("H-S-R").
ARTICLE 6
CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE
-------------------------------------------
The obligations of Buyer to purchase the Assets under this Agreement are
subject to the satisfaction, at or before the
-17-
Closing, of all the conditions set our below in this Article 6. Buyer may
waive any or all of these conditions in whole or in part without prior notice;
provided, however, that no such waiver of a condition shall constitute a waiver
by Buyer of any of its other rights or remedies, at law or in equity.
6.1 Seller's Representations and Warranties are True. Except as otherwise
------------------------------------------------
permitted by this Agreement, all representations and warranties by the Seller in
this Agreement, or in any written statement that shall be delivered to Buyer
under this Agreement, shall be true in all material respects on and as of the
Closing Date as though made at that time.
6.2 Seller has Performed. Seller shall have performed, satisfied, and
--------------------
complied in all material respects with all covenants, agreements, and conditions
required by this Agreement to be performed or complied with by it, on or before
the Closing Date.
6.3 No Material Change. During the period from June 30, 1996 to the Closing
------------------
Date, there shall not have been any material adverse change in the Assets.
6.4 Seller's Certificate. Buyer shall have received a certificate, dated
--------------------
the Closing Date, signed and verified by Seller's president and its chief
financial officer, certifying, in such detail as Buyer and its counsel may
reasonably request, that the conditions specified in Sections 6.1, 6.2 and 6.3
have been fulfilled.
6.5 No Legal Action Pending. No action, suit, or proceeding before any
-----------------------
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened on or before the Closing Date.
6.6 Board Approval. The Board of Directors of Buyer shall have duly
--------------
authorized and approved the execution and delivery of this agreement and
all corporate action necessary or proper to fulfill Buyer's obligations to be
performed under this agreement on or before the Closing Date.
6.7 Duly Authorized. The execution and delivery of this Agreement by
---------------
Seller, and the performance of its covenants and obligations under it,
shall have been duly authorized by all necessary corporate action, and Buyer
shall have received copies of all resolutions pertaining to that authorization,
certified by the Secretary of Seller.
6.8 Necessary Consents. All necessary agreements and consents of any
------------------
parties to the consummation of the transactions contemplated by this
Agreement, or otherwise pertaining to the matters covered by it, shall have been
obtained by Seller and
-18-
delivered to Buyer. In addition, the consent of Buyer's lenders to the
transactions contemplated by this Agreement shall have been obtained by Buyer.
6.9 Delivery to Buyer. The form and substance of all certificates,
-----------------
instruments, opinions and other documents delivered to Buyer under this
Agreement shall be satisfactory in all reasonable respects to Buyer and its
counsel.
6.10 Assignment of Lease. The Premises Lease shall have been assigned from
-------------------
Seller to Buyer pursuant to a writing containing terms and conditions reasonably
acceptable to Buyer.
6.11 Associated Agreements. The WMA shall have been executed in
---------------------
substantially the form attached to this Agreement.
6.12 Xxxx-Xxxxx-Xxxxxx. Any waiting period applicable to the consummation
-----------------
of the transactions contemplated by this Agreement under H-S-R shall have
expired or been terminated.
6.13 Exhibits to be Delivered at Closing. Seller shall have delivered to
-----------------------------------
Buyer Exhibit S, containing a description of any prepaid assets contained in the
Assets, or shall have indicated in writing that no such prepaid assets exist.
6.14 Delaware Counsel Opinion. Seller shall have provided to Buyer a copy
------------------------
of an opinion of Delaware counsel to Seller to the effect that shareholder
approval of the transactions contemplated by this Agreement is not required.
ARTICLE 7
CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE
--------------------------------------------
The obligations of Seller to sell and transfer the Assets under this
Agreement are subject to the satisfaction, at or before the Closing, of all the
following conditions. Seller may waive any or all of these conditions in whole
or in part without prior notice; provided, however, that no such waiver of a
condition shall constitute a waiver by Seller of any of its other rights or
remedies, at law or in equity.
7.1 Buyer's Representations and Warranties are True. All representations
-----------------------------------------------
and warranties by Buyer contained in this Agreement or in any written statement
delivered by Buyer under this Agreement shall be true on and as of the Closing
Date as though such representations and warranties were made on and as of that
date.
7.2 Buyer has Performed. Buyer shall have performed and complied with all
-------------------
covenants and agreements and satisfied all
-19-
conditions that is required by this Agreement to perform, comply with, or
satisfy, before or at the Closing.
7.3 No Legal Action Pending. No action, suit, or proceeding before any
-----------------------
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened on or before the Closing Date.
7.4 Board Approval. The Board of Directors of Seller shall have duly
--------------
authorized and approved the execution and delivery of this agreement and all
corporate action necessary or proper to fulfill Seller's obligations to be
performed under this agreement on or before the Closing Date.
7.5 Buyer's Certificate. Seller shall have received a certificate, dated
-------------------
the Closing Date, signed and verified by Buyer's chief executive officer and its
chief financial officer, certifying, in such detail as Seller and its counsel
may reasonably request, that the conditions specified in Sections 7.1, 7.2, 7.3
and 7.4 have been fulfilled.
7.6 Duly Authorized. The execution and delivery of this Agreement by Buyer,
---------------
and the performance of its covenants and obligations under it, shall have been
duly authorized by all necessary corporate action, and Seller shall have
received copies of all resolutions pertaining to that authorization, certified
by the Secretary of Buyer.
7.7 Necessary Consents. All necessary agreements and consents of any
------------------
parties to the consummation of the transactions contemplated by this Agreement,
or otherwise pertaining to the matters covered by it, shall have been obtained
by Buyer and delivered to Seller.
7.8 Delivery to Seller. The form and substance of all certificates,
------------------
instruments, opinions and other documents delivered to Seller under this
Agreement shall be satisfactory in all reasonable respects to Seller and its
counsel.
7.9 Assignment of Lease. The Premises Lease shall have been assigned from
-------------------
Seller to Buyer pursuant to a writing containing terms and conditions reasonably
acceptable to Buyer.
7.10 Associated Agreements. The WMA shall have been executed in
---------------------
substantially the forms attached to this Agreement, and the sublease of the
Premises shall have been executed as provided in Exhibit K.
7.11 Xxxx-Xxxxx-Xxxxxx. Any waiting period applicable to the consummation
-----------------
of the transactions contemplated by this Agreement under H-S-R shall have
expired or been terminated.
-20-
ARTICLE 8
THE CLOSING
-----------
8.1 Closing Date. The transfer of the Assets by Seller to Buyer (the
------------
"Closing") shall take place at the offices of Pillsbury Madison & Sutro LLP,
0000 Xxxx Xxxx Xxxx, Xxxxx Xxxx, XX 00000 as soon as practicable after the
satisfaction of the conditions to closing described herein, but in no event
later than November 30, 1996 (the "Closing Date").
8.2 Seller's Delivery Items. At the Closing, Seller shall deliver or cause
-----------------------
to be delivered to Buyer:
(a) Assignments of all leaseholds, properly executed and acknowledged by
Seller, and accompanied by all consents of lessors required by this Agreement
and the leases being assigned; and
(b) Instruments of assignment and transfer of all Assets or other property
of Seller related to its Wafer Fab Production of every kind and description and
wherever situated, including, but not limited to, all its interest in the
Equipment, chooses in action, rights under agreements and other property,
tangible or intangible, except as expressly excluded in an exhibit to this
Agreement.
8.3 Seller's Conveyance. Simultaneously with the consummation of the
-------------------
transfer, Seller, through its officers, agents, and employees, will put Buyer
into full possession and enjoyment of all properties and assets to be conveyed
and transferred by this Agreement.
8.4 Seller's Assistance. Seller, at any time before or after the Closing
-------------------
Date, will execute, acknowledge, and deliver any further assignments,
conveyances, and other assurances, documents, and instruments of transfer,
reasonably requested by Buyer, and will take any other action consistent with
the terms of this Agreement that may reasonably be requested by Buyer for the
purpose of assigning, transferring, granting, conveying, and confirming to
Buyer, or reducing to possession, any or all property to be conveyed and
transferred under this Agreement. If requested by Buyer, Seller further agrees
to prosecute or otherwise enforce in its own name for the benefit of Buyer any
claims, rights, or benefits that are transferred to Buyer under this Agreement
and that require prosecution or enforcement in Seller's name.
8.5 Buyer's Delivery. At the Closing, Buyer shall deliver to Seller the
----------------
following consideration, instruments and documents:
-21-
(a) Good funds in the amount of $6,665,000 and Buyer's promissory notes
dated the Closing Date, in the principal amount of $4,800,000 in the form of
Exhibit G and $1,000,000 in the form of Exhibit H; and
(b) Instruments of assumption or release of the liabilities of Seller under
Seller's Premises Lease and the CIT Loan.
ARTICLE 9
SELLER'S OBLIGATIONS AFTER CLOSING
----------------------------------
9.1 Seller's Indemnity. Seller shall indemnify, defend, and hold harmless
------------------
Buyer against and in respect to any and all claims, demands, losses, costs,
expenses, obligations, liabilities, damages, recoveries, and deficiencies,
including interest, penalties, and reasonable attorneys' fees, (collectively
referred to herein as "Losses") that Buyer shall incur or suffer, that arise,
result from, or relate to: (i) any breach of, or failure by Seller to perform,
any of its representations, warranties, covenants, or agreements whether
contained in this Agreement or in any schedule, certificate, exhibit, or other
instrument furnished or to be furnished by Seller; or (ii) operations,
activities or other conduct of Seller prior to the Closing Date.
9.2 Notification of Claims. Buyer shall promptly notify Seller of the
----------------------
existence of any claim, demand, or other matter to which Seller's
indemnification obligations would apply, and (in the event of a third party
claim) shall give Seller a reasonable opportunity to defend the same at Seller's
own expense and with counsel of its own selection; provided that Buyer shall at
all times also have the right to fully participate in the defense. If Seller
shall, within fifteen (15) days after this notice, fail to defend a third party
claim, Buyer shall have the right, but not the obligation, to undertake the
defense of, and to compromise or settle (with the consent of Seller, which will
not be unreasonably withheld), the claim or other matter on behalf, for the
account, expense and at the risk, of Seller. If the claim is one that cannot by
its nature be defended solely by Seller (including, without limitation, any
federal or state tax proceeding), then Buyer shall make available all
information and assistance that Seller may reasonably request. Nothing herein
shall be deemed to prevent Buyer from making a contingent claim for
indemnification hereunder, provided Buyer has reasonable grounds to believe that
the claim or demand for indemnification will be made and sets forth the
estimated amount of such claim to the extent then ascertainable.
9.3 Survival of Representations and Warranties. All representations and
------------------------------------------
warranties in this Agreement and any other
-22-
certificate or document delivered pursuant to this Agreement will survive
the Closing for a period of twelve (12) months after the Closing Date except for
any representations relating to taxes which shall survive until the expiration
of applicable statute of limitations periods. No representations or warranties
whatever are made by any party, except as specifically set forth in this
Agreement, or in an instrument, certificate, opinion, or other writing provided
for in this Agreement. All statements contained in any of these instruments,
certificates or other writings shall be deemed to be representations and
warranties under this Agreement. The representations, warranties and indemnities
made by the parties in this Agreement or in instruments, certificates, opinions,
or other writings provided for in the covenants and agreements to be performed
or complied with by the respective parties under it before the Closing Date,
shall be deemed to be continuing and shall survive the Closing to the extent
provided herein. Nothing in this paragraph shall affect the obligations and
indemnities of the parties with respect to the covenants and agreements
contained in this Agreement that are permitted to be performed, in whole or in
part, after the Closing Date.
9.4 Limitations on Indemnification.
------------------------------
(a) Seller will have no liability for indemnification under this Article 9
until the total of all Losses exceeds $50,000, and then only for the amount by
which such Losses exceed $50,000. The limitation of this Section 9.4(a) shall
not be applicable to any Losses relating to environmental claims, demands and
matters.
(b) Seller will have no liability for indemnification under this Article 9
for Losses in excess of four million dollars ($4,000,000).
(c) The amount of any Losses shall be reduced by the amount, if any of the
recovery (net of reasonable expenses incurred in obtaining such recovery) which
Buyer shall have received with respect thereto from any other party, person or
entity, including an insurer of the Buyer (and no right of subrogation shall
accrue to any insurer hereunder).
9.5 Limitations on Distributions After the Closing. Seller covenants and
----------------------------------------------
agrees with Buyer that, for a period of twelve (12) months after the Closing, it
will not distribute any assets to its stockholders if such distribution would
(a) cause Seller to have net assets of $4,000,000 or less, or (b) would
otherwise cause Seller to be unable to satisfy indemnification obligations of up
to $4,000,000 under Article 9 of this Agreement.
9.6 Right of Offset. Buyer shall have the right to offset any amounts for
---------------
which it shall be entitled to indemnification
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pursuant to this Agreement against any payments due under the $1,000,000
promissory note of Buyer delivered to Seller pursuant to Section 2.2(c) of this
Agreement, as provided in such promissory note.
ARTICLE 10
BUYER'S OBLIGATIONS AFTER CLOSING
---------------------------------
10.1 Buyer's Indemnity. Buyer agrees to indemnify, defend and hold harmless
-----------------
Seller against, and in respect of, any and all Losses that Seller shall incur or
suffer, that arise, result from, or relate to: (a) any breach of, or failure by
Buyer to perform, any of its representations, warranties, covenants, or
agreements, whether contained in this Agreement or in any schedule, certificate,
exhibit, or other instrument furnished or to be furnished by Buyer; or (b) the
operations, activities or other conduct of Buyer (with respect to the Assets or
otherwise) after the Closing Date. Nothing herein shall be deemed to prevent
Buyer from making a contingent claim for indemnification hereunder, provided
Buyer has reasonable grounds to believe that the claim or demand for
indemnification will be made and sets forth the estimated amount of such claim
to the extent then ascertainable.
ARTICLE 11
PUBLICITY
---------
11.1 Publicity. Except as required by applicable regulations of the
---------
Securities and Exchange Commission or other applicable law, neither Buyer nor
Seller shall make any press release or otherwise publicize or disclose the
transactions contemplated by this Agreement to any third party without the
consent of the other party, which will not be unreasonably withheld.
ARTICLE 12
COSTS
-----
12.1 No Agencies. Except for Seller's agreement with Bentley Hall Xxx Xxxx
-----------
International (which shall be the responsibility of Seller), each party
represents and warrants that it has dealt with no broker or finder in connection
with any transaction contemplated by this agreement, and, as far as it knows, no
broker or other person is entitled to any commission or finder's fee in
connection with any of these transactions. Buyer agrees to indemnify and hold
harmless Seller against any loss, liability, damage, cost, claim, or expense
incurred by
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reason of any brokerage, commission, or finder's fee alleged to be payable
because of any act, omission, or statement of Buyer. Seller agrees to indemnify
and hold harmless Buyer against any loss, liability, damage, cost, claim, or
expense incurred by reason of any brokerage, commission, or finder's fee alleged
to be payable because of any act, omission, or statement of Seller.
12.2 Costs. Each party shall pay all costs and expenses incurred or to be
-----
incurred by it in negotiating and preparing this Agreement and in closing and
carrying out the transactions contemplated by this Agreement.
ARTICLE 13
FORM OF AGREEMENT
-----------------
13.1 Headings. The subject headings of the articles, paragraphs and
--------
subparagraphs of this Agreement are included for convenience only and shall not
affect the construction or interpretation of any of its provisions.
13.2 Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the parties pertaining to the subject matter contained in its and
supersedes all prior and contemporaneous agreements, representations, and
understandings of the parties. No supplement, modification, or amendment of this
Agreement shall be binding unless executed in writing by all the parties. No
waiver of any of the provisions of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision, whether or not similar, nor shall
any waiver constitute a continuing waiver. No waiver shall be binding unless
executed in writing by the party making the waiver.
13.3 Counterparts. This Agreement may be executed simultaneously in one or
------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
ARTICLE 14
PARTIES IN INTEREST
-------------------
14.1 Third Parties. Nothing in this Agreement, whether express or implied,
-------------
is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties to it and their respective
successors and assigns, nor is anything in this Agreement intended to relieve or
discharge the obligation or liability of any third persons to any party to this
Agreement, nor shall any provision give any third persons any right of
subrogation or action over against any party to this Agreement.
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14.2 Assignment. This Agreement shall be binding on, and shall inure to the
----------
benefit of, the parties to it and their respective heirs, legal representatives,
successors, and assigns. Buyer may assign any of its rights under this
Agreement, provided Buyer's assignee agrees to assume Buyer's obligations or
duties under this Agreement.
ARTICLE 15
REMEDIES
--------
15.1 Arbitration. Any controversy or claim arising out of, or relating to,
-----------
this Agreement, or the making, performance, or interpretation of it, shall be
settled by arbitration in San Jose, California under the commercial arbitration
rules of the American Arbitration Association then existing, and judgment on the
arbitration award may be entered in any court having jurisdiction over the
subject matter of the controversy. Arbitrators shall be persons experienced in
negotiating, making, and consummating acquisition agreements.
15.2 Attorney's Fees. If any legal action or any arbitration or other
---------------
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default, or misrepresentation in connection with any of
the provisions of this agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees and other costs incurred in that
action or proceeding, in addition to any other relief to which it or they may be
entitled.
15.3 Termination.
-----------
(a) This Agreement may be terminated:
(i) by the mutual consent of Seller and Buyer;
(ii) by Seller or Buyer if the Closing has not taken place on or
before November 30, 1996; provided, however, that no party then in breach
of any of its obligations hereunder shall have the right to terminate;
(iii) by Buyer upon notice to Seller if any of the conditions set
forth in Article 6 hereof become impossible to satisfy (other than by
reason of the failure of Buyer to fulfill its obligations under this
Agreement); and
(iv) by Seller upon notice to Buyer if any of the conditions set forth
in Article 7 hereof become impossible to satisfy (other than by reason of
the
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failure of Seller to fulfill its obligations under this Agreement).
(b) If this Agreement is terminated for any reason pursuant to this Section
15.3, each party shall return to the other party all documents and copies
thereof which shall have been furnished to it by such other party or, with the
agreement of the other party, shall destroy all such documents and copies
thereof and certify in writing to the other party any such destruction.
(c) If this Agreement is terminated by Seller or Buyer as permitted under
paragraph (a) of this Section 15.3 and not as a result of a breach of a
representation or warranty or the failure of any party to perform its
obligations hereunder, such termination shall be without liability of any party.
If a party terminates this Agreement as a result of a breach of a representation
or warranty by the other party or the failure of the other party to perform its
obligations hereunder, the nonbreaching party, in addition to any other legal
remedies that may be available, shall be entitled to reimbursement from the
breaching party for all expenses incurred by the nonbreaching party in
connection with this Agreement and the transactions contemplated hereby.
ARTICLE 16
NOTICES
-------
All notices, requests, demands, and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given on the
date of service if served personally on the party to whom notice is to be given,
or on the third day after mailing if mailed to the party to whom notice is to be
given, by first class mail, registered or certified, postage prepaid, and
properly addressed as follows:
To Seller at: 00 Xxxxx Xxxxxxx
Xxx Xxxx, XX 00000
Attn: President
To Seller's Counsel at: Pillsbury Madison & Sutro LLP
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxxx del Xxxxx
To Buyer at: Orbit Semiconductor, Inc.
000 Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Chief Executive Officer
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To Buyer's Counsel at: Xxxxxx Godward LLP
0000 Xxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx
Any party may change its address for purposes of this paragraph by giving
the other parties written notice of the new address in the manner set forth
above.
ARTICLE 17
GOVERNING LAW
-------------
This Agreement shall be construed in accordance with, and governed by, the
laws of the State of California as applied to contracts that are executed and
performed entirely in California.
ARTICLE 18
SEVERABILITY
------------
If any provision of this Agreement is held invalid or unenforceable by any
court of final jurisdiction, it is the intent of the parties that all other
provisions of this Agreement be construed to remain fully valid, enforceable,
and binding on the parties.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed it on
the day and year first above written.
PARADIGM TECHNOLOGY, INC.
By /s/ Xxxxxxx Xxxxxx
-------------------------------------
Title President, CEO
----------------------------------
ORBIT SEMICONDUCTOR, INC.
By /s/ Xxxx X. Xxxxxxx
-------------------------------------
Title President
----------------------------------
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