Exhibit 10.1
Execution Copy
Membership Interest
Purchase Agreement
This Membership Interest Purchase
Agreeme nt (this “ Agreement ”) is made
and entered into as of May 7, 2009 by and between Synopsys, Inc., a
Delaware corporation (“ Buyer ”) and MIPS
Technologies, Inc., a Delaware corporation (“ Seller
”).
Recitals
A. Seller owns
all of the issued and outstanding membership interests in MIPS
Technologies Holding LLC, a Delaware limited liability company (the
“ Company ”).
B. Buyer
desires to purchase from Seller, and Seller desires to sell to
Purchaser, all of the issued and outstanding membership interests
of the Company, all upon the terms and conditions set forth in this
Agreement.
C. The board of
directors of Seller has determined that the transactions
contemplated by this Agreement (collectively, the “
Transaction ”) are in the best interests of Seller and
its stockholders and have approved this Agreement, the Ancillary
Agreements and the Transaction.
D. Buyer and
Seller desire to make certain representations, warranties,
covenants and agreements in connection with the Transaction and to
prescribe various conditions to the Transaction.
Now, Therefore, in consideration of the
foregoing and the mutual promises, covenants and conditions
contained herein, the parties hereby agree as follows:
ARTICLE
1
Certain
Definitions
As used in this Agreement, the following terms
shall have the meanings set forth below.
“ 3/31/09 Financial Statements
” shall have the meaning set forth in the definition of
“Company Financial Statements.”
“ AAA ” shall have the
meaning set forth in Section 8.13 .
“ Affiliate ” means, with
respect to a specified Person, any other Person that directly or
indirectly controls, is controlled by, or is under common control
with, such specified Person.
“ Allocation ” shall have the
meaning set forth in Section 2.5 .
“ Alternate Property ” shall
have the meaning set forth in Section 5.7(f).
“ Ancillary Agreements ”
means, collectively, the Second Addendum, the License Agreement,
the SVB Amendment No. 2, and all other agreements, documents and
certificates required to be executed pursuant to this Agreement
and/or to effect the Transaction.
“ Anti-Bribery Laws ”
means the United States Foreign Corrupt
Practices Act or any other similar laws, statue, rule or regulation
of any country, including, without limitation, any anti bribery and
related prohibitions implemented under the Organization for
Economic Cooperation and Development Convention on Combating
Bribery of Foreign Public Officials in International Business
Transactions, the Organization of American States Inter-American
Convention Against Corruption, Council of Europe Criminal Law
Convention on Corruption, the United Nations Convention Against
Corruption, the African Union Convention on Preventing and
Combating Corruption, applicable to the Company or any of its
Subsidiaries.
“ Applicable Law ” means with
respect to any Person, any foreign, national, federal, state,
local, municipal or other law, statute, constitution, resolution,
ordinance, code, permit, rule, regulation, ruling or requirement
issued, enacted, adopted, promulgated, implemented or otherwise put
into effect by or under the authority of any Governmental Authority
and any orders, writs, injunctions, awards, judgments and decrees
applicable to such Person or its subsidiaries, their business or
any of their respective assets or properties.
“ Balance Sheet Date ” shall
have the meaning set forth in the definition of Company Financial
Statements.
“ Basket Amount ” shall have
the meaning set forth in Section 7.3(c) .
“ BCP Agreement ” means that
certain Contrato de Locacao Financeira Imobiliario #450001065 dated
November 5, 2004, by and between MIPSABG Chipidea, Limitada and
Banco Comercial Portugues, S.A, as amended on May 4, 2007, July 26,
2007 and November 30, 2007.
“ BCP Lease Amendment ” means
that certain amendment to the BCP Agreement in form attached hereto
as Exhibit C.
“ Business ” means the
business of Seller, operating through the Company and its
Subsidiaries, known as the Analog Business Group of Seller, as
presently conducted.
“ Business Day ” means each
day that is not a Saturday, Sunday or other day on which banking
institutions located in San Francisco, California are authorized or
obligated by law or executive order to close.
“ Claim ” shall have the
meaning set forth in Section 7.4 .
“ Claims Period ” shall have
the meaning set forth in Section 7.4(b) .
“ Closing ” shall have the
meaning set forth in Section 2.2 .
“ Closing Balance Sheet ”
shall have the meaning set forth in the definition of
“Company Financial Statements.”
“ Closing Date ” shall have
the meaning set forth in Section 2.2 .
“ Code ” means the Internal
Revenue Code of 1986, as amended.
“ Company Benefit Arrangements
” shall have the meaning set forth in Section 3.15(d)
.
“ Company Closing Cash ”
means the total amount of cash assets of the Company and its
Subsidiaries (including cash in the bank accounts of the Company
and its Subsidiaries) as of the Closing as set forth on the line
item “cash and cash equivalents” on the Closing Balance
Sheet and as calculated in accordance with GAAP. For the
avoidance of doubt, no amount of “restricted cash”
shall constitute Company Closing Cash.
“ Company Financial Statements
” means (a) the unaudited consolidated balance sheet of the
Company and its Subsidiaries as of March 31, 2009 (the “
Balance Sheet Date ”) and the related unaudited
consolidated profit and loss statement for the nine (9) months
ended March 31, 2009 (collectively, the “ 3/31/09
Financial Statements ”); and (b) the unaudited
consolidated balance sheet of the Company and its Subsidiaries as
of the Closing Date (the “ Closing Balance Sheet
”).
“ Company IP Rights ” shall
have the meaning set forth in Section 3.12(a) .
“ Company IP Rights Agreements
” shall have the meaning set forth in Section 3.12(b)
.
“ Company Licensed IP Rights
” shall have the meaning set forth in Section 3.12(a)
.
“ Company Owned IP Rights ”
shall have the meaning set forth in Section 3.12(a)
.
“ Company Product ” shall
have the meaning set forth in Section 3.12(c) .
“ Company Registered IP Rights
” shall have the meaning set forth in Section 3.12(h)
.
“ Company Source Code ” shall
have the meaning set forth in Section 3.12(k) .
“ Contested Claim
” shall have the meaning set forth in Section 7.7(b)
.
“ Continuing Employees ”
shall have the meaning set forth in Section
5.4(b).
“ Contract ” means any
legally binding written, oral or other agreement, contract,
subcontract, lease, understanding, instrument, note, option,
warranty, purchase order, license, sublicense, mortgage, guarantee,
purchase order, insurance policy, benefit plan or commitment or
undertaking of any nature.
“ Damages ” shall have the
meaning set forth in Section 7.2 .
“ Delivered ” means, with
respect to any statement in Article 3 of this Agreement to
the effect that any information, document or other material has
been “delivered” to Buyer or its representatives, that
such information, document or material was: (A)
available for review by Buyer or its representatives in the virtual
data room set up by Seller in connection with this Agreement as of
5:00 p.m. Pacific Time on the date that is no later than one (1)
Business Day prior to the Closing Date; or (B)
“delivered” to Buyer or its representatives in the
manner described in Section 8.8 of this Agreement by 5:00
p.m. Pacific Time on the date that is no later than one (1)
Business Day prior to the Closing Date.
“ Documentation ”
means, collectively, programmers’ notes or
logs, source code annotations, user guides, manuals, instructions,
software architecture designs, layouts, any know-how, and any other
designs, plans, drawings, documentation, materials, supplier lists,
software source code and object code, net lists, photographs,
development tools, blueprints, media, memoranda and records that
are primarily related to or otherwise necessary for the use and
exploitation of any products of the Company or any of its
Subsidiaries, whether in tangible or intangible form, whether owned
by the Company or any of its Subsidiaries or held by the Company or
any of its Subsidiaries under any licenses or sublicenses or
similar grants of rights.
“ Encumbrance ” means, with
respect to any asset, any mortgage, deed of trust, lien, pledge,
hypothecation, charge, security interest, title retention device,
collateral assignment, adverse claim, restriction, infringement,
interference, option, right of first refusal, preemptive right or
other encumbrance or restriction of any kind in respect of such
asset (including any restriction on the voting of any security, any
restriction on the transfer of any security or other asset, any
restriction on the receipt of any income derived from any asset,
any restriction on the use of any asset and any restriction on the
possession, exercise or transfer of any other attribute of
ownership of any asset).
“ End Date ” shall have the
meaning set forth in Section 7.1 .
“ Entity ” means any
corporation (including any non-profit corporation), general
partnership, limited partnership, limited liability partnership,
joint venture, estate, trust, proprietorship, company (including
any company limited by shares, limited liability company or joint
stock company), firm, society, enterprise, association,
organization or other entity.
“ Environment ” shall have
the meaning set forth in Section 3.13(d) .
“ Environmental Law ” shall
have the meaning set forth in Section 3.13(d) .
“ Exchange Act ” means the
U.S. Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated by the SEC thereunder.
“ Existing Policy ” shall
have the meaning set forth in Section 5.8.
“ Final Company Closing Cash
” shall have the meaning set forth in Section 2.6.
“ Former Contractor and Employee
” means each of Annette Brazile, Sergio Kusevitzky, Joyce
Chen, Michael Dong and Peter Chang.
“ French Lease ” means Bail
Commercial (Commercial Lease) by and between NOTAPIERRE represented
by SECURINOT and Chipidea Microelectronica, SA dated February 10,
2007.
“ French Subsidiary ” shall
have the meaning set forth in Section 6.2(d).
“ French Subsidiary Transfer
” shall have the meaning set forth in Section
6.2(d).
“ GAAP ” means United
States generally accepted accounting principles.
“ Governmental Authority ”
means any: (A) nation, state, commonwealth, province,
territory, county, municipality, district or other jurisdiction of
any nature; (B) national, federal, state, local, municipal, foreign
or other government; (C) governmental authority of any nature
(including any governmental division, department, agency,
commission, instrumentality, official, ministry, fund, foundation,
center, organization, unit, body or Entity and any court or other
tribunal); or (D) Entity to whom a Governmental Authority has
assigned or delegated any authority or oversight
responsibilities.
“ Governmental Permits ”
shall have the meaning set forth in Section 3.13(b)
.
“
Income Tax ” means any federal, state, local or
non-U.S. tax based on or measured by reference to net income,
including any interest, penalty or addition thereto, whether
disputed or not.
“ Income Tax Return ” means
any Tax Return relating to Income Taxes.
“ Indemnified Person ” and
“ Indemnified Persons ” shall have the meanings
set forth in Section 7.2 .
“ Intellectual Property ”
means, collectively, all worldwide industrial and intellectual
property rights, including patents, patent applications, patent
rights, trademarks, trademark registrations and applications
therefor, trade dress rights, trade names, service marks, service
mark registrations and applications therefor, Internet domain
names, Internet and World Wide Web URLs or addresses, copyrights,
copyright registrations and applications therefor, mask work
rights, mask work registrations and applications therefor,
franchises, licenses, inventions, trade secrets, know-how, customer
lists, supplier lists, proprietary processes and formulae,
technology, software source code and object code, algorithms, net
lists, architectures, structures, screen displays, photographs,
images, layouts, development tools, designs, blueprints,
specifications, technical drawings (or similar information in
electronic format) and all documentation and media constituting,
describing or relating to the foregoing, including manuals,
programmers’ notes, memoranda and records.
“ J.A.M.S. ” shall have the
meaning set forth in Section 8.13 .
“ Knowledge ”, with respect
to Seller, means the knowledge of Maury Austin, John Bourgoin,
Sandy Creighton, Brad Holtzinger, Gail Shulman Knittel, Cesar
Martin-Perez and Art Swift of a particular fact, circumstance,
event or other matter in question after reasonable inquiry of the
persons employed by Seller, the Company or any of its Subsidiaries
charged with administrative or operational responsibility for the
matter in question.
“ Liabilities ”
means debts, liabilities and obligations,
whether accrued or fixed, absolute or contingent, matured or
unmatured, determined or determinable, known or unknown, including
those arising under any law, action or governmental order and those
arising under any Contract.
“ License Agreement ”
means that certain License Agreement by and
between Buyer and Seller dated as of the Closing Date, attached
hereto as Exhibit D .
“ Material Contract ” shall
have the meaning set forth in Section 3.11 .
“ NDA ” shall have the
meaning set forth in Section 8.12 .
“ Non-Buyer Affiliate Guarantor
” shall have the meaning set forth in Section
5.7(e).
“ Notice of Claim
” shall have the meaning set forth in Section 7.4
.
“ Open Source Materials ”
shall have the meaning set forth in Section 3.12(o)
.
“ Permitted Encumbrances ”
means: (A) statutory liens for Taxes that are not yet
due and payable; (B) statutory liens to secure obligations to
landlords, lessors or renters under leases or rental agreements;
(C) deposits or pledges made in connection with, or to secure
payment of, workers’ compensation, unemployment insurance or
similar programs mandated by Applicable Law; (D) statutory liens in
favor of carriers, warehousemen, mechanics and materialmen, to
secure claims for labor, materials or supplies and other like
liens; and (E) such imperfections of title and encumbrances that do
not materially detract from the value or materially interfere with
the use of the property subject thereto or affected
thereby.
“ Person ” means any
individual, Entity or Governmental Authority.
“ Portugal Employment Litigation
Matter ” means the matter described in item 3 on
Schedule 5.6 .
“ Pre-Closing Tax Period ”
shall have the meaning set forth in Section 5.2(a)
.
“ Pre-Closing Tax Returns ”
shall have the meaning set forth in Section 5.2(b)
.
“ Purchased Interests ” shall
have the meaning set forth in Section 2.1 .
“ Purchase Price ” shall have
the meaning set forth in Section 2.1 .
“ Restricted Business ” shall
have the meaning set forth in Section 5.4(a) .
“
SEC ” means the United States Securities and Exchange
Commission.
“ Second Addendum ” means
that certain Second Addendum to the NDA by and between Seller and
Buyer dated as of the Closing Date, attached hereto as Exhibit
B .
“ Section 5.6 Damages ” shall
have the meaning set forth in Section 5.6.
“ Seller Disclosure Letter ”
shall have the meaning set forth in the preamble to Article
3 .
“ Significant Customer ”
shall have the meaning set forth in Section 3.19(a)
.
“ Significant Supplier ”
shall have the meaning set forth in Section 3.19(b)
.
“ Specified Claim ” means
each of the matters set forth on Schedule 5.6 .
“ Specified Contracts ” means
each of the following Contracts: (i) Business Alliance Agreement by
and among Seller and IIX, Inc. dated November 1, 2003, (ii) IP
License and Design Agreement by and among Seller and Kawasaki
Microelectronics Inc. dated August 31, 2007, (iii) Intellectual
Property License Agreement by and among Seller and Kawasaki
Microelectronics Inc. dated December 20, 2006, (iv) Single Core
License Agreement by and among Seller and NEC Electronics
Corporation dated October 16, 2003, (v) IP License and Design
Agreement by and among Seller and Sharp Corporation dated December
28, 2006, (vi) Basic Development Agreement by and among Seller and
Sharp Corporation dated June 30, 2005, (vii) Design Framework
Agreement by and among Seller and Toshiba Corporation dated August
20, 2000, (viii) IC Design Technology Partnership Agreement by and
among Seller and Toshiba Corporation dated January 25, 2001, (ix)
Design Agreement by and among Seller and IIX, Inc. (formerly Xvein)
dated February 15, 2001, (x) the License and Design Agreement by
and among Seller and Yamaha Corporation dated December 17, 2004,
(xi) IP License and Design Agreement by and among Seller
and Renesas Technology Corp. dated December 11, 2007 and (xii)
Master Technology License Agreement by and between Seller and
Cypress Semiconductor Corporation dated December 16, 2008, in each
case including all schedules, exhibits and statements of work
thereto.
“ Straddle Periods ”
shall have the meaning set forth in Section
5.2(a) .
“ Subsidiary ” means, with
respect to a particular Entity (the “ Parent ”),
a corporation or other business Entity: (A) in which the
Parent owns (directly or indirectly,
beneficially or
of record) at least a 50% equity, beneficial or financial interest;
(B) in which the Parent owns (directly or indirectly, beneficially
or of record) an amount of voting securities of other interests in
such Entity that is sufficient to enable the Parent to elect at
least a majority of the members of such Entity’s board of
directors or other governing body; or (C) that is otherwise,
directly or indirectly, controlled by the Parent.
“ Subsidiary Equity ”
shall have the meaning set forth in Section
3.3(a) .
“ SVB Amendment No. 2 ” shall
have the meaning set forth in the definition of SVB Loan
Documents.
“ SVB Loan Documents ” means
each of the following Contracts: (i) that certain Loan and Security
Agreement by and among Silicon Valley Bank and Seller dated as of
July 3, 2008, as amended by that certain Amendment No. 1 dated as
of December 18, 2008 and as further amended by that certain
Amendment No. 2 dated the date hereof (the “ SVB Amendment
No. 2 ”), (ii) that certain Unconditional Guaranty and
Security Agreement by and among the Company and Silicon Valley Bank
dated as of July 3, 2008, and (iii) that certain Uncertificated
Security Control Agreement by and among Seller, the Company and
Silicon Valley Bank dated as of July 3, 2008.
“ Tax ” (and, with
correlative meaning, “ Taxes ”) means (A) any
net income, alternative or add-on minimum tax, gross income, gross
receipts, sales, use, value added tax, ad valorem, transfer,
franchise, profits, license, withholding, payroll, employment,
excise, severance, stamp, occupation, municipal tax, municipal
surcharge premium, property, environmental or windfall profit tax,
custom duty or other tax, social security contributions,
governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest or any penalty, addition to
tax or additional amount imposed by any governmental entity
responsible for the imposition of any such tax (domestic or
foreign), (B) any liability for the payment of any amounts of the
type described in clause (A) of this sentence as a result of being
a member of an affiliated, consolidated, combined, unitary or
aggregate group for any taxable period, and (C) any liability for
the payment of any amounts of the type described in clause (A) or
(B) of this sentence as a result of being a transferee of or
successor to any Person or as a result of any express or implied
obligation to indemnify any other Person.
“ Tax Authority ” means any
Governmental Authority responsible for the imposition,
administration, assessment, and/or collection of any
Tax.
“ Tax Return ” means any
return, statement, report, tax filing or form (including estimated
Tax returns and reports, withholding Tax returns and reports, any
schedule or
attachment, and
information returns and reports) of the Company or its Subsidiaries
required to be filed with respect to Taxes.
“ Third-Party Claim ” shall
have the meaning set forth in Section 7.4(b) .
“ Third-Party Partners ”
shall have the meaning set forth in Section 3.20(c)
.
“ Third-Party Product Technology
” shall have the meaning set forth in Section 3.12(g)
.
“ Transfer Taxes ” shall have
the meaning set forth in Section 2.3 .
“ Unrelated Liability ” means
any and all of the following: (i) all Liabilities of Seller and its
Affiliates to the extent such Liabilities are unrelated to the
Business (including the Business as presently proposed to be
conducted); (ii) all indebtedness of Seller and its Affiliates for
borrowed money, other than indebtedness of the Company and its
Subsidiaries for borrowed money as set forth on the Closing Balance
Sheet; (iii) all Liabilities for Seller's and its Affiliates'
(including Company's and its Subsidiaries') fees and expenses in
connection with the negotiation and execution of this Agreement and
the consummation of the Transaction, including without limitation,
fees and expenses of attorneys, accountants, investment bankers and
advisors and (iv) all Liabilities arising out of or resulting from
the French Subsidiary or the French Subsidiary Transfer (provided,
that, for the avoidance of doubt, all Liabilities associated with
the French Lease shall not be an Unrelated Liability).
Other capitalized terms defined elsewhere in
this Agreement and not defined in this Article 1 shall have
the meanings assigned to such terms in this Agreement.
ARTICLE
2
The
Transaction
2.1 Purchase
and Sale of Membership Interests and Assets
. At the Closing (as defined below), upon the terms and
subject to the conditions contained herein, (a) Seller will sell,
convey, transfer, assign and deliver to Buyer, and Buyer will
purchase and acquire from Seller, all of Seller’s right,
title and interest in and to all of the issued and outstanding
membership interests in the Company (the “ Purchased
Interests ”), free and clear of all Encumbrances, and (b)
as full and complete consideration for the sale and transfer of the
Purchased Interests, Buyer shall pay (or cause to be paid) to
Seller cash in the amount of $22,000,000 U.S. dollars (the “
Purchase Price ”), paid by wire transfer of
immediately available funds to the bank account
designated in
writing by Seller to Buyer.
2.2 Closing . Subject to
the terms and conditions of this Agreement, the closing of the
Transaction shall take place at the offices of Fenwick & West
LLP, 801 California Street, Mountain View, CA (the “
Closing ”) at 10:00 a.m., local time, concurrently
with the execution and delivery of this Agreement. The
date on which the Closing takes place shall be referred to herein
as the “ Closing Date .”
2.3 Transfer
Taxes . Seller will pay all sales, transfer, stamp,
income, value added Tax, capital gains, use or other Taxes
associated with the purchase, sale or transfer of the Purchased
Interests in accordance herewith (the “ Transfer Taxes
”), and shall promptly reimburse Buyer for any such Transfer
Taxes imposed on Buyer and paid by Buyer.
2.4 Further
Assurances . In case at any time after the Closing
Date, any further action is reasonably necessary to carry out the
purposes of this Agreement or the Ancillary Agreements, each of the
parties hereto shall, at its own expense, execute and deliver such
documents and other papers and take such further actions as may be
required to carry into effect the intents and purposes of this
Agreement (including, without limitation, vesting, perfecting,
confirming or continuing full right, title and interest in all the
Purchased Interests in Buyer). For a period of seven (7)
years after the Closing, Seller shall have reasonable access to the
books and records of the Company and its Subsidiaries to the extent
such books and records are reasonably required and relate to
Pre-Closing Tax Periods by Seller in connection with the
preparation or audit of tax returns or for other reasonable
purposes.
2.5
Allocation . As soon as reasonably practicable
following the Closing Date but in any event within ninety (90) days
following the Closing Date, Buyer shall in good faith allocate the
sum of the Purchase Price plus the Liabilities of the Company as of
the Closing Date (and all other capitalized costs) among the assets
of the Company in accordance with Section 1060 of the Code and
Treasury Regulations promulgated thereunder (and any similar
provision of state, local or foreign law, as appropriate) (the
“ Allocation ”), which Allocation shall be
reasonably acceptable to Seller. Seller shall timely and
properly prepare, execute, file and deliver all such documents,
forms and other information as Buyer may reasonably request to
prepare the Allocation. Any subsequent adjustments to the
Purchase Price shall be reflected in the Allocation in a manner
consistent with Section 1060 of the Code and the regulations
thereunder. Seller and Buyer and their respective
Affiliates shall report, act and file Tax Returns (including, but
not limited to Internal Revenue Service Form 8594) in all respects
and for all purposes consistent with the Allocation, and will not
take any position inconsistent therewith in any Tax Return, in any
refund claim, in any litigation or otherwise, unless required to do
so by a Tax Authority. Seller and Buyer shall each be
responsible for the preparation of its own Section
1060 statements
and forms in accordance with applicable Tax legal requirements, and
each shall execute and deliver to each other such statements and
forms as are reasonably requested by the other party.
2.6 Company
Closing Cash Adjustment . Within thirty (30) days after the
Closing, Buyer and Seller shall cooperate in good faith to
conclusively determine the amount of Company Closing Cash and such
determination shall be final and binding on the parties (the amount
of Company Closing Cash as determined by Buyer and Seller pursuant
to this Section 2.6(a) shall be referred to as the “ Final
Company Closing Cash ”). If the Final Company Closing
Cash exceeds $1,600,000, then Buyer agrees to promptly deliver to
Seller, by check or wire transfer, the amount by which the Final
Company Closing Cash exceeds $1,600,000. If (a) the
Final Company Closing Cash is less than $1,600,000 and (b) at any
time after March 31, 2009 and prior to Closing the Company and/or
any of its Subsidiaries has distributed (by way of dividend or
otherwise) to Seller any amount of the cash assets (including cash
in bank accounts) of the Company and/or any of its Subsidiaries
(such amount in the aggregate, the “ Dividend Amount
”), then Seller agrees to promptly deliver to the Company or
any of its Subsidiaries (or Buyer on behalf of the Company or any
of its Subsidiaries), by check or wire transfer, all or any portion
of the Dividend Amount such that the amount of the Final Company
Closing Cash (after taking into account such Dividend Amount)
equals $1,600,000. For the
avoidance of doubt, the removal of the amount of $113,000 that was
included in “cash and cash equivalents” on the 3/31/09
Financial Statements and that is not included in the Closing
Balance Sheet shall not be deemed to constitute all or any portion
of the Dividend Amount.
2.7 Tax
Consequences . Neither party makes any
representations or warranties to the other parties regarding the
Tax treatment of the Transaction, or any of the Tax consequences to
the other party or to the other party’s stockholders, under
this Agreement or the Transaction. Each party
acknowledges that it is relying solely on its own Tax advisors in
connection with this Agreement and the Transaction.
ARTICLE
3
Representations and
Warranties of Seller
Subject to the exceptions set forth
in a numbered or lettered section of the disclosure letter
delivered by Seller to Buyer, dated as of the Closing Date (the
“ Seller Disclosure Letter ”) referencing a
representation or warranty herein (each of which exceptions, in
order to be effective, shall clearly indicate the section and, if
applicable, the subsection of this Article 3 to which it
relates (unless and to the extent the relevance to other
representations and warranties is readily apparent from the actual
text of the disclosed exception), and each of which exceptions
shall also be deemed to be representations and warranties made by
Seller under this Article 3 ),
Seller
represents and warrants to Buyer as follows:
3.1 Capital
Structure; Title to the Purchased Interests . All of
the issued and outstanding membership interests of the Company
consist solely of the Purchased Interests. Seller is the
legal and beneficial owner of the Purchased Interests, free and
clear of all Encumbrances whatsoever. All of the
Purchased Interests have been duly authorized and validly issued,
are fully paid and nonassessable, were not issued in violation of
and are not subject to any right of rescission, right of first
refusal or preemptive right, and have been offered, issued, sold
and delivered by the Company in compliance with all Applicable Laws
and all requirements set forth in applicable
Contracts. Other than the Purchased Interests, there are
no other equity or ownership interests in the Company, stock
appreciation rights, options, warrants, calls, rights, commitments,
conversion privileges or preemptive or other rights or agreements
outstanding to purchase or otherwise acquire any of the Purchased
Interests or any securities or debt convertible into or
exchangeable for any of the Purchased Interests or obligating the
Company to grant, extend or enter into any such option, warrant,
call, right, commitment, conversion privilege or preemptive or
other right or agreement. There is no Liability for
dividends accrued and unpaid by the Company or any of its
Subsidiaries.
3.2
Organization and Good Standing .
(a) Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware. Seller has the corporate power and authority
to own, operate and lease its properties and to carry on its
business. Seller is not in violation of its Certificate
of Incorporation or Bylaws, each as amended to date.
(b) Each of the Company and its Subsidiaries is an
Entity duly organized, validly existing and in good standing, in
jurisdictions that recognize the concept, under the laws of its
jurisdiction of formation. Each of the Company and its
Subsidiaries has the requisite power and authority to own, operate
and lease its properties and to carry on its respective
business. Each of the Company and its Subsidiaries is
duly qualified or licensed to do business, and is in good standing,
in jurisdictions that recognize the concept, as a foreign Entity in
each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary, except where the failure to
be so qualified and in good standing, individually or in the
aggregate with any such other failures, would not reasonably be
expected to result in material Liability to the Business or the
Company and its Subsidiaries, taken as a whole. Seller
has Delivered to Buyer’s legal counsel true and complete
copies of the currently effective charter documents of each of the
Company and its Subsidiaries, each as amended to
date. None of the Company or any of its Subsidiaries is
in violation of any of its charter documents, each as amended to
date.
(a) Except as
set forth in Schedule 3.3(a) of the Seller Disclosure
Letter, 100% of the outstanding share capital of each of the
Company’s Subsidiaries (the “ Subsidiary Equity
”) is owned, of record and beneficially, by the Company or
one of its wholly owned Subsidiaries, free and clear of all
Encumbrances. Other than the Subsidiary Equity, there
are no other equity or ownership interests in the Company’s
Subsidiaries, stock appreciation rights, options, warrants, calls,
rights, commitments, conversion privileges or preemptive or other
rights or agreements outstanding to purchase or otherwise acquire
any of the Subsidiary Equity or any securities or debt convertible
into or exchangeable for any of the Subsidiary Equity or obligating
the Company to grant, extend or enter into any such option,
warrant, call, right, commitment, conversion privilege or
preemptive or other right or agreement. Except for the
Entities set forth in Schedule 3.3(a) of the Seller
Disclosure Letter, none of the Company or any of its Subsidiaries
has any Subsidiary or any equity or ownership interest (or any
interest convertible or exchangeable or exercisable for, any equity
or ownership interest), whether direct or indirect, in any
Person. None of the Company or any of its Subsidiaries
is obligated to make nor is it bound by any agreement or obligation
to make any investment in or capital contribution in or on behalf
of any other Person. The following former Subsidiaries
of the Company or of its Subsidiaries have been dissolved: Chipidea
Microelectronics (U.S.A.) Corporation and Chipidea UK, and, to the
Knowledge of Seller, neither the Company nor any of its
Subsidiaries has any Liabilities in respect of such previously
dissolved entities. Schedule 3.3(a) of the
Seller Disclosure Letter sets forth (i) a list of the Subsidiaries
of the Company and a list of each Subsidiary of the Company’s
Subsidiaries, including the respective chain of ownership for each
such Subsidiary, the parent company of each such Subsidiary, the
issued and outstanding membership units, shares of capital stock,
or other equity interests for each such Subsidiary and the holders
of such issued and outstanding membership units, shares of capital
stock, or other equity interests; (ii) the names of the
members of the board of directors (or similar body) of each of the
foregoing; and (iii) the names and titles of the officers of each
of the foregoing.
(b) Since August
27, 2007, none of the Company and its Subsidiaries has repaid,
reduced, forfeited or redeemed in any manner its membership units,
shares of capital stock, or other equity interests and there are no
agreements to do so and there are no other arrangements that have
the effect of reducing capital in the Company or any of its
Subsidiaries. Since August 27, 2007, none of the Company and its
Subsidiaries has purchased any of its membership units, shares of
capital stock, or other equity interests or made or resolved to
make any issue of membership units, shares of capital stock, or
other equity interests by way of capitalization of profits or
reserves and there are no agreements to do so.
(c) Schedule
3.3(c) of the Seller Disclosure Letter lists all of the powers
of attorney granted by the Company or any of its Subsidiaries that
are currently in force and such powers of attorney have been
Delivered to Buyer.
3.4 Power,
Authorization and Validity .
(a) Power
and Authority . Seller has all requisite corporate
power and authority to enter into, execute, deliver and perform its
obligations under this Agreement and each of the Ancillary
Agreements to which it is a party and to consummate the
Transaction. The execution, delivery and performance by
Seller of this Agreement, each of the Ancillary Agreements to which
Seller is a party and all other transactions contemplated hereby or
thereby have been duly and validly approved and authorized by all
necessary action on the part of Seller, and no other action on the
part of Seller, Company or any Subsidiary is required in connection
therewith.
(b) No
Consents . No consent, approval, order,
authorization, release or waiver of, or registration, declaration
or filing with, any Governmental Authority, or any other Person
(governmental or otherwise), is necessary or required to be made or
obtained by Seller, the Company or any of its Subsidiaries to
enable Seller to execute and deliver, enter into, and perform its
obligations under this Agreement and each of the Ancillary
Agreements to which it is a party or to consummate the Transaction,
except, as applicable, for the filing by Seller of such reports and
information with the SEC under the Exchange Act as may be required
in connection with this Agreement and the Transaction.
(c)
Enforceability . This Agreement has been duly
executed and delivered by Seller. Assuming the due
authorization, execution and delivery by Buyer, this Agreement and
each of the Ancillary Agreements to which Seller is a party are, or
when executed by the parties shall be, valid and binding
obligations of Seller, enforceable against it in accordance with
their respective terms, subject to the effect of (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to rights of creditors
generally and (ii) rules of law and equity governing specific
performance, injunctive relief and other equitable
remedies.
3.5 No
Conflict . Neither the execution and delivery by
Seller of this Agreement or any of the Ancillary Agreements to
which Seller is a party, nor the consummation of the Transaction by
Seller, conflicts with or violates or results in any violation of
or default under (with or without notice or lapse of time, or both)
or gives rise to a right of termination, cancellation, modification
or acceleration of any obligation or loss of any benefit
under: (a) any provision of the charter documents of
Seller, the Company or any of its Subsidiaries, each as
currently in
effect; (b) any Applicable Law applicable to Seller, the Company or
any of its Subsidiaries or any of their respective assets or
properties; or (c) any Material Contract.
3.6
Litigation . There is no private or governmental
action, suit, arbitration, mediation, proceeding, claim or, to the
Knowledge of Seller, investigation, including but not limited to of
a labor or employment nature, pending or, to the Knowledge of
Seller, overtly threatened in writing against (a) the Company or
any of its Subsidiaries or any of their respective assets or
properties, (b) Seller or any of its Affiliates (other than the
Company and its Subsidiaries) or any of their respective assets or
properties in either case relating to the Business or (c) to the
Knowledge of Seller, any officer, director, employee or agent of
the Company or any of its Subsidiaries in their capacity as such or
relating to their employment, services or relationship with the
Company or any of its Subsidiaries; provided ,
however , that this sentence shall be read without reference
to the words “in writing” in the case of any such
private or governmental action, suit, arbitration, mediation,
proceeding, claim or investigation that is potentially expected to
result in material Liability to the Company or any of its
Subsidiaries. There is no judgment, decree, injunction,
rule or order of any Governmental Authority, arbitrator or mediator
outstanding against the Company or any of its Subsidiaries, or any
of their respective assets or properties (or, to the Knowledge of
Seller, against any officer, director, employee or agent of the
Company or any of its Subsidiaries in their capacity as such or
relating to their employment, services or relationship with the
Company or any of its Subsidiaries). There is no
judgment, decree, injunction, rule or order of any Governmental
Authority, arbitrator or mediator outstanding against Seller or its
Affiliates, or any of their respective assets or properties (or, to
the Knowledge of Seller, against any officer, director, employee or
agent of Seller or its Affiliates in their capacity as such or
relating to their employment, services or relationship with Seller
or its Affiliates) relating to the Business. None of the
Company or any of its Subsidiaries has any action, suit,
arbitration, mediation, proceeding, claim or, to the Knowledge of
Seller, investigation pending against any Governmental Authority or
any other Person. None of Seller or any of its
Affiliates has any action, suit, arbitration, mediation,
proceeding, claim or, to the Knowledge of Seller, investigation
pending against any Governmental Authority or any other Person
relating to the Business.
(a) The Company
and its Subsidiaries (and any consolidated, unitary, or aggregate
group for Tax purposes of which the Company or any of its
Subsidiaries is or has been a member) (i) have timely filed all Tax
Returns that they were required to file since August 27, 2007 and,
to the Knowledge of Seller, have timely filed all Tax Returns that
they were required to file prior to August 27, 2007, and (ii) have
timely paid (or accrued therefor on the Closing Balance Sheet) all
Taxes due and owing therefor whether or not shown on any Tax
Return. All
Tax Returns
filed since August 27, 2007, and to the Knowledge of Seller, all
Tax Returns filed prior to August 27, 2007, were complete and
accurate in all material respects and were prepared in substantial
compliance with Applicable Law. The Company has
Delivered to Buyer correct and complete copies of all filed income,
value added and sales Tax Returns on of after January 1, 2006 in
the jurisdictions of Portugal, Poland, China, Macau and France,
examination reports received by the Company or any of its
Subsidiaries on or after January 1, 2006 and statements of
deficiencies assessed against or agreed to by the Company or any of
its Subsidiaries for taxable periods commencing on or after January
1, 2006 that were received by the Company or any of its
Subsidiaries.
(b) For all
periods through and including the Closing Date, the Company and its
Subsidiaries (i) has complied with all Applicable Law relating to
the payment and withholding of Taxes; and (ii), has, within the
time and in the manner prescribed by law, withheld from employee
wages or consulting compensation and paid over to the proper Tax
Authorities (or is properly holding for such timely payment) all
amounts required to be so withheld and paid over under all
Applicable Law (including income and employment Tax withholding
laws).
(c) There is (i)
no claim for Taxes being asserted against the Company or any of its
Subsidiaries that has resulted in an outstanding lien against the
property of the Company or any of its Subsidiaries other than liens
for Taxes not yet due and payable, (ii) to the Knowledge of Seller,
no unresolved audit of, or unresolved Tax controversy associated
with, any Tax Return of the Company or any of its Subsidiaries
being conducted by any Tax Authority, (iii) no extension or waiver
of any statute of limitations on the assessment of any Taxes
granted by the Company or any of its Subsidiaries with respect to a
period that has not yet expired currently in effect, and (iv) no
agreement to any extension of time for filing any Tax Return that
has not been filed. Since August 27, 2007, no claim has
been made by a Tax Authority in a jurisdiction where the Company or
any of its Subsidiaries does not file Tax Returns that the Company
or any of its Subsidiaries is or may be subject to Tax in that
jurisdiction.
(d) None of the
Company or any of its Subsidiaries is a party to or bound by any
Tax sharing, Tax indemnity or Tax allocation agreement and none of
the Company or any of its Subsidiaries has or will have any
Liability or potential Liability to another party under such
agreement. None of the Company or any of its
Subsidiaries has any liability for the Taxes of any Person (other
than the Company or any of its Subsidiaries) under Applicable Law,
by Contract, as a transferee or successor or otherwise.
(e) None of the
Company or any of its Subsidiaries will be required to include in
income, or exclude any item of deduction from, taxable income for
any taxable period (or
portion
thereof) ending after the Closing Date as a result of any (i)
change made by it prior to the Closing Date in method of accounting
for a taxable period ending on or prior to the Closing Date; (ii)
closing agreement described in Applicable Law executed prior to the
Closing Date; (iii) intercompany transactions or any excess loss
account described in Treasury Regulations §1502 under the Code
(or any corresponding or similar provision of state, local, or
non-U.S. Income Tax law); (iv) installment sale or open transaction
disposition made on or prior to the Closing Date; or (v) prepaid
amount received on or prior to the Closing Date (other than
deferred revenue).
(f) The Company
has Delivered to Buyer all material documentation relating to any
Tax holidays or incentives for which the Company has
applied. Each of the Company and its Subsidiaries is in
compliance with the requirements for any applicable Tax holidays or
incentives and none of the Tax holidays or incentives will be
jeopardized by the Transaction.
(g) None of the
Company or any of its Subsidiaries is a U.S. real property holding
company within the meaning of Section 897(c)(2) of the
Code.
3.8
Financial Statements .
(a) Schedule
3.8(a) of the Seller Disclosure Letter includes the Company
Financial Statements. The Company Financial
Statements: (i) are derived from and are in accordance
with the books and records of the Company and its Subsidiaries; and
(ii) complied as to form in all material respects with applicable
accounting requirements with respect thereto as of their respective
dates.
(b) The 3/31/09
Financial Statements: (i) have been prepared in accordance with
GAAP (except that the 3/31/09 Financial Statements do not contain
footnotes and other presentation items that may be required by GAAP
and are subject to normal and recurring year-end adjustments); and
(ii) fairly present in all material respects the financial
condition of the Company and its Subsidiaries at the dates therein
indicated and the consolidated results of operations of the Company
and its Subsidiaries for the periods therein specified.
(c) The Closing
Balance Sheet: (i) has been prepared in accordance with GAAP
(except that the Closing Balance Sheet does not contain footnotes
and other presentation items that may be required by GAAP and are
subject to normal and recurring year-end adjustments); and (ii)
fairly presents in all material respects the financial condition of
the Company and its Subsidiaries at the dates therein indicated and
the consolidated results of operations of the Company and its
Subsidiaries for the periods therein specified.
(d) Except to
the extent reflected or reserved against in the Closing Balance
Sheet, none of the Company or any of its Subsidiaries has any
Liability (i) of the type required to be disclosed in the
liabilities column of a balance sheet prepared in accordance with
GAAP; or (ii) of which Seller has Knowledge that is of the type
that would be required to be disclosed in the liabilities column of
a balance sheet prepared in accordance with GAAP but which is not
significant, quantifiable or probable enough pursuant to applicable
GAAP standards to be so included on the Closing Balance Sheet (it
being understood that Seller will be deemed to have Knowledge of
all indebtedness for borrowed money of the Company and its
Subsidiaries).
(e) None of the
Company or any of its Subsidiaries has any Liabilities to Seller or
its Affiliates (excluding the Company and its
Subsidiaries).
3.9 Title to
Properties . Each of the Company and its
Subsidiaries has good and marketable title to all of its respective
assets and properties that it purports to own (including those
shown on the Closing Balance Sheet), free and clear of all
Encumbrances other than Permitted Encumbrances. The
assets and properties of the Company and its Subsidiaries
constitute all assets, properties, and rights that are necessary to
enable Buyer to own, conduct, operate and continue the Business
immediately following the Closing without: (i) the need for Buyer
to acquire or license any other asset or property and (ii) breach
or violation of any Contract. All material items of
machinery, vehicles, equipment and other tangible personal property
owned or leased by the Company or any of its Subsidiaries are in
good condition and repair, normal wear and tear
excepted. All leases of real or personal property to
which the Company or any of its Subsidiaries is a party are
effective and afford the Company and its Subsidiaries valid
leasehold possession of the real or personal property that is the
subject of the lease. None of the Company or any of its
Subsidiaries owns any real property. Notwithstanding the
foregoing, the representations in this Section 3.9 do not
apply to Intellectual Property, which is covered by the
representations in Section 3.12 .
3.10 Absence
of Certain Changes . Since the Balance Sheet Date,
the Company and its Subsidiaries have operated the Business in the
ordinary course consistent with its past practices, and since such
date there has not been, with respect to the Business, the Company
or any of its Subsidiaries, any:
(a) incurrence,
creation or assumption of (i) any Encumbrance on any of its assets
or properties (other than Permitted Encumbrances), (ii) any
indebtedness for borrowed money, or (iii) any Liability as a
guarantor or surety with respect to the obligations of
others;
(b) purchase,
license, sale, grant, assignment or other disposition or transfer,
or any agreement or other arrangement for the purchase, license,
sale, assignment or other
disposition or
transfer, of any of its material assets (including Company IP
Rights (as defined in Section 3.12(a) )), properties or
goodwill other than the sale or nonexclusive license of its
products or services to its customers in the ordinary course of its
business consistent with its past practices;
(c) declaration,
setting aside or payment of any dividend on, or other distribution
(whether in cash, stock or property) in respect of, any
securities;
(d) damage,
destruction or loss of any material property or material asset,
whether or not covered by insurance;
(e) change with
respect to its management, supervisory or other key personnel, any
increases in or modification of the compensation or benefits
payable or to become payable to such individuals, any termination
of employment of a material number of employees, or any labor
dispute or claim of unfair labor practices;
(f) deferral of
the payment of any accounts payable other than in the ordinary
course of business, consistent with past practices, or in an amount
in excess of EUR 10,000, or any discount, accommodation or other
concession made other than in the ordinary course of business,
consistent with past practices, in order to accelerate or induce
the collection of any receivable;
(g) except as
required by GAAP (with respect to the Company) or applicable
accounting standards (with respect to the Company’s
Subsidiaries), change in accounting methods or practices (including
any change in depreciation or amortization policies or rates or
revenue recognition policies) by the Company or any of its
Subsidiaries or revaluation by the Company of any of its or any of
its Subsidiaries’ assets; or
(h) any entry
into any Contract to do any of the things described in the
preceding clauses (a) through (g) (other than as they relate to the
proposed sale of the Purchased Interests).
3.11
Contracts, Agreements, Arrangements, Commitments and
Undertakings . Schedules 3.11(a)-(o) of
the Seller Disclosure Letter set forth a list of each of the
following Contracts to which the Company or any of its Subsidiaries
is a party as of the Closing Date or by which the Company or any of
its Subsidiaries or any of their respective assets or properties is
bound as of the Closing Date (each a “ Material
Contract ”):
(a) any Contract
providing for payments by or to it after the Closing Date in an
aggregate amount in excess of EUR 100,000 (excluding any such
Contract that is required to be disclosed pursuant to another
subsection of this Section 3.11 );
(b) any dealer,
distributor, OEM (original equipment manufacturer), VAR (value
added reseller), sales representative or similar Contract under
which any third party is authorized to sell, sublicense, lease,
distribute, market or take orders for any of its products, services
or technology;
(c) any Contract
providing for the development of any software, content, technology
or intellectual property for (or for the benefit or use of) it, or
providing for the purchase by or license to (or for the benefit or
use of) it of any software, content, technology or intellectual
property, which software, content, technology or intellectual
property is in any manner used or incorporated (or is contemplated
by it to be used or incorporated) in connection with any aspect or
element of any product, service or technology of it (other than
software generally available to the public at a per copy license
fee of less than EUR 1,000 per copy);
(d) any joint
venture or partnership Contract that has involved, or is reasonably
expected to involve, a sharing of revenues, profits, cash flows,
expenses or losses with any other party or a payment of royalties
to any other party;
(e) any Contract
for or relating to the employment by it of any director, officer,
employee or consultant or any other type of Contract with any of
its officers, employees or consultants that is not immediately
terminable by it without cost or other Liability, including any
contract requiring it to make a payment to any director, officer,
employee or consultant on account of the Transaction (other than,
in the case of employees outside the United States, any employment
Contract, offer letter or similar agreement that does not provide
for employment for an indefinite period or any severance or similar
payment in excess of amounts required by Applicable
Law);
(f) any
indenture, mortgage, trust deed, promissory note, loan agreement,
security agreement, guarantee or other Contract for or with respect
to the borrowing of money, a line of credit, any currency exchange,
commodities or other hedging arrangement, or a leasing transaction
of a type required to be capitalized in accordance with
GAAP;
(g) any lease or
other Contract under which it is lessee of real property owned by
any third party;
(h) any Contract
or judgment, injunction, order or decree that (i) restricts it from
engaging in any aspect of the Business, (ii) restricts it from
engaging, participating or competing in any line of business,
market or geographic area, (iii) restricts it from freely setting
prices for its products, services or technologies (including most
favored customer pricing provisions), (iv) restricts it from
soliciting potential employees, consultants, contractors or other
suppliers or customers, or (v) that grants any exclusive rights,
rights of refusal, rights of first negotiation or similar rights to
any party;
(i) any Company
IP Rights Agreement (as defined in Section 3.12(b)
);
(j) any Contract
with any labor union, works council or any collective bargaining
agreement or similar Contract with its employees;
(k) any Contract
of guarantee, indemnification or assumption of the Liabilities of
any other Person;
(l) any Contract
entered into after August 27, 2007 providing for indemnification by
it with respect to Company Products or services without a
limitation to liability;
(m) any Contract
(i) in which its officers, directors, employees or stockholders or
any member of their immediate families is interested (whether as a
party or otherwise), (ii) with Seller or another Subsidiary of
Seller, or (iii) with any other Person with whom it does not deal
at arm’s length;
(n) any Contract
pursuant to which it has acquired a business or entity, or
substantially all of the assets of a business or entity, whether by
way of merger, consolidation, purchase of stock, purchase of
assets, license or otherwise since inception; or
(o) any Contract
with any Governmental Authority or grant with a Governmental
Authority.
A true and complete copy of each
Material Contract has been Delivered to Buyer. All
Material Contracts are in written form. Each of the
Company and its Subsidiaries has performed all of the material
obligations required to be performed by it under each Material
Contract. Each Material Contract is in full force and
effect. There exists no default or event, occurrence,
condition or act with respect to the Company or any of its
Subsidiaries or, to the Knowledge of Seller, with respect to any
other contracting party, which, with the giving of notice, the
lapse of time or the happening of any other event or conditions,
would reasonably be expected to (1) become a default under any
Material Contract or (2) give any third party (i) the right to
declare a
default or
exercise any remedy under any Material Contract, (ii) the right to
a rebate, chargeback, refund, credit, penalty or change in
performance schedule under any Material Contract, (iii) the right
to accelerate the maturity or performance of any obligation of the
Company or any of its Subsidiaries under any Material Contract, or
(iv) the right to cancel, terminate or modify any Material
Contract. None of Seller, the Company or any of its
Subsidiaries has received any written notice or other communication
regarding any actual or possible violation or breach of or default
under, or intention to cancel or modify, any Material
Contract. None of the Company or any of its Subsidiaries
is a party to any distributor, representative or similar
contract.
3.12
Intellectual Property.
(a) The Company
and/or its Subsidiaries (1) owns all Company Owned IP Rights and
(2) has the valid right or license to use, and, to the extent that
it does any of the following, to develop, make, have made, offer
for sale, sell, import, copy, modify, create derivative works of,
distribute, license, and dispose of all other Intellectual Property
used in the conduct of the Business (such Intellectual Property
being hereinafter collectively referred to as the “
Company IP Rights ”). Such Company IP
Rights are sufficient for the conduct of the
Business. The Company has not transferred, assigned,
exclusively licensed or otherwise conveyed to any Subsidiary,
Affiliate or third party, any of the Company IP Rights necessary
for the conduct of the Business. As used in this
Agreement, “ Company Owned IP Rights ” means
Company IP Rights that are or are purportedly owned by the Company
or any of its Subsidiaries; and “ Company Licensed IP
Rights ” means Company IP Rights that are not Company
Owned IP Rights. For the avoidance of doubt, Company IP
Rights includes both Company Licensed IP Rights and Company Owned
IP Rights.
(b) Neither the
execution, Delivery and performance of this Agreement or Ancillary
Agreements to which Seller is a party nor the consummation of the
Transaction by Seller and the other transactions contemplated by
the Ancillary Agreements will: (i) constitute a material
breach of or default under any instrument, license or other
Contract governing any Company IP Right (collectively, the “
Company IP Rights Agreements ”); (ii) cause the
forfeiture or termination of, or give rise to a right of forfeiture
or termination of, any Company IP Right; or (iii) materially impair
the right of the Company or any of its Subsidiaries or Buyer to
use, develop, make, have made, offer for sale, sell, import, copy,
modify, create derivative works of, distribute, license,
