Stock Purchase Agreement - Apple Computer Inc. and SCI Systems Inc.
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
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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
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(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:
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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.
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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.
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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;
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(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.
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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,
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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
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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.
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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
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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
<PAGE>
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:
<PAGE>
(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.
<PAGE>
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)
<PAGE>
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
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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
<PAGE>
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.
<PAGE>
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.
<PAGE>
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
<PAGE>
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 Cheif Executive Officer
<PAGE>
Exhibit A
Legal Description of Real Property
Parcel One
Lot 1, Block 1, COTTONWOOD PARK, COUNTY OF EL PASO, STATE OF COLORADO,
EXCEPT THAT PARCEL OF LAND CONVEYED TO THE STATE DEPARTMENT OF HIGHWAYS BY
DEED RECORDED NOVEMBER 18, 1987, IN BOOK 5446 AT PAGE 626.
Parcel Two
A PORTION OF THE SOUTHWEST QUARTER OF SECTION 31 TOWNSHIP 15 SOUTH RANGE 65
WEST OF THE 6TH P.M., IN THE CITY OF FOUNTAIN, EL PASO COUNTY, COLORADO,
MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHWEST CORNER
OF "COTTONWOOD PARK" AS RECORDED IN PLAT BOOK Z3 AT PAGE 22 OF THE RECORDS
OF SAID EL PASO COUNTY, SAID NORTHWEST CORNER BEING ALSO THE NORTHWEST
CORNER OF SECTION 6 TOWNSHIP 16 SOUTH RANGE 65 WEST OF THE 6TH P.M. AND A
POINT ON THE SOUTH LINE OF AFORESAID SECTION 31; THENCE NORTH 90 DEGREES 00
MINUTES 00 SECONDS WEST ALONG SAID SOUTH LINE OF SECTION 31 A DISTANCE OF
179.30 FEET TO A POINT ON THE EASTERLY RIGHT-OF-WAY LINE OF INTERSTATE
HIGHWAY 25; THENCE NORTHWESTERLY ALONG SAID EASTERLY LINE AND ON A CURVE TO
THE RIGHT, WITH A RADIUS OF 5580.00 FEET, A CENTRAL ANGLE OF 02 DEGREES 05
MINUTES 40 SECONDS, THE LONG CHORD OF WHICH BEARS NORTH 14 DEGREES 52
MINUTES 01 SECONDS WEST 203.96 FEET, AN ARC DISTANCE OF 203.97 FEET; THENCE
NORTHERLY ALONG THE EASTERLY LINE OF THE ROAD RIGHT-OF-WAY DEEDED TO THE
CITY OF FOUNTAIN BY A DEED RECORDED IN BOOK 5546 AT PAGE 202 OF EL PASO
COUNTY RECORDS, AND ON A CURVE TO THE RIGHT, WITH A RADIUS OF 703.82 FEET,
A CENTRAL ANGLE OF 10 DEGREES 34 MINUTES 18 SECONDS, A LONG CHORD BEARING
NORTH 02 DEGREES 42 MINUTES 44 SECONDS WEST 129.68 FEET, AN ARC DISTANCE OF
129.86 FEET TO A POINT OF REVERSE CURVE; THENCE CONTINUING ALONG EASTERLY
LINE OF SAID RIGHT-OF-WAY AND ON A CURVE TO THE LEFT, WITH A RADIUS OF
1290.46 FEET, A CENTRAL ANGLE OF 12 DEGREES 00 MINUTES 39 SECONDS, A LONG
CHORD BEARING NORTH 03 DEGREES 25 MINUTES 55 SECONDS WEST 270.02 FEET, AN
ARC DISTANCE OF 270.52 FEET TO A POINT ON THE WESTERLY LINE OF AFORESAID
SOUTHWEST QUARTER OF SECTION 31; THENCE NORTH 00 DEGREES 42 MINUTES 38
SECONDS WEST 724.79 FEET TO THE NORTHWEST CORNER OF THE SOUTHWEST QUARTER
OF THE SOUTHWEST QUARTER OF SAID SECTION 31; THENCE SOUTH 89 DEGREES 55
MINUTES 05 SECONDS EAST ALONG THE NORTHERLY LINE OF SAID SOUTHWEST QUARTER
OF THE SOUTHWEST QUARTER ADISTANCE OF 983.84 FEET TO THE NORTHWEST CORNER
<PAGE>
OF THAT TRACT CONVEYED TO EL PASO COUNTY BY DEED RECORDED IN BOOK 5591 AT
PAGE 1175 OF SAID EL PASO COUNTY RECORDS; THENCE SOUTHERLY AND EASTERLY
ALONG THE WESTERLY LINE OF SAID TRACT THE FOLLOWING 6 COURSES:
(1) SOUTH 32 DEGREES 02 MINUTES 03 SECONDS EAST 43.52 FEET;
(2) SOUTH 62 DEGREES 59 MINUTES 37 SECONDS EAST 853.07 FEET;
(3) SOUTH 13 DEGREES 34 MINUTES 30 SECONDS EAST 309.39 FEET;
(4) SOUTH 14 DEGREES 07 MINUTES 12 SECONDS WEST 271.44 FEET;
(5) SOUTH 21 DEGREES 36 MINUTES 21 SECONDS WEST 225.45 FEET;
(6) SOUTH 00 DEGREES 00 MINUTES 21 SECONDS EAST 119.84 FEET TO A POINT ON
THE SOUTH LINE OF SAID SECTION 31, SAID POINT BEING ALSO ON THE NORTH LINE
OF AFORESAID "COTTONWOOD PARK" AND THE NORTH LINE OF AFORESAID SECTION 6;
THENCE NORTH 90 DEGREES 00 MINUTES 00 SECONDS WEST ALONG SAID LINE 1429.21
FEET TO THE POINT OF BEGINNING, EXCEPT THAT TRACT CONVEYED TO THE UNITED
STATES GOVERNMENT BY A DEED RECORDED OCTOBER 29, 1976 IN BOOK 2870 AT PAGE
551 OF SAID EL PASO COUNTY RECORDS. TOGETHER WITH A BENEFICIAL EASEMENT
FOR UTILITY AND DRAINAGE PURPOSES AS SET FORTH IN INSTRUMENT RECORDED
JANUARY 3, 1989 IN BOOK 5592 AT PAGE 613.
<PAGE>
Exhibit B
List of Personal Property (Including Spare Parts)
[To be inserted]
<PAGE>
Exhibit C
List of Initial Inventory
[To be inserted]
128
<PAGE>
Exhibit D
List of Assigned Permits
[To be inserted]
<PAGE>
Exhibit E
List of Assigned Contracts
Vendor: Visiting Nurses Association, 1520 North Union Blvd., Colorado
Springs, Colorado
Re: Occupational Health Nursing Services
Vendor: PRAXAIR, INC., 39 Old Ridgebury Road, Danbury, Connecticut 06810-
5113
Re: nitrogen gas (in cylinders) supplier
Vendor: RUST Environment & Infrastructure, Inc., 6143 South Willow Drive,
Suite 200, Englewood, Colorado 80111-5123
Re: EH&S consulting services
Vendor: Marriott Corporation, 645 Carved Terrace, Colorado Springs,
Colorado 80919
Re: Food services (cafeteria), vending machines
Vendor: Servicemaster All Cleaning, Inc., 2123 E. St. Vrain, Colorado
Springs, Colorado 80909
Re: Janitorial supplies and janitorial services
Vendor: APS, 2121 Academy Circle, Suite 204, Colorado Springs, Colorado
80909
Re: Security services at site
Vendor: Perfection, Inc., 7646 Stampede Drive, Colorado Springs, Colorado
80920
Re: Landscape maintenance
<PAGE>
Exhibit F
Allocation of Purchase Price
Real Property $ 14,000,000 [estimated]
Personal Property $ 21,000,000 [estimated]
Spare Parts $ 500,000 [estimated]
Initial Inventory $ 160,000,000
<PAGE>
Exhibit G
Form of Bill of Sale
[To be inserted]
<PAGE>
Exhibit H
Form of Assignment and Assumption Agreement
[To be inserted]
<PAGE>
Exhibit I
Schedule of Environmental/OSHA Matters
[To be inserted]
<PAGE>
Exhibit J
List of Related Agreements
Manufacturing Agreement
Employee Agreement
Intellectual Property Agreement
Information Services Agreement
Transition Services Agreement
Letter of Credit Agreement