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Submission Parts
| 1 |
SEC Form |
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SCHEDULE 13D - AMENDMENT NO. 7 |
| 2 |
SEC Form |
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EXHIBIT 9 |
| 3 |
SEC Form |
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EXHIBIT 10 |
SCHEDULE 13D - AMENDMENT NO. 7
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 7)
SILICONIX INCORPORATED
(Name of Issuer)
Common Stock, par value $0.01 per share
(Title of Class of Securities)
827079 10 4
(CUSIP Number)
Mr. Timotheus R. Pohl Mr. Frank D. Maier
Daimler-Benz Technology TEMIC TELEFUNKEN
Corporation microelectronic GmbH
375 Park Avenue Theresienstrasse 2
Suite 3001 74072 Heilbronn
New York, New York 10152 Federal Republic of Germany
(212) 909-9700 011-49-7131-67-0
with a copy to:
J. Michael Schell
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
(212) 735-3000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 11, 1997/December 16, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a Statement on
Schedule 13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this Statement because of Rule 13d-1(b)(3)
or (4), check the following box: [ ]
Check the following box if a fee is being paid with the
statement: [ ]
This Amendment No. 7 amends and supplements the
statement on Schedule 13D (the "Schedule 13D") of
Daimler-Benz Technology Corporation, a New York
corporation ("DBTC"), and TEMIC TELEFUNKEN
microelectronic GmbH, a limited liability company
incorporated under the laws of the Federal Republic of
Germany ("TEMIC"), filed with the Commission on November
14, 1988, as amended by Amendment No. 1 to the Schedule
13D filed with the Commission on January 6, 1989, as
amended by Amendment No. 2 to the Schedule 13D filed with
the Commission on March 30, 1990, as amended by Amendment
No. 3 to the Schedule 13D filed with the Commission on
May 15, 1990, as amended by Amendment No. 4 to the
Schedule 13D filed with the Commission on July 24, 1990,
as amended by Amendment No. 5 to the Schedule 13D filed
with the Commission on January 4, 1991, as amended and
restated by Amendment No. 6 to the Schedule 13D filed
with the Commission on December 8, 1997, relating to the
common stock, par value $0.01 per share, of Siliconix
incorporated, a Delaware corporation (the "Company").
Unless otherwise indicated, all capitalized terms used
but not defined herein shall have the meaning as set
forth in the Schedule 13D.
Item 4. Purpose of Transaction.
Item 4 of the Schedule 13D is hereby amended
and supplemented by adding the following:
On December 11, 1997, the designees of TEMIC on
the Board of Directors of the Company participated in a
meeting of such Board of Directors at which the Board
passed certain resolutions concerning a possible sale of
the DB Companies' ownership interest in the Company,
consisting of 8,010,000 shares of Company Common Stock
(the "Shares"), in connection with a sale by the DB
Companies of the semiconductor activities of the Daimler-
Benz group which are presently concentrated in TEMIC
Semiconductor GmbH, a newly formed subsidiary of TEMIC,
and certain other affiliates of the DB Companies,
including the Company. The resolutions are filed as
Exhibit 9 to this Amendment No. 7 and are incorporated
herein by reference.
On December 16, 1997, TEMIC, acting for itself
and also on behalf of Delengate Limited and Daimler-Benz
Aerospace Aktiengesellschaft, and DBTC entered into a
stock purchase agreement with Vishay TEMIC Semiconductor
Acquisition Holdings Corp. ("Vishay Acquisition"),
"PAMELA" Verwaltungsgesellschaft mbH ("Pamela") and
Vishay Intertechnology, Inc. as guarantor, providing,
among other things, for the sale to Pamela of TEMIC's
ownership interest in TEMIC Semiconductor GmbH and the
sale to Vishay Acquisition of the Shares (the "Stock
Purchase Agreement"). The closing of the transactions
is conditioned upon obtaining necessary antitrust approvals,
among other things. The Stock Purchase Agreement is
attached hereto as Exhibit 10 and is incorporated herein
by reference.
At the closing of the transactions contemplated
by the Stock Purchase Agreement, DBTC will be obligated
to deliver the resignations as of the Effective Time (as
defined in the Stock Purchase Agreement) of three of the
Company's current directors. In addition, TEMIC and DBTC
have agreed to cause, effective as of the Effective Time,
up to three nominees selected by Vishay Acquisition to
fill the vacancies created by such resignations.
Item 6. Contracts, Arrangements, Understandings or
relationships with Respect to Securities of the
Issuer.
Item 6 of the Schedule 13D is hereby amended
and supplemented by adding the following:
Reference is made to Item 4 and to Exhibit 10
referred to therein which is hereby incorporated herein
by reference.
Item 7. Materials to be Filed as Exhibits.
Exhibit 9 -- Resolutions concerning a possible
sale of the DB Companies' ownership
interest in the Company, adopted
December 11, 1997 by the Board of
Directors of the Company.
Exhibit 10 -- Stock Purchase Agreement, dated
December 16, 1997, among TEMIC
TELEFUNKEN microelectronic GmbH,
acting for itself and also on behalf
of Delengate Limited and Daimler-Benz
Aerospace Aktiengesellschaft,
Daimler-Benz Technology Corporation,
Vishay TEMIC Semiconductor
Acquisition Holdings Corp. and
"PAMELA" Verwaltungsgesellschaft mbH
and Vishay Intertechnology, Inc., as
guarantor.
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
Dated: December 18, 1997
DAIMLER-BENZ TECHNOLOGY CORPORATION
By: /s/ Timotheus Pohl
_______________________________
Name: Timotheus R. Pohl
Title: President
By: /s/ HS Traison
_______________________________
Name: H.S. Traison
Title: Treasurer/Secretary
TEMIC TELEFUNKEN MICROELECTRONIC GMBH
By: /s/ Muehlbayer
________________________________
Name: Dr. Michael Muehlbayer
Title: Executive Vice President, CFO
By: /s/ Staiger
_______________________________
Name: Hans-Ulrich Staiger
Title: Executive Vice President, HR
Exhibit Index
Exhibits filed
herewith
Exhibit 9 -- Resolutions concerning a possible sale of
the DB Companies' ownership interest in the
Company, adopted December 11, 1997 by the
Board of Directors of the Company.
Exhibit 10 -- Stock Purchase Agreement, dated December
16, 1997, among TEMIC TELEFUNKEN
microelectronic GmbH, acting for itself and
also on behalf of Delengate Limited and
Daimler-Benz Aerospace Aktiengesellschaft,
Daimler-Benz Technology Corporation, Vishay
TEMIC Semiconductor Acquisition Holdings
Corp. and "PAMELA" Verwaltungsgesellschaft
mbH and Vishay Intertechnology, Inc., as
guarantor.
EXHIBIT 9
Exhibit 9
The following resolutions were adopted at a
meeting of the Board of Directors of Siliconix
incorporated on December 11, 1997:
RESOLVED, that the sale, assignment and transfer
of the Shares, whether directly or indirectly as a result
of a transfer effected in the Dispositon, to any person or
entity affiliated with the purchaser in the Disposition
be, and it hereby is, approved in all respects and for all
purposes under the General Corporation Law of the State of
Delaware (the "DGCL");
RESOLVED, that, without limiting the generality
of the immediately preceding resolution, any person or
entity who or which becomes an "interested stockholder" of
the Corporation by reason of the Disposition shall be
doing so in a transaction resulting in the person or
entity becoming an interested stockholder which
transaction be, and it hereby is, approved by this Board
of Directors as contemplated and required by paragraph
(a)(1) of Section 203 of the DGCL so as to eliminate any
restriction on a subsequent business combination involving
the Corporation and such person or entity or any affiliate
thereof;
RESOLVED, that the proper officers of this
Corporation be, and each of them hereby is, authorized and
directed, in the name and on behalf of the Corporation, to
execute and deliver any and all certificates, agreements
and other documents and to take any and all steps and do
any and all things which they may deem necessary or
advisable in order to effectuate the purposes of the
foregoing resolutions; and
RESOLVED, that all actions taken by such
officers on or prior to the date of adoption of the
foregoing resolutions that are within the authority
conferred hereby are hereby ratified, confirmed, approved
and adopted as the acts and deeds of this Corporation.
EXHIBIT 10
EXHIBIT 10
No. 161 of Registry of Deeds for 1997
Frankfurt am Main, this December 16, 1997
Before me the undersigned Notary in the District of the Court of
Appeals Frankfurt am Main
RALPH KASTNER
with the official residence in Frankfurt am Main appeared today, in the
offices of Boesebeck Droste, Darmstadter Landstrasse 125, 60598
Frankfurt am Main, where I had rendered myself at the request of the
parties, with the request for notarization of the following Stock
Purchase Agreement on the
ACQUISITION
OF THE
TEMIC SEMICONDUCTOR BUSINESS
1. Mr. Christian Boucke
Place of business: Epplestr. 225
D-70567 Stuttgart
identified by valid identification card
according to his declaration acting not for himself but for
a) TEMIC TELEFUNKEN MICROELECTRONIC GMBH
Theresienstrasse 2, 74072 Heilbronn
(AG Heilbronn, HRB 2698)
(hereinafter referred to as the "GERMAN SELLER" or "TTMG")
based on the notarially certified Power of Attorney, which is
provided with a certification of authority
(Vertretungsbestatigung), the original of which was presented
and a certified copy of which is attached hereto as EXHIBIT A,
the German Seller itself acting herein, as further specified
hereinafter, for
(i) itself,
(ii) DELENGATE LIMITED
c/o Reynolds Porter Chamberlain
Chichester House
278/282 High Holborn
London WCIV 7HA, Great Britain
(hereinafter referred to as "DELENGATE LTD.")
based on the notarially certified Power of Attorney, which
is provided with a certification of authority
(Vertretungsbestatigung), the original of which was
presented and a certified copy of which is attached hereto
as EXHIBIT B,
(iii) DAIMLER-BENZ AEROSPACE AKTIENGESELLSCHAFT
Willy-Messerschmitt-Strasse, TOR 1
85521 Ottobrunn
(hereinafter referred to as "DASA")
based on the notarially certified Power of Attorney, which
is provided with a certification of authority
(Vertretungsbestatigung), the original of which was
presented and a certified copy of which is attached hereto
as EXHIBIT C;
b) DAIMLER- BENZ TECHNOLOGY CORPORATION 375 Park Avenue, Suite
3001 New York, N.Y. 10152, U.S.A.
(hereinafter referred to as the "U.S. SELLER" or "DBTC")
based on the notarially certified Power of Attorney, which is
provided with a certification of authority
(Vertretungsbestatigung), the original of which was presented
and of which a certified copy is attached hereto as EXHIBIT D;
the U.S.-Seller and the German Seller
are hereinafter collectively referred to as the "SELLERS"
or individually as a "SELLER");
2. Dr. Harald Jung place of business: Niedenau 68 60325 Frankfurt am
Main
personally known to me
according to his declaration acting not for himself but for
a) Vishay TEMIC Semiconductor Acquisition Holdings Corp.
63 Lincoln Highway
Malvern, PA 19355, U.S.A
a Delaware corporation
(hereinafter referred to as the "U.S.PURCHASER")
based on the notarially certified Power of Attorney, which is
provided with a certification of authority
(Vertretungsbestatigung), the original of which was presented
and of which a certified copy is attached hereto as EXHIBIT E;
b) "PAMELA" Verwaltungsgesellschaft mbH Niedenau 68 60325
Frankfurt am Main (AG Frankfurt, HRB 44156)
(hereinafter referred to as the "GERMAN PURCHASER")
based on the notarially certified Power of Attorney, which is
provided with a certification of authority
(Vertretungsbestatigung), the original of which was presented
and of which a certified copy is attached hereto as EXHIBIT F;
the U.S.-Purchaser and the German Purchaser
are hereinafter collectively referred to as the "PURCHASERS"
or individually as a "PURCHASER");
c) Vishay Intertechnology, Inc. 63 Lincoln Highway Malvern, PA
19355, U.S.A.
(hereinafter referred to as the "GUARANTOR")
based on the notarially certified Power of Attorney, which is
provided with a certification of authority
(Vertretungsbestatigung), the original of which was presented
and of which a certified copy is attached hereto as EXHIBIT G.
The deponents requested that this deed should be recorded in the English
language and declared that they are in sufficient command of the English
language. The Notary himself is in sufficient command of the English
language. Advised by the Notary of their rights to the assistance of a
sworn interpreter and receipt of a certified translation of this deed,
the deponents waived such rights.
The deponents first declared that they approve all declarations made by
Dr. Hanns Arno Magold and by Dr. Britta Zierau in the Notarial Deed No.
160/1997 of the acting Notary of December 15/16, 1997 (the "Reference
Deed") which except Exhibits A-G and Exhibit 21 contains all Schedules,
Annexes and Exhibits mentioned herein, and the appearing persons declared
that they have full knowledge of the contents of the Reference Deed and
that they waive their rights to have the Reference Deed read out again
and attached to this deed. The original execution copy of the Reference
Deed was available for inspection throughout the notarial negotiation and
therefore the parties agreed to fully incorporate it into the present
notarial deed by way of reference pursuant to Sect. 13 a
Beurkundungsgesetz (German Notarisation Act).
The appearing parties declared:
1.
TEMIC SEMICONDUCTOR BUSINESS, CORPORATE STRUCTURE
(1) The German Seller is the sole shareholder of
TEMIC SEMICONDUCTOR GMBH
Theresienstrasse 2, 74072 Heilbronn
(AG Heilbronn, HRB 6427)
("TS GMBH")
which has a stated capital of DM 80,000,000, represented by one
capital interest in the nominal amount of DM 50,000 and one capital
interest in the nominal amount of DM 79,950,000 (collectively, the
"GERMAN COMMON STOCK"); TS GmbH was established by the German Seller
by notarial deed of August 14, 1997 (No. 475 of Registry of Deeds of
Notary Gunther Hausler, Heilbronn) and was registered in the
Commercial Register at the Municipal Court Heilbronn on September
18, 1997. The German Seller's assets and liabilities pertaining to
its semiconductor business were transferred to TS GmbH, effective as
of October 1, 1997, by way of a drop down (Ausgliederung) pursuant
to ss. 123 (3) No. 1 of the German Transformation Act
(Umwandlungsgesetz), by virtue of the notarial deed of November 12,
1997 (No. 686/97 of Registry of Deeds of Notary Gunther Hausler,
Heilbronn); the notarial deed with its Annexes is fully known to the
Purchaser. The drop down was notified to the Commercial Register at
the Municipal Court Heilbronn on November 12, 1997.
(2) TS GmbH, directly or indirectly, owns the shares, capital interests
and other equity participations as set forth on SCHEDULE 1.2,
subject to the qualifications contained therein. TS GmbH and its
Subsidiaries (as defined hereinafter) are hereinafter collectively
referred to as the "GERMAN GROUP".
(3) The U.S. Seller is the majority shareholder in
SILICONIX INCORPORATED, a Delaware corporation
2201 Laurelwood Road
Santa Clara, CA 95056-0951, U.S.A.
("SILICONIX INC.")
which has a share capital of USD 99,596.80, divided into 9,959,680
outstanding shares of common stock of USD 0.01 each, with 8,010,000
shares of common stock (= approximately 80.4 %) being owned by the
U.S. Seller; the shares of Siliconix Inc. are listed and traded on
the National Association of Securities Dealers Automated Quotation
System (NASDAQ) National Market System under the symbol "SILI".
(4) Siliconix Inc., directly or indirectly, owns the shares, capital
interests or other equity participations as set forth on Schedule
1.2. Siliconix Inc. and its Subsidiaries (as defined hereinafter)
are hereinafter collectively referred to as the "U.S. GROUP".
(5) Siliconix Inc. and TS GmbH (hereinafter collectively referred to as
the "TARGET COMPANIES") do not own, directly or indirectly, or have
voting rights with respect to, or have agreements to acquire (except
as set forth on Schedule 6a.2) any capital stock or other equity
securities of any corporate entity or have direct or indirect equity
or ownership interests in any business, except for the companies
listed on Schedule 1.2 which companies, if directly or indirectly
controlled (as defined in ss. 16 German Stock Corporation Act -
Aktiengesetz) by either of the Target Companies, are hereinafter
collectively referred to as the "SUBSIDIARIES" or individually as a
"SUBSIDIARY".
(6) The German Common Stock is owned by the German Seller. The German
Common Stock was duly and validly issued and has been fully paid or,
to the extent the capital interest was issued in consideration of a
contribution in kind, such contribution has been validly made and
the capital interest has not been wholly or partially repaid to the
holder thereof and is non-assessable (keine Nachschusspflicht).
There are no outstanding options, warrants, calls, rights or other
agreements or commitments of any character to acquire or dispose of
any of the German Common Stock or any outstanding securities
convertible into any capital interests of TS GmbH. There are no
voting agreements or understandings that require or permit any of
the German Common Stock to be voted by anyone other than the owner
thereof. There are no outstanding obligations of TS GmbH to
repurchase, redeem or otherwise acquire any of its outstanding
capital interests. The German Seller has good title to the German
Common Stock, free and clear of any lien and any other charge,
claim, encumbrance, limitation or restriction (including any
restriction on the right to vote, sell or otherwise dispose of such
capital interest/stock) ("ENCUMBRANCES"), except for those created
by the Purchaser and except for limitations or restrictions set
forth in the articles of TS GmbH or imposed by applicable laws or
regulations.
(7) The authorized capital stock of Siliconix Inc. consists of
10,000,000 shares of common stock, par value USD 0.01 per share (the
"SILICONIX COMMON STOCK").of which 9,959,680 shares are issued and
outstanding and 8,010,000 shares of such issued and outstanding
shares (approximately 80.4%) are owned beneficially and of record by
the U.S. Seller (the "U.S. SHARES"). All the U.S. Shares are duly
and validly issued, fully paid and non-assessable and free of
preemptive rights. Except as set forth above or as otherwise
contemplated by this Agreement, there are no shares of capital stock
of Siliconix Inc. issued or outstanding, or any outstanding
subscriptions, options, warrants, calls, rights, convertible
securities or other agreements or commitments of any character
obligating Siliconix Inc. or the U.S. Seller, respectively, to
issue, transfer or sell any of the U.S. Shares or to make any
payments in respect of any of the U.S. Shares. Except as set forth
on Schedule 1.2, there are no voting trust or other agreements or
understandings to which the U.S. Seller is a party or is bound with
respect to the voting of the U.S. Shares. There are no outstanding
obligations of Siliconix Inc. to repurchase, redeem or otherwise
acquire any of the Siliconix Common Stock. The U.S. Seller has good
title to the U.S. Shares, free and clear of any Encumbrances, except
for (i) those created by the Purchaser or (ii) restrictions imposed
by applicable law or regulations other than tax liens or
restrictions imposed by the U.S. Uniform Commercial Code or similar
laws in other jurisdictions.
(8) Except as disclosed on Schedule 1.2, all of the outstanding shares
of the capital stock of, or other ownership interests in, each of
the Target Companies' Subsidiaries, have been duly and validly
issued, are (in the case of shares of capital stock) fully paid and
non-assessable, have not (in the case of capital interests in a
limited liability company organized under the laws of the Federal
Republic of Germany) been wholly or partially repaid or been issued
in consideration of contributions in kind which were not validly
made, are (in the case of partnership interests) not subject to
current or future capital calls, and are owned by one of the Target
Companies, directly or indirectly, free and clear of any
Encumbrances except for those created by the Purchaser and except
for limitations or restrictions set forth in the partnership
agreement, the articles or the bylaws of such Subsidiary or imposed
by applicable laws or regulations other than tax liens or
restrictions imposed by the U.S. Uniform Commercial Code or similar
laws in other jurisdictions. Except as set forth on Schedule 1.2 or
as otherwise contemplated by this Agreement, there are no
outstanding subscriptions, options, warrants, calls, rights,
convertible securities or other agreements or commitments of any
character relating to the issued or unissued capital stock or other
securities of any Subsidiary which is directly or indirectly wholly
owned by a Target Company, obligating any such Subsidiary to issue,
transfer or sell any such securities or to make any payments in
respect of any such Subsidiary's securities or its equity.
(9) The Target Companies and the Subsidiaries are engaged in the
business of designing, marketing and manufacturing discrete devices
and integrated circuits and in the business of designing, marketing
and manufacturing power and analog semiconductor products, which
businesses comprise substantially the same assets, liabilities and
operations as the assets, liabilities and operations of the "TEMIC
Semiconductor" business as it was previously conducted and offered
to the Purchasers and which formed the basis of the Pro Forma
Balance Sheet (as defined hereinafter) and will be further reflected
in the Final Balance Sheet (collectively referred to hereinafter as
the "BUSINESS").
(10) The transfers pursuant to Sections 2 and 3 are made with commercial
effect as of the end of the calendar day (24:00 hrs. local time at
the principal place of business of the respective Target Company) on
which the Effective Time (as hereinafter defined) falls (the time of
such transfer is hereinafter referred to as the "TRANSFER DATE").
2.
SALE AND TRANSFER OF THE GERMAN COMMON STOCK
(1) The German Seller hereby sells to the German Purchaser, and hereby
transfers to the German Purchaser, effective as of the Transfer
Date, the German Common Stock with all rights and obligations
pertaining thereto for the past and for the future, and with the
right to receive the dividends resulting from (i) the profits
realized in the time from the Transfer Date on and (ii) profits of
TS GmbH (such as retained earnings) shown in the Final Balance Sheet
(as defined hereinafter).
(2) The transfer is subject to the condition precedent that the
Preliminary Purchase Price including interest thereon, if any, for
all transfers contemplated by this Agreement be paid in full
(Section 9 (1)).
(3) The German Purchaser hereby accepts such sale and transfer.
(4) The notice to TS GmbH of the share transfer pursuant to ss. 16 (1)
of the German Limited Liability Company Act will be given jointly by
the German Seller and the German Purchaser immediately after the
Effective Time.
3.
SALE OF THE U.S. SHARES
(1) The U.S. Seller hereby sells to the U.S. Purchaser the U.S.
Shares.
(2) The U.S. Seller agrees to transfer and deliver to the U.S. Purchaser
the U.S. Shares at the Closing (as hereinafter defined) and the
Purchaser agrees to accept the transfer and delivery of such U.S.
Shares at that time.
(3) The transfer shall be effective as of the Transfer Date; prior
thereto the U.S. Purchaser shall not be entitled to exercise any
rights arising out of or in connection with the U.S. Shares.
4.
CLOSING
(1) Pursuant to the terms of this Agreement, the closing of the
transactions contemplated by this Agreement shall take place
simultaneously in Frankfurt am Main in the law offices of Boesebeck
Droste, Darmstadter Landstrasse 125, at 2 p.m. local time and in
New York, New York in the law offices of Skadden, Arps, Meagher &
Flom LLP, 919 Third Avenue, at 8 a.m. local time, (the "CLOSING"),
on the date specified in subcl. (2) below, following the later of
the following events to occur:
a) Issuance of all required antitrust or merger control approvals
or expiration or termination of all waiting periods relating
thereto, including any extensions thereof, that are applicable
to the transfers contemplated in this Agreement under
(i) Title II of the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (hereinafter the "HSR ACT") and
the rules and regulations thereunder,
(ii) the German Antitrust Act (Gesetz gegen
Wettbewerbs-beschrankungen), as amended (hereinafter the
"GERMAN GWB"), and
b) issuance of approval under ss. 3 of the German Currency Act
(Wahrungsgesetz), the application therefor to be filed by the
Purchaser pursuant to Section 19 (1);
c) issuance of approval by the Supervisory Board of Daimler
Benz AG;
d) complete satisfaction of all conditions to Closing set forth in
Section 5 of this Agreement or waiver of the satisfaction of
such conditions.
(2) The Closing pursuant to subcl. (1) above shall take place on such of
the dates set forth below which immediately follows the fifth
"BUSINESS DAY" (a day on which commercial banks in Frankfurt,
Germany, and New York, New York, are open for business) from the
date when the last of the events set forth in subcl. (1) has
occurred:
February 21, 1998, or
March 28, 1998, or
April 25, 1998, or
May 23, 1998, or
June 27, 1998, or
such other later date which is a date of internal financial
reporting within the Business.
a) By mutual agreement of the parties hereto, the Closing may take
place at another place or at another time.
b) The date and time at which the Closing actually takes place and
thus the time at which the transfers contemplated by this
Agreement actually occur or become effective shall be referred
to as the "EFFECTIVE TIME" in this Agreement.
(3) At the Closing, the U.S. Seller shall deliver the following to the
U.S. Purchaser:
a) the stock certificates for the U.S. Shares, along with stock
powers, duly endorsed in blank or together with duly issued
transfer certificates;
b) the resignations as of the Effective Time of the members of the
Board of Directors of Siliconix Inc. and of its Subsidiaries
identified on SCHEDULE 4.3B;
c) a certified copy of the certificate of incorporation of and a
good standing certificate for Siliconix Inc., and all other
documents (including incumbency certificates) required to be
delivered by the U.S. Seller to the U.S. Purchaser at or before
the Closing under the provisions of this Agreement (to the
extent not previously delivered) or as may otherwise be
required in connection herewith.
Effective as of the Effective Time, the Sellers will cause up to
three nominees selected by the U.S. Purchaser to fill the vacancies
created by the resignations of the members of the Board of Directors
of Siliconix Inc. identified on Schedule 4.3b.
(4) At the Closing, the German Seller shall deliver the following to the
German Purchaser:
The resignations as of the Effective Time of the members of the
Board of Directors of TS GmbH and its Subsidiaries identified on
SCHEDULE 4.4.
(5) At the Closing, the Purchasers shall
a) have put TS GmbH and Siliconix Inc. into the financial
position to settle a negative balance on the intercompany
accounts ("IC ACCOUNTS") with Daimler Benz AG or the
affiliate of Daimler Benz AG concerned herewith (hereinafter
collectively referred to as "DAIMLER BENZ"), and deliver to
the Sellers (on behalf of Daimler Benz) the irrevocable
payment announcements by TS GmbH's bank and by Siliconix
Inc.'s bank, pursuant to Section 17 (4), unless the
procedure described in subcl. c) applies;
b) deliver to the Sellers the Assignment and Assumption Agreements
pursuant to Section 17 (2), validly executed by all parties
thereto, except Daimler Benz, or, to the extent that is
impossible, deliver bank guarantees and other collateral
pursuant to Section 17 (3) and
c) pay to the Sellers the Preliminary Purchase Price and the
amount of the DB-Indebtedness (as defined in Section 9 (7))
and deliver to the Sellers all other documents (including
incumbency certificates), required to be delivered by the
Purchasers to the Sellers at or prior to the Closing under
the provisions of this Agreement (to the extent not
previously delivered) or as may otherwise be required in
connection therewith.
(6) The Closing shall be recorded in a Closing Memorandum.
5.
CONDITIONS TO CLOSING
(1) The obligations of the Sellers and the Purchasers to consummate the
transactions and actions contemplated by Section 4 of this Agreement
are subject to the satisfaction of the following conditions, at or
prior to Closing, or to the extent permissible, the waiver by all
parties to this Agreement of the fulfilment of these conditions:
a) None of the Sellers, the Purchasers or the Target Companies
shall be subject to any order, decree or injunction issued
by any court of competent jurisdiction which prevents or
delays any of the transactions contemplated by this
0 Agreement, and no action, suit or proceeding before any
court or any governmental or regulatory authority shall be
pending against any of the Sellers, the Purchasers or
Siliconix Inc. challenging the validity or legality of the
transactions contemplated by this Agreement.
b) To the extent required by applicable law in connection with the
transactions contemplated by this Agreement, each of the
Sellers and the Purchasers and any other persons (as defined in
the HSR Act) who may have an obligation in this context
(i) shall have filed a Notification and Report Form for
Certain Mergers and Acquisitions under the HSR Act with
the Antitrust Division of the United States Department of
Justice (hereinafter the "DEPARTMENT OF JUSTICE") and with
the United States Federal Trade Commission (hereinafter
the "FTC");
(ii) shall have filed a notification of the planned merger
with the German Federal Cartel Office
(Bundeskartellamt); and
(iii)shall have filed a notification on Form K2 of the
transactions contemplated hereunder with the Swedish
Competition Authority,
and any antitrust or merger control approvals required to be
obtained from these administrative authorities shall have been
obtained, and all applicable waiting periods for each of those
procedures (including any possible extensions) shall have
expired or terminated or shall have been waived or terminated
by the relevant administrative authority.
(2) The obligations of the Sellers to consummate the legal transactions
and actions contemplated by this Agreement are further subject to
the satisfaction of the following conditions at or prior to the
Effective Time, or, to the extent permissible, the waiver by the
Sellers of the satisfaction of these conditions:
The Purchasers shall have complied in all material respects with all
obligations contained in this Agreement to be complied with by them
at or prior to the Effective Time.
(3) The Purchaser's obligation to consummate the legal transactions and
actions contemplated by Section 4 of this Agreement is subject to
the satisfaction of the following conditions at or prior to the
Effective Time, or, to the extent permissible, the waiver by the
Purchaser of the satisfaction of these conditions:
a) The Sellers shall have complied in all material respects with
all obligations contained in this Agreement to be complied with
by them at or prior to the Effective Time.
b) The Purchasers shall have received certificates, dated the
day of the Closing, executed as set forth below, identifying
any material matters or events which occurred between the
date of this Agreement and the Effective Time and which, to
the knowledge (as further described in Section 14 (11)) of
the issuer of such certificate, would make any of the
representations or warranties contained herein untrue or
incorrect in a more than insignificant respect if such
representation or warranty were made as of the Effective
Time. Such Certificates shall be issued
- by Mr. Maier and Dr. Muhlbayer in respect of TS GmbH
and its Subsidiaries;
- by Mr. Apprich for MHS and its subsidiaries;
- by Mr. Pudelko for Dialogue Ltd. and its subsidiaries;
- by Mr. Biehn for Siliconix Inc. and its Subsidiaries;
- by Mr. Facundo for TSP Inc.
6.
CHANGE OF CONTROL AGREEMENTS
(1) Some of the contracts and agreements of the Target Companies and the
Subsidiaries contain clauses that give rise to a right of
termination, cancellation or acceleration in the event that the
direct or indirect control of the relevant Target Company or
Subsidiary should change. Except for loan agreements and other
financing arrangements, to the knowledge of the Sellers, all
material change of control agreements of the Target Companies and
the Subsidiaries, including but not limited to agreements with
licensors and with customers and clients, are listed on SCHEDULE 6.1
(together with any such agreements not listed on Schedule 6.1, the
"Change of Control Agreements").
(2) Except as otherwise provided in this Section 6, the Sellers do not
warrant, and any warranty is expressly excluded, that the respective
other party or parties to the Change of Control Agreements will not
assert a termination right, renegotiation right or similar right as
a result of the execution and performance of this Agreement; this
limitation of warranty also applies to any statutory termination or
similar rights in the event of a change of control.
(3) Notwithstanding subcl. (2) above, the Sellers shall use their best
endeavours, prior to and after the Closing, to assist the Purchasers
in their efforts to afford the Purchasers the benefits of the
continuation of the Change of Control Agreements from and after the
Effective Time, despite the sale and transfer of the German Common
Stock and the U.S. Shares to the German Purchaser and the U.S.
Purchaser, respectively.
(4) The Sellers and the Purchasers agree that TS GmbH will exercise its
call option, to be exercised on or before December 31, 1997, to
acquire from SOGEMAT Participation S.A. the remaining outstanding
shares of MATRA MHS S.A., France ("MHS") which TS GmbH does not
already own, so that TS GmbH will be the sole shareholder in MHS.
The Purchasers are aware that, as a result, MHS and its relevant
subsidiaries will be obligated to change their respective firm names
so as to delete the name "MATRA" therefrom and to cease using the
term, logo and mark "MATRA" in any and all respects.
(5) The Purchasers are further aware that a sale and transfer of the
German Common Stock as contemplated hereby may give rise to an
obligation of MHS to repay to the French Government (Ministry of
Industry) up to approx. FF 417,000,000 in grants and subsidies
previously received by MHS and its subsidiaries (the "SUBSIDY").
a) The Sellers and the Purchasers think that they may be able
to persuade the French Government not to exercise or to
waive its claim, if any, for repayment, in part or in full,
of the Subsidy, provided that the Purchasers and/or MHS give
certain assurances to the French Government that they plan
to maintain the location Nantes as the place of business of
MHS and maintain a certain level of employment at that
location. Purchasers agree that such assurances will be
given by MHS and/or its direct or indirect shareholders if
and to the extent commercially reasonable. Any such
assurances, if given by a Target Company or a Subsidiary
prior to or after the Transfer Date, shall not be reflected
on, or if required to be reflected on a corporate balance
sheet, deemed to be eliminated from, the Final Balance
Sheet.
b) If and to the extent, as a result of the best efforts of
Purchasers, including giving the assurances pursuant to
subcl. a) above, the French Government agrees not to demand
repayment of the Subsidy or actually abstains from demanding
repayment, the Sellers shall have no liability with respect
thereto. However, if the French Government demands repayment
of the Subsidy, in full or in part, after it has already
agreed, as a result of joint efforts of the Sellers and the
Purchasers and the assurances, not to demand repayment, or
initially actually abstained from demanding repayment when
due, this applies as well unless the Purchasers can show
that the change in the position initially taken by the
French Government is not the direct or indirect result of
actions or omissions of either of the Purchasers, the
Guarantor, any assignee of either of the Purchasers, or any
of the Target Companies or Subsidiaries.
c) If and to the extent that, despite the joint best efforts of
Purchasers and Sellers and any assurances given pursuant to
subcl. a) above, the French Government has not agreed to
refrain from claiming repayment of the Subsidy in full or in
part, and has not abstained from claiming such repayment,
the Sellers and the Purchasers shall agree on sharing the
costs to the Purchasers of such actual repayment to the
French Government. In establishing the amount of costs to be
shared between the Sellers and the Purchasers, starting from
the amount or amounts of actual repayment, the principles
set forth or referred to in Section 14 (5) (including tax
effects) shall be applied. The agreed amount of costs shall
be borne 80 % by the Sellers and 20 % by the Purchasers.
6A.
PHILIPPINES COMPANY
(1) The German Seller is the owner of all of the issued and outstanding
capital stock of TEMIC TELEFUNKEN microelectronic Philippines Inc.,
Manila ("PHILIPPINES OLD INC."). The business of Philippines old
Inc. includes, inter alia, semiconductor activities which are part
of the Business and which are included in the Pro Forma Balance
Sheet (as defined below) and will be included in the Transfer
Balance Sheet (as defined below).
(2) As described in more detail on Schedule 6A.2, the semiconductor
business of Philippines old Inc. is presently being transferred
(drop down) to a newly established wholly owned subsidiary of
Philippines old Inc. ("TSP INC."). It is contemplated that
Philippines old Inc. will sell all shares in TSP Inc. (the "TSP
SHARES") to TS GmbH, with commercial effect as of the Transfer Date,
for a purchase price of DM 15 million, pursuant to a share transfer
agreement which will provide for a closing of such sale no sooner
than two Business Days after the Effective Time and no later than
four Business Days after the drop down has been registered in the
applicable public register. The shares of Philippines old Inc.
remain with the German Seller.
(3) The Sellers and the Purchasers hereby agree that Philippines old
Inc. shall sell and transfer the TSP Shares to TS GmbH as described
in subcl. (2) above and that TSP Inc. shall be deemed to be a
"Subsidiary" for all purposes of this Agreement, including, but not
limited to, the preparation of the Transfer Balance Sheet, as if TSP
Inc. were a wholly owned subsidiary of the German Target Company as
of the date of this Agreement.
6B.
DIALOGUE
(1) The following summary is for information purposes only and shall not
be deemed a representation or warranty:
a) Daimler Benz Aerospace Aktiengesellschaft ("DASA"), formerly
known as Messerschmitt-Bolkow-Blohm AG - "MBB" -, and
thereafter as Deutsche Aerospace Aktiengesellschaft, a
subsidiary of Daimler Benz AG, through its nominee,
Delengate Ltd., is a member of Dialogue Semiconductors
Limited ("DIALOGUE LTD.") with 1,088,255 shares (approx.
92.63% of 1,174,817 shares issued and outstanding) (the
"DASA SHARES"). The remaining 86,562 shares in Dialogue Ltd.
are held by Ericsson Radio Systems AB ("ERICSSON"). Dialogue
Ltd. is the sole shareholder of Dialog Semiconductor GmbH
which in turn is the sole shareholder of Dialog
Semiconductor Ltd. (see Schedule 1.2 for further details).
DASA and the German Seller, which are under common control
of Daimler Benz AG, have treated the DASA Shares as if the
German Seller were the beneficial owner thereof. The
business of Dialogue Ltd. and its direct and indirect
subsidiaries is part of the Business and has been included
in the Pro Forma Balance Sheet.
b) The Articles of Association of Dialogue Ltd., the
Shareholders' Agreement in respect of Dialogue Ltd. and the
Share Sale Agreement among Delengate Ltd., MBB and Ericsson
dated 8th October 1990 contain various put and call options
and restrictions on the sale and transfer of the shares of
Dialogue Ltd.. Pursuant to Article 7 of the Articles of
Association, Delengate Ltd. and DASA are not entitled to
transfer the DASA Shares in Dialogue Ltd. without first
offering them to the other shareholders at a specified price
(the "OFFER"). The other shareholders have thirty days
within which to accept such offer (the "ACCEPTANCE PERIOD");
the Offer can be accepted only in its entirety (and not only
in respect of a portion of the offered shares). If the Offer
is not accepted by the other shareholders within the
Acceptance Period, DASA/Delengate Ltd. may, within a period
of ninety days after the expiration of the Acceptance
Period, transfer the DASA Shares to any purchaser at a price
which may not be less than the price specified in the Offer.
Further details are set forth in the Articles of Association
of Dialogue Ltd. Previous contacts between the German
Seller/DASA and Ericsson with respect to reaching an
understanding and agreement regarding their respective
shareholder positions have not been successful.
Consequently, Delengate Ltd./DASA must first offer the DASA
Shares to the other shareholders, unless prior thereto, the
Sellers (on behalf of DASA) and the Purchasers can jointly
persuade Ericsson to enter into an agreement as described
below.
(2) Therefore, the Sellers, Delengate Ltd. and DASA on the one side and
the Purchasers on the other side, agree as follows:
a) Immediately following the date of this Agreement, the German
Seller (on behalf of DASA) and the Purchasers will jointly
contact Ericsson in order to persuade Ericsson to:
(i) waive the Offer requirement and abstain from exercising
put options and all other similar rights Ericsson may
have in respect of shares in Dialogue Ltd. until after
the later of (x) the Closing and (y) the closing
pursuant to subcl. b) bb), in which case Ericsson will
remain a shareholder in Dialogue Ltd. and DASA will
transfer the DASA Shares to TS GmbH, as further set
forth in subcls. b) bb), cc), d) below, or
(ii) purchase the DASA Shares from DASA at a purchase price to
be approved by the Purchasers, in which case the DASA
Shares shall not be sold by DASA to TS, with the
consequences set forth in subcl. c) below, or
(iii)sell its shares in Dialogue Ltd. to TS GmbH and waive the
Offer requirement and abstain from exercising any put
options and all other similar rights Ericsson may have in
respect of the shares in Dialogue Ltd. until after the
later of (x) the Closing and (y) the closing pursuant to
subcl. b) bb), in which case DASA will transfer the DASA
Shares to TS GmbH as further set forth in subcls. b) bb),
cc), d) below. It is understood that the sale by Ericsson
of its shares in Dialogue Ltd. directly to TS GmbH shall
not affect the terms and conditions of this Agreement and
shall be deemed a transaction independent from the
transactions contemplated by this Agreement. If Ericsson
agrees to sell shares in Dialogue Ltd. to TS GmbH, any
effect of such sale on the Transfer Balance Sheet shall,
for purposes of this Agreement, be eliminated from the
Transfer Balance Sheet or not be included therein for
purposes of preparing the Final Balance Sheet and
determining the Final Purchase Price.
b) Contemporaneously with contacting Ericsson pursuant to subcl.
a) above, the following shall occur:
aa) Promptly after January 25, 1998, DASA/Delengate Ltd.
will offer the sale of the DASA Shares to Ericsson at a
purchase price in an amount to be notified by the
Purchasers to the Sellers no later than January 22,
1998, absent such timely notification in the amount of
DM 20 million (the "Offer Price"), pursuant to and as
required by Article 7 of the Articles of Association of
Dialogue Ltd. and other applicable requirements.
bb) Promptly after January 29, 1998, DASA/Delengate Ltd.
will enter into an agreement with TS GmbH for the sale
and transfer of the DASA Shares to TS GmbH, with
commercial effect as of the Transfer Date, at a price
being DM 0,5 million higher than the Offer Price which
sale and transfer shall be conditioned upon Ericsson
not accepting the offer made to it pursuant to subcl.
aa) above. This condition shall not be contained in a
sale and transfer agreement of the DASA Shares pursuant
to subcl. a) (i) above. The closing of the sale of the
DASA Shares to TS GmbH shall take place as soon as
possible after it has become certain that the DASA
Shares may be transferred to TS GmbH.
cc) The German Seller hereby waives any beneficial rights and
interest it may have in the DASA Shares, with effect as of
the Transfer Date, provided that (i) Ericsson does not
accept the offer made to it pursuant to subcl. aa), and
(ii) the DASA Shares are sold and transferred to TS GmbH.
c) If the offer pursuant to subcl. b) aa) above is accepted by
Ericsson or the DASA Shares are sold by DASA/Delengate to
Ericsson, the following shall apply:
aa) The Sellers and the Purchasers agree that the aggregate
purchase price allocable to Dialogue Ltd. and its
direct and indirect subsidiaries, for purposes of
determining the Preliminary Purchase Price and the
Final Purchase Price, shall be as set forth in subcl.
b) bb) above or, as agreed between DASA and Ericsson
pursuant to subcl. a) (ii) respectively (the "DIALOGUE
PURCHASE PRICE"). If the DASA Shares are not sold and
transferred to TS GmbH as contemplated above, the Final
Purchase Price and, if possible, already the
Preliminary Purchase Price due to the German Seller
shall be reduced by the amount of the Dialogue Purchase
Price.
bb) The representations and warranties and all other
provisions contained in this Agreement shall not apply
to Dialogue Ltd. and its direct and indirect
subsidiaries.
d) If the Dasa Shares are sold and transferred to TS GmbH
pursuant to subcl. b) aa) or subcl. a) (i) above, the
following shall apply:
aa) For all purposes of this Agreement the DASA Shares and
the business of Dialogue Ltd. and its direct and
indirect subsidiaries shall be included in this
Agreement for all purposes, including, but not limited
to, the preparation of the Transfer Balance Sheet, as
if Dialogue Ltd. had been a wholly owned direct
subsidiary of TS GmbH already on the date of this
Agreement.
bb) The Preliminary Purchase Price and the Final Purchase
Price contain the amount of the Dialogue Purchase Price
pursuant to subcl. b) bb) above. It is hereby agreed
between the Sellers and DASA on the one side and the
Purchasers on the other side that any payment
obligation of TS GmbH resulting from the sale and
transfer to it of the DASA Shares shall be deemed
satisfied by payment of the Purchasers of the Final
Purchase Price hereunder. Upon payment of the Final
Purchase Price by the Purchasers, the German Seller
shall hold TS GmbH harmless from any claim by DASA for
the Dialogue Purchase Price. The internal handling and
settling between the German Seller and DASA is a matter
between them and will be handled between them outside
this Agreement; the same shall apply to the
relationship between the Purchasers and TS GmbH.
7.
PURCHASE PRICE
(1) Based on subcl. (2) below, the preliminary purchase price
- for the German Common Stock is DM 184,900,000 (= 31.92%);
- for the U.S. Shares is DM 394,400,000 (=68.08 %)
(collectively, the "PRELIMINARY PURCHASE PRICE") which has been
computed as follows:
Preliminary Purchase Price: DM 579,300,000
+ (plus) Net Financial Indebtedness:
(as defined in subcl. (4) below) DM 298,700,000
resulting in a base price for the
debt free Business of DM 878,000,000
(in writing: Deutsche Mark eight hundred seventy eight million).
The amount of the Preliminary Purchase Price shall be subject to the
adjustments provided for in this Agreement in order to arrive at the
Final Purchase Price.
(2) The Preliminary Purchase Price has been agreed on the basis of the
pro forma balance sheet of the Business as of January 1, 1997, a
copy of which is attached hereto as EXHIBIT 7.2 (the "PRO FORMA
BALANCE SHEET"). Decisive for the final purchase price payable by
the Purchaser to the Sellers shall be a consolidated balance sheet
(special consolidation report) for the Business to be prepared as of
the Transfer Date pursuant to the provisions of Section 8 below (the
"FINAL BALANCE SHEET"). If the Final Balance Sheet were identical
with the Pro Forma Balance Sheet, the Final Purchase Price would be
equal to the Preliminary Purchase Price.
(3) In order to reflect changes from the Pro Forma Balance Sheet to the
Final Balance Sheet and to arrive at the Final Purchase Price (as
defined in subcl. (8) of this Section 7), the following adjustments
shall be made to the amount of the Preliminary Purchase Price:
The amount of the Preliminary Purchase Price
a) shall be reduced/increased by any reduction/increase in fixed
assets;
b) shall be reduced/increased by any reduction/increase in net
working capital;
c) shall be reduced/increased by any increase/reduction in
provisions;
d) shall be reduced/increased by any increase/reduction in net
financial indebtedness;
provided, however, that in no event shall the Final Purchase Price
be more than 115 % of the Preliminary Purchase Price.
(4) For purposes of subcls. (1) and (3), the following definitions
shall apply:
a) Fixed Assets:
+ Investments and Long-term Receivables 25.9
+ Property Plant and Equipment 499.7
+ Intangible Assets 38.0
-----
Total: 563.6
b) Net Working Capital:
+ Accounts Receivable Trade 265.5
+ Total Inventories 240.0
+ Current Deferred Income Taxes
incl. Tax Receivables 17.1
+ Other Current Assets short-term 59.4
+ Other Current Assets long-term 4.5
+ Deferred Income Taxes incl. Tax Receivables 12.9
- Accounts and Notes Payable Trade (124.7)
- Other Current Liabilities (93.6)
-----
Total: 381.1
c) Provisions:
+ Pension Liabilities 93.5
+ Other Provisions 107.0
+ Provisions for Income Taxes 10.0
-----
Total: 210.5
d) Net Financial Indebtedness:
+ Financial Liabilities to Banks 197.1
+ Financial Liabilities to Daimler Benz AG 163.8
+ Other Financial Liabilities 6.4
- Cash and Cash Equivalents (68.6)
- Marketable Securities (0,0)
- Financing Receivables (0,0)
-----
Total: 298.7
all as are shown in the Pro Forma Balance Sheet and as will be shown
in the Final Balance Sheet. In preparing the Final Balance Sheet,
the foregoing terms shall have the same meaning and be employed the
same way as they were defined and employed in preparing the Pro
Forma Balance Sheet (as set forth in Section 8 (1), below). The
numbers shown in this subcl. (4) are in millions of DM and are for
purposes of reference to the positions contained in the Pro Forma
Balance Sheet.
(5) The Final Purchase Price shall be apportioned between the German
Common Stock and the U.S. Shares based on the same percentages as
set forth in subcl. (1) above in respect of the Preliminary Purchase
Price.
(6) Payment of the Preliminary Purchase Price and of any additional
payment or repayment, as the case may be, of the difference between
the Preliminary Purchase Price and the Final Purchase Price shall be
made in U.S. dollars as provided in Section 9 (6) below.
(7) The Final Purchase Price shall bear interest at the rate of 4.5 %
p.a. from and including the Transfer Date to and including the
date(s) of payment, if different.
(8) The final purchase price payable by Purchasers to Sellers shall be
the amount resulting from the reductions/increases pursuant to
subcl. (3) above and the adjustment, if any, pursuant to subcl.
(9), below (the "FINAL PURCHASE PRICE").
(9) If the Transfer Date is February 21, 1998, the purchase price
resulting from the reductions/increases pursuant to subcl. (3) above
shall be increased by the Adjustment Amount.
a) The Adjustment Amount shall be the difference between (i) the
amount of the 1997 Reference Purchase Price and (ii) the final
purchase price based on the Final Balance Sheet (as of February
21, 1998) prior to the adjustment pursuant to this subcl. (9),
if the 1997 Reference Purchase Price is the higher amount. In
no event, however, shall the Adjustment Amount exceed DM 14
million.
b) The 1997 Reference Purchase Price is the amount which would be
the final purchase price if the Final Balance Sheet were
prepared as of December 31, 1997. Therefore, the Sellers and
the Purchasers agree that a final balance sheet as of December
31, 1997 will be prepared and examined and provided with the
special consolidation report according to the same terms and
conditions set forth in this agreement in respect of the Final
Balance Sheet; the provisions of Section 8 shall apply mutatis
mutandis. The Sellers and the Purchasers may mutually waive the
requirement of a special consolidation report by way of
agreeing in writing on the amount of the1997 Reference Purchase
Price.
8.
PRO FORMA BALANCE SHEET, TRANSFER BALANCE SHEET,
FINAL BALANCE SHEET
(1) The Pro Forma Balance Sheet comprises the Business as of January 1,
1997. Details on its preparation are set forth on Schedule 8.1.
(2) The Sellers and the Purchasers agree that for purposes of
determining the Final Purchase Price a transfer balance sheet shall
be prepared as follows:
a) Prior to preparing the consolidated balance sheet pursuant to
subcl. b) individual balance sheets as of the Transfer Date for
each of the Target Companies and the Subsidiaries shall be
prepared by the Target Companies and the Subsidiaries and
audited by their respective current auditors, all in accordance
with the rules and principles set forth in Schedule 8.1 (the
"INDIVIDUAL TRANSFER BALANCE SHEETS"). The Individual Transfer
Balance Sheets shall be available no later than the date which
is four weeks after the Transfer Date,
b) a consolidated balance sheet for the Target Companies and the
Subsidiaries as of the Transfer Date shall be prepared as soon
as possible thereafter as a special consolidation report,
according to the rules and principles set forth on Schedule
8.1, and
c) the consolidated balance sheet shall be examined and provided
with an unrestricted confirmation remark as to its compliance
with the applicable accounting rules and principles set forth
on Schedule 8.1, by TS GmbH's auditor, KPMG Deutsche
Treuhandgesellschaft mbH, Frankfurt/ Berlin ("TS GMBH'S
AUDITORS"), and
d) the special consolidation report with the confirmation by TS
GmbH's Auditors pursuant to subcl. b) above ("TRANSFER BALANCE
SHEET") shall be presented to the Purchasers and the Sellers,
as promptly as reasonably practicable following the Transfer
Date.
It is expected that the Transfer Balance Sheet together with
the Individual Transfer Balance Sheets will be presented to
the Sellers and the Purchasers simultaneously and no later
than the date which is three months after the Transfer Date.
e) Since the preparation and confirmation of the Transfer Balance
Sheet will not have been completed by the date of the Effective
Time, the Purchasers shall, and shall cause the Target
Companies and the Subsidiaries, to cooperate fully with the
Sellers and Sellers' Auditors (as defined below) in the
preparation of the Transfer Balance Sheet, such cooperation to
include, without limiting the generality of the foregoing, full
access to the books and records of the Target Companies and the
Subsidiaries for such purpose. This shall also apply to work to
be performed by Sellers' Auditors in connection with subcl. (3)
and subcl. (4).
(3) Upon receipt of the Transfer Balance Sheet, the Purchasers and their
independent certified public accountants, Ernst & Young LLP (the
"PURCHASERS' AUDITORS"), and the Sellers and their independent
certified public accountants C&L Treuarbeit Deutsche Revision AG,
Munchen (the "SELLERS' AUDITORS") shall have the right during the
succeeding 30-day period (the "THIRTY-DAY Period"), which is
non-extendible, to audit the Transfer Balance Sheet and to examine
and review all work papers and, to the extent reasonably necessary
to evaluate the Transfer Balance Sheet, other records and supporting
documents used to prepare such Transfer Balance Sheet; provided,
however, that Purchasers' Auditors and Sellers' Auditors shall have
executed, prior to any such audit, an audit access letter in
substantially the form attached hereto as SCHEDULE 8.3. The scope of
the audit by the Purchasers' Auditors and by the Sellers' Auditors
shall be strictly in accordance with these provisions and not with
other provisions or rules which may be based on a different
regulatory intent (i.e. Section 15, below).
a) The Purchasers shall notify the Sellers in writing and the
Sellers shall notify the Purchasers in writing, on or before
the last day of the Thirty-day Period, of any good faith
objections to the Transfer Balance Sheet, setting forth a
reasonably specific description of the Purchasers' objections
and the DM-amount of each objection.
b) If the Purchasers or the Sellers do not deliver such
notification within the Thirty-day Period, the Transfer Balance
Sheet shall be deemed to have been accepted by the Purchasers
and by the Sellers.
c) If the Purchasers or the Sellers in good faith object to the
Transfer Balance Sheet, the Sellers' Auditors and the
Purchasers' Auditors shall attempt to resolve in good faith any
such objections within 15 days of the expiration of the
Thirty-day Period. Any such resolution shall be conclusive and
binding on the Purchasers and the Sellers and shall be made
applying the principles set forth and referred to on Schedule
8.1.
d) If the Sellers' Auditors and the Purchasers' Auditors are
unable to resolve the matter within such 15-day period, then
Price Waterhouse GmbH as arbitrator (Schiedsgutachter) shall
make the decision on any remaining good faith objections with
final and binding effect on the Sellers and the Purchasers.
Price Waterhouse shall also decide, pursuant to ss.ss.91 et
seq. of the German Code of Civil Procedure, which party shall
bear the costs of this arbitration, including, without
limitation, Price Waterhouse' fees. The Sellers and the
Purchasers shall (and shall cause the Target Companies to)
provide Price Waterhouse with full cooperation. Price
Waterhouse shall be instructed to reach its conclusion
regarding the dispute preferably within 30 days of its
appointment. Any resolution by Price Waterhouse shall be
conclusive and binding on the Purchasers and the Sellers and
shall be made applying the principles set forth and referred to
on Schedule 8.1. The Transfer Balance Sheet after the
acceptance thereof by the Purchasers and the Sellers or the
resolution of all disputes in connection therewith is referred
to herein as the "FINAL BALANCE SHEET".
e) The Transfer Balance Sheet, when being presented to the
Purchasers and the Sellers, shall be accompanied by a statement
of computation by TS GmbH's Auditors of what the amount of the
Final Purchase Price (including the Adjustment Amount pursuant
to Section 7 (9), if applicable) would be if the Transfer
Balance Sheet were the Final Balance Sheet. An objection made
pursuant to subcl. a), above, shall be accompanied by a
statement of computation by each of the Purchasers' Auditors
and the Sellers' Auditors, as the case may be, of what the
Final Purchase Price would be if the Purchasers' or the
Sellers' objections to the Transfer Balance Sheet, as the case
may be, were accurate.
(4) In preparing the Transfer Balance Sheet pursuant to subcl. (2),
above, and in its adjudication (including examination by the
Purchaser's Auditors and the Sellers' Auditors) pursuant to subcl.
(3), above, the knowledge which existed at the time of preparing the
Individual Transfer Balance Sheets of the Target Companies and the
Subsidiaries shall be applied in the context of applying accounting
rules and making valuations.
9.
PAYMENT
(1) Payment of the Preliminary Purchase Price shall be made at the
Closing by the Purchasers to each of the Sellers by wire transfer of
immediately available funds in the amounts set forth in Section 7
(1)
- to the German Seller:
to Daimler-Benz AG (in favor of TEMIC TELEFUNKEN
microelectronic GmbH, Heilbronn), Citibank in Frankfurt am
Main, USD-Account No. 120 87 67 018, via Citibank New York
- to the U.S. Seller:
to Daimler-Benz North America Corp. (in favor of
Daimler-Benz Technology Corp., New York) Chase Manhattan
Bank in New York, N.Y., ABA No. 021 000 021, Account No. 910
246 57 63.
(2) Additional payment or repayment of the difference between the
Preliminary Purchase Price and the Final Purchase Price shall be
made by the Purchasers and apportioned amongst the Sellers, or made
by the Sellers to the Purchasers, based on the percentages set forth
in Section 7 (1) to the Purchasers, together with interest thereon
at the rate and for the time specified in Section 7 (7), within ten
calendar days from the date of the Final Balance Sheet.
(3) Before the Final Balance Sheet is established, additional payment or
repayment shall be made of the undisputed amount, if any, of an
increase or decrease of the Preliminary Purchase Price, together
with interest thereon at the rate and for the time specified in
Section 7 (7), within ten calendar days from the date when it became
apparent that there is an undisputed amount. This subcl. (3) may
apply more than once. Payments made under this subcl. (3) shall be
taken into account when making payments pursuant to subcl. (2).
(4) 3 % over and above the discount rate of the German Federal Reserve
Bank prevailing from time to time is hereby agreed to be the
interest rate for all cases of payment default (Zahlungsverzug)
among the parties to this Agreement; the creditor may assert excess
damage.
(5) Repayments, if any, to the Purchasers shall be made
- to the German Purchaser:
BHF Bank in Frankfurt am Main, Account No. 20875, Bank Code
500 202 00;
- to the U.S. Purchaser:
Comerica Bank in Detroit, Michigan, Account No. 10 76 000 734.
(6) Payment of the Preliminary Purchase Price (DM 579,300,000) shall be
made in U.S. dollars at the official conversion rate quoted at the
Frankfurt stock exchange (amtlicher Mittelkurs) on the banking day
in Frankfurt am Main immediately preceding the day of Closing.
Payment or repayment of any difference between the Preliminary
Purchase Price and the Final Purchase Price, shall be made in U.S.
dollars at the official conversion rate quoted at the Frankfurt
Stock Exchange (amtlicher Mittelkurs) on the banking day in
Frankfurt am Main immediately preceding the day of such payment or
repayment.
(7) At Closing, in addition to the Preliminary Purchase Price, the
amount of the DB-Indebtedness shall be paid by the Purchasers to
Daimler Benz AG to its account with Citibank in Frankfurt am Main,
USD Account No. 120 87 67 018, via Citibank New York.
"DB-Indebtedness" is the amount of DM 163.8 million (the amount
of Net Financial Indebtedness to Daimler Benz AG within the
meaning of Section 7 (4) d)), or, if notification of the likely
balances in the IC accounts pursuant to Section 17 (4) c) has
taken place, the sum of the notified amounts of (i) the DM IC
accounts pursuant to Section 17 (4) a) and b) (including the
outstanding loan by Daimler Benz AG to TS GmbH plus interest
accrued thereon up to and including
the day of Closing, and further including the amounts pursuant to
Section 17 (5), if any), and (ii) the USD IC account pursuant to
Section 17 (4) a).
(8) Payment of the DB-Indebtedness and additional payments or
repayments, if any, pursuant to Section 17 (4) f) shall be made in
US Dollars; based on the respective conversion rate set forth in
subcl. (6) above.
10.
TAXES
(1) Due Filing of Returns/Payment of Certain Taxes by Sellers
a) U.S. Seller represents that, except as set forth on SCHEDULE
10.1, each of Siliconix Inc. and its Subsidiaries has or will
have, as of the Transfer Date, timely, completely, and
accurately in all material respects, filed all Tax Returns
required to be filed by it on or before the Transfer Date with
respect to any taxable period or periods ending on or before
the Transfer Date, and has paid or will pay all Taxes shown to
be due on such Tax Returns .
b) German Seller represents that, except as set forth on Schedule
10.1, each of TS GmbH and its Subsidiaries has or will have, as
of the Transfer Date, timely, completely, and accurately in all
material respects, filed all Tax Returns required to be filed
by it on or before the Transfer Date with respect to any
taxable period or periods ending on or before the Transfer
Date, and has paid or will pay, or, as the case may be, has
caused or will cause its Subsidiaries to pay in a timely
fashion all Taxes shown to be due on such Tax Returns to the
appropriate tax authorities.
c) For purposes of this Agreement, "Tax" or "Taxes" shall mean all
taxes, charges, fees, levies, penalties or other assessments
including, but not limited to, income, excise, property, sales,
transfer, franchise, payroll, withholding, social security,
value added, or other taxes, including any interest, penalties
or additions attributable thereto, imposed by a United States
or German federal, state, or local taxing authority or a taxing
authority of any other country.
d) For purposes of this Agreement, "Tax Return" shall mean any
returns, statements, reports and forms (including estimated tax
or information returns and reports) required to be filed with
any taxing authority with respect to Taxes.
(2) Pending or Threatened Actions
a) Except as set forth on SCHEDULE 10.2 and except with respect to
any Tax audits, there is no action, suit, proceeding,
investigation or claim pending or, to the knowledge or U.S.
Seller, threatened in respect of any Taxes for which Siliconix
Inc. is liable, nor has any deficiency or claim for any such
Taxes been proposed, asserted or, to the knowledge of U.S.
Seller, threatened.
b) Except as set forth on Schedule 10.2 and except with respect to
any Tax audits, there is no action, suit, proceeding,
investigation or claim pending or, to the knowledge of German
Seller, threatened in respect of any Taxes for which TS GmbH is
liable, nor has any deficiency or claim for any such Taxes been
proposed, asserted or, to the knowledge of German Seller,
threatened.
(3) Except as set forth on SCHEDULE 10.3:
a) Since January 1, 1992, neither Siliconix Inc. nor any of its
Subsidiaries has ever been a member of an affiliated group
within the meaning of Section 1504 of the Internal Revenue Code
of 1986, as amended (the "Code") or filed or been included in a
combined, consolidated, or unitary Tax Return, other than any
group of which Daimler Benz North America Corporation is the
common parent or any group of which Siliconix Inc. (or any
predecessor thereto) was the common parent.
b) Other than with respect to Taxes of other members of the
affiliated group of corporations including the U.S. Seller, to
the best knowledge of the U.S. Seller, neither Siliconix Inc.
nor any of its Subsidiaries is liable for any material amount
of Taxes of any other person, or is currently under any
contractual obligation to indemnify any person with respect to
Taxes.
c) Except for Siliconix Technology C.V., Amsterdam, to the best
knowledge of the U.S. Seller, neither Siliconix lnc. nor any of
its Subsidiaries is a party to any joint venture, partnership,
or contract which is treated as a partnership for United States
federal income tax purposes.
d) The sale of the U.S. Shares by the U.S. Seller pursuant to
Section 3 of this Agreement will not result in the recognition
of a material amount of income by Siliconix Inc. or any of its
Subsidiaries under Treasury Regulation Section 1.1502-13 or
Section 1.1502-19.
e) Neither Siliconix lnc. nor any of its Subsidiaries has entered
into any sale-leaseback or any leveraged lease transaction that
they treat as not meeting the requirements of Revenue Procedure
75-21 or similar provisions of foreign law.
f) Neither Siliconix Inc. nor any of its Subsidiaries has agreed
or is required, as a result of a change in method of accounting
or otherwise, to include in taxable income any material
adjustment under Section 481 of the Code or any corresponding
provision of state, local, or foreign law.
g) Neither Siliconix Inc. nor any of its Subsidiaries is liable
with respect to any indebtedness for which they are not
claiming an interest deduction with respect to payments of
interest thereon for United States federal income tax purposes.
h) Neither Siliconix Inc. nor any of its Subsidiaries is a
"consenting corporation" under Section 341 (f) of the Code.
(4) Cooperation on Tax Matters
a) Purchasers and Sellers and, to the extent reasonably required,
the Target Companies and their Subsidiaries shall cooperate
fully, as and to the extent reasonably requested by the other
party, in connection with the preparation and filing of Tax
Returns, including any report required pursuant to Section 6043
of the Code and all Treasury Regulations promulgated
thereunder, and any audit, litigation or other proceeding with
respect to Taxes. Such cooperation shall include the retention
and (upon the other party's request) the provision of records
and information which are reasonably relevant to any such
audit, litigation or other proceeding and making employees
available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder,
but shall not include the provision of U.S. consolidated
federal income Tax Returns which includes the U.S. Seller,
Daimler-Benz North America corporation, or any affiliate
thereof or successor thereto, regardless of whether a 338
(h)(10) Election (as defined in Section 10 (7) a) below) is
made.
b) Purchasers and Sellers agree (i) until one year after
expiration of all applicable statutes of limitation (as may be
extended) to retain, or cause to be retained, all books and
records with respect to Tax matters pertinent to the Target
Companies and the Subsidiaries relating to any taxable periods
ending prior to or including the Transfer Date, and to abide by
all record retention agreements entered into with any taxing
authority, (ii) to give the other party reasonable written
notice prior to destroying or discarding any such books and
records after the periods described in (i) above, and (iii) if
the other party so requests, allow the other party to take
possession to such books and records.
c) Purchasers and Sellers further agree, upon request from the
other party, to use all reasonable efforts to obtain any
certificate or other document from any governmental authority
or customer of the Target Companies or the Subsidiaries or from
any other person as may be necessary to mitigate, reduce or
eliminate any Tax that could be imposed, including but not
limited to with respect to the transactions contemplated
hereby.
d) No later than 45 days before the due date (with any applicable
extensions) for the filing of any Tax Returns (due after the
Transfer Date) of, or that include, any of the Target Companies
or the Subsidiaries with respect to a taxable period that ends
on or prior to the Transfer Date, or with respect to a taxable
period that includes but ends after the Transfer Date,
Purchasers shall deliver, or cause Target Companies and the
Subsidiaries to deliver, copies of such Tax Returns (or pro
forma Tax Returns as the case may be) to the U.S. Seller or the
German Seller (as the case may be), along with the notice of
the due date (with any applicable extensions) for the filing of
such Tax Returns. No later than 15 days before the due date
(with any applicable extensions) for the filing of such Tax
Returns as notified by Purchasers, the appropriate Seller shall
give notice to Purchasers of its consent or reasonable
objection to such Tax Returns. Purchasers and affiliates
thereof or successors thereto shall file any such Tax Returns
(which Purchasers and affiliates thereof or successor thereto
are required to file) only with the prior consent of the
appropriate Seller.
e) Purchasers and affiliates thereof or successors thereto
(including, for purposes of this Section 10, the Target
Companies and the Subsidiaries) shall prepare and file all Tax
Returns and shall be liable for and shall pay all Taxes with
respect to the Target Companies and the Subsidiaries with
respect to any taxable period or periods beginning on or after
and ending after the Transfer Date. No election shall be made
with respect to Siliconix Inc. and its Subsidiaries under
Treasury Regulation Section 1.1502-76(b)(2)(ii) without the
consent of the Purchasers, which shall not be unreasonably
withheld, with respect to any taxable period or periods
beginning on or after and ending after the Transfer Date.
f) Purchasers shall cause the Target Companies and the
Subsidiaries to timely pay to the appropriate taxing
authorities (or to the U.S. Seller or German Seller as the case
may be) any Taxes imposed with respect to the business, income,
assets and/or operations of the Target Companies and the
Subsidiaries that are due on or after the Transfer Date.
g) For the time period up to and including the Transfer Date, the
U.S. Seller and Siliconix Inc. and its Subsidiaries shall
continue to cooperate in Tax matters as they have done in the
past.
(5) Tax indemnification, Set-off of Tax Benefit
Subject to Section 14 (6) and (10):
a) U.S. Seller hereby indemnifies U.S. Purchaser against and
agrees to hold U.S. Purchaser harmless from (i) any Tax of U.S.
Seller or its affiliates (other than any Tax of Siliconix Inc.
or its Subsidiaries) incurred with respect to any taxable
period or periods ending on or before the Transfer Date, and
(ii) except to the extent reserved for by Siliconix Inc., 80%
of the amount of any final assessment of any Tax deficiency of
Siliconix Inc. and its Subsidiaries with respect to any taxable
period or periods ending on or before the Transfer Date.
b) The German Seller hereby indemnifies German Purchaser against
and agrees to hold the German Purchaser harmless from any
unpaid Tax of TS GmbH and its Subsidiaries incurred with
respect to any taxable period or periods ending on or before
the Transfer Date, to the extent that the Final Balance Sheet
contains no provision for such Tax.
c) Purchasers hereby indemnify Sellers against and agrees to hold
Sellers harmless from (i) any Tax of Purchasers or any
affiliate thereof or successor thereto, and any Tax imposed on
Sellers or any of their affiliates with respect to the business
of the Target Companies and the Subsidiaries, incurred with
respect to any taxable period or periods beginning on or after
and ending after the Transfer Date, and (ii) 20% of the amount
of any final assessment of any Tax deficiency of Siliconix Inc.
and its Subsidiaries with respect to any taxable period or
periods ending on or before the Transfer Date, and (iii) any
additional Tax costs (and related fees and costs) incurred by
the U.S. Seller and/or any affiliates thereof or successors
thereto as a result of any 338 (h)(10) Election (as defined in
Section 10 (7) a) below).
d) Any indemnity obligation pursuant to Section 10 (5)(a), (b) or
(c) above shall be (i) reduced by any Tax Benefit realized by
the indemnified party any affiliate thereof (including in the
case of subcls. a) and b) any Tax Benefit realized by any of
the Target Companies or the Subsidiaries) or successor thereto,
with respect to such Taxes or the adjustment giving rise to
such claim for indemnification, and (ii) subject to
presentation of the final assessment of such Tax, on or before
the 60th day following the expiration of the applicable statute
of limitations. "Tax Benefit" shall mean the present value or
any present or future deduction, expense, loss, increase in
asset basis, credit or refund then or thereafter realized by a
party or an affiliate thereof or successor thereto, computed in
respect to Tax Benefits in the United States calculated using
the applicable long-term federal rate as defined in Section
1274(d) of the Code or any successor provision, and in respect
of Tax Benefits in Germany or elsewhere calculated using the
interest rate of 6% p.a.
e) Each party agrees (i) to give within ten Business Days written
notice to the other party of any additional Tax (including, but
not limited to, any Tax assessments, whether final or not) or
the assertion of any claim or the commencement of any suit,
action or proceeding in respect of which such party may seek
indemnity hereunder, and (ii) to give the other party such
information with respect thereto as the other party may
reasonably request, and (iii) upon the other party's
instruction, to file, or cause the company concerned to file,
any notice, objection or otherwise with the appropriate taxing
authority. The indemnifying party shall not be liable under
this Section 10(5) to the extent such party is materially
adversely affected by the indemnified party's failure to comply
with this provision.
f) An indemnifying party may, at its own expense, (i) participate
in and (ii) upon notice to the other party, assume the defence
of any suit, action or proceeding, including any Tax audit,
concerning any Tax liability as to which it may be liable under
this Section 10 (5) and as to which written notice was given
pursuant to Section 10 (5) e). If a party chooses to defend or
prosecute any claim, all of the parties hereto shall cooperate
in the defence or prosecution thereof, and the Purchasers shall
cause the Target Companies and the Subsidiaries to cooperate. A
party shall not be liable under Section 10(5) to the extent
such party's liability under this Section is materially
adversely affected as a result of any failure or omission to do
so on the part of the other party or any affiliate thereof or
successor thereto.
(6) Tax Refunds, Tax Benefits
a) To the extent not governed by subcl. (5) d) above, Purchasers
shall within 10 days of receipt of any Tax refund or credit
actually received by or on behalf of any of the Purchasers or
any affiliate thereof (including the Target Companies and the
Subsidiaries) or successor thereto, with respect to any taxable
period or periods of any of the Target Companies or the
Subsidiaries ending on or before the Transfer Date, pay such
Tax refund or credit to the appropriate Seller including any
interest actually received thereon.
b) To the extent that any of the Purchasers or any affiliate
thereof or successor thereto realizes a Tax Benefit that is
attributable to an adjustment of any income, gain, loss,
deduction, credit, refund or other Tax item made with respect
to any taxable period or periods of the Target Companies or the
Subsidiaries ending on or before the Transfer Date and in
connection therewith the Sellers or any affiliates thereof or
successors thereto realizes any Tax cost or detriment,
Purchasers will, within 10 days of the receipt of such Tax
Benefit, pay to the appropriate Seller an amount equal to such
Tax Benefit.
(7) ss. 338 (h)(10) Election
a) The U.S. Seller agrees, if timely requested by the U.S.
Purchaser, to join with the U.S. Purchaser in making an
election under Section 338 (h)(10) of the Code (and similar
provisions of state or local law) (a "338 (h)(10) Election")
with respect to the purchase by the U.S. Purchaser of the U.S.
Shares pursuant to this Agreement; provided, however, that a
nationally recognized accounting firm selected by the U.S.
Seller shall prepare all reports, forms, studies, valuations
and analyses to be used by the U.S. Seller and U.S. Purchaser
in connection therewith.
b) If a 338 (h)(10) Election is made pursuant to Section 10 (7) a)
above, the US Purchaser agrees to pay to the U.S. Seller within
five Business Days of receipt of notification from the U.S.
Seller an amount equal to any additional Tax costs (and related
fees and costs) incurred by the U.S. Seller or any affiliate
thereof or successor thereto as a result of such 338 (h)(10)
Election; for purposes of this Section 10 (7) b) such
additional Tax costs shall equal (x) (i) the amount of gain
and/or income the U.S. Seller, Siliconix Inc., and any
affiliates thereof or successors thereto realize for Tax
purposes as a result of the 338 (h)(10) Election minus (ii) the
amount of gain and/or income the U.S. Seller would have
realized for Tax purposes from the sale of the U.S. Shares
pursuant to this Agreement in the absence of any 338 (h)(10)
Election multiplied by (y) the maximum marginal U.S. federal
income tax rate applicable to corporations plus 5%.
c) If a 338 (h)(10) Election is made pursuant to Section 10 (7) a)
above, neither the U.S. Purchaser nor any affiliates thereof or
successors thereto shall make any election under Section 338 of
the Code (or similar provisions of state or local law) without
the prior written consent of the U.S. Seller with respect to
any deemed purchase of the stock of any non-U.S. Subsidiaries
of Siliconix Inc. as a result of the 338 (h)(10) Election.
(8) Tax sharing agreements
All material income Tax sharing agreements to which Siliconix Inc.
or any of its Subsidiaries is a party and to which they will remain
a party after the Transfer Date are listed on SCHEDULE 10.8. Nothing
in such agreements shall have the effect of changing the terms of
this Agreement or the rights and obligations of U.S. Seller and U.S.
Purchaser pursuant to this Agreement.
11.
WARRANTIES OF THE SELLERS
The Sellers hereby jointly and severally represent and warrant to the
Purchasers as follows:
(1) The description of and representations as to the corporate structure
of the Target Companies and the Subsidiaries set forth, or referred
to, in Section 1 (1) through (8) are true and accurate in all
material respects.
(2) Each of the Target Companies and the Subsidiaries is a corporation,
a limited liability company or a partnership duly organized, validly
existing and, where applicable, in good standing under the laws of
the jurisdiction of its organisation. Each of the Target Companies
and the Subsidiaries has all requisite power and authority to own,
lease and operate its properties and to carry on its business as now
being conducted, except where the failure to be so existing and in
good standing or to have such power or authority would not
individually or in the aggregate have a material adverse effect on
the business, financial condition or result of operations of the
Target Companies and the Subsidiaries, taken as a whole (a "MATERIAL
ADVERSE EFFECT") in excess of DM 2 million. Each of the Target
Companies and the Subsidiaries is duly qualified or licensed to do
business as a foreign corporation, foreign limited liability company
or foreign partnership and, where applicable, is in good standing to
do business in each jurisdiction in which the property owned, leased
or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary, except in such
jurisdictions where failure to be so duly qualified or licensed and
in good standing would not, in the aggregate, have a Material
Adverse Effect in excess of DM 2 million. Schedule 1.2 sets forth a
complete and accurate list of all jurisdictions in which each of the
Target Companies and each of the Subsidiaries is qualified or
licensed to do business. The Sellers have heretofore delivered to
the Purchaser accurate and complete copies of the certificate of
incorporation and bylaws (or other similar charter documents) or
partnership agreements of each of the Target Companies and the
Subsidiaries (except inactive Subsidiaries identified as such on
Schedule 1.2), as currently in effect.
(3) Each of the Sellers has the requisite power and authority to execute
and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by
each of the Sellers and the consummation by such Seller of the
transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of such
Seller, except as set forth in this Agreement. This Agreement has
been duly and validly executed and delivered by each of the Sellers
and, assuming the due authorization, execution and delivery by the
Purchasers, constitutes a valid and binding agreement of each
Seller, enforceable against each Seller (as joint and several
debtor) in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization
or other similar laws affecting creditors' rights generally.
(4) Except as set forth on SCHEDULE 11.4 and except for applicable
requirements of the HSR Act, the Omnibus Trade and Competitiveness
Act of 1988 (hereinafter referred to as the "EXON-FLORIO
AMENDMENT"), the German GWB, EU Regulation 4064/89, the Swedish
Competition Law, as well as any other applicable antitrust
provisions of other laws, ss. 3 of the German Currency Act
(Wahrungsgesetz), each as amended, and except for applicable
requirements to notify the U.S. the Pension Benefit Guaranty
Corporation, to the knowledge of the Sellers, there is no
requirement applicable to the Sellers or the Target Companies to
make any filing with, or to obtain any permit, authorization,
consent or approval of, any governmental or regulatory authority,
domestic or foreign, as a condition to the lawful consummation by
the Sellers of the transactions contemplated by this Agreement.
Except as set forth on Schedule 11.4, neither the execution and
delivery of this Agreement by the Sellers nor the consummation by
the Sellers of the transactions contemplated hereby nor compliance
by the Sellers with any of the provisions hereof will (i) conflict
with or result in any breach of any provision of the certificate of
incorporation or bylaws (or other similar charter documents) of any
of the Sellers or any of the Target Companies or any of the
Subsidiaries, or (ii) assuming that the filings referred to in the
first sentence of this subcl. (4) are duly and timely made, to the
knowledge of the Sellers, violate any order, writ, injunction,
decree, statute, treaty, rule or regulation applicable to any of the
Sellers, any of the Target Companies, any of the Subsidiaries or any
of their respective properties or assets; excluding from this clause
(ii) such breaches, defaults and violations which in the aggregate
could not reasonably be expected to have a Material Adverse Effect.
in excess of DM 2 million.
(5) Except for the possibility that the French Government (Ministry of
Industry) might consider to claim repayment of the Subsidy granted
to MATRA MHS S.A., unless appropriate assurances which may be
expected by the French Government would be given by Purchasers, the
Sellers have no reason to believe that the other parties to the
Change of Control Agreements, which are material to the Business,
will upon the sale and transfer of the German Common Stock and the
U.S. Shares to the German Purchaser and the U.S. Purchaser,
respectively, exercise a right of termination, cancellation or
acceleration under any of the terms, conditions or provisions of any
such material Change of Control Agreement.
(6) All legal, administrative, arbitration or other proceedings or
governmental investigations (except tax audits) ("PROCEEDINGS")
pending or, to the knowledge of Sellers, threatened in writing,
against the Target Companies or the Subsidiaries, which are
reasonably expected to result in a damage award of more than DM
1,000,000 individually are disclosed on Schedule 11.6. Except for
Proceedings relating to environmental or tax matters, there are no
Proceedings pending or, to the knowledge of the Sellers, threatened
in writing, involving the Target Companies or the Subsidiaries
(other than Maxim, SGS Thompson and IBM) which will result in
aggregate damage awards of more than the sum of DM 2,000,000 plus
the amounts reserved therefor in the Final Balance Sheet.
(7) a) Except as set forth on Schedule 11.7, to the knowledge of
the Sellers, the Target Companies and the Subsidiaries are in
compliance with all Environmental Law (as hereinafter defined)
as presently in effect, except for such violations which could
not reasonably be expected individually to have a Material
Adverse Effect in excess of DM 500,000. Except as set forth on
Schedule 11.7, to the knowledge of the Sellers, none of the
Target Companies and the Subsidiaries has received any written
communication from a governmental authority that alleges that
such company is not in compliance with all applicable
Environmental Law as presently in effect, except for such
events of noncompliance which could not reasonably be expected
to have a Material Adverse Effect in excess of DM 200,000 in
each individual case. All material permits and other
governmental authorization currently held by any of the Target
Companies pursuant to an Environmental Law are identified on
Schedule 11.7.
b) Except as set forth on Schedule 11.7, there is no Environmental
Claim (as hereinafter defined) pending, or, to the knowledge of
the Sellers, threatened in writing against any of the Target
Companies or any of the Subsidiaries or, to the knowledge of
the Sellers, against any person or entity whose liability for
such an Environmental Claim any of the Target Companies or any
of the other companies of the German Group has or may have
retained or assumed either contractually or by operation of
law, except for such Environmental Claims which could not
reasonably be expected to have a Material Adverse Effect in
excess of DM 200,000.
c) As used herein, the following terms shall have the meaning set
forth below:
(i) "Environmental Claim" means any claim or notice in writing,
received by one of the Sellers, or any of the Target Companies
or any of the Subsidiaries by any person or any entity alleging
potential liability (including, without limitation, potential
liability for investigatory costs, clean-up costs, governmental
response costs, natural resources damages, property damages,
personal injuries, or penalties) arising out of, based on or
resulting from (a) the presence, or release into the
environment, of any Hazardous Materials (as hereinafter
defined) at any location, whether or not owned by any of the
Target Companies or any of the Subsidiaries or (b) any
violation, or alleged violation, of any Environmental Law.
(ii) "Environmental Law" means all federal, state, local and
foreign laws and regulations relating to pollution or
protection of human health or the environment applicable
to the property and business of any of the Target
Companies or any of the other companies of the German
Group.
(iii) "Hazardous Materials" means materials defined as
"hazardous substances", "hazardous wastes", "solid
wastes" or words of similar import in any Environmental
Laws, as presently in effect.
(8) Except as set forth on Schedule 11.8, and except for standard
corporate policy, and except as provided for by law or collective
bargaining agreements or similar provisions, neither of the Target
Companies and, to the knowledge of the Sellers, none of the
Subsidiaries (other than the U.S. Companies, as hereinafter defined)
is a party to or bound by any contract, agreement or arrangement
with its employees regarding an obligation to make severance
payments in case of a termination of employment.
(9) Intellectual property
a) Except for such intellectual property the absence of which is
not material, SCHEDULE 11.9 sets forth the following:
(i) all intellectual property rights (including applications)
that have been registered for either Target Company or any
of the Subsidiaries in the corresponding registry, and
(ii) all licences to intellectual property rights and
copyrights (except for standard software) that have been
licensed to either Target Company or any of the
Subsidiaries on the basis of a licence agreement or other
right (passive licences), and
(iii)all licences granted by either Target Company or any of
the Subsidiaries to third parties (active licences).
Schedule 11.9 is not intended to contain
- standard software licences;
- internal licences between companies that are a Target
Company or a Subsidiary;
- licences under the foregoing subpara. (iii) that are
implicitly granted to customers in agreements with
customers, including licences to allow design, service,
repair and similar services to be performed by third
parties.
The intellectual property rights set forth on Schedule 11.9
pursuant to subpara. (i), above are hereinafter referred to as
the "INTELLECTUAL PROPERTY RIGHTS"; the trademarks contained
therein are hereinafter referred to as the "TRADEMARKS".
b) The Intellectual Property Rights registered for either Target
Company or any of the Subsidiaries are owned by the respective
company to the knowledge of the Sellers free and clear of any
encumbrances or other rights of third parties, except for
employee inventor rights, sublicenses, and, to the extent
included on Schedule 11.9, cross license agreements and
co-ownership rights.
c) None of the Intellectual Property Rights, except applications,
has been adjudicated unenforceable or ineffective in any other
manner. The Sellers have no knowledge that any of the
Intellectual Property Rights is not valid or not subsisting.
d) The Intellectual Property Rights and the other intellectual
property rights including licences provided in this Agreement
to be conveyed to the Target Companies and the Subsidiaries are
all material intellectual property rights which belong to or
are lawfully used in the Business as defined in Section 1 (9).
(10) a) Except as set forth on SCHEDULE 11.10A, TS GmbH or any of
the Subsidiaries incorporated in Germany have not entered into
agreements with its works council with respect to maintaining a
certain number of workers, a certain organization or salaries
and wages that are effective past December 31, 1997. All
pension plans applicable to employees of TS GmbH or employees
of German Subsidiaries are also set forth on Schedule 11.10a.
Except as set forth on Schedule 11.10a, to the knowledge of
Sellers, there is no strike, work stoppage, work slowdown or
other material labor disturbance involving employees of TS GmbH
or any of the Subsidiaries pending, or to the knowledge of
Sellers, threatened.
b) Except as set forth on SCHEDULE 11.10B, (i) Siliconix Inc. is
not a party to any collective bargaining agreement, (ii) to the
knowledge of Sellers, no union organizational campaign is in
progress with respect to the business of Siliconix Inc., (iii)
there is no strike, work stoppage, work slowdown or other
material labor disturbance involving employees of Siliconix
Inc. pending, or to the knowledge of Sellers, threatened, and
(iv) there is no unfair labor practice or other charge or
complaint pending, or to the knowledge of Sellers, threatened
against Siliconix Inc. before the National Labor Relations
Board, the Equal Employment Opportunity Commission or any other
government agency or court regarding an unlawful employment
practice other than proceedings arising in the ordinary course
of business and proceedings which, if decided adversely, would
not cause Siliconix Inc. to incur material liability.
c) A true, correct and complete list dated October 30, 1997, of
all employees of the Target Companies and Subsidiaries in the
form of the personnel statistics as routinely prepared as part
of the internal reporting system used by them is attached as
SCHEDULE 11.10C.
(11) All Employee Benefit Plans (as hereafter defined) are in material
compliance with all Applicable Laws (as hereinafter defined).
"Applicable Laws" means any and all statutes (including ERISA and
the Code), orders, governmental rules or regulations currently in
effect with respect thereto, of any U.S. jurisdiction that may apply
to any Employee Benefit Plan.
a) "Employee Benefit Plan" means any "employee benefit plan" as
defined in Section 3 (3) of the Employee Retirement Income
Security Act of 1974, as amended from time to time ("ERISA")
and any other plan, policy, program, practice, agreement,
understanding or arrangement (whether written or oral)
providing compensation or other material benefits to any
current or former officer, employee or consultant (or to any
dependent or beneficiary thereof) of Siliconix, Inc. or any
Subsidiary that is the employer of employees who are covered by
such a plan that is subject to Applicable Laws (for purposes of
this subcl. (11), collectively, the "U.S. Companies"), which
are now, or were within the past six years, maintained by,
contributed to by or with respect to which an obligation to
contribute exists on the part of the U.S. Companies under which
any of the U.S. Companies has or may have any material
obligation or liability, including, without limitation, all
material incentive, bonus, deferred compensation, vacation,
holiday, cafeteria, medical, disability, stock purchase, stock
option, stock appreciation, phantom stock, restricted stock or
other stock-based compensation plans, policies, programs,
practices or arrangements.
b) Sellers have made available to Purchasers or its counsel prior
to the date hereof true and complete copies of (i) any
employment agreements and any material procedures and policies
relating to the employment of employees of the U.S. Companies
and the use of temporary employees, independent contractors or
leased employees by the U.S. Companies (including summaries of
any material procedures and policies that are unwritten), (ii)
plan instruments and amendments thereto for all Employee
Benefit Plans and related trust agreements, insurance and other
contracts, summary plan descriptions, and summaries of material
modifications, and material communications distributed, or
otherwise communicated, to the participants of each Employee
Benefit Plan, (iii) to the extent annual reports on Form 5500
are required with respect to any Employee Benefit Plan, the
three most recent annual reports and attached required
schedules for each Employee Benefit Plan as to which such
report is required to be filed and (iv) where applicable, the
most recent (A) opinion or determination letter, (B) audited
financial statements and (C) actuarial valuation reports for
each Employee Benefit Plan. The Employee Benefit Plans
maintained by the U.S. Companies or as to which the U.S.
Companies may have any material liability are set forth on
SCHEDULE 11.11B.
c) Except as set forth on SCHEDULE 11.11C, the U.S. Companies do
not now, nor did they within the six year period preceding the
date hereof, maintain, contribute to or have an obligation to
contribute to an Employee Benefit Plan subject to Title IV of
ERISA, nor do they have any contingent liability with respect
to any employee benefit plan maintained by, contributed to by
or with respect to which an obligation to contribute exists or
existed on the part of any ERISA Affiliate. "ERISA Affiliate"
means any entity (whether or not incorporated) other than the
U.S. Companies that, together with any of the U.S. Companies,
is or was a member of a controlled group of corporations within
the meaning of Section 414(b) of the Code, of a group of trades
or businesses under common control within the meaning of
Section 414(c) of the Code, or of an affiliated service group
within the meaning of Section 414(m) of the Code.
d) To the knowledge of Sellers, with respect to each Employee
Benefit Plan, (i) no party in interest or disqualified person
(as defined in Section 3 (14) of ERISA and Section 4975 of the
Code, respectively) has at any time engaged in a transaction
which could reasonably be expected to subject the U.S.
Companies, directly or indirectly, to a material tax, penalty
or liability for prohibited transactions imposed by ERISA or
the Code and (ii) no fiduciary (as defined in Section 3 (21) of
ERISA) with respect to any Employee Benefit Plan, or for whose
conduct the U.S. Companies could reasonably be expected to have
any material liability (by reason of indemnities or otherwise),
has breached any of the responsibilities or obligations imposed
upon the fiduciary under Title I of ERISA.
e) Each Employee Benefit Plan which is an "employee pension
benefit plan" within the meaning of Section 3 (2) of ERISA (a
"Pension Plan") and which is subject to Sections 201, 301 or
401 of ERISA has received a favorable determination letter from
the Internal Revenue Service covering all amendments required
under the Tax Reform Act of 1986, the Unemployment Compensation
Amendments of 1992, the Omnibus Budget Reconciliation Act of
1993 and any applicable prior tax legislation and, to the
knowledge of Sellers, there are no circumstances that are
reasonably likely to result in revocation of any such favorable
determination letter. Each Employee Benefit Plan is and has
been operated in material compliance with its terms and all
Applicable Law. As of and including the date of the Closing,
the U.S. Companies shall have made all contributions required
to be made by them up to and including the date of the Closing
with respect to each Employee Benefit Plan, or adequate
accruals therefor will have been provided for and will be
included in the Final Balance Sheet. All notices, filings and
disclosures required by Applicable Laws have been timely made,
except for instances of noncompliance that would, individually
or in the aggregate, not cause the U.S. Companies to incur
material liability.
f) (i) Neither the U.S. Companies nor any Seller has received any
written notice of, or is otherwise aware of, any actions,
claims (other than routine claims for benefits), lawsuits or
arbitrations pending or, to the knowledge of Sellers,
threatened with respect to any Employee Benefit Plan (including
against any fiduciary of any Employee Benefit Plan), and (ii)
Sellers have no knowledge of any facts that could reasonably be
expected to give rise to any such actions, claims, lawsuits or
arbitrations that could, individually or in the aggregate,
cause the U.S. Companies to incur material liability.
g) Except as set forth on SCHEDULE 11.11G, no Employee Benefit
Plan provides for material medical or health benefits (through
insurance or otherwise) or provided for the continuation of
such benefits or coverage for any participant or any dependent
or beneficiary of any participant after such participant's
retirement or other termination of employment except as may be
required by Part 6 of Subtitle B of Title I of ERISA and
Section 4980B of the Code ("COBRA").
h) Neither the U.S. Companies nor any ERISA Affiliate has, within
the six year period preceding the date hereof, contributed to,
or withdrawn in a partial or complete withdrawal from, any
"multiemployer plan" (as defined in Section 3 (37) of ERISA) or
has any fixed or contingent liability under Section 4204 of
ERISA.
i) No Employee Benefit Plan is a "multiple employer plan" as
described in Section 3 (40) of ERISA or Section 413 (c) of the
Code.
j) Except as required by Applicable Law, the U.S. Companies have
not agreed to or communicated to employees any changes to any
Employee Benefit Plan that would (i) cause an increase in
benefits or create new benefits under any Employee Benefit Plan
or (ii) change any employee coverage which would cause an
increase in the expense of maintaining any such Plan that, in
either case, could, individually or in the aggregate, have a
Material Adverse Effect.
k) Except as set forth on SCHEDULE 11.11K, the consummation of the
transactions contemplated hereby will not result in (i) any
material payment (including, without limitation, severance,
unemployment compensation, golden parachute or bonus payments
or otherwise) becoming due to any director, officer, employee
or consultant of the U.S. Companies, (ii) any material increase
in the amount of compensation or benefits payable in respect of
any director, officer, employee or consultant of the Target
Companies or the Subsidiaries, or (iii) the acceleration of
vesting or time of payment of any material benefits or
compensation payable in respect of any director, officer,
employee or consultant of the U.S. Companies.
l) (i) Except as set forth on Schedule 11.11L hereto, the U.S.
Companies have no material liability under Subtitle C or D of
Title IV of ERISA (other than liability to make contributions),
and no such liability is reasonably excepted to be incurred by
the U.S. Companies, with respect to any "single employer plan,"
within the meaning of Section 4001 (a) (15) of ERISA, currently
or formerly maintained or contributed to by any of the U.S.
Companies or any ERISA Affiliate. The PBGC has not instituted
proceedings to terminate any such plan and, to the knowledge of
Sellers, no condition exists that could reasonably be expected
to result in the PBGC instituting such proceedings. (ii) Except
as set forth on Schedule 11.11l no notice of a "reportable
event," within the meaning of Section 4043 of ERISA for which
the thirty (30)-day reporting requirement has not been waived,
has been required to be filed for any Pension Plan or a plan of
an ERISA Affiliate within the twelve (12)-month period ending
on the date hereof or, to the knowledge of Sellers, will be
required to be filed by the U.S. Companies as a result of the
transactions contemplated by this Agreement, except for
instances of noncompliance that would individually or in the
aggregate not cause the U.S. Companies to incur material
liability. (iii) No Pension Plan has an "accumulated funding
deficiency" (whether or not waived) within the meaning of
Section 412 of the Code or Section 302 of ERISA, and none of
the U.S. Companies has an outstanding funding waiver. (iv) None
of the U.S. Companies has provided, nor is required to provide,
security to any Pension Plan pursuant to Section 401 (a) (29)
of the Code.
m) Except as disclosed on Schedule 11.11M hereto, under each
Pension Plan that is a single employer plan, as of the last day
of the most recent plan year ended prior to the date hereof,
the actuarially determined present value of all "benefit
liabilities" within the meaning of Section 4001 a) (16) of
ERISA (as determined on the basis of the actuarial assumptions
contained in the respective plan's most recent actuarial
valuation), did not exceed the then current value of the assets
of such plan.
n) No Employee Benefit Plan is a voluntary employees' beneficiary
association within the meaning of Section 501 c)
(9) of the Code.
(12) SCHEDULE 11.12 is a complete and accurate list of all material
insurance policies currently carried by the Target Companies and the
Subsidiaries (summarizing in all material respects the amount and
scope of the coverage provided by each such policy). Each such
insurance policy is in full force and effect and there is no
material default by any of the Target Companies or Subsidiaries with
respect to any provision contained in any such insurance policy,
including, without limitation, any failure to give any notice or to
present any claim under any such policy in a timely fashion or in
the manner or detail required by the policy, except for such
defaults or failures, which, individually or in the aggregate, could
not be expected to be material.
(13) a) The Sellers have previously furnished to the Purchaser (i)
the audited consolidated balance sheet of Siliconix Inc. and
its subsidiaries as of December 31, 1996 (the "U.S. AUDITED
BALANCE SHEET"), and the other related audited consolidated
financial statements for the fiscal year then ended (together
with the notes thereto) accompanied by the reports thereon of
KPMG Peat Marwick LLP, Siliconix Inc.'s independent public
accountants (collectively with the U.S. Audited Balance Sheet ,
the "U.S. AUDITED FINANCIAL STATEMENTS"), (ii) the audited
balance sheets of TTMG and those of its direct or indirect
subsidiaries relating to the semiconductor business as of
December 31, 1996 listed on SCHEDULE 11.13A (the "GERMAN
AUDITED BALANCE SHEETS" and together with the U.S. Audited
Balance Sheet, the "AUDITED BALANCE SHEETS") and the related
audited income statements of TTMG and of its direct or indirect
subsidiaries listed on Schedule 11.13a for the fiscal year then
ended (together with the notes thereto) accompanied by the
report thereon of the independent public accountants
(collectively with the German Audited Balance Sheet,
the "GERMAN AUDITED FINANCIAL STATEMENTS" and together with the
U.S. Audited Financial Statements the "AUDITED FINANCIAL
STATEMENTS"). The Audited Balance Sheets (including the related
notes) as of the time when they were prepared fairly present in
all material respects the financial position of the companies
concerned therein as of December 31, 1996, and the other
related year-end statements included in the Audited Financial
Statements (including the related notes) fairly present in all
material respects the results of operations of the companies
included therein for the fiscal year then ended.
b) In addition to the Pro Forma Balance Sheet including the
related income statement, the Sellers have furnished to the
Purchasers pro forma interim consolidated financial statements
(including related income statements) for the Business as of
June 30, 1997, and September 30, 1997, which were routinely
prepared in accordance with Schedule 8.1 consistently applied
as part of the internal reporting system used by the Target
Companies and the Subsidiaries (collectively, including the Pro
Forma Balance Sheet, referred to as the "PRO FORMA FINANCIAL
STATEMENTS").
(i) The Pro Forma Financial Statements, as of the time when
they were prepared, fairly present in all material
respects the financial positions of the Business as of the
respective dates thereof and the results of operations of
the Business for the respective time periods covered
thereby.
(ii) Except in connection with the transactions referred to in
or contemplated by this Agreement, since the time of the
preparation of the pro forma interim consolidated
financial statements as of September 30, 1997, (i) the
Target Companies and the Subsidiaries have conducted the
Business in all material respects only in the ordinary and
normal course consistent with past practice, and (ii)
there has not been any material adverse change in the
operations or financial condition of the Business.
(14) a) SCHEDULE 11.14A contains a true and complete list of the
following important contracts to which the German Target
Company or any of its Subsidiaries is a party (a "GERMAN TARGET
COMPANY PARTY" and, collectively, the "GERMAN TARGET COMPANY
PARTIES") and which have not yet been fully performed, except
for contracts required to be disclosed in any other schedule to
this Agreement:
(i) All manufacturers sales representatives agreements,
distributor agreements (including franchises) or
agreements providing for the services of an independent
contractor if such agreement involves annual sales volume
or an obligation of the German Target Company Parties of
more than DM 2,000,000.
(ii) All loan agreements, indentures, mortgages, pledges and
security agreements, having (in the case of indebtedness)
a principal amount or providing for (in the case of other
agreements) aggregate payments in excess of DM 1,000,000
and all guaranties with a guaranteed amount in excess of
DM 200,000.
(iii)All leases or lease purchase agreements providing for
monthly payments in excess of DM 40,000 or annual payments
in excess of DM 500,000.
(iv) All other contracts or agreements relating to the business
or operations of the German Target Company Parties which
in the best judgment of the German Target Company Parties
are important to the business or operations of the German
Target Company Parties and which involve payments or
receipts by the German Target Company Parties of more than
DM 2,000,000 individually.
b) SCHEDULE 11.14B contains a list of all material contracts of
the Target Companies and the Subsidiaries with the United
States or any foreign government or any agency or department of
any thereof pursuant to which any of the Target Companies or
Subsidiaries is entitled to receive grants, subsidies or
similar financial support.
To the knowledge of Sellers, the validity or enforceability of the
contracts listed on Schedule 11.14a and 11.14b has not been legally
contested or questioned in writing. To the knowledge of Sellers,
there does not exist any breach or default on the part of any of the
Target Companies or the Subsidiaries or the other party thereto
under any of the contracts listed on Schedule 11.14a and 11.14b or
any contracts of the U.S. Group which are of a type that would be
required to be filed as an exhibit pursuant to Item 601 of
Regulation S-K, except such breaches or defaults which would not,
individually or in the aggregate, have a Material Adverse Effect in
excess of DM 4 million.
(15) All financial and other obligations which might result from the
judgement of the Supreme Court in Manila dated December 12, 1997 or
related judgements pertaining to the lay-off of workers and
employees by TEMIC Telefunken microelectronic (Philippines) Inc. are
exclusively obligations of TEMIC Telefunken microelectronic
(Philippines) Inc. and shall have no financial impact on TEMIC
Semiconductors (Phils.) Inc..
(16) Except as set forth on SCHEDULE 11.16 and except for each event of
non-compliance or violation which would not have a Material Adverse
Effect in excess of DM 2 million, (i) to the knowledge of the
Sellers during the three year period immediately preceding the date
of this Agreement, the Target Companies and the Subsidiaries have
conducted their respective businesses in material compliance with
all material applicable laws, and (ii) none of the Sellers or the
Target Companies or the Subsidiaries has received any written notice
of violation of any applicable regulation, ordinance or other law
which is applicable and material to the Business. Only as a
clarification of the general rule contained in subcl. (29), it is
hereby stated that this subcl. (16) shall not apply to subject
matters of an area which can be the subject of a representation and
warranty where this Agreement contains a specific warranty, in other
words, this subcl. (16) shall not apply, e.g., to any environmental
matter, whether or not covered by subcl. (7), because environmental
warranty matters are conclusively dealt with in that subcl. (7).
(17) The Target Companies and each of the Subsidiaries has complied
in all material respects with all specifications and other
requirements of the U.S. Government (including, but not limited to,
the Department of Defense and NASA) (the "U.S. Government"), made
applicable by the U.S. Government to the design and manufacturing of
the products manufactured by the Target Companies and each of the
Subsidiaries and directly, or with the knowledge of such Target
Companies or Subsidiaries, sold to the U.S. Government, except for
all such instances or events of non-compliance which would not, in
the aggregate, have a Material Adverse Effect in excess of DM 2
million. In addition, each of the Target Companies and the
Subsidiaries has complied in all material respects with all (i)
government or military specifications or requirements and Qualified
Product Lists of the U.S. Government published from time to time by
the Defense Supply Center which are applicable to products
manufactured by the Business (the "Qualified Product Lists") and
(ii) established reliability, testing, quality assurance or other
similar procedures and/or regulations (including, but not limited
to, procurement regulations relating to the failure to comply with
such procedures and/or regulations) of the U.S. Government
incorporating such standards applicable to any products manufactured
by the Business prior to the Closing, except for all such instances
or events of non-compliance and all failures to establish such
standards which would not, in the aggregate, have a Material Adverse
Effect in excess of DM 2 million.
(18) The Final Balance Sheet shall contain provisions in respect of the
disputes/litigation matters with IBM, SGS-Thompson and Maxim in an
aggregate amount equal to the sum of DM 1.8 million and FF 28
million.
(19) SCHEDULE 11.19 contains a list of all contracts between the German
Target Company or any of its Subsidiaries, on the one hand, and the
Sellers or any company in which Daimler Benz AG holds a majority
interest (in terms of capital and votes), on the other hand, which
(i) have a term that will continue past the Transfer Date, and (ii)
have resulted in annual payment obligations of the German Target
Company or any of its Subsidiaries in excess of DM 1 million.
(20) Intentionally left blank.
(21) SCHEDULE 11.21 contains a true and complete list of the 10 major
customers and suppliers of the Business. Neither the Sellers nor the
Target Companies have any reason to believe that any of the three
largest customers listed on Schedule 11.21 will not, in all material
respects, continue its customer relationship with the Business after
the Effective Time.
(22) SCHEDULE 11.22 contains a true and complete list of the current
directors and officers (or the persons holding equivalent positions,
where applicable) of each Target Company and each Subsidiary.
(23) SCHEDULE 11.23 contains a true and complete list of all major bank
accounts of each of the Target Companies.
(24) Sellers have previously made available to Purchasers true and
complete copies of the standard warranty provided by the Target
Companies and the Subsidiaries on sales orders and other related
documents which are delivered in connection with product sales.
Except as set forth on SCHEDULE 11.24, the Target Companies and the
Subsidiaries' customary practice is to include only such standard
warranty.
(25) The business of Siliconix Inc. has been conducted in material
compliance with Section 30A of the Securities and Exchange Act of
1934, as amended, to the extent it is applicable hereto.
(26) Subject to Section 6b and subject to completion of the drop down
transactions described in Sections 1 (1) and 6a, the assets,
liabilities and operations of the Target Companies and the
Subsidiaries are substantially the same as the assets, liabilities
and operations of the "TEMIC Semiconductor" business as it was
previously conducted and offered to the Purchasers and which formed
the basis of the Pro Forma Balance Sheet and the other Pro-Forma
Financial Statements.
(27) Sellers have no reason to believe that the relationship with Tomen
will materially negatively change as a result of the consummation of
the transactions contemplated hereby.
(28) Except for the warranties set forth or referred to in this Section
11, or expressly set forth elsewhere in this Agreement, the Sellers
expressly give no other warranties, whether express or implied; any
such other warranties are expressly excluded.
(29) The parties hereto are in agreement that if two or more of the
representations and warranties contained in this Agreement relate,
directly or indirectly, to the same subject matter, the more
specific representation and warranty shall be deemed to be the only
representation and warranty with respect to such subject matter and
the Purchasers shall not have any indemnification claim against
either of the Sellers as a result of an inaccuracy of the more
general representation and warranty.
(30) It is not considered a misrepresentation or a breach of warranty if
an item of information is not set forth on the corresponding
Schedule but contained in another Schedule or elsewhere in this
Agreement. All Schedules to this Agreement setting forth exceptions
to the representations and warranties contained in this Agreement
shall be deemed to include information reflected in, and documents
available as part of, the most recent Form 10-K and the most recent
proxy statement filed by Siliconix Inc. with the SEC (as defined
below), any statements, reports, forms or other documents
subsequently filed by Siliconix Inc. with the SEC, or documents
available from a public register in Germany.
(31) Circumstances and events which constitute a breach of a
representation and warranty and which are of a type that is required
to be set forth on the Final Balance Sheet in accordance with
applicable accounting principles, shall be set forth on the Final
Balance Sheet (and thus have an impact on the Final Purchase Price)
and to that extent not give rise to an additional claim under
Section 14 (1) to the extent accrued for or otherwise included in
the Final Balance Sheet.
12.
WARRANTIES OF THE PURCHASER
The Purchasers and the Guarantor hereby jointly and severally represent
and warrant to the Sellers as follows:
(1) Each of the Purchasers and the Guarantor is a corporation or limited
liability company duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and
has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being
conducted, except where the failure to be so existing and in good
standing or to have such power or authority would not individually
or in the aggregate have a material adverse effect on the business,
financial condition or results of operations of the Purchasers or
the Guarantor, taken as a whole.
(2) Each of the Purchasers and the Guarantor has the requisite corporate
power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by each of the Purchasers and the
Guarantor and the consummation by each Purchaser and the Guarantor
of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of each
Purchaser and the Guarantor. This Agreement has been duly and
validly executed and delivered by each Purchaser and the Guarantor
and, assuming the due authorization, execution and delivery by the
Sellers, constitutes a valid and binding agreement of each Purchaser
and the Guarantor, enforceable against each Purchaser and the
Guarantor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights
generally.
(3) Except as set forth on SCHEDULE 12.3 and except for applicable
requirements of the HSR Act, the Exon-Florio Amendment, the German
GWB, EU Regulation 4064/89, the Swedish Competition Law, as well as
any other applicable antitrust provisions of other laws, and ss. 3
of the German Currency Act (Wahrungsgesetz), each as amended, to the
knowledge of the Purchasers and the Guarantor, no filing with and no
permit, authorization, consent or approval of, any public body or
authority is necessary for the consummation by the Purchasers and
the Guarantor of the transactions contemplated by this Agreement.
Neither the execution and delivery of this Agreement by the
Purchasers and the Guarantor nor the consummation by the Purchasers
and the Guarantor of the transactions contemplated hereby nor
compliance by the Purchasers and the Guarantor with any of the
provisions hereof will (i) conflict with or result in any breach of
any provision of the certificate of incorporation or bylaws (or
other similar charter documents) of either Purchaser or the
Guarantor, (ii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default, or
give rise to any right of termination, cancellation or acceleration,
under any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, licence, contract, agreement or other
instrument or obligation to which either Purchaser, or the Guarantor
or any of their respective subsidiaries is a party or by which any
of them or any of their properties or assets may be bound or (iii)
assuming that the filings referred to in the first sentence of this
subcl. (3) are duly and timely made, to the knowledge of the
Purchasers and the Guarantor, violate any order, writ, injunction,
decree, statute, treaty, rule or regulation applicable to either
Purchaser or the Guarantor, any of their respective subsidiaries or
any of their properties or assets; except, in the case of clauses
(ii) and (iii) of this sentence, for violations, breaches or
defaults which will not prevent, impair or materially delay the
transactions contemplated hereby.
(4) The Purchasers have, or have received a "highly confident letter"
from a financially responsible financial institution to obtain, all
funds necessary to consummate the transactions contemplated by this
Agreement, and to pay all related fees and expenses (the financing
necessary to obtain such funds being hereinafter referred to as the
"FINANCING"). The Purchasers have provided the Sellers with true and
complete copies of such "highly confident letter". It is the good
faith and belief of the Purchasers, as of the date hereof, that the
Financing will be obtained, and the Purchasers shall use their
commercial best efforts to obtain the Financing, including using
their commercial best efforts to fulfil, or cause the fulfilment of,
any of the conditions thereto.
(5) Except for the warranties set forth or referred to in this Section
12, or expressly set forth elsewhere in this Agreement, the
Purchasers expressly give no other warranties, whether express or
implied; any such other warranties are expressly excluded.
13.
CONDUCT OF BUSINESS UNTIL EFFECTIVE TIME
(1) Except as contemplated by or mentioned or referred to in this
Agreement or its Schedules, during the period from the date of this
Agreement to the Effective Time, the Sellers will, to the extent
permitted under applicable laws, use their commercial best efforts
to cause the Target Companies and the Subsidiaries to conduct the
Business according to their ordinary and usual course of business in
accordance with past practice and to use commercially reasonable
efforts to preserve substantially intact their business
organizations, to keep available the services of their officers,
employees and landlords and to maintain their current relationships
with suppliers, contractors, customers and others having significant
business relationships with them as well as with officials and
employees of government agencies and other entities which regulate
or affect the Business. Without limiting the generality of the
foregoing, and except as otherwise expressly provided in this
Agreement, prior to the Effective Time, without the prior consent of
the Purchasers, to be given in writing to the extent practicable,
(which consent will not be unreasonably withheld), the Sellers will,
to the extent permitted under applicable laws, use their best
endeavours not to permit either Target Company or any of the
Subsidiaries to
a) amend its certificate of incorporation or bylaws (or other
similar charter documents) or partnership agreement, as the
case may be;
b) authorize for issuance, issue, sell, deliver or agree or commit
to issue, sell or deliver (whether through the issuance or
granting of options, warrants, commitments, subscriptions,
rights to purchase or otherwise) any capital stock of any class
or any other securities of, or other ownership interests in,
any of the Target Companies or any of the Subsidiaries or amend
any of the terms of any such securities or agreements
outstanding on the date hereof;
c) purchase or otherwise acquire, or propose to purchase or
otherwise acquire, directly or indirectly, any shares of its
capital stock or other ownership interests;
d) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof)
in respect of its capital stock or other ownership interests,
or redeem or otherwise acquire any of its securities or other
ownership interests;
e) (i) except in the ordinary course of business consistent with
prior practice under existing lines of credit or reimbursement
agreements, incur or assume any long-term or short-term debt
owing to any unaffiliated third party; (ii) assume, guarantee,
endorse or otherwise become liable (whether directly,
contingently or otherwise) for the obligation of any other
person except in the ordinary course of business; or (iii) make
any loans, advances or capital contributions to, or investments
in, any person that is not a Subsidiary, except for the
investment of cash in temporary investments in the ordinary
course of business consistent with prior practice;
f) except in the ordinary course of business consistent with prior
practice and except as otherwise required by applicable law
enter into, adopt or amend any bonus, profit sharing,
compensation, severance, termination, stock option, stock
appreciation right, restricted stock, performance unit, pension
retirement, deferred compensation, employment or other employee
benefit agreements, trusts, plans, funds or other arrangements
for the benefit or welfare of any director, officer or
employee, or (except, in the case of non-executive employees,
for normal increases in the ordinary course of business that
are consistent with past practice and that, in the aggregate,
do not result in a material increase in benefits or
compensation expense to the Target Companies or Subsidiaries)
increase in any manner the compensation or fringe benefits of
any director, officer or employee or pay any benefit not
required by any existing plan or arrangement (including,
without limitation, the granting of stock options, stock
appreciation rights, shares of restricted stock or performance
units) or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing;
g) authorize, recommend, propose or announce an intention to enter
into any agreement (including any agreement in principle) with
respect to any merger, consolidation or business combination,
any acquisition of a material amount of assets or securities of
any other entity, or any disposition of a material amount of
its own assets or securities or any material change in its
capitalization, except for acquisitions of assets or businesses
made in accordance with the capital budgets in effect on the
date of this Agreement;
h) except as permitted by clause (i) below, acquire, sell, lease,
encumber, transfer or dispose of any assets outside the
ordinary course of business or any assets which are material to
any of the Target Companies or any of the Subsidiaries or enter
into any material commitment or transaction outside the
ordinary course of business consistent with prior practice;
i) authorize or make any individual capital expenditure in excess
of DM 4 million except for obligations incurred prior to the
date hereof or pursuant to the capital budgets in effect on the
date of this Agreement;
j) make any tax elections or settle or compromise any income tax
liability or, except as required by law or applicable
accounting standards, change any accounting policies or
procedures;
k) other than in the ordinary course of business consistent with
prior practice, waive any rights of substantial value or make
any payment, direct or indirect, of any material liability of
any of the Target Companies before the same comes due in
accordance with its terms; or
l) fail to maintain their existing insurance coverage of all types
in effect or, in the event any such coverage shall be
terminated or lapse, to the extent available at reasonable
cost, procure substantially similar substitute insurance
policies which in all material respects are in at least such
amounts and against such risks as are currently covered by such
policies.
(m) enter into any new contract or arrangement other than in the
ordinary course of business consistent with prior practice.
(2) During the period from the date of this Agreement to the Effective
Time, the Sellers will cause the Target Companies to notify the
Purchaser of any significant change in the normal course of business
or operations of any of the Target Companies or any of the
Subsidiaries and of any governmental complaints, investigations or
hearings (or communications indicating that the same may be
contemplated), or the institution or threat or settlement of
significant litigation, in each case involving any of the Target
Companies or any of the Subsidiaries, and to keep the Purchaser
fully informed of such events.
14.
INDEMNIFICATION
(1) If and to the extent that one or several of the representations or
warranties given by the Sellers in this Agreement to the Purchasers
should be inaccurate, the Purchasers are entitled to claim
restitution of the warranted situation or, if and to the extent that
this is not possible or if and to the extent restitution is refused
by Sellers, a reduction of the Final Purchase Price. The claim for
such a reduction exists in the amount that is necessary to establish
the situation as it has been represented and warranted, or, if that
is not possible, in the amount which is inevitably necessary to make
up for the foreseeable direct damage directly attributable to the
breach of warranty. In determining the amount of damages, no missed
profit (entgangener Gewinn) or other consequential damage
(mittelbarer oder Folgeschaden) shall be included. If damage occurs
in a Subsidiary which is not a wholly owned subsidiary of the
Sellers, the claim for the reduction of purchase price shall be
limited to the percentage of the Sellers' shareholding in such
company.
(2) Except as otherwise provided in this Agreement, the right of the
Purchasers to assert a claim against the Sellers under subcl. (1)
above or under any other provision or in connection with this
Agreement shall expire on March 31, 1999 (statute of limitation,
Verjahrungsfrist). Required and sufficient for complying with this
period is the assertion of a claim against each of the Sellers in
writing setting forth conclusively in reasonable detail the facts
that support the claim and specifying in detail the amount thereof.
The assertion of a claim in this manner constitutes an interruption
(Unterbrechung) of the running of the above term, for a period of
six months, solely in respect of the claim asserted and the factual
basis therefor.
(3) During the period under subcl. (2) above the Purchasers agree to
give Sellers prompt notice, in form and substance as provided in
subcl. (2) above, of any event, or any written claim by a third
party of which either Purchaser, a Target Company or a Subsidiary
obtains knowledge, which could give rise to any damage, liability,
loss, cost or expense as to which it may request a purchase price
reduction under subcl. (1) of this Section in order to provide
Sellers with the opportunity to bring about the warranted situation
or to mitigate the damages, but the failure to give such prompt
notice shall not affect Purchasers' rights hereunder, except to the
extent the Sellers were materially and adversely prejudiced thereby.
(4) Notwithstanding subcl. (2) above
a) the statute of limitations for asserting any deficiencies in
legal title to the shares sold and transferred pursuant to this
Agreement shall be five years from December 31, 1997;
b) the statute of limitations for asserting a claim under Section
11 (17) hereof shall be the lesser of (i) 75 months from
December 31, 1997, and (ii) the expiration of the applicable
statute of limitations for claims by the U.S. Government which
results in a liability under Section 11 (17);
c) the statute of limitations for asserting a claim under Section
11.11 c) hereof, to the extent such claim arises with respect
to ERISA Affiliates, shall be the lesser of (i) 60 months from
December 31, 1997 and (ii) the expiration of the applicable
statute of limitations for claims under ERISA pursuant to
Section 413 of ERISA;
d) except to the extent provided for in subcl. c) above, the
statute of limitations for asserting a claim under Section
11.11 hereof shall be 30 months from December 31, 1997;
e) the statute of limitations for asserting a claim under Section
10 hereof shall (i) in respect of Siliconix Inc. and its
Subsidiaries be three months after the applicable statue of
limitations under applicable law has run, and shall (ii) in
respect of TS GmbH and its Subsidiaries be three months after
the date of the finality of the tax assessment after the
respective tax audit.
(5) The principles of offsetting benefits from damaging events (e.g.
insurance payments, offsets of reserves and valuation adjustments
established in the Final Balance Sheet, tax effects etc.) against
the damage (Vorteilsausgleichung) shall be applied. This shall
include, but not be limited to the following:
a) Provisions and reserves contained in the Final Balance Sheet
shall be applied.
b) If after the Effective Time any of the Target Companies or any
of the Subsidiaries should reduce the scope of its insurance
vis-a-vis the current status, it shall be assumed, for purposes
of applying the rules on offsetting losses against benefits
from the damaging events (Vorteilsausgleichung), that no such
reduction of the scope of insurance has occurred. This
assumption shall not apply to any reduction in the scope of
insurance of any of the Target Companies or the Subsidiaries
(i) if such reduction is the result of an extraordinary
industry-wide increase of the premiums charged for maintaining
the relevant insurance coverage at current levels and if, as a
result of such increase, a substantial number of businesses
competing with the Business have similarly reduced the scope of
their respective insurance, or (ii) if a type of insurance
previously carried by a Target Company or a Subsidiary is no
longer available throughout the insurance industry.
(6) A claim under subcl. (1) can be raised only if and to the extent the
amount of a justified individual claim exceeds the minimum amount of
DM 250,000 and if and to the extent the total amount of all
individual claims raised (if and to the extent they each exceed DM
250,000) exceeds DM 7 million in the aggregate.
(7) The Sellers shall be liable for breaches of contract (default,
impossibility, other breach of contract (vertragliche
Leistungsstorungen, Verzug, Unmoglichkeit, positive
Vertragsverletzung) as well as under any and all other statutory and
contractual liability provisions (e.g. culpa in contrahendo, torts)
(aus allen anderen gesetzlichen oder vertraglichen
Haftungstatbestanden, z.B. culpa in contrahendo, unerlaubte
Handlung) only if such breach was caused by the Sellers, or either
one of them, intentionally or with gross negligence. If and to the
extent permitted by applicable law, the Sellers' liability is
limited to reimbursement of the foreseeable direct damage caused
directly by the intentional or gross negligent act or omission of
the Sellers.
(8) Rescission because of error (Irrtumsanfechtung) and termination
pursuant to ss. 463 German Civil Code ("BGB") (Wandelung) are
excluded. Not excluded are only the statutory termination rights
(gesetzliche Rucktrittsrechte) pursuant to ss.ss. 323 et seq. BGB.
Sellers on the one side and Purchasers on the other side may only
jointly exercise their respective termination right.
(9) All other claims of the Purchasers against the Sellers under or in
connection with this Agreement are excluded, to the extent permitted
under applicable law, except as expressly provided in this Section
14.
(10) Except for any liability of Sellers pursuant to subcl. (14) below,
and any liability arising from a deficiency in legal title of the
German Common Stock or the U.S. Shares, and except for any
compensation payable by the Sellers pursuant to Section 6 (5), the
Sellers' total liability to pay damages under and in connection with
this Agreement and its consummation is limited to a maximum amount
equal to 10 % of the Preliminary Purchase Price.
(11) Claims relating to or resulting from warranties which are given
herein "to the knowledge of ...." or "have no knowledge ...." or
are in some other way linked to "knowledge", can be asserted only
if such warranties in a provable way were given despite the actual,
not deemed or constructive, knowledge (tatsachliches, nicht
zugerechnetes oder fiktives Wissen) of the director(s)
(Geschaftsfuhrer) of the warranting company, of the inaccuracy of
the warranty so given. The phrase "to the knowledge of ....., there
is no ......" or phrases of similar construction are to be
interpreted to mean that the party making the statement is not aware
of any facts which would make the statement inaccurate. Knowledge of
Messrs. Hans-Peter Eberhardt, Dr. Frank Heinricht, Dr. Gerhard
Bolenz, Richard Kulle, Michel Thouvenin, if any, shall be deemed to
be knowledge of the Sellers. The warranties which are given "to the
knowledge" or "have knowledge" or are in some other way linked to
"knowledge" or "no knowledge" are given by the person or persons
after such person or persons having conducted reasonable inquiries
expected from a diligent businessman (ordentlicher Geschaftsmann).
(12) If between the date of this Agreement and the Closing
representations and warranties given herein should turn out to be
inaccurate to such an extent and with such a significance that the
circumstances resulting therefrom make it absolutely unacceptable to
the Purchasers to merely have claims for breach of warranty or to
expect that the Sellers will be able to redress such claims, or if
within this period an extraordinary aggravating event of
corresponding significance with consequences which would be
absolutely unacceptable should occur, the parties to this Agreement
shall negotiate with each other with the goal of reaching an
understanding and agreement on the changed circumstances
(Sprechklausel). It is hereby clarified that this subcl. (12) shall
apply in circumstances which are such that the concept of "Wegfall
der Geschaftsgrundlage" (subsequent disappearance of fundamental
basis) would apply.
(13) The Sellers shall not be liable for an unintentional inaccuracy of a
representation or warranty to the extent that the inaccuracy has
been disclosed to the Purchaser by way of the information contained
in this Agreement, its Schedules, any of the documents described or
referred to in Section 11 (30) or any documents delivered to
Purchasers prior to the execution of and as confirmed in this
Agreement (for example, the documents referred to in Section 11 (11)
hereof).
(14) If and to the extent either Target Company or any of the
Subsidiaries suffers any liability or incurs any costs or expenses
relating to environmental matters, whether covered by Section 11 (7)
or any other warranty of Sellers set forth in this Agreement, the
only remedy of the Purchasers, in lieu of the first sentence of
Section 14 (1), shall be a compensation claim under the terms and
subject to the conditions set forth in paragraphs a) through d) of
this subcl. (14):
a) If and to the extent that a Target Company or a Subsidiary
after the Transfer Date, is ordered with final and binding
effect by an order, judgement or similar decree issued by a
competent governmental agency or court of law to eliminate
Inherited Environmental Liability (as defined hereinafter), and
if the relevant Target Company or Subsidiary or any of the
Purchasers or a company affiliated with a Purchaser has not
taken the initiative or otherwise promoted the issue of the
order, judgement or similar decree (compliance with duties to
report, the failure of which is subject to fines or penalties,
shall not constitute an initiation or promotion in the
foregoing meaning) the Sellers shall indemnify (in this
context: freihalten) the relevant Target Company or Subsidiary.
The duty to indemnify shall exist only with respect to costs of
the measures necessary for the relevant Target Company or
Subsidiary to comply with the order, judgement or similar
decree (including any necessary investigation costs,
attorneys fees and court costs arising in connection with
the defense, if any).
(b) The obligation of Sellers pursuant to subcl. a) above shall
exist only with respect to costs for which subcl. a) above
provides for indemnification and only if and to the extent such
costs, after application of the principles set forth in subcl.
(5) above, exceed DM 3 million and shall be limited to 70 % of
the exceeding amount of such costs and shall not exceed DM 63
million in the aggregate.
c) Notwithstanding subcl. (2) above, the statute of limitations
for asserting a claim for indemnification under this subcl.
(14) shall be 63 months from the Effective Time.
d) "Inherited Environmental Liability" means any Environmental
Claim resulting from accumulations of Hazardous Materials
existing on the day of Closing in the ground, in buildings, in
other components of real property or in ground water which
under relevant provisions of Environmental Law are not allowed
to be present and the elimination of which can legally be
demanded by a governmental agency or a third party.
(15) It is hereby clarified that the costs of the closing down (except
possible environmental costs) of the 4-inch-fab in Santa Clara and
the relocation thereof to Southeast Asia shall not fall under any
warranty or indemnification provision in this Agreement.
(16) In Section 7 (3) it has been agreed that the Final Purchase Price
shall in no event be more than 115 % of the Preliminary Purchase
Price. The Purchasers hereby agree that if the Final Purchase Price
would be higher without such limit, any payment obligations of the
Sellers vis-a-vis the Purchasers in connection with this Agreement
up to such excess amount shall be set off against such excess
amount.
15.
COOPERATION, ACCESS TO INFORMATION
(1) Prior to the Effective Time and to the extent permitted by
applicable law, the Sellers will cause the Target Companies to
afford to the Purchaser and its authorized representatives
reasonable access during normal business hours to all office,
production, engineering and service facilities and other business
properties and to all books and records of the Target Companies and
the Subsidiaries, will permit the Purchaser to make such inspections
thereof, during normal business hours, as the Purchaser may
reasonably request and will cause the officers of the Target
Companies and the Subsidiaries to furnish the Purchaser with such
financial and operating and military testing data and other
information with respect to the Business, assets, properties and
personnel of the Target Companies and the Subsidiaries as the
Purchaser may from time to time reasonably request; provided,
however, that any such investigation shall be conducted in such a
manner as not to interfere unreasonably with the operation of the
business of the Target Companies and the Subsidiaries.
Prior to the Effective Time, the Sellers will, to the extent
permitted by applicable law, cause the Target Companies to afford
the Purchasers and their authorized representatives access to major
distributors, customers and vendors of the Target Companies deemed
necessary by the Purchasers and the Sellers to facilitate the
transfer of the Business, provided that the Purchasers or their
authorized representatives shall have such access only if
accompanied by an authorized representative of Sellers.
(2) The Purchaser shall hold, and shall cause its officers, directors,
employees, representatives, advisors and agents ("PURCHASER'S
REPRESENTATIVES") to hold in strict confidence in accordance with
the terms of the Confidentiality Agreement dated September 10, 1997,
between Goldman, Sachs & Co. oHG ("GOLDMAN SACHS") for itself and
on behalf of Daimler-Benz Aktiengesellschaft ("DAIMLER BENZ") (the
"CONFIDENTIALITY AGREEMENT") a copy of which is attached hereto as
EXHIBIT 15.2, all documents and information furnished to the
Purchaser by Goldman Sachs, the Sellers, any of the Target Companies
or any of the Subsidiaries or their respective representatives,
consultants or advisors in connection with the transactions
contemplated by this Agreement.
(3) In the event of the termination of this Agreement, the Purchaser
shall, and shall cause each of the Purchaser's Representatives to,
return promptly or destroy every document furnished to them by
Goldman Sachs, the Sellers, the Target Companies or Subsidiaries in
connection with the transactions contemplated hereby and any copies
thereof, which may have been made, other than documents filed with
the SEC or other government agencies which are otherwise publicly
available.
(4) Subject to the terms and conditions herein provided, each of the
parties hereto agrees to use its commercial best efforts to take, or
cause to be taken, all action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and
regulations to consummate and effect the transactions contemplated
by this Agreement, including, without limitation, obtaining all
required consents and approvals, making all required filings and
applications and complying with or responding to any requests by
governmental agencies. For purposes of the foregoing sentence, the
obligation of the Sellers and the Purchaser to use "best efforts"
to obtain waivers, consents and approvals to loan agreements, leases
and other contracts shall not include any obligation to agree to an
adverse modification of the terms of such documents or to prepay or
to incur additional obligations to such other parties.
(5) From time to time the Sellers will, or will cause the Target
Companies and the Subsidiaries to, execute and deliver such
documents to the Purchaser as the Purchaser may reasonably request
in order more effectively to consummate the transactions
contemplated hereby, to the extent permitted under applicable laws.
From time to time the Purchaser will, at its own expense, execute
and deliver such documents as the Sellers, the Target Companies or
the Subsidiaries may reasonably request in order more effectively to
consummate the transactions contemplated hereby. In case at any time
after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, each party to
this Agreement will take or cause its appropriate officers and
directors to take all such necessary or desirable actions.
(6) The Purchaser and the Sellers will consult with each other before
issuing any press release or otherwise making any public statements
with respect to this Agreement or the transactions contemplated by
this Agreement, and neither the Sellers nor the Purchaser shall
issue any such press release or make any such public statement prior
to such consultation, except as may be required by law or by
obligations pursuant to any listing agreement with any national
securities exchange or the National Association of Securities
Dealers, Inc. in the U.S. or any rules or regulations of a
securities exchange in any other country upon which the securities
of such issuer are traded.
16.
FILINGS, COMPLIANCE WITH ANTITRUST LAWS
(1) The Purchasers and the Sellers shall use their best efforts to file,
or cause their respective "ultimate parent entity" to file, as soon
as practicable, with the FTC and the Department of Justice pursuant
to the HSR Act and with the German Federal Cartel Office pursuant to
the German GWB and any other antitrust or cartel authority having
jurisdiction over the transactions contemplated hereby all requisite
documents and notifications in connection with the transactions
contemplated by this Agreement and to respond as promptly as
practicable to all inquiries or requests for additional information
or documentation received from the FTC, the Department of Justice,
the German Federal Cartel Office or any other governmental authority
in connection with antitrust matters. The Purchaser and the Sellers
will coordinate and cooperate with one another in exchanging such
information and reasonable assistance as another may request in
connection with all of the foregoing.
(2) In order to consummate the transactions contemplated by this
Agreement, the Purchaser shall promptly take all steps (including
executing agreements and submitting to judicial or administrative
orders) to secure all domestic and foreign government antitrust and
cartel clearances (including using its best efforts to avoid or set
aside any preliminary or permanent injunction or other order of any
federal or state court of competent jurisdiction or other
governmental authority, including, without limitation, and to the
fullest extent necessary to secure such government antitrust and
cartel clearances, agreeing to divest of such of the Target
Companies' and the Subsidiaries' assets and businesses (or, in lieu
thereof, approximately equivalent assets and businesses of the
Purchaser) as are necessary to permit the Purchaser otherwise fully
to consummate the transactions contemplated by this Agreement,
including holding separate such assets and businesses pending any
such divestiture, or accepting other conditions, restrictions,
limitations or agreements affecting the Purchaser's exercise of full
rights of ownership of the shares or the assets and business of the
Target Companies and the Subsidiaries.
(3) The Sellers shall have the continuing obligation promptly to
supplement or amend the Schedules delivered by the Sellers pursuant
to this Agreement, and the Purchaser shall have the continuing
obligation promptly to supplement or amend the Schedules delivered
by the Purchaser pursuant to this Agreement, with respect to any
matter hereafter arising or discovered, which, if existing or known
at the date hereof, would have been required to be set forth or
described in such Schedules.
17.
PERFORMANCE GUARANTEES, REPAYMENT OF IC ACCOUNTS
(1) In order to support the business of the Target Companies and the
Subsidiaries, Daimler Benz and/or companies affiliated with it (the
"DAIMLER BENZ COMPANIES") have issued performance guarantees,
performance bonds, comfort letters, letters of credit and similar
instruments (collectively the "PERFORMANCE GUARANTEES"), or have
entered into agreements or arrangements with financial institutions
to provide loans, other finance or Performance Guarantees (the
"GUARANTEE ARRANGEMENTS") to the Target Companies and the
Subsidiaries or for the benefit of their customers or creditors. The
presently outstanding Performance Guarantees and Guarantee
Arrangements (including current amounts) are set forth on Schedule
17.1.
(2) Subject to subcl. (5) below, on or before the date of Closing, the
Purchaser shall enter into one or more assignment and assumption
agreements in form and substance satisfactory to the Daimler Benz
Companies, the Sellers and their counsel, with the Daimler Benz
Companies and the issuer of such Performance Guarantees or Guarantee
Arrangements and the beneficiaries thereof pursuant to which the
Purchaser shall assume all liabilities and obligations of the
Daimler-Benz Companies in respect of all Performance Guarantees and
Guarantee Arrangements outstanding at the Effective Time
(collectively the "ASSIGNMENT AND ASSUMPTION AGREEMENTS"). Subject
to subcl. (5) below, the Purchasers undertake with the Sellers to
deliver such bank guarantees or other agreements or instruments from
reputable financial institutions, or such other collateral, and to
do such things and deliver such additional documents as the issuers
and the beneficiaries of the Performance Guarantees or the parties
to the Guarantee Arrangements in their sole discretion may
reasonably require in order to release and discharge the Daimler
Benz Companies from all liabilities and obligations arising out of
or relating to the Performance Guarantees or the Guarantee
Arrangements for the time from the Transfer Date on.
(3) If and to the extent that the consent of the issuer or issuers and
of the beneficiary or beneficiaries of any such Performance
Guarantees or Guarantee Arrangements with the release of the Daimler
Benz Companies from any liabilities or obligations arising out of or
relating to the Performance Guarantees or Guarantee Arrangements
will not have been obtained on or before the Effective Time,
a) the Assignment and Assumption Agreements shall be entered
into promptly after the Effective Time;
b) the Purchaser shall,
(i) with effect from, on and after the Transfer Date indemnify the
Daimler Benz Companies and the Sellers against and hold
themfree and harmless (aa) from any liabilities and obligations
and claims raised against them arising out of or relating to
the Performance Guarantees and the Guarantee Arrangements,
including, but not limited to, reasonable costs of counsel and
other advisors and representatives and costs and expenses of
litigation, and (bb) from all losses and damages, costs and
expenses (incl. reasonable attorney's fees and expenses)
suffered by the Daimler Benz Companies and the Sellers
resulting from the fact that they were not released and
discharged from liabilities and obligations arising out of or
relating to the Performance Guarantees and the Guarantee
Arrangements as contemplated by Section 17 (2) above,
(ii) upon first written demand by the Daimler Benz Companies or
one of the Sellers reimburse the Daimler Benz Companies
for any payments which it had to make or advance on
account of any liabilities or obligations arising out of
or relating to the Performance Guarantees or the Guarantee
Arrangements;
c) the Purchaser shall, at Closing, for purposes of securing any
and all possible claims which the Daimler Benz Companies may
then or thereafter have against the Purchaser pursuant to
subcl. b) above, deliver to Sellers, on behalf of the Daimler
Benz Companies, such bank guarantees or other agreements or
instruments from reputable financial institutions, or such
other collateral, as the Sellers, in connection with the
Daimler Benz Companies, in their sole reasonable discretion may
require.
(4) As of the Transfer Date, the cash concentration procedures presently
in operation with respect to certain of the Target Companies and the
Subsidiaries will be discontinued and all financial indebtedness of
the Target Companies and the Subsidiaries with Daimler Benz existing
on the Transfer Date shall be settled.
a) Daimler Benz will declare due for repayment on the Transfer
Date the loan granted by it to TS GmbH (approximately DM 100
million), and any other loans which may have been extended by
Daimler Benz to either of the Target Companies or the
Subsidiaries, and include the amount or amounts thereof,
including accrued interest thereon, in TS GmbH's DM IC account
with Daimler Benz. If such loan is denominated in a currency
other than deutsche marks, the conversion set forth in subcl.
b) below shall be employed, provided that a loan extended by
Daimler Benz Capital Inc. ("DBCI") in USD to Siliconix Inc. or
any of the Subsidiaries shall not be converted but entered
directly into Siliconix Inc.'s USD IC account maintained with
DBCI.
The foreign exchange hedging transactions concluded by TEMIC
Semiconductors Itzehoe GmbH with Daimler Benz AG and specified
on SCHEDULE 17.4A shall be closed out and settled in cash,
irrespective of their original maturity dates. The close out
shall commence one business day prior to the day of the
Effective Time. The settlement date shall be the Transfer Date.
On the close-out date, each existing forward contract shall be
valued at the respective market price. The current market price
shall be computed from the official Frankfurt fixing rate
(Mittelkurs an der Frankfurter Borse) on the close-out date for
the respective currency, adjusted for the forward
premium/discount applicable to the respective maturity date of
the forward contracts. The differential amounts calculated from
the comparison between the respective market value and the
value of the hedging transaction originally concluded shall be
discounted to the settlement date. The discounted differentials
shall be aggregated to the total offsetting amount and shall be
debited/credited to the DM IC account of TS GmbH prior to the
final settlement of this account.
b) Daimler Benz will, on the Transfer Date, close all foreign
currency IC accounts of TS GmbH and of those of the
Subsidiaries for which it maintains such IC accounts in
Germany. The foreign currency amounts will be converted to
deutsche marks at the official quoted exchange rate (amtlicher
Mittelkurs) in Frankfurt am Main on the date of the Effective
Time. The amounts converted into German currency will be
entered into the DM IC accounts of TS GmbH and of the
Subsidiaries concerned.
c) Three banking days prior to Closing, the Sellers or Daimler
Benz AG shall notify the Purchasers of
- the likely balance in the DM IC accounts of TS GmbH and
the Subsidiaries concerned kept with Daimler Benz AG as of
the Transfer Date, and
- the likely balance in the USD IC account of Siliconix
Inc. kept with DBCI, as of the Transfer Date.
d) The Sellers undertake with the Purchasers that Daimler Benz AG
and DBCI, respectively, shall, within two Business Days after
the Closing account for, as of the Transfer Date,
- the aggregate amount of the actual balances in the DM
IC accounts, and
- the amount of the actual balance in the USD IC account.
e) The Sellers undertake with the Purchasers that Daimler Benz AG
shall, within two Business Days after the Closing, use the USD
payment received by it pursuant to Section 9 (7)
- to settle the actual balance in the USD IC account, and
- to settle the actual aggregate balance in the DM IC
accounts, applying for conversion the official quoted
exchange rate (amtlicher Mittelkurs) in Frankfurt on the
day of Closing.
The interest rate on the amounts to be so settled, applying
from the day of Closing to the day of settlement, shall be the
same as the one which applies to the payment received by
Daimler Benz AG pursuant to Section 9 (7).
f) Any difference between the amount received by Daimler Benz AG
pursuant to Section 9 (7) and the amounts required for the
settlements pursuant to subcl. e) shall be settled between
Daimler Benz AG and the Purchasers by repayment or additional
payment, as the case may be, together with interest thereon at
FIONA from the date of Closing.
(5) Daimler Benz AG may notify the Sellers, preferably no later than 10
days prior to the day of Closing, of bank loans and similar
financial indebtedness of a type which is capable of being repaid
("EXTERNAL BANK DEBT") of the Target Companies and the Subsidiaries
which is secured by Guarantee Arrangements. One week prior to the
day of Closing the Purchasers shall deliver to Daimler Benz AG all
such documents which may be reasonably required to replace from the
Closing on such Guarantee Arrangements, in form and substance
acceptable to the financial institutions which have extended the
External Bank Debt, for the purpose of continuing the External Bank
Debt without any further obligation of Daimler Benz AG. In case such
documents will not be delivered, Daimler Benz AG shall be entitled
to replace the External Bank Debt by IC loans to be entered in the
DM IC accounts or the USD IC account, respectively, which will be
settled pursuant to subcl. (4) above.
18.
SILICONIX INC.
(1) Siliconix Inc. has filed all required statements, forms, reports and
other documents with the Securities and Exchange Commission (the
"SEC") since January 1, 1995 (collectively, the "SEC Reports") all
of which (as they may have been amended prior to the date hereof) as
of their respective filing dates complied in all material respects
with all applicable requirements of the Securities Act of 1993, as
amended (the "Securities Act"), and the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the rules and
regulations thereunder. No SEC Report contained, as of its filing
date, 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 not misleading. Each of the balance
sheets (including the related notes) included in the SEC Reports
fairly represents the consolidated financial position of Siliconix
Inc. and its Subsidiaries as of the respective dates thereof, and
the other related financial statements (including the related notes)
included therein fairly represent the results of operation and cash
flows for the respective fiscal periods then ended, except, in the
case of interim financial statements, for normal year-end audit
adjustments. Each of the financial statements (including the related
notes) included in the SEC Reports has been prepared in accordance
with U.S. generally accepted accounting principles consistently
applied during the period involved, except as otherwise noted
therein, and, in the case of interim financial statements, subject
to normal year-end adjustments and the absence of notes.
(2) For a period of two (2) years after the Effective Time, neither the
Purchasers nor any affiliate of the Purchasers shall acquire, or
offer to acquire, beneficial ownership of any shares of Siliconix
Common Stock other than the U.S. Shares, except (i) pursuant to a
tender offer made in conformity with the Exchange Act and the rules
and regulations promulgated thereunder, including without limitation
Regulation 14D, in which the price per share paid is not less than
an amount per share in cash equal to the purchase price per share
paid by the Purchasers for the U.S. Shares pursuant to this
Agreement and as a result of which the Purchaser becomes the
beneficial owner of not less than 95 % of all outstanding shares of
Siliconix Common Stock, or (ii) pursuant to a merger transaction
approved by the Board in which the price per share paid is not less
than an amount per share in cash equal to the purchase price per
share paid by the Purchasers for the U.S. Shares pursuant to this
Agreement.
19.
OTHER COVENANTS
(1) The Purchaser covenants and agrees that it shall file promptly the
application for approval pursuant to ss. 3 Wahrungsgesetz.
(2) Licensing of intellectual property rights (not including names and
trademarks)
a) On or before the Closing, Sellers shall cause Licentia
Patent-Verwaltungs-Gesellschaft mbH and TS GmbH to enter into a
license agreement with respect to the intellectual property
rights listed on SCHEDULE 19.2A, substantially in the form of
the draft agreement attached to Schedule 19.2a.
b) On or before the Closing, Sellers shall cause Daimler Benz AG
and TS GmbH to enter into a cross license agreement with
respect to the intellectual property rights listed on SCHEDULE
19.2B, substantially in the form of the draft agreement
attached to Schedule 19.2b.
c) On or before the Closing, the German Seller shall, and shall
cause TS GmbH to, enter into a cross license agreement with
respect to certain intellectual property rights, substantially
in the form of the draft agreement attached to SCHEDULE 19.2C.
(3) Mutual "favored vendor" status:
a) German Seller contemplates that, for a period of not less than
one year from the date of this Agreement, it will purchase its
requirements of goods manufactured by the Target Companies and
the Subsidiaries, provided that such goods are offered on
competitive terms and conditions, including, without
limitation, competitive quality and pricing.
b) Purchasers contemplate that, for a period of not less than one
year from the date of this Agreement, they will purchase, and
cause the Target Companies, the Subsidiaries and other
affiliates to purchase, their requirements of goods
manufactured by the German Seller and its subsidiaries and
affiliates, provided that such goods are offered on competitive
terms and conditions, including, without limitation,
competitive quality and pricing.
(4) Non-compete covenant
a) Subject to subcl. b) below, Sellers hereby agree that for a
period of 24 months following the date of this Agreement (the
"RESTRICTED PERIOD") Sellers shall not, and shall cause their
affiliates and subsidiaries not to:
(i) engage in developing, producing, selling, marketing or
distributing products competing with the current major
products of the Business;
(ii) have any controlling ownership or equity interest in any
business, entity or enterprise that engages in a material
manner in a business competing with the Business within
the Territory (as hereinafter defined); or
(iii)solicit the employment of any person who at the time is
an employee of the Business (other than one who resigns
voluntarily prior to any such solicitation or is
terminated by the Business after the Closing).
b) Notwithstanding anything to the contrary contained in subcl.
a) above, this agreement is not intended to and shall not be
construed as prohibiting either Seller or any of its
affiliates from:
(i) engaging in and continuing any activity presently
conducted by either of the Sellers or any of their
affiliates which relates to the development, production,
selling, marketing or distribution of products competing
with the products of the Business, and the activities
pursuant to subcls. (9) and (10) below; or
(ii) acquiring the beneficial ownership of less than 10% of the
equity securities of any publicly traded corporation; or
(iii)acquiring any business, entity or enterprise which, as an
incidental portion of its business, engages in a business
which competes with the Business, provided, however, that
the Sellers shall (i) notify Purchasers of a relevant
acquisition not later than 45 days after the date of
completion of the acquisition, (ii) refrain from any
negotiations with any third party before having bona fide
discussions with the Purchasers as to the possibility of
selling the competing portion of the acquired business,
entity or enterprise on reasonable arm's length terms and
(iii) if terms cannot be agreed within 90 days from the
date of notification of the Purchasers, uses commercial
best efforts to dispose of the acquired competing business
(or procure that such business is disposed of) in
accordance with fair market terms to a third party within
12 months of the acquisition, not to exceed the Restricted
Period.
c) For purposes of this Agreement, the ("TERRITORY") shall mean
any state or territory of the United States and any foreign
country or any foreign territory.
(5) Research work at Daimler Benz FT
a) The German Seller has commissioned research work from Daimler
Benz [FT] to be performed in 1998. The work is described in the
German Seller's letter dated November 11, 1997, a copy of which
is attached hereto as EXHIBIT 19.5. The German Seller shall
transfer to TS GmbH, and shall cause TS GmbH to accept, and
Daimler Benz AG to consent to such transfer, the research
commissioned by the German Seller.
b) Daimler Benz AG has assured TS GmbH of its availability for
further research work for TS GmbH in 1999 by a letter a copy of
which is attached as EXHIBIT 19.5.
(6) If in connection with the drop down by the German Seller referred to
in Section 1 (1) and/or the drop down by Philippines old Inc.
referred to in Section 6a, any asset, liability or contractual
relationship which clearly and obviously belongs to the Business
within the meaning of Sections 1 (9) and 11 (26) was, by error or
other mistake, not included in the drop down (hereinafter referred
to as a "Missing Asset"), the Sellers shall cause such Missing Asset
to be transferred to the receiving party (TS GmbH or TSP Inc.). If
the Missing Asset, had it been included in the relevant drop down,
would have been considered in preparing the Final Balance Sheet and,
consequently, would have had an impact on the Final Purchase Price,
the Final Purchase Price shall be adjusted accordingly.
(7) If at any time after the Closing it is anticipated that the German
Seller will cease to exist as a separate legal entity or cease to be
a member of the Daimler-Benz consolidated group, Daimler-Benz AG may
request the Purchasers to release, and the Purchasers hereby agree
that they will release, the German Seller from any and all present
and future liability and contingent liability arising out of or in
connection with this Agreement if Daimler-Benz AG agrees to assume
responsibility for any such actual or potential liability of the
German Seller.
(8) Names and trademarks Telefunken and TEMIC
a) Names
aa) Neither the Purchasers nor any of the Target Companies
or the Subsidiaries shall be entitled to continue the
use of the name Telefunken in any form or context or
place, in particular not as part of a firm name of a
Target Company or a Subsidiary. The Purchasers and the
Sellers agree that the name of the Austrian Subsidiary
shall be changed without undue delay after the date of
this Agreement and that the Austrian Subsidiary shall
change its firm name to "TEMIC Semiconductor (Austria)
Ges.m.b.H".
bb) The Purchasers, the Target Companies and the
Subsidiaries shall be entitled to use the name TEMIC in
their firm names, provided, however, that TEMIC may be
used only in direct connection with the term
Semiconductor so as to read "TEMIC Semiconductor",
pursuant to a licence agreement to be entered into
substantially in the form and with the contents of the
standard name and trademark licence agreement attached
as EXHIBIT 19.9A.
Duration: 10 years from January 1, 1998, termination
upon change of control;
Territory: worldwide;
Royalty: free.
b) Trademarks Telefunken
The right to use the trademarks "Telefunken", "Telefunken Star"
and "TFK" shall be licensed to TS GmbH with the right to grant
sub-licenses to the other Target Company and the Subsidiaries,
substantially in the form and substance of the standard
trademark license agreement attached hereto as EXHIBIT 19.9B.
Licensed products: Semiconductor components of the following
types and classes: All types and classes of transistors,
diodes, integrated circuits and opto-electronic
semiconductor components; not including, however,
semiconductor components based on HgCdTe material for night
vision systems, semiconductor sensor components and
microwave- and high-frequency-components based on GaAs
material (hereinafter the "Product Scope").
Territory: Worldwide
Duration: 10 years, from January 1, 1998, Licensee may
terminate after 5 years, termination in case of change of
control
Royalty: free for 5 years, thereafter 0,8 %.
c) Trademark "TEMIC"
The right to use the trademark "TEMIC" shall be licensed to
TS GmbH with the right to grant sub-licenses to the other
Target Companies and the Subsidiaries, substantially in the
form of the standard name and trademark license agreement
attached to this Agreement as Exhibit 19.9a.
Licensed products: Product Scope
Territory: Worldwide
Duration: 10 years from January 1, 1998, termination in case
of change of control
Royalty: free.
(9) Development of Competing Products for Research Purposes
The Purchasers agree that the research divisions of Daimler Benz AG
and its affiliates (for purposes of this subcl. (9) and subcl. (10)
below "Daimler Benz") shall continue to have the unrestricted right
to work in the area of the development and manufacture of circuits,
using silicones, silicon germanium and related substances, for
applications in the area of millimeter wave technology for Daimler
Benz's own use. Daimler Benz shall also have the right to
manufacture, for its own use circuits in the micro/millimeter wave
area. Daimler Benz may continue to obtain research funding from the
German Federal Government (primarily, BMBF, BMVg and related
agencies).
(10) Specific semiconductor products/designs including the know-how
pertaining thereto which in the past were developed by TEMIC
Semiconductor on behalf of and paid for by Daimler Benz, and at
present are being, and in the future will be, developed by TS GmbH,
exclusively for and at the expense of Daimler Benz, may also in the
future be used, manufactured, delivered or otherwise disposed of
exclusively for, to or by Daimler Benz. All rights in and
pertaining to such semiconductor products/design belong exclusively
to Daimler Benz. The Sellers shall cause Daimler Benz to enter into
good-faith negotiations with TS GmbH with a view towards Daimler
Benz licensing all or part of such rights to TS GmbH at terms and
conditions to be agreed upon.
20.
LIMITATION OF PURCHASERS' LIABILITY IN CASE OF NON-CLOSING
(1) If the Purchasers do not close the transactions contemplated by this
Agreement on the day on which the Closing is to occur as required
pursuant to the provisions of this Agreement, for whatever reasons,
the Sellers shall be released from all obligations towards the
Purchasers under and in connection with this Agreement, and the
Purchasers and the Guarantor, as joint and several debtors, shall
pay in immediately available funds (i) the amount of DM30,000,000
(in words: Deutsche Mark thirty million) (the "Compensation Amount")
and (ii) the Ericsson Amount (as defined below) (collectively, the "
Compensation Payment"). The Compensation Payment is under German Law
an "Ersetzungsbefugnis".
a) If pursuant to Section 6b Ericsson has purchased or is
entitled to purchase the DASA Shares for a purchase price of
less than DM 20 million, the "Ericsson Amount" shall be the
difference between such purchase price and DM 20 million. If
pursuant to Section 6b, Ericsson has sold, or is entitled to
sell, its shares in Dialogue Ltd. to Delengate Ltd., DASA,
TS GmbH or another company of the Daimler-Benz Group for a
purchase price in excess of DM 1,590,842, the "Ericsson
Amount" shall be the difference between such purchase price
and DM 1,590,842 million.
b) The Compensation Payment shall bear interest at the rate of 8 %
p.a. from March 1, 1998 up to and including the day of receipt
by the Sellers of the Compensation Amount.
21.
MISCELLANEOUS
(1) The Purchasers are part of the Vishay-Group. The Guarantor is
participating in this Agreement for the purpose of ensuring the
Sellers that the Purchasers will comply in a proper and timely
manner with their obligations to the Sellers from and in connection
with this Agreement. The Sellers are jointly and severally liable to
the Purchasers (which are joint creditors (Gesamtglaubiger)) for
claims from or in connection with this Agreement, and the Purchasers
and the Guarantor are jointly and severally liable to the Sellers
(which are joint creditors (Gesamtglaubiger)) for claims from or in
connection with this Agreement.
(2) This Agreement may be amended, modified or supplemented only by
written Agreement of the parties hereto, unless a more stringent
form is required by applicable law.
(3) Except as otherwise provided in this Agreement, any failure of any
of the parties to comply with any obligation, covenant, agreement or
condition herein may be waived by the party or parties entitled to
the benefits thereof only by a written instrument signed by the
party granting such waiver, but such waiver or failure to insist
upon strict compliance with any such obligation, covenant, agreement
or condition shall not operate as a waiver of any other obligation,
covenant, agreement or condition or any subsequent or other failure.
Whenever this Agreement requires or permits consent by or on behalf
of any party hereto, such consent shall be given in writing in a
manner consistent with the requirements for a waiver of compliance
as set forth herein.
(4) If one or several provisions of this Agreement should be or become
invalid or unenforceable, the remaining provisions hereof shall not
be affected thereby. The invalid or unenforceable provision shall be
deemed to be replaced by such valid or enforceable provision as the
parties hereto would have chosen upon entering into this Agreement
in order to reach the commercial effect of the provision to be
replaced if they had foreseen the invalidity or unenforceability at
that time. The foregoing shall also apply to matters as to which
this Agreement is silent (Lucke im Vertrag). If a provision of this
Agreement should be held invalid by a competent court or arbitration
tribunal because of the scope of its coverage (such as territory,
subject matter, time period or amount), said provision shall not be
deemed to be completely invalid but shall be deemed to be valid with
the permissible scope that is nearest to the originally agreed-upon
scope.
(5) The Confidentiality Agreement, the Arbitration Agreement (as
hereinafter defined) and this Agreement, including all Schedules and
Exhibits thereto, constitute the entire agreement and understanding
of the parties hereto in respect of the transaction contemplated by
this Agreement and supersede all other prior agreements and
understandings, both written and oral, among the parties or among or
between any of them with respect to such transactions, provided,
however, that such prior agreements and understandings may to the
extent necessary and appropriate be used in interpretation of this
Agreement. There are no restrictions, promises, representations,
warranties, covenants or undertakings, other than those expressly
set forth or referred to herein.
(6) Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by either of the parties
hereto without the prior written consent of the other party.
(7) Except for fees payable by Daimler Benz AG to Goldman Sachs, the
Sellers hereby represent and warrant to the Purchasers with respect
to the Sellers and the Target Companies and the Subsidiaries, and
the Purchasers and the Guarantor hereby represent and warrant to the
Sellers with respect to the Purchasers and the Guarantor, that no
person or entity is entitled to receive from any of the Sellers, the
Purchasers or the Guarantor, respectively, any investment banking,
brokerage or finder's fees or commissions or fees for financial
consulting or financial advisory services in connection with this
Agreement or the transactions contemplated hereby.
(8) All notices and other communications hereunder shall be in writing,
unless a stricter form is required by applicable law. Notices and
communications shall be deemed to have been received by the
receiving party (i) on the date delivered if delivered in person;
(ii) on the date of the transmission if sent by facsimile to the
addresses set forth below; (iii) on the day following the date of
dispatch if sent by overnight courier; and (iv) five days after
mailing if sent by registered or certified mail (return receipt
requested). The receiving party has the right to prove that actual
receipt occurred at a later date. Notices and communications shall
be sent only in the foregoing manner. Except in the case of personal
delivery, a further condition to the effectiveness of receipt shall
be that the notice or communication be sent to the following
addresses, or to such other addresses of which a party may have
informed the other party from time to time, which change of address
shall be effective only when received by the other parties:
a) If to the Purchasers:
Vishay Intertechnology, Inc.
63, Lincoln Highway
Malvern, PA 19355, U.S.A.
Telephone: (610) 644-1300
Facsimile: (610) 296-0657
Attention: Avi D. Eden
With a copy to each of:
1. Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, NY 10022, U.S.A.
Telephone: (212) 715-9100
Facsimile: (212) 715-8000
Attention: Mark B. Segall, Esq,.
2. Hasche Eschenlohr Peltzer
Riesenkampff Fischotter
Niedenau 68
60325 Frankfurt am Main
Telephone: (069) 71 70 10
Facsimile: (069) 71 70 11 10
Attention: Dr. Harald Jung
b) If to the Sellers:
TEMIC TELEFUNKEN microelectronic GmbH
Theresienstrasse 2
74072 Heilbronn
Telephone: (07131) 67 29 43
Facsimile: (07131) 67 24 89
Attention: Geschaftsfuhrung
Daimler-Benz Technology Corporation
375 Park Avenue, Suite 3001
New York, N.Y. 10152, U.S.A.
Telephone: (212) 909-9700
Facsimile: (212) 308-4252
Attention: President
With a copy to each of:
1. Daimler Benz Aktiengesellschaft
Konzernentwicklung
70546 Stuttgart
Telephone: (0711) 17-9 23 46
Facsimile: (0711) 17-9 44 13
Attention: Dr. Matthias Henke
2. Skadden Arps Slate Meagher & Flom LLP
919 Third Avenue
New York, NY 10022, U.S.A.
Telephone: (212) 735-3000
Facsimile: (212) 735-2000
Attention: J. Michael Schell
3. Boesebeck Droste
Darmstadter Landstrasse 125
60598 Frankfurt am Main
Telephone: (069) 96 236-0
Facsimile: (069) 96 236-100
Attention: Dr. Richard H. Sterzinger
(9) This Agreement shall be governed by and construed in accordance with
the laws of the Federal Republic of Germany (regardless of the laws
that might otherwise govern under applicable principles of conflicts
of law thereof) as to all matters, including but not limited to,
matters of validity, construction, effect, performance and remedies.
The parties to this Agreement have entered into a separate
ARBITRATION AGREEMENT, which is attached to this notarial document
as EXHIBIT 21 and which is hereby repeated in notarial form.
(10) Unless otherwise specified herein, all costs, fees and expenses in
connection with the execution and performance of this Agreement
shall be borne by the party who incurs them, irrespective of whether
this Agreement is actually performed. The Purchasers shall bear any
transfer taxes, sales taxes, notarial fees and fees payable to
governmental or similar agencies relating to antitrust or similar
approvals that arise in connection with this Agreement and its
consummation.
(11) Each of the Sellers and the Purchasers shall receive one exemplified
copy (Ausfertigung) and six certified copies (beglaubigte
Abschriften) of this Agreement and the Sellers on the one side and
the Purchasers on the other side each shall receive four certified
copies of the Reference Deed.
The Notary advised that his responsibility is limited to matters of
German law only and that he does not assume any liability for matters
governed by foreign laws.
The foregoing protocol including its Schedules, Annexes and Exhibits
(save for Exhibits A - G) was read aloud to the appearing parties,
presented to them for review, approved by them and signed by them and the
Notary by own hand as follows:
/s/ Ch. Boucke
- --------------------------------
/s/ Jung
- --------------------------------
/s/ Kastner, Notary
- -------------------------------
SCHEDULE 4.3B
RESIGNATIONS AS OF THE CLOSING TO BE DELIVERED BY U.S.-
SELLER AT CLOSING
_________________________________________________________________
(1) SILICONIX INC. ("SIL")
Hanspeter Eberhardt,
Dr. Westrick and
Dr. Michael Muehlbayer as members of the Board of
Directors
(2) TEMIC NORTH AMERICA INC. ("TMUSA")
none
(3) SILICONIX S.R.1.("SILI")
none
(4) SILICONIX LIMITED ("SILUK")
none
(5) SILICONIX TECHNOLOGY C.V. ("SILTECH")
none
(6) SILICONIX (HONG KONG) LIMITED ("SILHK")
none
(7) SILICONIX (TAIWAN) LIMITED ("SILRC")
none
(8) TEMIC (S) PTE. LIMITED SINGAPORE ("TMSGP")
none
(9) TEMIC JAPAN KK ("TMJ")
Frank Dieter Maier and
Hanspeter Eberhardt as members of the Board of
Directors
(10) SHANGHAI SIMCONIX ELECTRONIC COMPANY LIMITED
("SIMCO")
none
EXHIBIT 21
to Notarial Deed 161/97
of Notary Public Ralph Kastner
ARBITRATION AGREEMENT
between
1. TEMIC TELEFUNKEN microelectronics GmbH, Heilbronn
2. Daimler-Benz Technology Corporation, New York, NY, U.S.A.
3. Daimler-Benz Aerospace Aktiengesellschaft, Ottobrunn
4. Delengate Limited, London, U.K.
5. Vishay TEMIC Semiconductor Acquisition Holdings Corp., Malvern, PA,
U.S.A.
6. Pamela Beteiligungs GmbH, Frankfurt am Main
7. Vishay Intertechnology Inc., Malvern, PA, U.S.A. in respect of
the Stock Purchase Agreement on the Acquisition of the TEMIC
Semiconductor Business covering all contracts and agreements
related thereto. (the "Acquisition Agreements")
1.
(1) The parties of this Arbitration Agreement will conclude today a
"Stock Purchase Agreement on the Acquisition of the TEMIC
Semiconductor Business" with various Schedules and Exhibits (the
"Stock Purchase Agreement") in notarial form.
(2) This Arbitration Agreement applies to all claims and differences of
opinion between the contracting parties regarding the
effectiveness, interpretation and execution of the Acquisition
Agreements including all present and future agreements and
contracts in respect of the subject matter of the Acquisition
Agreements and this Arbitration Agreement between the contracting
parties or some of them, and all such disputes, claims and
differences of opinion shall be finally settled through binding
arbitration by the Arbitration Court according to the terms and
provisions of the Arbitration Agreement.
(3) The jurisdiction of the ordinary courts shall be excluded, except
for special preliminary proceedings (einstweiliger Rechtsschutz)
available in the form of an "Arrest" or an "einstweilige
Verfugung." The Arbitration Court shall also have the competence to
interpret the language of this Arbitration Agreement and to
determine the scope of its competence, with final and binding
effect.
(4) It is the task of the Arbitration Court to ascertain both the state
of fact and of dispute, to settle differences of opinion by
reaching an amicable arrangement or, if it should not succeed
within a reasonable period of time, to impose a decision by way of
an arbitration award.
2.
(1) The Arbitration Court consists of two arbitrators and one
umpire.
(2) Either party may invoke the arbitration by notifying the other
party. The notice shall include a description of the subject matter
of the arbitration, including a specification of the claim to be
settled by the arbitration by amount or value (if no monetary
amount can be specified) and by the requested remedies (damages or
specific performance) and shall contain the nomination of that
party's arbitrator, including stating his address).
(3) The other party (defendant) shall appoint an arbitrator within one
month after receipt of such notice.
(4) If the defendant fails to appoint its arbitrator within the one
month period, the right of appointment will pass to the president
of the Court of Appeals Frankfurt am Main ("OLG") who then shall
appoint the arbitrator upon request of the notifying party
(plaintiff). The same rule is to apply in case that the plaintiff
or the defendant consists of more than one person and such persons
are unable to agree on the arbitrator to be appointed; the request
to the president of the OLG may be filed by one or several
plaintiffs or defendants.
(5) If an arbitrator ceases to be an arbitrator, the party who
appointed such arbitrator shall appoint a new arbitrator by written
notice to the other party within one month. If the party fails to
do so, the preceding subclause shall apply by analogy. If the
umpire ceases to be the umpire, a new umpire shall be appointed in
accordance with the provisions below.
(6) The two arbitrators shall request the two parties to appoint an
umpire jointly. If the parties cannot agree on the person of the
umpire within two weeks after such request, the umpire will be
appointed by the arbitrators jointly. If also the arbitrators
within another two weeks cannot agree on the person of the umpire,
the umpire shall be appointed upon request of one party or one
arbitrator by the president of the OLG. The umpire shall be
qualified to serve as judge and have practical experi- ence in
commercial law matters and be fluent in the English language; the
parties' preference is to appoint a chairman of a senate of a
German court of appeals (Oberlandesgericht).
(7) If the president of the OLG refuses to appoint an arbitrator or the
umpire, the right of appointment shall be with the president of the
Chamber of Commerce Frankfurt am Main.
(8) The members of the Court of Arbitration shall, at no time, not even
in another case, have ever represented the interest of any
plaintiff or defendant. Before accepting the responsibility as
arbitrator or umpire, each arbitrator or umpire shall disclose his
relationship, if any, to the parties and their affiliates or
relatives, or give a statement that no such relationship has ever
existed. The nomination of an arbitrator shall be accom- panied by
such disclosure or statement. Any disclosed or undisclosed
relationship of the arbitrator or umpire with any of the parties,
their affiliates or relatives shall not be a reason to rescind or
in any other way attack the validity of the final arbitration
award.
3.
(1) The Court of Arbitration shall meet in Frankfurt am Main, Germany.
(2) The Court of Arbitration shall render a decision based on the
contractual stipulations among the parties concerned and in
accordance with substantive German law.
(3) In principle the procedure is to be governed by German Civil
Procedure (ZPO). Nevertheless the Court of Arbitration shall
be free in the conduct of its proceeding as far as lawfully
admissible. The arbitration award shall only be rendered
after an oral hearing and is to be provided with reasons. In the
arbitration award the Court of Arbitration shall also adjudi-
cate on the cost pursuant toss.ss. 91 et seq. ZPO.
4.
(1) The members of the Court of Arbitration receive a remuneration
according to the German Solicitors' Fees Schedule. The arbitrators
are entitled to the fees for the first instance and the umpire to
the fees for the Appellate Court.
(2) The Court of Arbitration may require the parties on equal basis to
effect a reasonable advance payment.
5.
(1) The competent court within the meaning of ss. ss. 1045 and 1046 ZPO
for the deposit and enforceability of the arbitration award as well
as all necessary legal aid by ordinary courts shall be the District
Court (Landgericht) at Frankfurt am Main.
(2) If, notwithstanding this Arbitration Agreement, the ordinary courts
have jurisdiction in respect of any dispute among the parties, the
place of jurisdiction shall be Frankfurt am Main.
(3) If an ordinary court reverses an arbitration award, the Arbitration
Agreement shall not be exhausted. The parties shall then recommence
the arbitration in accordance with the above provisions. An
arbitrator or umpire who participated in the previous proceedings
is excluded as arbitrator or umpire in the new proceedings.
6.
(1) The parties hereto are aware that the Stock Purchase Agreement
requires notarial form, and they agree to attach this Arbitration
Agreement as an Exhibit to the Stock Purchase Agreement in order
for it to be notarized.
(2) In respect of the signing authority of the persons signing this
Arbitration Agreement on behalf of the parties hereto reference is
made to the powers of attorney attached to the Stock Pur- chase
Agreement.
Frankfurt am Main, this 16th day of December 1997
For TEMIC TELEFUNKEN microelectronics GmbH, Heilbronn:
/s/ Ch. Boucke
_____________________________________________
For Daimler-Benz Technology Corporation, New York, NY, U.S.A.:
/s/ Ch. Boucke
_____________________________________________
For Daimler-Benz Aerospace Aktiengesellschaft, Ottobrunn:
/s/ Ch. Boucke
_____________________________________________
For Delengate Limited, London, U.K.:
/s/ Ch. Boucke
_____________________________________________
For Vishay TEMIC Semiconductor Acquisition Holdings Corp., Malvern,
PA, U.S.A.:
/s/ Jung
_____________________________________________
For Pamela Beteiligungs GmbH, Frankfurt am Main
/s/ Jung
_____________________________________________
For Vishay Intertechnology Inc., Malvern, PA, U.S.A.:
/s/ Jung
_____________________________________________
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