Section 4.11
Third Party Communications. During the Pre-Closing Period Parent, the Company and Purchaser shall collaborate in approaching all customers, suppliers and all other third party business partners as reasonably requested by Purchaser, in order to communicate to them the pending transactions hereunder, with the goal to ensure a smooth continuation of their underlying business relationships following the Closing.
Section 4.12
Tax Matters.
| (a) | Cooperation. Each of Purchaser and Seller agrees to retain and furnish or cause to be furnished to one another, upon request, as promptly as practicable, such information in their possession (or, in the case of Purchaser, following the Closing, in the possession of the Company) and assistance relating to the Company as is reasonably necessary for the filing of all Tax Returns of or with respect to the Company, the making of any election related to Taxes of or with respect to the Company and the period ending on or before the Closing Date, the preparation for any audit by any Taxing Authority relating to any Tax Return of or with respect to the Company and the period ending on or before the Closing Date, and the prosecution or defense of any Action relating to any Tax Return of or with respect to the Company and the period ending on or before the Closing Date. Purchaser and Seller shall cooperate with each other in the conduct of any audit or other proceeding related to Taxes of or with respect to the Company and the period ending on or before the Closing Date and each shall execute and deliver such powers of attorney and other documents as are necessary to carry out the intent of this Section 4.12. In the event any Taxing Authority informs Seller, on the one hand, or Purchaser or the Company, on the other, of any notice of proposed audit, claim, assessment or other dispute concerning an amount of Taxes with respect to which the other party may incur Liability hereunder, the party so informed shall promptly notify the other party of such matter. |
| (b) | Transfer Taxes. Any Transfer Taxes shall be borne by Purchaser. Except as otherwise required by Applicable Law, Purchaser shall, at its own expense, prepare and file all necessary Tax Returns and other documentation with respect to all such Transfer Taxes, and provide Seller with a complete and correct copy thereof. |
| (i) | Tax Returns (x) required to be filed by or on behalf of the Company, (y) relating to any Tax assessment periods (Veranlagungszeiträume, Erhebungszeiträume, sonstige Besteuerungszeiträume) which fully or partially cover the period until the Closing Date and (z) which have an effect on Seller’s or its Affiliate’s Tax obligations (due to the fiscal unity for corporate income and trade tax purposes between Seller and the Company as described in Section 4.4(e)) (“Tax Returns of Seller’s Interest” and any Tax or Tax basis to be covered by law in a Tax Return of Seller’s Interest hereafter “Tax Item of Seller’s Interest”) shall be filed by Purchaser or the Company when due but subject to the review and prior written consent of Seller which shall not be unreasonably withheld and shall be deemed granted twenty (20) Business Days after such consent has been requested in writing by Purchaser. The Tax Returns of Seller’s Interest have to be prepared on a basis consistent with Seller’s reasonable and lawful instructions and further consistent with and by making elections in accordance with those Tax Returns prepared for past Tax assessment periods unless otherwise required by mandatory law or order of a Tax Authority. Any instructions given by Seller must comply with Applicable Law and past practice unless otherwise required by mandatory law or binding order of a Tax Authority. Purchaser shall ensure that any Tax Returns to be reviewed and approved by Seller (y) will be furnished to Seller no later than thirty (30) Business Days prior to the due date of the relevant Tax Return and (z) will be filed in time (taking into account any extensions). Purchaser shall take into account any instructions received from Seller no later than twenty (20) Business Days prior to the due date of the relevant Tax Return provided that such instructions are in accordance with Applicable Law. |
| (ii) | Any Tax Returns of Seller’s Interest may not be amended or changed without the prior written consent of Seller (such consent not to be unreasonably withheld and deemed granted twenty (20) Business Days after such consent has been requested in writing by Purchaser), and Purchaser shall follow, and shall cause the Company to follow, any reasonable and lawful instructions of Seller regarding the amendment of such Tax Returns; for the avoidance of doubt, corrections of filed Tax Returns which are required by law are not prevented by this clause. |
| (d) | Tax Assessments and Tax Audits. |
| (i) | After the Closing, Purchaser shall procure that Seller will be informed in writing without undue delay, at the latest however within ten (10) Business Days after receipt, by the Company or Purchaser, of all Tax assessments (Steuerbescheide) and announcements of Tax audits (Betriebsprüfungen) or other written administrative or judicial procedure, dispute or circumstance, in relation to a Tax Item of Seller’s Interest. |
| (ii) | Purchaser shall procure that Seller, at his costs, will be provided with all relevant documents and other information which are reasonably available to the Company or Purchaser and are required to enable Seller to evaluate such Tax Item of Seller’s Interest. |
| (iii) | If and to the extent that Tax audits of the Company relate to Tax Item of Seller’s Interest, Seller shall, at its reasonable request and sole cost and expense, be given the opportunity to engage and instruct, at their choice, a German Tax counsel in relation to such Tax audits regarding Tax Item(s) of Seller’s Interest. The German Tax counsel is entitled to participate in meetings with Tax Authorities in relation to such Tax proceedings and audits acting reasonably. |
| (iv) | Purchaser shall use commercially reasonable efforts with regard to Tax audits relating to Tax Item of Seller’s Interest that, |
| (A) | the Tax auditor shall address questions and statements in writing (unless otherwise agreed between Purchaser and Seller in advance and in writing); and |
| (B) | such questions and statements are forwarded to Seller without undue delay and give Seller the opportunity to provide answers and comments on these questions and statements prior to their filing. Any such answers and comments must be provided by Seller within fifteen (15) Business Days after the receipt of the questions or statements, provided that, Seller shall bear all out-of-pocket costs and expenses in connection with this Section 4.12(d)(iv). |
| (i) | Purchaser shall take, and shall procure that the Company take, at Seller’s sole expenses, such lawful action as Seller may request by written notice to Purchaser to avoid, dispute, resist, appeal or otherwise defend, including by suspension of enforcement or other injunction, against any assessment or enforcement of a Tax Item of Seller’s Interest. The Tax counsel of Seller’s choice shall be appointed by the Company, at the expense of Seller, in connection with actions relating to Tax Item of Seller’s Interest. The Company will allow this Tax counsel to report to Seller the status of such proceedings and is further entitled to discuss with Seller further procedural steps. Further, Seller is entitled to give instructions to this Tax counsel with regard to the defense and any legal remedy (including injunction) to be lodged including any arguments which may be used, provided that such instructions or arguments are reasonable, comply with mandatory law, where a continuous, unchanged past practice compliant with Applicable Law has been applied by the Company before the Closing Date, with such continuous and past practice applied by the Company. Purchaser procures that Seller and the Tax counsel will be provided without undue delay with all relevant documents, other information, and with such further assistance as reasonably required for the defense. The obligation to bear the expenses of any defense measure requested by Seller includes the fees and other costs payable in respect of any injunction, appeal or court proceeding. |
| (ii) | With respect to a Tax Item of Seller’s Interest no concession shall be made by Purchaser or the Company and no claim for Tax Item of Seller’s Interest shall be acknowledged or settled, without prior written consent of Seller, which shall not be unreasonably withheld or delayed and shall be deemed granted twenty (20) Business Days after request of such consent in writing by Purchaser. |
| (f) | All Taxes and Tax Liabilities with respect to the income, property or operations of the Company that relate to any Straddle Period shall be apportioned between the Pre-Closing Tax Period and the Tax period ending after the Closing Date as follows: (i) in the case of Taxes other than income, sales and use and withholding Taxes, on a per-diem basis, and (ii) in the case of income, sales and use and withholding Taxes, as determined from the books and records of the Company as though the Tax year of the Company terminated at the end of the Closing Date. |
| (g) | For the avoidance of doubt, Section 4.12(c) through (e) shall only apply to Taxes of Seller relating to the fiscal unity for income tax and trade tax purposes in place between Seller as fiscal unity parent and the Company as fiscal unity subsidiary, and shall not apply to any other Taxes. |
Section 4.13
Access to Information. During the Pre-Closing Period, (i) Parent and Seller shall and shall procure that the Company will, subject to Applicable Law, afford Purchaser and its Representatives reasonable access during business hours upon Purchaser’s written request reasonably in advance to (A) the Company’s corporate, financial and operational data, including corporate resolutions, properties and other material assets, books, Contracts and records, and (B) all other information concerning the business, properties and personnel of the Company as Purchaser may reasonably request, and (ii) Parent and Seller shall provide to Purchaser and its Representatives the Company’s bimonthly (i.e., twice a month) (as well as updates with respect to material occurrences to the extent transpire in between such periodical reports, as soon as reasonably practical) and Tax Returns, Tax elections and any other records and workpapers relating to Taxes, that are in the possession of the Company or subject to the Company’s control. Notwithstanding the foregoing, Purchaser expressly acknowledges and agrees that it will not, and will cause its Affiliates to not, contact or otherwise communicate with, either orally or in writing, any employee, officer, director, current or future customer or current or future supplier, licensor or joint venture partner of the Company’s business (including, for such purpose, any employee of the Company or Offered Employee who provides any service to the Company’s business) without the prior consent of Parent (such consent not to be unreasonably withheld or delayed).
Section 4.15
Representation and Warranty Policy. The parties acknowledge that, as of the date hereof, Purchaser has obtained the Representation and Warranty Policy. Purchaser shall not terminate, modify or amend the Representation and Warranty Policy in a manner that would be adverse to Parent or Seller without Parent’s or Seller’s, as applicable, prior written consent (such consent not to be unreasonably withheld, delayed or conditioned). Seller shall cause the Company and its Representatives, as applicable, to reasonably cooperate and assist Purchaser with obtaining the Representation and Warranty Policy, as reasonably requested by Purchaser. Purchaser shall cause the Representation and Warranty Policy to include a waiver of subrogation by the carrier/insurer such that the Representation and Warranty Policy will not permit subrogation by the carrier/insurer to any rights of Purchaser against Seller or its Affiliates, except with respect to any claim based on fraud (the “
Subrogation Waiver”), and further Purchaser will not waive or permit the amendment of such Subrogation Waiver.
Section 4.16
Parent, Seller and Company Release.
| (a) | Parent and Seller Release. Effective as of the Closing Date and subject to the Closing and the payment of the Purchase Price, in consideration of the consummation of the transactions contemplated hereunder, Parent and Seller (with respect to itself and any of its Affiliates except for the Company) hereby irrevocably, unconditionally and completely releases, acquits and forever discharges the Company and each of the Company’s directors, officers, employees, agents, advisors, Representatives, Affiliates, successors, heirs and assigns, executors and administrators and the Transferred Employees (the “Company Releasees”) from any past, present and future disputes, claims, controversies, demands, rights, obligations, costs, expenses (including attorneys’ and accountants’ fees and expenses), Liabilities, actions and causes of action of every kind and nature, in law or in equity, whether known or unknown, matured or unmatured, fixed or contingent, involving, or that may be asserted or exercised by Parent, Seller or and any of their Affiliates, in any capacity, except for Seller’s rights under this Agreement, in connection with the transactions contemplated hereby and each agreement attached as an exhibit hereto or entered into in connection herewith. |
| (b) | Company Release. In consideration of the consummation of the transactions contemplated hereunder, the Company hereby irrevocably, unconditionally releases, acquits and forever discharges, effective as of the Closing Date and subject to the Closing, Seller and each of Seller’s directors, officers or employees who acted as any current or former or serving as of immediately prior to the Closing Date director or officer of the Company, as well as its successors, heirs and assigns, executors and administrators (the “Seller Releasees”) from any past, present and future disputes, claims, controversies, demands, rights, obligations, liabilities, actions and causes of action of every kind and nature, in law or in equity, whether known or unknown, matured or unmatured, fixed or contingent, involving, or that may be asserted or exercised by the Company that arise from or out of, are based upon or relate to the service of such person as a director or officer of the Company, except with respect to such rights and claims available to Purchaser under this Agreement, in connection with the transactions contemplated hereby and each agreement attached as an exhibit hereto or entered into in connection herewith. |
| (c) | Notwithstanding anything to the contrary in this Section, the foregoing releases and covenants will not apply to any claims (i) involved fraud or breach of applicable law of the Company Releasee (in case of Seller Release) or Seller Releasee (in case of Company Release), (ii) relating to the other Party’s failure to perform any of its obligations, undertakings or covenants set forth in this Agreement, (iii) relating to any employment payment, including salary, bonuses, accrued vacation, any other employee compensation and/or benefits and unreimbursed expenses and (iv) relating to or arising from any commercial relationship (including for the removal of doubt any services engagements) Seller may have with any of the Company Releasees or that Purchaser or the Company may have with any Seller Releasee. |
| (d) | Notwithstanding anything to the contrary: (i) the foregoing release is conditioned upon the consummation of the Closing and will become null and void, and will have no effect whatsoever, without any action on the part of any Person, upon termination of this Agreement in accordance with Article VII and (ii) should any provision of this release be found, held, declared, determined, or deemed by any court of competent jurisdiction to be void, illegal, invalid or unenforceable under any Applicable Law, the legality, validity, and enforceability of the remaining provisions will not be affected and the illegal, invalid, or unenforceable provision will be deemed not to be a part of the release pursuant to this Section. |
Section 4.17
Transition Services. Seller shall ensure that for two (2) months after the Closing Date, at the reasonable request of Purchaser or the Company as may be provided from time to time, Seller and its relevant Affiliates shall provide Purchaser or the Company information technology services as reasonably agreed between Purchaser and Seller, to enable the Company to continue to carry on its business in all material respects in the same manner in which it was carried on terms to be mutually agreed in good faith.
Section 4.18
Restructuring Activities; Purchase Orders.
| (a) | Restructuring Assets and Activities. |
| (i) | Parent and Seller will use reasonable best efforts to perform, at their own cost and expense (except as specified in clause (ii) below), restructuring activities to transfer certain assets, listed on Schedule 4.18(a), (the “Restructured Assets”) to the Company on or prior to the Closing (the “Restructuring Activities”). Neither Parent nor Seller will be required to perform any Restructuring Activities to the extent that it would violate Applicable Law. Parent and Seller will reasonably respond to reasonable questions by Purchaser regarding the status of the Restructuring Activities. Any executed documents, instruments or certificates (or forms thereof) to implement the Restructuring Activities will be made available to Purchaser reasonably promptly following their completion. For purposes of this Agreement, the Restructuring Activities will be deemed to be in the ordinary course of business of the Company. |
| (ii) | Notwithstanding the foregoing, promptly but in any event no later than 60 calendar days following the Closing Date, Purchaser will, at Purchaser’s cost and expense, prepare for relocation of the Restructured Assets and relocate such Restructured Assets. Subject to the provisions hereof, Parent agrees to cooperate, and agrees to cause its Affiliates to cooperate, with Purchaser and provide Purchaser all assistance reasonably requested by Purchaser in connection with the planning and implementation of the transfer of any Restructured Assets or any portion of any of them to such location as Purchaser will designate. The Restructured Assets will be transported by or on behalf of Purchaser, and until all of the Restructured Assets are removed from Parent’s or its Affiliates’ facilities, Parent will permit, and will cause its Affiliates to permit, Purchaser and its authorized agents or representatives, upon prior notice, to have reasonable access to such facilities during normal business hours to the extent necessary to disconnect, detach, remove, package and crate the Restructured Assets for transport. Purchaser will be responsible for (A) disconnecting and detaching all fixtures and equipment that are Restructured Assets from the floor, ceiling and walls of Parent’s or its Affiliates’ facilities so as to be freely removed from such facilities and (B) packaging and loading the Restructured Assets for transporting to and reinstalling the Restructured Assets at such location(s) as Purchaser will determine. |
| (b) | Purchase Orders. Purchaser, Parent and Seller will work together in good faith to transition the commercial arrangements described in Schedule 4.18(b) to Purchaser (or an Affiliate of Purchaser designated by Purchaser, including the Company) post-Closing and, effective as of the Closing, Purchaser shall become the beneficial owner of all amounts due or received thereby in respect of such commercial arrangements, which shall be transferred to Purchaser by Parent, Seller or any Affiliate thereof, as applicable. |
Section 4.19
Joint and Several Liability. Anything to the contrary herein notwithstanding, the liability of Seller and Parent, under this Agreement, including for the compliance with any covenants hereunder and/or breach of any representations and/or warranties hereunder, shall be joint and several. The liability of the Purchaser’s entities, under this Agreement, shall be joint and several.
Section 4.20
Collaboration. Subject to the terms hereof, during the Pre-Closing Period, the parties agree to collaborate in good faith with the goal to ensure a smooth continuation of the Company’s business following the Closing.
ARTICLE V
CONDITIONS TO CLOSING
Section 5.1
Conditions to Obligations of Purchaser. The obligations of Purchaser to consummate the Closing are subject to the satisfaction or waiver of each of the following conditions:
| (a) | Representations, Warranties and Covenants of Parent, Seller and Company. (i) each of Parent, Seller and the Company shall have performed and satisfied in all material respects each of its respective covenants and obligations hereunder required to be performed and satisfied by it on or prior to the Closing Date, (ii) each of the representations and warranties of Parent, Seller and Company set forth in the Fundamental Representations shall have been true and correct in all respects as of the date of this Agreement and at and as of the Closing with the same force and effect as if made as of the Closing (except that representations and warranties that are made as of a specified date shall be true and correct as of such specified date), (iii) the representations and warranties of Parent, Seller and Company set forth in Section 2.10 (Financial Statements), Section 2.11 (Absence of Change), and Section 2.26 (Suppliers and Customers) shall have been true and correct in all material respects as of the date of this Agreement and at and as of the Closing with the same force and effect as if made as of the Closing (except that representations and warranties that are made as of a specified date shall be true and correct as of such specified date), and (iv) each of the representations and warranties of Parent, Seller and Company contained herein, other than those set forth above, shall have been true and correct as of the date of this Agreement and at and as of the Closing with the same force and effect as if made as of the Closing (except that representations and warranties that are made as of a specified date shall be true and correct as of such specified date), except, in the case of this clause (iv), where the failure to be true and correct would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. |
| (b) | FDI Clearance. The transactions contemplated by this Agreement are cleared (for the avoidance of doubt, the issuance of a non-objection certificate shall suffice) or deemed to be cleared under the German FDI Laws (e.g., due to lapse of applicable waiting periods or due to jurisdiction having been declined by the BMWK) or it turns out that the closing of the transactions contemplated by this Agreement is otherwise permissible pursuant to German FDI Laws. |
| (c) | Short Fiscal Year and Termination of DPLTA. |
| (i) | The competent Tax authorities have granted their consent to change the Company’s fiscal year and to introduce in the Company the short Fiscal Year. |
| (ii) | a change of the fiscal year of the Company to implement the Short Fiscal Year is registered with the commercial register. |
| (iii) | The DPLTA has been terminated with effect as of the expiry of the Short Fiscal Year. |
| (d) | Board Approval. Parent and Seller have submitted to Purchaser a written confirmation that the respective boards of Parent and Seller have approved the transactions contemplated by this Agreement. |
| (e) | No Restraints. No Law shall have been enacted or exist that would prohibit the transactions contemplated by this Agreement and the other Transaction Documents or the consummation of the Closing. There shall not be any temporary restraining order, preliminary or permanent injunction or other order or consent issued by any court of competent jurisdiction or other restraint or prohibition of any Governmental Entity (i) preventing the consummation of the Share Sale or other transactions contemplated by this Agreement or the other Transaction Documents or (ii) limiting or restricting Purchaser’s ownership, conduct or operation of the business of the Company following the Closing. Nor shall there be any threatened (in writing) Action seeking any of the foregoing or any other injunction, restraint, prohibition or material damages in connection with the Share Sale or the other transactions contemplated by this Agreement and the other Transaction Documents. |
| (f) | No Material Adverse Effect. Since the date hereof there shall not have occurred Material Adverse Effect. |
| (g) | Employment and Consulting Arrangements. |
| (i) | None of the Key Employees shall have terminated employment with the Company or shall have terminated or repudiated (or indicated or provided notice of an intent to terminate or repudiate) his or her Employment Arrangement or shall be unable to continue employment under his or her Employment Arrangement upon Closing. |
| (ii) | At least 10 of the employees set forth in Schedule 5.1(h)(ii) are employed by the Company, Purchaser or an Affiliate of Purchaser at Closing; provided, however, to the extent any of the employees set forth on Schedule 5.1(h)(ii) are Offered Employees and did not receive offers in compliance with Section 4.10, such employees will not be included in the calculation of this percentage requirement. |
| (iii) | The Consulting Agreement shall be in full force and effect at the time of the Closing. |
| (h) | Agreements and Documents. Purchaser shall have received the following agreements and documents, each of which shall be in full force and effect: |
| (i) | a certificate duly executed by Seller and containing the representation and warranty of Seller that the conditions set forth in Sections 5.1(a) (as they relate to Seller) have been duly satisfied; and |
| (ii) | letters of resignation and separation letters, in form reasonably satisfactory to Purchaser, duly executed by each managing director or officer of the Company, evidencing the resignation of each such director, managing director and officer (but only from such office, not as employee, unless otherwise required pursuant to the terms of this Agreement), in each case, effective as of the Closing. |
| (i) | Other Documents. Purchaser shall have received the Estimated Closing Statement and the certificate referenced in Section 5.1(h)(i) above, proof of termination of Encumbrances on any assets of the Company satisfactory to Purchaser, and such other documents, agreements, filings, third party consents, assignments and other instruments, in form and substance reasonably satisfactory to Purchaser, as may be required to consummate the Share Sale. |
| Section 5.2 | Conditions to Obligations of Parent and Seller. The obligations of Parent and Seller to consummate the Closing are subject to the satisfaction or waiver of each of the following conditions: |
| (a) | Representations, Warranties and Covenants of Purchaser. Except as would not reasonably be expected to prevent consummation of the Share Sale by Purchaser and other transactions contemplated hereby, (i) Purchaser shall have performed and satisfied in all material respects each of its respective covenants and obligations hereunder required to be performed and satisfied by it on or prior to the Closing Date, (ii) each of the representations and warranties of Purchaser set forth in Section 3.1 (Organization and Qualification), Section 3.2 (Authority), and Section 3.3 (No Conflict; Required Consents and Approvals) shall have been true and correct in all respects as of the date of this Agreement and at and as of the Closing with the same force and effect as if made as of the Closing (except that representations and warranties that are made as of a specified date shall be true and correct as of such specified date) and (iii) each of the representations and warranties of Purchaser contained herein, other than those set forth in subsection (ii) above, shall have been true and correct as of the date of this Agreement and at and as of the Closing with the same force and effect as if made as of the Closing (except that representations and warranties that are made as of a specified date shall be materially true and correct as of such specified date), except, in the case of clause (iii), where the failure to be true and correct would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. |
| (b) | Certificate. A certificate duly executed by Purchaser and containing the representation and warranty of Purchaser that the conditions set forth in Section 5.2(a) have been duly satisfied; |
| (c) | Board Approval. Purchaser has submitted to Parent and Seller a written confirmation the board of Purchaser has approved the transactions contemplated by this Agreement. |
| (d) | No Restraints. No Law shall have been enacted or exist that would prohibit the transactions contemplated by this Agreement and the other Transaction Documents or the consummation of the Closing. There shall not be any temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other restraint or prohibition of any Governmental Entity preventing the consummation of the Share Sale or other transactions contemplated by this Agreement. |
ARTICLE VI
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS; INDEMNIFICATION
Section 6.1
General Survival.
| (a) | The covenants and agreements of the Company, Parent, Seller and Purchaser contained in this Agreement shall survive the Closing Date; provided, that none of the covenants and agreements of the Company, Parent, Seller and Purchaser contained in this Agreement shall survive beyond the periods set forth in Section 6.1(b) below. |
| (b) | The representations, warranties, covenants and agreements of Parent, the Company and of Seller contained in this Agreement shall survive as follows: |
| (i) | the representations and warranties of the parties contained herein and in any certificates delivered pursuant hereto, as the case may be, will terminate and be of no further force or effect at the Closing, except for the Fundamental Representations, which shall survive the Closing and continue in full force and effect six (6) years from the Closing Date (the “Fundamental Claims Expiration Date”) and provided that nothing in the foregoing shall affect the period for indemnification with respect to fraud as detailed in clause (ii) below; |
| (ii) | notwithstanding anything to the contrary herein, any claim of fraud on the part of Parent, the Company or Seller shall survive until the expiration of the applicable statutes of limitations; |
| (iii) | any claims relating to or arising out of a breach of the covenants and agreements contained in this Agreement that are required to be performed in whole prior to the Closing (the “Pre-Closing Covenants”) will survive until the date that is twelve (12) months following the Closing Date (the “Pre-Closing Covenant Expiration Date”) and the covenants and agreements contained in this Agreement that require performance after the Closing (the “Post-Closing Covenants”) will survive until fully performed or observed in accordance with their terms (the “Post-Closing Covenant Expiration Date” and, together with the Pre-Closing Covenant Expiration the “Covenant Expiration Date”); and |
| (iv) | if, in accordance with this Article VI, (A) any indemnification claims arising from any breach of any representations and warranties set forth in Section 6.1(b)(i) above are asserted pursuant to Section 6.3 prior to the Fundamental Claims Expiration Date, (B) any indemnification claims arising from any claims of fraud are asserted pursuant to Section 6.3 at any time prior to the expiration of the applicable statute of limitations period or (C) any indemnification claims arising from any breach of any covenant or agreement set forth in Section 6.1(b)(iii) asserted pursuant to Section 6.3 prior to the applicable Covenant Expiration Date, such indemnification claims shall continue until the final amount of recoverable Losses are determined by final agreement, settlement, judgment or award binding on Parent and/or Seller and Purchaser in accordance with this Article VI. |
Section 6.2
Indemnification.
| (a) | Indemnification by Parent and Seller. Subject to Section 6.1 and the other provisions of this Article VI, from and after the Closing Date, Parent and Seller shall, jointly and severally, in the manner set forth herein, indemnify and hold harmless Purchaser, the Company and their Affiliates, and their respective Representatives (collectively, the “Indemnitees”), from and against all Losses resulting from, arising out of, relating to, or imposed upon or incurred by any Indemnitee by reason of (including any Third Party Claim relating thereto): |
| (i) | any breach of any Fundamental Representation; |
| (ii) | any breach by Parent, Seller or the Company of a Pre-Closing Covenant; |
| (iii) | any breach by Parent, Seller or the Company of a Post-Closing Covenant; and |
| (iv) | any fraud on the part of Parent, Seller or the Company; |
| (i) | No Indemnitee shall be entitled to recover specific Losses for a corresponding Loss that was already included as the same Liability (in all respects) and to the extent such Liability was accurately calculated, depicted and clearly taken into full account in determining the Net Working Capital, Transaction Expenses, Indebtedness clearly taken into account as downward adjustments to the Purchase Price, including with respect to any claim made under this Article VI. |
| (ii) | The amount of any Losses that are subject to indemnification under this Article VI will be calculated net of the amount of any insurance proceeds, indemnification payments, or reimbursements actually received by the Indemnitee from third parties in respect of such Losses (net of any costs or expenses incurred in obtaining or enforcing such insurance, indemnification, or reimbursement, including any increases in insurance premiums or retro-premium adjustments resulting from such recovery). If an Indemnitee receives any amounts under applicable insurance policies or third party indemnification or reimbursement payments subsequent to its receipt of an indemnification payment by Parent and/or Seller, then such Indemnitee will, without duplication, promptly reimburse Parent and/or Seller for any payment made by Parent and/or Seller up to the aforementioned net amount received by the Indemnitee (or the proportionate amount to each, based on the pro rata allocation of the amounts paid by each in respect of such Loss). Notwithstanding the foregoing, except as required in order to reasonably mitigate losses, in no event shall an Indemnitee be obligated to commence or maintain any litigation or other proceeding against any third party in respect of any such Loss. |
| (iii) | Except for the representations and warranties contained in Article II and the certificate delivered pursuant to Section 5.1(h)(i), Purchaser acknowledges that neither Parent nor Seller has made and will not be deemed to have made (and Purchaser has not relied on and will not rely on) any representation or warranty to Purchaser, express or implied, at Law or in equity. |
| (iv) | Parent and Seller shall not be liable to an Indemnitee for, and no Indemnitee shall be entitled to, any indemnification for a Loss pursuant to Section 6.2(a)(ii) and Section 6.2(a)(iii) if, with respect to an individual item of Loss (together with any related series or group of related Losses), such item is less than USD $20,000. |
| (v) | In no event with the aggregate liability of Parent and Seller for any indemnification claim under Section 6.2(a)(ii) exceed US $50,000,000. Except in cases of fraud or Parent’s or Seller’s (or both) intentional breach of Section 4.9(a) and (b), in no event will the aggregate Liability of Parent and Seller, jointly and severely, for any indemnification claim exceed the Purchase Price actually received by Seller. |
| (i) | Except in the case of the Fundamental Representations, Pre-Closing Covenants, Post-Closing Covenants, and fraud and/or as stipulated under Section 6.4, the Indemnitee’s sole and exclusive source of recovery for claims against Seller and its Affiliates under this Agreement will be coverage under the Representation and Warranty Policy. Purchaser expressly waives the right to recover any amount outside of or in excess of the Representation and Warranty Policy for any Loss arising from any breach of any representations and warranties other than Fundamental Representations, Pre-Closing Covenants, Post-Closing Covenants, and fraud and/or as stipulated under Section 6.4. |
| (ii) | Subject to the limitations in Section 6.2(c)(i), the Indemnitee will only be permitted to recover Losses directly from Parent and/or Seller pursuant to claims under Section 6.2(a) if the coverage under the Representation and Warranty Policy has been exhausted, unless such indemnity claim is being made in respect of fraud. The foregoing shall not limit (A) Parent and Seller’s obligations under Section 6.4 or (B) Indemnitee’s right to seek recovery for any claims under Section 6.2(a)(i) simultaneously (x) under the Representation and Warranty Policy and (y) from Parent, provided, however, that Indemnitee will only be entitled to seek recovery from Parent for any amounts in excess of the aggregate amount then recoverable under the Representation and Warranty Policy. |
Section 6.3
Indemnification Procedures.
Subject to Section 4.9(f) (with respect only to indemnification for breach of Section 4.9(a) and (b)):
| (a) | In the event that an Indemnitee seeks a recovery in accordance with the terms of this Article VI in respect of an indemnification claim, Purchaser (on behalf of such other Indemnitee, if applicable) will deliver a written notice (a “Claim Notice”) to Parent and Seller. Each Claim Notice will, with respect to each indemnification claim set forth therein, (i) specify in reasonable detail and in good faith the nature of the indemnification claim being made, including any amounts that an Indemnitee has paid, incurred, suffered, or sustained, and/or reasonably anticipates that it may pay, incur, suffer, or sustain Losses and (ii) if reasonably practicable under the circumstances, state the aggregate Dollar amount of Losses to which such Indemnitee is entitled to indemnification pursuant to this Article VI that have been incurred, or a good faith preliminary estimate of the aggregate Dollar amount of such Losses reasonably expected to be incurred, by such Indemnitee pursuant to such indemnification claim (the “Claim Amount”). |
| (b) | If Parent or Seller wishes to object to the allowance of some or all indemnification claims made in a Claim Notice, Parent or Seller, as applicable must deliver a written objection to Purchaser (on behalf of any Indemnitee), within twenty (20) Business Days after receipt by Parent and Seller of such Claim Notice expressing such objection and explaining in reasonable detail and in good faith the basis therefor. Following receipt by Purchaser of Parent’s or Seller’s written objection, if any, Purchaser (on behalf of any other Indemnitee, if applicable), and Parent or Seller, as applicable, will promptly, and within ten (10) Business Days, meet in order to agree on the rights of the respective parties with respect to each indemnification claim that is the subject of such written objection. If the parties should so agree, (i) a memorandum setting forth such agreement will be prepared and executed by Purchaser (on behalf of any other Indemnitee, if applicable), and Parent or Seller, as applicable, shall as promptly as practicable and within five (5) Business Days following the execution of such memorandum, in accordance with Section 6.3(c) below, pay the agreed amount to Purchaser. In the event that the parties do not prepare and sign such a memorandum or such memorandum does not address in full the written objections timely delivered, within twenty (20) Business Days of receipt by Purchaser (on behalf of any other Indemnitee, if applicable), from Parent or Seller of the written objection, or in the event that such written objection was not provided by Parent or Seller within the abovementioned twenty (20) Business Days timeframe, then Purchaser or Parent or Seller, as applicable, may commence an Action to resolve such dispute and enforce its rights with respect thereto in any court available therefor. |
| (c) | Any amount payable by Parent and/or Seller to Purchaser pursuant to Section 6.3(b) above will be paid promptly (but in no event later than five (5) Business Days after the applicable payment obligation accrues) by wire transfer of Dollars in immediately available funds to such account or accounts as may be designated in writing by Purchaser. Any amounts paid to Purchaser, in respect of any indemnification claim asserted on behalf of an Indemnitee other than Purchaser will be received by Purchaser on behalf of such other Indemnitee. |
| (d) | Third Party Actions. In the event Purchaser becomes aware of a third party claim (a “Third Party Claim”) which Purchaser in good faith believes will result in an indemnification claim pursuant to this Article VI, Purchaser shall notify Parent and Seller of such Third Party Claim by providing a Claim Notice which will be accompanied by copies of any documentation submitted by the third party making such Third Party Claim, if any. Parent and Seller shall be entitled on its expense, to participate in, but not to determine or conduct, the defense of such Third Party Claim. The failure to so notify Parent and Seller shall not relieve Parent and/or Seller of any Liability except to the extent Parent and/or Seller (as applicable) demonstrates that Parent’s and/or Seller’s defense of such action is materially prejudiced thereby. Purchaser shall have the right in its sole discretion to conduct the defense of, and to settle, any Third Party Claim; provided, however, that, if Purchaser settles any such Third Party Claim without the consent of Parent and Seller (which shall not be unreasonably withheld or delayed), then Purchaser shall be entitled to seek indemnification hereunder, however such settlement shall not represent the amount of such Losses indemnifiable hereunder, provided further however that, if Purchaser seeks prior written consent of Parent and Seller to settlement and Parent or Seller shall not have objected within 20 Business Days after such written request (or upon any such written consent by Parent), then such lack of objection (or such consent) shall represent the agreement of Parent and Seller that the Losses incurred in connection therewith shall be indemnifiable hereunder and, for the avoidance of doubt, represent the amount of such Losses. |
Section 6.4
Representation and Warranty Policy Related Matters. Anything to the contrary herein notwithstanding, Parent (on behalf of itself and Seller) shall pay to Purchaser an amount in cash equal to thirty percent (30%) of any Losses incurred by any of the Indemnitees, as, when and if such amounts are incurred that are subject to the applicable deductible or retention prescribed by the terms of the Representation and Warranty Policy, regardless of whether such Losses are subject to indemnification pursuant to this
Article VI, to the extent that either (i) actually paid by Indemnitee as a deductible or retention pursuant to the Representation and Warranty Policy; (ii) the insurer under the Representation and Warranty Policy has determined or acknowledged in writing, including in the settlement or resolution of any disputed claim or Losses, that such Losses are or would be credited against the remaining balance of the deductible or retention prescribed by the terms of the Representation and Warranty Policy, or (iii) it is otherwise finally determined by a court of competent jurisdiction or pursuant to any dispute resolution mechanism included or incorporated into the Representation and Warranty Policy, that such Losses are or would be credited against the remaining balance of the deductible or retention prescribed by the terms of the Representation and Warranty Policy;
provided, that Parent’s aggregate liability under this
Section 6.4 will be limited to US$ 225,000;
provided further, Purchaser’s ability to recover from Parent under this
Section 6.4 will be further limited to (x) US$ 225,000 commencing on the Closing Date and expiring on the first anniversary of the Closing Date and (y) US$ 120,000 during the period commencing on the first anniversary of the Closing Date and expiring on the second anniversary of the Closing Date. Examples for illustration purposes only of such payments are attached hereto as
Schedule 6.4.
Section 6.5
Exclusive Remedy. This
Article VI shall be the sole and exclusive remedy of the Indemnitees from and after the Closing Date for any claims arising under this Agreement, including claims of inaccuracy in or breach of any representation, warranty, covenant or agreement;
provided,
however, that the foregoing clause of this
Section 6.5 shall not be deemed a waiver by any party of any right to injunctive relief or specific performance pursuant to this Agreement (including, for the removal of doubt, all remedies under
Section 4.9(e) and
Section 8.6(f)) or under equitable Law or any other equitable remedy, or any right or remedy arising by reason of any claim of fraud committed by a party with respect to this Agreement.
Section 6.6
Tax Treatment of Indemnity Payments and Certain Other Payments. Parent, Seller, Purchaser, and the Company agree to treat any indemnity payment made pursuant to this
Article VI and any payment made pursuant to
Section 4.12(a), as an adjustment to the Purchase Price for all income tax purposes, except as required by Applicable Law.
ARTICLE VII
TERMINATION
Section 7.1
Termination. At any time prior to the Closing, this Agreement may be terminated and the Share Sale abandoned:
| (a) | by mutual written consent of Purchaser and Seller; |
| (b) | by either Purchaser or Seller, if the Share Sale shall not have been consummated on or before January 31, 2024 or such other date that Purchaser and Seller may agree upon in writing (the “Termination Date”); provided, however, that the right to terminate this Agreement under this Section 7.1(b) shall not be available to Seller if a breach of this Agreement by the Company or Seller has resulted in the failure of the Share Sale to be consummated before the Termination Date; and provided, further, that the right to terminate this Agreement under this Section 7.1(b) shall not be available to Purchaser if a breach of this Agreement by Purchaser has resulted in the failure of the Share Sale to be consummated before the Termination Date. |
| (c) | by either Purchaser or Seller, if any Law preventing the consummation of the Share Sale shall have become final and non-appealable; |
| (d) | by Purchaser if it is not in material breach of its obligations under this Agreement and there has been a breach of any representation, warranty, covenant, or agreement of Seller contained in this Agreement such that the conditions set forth in Section 5.1(a) would not be satisfied as of the time of such breach or inaccuracy and such breach or inaccuracy has not been cured or cannot be cured upon the earlier of (i) thirty (30) calendar days after written notice thereof to Seller or (ii) the Termination Date; |
| (e) | by Seller if it is not in material breach of its obligations under this Agreement and there has been a breach of any representation, warranty, covenant, or agreement of Purchaser contained in this Agreement such that the conditions set forth in Section 5.2(a) would not be satisfied as of the time of such breach or inaccuracy and such breach or inaccuracy has not been cured or cannot be cured upon the earlier of (i) thirty (30) calendar days after written notice thereof to Purchaser or (ii) the Termination Date; or |
| (f) | by Purchaser, if between the date hereof and the Closing, there has been a Material Adverse Effect.
The party seeking to terminate this Agreement pursuant to this Section 7.1 (other than Section 7.1(a)) shall give written notice of such termination to the other party. |
Section 7.2
Effect of Termination. In the event of termination of this Agreement as set forth in
Section 7.1, this Agreement shall forthwith become void and there shall be no Liability or obligation on the part of Purchaser, the Company or their respective officers, director, managing directors, shareholders, Affiliates or Representatives;
provided,
however, that (A) the provisions of this
Section 7.2,
Section 4.6,
Section 4.7 and
Article VIII shall remain in full force and effect and survive any termination of this Agreement and (B) nothing herein shall relieve any party hereto from Liability in connection with any breach of such party’s representations, warranties or covenants contained herein.
ARTICLE VIII
MISCELLANEOUS
Section 8.1
Entire Agreement; Assignment; Successors. This Agreement and the other Transaction Documents (A) constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof and supersede all other prior and contemporaneous agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and (B) may not be assigned by operation of Law or otherwise;
provided,
however, that Purchaser may assign any or all of its rights and obligations under this Agreement to any Affiliate of Purchaser, but no such assignment shall relieve Purchaser of its obligations hereunder if such assignee does not perform such obligations. Any purported assignment of this Agreement in contravention of this
Section 8.1 shall be null and void and of no force or effect. Subject to the preceding sentences of this
Section 8.1, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns. In the event of any conflict or inconsistency between the terms of this Agreement and the terms of any other Transaction Document, the terms of this Agreement shall govern.
Section 8.2
Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of Law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect, so long as the economic or legal substance of the transaction contemplated by this Agreement is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible, in a mutually acceptable manner, in order that the transactions contemplated by this Agreement be consummated as originally contemplated to the fullest extent possible.
Section 8.3
Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly given (A) on the date of delivery if delivered personally, (B) on the first (1
st) Business Day following the date of dispatch if delivered utilizing a next-day service by a nationally recognized next-day courier (or in the case of any recipients sending or receiving notices outside of the United States, then on the second (2
nd) Business Day following the date of dispatch) or (C) on the date of delivery if sent by e-mail (with the written notice attached as scanned copy). All notices and other communications hereunder shall be delivered to the addresses set forth below:
| (a) | if to Purchaser, or the Company after the Closing: |
Camtek Ltd.
Attn.: Moshe Eisenberg
Ramat Gavriel Ind. Zone
P.O.Box 544 Migdal Ha’emek 2309407
Israel with a copy to (which copy shall not constitute notice):
Shibolet & Co., Law Firm
Attn.: Lior Aviram and Vica Schreiber
4 Yitzchak Sade, Tel Aviv Israel
| (b) | if to the Company (prior to Closing), Parent or Seller: |
FormFactor, Inc.
7005 Southfront Road
Livermore, CA 94551
Attn: Shai Shahar
Email: shai.shahar@formfactor.com with a copy to (which copy shall not constitute notice):
Orrick Herrington & Sutcliffe LLP
405 Howard Street
San Francisco, CA 94105
Attn: Ramy Shweiky; Christoph Rödter;
Email: rshweiky@orrick.com; croedter@orrick.com
or to such other address as the Person to whom notice is given may have previously furnished to the others in writing in the manner set forth above.
Section 8.4
German Terms. Where a German term has been added in parenthesis after an English term, only the meaning of such German term under the substantive laws of the Federal Republic of Germany taking into account the context in which such German terms are used in this Agreement shall be decisive for the interpretation of such English term whenever such English term is used in this Agreement.
Section 8.5
Governing Law. This Agreement shall be deemed to be made and in all respects be interpreted, construed and governed by and in accordance with the Laws of the State of New York without regard to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than the State of New York.
Section 8.6
Arbitration. Any dispute, controversy or claim arising out of, relating to or in connection with this Agreement, including any question regarding its existence, validity or termination, or regarding a breach of this Agreement, shall, subject to
Section 4.9(f) and
Section 8.6(f), be referred to and settled by arbitration under and in accordance with the Rules of Arbitration of the International Chamber of Commerce (the “
ICC Rules”), as amended and in effect on the date that demand for arbitration is filed as set forth in
Section 8.6(a). Subject to
Section 4.9(f) and
Section 8.6(f), each party hereto consents to such arbitration as the sole and exclusive method of resolving any such dispute.
| (a) | To initiate arbitration, any party shall submit its notice of arbitration to the International Court of Arbitration and to all other parties. The arbitration proceeding will take place in Paris and will be conducted in the English language. The arbitration panel will consist of three (3) arbitrators, all of whom (including the chairperson) shall be appointed by the International Court of Arbitration pursuant to the ICC Rules. The expenses of the arbitration shall be borne as determined by the arbitral tribunal. The award of the arbitral tribunal shall be final and binding on the parties thereto, including any joined or intervening party, who hereby agree to undertake it without recourse to any judicial proceedings in any jurisdiction whatsoever seeking annulment, setting aside, modification or any diminution or impairment of its terms or effect. |
| (b) | Judgment upon any arbitral award rendered may be entered and a confirmation order sought in any court having jurisdiction thereof. Each party hereby consents to process being served in any such proceeding by the mailing of a copy thereof by registered or certified mail, postage prepaid, to its address specified in Section 8.3 or in any other manner permitted by Law. EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUCH ACTION OR PROCEEDING. |
| (c) | Any respondent named in a notice of arbitration or counterclaim or cross claim hereunder may join any other party to any arbitral proceedings hereunder; provided that (i) such joinder is based upon a dispute, controversy or claim substantially related to the dispute, controversy or claim in the relevant notice of arbitration or counterclaim or cross claim, and (ii) such joinder is made by written notice to the ICC and to all other parties within either twenty (20) Business Days from the receipt by such respondent of the relevant notice of arbitration or counterclaim or cross claim or such longer time as may be determined by the ICC or the arbitrators. |
| (d) | Any party may intervene in any arbitral proceedings hereunder; provided that (i) such intervention is based upon a dispute, controversy or claim substantially related to the dispute, controversy or claim in the relevant notice of arbitration or counterclaim or cross claim and such intervention is accepted by the arbitral tribunal or if the arbitral tribunal has not been appointed, by the ICC, and (ii) such intervention is made by written notice to the arbitral tribunal (if appointed), the ICC and to all other parties within either twenty (20) Business Days from the receipt by such party of the relevant notice of arbitration or counterclaim or cross claim or such longer time as may be determined by the ICC or the arbitrators. |
| (e) | Any joined or intervening party may make a counterclaim or cross claim against any party; provided that (A) such counterclaim or cross claim is based upon a dispute, controversy or claim substantially related to the dispute, controversy or claim in the relevant notice of arbitration or counterclaim or cross claim, and (B) such counterclaim or cross claim is made by written notice to the arbitral tribunal (if appointed), the ICC and to all other parties within either thirty (30) days from the receipt by such party of the relevant notice of arbitration or counterclaim or such longer time as may be determined by the ICC or the arbitrators. |
| (f) | Notwithstanding the forgoing but subject to Section 4.9(f), the parties hereto hereby acknowledge and agree that each party is entitled to an injunction or injunctions to enforce specifically the terms and provisions hereof and may apply to any court having jurisdiction for such injunctive relief, including, but not limited to temporary restraining orders or preliminary injunctions, in addition to any remedy to which the parties may be entitled in any arbitration proceeding or in equity. |
Section 8.7
Interpretation; Article and Section References. The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. All references in this Agreement to Articles, Sections, Subsections, Annexes, Exhibits and Schedules are references to Articles, Sections, Subsections, Exhibits and Schedules, respectively, in and to this Agreement, unless otherwise specified. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. The words “include” or “including” mean “include, without limitation” or “including, without limitation,” as the case may be, and the language following “include” or “including” shall not be deemed to set forth an exhaustive list. Any capitalized terms used in any Annex, Exhibit or Schedule but not otherwise defined therein shall have the meaning as defined in this Agreement. All Annexes, Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth herein. The English language is the official language of this Agreement and such text of the Agreement shall prevail over any translation thereof.
Section 8.8
No Third-Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of each party hereto and its successors and permitted assigns and nothing in this Agreement is intended to or shall confer upon any other Person any legal or equitable rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement.
Section 8.9
Amendment and Modification. This Agreement may be amended, modified or supplemented by the parties at any time by execution of an instrument in writing signed on behalf of all of the parties hereto.
Section 8.10
Fees and Expenses. Except as otherwise set forth herein, each of the Company, Parent, Seller and Purchaser will bear its own, and its respective legal, auditors’, financial advisors’, and other representatives’ fees and other expenses in connection with or related to this Agreement and the other Transaction Documents and the transactions contemplated hereby and thereby. Notwithstanding the foregoing and for the avoidance of doubt, (i) the notary fees related to the public deed to be executed at Closing pursuant to
Section 1.3(b) shall be borne by Purchaser and (ii) all Closing Transaction Expenses shall be deducted from the Purchase Price as set forth in
Section 1.4.
Section 8.11
Waivers. No failure or delay of a party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties hereunder are cumulative and are not exclusive of any rights or remedies which they would otherwise have hereunder. Any agreement on the part of any party to any such waiver shall be valid only if set forth in a written instrument executed and delivered by such party.
Section 8.12
No Presumption Against Drafting Party. The parties agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any Law or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.
Section 8.13
Materials Made Available. The parties agree that the words “
Made Available” or words of similar import mean that, on or before 8:00 a.m. Central European Time on the second (2
nd) Business Day immediately preceding the date of this Agreement, the Company has posted complete and correct copies of such materials to the Data Room and that Purchaser and its Representatives had continuous access to such materials in the Data Room during the two (2) Business Days prior to the date of this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Share Purchase Agreement on the date first above written.
| Camtek IL: CAMTEK Ltd. By: ______________________________________ Name: Rafi Amit Title: CEO Camtek GER:
Citus 49. GmbH By: ______________________________________ Name: Rafi Amit Title: Managing Director |
[Signature Page to Share Purchase Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Share Purchase Agreement on the date first above written.
| Seller: FormFactor GmbH By: ______________________________________ Name: Jens Klattenhoff Title: Managing Director Parent: FormFactor, Inc. By: ______________________________________ Name: Mike Slessor Title: Chief Executive Officer Company: FRT GmbH By: ______________________________________ Name: Thomas Fries Title: Managing Director |
[Signature Page to Share Purchase Agreement]
CERTAIN DEFINITIONS
For the purposes of this Agreement the following capitalized terms shall have the meanings set forth below (which shall apply equally to both the singular and plural forms of such terms):
“Accounting Firm” has the meaning set forth in Section 1.7(d).
“Accounts Receivables” means accounts receivable, bills receivable, trade accounts, accrued but un-invoiced accounts receivable, refunds and rebates receivable, security, claim, less allowance for doubtful accounts determined on a consistent basis, all in accordance with US GAAP.
“Acquisition Proposal” means, with respect to the Company, any agreement, offer, proposal or bona fide indication of interest (other than this Agreement or any other offer, proposal or indication of interest by Purchaser), or any public announcement of intention to enter into any such agreement or of (or intention to make) any offer, proposal or bona fide indication of interest, relating to, or involving: (i) any acquisition or purchase from the Company, or from Seller or Parent, by any Person or group (as such term’s meaning set forth in Section 13(D) of the Securities Exchange Act of 1934, as amended, the rules and regulations thereunder and related case law) of any securities of the Company or any merger, consolidation, business combination or similar transaction involving the Company; (ii) any sale, lease, mortgage, pledge, exchange, transfer, license (other than in the ordinary course of business consistent with past practice), acquisition, or disposition of the assets of the Company in any single transaction or series of related transactions, other than in the ordinary course of business consistent with past practice; or (iii) any liquidation, dissolution, recapitalization or other significant corporate reorganization of the Company, or any extraordinary dividend, whether of cash or other property.
“Action” means any claim, action, cause of action, suit, litigation, demand, tender of indemnity, inquiry, proceeding, audit or investigation, including by or before any Governmental Entity, or any other arbitration, mediation or similar proceeding of any nature, whether civil, criminal, administrative, regulatory or otherwise.
“Additional Employees” means any of the employees listed on Exhibit H who are not Company Employees but shall transfer to Purchaser (or an Affiliate of Purchaser, including the Company) pursuant to the agreement between the Parties effective as of the Closing Date.
“Affiliate” means, with respect to any Person, a Person that, directly or indirectly, through one or more intermediaries controls, is controlled by or is under common control with the first-mentioned Person. For the purposes of this definition, “control,” including the terms “controlled by” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, as trustee or executor, as general partner or managing member, by Contract or otherwise, including the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person, provided, however, that with respect to Parent, Seller or Purchaser, “Affiliate” shall only mean Parent and the Camtek IL (respectively) and any entity controlled by Parent and the Camtek IL (respectively).
“Agreement” has the meaning set forth in the Preamble.
“Applicable Anti-Corruption Laws” has the meaning set forth in Section 2.24(a).
“Applicable Law” means, with respect to any Person, any Law existing as of the date hereof or as of the Closing applicable to such Person or any of its respective properties, assets, managing directors, officers, directors, employees, consultants or agents.
“Automatic Transfer Employee” means those Additional Employees who will become employed by Purchaser or one of its Affiliates as of the Closing Date as a result of local employment Laws, including applicable Transfer Regulations, that provide for an automatic transfer by operation of
|
| A-1
| Law of the employment of any such Additional Employees upon the transfer of the Company as a going concern pursuant to the transactions contemplated by this Agreement. |
“Balance Sheet” has the meaning set forth in Section 2.11.
“Benefits” has the meaning set forth in Section 2.13(a)(i).
“Business” has the meaning set forth in Section 4.9(a)(i).
“Business Day” means a day, other than a Saturday or Sunday, on which banks are open for business in San Francisco (California), Tel Aviv (Israel) and Cologne (Germany).
“Business Employees” mean, together, the Company Employees and the Additional Employees.
“Carve-Out Employees” means the Company Employees that are listed in Exhibit I.
“Cash” means all cash held by the Company.
“Claim Amount” has the meaning set forth in Section 6.3(a).
“Claim Notice” has the meaning set forth in Section 6.3(a).
“Closing” has the meaning the forth in Section 1.3(a).
“Closing Cash” means Cash as of the Closing Date.
“Closing Date” has the meaning the forth in Section 1.3(a).
“Closing Indebtedness” means Indebtedness as of the Closing Date.
“Closing Net Working Capital” means Net Working Capital as of the Closing Date.
“Closing Net Working Capital Adjustment” means, (i) if the Closing Net Working Capital is an amount between the Target Working Capital Bottom Collar and the Target Working Capital Top Collar, US$ 0, (ii) if the Closing Net Working Capital is an amount equal to or greater than the Target
Working Capital Top Collar, an amount equal to Closing Net Working Capital minus Target Working
Capital, or (iii) if the Closing Net Working Capital is an amount equal to or less than the Target Working Capital Bottom Collar, an amount equal to Closing Net Working Capital minus Target Working Capital.
“Closing Transaction Expenses” means the Transaction Expenses as of the Closing Date.
“Code” means the United States Internal Revenue Code of 1986, as amended.
“Company” has the meaning set forth in the Preamble.
“Company Core Software Assets” means Software that the Company licenses to users or to which the Company provides users access, or that the Company uses, in part or in whole, as a platform to provide services to users, and all Software tools used by the Company to develop, distribute or make available, maintain and enhance, any of the foregoing.
“Company Operating Plan” has the meaning set forth in Section 2.10(d).
“Company Releasees” has the meaning set forth in Section 4.16(a).
“Company Employee” means each individual who is directly employed by the Company at the date hereof or who becomes directly employed by the Company until the Closing Date within the ordinary course of business, with the exclusion of any Additional Employee.
“Company Employee Contracts” has the meaning set forth in Section 2.14(b).
“Company Forecast” means the Company’s 2023 updated forecast, dated August 22, 2023.
“Company Intellectual Property Rights” has the meaning set forth in Section 2.17(a)(iv).
“Company Permits” has the meaning set forth in Section 2.9(b).
“Company Privacy Policy” means each written information security plan, and each published or internal, past or present privacy policy of the Company, including any policy or practice relating to: (A) the privacy of users of any website of the Company; (B) the collection, storage, disclosure and transfer of any User Data or Personal Data; and (C) any employee information.
“Company Products” means all products and services (including manufacturing and design services) manufactured, designed, developed, distributed, hosted, sold, marketed, licensed, supplied, or otherwise provided or offered to actual or potential customers or currently supported by the Company, by or for the Company (including all models, versions and releases thereof, whether already distributed or provided, under development, planned or conceived, or otherwise), together with any related documentation, materials, or information, including the Company Core Software Assets.
“Company Software” means Software that is (or that the Company purports is) owned in whole or in part by or exclusively licensed in whole or part to the Company.
“Confidentiality Agreement” means the Non-Disclosure Agreement, dated February 5, 2023, between the parties.
“Confidential Information” has the meaning set forth in the Confidentiality Agreement.
“Continuing Contractors” has the meaning set forth in Section 4.10(g).
“Consulting Agreement” has the meaning assigned in the preamble of this Agreement.
“Contract” means any contract, agreement, instrument, option, lease, license, sales and purchase order, warranty, note, bond, mortgage, indenture, obligation, commitment, binding application, and all other agreements commitments, arrangement or understanding, whether written or oral, express or implied, in each case as amended and supplemented from time to time.
“Copyrights” means any U.S. and non-U.S. copyrights and rights in mask works (including any registrations and applications therefor and whether registered or unregistered), database rights, moral rights, neighboring rights and similar intellectual property rights, including any of the foregoing that may vest in any design or other Trademark, and all other rights with respect to Works of Authorship, and all registrations thereof and applications for registration thereof.
“Covenant Expiration Date” has the meaning set forth in Section 6.1(b)(iii).
“Cure Period” has the meaning set forth in Section 4.9(f)(ii).
“Data Protection Laws” means all Applicable Laws, third party contractual terms and Company Privacy Policies relating to privacy, data protection and data security, including with respect to the collection, storage, transmission, transfer (including cross-border transfers), disclosure and use of User Data and Personal Data.
“Data Room” means the virtual data room hosted by iDeals from June 5, 2023 to September 16, 2023.
“Deferred Revenue” means all deferred revenue, unearned revenue and all amounts received or invoiced in advance of performance under contracts, or otherwise received for goods or services not yet provided, and not yet recognized as revenue.
“Designated Account” has the meaning set forth in Exhibit D.
“Disclosure Schedule” has the meaning set forth in the introduction of Article II.
“DPLTA Financial Statement” has the meaning set forth in Section 4.4(d).
“DPLTA Seller Claim” has the meaning set forth in Section 4.4(d).
“DPLTA Seller Liability” has the meaning set forth in Section 4.4(d).
“DPLTA Termination Date” has the meaning set forth in Section 4.4(b).
“Dollars” means the lawful currency of the United States of America, and all references to monetary amounts herein shall be in Dollars unless otherwise specified herein.
“Economic Sanctions” means the economic sanctions laws, regulations, embargoes or restrictive measures administered, enacted, or enforced by any Sanctions Authority.
“Employee Contract Templates” has the meaning set forth in Section 2.14(b).
“Employee Plans” has the meaning set forth in Section 2.13(a).
“Employment Arrangements” has the meaning set forth in the Recitals.
“Encumbrance” means any charge, claim, limitation, condition, equitable interest, mortgage, lien, option (including any right to acquire, right of pre-emption or conversion), pledge, hypothecation, license, security interest, title retention, easement, encroachment, right of first refusal or negotiation, adverse claim or restriction of any kind, including any restriction on or transfer or other assignment, as security or otherwise, of or relating to use, quiet enjoyment, voting, transfer, receipt of income or exercise of any other attribute of ownership, or any agreement to create any of the foregoing; provided, however, that the term “Encumbrance” shall not include (i) statutory liens for Taxes that are not yet due and payable or are being contested in good faith by any appropriate proceedings and for which adequate reserves have been established on the Company Balance Sheet in accordance with US GAAP, (ii) statutory or common law liens in favor of carriers, warehousemen, mechanics and materialmen, to secure claims for labor, materials or supplies and other like liens (all such Encumbrances, “Permitted Encumbrances”).
“Environmental Law” means any Applicable Laws relating to (i) releases or threatened releases of Hazardous Substances or materials containing Hazardous Substances; (ii) the manufacture, handling, transport, use, treatment, storage or disposal of Hazardous Substances or materials containing Hazardous Substances; (iii) pollution or protection of the environment, health, safety or natural resources; or (iv) disposal or recycling of Company Products.
“Environmental Permits” has the meaning set forth in Section 2.16(b).
“Equity Incentives” has the meaning set forth in Section 4.10(f).
“Estimated Closing Cash” has the meaning set forth in Section 1.5(a).
“Estimated Closing Indebtedness” has the meaning set forth in Section 1.5(a).
“Estimated Closing Net Working Capital” has the meaning set forth in Section 1.5(a).
“Estimated Closing Net Working Capital Adjustment” means, (i) if the Estimated Closing Net Working Capital is an amount between the Target Working Capital Bottom Collar and the Target Working Capital Top Collar, US$ 0, (ii) if the Estimated Closing Net Working Capital is an amount equal to or greater than the Target Working Capital Top Collar, an amount equal to Estimated Closing Net Working Capital minus Target Working Capital, or (iii) if the Estimated Closing Net Working Capital is an amount equal to or less than the Target Working Capital Bottom Collar, an amount equal to Estimated Closing Net Working Capital minus Target Working Capital.
“Estimated Purchase Price” has the meaning set forth in Section 1.4.
“Estimated Transaction Expenses” has the meaning set forth in Section 1.5(a).
“Excluded Employees” has the meaning set forth in Section 4.10(a).
“Export Control Laws” means (i) all U.S. import and export Laws (including those Laws under the authority of U.S. Departments of Commerce (Bureau of Industry and Security) codified at 15 CFR, Parts 700-799; Homeland Security (Customs and Border Protection) codified at 19 CFR, Parts 1-199; State (Directorate of Defense Trade Controls) codified at 22 CFR, Parts 103, 120-130; and Treasury (Office of Foreign Assets Control) codified at 31 CFR, Parts 500-599) and (ii) all comparable Applicable Laws outside the United States.
“Financial Statements” has the meaning set forth in Section 2.10.
“Fundamental Claims Expiration Date” has the meaning set forth in Section 6.1(b)(i).
“fraud” means common law fraud under New York law in the making of a specific representation or warranty expressly set forth in this Agreement.
“Fundamental Representations” mean, collectively, Section 2.1 (Ownership of the Shares), Section 2.2 (Authority), Section 2.3 (Organization and Qualification), Section 2.6 (Insolvency) Section 2.8 (Capitalization), and Section 2.27 (Brokers).
“German Transfer Deed” has the meaning set forth in Section 1.3(b)(iii).
“GmbHG” means the German Act on Companies with Limited Liability (Gesetz betreffend die Gesellschaften mit beschränkter Haftung).
“Government Contract” means (i) any Contract of the Company or pursuant to which its properties are assets are bound to which any Governmental Entity is party or is otherwise bound and (ii) any Contract pursuant to which the Company participates in any program involving a Governmental Entity or is entitled to any right or benefit (including Tax subsidies) provided by any Governmental Entity.
“Government Officials” has the meaning set forth in Section 2.24(b).
“Governmental Entity” means any federal, national, supranational, state, provincial, local or similar government, governmental, regulatory, administrative or quasi-governmental authority, branch, office agency, commission or other body, or any court, tribunal, or arbitral or judicial body (including any grand jury), whether domestic or foreign.
“Governmental Order” means any executive order, injunction, judgment, decree, writ, order or other requirement issued by any Governmental Entity, or pursuant to any binding arbitration, mediation or similar proceeding.
“Hazardous Substances” means (i) those substances defined in or regulated under the Hazardous Materials Transportation Act, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Clean Water Act, the Safe Drinking Water Act, the Atomic Energy Act, the Federal Insecticide, Fungicide, and Rodenticide Act and the Clean Air Act, and their state counterparts, as each may be amended from time to time, and all regulations thereunder; (ii) petroleum and petroleum products, including crude oil and any fractions thereof; (iii) natural gas, synthetic gas, and any mixtures thereof; (iv) polychlorinated biphenyls, asbestos and radon; (v) any other pollutant or contaminant; and (vi) any substance, material or waste regulated by any Governmental Entity pursuant to any Environmental Law.
“HMT” means Her Majesty’s Treasury.
“ICC Rules” has the meaning set forth in Section 8.6.
“Inbound License Agreement” means any agreement granting to the Company any license or other right in, any right to use or otherwise practice or exploit, or any covenant not to sue for infringement or misappropriation of, any Intellectual Property Right or Technology.
“Indebtedness” means the sum of the following: (i) indebtedness of the Company for borrowed money, including convertible debt; (ii) obligations of the Company evidenced by bonds, debentures, notes or other similar instruments; (iii) obligations of the Company in respect of letters of credit or other similar instruments (or reimbursement agreements in respect thereof) or banker’s acceptances; (iv) any acceleration, termination fees, pre-payment fees, balloons or similar payments on any of the foregoing; (v) liabilities and provisions for Taxes; (vi) all accrued interest on any of the foregoing; (vii) all obligations in respect of Deferred Revenue, (viii) all intercompany payables for distributions declared but not paid in accordance with pooling arrangement and any tax amounts which arises or is incurred in respect of such payment or declaration prior to Closing (ix) “change of control” bonuses, retention bonuses and any earn-out or other deferred payments owed as a result of the Transaction; and (x) all obligations to pay severance or termination pay or benefits (and any related Taxes payable by the Company) relating to the termination of employment or service of any employee, director or independent contractor of the Company occurring prior to the Closing. Notwithstanding the foregoing, “Indebtedness” shall not include (y) Transaction Expenses, or (z) except as provided in clause (v) of this sentence, accounts payable not yet due, trade payables and similar liabilities or accruals that do not represent indebtedness for borrowed money and are incurred in the ordinary course of business consistent with past practice.
“Indemnitees” has the meaning set forth in Section 6.2(a).
“Insurance Policies” means insurance policies held by the Company.
“Intellectual Property Rights” means any and all rights (anywhere in the world, whether statutory, common law or otherwise) relating to, arising from, or associated with intellectual property or industrial property, including (i) Patents; (ii) Copyrights; (iii) Technology; (iv) other rights with respect to Software, including registrations thereof and applications therefor; (v) industrial design rights and registrations thereof and applications therefor; (vi) rights with respect to Trademarks, and all registrations thereof and applications therefor; (vii) rights with respect to Domain Names, including registrations thereof and applications therefor; (viii) rights with respect to Trade Secrets, including rights to limit the use or disclosure thereof by any Person; (ix) rights with respect to Databases, including registrations thereof and applications therefor; (x) publicity and privacy rights, including all rights with respect to use of a Person’s name, signature, likeness, image, photograph, voice, identity, personality, and biographical and personal information and materials; and (xi) any rights equivalent or similar to any of the foregoing.
“Intercompany Receivables” means accounts receivables billed by the Company or by Parent or their Affiliates on behalf of the Company, which are outstanding all in accordance with US GAAP.
“Interim Financial Statements” has the meaning set forth in Section 2.10.
“Inventory” means raw materials, semi-finished and finished goods inventory, all spare parts held in third party or related party warehouses, less provision for obsolescence determined on a consistent basis, all in accordance with US GAAP.
“Israeli Sanctions” means economic or financial sanctions, restrictive measures, trade embargoes or sanctions-related export control laws imposed, administered or enforced from time to time by any Israeli sanctions authority, including the Israeli Ministry of Finance and the Israeli Ministry of Defense.
“Key Employees” has the meaning set forth in the Recitals.
“Labor and Employment Laws” means all Applicable Laws regarding labor and employment, including those related to employment practices, classification of employees, terms and conditions of employment, wages and hours, leaves of absence, collective bargaining, equal opportunity, occupational health and safety, workers’ compensation, immigration, individual and collective consultation, notice of termination and redundancy and the payment of social security and other Taxes, in each case.
“Law” means any statute, law, treaty, ordinance, regulation, directive, rule, code, executive order, injunction, judgment, decree, writ, order or other requirement, including any successor provisions thereof, of any Governmental Entity.
“Leased Real Property” means all Real Property leased, subleased or licensed to the Company or which the Company otherwise has a right or option to use or occupy.
“Liability” means, with respect to any Person, any liability or obligation of such Person of any kind, character or description, whether known or unknown, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, executory, determined, determinable or otherwise and whether or not the same is required to be accrued on the financial statements of such Person.
“Losses” means, solely to the extent reasonably foreseeable, any and all deficiencies, judgments, settlements, Actions, assessments, Liabilities, Taxes, losses, damages, interest, fines, penalties, costs, expenses (including legal, accounting and other costs and expenses of professionals), any of the foregoing or matters arising out of or relating to the foregoing, and in seeking indemnification therefor and interest on any of the foregoing from the date incurred until paid at the prime rate published from time to time by the Wall Street Journal.
“Made Available” has the meaning set forth in Section 8.13.
“Material Adverse Effect” means any event, circumstance, occurrence, change, effect or fact (each, an “Effect”) that, individually or in the aggregate, results in or would reasonably be expected to result in, a material adverse effect on or a material adverse change in the business, Liabilities, properties, assets, condition (financial or otherwise), operations or results of operations of the Company; provided, however, that the following will not be taken into account in determining whether there has been a Material Adverse Effect: (i) any Effect demonstrated by the Company to be directly caused by actions expressly required to be taken (or omitted to be taken) under this Agreement (to which the Company fully complies and within the limits of the specific terms thereunder) and, in all respects, in mere compliance thereof; (ii) any Effect that has persisted before (unless stipulated otherwise hereinafter) or will occur after the date hereof following or resulting from geopolitical conditions, any outbreak or escalation of war (including Russia’s war against Ukraine) or major hostilities or any act of sabotage or terrorism or natural or man-made disasters or other force majeure events (including pandemics); (iii) changes generally affecting the U.S. or global economy, financial or securities markets; (iv) changes generally affecting the industry and markets in which the Company operates; (v) any change after the date hereof of any Law, GAAP or any other accounting standard applicable to the Company or any of its properties, or the enforcement or interpretation thereof; (vi) the failure by the Company to achieve any financial projection (but not the underlying causes thereof); (vii) the announcement, execution or delivery of this Agreement or the pendency or consummation of the transactions contemplated hereby; (viii)(A) any action taken by Parent, Seller or the Company at Purchaser’s written direction or (B) the failure to take any action referred to in Section 4.2 that was not taken by Parent, Seller or the Company because Purchaser withheld its consent (provided that such consent was not reasonably withheld by Purchaser); or (ix) any action by the Company that is expressly contemplated by this Agreement.
“Material Contracts” has the meaning set forth in Section 2.21(a).
“Net Working Capital” means (a) the aggregate amount of the current assets of the Company; minus (b) the aggregate amount of the current liabilities of the Company (with exception of Deferred Revenues and other current liabilities which are not in the ordinary course of business), in each case, in line with the illustration set forth in Schedule A-2 and calculated in accordance with US GAAP.
“Notice of Disagreement” has the meaning set forth in Section 1.7(b).
“OFAC” means the Office of Foreign Assets Control.
"Offered Employees” means each Additional Employee who is not an Automatic Transfer Employee.
“Open Source Technology” means Software or other subject matter that is distributed under an open source license or freeware or trial ware or other similar licensing model such as (by way of example only) the GNU General Public License, GNU Lesser General Public License, Apache License, Mozilla Public License, BSD License, MIT License, Common Public License, any derivative of any of the foregoing licenses, any other license approved as an open source license by the Open Source Initiative, or any license that requires, as a condition of exploitation, that other Software that is integrated or bundled with, linked with, used in the development or compilation of, or otherwise used in or with such Software, be (i) disclosed or distributed in source code form, (ii) licensed for the purpose of making derivative works, or (iii) made available in connection with any license, sublicense or distribution of such Software at no charge or minimal charge.
“Outbound License Agreement” means any agreement under which the Company grants licenses or other rights in, rights to use or otherwise practice or exploit, or any covenants not to sue for infringement or misappropriation of, any Intellectual Property Right, including Open Source Technology.
“Owned Real Property” means Real Property and any rights equivalent to real property (grundstücksgleiche Rechte) including condominiums (Wohnungseigentum), hereditary building rights (Erbbaurechte), usufruct of real property (Nießbrauch) and buildings on third party property (Bauten auf fremden Grundstücken) owned in whole or in part by the Company.
“Patents” means any U.S. and non-U.S. patents and patent applications (including any continuations, continuations in part, divisionals, reissues, renewals and applications for any of the foregoing), inventor’s certificates, utility model rights and similar rights, petty patents and applications therefor, including all rights to sue and collect damages for past, present and future infringements thereof.
“Permits” means any permits, licenses, franchises, approvals, certificates, consents, waivers, qualifications, concessions, exemptions, variances, orders, registrations, notices or other similar authorizations of any Governmental Entity.
“Permitted Business Combination” has the meaning set forth in Section 4.9(b)(ii).
“Person” means an individual, corporation, partnership, limited liability company, association, trust, unincorporated organization or other legal entity including any Governmental Entity.
“Personal Data” means any information that relates to an identified or identifiable individual, or that may be used to identify an individual, including name, street address, telephone number, email address, photograph, social security number, driver’s license number or data collected through an automated license plate recognition system, passport number, financial account information, username and password combinations or customer or account number.
“Post-Closing Covenants” has the meaning set forth in Section 6.1(b)(iii).
“Post-Closing Covenant Expiration Date” has the meaning set forth in Section 6.1(b)(iii).
“Post-Closing Statement” has the meaning set forth in Section 1.7(a).
“Pre-Closing Covenants” has the meaning set forth in Section 6.1(b)(iii).
“Pre-Closing Covenant Expiration Date” has the meaning set forth in Section 6.1(b)(iii).
“Pre-Closing Period” has the meaning set forth in Section 4.1.
“Pre-Closing Tax Period” means any taxable period ending on or before the Closing Date including the portion of any Straddle Period ending on the Closing Date.
“Prohibited Person” means a Person that is (A) listed on, or owned or controlled by a person listed on, or acting on behalf of a person listed on, any Sanctions List; (B) located in, incorporated under the Laws of, or owned (directly or indirectly) controlled by, or acting on behalf of, a person located in or organized under the Laws of a country or territory that is the target of country-wide or territory-wide Economic Sanctions; or (C) otherwise the target of Economic Sanctions.
“Purchase Price” has the meaning set forth in Section 1.4.
“Purchaser” has the meaning set forth in the Preamble.
“Purchaser Employee Liability” has the meaning set forth in Section 4.10(b).
“Real Property” means all land, together with all buildings, structures, improvements and fixtures located thereon, including all electrical, mechanical, plumbing and other building systems, fire protection, security and surveillance systems, telecommunications, computer, wiring, and cable installations, utility installations, water distribution systems, and landscaping, together with all easements and other rights and interests appurtenant thereto (including air, oil, gas, mineral, and water rights).
“Related Party” with respect to any specified Person, means: (i) any Affiliate of such specified Person, or any managing director, director, executive officer, general partner or managing member of such Affiliate; (ii) any Person who serves as a managing director, director, executive officer, partner, member or in a similar capacity of such specified Person; (iii) any Immediate Family member of a Person described in clause (ii); or (iv) any other Person who holds, individually or together with any Affiliate of such other Person and any member(s) of such Person’s Immediate Family, more than five percent (5%) of the outstanding equity or ownership interests of such specified Person. For the purposes of this definition, “Immediate Family,” with respect to any specified Person, means such Person’s spouse, parents, children and siblings, including adoptive relationships and relationships through marriage, or any other relative of such Person that shares such Person’s home.
“Representation and Warranty Policy” means the representation and warranty insurance policy taken out by Purchaser from Beazley Furlonge Ltd. dated September 17, 2023, attached hereto as Exhibit G, which will be bound immediately at the signing of the Agreement.
“Representatives” means, subject to any expansion under this Agreement, with respect to any Person, such Person’s managing directors, officers, directors, principals, employees, advisors, auditors, agents, bankers and other representatives.
“Required Disclosing Party” has the meaning set forth in Section 4.6(a).
“Resolution Period” has the meaning set forth in Section 4.9(f)(iii).
“Restricted Period” has the meaning set forth in Section 4.9(a).
“Restructured Assets” has the meaning set forth in Section 4.18(a).
“Restructuring Activities” has the meaning set forth in Section 4.18(a).
“Sanctions Authority” means any of: (A) the United States Government; (B) the United Nations; (C) the United Kingdom; or (D) the European Union; and includes any government entity of any of the above, including, but not limited to, OFAC, the United States Department of State, and HMT.
“Sanctions List” means (A) the List of Specially Designated Nationals and Blocked Persons maintained by OFAC; (B) the Consolidated List of Financial Sanctions Targets and the Investment Ban List maintained by HMT; or (C) any similar list maintained by, or public announcement of Sanctions designation made by, any other Sanctions Authority.
“Seller” has the meaning set forth in the Preamble.
Seller Employee Liabilities” has the meaning set forth in Section 4.10(b).
“Seller Releasees” has the meaning set forth in Section 4.16(b).
“Seller’s Knowledge” or any similar phrase means, with respect to any fact or matter, the knowledge, after due and diligent inquiry, of the managing directors and the employees of Parent, Seller and/or Company set forth in Schedule A-1; provided, however, for purposes of the first sentence of Section 2.14(e), the first sentence of Section 2.16(b), the second sentence of Section 2.17(c), Section 2.18(a) and Section 2.18(c), “Seller’s Knowledge” or any similar phrase means the knowledge, after due and diligent inquiry, of any fact or matter learned by the managing directors and the employees of Parent, Seller and/or Company set forth in Schedule A-1 at or in connection with due diligence, negotiations and/or the execution of the sale and purchase agreement regarding all shares in the Company, dated October 9, 2019 or thereafter.
“Share Sale” has the meaning set forth in the Recitals.
“Shares” has the meaning set forth in the Recitals.
“Short Fiscal Year” has the meaning set forth in Section 4.4(b).
“Software” means any and all (i) computer programs, including any and all software implementations of algorithms, heuristics, models and methodologies, whether in source code or object code, (ii) testing, validation, verification and quality assurance materials, (iii) databases, conversions, interpreters and compilations, including data and any collections of data, whether machine readable or otherwise (“Databases”), (iv) descriptions, schematics, flow-charts and other work product used to design, plan, organize and develop any of the foregoing, (v) all documentation, including user manuals, web materials and architectural and design specifications and training materials, relating to any of the foregoing, (vi) software development processes, practices, methods and policies recorded in permanent form, relating to any of the foregoing, and (vii) performance metrics, sightings, bug and feature lists, build, release and change control manifests recorded in permanent form, relating to any of the foregoing.
“Straddle Period” means any Tax period beginning on or before and ending after the Closing Date.
“Subrogation Waiver” has the meaning set forth in Section 4.15.
“Systems” means the computer, information technology and data processing systems, facilities and services used by or for the Company, including all Software, hardware, networks, communications facilities, platforms and related systems and services, whether outsourced, cloud based or otherwise.
“Target Working Capital” means US$ 9,317,000.
“Target Working Capital Bottom Collar” means an amount equal to .97 multiplied by the Target Working Capital.
“Target Working Capital Top Collar” means an amount equal to 1.03 multiplied by the Target Working Capital.
“Tax” means (i) all direct and indirect statutory, governmental, federal, state, local, municipal, foreign and other net income, gross income, gross receipts, sales, use, ad valorem, value added, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, unclaimed property, escheat, windfall profits, customs, duties or other taxes, contributions, rates, levies (including social security), fees, assessments or charges of any kind whatsoever, whether disputed or not, together with any interest and any penalties, additions to tax or additional amounts with respect thereto or in lieu thereof, (ii) any Liability for payment of amounts described in clause (i) whether as a result of transferee or successor Liability, of being a member of an affiliated, consolidated, combined, unitary or similar group for any period, or otherwise, and (iii) any Liability for the payment of amounts described in clauses (i) or (ii) as a result of any tax sharing, tax indemnity or tax allocation agreement or any other express or implied agreement to indemnify any other Person.
“Tax Item of Seller’s Interest” has the meaning set forth in Section 4.12(c).
“Tax Return” means any written or electronic return, certificate, declaration, notice, report, statement, information statement and document filed or required to be filed with respect to Taxes, amendments thereof, and schedules and attachments thereto.
“Tax Returns of Seller’s Interest” has the meaning set forth in Section 4.12(c).
“Taxing Authority” means any Governmental Entity having authority with respect to the assessment, collection and enforcement of Taxes.
“Technology” means any and all (i) technology, formulae, algorithms, procedures, processes, methods and methodologies, models, techniques, know how, ideas, creations, concepts, inventions, discoveries, improvements, and invention disclosures (whether patentable or unpatentable and whether or not reduced to practice); (ii) technical, engineering, manufacturing, product, marketing, servicing, financial, supplier, personnel and other information and materials; (iii) customer lists, customer contact and registration information, customer correspondence and customer purchasing histories; (iv) specifications, designs, models, devices, prototypes, schematics and development tools; (v) Software, websites, user interfaces, content, images, graphics, text, photographs, artwork, audiovisual works, sound recordings, graphs, drawings, reports, analyses, writings, and other works of authorship and copyrightable subject matter or subject matter entitled to mask work protection (“Works of Authorship”); (vi) domain names, uniform resource locators and other names and locators associated with the Internet (“Domain Names”); (vii) social media and mobile communications accounts, identifiers, user names, handles or short code designations (“Social Media”); and (viii) Trade Secrets.
“Termination Date” has the meaning set forth in Section 7.1(b).
“Third Party Claim” has the meaning the forth in Section 6.3(d).
“Top Customers” has the meaning set forth in Section 2.26(a).
“Top Distributors” has the meaning set forth in Section 2.26(a).
“Top Suppliers” has the meaning set forth in Section 2.26(a).
“Trade Secrets” means any information, including any formula, pattern, compilation, program, device, method, technique, or process, that (x) derives independent economic value, actual or potential, from not being generally known to the public or to other Persons who can obtain economic value from its disclosure or use and (y) is the subject of efforts to maintain its secrecy.
“Trademarks” means any U.S. and non-U.S. (including state, national or supranational) registered and unregistered trademarks, service marks, trade dress, trade names, domain names, general intangibles of like nature, and other indicia of source, origin, endorsement, sponsorship or certification, designs, industrial designs, product packaging shape, and other elements of product and product packaging appearance together with all registrations and applications for registration of any of the foregoing and all goodwill related to any of the foregoing.
“Transfer Regulations” means, the Transfer of Undertaking (Protection of Employment) Regulations 2006 and any other Law implementing in any jurisdiction the European Council Directive 2001/23/EC on the approximation of the Laws of EU Member States relating to the safeguard of employees’ rights in the event of transfer of undertakings, business or parts of undertakings or businesses as amended or replaced from time to time, or any Law of the same or similar effect in any jurisdiction.
“Transaction Documents” means this Agreement, the Disclosure Schedule, the Employment Arrangements, the Consulting Agreement, and, in each case, including all schedules and exhibits, certificates, documents and instruments contemplated thereto made in accordance with the respective terms hereof and thereof.
“Transaction Expenses” means (a) the aggregate amount of all unpaid legal, Tax, accounting, financial advisory, investment banking, and other professional fees and expenses incurred by the Company in connection with the consummation of the Share Sale contemplated hereby, (b) all unpaid bonuses, incentive compensation, commissions, termination payments, retention or other change in control, separate, tax gross up or other transaction-related payments to be paid by the Company to any employee or service provider in connection with the transactions contemplated by this Agreement (whether or not in connection with any other contingency (including any termination of service)), including the employer portion of any Taxes relating to such payments; (c) one-half of the costs and expenses relating to the Representation and Warranty Policy, including the total premium, underwriting costs, and brokerage commissions in an amount not to exceed US$ 229,200 (total premium, including underwriting fees and taxes: US$ 458,400) and as stipulated in Section 6.4; and (d) any Taxes incurred or payable on any of the foregoing.
“Transfer Taxes” means any statutory, governmental, federal, state, local, municipal, foreign and other transfer, documentary, real estate transfer, mortgage recording, gross receipts, sales, use, stamp, registration, value-added and other similar Taxes, and all conveyance fees, recording charges and other fees and charges (including any penalties and interest) incurred in connection with the transactions contemplated by this Agreement.
“Transferred Employee” has the meaning set forth in Section 4.10(a).
“US GAAP” means generally accepted accounting principles in effect from time to time in the United States of America.
“Unvested Equity Incentives” has the meaning set forth in Section 4.10(f).
“Unvested RSUs” has the meaning set forth in Section 4.10(f).
“User Data” means any Personal Data or other data or information collected by or on behalf of the Company related to users of the Company Products, including from users of any website or online offering of the Company.
“VAT” has the meaning set forth in Section 2.20(p).
Exhibits and Schedules Omitted.
