(i) All EPITAXX Shares outstanding immediately prior to
the Effective Time shall be converted into and become the right to receive the
Merger Consideration (as defined in Section 1.4 below).
(ii) Each share of the common stock of Newco, $0.001 par
value per share ("Newco Common Stock"), outstanding immediately prior
to the Effective Time shall be converted into and become one validly issued,
fully paid and nonassessable share of Class A Common Stock (as hereinafter
defined).
(f) Options. At the Effective Time, any and all
outstanding and unexercised Employee Options shall cease to represent a right to
acquire shares of the Company's capital stock and shall be converted
automatically into options to purchase shares of Acquiror Common Stock
("Acquiror Options") in an amount and at an exercise price determined
as provided below:
(i) The number of shares of Acquiror Common Stock
subject to the new Acquiror Option shall be equal to the product of the number
of EPITAXX Shares subject to the Employee Option and the Exchange Ratio;
provided that any fractional shares of Acquiror Common Stock resulting from such
multiplication shall be rounded down to the nearest share; and
(ii) The exercise price per share of Acquiror Common
Stock under the Acquiror Option shall be equal to the quotient obtained by
dividing the exercise price per EPITAXX Share subject to the Employee Option by
the Exchange Ratio, provided that such exercise price shall be rounded to the
nearest cent. For this purpose, each EPITAXX Share issuable pursuant to an
Employee Option that is outstanding at the Effective Time will be deemed to be
outstanding immediately prior to the Effective Time. From and after the
Effective Time, the Stock Option Plans (as defined below) shall be assumed by
Acquiror and shall continue in effect, provided that no further options shall be
granted under the Stock Option Plans.
(iii) All shares of Acquiror Common Stock subject to
each New Acquiror Option shall be included in Acquiror's Registration Statement
on Form S-8 filed under the Securities Act of 1933, as amended (the
"Securities Act"), which Acquiror shall file with the Securities and
Exchange Commission no later than fifteen (15) days after the Effective Time, so
as to permit the immediate resale of any Acquiror Common Stock issued upon
exercise of a new Acquiror Option.
SECTION 1.6 No
Further Ownership Rights in Shares. All shares of Acquiror
Common Stock issued upon the surrender and exchange of EPITAXX Shares in
accordance with the terms hereof (including any cash paid in lieu of fractional
shares) and the cash portion of the Merger Consideration shall be deemed to have
been issued and paid in full satisfaction of all rights pertaining to such
EPITAXX Shares, and there shall be no further registration of transfers on the
records of the Surviving Corporation of EPITAXX Shares which were outstanding
immediately prior to the Effective Time.
SECTION 1.7 Lost,
Stolen or Destroyed Certificates. In the event any Certificates
shall have been lost, stolen or destroyed, the Acquiror shall issue in exchange
for such lost, stolen or destroyed Certificates, upon the making of an affidavit
of that fact by the holder thereof, such shares of Acquiror Common Stock (and
cash in lieu of fractional shares) as may be required pursuant to Section 1.2;
provided, however, that Acquiror may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed Certificates to deliver a bond in such sum as it may reasonably direct
as indemnity against any claim that may be made against Acquiror, the Surviving
Corporation or the Exchange Agent with respect to the Certificates alleged to
have been lost, stolen or destroyed.
SECTION 1.8 Tax And
Accounting Consequences. It is intended by the parties hereto
that the Merger shall constitute a taxable transaction under the Code. It is
intended by the parties that the Merger shall be accounted for under the
purchase method of accounting.
SECTION 1.9 Exemption from Registration. The
shares of Acquiror Common Stock to be issued in connection with the Merger will
be issued in a transaction exempt from registration under the Securities Act by
reason of Section 4(2) thereof. The shares of Acquiror Common Stock delivered
at the Closing will be "restricted securities" which have not been
registered under the Securities Act of 1933, as amended, and must be held until
they are either registered or an exemption from registration becomes available
for their resale. The certificates representing such Acquiror Common Stock
shall, when issued, include such restrictive legends as reasonably required by
Acquiror evidencing the foregoing restrictions and any similar restrictions
required by applicable state law. Acquiror shall use reasonable efforts to
cause such Acquiror Common Stock to be registered under the Securities Act as
provided in Section 6.3.
(i) Certificates for the EPITAXX Shares duly endorsed to
Acquiror, or accompanied by separate stock assignments with the signature of
each Stockholder duly guaranteed by a commercial bank or trust company or by a
member of the New York Stock Exchange;
(ii) The certificates required by Sections 7.2, 7.3 and
7.5;
(iii) The opinion of counsel required by Section 7.6;
(iv) A copy of the resolutions of each of the Stockholders
and the Board of Directors of each of the Company and the Principal Stockholder,
certified by its Secretary, authorizing and approving the execution, delivery
and performance of this Agreement and the transactions contemplated hereby and
the acts of the officers and employees of the Company and the Principal
Stockholder in carrying out the terms and provisions hereof; and
(v) All of the books, data, documents, instruments and
other records relating to the Company including without limitation the original
incorporation documents, foreign qualifications, by-laws, minute book, stock
record book, contracts and agreements referred to in Article II, licenses,
patent applications, trademark registrations and permits identified herein and
all laboratory notebooks and other notes and records relating to the Company's
intellectual property.
(ii) The certificates required by Sections 8.1 and
8.2;
(iii) The opinion of counsel required by Section 8.3;
and
(iv) A copy of the resolutions of the Board of Directors
of each of Acquiror and Newco, certified by their respective Secretary,
authorizing and approving the execution, delivery and performance of this
Agreement and the transactions contemplated hereby and the acts of the officers
and employees of Acquiror and Newco in carrying out the terms and provisions
hereof.
(i) The Certificate of Merger and the Non-Competition and
Confidentiality Agreements referred to in Section 5.13 hereof; and
(ii) Such further documents, resolutions, certificates and
instruments as any party or his, her or its counsel reasonably requests to
facilitate the consummation of the transactions contemplated hereby.
SECTION 2.5 Subsidiaries. The Company has no subsidiaries
other than a foreign sales corporation, EPITAXX FSC, Inc., a U.S. Virgin Island
corporation (the `Subsidiary"), which is not a material subsidiary. The
Company holds beneficially and of record all of the outstanding capital stock of
the Subsidiary. Except for the Subsidiary, the Company holds no equity or other
interest in any corporation, partnership, limited liability company, trust or
other entity. Except as set forth on Schedule 2.5 delivered by the
Company to the Acquiror concurrently with the execution of this Agreement, the
Company has not (i) made any investment in or advance of cash to any entity or
(ii) entered into any joint venture arrangement or agreement with any party.
The Subsidiary is a corporation duly organized, validly existing and in
good standing under the laws of the United States Virgin Islands, and is and is
duly licensed or qualified to transact business as a foreign corporation in each
jurisdiction where the failure to be so licensed or qualified would have a
Material Adverse Effect on the Company.
SECTION 2.10 Absence of Certain Changes. Since the date of
the Balance Sheet, the Company has conducted its business only in the ordinary
course consistent with past practices and there has not occurred: (i) any
change, event or condition (whether or not covered by insurance) that has
resulted in, or might reasonably be expected to result in, a Material Adverse
Effect to the Company; (ii) any acquisition, sale or transfer of any asset of
the Company, other than sales of inventory in the ordinary course of business;
(iii) any change in accounting methods or practices (including any change in
depreciation or amortization policies or rates) by the Company or any
revaluation by the Company of any of its assets; (iv) any Material Contract (as
hereinafter defined) entered into by the Company, or any termination or
amendment of, any Material Contract; (v) any amendment to the Company's
Certificate of Incorporation or Bylaws; (vi) any increase in or modification of
the compensation or benefits payable or to become payable by the Company to any
of its officers, directors or employees other than in the ordinary course of
business consistent with past practices; or (vii) any issuance, sale or
pledge of (A) additional shares of the Company's capital stock of any class
(including the Company Shares), or securities convertible into any such shares,
or any rights, warrants or options to acquire any such shares or other
convertible securities, or grant or accelerate any right to convert or exchange
any securities of the Company for shares of capital stock of the Company, or
(B) any other securities in respect of, in lieu of or in substitution for
shares outstanding on the date thereof; (vii) any redemption, purchase or
other acquisition of, any of the Company's outstanding securities (including the
EPITAXX Shares); (viii) any declaration, set aside, or payment of any
dividend or distribution (whether in cash, stock or property) on or in respect
of any share of capital stock of the Company; (ix) any incurrance of any
long-term debt for borrowed money or any short-term debt for borrowed money
other than in the ordinary course of business consistent with past practice and
not in excess of $50,000; (x) any capital expenditures or commitments
thereto in excess of $100,000, individually or in the aggregate; (xi) any
entering into of any new employment agreements with any officers, directors or
employees; (xii) any loan or advance to any of the Company's officers,
directors, consultants, agents or employees or to any member of their families
or any other loan or advance otherwise than in the ordinary course of business;
(xiii) any charitable contributions or any non-business expense; (xiv)
mortgaging, pledging or encumbering any of its assets; (xv) any commencing,
settling or compromising of any litigation; (xvi) any hiring or termination
of employees, other than in the ordinary course of business consistent with past
practices; (xvii) any agreement in writing or orally to take any of the
foregoing actions; or (xviii) any negotiation by the Company to do any of the
things described in the preceding clauses (i) through (xvii) (other than
negotiations with Acquiror and its representatives regarding the transactions
contemplated by this Agreement).
SECTION 2.12 Accounts Receivables. Subject to any reserves
set forth in the Balance Sheet, the accounts receivable set forth on the Balance
Sheet represent bona fide claims against debtors for sales and other charges,
are collectible in the ordinary course of business consistent with past
practices and are not subject to discount except for normal cash and immaterial
trade discounts. The amount reserved for doubtful accounts and allowances
disclosed in the Balance Sheet is sufficient to provide for any losses which may
be sustained on realization of the receivables.
(i) The term "Group" shall mean, individually
and collectively, (1) the Company, (2) the Principal Stockholder, and (3)
any individual, trust, corporation, partnership or any other entity as to which
the Company is liable for Taxes incurred by such individual or entity either as
transferee, pursuant to Treasury Regulations Section 1.1502-6, or pursuant to
any other provision of federal, territorial, state, local or foreign law or
regulations.
(ii) The term "Taxes" shall mean all taxes,
however denominated, including any interest, penalties or other additions to tax
that may become payable in respect thereof, imposed by any federal, territorial,
state, local or foreign government or any agency or subdivision of any such
government, which taxes shall include, without limiting the generality of the
foregoing, all income or profits taxes (including, but not limited to, federal
income taxes and state income taxes), payroll and employee withholding taxes,
unemployment insurance, social security taxes, sales and use taxes, ad valorem
taxes, excise taxes, franchise taxes, gross receipts taxes, business license
taxes, occupation taxes, real and personal property taxes, stamp taxes,
environmental taxes, transfer taxes, workers' compensation, Pension Benefit
Guaranty Corporation premiums and other governmental charges, and other
obligations of the same or of a similar nature to any of the foregoing, which
the Group is required to pay, withhold or collect.
(iii) The term "Returns" shall mean all reports,
estimates, declarations of estimated tax, information statements and returns
relating to, or required to be filed in connection with, any Taxes, including
information returns or reports with respect to backup withholding and other
payments to third parties.
(b) Returns Filed and Taxes Paid. Except as
disclosed in Schedule 2.13 delivered by the Company to the Acquiror concurrently
with the execution of this Agreement: All Returns required to be filed by or on
behalf of members of the Group have been duly filed on a timely basis and such
Returns are true, complete and correct. All Taxes shown to be payable on the
Returns or on subsequent assessments with respect thereto have been paid in full
on a timely basis, and no other Taxes are payable by the Group with respect to
items or periods covered by such Returns (whether or not shown on or reportable
on such Returns) or with respect to any period prior to the date of this
Agreement or an adequate reserve established therefor. Each member of the Group
has withheld and paid over all Taxes required to have been withheld and paid
over, and complied with all information reporting and backup withholding
requirements, including maintenance of required records with respect thereto, in
connection with amounts paid or owing to any employee, creditor, independent
contractor, or other third party.
(c) Pre-Closing Date Tax Liabilities Paid. Except
as disclosed in Schedule 2.13 delivered by the Company to the Acquiror
concurrently with the execution of this Agreement, the Acquiror has paid or will
pay any and all taxes which are imposed on the Company in respect of its income,
business, property or operations or for which the Company may otherwise be
liable (i) for any taxable period ending prior to the Closing Date, (ii) for the
portion of a Straddle Period (as hereinafter defined) ending on the Closing
Date, (iii) resulting by reason of the several liability of the Company pursuant
to Treasury Regulations section 1.1502-6 or any analogous state, local or
foreign law or regulation or by reason of the Company having been a member of
any consolidated, combined or unitary group on or prior to the Closing Date,
(iv) resulting from the Company ceasing to be a member of the affiliated group
(within the meaning of Section 1504(a) of the Code) that includes Principal
Stockholder, (v) in respect of any post-Closing Date period, attributable to
events, transactions, sales, deposits, services or rentals occurring, received
or performed in a pre-Closing Date period, (vi) in respect of any post-Closing
Date period, attributable to any change in accounting method employed by the
Company during any of its four previous taxable years, (vii) in respect of any
post-Closing Date period, attributable to any items of income or gain of a
partnership reporting the Company as a partner, to the extent such items are
properly attributable to periods of the partnership ending on or before the
Closing Date, (viii) attributable to any discharge of indebtedness that may
result from any capital contributions by Principal Stockholder (or an affiliate
of Principal Stockholder) to the Company of any intercompany indebtedness owed
by the Company to Principal Stockholder (or an affiliate of Principal
Stockholder), and (ix) resulting from the making of the Code Section 338
election (or analogous provision of state, local or territorial law); provided,
however, that Principal Stockholder's liability under the foregoing provisions
of this paragraph shall be reduced as to any item to the extent that such item
was specifically and fully reserved for in the Closing Balance Sheet. For
purposes of this Agreement, "Straddle Period" means a taxable period
which includes, but does not begin or end on, the Closing Date.
(d) Tax Reserves. Except as disclosed in
Schedule 2.13 delivered by the Company to the Acquiror concurrently with
the execution of this Agreement, the amount of the Company's liability for
unpaid Taxes for all periods ending on or before the date of this Agreement does
not, in the aggregate, exceed the amount of the current liability accruals for
Taxes (excluding reserves for deferred Taxes) solely with respect to the
Company, as such accruals are reflected on the Balance Sheet, and the amount of
the Company's liability for unpaid Taxes for all periods ending on or before the
Closing Date shall not, in the aggregate, exceed the amount of the current
liability accruals for Taxes (excluding reserves for deferred Taxes), as such
accruals are reflected on the Balance Sheet, as adjusted for operations and
transactions in the ordinary course of business since the Balance Sheet datein accordance with past custom and practice.
(e) Returns Furnished. Acquiror has been furnished
by Principal Stockholder or the Company true and complete copies of
(i) relevant portions of income tax audit reports, statements of
deficiencies, closing or other agreements received by the Group or on behalf of
the Group relating to Taxes, and (ii) all federal and state income or
franchise tax returns of the Company (or including the Company) for all periods
ending on and after 1995. Except as disclosed in Schedule 2.13
delivered by the Company to the Acquiror concurrently with the execution of this
Agreement, the Company is not obligated to file Returns in any jurisdiction
other than those jurisdictions for which Returns have been furnished to
Acquiror.
(f) Tax Deficiencies; Audits; Statutes of
Limitations. Except as disclosed in Schedule 2.13 delivered by the
Company to the Acquiror concurrently with the execution of this Agreement: The
returns of the Group have never been audited by a government or taxing
authority, nor is any such audit in process, pending or threatened (either in
writing or verbally, formally or informally). No deficiencies exist or have
been asserted (either in writing or verbally, formally or informally) or are
expected to be asserted with respect to taxes of the Group, and no member of the
Group has received notice (either in writing or verbally, formally or
informally) or expects to receive notice that it has not filed a return or paid
taxes required to be filed or paid by it. The Group is neither a party to any
action or proceeding for assessment or collection of taxes, nor has such event
been asserted or threatened (either in writing or verbally, formally or
informally) against the Group or any of its assets. No waiver or extension of
any statute of limitations is in effect with respect to taxes or returns of the
Group.
(g) Tax Sharing Agreements. Except as disclosed in
Schedule 2.13 delivered by the Company to the Acquiror concurrently with
the execution of this Agreement, the Company is not liable for the taxes of any
person pursuant to any tax allocation or tax sharing agreement or pursuant to
any other contract. The Principal Stockholder and the Company shall, as of the
Closing Date, terminate all tax allocation agreements or tax sharing agreements
with respect to the Company, shall cause any payments required thereunder to be
made, and shall ensure that such agreements are of no further force or effect as
to the Company on and after the Closing Date and there shall be no further
liability of the Company under any such agreement.
(h) Tax Elections and Special Tax Status. Except
as disclosed in Schedule 2.13 delivered by the Company to the Acquiror
concurrently with the execution of this Agreement: (A) the Company has not
entered into any compensatory agreements with respect to the performance of
services which payment thereunder would result in a nondeductible expense to the
Group pursuant to Sections 162(m) or 280G of the Code or an excise tax to the
recipient of such payment pursuant to Section 4999 of the Code; (B) neither
the Company nor its Subsidiary has participated in an international boycott as
defined in Code Section 999; (C) The Company has not agreed, nor is it
required to make, any adjustment under Code Section 481(a) by reason of a
change in accounting method or otherwise; (D) neither the Company nor its
Subsidiary has a permanent establishment in any foreign country, as defined in
any applicable Tax treaty or convention between the United States of America and
such foreign country; (E) neither the Company nor its Subsidiary is a party to
any joint venture, partnership or other agreement, contract or arrangement
(either in writing or verbally, formally or informally) which could be treated
as a partnership for federal income tax purposes; (F) the Company and its
Subsidiary are in compliance with the terms and conditions of any applicable Tax
exemptions, Tax agreements or Tax orders of any government to which it may be
subject or which it may have claimed, and the transactions contemplated by this
Agreement will not have any material effect on such compliance; and (F) the
Subsidiary is, and since its inception has been, an "FSC" within the
meaning of Section 922 of the Code.
(i) Tax Attributes. Except as disclosed in
Schedule 2.13 delivered by the Company to the Acquiror concurrently with
the execution of this Agreement: (A) no portion of any consolidated loss
carryover or consolidated credit carryover of the Group is allocable to the
Company; or (B) the Company has no net operating losses or other tax attributes
presently subject to limitation under Code Sections 382, 383, or 384, or the
federal consolidated return regulations.
(j) Section 6038A Compliance. Except as disclosed
in Schedule 2.13 delivered by the Company to the Acquiror concurrently
with the execution of this Agreement: (A) the Company has filed all reports and
has created and/or retained all records required under Section 6038A of the
Code with respect to its ownership by and transactions with related parties; (B)
each related foreign person required to maintain records under Section 6038A
with respect to transactions between the Company and the related foreign person
has maintained such records; (C) all documents that are required to be created
and/or preserved by the related foreign person with respect to transactions with
the Company are either maintained in the United States, or the Company is exempt
from the record maintenance requirements of Section 6038A with respect to such
transactions under Treasury Regulation section 1.6038A-1; (D) the Company is not
a party to any record maintenance agreement with the Internal Revenue Service
with respect to Section 6038A; and (E) each related foreign person that has
engaged in transactions with the Company has authorized the Company to act as
its limited agent solely for purposes of Sections 7602, 7603, and 7604 of the
Code with respect to any request by the Internal Revenue Service to examine
records or produce testimony related to any transaction with the Company, and
each such authorization remains in full force and effect.
(k) Section 338 Election. The Principal
Stockholder has the authority under the Code (and under similar provisions of
state law) to consent to an election under Code Section 338(h)(10) and
similar state elections with respect to any transaction constituting a
"qualified stock purchase" of the Company.
SECTION 2.14 Litigation. Except as set forth on
Schedule 2.14 delivered by the Company to the Acquiror concurrently with
the execution of this Agreement, there is no private or governmental action,
suit, proceeding, claim, arbitration or investigation pending before any agency,
court or tribunal, foreign or domestic, or to the knowledge of the Company,
threatened against the Company or any of its properties or any of its officers
or directors (in their capacity as such). There is no judgment, decree or order
against the Company, or, to the knowledge of the Company, any of its directors
or officers (in their capacities as such), that could prevent, enjoin, alter or
materially delay any of the transactions contemplated by this Agreement, or that
could reasonably be expected to have a Material Adverse Effect on the Company.
Schedule 2.14 also lists all litigation that the Company has pending
against other parties.
(a) Schedule 2.20 delivered by the Company to the
Acquiror concurrently with the execution of this Agreement lists (i) all
"employee benefit plans" within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
(ii) all employment agreements, including, but not limited to, any individual
benefit arrangement, policy or practice with respect to any current or former
employee or director of the Company, and (iii) all other employee benefit, bonus
or other incentive compensation, stock option, stock purchase, stock
appreciation, severance pay, lay-off or reduction in force, change in control,
sick pay, vacation pay, salary continuation, retainer, leave of absence,
educational assistance, service award, employee discount, fringe benefit plans,
arrangements, policies or practices, whether legally binding or not, to which
the Company maintains, contributes to or has any obligation to or liability for
(collectively, the "Plans"). Each Plan provides that it may be
amended or terminated at any time and, except for benefits protected under
Section 411(d) of the Code, all benefits payable to current or terminated
employees or any beneficiary may be amended or terminated by Seller at any time
without liability.
(b) None of the Plans for any "employment benefit
plan", as that term is used in Section 2.20(a), or any trade or business,
whether or not incorporated, which would be treated as a single employer under
Section 4001 of ERISA or Sections 414(b), (c), (m) or (o) of the Internal
Revenue Code of 1986, as amended (the "Code") ("Member of the
Controlled Group") is (i) a plan described in Section 3(35) of ERISA or a
plan subject to the minimum funding standards set forth in Section 302 of ERISA
and Section 412 of the Code ("Defined Benefit Plan") or (ii) a plan
described in Section 3(37) of ERISA ("Multiemployer Plan") and neither
the Company nor any Member of the Controlled Group has ever sponsored,
maintained or contributed to, or been obligated to contribute to, a Defined
Benefit Plan or contributed to, or been obligated to contribute to, a
Multiemployer Plan.
(c) The Company does not maintain or contribute to any
welfare benefit plan that provides health benefits to an employee after the
employee's termination of employment or retirement except as required under
Section 4980B of the Code and Sections 601 through 608 of ERISA.
(d) Each Plan which is an "employee benefit
plan", as defined in Section 3(3) of ERISA, has complied in all
material respects since its inception by its terms and in operation with the
requirements provided by any and all statutes, orders or governmental rules or
regulations currently in effect and applicable to the Plan, including but not
limited to ERISA and the Code. No investigations or audits by a governmental
entity, or other actions, demands, proposals, negotiations or claims with
respect to any Plan have occurred, or are pending, threatened or imminent
against any employer who is participating (or who has participated) in any Plan
or any fiduciary (as defined in Section 3(21) of ERISA) of the Plan or
which otherwise concern matters covered or that would be covered by the Plans.
(e) Each Plan intended to qualify under Section 401(a) of
the Code is the subject of a favorable determination letter issued by the
Internal Revenue Service, which provides that it so qualifies through the last
day of the "TRA 86 Remedial Amendment Period," as such term is defined
in Section 3.02 of Revenue Procedure 96-55 issued by the Internal Revenue
Service. To the Company's knowledge, nothing has occurred since the date of the
Internal Revenue Service's favorable determination letter that could adversely
affect the qualification of the Plan and its related trust. The Company has
timely and properly applied for a written determination by the Internal Revenue
Service on the qualification of each such Plan and its related trust under
Section 401(a) of the Code, as amended by the Tax Reform Act of 1986 and
subsequent legislation enacted through the date hereof, and Section 501 of the
Code.
(f) True, correct and complete copies of (i) all documents
creating or evidencing any Plan listed in Schedule 2.20, (ii) all
reports, forms and other documents required to be filed with any governmental
entity (including, without limitation, summary plan descriptions, Forms 5500 and
summary annual reports for all plans subject to ERISA), and (iii) the latest
favorable letters of determination from the Internal Revenue Service with
respect to the Plans that are intended to qualify under Section 401(a) of the
Code have been delivered to Acquiror.
(g) All expenses and liabilities relating to all of the
Plans described in Schedule 2.20 have been, and will on the Closing Date
be, fully and properly accrued on the Company's books and records and disclosed
on the current Financial Statements and such Plans have no unfunded liabilities
not reflected on such current Financial Statements.
SECTION 2.21 Title to Property. The Company has good and
marketable title to all of its properties, interests in properties and assets,
real and personal, reflected in the Balance Sheet or acquired after the date of
the Balance Sheet (except properties, interests in properties and assets sold or
otherwise disposed of since the date of the Balance Sheet in the ordinary course
of business), or with respect to leased properties and assets, valid leasehold
interests in, free and clear of all Liens of any kind or character, except (i)
the Lien of current taxes not yet due and payable, (ii) such imperfections of
title, Liens and easements as do not and will not materially detract from or
interfere with the use of the properties subject thereto or affected thereby, or
otherwise materially impair business operations involving such properties and
(iii) Liens securing debt which is reflected on the Balance Sheet. The fixed
assets, plants, property and equipment of the Company that are used in the
operations of its business are in good operating condition and repair, subject
to normal wear and tear. All properties used in the operations of the Company
are reflected in the Balance Sheet to the extent
GAAP applied on a consistent basis require the same to be so reflected.
Schedule 2.21 delivered by the Company to the Acquiror concurrently with
the execution of this Agreement identifies each parcel of real property owned or
leased by the Company.
(i) any agreement or series of related agreements
requiring aggregate payments after the date hereof by or to the Company of more
than $50,000;
(ii) any agreement with any labor union or association
representing any employee of the Company;
(iii) any agreement for the purchase or sale of materials,
supplies, equipment, merchandise or services that contains an escalation,
renegotiation or redetermination clause or that obligates the Company to
purchase all or substantially all of its requirements of a particular product
from a supplier, or for periodic minimum purchases of a particular product from
a supplier;
(iv) any agreement for sale of any of the assets or
properties of the Company other than in the ordinary course of business or for
the grant to any person of any options, rights of first refusal, or preferential
or similar rights to purchase any such assets or properties;
(v) any partnership, joint venture or similar
agreement;
(vi) any agreement of surety, guarantee or
indemnification, other than agreements in the ordinary course of business with
respect to obligations in an aggregate amount not in excess of $50,000;
(vii) any agreement containing covenants of the Company
not to compete in any line of business, in any geographic area or with any
person or covenants of any other person not to compete with the Company or in
any line of business of the Company;
(viii) any license relating to Company Proprietary Rights
(as hereinafter defined) and any other agreement granting or restricting the
right of the Company to use any Company Proprietary Rights or other intellectual
or intangible property;
(ix) any agreement relating to the acquisition by the
Company of any operating business or the capital stock of any other person;
(x) any agreement requiring the payment to any person of a
brokerage or sales commission or a finder's or referral fee (other than
arrangements to pay commission or fees to employees in the ordinary course of
business);
(xi) any agreement or note relating to or evidencing
outstanding indebtedness for borrowed money;
(xii) any lease, sublease or other agreement under which
the Company is lessor or lessee of any real property; and
(xiii) any lease relating to equipment or other tangible
property with respect to obligations in excess of $50,000; and
(xiv) any other agreement material to the Company.
SECTION 2.28 Assumptions, Guaranties, Etc. of Indebtedness of Other
Persons. The Company has not assumed,
guaranteed, endorsed or otherwise become directly or contingently liable on any
indebtedness of any other person (including, without limitation, liability by
way of agreement, contingent or otherwise, to purchase, to provide funds for
payment, to supply funds to or otherwise invest in the debtor, or otherwise to
assure the creditor against loss), except for guaranties by endorsement of
negotiable instruments for deposit or collection in the ordinary course of
business.
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each of the Stockholders, severally, but not jointly, represents
and warrants to Acquiror as follows:
SECTION 3.1 Ownership of EPITAXX Shares. Such
Stockholder is the record and beneficial owner of all of the EPITAXX Shares
listed as owned by such Stockholder on Schedule 2.3, and such EPITAXX
Shares are owned by such Stockholder free and clear of all liens, claims,
encumbrances, interests and rights in others. Except as set forth on
Schedule 2.3, such Stockholder has no options, warrants, subscriptions,
calls, convertible securities, stock appreciation rights (phantom or otherwise)
or other interests or rights of any nature relating to the capital stock of the
Company.
SECTION 3.2 Authority to Execute and Perform
Agreement. Such Stockholder has the full legal right, capacity, power and
all authority and approval required by law and its organizational documents, if
applicable, to enter into this Agreement and to perform its obligations
hereunder. Such Stockholder has duly executed and delivered this Agreement, and
this Agreement is the legal, valid and binding obligation of such Stockholder
enforceable in accordance with its terms.
SECTION 3.3 Investment Representations. Such
Stockholder has had the opportunity to discuss the transactions contemplated
hereby with Acquiror and has had the opportunity to obtain such information
pertaining to Acquiror, its business, operations, and finances as has been
requested, including but not limited to filings made by Acquiror with the SEC
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Such Stockholder is an "accredited investor" within the
meaning of Regulation D promulgated under the Securities Act of 1933, as amended
(the "Securities Act"). Such Stockholder has such knowledge and
experience in business or financial matters that he or she is capable of
evaluating the merits and risks of an investment in the Acquiror. Such
Stockholder (i) is acquiring the Acquiror Common Stock for purposes of
investment and has no present intention to distribute such Acquiror Common
Stock, (ii) it has no contract, undertaking, agreement or arrangement to
sell or otherwise transfer or dispose of any Acquiror Common Stock or any
portion thereof to any person or entity and (iii) he or she can bear the
economic risk of losing his or her investment in the Acquiror Common Stock and
has adequate means for providing for its current financial needs and
contingencies.
SECTION 3.4 No Knowledge of Breach. Such
Stockholder is not aware (without any investigation or inquiry) that any of the
representations or warranties set forth in Article II is untrue in any material
respect.
SECTION 4.6 Acquiror
Subsidiaries; Newco Common Stock.The
Acquiror indirectly owns, beneficially and of record, all of the issued and
outstanding shares of Newco, all of which are validly issued and outstanding,
fully paid and nonassessable, free and clear of all Liens and encumbrances. The
Acquiror has the corporate power to cause the endorsement and surrender such
shares of Newco Common Stock for cancellation pursuant to the Plan of Merger.
The Acquiror has taken all such actions as may be required in its capacity as
the indirect sole stockholder of Newco. Acquiror is the sole record and
beneficial owner of all of the outstanding capital stock of Uniphase Holdings,
Inc., which in turn is the sole record and beneficial owner of all of the
outstanding capital stock of Newco.
SECTION 4.12 Representations Complete. The
representations and warranties of the Acquiror and Newco contained in this
Article IV do not contain any untrue statement of a material fact and do
not omit to state any material fact necessary to make such representations and
warranties, in light of the circumstances under which they were made, not
misleading.
(a) If requested by Acquiror, Acquiror and Principal
Stockholder shall join in an election to have the provisions of Section
338(h)(10) of the Code and similar provisions of state law ("Section 338
Elections") apply to the acquisition of the Company. Acquiror shall be
responsible for, and control, the preparation and filing of such election. The
allocation of purchase price among the assets of the Company shall be made in
accordance with Code Sections 338 and 1060 and any comparable provisions of
state, local or foreign law, as appropriate. Principal Stockholder shall,
unless it would be unreasonable to do so, accept Acquiror's good faith
determination of such purchase price allocations and shall report, act, file in
all respects and for all purposes consistent with such good faith determination
of Acquiror. Principal Stockholder shall execute and deliver to Acquiror such
documents or forms (including Section 338 Forms, as defined below) as Acquiror
shall request or as are required by applicable law for an effective Section 338
Election. "Section 338 Forms" shall mean all returns, documents,
statements, and other forms that are required to be submitted to any federal,
state, county or other local taxing authority in connection with a Section 338
Election, including, without limitation, any "statement of Section 338
election" and IRS Form 8023 (together with any schedules or attachments
thereto) that are required pursuant to Treasury Regulations.
(b) Principal Stockholder shall be responsible for and
shall pay any income, franchise or similar taxes arising as a result of any
Section 338 Election or any comparable or resulting election under state law
filed by Acquiror or Principal Stockholder.
SECTION 5.16 Environmental Clearance. Without
limiting Section 5.1, prior to the Closing, the Company shall obtain, with
respect to the West Trenton, New Jersey facility owned by the Company (the
"Facility"), from the New Jersey Department of Environmental
Protection ("NJDEP") any of a Letter of Nonapplicability, an approval
of a Negative Declaration, or any other confirmation of an approval, waiver or
exemption from NJDEP stating that the Facility is not subject to the Industrial
Site Recovery Act, N.J.S.A. 13:1K-6 et seq. ("ISRA"), any
successor legislation and regulation, as well as the regulations promulgated
pursuant to the Environmental Cleanup Responsibility Act, N.J.S.A. 13:1K-6 et
seq. Notwithstanding the foregoing, the Acquiror shall be obliged to waive
compliance with the foregoing upon the receipt by the Company of any interim
determination, order or ruling, including but not limited to NJDEP's issuance of
a remediation agreement, permitting the consummation of the transactions
contemplated herein.
(i) prepare and file with the SEC the Registration
Statement as set forth above;
(ii) provide to each holder of Registered Shares a copy of
the Registration Statement and related Prospectus, including each preliminary
Prospectus, and each amendment and supplement thereto;
(iii) use its best efforts to register or qualify the
Registered Shares under such other securities or blue sky laws of such
jurisdictions as each holder of Registered Shares may reasonably request and do
any and all other acts and things which may be reasonably necessary or advisable
to enable each holder of Registered Shares to consummate the disposition in such
jurisdictions of the Registered Shares owned by such holder; provided, however,
that Acquiror will not be required to (A) qualify generally to do business
in any jurisdiction where it would not otherwise be required to qualify but for
this subparagraph, (B) subject itself to taxation in any such jurisdiction,
or (C) consent to general service of process in any such jurisdiction;
and
(iv) Upon the occurrence of any event that would cause the
Registration Statement (A) to contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or (B) to be not effective
and useable for resale of the Registered Shares during the period that such
Registration Statement is required to be effective and useable, Acquiror upon
knowledge of such an event, shall as promptly as practicable file an amendment
to the Registration Statement, in the case of clause (A), correcting any
such misstatement or omission, and, in the case of either clause (A) or
(B), use its best efforts to cause such amendment to be declared effective and
such Registration Statement to become useable as soon as practicable thereafter.
(d) Notwithstanding anything to the contrary in this
Section 6.3, Acquiror may prohibit offers and sales of the Registered
Shares pursuant to the Registration Statement at any time if (A) (1) it is
in possession of material non-public information, (2) the Board of
Directors of Acquiror determines based on advice of counsel that such
prohibition is necessary in order to avoid a requirement to disclose such
material non-public information, and (3) the Board of Directors of Acquiror
determines in good faith that disclosure of such material non-public information
would not be in the best interests of Acquiror and its Stockholders or (B)
Acquiror has made a public announcement relating to an acquisition or business
combination transaction including Acquiror and/or one or more of its
subsidiaries (1) that is material to Acquiror and its subsidiaries taken as
a whole, and (2) the Board of Directors of Acquiror determines in good
faith that offers and sales of the Registered Shares pursuant to the
Registration Statement prior to the consummation of such transaction (or such
earlier date as the Board of Directors shall determine) is not in the best
interests of Acquiror and its Stockholders (the period during which any such
prohibition of offers and sales of Registered Shares pursuant to the
Registration Statement is in effect pursuant to clause (A) or (B) of this
Section 6.3(d) is referred to herein as a "Suspension Period"). A
Suspension Period shall commence on and include the date on which Acquiror
provides written notice to holders of Company Stock covered by the Registration
Statement that offers and sales of Registered Shares cannot be made thereunder
in accordance with this Section 6.3(d) and shall end three business days
after the earlier to occur of (x) the date on which such material information is
disclosed to the public or ceases to be material or Acquiror is able to so
comply with its disclosure obligations and SEC requirements, or (y) 90 days
after written notice is provided by Acquiror to the holders of Registered Shares
of such Suspension Period. Each notice shall state to the extent, if any, as is
practicable, an estimate of the expected duration of the Suspension Period;
(e) Each holder of Registered Shares shall furnish to
Acquiror such information regarding the distribution of its Registered Shares as
is required by law to be disclosed in the Registration Statement (the
"Requisite Information") prior to effecting any sale pursuant to such
Registration Statement. Each holder of Registered Shares as to which any
Registration Statement is being effected agrees prior to effecting any sale of
the Registered Shares thereunder to furnish promptly to Acquiror all information
required to be disclosed in order to make any Requisite Information previously
furnished to Acquiror by such holder of Registered Shares not materially
misleading or necessary to cause such Registration Statement not to omit a
material fact with respect to such holder of Registered Shares necessary in
order to make the statements therein not misleading.
(f) Each holder of Registered Shares agrees that, upon
receipt of any notice from Acquiror of the existence of any fact of the kind
described in subparagraphs 6.3(c)(iv) or 6.3(d) hereof (an "Amendment
Notice"), such holder of Registered Shares will forthwith discontinue
disposition of Registered Shares until such holder's receipt of (A) copies of
the supplemented or amended Prospectus contemplated by
subparagraph 6.3(c)(iv) hereof, or until counsel for Acquiror shall have
determined that such disclosure is not required due to subsequent events,
(B) notice in writing from Acquiror that the use of the Prospectus may be
resumed, (C) copies of any additional or supplemental filings with respect
to the Prospectus, or (D) the expiration of the Suspension Period. In the
event Acquiror shall give any such notice, the time period regarding the filing
of the Registration Statement set forth in subparagraph 6.3(a) hereof shall
be extended by the number of days during the period from and including the date
of the giving of such notice pursuant to subparagraph 6.3(d) hereof to and
including the date when each holder of Registered Shares covered by such
Registration Statement shall have received the copies of the supplemented or
amended Prospectus contemplated by this subparagraph 6.3(f).
(g) Acquiror agrees to use its best efforts to cause the
Registered Shares covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the holders of Registered Shares to consummate the disposition of
such Registered Shares, subject to the proviso contained in
subparagraph 6.3(c)(iii) above, and cause all Registered Shares to be
listed on each securities exchange or national quotation system on which
Acquiror's Registered Shares is then listed.
SECTION 6.4 338 Election Payment. At the Closing,
Acquiror shall pay to the Principal Stockholder the sum in cash of $5,000,000 in
consideration of Principal Stockholder's agreement to make the Section 338
Election.
SECTION 6.5 Consent to Merger. Each of the
Stockholders, by their execution of this Agreement, hereby consents to the
transactions contemplated by this Agreement, including, without limitation, the
Merger and the change in control of the Company effected thereby. Without
limiting the foregoing, such Stockholder waives (a) any and all notices required
by applicable laws or the articles of incorporation or bylaws of the Company in
connection with the consent set forth in this Section or the transactions
contemplated hereby, and (b) any and all dissenters', appraisal or similar
rights, available under the Company's articles of incorporation, bylaws or at
law or in equity, in connection with the Merger and the transactions
contemplated hereby.
SECTION 7.5 Good Standing Certificates. The
Company shall have delivered to Acquiror certificates of good standing from the
Secretaries of the State of Delaware and all other States in which the Company
is qualified to do business dated no earlier than five (5) business days prior
to the Closing Date.
SECTION 7.10 Termination of Stockholder Agreements.
The EPITAXX Stockholders' Agreements shall have been terminated prior to the
Closing Date and of no further force or effect.
(c) Any and all taxes which are imposed on the Company in
respect of its income, business, property or operations or for which the Company
may otherwise be liable (i) for any taxable period ending prior to the
Closing Date, (ii) for the portion of a Straddle Period ending on the Closing
Date, (iii) resulting by reason of the several liability of the Company pursuant
to Treasury Regulations section 1.1502-6 or any analogous state, local or
foreign law or regulation or by reason of the Company having been a member of
any consolidated, combined or unitary group on or prior to the Closing Date,
(iv) resulting from the Company ceasing to be a member of the affiliated group
(within the meaning of Section 1504(a) of the Code) that includes Principal
Stockholder, (v) in respect of any post-Closing Date period, attributable to
events, transactions, sales, deposits, services or rentals occurring, received
or performed in a pre-Closing Date period, (vi) in respect of any post-Closing
Date period, attributable to any change in accounting method employed by the
Company during any of its four previous taxable years, (vii) in respect of any
post-Closing Date, attributable to any items of income or gain of a partnership
reporting the Company as a partner, to the extent such items are properly
attributable to periods of the partnership ending on or before the Closing Date,
(viii) attributable to any discharge of indebtedness that may result from
any capital contributions by Principal Stockholder (or an affiliate of Principal
Stockholder) to the Company of any intercompany indebtedness owed by the Company
to Principal Stockholder (or an affiliate of Principal Stockholder), and (ix)
resulting from the making of the Code Section 338 election (or analogous
provision of state, local or territorial law); provided, however, that Principal
Stockholder's liability under the foregoing provisions of this paragraph shall
be reduced as to any item to the extent that such item was specifically and
fully reserved for in the Closing Balance Sheet; or
(d) Any and all claims against any Indemnitee, made prior to
or after the Effective Time, by the holder of Patent No. 4368098 (the
"Rockwell Patent"), or any licensee of any rights thereunder, that the
products, technology, designs, processes, services, business or operations of
the Company as presently conducted infringe or misappropriate the Rockwell
Patent or any applications or rights thereunder or any proprietary rights
relating to, deriving from or arising under the Rockwell Patent, notwithstanding
that any such claims or potential claims are disclosed on any Schedule to this
Agreement or have otherwise been previously disclosed to Acquiror; provided that
any Damages incurred by the Indemnities pursuant to this Section 9.2(d) (i)
shall not include royalty payments for the use of the Rockwell Patent, if any,
agreed to be paid by Acquiror or which Acquiror becomes otherwise obligated to
make with respect to any activities after the Effective Time, and (ii) shall be
limited such that the Principal Stockholder shall be liable only for such
Damages to the extent that same are determined in a manner that is consistent
(considering the amount of such Damages and the activities of the Company with
respect to which such Damages are payable) with Acquiror's damage or future
royalty obligation, if any, pursuant to clause (i) above.
SECTION 9.3 Indemnification by Stockholders. Each
of the Stockholders shall, severally, but not jointly, indemnify, defend, and
hold harmless the Indemnitees from, against and with respect to any Damages
arising out of or in any manner incident, relating or attributable to: (a) any
inaccuracy in any representation or breach of warranty of such Stockholder
contained in Article III of this Agreement; or (b) any breach by any such
Stockholder of any of its covenants set forth in this Agreement.
(b) Neither the Company and the
Principal Stockholder, on the one hand, nor the Acquiror, on the other hand,
shall be required to indemnify the other for an aggregate amount in excess of
$80,000,000 (the "Liability Cap"), except for Damages to Acquiror
resulting from the falsity of a representation or warranty of which any
Knowledge Party who is a management employee, officer or director of the
Principal Stockholder or its affiliates (other than EPITAXX) had actual
knowledge at the time such representation or warranty was made or at the time of
the Closing and as to which no disclosure was made as and when required
hereunder, which Damages shall be subject to a Liability Cap of $400,000,000
(reduced by any other Damages for which indemnification is provided hereunder).
With respect to Stockholders other than the Principal Stockholder, there shall
be a Liability Cap equal to the total amount of Merger Consideration received by
such Stockholder pursuant to this Agreement.
(c) In calculating the Liability Cap, any insurance
recoveries received by the Indemnified Party shall be subtracted from the
aggregate Damages claimed.
SECTION 9.7 Indemnification for Letter of Credit
Obligations. Acquiror shall promptly reimburse the Principal Stockholder
for any principal and interest (exclusive of default amounts and penalties
accruing prior to the Closing Date) paid by the Principal Stockholder or any
affiliate of the Principal Stockholder pursuant to any guaranty by it or any
affiliate of the Principal Stockholder of the Company's obligation to reimburse
The Sumitomo Bank, Limited ("Sumitomo") for any draw made by Sumitomo
Bank of New York Trust Company ("Sumitomo Trust") under that certain
Letter of Credit dated August 29, 1998, as amended, issued by Sumitomo to
Sumitomo Trust in the amount of $5,250,000 (the "Letter of Credit").
If the Principal Stockholder or any of its affiliates is required to make
payment under the Letter of Credit, then the Acquiror agrees that it will
promptly (a) obtain a substitute letter of credit from a bank to replace the
Letter of Credit, or (b) provide such other guaranties or assurances in
substitute for the Letter of Credit sufficient to cause the Letter of Credit to
be cancelled.
(i) any court of competent jurisdiction or other
governmental body shall have issued an order, decree or ruling, or taken any
other action restraining, enjoining or otherwise prohibiting the transactions
contemplated hereby, provided that this Agreement shall not be terminated
pursuant to this paragraph unless the party terminating this Agreement has
utilized its best efforts to oppose the issuance of such order, decree or ruling
or the taking of such action;
(ii) the Closing has not occurred on or prior to December
31, 1999 (as the same date may be extended as provided below) for any reason
other than the breach of any provision of this Agreement by the party
terminating this Agreement; or
(iii) the other party breaches any of its representations,
warranties or covenants attached hereto and such breach is not promptly cured.
(i) Any of the conditions set forth in Article VI hereof
has not been satisfied on or before December 31, 1999 (as such date may be
extended as provided below) and shall not have been waived by Acquiror, for any
reason other than a breach by Acquiror of any of its representations, warranties
or agreements hereunder; or
(ii) If in Acquiror's good faith judgment there is any
material inaccuracy in any representations or breach of any warranty contained
therein, or any material failure by the Stockholders to perform any commitment,
covenant or condition contained in this Agreement, or there exists any material
error, misstatement or omission with regard to any of the Exhibits, Schedules or
other documents referred to herein.
Each of the Parties agrees that it shall
exercise, and shall cause their respective Representatives and their respective
Affiliates to exercise, the same degree of care to prevent disclosure of
Information (as hereinafter defined) received by or disclosed to such Party
pursuant to this Agreement as it takes to preserve and safeguard its own
confidential information, data, technology or know-how but, in any event, no
less than a reasonable degree of care. As used herein, "Information"
means all documents and information concerning any other Party and the
Affiliates thereof furnished to a Party, its Affiliates or Representatives (in
any case, a "Recipient" by such other Party or its Representatives (in
any case, the "Disclosing Party") in connection with the transactions
contemplated by this Agreement. Each Recipient shall not use any of such
Information except as permitted by this Agreement or release or disclose such
Information to any other Person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors in connection with this
Agreement.
If this Agreement shall be terminated pursuant to Article IX
any documentary Information (including all copies thereof) shall be returned to
the Disclosing Party promptly at its request. In any event, Information shall be
safeguarded by the Recipient for not less than five (5) years from the date
hereof.
The restrictions of this Article XI shall not apply to any
Information received by a Recipient (a) which such Recipient already possessed
at the time of receipt as shown by written records; (b) which was at the time of
receipt or subsequently becomes, publicly available though no fault of such
Recipient or any of its Affiliates or Representatives; (c) which such Recipient
rightfully received from a third party which the Recipient neither knows nor has
reason to know is prohibited from disclosing such information by a contractual,
legal or fiduciary obligation; (d) is furnished by the Disclosing Party to a
third party without a similar restriction of the third party's rights; or (e) is
as required to be disclosed pursuant to Law; providedthat, if
practicable, the Recipient shall notify the Disclosing Party prior to disclosing
any Information pursuant to this clause (e) and shall cooperate with the
Disclosing Party in making reasonable efforts to resist such disclosure, if the
Disclosing Party so requests.
In the event of a breach of any of the obligations stated
above in this Article X, the Disclosing Party may proceed against the breaching
Recipient in Law or in equity for such damages or other relief as a court may
deem appropriate. Nothing herein contained shall be construed as prohibiting the
Disclosing Party from pursuing, in addition, any other remedy for such breach or
threatened breach.
SECTION 12.8 Jurisdiction and Service of Process. Any legal
action or proceeding with respect to this Agreement shall be brought exclusively
in the courts of the State of Delaware or of the
United States of America for the District of Delaware. By execution and
delivery of this Agreement, each of the parties hereto accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. The parties hereby irrevocably waive any objection or defense
that they may now or hereafter have to the assertion of personal jurisdiction by
any such court in any such action or to the laying of the venue of any such
action in any such court, and hereby waive, to the extent not prohibited by law,
and agree not to assert, by way of motion, as a defense, or otherwise, in any
such proceeding, any claim that it is not subject to the jurisdiction of the
above-named courts for such proceedings. Each of the parties hereto irrevocably
consents to the service of process of any of the aforementioned courts in any
such action or proceeding by the mailing of copies thereof by registered mail,
postage prepaid, to the party at its address set forth in Section 12.1
hereof and irrevocably waive any objection or defense that it may now or
hereafter have to the sufficiency of any such service of process in any such
action. Nothing in this Section 12.8 shall affect the rights of the parties to
commence any such action in any other forum or to serve process in any such
action in any other manner permitted by law.
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