Exhibit 10.1
Memorandum of Understanding
Between
Seller: Grand Pacific Optoelectronics Corporation No7 Innovation 1st Road,
Science-Based Industrial Park, Hsinchu 300, Taiwan ROC. (GPO).
And
Purchaser: International DisplayWorks, Inc. Xxxxx 000, 000 Xxxxx Xxxxx, Xxxxxxx,
Xxxxxxxxxx XXX. (IDW)
1 RECITALS
A. The Seller was engaged in the manufacture of Liquid Crystal Display and
Modules (LCMs) until approximately February 2004 when following a decision to
withdraw from the business the majority of the employees were released and
buyers sought for the equipment.
B. Purchaser wishes to purchase from the seller and the seller wishes to sell to
Purchaser all the assets used by the seller in its LCM business, upon the terms
and conditions of this MOU.
C. Purchaser's employees have visited Seller's location for the purposes of
inspection and were furnished with a listing of the assets per exhibit A. It is
mutually agreed that this listing is a working document and may contain minor
inaccuracies or omissions and inclusions that seller may not be able to
identify.
D. Purchaser intends to purchase certain equipments from seller and this
Memorandum of Understanding ( " MOU")is intended to set forth the good faith
intention of both parties and the terms of this MOU will be a legal binding
document.
E. The intention of the purchaser to re-locate the equipment to the PRC is
noted.
2 DEFINITIONS
When used in this MOU, the following terms shall have the respective meanings
set forth below: "MOU'` shall mean this MOU, including all exhibits and
schedules thereto, as the same may hereafter be amended, modified or
supplemented from time to time. "Assets'` shall mean all of the equipments
listed in appendix A as refined and corrected prior to contract.
3 SALE OF ASSETS
Seller agrees to sell to Purchaser the Assets described in Exhibit A, attached
hereto and incorporated herein by this reference as is, in situ, inclusive of
the following:
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1. All such other equipment used in the manufacture of LCM's in the
seller's premises during the inspection visits by the buyer's
employees in March and April exclusive of the Clean Rooms,
air-conditioning equipment, compressed air, water systems and fire
control equipment.
2. Hardware, software, computers and peripheral equipment required for
each item of equipment to function as last used by purchaser in
operation.
3. Specialist tools or equipment required for maintenance of the
equipment supplied as part of the original purchase and still in
Seller's possession
4. All spare parts and consumable items such as specialist oils and
lubricants, seals etc currently in the possession of the Seller,
including but not limited to the items listed in Appendix B.
In addition the seller shall apply its best efforts to include the following
items with each asset:
5. All manuals for operation, maintenance and calibration of the
equipment whether supplied by the manufacturer or purchased from a
third party including specialist advice and recommendations from
consultants or written by in-house staff
6. Service records, certificates of calibration issued by standards
agencies.
7. Warranty certificates, service records, logs of modifications and
other such documentation that may be associated with the equipment.
8. Copy of original purchase invoice and original of the Certificate of
Origin or similar paper work that may satisfy import documentation
requirements for the PRC.
4 DELIVERY
The Assets are currently located in No7 Innovation 1st Road, Science-Based
Industrial Park, Hsinchu 300, Taiwan ROC. Purchaser shall be responsible for the
un-installation of the Assets, packaging and removal of the assets. Purchaser to
take reasonable steps not to damage fabric of the property but shall not be
liable to make good or repair the property and is permitted to knock down walls,
alter entrance etc to permit removal of the equipment in a semi-assembled state.
5 PURCHASER AND SELLER
The purchaser as defined in this MOU reserves the right to substitute any one or
more of its wholly subsidiaries as party to the definitive contract provide that
the obligations of the subsidiary shall be guaranteed by IDW Inc.
In respect of clause 10 GPPC shall guarantee the performance of its subsidiary
Grand Pacific Optoelectronics Corporation.
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6 PAYMENT
The total price of the Assets is USD6,000,000. (six million United States
dollars) 50% of the Payment shall be made as a deposit when both parties execute
the formal Asset Purchase Agreement, and remaining 50 % of the payment shall be
made before removal of the Assets from the seller's premises and in any event no
later than May 31st 2004. The deposit shall be held in Escrow in a Grade A bank.
Payment shall be released on shipment. To the extent the buyer shall ship in
installments the payment shall be released in the proportion to the value the
represents to the total value per the listing in Appendix A.
7 INSURANCE
Seller shall maintain or procure insurance to cover the risk of fire, theft,
water damage, earthquake until such assets are removed from seller's premises at
a value not less than 150% of the purchase price. In the event of loss the net
proceeds of a claim, which seller agrees to prosecute on buyer's behalf, shall
be payable to Buyer.
8 PRESERVATION OF CONDITION
Seller shall take all reasonable steps to preserve the condition of the
equipment until it is packaged by Buyer. Such steps shall include the provision
of air conditioning and humidity control, operation of fire protection systems,
provision of security but shall not include specialist "decommissioning" steps
such as drainage of oils and lubricants or packing with silica gel or similar
desiccant which shall be the responsibility of the buyer.
Seller shall not relocate the equipment and shall restrict access from the date
of signing of this MOU to such staff required to fulfill its obligations of
preservation and security only.
9 TAXES
All the sales tax, tariff, and other re-export expenses shall be borne by
Purchaser. Company shall not under any obligation to contest the validity of any
Taxes or to prosecute any claims for refunds. Seller warrants that there is no
information in its possession or seller could reasonably have been expected to
have known, to indicate that taxes, duty clawbacks or other amounts payable to
the Government of Taiwan or its agencies, that become the liability of the buyer
would exceed 10% of the purchase price.
10 TITLE
Sellers warrants that it has or shall procure clean title and such other
permissions that purchaser shall require to export the assets, to all the assets
in Appendix A and such other assets as Buyer may have reasonably have expected
to be included in Appendix A by virtue of clause 3 above or shown to the during
the course of their inspection visits. Buyer may advertise its intention to
purchase the assets in appropriate press and take such other steps that it shall
in its discretion believe necessary to satisfy itself.
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It is expressly agreed between the parties that proof of title is a condition
precedent to completion of the agreement failing which the deposit shall be
returned to the buyer.
11 Purchased Assets Acquired `As Is`.
Purchaser acknowledges that, except as otherwise expressly provided herein,
Purchaser is acquiring the purchased assets `As Is` and `where is` as of the
Closing date, without any express or implied warranties as to the fitness,
merchantability or condition of the purchased assets or as to any other matter.
Purchaser further acknowledge that, except as otherwise expressly provided
herein, no express or implied warranty, representation, covenant or MOU
whatsoever has been made to or for Purchaser with respect to any licenses,
permits, certificates or similar governmental approvals required for the
operation of the equipment after the Closing. COMPANY MAKES NO OTHER WARRANTIES
TO PURCHASER, EXPRESS OR IMPLIED, AND HEREBY EXPRESSLY DISCLAIMS ANY WARRANTY OF
MERCHANTABILITY OR FITNESS OR FUNCTION OF THE ASSETS.
Not withstanding the above the Seller undertakes that it shall make reasonable
effort to transfer any warranties issued by the manufacturer that are still in
force to the Purchaser save any amounts payable are for the account of the
Purchaser.
12 Vacation of Location
The purchaser shall remove all the assets described above from the Location no
later than July15th provided the HSPA provides approval within 30 days or less
from the date of execution of the formal contract. In the event the processing
period of the approval takes longer the vacation date shall be extended
accordingly.
13 OTHER DOCUMENTS
Seller agrees to prepare necessary documents for the the export of the Assets to
third country and assist Purchaser in the re-export application to Hsinchu
Science Park Authority.
14 FORMAL AGREEMENT
Both parties agree to execute a formal Asset Purchase Agreement based on the
terms of this MOU no later than April 30th, 2004.
15 EXECUTION
Upon execution of this MOU the seller shall:
1. Immediately terminate all negotiations with all other parties
expressing an interest to purchase the equipment until such time as
the Buyer fails in a material respect to honor the obligations of this
MOU.
2. Permit unrestricted access to the equipment for Buyer's employees,
consultants and contractors agents and advisors.
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3. Permit buyer to employ or otherwise procure the services of former
employees and consultants of the seller for assistance with
decommissioning and re-installation of the equipment.
Upon payment of the first installment the Buyer shall be granted access to
commence de-installation, de-commissioning and packaging. Copies of all
packaging documentation including description shall be provided to the Seller in
the event that the purchase is cancelled.
16 FORCE MAEJURE.
In the event of riots, civil commotion or civil unrest, shipping or other
transportation strikes within the ROC the deadlines for removal of the assets
may be extended until a normal state of affairs is re-established.
In the event of the imposition of export ban from Taiwan or import ban from the
PRC the parties shall apply best efforts in good faith to establish an
alterative arrangement, bearing the additional costs equally.
17 PRESS RELEASES AND FILINGS.
On signing of this MOU the parties may make such press releases and public
filings as they think fit and in particular all necessary public filings to
comply with the applicable regulations governing disclosure of material events.
18 COUNTERPARTS.
This agreement may be executed in counterparts and exchanged by fax. Both
parties undertake to provide signed originals by courier within five working
days of the exchange of faxes.
19 SIGNING POWERS
The signatories to this document represent that they have the authority to sign
and have taken all necessary steps such that the corporations they represent may
enter into this MOU.
GPO warrants that it has obtained the approval of GPPC to enter into this MOU.
20 COURT OF LAW
This agreement shall be interpreted by and both parties submit to the non
exclusive jurisdiction of the Courts and laws of the State of California, USA.
21 COSTS
Each party shall bear its own save the costs of the Escrow agreement which shall
be shared equally between the parties.
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Signed on behalf of the Buyer Signed on behalf of the Seller
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Xxxxxxx X Xxxxxxxx April 12th 2004 Xxxxx Xxxx Yuh
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Vice Chairman and CTO Vice Chairman GPPC,
Chairman GPO
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Xxx X Xxxxxxxxxx April 12th 2004 Xxxxxx X.X.Xxxxx
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Chief Financial Officer Director GPO
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Appendix A: List of the Assets
Appendix B: List of Spare parts and Consumable Items
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