Exhibit 2.2
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ASSET PURCHASE AGREEMENT
BY AND AMONG
XXXXXX WIRE COMPANY,
THE BRANFORD WIRE AND MANUFACTURING COMPANY,
CAROLINA INDUSTRIES, INC.,
AND
XXXXXXX XXXXXX
DATED AS OF OCTOBER 28, 2004
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TABLE OF CONTENTS
PAGE
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ARTICLE I. DEFINITIONS................................................................................1
ARTICLE II. SALE AND PURCHASE..........................................................................7
Section 2.01. Transfer of Assets.........................................................................7
Section 2.02. Sale Free of Encumbrances..................................................................7
Section 2.03. Certain Excluded Assets....................................................................7
Section 2.04. No Assumption of Liabilities...............................................................8
Section 2.05. Subsequent Documentation...................................................................8
Section 2.06. Post-Closing Adjustments to Purchased Inventory............................................8
ARTICLE III. PURCHASE PRICE.............................................................................9
Section 3.01. Purchase Price and Payment.................................................................9
Section 3.02. Fair Consideration.........................................................................9
Section 3.03. Allocation of the Purchase Price...........................................................9
Section 3.04. Taxes.....................................................................................10
ARTICLE IV. CLOSING...................................................................................10
Section 4.01. Closing Date..............................................................................10
Section 4.02. Deliveries by Sellers.....................................................................10
Section 4.03. Deliveries by Buyer.......................................................................11
Section 4.04. Possession of Acquired Assets.............................................................12
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF SELLERS AND HARCKE......................................12
Section 5.01. Organization; Power.......................................................................12
Section 5.02. Authorization and Validity of Agreement...................................................12
Section 5.03. No Conflict or Violation..................................................................13
Section 5.04. Consents and Approvals....................................................................13
Section 5.05. Financial Statements......................................................................13
Section 5.06. Absence of Certain Changes or Events......................................................14
Section 5.07. Tax Matters...............................................................................14
Section 5.08. Absence of Undisclosed Liabilities........................................................15
Section 5.09. Real Property.............................................................................15
Section 5.10. Conformity of the Real Property...........................................................16
Section 5.11. Equipment and Machinery...................................................................16
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Section 5.12. Intellectual Property and Software........................................................16
Section 5.13. Accounts Receivable.......................................................................17
Section 5.14. Employee Benefit Plans....................................................................17
Section 5.15. Labor Relations...........................................................................18
Section 5.16. Environmental Compliance..................................................................18
Section 5.17. Licenses and Permits......................................................................19
Section 5.18. Insurance; Bonds..........................................................................19
Section 5.19. Assigned Contracts........................................................................19
Section 5.20. Customers.................................................................................19
Section 5.21. Compliance with Law.......................................................................19
Section 5.22. Litigation................................................................................20
Section 5.23. Title to the Acquired Assets and Related Matters..........................................20
Section 5.24. Absence of Certain Business Practices.....................................................20
Section 5.25. No Other Agreements to Sell Assets........................................................20
Section 5.26. Debts of Branford.........................................................................20
Section 5.27. Due Diligence.............................................................................20
Section 5.28. Broker's and Finder's Fees................................................................21
Section 5.29. All Material Information..................................................................21
Section 5.30. Sellers and Harcke Independently Advised..................................................21
Section 5.31. Condition of Acquired Assets..............................................................21
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF BUYER...................................................21
Section 6.01. Organization; Power.......................................................................21
Section 6.02. Authorization and Validity of Agreement...................................................21
Section 6.03. No Conflict or Violation..................................................................21
Section 6.04. Approvals and Consents....................................................................22
Section 6.05. Broker's and Finder's Fees................................................................22
ARTICLE VII. COVENANTS OF SELLERS AND HARCKE...........................................................22
Section 7.01. Regulatory and Other Approvals............................................................22
Section 7.02. Fulfillment of Conditions.................................................................22
Section 7.03. Conduct of Business.......................................................................23
Section 7.04. Certain Restrictions......................................................................23
Section 7.05. No Solicitation...........................................................................24
Section 7.06. Use of Names..............................................................................24
Section 7.07. Post-Closing Operations...................................................................25
Section 7.08. Notification..............................................................................25
ARTICLE VIII. COVENANTS OF BUYER........................................................................25
Section 8.01. Access....................................................................................25
Section 8.02. Fulfillment of Conditions.................................................................25
Section 8.03. Employee Matters..........................................................................26
Section 8.04. Assumed Liabilities.......................................................................27
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ARTICLE IX. CONDITIONS TO OBLIGATIONS OF BUYER........................................................27
Section 9.01. Representations and Warranties............................................................27
Section 9.02. Performance...............................................................................27
Section 9.03. Closing Deliveries........................................................................27
Section 9.04. Laws......................................................................................27
Section 9.05. Regulatory Consents and Approvals.........................................................27
Section 9.06. No Material Adverse Change................................................................27
Section 9.07. Balance Sheet.............................................................................27
Section 9.08. Bulk Sales Compliance.....................................................................27
Section 9.09. Approval of Board of Directors............................................................28
ARTICLE X. CONDITIONS TO OBLIGATIONS OF SELLERS AND HARCKE...........................................28
Section 10.01. Representations and Warranties............................................................28
Section 10.02. Performance...............................................................................28
Section 10.03. Laws......................................................................................28
Section 10.04. Regulatory Consents and Approvals.........................................................28
ARTICLE XI. EXCESS INVENTORY..........................................................................28
Section 11.01. Procedures for Storage and Disposition of Excess Inventory................................28
Section 11.02. Compliance................................................................................30
Section 11.03. Sales Efforts.............................................................................30
Section 11.04. Offset of Returns for Credit..............................................................30
ARTICLE XII. OTHER AGREEMENTS..........................................................................30
Section 12.01. Tax Returns; Cooperation on Tax Matters...................................................30
Section 12.02. Files and Records.........................................................................31
Section 12.03. Certain Costs.............................................................................31
Section 12.04. Payment of Debts..........................................................................31
Section 12.05. Collection of Certain Accounts Receivable.................................................31
Section 12.06. Costs of Clean-up of PCP Contamination....................................................32
ARTICLE XIII. INDEMNIFICATION...........................................................................32
Section 13.01. Survival..................................................................................32
Section 13.02. Indemnification by Sellers................................................................32
Section 13.03. Indemnification by Buyer..................................................................33
Section 13.04. Procedure.................................................................................34
Section 13.05. Buyer Right to Offset.....................................................................34
ARTICLE XIV. TERMINATION...............................................................................34
Section 14.01. Termination...............................................................................34
Section 14.02. Effect of Termination.....................................................................35
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ARTICLE XV. MISCELLANEOUS.............................................................................35
Section 15.01. Confidential Information..................................................................35
Section 15.02. Public Announcements......................................................................35
Section 15.03. Expenses..................................................................................35
Section 15.04. Utilities Proration.......................................................................35
Section 15.05. Reasonable Efforts; Cooperation...........................................................36
Section 15.06. Notices...................................................................................36
Section 15.07. Headings..................................................................................36
Section 15.08. Construction..............................................................................36
Section 15.09. Severability..............................................................................37
Section 15.10. Entire Agreement..........................................................................37
Section 15.11. Amendments; Waivers.......................................................................37
Section 15.12. Parties in Interest.......................................................................37
Section 15.13. Successors and Assigns....................................................................38
Section 15.14. Governing Law; Jurisdiction...............................................................38
Section 15.15. Counterparts..............................................................................38
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ASSET PURCHASE AGREEMENT
THIS
ASSET PURCHASE AGREEMENT ("AGREEMENT"), dated as of October 28, 2004
(the "EFFECTIVE DATE"), is made and entered into by and among Xxxxxx Wire
Company, a Delaware corporation ("BUYER"), The Branford Wire and Manufacturing
Company, a Connecticut corporation ("BRANFORD"), Carolina Industries, Inc., a
Connecticut corporation ("CAROLINA INDUSTRIES") (Branford and Carolina
Industries, collectively, "SELLERS") and Xxxxxxx Xxxxxx ("HARCKE").
WITNESSETH:
WHEREAS, Sellers are engaged in the business of owning and operating a wire
manufacturing business (the "BUSINESS"); and
WHEREAS, Buyer desires to purchase from Sellers, and Sellers desire to sell
to Buyer, the Acquired Assets, as hereinafter defined, upon the terms and
subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
representations, warranties, covenants, and agreements herein contained and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound, the parties hereto agree
as follows:
AGREEMENT
ARTICLE I.
DEFINITIONS
As used in this Agreement, the following terms have the meanings indicated
below:
"ACCOUNTS RECEIVABLE" means all accounts and notes receivable, rights to
refunds, and deposits of any kind of Branford other than Excluded Accounts
receivable and Uncollectible Accounts Receivable.
"ACQUIRED ASSETS" means the Accounts Receivable, Assigned Contracts,
Equipment and Machinery, Files and Records, Intangible Assets, Intellectual
Property, Licenses and Permits, Miscellaneous Assets, Purchased Inventory, Real
Property, exclusive use of the names "Branford Wire and Manufacturing Company"
and "B&S Wire Rod Sales" and all other assets of Branford as of the Closing Date
(including all such items shown or reflected in the Closing Balance Sheet of the
Seller, with additions thereto, net of dispositions in the ordinary course of
the Business, since the Balance Sheet Date), of every kind, nature, character,
and description, whether real, personal or mixed, whether accrued, contingent or
other, and wherever situated, and whether or not reflected in any financial
statement of Branford, used or useful in conducting the Business
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including, without limitation, those listed on SCHEDULE 1.01 hereto, but
excluding all of the Excluded Assets.
"ACQUIRED WORKING CAPITAL" means, as of any date of determination, an
amount equal to the sum of (i) Sellers' Accounts Receivable PLUS (ii) Sellers'
Inventory (other than Excess Inventory), in each case as reflected on Seller's
balance sheet prepared in accordance with past practice.
"AFFILIATE" means any person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, a specified Person or which together with a specified Person is a member
of a controlled group (within the meaning of Code Section 1563(a) determined
without regard to Sections 1563(a)(4) and 1563(e)(3)(C)) of the Code.
"ASSIGNED CONTRACTS" means the leases, contracts, agreements and
arrangements assigned to Buyer by Seller hereunder and set forth in SCHEDULE
1.02.
"ASSUMED LIABILITIES" has the meaning specified in SECTION 2.04.
"BALANCE SHEET DATE" means September 30, 2004 (the date of the Interim
Balance Sheet).
"BRANFORD" has the meaning set forth in the introductory paragraph hereto.
"BRANFORD'S BENEFIT OBLIGATIONS" means all obligations, arrangements or
customary practices (other than those contained in or provided under Branford's
Plans), whether or not legally enforceable, to provide benefits (other than
salary or wages) to present or former directors, employees, or agents of
Branford. Branford's Benefit Obligations also includes consulting agreements
under which the compensation paid does not depend upon the amount of service
rendered, sabbatical policies, severance payment policies and fringe benefits
within the meaning of Section 132 of the Code.
"BRANFORD'S PLANS" means each voluntary employees' beneficiary association
under Section 501(c)(9) of the Code whose members include employees of Branford
and all employee benefit plans, as defined in Section 3(3) of ERISA, to which
Branford is a plan sponsor, as defined in Section 3(16)(B) of ERISA, or to which
Branford otherwise contributes or has contributed, or in which Branford
otherwise participates or has participated.
"BUSINESS" has the meaning set forth in the recitals hereto.
"BUSINESS DAY" means any day that the banks in
Indianapolis,
Indiana,
U.S.A. are open for business.
"BUYER" has the meaning set forth in the introductory paragraph hereto.
"BUYER BENEFIT PLANS" has the meaning specified in SECTION 8.03(b).
"CAROLINA INDUSTRIES" has the meaning set forth in the introductory
paragraph hereto.
"CERCLA" means the Comprehensive Environmental Response Compensation and
Liability Act of 1980, as amended.
"CLAIM" has the meaning specified in SECTION 13.02.
"CLOSING" has the meaning specified in SECTION 4.01.
"CLOSING BALANCE SHEET" has the meaning specified in SECTION 3.02(b).
"CLOSING DATE" has the meaning specified in SECTION 4.01.
"CLOSING DATE A/R REPORT" has the meaning specified in SECTION 2.06(b).
"CLOSING DATE INVENTORY REPORT" has the meaning specified in SECTION
2.06(b).
"COBRA" means Title X of the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONTRACTS" means any agreement, lease, license, evidence of indebtedness,
mortgage, indenture, security agreement or other contract.
"EFFECTIVE DATE" has the meaning specified in the first paragraph of this
Agreement.
"ENCUMBRANCES" means all liens (statutory or other), leases, mortgages,
pledges, security interests, conditional sales agreements, charges, claims,
options, easements, rights of way (other than easements of record), rights of
third parties and other encumbrances of any kind or nature whatsoever.
"ENVIRONMENTAL REQUIREMENTS" mean all past, present and future Laws, rules,
regulations, ordinances, policies, guidance documents, approvals, plans,
authorizations, Licenses and Permits issued by any Governmental Entity of the
United States, state or political subdivision thereof, and any foreign
governmental body and all judicial, administrative, and regulatory decrees,
judgments, and orders relating to human health, pollution, or protection of the
environment (including ambient air, surface water, ground water, land surface or
surface strata), including (i) Laws relating to emissions, discharges, releases,
or threatened releases of Hazardous Materials, (ii) Laws relating to the
identification, generation, manufacture, processing, distribution, use,
treatment, storage, disposal, recovery, transport or other handling of Hazardous
Materials, (iii) CERCLA; the Toxic Substances Control Act, as amended; the
Hazardous Materials Transportation Act, as amended; RCRA; the Clean Water Act,
as amended; the Safe Drinking Water Act, as amended; the Clean Air Act, as
amended; the Atomic Energy Act of 1954, as amended; and the Occupational Safety
and Health Act, as amended; and (iv) any similar Law.
"EQUIPMENT AND MACHINERY" means (i) all equipment, machinery, furniture,
fixtures and improvements, tooling, spare parts, supplies, computer hardware and
software, and motor vehicles (certificated or uncertificated) owned or leased by
Branford in connection with the
Business (including all leases of such property), (ii) any rights of Branford to
warranties applicable to the foregoing (to the extent assignable), and licenses
received from the manufacturers or sellers of any such item, and (iii) any
related claims, credits, and rights of recovery with respect thereto.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCESS INVENTORY" means the Inventory of Sellers that is not Purchased
Inventory, ownership of which shall remain in [CAROLINA INDUSTRIES] from and
after the Effective Date until purchased by Buyer or otherwise disposed of as
provided in SECTION 11.01.
"EXCLUDED ACCOUNTS RECEIVABLE" means the accounts receivable of Sellers
identified on SCHEDULE 1.03.
"EXCLUDED ASSETS" has the meaning specified in SECTION 2.03.
"FILES AND RECORDS" mean all files and records of the Seller relating to
the Business, whether in hard copy or magnetic or other format including
customer and supplier records, equipment maintenance records, equipment warranty
information, plant plans, specifications and drawings, sales and advertising
material, computer software and records relating to employees to be employed by
the Buyer following the Closing.
"FINAL A/R REPORT" has the meaning specified in SECTION 2.06(b).
"FINAL INVENTORY REPORT" has the meaning specified in SECTION 2.06(b).
"GAAP" means generally accepted accounting principles in the United States
of America, in effect from time to time, consistently applied.
"GOVERNMENTAL ENTITY" means any court, government agency, department,
commission, board, bureau or instrumentality of the United States, any local,
county, state, federal or political subdivision thereof, or any foreign
governmental body of any kind.
"HARCKE" has the meaning set forth in the introductory paragraph hereto.
"HAZARDOUS MATERIALS" mean (i) any substance that is or becomes defined as
a "hazardous substance," "hazardous waste," "hazardous material," pollutant, or
contaminant under any Environmental Requirements, including CERCLA; the
Superfund Amendments and Reauthorization Act, as amended; the RCRA; and any
analogous and applicable Law; (ii) petroleum (including crude oil and any
fraction thereof); and (iii) any natural or synthetic gas (whether in liquid or
gaseous state).
"HIRED EMPLOYEES" has the meaning specified in SECTION 8.03(a).
"INDEBTEDNESS" of any Person means, without duplication, all obligations of
such Person (i) for borrowed money, (ii) evidenced by notes, bonds, debentures
or similar instruments, (iii) for the deferred purchase price of goods or
services (other than trade payables incurred in the
ordinary course of business), (iv) under capital leases and (v) in the nature of
guarantees of the obligations described in clauses (i) through (iv) above of any
other Person.
"INDEMNIFIED PARTY" has the meaning specified in SECTION 13.04.
"INDEMNIFYING PARTY" has the meaning specified in SECTION 13.04.
"INTANGIBLE ASSETS" mean all intangible personal property rights of the
Seller, including goodwill, customer lists and related information, and all
contract rights with respect to the Assigned Contracts.
"INTELLECTUAL PROPERTY" means any and all of the following and all rights
in, arising out of, or associated therewith: (i) all United States and foreign
patents and applications therefor and all reissues, divisions, renewals,
extensions, provisionals, continuations and continuations-in-part thereof; (ii)
all inventions (whether patentable or not), invention disclosures, improvements,
trade secrets, proprietary information, proprietary processes or formulae,
franchises, licenses, know how, technology, technical data and customer lists,
and all documentation relating to any of the foregoing; (iii) all copyrights,
copyright registrations and applications therefor and all other rights
corresponding thereto throughout the world; (iv) all trade names, logos, common
law trademarks and service marks; trademark and service xxxx registrations and
applications therefor and all goodwill associated therewith throughout the
world; (v) all databases and data collections and all rights therein throughout
the world; (vi) all computer software including all source code, object code,
algorithms, display screens, layouts, firmware, development tools, files,
records and data, all media on which any of the foregoing is recorded, all Web
addresses, sites and domain names; (vii) any similar, corresponding or
equivalent rights to any of the foregoing; and (viii) all documentation related
to any of the foregoing.
"INTERIM BALANCE SHEET" has the meaning specified in SECTION 5.05.
"INVENTORY" means all Inventory of Sellers, wherever located, including all
finished goods, work in process and raw materials.
"LAW" or "LAWS" means any local, county, state, federal or other law,
statute, regulation, ordinance, rule, order, decree, judgment, consent decree,
settlement agreement or governmental requirement enacted, promulgated, entered
into, agreed or imposed by any Governmental Entity.
"LICENSES AND PERMITS" mean all licenses, permits, franchises,
authorizations, and approvals issued by or under the authority of a Governmental
Entity that relate directly or indirectly to, or are necessary for, the conduct
of the Business, including those described in SCHEDULE 5.17.
"MATERIAL ADVERSE EFFECT," when used with respect to Sellers or the
Business, means any event, change, occurrence, condition or circumstance which
has had or may have a material adverse impact on any of the Acquired Assets, the
prospects, operations or financial condition of the Business as conducted by
Sellers immediately prior to the date hereof or the Closing, as applicable, or
the ability of Sellers to consummate any of the transactions contemplated by
this Agreement, and when used with respect to Buyer, means any event, change,
occurrence,
condition or circumstance which has had or may have a material adverse impact on
the ability of Buyer to consummate any of the transactions contemplated by this
Agreement.
"MISCELLANEOUS ASSETS" means all telephone numbers, web site addresses and
post office boxes used by Branford in the Business, all materials and supplies
(other than Inventory) to be used or consumed by Sellers in the production of
finished goods and all prepaid expenses reflected on the Closing Balance Sheet
to the extent such expenses accrue to the benefit of Buyer after the Effective
Date.
"NONCOMPETITION AGREEMENTS" means the Confidentiality and Noncompetition
Agreements in the Form attached as EXHIBITS 4.02(g)(i) and 4.02(g)(ii).
"PERSON" means any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust, or
unincorporated organization, or any Governmental Entity.
"PERSONNEL" means the current and former officers, employees and/or agents
of any Seller.
"POLICIES" and "POLICY" have the meanings specified in SECTION 5.18.
"PURCHASE PRICE" has the meaning specified in SECTION 3.01.
"PURCHASED INVENTORY" means the Inventory of Sellers consisting of
inventory consigned to third parties for sale, work-in-process that is committed
to customer orders, work-in-process that is semi-finished goods, raw materials
necessary to fulfill Sellers' existing order backlog and other raw materials,
each as set forth on SCHEDULE 1.04, adjusted as provided in SECTION 2.06.
"RCRA" means the Resource Conservation and Recovery Act, as amended.
"REAL PROPERTY" has the meaning specified in SECTION 5.09.
"RELATED AGREEMENTS" means all agreements, instruments and certificates
(other than this Agreement) to be executed by Sellers or Harcke in connection
with the transactions contemplated by this Agreement, including without
limitation each Xxxx of Sale, each Assignment and Assumption Agreement and each
Noncompetition Agreement.
"REPLACEMENT COST" has the meaning specified in SECTION 11.01(c).
"SALE OF ASSETS" means the sale of the Acquired Assets by Sellers to Buyer
pursuant to the terms of this Agreement.
"SECURITY AGREEMENT" has the meaning specified in SECTION 4.02(a).
"SELLERS" has the meaning specified in the first paragraph of this
Agreement.
"SITE ASSESSMENT" has the meaning specified in SECTION 4.02(n).
"STORAGE SITE" has the meaning specified in SECTION 11.01(a).
"TAX" or "TAXES" mean all federal, state, local and foreign taxes
(including excise taxes, value added taxes, occupancy taxes, employment taxes,
unemployment taxes, ad valorem taxes, custom duties, transfer taxes, and fees),
levies, imposts, fees, impositions, assessments and other governmental charges
of any nature imposed upon a Person including all taxes and governmental charges
imposed upon any of the personal properties, real properties, tangible or
intangible assets, income, receipts, payrolls, transactions, stock transfers,
capital stock, net worth or franchises of a Person (including all sales, use,
withholding or other taxes which a Person is required to collect and/or pay over
to any Governmental Entity), and all related additions to tax, penalties or
interest thereon.
"TAX RETURNS" mean all returns, reports, information returns, and other
documents (including all related and supporting information) filed or required
to be filed with any Governmental Entity in connection with the determination,
assessment, collection, or administration of any Taxes.
"TERMINATED EMPLOYEES" has the meaning specified in SECTION 8.03(e).
"UNCOLLECTIBLE ACCOUNTS RECEIVABLE" shall mean any account receivable of
Sellers that has been written off as uncollectible prior to the Closing Date and
included on the list of such accounts receivable delivered by the Sellers to the
Buyer pursuant to SECTION 12.05.
ARTICLE II.
SALE AND PURCHASE
SECTION 2.01. TRANSFER OF ASSETS. Subject to the terms and conditions set
forth in this Agreement, at the Closing, Sellers shall sell, convey, transfer,
assign and deliver to Buyer, and Buyer shall purchase, acquire and accept from
Sellers all of the right, title, and interest of Sellers in and to the Acquired
Assets.
SECTION 2.02. SALE FREE OF ENCUMBRANCES. Sellers and Harcke, jointly and
severally, represent, warrant and agree that the sale, conveyance, transfer,
assignment and delivery by Sellers of the Acquired Assets to Buyer as provided
herein is being made free and clear of all Encumbrances.
SECTION 2.03. CERTAIN EXCLUDED ASSETS. Notwithstanding any other
provision of this Agreement to the contrary, the Acquired Assets shall not
include the following assets of Sellers (collectively, the "EXCLUDED ASSETS"):
(a) all cash on hand or on deposit;
(b) rights under agreements with suppliers (other than Assigned
Contracts);
(c) minute books, stock ledgers and other corporate records of any
Seller;
(d) assets held in any employee benefit plan of any Seller;
(e) the Excess Inventory; and
(f) the Excluded Accounts Receivable.
SECTION 2.04. NO ASSUMPTION OF LIABILITIES. Buyer is not assuming, and
shall not be responsible for in any manner, any obligations or liabilities of
any Seller, direct or indirect, known or unknown, xxxxxx or inchoate, absolute,
fixed or contingent, except (a) that Buyer agrees to assume and timely pay or
perform all obligations of Seller under the Assigned Contracts which (i)
initially accrue or arise after the Closing Date and (ii) are not the result of
or caused by any breach or default thereunder by any Seller, and (b) as set
forth in SCHEDULE 2.04 (such obligations, collectively, the "ASSUMED
LIABILITIES"). Any Excluded Assets that remain on the Real Property, as defined
herein, as of the Closing Date remain at Sellers' sole risk. Buyer will have no
liability for damage to or destruction of Excluded Assets whether caused by
Buyer's negligence or otherwise.
SECTION 2.05. SUBSEQUENT DOCUMENTATION. At any time and from time to time
after the Closing Date, Sellers shall, upon the request of Buyer, and Buyer
shall, upon the request of Sellers, promptly execute, acknowledge, and deliver,
or cause to be executed, acknowledged, and delivered, such further instruments
and other documents, and perform or cause to be performed such further acts, as
may be reasonably required to evidence or effectuate (a) the sale, conveyance,
transfer, assignment and delivery hereunder of the Acquired Assets, (b) the
performance by the parties of any of their other respective obligations under
this Agreement, and (c) the purposes and intent of this Agreement.
SECTION 2.06. POST-CLOSING ADJUSTMENTS TO PURCHASED INVENTORY.
(a) The amount of Purchased Inventory shall be increased or decreased
by a number of pounds having a value as of the Closing Date equal to (i) the
dollar amount by which Branford's Accounts Receivable as shown on the Final A/R
Report, is lower or higher, respectively, than Branford's Accounts Receivable as
shown on the Closing Date A/R Report; PLUS (ii) the amount by which the net book
value of the Equipment and Machinery included in the Acquired Assets is less
than $275,000. If the adjustment required by this SECTION 2.06 results in a net
decrease in Purchased Inventory, Buyer shall deliver to Sellers a quantity of
the Purchased Inventory (in the inverse order specified in SCHEDULE 1.04) equal
to the amount of such decrease and the Inventory so delivered shall become
Excess Inventory for all purposes of this Agreement. If the adjustment required
by this SECTION 2.06 results in a net increase in Purchased Inventory, Sellers
shall deliver to Buyer a quantity of Excess Inventory (in the order specified in
SCHEDULE 1.04) equal to the amount of such increase and the amount so delivered
shall become Purchased Inventory for all purposes of this Agreement. Any
transfer of Inventory as a result of the application of this SECTION 2.06 shall
be completed within five (5) Business Days of determination of the Closing
Balance Sheet, as provided for herein.
(b) On the Closing Date, Sellers shall deliver to Buyer a written
report showing all accounts receivable of Sellers outstanding on the Closing
Date, excluding Excluded Accounts Receivable (the "CLOSING DATE A/R REPORT"),
and a written report showing all Inventory of Sellers as of the Closing Date
divided into the categories identified on SCHEDULE 1.04 (the "CLOSING DATE
INVENTORY REPORT"). Not later than twenty (20) days after the Closing Date,
Buyer may disagree with the information set forth in the Closing Date A/R Report
or the Closing Date Inventory Report and notify Sellers in writing specifying in
reasonable detail the items in
disagreement and the basis therefor. If Buyer so disagrees, Buyer and Sellers
shall meet and attempt in good faith to resolve the disagreement on a mutually
satisfactory basis. If Buyer and Sellers are unable to resolve the disagreement
within 10 days, Sellers and Buyer shall cause their respective accountants to,
within 15 days after the end of such 10-day period, agree upon a final Closing
Date A/R Report or Closing Date Inventory Report, in which case such agreed-upon
report shall be final and binding on the parties. In the event that their
respective accountants cannot agree upon such final report within such
timeframe, their respective accountants shall, within 2 days, jointly select an
independent auditor of recognized national standing to determine, within 10
days, a final report as of the Closing Date, in which case such determined final
report shall be final and binding on the parties. The final Closing Date A/R
Report and the final Closing Date Inventory Report prepared and finally
determined in accordance with this SECTION 2.06(b) are referred to herein
respectively as the "FINAL A/R REPORT" and the "FINAL INVENTORY REPORT".
ARTICLE III.
PURCHASE PRICE
SECTION 3.01. PURCHASE PRICE AND PAYMENT. Subject to the terms and
conditions set forth in this Agreement, as full consideration for the Acquired
Assets, Buyer shall:
(a) pay to Sellers at Closing in cash by wire transfer to an account
designated by Sellers at least two (2) Business Days prior to the Closing Date
an amount equal to Eight Million Three Hundred Thousand Dollars ($8,300,000);
and
(b) assume the Assumed Liabilities.
The amounts set forth in subsections (a) and (b) are referred to
collectively as the "PURCHASE PRICE."
SECTION 3.02. FAIR CONSIDERATION. All of the parties acknowledge and
agree that the consideration provided for in this ARTICLE III represents fair
consideration and reasonably equivalent value for the sale and transfer of the
Acquired Assets and the transactions, covenants and agreements set forth in this
Agreement, which consideration was agreed upon as the result of arm's-length,
good-faith negotiations between the parties and their respective
representatives.
SECTION 3.03. ALLOCATION OF THE PURCHASE PRICE. Buyer and Sellers agree
that the Purchase Price shall be allocated to the Acquired Assets sold by
Sellers as set forth on SCHEDULE 3.03 subject to adjustment by written consent
of both Sellers and the Buyer following a determination of the Closing Balance
Sheet and shall file Internal Revenue Service Form 8594 (and/or other
appropriate Tax Returns) with the applicable Taxing authorities, and shall not
file any amendments or take any action inconsistent with the foregoing in any
audit, refund claim, Tax Return, or any other administration or judicial
proceeding, pursuant to Section 1060 of the Code and underlying Treasury
Regulations promulgated thereunder. Sellers shall make its Tax Returns and
amendments thereof available for inspection by Buyer for the purpose of
verifying compliance with this SECTION 3.03.
SECTION 3.04. TAXES. Sellers shall timely pay (a) all Taxes arising out
of (i) the ownership or use of the Excluded Assets, (ii) the ownership or use of
the Acquired Assets on or before the Closing Date, including all real or
personal property Taxes and payroll withholding Taxes due and payable (or
assessed for periods) on or before the Closing Date; and (b) all Taxes,
including gross and net income Taxes, and transfer, recording, sales and use
Taxes arising out of the sale or transfer of the Acquired Assets pursuant to
this Agreement or the other agreements and instruments contemplated hereby or
the recording or filing of any sale or transfer agreements or instruments.
ARTICLE IV.
CLOSING
SECTION 4.01. CLOSING DATE. The closing of the transactions contemplated
by this Agreement (the "CLOSING") shall take place at a date and time mutually
agreed upon by the parties to the Agreement following satisfaction or waiver of
all conditions set forth herein at the offices of Ice Xxxxxx, Xxx Xxxxxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxxxxxxx, Xxxxxxx (the "CLOSING DATE").
SECTION 4.02. DELIVERIES BY SELLERS. At the Closing, and simultaneously
with delivery of possession of all of the Acquired Assets to Buyer, Sellers have
delivered (or caused to be delivered) to Buyer originals or copies, if
specified, of the following agreements, documents and other items:
(a) A Security Agreement by and among Sellers and Buyer (the "SECURITY
AGREEMENT"), executed by Buyer, in the form attached hereto as EXHIBIT 4.02(a);
(b) A Xxxx of Sale, executed by Sellers, in the form attached hereto as
EXHIBIT 4.02(b);
(c) Copies of all the resolutions adopted by Sellers' Boards of
Directors and shareholders authorizing and approving the execution and delivery
of this Agreement and all agreements contemplated hereby and the consummation of
the transactions contemplated hereby and thereby, certified to be true and
complete and in full force and effect by the corporate Secretary of each Seller;
(d) An Assignment and Assumption Agreement, executed by Sellers, in the
form attached hereto as EXHIBIT 4.02(d);
(e) Copies of each consent, waiver, authorization and approval required
pursuant to SECTION 5.04 of this Agreement or necessary for the sale of the
Acquired Assets or the assignment of the Assigned Contracts to Buyer as
contemplated hereby;
(f) Certificates of Good Standing of each Seller issued by the
Secretary of State of the State of Connecticut or other appropriate Governmental
Authority, and Certificates of Authorization for each Seller from the North
Carolina Secretary of State, dated within fifteen (15) days of the Closing;
(g) Noncompetition Agreements, executed by each Seller and Harcke;
(h) Certificates of title for the motor vehicles included in the
Acquired Assets, duly endorsed, and all other documents necessary to effect
transfer of title to any such motor vehicles;
(i) The original of the ALTA title insurance policy with respect to the
Real Property, as defined herein, issued by Chicago Title Insurance Company;
(j) A Certificate executed by Sellers acknowledging delivery by Buyer
of the items set forth in SECTION 4.03 of this Agreement and certifying that
Sellers have performed in all respects all of the covenants, agreements,
obligations and conditions required under this Agreement to be performed,
complied with or fulfilled by Sellers on or before the Closing Date;
(k) An opinion of counsel to Sellers, dated as of the Closing Date, in
substantially the form attached hereto as EXHIBIT 4.02(k);
(l) The Closing Date A/R Report and the Closing Date Inventory Report;
(m) A copy of the ALTA survey certified by Professional Surveying
Services for the Real Property, as defined herein;
(n) A copy of the Phase I environmental site assessment ("SITE
ASSESSMENT") of the Real Property;
(o) Evidence of zoning of the Real Property that is satisfactory to
Buyer, in its reasonable discretion;
(p) The list of Uncollectible Accounts Receivable provided for in
SECTION 12.05(d);
(q) The evidence of compliance with applicable bulk sales or bulk
transfer laws required by SECTION 9.08;
(r) Non-Foreign Affidavit executed by Sellers, in connection with the
transfer of the Real Property;
(s) Owner's Affidavit executed by Sellers, in connection with the
transfer of the Real Property;
(t) General Warranty Deed executed by Sellers, in connection with the
transfer of the Real Property; and
(u) Such other documents and certificates, as Buyer shall reasonably
request.
SECTION 4.03. DELIVERIES BY BUYER. At the Closing and simultaneously with
the payment of the Purchase Price to Sellers, Buyer has delivered (or has caused
to be delivered) to Sellers originals, or copies if specified, of the following
agreements, documents and other items:
(a) The Purchase Price to be paid at the Closing pursuant to SECTION
3.01 by wire transfer to accounts designated by Sellers;
(b) The Security Agreement, executed by Sellers, in the form attached
as EXHIBIT 4.02(a);
(c) Copies of all resolutions adopted by the Board of Directors of
Buyer authorizing and approving the execution and delivery of this Agreement and
all agreements contemplated hereby and the consummation of the transactions
contemplated hereby and thereby, certified to be true and complete and in full
force and effect by the corporate Secretary of Buyer;
(d) An Assignment and Assumption Agreement, executed by Buyer, in the
form attached hereto as EXHIBIT 4.02(d);
(e) A Certificate executed by Buyer acknowledging delivery by Sellers
of the items set forth in SECTION 4.02 of this Agreement and certifying that
Buyer has performed in all respects all of the covenants, agreements,
obligations and conditions required under this Agreement to be performed,
complied with or fulfilled by Buyer on or before the Closing Date;
(f) The Noncompetition Agreements, executed by Buyer;
(g) A Certificate of Good Standing of Buyer issued by the Secretary of
State of the State of Delaware, dated within fifteen (15) days of the Closing;
and
(h) Such other documents and certificates, as Sellers shall reasonably
request.
SECTION 4.04. POSSESSION OF ACQUIRED ASSETS. Immediately following the
Closing on the Closing Date, the Seller shall take all actions which are
required or requested by the Buyer to put the Buyer in full possession and
control of all of the Acquired Assets.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF SELLERS AND HARCKE
As a material inducement to Buyer to enter into this Agreement and to
consummate the transactions contemplated hereby, Sellers and Harcke jointly and
severally represent and warrant to Buyer as follows:
SECTION 5.01. ORGANIZATION; POWER. Each Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. Each Seller is qualified as a foreign
corporation and is in good standing in each state or jurisdiction where
qualification is necessary because of the nature of the assets and properties it
owns, leases or operates or because of the nature of the business it conducts.
SECTION 5.02. AUTHORIZATION AND VALIDITY OF AGREEMENT. Each Seller has
all requisite corporate power and authority to own, lease and operate the
Acquired Assets, to carry on the Business as it is now being conducted, and to
enter into, execute and deliver this Agreement and all Related Agreements
executed by it, to consummate the transactions contemplated by this Agreement
and other Related Agreements and to comply with and fulfill the terms and
conditions of this Agreement and such Related Agreements. Harcke has the legal
capacity and authority to enter into this Agreement and each of the Related
Agreements, to be executed by
Harcke and to carry out his obligations hereunder and thereunder. The execution,
delivery and performance of this Agreement and each Related Agreement by each
Seller and Harcke and the consummation by each Seller and Harcke of the
transactions contemplated by this Agreement and each Related Agreement have been
duly authorized by all necessary corporate action by the Board of Directors and
shareholders of each Seller, and no other corporate proceedings on the part of
any Seller are necessary to authorize such execution, delivery, performance or
consummation. This Agreement and each Related Agreement has been duly executed
and delivered by each Seller and Harcke, as applicable, and constitutes a legal,
valid and binding obligation of each Seller and Harcke, as applicable,
enforceable against each Seller and Harcke in accordance with their respective
terms and conditions.
SECTION 5.03. NO CONFLICT OR VIOLATION. The execution, delivery and
performance of this Agreement by each Seller and Harcke does not and will not:
(a) violate or conflict with any provision of the certificate of incorporation,
bylaws or other governing document of Sellers, (b) violate any provision of Law
of any Governmental Entity applicable to any Seller, Harcke, or the Business;
(c) violate or result in a breach of or constitute (with due notice or lapse of
time or both) a default under any contract, lease, loan agreement, mortgage,
security agreement, trust, indenture, license, consent order or other instrument
or obligation to which any Seller or Harcke is a party, or by which any Seller
is bound or to which any Seller's or Harcke's assets or properties may be bound;
or (d) result in the imposition of any Encumbrance or restriction on the
Business or any of the Acquired Assets.
SECTION 5.04. CONSENTS AND APPROVALS. SCHEDULE 5.04 sets forth a list of
each consent, waiver, authorization or approval of any Governmental Entity or of
any other Person, and each declaration to or filing or registration with any
Governmental Entity required in connection with the execution and delivery of
this Agreement by any Seller or Harcke or the performance by any Seller and
Harcke of its or his obligations hereunder.
SECTION 5.05. FINANCIAL STATEMENTS. Attached hereto as SCHEDULE 5.05 are
true, correct and complete copies of (i) the balance sheets of Sellers as of
April 30, 2003 and 2002 and the related statements of income, changes in
stockholders' equity and cash flows for each of the fiscal years ended April 30,
2003, 2002 and 2001, together with a true and correct copy of the review letter
on such information by Xxxxx Xxxxxxxx, Sellers' independent public accountant,
(ii) the balance sheet of Sellers as of April 30, 2004 and the related statement
of income, changes in stockholders' equity and cash flows for the year then
ended, and (iii) the unaudited balance sheet of the Sellers as of July 31, 2004
(the "INTERIM BALANCE SHEET"), and the related unaudited statements of income,
changes in stockholders' equity and cash flows for the three (3) months then
ended, together with the notes thereto. All financial statements referred to in
this SECTION 5.05 have been prepared in a manner consistent with the manner in
which Sellers' Tax Returns are prepared. All of the financial statements fairly
present, in all material respects, the financial position of the Sellers as of
the respective dates thereof and the results of the Sellers' operations and
changes in the stockholders' equity and cash flows for the period then ended,
subject, in the case of clauses (ii) and (iii) above, to normal recurring
adjustments which are not, individually or in the aggregate, material.
SECTION 5.06. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth
on SCHEDULE 5.06, since the Balance Sheet Date, Sellers have operated the
Business in the ordinary course consistent with past practice and there has not
been any:
(a) (i) increase in the compensation payable or to become payable to
any Personnel engaged in the Business, (ii) bonus, incentive compensation,
service award or other like benefit granted, made or accrued, contingently or
otherwise, for or to any Personnel engaged in the Business, (iii) addition to or
modification of any of the Branford's Benefit Obligations and Branford's Plans
agreed to by any Seller for any Personnel engaged in the Business other than in
the ordinary course of the Business consistent with past practice, or (iv) new
employment agreement with any Personnel engaged in the Business;
(b) cancellation of any indebtedness or waiver of any rights having a
value of $5,000 or greater, whether or not in the ordinary course of the
Business, or increase in any obligation or liability of Branford except in the
ordinary course of the Business consistent with past practice;
(c) execution and delivery, amendment, cancellation or termination of
any contract, license or other instrument material to the Business;
(d) failure to preserve the Business intact, to keep available to Buyer
the services of the Personnel and to preserve for Buyer the goodwill of each of
the Branford's dealers, suppliers, customers and others having business
relations with it;
(e) change in accounting methods or practices;
(f) damage, destruction or loss (whether or not covered by insurance)
affecting the Acquired Assets or the Business;
(g) sale, assignment, transfer or encumbering (or subjecting to any
Encumbrance) of any of the assets or properties except in the ordinary course of
the Business consistent with past practice;
(h) agreement by any Seller to do any of the foregoing; or
(i) other event or condition of any character which in any one case or
in the aggregate has had or may have a Material Adverse Effect on any Seller,
the Business or any of the Acquired Assets.
SECTION 5.07. TAX MATTERS. Each Seller has duly and timely filed all Tax
Returns required to have been filed with any federal, state, local or foreign
Taxing authority on or before the Closing Date and has timely paid all Taxes due
and payable by it on or before the Closing Date, whether or not shown on such
Tax Returns. Branford has set up reserves or accruals on the Agreement Balance
Sheet which are adequate for the payment of all Taxes for all periods through
the Closing Date. No Taxing authority has asserted any claim against any Seller
for the assessment of any additional Tax liability or initiated any action or
proceeding which could result in such an assertion. Each Seller has made all
withholding of Taxes required to be made under all applicable Laws and
regulations, including withholding with respect to sales and use Taxes and
compensation paid to employees, and the amounts withheld have been properly paid
over to the appropriate Taxing authorities. The state, federal and local Tax
Returns of each Seller have been audited for or through the respective periods
set forth on SCHEDULE 5.07 hereof, and there have been no waivers or extensions
by such Seller of statutes of limitations with respect to Taxes. Neither Seller
is a "foreign person" within the meaning of Section 1445(f)(3) of the Code. The
transactions contemplated by this Agreement are not subject to the Tax
withholding provisions of Section 3406 of the Code or of Sub-Chapter A or
Chapter 3 of the Code, or of any other comparable provision of Law.
SECTION 5.08. ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth on
SCHEDULE 5.08, Branford has no indebtedness or liability which is not shown on
the Agreement Balance Sheet or provided for thereon, other than liabilities
incurred or accrued in the ordinary course of the Business consistent with past
practice since the Balance Sheet Date. The Acquired Assets are being conveyed to
Buyer pursuant to this Agreement free and clear of all Encumbrances and Buyer
will not incur any liability or obligation as a result of its acquisition of the
Acquired Assets (other than the Assumed Liabilities).
SECTION 5.09. REAL PROPERTY. SCHEDULE 5.09 sets forth a list of all real
property owned, used or occupied by any Seller (or any of their Affiliates)
which is used in the business (the "REAL PROPERTY"). None of the real property
used by any Seller in the Business is leased. All of the following apply to the
Real Property:
(a) None of the Real Property is subject to any option to purchase,
purchase agreement, lease, sublease, right of first refusal or any other grant
to any Person of any right to the purchase, lease, sublease, use, occupancy or
enjoyment of such property or any portion thereof by any Seller.
(b) There is no litigation or proceeding pending or, to the knowledge
of any Seller, threatened against or relating to the Real Property, including,
without limitation, condemnation proceedings relating to any of the Real
Property.
(c) There is no pending re-zoning relating to the Real Estate.
(d) All Licenses and Permits and approvals necessary for the occupancy
and use of the Real Property for the conduct of the Business have been obtained.
(e) Good, marketable and indefeasible fee simple title to each parcel
of the Real Property is owned by Carolina Industries, free and clear of every
kind or description of lien, lease or encumbrance except easements, agreements
and restrictions of record and current taxes not delinquent.
(f) There are no easements, agreements and restrictions which encumber
the Real Property or frustrate Buyer's intended use of the Real Property.
(g) There are no unpaid claims for labor done upon or materials
furnished for the Real Property in respect of which liens have been or may be
filed.
(h) There is no judgment of any court of any State or of the United
States that is or may become a lien on the Real Property.
(i) The improvements upon the Real Property are all located entirely
within the bounds of the Real Property, and there are no encroachments thereon.
(j) Each parcel of the Real Property is now in possession of Sellers
and no other person has a right to possession or claims possession of all or any
part of the Real Property. Sellers will deliver possession of the Real Property
to Buyer at the Closing, free and clear of any right or claim of any person to
the possession of the Real Property except as disclosed in writing to Buyer.
(k) Each parcel of the Real Property has direct access to a
publicly-dedicated right-of-way.
(l) Neither Seller is a foreign corporation, foreign partnership,
foreign trust or foreign estate (as those terms are defined in the Code and
regulations adopted pursuant thereto).
(m) All utilities presently serving the Real Property are operated
through public easements or rights-of-way, or through valid private easements or
rights-of-way in favor of the applicable owner of the Real Property, and all
installation and connection charges relating thereto have been paid in full.
SECTION 5.10. CONFORMITY OF THE REAL PROPERTY. All buildings, structures
and improvements located on, fixtures contained in, and appurtenances attached
to the Real Property conform in all respects to applicable Laws, including those
related to zoning, use or construction, and the Real Property is zoned for the
purposes for which it is presently used by Sellers. All such buildings,
structures, improvements, fixtures and appurtenances are in good condition and
repair, subject to normal wear and tear and obsolescence, and no condition
exists which interferes with the economic value or use thereof. The conduct of
the Business on the Real Property is in full compliance with applicable Laws,
and no portion of the Real Property is operated as a legally existing
nonconforming use.
SECTION 5.11. EQUIPMENT AND MACHINERY. Included in SCHEDULE 1.01 is a
list of, or SCHEDULE 1.01 otherwise describes, all material items of Equipment
and Machinery included in the Acquired Assets. Each item of Equipment and
Machinery is in good operating condition and repair (except for ordinary wear
and tear) and is in conformity in all respects with all applicable Laws,
ordinances, orders, regulations and other requirements.
SECTION 5.12. INTELLECTUAL PROPERTY AND SOFTWARE. All Intellectual
Property owned by Sellers and material to the Business is listed on SCHEDULE
5.12. All Intellectual Property material to the Business is owned by Sellers,
free and clear of all Encumbrances, and is not known by Sellers to be the
subject of any challenge. Sellers have all Intellectual Property necessary to
conduct the Business as presently operated. No Seller is aware of any facts that
would invalidate or render any Intellectual Property unenforceable. Except as
disclosed on SCHEDULE 5.12, (a) there are no licenses now outstanding or other
rights granted to third parties under any Intellectual Property, and (b) no
Seller is a party to any agreement or understanding with respect to any
Intellectual Property. All software used in the Business is assignable to Buyer
without the consent or approval of any Person, which has not already been
obtained. There are no unresolved claims made, and there has not been
communicated to Sellers the threat of any such claim, that
any of the Intellectual Property or activities of Sellers in connection with the
Intellectual Property constitutes unfair competition or is in violation or
infringement of any patent, trademark, trade name, service xxxx, trade dress,
right of publicity, copyright or registration therefore, of any other Person.
The Intellectual Property does not infringe the patent, trademark, copyright,
trade secret or other proprietary right of any third party. All filings or
recordations necessary or appropriate to protect the interests of Sellers in any
Intellectual Property have been duly made and are in full force and effect.
SECTION 5.13. ACCOUNTS RECEIVABLE. Except for the Uncollectible Accounts
Receivable and the Excluded Accounts Receivable, the Accounts Receivable
reflected or to be reflected in the Closing Date A/R Report represent or shall
represent bona fide claims against debtors for sales, services performed, or
other charges arising in the ordinary course of business, and are not subject to
dispute or counterclaim. Except for the Uncollectible Accounts Receivable and
the Excluded Accounts Receivable, all Accounts Receivable are collectible in the
ordinary course of business (without the necessity of legal proceedings) within
90 days after the date of the invoice therefor.
SECTION 5.14. EMPLOYEE BENEFIT PLANS.
(a) SCHEDULE 5.14(a) contains a true and complete list of all of
Branford's Plans and Branford's Benefit Obligations. All of Branford's Plans and
Branford's Benefit Obligations are in full force and effect and are in
compliance in all respects, both as to form and operation, with applicable
provisions of ERISA, the Code, and any other applicable Laws, and with any
applicable collective bargaining agreement. No event has occurred, and there
exists no condition or set of circumstances which has resulted in or which could
result in the imposition of any liability on Branford under ERISA, the Code or
other applicable Law with respect to Branford's Plans or Branford's Benefit
Obligations.
(b) Branford is not part of a controlled group of employers with any
other person (as defined in Section 7701(a)(l) of the Code) which is considered
a single employer under Sections 414(b), (c), (m), or (o) of the Code, or
Section 3(5) or 4001(b)(1) of ERISA, or the regulations promulgated thereunder.
(c) Branford does not sponsor, maintain, contribute to, nor is required
to contribute to, any "multi-employer plan" within the meaning of Section 3(37)
or 4001(a)(3) of ERISA, and has no liability of any nature, whether known or
unknown, fixed or contingent, with respect to any such multi-employer plan.
(d) Branford does not sponsor, maintain, contribute to, nor is required
to contribute to, any medical, health, life or other welfare benefits for
present or future terminated or retired employees or their spouses or
dependents, other than as required by Part 6 of Subtitle B of Title I of ERISA,
COBRA, or any comparable state Law, and has no liability of any nature, whether
known or unknown, fixed or contingent, with respect to any such post-termination
welfare benefits.
SECTION 5.15. LABOR RELATIONS.
(a) None of the Sellers is a party to or bound by any collective
bargaining agreements and there have been no union claims to represent any of
Sellers' Personnel.
(b) There is no labor strike, lockout, dispute, slowdown or stoppage
pending or, to the knowledge of Sellers or Harcke, threatened against or
involving any Seller, nor has any such event or labor difficulty occurred within
the past five (5) years.
(c) No Seller has entered into any severance or similar arrangement in
respect of any Personnel that shall result in any obligation (absolute or
contingent) of any Seller or Buyer to make any payment to any Personnel
following termination of employment, including the termination of employment
effected by the transactions contemplated by this Agreement. The consummation of
the transactions contemplated by this Agreement will not trigger any severance
or similar arrangement of any Seller payable by Buyer after the Closing.
SECTION 5.16. ENVIRONMENTAL COMPLIANCE.
(a) Except as set forth on SCHEDULE 5.16(a), no Hazardous Material has
been disposed of, spilled, leaked or otherwise released on any Real Property nor
has any Hazardous Material come to be located in the soil, surface water or
groundwater on or below any Real Property. Except as set forth on SCHEDULE
5.16(a), no Hazardous Materials are or have been generated, manufactured,
treated, stored, transported, used or otherwise handled by the Seller either on
or off of any Real Property and there are no underground storage tanks thereon
(whether or not regulated and whether or not out of service, closed or
decommissioned). There is no condition affecting any Real Property known to
Sellers or Harcke which is in violation of any Environmental Requirement. There
are no asbestos-containing materials incorporated into the buildings or interior
improvements that are part of any of the Real Property, or into other assets of
Sellers. There is no electrical transformer, fluorescent light fixture with
ballasts or other equipment containing polychlorinated biphenyls on any of the
Real Property. Sellers have not conducted activities on the Real Property
involving the treatment, storage or disposal of Hazardous Materials. To the
knowledge of Seller or Harcke, no previous owner or tenant of the Real Property
has spilled, disposed, discharged, emitted or released any Hazardous Materials
into, upon or from any Real Property or into or upon the soil, ground or surface
water nor has violated any Environmental Requirements with respect to the Real
Property.
(b) Except as set forth on SCHEDULE 5.16(b), each Seller is in
compliance and has complied in all material respects with all federal, state and
local Environmental Requirements and has not been cited for any violation of any
such Environmental Requirements. Except as set forth on SCHEDULE 5.16(b), no
capital expenditures will be required for compliance with any applicable
Environmental Requirements. Except as set forth on SCHEDULE 5.16(b), there is no
pending investigation, civil, criminal or administrative action, notice or
demand letter, notice of violation, or other proceeding known to Sellers or
Harcke by any Governmental Entity with respect to ground or surface water, soil
or air contamination, the storage, treatment, release, transportation or
disposal of Hazardous Materials, the use of underground storage tanks by Sellers
or the violation of any Environmental Requirement. Except as set forth on
SCHEDULE 5.16(b), Sellers have not received any notice or other communication
concerning any past,
present or future events, actions or conditions which under present Law may give
rise to any liability of Sellers relating to the presence of Hazardous Materials
on the Real Property or on the real property of any Person. Except as set forth
on SCHEDULE 5.16(b), Sellers do not have any agreement with any Governmental
Entity relating to any such environmental matter or any environmental or
Hazardous Materials cleanup.
SECTION 5.17. LICENSES AND PERMITS. Sellers have obtained all Licenses
and Permits necessary for the conduct of the Business and all Licenses and
permits are in full force and effect, including those Licenses and Permits
necessary to comply with Environmental Requirements. The Licenses and Permits
are described in SCHEDULE 5.17. All of the Licenses and Permits are assignable
to Buyer as contemplated by this Agreement. The consummation of the transactions
contemplated hereby shall not interrupt or give any Governmental Entity the
right to terminate or interrupt the continuation of any of the Licenses and
Permits or the conduct of the Business. Sellers are in compliance with all
terms, conditions and requirements of all Licenses and Permits and no proceeding
is pending or, to the knowledge of Sellers or Harcke, threatened relating to the
termination, revocation, limitation or modification of any of the Licenses or
Permits.
SECTION 5.18. INSURANCE; BONDS. SCHEDULE 5.18 lists all policies of
liability, fire, casualty, business interruption, workers' compensation and
other forms of insurance (collectively, "POLICIES" and individually, a "POLICY")
insuring the properties, assets or operation of the Business, setting forth the
carrier, policy number, expiration dates, premiums, description of type of
coverage and coverage amounts. Sellers have made true and complete copies of all
such policies available to Buyer for inspection. Except as set forth on SCHEDULE
5.18, there are no outstanding bonds or other surety arrangements issued or
entered into in connection with the assets and properties of Sellers or the
Business. Except as set forth on SCHEDULE 5.18, no bond or other surety
arrangement is required to satisfy any contractual, statutory or regulatory
requirement applicable to Sellers or the Business or to conduct the Business as
currently conducted and all bonds or other surety arrangements of each Seller
are in full force and effect.
SECTION 5.19. ASSIGNED CONTRACTS. Each Assigned Contract is in full force
and effect. Neither Sellers, nor, to the knowledge of Sellers or Harcke, any
other party thereto has breached any provision of, or is in default under, the
terms of any of the Assigned Contracts. None of the Assigned Contracts require
any consents or approvals to the assignment thereof to Buyer as contemplated
hereby, except as set forth on SCHEDULE 5.19.
SECTION 5.20. CUSTOMERS. SCHEDULE 5.20 sets forth a list of the
Branford's twenty (20) largest customers by volume (with specification of the
volume) in each of the fiscal years ended April 30, 2002, 2003 and 2004. No
customer of Branford has terminated or changed in any material respect, or to
the knowledge of Sellers or Harcke, intends to terminate or change in any
material respect, its customer relationship with Branford.
SECTION 5.21. COMPLIANCE WITH LAW. Sellers and the Business are in
compliance with all applicable Laws, including those applicable to
discrimination in employment, occupational safety and health, trade practices,
competition and pricing, product warranties, zoning, building, sanitation,
employment, retirement, labor relations, product advertising and any applicable
Environmental Requirements. Sellers are not in default or violation with respect
to any order,
writ, judgment, award, injunction or decree of any Governmental Entity or
arbitrator applicable to them or the Business, their Personnel or any of the
Acquired Assets, or are aware of any factual circumstances which are likely to
result in such default or violation.
SECTION 5.22. LITIGATION. Except as set forth on SCHEDULE 5.22, (a) there
are no claims, actions, suits, proceedings, arbitral actions, or investigations
pending or, to the knowledge of the Sellers or Harcke, threatened against or
directly or indirectly involving Sellers, the Business, or any of the Acquired
Assets; and (b) there are no unsatisfied judgments of any kind against Sellers,
the Business or the Acquired Assets.
SECTION 5.23. TITLE TO THE ACQUIRED ASSETS AND RELATED MATTERS. Sellers
have good, marketable and insurable title to all of the Acquired Assets, free
and clear of all Encumbrances. Sellers have the complete and unrestricted power
and the unqualified right to sell, convey, assign, transfer and deliver the
Acquired Assets, and the deeds and other instruments of assignment and transfer
executed and delivered by Sellers to Buyer are valid and binding obligations of
Sellers, enforceable in accordance with their respective terms, and effectively
vest in the Buyer good, marketable and insurable title to the Acquired Assets.
All consents necessary to consummate the transactions contemplated by this
Agreement have been obtained and are valid and binding upon the persons giving
the same. The Acquired Assets include all assets (tangible and intangible, and
all leases and other agreements) necessary or desirable to permit the Buyer to
carry on the Business subsequent to the Closing as presently conducted by
Sellers.
SECTION 5.24. ABSENCE OF CERTAIN BUSINESS PRACTICES. Within the five (5)
years immediately preceding the date of this Agreement, neither Sellers, nor any
Personnel, nor any other Person acting on behalf of Sellers has given or agreed
to give, directly or indirectly, any gift or similar benefit to any dealer,
supplier, customer, governmental employee or other Person who is or may be in a
position to help or hinder the Business (or assist Sellers in connection with
any actual or proposed transaction relating to the Business or the Acquired
Assets), which might subject Sellers to any damage or penalty in any civil,
criminal or governmental litigation or proceeding.
SECTION 5.25. NO OTHER AGREEMENTS TO SELL ASSETS. No Seller has any
obligation, absolute or contingent, to any other Person to sell any of the
Acquired Assets, or to effect any merger, consolidation or other reorganization
of Sellers, or to enter into any agreement with respect thereto.
SECTION 5.26. DEBTS OF BRANFORD. The sum of the net proceeds received by
Branford under this Agreement and the value of the Excluded Assets will be
sufficient to permit Branford to pay all debts due and owing by Branford.
SECTION 5.27. DUE DILIGENCE. With respect to all representations and
warranties which are qualified "to the knowledge of Sellers or Harcke," "known
to Sellers or Harcke," or words of similar import, Sellers and Harcke have made
reasonable investigation of the subject matter of the representation (and in the
case of Sellers conferred with appropriate Personnel and other representatives
of Sellers) and examined all appropriate records and documents in Sellers' or
Harcke's possession or control.
SECTION 5.28. BROKER'S AND FINDER'S FEES. No broker, finder or other
Person is entitled to any commission or finder's fee in connection with this
Agreement or the transactions contemplated by this Agreement as a result of any
actions or commitments of Sellers or Harcke.
SECTION 5.29. ALL MATERIAL INFORMATION. Neither Sellers nor Harcke has
withheld from Buyer any material facts relating to Sellers, the Acquired Assets,
the Business or the prospects of the Business. No representation or warranty
made herein by Sellers or Harcke and no statement contained in any certificate
or other agreement or instrument furnished or to be furnished to Buyer by
Sellers or Harcke in connection with the transactions contemplated by this
Agreement contains an untrue statement of a material fact or omits to state any
material fact necessary in order to make any representation, warranty or other
statement of Sellers or Harcke not misleading.
SECTION 5.30. SELLERS AND HARCKE INDEPENDENTLY ADVISED. Sellers and
Harcke have been represented and advised by independent legal and tax counsel in
connection with this Agreement and the transactions contemplated by this
Agreement, and are not relying upon Buyer or any of its employees or
professional advisors with respect to such matters.
SECTION 5.31. CONDITION OF ACQUIRED ASSETS. The Acquired Assets are in
the same condition as they were on April 30, 2004, reasonable wear and tear
excepted.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Sellers as follows:
SECTION 6.01. ORGANIZATION; POWER. Buyer is a corporation duly and
validly existing under the laws of the State of Delaware, and Buyer has all
requisite corporate power and authority to own its properties and assets and to
conduct its business as now conducted.
SECTION 6.02. AUTHORIZATION AND VALIDITY OF AGREEMENT. Buyer has all
requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder. The execution and delivery of this Agreement
and the performance of the obligations of Buyer hereunder have been duly
authorized by all necessary corporate action by the Board of Directors of Buyer,
and no other corporate proceedings on the part of Buyer are necessary to
authorize the execution, delivery or performance. This Agreement has been duly
executed by Buyer and constitutes Buyer's valid and binding obligation,
enforceable against Buyer in accordance with its terms.
SECTION 6.03. NO CONFLICT OR VIOLATION. The execution, delivery and
performance of this Agreement by Buyer does not and shall not: (a) violate or
conflict with any provision of its certificate of incorporation, bylaws or other
governing document of Buyer, (b) violate any provision of Law of any
Governmental Entity, or (c) violate or result in a breach of or constitute (with
due notice or lapse of time or both) a default under any contract, lease, loan
agreement, mortgage, security agreement, trust, indenture or other agreement or
instrument to which Buyer is a party, or by which it is bound or to which any of
its properties or assets is subject.
SECTION 6.04. APPROVALS AND CONSENTS. The execution, delivery and
performance of this Agreement by Buyer does not require Buyer to obtain the
consent or approval of, or to make any filing with, any Governmental Entity or
other Person except (a) as may be required to obtain the transfer of any
Licenses or Permits, and (b) such consents, approvals and filings, the failure
to obtain or make which would not, individually or in the aggregate, have a
Material Adverse Effect on Buyer or on the ability of Buyer to perform its
obligations hereunder.
SECTION 6.05. BROKER'S AND FINDER'S FEES. No broker, finder or other
Person is entitled to any commission or finder's fee in connection with this
Agreement or the transactions contemplated by this Agreement as a result of any
actions or commitments of Buyer.
ARTICLE VII.
COVENANTS OF SELLERS AND HARCKE
Sellers and Harcke covenant and agree with Buyer that, at all times from
and after the date hereof, Sellers and Harcke will comply with all covenants and
provisions of this ARTICLE VII to the extent such covenants apply to such party,
except to the extent Buyer may otherwise consent in writing.
SECTION 7.01. REGULATORY AND OTHER APPROVALS. Sellers and Harcke will as
promptly as reasonably practicable take all commercially reasonable steps
necessary to (a) obtain all consents, approvals or actions of, make all filings
with and give all notices to Governmental Entity or any other Person required of
Sellers or Harcke to transfer the Acquired Assets as contemplated hereby,
including, without limitation, any consents or approvals required under any
Contracts to which Sellers or Harcke is a party or by which any of their
Acquired Assets is bound or under any Licenses or Permits issued to Branford,
(b) provide such other information and communications to such Governmental
Entity or other Persons as such Governmental Entity or other Persons may
reasonably request in connection therewith and (c) provide reasonable
cooperation to Buyer in connection with the performance of its obligations under
SECTIONS 8.03 and 8.04 below. Branford will provide, or cause to be provided,
notification to Buyer when any such consent, approval, action, filing or notice
referred to in clause (a) above is obtained, taken, made or given, as
applicable, and will advise Buyer of any communications (and, unless precluded
by Law, provide copies of any such communications that are in writing) with any
Governmental Entity or other Person regarding any of the transactions
contemplated by this Agreement.
SECTION 7.02. FULFILLMENT OF CONDITIONS. Sellers and Harcke, as
applicable (a) will execute and deliver at the Closing each certificate,
document and instrument that Sellers or Harcke, as applicable, is hereby
required to execute and deliver as a condition to Closing, (b) will take all
commercially reasonable steps necessary and proceed diligently and in good faith
(i) to satisfy each condition to the obligations of Buyer contained in this
Agreement and (ii) to consummate all of the transactions contemplated by this
Agreement, and (c) will not take or fail to take any commercially reasonable
action that would reasonably be expected to result in the nonfulfillment of any
obligation of Sellers or Harcke contained in this Agreement.
SECTION 7.03. CONDUCT OF BUSINESS. Branford will, from the date hereof
until the earlier of the Closing Date or termination of this Agreement, conduct
business only in the ordinary course in a manner consistent with past practices.
Sellers will not, from the date hereof until the earlier of the Closing date or
termination of this Agreement, make any bulk sales of Inventory inconsistent
with past practice to any third party without the express prior written consent
of Buyer.
SECTION 7.04. CERTAIN RESTRICTIONS. Branford will, from the date hereof
until the earlier of the Closing Date or termination of this Agreement, refrain
from:
(a) amending its articles of incorporation or bylaws (or other
comparable charter documents) or taking any action with respect to any such
amendment or any recapitalization, reorganization, liquidation or dissolution,
except as specifically contemplated by this Agreement;
(b) except as specifically contemplated by this Agreement, authorizing,
issuing, selling or otherwise disposing of any shares of capital stock or other
equity security of Branford or any security convertible into or exchangeable or
exercisable for any shares of capital stock or other equity security of
Branford;
(c) engaging with any Person in any merger or other business
combination, or purchase substantially all of the assets of, or otherwise
acquire any material assets or business of any corporation, partnership,
association or other business organization or division thereof;
(d) making capital expenditures or commitments for additions to
property, plant or equipment constituting capital assets which exceed $5,000 in
the aggregate;
(e) entering into, modifying in any material respect or terminating any
Contract requiring payments to or by Branford in an amount in excess of $5,000,
other than such Contracts that are terminable without material cost or penalty
to Branford without more than 30 days notice; provided, however, in the event
that Branford provides written notice to Buyer requesting Buyer's consent to
enter into, materially modify or terminate any material Contract for which such
execution, modification or termination would otherwise be prohibited by this
SECTION 7.04(e) (which notice shall include a copy of the new or amended
Contract or otherwise describe the material terms of any requested action by
Branford), Buyer shall have three (3) Business Days to notify Branford that
Buyer does not consent to such action and, unless such written notice is
delivered to Seller on or before the close of business of such third business
day, such consent shall be deemed to be granted and it shall not be a breach of
this SECTION 7.04(e) for Branford to enter into, modify or terminate such
Contract as described, and on the terms specified, in Branford's written notice
to Buyer;
(f) making any change in any method of accounting or accounting
practice;
(g) mortgaging, pledging or encumbering or selling, assigning,
transferring, conveying, leasing or otherwise disposing of any material Acquired
Assets except in the ordinary course of business or as contemplated by this
Agreement;
(h) except as otherwise required by law, taking any action with respect
to the grant of any severance or termination pay (otherwise than pursuant to the
terms of Branford's Plans in
effect on the date hereof and made available to Purchaser) which will become due
and payable after the Closing Date;
(i) hiring any additional officer or terminating existing officers;
(j) adopting, entering into or amending in any material respect any of
Branford's Plans;
(k) making any loans or advances to any Person, except for advances to
any employee of Branford with respect to expenses incurred on behalf of Branford
in the ordinary course of business or in the usual course of such employee's
employment;
(l) making any income tax election;
(m) declaring, paying or incurring any obligation to declare or pay any
dividend or other distribution on its capital stock or making or incurring any
obligation to make any redemption with respect to, or purchase of, any share of
its capital stock;
(n) entering into any line of business other than the business of
Branford as of the date hereof;
(o) paying the principal amount of any Indebtedness of Branford other
than as expressly required by the terms thereof or repayment of working capital
borrowings in the ordinary course;
(p) take any action that would have a Material Adverse Effect on the
title to or the condition of the Real Property; or
(q) entering into any Contract to do or engage in any of the foregoing;
provided, however, that nothing contained in this Agreement shall in any way
prohibit or restrict Branford from, to the extent necessary, paying consent,
modification or waiver fees in respect thereto or in respect of SECTION 7.01.
SECTION 7.05. NO SOLICITATION. From the date hereof through the Closing
Date or earlier termination of this Agreement pursuant to SECTION 14.01, neither
Sellers nor Harcke shall, or shall knowingly permit their respective Affiliates,
officers, directors, employees, representatives and agents to, directly or
indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with, encourage the submission of any inquiry, proposal or offer
from any Person or entity related to the acquisition of any debt or equity
securities, or any substantial portion of the assets of Branford, or provide any
information to, any Person or group of Persons (other than Buyer or any of its
Affiliates) in furtherance of any merger, sale of assets, sale of shares of
capital stock or similar transactions involving Branford. Either Seller or
Harcke, as the case may be, will notify Buyer immediately if any person or
entity makes any proposal, offer, inquiry, or contact with respect to any of the
foregoing.
SECTION 7.06. USE OF NAMES. Sellers shall take any and all actions as may
be necessary to transfer exclusive use of the names "Branford Wire &
Manufacturing Company" and "B&S Sales" to Buyer. On and after the Closing Date,
Sellers shall cease any use of the names
"Branford Wire & Manufacturing Company" and "B&S Wire Rod Sales" and shall amend
their relevant organizational documents to change all relevant names to a name
that is not confusingly similar to either.
SECTION 7.07. POST-CLOSING OPERATIONS. For a period of forty-five (45)
days following the Closing Date, Sellers hereby irrevocably grant, authorize and
license Buyer (as its contractor or otherwise), to the extent Buyer and Sellers
are entitled to do so under applicable Laws, at Buyer's option, to operate the
Business under any or all of Sellers' Licenses and Permits and interstate and
intrastate operating authorities (and license plates). Sellers shall not take
any action to terminate, abandon or revoke any of such Licenses or Permits or
operating authorities during such 45-day period, except as may be required by
applicable Law.
SECTION 7.08. NOTIFICATION.
(a) Between the date of this Agreement and the Closing Date, Sellers
and Harcke will promptly notify Buyer in writing if they or any of them become
aware after the date of this Agreement of the occurrence of any event that would
(except as expressly contemplated by this Agreement) cause or constitute a
breach of any representation or warranty of Sellers or Harcke contained in this
Agreement had such representation or warranty been made as of the time of the
occurrence of such event.
(b) Between the date of this Agreement and the Closing Date, Sellers
and Harcke will promptly notify Buyer of the occurrence of any breach of any
covenant of such party in this ARTICLE VII or of the occurrence of any event
that may make the satisfaction of the conditions in ARTICLE IX impossible or
unlikely.
ARTICLE VIII.
COVENANTS OF BUYER
Buyer covenants and agrees with Seller that, at all times from and after
the date hereof, Buyer will comply with all covenants and provisions of this
ARTICLE VIII.
SECTION 8.01. ACCESS. After the Closing, Buyer shall permit Sellers and
Harcke and their representatives to have access, during regular business hours
and upon reasonable advance notice, to all books and records of Sellers for any
purpose relating to taxes or regulatory matters, and shall furnish, or cause to
be furnished, to Sellers or Harcke such other information that is available as
Sellers or Harcke shall from time to time reasonably request. In addition, Buyer
shall provide Sellers with reasonable access to Buyer's controller to provide
accounting support to Sellers for six (6) months following Closing at a mutually
agreed upon fee.
SECTION 8.02. FULFILLMENT OF CONDITIONS. Buyer, (a) will execute and
deliver at the Closing each certificate, document and instrument that Buyer, as
applicable, is hereby required to execute respectively, and deliver as a
condition to the Closing, (b) will promptly and affirmatively take all
commercially reasonable steps necessary and proceed diligently and in good faith
(i) to satisfy each other condition to the obligations of Sellers and Harcke
contained in this Agreement and (ii) to consummate all of the transactions
contemplated in this Agreement, and (c) will not take or fail to take any
commercially reasonable action that would reasonably be
expected to result in the nonfulfillment of any obligation of Buyer, as
applicable, contained in this Agreement.
SECTION 8.03. EMPLOYEE MATTERS.
(a) Buyer shall have the right, but not the obligation, to offer
employment to all active full-time and part-time employees of Sellers who work
in the Business as of the Closing, with all such employees who accept Buyer's
offer of employment at or immediately following the Closing being the "HIRED
EMPLOYEES."
(b) Effective on the Closing Date, Buyer shall provide Hired Employees
the opportunity to participate in employee benefit plans, programs and
arrangements substantially similar to those provided by Sellers prior to Closing
("BUYER BENEFIT PLANS"). Buyer shall waive any requirements or conditions under
the Buyer Benefit Plans that relate to length of service or waiting periods in
such Buyer Benefit Plans subject to any requirements under applicable insurance
contracts.
(c) Hired Employees shall receive credit for all purposes, including,
without limitation, eligibility to participate, vesting, and eligibility to
receive benefits, under any employee benefit plan, program or arrangement
(including vacation benefits) offered within one (1) year following the Closing
Date to such Hired Employees by Buyer for service accrued or deemed accrued
prior to the Closing Date with Sellers; provided, however that such crediting of
service shall not operate to duplicate any benefit or funding of any such
benefit for any period of service.
(d) Branford shall fully vest all employees participating in its
Tax-qualified Code Section 401(a) plan as of the Closing. Branford shall
terminate its Tax-qualified Code Section 401(a) plan in accordance with its
terms, as soon as practicable on or after the Closing Date and, in any event,
within sixty (60) days following the Closing Date. Buyer's Tax-qualified Code
Section 401(a) retirement plan will accept eligible direct rollover
distributions from Branford's Tax-qualified Code Section 401(a) plan, with
respect to distributions to Hired Employees from such plan, on receipt of a
statement from Branford on or about the time such distributions are rolled into
Buyer's Tax-qualified Code Section 401(a) retirement plan that such plan
continues to meet the requirements of Code Section 401(a).
(e) Buyer shall not be responsible for any obligation, whether arising
prior to or after the Closing Date, with respect to those employees of any
Seller to whom Buyer does not offer employment or who do not accept Buyer's
offer of employment at the Closing ("TERMINATED EMPLOYEES"). Sellers shall be
solely responsible and liable for providing any and all severance payments or
other benefits to Terminated Employees, including, without limitation, any
medical and/or health benefits required under COBRA, arising from or with any
qualifying event (as defined under COBRA) which occurred on or before the
Closing Date.
(f) Sellers shall be responsible for all claims, charges, complaints or
suits of any nature whatsoever by Hired Employees, Terminated Employees or
former employees that arose out of or in the course of the employment or other
relationship, or termination of such employment or other relationship, with
Sellers on or prior to the Closing Date.
SECTION 8.04. ASSUMED LIABILITIES. Buyer will timely pay and perform the
Assumed Liabilities in accordance with their terms.
ARTICLE IX.
CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of Buyer hereunder are subject to the fulfillment, at or
before the Closing, of each of the following conditions (all or any of which may
be waived in whole or in part by Buyer in its sole discretion):
SECTION 9.01. REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties made by Sellers and Harcke in this Agreement shall be true and
correct as of the Closing.
SECTION 9.02. PERFORMANCE. Sellers and Harcke shall have performed and
complied with the agreements, covenants and obligations required by this
Agreement to be so performed or complied with by Sellers and Harcke, as the case
may be, at or before the Closing.
SECTION 9.03. CLOSING DELIVERIES. All deliveries by Seller pursuant to
SECTION 4.02 have been delivered.
SECTION 9.04. LAWS. There shall not be in effect on the Closing Date any
Law restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement.
SECTION 9.05. REGULATORY CONSENTS AND APPROVALS. All consents, approvals
and actions of, filings with and notices to any Governmental or Regulatory
Authority necessary to permit Buyer, Sellers and Harcke to perform their
respective obligations under this Agreement and to consummate the purchase and
sale of the Acquired Assets contemplated hereby as set forth on SCHEDULE 9.05
shall have been duly obtained, made or given and shall be in full force and
effect, and all terminations or expirations of waiting periods imposed by any
Governmental or Regulatory Authority necessary for the consummation of the
transactions contemplated by this Agreement shall have occurred.
SECTION 9.06. NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date,
there shall not have occurred any event or circumstance which, individually or
in the aggregate, had or would reasonably be expected to have a Material Adverse
Effect on Sellers or any of the Acquired Assets.
SECTION 9.07. BALANCE SHEET. There shall be no extraordinary adverse
changes in the financial condition of any Seller from that set forth on the
Interim Balance Sheet, except for changes resulting from business done in the
ordinary course consistent with past practice.
SECTION 9.08. BULK SALES COMPLIANCE. Sellers shall have complied with all
applicable bulk sales or bulk transfer laws in a manner that is satisfactory to
Buyer and shall have delivered to Buyer on or prior to the Closing Date evidence
of such compliance in form and substance satisfactory to Buyer and its counsel.
SECTION 9.09. APPROVAL OF BOARD OF DIRECTORS. The purchase of the
Acquired Assets shall have been approved by the Board of Directors of Xxxxxx
International, Inc.
ARTICLE X.
CONDITIONS TO OBLIGATIONS OF SELLERS AND HARCKE
The obligations of Sellers and Harcke hereunder are subject to the
fulfillment, at or before the Closing, of each of the following conditions (all
or any of which may be waived in whole or in part by Sellers and/or Harcke, as
the case may be, in its or his sole discretion):
SECTION 10.01. REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties made by Buyer in this Agreement shall be true and correct as of
the Closing Date.
SECTION 10.02. PERFORMANCE. Buyer shall have performed and complied with
the agreements, covenants and obligations required by this Agreement to be so
performed or complied with by Buyer as applicable at or before the Closing.
SECTION 10.03. LAWS. There shall not be in effect on the Closing Date any
Law restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement.
SECTION 10.04. REGULATORY CONSENTS AND APPROVALS. All consents, approvals
and actions of, filings with and notices to any Governmental Entity necessary to
permit Sellers, Harcke and Buyer to perform their obligations under this
Agreement and to consummate the transactions contemplated hereby, shall have
been duly obtained, made or given and shall be in full force and effect and all
terminations or expirations of waiting periods imposed by any Governmental or
Regulatory Authority necessary for the consummation of the transactions
contemplated by this Agreement shall have occurred.
ARTICLE XI.
EXCESS INVENTORY
SECTION 11.01. PROCEDURES FOR STORAGE AND DISPOSITION OF EXCESS INVENTORY.
For a period of thirty-six (36) months following the Closing Date, title and
risk of loss and/or damage to the Excess Inventory shall remain with Carolina
Industries unless and until purchased by Buyer in accordance with this ARTICLE
XI. During such time period, the Excess Inventory shall be dealt with according
to the following procedures:
(a) The Excess Inventory shall be stored at Buyer's facility located at
000 X. Xxxxxxx Xxxx, Xxxxxxxx Xxxx, XX 00000-0000 (the "STORAGE SITE") and shall
be segregated from Buyer's inventory located at the Storage Site.
(b) The Excess Inventory shall be classified by industrial alloy
identification and size, and Buyer shall purchase such materials from no party
other than Carolina Industries to the extent that there are materials of the
same industrial alloy identification and size remaining in
Excess Inventory at the time of such purchase, except for those commitments to
purchase such materials that remain open at Closing and are assumed by Buyer.
(c) The purchase price Buyer shall pay to Carolina Industries for any
Excess Inventory purchased pursuant to this ARTICLE XI shall be the Replacement
Cost of such material. For purposes of this ARTICLE XI, "REPLACEMENT COST" shall
mean the average replacement cost, including material costs and alloy
surcharges, quoted by one foreign and one domestic manufacturer of material of
the same industrial alloy identification number and size from a reputable
provider of such materials. The purchase price for Excess Inventory purchased by
Buyer in accordance with this ARTICLE XI shall be payable to Carolina Industries
within ten (10) days of the date of any such purchase.
(d) In the event that Buyer removes any Excess Inventory from the
Storage Site or destroys or damages any Excess Inventory by any intentional act
or by its negligence, Buyer shall be immediately obligated to purchase the
portion of the Excess Inventory so removed, damaged or destroyed. Buyer shall
not be obligated to purchase any Excess Inventory removed by Carolina Industries
or damaged or destroyed by the intentional act or negligence of Carolina
Industries.
(e) After the closing and continuing until such time as all Excess
Inventory has been sold, Carolina Industries, upon reasonable written request,
shall have access to the inventory and sales records of Buyer that are
reasonably necessary to determine Buyer's compliance with the provisions of this
ARTICLE XI.
(f) Carolina Industries shall have the right to sell the Excess
Inventory to any third party, whether such third party is related or unrelated
to Buyer. In addition, Buyer shall have a right of first refusal to purchase any
amounts of Excess Inventory offered to be sold to any such third party on either
(in Buyer's sole discretion) (i) the terms and conditions set forth in this
ARTICLE XI or (ii) the terms upon which Carolina Industries offered such amounts
of Excess Inventory to such third party. Prior to any proposed sale of Excess
Inventory to a third party, Carolina Industries shall, at least one (1) Business
Day prior to the consummation of such proposed sale, report to Buyer in writing
the details of such proposed sale, including the amount, industrial alloy
identification and size of the Excess Inventory to be sold as well as the
proposed terms and conditions of such sale, and shall not consummate any such
proposed sale before expiration of such one (1) Business Day period.
(g) Upon reasonable prior written request, Buyer shall load Excess
Inventory sold to any third party onto Carolina Industries trucks at no cost to
Carolina Industries. Carolina Industries shall make all arrangements for truck
and rail transportation of any Excess Inventory sold to a third party from the
Storage Site and pay any and all shipping and handling charges incurred FOB the
Storage Site.
(h) Until all Excess Inventory has been sold, Carolina Industries shall
have the right to conduct periodic physical inventories and audits of the Excess
Inventory. Buyer shall cooperate with Carolina Industries in any such
inventories and audits, including making available such personnel and equipment
as may be reasonably necessary to allow Carolina Industries to access, move and
count such Excess Inventory. Buyer shall also allow Carolina
Industries to consult with Buyer's personnel regarding the disposition of excess
inventory upon reasonable prior request.
(i) At the end of the thirty-six (36) month period following the
Closing Date, Buyer shall purchase from Carolina Industries all Excess Inventory
then remaining upon the terms and conditions set forth in this SECTION 11.01.
SECTION 11.02. COMPLIANCE. Each of Buyer and Carolina Industries shall
perform their obligations under this ARTICLE XI in compliance with good safety
practices and all applicable Federal, State of North Carolina and local laws,
rules, regulations and safety requirements. Buyer and Carolina Industries shall
each be responsible for acquiring at its cost any licenses, permits, franchises,
authorizations, or approvals issued by or under the authority of a Governmental
Authority that relate directly or indirectly to, or are necessary for, their
performance under this ARTICLE XI. Carolina Industries shall also comply with
all rules and regulations of Buyer while on Buyer's premises. Each of Buyer and
Carolina Industries shall be severally liable for its own failure to comply with
this SECTION 11.02, but neither Buyer nor Carolina Industries shall be liable
for any failure of the other to comply with this SECTION 11.02.
SECTION 11.03. SALES EFFORTS. Buyer shall, after the Closing Date,
continue to market and sell, for its own account, raw materials of the same
industrial alloy identification and size as those contained in Excess Inventory
at prices and on other terms determined by Buyer from time to time, utilizing
Buyer's employee, Xxx Xxxxxx, for so long as Xx. Xxxxxx continues to be employed
by Buyer.
SECTION 11.04. OFFSET OF RETURNS FOR CREDIT. In the event that any returns
for credit are received and made by Buyer with respect to sales of inventory
made by any Seller prior to the Closing Date, Buyer shall be entitled to an
offset against any amounts to be paid to Carolina Industries for Excess
Inventory purchased by Buyer pursuant to this ARTICLE XI in an amount equal to
the amount of the credit given to such customer MINUS any scrap or resale value
for such returned inventory which value is received by Buyer.
ARTICLE XII.
OTHER AGREEMENTS
SECTION 12.01. TAX RETURNS; COOPERATION ON TAX MATTERS. Sellers and Harcke
shall prepare and file or cause to be prepared and filed with the appropriate
Tax authority all Tax Returns required to be filed by Sellers or Harcke with
respect to any period ending on or prior to the Closing Date, including without
limitation the federal and state corporate and individual Tax Returns for
Sellers and Harcke for the calendar year 2004, and shall timely pay all Taxes
shown to be due on such Tax Returns. Sellers shall furnish or cause to be
furnished to Buyer, as promptly as practicable, whether before or after the
Closing Date, such information and assistance relating to the Business as is
reasonably necessary for the preparation and filing by the Buyer of any Tax
Return, claim for refund, or other required or optional filings relating to Tax
matters, for the preparation by Buyer for, and proof of facts during, any Tax
audit, for the preparation by Buyer for any Tax protest, for the prosecution or
defense by Buyer of any suit or
other proceeding relating to Tax matters, or for the answer by Buyer to any
Governmental Entity inquiry relating to Tax matters.
SECTION 12.02. FILES AND RECORDS. Buyer shall retain possession of all
Files and Records transferred to Buyer hereunder and coming into existence after
the Closing Date which relate to the Business before the Closing Date, for a
period up to and not to exceed the time period which is statutorily required by
law for such Files and Records.
SECTION 12.03. CERTAIN COSTS. Buyer shall bear the cost of the title
insurance policies and surveys and the Site Assessment required to be delivered
at Closing under ARTICLE IV.
SECTION 12.04. PAYMENT OF DEBTS. Sellers will pay all debts due and owing
and will use the net proceeds from the Sale of Assets hereunder to pay or
provide for payment of all debts and obligations of Sellers.
SECTION 12.05. COLLECTION OF CERTAIN ACCOUNTS RECEIVABLE.
(a) For a period of one (1) year after the Closing Date, Buyer agrees
to use reasonable commercial efforts to collect Excluded Accounts Receivable in
a manner consistent with the manner in which Buyer collects current accounts
receivable for its own account, but in no event shall Buyer be obligated to
employ a collection agency, engage counsel or institute any other extraordinary
collection efforts or litigation to collect any Excluded Accounts Receivable.
All amounts received by Buyer from any account debtor who is obligated on any
Excluded Accounts Receivable during the one (1) year period following the
Closing Date shall be applied to the Excluded Accounts Receivable or to the
accounts receivable of Buyer as directed by the account debtor in its
transmittal of the applicable payment or otherwise; provided, however, if such
account debtor fails to specifically direct the application of its payment in
its transmittal, the payment shall be applied to the account receivable of Buyer
with respect to such account debtor and then to any Excluded Accounts Receivable
of such account debtor.
(b) Ninety-five percent (95%) of any amounts received by Buyer in
respect of any Excluded Accounts Receivable during the one-year period following
the Closing Date will be remitted to Sellers by Buyer on a monthly basis. From
and after the date which is one (1) year after the Closing Date through the date
that is three (3) years after the Closing Date, eighty percent (80%) of any
amounts received by Buyer in respect of any Excluded Accounts Receivable will be
remitted to Sellers by Buyer on a monthly basis. From and after the date that is
three (3) years after the Closing Date, Buyer shall be relieved of any and all
obligations to remit to Sellers any amount received with respect to any Excluded
Accounts Receivable.
(c) Buyer shall not have any obligation to make any efforts to collect
any Uncollectible Accounts Receivable. Notwithstanding the foregoing, eighty
percent (80%) of any amounts collected by Buyer in respect of any Uncollectible
Accounts Receivable during the three (3) year period following the Closing Date
will be remitted to Sellers by Buyer on a monthly basis. From and after the date
which is three (3) years after the Closing Date, Buyer shall be relieved of any
and all obligations to remit to Sellers any amount collected with respect to any
Uncollectible Accounts Receivable.
(d) On the Closing Date, Sellers shall deliver to Buyer a written list
setting forth all of the Uncollectible Accounts Receivable, including the name
and address of the account debtor, the invoice date and the outstanding balance
as of the Closing Date of each Uncollectible Accounts Receivable, and such other
information as the parties shall otherwise agree.
SECTION 12.06. COSTS OF CLEAN-UP OF PCP CONTAMINATION. Sellers and Buyer
are aware of certain pentachlorophenol ("PCP") contamination on the Real
Property. Buyer shall control and direct any and all investigation, remediation,
clean-up, monitoring and all such other actions as may be required by the State
of North Carolina to obtain a closure letter or other documentation stating that
all Environmental Requirements in any way relating to the PCP contamination have
been satisfied and no further obligations exist on the part of Buyer. Sellers
shall either pay directly or reimburse Buyer, as the parties shall mutually
agree, for any and all costs of the investigation, remediation, clean-up,
monitoring and all such other actions as described above up to a maximum of Five
Hundred Thousand Dollars ($500,000.00); provided that Buyer agrees to conduct
any and all such required actions in a commercially reasonable manner. In order
to secure the payment of all amounts due or to become due under this SECTION
12.06, Sellers have agreed to grant a security interest in the Excess Inventory,
to be evidenced by the Security Agreement. Sellers agree to pay the first Five
Hundred Thousand Dollars ($500,000.00) of proceeds resulting from sales of the
Excess Inventory into an escrow account with an escrow agent acceptable to Buyer
and Sellers pursuant to an escrow agreement to be executed as of the Closing
that is acceptable to Buyer and Seller that shall secure the payment of all
amount due or to become due under this SECTION 12.06. Once the principal amount
deposited by Sellers into the aforementioned escrow is equal to Five Hundred
Thousand Dollars ($500,000.00), the Security Agreement shall terminate.
ARTICLE XIII.
INDEMNIFICATION
SECTION 13.01. SURVIVAL. All representations and warranties contained in
this Agreement shall survive the execution, delivery and performance hereof,
notwithstanding any investigation conducted at any time with respect thereto,
for the longer of (a) December 31, 2007 and until the resolution of the
indemnification Claims received by the Indemnifying Party prior to such date, or
(b) in the case of the representations and warranties made in any of SECTIONS
5.07, 5.08, 5.14 5.16, 5.17 and 5.21, a period ending sixty (60) days after the
expiration of the statutory period of limitations, applicable to any matter
subject to the representations and warranties contained in those sections and
until the resolution of the indemnification Claims received by the Indemnifying
Party prior to the expiration of such period; provided, however, that the
representations and warranties set forth in SECTIONS 5.01, 5.02, 5.23 and 5.29,
shall survive indefinitely.
SECTION 13.02. INDEMNIFICATION BY SELLERS. Each Seller jointly and
severally (but not Harcke), shall indemnify and hold harmless Buyer and its
successors and assigns and their respective shareholders, employees, officers,
directors, members, representatives, Affiliates and agents from and against any
and all damages, losses, obligations, liabilities, claims, encumbrances,
penalties, costs and expenses, including reasonable attorneys' fees (and costs
and reasonable attorneys' fees in respect of any suit to enforce this provision)
(each a "CLAIM"),
arising from or relating to (a) any misrepresentation in or breach of any
representation or warranty made by Sellers or Harcke in this Agreement or any
Related Agreement; (b) nonfulfillment of any of the covenants or agreements of
Sellers or Harcke in this Agreement or any Related Agreement; (c) any liability,
obligation or commitment of any nature (absolute, accrued, contingent or other)
of Sellers or relating to the Acquired Assets or the operation of the Business
arising out of transactions entered into or events occurring prior to the
Closing, including any successor liability or responsible officer liability
asserted against Buyer for Taxes or otherwise relating to events occurring prior
to the Closing; (d) any liability, obligation or commitment under any of the
Assigned Contracts which Sellers performed or were obligated to perform prior to
the Closing; (e) any investigation, civil, criminal or administrative action,
notice or demand letter, notice of violation, or other proceeding by any
Governmental Entity with respect to ground or surface water, soil or air
contamination, the storage, treatment, release, transportation or disposal of
Hazardous Materials, or the use of underground storage tanks, aboveground
storage tanks, vaults, process tanks, other containment and associated piping
and transformers by Sellers to the extent such contamination, storage,
treatment, release, transportation, disposal or use occurred relating to any
time on or before the Closing Date; (f) any investigation, civil, criminal or
administrative action with respect to Branford's Benefit Obligations or the
Branford's Plans; (g) any COBRA obligation of Sellers arising from any
qualifying event as defined under Code Section 4980B(f)(3) and ERISA Section 603
occurring on or before the Closing Date; (h) any damage to property or injury to
Persons resulting from the presence of Excluded Assets on the Real Property past
the Closing Date, or in connection with the removal of such Excluded Assets from
the Real Property; and (h) any and all actions, suits, investigations,
proceedings, demands, assessments, audits and judgments arising out of any of
the foregoing.
In addition, each Seller shall jointly and severally indemnify and hold
Buyer harmless from and against any loss, claim, expense, damage or liability
(including reasonable attorneys' fees and expenses) to which Buyer and/or the
Acquired Assets may become subject insofar as such loss, claim, damage or
liability (or actions in respect thereof) arises out of or is based upon a
breach or alleged breach of, or failure to comply with any provision of, or to
give any notice or make any filing pursuant to, any bulk sales Law or similar
Law of any state or other jurisdiction, whether or not Sellers or Buyer attempt
to comply with such bulk sales Law. Nothing in this SECTION 13.02 shall estop or
prevent either Sellers or Buyer from asserting as a bar or defense to any action
or proceeding brought under any state bulk sales Law that such Law is not
applicable to the transactions contemplated by this Agreement.
SECTION 13.03. INDEMNIFICATION BY BUYER. Buyer shall indemnify and hold
harmless Sellers and Harcke and their respective successors and assigns and
their respective shareholders, officers, directors, representatives, Affiliates
and agents from and against any and all Claims resulting from or relating to (a)
any misrepresentation in or breach of any representation or warranty made by
Buyer in this Agreement or any Related Agreement; (b) nonfulfillment of any of
the covenants or agreements of Buyer in this Agreement or any Related Agreement,
(c) any liability, obligation or commitment under any of the Assigned Contracts
which Buyer assumed and was obligated to perform after the Closing; and (d) any
and all suits, actions, investigations, proceedings, demands, assessments,
audits and judgments arising out of any of the foregoing.
SECTION 13.04. PROCEDURE. Promptly after acquiring knowledge of any Claim
for which one of the parties hereto (the "INDEMNIFIED PARTY") may seek
indemnification against another party (the "INDEMNIFYING PARTY") pursuant to
this ARTICLE XIII, the Indemnified Party shall give written notice thereof to
the Indemnifying Party. Failure to provide written notice shall not relieve the
Indemnifying Party of its obligations under this ARTICLE XIII except to the
extent that the Indemnifying Party demonstrates actual damage caused by that
failure. The Indemnifying Party shall have the right to assume the defense of
any Claim with counsel reasonably acceptable to the Indemnified Party upon
delivery of written notice to that effect to the Indemnified Party. If the
Indemnifying Party, after written notice from the Indemnified Party, fails to
take timely action to defend the action resulting from the Claim, the
Indemnified Party shall have the right to defend the action resulting from the
Claim by counsel of its own choosing, but at the cost and expense of the
Indemnifying Party. The Indemnified Party shall have the right to settle or
compromise any Claim against it, and, as the case may be, recover from the
Indemnifying Party any amount paid in settlement or compromise thereof, if it
has given written notice thereof to the Indemnifying Party and the Indemnifying
Party has failed to take timely action to defend the same. The Indemnifying
Party shall have the right to settle or compromise any claim against the
Indemnified Party without the consent of the Indemnified Party.
SECTION 13.05. BUYER RIGHT TO OFFSET. Buyer shall have the right to offset
any amount owing to it under SECTION 12.06 and/or this ARTICLE XIII against any
amount to be paid to Branford under ARTICLE XI.
ARTICLE XIV.
TERMINATION
SECTION 14.01. TERMINATION. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned:
(a) at any time before the Closing, by mutual written agreement of
Buyer, Sellers and Harcke;
(b) at any time before the Closing without liability to the terminating
party, by Buyer, Sellers or Harcke, in the event that any Law becomes effective
and no longer subject to appeal or further administrative or judicial
reconsideration or review, restraining, enjoining or otherwise prohibiting or
making illegal the consummation of any of the transactions contemplated by this
Agreement upon notification of the non-terminating party by the terminating
party;
(c) at any time before the Closing, by notice given by Buyer, Sellers
or Harcke (i) in the event of a breach of this Agreement or any Real Estate
Purchase Agreement by the non-terminating party which would reasonably be
expected to have a Material Adverse Effect on the terminating party, if such
non-terminating party fails to cure such breach within ten (10) Business Days
following notification thereof by the terminating party or (ii) upon the
satisfaction of any condition to the terminating party's obligations under this
Agreement or any Real Estate Purchase Agreement becoming impossible or
impracticable with the use of commercially reasonable efforts, if the failure of
such condition to be satisfied is not caused by a breach of this Agreement or
any Real Estate Purchase Agreement by the terminating party.
SECTION 14.02. EFFECT OF TERMINATION. If this Agreement is validly
terminated pursuant to SECTION 14.01 above, this Agreement will forthwith become
null and void, and, except as set forth in the next sentence, there will be no
liability or obligation on the part of Buyer, Sellers or Harcke (or any of their
respective officers, directors, employees, agents or other representatives or
Affiliates) in respect to this Agreement, except that the provisions with
respect to expenses in SECTION 15.03 below and confidentiality in SECTION 15.01
below will continue to apply following any such termination. Notwithstanding any
other provision in this Agreement or any Real Estate Purchase Agreement to the
contrary, upon termination of this Agreement pursuant to clauses (c) or (d) of
SECTION 14.01 above, Sellers and Harcke will remain liable to Buyer as the case
may be, for any breach of this Agreement or any Real Estate Purchase Agreement
by any Seller or Harcke, as the case may be, existing at the time of such
termination, Buyer will remain liable to Sellers and Harcke, as the case may be,
for any breach of this Agreement or any Real Estate Purchase Agreement by Buyer
existing at the time of such termination, and Buyer, Sellers or Harcke, as the
case may be, may seek such remedies, including damages and attorneys' fees,
against the other with respect to any such breach as are provided in this
Agreement or the Real Estate Purchase Agreement or as are otherwise available at
Law or in equity.
ARTICLE XV.
MISCELLANEOUS
SECTION 15.01. CONFIDENTIAL INFORMATION. Each party hereto agrees that it
will treat in confidence all documents, materials and other information
regarding the other parties which it shall have obtained during the course of
the negotiations leading to the consummation of the transactions contemplated by
this Agreement and the Related Agreements (whether obtained before or after the
date hereof) or the preparation of this Agreement and the Related Agreements.
The obligation of each party to treat such documents, materials and other
information in confidence shall not apply to any information which (a) such
party can demonstrate was already lawfully in its possession prior to the
disclosure thereof by the other parties, (b) is known to the public and did not
become so known through any violation of a legal obligation, (c) became known to
the public through no fault of such party, (d) is later lawfully acquired by
such party from other sources, (e) is required to be disclosed under the
provisions of any state or United States statute or regulation issued by a duly
authorized agency, board or commission thereof, or (f) is required to be
disclosed by a rule or order of any court of competent jurisdiction.
SECTION 15.02. PUBLIC ANNOUNCEMENTS. Neither Buyer, Sellers nor Harcke
shall make any press release or public announcement concerning the transactions
provided for in this Agreement except as expressly mutually agreed upon by
Buyer, Sellers and Harcke.
SECTION 15.03. EXPENSES. Except as otherwise provided herein, each of the
parties hereto shall pay its own expenses in connection with this Agreement and
the transactions contemplated hereby, including any legal and accounting fees.
SECTION 15.04. UTILITIES PRORATION. Buyer shall be solely responsible for
all utility charges with respect to the Business on and after the Closing Date.
Sellers shall use commercially reasonable efforts to have meters for
electricity, telephone, gas and water read as of the close of business on the
day before the Closing Date or the opening of business on the
Closing Date and for bills to be rendered to Sellers based upon such readings.
To the extent such meter readings are not used as the basis for calculating all
such charges, the electricity, telephone, gas and water utility charges shall be
pro-rated as of the opening of business on the Closing Date between Sellers and
Buyer (based upon the number of days in applicable pre-Closing and post-Closing
periods.)
SECTION 15.05. REASONABLE EFFORTS; COOPERATION. Subject to the terms and
conditions of this Agreement, each party will use its commercially reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary or desirable under applicable Laws and regulations to
consummate the transactions contemplated by this Agreement. The parties each
agree to execute and deliver such other documents, certificates, agreements and
other writings and to take such other actions as may be necessary or desirable
in order to consummate or implement expeditiously the transactions contemplated
by this Agreement, and from time to time, upon the request of the other parties
to this Agreement and without further consideration, to execute, acknowledge and
deliver in proper form any further instruments, and take such other action as
the other parties may reasonably require, in order to effectively carry out the
intent of this Agreement.
SECTION 15.06. NOTICES. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given (a) on the date of service if served personally on the
party to whom notice is to be given, (b) on the day of transmission if sent via
facsimile transmission to the facsimile number provided following the parties'
signatures on the signature pages hereto, provided that telephonic confirmation
of receipt is obtained promptly after completion of transmission, (c) on the day
after delivery to a nationally recognized overnight courier service or the
Express Mail service maintained by the United States Postal Service, or (d) on
the fifth (5th) day after mailing, if mailed to the party to whom notice is to
be given, by first class mail, registered or certified, postage prepaid and
addressed as provided following the parties' signatures on the signature pages
hereto.
Any party may change its address for the purpose of this SECTION 15.06 by
giving the other parties written notice of its new address in the manner set
forth above.
SECTION 15.07. HEADINGS. The article, section and paragraph headings in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement.
SECTION 15.08. CONSTRUCTION.
(a) The parties have participated jointly in the negotiation and
drafting of this Agreement, and, in the event of an ambiguity or a question of
intent or a need for interpretation arises, this Agreement shall be construed as
if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement.
(b) Except as otherwise specifically provided in this Agreement (such
as by "sole," "absolute discretion," "complete discretion", or words of similar
import), if any provision of this
Agreement requires or provides for the consent, waiver or approval of a party,
such consent, waiver and/or approval shall not be unreasonably withheld or
delayed.
(c) Nothing in the schedules and/or exhibits to this Agreement shall be
deemed adequate to disclose an exception to a representation or warranty made
herein unless the schedule or exhibit identifies the exception with
particularity and describes the relevant facts in reasonable detail.
(d) The parties intend that each representation, warranty and covenant
herein shall have independent significance. If any party has breached any
representation, warranty or covenant contained herein in any respect, the fact
that there exists another representation, warranty or covenant relating to the
same subject matter (regardless of the relative levels of specificity) which the
party has not breached shall not detract from or mitigate the fact that the
party is in breach of the first representation, warranty or covenant, as the
case may be.
(e) Words of any gender used in this Agreement shall be held and
construed to include any other gender; words in the singular shall be held to
include the plural; and words in the plural shall be held to include the
singular; unless and only to the extent the context indicates otherwise.
(f) Any reference to any Law shall be deemed also to refer to all rules
and regulations promulgated thereunder, unless the context requires otherwise.
(g) The word "including" means "including, without limitation."
SECTION 15.09. SEVERABILITY. If any provision of this Agreement is
declared by any Governmental Entity to be null, void or unenforceable, this
Agreement shall be construed so that the provision at issue shall survive to the
extent it is not so declared and that all of the other provisions of this
Agreement shall remain in full force and effect.
SECTION 15.10. ENTIRE AGREEMENT. This Agreement contains the entire
understanding among the parties hereto with respect to the transactions
contemplated hereby and supersedes and replaces all prior and contemporaneous
agreements and understandings, oral or written, with regard to those
transactions. All exhibits and schedules hereto are expressly made a part of
this Agreement as fully as though completely set forth herein.
SECTION 15.11. AMENDMENTS; WAIVERS. This Agreement may be amended or
modified, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by the
parties hereto, or in the case of a waiver, by the party waiving compliance. Any
waiver by any party of any condition, or of the breach of any provision, term,
covenant, representation or warranty contained in this Agreement, in any one or
more instances, shall not be deemed to be or construed as a further or
continuing waiver of any condition or of the breach of any other provision,
term, covenant, representation or warranty of this Agreement.
SECTION 15.12. PARTIES IN INTEREST. Nothing in this Agreement is intended
to confer any rights or remedies under or by reason of this Agreement on any
Person other than Buyer, Sellers and Harcke and their respective successors and
assigns.
SECTION 15.13. SUCCESSORS AND ASSIGNS. No party hereto shall assign or
delegate this Agreement or any rights or obligations hereunder without the prior
written consent of the other parties hereto, and any attempted assignment or
delegation without prior written consent shall be void and of no force or
effect; provided, however, (i) Buyer may without consent assign this Agreement
and all of its rights and delegate its obligations hereunder to an Affiliate of
Buyer or to any Person who shall acquire all or substantially all of the assets
of Buyer, and (ii) Sellers consent to the assignment as security and the grant
of a security interest in all right, title and interest of Buyer in, to and
under the Agreement and all related agreements to Congress Financial Corporation
(Central), as agent, and shall execute such acknowledgement thereof as it may
request, provided that in no event shall Buyer be relieved of any obligation
hereunder. This Agreement shall inure to the benefit of and shall be binding
upon the successors and permitted assigns of the parties hereto.
SECTION 15.14. GOVERNING LAW; JURISDICTION. This Agreement shall be
construed and enforced in accordance with, and governed by, the Laws of the
State of
Indiana (without giving effect to the principles of conflicts of laws
thereof). The parties hereto irrevocably agree and consent to the non-exclusive
jurisdiction of the courts of the State of
Indiana and the federal courts of the
United States, sitting in
Indianapolis,
Indiana for the adjudication of any
matters arising under or in connection with this Agreement.
SECTION 15.15. COUNTERPARTS. This Agreement is executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
together constitute the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed, or caused to be
executed by their duly authorized representatives, this Agreement as of the date
first above written.
"SELLERS"
THE BRANFORD WIRE AND
MANUFACTURING COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Title: President
-----------------------------------------
000 X. Xxxxxxx Xx.
-----------------------
Mtn. Home NC, 28758
-----------------------
Attn: Xxxxxxx Xxxxxx, President
Tel. No. 000-000-0000
Fax No. 000-000-0000
CAROLINA INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Title: President
-----------------------------------------
000 X. Xxxxxxx Xx.
-----------------------
Mtn. Home NC, 28758
-----------------------
Attn: Xxxxxxx Xxxxxx, President
Tel. No. 000-000-0000
Fax No. 000-000-0000
"HARCKE"
/s/ Xxxxxxx X. Xxxxxx
------------------------------------------------
Xxxxxxx Xxxxxx
000 X. Xxxxxxx Xx.
-----------------------
Mtn. Home NC, 28758
-----------------------
Attn: Xxxxxxx Xxxxxx, President
Tel. No. 000-000-0000
Fax No. 000-000-0000
"BUYER"
XXXXXX WIRE COMPANY, INC.
By: /s/ Xxxxxx Xxxxxx
--------------------------------------------
Title: CFO
-----------------------------------------
0000 Xxxx Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxx, President and CEO
Tel. No. (000) 000-0000
Fax. No. (000) 000-0000
[Exhibits 4.02(g)(i) and 4.02(g)(ii) - Non-Compete Agreements, Exhibit
4.02(a) - Security Agreement, Exhibit 4.02(b) - Xxxx of Sale, Exhibit 4.02(d) -
Assignment and Assumption Agreement, Exhibit 4.02(k) - Form of opinion of
counsel to Sellers, and the Disclosure Schedules have been omitted from the
Agreement as filed with the Securities and Exchange Commission (the "SEC"). The
omitted information is considered immaterial from an investor's perspective. The
Registrant will furnish supplementally a copy of any of the omitted exhibits and
schedules to the SEC upon request from the SEC.]
