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EXHIBIT 2.01
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ASSET PURCHASE AGREEMENT
Dated as of November 20, 2000
Among
CREE, INC.,
a North Carolina corporation
"PARENT,"
ZOLTAR ACQUISITION, INC.,
a North Carolina corporation
"NEWCO,"
and
SPECTRIAN CORPORATION,
a Delaware corporation
"SPECTRIAN"
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TABLE OF CONTENTS
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ASSET PURCHASE AGREEMENT ...........................................................................3
ARTICLE 1 DEFINITIONS ..............................................................................3
SECTION 1.1 DEFINITIONS ..................................................................3
SECTION 1.2 INTERPRETATION ...............................................................9
ARTICLE 2 SALE AND PURCHASE OF ACQUIRED ASSETS AND LIABILITIES .....................................9
SECTION 2.1 PURCHASE AND SALE ............................................................9
SECTION 2.2 ACQUIRED ASSETS AND EXCLUDED ASSETS ..........................................9
SECTION 2.3 ASSUMPTION OF BUSINESS LIABILITIES AND OBLIGATIONS ..........................12
ARTICLE 3 PURCHASE PRICE ..........................................................................14
SECTION 3.1 THE PURCHASE PRICE ..........................................................14
ARTICLE 4 THE CLOSING .............................................................................15
SECTION 4.1 CLOSING DATE ................................................................15
SECTION 4.2 TRANSACTIONS TO BE EFFECTED AT THE CLOSING ..................................15
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF SPECTRIAN .............................................16
SECTION 5.1 SPECTRIAN'S ORGANIZATION; GOOD STANDING .....................................16
SECTION 5.2 AUTHORITY; EXECUTION AND DELIVERY ...........................................16
SECTION 5.3 CONSENTS AND APPROVALS; NO VIOLATIONS .......................................16
SECTION 5.4 FINANCIAL STATEMENTS ........................................................16
SECTION 5.5 TITLE TO ACQUIRED ASSETS ....................................................16
SECTION 5.6 ABSENCE OF CERTAIN CHANGES OR EVENTS ........................................17
SECTION 5.7 EMPLOYMENT MATTERS ..........................................................17
SECTION 5.8 EMPLOYEE BENEFIT PLANS ......................................................18
SECTION 5.9 LITIGATION ..................................................................18
SECTION 5.10 COMPLIANCE WITH LAWS ........................................................18
SECTION 5.11 CONTRACTS ...................................................................19
SECTION 5.12 NO BROKERS ..................................................................20
SECTION 5.13 INTELLECTUAL PROPERTY .......................................................20
SECTION 5.14 ACCREDITED INVESTOR STATUS ..................................................21
SECTION 5.15 RELIANCE ON EXEMPTIONS ......................................................21
SECTION 5.16 TRANSFER OR RESALE ..........................................................21
SECTION 5.17 LEGENDS .....................................................................22
SECTION 5.18 ENVIRONMENTAL COMPLIANCE ....................................................22
SECTION 5.19 ALL ASSETS OF BUSINESS; CONDITION OF ACQUIRED ASSETS ........................24
SECTION 5.20 TAXES .......................................................................24
SECTION 5.21 INVENTORY ...................................................................24
SECTION 5.22 MANUFACTURING YIELDS ........................................................24
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF NEWCO AND PARENT ......................................25
SECTION 6.1 ORGANIZATION AND QUALIFICATION ..............................................25
SECTION 6.2 CAPITALIZATION ..............................................................25
SECTION 6.3 AUTHORITY; EXECUTION AND DELIVERY ...........................................25
SECTION 6.4 CONSENTS AND APPROVALS; NO VIOLATIONS .......................................25
SECTION 6.5 SEC DOCUMENTS ...............................................................26
SECTION 6.6 COMPLIANCE WITH LAW; PERMITS ................................................26
SECTION 6.7 LITIGATION ..................................................................26
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SECTION 6.8 BROKERS AND FINDERS .........................................................26
ARTICLE 7 CERTAIN COVENANTS AND AGREEMENTS ........................................................26
SECTION 7.1 COVENANTS OF SPECTRIAN RELATING TO CONDUCT OF BUSINESS ......................26
SECTION 7.2 NEWCO'S ACCESS TO INFORMATION ...............................................27
SECTION 7.3 PRESERVATION OF RECORDS .....................................................27
SECTION 7.4 LEGAL CONDITIONS TO CLOSING .................................................28
SECTION 7.5 EMPLOYEE BENEFITS ...........................................................28
SECTION 7.6 TAX MATTERS .................................................................29
SECTION 7.7 EXPENSES ....................................................................31
SECTION 7.8 FINANCIAL INFORMATION .......................................................31
SECTION 7.9 BULK TRANSFER LAWS ..........................................................31
SECTION 7.10 ACTIONS OF NEWCO AND SPECTRIAN ..............................................31
SECTION 7.11 NO ADDITIONAL REPRESENTATIONS ...............................................31
SECTION 7.12 HART-SCOTT-RODINO ACT .......................................................32
SECTION 7.13 LEASE .......................................................................32
SECTION 7.14 DELIVERY OF AUDITED FINANCIAL STATEMENTS ....................................33
SECTION 7.15 STUB PERIOD FINANCIAL INFORMATION ...........................................33
SECTION 7.16 LISTING OF ADDITIONAL SHARES ................................................33
SECTION 7.17 NON-COMPETITION; NON-SOLICITATION ...........................................33
SECTION 7.18 ORDERLY DISPOSITION OF STOCK CONSIDERATION ..................................34
SECTION 7.19 EXCLUSIVITY .................................................................34
SECTION 7.20 REGISTRATION RIGHTS .........................................................35
SECTION 7.21 PARENT'S INVESTIGATION PERIOD ...............................................35
ARTICLE 8 CONDITIONS PRECEDENT ....................................................................36
SECTION 8.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS ......................................36
SECTION 8.2 CONDITIONS TO OBLIGATIONS OF PARENT AND NEWCO ...............................37
SECTION 8.3 CONDITIONS TO THE OBLIGATIONS OF SPECTRIAN ..................................38
ARTICLE 9 TERMINATION, AMENDMENT AND WAIVER .......................................................39
SECTION 9.1 TERMINATION .................................................................39
SECTION 9.2 AMENDMENTS AND WAIVERS ......................................................40
ARTICLE 10 INDEMNIFICATION ........................................................................40
SECTION 10.1 INDEMNIFICATION BY SPECTRIAN ................................................40
SECTION 10.2 INDEMNIFICATION BY PARENT AND NEWCO .........................................41
SECTION 10.3 LOSSES NET OF INSURANCE, ETC ................................................42
SECTION 10.4 TERMINATION OF INDEMNIFICATION ..............................................42
SECTION 10.5 PROCEDURE ...................................................................42
ARTICLE 11 GENERAL PROVISIONS .....................................................................43
SECTION 11.1 NOTICES .....................................................................43
SECTION 11.2 HEADINGS ....................................................................44
SECTION 11.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES ..................................44
SECTION 11.4 SEVERABILITY ................................................................44
SECTION 11.5 COUNTERPARTS ................................................................44
SECTION 11.6 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES ..............................44
SECTION 11.7 GOVERNING LAW ...............................................................45
SECTION 11.8 PUBLICITY ...................................................................45
SECTION 11.9 ASSIGNMENT ..................................................................45
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of November 20, 2000 (this
"Agreement"), is by and among Cree, Inc., a North Carolina corporation
("Parent"), Zoltar Acquisition, Inc., a North Carolina corporation and
wholly-owned subsidiary of Parent ("Newco"), and Spectrian Corporation, a
Delaware corporation ("Spectrian").
WHEREAS, Spectrian is engaged, among other things, in the Business
referred to below; and
WHEREAS, Spectrian desires to sell to Newco, and Newco desires to
purchase from Spectrian, substantially all of the assets used in connection with
the Business, all upon the terms and subject to the conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Acquired Assets" shall have the meaning given such term in Section
2.2.
"Affiliate" shall mean, with respect to any person, any other person
that directly or indirectly Controls, is Controlled by or is under common
Control with such first person. A person shall be deemed to "Control" another
person if such first person has the power to direct or cause the direction of
such other person, whether through ownership of securities, by contract or
otherwise.
"Assigned Rights" shall have the meaning given such term in the
Assignment and License Agreement attached hereto in Annex I.
"Assumed Liabilities" shall have the meaning given such term in Section
2.3.
"Audited Financial Statements" shall have the meaning given such term
in Section 7.14.
"Business" shall mean Spectrian's line of business commonly know as the
"UltraRF division" which is generally engaged in the business of developing,
manufacturing and supplying radio frequency power semiconductor products in the
Semiconductor Field primarily for the wireless market.
"Business Account Payable" shall mean any account payable of Spectrian
that relates primarily to or arises primarily out of the operation of the
Business.
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"Business Account Receivable" shall mean any external account
receivable of Spectrian that relates primarily to or arises primarily out of the
operation of the Business, excluding intercompany receivables.
The term "business day" shall mean any day other than a Saturday,
Sunday or other day on which banks in the City of New York are permitted or
required to close by law or regulation.
"Business Equipment" shall mean all equipment, tools, and other
tangible property of any kind used or held primarily for use in the Business, as
set forth on Schedule 2.2(a)(ii).
"Business Inventory" shall mean all inventories of raw materials,
manufactured and purchased parts, goods in process, finished goods and supplies
used or maintained in connection with the Business.
"Business Names" shall mean all of Spectrian's goodwill relating to the
Business and Spectrian's rights to the use in the Business of the names and
marks "UltraRF" (including domain names) and any and all formative, variants and
derivatives thereof.
"Closing" and "Closing Date" shall have the respective meanings given
such terms in Section 4.1.
"COBRA" shall have the meaning given such term in Section 7.5.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Competing Business" shall have the meaning given such term in Section
7.17.
"Confidentiality Agreement" shall have the meaning given such term in
Section 7.2.
"Contracts" shall mean written and oral contracts, leases, indentures,
agreements, commitments, purchase orders and all other legally binding
arrangements, whether in existence on the date hereof or subsequently entered
into, including all amendments thereto.
"DOJ" shall have the meaning given such term in Section 6.4.
"Environmental Condition" shall have the meaning given such term in
Section 2.3(b)(viii).
"ERISA" shall have the meaning given such term in Section 5.8.
"Escrow Agent" shall mean Branch Banking and Trust Company, a North
Carolina banking corporation.
"Escrow Consideration" means 95,547 shares of Parent Common Stock
(equal to a number of shares of Parent Common Stock equal to (x) $10 million
divided by (y) the average closing price of a share of Parent Common Stock on
the NASDAQ National Market for the five (5) consecutive trading days immediately
preceding the date hereof).
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"Exchange Act" shall mean the Securities and Exchange Commission Act of
1934, as amended.
"Excluded Assets" shall have the meaning given such term in Section
2.2.
"Excluded Liabilities" shall have the meaning given such term in
Section 2.3.
"Facility" shall mean the real property and improvements thereon
located at 160 Gibraltar Court, Sunnyvale, California 94089.
"Financial Information" shall have the meaning given such term in
Section 5.4.
"FTC" shall have the meaning given such term in Section 6.4.
"GAAP" shall mean United States generally accepted accounting
principles.
"Governmental Entity" shall mean any court, administrative agency or
commission or other governmental authority or instrumentality, whether domestic
or foreign.
"Governmental Rule" shall mean any law, judgment, order, decree,
statute, ordinance, rule or regulation issued or promulgated by any Governmental
Entity.
"Hazardous Substance" shall have the meaning given such term in Section
5.18.
"HSR Act" shall mean Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"Immediately Available Consideration" shall mean at Parent's option
(which option must be exercised on the Closing Date), either (i) $30 million in
immediately available, freely transferable, cleared funds, or (ii) a number of
shares of Parent Common Stock equal to (a) $30 million divided by (b) the
average closing price of a share of Parent Common Stock on the NASDAQ National
Market for the five (5) consecutive trading days immediately preceding the
Closing Date which shares may then be sold by Spectrian through a registered
market maker designated by Parent (and whose commission shall be paid by Parent)
within five (5) business days of the Closing; provided, however, that in the
event Spectrian elects to sell such shares during the five (5) business day
period referred to above and the aggregate proceeds of such sale are less than
$30 million, Parent agrees that it shall pay the difference (which amount shall
be pro rated on a basis consistent with the percentage of such shares actually
sold) in immediately available, freely transferable, cleared funds by wire
transfer to an account designated by Spectrian within six (6) business days of
the Closing.
"Indemnified Parties" shall have the meaning given such term in Section
7.21.
"Indemnifying Party" shall have the meaning given such term in Section
10.5.
"Intellectual Property" shall mean any and all of the following,
whether or not registered, together with all grants, registrations and
applications relating thereto: U.S. and foreign patents, utility models,
copyrights, mask works, trademarks, service marks, logos, designs, trade names,
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inventions, trade secrets, know-how and all other proprietary and intellectual
property rights and information.
"IRS" means the Internal Revenue Service.
"Lease" shall have the meaning given such term in Section 7.13.
"Lien" shall mean any mortgage, claim, charge, lien, security interest,
easement, right of way, pledge, covenant, restriction or encumbrance of any
nature whatsoever.
"Loss" shall mean any loss, liability, claim, damage or expense,
whether accrued, absolute, fixed, contingent, known or unknown or otherwise.
"Marketing Materials" shall mean all advertising materials, customer
lists, training materials and market research materials.
"Material Adverse Effect" shall mean, with respect to the Business or
with respect to a party, a material adverse effect (i) on the business,
properties, assets, liabilities, operations, results of operations or condition
(financial or otherwise) of the Business, on the one hand, or Newco and the
Parent, on the other hand, as applicable, taken as a whole, or (ii) on the
ability of Spectrian, on the one hand, or Newco and the Parent, on the other
hand, to perform its obligations under or to consummate the transactions
contemplated by this Agreement.
"Newco Indemnified Parties" shall have the meaning given such term in
Section 10.1.
"Parent Common Stock" shall mean the common stock, par value $0.0025
per share, of Parent.
"Parent SEC Reports" shall have the meaning given such term in Section
6.5.
"Parent's Investigation" shall have the meaning given such term in
Section 7.21.
"Parent's Investigation Period" shall have the meaning given such term
in Section 7.21.
"Permits" shall mean permits, licenses, franchises, approvals, waivers,
orders, rights privileges and authorizations of any nature granted issued,
approved or allowed by or from any Governmental Entity.
"Permitted Lien" shall mean (a) any mechanics', carriers', workmen's,
repairmen's, and other like Lien arising or incurred in the ordinary course of
business, (b) any Lien for Taxes, assessments and other governmental charges
that are not yet due and payable or that may thereafter be paid without penalty,
or that are being contested in good faith by appropriate proceedings and (c) any
imperfection of title or other covenants, restrictions or encumbrance that,
individually or in the aggregate with other such imperfections, covenants,
restrictions and encumbrances, is not substantial in character or amount and
does not materially interfere with the use of, the Acquired Assets in the
Business as presently conducted or proposed to be conducted.
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"Person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, trust, business association, organization,
Governmental Entity or other entity.
"Personal Property" shall mean all of the Acquired Assets.
"Post-Closing Period" shall mean any Taxable Period, or portion
thereof, that begins after the Closing.
"Potential Transaction" shall have the meaning given such term in
Section 7.19.
"Pre-Closing Period" shall mean any Taxable Period, or portion thereof,
that ends at the time of or before the Closing.
"Property" shall have the meaning given such term in Section 7.21.
"Purchased Intellectual Property" shall mean the Intellectual Property
of the Business to be transferred to Newco pursuant to the Assignment and
License Agreement.
"Purchase Price" shall mean the Stock Consideration plus the
Immediately Available Consideration plus the Escrow Consideration.
"Registrable Securities" shall have the meaning given such term in
Section 7.20.
"Resolution CPA Firm" shall have the meaning given such term in Section
7.6.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Semiconductor Field" shall mean the design, fabrication, manufacture
and sale of electronic devices and/or circuits on semiconductor materials, as
well as passive elements in wafer, die or multi-chip module form (meaning
multiple bare die on an electronic interconnect substrate) or in integrated
circuit packaging, whether in hybrid or monolithic form.
"Spectrian Benefit Plan" shall have the meaning given such term in
Section 5.8.
"Spectrian Contractors" shall have the meaning given such term in
Section 5.7.
"Spectrian Employees" shall have the meaning given such term in Section
7.5.
"Spectrian Indemnified Parties" shall have the meaning given such term
in Section 10.2.
"Spectrian Rights" shall have the meaning given such term in Section
5.13.
"Spectrian's Cap Amount" shall have the meaning given such term in
Section 10.1.
"Spectrian's Threshold Amount" shall have the meaning given such term
in Section 10.1.
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"Stock Consideration" means 812,154 shares of Parent Common Stock,
(equal to a number of shares of Parent Common Stock equal to (x) $85 million
divided by (y) the average closing price of a share of Parent Common Stock on
the NASDAQ National Market for the five (5) consecutive trading days immediately
preceding the date hereof).
"Subject Rights" shall have the meaning defined in the Assignment and
License Agreement.
"Tax" (including with correlative meaning, the terms "Taxes" and
"Taxable") shall mean income, gross receipts, ad valorem, excise, value-added,
sales, use, transfer, franchise, license, stamp, occupation, withholding,
employment, payroll, property, estimated or environmental tax, together with any
interest, penalty, deficiency or addition to tax, whether disputed or not.
"Tax Return" shall mean any return, report, statement, declaration
estimate and the like required to be filed with any Taxing Authority.
"Taxable Period" shall mean any taxable year or any other period that
is treated as a taxable year with respect to which any Tax may be imposed under
any applicable statute, rule or regulation.
"Taxing Authority" shall mean any governmental body or authority
responsible for the imposition of any Tax.
"Termination Date" shall have the meaning given such term in Section
11.3.
"Third Party Claim" shall have the meaning given such term in Section
10.5.
"Transaction Agreements" shall mean this Agreement, the Escrow
Agreement, the Development Agreement, the Employment Agreements, the Transition
Services Agreement, the Purchase and Supply Agreement, the Registration Rights
Agreement, and the Assignment and License Agreement, which Transaction
Agreements shall be attached hereto as Annex I and an Assignment and Assumption
Agreement which shall be in a mutually acceptable form.
"Transferred Employee" shall have the meaning given such term in
Section 7.5.
"UltraRF Net Assets" means, by reference to each respective balance
sheet prepared as of the date of calculation, the difference obtained by
subtracting (a) total liabilities of the Business as shown on such balance
sheet, including capital lease obligations but excluding Excluded Accrued
Liabilities from (b) total assets of the Business as shown on such balance
sheet, excluding intercompany accounts receivable.
"Unaudited Closing Balance Sheet" shall have the meaning given such
term in Section 3.1.
"Unaudited Stub Period Financial Information" shall have the meaning
given such term in Section 7.15.
"WARN Act" shall have the meaning given such term in Section 7.5.
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Section 1.2 Interpretation.
(a) When used in this Agreement the words "include",
"includes" and "including" shall be deemed to be followed by the words "without
limitation".
(b) When used in this Agreement, the word "primarily" shall be
deemed to be followed by the words "or exclusively".
(c) Any terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(d) When used in this Agreement, the word "or" is not
exclusive.
(e) All references to Articles, Sections, Exhibits, Schedules
and Appendices shall be deemed references to Articles, Sections, Exhibits,
Schedules and Appendices to this Agreement, unless otherwise indicated.
(f) This Agreement shall be deemed drafted jointly by all the
parties hereto and shall not be specifically construed against any party hereto
based on any claim that such party or its counsel drafted this Agreement.
ARTICLE 2
SALE AND PURCHASE OF ACQUIRED ASSETS AND LIABILITIES
Section 2.1 Purchase And Sale.
(a) Upon the terms and subject to the conditions of this
Agreement, on the Closing Date, Spectrian shall sell, assign, transfer, convey
and deliver to Newco, and Newco shall (and Parent shall cause Newco to)
purchase, acquire and accept, all of Spectrian's right, title and interest in,
to and under the Acquired Assets.
(b) The Schedules attached hereto pursuant to Section 2.2 and
Section 2.3, shall reflect assets and liabilities as of October 1, 2000, and, in
each case, shall be deemed to include assets and liabilities accrued and
disposed in the ordinary course of business for the Business between such date
and the Closing Date.
Section 2.2 Acquired Assets and Excluded Assets.
(a) The term "Acquired Assets" shall mean the properties,
assets, goodwill and rights of whatever kind and nature, real or personal,
tangible or intangible, other than the Excluded Assets, of Spectrian existing on
the Closing Date that constitute or relate primarily to or arise primarily out
of the operation of the Business, including, without limitation:
(i) all Business Inventories;
(ii) all Business Equipment and tangible
property, including fab, test, assembly &
burn in, construction in-process, office and
research and development equipment,
leasehold improvements and certain computer
equipment, identified specific UltraRF
software if legally
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transferable and utilized solely by UltraRF
and if subject to any transfer fees then
such fees are to be paid by the Parent, as
set forth on Schedule 2.2(a)(ii);
(iii) all rights associated with prepaid expenses
related to the Business, including pre-paid
taxes that are subject to proration pursuant
to Section 7.6(a);
(iv) all intangible assets of the Business
existing on and as of the Closing Date,
including the Business Names and the
Purchased Intellectual Property to the
extent transferred to Parent or Newco
pursuant to the Assignment and License
Agreement together with all goodwill
associated therewith, licenses and
sublicenses granted and obtained with
respect thereto, and rights thereunder,
remedies against infringement thereof, and
rights to protections of interests therein
under the laws of all jurisdictions;
(v) all right, title and interest of Spectrian
in and to the Contracts to which Spectrian
is a party or by which Spectrian is bound
that are listed in Schedule 2.2(a)(v), and
all other Contracts to which Spectrian is a
party on the Closing Date that relate
primarily to or arise primarily out of the
operation of the Business that are not
required to be listed in such Schedule
2.2(a)(v) and which were entered into in the
ordinary course of the Business, in each
case, to the extent such Contracts are
assignable;
(vi) all records and lists pertaining to accounts
and suppliers, personnel records, books,
ledgers, files, Marketing Materials and
other printed and written materials
reasonably necessary for Newco's continuing
operation of the Business, other than books,
records and other data relating to the
Excluded Assets and the Excluded Liabilities
and other books and records reasonably
retained by Spectrian;
(vii) all of Spectrian's rights against third
parties pursuant to the warranties and
guarantees related to the Acquired Assets,
subject to the provisions concerning
warranties and guarantees contained in the
Purchase and Supply Agreement attached
hereto in Annex I; and
(viii) all trade accounts receivable attributable
to external sales less the related allowance
for doubtful accounts.
(b) The term "Excluded Assets" shall mean all properties,
assets, goodwill and rights of whatever kind and nature, real or personal,
tangible or intangible, other than the Acquired Assets of Spectrian existing on
the Closing Date, including without limitation the following:
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(i) cash on hand or in banks and cash
equivalents owned by Spectrian relating to
the operations of the Business;
(ii) intercompany receivables;
(iii) all rights of Spectrian under this Agreement
and the agreements, instruments and
certificates delivered in connection with
this Agreement;
(iv) all records prepared in connection with the
sale of the Business, including the bids and
other information received from third
persons in respect of the Business and
analyses relating to the Business;
(v) any assets under any Benefit Plan;
(vi) all rights relating to the Excluded
Liabilities;
(vii) business records other than Acquired Assets;
(viii) any Tax refunds, insurance refunds,
insurance deposits or recoveries from claims
relating to the Business or the Acquired
Assets with respect to Pre-Closing Periods;
(ix) all Intellectual Property, other than the
Purchased Intellectual Property to the
extent transferred to Parent pursuant to the
Assignment and License Agreement; and
(x) except as provided in the Assignment and
License Agreement, all of Spectrian's
rights, claims, causes of action or rights
of set-off against third parties relating to
the Business or Acquired Assets with respect
to Pre-Closing Periods, other than rights,
claims or set-offs with respect to
warranties and guarantees.
(c) Nothing in this Agreement shall be construed as an attempt
by Spectrian to assign any Contract to the extent that such Contract is not
assignable without the necessary consent of the other party or parties thereto.
Spectrian shall use commercially reasonable efforts, in cooperation with Newco,
to secure any necessary consent to assignment of those Contracts indicated with
an asterisk on Schedule 5.11 which consent has not been obtained prior to the
Closing Date; provided, however, that Spectrian shall not be required to make
any payment to any person or forego any benefits to obtain such consent. If any
such consent shall not be obtained, Spectrian agrees to cooperate with Newco in
any reasonable arrangement designed to provide for Newco the benefits intended
to be assigned to Newco under the relevant Contract, including enforcement of
any and all rights of Spectrian against the other party thereto arising out of
the breach or cancellation thereof by such other party or otherwise at the cost
and for the account of Newco. If and to the extent that such arrangement
satisfactory to Newco cannot be made, Newco shall not have any obligation with
respect to any such Contract.
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Section 2.3 Assumption of Business Liabilities and Obligations.
(a) Upon the terms and subject to the conditions of this
Agreement, Newco shall assume, effective as of the Closing, the Assumed
Liabilities. Neither Newco nor Parent will assume or have any responsibility,
however, with respect to any Excluded Liability or any other obligation or
liability of Spectrian not included within the definition of Assumed
Liabilities. "Assumed Liabilities" means:
(i) all obligations and liabilities of Spectrian
(other than known or unknown liabilities or
obligations for breach or default which
occurred prior to the Closing) under the
Contracts included in the Acquired Assets
and assigned to Newco;
(ii) the following Business liabilities:
(A) Accounts payable, including
payables for inventory purchases,
property and equipment purchases,
and other direct liabilities
including uninvoiced receipts and
manual accruals in the normal
course of business, as set forth on
Schedule 2.3(a)(ii)(A); provided
that the date that such invoices
are due to the vendor (within the
normal payment term) for such
accounts payable must be after the
Closing Date;
(B) The equipment leases associated
with the Business Equipment;
(C) Warranty obligations pursuant to
and to the extent set forth in the
Supply Agreement attached hereto;
and
(D) (i) any obligation or liability for
Taxes that is attributable to the
Business or relating to the
Acquired Assets with respect to
Post-Closing Periods, and (ii)
Newco's share, as determined
pursuant to Section 7.6(a), of real
property, personal property, ad
valorem and similar Taxes relating
to the Acquired Assets.
(b) The term "Excluded Liabilities" shall include:
(i) other than the Assumed Liabilities, any
obligation or liability for any Taxes of
Spectrian;
(ii) all obligations and liabilities of Spectrian
in respect of any current or former employee
of Spectrian engaged in the Business,
including variable comp, payroll and payroll
taxes, royalties, employee benefits and
workers compensation, 401(K) Plan,
garnishments, any obligation or liability of
Spectrian arising under or in connection
with any Employee Benefit Plan, liabilities
related
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to accrued vacation, in each case, which
obligation or liability arises out of acts
or conditions that occurred prior to the
Closing Date;
(iii) any obligation of Spectrian to indemnify any
Person by reason of the fact that such
Person was a director, officer, employee or
agent of Spectrian or was serving at the
request of Spectrian as a partner, trustee,
director, officer, employee or agent of
another entity;
(iv) any liability of Spectrian for costs and
expenses incurred in connection with this
Agreement and the other Transaction
Agreements and the transactions contemplated
hereby and thereby;
(v) any liability or obligation of Spectrian
under this Agreement or any other
Transaction Agreement;
(vi) any liability or obligation of Spectrian
relating to the Excluded Assets;
(vii) subject to Section 2.2(c), any liability or
obligation arising from or relating to any
Contract for which assignment to Newco is
provided herein which is not assignable to
Newco without the consent of another party
and to which other party's consent to
assignment is not obtained and no other
arrangements have been made to provide for
Newco the benefits intended to be assigned
to Newco under such Contracts;
(viii) any liability or obligation of Spectrian or
an Affiliate thereof, or any liability or
obligation that may be imposed on Newco or
Parent, arising out of, in connection with,
or relating to any Environmental Condition,
existing as of and/or prior to the Closing
Date (even if not discovered until after the
Closing Date), relevant to: (i) the Property
(as that term is defined in Section 7.22(a)
below) or (ii) any leases, contracts or
agreements relating to the Property. As used
herein the term "Environmental Condition"
shall mean any condition with respect to the
soil, ambient air, surface waters or
groundwaters at, from, on or under the
Property, whether or not yet discovered,
which could or does result in any damage,
loss, cost, expense or claim to or against
Newco or Parent; and
(ix) any liability or obligation of Spectrian not
incurred in the ordinary course of business
attributable to any assets, properties or
Contracts which are not included in the
Acquired Assets.
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ARTICLE 3
PURCHASE PRICE
Section 3.1 The Purchase Price.
(a) The Purchase Price for the Acquired Assets shall consist
of the Stock Consideration, the Immediately Available Consideration and the
Escrow Consideration. The Stock Consideration shall be paid by delivery at the
Closing to Spectrian of a stock certificate evidencing the Stock Consideration.
The Immediately Available Consideration shall be paid either (a) by wire
transfer to an account designated by Spectrian of $30 million in immediately
available, freely transferable, cleared funds at the Closing, or (b) by delivery
at the Closing to Spectrian of a number of shares of Parent Common Stock equal
to (x) $30 million divided by (y) the average closing price of a share of Parent
Common Stock on the NASDAQ National Market for the five (5) consecutive trading
days immediately preceding the Closing Date which shares may then be sold by
Spectrian through a registered market maker designated by Parent (and whose
commission shall be paid by Parent) within five (5) Business Days of the
Closing; provided, however, that in the event Spectrian elects to sell such
shares during the five (5) Business Day period referred to above and the
aggregate proceeds of such sale are less than $30 million, Parent agrees that it
shall pay the difference (which amount shall be prorated on a basis consistent
with the percentage of such shares actually sold) in immediately available,
freely transferable, cleared funds by wire transfer to an account designated by
Spectrian within six (6) business days of the Closing. The Escrow Consideration
shall be paid by delivery at the Closing to the Escrow Agent of a stock
certificate evidencing the Escrow Consideration.
(b) If, between the date of this Agreement and the Closing,
the shares of Parent Common Stock shall be changed into a different number or
class of shares by reason of any reclassification, recapitalization, split-up,
spin-off, stock-split, combination, exchange of shares or readjustment or other
similar transaction involving Parent or a stock dividend thereon shall be
declared with a record date within said period, the number of shares of Parent
Common Stock to be issued to Spectrian pursuant to Section 3.1(a) shall be
appropriately and proportionately adjusted. Each of the parties to this
Agreement shall, and shall cause their Affiliates to, use all reasonable efforts
to cause the issuance of the Parent Common Stock to be exempt from registration
under applicable federal and state securities laws by filing as soon as
practicable an application with the Secretary of State of the State of North
Carolina pursuant to N.C. Gen. Stat. Section 78A-30 requesting a hearing upon
the terms and conditions of the transactions contemplated by this Agreement to
be held as soon as practicable after the filing of such application and taking
all actions necessary or appropriate to comply with the requirements set forth
therein. None of the parties to this Agreement shall make at such hearing, or
include in any information supplied with such application or distributed at such
hearing, any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(c) Spectrian shall prepare and use commercially reasonable
efforts to deliver within 10 business days after the Closing an unaudited
balance sheet for the Business as of the Closing Date (the "Unaudited Closing
Balance Sheet") to Parent for review and comment, prepared on the same basis as
the unaudited stub period balance sheet as of October 1, 2000
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delivered by Spectrian to Parent prior to the date of this Agreement and
attached hereto in Schedule 5.4. In addition, Spectrian shall cause
PricewaterhouseCoopers LLP to prepare and deliver to Spectrian within 45 days
after the Closing Date an audited balance sheet for the Business as of the
Closing Date (the "Closing Date Balance Sheet") prepared on the same basis as
the unaudited balance sheet as of October 1, 2000. PricewaterhouseCoopers LLP
shall allow Parent's auditors to review the workpapers at least five (5)
business days prior to delivery of the Closing Date Balance Sheet. If the amount
of the UltraRF Net Assets as of the Closing Date (which shall be calculated
based on the Closing Date Balance Sheet) is less than the amount of the UltraRF
Net Assets as of October 1, 2000, then Spectrian shall pay to Newco, promptly
but within 10 days after delivery of the Closing Date Balance Sheet, an amount
equal to such difference in immediately available, freely transferable, cleared
funds by wire transfer to an account designated by Newco. If the amount of the
UltraRF Net Assets as of October 1, 2000 is less than the UltraRF Net Assets as
of the Closing Date (which shall be calculated based on the Closing Date Balance
Sheet), then Newco shall (and Parent shall cause Newco to) pay to Spectrian,
promptly but within 10 days after delivery of the Closing Date Balance Sheet, an
amount equal to such difference in immediately available, freely transferable,
cleared funds by wire transfer to an account designated by Spectrian.
In addition, Spectrian agrees to disburse funds for the trade
accounts payable on behalf of Newco for the 45 days immediately following the
Closing Date. Spectrian shall provide Newco with schedules setting forth all
such disbursements made 15 days after the Closing Date, 30 days after the
Closing Date and 45 days after the Closing Date. Newco agrees to fully reimburse
Spectrian within five (5) days of receipt of each schedule, provided, however,
after receipt of the Closing Date Balance Sheet and the schedule setting forth
the funds disbursed by Spectrian on Newco's behalf during the 45 days after the
Closing Date, Newco and Spectrian agree that Newco shall reimburse Spectrian for
the amount of such trade accounts payable net the external accounts receivable
set forth in the Closing Date Balance Sheet (whether collected or not);
provided, further, all accounts receivable set forth in the Closing Date Balance
Sheet shall be collected and remitted to Spectrian for Spectrian's benefit
whether collected by Spectrian or Parent; provided, further, this paragraph
shall specifically supercede Section 2.2(a)(viii).
ARTICLE 4
THE CLOSING
Section 4.1 Closing Date. The closing of the sale and transfer of the
Acquired Assets and the assumption of the Assumed Liabilities (hereinafter
called the "Closing") shall take place at the offices of Smith, Anderson,
Blount, Dorsett, Mitchell & Jernigan, LLP, 2500 First Union Capitol Center,
Raleigh, North Carolina 27601, on December 29, 2000, provided all of the
conditions to each party's obligations under Article 8 have been satisfied or
waived, or at such other time, date and place as shall be mutually agreed to by
the parties hereto (such date of the Closing being hereinafter referred to as
the "Closing Date").
Section 4.2 Transactions To Be Effected At The Closing. At the Closing:
(a) Spectrian shall deliver or cause to be delivered to Newco
the documents referred to in Section 8.2(c), in each case appropriately
executed; and
(b) Parent or Newco, as appropriate, shall deliver or cause to
be delivered to Spectrian (i) the documents referred to in Section 8.3(c), in
each case appropriately executed and
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(ii) payment of the Stock Consideration and the Immediately Available
Consideration by the delivery of validly authorized and issued shares of Parent
Common Stock at the Closing, and shall deliver to the Escrow Agent payment of
the Escrow Consideration by the delivery of validly authorized and issued shares
of Parent Common Stock at the Closing.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SPECTRIAN
Spectrian hereby represents and warrants to Newco as follows:
Section 5.1 Spectrian's Organization; Good Standing. Spectrian is a
corporation, validly existing and in good standing under the laws of the State
of Delaware. Spectrian has the requisite power and authority to own the Acquired
Assets and to carry on the Business as currently conducted. Spectrian is duly
qualified to conduct business as a foreign entity in the State of California.
Section 5.2 Authority; Execution and Delivery. Spectrian has the
requisite power and authority to enter into the Transaction Agreements and to
consummate the transactions contemplated thereby. The execution and delivery of
the Transaction Agreements by Spectrian, and the consummation of the
transactions contemplated thereby have been duly and validly authorized,
executed and delivered by Spectrian and, assuming the due authorization,
execution and delivery of the Transaction Agreements by the other parties
thereto, constitute the legal, valid and binding obligation of Spectrian,
enforceable against Spectrian in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other similar laws affecting creditors' rights generally from time
to time in effect and to general principles of equity (including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing) regardless of whether considered in a proceeding in equity or at law.
Section 5.3 Consents and Approvals; No Violations. The execution and
delivery of the Transaction Agreements by Spectrian and the consummation by
Spectrian of the transactions contemplated thereby will not: (i) violate any
provision of the charter documents or the by-laws of Spectrian; (ii) violate any
Governmental Rule applicable to Spectrian; or (iii) require any filing with, or
permit, consent or approval of, or the giving of any notice to, any governmental
or regulatory body, agency or authority other than the filing of a pre-merger
notification with the Federal Trade Commission and the Department of Justice
under the HSR Act, except where the failure to make such filing, or obtain such
permit, consent or approval, or give such notice would not have a Material
Adverse Effect on the Business.
Section 5.4 Financial Statements(a). Attached hereto as Schedule 5.4
are the following financial statements of the Business (collectively the
"Financial Information"): (i) unaudited balance sheets as of March 31, 1999 and
2000, (ii) unaudited statement of operations for the fiscal years ended March
31, 1998, 1999 and 2000, (iii) unaudited statement of operations for the six
month period ended October 1, 2000, and (iv) unaudited balance sheet as of
October 1, 2000. The Financial Information has been prepared in accordance with
GAAP applied on a consistent basis throughout the periods covered thereby,
presents fairly the financial condition of the Business as of such dates and the
results of operations of the Business for such periods, is materially correct
and complete, and is consistent with the books and records of the Business and
Spectrian (which books and records are correct and complete in all material
respects); provided, however, that the Financial Information includes the normal
recurring adjustments booked at each quarter end and lacks footnotes, income tax
provisions and other presentation items.
Section 5.5 Title to Acquired Assets. Except as set forth on Schedule
5.5, Spectrian has good and valid title to all the Acquired Assets, free and
clear of all Liens other than Permitted Liens.
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Section 5.6 Absence of Certain Changes or Events. Except as set forth
on Schedule 5.6, since March 31, 2000 there has not been:
(a) any damage, destruction, loss or change in or effect on
the Business (whether or not covered by insurance) that would have a Material
Adverse Effect on the Business;
(b) any labor dispute, labor law, or labor regulation or any
event or condition of any character relating to labor matters that would have a
Material Adverse Effect on the Business;
(c) any sale, assignment, transfer, or disposition of any
material item of property, plant or equipment or Intellectual Property owned by
Spectrian, except in the ordinary course of business;
(d) any material change from current practice of Spectrian in
any accounting principle or practice other than changes required as a result of
changes in GAAP;
(e) any incurrence of material liabilities with respect to the
Business, other than in the ordinary course of business; or
(f) any acceleration, termination, modification or
cancellation of any Contract involving more than $50,000;
(g) any capital expenditure (or series of related capital
expenditures) involving more than $50,000;
(h) any cancellation, compromise, waiver, or release of any
right or claim (or series of related rights and claims) either involving more
than $50,000 or outside the ordinary course of business; or
(i) any agreement to do any of the foregoing.
Section 5.7 Employment Matters.
(a) There are no collective bargaining or similar agreements
with any labor unions or associations representing employees of the Business. To
the knowledge of Spectrian, no executive, key employee or group of employees has
any plans to terminate employment with Spectrian with respect to the Business.
(b) Except as set forth on Schedule 5.7, the Business is in
compliance with all applicable laws, regulations and orders relating to the
employment of labor, including all such laws, regulations and orders relating to
wages and hours, labor relations, civil rights, safety and health, workers'
compensation, except for such noncompliance which would not have a Material
Adverse Effect on the Business. To the knowledge of Spectrian, no employee of
the business is subject to any Contract or law which adversely affects or which
might adversely affect such employee's ability to act as an employee of Newco or
Parent following consummation of the transactions contemplated by this
Agreement.
(c) Schedule 5.7 sets forth a complete list of the Persons
engaged by Spectrian at any time to render consulting or similar services to the
Business on an independent contractor
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basis (collectively, the "Spectrian Contractors"). Spectrian has previously
provided to Newco true and complete copies of each and every agreement between
Spectrian and any Spectrian Contractor. To the knowledge of Spectrian, each
Spectrian Contractor is and at all times has been an independent contractor to,
and not an employee of, Spectrian for purposes of all applicable federal and
state income tax withholding requirements and otherwise.
Section 5.8 Employee Benefit Plans.
(a) Schedule 5.8 contains a list and a brief description of
each "employee benefit plan" (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")), and all other
employee compensation and fringe benefit plans or arrangements (including,
without limitation, all bonus, incentive and stock compensation plans)
maintained or contributed to or by Spectrian or the Business for the benefit of
any employees of the Business (collectively, the "Spectrian Benefit Plans") and
the amount of any unfunded retirement liabilities, including medical coverage,
arising under any plan, fund or arrangement described in this Section and the
identity of the plan, fund or arrangement giving rise thereto. Spectrian has
made available to Parent complete and correct copies of (i) each Spectrian
Benefit Plan (or, in the case of any unwritten Plan, a description thereof) and
(ii) the most recent summary plan description of each Spectrian Benefit Plan (if
such description was required).
(b) The execution and delivery of this Agreement by Spectrian
and the consummation of the transactions contemplated hereunder will not result
in any obligation or liability (with respect to accrued benefits or otherwise)
of Newco to any Transferred Employee, any employee or former employee of any
plan or the PBGC. No amendment to, termination of, or withdrawal from, any
Spectrian Benefit Plan (subject to Title IV of ERISA) at any time before or
after the Closing Date by Spectrian or any other corporation or other entity has
or will subject Newco to any liability to any plan, the PBGC or the IRS, to any
current or former employee of Spectrian, or to any other person or party.
(c) With respect to any Transferred Employee, Spectrian has
not within five (5) years prior to the Closing Date contributed to (or been
obligated to contribute to) any multiemployer plan (within the meaning of
Section 3(37) of ERISA).
(d) Within five (5) years prior to the Closing Date, Spectrian
has neither maintained nor contributed to a defined benefit pension plan (as
defined in Section 3(35) of ERISA).
(e) Spectrian has complied in all respects with ERISA, the
Code and the regulations thereunder and all other applicable federal or state
statutes or regulations.
Section 5.9 Litigation. Except as set forth on Schedule 5.9, there are
no actions, suits, claims, proceedings or investigations which have been served
and are pending or, to the knowledge of Spectrian, are threatened against
Spectrian or the Acquired Assets, nor any outstanding judgments, orders, writs,
injunctions or decrees of any Governmental Entity against Spectrian or the
Acquired Assets, which (i) would have a Material Adverse Effect on the Business,
(ii) seek to prevent or materially restrict or delay the consummation of the
transactions contemplated by the Transaction Agreements or (iii) would
materially and adversely affect the ability of Spectrian to consummate the
transactions contemplated by the Transaction Agreements.
Section 5.10 Compliance with Laws.
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(a) Except as set forth on Schedule 5.10, Spectrian is in
compliance with all Governmental Rules applicable to it which relate primarily
to the Acquired Assets and the Facility, except where the failure to so comply
would not reasonably be expected to have a Material Adverse Effect on the
Business. Except as set forth in Schedule 5.10, there is no investigation or
review by any Governmental Entity with respect to the Business or the Facility
pending and Spectrian has not received any written notice since January 1, 2000
that any such investigation or review is contemplated, except where the outcome
of such investigation or review if adversely determined would not reasonably be
expected to have a Material Adverse Effect on the Business.
(b) Schedule 5.10 attached hereto contains an accurate and
complete list of all Permits used, or anticipated to be used, in the operation
of the Business. All of the Permits are in full force and effect, not subject to
any current default or right of cancellation, termination or revocation.
Section 5.11 Contracts.
(a) As of the date hereof, except for Contracts listed on
Schedule 5.11 and Contracts relating to Excluded Assets, Spectrian is not a
party to or bound by any contract primarily relating to the Acquired Assets or
the Assumed Liabilities which is:
(i) an indenture, note, loan or credit agreement
or other Contract relating to the borrowing
of money by Spectrian or to the direct or
indirect guarantee or assumption by
Spectrian of the obligation of any other
person in excess of $50,000;
(ii) a lease or similar agreement under which
Spectrian is a lessee of, or holds or
operates, any real property owned by any
third party;
(iii) a Contract involving future payment for
goods or services by Spectrian of more than
$50,000 (unless terminable without payment
or penalty upon no more than sixty (60)
days' notice);
(iv) a Contract involving the obligation of
Spectrian to deliver in the future products
or services for payment of more than $50,000
(unless terminable without payment or
penalty upon no more than sixty (60) days'
notice);
(v) a Contract evidencing any Lien on the
Acquired Assets (other than Permitted Liens
or Liens created in the ordinary course of
business);
(vi) a Contract with or Permit by or from any
Governmental Entity, the loss of which would
materially interfere with the operation of
the Business as presently conducted;
(vii) a Contract concerning confidentiality or
noncompetition;
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(viii) any Contract under which the consequences of
a default or termination could have a
Material Adverse Effect on the business,
financial condition, operations, results of
operations or prospects of the Business; or
(ix) any other Contract (or group of related
Contracts) the performance of which involves
consideration in excess of $50,000.
(b) Except as disclosed in Schedule 5.11, each Contract listed
thereon (i) is a valid and binding obligation of Spectrian and is in full force
and effect and (ii) will continue to be valid and binding and in full force and
effect on identical terms following the consummation of the transactions
contemplated hereby. Except as disclosed in Schedule 5.11, Spectrian has not
received any notice of default or of the intention of any party to any such
Contract to terminate such Contract. Complete and correct copies of all
contracts referred to in Schedule 5.11, together with all modifications and
amendments thereto, have been made available to Purchaser.
Section 5.12 No Brokers. Except for Dain Rauscher Wessels, the fees and
expenses of which will be paid by Spectrian, Spectrian has not entered into any
agreement, arrangement or understanding with any person or firm which will
result in the obligation to pay any finder's fee, brokerage commission or
similar payment in connection with the transactions contemplated hereby. Section
5.13 Intellectual Property.
(a) Except as disclosed on Schedule 5.13(a), Spectrian is the
owner of, or has a valid license or otherwise possesses legally enforceable
rights to use, free and clear of any Lien and without obligation for the payment
of any royalty, all Intellectual Property necessary for the conduct of the
Business as now conducted (such Intellectual Property owned by or licensed to
Spectrian, collectively, the "Spectrian Rights").
(b) Except as disclosed on Schedule 5.13(b), the Subject
Rights transferred and licensed to Newco and pursuant to the Assignment and
License Agreement include all Intellectual Property necessary for the conduct of
the Business as now conducted. The Assigned Rights transferred pursuant to the
Assignment and License Agreement, together with the Licensed Patent Rights with
Extended Sublicense Rights include all of the Spectrian Rights that relate
primarily to the Semiconductor Field or the Business. Except as disclosed on
Schedule 5.13(b), Spectrian owns all of the Assigned Rights, free and clear of
any Lien and without obligation for the payment of any royalty, and has the
right to transfer the Assigned Rights to Newco. Except as disclosed on Schedule
5.13(b), Spectrian owns or otherwise possesses rights in the Licensed Rights
sufficient to grant Newco the licenses therein granted pursuant to the
Assignment and License Agreement, free and clear of any Lien and without
obligation for the payment of any royalty.
(c) The Annexes to the Assignment and License Agreement sets
forth a complete list of all patents, registered and unregistered trademarks,
registered copyrights, and any applications therefor, included in the Subject
Rights, and specifies, where applicable, the jurisdictions in which each such
Subject Right has been issued or registered or in which an application for such
issuance and registration has been filed, including the respective registration
or application numbers and the names of all registered owners. Schedule 5.13(c)
sets forth a
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complete list of all licenses, sublicenses and other agreements, if any,
pursuant to which Spectrian or any other person is authorized to use any of the
Subject Rights and includes the identity of all parties thereto, a description
of the nature and subject matter and terms thereof. The transfer or license of
Subject Rights pursuant to the Assignment and License Agreement will neither
cause Spectrian to be in violation or default under any such license, sublicense
or agreement, nor entitle any other party to any such license, sublicense or
agreement to terminate or modify such license, sublicense or agreement, except
as disclosed in Schedule 5.13(c).
(d) To the knowledge of Spectrian, Spectrian's rights in the
Subject Rights are valid and enforceable.
(e) Spectrian has not received any demand, claim or notice
from any Person in respect of the Subject Rights which challenges the validity
of, or the rights of Spectrian in, any such Subject Rights.
(f) To the knowledge of Spectrian, no Person, including any
employee or former employee of Spectrian, is infringing any Subject Rights. Each
current and former employee, consultant or contractor of Spectrian involved with
the development of the Spectrian Rights has executed a proprietary information
and confidentiality agreement substantially in the form of Spectrian's standard
forms.
(g) No claims have been asserted nor, to Spectrian's
knowledge, have any such claims been threatened by any person except as
disclosed on Schedule 5.13(g), nor to Spectrian's knowledge are there any valid
grounds for any claims, (i) to the effect that the manufacture, use, sale, offer
to sell, import or licensing of any of the products of the Business infringes or
violates any Intellectual Property of any other Person or (ii) against the use
by Spectrian of any Intellectual Property used in or necessary for the conduct
of the Business as now conducted.
(h) To Spectrian's knowledge, Spectrian, in the conduct of the
Business, has not infringed or violated, and the Business as currently conducted
does not infringe, any Intellectual Property of any other Person.
Section 5.14 Accredited Investor Status. Spectrian is an "accredited
investor" as that term is defined in Rule 501(a)(3) of Regulation D of the
Securities Act.
Section 5.15 Reliance on Exemptions. Spectrian understands that the
Parent Common Stock is being offered and sold to it in reliance on specific
exemptions from the registration requirements of the United States federal and
state securities laws and that Parent is relying in part upon the truth and
accuracy of, agreements, acknowledgments and understandings of Spectrian set
forth herein in order to determine the availability of such exemptions and the
eligibility of Spectrian to acquire the Parent Common Stock.
Section 5.16 Transfer or Resale. Spectrian understands that the Parent
Common Stock has not been and is not being registered under the Securities Act
or any state securities laws, and may not be offered for sale, sold, assigned,
or transferred unless (i) subsequently registered thereunder or (ii) Spectrian
shall have delivered to Parent an opinion of counsel, in a reasonably
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acceptable form, to the effect that such Parent Common Stock to be sold,
assigned, or transferred may be sold, assigned, or transferred pursuant to an
exemption from such registration.
Section 5.17 Legends. Spectrian understands that the certificates or
other instruments representing the Parent Common Stock shall bear a restrictive
legend in substantially the following form (and a stop-transfer order may be
placed against transfer of such stock certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"), OR APPLICABLE
STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR
SALE, SOLD, TRANSFERRED OR ASSIGNED (1) IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE 1933 ACT OR APPLICABLE
STATE SECURITIES LAWS, OR (2) IN THE ABSENCE OF AN
OPINION OF COUNSEL, IN A REASONABLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER THE 1933 ACT
OR (3) UNLESS SOLD, TRANSFERRED OR ASSIGNED PURSUANT
TO RULE 144 UNDER SAID ACT.
The legend set forth above shall be removed and Parent shall issue a certificate
without such legend to the holder of the Parent Common Stock upon which it is
stamped, if, unless otherwise required by state securities laws, (i) the Parent
Common Stock is registered for sale under the Securities Act, (ii) in connection
with a sale transaction, such holder provides Parent with an opinion of counsel,
in a reasonably acceptable form, to the effect that a public sale, assignment or
transfer of the Parent Common Stock may be made without registration under the
Securities Act, or (iii) such holder provides the Parent with reasonable
assurances that the Parent Common Stock can be sold pursuant to Rule 144 of the
Securities Act without any restriction as to the number of securities acquired
as of a particular date that can then be immediately sold.
Section 5.18 Environmental Compliance.
(a) For purposes of this Section 5.18, "Hazardous Substance"
means any of the following: (i) a "hazardous substance" as defined in 42 U.S.C.
Section 9601(14), as amended, and all rules, regulations and orders promulgated
thereunder, in each case, as in effect on the date hereof, (ii) a "hazardous
waste," as defined in 42 U.S.C. Section 6903(5), as amended, and all rules,
regulations and orders promulgated thereunder, in each case, as in effect on the
date hereof, (iii) if not included in (i) or (ii) above, "hazardous waste
constituents" as defined in 40 C.F.R. Section 260.10, including, without
limitation, those substances listed in Appendix VII and VIII of Subpart D of 40
C.F.R. Section 261, in each case, as in effect on the date hereof, (iv)
"source," "special nuclear" or "by-product material," as defined in 42 U.S.C.
Sections 3011, et seq., as amended, and all rules, regulations and orders
promulgated thereunder, in each case, as in effect on the date hereof, and (v)
any other waste, substance or material, the generation, transportation,
treatment, storage, release, or disposal of which is regulated under or by
applicable laws as in effect on the date hereof, including without limitation
petroleum and
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petroleum products, asbestos and asbestos-containing materials, and low-level
radioactive substances and wastes.
(b) Except as set forth in Schedule 5.18, the Business, the
Facility and the Acquired Assets are in compliance, in all material respects,
with all applicable laws relating to Hazardous Substances. Without limiting the
foregoing, (i) the operations of the Business do not violate, and have not
violated, in any material respect, any law relating to the generation, storage,
processing, utilization, labeling, transportation, treatment, disposal, release,
discharge, emission or other disposition of Hazardous Substances, and (ii)
neither Spectrian nor, to the knowledge of Spectrian, any current or former
owner, occupant or operator of any property owned, leased or operated by
Spectrian in connection with the Business, has ever utilized any such property
or any portion thereof in violation of any law relating to the generation,
storage, processing, utilization, labeling, transportation, disposal, treatment,
emission, release, discharge, or other disposition of Hazardous Substances.
Schedule 5.18 thereto contains a true list of all environmental audits and
assessments in the possession of Spectrian relating to the Business and Acquired
Assets.
(c) With respect to the Business, the Facility and the
Acquired Assets, Spectrian has not and does not utilize, store, dispose of,
treat, generate, process, transport, release or own any Hazardous Substance in
material violation of any applicable law.
(d) With respect to the Business, the Facility and the
Acquired Assets except as listed on Schedule 5.18, Spectrian has, in a timely
manner, obtained all material licenses, permits, consents and approvals from any
foreign, federal, state, local or other Governmental Entity and filed all
material reports required to be filed under or pursuant to any applicable law
related to any Hazardous Substance.
(e) With respect to the Business, the Facility and the
Acquired Assets except as listed on Schedule 5.18, Spectrian has not received
any written notice of any writ, injunction, claim, decree, order or judgment
outstanding or of any action instituted or threatened under or pursuant to, or
of any violations of, any environmental, health or safety law applicable to any
operations or property of the Business, the Facility and the Acquired Assets,
including, without limitation, any notice from any Governmental Entity or other
Person advising Spectrian that, in connection with the Business, the Facility or
the Acquired Assets, it is or is potentially responsible for response costs
under the Comprehensive Environmental Response, Compensation, and Liability Act
(42 U.S.C. Section 9601 et seq.) (together with the regulations promulgated
thereunder, "CERCLA"), or any other law with respect to a release or threatened
release of any Hazardous Substances.
(f) With respect to the Business, the Facility and the
Acquired Assets except as listed on Schedule 5.18, Spectrian has not received
any written notice of any violation of any environmental, zoning, worker safety
or land use law, including without limitation, under CERCLA, the Resource
Conservation and Recovery Act, as amended (42 U.S.C. Section 6901, et seq.), the
Oil Pollution Act of 1990 (33 U.S.C. 2701 et seq.), the Emergency Planning and
Community Right-to-Know Act, as amended (42 U.S.C. Section 11001, et seq.), the
Clean Water Act, as amended (33 U.S.C. Section 3121, et seq.), the Clean Air
Act, as amended (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control
Act, as amended (15 U.S.C. section 2601 et seq), Occupational Safety and Health
Act, as amended (29 U.S.C. section 651, et seq.), together
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with the regulations promulgated under each respective law, and any state or
local similar laws and regulations and any so-called local, state or federal
"superfund" or "superlien" law.
(g) Except as listed on Schedule 5.18, there are no under- or
aboveground storage tanks, piping or facilities located on or under the Facility
or any Acquired Assets.
(h) Except as set forth on Schedule 5.18, there are no
Hazardous Substances present on, in or under the Facility or any Acquired
Assets, regardless of how such Hazardous Substances came to be there, in a
concentration or amount that would be reasonably expected to have a Material
Adverse Effect on the Business.
Section 5.19 All Assets of Business; Condition of Acquired Assets. The
Acquired Assets constitute all of the material assets used and necessary to
conduct the Business as presently conducted by Spectrian and as presently
proposed to be conducted. All of the tangible assets included in the Acquired
Assets are, taken as a whole, in reasonably good repair and operating condition
(except for normal wear and tear).
Section 5.20 Taxes. Except as set forth on Schedule 5.20:
(a) All Tax Returns relating to the Business or the Acquired
Assets have been timely filed, and all such Tax Returns are correct and complete
in all material respects. Spectrian has paid, or where payment is not yet
required, has established an adequate accrual for the payment of, all Taxes due
with respect to the Business or the Acquired Assets for Pre-Closing Periods.
Spectrian has not secured an extension of time within which to file any Tax
Return relating to the Business or the Acquired Assets.
(b) Spectrian has not received written notice of: (i) any
action, suit, investigation, audit or claim currently pending or threatened or
(ii) any deficiency claimed, proposed or asserted, in each case regarding
property (or other ad valorem) Taxes applicable to the Acquired Assets.
(c) There are no Tax Liens (other than for property Taxes not
yet due and payable or delinquent) on any of the Acquired Assets.
(d) None of the Acquired Assets is property that (i) Spectrian
or Newco is or will be required to treat as owned by another person pursuant to
the provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as
amended and in effect immediately prior to the enactment of the Tax Reform Act
of 1986, (ii) is "tax-exempt use property" within the meaning of Section 168(h)
of the Code, or (iii) is "tax-exempt bond financed property" within the meaning
of Section 168(g)(5) of the Code.
Section 5.21 Inventory. The Inventory of the Business is merchantable
and fit for the purpose for which it was procured or manufactured.
Section 5.22 Manufacturing Yields. The reports of manufacturing yields
furnished to Parent by Spectrian after October 1, 2000 were accurate in all
material respects.
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ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF NEWCO AND PARENT
Newco and Parent jointly and severally represent and warrant to
Spectrian as follows:
Section 6.1 Organization and Qualification. Each of Newco and Parent is
duly incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, has the requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as it is now being conducted and is in good standing and duly qualified to do
business in each jurisdiction in which the transaction of its business makes
such qualification necessary, except where the failure to be so organized,
existing, qualified and in good standing or to have such power or authority
would not have a Material Adverse Effect on Newco or Parent and its Subsidiaries
taken as a whole. True and complete copies of the Newco and Parent Charters and
the Newco and Parent By-Laws, as amended to date, and Certificate of
Incorporation and By-Laws of each their Subsidiaries, as amended to date and
currently in full force and effect, have been made available to Spectrian.
Section 6.2 Capitalization. As of the Date of this Agreement, the
authorized capital stock of Parent consists of 100,000,000 shares of common
stock, par value $0.0025 per share, of Parent (the "Parent Common Stock") and
3,000,000 shares of preferred stock, par value $0.01 per share (the "Parent
Preferred Stock"). The Board of Directors of Parent on October 30, 2000 approved
an amendment of the Articles of Incorporation of Parent, to become effective
December 1, 2000, and upon the effectiveness of such amendment (i) each
outstanding share of Parent Common Stock will become two shares of common stock,
par value $0.00125 per share, and (ii) the authorized capital stock of Parent
will consist of 200,000,000 shares of common stock, par value $0.00125 per
share, and 3,000,000 shares of Parent Preferred Stock. As of the close of
business on November 17, 2000, 35,782,502 shares of Parent Common Stock were
issued and outstanding and no shares of Parent Preferred Stock were issued and
outstanding. All outstanding shares of Parent Common Stock are validly issued,
fully paid and nonassessable and, to Parent's knowledge, are not subject to
preemptive rights. As of the date of this Agreement, 3,056,744 shares of Parent
Common Stock are reserved for issuance in respect of future grants of stock
options (exclusive of 243,377 shares reserved for issuance pursuant to the
Parent's 1999 Employee Stock Purchase Plan).
Section 6.3 Authority; Execution and Delivery. Newco and Parent have
the requisite power and authority to enter into the Transaction Agreements and
to consummate the transactions contemplated thereby. The execution and delivery
of the Transaction Agreements by Newco and Parent, and the consummation of the
transactions contemplated hereby have been duly and validly authorized. The
Transaction Agreements have been duly executed and delivered by Newco and/or
Parent, as the case may be, and, assuming the due authorization, execution and
delivery of the Transaction Agreements by Spectrian, constitute the legal, valid
and binding obligation of Newco, enforceable against Newco in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other similar laws affecting creditors'
rights generally from time to time in effect and to general principles of equity
(including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing) regardless of whether considered in a proceeding in
equity or at law.
Section 6.4 Consents And Approvals; No Violations. The execution and
delivery of the Transaction Agreements by Parent and Newco and the consummation
by Parent and Newco of the transactions contemplated thereby will not: (i)
violate any provision of the charter documents or the by-laws of Parent or
Newco; (ii) violate any Governmental Rule applicable to Parent or Newco; or
(iii) require any filing with, or permit, consent or approval of, or the giving
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of any notice to, any governmental or regulatory body, agency or authority other
than the filing of a pre-merger notification with the Federal Trade Commission
("FTC") and the Department of Justice ("DOJ") under the HSR Act, except where
the failure to make such filing, or obtain such permit, consent or approval, or
give such notice would not have a Material Adverse Effect on Parent or Newco,
respectively.
Section 6.5 SEC Documents. Parent has filed all required forms,
reports, schedules, statements and other documents (including exhibits and other
information incorporated therein) with the SEC since April 20, 1995 through the
date hereof (collectively, the "Parent SEC Reports"). As of their respective
dates, or, if amended, as of the date of the last such amendment, each Parent
SEC Report, (i) was prepared in all material respects with the applicable
requirements of the Securities Act, the Exchange Act, and the rules and
regulations thereunder applicable to such Parent SEC Reports and (ii) at the
time they were filed did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading.
Section 6.6 Compliance with Law; Permits. Neither Parent nor any of its
Subsidiaries are in violation of any applicable statute, rule, regulation,
decree or order of any Governmental Entity applicable to Parent, except for
violations which would not have a Material Adverse Effect on Parent taken as a
whole.
Section 6.7 Litigation. Except as set forth in the Parent SEC Reports,
as of the date hereof, there are no claims, actions, proceedings or governmental
investigations pending or, to the knowledge of Parent, threatened against Parent
or its Subsidiaries which, if adversely determined, would have a Material
Adverse Effect on Parent or its Subsidiaries taken as a whole or prevent the
consummation of the transactions contemplated hereby. Parent is not subject to
any outstanding and unsatisfied order, writ, judgment, injunction or decree or
settlement or consent agreement by or with a Governmental Entity which would
have a Material Adverse Effect on Parent and its Subsidiaries taken as a whole
or prevent the transactions contemplated hereby.
Section 6.8 Brokers and Finders. Except for CIBC World Markets Corp.
whose fees shall be borne by Parent in connection with the transactions
contemplated hereby, no broker, finder or investment bank has acted directly or
indirectly for Parent or Newco, and neither Parent nor Newco has incurred any
obligation to pay any brokerage, finder's or other fee or commission to any
person.
ARTICLE 7
CERTAIN COVENANTS AND AGREEMENTS
Section 7.1 Covenants of Spectrian Relating to Conduct of Business.
During the period from the date of this Agreement and continuing until the
Closing, Spectrian agrees (except as expressly provided in this Agreement or
Schedule 7.1 or to the extent that Parent shall otherwise consent in writing)
that:
(a) Ordinary Course. Spectrian shall carry on the Business and
operate the Acquired Assets in the ordinary course of business in substantially
the same manner as presently conducted, maintain the business records of the
Business in substantially the same manner as presently maintained and use
commercially reasonable efforts to preserve intact the Business' present
business organization, keep available the services of the Business' present
employees and preserve the Business' relationships with customers, suppliers and
others having business dealings with the Business; provided, however, that
nothing contained herein shall be deemed to require the expenditures of any
funds outside the ordinary course of business.
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(b) No Dispositions. Spectrian shall not sell, lease, or
transfer, or agree to sell, lease, or transfer, any of the Acquired Assets,
except in the ordinary course of business.
(c) No Salary Increases. Spectrian shall not increase the
salary of any employee of the Business, except pursuant to existing employment
contracts or in the ordinary course of business consistent with prior practice.
(d) No Additional Material Contracts. Spectrian shall not
enter into any Contract that would be required to be listed on Schedule 5.11 if
it were in effect on the date hereof, including any such Contract for the
purchase of capital assets, without the prior written consent of Parent (which
consent shall not be unreasonably withheld or delayed); provided, however,
Spectrian shall not be required to obtain Parent's consent with respect to
contracts that would be required to be listed pursuant to Section 5.11(a)(iii)
or Section 5.11(a)(iv) if such contracts are entered into during the ordinary
course of business.
(e) Other Actions. Spectrian shall not knowingly take any
action that would reasonably be expected to result in any of the representations
and warranties of Spectrian set forth in this Agreement becoming untrue in any
material respect or in any of the conditions of the Closing set forth in Article
VIII not being satisfied.
Section 7.2 Newco's Access to Information. Spectrian shall afford to
Parent and its accountants, counsel and other representatives reasonable access
upon reasonable advance notice and during normal business hours during the
period prior to the Closing to all the properties, books, contracts,
commitments, Tax Returns and records of the Business (other than any of the
foregoing relating primarily to the Excluded Assets). Newco and Parent
acknowledge that any information being provided to it or its representatives by
Spectrian pursuant to this Agreement is subject to the terms of a
confidentiality agreement between Parent and Spectrian, dated October 5, 2000,
(the "Confidentiality Agreement"), which terms are incorporated herein by
reference.
Section 7.3 Preservation of Records.
(a) At its own expense, Parent shall cause Newco to (i)
preserve and keep the books, contracts, commitments and records included in the
Acquired Assets for a period of not less than seven (7) years from the Closing
Date, or for any longer periods as may be required by any Governmental Entity or
as may be made prudent by the circumstances of any ongoing audit or litigation,
and (ii) provide Spectrian with reasonable access to the foregoing upon
reasonable notice and during normal business hours during such period. In the
event Newco wishes to destroy such copies and records after the time specified
above, it shall first give 60 days' prior written notice to Spectrian, and
Spectrian shall have the right, at its option and expense, and upon prior
written notice given to Newco within such 60 day period, to take possession of
all or any portion of such copies and records.
(b) At its own expense, Spectrian (i) shall preserve and keep
the books, contracts, commitments and records included in the Excluded Assets,
to the extent also relating to the Acquired Assets, for a period of not less
than seven (7) years from the Closing Date, or for any longer periods as may be
required by any Governmental Entity or as may be made prudent by the
circumstances of any ongoing litigation, and (ii) shall provide Parent and Newco
with reasonable
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access to the foregoing upon reasonable notice and during normal business hours
during such period.
(c) Newco acknowledges and agrees that Spectrian shall retain
copies of certain personnel records included in the Acquired Assets which relate
to Spectrian's liabilities in respect of the acquired employees' post-employment
benefits.
(d) All information received or retained by Spectrian or Newco
or any representative of either party pursuant to paragraph (a) or (b) of this
Section 7.3 shall be treated as confidential by such party and by such party's
representatives and shall be subject to other confidentiality arrangements as
may be mutually agreed, and, except to the extent such information is or becomes
generally available, each party and its representatives shall use all
commercially reasonable efforts to maintain the confidentiality of such
information. If either party or any of its representatives is required to
disclose any such information by or to any Governmental Entity, such party
shall, to the extent feasible, prior to such disclosure, notify the other party
of such requirement. Parent or Spectrian shall have the right, at its own
expense, to seek confidential treatment of any information to be so disclosed.
Section 7.4 Legal Conditions to Closing. Each of Spectrian, Parent and
Newco agrees to take all commercially reasonable actions necessary to comply
promptly with all legal requirements which may be imposed on it with respect to
the Closing (including the prompt filing of the premerger notification report
under the HSR Act and the furnishing of all information required under the HSR
Act), and to satisfy all applicable conditions to Closing and consummate and
make effective the transactions contemplated by this Agreement, and shall
cooperate with and furnish information to each other and to other parties in
connection with any such legal requirements.
Section 7.5 Employee Benefits.
(a) Effective as of the Closing, Newco shall offer to employ
all persons listed in Schedule 7.5 (the "Spectrian Employees"). Each such offer
of employment shall be on terms and conditions, including employee benefit
plans, that, taken as a whole, are comparable to the terms and conditions of
employment, including employee benefit plans, provided to employees of Parent as
of the date hereof. Each Spectrian Employee who accepts an offer of employment
from Newco effective as of the Closing shall be referred to herein as a
"Transferred Employee." The provisions of this Section 7.5(a) represent the
present intent of Newco and Newco will exercise good faith efforts to comply
with the provisions of this Section 7.5(a). Notwithstanding anything to the
contrary contained herein, it is understood that Newco and Parent retain
discretion to manage their respective business in the best interests of their
respective shareholders, and that good faith modifications of or variances from
these provisions in the exercise of such discretion are appropriate and
permitted.
(b) From and after the Closing Date, Newco shall recognize any
prior accrued service credit, credit towards satisfying deductible expense
requirements, out-of-pocket expense limits of all Transferred Employees and/or
such Transferred Employees' dependants as of the Closing Date for all purposes
under Newco benefit plans and Newco's benefits and compensation arrangements
(including, but not limited to, eligibility to participate and vesting),
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but excluding benefit accruals. Newco and Spectrian agree that where applicable
with respect to any medical or dental benefit plan of Newco, Newco shall waive,
with respect to any Transferred Employees, any pre-existing condition exclusion
(to the extent such exclusion would not have applied under the applicable plan
of Spectrian or any of its subsidiaries).
(c) Newco shall provide continuation health care coverage to
all Transferred Employees and their qualified beneficiaries who incur a
"qualifying event" after the Closing Date in accordance with and to the extent
required, under the continuation health care coverage requirements of Section
4980D of the Code and Sections 601 through 608 of ERISA ("COBRA"). Spectrian
shall be responsible for providing continuation coverage and all related notices
to the extent required by law to any Transferred Employees (or qualified
beneficiary) who incurs a "qualifying event" under COBRA on or before the
Closing Date.
(d) Newco agrees to provide any required notice under the
Worker Adjustment and Retraining Notification Act, as amended (the "WARN Act"),
and to otherwise comply with the WARN Act with respect to any "plant closing" or
"mass layoff" (as defined in the WARN Act), affecting Transferred Employees and
occurring on or after the Closing Date. Newco shall indemnify and hold harmless
Spectrian and its Affiliates with respect to any liability under the WARN Act
arising from the actions of Newco or its Affiliates on or after the Closing
Date.
Section 7.6 Tax Matters.
(a) All real property, personal property and ad valorem taxes
that are attributable to the Acquired Assets shall be apportioned and prorated
between Spectrian and Newco as of the Closing Date. If, at the time of Closing,
tax rates for the then current year have not been published, then the proration
of real and personal property taxes shall be made on the basis of the tax rate
for the preceding tax year applied to the latest assessed valuation of the
Acquired Assets, and when the tax rate is fixed for the tax year in which the
Closing occurs, Spectrian and Newco agree to adjust such prorations and, if
necessary, to refund or pay such sums to the other party as necessary to effect
such readjustment.
(b) Subject to the provisions of Section 7.2 of this
Agreement, Newco and Spectrian each agrees that it will, and will cause its
Affiliates to, (i) make available all such information, employees and records of
or relating to the Business or the Acquired Assets to the other party and its
employees and advisors as the other party may reasonably request with respect to
matters relating to Taxes (including, without limitation, Tax Returns, Tax
compliance packages and any other relevant information collected in connection
with the filing of Tax Returns and/or reports relating to Taxes), (ii) provide
to the other party copies of such information and records as the other party may
reasonably request, and (iii) cooperate as reasonably requested by the other
party with respect to all matters relating to Taxes (including, without
limitation, the preparation of Tax compliance packages, the filing of Tax
Returns, the filing of any amended Tax Return if reasonably requested by the
other party, audits, and proceedings).
(c) Subject to the provisions of Section 10 of this Agreement,
Spectrian shall indemnify and hold Newco harmless against all Taxes relating to
the Business or the Acquired Assets for Pre-Closing Periods; provided, however,
that in the event that a Tax matter arises that
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could give rise to liability of Spectrian pursuant to this Section 7.6(c), Newco
shall promptly provide written notice thereof to Spectrian, Spectrian, at its
option and expense, shall control all actions taken in connection with such Tax
matter, and neither Parent nor Newco shall agree to or settle such Tax matter
without Spectrian's prior written consent. Any Tax refunds relating to the
Business or the Acquired Assets for Pre-Closing Periods that are received by
Newco, and any amounts credited against any Tax to which Newco becomes entitled
that relate to Pre-Closing Periods or are attributable to any adjustment by a
Taxing Authority to Taxable income, loss or Tax liability for Pre-Closing
Periods, shall be for the account of Spectrian. Newco shall pay over to
Spectrian any such refund or the amount of any such credit within five (5)
business days after the earlier of the receipt thereof by Newco in the case of a
refund or, in the case of a credit, within five (5) business days of the due
date of the Tax Return for the Tax to which the credit is applied.
(d) Notwithstanding any other provision of this Agreement, all
transfer, registration, stamp, documentary, sales, use and similar Taxes
(including, but not limited to, all applicable real estate transfer or gains
Taxes) incurred in connection with this Agreement and the transactions
contemplated hereby shall be the responsibility of and be paid by Spectrian. The
parties shall cooperate in the timely making of all filings, Tax Returns,
reports and forms as may be required in connection therewith. At the Closing,
Spectrian and Newco shall deliver to each other such properly completed resale
exemption certificates and other similar certificates or instruments as are
necessary to claim available exemptions from the payment of sales, transfer, use
or other similar Taxes under applicable law.
(e) If Newco or Spectrian or either of their Affiliates
receives any written notice from any Taxing Authority proposing any adjustment
that could affect the liability of the other party under this Agreement for any
Tax relating to the Business or the Acquired Assets, such party shall give
prompt written notice thereof to the other party, which notice shall describe in
detail each proposed adjustment.
(f) The "consideration" (within the meaning of Code Section
1060) paid by Newco pursuant to the terms hereof shall be allocated among the
assets acquired by Newco hereunder in the manner required by Code Section 1060
and the Treasury Regulations thereunder. Newco shall prepare and deliver a
schedule setting forth the fair market value of the assets and the amount of the
liabilities taken into account under Treasury Regulations sections 1.1060-1T,
1.338-4T, -5T and -6T for review and comment by Spectrian within thirty (30)
days after the Closing Date, and Spectrian shall be deemed to have accepted such
determination unless Spectrian notifies Newco in writing of an objection within
thirty (30) days after receipt of Newco's schedule. If Spectrian gives such
notice of objection to Newco's schedule, and if Newco and Spectrian are unable
to resolve such objection through commercially reasonable efforts within thirty
(30) days of Newco's receipt of Spectrian's notice, then the objection shall be
submitted to and reviewed by an internationally recognized firm of independent
public accountants mutually chosen and jointly engaged by Newco and Spectrian
(the "Resolution CPA Firm"), whose determination shall be conclusive and binding
upon Newco and Spectrian. In connection with the foregoing, Newco and Spectrian
shall make readily available to the Resolution CPA Firm all relevant items
reasonably requested by the Resolution CPA Firm. Further, Newco and Spectrian
shall instruct the Resolution CPA Firm to deliver its written determination to
Newco and Spectrian no later than thirty (30) days after the matter is referred
to
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the Resolution CPA Firm. The fees and expenses of the Resolution CPA Firm shall
be borne equally by Newco and Spectrian. Newco and Spectrian agree that (i)
Newco and Spectrian shall file with their respective federal income Tax Returns
(and applicable foreign, state and local Tax Returns) consistent IRS Forms 8594
(and comparable foreign, state and local forms), including any required
amendments thereto, which shall reflect the allocation determined in accordance
herewith, and (ii) such allocation (subject to appropriate adjustments to
reflect any subsequent change in the consideration hereunder) shall be binding
on Newco and Spectrian for all federal, state, local and foreign Tax purposes.
(g) Notwithstanding any other provision of this Agreement, the
covenants contained in Section 7.6 (relating to Taxes) shall survive
indefinitely.
Section 7.7 Expenses. Whether or not the Closing occurs and except as
otherwise provided in this Agreement, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses. Any finders' or investment
banking fee due by Spectrian in connection with this Agreement or the
transactions contemplated hereby shall be paid by Spectrian directly, and not
out of the Business. Notwithstanding the foregoing or any other provisions of
this Agreement, Newco and Spectrian agree that all fees incurred in connection
with any filing made pursuant to the HSR Act shall be paid by Newco or Parent.
Section 7.8 Financial Information. Subject to the provisions of Section
7.2 and 7.6(b) and after the Closing, upon reasonable written notice, Newco and
Spectrian shall furnish or cause to be furnished to each other and their
respective accountants, counsel and other representatives reasonable access,
during normal business hours, to such information (including records pertinent
to the Business) and assistance relating to the Business as is reasonably
necessary for financial reporting and accounting matters, the preparation and
filing of any returns, reports or forms or the defense of any Tax audit,
proceeding, claim or assessment.
Section 7.9 Bulk Transfer Laws. Newco hereby waives compliance by
Spectrian with the provisions of any so-called "bulk transfer law" (including,
without limitation, bulk transfer laws relating to Taxes) of any jurisdiction in
connection with the sale of the Acquired Assets to Newco. Spectrian shall
indemnify and hold harmless Newco against any and all liabilities, including
applicable interest and penalties, that may be asserted by third parties
(including any Taxing Authority) against Newco as a result of noncompliance with
any such bulk transfer law.
Section 7.10 Actions of Newco and Spectrian. Neither party shall
knowingly take any action that would reasonably be expected to result in any of
the representations or warranties made by such party in the Transaction
Agreements becoming untrue in any material respect or in any of the conditions
of the Closing set forth in Article VIII not being satisfied.
Section 7.11 No Additional Representations. Newco acknowledges that it
and its representatives have been permitted full and complete access to the
Acquired Assets that it and its representatives have desired or requested to see
or review, and that its representatives have had a full opportunity to meet with
Spectrian and representatives of Spectrian and employees of the Business to
discuss the Business. Newco acknowledges that it and its representatives have
received or have had an opportunity to review prior to the date hereof all
written materials which Spectrian is required to deliver or make available, as
the case may be, to Newco pursuant to this Agreement on or prior to the date
hereof. Newco acknowledges that neither Spectrian nor any other person has made
any representation or warranty, express or implied, as to the accuracy or
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completeness of any information regarding the Business or the Acquired Assets
except as expressly set forth in this Agreement and the schedules attached
hereto, and that neither Spectrian nor any other person will be subject to any
liability to Newco or any other person resulting from the distribution to Newco,
or Newco's use of, any such information in any form, including the preliminary
Private Placement Memorandum dated June 9, 2000 relating to the Business, any
documents or materials made available to Newco in any "data room," and any
management presentation in expectation of the transactions contemplated hereby
(subject to the provisions of Section 11.3). Spectrian acknowledges that it and
its representatives have received or have had an opportunity to review prior to
the date hereof all written materials which Parent or Newco is required to
deliver or make available, as the case may be, to Spectrian pursuant to this
Agreement on or prior to the date hereof. Spectrian acknowledges that neither
Parent, Newco nor any other person has made any representation or warranty,
express or implied, as to the accuracy or completeness of any information
regarding the business of either Parent or Newco except as expressly set forth
in this Agreement and the schedules attached hereto, and that neither Parent,
Newco nor any other person will be subject to any liability to Spectrian or any
other person resulting from the distribution to Spectrian, or Spectrian's use
of, any such information in any form (subject to the provisions of Section
11.3).
Section 7.12 Hart-Scott-Rodino Act. As soon as possible after the
execution of this Agreement, but in no event later than ten business days
thereafter, Spectrian and Parent shall prepare and file all documents with the
Federal Trade Commission and the United States Department of Justice as are
required to comply with the HSR Act. Spectrian and Parent shall use commercially
reasonable efforts to respond as promptly as reasonably practicable to any
inquiries received from the FTC and the DOJ for additional information or
documentation and to respond as promptly as reasonably practicable to all
inquiries and requests from any Governmental Entity in connection with antitrust
matters. Spectrian and Parent shall use its commercially reasonable efforts to
overcome any objections which may be raised by the FTC, DOJ or any Governmental
Entity having jurisdiction over antitrust matters. Notwithstanding anything to
the contrary in this Agreement, if Spectrian, in its reasonable business
judgment, considers the imposition of a condition upon the transactions by a
Governmental Entity to be materially adverse to Spectrian or any of its
affiliates, Spectrian may terminate this Agreement.
Section 7.13 Lease. As of the Closing Date, Newco and Spectrian shall
enter into a sublease with respect to the Facility under terms and conditions
substantially similar to the terms and conditions set forth in the Lease (as
defined below) which are applicable to the Facility; provided, however, the
parties agree that the economic terms and conditions which are applicable to the
Facility shall be the same with respect to the sublease as those set forth in
the Lease. Such sublease shall, in any event, (i) be subject and subordinate to,
and be made in accordance with, the terms of the Lease, (ii) provide for
cross-indemnities (with customary carve-outs) pursuant to which Newco shall
indemnify Spectrian with respect to events, matters and circumstances occurring
or arising from and after the date of such sublease, and Spectrian shall
indemnify Newco with respect to events, matters and circumstances occurring or
arising prior to the date of such sublease, and (iii) provide for such other
terms and conditions as Newco and Spectrian may agree. For purposes of this
Section 7.13, the term "Lease" means that certain Spectrian Lease Agreement,
dated as of November 19, 1996, by and between SPEC (CA) QRS 12-20, Inc., a
California corporation, as lessor ("SPEC"), and Spectrian, as lessee. After
Spectrian and Newco enter into such sublease, Spectrian agrees to use
commercially reasonable
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efforts to obtain a non-disturbance agreement from SPEC with terms acceptable to
SPEC, Spectrian and Newco.
Section 7.14 Delivery of Audited Financial Statements. Spectrian agrees
to use commercially reasonable efforts to deliver to Parent the financial
statements of the Business prepared in accordance with GAAP and audited by
PricewaterhouseCoopers LLP for each of the fiscal years ended March 31, 2000,
March 31, 1999 and March 31, 1998 (but excluding a balance sheet for the fiscal
year ended March 31, 1998) (the "Audited Financial Statements") at the earlier
of (i) three (3) days prior to the Closing Date or (ii) within 30 days of the
date hereof. The Audited Financial Statements shall present fairly the financial
condition of the Business as of such dates and the results of operations of the
Business for such periods will be correct and complete in all material respects,
and will be consistent with the books and records of the Business and Spectrian
(which books and records will be correct and complete in all material respects)
and shall be consistent, in all material respects, with Financial Information.
Section 7.15 Stub Period Financial Information. Spectrian agrees to use
commercially reasonable efforts to deliver to Parent unaudited financial
information of the Business as required of the Parent for its Form 8-K filing
requirements for the six month period ended October 1, 2000 (the "Unaudited Stub
Period Financial Information") at the earlier of (i) three (3) days prior to the
Closing Date or (ii) within 30 days of the date hereof. The unaudited financial
information will be prepared from the books and records of Spectrian and the
Business on a basis consistent with the Audited Financial Statements.
Section 7.16 Listing of Additional Shares. Promptly following the date
hereof, Parent shall use its reasonable best efforts to file with the NASDAQ
National market, to the extent required, a Notification Form for Listing of
Additional Shares with respect to the Shares of Parent Common Stock to be issued
at the Closing by Parent as a result of the Acquisition.
Section 7.17 Non-Competition; Non-Solicitation.
(a) For a period of two (2) years following the Closing Date,
Spectrian shall not directly or indirectly engage in the business of developing,
manufacturing and supplying radio frequency power semiconductors in the
Semiconductor Field (the "Competing Business"). For purposes of this Section
7.17, Spectrian shall be deemed to engage in a business if it, directly or
indirectly, engages or invests in, owns, manages, operates, controls or
participates in the ownership, management, operation or control of, or renders
services or advice to, any business engaged in the Business; provided, however,
that Spectrian may invest in the securities of any enterprise (but without
otherwise participating in the activities of such enterprise) if (i) such
securities are listed on any national or regional securities exchange or have
been registered under Section 12(g) of the Securities Exchange Act of 1934 and
(ii) Spectrian does not beneficially own (as defined Rule 13d-3 promulgated
under the Securities Exchange Act of 1934) in excess of 5% of the outstanding
equity of such enterprise. The foregoing shall not prevent Spectrian from either
(A) working with venders of semiconductor components to develop such components
for use in amplifiers and amplifier subsystems manufactured by Spectrian, or (B)
being acquired by a company or a subsidiary, division or business unit of a
company (each, a "Separate Unit") where the Separate Unit itself is not engaged
in the Competing Business and where Spectrian has no business relationship with
any other parts of the company that are engaged in the Competing
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Business and where Spectrian is not involved, directly or indirectly, in any
part of the company's (or any other Separate Unit's) Competing Business
activities.
(b) During the same period as the restrictions of paragraph
(a) above shall apply, neither Spectrian, Parent or Newco shall (i) request,
induce or attempt to influence any distributor or supplier of goods or services
to any other party to curtail or cancel any business they may transact with the
other party, (ii) request, induce or attempt to influence any customers of any
other party that have done business with or potential customers which have been
in contact with the other party to curtail or cancel any business they may
transact with the other party, (iii) request, induce or attempt to influence any
employee of any other party to terminate his or her employment or consulting
agreement with such other party or (iv) request, induce or attempt to influence
any Governmental Entity or regulatory authority to terminate, revoke or
materially and adversely alter or impair any license held, owned, used or
reserved for the other party.
Section 7.18 Orderly Disposition of Stock Consideration. Spectrian
agrees that during the five (5) business days immediately after the Closing
Date, it shall not (without the consent of Parent) sell into the public markets
in excess of 25,000 shares of Parent Common Stock during any one business day.
Spectrian agrees that during the next 55 days, it shall not sell into the public
markets in excess of 75,000 shares of Parent Common Stock during any one (1)
business day, nor shall it sell more than an aggregate of 300,000 shares of
Parent Common Stock during any one (1) calendar week. In addition, Spectrian
agrees that it shall make all public sales of Parent Common Stock through a
registered market maker and otherwise in accordance with Rule 145 under the
Securities Act. This Section 7.18 shall not apply to the Immediately Available
Consideration.
Section 7.19 Exclusivity. From the date hereof until the earlier of the
Closing Date or such time as this Agreement is terminated pursuant to Article 9
herein, Spectrian agrees that it will not, and will cause its affiliates,
directors, officers, employees and representatives not to, directly or
indirectly, (i) initiate, solicit, encourage, discuss, negotiate, entertain or
accept any inquiries, proposals or offers (whether initiated by them or
otherwise) with respect to (A) the acquisition of any shares of capital stock or
any other voting securities or debt securities of the Business or Spectrian or
any interest therein, (B) the acquisition of all or a material portion of the
assets and properties of the Business or Spectrian or any interest therein (C)
the merger, consolidation or combination of the Business or Spectrian, (D) the
liquidation, dissolution or reorganization of the Business or Spectrian (each of
the foregoing, a "Potential Transaction"), (ii) provide information relating to
the Business in connection with a Potential Transaction or (iii) enter into any
contract, agreement arrangement or understanding concerning or relating to a
Potential Transaction, in each case with a third party other than Parent. In the
event that Spectrian or the Business, or any of their respective affiliates,
directors, officers, employees or representatives, receives an unsolicited
inquiry, proposal or offer with respect to a Potential Transaction or obtains
information that such an inquiry, proposal or offer is likely to be made,
Spectrian or the Business or such affiliate director officer employee or
representative, will provide Parent with immediate notice thereof, subject to
the confidentiality provisions contained herein, which notice shall include the
terms of and the identity of the person or persons making such inquiry proposal
or offer; provided, however, that Spectrian shall not be subject to this
paragraph to the extent a Potential Transaction involves Spectrian alone and
does not
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contemplate the inclusion of the Business unless such Potential Transaction
would impair or otherwise affect the consummation of the Acquisition.
Section 7.20 Registration Rights. In the event the shares of Parent
Common Stock issuable pursuant to this Agreement (the "Registrable Securities")
do not become exempt from registration under applicable federal and state laws
for any reason prior to the Closing Date, Parent hereby agrees to enter into a
Registration Rights Agreement in the form attached hereto.
Section 7.21 Parent's Investigation Period.
(a) As used herein, the term "Parent's Investigation Period"
shall mean the period commencing on the date hereof and ending on the Closing
Date. As used herein, the term "Parent's Investigation" shall mean Parent's
right, prior to the expiration of the Parent's Investigation Period and at
Parent's sole expense, to conduct any inspections and investigations reasonably
requested by Parent with respect to the physical or environmental condition of
the Facility or the Acquired Assets (collectively referred to hereinafter from
time to time as the "Property") as shall be deemed desirable by Parent,
including conducting and taking studies, surveys, tests (including specifically
soil and/or groundwater testing), sampling and borings on or under the Property
(including without limitation the performance of Phase I and Phase II
environmental audits of the Property).
(b) Parent, its agents, employees, contractors or other
representatives, shall have the rights of access to the Property at all
reasonable times during the Parent's Investigation Period for the purpose of
conducting any and all above-referenced inspections and investigations.
Spectrian hereby agrees to cooperate with and assist Parent in inspecting and
investigating the Property during Parent's Investigation Period. Within three
(3) business days of the date hereof, Spectrian shall deliver to Parent copies
of all surveys, engineering reports, appraisals, environmental audits,
construction documents (including without limitation all related plans and
specifications), governmental permits, access agreements, and utility
agreements, if any, relating to the Property in Spectrian's possession, as well
as any other agreements to be assigned to Parent under the terms of this
Agreement.
(c) Parent shall be responsible for the management and
disposal of any investigation-derived waste (including, without limitation,
drill cuttings and purge water), and shall properly close all soil borings and
groundwater wells in compliance with all applicable requirements of law. Parent
shall provide Spectrian split samples from each sampling point properly packaged
and preserved and copies of all sampling logs and related information necessary
for independent analysis of such samples by Spectrian.
(d) Except to the extent caused by the negligence or
misconduct of Spectrian, its Affiliates, employees, contractors or agents,
Parent agrees to indemnify and hold harmless Spectrian and all of its officers,
directors, employees, representatives and agents (the "Indemnified Parties")
from and against all damages to the Property (and all improvements and personal
property thereon) caused by the Parent's Investigation, and Parent agrees to
indemnify and hold harmless the Indemnified Parties from and against any and all
liability, cost and expense (including, without limitation, attorneys' fees and
expenses of any of the Indemnified Parties) arising from the handling,
transportation, treatment, storage or disposal of samples of
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environmental media generated in connection with the Parent's Investigation.
This Section 7.21(d) shall survive the termination of this Agreement and shall
be subject to the indemnification procedures set forth in Article 10.
(e) Parent shall provide Spectrian with copies of all reports
(including, without limitation, analysis results) prepared in connection with
the Parent's Investigation. Parent shall use any reports prepared or information
generated in connection with the Parent's Investigation solely in connection
with the transactions contemplated by Parent and Spectrian, and Parent shall not
disclose or permit the disclosure of such reports or information to any person
(other than agents and representatives of Parent and Newco which persons shall
be subject to confidentiality agreements) for any reason at any time; provided,
however, that, after providing written notice thereof to Spectrian, Parent may
disclose such reports or information as required by law or court order. This
Section 7.21(e) shall survive the termination of this Agreement.
(f) In the event Parent's investigation identifies any
Environmental Condition that would constitute a breach by Spectrian of Section
5.18 herein, then Parent shall have the right to give written notice thereof to
Spectrian and elect to terminate this Agreement. If Parent provides such notice
to Spectrian and does not elect to terminate, Spectrian may either (i) cure any
problems or defects noted by Parent (at Spectrian's sole cost and expense), (ii)
provide for the cure of any such problems or defects (at Spectrian's sole cost
and expense), or (iii) refuse to cure any such problems or defects. In the event
Spectrian elects to cure, or provide for the cure, of any such noted problems or
defects, Spectrian shall so notify Parent of such election within 10 business
days of Spectrian's receipt of such notice. If Spectrian (i) elects not to cure
said problems or defects, or provide for the cure of said problems or defects,
or (ii) fails to timely notify Parent of such election, or (iii) fails for any
reason to cure said problems or defects within a mutually agreed upon cure
period, then Parent shall have the option of either accepting the Property in
its then-present condition or terminating this Agreement, in which case Parent
shall have no further obligations hereunder, except as may otherwise be provided
herein.
(g) Neither Parent's performance of any additional due
diligence activities hereunder nor anything else contained in this Section 7.21
shall diminish, waive or have any impact or effect on the warranties and
representations of Spectrian contained herein, or on any rights or remedies to
which Parent or Newco may be entitled hereunder.
Section 7.22 Employee Benefits. No later than 10 calendar days after
the Closing Date, Spectrian shall provide to the employees of the Business the
benefits, including any payments due, in accordance with the terms and
conditions of Schedule 7.22.
ARTICLE 8
CONDITIONS PRECEDENT
Section 8.1 Conditions to Each Party's Obligations. The obligation of
Newco and Parent to purchase the Acquired Assets and assume the Assumed
Liabilities and the obligation of Spectrian to sell, assign, convey and deliver
the Acquired Assets to Newco shall be subject to the satisfaction prior to the
Closing of the following conditions:
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(a) HSR. Any applicable waiting period under the HSR Act shall
have expired or been terminated.
(b) No Litigation, Injunctions, or Restraints. No temporary
restraining order, preliminary or permanent injunction or other legal restraint
or prohibition preventing the consummation of the transactions contemplated by
this Agreement shall be in effect.
Section 8.2 Conditions to Obligations of Parent and Newco. The
obligation of Parent and Newco to purchase the Acquired Assets and assume the
Assumed Liabilities is subject to the satisfaction on and as of the Closing of
each of the following additional conditions:
(a) Representations and Warranties. The representations and
warranties of Spectrian set forth in the Transaction Agreements shall be true
and correct as of the Closing as though made on and as of the Closing, except
(i) to the extent such representations and warranties relate to an earlier date
(in which case such representations and warranties shall be true and correct as
of such earlier date with the exception of the Schedule 5.11 which shall be
updated as of the Closing Date) and (ii) except for breaches of representations
and warranties that are not qualified as to "materiality", "Material Adverse
Effect" or a similar term which shall be true as to matters that, individually
or in the aggregate are not reasonably likely to have a Material Adverse Effect
on the Business and the Acquired Assets (representations and warranties that are
qualified as to "materiality", "Material Adverse Effect" or a similar term shall
be true and correct when made at and as of the Closing as if made as at and as
of such time), and Newco shall have received a certificate of Spectrian to such
effect.
(b) Performance of Obligations of Spectrian. Spectrian shall
have performed or complied in all material respects with all obligations,
conditions and covenants required to be performed by it under the Transaction
Agreements at or prior to the Closing, and Newco shall have received a
certificate of Spectrian to such effect.
(c) Deliveries. Spectrian shall have delivered to Parent the
Audited Financial Statements, the Unaudited Stub Period Financial Information, a
certified copy of its charter and a certificate of good standing from the State
of Delaware. Spectrian shall have executed and delivered to Newco (i) bills of
sale conveying the personal property included in the Acquired Assets, (ii) the
Transaction Agreements, and (iii) any required transfer tax forms and
affidavits.
(d) FIRPTA Compliance. On the Closing Date, Spectrian shall
deliver to Newco a properly executed statement pursuant to Treasury Regulations
Section 1.1445-2(b)(2) for purposes of satisfying Newco's obligation under
Section 1445 of the Code and the regulations thereunder.
(e) Lease. The lessor shall have consented to the sub-lease of
the Lease in accordance with the provisions of Section 7.13.
(f) Absence of Changes. There shall not have occurred after
the date hereof any change in or effect on the Business that could have a
Material Adverse Effect on the Business or Spectrian; provided, however, that in
no case shall a decrease in Spectrian's share price or a
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general decline in the industry as a whole constitute a Material Adverse Effect
for the purpose of this Section 8.2(f).
(g) Third Party Consents. Spectrian shall have received
consent to the assignment of the Contracts listed on Schedule 8.2(g).
(h) Legal Opinion. Parent and Newco shall have received an
opinion addressed to Parent and Newco from legal counsel to Spectrian reasonably
acceptable to Parent and Newco as to such matters as Parent and Newco shall
reasonably request.
(i) Patent Opinion. Parent and Newco shall have received an
opinion addressed to Parent and Newco from Townsend and Townsend and Crew LLP,
or other counsel of Spectrian reasonably acceptable to Parent, as described in
Schedule 8.2(i).
(j) Employees. At least ninety percent (90%) of the employees
listed in Schedule 7.5 hereto shall have accepted employment with Newco.
(k) Liens. All Liens on the Acquired Assets will have been
terminated or released by the holders of the Liens and evidence of such release
or termination shall have been provided.
Section 8.3 Conditions to the Obligations of Spectrian. The obligations
of Spectrian to sell, assign, convey, and deliver the Acquired Assets, or to
cause the Acquired Assets to be sold, assigned, conveyed or delivered, as
applicable, is subject to the satisfaction on and as of the Closing of each of
the following conditions:
(a) Representations and Warranties. The representations and
warranties of Parent and Newco set forth in the Transaction Agreements shall be
true and correct in all material respects as of the Closing as though made on
and as of the Closing, except to the extent such representations and warranties
expressly relate to an earlier date (in which case such representations and
warranties shall be true and correct as of such earlier date), and Spectrian
shall have received a certificate signed by authorized officers of Parent and
Newco to such effect.
(b) Performance of Obligations of Newco. Parent and Newco
shall have performed in all material respects all obligations required to be
performed by each under the Transaction Agreements at or prior to the Closing,
and Spectrian shall have received a certificate signed by authorized officers of
Parent and Newco to such effect.
(c) Deliveries. Parent and Newco shall have delivered to
Spectrian a certified copy of its charter and a certificate of good standing
from the State of North Carolina, and Parent and Newco shall have executed and
delivered the Transaction Agreements and any required transfer tax forms and
affidavits.
(d) Absence of Changes. There shall not have occurred after
the date hereof any change in or effect on the Parent that could have a Material
Adverse Effect on the Parent; provided, however, that in no case shall a
decrease in Parent's share price or a general decline in the industry as a whole
constitute a Material Adverse Effect for the purpose of this Section 8.3(d).
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(e) Legal Opinion. Spectrian shall have received an opinion
addressed to Spectrian from Smith, Anderson, Dorsett, Mitchell & Jernigan L.L.P.
as to such matters as Spectrian shall reasonably request.
ARTICLE 9
TERMINATION, AMENDMENT AND WAIVER
Section 9.1 Termination.
(a) Notwithstanding anything to the contrary in this
Agreement, this Agreement may be terminated and the transactions contemplated
hereby abandoned at any time prior to the Closing:
(i) by mutual written consent of Spectrian and
Parent;
(ii) by Spectrian if the condition set forth in
Section 3.1(b) is met or if any of the
conditions set forth in Sections 8.1 or 8.3
shall have become incapable of fulfillment
and shall not have been waived by Spectrian;
or
(iii) by Newco if any of the conditions set forth
in Sections 8.1 or 8.2 shall have become
incapable of fulfillment and shall not have
been waived by Newco; or
(iv) by Spectrian or Newco if the Closing does
not occur on or prior to February 1, 2001;
provided, however, that the party seeking termination pursuant to clause (ii),
(iii) or (iv) is not in breach in any material respects of any of its
representations, warranties, covenants or agreements contained in this Agreement
or whose action or failure to act shall have been a principal cause of or
resulted in the failure of the transactions contemplated by this Agreement or
such conditions having become incapable of fulfillment.
(b) In the event of termination by Spectrian, on the one hand,
or Newco, on the other hand, pursuant to this Section 9.1, written notice
thereof shall forthwith be given to the other party and the transactions
contemplated by this Agreement shall be terminated, without further action by
any party. If the transactions contemplated by this Agreement are terminated as
provided herein:
(i) Newco shall return all documents and other
material received from Spectrian relating to
the Business and to the transactions
contemplated hereby, whether so obtained
before or after the execution hereof, to
Spectrian; and
(ii) all confidential information received by
Newco with respect to Spectrian or the
Business shall be treated in accordance with
the Confidentiality Agreement, which shall
remain in full force and effect
notwithstanding the termination of this
Agreement.
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(c) Notwithstanding Section 7.7 above, and without limiting
the availability of any other remedy, in the event of termination of this
Agreement by Spectrian under Section 9.1(a)(ii) on the basis of a material
uncured breach by Parent or Newco or of termination by Parent or Newco under
Section 9.1(a)(iii) on the basis of a material uncured breach by Spectrian, the
breaching party shall reimburse, within five (5) business days after
termination, the terminating party's out-of-pocket costs and expenses incurred
in connection with this Agreement and the transactions contemplated solely
hereby; provided, however, the aggregate amount of such out-of-pocket costs and
expenses shall in no case be deemed to exceed $750,000.
(d) If this Agreement is terminated and the transactions
contemplated hereby are abandoned, this Agreement shall become null and void and
of no further force and effect, except for the provisions of Sections 7.7, 9.1,
11.7 and 11.8. Nothing in this Section 9.1 shall be deemed to release any party
from any liability for any breach by such party of the terms and provisions of
this Agreement.
Section 9.2 Amendments and Waivers. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto. By an instrument in writing, Parent, on the one hand, or Spectrian, on
the other hand, may waive compliance by the other party with any term or
provision of this Agreement that such other party was or is obligated to comply
with or perform.
ARTICLE 10
INDEMNIFICATION
Section 10.1 Indemnification by Spectrian.
(a) Spectrian hereby agrees to indemnify, defend and hold
Parent, Newco and its Affiliates and their respective officers, directors and
employees (the "Newco Indemnified Parties") against, and agrees to hold them
harmless from, any Loss to the extent such Loss arises from or in connection
with:
(i) any breach by Spectrian of any
representation or warranty contained in this
Agreement or any other agreement or
documents delivered in connection herewith;
(ii) any breach by Spectrian of any of its
covenants contained in this Agreement; or
(iii) any Excluded Liability.
(b) Notwithstanding the foregoing, the indemnification in
favor of the Newco Indemnified Parties contained in this Section 10.1 (i) shall
not be effective until the aggregate dollar amount of all Losses indemnified
against under this Section 10.1 exceeds one (1) half of one (1) percent (0.5%)
of the Purchase Price ("Spectrian's Threshold Amount"), and then only to the
extent such aggregate amount exceeds Spectrian's Threshold Amount; and (ii)
shall terminate once the aggregate dollar amount of all Losses indemnified
against under this Section 10.1 aggregates 25% of the Purchase Price
("Spectrian's Cap Amount"), and Spectrian shall thereafter have no further
obligations or liabilities with respect to any of such losses; provided,
however,
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that in the event there are Losses asserted against, imposed upon or incurred by
the Newco Indemnified Parties resulting from breaches of Sections 5.13, 5.18,
5.20, 7.6 or 7.21 of this Agreement, there shall be no Spectrian Threshold
Amount and Spectrian's Cap Amount shall be unlimited, with respect to Losses
asserted against, imposed upon or incurred by the Newco Indemnified Parties
resulting from breaches of Sections 5.13, 5.18, 5.20, 7.6 and 7.21 of this
Agreement, only; provided, further, that the foregoing limitations on
Spectrian's indemnification obligations pursuant to this Section 10.1 shall not
apply to any indemnification by Spectrian for any Losses asserted against,
imposed upon or incurred by the Newco Indemnified Parties resulting from any
Excluded Liability or from fraud or willful misconduct.
(c) Parent, Newco and Spectrian acknowledge and agree that
their sole and exclusive remedy with respect to any and all claims relating to
the subject matter of this Agreement shall be pursuant to the indemnification
provisions set forth in this Section 10.1 (with respect to Parent and Newco) and
Section 10.2 (with respect to Spectrian). In furtherance of the foregoing,
Parent and Newco hereby waive, to the fullest extent permitted under applicable
law, any and all rights, claims and causes of action each may have against
Spectrian arising under or based upon any Governmental Rule; provided, however,
Spectrian acknowledges that money damages would not be sufficient or adequate
remedy for any breach or violation of, or default under Section 7.17, 7.19 or
9.1(c) of this Agreement, and Spectrian agrees that with respect to Section
7.17, 7.19 or 9.1(c) of this Agreement Parent shall be entitled to the fullest
extent permitted by law to an injunction restraining such breach, violation or
default or threatened breach, violation or default and to any other equitable
relief, including, without limitation, specific performance.
(d) Amounts payable to Parent for indemnification claims under
this Section 10.1 shall first be paid from the escrow account under the Escrow
Agreement. To the extent the foregoing is not sufficient to pay such claim, such
claim shall be paid by Spectrian.
Section 10.2 Indemnification by Parent and Newco.
(a) Newco and Parent hereby agree to indemnify Spectrian and
its Affiliates and their respective officers, directors and employees (the
"Spectrian Indemnified Parties") against, and agrees to hold them harmless from,
any Loss to the extent such Loss arises from or in connection with:
(i) any breach by Newco or Parent of any
representation or warranty contained in this
Agreement or any other agreement or document
(other than the Purchase and Supply
Agreement) delivered in connection herewith;
(ii) any breach by Newco or Parent of any
covenant contained in this Agreement;
(iii) the operation of the Business after the
Closing Date; or
(iv) any Assumed Liability.
(b) Notwithstanding the foregoing, the indemnification in
favor of the Spectrian Indemnified Parties contained in this Section 10.2 (i)
shall not be effective until the aggregate
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dollar amount of all Losses indemnified against under this Section 10.2 exceeds
one (1) half of one (1) percent (0.5%) of the Purchase Price ("Parent's
Threshold Amount"), and then only to the extent such aggregate amount exceeds
Parent's Threshold Amount; and (ii) shall terminate once the aggregate dollar
amount of all Losses indemnified against under this Section 10.2 aggregates 25%
of the Purchase Price, and Parent shall thereafter have no further obligations
or liabilities with respect to any of such losses
Section 10.3 Losses Net of Insurance, etc. The amount of any Loss for
which indemnification is provided under this Article 10 shall be net of any
actual cash insurance recoveries or recoveries of indemnities from any third
parties. Neither party shall have an obligation to seek an insurance recovery or
third party indemnification and if a party does so and obtains a recovery, the
party's indemnity claim shall not be offset to the extent of the party's
expenses in obtaining such recovery and an amount equal to anticipated premium
increases for the following three (3) years.
Section 10.4 Termination of Indemnification. The obligations to
indemnify and hold harmless any party, (a) pursuant to Sections 10.1(a)(i) and
10.2(a), shall terminate when the applicable representation or warranty
terminates pursuant to Section 11.3, and (b) pursuant to the other clauses of
Sections 10.1 and 10.2 shall not terminate.
Section 10.5 Procedure.
(a) For an indemnified party (the "indemnified party") to be
entitled to any indemnification provided for under this Agreement, such
indemnified party shall, following the discovery of the matters giving rise to
any Loss, notify the indemnifying party (the "indemnifying party") in writing of
its claim for indemnification for such Loss, specifying in reasonable detail the
nature of such Loss and the amount of the liability estimated to accrue
therefrom; provided, however, that failure to give such notification shall not
affect the indemnification provided hereunder except to the extent the
indemnifying party shall have been actually prejudiced as a result of such
failure (except that the indemnifying party shall not be liable for any expenses
incurred during the period in which the indemnified party failed to give such
notice). Thereafter, the indemnified party shall deliver to the indemnifying
party, within five business days after the indemnified party's receipt of such
notice, all information and documentation reasonably requested by the
indemnifying party with respect to such Loss.
(b) If the indemnification sought pursuant hereto involves a
claim made by a third party against the indemnified party (a "Third Party
Claim"), the indemnifying party shall be entitled to participate in the defense
of such Third Party Claim and, if it so chooses, to assume the defense of such
Third Party Claim with counsel selected by the indemnifying party. Should the
indemnifying party so elect to assume the defense of a Third Party Claim, the
indemnifying party shall not be liable to the indemnified party for any legal
expenses subsequently incurred by the indemnified party in connection with the
defense thereof. If the indemnifying party assumes such defense, the indemnified
party shall have the right to participate in the defense thereof and to employ
counsel, at its own expense, separate from the counsel employed by the
indemnifying party, it being understood that the indemnifying party shall
control such defense. The indemnifying party shall be liable for the fees and
expenses of counsel employed by the indemnified party for any period during
which the indemnifying party has not assumed the
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defense thereof (other than during any period in which the indemnified party
shall have failed to give notice of the Third Party Claim as provided above). If
the indemnifying party chooses to defend or prosecute a Third Party Claim, all
of the parties hereto shall cooperate in the defense or prosecution thereof.
Such cooperation shall include the retention and (upon the indemnifying party's
request) the provision to the indemnifying party of records and information
which are reasonably relevant to such Third Party Claim, and making employees
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. If the indemnifying party
chooses to defend or prosecute any Third Party Claim, the indemnified party will
agree to any settlement, compromise or discharge of such Third Party Claim which
the indemnifying party may recommend and which by its terms obligates the
indemnifying party to pay the full amount of the liability in connection with
such Third Party Claim. Whether or not the indemnifying party shall have assumed
the defense of a Third Party Claim, the indemnified party shall not admit any
liability with respect to, or settle, compromise or discharge, such Third Party
Claim without the indemnifying party's prior written consent.
ARTICLE 11
GENERAL PROVISIONS
Section 11.1 Notices. All notices, requests and other communications
hereunder shall be in writing and shall be sent, delivered or mailed, addressed
as follows:
if to Parent, to:
Cree, Inc.
4600 Silicon Drive
Durham, North Carolina 27703
Attention: Adam H. Broome, General Counsel and Secretary
Fax: (919) 313-5456
with a copy (which shall not constitute notice) to:
Smith, Anderson, Dorsett, Mitchell & Jernigan L.L.P.
2500 First Union Capitol Center
Raleigh, North Carolina 27601
Attention: Gerald F. Roach
Fax: (919) 821-6800
and
if to Spectrian, to:
Spectrian Corporation
350 West Java Drive
Sunnyvale, California 94809
Attention: Michael D. Angel
Fax: (408) 541-0262
with a copy (which shall not constitute notice) to:
Dewey Ballantine LLP
800 Menlo Ave., Suite 215
Menlo Park, California 94025
Attention: Robert M. Smith
Fax: (650) 462-7499
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Each such notice, request or other communication shall be given (i) by hand
delivery, (ii) by certified mail or (iii) by nationally recognized courier
service. Each such notice, request or communication shall be effective when
delivered at the address specified in this Section 11.1 (or in accordance with
the latest unrevoked direction from the receiving party).
Section 11.2 Headings. The table of contents and headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
Section 11.3 Survival of Representations and Warranties. All
representations and warranties of Spectrian and Newco and Parent contained
herein or made pursuant hereto shall survive the Closing Date for a period of 18
months after the Closing Date, notwithstanding any investigation or examination
of or knowledge with respect to, the subject matter thereof by or on behalf of
Spectrian, Newco or Parent; provided, however, such representations and
warranties shall survive for the applicable statute of limitations in the event
of fraud or intentional misrepresentation with respect thereto; provided,
further, the representations and warranties made pursuant to Section 5.13 shall
survive for a period of 24 months after the Closing Date; provided, further, the
representations and warranties made pursuant to Sections 5.18 and 5.20 shall
survive for the applicable statute of limitations. Any right of indemnification
pursuant to Article 10 hereof with respect to a claimed breach of a
representation or warranty shall expire at the date of termination of the
representation or warranty claimed to be breached (the "Termination Date"),
unless on or prior to the Termination Date the party from whom indemnification
is sought shall have received notice in accordance with the provisions of
Section 10.5 herein and the Escrow Agreement.
Section 11.4 Severability. If any provision of this Agreement, or the
application thereof to any person, place or circumstances, shall be held by a
court of competent jurisdiction to be invalid, unenforceable, or void, the
remainder of this Agreement and such provisions as applied to other persons,
places, and circumstances shall remain in full force and effect; provided,
however, that in the event that the terms and conditions of this Agreement are
materially altered as a result of this paragraph, the parties hereto will
renegotiate the terms and conditions of this Agreement to resolve any
inequities.
Section 11.5 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties, it being understood that
all parties need not sign the same counterpart.
Section 11.6 Entire Agreement; No Third Party Beneficiaries. This
Agreement and the Confidentiality Agreement constitute the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among
the parties hereto with respect to the subject matter hereof. Except as
specifically provided herein or therein, such agreements are not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder or thereunder.
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Section 11.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of North Carolina, regardless
of the laws that might otherwise govern under applicable principles of conflicts
of law.
Section 11.8 Publicity. Except as may be required by applicable
securities laws upon the advice of counsel, neither Spectrian, on the one hand,
nor Newco or Parent, on the other hand, shall issue or cause the publication of
any press release or other public announcement with respect to the transactions
contemplated by this Agreement without the consent of the other party, which
consent shall not be unreasonably withheld.
Section 11.9 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties, except that
Parent may assign its rights, interests and obligations hereunder to a
wholly-owned subsidiary of Parent without the prior written consent of
Spectrian, provided that, prior to any such assignment, Parent executes and
delivers to Spectrian a written guaranty, in form reasonably satisfactory to
Spectrian, of the performance of all of Newco's obligations under this
Agreement. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns. In addition, in the event Spectrian sells all
or substantially all of its assets, Spectrian shall cause the buyer thereof to
assume Spectrian's obligations hereunder and, subject to the confidentiality
provisions contained herein, shall notify Parent in writing of the proposed sale
and provide evidence of the assumption of Spectrian's obligations by the buyer
of its assets.
* * *
[THIS SPACE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, Parent, Newco and Spectrian have caused this
Agreement to be signed by their respective parties thereunto duly authorized,
all of the date first written above.
CREE, INC.
By: /s/ F. Neal Hunter
------------------
F. Neal Hunter
Chairman and Chief Executive Officer
ZOLTAR ACQUISITION, INC.
By: /s/ F. Neal Hunter
------------------
F. Neal Hunter
Chief Executive Officer
SPECTRIAN CORPORATION
By: /s/ Garrett A. Garrettson
-------------------------
Garrett A. Garrettson
Chairman of the Board
LIST OF OMITTED EXHIBITS AND ATTACHMENTS
The following schedules and attachments have been omitted from this filing:
Schedule 2.2(a)(ii), Software
Schedule 2.2(a)(ii), Business Equipment
Schedule 2.2(a)(v), Acquired Contracts
Schedule 2.3(a)(ii)(A), Business Accounts Payable
Schedule 5.4(i), UltraRF Statement of Business Assets and Liabilities as of
March 31, 1999 and March 31, 2000 (Unaudited)
Schedule 5.4(ii), UltraRF Statement of Operations, Fiscal Years Ending March 31,
1998, March 31, 1999, and March 31, 2000 (Unaudited)
Schedule 5.4(iii), UltraRF Statement of Operations
for Six Month Period Ended October 1, 2000 (Unaudited)
Schedule 5.4(iv), UltraRF Statement of Business Assets and Liabilities as of
October 1, 2000 (Unaudited)
Schedule 5.5, Title to Acquired Assets
Schedule 5.6, Absence of Certain Changes or Events
Schedule 5.7, Employment Matters
Schedule 5.8, Employee Benefit Plans and Amounts of Unfunded Retirement
Liabilities
Schedule 5.9, Litigation
Schedule 5.10, Compliance with Laws
Schedule 5.11, Contracts
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Schedule 5.13, Intellectual Property
Schedule 5.18, Environmental Compliance
Schedule 5.20, Taxes
Schedule 7.1, Covenants of Spectrian Relating to Conduct of Business
Schedule 7.5, Employee Benefits
Schedule 7.22, Employee Benefits
Schedule 8.2(g), Required Third Party Consents
Schedule 8.2(i), Patent Opinion
Annex I:
Form of Escrow Agreement
Form of Development Agreement
Employment Agreement with Johan Darmawan
Employment Agreement with Joe Hornung
Employment Agreement with John P. Quinn
Employment Agreement with Christopher Tubis
Employment Agreement with Jay Vyas
Form of Transition Services Agreement
Form of Purchase and Supply Agreement
Form of Registration Rights Agreement
Form of Assignment and License Agreement
Cree hereby agrees to furnish supplementally to the Commission a copy of any
omitted exhibit or attachment upon request.
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