EXHIBIT 2.2
SECOND AMENDMENT TO ACQUISITION AGREEMENT
THIS SECOND AMENDMENT TO ACQUISITION AGREEMENT, dated as of September
30, 1998 (this "Second Amendment"), between Micron Technology, Inc., a Delaware
corporation ("Buyer"), and Texas Instruments Incorporated, a Delaware
corporation ("Seller"), amends that certain Acquisition Agreement, dated June
18, 1998, as amended by the First Amendment to Acquisition Agreement, dated as
of July 31, 1998 (such agreement, as so amended, being hereafter referred to as
the "Acquisition Agreement"), between Buyer and Seller. Capitalized terms used
and not defined herein have the respective meanings ascribed to them in the
Acquisition Agreement.
R E C I T A L S:
A. Section 6.6 of the Acquisition Agreement contemplated that the
parties would agree on terms and conditions to apply to the transfer at Closing
of the Acquired Assets and Assumed Liabilities associated with Seller's Italian
operations to be transferred by Seller to Buyer, including appropriate
conditions precedent to Closing.
B. Section 6.7 of the Acquisition Agreement contemplated that, among
other things, the parties would agree on the forms of certain agreements
pursuant to which various services may be supplied by Seller or its subsidiaries
to Buyer and its subsidiaries with respect to the acquired business and Buyer
would request KTI to continue manufacturing and supplying certain SDRAM or DRAM
products for military and aerospace applications to Seller.
C. Section 6.10 of the Acquisition Agreement contemplated that Seller
would deliver to Buyer the Seller Disclosure Letter.
D. Section 6.11 of the Acquisition Agreement contemplated that Buyer
would deliver to Seller the Buyer Disclosure Letter.
E. Section 6.12 of the Acquisition Agreement contemplated that the
parties would, among other things, agree on terms and conditions of the JV
Amendments as well as amendments to all debt, credit or financing Contracts to
which any of the Joint Ventures is a party.
F. Section 6.31(a) of the Acquisition Agreement contemplated that Buyer
would deliver to Seller the Transferred Contract Schedule.
G. At the Closing, Seller is delivering to Buyer the Seller Disclosure
Letter, dated as of the Closing Date, and Buyer is delivering Seller the Buyer
Disclosure Letter, dated as of the Closing Date.
H. The parties have identified certain other changes to the
Acquisition Agreement necessary to reflect the intentions of the parties and
desire to amend the Acquisition Agreement to reflect such changes as well as
to set forth the agreements with respect to the foregoing matters.
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
Section 1. Exhibit A to the Acquisition Agreement is amended by
deleting Exhibit A in its entirety and replacing it with Exhibit A to this
Second Amendment.
Section 2. Exhibit B to the Acquisition Agreement is amended by
deleting Exhibit B in its entirety and replacing it with Exhibit B to this
Second Amendment.
Section 3. Exhibits D and G to the Acquisition Agreement are amended
by deleting Exhibits D and G in their entirety and replacing them with
Exhibits D and G to this Second Amendment.
Section 4. Exhibit H to the Acquisition Agreement is amended by
deleting Exhibit H in its entirety and replacing it with Exhibit H to this
Second Amendment.
Section 4. Exhibit I to the Acquisition Agreement is amended by
deleting Exhibit I in its entirety and replacing it with Exhibits I-1 through
I-14 to this Second Amendment.
Section 5. Exhibit J to the Acquisition Agreement is amended by
deleting Exhibit J in its entirety and replacing it with Exhibit J to this
Second Amendment.
Section 6. The Acquisition Agreement is amended to add Exhibits K, L,
M, N, O and P hereto as new Exhibits K, L, M, N, O and P to the Acquisition
Agreement.
Section 7. Section 1.6 of the Acquisition Agreement is amended by
adding, at the end thereof, the following:
Acquired Intellectual Property shall not include the words
or name "Texas Instruments Incorporated", "Texas Instruments"
or "TI", or Seller's related monograms, logos, trademarks or
trade names.
Section 8. Section 1.11 of the Acquisition Agreement is amended by
adding, immediately following the words "(including DRAM, Flash and EPROM
devices)," the following:
and test equipment for testing such MOS memory
devices,
Section 9. Section 1.14 of the Acquisition Agreement is amended by
deleting Section 1.14 in its entirety and replacing it with the following:
1.14 Intentionally omitted.
Section 10. Section 1.38 of the Acquisition Agreement is amended by
deleting Section 1.38 in its entirety and replacing it with the following:
1.38 Intentionally omitted.
Section 11. Section 1.56 of the Acquisition Agreement is amended to
replace "Clause 12" with "Clause 13."
Section 12. Section 1.97 of the Acquisition Agreement is amended by
deleting Section 1.97 in its entirety and replacing it with the following:
1.97 "KTI Amendments" means that certain Amendment
No. 13 to Shareholders' Agreement among Seller, Kobe Steel,
Ltd., and KTI, and the amendments to the other agreements and
related transactions contemplated by such Amendment No. 13 to
be entered into on or prior to the Closing.
Section 13. Section 1.98 of the Acquisition Agreement is amended by
deleting Section 1.98 in its entirety and replacing it with the following:
1.98 "KTI Shareholders' Agreement" means the
shareholders' agreement entered into by Kobe Steel, Ltd. and
Seller effective on March 19, 1990 and ratified by KTI
Semiconductor Limited on May 22, 1990, as amended on September
28, 1990, November 5, 1992, June 7, 1993, July 14, 1993,
December 15, 1993, March 24, 1994, June 27, 1994, December 11,
1995, December 17, 1996, February 17, 1998, March 26, 1998 and
June 23, 1998.
Section 14. Section 1.105 of the Acquisition Agreement is amended to
replace the word "Business" with the words "assets and liabilities which would
have been Acquired Assets and Assumed Liabilities."
Section 15. Section 1.112 of the Acquisition Agreement is amended by
deleting Section 1.112 in its entirety and replacing it with the following:
1.112 "Notes" means the Subordinated Notes and the
Convertible Notes.
Section 16. Section 1.124 of the Acquisition Agreement is amended by
adding, at the end thereof, the following:
or other body with respect to arbitration, mediation or
administrative proceedings.
Section 17. Section 1.132(d) of the Acquisition Agreement is hereby
amended to add at the end of such Section 1.132(d) the following:
(including but not limited to, Losses, Claims, Liens and
Liabilities that arise with respect to violations existing
after the Closing Date which violations arose prior to the
Closing Date).
Section 18. Section 1.163 of the Acquisition Agreement is amended by
deleting Section 1.163 in its entirety and replacing it with the following:
1.163 "TECH Amendments" means Amendment Agreement
No. 4 to the Shareholders' Agreement among Seller, EDB,
Canon Inc., a corporation established under the laws of
Japan, Hewlett-Packard Company, a corporation established
under the laws of the State of California, U.S.A., TECH,
Hewlett-Packard World Trade, Inc., a corporation established
under the laws of the State of Delaware, U.S.A., EDB
Investments Pte Ltd., a corporation established under the
laws of Singapore, and Hewlett-Packard Singapore (Private)
Limited, a corporation established under the laws of
Singapore, and the amendments, to the other agreements and
related transactions contemplated by such amendment to be
entered into or occur at or prior to Closing.
Section 19. Section 1.164 of the Acquisition Agreement is amended by
deleting Section 1.164 in its entirety and replacing it with the following:
1.164 "TECH Shareholders' Agreement" means the
shareholders' agreement entered into by Seller, EDB, Canon,
Inc. and Hewlett Packard Company effective on April 11, 1991
and ratified by TECH Semiconductor Singapore Pte. Ltd. on May
13, 1991, as amended August 22, 1991, February 15, 1993 and
August 4, 1995 and subject to the waivers dated May 31, 1991,
December 19, 1991 and February 15, 1997.
Section 20. Section 1.179 of the Acquisition Agreement is amended by
deleting Section 1.179 in its entirety and by replacing it with the following:
1.179 "Transition Services Agreement" means each of
the following agreements to be executed and delivered by
the parties in accordance with Sections 9.2(c) and 9.3(c)
hereof: (i) the master Transition Services Agreement
substantially in the form of Exhibit I-1 hereto and the
individual agreements contemplated by the master
Transition Services Agreement including, (ii) the IT
Transition Service Agreement between Seller and Buyer;
(iii) the General Administrative Services Agreement
between Seller and Buyer; (iv) the EPROM Products
Agreement between Seller and Buyer; (v) the Wire Bonder
Equipment Service and Support Agreement between Seller
and Buyer; (vi) the Military Memory Products Service
Agreement between Seller and Buyer; (vii) the Human
Resources Administration Transition Services Agreement
between Seller and Buyer; (viii) the Miho, Japan
Engineering Consulting Services Agreement between Seller
and Buyer; (ix) the PTEC Purchase Agreement between
Seller and Buyer; (x) the Labeling Agreement between
Seller and Buyer; (xi) the Flash Products Agreement
between Seller and Buyer; (xii) the Field Memory
Products Services Agreement between Seller and Buyer;
(xiii) the Transition Lease - Xxxxxxxx (Houston) Facility
between Seller and Buyer; and (xiv) the Transition Sublease,
Xxxxx Road (Dallas) Facility between Seller and Buyer each
as set forth as Exhibit I-2 - I-14 hereto.
Section 21. Section 1.183 of the Acquisition Agreement is amended by
deleting the reference to "other than up to 345,296 million Italian Lire
principal amount of indebtedness for borrowed money directly related to
Seller's assets in Italy constituting Acquired Assets".
Section 22. Sections 3.3(a) and 3.3(b) of the Acquisition Agreement
are amended by deleting Sections 3.3(a) and 3.3(b) in their entirety and
replacing them with the following:
(a) 28,933,092 fully paid and nonassessable
unregistered shares of Buyer Common Stock;
(b) Convertible Notes in an aggregate principal
amount of $ 324,703,000;
Section 23. Sections 3.4(a) and 3.4(b) of the Acquisition Agreement
are amended by deleting Sections 3.4(a) and 3.4(b) in their entirety and
replacing them with the following:
(a) Buyer shall deliver to Seller Note Purchasing
Subsidiary (i) $210 million aggregate principal amount of
Subordinated Notes, and (ii) Convertible Notes in an
aggregate principal amount of $415,297,000.
(b) Seller shall cause Seller Note Purchasing
Subsidiary to deliver to Buyer U.S. $550,261,699 of
immediately available funds (the "Cash Payment") to an
account designated to Seller Note Purchasing Subsidiary by
Buyer in writing on or prior to the Closing Date. The Notes
shall be treated as debt instruments and the portion thereof
delivered to Seller Note Purchasing Subsidiary shall be
treated as having an aggregate issue price for purposes of
Code Section 1273 (and the regulations promulgated
thereunder) equal to the Cash Payment; the issue price
per $1,000 of principal amount of Notes shall be equal to
$880.00 (the "Issue Price"). The issue price per $1,000
of principal amount of the portion of the Convertible Notes
not delivered to the Seller Note Purchasing Subsidiary shall
also be equal to the Issue Price.
Section 24. Section 3.4(c) of the Acquisition Agreement is amended to
delete the first sentence of Section 3.4(c). The second sentence of Section
3.4(c) is amended to delete the phrase "the Debt Valuation and".
Section 25. Section 4.1(e)(i) of the Acquisition Agreement is amended
by adding "(A)" immediately before the first sentence and "(B)" immediately
before the second sentence.
Section 26. Section 4.1(i) of the Acquisition Agreement is amended to
replace the word "Business" in the second sentence thereof with the words
"Acquired Assets and Assumed Liabilities."
Section 27. Section 4.1(n)(ii) of the Acquisition Agreement is amended
by deleting Section 4.1(n)(ii) in its entirety and replacing it with the
following:
(ii) The leases or other written agreements necessary to
establish a valid occupancy right or leasehold
interest for the Leased Facilities are or, as of the
Closing, will be in full force and effect for the
benefit of the member of the Buyer Operating Group
(indicated in Section 4.1(n) of the Seller Disclosure
Letter), as lessee and there are no material defaults
or breaches attributable to any member of the Seller
Group or to the landlord or landowner thereunder.
Section 28. Section 6.1(a) of the Acquisition Agreement is amended to
add, in the third sentence immediately following the phrase "(other than the
initial two subscriber shares already held by Seller)" the following:
and Singapore Newco's $150,253,000 5.47% Promissory Note as
attached hereto as Exhibit K (the "Singapore Newco Note")
Section 29. Section 6.1(b) of the Acquisition Agreement is amended by
deleting the last sentence of Section 6.1(b) in its entirety and by replacing
it with the following:
On or before the Closing Date, Seller shall cause
Italian Operating Company and Italian Newco to execute a
contribution-in-kind agreement (including appropriate
schedules of assets to be assigned to, and specific
liabilities (including Contract liabilities) to be assumed
by, Italian Newco) with terms and conditions reasonably
satisfactory to Buyer.
Section 30. Section 6.4 of the Acquisition Agreement is amended (i)
to delete the word "Business" wherever it appears in such Section 6.4 and to
replace such word with the words "Acquired Assets and Assumed Liabilities" and
(ii) to delete the words "GAAP consistently applied and consistent with the
GAAP principles used to prepare the March Balance Sheet" wherever it appears
in such Section 6.4 and to replace such words with the words "Exhibit L
hereto".
Section 31. Section 6.4 is amended by adding, at the end thereof,
new Sections 6.4 (g) and (h) as follows:
(g) If, in connection with the contribution-in-kind
transaction contemplated in Section 6.1(b), Italian
Operating Company, within 90 days after the Closing
Date, contributes cash or marketable securities to
Italian Newco solely in order to make the value of
net assets contributed to Italian Newco equal to the
contribution value of net assets reported prior to
the Closing, then Buyer shall be obliged to promptly
reimburse Seller for such contribution made by
Italian Operating Company in satisfaction of such
gross-up obligation. If Italian Operating Company
makes any such payment, the Buyer's reimbursement
obligation in respect thereof may be satisfied by
adding such amount to any payment by Buyer, or
deducting such amount from any payment by Seller, of
the Working Capital Requirement.
(h) Notwithstanding anything else in this Section 6.4,
Seller may, at its option elect to reassume and
attempt to collect for its benefit any accounts
receivable of the Business shown on the Closing
Balance Sheet which remain uncollected 90 days after
the Closing Date, and in such event, such accounts
receivable shall not be included in the Closing
Balance Sheet. Moreover, from the Closing Date to the
date on which the Closing Balance Sheet is delivered,
Buyer agrees to use commercially reasonable efforts
to sell inventory at prevailing market rates.
Section 32. Section 6.15 of the Acquisition Agreement is amended by
adding to the end of the first sentence thereof the following:
; provided, however, that Licensed IP shall not include the
words or name "Texas Instruments Incorporated", "Texas
Instruments" or "TI", or Seller's related monograms, logos,
trademarks, trade names, or any variations or combinations
thereof.
Section 33. Section 6.18 of the Acquisition Agreement is amended by
deleting Section 6.18 in its entirety and by replacing it with the following:
The valuation and allocation of the purchase price and other
consideration exchanged in connection with the transactions
described herein (i) have been determined in accordance with
the Issue Price, the Tax Parameters and the applicable
provisions of Section 1060 of the Code, and (ii) are set
forth in Exhibit M (such valuation and allocation being
referred to herein as the "Price Allocation"). Exhibit M
also sets forth certain assumptions that were used in
preparing the Price Allocation. The Price Allocation shall
be adjusted as necessary to reflect the Closing Balance
Sheet or the incorrectness of such assumptions. Any disputes
involving the Price Allocation shall be resolved in
accordance with the procedures set forth in Section 6.4(d)
hereof and the provisions of this Section 6.18. Each party
(and their respective Affiliates) hereto shall at its own
expense adopt and abide by such Price Allocation, Issue
Price and Tax Parameters for purposes of all Tax Returns
filed by them and shall not take any position inconsistent
therewith in connection with any examination of any Tax
Return, any refund claim, or any judicial litigation
proceeding but only if doing otherwise in such judicial
litigation proceeding would materially prejudice the other
party, or otherwise until there has been a final
"determination" (within the meaning of Code Section 1313(a))
or any other event which finally and conclusively establishes
the amount of any liability for Taxes. In the event that the
Price Allocation is disputed by any Taxing authority, the
party receiving notice of the dispute shall promptly notify
the other parties hereto of such dispute and the parties
hereto shall consult with each other concerning resolution
of the dispute.
Section 34. Section 6.29 is amended by deleting the reference to
"U.S. $750 million" and replacing it with "Cash Payment".
Section 35. Article VI of the Acquisition Agreement is amended to add,
immediately following Section 6.31, new Sections 6.32, 6.33, 6.34, 6.34 and
6.35 as set forth below:
6.32 Cross-License Agreement. Buyer and Seller agree
that the provisions of Section 4.5 of the Cross-License
Agreement relating to the consequences of an action for patent
infringement brought by Seller or any of its SUBSIDIARIES (as
defined in the Cross-License Agreement) against Micron
Electronics, Inc. ("MEI") and/or Micron Communications, Inc.
("MCC") shall remain applicable in the event such action is
brought against any successor in interest to all or
substantially all of the business and patents of MEI or MCC,
as the case may be.
6.33 Certain Technology Agreements.
(a) Seller represents that it is a party to
agreements, dated December 9, 1988, November 15, 1991 and May
1, 1995 with Hitachi ("GT Projects"), agreements, dated
January 30, 1997 and December 25, 1997 between Seller, Hitachi
and Mitsubishi Electric Corporation ("Orion Project"), a
License and Technical Assistance Agreement, dated December 19,
1997, between Mitsubishi Electric Corporation and Seller
("Project M"), and an agreement, dated August 1, 1989 between
Seller, Universita' degli Studi dell'Aquila and European
Engineering and Technologies ("Eagle Consortium"), each
relating to the development and manufacture of semiconductor
products. To the extent intellectual property has resulted
from the sole and/or joint activities of the parties to each
of the foregoing agreements, Seller and Buyer desire now to
clarify Buyer's rights and Seller's obligations with respect
to such intellectual property as follows, without limiting or
diminishing any rights or licenses granted by other agreements
between Buyer and Seller:
(i) Seller hereby grants to Buyer and its
Subsidiaries a perpetual, non-exclusive,
royalty-free, worldwide license under any know how,
trade secret, copyright and mask work rights
arising out of or transferred to Seller pursuant
to the Eagle Consortium as to which Seller and/or
any of its Subsidiaries ever had, acquired, or
presently have a right to use, such license to
grant rights to Buyer to develop, manufacture, have
manufactured, use, sell, import or otherwise
dispose of semiconductor products for the
respective lives of the know-how, trade secret,
copyright, and mask work rights.
(ii) Seller hereby grants to Buyer and its
Subsidiaries a perpetual, non-exclusive,
royalty-free, worldwide license of maximum scope
(except that such license shall be non-exclusive),
including sublicensing rights, which Seller is
permitted to grant to Buyer under the "Termination
Agreement of GT Agreements," dated September 28,
1998, "Termination Agreement of Orion Agreements,"
dated September 29, 1998, or "Memorandum on
Termination of License and Technical Assistance
Agreement," dated September 29, 1998, respectively,
as to any know how, trade secret, copyright and mask
work rights arising out of or transferred to Seller
pursuant to the GT Projects, the Orion Project, or
Project M, respectively, such license to grant rights
to Buyer to develop, manufacture, have manufactured,
use, sell, import or otherwise dispose of
semiconductor products for the respective lives of
the know-how, trade secret, copyright, and mask work
rights.
(iii) With respect to patents jointly owned
by Seller arising out of the GT Projects or the Orion
Project, Seller agrees that it will not consent to
any licensing framework for any such joint patent
that would allow any party to license or enforce such
joint patent to or against Buyer on terms that would
require Buyer to pay or offer any consideration of
any kind in exchange for such license. The terms
"joint patents" and "licensing framework" shall
have the meaning ascribed to them in the agreements
relating to the GT Projects and the Orion Project.
(b) Seller represents and warrants that there are no
patents, pending applications for patent, or disclosures
which will result in applications for patent arising out
of or resulting from Project M that are jointly owned by
Seller and Mitsubishi Electric Corporation.
(c) Seller agrees that any patent(s) arising out of
or resulting from the Eagle Consortium shall be considered
"TI PATENTS" as that term is used in the Cross-License
Agreement, attached as Exhibit C to the Acquisition
Agreement.
(d) Notwithstanding any other indemnity provision in
this Agreement or any agreement or amendment associated with
this Agreement, and not subject to any limitations on any
other indemnity provision in this Agreement or any agreement
or amendment associated with this Agreement, Seller agrees to
indemnify, defend and hold Buyer and any Buyer subsidiary,
including their respective directors, officers, employees and
agents harmless with respect to any claim that any
manufacture, use, sale, offer to sell or importation of any
product, any combination of such product with any other
hardware and/or software, any method or process used in the
manufacture or testing of such product, or any tools or
equipment used for accomplishing any of the foregoing
infringes (a) any know how, trade secret, copyright or mask
work rights of the Eagle Consortium to which Buyer received
a license under subparagraph 1, above, (b) any Joint Patent
arising out of the GT Projects or the Orion Project, or (c)
any patent arising out of or resulting from the Eagle
Consortium. This indemnity shall apply regardless of whether
such claim is brought by Hitachi, Mitsubishi, parties to the
Eagle Consortium, or any successor in interest to any
intellectual property identified in (a), (b) and (c) herein.
Seller agrees to pay all costs, expenses and fees arising out
of defense and investigation of such claim, including any and
all damages award or settlement amount resulting therefrom.
In the event an injunction is obtained against activities of
Buyer or its subsidiaries, Seller shall use all commercially
reasonable efforts to procure for Buyer the right to continue
the activities which resulted in the claim.
6.34 Transfers of Acquired Intellectual Property.
To permit Buyer to specifically document the assignment of
specific items of Intellectual Property transferred to Buyer
as Acquired Intellectual Property, or to facilitate the
recordation of such assignments, the parties agree that it
is desirable to have specific documents of assignment.
Accordingly, attached hereto as Exhibit N is an "Assignment
of Trademarks" currently recognized to be included within
Acquired Intellectual Property. To the extent that additional
trademarks may be identified within the Acquired Intellectual
Property, the parties agree that an assignment in the form
of Exhibit N may be utilized to document such assignment.
Similarly, attached hereto as Exhibit O is a "Form of
Copyright Assignment" which the parties agree is appropriate
for use to document the assignment(s) of Copyrights included
within Acquired Intellectual Property, as agreed upon by the
parties subsequent to Closing.
6.35 Backlog. Backlog of DRAM products on the books
of the Seller Group as of the Closing Date and scheduled for
delivery to any Seller Group customer (other than
distributors) within thirty (30) days of the Closing Date
shall, to the extent such commitments were entered into in the
normal course of the Business consistent with past practices,
become backlog of Buyer or one of its Subsidiaries, which
shall honor applicable price, quantities and delivery dates;
provided that if Buyer or its Subsidiary reasonably determines
that price, quantities, delivery dates, credit or payment
terms associated with such backlog are not consistent with its
customary policies and Buyer or its Subsidiary is unable to
negotiate acceptable terms with such customer, Buyer or its
Subsidiary may reject such backlog. Backlog scheduled for
delivery to, and DRAM inventory held at, the common
distributors designated in the letter agreements attached
hereto as Exhibit P shall be treated in accordance with the
provisions of such letter agreements. The Seller Group shall
exercise commercially reasonable efforts to avoid scheduling
backlog for delivery within five (5) Business Days of the
Closing Date.
Section 36. Section 6.6 of the Acquisition Agreement is
amended by deleting Section 6.6 in its entirety and by replacing it with the
following:
6.6 Italian Operations.
(a) Buyer shall cause employment levels in Italian
Newco to remain substantially equivalent to the level of
employment as of the Closing Date for a period commencing on
the Closing Date and terminating on the earlier to occur of
(x) the publication in the Italian Official Gazette of a CIPE
resolution stating that investment under the 1989 Program
Contract is complete (the "Publication Date") or (y) 18 months
after the Closing Date; provided, however, that Italian Newco
shall be entitled to terminate Italian Newco employees for
good reason and shall be allowed to reduce employment levels
through Italian Newco employee attrition; provided, further,
that in all events Buyer shall cause Italian Newco to maintain
levels of employment consistent with the minimum requirements
under the 1989 Program Contract (i.e. 1,270 employees) during
such period. Buyer shall cause employment levels in Italian
Newco to remain at least equal to the Required Employment
Levels as in effect from time to time for a period commencing
on the earlier of (i) the Publication Date and (ii) 18 months
after the Closing Date and terminating 30 months from the
Closing Date. The restrictions in this Section 6.6(a) shall
not apply to Buyer or any of its affiliates to the extent
Buyer or its affiliates obtain appropriate approvals from
competent Italian Governmental Agencies permitting or
otherwise authorizing the reduction or elimination of the
Required Employment Levels but only to the extent of such
reduction or elimination. For purposes of this Agreement,
"Required Employment Levels" means, on any particular date,
the number of Italian employees that Italian Newco is required
to employ at such date in accordance with the Ministerial
Decrees issued by the Italian Ministry of Treasury, Budget and
Economic Programming in connection with subsidies granted
under the 1989 Program Contract.
(b) Buyer shall not sell or dispose of any item of
Restricted Equipment for a period commencing on the Closing
Date and terminating on the earlier to occur of (x) the
Equipment Restriction Expiration Date for that particular item
of Restricted Equipment or (y) thirty (30) months after the
Closing Date, unless Buyer replaces such Restricted Equipment
with equipment more technologically advanced and with greater
book value; provided, however, that in no event shall any
restriction extend beyond 30 months; provided, further, that
the restrictions in this Section 6.6(b) shall not apply to
Buyer or its Affiliates with respect to any item of Restricted
Equipment to the extent Buyer or its Affiliates obtains
approval in accordance with Article 8 of the Gaspari Decree
permitting such sale or disposition. For purposes of this
Agreement, (A) "Restricted Equipment" means equipment
constituting Acquired Assets subject to use restrictions under
Article 8 of the Gaspari Decree, and (B) "Equipment
Restriction Expiration Date" means, with respect to any item
of Restricted Equipment, the date on which the restrictions
under Article 8 of the Gaspari Decree lapse or otherwise
become inapplicable to such item of Restricted Equipment.
(c) For a period commencing on the Closing Date and
terminating on the earlier to occur of (x) the Facility
Restriction Expiration Date for any particular Restricted
Facility Portion or (y) 30 months after the Closing Date,
Buyer shall use such Restricted Facility Portion for the
manufacture of electronics products at levels of activity that
in the aggregate are substantially consistent with activity
levels at the Closing Date, taking into account the
contemplated conversion of the 6-inch line to the 8-inch line
and the implementation of new technology provided, however,
that in no event shall any restriction extend beyond 30
months; provided, further, that the restrictions in this
Section 6.6(c) shall not apply to Buyer or any of its
Affiliates with respect to any Restricted Facility Portion to
the extent Buyer or its Affiliates obtain approval in
accordance with Article 8 of the Gaspari Decree eliminating
the restrictions with respect to that Restricted Facility
Portion. For purposes of this Agreement, (A) "Restricted
Facility Portion" means each portion of the facility located
at Avezzano, Italy constituting Acquired Assets subject to the
use restrictions under Article 8 of the Gaspari Decree, and
(B) "Facility Restriction Expiration Date" means, with respect
to each Restricted Facility Portion, the date on which all
restrictions under Article 8 of the Gaspari Decree lapse or
otherwise become inapplicable to such Restricted Facility
Portion.
(d) In determining (i) the Required Employment Levels
applicable from time to time, (ii) the Equipment Restriction
Expiration Date with respect to any item of Restricted
Equipment, and (iii) the Facility Restriction Expiration Date
with respect to any Restricted Facility Portion for purposes
of this Section 6.6, Buyer shall be entitled to rely on the
books and records included in the Acquired Assets relating to
the operations at Avezzano, and Buyer's good faith
determination thereof shall be conclusive and binding. Buyer
shall, and shall cause its Affiliates to, retain such books
and records and afford Seller and its representatives access
thereto in accordance with Section 6.28.
(e) Seller shall cause all bank Liens on the Acquired
Assets in Italy arising with respect to the indebtedness
described in item 1 of Exhibit J hereto (the "Avezzano Debt")
to be fully released within six months from the Closing Date
and in no event shall any such Liens constitute Permitted
Liens notwithstanding anything to the contrary contained
herein or in the Seller Disclosure Letter.
(f) If at any time prior to the date 30 months
following the Closing Date, the Italian government fails to
pay interest subsidies in respect of the Avezzano Debt when
due or within any applicable grace periods, Buyer shall pay
Seller or its designee, promptly on demand, (x) 50% of any
additional interest Seller or any of its Affiliates is
required to pay as a result thereof, and (y), without
duplication, 50% of any amounts paid by Seller of any of its
Affiliates in connection with the prepayment or acceleration
of the Avezzano Debt, provided that the aggregate amount
payable by Buyer pursuant to this Section 6.6(f) shall not
exceed $30 million.
(g) Buyer shall, and shall cause its Affiliates to,
provide to the Italian Ministry of Treasury, Budget and
Economic Programming reasonable access to their facilities,
books, records, auditors, employees and agents in order to
allow the completion of any verification and audits relating
to the 1989 Program Contract.
Section 37. Section 6.7 of the Acquisition Agreement is amended by
deleting Section 6.7 in its entirety and by replacing it with the following:
6.7 Transition Services Agreement. Seller and
Buyer shall execute and deliver each Transition Services
Agreement.
Section 38. Sections 6.10, 6.11 and 6.12 of the Acquisition Agreement
are amended by deleting such Sections 6.10, 6.11 and 6.12 in their entirety and
replacing them with the following:
6.10 Seller Disclosure Letter. On or prior to the
Closing Date, Seller shall deliver to Buyer the Seller
Disclosure Letter which shall include all of Seller's
disclosure schedules contemplated by this Agreement. The
Seller Disclosure Letter shall make specific reference to only
that particular Section (or, with respect to representations
and warranties, that particular subsection) as to which each
disclosure schedule included therein relates and, to the
extent any disclosure schedule included therein relates to
more than one Section (or more than one representation and
warranty), then such disclosure schedule shall include a
specific cross-reference to the other Sections (or other
representations and warranties) to which such disclosure
schedule relates.
6.11 Buyer Disclosure Letter. On or prior to the
Closing Date, Buyer shall deliver to Seller the Buyer
Disclosure Letter which shall include all of Buyer's
disclosure schedules contemplated by this Agreement. The Buyer
Disclosure Letter shall make specific reference to only that
particular Section (or, with respect to representations and
warranties, that particular subsection) as to which each
disclosure schedule included therein relates and, to the
extent any disclosure schedule included therein relates to
more than one Section (or more than one representation or
warranty), then such disclosure schedule shall include a
specific cross-reference to the other Sections (or other
representations and warranties) to which such disclosure
schedule relates.
6.12 JV Amendments. On or prior to the Closing Date,
Buyer and Seller shall use commercially reasonable efforts to
cause the JV Amendments to be duly executed, delivered, and in
full force and effect, and the transactions contemplated to
occur thereunder on or prior to the Closing to occur on or
prior to the Closing.
Section 39. Section 6.25 of the Acquisition Agreement is amended by
adding the following language at the end thereof:
(e) Buyer hereby agrees to waive any claim that Buyer
may have against Seller arising out of: (i) Seller's
manufacture and sale of Low Density Flash, EPROM, Field Memory
or PTEC products (collectively "Waived Products"), (ii)
Seller's sale of products fabricated based upon Flash-type
EPROM Wafers-in-Process originating in Seller's Avezzano
facility on or before the Closing Date (including completed
devices in inventory); and (iii) Seller's sale of 1 Meg and 4
Meg DRAM devices in inventory as of the Closing Date, not to
exceed 350,000 devices total ("DRAM" in this subsection (iii)
shall not include Field Memory), where such claim is based on
a violation of the Covenant Not to Compete in Section 6.25 of
this Agreement. To the extent the manufacture or sale of any
product is permitted by the foregoing waiver (i.e., such
product is a Waived Product; a Flash-type EPROM under
subsection (ii) above; or a DRAM under subsection (iii)
above), such product shall be deemed a Licensed Product under
the Cross License Agreement attached as Exhibit C to this
Agreement. This waiver shall apply without regard to the
fabrication facility utilized by Seller in the manufacture
of Waived Products, provided that Seller has an ownership
interest either directly or through a wholly owned
subsidiary in any such fabrication facility so utilized
of fifty percent (50%) or more.
(f) Seller shall have the right to transfer to a
third party the entirety of its manufacturing operations
relating to any one of the Waived Products (whether or not
equipment or facilities are included in such transfer), and
in connection with such transfer Seller shall transfer or
terminate its contractual commitments, relating to such Waived
Products; and, without otherwise diminishing the provisions
of Section 6.15, in the event of such transfer as to a Waived
Product, Buyer grants to Seller the right to sublicense to
such transferee Acquired Intellectual Property that is
licensed to Seller pursuant to Section 6.15(b) and that is
directly related to and used in the manufacturing of such
Waived Product, the scope of such sublicense being strictly
limited to the manufacturing of such Waived Product.
(g) The waiver provided in this Section is personal
to Seller, and in the event of such transfer, Buyer's waiver
described herein shall terminate and shall subsequently be
void as to such Waived Product. Nothing in the preceding
sentence shall limit any sublicense rights granted in
subsection (f) above.
(h) Except as expressly waived in this Section, the
provisions of the Covenant not to Compete of Section 6.25
remain undiminished and in full force and effect. Seller
agrees that Buyer's granting of the limited waiver and limited
right to sublicense in this Section shall not be considered to
or deemed to in any way establish any course of dealing
between the parties; and further agrees that Buyer shall not
in any way be obligated to grant any further waiver under the
Covenant not to Compete or any further right to sublicense
under Section 6.15(b) in the future.
(i) For purposes of this Section, the following
definitions shall apply:
"Low Density Flash" as used herein shall
mean: (a) Flash-type EPROM memory products having the
density levels up to 4 megabits manufactured at
Seller's facility in Lubbock, Texas as of the Closing
Date and subject to lifetime buy orders deadlines no
later than January 1, 1999.
"EPROM" shall mean erasable programmable
read only memory products wherein erasure is
accomplished through exposure to ultraviolet light;
EPROM shall not include "Flash-type EPROM" memory
products.
"Flash-type EPROM" (also known as
"Flash-type EEPROM") shall mean non volatile,
reprogrammable memory devices in which the storage
cells include a floating gate, and in which erasure
of the storage cells is achieved through application
of electrical current.
"Field Memory" shall mean an application
specific DRAM-based memory product specifically
designed for use in consumer electronics applications
and having dual I/O ports offering independent and
asynchronous serial read/write with limited or no
random accessing capabilities of the types
manufactured by Seller as of the Closing Date,
which Seller believes to be the following:
Devices TI Part Number
------- --------------
4C2072 SSOP TMS4C2072DT
4C2970 SSOP TMS4C2970DT
4C2972 SSOP TMS4C2972DT
4C2973 SSOP TMS4C2973DT
4C2973 TSSOP TMS4C2973DGL
4035 SSOP
92040 CSP
92040 QFP
UvFM 4C397X
; so long as such products are within the technical
description above and are products manufactured by
Seller as of the Closing Date. In no event shall
Field Memory include any product designed for use
as main, cache or graphics memory in the PC or High
Definition Television (HDTV) space.
"PTEC" shall mean a custom Low Density Flash
product which consists of a flash core embedded
within the control logic and bus interface logic
required by the microcontroller or other processor
devices and which is used within an engine control
system, and which Seller sells to Ford Motor Company
("Ford") pursuant to a contract between Seller and
Ford dated August 6, 1996; except that, without in
any way limiting the definition of Low Density Flash,
PTEC products shall not be subject to the lifetime
buy order deadline of January 1, 1999 set forth in
the definition of Low Density Flash.
Without limiting the above in any way, the definition
of each of Field Memory and PTEC shall include, but not be
limited to, any such product as it may be modified from time
to time after the Closing to address customer-requested design
changes and manufacturing maintenance requirements, provided
such modified product is consistent in general form,
functionality and operation with the specific products
identified above in the pertinent definitions.
Section 40. Section 6.31(a) of the Acquisition Agreement is amended by
deleting Section 6.31(a) in its entirety and replacing it with the following:
(a) For purposes of this Agreement, including
Sections 2.1 and 2.2 hereof, "Transferred Contracts" shall
mean each Contract to which Seller, any of its Subsidiaries or
any of their Affiliates is a party primarily related to or
primarily used in the Business (i) that was entered into in
the ordinary course of business consistent with past practices
and not of a type required to be listed in the Seller
Disclosure Letter pursuant to Section 4.1 or 4.2 hereof, or
(ii) listed on Schedule 6.31 to this Agreement (the
"Transferred Contract Schedule"). The Transferred Contract
Schedule shall be prepared by Buyer and delivered to Seller on
or prior to the Closing Date and upon delivery thereof, such
schedule shall become a part of this Agreement as if attached
hereto as of the date hereof.
Section 41. Section 7.1(b) of the Acquisition Agreement is amended by
deleting subclause (i) thereof in its entirety and replacing it with the
following:
there are not pending or threatened any audits, examinations,
assessments, asserted deficiencies or written claims for Taxes
except as would not adversely affect the Acquired Assets or
the Business
Section 42. Section 7.1(c) of the Acquisition Agreement is amended
by adding, at the end thereof, the following:
, including, but not limited to, a "Section 24" election
under the tax laws of Singapore.
Section 43. Section 7.1(e) of the Acquisition Agreement is amended by
deleting the parenthetical phrase at the end thereof and replacing it with the
following:
(other than Seller with respect to Taxes not related to or
adversely affecting the Business or the Acquired Assets).
Section 44. Article VII of the Acquisition Agreement is amended by
adding, immediately following Section 7.1(o), new Sections 7.1(p) and 7.1(q)
as set forth below:
(p) Seller owns all right, title and interest in
and to all of the issued and outstanding capital stock of
Singapore Newco and Seller is the registered owner of such
shares.
(q) Seller has caused Italian Operating Company to
sell, transfer, assign and deliver to Seller, and Seller has
purchased and accepted, all right, title and interest in and
to all of the quota of Italian Newco; the purchase price for
such quota was $301,087,000; appropriate steps have been taken
to document the transfer of such sale to Seller and Seller is
the beneficial and equitable owner of such quota and, after
the making of any appropriate filings and registrations, will
be the registered owner of such quota; and Seller has caused
Italian Operating Company to assign, transfer, and deliver to
Italian Newco the "Plafond" certification of Italian Operating
Company and Italian Newco has accepted such assignment,
transfer, and delivery and such "Plafond" certification is in
full force and effect as of the date hereof.
Section 45. Section 8.1(a) of the Acquisition Agreement is amended
by deleting, in its entirety, the following:
Notwithstanding the foregoing sentence, Italian Operating
Company employees employed in the Business who are on
maternity, disability or other employer-approved leave of
absence as of the Closing Date shall only have their
employment transferred as of the date, if any, upon which they
return to work at Buyer's facility. From the Closing Date
until the earlier to occur of (x) completion of the Italian
government's final audit relating to the 1989 Program
Contract, or (y) eighteen (18) months after the Closing Date,
Buyer shall cause employment levels in Italian Newco to remain
substantially equivalent to the level of employment as of the
Closing Date; provided, however, that Italian Newco shall be
entitled to terminate Italian Newco employees for good reason
and shall be allowed to reduce employment levels through
Italian Newco employee attrition; provided, further, that in
all events Buyer shall cause Italian Newco to maintain levels
of employment consistent with the minimum requirements under
the 1989 Program Contract (i.e. 1,270 employees) during such
period.
Section 46. Section 8.1(b) of the Acquisition Agreement is amended
by deleting, in its entirety, the following:
Notwithstanding the foregoing sentence, Singapore Operating
Company employees employed in the Business who are on
maternity, disability or other employer-approved leave of
absence as of the Closing Date shall only have their
employment transferred as of the date, if any, upon which
they return to work at Buyer's facility.
Section 47. Section 8.1(c) of the Acquisition Agreement is amended to
delete "(e)" immediately after the phrase "set forth in Section 8.1" in line 2.
Section 48. Section 8.2(a) of the Acquisition Agreement is amended by
deleting Section 8.2(a) in its entirety and replacing it with the following:
(a) On the Closing Date, and thereafter while
employed by Italian Newco, each Transferred Business Employee
employed by Italian Newco shall continue, at Buyer's cost, to
be covered by the Employee Benefit Plans under which they
were covered immediately prior to the Closing Date that were
established, maintained and sponsored solely at the Italian
Operating Company level to the extent permitted by law and
contract. On and after the Closing Date, Transferred Business
Employees employed by Singapore Newco ("Singapore Transferred
Business Employees") shall continue, at Buyer's cost, to be
covered by the following Seller's Employee Benefit Plans
through December 31, 1998: Group Term Life Insurance, Group
Personal Accident Insurance, Group Hospitalization and
Surgical Insurance, Major Medical Insurance and Workmen's
Compensation Insurance. Except as set out in the immediately
preceding sentence, Seller agrees to use commercially
reasonable efforts to cause Singapore Operating Company to
transfer the Employee Benefit Plans under which Singapore
Transferred Business Employees were covered. immediately
prior to the Closing Date to Singapore Newco.
Section 49. Section 8.2(b) of the Acquisition Agreement is amended
by deleting the following:
; provided, however, that with respect to Transferred Business
Employees located in Texas ("Texas Transferred Business
Employees"), Buyer may elect in writing to Seller, but not
less than thirty (30) days prior to the Closing Date (the
"Buyer COBRA Election"), not to cover such employees under
Buyer's group health and dental plans and instead require
Seller to offer COBRA continuation coverage to the Texas
Transferred Business Employees, with Buyer subsidizing the
employees' cost of COBRA coverage of the Texas Transferred
Business Employees who elect to receive COBRA coverage in
the same dollar amount as Buyer subsidizes the premium
payments of Buyer's similarly situated U.S. employees
under Buyer's group health and dental plans. In the
event Buyer elects to xxx the Buyer COBRA Election, Buyer
agrees to cover such Texas Transferred Business Employees
as are still employed by Buyer under Buyer's group health
and dental plans no later than January 1, 2000.
Section 50. Section 8.2(d) of the Acquisition Agreement is amended by
adding the phrase "and COBRA" immediately following the phrase "(HIPAA)".
Section 51. Section 8.3 of the Acquisition Agreement is amended by
deleting Section 8.3 in its entirety and replacing it with the following:
8.3 General Matters.
(a) Crediting of Service. Buyer, Italian Newco and
Singapore Newco, as appropriate, shall credit each Transferred
Business Employee with all service with Seller and its
Affiliates prior to the Closing Date and with all amounts
paid to each such Transferred Business Employee prior to the
Closing Date to the extent that service or pay is relevant
under any Employee Benefit Plan of Buyer, Italian Newco or
Singapore Newco for purposes of determining eligibility to
participate, vesting and benefit accrual.
(b) Credit of Deductible and Co-Payment Expenses.
Buyer shall also provide Transferred Business Employees with
credit under Buyer's Medical Plan and Dental Plan for
deductible and co-payment amounts made by Transferred Business
Employees under Seller's Medical and Dental Plans prior to
the Closing Date in the plan years in which the Closing Date
occurs. Seller agrees to provide deductible and co-payment
information with respect to the Transferred Business Employees
as soon as it practicable following the Closing Date to
effectuate such crediting of deductibles and co-payment
amounts. Seller agrees to provide Buyer with service
commencement date and prior compensation information with
respect to each potential Transferred Business Employee as
soon as practicable after the date upon which this Agreement
is executed.
(c) Pre-Existing Condition Limitation. Buyer shall
provide Transferred Business Employees with credit under
Buyer's Medical Plan pre-existing condition limitation for
time spent on Seller's Medical Plan.
(d) Cooperation. Commencing with the date upon
which this Agreement is executed, Seller and Buyer agree to
cooperate fully with respect to the employment-related actions
which are necessary or reasonably desirable to accomplish
the transactions contemplated pursuant to this Agreement,
including the provision of records and information as each
may reasonably request (including job titles, short and
long-term disability coverage, life insurance coverage,
operator certification and workers' compensation records and
information) and the making of all appropriate filings under
the Law.
Section 52. Section 8.5(d) of the Acquisition Agreement is amended by
replacing the word "whom" with the word "who".
Section 53. Sections 9.2(b), 9.2(c) and 9.2(g) are amended by
deleting Sections 9.2(b), 9.2(c) and 9.2(g) in their entirety and replacing
them with the following:
(b) JV Amendments. The JV Amendments shall be duly
executed, delivered, in full force and effect and the
transactions contemplated to occur on or prior to the Closing
in accordance with the terms thereunder shall have occurred on
or prior to the Closing Date.
(c) Transition Services Agreement. Each Transition
Services Agreement shall have been duly executed and delivered
by Seller and shall be in full force and effect.
(g) Financing. TECH shall have received financing in
an aggregate amount of $450 million on terms and conditions
satisfactory to Buyer.
Section 54. Section 9.2 of the Acquisition Agreement is amended by
adding, immediately following Section 9.2(k), new Section 9.2(1) as follows:
(l) Statutory Declaration. Buyer shall have
received the Statutory Declaration as defined under
Singapore Law.
Section 55. Sections 9.3(b) and 9.3(c) are hereby amended by
deleting Sections 9.3(b) and 9.3(c) in their entirety and replacing them with
the following:
(b) JV Amendments. The JV Amendments shall be duly
executed, delivered, in full force and effect and the
transactions contemplated to occur on or prior to the Closing
in accordance with the terms thereunder shall have occurred
on or prior to the Closing Date.
(c) Transition Services Agreement. Each Transition
Service Agreement shall have been duly executed and delivered
by Buyer and shall be in full force and effect.
Section 56. Section 10.2(c) is amended to add, immediately after
"(B)" in line 3 before the reference to "10.2(a)(iii)" the following:
, arising under Section
Section 57. Article X is amended by adding, immediately following
Section 10.11, new Sections 10.12 and 10.13 as follows:
10.12 Exclusive Remedy. The indemnification
provisions of this Article X shall be the exclusive remedy
available to any party hereto with respect to monetary damages
in the event of any breach by any other party hereto of any
representation, warranty, covenant or agreement set forth in
this Agreement (other than any actions under Section 12.2
below).
10.13 Singapore Real Property Indemnification. Seller
hereby agrees to indemnify, defend and hold harmless the
Indemnified Buyer Group from and against, for, and in respect
of any and all Claims and Losses asserted against, arising out
of, relating to, imposed upon or incurred by any member of the
Indemnified Buyer Group, directly or indirectly, by reason
of or resulting from any delay or refusal by the Jurong Town
Corporation (a body corporate incorporated under the Jurong
Town Corporation Act and located in Xxxxxx Xxxx Xxxx, Xxxxxx
Xxxx Xxxx Xxxx, Xxxxxxxxx)("XXX") to issue a lease upon the
amalgamation of the lots comprising each of the Singapore
Properties (defined below), to the extent arising from, or in
connection with any failure or delay, prior to the Closing
Date, by the Seller, or any of its affiliates or TECH, to
carry out any action, or take any step required by any of
the covenants, stipulations and conditions contained in, or
implied into, any of the written agreements, deeds, or
instruments between JTC and any member of the Seller Group
(collectively, the "Title Documents") as necessary to cause
such lease to be issued in respect of, or relating to, the
following properties (hereinafter "Singapore Properties"):
(A) The whole of Lot 1740 Town Subdivision 17
(also known as Private Lots A1627 and A1627
(a)) together with the buildings erected
thereon and known as 000 Xxxxxxxxx Xxxx,
Xxxxxxxxx; and
(B) The whole of Lot 2801 (also known as Private
Lot 12408) and Xxx 0000 (xxxx xxxxx xx
Xxxxxxx Xxx 00000(x)) both of Mukin 13
together with the buildings erected thereon
and known as Xx. 0 Xxxxxxxxx Xxxxxxxxxx Xxxx
X Xxxxxx 1;
For the purposes of this Agreement, the term "Governmental
Agency" shall be defined to include the Jurong Town
Corporation. For purposes of this Agreement, Seller's
indemnification obligation under this Section 10.13 shall be
treated as a "Buyer Indemnified Claim" and shall be subject
to the Threshold Amount and Maximum Amount set forth in
Section 10.2(b) hereof.
The indemnification obligation set forth in this Section
10.13 shall in any event expire with respect to each of the
Singapore Properties on the day that is thirty (30) days
following the date of the issuance by the JTC of a lease to
a member of the Indemnified Buyer Group for such property.
Section 58. Section 11.1 of the Agreement is amended by deleting
Section 11.1 in its entirety and replacing it with the following:
11.1 Intentionally Omitted.
Section 59. Article XII of the Acquisition Agreement is amended to
add, immediately following Section 12.13, new Section 12.14 as follows:
12.14 Royalty Bearing Products. Buyer and Seller
hereby agree that the term "Royalty Bearing Products" as
defined in Section 1.18 of the previous Semiconductor Cross
License between Buyer and Seller having an effective date of
January 1, 1994 (the "Previous Cross-License"), the term of
which and the respective licenses granted under which expire
December 31, 1998, shall not include any product manufactured
at any facility transferred by Seller to Buyer pursuant to
this Agreement, and that the term "Net Sales Billed" as
defined in Section 1.20 of the Previous Cross-License shall
not include any revenues of any kind derived as a result of
Buyer's operation of the Business or any of the Acquired
Assets.
Section 60. Seller agrees promptly following the Closing, but in no
event later than 16 days after the date hereof, to supplement and reformat
Section 4.1(e) of the Seller Disclosure Letter, as reasonably requested by
Buyer, to be fully responsive to the requirements of Section 4.1(e) of the
Agreement and Buyer agrees to negotiate such supplements and reformatting in
good faith.
Section 61. THIS SECOND AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT
TO THE PRINCIPLES GOVERNING CONFLICTS OF LAW.
IN WITNESS WHEREOF, the undersigned have caused this Second Amendment
to be executed as of the date first above written.
MICRON TECHNOLOGY, INC.
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chairman of the Board of Directors,
Chief Executive Officer and President
TEXAS INSTRUMENTS INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Senior Vice President, Treasurer
and Chief Financial Officer
EXHIBIT A
Description of Acquired Assets and Excluded Assets
Acquired Assets:
The term "Acquired Assets" means all assets, properties and rights of
Seller, its Subsidiaries or any of their Affiliates primarily related to or
primarily used in the Business (excluding the Excluded Assets), including the
following:
1. All of the capital stock of Italian Newco;
2. All of the capital stock of Singapore Newco;
3. All of the assets of Twinstar;
4. All Owned Facilities;
5. All tangible personal property assets (i) relating to research
and development, marketing, and administrative functions of
the Business located in: Dallas, Texas; Houston, Texas; Italy;
Singapore and (ii) primarily used by employees of the Business
and employed by Buyer after giving effect to the transactions
contemplated hereby;
6. All of the capital stock in TECH and KTI owned by Seller or any
Affiliate of Seller;
7. The Singapore Newco Note and the related Loan Agreement;
8. All rights under all Transferred Contracts;
9. Wherever located, all inventory to the extent primarily
relating to or primarily used in the Business (including any
finished goods related to Texas Instruments-Acer
Incorporated);
10. All Acquired Intellectual Property including all tangible
embodiments of such Acquired Intellectual Property;
11. All assets identified on the MMP CARS report included in
Section 4.1(e) to the Seller Disclosure Letter and the other
assets identified as Acquired Assets in Section 4.1(e) to the
Seller Disclosure Letter;
12. All software and computer programs owned by the Seller primarily
related to or primarily used in the Business; and
13. Any other assets specified by Buyer and agreed to by Seller in
writing.
For purposes of this Agreement, Acquired Assets shall also include
all assets, properties and rights of Seller, its Subsidiaries or any of their
Affiliates with respect to the operations and business of Italian Operating
Company and Singapore Operating Company, and each of their Subsidiaries,
primarily related to or primarily used in the Business (excluding Excluded
Assets), including those assets of the nature set forth in 1 to 13 above.
Excluded Assets:
The term "Excluded Assets" means the following:
1. Cash or cash equivalents;
2. Patents and patent applications issued or filed prior to Closing;
3. Rights of Seller under patent license agreements with third
parties;
4. The words and name "Texas Instruments Incorporated," "Texas
Instruments" and "TI," and Seller's related monograms, logos,
trademarks and trade names;
5. Rights under loan agreements and related notes with respect to
outstanding loans by Seller and/or its Affiliates;
6. Insurance policies issued pursuant to or under Seller
corporate-wide plans, any claims thereunder and any prepaid
expenses with respect to such excluded policies;
7. The Transition Agreement;
8. Co-development and technology transfer agreements with Hitachi
and Mitsubishi;
9. Any land, building and/or facilities other than all of the
land, buildings and facilities located at, or primarily used
in connection with operations at, Avezzano, Twinstar and
Singapore A/T sites (collectively, "Acquired Facilities");
10. Any mainframe, network or server equipment, other than network
or server equipment (i) used exclusively in the Business, (ii)
located at any of the Acquired Facilities or (iii) located at
any building, facility or office primarily relating to or
primarily used in the Business;
11. Rights under the TI Undertaking, dated November 15, 1995,
between Seller, TECH and Citicorp Investment Bank (Singapore)
Limited with respect to the return of money placed in escrow
by Seller pursuant thereto;
12. Any intercompany receivable, loan or other account that is an
asset of a member of the Seller Group or a subsidiary to the
extent the obligation to pay such receivable, loan or other
account is an obligation of a member of the Seller Group or a
subsidiary that is an Excluded Liability (other than receivables
of Italian Operating Company payable by Singapore Operating
Company where the corresponding payables constitute Assumed
Liabilities and receivables of Italian Operating Company
payable by Seller of up to U.S. $10,000,000 in the aggregate
where the corresponding payables constitute Assumed
Liabilities, provided, with respect to such receivables, the
receivables and the corresponding payables are eliminated
through consolidation on the Closing Balance Sheet);
13. (a) All equipment (except for tangible personal
property such as personal computers and workstations
primarily used by employees of the Business hired by
Buyer as contemplated hereby) located at any of the
following locations:
Xxxxx Building (KFAB) (Design & R&D/Productization/
wafer fab)
Stafford II (Houston) (QRA/Failure Analysis
Laboratory)
Executive Center I, II, (Administration)
III
(b) All equipment located at the Xxxxx Road South site
except for Test Technology Center (TTC) inventory,
testers and equipment primarily used in memory tester
development and manufacturing, and tangible personal
property such as personal computers and workstations
primarily used by employees of the Business hired by
Buyer as contemplated hereby;
(c) All equipment located at any of the following
locations except for tangible personal property such
as personal computers and workstations primarily used
by employees of the Business hired by Buyer of the
Business as contemplated hereby:
Forest Lane (Design & R&D/Production/
Administration)
East Building/DP1 (Design & R&D/Productization/wafer
fab/Failure Analysis lab)
DMOS 6 (Design & R&D/Productization/wafer
fab)
Xxxxxxxx I (Sales/Marketing/Administration)
(d) All assets located at any of the following locations:
Bangalore, India Design center
Miho, Japan Wafer fab and design engineering test
Shibaura, Tokyo, Japan Marketing, PDE, administration
Hsinchu, Taiwan Product and Design Engineering
Lubbock (LMOS) 6" wafer fab (EPROM and Flash production)
Security Building Calibration Laboratory
Local sales offices
Midland-Odessa military memory operation
Hiji, Japan (Assembly/Test)
Taipei, Taiwan (Military Memory)
(e) All tangible personal property associated with
personnel not hired by Buyer (other than any assets
on the June 30, 1998 MMP CARS report), other than any
property located at any of the Acquired Facilities,
provided that tangible personal property associated
with certain administrative and marketing personnel
located in Singapore that are not to be hired by
Buyer as agreed by Buyer and Seller shall be
considered Excluded Assets;
(f) Assets listed on Attachment 1 to this Exhibit A.
Notwithstanding anything herein to the contrary, other than as
provided in clause 13(d), 13(e) or 13(f) above, none of the
assets listed on the MMP CARS report as of June 30, 1998 or
which based on the methodology used to generate such June 30
report should have been included on such report (including any
such assets that would or should have been included on such
report if no materiality cut-off had been applied in
generating such report) and all assets that would or should be
included on such a report generated as of the Closing Date
based on the original methodology (without regard to
materiality) shall be Excluded Assets.
For purposes of the definition of Excluded Assets, references
to "located at" shall mean located at the referred to facility
as of the date hereof;
14. Tax assets that (i) would be properly classified as a current
asset if required to be included in the Closing Balance
Sheet), (ii) constitute VAT-related receivables (except for
VAT amounts which are included in trade accounts receivable
and not separately identifiable), or (iii) constitute a refund
or credit of Seller's Taxes.
15. Receivables and inventory (including work-in-progress)
primarily related to the following: 1-meg and 4-meg DRAM,
field memory (ASM), custom flash (PTEC), EPROM/OTP, Flash or
military memory products, other than (i) work-in-progress for
4-meg DRAM products manufactured in Avezzano, (ii)
assembly/test work-in-progress (excluding chip WIP) inventory
in Singapore primarily used to perform assembly/test services
for Seller, and (iii) raw materials in Singapore primarily
used to perform assembly/test services for Seller;
16. Receivables not specifically identifiable as primarily related
to the Business;
17. Grants receivable relating to the 1989 Program Contract or
related to productivity improvement programs in Singapore (IDS);
18. Loan agreement providing for loans by Seller or its Affiliates
to KTI and the loans thereunder and any promissory notes
evidencing such loans;
19. The following specific receivables: MGV (US/Europe) and MPS
(Singapore);
20. Slices, spares, chemicals and other materials and inventory
located at the Twinstar site which Buyer and Seller have
agreed to transfer to, or be retained by, Seller and the value
of which has been credited to Seller for purposes of
determining Shutdown Costs as evidenced by the summary of such
costs delivered by Seller to Buyer pursuant to Section 6.23;
21. Any other assets specified by Buyer and agreed to by Seller in
writing.
EXHIBIT B
Description of Assumed Liabilities and Excluded Liabilities
Assumed Liabilities:
"Assumed Liabilities" means the following, and only the following,
specific Liabilities of the Seller Group, other than Excluded Liabilities:
1. Liabilities (other than Tax Liabilities) existing immediately prior
to the Closing (the "Effective Time") to the extent reflected as
a Liability on the Closing Balance Sheet or reserved for in an
identified reserve on such Closing Balance Sheet, but only to
the extent of the obligation to make payment of any item so
reflected or reserved for;
2. The Singapore Newco Note and related Loan Agreement;
3. The payables corresponding to the receivables of Italian Operating
Company referred to in clause 12 of the definition of Excluded
Assets;
4. All Liabilities (other than Excluded Liabilities) solely with
regard to conditions or events occurring after the Effective
Time arising under or pursuant to Transferred Contracts;
5. All accrued paid time off for Transferred Business Employees
pursuant to Section 8.5(a) of this Agreement; and
6. Any other Liability specified by Buyer and agreed to by Seller in
writing.
For purposes of this Agreement, Assumed Liabilities shall also
include the specific Liabilities of Italian Operating Company and Singapore
Operating Company of the type described in clauses 1 through 6 above.
Excluded Liabilities:
"Excluded Liabilities" means all liabilities, other than Assumed
Liabilities, including the following liabilities of Seller, the Seller Group,
Subsidiaries, any Affiliates thereof, or otherwise related to the Business or
the Acquired Asset (except non-Tax Liabilities to the extent reflected as a
liability on the Closing Balance Sheet or reserved for in an identified
reserve on the Closing Balance Sheet, but only to the extent of the
obligation to make payment of any item so reflected or reserved for):
7. Any Liabilities under and pursuant to any agreement on account of
monies owed or owing on or prior to the Effective Time or
liabilities accruing thereunder prior to the Effective Time;
8. All Liabilities with respect to Contracts which are not Transferred
Contracts;
9. Transfer Taxes;
10. Seller's Taxes;
11. Any Liability or obligation arising out of or in any way relating
to or resulting from any product sold on or prior to the
Effective Time (including any liability for product returns or
for claims made for injury to person, damage to property or
other damage, whether made in product liability, tort, breach
of warranty or otherwise);
12. Any Liability with respect to any claim asserted after the
Effective Time where the conduct giving rise to such claim
first occurred prior to the Effective Time;
13. Any Liability with respect to any suits, actions, claims or
proceedings pending against Seller, its Subsidiaries or any of
its Affiliates to the extent any such suits, actions, claims
or proceedings exist on or prior to the Effective Time or
relate to events, circumstances, conduct or transactions
occurring or existing at or prior to the Effective Time except
to the extent expressly included as an Assumed Liability;
14. Any Liability to a third party for infringement or other violation
under Intellectual Property or other proprietary rights,
including, but not limited to, claims arising out of the
manufacture, use, offer for sale, import or sale of goods,
devices or apparatus, the performance of any process or
services, or the copying, modifying, distributing, performing
or displaying of any work or mask work, to the extent such
claims relate to events, circumstances, conduct or
transactions occurring or existing at or prior to the
Effective Time;
15. Any Liabilities, incurred by any member of the Seller Group in
connection with performing its obligations under this
Agreement or in consummating the transactions contemplated
hereby except to the extent Buyer has expressly agreed to pay
a third party or reimburse Seller on this Agreement;
16. Any Liabilities for any breach or failure to perform any covenants
and agreements contained in, or made pursuant to, this
Agreement, or, on or prior to the Effective Time, any other
Contract, whether or not assumed hereunder, including any
breach arising from assignment of Contracts hereunder without
consent of third parties;
17. Liabilities for any violation of or failure to comply with any Law,
to the extent such violations or failures relate to events,
circumstances, conduct or transactions occurring or existing
at or prior to the Effective Time;
18. All Retained Environmental Liabilities;
19. The Transition Agreement;
20. All Liabilities under Title IV of ERISA or Section 412 of the Code
or any plan or contract governed thereby;
21. All Liabilities arising in connection with indebtedness relating
to the Avezzano facility, including the loans and related
agreements referred to in Exhibit J;
22. Any Liabilities with respect to the 1989 Program Contract or any
subsidies pursuant thereto; and
23. Any other Liability specified by Buyer and agreed to by Seller in
writing.
