EXHIBIT 10.82
RESTRUCTURING, SETTLEMENT
AND MUTUAL RELEASE AGREEMENT
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This Restructuring, Settlement and Mutual Release Agreement (this "Agreement")
is entered into as of this 10th day of July, 1998 (the "Effective Date"), by and
among Microelectronic Packaging, Inc. ("MPI"), on behalf of itself and its
predecessors, successors, former or current subsidiaries, affiliates, officers,
directors, shareholders, agents, attorneys, representatives, insurers, employees
and assigns (other than Microelectronic Packaging (S) Pte Ltd ("MPS") and MPM
(S) Pte Ltd ("MPM"), both of which are subsidiaries of MPI that are currently in
liquidation) (collectively with MPI, the "MPI Releasees"), and The Development
Bank of Singapore Limited ("DBS") and its predecessors, successors,
subsidiaries, affiliates, officers, directors, stockholders, agents, attorneys,
representatives, insurers, employees and assigns (collectively with DBS, the
"DBS Releasees").
W I T N E S S E T H:
WHEREAS, DBS and MPS entered into a Deed of Debenture dated June 10, 1986 (the
"Deed"), which was subsequently amended by supplemental deeds dated July 16,
1987, February 20, 1989, August 24, 1990, June 4, 1992, October 30, 1993 and
January 11, 1994 (the "Supplemental Deeds"), such that, in connection with the
Deed and the Supplemental Deeds, DBS provided certain credit facilities to MPS,
and the Deed and the Supplemental Deeds call for certain payments and interest
amounts on amounts loaned to MPS pursuant to such credit facilities which were
thereafter due and payable periodically;
WHEREAS, DBS and MPS restated the terms of such credit facilities in an
agreement dated August 15, 1994 (the "Restatement"), and MPS owed DBS S$4.275
million as of March 8, 1998 under the Deed, the Supplemental Deeds and the
Restatement;
WHEREAS, DBS and MPM entered into a credit facilities arrangement dated
December 15, 1994 (the "Facilities Arrangement" and, collectively with the Deed,
the Supplemental Deeds and the Restatement, the "Loan Agreements"), such that in
connection with the Facilities Arrangement, DBS provided certain credit
facilities to MPM, and the Facilities Arrangement calls for certain payments and
interest amounts on amounts loaned to MPM pursuant to such credit facilities
which were thereafter due and payable periodically, such that MPM owed DBS
S$2.134 million as of March 8, 1998 under the Facilities Arrangement;
WHEREAS, MPI guaranteed the obligations of MPS under the Deed (the
"Guarantees"), the Supplemental Deeds and the Restatement and the obligations of
MPM under the Facilities Arrangement, and MPS and MPM have defaulted upon such
obligations, giving rise to MPI's obligations under such guarantees;
WHEREAS, DBS has a priority claim in the MPS liquidation proceeding with
respect to certain buildings owned by MPS and located at 28 Tuas Avenue 10 and
31 Tuas Avenue 8, respectively, Singapore (the "Buildings"), which DBS has
advised MPI have a
liquidation value (net of DBS Finance's mortgage on 28 Tuas Avenue 10 and
reasonable selling commissions) ("Net Liquidation Amount") of S$4.24 million,
which partially offsets the guarantee obligations of MPI;
WHEREAS, NS Electronics Bangkok (1993) Ltd. ("NSEB") owes the sum of
US$673,807.77 to MPS, which is carried on MPS' accounts as an account receivable
(the "Account Receivable"), to which DBS has a priority claim in the MPS
liquidation proceeding, and MPI has requested that DBS provide to NSEB a written
release of the Account Receivable;
WHEREAS, DBS has asserted an entitlement to certain insurance proceeds
in respect of certain fire-related insurance claims (claim number 553KF68422
with the Hartford Insurance Company relating to a date of loss of April 5, 1997)
of MPS and MPM ("Insurance Proceeds"), which proceeds will be paid to MPI, and
DBS has requested that MPI pay to DBS a guaranteed minimum amount of
US$136,606.02 in respect of such Insurance Proceeds; and
WHEREAS, the parties wish to settle all obligations under the Loan
Agreements and the Guarantees, and terminate and release all rights and
obligations under such documents and all other related agreements, and settle
all other disputes that may exist between MPI and each of the other MPI
Releasees and DBS and each of the other DBS Releasees.
NOW, THEREFORE, in consideration of the mutual promises contained herein
and for other good and sufficient consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as follows:
1. Definitions.
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a. "Payment Date" shall mean the calendar date after MPI completes the full
performance of its obligation under subsection 2.a.i. of this Agreement.
b. "Release Date" shall be the calendar date that is ninety (90) days after
the Payment Date.
c. "Insolvency Action" shall mean the commencement of a voluntary or
involuntary case against MPI under the United States Bankruptcy Code or an
assignment for the benefit of creditors by MPI that is not dismissed within
sixty (60) days of its commencement.
d. Other defined terms shall have the meanings assigned to them herein.
2. Settlement. In order to settle the defaults, amounts owed, debts,
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liabilities and other obligations pursuant to, in connection with, or arising
out of the Loan Agreements, the Guarantees and each of their respective related
agreements, letters, documents and instruments (collectively, the "Loan
Documents"), MPI and DBS agree that:
a.
i. MPI will, within six (6) calendar months of the Effective Date, pay
to DBS the amount of US$1,177,397.20 (exclusive of any wire transfer charges) by
wire transfer in accordance with the wire transfer instructions provided by DBS.
Any and all wire transfer
charges incurred in connection with the payment required under this paragraph
shall be borne solely by MPI; and
ii. Provided that DBS has timely completed the full performance of its
obligations under subsection 2.b. of this Agreement:
A. if MPI receives Insurance Proceeds in an aggregate amount which
exceeds US$136,606.02, then MPI will promptly pay to DBS the amount by which
such aggregate amount of Insurance Proceeds exceeds US$136,606.02.
B. within thirty (30) days of receiving Net Monetary Proceeds from
the Settlement (as defined below), MPI will pay to DBS five percent (5%) of the
net monetary proceeds MPI receives directly from International Business Machines
Corporation ("IBM") or any agent of IBM pursuant to any cash settlement,
monetary award granted pursuant to court-ordered arbitration or meditation
proceedings or court order based upon claims for monetary damages asserted by
MPI under the Purchase Option Agreement dated August 4, 1994 by and between IBM
and MPI and the Multilayer Technology Transfer and Licensing Agreement dated
August 4, 1994 between IBM and MPI (the "Settlement"). "Net Monetary Proceeds"
are monetary proceeds from the Settlement received by MPI less all expenses MPI
incurs in obtaining the Settlement, including without limitation legal fees and
expenses.
C. if DBS receives a Net Liquidation Amount of less than S$4.24
million, MPI will pay to DBS, within six (6) calendar months of notice from DBS
of the amount of the Net Liquidation Amount received by DBS and the existence of
such a shortfall, thirty percent (30%) of the difference between S$4.24 million
and the Net Liquidation Amount received by DBS.
b. Immediately upon receipt of the payment provided for in Section 2.a.i.,
the Receivers and Managers of MPS will provide to NSEB a written release
executed by the Receivers and Managers of MPS providing that NSEB is no longer
liable for the Account Receivable.
3. Release Procedure. If and only if no Insolvency Action has occurred, then
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effective the Release Date:
a. DBS, on behalf of itself and the other DBS Releasees, agrees as follows:
i. DBS, on behalf of itself and each other DBS Releasee, fully and
forever releases and discharges each of the MPI Releasees (which do not include
MPS or MPM) from and against any and all claims, damages and causes of action
they may have against each such person or entity with respect to any matter
under the provisions of, arising out of or in connection with, the Loan
Documents, including any breach of any representation or warranty or
noncompliance or nonfulfillment of any covenant or agreement set forth in such
documents; provided that such release and discharge shall not extend to (A) any
claims, damages and causes of action any DBS Releasee may have against any MPI
Releasee for fraud or willful misconduct
with respect to any of the Loan Documents, or (B) the obligations of MPI under
this Agreement.
ii. DBS agrees that each of the Loan Documents so far as they relate to
or are enforceable against or capable of relating to or capable of being
enforceable against MPI, regardless of whether they are in default, are fully
and completely terminated and rendered devoid of legal effect and unenforceable,
such that even provisions of the Loan Documents that, according to their terms,
survive termination, are terminated and nullified. Further, DBS acknowledges and
agrees that any loan, debt, liability or other obligation created pursuant to or
arising out of the Loan Documents so far as they relate to or are enforceable
against or capable of relating to or capable of being enforceable against MPI,
as well as any writings, agreements, notes or certificates representing such
loan, debt, liability or obligations, are canceled and rendered devoid of force
and effect.
iii. Notwithstanding anything in this Agreement to the contrary, in
particular (but without prejudice to the generality of this Section 3.a.iii.)
Section 3.a.ii. above:
A. MPI's liability under the Guarantees shall only be discharged
effective the date which is ninety calendar days after the
calendar date MPI pays to DBS the US$1,177,397.20 required
under Section 2.a.i. of this Agreement.
B. Nothing herein shall be construed as a waiver by DBS of any of
DBS's rights and remedies against MPS and/or MPM whether in
connection with MPS' liquidation or under the Deed,
Supplemental Deeds, the Restatement and the Loan Documents and
DBS reserves and retains all such rights and remedies (legal,
equitable or otherwise) against MPS and MPM.
b. MPI, on behalf of itself and the other MPI Releasees, agrees as follows:
i. MPI, on behalf of itself and each other MPI Releasee, fully and
forever releases and discharges each of the DBS Releasees from any claims,
damages, and causes of action it or they may have against any of them with
respect to any matter under the provisions of, arising out of or in connection
with the Loan Documents; provided that such release and discharge shall not
extend to (A) any claims, damages and causes of action any MPI Releasee may have
against any DBS Releasee for fraud or willful misconduct with respect to any of
the Loan Documents, or (B) the obligations of DBS under this Agreement.
ii. MPI acknowledges and agrees that each of the Loan Documents are
fully and completely terminated and rendered devoid of force and effect, such
that even provisions of the Loan Documents and each of their respective related
agreements, letters, documents and instruments that, according to their terms,
survive termination, are terminated and nullified.
4. Confidentiality. No party to this Agreement shall, except as may be
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mandated by statutory or regulatory requirements, as may be required by legal
process in the course of actual litigation or in the case of a subpoena, or as
may be necessary for MPI to negotiate with its creditors, disclose to others the
fact or terms of this settlement, the amounts referred to in this Agreement or
the fact of the payment of said amounts, except that each such party may
disclose to each such party's attorneys, accountant or other advisors to whom
the disclosure is necessary to effectuate the purposes for which such party has
consulted with such professional advisors and except that (i) MPI may file this
Agreement with any governmental or regulatory body, describe it and refer to it
in any filing it makes pursuant to federal and state securities laws or to its
Board of Directors or shareholders, and (ii) MPI may issue a press release
describing the general terms of this Agreement in connection with any public
filing it makes with any governmental or regulatory body.
5. Representations and Warranties.
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a. MPI. MPI represents and warrants that:
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i. It has all requisite corporate power and authority to execute and
deliver, and fulfill its obligations under this Agreement. This Agreement
(notwithstanding the lack of approval of MPS and MPM), upon execution and
delivery by MPI and assuming due and proper execution and delivery by DBS, will
constitute a valid and binding obligation of MPI, enforceable in accordance with
its terms, except as such enforcement may be limited by bankruptcy, insolvency,
moratorium and other laws of general application affecting the enforcement of
creditors' rights.
ii. No consent, approval, order or authorization, or registration,
qualification, designation, declaration or filing with, any federal, state or
local governmental authority on the part of MPI is required in connection with
the execution, delivery and performance of this Agreement by MPI, other than
state securities law filings.
iii. No consent, approval, waiver or other action by any person under
any contract, agreement, indenture, lease, instrument or other document to which
MPI is a party or by which it is bound is necessary for the execution, delivery
and performance of this Agreement by MPI.
b. DBS. DBS represents and warrants that:
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i. It has all requisite corporate power and authority to execute and
deliver, and fulfill its obligations under this Agreement. This Agreement
(notwithstanding the lack of approval of MPS and MPM), upon execution and
delivery by DBS, and assuming due and proper execution and delivery by MPI, will
constitute a valid and binding obligation of DBS, enforceable in accordance with
its terms, except as such enforcement may be limited by bankruptcy, insolvency,
moratorium and other laws of general application affecting the enforcement of
creditors' rights.
ii. No consent, approval, order or authorization, or registration,
qualification, designation, declaration or filing with, any foreign, federal,
state or local governmental or other authority or third party on the part of DBS
is required in connection with the execution, delivery
and performance of this Agreement.
iii. No consent, approval, waiver or other action by any person under
any contract, agreement, indenture, lease, instrument or other document or law,
ordinance, statute, rule or regulation to which DBS is a party or by which it or
its property is bound is necessary for the execution, delivery and performance
of this Agreement.
6. Miscellaneous. MPI and DBS hereby agree as follows:
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a. Severability. If any provision of this Agreement is found to be
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unenforceable, it shall not affect the enforceability of the remaining
provisions and the court shall enforce all remaining provisions to the extent
permitted by law. All parties agree that, notwithstanding the lack of execution
of this Agreement by MPS and MPM, this Agreement is valid, binding and
enforceable on all parties.
b. Prior Agreements. This Agreement shall supersede and render null and
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void any and all prior agreements between MPI and/or any MPI Releasee, on one
hand, and DBS and/or any DBS Releasee, on the other hand, concerning the subject
matter contained herein.
c. Successors and Assigns. This Agreement shall bind and benefit each of
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DBS and its successors and assigns and shall also bind and benefit each MPI and
its successors and assigns. This Agreement may not be assigned by MPI, by
operation of law (e.g., merger) or otherwise (e.g., sale of substantially all
assets), without the prior written consent of DBS, except that no such consent
shall be required after the Release Date.
d. Governing Law. This Agreement shall be deemed to have been entered into
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in the State of California and shall be construed and interpreted in accordance
with the laws of California.
e. Jurisdiction. The parties to the Agreement hereby (i) irrevocably
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submit to the jurisdiction of the courts of the State of California and the
Federal courts of the United States sitting in the State of California for the
purpose of any action or proceeding arising out of or relating to this Agreement
and any other documents and instruments relating hereto, (ii) agree that all
claims in respect of any such action or proceeding may be heard and determined
in such courts, (iii) irrevocably waive (to the extent permitted by applicable
law) any objection which any of them now or hereafter may have to the laying of
venue of any such action or proceeding brought in any of the foregoing courts,
and any objection on the ground that any such action or proceeding in any such
court has been brought in an inconvenient forum and (iv) agree that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
permitted by law.
f. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
g. Titles and Subtitles. The titles and subtitles used in this Agreement
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are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
h. Amendment. No amendment, modification or waiver of this Agreement or
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any part thereof shall be effective unless it is in writing and is signed by MPI
and DBS. No delay on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof. Nor shall any waiver on
the part of any party of any such right, power or privilege, nor any single or
partial exercise of any such right, power or privilege, preclude any further
exercise thereof or the exercise of any other such right, power or privilege.
The rights and remedies herein provided are cumulative and are not exclusive of
any rights or remedies that any party may otherwise have at law or in equity.
The rights and remedies of any party based upon, arising out of or otherwise in
respect of any inaccuracy in or breach or nonfulfillment of or noncompliance
with any representation, warranty, covenant or agreement contained in this
Agreement shall in no way be limited by the fact that the act, omission,
occurrence or other state of facts upon which any claim of any such inaccuracy
or breach is based may also be the subject matter of any other representation,
warranty, covenant or agreement contained in this Agreement (or in any other
agreement between the parties) as to which there is no inaccuracy or breach.
i. Termination. This Agreement may be terminated upon the mutual written
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consent of MPI and DBS. DBS may terminate this Agreement upon three (3)
business days' written notice to MPI in the event (i) an Insolvency Action
occurs or (ii) MPI commits a material breach of this Agreement. Unless
previously terminated pursuant to Section 3 of this Agreement, the Loan
Documents shall remain in full force and effect upon any termination of this
Agreement.
j. Survival of Representations, Warranties, Covenants and Agreements. The
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representations, warranties, covenants and agreements contained in this
Agreement shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
k. Notices. All notices, demands or other communications to be given or
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delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to the
recipient, sent to the recipient by reputable overnight courier service (charges
prepaid), mailed to the recipient by certified or registered mail, return,
receipt requested and postage prepaid, or transmitted by facsimile (with request
for immediate confirmation of receipt in a manner customary for communications
of such type and with physical delivery of the communication being made by one
of the other means specified in this Section as promptly as practicable
thereafter). Such notices, demands and other communications shall be addressed
as follows:
If to DBS:
Attn: Manager, Communications/Electronics
Corporate Banking
DBS Bank
6 Shenton Way
DBS Building, Tower One
Singapore 068809
If to MPI:
Attn: President
Microelectronic Packaging, Inc.
9577 Chesapeake Drive
San Diego, CA 92123
Telephone: (619) 292-7000
Telecopy: (619) 292-7881
with a copy to:
Brobeck, Phleger & Harrison LLP
Two Embarcadero Place
2200 Geng Road
Palo Alto, California 94303-0913
Attention: Warren T. Lazarow, Esq.
Telephone: (650) 424-0160
Telecopy: (650) 496-2885
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party
(provided that notice of a change of address shall be effective only upon
receipt thereof).
l. Stamp Duties. Any stamp duties imposed under applicable Singapore law in
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respect of this Agreement, shall be borne by MPI.
m. Strict Construction. This Agreement is the result of arms-length
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negotiations between the parties hereto and has been prepared jointly by the
parties. In applying and interpreting the provisions of this Agreement, there
shall be no presumption that the Agreement was prepared by any one party or that
the Agreement shall be construed in favor of or against any one party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.
MICROELECTRONIC PACKAGING, INC.
By: /s/ Denis J. Trafecanty
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Denis J. Trafecanty
Chief Financial Officer
THE DEVELOPMENT BANK OF SINGAPORE
LIMITED
By: /s/ Joan Ting-Wong (Mrs)
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Senior Vice President