Exhibit 99.2
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ASSET PURCHASE AGREEMENT
between:
Zentrum Mikroelektronik Dresden AG
a stock corporation organized under the laws of Germany
and
Simtek Corporation
a Colorado corporation
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Dated as of December 7, 2005
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ASSET PURCHASE AGREEMENT
This Asset
Purchase Agreement (this "Agreement") is entered into as of
December 7, 2005 (the "Execution Date"), by
and between: Zentrum Mikroelektronik
Dresden AG, a stock corporation organized
under the laws of Germany ("Seller"),
and Simtek Corporation, a Colorado
corporation (the "Buyer"). Certain
capitalized terms used in this Agreement
are defined in Exhibit A.
Recitals
Seller desires
to sell to Buyer, and Buyer desires to purchase from Seller,
the Assets of Seller for the consideration
and on the terms set forth in this
Agreement.
Agreement
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The parties to
this Agreement, intending to be legally bound, agree as
follows:
Article I
SALE OF ASSETS; RELATED TRANSACTIONS
1.01
Sale of Assets.
(a) Assets. Upon the terms and subject to the conditions set forth
in
this Agreement, the Seller shall cause to
be sold, assigned, transferred,
conveyed and delivered to Buyer, at the
Closing, and Buyer shall purchase and
acquire from Seller, free and clear of any
Encumbrances, all of Seller's right,
title and interest in and to the following
specific assets (the "Assets") used
in connection with or related to the nvSRAM
product line of the Seller (the
"nvSRAM Product Line"):
(i) the Assigned Intellectual Property Assets;
(ii) all of the intangible rights and property of the Seller
with
respect to the nvSRAM Product Line;
(iii) all data, Records and test programs (completed or in
development) related to the nvSRAM Product Line, including
detailed
process technology; product design know how; product design
information and specifications, customer lists, Records and
sales
information; referral sources; research and development reports
and
Records; production reports and Records (including historical
yield
information); service and warranty Records (including customer
return
history); assembly flows/documentation, test programs related to
the
outsourcing of wafer and/or package testing; studies; reports;
design
specifications and data sheets, other specifications;
schematics,
bonding diagrams, other diagrams; layouts, simulations, design
review
checklists, bug and enhancement reports, wafer maps, Verilog
Model,
IBIS Model, CAD Tool List, design database, design database
format,
correspondence and other similar documents (collectively, the
"Data
Materials");
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(iv)
all creative, advertising and promotional materials
including marketing collateral (application notes, data sheets,
white
sheets, etc.) possessed or owned by the Seller with respect to
the
nvSRAM Product Line;
(v) all inventory of finished nvSRAM products, which includes
all
inventory located in Seller's storage facilities designated
"Storage
1" and "Storage 2" (the "Inventory"); and
(vi) all rights of the Seller under the Seller Contracts listed
on Part 2.08 of the Disclosure Schedule, as such schedule shall
be
updated at Closing (the "Assumed Contracts").
Notwithstanding the foregoing, the transfer of the Assets pursuant
to
this Agreement shall not include the
assumption of any Liability related to the
Assets unless Buyer expressly assumes that
Liability pursuant to Section
1.02(b).
(b) Excluded Assets. Notwithstanding anything to the contrary
contained
in this Section 1.01 or elsewhere in this
Agreement, all assets, properties,
rights, title and interests of Seller in
all assets not specifically included in
the Assets are not part of the sale and
purchase contemplated hereunder, are
excluded from the Assets, and shall remain
the property of the Seller after the
Closing. The parties agree that the SRAM
product line and business will remain
with Seller.
1.02
Consideration.
(a) The consideration for the Assets (the "Purchase Price") will
be
US$10,000,000. It is understood that the
Purchase Price shall be net. VAT shall
be added to the Purchase Price pursuant to
the provision of (iii) below. In
accordance with Section 1.06, at the
Closing, the Purchase Price shall be
delivered by Buyer as follows:
(i) by payment to Seller of US$8,000,000 of immediately
available
funds;
(ii) by issuance to Seller of 6,260,713 shares of common stock
of
Buyer (the "Common Stock") valued at US$2,000,000, plus or minus
any
Adjustment Amount, based on the volume weighted average price
of
Common Stock for the 60 trading days prior to the Execution Date,
of
which 4,695,534 shares of Common Stock (valued at US$1,500,000,
plus
or minus any Adjustment Amount, based on the volume weighted
average
price of Common Stock for the 60 trading days prior to the
Execution
Date) shall be delivered to Seller at Closing and 1,565,179 shares
of
Common Stock (valued at US$500,000 based on the volume weighted
average price of Common Stock for the 60 trading days prior to
the
Execution Date) shall be delivered to the Escrow Agent and held
and
distributed by the Escrow Agent in accordance with and pursuant to
the
Escrow Agreement in the form attached hereto as Exhibit
1.02(a)(ii)
subject to any changes reasonably requested by the Escrow Agent
(the
"Escrow Agreement"); and
(iii) VAT equal to 16 % of the partial purchase price for the
Inventory shall be added to the Purchase Price. Such VAT is
calculated
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on the basis of a portion of the Purchase Price being subject to
VAT
which is allocated as consideration for the purchase of the
Inventory.
This obligation of Buyer to pay VAT to Seller is fulfilled by
assignment of the VAT Claim to Seller pursuant to Section 1.04
below.
(b) Assumed Liabilities. Buyer assumes no Liabilities of
Seller;
provided, however, that as of Closing,
Buyer shall assume only Liabilities of
Seller under the Assumed Contracts, other
than Liabilities arising from or
relating to breaches, defaults or
violations thereof or thereunder (including
any product defects) prior to the Closing
Date (the "Assumed Liabilities").
(c) Retained Liabilities. Every Liability of the Seller other than
the
Assumed Liabilities shall remain the sole
responsibility of and shall be
retained, paid, performed and discharged
solely by Seller.
1.03 Adjustment
to Purchase Price.
(a) Adjustment Amount and Payment. Subject to Section 1.03(b),
the
"Adjustment Amount" shall be equal to the
following, based on calculations from
the totals appearing at the end of the
respective accountings:
(i) zero (if the Projected Inventory Accounting provided in
Part
1.03(a)(i) of the Disclosure Schedule (A) is the same as the
Closing
Date Inventory Accounting provided pursuant to Section 1.06(a)(v),
or
(B) exceeds or is less than the Closing Date Inventory Accounting
by
5% or less of the Projected Inventory Accounting); or
(ii) the difference between the Closing Date Inventory
Accounting
and the Projected Inventory Accounting (if the Projected
Inventory
Accounting exceeds, or is less than, the Closing Date Inventory
Accounting by more than 5% of the Projected Inventory Accounting).
The
Adjustment Amount shall be paid by reducing (if the Projected
Inventory Accounting exceeds the Closing Date Inventory Accounting)
or
increasing (if the Closing Date Inventory Accounting exceeds
the
Projected Inventory Accounting), on a dollar-for-dollar basis
the
US$1,500,000 payable in shares of Common Stock delivered to the
Seller
at Closing by the amount that the difference exceeds 5% of the
Projected Inventory Accounting.
(b) Adjustment Procedure. The parties shall work together in good
faith
jointly to determine the Closing Date
Inventory Accounting (including the
counting and verification of the inventory
comprising the same and the
calculation of the Closing Date Inventory
Accounting). The parties shall use
their commercially reasonable and good
faith efforts to set forth the Closing
Date Inventory Accounting in writing (which
writing shall be duly executed by
each of the parties and delivered
immediately prior to Closing). If the parties
cannot agree on the Closing Date Inventory
Accounting or the Adjustment Amount
to which either party is entitled, then no
adjustment shall be made pursuant to
Section 1.03(a) and the parties shall
resolve such dispute in accordance with
Section 11.08(b).
(c) Manufacturing Adjustment. If the Closing Date occurs after
December
31, 2005, ZMD shall receive additional lead
time, consistent with their
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historical manufacturing periods, to fill
inventory levels that are below the
Projected Inventory Accounting.
1.04 Transfer
Taxes. Buyer shall bear and pay, and shall reimburse Seller
and Seller's Affiliates for, any transfer,
sales, value-added and similar taxes,
customs, charges, fees or expenses that are
payable in connection with the sale
of the Assets to Buyer.
Buyer shall
assign and herewith assigns its input VAT reimbursement claim
("Vorsteuererstattungsanspruch oder
Vorsteuervergutungsanspruch") against the
German tax authorities in context with the
delivery of the Inventory to Buyer
and which is calculated in accordance with
Section 1.01(a)(iii) (the "VAT
Claim") to Seller in the form legally
necessary (the "VAT Assignment"). Seller
herewith accepts the obligation to assign
and the assignment of the VAT Claim.
Buyer and Seller agree that the Buyer's
obligation to pay VAT to the Seller
pursuant to Section 1.02(a)(ii) shall be
fulfilled by the assignment of the VAT
Claim. Seller and Buyer are obliged to
execute any and all actions and to make
any and all declarations for a valid
assignment of the respective VAT Claim to
Seller.
1.05 Closing.
The closing of the sale of the Assets to Buyer (the
"Closing") shall take place at the offices
of Holme Roberts & Owen LLP, 1700
Lincoln Street, Suite 4100, Denver,
Colorado, at 10:00 a.m. on December 23, 2005
or such other date, time and location as
Buyer and Seller may mutually agree to
(the "Closing Date").
1.06 Closing
Obligations. In addition to any other documents to be
delivered under other provisions of this
Agreement, at the Closing:
(a) Seller's Deliveries. Seller shall deliver, or cause to be
delivered, to Buyer:
(i) an assignment of the Assigned Intellectual Property Assets
and separate assignments of all Patents, Marks and Copyrights in
the
form set forth in Exhibit 1.06(a)(i) duly executed by Seller;
(ii) an assignment of all of the Assets that are intangible
personal property in the forms of the Assignment and Assumption
Agreement
attached as Exhibit 1.06(a)(ii) hereto (the "Assignment
Agreement") duly executed by Seller;
(iii) the Data Materials;
(iv) a bill of sale for all of the Assets that are tangible
personal property in the form of Exhibit 1.06(a)(iv) (the "Bill
of
Sale") duly executed by Seller;
(v) a detailed accounting of the Inventory calculated as of the
Closing Date, provided in the same format as the Current
Accounting
Inventory in Part 2.06 of the Disclosure Schedule;
(vi) the Escrow Agreement, duly executed by Seller, and a blank
stock power in the form of Exhibit 1.06(a)(vi) for shares of
Common
Stock, duly executed by Seller, in connection with the Common Stock
to
be held in escrow;
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(vii) the License Agreement in the form attached hereto as
Exhibit 1.06(a)(vii) (the "License Agreement"), duly executed
by
Seller;
(viii) the Non-Competition and Non-Solicitation Agreement in
the
form attached hereto as Exhibit 1.06(a)(viii) (the
"Non-Competition
Agreement"), duly executed by Seller;
(ix)
the Registration Rights Agreement in the form attached
hereto as Exhibit 1.06(a)(ix) (the "Registration Rights
Agreement"),
duly executed by Seller;
(x) a certificate duly executed by Seller as to the accuracy of
their representations and warranties as of the date of this
Agreement
and as of the Closing in accordance with Section 6.01 and as to
their
compliance with and performance of the covenants and obligations to
be
performed or complied with at or before the Closing in accordance
with
Section 6.02;
(xi) a certificate of the Secretary of Seller certifying, as
complete and accurate as of the Closing, attached copies of the
Governing Documents of Seller, certifying and attaching all
requisite
resolutions or actions of Seller's board of directors and/or
supervisory board, as required, approving the execution and
delivery
of this Agreement and the consummation of the Transactions and
certifying to the incumbency and signatures of the officers of
Seller
executing this Agreement and any other document relating to the
Transactions; and
(xii) such other documents and instruments as may reasonably be
requested by Buyer, each in form and substance reasonably
satisfactory
to Buyer and its legal counsel and executed by Seller, in each case
as
are reasonably necessary to consummate the Transactions
contemplated
by this Agreement.
(b)
Buyer's Deliveries. Buyer shall deliver to Seller or the Escrow
Agent,
as applicable:
(i) US$8,000,000 in immediately available funds to an
account designated in writing to Buyer at least two (2)
Business
Days before the Closing Date;
(ii) a stock certificate representing the 4,695,534 shares
of Common Stock, duly issued to Seller;
(iii) the Escrow Agreement, duly executed by Buyer, together
with the delivery of a stock certificate representing the
1,565,179 shares of Common Stock issued in the name of Seller,
to
the Escrow Agent thereunder;
(iv) the Assignment Agreement, duly executed by Buyer;
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(v) the License Agreement, duly executed by Buyer;
(vi) the Non-Competition Agreement, duly executed by Buyer;
(vii) the Registration Rights Agreement, duly executed by
Buyer;
(viii) the WIP Purchase Order, duly executed by Buyer, using
the form attached hereto as Exhibit 1.06(b)(viii) (the "WIP
Purchase Order"), which shall include (i) provisions to
purchase
all WIP on the Projected Inventory Accounting, (ii) transfer
pricing as provided in such exhibit and (iii) provisions for
delivery at a monthly rate of at least 1/12 of the volume for
each type of product (line item) identified on the Projected
Inventory Accounting;
(ix) a certificate duly executed by Buyer as to the accuracy
of its representations and warranties as of the date of this
Agreement and as of the Closing in accordance with Section 7.01
and as to its compliance with and performance of its covenants
and obligations to be performed or complied with at or before
the
Closing in accordance with Section 7.02(c);
(x) a certificate of the Secretary of Buyer certifying, as
complete and accurate as of the Closing, attached copies of the
Governing Documents of Buyer and certifying and attaching all
requisite resolutions or actions of Buyer's board of directors
approving the execution and delivery of this Agreement and the
consummation of the Transactions and certifying to the
incumbency
and signatures of the officers of Buyer executing this
Agreement
and any other document relating to the Transactions; and
(xi) such other documents and instruments as may reasonably
be requested by Seller, each in form and substance reasonably
satisfactory to Seller and its legal counsel and executed by
Buyer, in each case as are reasonably necessary to consummate
the
Transactions contemplated by this Agreement.
Article II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller
represents and warrants, to and for the benefit of the Buyer
Indemnitees, as follows:
2.01 Due
Organization. Seller is a German stock corporation duly formed,
validly existing and in good standing under
the laws of the jurisdiction of its
formation, has all requisite power and
authority and all necessary governmental
approvals to own, lease and operate its
properties and to carry on its business
as it is now being conducted, and is
qualified or licensed to do business as a
foreign entity and is in good standing,
where applicable, in each jurisdiction
in which the nature of the business
conducted by it makes such qualification or
licensing necessary.
2.02 Financial
Statements.
(a) Seller has delivered to Buyer the following financial
statements
(collectively, the "Financial Statements"):
the report of Rodl & Partner GmbH
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containing the unaudited pro forma balance
sheets of Seller's nvSRAM Product
Line as of December 31, 2002, December 31,
2003 and December 31, 2004, and the
related pro forma statements of income and
cash flows for the years then ended,
copies of which are attached as Part 2.02
of the Disclosure Schedule. For
purposes of this Agreement, the "Unaudited
Balance Sheet" shall mean the
unaudited balance sheet of the nvSRAM
Product Line as of December 31, 2004, and
the "Unaudited Balance Sheet Date" shall
mean December 31, 2004.
(b) The Financial Statements are accurate and complete in all
material
respects, have been prepared on the basis
of proper bookkeeping and in
accordance with accounting, valuation and
depreciation principles generally
accepted in Germany. Such accounting
principles have been applied on a
consistent basis throughout the periods
covered (except that the financial
statements referred to in this Section 2.02
do not have notes) and present
completely and correctly in all material
respects the financial position of
Seller's nvSRAM Product Line as of the
respective dates thereof and the results
of operations and cash flows of Seller's
nvSRAM Product Line for the periods
covered thereby.
2.03 Absence of
Changes. Since the due diligence conducted by Buyer on
November 30, 2005, as related to the nvSRAM
Product Line and except as related
to this Agreement and the Transactions
contemplated hereby:
(a) there has not been any material adverse effect on, and no event
has
occurred that might have an adverse effect
on, the business, condition, assets
(including all Assets), liabilities,
operations, financial performance or net
income of Seller;
(b) Seller has not entered into any transaction or taken any
other
action outside the ordinary course of
business; and
(c) Seller has not agreed, committed or offered (in writing or
otherwise) to take any of the actions
referred to in clause (b) above.
2.04
Title to Assets.
Except as set forth in Part 2.04 of the Disclosure
Schedule, Seller owns, and has good, valid,
and marketable title to, all of the
Assets, and all rights, titles and
interests in the Assets are owned by Seller
free and clear of any Encumbrances. Part
2.04 of the Disclosure Schedule
identifies all of the Assets that are being
leased or licensed to Seller.
2.05 Customers
and Distributors. Part 2.05 of the Disclosure Schedule
accurately identifies and provides an
accurate and complete breakdown of the
revenue and sales volume received from all
customers of the nvSRAM Product Line
for the year ended December 31, 2004 and
the first nine months of 2005. Seller
has not received any notice or other
communication (in writing or otherwise),
and Seller has not received any other
information, indicating that any customer
or other Person identified or required to
be identified in Part 2.05 of the
Disclosure Schedule may cease dealing with
Seller or may otherwise reduce the
volume of business transacted by such
Person with Seller below historical levels
with respect to the nvSRAM Product Line.
Seller has not received any notice or
other communication (in writing or
otherwise), or has received any other
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information, indicating that any
distributor of any of Seller's nvSRAM products
may cease acting as a distributor of such
products or otherwise dealing with
Seller.
2.06
Inventory.
(a) Part
2.06 of the Disclosure Schedule provides an accurate and
complete list and accounting of the
Inventory including quantity and average
sales price. Such list and accounting is
referred to herein as the "Current
Inventory Accounting."
(b) The Inventory: (i)
is of such quality and quantity as to be usable
and saleable by Seller in the ordinary
course of business; and (ii) is free of
any defect or deficiency.
2.07
Intellectual Property Assets.
(a) Intellectual Property Assets. The term "Intellectual
Property
Assets" means: (i) the Intellectual
Property previously licensed to or acquired
by Seller from Buyer, including any
modifications, enhancements, improvements or
derivatives thereto or thereof, and (ii)
all other Intellectual Property and
technical information owned or licensed (as
licensor or licensee) by Seller that
is used by Seller, as of the Closing, or
that was used by Seller within the
3-month period immediately preceding the
Closing, and that will be used by Buyer
in connection with, or that is related to,
the nvSRAM Product Line business,
including:
(i) all trade names, registered and unregistered trademarks,
service marks and applications (collectively, "Marks");
(ii) all patents and patent applications (including any
divisionals, continuations, continuations-in-part, reissues, or
extensions of any of the patents or patent applications, and
any
foreign or domestic patents and patent applications claiming
priority
to the patents or patent applications) (collectively,
"Patents");
(iii) all registered and unregistered copyrights in both
published works and unpublished works, including software and
maskworks (collectively, "Copyrights");
(iv) all rights in business processes; and
(v) all know-how, trade secrets, inventions, confidential or
proprietary information, customer lists, Software, technical
information, data, process technology, plans, drawings and blue
prints
(collectively, "Trade Secrets").
The term "Assigned Intellectual Property
Assets" means the Intellectual Property
Assets with the exception of the
Intellectual Property set forth in the
"Licensed Intellectual Property Assets"
section of Part 2.07(a) of the
Disclosure Schedule (all Intellectual
Property in the "Licensed Intellectual
Property Assets" section of Part 2.07(a) of
the Disclosure Schedule, the
"Licensed Intellectual Property Assets").
The Assigned Intellectual Property
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Assets shall be assigned to Buyer, pursuant
to the assignment contemplated by
Section 1.06(a)(i) of this Agreement. The
Licensed Intellectual Property Assets
shall be licensed to Buyer, pursuant to the
License Agreement contemplated by
Section 1.06(a)(vii) of this Agreement.
(b) Adequacy of Intellectual Property Assets.
(i) The Seller owns good, valid and marketable title in and to
the Intellectual Property Assets, and the Intellectual Property
Assets
assigned to Buyer under this Agreement and the other rights in
the
Intellectual Property Assets licensed to Buyer under the
Transactional
Agreements: (1) are all those necessary for Buyer to continue
to
conduct the nvSRAM Product Line business as currently conducted
by
Seller without restriction, interruption or limitation; (2) are
free
and clear of all liens, claims and encumbrances; and (3) to
Seller's
Knowledge, do not infringe or misappropriate (and are not alleged
to
infringe or misappropriate) the Intellectual Property of any
other
Person. Other than the Intellectual Property Assets assigned to
Buyer
under this Agreement and the other Intellectual Property Assets
licensed to Buyer under the Transactional Agreements, Seller does
not
own or have any interest in any technology or Intellectual
Property
necessary for Buyer to continue to conduct the nvSRAM Product
Line
business as currently conducted by Seller without restriction,
interruption or limitation.
(ii) All former and current officers, managers, directors,
employees, and independent contractors of Seller have duly assigned
to
Seller all rights to any inventions, improvements, discoveries
or
information relating to Seller's nvSRAM Product Line and that
provide
that such individuals shall maintain in confidence all
confidential
information of Seller. Without limitation of the foregoing, no
former
or current officer, manager, director, employee, consultant or
independent contractor has any right, title or interest in, to
or
under any Intellectual Property Asset, including under the German
Act
on Employee Inventions (Arbeitnehmererfindungsgesetz).
(c) Patents. With respect to Patents:
(i) The "Patents" section of Part 2.07(c) of the Disclosure
Schedule contains a complete and accurate list of all Patents.
(ii) All of the Patents are currently in compliance with formal
Legal Requirements (including payment of filing, examination
and
maintenance fees and proofs of working or use), to Seller's
Knowledge,
such Patents are valid and enforceable, and they are not subject
to
any maintenance fees or taxes or actions falling due within
ninety
(90) days after the Closing Date.
(iii) No Patent has been or is now involved in any
interference,
reissue, reexamination, or opposition Proceeding. To Seller's
Knowledge, there is no potentially interfering patent or patent
application of any third party.
(iv) No Patent has, to Seller's Knowledge, been challenged,
threatened or infringed in any way.
(d) Marks. With respect to Marks:
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(i) The "Marks" section of Part 2.07(d) of the Disclosure
Schedule contains a complete and accurate list of all Marks.
(ii) All registered Marks are currently in compliance with
formal
Legal
Requirements, to Seller's Knowledge, such Marks are valid and
enforceable, and they are not subject to any maintenance fees or
taxes
or actions falling due within ninety (90) days after the Closing
Date.
No Mark has been or is now involved in any opposition, invalidation
or
cancellation Proceeding and, to Seller's Knowledge, no such action
is
threatened with respect to any of the Marks. .
(iii) No Mark has, to Seller's Knowledge, been challenged,
threatened or infringed in any way. (iv) Seller has maintained
continuous use of the "CAPSTORE" mark from at least January 21,
2004
through the present.
(e) Copyrights. With respect to Copyrights:
(i) The "Copyrights" section of Part 2.07(e) of the Disclosure
Schedule contains a complete and accurate list of any
registered
Copyrights
(ii) No Copyright has, to Seller's Knowledge, been challenged,
threatened
or infringed in any way.
(f) Trade Secret. With respect to each Trade Secret relating to
a
process that is necessary for Buyer to
conduct the nvSRAM Product Line as
currently conducted by Seller without
restriction, interruption or limitation:
(i) The documentation relating to such Trade Secret is current,
accurate and sufficient in detail and content to identify and
explain
it and to allow its full and proper use without reliance on the
knowledge or memory of any individual.
(ii) Seller has taken commercially reasonable precautions to
protect the secrecy, confidentiality and value of the Trade
Secret.
(iii) Seller has good title to and an absolute right to use the
Trade Secret. The Trade Secret is not part of the public knowledge
or
literature and, to Seller's Knowledge, has not been used, divulged
or
appropriated either for the benefit of any Person (other than
Seller)
or to the detriment of Seller. To Seller's Knowledge, no such
Trade
Secret is subject to any adverse claim or has been challenged
or
threatened in any way. No such Trade Secret infringes any
Intellectual
Property of any other Person.
2.08
Contracts.
(a) Part 2.08 of the Disclosure Schedule lists each Assumed
Contract.
Seller has delivered to Buyer accurate and
complete copies of all Assumed
Contracts, including all amendments
thereto. Each Assumed Contract is valid and
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in full force and effect, and to Seller's
Knowledge, there is no basis on which
an Assumed Contract will cease to be in
full force and effect (except expiration
of the contractual term).
(b) All Assumed Contracts are open customer orders placed with
Seller.
(c) Except as set forth on Part 2.08 of the Disclosure Schedule,
the
Assumed Contracts do not provide for
prepayments by customers, and there have
been no prepayments by any customers under
any of the Assumed Contracts.
(d) Except as set forth on Part 2.08 of the Disclosure Schedule,
the
Assumed Contracts do not contain any
provisions regarding pricing or similar
protections.
2.09
Liabilities. Seller has no Liabilities related to the Assets except
as
set forth in Part 2.09 of the Disclosure
Schedule.
2.10 Compliance
with Legal Requirements. Seller is in all material respects
in compliance with each Legal Requirement
that is applicable to it with respect
to its ownership or use of any of the
Assets.
2.11 Sale of
nvSRAM Products; Performance of Services. All Inventory shall
comply with Seller's standard warranty,
terms of sale and specifications
attached hereto as Exhibit 2.11, free of
any design defects, construction
defects, manufacturing defects or other
defects or deficiencies at the time of
delivery. No nvSRAM product manufactured or
sold by the Seller has been the
subject of any recall or other similar
action; and no event has occurred, and no
condition or circumstance exists, that is
likely to (with or without notice or
lapse of time) directly or indirectly give
rise to or serve as a basis for any
such recall or other similar action
relating to any such product. All services
that have been performed by or on behalf of
the Seller for the nvSRAM Product
Line were performed properly and in full
conformity with the terms and
requirements of all applicable warranties
and other Seller Contracts and with
all applicable Legal Requirements.
2.12 Insurance.
The operations of the nvSRAM Product Line and all of the
material insurable Assets are insured for
the benefit of Seller in amounts and
against risks which Seller reasonably
believes are adequate.
2.13 Related
Person Transactions. Except as set forth on Part 2.13 of the
Disclosure Schedule, no shareholder,
officer, director or Affiliate of Seller
(i) has any direct or indirect interest of
any nature in any of the Assets or
(ii) is competing directly or indirectly,
with the Seller with respect to the
nvSRAM Product Line.
2.14
Proceedings; Governmental Orders. With respect to the nvSRAM
Product
Line, there is no pending Proceeding, and
no Person has threatened to commence
any Proceeding with respect to the nvSRAM
Product Line: (a) that involves Seller
or that otherwise relates to or might
affect the business of Seller or any of
the Assets (whether or not the Seller is
named as a party thereto); or (b) that
challenges, or that may have the effect of
preventing, delaying, making illegal
or otherwise interfering with, any of the
Transactions. With respect to the
nvSRAM Product Line and to Seller's
Knowledge, no event has occurred, and no
claim, dispute or other condition or
circumstance exists, that might reasonably
11
<PAGE>
be expected to give rise to or serve as a
basis for the commencement of any such
Proceeding. No Proceeding has ever been
commenced by or against Seller with
respect to the nvSRAM Product Line. There
is no Governmental Order to which
Seller with respect to the nvSRAM Product
Line, or any of the assets owned or
used by Seller with respect to the nvSRAM
Product Line, is subject. To Seller's
knowledge, there is no proposed
Governmental Order that, if issued or otherwise
put into effect, (i) may have an adverse
effect on the business, condition,
assets, liabilities, operations, financial
performance or net income of the
nvSRAM Product Line or on the ability of
the Seller to comply with or perform
any covenant or obligation under any of the
Transactional Agreements, or (ii)
may have the effect of preventing,
delaying, making illegal or otherwise
interfering with any of the
Transactions.
2.15 Authority;
Binding Nature of Agreements. Seller has the absolute and
unrestricted right, power and authority to
enter into and to perform its
obligations under each of the Transactional
Agreements to which it is or may
become a party; and the execution, delivery
and performance by Seller of the
Transactional Agreements to which it is or
may become a party have been duly
authorized by all necessary action on the
part of Seller. This Agreement
constitutes the legal, valid and binding
obligation of Seller, enforceable
against Seller in accordance with its
terms. Upon the execution and delivery of
each of the other Transactional Agreements
at the Closing, each of such other
Transactional Agreements to which Seller is
a party will constitute the legal,
valid and binding obligation of Seller and
will be enforceable against Seller in
accordance with its terms.
2.16
Non-Contravention; Consents. Except as set forth on Part 2.16 of
the
Disclosure Schedule, neither the execution
and delivery of any of the
Transactional Agreements, nor the
consummation or performance of any of the
Transactions, will directly or indirectly
(with or without notice or lapse of
time):
(a) contravene, conflict with or result in a violation of, or give
any
Governmental Body or other Person the right
to challenge any of the Transactions
or to exercise any remedy or obtain any
relief under, any Legal Requirement or
any Governmental Order to which Seller, or
any of the Assets, is subject;
(b) contravene, conflict with or result in a violation or breach
of, or
result in a default under, any provision of
any Assumed Contract or Governing
Document;
(c) give any Person the right to (i) declare a default or exercise
any
remedy under any Assumed Contract, (ii)
accelerate the maturity or performance
of any Assumed Contract, or (iii) cancel,
terminate or modify any Assumed
Contract; or
(d) result in the imposition or creation of any Encumbrance upon
or
with respect to any of the Assets.
Except as set forth on Part 2.16 of the Disclosure Schedule,
Seller
will not be required to make any filing
with or give any notice to, or to obtain
any Consent from, any Person in connection
with the execution and delivery of
any of the Transactional Agreements or the
consummation or performance of any of
the Transactions.
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<PAGE>
2.17 Brokers.
Except for Montgomery & Co., neither Seller nor any
Representative of Seller has retained any
Person to act as a broker or agreed or
become obligated to pay, or has taken any
action that is likely to result in any
Person claiming to be entitled to receive,
any brokerage commission, finder's
fee or similar commission or fee in
connection with any of the Transactions.
2.18 Investor
Status.
(a) Seller is acquiring the Common Stock for its own account and
not
with a present view to distribute or resell
the Common Stock, without prejudice,
however, to the right of the Seller at all
times to sell or otherwise dispose of
all or any part of the Common Stock in
compliance with applicable federal and
state securities laws and the Registration
Rights Agreement. Nothing contained
herein shall be deemed a representation or
warranty by the Seller to hold the
Common Stock for any minimum period of
time.
(b) At the time the Seller was offered the Common Stock, Seller
was,
and at the date hereof it is, an
"accredited investor" as defined in Rule 501(a)
under the Securities Act of 1933, as
amended.
(c) Seller is not acquiring the Common Stock as a result of any
advertisement, article, notice or other
communication regarding the Common Stock
published in any newspaper, magazine or
similar media or broadcast over
television or radio or presented at any
seminar or any other general
solicitation or general advertisement.
(d) Seller acknowledges that it has been afforded (i) the
opportunity
to ask such questions as it has deemed
necessary of, and to receive answers
from, representatives of Simtek concerning
the merits and risks of investing in
the Common Stock; (ii) access to
information about Simtek and its subsidiaries
and their respective financial condition,
results of operations, business,
properties, management and prospects
sufficient to enable it to evaluate its
investment; and (iii) the opportunity to
obtain such additional information that
Simtek possesses or can acquire without
unreasonable effort or expense that is
necessary to make an informed investment
decision with respect to the
investment.
(e) Seller has sufficient knowledge and experience in financial
or
business matters so as to be able to
evaluate the risks and merits of its
investment in Simtek and it is able
financially to bear the risks thereof.
(f) Seller shall not resell the Common Stock, except pursuant to
(i) a
registration under the Securities Act of
1933, as amended, (ii) an available
exemption from registration or (iii)
Section 3.2 of the Registration Rights
Agreement.
(g) Seller is not a U.S. Person and it is not acquiring the
Common
Stock for the account or benefit of any
U.S. Person.
13
<PAGE>
Article III
-----------
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants, to and for the benefit of Seller,
as
follows:
3.01 Authority;
Binding Nature of Agreements. Buyer has the absolute and
unrestricted corporate right, power and
authority to enter into and perform its
obligations under this Agreement, and the
execution and delivery by Buyer of the
Transactional Agreements to which it is or
may become a party have been duly
authorized by all necessary action on the
part of Buyer, its board of directors
and its shareholders. This Agreement
constitutes the legal, valid and binding
obligation of Buyer, enforceable against it
in accordance with its terms. Upon
the execution and delivery of each of the
other Transactional Agreements at the
Closing each of such other Transactional
Agreements to which Buyer is a party
will constitute the legal, valid and
binding obligations of Buyer, enforceable
against Buyer in accordance with its
terms.
3.02
Organization, Good Standing and Power. Buyer is a corporation
duly
organized, validly existing and in good
standing under the laws of the State of
Colorado, has all requisite power and
authority and all necessary governmental
approvals to own, lease and operate its
properties and to carry on its business
as it is now being conducted, and is
qualified or licensed to do business as a
foreign entity and is in good standing,
where applicable, in each jurisdiction
in which the nature of the business
conducted by it makes such qualification or
licensing necessary.
3.03 Exchange
Act Filings; Financial Statements. Buyer has filed all
reports, forms or other information
required to be filed by it under the
Securities Act of 1933, as amended (the
"Securities Act"), and the Securities
Exchange Act of 1934, as amended (the
"Exchange Act"), including pursuant to
Section 13(a) or 15(d) thereof, for the
twelve months preceding the date hereof
(or such shorter period as Buyer was
required by law to file such reports, forms
or other information) (the foregoing
materials being collectively referred to
herein as the "SEC Reports") on a timely
basis or has timely filed a valid
extension of such time of filing and has
filed any such SEC Reports prior to the
expiration of any such extension. As of
their respective dates, the SEC Reports
complied in all material respects with the
requirements of the Securities Act
and the Exchange Act and the rules and
regulations of the SEC promulgated
thereunder, and none of the SEC Reports,
when filed, contained any untrue
statement of a material fact or omitted to
state a material fact required to be
stated therein or necessary in order to
make the statements therein, in light of
the circumstances under which they were
made, not misleading. The financial
statements of Buyer included in the SEC
Reports comply, in all material
respects, with applicable accounting
requirements and the rules and regulations
of the SEC with respect thereto as in
effect at the time of filing. Such
financial statements have been prepared in
accordance with generally accepted
accounting principles applied on a
consistent basis during the periods involved,
except as may be otherwise specified in
such financial statements or the notes
thereto, and fairly present in all material
respects the financial position of
Buyer and its consolidated subsidiaries as
of and for the dates thereof and the
results of operations and cash flows for
the periods then ended, subject, in the
case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
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<PAGE>
For purposes of this Agreement, any
reports, forms or other information provided
to the SEC, whether by filing, furnishing
or otherwise providing, is included in
the term "filed" (or any derivations
thereof).
3.04 Common
Stock. The Common Stock to be issued by Buyer to Seller
pursuant to this Agreement has been duly
authorized. Upon consummation of the
transactions contemplated by this
Agreement, the Common Stock to be issued on
the Closing will be validly issued, fully
paid and nonassessable when issued and
will be free and clear of any Encumbrances,
except as set forth in the
Transactional Agreements and under
applicable securities laws. Buyer has
reserved from its duly authorized capital
stock the shares of its Common Stock
issuable pursuant to this Agreement.
3.05
Proceedings. To Buyer's Knowledge, there is no pending Proceeding
and
no Person has threatened to commence any
Proceeding, that challenges, or that
may have the effect of preventing,
delaying, making illegal or otherwise
interfering with any of the
Transactions.
3.06
Non-Contravention. Except as set forth in Part 3.06 of the
Disclosure
Schedule, the execution, delivery and
performance by Buyer of each of the
Transactional Agreements and the
consummation by Buyer of the transactions
contemplated thereunder do not and will not
(a) violate or conflict with any
provision of each of Buyer's Governing
Documents, (b) breach any provision of,
or be an event that is (or with the passage
of time will result in) a default
of, or result in the cancellation or
acceleration of (whether after the giving
of notice or lapse of time or both) any
obligation under, or result in the
imposition or creation of any encumbrances
upon any of the assets of Buyer
pursuant to, any material contract,
mortgage, lien, lease, agreement or
instrument to which Buyer is a party or by
which Buyer is bound, or (c)
contravene, conflict with or result in a
violation, or give any Governmental
Body or other Person the right to challenge
any of the Transactions or to
exercise any remedy or obtain any relief
under, any Legal Requirements or any
Order to which Buyer is subject.
3.07
Capitalization. The Form 10-Q filed by Buyer for the quarter
ended
September 30, 2005, as supplemented by Part
3.07 of the Disclosure Schedule,
contains a true and correct statement of
the authorized, issued and outstanding
equity ownership of Buyer as of the date
hereof. Other than as set forth
therein, there are no other outstanding
shares of capital stock or other
securities of Buyer and no outstanding
subscriptions, options, warrants, puts,
calls, rights, exchangeable or convertible
securities, or other commitments or
agreements of any nature relating to the
capital stock or other securities of
Buyer, or otherwise obligating Buyer to
issue, transfer, sell, purchase, redeem
or otherwise acquire such stock or
securities, in each case as of September 30,
2005. All outstanding shares of Buyer's
Common Stock are duly authorized and
validly issued and are fully paid and
non-assessable.
3.08 Press
Releases. The press releases disseminated by Buyer during the
twelve months preceding the date of this
Agreement do not, taken as a whole with
the SEC Reports, contain any untrue
statement of a material fact or omit to
state a material fact required to be stated
therein or necessary in order to
make the statements therein, in light of
the circumstances under which they were
made and when made, not materially
misleading.
15
<PAGE>
3.09 Material
Changes. Since the date of the latest audited financial
statements filed by Buyer with the SEC,
except as specifically disclosed in such
filings or as set forth on Part 3.09 of the
Disclosure Schedule or as set forth
in SEC filings, (i) there has been no
event, occurrence or development that has
had a material adverse effect on the
Buyer's business taken as a whole, (ii)
Buyer has not altered its method of
accounting or the identity of its auditors,
(iii) Buyer has not declared or made any
dividend or distribution of cash or
other property to its shareholders or
purchased, redeemed or made any agreements
to purchase or redeem any shares of its
capital stock, and (iv) Buyer has not
issued any equity securities, except
pursuant to existing Buyer stock option
plans and consistent with past practice.
Except as set forth on Part 3.09 of the
Disclosure Schedule, Buyer does not have
pending before the SEC any request for
confidential treatment of information.
3.10 Compliance.
Except as set forth in reports, forms or other information
filed by the Buyer with the SEC under the
Exchange Act or the Securities Act,
Buyer (i) is not in default under or in
violation of (and no event has occurred
that has not been waived that, with notice
or lapse of time or both, would
result in a default by Buyer), nor has
Buyer received notice of a claim that it
is in default under or that it is in
violation of, any indenture, loan or credit
agreement or any other agreement or
instrument to which it is a party or by
which it or any of its properties is bound
(whether or not such default or
violation has been waived), (ii) is not in
violation of any Order, and (iii) is
not and has not been in violation of any
statute, rule or regulation of any
Governmental Body. Buyer is in compliance
with all effective requirements of the
Sarbanes-Oxley Act of 2002, as amended, and
the rules and regulations
thereunder, that are applicable to it,
except where such noncompliance could not
have or reasonably be expected to result in
a material adverse effect on Buyer.
3.11 Insurance.
Buyer maintains such insurance relating to its business,
operations, assets, key employees and
officers and directors in amounts and
against risks which Buyer reasonably
believes are adequate.
3.12 Certain
Registration Matters. Assuming the accuracy of Seller's
representations and warranties set forth in
Article II, no registration under
the Securities Act or any applicable state
securities or blue sky laws is
required for the offer and sale of the
Common Stock by Buyer to Seller under
this Agreement. Buyer is eligible to
register the resale of its Common Stock by
Seller on Form S-1 promulgated under the
Securities Act. Except as set forth on
Part 3.12 of the Disclosure Schedule, Buyer
has not granted or agreed to grant
to any person any rights (including "piggy
back" registration rights) to have
any securities of Buyer registered with the
SEC or any other Governmental Body
that have not been satisfied or
exercised.
3.13 Listing and
Maintenance Requirements. Buyer has not, in the two years
preceding the date hereof, received notice
from the OTC Bulletin Board (the
"OTCBB") to the effect that Buyer is not in
compliance with the listing or
maintenance requirements thereof. Buyer is,
and has no reasonable grounds to
believe that it will not in the foreseeable
future continue to be, in compliance
with the listing and maintenance
requirements for continued listing of its
Common Stock on the OTCBB on which its
Common Stock is currently listed or
quoted. The issuance and sale of the Common
Stock under this Agreement does not
contravene the rules and regulations of the
OTCBB, and no approval of the
shareholders of Buyer is required for Buyer
to issue and deliver to Seller the
Common Stock contemplated by this
Agreement.
16
<PAGE>
3.14 Solvency.
Based on the financial condition of Buyer as of the date
hereof (i) Buyer's fair saleable value of
its assets exceeds the amount that
will be required to be paid on or in
respect of Buyer's existing debts and other
liabilities (including known contingent
liabilities) as they mature; (ii)
Buyer's assets do not constitute
unreasonably small capital to carry on its
business for the current fiscal year as now
conducted and as proposed to be
conducted including its capital needs
taking into account the particular capital
requirements of the business conducted by
Buyer, and projected capital
requirements and capital availability
thereof; and (iii) the current cash flow
of Buyer, together with the proceeds Buyer
would receive, were it to liquidate
all of its assets, after taking into
account all anticipated uses of the cash,
would be sufficient to pay all amounts on
or in respect of its debt when such
amounts are required to be paid. Buyer does
not intend to incur debts beyond its
ability to pay such debts as they mature
(taking into account the timing and
amounts of cash to be payable on or in
respect of its debt).
3.15 Investment
Company. Buyer is not, and is not an affiliate of, and
immediately following the transactions
contemplated hereunder will not have
become, an "investment company" within the
meaning of the Investment Company Act
of 1940, as amended.
3.16 Brokers.
Except for SVB Alliant, neither Buyer nor any Representative
of Buyer has retained any Person to act as
a broker or agreed or become
obligated to pay, or has taken any action
that is likely to result in any Person
claiming to be entitled to receive, any
brokerage commission, finder's fee or
similar commission or fee in connection
with any of the Transactions.
Article IV
----------
PRE-CLOSING COVENANTS OF SELLER
4.01 Access and
Investigation. Seller shall ensure that, at all times
during the Pre-Closing Period, Seller and
its Representatives shall: (a) afford
Buyer and its Representatives
(collectively, "Buyer Group") with reasonable
access after reasonable notice, during
regular business hours, to Seller's
senior management, properties, Seller
Contracts and assets and to all existing
books, records, work papers and other
documents and information relating to the
nvSRAM Product Line, and (b) furnish Buyer
Group with such additional financial,
operating and other relevant data and
information as Buyer may reasonably
request relating to the nvSRAM Product Line
and otherwise cooperate and assist,
to the extent reasonably requested by
Buyer, with Buyer's investigation of the
assets and financial condition of the
nvSRAM Product Line.
4.02 Operation
of Business. Seller shall ensure that, during the
Pre-Closing Period, with respect or as it
relates to the Assets:
(a) Seller conducts its operations in the ordinary course of
business;
(b) Seller shall not enter into any transaction or take any
other
action that is likely to cause or
constitute a Breach of any representation,
17
<PAGE>
warranty, obligation or covenant made in
this Agreement or the certifications to
be made pursuant to Section 1.06(a)(x);
and
(c) Seller shall not agree, commit or offer (in writing or
otherwise)
to take any of the actions prohibited in
clauses (a) and (b) of this Section
4.02.
4.03 Filings and
Consents. The Seller shall: (a) ensure that all filings,
notices and Consents required to be made,
given and obtained by Seller in order
to consummate the Transactions are made,
given and obtained on a timely basis;
and (b) during the Pre-Closing Period,
cooperate with Buyer, and make available
such documents as Buyer may reasonably
request in good faith, in connection with
any filing, notice or Consent that Buyer is
required to make, give or obtain.
4.04
Notification; Updates to Disclosure Schedule. During the
Pre-Closing
Period, Seller shall promptly notify Buyer
in writing of: (a) the discovery by
Seller of any event, condition, fact or
circumstance that occurred or existed on
or prior to the date of this Agreement and
that caused or constitutes a Breach
of any representation or warranty made by
the Seller in this Agreement; (b) any
event, condition, fact or circumstance that
occurs, arises or exists after the
date of this Agreement and that would cause
or constitute a Breach of any
representation or warranty made by Seller
in this Agreement if (i) such
representation or warranty had been made as
of the time of the occurrence,
existence or discovery of such event,
condition, fact or circumstance, or (ii)
such event, condition, fact or circumstance
had occurred, arisen or existed on
or prior to the date of this Agreement; (c)
any Breach of any covenant or
obligation of Seller; and (d) any event,
condition, fact or circumstance that
may make the timely satisfaction of any of
the conditions set forth in Article
VI or Article VII impossible or unlikely.
If any event, condition, fact or
circumstance that is required to be
disclosed pursuant to this Section 4.03
requires any change in the Disclosure
Schedule, or if any such event, condition,
fact or circumstance would require such a
change assuming the Disclosure
Schedule were dated as of the date of the
occurrence, existence or discovery of
such event, condition, fact or
circumstance, then Seller shall promptly deliver
to Buyer an update to the Disclosure
Schedule specifying such change and, when
accepted by Buyer, such update shall,
subject to Section 6.01, be deemed to
supplement or amend the Disclosure Schedule
for the purpose of determining the
accuracy of any representation or warranty
made by Seller in this Agreement or
any Closing Certificate.
4.05 No
Negotiation. During the Pre-Closing Period, until such time as
this
Agreement is terminated in accordance with
Article VIII, neither Seller nor any
Representative of Seller, shall directly or
indirectly: (a) solicit or encourage
the initiation of any inquiry, proposal or
offer from any Person (other than
Buyer) relating to any Acquisition
Transaction; (b) participate in any
discussions or negotiations with, or
provide any non-public information to, any
Person (other than Buyer) relating to any
proposed Acquisition Transaction; (c)
consider the merits of any unsolicited
inquiry, proposal or offer from any
Person (other than Buyer) relating to any
Acquisition Transaction or (d) effect
an Acquisition Transaction with any Person
other than Buyer. Seller and its
Representatives shall notify Buyer of any
such inquiry or proposal within
twenty-four (24) hours of receipt of the
same by Seller or its Representative.
4.06 Entry Into
Non-Competition Agreement. The parties acknowledge and
agree that as an inducement for Buyer to
enter into this Agreement, Seller will
18
<PAGE>
enter into the Non-Competition Agreement at
Closing pursuant to which Seller
will neither (i) compete with Buyer in the
nvSRAM Product Line nor (ii) solicit
or hire any employees of Buyer involved in
the nvSRAM Product Line, except if
such employee of Buyer was (y) terminated
by Buyer or (z) contacts Seller
directly in response to a valid general
advertisement of employment
opportunities.
4.07 Best
Efforts. During the Pre-Closing Period, Seller shall use its
best
efforts to cause the conditions set forth
in Article VI to be satisfied on a
timely basis.
4.08
Confidentiality. During the Pre-Closing Period: (a) Seller
shall
continue to be bound by the Nondisclosure
Agreement between Buyer and Seller,
dated as of March 14, 2005; and (b) Seller
shall issue no statement or
communication to third parties regarding
the Transactions, except to the extent
required by law or the rules of a stock
market or exchange or to obtain the
Consents. Notwithstanding the foregoing or
anything else to the contrary in this
Agreement, the parties hereto (and each
employee, representative or other agent
of a party) may disclose to any and all
Persons the Tax treatment and Tax
structure of the Transactions contemplated
by this Agreement and all materials
of any kind that are provided to the
parties relating to such Tax treatment and
Tax structure.
Article V
---------
PRE-CLOSING COVENANTS OF BUYER
5.01 Best
Efforts. During the Pre-Closing Period, Buyer shall use its
best
efforts to cause the conditions set forth
in Article VII to be satisfied on a
timely basis.
5.02
Confidentiality. During the Pre-Closing Period: (a) Buyer shall
continue to be bound by the Nondisclosure
Agreement between Buyer and Seller,
dated as of March 14, 2005; and (b) Buyer
shall issue no statement or
communication to third parties regarding
the Transactions, except to the extent
required by law or the rules of a stock
market or exchange. Notwithstanding the
foregoing or anything else to the contrary
in this Agreement, (a) Buyer may make
such disclosures of this Agreement and the
transactions contemplated hereby as
Buyer deems necessary or appropriate in
connection with obtaining any financing
for the transactions contemplated by the
Transactional Agreements; and (b) the
parties hereto (and each employee,
representative or other agent of a party) may
disclose to any and all Persons the Tax
treatment and Tax structure of the
Transactions contemplated by this Agreement
and all materials of any kind that
are provided to the parties relating to
such Tax treatment and Tax structure.
5.03 Filings and
Consents. The Buyer shall: (a) ensure that all filings,
notices and Consents required to be made,
given and obtained by Buyer in order
to consummate the Transactions are made,
given and obtained on a timely basis;
and (b) during the Pre-Closing Period,
cooperate with Seller and make available
such documents as Seller may request in
good faith, in connection with any
filing, notice or Consent that Seller is
required to make, give or obtain.
5.04
Notification; Updates to Disclosure Schedule. During the
Pre-Closing
Period, Buyer shall promptly notify Seller
in writing of: (a) the discovery by
19
<PAGE>
Buyer of any event, condition, fact or
circumstance that occurred or existed on
or prior to the date of this Agreement and
that caused or constitutes a Breach
of any representation or warranty made by
the Buyer in this Agreement; (b) any
event, condition, fact or circumstance that
occurs, arises or exists after the
date of this Agreement and that would cause
or constitute a Breach of any
representation or warranty made by Buyer in
this Agreement if (i) such
representation or warranty had been made as
of the time of the occurrence,
existence or discovery of such event,
condition, fact or circumstance, or (ii)
such event, condition, fact or circumstance
had occurred, arisen or existed on
or prior to the date of this Agreement; (c)
any Breach of any covenant or
obligation of Buyer; and (d) any event,
condition, fact or circumstance that may
make the timely satisfaction of any of the
conditions set forth in Article VI or
Article VII impossible or unlikely. If any
event, condition, fact or
circumstance that is required to be
disclosed pursuant to this Section 5.04
requires any change in the Disclosure
Schedule, or if any such event, condition,
fact or circumstance would require such a
change assuming the Disclosure
Schedule were dated as of the date of the
occurrence, existence or discovery of
such event, condition, fact or
circumstance, then Buyer shall promptly deliver
to Seller an update to the Disclosure
Schedule specifying such change and when
accepted by Seller, such update shall,
subject to Section 7.01, be deemed to
supplement or amend the Disclosure Schedule
for the purpose of determining the
accuracy of any representation or warranty
made by Buyer in this Agreement.
5.05 Bankruptcy.
Buyer shall provide Seller with five (5) days written
notice prior to Buyer filing a voluntary
bankruptcy petition under the United
States Bankruptcy Code and shall provide
Seller with prompt notice of any threat
of which Buyer becomes aware, or any
reasonable grounds suggesting, a bona fide
creditor intends to file an involuntary
bankruptcy petition or receivership
action against Buyer, which action Buyer is
not substantially certain that it
will be able to have dismissed.
Notwithstanding anything to the contrary in this
Agreement, in the event Buyer fails to
provide Seller with such notice, such
failure shall constitute a material breach
on Buyer's part and Seller may
immediately terminate this Agreement upon
written notice to Buyer, without
granting any cure period.
5.06 Work in
Progress. The WIP Purchase Order shall be a binding purchase
order for all existing work in progress for
the nvSRAM Product Line (the "WIP").
The WIP Purchase Order shall state price
lists for the various materials,
including tested good dies and packaged
integrated circuits (IC), that comprise
the WIP, and it will contain a delivery
schedule pursuant to which Buyer will
purchase the WIP. Seller agrees to inform
Buyer of the status of the WIP at the
Closing Date and to manufacture the WIP
using its standard procedures for
production which it uses in the ordinary
course of business. If Seller produces
volumes of WIP below that which is
forecasted because of low yields, Buyer
agrees to accept and purchase such
manufactured volumes of WIP pursuant to the
terms and conditions of the WIP Purchase
Order. If Seller produces volumes of
WIP above that which is forecasted because
of high yields, Buyer agrees to
accept and purchase such manufactured
volumes of WIP and adjust the WIP Purchase
Order accordingly. Prior to the Closing,
Seller will not manufacture wafers
without the prior written approval of
Buyer. If the Closing occurs on December
23, 2005, Seller will not manufacture any
wafers after the Closing Date without
the prior written approval of Buyer. If the
Closing does not occur on December
23, 2005, (a) Seller and Buyer shall on
January 3, 2006, mutually agree
regarding a wafer start rate, and Seller
shall thereafter have the right to
manufacture wafers on the basis of such
agreement without regard to the WIP
Purchase Order; and (b) notwithstanding the
foregoing, Seller shall have the
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<PAGE>
right to manufacture wafers at a run rate
of 100 wafers per week beginning on
January 3, 2006, provided the wafers are
used in the following nvSRAM products
of Seller: 256k nvSRAM 3 and 5 V and 64k
nvSRAM.
Article VI
----------
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's
obligation to purchase the Assets and to take the other actions
required to be taken by Buyer at the
Closing is subject to the satisfaction, at
or prior to the Closing, of each of the
following conditions (any of which may
be waived by Buyer, in whole or in part, in
writing):
6.01 Accuracy of
Representations. All of the representations and warranties
made by Seller in this Agreement
(considered collectively), and each of said
representations and warranties (considered
individually), shall have been
accurate in all material respects as of the
date of this Agreement, and shall be
accurate in all material respects as of the
Closing as if made at the Closing
(in each case except for any such
representations and warranties that, by their
terms, speak only as of a specific date or
dates, in which case such
representations and warranties shall only
be true and correct on and as of such
specified date or dates and in each case
without giving any effect to any
updates to the Seller's Disclosure
Schedule), except where the failure of such
representations and warranties to be true
and correct (read for purposes of this
Section 6.01 only without any materiality
or material adverse effect
qualification) could not, and could not
reasonably be expected to, individually
or in the aggregate, result in or be a
material adverse effect on the business,
condition (financial or otherwise) or
results of operations of the nvSRAM
Product Line.
6.02 Performance
of Obligations.
(a) Authorization. Seller shall have obtained (i) any necessary
approval of its board of supervisors and
board of management and (ii) any
necessary clearance of any Governmental
Body required to be obtained by Seller.
(b) Execution and Delivery of Documents. Each of the documents
referred
to in Section 1.06(a) shall have been duly
executed by each of the parties
thereto (except Buyer) and delivered to
Buyer or Escrow Agent (as applicable).
(c) Compliance
with Covenants. All of the covenants and obligations
that Seller is required to comply with or
to perform pursuant to this Agreement
at or prior to the Closing (considered
collectively), and each of said covenants
and obligations (considered individually),
shall have been duly complied with
and performed in all material respects.
6.03 Consents.
Each of the Consents identified in Schedule 6.03 shall have
been obtained and shall be in full force
and effect (except for such consents as
would not, or as Buyer could not reasonably
expect, individually or in the
aggregate, to have a material adverse
effect on Buyer or the nvSRAM Product
Line).
6.04 No Material
Adverse Effect. There shall have been no material adverse
effect on the business, condition, assets,
liabilities, operations, financial
21
<PAGE>
performance or net income related to the
nvSRAM Product Line since the Execution
Date, and no event shall have occurred and
no condition or circumstance shall
exist that could reasonably be expected to
give rise to any such material
adverse effect.
6.05 No
Proceedings. Since the date of this Agreement, there shall not
have
been commenced or threatened in writing
against Buyer or Seller, or against any
Person affiliated with Buyer or Seller, any
governmental Proceeding that is
reasonably likely to have the effect of
preventing, materially delaying, making
illegal or otherwise materially interfering
with any of the Transactions.
6.06 No
Prohibition. Neither the consummation nor the performance of
any
the Transactions will, directly or
indirectly (with or without notice or lapse
of time), result in a violation of any
applicable Legal Requirement or
Governmental Order (other than minor
technical violations that will not result
in a material adverse effect on Buyer), or
cause Buyer or any Person affiliated
with Buyer to suffer any material adverse
effect under any applicable Legal
Requirement or Governmental Order.
6.07 Resources
to Operate the Business. Buyer shall have obtained such
resources (including financial resources)
as are reasonably necessary to operate
the nvSRAM Product Line for at least 12
months after Closing.
6.08 Financing.
Buyer shall have received the financing and capital
resources reasonably necessary to
consummate the transactions in this Agreement.
Article VII
CONDITIONS PRECEDENT TO SELLER's OBLIGATION TO CLOSE
Seller's
obligation to sell the Assets and to take the other actions
required to be taken by Seller at the
Closing is subject to the satisfaction, at
or prior to the Closing, of each of the
following conditions (any of which may
be waived by the Seller, in whole or in
part, in writing):
7.01 Accuracy of
Representations. All of the representations and warranties
made by Buyer in this Agreement (considered
collectively), and each of said
representations and warranties (considered
individually), shall have been
accurate in all respects as of the date of
this Agreement and shall be accurate
in all respects as of the Closing as if
made at the Closing (in each case except
for any such representations and warranties
that, by their terms, speak only as
of a specific date or dates, in which case
such representations and warranties
shall only be true and correct on and as of
such specified date or dates and in
each case without giving any effect to any
updates to the Buyer's Disclosure
Schedule), except where the failure of such
representations and warranties to be
true and correct (read for purposes of this
Section 7.01 only without any
materiality or material adverse effect
qualification) could not, and could not
reasonably be expected to, individually or
in the aggregate, result in or be a
material adverse effect on the business,
condition (financial or otherwise) or
results of operations of the Buyer.
7.02 Buyer's
Performance.
(a) Authorization. Buyer shall have obtained (i) any necessary
approval
of its board of directors and (ii) any
necessary clearance of any Governmental
Body.
22
<PAGE>
(b) Execution and Delivery of Documents. Each of the documents
referred
to in Section 1.06(b) shall have been duly
executed by Buyer and delivered to
Seller or Escrow Agent (as applicable), and
Buyer shall have delivered the stock
certificates representing the Common Stock
as contemplated by Section 1.06(b).
(c) Compliance with Covenants. All of the covenants and
obligations
that Buyer is required to comply with or to
perform pursuant to this Agreement
at or prior to the Closing (considered
collectively), and each of said covenants
and obligations (considered individually),
shall have been duly complied with
and performed in all material respects.
7.03 No Material
Adverse Effect. There shall have been no material adverse
effect on the business, condition, assets,
liabilities, operations, financial
performance or net income of Buyer or its
business since the Execution Date and
no event shall have occurred and no
condition or circumstance shall exist that
could reasonably be expected to give rise
to any such material adverse effect.
7.04 No
Proceedings. Since the date of this Agreement, there shall not
have
been commenced or threatened in writing
against Seller or Buyer, or against any
Person affiliated with Seller or Buyer, any
governmental Proceeding that is
reasonably likely to have the effect of
preventing, materially delaying, making
illegal or otherwise materially interfering
with any of the Transactions.
7.05 No
Prohibition. Neither the consummation nor the performance of
any
the Transactions will, directly or
indirectly (with or without notice or lapse
of time), result in a violation of any
applicable Legal Requirement or
Governmental Order (other than minor
technical violations that will not result
in a material adverse effect on Seller), or
cause Seller or any Person
affiliated with Seller to suffer any
material adverse effect under, any
applicable Legal Requirement or
Governmental Order.
Article VIII
------------
TERMINATION
8.01 Termination
Events. This Agreement may be terminated prior to the
Closing:
(a)
by Buyer if (i) there is a material Breach of any covenant or
obligation of Seller and such Breach shall
not have been cured within thirty
(30) days after the delivery of notice
thereof to Seller (provided that no cure
period shall exist with respect to any
Breach of Section 4.05), or (ii) Buyer at
any time determines that it is unable to
raise the necessary capital to
consummate the transactions contemplated by
this Agreement (including making the
US$8,000,000 cash payment to Seller);
(b) by Seller if there is a material Breach of any covenant or
obligation of Buyer and such Breach shall
not have been cured within thirty (30)
days after the delivery of notice thereof
to Buyer (provided that no cure period
shall exist with respect to any Breach of
Section 5.05);
23
<PAGE>
(c) by Seller upon written notice to Buyer if Buyer is required
to
provide notice to Seller pursuant to
Section 5.05;
(d) by the mutual written consent of Buyer and Seller; or
(e) by either party if (i) Closing has not occurred by January
31,
2006; or (ii) any of the Transactions are
subject to a permanent injunction;
8.02 Termination
Procedures. If Buyer wishes to terminate this Agreement
pursuant to Section 8.01(a), Buyer shall
deliver to Seller a written notice
stating that Buyer is terminating this
Agreement and setting forth a brief
description of the basis on which Buyer is
terminating this Agreement. If Seller
wishes to terminate this Agreement pursuant
to Section 8.01(b), Seller shall
deliver to Buyer a written notice stating
that Seller is terminating this
Agreement and setting forth a brief
description of the basis on which Seller is
terminating this Agreement.
8.03 Effect of
Termination. If this Agreement is terminated pursuant to
Section 8.01, all further obligations of
the parties under this Agreement shall
terminate; provided, however, that: (a) no
party shall be relieved of any
obligation or other Liability arising from
any Breach by such party of any
provision of this Agreement; (b) the
parties shall, in all events, remain bound
by and continue to be subject to the
provisions set forth in Article XI; and (c)
Buyer and Seller shall, in all events,
remain bound by and continue to be
subject to Section 4.08 and 5.02 as if the
words "during the Pre-Closing Period"
were not included therein.
Article IX
----------
INDEMNIFICATION, ETC.
9.01 Survival of
Representations and Covenants.
(a) Each of the representations, warranties and covenants made by
any
party in this Agreement or any other
certificate or document delivered by any
party pursuant to this Agreement shall
survive the Closing for 6 months, except
as provided in Section 9.01(b), except that
the representations, warranties,
covenants and agreements arising from
Sections 2.04, 2.07, 2.11, 2.15, 3.01 and
3.04 and claims arising pursuant to Section
9.02(b) shall survive for 12 months
and except that claims related to (i)
fraud, (ii) third party products liability
claims for products manufactured and sold
by Seller prior to Closing that
involve death or serious bodily injury or
(iii) Liabilities for late deliveries
in the purchase orders identified on Part
9.01(a) of the Disclosure Schedule
(but only for Liabilities for events that
arise until the products covered by
the purchase order are made available for
shipment by Seller) shall survive
indefinitely.
(b) The Buyer's claims under the tax indemnification pursuant
to
Section 9.02(a)(iv) shall survive the
closing and become time barred (verjahren)
until six months after the relevant Tax or
other public assessments have become
final and binding (bestandskraftig).
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<PAGE>
9.02
Indemnification by Seller.
(a) From and after Closing, the Seller shall indemnify, defend and
hold
harmless the Buyer Indemnitees from and
against any Damages suffered by any of
the Buyer Indemnitees resulting from,
arising out of, or incurred with respect
to, or (in the case of claims asserted
against any of the Buyer Indemnitees by a
third party) alleged to result from, arise
out of or have been incurred with
respect to, (i) any Breach of any
representation or warranty as of the date made
or as of the Closing Date of Seller
contained in this Agreement or the
certificates provided pursuant to Section
1.06(a)(x), (ii) any Breach of any
covenant or other obligation of the Seller
contained in this Agreement or the
certificates provided pursuant to Section
1.06(a)(x), (iii) all claims arising
in connection with a possible continuity of
employment ("Betriebsubergang") from
any former employees of Seller, except for
those listed on Part 9.02 of the
Disclosure Schedule, according to Section
613a of the German Civil Code, (iv)
any Taxes, for which the tax liability of
the Buyer arises from the conduct of
the business and any tax deductions and any
repayable tax refunds within the
meaning of ss. 75 of the German Fiscal Code
("Abgabenordnung") including but not
limited to any trade taxes, VAT and other
taxes, (v) the operation of the nvSRAM
Product Line by Seller on or before the
Closing Date and (vi) the ownership or
use of the Assets by Seller before the
Closing Date.
(b) From and after Closing, the Seller shall indemnify, defend and
hold
harmless the Indemnitees from and against
any Damages suffered by any of the
Indemnitees resulting from fraud,
Liabilities for late deliveries in the
purchase orders identified on Part 9.01(a)
of the Disclosure Schedule (but only
for Liabilities for events that arise until
the products covered by the purchase
order are made available for shipment by
Seller) and any liabilities that are
not Assumed Liabilities, including Taxes,
environmental liabilities, and product
liabilities, to the extent related to the
operation by Seller of the nvSRAM
Product Line prior to the Closing Date.
(c) For any indemnification by Seller that is paid in Common Stock,
the
value of the Common Stock shall be
determined based on the volume weighted
average price of Common Stock for the 60
trading days prior to the Execution
Date.
9.03
Indemnification by Buyer. From and after Closing, the Buyer
shall
indemnify, defend and hold harmless the
Seller Indemnitees from and against all
Damages suffered by any of the Seller
Indemnitees to the extent resulting from,
arising out of, or incurred with respect
to, or (in the case of claims asserted
against any of the Seller Indemnitees by a
third party) alleged to result from,
arise out of or have been incurred with
respect to, (i) any Breach of any
representation or warranty as of the date
made or as of the Closing Date of the
Buyer contained in this Agreement or the
certificates provided pursuant to
Section 1.06(b)(ix), (ii) any Breach of any
covenant or other obligation of the
Buyer contained in this Agreement or the
certificates provided pursuant to
Section 1.06(b)(ix), (iii) the operation of
the nvSRAM Product Line by Buyer on
or after the Closing Date, and (iv) the
ownership or use of the Assets by Buyer
on or after the Closing Date.
9.04 Application
of Limitations.
(a) There shall be no limit on indemnification arising from
claims
related to (i) fraud, (ii) third party
products liability claims for products
manufactured and sold by Seller prior to
Closing that involve death or serious
25
<PAGE>
bodily injury or (iii) Liabilities for late
deliveries in the purchase order
identified on Part 9.01(a) of the
Disclosure Schedule (but only for Liabilities
for events that arise until the products
covered by the purchase order are made
available for shipment by Seller);
provided, however, that Buyer shall not
receive indemnification from Seller to the
extent it has received payment from
its insurance providers.
(b) Subject to Section 9.04(a), the maximum indemnification
liability
for indemnification claims resulting from
(i) Breach of provisions related to
Sections 2.04, 2.07, 2.11, 2.15, 3.01, 3.04
and 10.04, (ii) claims arising in
connection with a possible continuity of
employment ("Betriebsubergang") from
any former employees of Seller, except for
those listed on Part 9.02 of the
Disclosure Schedule, according to Section
613a of the German Civil Code, (iii)
any Taxes, for which the tax liability of
the Buyer arises from the conduct of
the business within the meaning of ss. 75
of the German Fiscal Code
("Abgabenordnung") pursuant to Section
9.02(a), and (iv) claims pursuant to
Section 9.02(b), shall be the Purchase
Price.
(c) Subject to Section 9.04(a) and Section 9.04(b), the maximum
indemnification liability for all
indemnification claims by Buyer Indemnitees
and Seller Indemnitees other than with
respect to Sections 2.04, 2.07, 2.11,
2.15, 3.01, 3.04 and 10.04 shall be 5% of
the Purchase Price, which shall
exclusively be provided from the Common
Stock deposited with the Escrow Agent.
(d) Notwithstanding anything to the contrary herein, neither
party
shall be entitled to indemnification for
Damages incurred as a result of any
Breach of representations and warranties in
this Agreement unless and until the
amount of Damages for any single claim
which may be asserted hereunder by such
party, exceeds the Threshold Amount, at
which time such party will have the
right to all Damages incurred in excess of
the Threshold Amount. "Threshold
Amount" means an amount equal to US$50,000.
In addition, notwithstanding
anything herein to the contrary, this
Section 9.04(d) shall not apply to any
Breach arising due to fraud, Liabilities
for late deliveries in the purchase
orders identified on Part 9.01(a) of the
Disclosure Schedule (but only for
Liabilities for events that arise until the
products covered by the purchase
order are made available for shipment by
Seller) or under Sections 2.04, 2.07,
2.11, 2.15, 3.01, 3.04 and 10.04.
9.05 Defense of
Third Party Claims.
(a) An indemnified party under this Agreement shall promptly
give
written notice to the indemnifying party
after obtaining knowledge of any third
party claim or litigation against the
indemnified party as to which recovery may
be sought against the indemnifying party
because of the indemnity set forth in
Sections 9.02 or 9.03, specifying in
reasonable detail the claim or litigation
and the basis for indemnification;
provided, however, that the failure of the
indemnified party promptly to notify the
indemnifying party of any such matter
shall not release the indemnifying party,
in whole or in part, from its
obligations under this Article IX except to
the extent the indemnified party's
failure to so notify in breach of this
paragraph (a) materially prejudices the
indemnifying party's ability to defend
against such third party claim or
litigation. The indemnified party shall
permit the indemnifying party to assume
the defense of any such claim, litigation
or any litigation resulting from such
third party claim.
26
<PAGE>
(b) If the indemnifying party assumes the defense of any such
third
party claim or litigation, the obligations
of the indemnifying party under this
Agreement shall include taking all steps
necessary in the investigation, defense
or settlement of such claim or litigation
(including the retention of legal
counsel) and holding the indemnified party
harmless from and against any and all
losses caused by or arising out of any
settlement approved by the indemnifying
party or any judgment in connection with
such claim or litigation. The
indemnifying party shall not, in the
defense of such claim or litigation,
consent to entry of any judgment or enter
into any settlement: (i) that does not
include as an unconditional term thereof
the giving by the claimant or the
plaintiff to the indemnified party a
complete release from all liability in
respect of such claim or litigation, or
(ii) the effect of which is to permit
any injunction, declaratory judgment, other
order or other equitable relief to
be entered, directly or indirectly, against
any indemnified party. The
indemnifying party shall permit the
indemnified party to participate in such
defense or settlement through counsel
chosen by the indemnified party, with the
fees and expenses of such counsel borne by
the indemnified party.
(c)
Failure by the indemnifying party to notify the indemnified
party
of its election to assume the defense of
any such claim or litigation by a third
party within thirty (30) days after notice
thereof has been given to the
indemnifying party shall be deemed a waiver
by the indemnifying party of its
right to assume the defense of such claim
or litigation. If the indemnifying
party does not assume the defense of such
claim or litigation by a third party,
the indemnified party may defend or settle
such claim or litigation in such
manner as the indemnified party may deem
appropriate and may settle such claim
or litigation on such terms as it may deem
appropriate. Nothing in this Article
IX shall limit Seller's obligation to
reimburse Buyer for any Damages incurred
by Buyer in connection with product
warranty claims for which Buyer seeks
reimbursement pursuant to Section
10.04.
9.06 Exclusive
Remedy; Additional Indemnification Issues.
(a) The indemnification provided in this Article IX and the
provisions
of Section 10.04 shall constitute the
exclusive remedy for breach of the
representations and warranties in this
Agreement, regardless of whether any
claims or causes of action asserted with
respect to such matters are brought in
contract, tort or any other legal theory
whatsoever; provided, however, that
only in the case of fraud, the
indemnification provisions in this Article IX are
in addition to, and not in derogation of,
any statutory, equitable or common law
remedy any party may have for breach of
representation or warranty. All
indemnification payments under this Article
IX shall be treated by the parties
as adjustments to the Purchase Price.
(b) Notwithstanding any other provision of this Agreement,
neither
Seller nor Buyer shall be liable under this
Article IX for an amount to the
extent, if any, that any Damages giving
rise to such amount results from a
failure on the part of the indemnified
party to exercise good faith in not
jeopardizing or prejudicing the interests
of the indemnifying party.
(c) Each party hereto, in entering into this Agreement and
performing
at the Closing, agrees and acknowledges
that it shall not be entitled to rely on
the accuracy and completeness of any
representation or warranty of the other
party, including any matter set forth in
any Schedule hereto, if and to the
extent it shall have discovered any fact
contrary to such representation or
27
<PAGE>
warranty during its due diligence
investigation or otherwise and shall not have
given to the other party notice thereof
prior to the Closing Date.
(d) No indemnified party shall seek or be entitled to
incidental,
indirect or consequential damages or
damages for lost profits in any claim for
indemnification under this Article IX, nor
shall it accept payment of any award
or judgment for such indemnification to the
extent that such award or judgment
includes such party's incidental, indirect
or consequential damages or damages
for lost profits.
Article X
---------
CERTAIN POST-CLOSING COVENANTS
10.01 Further
Actions. From and after the Closing Date, Seller shall
cooperate with Buyer and Buyer's Affiliates
and Representatives, and shall
execute and deliver such documents and take
such other actions as Buyer may
reasonably request, for the purpose of
evidencing the Transactions and putting
Buyer in possession and control of all of
the Assets.
10.02
Publicity.
(a) Without limiting the generality of anything contained in
Sections
4.08 and 5.02, Buyer and Seller shall
ensure that, on and at all times after the
Closing Date (unless written consent is
obtained from the other party, which
consent shall not be unreasonably
withheld): (a) no press release or other
publicity concerning any of the
Transactions is issued or otherwise disseminated
by or on behalf of Buyer or Seller, except
in each case (i) as required by a
Legal Requirement or pursuant to the rules
of the relevant stock market or
exchange and only after reasonable efforts
have been made to consult with the
other party regarding the content of such
press release or other publicity or
(ii) as buyer deems necessary or
appropriate in connection with any financing
for the transactions contemplated by the
Transactional Agreements; (b) Buyer and
Seller shall continue to keep the terms of
this Agreement and the other
Transactional Agreements strictly
confidential; and (c) Buyer and Seller keep
strictly confidential any non-public
document or other information that relates
directly or indirectly to any of the Assets
or the business of the Seller, Buyer
or any Affiliate of Buyer.
(b) Notwithstanding anything in this Agreement to the contrary,
the
parties hereto (and each Representative of
a party) may disclose to any and all
Persons, the Tax treatment and Tax
structure of the Transactions and all
materials of any kind that are provided to
the parties relating to such Tax
treatment and Tax structure.
10.03 Legends.
The certificates representing Common Stock issued pursuant
to this Agreement shall bear a restrictive
legend (and stop orders shall be
placed against the transfer thereof with
the Buyer's transfer agent), stating
substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY
NOT
BE SOLD, TRANSFERRED, ASSIGNED, HEDGED OR HYPOTHECATED IN THE
ABSENCE
28
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OF AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, OR AN
OPINION
OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT, OR A NO-ACTION LETTER
FROM
THE SECURITIES AND EXCHANGE COMMISSION
Following the effective date of a registration statement filed
by Buyer pursuant to the Registration Rights Agreement to permit
the
resale of the Common Stock, Buyer shall follow reasonable and
customary
business practices in allowing for timely transfer of Common Stock
held
by the Buyer and the removal of the restrictive legend.
10.04 Product
Warranty Claims. From and after the Closing Date for a period
of two (2) years thereafter, Seller shall
provide prompt notice to Buyer of any
product warranty claim received with
respect to an nvSRAM product sold by or on
behalf of Seller prior to the Closing.
Buyer, on behalf of Seller and subject to
Seller's prior confirmation that any such
third party warranty claim is a valid
claim, shall process any such approved
nvSRAM product warranty claims for nvSRAM
products sold by Seller prior to Closing.
Seller's confirmation shall not be
unreasonably withheld, conditioned, or
delayed. Notwithstanding Article IX,
within ten days of receipt of written
notice from Buyer, Seller shall reimburse
Buyer in full for all actual and direct
costs incurred by Buyer in connection
with the processing of any such approved
product warranty claim for a nvSRAM
product sold by or on behalf of Seller
prior to the Closing. If Buyer receives a
remedy for all actual and direct costs
incurred by Buyer in connection with the
processing of any such approved product
warranty claim for a nvSRAM product sold
by or on behalf of Seller prior to the
Closing, Buyer shall not be entitled to
additional recovery for such costs and
damages pursuant to Article IX.
Notwithstanding anything to the contrary
herein, nothing in this Section 10.04
shall be considered an assumption of
Liability for nvSRAM products sold by
Seller prior to
