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EXHIBIT 10.30
STOCK PURCHASE AGREEMENT
By and Among
DIODES INCORPORATED,
LITE-ON POWER SEMICONDUCTOR CORP.
and
FABTECH, INC.
November 28, 2000
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TABLE OF CONTENTS
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ARTICLE I. PURCHASE AND SALE OF SHARES........................................................................7
1.1 Purchase and Sale of Shares.........................................................................7
1.2 Purchase Price......................................................................................7
1.3 Payment of Purchase Price...........................................................................7
1.4 Closing............................................................................................10
1.5 Closing Deadline...................................................................................10
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF SELLER.........................................................10
2.1 Due Formation......................................................................................10
2.2 Shares.............................................................................................10
2.3 Title to Shares....................................................................................11
2.4 Certificate of Incorporation and Bylaws............................................................11
2.5 Subsidiaries.......................................................................................11
2.6 Authority..........................................................................................11
2.7 No Violation of Law and Agreements.................................................................12
2.8 Financial Statements...............................................................................12
2.9 No Undisclosed Liabilities.........................................................................13
2.10 Absence of Certain Changes.........................................................................13
2.11 Tax Returns and Payments...........................................................................14
2.12 Compliance with Laws...............................................................................16
2.13 Contracts and Other Agreements.....................................................................16
2.14 Real Estate........................................................................................18
2.15 Environmental Matters..............................................................................20
2.16 Intellectual Property and Computer Software........................................................23
2.17 Title to Properties, Absence of Liens and Encumbrances.............................................25
2.18 Permits............................................................................................25
2.19 Labor and Employment Matters.......................................................................25
2.20 Employee Benefits Plans............................................................................26
2.21 Litigation.........................................................................................29
2.22 Insurance..........................................................................................29
2.23 Officers, Directors and Key Employees..............................................................29
2.24 Conditions of Tangible Assets and Inventories......................................................30
2.25 Bank Accounts......................................................................................30
2.26 Powers of Attorney; Guarantees.....................................................................30
2.27 Relations with Suppliers...........................................................................30
2.28 Relations with Customers...........................................................................31
2.29 Accounts Receivables...............................................................................31
2.30 Transactions with Affiliates.......................................................................31
2.31 Data Processing....................................................................................31
2.32 Brokerage..........................................................................................32
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2.33 Accuracy of Representations........................................................................32
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF BUYER.........................................................32
3.1 Organization and Standing..........................................................................32
3.2 Authority..........................................................................................32
3.3 No Violation of Law and Agreements.................................................................33
3.4 Brokerage..........................................................................................33
ARTICLE IV. COVENANTS AND AGREEMENTS OF SELLER AND COMPANY...................................................33
4.1 Conduct of Business................................................................................33
4.2 Efforts to Close...................................................................................33
4.3 Continued Effectiveness of Representations and Warranties of Seller................................34
4.4 Corporate Examinations and Investigations..........................................................34
4.5 Assignment of Leaseholds...........................................................................34
4.6 Insurance..........................................................................................35
4.7 Cooperation........................................................................................35
4.8 WARN Act...........................................................................................35
4.9 Expenses...........................................................................................35
4.10 Further Assurances.................................................................................35
4.11 Hart-Scott-Rodino..................................................................................35
4.12 No Solicitation of Transactions....................................................................36
4.13 Noncompetition.....................................................................................36
4.14 Inventory and Accounts Receivable..................................................................37
4.15 Indebtedness.......................................................................................37
ARTICLE V. COVENANTS AND AGREEMENTS OF BUYER.................................................................37
5.1 Efforts to Close...................................................................................37
5.2 Expenses...........................................................................................37
5.3 Further Assurances.................................................................................38
5.4 Hart-Scott-Rodino..................................................................................38
ARTICLE VI. CONDITIONS TO THE OBLIGATIONS OF SELLER..........................................................38
6.1 Representations and Warranties.....................................................................38
6.2 Compliance with Covenants..........................................................................38
6.3 Corporate Action...................................................................................38
6.4 Litigation.........................................................................................39
6.5 Absence of Adverse Governmental Action.............................................................39
6.6 Filings; Consents; Waiting Periods.................................................................39
6.7 Approval of Documentation..........................................................................39
6.8 Payment of Indebtedness............................................................................39
ARTICLE VII. CONDITIONS TO THE OBLIGATIONS OF BUYER..........................................................39
7.1 Representations and Warranties.....................................................................39
7.2 Compliance with Covenants..........................................................................39
7.3 Corporate Action...................................................................................40
7.4 Litigation.........................................................................................40
7.5 Absence of Adverse Governmental Action.............................................................40
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7.6 Filings; Consents; Waiting Periods.................................................................40
7.7 Approval of Documentation..........................................................................40
7.8 Financing..........................................................................................40
7.9 No Material Adverse Changes........................................................................40
7.10 Resignations.......................................................................................40
7.11 Estoppel Certificates..............................................................................41
7.12 Management Incentive Agreements....................................................................41
7.13 Lease Assignment...................................................................................41
7.14 Fairness Opinion...................................................................................41
ARTICLE VIII. INDEMNIFICATION................................................................................41
8.1 Survival...........................................................................................41
8.2 Seller's Obligation to Indemnify...................................................................41
8.3 Buyer's Obligation to Indemnify....................................................................41
8.4 Notice of Asserted Liability.......................................................................41
8.5 Opportunity to Defend..............................................................................42
8.6 Tax Adjustment.....................................................................................42
8.7 Waiver of Subrogation and Other Rights.............................................................43
8.8 No Contribution....................................................................................43
8.9 Non-Exclusive Remedy...............................................................................43
ARTICLE IX. TAX MATTERS......................................................................................43
9.1 Tax Returns........................................................................................43
9.2 Tax Sharing Agreements.............................................................................43
9.3 Clearance Certificates.............................................................................43
9.4 Transfer Taxes.....................................................................................44
9.5 Seller's Tax Indemnity.............................................................................44
ARTICLE X. TERMINATION OF AGREEMENT..........................................................................44
10.1 Termination........................................................................................44
10.2 Survival...........................................................................................45
10.3 Return of Materials................................................................................46
ARTICLE XI. MISCELLANEOUS....................................................................................46
11.1 Notices............................................................................................46
11.2 Entire Agreement...................................................................................47
11.3 Waivers and Amendments.............................................................................47
11.4 Governing Law......................................................................................48
11.5 Arbitration........................................................................................48
11.6 Reference to U.S. Dollars..........................................................................48
11.7 Binding Effect; Assignment.........................................................................49
11.8 No Third Party Beneficiaries.......................................................................49
11.9 Counterparts.......................................................................................49
11.10 Schedules and Exhibits.............................................................................49
11.11 Headings, Gender and Person........................................................................49
11.12 Publicity..........................................................................................49
11.13 Severability.......................................................................................49
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11.14 Time of Essence..............................................................................50
11.15 Attorneys' Fees..............................................................................50
11.16 Confidential Information.....................................................................50
11.17 No Publicity; Employee Letters...............................................................50
11.18 Mutual Drafting..............................................................................51
11.19 Further Assurances...........................................................................51
11.20 Covenant.....................................................................................51
ARTICLE XII. DEFINITIONS...............................................................................51
12.1 Defined Terms................................................................................51
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EXHIBIT INDEX
EXHIBIT A - Subordinated Promissory Note
EXHIBIT B - Management Incentive Agreement
EXHIBIT C - Union Bank of California Credit Term Sheet
SCHEDULE INDEX
SCHEDULE 2.7 - Approvals
SCHEDULE 2.10 - Absence of Certain Changes
SCHEDULE 2.11 - Tax Returns and Payments
SCHEDULE 2.12 - Compliance with Laws
SCHEDULE 2.13 - Contracts and Other Agreements
SCHEDULE 2.14 - Real Estate
SCHEDULE 2.15 - Environmental Matters
SCHEDULE 2.16 - Intangible Property and Computer Software
SCHEDULE 2.17 - Title to Properties
SCHEDULE 2.18 - Permits
SCHEDULE 2.20 - Employee Benefit Plans
SCHEDULE 2.22 - Insurance
SCHEDULE 2.23 - Officers, Directors and Key Employees
SCHEDULE 2.25 - Bank Accounts
SCHEDULE 2.26 - Powers of Attorney and Guarantees
SCHEDULE 2.28 - Relations with Customers
SCHEDULE 2.30 - Transactions with Affiliates
SCHEDULE 3.3 - Approvals
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SCHEDULE 7.2 - Management Incentive Employees
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and
effective as of November 28, 2000, by and among Diodes Incorporated, a Delaware
corporation ("Buyer"), Lite-On Power Semiconductor Corp., a Taiwan corporation
("Seller"), and (with respect only to Articles IV, VII, IX, X and XI) FabTech,
Inc., a Delaware corporation ("Company"). Buyer, Seller and Company are referred
to collectively as the "parties."
RECITALS
A. WHEREAS, Seller is the beneficial and record owner of all of
the issued and outstanding shares of the capital stock of Company, consisting of
4,000,000 shares of Series A Convertible Preferred Stock and 1,000 shares of
Common Stock (collectively, the "Shares").
B. WHEREAS, Seller wishes to sell to Buyer, and Buyer wishes to
purchase from Seller, the Shares in accordance with the terms and conditions set
forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
promises set forth in this Agreement, and for other good and valuable
consideration the receipt of which is hereby acknowledged, and subject to the
terms and conditions stated herein, Buyer, Seller and Company hereby agree as
follows:
1. PURCHASE AND SALE OF SHARES
1.1 Purchase and Sale of Shares. Subject to the terms and
conditions hereinafter set forth, at the Closing, Seller shall sell to Buyer,
and Buyer shall purchase from Seller, the Shares.
1.2 Purchase Price. As full payment for the Shares and for
Seller's agreements and indemnities contained herein, Buyer shall pay to Seller
up to Fifty-Five Million United States Dollars (U.S. $55,000,000) (the "Purchase
Price"). The Purchase Price shall be computed and paid as set forth in Section
1.3 below.
1.3 Payment of Purchase Price.
(a) The Purchase Price shall consist of the following
amounts:
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(1) An amount (the "Initial Purchase Price") equal to the
amount, if any, by which U.S. $25,000,000 exceeds the sum of the
following:
(A) The outstanding principal balance of, and
interest accrued on, Company's indebtedness to Seller, Buyer and
Citibank as of the Closing Date; and
(B) Any Liabilities of Company or any Subsidiary on
the Closing Date (including any amounts accrued on the Closing
Date under the Management Incentive Agreements referred to in
Section 7.12), except (x) Liabilities the amounts of which are
disclosed or reserved against on the Recent Balance Sheet and (y)
Liabilities incurred, in connection with Company's or any
Subsidiary's continuing businesses, in the ordinary course of
business and consistent with past practice since the date of the
Recent Balance Sheet. In the event the sum of the amounts set
forth in Section 1.3(a)(i)(A) and (B) equals or exceeds U.S.
$25,000,000 then the Initial Purchase Price shall be zero and no
amount shall be payable by Buyer to Seller under this Section 1.3
(a)(i).
(2) For each of the fiscal years ending December 31, 2001,
2002, 2003 and 2004, an amount (the "Earnout") determined as follows:
A
E = --(B-40)
90
where: A = The number set forth in Column 1 of the following chart
for such fiscal year.
C
B = -- X 100 rounded down to the nearest whole integer.
D
C = The lesser of (i) Company's earnings before interest and
taxes ("EBIT") or (ii) 130% of the number set forth in
Column 2 of the following chart for such fiscal year.
D = The number set forth in Column 2 of the following chart
for such fiscal year.
E = Earnout for any such fiscal year.
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Fiscal
Year 1 2
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2001 U.S. $4,000,000 U.S. $7,326,000
2002 6,500,000 11,887,000
2003 9,000,000 15,622,000
2004 10,500,000 19,110,000
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(b) The Initial Purchase Price shall be payable in cash in
U.S. dollars on the Closing Date by wire transfer of immediately
available funds to such account as Seller shall specify in writing not
less than three (3) business days before the Closing Date.
(c) The Earnout for the fiscal year ending on any of
December 31, 2001, 2002, 2003 or 2004 shall be payable in cash in U.S.
dollars on or before the next March 31 by wire transfer of immediately
available funds to such account as Seller shall specify in writing not
less than three (3) business days before such payment date.
(d) The Earnout shall be determined by Buyer's accounting
staff in accordance with U.S. generally accepted accounting principles
consistently applied to the operations of Buyer and Company. The EBIT of
Company used in determining the Earnout shall not be less than the EBIT
of Company reported by Buyer in its consolidated financial statements
filed with the U.S. Securities and Exchange Commission. The Earnout for
each fiscal year shall be computed based upon Company's actual EBIT for
such year without any deduction (or credit) due to any shortfall (or
overage) in any prior or subsequent year. A portion of the Earnout for
each fiscal year shall be deemed to be imputed interest at a rate
(commencing on the Closing Date and based on a 365 day year) equal to the
lowest applicable federal rate for the three month period ending on the
last day of the calendar month in which the Closing Date occurs. For the
Earnout payable with respect to 2001, 2002 or 2003, the applicable
short-term federal rate shall be used. For the Earnout payable with
respect to any subsequent fiscal year, the applicable mid-term federal
rate shall be used.
(e) Any amount payable with respect to any fiscal year
under the Management Incentive Agreements described in Section 7.12 shall
be deducted from the Earnout payable with respect to such year.
(f) In the event the Earnout payable with respect to any
year is less than the amount payable with respect to such fiscal year
pursuant to the Management Incentive Agreements referred to in Section
7.12, Seller shall indemnify Buyer for the amount by which such incentive
payment exceeds the Earnout for such fiscal year.
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1.4 Closing. The transfer of the Shares and the payment of the
Initial Purchase Price shall be effected on the Closing Date. At the Closing,
Seller shall deliver to Buyer certificates evidencing the Shares, together with
assignments separate from the certificates duly executed in blank and,
concurrently with such delivery, Buyer shall pay the Initial Purchase Price in
accordance with Section 1.3. In addition, at the Closing, all other actions
shall be taken, and all other documents shall be duly executed and delivered,
which are necessary to consummate all other transactions contemplated by this
Agreement, other than such actions and documents as are to be taken or delivered
at another date as specifically provided in this Agreement.
1.5 Closing Deadline. The Closing shall occur five (5) business
days following the date upon which the waiting period provided for in the HSR
Act expires, and all other conditions hereunder have been satisfied, or such
earlier or later date as may be mutually agreed to in writing by Buyer and
Seller (such date being referred to herein as the "Closing Date" or the
"Closing"), but in no event later than March 31, 2001, unless both Buyer and
Seller consent in writing to an extension beyond such date. The Closing shall
take place at the offices of Sheppard, Mullin, Richter & Hampton LLP, 333 South
Hope Street, Forty-Eighth Floor, Los Angeles, California 90071. Buyer, Seller
and Company agree to use commercially reasonable efforts to satisfy the
conditions set forth in this Agreement, and to cause the Closing to occur within
the specified time period.
2. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer that the statements
contained in this Article II are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Article II):
2.1 Due Formation. Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
has the requisite power to own, lease and operate its assets, properties and
business and to carry on its business as now being conducted and is duly
qualified as a foreign corporation in good standing under the laws of each state
or jurisdiction in which either the ownership or use of the properties owned or
used by it, or the nature of the activities conducted by it, requires such
qualification.
2.2 Shares. The Shares are validly issued, fully paid and
nonassessable. Except for 4,000,000 shares of Series A Convertible Preferred
Stock and 1,000 shares of Common Stock, as of the date of this Agreement, there
are no shares of the capital stock or other equity securities of Company
outstanding; there are
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no outstanding options, warrants or rights to purchase or acquire any shares of
the capital stock or other equity securities of Company; and there are no
contracts, commitments, understandings, arrangements or restrictions by which
Company is bound to issue additional shares of its capital stock or other equity
securities or other securities, options, warrants or rights to purchase or
acquire any additional shares of its capital stock or other equity securities.
2.3 Title to Shares. All of the Shares are held of record and
owned beneficially by Seller free and clear of all liens, encumbrances, security
interests, equities, options, claims, charges and restrictions (other than
restrictions of general applicability imposed by federal or state securities
laws), and, upon delivery of the Initial Purchase Price on the Closing Date as
herein provided, Buyer will acquire good and marketable title to the Shares,
free and clear of any lien, claim or other encumbrance.
2.4 Certificate of Incorporation and Bylaws. Company has
heretofore delivered to Buyer true and complete copies of the Certificate of
Incorporation (certified by the Delaware Secretary of State) and the Bylaws
(certified by the Secretary of Company) as in effect on the date hereof. The
minute book of Company in the form heretofore delivered to Buyer accurately
reflects all actions taken by the Board of Directors or the stockholders of
Company on or before the date hereof.
2.5 Subsidiaries. Each direct and indirect Subsidiary of Company
is duly organized, validly existing and in good standing under the laws of its
jurisdiction of formation and has the requisite power and authority to own,
lease and operate its assets and properties and to carry on its business as it
is now being conducted. The Subsidiaries are duly qualified as corporations in
good standing under the laws of each state or jurisdiction in which either the
ownership or use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification. All of the outstanding
equity securities of each Subsidiary are validly issued, fully paid,
nonassessable and free of preemptive rights and are owned directly or indirectly
by Company free and clear of any liens, encumbrances, security interests,
equities, options, claims, charges or restrictions of any nature whatsoever.
There are no subscriptions, options, warrants, rights, calls, contracts, voting
trusts, proxies or other commitments, understandings, restrictions or
arrangements relating to the issuance, sale, voting, transfer, ownership or
other rights with respect to any equity securities of any Subsidiary, including
any right of conversion or exchange under any outstanding security, instrument
or agreement.
2.6 Authority. Seller and Company each has all requisite corporate
power and authority to execute and deliver this Agreement and each Transaction
Document and to perform its obligations hereunder and thereunder. This Agreement
has been, and each Transaction Document will be prior to the Closing, duly
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authorized, executed and delivered by Seller or Company, and (assuming the due
authorization, execution and delivery by Buyer) this Agreement constitutes, and
each Transaction Document when so executed and delivered will constitute, the
legal, valid and binding obligations of Seller and Company enforceable against
Seller and Company in accordance with its terms except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws affecting the
enforcement of creditors' rights generally, and general principles of equity
(regardless of whether enforcement is considered in a proceeding at law or in
equity).
2.7 No Violation of Law and Agreements. Except as set forth in
Schedule 2.7, the execution and delivery by Seller or Company of this Agreement
and each Transaction Document, and the performance by Seller or Company of its
obligations hereunder or thereunder, does not and will not:
(a) violate any provision of the Certificate of
Incorporation or Bylaws of Seller or Company;
(b) to the best knowledge of Seller, violate any provision
of Applicable Law relating to Seller or Company; violate any provision of
any order, arbitration award, judgment or decree to which Seller or
Company is subject; or require a registration, filing, application,
notice, consent, approval, order, qualification or waiver with, to or
from any Governmental Authority; or
(c) require a consent, approval or waiver from, or notice
to, any party to any contract to which Seller, Company or any Affiliate
thereof is a party; or result in a breach of or cause a default under any
provision of a contract to which Seller, Company or any Affiliate thereof
is a party.
2.8 Financial Statements. Company has previously delivered to
Buyer true and complete copies of the consolidated financial statements of
Company (the "Company Financial Statements") consisting of (i) the audited
balance sheet of Company at December 31, 1995, 1996, 1997, 1998 and 1999 and
June 30, 2000 and the unaudited balance sheet at October 31, 2000 (the "Recent
Balance Sheet") and (ii) the audited statements of income for the fiscal years
ended December 31, 1995, 1996, 1997, 1998 and 1999 and the six months ended June
30, 2000 and the unaudited statement of income for the four months ended October
31, 2000 (including the notes and schedules contained therein or annexed
thereto). All Company Financial Statements (including all notes and schedules
contained therein or annexed thereto) have been prepared in accordance with GAAP
consistently applied and with the books and records of Company, and fairly
present the assets, liabilities and financial position, the results of
operations and cash flows of Company on a consolidated basis as of the dates and
for the years and periods indicated.
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2.9 No Undisclosed Liabilities. Neither Company nor any Subsidiary
has any Liabilities, except (i) Liabilities the amounts of which are disclosed
or reserved against on the Recent Balance Sheet and (ii) Liabilities incurred,
in connection with Company's continuing businesses, in the ordinary course of
business and consistent with past practice since the date of the Recent Balance
Sheet.
2.10 Absence of Certain Changes.
(a) Except as set forth in Schedule 2.10, since the date of
the Recent Balance Sheet, neither Company nor any Subsidiary has:
(1) entered into any transaction, contract or
commitment or incurred any obligation or liability (fixed or
contingent) which is not a business transaction, contract,
commitment or obligation entered into or incurred in the ordinary
course of business and which at the date hereof is expected to
have a materially adverse effect on the business, financial
condition or prospects of Company or such Subsidiary;
(2) waived or released any rights of material value,
other than in the ordinary course of business;
(3) accelerated receivables, delayed payables or
liquidated inventory, except in accordance with prior practices;
(4) transferred or granted any rights under any
concessions, leases, licenses, agreements, patents, inventions,
trade names, trademarks, service marks, brand marks, brand names
or copyrights, or registrations or licenses thereof or
applications therefor, or with respect to any know-how or other
proprietary or trade rights;
(5) made or granted any wage or salary increase
(except for increases made in accordance with established
compensation policies of Company or such Subsidiary applied on a
basis consistent with previous practice), entered into any
employment contract with any officer or employee or made any loan
(excluding advances for normal reimbursable business expenses) to,
or entered into any transaction of any other nature with, any
officer or director of Company or any Subsidiary (other than the
Management Incentive Agreements referred to in Section 7.12);
(6) suffered any material adverse change in the
financial condition or results of operations of Company and the
Subsidiaries, or in their assets, properties, business, operations
or prospects, considered as a whole;
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(7) issued, sold or otherwise disposed of any
securities of Company or of the Subsidiaries or, except in the
ordinary course of business, any evidence of indebtedness of
Company or of the Subsidiaries;
(8) made any changes in accounting methods or
practices;
(9) committed to make any capital expenditures; or
(10) entered into any agreement to do any of the
things described in this section.
(b) Since the date of the Recent Balance Sheet, each of
Company and the Subsidiaries has operated its business in the ordinary
course consistent with its past practice so as to preserve such business
intact, to keep available to it the services of its employees, and to
preserve its business and the goodwill of its suppliers, customers,
distributors and others having business relations with it.
2.11 Tax Returns and Payments.
(a) Company has filed its United States federal Income Tax
Returns and its Missouri corporate Income Tax Returns on a separate
basis. Except for the corporations and entities identified on Schedule
2.11, no other corporation or entity other than Company was or is
includible in such Tax Returns. Company is not a party to any Tax
allocation or sharing agreement, other than any such agreement of which a
complete, true and accurate copy is included in Schedule 2.11. Each
United States federal Income Tax and other federal, foreign, state,
county and local Tax Return which is required to have been filed with
respect to the operations, income or assets of Company or any member of
Seller has been filed by or on behalf of Company or such member and is
complete and correct, and all Taxes which have become due pursuant or
with respect thereto or as reflected thereon, have been paid. Seller,
Company and each member of Seller have disclosed on their Income Tax
Returns all positions taken therein that could give rise to a substantial
understatement of Income Tax within the meaning of IRC Section 6662 or
R&TC Section 25935. Except as set forth on Schedule 2.11, Company is not
subject to Tax in any state, local or foreign jurisdiction other than
Missouri and Delaware; and Schedule 2.11, lists all federal, state, local
and foreign income Tax Returns filed by or on behalf of Company for
taxable periods ended after December 31, 1995, indicates those Tax
Returns that have been examined or audited and indicates those Tax
Returns that currently are the subject of examination or audit. Company
has delivered to Buyer correct and complete copies of all federal and
Missouri Income Tax Returns filed for each taxable period ended
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since December 31, 1995 (and, if applicable, for any prior taxable period
which remains the subject of examination, audit, assessment or dispute or
for which the statute of limitations for assessment has been extended and
remains open), and all examination reports received and statements of
deficiencies assessed against or agreed to by Company at any time.
(b) Except as set forth on Schedule 2.11:
(1) No extension or waiver of any statute of
limitations has been requested of or granted by Company with
respect to any Tax for any period, and no extension or waiver of
time within which to file any Tax Return has been requested by or
granted to Company or any member of Seller.
(2) No deficiency, delinquency or default for any
Taxes relating to Company or Seller or its receipts, income,
sales, transactions or other business activities has been claimed,
proposed or assessed against Company or any member of Seller nor
has Company or any member of Seller received notice of any such
deficiency, delinquency, or default; and there is no audit,
examination, investigation, claim, assessment, action, suit,
proceeding, lien or encumbrance in effect, pending or proposed by
any tax authority with respect to any such Taxes or with respect
to any Tax Return of Company or Seller. No claim has been made by
an authority in any state, local or foreign jurisdiction other
than Missouri that Company is subject to taxation by that
jurisdiction.
(3) Company has withheld and paid all Taxes required
to have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor,
stockholder or third party.
(4) There is no tax ruling, request for ruling, or
settlement, compromise, closing or Tax collection agreement in
effect or pending which does or could affect the liability of
Company for Taxes for any period after the Closing Date.
(5) Company has not been a member of an Affiliated
Group filing a consolidated federal Income Tax Return, or incurred
any liability for the Taxes of any person under Treasury
Regulation Section 1.1502-6; under any provision of state, local
or foreign law similar to Treasury Regulation Section 1.1502-6; as
a transferee or successor; by contract; or otherwise.
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(6) Company is not obligated to make any payments,
or is a party to any agreement that under any circumstances could
obligate Company to make any payments, that are or would not be
deductible under IRC Section 162(m) or IRC Section 280G (other
than as set forth in the Management Incentive Agreements referred
to in Section 7.12).
(7) None of the assets of Company consists of any
stock in a corporation (unless such stock represents either (A)
one hundred percent (100%) of the stock of such corporation or (B)
such stock is publicly traded and is less than one percent (1%) of
both the total voting power and total fair market value of all
outstanding stock of such corporation, determined after
application of the attribution rules of IRC Section 318),
indebtedness of another person or if there is market discount (as
defined in IRC Section 1278(a)(2)) with respect to such
indebtedness of more than $0, any interest as a partner in a
partnership (as defined in IRC Section 7701(a)(2)), any interest
in a trust, whether as grantor, beneficiary or otherwise, foreign
currency, or any option or obligation to acquire or dispose of any
of the foregoing.
(8) None of the assets of Company consists of or
secures any indebtedness the interest on which is exempt from
Income Tax; is "tax-exempt use property" within the meaning of IRC
Section 168(h); or will as of the Closing Date be subject to any
"safe harbor lease" within the meaning of former Section 168(f)(8)
of the Internal Revenue Code of 1954.
2.12 Compliance with Laws. Except as set forth in Schedule 2.12,
to the best knowledge of Seller and Company, each of Seller, Company and the
Subsidiaries has not violated and is in compliance with all laws, statutes,
ordinances, regulations, rules and orders of any foreign, federal, state or
local government and any other governmental department or agency, and any
judgment, decision, decree or order of any court or governmental agency,
department or authority. Neither Seller nor Company nor any Subsidiary has
received any notice to the effect that, or otherwise been advised that, it is
not in compliance with any such statutes, regulations, rules, judgments,
decrees, orders, ordinances or other laws, and neither Seller nor Company nor
any Subsidiary is aware of any existing circumstances which are likely to result
in violations of any of the foregoing.
2.13 Contracts and Other Agreements.
(a) Schedule 2.13 sets forth as of the date of this
Agreement all of the contracts and other agreements hereinafter referred
to in this Section 2.13,
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to which Company or any Subsidiary is a party or by or to which it or its
assets or properties are bound or subject (collectively, the
"Contracts"):
(1) written contracts and other agreements with any
current or former officer, director, employee, consultant, agent
or other representative having more than six (6) months to run
from the date hereof or providing for an obligation to pay or
accrue compensation of $25,000 or more per annum, or providing for
the payment of fees or other consideration in excess of $25,000;
(2) contracts and other agreements with any labor
union or association representing any employee;
(3) contracts and other agreements for the purchase
or sale of inventory, equipment or services that contain an
escalation, renegotiation or redetermination clause or that cannot
be canceled without liability, premium or penalty on thirty (30)
or fewer days notice;
(4) contracts and other agreements for the sale of
any of the assets or properties of Company or any Subsidiary other
than in the ordinary course of business and for a sale price
exceeding $50,000 in any one case (or in the aggregate, in the
case of any series of related contracts or other agreements) or
for the grant to any person of any preferential rights to purchase
any of its assets or properties;
(5) contracts and other agreements (including,
without limitation, leases of real property) calling for an
aggregate purchase price or payments in any one year of more than
$50,000 in any one case (or in the aggregate, in the case of any
series of related contracts or other agreements);
(6) joint venture agreements;
(7) contracts or other agreements under which
Company or a Subsidiary or a third party agrees to indemnify any
party other than in the ordinary course of business;
(8) contracts and other agreements containing
covenants of Company or any Subsidiary not to compete in any line
of business or with any person in any geographical area or
covenants of any other person not to compete with Company or any
Subsidiary in any line of business or in any geographical area;
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<PAGE> 19
(9) contracts and other agreements relating to the
making of any loan by Company or any Subsidiary;
(10) contracts or other agreements relating to the
borrowing of money by Company or any Subsidiary or the direct or
indirect guaranty by Company or any Subsidiary of any obligation
for, or an agreement by Company or any Subsidiary to service, the
repayment of borrowed money, or any other contingent obligations
in respect of indebtedness of any other person or governmental or
regulatory body;
(11) contracts or other agreements for or relating
to computers, computer equipment, computer software or computer
services in excess of $25,000; and
(12) contracts or other agreements between Company
or any Subsidiary and any federal, state or local government,
agency or authority.
(b) There have been delivered or made available to Buyer
true and complete copies of all of the contracts and other agreements set
forth in Schedule 2.13 or on any other Schedule. Neither Company nor any
Subsidiary has been found to be in default under any such contract or
agreement, nor will the consummation of the transactions contemplated by
this Agreement result in a default under any such contract or agreement
or the right to terminate such contract or agreement.
2.14 Real Estate.
(a) Schedule 2.14 contains a complete and accurate list of
the following:
(1) all real property and interests in real property
and the buildings, structures and improvements thereon (the "Owned
Property") owned by Company or a Subsidiary, or which Company or a
Subsidiary is contractually obligated to purchase;
(2) all leases (the "Leases") of real property and
interests in real property and the buildings, structures and
improvements thereon (the "Leased Property") pursuant to which
Company or a Subsidiary is the lessee;
(3) all contracts or options (and all amendments,
extensions and modifications thereto) held by Company or a
Subsidiary, or contractual obligations (and all amendments,
extensions and
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modifications thereto) on the part of Company or a Subsidiary to
purchase or acquire any interest in real property;
(4) all contracts or options (and all amendments,
extensions and modifications thereto) granted by Company or a
Subsidiary, or contractual obligations (and all amendments,
extensions and modifications thereto) on the part of Company or a
Subsidiary to sell or dispose of any interest in real property;
and
(5) all policies of title insurance issued to
Company or a Subsidiary with respect to the Facilities.
(b) The Facilities are sufficient for the conduct of the
business of Company and the Subsidiaries as such business is now
conducted. Except as set forth in Schedule 2.14, Company or a Subsidiary
has the right under valid and existing leases or other agreements to
occupy and use all Leased Property which it uses in the conduct of their
business. Neither the whole nor any portion of the Facilities has been
condemned, requisitioned or otherwise taken by any Governmental
Authority, and neither Company nor a Subsidiary has received any notice
that any such condemnation, requisition or taking is threatened, which
condemnation, requisition or taking would preclude or materially impair
the current use thereof. All buildings, structures and appurtenances
comprising part of the Facilities which are currently being used in the
conduct of the business of Company or any Subsidiary are in satisfactory
condition and have been reasonably maintained, normal wear and tear
excepted. All Facilities have received all required approvals of
Governmental Authorities (including, without limitation, permits and a
certificate of occupancy or other similar certificate permitting lawful
occupancy of the Facilities) required in connection with the operation
thereof and have been operated and maintained in accordance with
applicable laws, rules and regulations. All Facilities are supplied with
utilities (including, without limitation, water, sewage, disposal,
electricity, gas and telephone) and other services necessary for the
operation of such Facilities as currently operated. The improvements
constructed on the Facilities, including, without limitation, all
Leasehold Improvements, and all fixtures and equipment and other tangible
assets owned, leased or used by Company or a Subsidiary at the Facilities
are (i) insured to the extent and in a manner customary in the industry,
(ii) structurally sound with no known defects, (iii) in good operating
condition and repair, subject to ordinary wear and tear, (iv) not in need
of maintenance or repair except for ordinary routine maintenance and
repair, the cost of which would not be material, (v) sufficient for the
operation of Company's and the Subsidiaries' businesses as presently
conducted and (vi) in conformity with all applicable laws, ordinances,
orders, regulations and other requirements relating thereto currently in
effect.
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<PAGE> 21
(c) Company has good and marketable title to the Owned
Property, subject to no mortgage, pledge, lien, security interest,
conditional sale agreement, encumbrance or charge, and there are no
encroachments by Company or a Subsidiary on abutting property and no
encroachments by others on their properties, except: as reflected in the
Recent Balance Sheet; tax, materialmen's or like liens for obligations
not yet due or payable or being contested in good faith by appropriate
proceedings described in Schedule 2.14; such imperfections of title and
encumbrances which do not detract materially from the value thereof for
the conduct of the business conducted there, or materially interfere with
the use thereof for the conduct of the business conducted there; zoning
ordinances, recorded building use and other restrictions and easements of
record which do not materially interfere with the use thereof for the
conduct of the business conducted there; and mortgages, deeds of trust or
other claims and encumbrances, as set forth in Schedule 2.14. Except as
set forth in Schedule 2.14, neither Company nor a Subsidiary nor Seller
has received any written notice that Company or a Subsidiary is in
violation of any zoning, use, occupancy, building, wetlands or
environmental regulation, ordinance or other law, order, regulation or
requirement relating to the Facilities, including, without limitation,
the Americans With Disabilities Act and Environmental Laws.
(d) Except as set forth in Schedule 2.14, each Lease is in
full force and effect, neither Company nor a Subsidiary is in default of
its obligations under any Lease, and no Lease is subject to or encumbered
by any lien or other restriction which impairs the use of the property to
which it relates in the business of Company or a Subsidiary as now
conducted.
2.15 Environmental Matters. Except as set forth on Schedule 2.15:
(a) For purposes of this Section, the term "Company" shall
include (i) all Affiliates of Company, (ii) all partnerships, joint
ventures and other entities or organizations in which Company or a
Subsidiary was at any time or is a partner, joint venturer, member or
participant and (iii) all predecessor or former corporations,
partnerships, joint ventures, organizations, businesses or other
entities, whether in existence as of the date hereof or at any time prior
to the date hereof, the assets or obligations of which have been acquired
or assumed by Company or a Subsidiary or to which Company or a Subsidiary
has succeeded; provided, however, that in no event shall Vishay
Intertechnology, Inc. be deemed to be an Affiliate of Company for the
purposes of this Section 2.15.
(b) The Facilities have been maintained in compliance with
all applicable federal, state, local or foreign laws, statutes,
ordinances, regulations,
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rules, judgments, orders, notice requirements, court decisions, agency
guidelines or principles of law, restrictions and licenses, which (i)
regulate or relate to the protection or clean-up of the environment; the
use, treatment, storage, transportation, handling, disposal or Release of
Hazardous Substances; the preservation or protection of waterways,
groundwater, drinking water, air, wildlife, plants or other natural
resources; or the health and safety of persons or property, including,
without limitation, protection of the health and safety of employees; or
(ii) impose liability with respect to any of the foregoing, including,
without limitation, the Federal Water Pollution Control Act (33 U.S.C.
Section 1251 et seq.), Resource Conservation & Recovery Act (42 U.S.C.
Section 6901 et seq.) ("RCRA"), Safe Drinking Water Act (21 U.S.C.
Section 349, 42 U.S.C. Section 201, 300f), Toxic Substances Control Act
(15 U.S.C. Section 2601 et seq.), Clean Air Act (42 U.S.C. Section 7401
et seq.), Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601 et seq.) ("CERCLA"), and Missouri
Revised Statutes Sections 260.350 et seq., 643.010 et seq. and 644.006 et
seq., or any other similar federal, state or local law of similar effect,
each as amended. (All of the above, collectively, are referred to herein
as the "Environmental Laws").
(c) The Facilities are, and at all times have been, and all
Former Facilities were at all times when owned, leased or operated by
Company or a Subsidiary, owned, leased and operated in compliance with
all Environmental Laws and in a manner that will not give rise to any
liability under any Environmental Laws.
(d) Company has, and at all times has had, all Permits
required under any Environmental Law and each Facility is, and at all
times has been, in compliance with all such Permits.
(e) The consummation of any of the transactions
contemplated by this Agreement will not require an application for
issuance, renewal, transfer or extension of, or any other administrative
action regarding, any Permit required under any Environmental Law.
(f) Neither Company nor a Subsidiary nor Seller has
received any notice at any time that it is or was claimed to be in
violation of or in non-compliance with the conditions of any Permit
required under any Environmental Law or the provisions of any
Environmental Law.
(g) There is not now pending or threatened, nor any basis
for, nor has there ever been, any Action against Company or a Subsidiary
under any
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<PAGE> 23
Environmental Law or otherwise with respect to any Release or mishandling
of any Hazardous Substance.
(h) There are no consent decrees, judgments, judicial or
administrative orders or agreements with, or liens by, any governmental
authority or quasi-governmental entity relating to any Environmental Law
which regulate, obligate, bind or in any way affect Company or a
Subsidiary or any Facility or Former Facility.
(i) There is not and has not been any Hazardous Substance
used, generated, treated, stored, transported, disposed of, handled or
otherwise existing on, under, about or from any Facility or any Former
Facility, except for quantities of any such Hazardous Substances stored
or otherwise held on, under or about any such Facility in full compliance
with all Environmental Laws and necessary for the operation of the
business conducted there.
(j) Company has at all times used, generated, treated,
stored, transported, disposed of or otherwise handled its Hazardous
Substances in compliance with all Environmental Laws and in a manner that
will not result in liability of Company or a Subsidiary under any
Environmental Law.
(k) There are no present or past Environmental Conditions
in any way relating to Company or a Subsidiary, or the Facilities.
"Environmental Conditions" means the introduction into the environment of
any pollution, including, without limitation, any contaminant, irritant
or pollutant or other Hazardous Substance (whether or not upon the
Facilities or other property of Company or a Subsidiary and whether or
not such pollution constituted at the time thereof a violation of any
Environmental Law as a result of any Release of any kind whatsoever of
any Hazardous Substance) as a result of which Seller, Company or a
Subsidiary has or may become liable to any person or by reason of which
the Facilities may suffer or be subjected to any lien.
(l) No current or past use, generation, treatment,
transportation, storage, disposal or handling practice of Company or a
Subsidiary with respect to any Hazardous Substance has or will result in
any liability under the CERCLA or RCRA or any state or local law of
similar effect.
(m) There is not now and has not been at any time in the
past any underground or above-ground storage tank or pipeline at any
Facility or Former Facility where the installation, use, maintenance,
repair, testing, closure or removal of such tank or pipeline was not in
compliance with all Environmental Laws, and there has been no Release
from or rupture of any such tank or pipeline, including, without
limitation, any Release from or in connection with the filling or
emptying of such tank.
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(n) True, complete and correct copies of the written
reports, and all parts thereof, including any drafts of such reports if
such drafts are in the possession or control of Company or a Subsidiary
or Seller, of all environmental audits or assessments which have been
conducted at any Facility or Former Facility within the past five years,
either by Seller, Company or a Subsidiary or any attorney, environmental
consultant or engineer engaged for such purpose, have been delivered to
Buyer and a list of all such reports, audits and assessments and any
other similar report, audit or assessment of which Company or a
Subsidiary or Seller has knowledge is included on Schedule 2.15.
(o) Company does not manufacture or distribute any product
in the State of Missouri which requires any warning mandated by Missouri
Law.
(p) Company is not a party, whether as a direct signatory
or as successor, assign or third party beneficiary, or otherwise bound,
to any Lease or other Contract (excluding insurance policies disclosed on
Schedule 2.22) under which Company or a Subsidiary is obligated by or
entitled to the benefits of, directly or indirectly, any representation,
warranty, indemnification, covenant, restriction or other undertaking
concerning environmental conditions.
(q) Company has not released any other person from any
claim under any Environmental Law or waived any rights concerning any
Environmental Condition.
(r) Company has given all notices and warnings, made all
reports, and has kept and maintained all records required by and in
compliance with all Environmental Laws.
2.16 Intellectual Property and Computer Software.
(a) Each of Company and each Subsidiary of Company has all
requisite right, title and interest in or valid and enforceable rights
under contracts or licenses to use all Company Intellectual Property
necessary to the conduct of its respective business as presently
conducted. To the extent any Intellectual Property is the subject of a
licensing agreement, such licensing agreement and the parties thereto are
described in Schedule 2.16. Except as described in Schedule 2.16, neither
Company nor any Subsidiary of Company has received notice that it is
infringing upon or otherwise misappropriating any rights relating to the
Intellectual Property of any third party or any application pending for
the Intellectual Property of any third party, and neither Company nor any
of its Subsidiaries has knowledge of any basis for any such claim of
infringement or misappropriation.
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(b) Each item of Company Intellectual Property is owned
exclusively by the Company or its Subsidiaries (excluding Intellectual
Property licensed to Company or such Subsidiaries) and is free and clear
of any Liens. Company (i) owns exclusively all trademarks, service marks
and trade names used by Company in connection with the operation or
conduct of the business of Company, including the sale of any products or
technology or the provision of any services by Company and (ii) owns
exclusively, and has good title to, all copyrighted works that are
Company products or other works of authorship that Company otherwise
purports to own; provided, however, that such works may incorporate
copyrighted works or works of authorship, trademarks or trade names of
third parties which are licensed to Company or are in the public domain.
Each Subsidiary of Company (i) owns exclusively all trademarks, service
marks and trade names used by such Subsidiary in connection with the
operation or conduct of the business of such Subsidiary, including the
sale of any products or technology or the provision of any services by
such Subsidiary and (ii) owns exclusively, and has good title to, all
copyrighted works that are such Subsidiary's products or other works of
authorship that the Subsidiary otherwise purports to own; provided,
however, that such works may incorporate copyrighted works or works of
authorship, trademarks or trade names of third parties which are licensed
to the Subsidiary or are in the public domain.
(c) To the extent that any Company Intellectual Property
has been developed or created by any party other than Company or a
Subsidiary, Company has a written agreement with such party with respect
thereto and Company or Subsidiary has either (i) obtained ownership of,
and is the exclusive owner of, all such Intellectual Property by
operation of law or by valid assignment of any such rights or (ii) has
obtained a license under or to such Intellectual Property.
(d) Company Intellectual Property constitutes all the
Intellectual Property used in and/or necessary to the conduct of
Company's and its Subsidiaries' business as it currently is conducted or
as reasonably contemplated to be conducted, including, without
limitation, the design, development, distribution, marketing,
manufacture, use, import, license, and sale of the products, technology
and services of Company (including products, technology or services
currently under development).
(e) To the knowledge of Seller and Company, no party is
infringing or misappropriating any Company Intellectual Property.
(f) No Company Intellectual Property or product, technology
or service of Company or its Subsidiaries is subject to any Action that
restricts, or that is reasonably expected to restrict in any manner, the
use, transfer or
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<PAGE> 26
licensing of any Company Intellectual Property by Company or its
Subsidiaries or that may affect the validity, use or enforceability of
such Company Intellectual Property.
(g) Company has taken all necessary and appropriate steps
to protect and preserve ownership of Company Intellectual Property.
Company has secured valid written assignments from all consultants and
employees who contributed to the creation or development of Company
Intellectual Property. In the event that the consultant is concurrently
employed by Company and a third party, Company has taken additional steps
to ensure that any Company Intellectual Property developed by such a
consultant does not belong to the third party or conflict with the third
party's employment agreement. Such steps include, but are not limited to,
ensuring that all research and development work performed by such a
consultant are performed only on Company's facilities and only using
Company's resources.
2.17 Title to Properties, Absence of Liens and Encumbrances.
Company and each Subsidiary has good and marketable title to all of its
properties and assets whether real, personal, tangible or intangible, including
all properties reflected in the Recent Balance Sheet and those acquired since
the date thereof (except as since sold or otherwise disposed of in the ordinary
course of business), free and clear of all mortgages, liens, pledges, easements,
covenants, conditions, restrictions, claims and encumbrances, other than (i) as
referred to in the Recent Balance Sheet, (ii) any liens for taxes not yet
delinquent or being contested in good faith by appropriate proceedings, and
(iii) the matters set forth in the Schedule 2.17. None of the assets necessary
to operate the business conducted by Company or any Subsidiary are owned by
Seller or an Affiliate of Seller (other than Company and the Subsidiaries).
2.18 Permits. Schedule 2.18 sets forth all governmental Permits
held by Company or any Subsidiary and necessary to the operation of their
respective business. Except for Permits for which applications are shown in
Schedule 2.18 to be pending, all such Permits are currently in force. No written
notice of any violation has been received in respect of any such Permit, and no
proceeding is pending that would suspend or revoke or limit any such Permit.
2.19 Labor and Employment Matters.
(a) Each of Company and the Subsidiaries has: (i) withheld
and paid to the appropriate Governmental Authorities, or are withholding
for payment not yet due to such authorities, all amounts required to be
withheld from its employees; (ii) is not liable for any arrears of wages,
Taxes, penalties or other sums for failure to comply with any of the
foregoing; and (iii) to the best knowledge of Seller and Company, has
complied in all respects with all
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Applicable Laws, rules and regulations relating to the employment of
labor, including, without limitation, Title VII of the Federal Civil
Rights Act of 1964, as amended, the Federal Occupational Safety and
Health Act, and those relating to hours, wages, collective bargaining and
the payment and withholding of Taxes and other sums as required by
appropriate authorities.
(i) Neither Seller nor Company nor any Subsidiaries
are a party to any collective bargaining agreement or other labor
contract applicable to the employees of Company; (ii) there has
been no breach or other failure to comply with any material
provision of such agreement or contract; and (iii) neither
Company, nor any Subsidiary, is subject: (1) to any unfair labor
practice complaint pending before the National Labor Relations
Board or any other federal, state, local or foreign agency, (2)
pending or threatened labor strike, slowdown, work stoppage,
lockout, or other organized labor disturbance, or threat thereof,
(3) pending grievance proceeding, representation question or
arbitration proceeding arising out of or under any collective
bargaining agreement, or (4) attempt by any union to represent
employees of Company or a Subsidiary as a collective bargaining
agent.
2.20 Employee Benefits Plans.
(a) Schedule 2.20 sets forth a true and complete list of
all Benefit Plans and identifies as such each Benefit Plan that is an
"employee welfare plan," as defined in ERISA Section 3(1) (a "Welfare
Plan"), or an "employee pension benefit plan," as defined in ERISA
Section 3(2) (a "Pension Plan"), that Company, and any trade or business
which is under control, or which is treated as a single employer, with
Company under Section 414(b), (c), (m) or (o) maintains, participates in,
or contributes to, or has ever maintained, participated in, or
contributed to; provided, however, that the term "Pension Plan" shall not
include any Benefit Plan that is a "multiemployer plan" within the
meaning of ERISA Section 3(37) (a "Multiemployer Plan"). Each Benefit
Plan that is not a Welfare Plan, Pension Plan or Multiemployer Plan is
referred to below as a "Benefit Arrangement."
(b) Seller or Company has delivered to Buyer true and
complete copies of: (i) all plan texts, agreements and material employee
communications relating to each Benefit Plan; (ii) all summary plan
descriptions (whether or not required to be furnished pursuant to ERISA),
the three (3) most recent annual reports (including all schedules
thereto) and the three (3) most recent annual and periodic accounting and
financial statements of related plan assets with respect to each Pension
Plan and Welfare Plan; (iii) the most recent determination letter
received from the Internal Revenue Service with respect to
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each Pension Plan; and (iv) the most recent actuarial report with respect
to each Pension Plan subject to Title IV of ERISA.
(c) No event has occurred (and there exists no condition or
set of circumstances) in connection with any Benefit Plan that could
subject Company, Buyer, or any Benefit Plan, directly or indirectly, to
any liability under ERISA, IRC or any other law, regulation or
governmental order applicable to any Benefit Plan.
(d) Each Benefit Plan (other than any Multiemployer Plan)
conforms to, and its administration is in compliance with, all applicable
laws and regulations, including, but not limited to, ERISA and IRC, and
no fiduciary of any Benefit Plan has taken any action that could result
in such fiduciary being liable for the payment of damages under ERISA
Section 409 and that would result in any liability for Company or Buyer.
(e) Each Pension Plan that is intended to qualify under
Section 401(a) or 403(a) of IRC is so qualified and has received a
favorable determination letter from the Internal Revenue Service with
respect to such qualification, its related trust has been determined to
be exempt from taxation under Section 501(a) of IRC, and nothing has
occurred since the date of such letter that could adversely affect such
qualification or exemption.
(f) Each Benefit Plan (other than any Multiemployer Plan)
has been maintained in accordance with its terms, and there are no
pending or threatened claims, lawsuits or arbitrations (other than
routine claims for benefits) that have been asserted or instituted
against or with respect to any such Benefit Plan or the assets of any of
the trusts under any such Benefit Plan.
(g) There has been no failure to comply with applicable
ERISA or other requirements as to the filing of reports, documents and
notices with the Secretary of Labor, the Secretary of the Treasury and
the Pension Benefit Guaranty Corporation ("PBGC") that could subject any
Benefit Plan (other than any Multiemployer Plan), any fiduciary thereof,
Company or Buyer to a penalty, and any requirement of the furnishing of
such documents to participants or beneficiaries, due before the Closing
Date, has been or will be complied with by all of the Benefit Plans prior
to the Closing.
(h) No "prohibited transaction," as such term is defined in
Code Section 4975 and ERISA Section 406, has occurred with respect to any
Pension Plan or Welfare Plan that could subject such Plan, any fiduciary
thereof, Company or Buyer to a penalty for such prohibited transaction
imposed by ERISA Section 502 or a material tax imposed by Code Section
4975.
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(i) Any bond required by applicable provisions of ERISA
with respect to any Pension Plan or Welfare Plan has been obtained and is
in full force and effect.
(j) No "reportable event," as such term is defined in ERISA
Section 4043(c), has occurred or is continuing with respect to any
Pension Plan.
(k) No Pension Plan that is or was subject to Title IV of
ERISA has been terminated; no proceeding has been initiated to terminate
any such Plan; and Company has not incurred, nor reasonably expects to
incur, any liability, whether to the PBGC or otherwise, except for
required premium payments, which payments have been made when due, with
respect to the termination of any Pension Plan. No event has occurred
(and there exists no condition or set of circumstances) that presents a
material risk of the partial termination of any Pension Plan.
(l) No Benefit Plan provides medical or death benefits
(whether or not insured) with respect to current or former employees of
Company beyond their retirement or other termination of service (other
than coverage mandated by law or death benefits under any Pension Plan).
(m) There are no unfunded benefit obligations arising in
any jurisdiction.
(n) The consummation of the transactions contemplated
hereby will not entitle any current or former employee of Company to
severance pay, unemployment compensation or any similar payment, or
accelerate the time of payment or vesting, or increase the amount of any
compensation due to any such employee or former employee.
(o) Seller has provided (or has caused the applicable
Benefit Plans to provide) and will continue to provide (or cause the
applicable Benefit Plans to provide) for "continuation coverage" to or
for the benefit of each "covered employee" and each "qualified
beneficiary" entitled thereto (as such terms are defined in Code Section
4980B) and shall otherwise comply in all respects with the requirements
(including, but not limited to, notice requirements) of Code Section
4980B as to each such covered employee and each such qualified
beneficiary with respect to whom a "qualifying event" (as defined in Code
Section 4980B) has occurred (or will occur) through the Closing.
(p) Schedule 2.20 sets forth a true and correct list of all
Multiemployer Plans to which Seller or Company have contributed, or are
required to contribute. To the best knowledge of Seller and Company, each
Multiemployer Plan has been maintained in substantial compliance with the
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requirements prescribed by any and all applicable statutes, orders, rules
and regulations, including, but not limited to, ERISA and IRC. To the
best knowledge of Seller and Company, no "prohibited transaction," as
defined in ERISA Section 406 or Code Section 4975, has occurred in
connection with any Multiemployer Plan. Seller or Company shall have
made, on or prior to the Closing, all contributions required to be made
to each Multiemployer Plan.
(q) Schedule 2.20 sets forth accurately, for each
Multiemployer Plan, the amount of contributions by Seller or Company to
such plan for the prior two plan years and the amount of withdrawal
liability as determined under Section 4201 of ERISA that Seller or
Company would incur if they withdrew from such plan in a complete
withdrawal. With respect to any Multiemployer Plan, Seller or Company
have not incurred or otherwise become liable for and are not reasonably
expected to incur or become liable for a "complete withdrawal" or
"partial withdrawal," as such terms are defined in Sections 4203 and 4205
of ERISA, respectively, with respect to events that have occurred before
or as of the Closing. Seller previously has furnished to Buyer complete
and correct summaries of Seller's and Company's contribution history with
respect to each of the Multiemployer Plans set forth in Schedule 2.20.
2.21 Litigation. There is no litigation, action, suit, proceeding
or to the best knowledge of Seller or Company, investigation presently pending
or threatened against Company or a Subsidiary or affecting its assets, property,
business or prospects or restricting or prohibiting the consummation of the
transactions contemplated by this Agreement before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign.
2.22 Insurance. Schedule 2.22 sets forth a list and brief
description of all policies or binders of fire, liability, product liability,
worker's compensation, vehicular and other insurance held by or on behalf of
Company and each Subsidiary. Such policies and binders are valid and enforceable
in accordance with their terms, are in full force and effect, and insure against
risks and liabilities of the kinds and in amounts customarily insured against by
persons of established reputation engaged in the same or a similar business
similarly situated. All premiums on all such policies have been paid to date and
Company has complied with all conditions of such policies and has received no
notice of any failure to comply with the terms of such policies. In addition,
Schedule 2.22 sets forth in respect of such policies and binders (i) the type
and amount of coverage provided thereby, (ii) their respective effective dates
and (iii) any claims made or occurrences reported during the past two (2) years
with respect to products liability and workers compensation.
2.23 Officers, Directors and Key Employees. Schedule 2.23 sets
forth (i) the name and total compensation of each officer and director of
Company or a
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Subsidiary, and each other employee of Company or a Subsidiary whose salary as
of the date hereof equals or exceeds $60,000 per annum, and (ii) all commitments
or agreements by Company or a Subsidiary to increase the wages or to modify the
conditions or terms of employment of any such employees.
2.24 Conditions of Tangible Assets and Inventories.
(a) All items of machinery, equipment and other tangible
assets of Company and each Subsidiary are in good operational condition,
have been regularly and properly serviced and maintained in a manner that
would not void or limit the coverage of any warranty thereon, other than
items currently under, or scheduled for, repair or construction, and are
adequate and fit to be used for the purposes for which they are currently
used in the manner they are currently used.
(b) The inventory of the Company and the Subsidiaries
consist of items of merchantable quality and quantity usable or salable
in the ordinary course of business, and are salable at prevailing market
prices not less than the book value amounts thereof, and are not
obsolete, damaged, slow-moving or defective. No item included in the
inventory has been the subject of recall by a government agency. The
value at which inventories are carried on the Recent Balance Sheet
reflects the customary inventory valuation policy of Company (which
fairly reflects the value of obsolete, spoiled or excess inventory) for
stating inventory in accordance with GAAP consistently applied.
2.25 Bank Accounts. Schedule 2.25 sets forth the names and
locations of all banks, trust companies, savings and loan associations and other
financial institutions at which each of Company and the Subsidiaries maintain
accounts of any nature, the account numbers of all such accounts and the names
of all persons authorized to draw thereon or make withdrawals therefrom.
2.26 Powers of Attorney; Guarantees. Except as set forth in
Schedule 2.26, neither Company nor any Subsidiary has an obligation to act under
any outstanding power of attorney or any obligation or liability, either
accrued, accruing or contingent, as guarantor, surety, consignor, endorser
(other than for purposes of collection in the ordinary course of the business),
co-maker or indemnitor in respect of the obligation of any person, corporation,
partnership, joint venture, association, organization or other entity.
2.27 Relations with Suppliers. No supplier has canceled any
contract or order for provisions of, and there has been no threat by any
supplier not to provide, products, supplies, or services (including utilities)
to Company or any Subsidiary within the twelve (12) months immediately preceding
the date of this Agreement.
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Each of Company's and the Subsidiaries' relationships with its suppliers are
commercially satisfactory.
2.28 Relations with Customers. Except as set forth in Schedule
2.28, no customer has canceled any contract or order for provisions of, and
there has been no threat by any customer not to purchase (or to reduce its
purchases of), products from Company or any Subsidiary within the twelve (12)
months immediately preceding the date of this Agreement. Each of Company's and
the Subsidiaries relationships with its customers are commercially satisfactory.
2.29 Accounts Receivables. All of the accounts receivable owing to
each of Company and the Subsidiaries as of the date of this Agreement
constitute, and as of the Closing Date will constitute, valid and enforceable
claims arising from bona fide transactions in the ordinary course of business
and will be fully collected within sixty (60) days after the date when first
due, and there has been no notice of any claims, refusals to pay or other
claimed rights of set off against any thereof. (i) No third party account debtor
is delinquent in its payment in the aggregate more than $10,000 by more than
sixty (60) days; (ii) no account debtor has refused or threatened to refuse to
pay its obligations for any reason; (iii) no account debtor is insolvent or
bankrupt; and (iv) no account receivable is pledged to any third party.
2.30 Transactions with Affiliates. Schedule 2.30 is a true,
correct and complete list of all existing business relationships between each of
Company and the Subsidiaries and any of the officers, directors or shareholders
thereof or any of such officer's, director's, or shareholder's Affiliates. No
officer or employee of Company or any Subsidiary or Seller or any of Seller's
Affiliates has any material interest in any property, real or personal, tangible
or intangible of Company or any Subsidiary, is indebted or otherwise obligated
to Company or any Subsidiary, has any contractual relationship with Company or
any Subsidiary or is an officer, director, employee or consultant of a
competitor of Company or any Subsidiary. Neither Company nor any Subsidiary is
indebted or otherwise obligated to any such person, except for amounts due under
normal arrangements applicable to all employees generally as to salary or
reimbursement of ordinary business expenses not unusual in amount or
significance. The consummation of the transactions contemplated by this
Agreement will not (either alone, or upon the occurrence of any act or event, or
with the lapse or time, or both) result in any benefit or payment (severance or
other) arising or becoming due from Company or any Subsidiary or the successor
or assign of any thereof to any person.
2.31 Data Processing. Company's and each Subsidiary's records, to
the extent they contain important information that is not easily and readily
available elsewhere, have been duplicated, and such duplicates are stored safely
and securely pursuant to procedures and techniques utilized by companies of
comparable size in similar lines of business. The data processing equipment,
data transmission
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equipment, related peripheral equipment and software used by the foregoing in
the operation of the business to generate and retrieve such records are
comparable in performance, condition and capacity with those utilized by
companies of comparable size in similar lines of business and have been since
December 31, 1999, free from limitations on capacity or readiness to accept,
create, manipulate, sort, sequence, calculate, compare or output calendar date
information, including, but not limited to, functionality of peripheral
interfaces, firmware and embedded microchips
2.32 Brokerage. No broker, finder or investment banker has acted
directly or indirectly for Company, Seller or any Affiliate thereof in
connection with this Agreement or the transactions contemplated hereby. No
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in respect of any such transaction based in any way on
agreements, arrangements or understandings made by or on behalf of Company,
Seller or any Affiliate thereof.
2.33 Accuracy of Representations. No representation, warranty,
statement or schedule furnished by Seller or Company to Buyer in connection with
the transactions contemplated hereby contains any untrue statement of any
material fact or omits to state any material fact necessary in order to make the
statements contained herein or therein not misleading.
3. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller that the statements
contained in this Article III are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Article III):
3.1 Organization and Standing. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of Delaware,
has the requisite power to own, lease and operate its assets, properties and
business and is duly qualified as a foreign corporation in good standing under
the laws of each state or jurisdiction in which either the ownership or use of
the properties owned or used by it, or the nature of the activities conducted by
it, requires such qualification.
3.2 Authority. Buyer has all requisite corporate power and
authority to execute and deliver this Agreement and each Transaction Document
and to perform its obligations hereunder and thereunder. This Agreement has
been, and each Transaction Document will be prior to the Closing, duly
authorized, executed and delivered by Buyer, and (assuming the due
authorization, execution and delivery by Seller and Company) this Agreement
constitutes, and each Transaction Document when so executed and delivered will
constitute, the legal, valid and binding obligations of Buyer enforceable
against Buyer in accordance with its terms except to the extent
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that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
affecting the enforcement of creditors' rights generally, and general principles
of equity (regardless of whether enforcement is considered in a proceeding at
law or in equity).
3.3 No Violation of Law and Agreements. Except as set forth on
Schedule 3.3, the execution and delivery by Buyer of this Agreement and each
Transaction Document, and the performance by Buyer of its obligations hereunder
or thereunder, does not and will not:
(a) violate any provision of the Certificate of
Incorporation or Bylaws of Buyer;
(b) (i) violate any provision of Applicable Law relating to
Buyer; (ii) violate any provision of any order, arbitration award,
judgment or decree to which Buyer is subject; or (iii) require a
registration, filing, application, notice, consent, approval, order,
qualification or waiver with, to or from any Governmental Authority; or
(c) (i) require a consent, approval or waiver from, or
notice to, any party to any contract to which Buyer or any Affiliate
thereof is a party; or (ii) result in a breach of or cause a default
under any provision of a contract to which Buyer or any Affiliate thereof
is a party.
3.4 Brokerage. No broker, finder or investment banker has acted
directly or indirectly for Buyer or any Affiliate thereof in connection with
this Agreement or the transactions contemplated hereby. No broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in respect of any such transaction based in any way on agreements,
arrangements or understandings made by or on behalf of Buyer or any Affiliate
thereof.
4. COVENANTS AND AGREEMENTS OF SELLER AND COMPANY
4.1 Conduct of Business. From the date hereof through the Closing
Date, Seller shall cause Company to, and Company shall, carry on its business
and Company shall cause each Subsidiary to carry on each of its business,
substantially in the manner in which they are presently conducted and, without
the prior written consent of Buyer, not to undertake any of the actions
specified in Section 2.10.
4.2 Efforts to Close. From the date hereof through the Closing
Date, Seller and Company shall use commercially reasonable efforts to take, or
cause to be taken, all actions, and shall do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated hereby (including, without limitation,
using commercially
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reasonable efforts to satisfy Buyer's conditions to Closing), and shall
cooperate with Buyer in connection with the foregoing.
4.3 Continued Effectiveness of Representations and Warranties of
Seller. From the date hereof through the Closing Date, (i) Seller shall, and
Seller shall cause Company to, use its commercially reasonable efforts to
conduct its affairs in such a manner so that, except as otherwise contemplated
or permitted by this Agreement, the representations and warranties contained in
Article II shall continue to be true and complete on and as of the Closing Date
as if made on and as of the Closing Date, and (ii) Company and Seller shall
promptly notify Buyer of any event, condition or circumstance occurring from the
date hereof through the Closing Date that would constitute a violation or breach
of this Agreement by Seller or Company and of any changes to any of the
Disclosure Schedules; provided, however, that such disclosure shall not be
deemed to cure any breach of a representation, warranty, covenant or agreement
or to satisfy any condition. Notwithstanding the foregoing, Company shall not be
liable for any breach of the representations and warranties contained in Article
II.
4.4 Corporate Examinations and Investigations. Prior to the
Closing Date, Buyer shall be entitled, through its employees, agents and
representatives, to make such investigation of the assets, liabilities,
properties, business and operations of Company and the Subsidiaries, and such
examination of the books, records and financial condition of Company and the
Subsidiaries, as Buyer reasonably determines is necessary. Without limiting the
foregoing, Buyer shall have the right, at its sole cost and expense, to (i)
conduct tests of the soil, surface or subsurface waters and air quality at, in,
on, beneath or about the Facilities, and such other procedures as may be
recommended by independent environmental consultants selected by Buyer (the
"Consultant(s)") based on its reasonable professional judgment, in a manner
consistent with good engineering practice, (ii) inspect records, reports,
permits, applications, monitoring results, studies, correspondence, data and any
other information or documents relevant to Environmental Conditions or
environmental noncompliance, and (iii) inspect all buildings and equipment at
the Owned Property and the Facilities including, without limitation, the visual
inspection of the Facilities for asbestos-containing construction materials;
provided, however, that in each case, such tests and inspections shall be
conducted only (i) during regular business hours; and (ii) in a manner which
will not unduly interfere with the operation of Company's business or the use
of, access to or egress from the Facilities.
4.5 Assignment of Leaseholds. Seller and Company shall obtain from
the lessors or sublessors of the Leased Property, as Buyer shall request,
estoppel certificates addressed to Buyer and Company stating (i) that the
applicable lease is and will continue to be in full force and effect and has not
been modified or amended, except as indicated in such certificate, and neither
the Landlord nor Company is in
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default thereunder, (ii) the expiration date of the term thereunder, (iii) the
rent and other charges payable thereunder and (iv) the date through which rent
and other charges have been paid thereunder.
4.6 Insurance. From the date hereof through the Closing Date,
Seller shall cause Company and the Subsidiaries to maintain, and Company shall
maintain and cause the Subsidiaries to maintain, in full force and effect
(including necessary renewals thereof) the insurance policies listed on Schedule
2.22, except to the extent that they may be replaced with equivalent policies
appropriate to insure the assets, properties and business of Company and the
Subsidiaries to the same extent as currently insured.
4.7 Cooperation. Company and Seller shall provide Buyer or its
Representatives with any other document related to Company and the Subsidiaries
that Buyer may reasonably request and shall otherwise cooperate (i) in Buyer's
examination of Company and the Subsidiaries, and (ii) with Buyer's financing
sources.
4.8 WARN Act. Seller shall give notice of any "plant closing" or
"mass layoff," as such terms are defined in the WARN Act and the regulations
promulgated thereunder (the "WARN Act"), which occur up to and including the
Closing Date, and Seller shall indemnify and hold Buyer harmless for any and all
liability arising from a failure to give such notice or arising from a plant
closing or mass layoff occurring prior to or on the Closing Date.
4.9 Expenses. Seller shall bear all expenses incurred on behalf of
Seller, Company or any Subsidiary in connection with the preparation, execution
and performance of this Agreement and the transactions contemplated hereby,
including, without limitation, all fees and expenses of its agents,
representatives, counsel and accountants and shall reimburse Buyer promptly upon
demand for one-half of (i) any costs incurred by Buyer in connection with the
preparation or negotiation of this Agreement or the Management Incentive
Agreements referred to in Section 7.12, and (ii) any costs incurred by the
independent directors of Buyer in connection with the fairness opinion referred
to in Section 7.14.
4.10 Further Assurances. Seller and Company shall execute such
documents and other papers and take such further actions as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated hereby.
4.11 Hart-Scott-Rodino. Seller and Company shall promptly take all
such action as may be necessary, desirable or convenient to satisfy the
requirement of filing notification under the HSR Act and the rules of the FTC
thereunder and to comply at the earliest practicable date with any request for
additional information received by it from the FTC or from Justice pursuant to
the HSR Act. Seller and
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Company shall use all commercially reasonable efforts to assist Buyer in
complying with its obligations under Section 5.4 hereof.
4.12 No Solicitation of Transactions. Neither Seller nor Company
shall, directly or indirectly, solicit, encourage, initiate or hold discussions
or negotiations with, provide any nonpublic information to, or enter into any
agreement with, any Person (other than Buyer and its employees, representatives
and agents) with respect to a merger, consolidation, sale of a substantial
amount of assets, sale of securities or acquisition of beneficial ownership of
Company or any Subsidiary.
4.13 Noncompetition.
(a) As used in this Agreement, the term "Competitive
Activity" shall mean any participation in, ownership of any interest in,
acceptance of business from or assistance, promotion or organization of
any person, partnership, corporation, firm, association or other business
organization, entity or enterprise which, directly or indirectly, is
engaged in, or hereinafter engages in, research on, or development,
production, marketing or selling of Schottky wafers.
(b) Until December 31, 2004, Seller shall refrain from,
without the prior written consent of Buyer in each instance, directly or
indirectly, engaging in any Competitive Activity in any of the following
geographic areas:
(1) the State of California;
(2) the United States of America;
(3) the United States of America, The People's
Republic of China and Taiwan; and
(4) anywhere in the world.
(c) Seller shall not, without the prior written consent of
Buyer in each instance, disclose or use in any way any confidential
business or technical information or trade secret of Company, whether or
not patentable, copyrightable or otherwise protected by law
(collectively, the "Trade Secrets"), including, without limitation, any
information concerning Company Intellectual Property, customer lists,
products, designs, processes, procedures, operations, investments,
financing, costs, employees, purchasing, accounting, marketing,
merchandising, sales, salaries, pricing, profits and plans for future
development, the identity, requirements, preferences, practices and
methods of doing business of specific parties with whom Company transacts
business, and all other information which is related to any product,
service or business of Company,
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other than information which is generally known in the industry in which
Company transacts business or is acquired from public sources; all of
which Trade Secrets are the exclusive and valuable property of Company.
(d) Seller shall not, directly or indirectly, employ or
offer to employ, call on, solicit, interfere with or attempt to divert or
entice away any employee or independent contractor of Company (or any
person whose employment or status as an independent contractor has
terminated within the twelve (12) months preceding the date of such
solicitation) in any capacity if that person possesses or has knowledge
of any Trade Secrets of Company.
Seller hereby acknowledges and agrees that it would be difficult
to fully compensate Buyer for damages resulting from the breach or threatened
breach of the foregoing provisions and, accordingly, that Buyer shall be
entitled to temporary and injunctive relief, including temporary restraining
orders, preliminary injunctions and permanent injunctions, to enforce such
provisions without the necessity of proving actual damages and without the
necessity of posting any bond or other undertaking in connection therewith. This
provision with respect to injunctive relief shall not, however, diminish Buyer's
right to claim and recover damages.
4.14 Inventory and Accounts Receivable. (a) Seller and Buyer shall
each review the inventory and accounts receivable of Company and the
amounts reserved by Company in connection therewith, and Seller shall
cause the financial statements of Company as of the Closing Date to
reflect such increase or decrease in such reserves as to which Seller and
Buyer mutually shall agree. Any such change in reserves shall have no
effect on the Purchase Price.
4.15 Indebtedness. From the date hereof through the Closing Date,
Company shall refrain from paying, and Seller shall cause Company to refrain
from paying, any indebtedness of Company to Seller or Citibank.
5. COVENANTS AND AGREEMENTS OF BUYER
5.1 Efforts to Close. From the date hereof through the Closing
Date, Buyer shall use commercially reasonable efforts to take, or cause to be
taken, all actions, and shall do, or cause to be done, all things necessary,
proper or advisable to consummate and make effective as promptly as practicable
the transactions contemplated hereby (including, without limitation, using
commercially reasonable efforts to satisfy Seller's conditions to Closing), and
shall cooperate with Seller in connection with the foregoing.
5.2 Expenses. Except as set forth in Section 4.9, Buyer shall bear
all expenses incurred on behalf of Buyer in connection with the preparation,
execution and performance of this Agreement and the transactions contemplated
hereby,
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including, without limitation, all fees and expenses of its agents,
representatives, counsel, and accountants.
5.3 Further Assurances. Buyer shall execute such documents and
other papers and take such further actions as may be reasonably required or
desirable to carry out the provisions hereof and the transactions contemplated
hereby.
5.4 Hart-Scott-Rodino. Buyer shall promptly take all such action
as may be necessary, desirable or convenient to satisfy the requirement of
filing notification under the HSR Act and the rules of the FTC thereunder and to
comply at the earliest practicable date with any request for additional
information received by it from the FTC or from Justice pursuant to the HSR Act.
Buyer shall use all commercially reasonable efforts to assist Seller in
complying with its obligations under Section 4.11 hereof.
6. CONDITIONS TO THE OBLIGATIONS OF SELLER
The obligation of Seller to complete the transactions contemplated
hereby is subject to the fulfillment on or prior to the Closing Date of the
following conditions, any one or more of which may be waived by it, to the
extent permitted by law.
6.1 Representations and Warranties. The representations and
warranties of Buyer contained herein shall be true and complete on and as of the
Closing Date as though made at and as of that date, and Buyer shall have
delivered to Seller a certificate to such effect.
6.2 Compliance with Covenants. Buyer shall have performed and
complied with all terms, agreements, covenants and conditions of this Agreement
to be performed or complied with by it on or prior to the Closing Date, and
Buyer shall have delivered to Seller a certificate to that effect.
6.3 Corporate Action. Buyer shall have delivered to Seller (i)
certified copies of Buyer's Certificate of Incorporation, Bylaws and resolutions
of Buyer's Board of Directors, in form reasonably satisfactory to Seller,
approving the execution and delivery of this Agreement and each Transaction
Document and the performance of Buyer's obligations hereunder and thereunder;
(ii) a certificate of good standing with respect to Buyer issued by the
appropriate Governmental Authority of Buyer's jurisdiction of incorporation
showing that Buyer is in good standing in such jurisdiction, dated within ten
(10) business days prior to the Closing Date; and (iii) an incumbency
certificate of Buyer, certified by the Secretary or Assistant Secretary of
Buyer.
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6.4 Litigation. On the Closing Date, there shall be no Action
pending or threatened pertaining to the transactions contemplated hereby or to
their consummation.
6.5 Absence of Adverse Governmental Action. No action shall have
been taken, proposed or threatened and no statute, rule, regulation or order
shall have been proposed, enacted or entered by any Governmental Authority or by
any court with jurisdiction over the transactions contemplated hereby that
threatens to prohibit or unduly delay consummation of such transactions on the
terms and provisions herein set forth.
6.6 Filings; Consents; Waiting Periods. All registrations,
filings, applications, notices, consents, approvals, orders, qualifications and
waivers listed in Schedule 2.7, shall have been filed, made or obtained, and all
waiting periods applicable under the HSR Act shall have expired or been
terminated.
6.7 Approval of Documentation. 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.
6.8 Payment of Indebtedness. On the Closing Date, Company shall
deliver to Seller a promissory note in substantially the form attached hereto as
Exhibit A representing Company's outstanding indebtedness to Seller, together
with all interest accrued thereon, as of the Closing Date.
7. CONDITIONS TO THE OBLIGATIONS OF BUYER
The obligation of Buyer to complete the transactions contemplated
hereby is subject to the fulfillment on or prior to the Closing Date of the
following conditions, any one or more of which may be waived by it, to the
extent permitted by law.
7.1 Representations and Warranties. The representations and
warranties of Seller contained herein shall be true and complete on and as of
the Closing Date as though made at and as of that date, and Seller shall have
delivered to Buyer a certificate to such effect.
7.2 Compliance with Covenants. Seller and Company shall have
performed and complied with all terms, agreements, covenants and conditions of
this Agreement to be performed or complied with by it on or prior to the Closing
Date, and Seller and Company shall have delivered to Buyer a certificate to that
effect.
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7.3 Corporate Action. Seller shall have delivered to Buyer (i)
certified copies of Seller's and Company's Certificates of Incorporation, Bylaws
and resolutions of Seller's and Company's Board of Directors, in form reasonably
satisfactory to Buyer, approving the execution and delivery of this Agreement
and each Transaction Document and the performance of Seller's and Company's
obligations hereunder and thereunder; (ii) a certificate of good standing with
respect to Seller and Company issued by the appropriate Governmental Authority
of such Person's jurisdiction of incorporation showing that such Person is in
good standing in such jurisdiction, dated within ten (10) business days prior to
the Closing Date; and (iii) an incumbency certificate of Seller and Company,
certified by the Secretary or Assistant Secretary of each such Person.
7.4 Litigation. On the Closing Date, there shall be no Action
pending or threatened pertaining to the transactions contemplated hereby or to
their consummation.
7.5 Absence of Adverse Governmental Action. No action shall have
been taken, proposed or threatened and no statute, rule, regulation or order
shall have been proposed, enacted or entered by any Governmental Authority or by
any court with jurisdiction over the transactions contemplated hereby that
threatens to prohibit or unduly delay consummation of such transactions on the
terms and provisions herein set forth.
7.6 Filings; Consents; Waiting Periods. All registrations,
filings, applications, notices, consents, approvals, orders, qualifications and
waivers listed in Schedule 3.3, shall have been filed, made or obtained, and all
waiting periods applicable under the HSR Act shall have expired or been
terminated.
7.7 Approval of Documentation. 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.
7.8 Financing. Buyer shall have closed the financing arrangements
described in Exhibit C.
7.9 No Material Adverse Changes. Since the date hereof, there
shall not have been any material adverse changes in the consolidated financial
condition, the results of operations or prospects of Company, and Company on a
consolidated basis shall not have sustained any material loss or damage, whether
or not insured.
7.10 Resignations. Buyer shall have received resignations from
each director and officer of Company.
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7.11 Estoppel Certificates. Buyer shall have received and approved
the estoppel certificates required by Section 4.5.
7.12 Management Incentive Agreements. On the Closing Date, each
party thereto shall have executed and delivered a Management Incentive Agreement
in the form attached hereto as Exhibit B between Company and each employee whose
name is set forth on Schedule 7.12.
7.13 Lease Assignment. Buyer shall receive executed assignments of
the Leases in a form acceptable to Buyer.
7.14 Fairness Opinion. On the Closing Date, Buyer shall have
received an opinion of Duff & Phelps (or such other firm as the Board of
Directors of Buyer shall determine in its sole and absolute discretion) in form
and substance acceptable to the Board of Directors of Buyer in their sole and
absolute discretion to the effect that the terms of the transactions
contemplated by this Agreement are fair to the stockholders of Buyer (other than
Seller) from a financial point of view.
8. INDEMNIFICATION
8.1 Survival. Each covenant, agreement, representation and
warranty contained herein shall survive the Closing.
8.2 Seller's Obligation to Indemnify. From and after the Closing,
Seller shall indemnify, defend and hold harmless Buyer (and its directors,
officers, employees, affiliates (other than Seller) and assigns) from and
against all Losses resulting from or arising out of any inaccuracy in or any
breach of any representation, warranty, covenant or agreement of Seller or
Company contained herein or in any Transaction Document.
8.3 Buyer's Obligation to Indemnify. From and after the Closing,
Buyer shall indemnify, defend and hold harmless Seller (and its directors,
officers, employees, Affiliates and assigns) from and against all Losses
resulting from or arising out of any inaccuracy in or any breach of any
representation, warranty, covenant or agreement of Buyer contained herein or in
any Transaction Document.
8.4 Notice of Asserted Liability. Promptly after the party
entitled to Indemnification ("Indemnitee") becomes aware of any fact, condition
or event that may give rise to Losses for which indemnification may be sought
under this Article VIII, Indemnitee shall give notice thereof in the manner
provided in this Section 8.4 (the "Claims Notice") to the indemnifying party
("Indemnitor"). The Claims Notice shall include a description in reasonable
detail of any claim or the commencement (or threatened commencement) of any
action, proceeding or investigation (an "Asserted Liability") against
Indemnitee, and shall indicate the
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amount (estimated, if necessary) of the Losses that have been or may be suffered
by Indemnitee. Failure of Indemnitee to promptly give notice hereunder shall not
affect the rights to indemnification hereunder, except to the extent that
Indemnitor demonstrates actual damage caused by such failure. Upon Indemnitor's
request, Indemnitee shall provide Indemnitor with full and unrestricted access
to all books and records relating to the Asserted Liability, and to all
employees or other persons who are knowledgeable about such Asserted Liability,
in order to allow Indemnitor to audit the status of such Asserted Liability and
the payments that have been, or will be, made with respect thereto.
8.5 Opportunity to Defend. Indemnitor may elect to compromise or
defend, at its own expense and by its own counsel, any Asserted Liability;
provided, however, that Indemnitor may not compromise or settle any Asserted
Liability without the consent of Indemnitee, such consent not to be unreasonably
withheld, unless such compromise or settlement requires no more than a monetary
payment for which Indemnitee and any other indemnifiable parties hereunder are
fully indemnified. If Indemnitor elects to compromise or defend such Asserted
Liability, it shall within 15 days (or sooner, if the nature of the Asserted
Liability so requires) notify Indemnitee of its intent to do so and Indemnitee
shall cooperate in the compromise of, or defense against, such Asserted
Liability. If Indemnitor elects not to compromise or defend any Asserted
Liability, fails to notify Indemnitee of its election as herein provided or
contests its obligation to indemnify, Indemnitee may pay, compromise or defend
such Asserted Liability without prejudice to any right it may have hereunder. In
any event, each of Buyer and Seller may participate, at its own expense, in the
defense of any Asserted Liability in respect of which it may have an
indemnification obligation hereunder. If either party chooses to defend or
participate in the defense of any Asserted Liability, it shall have the right to
receive from the other party any books, records or other documents within such
party's control that are necessary or appropriate for such defense.
8.6 Tax Adjustment. Any amounts payable by an Indemnitor to or on
behalf of an Indemnitee in respect of a Loss will be adjusted as follows: If an
Indemnitee is liable for any additional taxes as a result of the payment of
amounts in respect of an indemnifiable claim, the Indemnitor will pay to the
Indemnitee in addition to such amounts in respect of the Loss within ten days
after being notified by the Indemnitee of the payment of such liability (x) an
amount equal to such additional taxes (the "Tax Reimbursement Amount") plus (y)
any additional amounts required to pay additional taxes imposed with respect to
the Tax Reimbursement Amount and with respect to amounts payable under this
clause (y), with the result that the Indemnitee will have received from the
Indemnitor, net of the payment of taxes, an amount equal to the Loss.
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8.7 Waiver of Subrogation and Other Rights. An Indemnitee will not
be required to proceed against any particular Indemnitor for indemnification or
otherwise in respect of any Losses before enforcing its rights hereunder against
any other Indemnitor, and each Indemnitor expressly waives all rights it may
have, now or in the future, under any statute, at common law, or at law or in
equity, or otherwise, to compel an Indemnitee to proceed against any Indemnitor
in respect of any Losses before proceeding against, or as a condition to
proceeding against, any other Indemnitor.
8.8 No Contribution. Anything to the contrary herein
notwithstanding, Seller shall not have any right to seek any indemnification or
contribution from or remedy against Company, whether arising prior to or after
the Closing Date, in respect of any breach of any representation or warranty by
Company or the failure of Company to comply with any covenant or agreement to be
performed by Company on or prior to the Closing Date, and Seller hereby waives
any such claim it may have against Company with respect thereto whether at law,
in equity or otherwise.
8.9 Non-Exclusive Remedy. The provisions for indemnification set
forth in this Article VIII are not the exclusive remedies of the parties hereto
with respect to the matters addressed in this Article VIII.
9. TAX MATTERS
9.1 Tax Returns. Seller and Buyer agree that for the period from
the end of the most recently ended taxable year of Company through the close of
the Closing Date, Company will file separate federal and Missouri Income Tax
Returns prepared in accordance with this Agreement. Seller shall pay any and all
federal, Missouri and other Taxes imposed or assessed at any time upon Company
or any Subsidiary or any of their assets or with respect to any receipts,
income, sales, transactions or other business activities of any of Company or
any Subsidiary with respect to the period through the close of the Closing Date
and any period ended before that time. Any amount owed by Seller pursuant to the
immediately preceding sentence shall be paid within the later of fifteen (15)
days after Buyer's request for such payment and five (5) days prior to the date
on which Buyer is required to pay or cause to be paid any such Tax.
9.2 Tax Sharing Agreements. Any Tax sharing or allocation
agreement or obligation between Company and Seller is and shall be terminated as
of the Closing Date and thereupon shall have no further effect for any taxable
year (whether the current year, a future year or a past year).
9.3 Clearance Certificates. Seller shall furnish to Buyer such
clearance certificates or similar documents that may be required by any federal,
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foreign, state, local or other taxing authority in order to relieve Buyer of any
obligations to withhold any portion of the Purchase Price.
9.4 Transfer Taxes. Seller shall pay all sales, use, transfer,
real property, documentary and stamp taxes and recording and filing fees
applicable to any transaction contemplated by this Agreement.
9.5 Seller's Tax Indemnity. Seller shall indemnify and hold Buyer
and Company harmless from and against the entirety of any Taxes which Seller is
responsible or required to pay under any provision of this Agreement and from
and against any Losses that Buyer may suffer resulting from, arising out of,
relating to, in the nature of or caused by any liability of Buyer or Company for
any such Taxes; any liability with respect to any Taxes arising from any changes
made on examination or audit; any liability of any of Company or any Subsidiary
for Taxes of any person other than Company, whether (i) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local or foreign
law), (ii) as a transferee or successor, (iii) by contract, or (iv) otherwise;
any liability for Taxes arising from the use tax audit described on Schedule
2.11; and any liability for Taxes which would not be owed if all warranties and
representations of Seller or Company hereunder had been true, complete and
correct in all respects. Any indemnification pursuant hereto shall also include
reasonable costs incurred by Buyer or Company (including reasonable fees and
disbursements of attorneys, accountants and expert witnesses) in connection with
such indemnification claim. Any indemnification payable by Seller pursuant
hereto shall be paid within the later of fifteen (15) days of Buyer's request
therefor and five (5) days prior to the date on which the liability upon which
the indemnification is based is required to be satisfied.
10. TERMINATION OF AGREEMENT
10.1 Termination. This Agreement may be terminated prior to the
Closing as follows:
(a) at the election of Seller, if any one or more of the
conditions to its obligation to close has not been fulfilled by March 31,
2001;
(b) at the election of Buyer, if any one or more of the
conditions to its obligation to close has not been fulfilled by March 31,
2001;
(c) at the election of Seller, if Buyer has materially
breached any material representation, warranty, covenant or agreement
contained herein; provided, however, that Seller shall have no
termination right hereunder if the other conditions to the obligation of
Seller to consummate the transactions contemplated herein shall have been
satisfied, unless such representation, warranty, covenant or agreement
shall not have been cured by Buyer by the
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earlier of (i) March 31, 2001, or (ii) forty-five (45) days after Buyer
shall have received written notice from Seller that it intends to
exercise its right to terminate under this subparagraph (c);
(d) at the election of Buyer, if Seller or Company has
materially breached any material representation, warranty, covenant or
agreement contained herein; provided, however, that Buyer shall have no
termination right hereunder if the other conditions to the obligation of
Buyer to consummate the transactions contemplated herein shall have been
satisfied, unless such representation, warranty, covenant or agreement
shall not have been cured by Seller or Company by the earlier of (i)
March 31, 2001, or (ii) forth-five (45) days after Seller or Company
shall have received written notice from Buyer that it intends to exercise
its right to terminate under this subparagraph (d);
(e) at the election of Seller, on the one hand, or Buyer,
on the other hand, if any action shall have been instituted and be
continuing by any Governmental Authority with proper authority to
restrain, modify or prohibit the carrying out of the transactions
contemplated hereby; provided, however, that neither Seller nor Buyer
shall have any termination right hereunder if the other conditions to the
obligation of Seller or Buyer, as the case may be, to consummate the
transactions contemplated herein shall have been satisfied, unless such
action, suit or proceeding shall not have been stayed or terminated by
the later of (i) March 31, 2001, or (ii) sixty (60) days after the
commencement of such action, suit or proceeding becomes known to Buyer or
Seller, as the case may be; and
(f) at any time on or prior to the Closing Date, by mutual
written consent of Seller and Buyer.
If Buyer or Seller, as the case may be, elects to terminate this
Agreement pursuant to Section 10.1(a), (b), (c), (d) or (e) hereof, the
terminating party shall deliver a notice to the other party hereto declaring its
election to so terminate this Agreement in accordance with the provisions of
Section 10.1(a), (b), (c), (d) or (e), as the case may be, and setting forth
therein the basis for such termination.
10.2 Survival. If this Agreement is terminated, this Agreement
shall become void and of no further force and effect, except for the provisions
of this Agreement relating to the obligation of Buyer to keep confidential and
not to use certain information and data obtained by it from Seller or any
Affiliate thereof and except for the provisions of Sections 4.9 and 5.2 hereof,
Article VIII, IX and this Article X. None of the parties hereto shall have any
liability in respect to a termination of this Agreement pursuant to this Article
X, except to the extent that
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failure to satisfy the conditions of Articles VI and VII, as applicable, results
from the intentional or willful breach or violation of the representations,
warranties, covenants or agreements of such party under this Agreement. For
purposes of the preceding sentence, the failure of any party to comply with its
respective obligations under Article I promptly after all conditions to such
compliance shall have been fulfilled, shall constitute an intentional or willful
violation of the agreement herein contained by such failing party.
10.3 Return of Materials. If this Agreement is terminated for any
reason whatsoever, each party shall return to the other all documents, work
papers and other material (including all copies thereof) obtained in connection
with the transactions contemplated hereby and will use all commercially
reasonable efforts, including instructing its employees, agents and
representatives and others who have had access to such information, to keep
confidential and not to use any such information, unless such information is
now, or is hereafter, disclosed, through no act or omission of such party, in
any manner making it available to the general public.
11. MISCELLANEOUS
11.1 Notices. All notices, requests, demands and other
communications required or permitted to be given hereunder or under any
Transaction Document shall be in writing and shall be deemed to have been duly
given (i) upon receipt, if delivered personally, (ii) upon confirmation of
receipt, if given by electronic facsimile and (iii) on the third business day
following mailing, if mailed first-class, postage prepaid, certified mail,
return receipt requested, as follows:
(a) If to Buyer to:
Diodes Incorporated
3050 East Hillcrest Drive
Westlake Village, California 91362
Attention: President
Telecopier: (805) 381-3825
with a copy to:
Sheppard, Mullin, Richter & Hampton LLP
333 South Hope Street, 48th Floor
Los Angeles, California 90071
Attention: Peter M. Menard, Esquire
Telecopier: (213) 620-1398
(b) If to Seller to:
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Lite-On Power Semiconductor Corp.
28-1, Wu Shin St.
Ta Wu Lung Ind. Zone Keelung
Taiwan R.O.C.
Attention: President
Telecopier: (02) 2432-4924 / 2431-1919
with a copy to:
Lien Cheng International Law Office
13 F-1, Sec. 4, Jen Ai Road
Taipei, Taiwan
Attention: Curtis T.Y. Hsieh, Esquire
Telecopier: (02) 278-49922
(c) If to Company to:
FabTech, Inc.
777 Northwest Blue Parkway
Lee's Summit, Missouri 64063
Attention: President
Telecopier: (816) 251 - 8850
with a copy to:
Blackwell Sanders Pepper Martin, LLP
2300 Main Street
Suite 1000
Kansas City, Missouri 64108
Attention: Beverlee Roper, Esquire
Telecopier: (816) 983-8080
Any party may by notice given in accordance with this Section 11.1
to the other parties designate another address or person for receipt of notices
hereunder.
11.2 Entire Agreement. This Agreement (including the Schedules
hereto) and the Transaction Documents contain the entire agreement of the
parties with respect to the purchase of the Shares and related transactions, and
supersedes all prior agreements, representation and warranties, written or oral,
with respect thereto.
11.3 Waivers and Amendments. This Agreement and each Transaction
Document may be amended, superseded, canceled, renewed or extended, and the
terms hereof or thereof may be waived, only by a written instrument signed by
each of the parties hereto or thereto or, in the case of a waiver, by the party
waiving compliance.
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The failure of a party to insist, in any one or more instances, upon performance
of the terms or conditions of this Agreement or any Transaction Document shall
not be construed as a waiver or relinquishment of any right granted hereunder or
of the future performance of any such term, covenant or condition. No waiver on
the part of any party of any right, power or privilege, nor any single or
partial exercise of any such right, power or privilege, shall preclude any
further exercise thereof or the exercise of any other such right, power or
privilege.
11.4 Governing Law. This Agreement and each Transaction Document
shall be governed by and construed in accordance with the substantive and
procedural laws of the State of California applicable to agreements made and to
be performed entirely within such State. The parties hereby agree that any
action, suit, arbitration or other proceeding arising out of or related to this
Agreement or any Transaction Document or the relationship created hereby or
thereby shall be conducted only in Los Angeles County, California. Each party
hereby irrevocably consents and submits to the personal jurisdiction of and
venue in United States District Court for the Central District of California and
in the Superior Court and Municipal Court for Los Angeles County in any legal
action, equitable suit or other proceeding arising out of or related to this
Agreement or any Transaction Document or the relationship between the parties
created hereby or thereby.
11.5 Arbitration. Notwithstanding anything herein to the contrary,
if there shall be a dispute among any of the parties arising out of or relating
to (a) the negotiations of the transactions contemplated by this Agreement or
any Transaction Document; (b) this Agreement or any Transaction Document
(including, without limitation, the issue of arbitrability or the indemnities
provided herein or therein, or the breach thereof); or (c) the transactions
contemplated hereby or thereby, the parties agree that such dispute shall be
resolved by final and binding arbitration in Los Angeles, California,
administered by Judicial Arbitration & Mediation Services, Inc. ("JAMS"), in
accordance with JAMS' rules of practice then in effect or such other procedures
as the parties may agree to. Each party hereby irrevocably consents and submits
to personal jurisdiction in the State of California for any arbitration
contemplated by this Section 11.5. Any award issued as a result of such
arbitration shall be final and binding between the parties thereto, and shall be
enforceable by any court having jurisdiction over the party against whom
enforcement is sought. The fees and expenses of such arbitration (including
reasonable attorneys' fees) or any action to enforce an arbitration award shall
be paid by the party that does not prevail in such arbitration.
11.6 Reference to U.S. Dollars. All references in this Agreement
and in any Transaction Document to amounts of money expressed in dollars are
references to United States dollars, unless otherwise indicated.
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11.7 Binding Effect; Assignment. This Agreement and each
Transaction Document shall be binding upon and inure to the benefit of the
parties and their respective permitted successors and permitted assigns. Neither
this Agreement nor any Transaction Document, nor any of the rights hereunder or
thereunder, may be assigned by any party, nor may any party delegate any
obligations hereunder or thereunder, without the written consent of the other
party hereto or thereto. Any non-permitted assignment or attempted assignment
shall be void. Notwithstanding the foregoing, Buyer may assign this Agreement
and the Transaction Documents, and any of its rights hereunder or thereunder,
and may delegate any of its obligations hereunder or thereunder, to any
Affiliate thereof.
11.8 No Third Party Beneficiaries. Nothing herein is intended or
shall be construed to give any person any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein,
except as otherwise provided herein.
11.9 Counterparts. This Agreement and each Transaction Document
may be executed by the parties in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute one and the same instrument. Each counterpart may consist of
a number of copies hereof or thereof each signed by less than all, but together
signed by all of the parties.
11.10 Schedules and Exhibits. The schedules and exhibits attached
to this Agreement or to any Transaction Document are a part hereof or thereof,
as applicable, as if fully set forth herein or therein.
11.11 Headings, Gender and Person. The headings herein or in any
Transaction Document are for reference only and shall not affect the
interpretation of this Agreement or such Transaction Document. Whenever the
context requires in this Agreement or any Transaction Document, the masculine
pronoun shall include the feminine and the neuter, and the singular shall
include the plural.
11.12 Publicity. All notices to third parties and all other
publicity concerning the transactions contemplated hereby or by any Transaction
Document shall be jointly planned and coordinated by Buyer and Seller.
11.13 Severability. Whenever possible, each provision of this
Agreement and any Transaction Document shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this
Agreement or any Transaction Document is held to be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Agreement or such Transaction
Document. For purpose of determining the scope
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of the covenant set forth in Section 4.13, each of subparagraphs (i), (ii),
(iii) and (iv) shall be considered a separate covenant such that if the
geographic scope of any such subparagraph shall be determined by a court of
competent jurisdiction to be excessive and invalid, such subparagraph shall be
severed and the remaining subparagraphs shall be deemed enforceable and remain
in full force and effect.
11.14 Time of Essence. Time is of the essence for each and every
provision of this Agreement and each Transaction Document.
11.15 Attorneys' Fees. If any legal action or other proceeding is
brought for the enforcement of this Agreement or any Transaction Document, or
because of an alleged dispute, breach, default or misrepresentation in
connection with any of the provisions hereof or thereof, 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 may be entitled.
11.16 Confidential Information. The parties acknowledge that the
transactions described herein are of a confidential nature and shall not be
disclosed except to each party's respective Affiliates, consultants and
advisors, or as required by law, until such time as the parties make a public
announcement regarding the transactions in accordance with Section 11.12 hereof.
In connection with the negotiation of this Agreement and the preparation for the
consummation of the transactions contemplated hereby, each party acknowledges
that it has had and will have access to information relating to the other party
and its Affiliates. Each party shall treat such information as confidential,
preserve the confidentiality thereof and not duplicate or use such information,
except to Affiliates, advisors and consultants in connection with the
transactions contemplated hereby or by any Transaction Document. Seller, at a
time and in a manner which it reasonably determines and after prior notice to
and consultation with Buyer, may notify employees of Company and the
Subsidiaries of the fact of the subject transaction.
11.17 No Publicity; Employee Letters. The parties agree not to
disclose the terms of this Agreement without the other party's prior written
consent, which may be withheld in the sole and absolute discretion of such
party, except for such disclosure as counsel for Buyer shall deem to be required
by SEC rules or applicable securities laws; provided, however, that any such
disclosure to be made by Buyer shall be subject to prior review and reasonable
approval of Seller (including, without limitation, prior review of SEC filings
and press releases regarding the transactions contemplated hereby). The parties
agree that such disclosure requirements will include a public filing by Buyer of
the Agreement and related description of the transactions contemplated hereby in
either a Form 8-K or Form 10-K and a concurrent news release (subject to prior
review and consent in accordance with this
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Section 11.17). The parties agree to jointly prepare a letter to be delivered to
each of Company's employees with regard to the transactions contemplated hereby.
11.18 Mutual Drafting. The parties hereto are sophisticated and
have been represented by lawyers throughout the transactions contemplated hereto
who have carefully negotiated the provisions hereof. As a consequence, the
parties do not intend that the presumptions of California Civil Code Section
1654 and similar laws or rules relating to the interpretation of contracts
against the drafter of any particular clause should be applied to this Agreement
or any Transaction Document and therefore waive their effects.
11.19 Further Assurances. Each party hereto shall execute such
documents and other papers and take such further actions as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated hereby.
11.20 Covenant. Any covenant, term or provision of this Agreement
or any Transaction Document, which in order to be effective must survive the
termination of this Agreement or such Transaction Document, shall survive any
such termination.
12. DEFINITIONS
12.1 Defined Terms. As used herein, the terms below shall have the
following meanings. Any of such terms, unless the context otherwise requires,
may be used in the singular or plural, depending upon the reference.
"Action" means any action, suit, proceeding or investigation
(provided that such investigation is by a Governmental Authority).
"Affiliate" has the meaning set forth in the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder.
"Affiliated Group" means any Affiliated Group within the meaning
of IRC Section 1504, any group of corporations filing a combined report for
purposes of corporate franchise or corporate income tax, and any similar group
defined under a similar provision of state, local or foreign law.
"Applicable Law" means, with respect to any Person, any domestic
or foreign, federal, state or local statute, law, ordinance, rule,
administrative interpretation, regulation, order, writ, injunction, directive,
judgment, decree or other requirement of any Governmental Authority (including
any Environmental Law) applicable to such Person or any of its Affiliates or
Plan Affiliates or any of their respective properties, assets, officers,
directors, employees, consultants or agents (in
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connection with such officer's, director's, employee's, consultant's or agent's
activities on behalf of such Person or any of its Affiliates or Plan
Affiliates).
"Asserted Liability" has the meaning set forth in Section 8.4
hereof.
"Benefit Plan" means any plan, agreement, arrangement or
commitment (whether provided by insurance, self-insurance or otherwise) that is
an employment, consulting or deferred compensation agreement; or an executive
compensation, incentive, bonus, employee pension, profit-sharing, savings,
retirement, stock option, stock purchase or severance pay plan; or a life,
health, post-retirement benefit, worker's compensation, unemployment benefit,
disability or accident plan; or a holiday, vacation, leave of absence, Christmas
or other bonus practice; or expense reimbursement, automobile or other
transportation allowance; or other employee benefit plan, agreement, arrangement
or commitment, including, without limitation, any "employee benefit plan," as
defined in Section 3(3) of ERISA, maintained by Company or with respect to which
Company has or in the future may have, any contribution or other liability or
obligation with respect to any current or former employees of Company, or their
beneficiaries.
"Buyer" has the meaning set forth in the preamble hereof.
"Claims Notice" has the meaning set forth in Section 8.4 hereof.
"Closing" or "Closing Date" have the meanings set forth in Section
1.5 hereof.
"Company" has the meaning set forth in the preamble hereof.
"Company Financial Statements" has the meaning set forth in
Section 2.8 hereof.
"Company Intellectual Property" shall mean any Intellectual
Property that is (i) owned by, (ii) licensed to, or (iii) was developed or
created by or for Company.
"Contracts" has the meaning set forth in Section 2.13 hereof.
"Disclosure Schedule" means a schedule prepared and delivered by
Seller to Buyer pursuant to this Agreement that sets forth the exceptions to the
representations and warranties of Seller contained herein. Unless the context
clearly indicates otherwise, each reference herein to any numbered schedule is a
reference to that numbered schedule which is included in the Disclosure
Schedule.
"Earnout" has the meaning set forth in Section 1.2 hereof.
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"Environmental Condition" means the introduction into the
environment of any pollution, including without limitation any contaminant,
irritant or pollutant or other Hazardous Substance (whether or not upon the
Facilities or other property of the Company or a Subsidiary and whether or not
such pollution constituted at the time thereof a violation of any Environmental
Law as a result of any Release of any kind whatsoever of any Hazardous
Substance) as a result of which Company has or may become liable to any person
or by reason of which the Facilities may suffer or be subjected to any lien.
"Environmental Laws" has the meaning set forth in Section 2.15(b)
hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Facilities" means the Owned Property and the Leased Property.
"Former Facility" means each plant, office, manufacturing
facility, store, warehouse, improvement, administrative building and all real
property and related facilities which was owned, leased or operated by Company
at any time prior to the date hereof, but excluding any Facilities.
"FTC" means the Federal Trade Commission.
"GAAP" means U.S. generally accepted accounting principles.
"Governmental Authority" means any foreign, domestic, federal,
territorial, state or local governmental authority, quasi-governmental authority
or instrumentality, or any regulatory, administrative or other agency, or any
political or other subdivision, department or branch of any of the foregoing.
"Hazardous Substance" shall mean any quantity of asbestos in any
form, urea formaldehyde, PCB's, radon gas, crude oil or any fraction thereof,
all forms of natural gas, petroleum products or by-products, any radioactive
substance, any toxic, infectious, reactive, corrosive, ignitable or flammable
chemical or chemical compound and any other hazardous substance, material or
waste (as defined in or for purposes of any Environmental Law), whether solid,
liquid or gas.
"Holding" means the "common parent" of the Seller Group as that
term is used in the Treasury Regulations promulgated under IRC Section 1502.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the rules and regulations promulgated thereunder.
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"Income Tax" means any federal, state, local or foreign Tax
imposed on or measured by gross or net income or a taxable base in the nature of
gross or net income (including franchise, alternative, minimum, alternative
minimum, add-on, surcharge and other similar Taxes), any Tax imposed in whole or
in part in lieu of any of the foregoing, and in each instance any interest
(including interest on deferred tax liability under Section 453A(c) of the IRC
and "look-back" interest under Section 460 of the IRC and similar amounts of
interest imposed by the IRC), penalties, additions to tax or similar charges
attributable to such Tax.
"Income Tax Return" means any Tax Return that relates to Income
Tax.
"Indemnitee" has the meaning set forth in Section 8.4 hereof
"Indemnitor" has the meaning set forth in Section 8.4 hereof
"Initial Purchase Price" has the meaning set forth in Section 1.2
hereof.
"Intellectual Property" means all trademarks and trademark rights,
trade names and trade name rights, service marks and service mark rights,
service names and service name rights, patents and patent rights, utility models
and utility model rights, copyrights, mask work rights, brand names, trade
dress, product designs, product packaging, business and product names, logos,
slogans, rights of publicity, trade secrets, inventions (whether patentable or
not), invention disclosures, improvements, processes, formulae, industrial
models, processes, designs, specifications, technology, methodologies, computer
software (including all source code and object code), firmware, development
tools, flow charts, annotations, all Web addresses, sites and domain names, all
data bases and data collections and all rights therein, any other confidential
and proprietary right or information, whether or not subject to statutory
registration, and all related technical information, manufacturing, engineering
and technical drawings, know-how and all pending applications for and
registrations of patents, utility models, trademarks, service marks and
copyrights, and the right to sue for past infringement, if any, in connection
with any of the foregoing, and all documents, disks, records, files and other
media on which any of the foregoing is stored.
"IRC" means the Internal Revenue Code of 1986, as amended.
"Justice" means the Antitrust Division of the Department of
Justice.
"Lease" has the meaning set forth in Section 2.14 hereof.
"Leased Property" has the meaning set forth in Section 2.14
hereof.
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"Liability" or "Liabilities" means, with respect to any Person,
any liability or obligation of such Person of any kind, character or
description, whether known or unknown, absolute, contingent or threatened,
secured or unsecured, joint or several, due or to become due, vested or
unvested, executory, determined, determinable or otherwise and whether or not
the same is required to be accrued on the financial statements of such Person.
"Liens" means any mortgage, pledge, assessment, security interest,
lease, lien, easement, license, covenant, condition, restriction, adverse claim,
levy, charge, option, equity, adverse claim or restriction or other encumbrance
of any kind, or any contract to give any of the foregoing, except for any
restrictions on transfer generally arising under any applicable federal or state
securities law.
"Losses" means all losses, costs, claims, liabilities, damages,
lawsuits, demands and expenses (including attorney's fees), and all amounts paid
in the investigation, defense or settlement of any of the foregoing; provided,
however, that Losses shall not mean lost profits. Without limiting the
foregoing, "Losses" is not limited to matters asserted by third parties, but
includes Losses incurred or sustained in the absence of third party claims.
"Multiemployer Plan" has the meaning set forth in Section 2.20
hereof.
"Owned Property" has the meaning set forth in Section 2.14 hereof.
"Pension Plan" has the meaning set forth in Section 2.20 hereof.
"Permits" means all licenses, permits, franchises, approvals,
authorizations, consents or orders of, or filings with, any governmental
authority, whether foreign, federal, state or local, or any other person,
necessary or desirable for the past, present or anticipated conduct of, or
relating to the operation of the business of, Company and any Subsidiary.
"Person" means an individual, corporation, partnership,
association, trust, estate or other entity or organization, including a
Governmental Authority.
"Plan Affiliate" means, with respect to any Person, any employee
benefit plan or arrangement sponsored by, maintained by or contributed to by
such Person, and with respect to any employee benefit plan or arrangement, any
Person sponsoring, maintaining or contributing to such plan or arrangement.
"Purchase Price" has the meaning set forth in Section 1.2 hereof.
"Recent Balance Sheet" has the meaning set forth in Section 2.8
hereof.
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"Release" shall mean and include any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, migrating within the environment or disposing into the environment or
the workplace of any Hazardous Substance, and otherwise as defined in any
Environmental Law.
"Representative" means any officer, director, principal, attorney,
agent, employee or representative.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" has the meaning set forth in the preamble hereof.
"Shares" has the meaning set forth in Recital A hereof.
"Subsidiary" means (i) any corporation in an unbroken chain of
corporations beginning with Seller if each of the corporations other than the
last corporation in the unbroken chain then owns any shares of the capital stock
in one of the other corporations in such chain, (ii) any partnership in which
Company is a general partner, or (iii) any partnership in which Company or any
Subsidiary is a general or a limited partner.
"Tax" or "Taxes" means (whether or not disputed) taxes of any
kind, levies or other like assessments, customs, duties, imposts, charges or
fees, including, without limitation, Income Taxes, gross receipts, ad valorem,
value added, excise, real property, personal property, occupancy, asset, sales,
use, license, payroll, transaction, capital, capital stock, net worth,
estimated, withholding, employment, social security, unemployment, unemployment
compensation, workers' compensation, disability, utility, severance, production,
environmental, energy, business, occupation, mercantile, franchise, premium,
profits, windfall profits, documentary, stamp, registration, transfer and gains
taxes, toll charges (including toll charges under Sections 367 and 1492 of the
IRC), or other taxes of any kind whatsoever, imposed by or payable to the United
States, or any state, country, local or foreign government or subdivision,
instrumentality, authority or agency thereof or under any treaty, convention or
compact between or among any of them, and in each instance such term shall
include any interest (including interest on deferred tax liability under Section
453A(c) of the IRC and "look-back" interest under Section 460 of the IRC and
similar amounts of interest imposed by the IRC), penalties, additions to tax or
similar charges imposed in lieu of a Tax or attributable to any Tax.
"Tax Return or Return" means any return, declaration, report,
claim for refund, information return or statement that relates to Taxes,
including any schedule or attachment thereto and any amendment thereof.
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"Treasury Regulation" means any final, proposed or temporary
regulations promulgated under the IRC.
"Transaction Document" means, when used in reference to a
particular Person, any agreement, document or instrument to be executed by such
Person in connection with the transactions contemplated hereby.
"WARN Act" is the Worker Adjustment and Retraining Notification
Act (29 U.S.C. Sections 2101, et seq.).
"Welfare Plan" has the meaning set forth in Section 2.20 hereof.
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IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the date first above written.
"SELLER"
LITE-ON POWER SEMICONDUCTOR CORP.,
a Taiwan corporation
By /s/ M.K. Lu
M.K. Lu, President
"BUYER"
DIODES INCORPORATED,
a Delaware corporation
By /s/ C.H. Chen
C.H. Chen, President
With respect only to Articles IV, VII, IX, X
and XI:
"COMPANY"
FABTECH, INC.,
a Delaware corporation
By /s/ Walter Buchanan
Walter Buchanan, President
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