UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 31, 1996
SCI Systems, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-2251 63-0583436
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(State or other jurisdiction) (Commission File (IRS Employer
of incorporation) Number) Identification No.)
c/o SCI Systems (Alabama), Inc.
2101 West Clinton Avenue, Huntsville, Alabama 35805
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(Address of principal executive offices) (Zip Code)
(302) 998-0592
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On May 31, 1996 the Company finalized an agreement with Apple Computer, Inc.
("Apple") to purchase Apple's 360,000 square foot Fountain, Colorado
manufacturing plant (the "Fountain Facility"), related equipment and certain
inventory. The Fountain Facility provided manufacturing services in support of
Apple's product requirements for the Americas. The Fountain Facility
manufactures subassemblies and finished computers for Apple, and employed
approximately 1,000 employees. The acquisition price aggregated approximately
$195 million in cash.
In conjunction with this asset acquisition, the Company entered into a related
multiyear manufacturing agreement with Apple. The manufacturing agreement
provides that the Company will manufacture agreed upon levels of designated
Apple products. The Company expects the Fountain agreement to result in
significant volume of business. The Fountain Facility will also provide the
Company with manufacturing capacity for potential use by other customers.
The source of funds for the purchase of the aforementioned assets was the April
1996 issuance of 5% Convertible Subordinated Notes due 2006. Prior to this asset
acquisition, the Company performed other contract manufacturing services
worldwide for Apple. No relationship exists between the Company and Apple with
regard to their officers, directors, affiliates or associates.
Item 7. Exhibits.
2(a). Purchase Agreement between the Company and Apple Computer, Inc.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SCI SYSTEMS, INC.
Date: June 14, 1996 By: /s/ Olin B. King
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Olin B. King
Chairman of the Board and
Chief Executive Officer
Exhibit 2(a).
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is dated as of April 4,
1996 (the "Effective Date"), and is made by and between APPLE COMPUTER, INC., a
California corporation (hereinafter "Apple"), and SCI SYSTEMS, INC., a Delaware
corporation ("SCI").
Recitals
A. Apple is engaged in the business of designing, manufacturing,
marketing, distributing and selling personal computers and other related
electronic products.
B. Apple desires to sell, and SCI desires to purchase, upon the terms and
subject to the conditions set fort by the appropriate person outstanding shares
of capital stock of a wholly-owned subsidiary of Apple ("NEWCO"), a corporation
which will be formed on or before the Closing Date to hold certain assets used
by Apple in the operation of its manufacturing facility in Fountain, Colorado
(the "Fountain Facility").
C. Apple and SCI mutually desire that, after the Closing, NEWCO shall
operate the Fountain Facility, and shall, inter alia, manufacture and assemble
certain Apple Products at the Fountain Facility, pursuant to the terms and
conditions set forth in the Manufacturing Agreement and the other Related
Agreements to be executed and entered into by the parties at or prior to the
Closing.
NOW, THEREFORE, for and in consideration of the premises and of the mutual
covenants and agreements herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as follows:
1. SALE AND TRANSFER OF SHARES; CLOSING
1.1 Shares. Subject to the terms and conditions of this Agreement, at the
Closing, Apple will sell, transfer and deliver all of the outstanding shares of
the capital stock of NEWCO (the "Shares") to SCI, and SCI will purchase the
Shares from Apple for the Purchase Price set forth in Section 1.2.
1.2 Purchase Price. The purchase price (the "Purchase Price") for the Shares
will be equal to the total capitalization of NEWCO as of the Closing. Such
amount shall be the sum of: (i) an amount equal to the net book value of the
Real Property and the Personal Property (other than the Spare Parts) as of the
Closing Date, calculated in accordance with generally accepted accounting
principles (GAAP) (as shown on NEWCO's books and records); (ii) an amount equal
to Apple's original purchase cost of the Spare Parts (for purposes of this
Agreement, the parties estimate that the portion of the total Purchase Price
allocated to such Spare Parts shall be Five Hundred Thousand Dollars ($500,000),
but the final amount with respect thereto shall be determined by the parties
prior to the expiration of the Due Diligence Period); and (iii) One Hundred
Sixty Million Dollars ($160,000,000). At the Closing, the parties shall
execute an amendment to this Agreement setting forth the final amount of the
total Purchase Price. The entire Purchase Price shall be paid, in cash or other
immediately available funds, at the Closing.
1.3 Closing. Consummation of the Transaction (the "Closing") shall take place at
the offices of the Person mutually agreed upon by SCI and Apple to act as the
escrow agent for the Closing (the "Escrow Agent"), at 10:00 o'clock A.M. (local
Colorado time) on May 31, 1996, or on such other date as the parties hereto
agree. The date on which the Closing shall occur is referred to herein as the
"Closing Date". All deliveries provided for herein from one party to the other
shall be made to the Escrow Agent, unless both parties expressly agree
otherwise, in writing.
1.4 Closing Obligations.
A. At the Closing, but prior to delivering the Shares to SCI
pursuant to Section 1.4.B, Apple will deliver to NEWCO:
(i) A duly executed Bill of Sale and Assignment and Assumption
Agreement in substantially the form of Exhibit G and Exhibit H, respectively,
attached hereto;
(ii) A warranty deed in form sufficient to transfer title to the Real
Property from Apple to NEWCO (the "Deed");
(iii) All such other assignments and other instruments as are
reasonably necessary to vest in NEWCO good, valid and marketable title to
the Assets; and
(iv) All other previously undelivered documents required to be
delivered by Apple to NEWCO at or prior to the Closing in connection with the
Transaction, all as provided herein.
B. At the Closing, but subsequent to transferring the Assets to
NEWCO pursuant to Section 1.4.A, Apple will deliver to SCI:
(i) Certificates representing the Shares, duly endorsed (or
accompanied by duly executed stock powers), with signatures guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange, for transfer
to SCI;
(ii) All other previously undelivered documents required to be
delivered by Apple to SCI at or prior to the Closing in connection with the
Transaction, all as provided herein; and
(iii) A certificate executed by Apple, representing and warranting to
SCI that each of Apple's representations and warranties in this Agreement was
accurate in all respects as of the Effective Date and is accurate in all
respects as of the Closing Date as if made on the Closing Date (giving full
effect to any supplements to or amendments of this Agreement or any of the
exhibits attached hereto, in accordance with the provisions of Section 9.4,
below).
C. At the Closing, but subsequent to Apple transferring the Assets
to NEWCO pursuant to Section 1.4.A, SCI will deliver to Apple:
(i) The Purchase Price, in cash or immediately available funds;
(ii) All other previously undelivered documents required to be
delivered by SCI to Apple at or prior to the Closing in connection with the
Transaction, all as provided herein; and
(iii) A certificate executed by SCI, representing and warranting to
Apple that each of SCI's representations and warranties in this Agreement was
accurate in all respects as of the Effective Date and is accurate in all
respects as of the Closing Date as if made on the Closing Date (giving full
effect to any supplements to or amendments of this Agreement or any of the
exhibits attached hereto, in accordance with the provisions of Section 9.4,
below).
1.5 Costs and Fees of Escrow. SCI shall pay the premium for or cost of any
endorsement desired by SCI to any Title Insurance (as defined in Section 5.9)
which may be issued in connection with the Transaction, the cost of any new or
updated survey of the Real Property which SCI may elect to obtain or request
NEWCO to obtain, all recording costs and all documentary stamp taxes in
connection with the transfer of the Assets to NEWCO, an amount equal to
sixty-three percent (63%) of all state and local sales and transfer taxes, if
any, with respect to the Personal Property arising from the Transaction,
including without limitation any such taxes arising from the transfer of the
Assets to NEWCO, and one-half of the Escrow Agent's fee, and all other customary
and usual buyer's closing costs and escrow charges applicable to the
Transaction. Apple shall pay the premium for a standard owner's policy of title
insurance for the Real Property, one-half of the Escrow Agent's fee, an amount
equal to thirty-seven percent (37%) of all state and local sales and transfer
taxes, if any, with respect to the Personal Property arising from the
Transaction, including without limitation any such taxes arising from the
transfer of the Assets to NEWCO, and all other customary and usual seller's
closing costs and escrow charges applicable to the Transaction. Real estate and
personal property taxes and assessments shall be prorated using the most recent
levy and assessments allocable to the Real Property as of the date the Deed is
recorded.
2. TRANSFER OF ASSETS; ASSUMPTION OF LIABILITIES
2.1 Assets to be Transferred to NEWCO.; Subject to and in accordance with the
terms and conditions hereof, at the Closing, Apple will assign, transfer, convey
and deliver to NEWCO, all of Apple's right, title and interest in the following:
A. The real property commonly known as 702 Bandley Drive, Fountain,
Colorado, as more particularly described in Exhibit A attached hereto, together
with all improvements on the real property (collectively the "Real Property" or
the "Site"), and all appurtenant rights thereto, including without limitation
easements, rights of way, licenses and other interests therein; and
B. All personal property (including manufacturing and operating equipment,
and certain spare parts relating thereto [the "Spare Parts"]) owned by Apple and
used by Apple in its operation of the Fountain Facility, to the extent set forth
on Exhibit B attached hereto, including machinery, equipment, computers, tools,
vehicles, furniture, all relevant data, files, books and records at the Fountain
Facility regarding the Assets, and office supplies and office equipment
(collectively, the "Personal Property"). During the Due Diligence Period, SCI
and Apple shall identify with specificity those Spare Parts currently located at
the Fountain Facility which shall be transferred to NEWCO pursuant to this
Agreement, and Exhibit B shall be amended, at or prior to the Closing, to
accurately reflect such items; and
C. Certain inventories of materials and components currently at the Site
and owned by Apple, and used in connection with Apple's ownership and operation
of the Assets, which inventory shall be identified by the parties prior to the
expiration of the Due Diligence Period, and shall be set forth in Exhibit C
attached hereto (the "Initial Inventory").
D. The Real Property, the Personal Property (including the Spare
Parts) and the Initial Inventory are sometimes referred to collectively
herein as the "Assets".
E. As part of the Transaction, Apple shall assign to NEWCO, and NEWCO
shall assume, all authorizations, consents, approvals, licenses, orders,
permits, exemptions of or filings or registrations with any court or
governmental or administrative authority which relate solely to Apple's
ownership and operation of the Assets, to the extent such Assigned Permits are
assignable or transferable, and to the extent not encompassed within or
addressed by any of the Related Agreements, all as more particularly set forth
in Exhibit D attached hereto (collectively, the "Assigned Permits").
F. As part of the Transaction, Apple shall assign to NEWCO, and NEWCO
shall assume, certain agreements and contracts relating to the operation of the
Site, including leases to which Apple is a party and relating solely to the
Assets, which are set forth in Exhibit E attached hereto, and which SCI shall
agree, by written notice to Apple prior to the Due Diligence Completion Date, to
have NEWCO assume (collectively, the "Assigned Contracts"). To the extent any
consents or approvals by, of or from the other parties to said Assigned
Contracts are necessary with respect to such assignment and assumption, Apple
shall use commercially reasonable efforts to secure such consents or approvals.
If such consents or approvals are not secured by the Closing Date, SCI may elect
to have NEWCO assume any contract for which the required third party consent has
not been obtained, or may elect not to have NEWCO assume any such contract, and
in any case SCI shall advise Apple, in writing, of its election with respect to
any such contract not later than the Closing.
2.2 Assignment and Assumption of Liabilities. As of the Closing Date, Apple
shall assign to NEWCO, and NEWCO shall assume and agree to pay, the following
liabilities and obligations, known and unknown, liquidated and unliquidated,
contingent or fixed, rights and causes of action with respect to the Assets, the
Assigned Permits and the Assigned Contracts (collectively, the "Assumed
Liabilities"): (i) all of Apple's obligations arising on and after the Closing
under the Assigned Contracts, and (ii) all of Apple's obligations arising on and
after the Closing under the Assigned Permits; provided, however, that NEWCO
shall have no liability or obligation to perform under any Assigned Contracts
and Assigned Permits unless and until Apple's rights thereunder have been
effectively assigned to NEWCO.
2.3 Sale of Assets "AS IS". Except as expressly set forth in this Agreement,
Apple shall transfer the Assets to NEWCO in their "AS IS, WHERE IS" condition as
of the Effective Date, and solely in reliance on SCI's inspection and
examination of the Assets prior to the Closing Date. Neither Apple, nor any of
Apple's agents, representatives or employees, have made any representations or
warranties, direct or implied, verbal or written, with respect to the Assets, or
their merchantability, or the fitness thereof for any particular purpose, except
as expressly set forth in this Agreement and the instruments of conveyance
delivered at the Closing, and Apple shall not be obligated to SCI or to NEWCO in
connection with any defect, whether patent or latent, with respect to the same,
except as provided in this Agreement and such instruments.
2.4 Risk of Loss. Risk of physical loss to the Assets shall be borne by Apple
prior to the Closing, and by NEWCO on and after the Closing. If, prior to the
Closing, the Assets or any material portion thereof are damaged by flood, fire,
earthquake or other casualty, or any governmental or quasi-governmental entity
commences any legal action or eminent domain proceeding to take any portion of
the Assets, then Apple shall give prompt notice thereof to SCI and SCI shall
have the right to terminate this Agreement by written notice to Apple within
five (5) days after SCI's receipt or deemed receipt of such notice, in which
event this Agreement shall immediately terminate and the parties shall
thereafter have no further rights or obligations hereunder; provided, however,
that if SCI elects to go forward with the Transaction, all casualty insurance
proceeds relating solely to said casualty or loss with respect to any such
damage to any of the Assets, and/or all the proceeds of any such taking shall be
assigned to NEWCO at the Closing, to the extent that such proceeds would
otherwise be payable to Apple.
2.5 Excluded Assets.; The Assets which are the subject of this Agreement shall
not include the assets and/or property of Apple described in this Section 2.5,
none of which shall be transferred to NEWCO (collectively, the "Excluded
Assets"):
A. Inventories of raw materials, work-in-progress, and finished goods or
products (other than the Initial Inventory), located at the Site and used in
connection with Apple's business at the Site, all of which shall be governed by
the terms and conditions of the Manufacturing Agreement.
B. Apple's right, title and interest under such contracts, leases,
licenses and agreements which relate to Apple's operations at the Site, to the
extent not expressly assigned, transferred or sold to NEWCO pursuant to the
terms of this Agreement.
C. Information used by Apple to operate and conduct its business at the
Site with respect to the design, production and distribution of Apple Products,
including, without limitation, technical information, know-how, processes, and
procedures; and intellectual property rights of Apple and all Apple Affiliates,
of every nature and description, developed by Apple or such Apple Affiliates
prior to or after the Closing Date, including, without limitation, all
intellectual property rights developed or used at the Site in connection with
the design, development or manufacture of the Apple Products manufactured at the
Site, or used in connection with the activities described in and contemplated by
the Manufacturing Agreement. To the extent that any such information and
intellectual property is part of the Transaction, it shall be subject to the
terms and conditions of the Intellectual Property Agreement.
D. Cash, cash equivalents, certificates of deposit, bank accounts, prepaid
items, accounts or notes receivable, and unbilled accounts or notes arising from
work completed at the Site on or prior to the Closing Date.
E. Claims or rights against third parties relating to liabilities or
obligations which are not assumed by NEWCO hereunder.
2.6 Excluded Liabilities.
A. Except as specifically assumed by NEWCO pursuant to Section 1 and
Section 2, NEWCO shall not assume, perform, pay or discharge any liabilities,
obligations, payables or debts of Apple, whether known or unknown, accrued,
absolute, contingent or otherwise, and Apple shall be solely responsible for the
payment or discharge thereof.
B. Without limiting the generality of the foregoing paragraph, SCI
and NEWCO shall not assume any liabilities or obligations of Apple:
(i) for any Taxes except as otherwise expressly provided in this
Agreement;
(ii) for product liabilities, liabilities to customers, contractors
and purchasers for defects in products, worker's compensation, and automobile
and similar liabilities for personal injuries, in each case to the extent such
liability arises from an injury, event or occurrence prior to the Closing;
(iii) for any employee-related liability or obligation of
Apple, other than as expressly set forth in the Employee Agreement;
(iv) for obligations or transactions of any kind between Apple
and its shareholders, subsidiaries or affiliates; or
(v) for any accounts payable of Apple arising in connection with
Apple's business at the Fountain Facility occurring prior to the Closing, except
as expressly provided in the Manufacturing Agreement or any of the other Related
Agreements.
2.7 Prorations; Tax Elections.
A. Prorations at Closing. At the Closing, there shall be prorated between
Apple, on the one hand, and NEWCO, on the other hand, as of the Closing Date,
the following accrued or prepaid items relating to Apple's conduct of its
business at the Site: (i) ad valorem and similar taxes with respect to the
Assets; (ii) rents, royalties and other payments due under the Assigned
Contracts; (iii) charges for utilities serving the Real Property; (iv) deposits
with respect to the Assets; (v) interest charges relating to the Assumed
Liabilities; (vi) license fees relating to any of the Assets; (vii) fees under
any of the Assigned Permits; and (viii) governmental assessments and charges for
services to or with respect to any of the Assets. The Purchase Price to be paid
hereunder shall be appropriately decreased by the pro rata amount of any such
items which are accrued but unpaid as of the Closing Date, and shall be
appropriately increased by the pro rata amount of any such items which have been
prepaid by Apple as of the Closing Date.
B. 338(h)(10) Election. Apple and SCI will make an election under Section
338(h)(10) of the Internal Revenue Code of 1986, as amended (the "Code") (and
any corresponding elections under applicable state, local or foreign tax law)
(collectively, the "338(h)(10) Election") with respect to the purchase and sale
of the Shares under this Agreement. In connection with any such election, Apple
and SCI will jointly execute IRS Form 8023-A (Corporate Qualified Stock
Purchases) at the Closing. The parties will timely file the Form 8023-A with the
appropriate Internal Revenue Service ("IRS") Center, via certified mail, return
receipt requested to establish proof of filing of the form with the IRS. Apple
and SCI also agree to file any other forms or to take such other steps as may be
necessary to properly effect such election. Apple will pay any tax attributable
to any gain or loss incurred by Apple with regard to the making of the
338(h)(10) Election and will indemnify SCI and NEWCO against any liabilities
arising out of any failure by Apple to pay such taxes. In connection with such
338(h)(10) election, the Purchase Price shall be allocated by mutual agreement
of Apple and SCI, as set forth in Exhibit F attached hereto. Apple and SCI will
file all tax returns (including amended returns and any claims for refund) and
information reports in a manner consistent with such allocation.
2.8 No Breach By Reason of Sale.; It is the intention of the parties that this
Agreement shall not constitute an assignment or attempted assignment of any
lease, license, commitment or other contract or agreement to which either SCI or
Apple is a party, if any such assignment or attempted assignment would
constitute a breach or violation thereof; it being understood, however, that the
preceding does not relieve Apple from any liability to NEWCO or to SCI which
Apple would otherwise have hereunder by reason of a breach of Apple's
representations, warranties, covenants or conditions resulting from the failure
of Apple to transfer such lease, license, commitment, or other contract or
agreement to NEWCO.
2.9 Waiver of Bulk Sales Law Compliance.; Compliance with the bulk sales laws of
the State of Colorado, if any, and those of any other jurisdiction which may be
applicable to the Transaction, is hereby waived by SCI, and Apple hereby agrees
to defend, indemnify and hold NEWCO and SCI harmless from and against any claims
by any Person arising out of or due to the failure to comply with such bulk
sales laws, including without limitation any claims by any Person against all or
any part of the Assets.
2.10 Hart-Scott-Rodino Filing.; Promptly following execution of this Agreement
by the parties, SCI and Apple shall prepare such documentation as may be
necessary to make any required filing under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"). The parties shall
cooperate with respect to the filing, including without limitation providing
relevant data to the other as needed to complete said filing. SCI shall pay all
required fees with respect to such filing.
3. REPRESENTATIONS AND WARRANTIES OF APPLE.
Apple hereby represents and warrants to SCI and to NEWCO, as of the Effective
Date and as of the Closing Date, as follows:
3.1 Corporate Organization.; Apple is a corporation duly organized, validly
existing and in good standing under the laws of California, has full corporate
power and authority to carry on its business as it is now being conducted at the
Site and to own the Assets, and is duly qualified to do business in the State of
Colorado as a foreign corporation.
3.2 Authorization.; The execution and delivery of this Agreement, the Bill of
Sale, the Assignment and Assumption Agreement, the transfer of the Shares, and
all deeds, endorsements, assignments and other instruments to be executed and
delivered by Apple hereunder, and the consummation of the Transaction, have been
duly authorized by all necessary corporate action on the part of Apple. This
Agreement has been duly executed and delivered by Apple and, when duly and
validly executed by SCI, will constitute the valid and binding obligation of
Apple, enforceable against Apple in accordance with its terms, except as
enforceability may be limited by bankruptcy and other similar laws and general
principles of equity. The Deed, the Bill of Sale, the Assignment and Assumption
Agreement, and the deeds, endorsements, assignments and other instruments to be
executed and delivered to NEWCO by Apple at the Closing will be valid and
binding obligations of Apple, enforceable against Apple in accordance with their
terms, except as enforceability may be limited by bankruptcy and similar laws
and general principles of equity, and will effectively convey to and vest in
NEWCO good and marketable title to the Assets, subject only to the conditions
set forth therein and to the Permitted Liens (as defined in Section 3.5). The
transfer of the certificates representing the Shares, and all endorsements
and stock powers executed in connection therewith, and all other documents,
instruments and certificates to be executed and delivered to SCI by Apple at the
Closing will be valid and binding obligations of Apple, enforceable against
Apple in accordance with their terms, except as enforceability may be limited by
bankruptcy and similar laws and general principles of equity, and will
effectively convey to and vest in SCI good and marketable title to the Shares.
3.3 No Violation. The execution and delivery of this Agreement by Apple and the
performance of this Agreement by Apple will not (i) conflict with or violate the
Articles of Incorporation or Bylaws of Apple, (ii) subject to the obtaining of
all required consents from governmental entities having jurisdiction or other
third parties, as provided in this Agreement, conflict with or violate any law,
rule, regulation, order, judgment or decree applicable to Apple or by which any
of its property is bound or affected, or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or impair Apple's rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of any lien or encumbrance on any of the Assets or the Shares pursuant
to, any material note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which Apple is a
party or by which Apple is bound or affected, except, with respect to clauses
(ii) and (iii), for any such conflicts, violations, defaults or other
occurrences that would not have a Material Adverse Effect on Apple.
3.4 Consents. Except for governmental consents required under the HSR Act, which
will be requested as provided in Section 2.10 of this Agreement, and as may be
required under the Assigned Contracts and the Assigned Permits, no consent of
any Person (other than those previously obtained) is necessary to the
consummation of the Transaction, including, without limitation, consents from
parties to loans, contracts, leases or other agreements and consents from
governmental agencies, whether federal, state, or local or foreign.
3.5 Title to Assets; Encumbrances.
A. Apple has good and marketable title to the Personal Property and the
Initial Inventory, and good, marketable fee simple title to the Real Property,
subject only to the Permitted Liens. The Assets are free and clear of all liens
(including liens for Taxes as defined below), claims, charges, security
interests or other encumbrances of any nature whatsoever including, without
limitation, leases, chattel mortgages, conditional sales contracts, collateral
security arrangements and other title or interest retention arrangements
(collectively, "Liens"), except for the following, all of which shall be deemed
"Permitted Liens": (i) minor imperfections of title, exceptions, variances,
reservations or limitations (if any), (ii) Liens for current taxes, assessments
and like impositions not yet delinquent, (iii) zoning code and building code
provisions applicable to the Real Property, (iv) rights reserved to any
governmental authority to regulate any of the Assets, and (v) inchoate
materialmen's, mechanic's and workmen's liens or other like liens arising in the
ordinary course of business; none of which materially detract from the value or
impair the use of the property subject thereto as currently used, or materially
impair the current operations of the Site.
B. With respect to the Real Property, Apple warrants and represents
as follows:
(i) No options have been granted to others to purchase, lease or
otherwise acquire any interest in the Real Property, or any part thereof. Apple
has the exclusive right of possession of each tract comprising the Real
Property, subject only to matters of record (including easements, rights of way
and other similar matters of record).
(ii) Neither Apple nor any other Person has caused any work or
improvements to be performed upon or made to the Real Property for which there
remains outstanding any payment obligation that would or might serve as the
basis for any claim, lien, charge or encumbrance in favor of the Person which
performed the work, other than Permitted Liens.
(iii) All requisite certificates of occupancy and other permits or
approvals required with respect to the improvements on any of the Real Property
and the occupancy and use thereof have been obtained and are currently in
effect.
(iv) Except as disclosed to SCI, Apple has received no notification
that it is in violation of any applicable building, zoning, anti-pollution,
health or other law, ordinance or regulation in respect of the Assets or in
respect of Apple's operations at the Site, and no facts have come to the
attention of Apple to cause it to believe any such violation exists.
(v) Neither the whole nor any portion of the Real Property is subject
to any governmental decree or order to be sold or is being condemned,
expropriated or otherwise taken by any public authority with or without payment
of compensation therefor, nor to Apple's best knowledge has any such
condemnation, expropriation or taking been proposed.
3.6 Condition of Assets. The Personal Property has no material defects and is in
good operating condition and repair, normal wear and tear excepted, and is
adequate for the uses to which it is being put; and that portion of the Personal
Property identified in Exhibit B as equipment used in the manufacture and
assembly of Apple Products has been regularly maintained in the ordinary course
of business.
3.7 Assigned Permits. To the best of Apple's knowledge, the Assigned
Permits constitute all permits needed to operate the Assets at the Fountain
Facility.
3.8 Taxes.
A. "Taxes" shall mean all taxes, charges, fees, levies, imposts or other
assessments, including, without limitation, income, gross receipts, excise, use,
transfer, property, sales, license, payroll, withholding and franchise taxes,
imposed by the United States, or any state, local or foreign government or
subdivision or agency thereof, whether computed on a unitary, combined or any
other basis, and also including any interest and penalties or additions to tax.
B. As of the date hereof, there are no Liens with respect to Taxes (other
than Permitted Liens for Taxes not yet delinquent) in connection with the
Assets. Apple has reserved for or paid, withheld, collected, and paid over to
the proper governmental authorities all Taxes which are required to be paid,
withheld, collected, or paid to and including the Closing Date with respect to
the Assets and its operations at the Site (other than Taxes which are being
contested by Apple in good faith), and Apple shall pay all Taxes due and payable
to and including the Closing Date, to the extent that such amounts are not
prorated at the Closing and the payment obligation therefor would thereafter
rest with NEWCO.
C. For all periods to and including the Closing (whether such periods are
reflected in a return or report ending on or before the Closing, or after the
Closing), NEWCO has timely filed or will have filed, all Federal, foreign,
state, county, local and/or other taxing authority tax returns, reports, or
other required filings with respect to any Taxes, and has paid or will pay such
Taxes with respect to such returns, reports or required filings for all such
periods as such Taxes become due.
D. Apple agrees that it shall indemnify and hold SCI and NEWCO harmless of
and from any loss, liability or expense actually incurred by SCI or NEWCO as a
result of all tax liability for which NEWCO may be liable as a member of an
affiliated, consolidated, unitary or combined group (as defined in Section 1502
of the Code, or any comparable state or local statute, rule or regulation) which
includes Apple or any Apple Affiliates.
3.9 Contracts. The list of contracts and agreements set forth in Exhibit E
attached hereto is a true, complete and correct list of all agreements,
contracts and commitments necessary to operate the Assets, and to Apple's best
knowledge there are no material defaults by any party thereunder nor have any
amendments, oral or written, to any such Assigned Contracts been made or entered
into by Apple except as set forth in said Exhibit E.
3.10 Assumed Liabilities. Apple has disclosed to SCI all known liabilities
of Apple under and pursuant to the Assigned Contracts and the Assigned
Permits, and with respect to the Assets.
3.11 Litigation. There are no actions, suits, inquiries, proceedings or
investigations by or before any court or governmental or other regulatory or
administrative agency or commission (collectively, "Proceedings") pending or, to
Apple's best knowledge, threatened against or involving Apple (other than solely
as plaintiff initiated by Apple in the ordinary course of collecting
receivables) relating to the Assets. There is no Proceeding known to Apple to be
pending or threatened which questions or challenges the validity of this
Agreement or any action taken or to be taken by Apple pursuant to this Agreement
or in connection with the Transaction; nor to Apple's best knowledge is there
any valid basis for any such Proceeding with respect to Apple. Apple is not in
default under or in violation of, nor to Apple's best knowledge is there any
valid basis for any claim of default under or violation of, any of the Assigned
Contracts, which default or violation would have a Material Adverse Effect on
NEWCO's ownership and operation of the Assets, or on SCI's ownership of NEWCO.
3.12 Compliance with Law. Except for insubstantial violations which would have
no Material Adverse Effect, Apple's operations at the Site have been conducted
in accordance with all applicable laws, regulations and other requirements of
all national governmental authorities, and of all states, municipalities and
other political subdivisions and agencies having jurisdiction over Apple's
operations at the Site, including, without limitation, all such laws,
regulations and requirements relating to antitrust, consumer protection,
currency exchange, equal opportunity, health, occupational safety, pension, and
securities. Apple has not received any notification of any asserted present or
past failure by Apple to comply with such laws, rules or regulations.
3.13 Environmental Protection. To Apple's best knowledge, during Apple's
ownership and operation of the Fountain Facility, Apple has had all permits,
licenses and other authorizations which are required in connection with its
operations at the Fountain Facility under and pursuant to applicable Federal,
state and local laws, rules, regulations, codes, orders, decrees, judgments or
injunctions relating to pollution or protection of the environment, including
without limitation laws relating to torts and laws relating to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals or any other industrial, hazardous or toxic substances, materials or
wastes (collectively, "Hazardous Materials") into the environment (including,
without limitation, ambient air, surface water, ground water, or land), or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, handling of, or exposure to, Hazardous Materials
(collectively, "Environmental Laws") at the Fountain Facility. Except as may
have been disclosed to SCI in any documentation delivered by Apple to SCI prior
to the Effective Date, Apple is, and has been during its operations at the
Fountain Facility, in compliance with all terms and conditions of such required
permits, licenses and authorizations, and, to the best of Apple's knowledge,
nothing has occurred while Apple has owned the Fountain Facility which would
cause Apple to fail to be in compliance with said Environmental Laws with
respect to its operations at the Fountain Facility. Except as may have been
disclosed to SCI in any documentation delivered by Apple to SCI prior to the
Effective Date, Apple is not aware of, nor has Apple received notice of, any
past, present or future events, conditions, circumstances, activities,
practices, incidents, actions or plans which may interfere with or prevent
continued compliance with said Environmental Laws, or which may give rise to any
common law or legal liability, or may otherwise form the basis of any claim,
action, demand, suit, proceeding or hearing, based on or related to Apple's
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, handling, exposure to, emission, discharge, release or threatened
release into the environment, of any Hazardous Materials at the Fountain
Facility. There is no civil, criminal or administrative action, suit, demand,
claim, hearing, notice or demand letter, notice of violation, investigation, or
proceeding pending or, to Apple's best knowledge, threatened, against Apple
relating in any way to said Environmental Laws with respect to Apple's use and
operation of the Fountain Facility.
3.14 Occupational Safety and Health. Except as set forth in Exhibit I attached
hereto, to Apple's best knowledge, Apple is, in all material respects, in
compliance with all standards, duties, requirements, responsibilities, rules,
regulations and orders (hereinafter "safety and health obligations") currently
promulgated under, or issued pursuant to or in enforcement of the Occupational
Safety and Health Act of 1970, or any laws, plans, or safety and health
obligations currently established by any state or political subdivision thereof
or by common law, applicable to Apple's operations at the Site, with respect to
occupational safety and health. Except as set forth in said Exhibit I, Apple is
not aware of, nor has Apple received notice of, any past, present or future
events, conditions, circumstances, activities, practices, incidents, actions or
plans relating to its operations at the Site which prevent compliance or
continued compliance with the aforesaid laws, plans or safety and health
obligations as they exist on the date hereof or any orders, decrees, judgments,
or injunctions, which have been issued, entered, promulgated or approved
thereunder, or which may give rise to any common law or legal liability, or
otherwise form the basis of any claim, action, demand, suit, proceeding or
hearing, based on Apple's violation of any of the aforesaid laws, plans, or
safety and health obligations to employees or others and on its duty to maintain
a workplace free of safety and health hazards. Except as set forth in said
Exhibit I, there is no civil, criminal or administrative action, suit, demand,
claim, hearing, citation, employee or other complaint, notice of violation,
investigation, or proceeding pending or to Apple's best knowledge threatened
against Apple relating in any way to the aforesaid laws, plans, or safety and
health obligations established by the Federal government or any state or
political subdivision thereof, or by common law, or any orders, decrees,
judgments or injunctions issued, entered, promulgated or approved thereunder
with respect to Apple's operations at the Site.
3.15 Financial and Cost Data. All financial and cost data relating to
Apple's ownership and operation of the Assets disclosed to SCI by Apple is
accurate and complete in all material respects.
3.16 Representations and Warranties With Respect to NEWCO.
A. Organization of NEWCO. NEWCO will be formed by Apple, on or before the
Closing Date, solely for the purpose of engaging in the Transaction. From the
date of its incorporation and at all times through and until the Closing, NEWCO
will be a corporation duly organized, validly existing and in good standing
under the laws of the state of its incorporation, have full corporate power and
authority to carry on its business, and (if not incorporated in Colorado) be
duly qualified in the State of Colorado as a foreign corporation.
B. Capitalization. From the date of the incorporation of NEWCO and
at all times through and including the Closing:
(i) Apple will be the record and beneficial owner and holder of the
Shares, free and clear of any encumbrances or restrictions of any nature,
including, without limitation, any liens, judgments, security interests,
equities, claims and demands.
(ii) Apple will not be a party to any option, warrant, purchase
right, or other contract or commitment that could require Apple to sell,
transfer, or otherwise dispose of the Shares (other than this Agreement).
(iii) Apple will not be a party to any voting trust, proxy, or other
agreement or understanding with respect to the voting of the Shares.
(iv) No legend or other reference to any purported encumbrance will
appear upon any certificate representing the Shares.
(v) All of the Shares will be duly authorized, validly issued, fully
paid and nonassessable.
(vi) NEWCO will not be a party to or be bound by any outstanding or
authorized options, warrants, calls, rights, commitments or any other agreements
of any character requiring NEWCO to issue, transfer, sell, purchase, redeem or
acquire any shares of capital stock or any other equity or debt securities or
any securities or rights convertible into, exchangeable for, or evidencing the
right to subscribe for or acquire, any shares of capital stock or any other
equity or debt securities of NEWCO.
C. Authorization. At the Closing, NEWCO will have full corporate
power and authority to execute and deliver any and all agreements
contemplated under this Agreement, including, without limitation, the Bill
of Sale and the Assignment and Assumption Agreement.
D. No Violation. As of the Closing, NEWCO's execution and delivery of the
Closing documents to which it is a party, and its performance of and under any
of the Assigned Contracts or the Assigned Permits, will not (i) conflict with or
violate the Articles of Incorporation or Bylaws of NEWCO, (ii) subject to the
obtaining of all required consents from governmental entities having
jurisdiction, as provided in this Agreement, conflict with or violate any law,
rule, regulation, order, judgment or decree applicable to NEWCO, or (iii) result
in any breach of or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, or impair NEWCO's rights or alter
the rights or obligations of any third party under, or give to others any right
of termination or amendment, acceleration or cancellation of, or result in the
creation of any lien or encumbrance (other than Permitted Liens) on any of the
Assets pursuant to, any material note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligations
to which Apple or NEWCO is a party or by which Apple or NEWCO is bound or
affected, except, with respect to clauses (ii) and (iii), for any such
conflicts, violations, defaults or other occurrences that would not have a
Material Adverse Effect on Apple or NEWCO, or affect the transfer of the Assets
and the sale of the Shares as provided herein.
E. Assets and Liabilities. From the date of the incorporation of
NEWCO and at all times to and until the Closing,
(i) Except for obligations or liabilities incurred in connection with
its incorporation or organization and the Transaction, NEWCO will not have
incurred, directly or indirectly through any affiliate, any obligations or
liabilities or engaged in any business or activities of any type or kind
whatsoever or entered into any arrangements with any person or entity;
(ii) NEWCO will not own, or have any contract to acquire, any equity
securities or other securities of any entity or any direct or indirect equity or
ownership interest in any business (other than the Assets);
(iii) NEWCO will have no assets or liabilities other than the
Assets and the Assumed Liabilities.
3.17 Operation of Fountain Facility Prior to Closing. As of the Closing Date,
the Fountain Facility (including the Assets) shall have been operated by Apple
in accordance with the provisions of Section 7.
4. REPRESENTATIONS AND WARRANTIES OF SCI.
SCI hereby represents and warrants to Apple, as of the Effective Date and as of
the Closing Date, as follows:
4.1 Corporate Organization. SCI is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and has
full corporate power and authority to carry on its business as it is now being
conducted.
4.2 Authorization.; SCI has full corporate power and authority to enter into
this Agreement and to carry out the Transaction. The execution and delivery of
this Agreement and the consummation of the Transaction has been duly authorized
by all necessary corporate action on the part of SCI. This Agreement, and all
other documents, instruments and certifications to be executed and delivered by
SCI hereunder, have been duly executed and delivered by SCI and, when duly and
validly executed by Apple (to the extent necessary), will constitute the valid
and binding obligation of SCI, enforceable against SCI in accordance with their
terms, except as enforceability may be limited by bankruptcy and other similar
laws and general principles of equity.
4.3 No Violation. The execution and delivery of this Agreement by SCI and the
performance of this Agreement by SCI will not (i) conflict with or violate the
Articles of Incorporation or Bylaws of SCI, (ii) subject to the obtaining of all
required consents from governmental entities having jurisdiction, as provided in
this Agreement, conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to SCI or by which any of its property is bound or
affected, or (iii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or
impair SCI's rights or alter the rights or obligations of any third party under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of any lien or encumbrance on any of
the Assets pursuant to, any material note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which SCI is a party or by which SCI is bound or affected, except, with
respect to clauses (ii) and (iii), for any such conflicts, violations, defaults
or other occurrences that would not have a Material Adverse Effect on SCI.
4.4 Consents. Except for governmental consents required under the HSR Act, which
will be requested as provided in Section 2.10 of this Agreement, and as may be
required under the Assigned Contracts and the Assigned Permits, no consent of
any Person (other than those previously obtained) is necessary to the
consummation of the Transaction, including, without limitation, consents from
parties to loans, contracts, leases or other agreements and consents from
governmental agencies, whether federal, state, or local or foreign.
4.5 Adequate Financing. SCI has adequate financial resources to pay the Purchase
Price, in full, at the Closing, as required by Section 1.2 of this Agreement,
and all other costs to be paid by SCI as provided in Section 1.5, without
placing a lien or encumbrance on the Assets such that the foreclosure of said
lien or encumbrance could have a Material Adverse Effect on the performance
under the Manufacturing Agreement or any of the Related Agreements by SCI or
NEWCO, as the case may be.
5. CONDITIONS TO THE OBLIGATIONS OF SCI.
The obligations of SCI under this Agreement are subject to the satisfaction on
or before the Closing Date of the following conditions, any of which may be
waived by SCI in writing:
5.1 Inspection of Assets; Completion of Due Diligence.
A. SCI shall have the right, at all times between the Effective Date of
this Agreement and 12:00 o'clock midnight on May 24, 1996 (the "Due Diligence
Completion Date"), which period is referred to herein as the "Due Diligence
Period", within which to make or obtain any investigations, tests, examinations,
reports, approvals or arrangements which SCI may desire with regard to the
Assets (herein, the "Due Diligence"), including without limitation: the physical
condition of the Assets, the presence of Hazardous Materials on or about the
Real Property, all documents and other matters described in any title report
which SCI may obtain with respect to the Real Property, the zoning and other
governmental or quasi-governmental approvals or consents relating to the Assets,
and the like. SCI agrees to indemnify, defend and hold Apple and the Assets
harmless of and from any claim, liability or expense (including reasonable
attorneys' fees and costs) arising out of or in connection with any damage or
destruction of any property and/or injury or death to any person in connection
with SCI's performance or conduct of the Due Diligence, including without
limitation SCI's entry, or the entry of its employees, agents, contractors,
consultants and experts, upon the Site for the purpose of performing or
conducting the Due Diligence, and SCI further agrees to keep the Assets free and
clear of all liens, claims and encumbrances of any kind arising from or in
regard to the Due Diligence. During the Due Diligence Period, upon reasonable
prior notice to Apple's designated representative at the Site, Apple shall
permit SCI and its representatives access to the Site for the purpose of
performing or conducting the Due Diligence, provided that: (i) at all times SCI
and its representatives shall, if Apple so requests or requires, be escorted by
an Apple representative, and (ii) except as provided in Section 5.1.B, below,
SCI shall not extract or sample any portion of the Real Property or the ground
water thereunder for the purpose of testing or evaluation, nor drill any hole,
dig any well, or perform any borings on or about the Real Property
(collectively, "Sampling").
B. During the Due Diligence Period, SCI, at its sole expense, shall have
the right, in order to complete its Due Diligence, and in order to determine
whether Hazardous Materials are present on the Real Property, to extract and
sample portions of the Real Property and the ground water thereunder, and to
otherwise perform investigations, historical analyses, and make inquiries
relative to the presence or potential presence of Hazardous Materials on the
Real Property, and shall have the right to drill holes, dig wells, and perform
borings, provided that such entry onto the Real Property shall comply with the
terms and provisions of Section 5.1.A, above, and further provided that:
(i) Apple shall have the right to approve, in its reasonable
discretion, all engineers, consultants, companies, laboratories, drillers and
other persons proposed by SCI to perform any of the Due Diligence, prior to
their entry onto the Site, and SCI shall not allow any such persons onto the
Site prior to advising Apple and giving Apple an opportunity to approve all such
persons, with such approval being deemed given if Apple does not advise SCI,
within three (3) business days after being advised of SCI's selection of any
third party, of Apple's disapproval of the designated third party;
(ii) SCI shall obtain Apple's prior written consent (which consent
shall not be unreasonably withheld or delayed) to the sampling plan, testing
methods and other material elements of the sampling or testing proposed by SCI;
(iii) SCI shall, at its sole expense, seal and cap any holes, wells,
or other borings made by it, and shall restore the Site to its condition
existing prior to any such sampling or testing by SCI;
(iv) SCI shall conduct all sampling or testing, and all closure work
with respect to such sampling or testing, in accordance with all Federal, state
and local rules, regulations, laws and statutes applicable thereto;
(v) SCI shall bear all costs of any sampling or testing, and any
closure work in connection therewith; and
(vi) SCI shall hold and maintain all reports, results and other
information concerning any testing or sampling, and the Assets, in the strictest
confidence, and shall promptly deliver true, complete and correct copies thereof
to Apple, upon SCI's receipt of the same.
C. Prior to the expiration of the Due Diligence Period, Apple shall
have completed and delivered to SCI an environmental questionnaire in a
form reasonably acceptable to the parties.
D. Prior to the expiration of the Due Diligence Period, SCI shall have
received all documents and information reasonably requested by it as part of the
Due Diligence, and shall have approved the condition of the Assets, and
otherwise be satisfied with the results of its Due Diligence.
5.2 Representations and Warranties True. The representations and warranties of
Apple contained in Section 3, as such section may be amended by the parties
prior to the expiration of the Due Diligence Period, and in all certificates and
other documents delivered and to be delivered by Apple to SCI and NEWCO pursuant
to the terms of this Agreement or in connection with the Transaction shall be
true, complete and accurate in all material respects as of the date when made
and at and as of the Closing Date as though such representations and warranties
were made at and as of such date.
5.3 Performance. Apple shall have performed and complied in all material
respects with all agreements, obligations and conditions required by this
Agreement to be performed or complied with by Apple on or prior to the Closing.
5.4 Certificate of Apple. Apple shall have delivered to SCI a certificate, dated
as of the Closing Date, certifying in such detail as SCI may reasonably request,
as to the fulfillment and satisfaction of the conditions set forth in Sections
5.2 and 5.3, above.
5.5 Resolutions.
A. Apple shall have delivered to SCI duly adopted resolutions of the Board
of Directors of Apple, certified by the Secretary or an Assistant Secretary of
Apple as of the Closing Date, authorizing and approving the execution and
delivery of this Agreement by Apple, and all other action necessary to enable
Apple to perform under this Agreement.
B. Apple shall have delivered to SCI duly adopted resolutions of the Board
of Directors of NEWCO, certified by the Secretary or an Assistant Secretary of
NEWCO as of the Closing Date, authorizing and approving NEWCO's performance
under this Agreement.
5.6 Opinion of Counsel. SCI shall have received an opinion from counsel for
Apple, in form and substance reasonably acceptable to SCI, with respect to the
matters set forth in Sections 3.1, 3.2 and 3.3 of this Agreement, as well as
with respect to the matters set forth in Sections 3.16.A, 3.16.B, 3.16.C, and
3.16.D.
5.7 No Injunction. On the Closing Date there shall be no effective injunction,
writ, preliminary restraining order or any order of any nature issued by a court
of competent jurisdiction or other governmental authority having jurisdiction,
directing that the Transaction not be consummated or imposing any conditions on
the consummation of the Transaction which SCI, in its sole discretion, deems
unacceptable.
5.8 SCI Board Approval; Consents Obtained. The Board of Directors of SCI shall
have approved the execution and delivery of this Agreement, and SCI shall have
obtained all other consents and approvals required to be obtained by it in order
to consummate the transactions contemplated by this Agreement, and any
applicable waiting period under the HSR Act shall have expired or been
terminated.
5.9 Title Insurance. NEWCO shall be able to obtain, at standard rates, from a
title insurance company satisfactory to SCI, a policy of title insurance, or an
unconditional undertaking to issue the same, dated as of the Closing Date, in
face amounts and in form reasonably satisfactory to SCI, insuring that fee
simple title to the Real Property is vested in NEWCO, subject only to exceptions
to title reasonably acceptable to SCI (the "Title Insurance"). In connection
therewith, Apple agrees that it shall, promptly following execution of this
Agreement, deliver to SCI true and correct copies of all surveys of the Real
Property in Apple's possession; and if Apple does not have such a survey for
either parcel constituting the Real Property, then Apple shall obtain such a
survey for SCI as promptly as possible upon SCI's request.
5.10 Execution of Related Agreements. The Related Agreements shall have been
fully negotiated and executed by the parties, and no bar shall exist to the
effectiveness of such agreements, including any default by either party
thereunder.
6. CONDITIONS TO OBLIGATIONS OF APPLE.
The obligations of Apple under this Agreement are subject to the satisfaction on
or before the Closing Date of the following conditions, any of which may be
waived by Apple:
6.1 Representations and Warranties True. The representations and warranties of
SCI contained in Section 4 and in all certificates and other documents delivered
and to be delivered by SCI to Apple pursuant to the terms of this Agreement or
in connection with the Transaction shall be true, complete and accurate in all
material respects as of the date when made and at and as of the Closing Date as
though such representations and warranties were made at and as of such date.
6.2 Performance. SCI shall have performed and complied in all material respects
with all agreements, obligations and conditions required by this Agreement to be
performed or complied with by it on or prior to the Closing.
6.3 Certificate of SCI. SCI shall have delivered to Apple a certificate, dated
as of the Closing Date, certifying in such detail as Apple may reasonably
request, as to the fulfillment and satisfaction of the conditions set forth in
Sections 6.1 and 6.2, above.
6.4 Resolutions. SCI shall have delivered to Apple duly adopted resolutions of
the Board of Directors of SCI, certified by the Secretary or an Assistant
Secretary of SCI as of the Closing Date, authorizing and approving the execution
and delivery of this Agreement by SCI, and all other action necessary to enable
SCI to perform under this Agreement.
6.5 Opinion of Counsel. Apple shall have received an opinion from counsel for
SCI, in form and substance reasonably acceptable to Apple, with respect to the
matters set forth in Sections 4.1, 4.2 and 4.3 of this Agreement.
6.6 No Injunction. On the Closing Date there shall be no effective injunction,
writ, preliminary restraining order or any order of any nature issued by a court
of competent jurisdiction or other governmental authority having jurisdiction,
directing that the Transaction not be consummated or imposing any conditions on
the consummation of the Transaction which Apple, in its sole discretion, deems
unacceptable.
6.7 Apple and NEWCO Board Approval; Consents Obtained. The Boards of Directors
of Apple and of NEWCO shall have approved the execution and delivery of this
Agreement, and Apple and/or NEWCO, as the case may be, shall have obtained all
other consents required to be obtained by either of them in order to consummate
the Transaction, and any applicable waiting period under the HSR Act shall have
expired or been terminated.
6.8 Execution of Related Agreements. The Related Agreements shall have been
fully negotiated and executed by both Apple and SCI, and no bar shall exist to
the effectiveness of such agreements, including any default by either party
thereunder.
7. CONDUCT OF APPLE'S BUSINESS AT THE SITE PENDING
THE CLOSING.
Between the signing of this Agreement and the Closing Date, except as otherwise
consented to by SCI in writing in advance, Apple agrees as follows.
7.1 Business in Ordinary Course. Apple's business at the Site shall be conducted
only in the ordinary course, consistent with Apple's past practice, which shall
not include the making of any commitment which extends beyond ninety (90) days
from the date hereof, the acquisition of capital assets in excess of Fifty
Thousand Dollars ($50,000) in the aggregate, or the removal of any Assets other
than in the ordinary course of business. Subject to the dollar limitations set
forth above in this Section 7.1, and provided that Apple shall not be obligated
or required to expend more than Five Thousand Dollars ($5,000) in repairing or
replacing any of the Assets, Apple will use commercially reasonable efforts to
maintain and keep the Assets in substantially as good condition and working
order as at the Effective Date hereof, except for depreciation through ordinary
wear and tear.
7.2 Sale or Pledge of Assets. Subject to Apple's rights under Section 7.1,
above, Apple shall not sell or lease any of the Assets or incur and allow to
continue to exist at the Closing Date any Liens on any of the Assets, except for
Permitted Liens, and those Liens which arise by operation of law, or are
incurred in the ordinary course in accordance with Section 7.1, or would not
cause the representations contained in Section 3, above, to be untrue were such
Liens to exist on the Closing Date.
7.3 Changes in Agreements. Apple shall not amend or modify in any material
respect, or consent to the early termination of, any of the Assigned Contracts.
7.4 Preservation of Business Organization. Consistent with the other provisions
of this Agreement, Apple shall use commercially reasonable efforts to preserve
the Assets and the business of Apple at the Site intact, and to keep available
to SCI and/or to NEWCO, as the case may be, the services of Apple's present
employees consistent with past practice, and to preserve the goodwill of Apple's
suppliers and others with respect to the Assigned Contracts.
7.5 Insurance. Apple shall keep all insurance currently in place with respect to
the Assets in full force and effect. All premiums due from Apple with respect to
such insurance have been paid, and Apple has not received any notice of
cancellation with respect thereto.
7.6 Compliance with Laws. Apple shall comply with all laws applicable to its
ownership and operation of the Assets, except for insubstantial violations which
would have no Material Adverse Effect.
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION.
8.1 Survival of Representations and Warranties. Each of the representations,
warranties, covenants and agreements of the parties contained in this Agreement
shall survive the Closing Date for a period of two (2) years from the Closing
Date; provided, however, that the warranties and representations set forth in
Section 3.13 shall survive for a period ten (10) years from the Closing Date;
and, provided further, that the warranties and representations set forth in
Section 3.8, the obligations of the parties with respect to the payment of any
state and local sales and transfer taxes with respect to the Personal Property
(as set forth in Section 1.5), and the obligations under Section 2.7.B shall
survive for a period of five (5) years from the Closing Date, or such later date
on which the statute of limitations for any Taxes covered thereby has expired.
None of the warranties and representations of Apple set forth in this Agreement
shall be deemed to merge into the Deed at the Closing.
8.2 Indemnification.
A. By Apple. Apple shall indemnify, defend, and hold harmless NEWCO, SCI
and their respective subsidiaries, affiliates, directors, officers, employees,
representatives and agents (collectively, the "Indemnified SCI Persons"), and
reimburse the Indemnified SCI Persons for, from, and against all demands,
claims, actions or causes of action, assessments, losses, damages, liabilities,
costs and expenses, including, without limitation, interest, penalties and
reasonable attorneys' fees, disbursements and expenses, imposed on or incurred
by the Indemnified SCI Persons, directly or indirectly, by reason of
(i) any breach by Apple of any of its representations and warranties
contained in this Agreement,
(ii) any failure by Apple to perform any covenant, undertaking or
obligation on its part hereunder,
(iii)all Liens referred to in Section 3.5 (including, without limitation,
Permitted Liens for Taxes not yet delinquent and Permitted Liens for Taxes
which are being contested by Apple in good faith),
(iv) the failure of Apple hereto to comply with the provisions of any applicable
bulk sales, fraudulent conveyance or other law for the protection of
creditors,
(v) any liability related to the Excluded Assets, and/or
(vi) any other liability of Apple other than the Assumed Liabilities.
B. By SCI. SCI shall indemnify, defend and hold harmless Apple and its
subsidiaries, affiliates, directors, officers, employees, representatives and
agents (collectively, the "Indemnified Apple Persons"), and reimburse the
Indemnified Apple Persons for, from, and against all demands, claims, actions or
causes of action, assessments, losses, damages, liabilities, costs and expenses,
including, without limitation, interest, penalties and reasonable attorneys'
fees, disbursements and expenses, imposed on or incurred by the Indemnified
Apple Persons, directly or indirectly, by reason of
(i) any breach by SCI of any of its representations and warranties
contained in this Agreement,
(ii) any failure by SCI to perform any covenant, undertaking or obligation
on its part hereunder, and/or
(iii)the failure of SCI hereto to comply with the provisions of any applicable
bulk sales, fraudulent conveyance or other law for the protection of
creditors.
C. If any action or claim shall be brought or asserted against an
indemnified party under this Section 8.2 or any successor thereto (the
"Indemnified Party") in respect of which indemnity may be sought from an
indemnifying party under this Section 8.2 (the "Indemnifying Party"), the
Indemnified Party shall immediately notify the Indemnifying Party who shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all expenses; except
that any delay or failure to so notify the Indemnifying Party shall only relieve
the Indemnifying Party of its obligations hereunder to the extent, if at all,
that the Indemnifying Party is prejudiced by reason of such delay or failure.
The Indemnified Party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be borne by the Indemnified Party unless (i) the employment
thereof shall have been specifically directed and required by the Indemnifying
Party or (ii) the Indemnifying Party shall have elected not to assume the
defense of such claim and employ counsel. Without the consent of the Indemnified
Party, the Indemnifying Party shall have no right to settle or compromise on any
non-monetary matter. 8.3 Limitation of Liability. The obligation of either party
(the "Indemnifying Party") hereunder to indemnify the other party (the
"Indemnified Party") against any damages or claims with respect to the matters
set forth in this Agreement shall be subject to all of the following
limitations:
A. No indemnification shall be required to be made by the Indemnifying
Party under this Section 8 or otherwise under this Agreement for any damages or
claims in an amount less than One Thousand Dollars ($1,000) for each such claim,
unless and until the aggregate of all such claims exceeds Twenty-Five Thousand
Dollars ($25,000).
B. The Indemnifying Party shall be obligated to indemnify the Indemnified
Party only for those damages and claims as to which the Indemnified Party has
given the Indemnifying Party written notice thereof on or prior to that date
which is five (5) years after the Closing Date (whether or not such damages or
claims have then actually been sustained or incurred); provided, however, that
with respect to any claims for indemnification under Section 3.13, the period
shall be ten (10) years after the Closing Date; and, provided, further, that
with respect to any claims for indemnification under Section 1.5, Section 2.7.B
and Section 3.8, the period shall be five (5) years or such later date on which
the statute of limitations for any Taxes covered thereby has expired. Any
written notice delivered by the Indemnified Party to the Indemnifying Party
pursuant to this Section 8.3.B shall set forth the basis of the claim for
damages (including, without limitation, reference to the specific warranty or
representation alleged to have been breached) and, if then determinable by the
Indemnified Party, a reasonable estimate of the amount thereof (or, if the
Indemnified Party's good faith opinion, no such reasonable estimate can then be
made, the maximum potential damages that in the Indemnified Party's good faith
opinion might be sustained in connection with such claim).
C. All damages shall be computed net of any actual income tax benefit
resulting therefrom to the Indemnified Party or any insurance coverage with
respect thereto which reduces or may reduce the damages that would otherwise be
sustained.
D. In no event shall the Indemnifying Party's aggregate obligation to
indemnify the Indemnified Party for damages exceed an amount equal to twenty
percent (20%) of that portion of the Purchase Price allocated to the Real
Property and the Personal Property (that is, net of the portion of the Purchase
Price allocated to the Initial Inventory); provided, however, that such
limitation shall not apply to any claims for indemnification with regard to any
party's obligations with respect to Taxes, as in Section 1.5, Section 2.7.B and
Section 3.8 of this Agreement.
E. Anything in this Agreement to the contrary notwithstanding, no
director, officer or employee of any party shall have any personal liability to
any other party as a result of such party's breach of any warranty or
representation hereunder.
9. CERTAIN OTHER COVENANTS AND AGREEMENTS.
9.1 Further Assurances.
A. Upon the request of any of NEWCO, SCI or Apple, any other party will
execute and deliver to the requesting party, or such party's nominee, all such
instruments and documents of further assurance or otherwise, and will do any and
all such acts and things, as may reasonably be required to carry out the
obligations of such party hereunder and to more effectively consummate the
Transaction, including obtaining all consents and approvals from foreign
governmental authorities and from third parties under leases and other
contracts, agreements or obligations with respect to the Assets.
B. After the Closing, NEWCO, SCI and Apple shall from time to time, at the
request of any other party, and without further cost or expense to the
requesting party, execute and deliver such other instruments of conveyance and
transfer and take such other actions as the requesting party may reasonably
require, in order to more effectively consummate the Transaction, including
without limitation any reasonably necessary or appropriate to vest in NEWCO good
and marketable title to the Assets to be transferred hereunder, and to effect
the assumption by NEWCO of the Assigned Contracts, and any reasonably necessary
or appropriate to transfer or assign to NEWCO any of the Assigned Permits, or to
vest in SCI title to the Shares.
9.2 Access and Inspection.
A. Prior to Closing. At all times after the execution of this Agreement
and up to and including the Closing Date, Apple shall give SCI, and its
authorized representatives, reasonable access, during normal business hours, to
the Assets, and Apple's employees, books, contracts, commitments and records as
they relate to the Assets, for the purpose of enabling SCI to make such
investigation of the Assets as SCI may desire, including, without limitation,
having surveys and tests made of the Real Property, all as more particularly set
forth in Section 5.1 above.
B. After the Closing. For a period of five (5) years following the
Closing, and upon reasonable request from Apple, SCI shall provide, and/or shall
cause NEWCO to provide, to the officers, agents, and employees of Apple,
reasonable access during normal business hours to the books and records of Apple
transferred to NEWCO hereunder (if any); provided, however, that with respect to
any such books and records applicable to the matters covered by Section 3.13,
SCI agrees that it shall retain or shall cause NEWCO to retain all such books
and records for a period of ten (10) years following the Closing Date. SCI
agrees not to destroy nor to permit NEWCO to destroy any such books or records
without prior written notice to Apple and a reasonable opportunity for Apple, at
Apple's expense, to take custody thereof. Any access and inspection rights of
Apple pursuant to this Section 9.2.B shall in no way be in derogation of or
supersede or be deemed to be in conflict with any rights Apple may have under
the Manufacturing Agreement or any of the other Related Agreements with respect
to access and inspection.
9.3 Notification of Certain Matters. Each party shall provide the other with
prompt notice of (i) any communication alleging that the consent of a Person is
or may be required in connection with the Transaction, (ii) any communication
from any governmental regulatory agency or authority in connection with the
Transaction, and (iii) any Proceeding commenced or threatened which would have
been required to be disclosed by either party in connection with such party's
warranties and representations as set forth in this Agreement.
9.4 Amendment of Agreement; Modification of Exhibits.
A. To the extent that any of the exhibits attached hereto are not
completely filled in at the time this Agreement is executed by the parties, such
exhibits shall be completed as promptly as possible thereafter, and in no event
any later than the Closing.
B. If either party discovers, at any time prior to the Closing Date, any
information which would make the warranties and representations of such party,
as set forth in this Agreement, untrue or incomplete to a material extent, or
make the exhibits as attached hereto incorrect or misleading in any material
manner, or which is needed to accurately reflect the rights and obligations of
either party under this Agreement, then such party shall promptly inform the
other party, and the relevant portion of this Agreement and/or the relevant
exhibit(s) shall be amended or modified as appropriate to incorporate such new
or additional information.
9.5 Confidentiality. All information disclosed by one party to the other in
connection with the Transaction, including all information generated by SCI
during the performance of its Due Diligence, shall be held by the receiving
party in strict confidence, and neither party shall reveal to any third party
any confidential information of the other party received by it in connection
with the Transaction, including without limitation all Apple Confidential
Information, as that term is defined in the Confidentiality Agreement. In
addition, if the Transaction is not consummated, then each party shall return to
the other all documents and other written information furnished by either party
to the other in connection with the Transaction.
9.6 Rights of NEWCO. From and after the Closing, every right granted to SCI
under this Agreement may be exercised by NEWCO, and every obligation of SCI
under this Agreement may be performed or discharged by NEWCO (provided, however,
that SCI shall in no event be relieved of any obligation or liability it may
have under this Agreement except by the full performance thereof by NEWCO, and
SCI, by its execution of this Agreement, unconditionally and irrevocably
guarantees such performance by NEWCO), and every covenant, obligation and
liability undertaken by Apple under this Agreement and every representation and
warranty made by Apple under this Agreement to or for the benefit of SCI shall
be deemed to also have been made to and for the benefit of NEWCO.
10. BROKERS; FINDERS.
Each of Apple and SCI represents and warrants to the other that it dealt with no
broker, finder or similar person, firm, corporation or other entity entitled to
a fee or commission in connection with the Transaction. Apple and SCI agree,
each with the other, that each will indemnify and hold harmless the other, in
accordance with the provisions of Section 8.2, against any claim (including
reasonable attorneys' fees) by any Person claiming through the indemnifying
party to be entitled to a fee or commission in connection with the Transaction.
11. TERMINATION OF AGREEMENT.
11.1 Termination of Agreement. This Agreement may be terminated, and the
Transaction may be terminated and/or abandoned, at any time but not later than
the Closing Date, as follows:
A. By mutual written agreement of SCI and Apple; or
B. By SCI if any of the conditions provided for in Section 5 of this
Agreement shall not have been met or waived in writing by SCI prior to the
required date therefor; or
C. By Apple if any of the conditions provided for in Section 6 of
this Agreement shall not have been met or waived in writing by Apple prior
to the required date therefor; or
D. By either party if a court of competent jurisdiction or any
governmental, regulatory or administrative agency or commission shall have
issued any order, decree or ruling, or taken any other action, in any case
having the effect of permanently restraining, enjoining or otherwise prohibiting
the Transaction, which order, decree or ruling is final and not appealable; or
E. By either party if a Material Adverse Event occurs with respect
to such party or the other party.
F. The right of termination set forth in Section 11.1.B or Section 11.1.C
shall not be available to a party having breached this Agreement if such breach
shall have resulted in the non-occurrence of the Closing.
11.2 Procedure Upon Termination. In the event of termination and abandonment by
SCI or by Apple, or by both, pursuant to Section 11.1 hereof, written notice
thereof shall forthwith be given to the other party and the Transaction shall be
terminated and/or abandoned, without further action by SCI or Apple.
12. DEFINITIONS
12.1 "Apple" shall mean Apple Computer, Inc., a California corporation, whose
address is 1 Infinite Loop, Cupertino, California; and, if the context so
requires, all Apple Affiliates.
12.2 "Apple Affiliates" shall mean all entities controlled by Apple, including
all wholly-owned subsidiaries and all entities in which Apple owns, directly or
indirectly, a controlling interest.
12.3 "Apple Product(s)" shall mean a product(s) sold by Apple under the Apple
Macintosh brand, the Apple Newton brand, or any successor or addition thereto,
or any replacement thereof.
12.4 "Closing" shall have the meaning set forth in Section 1.3.
12.5 "Confidentiality Agreement" shall mean that certain "Apple Computer, Inc.
Confidentiality Agreement (Mutual)" executed by Apple and SCI on or about
February 15, 1996, with respect to the Transaction.
12.6 "Manufacturing Agreement" shall mean that certain written agreement to be
entered into by and between the parties prior to the Closing Date, to be
effective as of the Closing Date, with respect to the respective rights and
obligations of the parties regarding the manufacture of certain products for
Apple at the Fountain Facility, substantially on the terms and conditions set
forth in the term sheet denominated, "Fountain Manufacturing Agreement -- Terms
and Conditions (Revision 5 - 4/3/96)", as such terms and conditions may be
mutually amended or modified by the parties.
12.7 "Material Adverse Effect" or "Material Adverse Event" shall mean, as the
context may require, any change, event or effect that is materially adverse to
the business, assets (including intangible assets), financial condition or
results of operations of the entity to whom the phrase applies with respect to
its business as it affects or impacts the Transaction, including without
limitation the operation of the Fountain Facility as contemplated by this
Agreement, either by Apple or NEWCO prior to the Closing or by SCI or NEWCO
following the Closing.
12.8 "Person" shall mean any natural person, trust, corporation, limited
liability company, partnership, joint venture or other entity having the ability
to conduct business under the laws applicable to the Transaction.
12.9 "Related Agreements" shall mean all agreements entered into by the parties
with respect to the Transaction, excepting this Agreement, including without
limitation the Manufacturing Agreement, and all ancillary agreements which may
be identified in either this Agreement or in the Manufacturing Agreement,
including all license agreements with respect to any intellectual property owned
or licensed by Apple and used in the operation of the Assets. All such Related
Agreements shall be listed in Exhibit J attached hereto.
12.10 "SCI" shall mean SCI Systems, Inc., a Delaware corporation, whose
address is: c/o SCI Systems (Alabama), Inc., 2101 West Clinton Avenue,
P.O. Box 1000, Huntsville, Alabama.
12.11 "Transaction" shall mean the entire series of transactions between the
parties, as described in this Agreement, and the Manufacturing Agreement,
together with all Related Agreements.
13. MISCELLANEOUS.
13.1 Notices. All notices, approvals or other communications provided for herein
to be sent or given to either party hereunder shall be deemed validly and
properly given or made if in writing and delivered by hand or by certified mail,
return receipt requested, or by overnight commercial delivery service, or sent
via telefacsimile (receipt confirmed) and addressed to the parties at the
following addresses:
If to Apple:
Apple Computer, Inc.
1 Infinite Loop
Cupertino, California 95014
Attention: Kwok Lau, MS 36-PL
Vice President, Operations
Telephone: (408) 974-0295
Fax: (408) 974-3222
With a copy to:
Apple Computer, Inc.
1 Infinite Loop
Cupertino, California 95014
Attention: General Counsel/esm
If to SCI:
SCI Systems, Inc.
c/o SCI Systems (Alabama), Inc.
2101 West Clinton Avenue
P.O. Box 1000
Huntsville, Alabama 35807
Attention: A.E. Sapp, Jr., President & COO
Telephone: (205) 882-4640
Fax: (205) 882-4466
With a copy to:
SCI Systems, Inc.
c/o SCI Systems (Alabama), Inc.
2101 West Clinton Avenue
P.O. Box 1000
Huntsville, Alabama 35807
Attention: Michael M. Sullivan,
Secretary and Corporate Counsel
Either of the parties hereto may give notice to the other at any time by the
methods specified above of a change in the address at which, or the persons to
whom, notices addressed to it are to be delivered in the future, and such notice
shall be deemed to amend this Section 13.1 until superseded by a later notice of
the same type. Any notice given by personal delivery or by telefacsimile shall
be deemed given on actual receipt, and any notice given by certified mail or
overnight commercial courier shall be conclusively deemed to have been given
when accepted or rejected as shown on the receipt therefor.
13.2 Dispute Resolution. In the event of any controversy or dispute between
Apple and SCI arising out of or in connection with this Agreement, the parties
shall attempt, promptly and in good faith, to resolve any such dispute. If the
parties are unable to resolve any such dispute within a reasonable time (not to
exceed ninety (90) days), then either party may submit such controversy or
dispute to mediation under the then applicable rules of the American Arbitration
Association (the "AAA") or any successor organization. If the dispute cannot be
resolved through mediation, then such dispute shall be resolved by arbitration
conducted in the Northern District of California, in accordance with the then
applicable commercial arbitration rules of the AAA; provided, however, that the
provisions of California Code of Civil Procedure 1283.05 (as enacted on the
Effective Date) shall be applicable to such arbitration. Any judgment rendered
by the arbitrators pursuant to this Section 13.2 shall be final, and judgment
may be entered upon it in accordance with applicable law, in any court having
jurisdiction.
13.3 Time of the Essence. Time is of the essence with respect to each and every
term or provision of this Agreement where time is an element of performance.
13.4 Force Majeure. Subject to the express provisions of Section 11 (regarding
termination of this Agreement), neither party will be deemed in default of this
Agreement, to the extent that performance of its obligations or attempts to cure
any breach are delayed or prevented by reason of any event beyond the reasonable
control of such party, including any act of God, fire, earthquake, natural
disaster, accident, act of government, or any other act or circumstance that is
beyond the reasonable control of either party, provided that such party gives
the other party written notice thereof promptly and, in any event, within five
(5) business days of discovery thereof and uses its best efforts to continue to
so perform or cure. In the event of such a force majeure event, the time for
performance or cure will be extended for a period equal to the duration of the
force majeure event, but in no event more than thirty (30) days.
13.5 Waiver of Compliance. Any failure of Apple, on the one hand, or SCI, on the
other, to comply with any obligation, covenant, agreement or condition herein
may be expressly waived in writing by an authorized officer of SCI or Apple,
respectively, but such waiver or failure to insist upon strict compliance with
such obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure.
13.6 Expenses. Whether or not the Transaction is consummated, Apple agrees that
all fees and expenses incurred by it in connection with this Agreement shall be
borne by it, and SCI agrees that all fees and expenses incurred by it in
connection with this Agreement shall be borne by it, including, without
limitation as to Apple or SCI, all fees of counsel, attorneys and accountants.
13.7 Headings; Number and Gender; Construction. The headings of the Sections of
this Agreement are inserted for convenience only and shall not constitute a part
hereof or affect in any way the meaning or interpretation of this Agreement.
Where the context so requires, the use of the singular form herein shall include
the plural, the use of the plural shall include the singular, and the use of any
gender shall include any and all genders. This Agreement shall be construed,
interpreted and enforced in accordance with its plain terms, regardless of the
party which drafted any of such terms and conditions, and any rule of
construction, interpretation or application to the contrary shall not apply
hereto.
13.8 Definition of Knowledge. The words "known", "to the knowledge of", "to the
best knowledge of", "aware" or words of similar import used in this Agreement
with reference to either party or to any individual shall be conclusively
presumed to mean that the person or entity has made reasonable and diligent
efforts, under the circumstances, to become knowledgeable; in the case of any
Person other than a natural person, the "knowledge" of such Person shall be
deemed to be the knowledge of its executive officers, and/or those individuals
within each entity with functional responsibility for the matter addressed.
13.9 Assignment. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns,
provided, however, that none of such parties shall assign this Agreement or its
rights hereunder without the written consent of the other, which consent shall
not be unreasonably withheld or delayed. Notwithstanding the foregoing, both
parties expressly agree that their respective rights and obligations under this
Agreement may be assigned, at any time prior to the Closing, to a wholly-owned
subsidiary of such party; provided, however, that the party so assigning shall
give prompt written notice of such assignment to the other party, and provided
further that no such assignment shall relieve the assigning party of any
obligations hereunder.
13.10 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
13.11 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
Each of the parties hereto irrevocably consents to the exclusive jurisdiction of
any state or federal court within the State of California, 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 California for such persons, and waives
and covenants not to assert or plead any objection which they might otherwise
have to such jurisdiction and such process. Notwithstanding the foregoing, the
parties agree that Colorado law shall govern with respect to any dispute between
the parties arising out of the transfer of the Real Property and any warranties
under the Deed.
13.12 Amendment and Modification. Any amendment, modification or
supplement to this Agreement shall be in writing signed by the party or
parties to be charged.
13.13 Other Remedies; Specific Performance. Except as otherwise expressly
provided in this Agreement, 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. The
parties hereto agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction to prevent any breach of this
Agreement and to enforce specifically the terms and provisions hereof in any
court having jurisdiction, in addition to any other remedy to which they are
entitled at law or in equity.
13.14 Entire Agreement; Incorporation of Exhibits; Severability. This Agreement
and the exhibits attached hereto (all of which are incorporated herein by this
reference) and the other documents delivered pursuant hereto constitute the
entire agreement of the parties in respect of the subject matter hereof and
supersede all prior agreements, communications, representations, or warranties,
whether oral or written, among the parties in respect to such subject matter. If
any term or provision of this Agreement is found by a court of competent
jurisdiction to be void or unenforceable, then such term or provision shall be
deemed stricken from this Agreement, and the remaining terms and conditions
hereof shall remain in full force and effect to the maximum extent possible, or
such void or unenforceable term shall be replaced with a valid and enforceable
provision that will achieve, to the extent possible, the purpose of such void or
unenforceable provision.
13.15 Publicity. All press releases and other public announcements respecting
the subject matter hereof shall be made only with the mutual agreement of the
parties hereto; provided, however, that the parties understand that SCI and
Apple are publicly held companies with shares traded on the New York and NASDAQ
Exchanges and that the parties may make such announcements as may be necessary
to comply with the rules and regulations of the said Exchanges and any and all
applicable Federal and state securities laws. After having given notice to the
other party hereto, SCI or Apple may make any such release or announcement which
in the opinion of their respective counsel is necessary or appropriate to comply
with applicable law. Each party hereto agrees that it will not unreasonably
withhold or delay any such approval.
13.16 Third Parties. Except as specifically set forth or referred to herein,
nothing herein expressed or implied is intended or shall be construed to confer
upon or give to any person or corporation other than the parties hereto and
their successors or assigns, any rights or remedies under or by reason of this
Agreement.
IN WITNESS WHEREOF, Apple and SCI have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
APPLE COMPUTER, INC., a California
corporation
By /s/ G. Fred Forsyth
-------------------
Its Senior V.P. Worldwide Operations
SCI SYSTEMS, INC., a Delaware corporation
By /s/ O.B. King
-------------
Its Chief Executive Officer
<PAGE>
Exhibit A
Legal Description of Real Property
Exhibit B
List of Personal Property (Including Spare Parts)
Exhibit C
List of Initial Inventory
Exhibit D
List of Assigned Permits
Exhibit E
List of Assigned Contracts
Exhibit F
Allocation of Purchase Price
Exhibit G
Form of Bill of Sale
Exhibit H
Form of Assignment and Assumption Agreement
Exhibit I
Schedule of Environmental/OSHA Matters
Exhibit J
List of Related Agreements
Manufacturing Agreement
Employee Agreement
Intellectual Property Agreement
Information Services Agreement
Transition Services Agreement
Letter of Credit Agreement
