Exhibit 10.18
CONTRIBUTION AND UNITS PURCHASE AGREEMENT
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THIS CONTRIBUTION AND UNITS PURCHASE AGREEMENT (this
"Agreement") is made and entered into as of May 5, 2006, by and between Micron
Technology, Inc., a Delaware corporation ("Micron"), Photronics, Inc., a
Connecticut corporation ("Photronics"), and MP Mask Technology Center, LLC, a
Delaware limited liability company (the "Company").
WHEREAS, Micron formed the Company to serve as the legal
entity for a joint venture (the "Joint Venture") between Micron and Photronics
for the development, fabrication and sale of advanced photomasks (the "Photomask
Business").
WHEREAS, in furtherance of establishing the Joint Venture, and
in connection with the execution of the Limited Liability Company Operating
Agreement of MP Mask Technology, LLC (the "LLC Operating Agreement") to be dated
as of the Closing Date (as defined below), by and between Micron and Photronics,
Micron desires to contribute hereunder as of the Closing Date (the
"Contribution") to the Company the assets set forth on Schedule A hereto, which
Schedule may be updated upon the reasonable agreement of Micron and Photronics,
consistent with Section 6(h) below (the "Transferred Assets"), subject to the
terms and conditions contained in this Agreement, in exchange for 100% of the
membership interests (the "Membership Interests") of the Company.
WHEREAS, immediately following the Contribution, Micron
desires to sell 49.99% of all of the Membership Interests, represented by 49,990
units (the "Transferred Units"), of the Company to Photronics, and Photronics
desires to purchase such Membership Interests from Micron, pursuant to the terms
and conditions of this Agreement.
WHEREAS, at the Closing, Micron and Photronics shall enter
into the LLC Operating Agreement to set forth the respective rights and
obligations of Micron and Photronics with respect to the Company, and, along
with the Company, certain other Transaction Documents, as listed on Schedule B
hereto.
NOW, THEREFORE, in consideration of the promises set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. Contribution.
(a) General. On the terms and subject to the conditions
contained in this Agreement, Micron shall convey, assign, transfer and deliver
to the Company, and the Company shall acquire on the Closing Date (as defined
below), all of Micron's right, title and interest in and to its ownership
interests in the Transferred Assets, subject to Permitted Exceptions respecting
only the real property located at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ (the "JV
Plant"), and no other Micron assets whatsoever, in exchange for 100,000
membership units of the Company (the "Units"). "Permitted Exceptions" shall
mean: (a) the lien of all ad valorem real estate Taxes (as defined below) due
and payable in the calendar year 2006 and subsequent
calendar years; (b) all matters of record relating to the JV Plant in the
official records of the county in which such real property is located; (c)
local, state and federal laws, ordinances or governmental regulations and the
like, including but not limited to building and zoning laws, ordinances and
regulations, now or hereafter in effect relating to the JV Plant; and (d) any
matters that would be shown on an accurate survey of current date of the JV
Plant.
(b) Contribution Closing. The closing of the contribution
transactions provided for in this Agreement (the "Contribution Closing") shall
take place at the offices of Micron at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ at
the opening of business on May 5, 2006 (the "Closing Date"). At the Contribution
Closing, Micron shall deliver to the Company deeds, endorsements, assignments
and good and sufficient instruments of conveyance, transfer and assignment as
are necessary, appropriate and effective to vest in the Company all of the
right, title and interest of Micron in and to the Transferred Assets and,
simultaneously with such deliveries, Micron shall take such steps as are
necessary to put the Company in actual possession and operating control of the
Transferred Assets. On the Closing Date, the Company shall issue to Micron the
Units, which shall be fully paid and nonassessable.
(c) Assumption of Liabilities. Effective as of the
Contribution Closing, the Company will assume and perform and in due course pay
and discharge the following liabilities: (i) any liabilities arising out of or
based upon events or circumstances occurring after the Closing in connection
with or resulting from the operation of the Company's business, including
product warranty claims made with respect to the sale of products by the Company
after the Closing, whether or not such products were manufactured prior to the
Closing; (ii) any liabilities set forth on Schedule C; (iii) any other
liabilities explicitly assumed under the provisions of the Transaction
Documents; and (iv) any liabilities relating to the Transferred Assets that were
not Known by Micron as of the Contribution Closing (collectively, the "Assumed
Liabilities"). At the Contribution Closing, the Company shall deliver to Micron
appropriate assumption agreements as are necessary, appropriate and effective to
assume the Assumed Liabilities. Following the Contribution Closing, Micron shall
use reasonable efforts to assign and transfer all its rights, title and interest
in, to and under any Assumed Contracts. To the extent any Assumed Contract (as
defined below) is not capable of being transferred, assigned or conveyed without
the consent or waiver of a party thereto (other than Micron or an affiliate of
Micron) or any other third party (including governmental authority), or if such
transfer, assignment or conveyance would constitute a breach thereof or
violation of Applicable Law, this Agreement shall not constitute a transfer,
assignment or conveyance thereof, and Micron shall hold any such Assumed
Contract for the benefit of the Company.
(d) Prorations. On the Closing Date, or as promptly as
practicable following the Closing Date, but in no event later than sixty (60)
calendar days thereafter, the water, gas electricity and other utilities, local
business or other transferable license or permit fees, and other similar
periodic charges payable with respect to the Transferred Assets shall be
prorated between Micron and the Company, with Micron bearing such costs and
expenses attributable to the period through and including the day prior to the
Closing Date, and the Company bearing such costs and expenses attributable to
the period after the day prior to the Closing Date.
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Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the
Securities and Exchange Commission.
(e) Taxes. Except as otherwise provided in this Agreement, (a)
all Taxes (other than transfer Taxes) in respect of the Transferred Assets for
the period or portions of periods ending at or prior to the day prior to the
Closing Date shall be borne solely by Micron ("Micron Pre-Closing Taxes"). For
purposes of the foregoing, any Taxes that are imposed on a periodic basis and
are payable for a Tax period that includes (but does not end on) the day prior
to the Closing Date (a "Straddle Period"), the portion of such Tax that relates
to the portion of such Tax period ending on the day prior to the Closing Date
shall (A) in the case of any Taxes other than Taxes based upon or related to
income or receipts, be deemed to be the amount of such Tax for the entire Tax
period multiplied by a fraction, the numerator of which is the number of days in
the Tax period ending on the day prior to the Closing Date and the denominator
of which is the number of days in the entire Tax period, and (B) in the case of
any Tax based upon or related to income or receipts, be deemed equal to the
amount which would by payable if the relevant Tax period ended on the day prior
to the Closing Date. For purposes of this Section, all relevant periods in
respect of personal property, real property and similar Taxes imposed by the
State of Idaho shall be treated as beginning after the day prior to the Closing
Date, and such Taxes in respect of the Transferred Assets shall be paid by the
Company. Micron shall pay to the Company, within fifteen (15) days prior to the
date on which Taxes are due with respect to Straddle Periods, that amount equal
to the applicable portion of such Taxes which relates to the portion of such
Taxable period ending on the day prior to the Closing Date. Except as otherwise
provided in this Agreement, all Taxes in respect of the Transferred Assets for
the period or portions of periods beginning after the day prior to the
Contribution Closing shall be borne by the Company or, to the extent that the
Company is taxed as a flow-through entity, with respect to income or franchise
Taxes, by the Members. "Tax" means all taxes, levies, imposts and fees imposed
by any Governmental Authority (domestic or foreign) of any nature, including but
not limited to federal, state, local or foreign net income tax, alternative or
add-on minimum tax, profits or excess profits tax, franchise tax, gross income,
adjusted gross income or gross receipts tax, employment related tax (including
employee withholding or employer payroll tax, FICA or FUTA), real or personal
property tax or ad valorem tax, sales or use tax, excise tax, stamp tax or duty,
any withholding or back up withholding tax, value added tax, severance tax,
prohibited transaction tax, premiums tax, occupation tax, together with any
interest or any penalty, addition to tax or additional amount imposed by any
Governmental Authority (domestic or foreign) responsible for the imposition of
any such tax.
2. Purchase and Sale of Membership Interests.
(a) General. At the LLC Closing (as defined below) and upon
the terms and conditions set forth in this Agreement, Micron shall sell,
transfer and assign to Photronics, and Photronics shall purchase and acquire
from Micron, the Transferred Units, free and clear of all security interests,
claims, liens, pledges, options, encumbrances, charges, agreements, voting
trusts, proxies and other arrangements or restrictions whatsoever, except as may
be set forth in this Agreement and the LLC Operating Agreement. Capitalized
terms used, but not defined, in this Agreement, shall have the meanings set
forth in the LLC Operating Agreement.
(b) Purchase Price. The total purchase price to be paid by
Photronics for the Units will be $63,000,000 (the "Purchase Price").
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Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the
Securities and Exchange Commission.
(c) Closing; Subsequent Payments. Subject to the terms and
conditions contained in this Agreement, the purchase and sale of the Units
hereunder (the "LLC Closing" and together with the Contribution Closing, the
"Closing") shall take place immediately following the Contribution Closing at
the offices of Micron at the opening of business on May 5, 2006 (the "Closing
Date"), or at such other place or on such other date as is mutually agreeable to
Micron and Photronics. [****]. In addition, Photronics shall make two additional
payments to Micron in payment for the balance of the Purchase Price by delivery
to Micron, by wire transfer of immediately available funds to a bank account
designated in writing by Micron, of an amount equal to $7,500,000, on each of
the first and second anniversaries of the Closing Date.
3. Closing Conditions.
(a) The obligation of Micron to sell, transfer and assign the
Units to Photronics hereunder is subject to the satisfaction of the following
conditions as of the Closing:
(i) the representations and warranties contained in Section
4 hereof shall be true and correct in all material respects at and as
of the date hereof and at and as of the Closing Date as though then
made, except to the extent of changes caused by the transactions
expressly contemplated herein;
(ii) Micron shall have received the portion of the Purchase
Price payable to Micron at the Closing pursuant to Section 2 above;
(iii) The agreements and covenants of Photronics contained
in this Agreement that are required to be performed prior to or on the
Closing Date shall have been performed or satisfied by Photronics in
all material respects;
(iv) Consummation of the transactions contemplated hereby
and by the Transaction Documents shall not have been restrained,
enjoined or otherwise prohibited by Applicable Law or order of judgment
or any Governmental Authority (as defined in the LLC Operating
Agreement); and
(v) Micron and Photronics shall have entered into the LLC
Operating Agreement and the other Transaction Documents, and such
agreements shall be in full force and effect.
(b) The obligation of Photronics to purchase and acquire the
Units from Micron is subject to the satisfaction of the following conditions as
of the Closing:
(i) the representations and warranties contained in Section
4 hereof shall be true and correct in all material respects at and as
of the date hereof and at and as of the Closing Date as though then
made, except to the extent of changes caused by the transactions
expressly contemplated herein;
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Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the
Securities and Exchange Commission.
(ii) The agreements and covenants of Micron contained in
this Agreement that are required to be performed prior to or on the
Closing Date shall have been performed or satisfied by Micron in all
material respects;
(iii) The Contribution shall have occurred;
(iv) Consummation of the transactions contemplated hereby
and by the Transaction Documents shall not have been restrained,
enjoined or otherwise prohibited by Applicable Law or order of judgment
or any Governmental Authority; and
(v) Micron and Photronics shall have entered into the LLC
Operating Agreement and the other Transaction Documents, and such
agreements shall be in full force and effect.
4. Representations and Warranties of Micron. Micron hereby
represents and warrants to Photronics as follows:
(a) Organization. Each of Micron and the Company is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of formation. Micron has all corporate power and authority required
to conduct its business as currently conducted and to own and lease its
properties and operate its business as currently owned, leased and operated. The
Company has all limited liability company power and authority required to
conduct its business as currently conducted and to own and lease its properties
and operate its business as currently owned, leased and operated. Each of Micron
and the Company is duly qualified to do business and is in good standing (to the
extent such concept exists in the relevant jurisdiction) as a foreign
corporation or limited liability company, as applicable, in each jurisdiction
where the character of the property owned or leased or the nature of its
activities makes such qualification necessary, except for those jurisdictions
where the failure to be so qualified or in good standing is not reasonably
likely to result in a Material Adverse Effect on Micron or the Joint Venture, as
applicable. A "Material Adverse Effect" on a Person (as defined in the LLC
Operating Agreement) or business shall mean any facts or circumstances that,
individually or in the aggregate, would, or might reasonably be expected to,
result in a material adverse effect on the business, financial condition or
results of operations of such Person or business.
(b) Ownership. All of the Membership Interests of the Company
are owned by Micron, and Micron has good and marketable title to such Membership
Interests, which consists of 100,000 units, free and clear of all security
interests, claims, liens, pledges, options, encumbrances, charges, agreements,
voting trusts, proxies and other arrangements or restrictions whatsoever.
(c) Authorization. Micron has all requisite corporate power
and corporate authority to execute and deliver this Agreement, to perform all of
its obligations and undertakings hereunder and to consummate the transactions
contemplated hereby. The execution and performance of this Agreement and the
sale of the Units by Micron to Photronics have been duly authorized by all
necessary action on the part of Micron, and this Agreement has been duly
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Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the
Securities and Exchange Commission.
authorized, executed and delivered by Micron and constitutes a valid and legally
binding obligation of Micron, enforceable in accordance with its terms, except
as the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and general equitable principles.
(d) Conflicts. The execution, delivery and performance of this
Agreement by Micron or the Company does not conflict with, violate or result in
the breach of, or create any lien or encumbrance on the Transferred Assets or
the Membership Interests of the Company pursuant to, any charter, agreement,
instrument, order, judgment, decree, law or governmental regulation to which
Micron is a party or is subject or by which the Transferred Assets or the
Membership Interests of the Company are bound. The execution, delivery and
performance of this Agreement does not and will not require any governmental or
other third party consents or filings on the part of Micron or the Company.
(e) Transferred Assets. [****]. The Company has, except for
Permitted Exceptions, (i) good and marketable title to, and possession of, all
of the owned Transferred Assets that are real property and (ii) good and valid
title to all of the owned Transferred Assets that are not real property. All of
the Transferred Assets are in good operating condition and repair, ordinary wear
and tear and immaterial defects excepted. The Company has no assets other than
the Transferred Assets and the rights under the Technology License Agreement (as
defined in the LLC Operating Agreement).
(f) Litigation. To Micron's Knowledge, there is no material
Proceeding pending or threatened against, relating to or affecting the
Transferred Assets or the transactions contemplated by this Agreement. "Micron's
Knowledge" and the related term "Known by Micron" shall mean the actual
knowledge of the executive officers of Micron, after due inquiry of the
operating officers of Micron and the Company. "Proceeding" shall mean any
action, suit, hearing, arbitration, proceeding (public or private),
investigation, examination, audit or claim.
(g) Environmental Matters. Except as would not reasonably be
expected to have a Material Adverse Effect on the Company, to Micron's
Knowledge: (i) Micron's operation of the Transferred Assets has complied with
all Environmental Laws; and (ii) no real property constituting a Transferred
Asset contains any Hazardous Substance which could be expected to require
investigation or remediation under any Environmental Law. "Environmental Law"
shall mean any law, regulation, order, decree, common law or agency requirement
relating to the protection of the environment or human health and safety.
"Hazardous Substance" shall mean any substance that is listed, classified or
regulated in any concentration under any Environmental Law including petroleum
products and polychlorinated biphenyls.
(h) Contracts. All material contracts or other material
agreements assigned to the Company by Micron in connection with the transactions
contemplated by this Agreement are set forth on Exhibit C hereto (the "Assumed
Contracts") and are in full force and effect and constitute the valid and
legally binding obligations of the Company, enforceable in accordance
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Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the
Securities and Exchange Commission.
with their terms, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and general equitable
principles. Micron is not in material default under, and to Micron's Knowledge,
no other party is in material default under, any of the Assumed Contracts.
(i) Sufficiency of Assets. To Micron's Knowledge, upon the
execution of, and consummation of the transactions contemplated by, this
Agreement, the Contribution Agreement and the other Transaction Documents, (i)
the tangible assets and properties of the Company as of the Closing Date will
include all of the material tangible assets and properties necessary for the
conduct of the Company's Photomask Business as conducted by Micron immediately
prior to the Closing (not including assets used by Micron in connection with its
performance of services under the Information Technology, Operational and
General Administrative Services Agreement between Micron and the Company (the
"Services Agreement")) and (ii) the services to be performed by Micron pursuant
to the Services Agreement encompass services sufficient for the continued
conduct of Micron's Photomask Business as conducted by Micron immediately prior
the Closing. All of the material machinery and equipment located at the JV Plant
as of the date hereof constitute Transferred Assets (not including (i) assets
used by Micron in connection with its performance of services under the Services
Agreement and (ii) assets used by non-Micron field service personnel in
connection with their performance of services for the Company).
(j) Undisclosed Liabilities. To Micron's Knowledge, Micron's
Photomask Business is not subject to any material liability, whether absolute,
contingent, accrued or otherwise, which is not shown or which is in excess of
amounts shown or reserved for in the unaudited balance sheet of Micron's
Photomask Business dated as of the date hereof and provided to Photronics on the
date hereof, which balance sheet has been prepared from, and is consistent with,
the books and records of Micron.
(k) Permits. To Micron's Knowledge, it operates Micron's
Photomask Business and the Transferred Assets with all required material
Governmental Authority approvals, permits and licenses and is in compliance with
all material terms thereof.
(l) No Material Adverse Effect. Since March 2, 2006, there has
not been any Material Adverse Effect on Micron's Photomask Business.
(m) Compliance with Laws. Micron is in compliance in all
material respects with all Applicable Laws relating to or applicable to the
conduct of Micron's Photomask Business and the ownership and use of the
Transferred Assets.
(n) Title Insurance. Micron has provided Photronics with true
and complete copies of the Micron Title Insurance Policies. To Micron's
knowledge, each of the Micron Title Insurance Policies is, and as of the Closing
will be, in full force and effect according to its terms
(o) Brokers and Finders. Micron has not engaged any broker or
finder in connection with this transaction.
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**** Material omitted pursuant to a request for confidential treatment under
Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the
Securities and Exchange Commission.
5. Representations and Warranties of Photronics. Photronics
hereby acknowledges, represents and warrants to Micron as follows:
(a) Organization. Photronics is duly organized, validly
existing and in good standing under the laws of its jurisdiction of formation.
Photronics has all corporate power and authority required to conduct its
business as currently conducted and to own and lease its properties and operate
its business as currently owned, leased and operated. Photronics is duly
qualified to do business and is in good standing (to the extent such concept
exists in the relevant jurisdiction) as a foreign corporation or limited
liability company, as applicable, in each jurisdiction where the character of
the property owned or leased or the nature of its activities makes such
qualification necessary, except for those jurisdictions where the failure to be
so qualified or in good standing is not reasonably likely to result in a
Material Adverse Effect on Photronics.
(b) Authorization. Photronics has all requisite corporate
power and corporate authority to execute and deliver this Agreement, to perform
all of its obligations and undertakings hereunder and to consummate the
transactions contemplated hereby. The execution and performance of this
Agreement and the purchase of the Units by Photronics from Micron have been duly
authorized by all necessary action on the part of Photronics, and this Agreement
has been duly authorized, executed and delivered by Photronics and constitutes a
valid and legally binding obligation of Photronics, enforceable in accordance
with its terms, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and general equitable
principles.
(c) Conflicts. The execution, delivery and performance of this
Agreement by Photronics does not conflict with, violate or result in the breach
of any charter, agreement, instrument, order, judgment, decree, law or
governmental regulation to which Photronics is a party or is subject. The
execution, delivery and performance of this Agreement does not and will not
require any governmental or other third party consents or filings either on the
part of Photronics.
(d) Investment Representations.
(i) Photronics is acquiring the Units for investment
purposes and is not acquiring the Units with a view to the public sale
or distribution of any part thereof, and Photronics has no present
intention of selling, granting participation in, or otherwise
distributing the Units in violation of any federal or state securities
laws. Photronics recognizes that it must bear the economic risk of the
investment represented by its purchase of the Units for an indefinite
period according to the terms of the LLC Operating Agreement.
Photronics understands that the Units have not been registered under
the Securities Act of 1933 on the basis that the sale provided for in
this Agreement is exempt under the Act and that the reliance of Micron
on such exemptions is predicated upon such Photronics' representations
set forth herein.
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Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the
Securities and Exchange Commission.
(ii) Photronics acknowledges and agrees that any
certificates representing Units held by Photronics, and the LLC
Operating Agreement, will be affixed with the following legend:
"MEMBERSHIP INTERESTS IN MP MASK TECHNOLOGY CENTER, LLC, A DELAWARE
LIMITED LIABILITY COMPANY, HAVE NOT BEEN REGISTERED WITH OR QUALIFIED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY SECURITIES REGULATORY
AUTHORITY OF ANY STATE. THE INTERESTS ARE BEING SOLD IN RELIANCE UPON
EXEMPTIONS FROM SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS. THE
INTERESTS CANNOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED
OF EXCEPT IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFERABILITY
CONTAINED IN THE LIMITED LIABILITY COMPANY OPERATING AGREEMENT OF MP
MASK TECHNOLOGY CENTER, LLC AND APPLICABLE FEDERAL AND STATE SECURITIES
LAWS."
(iii) Photronics hereby acknowledges that Micron has
provided to Photronics no information regarding the Company, or its
business, prospects or value, and is making no representations other
than those in Section 4 hereof. Photronics further acknowledges that it
has conducted an independent investigation and has been given access by
the Company or parties unrelated to Micron to all information regarding
the Company that it has requested, but such investigation shall not
relieve Micron on liability for breaches of representations and
warranties made by Micron in Section 4. Photronics is capable of
evaluating and has evaluated the merits and risks of its acquisition of
the Units.
(iv) Photronics hereby acknowledges that Micron is relying
on the representations contained in this Agreement in engaging in the
sale of the Membership Interests of the Company and would not engage in
the sale of the Membership Interests of the Company in the absence of
the representations contained in this Agreement.
(e) Brokers and Finders. Photronics has not engaged any broker
or finder in connection with this transaction.
6. Covenants.
(a) Operations Prior to the Closing Date. Prior to the Closing
Date, Micron shall operate Micron's Photomask Business and the Transferred
Assets in the ordinary course and substantially as presently operated.
(b) No Sale of Assets. Except for the sale of inventory in the
ordinary course of business and the disposition of broken or obsolete assets,
Micron will not, directly or indirectly, (a) solicit any inquiries or proposals
or enter into or continue any discussions, negotiations or agreements relating
to the direct or indirect transfer of the Transferred Assets to
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Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the
Securities and Exchange Commission.
any Person other than the Company or (b) provide any assistance or any
information to or otherwise cooperate with any Person in connection with any
such inquiry proposal or transaction.
(c) Diligence in Pursuit of Closing. Each of the parties
hereto shall use all commercially reasonable efforts to fulfill their respective
obligations hereunder and under the other Transaction Documents, and shall
reasonably cooperate with the other parties in regard to the same in order to
effect the Closing.
(d) Maintenance of Insurance. Prior to the Closing, Micron
shall not take or fail to take any action that would adversely affect the
applicability and the extent of coverage of any insurance in effect on the date
hereof, in any material respect, that covers all or any part of the Transferred
Assets, as and to the extent such insurance applies to and covers insured risks
for periods prior to the Closing Date.
(e) Confidentiality. The disclosure and exchange of
information between Micron and Photronics is governed solely by the terms of the
Micron Technology, Inc. Mutual Nondisclosure Agreement dated as of March 29,
2005, as amended, and by the Nondisclosure Agreement among Micron, Photronics
and the Company included as part of the Transaction Documents (the
"Confidentiality Agreements").
(f) Press Releases. The parties agree that, following the
signing of this Agreement, they shall issue a joint press release, the text of
which shall have been pre-approved by Micron and Photronics. Except as required
by law or regulation, prior to the issuance of such press release, none of the
parties hereto shall make any public disclosure, announcement or statement with
respect to this Agreement, the Transaction Documents or the Joint Venture or any
of the transactions contemplated by this Agreement or the Transaction Documents.
(g) Title. Micron covenants that following the Closing Date,
Micron, without cost to Micron but for the benefit of the Company, will
diligently and reasonably present and prosecute to the fullest extent of
available coverage claims under the policies of title insurance, and riders and
endorsements thereto, issued effective upon Micron's acquisition of fee simple
title to the real property constituting Transferred Assets (the "Micron Title
Insurance Policy") with respect to any claim, action, loss or damage affecting
such property that the Company may assert against Micron. Micron agrees to pay
over to the Company any proceeds paid to Micron in respect of Micron's claims
asserted under the Micron Title Insurance Policy to the extent related to the
real property constituting Transferred Assets.
(h) Opening Balance Sheet. [****]. If the net asset value of
the Transferred Assets on the Opening Balance Sheet is less than the NAV Amount,
then Micron shall promptly wire an amount of cash equal to such deficiency to
the Company. If the net asset value on the Opening Balance Sheet is greater than
the NAV Amount, then the Company shall promptly wire an amount equal to such
excess to Micron.
7. Survival of Representations and Warranties. All
representations and warranties contained herein or made in writing by any party
in connection herewith shall survive
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Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the
Securities and Exchange Commission.
the execution and delivery of this Agreement and the Closing hereunder for a
period of one (1) year following the Closing Date, except for the
representations and warranties set forth in Sections 4(b) and 4(c) and the
second sentence of Section 4(e), which shall survive the execution and delivery
of this Agreement and the Closing for a period of ten years following the
Closing Date.
8. Indemnification.
(a) Agreement to Indemnify.
(i) Micron agrees to indemnify and hold harmless Photronics
and each of its representatives and affiliates (including the Company)
(each a "Photronics Indemnified Party") against any and all
liabilities, claims, demands or losses, including reasonable attorneys'
fees incurred by any Photronics Indemnified Party arising out of, or
resulting from, (u) any breach of any representation or warranty made
by Micron in this Agreement or any other certificate delivered by
Micron pursuant to this Agreement, (v) any breach of any covenant made
by Micron in this Agreement or any other certificate delivered by
Micron pursuant to this Agreement, (w) any known liabilities of
Micron's Photomask Business not assumed by the Company pursuant to the
Transaction Documents, (x) any Pre-Closing Environmental Matter or (y)
any products distributed by Micron prior the Closing. "Pre-Closing
Environmental Matter" shall mean (a) the production, use, generation,
emission, storage, treatment, transportation, recycling, disposal,
discharge, release or other handling or disposition at any time on or
prior to the Closing Date of any Hazardous Substances on, from or under
any real property included in the Transferred Assets by Micron or any
affiliate of Micron or (b) the failure prior to the Closing Date by
Micron or any affiliate of Micron to operate the business on any real
property included in the Transferred Assets in compliance with any
Environmental Law.
(ii) Photronics agrees to indemnify and hold harmless
Micron and each of its representatives and affiliates (including the
Company) (each a "Micron Indemnified Party") against any and all
liabilities, claims, demands or losses, including reasonably attorneys'
fees, incurred by any Micron Indemnified Party arising out of, or
resulting from, (u) any breach of any representation or warranty made
by Photronics in this Agreement or any other certificate delivered by
Photronics pursuant to this Agreement or (v) any breach of any covenant
made by Photronics in this Agreement or any other certificate delivered
by Photronics pursuant to this Agreement.
(b) Limitations on Indemnification.
(i) [****].
(ii) [****].
(iii) After the Closing, with respect to any matter as to
which indemnification is provided pursuant to Section 8 of this
Agreement, such
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Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the
Securities and Exchange Commission.
indemnification shall be the sole remedy available to a Photronics
Indemnified Party or Micron Indemnified Party, as the case may be;
provided, however, that this Section 8(b)(iii) shall not limit any
party's rights to bring a claim, action or suit for fraud or bad faith.
(c) Indemnification Procedures. In the event a Photronics
Indemnified Party or a Micron Indemnified Party intends to make a claim for
indemnification hereunder on behalf of himself or any Photronics Indemnified
Party or Micron Indemnified Party, respectively (an "Indemnitee"), such party
shall notify whichever of Micron or Photronics against whom indemnity is being
sought (the "Indemnitor") of the claim in writing promptly (but in no event
later than thirty (30) days) after receiving written notice of any action,
lawsuit, proceeding, investigation or other claim against him (if by a third
party) or discovering the liability, obligation or facts giving rise to such
claim for indemnification, describing the claim, the amount thereof (if known
and quantifiable), and the basis thereof, provided that the failure to so notify
the Indemnitor shall not relieve the Indemnitor of his obligations hereunder
except to the extent such failure shall have actually prejudiced the Indemnitor.
The Indemnitor shall be entitled to assume and control (with counsel of its
choice) the defense of the action, lawsuit, proceeding, investigation or other
claim giving rise to Indemnitee's claim for indemnification at the option and
expense of the Indemnitor by sending written notice of its election to do so
within fifteen (15) days after receiving written notice of such claim from the
Indemnitee as aforesaid; provided, however, that:
(i) The Indemnitee shall be entitled to participate in the
defense of such claim and to employ counsel of its choice for such
purpose, the fees and expenses of such separate counsel which shall be
borne by the Indemnitee;
(ii) If the Indemnitor elects to assume the defense of any
such claim, the Indemnitor shall be entitled to compromise or settle
such claim so long as either (x) such settlement provides an
unconditional release of all Indemnitees with respect to such claim and
requires the payment of monetary damages only or (y) the Indemnitor
obtains the prior written consent of the Indemnitee (which consent
shall not be unreasonably withheld or delayed); and
(iii) If the Indemnitor shall not have assumed the defense
of such claim within the 15-day period set forth above, the Indemnitee
may assume the defense of such action, lawsuit, proceeding,
investigation or such other claim with counsel selected by it (which
counsel shall be reasonably acceptable to the Indemnitor) at the
expense of the Indemnitor, provided that the Indemnitee shall under no
circumstances settle or compromise such claim without the prior written
consent of the Indemnitor (which consent shall not be unreasonably
withheld or delayed).
9. Termination. This Agreement may be terminated at any time
prior to the Closing (a) by mutual written consent of the parties hereto or (b)
if the Closing does not occur prior to July 1, 2006, provided that no party
shall be entitled to terminate this Agreement pursuant to this clause (b) if
such party is in breach of any provision hereof or if the Closing has
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Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the
Securities and Exchange Commission.
not occurred despite the satisfaction of the conditions to such party's
obligation to close. In the event of the termination of this Agreement pursuant
to this Section 9, this Agreement shall become void and of no further force and
effect, there shall be no liability under this Agreement and all rights and
obligations of each party hereto shall cease, provided that nothing herein shall
relieve any party from liability for, or be deemed to waive any rights available
to a party by reason of, any breach by the other party or parties of its or
their representations, warranties, covenants or agreements set forth in this
Agreement. If the Closing does occur, this Agreement may not be terminated
thereafter by either party without the prior written consent of the other.
10. Further Assurances. After the Closing, as and when
requested by Photronics, Micron shall execute and deliver all such instruments
of conveyance and transfer and shall take such further actions as Photronics may
deem reasonably necessary to transfer the Units to Photronics and to carry out
fully the provisions and purposes of this Agreement. After the Closing, as and
when requested by Micron, Photronics shall take such further actions as Micron
may deem reasonably necessary to carry out fully the provisions and purposes of
this Agreement.
11. Miscellaneous.
(a) Successors and Assigns. This Agreement is intended to bind
and inure to the benefit of and be enforceable by Micron and Photronics and
their respective successors and assigns. This Agreement may not be assigned by
either party hereto without the prior written consent of the other party to this
Agreement, which consent shall not be unreasonably withheld.
(b) Amendment. This Agreement may be amended only through a
writing signed by all parties hereto.
(c) Entire Agreement and Modification. This Agreement and all
agreements between Micron and Photronics entered into concurrently herewith,
including the LLC Operating Agreement and the other Transaction Documents,
together with the Confidentiality Agreements, constitute and contain the entire
agreement of the parties and supersede and preempt any and all prior
negotiations, correspondence, understandings, agreements and representations,
written or oral, which may have related to the subject matter hereof.
(d) Choice of Law. The construction, validity, interpretation
and enforcement of this Agreement shall be governed by the internal law, and not
the law of conflicts, of the State of Delaware. EACH OF THE PARTIES HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH OF THE PARTIES
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT THE PARTIES HERETO
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Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the
Securities and Exchange Commission.
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8(d).
(e) Enforcement. If any portion of this Agreement shall be
determined to be unenforceable for any reason, it shall be adjusted rather than
voided, if possible, in order to achieve the intent of the parties to the extent
possible. In any event, all other provisions of this Agreement shall be valid
and enforceable to the maximum extent possible.
(f) Headings. The headings appearing in this Agreement have
been inserted for identification and reference purposes and shall not by
themselves determine the construction or interpretation of this Agreement.
(g) Notices. Unless otherwise provided herein, all notices,
requests, instructions or consents required or permitted under this Agreement
shall be in writing and will be deemed given: (a) when delivered personally; (b)
when sent by confirmed facsimile; (c) ten (10) business days after having been
sent by registered or certified mail, return receipt requested, postage prepaid;
or (d) three (3) business days after deposit with an internationally recognized
commercial overnight carrier specifying next day delivery, with written
verification of receipt. All communications will be sent to the addresses listed
on Exhibit A to the LLC Operating Agreement (or to such other address or
facsimile number as may be designated by a party giving written notice to the
other parties pursuant to Section 11.5 of the LLC Operating Agreement).
(h) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which taken together shall constitute one and the same agreement.
(i) Expenses. Except as otherwise provided herein, each party
shall pay all costs and expenses that it incurs with respect to the negotiation,
execution, delivery, performance and consummation of this Agreement, except that
the Company shall pay any transfer Taxes, recording and filing fees, and other
charges with respect to the transfer of the Transferred Assets at the
Contribution Closing.
(signature page follows)
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Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the
Securities and Exchange Commission.
Exhibit 10.18
IN WITNESS WHEREOF, the parties have executed this Agreement
on the day and year first above written.
MICRON TECHNOLOGY, INC.
By:
----------------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
PHOTRONICS, INC.
By:
------------------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
MP MASK TECHNOLOGY CENTER, LLC
By:
-----------------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
**** Material omitted pursuant to a request for confidential treatment under
Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the
Securities and Exchange Commission.
Schedule A
Transferred Assets
[****]
**** Material omitted pursuant to a request for confidential treatment under
Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the
Securities and Exchange Commission.
Schedule B
Transaction Documents
Contribution and Units Purchase Agreement among Micron, Photronics and the
Company
Limited Liability Company Operating Agreement between Micron and Photronics
Company to Micron Direct Supply Agreement between Micron and the Company
Company to Photronics Supply Agreement between Photronics and the Company
Photronics to Micron Supply Agreement between Micron and Photronics
Technology License Agreement among Micron, Photronics and the Company
Information Technology, Operational and General Administrative Services
Agreement between Micron and the Company
Operational and General Administrative Services Agreement between Photronics and
the Company
Nondisclosure Agreement among Micron, Photronics and the Company
Non-solicitation Agreement among Micron, Photronics and the Company
Assignment and Assumption Agreement between Micron and the Company
▇▇▇▇ of Sale between Micron and the Company
Warranty Deed between Micron and the Company
Build to Suit Lease between Micron and Photronics
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Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the
Securities and Exchange Commission.
Schedule C
Assumed Contracts and Assumed Liabilities
[****]
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Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the
Securities and Exchange Commission.