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EXHIBIT 2.4
PROJECT OPERATIONS AGREEMENT
BY AND BETWEEN
INTERNATIONAL BUSINESS MACHINES CORPORATION
AND
MULTILAYER TEK L.P.
_______, 1997
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TABLE OF CONTENTS
RULES OF CONSTRUCTION
ARTICLE 1. DEFINITIONS/GLOSSARY
ARTICLE 2. MANAGEMENT OF THE COMPLEX
Section 2.1 Management of the Complex
Section 2.2 Utilities, Services and Access Roads
Section 2.3 Gift Policy
Section 2.4 Labor Harmony
ARTICLE 3. PAYMENT OF OPERATING EXPENSES/CHARGES
Section 3.1 Approved Budget
Section 3.2 Expenses and Charges
Section 3.3 Annual Statement; Reconciliation
Section 3.4 Audit; Cost of Audit
Section 3.5 Tax on Expenses/Charges
Section 3.6 Regulated Services
ARTICLE 4. UTILITY METERS
Section 4.1 Pricing
Section 4.2 Meter Readings
Section 4.3 Meter Calibration and Adjustment
Section 4.4 Failure of a Meter
ARTICLE 5. INSURANCE
Section 5.1 Liability Insurance
Section 5.2 Casualty Insurance
Section 5.3 Liability Insurance
Section 5.4 Waiver of Claims and Subrogation
ARTICLE 6. DISPUTE RESOLUTION; DEFAULT
Section 6.1 Initiation of Dispute Resolution
Section 6.2 Mediation
Section 6.3 Pending Resolution
Section 6.4 Events of Default
Section 6.5 Remedies
Section 6.6 Attorneys Fees; Jury Trial
Section 6.7 Limitation on Subcontractor/Consultant
Liability
ARTICLE 7. TERM
ARTICLE 8. RESTRICTIONS
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Section 8.1 Uses
Section 8.2 Signs
Section 8.3 Rules and Regulations
Section 8.4 Compliance with Laws
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TABLE OF CONTENTS
ARTICLE 9. RIGHT OF FIRST OPPORTUNITY
Section 9.1 First Opportunity
Section 9.2 Continuing Right
Section 9.3 IBM Affiliate
Section 9.4 Third Party Offer
Section 9.5 Termination
Section 9.6 Successors and Assigns
Section 9.7 Financing/Refinancing
ARTICLE 10. INDEPENDENT UTILITIES/SERVICES - SUBDIVISION
ARTICLE 11. MISCELLANEOUS
Section 11.1 Notices
Section 11.2 Estoppel Certificates
Section 11.3 Governing Law
Section 11.4 Entire Agreement; Amendments
Section 11.5 Transfers
Section 11.6 Severability
Section 11.7 Binding Effect
Section 11.8 Separate Agreement
Section 11.9 No Third Party Beneficiary
Section 11.10 Force Majeure
Section 11.11 No Warranties
Section 11.12 No Waiver
ARTICLE 12. THE DII GROUP, INC. GUARANTEE
Exhibit A Description of the IBM Property
Exhibit A1 Description of the Multek Site
Exhibit B Services Agreement
Exhibit C Sign Criteria
Exhibit D Rules and Regulations
Exhibit E Holidays
Exhibit F 1997/1998 Approved Budget
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PROJECT OPERATIONS AGREEMENT
This Agreement (hereinafter the "Agreement"), is made as of ______, 1997,
by and between INTERNATIONAL BUSINESS MACHINES CORPORATION ("IBM") a New York
corporation, having its principal office at ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and
MULTILAYER TEK L.P. ("Multek") a Texas limited partnership, having its principal
office at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
WITNESSETH:
WHEREAS, IBM is the owner of the Complex and has leased the Multek
Site, which is a portion of the Complex, to Multek; and
WHEREAS, it is the intention of the parties hereto that IBM sell the
Multek Site to Multek and Multek purchase the Multek Site from IBM, upon and
subject to the provisions of the Asset Purchase Agreement; and
WHEREAS, during the term of the Lease and subsequent ownership of the land
comprising the Multek Site by Multek, IBM will provide the Services described in
EXHIBIT B to Multek, and Multek shall provide the Services, also described in
EXHIBIT B, to IBM; and
WHEREAS, because the Multek Site shall remain an integral part of the
Complex by reason of Central Utility
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Services to be provided from a location off the Multek Site, the configuration
of the access roads, and economies of operations, IBM and Multek wish to
establish agreements for management of the entire Complex.
NOW, THEREFORE, IBM and Multek agree as follows.
RULES OF CONSTRUCTION
In this Agreement the singular includes the plural and the plural includes
the singular; "or" is not exclusive; a reference to an agreement or other
contract includes supplements, addenda and amendments thereto to the extent
permitted by this Agreement; a reference to the Law includes any amendment or
supplement to the same; all EXHIBITS hereto shall be considered a part of this
Agreement; accounting provisions have the meanings assigned to them by generally
accepted accounting principles and practices applied on a consistent basis; the
words "such as," "include," "includes," and "including" are not limiting; except
as specifically agreed upon in this Agreement, any right hereunder may be
exercised at any time and from time to time and all obligations hereunder are
continuing obligations throughout the Term; in calculating any time period, the
first day shall be excluded and the last day shall be included unless the last
day is a Saturday, Sunday or Holiday, and then it is also excluded; all days are
calendar days unless otherwise specified; words of masculine gender shall be
deemed and construed to include correlative words of the feminine and neuter
genders; and, when used herein with its initial letter capitalized, a word shall
be given the meaning assigned to it in this Agreement.
ARTICLE 1. DEFINITIONS/GLOSSARY
Accountant. An independent certified public accounting firm of
national reputation for quality and integrity which is mutually selected.
Affiliate. A Person controlled by IBM or DII Group, Inc., directly or
indirectly, through one or more intermediaries controlled or under common
control with one of them. The word control is intended to mean, in this context,
with respect to a Person that is a corporation, the right to exercise, directly
or indirectly, the number of
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voting shares of the controlled corporation necessary to possess the power to
direct or cause the direction of the management and policies of the controlled
corporation, and, with respect to a Person that is not a corporation, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of the controlled Person.
Approved Budget. Defined in Article 3.
Buildings. Those structures located on the Multek Site.
Central Utility System. The Utility System and Utility Plant located
at the Complex.
Closing Date. The date that IBM sells Multek the assets used for the
manufacture of panel circuit boards, including lease of the Multek Site pursuant
to the terms of the Lease.
Complex. The land designated "Lot 1" and "Lot 2" as more particularly
described in EXHIBITS A and A1, together with all improvements thereon, and as
shown on the Survey. The Complex includes the Multek Site and the IBM Property.
Consent. Written consent, which shall not be unreasonably withheld or
delayed, but which may be granted subject to reasonable conditions and
restraints.
Consumer Price Index. The Consumer Price Index for Urban Wage Earners and
Clerical Workers published by the Bureau of Labor Statistics of the United
States Department of Labor, All Items (1982-1984 = 100), or any successor index
thereto, appropriately adjusted; provided that if there shall be no successor
index and the parties shall fail to agree upon a substitute index within thirty
(30) days, or if the parties shall fail to agree upon the appropriate adjustment
of such successor or substitute index within thirty (30) days, a substitute
index or the appropriate adjustment of such successor or substitute index, as
the case may be, shall be determined by mediation pursuant to Article 6.
Force Majeure. Acts of God and organized or wildcat labor strikes or
lockouts which have the direct and
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immediate effect of preventing performance of an obligation set forth in this
Agreement; acts of the public enemy; insurrection; riot; sabotage; war;
government orders, moratoriums, curtailment of or interference with utility
supply, or restraints which usurp, temporarily or otherwise, the right to
construct, use or occupy any part of the Complex; those catastrophic
meteorological or geological events which have the direct and immediate effect
of preventing performance of an obligation set forth in this Agreement, or any
other event beyond the reasonable control of the party claiming such event.
Governmental Authorities. Local, state, federal or foreign court,
governmental or administrative agency or commission or other governmental
agency, authority, instrumentality or regulatory body.
Hazardous Substance. "Hazardous waste," "hazardous material,"
"pollutant" or "contaminant" and words of similar import including any
substance defined as such by any applicable Environmental Laws.
Holiday. State or federal holidays recognized as holidays by IBM and
Multek, consisting initially of those listed on EXHIBIT E and subject to
adjustment with the Consent of the other if they result in a shutdown or
curtailment of the Services to be provided each to the other pursuant to EXHIBIT
B hereto.
IBM Property. The land designated as "Lot 2," as more particularly
described in EXHIBIT A, together with all improvements thereon, and as partially
shown on the Survey.
IBM Service Charges. Defined in Section 3.1.
Impositions. Any ad valorem taxes, special assessments and all other
charges imposed by Law which are assessed, levied or imposed against the
Complex. They include special and unforeseen taxes, and all interest paid with
respect to the foregoing when the Impositions are paid in installments and
interest is charged. Impositions include "Substitute Taxes" and payments in lieu
of taxes, or other charges imposed on property owners as a class or on the
Complex by the Laws.
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Laws. All applicable existing and future laws, ordinances, codes,
regulations and other requirements of Governmental Authorities and having the
force of law of Governmental Authorities and having jurisdiction over the
Complex and its operation.
Lease. The Lease dated as of even date herewith under which IBM leases
the Multek Site (referred to in the Lease as the "Leased Premises") to Multek
as "Tenant."
Major Increases. Defined in Section 3.2.
Making the Utilities/Services Independent. IBM's obligation to physically
separate the Services described in Sections 2, 7, 9 and 10 of EXHIBIT B, and to
disconnect the telephones and computer network systems from IBM's telephone and
computer systems in accordance with the terms agreed upon between the parties in
ATTACHMENT G-3 to EXHIBIT B, and the obligation of IBM to pay and incur the cost
thereof as agreed upon in Article 10, so that the IBM Property and Multek Site
shall each independently receive the same utilities and services.
Manager. The Person engaged to operate and maintain the Central Utility
System and to perform the overall management and administration of the IBM
Property, common areas of the Complex, and to provide Services to Multek
pursuant to EXHIBIT B hereto. Initially, IBM shall be the Manager. A successor
Manager may be selected by IBM after consultation with Multek.
Mediation. The dispute resolution process described in Article 6.
Multek Site. The land designated as "Lot 1," as more particularly
described in EXHIBIT A1, together with all Buildings and other improvements
thereon, and as shown on the Survey.
Multek Operating Expenses. Defined in Section 3.1.
Operative Agreements. This Agreement, unless specifically excluded, the
Intellectual Property Agreement, the Patent License Agreement, the Lease, the
Assignment and Assumption Agreement, the Supply Agreement and the Asset
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Purchase Agreement, each made between the parties hereto and, except for the
Asset Purchase Agreement, dated as of even date herewith.
Permitted Encumbrances. The Encumbrances listed on EXHIBIT A and
EXHIBIT A1.
Person. An individual, partnership, limited liability company, trust,
joint venture, Governmental Authority, corporation, firm or other entity, and
shall include any successor (by merger or otherwise) of such entity.
Services. Described in EXHIBIT B.
Subdivision. (i) (a) The issuance by the City of Austin, Texas (the
"City") of a land status report which confirms that the Multek Site is a
"grandfathered" legal lot and (b) the separation of the Multek Site by the
▇▇▇▇▇▇ Central Appraisal District as a separate tax parcel from the IBM Property
and, if required, the recording, at IBM's expense, of all documents necessary to
effect the legal separation of the Multek Site as a separate tax parcel or, (ii)
if not "grandfathered," all other final approvals from the City of Austin and
▇▇▇▇▇▇ Central Appraisal District to effect the legal separation of the Multek
Site as a separate tax parcel, all at IBM's expense. The word "grandfathered"
in this context means that the Multek Site and the IBM Property in their current
configuration are not required to go through the City's subdivision process and
are considered legal lots by the City and ▇▇▇▇▇▇ Central Appraisal District.
Substitute Taxes. A tax, assessment or charge imposed by Law which is
payable as a substitute for any existing tax, assessment or charge which is
imposed on real or personal property owners as a class or on the Complex or
personal property thereon; a supplement to existing taxes, assessments or
charges imposed by Law; or any tax, assessment or charge imposed by Law, other
than an Imposition, which is related to the Complex or personal property
thereon, but expressly excluding any general income, franchise, capital stock,
estate or inheritance taxes, and rent or other receipts received from the rental
of the Leased Premises, unless such income, revenues or/and taxes, to the extent
they relate directly to the lease or
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ownership of the Complex, are determined by a Governmental Authority to be in
lieu of Real Estate Taxes.
Survey. The survey map (job no. 96-387) prepared by ▇▇▇▇▇▇▇ Surveying
Company, Inc., dated January 16, 1997, last revised June 25, 1997.
Term. Defined in Article 7.
Term of the Lease. Defined in the Lease.
Utility Plant. The machines, equipment, valves, pipes and the like which
produce cooling tower water, steam, chilled water and compressed air, and meters
which measure electricity, together with the structure which houses these items
and the parcel of land on which it is located.
Utility System. Each of the following systems to the extent located on or
servicing the Complex, each as described in EXHIBIT B, excluding systems or
parts thereof that only serve or will only serve Multek and IBM: chilled water,
cooling tower water, steam and compressed air, subject to the addition of new
systems or elimination of existing systems. The Utility System includes all
equipment used to the point of entry to the Buildings as set forth in EXHIBIT B.
ARTICLE 2. MANAGEMENT OF THE COMPLEX
Section 2.1 Management of the Complex.
Multek has leased the Multek Site from IBM on a "triple net" basis
pursuant to the provisions of the Lease, and Multek shall purchase the Multek
Site if and when IBM makes the Utilities/Services Independent and completes the
Subdivision. Whether Multek leases or purchases the Multek Site, as determined
by the applicable provisions of the Operative Agreements, IBM and Multek shall
in good faith cooperate in the management of the Complex by IBM and any
successor Manager, as herein provided.
Section 2.2 Utilities, Services and Access Roads.
In accordance with and subject to Article 10, the parties have agreed that
IBM shall make the Utilities/Services Independent, prior to which IBM shall
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supply certain regulated Services to Multek as a tenant under the Lease, upon
and subject to the provisions of EXHIBIT B. Thereafter, IBM shall continue to
furnish certain non-regulated Services to Multek, and Multek shall furnish
certain Services to IBM, in each case upon and subject to the provisions of
EXHIBIT B. Each party hereto shall be entitled to non-exclusive use of the
Access Roads, as herein provided in and subject to EXHIBIT B, including
ATTACHMENT E and SCHEDULE 10 hereto.
Section 2.3 Gift Policy.
IBM and Multek acknowledge that their respective business practice is to
prohibit employees from accepting trade discounts which are not available to
others and from accepting gifts or gratuities arising out of business
relationships. Therefore, IBM and Multek agree to adopt the same business
practice with respect to the Complex and with respect to all employees thereof
engaged in management and operation of the Complex. Neither IBM or Multek shall
give or offer trade discounts to employees of the other or their respective
family members which are not available to the general public, nor give or offer
employees of IBM or Multek or their respective employees or family members gifts
or gratuities of any type.
Section 2.4 Labor Harmony.
(a) IBM and Multek acknowledge the importance of maintaining a work
environment at the Complex that will not subject any neutral employer to any
interruption of its operations due to a labor disturbance or activity, whether
or not such disturbance or activity is protected by labor Laws involving the
employees of another employer at the Complex, or the employees of any of their
respective contractors, subcontractors, suppliers or other invitees (herein a
"labor disturbance"). IBM and Multek shall make reasonable good faith efforts to
avoid strikes, picketing and other labor disturbances at the Complex by their
respective employees, contractors, subcontractors, suppliers and other invitees.
(b) If there is a labor disturbance adversely affecting the Multek Site or
IBM Property, IBM or Multek, as appropriate, agrees to take prompt, reasonable
and lawful
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action to isolate the location of that disturbance so as not to interrupt the
business operations of the other or its occupants. As soon as either becomes
aware that a labor disturbance is threatened, it shall notify the other and
shall take prompt, reasonable and lawful action to ensure that any labor
disturbance will not affect the business operations of the other and is limited
to as small and specific an area as possible. Such action may include
establishing a separate gate reserved for the employees, contractors, suppliers,
or other invitees of the employer primarily involved in the labor disturbance
and another separate gate or gates for the employees, contractors,
subcontractors, suppliers and other invitees of all those not involved in the
dispute. The party involved in the labor disturbance shall promptly post the
gates located on its property with appropriate signs and shall notify, in
writing, the labor organization or other group creating the labor disturbance
that separate reserved gates have been established. The party involved in the
labor disturbance shall take any action reasonably necessary to ensure that each
Person uses only the gate reserved and designated for that Person's use.
However, all actions taken by IBM or Multek hereunder shall be limited to those
permitted by Laws, including the National Labor Relations Act.
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ARTICLE 3. PAYMENT OF OPERATING EXPENSES/CHARGES
Section 3.1 Approved Budget.
The cost of Services to be furnished by IBM to Multek pursuant to EXHIBIT
B, which shall include a pro rata share of the estimated fixed costs (such as
Utility Plant overhead costs) as well as the cost of commodities (such as
chilled water costs) which were consumed by Multek the previous month as well as
the cost of other Services, shall be collectively called "Multek Operating
Expenses." The cost of Services to be furnished by Multek to IBM pursuant to
EXHIBIT B shall be collectively called "IBM Service Charges." For the period
beginning on the first day of the Term and ending December 31, 1997 and,
thereafter, no later than September 1 of the year prior to the commencement of
each ensuing calendar year, IBM, after consultation with Multek, shall submit to
Multek a proposed budget for Multek Operating Expenses and IBM Service Charges
which shall cover a good faith estimate of Multek Operating Expenses and, based
on Multek's input during consultation, IBM Service Charges for the ensuing
calendar year. Multek and IBM shall provide such backup information relating to
the proposed budget which the other may reasonably request. Upon Consent of both
parties to the proposed budget, the budget shall be an "Approved Budget" for the
ensuing calendar year. If at any time during the Term, there is a Major Increase
(defined in subsection 3.2(c) below), Multek shall receive a statement from IBM
which identifies the Major Increase. IBM shall provide such back up information
relating to the Major Increase which Multek may reasonably request. Upon consent
of both parties to the proposed changes in the Approved Budget arising out of
the Major Increase, the revised budget shall supersede and replace and become
the new "Approved Budget." If the parties are unable to agree on the proposed
changes, the issues shall be submitted for Mediation. The Approved Budget for
the balance of the year 1997 and for calendar year 1998 is set forth in EXHIBIT
F and is a summary of the agreed upon charges set forth in SCHEDULES 1-14 of
EXHIBIT B.
Section 3.2 Expenses and Charges.
(a) No later than forty-five (45) days after the end of the calendar month
during which Services were provided to
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Multek, Multek shall pay IBM a sum equal to one twelfth of the annual sums set
forth in the Approved Budget. Each shall be due from Multek, net of one twelfth
of any IBM Service Charges which are set forth in the Approved Budget.
(b) Subject to the rights of Multek herein, IBM is hereby authorized to
make the expenditures and incur the obligations provided for in the Approved
Budget. If Multek or IBM cannot reach agreement on the Approved Budget by
November 15 of any year, or if Multek or IBM exercises rights granted herein to
dispute any item of Multek Operating Expenses, IBM Services Charges or Major
Increases, IBM shall continue to manage and operate the Complex in accordance
with the most recent Approved Budget plus, because the parties cannot reach
agreement on the Approved Budget by November 15 of the current year for the
ensuing year, an increase of the then current years' Approved Budget by the
greater of the percentage increase in the Consumer Price Index during a twelve
(12) month period starting on September 1 of the prior year and ending on August
31 of the then current year, or four percent (4%). On of before December 15 of
the then current year, the controverted portions of the proposed budget shall be
submitted to Mediation and the decision of the Mediator shall be final and
binding on the parties hereto.
(c) IBM and Multek shall each from time to time inform the other about any
"Major Increases" in actual costs and expenses that were not anticipated in the
Approved Budget. "Major Increases" shall mean any expenditure that is reasonably
expected to cause actual annual costs to exceed (i) any line item of the
Approved Budget by more than ten percent (10%) or (ii) five percent (5%) of the
total Annual Budget. Neither Multek nor IBM shall be entitled to dispute any
Major Increase by IBM with respect to Multek Operating Expenses and by Multek
with respect to IBM Service Charges if each in its reasonable discretion after
consultation with the other determines that (x) there is an emergency requiring
immediate action for the protection of the Complex, Multek, IBM or the general
public, or (y) sums exceeding or which are not part of the Approved Budget need
to be spent to avoid the suspension of necessary Services or to comply with
Laws, or (z) the expenditure is for purchase of a non-regulated utility,
currently located on the Complex, which is necessary for the operations of
Multek or
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IBM; provided in any case under (x) or (y), each party shall inform the other as
soon as possible of the necessity for and the nature and cost of such emergency
repairs or compliance.
Section 3.3 Annual Statement; Reconciliation.
Within a reasonable time, not to exceed ninety (90) days after the end of
the estimated duration set forth in ATTACHMENT F to EXHIBIT B, IBM shall deliver
to Multek statements of the aggregate payments made by Multek for Multek
Operating Expenses and actual Multek Operating Expenses, and Multek shall
deliver to IBM statements of the aggregate payments made by IBM for IBM Service
Charges and actual IBM Service Charges, in each case for the period covered.
Each such statement shall include the difference between payments and actuals.
Within forty-five (45) days after IBM receives Multek's statement of IBM Service
Charges, IBM shall issue a reconciliation statement which includes a summary of
both statements and determines whether Multek owes additional sums or is
entitled to a rebate, net of IBM Service Charges. Any sums owed by or to Multek
shall be payable to or by IBM within forty-five (45) days after delivery of such
statement. Any continuation of Calibration/Instrument Support, Tool Room Support
and Analytical Lab Support after expiration of the initial time periods set
forth in ATTACHMENT F to EXHIBIT B shall be furnished at competitive market
prices to be negotiated by the parties.
Section 3.4 Audit; Cost of Audit.
(a) Complete and accurate books, records, documents, accounts and other
evidence (hereinafter collectively called "the Records") shall be established
and maintained by IBM if directly pertinent to the Multek Operating Expenses and
by Multek if directly pertinent to the IBM Service Charges. The Records must be
kept for the balance of the calendar year in which they were made and for five
(5) additional years thereafter. No more often than once each calendar year
during the Term and within twelve (12) months after the end of the Term, Multek
and IBM, or their respective representative and any other Person authorized to
conduct an examination, including the Accountants, shall have access to the
Records during normal business hours at an office of IBM
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or Multek, as appropriate, in Austin, Texas or, if no such office is available,
at a mutually agreeable and reasonable venue, for the purpose of inspection,
auditing and copying. Each party shall take reasonable steps to protect any of
the Records from public disclosure.
(b) Each party may examine the Records established and maintained by the
other for any purpose, including compliance with generally accepted accounting
principles consistently applied and with all cost allocation formulae or
guidance set forth in this Agreement. Such audit may include a reconciliation of
any charges, assessments or other cost allocations found to be made in a manner
inconsistent with this Agreement. If found to be so, the reconciliation shall
include reimbursement to the adversely affected party of any interest or similar
cost incurred as a result of such initially inconsistent charge, assessment or
allocation, including interest not earned as a result of having made payment of
such charge. Interest shall be paid from the date the party paid such sums to
the date of payment at the floating prime rate of Chase Manhattan Bank N.A. in
effect in New York, New York, on short-term business loans to customers of the
highest credit standing.
Section 3.5 Tax on Expenses/Charges.
If any Governmental Authority having jurisdiction determines pursuant to
Law that any component of Multek Operating Expenses or IBM Service Charges is
subject to taxation (such as, without limitation, a sales or value added tax),
such tax shall be paid by the Person who benefited from the Service covered by
the Multek Operating Expenses or IBM Service Charges; except that taxes shall
not include income, franchise and corporate taxes. IBM and Multek shall each
separately account for and identify such component if claiming payment therefor.
Section 3.6 Regulated Services.
Notwithstanding any provision in this Agreement to the contrary, IBM shall
furnish electricity, Domestic Water and Waste Water services to Multek in
accordance with Section 1.9 of EXHIBIT B to this Agreement, including charges
allowed for such utilities and billing periods required by
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Law. Any inclusion of these utility charges in the Approved Budget shall be
consistent with Section 1.9 and the Law.
ARTICLE 4. UTILITY METERS
Section 4.1 Pricing.
Supplementing Section 3.1, Multek shall pay Multek Operating Expenses for
the supply of commodity/utility Services by IBM pursuant to the pricing formulas
set forth in EXHIBIT B. These charges shall include a pro rata share, based on
usage, of operating expenses and capital improvements associated with the
production and distribution of such Services from the Central Utility System or
elsewhere and delivered to the Multek Site, including those associated with the
maintenance, repair and replacement of the Utility Plant and, unless unlawful
with respect to regulated utilities, the meters which measure consumption.
Consumption charges and the cost of meters and metering shall be billed to
Multek as herein provided in this Article 4 and in EXHIBIT B. The parties agree
that the Building 60 metered utilities for Chilled Water, Compressed Air and
steam shall be the quantity measured by the meter in Building 60 minus the
quantity measured by the meter in Building 45.
Section 4.2 Meter Readings.
IBM shall read all meters according to IBM's regular meter reading
schedule. Upon a timely request from Multek prior to a scheduled reading, an
employee of Multek may attend. Not later than thirty (30) days after the end of
each scheduled metering period, IBM shall send Multek a statement in accordance
with Section 3.2 which shows the usage of metered utilities during the monthly
metering period.
Section 4.3 Meter Calibration and Adjustment.
(a) Each meter used for the purposes of billing Multek shall be tested and
calibrated by IBM at intervals consistent with manufacturers recommendations
and, as required by the City of Austin regulations. Multek shall provide IBM
representatives reasonable access to the Multek Site for such purposes. Any
meter found to be inaccurate
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shall be restored to accurate condition or an accurate meter substituted. Multek
shall reimburse IBM for fifty percent (50%) of all costs incurred by IBM for the
foregoing as a Multek Operating Expense, except that IBM shall pay for the
testing and recalibration within ten (10) days prior to or after the Closing
Date.
(b) IBM shall make or cause to be made special tests of meters used to
measure Multek's usage upon reasonable request of Multek and at reasonable
times. Except as prohibited by the City of Austin regulations, the cost of all
such tests of these meters and required calibrations shall be included in Multek
Operating Expenses. The result of all tests and calibrations shall be open to
examination by Multek upon reasonable request and at reasonable times. If, as a
result of any test, any meter is found to be inaccurate, then the readings of
such meter previously taken shall be re-examined and, if there is greater than a
two percent (2%) deviation from the manufacturer=s tolerances, a reconciliation
statement shall be issued to Multek within thirty (30) days after such
determination together with a payment to Multek or a request for additional sums
from Multek (to be paid within forty-five (45) days of receipt of the
reconciliation), as the case may be. IBM shall recalibrate and test the
inaccurate meters and each party shall pay fifty percent (50%) of the expense
incurred by IBM therefor.
Section 4.4 Failure of a Meter.
Should any metering equipment at any time fail to register or should the
registration thereof be so erratic as to be meaningless, the usage being
measured by any such meters shall be determined from (a) estimates on the basis
of past usage during a similar period and under similar conditions, or if
paragraph (a) cannot be determined, (b) estimates on the basis of usage
registered by a new or repaired meter during a subsequent period.
ARTICLE 5. INSURANCE
Section 5.1 Liability Insurance.
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(a) IBM and Multek shall each maintain in effect at all times during the
Term the coverages described in this Article 5, including "property damage" and
a "commercial general liability insurance" policy providing coverage on an
"occurrence," rather than on a "claims made" basis. The liability policy shall
include coverage for property damage, personal injury (including death) as well
as independent contractors and products-completed operations liability.
Section 5.2 Casualty Insurance. During the Term, Multek shall furnish and
maintain, at Multek's sole cost and expense, property damage insurance, written
on an "all risk" of physical loss or damage basis, to cover all loss or damage
to or destruction of any portion of the Leased Premises in an amount of not less
than eighty percent (80%) of the full cost to replace the Buildings and other
structures located on the Multek Site (excluding the foundations but including
all personal property, fixtures, equipment and machinery necessary to operate
and maintain Multek's business operations on the Multek Site). Such amounts
shall meet any co-insurance clause of Multek's policies.
Section 5.3 Liability Insurance.
(a) During the Term, Multek shall purchase and maintain, at Multek's sole
cost and expense, general commercial public liability insurance against any
claims by reason of personal injury (including death) and property loss, damage
or destruction, occurring on or about the Multek Site except for the gross
negligence or misconduct of IBM, its employees, suppliers, contractors or
subcontractors, in an amount of not less than one million U.S. dollars
($1,000,000.00) combined single limit for injury (including death) and for
damage to property, with umbrella coverage of not less than twenty million U.S.
dollars ($20,000,000.00). Multek shall cause IBM to be included as an additional
insured under such policy. Each such policy shall contain provisions, if and to
the extent available at no additional cost to Multek, that the policy will not
be cancelable except upon at least thirty (30) days prior notice to all
insureds, including IBM, and that the act or omission of one insured will not
invalidate the policy coverage of any of the other insureds. Multek shall
furnish evidence reasonably satisfactory to IBM that the
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insurance is in effect at or before the commencement of the Term. Multek may
self insure for up to Two Million Five Hundred Thousand U.S. Dollars
($2,500,000.00).
(b) During the Term, IBM shall purchase and maintain, at IBM's sole cost
and expense, general commercial public liability insurance against any claims by
reason of personal injury (including death) and property damage occurring on or
about the IBM Property, except for the gross negligence or misconduct of Multek,
its employees, suppliers, contractors, or subcontractors, in an amount not less
than one million U.S. dollars ($1,000,000.00) combined single limit for injury
(including death) and for damage to property, with umbrella coverage of not less
than twenty million U.S. dollars ($20,000,000.00). IBM shall cause Multek to be
included as an additional insured under such policy. Each such policy shall
contain provisions, if and to the extent available, that the policy will not be
cancelable except upon at least thirty (30) days prior notice to all insureds,
including Multek, and that the act or omission of one insured will not
invalidate the policy of any of the other insureds. IBM shall furnish evidence
reasonably satisfactory to Multek that the insurance is in effect at or before
the commencement of the Term. IBM may self insure for up to five million U.S.
dollars ($5,000,000.00).
(c) Each party shall have provided the other with evidence that the
insurance coverage required under this Article 5 is in full force and effect. At
least thirty (30) days prior to termination of any such coverage, each party
shall provide the other with evidence that such coverage will be renewed or
replaced upon termination with insurance that complies with these provisions.
Such evidence of insurance shall be in the form of a standard certificate of
insurance and shall contain sufficient information to allow each party to
determine whether there has been compliance with these provisions.
(d) All policies of insurance required under this paragraph shall be
issued by financially responsible insurers with a current A.M. Best Company
rating of at least A-VIII.
Section 5.4 Waiver of Claims and Subrogation.
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IBM and Multek each hereby waives its respective right of recovery against
the other and each releases the other from any claim arising out of loss, damage
or destruction to any improvements located in or on the Multek Site (in the case
of Multek) and to any improvements located in or on the IBM Property (in the
case of IBM), including all personal property, fixtures, equipment and machinery
on either property, to the extent such party actually receives full and complete
payment or reimbursement (excepting deductible amounts) for any such loss,
damage or destruction under any insurance policy required to be carried
hereunder but notwithstanding the fact that such loss, damage or destruction may
be attributable to the negligence of either party or Landlord's Agents or
Tenant's Agents. Each casualty insurance policy shall include a waiver of the
insurer's rights of subrogation against the party hereto who is not an insured
under said policy. Each party shall look first to the proceeds of its respective
casualty insurance policy (and to its own funds to the extent it is
self-insured) to compensate it for any such loss, damage or destruction. This
waiver and release applies to any self insured (deductible) portion of the loss,
damage or destruction, and such waiver and release is fully effective and
enforceable notwithstanding the fact that IBM or Multek has failed to purchase
and maintain insurance coverage required herein which may have reimbursed it for
such loss, damage or destruction.
ARTICLE 6. DISPUTE RESOLUTION; DEFAULT
Section 6.1 Initiation of Dispute Resolution.
Except for disputes for which different dispute resolution procedures have
been agreed upon in EXHIBIT B, if there is a dispute under this Agreement, the
following shall control.
(a) If informal discussions have not resolved a dispute between the
parties, any party hereto may at any time by written notice ("Initiation
Notice") to the other, initiate the dispute resolution procedure set forth
herein. All such disputes shall be subject to the procedures set forth in this
Section 6.1 and Section 6.2 below.
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(b) Upon issuance and receipt of any Initiation Notice, the matter in
question shall be referred in writing for resolution to Multek or IBM, as
applicable, at the addresses set forth in Article 9.1.
Section 6.2 Mediation.
(a) If the matter in question has not been resolved by the parties within
fifteen (15) days after receipt of any Initiation Notice, and if any party
wishes to pursue the matter, it shall initiate the following non-binding
procedure (herein called "Mediation"), by written notice to the other party.
Upon initiation of Mediation, the parties agree to try in good faith to settle
the matter under the Commercial Mediation Rules of the American Arbitration
Association before resorting to litigation.
(b) The Mediation shall be held within thirty (30) days after selection of
a Mediator. The parties shall agree on the selection of one Mediator who
demonstrates at least fifteen (15) years' experience with the subject matter of
the Mediation. If the parties cannot agree upon the selection of a Mediator
within fifteen (15) days after receipt of the notice initiating the Mediation,
the Mediator shall be selected in accordance with the Commercial Mediation Rules
of the American Arbitration Association.
(c) At least five (5) business days prior to the first scheduled Mediation
session, each party shall provide the Mediator with a brief written memorandum
on the issues to be resolved, the facts surrounding the dispute and its position
with regard to the issues. Such memoranda shall be filed on a confidential basis
and shall not be exchanged between the parties. If either party to the Mediation
has a substantial need for information and documents in the possession of the
other party in order to prepare for the Mediation, the parties shall attempt to
agree upon the extent of and the schedule for the expeditious exchange of such
information, with the help of the Mediator, if required.
(d) If any such dispute, claim or controversy remains unresolved as of the
earlier of (i) the 31st day after the first Mediation session, or (ii) the 61st
day after receipt of the notice initiating Mediation, or (iii) the 61st day
after receipt of the notice is received by the alleged
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offending party from the aggrieved party, whether or not a party has initiated
Mediation, either party may exercise all rights and remedies set forth in this
Article 6, subject to the limitations and conditions, if any, agreed upon in
this Agreement.
Section 6.3 Pending Resolution.
During any period after the Initiation Notice and during the Mediation,
(a) neither party shall be relieved of its obligation to timely pay amounts
claimed by the other in good faith to be due on account of Multek Operating
Expenses or IBM Service Charges and IBM or Multek (as the case may be) may
proceed to exercise all remedies available in Section 6.5 on account of
non-payment; (b) neither party shall be relieved of its obligation to timely pay
any reconciliation amounts due the other pursuant to reconciliation statements
issued by either party or its Accountant and IBM or Multek (as the case may be)
may proceed to exercise all remedies available in Section 6.5 on account of
non-payment, except that such payments shall be deposited with counsel for the
party who gave the Initiation Notice until the matter in dispute is finally
resolved; (c) neither party shall be relieved of its obligation to cause
Services to be provided in accordance with the provisions of this Agreement,
except as authorized in Section 6.5, and each may proceed to exercise all
remedies available in Section 6.5 on account thereof; (d) except to enforce the
obligations in paragraphs (a),(b) and (c) above, and except to avoid the running
of any applicable statute of limitations or similar rule, no party may exercise
the remedies granted to it below until it has completed the processes (to the
extent applicable) set forth in Sections 6.1 and 6.2, but nothing in this
Article 6 shall be construed as limiting or delaying notice of an Event of
Default or running of cure periods; (e) notwithstanding any delay arising out of
the Mediation, interest on any amount determined to be due shall accrue,
commencing as of the date the contested sums have been paid or are owed, on all
amounts mutually agreed upon or determined by the Mediator to be due to a party,
to be calculated in the manner agreed upon in subsection 3.4(b); and (f)
notwithstanding any delay arising out of the Mediation, any party mutually
agreed upon or determined by the Mediator to have committed an Event of Default
shall be liable for damages, if any, from the date
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of such Event of Default. The remedies reserved in paragraphs (a),(b) and (c)
above may be exercised simultaneously with any of the processes set forth in
Sections 6.1 and 6.2.
Section 6.4 Events of Default.
(a) IBM. The following shall constitute an Event of Default by IBM:
(i) failure of IBM to pay money due Multek in accordance with the
terms of this Agreement and such failure shall continue for at least
thirty (30) days after written notice thereof; or
(ii) failure of IBM to comply with any other provision of this
Agreement on its part to be performed hereunder and such failure
shall continue for more than forty-five (45) days after written
notice from Multek to IBM which specifies in reasonable detail the
alleged act or omission of non-compliance; provided, however, that
if and so long as (1) the failure is reasonably curable by IBM, (2)
Multek does not have reasonable grounds for establishing that Multek
could cure the failure materially more rapidly than IBM, (3) the
continuation of the failure is not materially prejudicial to Multek,
and (4) IBM promptly commences and thereafter diligently and
continuously prosecutes the curing of the failure, IBM shall have
such additional time as is reasonably necessary to cure the failure;
or
(iii) a general assignment by IBM for the benefit of creditors;
(iv) the institution by or against IBM of a case or other proceeding
under any section or chapter of any Texas bankruptcy/insolvency Law
or the Federal Bankruptcy Code, now existing or hereafter amended or
effective, which proceeding is not dismissed, stayed or discharged
within a period of sixty (60) calendar days after the filing
thereof, or if stayed, which stay is thereafter lifted
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without a contemporaneous discharge or dismissal of such proceeding;
(v) a proposed plan of arrangement is adopted or other action by
IBM's creditors is taken as a result of a general meeting of IBM's
creditors;
(vi) the appointment of a receiver, custodian, trustee or like
officer to take possession of assets of IBM, which receivership
remains undischarged for a period of thirty (30) calendar days from
the date of its imposition;
(vii) admission by IBM in writing of its inability to pay its
debts as they mature; or
(viii) attachment, execution or other judicial seizure of all or any
substantial part of IBM's assets.
(b) Multek. The following shall constitute an Event of Default by
Multek:
(i) failure of Multek to pay money due IBM in accordance with the
terms of this Agreement and such failure shall continue for at least
thirty (30) days after written notice thereof;
(ii) failure of Multek to comply with any other provision of this
Agreement on its part to be performed and such failure shall
continue for more than forty-five (45) days after written notice
from IBM to Multek which specifies in reasonable detail the alleged
act or omission of non-compliance; provided, however, that if and so
long as (i) the failure is reasonably curable by Multek, (ii) IBM
does not have reasonable grounds for establishing that IBM could
cure the failure materially more rapidly than Multek, (iii) the
continuation of the failure is not materially prejudicial to IBM,
and (iv) Multek promptly commences and thereafter diligently and
continuously prosecutes the curing of the failure, Multek shall have
such additional time as is reasonably necessary to cure the failure;
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(iii) a general assignment by Multek for the benefit of
creditors;
(iv) the institution by or against Multek of a case or other
proceeding under any section or chapter of any Texas
bankruptcy/insolvency Law or the Federal Bankruptcy Code, now
existing or hereafter amended or effective, which proceeding is not
dismissed, stayed or discharged within a period of sixty (60)
calendar days after the filing thereof, or if stayed, which stay is
thereafter lifted without a contemporaneous discharge or dismissal
of such proceeding;
(v) a proposed plan of arrangement is adopted or other action by
Multek's creditors is taken as a result of a general meeting of
Multek's creditors;
(vi) the appointment of a receiver, custodian, trustee or like
officer to take possession of assets of Multek, which receivership
remains undischarged for a period of thirty (30) calendar days from
the date of its imposition;
(vii) admission by Multek in writing of its inability to pay its
debts as they mature; or
(viii) attachment, execution or other judicial seizure of all or any
substantial part of Multek's assets.
Section 6.5 Remedies.
(a) Multek: Upon the occurrence of an Event of Default by IBM, Multek
shall have the right to pursue any one or all of the following remedies in
addition to any other remedies available at Law or in equity which are not
inconsistent with the following remedies of this Article 6:
(i) direct damages incurred by Multek as well as other remedies
available at Law or in equity, excepting consequential, indirect,
punitive, and special damages which are hereby excluded and waived
by Multek;
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(ii) specific performance and all other injunctive remedies;
(iii) the right to cure an Event of Default at the expense of IBM;
and
(iv) the right to terminate any and all Services except Services,
(including the Nonterminable Services described in Section 26.1 of
EXHIBIT B,) which are provided to IBM and are essential to IBM's
manufacturing operations, as determined in good faith by IBM.
(b) IBM: Upon the occurrence of an Event of Default by Multek, IBM shall
have the right to pursue any one or all of the following remedies in addition to
any other remedies available at Law or in equity which are not inconsistent with
the following remedies of this Article 6:
(i) direct damages incurred by IBM as well as other remedies
available at Law or in equity, excepting consequential, indirect,
punitive, and special damages which are hereby excluded and waived
by IBM;
(ii)specific performance and all other injunctive remedies; and
(iii) the right to cure an Event of Default at the expense of
Multek.
(iv) the right to terminate any and all Services except Services,
(including the Nonterminable Services described in Section 26.1 of
EXHIBIT B,) which are provided to Multek and are essential to
Multek's manufacturing operations, as determined in good faith by
Multek.
Section 6.6 Attorneys Fees; Jury Trial.
(a) In the event of any Mediation or/and litigation between IBM and Multek
hereunder, the Person who substantially prevails shall be entitled, in addition
to all other remedies granted to it above, to reimbursement of all
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reasonable attorneys fees and costs and expenses of Mediation or/and litigation
incurred by such substantially prevailing Person. The Mediator or judge shall
determine which Person substantially prevailed.
(b) In any action, proceeding or counterclaim brought by IBM or Multek
against the other concerning any matters whatsoever arising out of or in any way
connected with this Agreement or the relationship hereunder of IBM and Multek,
each hereby waives trial by jury.
Section 6.7 Limitation on Subcontractor/Consultant Liability.
In no event shall the subcontractors or consultants or other third party
providers retained by IBM be liable hereunder to Multek, or subcontractors or
consultants or other third party providers retained by Multek be liable
hereunder to IBM, in either case under any equitable or legal theory, for Losses
arising out of failure of such subcontractor, consultant or other third party
providers to furnish Services as required herein. The word "Losses" shall mean
all losses, liabilities, damages and claims and all related costs and expenses,
including any and all attorneys' fees and costs of investigation, litigation,
settlement, judgment, interest and penalties.
ARTICLE 7. TERM
The term of this Agreement shall commence as of the date hereof and shall
continue for a period of ninety-nine (99) years.
ARTICLE 8. RESTRICTIONS
Section 8.1 Uses.
Multek or any other Affiliate of DII Group, Inc. may use the Multek Site
for the manufacturing operations currently conducted on the Multek Site by IBM
as well as any other uses by them which is authorized by Law; provided, however,
that Multek shall obtain the written consent of IBM to any change in Multek's
use of the Multek Site for purposes other than manufacturing operations, which
consent shall not be unreasonably withheld or delayed if IBM determines in good
faith that the proposed change in use (a)
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does not materially change the volume of traffic or type of vehicle use at the
Complex, (b) does not violate or threaten violation of the provisions of the
Project Operations Agreement, and (c) complies with Law.
Section 8.2 Signs.
All signs posted upon or within the Complex by IBM, Multek or any other
Person occupying the Complex shall conform to the sign criteria set forth in
EXHIBIT C.
Section 8.3 Rules and Regulations.
IBM and Multek shall each comply with the Rules and Regulations set forth
in EXHIBIT D, and each shall make reasonable good faith efforts to cause its
partners, directors, employees, agents, licensees, contractors, tenants,
subtenants and other invitees to comply therewith. IBM may from time to time,
with the consent of Multek which shall not be unreasonably withheld or delayed,
amend or supplement the Rules and Regulations for the general safety, benefit
and convenience of IBM and Multek; provided that in no event shall any amended
or supplementary Rules and Regulations be inconsistent with the terms of this
Agreement. IBM shall give thirty (30) days written notice to Multek of any
proposed, amended or supplementary Rules and Regulations at least forty-five
(45) days prior to the proposed effective date thereof. IBM represents that up
to the day prior to the Term Commencement Date, the operations and activities
performed at the Multek Site have been, to Best Knowledge of IBM, within the
scope of the Rules and Regulations and have not violated these Rules and
Regulations. The words "Best Knowledge of IBM" means the knowledge acquired
based upon reasonable inquiry of IBM's Site Operations Manager of the IBM
printed wire board plant operations at the Multek Site as of the date hereof and
as of the Closing Date.
Section 8.4 Compliance with Laws.
IBM and Multek shall each comply with all Laws applicable to the
condition, occupancy, use and manner of use of the Multek Site and IBM Property,
as applicable, except that violation of any Laws which relate solely to IBM's
operations on the IBM Property or Multek's operations
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on the Multek Site and which do not adversely affect the other party in any way
or the condition, use or manner of use of any other areas of the Complex, shall
not constitute an Event of Default by the violator.
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ARTICLE 9. RIGHT OF FIRST OPPORTUNITY
Section 9.1 First Opportunity.
(a) Multek agrees that (i) if at any time it considers selling, assigning,
subletting, or otherwise transferring its interest in the Multek Site or/and any
of the Buildings or other improvements now or hereafter located on the Multek
Site, or (ii) if Multek at any time considers subdividing or rezoning the Multek
Site, in each case Multek shall first notify IBM of such plans before soliciting
third parties to pursue such plans, and shall include with the notification a
business term sheet which sets forth the terms of Multek's proposed transaction
(whether it is a sale, lease, or otherwise). IBM is hereby granted thirty (30)
days after receipt of Multek's proposal to submit a counterproposal and enter
into negotiations with Multek based on the business term sheet proposed. The
counterproposal may take the form of an offer to purchase or lease the assets
proposed to be marketed, rezoned or subdivided by Multek. Multek agrees that it
shall neither take any of the actions set forth above in (i) or (ii), nor
solicit or consider proposals received from others during the thirty (30) day
period unless and until (x) IBM waives its rights hereunder; (y) IBM fails to
submit a counterproposal as required below; or (z) IBM and Multek have been
unable to reach an acceptable agreement after complying with the terms set forth
below.
(b) Upon receipt of an IBM counterproposal, IBM and Multek shall work
together for a period of thirty (30) days in good faith to refine and revise
aspects of the IBM counterproposal to make it acceptable to Multek and IBM. If
after using their good faith efforts, Multek and IBM are unable to reach a
mutually acceptable agreement, IBM shall, at the end of such thirty (30) day
period, deliver to Multek in writing a detailed plan (the "Rejected Plan")
setting forth all material terms and conditions of the final proposal proffered
by IBM and rejected by Multek. Thereafter, Multek may solicit proposals from
others, but only on the same terms set forth in the Rejected Plan or terms which
are more favorable to Multek than those set forth in the Rejected Plan. If
Multek does not accept a third party proposal which is more favorable to Multek
than those set forth in the Rejected Plan, this process shall be repeated until
Multek transfers the asset to IBM pursuant to
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the terms of the Rejected Plan or to a third party on terms more favorable to
Multek than those set forth in the Rejected Plan. For purposes of this
Agreement, the above referenced thirty (30) day period, as applicable, are
hereinafter individually referred to as a "Negotiation Period."
Section 9.2 Continuing Right.
(a) This right of first opportunity shall be a continuing right with
respect to all or any portion of the Multek Site and any one or more of the
Buildings and other improvements thereon. The failure by IBM to submit a
proposal with respect to a particular portion of the Multek Site or particular
Building or improvement, or the rejection by Multek of an IBM proposal with
respect to a particular portion of the Multek Site or particular Building or
improvement shall not limit, alter or terminate IBM's right of first opportunity
hereunder with respect to the remaining portion of the Multek Site or particular
Building or improvement. In addition, if Multek rejects an IBM proposal or IBM
fails to timely make a proposal with respect to a particular portion of the
Multek Site or particular Building within the parameters given by Multek in its
business term sheet, and the Multek Site or particular Building or improvement
is not transferred or encumbered within two hundred seventy (270) days after the
expiration of (i) the applicable thirty (30) day period if IBM fails to deliver
a proposal or (ii) the applicable Negotiation Period if Multek has rejected an
IBM proposal, Multek shall again comply with the terms of Section 9.1 of this
Agreement by resubmitting its latest business term sheet to IBM, together with
all of the then relevant information, and working in good faith with IBM for a
period of thirty (30) days to reach a mutually acceptable agreement as required
by Section 9.1.
Section 9.3 IBM Affiliate. If Multek and IBM reach a mutually acceptable
agreement as to the transfer or encumbrance of a portion of the Multek Site or a
particular Building or improvement, IBM may assign its rights with respect to
such transfer or encumbrance to an Affiliate of IBM at the closing of the
transaction without the consent of Multek. Any such assignment shall not alter
or affect IBM's rights with respect to the remaining portions of the Multek Site
or a particular Building or improvement.
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Section 9.4 Third Party Offer. If Multek receives an unsolicited bona fide
offer from a third party, which is acceptable to Multek, for a transaction of
the type contemplated in subsection 9.1(a)(i), Multek shall notify IBM of such
transaction, the name of the offeror, the offered consideration and provisions
of the offer. Within thirty (30) days after receipt of Multek's notice, IBM may
elect by notice to Multek to enter into the offered transaction for the
consideration and upon the other provisions stated in Multek's notice; except
that the transaction shall close the later of thirty (30) days after IBM elects
to enter into the offered transaction or the date agreed upon by the offeror.
Should IBM fail to exercise this right within the time and in the manner
required above, or waives such right in writing, Multek shall be free to
consummate such transaction to the named offeror, for the consideration and upon
the other provisions set forth in Multek's notice to IBM; however, Multek agrees
that such transaction shall be subject to the provisions of this Agreement and
the Lease, including this Article 9. If such transaction is not consummated
within two hundred seventy (270) days after the expiration of the earlier of the
date IBM fails to exercise its right as hereinabove required or the date IBM
waives such right in writing, the rights granted to IBM and the restrictions on
Multek in this subsection shall once again apply to the offer described above as
well as to any new offer.
Section 9.5 Termination. Notwithstanding anything in this Agreement to the
contrary, all rights and obligations of Multek and IBM set forth in this Article
9 shall terminate effective upon the date ten (10) years after the date hereof.
Section 9.6 Successors and Assigns. All rights and obligations of Multek
and IBM set forth in this Article 9 shall inure to the benefit of and be binding
upon the successors and assigns of each party, including third parties who
acquire title to the Multek Site by foreclosure or deed in lieu of foreclosure
or otherwise. Either party may file a short form memorandum of this Article 9 on
the public record.
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Section 9.7 Financing/Refinancing. Notwithstanding any provision of this
Agreement to the contrary, in no event shall Article 9 apply (i) to any
financing or (ii) to any sale, sublease, assignment, pledge, mortgage or other
transfer or encumbrance to an Affiliate.
ARTICLE 10. INDEPENDENT UTILITIES/SERVICES - SUBDIVISION
From and after the Closing Date (as defined in the Asset Purchase
Agreement) IBM shall proceed to use its reasonable good faith efforts to obtain
the Subdivision and to make the Utilities/Services Independent as more fully
described in Sections 2, 7, 9 and 10 of EXHIBIT B hereto, and to disconnect the
telephone and computer network systems as agreed upon in ATTACHMENT G-3 of
EXHIBIT B. IBM shall pay all reasonable expenses associated with the Subdivision
and for making the Utility/Services Independent as agreed upon in the Asset
Purchase Agreement. A failure of or refusal by the City of Austin or any other
Governmental Authority to approve the Subdivision for any reason shall not
constitute a breach by IBM under the Operative Agreements. If the Subdivision is
not approved or so long as IBM fails to make the Utilities/Services Independent,
then Multek's exclusive remedy and IBM's exclusive liability hereunder shall be
for IBM to lease the Leased Premises to Multek and Multek to lease the Leased
Premises from IBM in accordance with the terms of the Lease which shall remain
in full force and effect upon the same terms and conditions stated therein.
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ARTICLE 11. MISCELLANEOUS
Section 11.1 Notices.
Any notice, request or demand under this Lease shall be in writing and
shall be considered properly delivered when addressed as hereinafter provided,
and served (i) by telecopy, (ii) five (5) days after deposit for mailing by
registered or certified mail, postage prepaid, (return receipt requested), or
(iii) sent by a reliable messenger or nationally known overnight courier. Any
notice, request or demand by IBM to Multek shall be addressed to Multek at the
Multek Site, Attention General Manager, with copies addressed and sent
simultaneously to Multilayer Technology, Inc. at ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention President, and to The DII Group, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Chief Financial Officer, until otherwise directed
in writing by Multek and, if requested in writing by Multek, simultaneously
served on or sent to such other parties as Multek may request. Any notice,
request or demand by Multek to IBM shall be addressed to IBM Corporation, Real
Estate Services, Armonk, New York 10504, Attention: Director, US Real Estate
Operations and Investments, with copies addressed and sent simultaneously to
IBM, at the same address, Attention: Associate General Counsel, and to the
Austin Contract Administrator, IBM Corporation, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, until otherwise directed in writing by IBM, or to such person or address
as either of the parties shall hereafter designate to the other from time to
time by similar written notice.
Section 11.2 Estoppel Certificates.
IBM and Multek each agree, at any time and from time to time upon not less
than ten (10) days prior notice from one to the other, to execute, acknowledge
and deliver to the other or any other Person designated by the requesting
Person, an "estoppel" certificate, so called, confirming information customarily
found in such certificates with respect to this Agreement or the Lease.
Section 11.3 Governing Law.
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(a) This Agreement and the other Operative Agreements, valued in excess of
One Million Dollars ($1,000,000.00), shall be deemed to have been delivered at
and made at Armonk, New York, and shall be interpreted, and the rights and
liabilities of the parties hereto determined, in accordance with the Laws of the
State of New York applicable to agreements executed, delivered and performed
within New York State, without regard to the principles of conflicts of Laws
thereof.
(b) IBM and Multek hereby consent to the jurisdiction of any state or
federal court located within the county of New York, the State of New York. Each
hereby (i) waives trial by jury, (ii) waives any objection to venue of any
action instituted under this Agreement or under the other Operative Agreements,
and (iii) consents to the granting of such legal or equitable relief as is
deemed appropriate by any aforementioned court. These consents and waivers apply
to all Operative Agreements.
Section 11.4 Entire Agreement; Amendments.
This Agreement together with the other Operative Agreements and the
Confidentiality and Nondisclosure Agreement dated February 27, 1997, between IBM
and Multek, including all exhibits and other attachments referred to herein and
therein, contain the entire agreement of IBM and Multek with respect to the
subject matter hereof and thereof and supersede all prior agreements,
understandings and representations, oral or written, between IBM and Multek
relating thereto or hereto.
Section 11.5 Transfers.
This Agreement and the obligations and rights hereunder shall not be
assigned, hypothecated, pledged or otherwise transferred or encumbered by either
party hereto except that either party may, in its sole discretion, transfer or
assign its rights and obligations hereunder (a) to any one of its Affiliates and
(b) to a purchaser, lessor, lessee or source of funding if a party sells, leases
or otherwise transfers or assigns its leasehold or fee interest in the Complex.
Section 11.6 Severability.
33
38
If any covenant, condition or provision of this Agreement, or the
application thereof to any Person or circumstance, shall be held to be invalid
or unenforceable, then in each such event the remainder of this Agreement or the
application of such covenant, condition or provision to any other Person or any
other circumstance (other than those as to which it shall be invalid or
unenforceable) shall not be thereby affected, and each covenant, condition and
provision hereof shall remain valid and enforceable to the fullest extent
permitted by applicable Laws.
Section 11.7 Binding Effect.
This Agreement shall be binding upon the signatories hereto and their
respective successors and permitted assigns to the same extent as if each
successor and permitted assign were named as a party to this Agreement.
Section 11.8 Separate Agreement.
This Agreement is separate from and independent of the Operative
Agreements. Without Limitation, no Event of Default by IBM or Multek under any
of the Operative Agreements other than the Lease shall constitute a default
under the Lease, and no default by IBM or Multek under the Lease shall
constitute an Event of Default under any of the other Operative Agreements.
Section 11.9 No Third Party Beneficiary.
This Agreement is intended for the exclusive benefit of the parties
hereto, and except as otherwise expressly provided herein, shall not be for the
benefit of, and shall not create any rights in, or be enforceable by any other
Person.
Section 11.10 Force Majeure.
If either party hereto (the "Delayed Party") is at any time delayed or
interrupted in providing a Service or any other non-monetary obligation on its
part to be performed hereunder by reason of a Force Majeure event, then the
Delayed Party shall use all reasonable efforts to again provide such Service or
perform such obligation as required by this Agreement but such delay or
interruption shall not
34
39
be an Event of Default of the Delayed Party. The occurrence or happening of a
Force Majeure event which has the effect of preventing performance of one or
more obligations shall suspend time conditions or limitations with respect to
performance of the affected obligations(s) but only for so long as the event or
its direct consequences continue to preclude such performance.
Section 11.11 No Warranties.
(a) MULTEK AND IBM AGREE THAT THE PARTY PROVIDING A SERVICE HAS NOT,
EXPRESSLY OR BY IMPLICATION OR INFERENCE, MADE ANY REPRESENTATIONS, WARRANTIES
OR GUARANTEES WITH RESPECT THERETO, AND EACH SPECIFICALLY DISCLAIMS ANY WARRANTY
OF MERCHANTABILITY OR SUITABILITY OR FITNESS OF ANY OF THE SERVICES FOR A
PARTICULAR PURPOSE OF THE OTHER PARTY, WHETHER OR NOT EITHER PARTY HAS BEEN MADE
AWARE OF ANY SUCH PURPOSE BY ANY PERSON.
(b) EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, THE PARTIES
ACKNOWLEDGE AND AGREE THAT THE BASIC FIXED RENT, DEFINED IN THE LEASE, AND
PURCHASE PRICE ALLOCATED TO THE MULTEK SITE, DEFINED IN THE ASSET PURCHASE
AGREEMENT, WERE ESTABLISHED IN MATERIAL RELIANCE ON MULTEK ACCEPTING THE MULTEK
SITE IN THEIR "AS IS" CONDITION "WITH ALL FAULTS."
Section 11.12 No Waiver.
Failure by either party to complain of any action, inaction or default of
the other party shall not constitute a waiver of the aggrieved party's rights
hereunder. Waiver by either party of any right for any default of the other
party shall not constitute a waiver of any right for either a subsequent default
of the same obligation or for any other default, past, present or future.
ARTICLE 12. THE DII GROUP, INC. GUARANTEE
The DII Group, Inc. (the "Guarantor") hereby unconditionally and absolutely
guarantees to IBM the performance and payment of any and all monetary and other
obligations of Multek under this Agreement and the other Operative Agreements to
which Multek in accordance herewith and therewith is a party, independently of
the obligations of Multek, and the Guarantor hereby agrees to indemnify IBM
against any Loss
35
40
(as defined in the Asset Purchase Agreement) incurred by reason of any failure
of Multek to perform and pay such obligations in such manner. This guarantee is
a direct, absolute, unconditional, irrevocable, present and continuing guarantee
of performance and payment, and is a direct and primary obligation of the
Guarantor, and is in no way conditional or contingent upon any attempt to
enforce performance upon, or collection from, Multek or upon any other event,
contingency or circumstances whatsoever. This shall be a continuing guarantee
and shall cover and secure any balance owing by Multek under this Agreement and
the other Operative Agreements to which Multek is a party, and IBM shall not be
obligated to exhaust its recourse against Multek before being entitled to
payment from the Guarantor, of all and every of the obligations hereby
guaranteed. The obligations of the Guarantor set forth above shall not be
subject to any deduction, diminution, abatement, setoff, recoupment, suspension,
determent, reduction, or defense (other than valid defenses Multek has against
IBM and all other rights of Multek under this Agreement and the other Operative
Agreements, and full and strict compliance by the Guarantor of its obligations
hereunder) and shall remain in full force and effect without regard to, and
shall not be released, discharged or in any way affected by, any circumstance or
condition whatsoever (whether or not the Guarantor or Multek shall have any
knowledge or notice thereof), other than full and strict compliance by the
Guarantor of its obligations hereunder.
36
41
INTERNATIONAL BUSINESS MACHINES
CORPORATION
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
ATTEST ------------------------------------
Title:Corporate Development Consultant
Date: August 18, 1997
MULTILAYER TEK L.P.
▇▇▇▇ ▇. ▇▇▇▇▇▇ By:/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
ATTEST ------------------------------------
Title: Senior Vice President, Chief
Financial Officer and
Secretary of Multek Texas,
Inc. in its capacity as
General Partner.
Date: August 18, 1997
AS TO ARTICLE 12 ONLY:
THE DII GROUP, INC.
▇▇▇▇ ▇. ▇▇▇▇▇▇ By:/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
ATTEST ------------------------------------
37
42
Title: Senior Vice President, Chief
Financial Officer and
Secretary
Date: August 18, 1997
38
43
STATE OF NEW YORK )
: ss.:
COUNTY OF WESTCHESTER )
On the 18th day of August, 1997, before me personally appeared ▇▇▇▇ ▇.
▇▇▇▇▇▇ to me known, who, being duly sworn did depose and say that he resides at
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇, that he is Corporate Development Consultant of
International Business Machines Corporation, the corporation described in and
which executed the foregoing instrument; and that he signed his name thereto by
order of the board of directors of said corporation.
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Notary Public
STATE OF )
: ss.:
COUNTY OF )
On the 18th day of August, 1997, before me personally appeared ▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇. to me known, who, being duly sworn did depose and say that is the
Senior Vice President, Chief Financial Officer and Secretary of Multek Texas,
Inc., in its capacity as General Partner of Multilayer Tek L.P., the Texas
limited partnership described in and which executed the foregoing instrument;
and that he signed his name thereto on behalf of said limited partnership.
/s/ ▇▇▇▇▇▇▇ ▇▇▇ Skubina
------------------------------------
Notary Public
44
STATE OF )
: ss.:
COUNTY OF )
On the 18th day of August, 1997, before me personally appeared ▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇. to me known, who, being duly sworn did depose and say that he
resides at , that he is
Chief Financial Officer of The DII Group, Inc., the corporation described in and
which executed the foregoing instrument; and that he signed his name thereto by
order of the board of directors of said corporation.
/s/ ▇▇▇▇▇▇▇ ▇▇▇ Skubina
-----------------------------------
Notary Public
45
EXHIBIT A*
DESCRIPTION OF THE IBM PROPERTY
* Exhibit A is not included and will be furnished supplementally to the
Commission upon request.
46
EXHIBIT A1*
DESCRIPTION OF THE MULTEK SITE
* Exhibit A1 is not included and will be furnished supplementally to the
Commission upon request.
EXHIBIT B
SERVICES AGREEMENT
(attached hereto and made a part hereof)
(Part of the Project Operations Agreement)
Except as otherwise specifically defined herein, all words shall be given
the meaning assigned to them in the Project Operations Agreement, to which this
Agreement is attached. All references herein to Multek shall include, without
limitation, Multek and each of its Affiliates.
In accordance with and subject to the provisions of this Project
Operations Agreement, certain services, utilities, supplies and facilities (the
"Services") shall be furnished by IBM to Multek and to the Multek Site,
including Buildings 60, 61, 63, 64, and 65 (the "Buildings"), and certain
Services shall be furnished by Multek to IBM.
1. General Provisions:
1.1 (a) IBM reserves the right to stop any Services or restrict or
prohibit access to the Access Roads, and Multek reserves the right
to stop any Services, in each case when required by Laws, or when
necessary by reason of accident, emergency, Force Majeure event,
required maintenance, repairs or replacements, rule or regulation of
a third party Service provider (e.g. utility company), in each case
for as long as may be reasonably required; provided, however, that
IBM and Multek shall each exercise reasonable good faith efforts, in
accordance with commercially reasonable standards, to minimize any
interference with the
47
operation of the business of the other and shall, if practicable,
provide reasonable notice thereof to the other (which may be oral).
Neither party shall be liable to the other for any loss or damage
which it incurs because of the interruption of any Service if the
party causing the interruption acts reasonably under the
circumstances.
(b) IBM and Multek shall negotiate in good faith to mutually agree
upon arrangements for IBM to stop any Services for repairs,
alterations, replacements or improvements which are necessary or
desirable in IBM's sole judgement. If IBM and Multek fail to agree
on the time of the shutdown within a reasonable period under the
circumstances, as determined by IBM, IBM shall have the right to
stop any Services for a period not greater than twenty-four (24)
hours. However, (i) except in an emergency or as required by Law,
IBM may not stop any Services for a period greater than twenty-four
(24) hours without the consent of Multek, which consent shall not be
unreasonably withheld or delayed; (ii) if IBM stops any Services,
IBM shall exercise reasonable efforts to minimize any interference
with the operation of Multek's business and shall provide reasonable
notice thereof to Multek.
(c) Further and notwithstanding anything to the contrary contained
herein, IBM shall have the right to have planned, seventy-two (72)
hour continuous, simultaneous shutdown of all Services once during
each calendar year of the Term at a time to be mutually agreed upon
in good faith by both parties at least forty five (45) days prior to
such shutdown date. If, however, the parties do not agree on a
planned shutdown within thirty (30) days after notice to Multek of
IBM's planned shutdown date, the shutdown may be scheduled by IBM in
its sole discretion during the Memorial Day or Labor Day weekend as
IBM shall specify in a notice from IBM to Multek not later than
thirty (30) days prior to the scheduled
48
shutdown by IBM. If additional shutdowns should, in IBM's sole
judgement, be required for maintenance, alterations, replacements or
improvements, IBM and Multek shall negotiate in good faith to
mutually agree upon the times and duration of any additional
shutdown.
1.2 Multek shall first notify IBM before making any modifications to the
systems of the Buildings which may impact the existing firm maximum
(which means existing plus available) capacities/volumes/ pounds/
gallons, or which impact agreed upon delivery variations, as each is
set forth in SCHEDULE 12 of this Agreement, specifying the proposed
scope and manner of proposed modifications and when they are planned
to be done. IBM and Multek, acting in good faith, shall mutually
agree upon the times and dates Multek shall make such modifications
and whether these changes will, in IBM's reasonable judgment,
adversely affect its ability to provide Services as required by this
Agreement. Failure by Multek to notify IBM, and to resolve any
dispute regarding the impact of the proposed change shall relieve
IBM of any responsibility or liability hereunder in connection with
any Services affected by the proposed change.
1.3 If there is a curtailment of a utility Service ("curtailed
Service") to the Multek Site by action or fault of a third party
Service provider, such as a "brownout," IBM shall endeavor in good
faith to provide to Multek, if reasonably feasible, an equitable pro
rata share of the curtailed Service which remains available to the
Complex. Multek and IBM shall each pay fifty percent (50%) of any
costs required to allocate the curtailed Service.
1.4 All mechanical Services which require water treatment, including
steam, cooling tower water and chilled water, will be chemically
treated by IBM in accordance with the then current practice. IBM
will advise Multek of the chemicals used to treat such water.
However, IBM shall not be
49
liable for degradation of piping and equipment located on the Multek
Site.
1.5 IBM shall promptly provide Multek with copies of all notices of
possible health hazards and similar raw utility concerns received by
IBM from IBM's suppliers of raw utilities.
1.6 IBM shall promptly provide Multek with copies of any notices of
impending rate changes received by IBM from third party Service
providers which affect rates being charged to Multek hereunder.
However, IBM's failure to do so shall not constitute an Event of
Default by IBM or excuse Multek from paying increases on account of
any such rate changes; provided, that if IBM has not billed Multek
for charges based on the revised rate change within twenty-four (24)
months after IBM is notified of the change, IBM shall have
conclusively waived any claim to be paid such charges.
1.7 Multek shall own and maintain, repair and replace, at its sole cost
and expense, all meters presently installed or to be installed by or
on behalf of Multek on the Multek Site; except that until the term
of the Lease ends, IBM shall own all submeters which measure
regulated utilities. As provided in Article 4 of the Project
Operations Agreement, IBM shall determine the accuracy of all
utility meters and certify the accuracy to Multek. Multek shall
allow IBM access to all meters at all reasonable times.
1.8 If Multek requests additional Services which will result in
requirements for capacities/volumes/pounds/ gallons which exceed the
existing firm maximum (which means existing plus available)
capacity/volumes/pounds/ gallons, or which impact agreed upon
delivery variations, as each is set forth in SCHEDULE 12 of this
Agreement on the date hereof, and IBM (in its reasonable discretion)
determines that capacity must be added, IBM shall notify Multek of
such determination and the estimated cost of adding
50
such capacity. If Multek still requests such additional services,
IBM shall manage the design and construction of the added facilities
with architects and contractors selected by IBM, and Multek shall
pay all design, construction and other costs and expenses, including
the fees of consultants, attorneys and Governmental Authorities,
which are incurred by IBM to satisfy Multek's request. Similarly, if
IBM requests that Multek store additional new chemicals and/or waste
product at the existing CDC, or that Multek treat greater volumes of
waste product at the WFC (defined in Section 11), and Multek (in its
reasonable discretion) determines that capacity must be added,
Multek shall notify IBM of such determination and the estimated cost
of the additional capacity. If IBM still makes its request, Multek
shall manage the design and construction of the added facilities
with architects and contractors selected by Multek, and IBM shall
pay all design, construction and other costs and expenses, including
the fees of consultants, attorneys and Governmental Authorities, to
satisfy IBM's request.
1.9 Until such time as IBM has completed making the Utilities/Services
Independent and has obtained the Subdivision, and the Real Estate
Closing (defined in the Asset Purchase Agreement) has been
completed, IBM shall facilitate the supply of electricity, Domestic
Water and Waste Water service to Multek in accordance with and
subject to provisions of the Project Operations Agreement, including
Sections 2, 9 and 10 of this Agreement and the following provisions.
(a) All electricity, Domestic Water, and Waste Water service
provided by IBM to Multek is furnished at IBM's cost (without markup
of any kind), solely as an incident of Multek's tenancy under the
Lease and only for Multek's use. Multek shall not resell or allow
the use by others of any Waste Water service, electricity, or
Domestic Water furnished by IBM hereunder.
51
(b) Supplementing and confirming other provisions of the Project
Operations Agreement:
(i) Multek's electricity, Domestic Water and Waste Water
service shall be submetered.
(ii) Electrical consumption, Domestic Water consumption, and
Waste Water charges based on Domestic Water consumption for
common areas and facilities will be IBM's and not Multek's
responsibility.
(iii) Any disputes relating to the computation of Multek's
▇▇▇▇ for electricity, Domestic Water consumption or Waste
Water charges, or the accuracy of the submetering device, will
be resolved by Mediation between Multek and IBM.
(iv) Multek acknowledges that by signing the Project
Operations Agreement, IBM has provided Multek with a true and
correct copy of 30 T.A.C. Section 291.125.
(c) Bills for Multek's electricity consumption, Domestic Water
consumption and Waste Water services shall be rendered by IBM for
the same period as the bills issued by the City of Austin or its
successor. Bills will be issued to Multek based upon submeter usage.
(d) A ▇▇▇▇ for any of these services is delinquent if not paid by
the due date indicated on the ▇▇▇▇, unless the ▇▇▇▇ is issued less
than seven (7) days before the due date, in which case the due date
is seven (7) days after the date the ▇▇▇▇ was issued. The date the
▇▇▇▇ is issued is the postmark date on the envelope of the ▇▇▇▇ or
on the ▇▇▇▇ itself. If the due date falls on a weekend or Holiday,
the due date for payment purposes shall be the next date after the
due date.
52
(e) Estimated bills will be rendered if the meter has been tampered
with or is out of order and, in such case, the ▇▇▇▇ shall be
distinctly marked as such.
(f) If ▇▇▇▇▇▇▇▇ are determined to be in error, IBM shall calculate a
billing adjustment. If Multek has overpaid, the adjustment shall be
made for the entire period of the overcharges. If Multek was
underbilled, IBM will backbill Multek for the amounts underbilled
for a period not to exceed six (6) months. If the underbilling is
$25.00 or more, Multek may enter into a deferred payment plan for
the same length of time as that of the underbilling.
(g) Unless clearly designated by Multek, all payments received from
Multek shall be applied first to sums due IBM under the Project
Operations Agreement other than utilities, and then to utilities. A
reconnect fee of $10.00 shall be applied if electric service is
reconnected after being disconnected for nonpayment of bills.
(h) Electric, Domestic Water and Waste Water service may be
disconnected if:
(i) Multek fails to pay its electric, Domestic Water and Waste
Water ▇▇▇▇ within twelve (12) days from the date the ▇▇▇▇ was
issued (this provision shall supersede Article 6 of the
Project Operations Agreement for purposes of this clause); and
(ii) IBM has mailed or hand-delivered to Multek a termination
notice at least five (5) days prior to the date of
disconnection.
(i) Prior to furnishing Domestic Water and electricity to Multek
during the term of the Lease, IBM shall calibrate all submeters
which will be used to measure Domestic Water and electricity. Costs
of calibration shall be shared as agreed upon in Section 4.3 of the
Project
53
Operations Agreement to which this EXHIBIT B is attached.
2. Electrical Power Service
IBM agrees that electrical power is one of four (4) Utility/Services
that IBM shall make Independent. Until accomplished, the following shall
apply:
2.1 All electrical substations (the "Substations") are located in the
Buildings. The existing switch gear is located on the IBM
Property as part of the Utility Plant. The intent of the parties
is to run a direct feed from the City of Austin electrical
facility to a new switch gear to be located on the Multek Site.
Until that work is completed, IBM shall make reasonable efforts
to arrange with the City of Austin to rent IBM's switch gear to
the City so that electrical service will be supplied to Multek by
the City through IBM's existing switchgear. Until then or until
electricity is made Utility/Services Independent, IBM shall
provide the Services described on SCHEDULE 1.
2.2 Electric meters are located within the Utility Plant and operational
to measure consumption of electricity furnished to Multek. These
meters have not been certified, but readings from them shall be
conclusive and binding on IBM and Multek unless clearly shown by one
party to be inaccurate and, if the parties are unable to agree,
through Mediation. Multek shall pay for electricity provided through
the Substations as measured by these electric meters in accordance
with the following. The City of Austin or, if the City and IBM or
the City and Multek agree, IBM shall cause the meters to be read on
a monthly basis to determine the electrical consumption during each
particular monthly billing period. The electrical consumption as
determined by such meter readings shall be multiplied by the then
(at the time of the particular meter readings) applicable service
classification rates at which IBM purchases electricity from the
utility company (including any and all sales taxes, fuel charges,
time of day
54
charges, as well as any and all other component charges thereof).
The product thus obtained shall constitute the electric consumption
charge to be paid by Multek for the particular monthly billing
period to which the meter readings and the City's or IBM's ▇▇▇▇
relates, and shall be payable within forty-five (45) days after the
receipt of the ▇▇▇▇ therefor by Multek.
2.3 IBM owns and shall maintain, repair and replace, subject to reimbursement as
herein provided in SCHEDULE 1, the electrical power feed from the
electrical service center or point of delivery from the public
utility up to points it enters the Buildings. Multek owns and
shall maintain, repair and replace, at its sole cost and expense,
the electrical system extending from the entry point into the
Buildings, including all cables, wiring, conduit and equipment such
as panels, lights, switches, and tools. In addition, Multek owns and
shall maintain, at its sole cost and expense, the diesel generators,
associated controls, batteries, equipment and distribution system
located within the Buildings. Both parties shall comply with all
Laws applicable to the maintenance, repair and replacement of its
electrical equipment and facilities, and IBM with respect to the
supply of electricity to Multek during the transition period.
55
3. Steam Service
3.1 IBM shall provide non-potable Uncontaminated process steam to the
Buildings (with condensate return) in accordance with SCHEDULE
2. For purposes of this Sections 3, 5, and 6, the word
"Uncontaminated" shall mean free of process chemicals or other
pollutants which would impair the use of the steam or water, as
the case may be, for its intended purpose or use. Steam meters
are in place and operational to measure Multek's use of steam.
These meters have not been certified, but readings from them
shall be conclusive and binding on IBM and Multek unless
clearly shown by one party to be inaccurate and, if the parties
are unable to agree, through Mediation.
3.2 IBM owns and shall maintain, repair and replace, subject to
reimbursement as herein provided in SCHEDULE 2, the steam,
condensate and pipe distribution systems located in the Utility
Plant as well as the Utility System extending up to the points
they enter the Buildings. Multek owns and shall maintain,
repair and replace, at its sole cost and expense, the steam and
condensate systems in the Buildings from the Buildings' entry
points.
3.3 IBM shall cause the steam meters to be read on a monthly basis to
determine the use of steam during each particular monthly
billing period. The steam use as determined by such meter
readings shall be multiplied by the then, at the time of the
steam meter(s) reading, "Steam Rate." The Steam Rate agreed
upon for calendar year 1997 is set forth in SCHEDULE 2. The
product thus obtained shall constitute the equivalent of the
steam use charge to be paid by Multek in respect of the
particular monthly billing period to which IBM's ▇▇▇▇ shall
relate.
3.4 IBM represents that the steam and condensate system is a closed loop
system and, as currently operated and existing on the Closing
Date, is (i) in working order; (ii) Uncontaminated; and (iii)
sufficient to return all condensate in an Uncontaminated
56
condition. Multek shall use all steam in a closed loop system
and return all condensate to the Utility Plant in an
Un-contaminated condition. If there is any such impairing
contamination caused or discovered by Multek or IBM in the
steam and/or condensate system, the party which causes or
discovers such contamination shall immediately orally notify
the other party (confirmed in writing within forty-eight (48)
hours of the oral notice). The party who caused such
contamination (the "offending party") shall take action within
twenty-four (24) hours to correct the cause of such
contamination. To the extent the offending party does not take
action within the twenty-four (24) hour period to correct the
cause of such contamination (and prosecute same with due
diligence and continuity to completion), the other party may
correct such contamination and ▇▇▇▇ the offending party for any
and all costs incurred by the other party therefor. The
offending party shall reimburse the other party for such costs
within forty-five (45) days after receipt of a ▇▇▇▇ therefor as
well as for any costs incurred by the other party to repair or
replace any parts or equipment damaged by such contamination by
the offending party.
4. Compressed Air Service
4.1 IBM shall provide the compressed air, cooled and dried for
production only and not for human consumption (hereinafter the
"Compressed Air") to Buildings in accordance with the
provisions of SCHEDULE 3.
4.2 IBM owns and shall maintain, repair and replace, subject to
reimbursement as herein provided in SCHEDULE 3, sufficient air
compressors and compressed air piping distribution system
necessary to supply the Compressed Air to the Buildings' entry
points.
4.3 Multek owns and shall maintain, repair and replace, at its sole cost
and expense, internal Compressed Air piping (to receive and
convey the Compressed Air)
57
in the Buildings, from the Buildings' entry points.
4.4 IBM has installed consumption meters in the Buildings to measure
energy required to produce the Compressed Air used by Multek.
These meters have not been certified, but readings from them
shall be conclusive and binding on IBM and Multek unless
clearly shown by one party to be inaccurate and, if the parties
are unable to agree, through Mediation.
4.5 IBM shall cause the consumption meters to be read on a monthly basis
to determine the use of Compressed Air during each particular
monthly billing period. The use of Compressed Air, as
determined by such meter readings, shall be multiplied by the
Compressed Air Rate in effect at the time of the particular
meter readings. The Compressed Air Rate agreed upon for 1997 is
set forth in SCHEDULE 3. The product thus obtained shall
constitute the Compressed Air use charge to be paid by Multek
in respect of the particular monthly billing period to which
IBM's ▇▇▇▇ shall relate. The ▇▇▇▇ shall be payable within
forty-five (45) days after the receipt thereof by Multek.
4.6 If there is an unplanned equipment outage, IBM, at Multek's request,
shall exercise reasonable efforts to obtain rental air
compressors to continue to supply compressed air to Multek and
will endeavor to do so in a reasonable period of time. Multek
shall pay IBM for such rental air compressors within forty-five
(45) days after receipt of IBM's ▇▇▇▇ therefor.
4.7 Multek may elect to permanently discontinue purchasing Compressed
Air from IBM. To make such election, Multek shall give not less
that thirty (30) days prior notice to IBM. As of the effective
termination date as provided in the notice, IBM shall no longer
be required to furnish Compressed Air to Multek, and IBM in its
sole discretion may sell to third parties or otherwise dispose
of its
58
compressors that it used to produce Compressed Air for Multek.
5. Chilled Water Service
5.1 IBM shall provide non-potable Uncontaminated chilled water ("Chilled
Water"), in accordance with the provisions of SCHEDULE 4.
5.2 IBM owns and shall maintain, repair and replace, subject to
reimbursement as herein provided in SCHEDULE 4, a chilled water
Utility System necessary to supply such Chilled Water from the
Utility Plant to the Buildings' entry points. Multek owns and
shall maintain, repair and replace, at its sole cost and
expense, a chilled water piping system to receive and convey
the Chilled Water, from the Buildings' entry points.
5.3 IBM has installed meters in the Buildings to measure Multek's use of
Chilled Water. These meters have not been certified, but
readings from them shall be conclusive and binding on IBM and
Multek unless clearly shown by one party to be inaccurate and,
if the parties are unable to agree, through Mediation.
5.4 IBM shall cause the Chilled Water meters to be read on a monthly
basis to determine the use of Chilled Water during each
particular monthly billing period. The Chilled Water use, as
determined by such meter readings, shall be multiplied by the
Chilled Water Rate in effect at the time of the particular
meter readings. The Chilled Water Rate agreed upon for 1997 is
set forth in SCHEDULE 4. The product thus obtained shall
constitute the Chilled Water use charge to be paid by Multek in
respect of the particular monthly billing period to which IBM's
▇▇▇▇ shall relate. The ▇▇▇▇ shall be payable within forty-five
(45) days after the receipt thereof by Multek.
5.5 IBM represents that the Chilled Water system is a closed loop system
and, as currently operated and existing on the Closing Date, is
(i) in working order; (ii) Uncontaminated; and (iii) sufficient
to return all Chilled Water in an Uncontaminated condition.
Multek shall use all Chilled Water in
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a closed loop system and return all chilled Water to the
Utility Plant in an Uncontaminated condition. If there is any
such impairing contamination caused or discovered by Multek or
IBM in the Chilled Water System, the party which causes or
discovers such contamination shall immediately orally notify
the other party (confirmed in writing within forty-eight (48)
hours of the oral notice). The party who caused such
contamination (the "offending party") shall take action within
twenty-four (24) hours to correct the cause of such
contamination. To the extent the offending party does not take
action within the twenty-four (24) hour period to correct the
cause of such contamination (and prosecute same with due
diligence and continuity to completion), the other party may
correct such contamination and ▇▇▇▇ the offending party for
any and all costs incurred by the other party therefor. The
offending party shall reimburse the other party for such costs
within forty-five (45) days after the receipt of a ▇▇▇▇
therefor as well as for any costs incurred by the other party
to repair or replace any parts or equipment damaged by such
contamination by the offending party.
6. Cooling Tower Water
6.1 IBM shall provide non-potable Uncontaminated cooling tower water
("Cooling Tower Water") in accordance with the provisions of
SCHEDULE 5.
6.2 IBM owns and shall maintain, repair and replace, subject to
reimbursement as herein provided in SCHEDULE 5, a cooling tower
water system necessary to supply such Cooling Tower Water from
the Utility Plant to the Buildings' entry points. Multek owns
and shall maintain, repair and replace, at its sole cost and
expense, a cooling tower water piping system to receive and
convey the Cooling Tower Water from the Buildings' entry
points.
6.3 The Cooling Tower Water Rate agreed upon for 1997 is set forth in
SCHEDULE 5 and shall constitute the Cooling Tower Water use
charge to be paid by
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Multek in respect of the particular monthly billing period to
which IBM's ▇▇▇▇ shall relate. The ▇▇▇▇ shall be payable within
forty-five (45) days after the receipt thereof by Multek.
6.4 IBM represents that the Cooling Tower Water system is a closed loop
system and, as currently operated and existing on the Closing
Date, is (i) in working order; (ii) Uncontaminated; and (iii)
sufficient to return all Cooling Tower Water in an
Uncontaminated condition. Multek shall use all Cooling Tower
Water in a closed loop system and return all cooling tower
water to the Utility Plant in an Uncontaminated condition. If
there is any such impairing contamination caused or discovered
by Multek or IBM in the Cooling Tower Water System, the party
which causes or discovers such contamination shall immediately
orally notify the other party (confirmed in writing within
forty-eight (48) hours of the oral notice). The party who
caused such contamination (the "offending party") shall take
action within twenty-four (24) hours to correct the cause of
such contamination. To the extent the offending party does not
take action within the twenty-four (24) hour period to correct
the cause of such contamination (and prosecute same with due
diligence and continuity to completion), the other party may
correct such contamination and ▇▇▇▇ the offending party for any
and all costs incurred by the other party therefor. The
offending party shall reimburse the other party for such costs
within forty-five (45) days after the receipt of a ▇▇▇▇
therefor as well as for any costs incurred by the other party
to repair or replace any parts or equipment damaged by such
contamination by the offending party.
6.5 Multek understands that IBM has reduced the cost of Cooling Tower
Water as well as Chilled Water by implementing a recycling
program. To the extent that Multek does not continue this
recycling program, a written description of which has been
delivered to Multek, the cost of Cooling Tower Water as well as
Chilled Water shall increase.
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7. Fire Protection Water System, Detectors and Extinguisher Service
IBM agrees that the fire protection water system is one of four (4)
Utility/Services that IBM shall make Independent. Until accomplished, the
following shall apply:
7.1 (a) IBM shall make available to Multek the existing fire loop system
servicing the Buildings. This fire loop system consists of
piping which connects to the City of Austin water supply system
up to the entry points to the Buildings, as well as the
hydrants and backflow preventers which are located on the IBM
Property.
(b) IBM owns and shall maintain, repair and replace, subject to
reimbursement herein provided, the existing fire loop system. Multek
owns and shall maintain, repair and replace, at its sole cost and
expense, the internal fire protection water system (including
alarms, detectors, extinguishers, piping, and wiring) from the point
the system enters the Multek Site, including any systems which serve
the Buildings, tank farms, industrial waste treatment plant and the
chemical distribution center located on the Multek Site. Both
parties shall comply with all Laws applicable to the maintenance,
repair and replacement of its fire protection equipment and
facilities, and IBM with respect to the supply of the fire
protection water to Multek during the transition period.
7.2 At such times when there has been use of fire protection water for
the benefit of the Multek Site, IBM shall cause a reading to be
made from the water meters. These meters have not been
certified, but readings from them shall be conclusive and
binding on IBM and Multek to determine the amount of water that
was used unless clearly shown by one party to be inaccurate
and, if the parties are unable to agree, through Mediation. IBM
shall ▇▇▇▇ Multek therefor in accordance with SCHEDULE 6, using
the then City of Austin's water rate (including sales, use and
other taxes and charges) charged to IBM. Multek shall pay IBM's
▇▇▇▇(s) therefor within forty-five (45) days after the receipt
thereof by
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Multek. If fire protection water shall be used at locations at
other areas on the Complex at the same time when used for the
benefit of the Multek Site, then IBM, in good faith, shall
solely determine the allocation of such use when reading the
water meters and prorate its ▇▇▇▇ to Multek accordingly.
8. Fuel Oil
8.1 Multek shall own and shall maintain, at its sole expense, the
existing fuel oil tanks and all associated piping and equipment
located on the Multek Site. Multek, in its sole discretion, may
demolish and close any or all such tanks on thirty (30) days
prior notice to IBM. All fuel oil tanks on the Multek Site are
marked on ATTACHMENT I.
8.2 Multek shall make its own arrangements for supply of fuel oil to the
Buildings. Multek shall receive or otherwise transfer fuels to
or from transport trucks or vehicles only at places that
provide secondary containment so as to prevent the unplanned
releases of fuel to the environment. Multek shall use its best
efforts to cause its suppliers to use the shortest route from
off-site to the tank farm and shall be responsible, as provided
in Sections 16 and 17, for all spills and other releases to the
environment from such fuel oil tanks anywhere on or about the
Complex.
9. Domestic Water Service
IBM agrees that domestic water is one of four (4) Utilities/ Services
that IBM shall make Independent. Until accomplished, the following shall apply:
9.1 IBM shall provide Multek with potable domestic water ("Domestic
Water") in accordance with the provisions of SCHEDULE 6.
9.2 IBM owns and shall maintain, repair and replace, subject to
reimbursement as herein provided in SCHEDULE 6, domestic water
piping and equipment necessary to supply Domestic Water from
the point of delivery
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from the City of Austin to the Building's entry points. Multek
owns and shall maintain, repair and replace, at its sole cost
and expense, internal domestic water piping and equipment from
the Buildings' entry points. Both parties shall comply with all
Laws applicable to the maintenance, repair and replacement of
its Domestic Water System, and IBM with respect to the supply
of Domestic Water to Multek during the transition period.
9.3 IBM has installed meters to measure Multek's use of Domestic Water.
These meters have not been certified, but readings from them
shall be conclusive and binding on IBM and Multek unless
clearly shown by one party to be inaccurate and, if the parties
are unable to agree, through Mediation.
9.4 IBM shall cause the Domestic Water meters to be read on a monthly
basis to determine the use of Domestic Water during each
particular monthly billing period. The Domestic Water use, as
determined by such meter readings, shall be multiplied by the
rates in effect at the time of the meter readings (including
sales, use and other taxes and charges) at which IBM purchases
water from the City of Austin. The product thus obtained and
other charges agreed upon in SCHEDULE 6 shall constitute the
Domestic Water use charge to be paid by Multek in respect of
the particular monthly billing period to which IBM's ▇▇▇▇ shall
relate. The ▇▇▇▇ shall be payable within forty-five (45) days
after the receipt thereof by Multek.
10. Sanitary Waste System Service
IBM agrees that the sanitary waste system is one of four (4)
Utilities/Services that IBM shall make Independent.
Until accomplished, the following shall apply:
10.1 IBM owns and shall maintain, repair and replace, subject to
reimbursement as herein provided in SCHEDULE 6, the sanitary
waste system which services the entire Complex, except for the
Internal Sanitary
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System. Multek owns and shall maintain, repair and replace, at
its sole cost and expense, the internal sanitary waste system
from the point of entry into the Buildings, including pumps and
piping within the Buildings (the "Internal Sanitary System").
Both parties shall comply with the Laws applicable to the
maintenance, repair and replacement of its Sanitary Waste
System, and IBM with respect to the supply of sanitary waste
Services during the transition period.
10.2 If there is any blockage or stoppage in the system, other than in
the Internal Sanitary System, which is caused by Multek's
negligence or misconduct, Multek shall reimburse IBM for any
costs incurred by IBM to clear or to correct the same. If there
is any blockage or stoppage in the Internal Sanitary System
which is caused by IBM's negligence or misconduct, IBM shall
reimburse Multek for any costs incurred by Multek to clear or
correct the same. Multek shall use and maintain, repair and
replace the Internal Sanitary System in accordance with Laws at
its sole cost and expense. Multek shall be liable for and shall
promptly perform at its sole cost and expense any and all
cleanup of the Internal Sanitary System required by any Laws
due to the discharge of any unlawful substances into the
Internal Sanitary System or any other part of the sanitary
system serving the Complex.
10.3 The parties have agreed that for 1997, Multek shall pay to IBM the
amount set forth in SCHEDULE 6 for this Service. Such payments
shall be made within forty-five (45) days after Multek's
receipt of IBM's bills therefor, which bills shall be
accompanied by a copy of the underlying ▇▇▇▇ received from the
City of Austin. IBM shall ▇▇▇▇ Multek on the same cycle as IBM
is billed by the City of Austin.
11. Industrial Waste Water Service
The existing industrial waste water treatment plant ("WCF") is located on
the Multek Site. The plant shall be operated by Multek, at its sole expense,
whether or not title to the Multek Site is
65
transferred to Multek; except that if IBM decides not to construct a new
industrial waste water treatment plant on another part of the Complex, the
following shall apply and Multek shall provide WCF Services to IBM for a fee:
11.1 Multek shall maintain, repair and replace, subject to reimbursement
by IBM as herein provided, the WCF which is comprised of the
industrial waste water structures, piping, transfer tanks and
pumping equipment located on the Multek Site.
11.2 Multek shall process, in compliance with all applicable Laws
(including IBM's City of Austin Waste Water Permit), IBM's
industrial waste water in accordance with the provisions of
SCHEDULE 7.
11.3 The parties have agreed that for 1997, IBM shall pay Multek the
amount set forth in SCHEDULE 7 for this Service. IBM shall pay
Multek such amount within forty-five (45) days after the month
during which the Service was provided.
11.4 IBM will provide data to Multek establishing the levels or
concentrations of all pollutants in IBM's effluent which are
regulated and required to be reported to the City of Austin and
that demonstrates that IBM's wastewater discharges will meet
the City of Austin's wastewater effluent limitation standards
after being properly treated at the WCF. In accordance with
current procedures, IBM will provide such data to Multek twice
a week. IBM, upon discovery, shall immediately notify Multek of
any concentration of contamination in its discharge or any
upset which would cause the permit limits to be exceeded. IBM
shall reimburse Multek for any fine or penalty levied against
Multek because of any such exceedance.
12. Security
IBM shall provide control of access to the Complex by badge readers,
subject to its right to terminate this Service pursuant to Section 26, in
accordance with the provisions of SCHEDULE 8.
13. Stormwater Runoff
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13.1 As part of the cost of making the Utility/Services Independent, IBM,
at its sole cost and expense, has completed or will complete
physical modifications to the stormwater collection system so
that stormwater will not run off from the Multek Site or IBM
Property to the other; the one exception will be the runoff of
Multek's two (2) parking lots which are located to the east of
Building No. 60. The parties have agreed that once these
physical modifications are complete, IBM will test the runoff
to determine and define the quality of the stormwater runoff
from the Multek Site. To the extent that such monitoring
demonstrates that the runoff is sufficiently uncontaminated and
IBM and Multek reasonably conclude that no additional
collection and/or treatment requirements will be imposed in
connection with obtaining a permit for the discharge of such
stormwater pursuant to Federal regulations, Multek shall assume
all responsibility for and with respect to the stormwater
runoff from the Multek Site at its sole cost and expense. If
there is a dispute with respect to stormwater runoff, the
parties will resolve the issue by Mediation.
13.2 As part of the Services to be provided under Section 13, IBM shall
provide the Services described in SCHEDULE 9.
14. Landscaping, Grounds Service and Access Roadway Maintenance
Consistent with the current service contracts and service levels stated
therein, as determined by IBM and its service provider, IBM shall provide
landscape, grounds, and access roadway maintenance services to the applicable
portions of the Complex in accordance with the provisions of SCHEDULE 10. To the
extent IBM uses treated industrial waste waters to irrigate the Multek Site
under IBM's Service contracts, these waters will not contain any Hazardous
Substance that would cause Multek to incur liability for remedial activity under
any environmental Laws. IBM shall indemnify Multek for any costs Multek incurs
to remediate contamination required by Law to be remediated and which results
from contaminated irrigation waters supplied by IBM; provided, Multek can
demonstrate that such
67
contamination was the proximate cause of any such required remediation.
15. Environmental General
15.1 Notwithstanding the provisions of this Section 15 to the contrary,
neither IBM or Multek shall install any underground storage
tanks, injection or dry ▇▇▇▇▇, or surface impoundments of any
kind on the Complex. Either may install or use above ground
storage tanks (including piping and valves), so long as the
installation of the tanks and use of the contents in the tanks
is for operations at the Complex; is in compliance with
applicable Laws; is necessary for the conduct of the business
activities at the Complex, and is in accordance with safe and
workmanlike procedures that reasonably minimize any threat to
and are protective of human health and the environment. The
party hereto who installs or uses an above ground storage tank
is solely responsible for any liability or claim resulting
from, relating to or arising out of such installation or use,
and it shall indemnify and hold the other party hereto and
their respective directors, employees, and lenders, successors
and assigns harmless from and defend them against any liability
or claim resulting from, relating to or arising out of such
installation or use.
15.2 IBM and Multek are strictly prohibited from disposing of any
Hazardous Substances on the Complex. Each party hereto shall be
solely responsible for arranging for the proper and
legally-authorized temporary storage on or off the Complex,
transportation to and from the Complex, and for off-site
disposal of all Hazardous Substances brought upon, used,
stored, transported to or generated by it or its agents at the
Complex. If required by Laws, the party hereto intending to
transport and dispose of Hazardous Substances shall obtain an
EPA hazardous waste generator identification number for the
transportation to and disposal of such wastes and waste waters
at off-site disposal areas.
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15.3 Neither IBM nor Multek (other than as required by Law) shall,
without the approval of the other, which either may withhold
from the other in its sole discretion, permit any part of the
Complex to become, under any applicable Laws, (1) a hazardous
waste treatment or disposal facility except an industrial waste
water treatment plant; (2) a solid waste treatment or disposal
facility (including an incineration facility, a solid waste
landfill or a public disposal facility); (3) a solid or
hazardous waste transfer station; (4) a nuclear or radioactive
material storage facility; (5) a medical waste treatment or
disposal facility; (6) a waste tire collection site; (7) a
mining waste storage or disposal facility; (8) a used oil
recycling, marketing or burning facility; (9) a special wastes
treatment or disposal facility; or (10) a facility that
accepts, receives, collects, stores, treats, or disposes of
solid wastes, Hazardous Substances or other wastes that are
generated off the Complex.
15.4 IBM and Multek are each responsible for compliance of their
respective employees, contractors, subcontractors, tenants,
subtenants and other invitees with these provisions.
15.5 (a) IBM and Multek shall each be responsible for obtaining (except
during any transition period, as herein provided) and
maintaining any environmental permits or approvals, or making
any notifications or reports, that are required under any
applicable Laws or permits for conduct of, on or related to the
portion of the Complex it or their respective employees,
contractors, subcontractors, tenants, subtenants and other
invitees control or possess. If, as contemplated, Multek
operates its facilities under a permit or license issued to
IBM, Multek shall comply with all obligations and
responsibilities imposed on IBM by such permit or license.
Until the permits are transferred into Multek's name, if Multek
causes IBM to violate any provision of such permit or license,
then Multek shall indemnify and save IBM and its employees and
directors harmless from and defend them against
69
any claim, liability, cost, fee, expense or damage arising out
of such violations; provided, that such violation is not caused
by IBM.
(b) IBM will continue to perform at its sole expense the groundwater
monitoring and sampling obligations associated with the Corrective
Action part of IBM's ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, as
more fully explained in that Permit, as it applies to the tank farms
located on the Multek Site. Multek will allow access to IBM and its
contractors to perform such monitoring and sampling. IBM shall be
responsible for closure of all ▇▇▇▇▇ associated with its RCRA
Corrective Action compliance plan. IBM will also cap any voluntary
monitoring ▇▇▇▇▇ on the Multek Site that Multek designates in
writing to IBM within six (6) months following the Closing Date that
Multek does not want to continue. For any voluntary well that Multek
does not want capped, Multek shall assume all responsibility and
maintenance for such well(s) within six (6) months following the
Closing Date.
15.6 If either IBM or Multek receives prior notification of any planned
visits or inspections of any part of the Complex by any
Governmental Authority having jurisdiction over environmental
matters, IBM or Multek, as applicable, must, as soon as
reasonably possible after the date for the visit or inspection
is scheduled, orally notify the other party of such planned
visit. If any Governmental Authority having jurisdiction over
environmental matters makes an unplanned visit to or inspection
of any portion of the Complex, the Person (Multek or IBM) first
made aware of such visit or inspection must, as soon as
reasonably possible, orally notify the other party. Unless
required by Law or a Governmental Authority having jurisdiction
over environmental matters, neither IBM or Multek shall be
entitled to participate in any such visit or inspection of the
portion of the Complex occupied by the other without the
consent of the other; except that during the period of time
that either IBM or Multek is operating its facilities under a
permit or license issued to the other, the other shall be
entitled to participate
70
in any such visit or inspection of the Multek Site.
16. Environmental Conditions
16.1 (a) IBM and Multek agree that the level of Hazardous Substances, if
any, present in the soil and groundwater in, on and under the
Multek Site shall be as set forth in the Environmental Baseline
described in the Asset Purchase Agreement; except that (i) for
a period of one (1) year from the Closing Date, monthly
samplings shall be taken at the Building 60 sump on Multek's
Site to determine the Baseline for copper and 1,1,1 TCA
(trichloroethane) in that area, and (ii) for a period of two
(2) years from the Closing Date, Multek shall have the right to
establish that the chemicals 1,1 dichloroethane, 1,1
dichloroethylene, methyl chloride and 1,1,1 TCA
(trichlorethane) in the Southwest sump area on Multek's Site
are Newly Discovered Contamination, provided that Multek does
not use those four (4) chemicals in any of its operations
during the said two (2) year period.
(b) Multek and IBM agree that the Baseline shall be determinative of
the environmental conditions, the types of contaminants, their
volumes, quantities and levels of concentration in the soil and
groundwater on the Multek Site as of the Closing Date with respect
to any Hazardous Substances identified in the Baseline.
(c) If after the Closing Date, Multek discovers a Hazardous
Substance on the Multek Site that was not identified in the
Baseline, Multek shall have the burden of proving that any such
Hazardous Substance existed on the Multek Site prior to the Closing
Date or was otherwise caused by IBM. If a dispute arises as to the
existence of a Hazardous Substance on the Multek Site before the
Closing Date that was not identified in the Baseline, the parties,
if they cannot agree that it existed prior to the Closing Date,
shall first submit the matter to Mediation.
16.2 (a)(1) Multek shall be solely responsible for the following which
shall be called "Multek Contamination": (i)
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Hazardous Substances which become present on, in or under the
Complex after the Closing Date and which were caused by Multek,
its employees, agents, contractors, suppliers and/or other
invitees, and/or (ii) Hazardous Substances which were spilled
on or released to the Multek Site prior to the Closing Date but
which become violations of Law or which exceed cleanup
standards established by Law only after the Closing Date unless
such Hazardous Substances constitute Newly Discovered
Contamination (as defined in the Asset Purchase Agreement), in
which case Multek shall only be responsible for changes in Law
that occur after the first anniversary of the Closing Date.
(2) In no event, however, shall Multek be liable or responsible
for Hazardous Substances caused by a spill or release by IBM, its
employees, agents, contractors, suppliers and/or other invitees
after the Closing Date when such spill or release, which is caused
by IBM, has impacted the Multek Site by constituting a violation of
the Laws or by exceeding a cleanup standard established by Law or by
increasing the levels of any contaminant on the Multek Site above
the Baseline plus any Multek Contamination. Such Hazardous
Substances are hereinafter called "IBM Contamination."
(b) If Multek discovers Newly Discovered Contamination, IBM shall be
responsible for Remediation to the cleanup levels imposed by Law in
effect at the Closing Date or those in effect on the first
anniversary of the Closing Date. If IBM is already engaged in
remediating chemicals identified as Newly Discovered Contamination,
and if the level of cleanup imposed by Law becomes more stringent
after the first anniversary of the Closing Date for such chemicals,
IBM shall continue to be responsible for Remediation to the more
stringent standard, but Multek shall reimburse IBM for incremental
costs of Remediation required to comply with the more stringent
cleanup level.
16.3 (a) If Multek Contamination violates a Law or exceeds a standard
established by Law, then Multek shall be solely responsible for
the Remediation thereof to
72
the cleanup standards or guidelines established by a Law.
(b) If IBM Contamination violates a Law or exceeds a standard
established by Law, then IBM shall be solely responsible for the
Remediation thereof to the cleanup standards or guidelines
established by a Law.
(c) If a Governmental Authority institutes administrative action or
a lawsuit in which IBM or Multek is named as a party (including as a
third-party defendant) for failure or refusal of the "responsible
party" (which shall mean Multek if Multek's Contamination or IBM if
IBM's Contamination) to perform Remediation at the Complex, and such
action or suit determines that the responsible party has failed to
perform Remediation, the responsible party shall reimburse the other
party hereto and otherwise pay for any and all direct damages,
penalties, fines, settlements, costs or expenses, including
reasonable attorneys' fees, consultant fees, laboratory fees, and
investigation and defense costs and direct costs of Remediation
(hereinafter collectively called the "Environmental Costs") incurred
by the other party by reason of a directive or order of a
Governmental Authority or court of law requiring the other party to
perform Remediation which is the responsibility hereunder of the
responsible party. Without limitation, Environmental Costs may
result from or be attributable to the other party's participation in
such action or law suit or to the failure or refusal of the
responsible party, as determined by a Governmental Authority or
court of law, to comply with the Laws relating to Remediation at the
Complex. Notwithstanding any provisions of this Agreement to the
contrary, in no event shall either party be liable to the other or
any other Person for consequential, special or indirect damages of
any kind.
(d) As used herein, the word "Remediation" means and includes
investigation, sampling, testing, reporting, analysis, laboratory
work, removal, cleanup, and similar activities relating to IBM's
Contamination (if IBM is the responsible party) or Multek's
Contamination (if Multek is the responsible party), above, on or
under the Complex.
(e) Upon discovery and notice to the responsible party of any
release of Hazardous Substances to the environment at
73
the Complex, the responsible party shall promptly investigate the
same, report its findings to the other party and report the actions
taken or proposed to be taken by the responsible party with respect
to any such release.
(f) In the event of a sudden spill or abrupt release to the
environment which is immediately discovered after its release, the
responsible party will promptly take steps to clean up the release
and/or contain it so that it will not impact the property or
operations of the other party on the Complex.
(g) Notwithstanding anything herein to the contrary, the foregoing
shall not be deemed to constitute a waiver of the other party's
rights at Law, if any, to seek recovery for damage it sustains by
reason of the spill or other release caused by or attributable to
the responsible party, its employees, contractors, agents, suppliers
and/or other invitees, but in no event shall the other party be
entitled to recover damages for levels of contamination below
Baseline plus either Multek's Contamination levels (if Multek is the
other party) or IBM's Contamination levels (if IBM is the other
party).
16.4 IBM and Multek recognize that Multek's activities on the Multek Site
and IBM's activities on the IBM Property may impact upon the
other party's property, employees, invitees, equipment, and
operations. Therefore, Multek and IBM agree that if there is a
release, spill, discharge, malfunction, other episodic event or
any condition or use of the party's property that might
reasonably be expected to impact on the other party's property
in any significant respect, each shall provide prompt notice
thereof with sufficient detail to enable the other to take
appropriate actions in response thereto; provided, however,
that any and all legal obligations of the party with respect to
such event, including reporting and emergency response actions
as required, shall take precedence over the requirement to
notify the other party but such notification of the other party
shall occur as soon as possible after compliance with such
legal
74
obligations (if it is not practicable to have same occur
simultaneously therewith).
16.5 If Multek or IBM shall make any application for new or changed
operating permits applicable to any operations conducted at the
Complex, the party filing the application shall promptly notify
the other party of its action(s).
16.6 If either Multek or IBM is required by a Governmental Authority to
provide environmental information that is best known by the
other party, within thirty (30) days of the request therefor,
Multek and/or IBM will each provide to the other all such
pertinent information.
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17. Chemical Storage and Handling
17.1 IBM agrees that the chemical distribution center ("CDC") is located
on the Multek Site and has been used by IBM to store unused
chemicals and chemical waste products. The existing CDC shall
be owned and maintained, repaired and replaced by Multek, at
its sole expense. Until IBM removes IBM's Chemicals and its
chemical waste products from the existing CDC, Multek shall
provide chemical storage and disposal Services in accordance
with the provisions of SCHEDULE 11. IBM shall remove such
chemicals and wastes from the existing CDC upon completion of a
new CDC on the IBM Property and receipt of all required
municipal approvals to use the new CDC. IBM agrees to remove or
cause to be removed any IBM chemical waste products stored by
Multek within ninety (90) days following their first storage.
IBM also agrees to diligently pursue completion of the new CDC
on the IBM Property as well as the receipt of all required
municipal approvals to use the new CDC.
17.2 The unused chemicals used by IBM on the IBM Property are listed on
ATTACHMENT B ("IBM's Chemicals"). The unused chemicals used by
Multek on the Multek Site are listed on ATTACHMENT C ("Multek's
Chemicals"). The unused chemicals that are listed both on
ATTACHMENTS B and C are listed on ATTACHMENT D. Multek shall
receive, store and handle IBM's Chemicals and, in addition,
other unused chemicals and waste products of IBM in accordance
with the provisions of SCHEDULE 11 to the extent only, however,
that, with respect to additional unused chemicals and waste
products, there is current capacity to store such additional
unused chemicals and waste products as well as Multek's and
IBM's Chemicals. If IBM shall request that a new type of unused
chemical, not listed on ATTACHMENT B, be received, stored
and/or handled by Multek, IBM shall give notice to Multek,
specifying the type of unused chemical and quantities it wishes
to have received, stored and/or handled. Each such notice shall
be accompanied by the manufacturer's
76
material safety data sheets applicable to such chemical.
Similarly, if Multek intends to store and/or handle a new type
of unused chemical, which is not listed on ATTACHMENT C, Multek
shall give notice to IBM, specifying the type of unused
chemical and quantities it wishes to store and/or handle. Each
such notice shall be accompanied by the manufacturer's material
safety data sheet applicable to each such chemical. IBM shall
have the right to review and approve such storage and handling
of a new chemical if Multek is then operating under IBM's
permit, or IBM's permit will require modification, provided,
however, such approval by IBM shall not be unreasonably
withheld. IBM agrees to assist Multek in its application to
transfer either permit to Multek.
17.3 (a) All storage, labeling and handling of IBM's Chemicals or waste
products by Multek's personnel shall be in accordance with
IBM's RCRA Hazardous Waste permit and with the City of Austin's
Hazardous Substances ordinance permit. IBM's permit shall not
be modified except with the consent of IBM which it may not
unreasonably withhold. IBM agrees to assist Multek in its
application to transfer permits to Multek.
(b) Multek shall, subject to TNRCC approval, conduct certain
activities authorized under IBM's RCRA Part B Hazardous Waste Permit
until such time as units have been characterized by the TNRCC as
less than ninety (90) day storage facilities or temporary
accumulation units. While Multek operates under IBM's RCRA Part B
Hazardous Waste Permit, Multek will comply with all obligations and
responsibilities imposed by the Permit on Multek's operations.
Multek further agrees not to make any changes, modifications,
alterations or the like to the current operations, production,
chemical usage or any other change that would cause IBM to be in
violation of the Permit without first obtaining IBM's written
consent, which consent shall not be unreasonably withheld. Multek
shall indemnify and save IBM and its employees and directors
harmless from and defend them against any claim, liability, loss,
cost,
77
fee or damage arising out of any such violation; provided, that any
such violation is not caused by IBM.
17.4 All of IBM's Chemicals and waste products shall be physically
segregated in and about the CDC from Multek's Chemicals and
waste products.
17.5 After IBM completes construction of a new CDC and removes IBM's
Chemicals and waste products from the existing CDC, Multek
shall be responsible, at its sole cost and expense, for all
chemical handling, distribution, storage and transportation in
connection with the existing CDC. Without limitation, Multek
shall provide its own bulk unloading of Multek's Chemicals from
transport vehicles into Multek's tank farm located on the
Multek Site. Multek shall be fully responsible for such bulk
unloading responsibility and shall conduct appropriate
inspections for the potential leakage and spillage of
chemicals, both along the Access Roads and on the Multek Site.
Multek shall at all times be required and prepared to promptly
respond to leaks, spills and other environmental incidents
arising out of this activity (a Multek Contamination) so as to
limit the extent and duration of incidents and to effectively
implement remedies in accordance with Laws and directives of
Governmental Authorities. Multek shall receive or otherwise
transfer chemicals to or from transport vehicles (truck) only
on the Multek Site and only at places that provide secure
secondary containment to prevent the unplanned release of
chemicals to the environment.
17.6 Multek represents that with respect to IBM's Chemicals and waste
products, Multek has, and with respect to new chemicals and
waste products accepted by Multek, will have the necessary
equipment, facilities, personnel, expertise and resources to
handle all of IBM's Chemicals and waste products, and
represents further that Multek shall handle IBM's Chemicals and
waste products in a proper, lawful and safe manner. Multek
shall be responsible for any and all damage and liability
78
caused by or arising out of IBM's Chemicals and waste products
while located on the Multek Site, except to the extent of any
damage resulting from defective packaging of IBM's Chemicals by
the manufacturer or IBM prior to their receipt by Multek, and
except to the extent of damage caused by negligent acts or
omissions of IBM's employees, contractors or others acting on
behalf of IBM.
17.7 For the chemical storage and handling services provided to IBM
pursuant to this Section 17, the parties have agreed that for
1997 IBM shall pay to Multek, on the first day of each calendar
month for so long as IBM's Chemicals and waste products remain
in the existing CDC, the amount set forth in SCHEDULE 11.
18. Temporary Occupancy
IBM now occupies and uses about 24,000 square feet on the second floor of
Building No. 64 for administrative purposes. Multek hereby authorizes IBM
employees to remain in and to continue using the space for a period of two (2)
months upon and subject to the provisions of SCHEDULE 13.
19. Cost of Utility Plant
Multek agrees to pay IBM for a pro rata share based on usage of the cost
and expense of operating the Utility Plant in accordance with the provisions of
SCHEDULE 14.
20. Waste Generator
20.1 Multek shall be deemed to be the sole generator and owner of any and
all waste, whether hazardous waste or not, generated by Multek,
its agents, employees, contractors or anyone claiming by or
through Multek in connection with the operation of its business
and use of the Multek Site and IBM shall not have any liability
with respect to such waste. Multek shall dispose of such waste
at its sole cost and expense and liability in such manner as it
determines is appropriate and in accordance with all Laws.
79
20.2 IBM shall be deemed to be the sole generator and owner of any and
all waste, whether hazardous waste or not, generated by IBM,
its agents, employees, contractors or anyone claiming by or
through IBM in connection with the operation of its business
and use of the IBM Property and Multek shall not have any
liability with respect to such waste. IBM shall dispose of such
waste at its sole cost and expense and liability in such manner
as it determines is appropriate and in accordance with all
Laws.
21. Natural Gas
Multek owns and shall maintain, repair and replace, at its sole expense,
the existing natural gas supply lines and associated meters and equipment which
are located on the Multek Site and used for the operation of the treater tower
incineration operation.
22. Easements
22.1 Notwithstanding any provisions in the Project Operations Agreement
or the Lease to the contrary, Multek is prohibited from entry
to the buildings and other structures located on the IBM
Property, or entry to the parcel shown on ATTACHMENT I and
improved by softball fields, tennis courts and other
recreational improvements, and IBM is prohibited from entry to
the Buildings and other structures on the Multek Site, in each
case unless specifically authorized herein or under another
Operative Agreement, or invited to enter by the other. Subject
to these prohibitions, IBM and Multek each hereby grants to the
other nonexclusive reciprocal easements appurtenant to the IBM
Property and Multek Site, over and across the exterior
walkways, sidewalks, entrances, exits and access roads
(described in ATTACHMENT E and, to the extent agreed upon to
date, marked on ATTACHMENT I) as they now exist or as may exist
in the future for vehicular and pedestrian traffic as may be
from time to time necessary and desirable for ingress, egress
and passage to and from and about the Complex for the benefit
of the respective employees and invitees of IBM and Multek, and
for police, fire and medical personnel and equipment. A more
detailed description of these easements are set forth in
ATTACHMENT E, some or all of which
80
easements shall be recorded in the ▇▇▇▇▇▇ County real estate
records as determined by the parties, their respective counsel
and the title company.
22.2 IBM shall maintain, replace and repair the Access Roads in
accordance with and subject to the provisions of SCHEDULE 10.
Any damage to the Access Roads by Multek or its employees,
contractors, suppliers or other invitees shall be repaired by
IBM at Multek's sole cost and expense. IBM shall not make any
material change to the access roads, including any material
change to the configuration of the entrances and exits as they
are now configured, if such change will adversely affect the
operations of Multek on the Multek Site, IBM shall provide
notice to Multek of all such material changes before making
them and IBM will not make such change without the consent of
Multek which it shall not unreasonably withhold or delay. If
there is a dispute, the parties shall submit the matter to
Mediation.
23. Other Services
23.1 Multek shall offer IBM the additional Services described on
ATTACHMENT F.
23.2 IBM shall offer Multek the additional Services described on
ATTACHMENT G.
23.3 Without limitation, Multek agrees to perform for itself those
Services described on ATTACHMENT H. The parties agree that IBM
shall not be required to perform any Services for or deliver
any Services to Multek except as specifically agreed upon in
the Project Operations Agreement.
23.4 Multek's employees who are located at the Multek Site may use the
softball fields, tennis courts and other recreational
improvements shown on ATTACHMENT I for three (3) years from the
Closing Date, for a fee of Ten Thousand Dollars ($10,000.00)
for each twelve (12) month period, and subject to coordination
of such use with uses by IBM as determined by IBM in
consultation with Multek.
81
24. Cafeteria
Multek agrees to provide independent cafeteria, vending and other food
services and recognizes that IBM shall not provide any of these amenities to
Multek. Multek agrees to advise its employees, contractors, suppliers and other
invitees accordingly and to instruct them not to enter the cafeteria.
25. Failure to Provide Services
Neither Multek nor IBM shall be liable or responsible to the other for any
failure, interruption, inadequacy, defect or change in the character or supply
of any Service, including electricity, Domestic Water, Waste Water service,
compressed air, chilled water, cooling tower water, telephone, and any and all
other Services to be furnished by one to the other hereunder unless directly
caused by the gross negligence or wilful misconduct of the Service provider. In
no event, even if either Multek or IBM is grossly negligent, or even if its
employees, tenants, suppliers, agents, licensees, subcontractors, contractors or
other invitees engage in negligent or wilful misconduct, shall Multek or IBM or
its respective employees, tenants, suppliers, agents, licensees, contractors,
subcontractors or other invitees be liable for any consequential, indirect,
punitive or special damages which may be sustained by the other, for whatever
reason under any circumstance. Multek and IBM agree that its exclusive remedy is
set forth in Article 6 of the Project Operations Agreement.
26. Right to Terminate Certain Services
26.1 Nonterminable Services. Subject to Section 6.5 of this Project
Operations Agreement, titled "Remedies," certain Services
furnished pursuant to specific provisions hereof shall not,
except as herein provided, be terminated (the "Nonterminable
Services"). The Services to be provided to IBM by Multek that
Multek may not terminate for any reason or cause without the
consent of IBM, which it may withhold in its sole discretion,
are for the term of this Agreement, Industrial Waste Water and
Chemical Storage and Handling. The Services to be provided to
Multek by IBM that Multek may not terminate for any reason or
cause without the consent of IBM, which it may withhold in its
sole discretion, are landscaping and grounds maintenance
service and the repair and replacement of the access roads,
each as
82
described in the applicable SCHEDULES hereto. The Services to
be provided to Multek by IBM that IBM may not terminate for any
reason or cause without the consent of Multek, which it may
withhold in its sole discretion, are (a) for the term of this
Agreement, Chilled Water, Cooling Tower Water, Compressed Air
and Steam and, (b) until the date they are made
Services/Utilities Independent, Electricity, Domestic Water,
the Fire Protection Water System and the Sanitary Waste System,
and (c) until nine (9) months after the Closing Date, or when
Multek has completed it installation, whichever is sooner, the
Information Technology and Material Logistics Transitions
Services as described in ATTACHMENT G-3 hereto; except that, in
the case of Chilled Water, Cooling Tower Water, Compressed Air
and Steam, IBM may unilaterally elect in its sole discretion to
transfer to Multek the obligation to furnish these Services
provided that IBM establishes the necessary easements and
rights-of-way to allow Multek access to and operation of the
Central Utility System. Or, IBM and Multek may agree that IBM
will sell the Central Utility System to Multek. Notwithstanding
any provision in this Agreement to the contrary, the party
receiving a nonterminable Service may, in its sole discretion,
upon not less that one hundred eighty (180) days notice to the
party providing such Service, terminate such Service.
26.2 Terminable Services. With respect to all Services other than the
Nonterminable Services (the "Terminable Services"), Multek and
IBM, at any time and from time to time may elect, on not less
than one hundred eighty (180) days prior written notice to the
other (the "Service Termination Notice"), to terminate any one
or more of the Terminable Services effective as of a date (the
"Service Termination Date") specified in the Service
Termination Notice, subject to the following provisions hereof.
The Service Termination Date for a particular Terminable
Service shall be specified in the Service Termination Notice
and shall, if applicable, correspond with the earliest possible
expiration date of the particular Service contract pursuant to
which the particular Service to be terminated is rendered to
the terminating party. The Service provider shall advise the
terminating party within thirty (30) days of receipt of the
terminating party's written inquiry of the Service provider as
to whether or not there is an
83
applicable Service contract and if so the expiration date or
any permitted earlier cancellation date thereof. If a
cancellation fee shall be payable for such earlier
cancellation, the terminating party shall notify the Service
provider whether to so cancel and the terminating party in such
event shall pay such cancellation fee. If there is no Service
contract, the Service Termination Date shall be not earlier
than six (6) months after the giving of the Service Termination
Notice unless an earlier date is agreed upon by the parties
hereto. If the Service Termination Notice is given, then
automatically on the Service Termination Date, the particular
Service specified in the Service Termination Notice shall be
terminated and the Service provider shall have no
responsibility to, and shall not, furnish any such terminated
Service to the terminating party. If the terminating party
thereafter contracts for any of the terminated Service, whether
furnished by the terminating party directly or through a third
party contractor, the terminating party shall be subject to the
applicable provisions of the Project Operations Agreement.
27. Sales Taxes
Notwithstanding anything to the contrary contained herein, if and to the
extent that sales, use or other taxes are required to be paid to any
Governmental Authority on account of any Services furnished by IBM to Multek, or
by Multek to IBM, pursuant to the terms of this Agreement, the Service provider
may ▇▇▇▇ the receiver of Services for all such taxes due and owing and the
receiver of Services shall pay the amount to the Serviced provider within
forty-five (45) days after receipt therefor.
84
ATTACHMENT A
PERMITS
- EPA Stormwater General Permit
- TNRCC RCRA (Part B) Hazardous Waste Permit
- TNRCC RCRA Compliance Plan
- TNRCC Air Permits R-7382 and R-18126
- City of Austin Waste Water Discharge Permit
- City of Austin Hazardous Materials Ordinance Permit (HMO)
- City of Austin Registered Industrial Plant Certification
85
ATTACHMENT B*
IBM'S CHEMICALS
As listed and described in that certain binder entitled _____________________,
dated ________________, prepared by IBM. In addition to IBM's obligation to
notify Multek of any new unused chemicals which shall be delivered to and stored
on the IBM Property, once each year IBM shall update the binder and deliver an
updated copy to Multek.
* Attachment B is not included and will be furnished supplementally to the
Commission upon request.
86
ATTACHMENT C*
MULTEK'S CHEMICALS
As listed and described in that certain binder entitled _____________________,
dated ________________, prepared by IBM and approved by Multek. In addition to
Multek's obligation to notify IBM of any new unused chemicals which shall be
delivered to and stored on the Multek Site, once each year Multek shall update
the binder and deliver an updated copy to IBM.
* Attachment C is not included and will be furnished supplementally to the
Commission upon request.
87
ATTACHMENT D*
COMMON CHEMICALS
As listed and described in that certain binder entitled _______________, and
dated ________________, prepared by IBM. Once each year IBM shall compare the
most recent updates to the binder described in ATTACHMENTS B and C, make any
modifications necessary to document changes to the then most recent ATTACHMENT
D, and deliver an updated copy of ATTACHMENT D to Multek.
* Attachment D is not included and will be furnished supplementally to the
Commission upon request.
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ATTACHMENT E
EASEMENTS
NO IBM TO Multek Multek TO IBM
-- ------------- -------------
1. Access around north end
▇▇▇▇. ▇▇▇.
2. Access through entrance #▇
▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇.
3. Access through entrance #▇
▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
4. Electrical service from City
of Austin substation to
▇▇▇▇. ▇▇▇. Access to piping &
electrical in ▇▇▇▇. ▇▇▇ to 045.
5. Railroad spur to Tank Farm.
6. Chemical trench to WCF.
7. Conveyance of drainage into
IBM's stormwater collection
facility.
8. Access to piping &
electrical service
into & through ▇▇▇▇.
▇▇▇, 045 service.
9. Railroad spur.
10. Cross tie access
from C.U.P. to main
site.
11. Access to monitoring
▇▇▇▇▇ for monitoring
/sampling (see
Section 15.5(b)).
The following easements which will be defined during the time IBM is making the
Utilities/Services Independent:
Sanitary sewer lines, fuel oil lines, deionized water lines and natural
gas lines.
89
ATTACHMENT F
ADDITIONAL SERVICES TO IBM
The following Services shall be offered by Multek to IBM, subject to Multek's
right to terminate these Services pursuant to Section 26:
ESTIMATED
ADDITIONAL SERVICE DURATION/MONTHS 1997 CHARGE
------------------ --------------- -----------
D.I. WATER 6* $3,700 + $10.26
(ATTACHMENT F1) per 1000 gallons
- estimate is
$11,672/mo.
AIR ABATEMENT 3 $4,000/mo.
MAINTENANCE
(ATTACHMENT F2)
CHEMICAL SPILL 3 Each spill priced
RESPONSE based on cost of
(ATTACHMENT F3) labor, materials and
disposal.
CALIBRATION/INST. 3* Based on request/
SUPPORT actuals - estimate
(ATTACHMENT F4) $15,500 per month.
TOOL ROOM SUPPORT 3* Each request priced.
(ATTACHMENT F5) Estimate is $54,000
per month.
ANALYTICAL LAB 6* Each request priced.
SUPPORT Estimate is $20,000
(ATTACHMENT F6) per month.
RO WATER
(ATTACHMENT F7) 6* $1,000 maintenance
plus $8.00/1000
gallons. Estimate
is $7,000/mo.
IBM reserves the right to require Multek to continue furnishing these
Services at charges to be negotiated between the parties, based on
the cost formula used to determine the costs set forth above; except
that the charges for the Services described in ATTACHMENTS F4, F5
AND F6 shall be furnished at competitive market prices to be
negotiated by the parties.
* Attachments F-1 through F-7 are not included and will be furnished
supplementally to the Commission upon request.
90
ATTACHMENT G*
ADDITIONAL SERVICES TO MULTEK
The following Services shall be offered by IBM to Multek, subject to IBM's right
to terminate these Services pursuant to Section 26:
ESTIMATED
ADDITIONAL SERVICE DURATION/MONTHS 1997 CHARGE
------------------ --------------- -----------
MAILROOM 6 $500 + postage
(ATTACHMENT G-1)
ENGINEERING DATE BASE 3 $5,000
(ATTACHMENT G-2)
INFORMATION TECHNOLOGY 9* Per ATTACHMENT
(ATTACHMENT G-3)
ATTACHMENT G-4 9* Per ATTACHMENT
INTENTIONALLY OMITTED
TRANSITION SERVICES 1* Per ATTACHMENT
(ATTACHMENT G-5)
* Attachments G-1 through G-5 are not included and will be furnished
supplementally to the Commission upon request.
91
ATTACHMENT H*
SERVICES MULTEK TO SELF-PERFORM
* Attachment H is not included and will be furnished supplementally to the
Commission upon request.
92
ATTACHMENT I*
RECREATIONAL IMPROVEMENTS
* Attachment I is not included and will be furnished supplementally to the
Commission upon request.
93
SCHEDULE 1*
ELECTRICAL SWITH GEAR AND METERS
* SCHEDULE 1 is not included and will be furnished supplementally to the
Commission upon request.
94
SCHEDULE 2*
STEAM
* SCHEDULE 2 is not included and will be furnished supplementally to the
Commission upon request.
95
SCHEDULE 3*
COMPRESSED AIR
* SCHEDULE 3 is not included and will be furnished supplementally to the
Commission upon request.
96
SCHEDULE 4*
CHILLED WATER
* SCHEDULE 4 is not included and will be furnished supplementally to the
Commission upon request.
97
SCHEDULE 5*
COOLING TOWER WATER
* SCHEDULE 5 is not included and will be furnished supplementally to the
Commission upon request.
98
SCHEDULE 6*
DOMESTIC WATER/WASTE WATER
* SCHEDULE 6 is not included and will be furnished supplementally to the
Commission upon request.
99
SCHEDULE 7*
ENVIRONMENTAL WCF
* SCHEDULE 7 is not included and will be furnished supplementally to the
Commission upon request.
100
SCHEDULE 8*
SECURITY
CAS (CONTROL ACCESS SYSTEM)
* SCHEDULE 8 is not included and will be furnished supplementally to the
Commission upon request.
101
SCHEDULE 9*
RETENTION/DETENTION/
STORM WATER RUN-OFF
* SCHEDULE 9 is not included and will be furnished supplementally to the
Commission upon request.
102
SCHEDULE 10*
LANDSCAPING, GROUNDSKEEPING, &
ACCESS ROADWAYS
* SCHEDULE 10 is not included and will be furnished supplementally to the
Commission upon request.
103
SCHEDULE 11*
ENVIRONMENTAL CDC
* SCHEDULE 11 is not included and will be furnished supplementally to the
Commission upon request.
104
SCHEDULE 12*
SERVICES IBM TO PROVIDE TO MULTEK
(ON-GOING)
* SCHEDULE 12 is not included and will be furnished supplementally to the
Commission upon request.
105
SCHEDULE 13*
BUILDING 064
INDIRECT SPACE LEASE
* SCHEDULE 13 is not included and will be furnished supplementally to the
Commission upon request.
106
SCHEDULE 14*
CENTRAL UTILITY PLANT OPERATION
* SCHEDULE 14 is not included and will be furnished supplementally to the
Commission upon request.
107
EXHIBIT C
PAGE 1 of 3
SIGN CRITERIA
The objective of these sign criteria is to provide and maintain a consistent
design integrity for the Complex. The sign criteria are intended to provide
adequate information to personnel and visitors of the Complex with a minimum of
signs. All occupants of the Complex will be expected to conform to the Complex
sign criteria. The sign criteria are applicable only to the exterior of
buildings and the open areas of the Complex. Sign criteria for interior occupant
space will be the responsibility of each occupant/owner of that space, including
IBM and Multek (whether as a tenant or an owner).
In order to maintain Complex sign uniformity and provide each occupant with
adequate signage, the following are rules for installation and maintenance of
signs:
- IBM shall be responsible for a design standard for exterior building and
entry signs and for administering, coordinating, maintaining and enforcing
the Complex sign program. Multek agrees that the existing design standard
at the Complex is acceptable and shall be the design standard for
directional, parking, entrance and building exterior signs and the like.
Multek agrees to pay IBM its proportional share of the cost to maintain
all Complex signs.
- Multek and IBM shall each be responsible at its sole cost for design,
fabrication, installation, maintenance, modification, and/or removal of
all signs on its property, in each case in compliance with Laws. IBM shall
be responsible for signs on the road system up to the boundary line of the
Multek Site. Multek shall be responsible for signs for the road system,
parking area and Buildings on the Multek Site.
108
- Multek and IBM may remove, at the other's expense, any sign on the Complex
which is not authorized hereunder.
- IBM and Multek shall each be entitled to install the following signs:
- A sign on each of their respective buildings with the appropriate
identification of their choice. Each sign throughout the Complex shall be
of standard and equal size.
- Directional roadway signs to the main lobby/receptionist areas from
Complex entrances. Multek will designate one location and the sign will
direct traffic to that location only.
- Directional roadway signs to the shipping/receiving areas from all Complex
entrances.
- Signs identifying the parking areas from the Complex roadway.
SIGN CRITERIA
PAGE 2 of 3
- No signs shall have moving parts or contain or be subject to any flashing
or internal illumination. No part of the sign shall extend above the roof
line. Signs indicating a company's name will be allowed on no more than
two facades and must be appropriately scaled and designated for the
structure. A front yard sign near the street will also be allowed when
appropriate. No private signs other than directional signs shall be
allowed along the road signs.