EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
By and Between
NEW FOCUS, INC.,
on the one hand,
and
INTEL CORPORATION,
on the other hand
Dated May 23, 2002
TABLE OF CONTENTS
ARTICLE I DEFINITIONS ............................................... 1
1.1 Definitions ............................................... 1
1.2 Index of Other Defined Terms .............................. 7
ARTICLE II PURCHASE AND SALE ......................................... 9
2.1 Purchased Assets .......................................... 9
2.2 Excluded Assets ........................................... 10
2.3 Assumption of Liabilities ................................. 11
2.4 Excluded Liabilities ...................................... 11
2.5 Assignment of Contracts and Rights ........................ 12
2.6 Purchase Price ............................................ 12
2.7 Closing ................................................... 12
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER .................. 13
3.1 Existence and Good Standing ............................... 13
3.2 Authorization and Enforceability .......................... 14
3.3 Seller Approvals .......................................... 14
3.4 Non-Contravention ......................................... 14
3.5 Undisclosed Liabilities; Financial Information ............ 14
3.6 Absence of Certain Changes ................................ 15
3.7 Tangible Personal Property ................................ 15
3.8 Litigation ................................................ 16
3.9 Material Contracts ........................................ 16
3.10 Permits ................................................... 17
3.11 Compliance with Applicable Law ............................ 17
3.12 Employees; Employee Benefits .............................. 17
i
3.13 Labor and Employment Matters .............................. 18
3.14 Intellectual Property ..................................... 18
3.15 Insurance ................................................. 26
3.16 Tax Matters ............................................... 26
3.17 Title to and Sufficiency of the Purchased Assets .......... 27
3.18 Supplier and Foundry Relationships ........................ 27
3.19 Customers ................................................. 27
3.20 Inventory ................................................. 28
3.21 Product Warranties ........................................ 28
3.22 Advisory Fees ............................................. 28
3.23 Full Disclosure ........................................... 28
3.24 Substantially All Assets .................................. 28
3.25 Photonetics Litigation .................................... 28
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER ............... 28
4.1 Existence and Good Standing ............................... 28
4.2 Authorization and Enforceability .......................... 28
4.3 Governmental or Other Authorization ....................... 29
4.4 Non-Contravention ......................................... 29
4.5 Advisory Fees ............................................. 29
ARTICLE V COVENANTS OF SELLER ....................................... 29
5.1 Compliance with Terms of Required Seller Approvals ........ 29
5.2 Access to Information ..................................... 29
5.3 Retention of Books and Records ............................ 30
5.4 Delivery .................................................. 30
5.5 Transfer of Purchased Assets .............................. 30
5.6 Nonsolicitation ........................................... 30
ii
ARTICLE VI COVENANTS OF PURCHASER .................................... 31
6.1 Compliance with Terms of Governmental Approvals and
Consents .................................................. 31
6.2 Employees and Offers of Employment ........................ 31
6.3 Nonsolicitation ........................................... 33
ARTICLE VII COVENANTS OF ALL PARTIES .................................. 33
7.1 Further Assurances ........................................ 33
7.2 Public Announcements ...................................... 33
7.3 Tax Matters ............................................... 34
7.4 Allocation of Purchase Price .............................. 35
7.5 Confidentiality ........................................... 35
ARTICLE VIII CONDITIONS TO CLOSING ..................................... 36
8.1 Conditions to Obligations of Purchaser and Purchaser ...... 36
8.2 Conditions to Obligations of Seller ....................... 37
ARTICLE IX INDEMNIFICATION ........................................... 38
9.1 Agreement to Indemnify .................................... 38
9.2 Survival; Limits on Indemnification ....................... 38
9.3 Escrow .................................................... 39
9.4 Claims for Indemnification ................................ 39
9.5 Defense of Claims ......................................... 40
9.6 Photonetics Warranty ...................................... 41
ARTICLE X MISCELLANEOUS ............................................. 41
10.1 Notices ................................................... 41
10.2 Amendments; Waivers; Cumulative Remedies .................. 42
10.3 Expenses .................................................. 43
10.4 Successors and Assigns .................................... 43
10.5 Governing Law ............................................. 43
iii
10.6 Counterparts; Effectiveness ............................... 43
10.7 Entire Agreement .......................................... 43
10.8 Captions .................................................. 43
10.9 Severability .............................................. 43
10.10 Construction .............................................. 44
10.11 Dispute Resolution ........................................ 44
10.12 Submission to Jurisdiction; Waiver of Jury Trial .......... 44
10.13 Meaning of Include and Including .......................... 45
10.14 Third Party Beneficiaries ................................. 45
iv
ASSET PURCHASE AGREEMENT
------------------------
THIS ASSET PURCHASE AGREEMENT, dated as of May 23, 2002 (the
"Agreement"), is by and between New Focus, Inc., a Delaware corporation
("Seller"), and Intel Corporation, a Delaware corporation ("Purchaser"). All
capitalized terms have the meanings ascribed to such terms in Article I or as
otherwise defined herein.
W I T N E S S E T H:
WHEREAS, the Seller desires to sell to Purchaser, and Purchaser desires
to purchase from Seller certain of Seller's assets;
WHEREAS, Purchaser desires to license from Seller, and Seller desires to
license to Purchaser, certain Intellectual Property Rights not included in the
Purchased Assets;
WHEREAS, Seller desires to license from Purchaser, and Purchaser desires
to license to Seller, certain Intellectual Property Rights relating to the
Purchased Assets;
WHEREAS, as an inducement for Purchaser to enter into this Agreement,
certain of the Designated Employees have orally accepted contingent offers of
employment extended by Purchaser prior to the Closing Date, to be effective upon
the Closing Date;
WHEREAS, Purchaser and Seller are entering into certain ancillary
agreements simultaneously with the closing of the transactions contemplated
hereby; and
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
representations, warranties, covenants and agreements hereinafter set forth, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. The following terms, as used herein, have the
-----------
following meanings:
"Acquisition Documents" means this Agreement, the Bill of Sale, the
Assignment and Assumption Agreement, the License Agreement, the Transition
Services Agreement, the OEM and Supply Agreement, the Noncompetition Agreement,
the Escrow Agreement, the Patent Assignments and any other document or agreement
executed in connection with any of the foregoing, together with any Exhibits and
Schedules thereto, and in each case as modified, amended, supplemented, restated
or renewed from time to time. Notwithstanding the foregoing, for the purposes of
Article IX, the definition of "Acquisition Document" shall not include the
License Agreement, the Noncompetition Agreement, the OEM and Supply Agreement or
the Transition Services Agreement.
"Affiliate" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with such other Person.
1
"Applicable Law" means, with respect to any Person, any federal, state,
local or foreign statute, law, ordinance, rule, administrative interpretation,
regulation, order, writ, injunction, directive, judgment, decree or other
requirement of any Governmental Authority applicable to such Person or any of
its Affiliates or any of their respective properties, assets, officers,
directors, employees, consultants or agents.
"Assignment and Assumption Agreement" means that certain Assignment and
Assumption Agreement entered into by Purchaser and Seller on the Closing Date.
"Associate" or "Associated With" means, when used to indicate a
relationship with any Person, (a) any other Person of which such first Person is
an officer, director, employee or partner or is, directly or indirectly, the
beneficial owner of ten percent (10%) or more of any class of equity securities,
partnership or membership interests or other comparable ownership interests
issued by such other Person, (b) any trust or other estate in which such first
Person has a ten percent (10%) or more beneficial interest or as to which such
first Person serves as trustee or in a similar fiduciary capacity and (c) any
relative or spouse of such first Person who has the same home as such first
Person.
"Benefit Arrangement" means any arrangement for the provision of
benefits or compensation to Business Employees that is not an Employee Benefit
Plan, including (i) employment, consulting or change of control agreements, (ii)
arrangements providing for fringe benefits (including automobile assistance and
subsidized automobile leases), insurance coverage or workers' compensation
benefits, (iii) bonus, incentive, deferred bonus, incentive or performance pay
arrangements, (iv) arrangements providing any termination allowance, severance
or similar benefits, (v) equity compensation plans, (vi) deferred compensation
plans, (vii) compensation policies and (viii) vacation policies.
"Bill of Sale" means those certain Bills of Sale entered into by
Purchaser and Seller on the Closing Date.
"Books and Records" means with respect to the Business or the Purchased
Assets, all files, documents, instruments, papers, books and records, whether in
written or electronic form, material to or solely relating to the Business or
the Purchased Assets, including budgets, pricing guidelines, ledgers, journals,
customer and marketing materials and information, product data sheets,
performance benchmark reports, customer account histories and profiles, sales
training and presentation materials, customer support materials, support
bulletins, vendor lists, contracts, licenses, customer lists, permits, computer
files and programs, retrieval programs, operating data and plans, projections
and forecasts.
"Business" means the development of the Products to their current state
as of the Closing Date, including processes, Software, algorithms and
specifications used in the development, manufacture and testing of the Products.
"Business Day" means each day other than a Saturday, Sunday or other day
on which commercial banks in San Francisco, California are authorized or
required by law to close.
"Business Employee" means an employee of or consultant to Seller a
majority of whose responsibilities relate to the Purchased Assets or the
Business.
2
"Closing Date" means the date of this Agreement.
"Coating" means the process developed by Seller for depositing thin
films on diode chips.
"Code" means the Internal Revenue Code of 1986, as amended.
"Contracts" means all contracts, agreements, options, leases, licenses,
sales and purchase orders, commitments and other instruments of any kind,
whether written or oral, to which Seller is a party or is otherwise bound.
"Damages" means all demands, claims, actions or causes of action,
assessments, losses, damages (whether direct, indirect or, except as provided in
Section 9.3, consequential), deficiencies, costs, expenses, Liabilities,
judgments, settlements, awards, fines, response costs, sanctions, Taxes,
penalties, charges and amounts paid in settlement, including (a) interest on
cash disbursements in respect of any of the foregoing at the Reference Rate in
effect from time to time, plus two percent (2%), compounded quarterly, from the
date each such cash disbursement is made until the date the Person incurring
such cash disbursement shall have been indemnified in respect thereof and (b)
reasonable out-of-pocket costs, fees and expenses (including costs, fees and
expenses of attorneys, accountants and auditors and other agents of, or other
Persons retained by, such Person).
"Designated Employees" means the persons identified on Schedule 1.1(a).
"Employee Benefit Plan" means a Pension Plan or a Welfare Plan.
"Environmental Law" means any applicable federal, state, local or
foreign law, statute, treaty, ordinance, rule, regulation, policy, permit,
consent, approval, license, judgment, order, decree or injunction relating to:
(a) "Releases" (as defined in 42 U.S.C. sec. 9601(22)) or threatened Releases of
Hazardous Material into the environment, (b) the generation, treatment, storage,
disposal, use, handling, manufacturing, transportation or shipment of a
Hazardous Substance, (c) the health or safety of employees in the workplace, (d)
protecting or restoring natural resources or (e) the environment, including the
Resource Conservation and Recovery Act ("RCRA"), the Comprehensive Environmental
Response Compensation and Liability Act ("CERCLA"), the Clean Air Act, the Water
Pollution Control Act, the Safe Drinking Water Act and the Toxic Substances
Control Act ("TSCA").
"Environmental Liabilities" means all Liabilities of Seller (whether
such Liabilities are owed to Governmental Authorities, third Persons or
otherwise) relating to violations, acts or conditions as follows: (a)
attributable to any failure of Seller to comply with any Environmental Law, (b)
attributable to environmental contamination by Seller or any other Person on any
property on which Seller operates or operated or conducts or conducted business
or (c) arising out of contamination by materials disposed of at any location by
or for Seller.
"Equipment" means all machinery, equipment, furniture, office equipment,
communications equipment, computer equipment, vehicles, spare and replacement
parts, fuel and other tangible personal property (and interests in any of the
foregoing).
3
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Escrow Agreement" means the Escrow Agreement entered into by Purchaser
and Seller on the Closing Date.
"GAAP" means generally accepted accounting principles in the United
States applied on a consistent basis.
"Governmental Approval" means an authorization, consent, approval,
permit or license issued by, or a registration or filing with, or notice to, or
waiver from, any Governmental Authority.
"Governmental Authority" means any foreign or domestic federal,
territorial, state or local governmental authority, quasi-governmental
authority, instrumentality, court, government or self-regulatory organization,
commission, tribunal or organization or any regulatory, administrative or other
agency, or any political or other subdivision, department or branch of any of
the foregoing.
"Hazardous Material" or "Hazardous Substance" means any substance or
material, respectively, (a) the presence of which requires investigation or
remediation under any Environmental Law, (b) that is defined as a "hazardous
waste" or "hazardous substance" under any Environmental Law, (c) that is toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic or
mutagenic or otherwise hazardous and is regulated by any Governmental Authority
having or asserting jurisdiction over the Business or any of the Purchased
Assets, (d) that contains gasoline, diesel fuel or other petroleum hydrocarbons,
polychlorinated biphenols (PCBs) or asbestos or (e) as such term is defined in
any indemnification provision in any Contract.
"Indemnifying Party" means (a) with respect to any Purchaser Indemnitee
asserting a claim under Article IX of this Agreement, Seller and (b) with
respect to any Seller Indemnitee asserting a claim under this Agreement,
Purchaser.
"Indemnitee(s)" means (a) with respect to any Seller Indemnitee
asserting a claim under Article IX of this Agreement, such Seller Indemnitee(s)
and (b) with respect to any Purchaser Indemnitee asserting a claim under this
Agreement, such Purchaser Indemnitee(s).
"IRS" means the Internal Revenue Service.
"Knowledge" means, with respect to any Person, the actual knowledge of
such Person, after reasonable inquiry. For purposes hereof, a Person shall be
deemed to have actual knowledge of the contents of all Books and Records with
respect to which such Person has reasonable access. Without limiting the
generality of the foregoing, with respect to any Person that is a corporation,
limited liability company, partnership or other business entity, actual
knowledge shall be deemed to include the actual knowledge of all directors,
officers, partners, members and employees of any such Person, except that with
respect to Seller, actual knowledge shall be deemed to include the actual
knowledge of all directors, officers and Business Employees of Seller.
"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
4
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.
"License Agreement" means that certain License Agreement executed by
Seller and Purchaser on the Closing Date.
"Lien" means any mortgage, pledge, assessment, security interest, lease,
sublease, lien, adverse or prior claim, levy, charge, easement, rights of way,
covenants, restrictions, rights of first refusal, encroachments, options or
encumbrances of any kind, or any defects in title, conditional sale contract,
title retention contract, or other contract to give or to refrain from giving
any of the foregoing.
"Material Adverse Effect" means, with respect to any Person or business,
any circumstance of, change in, or effect on, or group of such circumstances of,
changes in or effects on, the operations, financial condition, earnings, or
results of operations, assets or Liabilities of the Person or business, that
results in or would reasonably be expected to result in, a material adverse
effect on, or a material adverse change in, the operations, financial condition,
earnings, results of operations, assets or Liabilities of such Person or
business.
"Noncompetition Agreement" means that certain Noncompetition Agreement
entered into by Purchaser and Seller on the Closing Date.
"OEM and Supply Agreement" means the product sales agreement executed by
Seller and Purchaser on the Closing Date.
"Patent Assignments" means those certain Assignments executed by Seller
in favor of Purchaser on the Closing Date.
"Pension Plan" means any employee pension plan as defined in Section
3(2) of ERISA covering Business Employees.
"Person" means an individual, corporation, partnership, association,
limited liability company, trust, estate or other similar business entity or
organization, including a Governmental Authority.
"Post-Closing Tax Period" means any Tax period (or portion thereof)
beginning as of the Closing.
"Pre-Closing Tax Period" means any Tax period (or portion thereof)
ending as of the Closing.
"Products" means the tunable lasers being developed by or for Seller for
use in or as Datacom Products or Telecom Products (as such terms are defined in
the License Agreement) including the products internally referred to by Seller
as P1.0, P1.5, P1.8 and P2.0, and including any parts and components thereof.
5
"Reference Rate" means the per annum rate of interest publicly announced
from time to time by Citibank, N.A., as its prime rate (or reference rate). Any
change in the Reference Rate shall take effect at the opening of business on the
day specified in the public announcement of such change.
"Reliability Testing" means the testing of devices to measure and assess
reliability of product design and development, qualification of products for
customers or to industry standards, failure analysis and quality assurance;
provided that "Reliability Testing" does not include any reliability testing
data related to the Products and the associated procedures and documentation.
"Taxes" means (a) all foreign, federal, state, local and other net
income, gross income, gross receipts, sales, use, ad valorem, value added,
intangible, unitary, capital gain, transfer, franchise, profits, license, lease,
service, service use, withholding, backup withholding, payroll, employment,
estimated, excise, severance, stamp, occupation, premium, property, prohibited
transactions, windfall or excess profits, customs, duties or other taxes, fees,
assessments or charges of any kind whatsoever, together with any interest and
any penalties, additions to tax or additional amounts with respect thereto, (b)
any Liability for payment of amounts described in clause (a) whether as a result
of transferee Liability, of being a member of an affiliated, consolidated,
combined or unitary group for any period, or otherwise through operation of law
and (c) any Liability for the payment of amounts described in clause (a) or (b)
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 for Taxes; and
the term "Tax" means any one of the foregoing Taxes.
"Tax Returns" means all returns, declarations, reports, statements,
information statement, forms or other documents filed or required to be filed
with respect to any Tax.
"Tort Claim" means any claim, on any grounds or basis, under any statute
or common law, for personal injury, wrongful death, defamation,
misrepresentation, property damage, product liability, wrongful interference
with economic interests or other tortious conduct of a Person (whether or not
Liability is predicated on negligence, intentional or reckless conduct, breach
of contract or strict liability).
"Transition Services Agreement" means that certain Transition Services
Agreement entered into by Purchaser and Seller on the Closing Date.
"Welfare Plan" means any employee welfare benefit plan as defined in
Section 3(1) of ERISA for Business Employees.
6
1.2 Index of Other Defined Terms. In addition to these terms defined
----------------------------
above, the following terms shall have the respective meanings given thereto in
the sections indicated below:
Defined Term Section Page
Agreement .................................... Preamble, 1
Assumed Contracts ............................ 2.1(f), 9
Assumed Liabilities .......................... 2.3, 11
bulk sales ................................... 8.1(d), 36
CERCLA ....................................... 1.1, 3
Closing ...................................... 2.7, 12
CNDA ......................................... 5.2, 30
Contaminant .................................. 3.14(n), 25
Copyrights ................................... 3.14(a), 19
Delivery Protocol ............................ 2.7(a), 13
Development Environments ..................... 3.14(a), 18
Disabling Code ............................... 3.14(n), 25
Escrow ....................................... 2.6, 12
Escrow Agent ................................. 2.6, 12
Escrow Amount ................................ 2.6, 12
Excluded Assets .............................. 2.2, 10
Excluded Copyrights .......................... 2.2(h), 10
Excluded Intellectual Property Rights ........ 2.2(e), 10
Excluded Liabilities ......................... 2.4, 11
Excluded Licensed Software ................... 2.2(i), 10
Excluded Marks ............................... 2.2(g), 10
Excluded Patents ............................. 2.2(f), 10
Excluded Trade Secrets ....................... 2.2(h), 10
Indemnification Cap .......................... 9.2(b), 39
Indemnification Threshold .................... 9.2(b), 39
Intellectual Property Assets ................. 3.14(a), 19
Intellectual Property Rights ................. 3.14(a), 18
Inventory .................................... 2.1(c), 9
IRMP ......................................... 6.2(c)(iv), 31
Licensed Software ............................ 3.14(f), 22
Licensed Technology Agreements ............... 3.14(h), 23
Marks ........................................ 3.14(a), 18
Material Contracts ........................... 3.9(a), 16
Offered Patents .............................. 3.14(c), 19
Offered Software ............................. 3.14(f), 22
Offered Trade Secrets ........................ 3.14(a), 19
Optical Products Division .................... 6.3(a), 33
Owned Copyrights/Maskworks ................... 3.14(d), 21
Owned Tangible Personal Property ............. 3.7(a), 15
Patents ...................................... 3.14(a), 18
Permits ...................................... 3.10, 17
Personal Property Leases ..................... 3.7(b), 15
Photonetics Warranty ......................... 9.2(b), 38
7
Proceedings .................................. 3.8, 16
Purchase Price ............................... 2.6, 12
Purchased Assets ............................. 2.1, 9
Purchaser Indemnitees ........................ 9.1(a), 38
Purchaser .................................... Preamble, 1
RCRA ......................................... 1.1, 3
Registered Copyrights ........................ 3.14(d), 21
Releases ..................................... 1.1, 3
Required Purchaser Approvals ................. 4.3, 29
Required Seller Approvals .................... 3.3, 14
safe harbor lease ............................ 3.16(g), 27
Sales Tax .................................... 7.4(e), 35
Seller Employees ............................. 6.3(a), 33
Seller Indemnitees ........................... 9.1(b), 38
Seller ....................................... Preamble, 1
SERMA ........................................ 6.2(b)(iii), 31
SERP ......................................... 6.2(b)(ii), 31
Service Credit ............................... 6.2(b), 31
Software ..................................... 3.14(a), 19
Supply Contracts ............................. 3.18, 27
Systems ...................................... 3.14(n), 25
Tangible Personal Property ................... 3.7(b), 15
tax exempt use property ...................... 3.16(g), 27
Technology Exploitation Agreements ........... 3.14(i), 24
Trade Secrets ................................ 3.14(a), 19
Transferred Employee ......................... 6.2(b), 31
TSCA ......................................... 1.1, 3
Uncapped Claims .............................. 9.2(b), 39
8
ARTICLE II
PURCHASE AND SALE
2.1 Purchased Assets. Upon the terms and subject to the conditions of
----------------
this Agreement, effective at the Closing, Purchaser agrees to purchase from
Seller, and Seller agrees to sell, transfer, assign and deliver to Purchaser,
free and clear of all Liens, all of Seller's right, title and interest in, to
and under the assets described in this Section 2.1 and the Schedules hereto
(collectively, the "Purchased Assets"), including the following:
(a) all of the fixed and other tangible personal property used
on or prior to the Closing Date in connection with the Business,
including all computing, laboratory and other capital assets used on or
prior to the Closing Date in the design and development of the
Intellectual Property Rights and the Products and all Equipment
described on Schedule 2.1(a), except tangible personal property listed
on Schedule 2.2(a);
(b) the Intellectual Property Assets (including all of Seller's
rights, claims, credits, causes of action or rights of set-off against
third Persons relating to any of the Intellectual Property Assets),
including all of the Intellectual Property Rights listed on Schedule
2.1(b);
(c) All items of inventory ("Inventory") listed on Schedule
2.1(c);
(d) all design, development and testing tools listed on Schedule
2.1(d);
(e) all tangible embodiments of the Intellectual Property
Assets, and copies of all tangible embodiments of Intellectual Property
Rights relating to Coating, including all documentation, specifications
and other information relating to technical or engineering know-how of
the Business, the Products or Coating, including reliability testing
data and associated procedures and documentation;
(f) subject to Section 2.5, all Contracts listed on Schedule
2.1(f) (the "Assumed Contracts");
(g) all Permits that are legally capable of being transferred
and are solely related to the Purchased Assets or the Business,
including, the Permits listed on Schedule 2.1(g);
(h) All prepaid expenses, credits, deposits (other than deposits
of cash with banks or other financial institutions), claims,
prepayments, refunds (other than Tax refunds relating to the Pre-Closing
Tax Period), rebates and other similar amounts listed on Schedule
2.1(h);
(i) the originals or true copies of all Books and Records;
(j) all rights of Seller under express or implied warranties
from third parties who supplied Seller with any of the Purchased Assets;
and
(k) all goodwill associated with the Purchased Assets.
9
2.2 Excluded Assets. Notwithstanding Section 2.1, Purchaser and Seller
---------------
expressly understand and agree that the following assets and properties of
Seller (the "Excluded Assets") shall be excluded from the Purchased Assets:
(a) the tangible personal property used on or prior to the
Closing Date in connection with the Business listed or described on
Schedule 2.2(a) and the Equipment solely relating to Reliability
Testing;
(b) all assets, tangible or intangible, real or personal, that
are not used by Seller in connection with the Business or the Products;
(c) all Contracts that are not Assumed Contracts;
(d) the minute books, stock ledgers, accounting records, Tax
Returns, financial statements and work papers and letters from
accountants and auditors of Seller, provided that, pursuant to Sections
5.2 and 7.3(b), Purchaser shall have access to and be provided with
copies of the documents and records relating to the Business or
Purchased Assets described in Section 5.2 and 7.3(b);
(e) any Intellectual Property Rights related directly to
Seller's businesses other than the Business or the Products (the
"Excluded Intellectual Property Rights"), and all tangible embodiments
of the Excluded Intellectual Property Rights;
(f) the Patents listed on Schedule 2.2(f) (the "Excluded
Patents");
(g) the Mark "New Focus" and any variant or combination thereof
("Excluded Marks");
(h) the Copyrights (the "Excluded Copyrights") and know-how (the
"Excluded Trade Secrets") used by Seller in connection with Coating and
Reliability Testing, and the originals of all tangible embodiments
thereof;
(i) the Licensed Software listed on Schedule 2.2(i) ("Excluded
Licensed Software");
(j) all cash and cash equivalents of Seller on hand and in banks
and other financial institutions on the Closing Date;
(k) all Employee Benefit Plans and Benefit Arrangements;
(l) all claims and causes of action related to the Business
(whether or not asserted by Seller), other than claims and causes of
action relating to Intellectual Property Assets, to the extent such
rights arise out of facts, events or circumstances occurring prior to
Closing;
10
(m) all insurance contracts in effect as of the date of this
Agreement insuring the Purchased Assets and all insurance proceeds in
respect of the Excluded Assets; and
(n) all leasehold or ownership interests in real property or any
improvements thereon.
2.3 Assumption of Liabilities. Subject to Section 2.5, upon the terms
-------------------------
and subject to the conditions of this Agreement, effective at the Closing,
Purchaser agrees to assume only the Liabilities under the Assumed Contracts
first arising out of such Assumed Contracts after the Closing Date and
Liabilities arising out of Purchaser's ownership of the Purchased Assets, but
only to the extent such Liabilities arise out of facts, events or circumstances
occurring after the Closing Date (the "Assumed Liabilities"). All other
Liabilities shall be Excluded Liabilities.
2.4 Excluded Liabilities. Notwithstanding any other provision of this
--------------------
Agreement to the contrary, other than the Assumed Liabilities, the Purchaser
shall not assume and shall not be liable for, and Seller shall retain and remain
solely liable for and obligated to discharge and indemnify and hold Purchaser
harmless for, all of the debts, expenses, contracts, agreements, commitments,
obligations and other Liabilities of any nature whatsoever of Seller, the
Business or the Purchased Assets (the "Excluded Liabilities"), whether known or
unknown, accrued or not accrued, fixed or contingent, including the following:
(a) all Liabilities under Contracts, other than those first
arising under the Assumed Contracts after the Closing Date;
(b) except as otherwise provided in Section 7.3, any Liability
for Taxes attributable to or imposed upon Seller or any Affiliates of
Seller (other than Liabilities for Taxes attributable to the ownership
or use of the Purchased Assets in the Post-Closing Tax Period), or
attributable to or imposed upon the Business or the Purchased Assets for
the Pre-Closing Tax Period;
(c) any Liability for or in respect of any loan, other
indebtedness for money borrowed, or account payable of Seller or any
Affiliates of Seller;
(d) all claims against Seller or any Affiliates of Seller, or
any other Liabilities of any kind or nature whatsoever relating to the
Business or the Purchased Assets, arising out of facts, events or
circumstances occurring prior to the Closing, regardless of whether such
claim or Liability shall arise or become known before, on or after the
Closing, including any Liability pursuant to pending or threatened
litigation relating to the Purchased Assets or the Business, any
Liabilities relating to inter-company or trade payables or any
Liabilities related to Products produced, delivered or sold on or prior
to the Closing;
(e) any Liability of Seller attributable to any Employee Benefit
Plan or Benefit Arrangement maintained by Seller or any Affiliates of
Seller;
(f) any Liability for wages or salary or for making payments of
any kind (including as a result of this sale of Purchased Assets or as a
result of the termination by
11
Seller of employment of employees of Seller, or other claims arising out
of the terms and conditions of employment with Seller, or for vacation,
bonus, severance pay, retirement, stock options, automobile assistance
or otherwise) to employees of Seller or in respect of payroll taxes for
employees of Seller;
(g) all Environmental Liabilities;
(h) all Liabilities relating to the Excluded Assets; and
(i) any Liability of Seller incurred in connection with the
making or performance of this Agreement and the transactions
contemplated hereby, except as provided in Section 7.3(d).
2.5 Assignment of Contracts and Rights. Anything in this Agreement or
----------------------------------
any other Acquisition Document to the contrary notwithstanding, this Agreement
shall not constitute an agreement to assign any Purchased Asset or any claim or
right or any benefit arising thereunder or resulting therefrom if an attempted
assignment thereof, without the consent of a party thereto, would constitute a
breach or other contravention thereof or in any way adversely affect the rights
of Purchaser or Seller thereunder. Seller shall use its best efforts, whether
before or after the Closing Date, to obtain the consent of the appropriate
Persons for the assignment thereof to Purchaser as Purchaser may request. If
such consent is not obtained, or if an attempted assignment thereof would be
ineffective or would adversely affect the rights thereunder so that Purchaser
would not receive all such rights, Seller and Purchaser shall cooperate in a
mutually agreeable arrangement under which Purchaser would obtain the benefits
and assume the obligations thereunder in accordance with this Agreement,
including subcontracting, sublicensing or subleasing to Purchaser, or under
which Seller would enforce for the benefit of Purchaser, with Purchaser assuming
Seller's obligations, any and all rights of Seller against a third Person
thereto. Seller shall promptly pay to Purchaser when received all monies
received by Seller in respect of any Purchased Asset or any claim or right or
any benefit arising thereunder, except to the extent the same represents an
Excluded Asset. Seller shall be responsible for any and all costs associated
with obtaining such consents. To the extent the benefits therefrom and
Liabilities thereunder have not been provided by alternative arrangements
reasonably satisfactory to Purchaser, an adjustment in the Purchase Price paid
by Purchaser for the Purchased Assets shall be made to reflect the lost benefits
and Damages to Purchaser.
2.6 Purchase Price. The aggregate purchase price payable by Purchaser to
--------------
Seller for the Purchased Assets (the "Purchase Price") shall be Fifty Million
Dollars ($50,000,000), payable in the manner set forth in Section 2.7(h).
Notwithstanding the foregoing, $5,000,000 of the Purchase Price (the "Escrow
Amount") shall be deposited in escrow (the "Escrow") with Citibank, N.A. (the
"Escrow Agent") to secure any obligations of Seller pursuant to Article IX.
2.7 Closing. The closing of the purchase and sale of the Purchased
-------
Assets hereunder (the "Closing") shall take place at the offices of Gibson, Dunn
& Crutcher LLP, 1530 Page Mill Road, Palo Alto, California, 94304 on the date of
this Agreement. At the Closing:
(a) Seller shall deliver to Purchaser the Patent Assignments and
such other endorsements, consents, assignment, instruments of conveyance
and transfer documents (including
12
the Bill of Sale and the Assignment and Assumption Agreement) as
Purchaser may reasonably request to vest in Purchaser all right, title
and interest in, to and under the Purchased Assets. Simultaneously with
the consummation of the transactions contemplated hereby, Seller,
through its officers, agents and employees, will put Purchaser into full
possession and enjoyment of all tangible Purchased Assets on location at
Seller's facility. Seller shall clearly mark all tangible Purchased
Assets so that they can be identified by Purchaser's packers. Purchaser
shall be responsible for packing, crating and shipping the tangible
Purchased Assets from Seller's facility. Purchaser shall pay all
packaging, shipping, handling and freight insurance costs for removal of
tangible Purchased Assets from Seller's facility and shall bear any risk
of loss in connection therewith after such tangible Purchased Assets
leave Seller's facility. At the Closing, Seller shall commence delivery
to Purchaser of those intangible Purchased Assets identified by
Purchaser to be delivered to a place directed by Purchaser in its sole
discretion by remote telecommunications or such delivery protocol
established by Purchaser and Seller jointly prior to Closing with
respect to such Purchased Assets (the "Delivery Protocol") Seller shall
use its best efforts to comply with the Delivery Protocol;
(b) Seller and Purchaser shall execute and deliver the License
Agreement;
(c) Seller and Purchaser shall execute and deliver the OEM and
Supply Agreement;
(d) Seller and Purchaser shall execute and deliver the
Transition Services Agreement;
(e) Seller and Purchaser shall execute and deliver the Escrow
Agreement;
(f) Seller and Purchaser shall execute and deliver the
Noncompetition Agreement;
(g) Seller and Purchaser shall deliver documents required
pursuant to Article VIII; and
(h) Purchaser shall pay to Seller the Purchase Price, less the
Escrow Amount, in cash in U.S. dollars by wire transfer of immediately
available funds to an account designated by Seller prior to the Closing
Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to enter into this Agreement and to
consummate the transactions contemplated herein, Seller represents and warrants
to Purchaser as follows:
3.1 Existence and Good Standing. Seller is a corporation duly organized,
---------------------------
validly existing and in good standing under the laws of the State of Delaware
and has all corporate power and authority required to carry on its business as
currently conducted and to own and operate its business and the Purchased Assets
as currently owned and operated by it. Seller is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which the Purchased
Assets
13
are owned, leased or operated by it or the nature of the Business requires
Seller to qualify to transact business as a foreign corporation, other than such
jurisdictions where the failure to be so qualified, whether singly or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect on
Seller. Seller has heretofore delivered to Purchaser complete and correct copies
of its certificate of incorporation and bylaws as currently in effect. Seller is
not in breach, default or violation (and no event has occurred that with notice
or lapse of time or both would constitute a breach, default or violation) of any
term, condition or provision of its certificate of incorporation or bylaws.
3.2 Authorization and Enforceability. Seller has all necessary corporate
--------------------------------
power and authority to execute deliver this Agreement and the other Acquisition
Documents, to consummate the transactions contemplated hereby and thereby and to
perform its obligations hereunder and thereunder. The execution, delivery and
performance by Seller of this Agreement and the other Acquisition Documents, and
the consummation of the transactions contemplated hereby and thereby, have been
duly and validly authorized by all necessary corporate action, including the
approval of the board of directors of Seller. This Agreement and the other
Acquisition Documents to which it is a party have been duly and validly executed
and delivered by Seller. Assuming the due execution and delivery of this
Agreement and the other Acquisition Documents to which it is a party by
Purchaser, the Acquisition Documents will constitute the legal, valid and
binding agreements of Seller, enforceable against Seller, in accordance with
their respective terms, subject to any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to creditors' rights generally or to general principles of equity governing
specific performance, injunctive relief or other equitable remedies.
3.3 Seller Approvals. Except as set forth on Schedule 3.3, the execution
----------------
and delivery of this Agreement and the other Acquisition Documents, the
consummation of the transactions contemplated hereby or thereby and the
performance by Seller of its obligations hereunder and thereunder do not require
any Governmental Approval from any Governmental Authority or any consent, waiver
or approval or authorization of any third Person. The items set forth on
Schedule 3.3 are referred to collectively as the "Required Seller Approvals."
3.4 Non-Contravention. Except as set forth on Schedule 3.4, the
-----------------
execution, delivery and performance of this Agreement and the other Acquisition
Documents by Seller, and the consummation of the transactions contemplated
hereby and thereby, do not and will not (a) contravene or conflict with the
certificate of incorporation or bylaws of Seller, (b) contravene or conflict
with or constitute a violation of any material order, writ, injunction, decree,
or any provision of any Applicable Law binding upon or applicable to any
Purchased Asset or the Business, or (c) constitute a default under, give rise to
any right of termination, cancellation, modification, or acceleration of, any
Contract (including all Assumed Contracts) or Permit relating to the Business or
by which Seller or any of the Purchased Assets may be bound or materially
affected, or result in a loss of any material benefit to any of the Purchased
Assets or the Business, or result in the creation or imposition of any Lien on
any of the Purchased Assets.
3.5 Undisclosed Liabilities; Financial Information. There are no
----------------------------------------------
Liabilities of Seller relating to any of the Purchased Assets other than (i) the
Assumed Liabilities, and (ii) the Liabilities described on Schedule 3.5 hereto.
14
3.6 Absence of Certain Changes. Except as set forth on Schedule 3.6,
--------------------------
since December 31, 2001, the Business has been conducted in the ordinary course
consistent with past practice, and there has not been:
(a) any event, occurrence, state of circumstances or facts or
changes that has had or that may be reasonably expected to have, either
alone or together, a Material Adverse Effect on the Purchased Assets or
the Business;
(b) any (i) change in any Liabilities of Seller that has had, or
that may be reasonably expected to have, a Material Adverse Effect on
the Purchased Assets or the Business, or (ii) incurrence, assumption or
guarantee of any indebtedness for borrowed money by Seller in connection
with any of the Purchased Assets or the Business;
(c) any (i) payments by Seller in satisfaction of any
Liabilities of Seller related to any of the Purchased Assets or the
Business, other than in the ordinary course of business consistent with
past practice, or (ii) creation, assumption or sufferance of (whether by
action or omission) the existence of any Lien on any of the Purchased
Assets;
(d) any (i) capital expenditure commitment by Seller that is
required to be paid in whole or in part, after the Closing Date,
relating to the Purchased Assets or the Business in excess of Fifty
Thousand Dollars ($50,000) individually or One Hundred Thousand Dollars
($100,000) in the aggregate for additions to property, plant, equipment
or intangible capital assets comprising Purchased Assets or related to
the Business or (ii) sale, assignment, transfer, lease or other
disposition of or agreement to sell, assign, transfer, lease or
otherwise dispose of, any Purchased Asset, other than sales of Inventory
consistent with past practice; and
(e) any material damage, destruction or other casualty loss with
respect to any Purchased Asset or the Business, whether or not covered
by insurance.
3.7 Tangible Personal Property.
--------------------------
(a) Schedule 3.7(a) sets forth a true, correct and complete list
or description of all Equipment and all other tangible personal
properties owned by Seller that are Purchased Assets (collectively the
"Owned Tangible Personal Property"). Seller has good and marketable
title to all Owned Tangible Personal Property, free and clear of any
Liens of any kind or nature whatsoever, except as set forth on Schedule
3.7(a) hereto.
(b) Schedule 3.7(b) hereto sets forth a true, correct and
complete list or description of all Equipment and all other tangible
personal properties leased by Seller that are Purchased Assets (the
"Personal Property Leases", and, together with the Owned Tangible
Personal Property, the "Tangible Personal Property"), together with a
brief description of the property leased. Seller has made available to
Purchaser complete and correct copies of each Personal Property Lease
(and any amendments thereto) listed on Schedule 3.7(b). Except as set
forth on Schedule 3.7(b): (i) each such lease is in full force and
effect; (ii) all lease payments due to date on any such lease have been
paid, and neither Seller nor, to the Knowledge of Seller, any other
party is in default under any such lease, and no event has occurred
which constitutes, or with the lapse of time or the giving of notice or
both would constitute, a default by Seller or, to the Knowledge of
Seller, any other party
15
under such lease; and (iii) there are no disputes or disagreements
between Seller and any other party with respect to any such lease.
(c) All items of Tangible Personal Property currently owned or
used by Seller in the Business are in good operating condition and
repair, subject to ordinary wear and maintenance, are physically located
at or about Seller's place of business and are owned outright by Seller
or validly leased. The owned and leased Tangible Personal Property
consists of all tangible personal property necessary for the operation
of the Business as currently conducted, other than the tangible personal
property listed on Schedule 2.2(a). None of the Tangible Personal
Property is subject to any agreement, arrangement or understanding for
its use by any Person other than Seller, except as set forth on Schedule
3.7(b) with respect to the Personal Property Leases. The maintenance and
operation of the Tangible Personal Property complies in all material
respects with all Applicable Law. Except as set forth on Schedule
3.7(c), no item of Tangible Personal Property owned or used by Seller is
subject to any conditional sale agreement, installment sale agreement or
title retention or security agreement or arrangement of any kind. As to
each item of Tangible Personal Property subject to any such agreement or
arrangement, Schedule 3.7(c) sets forth a brief description of the
property in question and the amount and repayment terms of the
underlying obligation.
(d) Except as set forth in Schedule 3.7(d), there are no gasses
or other Hazardous Materials used in or with any Tangible Personal
Property.
3.8 Litigation. Except as set forth on Schedule 3.8, there are no
----------
actions, suits, claims, charges, hearings, arbitrations, audits, proceedings
(public or private) or investigations (collectively, "Proceedings") that have
been brought or initiated by or against any Governmental Authority or any other
Person, or are pending or, to the Knowledge of Seller, threatened (a) by or
against Seller relating to any of the Purchased Assets or the Business, or (b)
that seeks or would reasonably be expected to prevent, enjoin, alter or delay
the transactions contemplated by this Agreement or any of the other Acquisition
Documents. There are no existing orders, writs, judgments or decrees of any
Governmental Authority relating to any of the Purchased Assets or the Business
that could hinder or prevent the use of the Purchased Assets or the operation of
the Business by Purchaser following the Closing.
3.9 Material Contracts.
------------------
(a) Schedule 3.9(a) sets forth a complete list of all Contracts
that are material to the Business (collectively, with the Personal
Property Leases, the "Material Contracts"), including (i) each Contract
that requires payment by or to Seller in respect of any of the Purchased
Assets or the Business, (ii) all Contracts in respect of the Purchased
Assets relating to, and evidences of, indebtedness for borrowed money or
the deferred purchase price of property (whether incurred, assumed,
guaranteed or secured by any Purchased Asset), (iii) all partnership,
joint venture or other similar Contracts, arrangements or agreements,
relating to the Purchased Assets, (iv) each license of Intellectual
Property Assets by or to Seller and (v) all other Contracts relating to
any of the Purchased Assets where the loss of any such Contract or group
of such Contracts, or a default under any such Contract or group of such
Contracts, could be reasonably expected to be material to the Purchased
Assets or the Business.
16
(b) Each Material Contract is a legal, valid and binding
obligation of Seller and, to the Knowledge of Seller, each other Person
who is a party thereto, enforceable against Seller and, to the Knowledge
of Seller, each such Person in accordance with its terms, subject to any
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws now or hereafter in effect relating to creditors' rights generally
or to general principles of equity governing specific performance,
injunctive relief or other equitable remedies. Neither Seller nor, to
the Knowledge of Seller, any other party thereto is in breach, default
or violation (and no event has occurred that with notice or lapse of
time or both would constitute a breach, default or violation) under any
Material Contract.
(c) Schedule 3.9(c) sets forth a list (by name, address and
contact) of Seller's five (5) most material suppliers to the Business
(both external and, to the extent applicable, internal suppliers) and a
summary description of the products purchased.
3.10 Permits. Schedule 3.10 sets forth all approvals, authorizations,
-------
certificates, consents, licenses, orders and permits and other similar
authorizations of all Governmental Authorities and other Persons necessary for
or material to the operation of the Purchased Assets or the Business
(collectively, the "Permits"). Seller holds, and has held at all times, all
Permits and approvals of Governmental Authorities necessary for the lawful
ownership and operation of the Purchased Assets and the Business. Seller has not
received any notice of, and to the Knowledge of Seller, there is no intention on
the part of, any Governmental Authority to cancel, revoke or modify, or any
inquiries, Proceedings or investigations the purpose or possible outcome of
which is the cancellation, revocation or modification of, any such Permit.
Except as set forth in Schedule 3.10, each Permit is valid and in full force and
effect in all material respects, and none of the Permits will be terminated or
become terminable or impaired in any material respect as a result of the
transactions contemplated by this Agreement and the other Acquisition Documents,
and, except as set forth in Schedule 3.10, each Permit is legally capable of
being transferred to Purchaser and will be effectively transferred to Purchaser
on the Closing Date by delivery of the Bill of Sale.
3.11 Compliance with Applicable Laws. Seller has not violated or
-------------------------------
breached or infringed, and is not violating or breaching or infringing, in any
material respect, in connection with its ownership or use of any of the
Purchased Assets or the operation of the Business, any Applicable Law relating
to the Purchased Assets or the Business or any order, writ, injunction or decree
of any Governmental Authority relating to the Purchased Assets or the Business.
3.12 Employees; Employee Benefits.
----------------------------
(a) Schedule 3.12(a) lists the name of each Business Employee,
together with such Person's position or function. With respect to each
Designated Employee, Seller has provided Purchaser with true and correct
information concerning the annual salary or other wages stock options
and shares of restricted stock (including the number of shares, date of
purchase or grant, exercise or purchase price and vesting schedule), and
any employment agreements, incentives or bonus arrangements, with
respect to such Person. As of the date hereof, to the Knowledge of
Seller, no Business Employee will or may cease to be employed by Seller
for any reason, except through the transactions contemplated by this
Agreement.
17
(b) Schedule 3.12(b) lists all Benefit Arrangements and Employee Benefit
Plans in which any Business Employee participates.
3.13 Labor and Employment Matters. Except as set forth on Schedule 3.13
----------------------------
hereto:
(a) No Business Employee is covered by a collective bargaining
agreement and no petition has been filed or Proceedings instituted with
the National Labor Relations Board by any employee or group of employees
involved in the Business seeking recognition of a bargaining
representative. No organizational effort is currently being made or, to
the Knowledge of Seller, threatened by or on behalf of any labor union
to organize any employees involved in the Business.
(b) There is no labor strike, dispute, slow down or stoppage
pending or, to the Knowledge of Seller, threatened against or affecting
any of the Purchased Assets or the Business. Seller has not received any
notice, nor has Knowledge, of any threatened labor or civil rights
dispute, controversy or grievance or any other unfair labor practice
Proceeding or breach of contract claim or action with respect to claims
of, or obligations to, any Business Employee.
(c) There are no pending or, to Seller's Knowledge, threatened,
Proceedings alleging claims against Seller brought by employees involved
in the Business relating in any way to their employment with Seller, and
Seller has not received any demand letters, civil rights charges, suits
or drafts of suits with respect to claims made, or notice of any
governmental or administrative complaints made, by any of its employees
involved in the Business.
3.14 Intellectual Property.
---------------------
(a) Certain Definitions. The following capitalized terms shall
-------------------
have the following meanings:
(i) "Development Environments" means any device,
programming, documentation, media and other objects, including
compilers, "workbenches," tools, and higher-level or
"proprietary" languages, used by Seller for the development,
maintenance and implementation of any Software, to the extent
such objects may be necessary for any subsequent maintenance or
enhancement of such Software;
(ii) "Intellectual Property Rights" means intellectual
property rights arising from or in respect of the following,
whether protected, created or arising under the laws of the
United States or any other jurisdiction:
(1) fictional business names, trade names,
trademarks and service marks (whether registered or
unregistered, including any applications for
registration of any of the foregoing), logos, Internet
domain names, trade dress rights and general intangibles
of a like nature, together with the goodwill associated
with any of the foregoing (collectively, "Marks");
(2) all classes or types of patents, utility
models and design patents (including, without
limitation, originals, divisions, continuations,
continuations-in-part, extensions or reissues), and
applications for these classes or types of patent rights
in all countries of the world (and any patents issuing
thereon) (collectively, "Patents");
18
(3) copyrights and registrations and
applications therefor (collectively, "Copyrights") and
mask work rights; and
(4) IC layout, validation documentation,
know-how, inventions (whether or not the subject of a
pending patent disclosure or patent application),
discoveries, concepts, ideas, methods, processes,
designs, formulae, technical data, drawings,
specifications, data bases, models, prototypes,
specimens, notes, documents, schematics, layout, and
other data and materials and other proprietary and
confidential information, including customer lists, in
each case excluding any rights in respect of any of the
foregoing that comprise or are protected by Copyrights,
mask work rights or Patents (collectively, "Trade
Secrets");
(iii) "Intellectual Property Assets" means all
Intellectual Property Rights and other intangible property owned
or licensed by Seller or used or exercised by Seller in
connection with or necessary to any of the Purchased Assets, the
Products or the Business (including the manufacture, use or
testing of the Purchased Assets), but excluding the Excluded
Patents, Excluded Trade Secrets, Excluded Copyrights, Excluded
Licensed Software and Excluded Marks;
(iv) "Software" means any and all (w) computer programs,
including any and all software implementations of algorithms,
models and methodologies, whether in source code or object code,
(x) databases and compilations, including any and all data and
collections of data, whether machine readable or otherwise, (y)
descriptions, flow-charts and other work product used to design,
plan, organize and develop any of the foregoing, and (z) all
documentation, including user manuals and training
documentation, relating to any of the foregoing, in each case
developed by or for, or licensed or made available to, Seller
and used in connection with any of the Purchased Assets or the
Business; and
(v) "Offered Trade Secrets" means all memoranda of
unpatented technology and know-how used by Seller in connection
with any of the Purchased Assets or the Business and that are
not covered by any patents or patent applications included in
the Offered Patents, other than the Excluded Trade Secrets.
(b) Marks. Schedule 3.14(b) sets forth an accurate and complete
-----
list of all Marks related to any of the Purchased Assets or the
Business. Except as set forth on Schedule 3.14(b), there is no trademark
or service mark or application therefor of any other Person that is
potentially conflicting with any Mark related to any of the Purchased
Assets or the Business, and Seller's use of any Mark does not create a
likelihood of confusion with any trade name, trademark or service mark
of any other Person.
(c) Offered Patents. Schedule 3.14(c)(i) sets forth an accurate
---------------
and complete list of all Patents (other than the Excluded Patents) used
in connection with any of the Purchased Assets or the Business (the
"Offered Patents"). Except as set forth on Schedule 3.14(c)(ii):
(i) Seller is the owner of all right, title and interest
in and to all Offered Patents, in each case free and clear of
any and all Liens, and Seller and its Affiliates have not
received any notice or claim (whether written or oral)
challenging Seller's complete and
19
exclusive ownership of the Offered Patents or suggesting that
any other Person has any claim of legal or beneficial ownership
with respect thereto;
(ii) Seller and its Affiliates have not received any
notice or claim (whether written or oral) challenging or
questioning the validity or enforceability of any of the issued
Offered Patents or indicating an intention on the part of any
Person to bring a claim that any Offered Patent is invalid, is
unenforceable or has been misused and, to Seller's Knowledge, no
Offered Patent otherwise has been challenged or threatened in
any way;
(iii) the Offered Patents are valid and enforceable,
provided that no representation regarding validity or
enforceability is made with respect to patent applications;
(iv) Seller has not taken any action or failed to take
any action (including a failure to disclose material prior art
in connection with the prosecution of any Patent), used the
Purchased Assets, or used or enforced (or failed to use or
enforce) any of the Offered Patents in a manner that would
result in the abandonment or unenforceability of any of the
Offered Patents;
(v) the inventions disclosed in the Offered Patents may
be practiced by Seller without infringing any other patents
owned by any Person;
(vi) Seller has taken reasonable steps to protect
Seller's rights in and to the Offered Patents, in each case in
accordance with standard industry practice;
(vii) Seller has not granted to any Person any right,
license or permission to practice any of the Offered Patents;
(viii) all of the Offered Patents are currently in
compliance with legal requirements (including payment of filing,
examination, and maintenance fees and proofs of working or use);
(ix) all maintenance fees, annuities, and the like due
on the Offered Patents have been timely paid;
(x) no Offered Patent has been or is now involved in any
interference, reissue, reexamination or opposition Proceeding or
any other litigation or Proceeding of any kind;
(xi) there is no Patent issued to or filed by any other
Person, which Patent is potentially interfering with any Offered
Patents;
(xii) the activities, technology, products or operations
of no other Person have infringed or are infringing in any
material respect on any of the Offered Patents; and
(xiii) Seller is not currently infringing and has not
infringed the Patents of any other Person in the operation of
the Business.
20
(d) Copyrights/Maskworks. There are no registered Copyrights
--------------------
(whether registered with the United States Copyright Office or in the
appropriate office in any foreign jurisdiction) owned by Seller and no
pending applications for registration of Copyrights filed by Seller (or
by a third party that has assigned its rights thereunder to Seller)
anywhere in the world related to any Purchased Asset or the Business
(collectively, "Registered Copyrights"). Except as set forth on Schedule
3.14(d):
(i) Seller is the owner of all right, title and interest
in and to each of the Copyrights used by Seller in connection
with the Purchased Assets and the Business other than those as
to which the rights being exercised by Seller have been licensed
from another Person and all maskwork rights in connection with
the Business (collectively, "Owned Copyrights/Maskworks"), free
and clear of any and all Liens, covenants, conditions and
restrictions or to Seller's Knowledge, other adverse claims or
interests of any kind or nature, and Seller and its Affiliates
have not received any notice or claim (whether written or oral)
challenging Seller's complete and exclusive ownership of the
Owned Copyrights/Maskworks or suggesting that any other Person
has any claim of legal or beneficial ownership with respect
thereto;
(ii) Seller and its Affiliates have not received any
notice or claim (whether written or oral) challenging or
questioning the validity or enforceability of any of the Owned
Copyrights/Maskworks or indicating an intention on the part of
any Person to bring a claim that any Owned Copyright/Maskwork is
invalid, is unenforceable or has been misused and, to Seller's
Knowledge, no Owned Copyright/Maskwork otherwise has been
challenged or threatened in any way;
(iii) Seller has not taken any action or failed to take
any action, used the Purchased Assets, or used or enforced (or
failed to use or enforce) any of the Owned Copyrights/Maskworks,
in each case in a manner that would result in the
unenforceability of any of the Owned Copyrights/Maskworks;
(iv) Seller has taken all reasonable steps to protect
Seller's rights in and to the Owned Copyrights/Maskworks, in
each case in accordance with standard industry practice;
(v) Seller has not granted to any Person any right,
license or permission to exercise any rights under any of the
Owned Copyrights/Maskworks other than non-exclusive licenses of
Software granted in the ordinary course of business to
customers;
(vi) to the Knowledge of Seller, no other Person has
infringed or is infringing in any material respect any of the
Owned Copyrights/Maskworks; and
(vii) Seller is not currently infringing and has not
infringed the Copyrights of any other Person in the conduct of
the Business.
(e) Trade Secrets. Seller has taken reasonable precautions in
-------------
accordance with standard industry practice to protect the secrecy,
confidentiality and value of all Offered Trade Secrets of Seller. Except
as set forth on Schedule 3.14(e):
21
(i) Seller has the absolute and unrestricted right to
use all of the Offered Trade Secrets and none of the Offered
Trade Secrets is subject to any Liens, and Seller and its
Affiliates have not received any notice or claim (whether
written or oral) challenging Seller's absolute and unrestricted
right to use any of the Offered Trade Secrets or suggesting that
any other Person has any claim of any kind with respect thereto;
(ii) except under appropriate confidentiality
obligations that, to the Knowledge of Seller, have been fully
observed and performed, there has been no disclosure by Seller
of material confidential information or other Offered Trade
Secrets to any other Person;
(iii) to Seller's Knowledge, no other Person has
misappropriated any of the Offered Trade Secrets; and
(iv) Seller has not misappropriated the Trade Secrets of
any other Person in connection with the Business or the
Purchased Assets.
(f) Software. Schedule 3.14(f) sets forth a complete and
--------
accurate list of all of the Software (i) that is owned by Seller and
necessary to or used in the operation of the Purchased Assets or the
Business (collectively, the "Offered Software"), and (ii) all Software
that is used by Seller in connection with any of the Purchased Assets
and the Business that is not exclusively owned by Seller (collectively,
the "Licensed Software"), excluding off-the-shelf desktop applications
(other than Development Environments) available on reasonable terms
through commercial distributors or in consumer retail stores for a
license fee of no more than Ten Thousand Dollars ($10,000). Except as
set forth on Schedule 3.14(f):
(i) Seller is the owner of all right, title and interest
in and to all Offered Software, including all Copyrights, Trade
Secrets and other Intellectual Property Rights relating thereto,
in each case free and clear of any and all Liens, and Seller and
its Affiliates have not received any notice or claim (whether
written or oral) challenging Seller's complete and exclusive
ownership of all Offered Software and all such Intellectual
Property Rights relating thereto, or suggesting that any other
Person has any claim of legal or beneficial ownership with
respect thereto;
(ii) Seller has not assigned, licensed, transferred or
encumbered to or for the benefit of any Person any of its rights
in or to any Offered Software in which it has rights, including
any Copyrights, Trade Secrets or other Intellectual Property
Rights of Seller with respect thereto, excluding any
non-exclusive licenses granted to customers in the ordinary
course of business;
(iii) no source code of any Offered Software has been
licensed or otherwise made available to any Person, Seller has
treated the source code of the Offered Software, and the data
associated therewith, as confidential and proprietary business
information, and has taken all reasonable steps to protect the
same as trade secrets of Seller;
(iv) any Person identified in Schedule 3.14(f) as having
received any such source code or confidential data is bound by
an appropriate confidentiality and non-
22
disclosure agreement with respect thereto, and Seller is not
aware of any material breach of any such agreement or any
threatened disputes or disagreements with respect thereto;
(v) none of the Offered Software developed by or for
Seller contains any programming code, documentation, or other
materials or any Development Environments that embody
Intellectual Property Rights of any Person other than Seller,
except for such materials or Development Environments obtained
by Seller from Persons that make such materials or Development
Environments generally available on standard commercial terms
and that have expressly licensed Seller to utilize such
materials or Development Environments in the manner they have
been utilized;
(vi) Seller has lawfully acquired the right to use the
Licensed Software as it is used in connection with any of the
Purchased Assets or the Business as currently conducted, and has
not exercised any rights in respect of any Licensed Software,
including any reproduction, distribution or derivative work
rights, outside the scope of any license expressly granted by
the Person from which the right to use such Licensed Software
was obtained;
(vii) no royalties, fees, honoraria or other payments
are payable by Seller to any Person by reason of the ownership,
use, sale, licensing, distribution or other exploitation of any
Offered Software;
(viii) none of the Offered Software products that Seller
has distributed or otherwise made available to third parties or
that have been designed by Seller for commercial distribution
(i) contain any Licensed Software, or (ii) contain any lines of
code or other Software licensed to Seller by any other third
party that has made such Software (or other Software from which
such Software is derived) available to Seller subject to the
condition that Seller make publicly available such source code
or that Seller shall not charge a fee or otherwise seek any
compensation in connection with redistributing or otherwise
exploiting such Software; and
(ix) the Offered Software was (A) developed by employees
of Seller in the course of their employment by Seller, (B)
developed by independent contractors that have assigned in
writing to Seller all such contractors' respective rights in the
Software developed thereby or (C) otherwise acquired by Seller
from a third party pursuant to a written agreement containing an
express assignment of rights by such third party to Seller.
(g) Software Documentation. Except as set forth in Schedule
----------------------
3.14(g), Seller has taken all actions customary in the software industry
to document the Offered Software and its operation.
(h) Agreements in Respect of Licensed Technology. As of the
--------------------------------------------
Closing Date, there are no license agreements (i) granting to Seller any
material right to use or practice any rights under any Intellectual
Property Rights relating to any Purchased Asset or the Business or (ii)
that involve payments or other obligations from the Seller of Fifty
Thousand Dollars ($50,000) or more relating to any Purchased Asset or
the Business ("Licensed Technology Agreements").
23
(i) Agreements Involving Distribution or Other Rights Granted to
------------------------------------------------------------
Third Parties. As of the Closing Date, there are no agreements or
-------------
arrangements involving the grant by Seller to any Person of any right to
distribute, develop, prepare derivative works based on, support or
maintain or otherwise commercially exploit any Software or other
Intellectual Property Assets included in the Purchased Assets, including
any value-added reseller agreements, joint development or marketing
agreements or strategic alliance agreements involving any Software or
such products or technology (collectively, "Technology Exploitation
Agreements").
(j) Sufficiency of Owned and Licensed Intellectual Property.
-------------------------------------------------------
Except as set forth in Schedule 3.14(j), and subject to the provisions
of Section 3.14(k), the Offered Software, Offered Patents, the Owned
Copyrights/Maskworks, the Offered Trade Secrets, the Licensed
Intellectual Property, the Excluded Patents, the Excluded Trade Secrets,
the Excluded Licensed Software and the Excluded Copyrights constitute
all of the Intellectual Property Rights used in, material to or
necessary for the Purchased Assets and the Business.
(k) Infringement. Except as set forth in Schedule 3.14(k),
------------
neither Seller nor any of its Affiliates is, nor has Seller or its
Affiliates been during the three (3)-year period prior to the date
hereof, a party to any Proceeding, nor is, or during the one (1)-year
period prior to date hereof has been, any Proceeding threatened, that
involves or involved a claim of infringement, misappropriation or other
wrongful use or exploitation, either (i) by Seller or any of its
Affiliates against any other Person, or (ii) by any Person against
Seller or any of its Affiliates of any Intellectual Property Asset or
other Intellectual Property Right used or exploited by Seller in the
operation of any Purchased Asset or the Business, nor, to the Knowledge
of Seller, is there any reasonable basis therefore. Except as set forth
in Schedule 3.14(k), the use, practice or other exploitation (including,
in the case of Products, the sale, licensing or other distribution) of
(A) any of the Offered Patents, (B) any of the Products used, made,
marketed, sold or licensed by Seller in the course of operating the
Business, or contemplated by Seller to so be made, marketed, sold or
licensed, (C) the subject matter of any Owned Copyrights/Maskworks or
any other work of authorship fixed in a tangible medium that is used,
copied, modified, displayed or distributed in connection with the
operation by Seller of any of the Purchased Assets or the Business,
including any Offered Software, (D) any of the Offered Trade Secrets,
(E) any of the Licensed Intellectual Property, and (F) any other
Intellectual Property Assets, do not conflict with, infringe upon,
violate, or result in a misappropriation of, any patent, copyright,
trade secret or other Intellectual Property Right or other right of any
Person, nor is any of the foregoing subject to any outstanding order,
judgment, decree, stipulation or agreement restricting the use thereof
by Seller or, in the case of any Intellectual Property Asset licensed to
others, restricting the sale, transfer, assignment or licensing thereof
by Seller to any Person. Except as set forth in Schedule 3.14(k), Seller
has the exclusive right to bring actions against any Person that is
infringing any Intellectual Property Assets other than Licensed
Intellectual Property and to retain for itself any damages recovered in
any such action.
(l) Employee Confidentiality Agreements. Except as set forth in
-----------------------------------
Schedule 3.14(l), all current and former employees and consultants of
Seller whose duties or responsibilities relate or related to any of the
Purchased Assets or the Business have entered into confidentiality,
invention assignment and proprietary information agreements with Seller
in substantially the form provided to Purchaser. No employee or
consultant of Seller whose duties or responsibilities relate to any of
the Purchased Assets or the Business is obligated under any agreement
(including licenses, covenants or commitments of any nature) or subject
to any judgment, decree or order of any court or administrative agency,
or any other restriction that would conflict with the Purchased Assets
or the Business. No Designated Employee is obligated under any
24
agreement (including licenses, covenants or commitments of any nature)
or subject to any judgment, decree or order of any court or
administrative agency, or any other restriction that would interfere
with the use of his or her best efforts to carry out his or her duties
for Seller or to promote the interests of Seller in connection with the
Business or the Purchased Assets. Except as set forth in Schedule
3.14(l), it will not be necessary to utilize any inventions or any other
intellectual property of any employees of Seller acquired prior to their
employment by Seller in order to carry on the Business as currently
carried on by Seller. At no time during the conception of or reduction
to practice of any of the Intellectual Property Rights owned by Seller
was any developer, inventor or other contributor to such Intellectual
Property Right operating under any grants from any Governmental
Authority or private source, performing research sponsored by any
Governmental Authority or private source or subject to any employment
agreement or invention assignment or nondisclosure agreement or other
obligation with any third party that could adversely affect Seller's
rights in such Intellectual Property Rights. Schedule 3.14(l) lists each
present and past employee, independent contractor and consultant who
participated in a material way in the creation or development of any
Offered Software or any other material Intellectual Property Asset,
indicating, in the case of any such employee, whether such employee is a
present or past employee and, if a past employee, the name of the
current employer of such past employee. Without limiting the generality
of the foregoing, Schedule 3.14(l) specifically identifies each inventor
named in any Offered Patents (either individually or jointly with
others), and indicates whether such inventor is a current employee of
Seller and, if not a current employee of Seller, (i) the relationship of
such inventor to Seller at the time the respective invention was made
and the present relationship, if any, of such inventor with Seller, and
(ii) the employer and current position of such inventor with such
employer.
(m) Export Restrictions. Seller has not exported or transmitted
-------------------
Offered Software or other products in connection with any of the
Purchased Assets or the Business to any country to which such export or
transmission is restricted by any United States Applicable Law, without
first having obtained all necessary and appropriate United States or
foreign government licenses or permits.
(n) Disabling Code and Contaminants. The components manufactured
-------------------------------
by Seller and used in its Products or the Business are free of any
disabling codes or instructions (a "Disabling Code"), and any virus or
other intentionally created, undocumented contaminant (a "Contaminant"),
that may, or may be used to, access, modify, delete, damage or disable
any Systems (as defined below) or that may result in damage thereto.
Seller has taken reasonable steps and implemented reasonable procedures
to ensure that its internal computer systems used in connection with the
Purchased Assets and the Business (consisting of hardware, software,
databases or embedded control systems, "Systems") are free from
Disabling Codes and Contaminants. The components used in connection with
the Purchased Assets or the Business obtained by Seller from third party
suppliers are, to the Knowledge of Seller, free of any Disabling Codes
or Contaminants that may, or may be used to, access, modify, delete,
damage or disable any of the Systems or that might result in damage
thereto.
25
(o) Performance of Existing Products. None of Seller's Products
--------------------------------
other than prototype Products have been distributed or otherwise made
available to third parties.
3.15 Insurance. Seller maintains insurance policies currently in effect
---------
covering the Purchased Assets and the Business which constitute insurance
against all risks of a character and in such amounts as are usually insured
against by similarly situated companies in the same or similar businesses. All
of such insurance policies are in full force and effect and are valid,
outstanding and enforceable, and all premiums due thereon have been paid in
full. Seller has complied in all material respects with the provisions of all
such policies. No insurer under any such insurance policy has cancelled or
generally disclaimed liability under any such policy or indicated any intent to
do so or not to renew any such policy. All material claims under the policies
have been filed in a timely fashion.
3.16 Tax Matters.
-----------
(a) To the extent the resolution thereof could adversely affect
Purchaser's use or ownership of the Purchased Assets or the Business, or
could otherwise result in successor liability of Purchaser, Schedule
3.16 sets forth all pending examinations or audits with respect to the
Business or the Purchased Assets and all outstanding proposed or final
assessments and deficiencies with respect to the Tax Returns with
respect to the Purchased Assets or the Business;
(b) To the extent that failure to do so would adversely affect
Purchaser's use or ownership of the Purchased Assets or the Business or
otherwise result in Purchaser incurring successor liability, Seller has
filed on a timely basis all Tax Returns required to have been filed by
it with respect to the Business or the Purchased Assets and has paid on
a timely basis all Taxes required to be shown thereon as due. All such
Tax Returns in all material respects are complete, accurate and
correctly reflect the Tax liability required to be reported thereon;
(c) To the extent that failure to do so would adversely affect
Purchaser's use or ownership of the Purchased Assets or the Business, or
otherwise result in successor liability to the Purchaser, no director,
officer or employee of Seller having responsibility for Tax matters has
reason to believe that any taxing authority has valid grounds to claim
or assess any additional Tax with respect to the Purchased Assets.
Seller has not received notice that it is or may be subject to Tax with
respect to the Business or the Purchased Assets in a jurisdiction in
which it has not filed or does not currently file Tax Returns with
respect to the Business or the Purchased Assets;
(d) To the extent that failure to do so would adversely affect
Purchaser's use or ownership of the Purchased Assets or the Business,
or otherwise result in successor liability to the Purchaser, all Taxes
that were required to be collected or withheld by Seller with respect to
the Business or the Purchased Assets have been duly collected or
withheld, and all such amounts that were required to be remitted to any
taxing authority have been duly remitted;
(e) Seller has not taken any action other than in the ordinary
course consistent with past practice that would have the effect of
deferring any Tax Liability with respect to the Business or the
Purchased Assets from any taxable period ending on or before or
including the Closing Date to any subsequent taxable period;
26
(f) There are no Liens for Taxes (other than for current Taxes
not yet due and payable) upon any of the Purchased Assets; and
(g) None of the Purchased Assets is property that is required to
be treated as owned by any other Person pursuant to the "safe harbor
lease" provisions of former Section 168(f)(8) of the Internal Revenue
Code of 1954, as amended and in effect immediately prior to the
enactment of the Tax Reform Act of 1986, and none of the Purchased
Assets is "tax exempt use property" within the meaning of Section 168(h)
of the Code.
3.17 Title to and Sufficiency of the Purchased Assets. Except as set
------------------------------------------------
forth on Schedule 3.17, Seller has, and following the Closing Purchaser will
have, good, valid and marketable title to the Purchased Assets, free and clear
of Liens. Except as set forth on Schedule 3.17, the Purchased Assets, together
with the Excluded Patents, the Excluded Trade Secrets, the Excluded Copyrights,
the Excluded Licensed Software and the tangible personal property listed on
Schedule 2.2(a), constitute all of the rights, properties and assets of every
kind, character and description, wherever located and whether tangible or
intangible, real or personal, or fixed or contingent, that are used or material
to or necessary for the Business on or prior to the Closing Date. There is no
existing agreement with, option or right of, or commitment to any Person to
acquire any of the Purchased Assets or any interest therein, other than
Contracts entered into in the ordinary course of business for the sale of
Inventory.
3.18 Supplier and Foundry Relationships. Schedule 3.18 sets forth a
----------------------------------
complete and correct description of each and every (i) foundry relationship,
wafer and circuit board manufacturing and fabricating agreement, understanding
or commitment in connection with the Purchased Assets or the Business, (ii)
integrated circuit die, circuit board or device purchase, supply or service
agreement, understanding or commitment, used by or in connection with the
Purchased Assets or the Business, in whole or in part, whether written or oral,
and (iii) any other agreements or contracts, whether written or oral, under
which Seller obtained services or products for the Business and use in producing
Seller's Products ("Supply Contracts"). Seller has delivered to Purchaser a
correct and complete copy of each Supply Contract and provided a written summary
of each material oral Supply Contract. There are no fees, penalties, price
uplifts, shortfall payments, bill backs or other amounts outstanding under such
Supply Contracts. The quantities available for purchase under each such Supply
Contract are as stated on the face of such Supply Contract or are summarized on
Schedule 3.18. There are no manufacturing or service sites that Seller has
qualified with respect to manufacture or service of the Products. All
manufacturing or service terms and conditions are as they appear to be on the
face of the Supply Contracts. Seller has not received any written or oral notice
from the other party to any Supply Contract, or from any other supplier to
Seller related to any Purchased Asset or the Business, to the effect that such
party will not accept purchase orders from Seller on such terms, conditions or
quantities consistent with past practices. Prices required to be paid for
products or services under such Supply Contracts are stated in such Supply
Contracts or summarized on Schedule 3.18. No condition exists that permit a
termination or a material change of such Supply Contracts by the other party
under such Supply Contract.
3.19 Customers. Schedule 3.19 sets forth a true, correct and complete
---------
list of the Persons to which Seller has delivered any Products.
27
3.20 Inventory. Schedule 2.1(c) sets forth a list of Inventory included
---------
in the Purchased Assets. All Inventory was acquired in the ordinary course of
business consistent with past practice.
3.21 Product Warranties. Seller has made no oral or written product
------------------
warranties and guaranties to any third Person with respect to the Purchased
Assets (including the Products).
3.22 Advisory Fees. Other than Thomas Weisel Partners, whose fee is
-------------
payable solely by Seller, there is no investment banker, broker, finder or other
intermediary or advisor that has been retained by or is authorized to act on
behalf of Seller, who might be entitled to any fee, commission or reimbursement
of expenses from Seller or its Affiliates or Associates, upon consummation of
the transactions contemplated by this Agreement.
3.23 Full Disclosure. The information contained in this Agreement and
---------------
the Schedules and Exhibits are true, correct and complete in all material
respects and do not omit to state any material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
3.24 Substantially All Assets. The Purchased Assets do not constitute
------------------------
"all or substantially all" of the assets of Seller, for purposes of Section 271
of the Delaware General Corporation Law.
3.25 Photonetics Litigation. The Products do not infringe any claim of
----------------------
U.S. Patent No. 5,594,744, entitled "Singlemode Laser Source Tunable in
Wavelength with a Self-Aligned External Cavity", issued January 14, 1997. No
disclosure in any Schedule hereto shall be deemed to constitute an exception to
the representation and warranty set forth in this Section 3.25, nor limit the
rights and remedies of Purchaser under this Agreement for any breach by Seller
of the representation and warranty set forth in this Section 3.25.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into this Agreement and to
consummate the transactions contemplated herein, Purchaser hereby represents and
warrants to Seller as follows:
4.1 Existence and Good Standing. Purchaser is a corporation duly
---------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware and has all corporate power and authority required to carry on its
business as now conducted and to own and operate its businesses as now owned and
operated by it.
4.2 Authorization and Enforceability. The execution, delivery and
--------------------------------
performance by Purchaser of this Agreement and the other Acquisition Documents,
and the consummation of the transactions contemplated hereby and thereby, are
within Purchaser's powers and have been duly authorized by all necessary
corporate action. This Agreement has been and, when executed at the Closing, the
other Acquisition Documents to which it is a party will have been, duly and
validly executed and delivered by Purchaser, and, assuming the due execution and
delivery of this Agreement and the other Acquisition Documents by Seller, will
constitute the legal, valid and binding agreements of Purchaser, enforceable
against it in accordance with their respective terms,
28
subject to any applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereafter in effect relating to creditors' rights generally
or to general principles of equity governing specific performance, injunctive
relief or other equitable remedies.
4.3 Governmental or Other Authorization. The execution, delivery and
-----------------------------------
performance by Purchaser of this Agreement and the other Acquisition Documents
to which it is a party, and the consummation by it, respectively, of the
transactions contemplated hereby and thereby, require no Governmental Approval
from any Governmental Authority or any consent, waiver or approval of any third
Person (such required consents and approvals, the "Required Purchaser
Approvals").
4.4 Non-Contravention. The execution, delivery and performance of this
-----------------
Agreement and the other Acquisition Documents by Purchaser and the consummation
of the transactions contemplated hereby and thereby, do not and will not (a)
contravene or conflict with the certificate of incorporation or bylaws of
Purchaser, (b) contravene or conflict with or constitute a material violation of
any provision of any Applicable Law binding upon or applicable to Purchaser, or
(c) contravene or constitute a default under any material agreement to which
Purchaser is a party.
4.5 Advisory Fees. There is no investment banker, broker, finder or
-------------
other intermediary or advisor that has been retained by or is authorized to act
on behalf of Purchaser, who might be entitled to any fee, commission or
reimbursement of expenses from Purchaser or its Affiliates or Associates, upon
consummation of the transactions contemplated by this Agreement.
ARTICLE V
COVENANTS OF SELLER
Seller agrees that:
5.1 Compliance with Terms of Required Seller Approvals. From and after
--------------------------------------------------
the Closing Date, Seller shall comply at its own expense with all conditions and
requirements imposed on Seller as set forth in (a) the Required Seller Approvals
that are Governmental Approvals, to the extent necessary such that all such
Governmental Approvals will remain in full force and effect assuming, if
applicable, continued compliance of the terms thereof by Seller and (b) all
Required Seller Approvals of Persons other than Governmental Authorities, to the
extent necessary such that all such consents and approvals will remain effective
and enforceable against the Persons giving such consents and approvals,
assuming, if applicable, continued compliance with the terms thereof by
Purchaser.
5.2 Access to Information. From and after the Closing Date, upon
---------------------
reasonable request of Purchaser (made pursuant to a written notice describing
Purchaser's needed information and the reason for such need) and during normal
business hours, Purchaser shall be provided access to accounting records,
financial statements and work papers and letters from accountants and auditors
of Seller to the extent that they relate to the Purchased Assets, the Assumed
Liabilities or the Business and are reasonably necessary to Purchaser. Seller
shall, and shall cause its employees, agents and representatives to, cooperate
fully with such requests. Any information provided under this Section 5.2 shall
be deemed Confidential Information and each of the parties hereto will hold, and
will cause its consultants and advisers to hold, in confidence all documents and
information furnished to it by or on behalf of another party to this Agreement
in connection with the
29
transactions contemplated by this Agreement pursuant to the terms of that
certain Confidentiality Agreement No. 5071337 entered into between Seller and
Purchaser dated May 1, 2002 (the "CNDA").
5.3 Retention of Books and Records. Seller shall retain any documents
------------------------------
described in Section 5.2 not included in the Purchased Assets relating to the
Business or any of the Purchased Assets for a period of at least three (3) years
after the Closing Date.
5.4 Delivery. Upon or promptly after the Closing, Seller shall deliver
--------
possession to Purchaser of at least one (1) tangible copy of any and all
Software used in connection with the Business that is either a Purchased Asset
or licensed to Purchaser under the Seller License Agreement in compliance with
the Delivery Protocol.
5.5 Transfer of Purchased Assets. For a period of eighteen (18) months
----------------------------
after the Closing Date, upon Purchaser's request, Seller shall provide Purchaser
with any information reasonably requested by Purchaser that is necessary to
confirm that the Purchased Assets constitute all of the tangible and intangible
assets and rights used in or necessary to the Business (other than the Excluded
Patents, Excluded Trade Secrets, Excluded Licensed Software and Excluded
Copyrights, and other than any tangible personal property listed or described in
Section 2.2(a) or on Schedule 2.2(a)) or that should otherwise constitute
Purchased Assets under this Agreement. Purchaser shall have the right and
authority to collect items included in the Purchased Assets not previously
delivered to Purchaser by Seller, and Seller agrees that it will promptly
transfer or deliver to Purchaser from time to time any cash or other property
that Seller may receive with respect to any claims, contracts, licenses, leases,
commitments, sales orders, purchase orders, assets of any character or any other
items which are among the Purchased Assets. If Seller and Purchaser shall
jointly determine that the Purchased Assets inadvertently included tangible
personal property that should have been Excluded Assets, Purchaser shall
reconvey such tangible personal property to Seller.
5.6 Nonsolicitation.
---------------
(a) Seller agrees that it will not offer employment (whether as
a full or part time employee or as a consultant) to any Transferred
Employee until six (6) months after the Closing Date. Seller shall be
free to post general employment advertisements and use employee search
firms, but shall not be entitled to hire any Transferred Employee
responding thereto in violation of this provision.
(b) Seller agrees that, for a period of eighteen (18) months
from the six month anniversary of the Closing Date, it will not directly
or indirectly, solicit for employment any Transferred Employees;
provided however, that Seller will be permitted to hire Transferred
Employees who are contacted as a result of Seller's use of general
newspaper advertisement and other general non-targeted recruitment
techniques in the ordinary course of business and consistent with past
practices as opposed to targeted solicitations of any one or more of the
Transferred Employees.
30
(c) Notwithstanding the provisions of Section 5.6(a) or (b),
Seller may offer employment to any Transferred Employee who is
involuntarily terminated by Purchaser or leaves Purchaser's employment
due to a voluntary separation program.
ARTICLE VI
COVENANTS OF PurchasER
Purchaser agrees that:
6.1 Compliance with Terms of Governmental Approvals and Consents. From
------------------------------------------------------------
and after the Closing Date, Purchaser shall comply at its own expense with all
conditions and requirements imposed on Purchaser as set forth in (a) the
Required Purchaser Approvals that are Governmental Approvals, to the extent
necessary such that all such Governmental Approvals will remain in full force
and effect assuming, if applicable, continued compliance of the terms thereof by
Seller and (b) all Required Purchaser Approvals of Persons other than
Governmental Authorities, to the extent necessary such that all such consents
and approvals will remain effective and enforceable against the Persons giving
such consents and approvals, assuming, if applicable, continued compliance with
the terms thereof by Seller.
6.2 Employees and Offers of Employment.
----------------------------------
(a) Purchaser has, prior to the date of this Agreement, made
contingent offers of employment to the Designated Employees on an "at
will" basis on terms reasonably determined by Purchaser to be attractive
to such employees and consistent with this Agreement.
(b) Designated Employees who have accepted Purchaser's offer of
employment prior to the Closing Date with such employment to be
effective beginning on the Closing Date (each a "Transferred Employee")
will be eligible to participate in employee benefit plans, stock option
and other compensation plans that are generally available to
similarly-situated employees of Purchaser. Transferred Employees shall
be given credit for service performed for Seller ("Service Credit") for
purposes of the following Purchaser benefits:
(i) Regular paid time off under Purchaser's policies
(vacation and personal absence rates);
(ii) Purchaser's Sheltered Employee Retirement Plan
("SERP"), vesting and eligibility only;
(iii) Purchaser's Sheltered Employee Retiree Medical
Account ("SERMA"), eligibility only;
(iv) Purchaser's Retiree Medical Plan ("IRMP")
eligibility;
(v) Purchaser's short-term disability plan (Seller
service will reduce the benefit limitation period for conditions
occurring during the first three months of plan participation,
if the employee enrolls at Purchaser);
31
(vi) Purchaser's long-term disability plan: Seller hire
date will apply for purposes of the pre-existing condition
exclusion; Seller service will reduce the exclusion period for
conditions occurring during the first twelve (12) months of plan
participation;
(vii) Purchaser's next level service awards (prior
service toward next Purchaser milestone); and
(viii) Determining the stock option exercise period
following retirement for Purchaser stock options.
(c) Transferred Employees shall not be given Service Credit for
the following Purchaser benefits:
(i) Eligibility for Purchaser's sabbatical;
(ii) Eligibility for stock option vesting acceleration
upon retirement for Purchaser stock options;
(iii) Purchaser SERMA contributions or benefit accrual;
(iv) Purchaser SERP benefit accrual, including 401(k)
and profit sharing portions;
(v) Purchaser's Long-term disability plan (conditions
existing prior to the Seller hire date are not covered); and
(vi) Purchaser's Home PC program.
With respect to the foregoing Purchaser benefits, Service Credit shall
be counted as of the date the employees are covered by Purchaser's GENI payroll
system.
(d) Purchaser shall not assume any compensatory stock options to
purchase shares of Seller's capital stock held by Transferred Employees.
(e) Purchaser shall be responsible for providing COBRA
continuation coverage for each qualifying event under Purchaser's health
care plans occurring after the Closing Date and relating to a
Transferred Employee (or relating to any individual who constitutes a
qualified beneficiary with respect to a Transferred Employee). In all
other cases, Seller shall be responsible for providing COBRA
continuation coverage with respect to the Business Employees and their
qualified beneficiaries.
(f) Purchaser and Seller shall use commercially reasonable
efforts to enable rollover of any Seller 401(k) plan account balances
for eligible Transferred Employees to the Purchaser 401(k) plan. The
final determination of eligibility and whether to accept any rollover
contributions shall be made by the plan administrator of Purchaser's
401(k) plan in accordance with the Purchaser 401(k) plan terms and in
the plan administrator's sole discretion.
32
6.3 Nonsolicitation.
---------------
(a) Purchaser's Optical Products Division (the "Optical Products
Division") agrees that it will not offer employment (whether as a full
or part time employee or as a consultant) to any employee of Seller
other than the Transferred Employees until six (6) months after the
Closing Date (the "Seller Employees"). The Optical Products Division
shall be free to post general employment advertisements and use employee
search firms, but shall not be entitled to hire any of the Seller
Employees responding thereto in violation of this provision.
(b) The Optical Products Division agrees that, for a period of
eighteen (18) months from the six month anniversary of the Closing Date,
it will not directly or indirectly, solicit for employment any Seller
Employees; provided however, that the Optical Products Division will be
permitted to hire Seller Employees (i) who are not engineers, directors
or executives; or (ii) who are contacted as a result of Optical Products
Division's use of general newspaper advertisement and other general
non-targeted recruitment techniques in the ordinary course of business
and consistent with past practices as opposed to targeted solicitations
of any one or more of the Seller Employees.
(c) In no event will this Section 6.3 apply to any division or
operation within Purchaser except for the Optical Products Division (or
such division, as it may be renamed in the future).
(d) Notwithstanding the provisions of Section 6.3(a) or (b),
Purchaser may offer employment to any Seller Employee who is
involuntarily terminated by Seller or leaves Seller's employment due to
a voluntary separation program.
ARTICLE VII
COVENANTS OF ALL PARTIES
7.1 Further Assurances. Each party hereto agrees to execute and deliver
------------------
such other documents, certificates, agreements and other writings and to take
such other actions as may be reasonably necessary or desirable (including
obtaining Required Seller Approvals and Required Purchaser Approvals not
obtained prior to Closing) in order to secure Purchaser's right, title and
interest in the Purchased Assets. Notwithstanding the foregoing, no party hereto
shall have any obligation to expend any funds or to incur any other obligation
in connection with the consummation of the transactions contemplated hereby
other than normal out-of-pocket expenses (such as fees of counsel, accountants
and auditors and filing fees with Governmental Authorities) reasonably necessary
to consummate such transactions.
7.2 Public Announcements. Neither Purchaser nor Seller shall issue any
--------------------
press release or otherwise make any public statements with respect to the
transactions contemplated by this Agreement and the other Acquisition Documents,
without the prior consent of Purchaser (in the case of Seller) or Seller (in the
case of Purchaser), except as provided in this Section 7.2 or as may be required
by Applicable Law. If any party determines, with the advice of counsel, that it
is required by Applicable Law to make this Agreement, the other Acquisition
Documents or any terms hereof or thereof public, it shall, a reasonable time
before making any public disclosure, consult with the other party regarding such
disclosure and seek confidential treatment for such
33
terms or portions of this Agreement or other Acquisition Documents as may be
reasonably requested by the other party and will only disclose such information
as is legally required to be disclosed. The parties agree that on the date of
this Agreement, Seller shall issue a press release, in a form approved by
Purchaser in advance of issuance, outlining the general nature and terms of this
Agreement. The parties agree that, other than such press release, there shall be
no public announcement of this Agreement or the other Acquisition Documents or
the transactions contemplated hereby or thereby except as may be required by
Applicable Law. The parties agree to announce this Agreement or the other
Acquisition Documents or the transactions contemplated hereby or thereby to
Seller's employees, customers, vendors and strategic partners at such time and
in such form as is mutually agreed upon by Seller and Purchaser.
7.3 Tax Matters.
-----------
(a) Allocation of Taxes. All personal and business property
-------------------
taxes and similar ad valorem obligations levied with respect to the
Purchased Assets for a taxable period that includes (but does not end
on) the Closing Date shall be apportioned between Seller and Purchaser
as of the Closing Date based on the number of days of such taxable
period included in the Pre-Closing Tax Period and the number of days of
such taxable period included in the Post-Closing Tax Period. Seller
shall be liable for the proportionate amount of such Taxes that is
attributable to the Pre-Closing Tax Period, and Purchaser shall be
liable for the proportionate amount of such Taxes that is attributable
to the Post-Closing Tax Period. Within a reasonable period after the
Closing, Seller and Purchaser shall present a statement to the other
setting forth the amount of reimbursement to which each is entitled
under this Section 7.3(a), together with such supporting evidence as is
reasonably necessary to calculate the proration amount. The proration
amount shall be paid by the party owing it to the other within ten (l0)
days after delivery of such statement. Thereafter, Seller shall notify
Purchaser upon receipt of any bill for personal property taxes relating
to the Purchased Assets, part or all of which are attributable to the
Post-Closing Tax Period, and shall promptly deliver such bill to
Purchaser who shall pay the same to the appropriate taxing authority,
provided that if such bill covers any part of the Pre-Closing Tax
Period, Seller shall also remit prior to the due date of assessment to
Purchaser payment for the proportionate amount of such bill that is
attributable to the Pre-Closing Tax Period. In the event that either
Seller or Purchaser shall thereafter make a payment for which it is
entitled to reimbursement under this Section 7.3(a), the other party
shall make such reimbursement promptly, but in no event later than
thirty (30) days after the presentation of a statement setting forth the
amount of reimbursement to which the presenting party is entitled along
with such supporting evidence as is reasonably necessary to calculate
the amount of reimbursement. Any payment required under this Section
7.3(a) and not made within ten (10) days after delivery of the statement
shall bear interest at the rate per annum determined, from time to time,
under the provisions of Section 6621(a)(2) of the Code for each day
until paid.
(b) Cooperation. The parties hereto agree to furnish or cause to
-----------
be furnished to one another, upon request, as promptly as practicable,
such information and assistance relating to the Purchased Assets and the
Business as is reasonably necessary for the filing of Tax Returns
relating to personal or business property taxes, similar ad valorem
taxes, sales and use taxes, employment taxes and any other Taxes that
are the subject of Section 7.3(a) hereof, or for which such information
would form the basis for the calculation of an amount in Purchaser's Tax
Returns, or for which Purchaser has successor liability, and the
prosecution or defense of any claim, suit or
34
proceeding relating to any such Tax Return. The parties hereto shall
cooperate with each other in the conduct of any audit or other
Proceeding with respect to such Taxes and each shall execute and deliver
such powers of attorney and other documents as are necessary to carry
out the intent of this Section 7.3(b).
(c) Responsibility for Payment. Except as provided in Sections
--------------------------
7.3(a) and 7.3(d), Seller shall pay as and when due any and all
Liabilities for Taxes of or relating to the Purchased Assets and the
Business (i) accrued with respect to all taxable periods of Seller
ending on or before the Closing, (ii) accrued with respect to the
Purchased Assets or the Business during all periods up to and including
the Closing whether or not such periods are taxable periods or (iii) are
incurred and become payable as a result of the transactions contemplated
by this Agreement.
(d) Sales and Use Taxes. The sales and use Taxes and any
-------------------
transfer Taxes arising out of the transfer of the Purchased Assets (the
"Sales Tax") shall be determined based on the allocation described in
Section 7.4 and shall be the responsibility of Purchaser. Within five
(5) Business Days after Seller's approval of the allocation described in
Section 7.4, Seller shall provide Purchaser with written notice of the
amount of Sales Tax due and payable, subject to Purchaser's approval,
which approval shall not be unreasonably withheld, and Purchaser shall
pay such amount to Seller within five (5) Business Days after receipt of
such notice
7.4 Allocation of Purchase Price. The Purchase Price shall be allocated
----------------------------
in accordance with Schedule 7.4, which shall be delivered by Purchaser to Seller
within sixty (60) days following the Closing Date. Each of the parties hereto
agrees to report these transactions contemplated hereby for state and federal
Tax purposes in accordance with such allocation of the Purchase Price. Purchaser
shall prepare Schedule 7.4 in accordance with applicable law, subject to
Seller's approval, which approval shall not be unreasonably withheld.
7.5 Confidentiality. The parties understand and agree that this
---------------
Agreement is subject to the terms and conditions of the CNDA. Each party hereto
shall maintain the confidential nature of, and shall not use in any way
detrimental to any other party, including directly or indirectly in the conduct
of such party's business, all confidential financial, technical, marketing,
research, commercial or other information concerning the other parties hereto.
In the event that any party hereto is required by law to disclose the terms of
this Agreement or receives a request to disclose all or any part of any
confidential information under the terms of a subpoena, order, civil
investigative demand or similar process issued by a court of competent
jurisdiction or by another Governmental Authority, such party agrees to: (i)
immediately notify the party to whom such confidential information relates of
the existence, terms and circumstances surrounding such request, (ii) consult
with such party to whom the information relates on the advisability of taking
legally available steps to resist or narrow such request and (iii) if disclosure
of such information is required, furnish only that portion of the confidential
information that, in the opinion of counsel to the party who has received the
request, such party is legally compelled to disclose and advise the party to
whom such confidential information relates as far in advance of such disclosure
as possible so that such party to whom the confidential information relates may
seek an appropriate protective order or other reliable assurance that
confidential treatment will be accorded such confidential information. In any
event, the party who receives the request shall not oppose actions by the party
to whom the confidential information relates to obtain an appropriate protective
order or other reliable assurance that confidential treatment will be accorded
such confidential information.
35
ARTICLE VIII
CONDITIONS TO CLOSING
8.1 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) Performance by Seller. (i) Seller shall have performed and
---------------------
satisfied each of its 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 Seller contained herein or in any of
the other Acquisition Documents and in any Schedules or Exhibits hereto
shall be true and correct and contain no misstatement or omission that
would make any such representation or warranty misleading and (iii)
Purchaser shall have received a certificate signed by a duly authorized
executive officer of Seller to the foregoing effect and to the effect
that the conditions specified within this Section 8.1(a) have been
satisfied.
(b) Required Approvals. Seller shall have obtained and delivered
------------------
to Purchaser all Required Seller Approvals and Purchaser shall have
obtained all Required Purchaser Approvals without the imposition of any
conditions that are or would become applicable to any of the Purchased
Assets, the Business or Purchaser (or any Affiliate or Associate of
Purchaser) after the Closing that would be materially burdensome on any
such Purchased Assets, the Business or on Purchaser (or any Affiliate or
Associate of Purchaser) or its businesses substantially as such
businesses have been conducted prior to the Closing Date or as such
businesses would be reasonably expected to be conducted after the
Closing Date. All Required Seller Approvals and Required Purchaser
Approvals shall be in effect as of the Closing Date.
(c) No Violation. The transactions contemplated by this
------------
Agreement and the other Acquisition Documents and the consummation of
the Closing shall not violate any Applicable Law. No temporary
restraining order, preliminary or permanent injunction, cease and desist
order or other order issued by any court or other Governmental Authority
or any other legal restraint or prohibition preventing the transfers
contemplated hereby or the consummation of the Closing, or imposing
Damages in respect thereto, shall be in effect as of the Closing Date,
and there shall be no pending or threatened actions or Proceedings by
any Governmental Authority (or determinations by any Governmental
Authority) or by any other Person having jurisdiction with respect to
such matter challenging or in any manner seeking to restrict or prohibit
the transfer and exchange contemplated hereby or the consummation of the
Closing, or to impose conditions that would be materially burdensome on
the Purchased Assets, the Business or the Assumed Liabilities or on
Purchaser (or any Affiliate or Associate of Purchaser) or their
respective businesses substantially as such businesses have been
conducted prior to the Closing Date or as said businesses, as of the
date hereof, would be reasonably expected to be conducted after the
Closing Date. Unless waived by Purchaser, Seller shall have complied
with all applicable "bulk sales" laws in respect of the transactions
contemplated by this Agreement.
(d) Acceptance of Employment with Purchaser by Designated
-----------------------------------------------------
Employees of Seller. No Transferred Employee shall have indicated any
-------------------
intent to withdraw his or her acceptance of his or her offer of
employment with Purchaser.
36
(e) Acquisition Documents. Seller shall have executed and
---------------------
delivered to Purchaser all Acquisition Documents to which Seller is a
party.
(f) Opinion of Counsel. Purchaser shall have received an opinion
------------------
of counsel from Wilson Sonsini Goodrich & Rosati P.C., counsel to
Seller, dated the Closing Date, in substantially the form attached
hereto as Exhibit A.
(g) Release of Liens. Seller shall have obtained the release of
----------------
all Liens on the Purchased Assets and shall have delivered to Purchaser
all termination statements or other documentation evidencing such
releases.
(h) Secretary's Certificate. Seller shall have delivered to
-----------------------
Purchaser a certificate of its Secretary or Assistant Secretary
certifying (a) attached copies of the Certificate of Incorporation and
Bylaws of Seller, (b) attached copies of the resolutions of the board of
directors of Seller relating to this Agreement, the Acquisition
Documents and the transactions contemplated hereby and thereby, and (c)
the signatures and titles of the officers of Seller who have executed
this Agreement and each Exhibit, Schedule and other document delivered
at or prior to the Closing.
8.2 Conditions to Obligations of Seller. The obligations of Seller to
-----------------------------------
consummate the Closing are subject to the satisfaction or waiver of each of the
following conditions:
(a) Performance by Purchaser. (A) Purchaser shall have performed
------------------------
and satisfied its obligations hereunder required to be performed and
satisfied by it on or prior to the Closing Date, (B) each of the
representations and warranties of Purchaser contained herein or in any
of the other Acquisition Documents and in any Schedules or Exhibits
hereto or thereto shall be true and correct and contain no misstatement
or omission that would make any such representation or warranty
misleading and (C) Seller shall have received a certificate signed by a
duly authorized executive officer of Purchaser to the foregoing effect
and to the effect that the conditions specified within this Section
8.2(a) have been satisfied.
(b) No Violation. The transactions contemplated by this
------------
Agreement and the other Acquisition Documents and the consummation of
the Closing shall not violate any Applicable Law. No temporary
restraining order, preliminary or permanent injunction, cease and desist
order or other order issued by any court or other Governmental Authority
or any other legal restraint or prohibition preventing the transfer and
exchange contemplated hereby or the consummation of the Closing, or
imposing Damages in respect thereto, shall be in effect as of the
Closing Date, and there shall be no pending or threatened actions or
Proceedings by any Governmental Authority (or determinations by any
Governmental Authority) or by any other Person challenging or in any
manner seeking to materially restrict, prohibit or condition the
transfer and exchange contemplated hereby or the consummation of the
Closing, or to impose conditions that would be materially burdensome on
Seller (or any Affiliate or Associate of Seller) or their respective
businesses substantially as such businesses have been conducted prior to
the Closing Date or as said businesses, as of the date hereof, would
reasonably be expected to be conducted after the Closing Date.
(c) Acquisition Documents. Purchaser shall have executed and
---------------------
delivered to Seller all Acquisition Documents to which Purchaser is a
party.
37
ARTICLE IX
INDEMNIFICATION
9.1 Agreement to Indemnify.
----------------------
(a) Purchaser Indemnitees. Purchaser and its Affiliates and
---------------------
Associates and each representative and agent of all of the foregoing
(collectively, the "Purchaser Indemnitees"), shall each be indemnified
and held harmless to the extent set forth in this Article IX by Seller
with respect to any and all Damages incurred by any Purchaser Indemnitee
resulting from, arising out of or relating to: (1) an inaccuracy or
misrepresentation in any of the representations, warranties, covenants
and agreements in this Agreement or any other Acquisition Document by
Seller, (2) any breach of any covenant or agreement made in this
Agreement or any other Acquisition Document by Seller (including any
Exhibits and Schedules hereto and thereto); (3) the conduct of the
Business or the operation, use or other exploitation of the Purchased
Assets prior to the Closing; and (4) any Excluded Asset or Excluded
Liability.
(b) Seller Indemnitees. Seller and its Affiliates and
------------------
Associates, and each representative and agent of all of the foregoing
(collectively, the "Seller Indemnitees"), shall each be indemnified and
held harmless to the extent set forth in this Article IX by Purchaser,
in respect of any and all Damages incurred by Seller Indemnitee
resulting from, arising out of or relating to: (1) any inaccuracy or
misrepresentation in the representations, warranties, covenants and
agreements made in this Agreement or in any other Acquisition Document
by Purchaser; (2) any breach of any covenant or agreement made in this
Agreement or any other Acquisition Document (including any Exhibits and
Schedules hereto and thereto) by Purchaser; (3) the operation, use or
other exploitation of the Purchased Assets after the Closing; and (4)
any Assumed Liability.
(c) Equitable Relief. Nothing set forth in this Article IX shall
----------------
be deemed to prohibit or limit any Purchaser Indemnitee's or Seller
Indemnitee's right at any time on or after the Closing Date, to seek
injunctive or other equitable relief for the failure of any Indemnifying
Party to perform or comply with any covenant or agreement contained
herein.
(d) Notwithstanding anything to the contrary herein, (i)
Purchaser shall not be entitled to indemnification under Section
9.1(a)(4) to the extent its Damages relate to Purchaser's exercise of
the licenses granted to Purchaser by Seller in the License Agreement and
(ii) Seller shall not be entitled to indemnification under Section
9.1(b)(3) or 9.1(b)(4) to the extent its Damages relate to Seller's
exercise of the licenses granted to Seller by Purchaser in the License
Agreement.
9.2 Survival; Limits on Indemnification.
-----------------------------------
(a) The parties agree that, regardless of any investigation made
by the parties, the representations, warranties, covenants and
agreements of the parties contained in this Agreement shall survive the
execution and delivery of this Agreement for a period beginning on the
date hereof and ending at 5:00 p.m., California time, on the date that
is eighteen (18) months after the Closing Date; provided, however, that
-------- -------
(x) Seller's representations and warranties relating to Tax matters and
title to the Purchased Assets shall survive until the expiration of the
applicable statutes of limitations with respect thereto, (y) Seller's
representation and warranty set forth in
38
Section 3.25 (the "Photonetics Warranty") shall survive until the
earliest of (i) the sixth anniversary of the Closing Date, (ii) such
time as the patent is held invalid or unenforceable or (iii) Seller
obtains and extends to Purchaser a fully paid-up license and release and
(z) the matters set forth in Sections 9.1(a)(4) and 9.1(b)(3) and (4)
shall survive indefinitely.
(b) Notwithstanding anything herein to the contrary, Seller
shall not be obligated to indemnify the Purchaser Indemnitees and
Purchaser shall not be obligated to indemnify the Seller Indemnitees
unless in each case the aggregate of all Purchaser's Damages or Seller's
Damages, respectively, exceeds $500,000 (the "Indemnification
Threshold"), in which case the Purchaser Indemnitees or the Seller
Indemnitees, as the case may be, shall be entitled to recover all of
their Damages, including the amount equal to the Indemnification
Threshold; provided, however, that the maximum aggregate Liability of
-------- -------
either Seller and Purchaser hereunder shall not exceed $5,000,000 (the
"Indemnification Cap"); provided, further, that (x) indemnification by
-------- -------
Seller for Damages related to Excluded Assets or Excluded Liabilities or
claims related to fraud and (y) indemnification by Purchaser for Damages
related to (1) Assumed Liabilities, (2) the operation, use or other
exploitation of the Purchased Assets after the Closing or (3) claims
related to fraud shall not be subject to the Indemnification Threshold
or the Indemnification Cap; and provided, further, that all claims for
-------- -------
Damages resulting from, arising out of or relating to a breach by Seller
of Photonetics Warranty shall not be subject to the Indemnification Cap,
but shall be subject to the limitations set forth in Section 9.6.
Notwithstanding anything to the contrary herein, for the purposes only
of the following claims (collectively, the "Uncapped Claims"), the
definition of "Damages" shall exclude consequential damages: (x) claims
against Seller for Damages related to Excluded Assets or Excluded
Liabilities or claims related to fraud; and (y) claims against Purchaser
for Damages related to (1) Assumed Liabilities, (2) the operation, use
or other exploitation of the Purchased Assets after the Closing or (3)
claims related to fraud. In addition, for the purposes only of the
Uncapped Claims, once the Purchaser Indemnitees or the Seller
Indemnitees, as the case may be, have been indemnified for Damages in an
amount equal to the Indemnification Cap, the definition of "Damages"
with respect to Uncapped Claims against Seller or Purchaser, as the case
may be, in excess of the Indemnification Cap shall not include interest
on cash disbursements.
9.3. Escrow. To provide a fund against which a Purchaser Indemnitee may
------
assert claims of indemnification under this Article IX, the Escrow Amount shall
be withheld and deposited into escrow pursuant to the Escrow Agreement in
accordance with Section 2.6. The Escrow Amount and interest and other earnings
payable thereon, shall be held and distributed in accordance with the Escrow
Agreement.
9.4 Claims for Indemnification. If any Indemnitee wishes to make a
--------------------------
claim for indemnification pursuant to this Article IX in respect of any Damages,
such Indemnitee shall give the appropriate Indemnifying Party prompt written
notice thereof. Any such notice shall set forth in reasonable detail and to the
extent then known the basis for such claim for indemnification. The failure of
such Indemnitee to give notice of any claim for indemnification promptly, but
within the periods specified by Section 9.2(a), shall not adversely affect such
Indemnitee's right to indemnity hereunder except to the extent that such failure
adversely affects the right of the Indemnifying Party to assert any reasonable
defense to such claim. Each such claim for indemnity shall expressly state that
the Indemnifying Party shall have only the twenty (20) Business Day period
referred to in the next sentence to dispute or deny such claim. The Indemnifying
Party shall have
39
twenty (20) Business Days following its receipt of such notice either to (a)
acquiesce in such claim by giving such Indemnitee written notice of such
acquiescence or (b) object to the claim by giving such Indemnitee written notice
of the objection. If the Indemnifying Party does not object thereto within such
twenty (20) Business Day period, such Indemnitee shall, subject to the
provisions of this Article IX, be entitled to be indemnified for all Damages
reasonably and proximately incurred by such Indemnitee in respect of such claim,
subject to the limitations set forth in Sections 9.1, 9.2 and 9.6. If the
Indemnifying Party objects to such claim in a timely manner, and such Indemnitee
and the Indemnifying Party are unable to resolve their dispute within ten (10)
Business Days following delivery of such objection (or such additional period of
time as may be mutually agreed to by such Persons), the claim shall be submitted
immediately to dispute resolution pursuant to Section 10.11.
9.5 Defense of Claims. In connection with any claim that may give rise
-----------------
to indemnity under this Article IX resulting from or arising out of any claim or
Proceeding against an Indemnitee by a Person that is not a party hereto, the
Indemnifying Party may but shall not be obligated to (unless such Indemnitee
elects not to seek indemnity hereunder for such claim), upon written notice to
the relevant Indemnitee, assume the defense of any such claim or Proceeding if
the Indemnifying Party with respect to such claim or Proceeding jointly
acknowledge to the Indemnitee the Indemnitee's right to indemnity pursuant
hereto to the extent provided herein (as such claim may have been modified
through written agreement of the parties or arbitration hereunder) and provide
assurances, satisfactory to such Indemnitee, that the Indemnifying Party will be
financially able to satisfy such claim to the extent provided herein if such
claim or Proceeding is decided adversely. If the Indemnifying Party assumes the
defense of any such claim or Proceeding, the Indemnifying Party shall select
counsel reasonably acceptable to such Indemnitee to conduct the defense of such
claim or Proceeding, shall take all steps necessary in the defense or settlement
thereof and shall at all times diligently and promptly pursue the resolution
thereof. If the Indemnifying Party shall have assumed the defense of any claim
or Proceeding in accordance with this Section 9.5, the Indemnifying Party shall
be authorized to consent to a settlement of, or the entry of any judgment
arising from, any such claim or Proceeding, without the prior written consent of
such Indemnitee; provided, however, that the Indemnifying Party shall, subject
-------- -------
to the provisions of Section 9.1, pay or cause to be paid all amounts arising
out of such settlement or judgment concurrently with the effectiveness thereof;
provided further, that the Indemnifying Party shall not be authorized to
- -------- -------
encumber any of the assets of any Indemnitee or to agree to any restriction that
would apply to any Indemnitee or to its conduct of business; and provided
--------
further, that a condition to any such settlement shall be a complete release of
- -------
such Indemnitee and its Affiliates, directors, officers, employees and agents
with respect to such claim, including any reasonably foreseeable collateral
consequences thereof. Such Indemnitee shall be entitled to participate in (but
not control) the defense of any such action, with its own counsel and at its own
expense. Each Indemnitee shall, and shall cause each of its Affiliates,
directors, officers, employees and agents to, cooperate fully with the
Indemnifying Party in the defense of any claim or Proceeding being defended by
the Indemnifying Party pursuant to this Section 9.5. If the Indemnifying Party
does not assume the defense of any claim or Proceeding resulting therefrom in
accordance with the terms of this Section 9.5, such Indemnitee may defend
against such claim or Proceeding in such manner as it may deem appropriate,
including settling such claim or Proceeding after giving notice of the same to
the Indemnifying Party, on such terms as such Indemnitee may deem appropriate.
If any Indemnifying Party seeks to question the manner in which such Indemnitee
defended such claim or Proceeding or the amount of or nature of any such
settlement,
40
such Indemnifying Party shall have the burden to prove by a preponderance of the
evidence that such Indemnitee did not defend such claim or Proceeding in a
reasonably prudent manner. Notwithstanding the above, if a claim or Proceeding
involves injunctive relief affecting the business operations of Purchaser or
relates to the Intellectual Property Rights included in the Purchased Assets,
Purchaser shall have the right to control the defense of the claim or
Proceeding, and the reasonable fees and expenses of counsel to Purchaser and
other reasonable out-of-pocket expenses of Purchaser shall be "Damages" for
purposes of a this Article IX, to the extent such claim or Proceeding is
ultimately determined to be an indemnifiable claim.
9.6 Photonetics Warranty. The maximum aggregate Liability of Seller
--------------------
hereunder for Damages resulting from, arising out of or relating to a breach by
Seller of the Photonetics Warranty shall not exceed $7,000,000 less any amount
actually paid to Purchaser from the Escrow Amount. In the event that Damages
arising from claims related to the patent described in the Photonetics Warranty
are attributable in part to products, or accused elements thereof, whose
manufacture, use or sale do not include or embody any portion of the Purchased
Assets, such Damages shall be reduced by the relative contribution of those
other products or accused elements thereof. In the event that Damages related to
such breach are attributable in part to features or elements included or
embodied in the Purchased Assets, but where such features or elements were
present in Intel products before the Closing Date, such Damages shall be reduced
by the relative contribution of those Intel features or elements.
ARTICLE X
MISCELLANEOUS
10.1 Notices. All notices and other communications pursuant to this
-------
Agreement shall be in writing and shall be deemed given if delivered personally,
faxed, sent by nationally-recognized overnight courier or mailed by registered
or certified mail (return receipt requested), postage prepaid, to the parties at
the addresses set forth below or to such other address as the party to whom
notice is to be given may have furnished to the other parties hereto in writing
in accordance herewith. Any such notice or communication shall be deemed to have
been delivered and received (A) in the case of personal delivery, on the date of
such delivery, (B) in the case of fax, on the date sent if confirmation of
receipt is received and such notice is also promptly mailed by registered or
certified mail (return receipt requested), (C) in the case of a
nationally-recognized overnight courier in circumstances under which such
courier guarantees next Business Day delivery, on the next Business Day after
the date when sent and (D) in the case of mailing, on the third Business Day
following that on which the piece of mail containing such communication is
posted:
if to Purchaser, to:
Intel Corporation
2200 Mission College Boulevard
Santa Clara, California 95052
Fax: (408) 765-7056
Attention: General Counsel
41
and
Intel Corporation
2200 Mission College Boulevard
Santa Clara, California 95052
Fax: (408) 653-4978
Attention: Treasurer
with a copy to:
Gibson, Dunn & Crutcher LLP
One Montgomery Street
San Francisco, California 94104
Attention: Peter Heilmann, Esq.
Telephone: (415) 393-8200
Fax: (415) 393-8306
if to Seller, to:
New Focus, Inc.
5125 Hellyer Avenue, Suite 100
San Jose, California 95138
Fax: (408) 284-4822
Attention: William L. Potts, Jr.
Chief Financial Officer
with a copy to:
Wilson Sonsini Goodrich & Rosati P.C.
650 Page Mill Road
Palo Alto, California 94304
Attention: Alisande M. Rozynko, Esq.
Telephone: (650) 493-9300
Fax: (650) 493-6811
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. Any
party hereto may give any notice, request, demand, claim or other communication
hereunder using any other means (including ordinary mail or electronic mail),
but no such notice, request, demand, claim or other communication shall be
deemed to have been duly given unless and until it actually is received by the
individual for whom it is intended.
10.2 Amendments; Waivers; Cumulative Remedies.
----------------------------------------
(a) Any provision of this Agreement may be amended or waived if,
and only if, such amendment or waiver is in writing and signed, in the
case of an amendment, by all parties hereto, or in the case of a waiver,
by the party against whom the waiver is to be effective.
42
(b) No waiver by a party of any default, misrepresentation or
breach of a warranty or covenant hereunder, whether intentional or not,
shall be deemed to extend to any prior or subsequent default,
misrepresentation or breach of a warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or
subsequent occurrence. No failure or delay by a party hereto in
exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided under Applicable Law.
10.3 Expenses. All costs and expenses incurred in connection with this
--------
Agreement and the other Acquisition Documents and in closing and carrying out
the transactions contemplated hereby and thereby shall be paid by the party
incurring such cost or expense.
10.4 Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the parties hereto and their respective successors,
heirs, personal representatives and permitted assigns. No party hereto may
assign either this Agreement or any of its rights, interests or obligations
hereunder without the prior written approval of each other party, which approval
shall not be unreasonably withheld, except that Purchaser may assign this
Agreement to any of its wholly-owned Subsidiaries without consent of Seller. No
such assignment shall relieve the assigning party of its obligations hereunder
if such assignee does not perform such obligations.
10.5 Governing Law. This Agreement shall be construed in accordance with
-------------
and governed by the internal laws (without reference to choice or conflict of
laws) of the State of Delaware.
10.6 Counterparts; Effectiveness. This Agreement may be signed in any
---------------------------
number of counterparts and the signatures delivered by facsimile, each of which
shall be an original, with the same effect as if the signatures were upon the
same instrument and delivered in person. This Agreement shall become effective
when each party hereto shall have received a counterpart hereof signed by the
other parties hereto.
10.7 Entire Agreement. This Agreement (including the Schedules and
----------------
Exhibits referred to herein, which are hereby incorporated by reference), the
other Acquisition Documents and the CNDA constitute the entire agreement between
and among the parties with respect to the subject matter hereof and thereof and
supersede all prior agreements, understandings and negotiations, both written
and oral, between and among the parties with respect to the subject matter of
this Agreement. Neither this Agreement nor any provision hereof is intended to
confer upon any Person other than the parties hereto any rights or remedies
hereunder.
10.8 Captions. The captions herein are included for convenience of
--------
reference only and shall be ignored in the construction or interpretation
hereof. All references to an Article, Section, Exhibit or Schedule are
references to an Article, Section, Exhibit or Schedule of this Agreement, unless
otherwise specified, and include all subparts thereof.
10.9 Severability. If any provision of this Agreement, or the
------------
application thereof to any Person, place or circumstance, shall be held by a
court of competent jurisdiction to be invalid,
43
unenforceable or void, the remainder of this Agreement and such provisions as
applied to other Persons, places and circumstances shall remain in full force
and effect only if, after excluding the portion deemed to be unenforceable, the
remaining terms shall provide for the consummation of the transactions
contemplated hereby in substantially the same manner as originally set forth at
the later of the date this Agreement was executed or last amended.
10.10 Construction. The parties hereto intend that each representation,
------------
warranty, and covenant contained herein shall have independent significance. If
any party has breached any representation, warranty or covenant contained herein
in any respect, the fact that there exists another representation, warranty or
covenant relating to the same subject matter (regardless of the relative levels
of specificity) that the party has not breached shall not detract from or
mitigate the fact that the party is in breach of the first representation,
warranty or covenant.
10.11 Dispute Resolution.
------------------
(a) All disputes arising directly under the express terms of
this Agreement shall be resolved as follows: The senior management of
all parties to the dispute shall meet to attempt to resolve such
disputes. If the disputes cannot be resolved by such senior management,
either party may make a written demand for formal dispute resolution and
specify therein the scope of the dispute. Within thirty (30) days after
such written notification, the parties agree to meet for one (1) day
with an impartial mediator and consider dispute resolution alternatives
other than litigation. If an alternative method of dispute resolution is
not agreed upon within thirty (30) days after the one (1) day mediation,
either party may begin litigation Proceedings.
(b) Notwithstanding the provisions of Section 10.11(a) above,
each party shall have the right, without the requirement of first
seeking a remedy through mediation or arbitration, to seek preliminary
injunctive or other equitable relief in any proper court in the event
that such party determines that eventual redress through mediation or
arbitration will not provide a sufficient remedy for any violation of
this Agreement by any other party.
(c) In the event a Proceeding is brought to enforce or interpret
any provision of this Agreement, the prevailing party shall be entitled
to recover reasonable attorney's fees and costs in an amount to be fixed
by the court or arbitrator, as applicable.
10.12 Submission to Jurisdiction; Waiver of Jury Trial.
------------------------------------------------
(a) The parties hereby irrevocably submit to the jurisdiction of
the courts of the State of Delaware and the Federal courts of the United
States of America located in the State of Delaware solely in respect of
the interpretation and enforcement of the provisions of this Agreement
and of the documents referred to in this Agreement, and in respect of
the transactions contemplated hereby, and hereby waive, and agree not to
assert, as a defense in any Proceeding for the interpretation or
enforcement hereof or of any such document, that it is not subject
thereto or that such Proceeding may not be brought or is not
maintainable in said courts or that the venue thereof may not be
appropriate or that this Agreement or any such document may not be
enforced in or by such courts, and the parties hereto irrevocably agree
that all claims with respect to such Proceeding shall be heard and
determined in such a Delaware State or Federal court. The parties hereby
consent to and grant any such court jurisdiction over the person of such
parties and over the
44
subject matter of such dispute and agree that mailing of process or
other papers in connection with any such action or proceeding in the
manner provided in this Section 10.12 or in such other manner as may be
permitted by Applicable Law, shall be valid and sufficient service
thereof.
(b) The parties agree that irreparable damage would occur and
that the parties would not have any adequate remedy at law in the event
that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction
or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any Federal
court located in the State of Delaware or in Delaware state court, this
being in addition to any other remedy to which they are entitled at law
or in equity.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED
AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii)
EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.12.
10.13 Meaning of Include and Including. Whenever in this Agreement the
--------------------------------
word "include" or "including" is used, it shall be deemed to 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.
10.14 Third Party Beneficiaries. Other than Indemnitees under Article IX
-------------------------
who are not parties to this Agreement, no provision of this Agreement shall
create any third party beneficiary rights in any Person, including any employee
or former employee of Seller or any Affiliate or Associate thereof (including
any beneficiary or dependent thereof).
THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
45
IN WITNESS WHEREOF, the parties hereto here caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
PURCHASER:
INTEL CORPORATION,
a Delaware corporation
By: /s/ ARVIND SODHANI
-----------------------------------
Name: Arvind Sodhani
Title: Vice President and Treasurer
SELLER:
NEW FOCUS, INC.
a Delaware corporation
By: /s/ WILLIAM L. POTTS, JR.
-----------------------------------
Name: William L. Potts, Jr.
Title: Chief Financial Officer
[Signature Page to Intel/New Focus Asset Purchase Agreement]
46
EXHIBITS
--------
Exhibit A Form of Opinion Delivered by Counsel to Seller
SCHEDULES
---------
Schedule 1.1(a) Designated Employees
Schedule 2.1(a) Tangible Personal Property
Schedule 2.1(b) Intellectual Property Rights
Schedule 2.1(c) Inventory
Schedule 2.1(d) Design Tools
Schedule 2.1(f) Assumed Contracts
Schedule 2.1(g) Permits
Schedule 2.1(h) Prepaids
Schedule 2.2(a) Excluded Tangible Personal Property
Schedule 2.2(f) Excluded Patents
Schedule 2.2(i) Excluded Licensed Software
Schedule 3.3 Required Seller Approvals
Schedule 3.4 Non-Contravention Exceptions
Schedule 3.5 Liabilities of Seller
Schedule 3.6 Absence of Certain Changes
Schedule 3.7(a) Owned Tangible Personal Property
Schedule 3.7(b) Personal Property Leases
Schedule 3.7(c) Tangible Personal Property Exceptions
Schedule 3.7(d) Hazardous Materials
Schedule 3.8 Litigation
Schedule 3.9(a) Material Contracts
Schedule 3.9(c) Material Suppliers
Schedule 3.10 Permits
Schedule 3.12(a) Employees
Schedule 3.12(b) Benefit Arrangements and Employee Benefit Plans
Schedule 3.13 Labor and Employment Matters
Schedule 3.14(b) Marks
Schedule 3.14(c)(i) Patents
Schedule 3.14(c)(ii) Patents Exceptions
Schedule 3.14(d) Copyrights/Maskworks
Schedule 3.14(e) Trade Secrets
Schedule 3.14(f) Software
Schedule 3.14(g) Documentation
Schedule 3.14(j) Ownership
Schedule 3.14(k) Infringement
Schedule 3.14(l) Employee Confidentiality
Schedule 3.16 Tax Matters
Schedule 3.17 Sufficiency of Purchased Assets
Schedule 3.18 Supplier and Foundry Relationships
Schedule 3.19 Customers
Schedule 7.4 Allocation of Purchase Price
47