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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Siliconix Incorporated
----------------------
(Name of Issuer)
Common Stock, par value $.01
----------------------------
(Title of Class of Securities)
827079 10 4
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(CUSIP Number)
Avi D. Eden, Esq.
Vishay Intertechnology, Inc.
63 Lincoln Highway
Malvern, PA 19355
(610) 644-1300
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(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
with a copy to:
Mark B. Segall, Esq.
Kramer, Levin, Naftalis & Frankel
919 Third Avenue, New York, NY 10022
(212) 715-9100
December 16, 1997
-----------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box: [_]
Page 1 of 7 Pages
Exhibit Index appears on page 7
<PAGE>
SCHEDULE 13D
CUSIP No. 25443 10 1
- --------------------------------------------------------------------------------
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Vishay Intertechnology, Inc. (I.R.S. employer
identification no. 38-1686453)
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
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3) SEC USE ONLY
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4) SOURCE OF FUNDS
BK (See Item 3)
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5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
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6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7) SOLE VOTING POWER
Not Applicable
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY 8,010,000 shares of Common Stock as of the Closing Date
EACH REPORTING (as defined in Item 1)
PERSON --------------------------------------------------------------
WITH 9) SOLE DISPOSITIVE POWER
Not Applicable
--------------------------------------------------------------
10) SHARED DISPOSITIVE POWER
8,010,000 shares of Common Stock as of the
Closing Date
- --------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,010,000 shares of Common Stock will be deemed to be beneficially
owned by Vishay as of the Closing Date
- --------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
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13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
80.4% (See Item 5)
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14) TYPE OF REPORTING PERSON
CO
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Page 2 of 7 Pages
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SCHEDULE 13D
------------
ITEM 1. SECURITY AND ISSUER.
This Statement on Schedule 13D (the "Statement") relates to common
stock, $.01 par value per share (the "Common Stock") of Siliconix Incorporated,
a Delaware corporation (the "Company"). The principal executive offices of the
Company are located at 2201 Laurelwood Road, Santa Clara, California 95056.
Reference is made to the Stock Purchase Agreement (the "Stock Purchase
Agreement"), dated December 16, 1997, among TEMIC TELEFUNKEN microelectronic
GmbH (the "German Seller"), Delengate Limited, Daimler-Benz Aerospace
Aktiengesellschaft, Daimler-Benz Technology Corporation (the "U.S. Seller,"
together with the German Seller, the "Sellers"), Vishay TEMIC Semiconductor
Acquisition Holdings Corp., a Delaware corporation (the "U.S. Purchaser"),
"PAMELA" Verwaltungsgesellschaft mbH (the "German Purchaser," together with the
U.S. Purchaser, the "Purchasers") and Vishay Intertechnology, Inc. ("Vishay").
The Stock Purchase Agreement, which is annexed hereto as Exhibit A, is expected
to be consummated on or about March 1, 1998 (the "Closing Date"). Under the
terms of the Stock Purchase Agreement, Vishay will acquire 80.4% of the issued
and outstanding shares of capital stock of the Company (the "Common Stock") from
the U.S. Seller and 100% of the issued and outstanding shares of capital stock
of TEMIC Semiconductor GmbH from the German Seller (the "Acquisitions").
ITEM 2. IDENTITY AND BACKGROUND.
This Statement is being filed by Vishay. Vishay is a corporation
organized under the laws of the State of Delaware and is principally engaged in
the business of manufacturing, selling and distributing discrete electronic
components. The address of its principal business and principal office is 63
Lincoln Highway, Malvern, Pennsylvania 19355.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to the terms of the Stock Purchase Agreement, Vishay will
acquire from the U.S. Seller 8,010,000 shares of Common Stock of the Company,
for cash consideration of approximately DM 394,400,000 (approximately $US
221,473,495 based on the conversion rate published in the Wall Street Journal on
December 22, 1997). It is expected that the purchase price will be funded by
borrowings under credit facilities with Vishay's lending banks led by Comerica
Bank, N.A.
Page 3 of 7 Pages
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ITEM 4. PURPOSE OF TRANSACTION.
Vishay will acquire beneficial ownership of the shares of Common Stock
of the Company to which the Statement relates for investment.
Under the terms of the Stock Purchase Agreement, Vishay may purchase
the remaining 19.6% of issued and outstanding shares of capital stock of the
Company so long as such purchase is either (i) pursuant to a tender offer made
in conformity with the Security Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder, including without limitation Regulation
14D, in which the price per share paid is not less than an amount per share in
cash equal to the purchase price per share paid by the Purchasers for the U.S.
Shares pursuant to the Stock Purchase Agreement and as a result of which the
Purchaser becomes the beneficial owner of not less than 95% of all outstanding
shares of Siliconix Common Stock, or (ii) pursuant to a merger transaction
approved by the Board in which the price per share paid is not less than an
amount per share in cash equal to the purchase price per share paid by the
Purchasers for the U.S. Shares pursuant to the Stock Purchase Agreement. Vishay
has no current intention to acquire any additional shares of the Company's
Common Stock but may reevaluate its position following the Closing Date.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of the Closing Date, Vishay will be deemed to beneficially own
approximately 8,010,000 shares of Common Stock, which represents approximately
80.4% of the shares of Common Stock of the Company currently issued and
outstanding.
(b) As of the Closing Date, Vishay will have shared dispositive power
to direct the vote of 8,010,000 shares of Common Stock and shared power to
direct the disposition of 8,010,000 shares of Common Stock.
(c) Vishay has not effected any other transactions in the shares of
Common Stock during the past 60 days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
See Item 1.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Stock Purchase Agreement
Page 4 of 7 Pages
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF VISHAY: The name, business address, present
principal occupation or employment and citizenship of each of the directors and
executive officers of Vishay, and the name of the principal business and address
of any corporation or other entity where such employment is conducted, are set
forth below:
Name and Principal Occupation
Address of Positions or Employment if
Principal with different from the
Business Vishay Citizenship positions with Vishay
-------- ------ ----------- ---------------------
Felix Zandman Chairman of the US
Board, President,
CEO and Director
Avi D. Eden Vice Chairman of US
the Board,
Executive Vice
President and
Director
Donald G. Executive Vice US
Alfson President, Chief
Business
Development
Officer and
Director
Robert A. Senior Vice US
Freece President and
Director
Richard N. Executive Vice US
Grubb President,
Treasurer, Chief
Financial Officer
and Director
Eliyahu Hurvitz Director Israel President
and CEO of
Teva Pharma
ceuticals
Industries
Ltd.
Gerald Paul Chief Operating
Officer, Executive
Vice President and
Director
Edward B. Shils Director US Consultant
Luella B. Director US Investor
Slaner
Mark I. Solomon Director US Chairman
of CMS
Companies
Jean-Claude Director Investor
Tine
Page 5 of 7 Pages
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SIGNATURE
---------
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
Statement is true, complete and correct.
Dated: December 24, 1997
VISHAY INTERTECHNOLOGY, INC.
By: /s/ Richard Grubb
---------------------------
Name: Richard Grubb
Title: Executive Vice President
Page 6 of 7 Pages
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EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE
- ------- ----------- ----
A Stock Purchase Agreement
Page 7 of 7 Pages
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EXHIBIT A
No. 161 of Registry of Deeds for 1997
Frankfurt am Main, this December 16, 1997
Before me the undersigned Notary in the District of the Court of Appeals
Frankfurt am Main
RALPH KASTNER
with the official residence in Frankfurt am Main appeared today, in the offices
of Boesebeck Droste, Darmstadter Landstra(beta)e 125, 60598 Frankfurt am Main,
where I had rendered myself at the request of the parties, with the request for
notarization of the following Stock Purchase Agreement on the
ACQUISITION
OF THE
TEMIC SEMICONDUCTOR BUSINESS
1. Mr. Christian Boucke
Place of business: Epplestr. 225
D-70567 Stuttgart
identified by valid identification card
according to his declaration acting not for himself but for
a) TEMIC TELEFUNKEN MICROELECTRONIC GMBH
Theresienstra(beta)e 2, 74072 HeilbROnn
(AG Heilbronn, HRB 2698)
(hereinafter referred to as the "GERMAN SELLER" or "TTMG")
based on the notarially certified Power of Attorney, which is
provided with a certification of authority
(Vertretungsbestatigung), the original of which was presented and
a certified copy of which is attached hereto as EXHIBIT A, the
German Seller itself acting herein, as further specified
hereinafter, for
(i) itself,
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(ii) DELENGATE LIMITED
c/o Reynolds Porter Chamberlain
Chichester House
278/282 High Holborn
London WCIV 7HA, Great Britain
(hereinafter referred to as "DELENGATE LTD.")
based on the notarially certified Power of Attorney, which
is provided with a certification of authority
(Vertretungsbestatigung), the original of which was
presented and a certified copy of which is attached hereto
as EXHIBIT B,
(iii) DAIMLER-BENZ AEROSPACE AKTIENGESELLSCHAFT
Willy-Messerschmitt-Stra(beta)e, TOR 1
85521 Ottobrunn
(hereinafter referred to as "DASA")
based on the notarially certified Power of Attorney, which
is provided with a certification of authority
(Vertretungsbestatigung), the original of which was
presented and a certified copy of which is attached hereto
as EXHIBIT C;
b) DAIMLER- BENZ TECHNOLOGY CORPORATION 375 Park Avenue, Suite 3001
New York, N.Y. 10152, U.S.A.
(hereinafter referred to as the "U.S. SELLER" or "DBTC")
based on the notarially certified Power of Attorney, which is
provided with a certification of authority
(Vertretungsbestatigung), the original of which was presented and
of which a certified copy is attached hereto as EXHIBIT D;
the U.S.-Seller and the German Seller
are hereinafter collectively referred to as the "SELLERS"
or individually as a "SELLER");
2. Dr. Harald Jung
place of business: Niedenau 68
60325 Frankfurt am Main
personally known to me
according to his declaration acting not for himself but for
a) Vishay TEMIC Semiconductor Acquisition Holdings Corp.
63 Lincoln Highway
Malvern, PA 19355, U.S.A
a Delaware corporation
(hereinafter referred to as the "U.S.PURCHASER")
based on the notarially certified Power of Attorney, which is
provided with a certification of authority
(Vertretungsbestatigung), the original of which was presented and
of which a certified copy is attached hereto as EXHIBIT E;
b) "PAMELA" Verwaltungsgesellschaft mbH
Niedenau 68
60325 Frankfurt am Main
(AG Frankfurt, HRB 44156)
(hereinafter referred to as the "GERMAN PURCHASER")
based on the notarially certified Power of Attorney, which is
provided with a certification of authority
(Vertretungsbestatigung), the original of which was presented and
of which a certified copy is attached hereto as EXHIBIT F;
the U.S.-Purchaser and the German Purchaser
are hereinafter collectively referred to as the "PURCHASERS"
or individually as a "PURCHASER");
c) Vishay Intertechnology, Inc.
63 Lincoln Highway
Malvern, PA 19355, U.S.A.
(hereinafter referred to as the "GUARANTOR")
based on the notarially certified Power of Attorney, which is
provided with a certification of authority
(Vertretungsbestatigung), the original of which was presented and
of which a certified copy is attached hereto as EXHIBIT G.
The deponents requested that this deed should be recorded in the English
language and declared that they are in sufficient command of the English
language. The Notary himself is in sufficient command of the English language.
Advised by the Notary of their rights to the assistance of a sworn interpreter
and receipt of a certified translation of this deed, the deponents waived such
rights.
<PAGE>
The deponents first declared that they approve all declarations made by Dr.
Hanns Arno Magold and by Dr. Britta Zierau in the Notarial Deed No. 160/1997 of
the acting Notary of December 15/16, 1997 (the "Reference Deed") which except
Exhibits A-G and Exhibit 21 contains all Schedules, Annexes and Exhibits
mentioned herein, and the appearing persons declared that they have full
knowledge of the contents of the Reference Deed and that they waive their rights
to have the Reference Deed read out again and attached to this deed. The
original execution copy of the Reference Deed was available for inspection
throughout the notarial negotiation and therefore the parties agreed to fully
incorporate it into the present notarial deed by way of reference pursuant to
Sect. 13 a Beurkundungsgesetz (German Notarisation Act).
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<PAGE>
The appearing parties declared:
1.
TEMIC SEMICONDUCTOR BUSINESS, CORPORATE STRUCTURE
(1) The German Seller is the sole shareholder of
TEMIC SEMICONDUCTOR GMBH
Theresienstra(beta)e 2, 74072 HeilbRONN
(AG Heilbronn, HRB 6427)
("TS GMBH")
which has a stated capital of DM 80,000,000, represented by one capital
interest in the nominal amount of DM 50,000 and one capital interest in
the nominal amount of DM 79,950,000 (collectively, the "GERMAN COMMON
STOCK"); TS GmbH was established by the German Seller by notarial deed of
August 14, 1997 (No. 475 of Registry of Deeds of Notary Gunther Hausler,
Heilbronn) and was registered in the Commercial Register at the Municipal
Court Heilbronn on September 18, 1997. The German Seller's assets and
liabilities pertaining to its semiconductor business were transferred to
TS GmbH, effective as of October 1, 1997, by way of a drop down
(Ausgliederung) pursuant to ss. 123 (3) No. 1 of the German
Transformation Act (Umwandlungsgesetz), by virtue of the notarial deed of
November 12, 1997 (No. 686/97 of Registry of Deeds of Notary Gunther
Hausler, Heilbronn); the notarial deed with its Annexes is fully known to
the Purchaser. The drop down was notified to the Commercial Register at
the Municipal Court Heilbronn on November 12, 1997.
(2) TS GmbH, directly or indirectly, owns the shares, capital interests and
other equity participations as set forth on Schedule 1.2, subject to the
qualifications contained therein. TS GmbH and its Subsidiaries (as
defined hereinafter) are hereinafter collectively referred to as the
"GERMAN GROUP".
<PAGE>
(3) The U.S. Seller is the majority shareholder in
SILICONIX INCORPORATED, a Delaware corporation
2201 Laurelwood Road
Santa Clara, CA 95056-0951, U.S.A.
("SILICONIX INC.")
which has a share capital of USD 99,596.80, divided into 9,959,680
outstanding shares of common stock of USD 0.01 each, with 8,010,000
shares of common stock (= approximately 80.4 %) being owned by the U.S.
Seller; the shares of Siliconix Inc. are listed and traded on the
National Association of Securities Dealers Automated Quotation System
(NASDAQ) National Market System under the symbol "SILI".
(4) Siliconix Inc., directly or indirectly, owns the shares, capital
interests or other equity participations as set forth on Schedule 1.2.
Siliconix Inc. and its Subsidiaries (as defined hereinafter) are
hereinafter collectively referred to as the "U.S. GROUP".
(5) Siliconix Inc. and TS GmbH (hereinafter collectively referred to as the
"TARGET COMPANIES") do not own, directly or indirectly, or have voting
rights with respect to, or have agreements to acquire (except as set
forth on Schedule 6a.2) any capital stock or other equity securities of
any corporate entity or have direct or indirect equity or ownership
interests in any business, except for the companies listed on Schedule
1.2 which companies, if directly or indirectly controlled (as defined in
ss. 16 German Stock Corporation Act - Aktiengesetz) by either of the
Target Companies, are hereinafter collectively referred to as the
"SUBSIDIARIES" or individually as a "SUBSIDIARY".
<PAGE>
(6) The German Common Stock is owned by the German Seller. The German Common
Stock was duly and validly issued and has been fully paid or, to the
extent the capital interest was issued in consideration of a contribution
in kind, such contribution has been validly made and the capital interest
has not been wholly or partially repaid to the holder thereof and is
non-assessable (keine Nachschu(beta)pflicht). There are no outstanding
options, warrants, calls, rights or other agreements or commitments of
any character to acquire or dispose of any of the German Common Stock or
any outstanding securities convertible into any capital interests of TS
GmbH. There are no voting agreements or understandings that require or
permit any of the German Common Stock to be voted by anyone other than
the owner thereof. There are no outstanding obligations of TS GmbH to
repurchase, redeem or otherwise acquire any of its outstanding capital
interests. The German Seller has good title to the German Common Stock,
free and clear of any lien and any other charge, claim, encumbrance,
limitation or restriction (including any restriction on the right to
vote, sell or otherwise dispose of such capital interest/stock)
("ENCUMBRANCES"), except for those created by the Purchaser and except
for limitations or restrictions set forth in the articles of TS GmbH or
imposed by applicable laws or regulations.
(7) The authorized capital stock of Siliconix Inc. consists of 10,000,000
shares of common stock, par value USD 0.01 per share (the "SILICONIX
COMMON STOCK").of which 9,959,680 shares are issued and outstanding and
8,010,000 shares of such issued and outstanding shares (approximately
80.4%) are owned beneficially and of record by the U.S. Seller (the "U.S.
Shares"). All the U.S. Shares are duly and validly issued, fully paid and
non-assessable and free of preemptive rights. Except as set forth above
or as otherwise contemplated by this Agreement, there are no shares of
capital stock of Siliconix Inc. issued or outstanding, or any outstanding
subscriptions, options, warrants, calls, rights, convertible securities
or other agreements or commitments of any character obligating Siliconix
Inc. or the U.S. Seller, respectively, to issue, transfer or sell any of
the U.S. Shares or to make any payments in respect of any of the U.S.
Shares. Except as set forth on Schedule 1.2, there are no voting trust or
other agreements or understandings to which the U.S. Seller is a party or
is bound with respect to the voting of the U.S. Shares. There are no
outstanding obligations of Siliconix Inc. to repurchase, redeem or
otherwise acquire any of the Siliconix Common Stock. The U.S. Seller has
good title to the U.S. Shares, free and clear of any Encumbrances, except
for (i) those created by the Purchaser or (ii) restrictions imposed by
applicable law or regulations other than tax liens or restrictions
imposed by the U.S. Uniform Commercial Code or similar laws in other
jurisdictions.
<PAGE>
(8) Except as disclosed on Schedule 1.2, all of the outstanding shares of the
capital stock of, or other ownership interests in, each of the Target
Companies' Subsidiaries, have been duly and validly issued, are (in the
case of shares of capital stock) fully paid and non-assessable, have not
(in the case of capital interests in a limited liability company
organized under the laws of the Federal Republic of Germany) been wholly
or partially repaid or been issued in consideration of contributions in
kind which were not validly made, are (in the case of partnership
interests) not subject to current or future capital calls, and are owned
by one of the Target Companies, directly or indirectly, free and clear of
any Encumbrances except for those created by the Purchaser and except for
limitations or restrictions set forth in the partnership agreement, the
articles or the bylaws of such Subsidiary or imposed by applicable laws
or regulations other than tax liens or restrictions imposed by the U.S.
Uniform Commercial Code or similar laws in other jurisdictions. Except as
set forth on Schedule 1.2 or as otherwise contemplated by this Agreement,
there are no outstanding subscriptions, options, warrants, calls, rights,
convertible securities or other agreements or commitments of any
character relating to the issued or unissued capital stock or other
securities of any Subsidiary which is directly or indirectly wholly owned
by a Target Company, obligating any such Subsidiary to issue, transfer or
sell any such securities or to make any payments in respect of any such
Subsidiary's securities or its equity.
(9) The Target Companies and the Subsidiaries are engaged in the business of
designing, marketing and manufacturing discrete devices and integrated
circuits and in the business of designing, marketing and manufacturing
power and analog semiconductor products, which businesses comprise
substantially the same assets, liabilities and operations as the assets,
liabilities and operations of the "TEMIC Semiconductor" business as it
was previously conducted and offered to the Purchasers and which formed
the basis of the Pro Forma Balance Sheet (as defined hereinafter) and
will be further reflected in the Final Balance Sheet (collectively
referred to hereinafter as the "BUSINESS").
<PAGE>
(10) The transfers pursuant to Sections 2 and 3 are made with commercial
effect as of the end of the calendar day (24:00 hrs. local time at the
principal place of business of the respective Target Company) on which
the Effective Time (as hereinafter defined) falls (the time of such
transfer is hereinafter referred to as the "TRANSFER DATE").
2.
SALE AND TRANSFER OF THE GERMAN COMMON STOCK
(1) The German Seller hereby sells to the German Purchaser, and hereby
transfers to the German Purchaser, effective as of the Transfer Date, the
German Common Stock with all rights and obligations pertaining thereto
for the past and for the future, and with the right to receive the
dividends resulting from (i) the profits realized in the time from the
Transfer Date on and (ii) profits of TS GmbH (such as retained earnings)
shown in the Final Balance Sheet (as defined hereinafter).
(2) The transfer is subject to the condition precedent that the Preliminary
Purchase Price including interest thereon, if any, for all transfers
contemplated by this Agreement be paid in full (Section 9 (1)).
(3) The German Purchaser hereby accepts such sale and transfer.
(4) The notice to TS GmbH of the share transfer pursuant to ss. 16 (1) of the
German Limited Liability Company Act will be given jointly by the German
Seller and the German Purchaser immediately after the Effective Time.
<PAGE>
3.
SALE OF THE U.S. SHARES
(1) The U.S. Seller hereby sells to the U.S. Purchaser the U.S. Shares.
(2) The U.S. Seller agrees to transfer and deliver to the U.S. Purchaser the
U.S. Shares at the Closing (as hereinafter defined) and the Purchaser
agrees to accept the transfer and delivery of such U.S. Shares at that
time.
(3) The transfer shall be effective as of the Transfer Date; prior thereto
the U.S. Purchaser shall not be entitled to exercise any rights arising
out of or in connection with the U.S. Shares.
4.
CLOSING
(1) Pursuant to the terms of this Agreement, the closing of the transactions
contemplated by this Agreement shall take place simultaneously in
Frankfurt am Main in the law offices of Boesebeck Droste, Darmstadter
Landstra(beta)e 125, at 2 p.m. local time and in New York, New York in
the law offices of Skadden, Arps, Meagher & Flom LLP, 919 Third Avenue,
at 8 a.m. local time, (the "CLOSING"), on the date specified in subcl.
(2) below, following the later of the following events to occur:
a) Issuance of all required antitrust or merger control approvals or
expiration or termination of all waiting periods relating thereto,
including any extensions thereof, that are applicable to the
transfers contemplated in this Agreement under
(i) Title II of the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (hereinafter the "HSR ACT") and the
rules and regulations thereunder,
<PAGE>
(ii) the German Antitrust Act (Gesetz gegen
Wettbewerbs-beschrankungen), as amended (hereinafter the
"GERMAN GWB"), and
b) issuance of approval under ss. 3 of the German Currency Act
(Wahrungsgesetz), the application therefor to be filed by the
Purchaser pursuant to Section 19 (1);
c) issuance of approval by the Supervisory Board of Daimler Benz AG;
d) complete satisfaction of all conditions to Closing set forth in
Section 5 of this Agreement or waiver of the satisfaction of such
conditions.
(2) The Closing pursuant to subcl. (1) above shall take place on such of the
dates set forth below which immediately follows the fifth "BUSINESS DAY"
(a day on which commercial banks in Frankfurt, Germany, and New York, New
York, are open for business) from the date when the last of the events
set forth in subcl. (1) has occurred:
February 21, 1998, or
March 28, 1998, or
April 25, 1998, or
May 23, 1998, or
June 27, 1998, or
such other later date which is a date of internal financial reporting
within the Business.
a) By mutual agreement of the parties hereto, the Closing may take
place at another place or at another time.
b) The date and time at which the Closing actually takes place and
thus the time at which the transfers contemplated by this
Agreement actually occur or become effective shall be referred to
as the "EFFECTIVE TIME" in this Agreement.
<PAGE>
(3) At the Closing, the U.S. Seller shall deliver the following to the U.S.
Purchaser:
a) the stock certificates for the U.S. Shares, along with stock
powers, duly endorsed in blank or together with duly issued
transfer certificates;
b) the resignations as of the Effective Time of the members of the
Board of Directors of Siliconix Inc. and of its Subsidiaries
identified on SCHEDULE 4.3B;
c) a certified copy of the certificate of incorporation of and a
good standing certificate for Siliconix Inc., and all other
documents (including incumbency certificates) required to be
delivered by the U.S. Seller to the U.S. Purchaser at or before
the Closing under the provisions of this Agreement (to the
extent not previously delivered) or as may otherwise be required
in connection herewith.
Effective as of the Effective Time, the Sellers will cause up to three
nominees selected by the U.S. Purchaser to fill the vacancies created by
the resignations of the members of the Board of Directors of Siliconix
Inc. identified on Schedule 4.3b.
(4) At the Closing, the German Seller shall deliver the following to the
German Purchaser:
The resignations as of the Effective Time of the members of the Board of
Directors of TS GmbH and its Subsidiaries identified on SCHEDULE 4.4.
(5) At the Closing, the Purchasers shall
<PAGE>
a) have put TS GmbH and Siliconix Inc. into the financial position
to settle a negative balance on the intercompany accounts ("IC
ACCOUNTS") with Daimler Benz AG or the affiliate of Daimler Benz
AG concerned herewith (hereinafter collectively referred to as
"DAIMLER BENZ"), and deliver to the Sellers (on behalf of
Daimler Benz) the irrevocable payment announcements by TS GmbH's
bank and by Siliconix Inc.'s bank, pursuant to Section 17 (4),
unless the procedure described in subcl. c) applies;
b) deliver to the Sellers the Assignment and Assumption Agreements
pursuant to Section 17 (2), validly executed by all parties
thereto, except Daimler Benz, or, to the extent that is
impossible, deliver bank guarantees and other collateral
pursuant to Section 17 (3) and
c) pay to the Sellers the Preliminary Purchase Price and the amount
of the DB-Indebtedness (as defined in Section 9 (7)) and deliver
to the Sellers all other documents (including incumbency
certificates), required to be delivered by the Purchasers to the
Sellers at or prior to the Closing under the provisions of this
Agreement (to the extent not previously delivered) or as may
otherwise be required in connection therewith.
(6) The Closing shall be recorded in a Closing Memorandum.
5.
CONDITIONS TO CLOSING
(1) The obligations of the Sellers and the Purchasers to consummate the
transactions and actions contemplated by Section 4 of this Agreement are
subject to the satisfaction of the following conditions, at or prior to
Closing, or to the extent permissible, the waiver by all parties to this
Agreement of the fulfilment of these conditions:
a) None of the Sellers, the Purchasers or the Target Companies
shall be subject to any order, decree or injunction issued by
any court of competent jurisdiction which prevents or delays any
of the transactions contemplated by this Agreement, and no
action, suit or proceeding before any court or any governmental
or regulatory authority shall be pending against any of the
Sellers, the Purchasers or Siliconix Inc. challenging the
validity or legality of the transactions contemplated by this
Agreement.
b) To the extent required by applicable law in connection with the
transactions contemplated by this Agreement, each of the Sellers
and the Purchasers and any other persons (as defined in the HSR
Act) who may have an obligation in this context
(i) shall have filed a Notification and Report Form for
Certain Mergers and Acquisitions under the HSR Act with
the Antitrust Division of the United States Department
of Justice (hereinafter the "DEPARTMENT OF JUSTICE") and
with the United States Federal Trade Commission
(hereinafter the "FTC");
(ii) shall have filed a notification of the planned merger
with the German Federal Cartel Office
(Bundeskartellamt); and
(iii) shall have filed a notification on Form K2 of the
transactions contemplated hereunder with the Swedish
Competition Authority,
and any antitrust or merger control approvals required to be
obtained from these administrative authorities shall have been
obtained, and all applicable waiting periods for each of those
procedures (including any possible extensions) shall have
expired or terminated or shall have been waived or terminated by
the relevant administrative authority.
(2) The obligations of the Sellers to consummate the legal transactions and
actions contemplated by this Agreement are further subject to the
satisfaction of the following conditions at or prior to the Effective
Time, or, to the extent permissible, the waiver by the Sellers of the
satisfaction of these conditions:
<PAGE>
The Purchasers shall have complied in all material respects with all
obligations contained in this Agreement to be complied with by them at
or prior to the Effective Time.
(3) The Purchaser's obligation to consummate the legal transactions and
actions contemplated by Section 4 of this Agreement is subject to the
satisfaction of the following conditions at or prior to the Effective
Time, or, to the extent permissible, the waiver by the Purchaser of the
satisfaction of these conditions:
a) The Sellers shall have complied in all material respects with
all obligations contained in this Agreement to be complied with
by them at or prior to the Effective Time.
b) The Purchasers shall have received certificates, dated the day
of the Closing, executed as set forth below, identifying any
material matters or events which occurred between the date of
this Agreement and the Effective Time and which, to the
knowledge (as further described in Section 14 (11)) of the
issuer of such certificate, would make any of the
representations or warranties contained herein untrue or
incorrect in a more than insignificant respect if such
representation or warranty were made as of the Effective Time.
Such Certificates shall be issued
- by Mr. Maier and Dr. Muhlbayer in respect of TS GmbH and
its Subsidiaries;
- by Mr. Apprich for MHS and its subsidiaries;
- by Mr. Pudelko for Dialogue Ltd. and its subsidiaries;
- by Mr. Biehn for Siliconix Inc. and its Subsidiaries;
- by Mr. Facundo for TSP Inc.
6.
CHANGE OF CONTROL AGREEMENTS
(1) Some of the contracts and agreements of the Target Companies and the
Subsidiaries contain clauses that give rise to a right of termination,
cancellation or acceleration in the event that the direct or indirect
control of the relevant Target Company or Subsidiary should change.
Except for loan agreements and other financing arrangements, to the
knowledge of the Sellers, all material change of control agreements of
the Target Companies and the Subsidiaries, including but not limited to
agreements with licensors and with customers and clients, are listed on
SCHEDULE 6.1 (together with any such agreements not listed on Schedule
6.1, the "Change of Control Agreements").
(2) Except as otherwise provided in this Section 6, the Sellers do not
warrant, and any warranty is expressly excluded, that the respective
other party or parties to the Change of Control Agreements will not
assert a termination right, renegotiation right or similar right as a
result of the execution and performance of this Agreement; this
limitation of warranty also applies to any statutory termination or
similar rights in the event of a change of control.
(3) Notwithstanding subcl. (2) above, the Sellers shall use their best
endeavours, prior to and after the Closing, to assist the Purchasers in
their efforts to afford the Purchasers the benefits of the continuation
of the Change of Control Agreements from and after the Effective Time,
despite the sale and transfer of the German Common Stock and the U.S.
Shares to the German Purchaser and the U.S. Purchaser, respectively.
(4) The Sellers and the Purchasers agree that TS GmbH will exercise its call
option, to be exercised on or before December 31, 1997, to acquire from
SOGEMAT Participation S.A. the remaining outstanding shares of MATRA MHS
S.A., France ("MHS") which TS GmbH does not already own, so that TS GmbH
will be the sole shareholder in MHS. The Purchasers are aware that, as a
result, MHS and its relevant subsidiaries will be obligated to change
their respective firm names so as to delete the name "MATRA" therefrom
and to cease using the term, logo and mark "MATRA" in any and all
respects.
<PAGE>
(5) The Purchasers are further aware that a sale and transfer of the German
Common Stock as contemplated hereby may give rise to an obligation of MHS
to repay to the French Government (Ministry of Industry) up to approx. FF
417,000,000 in grants and subsidies previously received by MHS and its
subsidiaries (the "SUBSIDY").
a) The Sellers and the Purchasers think that they may be able to
persuade the French Government not to exercise or to waive its
claim, if any, for repayment, in part or in full, of the
Subsidy, provided that the Purchasers and/or MHS give certain
assurances to the French Government that they plan to maintain
the location Nantes as the place of business of MHS and maintain
a certain level of employment at that location. Purchasers agree
that such assurances will be given by MHS and/or its direct or
indirect shareholders if and to the extent commercially
reasonable. Any such assurances, if given by a Target Company or
a Subsidiary prior to or after the Transfer Date, shall not be
reflected on, or if required to be reflected on a corporate
balance sheet, deemed to be eliminated from, the Final Balance
Sheet.
b) If and to the extent, as a result of the best efforts of
Purchasers, including giving the assurances pursuant to subcl.
a) above, the French Government agrees not to demand repayment
of the Subsidy or actually abstains from demanding repayment,
the Sellers shall have no liability with respect thereto.
However, if the French Government demands repayment of the
Subsidy, in full or in part, after it has already agreed, as a
result of joint efforts of the Sellers and the Purchasers and
the assurances, not to demand repayment, or initially actually
abstained from demanding repayment when due, this applies as
well unless the Purchasers can show that the change in the
position initially taken by the French Government is not the
direct or indirect result of actions or omissions of either of
the Purchasers, the Guarantor, any assignee of either of the
Purchasers, or any of the Target Companies or Subsidiaries.
c) If and to the extent that, despite the joint best efforts of
Purchasers and Sellers and any assurances given pursuant to
subcl. a) above, the French Government has not agreed to refrain
from claiming repayment of the Subsidy in full or in part, and
has not abstained from claiming such repayment, the Sellers and
the Purchasers shall agree on sharing the costs to the
Purchasers of such actual repayment to the French Government. In
establishing the amount of costs to be shared between the
Sellers and the Purchasers, starting from the amount or amounts
of actual repayment, the principles set forth or referred to in
Section 14 (5) (including tax effects) shall be applied. The
agreed amount of costs shall be borne 80 % by the Sellers and 20
% by the Purchasers.
6A.
PHILIPPINES COMPANY
(1) The German Seller is the owner of all of the issued and outstanding
capital stock of TEMIC TELEFUNKEN microelectronic Philippines Inc.,
Manila ("PHILIPPINES OLD INC."). The business of Philippines old Inc.
includes, inter alia, semiconductor activities which are part of the
Business and which are included in the Pro Forma Balance Sheet (as
defined below) and will be included in the Transfer Balance Sheet (as
defined below).
(2) As described in more detail on Schedule 6A.2, the semiconductor business
of Philippines old Inc. is presently being transferred (drop down) to a
newly established wholly owned subsidiary of Philippines old Inc. ("TSP
INC."). It is contemplated that Philippines old Inc. will sell all
shares in TSP Inc. (the "TSP SHARES") to TS GmbH, with commercial effect
as of the Transfer Date, for a purchase price of DM 15 million, pursuant
to a share transfer agreement which will provide for a closing of such
sale no sooner than two Business Days after the Effective Time and no
later than four Business Days after the drop down has been registered in
the applicable public register. The shares of Philippines old Inc.
remain with the German Seller.
<PAGE>
(3) The Sellers and the Purchasers hereby agree that Philippines old Inc.
shall sell and transfer the TSP Shares to TS GmbH as described in subcl.
(2) above and that TSP Inc. shall be deemed to be a "Subsidiary" for all
purposes of this Agreement, including, but not limited to, the
preparation of the Transfer Balance Sheet, as if TSP Inc. were a wholly
owned subsidiary of the German Target Company as of the date of this
Agreement.
6B.
DIALOGUE
(1) The following summary is for information purposes only and shall not be
deemed a representation or warranty:
a) Daimler Benz Aerospace Aktiengesellschaft ("DASA"), formerly
known as Messerschmitt-Bolkow-Blohm AG - "MBB" -, and thereafter
as Deutsche Aerospace Aktiengesellschaft, a subsidiary of
Daimler Benz AG, through its nominee, Delengate Ltd., is a
member of Dialogue Semiconductors Limited ("DIALOGUE LTD.") with
1,088,255 shares (approx. 92.63% of 1,174,817 shares issued and
outstanding) (the "DASA SHARES"). The remaining 86,562 shares in
Dialogue Ltd. are held by Ericsson Radio Systems AB
("ERICSSON"). Dialogue Ltd. is the sole shareholder of Dialog
Semiconductor GmbH which in turn is the sole shareholder of
Dialog Semiconductor Ltd. (see Schedule 1.2 for further
details). DASA and the German Seller, which are under common
control of Daimler Benz AG, have treated the DASA Shares as if
the German Seller were the beneficial owner thereof. The
business of Dialogue Ltd. and its direct and indirect
subsidiaries is part of the Business and has been included in
the Pro Forma Balance Sheet.
<PAGE>
b) The Articles of Association of Dialogue Ltd., the Shareholders'
Agreement in respect of Dialogue Ltd. and the Share Sale
Agreement among Delengate Ltd., MBB and Ericsson dated 8th
October 1990 contain various put and call options and
restrictions on the sale and transfer of the shares of Dialogue
Ltd.. Pursuant to Article 7 of the Articles of Association,
Delengate Ltd. and DASA are not entitled to transfer the DASA
Shares in Dialogue Ltd. without first offering them to the other
shareholders at a specified price (the "OFFER"). The other
shareholders have thirty days within which to accept such offer
(the "ACCEPTANCE PERIOD"); the Offer can be accepted only in its
entirety (and not only in respect of a portion of the offered
shares). If the Offer is not accepted by the other shareholders
within the Acceptance Period, DASA/Delengate Ltd. may, within a
period of ninety days after the expiration of the Acceptance
Period, transfer the DASA Shares to any purchaser at a price
which may not be less than the price specified in the Offer.
Further details are set forth in the Articles of Association of
Dialogue Ltd. Previous contacts between the German Seller/DASA
and Ericsson with respect to reaching an understanding and
agreement regarding their respective shareholder positions have
not been successful. Consequently, Delengate Ltd./DASA must
first offer the DASA Shares to the other shareholders, unless
prior thereto, the Sellers (on behalf of DASA) and the
Purchasers can jointly persuade Ericsson to enter into an
agreement as described below.
(2) Therefore, the Sellers, Delengate Ltd. and DASA on the one side and the
Purchasers on the other side, agree as follows:
a) Immediately following the date of this Agreement, the German
Seller (on behalf of DASA) and the Purchasers will jointly
contact Ericsson in order to persuade Ericsson to:
<PAGE>
(i) waive the Offer requirement and abstain from exercising
put options and all other similar rights Ericsson may
have in respect of shares in Dialogue Ltd. until after
the later of (x) the Closing and (y) the closing
pursuant to subcl. b) bb), in which case Ericsson will
remain a shareholder in Dialogue Ltd. and DASA will
transfer the DASA Shares to TS GmbH, as further set
forth in subcls. b) bb), cc), d) below, or
(ii) purchase the DASA Shares from DASA at a purchase price
to be approved by the Purchasers, in which case the DASA
Shares shall not be sold by DASA to TS, with the
consequences set forth in subcl. c) below, or
(iii) sell its shares in Dialogue Ltd. to TS GmbH and waive
the Offer requirement and abstain from exercising any
put options and all other similar rights Ericsson may
have in respect of the shares in Dialogue Ltd. until
after the later of (x) the Closing and (y) the closing
pursuant to subcl. b) bb), in which case DASA will
transfer the DASA Shares to TS GmbH as further set forth
in subcls. b) bb), cc), d) below. It is understood that
the sale by Ericsson of its shares in Dialogue Ltd.
directly to TS GmbH shall not affect the terms and
conditions of this Agreement and shall be deemed a
transaction independent from the transactions
contemplated by this Agreement. If Ericsson agrees to
sell shares in Dialogue Ltd. to TS GmbH, any effect of
such sale on the Transfer Balance Sheet shall, for
purposes of this Agreement, be eliminated from the
Transfer Balance Sheet or not be included therein for
purposes of preparing the Final Balance Sheet and
determining the Final Purchase Price.
b) Contemporaneously with contacting Ericsson pursuant to subcl. a)
above, the following shall occur:
<PAGE>
H aa) Promptly after January 25, 1998, DASA/Delengate Ltd. will
offer the sale of the DASA Shares to Ericsson at a purchase
price in an amount to be notified by the Purchasers to the
Sellers no later than January 22, 1998, absent such timely
notification in the amount of DM 20 million (the "Offer
Price"), pursuant to and as required by Article 7 of the
Articles of Association of Dialogue Ltd. and other
applicable requirements.
bb) Promptly after January 29, 1998, DASA/Delengate Ltd.
will enter into an agreement with TS GmbH for the sale
and transfer of the DASA Shares to TS GmbH, with
commercial effect as of the Transfer Date, at a price
being DM 0,5 million higher than the Offer Price which
sale and transfer shall be conditioned upon Ericsson not
accepting the offer made to it pursuant to subcl. aa)
above. This condition shall not be contained in a sale
and transfer agreement of the DASA Shares pursuant to
subcl. a) (i) above. The closing of the sale of the DASA
Shares to TS GmbH shall take place as soon as possible
after it has become certain that the DASA Shares may be
transferred to TS GmbH.
cc) The German Seller hereby waives any beneficial rights
and interest it may have in the DASA Shares, with effect
as of the Transfer Date, provided that (i) Ericsson does
not accept the offer made to it pursuant to subcl. aa),
and (ii) the DASA Shares are sold and transferred to TS
GmbH.
c) If the offer pursuant to subcl. b) aa) above is accepted by
Ericsson or the DASA Shares are sold by DASA/Delengate to
Ericsson, the following shall apply:
<PAGE>
aa) The Sellers and the Purchasers agree that the aggregate
purchase price allocable to Dialogue Ltd. and its direct
and indirect subsidiaries, for purposes of determining
the Preliminary Purchase Price and the Final Purchase
Price, shall be as set forth in subcl. b) bb) above or,
as agreed between DASA and Ericsson pursuant to subcl.
a) (ii) respectively (the "DIALOGUE PURCHASE PRICE"). If
the DASA Shares are not sold and transferred to TS GmbH
as contemplated above, the Final Purchase Price and, if
possible, already the Preliminary Purchase Price due to
the German Seller shall be reduced by the amount of the
Dialogue Purchase Price.
bb) The representations and warranties and all other
provisions contained in this Agreement shall not apply
to Dialogue Ltd. and its direct and indirect
subsidiaries.
d) If the Dasa Shares are sold and transferred to TS GmbH pursuant
to subcl. b) aa) or subcl. a) (i) above, the following shall
apply:
aa) For all purposes of this Agreement the DASA Shares and
the business of Dialogue Ltd. and its direct and
indirect subsidiaries shall be included in this
Agreement for all purposes, including, but not limited
to, the preparation of the Transfer Balance Sheet, as if
Dialogue Ltd. had been a wholly owned direct subsidiary
of TS GmbH already on the date of this Agreement.
bb) The Preliminary Purchase Price and the Final Purchase
Price contain the amount of the Dialogue Purchase Price
pursuant to subcl. b) bb) above. It is hereby agreed
between the Sellers and DASA on the one side and the
Purchasers on the other side that any payment obligation
of TS GmbH resulting from the sale and transfer to it of
the DASA Shares shall be deemed satisfied by payment of
the Purchasers of the Final Purchase Price hereunder.
Upon payment of the Final Purchase Price by the
Purchasers, the German Seller shall hold TS GmbH
harmless from any claim by DASA for the Dialogue
Purchase Price. The internal handling and settling
between the German Seller and DASA is a matter between
them and will be handled between them outside this
Agreement; the same shall apply to the relationship
between the Purchasers and TS GmbH.
<PAGE>
7.
PURCHASE PRICE
(1) Based on subcl. (2) below, the preliminary purchase price
- for the German Common Stock isDM 184,900,000 (= 31.92%);
- for the U.S. Shares is DM 394,400,000 (= 68.08 %)
(collectively, the "PRELIMINARY PURCHASE PRICE") which has been computed as
follows:
<PAGE>
Preliminary Purchase Price: DM 579,300,000
+ (plus) Net Financial Indebtedness:
(as defined in subcl. (4) below) DM 298,700,000
---------------
resulting in a base price for the
debt free Business of DM 878,000,000
===============
(in writing: Deutsche Mark eight hundred seventy eight million).
The amount of the Preliminary Purchase Price shall be subject to the
adjustments provided for in this Agreement in order to arrive at the
Final Purchase Price.
(2) The Preliminary Purchase Price has been agreed on the basis of the pro
forma balance sheet of the Business as of January 1, 1997, a copy of
which is attached hereto as EXHIBIT 7.2 (the "PRO FORMA BALANCE SHEET").
Decisive for the final purchase price payable by the Purchaser to the
Sellers shall be a consolidated balance sheet (special consolidation
report) for the Business to be prepared as of the Transfer Date pursuant
to the provisions of Section 8 below (the "FINAL BALANCE SHEET"). If the
Final Balance Sheet were identical with the Pro Forma Balance Sheet, the
Final Purchase Price would be equal to the Preliminary Purchase Price.
(3) In order to reflect changes from the Pro Forma Balance Sheet to the
Final Balance Sheet and to arrive at the Final Purchase Price (as
defined in subcl. (8) of this Section 7), the following adjustments
shall be made to the amount of the Preliminary Purchase Price:
The amount of the Preliminary Purchase Price
a) shall be reduced/increased by any reduction/increase in fixed
assets;
b) shall be reduced/increased by any reduction/increase in net
working capital;
<PAGE>
c) shall be reduced/increased by any increase/reduction in
provisions;
d) shall be reduced/increased by any increase/reduction in net
financial indebtedness;
provided, however, that in no event shall the Final Purchase Price be
more than 115 % of the Preliminary Purchase Price.
(4) For purposes of subcls. (1) and (3), the following definitions shall
apply:
a) Fixed Assets:
+ Investments and Long-term Receivables 25.9
+ Property Plant and Equipment 499.7
+ Intangible Assets 38.0
-----
Total: 563.6
b) Net Working Capital:
+ Accounts Receivable Trade 265.5
+ Total Inventories 240.0
+ Current Deferred Income Taxes
incl. Tax Receivables 17.1
+ Other Current Assets short-term 59.4
+ Other Current Assets long-term 4.5
+ Deferred Income Taxes incl. Tax Receivables 12.9
- Accounts and Notes Payable Trade (124.7)
- Other Current Liabilities (93.6)
-----
Total: 381.1
c) Provisions:
+ Pension Liabilities 93.5
+ Other Provisions 107.0
+ Provisions for Income Taxes 10.0
-----
Total: 210.5
d) Net Financial Indebtedness:
+ Financial Liabilities to Banks 197.1
+ Financial Liabilities to Daimler Benz AG 163.8
+ Other Financial Liabilities 6.4
- Cash and Cash Equivalents (68.6)
- Marketable Securities (0,0)
- Financing Receivables (0,0)
-----
Total: 298.7
<PAGE>
all as are shown in the Pro Forma Balance Sheet and as will be shown in
the Final Balance Sheet. In preparing the Final Balance Sheet, the
foregoing terms shall have the same meaning and be employed the same way
as they were defined and employed in preparing the Pro Forma Balance
Sheet (as set forth in Section 8 (1), below). The numbers shown in this
subcl. (4) are in millions of DM and are for purposes of reference to
the positions contained in the Pro Forma Balance Sheet.
(5) The Final Purchase Price shall be apportioned between the German Common
Stock and the U.S. Shares based on the same percentages as set forth in
subcl. (1) above in respect of the Preliminary Purchase Price.
(6) Payment of the Preliminary Purchase Price and of any additional payment
or repayment, as the case may be, of the difference between the
Preliminary Purchase Price and the Final Purchase Price shall be made in
U.S. dollars as provided in Section 9 (6) below.
(7) The Final Purchase Price shall bear interest at the rate of 4.5 % p.a.
from and including the Transfer Date to and including the date(s) of
payment, if different. (8) The final purchase price payable by
Purchasers to Sellers shall be the amount resulting from the
reductions/increases pursuant to subcl. (3) above and the adjustment, if
any, pursuant to subcl. (9), below (the "FINAL PURCHASE PRICE").
(9) If the Transfer Date is February 21, 1998, the purchase price resulting
from the reductions/increases pursuant to subcl. (3) above shall be
increased by the Adjustment Amount.
a) The Adjustment Amount shall be the difference between (i) the
amount of the 1997 Reference Purchase Price and (ii) the final
purchase price based on the Final Balance Sheet (as of February
21, 1998) prior to the adjustment pursuant to this subcl. (9),
if the 1997 Reference Purchase Price is the higher amount. In no
event, however, shall the Adjustment Amount exceed DM 14
million.
<PAGE>
b) The 1997 Reference Purchase Price is the amount which would be
the final purchase price if the Final Balance Sheet were
prepared as of December 31, 1997. Therefore, the Sellers and the
Purchasers agree that a final balance sheet as of December 31,
1997 will be prepared and examined and provided with the special
consolidation report according to the same terms and conditions
set forth in this agreement in respect of the Final Balance
Sheet; the provisions of Section 8 shall apply mutatis mutandis.
The Sellers and the Purchasers may mutually waive the
requirement of a special consolidation report by way of agreeing
in writing on the amount of the1997 Reference Purchase Price.
8.
PRO FORMA BALANCE SHEET, TRANSFER BALANCE SHEET,
FINAL BALANCE SHEET
(1) The Pro Forma Balance Sheet comprises the Business as of January 1,
1997. Details on its preparation are set forth on Schedule 8.1.
(2) The Sellers and the Purchasers agree that for purposes of determining
the Final Purchase Price a transfer balance sheet shall be prepared as
follows:
a) Prior to preparing the consolidated balance sheet pursuant to
subcl. b) individual balance sheets as of the Transfer Date for
each of the Target Companies and the Subsidiaries shall be
prepared by the Target Companies and the Subsidiaries and
audited by their respective current auditors, all in accordance
with the rules and principles set forth in Schedule 8.1 (the
"INDIVIDUAL TRANSFER BALANCE SHEETS"). The Individual Transfer
Balance Sheets shall be available no later than the date which
is four weeks after the Transfer Date,
<PAGE>
b) a consolidated balance sheet for the Target Companies and the
Subsidiaries as of the Transfer Date shall be prepared as soon
as possible thereafter as a special consolidation report,
according to the rules and principles set forth on Schedule 8.1,
and
c) the consolidated balance sheet shall be examined and provided
with an unrestricted confirmation remark as to its compliance
with the applicable accounting rules and principles set forth on
Schedule 8.1, by TS GmbH's auditor, KPMG Deutsche
Treuhandgesellschaft mbH, Frankfurt/ Berlin ("TS GMBH'S
AUDITORS"), and
d) the special consolidation report with the confirmation by TS
GmbH's Auditors pursuant to subcl. b) above ("TRANSFER BALANCE
SHEET") shall be presented to the Purchasers and the Sellers, as
promptly as reasonably practicable following the Transfer Date.
It is expected that the Transfer Balance Sheet together with the
Individual Transfer Balance Sheets will be presented to the
Sellers and the Purchasers simultaneously and no later than the
date which is three months after the Transfer Date.
e) Since the preparation and confirmation of the Transfer Balance
Sheet will not have been completed by the date of the Effective
Time, the Purchasers shall, and shall cause the Target Companies
and the Subsidiaries, to cooperate fully with the Sellers and
Sellers' Auditors (as defined below) in the preparation of the
Transfer Balance Sheet, such cooperation to include, without
limiting the generality of the foregoing, full access to the
books and records of the Target Companies and the Subsidiaries
for such purpose. This shall also apply to work to be performed
by Sellers' Auditors in connection with subcl. (3) and subcl.
(4).
<PAGE>
(3) Upon receipt of the Transfer Balance Sheet, the Purchasers and their
independent certified public accountants, Ernst & Young LLP (the
"PURCHASERS' AUDITORS"), and the Sellers and their independent certified
public accountants C&L Treuarbeit Deutsche Revision AG, Munchen (the
"SELLERS' AUDITORS") shall have the right during the succeeding 30-day
period (the "THIRTY-DAY PERIOD"), which is non-extendible, to audit the
Transfer Balance Sheet and to examine and review all work papers and, to
the extent reasonably necessary to evaluate the Transfer Balance Sheet,
other records and supporting documents used to prepare such Transfer
Balance Sheet; provided, however, that Purchasers' Auditors and Sellers'
Auditors shall have executed, prior to any such audit, an audit access
letter in substantially the form attached hereto as SCHEDULE 8.3. The
scope of the audit by the Purchasers' Auditors and by the Sellers'
Auditors shall be strictly in accordance with these provisions and not
with other provisions or rules which may be based on a different
regulatory intent (i.e. Section 15, below).
a) The Purchasers shall notify the Sellers in writing and the
Sellers shall notify the Purchasers in writing, on or before the
last day of the Thirty-day Period, of any good faith objections
to the Transfer Balance Sheet, setting forth a reasonably
specific description of the Purchasers' objections and the
DM-amount of each objection.
b) If the Purchasers or the Sellers do not deliver such
notification within the Thirty-day Period, the Transfer Balance
Sheet shall be deemed to have been accepted by the Purchasers
and by the Sellers.
c) If the Purchasers or the Sellers in good faith object to the
Transfer Balance Sheet, the Sellers' Auditors and the
Purchasers' Auditors shall attempt to resolve in good faith any
such objections within 15 days of the expiration of the
Thirty-day Period. Any such resolution shall be conclusive and
binding on the Purchasers and the Sellers and shall be made
applying the principles set forth and referred to on Schedule
8.1.
<PAGE>
d) If the Sellers' Auditors and the Purchasers' Auditors are unable
to resolve the matter within such 15-day period, then Price
Waterhouse GmbH as arbitrator (Schiedsgutachter) shall make the
decision on any remaining good faith objections with final and
binding effect on the Sellers and the Purchasers. Price
Waterhouse shall also decide, pursuant toss.ss.91 et seq. of the
German Code of Civil Procedure, which party shall bear the costs
of this arbitration, including, without limitation, Price
Waterhouse' fees. The Sellers and the Purchasers shall (and
shall cause the Target Companies to) provide Price Waterhouse
with full cooperation. Price Waterhouse shall be instructed to
reach its conclusion regarding the dispute preferably within 30
days of its appointment. Any resolution by Price Waterhouse
shall be conclusive and binding on the Purchasers and the
Sellers and shall be made applying the principles set forth and
referred to on Schedule 8.1. The Transfer Balance Sheet after
the acceptance thereof by the Purchasers and the Sellers or the
resolution of all disputes in connection therewith is referred
to herein as the "FINAL BALANCE SHEET".
e) The Transfer Balance Sheet, when being presented to the
Purchasers and the Sellers, shall be accompanied by a statement
of computation by TS GmbH's Auditors of what the amount of the
Final Purchase Price (including the Adjustment Amount pursuant
to Section 7 (9), if applicable) would be if the Transfer
Balance Sheet were the Final Balance Sheet. An objection made
pursuant to subcl. a), above, shall be accompanied by a
statement of computation by each of the Purchasers' Auditors and
the Sellers' Auditors, as the case may be, of what the Final
Purchase Price would be if the Purchasers' or the Sellers'
objections to the Transfer Balance Sheet, as the case may be,
were accurate.
(4) In preparing the Transfer Balance Sheet pursuant to subcl. (2), above,
and in its adjudication (including examination by the Purchaser's
Auditors and the Sellers' Auditors) pursuant to subcl. (3), above, the
knowledge which existed at the time of preparing the Individual Transfer
Balance Sheets of the Target Companies and the Subsidiaries shall be
applied in the context of applying accounting rules and making
valuations.
<PAGE>
9.
PAYMENT
(1) Payment of the Preliminary Purchase Price shall be made at the Closing
by the Purchasers to each of the Sellers by wire transfer of immediately
available funds in the amounts set forth in Section 7 (1)
- to the German Seller: to Daimler-Benz AG (in favor of TEMIC
TELEFUNKEN microelectronic GmbH, Heilbronn), Citibank in
Frankfurt am Main, USD-Account No. 120 87 67 018, via Citibank
New York
- to the U.S. Seller: to Daimler-Benz North America Corp. (in
favor of Daimler-Benz Technology Corp., New York) Chase
Manhattan Bank in New York, N.Y., ABA No. 021 000 021, Account
No. 910 246 57 63.
(2) Additional payment or repayment of the difference between the
Preliminary Purchase Price and the Final Purchase Price shall be made by
the Purchasers and apportioned amongst the Sellers, or made by the
Sellers to the Purchasers, based on the percentages set forth in Section
7 (1) to the Purchasers, together with interest thereon at the rate and
for the time specified in Section 7 (7), within ten calendar days from
the date of the Final Balance Sheet.
(3) Before the Final Balance Sheet is established, additional payment or
repayment shall be made of the undisputed amount, if any, of an increase
or decrease of the Preliminary Purchase Price, together with interest
thereon at the rate and for the time specified in Section 7 (7), within
ten calendar days from the date when it became apparent that there is an
undisputed amount. This subcl. (3) may apply more than once. Payments
made under this subcl. (3) shall be taken into account when making
payments pursuant to subcl. (2).
<PAGE>
(4) 3 % over and above the discount rate of the German Federal Reserve Bank
prevailing from time to time is hereby agreed to be the interest rate
for all cases of payment default (Zahlungsverzug) among the parties to
this Agreement; the creditor may assert excess damage.
(5) Repayments, if any, to the Purchasers shall be made
- to the German Purchaser: BHF Bank in Frankfurt am Main, Account
No. 20875, Bank Code 500 202 00;
- to the U.S. Purchaser: Comerica Bank in Detroit, Michigan,
Account No. 10 76 000 734.
(6) Payment of the Preliminary Purchase Price (DM 579,300,000) shall be made
in U.S. dollars at the official conversion rate quoted at the Frankfurt
stock exchange (amtlicher Mittelkurs) on the banking day in Frankfurt am
Main immediately preceding the day of Closing. Payment or repayment of
any difference between the Preliminary Purchase Price and the Final
Purchase Price, shall be made in U.S. dollars at the official conversion
rate quoted at the Frankfurt Stock Exchange (amtlicher Mittelkurs) on
the banking day in Frankfurt am Main immediately preceding the day of
such payment or repayment.
(7) At Closing, in addition to the Preliminary Purchase Price, the amount of
the DB-Indebtedness shall be paid by the Purchasers to Daimler Benz AG
to its account with Citibank in Frankfurt am Main, USD Account No. 120
87 67 018, via Citibank New York.
"DB-Indebtedness" is the amount of DM 163.8 million (the amount of Net
Financial Indebtedness to Daimler Benz AG within the meaning of Section
7 (4) d)), or, if notification of the likely balances in the IC accounts
pursuant to Section 17 (4) c) has taken place, the sum of the notified
amounts of (i) the DM IC accounts pursuant to Section 17 (4) a) and b)
(including the outstanding loan by Daimler Benz AG to TS GmbH plus
interest accrued thereon up to and including
<PAGE>
the day of Closing, and further including the amounts pursuant to
Section 17 (5), if any), and (ii) the USD IC account pursuant to Section
17 (4) a).
(8) Payment of the DB-Indebtedness and additional payments or repayments, if
any, pursuant to Section 17 (4) f) shall be made in US Dollars; based on
the respective conversion rate set forth in subcl. (6) above.
10.
TAXES
(1) Due Filing of Returns/Payment of Certain Taxes by Sellers
a) U.S. Seller represents that, except as set forth on SCHEDULE
10.1, each of Siliconix Inc. and its Subsidiaries has or will
have, as of the Transfer Date, timely, completely, and
accurately in all material respects, filed all Tax Returns
required to be filed by it on or before the Transfer Date with
respect to any taxable period or periods ending on or before the
Transfer Date, and has paid or will pay all Taxes shown to be
due on such Tax Returns .
b) German Seller represents that, except as set forth on Schedule
10.1, each of TS GmbH and its Subsidiaries has or will have, as
of the Transfer Date, timely, completely, and accurately in all
material respects, filed all Tax Returns required to be filed by
it on or before the Transfer Date with respect to any taxable
period or periods ending on or before the Transfer Date, and has
paid or will pay, or, as the case may be, has caused or will
cause its Subsidiaries to pay in a timely fashion all Taxes
shown to be due on such Tax Returns to the appropriate tax
authorities.
c) For purposes of this Agreement, "Tax" or "Taxes" shall mean all
taxes, charges, fees, levies, penalties or other assessments
including, but not limited to, income, excise, property, sales,
transfer, franchise, payroll, withholding, social security,
value added, or other taxes, including any interest, penalties
or additions attributable thereto, imposed by a United States or
German federal, state, or local taxing authority or a taxing
authority of any other country.
<PAGE>
d) For purposes of this Agreement, "Tax Return" shall mean any
returns, statements, reports and forms (including estimated tax
or information returns and reports) required to be filed with
any taxing authority with respect to Taxes.
(2) Pending or Threatened Actions
a) Except as set forth on SCHEDULE 10.2 and except with respect to
any Tax audits, there is no action, suit, proceeding,
investigation or claim pending or, to the knowledge or U.S.
Seller, threatened in respect of any Taxes for which Siliconix
Inc. is liable, nor has any deficiency or claim for any such
Taxes been proposed, asserted or, to the knowledge of U.S.
Seller, threatened.
b) Except as set forth on Schedule 10.2 and except with respect to
any Tax audits, there is no action, suit, proceeding,
investigation or claim pending or, to the knowledge of German
Seller, threatened in respect of any Taxes for which TS GmbH is
liable, nor has any deficiency or claim for any such Taxes been
proposed, asserted or, to the knowledge of German Seller,
threatened.
(3) Except as set forth on SCHEDULE 10.3:
a) Since January 1, 1992, neither Siliconix Inc. nor any of its
Subsidiaries has ever been a member of an affiliated group
within the meaning of Section 1504 of the Internal Revenue Code
of 1986, as amended (the "Code") or filed or been included in a
combined, consolidated, or unitary Tax Return, other than any
group of which Daimler Benz North America Corporation is the
common parent or any group of which Siliconix Inc. (or any
predecessor thereto) was the common parent.
<PAGE>
b) Other than with respect to Taxes of other members of the
affiliated group of corporations including the U.S. Seller, to
the best knowledge of the U.S. Seller, neither Siliconix Inc.
nor any of its Subsidiaries is liable for any material amount of
Taxes of any other person, or is currently under any contractual
obligation to indemnify any person with respect to Taxes.
c) Except for Siliconix Technology C.V., Amsterdam, to the best
knowledge of the U.S. Seller, neither Siliconix lnc. nor any of
its Subsidiaries is a party to any joint venture, partnership,
or contract which is treated as a partnership for United States
federal income tax purposes.
d) The sale of the U.S. Shares by the U.S. Seller pursuant to
Section 3 of this Agreement will not result in the recognition
of a material amount of income by Siliconix Inc. or any of its
Subsidiaries under Treasury Regulation Section 1.1502-13 or
Section 1.1502-19.
e) Neither Siliconix lnc. nor any of its Subsidiaries has entered
into any sale-leaseback or any leveraged lease transaction that
they treat as not meeting the requirements of Revenue Procedure
75-21 or similar provisions of foreign law.
f) Neither Siliconix Inc. nor any of its Subsidiaries has agreed or
is required, as a result of a change in method of accounting or
otherwise, to include in taxable income any material adjustment
under Section 481 of the Code or any corresponding provision of
state, local, or foreign law.
g) Neither Siliconix Inc. nor any of its Subsidiaries is liable
with respect to any indebtedness for which they are not claiming
an interest deduction with respect to payments of interest
thereon for United States federal income tax purposes.
<PAGE>
h) Neither Siliconix Inc. nor any of its Subsidiaries is a
"consenting corporation" under Section 341 (f) of the Code.
(4) Cooperation on Tax Matters
a) Purchasers and Sellers and, to the extent reasonably required,
the Target Companies and their Subsidiaries shall cooperate
fully, as and to the extent reasonably requested by the other
party, in connection with the preparation and filing of Tax
Returns, including any report required pursuant to Section 6043
of the Code and all Treasury Regulations promulgated thereunder,
and any audit, litigation or other proceeding with respect to
Taxes. Such cooperation shall include the retention and (upon
the other party's request) the provision of records and
information which are reasonably relevant to any such audit,
litigation or other proceeding and making employees available on
a mutually convenient basis to provide additional information
and explanation of any material provided hereunder, but shall
not include the provision of U.S. consolidated federal income
Tax Returns which includes the U.S. Seller, Daimler-Benz North
America corporation, or any affiliate thereof or successor
thereto, regardless of whether a 338 (h)(10) Election (as
defined in Section 10 (7) a) below) is made.
b) Purchasers and Sellers agree (i) until one year after expiration
of all applicable statutes of limitation (as may be extended) to
retain, or cause to be retained, all books and records with
respect to Tax matters pertinent to the Target Companies and the
Subsidiaries relating to any taxable periods ending prior to or
including the Transfer Date, and to abide by all record
retention agreements entered into with any taxing authority,
(ii) to give the other party reasonable written notice prior to
destroying or discarding any such books and records after the
periods described in (i) above, and (iii) if the other party so
requests, allow the other party to take possession to such books
and records.
<PAGE>
c) Purchasers and Sellers further agree, upon request from the
other party, to use all reasonable efforts to obtain any
certificate or other document from any governmental authority or
customer of the Target Companies or the Subsidiaries or from any
other person as may be necessary to mitigate, reduce or
eliminate any Tax that could be imposed, including but not
limited to with respect to the transactions contemplated hereby.
d) No later than 45 days before the due date (with any applicable
extensions) for the filing of any Tax Returns (due after the
Transfer Date) of, or that include, any of the Target Companies
or the Subsidiaries with respect to a taxable period that ends
on or prior to the Transfer Date, or with respect to a taxable
period that includes but ends after the Transfer Date,
Purchasers shall deliver, or cause Target Companies and the
Subsidiaries to deliver, copies of such Tax Returns (or pro
forma Tax Returns as the case may be) to the U.S. Seller or the
German Seller (as the case may be), along with the notice of the
due date (with any applicable extensions) for the filing of such
Tax Returns. No later than 15 days before the due date (with any
applicable extensions) for the filing of such Tax Returns as
notified by Purchasers, the appropriate Seller shall give notice
to Purchasers of its consent or reasonable objection to such Tax
Returns. Purchasers and affiliates thereof or successors thereto
shall file any such Tax Returns (which Purchasers and affiliates
thereof or successor thereto are required to file) only with the
prior consent of the appropriate Seller.
e) Purchasers and affiliates thereof or successors thereto
(including, for purposes of this Section 10, the Target
Companies and the Subsidiaries) shall prepare and file
all Tax Returns and shall be liable for and shall pay
all Taxes with respect to the Target Companies and the
Subsidiaries with respect to any taxable period or
periods beginning on or after and ending after the
Transfer Date. No election shall be made with respect to
Siliconix Inc. and its Subsidiaries under Treasury
Regulation Section 1.1502-76(b)(2)(ii) without the
consent of the Purchasers, which shall not be
unreasonably withheld, with respect to any taxable
period or periods beginning on or after and ending after
the Transfer Date.
<PAGE>
f) Purchasers shall cause the Target Companies and the Subsidiaries
to timely pay to the appropriate taxing authorities (or to the
U.S. Seller or German Seller as the case may be) any Taxes
imposed with respect to the business, income, assets and/or
operations of the Target Companies and the Subsidiaries that are
due on or after the Transfer Date.
g) For the time period up to and including the Transfer Date, the
U.S. Seller and Siliconix Inc. and its Subsidiaries shall
continue to cooperate in Tax matters as they have done in the
past.
(5) Tax indemnification, Set-off of Tax Benefit
Subject to Section 14 (6) and (10):
a) U.S. Seller hereby indemnifies U.S. Purchaser against and agrees
to hold U.S. Purchaser harmless from (i) any Tax of U.S. Seller
or its affiliates (other than any Tax of Siliconix Inc. or its
Subsidiaries) incurred with respect to any taxable period or
periods ending on or before the Transfer Date, and (ii) except
to the extent reserved for by Siliconix Inc., 80% of the amount
of any final assessment of any Tax deficiency of Siliconix Inc.
and its Subsidiaries with respect to any taxable period or
periods ending on or before the Transfer Date.
b) The German Seller hereby indemnifies German Purchaser against
and agrees to hold the German Purchaser harmless from any unpaid
Tax of TS GmbH and its Subsidiaries incurred with respect to any
taxable period or periods ending on or before the Transfer Date,
to the extent that the Final Balance Sheet contains no provision
for such Tax.
<PAGE>
c) Purchasers hereby indemnify Sellers against and agrees to hold
Sellers harmless from (i) any Tax of Purchasers or any affiliate
thereof or successor thereto, and any Tax imposed on Sellers or
any of their affiliates with respect to the business of the
Target Companies and the Subsidiaries, incurred with respect to
any taxable period or periods beginning on or after and ending
after the Transfer Date, and (ii) 20% of the amount of any final
assessment of any Tax deficiency of Siliconix Inc. and its
Subsidiaries with respect to any taxable period or periods
ending on or before the Transfer Date, and (iii) any additional
Tax costs (and related fees and costs) incurred by the U.S.
Seller and/or any affiliates thereof or successors thereto as a
result of any 338 (h)(10) Election (as defined in Section 10 (7)
a) below).
d) Any indemnity obligation pursuant to Section 10 (5)(a), (b) or
(c) above shall be (i) reduced by any Tax Benefit realized by
the indemnified party any affiliate thereof (including in the
case of subcls. a) and b) any Tax Benefit realized by any of the
Target Companies or the Subsidiaries) or successor thereto, with
respect to such Taxes or the adjustment giving rise to such
claim for indemnification, and (ii) subject to presentation of
the final assessment of such Tax, on or before the 60th day
following the expiration of the applicable statute of
limitations. "Tax Benefit" shall mean the present value or any
present or future deduction, expense, loss, increase in asset
basis, credit or refund then or thereafter realized by a party
or an affiliate thereof or successor thereto, computed in
respect to Tax Benefits in the United States calculated using
the applicable long-term federal rate as defined in Section
1274(d) of the Code or any successor provision, and in respect
of Tax Benefits in Germany or elsewhere calculated using the
interest rate of 6% p.a.
<PAGE>
e) Each party agrees (i) to give within ten Business Days written
notice to the other party of any additional Tax (including, but
not limited to, any Tax assessments, whether final or not) or
the assertion of any claim or the commencement of any suit,
action or proceeding in respect of which such party may seek
indemnity hereunder, and (ii) to give the other party such
information with respect thereto as the other party may
reasonably request, and (iii) upon the other party's
instruction, to file, or cause the company concerned to file,
any notice, objection or otherwise with the appropriate taxing
authority. The indemnifying party shall not be liable under this
Section 10(5) to the extent such party is materially adversely
affected by the indemnified party's failure to comply with this
provision.
f) An indemnifying party may, at its own expense, (i) participate
in and (ii) upon notice to the other party, assume the defence
of any suit, action or proceeding, including any Tax audit,
concerning any Tax liability as to which it may be liable under
this Section 10 (5) and as to which written notice was given
pursuant to Section 10 (5) e). If a party chooses to defend or
prosecute any claim, all of the parties hereto shall cooperate
in the defence or prosecution thereof, and the Purchasers shall
cause the Target Companies and the Subsidiaries to cooperate. A
party shall not be liable under Section 10(5) to the extent such
party's liability under this Section is materially adversely
affected as a result of any failure or omission to do so on the
part of the other party or any affiliate thereof or successor
thereto.
(6) Tax Refunds, Tax Benefits
a) To the extent not governed by subcl. (5) d) above, Purchasers
shall within 10 days of receipt of any Tax refund or credit
actually received by or on behalf of any of the Purchasers or
any affiliate thereof (including the Target Companies and the
Subsidiaries) or successor thereto, with respect to any taxable
period or periods of any of the Target Companies or the
Subsidiaries ending on or before the Transfer Date, pay such Tax
refund or credit to the appropriate Seller including any
interest actually received thereon.
<PAGE>
b) To the extent that any of the Purchasers or any affiliate
thereof or successor thereto realizes a Tax Benefit that is
attributable to an adjustment of any income, gain, loss,
deduction, credit, refund or other Tax item made with respect to
any taxable period or periods of the Target Companies or the
Subsidiaries ending on or before the Transfer Date and in
connection therewith the Sellers or any affiliates thereof or
successors thereto realizes any Tax cost or detriment,
Purchasers will, within 10 days of the receipt of such Tax
Benefit, pay to the appropriate Seller an amount equal to such
Tax Benefit.
(7) ss. 338 (h)(10) Election
a) The U.S. Seller agrees, if timely requested by the U.S.
Purchaser, to join with the U.S. Purchaser in making an election
under Section 338 (h)(10) of the Code (and similar provisions of
state or local law) (a "338 (h)(10) Election") with respect to
the purchase by the U.S. Purchaser of the U.S. Shares pursuant
to this Agreement; provided, however, that a nationally
recognized accounting firm selected by the U.S. Seller shall
prepare all reports, forms, studies, valuations and analyses to
be used by the U.S. Seller and U.S. Purchaser in connection
therewith.
b) If a 338 (h)(10) Election is made pursuant to Section 10 (7) a)
above, the US Purchaser agrees to pay to the U.S. Seller within
five Business Days of receipt of notification from the U.S.
Seller an amount equal to any additional Tax costs (and related
fees and costs) incurred by the U.S. Seller or any affiliate
thereof or successor thereto as a result of such 338 (h)(10)
Election; for purposes of this Section 10 (7) b) such additional
Tax costs shall equal (x) (i) the amount of gain and/or income
the U.S. Seller, Siliconix Inc., and any affiliates thereof or
successors thereto realize for Tax purposes as a result of the
338 (h)(10) Election minus (ii) the amount of gain and/or income
the U.S. Seller would have realized for Tax purposes from the
sale of the U.S. Shares pursuant to this Agreement in the
absence of any 338 (h)(10) Election multiplied by (y) the
maximum marginal U.S. federal income tax rate applicable to
corporations plus 5%.
<PAGE>
c) If a 338 (h)(10) Election is made pursuant to Section 10 (7) a)
above, neither the U.S. Purchaser nor any affiliates thereof or
successors thereto shall make any election under Section 338 of
the Code (or similar provisions of state or local law) without
the prior written consent of the U.S. Seller with respect to any
deemed purchase of the stock of any non-U.S. Subsidiaries of
Siliconix Inc. as a result of the 338 (h)(10) Election.
(8) Tax sharing agreements
All material income Tax sharing agreements to which Siliconix Inc. or any
of its Subsidiaries is a party and to which they will remain a party
after the Transfer Date are listed on SCHEDULE 10.8. Nothing in such
agreements shall have the effect of changing the terms of this Agreement
or the rights and obligations of U.S. Seller and U.S. Purchaser pursuant
to this Agreement.
11.
WARRANTIES OF THE SELLERS
The Sellers hereby jointly and severally represent and warrant to the Purchasers
as follows:
(1) The description of and representations as to the corporate structure of
the Target Companies and the Subsidiaries set forth, or referred to, in
Section 1 (1) through (8) are true and accurate in all material respects.
(2) Each of the Target Companies and the Subsidiaries is a corporation, a
limited liability company or a partnership duly organized, validly
existing and, where applicable, in good standing under the laws of the
jurisdiction of its organisation. Each of the Target Companies and the
Subsidiaries has all requisite power and authority to own, lease and
operate its properties and to carry on its business as now being
conducted, except where the failure to be so existing and in good
standing or to have such power or authority would not individually or in
the
<PAGE>
aggregate have a material adverse effect on the business, financial
condition or result of operations of the Target Companies and the
Subsidiaries, taken as a whole (a "MATERIAL ADVERSE EFFECT") in excess
of DM 2 million. Each of the Target Companies and the Subsidiaries is
duly qualified or licensed to do business as a foreign corporation,
foreign limited liability company or foreign partnership and, where
applicable, is in good standing to do business in each jurisdiction in
which the property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification or licensing
necessary, except in such jurisdictions where failure to be so duly
qualified or licensed and in good standing would not, in the aggregate,
have a Material Adverse Effect in excess of DM 2 million. Schedule 1.2
sets forth a complete and accurate list of all jurisdictions in which
each of the Target Companies and each of the Subsidiaries is qualified
or licensed to do business. The Sellers have heretofore delivered to the
Purchaser accurate and complete copies of the certificate of
incorporation and bylaws (or other similar charter documents) or
partnership agreements of each of the Target Companies and the
Subsidiaries (except inactive Subsidiaries identified as such on
Schedule 1.2), as currently in effect.
(3) Each of the Sellers has the requisite power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by each of the
Sellers and the consummation by such Seller of the transactions
contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of such Seller, except as set
forth in this Agreement. This Agreement has been duly and validly
executed and delivered by each of the Sellers and, assuming the due
authorization, execution and delivery by the Purchasers, constitutes a
valid and binding agreement of each Seller, enforceable against each
Seller (as joint and several debtor) in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting creditors'
rights generally.
(4) Except as set forth on SCHEDULE 11.4 and except for applicable
requirements of the HSR Act, the Omnibus Trade and Competitiveness Act of
1988 (hereinafter
<PAGE>
referred to as the "EXON-FLORIO AMENDMENT"), the German GWB, EU
Regulation 4064/89, the Swedish Competition Law, as well as any other
applicable antitrust provisions of other laws, ss. 3 of the German
Currency Act (Wahrungsgesetz), each as amended, and except for
applicable requirements to notify the U.S. the Pension Benefit Guaranty
Corporation, to the knowledge of the Sellers, there is no requirement
applicable to the Sellers or the Target Companies to make any filing
with, or to obtain any permit, authorization, consent or approval of,
any governmental or regulatory authority, domestic or foreign, as a
condition to the lawful consummation by the Sellers of the transactions
contemplated by this Agreement. Except as set forth on Schedule 11.4,
neither the execution and delivery of this Agreement by the Sellers nor
the consummation by the Sellers of the transactions contemplated hereby
nor compliance by the Sellers with any of the provisions hereof will (i)
conflict with or result in any breach of any provision of the
certificate of incorporation or bylaws (or other similar charter
documents) of any of the Sellers or any of the Target Companies or any
of the Subsidiaries, or (ii) assuming that the filings referred to in
the first sentence of this subcl. (4) are duly and timely made, to the
knowledge of the Sellers, violate any order, writ, injunction, decree,
statute, treaty, rule or regulation applicable to any of the Sellers,
any of the Target Companies, any of the Subsidiaries or any of their
respective properties or assets; excluding from this clause (ii) such
breaches, defaults and violations which in the aggregate could not
reasonably be expected to have a Material Adverse Effect. in excess of
DM 2 million.
(5) Except for the possibility that the French Government (Ministry of
Industry) might consider to claim repayment of the Subsidy granted to
MATRA MHS S.A., unless appropriate assurances which may be expected by
the French Government would be given by Purchasers, the Sellers have no
reason to believe that the other parties to the Change of Control
Agreements, which are material to the Business, will upon the sale and
transfer of the German Common Stock and the U.S. Shares to the German
Purchaser and the U.S. Purchaser, respectively, exercise a right of
termination, cancellation or acceleration under any of the terms,
<PAGE>
conditions or provisions of any such material Change of Control
Agreement.
(6) All legal, administrative, arbitration or other proceedings or
governmental investigations (except tax audits) ("PROCEEDINGS") pending
or, to the knowledge of Sellers, threatened in writing, against the
Target Companies or the Subsidiaries, which are reasonably expected to
result in a damage award of more than DM 1,000,000 individually are
disclosed on Schedule 11.6. Except for Proceedings relating to
environmental or tax matters, there are no Proceedings pending or, to the
knowledge of the Sellers, threatened in writing, involving the Target
Companies or the Subsidiaries (other than Maxim, SGS Thompson and IBM)
which will result in aggregate damage awards of more than the sum of DM
2,000,000 plus the amounts reserved therefor in the Final Balance Sheet.
(7) a) Except as set forth on Schedule 11.7, to the knowledge of the
Sellers, the Target Companies and the Subsidiaries are in
compliance with all Environmental Law (as hereinafter defined)
as presently in effect, except for such violations which could
not reasonably be expected individually to have a Material
Adverse Effect in excess of DM 500,000. Except as set forth on
Schedule 11.7, to the knowledge of the Sellers, none of the
Target Companies and the Subsidiaries has received any written
communication from a governmental authority that alleges that
such company is not in compliance with all applicable
Environmental Law as presently in effect, except for such events
of noncompliance which could not reasonably be expected to have
a Material Adverse Effect in excess of DM 200,000 in each
individual case. All material permits and other governmental
authorization currently held by any of the Target Companies
pursuant to an Environmental Law are identified on Schedule
11.7.
b) Except as set forth on Schedule 11.7, there is no Environmental
Claim (as hereinafter defined) pending, or, to the knowledge of
the Sellers, threatened in writing against any of the Target
<PAGE>
Companies or any of the Subsidiaries or, to the knowledge of the
Sellers, against any person or entity whose liability for such
an Environmental Claim any of the Target Companies or any of the
other companies of the German Group has or may have retained or
assumed either contractually or by operation of law, except for
such Environmental Claims which could not reasonably be expected
to have a Material Adverse Effect in excess of DM 200,000.
c) As used herein, the following terms shall have the meaning set
forth below:
(i) "Environmental Claim" means any claim or notice in
writing, received by one of the Sellers, or any of the
Target Companies or any of the Subsidiaries by any
person or any entity alleging potential liability
(including, without limitation, potential liability for
investigatory costs, clean-up costs, governmental
response costs, natural resources damages, property
damages, personal injuries, or penalties) arising out
of, based on or resulting from (a) the presence, or
release into the environment, of any Hazardous Materials
(as hereinafter defined) at any location, whether or not
owned by any of the Target Companies or any of the
Subsidiaries or (b) any violation, or alleged violation,
of any Environmental Law.
(ii) "Environmental Law" means all federal, state, local and
foreign laws and regulations relating to pollution or
protection of human health or the environment applicable
to the property and business of any of the Target
Companies or any of the other companies of the German
Group.
(iii) "Hazardous Materials" means materials defined as
"hazardous substances", "hazardous wastes", "solid
wastes" or words of similar import in any Environmental
Laws, as presently in effect.
(8) Except as set forth on Schedule 11.8, and except for standard corporate
policy, and except as provided for by law or collective bargaining
agreements or similar provisions, neither of the Target Companies and, to
<PAGE>
the knowledge of the Sellers, none of the Subsidiaries (other than the
U.S. Companies, as hereinafter defined) is a party to or bound by any
contract, agreement or arrangement with its employees regarding an
obligation to make severance payments in case of a termination of
employment.
(9) Intellectual property
a) Except for such intellectual property the absence of which is not
material, SCHEDULE 11.9 sets forth the following:
(i) all intellectual property rights (including applications)
that have been registered for either Target Company or any
of the Subsidiaries in the corresponding registry, and
(ii) all licences to intellectual property rights and copyrights
(except for standard software) that have been licensed to
either Target Company or any of the Subsidiaries on the
basis of a licence agreement or other right (passive
licences), and
(iii) all licences granted by either Target Company or any of the
Subsidiaries to third parties (active licences).
Schedule 11.9 is not intended to contain
- standard software licences;
- internal licences between companies that are a Target
Company or a Subsidiary;
- licences under the foregoing subpara. (iii) that are
implicitly granted to customers in agreements with
customers, including licences to allow design, service,
repair and similar services to be performed by third
parties.
The intellectual property rights set forth on Schedule 11.9
pursuant to subpara. (i), above are hereinafter referred to as the
<PAGE>
"INTELLECTUAL PROPERTY RIGHTS"; the trademarks contained therein
are hereinafter referred to as the "TRADEMARKS".
b) The Intellectual Property Rights registered for either Target
Company or any of the Subsidiaries are owned by the respective
company to the knowledge of the Sellers free and clear of any
encumbrances or other rights of third parties, except for employee
inventor rights, sublicenses, and, to the extent included on
Schedule 11.9, cross license agreements and co-ownership rights.
c) None of the Intellectual Property Rights, except applications, has
been adjudicated unenforceable or ineffective in any other manner.
The Sellers have no knowledge that any of the Intellectual
Property Rights is not valid or not subsisting.
d) The Intellectual Property Rights and the other intellectual
property rights including licences provided in this Agreement to
be conveyed to the Target Companies and the Subsidiaries are all
material intellectual property rights which belong to or are
lawfully used in the Business as defined in Section 1 (9).
(10) a) Except as set forth on SCHEDULE 11.10A, TS GmbH or any of the
Subsidiaries incorporated in Germany have not entered into
agreements with its works council with respect to maintaining a
certain number of workers, a certain organization or salaries
and wages that are effective past December 31, 1997. All pension
plans applicable to employees of TS GmbH or employees of German
Subsidiaries are also set forth on Schedule 11.10a. Except as
set forth on Schedule 11.10a, to the knowledge of Sellers, there
is no strike, work stoppage, work slowdown or other material
labor disturbance involving employees of TS GmbH or any of the
Subsidiaries pending, or to the knowledge of Sellers,
threatened.
b) Except as set forth on SCHEDULE 11.10B, (i) Siliconix Inc. is
not a party to any collective bargaining agreement, (ii) to the
knowledge of Sellers, no union organizational campaign is in
progress with respect to the business of Siliconix Inc., (iii)
there is no strike, work stoppage, work slowdown or other
material labor disturbance involving employees of Siliconix Inc.
pending, or to the knowledge of Sellers, threatened, and (iv)
there is no unfair labor practice or other charge or complaint
pending, or to the knowledge of Sellers, threatened against
Siliconix Inc. before the National Labor Relations Board, the
Equal Employment Opportunity Commission or any other government
agency or court regarding an unlawful employment practice other
than proceedings arising in the ordinary course of business and
proceedings which, if decided adversely, would not cause
Siliconix Inc. to incur material liability.
c) A true, correct and complete list dated October 30, 1997, of all
employees of the Target Companies and Subsidiaries in the form
of the personnel statistics as routinely prepared as part of the
internal reporting system used by them is attached as SCHEDULE
11.10C.
(11) All Employee Benefit Plans (as hereafter defined) are in material
compliance with all Applicable Laws (as hereinafter defined). "Applicable
Laws" means any and all statutes (including ERISA and the Code), orders,
governmental rules or regulations currently in effect with respect
thereto, of any U.S. jurisdiction that may apply to any Employee Benefit
Plan.
a) "Employee Benefit Plan" means any "employee benefit plan" as
defined in Section 3 (3) of the Employee Retirement Income
Security Act of 1974, as amended from time to time ("ERISA") and
any other plan, policy, program, practice, agreement,
understanding or arrangement (whether written or oral) providing
compensation or other material benefits to any current or former
officer, employee or consultant (or to any dependent or
beneficiary thereof) of Siliconix, Inc. or any Subsidiary that
is the employer of employees who are covered by such a plan that
is subject to Applicable Laws (for
<PAGE>
purposes of this subcl. (11), collectively, the "U.S. Companies"),
which are now, or were within the past six years, maintained by,
contributed to by or with respect to which an obligation to
contribute exists on the part of the U.S. Companies under which
any of the U.S. Companies has or may have any material obligation
or liability, including, without limitation, all material
incentive, bonus, deferred compensation, vacation, holiday,
cafeteria, medical, disability, stock purchase, stock option,
stock appreciation, phantom stock, restricted stock or other
stock-based compensation plans, policies, programs, practices or
arrangements.
b) Sellers have made available to Purchasers or its counsel prior
to the date hereof true and complete copies of (i) any
employment agreements and any material procedures and policies
relating to the employment of employees of the U.S. Companies
and the use of temporary employees, independent contractors or
leased employees by the U.S. Companies (including summaries of
any material procedures and policies that are unwritten), (ii)
plan instruments and amendments thereto for all Employee Benefit
Plans and related trust agreements, insurance and other
contracts, summary plan descriptions, and summaries of material
modifications, and material communications distributed, or
otherwise communicated, to the participants of each Employee
Benefit Plan, (iii) to the extent annual reports on Form 5500
are required with respect to any Employee Benefit Plan, the
three most recent annual reports and attached required schedules
for each Employee Benefit Plan as to which such report is
required to be filed and (iv) where applicable, the most recent
(A) opinion or determination letter, (B) audited financial
statements and (C) actuarial valuation reports for each Employee
Benefit Plan. The Employee Benefit Plans maintained by the U.S.
Companies or as to which the U.S. Companies may have any
material liability are set forth on SCHEDULE 11.11B.
c) Except as set forth on SCHEDULE 11.11C, the U.S. Companies do
not now, nor did they within the six year period preceding the
date hereof, maintain, contribute to or have an obligation to
contribute to an Employee Benefit Plan
<PAGE>
subject to Title IV of ERISA, nor do they have any contingent
liability with respect to any employee benefit plan maintained
by, contributed to by or with respect to which an obligation to
contribute exists or existed on the part of any ERISA Affiliate.
"ERISA Affiliate" means any entity (whether or not incorporated)
other than the U.S. Companies that, together with any of the
U.S. Companies, is or was a member of a controlled group of
corporations within the meaning of Section 414(b) of the Code,
of a group of trades or businesses under common control within
the meaning of Section 414(c) of the Code, or of an affiliated
service group within the meaning of Section 414(m) of the Code.
d) To the knowledge of Sellers, with respect to each Employee
Benefit Plan, (i) no party in interest or disqualified person
(as defined in Section 3 (14) of ERISA and Section 4975 of the
Code, respectively) has at any time engaged in a transaction
which could reasonably be expected to subject the U.S.
Companies, directly or indirectly, to a material tax, penalty or
liability for prohibited transactions imposed by ERISA or the
Code and (ii) no fiduciary (as defined in Section 3 (21) of
ERISA) with respect to any Employee Benefit Plan, or for whose
conduct the U.S. Companies could reasonably be expected to have
any material liability (by reason of indemnities or otherwise),
has breached any of the responsibilities or obligations imposed
upon the fiduciary under Title I of ERISA.
e) Each Employee Benefit Plan which is an "employee pension benefit
plan" within the meaning of Section 3 (2) of ERISA (a "Pension
Plan") and which is subject to Sections 201, 301 or 401 of ERISA
has received a favorable determination letter from the Internal
Revenue Service covering all amendments required under the Tax
Reform Act of 1986, the Unemployment Compensation Amendments of
1992, the Omnibus Budget Reconciliation Act of 1993 and any
applicable prior tax legislation and, to the knowledge of
Sellers, there are no circumstances that are reasonably likely
to result in revocation of any such favorable determination
letter. Each Employee Benefit Plan is and has been operated in
material compliance with its terms and all
<PAGE>
Applicable Law. As of and including the date of the Closing, the
U.S. Companies shall have made all contributions required to be
made by them up to and including the date of the Closing with
respect to each Employee Benefit Plan, or adequate accruals
therefor will have been provided for and will be included in the
Final Balance Sheet. All notices, filings and disclosures
required by Applicable Laws have been timely made, except for
instances of noncompliance that would, individually or in the
aggregate, not cause the U.S. Companies to incur material
liability.
f) (i) Neither the U.S. Companies nor any Seller has received any
written notice of, or is otherwise aware of, any actions, claims
(other than routine claims for benefits), lawsuits or
arbitrations pending or, to the knowledge of Sellers, threatened
with respect to any Employee Benefit Plan (including against any
fiduciary of any Employee Benefit Plan), and (ii) Sellers have
no knowledge of any facts that could reasonably be expected to
give rise to any such actions, claims, lawsuits or arbitrations
that could, individually or in the aggregate, cause the U.S.
Companies to incur material liability.
g) Except as set forth on SCHEDULE 11.11G, no Employee Benefit Plan
provides for material medical or health benefits (through
insurance or otherwise) or provided for the continuation of such
benefits or coverage for any participant or any dependent or
beneficiary of any participant after such participant's
retirement or other termination of employment except as may be
required by Part 6 of Subtitle B of Title I of ERISA and Section
4980B of the Code ("COBRA").
h) Neither the U.S. Companies nor any ERISA Affiliate has, within
the six year period preceding the date hereof, contributed to,
or withdrawn in a partial or complete withdrawal from, any
"multiemployer plan" (as defined in Section 3 (37) of ERISA) or
has any fixed or contingent liability under Section 4204 of
ERISA.
<PAGE>
i) No Employee Benefit Plan is a "multiple employer plan" as
described in Section 3 (40) of ERISA or Section 413 (c) of the
Code.
j) Except as required by Applicable Law, the U.S. Companies have
not agreed to or communicated to employees any changes to any
Employee Benefit Plan that would (i) cause an increase in
benefits or create new benefits under any Employee Benefit Plan
or (ii) change any employee coverage which would cause an
increase in the expense of maintaining any such Plan that, in
either case, could, individually or in the aggregate, have a
Material Adverse Effect.
k) Except as set forth on SCHEDULE 11.11K, the consummation of the
transactions contemplated hereby will not result in (i) any
material payment (including, without limitation, severance,
unemployment compensation, golden parachute or bonus payments or
otherwise) becoming due to any director, officer, employee or
consultant of the U.S. Companies, (ii) any material increase in
the amount of compensation or benefits payable in respect of any
director, officer, employee or consultant of the Target
Companies or the Subsidiaries, or (iii) the acceleration of
vesting or time of payment of any material benefits or
compensation payable in respect of any director, officer,
employee or consultant of the U.S. Companies.
l) (i) Except as set forth on Schedule 11.11L hereto, the U.S.
Companies have no material liability under Subtitle C or D of
Title IV of ERISA (other than liability to make contributions),
and no such liability is reasonably excepted to be incurred by
the U.S. Companies, with respect to any "single employer plan,"
within the meaning of Section 4001 (a) (15) of ERISA, currently
or formerly maintained or contributed to by any of the U.S.
Companies or any ERISA Affiliate. The PBGC has not instituted
proceedings to terminate any such plan and, to the knowledge of
Sellers, no condition exists that could reasonably be expected
to result in the PBGC instituting such proceedings. (ii) Except
as set forth on Schedule 11.11l No notice of a "reportable
event," within the meaning of Section 4043 of ERISA for which
the thirty (30)-day
<PAGE>
reporting requirement has not been waived, has been required to
be filed for any Pension Plan or a plan of an ERISA Affiliate
within the twelve (12)-month period ending on the date hereof
or, to the knowledge of Sellers, will be required to be filed by
the U.S. Companies as a result of the transactions contemplated
by this Agreement, except for instances of noncompliance that
would individually or in the aggregate not cause the U.S.
Companies to incur material liability. (iii) No Pension Plan has
an "accumulated funding deficiency" (whether or not waived)
within the meaning of Section 412 of the Code or Section 302 of
ERISA, and none of the U.S. Companies has an outstanding funding
waiver. (iv) None of the U.S. Companies has provided, nor is
required to provide, security to any Pension Plan pursuant to
Section 401 (a) (29) of the Code.
m) Except as disclosed on Schedule 11.11M hereto, under each
Pension Plan that is a single employer plan, as of the last day
of the most recent plan year ended prior to the date hereof, the
actuarially determined present value of all "benefit
liabilities" within the meaning of Section 4001 a) (16) of ERISA
(as determined on the basis of the actuarial assumptions
contained in the respective plan's most recent actuarial
valuation), did not exceed the then current value of the assets
of such plan.
n) No Employee Benefit Plan is a voluntary employees' beneficiary
association within the meaning of Section 501 c) (9) of the
Code.
(12) SCHEDULE 11.12 is a complete and accurate list of all material insurance
policies currently carried by the Target Companies and the Subsidiaries
(summarizing in all material respects the amount and scope of the
coverage provided by each such policy). Each such insurance policy is in
full force and effect and there is no material default by any of the
Target Companies or Subsidiaries with respect to any provision contained
in any such insurance policy, including, without limitation, any failure
to give any notice or to present any claim under any such policy in a
timely fashion or in the manner or detail required by the policy, except
<PAGE>
for such defaults or failures, which, individually or in the aggregate,
could not be expected to be material.
(13) a) The Sellers have previously furnished to the Purchaser (i) the
audited consolidated balance sheet of Siliconix Inc. and its
subsidiaries as of December 31, 1996 (the,,U.S. AUDITED BALANCE
SHEET"), and the other related audited consolidated financial
statements for the fiscal year then ended (together with the
notes thereto) accompanied by the reports thereon of KPMG Peat
Marwick LLP, Siliconix Inc.'s independent public accountants
(collectively with the U.S. Audited Balance Sheet , the ,,U.S.
AUDITED FINANCIAL STATEMENTS"), (ii) the audited balance sheets
of TTMG and those of its direct or indirect subsidiaries
relating to the semiconductor business as of December 31, 1996
listed on SCHEDULE 11.13A (the,,GERMAN AUDITED BALANCE SHEETS"
and together with the U.S. Audited Balance Sheet, the,,AUDITED
BALANCE SHEETS") and the related audited income statements of
TTMG and of its direct or indirect subsidiaries listed on
Schedule 11.13a for the fiscal year then ended (together with
the notes thereto) accompanied by the report thereon of the
independent public accountants (collectively with the German
Audited Balance Sheet, the,,GERMAN AUDITED FINANCIAL STATEMENTS"
and together with the U.S. Audited Financial Statements the
,,AUDITED FINANCIAL STATEMENTS"). The Audited Balance Sheets
(including the related notes) as of the time when they were
prepared fairly present in all material respects the financial
position of the companies concerned therein as of December 31,
1996, and the other related year-end statements included in the
Audited Financial Statements (including the related notes)
fairly present in all material respects the results of
operations of the companies included therein for the fiscal year
then ended.
b) In addition to the Pro Forma Balance Sheet including the related
income statement, the Sellers have furnished to the Purchasers
pro forma interim consolidated financial statements (including
related income statements) for the Business as of June 30, 1997,
and September 30, 1997, which were
<PAGE>
routinely prepared in accordance with Schedule 8.1 consistently
applied as part of the internal reporting system used by the
Target Companies and the Subsidiaries (collectively, including
the Pro Forma Balance Sheet, referred to as the "PRO FORMA
FINANCIAL STATEMENTS").
(i) The Pro Forma Financial Statements, as of the time when
they were prepared, fairly present in all material respects
the financial positions of the Business as of the
respective dates thereof and the results of operations of
the Business for the respective time periods covered
thereby.
(ii) Except in connection with the transactions referred to in
or contemplated by this Agreement, since the time of the
preparation of the pro forma interim consolidated financial
statements as of September 30, 1997, (i) the Target
Companies and the Subsidiaries have conducted the Business
in all material respects only in the ordinary and normal
course consistent with past practice, and (ii) there has
not been any material adverse change in the operations or
financial condition of the Business.
(14) a) SCHEDULE 11.14A contains a true and complete list of the
following important contracts to which the German Target Company
or any of its Subsidiaries is a party (a "GERMAN TARGET COMPANY
PARTY" and, collectively, the "GERMAN TARGET COMPANY PARTIES")
and which have not yet been fully performed, except for
contracts required to be disclosed in any other schedule to this
Agreement:
(i) All manufacturers sales representatives agreements,
distributor agreements (including franchises) or agreements
providing for the services of an independent contractor if
such agreement involves annual sales volume or an
obligation of the German Target Company Parties of more
than DM 2,000,000.
<PAGE>
(ii) All loan agreements, indentures, mortgages, pledges and
security agreements, having (in the case of indebtedness) a
principal amount or providing for (in the case of other
agreements) aggregate payments in excess of DM 1,000,000
and all guaranties with a guaranteed amount in excess of DM
200,000.
(iii) All leases or lease purchase agreements providing for
monthly payments in excess of DM 40,000 or annual payments
in excess of DM 500,000.
(iv) All other contracts or agreements relating to the business
or operations of the German Target Company Parties which in
the best judgment of the German Target Company Parties are
important to the business or operations of the German
Target Company Parties and which involve payments or
receipts by the German Target Company Parties of more than
DM 2,000,000 individually.
b) SCHEDULE 11.14B contains a list of all material contracts of the
Target Companies and the Subsidiaries with the United States or
any foreign government or any agency or department of any
thereof pursuant to which any of the Target Companies or
Subsidiaries is entitled to receive grants, subsidies or similar
financial support.
To the knowledge of Sellers, the validity or enforceability of the
contracts listed on Schedule 11.14a and 11.14b has not been legally
contested or questioned in writing. To the knowledge of Sellers, there
does not exist any breach or default on the part of any of the Target
Companies or the Subsidiaries or the other party thereto under any of the
contracts listed on Schedule 11.14a and 11.14b or any contracts of the
U.S. Group which are of a type that would be required to be filed as an
exhibit pursuant to Item 601 of Regulation S-K, except such breaches or
defaults which would not, individually or in the aggregate, have a
Material Adverse Effect in excess of DM 4 million.
<PAGE>
(15) All financial and other obligations which might result from the judgement
of the Supreme Court in Manila dated December 12, 1997 or related
judgements pertaining to the lay-off of workers and employees by TEMIC
Telefunken microelectronic (Philippines) Inc. are exclusively obligations
of TEMIC Telefunken microelectronic (Philippines) Inc. and shall have no
financial impact on TEMIC Semiconductors (Phils.) Inc..
(16) Except as set forth on SCHEDULE 11.16 and except for each event of
non-compliance or violation which would not have a Material Adverse
Effect in excess of DM 2 million, (i) to the knowledge of the Sellers
during the three year period immediately preceding the date of this
Agreement, the Target Companies and the Subsidiaries have conducted their
respective businesses in material compliance with all material applicable
laws, and (ii) none of the Sellers or the Target Companies or the
Subsidiaries has received any written notice of violation of any
applicable regulation, ordinance or other law which is applicable and
material to the Business. Only as a clarification of the general rule
contained in subcl. (29), it is hereby stated that this subcl. (16) shall
not apply to subject matters of an area which can be the subject of a
representation and warranty where this Agreement contains a specific
warranty, in other words, this subcl. (16) shall not apply, e.g., to any
environmental matter, whether or not covered by subcl. (7), because
environmental warranty matters are conclusively dealt with in that subcl.
(7).
(17) The Target Companies and each of the Subsidiaries has complied in all
material respects with all specifications and other requirements of the
U.S. Government (including, but not limited to, the Department of
Defense and NASA) (the "U.S. Government"), made applicable by the U.S.
Government to the design and manufacturing of the products manufactured
by the Target Companies and each of the Subsidiaries and directly, or
with the knowledge of such Target Companies or Subsidiaries, sold to the
U.S. Government, except for all such instances or events of
non-compliance which would not, in the aggregate, have a Material
Adverse Effect in excess of DM 2 million. In addition, each of the
Target Companies and the Subsidiaries has complied in all material
respects with all (i) government or military
<PAGE>
specifications or requirements and Qualified Product Lists of the U.S.
Government published from time to time by the Defense Supply Center which
are applicable to products manufactured by the Business (the "Qualified
Product Lists") and (ii) established reliability, testing, quality
assurance or other similar procedures and/or regulations (including, but
not limited to, procurement regulations relating to the failure to comply
with such procedures and/or regulations) of the U.S. Government
incorporating such standards applicable to any products manufactured by
the Business prior to the Closing, except for all such instances or
events of non-compliance and all failures to establish such standards
which would not, in the aggregate, have a Material Adverse Effect in
excess of DM 2 million.
(18) The Final Balance Sheet shall contain provisions in respect of the
disputes/litigation matters with IBM, SGS-Thompson and Maxim in an
aggregate amount equal to the sum of DM 1.8 million and FF 28 million.
(19) SCHEDULE 11.19 contains a list of all contracts between the German Target
Company or any of its Subsidiaries, on the one hand, and the Sellers or
any company in which Daimler Benz AG holds a majority interest (in terms
of capital and votes), on the other hand, which (i) have a term that will
continue past the Transfer Date, and (ii) have resulted in annual payment
obligations of the German Target Company or any of its Subsidiaries in
excess of DM 1 million.
(20) Intentionally left blank.
(21) SCHEDULE 11.21 contains a true and complete list of the 10 major
customers and suppliers of the Business. Neither the Sellers nor the
Target Companies have any reason to believe that any of the three largest
customers listed on Schedule 11.21 will not, in all material respects,
continue its customer relationship with the Business after the Effective
Time.
(22) SCHEDULE 11.22 contains a true and complete list of the current directors
and officers (or the persons holding equivalent positions, where
applicable) of each Target Company and each Subsidiary.
<PAGE>
(23) SCHEDULE 11.23 contains a true and complete list of all major bank
accounts of each of the Target Companies.
(24) Sellers have previously made available to Purchasers true and complete
copies of the standard warranty provided by the Target Companies and the
Subsidiaries on sales orders and other related documents which are
delivered in connection with product sales. Except as set forth on
SCHEDULE 11.24, the Target Companies and the Subsidiaries' customary
practice is to include only such standard warranty.
(25) The business of Siliconix Inc. has been conducted in material compliance
with Section 30A of the Securities and Exchange Act of 1934, as amended,
to the extent it is applicable hereto.
(26) Subject to Section 6b and subject to completion of the drop down
transactions described in Sections 1 (1) and 6a, the assets, liabilities
and operations of the Target Companies and the Subsidiaries are
substantially the same as the assets, liabilities and operations of the
"TEMIC Semiconductor" business as it was previously conducted and offered
to the Purchasers and which formed the basis of the Pro Forma Balance
Sheet and the other Pro-Forma Financial Statements.
(27) Sellers have no reason to believe that the relationship with Tomen will
materially negatively change as a result of the consummation of the
transactions contemplated hereby.
(28) Except for the warranties set forth or referred to in this Section 11, or
expressly set forth elsewhere in this Agreement, the Sellers expressly
give no other warranties, whether express or implied; any such other
warranties are expressly excluded.
(29) The parties hereto are in agreement that if two or more of the
representations and warranties contained in this Agreement relate,
directly or indirectly, to the same subject matter, the more specific
representation and warranty shall be
<PAGE>
deemed to be the only representation and warranty with respect to such
subject matter and the Purchasers shall not have any indemnification
claim against either of the Sellers as a result of an inaccuracy of the
more general representation and warranty.
(30) It is not considered a misrepresentation or a breach of warranty if an
item of information is not set forth on the corresponding Schedule but
contained in another Schedule or elsewhere in this Agreement. All
Schedules to this Agreement setting forth exceptions to the
representations and warranties contained in this Agreement shall be
deemed to include information reflected in, and documents available as
part of, the most recent Form 10-K and the most recent proxy statement
filed by Siliconix Inc. with the SEC (as defined below), any statements,
reports, forms or other documents subsequently filed by Siliconix Inc.
with the SEC, or documents available from a public register in Germany.
(31) Circumstances and events which constitute a breach of a representation
and warranty and which are of a type that is required to be set forth on
the Final Balance Sheet in accordance with applicable accounting
principles, shall be set forth on the Final Balance Sheet (and thus have
an impact on the Final Purchase Price) and to that extent not give rise
to an additional claim under Section 14 (1) to the extent accrued for or
otherwise included in the Final Balance Sheet.
12.
WARRANTIES OF THE PURCHASER
The Purchasers and the Guarantor hereby jointly and severally represent and
warrant to the Sellers as follows:
(1) Each of the Purchasers and the Guarantor is a corporation or limited
liability company duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation and has all
requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as
<PAGE>
now being conducted, except where the failure to be so existing and in
good standing or to have such power or authority would not individually
or in the aggregate have a material adverse effect on the business,
financial condition or results of operations of the Purchasers or the
Guarantor, taken as a whole.
(2) Each of the Purchasers and the Guarantor has the requisite corporate
power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by each of the Purchasers and the Guarantor
and the consummation by each Purchaser and the Guarantor of the
transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action on the part of each Purchaser and the
Guarantor. This Agreement has been duly and validly executed and
delivered by each Purchaser and the Guarantor and, assuming the due
authorization, execution and delivery by the Sellers, constitutes a valid
and binding agreement of each Purchaser and the Guarantor, enforceable
against each Purchaser and the Guarantor in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting creditors'
rights generally.
(3) Except as set forth on SCHEDULE 12.3 and except for applicable
requirements of the HSR Act, the Exon-Florio Amendment, the German GWB,
EU Regulation 4064/89, the Swedish Competition Law, as well as any other
applicable antitrust provisions of other laws, and ss. 3 of the German
Currency Act (Wahrungsgesetz), each as amended, to the knowledge of the
Purchasers and the Guarantor, no filing with and no permit,
authorization, consent or approval of, any public body or authority is
necessary for the consummation by the Purchasers and the Guarantor of the
transactions contemplated by this Agreement. Neither the execution and
delivery of this Agreement by the Purchasers and the Guarantor nor the
consummation by the Purchasers and the Guarantor of the transactions
contemplated hereby nor compliance by the Purchasers and the Guarantor
with any of the provisions hereof will (i) conflict with or result in any
breach of any provision of the certificate of incorporation or bylaws (or
other similar charter documents) of either Purchaser or the Guarantor,
(ii) result in a violation or
<PAGE>
breach of, or constitute (with or without due notice or lapse of time or
both) a default, or give rise to any right of termination, cancellation
or acceleration, under any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, licence, contract, agreement or other
instrument or obligation to which either Purchaser, or the Guarantor or
any of their respective subsidiaries is a party or by which any of them
or any of their properties or assets may be bound or (iii) assuming that
the filings referred to in the first sentence of this subcl. (3) are duly
and timely made, to the knowledge of the Purchasers and the Guarantor,
violate any order, writ, injunction, decree, statute, treaty, rule or
regulation applicable to either Purchaser or the Guarantor, any of their
respective subsidiaries or any of their properties or assets; except, in
the case of clauses (ii) and (iii) of this sentence, for violations,
breaches or defaults which will not prevent, impair or materially delay
the transactions contemplated hereby.
(4) The Purchasers have, or have received a "highly confident letter" from a
financially responsible financial institution to obtain, all funds
necessary to consummate the transactions contemplated by this Agreement,
and to pay all related fees and expenses (the financing necessary to
obtain such funds being hereinafter referred to as the "FINANCING"). The
Purchasers have provided the Sellers with true and complete copies of
such "highly confident letter". It is the good faith and belief of the
Purchasers, as of the date hereof, that the Financing will be obtained,
and the Purchasers shall use their commercial best efforts to obtain the
Financing, including using their commercial best efforts to fulfil, or
cause the fulfilment of, any of the conditions thereto.
(5) Except for the warranties set forth or referred to in this Section 12, or
expressly set forth elsewhere in this Agreement, the Purchasers expressly
give no other warranties, whether express or implied; any such other
warranties are expressly excluded.
13.
CONDUCT OF BUSINESS UNTIL EFFECTIVE TIME
<PAGE>
(1) Except as contemplated by or mentioned or referred to in this Agreement
or its Schedules, during the period from the date of this Agreement to
the Effective Time, the Sellers will, to the extent permitted under
applicable laws, use their commercial best efforts to cause the Target
Companies and the Subsidiaries to conduct the Business according to their
ordinary and usual course of business in accordance with past practice
and to use commercially reasonable efforts to preserve substantially
intact their business organizations, to keep available the services of
their officers, employees and landlords and to maintain their current
relationships with suppliers, contractors, customers and others having
significant business relationships with them as well as with officials
and employees of government agencies and other entities which regulate or
affect the Business. Without limiting the generality of the foregoing,
and except as otherwise expressly provided in this Agreement, prior to
the Effective Time, without the prior consent of the Purchasers, to be
given in writing to the extent practicable, (which consent will not be
unreasonably withheld), the Sellers will, to the extent permitted under
applicable laws, use their best endeavours not to permit either Target
Company or any of the Subsidiaries to
a) amend its certificate of incorporation or bylaws (or other similar
charter documents) or partnership agreement, as the case may be;
b) authorize for issuance, issue, sell, deliver or agree or commit to
issue, sell or deliver (whether through the issuance or granting
of options, warrants, commitments, subscriptions, rights to
purchase or otherwise) any capital stock of any class or any other
securities of, or other ownership interests in, any of the Target
Companies or any of the Subsidiaries or amend any of the terms of
any such securities or agreements outstanding on the date hereof;
c) purchase or otherwise acquire, or propose to purchase or otherwise
acquire, directly or indirectly, any shares of its capital stock
or other ownership interests;
<PAGE>
d) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in
respect of its capital stock or other ownership interests, or
redeem or otherwise acquire any of its securities or other
ownership interests;
e) (i) except in the ordinary course of business consistent with
prior practice under existing lines of credit or reimbursement
agreements, incur or assume any long-term or short-term debt owing
to any unaffiliated third party; (ii) assume, guarantee, endorse
or otherwise become liable (whether directly, contingently or
otherwise) for the obligation of any other person except in the
ordinary course of business; or (iii) make any loans, advances or
capital contributions to, or investments in, any person that is
not a Subsidiary, except for the investment of cash in temporary
investments in the ordinary course of business consistent with
prior practice;
f) except in the ordinary course of business consistent with prior
practice and except as otherwise required by applicable law enter
into, adopt or amend any bonus, profit sharing, compensation,
severance, termination, stock option, stock appreciation right,
restricted stock, performance unit, pension retirement, deferred
compensation, employment or other employee benefit agreements,
trusts, plans, funds or other arrangements for the benefit or
welfare of any director, officer or employee, or (except, in the
case of non-executive employees, for normal increases in the
ordinary course of business that are consistent with past practice
and that, in the aggregate, do not result in a material increase
in benefits or compensation expense to the Target Companies or
Subsidiaries) increase in any manner the compensation or fringe
benefits of any director, officer or employee or pay any benefit
not required by any existing plan or arrangement (including,
without limitation, the granting of stock options, stock
appreciation rights, shares of restricted stock or performance
units) or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing;
<PAGE>
g) authorize, recommend, propose or announce an intention to enter
into any agreement (including any agreement in principle) with
respect to any merger, consolidation or business combination, any
acquisition of a material amount of assets or securities of any
other entity, or any disposition of a material amount of its own
assets or securities or any material change in its capitalization,
except for acquisitions of assets or businesses made in accordance
with the capital budgets in effect on the date of this Agreement;
h) except as permitted by clause (i) below, acquire, sell, lease,
encumber, transfer or dispose of any assets outside the ordinary
course of business or any assets which are material to any of the
Target Companies or any of the Subsidiaries or enter into any
material commitment or transaction outside the ordinary course of
business consistent with prior practice;
i) authorize or make any individual capital expenditure in excess of
DM 4 million except for obligations incurred prior to the date
hereof or pursuant to the capital budgets in effect on the date of
this Agreement;
j) make any tax elections or settle or compromise any income tax
liability or, except as required by law or applicable accounting
standards, change any accounting policies or procedures;
k) other than in the ordinary course of business consistent with
prior practice, waive any rights of substantial value or make any
payment, direct or indirect, of any material liability of any of
the Target Companies before the same comes due in accordance with
its terms; or
l) fail to maintain their existing insurance coverage of all types in
effect or, in the event any such coverage shall be terminated or
lapse, to the extent available at reasonable cost, procure
substantially similar substitute
<PAGE>
insurance policies which in all material respects are in at least
such amounts and against such risks as are currently covered by
such policies.
(m) enter into any new contract or arrangement other than in the
ordinary course of business consistent with prior practice.
(2) During the period from the date of this Agreement to the Effective Time,
the Sellers will cause the Target Companies to notify the Purchaser of
any significant change in the normal course of business or operations of
any of the Target Companies or any of the Subsidiaries and of any
governmental complaints, investigations or hearings (or communications
indicating that the same may be contemplated), or the institution or
threat or settlement of significant litigation, in each case involving
any of the Target Companies or any of the Subsidiaries, and to keep the
Purchaser fully informed of such events.
<PAGE>
14.
INDEMNIFICATION
(1) If and to the extent that one or several of the representations or
warranties given by the Sellers in this Agreement to the Purchasers
should be inaccurate, the Purchasers are entitled to claim restitution of
the warranted situation or, if and to the extent that this is not
possible or if and to the extent restitution is refused by Sellers, a
reduction of the Final Purchase Price. The claim for such a reduction
exists in the amount that is necessary to establish the situation as it
has been represented and warranted, or, if that is not possible, in the
amount which is inevitably necessary to make up for the foreseeable
direct damage directly attributable to the breach of warranty. In
determining the amount of damages, no missed profit (entgangener Gewinn)
or other consequential damage (mittelbarer oder Folgeschaden) shall be
included. If damage occurs in a Subsidiary which is not a wholly owned
subsidiary of the Sellers, the claim for the reduction of purchase price
shall be limited to the percentage of the Sellers' shareholding in such
company.
(2) Except as otherwise provided in this Agreement, the right of the
Purchasers to assert a claim against the Sellers under subcl. (1) above
or under any other provision or in connection with this Agreement shall
expire on March 31, 1999 (statute of limitation, Verjahrungsfrist).
Required and sufficient for complying with this period is the assertion
of a claim against each of the Sellers in writing setting forth
conclusively in reasonable detail the facts that support the claim and
specifying in detail the amount thereof. The assertion of a claim in this
manner constitutes an interruption (Unterbrechung) of the running of the
above term, for a period of six months, solely in respect of the claim
asserted and the factual basis therefor.
(3) During the period under subcl. (2) above the Purchasers agree to give
Sellers prompt notice, in form and substance as provided in subcl. (2)
above, of any event, or any written claim by a third party of which
either Purchaser, a Target
Company or a Subsidiary obtains knowledge, which could give rise to any
damage, liability, loss, cost or expense as to which it may request a
purchase price reduction under subcl. (1) of this Section in order to
provide Sellers with the opportunity to bring about the warranted
situation or to mitigate the damages, but the failure to give such prompt
notice shall not affect Purchasers' rights hereunder, except to the
extent the Sellers were materially and adversely prejudiced thereby.
(4) Notwithstanding subcl. (2) above
a) the statute of limitations for asserting any deficiencies in legal
title to the shares sold and transferred pursuant to this
Agreement shall be five years from December 31, 1997;
b) the statute of limitations for asserting a claim under Section 11
(17) hereof shall be the lesser of (i) 75 months from December 31,
1997, and (ii) the expiration of the applicable statute of
limitations for claims by the U.S. Government which results in a
liability under Section 11 (17);
c) the statute of limitations for asserting a claim under Section
11.11 c) hereof, to the extent such claim arises with respect to
ERISA Affiliates, shall be the lesser of (i) 60 months from
December 31, 1997 and (ii) the expiration of the applicable
statute of limitations for claims under ERISA pursuant to Section
413 of ERISA;
d) except to the extent provided for in subcl. c) above, the statute
of limitations for asserting a claim under Section 11.11 hereof
shall be 30 months from December 31, 1997;
e) the statute of limitations for asserting a claim under Section 10
hereof shall (i) in respect of Siliconix Inc. and its Subsidiaries
be three months after the applicable statue of limitations under
applicable law has run, and shall (ii) in
<PAGE>
respect of TS GmbH and its Subsidiaries be three months after the
date of the finality of the tax assessment after the respective
tax audit.
(5) The principles of offsetting benefits from damaging events (e.g.
insurance payments, offsets of reserves and valuation adjustments
established in the Final Balance Sheet, tax effects etc.) against the
damage (Vorteilsausgleichung) shall be applied. This shall include, but
not be limited to the following:
a) Provisions and reserves contained in the Final Balance Sheet shall
be applied.
b) If after the Effective Time any of the Target Companies or any of
the Subsidiaries should reduce the scope of its insurance
vis-a-vis the current status, it shall be assumed, for purposes of
applying the rules on offsetting losses against benefits from the
damaging events (Vorteilsausgleichung), that no such reduction of
the scope of insurance has occurred. This assumption shall not
apply to any reduction in the scope of insurance of any of the
Target Companies or the Subsidiaries (i) if such reduction is the
result of an extraordinary industry-wide increase of the premiums
charged for maintaining the relevant insurance coverage at current
levels and if, as a result of such increase, a substantial number
of businesses competing with the Business have similarly reduced
the scope of their respective insurance, or (ii) if a type of
insurance previously carried by a Target Company or a Subsidiary
is no longer available throughout the insurance industry.
(6) A claim under subcl. (1) can be raised only if and to the extent the
amount of a justified individual claim exceeds the minimum amount of DM
250,000 and if and to the extent the total amount of all individual
claims raised (if and to the extent they each exceed DM 250,000) exceeds
DM 7 million in the aggregate.
(7) The Sellers shall be liable for breaches of contract (default,
impossibility, other breach of contract (vertragliche Leistungsstorungen,
Verzug, Unmoglichkeit,
positive Vertragsverletzung) as well as under any and all other statutory
and contractual liability provisions (e.g. culpa in contrahendo, torts)
(aus allen anderen gesetzlichen oder vertraglichen Haftungstatbestanden,
z.B. culpa in contrahendo, unerlaubte Handlung) only if such breach was
caused by the Sellers, or either one of them, intentionally or with gross
negligence. If and to the extent permitted by applicable law, the
Sellers' liability is limited to reimbursement of the foreseeable direct
damage caused directly by the intentional or gross negligent act or
omission of the Sellers.
(8) Rescission because of error (Irrtumsanfechtung) and termination pursuant
to ss. 463 German Civil Code ("BGB") (Wandelung) are excluded. Not
excluded are only the statutory termination rights (gesetzliche
Rucktrittsrechte) pursuant to ss.ss. 323 et seq. BGB. Sellers on the one
side and Purchasers on the other side may only jointly exercise their
respective termination right.
(9) All other claims of the Purchasers against the Sellers under or in
connection with this Agreement are excluded, to the extent permitted
under applicable law, except as expressly provided in this Section 14.
(10) Except for any liability of Sellers pursuant to subcl. (14) below, and
any liability arising from a deficiency in legal title of the German
Common Stock or the U.S. Shares, and except for any compensation payable
by the Sellers pursuant to Section 6 (5), the Sellers' total liability to
pay damages under and in connection with this Agreement and its
consummation is limited to a maximum amount equal to 10 % of the
Preliminary Purchase Price.
(11) Claims relating to or resulting from warranties which are given
herein,,to the knowledge of ...." or "have no knowledge ...." or are in
some other way linked to "knowledge", can be asserted only if such
warranties in a provable way were given despite the actual, not deemed or
constructive, knowledge (tatsachliches, nicht zugerechnetes oder fiktives
Wissen) of the director(s) (Geschaftsfuhrer) of the warranting company,
of the inaccuracy of the warranty so given. The phrase "to the knowledge
of ....., there is no ......" or phrases of similar construction are
to be interpreted to mean that the party making the statement is not
aware of any facts which would make the statement inaccurate. Knowledge
of Messrs. Hans-Peter Eberhardt, Dr. Frank Heinricht, Dr. Gerhard Bolenz,
Richard Kulle, Michel Thouvenin, if any, shall be deemed to be knowledge
of the Sellers. The warranties which are given "to the knowledge" or
"have knowledge" or are in some other way linked to "knowledge" or "no
knowledge" are given by the person or persons after such person or
persons having conducted reasonable inquiries expected from a diligent
businessman (ordentlicher Geschaftsmann).
(12) If between the date of this Agreement and the Closing representations and
warranties given herein should turn out to be inaccurate to such an
extent and with such a significance that the circumstances resulting
therefrom make it absolutely unacceptable to the Purchasers to merely
have claims for breach of warranty or to expect that the Sellers will be
able to redress such claims, or if within this period an extraordinary
aggravating event of corresponding significance with consequences which
would be absolutely unacceptable should occur, the parties to this
Agreement shall negotiate with each other with the goal of reaching an
understanding and agreement on the changed circumstances (Sprechklausel).
It is hereby clarified that this subcl. (12) shall apply in circumstances
which are such that the concept of "Wegfall der Geschaftsgrundlage"
(subsequent disappearance of fundamental basis) would apply.
(13) The Sellers shall not be liable for an unintentional inaccuracy of a
representation or warranty to the extent that the inaccuracy has been
disclosed to the Purchaser by way of the information contained in this
Agreement, its Schedules, any of the documents described or referred to
in Section 11 (30) or any documents delivered to Purchasers prior to the
execution of and as confirmed in this Agreement (for example, the
documents referred to in Section 11 (11) hereof).
(14) If and to the extent either Target Company or any of the Subsidiaries
suffers any liability or incurs any costs or expenses relating to
environmental matters, whether covered by Section 11 (7) or any other
warranty of Sellers set forth in
<PAGE>
this Agreement, the only remedy of the Purchasers, in lieu of the first
sentence of Section 14 (1), shall be a compensation claim under the terms
and subject to the conditions set forth in paragraphs a) through d) of
this subcl. (14):
a) If and to the extent that a Target Company or a Subsidiary after
the Transfer Date, is ordered with final and binding effect by an
order, judgement or similar decree issued by a competent
governmental agency or court of law to eliminate Inherited
Environmental Liability (as defined hereinafter), and if the
relevant Target Company or Subsidiary or any of the Purchasers or
a company affiliated with a Purchaser has not taken the initiative
or otherwise promoted the issue of the order, judgement or similar
decree (compliance with duties to report, the failure of which is
subject to fines or penalties, shall not constitute an initiation
or promotion in the foregoing meaning) the Sellers shall indemnify
(in this context: freihalten) the relevant Target Company or
Subsidiary. The duty to indemnify shall exist only with respect to
costs of the measures necessary for the relevant Target Company or
Subsidiary to comply with the order, judgement or similar decree
(including any necessary investigation costs, attorneys' fees
and court costs arising in connection with the defense, if any).
(b) The obligation of Sellers pursuant to subcl. a) above shall exist
only with respect to costs for which subcl. a) above provides for
indemnification and only if and to the extent such costs, after
application of the principles set forth in subcl. (5) above,
exceed DM 3 million and shall be limited to 70 % of the exceeding
amount of such costs and shall not exceed DM 63 million in the
aggregate.
c) Notwithstanding subcl. (2) above, the statute of limitations for
asserting a claim for indemnification under this subcl. (14) shall
be 63 monthsfrom the Effective Time.
d) "Inherited Environmental Liability" means any Environmental Claim
resulting from accumulations of Hazardous Materials existing on
the day of
<PAGE>
Closing in the ground, in buildings, in other components of real
property or in ground water which under relevant provisions of
Environmental Law are not allowed to be present and the
elimination of which can legally be demanded by a governmental
agency or a third party.
(15) It is hereby clarified that the costs of the closing down (except
possible environmental costs) of the 4-inch-fab in Santa Clara and the
relocation thereof to Southeast Asia shall not fall under any warranty or
indemnification provision in this Agreement.
(16) In Section 7 (3) it has been agreed that the Final Purchase Price shall
in no event be more than 115 % of the Preliminary Purchase Price. The
Purchasers hereby agree that if the Final Purchase Price would be higher
without such limit, any payment obligations of the Sellers vis-a-vis the
Purchasers in connection with this Agreement up to such excess amount
shall be set off against such excess amount.
15.
COOPERATION, ACCESS TO INFORMATION
(1) Prior to the Effective Time and to the extent permitted by applicable
law, the Sellers will cause the Target Companies to afford to the
Purchaser and its authorized representatives reasonable access during
normal business hours to all office, production, engineering and service
facilities and other business properties and to all books and records of
the Target Companies and the Subsidiaries, will permit the Purchaser to
make such inspections thereof, during normal business hours, as the
Purchaser may reasonably request and will cause the officers of the
Target Companies and the Subsidiaries to furnish the Purchaser with such
financial and operating and military testing data and other information
with respect to the Business, assets, properties and personnel of the
Target Companies and the Subsidiaries as the Purchaser may from time to
time reasonably request; provided, however, that any such investigation
shall be
conducted in such a manner as not to interfere unreasonably with the
operation of the business of the Target Companies and the Subsidiaries.
Prior to the Effective Time, the Sellers will, to the extent permitted by
applicable law, cause the Target Companies to afford the Purchasers and
their authorized representatives access to major distributors, customers
and vendors of the Target Companies deemed necessary by the Purchasers
and the Sellers to facilitate the transfer of the Business, provided that
the Purchasers or their authorized representatives shall have such access
only if accompanied by an authorized representative of Sellers.
(2) The Purchaser shall hold, and shall cause its officers, directors,
employees, representatives, advisors and agents ("PURCHASER'S
REPRESENTATIVES") to hold in strict confidence in accordance with the
terms of the Confidentiality Agreement dated September 10, 1997, between
Goldman, Sachs & Co. oHG ("GOLDMAN SACHS") for itself and on behalf of
Daimler-Benz Aktiengesellschaft ("DAIMLER BENZ") (the "CONFIDENTIALITY
AGREEMENT") a copy of which is attached hereto as EXHIBIT 15.2, all
documents and information furnished to the Purchaser by Goldman Sachs,
the Sellers, any of the Target Companies or any of the Subsidiaries or
their respective representatives, consultants or advisors in connection
with the transactions contemplated by this Agreement.
(3) In the event of the termination of this Agreement, the Purchaser shall,
and shall cause each of the Purchaser's Representatives to, return
promptly or destroy every document furnished to them by Goldman Sachs,
the Sellers, the Target Companies or Subsidiaries in connection with the
transactions contemplated hereby and any copies thereof, which may have
been made, other than documents filed with the SEC or other government
agencies which are otherwise publicly available.
(4) Subject to the terms and conditions herein provided, each of the parties
hereto agrees to use its commercial best efforts to take, or cause to be
taken, all action, and to do, or cause to be done, all things necessary,
proper or advisable under
<PAGE>
applicable laws and regulations to consummate and effect the transactions
contemplated by this Agreement, including, without limitation, obtaining
all required consents and approvals, making all required filings and
applications and complying with or responding to any requests by
governmental agencies. For purposes of the foregoing sentence, the
obligation of the Sellers and the Purchaser to use "best efforts" to
obtain waivers, consents and approvals to loan agreements, leases and
other contracts shall not include any obligation to agree to an adverse
modification of the terms of such documents or to prepay or to incur
additional obligations to such other parties.
(5) From time to time the Sellers will, or will cause the Target Companies
and the Subsidiaries to, execute and deliver such documents to the
Purchaser as the Purchaser may reasonably request in order more
effectively to consummate the transactions contemplated hereby, to the
extent permitted under applicable laws. From time to time the Purchaser
will, at its own expense, execute and deliver such documents as the
Sellers, the Target Companies or the Subsidiaries may reasonably request
in order more effectively to consummate the transactions contemplated
hereby. In case at any time after the Effective Time any further action
is necessary or desirable to carry out the purposes of this Agreement,
each party to this Agreement will take or cause its appropriate officers
and directors to take all such necessary or desirable actions.
(6) The Purchaser and the Sellers will consult with each other before issuing
any press release or otherwise making any public statements with respect
to this Agreement or the transactions contemplated by this Agreement, and
neither the Sellers nor the Purchaser shall issue any such press release
or make any such public statement prior to such consultation, except as
may be required by law or by obligations pursuant to any listing
agreement with any national securities exchange or the National
Association of Securities Dealers, Inc. in the U.S. or any rules or
regulations of a securities exchange in any other country upon which the
securities of such issuer are traded.
16.
FILINGS, COMPLIANCE WITH ANTITRUST LAWS
(1) The Purchasers and the Sellers shall use their best efforts to file, or
cause their respective "ultimate parent entity" to file, as soon as
practicable, with the FTC and the Department of Justice pursuant to the
HSR Act and with the German Federal Cartel Office pursuant to the German
GWB and any other antitrust or cartel authority having jurisdiction over
the transactions contemplated hereby all requisite documents and
notifications in connection with the transactions contemplated by this
Agreement and to respond as promptly as practicable to all inquiries or
requests for additional information or documentation received from the
FTC, the Department of Justice, the German Federal Cartel Office or any
other governmental authority in connection with antitrust matters. The
Purchaser and the Sellers will coordinate and cooperate with one another
in exchanging such information and reasonable assistance as another may
request in connection with all of the foregoing.
(2) In order to consummate the transactions contemplated by this Agreement,
the Purchaser shall promptly take all steps (including executing
agreements and submitting to judicial or administrative orders) to secure
all domestic and foreign government antitrust and cartel clearances
(including using its best efforts to avoid or set aside any preliminary
or permanent injunction or other order of any federal or state court of
competent jurisdiction or other governmental authority, including,
without limitation, and to the fullest extent necessary to secure such
government antitrust and cartel clearances, agreeing to divest of such of
the Target Companies' and the Subsidiaries' assets and businesses (or, in
lieu thereof, approximately equivalent assets and businesses of the
Purchaser) as are necessary to permit the Purchaser otherwise fully to
consummate the transactions contemplated by this Agreement, including
holding separate such assets and businesses pending any such divestiture,
or accepting other conditions, restrictions, limitations or agreements
affecting the Purchaser's exercise of full rights of ownership of the
shares or the assets and business of the Target Companies and the
Subsidiaries.
<PAGE>
(3) The Sellers shall have the continuing obligation promptly to supplement
or amend the Schedules delivered by the Sellers pursuant to this
Agreement, and the Purchaser shall have the continuing obligation
promptly to supplement or amend the Schedules delivered by the Purchaser
pursuant to this Agreement, with respect to any matter hereafter arising
or discovered, which, if existing or known at the date hereof, would have
been required to be set forth or described in such Schedules.
17.
PERFORMANCE GUARANTEES, REPAYMENT OF IC ACCOUNTS
(1) In order to support the business of the Target Companies and the
Subsidiaries, Daimler Benz and/or companies affiliated with it (the
"DAIMLER BENZ COMPANIES") have issued performance guarantees,
performance bonds, comfort letters, letters of credit and similar
instruments (collectively the "PERFORMANCE GUARANTEES"), or have entered
into agreements or arrangements with financial institutions to provide
loans, other finance or Performance Guarantees (the "GUARANTEE
ARRANGEMENTS") to the Target Companies and the Subsidiaries or for the
benefit of their customers or creditors. The presently outstanding
Performance Guarantees and Guarantee Arrangements (including current
amounts) are set forth on Schedule 17.1.
(2) Subject to subcl. (5) below, on or before the date of Closing, the
Purchaser shall enter into one or more assignment and assumption
agreements in form and substance satisfactory to the Daimler Benz
Companies, the Sellers and their counsel, with the Daimler Benz Companies
and the issuer of such Performance Guarantees or Guarantee Arrangements
and the beneficiaries thereof pursuant to which the Purchaser shall
assume all liabilities and obligations of the Daimler-Benz Companies in
respect of all Performance Guarantees and Guarantee Arrangements
outstanding at the Effective Time (collectively the "ASSIGNMENT AND
ASSUMPTION AGREEMENTS"). Subject to subcl. (5) below, the Purchasers
<PAGE>
undertake with the Sellers to deliver such bank guarantees or other
agreements or instruments from reputable financial institutions, or such
other collateral, and to do such things and deliver such additional
documents as the issuers and the beneficiaries of the Performance
Guarantees or the parties to the Guarantee Arrangements in their sole
discretion may reasonably require in order to release and discharge the
Daimler Benz Companies from all liabilities and obligations arising out
of or relating to the Performance Guarantees or the Guarantee
Arrangements for the time from the Transfer Date on.
(3) If and to the extent that the consent of the issuer or issuers and of the
beneficiary or beneficiaries of any such Performance Guarantees or
Guarantee Arrangements with the release of the Daimler Benz Companies
from any liabilities or obligations arising out of or relating to the
Performance Guarantees or Guarantee Arrangements will not have been
obtained on or before the Effective Time,
a) the Assignment and Assumption Agreements shall be entered into
promptly after the Effective Time;
b) the Purchaser shall,
(i) with effect from, on and after the Transfer Date indemnify
the Daimler Benz Companies and the Sellers against and hold
themfree and harmless (aa) from any liabilities and
obligations and claims raised against them arising out of
or relating to the Performance Guarantees and the Guarantee
Arrangements, including, but not limited to, reasonable
costs of counsel and other advisors and representatives and
costs and expenses of litigation, and (bb) from all losses
and damages, costs and expenses (incl. reasonable
attorney's fees and expenses) suffered by the Daimler Benz
Companies and the Sellers resulting from the fact that they
were not released and discharged from liabilities and
obligations arising out of or relating to
<PAGE>
the Performance Guarantees and the Guarantee Arrangements
as contemplated by Section 17 (2) above,
(ii) upon first written demand by the Daimler Benz Companies or
one of the Sellers reimburse the Daimler Benz Companies for
any payments which it had to make or advance on account of
any liabilities or obligations arising out of or relating
to the Performance Guarantees or the Guarantee
Arrangements;
c) the Purchaser shall, at Closing, for purposes of securing any and
all possible claims which the Daimler Benz Companies may then or
thereafter have against the Purchaser pursuant to subcl. b) above,
deliver to Sellers, on behalf of the Daimler Benz Companies, such
bank guarantees or other agreements or instruments from reputable
financial institutions, or such other collateral, as the Sellers,
in connection with the Daimler Benz Companies, in their sole
reasonable discretion may require.
(4) As of the Transfer Date, the cash concentration procedures presently in
operation with respect to certain of the Target Companies and the
Subsidiaries will be discontinued and all financial indebtedness of the
Target Companies and the Subsidiaries with Daimler Benz existing on the
Transfer Date shall be settled.
a) Daimler Benz will declare due for repayment on the Transfer
Datethe loan granted by it to TS GmbH (approximately DM 100
million), and any other loans which may have been extended by
Daimler Benz to either of the Target Companies or the
Subsidiaries, and include the amount or amounts thereof, including
accrued interest thereon, in TS GmbH's DM IC account with Daimler
Benz. If such loan is denominated in a currency other than
deutsche marks, the conversion set forth in subcl. b) below shall
be employed, provided that a loan extended by Daimler Benz Capital
Inc. ("DBCI") in USD to Siliconix Inc. or any of the Subsidiaries
shall not be converted but entered directly into Siliconix Inc.'s
USD IC account maintained with DBCI.
<PAGE>
The foreign exchange hedging transactions concluded by TEMIC
Semiconductors Itzehoe GmbH with Daimler Benz AG and specified on
SCHEDULE 17.4A shall be closed out and settled in cash,
irrespective of their original maturity dates. The close out shall
commence one business day prior to the day of the Effective Time.
The settlement date shall be the Transfer Date. On the close-out
date, each existing forward contract shall be valued at the
respective market price. The current market price shall be
computed from the official Frankfurt fixing rate (Mittelkurs an
der Frankfurter Borse) on the close-out date for the respective
currency, adjusted for the forward premium/discount applicable to
the respective maturity date of the forward contracts. The
differential amounts calculated from the comparison between the
respective market value and the value of the hedging transaction
originally concluded shall be discounted to the settlement date.
The discounted differentials shall be aggregated to the total
offsetting amount and shall be debited/credited to the DM IC
account of TS GmbH prior to the final settlement of this account.
b) Daimler Benz will, on the Transfer Date, close all foreign
currency IC accounts of TS GmbH and of those of the Subsidiaries
for which it maintains such IC accounts in Germany. The foreign
currency amounts will be converted to deutsche marks at the
official quoted exchange rate (amtlicher Mittelkurs) in Frankfurt
am Main on the date of the Effective Time. The amounts converted
into German currency will be entered into the DM IC accounts of TS
GmbH and of the Subsidiaries concerned.
c) Three banking days prior to Closing, the Sellers or Daimler Benz
AG shall notify the Purchasers of
- the likely balance in the DM IC accounts of TS GmbH and the
Subsidiaries concerned kept with Daimler Benz AG as of the
Transfer Date, and
<PAGE>
- the likely balance in the USD IC account of Siliconix Inc.
kept with DBCI, as of the Transfer Date.
d) The Sellers undertake with the Purchasers that Daimler Benz AG and
DBCI, respectively, shall, within two Business Days after the
Closing account for, as of the Transfer Date,
- the aggregate amount of the actual balances in the DM IC
accounts, and
- the amount of the actual balance in the USD IC account.
e) The Sellers undertake with the Purchasers that Daimler Benz AG
shall, within two Business Days after the Closing, use the USD
payment received by it pursuant to Section 9 (7)
- to settle the actual balance in the USD IC account, and
- to settle the actual aggregate balance in the DM IC
accounts, applying for conversion the official quoted
exchange rate (amtlicher Mittelkurs) in Frankfurt on the
day of Closing.
The interest rate on the amounts to be so settled, applying from
the day of Closing to the day of settlement, shall be the same as
the one which applies to the payment received by Daimler Benz AG
pursuant to Section 9 (7).
f) Any difference between the amount received by Daimler Benz AG
pursuant to Section 9 (7) and the amounts required for the
settlements pursuant to subcl. e) shall be settled between Daimler
Benz AG and the Purchasers by repayment or additional payment, as
the case may be, together with interest thereon at FIONA from the
date of Closing.
<PAGE>
(5) Daimler Benz AG may notify the Sellers, preferably no later than 10 days
prior to the day of Closing, of bank loans and similar financial
indebtedness of a type which is capable of being repaid ("EXTERNAL BANK
DEBT") of the Target Companies and the Subsidiaries which is secured by
Guarantee Arrangements. One week prior to the day of Closing the
Purchasers shall deliver to Daimler Benz AG all such documents which may
be reasonably required to replace from the Closing on such Guarantee
Arrangements, in form and substance acceptable to the financial
institutions which have extended the External Bank Debt, for the purpose
of continuing the External Bank Debt without any further obligation of
Daimler Benz AG. In case such documents will not be delivered, Daimler
Benz AG shall be entitled to replace the External Bank Debt by IC loans
to be entered in the DM IC accounts or the USD IC account, respectively,
which will be settled pursuant to subcl. (4) above.
18.
SILICONIX INC.
(1) Siliconix Inc. has filed all required statements, forms, reports and
other documents with the Securities and Exchange Commission (the "SEC")
since January 1, 1995 (collectively, the "SEC Reports") all of which (as
they may have been amended prior to the date hereof) as of their
respective filing dates complied in all material respects with all
applicable requirements of the Securities Act of 1993, as amended (the
"Securities Act"), and the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules and regulations thereunder. No SEC
Report contained, as of its filing date, any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading. Each of the balance sheets (including the related notes)
included in the SEC Reports fairly represents the consolidated financial
position of Siliconix Inc. and its Subsidiaries as of the respective
dates thereof, and the other related financial statements (including the
related notes) included therein fairly represent the results of operation
and cash flows for the respective fiscal periods then ended, except, in
<PAGE>
the case of interim financial statements, for normal year-end audit
adjustments. Each of the financial statements (including the related
notes) included in the SEC Reports has been prepared in accordance with
U.S. generally accepted accounting principles consistently applied during
the period involved, except as otherwise noted therein, and, in the case
of interim financial statements, subject to normal year-end adjustments
and the absence of notes.
(2) For a period of two (2) years after the Effective Time, neither the
Purchasers nor any affiliate of the Purchasers shall acquire, or offer to
acquire, beneficial ownership of any shares of Siliconix Common Stock
other than the U.S. Shares, except (i) pursuant to a tender offer made in
conformity with the Exchange Act and the rules and regulations
promulgated thereunder, including without limitation Regulation 14D, in
which the price per share paid is not less than an amount per share in
cash equal to the purchase price per share paid by the Purchasers for the
U.S. Shares pursuant to this Agreement and as a result of which the
Purchaser becomes the beneficial owner of not less than 95 % of all
outstanding shares of Siliconix Common Stock, or (ii) pursuant to a
merger transaction approved by the Board in which the price per share
paid is not less thanan amount per share in cash equal to the purchase
price per share paid by the Purchasers for the U.S. Shares pursuant to
this Agreement.
19.
OTHER COVENANTS
(1) The Purchaser covenants and agrees that it shall file promptly the
application for approval pursuant to ss. 3 Wahrungsgesetz.
(2) Licensing of intellectual property rights (not including names and
trademarks)
a) On or before the Closing, Sellers shall cause Licentia
Patent-Verwaltungs-Gesellschaft mbH and TS GmbH to enter into a
license agreement with respect to the intellectual property rights
listed on SCHEDULE 19.2A,
<PAGE>
substantially in the form of the draft agreement attached to
Schedule 19.2a.
b) On or before the Closing, Sellers shall cause Daimler Benz AG and
TS GmbH to enter into a cross license agreement with respect to
the intellectual property rights listed on SCHEDULE 19.2B,
substantially in the form of the draft agreement attached to
Schedule 19.2b.
c) On or before the Closing, the German Seller shall, and shall cause
TS GmbH to, enter into a cross license agreement with respect to
certain intellectual property rights, substantially in the form of
the draft agreement attached to SCHEDULE 19.2C.
(3) Mutual "favored vendor" status:
a) German Seller contemplates that, for a period of not less than one
year from the date of this Agreement, it will purchase its
requirements of goods manufactured by the Target Companies and the
Subsidiaries, provided that such goods are offered on competitive
terms and conditions, including, without limitation, competitive
quality and pricing.
b) Purchasers contemplate that, for a period of not less than one
year from the date of this Agreement, they will purchase, and
cause the Target Companies, the Subsidiaries and other affiliates
to purchase, their requirements of goods manufactured by the
German Seller and its subsidiaries and affiliates, provided that
such goods are offered on competitive terms and conditions,
including, without limitation, competitive quality and pricing.
(4) Non-compete covenant
a) Subject to subcl. b) below, Sellers hereby agree that for a period
of 24 months following the date of this Agreement (the "RESTRICTED
PERIOD") Sellers shall not, and shall cause their affiliates and
subsidiaries not to:
<PAGE>
(i) engage in developing, producing, selling, marketing or
distributing products competing with the current major
products of the Business;
(ii) have any controlling ownership or equity interest in any
business, entity or enterprise that engages in a material
manner in a business competing with the Business within the
Territory (as hereinafter defined); or
(iii) solicit the employment of any person who at the time is an
employee of the Business (other than one who resigns
voluntarily prior to any such solicitation or is terminated
by the Business after the Closing).
b) Notwithstanding anything to the contrary contained in subcl. a)
above, this agreement is not intended to and shall not be
construed as prohibiting either Seller or any of its affiliates
from:
(i) engaging in and continuing any activity presently conducted
by either of the Sellers or any of their affiliates which
relates to the development, production, selling, marketing
or distribution of products competing with the products of
the Business, and the activities pursuant to subcls. (9)
and (10) below; or
(ii) acquiring the beneficial ownership of less than 10% of the
equity securities of any publicly traded corporation; or
(iii) acquiring any business, entity or enterprise which, as an
incidental portion of its business, engages in a business
which competes with the Business, provided, however, that
the Sellers shall (i) notify Purchasers of a relevant
acquisition not later than 45 days after the date of
completion of the acquisition, (ii) refrain from any
negotiations with any third party before having bona fide
discussions with the Purchasers as to the possibility of
selling the competing portion of the acquired
<PAGE>
business, entity or enterprise on reasonable arm's length
terms and (iii) if terms cannot be agreed within 90 days
from the date of notification of the Purchasers, uses
commercial best efforts to dispose of the acquired
competing business (or procure that such business is
disposed of) in accordance with fair market terms to a
third party within 12 months of the acquisition, not to
exceed the Restricted Period.
c) For purposes of this Agreement, the ("TERRITORY") shall mean any
state or territory of the United States and any foreign country or
any foreign territory.
(5) Research work at Daimler Benz FT
a) The German Seller has commissioned research work from Daimler Benz
[FT] to be performed in 1998. The work is described in the German
Seller's letter dated November 11, 1997, a copy of which is
attached hereto as EXHIBIT 19.5. The German Seller shall transfer
to TS GmbH, and shall cause TS GmbH to accept, and Daimler Benz AG
to consent to such transfer, the research commissioned by the
German Seller.
b) Daimler Benz AG has assured TS GmbH of its availability for
further research work for TS GmbH in 1999 by a letter a copy of
which is attached as EXHIBIT 19.5.
(6) If in connection with the drop down by the German Seller referred to in
Section 1 (1) and/or the drop down by Philippines old Inc. referred to in
Section 6a, any asset, liability or contractual relationship which
clearly and obviously belongs to the Business within the meaning of
Sections 1 (9) and 11 (26) was, by error or other mistake, not included
in the drop down (hereinafter referred to as a "Missing Asset"), the
Sellers shall cause such Missing Asset to be transferred to the receiving
party (TS GmbH or TSP Inc.). If the Missing Asset, had it been included
in the relevant drop down, would have been considered in preparing the
Final Balance Sheet and, consequently, would have had an impact on the
Final Purchase Price, the Final Purchase Price shall be adjusted
accordingly.
<PAGE>
(7) If at any time after the Closing it is anticipated that the German Seller
will cease to exist as a separate legal entity or cease to be a member of
the Daimler-Benz consolidated group, Daimler-Benz AG may request the
Purchasers to release, and the Purchasers hereby agree that they will
release, the German Seller from any and all present and future liability
and contingent liability arising out of or in connection with this
Agreement if Daimler-Benz AG agrees to assume responsibility for any such
actual or potential liability of the German Seller.
(8) Names and trademarks Telefunken and TEMIC
a) Names
aa) Neither the Purchasers nor any of the Target Companies or
the Subsidiaries shall be entitled to continue the use of
the name Telefunken in any form or context or place, in
particular not as part of a firm name of a Target Company
or a Subsidiary. The Purchasers and the Sellers agree that
the name of the Austrian Subsidiary shall be changed
without undue delay after the date of this Agreement and
that the Austrian Subsidiary shall change its firm name to
"TEMIC Semiconductor (Austria) Ges.m.b.H".
bb) The Purchasers, the Target Companies and the Subsidiaries
shall be entitled to use the name TEMIC in their firm
names, provided, however, that TEMIC may be used only in
direct connection with the term Semiconductor so as to read
"TEMIC Semiconductor", pursuant to a licence agreement to
be entered into substantially in the form and with the
contents of the standard name and trademark licence
agreement attached as EXHIBIT 19.9A.
Duration: 10 years from January 1, 1998, termination upon
change of control;
Territory: worldwide;
Royalty: free.
<PAGE>
b) Trademarks Telefunken
The right to use the trademarks "Telefunken", "Telefunken Star"
and "TFK" shall be licensed to TS GmbH with the right to grant
sub-licenses to the other Target Company and the Subsidiaries,
substantially in the form and substance of the standard trademark
license agreement attached hereto as EXHIBIT 19.9B.
Licensed products: Semiconductor components of the following types
and classes: All types and classes of transistors, diodes,
integrated circuits and opto-electronic semiconductor components;
not including, however, semiconductor components based on HgCdTe
material for night vision systems, semiconductor sensor components
and microwave- and high-frequency-components based on GaAs
material (hereinafter the "Product Scope").
Territory: Worldwide
Duration: 10 years, from January 1, 1998, Licensee may terminate
after 5 years, termination in case of change of control
Royalty: free for 5 years, thereafter 0,8 %.
c) Trademark "TEMIC"
The right to use the trademark "TEMIC" shall be licensed to TS
GmbH with the right to grant sub-licenses to the other Target
Companies and the Subsidiaries, substantially in the form of the
standard name and trademark license agreement attached to this
Agreement as Exhibit 19.9a. Licensed products: Product Scope
Territory: Worldwide
Duration: 10 years from January 1, 1998, termination in case of
change of control
Royalty: free.
<PAGE>
(9) Development of Competing Products for Research Purposes
The Purchasers agree that the research divisions of Daimler Benz AG and
its affiliates (for purposes of this subcl. (9) and subcl. (10) below
"Daimler Benz") shall continue to have the unrestricted right to work in
the area of the development and manufacture of circuits, using silicones,
silicon germanium and related substances, for applications in the area of
millimeter wave technology for Daimler Benz's own use. Daimler Benz shall
also have the right to manufacture, for its own use circuits in the
micro/millimeter wave area. Daimler Benz may continue to obtain research
funding from the German Federal Government (primarily, BMBF, BMVg and
related agencies).
(10) Specific semiconductor products/designs including the know-how pertaining
thereto which in the past were developed by TEMIC Semiconductor on behalf
of and paid for by Daimler Benz, and at present are being, and in the
future will be, developed by TS GmbH, exclusively for and at the expense
of Daimler Benz, may also in the future be used, manufactured, delivered
or otherwise disposed of exclusively for, to or by Daimler Benz . All
rights in and pertaining to such semiconductor products/design belong
exclusively to Daimler Benz The Sellers shall cause Daimler Benz to enter
into good-faith negotiations with TS GmbH with a view towards Daimler
Benz licensing all or part of such rights to TS GmbH at terms and
conditions to be agreed upon.
20.
LIMITATION OF PURCHASERS' LIABILITY IN CASE OF NON-CLOSING
(1) If the Purchasers do not close the transactions contemplated by this
Agreement on the day on which the Closing is to occur as required
pursuant to the provisions of this Agreement, for whatever reasons, the
Sellers shall be released from all obligations towards the Purchasers
under and in connection with this Agreement, and the Purchasers and the
Guarantor, as joint and several debtors, shall pay in immediately
available funds (i) the amount of DM30,000,000 (in
<PAGE>
words: Deutsche Mark thirty million) (the "Compensation Amount") and (ii)
the Ericsson Amount (as defined below) (collectively, the " Compensation
Payment"). The Compensation Payment is under German Law an
"Ersetzungsbefugnis".
a) If pursuant to Section 6b Ericsson has purchased or is entitled to
purchase the DASA Shares for a purchase price of less than DM 20
million, the "Ericsson Amount" shall be the difference between
such purchase price and DM 20 million. If pursuant to Section 6b,
Ericsson has sold, or is entitled to sell, its shares in Dialogue
Ltd. to Delengate Ltd., DASA, TS GmbH or another company of the
Daimler-Benz Group for a purchase price in excess of DM 1,590,842,
the "Ericsson Amount" shall be the difference between such
purchase price and DM 1,590,842 million.
b) The Compensation Payment shall bear interest at the rate of 8 %
p.a. from March 1, 1998 up to and including the day of receipt by
the Sellers of the Compensation Amount.
21.
MISCELLANEOUS
(1) The Purchasers are part of the Vishay-Group. The Guarantor is
participating in this Agreement for the purpose of ensuring the Sellers
that the Purchasers will comply in a proper and timely manner with their
obligations to the Sellers from and in connection with this Agreement.
The Sellers are jointly and severally liable to the Purchasers (which are
joint creditors (Gesamtglaubiger)) for claims from or in connection with
this Agreement, and the Purchasers and the Guarantor are jointly and
severally liable to the Sellers (which are joint creditors
(Gesamtglaubiger)) for claims from or in connection with this Agreement.
(2) This Agreement may be amended, modified or supplemented only by written
Agreement of the parties hereto, unless a more stringent form is required
by applicable law.
<PAGE>
(3) Except as otherwise provided in this Agreement, any failure of any of the
parties to comply with any obligation, covenant, agreement or condition
herein may be waived by the party or parties entitled to the benefits
thereof only by a written instrument signed by the party granting such
waiver, but such waiver or failure to insist upon strict compliance with
any such obligation, covenant, agreement or condition shall not operate
as a waiver of any other obligation, covenant, agreement or condition or
any subsequent or other failure. Whenever this Agreement requires or
permits consent by or on behalf of any party hereto, such consent shall
be given in writing in a manner consistent with the requirements for a
waiver of compliance as set forth herein.
(4) If one or several provisions of this Agreement should be or become
invalid or unenforceable, the remaining provisions hereof shall not be
affected thereby. The invalid or unenforceable provision shall be deemed
to be replaced by such valid or enforceable provision as the parties
hereto would have chosen upon entering into this Agreement in order to
reach the commercial effect of the provision to be replaced if they had
foreseen the invalidity or unenforceability at that time. The foregoing
shall also apply to matters as to which this Agreement is silent (Lucke
im Vertrag). If a provision of this Agreement should be held invalid by a
competent court or arbitration tribunal because of the scope of its
coverage (such as territory, subject matter, time period or amount), said
provision shall not be deemed to be completely invalid but shall be
deemed to be valid with the permissible scope that is nearest to the
originally agreed-upon scope.
(5) The Confidentiality Agreement, the Arbitration Agreement (as hereinafter
defined) and this Agreement, including all Schedules and Exhibits
thereto, constitute the entire agreement and understanding of the parties
hereto in respect of the transaction contemplated by this Agreement and
supersede all other prior agreements and understandings, both written and
oral, among the parties or among or between any of them with respect to
such transactions, provided, however, that such prior agreements and
understandings may to the extent necessary and appropriate be used in
interpretation of this Agreement.
<PAGE>
There are no restrictions, promises, representations, warranties,
covenants or undertakings, other than those expressly set forth or
referred to herein.
(6) Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by either of the parties hereto without the
prior written consent of the other party.
(7) Except for fees payable by Daimler Benz AG to Goldman Sachs, the Sellers
hereby represent and warrant to the Purchasers with respect to the
Sellers and the Target Companies and the Subsidiaries, and the Purchasers
and the Guarantor hereby represent and warrant to the Sellers with
respect to the Purchasers and the Guarantor, that no person or entity is
entitled to receive from any of the Sellers, the Purchasers or the
Guarantor, respectively, any investment banking, brokerage or finder's
fees or commissions or fees for financial consulting or financial
advisory services in connection with this Agreement or the transactions
contemplated hereby.
(8) All notices and other communications hereunder shall be in writing,
unless a stricter form is required by applicable law. Notices and
communications shall be deemed to have been received by the receiving
party (i) on the date delivered if delivered in person; (ii) on the date
of the transmission if sent by facsimile to the addresses set forth
below; (iii) on the day following the date of dispatch if sent by
overnight courier; and (iv) five days after mailing if sent by registered
or certified mail (return receipt requested). The receiving party has the
right to prove that actual receipt occurred at a later date. Notices and
communications shall be sent only in the foregoing manner. Except in the
case of personal delivery, a further condition to the effectiveness of
receipt shall be that the notice or communication be sent to the
following addresses, or to such other addresses of which a party may have
informed the other party from time to time, which change of address shall
be effective only when received by the other parties:
a) If to the Purchasers:
Vishay Intertechnology, Inc.
63, Lincoln Highway
<PAGE>
Malvern, PA 19355, U.S.A.
Telephone: (610) 644-1300
Facsimile: (610) 296-0657
Attention: Avi D. Eden
With a copy to each of:
1. Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, NY 10022, U.S.A.
Telephone: (212) 715-9100
Facsimile: (212) 715-8000
Attention: Mark B. Segall, Esq,.
2. Hasche Eschenlohr Peltzer
Riesenkampff Fischotter
Niedenau 68
60325 Frankfurt am Main
Telephone: (069) 71 70 10
Facsimile: (069) 71 70 11 10
Attention: Dr. Harald Jung
b) If to the Sellers:
TEMIC TELEFUNKEN microelectronic GmbH
Theresienstra(beta)e 2
74072 Heilbronn
Telephone: (07131) 67 29 43
Facsimile: (07131) 67 24 89
Attention: Geschaftsfuhrung
Daimler-Benz Technology Corporation
375 Park Avenue, Suite 3001
New York, N.Y. 10152, U.S.A.
Telephone: (212) 909-9700
Facsimile: (212) 308-4252
Attention: President
With a copy to each of:
1. Daimler Benz Aktiengesellschaft
Konzernentwicklung
70546 Stuttgart
Telephone: (0711) 17-9 23 46
Facsimile: (0711) 17-9 44 13
Attention: Dr. Matthias Henke
2. Skadden Arps Slate Meagher & Flom LLP
919 Third Avenue
New York, NY 10022, U.S.A.
<PAGE>
Telephone: (212) 735-3000
Facsimile: (212) 735-2000
Attention: J. Michael Schell
3. Boesebeck Droste
Darmstadter Landstra(beta)e 125
60598 Frankfurt am Main
Telephone: (069) 96 236-0
Facsimile: (069) 96 236-100
Attention: Dr. Richard H. Sterzinger
(9) This Agreement shall be governed by and construed in accordance with the
laws of the Federal Republic of Germany (regardless of the laws that
might otherwise govern under applicable principles of conflicts of law
thereof) as to all matters, including but not limited to, matters of
validity, construction, effect, performance and remedies. The parties to
this Agreement have entered into a separate ARBITRATION AGREEMENT, which
is attached to this notarial document as EXHIBIT 21 and which is hereby
repeated in notarial form.
(10) Unless otherwise specified herein, all costs, fees and expenses in
connection with the execution and performance of this Agreement shall be
borne by the party who incurs them, irrespective of whether this
Agreement is actually performed. The Purchasers shall bear any transfer
taxes, sales taxes, notarial fees and fees payable to governmental or
similar agencies relating to antitrust or similar approvals that arise in
connection with this Agreement and its consummation.
(11) Each of the Sellers and the Purchasers shall receive one exemplified copy
(Ausfertigung) and six certified copies (beglaubigte Abschriften) of this
Agreement and the Sellers on the one side and the Purchasers on the other
side each shall receive four certified copies of the Reference Deed.
The Notary advised that his responsibility is limited to matters of German law
only and that he does not assume any liability for matters governed by foreign
laws.
<PAGE>
The foregoing protocol including its Schedules, Annexes and Exhibits (save for
Exhibits A - G) was read aloud to the appearing parties, presented to them for
review, approved by them and signed by them and the Notary by own hand as
follows:
