EMCORE - GELCORE MEMBERSHIP INTEREST PURCHASE AGREEMENT
Published on September 7, 2006
EXHIBIT
2.1
Execution
Copy
_______________________________________________________________________
MEMBERSHIP
INTEREST PURCHASE AGREEMENT
Dated
as
of August 31, 2006
by
and
between
General
Electric Company
and
EMCORE
Corporation
_______________________________________________________________________
TABLE
OF CONTENTS
ARTICLE
I
DEFINITIONS
Section
1.1 Defined
Terms
Section
1.2 Construction
Section
1.3 Schedules
and Exhibits
ARTICLE
II
SALE OF
MEMBERSHIP INTEREST
Section
2.1 Sale
of
the Seller Membership Interest
Section
2.2 Purchase
Price
Section
2.3 The
Closing
Section
2.4 Closing
Deliveries.
ARTICLE
III
REPRESENTATIONS OF SELLER
Section
3.1 Organization,
Existence and Good Standing
Section
3.2 Authority
and Enforceability
Section
3.3 Ownership
and Title of Seller Membership Interest
Section
3.4 No
Violations; Consents and Approvals.
Section
3.5 Litigation.
Section
3.6 Intellectual
Property.
Section
3.7 Brokers'
and Finders' Fees and Certain Other Payments
ARTICLE
IV
REPRESENTATIONS OF PURCHASER
Section
4.1 Organization,
Good Standing and Power
Section
4.2 Authority
and Enforceability
Section
4.3 No
Violations; Consents and Approvals.
Section
4.4 Brokers'
and Finders' Fees
Section
4.5 Litigation
Section
4.6 Investment
Intention
Section
4.7 Investigation
ARTICLE
V
COVENANTS AND AGREEMENTS OF PURCHASER AND SELLER
Section
5.1 Confidentiality
Section
5.2 Public
Announcements/Confidentiality
Section
5.3 No
Implied Representations or Warranties
Section
5.4 Non-Solicitation.
Section
5.5 Non-Competition.
Section
5.6 Tax
Matters.
Section
5.7 Intellectual
Property
Section
5.8 Company-Owned
Equipment.
Section
5.9 Transition
Services.
Section
5.10 Retention
of and Access to Records.
Section
5.11 Further
Assurances.
Section
5.12 Waiver
of
Restrictions.
ARTICLE
VI
SURVIVAL
OF REPRESENTATIONS; INDEMNIFICATION
Section
6.1 Survival
of Representations.
Section
6.2 Seller
Indemnification.
Section
6.3 Purchaser
Indemnification.
Section
6.4 Exclusive
Remedy
Section
6.5 Limitation
on Losses.
Section
6.6 Third
Party Claims
ARTICLE
VII
MISCELLANEOUS
Section
7.1 Expenses
Section
7.2 Governing
Law
Section
7.3 Jurisdiction;
Agents for Service of Process
Section
7.4 Table
of
Contents; Captions
Section
7.5 Notices
Section
7.6 Assignment;
Parties in Interest
Section
7.7 Counterparts
Section
7.8 Entire
Agreement
Section
7.9 Amendments
Section
7.10 Severability
Section
7.11 Third
Party Beneficiaries
Section
7.12 Waiver
of
Jury Trial
Section
7.13 Interpretation
i
EXHIBITS
Exhibit
A
- Form of Assignment
Exhibit
B
- Form of Patent and Patent Application Assignment
Exhibit
C
- Form of Reciprocal License Agreement
Exhibit
D
- Form of Mutual Waiver and Release
Exhibit
E
- Form of Seller's Officer's Certificate
Exhibit
F
- Form of Certificate of the Secretary of Seller
Exhibit
G
- Form of Purchaser's Officer's Certificate
Exhibit
H
- Form of Certificate of Attesting Secretary of Purchaser
i
MEMBERSHIP
INTEREST PURCHASE AGREEMENT
THIS
MEMBERSHIP INTEREST PURCHASE AGREEMENT (this "Agreement")
dated
as of August 31, 2006, is made and entered into by and between General Electric
Company, a New York corporation, acting through the GE Lighting operations
of
its Consumer & Industrial division and having offices at 1975 Noble Road,
Cleveland, OH 44112 ("Purchaser"),
and
EMCORE Corporation, a New Jersey corporation ("Seller"),
having offices at 145 Belmont Drive, Somerset, New Jersey 08873, each of
Purchaser and Seller being the owner of a membership interest in GELcore, LLC,
a
Delaware limited liability company (the "Company").
Seller and Purchaser are sometimes referred to herein individually, as a
"Party"
and
together, as the "Parties".
W
I T
N E S S E T H:
WHEREAS,
Seller and Purchaser have formed the Company pursuant to a certain Transaction
Agreement, dated January 20, 1999, as amended as of January 20, 1999 and as
of
December 13, 2001 (the "Transaction
Agreement");
WHEREAS,
Seller owns a 49% membership interest (the "Seller
Membership Interest")
in the
Company and Purchaser owns the remaining 51% membership interest in the Company;
and
WHEREAS,
Seller desires to sell, and Purchaser desires to purchase, the Seller Membership
Interest pursuant to the terms, and subject to the conditions, set forth in
this
Agreement.
NOW,
THEREFORE, in consideration of the foregoing and the respective representations,
warranties, covenants, obligations and agreements set forth below, the Parties
agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.1 Defined
Terms
.
When
used in this Agreement, the following terms shall have the respective meanings
specified below.
"Affiliate"
shall
mean, with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under common control with, such Person; provided
that, for the purposes of this definition, control (including, with correlative
meanings, the terms controlled by and under common control with), as used with
respect to any Person, shall mean the possession, directly or indirectly, of
the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by Contract or
otherwise.
"Agreement"
has the
meaning set forth in the Preamble.
"Business
Day"
shall
mean any day on which banks located in New York, New York shall be open for
business whether or not authorized or required by Law to be so open for
business.
"Closing"
has the
meaning set forth in Section
2.3.
"Closing
Date"
has the
meaning set forth in Section
2.3.
"Code" shall
mean the United States Internal Revenue Code of 1986, as amended.
"Company"
has the
meaning set forth in the Preamble.
“Company-Owned
Equipment”
has
the
meaning set forth in Section 2.4(a)(iii).
"Confidentiality
Agreement"
shall
mean the confidentiality agreement by and among Purchaser, Seller and the
Company, dated as of May 26, 1999.
"Contract"
has the
meaning set forth in Section
3.4(a).
"Damages"
has the
meaning set forth in Section
6.2(a).
"Emcore
Intellectual Property"
means
for the purposes of this Agreement the Intellectual Property listed on Schedule
3.6(a).
"GAAP"
shall
mean generally accepted United States accounting principles, applied on a basis
consistent with the basis on which the Company's Financial Statements were
prepared.
"GELcore
Intellectual Property"
has the
meaning assigned to such term in the Intellectual Property License Agreement
as
defined below.
"Governmental
or Regulatory Authority"
shall
mean any instrumentality, subdivision, court, administrative agency, commission,
official or other authority of the United States or any other country or any
state, province, prefect, municipality, locality or other government or
political subdivision thereof, or any quasi-governmental or private body
exercising any regulatory, taxing, importing or other governmental or
quasi-governmental authority.
"Guaranty"
shall
mean the Guaranty signed by Seller dated as of February 28, 2006 pursuant to
which Seller has guaranteed 49% of the aggregate obligations and indebtedness
of
the Company under an intercompany revolving loan agreement.
“Illumination
Field”
shall,
for purposes of this Agreement, mean the provision of light of any wavelength
using one or more light sources of any type or nature to brighten, illuminate
and/or enhance the visibility of an object, structure, device, area or space.
For the avoidance of doubt, device backlighting is included in the Illumination
Field.
"Indemnified
Party"
has the
meaning set forth in Section
6.6.
"Indemnifying
Party"
has the
meaning set forth in Section
6.6.
"Intellectual
Property"
has the
meaning assigned to such term in the Intellectual Property License Agreement
as
defined below.
"Intellectual
Property License Agreement"
shall
mean the Intellectual Property License Agreement among Purchaser, acting through
GE Lighting, Seller and the Company, dated as of January 20, 1999, as amended
as
of January 20, 1999.
"Knowledge"
shall
mean, (a) with respect to Seller, actual knowledge after reasonable inquiry
of
the representatives of Seller set forth on Schedule 1.1(a), (b) with respect
to
Purchaser, actual knowledge after reasonable inquiry of the representatives
of
Purchaser set forth on Schedule 1.1(b), and (c) with respect to the Company,
actual knowledge after reasonable inquiry of the representatives of the Company
set forth on Schedule 1.1(c). .
"Law"
shall
mean any statute, law, ordinance, rule or regulation of any Governmental or
Regulatory Authority.
“LED”
shall
mean a light emitting diode.
“LED
Products”
shall
mean products
in the LED development cycle beyond packaged ready devices.
"Lien"
or
"Liens"
shall
mean liens, security interests, options, rights of first refusal, claims,
easements, mortgages, charges, indentures, deeds of trust, rights of way,
restrictions on the use of real property, encroachments, security agreements,
or
any other encumbrances and other restrictions or limitations on use of real
or
personal property or irregularities in title thereto.
"LLC
Agreement"
shall
mean the Limited Liability Company Agreement of the Company, by and between
Purchaser and Seller, dated May 26, 1999.
"Order"
shall
mean any judgment, order, injunction, decree, writ, permit or license of any
Governmental or Regulatory Authority or any arbitrator.
"Party"
and
"Parties"
have
the meanings set forth in the Preamble.
"Permits"
shall
mean all licenses, permits, authorizations, consents, approvals, orders, filings
or registrations required by applicable law to be made with or obtained from
any
Governmental or Regulatory Authority.
"Permitted
Liens"
shall
mean (a) statutory Liens for current taxes or assessments not yet due or
delinquent or the validity of which are being contested in good faith by
appropriate proceedings and as to which adequate reserves in accordance with
GAAP have been established on the Company's books; and (b) mechanics',
carriers', workers' repairmen's and other similar Liens arising or incurred
in
the ordinary course of business with respect to charges not yet due or
payable.
"Person"
shall
mean an individual, a partnership, a joint venture, a corporation, a limited
liability company, a limited liability partnership, a trust, an incorporated
organization, a Governmental or Regulatory Authority or any other entity or
organization.
"Purchase
Price"
has the
meaning set forth in Section
2.2.
"Purchaser"
has the
meaning set forth in the Preamble.
"Purchaser
Disclosure Schedule"
has the
meaning set forth in the introductory paragraph to Article
IV.
"Purchaser
Indemnitee"
has the
meaning set forth in Section
6.2(a).
"Purchaser
Material Adverse Effect"
shall
mean any change, event or occurrence that materially impairs Purchaser's ability
to consummate the transactions contemplated hereby.
"Representatives"
shall
mean the Affiliates, directors, officers, employees and representatives of
a
Person.
"Securities
Act"
has the
meaning set forth in Section
4.6.
"Seller"
has the
meaning set forth in the Preamble.
"Seller
Disclosure Schedule"
has the
meaning set forth in the introductory paragraph to Article
III.
"Seller
Indemnitee"
has the
meaning set forth in Section 6.3.
"Seller
Material Adverse Effect"
shall
mean any change, event or occurrence that materially impairs Seller's ability
to
consummate the transactions contemplated hereby.
"Seller
Membership Interest"
has the
meaning set forth in the Recitals.
"Tax(es)"
shall
mean any tax or similar governmental charge, impost or levy (including, without
limitation, income taxes, franchise taxes, transfer taxes or fees, sales taxes,
use taxes, gross receipts taxes, value added taxes, employment taxes, excise
taxes, ad valorem taxes, property taxes, withholding taxes, payroll taxes,
minimum taxes or windfall profit taxes) together with any related penalties,
fines, additions to tax or interest imposed by the United States or any state,
county, local or foreign government or subdivision or agency
thereof.
"Tax
Return(s)"
shall
mean any return (including any information return), report, statement, schedule,
notice, form, estimate, or declaration of estimated tax required to be filed
with any Governmental or Regulatory Authority in connection with the
determination, assessment, collection or payment of any Tax.
"Transaction
Agreement"
has the
meaning set forth in the Recitals.
"Transaction
Documents"
shall
mean, collectively, the (a) LLC Agreement, (b) Transaction Agreement, and (c)
the other Ancillary Agreements (as defined in the Transaction Agreement) and
any
annexes, attachments or exhibits to the foregoing.
“Visible
LED Field”
shall
mean the field of use of LEDs emitting wavelengths between 350 and 750
nanometers.
Section
1.2 Construction
.
In this
Agreement, unless the context otherwise requires:
(a) any
reference to writing or comparable expressions includes a reference to facsimile
transmission, e-mail or comparable means of communication;
(b) words
expressed in the singular form shall include the plural and vice versa, words
expressed in the masculine shall include the feminine and neuter gender and
vice
versa;
(c) reference
to day or days are to calendar days;
(d) when
a
reference is made to a section, article, paragraph, exhibit or schedule, such
reference shall be to a section, article, paragraph, exhibit or schedule of
this
Agreement unless clearly indicated to the contrary;
(e) whenever
the words "include", "includes" or "including" are used in this Agreement,
they
shall be deemed to be followed by the words "without limitation";
(f) the
words
"hereof", "herein" and "herewith" and words of similar import shall, unless
otherwise stated, be construed to refer to this Agreement as a whole and not
to
any particular provision of this Agreement; and
(g) a
reference to any Party to this Agreement or any other agreement or document
shall include such Party's predecessors, successors and permitted
assigns.
Section
1.3 Schedules
and Exhibits
.
The
Schedules and Exhibits to this Agreement are incorporated into and form an
integral part of this Agreement.
ARTICLE
II
SALE
OF MEMBERSHIP INTEREST
Section
2.1 Sale
of the Seller Membership Interest
.
Upon
the terms, and subject to the conditions, set forth in this Agreement, Seller
agrees to sell, assign, transfer and deliver to Purchaser on the Closing Date,
and Purchaser agrees to purchase from Seller on the Closing Date, all of
Seller's right, title and interest in the Seller Membership Interest.
Section
2.2 Purchase
Price
.
In full
consideration for the sale by Seller of the Seller Membership Interest,
Purchaser shall pay to Seller at the Closing One Hundred Million Dollars
($100,000,000) (the "Purchase
Price")
in
cash by wire transfer of immediately available funds to an account or accounts
designated in writing by Seller, such designation to be made at least two
Business Days prior to the Closing Date.
Section
2.3 The
Closing
.
The
consummation of the transactions contemplated by this Agreement (the
"Closing")
shall
take place at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four
Times Square, New York, New York 10036, on the date of execution of this
Agreement at 9:00 a.m., New York time, or at such other time as the Parties
may
agree (the "Closing
Date").
Section
2.4 Closing
Deliveries.
(a) Deliveries
by Seller.
At the
Closing, Seller shall deliver or cause to be delivered to Purchaser (unless
previously delivered), the following:
(i) an
assignment in the form of Exhibit
A,
duly
executed by Seller, pursuant to which Seller shall assign to Purchaser, free
and
clear of all Liens, the Seller Membership Interest;
(ii) an
assignment in the form of Exhibit
B,
duly
executed by Seller, pursuant to which Seller shall assign to the Company certain
patents and patent applications;
(iii) the
Reciprocal License Agreement in the form of Exhibit
C,
duly
executed by Seller;
(iv) a
mutual
waiver and release by and between Seller and Purchaser with respect to the
Transaction Documents and the Guaranty in the form of Exhibit
D
hereto,
duly executed by Seller;
(v) a
list of
all Company-owned equipment located at Seller’s facility (the “Company-Owned
Equipment”);
(vi) a
certificate of Seller in the form of Exhibit
E
hereto,
duly executed by an executive officer of Seller, certifying that (A) Seller
has
performed in all material respects its obligations under this Agreement required
to be performed by Seller on or prior to the Closing, and (B) the
representations and warranties of Seller contained in this Agreement are true
and correct in all material respects as of the Closing;
(vii) a
duly
executed affidavit in a form reasonably acceptable to Purchaser for purposes
of
satisfying Purchaser's obligations under Treas. Reg. § 1.1445-2(b);
(viii) a
certificate of the secretary of Seller in the form of Exhibit --F, certifying
copies of the resolutions of Seller, duly adopted by its board of directors
authorizing the execution of this Agreement and the transactions contemplated
hereby; and
(ix) such
other documents, agreements, instruments, writings and certificates as Purchaser
may reasonably request from Seller to effect the transactions contemplated
by
this Agreement.
(b) Deliveries
by Purchaser to Seller.
At the
Closing, Purchaser shall deliver or cause to be delivered to Seller (unless
previously delivered), the following:
(i) the
Purchase Price in the manner set forth in Section 2.2 above;
(ii) a
certificate of Purchaser in the form of Exhibit
G
hereto,
duly executed by an executive officer of Purchaser, certifying that (A)
Purchaser has performed in all material respects its obligations under this
Agreement required to be performed by Purchaser on or prior to the Closing
and
(B) the representations and warranties of Purchaser contained in this Agreement
are true and correct in all material respects as of the Closing;
(iii) a
certificate of Attesting Secretary of Purchaser in the form of Exhibit H,
certifying copies of the resolutions of Purchaser, duly adopted by its board
of
directors authorizing the execution of this Agreement and the transactions
contemplated hereby;
(iv) the
assignment referred to in Section 2.4(a)(i), duly acknowledged by
Purchaser;
(v) the
mutual waiver and release referred to in Section 2.4(a)(iv), duly executed
by
Purchaser; and
(vi) such
other documents, agreements, instruments, writings and certificates as Seller
may reasonably request to effect the transactions contemplated by this
Agreement.
(c) Deliveries
by the Company.
At the
Closing, the Company shall deliver to Purchaser (unless previously delivered),
the following:
(i) the
assignment referred to in Section 2.4(a)(ii), duly executed by the Company;
and
(ii) the
Reciprocal License Agreement in the form of Exhibit
C,
duly
executed by the Company.
ARTICLE
III
REPRESENTATIONS
OF SELLER
Except
as
disclosed in the written disclosure schedule set forth as Schedule III,
delivered by Seller to Purchaser at or prior to Closing (the
"Seller
Disclosure Schedule"),
Seller represents and warrants to Purchaser as follows:
Section
3.1 Organization,
Existence and Good Standing
.
Seller
is a corporation duly organized, validly existing and in good standing under
the
Laws of the State of New Jersey. Seller is duly qualified or licensed to do
business and is in good standing in each jurisdiction in which the property
owned, leased or operated by Seller, or the nature of the business conducted
by
Seller makes such qualification necessary, except in any such jurisdictions
where the failure to be duly qualified or licensed and in good standing does
not
have or would not reasonably be expected to have a Seller Material Adverse
Effect.
Section
3.2 Authority
and Enforceability
.
Seller
has the corporate power and authority to execute and deliver this Agreement
and
the other instruments and agreements to be executed and delivered by Seller
as
contemplated hereby, and to consummate the transactions contemplated hereby
and
thereby. The execution, delivery and performance by Seller of this Agreement
and
all other instruments and agreements to be executed and delivered by Seller
as
contemplated hereby, and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by Seller's board of directors,
and
no other corporate action on the part of Seller is necessary to authorize the
execution, delivery and performance of this Agreement and such other instruments
and agreements by Seller and the consummation of the transactions contemplated
hereby and thereby. This Agreement and all other agreements to be executed
and
delivered by Seller as contemplated hereby, when delivered in accordance with
the terms hereof, assuming the due execution and delivery of this Agreement
and
each such other document by the other parties hereto and thereto, shall have
been duly executed and delivered by Seller and shall be valid and binding
obligations of Seller, enforceable against Seller in accordance with their
terms, except to the extent that their enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws
affecting the enforcement of creditors' rights generally and to general
equitable principles.
Section
3.3 Ownership
and Title of Seller Membership Interest
.
Seller
is the lawful owner, beneficially and of record, of the Seller Membership
Interest acquired pursuant to the Transaction Agreement, free and clear of
all
Liens, except for any restrictions on transfer set forth in the Transaction
Agreement or the LLC Agreement (with the Parties hereto acknowledging that
this
Agreement is not a restricted transfer under the Transaction Agreement or the
LLC Agreement). Seller has not transferred, sold or assigned any portion of
its
interest in, or right to, the Seller Membership Interest. The sale, assignment
and delivery to Purchaser of the Seller Membership Interest pursuant to this
Agreement at the Closing will transfer to Purchaser good and valid title to
the
Seller Membership Interest, free and clear of all Liens, except for any
restrictions on transfer set forth in the Transaction Agreement or the LLC
Agreement (with the Parties hereto acknowledging that this Agreement is not
such
a restriction on transfer).
Section
3.4 No
Violations; Consents and Approvals.
(a) The
execution and delivery of this Agreement, the other instruments and agreements
to be executed and delivered by Seller as contemplated hereby and the
consummation by Seller of the transactions contemplated hereby and thereby
will
not result in a violation or breach of, conflict with, constitute (with or
without due notice or lapse of time or both) a default under (except for any
restrictions on transfer set forth in the Transaction Agreement or LLC
Agreement), or give rise to any right of termination, cancellation, payment
or
acceleration under, or result in the creation of any Lien (except for any
restrictions on transfer set forth in the Transaction Agreement or LLC
Agreement) on the Seller Membership Interest under (1) any provision of the
certificate of incorporation or by-laws of Seller; (2) any Law or Order
applicable to Seller or by which any of the properties or assets of the Seller
may be bound; (3) any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, guarantee, license, permit, agreement, understanding,
arrangement, contract, commitment, lease, franchise agreement or other
instrument or obligation (whether oral or written) (each, including all
amendments thereto, a "Contract")
to
which Seller is a party, or by which either Seller or any of the properties
or
assets of Seller is bound; except in the case of clauses (2) and (3) above,
for
such violations, breaches, conflicts or defaults which do not have or would
not
reasonably be expected to have a Seller Material Adverse Effect.
(b) No
consent, approval, or authorization of, or declaration, filing or registration
with, any Governmental or Regulatory Authority or, to the Knowledge of Seller,
any other Person will be required to be made or obtained by Seller in connection
with the execution, delivery, and performance of this Agreement and the
consummation of the transactions contemplated hereby, except for such consents,
approvals, authorizations, declarations, filings and registrations the absence
of which, individually or in the aggregate, do not have or would not reasonably
be expected to have a Seller Material Adverse Effect.
Section
3.5 Litigation.
There
is no claim, action, suit, judicial or administrative proceeding, arbitration
or, to the Knowledge of Seller, investigation pending nor, to the Knowledge
of
Seller, is any of the foregoing threatened against Seller or any of its
Affiliates that seeks to restrain, prohibit or otherwise enjoin this Agreement
or the consummation of the transactions contemplated hereby.
Section
3.6 Intellectual
Property.
(a) Set
forth
on Schedule 3.6(a) of the Seller Disclosure Schedule, under separate headings,
is a true and complete list of all Emcore Intellectual Property that is directed
to the manufacture of LED die and LED Products of which Emcore is the owner
and
which has been licensed to the Company pursuant to the Intellectual Property
License Agreement. Also set forth on Schedule 3.6(a) of the Seller Disclosure
Schedule is a list of licensees of the EMCORE Intellectual Property. After
the
Closing, the Company will have the right to use the Emcore Intellectual Property
set forth on Schedule 3.6(a) in accordance with the Reciprocal License
Agreement.
(b) Seller
has complied with the Intellectual Property License Agreement in all material
respects. Without limiting the foregoing, Seller has duly assigned to the
Company all Intellectual Property required to be assigned pursuant to the
Intellectual Property License Agreement.
(c) Except
as
set forth on Schedule 3.6(c), to the Knowledge of Seller, none of the Emcore
Intellectual Property infringes or is alleged to infringe any Intellectual
Property of any Person, nor, to Seller’s Knowledge, is any Person infringing any
of the Emcore Intellectual Property. There is no pending or, to the Knowledge
of
Seller, threatened litigation, adversarial proceeding, administrative action
or
other challenge or claim relating to any Emcore Intellectual Property; and
there
is no outstanding order relating to any Emcore Intellectual
Property.
Notwithstanding anything contained herein to the contrary, Seller shall have
no
liability to Purchaser or the Company for, based on or arising out of any
infringement or claims of infringement of which Purchaser or the Company has
Knowledge.
Section
3.7 Brokers'
and Finders' Fees
and
Certain Other Payments
.
Except
as provided for in Section 3.7 of the Seller Disclosure Schedule, Seller has
not
incurred, nor will it incur, directly or indirectly, any liability for brokerage
or finders' fees or agents' commissions or investment bankers' fees or any
similar charges in connection with this Agreement or any transaction
contemplated hereby.
ARTICLE
IV
REPRESENTATIONS
OF PURCHASER
Except
as
disclosed in the written disclosure schedule as set forth in Schedule IV,
delivered
by
Purchaser to Seller at or prior to Closing (the "Purchaser
Disclosure Schedule"),
Purchaser represents and warrants to Seller as follows:
Section
4.1 Organization,
Good Standing and Power
.
Purchaser is a corporation duly organized, validly existing and in good standing
under the Laws of the State of New York. Purchaser has the corporate power
to
own its properties and to carry on its business as now being conducted and
as
proposed to be conducted and is duly qualified to do business and is in good
standing in each jurisdiction in which the failure to be so qualified and in
good standing does not have or would not reasonably be expected to have a
Purchaser Material Adverse Effect. Purchaser is not in violation of any of
the
provisions of its certificate of incorporation or by-laws or equivalent
organizational documents, each as amended to date.
Section
4.2 Authority
and Enforceability
.
Purchaser has the corporate power and authority to execute and deliver this
Agreement and the other instruments and agreements to be executed and delivered
by Purchaser as contemplated hereby, and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by
Purchaser of this Agreement and all other instruments and agreements to be
executed and delivered by Purchaser as contemplated hereby, and the consummation
of the transactions contemplated hereby and thereby have been duly authorized
or
delegated to Purchaser’s designated officer by Purchaser's board of directors
and no other corporate action on the part of Purchaser is necessary to authorize
the execution, delivery and performance of this Agreement and such other
instruments and agreements by Purchaser and the consummation of the transactions
contemplated hereby and thereby. This Agreement and all other agreements to
be
executed and delivered by Purchaser as contemplated hereby, when delivered
in
accordance with the terms hereof, assuming the due execution and delivery of
this Agreement and each such other document by the other parties hereto and
thereto, shall have been duly executed and delivered by Purchaser and shall
be
valid and binding obligations of Purchaser, enforceable against Purchaser in
accordance with their terms, except to the extent that their enforceability
may
be subject to applicable bankruptcy, insolvency, reorganization, moratorium
or
similar Laws affecting the enforcement of creditors' rights generally and to
general equitable principles.
Section
4.3 No
Violations; Consents and Approvals.
(a) The
execution and delivery of this Agreement, the other instruments and agreements
to be executed and delivered by Purchaser as contemplated hereby and the
consummation by Purchaser of the transactions contemplated hereby and thereby
will not result in a violation or breach of, conflict with, constitute (with
or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation, payment or acceleration) under, or result
in
the creation of any Lien on any of the properties or assets of Purchaser or
any
of its Subsidiaries under: (1) any provision of the certificate of incorporation
or by-laws of Purchaser; (2) any Law or Order applicable to Purchaser, or by
which any of its properties or assets may be bound; (3) any of the terms,
conditions or provisions of any Contract to which Purchaser is a party, or
by
which it or any of its properties or assets is bound; except in the case of
clauses (2) and (3) above, for such violations, filings, permits, consents,
approvals, notices, breaches or conflicts which do not have or would not
reasonably be expected to have a Purchaser Material Adverse Effect.
(b) No
consent, approval, or authorization of, or declaration, filing or registration
with, any Governmental Authority will be required to be made or obtained by
Purchaser in connection with the execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated
hereby.
Section
4.4 Brokers'
and Finders' Fees
.
Purchaser has not incurred, nor will it incur, directly or indirectly, any
liability for brokerage or finders' fees or agents' commissions or investment
bankers' fees or any similar charges in connection with this Agreement or any
transaction contemplated hereby.
Section
4.5 Litigation
.
There
is no claim, action, suit, judicial or administrative proceeding, arbitration
or, to the Knowledge of Purchaser, investigation pending nor, to the Knowledge
of Purchaser, is any of the foregoing threatened against Purchaser or any of
its
Subsidiaries that seeks to restrain, prohibit or otherwise enjoin this Agreement
or the consummation of the transactions contemplated hereby.
Section
4.6 Investment
Intention
.
Purchaser is acquiring the Seller Membership Interest for its own account,
for
investment purposes only and not with a view to the distribution (as such term
is used in Section 2(a)(11) of the United States Securities Act of 1933, as
amended (the "Securities
Act"))
thereof in a manner not permitted by the Securities Act. Purchaser understands
that the Seller Membership Interest has not been registered under the Securities
Act and, if and to the extent the Securities Act applies, cannot be sold unless
subsequently registered under the Securities Act or an exemption from such
registration is available and pursuant to registration or qualification (or
exemption therefrom) under applicable state securities Laws. Purchaser has
such
knowledge and experience in financial and business matters that it is capable
of
evaluating the merits and risks of an investment in the Seller Membership
Interest.
Section
4.7 Investigation
.
Purchaser acknowledges that, except for the matters that are expressly covered
by the provisions of this Agreement, Purchaser is relying on its own knowledge,
investigation and analysis in entering into the transactions contemplated
hereby. Purchaser is knowledgeable about the industries in which the Company
operates and is capable of evaluating the merits and risks of its purchase
of
the Seller Membership Interest as contemplated by this Agreement and is able
to
bear the substantial economic risk of such investment for an indefinite period
of time. Purchaser has at all times had full access to the books and records,
facilities and personnel of the Company for purposes of conducting a due
diligence investigation of the Company and has conducted a full due diligence
investigation of the Company.
ARTICLE
V
COVENANTS
AND AGREEMENTS OF PURCHASER AND SELLER
Section
5.1 Confidentiality
.
The
confidentiality of all documents and information furnished in connection with
the transactions contemplated by this Agreement shall be governed by the terms
of the Confidentiality Agreement. Without limiting the terms of the
Confidentiality Agreement, except for disclosures required to obtain any consent
or approval of any Person or other disclosures approved by the other Party
hereto, none of Seller, the Company or Purchaser shall disclose the terms of
this Agreement or the terms of any of the transactions contemplated hereby
to
any other Person, other than to the directors, officers, employers, agents,
attorneys, consultants or Representatives of such Person who need to know such
information to assist such Person in complying with its obligations under this
Agreement. Notwithstanding the foregoing, this Section
5.1
shall
not prohibit any such Person from making any disclosure which is (i) required
to
avoid a violation of applicable Law by such Party or (ii) required by rule
or
regulation of any securities exchange or market on which the securities of
any
Party or its Affiliates are listed or quoted, and in each such case the Party
required to make such disclosure shall do so only to the limited extent
necessary to comply with such Law, regulation, rule or obligation and shall,
to
the extent practicable, give advance notice thereof to the other Party hereto
and an opportunity to comment on any such disclosure and oppose the need
therefor.
Section
5.2 Public
Announcements/Confidentiality
.
Except
as required by Law or by rule or regulation of any securities exchange or market
on which such Party's securities are listed or quoted, the timing and content
of
announcements concerning this Agreement or the transactions contemplated hereby
will be by mutual agreement. Purchaser acknowledges that Seller will be required
to file this Agreement with, and disclose the material terms of this Agreement
in, one or more filings with the Securities and Exchange Commission.
Section
5.3 No
Implied Representations or Warranties
.
Purchaser hereby acknowledges and agrees that Seller is not making any
representation or warranty whatsoever, express or implied, except those
representations and warranties of Seller explicitly set forth in this Agreement.
Without limiting the generality of the foregoing, Seller makes no representation
or warranty to Purchaser, express or implied, with respect to the Company or
the
Transaction Documents.
Section
5.4 Non-Solicitation.
(a) Seller
agrees that, for a period of two (2) years from
and
after the Closing Date, Seller will not, and will not permit any of its
Affiliates to, directly or indirectly, hire or solicit for hire any then current
employee or independent contractor of the Company or Purchaser’s Global Research
Center; provided, that nothing herein shall prevent general solicitations
through advertising or similar means that are not specifically directed at
such
employees or independent contractors; and provided, further, that the foregoing
restrictions shall not apply with respect to the hiring or solicitation for
hire
of any employee or independent contractor of the Company following ninety (90)
days after termination (for any reason) of such employee's or independent
contractor's employment or contractual relationship with the Company.
(b) This
covenant shall survive the Closing and continue in effect for the period of
time
provided in this Section
5.4.
Section
5.5 Non-Competition.
(a) Seller
agrees that, for a period of three (3) years from
and
after the Closing Date, Seller will not, and will not permit any of its
controlled Affiliates to, directly or indirectly, anywhere in the world, (i)
compete with the GELcore Business (as defined herein), or (ii) engage on its
own
behalf in the business of, or own, have an ownership interest in, manage,
operate, join or control, finance, invest in, support, or participate in, alone
or with any Person, the ownership, management, operation or control of any
business, firm, corporation or other Person which engages in the business of
designing, developing, sourcing, manufacturing or having manufactured or
assembling LED Products for marketing, distribution or sale in the Visible
LED
Field or in the Illumination Field (the "GELcore
Business").
Notwithstanding the foregoing, this Section 5.5 shall not apply to (x) the
beneficial ownership (as such term is defined in Rule 13d-3 of the Exchange
Act)
of securities by Seller or any of its Affiliates of a publicly-held corporation
which shall constitute in the aggregate five percent (5%) or less of the total
number of such securities outstanding on a fully diluted basis; (y) the business
of designing, developing, sourcing, manufacturing or having manufactured
products containing one or more LEDs for marketing or sale in the data
communication, telecommunication, storage, FTTX or CATV markets for applications
in which the products will be used for transmitting video, voice or data through
a fiber optic cable or other signal transmitting media or (z) the acquisition,
directly or indirectly, by Seller of any business, firm, corporation or other
Person that engages in the GELcore Business (an "Acquired
Business")
so
long as, (i) during its two fiscal
years and any stub period preceding the date of such acquisition, the Acquired
Business derived less than ten percent (10%) of its revenue from the GELcore
Business and (ii) Seller makes commercially reasonable efforts to divest any
such competing portion of the Acquired Business as soon as reasonably
practicable, but in any event divest within one year from the date of such
acquisition or, with respect to any agreement providing for such a divestiture
entered into within such one year period, such longer period of time as may
be
reasonably necessary to obtain any required consent or approval of, or to effect
any required registration with, any Governmental or Regulatory Authority or
to
otherwise comply with applicable Laws.
(b) If
at the
time of enforcement of this Section 5.5, a court shall hold that the duration,
scope or area restrictions stated herein are unenforceable under circumstances
then existing, the parties agree that the maximum duration, scope or area
reasonable under such circumstances shall be substituted for the stated
duration, scope or area and that the court be allowed to revise the restrictions
contained herein to cover the maximum duration, scope and area permitted by
Law.
(c) Seller
agrees that Purchaser would suffer irreparable harm from a breach by Seller
of
any of the covenants or agreements contained in this Section 5.5. In the event
of an alleged or threatened breach by Seller of any of the provisions of this
Section 5.5, Purchaser (or its successors or permitted assigns) may, in addition
to all other rights and remedies existing in its favor, apply to any court
of
competent jurisdiction for specific performance hereof without the need to
post
a bond or other security.
(d) This
covenant shall survive the Closing and continue in effect for the period of
time
provided in this Section 5.5.
(e) Notwithstanding
anything herein to the contrary, Seller's obligations under Section
5.5
shall
terminate upon consummation of (i) a transfer, directly or indirectly, whether
by merger, consolidation or otherwise to a Person or group of affiliated Persons
of the securities of Seller if, after the consummation of such transaction,
such
Person or group would beneficially own more than 50% of the outstanding voting
stock of Seller; or (ii) a sale of all or substantially all of Seller's assets
(any transfer or sale under (i) or (ii) above hereinafter referred to as a
“Transfer”). However, if a Transfer is to a Person that engages in the GELcore
Business (the “Transferee”), Seller agrees that, as a condition to such
Transfer, the Transferee shall covenant and agree that for the remainder of
the
non-compete period specified in Section 5.5(a) it will not in any manner
whatsoever use any asset of Seller, including without limitation the Emcore
Intellectual Property or any other intellectual property that Seller at the
time
of Transfer owns or has a right to use, in the GELcore Business.
Section
5.6 Tax
Matters.
(a) The
following provisions shall govern the allocation of responsibility among
Purchaser and Seller for certain Tax matters following the Closing
Date:
(i) Purchaser
shall cause the Company to prepare or cause to be prepared and file or cause
to
be filed any Tax Returns for Tax periods which begin before the Closing Date
and
end after the Closing Date. To the extent permitted by applicable Law, Seller
shall include any income, gain, loss, deduction or other tax items for such
periods on its Tax Returns in a manner consistent with the Schedules K-1
prepared for the Company for such periods. For income tax purposes, the amount
of Seller's share of income, gain, loss, deduction, or other tax items for
any
period ending on the Closing Date with respect to Seller shall be determined
to
the extent permitted by applicable Law by a closing of the Company's books
at
the close of business on the Closing Date.
(ii) Seller
and Purchaser shall, and Purchaser shall cause the Company to, cooperate fully,
as reasonably requested, in connection with the preparation and filing of Tax
Returns pursuant to this Section
5.5.
(iii) Each
of
Purchaser and Seller shall cooperate in causing to be filed all necessary Tax
Returns and other documentation with respect to all transfer, documentary,
sales, use, stamp, registration and similar Taxes arising from or relating
to
the transactions contemplated by this Agreement imposed by the United States,
the State of New York or any other taxing jurisdiction on Seller or Purchaser.
Seller and Purchaser shall each pay any such transfer, documentary, sales,
use,
stamp, registration, and similar Taxes as may be imposed on Seller or Purchaser,
respectively. If required by applicable Law, Purchaser shall cause the Company
to join with Seller or Purchaser, as the case may be, in the execution of any
such Tax Returns and other documentation.
Section
5.7 Intellectual
Property.
Seller
and Purchaser agree that Seller and the Company are hereby relieved of their
respective rights and obligations under the Intellectual Property License
Agreement (including, without limitation, the obligation to disclose, license
or
assign to the Company any Emcore Intellectual Property developed after the
date
of this Agreement or the obligation to disclose, license or assign to the Seller
any GELcore Intellectual Property developed after the date of this Agreement)
other than those obligations under Article 3 of the Intellectual Property
License Agreement expressly stated to survive the termination or other
expiration of the Intellectual Property License Agreement.
Section
5.8 Company-Owned
Equipment. The Company-Owned Equipment shall be packed and shipped to the
Company in accordance with the provisions and process set forth in Schedule
5.8
attached hereto.
Section
5.9 Transition
Services. Seller shall, through September 15, 2006, continue to provide “laser
lift-off” and new product introduction support services to the Company
(“Services”) in the same manner and on the same basis as it had provided during
the one-year period prior to the date of Closing. The Company shall reimburse
Seller for its costs and expenses in providing such services on the same basis
as it had during the one year period prior to the date of Closing.
Seller
agrees that Purchaser is free to hire any of Seller’s employees who provided
Services, provided that Purchaser identifies such employees prior to Closing.
Seller agrees that neither Purchaser nor Company will have any responsibility
to
Seller or Seller’s employees relating to discontinuance of Services.
Section
5.10 Retention
of and Access to Records.
After
the Closing Date, Seller shall retain for a period consistent with Seller's
record retention policies and practices, but for no less than three years,
its
records related to the Seller Membership Interest and related ownership of
the
Company. Seller also shall provide Purchaser and its Representatives reasonable
access thereto, during normal business hours and on at least five (5) Business
Days' prior written notice, for any reasonable business purpose specified by
Purchaser in such notice.
Section
5.11 Further
Assurances.
Seller
and Purchaser shall cooperate reasonably with each other and with their
respective Representatives in connection with any actions required to be taken
as part of their respective obligations under this Agreement and shall (a)
furnish upon request to each other such further information, (b) execute and
deliver to each other such other documents and (c) do such other acts and
things, all as the other Party may reasonably request for the purpose of
carrying out the intent of this Agreement and the transactions contemplated
hereby.
Section
5.12 Waiver
of
Restrictions.
Purchaser and Seller hereby waive the provisions of Section 8.02 of the
Transaction Agreement and Section 4.4 of the LLC Agreement to the extent that
such provisions would prohibit or be inconsistent with the transactions
contemplated by this Agreement.
ARTICLE
VI
SURVIVAL
OF REPRESENTATIONS; INDEMNIFICATION
Section
6.1 Survival
of Representations.
(a) The
respective representations and warranties of Seller and Purchaser contained
in
Articles
III
and
IV,
respectively, of this Agreement shall survive for a period of twelve (12) months
following the Closing Date, except the representations and warranties contained
in Section
3.3
(Ownership and Title of Seller Membership Interest), which shall survive
indefinitely, and Section 3.6 (Intellectual Property) which shall survive for
a
period of three (3) years following the Closing Date. The covenants and
agreements of Seller and Purchaser in this Agreement required to be performed
following the Closing shall survive the Closing and shall be fully effective
and
enforceable for the periods therein indicated.
(b) Seller's
and Purchaser's indemnification obligations pursuant to Sections 6.2
and 6.3
shall
survive the consummation of the transactions contemplated by this Agreement
for
the time periods set forth in Section
6.1(a),
except
for (i) claims for indemnification asserted prior to the end of such periods,
which claims shall survive until final resolution thereof, or (ii) claims for
indemnification that relate to Damages as
a
result of, in connection with or arising out of fraud, which claims shall not
be
limited by the time periods set forth in Section
6.1(a)
or the
dollar amounts set forth in Section
6.2.
(c) No
Purchaser Indemnitee or Seller Indemnitee (each as defined below) shall be
entitled to indemnification under this Article VI
for any
inaccuracy in, or any breach of, any representation or warranty hereunder that
the party seeking indemnification had actual Knowledge of on the date
hereof.
Section
6.2 Seller
Indemnification.
(a) Subject
to the limitations and conditions set forth in this Article
VI,
Seller
agrees to indemnify, hold harmless, reimburse and defend Purchaser, and its
Affiliates, directors, officers and employees and their respective successors
and permitted assigns (each a "Purchaser
Indemnitee"),
from
and against any damages, losses, liabilities, obligations, claims and expenses
(including, without limitation, reasonable attorneys' fees and expenses),
whether or not involving a third-party claim (collectively, "Damages")
suffered, incurred or paid as a result of, in connection with or arising out
of
either (i) the failure of any representation or warranty made by Seller
contained in Article
III
(subject
to the Seller Disclosure Schedule related thereto) of this Agreement to be
true
and correct as of the date of this Agreement or (ii) any breach or failure
by
Seller to perform or comply with any of its covenants, agreements or other
obligations contained herein.
(b) With
respect to the representations and warranties of Seller set forth in Article
III
of this Agreement (excluding Section
3.3),
Seller
shall have no obligation to make any indemnification payments (x) until the
total amount of all Losses suffered or incurred by the Purchaser Indemnitees
exceeds $250,000, it being understood that Seller shall only be obligated to
indemnify Losses to the extent that such Losses exceed $250,000, and (y) if
and
to the extent any such payment, when aggregated with all other indemnification
payments by Seller in connection with any breach of such representations and
warranties made by Seller would exceed, in aggregate, $10,000,000.
(c) In
no
event shall Seller be obligated to make aggregate indemnification payments
under
this Article
VI
in
excess of the Purchase Price.
Section
6.3 Purchaser
Indemnification.
(a) Subject
to the limitations and conditions set forth in this Article VI, Purchaser agrees
to indemnify, hold harmless, reimburse and defend Seller, and its Affiliates,
directors, officers and employees and their respective successors and permitted
assigns (each a "Seller
Indemnitee"),
from
and against any Damages suffered, incurred or paid, directly or indirectly,
as a
result of, in connection with or arising out of (i) the failure of any
representation or warranty made by Purchaser contained in Article IV of this
Agreement to be true and correct as of the date of this Agreement, and (ii)
any
breach or failure by Purchaser to perform or comply with any of its covenants,
agreements or other obligations contained herein.
(b) With
respect to the representations and warranties of Purchaser set forth in Article
IV of this Agreement, Purchaser shall have no obligation to make any
indemnification payments (x) until the total amount of all Losses suffered
or
incurred by the Seller Indemnitees exceeds $250,000, it being understood that
Purchaser shall only be obligated to indemnify Losses to the extent that such
Losses exceed $250,000, and (y) if and to the extent any such payment, when
aggregated with all other indemnification payments by Purchaser in connection
with any breach of such representations and warranties made by Purchaser would
exceed, in aggregate, $10,000,000.
(c) In
no
event shall Purchaser be obligated to make aggregate indemnification payments
under this Article
VI
in
excess of the Purchase Price.
Section
6.4 Exclusive
Remedy
.
Other
than for claims relating to Section
5.4,
for
which specific performance is a permitted remedy, any claim or cause of action
(whether such claim sounds in tort, contract or otherwise and including
statutory rights and remedies) based upon, relating to or arising out of this
Agreement or the transactions contemplated hereby must be brought be either
party in accordance with the provisions and applicable limitations of this
Article
VI,
which,
in the absence of fraud, shall constitute the sole and exclusive remedy of
all
Parties and their Affiliates, successors and assigns for any such claim or
cause
of action.
Section
6.5 Limitation
on Losses.
(a) Notwithstanding
anything to the contrary in this Agreement, neither Party shall have an
obligation to indemnify any Purchaser Indemnitee or Seller Indemnitee, as the
case may be, for incidental, consequential, exemplary, special or punitive
damages.
(b) The
amount of Losses payable by Seller or Purchaser under this Article
VI
shall be
reduced by (i) any insurance proceeds (net of expenses of collection) received
by the Purchaser Indemnitee or Seller Indemnitee, as the case may be, with
respect to the claim for which indemnification is sought; (ii) any amounts
recovered by the Purchaser Indemnitee or Seller Indemnitee, as the case may
be,
from third parties under Contracts providing for indemnification; and (iii)
the
amount of any Tax benefits realized by the Purchaser Indemnitee or Seller
Indemnitee, as the case may be, from the payment of such indemnified amount.
With respect to any claim for indemnification under this Section
6.5 (b) (i),
the
Purchaser Indemnitee or Seller Indemnitee, as the case may be, shall exercise
commercially reasonable efforts to collect insurance proceeds.
(c) If
either
Party makes any payment under this Article
VI
in
respect of any Losses, such indemnifying Party shall be subrogated, to the
extent of such payment, to the rights of the indemnified Party against any
third
party, including, to the extent permitted by the relevant party, the indemnified
Party's insurer.
Section
6.6 Third
Party Claims
.
If a
claim by a third party is made against any Person entitled to indemnification
pursuant to Section
6.2
hereof
(an "Indemnified
Party"),
and
if such party intends to seek indemnity with respect thereto under this
Article
VI,
such
Indemnified Party shall promptly provide written notice (which notice shall
specify the nature and amount of, and parties to, the claim in reasonable
detail) to the party obligated to indemnify such Indemnified Party (the
"Indemnifying
Party")
of
such claims; provided, that the failure to so notify shall not relieve the
Indemnifying Party of its obligations hereunder, except to the extent that
the
Indemnifying Party is actually and materially prejudiced thereby. The
Indemnifying Party shall have thirty (30) days after receipt of such notice
to
assume the defense of such claim or any litigation resulting therefrom at the
expense of the Indemnifying Party through counsel of its choice reasonably
acceptable to the Indemnified Party and, after notice from the Indemnifying
Party to the Indemnified Party of its election to assume the defense thereof,
the Indemnifying Party shall not be liable to such Indemnified Party under
this
Article
VI
for any
fees of other counsel or any other expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof; provided, that if,
under applicable standards of professional conduct, a conflict with respect
to
any significant issue exists between any Indemnifying Party and any Indemnified
Party in respect of such claim or litigation, the Indemnifying Party shall
pay
the reasonable fees and expenses of one additional counsel to resolve such
conflict or to represent such Indemnified Party with respect to such claim
or
litigation; provided further, that the Indemnifying Party shall be entitled
to
assume the defense of such action only if the Indemnifying Party acknowledges
its indemnity obligation with respect to such action in accordance with, and
subject to the limitations set forth in, this Article
VI.
If the
Indemnifying Party assumes the defense of such claim or litigation, the
Indemnified Party shall be entitled to participate in the defense, at its own
expense, through counsel chosen by the Indemnified Party (subject at all times
to the right of the Indemnifying Party's counsel to control and direct the
defense of the action). If the Indemnifying Party assumes the defense of such
claim or litigation, the Indemnifying Party shall be entitled to settle any
claim or litigation resulting therefrom without consent of the Indemnified
Party
unless (i) the claim for indemnification relates to or arises in connection
with
any criminal proceeding, action, indictment, allegation or investigation
involving the Indemnified Party, or (ii) the claim seeks an injunction or
equitable relief against the Indemnified Party. The Indemnified Party shall
not
pay or settle any such claim without the prior written consent of the
Indemnifying Party. Notwithstanding the foregoing, the Indemnified Party shall
have the right to pay or settle any such claim, provided that in such event
it
shall waive any right to indemnity therefor by the Indemnifying Party for such
claim unless the Indemnifying Party shall have consented in writing prior to
such payment or settlement. If the Indemnifying Party does not notify the
Indemnified Party within thirty (30) days after the receipt of the Indemnified
Party's notice of a claim of indemnity hereunder that it elects to undertake
the
defense thereof, the Indemnified Party shall have the right to contest, settle
or compromise the claim but shall not thereby waive any right to indemnity
therefor pursuant to this Agreement. The Indemnifying Party shall not, except
with the consent of the Indemnified Party, enter into any settlement that is
not
entirely indemnifiable by the Indemnifying Party pursuant to this Article
VI
and does
not include as an unconditional term thereof the giving by the Person or Persons
asserting such claim to all Indemnified Parties of an unconditional release
from
all liability with respect to such claim or consent to entry of any judgment.
The Indemnifying Party and the Indemnified Party shall cooperate with each
other
in all reasonable respects in connection with the defense of any claim,
including making available records relating to such claim and furnishing,
without expense to the Indemnifying Party and/or its counsel, such employees
of
the Indemnified Party as may be reasonably necessary for the preparation of
the
defense of any such claim or for testimony as witnesses in any proceeding
relating to such claim.
ARTICLE
VII
MISCELLANEOUS
Section
7.1 Expenses
.
The
Parties hereto shall pay all of their own expenses relating to the transactions
contemplated by this Agreement, including the fees and expenses of their
respective counsel and financial advisers.
Section
7.2 Governing
Law
.
The
interpretation and construction of this Agreement, and all matters relating
hereto, shall be governed by the Laws of the State of New York applicable to
agreements executed and to be performed solely within such State, including
Section 5-1401 of the New York General Obligations Law.
Section
7.3 Jurisdiction;
Agents for Service of Process
.
Any
judicial proceeding brought against any of the Parties to this Agreement on
any
dispute arising out of this Agreement or any matter related hereto may be
brought in the courts of the State of New York, or in the United States District
Court for the Southern District of New York, and, by execution and delivery
of
this Agreement, each of the Parties to this Agreement accepts the exclusive
jurisdiction of such courts, and irrevocably agrees to be bound by any judgment
rendered thereby in connection with this Agreement. Seller shall appoint its
General Counsel and Purchaser its General Counsel of GE Consumer &
Industrial as agent to receive on its respective behalf service of process
in
any proceeding in any such court in the State of New York. The foregoing
consents to jurisdiction and appointments of agents to receive service of
process shall not constitute general consents to service of process in the
State
of New York for any purpose except as provided above and shall not be deemed
to
confer rights on any Person other than the respective Parties to this Agreement.
Each of Seller and Purchaser agree that service of any process, summons, notice
or document by U.S. registered mail to such Party's address set forth below
shall be effective service of process for any action, suit or proceeding in
New
York with respect to any matters for which it has submitted to jurisdiction
pursuant to this Section
7.3.
Section
7.4 Table
of Contents; Captions
.
The
table of contents and the Article and Section captions used herein are for
reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.
Section
7.5 Notices
.
Any
notice or other communication required or permitted under this Agreement shall
be deemed to have been duly given (i) five (5) Business Days following deposit
in the mails if sent by registered or certified mail, postage prepaid, (ii)
when
sent, if sent by facsimile transmission, if receipt thereof is confirmed by
telephone, (iii) when delivered, if delivered personally to the intended
recipient and (iv) two (2) Business Days following deposit with a nationally
recognized overnight courier service, in each case addressed as
follows:
if
to
Seller, to
EMCORE
Corporation
145
Belmont Drive
Somerset,
New Jersey 08873
Telephone:
(732) 302-4077
Facsimile:
(732) 302-9783
Attn:
Howard W. Brodie, Esq.
with
copies to:
Skadden,
Arps, Slate, Meagher & Flom LLP
525
University Avenue, Suite 1100
Palo
Alto, California 94301
Telephone:
(650) 470-4630
Facsimile:
(650) 470-4570
Attn:
Marc R. Packer, Esq.
and
Skadden,
Arps, Slate, Meagher & Flom LLP
Four
Times Square
New
York,
New York 10036
Telephone:
(212) 735-3000
Facsimile:
(212) 735-2000
Attn:
Thomas H. Kennedy, Esq.
and
if to
Purchaser, to
General
Electric Company
GE
Consumer & Industrial
1975
Noble Road
Nela
Park, Maildrop 310 D
Cleveland,
Ohio 44112-6300
Telephone:
(216) 266-5543
Facsimile:
(216) 266-2410
Attn:
Michael B. Petras, Jr.
with
a
copy to:
General
Electric Company
GE
Consumer & Industrial
Appliance
Park, AP2-225
Louisville,
KY 40225, USA
Telephone:
(502) 452 7277
Facsimile:
(502) 452 0347
Attn:
Robert A. Hughes, Esq.
or
such
other address or number as shall be furnished in writing by any such
Party.
Section
7.6 Assignment;
Parties in Interest
(a) .
This
Agreement may not be transferred, assigned, pledged or hypothecated by any
Party
hereto without the express written consent of the other Party hereto, other
than
by operation of law. This Agreement shall be binding upon and shall inure to
the
benefit of the Parties hereto and their respective heirs, executors,
administrators, successors and permitted assigns.
Section
7.7 Counterparts
.
This
Agreement may be executed in two or more counterparts, all of which taken
together shall constitute one instrument. The facsimile transmission or
retransmission of any original signed counterpart to this Agreement or any
document or agreement contemplated hereby (including any amendment hereto or
thereto) shall be deemed to be delivery of an original counterpart thereof
for
all purposes.
Section
7.8 Entire
Agreement
.
This
Agreement relates solely to the purchase and sale of Seller’s Membership
Interest in the Company. This Agreement does not modify, amend or terminate
any
provisions in any of the Transaction Documents relating to the express rights
and obligations of the Parties following Seller’s sale of the Seller Membership
Interest to Purchaser (including, without limitation, Section 10.5 of the
Transaction Agreement except that, to the extent of any inconsistency between
the second sentence of Section 10.5(a) of the Transaction Agreement and Section
5.5 of this Agreement, Section 5.5 of this Agreement shall be controlling).
For
the avoidance of doubt, the provisions of Section 10.02 of the Transaction
Agreement do not apply and, further, Seller, Purchaser and the Company agree
that, other than as may be provided in this Agreement, there shall be no
post-Closing adjustments in the Purchase Price or any payment by Purchaser
to
Seller related to Purchaser’s purchase of the Seller Membership Interest. In the
event of a conflict between the terms and conditions of any of the Transaction
Documents and this Agreement, the terms and conditions in this Agreement shall
be controlling.
Section
7.9 Amendments
.
This
Agreement may not be changed, and any of the terms, covenants, representations,
warranties and conditions cannot be waived, except pursuant to an instrument
in
writing signed by Purchaser and Seller or, in the case of a waiver, by the
Party
waiving compliance.
Section
7.10 Severability
.
If any
term, provision, agreement, covenant or restriction of this Agreement is held
by
a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, agreements, covenants
and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any Party hereto. Upon such a determination, the Parties
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the Parties as closely as possible in a reasonably acceptable
manner in order that the transactions contemplated hereby may be consummated
as
originally contemplated to the fullest extent possible.
Section
7.11 Third
Party Beneficiaries
.
Each
Party hereto intends that this Agreement shall not benefit or create any right
or cause of action in or on behalf of any Person other than the Parties
hereto.
Section
7.12 Waiver
of Jury Trial
.
Each of
Purchaser and Seller hereby waives, to the fullest extent permitted by
applicable Law, any right it may have to a trial by jury in respect of any
litigation as between the Parties directly or indirectly arising out of, under
or in connection with this Agreement or the transactions contemplated hereby
or
disputes relating hereto. Each of Purchaser and Seller (a) certifies that no
Representative, agent or attorney of the other Party has represented, expressly
or otherwise, that such other Party would not, in the event of litigation,
seek
to enforce the foregoing waiver and (b) acknowledges that it and the other
Party
have been induced to enter into this Agreement by, among other things, the
mutual waivers and certifications in this Section
7.12.
Section
7.13 Interpretation
.
The
Parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the Parties,
and no presumption or burden of proof shall arise favoring or disfavoring any
Party by virtue of the authorship of any provisions of this
Agreement.
***
21
IN
WITNESS WHEREOF, each of Purchaser and Seller has caused its corporate name
to
be hereunto subscribed by its officer thereunto duly authorized all as of the
day and year first above written.
EMCORE
Corporation
By:
/s/
Howard W. Brodie
Name:
Howard W. Brodie
Title:
Executive Vice President
General
Electric Company
By:
/s/
Michael Petras
Name:
Michael Petras
Title:
Vice President-Lighting & Electrical Distribution
Signature
Page to Membership Interest Purchase Agreement