EXHIBIT 10.1
EXECUTION COPY
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
ESSEX ELECTRIC INC.
AND
SOUTHWIRE COMPANY
DATED SEPTEMBER 30, 2005
CONTENTS
ARTICLE 1 PURCHASE AND SALE OF ASSETS..........................................1
1.1 Purchase of the Purchased Assets....................................1
1.2 Purchase Price......................................................1
1.3 Payment of the Purchase Price.......................................2
1.4 Adjustment of Purchase Price........................................2
1.5 Prorations and Certain Payments.....................................3
1.6 Closing.............................................................4
1.7 Deliveries..........................................................4
1.8 Sale of Idled Production Machinery and Equipment....................4
1.9 Allocation of Purchase Price........................................4
ARTICLE 2 ASSUMPTION OF LIABILITIES............................................4
2.1 Assumption of Assumed Liabilities...................................5
2.2 Assignment of Certain Contracts.....................................5
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER.............................5
3.1 Organization and Qualification......................................5
3.2 Authority and Binding Effect........................................5
3.3 Validity of Contemplated Transactions; Governmental Authorizations..6
3.4 Subsidiaries; Joint Ventures........................................7
3.5 Title to Purchased Assets; No Liens.................................7
3.6 Absence of Certain Changes..........................................7
3.7 Taxes...............................................................8
3.8 Xxxxxxxx Real Property..............................................8
3.9 Personal Property...................................................9
3.10 Condition of Property...............................................9
3.11 Intellectual Property...............................................9
3.12 Indebtedness.......................................................10
3.13 Inventory..........................................................10
3.14 Licenses...........................................................10
3.15 Environmental......................................................10
3.16 Litigation.........................................................12
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3.17 Employee Benefit Plans.............................................12
3.18 Contracts..........................................................13
3.19 Products, Services & Warranties....................................14
3.20 Suppliers and Customers............................................14
3.21 Employee Matters...................................................15
3.22 Brokers and Finders................................................15
3.23 Compliance with Law................................................15
3.24 Statements True and Correct........................................15
3.25 Patronage..........................................................15
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER.............................16
4.1 Organization, Standing and Foreign Qualification...................16
4.2 Authority and Binding Effect.......................................16
4.3 Validity of Contemplated Transactions, Restrictions................16
4.4 Brokers and Finders................................................16
4.5 Financing..........................................................16
4.6 Statements True and Correct........................................17
ARTICLE 5 COVENANTS AND ADDITIONAL AGREEMENTS OF SELLER AND PURCHASER.........17
5.1 Operation of Business Pending Closing..............................17
5.2 Right of Inspection; Access........................................17
5.3 Confidentiality....................................................18
5.4 Public Announcements...............................................18
5.5 Use of Names.......................................................18
5.6 Environmental Corrective Actions...................................19
5.7 Environmental Compliance Matters...................................19
5.8 Employees..........................................................19
5.9 WARN Act...........................................................20
5.10 Reimbursement for Severance Obligations............................20
5.11 Other Offers and Exclusive Dealing.................................20
5.12 Certain Tax Matters................................................21
5.13 Idled Production Machinery and Equipment...........................21
5.14 Expenses...........................................................21
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5.15 Delivery of Books and Records......................................22
5.16 Alpine Proxy Materials.............................................22
5.17 HSR Act Filings....................................................22
5.18 Further Assurances; Covenant to Satisfy Conditions.................22
5.19 Title..............................................................23
5.20 Notification of Changes............................................24
5.21 Future Business Dealings...........................................25
5.22 Intrusive Testing..................................................25
ARTICLE 6 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER........................25
6.1 Representations True and Covenants Performed at Closing............25
6.2 No Injunction, Etc.................................................26
6.3 No Material Damage to Xxxxxxxx Manufacturing Facility..............26
6.4 HSR Act Approval...................................................26
6.5 Alpine Stockholder Approval........................................26
6.6 Xxxx of Sale; Assignments; Etc.....................................26
6.7 Assignment of Non-Competition Rights...............................26
6.8 Assignment of Intellectual Property................................26
6.9 Irrevocable Proxy..................................................27
6.10 Assignment of Trademark License Agreement..........................27
6.11 Lien Releases......................................................27
6.12 Limited Warranty Deed and Quitclaim Deed...........................27
6.13 [Intentionally Omitted]............................................27
6.14 Certificate(s) of Occupancy, Etc...................................27
6.15 Section 1445 Affidavit.............................................27
6.16 Covenant Not To Compete............................................27
6.17 Transition Services Agreement......................................27
6.18 Secretary's Certificate............................................27
6.19 Consents...........................................................27
ARTICLE 7 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER.......................28
7.1 Representations True and Covenants Performed at Closing............28
7.2 No Injunction, Etc.................................................28
7.3 HSR Act Approval...................................................28
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7.4 Alpine Stockholder Approval........................................28
7.5 Payment of the Purchase Price......................................28
7.6 Assignment and Assumption Agreement................................28
7.7 Secretary's Certificate............................................29
7.8 Transition Services Agreement......................................29
7.9 Utility Letter of Credit...........................................29
7.10 Environmental Matters Insurance Policy.............................29
ARTICLE 8 SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND INDEMNIFICATION......29
8.1 Survival of Representations and Warranties.........................29
8.2 Obligation of Seller to Indemnify..................................30
8.3 Obligation of Buyer to Indemnify...................................30
8.4 Notice of Loss or Asserted Liability...............................31
8.5 Opportunity to Contest.............................................31
8.6 Limitations on Indemnification.....................................32
8.7 Subrogation Rights.................................................33
8.8 Post-Closing Maintenance of Cash, Etc..............................33
8.9 Indemnification Payments...........................................33
8.10 Exclusive Remedies.................................................33
ARTICLE 9 TERMINATION.........................................................33
9.1 Method of Termination..............................................33
9.2 Notice of Termination..............................................34
9.3 Effect of Termination..............................................35
9.4 Destruction, Damage or Condemnation................................35
ARTICLE 10 CERTAIN DEFINED TERMS..............................................36
ARTICLE 11 MISCELLANEOUS......................................................49
11.1 Notices............................................................49
11.2 Entire Agreement...................................................49
11.3 Modifications, Amendments and Waivers..............................50
11.4 Successors and Assigns.............................................50
11.5 Table of Contents; Captions; References............................50
11.6 Governing Law......................................................50
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11.7 Consent to Jurisdiction............................................50
11.8 Pronouns...........................................................51
11.9 Severability.......................................................51
11.10 Remedies Not Exclusive.............................................51
11.11 Counterparts.......................................................51
11.12 Interpretations....................................................51
11.13 No Intention to Benefit Third Parties..............................51
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SCHEDULES
Schedule AL - Assumed Liabilities
Schedule IPME - Idled Production Machinery and Equipment
Schedule 1.2 - Agreed Upon Procedures
Schedule 3.1 - Locations of Purchased Assets
Schedule 3.5 - Liens
Schedule 3.6 - Absence of Certain Changes
Schedule 3.7 - Taxes
Schedule 3.8 - Legal Description of Xxxxxxxx Real Property
Schedule 3.9 - Personal Property
Schedule 3.10 - Condition of Property
Schedule 3.11 - Intellectual Property
Schedule 3.12 - Indebtedness
Schedule 3.13 - Exceptions to Title to Inventory
Schedule 3.14 - Licenses
Schedule 3.15 - Environmental
Schedule 3.16(a) - Litigation
Schedule 3.16(b) - Government Investigation
Schedule 3.17(a) - Xxxxxxxx Employee Benefit Plans
Schedule 3.17(d) - Severance or Other Xxxxxxxx-Related Employment
Obligations
Schedule 3.18(a)(i) - Supply & Services Contracts
Schedule 3.18(a)(ii) - Sales Contracts
Schedule 3.18(a)(iii) - Distributor Contracts
Schedule 3.18(a)(iv) - Employment; Affiliate Contracts
Schedule 3.18(a)(v) - Leased Personal Property
Schedule 3.18(a)(vi) - Other Contracts
Schedule 3.18(b) - Assigned Rights
Schedule 3.18(c) - Consents to Avoid Default
Schedule 3.19 - Products, Services & Warranties
Schedule 3.20A - Large Suppliers
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Schedule 3.20B - Large Customers
Schedule 3.21 - Xxxxxxxx Employees
Schedule 3.23 - Compliance with Law
Schedule 5.2 - Pre-Closing Access, Etc.
Schedule 5.6 - Environmental Corrective Actions
Schedule 5.7 - Environmental Compliance Matters
Schedule 6.19 - Certain Contract Requiring Consent
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EXHIBITS
Exhibit A - Form of Seller's Bringdown Certificate
Exhibit B - Form of Xxxx of Sale
Exhibit C - Form of Assignment and Assumption Agreement
Exhibit D - Form of Assignment of Non-Competition Rights
Exhibit E-1 - Form of Trademark/Service xxxx Assignment (U.S.)
Exhibit E-2 - Form of Trademark Assignment (Canada)
Exhibit E-3 - Form of Domain Name Assignment (U.S.)
Exhibit F - Form of Irrevocable Proxy
Exhibit G - Form of Assignment of Trademark License Agreement
Exhibit H - Form of Limited Warranty Deed
Exhibit I - Form of Non-Competition Agreement
Exhibit J - Form of Transition Services Agreement
Exhibit K - Form of Seller's Secretary's Certificate
Exhibit L - Form of Buyer's Bringdown Certificate
Exhibit M - Form of Buyer's Secretary's Certificate
Exhibit N - Form of Environmental Matters Insurance Policy
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made this 30th day of September, 2005, by
and between ESSEX ELECTRIC INC., a Delaware corporation ("Seller"), and
SOUTHWIRE COMPANY, a Delaware corporation ("Buyer").
BACKGROUND
Seller is the owner of, and desires to sell to Buyer, and Buyer desires to
purchase from Seller, certain assets of Seller, upon the terms and subject to
the conditions set forth herein. Certain capitalized terms used in this
Agreement shall have the meanings assigned to them in Article 10 hereof.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements contained herein, and other good and
valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.1 Purchase of the Purchased Assets. Subject to the terms and conditions
of this Agreement, at the Closing, Seller shall sell, convey, transfer, assign
and deliver to Buyer, and Buyer shall purchase and accept from Seller, all of
the Purchased Assets, free and clear of any and all Liens, other than the
Permitted Liens.
1.2 Purchase Price. Subject to adjustment as hereinafter set forth, the
total "Purchase Price" for the Purchased Assets shall be equal to the sum of the
following:
(a) the Purchased Inventory Amount; plus
(b) the Prepaid Assets Amount; plus
(c) $26,950,000.00; less
(d) the Assumed Liability Amount.
The Purchased Inventory Amount to be paid at the Closing (the "Estimated
Purchased Inventory Amount") shall be determined in accordance with Schedule 1.2
(the "Agreed Upon Procedures") and shall be adjusted post-Closing in accordance
with Section 1.4. If, pursuant to the Agreed Upon Procedures, the Estimated
Purchased Inventory Amount is not at least equal to 95% of the value of Seller's
Inventory relating to the Business as then shown on Seller's books of account,
Seller shall have the option to terminate this Agreement pursuant to Section
9.1(b). Each of the Prepaid Assets Amount and the Assumed Liability Amount to be
paid at Closing (the "Estimated Prepaid Assets Amount" and the "Estimated
Assumed Liability Amount") shall be estimated by Seller and Buyer prior to the
Closing on the basis of the Agreed Upon Procedures and shall be adjusted
post-Closing in accordance with Section 1.4. The Estimated Purchased Inventory
Amount plus the Estimated Prepaid Assets Amount minus the Estimated Assumed
Liability Amount is referred to as the "Estimated Purchase Price Adjustment
Amount."
1.3 Payment of the Purchase Price. On the Closing Date, Buyer shall pay
the Purchase Price to Seller and Alpine as follows: (a) by a wire transfer of
the sum of (i) $26,950,000 plus (ii) the Estimated Purchase Price Adjustment
Amount, in immediately available funds, provided that, to the extent necessary
to obtain the release of any Lien (other than Permitted Liens) on the Purchased
Assets, a portion of such payment may be paid to the holder of such Lien to
secure its release and (b) by the assumption of the Assumed Liabilities. At
least two business days prior to the Closing Date, Seller and Alpine shall
deliver to Buyer wire transfer instructions and Buyer shall pay to Seller and
Alpine the Purchase Price as so directed.
1.4 Adjustment of Purchase Price.
(a) Within 45 days following the Closing, Buyer shall determine in
good faith each of (i) the Purchased Inventory Amount, (ii) the Prepaid Assets
Amount and (iii) the Assumed Liability Amount as of the Closing Date (the sum of
(i) and (ii) minus (iii) being referred to as the "Closing Date Purchase Price
Adjustment Amount"), in each case based solely upon the Agreed Upon Procedures.
Such determination shall be delivered to Seller for review and approval.
(b) If Seller in good faith disagrees with Buyer's determination of
the Closing Date Purchase Price Adjustment Amount, Seller may deliver to Buyer,
within 30 days after the delivery to Seller of Buyer's determination of the
Closing Date Purchase Price Adjustment Amount (the "Seller Review Period"), a
notice (the "Objection Notice") setting forth in reasonable detail the items or
amounts with which Seller disagrees. Seller shall be deemed to have agreed with
all items and amounts contained in Buyer's determination of the Closing Date
Purchase Price Adjustment Amount not included in the Objection Notice. If Seller
does not deliver an Objection Notice within the Seller Review Period, then
Seller shall be deemed to agree in all respects with Buyer's determination of
Closing Date Purchase Price Adjustment Amount and Buyer's determination shall be
final and binding upon Seller and Buyer.
(c) If an Objection Notice is properly and timely delivered, then
Seller and Buyer shall negotiate in good faith with each other to resolve the
disputed items or amounts set forth in the Objection Notice, in each case based
solely upon the Agreed Upon Procedures. If the parties are unable to resolve the
disputed items or amounts set forth in the Objection Notice within 30 days after
Seller's delivery of the Objection Notice to Buyer, then the parties shall cause
the Birmingham, Alabama office of KPMG LLP (or, if it is unable or unwilling to
serve, a firm of independent accountants of nationally recognized standing
reasonably satisfactory to Seller and Buyer (which shall not have any material
relationship with Seller or Buyer or any of their respective Affiliates) (KPMG
or such other firm is hereinafter referred to as the "Independent Accounting
Firm")) to review promptly this Agreement, the Agreed Upon Procedures and the
disputed items or amounts for the purpose of calculating the Closing Date
Purchase Price Adjustment Amount. In making such calculation, the Independent
Accounting Firm shall consider only those items or amounts in Buyer's
determination of the Closing Date Purchase Price Adjustment Amount as to which
Seller has, in the Objection Notice, disagreed and such other issues as may
reasonably be affected by the items as to which Seller has so disagreed. The
Independent Accounting Firm shall deliver to Seller and Buyer, as promptly as
practicable, but no later than 30 days after the Independent Accounting Firm is
so engaged, a written report setting forth its calculation of the disputed items
or amounts and the Closing Date Purchase Price Adjustment Amount. Upon such
delivery, such report and the calculations set forth therein shall be final and
binding upon Seller and Buyer. The cost of such review and report shall be
shared equally by Seller and Buyer.
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(d) Each party will furnish to the Independent Accounting Firm such
work papers and other documents and information relating to the disputed items
and amounts as the Independent Accounting Firm may reasonably request and are
available to that party (or its independent public accountants), and will be
afforded the opportunity to present to the Independent Accounting Firm any
material relating to the determination of the Closing Date Purchase Price
Adjustment Amount consistent with the Agreed Upon Procedures and to discuss the
determination with the Independent Accounting Firm.
(e) Within three business days after the calculation of Closing Date
Purchase Price Adjustment Amount becomes final pursuant to Section 1.4(b) or
Section 1.4(c), as applicable, (i) Buyer shall pay to Seller, by wire transfer
of immediately available funds to an account designated by Seller, an amount
equal to the amount, if any, by which the final Closing Date Purchase Price
Adjustment Amount exceeds the Estimated Closing Date Purchase Price Adjustment
Amount, together with interest thereon at the Prime Rate from and including the
Closing Date to but excluding the date of such payment, or (ii) Seller shall pay
to Buyer, by wire transfer of immediately available funds to an account
designated by Buyer, an amount equal to the amount, if any, by which the
Estimated Purchase Price Adjustment Amount exceeds the final Closing Date
Purchase Price Adjustment Amount, together with interest thereon at the Prime
Rate from and including the Closing Date to but excluding the date of such
payment. Any interest payable shall be calculated on the basis of a 360-day year
consisting of twelve 30-day months.
1.5 Prorations and Certain Payments. To the extent not included in the
Assumed Liabilities, the following prorations relating to the Purchased Assets
shall be made as of the Closing Date, with Seller liable to the extent such
items relate to any time period prior to the Closing and Buyer liable to the
extent such items relate to periods on or after the Closing:
(i) personal property, real estate, occupancy and other similar
Taxes, if any, on or with respect to the Purchased Assets;
(ii) utilities (including water, sewer, telephone, electricity and
fuel);
(iii) all other appropriately proratable items that shall be paid by
Buyer or which otherwise affect the Business or the Purchased Assets and
that relate, in whole or in part, to periods prior to the Closing Date.
The net amount of all such prorations shall be settled and paid on the Closing
Date upon consultation and the reasonable mutual agreement of Seller and Buyer
and, to extent relevant thereto, the Agreed Upon Procedures. In the event that
the amount of any of the items to be prorated pursuant to this Section 1.5 is
not known by Seller and Buyer at the Closing, the proration shall be made based
upon the amount of the most recent cost of such item to Seller. After Closing,
Buyer and Seller each shall provide to the other, within five business days
after receipt, each Third Party invoice relating to any item so estimated.
Within ten business days thereafter, Buyer and Seller each shall make any
payments to the other that are necessary to compensate for any difference
between the proration made at the Closing and the correct proration based on the
Third Party invoice. Notwithstanding anything herein to the contrary, if Seller
and Buyer cannot agree upon the prorations to be made under this Section 1.5,
Seller and Buyer agree to use the dispute resolution mechanism in Section 1.4
hereof, including, if necessary, hiring the Independent Accounting Firm to
settle conclusively any such dispute.
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1.6 Closing. Unless the parties have otherwise agreed in writing, the
Closing shall take place on the third business day after the date on which the
last of the conditions in Article 6 and Article 7 have been satisfied, at the
offices of Xxxxxxxxxx, Xxxxxx & Xxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx
0000, Xxxxxxx, Xxxxxxx 00000. Title to the Purchased Assets shall pass from
Seller to Buyer upon the occurrence of the Closing, unless the parties shall
otherwise have agreed in writing.
1.7 Deliveries. All deliveries, payments and other transactions and
documents relating to the Closing (a) shall be interdependent and none shall be
deemed effective unless and until all are effective (except to the extent that
the party entitled to the benefit thereof has waived satisfaction or performance
thereof as a condition precedent to Closing) and (b) shall be deemed to be
consummated simultaneously.
1.8 Sale of Idled Production Machinery and Equipment. Notwithstanding
anything to the contrary in this Agreement, the sale of the Idled Production
Machinery and Equipment, if any, included in the Purchased Assets shall be on an
"AS IS, WHERE IS" BASIS.
1.9 Allocation of Purchase Price. At the Closing, Buyer and Seller shall
use commercially reasonable efforts to agree upon an allocation of the total
Purchase Price payable for the Purchased Assets; provided, however, that such
allocation shall be adjusted in respect of the amounts attributable to the
Purchased Inventory and the Prepaid Assets promptly upon the final determination
thereof in accordance with Sections 1.2 and 1.4 on a dollar-for-dollar basis.
Such allocation shall be made in accordance with Section 1060 of the Code and
Treas. Reg. ss. 1.338-6 and shall include a reasonable amount being allocated to
covenants not to compete from Seller, Alpine, Alpine Holdco Inc. and Xxxxxx X.
Xxxxxx. The parties agree to be bound by such allocation and to report the
transaction contemplated herein for federal, state and local income Tax purposes
in accordance with such allocation. No payment to any Person under Section 1.3
shall have any effect on the allocation pursuant to this Section 1.9.
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ARTICLE 2
ASSUMPTION OF LIABILITIES
2.1 Assumption of Assumed Liabilities. Buyer agrees, effective on the
Closing Date, to assume the Assumed Liabilities and thereafter to pay, perform
and discharge such Assumed Liabilities in full, in accordance with their terms;
provided, however that Buyer may in good faith contest or cause to be contested
the amount or validity thereof, and Seller agrees to provide, at Buyer's sole
expense, reasonable assistance to Buyer in so contesting such claims; and
provided, further, that, except as contemplated by the Transition Services
Agreement (as hereinafter defined), Seller's obligation to provide such
assistance shall be limited to the extent Seller has the requisite information
or personnel to then assist Buyer.
2.2 Assignment of Certain Contracts.
(a) Prior to the Closing, Seller shall use its commercially
reasonable efforts to obtain all consents necessary to effect the assignment of
the Contract that is listed on Schedule 6.19. Buyer agrees to provide reasonable
assistance to Seller in connection with obtaining any such consent, including
completion of credit applications and the disclosure of any financial and
creditworthiness information. To the extent any such consent has not been
obtained prior to Closing, then Seller shall continue its commercially
reasonable efforts to obtain such consent(s) after the Closing and Seller shall
take such action as shall be reasonably necessary (i) to afford Buyer the rights
and obligations of Seller under such Contract and (ii) if applicable, to
facilitate the collection of the monies due and payable, or to become due and
payable, to Seller pursuant to such Contract, and Seller shall remit such monies
to Buyer within five business days of actual collection.
(b) Buyer, at its expense, shall perform all of Seller's obligations
due to be performed under any Contract as to which consent to assignment is not
obtained and that is included in the Assumed Liabilities to the extent (i) Buyer
can perform such obligations without violating the terms of such Contract (other
than the non-assignability provisions thereof) and (ii) Buyer is being provided
the benefits of such Contract.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF SELLER
Seller hereby represents and warrants to Buyer that:
3.1 Organization and Qualification. Seller is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware, with the requisite corporate power and authority to carry on its
business and to own, lease and operate its assets as presently conducted by
Seller. Seller is duly qualified or licensed to transact business as a foreign
corporation in good standing in the State of Alabama. Schedule 3.1 contains the
address (including city, state or other jurisdiction and zip code) of each
location where any of the Purchased Assets are located and each trade name under
which Seller operates at each such address.
3.2 Authority and Binding Effect. Seller has the requisite corporate power
and authority necessary to enter into and perform its obligations under this
Agreement and the Other Agreements and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance of this
Agreement and the Other Agreements have been duly approved by all necessary
corporate action on the part of Seller, except for the approval of this
Agreement and the Other Agreements by the shareholders of Alpine. This Agreement
has been, and the Other Agreements will be, duly executed and delivered by
properly authorized officers of Seller and each constitutes, or when executed
and delivered will constitute, the legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting creditors' rights generally, or by the availability of
equitable remedies.
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3.3 Validity of Contemplated Transactions; Governmental Authorizations.
(a) Validity. The execution, delivery and performance of this
Agreement and the Other Agreements by Seller, and the consummation of the
transactions contemplated hereby or thereby, do not and will not (i) violate any
provision of the charter documents or Bylaws of Seller, or of any Law (subject
to Section 7.4 hereof) or Order relating to Seller, (ii) except as disclosed on
Schedule 3.18(c), result in a Default under any Contract of Seller (other than,
to the extent such Default arises solely because a consent is required to effect
the assignment thereof, the Ordinary Contracts Requiring Consent), or (iii)
result in the creation or imposition of any Lien on the Purchased Assets (other
than Permitted Liens).
(b) Government Authorizations. Except for the filing under the HSR
Act contemplated by Section 5.17 hereof, notices contemplated by Section 5.9
hereof and the filing of the definitive proxy materials contemplated by Section
5.16 hereof, no notification, consent, authorization, order, review or approval
of, or filing or registration with, any Governmental Authority is required for
or in connection with the execution and delivery of this Agreement or any of the
Other Agreements by Seller or the consummation by Seller of the transactions
contemplated hereby and thereby.
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3.4 Subsidiaries; Joint Ventures. No shares or any ownership or other
investment interest, either of record, beneficially or equitably, in any Person
are included in the Purchased Assets.
3.5 Title to Purchased Assets; No Liens. Except as disclosed on Schedule
3.5 or in Section 3.8 with respect to Real Property, and except for Permitted
Liens, Seller has good, valid and marketable title to all of the Purchased
Assets free and clear of any and all Liens.
3.6 Absence of Certain Changes. Except (i) with respect to Excluded
Assets, (ii) as disclosed on Schedule 3.6 and (iii) for Seller's recent
cost-cutting, staff reduction, plant closings, termination notices to agents and
distributors and similar actions (collectively, the "Restructuring Actions"),
since December 31, 2004, there has not been any act or omission with respect to
the Business (excluding for the purposes of this Section 3.6, any change or
decline attributable to or arising from (A) the financial condition or results
of operations of the Business as conducted by Seller, (B) the level of business
or patronage of customers of the Business, (C) a decline or change in general
economic or business conditions, (D) a decline or change in general industry
conditions or (E) the announcement or consummation of the transactions
contemplated by this Agreement) other than in the ordinary course of business.
Without limiting the generality of the foregoing, except as disclosed on
Schedule 3.6, there has not been:
(a) any change or decline in the Business or the Purchased Assets,
whether or not covered by insurance, that has had, or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect
upon the Business or the Purchased Assets (other than the Inventory);
(b) [Intentionally Omitted];
(c) any change in any method of accounting or accounting practice
used by Seller with respect to its Inventory or any Material change in Seller's
manner of conducting the Business conducted at and from the Xxxxxxxx
Manufacturing Facility;
(d) any payment of any Material obligation of the Business otherwise
than when it has become due or any acceleration or deferral of any item;
(e) any entering into of a Contract with respect to the Business
unless such Contract was entered into in the ordinary course of business in
accordance with Seller's past practice;
(f) any sale, lease or other conveyance of all or any portion of (or
any interest in) any of Seller's property used in the Business (other than
dispositions in the ordinary course of business or in connection with the
Restructuring Actions and of Excluded Assets);
(g) any settlement of any dispute with respect to the Business
involving more than $100,000;
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(h) any increase or other Material change in the amount or timing of
wages, salaries, benefits or other compensation of any Xxxxxxxx Employee (except
for customary increases based on term of service or promotion of non-salaried
Xxxxxxxx Employees); or
(i) any Contract to do any of the foregoing or any Contract entered
into by Seller with respect to the Business not in the ordinary course of
business.
3.7 Taxes. Except for Taxes of the type included in the definition of
Assumed Liabilities, Seller has no liability with respect to Taxes that would
affect in any way whatsoever Buyer's right, title, and interest in or Buyer's
right to use or enjoy (free and clear of any Lien other than Permitted Liens)
any Purchased Asset. Except as set forth on Schedule 3.7, Seller has no special
Tax status granted by any Governmental Authority or Law as to any Purchased
Asset. No audit, action, proceeding, claim or, to Seller's knowledge,
investigation is pending with respect to any Taxes payable by or asserted in
writing against Seller relating to any Purchased Asset. Except as set forth on
Schedule 3.7, Seller has not received notice in writing from any Taxing
authority of its intent to examine or audit any of its property Tax Returns or
other filings relating to any Purchased Asset. No Material claim has been made
in writing against Seller relating to any Purchased Asset or the Business by any
Governmental Authority in any jurisdiction in which Seller did not file sales,
use, value-added or similar Tax Returns or other required filings or did not pay
any such Taxes, that Seller is or could reasonably be subject to any such Tax by
that jurisdiction.
3.8 Xxxxxxxx Real Property.
(a) Schedule 3.8 contains a correct and complete description of all
of the land comprising the Xxxxxxxx Real Property. Seller has good, valid and
marketable title to the Xxxxxxxx Real Property subject only to (i) that certain
mortgage securing the amount of $100,000,000.00 from Seller to Foothill Capital
Corporation, as Agent, recorded in Real Property Book 2002, Page 75198 in the
office of the Judge of Probate of Lauderdale County, Alabama, which shall be
discharged by Seller on or prior to the Closing Date in accordance with the
provisions of Section 5.19(b) and (ii) the following title exceptions (the
"Permitted Title Exceptions"): (i) state and county ad valorem taxes for the
year 2005 and subsequent years, (ii) the state of facts shown on that certain
survey of Xxxxx X. Xxxxxx, Registered Land Surveyor, dated July 27, 2005, (iii)
any easements, rights of way or irregularities of title that do not Materially
and adversely affect the value or present use of the Xxxxxxxx Real Property,
including, without limitation, any easement, license and/or right created in
favor of any public utility company providing electric, steam, gas, telephone,
water, sewer, cable or other utility service to the Xxxxxxxx Real Property to
install, use, maintain, repair and replace wiring, cables, terminal boxes,
lines, service connections, poles, mains, facilities and the like upon, under
and across the Xxxxxxxx Real Property, (iv) all present and future zoning,
environmental, municipal, building and all other Laws and similar matters and
restrictions imposed by any Governmental Authority or similar body or agency
having jurisdiction over the Xxxxxxxx Real Property, or any portion thereof, (v)
any variation between Tax lots, Tax diagrams and/or Tax maps and the record
descriptions, and (vi) any other exception to title accepted or deemed accepted
by Buyer pursuant to Section 5.19 hereof.
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(b) As of the date hereof, Seller has not received any written
notice from any Governmental Authority with regard to violations of building
codes, zoning, subdivision or other similar Laws.
(c) As of the Closing Date, there will be no leases, sales
contracts, or option agreements affecting the Xxxxxxxx Real Property or any part
thereof, and there will be no Persons in possession of the Xxxxxxxx Real
Property or any part thereof other than Seller.
(d) As of the date hereof, Seller has not received any written
notice from any Governmental Authority of any Order for the sale, condemnation,
expropriation or taking (by eminent domain or otherwise) of the Xxxxxxxx Real
Property by any Governmental Authority, nor has any such sale, condemnation,
expropriation or taking been, to Seller's knowledge, proposed or threatened.
(e) As of the date hereof, Seller has not received any written
notice from any Governmental Authority of any special assessments or community
improvement district assessments that have been levied against the Xxxxxxxx Real
Property or any proceeding pending as of the date hereof for an increase in the
assessed valuation of the Xxxxxxxx Real Property.
3.9 Personal Property. Schedule 3.9 is a complete list of each item of
Personal Property relating to the Business (other than the Excluded Assets) as
of the date hereof, except for individual items having a book value of less than
$5,000.
3.10 Condition of Property. As of the date hereof, except as disclosed on
Schedule 3.10, to Seller's knowledge (excluding for the purposes of this Section
3.10, any obligation on Seller to undertake any inquiry or inspection as to the
physical condition of the Xxxxxxxx Real Property or any improvements thereon in
connection with the representation made hereunder; and Buyer acknowledges that
Seller has not made any specific investigation as to the condition of the
improvements) (a) the foundation, exterior walls and roofs of any of the
improvements constructed on the Xxxxxxxx Real Property are structurally sound
and in good repair, normal wear and tear excepted and (b) each item of Personal
Property included in the Purchased Assets (other than the Idled Production
Machinery and Equipment) is in good repair and operating condition, normal wear
and tear excepted. Except as specifically set forth in this Section, Seller does
not make any implied warranty that any item of tangible property included in the
Purchased Assets is fit for a particular purpose or is merchantable.
3.11 Intellectual Property.
(a) Schedule 3.11 contains a correct and complete list of all
Material Intellectual Property related to the Business, both owned by Seller
("Seller's Intellectual Property") and licensed by Seller from Third Parties
("Licensed Intellectual Property") (other than computer software that is
generally available to the public). All Licenses included in the Licensed
Intellectual Property are in full force and effect, are not in Default, and
constitute legal, valid and binding obligations of the respective parties
thereto. To Seller's knowledge, (i) Seller has not violated, infringed upon or
unlawfully or wrongfully used the Intellectual Property of others and (ii) none
of Seller's Intellectual Property related to the Business infringes upon or
otherwise violates the rights of others. Seller has all right, title and
interest in the Intellectual Property identified as Seller's Intellectual
Property on Schedule 3.11 sufficient to transfer title to Buyer. The
consummation of the transactions contemplated by this Agreement will not alter
or impair any of Seller's rights to Seller's Intellectual Property or result in
a Default under any Contract of Seller relating to any Licensed Intellectual
Property. Except as set forth in Schedule 3.11, Seller is not obligated, nor has
Seller incurred any Liability, to make any payments for royalties, fees or
otherwise to any Person in connection with any of Seller's Intellectual Property
related to the Business. All patents, trademarks, trade names, service marks,
assumed names, and copyrights and all registrations thereof included in or
related to Seller's Intellectual Property related to the Business are validly
issued, subsisting and in full force and effect.
9
(b) No Affiliate of Seller and no present or former officer,
director, partner or employee of Seller or of any Affiliate of Seller owns or
has any proprietary, financial or other interest, direct or indirect, in any of
Seller's Intellectual Property identified on Schedule 3.11.
3.12 Indebtedness. Schedule 3.12 lists each promissory note, instrument or
other document or Contract (collectively, "Debt Instruments") that (a) relates
to (i) any indebtedness for borrowed money (excluding trade payables and accrued
payables and Taxes) of Seller or (ii) any capital lease, lease-purchase
arrangement, guaranty (except endorsements made in the ordinary course of
business in connection with the deposit of items for collection) by Seller
relating to the Purchased Assets (the terms listed in (i) and (ii) being
collectively, "Indebtedness"), and (b) is either (i) included in the Assumed
Liabilities or (ii) imposes, or could reasonably be expected to impose, a Lien
with respect to any Purchased Asset or any aspect of the Business, other than
those related solely to the Excluded Assets.
3.13 Inventory. All Inventory which Seller does not manufacture has been
or will be acquired by Seller only in bona fide transactions entered into in the
ordinary course of Business. Except as disclosed on Schedule 3.13, Seller has
now and on the Closing Date will have valid legal title to its Inventory free
and clear of any consignments or Liens, other than Liens to be removed prior to
Closing. Seller is not under any Liability with respect to the return of
Inventory in the possession of wholesalers, retailers or other customers.
3.14 Licenses. As of the date hereof, Schedule 3.14 is a complete list of
Licenses necessary for the ownership by Seller of the Purchased Assets and the
conduct of the Business (other than Licenses relating to the Excluded Assets);
provided, however, that the foregoing does not require disclosure of state and
local business or similar Licenses required of businesses generally. Seller has
delivered to Buyer a complete copy of each such License. Seller is not in
Default under any such License other than any Default that would not reasonably
be expected to have a Material Adverse Effect on the Business. Seller has not
received written notice from any Governmental Authority with respect to the
revocation, termination, suspension or limitation of any such License, and
Seller has no knowledge of the proposed or threatened issuance of any such
notice.
3.15 Environmental. This Section 3.15 is the exclusive provision in this
Agreement containing representations and warranties applicable to Environmental
Matters. Except as set forth in Schedule 3.15:
10
(a) There are no Environmental Claims pending or, to Seller's
knowledge, threatened with respect to the ownership, use, condition or operation
of the Business or the Purchased Assets. There are no existing Material
violations of (i) any Environmental Law, or (ii) any Order related to
Environmental Matters, with respect to the ownership, use, condition or
operation of the Business or the Purchased Assets that remain outstanding or
unresolved. To Seller's knowledge, there are no past or present actions,
activities, circumstances, conditions, events or incidents with respect to the
ownership, use, condition or operation of the Business or the Purchased Assets,
including, without limitation, any Environmental Matter, that could reasonably
be likely to form the basis of (i) any Environmental Claim or Order against
Seller, or (ii) any Litigation against any Person whose Liability (or any
portion thereof) for Environmental Matters or violation of Environmental Laws
Seller has retained or assumed, contractually or by operation of law. Neither
Seller nor, to Seller's knowledge, any other Person has used any of the Xxxxxxxx
Real Property for the handling, treatment, storage, or disposal of any Hazardous
Substances in violation of any applicable Environmental Law.
(b) No release, discharge, spillage or disposal of any Hazardous
Substances is occurring or, to Seller's knowledge, has occurred at or from the
Xxxxxxxx Real Property or any part thereof in violation of applicable
Environmental Law.
(c) All waste containing any Hazardous Substances generated, used,
handled, stored, treated or disposed of (directly or indirectly) by Seller at
the Xxxxxxxx Real Property has been released or disposed of in Material
compliance with all applicable reporting requirements under any Environmental
Laws and Seller is not aware of any Environmental Claim against Seller that
remains outstanding or unresolved with respect to any such release or disposal.
(d) All underground tanks and other underground storage facilities
presently or previously located at the Xxxxxxxx Real Property are listed,
together with the capacity and contents of each such tank or facility, in
Schedule 3.15. To Seller's knowledge, none of such underground tanks or
facilities is leaking or has ever leaked and all such tanks comply in all
Material respects with all applicable Environmental Laws.
(e) Seller has complied, in all Material respects, with all
applicable reporting requirements under all applicable Environmental Laws
concerning the disposal or release of Hazardous Substances, except for such
non-compliance as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, and Seller has not made any such
reports concerning the Xxxxxxxx Real Property that remain outstanding or
unresolved.
(f) To Seller's knowledge, no building or other improvement on the
Xxxxxxxx Real Property contains any friable asbestos-containing materials or
lead-based paint.
(g) Without limiting the generality of any of the foregoing, (i) all
on-site and off-site locations where Seller has stored, disposed or arranged for
the disposal of Hazardous Substances, since December 2002, in connection with
the ownership, use or operation of the Xxxxxxxx Real Property are identified in
Schedule 3.15 and (ii) to Seller's knowledge, no polychlorinated biphenyls
(PCBs) in amounts or concentrations regulated under applicable Environmental Law
are used or stored on or in the Xxxxxxxx Real Property.
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(h) Seller has provided to Buyer copies of all Material
environmental audits, reports, assessments, investigations, sampling and
analyses within its possession or custody with respect to the Xxxxxxxx Real
Property.
3.16 Litigation. Except as disclosed on Schedule 3.16(a) there is no
Litigation pending, or to the knowledge of Seller, threatened, against Seller
and related to the Business (other than the Excluded Assets) or the Purchased
Assets. Except as disclosed on Schedule 3.16(b) there has not been since
December 11, 2002, and there is not now pending or, to the knowledge of Seller,
threatened, any investigation or inquiry regarding the Business or the Purchased
Assets by any Governmental Authority.
3.17 Employee Benefit Plans.
(a) Schedule 3.17(a) is a correct and complete list of all Employee
Benefit Plans that cover any Xxxxxxxx Employees. Except as disclosed on Schedule
3.17(a), no such Employee Benefit Plan is or has been (i) a multiemployer plan
within the meaning of ERISA Section 3(37); (ii) a multiple employer plan with
the meaning of ERISA Section 210(a) or Code Section 413(c); (iii) a multiple
employer welfare arrangement within the meaning of ERISA Section 3(40); or (iv)
a "defined benefit plan" as defined in ERISA Section 3(35) and subject to ERISA
Title I, Subtitle B, Part 3 or Title IV.
(b) Neither Seller nor any ERISA Affiliate has any Liability under,
or is subject to any Lien relating to, any Employee Benefit Plan that would (i)
affect in any manner whatsoever Buyer's right, title and interest in, or Buyer's
right to use or enjoy (free and clear of any Lien) any of the Purchased Assets
or (ii) result in the assumption by or imposition on Buyer or any Affiliate of
Buyer of any Liability other than Liabilities expressly included as Assumed
Liabilities.
(c) Except as required by Code Section 4908B and ERISA Title I, Part
6, no Employee Benefit Plan that covers any Xxxxxxxx Employee provides for
welfare benefits to employees after retirement or other separation of service.
(d) Except (i) as disclosed on Schedule 3.17(d), (ii) as otherwise
provided in Section 5.10 or (iii) for any obligations that will not be assumed
by the Buyer pursuant to this Agreement and the transactions contemplated
hereby, the consummation of the transactions contemplated by this Agreement will
not (A) entitle any current or former employee, director, officer, leased
employee, independent contractor or agent of Seller to severance pay,
unemployment compensation or any payment contingent upon a change in control or
ownership of Seller, (B) accelerate the time of payment or vesting or increase
the amount of any compensation due to any such employee or former employee,
director, officer, leased employee, independent contractor or agent or (C) cause
Buyer or any Affiliate to be liable for any sums or obligations under or
pursuant to any Employee Benefit Plan of Seller.
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3.18 Contracts.
(a) Description.
(i) Supply & Services Contracts. Schedule 3.18(a)(i) is a
complete list of all outstanding Contracts as of September 9, 2005
which relate to the acquisition of goods or services used in the
Business other than Contracts (A) pursuant to which Seller is
obligated to pay less than $25,000 per year, (B) which are
terminable by Seller with no obligation in excess of $25,000 on
Seller's part or (c) related solely to the Excluded Assets.
(ii) Sales. Schedule 3.18(a)(ii) is a complete list of all
Contracts as of September 9, 2005 for the sale of products or the
performance of services by Seller that relate to the Business and
which exceed $50,000 each. Schedule 3.18(a)(ii) also lists each
Contract containing pricing commitments beyond October 31, 2005 that
Seller is obligated by such Contract to provide to customers of the
Business (other than such Contracts that are Excluded Assets).
Except as disclosed on Schedule 3.18(a)(ii), sales Contracts for
finished goods related to the Business that extend beyond December
31, 2005 are at prices in excess of the prices used in valuing
Inventory items or of estimated costs of manufacture or purchase, as
the case may be, after allowing for reasonable selling expenses and
production overhead.
(iii) Distributor Contracts. Schedule 3.18(a)(iii) is a
complete list of all Distributor Contracts as of August 31, 2005.
(iv) Employment; Affiliate Contracts. Schedule 3.18(a)(iv) is
a complete list of all Contracts (including employment,
non-competition and loan agreements) with (A) any employee or
consultant that relate to the Business and (B) any Affiliate of
Seller that relate to the Business, except, in each case, Contracts
that are Excluded Assets.
(v) Leased Personal Property. Schedule 3.18(a)(v) is a
complete list of all Contracts as of August 31, 2005 affecting or
relating to Personal Property (other than related solely to Excluded
Assets) leased by Seller and relating to the Business, other than
Contracts which either (A) are terminable by a Seller upon no more
than 60 days notice without any Liability to Seller, or (B) do not
involve the payment by Seller of more than $20,000 per year.
(vi) Other Contracts. Schedule 3.18(a)(vi) is a complete list
of any other Contract of Seller as of August 31, 2005 that relates
to the Business (other than Contracts that relate solely to the
Excluded Assets) which is not terminable by Seller without penalty
upon 60 days or less notice, and which: (A) provides for monthly
payments by or to Seller in excess of $2,500 or (B) provides for
payments by or to Seller in any calendar year exceeding $30,000.
(vii) Copies. Seller has delivered to Buyer a complete copy of
each written Contract referred to or described in this Section
3.18(a).
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(b) No Default. As of the date hereof, to the knowledge of Seller,
there is no existing Default of Seller or any Third Party under any Contract
referred to or described in Section 3.18(a) (other than Contracts that relate
solely to the Excluded Assets). Except as set forth on Schedule 3.18(b), no
rights of Seller under any such Contract have been assigned or otherwise
transferred as security for any obligation of Seller.
(c) Consents. Schedule 3.18(c) identifies each Contract listed on
Schedules 3.18(a)(i) through 3.18(a)(vi) that requires the consent of or notice
to the other party thereto to avoid any Default under such Contract in
connection with the transactions contemplated hereby (other than the Ordinary
Contracts Requiring Consent), including the assignment of such Contract to
Buyer.
3.19 Products, Services & Warranties. Except as disclosed on Schedule
3.19: (a) Seller has maintained in all Material respects accurate sales records,
order backlog and other information with respect to all products and services of
the Business; and (b) each of Seller's products and services of the Business
comply with Law in all Material respects and each warranty, guaranty or claim
made by Seller or implied by Law in all Material respects. As of the date
hereof, Schedule 3.19 lists: (i) each warranty, guaranty or claim made by Seller
as to its products or services of the Business (other than those related to the
Excluded Assets or those implied by Law); and (ii) all product liability claims
made since December 31, 2002 (other than those that were resolved in the
ordinary course of business without Litigation) and amounts paid with respect to
them.
3.20 Suppliers and Customers. Schedule 3.20A sets forth each supplier of
the Business (other than suppliers to the businesses of Seller not related to
the Business) to whom payments were made which equaled or exceeded 5% of
Seller's cost of services or cost of goods sold for Seller's most recent fiscal
year ended (the "Large Suppliers") and the percentage of Seller's cost of
services or goods sold allocable to each Large Supplier for such fiscal year.
Schedule 3.20B sets forth a list of the 20 largest customers (determined by
gross sales revenue) of the Business from whom payments were received for
Seller's most recent fiscal year ended (the "Large Customers") and the
percentage of Seller's gross sales allocable to each of such Large Customers for
such fiscal year. Except as reflected in Schedule 3.20A, as of the date hereof,
no supplier is a sole source of supply of any good or service to Seller in
connection with the Business. Except as set forth on Schedule 3.20A, as of the
date hereof, no such Large Supplier has terminated, or to Seller's knowledge
threatened to terminate, its relationship with Seller. Except as set forth on
Schedule 3.20B, as of the date hereof, no such Large Customer has terminated, or
to Seller's knowledge threatened to terminate, its relationship with Seller.
Except as set forth on Schedule 3.20B, as of the date hereof, no Large Customer
receives or is entitled to receive, upon the attainment of specified sales
volumes or otherwise, and no Large Customer has been offered the opportunity to
receive, an incentive, discount, refund, rebate, incentive allowance, earned
cost savings, credit (whether for products or for cash) or other price allowance
of any kind, individually or in the aggregate with respect to any Large
Customer, in excess of 3% on an annual basis.
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3.21 Employee Matters.
(a) Schedule 3.21 lists as to each Xxxxxxxx Employee employed as of
the date hereof: (i) name, (ii) current compensation (wage and/or salary) (iii)
accrued but unused vacation, sick leave or other paid time off ("Accrued PTO"),
(iv) the amount of any bonus, incentive compensation or similar amounts paid
with respect to services rendered in 2004, (v) employment date and (vi) current
job title. Except as disclosed on Schedule 3.17(d), the employment of all
Xxxxxxxx Employees is terminable at will without any penalty or severance
obligation.
(b) Seller is not a party to any union agreement or collective
bargaining agreement applicable to any Xxxxxxxx Employee and there are no work
rules or practices agreed to between Seller and with any labor organization or
employee association applicable to any Xxxxxxxx Employees and no attempt to
organize any of the Xxxxxxxx Employees has been made, proposed or, to Seller's
knowledge, threatened. No labor strike, dispute, slowdown, stoppage or lockout
is pending or threatened against or affecting the Purchased Assets or the
Business and since December 11, 2002 there has not been any such action. No
unfair labor practice charge or complaint against Seller and involving any
current or former Xxxxxxxx Employee is pending as of the date hereof, or, to
Seller's knowledge, threatened before the National Labor Relations Board or any
similar Governmental Authority.
3.22 Brokers and Finders. No finder or any agent, broker or other Person
acting pursuant to authority of Seller is entitled to any commission or finder's
fee in connection with the transactions contemplated by this Agreement.
3.23 Compliance with Law. Except as disclosed on Schedule 3.23: (a) Seller
is in compliance in all Material respects with all Laws applicable to or binding
on the Business (except that Seller makes no representation in this Section 3.23
with respect to those Laws which are the subject of Section 3.7, 3.8(b), 3.15 or
3.17) and (b) Seller has not received written notice of a violation of any Law
which would have a Material Adverse Effect on the Purchased Assets or the
Business.
3.24 Statements True and Correct. No representation or warranty made by
Seller in this Article 3 intentionally omits to state a Material fact with the
purpose of making any such statement contained therein misleading.
3.25 Patronage. Notwithstanding anything to the contrary expressed herein,
no representation or warranty of Seller with respect to the Business or the
Purchased Assets shall be deemed or construed to constitute any representation
or warranty by Seller as to the level of business or patronage of customers that
Buyer will or may enjoy following the Closing from Buyer's operation of the
Purchased Assets or from the conduct by Buyer following the Closing of a
business like or similar to the Business.
15
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller that:
4.1 Organization, Standing and Foreign Qualification. Buyer is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware, with the requisite corporate power and authority
to carry on its business and to own, lease and operate its assets.
4.2 Authority and Binding Effect. Buyer has the requisite corporate power
and authority necessary to enter into and perform its obligations under this
Agreement and the Other Agreements and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance of this
Agreement and the Other Agreements have been duly approved by all necessary
action of the board of directors of Buyer. This Agreement has been, and the
Other Agreements will be, duly executed and delivered by properly authorized
officers of Buyer and each constitutes, or when executed and delivered will
constitute, the legal, valid and binding obligation of Buyer, enforceable
against Buyer in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally, or by the availability of equitable
remedies.
4.3 Validity of Contemplated Transactions, Restrictions.
(a) Validity. The execution, delivery and performance of this
Agreement and the Other Agreements by Buyer, and the consummation of the
transactions contemplated hereby or thereby, do not and will not (i) violate any
provision of the charter documents or Bylaws of Buyer, or of any Law or Order
relating to Buyer, (ii) result in a Default under, or require the consent or
approval of any party to, any Contract of Buyer, or (iii) result in the creation
or imposition of any Lien on Buyer's assets.
(b) Government Authorizations. Except for the filing under the HSR
Act contemplated by Section 5.17 hereof and notices contemplated by Section 5.9
hereof, no notification, consent, authorization, order, review or approval of,
or filing or registration with, any Governmental Authority is required for or in
connection with the execution and delivery of this Agreement or any of the Other
Agreements by Buyer or the consummation by Buyer of the transactions
contemplated hereby and thereby.
4.4 Brokers and Finders. No finder or any agent, broker or other Person
acting pursuant to authority of Buyer is entitled to any commission or finder's
fee in connection with the transactions contemplated by this Agreement.
4.5 Financing. Buyer has available to it, either in the form of
cash-on-hand or borrowing facilities with unconditional availability on not less
than five days notice, cash in an amount in excess of the Purchase Price.
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4.6 Statements True and Correct. No representation or warranty made by
Buyer in this Article 4 intentionally omits to state a Material fact with the
purpose of making any such statement contained therein misleading.
ARTICLE 5
COVENANTS AND ADDITIONAL AGREEMENTS OF
SELLER AND PURCHASER
5.1 Operation of Business Pending Closing. From and after the date hereof
and prior to the Closing Date, except with the consent of Buyer, which shall not
be unreasonably withheld or delayed, Seller shall: (a) conduct its Business in
substantially the same manner as presently conducted, and refrain from entering
into any transaction or Contract which (i) is not in the ordinary course of
business and consistent with past practice (ii) requires Seller to make
extraordinary product deliveries for a period that could reasonably extend for
more than 90 days past the Closing Date, (iii) creates a new consignment
arrangement or vendor managed inventory arrangement that is inconsistent with
Seller's past business practices or (iv) gives any Large Customer the right to
receive, upon the attainment of specified sales volumes or otherwise, or the
opportunity to receive, an incentive, discount, refund, rebate, incentive
allowance, earned cost savings, credit (whether for products or for cash) or
other price allowance of any kind, individually or in the aggregate with respect
to such Large Customer, in excess of 3% on an annual basis, unless reasonably
required to meet a competitive situation (but nothing herein shall prevent
Seller from complying with any existing program); (b) notify Buyer of (i) any
unexpected Material emergency or other Material change in the normal course of
the operation of the Business or the Purchased Assets, and (ii) any Litigation
(or written communications indicating that the same may be reasonably
contemplated), affecting the Business or the Purchased Assets, and keep Buyer
fully informed of such events and permit its representatives prompt access to
all materials prepared in connection therewith (other than documents subject to
the attorney-client privilege); (c) refrain from committing to any new trade or
industry show space or signage or point of purchase displays unless failing so
to commit might adversely affect the Business if the transactions contemplated
hereby do not close; (d) promptly notify Buyer in writing of the occurrence of
any Material Adverse Change with respect to the Business or the Purchased Assets
or of any condition or event which could reasonably be expected to result in
such a Material Adverse Change; and (e) use its reasonable commercial efforts to
protect and preserve for the benefit of the Buyer (i) Seller's relationships
with its employees, customers and suppliers and (ii) the goodwill of the
Business. Notwithstanding anything herein to the contrary, Seller shall be
permitted to terminate any distributor and/or seller representative or agent
whose performance is not satisfactory to Seller.
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5.2 Right of Inspection; Access. In order to allow Buyer to conduct its
due diligence investigation, upon reasonable notice and during normal business
hours, and, in each case, in compliance with applicable antitrust Laws, Seller
shall give to Buyer and its representatives full access to Seller's premises,
the Purchased Assets and to Seller's Contracts, accounting, financial and legal
information and to such other business information that Buyer may reasonably
request in Seller's possession; provided, however, that the foregoing shall not
permit Buyer or its representatives to interfere unreasonably with, or otherwise
disrupt, the Business. Buyer acknowledges that it has conducted its own
investigation of, and inquiry into, the environmental condition of the Xxxxxxxx
Manufacturing Facility, and has obtained a Phase I environmental assessment, a
Phase II environmental assessment and a Limited Environmental Health and Safety
Compliance Review for such Xxxxxxxx Manufacturing Facility (collectively, the
"Environmental Reports"), and subject to the satisfaction of Seller's
pre-Closing obligations pursuant to Sections 5.6 hereof, those Environmental
Reports are satisfactory to Buyer, and, accordingly, no further access is
required for environmental assessments or environmental due diligence purposes.
Seller shall also arrange for Buyer and its representatives to have the
opportunity to consult with the officers, directors, employees, attorneys,
accountants and other agents of Seller. Seller shall instruct such individuals
to cooperate reasonably with Buyer and its designees. Buyer and its designees
shall have the right to make copies of any of the records referred to above.
Subject to reasonable arrangements and limitations imposed by Seller to restrict
the disclosure of confidential or competitive information and/or to prevent the
interference with the conduct of the Business, Seller shall take or permit, as
applicable, the actions set forth on Schedule 5.2. Notwithstanding anything in
this Agreement to the contrary, (a) Buyer shall bear all risk with respect to
any property of Buyer referred to on Schedule 5.2 which is installed and/or
located on any of Seller's premises (collectively, the "Transition Related
Property") and indemnify and hold Seller harmless from any Losses attributable
to any Transition Related Property and (b) if the Closing does not occur, Buyer
shall, at its sole cost and expense, promptly remove all Transition Related
Property from the premises of Seller.
5.3 Confidentiality. The parties hereto have previously entered into that
certain non-disclosure letter agreement, dated as of June 27, 2005 (the
"Non-Disclosure Agreement"), and the Non-Disclosure Agreement remains in full
force and effect in accordance with its terms. If the transactions contemplated
hereby are not consummated, Buyer will return to Seller or destroy all
information previously disclosed in writing by Seller to Buyer as Seller may
reasonably request. The provisions of this Section 5.3 are intended to by
complementary and supplemental to, and not intended to supplant or supersede,
any of the terms, provisions or restrictions set forth in the Non-Disclosure
Agreement. To the extent that any of the terms or provisions of this Section 5.3
are inconsistent with the terms or provisions of such Non-Disclosure Agreement,
the terms and provisions of the Non-Disclosure Agreement shall govern and
control. Notwithstanding the foregoing, the provisions of the Non-Disclosure
Agreement shall not prohibit Buyer from using or disclosing confidential or
non-public information that relates to the Purchased Assets or the Business
after the Closing.
5.4 Public Announcements. Seller and Buyer shall use their respective best
efforts to consult with each other before issuing any press releases or
otherwise making any public statements or filings with Governmental Authorities
with respect to this Agreement or the transactions contemplated hereby and shall
not issue any press releases or make any public statements or filings with
Governmental Authorities prior to such consultation and shall modify any portion
thereof if the other party reasonably objects thereto, unless the same may be
required by Law.
5.5 Use of Names. Upon the earlier of (i) the first anniversary of the
Closing Date and the tenth business day after the collection of accounts
receivable of the Business that arose from pre-Closing operations, Seller (i)
shall change its name to a name wholly dissimilar to "Essex Electric" and any
variation or derivation thereof, (ii) shall provide such evidence of such name
change as Buyer may reasonably request and (iii) shall not thereafter use, or
permit any of its Affiliates to use, such name or any similar name or any
variation or derivation thereof in any circumstances.
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5.6 Environmental Corrective Actions. Prior to the Closing, Seller shall
undertake each of the corrective action items set forth in Schedule 5.6 attached
hereto.
5.7 Environmental Compliance Matters. Prior to Closing, Seller shall use
commercially reasonable efforts to address each of the compliance matters set
forth on Schedule 5.7 attached hereto. Buyer acknowledges and agrees that the
Purchase Price has been adjusted to reflect that Seller may not complete such
compliance matters and Seller shall have no further liability to Buyer as a
result of any such non-completion, except for the Retained Fines and Penalties
Liabilities.
5.8 Employees.
(a) At the Closing, Seller shall terminate all of the Xxxxxxxx
Employees and Buyer shall, concurrently therewith, offer to hire all Xxxxxxxx
Employees who were employed by Seller at the Closing. Xxxxxxxx Employees who
accept Buyer's offer of employment at Closing and sign a waiver of severance
from Seller will become Southwire employees and are hereinafter referred to as
"Hired Employees." At or prior to Closing, in accordance with Seller's existing
policy with respect thereto, Seller shall pay to the Xxxxxxxx Employees any
compensation of any type (other than severance pay) and benefits (other than
Accrued PTO) owed to the Xxxxxxxx Employees as of the Closing Date.
(b) Except as otherwise provided under the terms of an applicable
Employee Benefit Plan, effective as of the Closing Date the Hired Employees will
cease to participate in, or accrue any benefits under, the Employee Benefit
Plans. As of the Closing Date, such Hired Employees shall be permitted to
participate in the plans, programs and arrangements of Buyer and/or its
Affiliates relating to compensation and employee benefits ("Buyer Employee
Plans"). Buyer will credit Hired Employees with service with Seller and its
Affiliates prior to the Closing Date for all purposes of any Code Section 401(k)
or vacation plan maintained by Buyer as of the Closing. In addition, any
employee welfare benefit plan (as defined in Section 3(1) of ERISA) maintained
by Buyer as of the Closing in which a Hired Employee participates immediately
after the Closing (A) shall, to the extent required by applicable Law, not limit
or exclude coverage on the basis of any pre-existing condition of such Hired
Employee or dependent and (B) shall provide each Hired Employee or dependent
full credit, for the plan year during which the Closing occurs, for any
deductible already incurred by the Hired Employee or dependent under any
Employee Benefit Plan and that any co-payments or out-of-pocket expenses
previously paid under such Employee Benefit Plan shall count against any maximum
out-of-pocket expense provision of any comparable plan maintained by Buyer as of
the Closing.
(c) Notwithstanding any other provision of this Agreement, effective
as of the Closing Date, Buyer will become responsible for payment of all
salaries and benefits and all other claims, costs, expenses, liabilities and
other obligations related to Buyer's employment of the Hired Employees that
arise or relate to events occurring or conditions existing on or after the
Closing Date.
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5.9 WARN Act. Prior to Closing, Seller shall reasonably cooperate with
Buyer (and act as Buyer's agent) in giving any notices required under the WARN
Act with respect to the Xxxxxxxx Manufacturing Facility and under any similar
Alabama Law as a result of the transactions contemplated by this Agreement;
provided, however, that Buyer acknowledges and agrees that in no event shall
Seller be required to give any such notice prior to the satisfaction of the
condition set forth in Section 7.4 hereof. Seller shall have no obligation to
provide any such notices after the Closing Date. To the extent that any payment
obligations under the WARN Act or any similar Alabama Law (collectively, "WARN
Obligations") arise with respect to the Business, Buyer shall be obligated for
any WARN Obligations or Liability arising as a result of any employment losses
from the Business occurring as of and including the Closing Date.
5.10 Reimbursement for Severance Obligations. Buyer shall, within 15
business days of Seller's written request, reimburse Seller for any Severance
Obligations. If Buyer reimburses Seller for Severance Obligations attributable
to any employee who is, at any time during the one-year period following the
Closing Date, either employed by Seller or any Affiliate of Seller, then Seller
shall promptly return the amount of any such reimbursement to Buyer.
5.11 Other Offers and Exclusive Dealing. Unless and until this Agreement
is terminated prior to Closing pursuant to Article 9, Seller shall not (and
shall cause each of its shareholders, officers, directors, employees or agents
not to collectively, "Seller Related Persons")) either:
(a) solicit bids or offers or initiate discussions or negotiations
with; or
(b) on an unsolicited basis furnish or cause to be furnished any
information concerning Seller to,
any Person (other than Buyer and its officers, directors, employees and agents)
in connection with any proposed acquisition of Seller, whether by merger,
purchase of the capital stock, sale of all or substantially all of the assets or
other acquisition or business combination involving Seller (a "Business
Combination"). Notwithstanding anything herein to the contrary, if the Board of
Directors of Seller or of Alpine shall, at any time, receive a proposal or offer
in respect of a Business Combination (an "Alternative Business Combination")
which such Board of Directors shall determine is superior to the Business
Combination proposed herein, then if such Board of Directors shall determine in
the exercise of its fiduciary duties it is required to respond to such
Alternative Business Combination, Seller and the Seller Related Persons shall be
released from any obligation under this Section to the extent necessary to
respond to such Alternative Business Combination consistent with the exercise of
such fiduciary duties. If Seller receives, or if any of the Seller Related
Persons receive, any inquiry or proposal of a type referred to above, then
Seller shall (and it shall cause the Seller Related Persons to) promptly notify
Buyer of the existence of any such inquiry or proposal. If:
(i) Seller breaches its obligations under this Section;
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(ii) Seller terminates this Agreement pursuant to Section
9.1(c);
(iii) Buyer terminates this Agreement pursuant to Section
9.1(d); or
(iv) Buyer terminates this Agreement pursuant to Section
9.1(i) or Buyer or Seller terminate this Agreement pursuant to
Section 9.1(j) and, in either case, prior to, concurrently with or
within one year after any such termination, Seller consummates a
Business Combination with a Third Party with whom Seller or its
controlling shareholders discussed a Business Combination subsequent
to the date hereof and prior to such termination,
then, in any such event, Seller shall pay Buyer, as Buyer's liquidated damages
(and not as a penalty) incurred by Buyer in connection with this Agreement and
all related transactions, the sum of $2,500,000, and any such payments by Seller
shall be Buyer's sole and exclusive remedy hereunder. Said $2,500,000 shall be
paid within two business days by wire transfer of immediately available funds;
provided, however, in the case of clause (iv) above, such payment shall be made
within two business days of the consummation of such Business Combination with a
Third Party. Notwithstanding anything in this Section 5.11 to the contrary,
neither Seller nor Alpine shall be liable hereunder for any act or omission
committed by Superior Essex Inc. in its capacity as a shareholder of Seller or
otherwise.
5.12 Certain Tax Matters.
(a) All Tax Returns required to be filed by Seller on or before the
Closing Date shall be filed by Seller and Seller shall pay all Taxes shown as
due and payable thereon.
(b) Subsequent to the Closing Date, Buyer and Seller shall provide
each other with such assistance (including the provision of records) as may
reasonably be requested by either of them in connection with the preparation of
any Tax Return, the response to any audit or other examination by any
Governmental Authority, or any judicial or administrative proceedings relating
to any Liability for Taxes.
5.13 Idled Production Machinery and Equipment. If, prior to Closing, any
Idled Production Machinery and Equipment is lost or damaged beyond reasonable
repair due to a fire or other casualty, then Buyer shall be entitled to (a)
receive any insurance proceeds actually received by Seller with respect thereto
or (b) in lieu thereof, at Seller's option, Seller may assign to Buyer all of
its rights with respect to any claim for such insurance proceeds.
5.14 Expenses. Except as set forth below and in Section 1.4(c), whether or
not the transactions contemplated hereby are consummated, Buyer and Seller shall
each pay its own fees and expenses and those of its agents, attorneys and
advisers. Buyer shall pay all HSR Act filing fees. Anything to the contrary in
this Agreement notwithstanding, (a) Seller shall pay 2/3 of the costs of any
environmental surveys and related costs to be undertaken at the Xxxxxxxx Real
Property and Buyer shall pay 1/3 of such costs, (b) Buyer shall pay all of its
other due diligence costs, (c) Seller shall pay any sales and other transfer
taxes and fees (including motor vehicle transfer fees) which may be due with
respect to the sale of the Purchased Assets, (d) any fees and expenses of any
finder or broker retained by or on behalf of either party (or by any of its
Affiliates) shall be paid by such party, (e) Seller shall pay $18,000 of the
total premium on the Environmental Matters Insurance Policy (as defined below)
and Buyer shall pay the remainder of such premium and (f) the Purchased Assets
shall, to the extent permitted by applicable Law, be claimed as exempt from
sales or use tax by Buyer and Buyer shall furnish Seller at Closing with
appropriate resale exemption certificates and manufacturing machinery exemption
certificates as reasonably requested by Seller for the Purchased Assets.
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5.15 Delivery of Books and Records. At the Closing, Seller shall deliver
to Buyer all original documents, books and records pertaining to the Business
(except minute books, stock records, financial statements, Tax Returns (other
than personal property tax returns relating to the Purchased Assets) and all
documents, books and records pertaining solely to the Excluded Assets and the
Excluded Liabilities) and to the Purchased Assets and the Assumed Liabilities
that are legally significant or useful to the Business (including those relating
to the Xxxxxxxx Employees) and shall deliver copies of all other documents,
books and records pertaining to the Business, the Purchased Assets and the
Assumed Liabilities as Buyer may reasonably request, but in each case subject to
applicable Laws relating to privacy. Seller may retain copies of any of the
foregoing for its own use. Without limiting the generality of the foregoing,
Seller shall deliver to Buyer at the Closing all documents and records relating
to the Intellectual Property, including without limitation, and to the extent in
Seller's possession, the original Certificates of Registration for all Letters
Patent, trademarks and service marks listed on Schedule 3.11 and all such
documents relating thereto along with any other documents necessary to transfer
title thereto and to record such transfer before the respective patent and
trademark offices or similar Governmental Authorities.
5.16 Alpine Proxy Materials. To the extent necessary, Buyer shall
cooperate with Seller with respect to the preparation of any necessary proxy
materials by any Affiliate of Seller.
5.17 HSR Act Filings. Buyer and Seller have prepared and made (or each has
caused its "ultimate parent entity" to prepare and make) the filings required to
be made with the FTC and the DOJ under the HSR Act. If the FTC or the DOJ
requires any additional information with respect to the transaction, Buyer and
Seller shall reasonably cooperate with each other in obtaining and preparing
such information and delivering it to the FTC and the DOJ.
5.18 Further Assurances; Covenant to Satisfy Conditions. (a) At any time
and from time to time after the Closing, Seller shall, at the request of Buyer
(i) take any and all actions necessary to fulfill its obligations hereunder and,
subject to the terms of the Transition Services Agreement, to put Buyer in
actual possession and operating control of the Purchased Assets and (ii) execute
and deliver such further instruments of conveyance, sale, transfer and
assignment, and take such other actions as may be reasonably necessary or
appropriate to effectuate, record or perfect the transfer of the Purchased
Assets to Buyer, free and clear of all Liens (other than Permitted Liens), or to
confirm the title of the Purchased Assets to Buyer. Without limiting the
generality of the foregoing, Seller shall execute and deliver such documents,
prepared by Buyer, as may be reasonably necessary or appropriate to transfer to
Buyer Seller's Alabama Department of Revenue Sales and Use Tax and Ad Valorem
Tax Certificates of Exemption for Project Number 2002308001 (the "Exemption");
provided, however, that Buyer acknowledges and agrees that Seller is not making
any representation hereunder as to the transferability of the Exemption and
Seller shall have no Liability hereunder if Buyer shall fail to obtain the
Exemption.
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(b) Buyer and Seller will use their respective commercially
reasonable best efforts to ensure that the conditions set forth in Articles 6
and 7, respectively, which are required to be satisfied by Buyer and Seller,
respectively, are satisfied as soon as reasonably practicable, including,
without limitation, the deliveries provided for therein.
5.19 Title.
(a) Buyer has obtained an Owners Title Insurance Commitment (the
"Title Commitment") with respect to the Xxxxxxxx Real Property prior to the date
of this Agreement from Commonwealth Land Title Insurance Company (the "Title
Insurer"). Buyer has previously delivered a complete copy of the Title
Commitment to the attorneys of Seller set forth in Section 11.1 with a written
notice specifying any Liens or other defects of title other than the Permitted
Title Exceptions (together with true and complete copies of any such Liens or
other defects of title). Buyer shall notify such attorneys of Seller in writing
of any Liens or defects of title disclosed in any update or continuation of the
Title Commitment within seven days of Buyer's receipt thereof (and provide
Seller within such seven day period with true and complete copies of any such
other Liens or defects of title). Except as expressly provided in Section
5.19(b) of this Agreement, Seller shall have no obligation to cure any such
title objections. If, after having received Buyer's notice of title objections
which Seller is not obligated to remove pursuant to Section 5.19(b) hereof,
Seller gives notice of its election not to cure same (or is unable to do so),
Buyer shall either (i) elect within ten business days after Seller shall have
given such notice to accept such title as Seller is able to convey without any
reduction or abatement of the Purchase Price or (ii) elect to terminate this
Agreement. Failure of Buyer to notify Seller of its election within such ten
business day period shall be deemed to constitute Buyer's election to accept
such title. In the event that Buyer shall elect to terminate this Agreement,
this Agreement shall wholly cease and terminate and neither of the parties shall
have any further liabilities or obligations hereunder, other than those which
expressly survive the termination of this Agreement. Seller shall be entitled to
reasonable adjournments of the Closing to cure any title objections, which
adjournments shall not exceed 60 days in the aggregate, but in no event shall
any such adjournment delay the Closing beyond February 15, 2006. If, at the end
of such 60 day period, Seller has still failed to cure such title defects, Buyer
shall have the right to terminate this Agreement. Nothing herein contained shall
obligate Seller to bring any action or proceeding or, except as expressly
provided in this Agreement, otherwise to incur any expense in order to cure any
title objection or to continue with or to succeed in such cure.
(b) Notwithstanding anything to the contrary contained in Section
5.19(a) hereof, if the Title Commitment (or any update or continuation thereof)
discloses any Lien affecting the Xxxxxxxx Real Property, other than the
Permitted Title Exceptions, which either (i) was placed of record by Seller or
with Seller's express written consent, including that certain mortgage securing
the amount of $100,000,000.00 from Seller to Foothill Capital Corporation, as
Agent, recorded in Real Property Book 2002, Page 75198 in the office of the
Judge of Probate of Lauderdale County, Alabama, or (ii) may be satisfied by the
payment of a liquidated sum of money not to exceed, in the aggregate for all
such encumbrances, $1,000,000 then, in any such case, Seller shall be obligated
to take such action as is required on the part of Seller to have such Lien
removed of recorded and omitted as an exception from the title insurance
coverage provided to Buyer and its lender by the Title Insurer.
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(c) If a search of the title discloses judgments, bankruptcies or
other returns against other Persons having names the same as or similar to that
of Seller, Seller shall, on request, deliver to Buyer and the Title Insurer a
certification in form and substance reasonably satisfactory to Seller and the
Title Insurer certifying that such judgments, bankruptcies or other returns are
not against Seller.
(d) Buyer shall pay the cost of Buyer's policy of title insurance
and of any survey obtained by Buyer.
(e) Unpaid Liens for Taxes, water charges and assessments which
Seller is obligated to pay and discharge shall not be title objections but, at
the option of Seller, the amount thereof, plus interest and penalties thereon,
shall be deducted from the balance of the Purchase Price to be paid hereunder or
paid by Seller, subject to the provisions for apportionment of Taxes and water
charges contained herein.
(f) If, on the Closing Date, there shall be financing statements
which were filed more than five years prior to the Closing Date and which were
not continued, such financing statements shall not be deemed to be a title
objection, provided that (i) the Title Insurer gives Buyer and its lender, if
any, affirmative coverage against any loss or damage (including reasonable
attorneys' fees and expenses of litigation) resulting from the enforcement or
attempted enforcement of the security interest evidenced by such financing
statement(s) or (ii) each such financing statement is omitted as an exception
from the title insurance coverage provided to Buyer and its lender, if any, by
the Title Insurer.
(g) In the event there are unpaid state franchise Taxes and/or
municipal corporate business Taxes due from any Persons in the chain of title,
which franchise Taxes and/or municipal business Taxes are or may be a Lien upon
the Xxxxxxxx Real Property, such Taxes shall not be a title objection, provided
that the Title Insurer (i) shall afford Buyer and its lender, if any,
affirmative coverage against any loss or damage (including reasonable attorneys'
fees and expenses of litigation) resulting from the enforcement or attempted
enforcement of any such execution or Lien or (ii) shall otherwise insure Buyer
and its lender, if any, against collection of such Taxes out of the Xxxxxxxx
Real Property.
5.20 Notification of Changes.
(a) Between the date hereof and the Closing Date, Seller shall
promptly notify Buyer in writing of any information unknown as of the date
hereof or arising subsequent to the date hereof that, if known or existing on
the date hereof, as the case may be, would have been required to be disclosed on
a Schedule hereto in order for Seller to comply with its obligations under
Section 6.1.
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(b) If any information provided by Seller to Buyer pursuant to
Section 5.20(a) shall disclose the existence or occurrence of a circumstance or
event that is Material and adverse when compared to the information disclosed in
any Schedule delivered by Seller on the date of this Agreement, Buyer shall have
the right to terminate this Agreement by written notice to that effect
(specifying the basis for such termination to Seller) within 14 business days
after its receipt of such supplemental disclosure; and upon such timely
termination, Buyer shall be released of all of its obligations hereunder. If
Buyer shall not timely elect to terminate this Agreement in accordance with the
foregoing sentence, such disclosed information shall be deemed to amend any such
Schedule and this Agreement as of the date hereof.
5.21 Future Business Dealings. Buyer and Seller agree to discuss future
opportunities to supply each other with certain products during the period
between the date hereof and the Closing Date as they may deem mutually
advantageous upon pricing and other terms to be negotiated.
5.22 Intrusive Testing. Buyer agrees that it will not conduct any invasive
testing, Phase II sampling, investigation, evaluation or other analysis of the
subsurface conditions at the Xxxxxxxx Real Property, following the Closing Date,
unless and only to the extent such testing, sampling, investigation, evaluation
or analyses are (i) required to be undertaken pursuant to applicable
Environmental Law or a written requirement order of a Governmental Authority or
(ii) undertaken by Buyer in the ordinary course of Buyer's operation of its
business at the Xxxxxxxx Real Property, including without limitation, in
connection with any maintenance, construction or expansion activities, or
environmental compliance or audits; provided, however, that for purposes of this
Section 5.22 any such maintenance activities or environmental compliance or
audits conducted by Buyer shall be of substantially the same scope, tenor and
frequency as those undertaken by Buyer at its other facilities.
ARTICLE 6
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligations of Buyer to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction, on or before the Closing
Date, of each of the following conditions, any of which may be waived, in whole
or in part, by Buyer for purposes of consummating such transactions:
6.1 Representations True and Covenants Performed at Closing. The
representations and warranties made by Seller in this Agreement shall be true
and correct in all Material respects on the Closing Date with the same force and
effect as if this Agreement had been executed on and as of the Closing Date
(other than representations and warranties which are made as of a specified
date, which shall be true and correct in all Material respects as of such date);
provided, however, that the Qualified as to Materiality Representations shall be
true and correct on the Closing Date in accordance with their respective terms
with the same force and effect as if this Agreement had been executed on and as
of the Closing Date (other than Qualified as to Materiality Representations
which are made as of a specified date, which shall be true and correct as of
such date). Seller shall have duly performed or complied with in all Material
respects all of the agreements and covenants and satisfied all of the conditions
to be performed or complied with by it on or prior to the Closing Date, except
that Seller's compliance or lack of compliance with Section 5.7 hereof shall not
be a condition precedent to Closing. Notwithstanding anything herein to the
contrary, if Seller shall have failed to duly perform or comply with the
requirements of Section 5.6 or Schedule 5.6, such failure shall be deemed
"Material" for all purposes of this Article 6. Seller shall execute and deliver
to Buyer a certificate, dated as of the Closing Date, certifying as to the
fulfillment of the conditions of this Section 6.1 and the non-occurrence of
Material damage to the Xxxxxxxx Manufacturing Facility between the date hereof
and the Closing Date, in the form attached hereto as Exhibit A.
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6.2 No Injunction, Etc. No Litigation, Law or Order shall have been
instituted, enacted, entered, threatened or proposed before any court or
Governmental Authority to enjoin, restrain, prohibit, or obtain damages in
respect of this Agreement or the consummation of the transactions contemplated
hereby.
6.3 No Material Damage to Xxxxxxxx Manufacturing Facility. There shall not
have occurred any Material damage to the Xxxxxxxx Manufacturing Facility.
6.4 HSR Act Approval. All waiting periods applicable to this Agreement and
the transactions contemplated hereby under the HSR Act shall have expired or
been terminated and neither the FTC nor the DOJ shall have sought to restrain,
enjoin or otherwise prevent the consummation of the transactions contemplated
hereby (or any such proceeding has been resolved to permit the consummation of
the transactions contemplated hereby).
6.5 Alpine Stockholder Approval. The stockholders of Alpine shall have
duly authorized the execution, delivery and performance of this Agreement and
the Other Agreements in accordance with the Certificate of Incorporation and
Bylaws of Alpine and the Delaware General Corporation Law.
6.6 Xxxx of Sale; Assignments; Etc. Buyer shall have received from Seller
(a) an executed Xxxx of Sale, in the form attached hereto as Exhibit B, (b) an
executed Assignment and Assumption Agreement, in the form attached hereto as
Exhibit C and (c) such other assignments and instruments of conveyance as may be
reasonably necessary or appropriate to transfer the Purchased Assets to Buyer
free and clear of all Liens except Permitted Liens, including, without
limitation, an assignment of the Exemption, but only to the extent the Exemption
is assignable, and the failure of the state of Alabama to consent to such
assignment shall not be a condition to Closing.
6.7 Assignment of Non-Competition Rights. Buyer shall have received an
Assignment of Non-Competition Rights, in the form attached hereto as Exhibit D,
duly executed by Seller and Alpine Holdco Inc.
6.8 Assignment of Intellectual Property. Buyer shall have received from
Seller instruments evidencing the assignment to Buyer of all owned Intellectual
Property (including domain names) included in the Purchased Assets, in the form
attached hereto as Exhibit E-1 (US), Exhibit E-2 (Canada) and Exhibit E-3.
26
6.9 Irrevocable Proxy. Buyer shall have received an Irrevocable Proxy, in
the form attached hereto as Exhibit F, duly executed by Seller.
6.10 Assignment of Trademark License Agreement. Buyer shall have received
an Assignment of Trademark License Agreement, in the form attached hereto as
Exhibit G, duly executed by Seller, and IP Licensing LLC shall not have
withdrawn its consent to such assignment.
6.11 Lien Releases. Buyer shall have received releases of all Liens to
which the Purchased Assets are subject (other than Permitted Liens), including,
without limitation, a release in recordable form of the Xxxxxxxx Real Property
from the Lien of that certain mortgage in the amount of $100,000,000.00 from
Seller to Foothill Capital Corporation, as Agent, recorded in Real Property Book
2002 in the office of the Judge of Probate of Lauderdale County, Alabama.
6.12 Limited Warranty Deed and Quitclaim Deed. Buyer shall have received
from Seller in duly executed and recordable form (a) a limited warranty deed in
respect of the Xxxxxxxx Real Property, in the form attached hereto as Exhibit H,
and (b) a quitclaim deed describing the Xxxxxxxx Real Property according to any
new survey of the Xxxxxxxx Real Property obtained by Buyer if the survey
description differs Materially from the description set forth in such limited
warranty deed.
6.13 [Intentionally Omitted].
6.14 Certificate(s) of Occupancy, Etc. Seller shall have delivered to
Buyer copies of all certificates of occupancy issued by the state fire marshal
and/or the appropriate local zoning authorities for the Xxxxxxxx Real Property
together with a complete set of all passkeys, all architectural, mechanical and
electrical plans and specifications in Seller's possession used in the
construction of the improvements, and all "as-built" plans and site surveys in
Seller's possession.
6.15 Section 1445 Affidavit. Buyer shall have received an affidavit from
Seller and any other party or parties required pursuant to Section 1445 of the
Code.
6.16 Covenant Not To Compete. Each of Seller, Alpine, Alpine Holdco Inc.
and Xxxxxx X. Xxxxxx, shall have entered into a non-competition agreement with
Buyer, in the form attached hereto as Exhibit I.
6.17 Transition Services Agreement. Seller shall have entered into a
Transition Services Agreement, in the form attached hereto as Exhibit J (the
"Transition Services Agreement").
6.18 Secretary's Certificate. Seller shall have delivered to Buyer a
certificate, dated the Closing Date, executed by the Secretary of Seller, in the
form attached hereto as Exhibit K.
6.19 Consents. There shall have been received a consent from the Third
Party to the Contract set forth on Schedule 6.19 or Seller and Buyer shall have
agreed upon an alternative mechanism which would confer upon Buyer substantially
the same benefit which it would have received if such consent was granted.
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ARTICLE 7
CONDITIONS PRECEDENT TO OBLIGATIONS
OF SELLER
The obligations of Seller to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction, on or before the Closing
Date, of each of the following conditions, any of which may be waived, in whole
or in part, by Seller for purposes of consummating such transactions:
7.1 Representations True and Covenants Performed at Closing. The
representations and warranties made by Buyer in this Agreement shall be true and
correct in all Material respects on the Closing Date with the same force and
effect as if this Agreement had been executed on and as of the Closing Date
(other than representations and warranties which are made as of a specified
date, which shall be true and correct as of such date). Buyer shall have duly
performed or complied with in all Material respects all of the agreements and
covenants and satisfied all of the conditions to be performed or complied with
by it on or prior to the Closing Date. Buyer shall execute and deliver to Seller
a certificate dated as of the Closing Date, certifying as to the fulfillment of
the conditions of this Section 7.1, in the form attached hereto as Exhibit L.
7.2 No Injunction, Etc. No Litigation, Law or Order shall have been
instituted, enacted, entered, threatened or proposed before any court or
Governmental Authority to enjoin, restrain, prohibit, or obtain damages in
respect of this Agreement or the consummation of the transactions contemplated
hereby.
7.3 HSR Act Approval. All waiting periods applicable to this Agreement and
the transactions contemplated hereby under the HSR Act shall have expired or
been terminated and neither the FTC nor the DOJ shall have sought to restrain,
enjoin or otherwise prevent the consummation of the transactions contemplated
hereby (or any such proceeding has been resolved to permit the consummation of
the transactions contemplated hereby).
7.4 Alpine Stockholder Approval. The stockholders of Alpine shall have
duly authorized the execution, delivery and performance of this Agreement and
the Other Agreements in accordance with the Certificate of Incorporation and
Bylaws of Alpine and the Delaware General Corporation Law.
7.5 Payment of the Purchase Price. The Purchase Price shall have been paid
to Seller in the manner described in Article 1 hereof.
7.6 Assignment and Assumption Agreement. Seller shall have received from
Buyer an executed Assignment and Assumption Agreement, in the form attached
hereto as Exhibit C.
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7.7 Secretary's Certificate. Buyer shall have delivered to Seller a
certificate, dated the Closing Date, executed by the Secretary of Buyer, in the
form attached hereto as Exhibit M.
7.8 Transition Services Agreement. Buyer shall have entered into the
Transition Services Agreement.
7.9 Utility Letter of Credit. Buyer shall have either (a) obtained a
standby letter of credit in form and substance acceptable to Xxxxxxxx Utilities
for substitution of the Utility Letter of Credit or (b) provided to Xxxxxxxx
Utilities a deposit, collateral or other assurances acceptable to Xxxxxxxx
Utilities in order to release the Utility Letter of Credit, and Xxxxxxxx
Utilities shall have returned to Seller the Utility Letter of Credit.
7.10 Environmental Matters Insurance Policy. Buyer shall have delivered to
Seller an insurance policy and applicable endorsements in substantially the form
attached hereto as Exhibit N (the "Environmental Matters Insurance Policy"),
together with evidence reasonably satisfactory to Seller that such policy is in
effect and that the premium payable in respect thereof has been paid.
ARTICLE 8
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
AND INDEMNIFICATION
8.1 Survival of Representations and Warranties.
(a) All representations, warranties, agreements and covenants made
or undertaken by the parties in this Agreement are material, have been relied
upon by the other parties hereto, shall survive the Closing hereunder, shall not
merge in the performance of any obligation by any party hereto and shall
terminate and expire as follows:
(i) Any General Claim with respect to which a Claims Notice
has not been given pursuant to Section 8.4 will terminate and expire
18 months after the Closing Date.
(ii) Any Ownership Claim, any claim arising out of Section
8.2(a), any claim arising out of Section 8.3(a) and any claim for
breaches of agreements or covenants contained in this Agreement
shall not terminate or expire.
(b) The representations and warranties made by Seller and contained
in Article 3 of this Agreement and the representations and warranties made by
Buyer and contained in Article 4 of this Agreement are deemed by the parties
hereto to have been made by Seller and Buyer, as the case may be, on and as of
both the date hereof and the Closing Date with the same force and effect as if
this Agreement were executed by Seller and Buyer on each of the date hereof and
the Closing Date (other than representations and warranties which are made as of
a specified date, which shall be true and correct as of such date).
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8.2 Obligation of Seller to Indemnify. Subject to the limitations
contained in Sections 8.1 and 8.6, Seller agrees to pay, indemnify, defend and
hold Buyer and its officers, directors, employees, counsel, agents, Affiliates
and assigns harmless from and against all Losses which may be asserted against,
imposed upon or incurred by any of them by reason of, resulting from, or in
connection with the following:
(a) any Excluded Liability;
(b) any inaccuracy in or breach of any representation or warranty
made by Seller pursuant to this Agreement; and
(c) any breach of any covenant or agreement made or to be performed
by Seller pursuant to this Agreement.
8.3 Obligation of Buyer to Indemnify. Subject to the limitations contained
in Sections 8.1 and 8.6, Buyer agrees to pay, indemnify, defend and hold Seller
and its officers, directors, employees, counsel, agents, Affiliates and assigns
harmless from and against all Losses which may be asserted against, imposed upon
or incurred by any of them by reason of, resulting from or in connection with
the following:
(a) any Assumed Liability;
(b) any inaccuracy in or breach of any representation or warranty
made by Buyer pursuant to this Agreement; and
(c) any breach of any covenant or agreement made or to be performed
by Buyer pursuant this Agreement.
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8.4 Notice of Loss or Asserted Liability. Promptly after (a) becoming
aware of circumstances that have resulted in a Loss for which any Person
entitled to indemnification pursuant to Section 8.2 or Section 8.3 intends to
seek indemnification under such Section (the "Indemnified Party") or (b) receipt
by the Indemnified Party of written or oral notice of any demand, claim or
circumstance which, with or without the lapse of time, the giving of notice or
both, would give rise to a claim or the commencement (or threatened
commencement) of any Litigation that may result in a Loss (an "Asserted
Liability"), the Indemnified Party shall give written notice thereof (the
"Claims Notice") to any other party or parties obligated to provide
indemnification pursuant to Section 8.2 or Section 8.3 (the "Indemnifying
Party"). The Claims Notice shall describe the Loss or the Asserted Liability in
reasonable detail, and shall indicate the amount (estimated, if necessary, but
only if reasonably determinable) of the Loss that has been or which may be
suffered by the Indemnified Party. The Claims Notice may be amended on one or
more occasions with respect to the amount of the Asserted Liability or the Loss
at any time prior to final resolution of the obligation to indemnify relating to
the Asserted Liability or the Loss. If a Claims Notice is not provided promptly
as required by this Section 8.4, the Indemnified Party nonetheless shall be
entitled to indemnification by the Indemnifying Party unless the Indemnifying
Party is able to prove that it was prejudiced by such late receipt of the Claims
Notice.
8.5 Opportunity to Contest. The Indemnifying Party may elect to compromise
or contest, at its own expense and with counsel of its choice reasonably
acceptable to the Indemnified Party, any Asserted Liability. If the Indemnifying
Party elects to compromise or contest such Asserted Liability, it shall, within
30 days (or sooner, if the nature of the Asserted Liability so requires), notify
the Indemnified Party of its intent to do so by sending a notice to the
Indemnified Party (the "Contest Notice"), and the Indemnified Party shall
cooperate, at the expense of the Indemnifying Party, in the compromise or
contest of such Asserted Liability. If the Indemnifying Party elects not to
compromise or contest the Asserted Liability, fails to notify the Indemnified
Party of its election as herein provided or contests its obligation to indemnify
under this Agreement, the Indemnified Party (upon further notice to the
Indemnifying Party) shall have the right to pay, compromise or contest such
Asserted Liability on behalf of and for the account and risk of the Indemnifying
Party. Anything in this Section 8.5 to the contrary notwithstanding, (i) the
Indemnified Party shall have the right, at its own cost and for its own account,
to compromise or contest any Asserted Liability and the exercise of such right
shall relieve the Indemnifying Party of any further obligation hereunder with
respect to any such Asserted Liability, and (ii) neither the Indemnifying Party
nor the Indemnified Party shall, without the written consent of the Indemnifying
Party or the Indemnified Party, as the case may be, settle or compromise any
Asserted Liability or consent to entry of any judgment which does not include an
unconditional term releasing the Indemnifying Party or the Indemnified Party, as
the case may be, from all Liability in respect of such Asserted Liability. In
any event, the Indemnified Party and the Indemnifying Party may participate, at
their own expense, in the contest of such Asserted Liability. Seller and Buyer
shall reasonably cooperate with each other as to all Asserted Liabilities
initiated by Third Parties shall make available to each other as reasonably
requested all information, records, and documents relating to all Asserted
Liabilities initiated by Third Parties and shall preserve all such information,
records, and documents until the termination of any such Asserted Liability.
Seller and Buyer also shall make available to each other, as reasonably
requested, its personnel, agents, and other representatives who are responsible
for preparing or maintaining information, records, or other documents, or who
may have particular knowledge with respect to any Asserted Liability.
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8.6 Limitations on Indemnification. Anything to the contrary herein
notwithstanding:
(a) Seller shall not be required to indemnify Buyer and the other
Persons specified in Section 8.2 with respect to a Loss related to a General
Claim unless the amount of such Loss, when aggregated with all other such Losses
of such Persons, shall exceed $250,000 (the "Minimum Aggregate Liability
Amount"), at which time Losses may be asserted for the Minimum Aggregate
Liability Amount and any amounts in excess thereof. Notwithstanding anything
herein to the contrary, the Minimum Aggregate Liability Amount shall not apply
to any Losses attributable to any inaccuracy in or breach of any Qualified as to
Materiality Representation.
(b) The maximum aggregate liability of Seller pursuant to this
Article 8 with respect to any Losses related to General Claims shall be an
amount equal to 10% of the aggregate Purchase Price (the "Maximum Aggregate
Liability Amount").
(c) The Minimum Aggregate Liability Amount and the Maximum Aggregate
Liability Amount shall not apply to any Loss which results from or arises out of
(A) any Ownership Claim, (B) any claim arising out of Section 8.2(a), (C) any
claim for breaches of agreements or covenants in this Agreement, or (D) fraud
and intentional misrepresentation or an intentional breach of warranty on the
part of Seller or Buyer in this Agreement.
(d) No party otherwise entitled to indemnification under this
Agreement shall be indemnified pursuant to this Agreement to the extent that
such party's Losses are increased or extended by the willful misconduct,
violation of Law or bad faith of such party, in each case, as determined by a
final, non-appealable judgment by a court of competent jurisdiction.
(e) The amount of any indemnification under this Article 8 shall be
reduced by any amount recovered by the Indemnified Party (net of reasonable
expenses incurred in obtaining such recovery) under any insurance policy
(including any environmental insurance policy) or from any Third Party (which
recovery the Indemnified Party shall use its reasonable commercial efforts to
pursue), and by any income Tax benefit related to the indemnified Loss obtained
by the Indemnified Party or any Affiliate. If, after an indemnification payment
has been made with respect to a Loss, the Indemnified Party or any Affiliate has
a recovery, or obtains an income Tax benefit, with respect to that Loss, the
Indemnified Party shall promptly pay to the Indemnifying Party the amount of
that recovery or income Tax benefit, net of reasonable expenses and Tax or other
costs incurred in obtaining recovery.
(f) Any payment of an indemnification amount under this Article 8
shall be accounted for as an adjustment to the Purchase Price.
(g) Seller shall not be required to indemnify Buyer and the other
Persons specified in Section 8.2 with respect to any Loss related to an
Environmental Liability unless such Loss exceeds the total payments made to
Buyer or such other Person under the insurance policy referred to in Section
7.10 hereof and Seller's obligation to indemnify Buyer and the other Persons
specified in Section 8.2 as limited by this Section 8.6(g) shall expire upon the
earlier of (i) the fifth anniversary of the Closing Date or (ii) the expiration,
lapse or non-renewal of the insurance policy referred to in Section 7.10 hereof.
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8.7 Subrogation Rights. In the event that the Indemnifying Party shall be
obligated to indemnify the Indemnified Party pursuant to this Article 8, the
Indemnifying Party shall upon payment of such indemnity in full, be subrogated
to all rights of the Indemnified Party with respect to the Loss to which such
indemnification relates; provided, however, that the Indemnifying Party shall
only be subrogated to the extent of any amount paid by it pursuant to this
Article 8 in connection with such Loss.
8.8 Post-Closing Maintenance of Cash, Etc.. To ensure that adequate sums
will be available from which post-Closing adjustments and Seller's
indemnifications may be paid to Buyer, Seller will, at all times during the
18-month period subsequent to the Closing, maintain unencumbered either (a)
cash, (b) cash equivalents or (c) marketable securities or other assets that are
acceptable to Buyer in its sole discretion, which in the case of either clause
(a), (b) or (c) is at least equal to 5% of the aggregate Purchase Price
(adjusted for claims paid), but in no event to exceed $3,500,000.
8.9 Indemnification Payments. Subject to the terms hereof and unless
contested pursuant to Section 8.5, an Indemnifying Party shall pay to the
Indemnified Party the full amount of any and all Losses (other than Losses
resulting from an Asserted Liability) under this Article 8 within ten days of
receipt of the Claims Notice thereof and the full amount of any Loss resulting
from an Asserted Liability within ten days of the date such Litigation is
terminated or the date a final judgment or award is rendered and no appeal is
taken, and thereafter the amount of such Loss shall bear interest at a rate
equal to the lesser of 2% per month or the maximum amount permitted by law.
8.10 Exclusive Remedies. If the Closing occurs, the remedies provided in
this Article 8 are the sole and exclusive remedies for recoveries against
another party for breaches of the representations and warranties in this
Agreement and for the matters specifically listed in Sections 8.2 and 8.3;
provided, however, that neither the foregoing nor anything else in this
Agreement shall limit the right of a party to enforce the performance of this
Agreement by any remedy available to it in equity, including specific
performance.
ARTICLE 9
TERMINATION
9.1 Method of Termination. This Agreement and the transactions
contemplated by it may be terminated at any time prior to the Closing Date:
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(a) By the mutual consent of Seller and Buyer at any time;
(b) By Seller pursuant to Section 1.2;
(c) By Seller in the exercise of fiduciary duties by its board or
the board of Alpine pursuant to Section 5.11;
(d) By Buyer if Seller or the controlling shareholders of Seller
consummate a Business Combination with any Person other than Buyer;
(e) By Buyer pursuant to Section 5.19;
(f) By Buyer pursuant to Section 5.20;
(g) By Buyer pursuant to Section 9.4;
(h) By Seller, upon a breach of or failure to perform in any
Material respect any representation, warranty, covenant or agreement on the part
of Buyer set forth in this Agreement, such that the conditions set forth in
Article 7 of this Agreement cannot be satisfied on or prior to November 30,
2005; provided, however, in the case of any such breach or failure to perform by
Buyer of any covenant or agreement hereunder which is not a willful breach or
failure to perform, if such breach or failure to perform may be cured by Buyer
and Buyer is taking reasonable steps to cure such breach or failure to perform,
then Seller may not terminate this Agreement pursuant to this Section 9.1(h)
until February 15, 2006;
(i) By Buyer, upon a breach of or failure to perform in any Material
respect any representation, warranty, covenant or agreement on the part of
Seller set forth in this Agreement, such that the conditions set forth in
Article 6 of this Agreement cannot be satisfied on or prior to November 30,
2005; provided, however, in the case of any such breach or failure to perform by
Seller of any covenant or agreement hereunder which is not a willful breach or
failure to perform, if such breach or failure to perform may be cured by Seller
and Seller is taking reasonable steps to cure such breach or failure to perform,
then Buyer may not terminate this Agreement pursuant to this Section 9.1(i)
until February 15, 2006; or
(j) By Seller or Buyer, if the Closing shall not have occurred on or
prior to February 15, 2006.
9.2 Notice of Termination. Notice of termination of this Agreement, as
provided for in this Article 9, shall be given by the party so terminating to
the other parties hereto in accordance with Section 11.1 of this Agreement.
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9.3 Effect of Termination. In the event of a termination of this Agreement
pursuant to Section 9.1 hereof, and except for the rights and obligations
arising under Section 5.11 (which shall survive any such termination), this
Agreement shall become void and of no further force and effect, and each party
shall pay the costs and expenses incurred by it in connection with this
Agreement, and no party (or any of its agents, counsel, representatives,
Affiliates or assigns) shall be liable to any other party for any Loss
hereunder. It is agreed that time is of the essence in the performance and
satisfaction of this Agreement and each of the conditions specified in Articles
6 and 7 of this Agreement are Material for purposes of this Agreement.
9.4 Destruction, Damage or Condemnation.
(a) If, prior to the Closing Date, any portion of the Xxxxxxxx Real
Property is Materially damaged or destroyed by fire or other casualty (a
"Casualty"), then Seller shall notify Buyer of such fact and Buyer shall have
the option to terminate this Agreement upon notice to Seller given not later
than ten business days after Seller gives such notice to Buyer. If this
Agreement is terminated as aforesaid, then neither party shall have any further
rights or obligations hereunder, other than those which expressly survive the
termination of this Agreement, and all insurance proceeds shall belong to
Seller. If, prior to the Closing Date, any portion of the Xxxxxxxx Real Property
is Materially damaged or destroyed by a Casualty and Buyer does not elect to
terminate this Agreement (or if Buyer does not have the right to elect to
terminate this Agreement), then (i) Buyer shall accept so much of the Xxxxxxxx
Real Property as remains after such Casualty with no abatement of the Purchase
Price, and (ii) Seller shall (1) assign to Buyer at the Closing all rights of
Seller to any insurance proceeds, (2) remit to Buyer at Closing any such
insurance proceeds received by Seller after the date hereof and prior to the
Closing (less reasonable costs of collection and/or restoration incurred by
Seller prior to Closing), and (3) remit to Buyer promptly upon receipt any such
insurance proceeds received by Seller after the Closing (which obligation shall
survive the Closing).
(b) In the event of (i) the institution of any proceeding (judicial,
administrative or otherwise) which shall relate to the proposed taking by
eminent domain of a portion of the Xxxxxxxx Real Property, and the portion of
the Xxxxxxxx Real Property not affected by such proceeding can reasonably be
expected to be operated in a manner sufficient to conduct the Business in
substantially the same manner as conducted prior to such taking (as used in this
Section 9.4, the portion of the Xxxxxxxx Real Property affected by such a
proceeding is referred to as an "immaterial portion of the Real Estate"), or
(ii) the taking of an immaterial portion of the Real Estate by eminent domain
occurs prior to the Closing Date, then Buyer shall nevertheless be required to
purchase the Purchased Assets on the Closing Date and there shall be no
abatement of the Purchase Price, and Seller shall (i) assign to Buyer at the
Closing all rights of Seller to any condemnation proceeds, (ii) remit to Buyer
at Closing any such condemnation proceeds received by Seller after the date
hereof and prior to the Closing (less reasonable costs of collection and/or
restoration incurred by Seller prior to Closing), and (iii) remit to Buyer
promptly upon receipt any such condemnation proceeds received by Seller after
the Closing (which obligation shall survive the Closing). Buyer shall have the
right to participate fully in the condemnation proceeding so long as it pays for
its own attorney's fees and litigation expenses.
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(c) In the event that prior to the Closing proceedings are
instituted for the taking by eminent domain of all of the Xxxxxxxx Real
Property, or in the event of the taking by eminent domain of all of the Xxxxxxxx
Real Property prior to the Closing Date, then this Agreement shall terminate and
neither party shall have any further rights or obligations hereunder, other than
those which expressly survive the termination of this Agreement, and all
condemnation proceeds shall belong to Seller.
(d) In the event that prior to the Closing (i) proceedings are
instituted for the taking by eminent domain of more than an immaterial portion
of the Xxxxxxxx Real Property, or (ii) more than an immaterial portion of the
Xxxxxxxx Real Property is taken by eminent domain, then, in any such event,
Buyer shall have the right, exercisable by notice to Seller given within ten
business days after Buyer shall have received from Seller written notice of the
applicable proceedings, to terminate this Agreement and neither party shall have
any further rights or obligations hereunder, other than those which expressly
survive the termination of this Agreement. In the event that Buyer shall fail to
give timely such notice, Buyer shall be required to purchase the Purchased
Assets on the Closing Date and there shall be no abatement of the Purchase
Price, and Seller shall (i) assign to Buyer at the Closing all rights of Seller
to any condemnation proceeds (less reasonable costs of collection and/or
restoration incurred by Seller prior to Closing), (ii) remit to Buyer at Closing
any such condemnation proceeds received by Seller after the date hereof and
prior to the Closing, and (iii) remit to Buyer promptly upon receipt any such
condemnation proceeds received by Seller after the Closing (which obligation
shall survive the Closing).
ARTICLE 10
CERTAIN DEFINED TERMS
The following terms (in their singular and plural forms as appropriate) as
used in this Agreement shall have the meanings set forth below unless the
context requires otherwise:
"Affiliate" means, with respect to any Person, (i) any Person who directly
or indirectly, through one or more intermediaries, controls, or is controlled
by, or is under common control with, such Person or (ii) any Person who
beneficially owns or holds 10% or more of any class of voting securities of such
Person; provided, however, that Superior Essex, Inc. shall not be deemed to be
an Affiliate of Seller for any purpose under this Agreement. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Alpine" means The Alpine Group, Inc., a Delaware corporation.
"Agreement" means this Asset Purchase Agreement, including the Exhibits
and Schedules delivered pursuant hereto or referred to herein.
"Assumed Liabilities" means the following Liabilities of Seller relating
to the Business (other than Excluded Liabilities):
36
(i) Liabilities to be paid or performed for or with respect to
periods from and after the Closing Date under or pursuant to (A)
those certain Contracts of Seller that are listed in on Schedule AL
hereto and (B) the Interim Assumed Contracts; provided, however,
that Assumed Liabilities shall not include any Liabilities resulting
from or arising out of any Default by Seller prior to the Closing
Date under or with respect to any Contract;
(ii) Accrued PTO to the extent disclosed in Schedule 3.21 or
accrued since the date of this Agreement in the ordinary course of
business; and
(iii) accrued ad valorem taxes for 2005 not yet due and
payable with respect to items of both Real Property and Personal
Property that constitute part of the Purchased Assets;
(iv) all Liabilities arising on or after the Closing Date with
respect to Permitted Title Exceptions; and
(v) all obligations that arise after the Closing Date under
any License constituting a Purchased Asset.
Notwithstanding anything herein to the contrary, the term Assumed
Liability shall include Liabilities to make compensatory payments to
any Person party to a Distributor Contract included on Schedule AL
in respect of any goods shipped from and after the Closing Date and
without regard to the fact a commitment to sell such goods was
entered into prior to the Closing Date, provided that payment for
such goods is due and payable from the customer to Buyer.
"Assumed Liability Amount" means the amount of any Assumed Liability
properly included as a liability on a balance sheet prepared in accordance with
GAAP. Buyer and Seller agree that the only amount, if any, to be included in the
Assumed Liability Amount will be the amounts referred to in clauses (ii), (iii)
and (v) of the definition of Assumed Liabilities.
"Business" means Seller's electrical wire manufacturing and sales
business.
"Closing" means the consummation of the transactions contemplated by this
Agreement and shall be deemed to be effective as between the parties as of 11:59
p.m. Central Time on the Closing Date.
"Closing Date" means the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
"Contract" means any written or oral contract, agreement, understanding,
lease, usufruct binding, purchase order, license, commitment, arrangement,
obligation, undertaking of any kind or character or other document that is
binding on any Person or its assets.
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"Default" means (1) a breach of or default under any Contract or License,
(2) the occurrence of an event that with the passage of time or the giving of
notice or both would constitute such a breach or default, or (3) the occurrence
of an event that with or without the passage of time or the giving of notice or
both would give rise to a right to terminate, change the terms of, or
renegotiate, any Contract or License or to accelerate, increase, or impose any
Liability under any Contract or License.
"Distributor Contract" means any Contract with any sales representative,
distributor or dealer of Seller that relates to the Business.
"DOJ" means the Antitrust Division of the United States Department of
Justice.
"Employee Benefit Plans" means any "employee benefit plan" (as defined in
Section 3(3) of ERISA) or any other pension, retirement, profit-sharing,
compensation, stock option, share purchase, phantom stock, employee stock
ownership, severance or other termination pay, vacation, bonus, incentive,
medical, disability, vision, dental, insurance, cafeteria, flexible spending
account plan, or other employee or fringe benefit plan, or any other written or
unwritten trust fund, program, arrangement, agreement or understanding, whether
arrived at through collective bargaining or otherwise, that the Seller or any
ERISA Affiliate has at any time participated in, maintained or sponsored in
whole or in part or as to which Seller or any ERISA Affiliate has any Liability,
whether accrued, contingent or otherwise, for the benefit of current or former
employees, directors, officers, leased employees, independent contractors or
agents or their current or former spouses, dependents, or other beneficiaries.
"Environmental Claim" means any Litigation based upon, arising out of, or
otherwise in connection with, responsibility or Liability for investigatory
costs, cleanup costs, private or governmental response or remedial costs,
natural resources damages, property damages, personal injuries, or penalties
resulting from (i) any Environmental Matter, or (ii) any circumstances or state
of facts forming the basis of any Liability pursuant to, or in violation of, any
Environmental Law.
"Environmental Laws" means all Laws relating to pollution or protection of
human health or the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata), including,
without limitation, the Comprehensive Environmental Response Compensation and
Liability Act, as amended, 42 U.S.C. 9601 et seq. ("CERCLA"), the Resource
Conservation and Recovery Act as amended, 42 U.S.C. 6901 et seq. ("RCRA"), and
other Laws relating to emissions, discharges, releases or threatened releases of
any Hazardous Substance, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of any
Hazardous Substance.
"Environmental Liabilities" means any Liability relating to any
Environmental Matter existing on, in, under, at, or from the Purchased Assets or
with respect to the conduct of the Business, in each case, prior to the Closing
Date; provided, however, that each of (i) the soil condition referred to in the
Contamination Exclusion Endorsement in the Environmental Matters Insurance
Policy and (ii) Retained Fines and Penalties Liabilities shall be excluded from
the definition of Environmental Liabilities.
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"Environmental Matter" means any matter or circumstances related in any
manner whatsoever to (i) the emission, discharge, disposal, release or
threatened release of any Hazardous Substance into the environment in violation
of applicable Environmental Law, (ii) the treatment, storage, recycling or other
handling of any Hazardous Substance in violation of applicable Environmental
Law, (iii) the placement of structures or materials into waters of the United
States in violation of applicable Environmental Law, or (iv) the presence of any
Hazardous Substance, including, but not limited to, friable asbestos, in any
building, structure or workplace or on any Real Property in violation of
applicable Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that together with Seller is treated as a single employer pursuant
to Code sections 414(b), (c), (m) or (o).
"Excluded Assets" means the following assets, none of which are being
purchased by Buyer pursuant to this Agreement:
(i) all of Seller's cash, cash equivalents and accounts
receivable;
(ii) all leased Real Property of Seller, including leased Real
Property at Fort Xxxxx, Indiana, Ontario, California, McDonough,
Georgia, Xxxxxxx County, Indiana and elsewhere, together with all
Personal Property (other than the Idled Machinery and Equipment
identified on Schedule IPME) and leasehold improvements thereon;
(iii) the Real Property owned by Seller (A) at Jonesboro,
Indiana, Marion, Indiana and Orleans, Indiana, together with all
Personal Property (other than the Idled Machinery and Equipment)
thereon and (B) described as "TRACT ONE" on Schedule 3.8 hereto,
together with all Personal Property (other than any Idled Machinery
and Equipment) thereon;
(iv) all intangible rights and goodwill relating exclusively
to the assets retained by Seller and described in this definition;
(v) all income Tax Returns and all books, records, files and
papers maintained by Seller and used in the preparation thereof,
other than employee files, payroll records, customer contracts and
customer records;
(vi) all of Seller's contract and indemnification rights under
that certain Purchase Agreement, dated October 31, 2002, by and
among Superior TeleCom Inc., Superior Telecommunications Inc., Essex
International Inc., Essex Group, Inc., Alpine, and Alpine Holdco
Inc. (other than non-competition rights assigned to Buyer pursuant
to the Assignment of Non-Competition Rights executed and delivered
pursuant to Section 6.7);
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(vii) all rights of Seller under this Agreement and the Other
Agreements;
(viii) all rights to refunds, rebates or abatements of any
Taxes with respect to the Purchased Assets or the Business that
relate to any period ending on or prior to the Closing Date (unless
included in Prepaid Assets) and all rights to payments of any
insurance or condemnation proceeds with respect to the Xxxxxxxx
Manufacturing Facility paid prior to the Closing Date, subject to
Section 9.4;
(ix) all insurance policies of Seller;
(x) all Inventory of Seller other than the Purchased
Inventory;
(xi) all Prepaid Assets not included in the Purchased Assets;
(xii) any right, claim or cause of action of Seller or any of
its Affiliates against Third Parties relating to the assets,
properties, business or operations of the Business arising out of or
relating to transactions occurring prior to the Closing Date,
including, without limitation, certain claims against Third Parties
arising under existing copper price fixing litigation;
(xiii) copies of all books, records, files and papers
maintained by Seller relating to the Business which Seller is
required to retain pursuant to any applicable record retention
requirement or policy or is reasonably deemed necessary or
appropriate by Seller to retain in accordance with prudent business
practices;
(xiv) the assets of any Employee Benefit Plan maintained by
Seller for the benefit of the employees of the Business or to which
Seller has made any contribution;
(xv) the assets and properties used in the Business which are
disposed of subsequent to the date of this Agreement, provided such
disposition is made in accordance with the terms hereof;
(xvi) all rights of Seller arising on or prior to the Closing
Date against suppliers of the Inventory not included in the
Purchased Assets, including, without limitation, Seller's rights to
receive refunds or rebates in connection with its purchase of such
Inventory;
(xvii) all books, records, files and papers maintained by
Seller pertaining exclusively to the Excluded Liabilities;
(xviii) all rights of Seller arising under any management
and/or administrative services agreements between Seller and any of
its Affiliates;
40
(xix) all rights of Seller under the employment agreements
referred to in clause (iv) of the definition of Excluded Liabilities
as well as all other employment agreements to which Seller or any
other parent company of Seller is a party; and
(xx) all rights of Seller under any Contract disclosed on
Schedules 3.18(a)(i) - (vi) which is not included on Schedule AL.
"Excluded Liabilities" means any Liability of Seller which is not
specifically an Assumed Liability. Without limiting the generality of the
foregoing, "Excluded Liabilities" means:
(i) any Liability for any trade or other account payable of
Seller;
(ii) any Liability that accrued or arose out of or in
connection with the Business for any period prior to the Closing
Date;
(iii) any Liability for any Taxes of Seller or any Affiliate;
(iv) any Liability of Seller under or pursuant to any Contract
of Seller not expressly and specifically assumed by Buyer
(including, without limitation, (A) that certain Amended and
Restated Employment Agreement, dated as of December 11, 2002,
between Essex Electric Inc. and Xxxxxx X. Xxxx and (B) that certain
Employment Agreement, dated May 13, 2003, between Essex Electric
Inc. and Xxxxx X. Xxxx);
(v) any Liability of Seller or any Affiliate under any
indebtedness;
(vi) any Liability of Seller for any compensation owed to any
of the Xxxxxxxx Employees for any period prior to the Closing, other
than any amount payable (A) by Buyer to Seller pursuant to Section
5.8, (B) solely as a result of the termination of any Xxxxxxxx
Employee on the Closing Date or by Buyer after the Closing Date or
(C) solely in respect of Accrued PTO included in the Assumed
Liabilities;
(vii) any Liability pursuant to any Employee Benefit Plan,
including Liability under ERISA, the Code or otherwise with respect
to continuation of coverage under any group health plan maintained
by Seller with respect to any Person employed or previously employed
by Seller or his dependents or beneficiaries other than in respect
of Accrued PTO included in the Assumed Liabilities;
(viii) any Liability of Seller to pay any sum due to any
current or former director, officer, employee, leased employee,
independent contractor, agent or Affiliate of Seller, including
bonuses or other compensation on account of the transactions
contemplated by this Agreement, except as otherwise provided in this
Agreement;
41
(ix) any claim by any broker, finder or other Person employed
or allegedly employed by Seller or any Affiliate in connection with
the transactions contemplated by this Agreement;
(x) any Liability to any Third Party pursuant to, or for
breach or violation of, any bulk sales, fraudulent conveyance or
other similar Law of any jurisdiction that may be asserted against
Seller, the Purchased Assets or Buyer as a consequence of the
transactions contemplated by this Agreement;
(xi) any Liability to any Person for or with respect to any
Litigation relating to the Business or the Purchased Assets now
existing or hereafter arising with respect to or in connection with
any matter or thing that occurred, accrued or arose prior to the
Closing Date (even if claimed, brought or filed after the Closing
Date);
(xii) any Liability of Seller relating to any Excluded Asset;
(xiii) any Environmental Liability;
(xiv) any Retained Fines and Penalties Liabilities;
(xv) any Liability to any Third Party not covered by the
Environmental Matters Insurance Policy and resulting solely from
Seller's inability to provide confirmatory sampling results which
would result in the Contamination Exclusion Endorsement in the
Environmental Matters Insurance Policy becoming inapplicable in
accordance with its terms;
(xvi) any Liability with respect to any product manufactured
or sold by Seller or any of its Affiliates; and
(xvii) any Liability for worker's compensation, medical and
hospitalization claims, or other employment related claims based
upon events occurring prior to the Closing Date, except as otherwise
provided in this Agreement.
"Florence Employees" means all of Seller's employees who are employed, as
of the Closing, by Seller in Florence, Alabama in connection with the conduct of
the Business (including any employee on short or long-term disability, military
leave or other approved leave of absence).
"Xxxxxxxx Manufacturing Facility" means the Xxxxxxxx Real Property and all
right, title and interest of Seller in and to all Personal Property contained
thereon.
"Florence Real Property" means Seller's fee simple interest in the land
located in Florence, Alabama described as TRACT TWO in Schedule 3.8 hereto and
all of Seller's right, title and interest in any other Real Property located on
or appurtenant to such land.
"FTC" means the United States Federal Trade Commission.
42
"GAAP" means United States generally accepted accounting principles
consistently applied.
"General Claim" means any claim based upon, arising out of, or otherwise
in respect of any inaccuracy in any representation or warranty made by Seller or
Buyer pursuant to this Agreement, provided that a "General Claim" shall not
include any Ownership Claim.
"Governmental Authority" means any federal, state, county, local, foreign
or other governmental or public agency, instrumentality, commission, authority,
board or body.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
15 U.S.C.A. ss. 18(a), as amended, and all Laws promulgated thereunder.
"Hazardous Substance" means (i) any hazardous substance, hazardous
material, hazardous waste, regulated substance or toxic substance (as those
terms are defined by any applicable Environmental Laws) and (ii) any chemicals,
pollutants, contaminants, petroleum, petroleum products, lead-based paint, or
oil regulated under Environmental Law.
"Idled Production Machinery and Equipment" means any idled production
machinery and equipment and distribution and storage equipment owned by Seller
used or previously used that is not located in Florence, Alabama but which is
related to the Business and identified by location on Schedule IPME.
"Intellectual Property" means (i) patents and pending patent applications
together with any and all continuations, divisions, reissues, extensions and
renewals thereof, (ii) trade secrets, know-how, inventions, formulae and
processes, whether trade secrets or not, (iii) trade names, trademarks, service
marks, logos, assumed names, brand names, domain names and all registrations and
applications therefor together with the goodwill of the business symbolized
thereby, (iv) copyrights and any registrations and applications therefor, (v)
technology rights and licenses, (vi) customer and supplier lists and files,
mailing lists, sales literature, marketing data and promotional materials and
(vii) computer software and all other intellectual property, in each case owned
by, registered in the name of, or used in the business of a Person or in which a
Person or its business has any interest.
"Interim Assumed Contracts" means the following Contracts that are entered
into by Seller after the date of this Agreement in the ordinary course of
business consistent with past practice and not in violation of Section 5.1:
(i) any Contract of the type described on Schedule 3.18(a)(i)
that (A) does not require the acquisition of goods or services in
excess of a six-week supply and (B) is terminable without penalty on
no more than 60 days notice;
(ii) any Contract of the type described on Schedule
3.18(a)(ii) (including purchase orders (whether or not in excess of
$50,000)) that (A) does not require the delivery of products or the
performance of services more than 60 days after the Closing Date and
(B) is subject to a hedging Contract that is unconditionally
assignable to, and assumable by, Buyer if the Contract requires the
delivery of products or the performance of services after the
Closing Date in excess of $100,000;
43
(iii) any Contract of the type described on Schedule
3.18(a)(v) with respect to Personal Property required to replace
comparable Personal Property included in Schedule 3.18(a)(v) that
does not require payments after the Closing Date of more than $2,000
per month;
(iv) any Contract of the type described on Schedule
3.18(a)(vi) (specifically excluding any Contract of the type
described on Schedules 3.18(a)(i), 3.18(a)(ii), 3.18(a)(iii) or
3.18(a)(iv) or 3.18(v)) that (A) is terminable without penalty on no
more than 60 days notice and (B) does not require payments after the
Closing Date of more than $5,000 per month.
"Inventory" means all inventories of raw materials, supplies, purchased
parts to be incorporated in finished products, work-in-process, finished
products, packaging materials and other inventories.
"knowledge," with respect to any Person, means such information actually
known by such Person or which such Person upon the making of "reasonable
inquiry" would have discovered; provided, however, with respect to Seller,
"knowledge" shall refer to such information actually known or which upon
reasonable inquiry (which, for purposes hereof, shall mean that Seller shall
have caused the following persons to review this Agreement or, if applicable,
only the provisions thereof reasonably related to such persons' job function)
would have been discovered by Xxxxxx X. Xxxxxx, X. Xxxxxxxx Posner, Xxxxxxx
Xxxxxxxxx, Xxxx Xxxxx, Xxxxx Xxxx, Xxxxxx Xxxx, Xxx Xxxxx (i.e., Director of
Manufacturing), Xxxx Xxxxxxx (i.e., Engineer/QA Manager) and Xxxx Xxxxxxx (i.e.,
Operations Manager).
"Law" means any code, law, order, ordinance, regulation, rule or statute
of any Governmental Authority.
"Liability" means any direct or indirect, primary or secondary, liability,
indebtedness, obligation, penalty, expense (including, without limitation, costs
of investigation, collection and defense), claim, deficiency, guaranty or
endorsement of or by any Person (other than endorsements of notes, bills and
checks presented to banks for collection or deposit in the ordinary course of
business) of any type, whether accrued, absolute, contingent, liquidated,
unliquidated, matured, unmatured or otherwise. Without limiting the generality
of the foregoing, "Liability" shall mean any claim made by a Person to whom
Seller, prior to Closing, sold or delivered goods or rendered services whether
or not such Person would have the legal right validly to assert such claim
against Buyer.
"License" means any license, franchise, notice, permit, easement, right,
certificate, authorization, approval or filing that is binding on any Person or
its assets.
44
"Lien" means any mortgage, lien, security interest, pledge, hypothecation,
encumbrance, lis pendens, encroachment, conditional sale agreement, title
retention or other security arrangement of any nature whatsoever of, on, or with
respect to any property or property interest.
"Litigation" means any lawsuit, action, claim, arbitration or other legal
proceeding or Order and written notices threatening or advising as to any of the
foregoing.
"Loss" means any loss, Liability, obligation, claim, demand, lawsuit,
action, assessment, damage including punitive, exemplary or consequential
damages (including lost income and profits and interruptions of business),
liabilities, costs, expenses (including without limitation, (i) interest,
penalties, fines, and reasonable attorneys' fees and expenses, (ii) reasonable
attorneys' fees and expenses incurred to enforce rights to indemnification
hereunder and (iii) consultant's fees and other costs of defense or
investigation), and interest on any amount payable to a Third Party as a result
of the foregoing, in each case whether accrued, absolute, contingent, known,
unknown, or otherwise as of the Closing Date or thereafter; provided, however,
in no event shall the term "Loss" include any insurance premium paid by any of
the parties hereto to any insurance carrier, or any deductible or self insured
retention amount incurred or attributable to any insurance policy held by any
party hereto.
"Material" or "Materially" shall be determined in light of the facts and
circumstances of the matter in question as it relates to the Person involved in
or making assertions with respect to such matter considered as a whole;
provided, however, that any specific monetary amount cited in this Agreement
shall be deemed to determine materiality in that instance.
"Material Adverse Change" or "Material Adverse Effect" means, with respect
to any Person, any Material adverse change in or effect upon (i) the business,
operations, assets, Liabilities, condition (financial or otherwise) or results
of operations of such Person, (ii) the ability of such Person to consummate the
transactions contemplated by this Agreement or any of the Other Agreements to
which it is or will be a party, or (iii) the ability of such Person to perform
its obligations under this Agreement or any of the Other Agreements to which it
is or will be a party. Notwithstanding the foregoing, a Material Adverse Change
or Material Adverse Effect shall not include any adverse effect attributable to
(x) a decline in general economic or business conditions, (y) a decline or
change in general industry conditions or (z) the announcement or consummation of
the transactions contemplated by this Agreement.
"Order" means any decree, injunction, judgment, order, ruling, writ,
quasijudicial decision or award or administrative decision or award of any
federal, state, local, foreign or other court, arbitrator, mediator, tribunal,
administrative agency or Governmental Authority to which any Person is a party
or that is or may be binding on any Person or its securities, assets or
business.
"Ordinary Contracts Requiring Consent" means any Contract that is included
in the Assumed Liabilities other than (i) any Contract listed on Schedule 6.19
and (ii) any purchase order that was received and accepted in the ordinary
course of business.
45
"Other Agreements" means the agreements, documents, assignments and
instruments to be executed and delivered by Seller or Buyer pursuant to this
Agreement.
"Ownership Claim" means any claim arising out of or in respect of any
inaccuracy in any representation or warranty made by Seller in Section 3.5.
"Permitted Liens" means (i) Permitted Title Exceptions, (ii) Liens, if
any, relating to Buyer's financing to which the Purchased Assets are
contemplated to be subject at Closing, (iii) Liens for current real property
Taxes not yet due and payable, (iv) such encumbrances, if any, that, in the
aggregate do not materially and adversely detract from the value or materially
and adversely interfere with the present use of the Xxxxxxxx Real Property, and
(v) any other Liens specifically approved in writing by Buyer.
"Person" means a natural person or any legal, commercial or governmental
entity, such as, but not limited to, a corporation, general partnership, joint
venture, limited partnership, limited liability company, trust, business
association or any person acting in a representative capacity.
"Personal Property" means all of the personal property or interests
therein owned, leased, used or controlled by a Person including, without
limitation, machinery, dies, tools, spare parts, equipment (including office
equipment and supplies), furniture, furnishings, fixtures, motor vehicles,
forklifts and other rolling stock, leasehold improvements and all other tangible
personal property other than Inventory (which is specifically excluded from this
definition of Personal Property).
"Prepaid Assets" means all deposits, prepaid sums, fees and expenses
(including, without limitation, rental fees, utility charges and service
charges), retainages, escrows, monies and assets held by Third Parties, and
deferred charges, as the same exist as of the Closing Date.
"Prepaid Assets Amount" means the value of the portion of the Prepaid
Assets useable by Buyer for periods after the Closing.
"Prime Rate" means the prime rate as published in the "Money Rates" table
of The Wall Street Journal on the Closing Date or the first publication date
following the Closing Date.
"Purchased Assets" means all of the following assets, properties and
rights of Seller (other than the Excluded Assets) in existence on the date
hereof and any additions thereto on or before the Closing Date, whether or not
carried on the books and records of Seller, and whether or not owned in the name
of Seller or any Affiliate of Seller and wherever located:
(xxi) all Purchased Inventory;
(xxii) the Xxxxxxxx Manufacturing Facility;
(xxiii) all Idled Production Machinery and Equipment;
46
(xxiv) all Intellectual Property of the Business (including,
without limitation, DIAMOND(R), HANDIWIRE(R), DIAMOND GEM(R) and all
other Intellectual Property set forth on Schedule 3.11);
(xxv) all intangibles and goodwill of the Business;
(xxvi) all Prepaid Assets relating to the Business (but only
to the extent of the Prepaid Assets Amount);
(xxvii) all rights under Contracts relating to the Business;
(xxviii) to the extent transferable, all Licenses, industry
certifications and listings (including ETL, UL and CSA
certifications and listings) relating to the Business;
(xxix) all Personal Property relating to the Business;
(xxx) all original documents, books and records pertaining to
the Business (except minute books and stock records) and to the
Purchased Assets and the Assumed Liabilities that are legally
significant or useful to the Business (including those relating to
the Xxxxxxxx Employees) and copies of all other documents, books and
records pertaining to the Business, the Purchased Assets and the
Assumed Liabilities, other than (i) the financial statements of
Seller, (ii) income Tax Returns and related books and records of
Seller and (iii) all documents, books and records relating to the
Excluded Assets and the Excluded Liabilities;
(xxxi) to the extent transferable, the Exemption; and
(xxxii) all other assets of the Business (other than the
Excluded Assets).
"Purchased Inventory" means all Inventories of the Business, except (i)
scrap Inventory at Seller's Jonesboro, Indiana scrap reclamation plant; (ii) raw
materials at Seller's Marion, Indiana Compound Fabrication Plant; and (iii)
finished goods which are (A) not first quality (with "first quality" defined as
those that are in accordance with Seller's existing specifications) or (B) in a
quantity in excess of Seller's actual sales quantity for each unique stock
keeping unit for the (x) 12-month period prior to Closing, in the case of
Inventories manufactured by Seller and (y) the 24-month period prior to Closing,
in the case of Inventories not manufactured by Seller.
"Purchased Inventory Amount" means the value of the Purchased Inventory at
Closing, calculated at the lower of cost or market value, with the copper
content of Purchased Inventory valued using the average of the daily closing
prices of copper cathode on the COMEX for the 30- day period immediately
preceding the Closing Date in accordance with the Agreed Upon Procedures and
with the amount paid by Buyer for Purchased Inventory not manufactured by Seller
not exceeding $2,137,000 (as adjusted to reflect increases or decreases in the
copper component thereof).
47
"Qualified as to Materiality Representations" means the portions of the
representations and warranties made in Section 3.6, 3.7, 3.8, 3.11, 3.14, 3.15,
3.19 and 3.23 which are qualified or modified by the word or words "Material,"
"Materially," "Material Adverse Change," "Material Adverse Effect" or any
derivation thereof.
"Real Property" means any interest in real estate or real property
whatsoever including (i) leases, licenses, usufructs and other possessory
rights, (ii) easements, appurtenances, privileges and other benefits belonging
or appertaining thereto which run with said real property, (iii) any award made
with respect to such real estate, (iv) all land beds in streets, strips and
rights-of-way abutting or adjoining said real property, if any, and (v) all
buildings, structures, fixtures and other improvements located thereon.
"Retained Fines and Penalties Liabilities" means all fines and penalties
imposed prior to the Closing Date, or which are imposed after the Closing Date,
that relate to a violation of, or non-compliance with, any Environmental Laws,
but only to the extent such violation or non-compliance occurred prior to the
Closing Date.
"Severance Obligations" means the amount of the severance pay that is
actually paid or payable in accordance with Seller's written severance policy
disclosed in Schedule 3.17(d) in effect on the date of this Agreement to, or on
behalf of, any Xxxxxxxx Employee whose employment is terminated by Seller as of
the Closing Date because of the transactions contemplated by this Agreement;
provided, however, that "Severance Obligations" shall not include (A) any
severance pay or other amount owed pursuant to any Liability that is an Excluded
Liability, (B) WARN Obligations (but such exclusion shall not change Buyer's
obligations under Section 5.9 hereof) or (C) any amount paid or payable by
Seller with respect to which the Xxxxxxxx Employee has executed a waiver
provided by Buyer pursuant to Section 5.8(a) unless it is determined that such
waiver is unenforceable, in which case, this clause (C) shall be deemed
inapplicable for all purposes hereof.
"Tax" or "Taxes" means any federal, state, county, local, foreign and
other taxes, assessments, charges, fees, and impositions, including interest and
penalties thereon or with respect thereto, whether disputed or not.
"Tax Returns" means all returns, reports, filings, declarations and
statements relating to Taxes that are required to be filed, recorded, or
deposited with any Governmental Authority, including any attachment thereto or
amendment thereof.
"Third Party" or "Third Parties" means any Person that is not Buyer or
Seller, or an Affiliate of Buyer or Seller.
"Utility Letter of Credit" means the Standby Letter of Credit issued by
Xxxxx Fargo Bank, N.A. in the amount of $158,000 in favor of Xxxxxxxx Utilities
to secure Seller's payment of utilities costs of the Xxxxxxxx Manufacturing
Facility.
"WARN Act" means the Worker Adjustment and Retraining Notification Act, 29
U.S.C. ss. 2101 et. seq., as amended, and all Laws promulgated thereunder.
48
ARTICLE 11
MISCELLANEOUS
11.1 Notices.
(a) All notices, requests, demands and other communications
hereunder shall be (i) delivered by hand, (ii) sent by overnight courier service
or (iii) sent by facsimile and, in each case, addressed as follows:
If to Seller: Essex Electric Inc.
c/o Alpine Holdco Inc.
Xxx Xxxxxxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xx. X. Xxxxxxxx Posner
Fax: (000) 000-0000
with copies to: Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
If to Buyer: Southwire Company
Xxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
with copies to: Xxxxxxxxxx Xxxxxx & Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
Fax: (000) 000-0000
(b) All notices, requests, instructions or documents given to any
party in accordance with this Section 11.1 shall be deemed to have been given
(i) on the date of receipt, if delivered by hand or if sent by facsimile or (ii)
on the next business day, if sent by overnight courier.
(c) Any party hereto may change its address specified for notices
herein by designating a new address by notice given in accordance with this
Section 11.1.
49
11.2 Entire Agreement. This Agreement, the Schedules, the Exhibits and the
Other Agreements constitute the entire agreement between the parties relating to
the subject matter hereof and thereof and supersede all prior oral and written,
and all contemporaneous oral negotiations, discussions, writings and agreements
relating to the subject matter of this Agreement. Notwithstanding anything
herein to the contrary, the Non-Disclosure Agreement shall remain in full force
and effect in accordance with its terms, but shall expire, if at all,
concurrently with the consummation of the Closing.
11.3 Modifications, Amendments and Waivers.
(a) At any time prior to or subsequent to the Closing, the parties
hereto may, by mutual written agreement and in no other manner, (a) extend the
time for the performance of any of the obligations or other acts of the parties
hereto other than the conditions contained in Articles 6 and 7, the time for
completion of which may be extended unilaterally or which may be waived
unilaterally by Buyer and Seller, respectively, (b) waive any inaccuracies in
the representations and warranties contained in this Agreement or in any
document delivered pursuant hereto, (c) waive compliance with any of the
covenants or agreements contained in this Agreement or (d) make any other
modifications of this Agreement approved by each of the parties hereto.
(b) The failure or delay of any party at any time or times to
require performance of any provision of this Agreement shall in no manner affect
its right to enforce that provision. No single or partial waiver by any party of
any condition of this Agreement, or the breach of any term, agreement or
covenant or the inaccuracy of any representation or warranty of this Agreement,
whether by conduct or otherwise, in any one or more instances shall be construed
or deemed to be a further or continuing waiver of any such condition, breach or
inaccuracy or a waiver of any other condition, breach or inaccuracy.
11.4 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of and be enforceable by the parties hereto, and
their respective successors and assigns, but no assignment shall relieve any
party of the obligations hereunder. This Agreement cannot be assigned by any
party without the prior written consent of the other parties hereto, except that
Buyer may assign this Agreement and its rights hereunder to any of its lenders
as collateral security, such assignment of rights to be subject to any and all
restrictions and limitations herein.
11.5 Table of Contents; Captions; References. The table of contents and
the captions and other headings contained in this Agreement as to the contents
of particular articles, sections, paragraphs or other subdivisions contained
herein are inserted for convenience of reference only and are in no way to be
construed as part of this Agreement or as limitations on the scope of the
particular articles, sections, paragraphs or other subdivisions to which they
refer and shall not affect the interpretation or meaning of this Agreement. All
references in this Agreement to "Section" or "Article" shall be deemed to be
references to a Section or Article of this Agreement.
11.6 Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the substantive Laws of the State of Delaware,
without regard to choice of Law rules.
50
11.7 Consent to Jurisdiction. Any claim or proceeding brought with respect
to this Agreement must be brought in any court of competent jurisdiction in the
State of Delaware and, by execution and delivery of this Agreement, each party
(a) accepts, generally and unconditionally, the exclusive jurisdiction of such
courts and any related appellate court, and irrevocably agrees to be bound by
any judgment rendered thereby in connection with this Agreement and (b)
irrevocably waives any objection it may now or hereafter have as to the venue of
any such suit, action or proceeding brought in such a court or that such court
is an inconvenient forum.
11.8 Pronouns. All pronouns used herein shall be deemed to refer to the
masculine, feminine or neuter gender as the context requires.
11.9 Severability. Should any one or more of the provisions of this
Agreement be determined to be invalid, illegal or unenforceable in any respect,
the validity and enforceability of the remaining provisions hereof shall not in
any way be affected or impaired thereby.
11.10 Remedies Not Exclusive. Except as otherwise provided in Sections 1.4
and 8.10, no remedy conferred by any of the specific provisions of this
Agreement is intended to be, nor shall be, exclusive of any other remedy
available at law, in equity or otherwise.
11.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of such counterparts
shall together constitute one and the same instrument.
11.12 Interpretations. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against Buyer or Seller, whether
under any rule of construction or otherwise. No party to this Agreement shall be
considered the draftsman. On the contrary, this Agreement has been reviewed,
negotiated and accepted by all parties and their attorneys and shall be
construed and interpreted according to the ordinary meaning of the words used so
as fairly to accomplish the purposes and intentions of all parties hereto.
11.13 No Intention to Benefit Third Parties. Except as set forth in
Article 8, this Agreement is not intended to, and shall not, (i) benefit any
Person other than the parties who are signatories hereto or (ii) create any
third party beneficiary right in any Person.
51
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement as of the date first above written.
SELLER:
ESSEX ELECTRIC INC.
By: /s/ X. Xxxxxxxx Posner
-------------------------------------
Name: X. Xxxxxxxx Posner
Title: Executive Vice President
BUYER:
SOUTHWIRE COMPANY
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President and President,
Electrical Division
52
