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EXHIBIT 2.01
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "AGREEMENT") is made effective as of March
22, 2001 ("EFFECTIVE DATE"), among MEI California, Inc., a California
corporation and a direct, wholly-owned subsidiary of MEI ("SELLER"), Micron
Electronics, Inc., a Minnesota corporation having an office at 000 Xxxx Xxxxxxx
Xxxx, Xxxxx, Xxxxx 00000 ("MEI"), and Micron Technology, Inc., a Delaware
corporation having an office at 0000 Xxxxx Xxxxxxx Xxx, Xxxxx, Xxxxx 00000
("BUYER").
WHEREAS, MEI and Buyer have heretofore entered into a certain Amended
and Restated Component Recovery Agreement, dated as of September 2, 1999
("RESTATED CRA"), which restated the original CRA;
WHEREAS, the Restated CRA grants to Buyer an option ("PURCHASE OPTION"),
exercisable by Buyer at any time during the Extended Term (as such term is
defined in the Restated CRA), to purchase from MEI "all assets primarily used in
the SpecTek business (excluding cash) for a purchase price equal to net book
value";
WHEREAS, the Restated CRA provides that "MEI may sell, contribute or
otherwise transfer" the assets primarily used in the SpecTek business to "an
Affiliated Company that is 100% owned or controlled by MEI, provided that such
Affiliated Company agrees in writing to be bound by the terms of this
Agreement";
WHEREAS, all assets primarily used in the SpecTek business have been or
will be transferred to Seller as contemplated by the provisions of this
Agreement;
WHEREAS, Buyer desires to exercise the Purchase Option as well as
purchase certain other assets of Seller, subject to the terms and conditions set
forth in this Agreement;
WHEREAS, Seller desires to sell to Buyer such assets and hereby waives
the thirty-day notice provision contained in Amendment Number 1 to the Restated
CRA with respect to the sale of the SpecTek assets; and
WHEREAS, MEI and Buyer desire to settle all amounts owed by one to the
other pursuant to the Restated CRA by entering into and performing this
Agreement, at which time the Restated CRA shall terminate pursuant to the terms
of Section 11 thereof.
NOW, THEREFORE, in consideration of the premises and the representations
and warranties and covenants contained herein, the parties hereby agree as
follows:
ARTICLE I
DEFINITIONS
1.1 "ACTION" shall have the meaning set forth in Section 4.8 hereof.
1.2 "ADJUSTED STATEMENT OF NET ASSETS" shall have the meaning set forth in
Section 7.1(b) hereof.
1.3 "AGREEMENT" shall have the meaning set forth in the preamble hereof.
1.4 "ASSIGNED CONTRACTS" shall have the meaning set forth in Section 2.4
hereof.
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1.5 "ASSIGNMENT" shall have the meaning set forth in Section 8.1 hereof.
1.6 "ASSUMED LIABILITIES" shall have the meaning set forth in Section 2.5
hereof.
1.7 "XXXX OF SALE" shall have the meaning set forth in Section 2.3 hereof.
1.8 "BUYER" shall have the meaning set forth in the preamble hereof.
1.9 "CHANGE OF CONTROL" of an entity shall mean (i) any person or entity
becoming the beneficial owner of securities of such entity representing
more than fifty percent (50%) of the total of all then outstanding
voting securities or (ii) a merger or consolidation of such entity with
or into another entity, other than a merger or consolidation that would
result in the holders of the voting securities immediately prior thereto
holding securities which represent immediately after such merger or
consolidation more than fifty percent (50%) of the total combined voting
power of the entity which survives such merger or consolidation or the
parent of the entity which survives such merger or consolidation. In the
case of MEI, "Change of Control" shall also include (iii) the sale,
disposition and/or liquidation of all or substantially all of the PC
Sales Division Assets of MEI's personal computer business; or (iv) the
sale, disposition and/or liquidation of all or substantially all of
MEI's PC Business. In the case of a Resulting Entity, "Change of
Control" shall also include (v) the sale, disposition and/or liquidation
of all or substantially all of the assets of the entity's personal
computer business, (vi) the sale, disposition and/or liquidation of all
or substantially all of the assets of the entity's personal computer
business.
1.10 "CLOSING STATEMENT OF NET ASSETS" shall have the meaning set forth in
Section 7.1(e) hereof.
1.11 "CLOSINGS" shall have the meaning set forth in Section 3.1(b) hereof.
1.12 "CONTINUING EMPLOYEES" shall have the meaning set forth in Section 9.5
hereof.
1.13 "DEFENSIVE PURPOSES" shall mean, for purposes of Article VIII, the right
to assert the applicable patents: (i) in negotiations with another
entity which initiated substantive allegations of infringement of one or
more specific patents by MEI or a Resulting Entity, and/or (ii) in a
lawsuit against an entity either in response to a lawsuit previously
initiated by such entity (either in that case or in another case), or
against an entity in combination with a Declaratory Judgment brought
against such entity, with appropriate subject matter jurisdiction, by
MEI or a Resulting Entity.
1.14 "EFFECTIVE DATE" shall have the meaning set forth in the preamble
hereof.
1.15 "ENVIRONMENTAL LAWS" shall have the meaning set forth in Section 4.9(f)
hereof.
1.16 "EXCLUDED ASSETS" shall have the meaning set forth in Section 2.6(a)
hereof.
1.17 "EXCLUDED LIABILITIES" shall have the meaning set forth in Section
2.6(b) hereof.
1.18 "EXISTING SERVICE AGREEMENTS" shall have the meaning set forth in
Section 7.4(a) hereof.
1.19 "FEBRUARY STATEMENT OF NET ASSETS" shall have the meaning set forth in
Section 3.2.1(c) hereof.
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1.20 "FINANCIAL INVESTOR" shall mean the financial buyers with whom MEI is
currently negotiating. 1.21 "FIRST CLOSING" shall have the meaning set
forth in Section 3.1(a) hereof.
1.22 "GAAP" shall have the meaning set forth in Section 3.2.1(c) hereof.
1.23 "HAVE MADE" shall mean with respect to the licenses granted or
referenced in Sections 7.11, 8.4, 8.5, 8.6 and 8.7 hereof, the right to
have a third party make products for the use and benefit of such entity
or its Subsidiaries, but only if (i) such products are sold by such
entity or its Subsidiaries under the trademarks, trade names or other
commercial indicia of such entity or its Subsidiaries, and (ii) said
products are made by the third party using manufacturing drawings and/or
specifications (a) originated by such entity or its Subsidiaries or (b)
originated by any third party specifically and exclusively for such
entity and/or its Subsidiaries.
1.24 "HAZARDOUS MATERIAL" shall have the meaning set forth in Section 4.9(f)
hereof.
1.25 "HEALTH SERVICES OBLIGATIONS" shall have the meaning set forth in
Section 7.4(c) hereof.
1.26 "INFORMATION TECHNOLOGY SERVICES" shall mean the (i) maintenance of all
software applications currently used in the component recovery business
including, without limitation, material purchasing, WIP tracking and GL
applications and (ii) maintenance of all hardware currently used in the
component recovery business including, without limitation, fully
configured E10K System(s) used for WIP tracking, material purchasing and
GL applications and (iii) such other services as MEI and Buyer may agree
to after good faith discussions prior to or following the Second
Closing.
1.27 "INTERCOMPANY PAYABLE" shall have the meaning set forth in Section
3.2.1(c) hereof.
1.28 "LLC" shall have the meaning set forth in Section 2.3 hereof.
1.29 "LEASES" shall have the meaning set forth in Section 4.9(a) hereof.
1.30 "LISTED PATENTS" shall have the meaning set forth in Section 1.37
hereof.
1.31 "MEI" shall have the meaning set forth in the preamble hereof.
1.32 "MEI LEASE" shall have the meaning as set forth in Section 4.9 hereof.
1.33 "MODIFIED ADJUSTMENT DATE" shall have the meaning set forth in Section
7.1(b) hereof.
1.34 "MSA" shall have the meaning set forth in Section 3.2.1(c) hereof.
1.35 "MSP" shall have the meaning set forth in Section 3.2.1(c) hereof.
1.36 "NOTICE OF OBJECTION" shall have the meaning set forth in Section 7.1(c)
hereof.
1.37 "OCCUPATIONAL HEALTH SERVICES" shall mean the (i) assessment and
treatment (minor) of work-related injuries or illnesses, (ii)
initialization of the incident reporting system, if any, (iii)
maintenance and review of workplace monitoring programs, if any, (iv)
transition on an orderly
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basis of the case management of workers compensation claims to Buyer,
(v) such other services MEI and Buyer may agree to after good faith
discussions prior to or following the Second Closing.
1.38 "PATENTS" shall mean United States patents listed in Schedule 1.38(a),
United States patent applications listed in Schedule 1.38(b) and MEI
invention disclosures listed in Schedule 1.38(c) (collectively, the
"LISTED PATENTS") including all divisionals, continuations,
continuations-in-part, reissues, reexaminations, extensions, foreign
counterparts or equivalents thereof, and all pending applications which
claim priority from any of the Listed Patents or from which one or more
of the Listed Patents derives a priority date, as well as all inventions
claimed or disclosed within the foregoing. Schedule 1.38(c) shall be
updated as necessary to include all invention disclosures relating to
inventions conceived prior to the Effective Date.
1.39 "PCB" shall have the meaning set forth in Section 4.9(f) hereof.
1.40 "PC BUSINESS" shall mean MEI's operations to develop, supply,
manufacture, market, sell and distribute personal computers, laptops and
servers as referred to in MEI's latest Form 10 K or Form 10 Q filed
under the Exchange Act.
1.41 "PC BUSINESS ASSETS" shall mean the assets directly and predominantly
attributable to MEI's operations to market, design, develop, supply,
manufacture, distribute, and sell personal computer products, including,
without limitation, inventories, property, plant, equipment,
manufacturing and distribution assets and related systems. "PC Business
Assets" shall not include cash and cash equivalents, liquid investments,
or the assets directly and predominantly attributable to the operations
of MEI's other reportable segments, including, without limitation, the
HostPro and SpecTek operations, as referred to in MEI's latest Form 10-K
or Form 10-Q filed under the Exchange Act.
1.42 "PC SALES DIVISION ASSETS" means that portion of the assets of the PC
business operations of MEI that are directly and predominantly
attributable to MEI's operations to market and sell personal computer
products, including, but not limited to, customer accounts. "PC Sales
Division Assets" shall not include the MEI's cash and cash equivalents,
liquid investments, or any of the assets directly attributable to (i)
MEI's operations to supply, manufacture and distribute personal computer
products; or (ii) the operations of the MEI's other reportable segments,
including, without limitation, the HostPro and SpecTek operations, as
referred to in the MEI's latest Form 10-K or Form 10-Q filed under the
Exchange Act.
1.43 "PERMITTED REAL PROPERTY LIENS" shall have the meaning set forth in
Section 2.2 hereof.
1.44 "PRELIMINARY ADJUSTMENT DATE" shall have the meaning set forth in
Section 7.1(a) hereof.
1.45 "PRELIMINARY STATEMENT OF NET ASSETS" shall have the meaning set forth
in Section 7.1(a) hereof.
1.46 "PRE-EXISTING CONTAMINATION" shall have the meaning set forth in
Schedule 2.6(b) hereof.
1.47 "PURCHASE PRICE" shall have the meaning set forth in Section 3.2.2(a)
hereof.
1.48 "PURCHASE OPTION" shall have the meaning set forth in the preamble
hereof.
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1.49 "PURCHASED ASSETS" shall have the meaning set forth in Section 2.7
hereof.
1.50 "PWC" shall have the meaning set forth in Section 7.1(d) hereof.
1.51 "QUALIFYING TRANSACTION" shall mean a sale of all or substantially all
of the PC Business Assets or the PC Sales Division Assets or the capital
stock of the PC Business, or a merger, or other business combination
involving the PC Business, which sale, merger, or other business
combination, as applicable, results in the effective sale of the
operations of the PC Business by MEI to a third party acquiror.
1.52 "REAL PROPERTY" shall have the meaning set forth in Section 2.1 hereof.
1.53 "RESTATED CRA" shall have the meaning set forth in the preamble hereof.
1.54 "RESULTING ENTITY" shall have the meaning set forth in Section 8.6
hereof.
1.55 "SECOND CLOSING" shall have the meaning set forth in Section 3.1(b)
hereof.
1.56 "SELLER" shall have the meaning set forth in the preamble hereof.
1.57 "SERVICE PROVIDERS" shall have the meaning set forth in Section 7.4(a)
hereof.
1.58 "SCHEDULE 8.5(a) PATENTS" shall have the meaning set forth in Section
8.5 hereto.
1.59 "SCHEDULE 8.6 PATENTS" shall have the meaning set forth in Section 8.6
hereof.
1.60 "SPECTEK ASSETS" shall have the meaning set forth in Section 2.3 hereof.
1.61 "SPECTEK BUSINESS" shall have the meaning set forth in Section 7.1(a)
hereof.
1.62 "SPECTEK SUBLEASE" shall have the meaning set forth in Section 4.9(a)
hereof.
1.63 "SUBSIDIARY" of a parent corporation shall mean a corporation, company,
or other legal entity (i) more than fifty percent (50%) of whose
outstanding shares or securities (representing the right to vote for the
election of directors or other managing authority) are, now or
hereafter, owned or controlled, directly or indirectly, by the parent;
or (ii) which does not have outstanding shares or securities, but more
than fifty percent (50%) of whose ownership interest representing the
right to make the decisions for such corporation, company, or other
entity is, now or hereafter, owned or controlled, directly or
indirectly, by the parent, provided that any such corporation, company,
or other legal entity shall be deemed to be a Subsidiary of such parent
under (i) or (ii) only so long as such ownership or control exists.
1.64 "TAXES" shall have the meaning set forth in Section 9.1(a) hereof.
1.65 "TAX RETURN" shall have the meaning set forth in Section 9.1(b) hereof.
1.66 "TERMINATION DATE" shall have the meaning set forth in Section 3.1(a)
hereof.
1.67 "TITLE POLICY" shall have the meaning set forth in Section 3.2.1(d)
hereof.
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1.68 "TRANSFERRED EMPLOYEES" shall have the meaning set forth in Section 10.1
hereof.
1.69 "TRANSITION PERIOD" shall have the meaning set forth in Section 7.4(a)
hereof.
1.70 "TRANSITION SERVICES" shall have the meaning set forth in Section 7.4(a)
hereof.
1.71 "WARRANTY DEED" shall have the meaning set forth in Section 3.3.1(c)
hereof.
ARTICLE II
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THE PURCHASE AND SALE
2.1 REAL PROPERTY. At the First Closing, and upon the terms and subject
to the conditions of this Agreement, Buyer shall purchase from Seller, and
Seller shall sell, convey, transfer, assign and deliver to Buyer, free and clear
of all liens, encumbrances or other defects of title (except for those
exceptions as set forth in the Title Policy (as defined in Section 3.2.1(e)
below, the "PERMITTED REAL PROPERTY LIENS")), the real property identified in
Schedule 2.1 hereto (the "REAL PROPERTY").
2.2 PATENTS. At the First Closing (as defined in Section 3.1 below), and
upon the terms and subject to the conditions of this Agreement (a) Seller shall,
pursuant to Section 8.1 below, assign and deliver to Buyer the Patents and (b)
Buyer shall convey to Seller and Seller shall accept from Buyer the grant back
license as provided in Article VIII hereto.
2.3 SPECTEK ASSETS. At the Second Closing (as defined in Section 3.1
below), and upon the terms and subject to the conditions of this Agreement,
Buyer shall purchase from Seller, and Seller shall sell, convey, transfer,
assign and deliver to Buyer, free and clear of all liens, encumbrances or other
defects of title, all assets primarily used in the component recovery business
of MEI, Seller and their subsidiaries and affiliates (including, specifically,
SpecTek, LLC, a Delaware limited liability company ("LLC")), hereafter the
"SPECTEK ASSETS," all as identified in Schedule 2.3(a) hereto. The transfer or
conveyance of the SpecTek Assets shall be accomplished pursuant to a xxxx of
sale, the form of which is attached hereto as Schedule 2.3(b) (the "XXXX OF
SALE") and such other documents that may be required to effect the transfer of
the intellectual property as set forth or described on Schedule 2.3(a) hereto;
EXCEPT AS OTHERWISE SET FORTH HEREIN, THE SPECTEK ASSETS ARE SOLD "AS IS" AND
"WITH ALL FAULTS" AND THE SELLER, MEI AND THE LLC MAKE NO WARRANTIES AS TO THEIR
CONDITION OR QUALITY, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
2.4 ASSIGNED CONTRACTS. At the Second Closing, and upon the terms and
subject to the conditions of this Agreement, Seller shall assign to Buyer and
Buyer shall assume from Seller the contracts, including all rights thereunder,
identified in Schedule 2.4 hereto (the "ASSIGNED CONTRACTS"). This Agreement
shall not constitute an agreement to assign any agreement or any right
thereunder if an attempted assignment, without the consent of a third party,
would constitute a breach thereunder.
2.5 ASSUMPTION OF LIABILITIES. At the Second Closing, and upon the terms
and subject to the conditions of this Agreement, Buyer shall assume the
liabilities, and only those liabilities, identified in Schedule 2.5 hereto (the
"ASSUMED LIABILITIES").
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2.6 EXCLUDED ASSETS AND EXCLUDED LIABILITIES.
(a) EXCLUDED ASSETS. Notwithstanding the provisions of Sections 2.1
through 2.4 above, Buyer expressly understands and agrees that the Purchased
Assets (as defined in Section 2.7 below) shall not include any cash or other
assets or property set forth on Schedule 2.6(a) hereto (the "EXCLUDED ASSETS").
Accordingly, Buyer shall not obtain any right, title or interest in and to the
Excluded Assets pursuant to the terms and conditions of this Agreement.
(b) EXCLUDED LIABILITIES. Notwithstanding the provisions of Section 2.5
above, MEI and Seller expressly understand and agree that Buyer does not assume
any liability (whether accrued, absolute, contingent or otherwise, xxxxxx or
inchoate, and whether due or to become due) set forth or described on Schedule
2.6(b) hereto (the "EXCLUDED Liabilities").
2.7 INCORPORATION BY REFERENCE AND DEFINITIONS. All schedules, exhibits,
agreements, documents and attachments referenced in this Agreement are
incorporated herein by such reference in their entirety. The SpecTek Assets,
Real Property, the rights under the Assigned Contracts and the Patents are
sometimes collectively referred to herein as the "PURCHASED ASSETS."
ARTICLE III
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THE CLOSINGS
3.1 TIME AND PLACE OF CLOSINGS. The parties agree that there shall be
two closings. The two closing structure will permit an orderly transition of
employees from one business to the other at a date later than the transfer of
certain assets.
(a) Subject to the satisfaction or waiver of the conditions set forth in
Article XI, the closing of the purchase and sale of the Real Property and the
Patents, as set forth in Sections 2.1 and 2.2 above, shall take place at 3:00
p.m., March 22, 2001, at the offices of MEI or at such other place or date prior
to April 6, 2001(the "TERMINATION Date"), as Buyer and MEI may mutually agree
(the "FIRST CLOSING").
(b) Subject to the satisfaction or waiver of the conditions set forth in
Article XI, the closing of the purchase and sale of the Purchased Assets (except
for the Real Property and the Patents that were the subject of the First
Closing) shall take place at 7:00 p.m., Thursday, April 5, 2001, at the offices
of MEI or at such other place or date prior to the Termination Date as Buyer and
MEI may mutually agree (the "SECOND CLOSING"). The First Closing and the Second
Closing are collectively referred to as the "CLOSINGS."
3.2 DELIVERIES AT THE FIRST CLOSING.
3.2.1 SELLER. At the First Closing, MEI shall, or shall cause Seller to,
deliver the following items to Buyer or its designee:
(a) A copy of resolutions of the boards of directors (or committee or
subcommittee thereof, if applicable) of MEI and Seller, authorizing the
execution, delivery and
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performance of this Agreement, the transfer of the Real Property and the Patents
and the execution, delivery and performance of each other agreement, document or
certificate to which it is a party and is required to be delivered pursuant
hereto or in connection herewith.
(b) A copy of this Agreement duly executed by MEI and Seller.
(c) "FEBRUARY STATEMENT OF NET ASSETS" (i.e., an unaudited statement of
assets minus liabilities) of the component recovery business prepared as of
March 1, 2001, and in accordance with generally accepted accounting principles
in the United States ("GAAP"), provided, however, in the preparation of the
February Statement of Net Assets, Seller shall exclude cash and shall exclude
the liabilities that constitute obligations of the component recovery business
owed to Buyer, Micron Semiconductor Products, Inc. ("MSP") or Micron
Semiconductor Asia Pte. Ltd. ("MSA") by MEI, Seller and their subsidiaries and
affiliates (the "INTERCOMPANY PAYABLE") as of March 1, 2001. The net assets as
calculated on the February Statement of Net Assets may be negative.
(d) A general warranty deed in the form attached hereto as Schedule
3.2.1 (the "WARRANTY DEED") and any other documentation necessary to effect the
transfer of the Real Property.
(e) An ALTA owner's "extended coverage" title insurance policy naming
Buyer as the owner of the Real Property (the "TITLE POLICY").
(f) Duly executed copies of the Leases.
(g) The Patents, the Assignment and any other documentation necessary to
effect the transfer of the Patents.
(h) Internal Revenue Service Form W-9, duly executed by Seller,
attesting that Seller is not subject to withholding under any state or U.S. Tax
Law, in form reasonably acceptable to Buyer.
(i) Schedules 1.38(a), 1.38(b), 1.38(c), 2.1, 3.2.1, 4.9(a), 8.1, 8.3,
8.5(a), 8.5(b), and 8.6.
3.2.2 BUYER. At the First Closing, Buyer, or its designee, shall deliver
the following items to Seller or its designee:
(a) By wire transfer in immediately available funds to the account
designated by Seller in Section 12.3 below, an amount equal to the sum of
$136,555,921 (the "PURCHASE PRICE"). The parties specifically acknowledge and
agree that the Purchase Price shall be in complete payment for the Purchased
Assets, including the SpecTek Business (as defined in Section 6.1 hereof),
regardless of the fact that there shall be a First and Second Closing. In the
event the Second Closing fails to occur regardless of reason, Seller shall
retain that portion of the Purchase Price applicable to the First Closing as MEI
and Buyer shall in good faith agree is consistent with the intent of this
Agreement, and shall return promptly the remainder of the Purchase Price to
Buyer.
(b) A copy of this Agreement duly executed by Buyer.
(c) Schedules 1.38(a), 1.38(b), 1.38(c), 2.1, 3.2.1, 4.9(a), 8.1, 8.3,
8.5(a), 8.5(b), and 8.6.
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3. 3 DELIVERIES AT THE SECOND CLOSING.
3.3.1 SELLER. At the Second Closing, MEI shall, or shall cause Seller
to, deliver the following items to Buyer or its designee:
(a) The Purchased Assets (except for the Real Property and Patents
delivered at the First Closing).
(b) The Xxxx of Sale and such other documentation as may be necessary to
effect the transfer of the intellectual property as set forth on Schedule
2.3(a).
(c) A copy of resolutions of the boards of directors (or committee or
subcommittee thereof, if applicable) of MEI and Seller, authorizing the delivery
to Buyer of the Purchased Assets and the execution, delivery and performance of
this Agreement and each other agreement, document or certificate to which it is
a party and is required to be delivered pursuant hereto or in connection
herewith.
(d) To the extent held by or under the control of MEI, Seller or any
Person controlled by either MEI or Seller, all of the books and records
primarily relating to the component recovery business of Seller or LLC and the
employees of LLC (including medical and personnel records); provided, however,
MEI or Seller shall be entitled to retain, at its or their expense, a complete
copy of such records.
(e) Schedules 2.3(a), 2.3(b), 2.4, 2.5, 2.6(a), 2.6(b), 3.3.2, and 10.1.
3.3.2 BUYER. At the Second Closing, Buyer shall, and shall cause each of
its assignees as may be appropriate to, deliver to Seller the following items:
(a) Such executed consents as are reasonably necessary to consummate the
assumption of the Assigned Contracts contemplated by this Agreement, in the form
attached hereto as Schedule 3.3.2.
(b) Schedules 2.3(a), 2.3(b), 2.4, 2.5, 2.6(a), 2.6(b), 3.3.2, and 10.1.
3.4 TAKING OF NECESSARY ACTION; FURTHER ACTION. If, at any time after
the First or Second Closing, any further action is necessary or desirable to (i)
carry out the purposes of this Agreement, (ii) vest Buyer with full right,
title, interest and possession to all Purchased Assets, free and clear of all
liens or encumbrances, except for the Permitted Real Property Liens and except
for any licenses as to which the Patents are subject as of the Effective Date,
(iii) vest Buyer with full right, title, interest and possession to all assets,
property, rights, privileges, powers and franchises free and clear of all liens
or encumbrances, except for the Permitted Real Property Liens and except for any
licenses as to which the Patents are subject as of the Effective Date, of MEI,
Seller, or any of their subsidiaries or affiliates, primarily used in the
component recovery business and which are discovered or identified subsequent to
the Second Closing, then, in the case of each of the items (i) through (iii)
above, the officers and directors of MEI, Seller and their subsidiaries and
affiliates are fully authorized in the name of their respective corporations or
otherwise to take, MEI and Seller shall, and shall cause their subsidiaries and
affiliates to take, all such necessary or desirable further action, so long as
such action is not inconsistent with this Agreement and shall execute and
deliver
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both before and after the First and Second Closings such further certificates,
agreements and other documents and take such other actions to consummate or
implement the transactions contemplated hereby or to evidence such events or
matters. With respect to Section 3.4(iii) above, the subsequently discovered
assets shall be transferred at their book value, less accumulated depreciation,
calculated in accordance with GAAP, or at such other price if MEI and Buyer
agree otherwise.
ARTICLE IV
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REPRESENTATIONS AND WARRANTIES OF SELLER
MEI and Seller, jointly and severally, represent and warrant to Buyer, as of the
date hereof, the date of the First Closing and the date of the Second Closing,
unless explicitly stated otherwise, as follows:
4.1 ORGANIZATION, STANDING AND POWER. MEI and Seller are each a
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdictions of their respective incorporations and each has all
requisite power and authority to own, operate and lease the properties it now
owns, operates and leases and to carry on its business as it is now being
conducted.
4.2 AUTHORITY. MEI and Seller each has all requisite corporate power and
authority to enter into, execute and deliver this Agreement, to perform their
respective obligations hereunder, and to consummate the transactions
contemplated hereby. The execution and delivery by MEI and Seller of this
Agreement, the performance by MEI and Seller of their respective obligations
hereunder, and the consummation of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action on the part
of MEI and Seller. Assuming due execution and delivery by Buyer of this
Agreement, this Agreement constitutes the legal, valid and binding obligations
of MEI and Seller, and, subject to generally applicable limitations of law and
equitable principles, enforceable against MEI and Seller.
4.3 NO VIOLATIONS. The execution and delivery by MEI and Seller of this
Agreement, the performance by MEI and Seller of their respective obligations
under this Agreement, and the consummation of the transactions contemplated
thereby, do not and will not conflict with, contravene, result in a violation or
breach of or default under (with or without the giving of notice or the lapse of
time or both), or create in any other Person a right of claim of termination,
amendment, or require modification, acceleration or cancellation of, or result
in the creation of any lien (or any obligation to create any lien) upon the
Purchased Assets (i) the Articles of Incorporation or bylaws, or similar
organizational documents and instruments, of MEI, Seller or LLC, (ii) any
contract, loan or credit agreement, note, bond, mortgage, indenture, lease or
other agreement, instrument, permit, concession, franchise or license applicable
to MEI, Seller, LLC or the Purchased Assets, or (iii) any law applicable to MEI,
Seller or LLC or the Purchased Assets.
4.4 SUFFICIENCY OF ASSETS. As of the Second Closing, Schedule 2.3(a)
sets forth all assets, all property, plant, equipment, rights and other assets
(tangible and intangible) primarily used in the component recovery business of
MEI, Seller or any of their subsidiaries and affiliates as currently conducted
and none of such assets are subject to any lien, pledge, charge or encumbrance
of any kind. As of the Second Closing, Seller owns beneficially and of record,
and has good and valid marketable title to or a valid leasehold interest in, all
the SpecTek Assets, free and clear of liens, pledges, charges or encumbrances.
Immediately following the Second Closing, none of MEI, Seller or any of their
subsidiaries or affiliates, shall own any asset primarily used before the Second
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Closing in the component recovery business of MEI, Seller or any of their
subsidiaries or affiliates. The Purchased Assets are the only assets that are
necessary for Buyer to carry on the component recovery business as currently
conducted, consistent with past practices.
4.5 CONSENTS AND APPROVALS. No consent, approval, order or authorization
of, or registration, declaration or filing with, any governmental agency is
required by or with respect to MEI or Seller in connection with the execution,
delivery and performance of this Agreement or the consummation by MEI or Seller
of the transactions contemplated hereby. No consent, waiver or approval of, or
notice to, any third party is required or necessary to be obtained by MEI or
Seller in connection with the execution and delivery of this Agreement and the
performance of their respective obligations hereunder.
4.6 STATEMENT OF NET ASSETS. A true, correct and complete copy of the
February Statement of Net Assets has been delivered by Buyer at the First
Closing. The February Statement of Net Assets presents fairly the assets and
liabilities of the component recovery business of MEI, Seller and their
subsidiaries and affiliates at the date thereof in accordance with GAAP (subject
to the absence of notes and subject to, as of such date, the exclusion of cash
attributable to the component recovery business and the liabilities that
constitute the Intercompany Payable). As of the First Closing, there are no
material liabilities of the component recovery business of MEI, Seller and their
subsidiaries and affiliates, of any nature (whether accrued, absolute,
contingent or otherwise, xxxxxx or inchoate, and whether due or to become due),
that are not reflected in, reserved against or otherwise described in the
February Statement of Net Assets.
4.7 FEES AND EXPENSES. Buyer shall not be responsible for any fees and
expenses (including broker's fees or expenses, if any) incurred by MEI, Seller
or any of their subsidiaries or affiliates in connection with this Agreement and
the transactions contemplated hereby and thereby.
4.8 LITIGATION. There is no private or governmental action, suit,
proceeding, order, claim, arbitration or investigation (each an "ACTION")
pending or, to the knowledge of MEI or Seller, threatened before any agency,
court or tribunal, foreign or domestic, against MEI or Seller or any of the
Purchased Assets or any of its respective members, officers or directors (in
their capacities as such) that would reasonably be expected to have a material
adverse effect on MEI, Seller or the Purchased Assets.
4.9 REAL PROPERTY.
(a) Seller holds good and marketable title to the Real Property, free
and clear of all mortgages, pledges, security interests, liens and encumbrances,
except for the Permitted Real Property Liens and no person or entity has any
right to purchase, encumber or lease the Real Property and that there are no
leases, licenses or occupancy agreements that currently exist that encumber or
affect any portion of the Real Property or any building located thereon except
for the leases, forms of which are set forth in Schedule 4.9(a) attached hereto
(individually the "MEI LEASE" and the "SPECTEK SUBLEASE" and collectively the
"LEASES.")
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(b) The Real Property is a legal parcel. The Real Property and the uses
conducted on the Real Property are in compliance with all applicable building,
fire, life-safety, subdivision and zoning ordinances (including, without
limitation, conditional use, planned unit development, variance, and
"grandfather use" approvals and permits), laws, codes and regulations,
including, without limitation, the Americans with Disabilities Act of 1990, as
amended.
(c) The Real Property, including, but not limited to, paving, sidewalks,
parking areas, landscape areas, sprinkler system(s), foundations, walls, roofs,
other structural components, electrical, plumbing, heating and air conditioning
systems, windows and locks have no latent or patent defects and are in good
operating condition and repair, ordinary wear and tear excepted, subject only to
ordinary maintenance; and all sewer, water, electrical, gas and telephone
services are connected to the public utility network.
(d) The Real Property is not subject to any encroachment, obligation,
lien, mortgage, assessment, covenant, restriction, easement, lease, or other
encumbrance that is not of record. The Real Property is not subject to any
monetary liens or mortgages except for liens for taxes not yet due and payable.
(e) All contractors and suppliers for improvements located on or made to
the Real Property have been fully paid and no inchoate lien rights exist.
(f) None of MEI, Seller or their subsidiaries or affiliates, has used or
stored any Hazardous Material on the Real Property, except as incidental to the
permitted use of the Real Property and only in quantities that are less than the
quantities that are required to be reported under applicable Environmental Laws.
The term "HAZARDOUS MATERIAL" means any substance, material or waste of which
the generation, manufacture, use, storage or disposal is or becomes regulated by
any federal, state or local governmental authority or political subdivision for
the purpose of protecting human health or the environment. For purposes of this
Agreement "Hazardous Material" includes, without limitation, any material or
substance that is (i) defined as a hazardous substance, waste or material under
applicable Environmental Laws, (ii) petroleum products, (iii) asbestos, (iv)
polychlorinated biphenyl ("PCB"), and (v) regulated under the Federal Water
Pollution Control Act, Solid Waste Disposal Act, Resource Conservation and
Recovery Act, Comprehensive Environmental Response, Compensation and Liability
Act, Toxic Substance Control Act, Federal Insecticide, Fungicide and Rodenticide
Act, Emergency Planning and Community Right to Know Act, Clean Air Act, Safe
Water Drinking Act, any act regulating nuclear materials, all amendments to any
of the acts, all rules and regulations promulgated under any of the acts, and
any state or local law, rule or regulation regulating the same general subject
matter as the federal acts. The term "ENVIRONMENTAL LAWS" means any federal,
state or local law, statute, ordinance, regulation, permit or order pertaining
to health, industrial hygiene, environmental conditions or Hazardous Materials,
including, without limitation, any statutes identified in this Section 4.9(f).
(g) To the best knowledge of MEI and Seller no property owned, operated
or occupied for the operation of Seller's component recovery business, is
contaminated with any Hazardous Materials to an extent or in a manner or
condition which would give rise to any liability of MEI, Seller, their
subsidiaries or affiliates, or Buyer under Environmental Laws.
(h) Neither MEI, Seller nor any of their Subsidiaries or affiliates, has
caused and will not cause the disposal or release of any Hazardous Material on
the Property to an extent or in a manner or condition which would give rise to
any liability of MEI, Seller, any of their subsidiaries or
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affiliates, or Buyer, under Environmental Laws. MEI, Seller and their
Subsidiaries and affiliates have operated and maintained the component recovery
business and the Real Property in substantial compliance with Environmental
Laws.
(i) Except with respect to the ground water on the Real Property as
previously disclosed to Buyer, none of MEI, Seller or any of their subsidiaries
or affiliates has received from a governmental authority or agency or third
party, any request for information, notice of claim, demand letter or other
notification, notice or information that MEI or any of its subsidiaries or
affiliates is or may be (i) potentially subject to or responsible for any
investigation or clean-up or other remediation of Hazardous Material, (ii)
potentially liable for damage to persons, property, or natural resources in
connection with any Hazardous Material, or (iii) in violation of any
Environmental Laws.
(j) The Real Property is not subject to any pending, threatened, or
likely federal, state, or local lien, proceedings, claim, liability, or action
for the cleanup, removal, or remediation of any Hazardous Material, asbestos,
PCBs, or underground storage tanks.
(k) There is no asbestos on the Real Property, and no asbestos has been
removed from the Real Property while the Real Property was owned, leased or
operated by MEI, Seller, any of their subsidiaries or affiliates, except
according to the requirements of the Clean Air Act and the Occupational Safety
and Health Act.
(l) There are no underground storage tanks on, in, or under the Real
Property and no underground storage tanks have been closed or removed from the
Real Property.
4.10 DISCLOSURE. No representation or warranty by MEI or Seller in this
Agreement and no statement or information contained in any document (including,
without limitation, statements and schedules referred to in this Article III, if
any, that are a part hereof), certificate, or other writing furnished or to be
furnished by or on behalf of any member of Seller pursuant to the provisions
hereof, when read together and taken as a whole, contains any untrue statement
of material fact or omits to state any material fact necessary in order to make
the statements herein or therein, in light of the circumstances under which they
were made, not misleading.
4.11 PATENTS.
(a) Seller warrants that it is the sole owner of the Patents, that MEI
and Seller have not previously granted any assignment or exclusive license in or
to the Patents to any third party, and that Seller has the full right and
capacity to assign the Patents to Buyer, and to enter into and carry out its
obligations under this Agreement, without conflicting with any other obligation
of Seller. Seller does not represent or warrant that the Patents are not subject
to, or otherwise encumbered by, the previous grant of one or more nonexclusive
licenses in or to the Patents.
(b) Seller warrants that none of the patents listed in Schedule 1.38(a)
have been abandoned for failure to pay maintenance fees required by the United
States Patent and Trademark Office or the patent authority in any other country.
(c) MEI and Seller warrant that, to the best of the knowledge of each,
neither has ever stated or represented to any third party that it will not
enforce any one or more of the Patents or that said third party is free to
practice the invention(s) of any one or more of the Patents (or one of more of
the claims therein) without fear of recourse from MEI or Seller.
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(d) MEI neither represents nor warrants that the use of the Patents will
not result in infringement of any patents of any third party.
ARTICLE V
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REPRESENTATIONS AND WARRANTIES OF BUYER
5.1 ORGANIZATION, STANDING AND POWER. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdictions of its incorporation and has all requisite power and authority to
own, operate and lease the properties it now owns, operates and leases and to
carry on its business as it is now being conducted.
5.2 AUTHORITY. Buyer has all requisite corporate power and authority to
enter into, execute and deliver this Agreement, to perform its obligations
hereunder, and to consummate the transactions contemplated hereby. The execution
and delivery by Buyer of this Agreement, the performance by Buyer of its
obligations hereunder, and the consummation of the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate action
on the part of Buyer. Assuming due execution and delivery by MEI and Seller of
this Agreement, this Agreement constitutes the legal, valid and binding
obligation of Buyer and, subject to generally applicable limitations of law and
equitable principles, enforceable against the Buyer.
5.3 NO VIOLATIONS. The execution and delivery by Buyer of this
Agreement, the performance by Buyer of its obligations under this Agreement, and
the consummation of the transactions contemplated thereby, do not and will not
conflict with, contravene, result in a violation or breach of or default under
(with or without the giving of notice or the lapse of time or both), or create
in any other Person a right of claim of termination, amendment, or require
modification, acceleration or cancellation of, (i) the Articles of Incorporation
or bylaws of Buyer, (ii) any contract, loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument, permit, concession,
franchise or license applicable to Buyer or (iii) any law applicable to Buyer
5.4 CONSENTS AND APPROVALS. No consent, approval, order or authorization
of, or registration, declaration or filing with, any governmental agency is
required by or with respect to Buyer in connection with the execution, delivery
and performance of this Agreement or the consummation by Buyer of the
transactions contemplated hereby. No consent, waiver or approval of, or notice
to, any third party is required or necessary to be obtained by Buyer in
connection with the execution and delivery of this Agreement and the performance
of its obligations hereunder.
5.5 LITIGATION. There is no Action pending or, to the knowledge of
Buyer, threatened before any agency, court or tribunal, foreign or domestic,
against Buyer or any of its respective members, officers or directors (in their
capacities as such) that would reasonably be expected to have a material adverse
effect on Buyer's ability to execute, deliver and perform this Agreement.
5.6 PATENTS. Buyer neither represents nor warrants that the use of the
Patents will not result in infringement of any patents of any third party.
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ARTICLE VI
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THE REORGANIZATION
Subject to the terms and conditions of this Agreement, prior to the First
Closing, MEI and Seller shall cause the following to occur:
6.1 TRANSFER OF REAL PROPERTY. MEI will transfer to Seller, and Seller
will acquire, all right, title and interest to the Real Property, free and clear
of all liens, encumbrances or other defects of title, except Permitted Real
Property Liens.
6.2 TRANSFER OF PATENTS. MEI will transfer to Seller, and Seller will
acquire, all right, title and interest to the Patents, free and clear of all
liens, encumbrances or other defects of title (except for the nonexclusive
licenses as referred to in Section 4.11(a)).
6.3 TRANSFER OF SPECTEK ASSETS. LLC will assign and transfer to Seller,
and Seller will acquire, all right, title and interest to the SpecTek Assets,
free and clear of all liens, encumbrances or other defects of title.
ARTICLE VII
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ADDITIONAL AGREEMENTS
7.1 PURCHASE PRICE ADJUSTMENT.
(a) The Purchased Assets and the Assumed Liabilities constitute the
"SPECTEK BUSINESS." Within twenty (20) days of the Second Closing (such day
being sometimes referred to herein as the "PRELIMINARY ADJUSTMENT DATE"), Seller
shall prepare and deliver to Buyer a the statement of net assets of the SpecTek
Business, prepared in accordance with GAAP, as of the date of the Second Closing
(the "PRELIMINARY STATEMENT OF NET ASSETS"). Notwithstanding the foregoing, in
the preparation of the Preliminary Statement of Net Assets, Seller shall exclude
cash and shall exclude all accounts payable, amounts owed, and financial
obligations outstanding to Buyer, MSP or MSA, from MEI, Seller or their
Subsidiaries and affiliates arising between March 2, 2001, and the Second
Closing, inclusive of both dates, attributable to the component recovery
business.
(b) Prior to the 45th consecutive day immediately following the
Preliminary Adjustment Date (such date being sometimes referred to herein as the
"MODIFIED ADJUSTMENT DATE"), Buyer shall cause to be prepared and delivered to
Seller an audited or unaudited (at Buyer's election) Statement of Net Assets of
the SpecTek Business as of the date of the Second Closing (the "ADJUSTED
STATEMENT OF NET ASSETS"). The Adjusted Statement of Net Assets will be prepared
in accordance with GAAP and consistent with the GAAP used to prepare the
Preliminary Statement of Net Assets. The Adjusted Statement of Net Assets shall
reflect the net assets of the SpecTek Business as of the date of the Second
Closing. Notwithstanding the foregoing, in the preparation of the Modified
Statement of Net Assets, Seller shall exclude cash and shall exclude all
accounts payable, amounts owed, and financial obligations outstanding to Buyer,
MSP or MSA, from MEI, Seller or their Subsidiaries and affiliates arising
between March 2, 2001, and the Second Closing, inclusive of both dates,
attributable to the component recovery business. Following delivery by Buyer to
Seller of the
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Adjusted Statement of Net Assets, Buyer shall give to Seller reasonable access
during Buyer's business hours to those books and records in the possession of
Buyer which relate to the preparation of the Adjusted Statement of Net Assets
and to the work papers, if any, of Buyer and its independent auditors for the
sole purpose of resolving any disputes concerning the Adjusted Statement of Net
Assets and the calculation of the net assets of the SpecTek Business.
(c) Seller shall have 15 days following delivery of the Adjusted Balance
Sheet during which to notify Buyer in writing (the "NOTICE OF OBJECTION") of any
good faith objections to the calculation of the net assets of the SpecTek
Business or the Adjusted Statement of Net Assets as it affects such calculation,
setting forth reasonable specific and detailed description of its objections and
dollar amount of each objection. If Seller objects to the Adjusted Statement of
Net Assets, or Buyer's calculation of the net assets of the SpecTek Business as
reflected thereon, Buyer and Seller shall attempt to resolve any such objections
within 15 days of receipt by Buyer of the Notice of Objection.
(d) If Buyer and Seller are unable to resolve any such dispute within 15
days, Buyer and Seller shall engage PricewaterhouseCoopers ("PWC"), independent
auditors, to assist the parties in the resolution of such dispute.
(e) If Seller fails to deliver the Notice of Objection in accordance
with Section 6.1 (c) above, the Adjusted Statement of Net Assets shall be deemed
to have been accepted by all of the parties to this Agreement and shall become
the "CLOSING STATEMENT OF NET ASSETS." In the event that Seller delivers a
Notice of Objection in accordance with the provisions above and Buyer and Seller
are unable to resolve such dispute by mutual agreement, the determination of PwC
shall be final and binding on the parties and the Adjusted Statement of Net
Assets, together with Buyer's calculation of the net assets of the SpecTek
Business reflected thereon, to the extent modified by PwC shall be deemed to
have been accepted by all of the parties to this Agreement and shall become the
"CLOSING STATEMENT OF NET ASSETS." The calculation of net assets reflected on
any such Closing Statement of Net Assets shall be conclusive and binding on the
parties to this Agreement and no further adjustments shall be made thereto.
(f) The parties shall adjust the Purchase Price in accordance with the
following provisions: (i) if the net assets on the Closing Statement of Net
Assets are less than the net assets of the component recovery business as
reflected on the February Statement of Net Assets, then MEI or Seller shall pay
to Buyer, by wire transfer of immediately available funds to an account
designated in writing by Buyer, within five business days after determination of
the Closing Statement of Net Assets, an amount equal to the aggregate of the
shortfall, without interest; (ii) if the net assets of the SpecTek Business as
reflected on the Closing Statement of Net Assets are greater than the net assets
of the component recovery business as reflected on the February Statement of Net
Assets, then Buyer shall pay to MEI or its designee, by wire transfer of
immediately available funds to an account designated in writing by MEI or
Seller, within five business days after determination of the Closing Statement
of Net Assets, an amount equal to the aggregate of the excess, without interest.
7.2 ACCESS TO INFORMATION. MEI and Seller shall afford Buyer and its
accountants, counsel and other representatives reasonable access during normal
business hours during the period prior to the Second Closing to (i) all of
MEI's, Sellers' and LLC's properties, books, contracts, commitments, records and
all other information reasonably related to the component recovery business and
(ii) all other information as Buyer may reasonably request. Buyer shall be
permitted to make copies of such books, records, and other documents and to
discuss the component recovery
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business with such persons, including, without limitation, LLC's directors,
officers, accountants, suppliers, customers, and creditors, as Buyer considers
necessary or appropriate for the purposes of familiarizing itself with the
SpecTek Business or obtaining any necessary approvals or permits for the
transactions contemplated by this Agreement.
7.3 ASSIGNED CONTRACTS. With respect to an Assigned Contract, if any
required consent for its transfer to Buyer is not obtained by the Second
Closing, MEI, Seller and Buyer shall cooperate in good faith to obtain such
consent as soon as possible after the Second Closing; provided, however, such
cooperation of MEI, Seller and Buyer shall not require MEI, Seller or Buyer to
pay money, commence any litigation or offer or grant any accommodation
(financial or otherwise) to any third party. If following such efforts the
consent is still not obtained, MEI, Seller and Buyer shall enter into a mutually
agreeable arrangement pursuant to which Buyer will obtain the benefits of and
assume the obligations under such contract, in accordance with this Agreement,
provided however that such contract will not be an Assigned Contract. Without
limiting the foregoing, with respect to the consents necessary to transfer any
software licenses, MEI and/or Seller will request that the applicable vendor
consent to the assignment of each such contract to Buyer. If the applicable
vendor gives its consent unconditionally, then such contract shall be considered
an Assigned Contract. If the applicable vendor gives its consent conditioned
upon the payment of any fee, then MEI or Seller shall so notify Buyer, and if
Buyer agrees within 10 days (or such shorter period as the vendor may require)
to pay such fee, then upon payment of such fee, such contract shall be
considered an Assigned Contract. If the applicable vendor does not give its
consent, or such consent is subject to any material condition other than the
payment of a fee, then such contract shall not be considered an Assigned
Contract and MEI and Seller shall not be obligated to enter into a mutually
agreeable arrangement pursuant to which Buyer will obtain the benefits of and
assume the obligations under such software license.
7.4 TRANSITION SERVICES.
(a) The parties acknowledge that MEI and/or its subsidiaries and
affiliates ("SERVICE PROVIDERS") have provided and/or currently provide certain
services to the component recovery business of Seller (or to LLC) to permit
Seller or LLC to conduct the component recovery business including, without
limitation, Information Technology Services, systems, telecommunication
services, Occupational Health Services and security services. The parties
further acknowledge and agree that in order to accomplish an orderly transition
of the SpecTek Business to Buyer, it will be essential that such Service
Providers continue to provide such services to Buyer during a period following
closing. Accordingly, the parties agree that during the one-year period
following the Second Closing (the "TRANSITION PERIOD"), unless terminated
earlier pursuant to the provisions of Section 6.4(b) below, MEI shall make
available to Buyer, at such cost as MEI and Buyer shall mutually agree (which
cost shall be consistent with historical costs for such services) such
Transition Services (i) as are needed to promote a smooth and efficient
functional separation of the SpecTek Business from the operations of MEI, Seller
and their subsidiaries and affiliates and (ii) as are needed to allow reasonable
growth of the SpecTek Business during the Transition Period. The parties
acknowledge and agree that to the extent the Transition Services are provided
for in the SpecTek Sublease of even date herewith between Buyer and MEI, such
services shall be governed by and subject to the terms and conditions of the
SpecTek Sublease and not this Section 7.4. The term "TRANSITION SERVICES" shall
mean all services, goods and facilities requested by Seller, LLC or Buyer during
the Transition Period that are both (x) currently provided and/or have been
provided at any time during the twelve (12) month period immediately prior to
the Second Closing by the Service Providers to the component recovery business
of MEI, Seller and their subsidiaries and affiliates or
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(y) reasonably necessary for the uninterrupted operation and reasonable growth
of the SpecTek Business. Without limiting the generality of the foregoing, all
existing service arrangements, agreements or understandings between the Service
Providers and Seller or LLC with respect to the component recovery business that
are effective immediately prior to the Second Closing (the "EXISTING SERVICE
AGREEMENTS") shall continue in full force and effect through the Transition
Period, subject to Section 7.4(b) below. Transition Services shall be conducted
by the Service Providers in a safe, careful, prudent, good and workmanlike
manner.
(b) Notwithstanding any other provision in this Agreement or in the
Existing Service Agreements, Buyer shall be entitled to terminate any Transition
Service either within five (5) days of the Second Closing or, if later, by
providing MEI at least fifteen (15) days' prior written notice during the
Transition Period. Notwithstanding any other provision in this Agreement or in
the Existing Service Agreements, the obligation of the Service Providers to
provide a particular Transition Service shall end on the earlier of (i) the date
on which MEI no longer provides services with respect to its own employees that
are substantially similar to such Transition Service or (ii) date of which the
SpecTek Sublease terminates.
(c) With respect to Transition Services that constitute occupational
health services, to the extent permitted by law, Buyer hereby agrees to
indemnify and hold MEI harmless from and against any and all losses, claims,
damages, liabilities and obligations of any kind and description, including any
reasonable attorney fees incurred by the MEI in defending or settling such
losses, damages, liabilities and obligations, arising out of MEI's providing
occupational health services to Transferred Employees following the Second
Closing (the "HEALTH SERVICES OBLIGATIONS"); provided, however, prior to making
any payment with respect to the Health Services Obligations, MEI shall provide
Buyer with written notice of its intent to make any such payment and any demands
for the payment and a meaningful opportunity to consult with MEI regarding
whether MEI is legally obligated to make such payment; provided, further, that
if MEI makes any such payment, MEI shall subrogate Buyer with respect to any
claims MEI may have against any third party with respect to such Health Services
Obligations.
7.5 MANAGEMENT OF BUSINESS. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Second Closing, none of MEI, Seller or LLC shall (i) dispose of, grant
any interest in, pledge or otherwise transfer any of the assets that are
Purchased Assets outside the ordinary course of business, (ii) incur any
liability outside the ordinary course of business affecting the Purchased
Assets, (iii) enter into any transaction outside the ordinary course of business
with respect to the Purchased Assets (iv) fail to keep available the services of
the present officers and key employees of LLC or (vi) fail to preserve the
respective relationships of the component recovery business with respect to
customers, suppliers, distributors, licensors, licensees, and others having
business dealings with such business.
7.6 SETTLEMENT OF OBLIGATIONS TO BUYER. On or prior to the First
Closing, MEI or Seller shall pay, by wire transfer of immediately available
funds to an account designated in writing by Buyer, an amount equal to all
accounts payable, amounts owed, and financial obligations outstanding to Buyer,
MSP or MSA under the Intercompany Payable. With respect to all accounts payable,
amounts owed, and financial obligations outstanding to Buyer, MSP or MSA, from
MEI, Seller or their Subsidiaries and affiliates arising between March 2, 2001,
and the Second Closing, inclusive of both dates, attributable to the component
recovery business, MEI or Seller shall, and shall cause their Subsidiaries and
affiliates to, transfer funds equal to such amounts to Buyer or its designee as
soon as
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practicable following the Second Closing, and in no event later than the
Preliminary Adjustment Date.
7.7 COLLECTION OF ACCOUNTS. MEI and Seller agree that, after the Second
Closing, they shall, and shall cause each of their subsidiaries and affiliates
to, promptly transfer to or deliver to Buyer any cash or other property received
directly or indirectly by any of the foregoing with respect to any accounts
receivable included in the Purchased Assets.
7.8 NONDISCLOSURE OF INFORMATION. Nothing contained in this Agreement
shall serve to affect, modify or otherwise terminate any nondisclosure or nonuse
agreements entered into by employees, officers, directors, consultants, agents,
suppliers, or advisors of LLC, MEI, Seller, or any of their subsidiaries or
affiliates with respect to confidential information of the component recovery
business.
7.9 CLOSING COSTS. With respect to the Title Policy, MEI and Buyer shall
split the difference between the actual cost to obtain the extended coverage
title insurance policy and what would have been the cost to obtain a standard
coverage title insurance policy covering the Real Property. All other costs of
closing shall be borne by the party who traditionally bears such cost.
7.10 PATENTS.
(a) MEI shall and shall cause its Subsidiaries, at Buyer's request and
expense, to cooperate with and assist Buyer in the provision of documents and
information in connection with the Patents as reasonably necessary to effectuate
the procurement, maintenance, and enforcement of the Patents, including, without
limitation, providing Buyer with access to files, inventor notes and other
documentation in MEI's or its Subsidiaries' possession or control and allowing
Buyer to interview inventors who are, at the time of any such investigation,
employees of MEI or its Subsidiaries.
(b) With respect to fees and costs of prosecution of Patents, MEI shall
notify Buyer of any fees or other actions that are due or payable within 30 days
after the Effective Date. Buyer shall be responsible for paying all fees due and
costs of prosecution with respect to Patents incurred after the Effective Date.
(c) MEI, on behalf of itself and its Subsidiaries, agrees not to assert
that any of the Patents (or any claims therein) are invalid or unenforceable in
any action, settlement, or negotiation relating to the Patents.
7.11 SPECTEK LICENSE. In order to permit Buyer to operate the component
recovery business, substantially in the manner such business was operated by
MEI, Seller or their Subsidiaries and affiliates, MEI and Seller hereby grant to
Buyer and its wholly-owned Subsidiaries (but only during the period such
entities are wholly-owned Subsidiaries of Buyer), on behalf of MEI and Seller,
and their Subsidiaries and affiliates, a worldwide, perpetual, irrevocable,
nonexclusive, fully paid-up, royalty-free license, without right of sublicense,
under all of its and their rights in the intellectual property primarily being
used in the component recovery business, to (i) make, have made, use, sell,
offer for sale, use, import and recover semiconductor devices, and (ii) make
modifications, enhancements, or derivative works of any intellectual property
that is licensed pursuant to this Section 7.11. In those cases wherein the
intellectual property licensed herein
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includes or is embodied within software, the enumerated licensed rights shall
extend to such software in all forms including both source code and object code
and documentation.
7.12 NONCOMPETITION. MEI and Seller shall not, and shall not suffer or
permit their Subsidiaries and affiliates, for a period of 24 months from the
Second Closing, to engage in any way, either on its, or their, own behalf or for
the benefit of a third party, nor shall it, or they, enter into any agreement or
arrangement, directly or indirectly, for the component recovery of semiconductor
devices including DRAM technology.
ARTICLE VIII
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ASSIGNMENT AND GRANT BACK LICENSE
8.1 ASSIGNMENT. Seller agrees to assign, and hereby does assign, to
Buyer, Seller's entire right, title and interest in and to the Patents,
including without limitation, damages for past or future infringements thereof,
and the right to bring suit and recover against any third party for acts of
infringement occurring before the date of this Agreement. Seller agrees to
execute, concurrently herewith, a formal assignment document (the "ASSIGNMENT")
for the Patents in the form attached hereto as Schedule 8.1. In the event of any
conflict between the provisions of this Agreement and the Assignment, the
provisions of this Agreement shall take precedence.
8.2 DELIVERY OF DOCUMENTATION. Within forty-five (45) days after the
date of this Agreement, MEI and/or Seller will deliver to Buyer all
documentation in the possession or control of either relating to the Patents.
MEI and/or Seller may, at their discretion, retain a copy of any documentation
provided to Buyer pursuant to this subparagraph.
8.3 ASSIGNMENT OF ROYALTY BEARING LICENSE AGREEMENTS. MEI agrees to
assign, and hereby does assign, to Buyer, MEI's entire right, title and interest
in and to the royalty-bearing license agreements listed in Schedule 8.3 hereto.
MEI will retain all payments received before the Effective Date pursuant to the
above royalty-bearing license agreements.
8.4 GRANT OF BUYER LICENSE. Buyer hereby grants MEI and MEI's
Subsidiaries, a non-transferable, fully paid up, worldwide, non-exclusive
license, without the right to sublicense, to make, have made, use, offer for
sale, sell, and lease products and methods under the Patents, such license
continuing until terminated as set forth in Section 8.6 herein.
8.5 GRANT OF FURTHER LICENSE. Buyer hereby grants to MEI, a
non-transferable, fully paid up, worldwide, exclusive license under the patents
and patent applications listed in Schedule 8.5(a) hereto (the "SCHEDULE 8.5(a)
PATENTS") (the exclusivity of such license subject however to existing licenses
of Buyer which are in effect as of the Effective Date and which grant or convey
rights in patents by virtue of the ownership of such patents by Buyer) (third
parties who may have rights pursuant to such existing licenses are identified in
Schedule 8.5(b) hereto), such license shall include the rights to assert the
Schedule 8.5(a) Patents for Defensive Purposes only, and shall continue until
terminated as set forth in Section 8.6 herein; such license shall convey: (a)
the right to sublicense third parties to make, have made, use, offer for sale,
sell, and lease products under such patents, (b) the right to recover damages
for past or future infringements of such patents, and (c) the right to bring
suit and recover against any third party for acts of infringement occurring
before or after the date of this Agreement.
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8.6 TERMINATION OF LICENSES. The licenses granted in Subsection 8.4 and
8.5 shall terminate upon a Change of Control of MEI. However, in the event of a
Qualifying Transaction wherein the acquiror is a Financial Investor or an entity
owned by a Financial Investor (either entity being referred to herein as a
"RESULTING ENTITY"), then, subject to the provisions of Section 8.7 herein, the
Resulting Entity shall be entitled to obtain from Buyer a non-transferable,
fully paid up, worldwide, non-exclusive license, without the right to
sublicense, to make, have made, use, offer for sale, sell, and lease products
and methods under the Patents; which license shall terminate upon a Change of
Control of the Resulting Entity. Additionally, in such event, Buyer hereby
agrees to negotiate in good faith with such Resulting Entity to provide a
limited exclusive license to such Resulting Entity under the patents identified
on Schedule 8.6 hereto (the "SCHEDULE 8.6 PATENTS") (the exclusivity of such
license will be subject to existing licenses of Buyer which are in effect as of
the Effective Date and which grant or convey rights in patents by virtue of the
ownership of such patents by Buyer). Such license to be negotiated would be
limited to allow the assertion of such patents within the field of use of PC
manufacturing for Defensive Purposes only, and would be for a limited time
period, and would include such other terms and conditions as would be agreed
upon by the parties in good faith.
8.7 LICENSE GRANT TO BUYER. As a condition of the license(s) obtained by
a Resulting Entity under Section 8.6 above, and for the duration of such
license(s), the Financial Investor and Resulting Entity shall grant to Buyer,
effective upon the Change of Control, a license under any patents owned or
controlled by the Financial Investor and the Resulting Entity (to the extent
these are two different entities), such license to be a non-transferable, fully
paid up, worldwide, non-exclusive license, without the right to sublicense, to
make, have made, use, offer for sale, sell, and lease products and methods under
such patents.
8.8 DISCLOSURE OF SUBSEQUENT INVENTIONS. Neither Buyer nor MEI shall be
required to disclose or to license to the other any inventions and improvements
relating to the Patents which are first conceived after the Effective Date.
ARTICLE IX
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TAX MATTERS
9.1 DEFINITIONS. For purposes of this Article IX the following terms
shall have the meanings as set forth below.
(a) "TAXES" shall mean all taxes and any tax, including without
limitation, all foreign, Federal, state and local income, sales, employment,
profit, payroll, use, property, excise, unitary, withholding, business,
transfer, registration, license fee, and any other taxes, levies, impost, duties
or governmental obligations, deficiencies, together with all interest and
penalties imposed with respect thereto including any transferee or secondary
liability for Taxes in respect of Taxes as a result of being a predecessor
entity or member of an affiliated, consolidated, combined or unitary group.
(b) "TAX RETURN" shall mean any return, report, information statement,
or estimates relating to Taxes.
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9.2 TAX REPRESENTATION.
(a) MEI, Seller or LLC has, or prior to the Second Closing will have,
prepared and timely filed all Tax Returns required to be filed with respect to
the operations of the component recovery business and/or the Purchased Assets
and such Tax Returns are, or when filed will be, true and correct and have been,
or when filed will be, completed in accordance with applicable law.
(b) MEI, Seller and LLC have, or prior to the Second Closing will have,
timely paid all Taxes required to be paid attributable to or imposed with
respect to the component recovery business and the Purchased Assets and will
have timely withheld and paid over to the appropriate governmental authorities
with respect to employees of the component recovery business all income taxes,
FICA, FUTA and other Taxes required to be withheld.
(c) Neither Seller nor MEI has knowledge of any basis for the assertion
of any claim relating or attributable to Taxes which, if adversely determined,
would result in a Lien on the component recovery business or the Purchased
Assets.
(d) No audit or other examination of any Tax Return of Seller or MEI
with respect to the component recovery business or the Purchased Assets is
presently in progress, nor has MEI, Seller or LLC been formally or informally
notified of any request for such an audit or other examination. No affirmative
agreement, consent or election for federal, state, local or foreign Tax purposes
has been filed or entered into which would adversely affect or be binding upon
the Purchased Assets after the Second Closing.
9.3 TAX COVENANTS.
(a) Subject to section 9.3(c) below, MEI, Seller and LLC will be
responsible for the preparation and filing of all Tax Returns of MEI, Seller and
LLC (including Tax Returns required to be filed after the Second Closing) to the
extent such Tax Returns include or relate to the operations of the component
recovery business or the use or ownership of the Purchased Assets prior to the
Second Closing. Such Tax Returns shall be true, complete and correct and
prepared in accordance with applicable law. Seller and/or MEI, as the case may
be, will make all payments for Taxes required with respect to such Tax Returns
or attributable to the sale of the Purchased Assets.
(b) Buyer will be responsible for the preparation and filing of all Tax
Returns it is required to file with respect to Buyer's ownership or use of the
Purchased Assets or its operation of the SpecTek Business attributable to
taxable periods (or portions thereof) commencing immediately after the Second
Closing. Buyer's Tax Returns shall be true, complete and correct and prepared in
accordance with applicable law. Buyer will make all payments for Taxes required
with respect to Buyer's Tax Returns.
(c) Except to the extent the parties agree otherwise (such as in escrow
instructions), in the case of any real or personal property taxes (or other
similar taxes) attributable to the Purchased Assets which are reportable for a
taxable period commencing before the Second Closing and ending thereafter,
Seller shall prepare such returns to the extent such returns are due prior to
the Second Closing and Buyer shall have five days to review such returns prior
to filing, and Buyer shall make all payments required with respect to any such
return to the extent payments are due after the Second Closing, provided,
however, Seller and /or MEI will reimburse Buyer concurrently therewith to the
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extent any payment made by Buyer relates to that portion of the taxable period
ending on or before the Second Closing prorated on a per diem basis.
(d) To the extent relevant to the component recovery business of MEI,
Seller or their subsidiaries and affiliates or the SpecTek Business of Buyer,
each party shall (i) provide the other with such assistance as may reasonably be
required in connection with the preparation of any Tax Return and the conduct of
any audit or other examination by any taxing authority or in connection with
judicial or administrative proceedings relating to any liability for Taxes and
(ii) retain and provide the other with all records or other information that may
be relevant to the preparation of any Tax Returns, or the conduct of any audit
or examination, or other proceeding relating to Taxes. MEI and Seller shall
retain all relevant documents, including prior years' Tax Returns, supporting
work schedules and other records or information that may be relevant to such
returns and shall not destroy or otherwise dispose of any such records without
the prior written consent of Buyer.
9.4 TRANSFER TAXES. Seller shall be responsible for and pay when due any
and all income, sales, use or similar transfer taxes attributable to the sale of
the Purchased Assets. Buyer shall cooperate with Seller to the extent reasonably
requested to minimize the imposition of any such taxes.
9.5 EMPLOYEE WITHHOLDING. Buyer shall prepare and furnish to those
employees of LLC who were employees of LLC prior to the Second Closing
("CONTINUING EMPLOYEES") Form W-2 which shall reflect all wages and compensation
paid to Continuing Employees for that portion of the calendar year in which the
Second Closing occurs during which the Continuing Employees were employed by
LLC. Seller or MEI, as the case may be, shall furnish to Buyer the Forms W-4 and
W-5 of each Continuing Employee. Buyer shall send to the appropriate Social
Security Administration office a duly completed Form W-3 and accompanying copies
of the duly completed Forms W-2. It is the intent of the parties hereunder that
the obligations of Buyer and Seller under this Section 7.6 shall be carried out
in accordance with Section 5 of Revenue Procedure 84-77.
ARTICLE X
---------
EMPLOYEE MATTERS
10.1 EMPLOYEES. The employment of all LLC employees listed on Schedule
10.1 hereto shall be transferred by MEI, Seller and LLC to Buyer as of the
Second Closing ("TRANSFERRED EMPLOYEES"). All Transferred Employees will
continue to receive the same compensation as they are receiving as of the date
of this Agreement, subject to such changes as Buyer may approve. Unless Buyer
and MEI agree otherwise, LLC shall be responsible for payment of all
compensation and benefits payable to all Transferred Employees through and
including the date of the Second Closing. For purposes of determining
eligibility to participate, scope, quantity of benefits and transitional issues
related thereto under Buyer's employee benefit programs, Buyer shall credit
Transferred Employees with service rendered to MEI, Seller or LLC through the
Second Closing, as Buyer and MEI may mutually agree.
ARTICLE XI
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CONDITIONS TO CLOSING
11.1 OBLIGATIONS OF EACH PARTY. The respective obligations of each party
to this Agreement to consummate and effect the transactions contemplated hereby
shall be subject to the
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satisfaction at or prior to each of the First and Second Closing of the
following condition, which may be waived, in writing, by agreement of all the
parties hereto:
(a) No temporary restraining order, preliminary or permanent injunction
or other order issued by any court of competent jurisdiction or other legal or
regulatory restraint or prohibition preventing the consummation of the
transactions contemplated hereby, shall be in effect, nor shall any proceeding
brought by any administrative agency, commission, or other governmental
authority or instrumentality, domestic or foreign, seeking any of the foregoing
be pending, nor shall any statute, rule, regulation or order be enacted,
entered, enforced or deemed applicable to the transactions contemplated hereby,
which makes the consummation of the transactions contemplated hereby illegal. In
the event an injunction or other order shall have been issued, each party
agrees, subject to the other terms of this Agreement, to use its best efforts to
have such injunction or other order lifted.
(b) The consent, approval or waiver of each person whose consent or
approval shall be required in order to consummate the transactions contemplated
by this Agreement shall have been obtained.
11.2 OBLIGATIONS OF SELLER. The obligations of Seller to consummate and
effect this Agreement and the transactions contemplated hereby shall be subject
to the satisfaction at or prior to each of the First and Second Closings of each
of the following conditions:
(a) The representations and warranties of Buyer in this Agreement shall
be true and correct in all material respects on and as of the date of this
Agreement and on and as of each of the First and Second Closing as though such
representations and warranties were made on and as of each such time, except to
the extent that any representations and warranties expressly relate to an
earlier date, or later date, in which case such representations and warranties
shall be true and correct in all material respects as of such earlier date, or
later date, as the case may be,
(b) Buyer shall have performed and complied with all covenants,
obligations and conditions of this Agreement (except in immaterial respects)
required to be performed and complied with by Buyer as of each Closing, and
(c) Buyer shall have executed, acknowledged where required, and
delivered all documents required by this Agreement, and each such document shall
be in full force and effect.
11.3 OBLIGATIONS OF BUYER. The obligations of Buyer to consummate and
effect this Agreement and the transactions contemplated hereby shall be subject
to the satisfaction at or prior to each of the First and Second Closings of each
of the following conditions:
(a) The representations and warranties of MEI and Seller in this
Agreement that are qualified by materiality shall be true and correct in all
respects, and the representations and warranties of MEI and Seller in this
Agreement not so qualified shall be true and correct in all material respects,
on and as of the date of this Agreement and on and as of the First and Second
Closings as though such representations and warranties were made on and as of
such time, except to the extent that any representations and warranties
expressly relate to an earlier date, or later date, in which case such
representations and warranties shall be true and correct as of such earlier
date, or later date, as the case may be.
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(b) MEI and Seller shall have performed and complied with all covenants,
obligations and conditions of this Agreement (except in immaterial respects)
required to be performed and complied with by MEI and Seller as of each of the
First and Second Closings.
(c) MEI, Seller and LLC shall have executed, acknowledged where
required, and delivered all documents required by this Agreement, and each such
document shall be in full force and effect.
(d) MEI shall have delivered to Buyer an affidavit executed by MEI under
penalty of perjury that (i) complies with Internal Revenue Code Section
1445(b)(2), or the corresponding provision of any future law, (ii) provides
MEI's and Seller's United States Taxpayer identification number, and (iii)
states that neither MEI nor Seller is a foreign person.
(e) Buyer shall have received a duly and validly executed copy of all
agreements, instruments, certificates and other documents in form and substance
reasonably satisfactory to Buyer that are necessary and appropriate to evidence
the release of any and all liens and other encumbrances against the Purchased
Assets and property acquired by Buyer under this Agreement.
11.4 FIRST CLOSING UNAFFECTED BY SECOND CLOSING. Notwithstanding any
other provision of this Agreement, in the event the conditions to Closing are
satisfied as to the First Closing but not the Second Closing, the First Closing
shall be unaffected thereby, subject to the provisions of 3.2.2(a) hereof.
ARTICLE XII
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GENERAL PROVISIONS
12.1 SURVIVABILITY OF COVENANTS, REPRESENTATIONS AND WARRANTIES. The
representations and warranties in this Agreement shall terminate on the
twenty-four (24) month anniversary of the Closing; provided, however, that (i)
to the extent a claim or notice is given prior to such anniversary, such
representation or warranty shall survive indefinitely until such claim is
finally resolved, (ii) the representations and warranties under Article VII
shall survive for the applicable Statute of Limitations and (iii) the
representations and warranties set forth in Section 4.9(a), 4.9(d), and 4.9(f)
through (l) shall survive the Closing and continue indefinitely. The covenants
and agreements set forth in this Agreement shall survive the Second Closing.
12.2 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with confirmation of receipt) to the parties
at the following address (or at such other address for a party as shall be
specified by like notice):
(a) MEI or Seller: (b) Micron Technology, Inc.
Micron Electronics, Inc. Micron Technology, Inc.
000 Xxxx Xxxxxxx Xxxx 0000 Xxxxx Xxxxxxx Xxx
Xxxxx, Xxxxx 00000 Xxxxx, Xxxxx 00000
Attention: Vice President, Attention: Vice President, General
General Counsel Counsel and Corporate Secretary
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Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
with a copy to: with a copy to:
Fenwick & West LLP Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Two Palo Alto Square 000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000 Xxxx Xxxx, XX 00000
Attention: Xxxxxx XxXxxxxx Attention: Xxxx Xxxx
Facsimile No.: (000) 000-0000 Facsimile No.: (000) 000-0000
12.3 ACCOUNT INFORMATION. All payments called for under this Agreement
shall be in United States currency, without deductions of taxes of any kind,
payable to MEI at U.S. Bank of Oregon, 000 X.X. Xxx Xxxxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxx 00000, X.X.X. by wire transfer to:
Micron Electronics, Inc.
Account No: 153607639637
ABA/Routing No: 000000000
or to such other account that MEI may request in writing.
12.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart. Facsimile signatures shall be deemed
as valid as original signatures.
12.5 ENTIRE AGREEMENT; NONASSIGNABILITY; PARTIES IN INTEREST. This
Agreement and the documents and instruments and other agreements specifically
referred to herein or therein or delivered pursuant hereto or thereto, including
any exhibits and schedules, (a) constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof, (b) are not intended to confer upon any
other person any rights or remedies hereunder; and (c) shall not be assigned by
operation of law or otherwise by Seller without the prior written consent of
Buyer and MEI, by Buyer without the prior written consent of Seller and MEI or
by MEI without the prior written consent of Buyer and Seller.
12.6 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement shall be
governed by and construed in accordance with the laws of the State of Idaho
(without giving effect to choice of law principles thereof) applicable to
contracts made and to be performed in the State of Idaho. Each of the parties
hereto irrevocably consents to the exclusive jurisdiction of the courts of the
State of Idaho in connection with any matter based upon or arising out of this
Agreement or the matters contemplated herein, agrees that process may be served
upon them in any manner authorized by the laws of the State of Idaho for such
persons, and waives and covenants not to assert or plead any objection which it
might otherwise have to such jurisdiction and such process.
12.7 RULES OF CONSTRUCTION. Each of the parties hereto acknowledges and
agrees that such party has been represented by counsel during the negotiation,
preparation and execution of this Agreement and, therefore, waives the
application of any law, regulation, holding or rule of
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construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
12.8 SPECIFIC PERFORMANCE. The parties each acknowledge that, in view of
the uniqueness of LLC's component recovery business and the transactions
contemplated by this Agreement, each party would not have an adequate remedy at
law for money damages in the event that this Agreement were not performed in
accordance with its terms, and therefore agrees that the other parties shall be
entitled to specific performance of the terms hereof in addition to any other
remedy to which it may be entitled, at law or in equity. Any and all remedies
herein expressly conferred upon a party will be deemed cumulative with and not
exclusive of any other remedy conferred hereby, or by law or equity upon such
party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
12.9 HEADINGS. The descriptive headings of the Articles, Sections and
subsections of this Agreement are for convenience only and do not constitute a
part of this Agreement.
12.10 PUBLICITY AND NON-DISCLOSURE.
(a) Subject to Section 12.10(b) below, MEI and Buyer shall coordinate
all publicity relating to the transactions contemplated by this Agreement and no
party shall issue any press release, publicity statement or other public notice
relating to this Agreement, or the transactions contemplated hereby or thereby,
without obtaining the prior consent of MEI and Buyer except as is necessary or
required to comply with legal requirements.
(b) Except for recording the Assignment with the appropriate patent
authorities (as described in Section 8.1), and disclosing that the transfer of
title to the listed Patents has occurred, Buyer and MEI both agree to keep in
confidence, and not to disclose to any third party, any additional terms and
conditions of this Agreement that relate to the Patents, except that MEI and
Buyer party may disclose the Agreement and its terms and conditions or parts
thereof relating to the Patents with the prior written permission of the other
or to the extent required by law.
12.11 AMENDMENTS; WAIVERS. This Agreement and any schedule or exhibit
attached hereto may be amended only by agreement in writing of all of the
parties hereto. No waiver of any provision nor consent to any exception to the
terms of this Agreement or any agreement contemplated hereby shall be effective
unless in writing and signed by the party to be bound and then only to the
specific purpose, extent and instance so provided. No such waiver shall be
deemed to constitute the waiver of any other breach of the same or of any other
term or condition of this Agreement.
12.12 SEVERABILITY. If any provisions herein shall be held invalid or
unenforceable by any court of competent jurisdiction or as a result of future
legislative action, such holding or action shall be strictly construed and,
subject to applicable law, shall not affect the validity or effect any other
provisions herein. Upon any such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.
12.13 RELATIONSHIP OF THE PARTIES. Except as specifically provided
herein, if at all, neither MEI nor Buyer shall act or represent or hold itself
out as having authority to act as an agent or
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partner of the other party, or in any way bind or commit the other party to any
obligations. Any attempt to bind or commit the other party to any obligation,
before or after the Effective Date, shall be ineffectual, null, and void. The
rights, duties, obligations and liabilities of the MEI and Buyer shall be
several and not joint or collective, and nothing contained in this Agreement
shall be construed as creating a partnership, joint venture, agency, trust or
other association of any kind between MEI and Buyer, each such party being
individually responsible only for its obligations as set forth in this
Agreement.
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IN WITNESS WHEREOF, MEI, Seller and Buyer have caused this Agreement to
be executed and delivered by their respective officers thereunto duly
authorized, all as of the date first written above.
MEI CALIFORNIA, INC. (SELLER)
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------------
Xxxxx X. Xxxxxxx, President and
Chief Financial Officer
MICRON ELECTRONICS, INC.
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Xxxxx X. Xxxxxxx, Senior Vice President
Finance and Chief Financial Officer
MICRON TECHNOLOGY, INC. (BUYER)
By: /s/ X. X. Xxxxxx, Xx.
-----------------------------------------
X. X. Xxxxxx, Xx., Vice President Finance
and Chief Financial Officer
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