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EXHIBIT 10.10
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ASSET PURCHASE AGREEMENT
This Agreement is effective as of October 17, 1997, and made among
CRISPAIRE CORPORATION, a Georgia corporation (the "Seller"), AIRXCEL, INC., a
Delaware corporation (the "Buyer") and AIRXCEL HOLDINGS, INC. ("Holdco"), a
Delaware corporation.
RECITALS:
WHEREAS, the Seller is engaged in the business of designing,
manufacturing and selling specialty heating, air conditioning and water heating
products (the "Business");
WHEREAS, the Seller wishes to sell, and the Buyer wishes to acquire
the Business by purchasing the Assets (as hereinafter defined) and assuming
certain liabilities of the Seller comprising the Assumed Liabilities (as
hereinafter defined) upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual terms, conditions and
other agreements set forth herein Holdco, the Buyer and the Seller hereby agree
as follows:
SECTION I
DEFINITIONS AND CONSTRUCTION
1.1 Certain Definitions. When used in this Agreement:
"Accounts Receivable" means all trade accounts receivable and all
notes, bonds and other evidences of indebtedness of and rights to receive
payments arising out of sales occurring in the conduct of the Business and the
security agreements related thereto, including any rights of the Seller with
respect to any third party collection proceedings or any other Actions which
have been commenced in connection therewith.
"Actual Fraud" means knowing concealment or failure to disclose with
intent to mislead or defraud.
"Action" means any action, suit, proceeding or arbitration by any
Person or any investigation or audit by any Governmental Body.
"Affiliate" of any Person means (i) any other Person directly or
indirectly, through one or more intermediaries, controlling, controlled by or
under common control with that Person and includes (a) any partner, shareholder,
officer, director or employee of that Person, and (b) any individual related by
blood, marriage or adoption to that Person or any partner, shareholder, officer,
director or employee of that Person, (ii) any Person in which any of the
foregoing owns a beneficial interest or (iii) any corporation or other business
organization of which that Person is an officer or partner or is the beneficial
owner, directly or indirectly, of ten percent (10%) or more of any class
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of equity securities, any trust or estate in which that Person has a substantial
beneficial interest or as to which that Person serves as a trustee or in a
similar capacity. For purposes of this definition, the term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, and the terms
"controlled" and "controlling" have meanings correlative thereto.
"Assets" means all of the assets, properties and rights owned by the
Seller, or used or usable by the Seller in the operation of the Business of
every type and description, real, personal and mixed, tangible and intangible,
wherever located and whether or not reflected on the Books and Records of the
Seller, other than the Excluded Assets.
"Assumed Liabilities" has the meaning specified in Section 2.3.
"Bard Litigation" means the civil action Bard Manufacturing Company
and Airxchange, Inc. (plaintiffs) v. Crispaire Corporation d/b/a Marvair
(defendant) in the US District Court for the Northern District of Ohio, #3:95 CV
7103 (XXXX, J.) and any associated suits and proceedings.
"Base Rate" means the rate of interest announced from time to time
by Nationsbank, N.A. as its prime commercial lending rate.
"Books and Records" of any Person means all files, documents,
instruments, papers, books and records relating to the business, operations,
conditions of (financial or other), results of operations and assets and
properties of such Person, including financial statements, Tax Returns and
related work papers and letters from accountants, budgets, pricing guidelines,
ledgers, journals, deeds, title policies, minute books, stock certificates and
books, stock transfer ledgers, contracts and other agreements, licenses,
customer and supplier lists, employee information, computer files and programs,
retrieval programs, operating data and plans and environmental studies and
plans.
"Business Day" means any day other than a Saturday, Sunday or day on
which commercial banks are authorized or required by law to close in New York.
"Cash Payment" has the meaning specified in Section 2.5(a).
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"Closing" has the meaning specified in Section 2.7.
"Closing Balance Sheet" has the meaning specified in Section 2.6(a).
"Closing Date" has the meaning specified in Section 2.7.
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"Code" means the Internal Revenue Code of 1986, as amended.
"Contracts" means all legally binding arrangements, including
executory contracts, agreements, indentures, notes, bonds, loans, instruments,
leases, mortgages, franchises, plans, permits, licenses or commitments (whether
written or oral, express or implied).
"Documents" means any document, agreement, instrument, certificate,
notice, consent, affidavit, letter, telegram, telex, statement, schedule
(including any Schedule to this Agreement) or exhibit (including any Exhibit to
this Agreement).
"Xxxxxxx Deposit" means an amount of $50,000.00 to be deposited by
the Buyer with Nationsbank, N.A. pursuant to Section 5.4.
"Environmental Lien" means a Lien, either recorded or unrecorded, in
favor of any Governmental Body, relating to any Liability of the Seller arising
under Environmental Requirements.
"Environmental Requirements" shall mean federal, state and local
statutes, regulations, ordinances and similar provisions having the force or
effect of law, all judicial and administrative orders and determinations and all
contractual obligations and all common law existing on or prior to the Closing
Date applicable to the Seller, the Business or the Assets concerning pollution
or protection of the environment, including without limitation all those
relating to the presence, use, production, generation, handling, transport,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, Release, threatened Release, control, or cleanup of any hazardous
materials, substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Escrow Agreement" has the meaning specified in Section 2.5(a).
"Excluded Assets" has the meaning specified in Section 2.2.
"Excluded Liabilities" has the meaning specified in Section 2.4.
"Financial Statements" means the financial statements delivered
pursuant to Section 3.6(a).
"GAAP" means generally accepted accounting principles applied on a
consistent basis.
"Governmental Body" means court, tribunal, arbitrator or any
government or political subdivision thereof, whether federal, state, county,
local or foreign, or any agency, authority, official or instrumentality of any
such government or political subdivision or any entity exercising executive
legislative, judicial, regulatory or administrative function of government.
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"Improvements" means all buildings, structures, facilities, fixtures
and other improvements.
"Indebtedness" means indebtedness for borrowed money incurred or
accrued before the Closing Date including bank lines of credit, the current
portions of any long-term debt, capitalized lease obligations (except to the
extent specifically included in the Assets), overdrafts, principal interest,
premium and penalties and includes any guarantee of or indemnity obligation for
any of the foregoing.
"Intellectual Property" means all patents, patent applications,
patent disclosures and inventions (whether or not patentable and whether or not
reduced to practice); all trademarks, service marks, logos, slogans, trade
dress, trade names and corporate names and all goodwill associated therewith;
all copyrights; all registrations, applications and renewals for any of the
foregoing; all product formulations, trade secrets, confidential information,
research information, technical and computer data, documentation and software,
financial, business and marketing plans, customer and supplier lists, training
materials (including films, brochures and printed materials), catalogs and other
advertising and promotional material) and related information and all other
proprietary rights; and all copies and tangible embodiments of the foregoing,
along with all income, royalties, damages and payments due or payable as of the
Closing Date or thereafter (including damages and payments for past, present or
future infringements or misappropriations thereof), the right to xxx and recover
for past infringements and misappropriations thereof, and any and all
corresponding rights that, now or hereafter, may be secured throughout the
world, in each case together with all books, records, drawings, recipes,
application or other indicia thereof, and in each case together with goodwill
associated therewith.
"Inventory" means inventory, raw materials, work-in-process,
finished goods, consigned goods, merchandise, products under research and
development, demonstration equipment, packaging materials and other accessories
related thereto which are held at, or are in transit from or to, the locations
at which the Business is conducted, or located at suppliers' premises or
customers' premises on consignment, in each case, which are used or held for use
in the conduct of the Business, including any of the foregoing purchased subject
to any conditional sales or title retention agreement in favor of any other
Person, together with all rights against suppliers of such inventories.
"IRS" means the Internal Revenue Service.
"Law" means any law, statute, rule, regulation, ordinance and other
pronouncement having the effect of law of the United States, any foreign country
or any domestic or foreign state, county, city or other political subdivision or
of any Governmental Body.
"Leased Real Property" means the real property (and Improvements
thereon) the subject of the Real Property Leases.
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"Liabilities" means any indebtedness, liability, claim, loss,
damage, deficiency or legal obligation, whether direct or indirect, fixed or
unfixed, xxxxxx or inchoate, liquidated or unliquidated, secured or unsecured,
accrued, absolute, contingent or otherwise.
"Lien" means any lien, pledge, hypothecation, mortgage, security
interest, claim, lease, charge, option, right of first refusal, easement,
servitude, transfer restriction under any stockholder or similar agreement,
encroachment, encumbrance or any other restriction, limitation or defect in
title whatsoever.
"Loss" or "Losses" has the meaning specified in Section 8.2.
"Material Adverse Effect" means, in the case of any Person, any
change or changes or effect or effects that individually or in the aggregate
(with respect to similar events) are or may reasonably be expected to be
materially adverse to (i) the business, assets, properties, operations, income,
prospects, condition (financial or otherwise) or customer, employee, distributor
or supplier relations of such Person or the transactions contemplated by this
Agreement or (ii) the ability of such Person to perform its obligations under
this Agreement.
"Note" has the meaning specified in Section 2.5(a).
"Order" means any writ, judgment, decree, injunction or similar
order of any Governmental Body, in each case whether preliminary or final.
"Owned Property" means all real property owned by the Seller,
together with all easements, licenses, interests, all of the rights arising out
of the ownership thereof or appurtenant thereto, and Improvements thereon.
"Permits" means all licenses, permits, franchises, approvals,
authorizations, orders, registrations, certificates, variances, consents and
similar rights (including applications therefor), utilized in the conduct of the
Business and the rights to all data and records held by any Governmental Body or
other agency with respect thereto.
"Permitted Liens" means (i) purchase money security interests in
inventory, supplies and equipment, (ii) precautionary liens filed by lessors
with respect to leased equipment, and (iii) encumbrances which are not
substantial in amount, do not materially detract from the value of the property
subject thereto and do not materially impair the use of the property subject
thereto or the operation of the Business.
"Person" means any individual, corporation, partnership, firm,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, Governmental Body or other entity.
"Plan" means any (i) employee benefit plan (as defined in Section
3(3) of ERISA), whether or not funded or terminated, (ii) employment agreement
or (iii) personnel policy, fringe
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benefit plan, program or arrangement, whether or not subject to ERISA, qualified
under the Code or not, funded or terminated, including any stock bonus, deferred
compensation, pension, severance, bonus, incentive and health, life, sick-pay,
disability or other welfare plan.
"Property Plans" means all site plans, surveys, soil substratus
studies, architectural drawings, plans and specifications, engineering,
electrical and mechanical plans and studies, floor plans, landscape plans,
appraisals, feasibility studies, and other plans and studies of any kind if
existing and in the possession or control of the Seller relating to the Real
Estate.
"Purchase Price" has the meaning specified in Section 2.5(a).
"Purchase Price Adjustment" has the meaning specified in Section
2.6(b).
"Real Estate" means the Owned Property and the Leased Real Property.
"Real Property Leases" means all leases and subleases of real
property as to which the Seller is the lessee or sublessee, together with any
options to purchase the underlying property and leasehold improvements thereon
set forth on Schedule 3.12(b) hereto, and in each case all other rights,
subleases, licenses, permits, deposits and profits appurtenant to or related to
such leases and subleases.
"Related Documents" means all documents and instruments to be
executed by the Seller, the Buyer or Holdco in connection herewith.
"Release" has the meaning set forth in CERCLA.
"Safety Requirements" shall mean such federal, state and local
statutes, regulations, ordinances and similar provisions having the force or
effect of law, all judicial and administrative orders and determinations and all
contractual obligations existing on the Closing Date, applicable to the Seller,
the Business or the Assets, and concerning public health or safety, workplace
health or the safety.
"Seller's Knowledge" means the actual knowledge of all current
directors and officers of the Seller and the knowledge which those persons
should have had after conducting all inquiries and investigations which should
have been made by any of them in the ordinary course of conduct of their
employment or appointment and otherwise in the active performance of the normal
duties and obligations of such a person bearing in mind that person's position
with the Seller; provided that the aforementioned person is not hereby required
to conduct any investigation outside the ordinary course.
"Stockholders Agreement" means the Stockholders Agreement dated as
of August 22, 1996 and made by and among Holdco and its stockholders.
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"Tax Return" means with respect to any person, any return, report,
information return, or other document (including any related or supporting
information) filed or required to be filed by that person with any federal,
state, local, or foreign governmental entity or other authority in connection
with the determination, assessment or collection of any Tax (whether or not such
Tax is imposed on that person) or the administration of any laws, regulations or
administrative requirements relating to any Tax.
"Tax" and "Taxes" means all taxes, charges, fees, levies or other
assessments imposed by any federal, state, local or foreign taxing authority,
whether disputed or not, including, without limitation, income, capital,
estimated, excise, property, sales, transfer, withholding, employment, payroll,
and franchise taxes and such terms shall include any interest, penalties or
additions attributable to or imposed on or with respect to such assessments.
"Working Capital" means the current assets less the current
liabilities of the Seller adjusted to exclude (i) from current assets, cash,
prepaid expenses, income tax refunds receivable and the current portion of
deferred income tax charges and (ii) from current liabilities, bank debt,
federal and state income taxes payable for the period through the Closing Date
and the current portion of deferred income tax credits. Working Capital shall be
calculated in accordance with Sections 1.2 and 2.6.
1.2 Accounting Principles. Each accounting term used herein shall
have the meaning that is applied thereto in accordance with GAAP and each
account included in the Closing Balance Sheet shall be calculated in accordance
with GAAP and shall be consistent with the books and records of the Seller
(which books and records shall be correct and complete); provided, that all
known errors and adjustments shall be taken into account in the calculation of
each account set forth above. With respect to the calculation of the levels of
the accounts set forth in Section 2, no change in accounting principles shall be
made from those utilized in preparing the Financial Statements including,
without limitation, with respect to the nature or classification of accounts,
closing proceedings, levels of reserves or levels of accruals other than as a
result of objective changes in the underlying business. For purposes of the
preceding sentence, "changes in accounting principles" includes all changes in
accounting principles, policies, practices, procedures or methodologies with
respect to financial statements, their classification or their display, as well
as all changes in practices, methods, conventions or assumptions utilized in
making accounting estimates.
1.3 Interpretation. The headings in this Agreement are for reference
only, and shall not affect the interpretation of this Agreement. All pronouns
and any variations thereof refer to the masculine, feminine or neuter, singular
or plural, as the context may require. References to statutes and agreements
include all amendments, extensions, restatements and waivers thereof. The
Exhibits and Schedules are a part of this Agreement as if fully set forth
herein. All references herein to Sections, subsections, clauses, Exhibits and
Schedules shall be deemed references to such parts of this Agreement, unless the
context shall otherwise require. Any item disclosed on any Schedule to this
Agreement shall only be deemed to be disclosed in connection with (a) the
specific representation and warranty to which such Schedule is expressly
referenced, (b) any specific
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representation and warranty which expressly cross-references such Schedule and
(c) any specific representation and warranty to which any other Schedule to this
Agreement is expressly referenced if such other Schedule expressly
cross-references such Schedule. Any representation in this Agreement as to the
enforceability of any Contract or other obligation or the collectibility of any
receivable is to be read as being limited by general equitable principles and by
all applicable laws relating to bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting creditors' rights generally.
SECTION II
ACQUISITION OF THE ASSETS; ASSUMPTION OF THE
ASSUMED LIABILITIES AND PURCHASE PRICE
2.1 Purchase of the Assets. On the terms and subject to the
conditions set forth in this Agreement, on the Closing Date, the Seller agrees
to sell, transfer, assign, convey and deliver to the Buyer, and the Buyer agrees
to purchase, acquire and accept from the Seller, all of the right, title and
interest as of the Closing Date of the Seller in and to the Assets. Except as
specifically excluded pursuant to Section 2.2, the Assets include, without
limitation, all of the right, title and interest of the Seller in or to (a) all
securities and other investments (other than bank account balances, money market
securities or similar short-term investments or other cash equivalents), rights
in any funds, safe deposits and security deposits made by or on behalf of the
Seller; (b) all Real Estate, Real Property Leases, Inventory, Accounts
Receivable, Intellectual Property, Permits, Property Plans, Contracts and Books
and Records which are used or useful in the conduct of the Business or otherwise
relate to the Seller or its assets; (c) all prepaid expenses and other
prepayments (excluding insurance premium refunds relating to the insurance
policies to be retained by the Seller as set forth on Schedule 3.21 hereto)
relating to the Business; (d) all tangible and other assets, properties and
rights of the Seller reflected on the Financial Statements, subject to changes
in the ordinary course of business through the Closing Date; (e) all rights of
the Seller under or pursuant to all warranties, representations and guarantees
made by suppliers, manufacturers and contractors in connection with products
sold to or services provided to the Seller, or affecting the Real Estate,
property, machinery or equipment used in the conduct of the Business; (f) all
claims, deposits, warranties, guaranties, refunds (excluding Tax refunds due to
the Seller other than those reflected in the Closing Balance Sheet), causes of
action, rights of recovery, rights of set-off and rights of recoupment of every
kind and nature; and (g) all transferable telephone exchange numbers and the
right to receive and retain mail and other communications (directed to the
Seller and not concerning Excluded Assets or Excluded Liabilities) and
collections, including mail and communications from customers, suppliers,
distributors, agents and others.
2.2 Excluded Assets. The Buyer shall not acquire and there shall be
excluded from the Assets, the Seller's interest in each of the following (the
"Excluded Assets"):
(a) The minute books, stock transfer books, corporate seals and
other similar corporate records of the Seller;
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(b) All rights of the Seller under this Agreement and the
Documents delivered to the Seller pursuant to this Agreement;
(c) Insurance policies identified on Schedule 3.21 hereto as being
retained by the Seller and all claims and rights of the Seller
thereunder;
(d) All claims related to the Excluded Liabilities or Excluded
Assets;
(e) The deposit of $265,181.00 made by the Seller with the IRS
representing payments required by the Code Section 7519 for
entities electing not to have a required taxable year; and
(f) Cash, bank account balances, money market securities or
similar short-term investments or other cash equivalents and
Tax refunds due to the Seller (except to the extent the same
are reflected in the Closing Balance Sheet).
2.3 Assumed Liabilities. Subject to the terms and conditions set
forth herein, the Buyer agrees that, on the Closing Date, the Buyer shall assume
and thereafter pay, perform or discharge out of its own funds, with no recourse
to the Seller or the Seller's shareholders except as in the case of Actual Fraud
or as provided in Section VIII, as and when due or required to be performed, as
the case may be, all undischarged Liabilities of the Seller which relate to
conduct of the Business prior to the Closing Date to the extent such liabilities
have been incurred in the ordinary course of business without violation of this
Agreement other than the Excluded Liabilities (the "Assumed Liabilities").
In the event of any claim against the Buyer with respect to any of the
Assumed Liabilities hereunder, the Buyer shall have, and the Seller hereby
assigns to the Buyer, any defense, counterclaim, or right of setoff which would
have been available to any the Seller if such claim had been asserted against
the Seller. The assumption by the Buyer of said liabilities shall not expand the
rights and remedies of any third party against the Buyer beyond those such third
party would have had but for the assumption.
2.4 Excluded Liabilities. The Buyer will not assume or discharge,
and shall have no liability for any of the following Liabilities of the Seller
or relating to the Business (collectively, the "Excluded Liabilities").
(a) any liabilities with respect to income or other Taxes imposed
on the Seller for any period and any Taxes otherwise imposed
in relation to the Business prior to the Closing Date (except
to the extent such Taxes are accrued for in the Statement of
Working Capital (as defined in Section 2.6));
(b) any liabilities with respect to Indebtedness;
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(c) any liabilities to any shareholder of the Seller or to any
Affiliate of the Seller or of any of the Seller's shareholders
(other than wages and other compensation in the ordinary
course of business and bonuses in accordance with the policy
set forth on Schedule 3.15);
(d) to the extent of coverage by the Seller's insurance policies,
any liabilities (whether asserted before or after the Closing
Date) for injury to or death of persons or damage to or
destruction of property (including, without limitation, any
worker's compensation claim) including any claim for
consequential damages in connection with the foregoing arising
from acts or omissions by the Seller which occur before the
Closing Date;
(e) to the extent of coverage, if any, by the Seller's insurance
policies, any liabilities arising out of any tort,
infringement, claim or lawsuit including any infringement,
misappropriation or other conflict with the Intellectual
Property rights of any Person (it is agreed that the Seller's
failure to adequately or timely notify its insurer(s) may
result in no coverage and in that event the matters referred
to shall not be Excluded Liabilities);
(f) any liabilities or investigatory, corrective or remedial
obligations arising under any Environmental Requirements, in
each case to the extent arising out of facts or circumstances
existing or acts or omissions occurring prior to the Closing
Date;
(g) legal fees and disbursements through the Closing Date
associated with the Bard Litigation;
(h) the brokers fees referred to in Section 3.28;
(i) any liabilities relating to the Excluded Assets; and
(j) any liabilities relating to the capital stock of the Seller or
any shareholders' agreements pertaining to the capital stock
of the Seller.
The Seller shall pay and discharge as and when due or required to be
performed out of its own funds, with no right of contribution or recourse
against the assets of the Buyer or its Affiliates, or contest in good faith at
no cost or expense to the Buyer or its Affiliates, all of the Excluded
Liabilities. The Seller acknowledges that the fact of disclosure of any
Liability in any Schedule hereto does not affect the status of such Liability as
an Excluded Liability for all purposes hereunder.
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2.5 Purchase Price.
(a) Subject to adjustment pursuant to Section 2.6, the aggregate
purchase price (the "Purchase Price") for the Assets to be acquired by the Buyer
from the Seller hereunder shall be the sum of: (i) $38,700,00.00 (the "Cash
Payment"), plus (ii) subordinated promissory notes of Holdco substantially in
the form of Exhibit A in an aggregate initial principal amount of $5,175,142.00
(collectively the "Note"), plus (iii) the assumption by the Buyer of the Assumed
Liabilities, less (iv) the amount of the Xxxxxxx Deposit. An amount of
$1,000,000 shall be deducted from the Cash Payment and deposited into escrow
pursuant to the terms of an escrow agreement substantially in the form of
Exhibit B (the "Escrow Agreement").
(b) The Cash Payment shall be paid to the Seller by the Buyer on the
Closing Date by cashiers check or by wire transfer of immediately available
funds to an account designated by Seller not less than three (3) Business Days
prior to Closing by notice to the Buyer. In addition, the Note shall be issued
to the Seller by Holdco on the Closing Date.
(c) The Purchase Price will be allocated for all purposes (including
Tax and financial accounting purposes) (x) among the Buyer and Holdco in the
manner shown in the allocation schedule attached hereto as Schedule 2.5(c) and
agreed to by the parties hereto on or before the Closing Date, and (y) among the
Assets in a manner to be agreed upon in writing by the Buyer, Holdco and the
Seller (consistent with Schedule 2.5(c)) (such written agreement the "Allocation
Schedule") as soon as practicable following the preparation of the Statement of
Working Capital (as defined below). Such allocations shall be consistent with
Section 1060 of the Code. Each of the parties hereto will not take a position on
any Tax Return, before any governmental agency charged with the collection of
any Tax, or in any judicial proceeding, that is in any way inconsistent with the
Allocation Schedule and will cooperate with each other in timely filing
consistent with such allocation on Forms 8594 with the IRS. For federal income
tax purposes, the Seller shall be deemed to have (i) sold to the Buyer an
undivided interest in the Assets transferred by it (which undivided portion will
correspond to the Cash Payment and the Assumed Liabilities, as shown on the
Allocation Schedules) and (ii) sold to Holdco an undivided interest in the
Assets transferred by it (which undivided portion will correspond to the amount
of the Note, shown on the Allocation Schedule), and Holdco shall contribute such
undivided portion to the Buyer immediately after such purchase.
2.6 Reduction of Purchase Price. (a) As promptly as practicable, but
in any event not later than sixty (60) days after the Closing, the Buyer shall
cause to be prepared and delivered to the Seller, an audited, consolidated
balance sheet of the Seller as of the Closing Date (the "Closing Balance
Sheet"), setting forth the Working Capital of the Business as at the Closing
Date (the "Statement of Working Capital"). The Closing Balance Sheet shall be
prepared from the Seller's Books and Records and in accordance with Section 1.2;
provided, however, that the Closing Balance Sheet shall not contain any accruals
or reserves for Excluded Liabilities and shall not include as an asset any
Excluded Assets. Working Capital shall be calculated and determined in a manner
consistent with the method illustrated on Schedule 2.6 and shall not include any
contingent liabilities associated with the Bard Litigation.
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(b) Subject to subsection (c) below, within twenty (20) days after
delivery to the Seller of the Closing Balance Sheet and the Statement of Working
Capital pursuant to subsection (a) above, the Seller agrees to pay to the Buyer
(i) the amount, if any, by which $9,631,766.00 exceeds the Working Capital of
the Business as at the Closing Date, plus (ii) interest on the amounts computed
pursuant to clause (i) above at the Base Rate for the period from the Closing
Date to the date of payment in full of such amount (the amounts payable pursuant
to clauses (i) and (ii) are hereinafter referred to collectively as the
"Purchase Price Adjustment"). Payments, if any, by the Seller pursuant to the
preceding sentence shall be made by wire transfer of immediately available funds
to an account or accounts designated by the Buyer. The parties shall treat any
payment made pursuant to this Section 2.6(b) as an adjustment to the Cash
Payment portion of the Purchase Price for all purposes.
(c) If the Seller in good faith disagrees with the Closing Balance
Sheet or the Statement of Working Capital, then the Seller shall notify the
Buyer in writing (the "Notice of Disagreement") of such disagreement within
twenty (20) days after delivery of the Closing Balance Sheet and the Statement
of Working Capital to the Seller. Thereafter, the Buyer and the Seller shall
attempt in good faith to resolve and finally determine the Closing Balance Sheet
and the Statement of Working Capital. If the Buyer and the Seller are unable to
resolve the disagreement within twenty (20) days after delivery of the Notice of
Disagreement, then the Buyer and the Seller shall select a mutually acceptable,
nationally recognized independent accounting firm (such accounting firm being
hereinafter referred to as the "Independent Accountant") to resolve the disputed
items and make a determination with respect thereto. Such determination will be
made, and written notice thereof given to the Buyer and the Seller, within
thirty (30) days after such selection. The determination by the Independent
Accountant shall be final, binding and conclusive upon the parties hereto. The
scope of such firm's engagement (which shall not be an audit) shall be limited
to the resolution of the items contained in the Notice of Disagreement, and the
recalculation, if any, of the Closing Balance Sheet and the Statement of Working
Capital in light of such resolution and shall be conducted in accordance with
the provisions of this Agreement and will use the definitions contained herein.
The fees, costs and expenses of the Seller and the Independent Accountant, if
any, in connection with the preparation of the Closing Balance Sheet and the
Statement of Working Capital shall be shared equally by the Buyer, on the one
hand, and the Seller, on the other hand. Within ten (10) days of delivery of a
notice of determination by the Independent Accountant as described above, any
adjustment shall be paid as provided in Section 2.6(b), and shall constitute
timely payment notwithstanding the lapse of the twenty (20) day time period set
forth in Section 2.6(b). Any portion of the Purchase Price Adjustment not in
dispute shall be paid when due in accordance with Section 2.6(b).
2.7 Closing. The consummation of the transactions contemplated
hereby (the "Closing") shall be held at 10:00 a.m. (E.S.T.) on the first
Business Day after all conditions to respective obligations of the parties have
been satisfied or waived or at such other time and date as shall be mutually
agreed to by the parties (such date and time of the Closing being herein
referred to as the "Closing Date") at the offices of Xxxxxxxx & Xxxxx, 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, XX 00000.
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SECTION III
REPRESENTATIONS AND
WARRANTIES OF THE SELLER
The Seller represents and warrants to the Buyer as follows and only
as follows. The representations and warranties which follow are deemed repeated
on the Closing Date. The fact of making the following representations and
warranties does and did not in and of itself oblige the Seller to conduct or
have conducted any investigation.
3.1 Organization and Qualification. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Georgia and has all requisite corporate power and authority to (i) own, lease
and operate its properties and assets as they are now owned, leased and
operated, (ii) carry on its business as now presently conducted and as proposed
to be conducted prior to the Closing Date and (iii) to execute and deliver this
Agreement and each Related Document to which it is a party and to carry out the
terms hereof and thereof. The Seller is duly qualified to do business in each
jurisdiction in which the nature of its business or properties makes such
qualification necessary, except where the failure to do so would not have a
Material Adverse Effect on the Seller or the Buyer. The jurisdictions in which
the Seller is so qualified are set forth on Schedule 3.1.
3.2 Validity and Execution of Agreement. Subject to approval of the
Seller's shareholders of the transactions contemplated hereby, the Seller has
the full legal right, capacity and power and the Seller has all requisite
corporate authority and approval required to enter into, execute and deliver
this Agreement and each other Related Document to which it is a party and to
perform fully its obligations hereunder and thereunder and to deliver the Assets
in accordance herewith. The board of directors of the Seller has approved the
transactions contemplated pursuant to this Agreement and each of the Related
Documents required to be entered into pursuant hereto by the Seller. Subject to
approval of the Seller's shareholders of the transactions contemplated hereby,
this Agreement has been duly executed and delivered by the Seller and
constitutes the valid and binding obligation of the Seller enforceable against
it in accordance with its terms. By proceeding with the Closing the Seller
represents and warrants that the Seller's shareholders have approved the
transactions contemplated by this Agreement and each of the Related Documents to
which the Seller is a party.
3.3 No Conflict. Except as set forth on Schedule 3.3, the execution,
delivery and performance by the Seller of this Agreement, the transactions
contemplated hereby or the Related Documents (to the extent the Seller is a
party thereto) will not: (a) violate or conflict with any of the provisions of
the Articles of Incorporation or By-Laws of the Seller; (b) violate, conflict
with, result in the acceleration of, or entitle any party to accelerate the
maturity or the cancellation of the performance of any obligation under, or
result in the creation or imposition of any Lien in or upon any of the
properties or assets of the Seller or constitute a default (or an event which
might, with the passage of time or the giving of notice, or both, constitute a
default) under any mortgage, indenture, deed of trust, lease, contract, loan or
credit agreement, license or other instrument to which the Seller
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is a party or by which it or any of its properties or assets may be bound or
affected; or (c) violate or conflict with any provision of any Law applicable to
the Seller, or require any consent or approval of or filing or notice with any
Governmental Body.
3.4 Capitalization/Subsidiaries. All of the issued and outstanding
shares of capital stock or other equity interests of the Seller are owned,
directly or indirectly, beneficially and of record by the shareholders of the
Seller as set forth on Schedule 3.4. Except as set forth on Schedule 3.4, the
Seller does not own, directly or indirectly, any capital stock of, or any other
interest in, any other Person.
3.5 Books and Records. Except as set forth on Schedule 3.5, each of
the Books and Records of the Seller as supplied to the Buyer is true, correct,
complete and current in all material respects and, as applicable, accurately
reflects all actions taken by its board of directors or other governing body and
committees thereof. The Seller has heretofore delivered to the Buyer true,
correct and complete copies of the Articles of Incorporation (certified by the
Secretary of State of Georgia) and By-Laws as in full force and effect on the
date hereof.
3.6 Financial Statements. (a) Except as set forth on Schedule
3.6(a), the balance sheets of the Seller as of fiscal year ending October 31,
1996, and the related statements of income, stockholders' equity and cash flows
for the years then ended, including the footnotes thereto, certified by Xxxxxxx
& Xxxxxxx, L.L.C., certified public accountants, true and complete copies of
which have heretofore been delivered to the Buyer, have been prepared from, and
are in accordance with, the Books and Records of the Seller, are correct and
complete and present fairly, in all material respects, the transactions, assets
and liabilities of the Seller and the financial position of the Seller as at
such dates and the results of operations and cash flows of the Seller for the
years then ended, in each case, in accordance with GAAP consistently applied for
the periods covered thereby.
(b) Except as set forth on Schedule 3.6(b), the unaudited balance
sheet of the Seller as of June 30, 1997 (the "Latest Balance Sheet") and the
related statements of income, stockholders' equity and cash flows for the period
then ended, true and complete copies of which have heretofore been delivered to
the Buyer, present fairly, in all material respects, the financial position of
the Seller as of such date and the results of operations of the Seller for the
period then ended, in each case in accordance with GAAP consistently applied for
the respective monthly periods covered thereby from the most recent fiscal year
end of the Seller.
3.7 Undisclosed Liabilities. Except as set forth on Schedule 3.7,
the Seller has no material Liability, whether or not of a kind required by GAAP
to be set forth on a financial statement, that is not fully and adequately
reflected or reserved against on the face of (as opposed to in the notes to) the
Financial Statements for the Seller, other than Liabilities incurred since the
date of the Latest Balance Sheet in the ordinary course of business without
violation of Sections 3.16 and 5.2, and fully reflected as Liabilities on the
Seller's Books and Records, none of which would have a Material Adverse Effect
on the Business.
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3.8 No Material Adverse Effect. Except as set forth on Schedule 3.8,
since the date of the Latest Balance Sheet there has been no change in the
assets, properties, business, operations, income or condition (financial or
otherwise) of the Seller, nor to the Seller's Knowledge is any such change
threatened, nor has there been any damage, destruction or loss which could have
a Material Adverse Effect on the Buyer or the Business, whether or not covered
by insurance.
3.9 Tax Matters. Except as disclosed on Schedule 3.9, for the
previous six (6) tax years the Seller has timely filed all Tax Returns required
to be filed by it, which Tax Returns are true, correct and complete in all
material respects. Except as set forth in Schedule 3.9, for the previous six (6)
tax years the Seller has timely paid all Taxes due or claimed to be due from it
by any taxing authority. There are no liens for Taxes upon the Assets or any
other assets, tangible or intangible, of the Seller. During the previous six (6)
tax years the Seller has withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, Shareholder, or other third party. The
reserves for Tax liability (rather than any reserve for deferred taxes
established to reflect timing differences between book and Tax income) shown on
the face of the Latest Balance Sheet (rather than in any notes thereto) are
sufficient for payment of all unpaid Taxes (whether or not currently disputed)
incurred with respect to the period ended June 30, 1997 and for all periods
ended prior thereto. With respect to periods commencing after June 30, 1997, the
Seller has not incurred any Liability for Taxes other than in the ordinary and
regular course of business. The Seller properly filed an election, in accordance
with the provisions of section 1362(a)(1) of the Code, to be an S corporation,
effective November 1, 1992, and all shareholder consents required by section
1362(a)(2) of the Code were properly filed. Such election has never been revoked
or otherwise terminated. Except as set forth in Schedule 3.9, there is no
examination or proceeding pending or, to the Seller's Knowledge, threatened by
any authority or agency relating to the assessment or collection of, or any
delinquencies in filing relating to, any Taxes from the Seller. Except as set
forth in Schedule 3.9, during the previous six (6) tax years the Seller has not
executed or filed any consent or agreement to extend the period of assessment or
collection of any Taxes. The Seller is not a party to any written Tax allocation
or sharing agreement.
3.10 Litigation. Except as set forth on Schedule 3.10, there are no
outstanding Orders by which the Seller, or any of its securities, assets,
properties or businesses are bound. Except as set forth on Schedule 3.10, there
is no Action pending or, to the Seller's Knowledge, threatened (whether or not
the defense thereof or liabilities in respect thereof are covered by insurance)
against or affecting the Seller or any of its assets, properties or businesses,
nor are there any facts which are likely to give rise to any such Action which
if adversely decided, could have a Material Adverse Effect on the Seller or the
Buyer.
3.11 Contracts and Other Agreements. Schedule 3.11 sets forth all of
the following types of Contracts to which the Seller is a party or by or to
which the Seller, or its assets, properties or businesses is bound or subject
(collectively, the "Material Contracts"):
(a) all employment agreements and commitments, all consulting or
severance agreements or arrangements and all other contracts
or agreements, including
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indemnification agreements, with any current or former
officer, director, employee, consultant, agent, other
representative of the Seller or with any shareholder or
Affiliate of the Seller or of any shareholder of the Seller;
(b) contracts and other agreements with any labor union or
association representing any employee;
(c) contracts and other agreements for the sale of any of its
assets or properties or for the grant to any Person of any
preferential rights to purchase any of its assets or
properties, in each case in an amount exceeding $25,000;
(d) joint venture and partnership agreements;
(e) all capitalized leases, pledges, conditional sale or title
retention agreements involving the payment of more than
$100,000;
(f) any take or pay or requirements contracts or agreements or any
other contracts or agreements requiring the Seller to pay
regardless of whether products or services are received;
(g) contracts and other agreements not cancelable without penalty
by the Seller party thereto on sixty (60) or fewer days notice
calling for an aggregate purchase price or payments to or from
the Seller in any one year of more than $25,000 in any one
case (or in the aggregate, in the case of any related series
of contracts and other agreements);
(h) contracts and other agreements with clients, customers or any
other Person for the sharing of fees, the rebating of charges
or purchase price or other similar arrangements;
(i) contracts and other agreements containing covenants pertaining
to the right to compete or not compete in any line of business
or similarly restricting the ability to conduct business with
any Person or in any geographical area;
(j) contracts and other agreements relating to the acquisition by
the Seller of any operating business or the capital stock of
any other Person;
(k) all agreements relating to the consignment or lease of
personal property (whether the Seller is lessee, sublessee,
lessor, or sublessor), other than such agreements that provide
for annual payments of less than $25,000;
(l) all licences and franchise agreements involving an amount in
excess of $25,000;
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(m) all mortgages, indentures, notes, bonds, letter of credit and
other agreements relating to the borrowing of money, creation
of Liens, any indemnity, or the guarantee of the payment of
liabilities or performance of obligations to or by the Seller,
to or by any other Person;
(n) any stockholder agreement, registration rights agreement or
any arrangement relating to or affecting the ownership of the
common stock or other equity interests of the Seller; and
(o) any other contract and other agreement made outside the
ordinary course of business relating to any one or more of the
Seller and involving an amount in excess of $25,000.
True and complete copies of all of the written Material Contracts
have been delivered to the Buyer. Except as disclosed on Schedule 3.11, all of
the Material Contracts are valid, subsisting, in full force and effect and
binding upon the Seller party thereto and, to the Seller's Knowledge, the other
parties thereto in accordance with their terms and the Seller has satisfied in
full or provided for all of its liabilities and obligations thereunder requiring
performance prior to the date hereof in all material respects, is not in
material default under any such Material Contract, nor does any condition exist
that with notice or lapse of time or both would constitute such a default. To
the Seller's Knowledge, no other party to any such Material Contract is in
material default thereunder, nor does any condition exist that with notice or
lapse of time or both would constitute such a default. Except as disclosed on
Schedule 3.11, none of the other parties to any such Material Contracts has
given notice to the Seller that it intends to terminate or materially alter the
provisions of such Material Contract. Except as separately identified on
Schedule 3.11, no approval or consent of any Person is needed for all of the
Material Contracts to continue to be in full force and effect, and subject to
any necessary approval or consent all of the rights of the Seller under such
Material Contracts will be conveyed to the Buyer upon consummation of the
transactions contemplated by this Agreement.
3.12 Real Estate.
(a) Set forth on Schedule 3.12(a) is a complete and correct legal
description of each parcel of Owned Property. The Seller has good record and
marketable title to each parcel of Owned Property included in the Real Estate.
Except as set forth on Schedule 3.12(a), none of the Owned Property is subject
to any Lien.
(b) Set forth on Schedule 3.12(b) is a list of all Real Property
Leases (a true and correct copy of each applicable Real Property Lease as in
effect as of the Closing has been delivered by the Seller to the Buyer). Except
as set forth on Schedule 3.12(b), the Seller has valid and enforceable leasehold
interests in and to all of the Leased Real Property, free and clear of all
Liens. There exists no default (nor any condition or event which with notice,
lapse of time, or both would constitute a default) with respect to any such Real
Property Lease by any party thereto. Each such Real Property Lease is in full
force and affect and subsequent to the Seller's assignment of such Real
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Property Lease to the Buyer pursuant to this Agreement, will be enforceable
against the lessor or lessee, as the case may be, in accordance with their
terms.
(c) The Real Estate constitutes all of the real property owned,
leased, occupied or otherwise utilized in connection with the Business. Other
than the Seller, there are no parties in possession or, to the Seller's
Knowledge, parties having any current or future right to occupy any of the Real
Estate, other than the landlord's rights pursuant to the terms of any lease. The
Real Estate is in operating condition and repair and is sufficient and
appropriate for the conduct of the Business as presently conducted. The Real
Estate and all plants, buildings and Improvements located thereon conform to all
applicable building, zoning and other laws, ordinances, rules and regulations.
All permits, licenses and other approvals necessary to the current occupancy and
use of the Real Estate have been obtained, are in full force and effect, and the
Real Estate and the Business are conducted in conformity therewith. Except as
set forth on Schedule 3.12(c), there exists no violation of any covenant,
condition, restriction, easement, agreement or order affecting any portion of
the Real Estate. No Improvements located on the Real Estate or accessways
encroach on land not included in the Real Estate and no such Improvement is
dependent for its access, operation or utility on any land, building or other
improvement not included in the Real Estate. There is no pending or, to the
knowledge of the Seller, threatened condemnation proceeding affecting any
portion of the Real Estate.
(d) The Seller has delivered or made available to the Buyer true,
correct and complete copies of all permits, licenses, certificates,
authorizations, certificates of occupancy, deeds, mortgages and deeds of trust,
restrictive covenants, easements and other recorded agreements relating to the
Real Estate, all surveys, Property Plans, title reports and title insurance
policies of the Seller with respect thereto and all written licenses, permits,
certificates, authorizations, contracts and other agreements listed on Schedule
3.12(d). Except as set forth on Schedule 3.12(d), the Seller has not given or
received any citation, subpoena, summons or other notice alleging a violation
of, or asserting liability under, any applicable Laws with respect to the Real
Estate or the Improvements or the use or condition thereof. The Seller is not in
default under, and to the Seller's Knowledge, no condition exists which with the
giving of notice or the passage of time or both would constitute a default under
any material licenses, permits, certificates, authorizations, contracts or other
agreements listed or described on Schedule 3.12(d) and, except as separately
identified on Schedule 3.12(d), no approval or consent of any Person is needed
for any of the foregoing to continue to be in full force and effect, and such
documents will not become unenforceable by the Buyer following the consummation
of the transactions contemplated by this Agreement.
3.13 Transactions with Affiliates. Except as set forth on Schedule
3.13, no director, officer, shareholder or Affiliate of the Seller or any
shareholder of the Seller has since the date of the Latest Balance Sheet: (a)
borrowed money from or loaned money to the Seller which remains outstanding; (b)
had any contractual or other claim, express or implied, of any kind whatsoever
against the Seller excluding claims for wages and other compensation in the
ordinary course of business and bonuses in accordance with the policy set forth
on Schedule 3.15 and other employment benefits; (c) owned any interest in any
property or assets (tangible or intangible) used or useful by the Seller in the
Business; (d) engaged in any other transaction (other than employment)
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with the Seller or (e) owned, directly or indirectly, any interest in (except
not more than two percent (2%) stockholdings for investment purposes in
securities of publicly held and traded companies), or served as an officer,
director, employee or consultant of or otherwise receives remuneration from, any
Person which is, or has engaged in business as, a competitor, lessor, lessee,
customer or supplier of the Seller. Each Contract set forth on Schedule 3.13 is
on terms no less favorable to the Seller party thereto than would otherwise be
available in an arm's length transaction with an unaffiliated third party.
3.14 Accounts Receivable and Inventory. Except as set forth on
Schedule 3.14, all Accounts Receivable reflected on the Latest Balance Sheet,
and all Accounts Receivable arising subsequent to the date of the Latest Balance
Sheet, (a) have arisen from bona fide sales transactions in the ordinary course
of business of the Seller on ordinary trade terms, (b) represent valid and
binding obligations due to the Seller, enforceable in accordance with their
terms, and (c) have been collected or are collectible in the ordinary course of
business of the Seller in the aggregate recorded amounts thereof in accordance
with their terms without valid set-off or counterclaim. Schedule 3.14 lists any
obligor which together with all of its Affiliates owes uncollected amounts to
the Seller in an aggregate amount of $25,000 or more. Except as set forth on
Schedule 3.14, all the Inventory consists of a quality and quantity usable and
salable in the ordinary course of business consistent with past practice,
subject to normal and customary allowances in the industry for spoilage, damage
and outdated items. Except as set forth on Schedule 3.14, all items included in
the Inventory are the property of the Seller, free and clear of any Lien, have
not been pledged as collateral, are not held by the Seller on consignment from
others and conform in all material respects to all standards applicable to such
Inventory or its use or sale imposed by any Law.
3.15 Compensation Arrangements. Schedule 3.15 sets forth: (a) the
name and current annual salary, including any bonus or commitment to pay any
other amount or benefit in connection with a termination of employment, if
applicable, of all present officers, directors and employees of the Seller whose
current annual salary, including any promised, expected or customary bonus or
such other amount or benefit, equals or exceeds $75,000 and (b) the Seller's
bonus policy for all other employees. Except as set forth on Schedule 3.15, the
Seller has not made a commitment or agreement (verbally or in writing) to
increase the compensation or to modify the conditions or terms of employment of
any Person listed on Schedule 3.15 or of any other Person if the increase would
cause such Person to be required to be listed on Schedule 3.15, other than in
the ordinary course of business consistent with past practices. To the Seller's
Knowledge none of such Persons has made a threat or otherwise indicated any
intent to the Seller, to any Shareholder or to any of the officers or directors
of the Seller to cancel or otherwise terminate such Person's relationship with
the Seller.
3.16 Operations. Except as disclosed on Schedule 3.16 or expressly
authorized by this Agreement, from the date of the Latest Balance Sheet through
the date hereof, the Seller has not:
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(a) amended its Articles of Incorporation or By-Laws or merged
with or into or consolidated with any other Person, or changed
or agreed to rearrange in any material manner the character of
its business;
(b) issued, sold or purchased options or rights to subscribe to,
or entered into any contracts or commitments to issue, sell or
purchase, any shares of its capital stock or other equity
interests;
(c) entered into, amended or terminated any (i) written employment
agreement or collective bargaining agreement, (ii) adopted,
entered into or amended any arrangement which is, or would be,
a Plan or (iii) made any change in any actuarial methods or
assumptions used in funding any Plan or in the assumptions or
factors used in determining benefit equivalences thereunder;
(d) issued, incurred or assumed any Indebtedness except for
revolving credit loans made by Nationsbank, N.A. (South)
pursuant to the Second Amended and Restated Loan and Security
Agreement dated May 1, 1996;
(e) declared, set aside or paid any dividends or declared or made
any other distributions of any kind to shareholders or holders
of its equity interests, or made any direct or indirect
redemption, retirement, purchase or other acquisition of any
shares of its capital stock or other equity interests other
than cash dividends paid to shareholders pro-rata;
(f) knowingly waived any right of material value to the Business;
(g) made any change in its accounting methods or practices or made
any changes in depreciation or amortization policies or rates
adopted by it or made any material write-down of Inventory or
material write-off as uncollectible of Accounts Receivable;
(h) made any payment or commitment to pay any severance or
termination pay to any Person or any of its officers,
directors, employees, consultants, agents or other
representatives, other than payments or commitments (including
wages and other compensation in the ordinary course of
business and bonuses in accordance with the policy set forth
on Schedule 3.15) to pay such Persons or its officers,
directors, employees in the ordinary course of business
consistent with past practice;
(i) (i) entered into any lease (as lessor or lessee), (ii) sold,
abandoned or made any other disposition of any of its assets
or properties other than in the ordinary course of business
consistent with past practice; (iii) granted or suffered any
Lien on any of its assets or properties; or (iv) except for
product warranties issued in the ordinary course of business
entered into or amended
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any contract or other agreement to which it is a party, or by
or to which it or its assets or properties are bound or
subject, or pursuant to which it agrees to indemnify any
Person or to refrain from competing with any Person, in each
case or type required to be disclosed pursuant to Section 3.11
hereof;
(j) except for Inventory, supplies or equipment acquired in the
ordinary course of business, made any acquisition of all or
any part of the assets, properties, capital stock or business
of any other Person;
(k) made any capital expenditures or commitments for capital
expenditures other than in the ordinary course of business
consistent with past practice; or
(l) except in the ordinary course of business, terminated, failed
to renew, amended or entered into any contract or other
agreement of a type required to be disclosed pursuant to
Section 3.11.
3.17 Intellectual Property.
(a) Set forth on Schedule 3.17(a) is a complete and correct and
complete list of all (i) patented and registered Intellectual Property and
pending patent applications and applications for the registration of
Intellectual Property, in each case owned by the Seller; (ii) trade or corporate
names used by the Seller; (iii) computer software and databases created or used
by the Seller (other than mass-marketed software with a license fee of less than
$1,000); (iv) material unregistered trademarks and copyrights owned or used by
the Seller; and (v) licenses and other rights granted by the Seller to any third
party or by any third party to the Seller, in each case with respect to
Intellectual Property.
(b) Except as set forth on Schedule 3.17(a), the Seller owns all
right, title and interest in and to, or has a valid and enforceable license to
use, all Intellectual Property necessary for the operation of the Business as
currently conducted and as currently proposed to be conducted, free and clear of
any Liens or adverse claims. Except as set forth on Schedule 3.17(b), no claim
by any third party contesting the validity, enforceability, ownership or use of
any of the Intellectual Property owned or used by the Seller has been made, is
currently outstanding or is threatened, and there are no grounds for the same.
Except as set forth on Schedule 3.17(b), the loss or expiration of any
individual Intellectual Property right or related group of Intellectual Property
rights owned or used by the Seller would not have a Material Adverse Effect, and
to the Seller's knowledge no such loss or expiration is threatened, pending or
reasonably foreseeable. Except as set forth on Schedule 3.17(b), the Seller has
not received any notice of, nor is the Seller aware of any facts which indicate
a likelihood of, any infringement or misappropriation by, or conflict with, any
third party with respect to the Intellectual Property owned or used by the
Seller. Except as set forth on Schedule 3.17(b), the Seller has not infringed,
misappropriated or otherwise conflicted with any Intellectual Property of any
third party, and the Seller is not aware of any infringement, misappropriation
or conflict which will occur as a result of the continued operation of the
Business as currently conducted or as currently proposed to be conducted. All
Intellectual Property owned
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or used by Seller in the conduct of the Business, will be properly assigned or
licensed to the Buyer immediately subsequent to the Closing.
3.18 Employees.
(a) Except as set forth on Schedule 3.18(a), the Seller is not party
to or bound by any contract or agreement for the employment of any Person.
(b) Except as set forth on Schedule 3.18(b), since January 1, 1995,
no more than 30 employees of the Seller relating to the business have been
terminated, or to the knowledge of the Seller, plans to terminate, employment
with the Seller. Except as set forth on Schedule 3.18(b), the Seller is not a
party to or bound by any collective bargaining agreement, nor has it experienced
any strike, union grievance, claim of unfair labor practice or other collective
bargaining dispute relating to the Business. Except as set forth on Schedule
3.18(b), to the knowledge of the Seller there is no organizational effort being
made or threatened by or on behalf of any labor union with respect to employees
of the Seller relating to the Business. The Seller has not committed any unfair
labor practice or violated any federal, state or local law or regulation
regulating employers or the terms and conditions of its employees' employment,
including laws regulating employee wages and hours, employment discrimination,
employee civil rights, equal employment opportunity and employment of foreign
nationals other than such practice or violations which would not cause a
Material Adverse Effect as to the Seller.
(c) Any notice required under any law or collective bargaining
agreement has been given, and all bargaining obligations with any employee
representative have been satisfied. The Seller has not implemented any plant
closing or mass layoff of employees as those terms are defined in the Worker
Adjustment Retraining and Notification ("WARN") Act of 1988, as amended, or any
similar state or local law or regulation, and no layoffs that could implicate
such laws or regulations will be implemented before Closing without advance
notification to the Buyer.
3.19 Employee Benefits.
(a) Set forth on Schedule 3.19 is a list of all written Plans
contributed to, maintained or sponsored by the Seller, to which the Seller is
obligated to contribute or with respect to which the Seller has any liability or
potential liability, whether direct or indirect, including all Plans contributed
to, maintained or sponsored by a member of a controlled group of entities,
within the meaning of Section 414 of the Code (or with respect to which any such
controlled group member has any direct or indirect liability or potential
liability), of which the Seller is or was a member, to the extent the Seller has
any liability or potential liability with respect to such Plan.
(b) Except as set forth on Schedule 3.19, each Plan and all related
trusts, insurance contracts and funds have been maintained, funded, and
administered in compliance in all material respects with all applicable laws and
regulations, including ERISA and the Code. The Seller has complied in all
material respects with all applicable reporting and disclosure requirements with
respect to each Plan. Neither the Seller nor any trustee or administrator of any
Plan or other
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Person has engaged in any transaction with respect to any Plan which could
subject the Buyer or any trustee or administrator of such Plan, or any party
dealing with such Plan, to any material Tax, fine, penalty or other liability
(civil or otherwise) imposed by ERISA or the Code. No material actions, suits,
investigations or claims with respect to any Plan (other than routine claims for
benefits) or with respect to any fiduciary or other person dealing with any Plan
are pending or threatened and, to the knowledge of the Seller, there are no
facts which could give rise to or be expected to give rise to any such actions,
suits, investigations or claims. The Seller has complied in all material
respects with the requirements of COBRA (as defined in Section 7.6).
(c) No Plan that is subject to the minimum funding requirements of
Section 412 of the Code or Section 302 of ERISA has incurred any "accumulated
funding deficiency", as such term is defined in such Sections of ERISA and the
Code, whether or not waived. None of the assets of the Seller is the subject of
any Lien arising under Section 302(f) of ERISA or Section 412(n) of the Code,
and, to the best knowledge of the Seller there are no facts which could be
expected to give rise to such a Lien. Except as set forth on Schedule 3.19, the
assets of each employee pension benefit plan (as defined in Section 3(c) of
ERISA) exceed the benefit liabilities thereunder (as determined on a plan
termination basis). The Seller has no actual or potential liabilities under
Title IV of ERISA with respect to any Plan other than for the payment of PBGC
premiums.
(d) Each Plan that is intended to be qualified under Section 401(a)
of the Code, and each trust (if any) forming a part thereof, has received a
favorable determination letter from the IRS as to the qualification under the
Code of such Plan and the tax exempt status of such related trust, and nothing
has occurred since the date of such determination letter that could reasonably
be expected to have a material adverse effect on the qualification of such Plan
or the tax exempt status of such related trust.
(e) Except as provided in Schedule 3.19(e), with respect to each
Plan relating to the Business, the Seller has provided the Buyer with copies, to
the extent applicable and requested by the Buyer, of all documents pursuant to
which the Plans are maintained, funded and administered, the most recent annual
report (Form 5500 series) filed with the IRS (with attachments), the most recent
financial statement, actuarial report and all governmental rulings,
determinations and opinions (including the most recent IRS favorable
determination letter) (and pending requests for governmental rulings,
determinations and opinions).
3.20 Environmental Health and Safety Matters.
(a) Except as set forth on Schedule 3.20(a), the Seller has not
violated any Environmental Requirements or Safety Requirements in the operation
of the Business.
(b) Except as set forth on Schedule 3.20(b), the Seller has obtained
and complied with, and is in compliance with, all permits, licenses or other
authorizations that may be required pursuant to Environmental Requirements or
Safety Requirements for the occupation of its facilities and the operation of
the Business.
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(c) Except as set forth on Schedule 3.20(c), the Seller has not
received any claim, complaint, citation, report or other written or oral notice
regarding any Liabilities, including any investigatory, remedial or corrective
obligations, arising under Environmental Requirements or Safety Requirements.
(d) Except as set forth on Schedule 3.20(d) to the Seller's
Knowledge, none of the following exists at any property owned or occupied by the
Seller:
(i) Underground storage tanks or surface impoundments;
(ii) Asbestos-containing material in any form or condition;
(iii) Materials or equipment containing polychlorinated
biphenyls; or
(iv) Landfills or other waste disposal areas;
(e) No Environmental Lien has attached to any property owned, leased
or operated by the Seller.
(f) Except as set forth on Schedule 3.20(f), the Seller has not
expressly assumed or undertaken any liability, including, without limitation,
any obligation for corrective or remedial action, of any other person relating
to Environmental Requirements.
(g) Except as set forth on Schedule 3.20(g), the Seller has not
treated, stored, disposed of, arranged for or permitted the disposal of,
transported, handled, or released any substance, including without limitation
any hazardous substance, or owned or operated any property or facility (and no
such property or facility is contaminated by any such substance) in a manner
that has given or would give rise to liabilities, (including any liability for
response costs, corrective action costs, personal injury, property damage,
natural resources damages or attorney fees, or any investigative, corrective or
remedial obligations), pursuant to CERCLA, as amended, or any other current
Environmental Requirements.
3.21 Insurance. Schedule 3.21 sets forth a list and brief
description (specifying the insurer, the policy number or covering note number
with respect to binders and the amount of any deductible, describing the pending
claims if such claims exceed applicable policy limits, setting forth the
aggregate amount paid out under each such policy through the date hereof and the
aggregate limit, if any, of the insurer's liability thereunder) of all policies
or binders of fire, liability, errors and omissions, workers' compensation,
vehicular, unemployment and other insurance held by or on behalf of the Seller.
Schedule 3.21 also designates which said policies shall be retained by Seller
and which shall be transferred to Buyer. Such policies and binders are valid and
enforceable in accordance with their terms in all material respects, are in full
force and effect, and insure against risks and liabilities to the extent and in
respect of amounts, types and risks insured, all as are customary in the
industries in which the Seller operates. All of such policies have been issued
by reputable insurance companies actively engaged in the insurance business.
Except as set forth on
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Schedule 3.21, the Seller is not in default with respect to any material
provision contained in any such policy or binder or has failed to give any
notice or present any claim under any such policy or binder in due and timely
fashion. Except for claims disclosed on Schedule 3.21, there are no outstanding
unpaid claims under any such policy or binder which have gone unpaid for more
than forty-five (45) days or as to which the carrier has disclaimed liability.
All known claims or circumstances likely to give rise to any claims, if any,
made against the Seller has been disclosed and tendered to the appropriate
insurance companies and are being defended by such appropriate insurance
companies in accordance with the policy terms and limits. Except as set forth on
Schedule 3.21, the Seller has not received any notice of cancellation or
non-renewal of any such policy or binder or any notice from any of its insurance
carriers that any insurance premiums will be materially increased in the future
or that any insurance coverage listed on Schedule 3.21 will not be available in
the future on substantially the same terms as now in effect. None of the
policies disclosed on Schedule 3.21 provides that premiums paid in respect of
periods may be adjusted or recomputed based on claims-paying experience of such
policies or otherwise. With regard to the policies to be transferred to Buyer,
except as separately disclosed on Schedule 3.21, all of such policies or binders
in the name of the Seller shall be in full force and effect and enforceable by
the Buyer following the consummation of the transactions contemplated by this
Agreement.
3.22 Permits. Schedule 3.22 sets forth a list of the Permits which
the Seller has obtained in connection with its assets, properties and the
Business. Except as set forth on Schedule 3.22 or Schedule 3.20(b), no Permits
are required to be obtained by the Seller in connection with its properties or
the Business. All such Permits are in full force and effect and in good
standing, except as otherwise provided on Schedule 3.22. The Seller has not
received any notice of any claim of revocation of any such Permits or has
knowledge of any event which might give rise to such a claim, nor is the Seller
aware of any fact or circumstances which would prevent the Buyer from obtaining
such Permits.
3.23 Title; Liens. The Seller owns outright and has good and
marketable title to all of its assets and properties (tangible and intangible),
including, without limitation, all of the assets and properties (except Real
Estate and capitalized leases) reflected on the Latest Balance Sheet, and, at
the Closing Date, the Seller will have good and marketable title to all such
assets and properties, in each case free and clear of any Lien, except for
Permitted Liens and Liens set forth on Schedule 3.23.
3.24 Compliance with Laws. Except as set forth in Schedule 3.24, the
Seller (a) is in material compliance with all, and not in material violation of
any, and has not received any claim or notice that it is not in compliance in
any material respect with, or that it is in violation in any material respect
of, any Law to which the Seller or any of its businesses, operations, assets or
properties (including the use and occupancy thereof) are subject which
non-compliance or violation could have a Material Adverse Effect and (b) the
Seller has not failed to obtain or to adhere to the requirements of any
governmental permit, license, registration and other governmental consent or
authorization necessary in connection with its assets, properties or business,
which failure could have a Material Adverse Effect on the Seller or the Buyer.
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3.25 Sufficiency of Assets. The sale of the Assets pursuant to this
Agreement will effectively convey to the Buyer all of the tangible and
intangible property used (whether owned, leased or held under license by the
Seller, its Affiliates or by others) in connection with the conduct of the
Business as heretofore conducted by the Seller (except for the Excluded Assets)
including, without limitation, all tangible assets and properties of the Seller
reflected in the Latest Balance Sheet and assets and properties acquired since
the Latest Balance Sheet Date in the conduct of the Business, other than the
Excluded Assets and assets and properties disposed of since such date without
violation of this Agreement. Except as disclosed in Schedule 3.25, there are no
material facilities, services, assets or properties shared with any other Person
which are used by the Seller and the Assets are in operating condition and
repair, normal wear and tear excepted.
3.26 Substantial Customers and Suppliers. Schedule 3.26 lists the
ten (10) largest customers of the Seller, on the basis of revenues for goods
sold or services provided for the most recently-completed fiscal year. Schedule
3.26 lists the five (5) largest suppliers of the Seller, on the basis of cost of
goods or services purchased as of August 31, 1997. Except as disclosed in
Schedule 3.26, no such customer or supplier has ceased or materially reduced its
purchases from, use of the services of, sales to or provision of services to the
Seller (as appropriate) since the Latest Balance Sheet date, or to the Seller's
Knowledge, has threatened to cease or materially reduce such purchases, use,
sales or provision of services to the Seller (as appropriate) after the date
hereof.
3.27 Banks, Brokers, and Proxies. Schedule 3.27 sets forth (a) the
name of each bank, trust company, securities or other broker or other financial
institution with which the Seller has an account, credit line or safe deposit
box or vault, or otherwise maintains relations; (b) the name of each person
authorized by the Seller to draw thereon or to have access to any safe deposit
box or vault; (c) the purpose of each such account, safe deposit box or vault;
and (d) the names of all persons authorized by proxies, powers of attorney or
other instruments to act on behalf of the Seller in matters concerning its
business or affairs. Except as set forth on Schedule 3.27, all such accounts,
credit lines, safe deposit boxes and vaults are maintained by the Seller for
normal business purposes, and no such proxies, powers of attorney or other like
instruments are irrevocable.
3.28 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by the Seller directly
with the Buyer without the intervention of any Person on behalf of the Seller in
such manner as to give rise to any valid claim by any Person against the Seller
or the Buyer for a finder's fee, brokerage commission or similar payment other
than to NationsBanc Capital Markets, Inc.
3.29 Disclosure. Neither this Agreement, nor any Schedule or Exhibit
to this Agreement, contains an untrue statement of a material fact or omits a
material fact necessary to make the statements contained herein or therein not
misleading. All information provided to the Buyer and its agents by the Seller
and its Affiliates or agents is true, complete and correct in all material
respects.
3.30 Investment Intent. The Seller is acquiring the Note for its own
account for the purpose of investment and not with a view to resale or any
distribution thereof except for a
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distribution to the Seller's shareholders after the Closing Date. The Seller
understands that (a) the Note has not been registered under the Securities Act
of 1933 by reason of its issuance in a transaction exempt from the registration
requirements of the Securities Act of 1933 pursuant to Section 4(2) thereof, (b)
the Note must be held indefinitely unless a subsequent disposition thereof is
registered under the Securities Act of 1933, as amended, or is exempt from such
registration, (c) the Note will bear a legend to such effect and (d) Holdco will
make a notation on its transfer books to such effect. The Seller acknowledges
that it has had a full opportunity to request from the Buyer and to review and
has received all information which it deems relevant, in making a decision to
acquire the Note and the Seller will comply with the restrictions on
transferability of the Note contained therein. The Seller is an "accredited
investor" within the meaning of Rule 501 under the Securities Act of 1933, as
amended.
SECTION IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer and, with respect to Sections 4.1 through 4.6 and 4.8
through 4.11 only Holdco, represents and warrants to the Seller as follows. The
representations and warranties which follow are deemed repeated on the Closing
Date.
4.1 Organization and Qualification. Each of the Buyer and Holdco is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to (i) own, lease and operate its properties and assets as they are
now owned, leased and operated, (ii) carry on its business as now presently
conducted and as proposed to be conducted after giving effect to the purchase of
the Assets and (iii) to execute and deliver this Agreement and each Related
Document to which it is a party and to carry out the terms hereof and thereof.
Each of the Buyer and Holdco is duly qualified to do business in each
jurisdiction in which the nature of its business or properties makes such
qualification necessary, except where the failure to do so would not have a
Material Adverse Effect on the Buyer. The jurisdictions in which each of the
Buyer and Holdco is so qualified are set forth on Schedule 4.1.
4.2 Validity and Execution of Agreement. Each of the Buyer and
Holdco has the full legal right, capacity and power and has all requisite
corporate authority and approval required to enter into, execute and deliver
this Agreement and each other Related Document to which it is a party and to
perform fully its obligations hereunder and thereunder. The board of directors
of each of the Buyer and Holdco has approved the transactions contemplated
pursuant to this Agreement and each of the Related Documents required to be
entered into pursuant hereto by each such party. This Agreement has been duly
executed and delivered by them, the Buyer and Holdco and constitutes the valid
and binding obligation of each of them enforceable against them in accordance
with its terms.
4.3 No Conflict. Except as set forth on Schedule 4.3, neither the
execution, delivery nor performance by each of the Buyer and Holdco of this
Agreement, the transactions
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contemplated hereby or the Related Documents (to the extent such Person is a
party thereto) will: (a) violate or conflict with any of the provisions of the
Certificate of Incorporation or By-Laws (or similar governing documents) of the
Buyer or Holdco ; (b) violate, conflict with, result in the acceleration of, or
entitle any party to accelerate the maturity or the cancellation of the
performance of any obligation under, or result in the creation or imposition of
any Lien in or upon any of the properties or assets of the Buyer or Holdco or
constitute a default (or an event which might, with the passage of time or the
giving of notice, or both, constitute a default) under any mortgage, indenture,
deed of trust, lease, contract, loan or credit agreement, license or other
instrument to which the Buyer or Holdco is a party or by which they or any of
their properties or assets may be bound or affected; or (c) violate or conflict
with any provision of any Law applicable to the Buyer or Holdco, or require any
consent or approval of or filing or notice with any Governmental Body.
4.4 Capitalization/Subsidiaries. All of the issued and outstanding
shares of capital stock or other equity interests of the Buyer and Holdco are
owned, directly or indirectly, beneficially and of record as set forth on
Schedule 4.4. Neither the Buyer nor Holdco owns, directly or indirectly, any
capital stock of, or any other interest in, any other Person other than the
Buyer, in the case of Holdco, and RVP International Sales Corp., a Barbados
corporation, in the case of the Buyer.
4.5 No Material Adverse Effect. Except as set forth on Schedule 4.5,
since June 30, 1997 there has been no change in the assets, properties,
business, operations, income or condition (financial or otherwise) of the Buyer
or Holdco, nor to the Buyer's or Holdco's knowledge is any such change
threatened, nor has there been any damage, destruction or loss which could have
a Material Adverse Effect on the Buyer or Holdco, whether or not covered by
insurance.
4.6 Operations. Except as disclosed on Schedule 4.6 or expressly
authorized by this Agreement, from June 30, 1997 through the date hereof,
neither the Buyer nor Holdco has:
(a) amended its Certificate of Incorporation or By-Laws or
comparable instruments or merged with or into or consolidated
with any other Person, or changed or agreed to rearrange in
any material manner the character of its business;
(b) issued, sold or purchased options or rights to subscribe to,
or entered into any contracts or commitments to issue, sell or
purchase, any shares of its capital stock or other equity
interests other than pursuant to Section 5.0 hereof;
(c) entered into, amended or terminated any (i) employment
agreement or collective bargaining agreement, (ii) adopted,
entered into or amended any arrangement which is, or would be,
a Plan or (iii) made any change in any actuarial methods or
assumptions used in funding any Plan or in the assumptions or
factors used in determining benefit equivalences thereunder;
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(d) issued, incurred or assumed any Indebtedness, capitalized
lease or other absolute or contingent obligation except
pursuant to the Credit Agreement dated August 22, 1996 among
the Buyer (previously known as Recreation Vehicle Products,
Inc.) and the Chase Manhattan Bank, as Agent;
(e) declared, set aside or paid any dividends or declared or made
any other distributions of any kind to its shareholders or
holders of its equity interests, or made any direct or
indirect redemption, retirement, purchase or other acquisition
of any shares of its capital stock or other equity interests;
(f) knowingly waived any right of material value to its business;
(g) made any change in its accounting methods or practices or made
any changes in depreciation or amortization policies or rates
adopted by it or made any material write-down of Inventory or
material write-off as uncollectible of Accounts Receivable;
(h) made any payment or commitment to pay any severance or
termination pay to any Person or any of its officers,
directors, employees, consultants, agents or other
representatives, other than payments or commitments to pay
such Persons or its officers, directors, employees in the
ordinary course of business consistent with past practice;
(i) (i) entered into any lease (as lessor or lessee), (ii) sold,
abandoned or made any other disposition of any of its assets
or properties other than in the ordinary course of business
consistent with past practice; (iii) granted or suffered any
Lien on any of its assets or properties; or (iv) except
product warranties issued in the ordinary course of business
entered into or amended any contract or other agreement to
which it is a party, or by or to which it or its assets or
properties are bound or subject, or pursuant to which it
agrees to indemnify any Person or to refrain from competing
with any Person;
(j) except for Inventory or equipment acquired in the ordinary
course of business, made any acquisition of all or any part of
the assets, properties, capital stock or business of any other
Person;
(k) paid, directly or indirectly, any of its Liabilities before
the same became due in accordance with the terms thereof or
otherwise than in the ordinary course of business, except to
obtain the benefit of discounts available for early payment;
(l) made any capital expenditures or commitments for capital
expenditures other than in the ordinary course of business
consistent with past practice; or
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(m) except in the ordinary course of business, terminated, failed
to renew, amended or entered into any material contract or
other material agreement.
4.7 Employee Benefits.
(a) Set forth on Schedule 4.7 is a list of all Plans contributed to,
maintained or sponsored by the Buyer, to which the Buyer is obligated to
contribute or with respect to which the Buyer has any liability or potential
liability, whether direct or indirect, including all Plans contributed to,
maintained or sponsored by a member of a controlled group of entities, within
the meaning of Section 414 of the Code (or with respect to which any such
controlled group member has any direct or indirect liability or potential
liability), of which the Buyer is or was a member, to the extent the Buyer has
any liability or potential liability with respect to such Plan.
(b) Each Plan and all related trusts, insurance contracts and funds
have been maintained, funded, and administered in compliance in all material
respects with all applicable laws and regulations, including ERISA and the Code.
The Buyer has complied in all material respects with all applicable reporting
and disclosure requirements with respect to each Plan. Neither the Buyer nor any
trustee or administrator of any Plan or other Person has engaged in any
transaction with respect to any Plan which could subject the Buyer or any
trustee or administrator of such Plan, or any party dealing with such Plan, to
any material Tax, fine, penalty or other liability (civil or otherwise) imposed
by ERISA or the Code. No material actions, suits, investigations or claims with
respect to any Plan (other than routine claims for benefits) or with respect to
any fiduciary or other person dealing with any Plan are pending or threatened
and, to the knowledge of the Buyer, there are no facts which could give rise to
or be expected to give rise to any such actions, suits, investigations or
claims. The Buyer has complied in all material respects with the requirements of
COBRA (as defined in Section 7.6).
(c) No Plan that is subject to the minimum funding requirements of
Section 412 of the Code or Section 302 of ERISA has incurred any "accumulated
funding deficiency", as such term is defined in such Sections of ERISA and the
Code, whether or not waived. None of the assets of the Buyer is the subject of
any Lien arising under Section 302(f) of ERISA or Section 412(n) of the Code,
and, to the best knowledge of the Buyer there are no facts which could be
expected to give rise to such a Lien. Except as set forth on Schedule 4.7, the
assets of each employee pension benefit plan (as defined in Section 3(c) of
ERISA) exceed the benefit liabilities thereunder (as determined on a plan
termination basis). The Buyer has no actual or potential liabilities under Title
IV of ERISA with respect to any Plan other than for the payment of PBGC
premiums.
(d) Each Plan that is intended to be qualified under Section 401(a)
of the Code, and each trust (if any) forming a part thereof, has received a
favorable determination letter from the IRS as to the qualification under the
Code of such Plan and the tax exempt status of such related trust, and nothing
has occurred since the date of such determination letter that could reasonably
be expected to have an adverse effect on the qualification of such Plan or the
tax exempt status of such related trust.
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(e) With respect to each Plan relating to the Business, the Buyer
has provided the Seller with copies, to the extent applicable, of all documents
pursuant to which the Plans are maintained, funded and administered, the most
recent annual report (Form 5500 series) filed with the IRS (with attachments),
the most recent financial statement, actuarial report and all governmental
rulings, determinations and opinions (including the most recent IRS favorable
determination letter) (and pending requests for governmental rulings,
determinations and opinions).
4.8 Permits. Schedule 4.8 sets forth a list of the Permits which the
Buyer or Holdco or has obtained in connection with its assets, properties and
business. Except as set forth on Schedule 4.8, no Permits are required to be
obtained by the Buyer or Holdco or in connection with its properties or
business. All such Permits are in full force and effect and in good standing,
except as separately identified on Schedule 4.8. Neither the Buyer nor Holdco
has received any notice of any claim of revocation of any such Permits or has
knowledge of any event which might give rise to such a claim.
4.9 Compliance with Laws. Except as set forth in Schedule 4.9, each
of the Buyer and Holdco (a) is in compliance with all, and not in violation of
any, and has not received any claim or notice that it is not in compliance in
any material respect with, or that it is in violation in any material respect
of, any Law to which the Buyer or Holdco or any of its businesses, operations,
assets or properties (including the use and occupancy thereof) are subject and
(b) neither the Buyer nor Holdco has failed to obtain or to adhere to the
requirements of any governmental permit, license, registration and other
governmental consent or authorization necessary in connection with its assets,
properties or business, which failure could have a Material Adverse Effect on
the Buyer or Holdco.
4.10 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by the Buyer and Holdco
directly with the Seller without the intervention of any Person on behalf of the
Buyer or Holdco in such manner as to give rise to any valid claim by any Person
against the Seller for a finder's fee, brokerage commission or similar payment.
4.11 Government Filings. Holdco and the Buyer have each made all
necessary government filings and registrations required to be made by each of
them in connection with this Agreement, the transactions contemplated hereby and
the financing thereof.
4.12 Operation of Business. The Buyer intends to operate the
Business as an ongoing concern and does not currently intend to sell or
otherwise transfer all or a material part of the Business, or discontinue any
material part or all of the Business.
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SECTION V
PRE-CLOSING COVENANTS
5.1 Corporate Examinations and Investigations. At or prior to the
Closing Date, each of the parties and financing sources shall be entitled,
through their respective representatives and agents, to make such investigation
of the assets, properties, business and operations of the other parties hereto
and such examination of the books, records, Tax Returns, financial condition and
operations of the other parties hereto as such party, the Buyer or its lenders
may wish. Any such investigation and examination shall be conducted at
reasonable times and under reasonable circumstances and the relevant party shall
cooperate fully therein. No investigation by any party shall diminish or obviate
any of the representations, warranties, covenants or agreements of the other
parties under this Agreement.
5.2 Conduct of Business. From the date hereof until the Closing
Date, each of the parties shall (a) conduct its business in the ordinary course
consistent with past custom and practice in and in substantially the same manner
as it was being conducted prior to June 30, 1997; (b) in the case of the Seller
only, without the prior written consent of the Buyer, and in the case of the
Buyer and Holdco, without prior written notice to the Seller, not undertake any
of the actions specified in Sections 3.16 or 4.6, as applicable, and (c) use its
best efforts to (i) preserve intact its business, assets, properties and
organizations; (ii) keep available the services of its present officers,
employees, consultants and agents; and (iii) maintain its present suppliers and
customers and (iv) preserve its goodwill.
5.3 Notice of Events. Each party hereto, to the extent it has
knowledge thereof, shall promptly notify the other parties hereto of (a) any
event, condition or circumstance occurring from the date hereof until the
Closing Date that would constitute a violation or breach of this Agreement, (b)
any event, occurrence, transaction or other item which would have been required
to have been disclosed on any Schedule or statement delivered hereunder had such
event, occurrence, transaction or item existed on the date hereof, other than
items arising in the ordinary course of business which would not render any
representation or warranty made by that party materially misleading.
5.4 Exclusivity. Until the earlier occurs of the Closing or the
termination of this Agreement, none of NationsBanc Capital Markets, Inc., the
Seller nor any of their respective directors, officers, employees, agents,
representatives, members or Affiliates shall initiate, solicit, entertain,
negotiate, accept or discuss, directly or indirectly, or encourage inquiries or
proposals (each, an "Acquisition Proposal") with respect to, or furnish any
information relating to or participate in any negotiations or discussions
concerning, or enter into any agreement with respect to, any acquisition or
purchase of all or a substantial portion of the assets of, or of a substantial
equity interest in, the Business or any business combination with the Seller or
any reorganizations, dissolution, recapitalization, merger or consolidation of
the Seller other than as contemplated by this Agreement (a "Third Party
Acquisition"). The Seller shall, and shall cause each of its Affiliates to,
immediately cease and cause to be terminated any existing activities, including
discussions or
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negotiations with any parties, conducted prior to the date hereof with respect
to any Acquisition Proposal. Notwithstanding the foregoing, the Seller may
furnish information or cause information to be furnished to, and may participate
in discussions and negotiations directly and through its representatives and
enter into an agreement relating to an Acquisition Proposal with, any third
party (including parties with whom the Seller or its representatives have had
discussions on any basis on or prior to the date hereof) who makes a bona fide
unsolicited proposal or offer to the Seller, if the Seller's Board determines in
good faith, after consultation with outside counsel, that the failure to take
any such actions could reasonably be deemed to cause the members of the Seller's
Board to breach their fiduciary duties under applicable law. In addition,
nothing contained in this Agreement shall prohibit the Seller and its directors
from making to its stockholders any recommendation and related filings with the
SEC as required by Rules 14e-2 and 14d-9 under the Securities Exchange Act of
1934, with respect to any tender offer. Each of the Seller and Shareholders
represent that it is not a party to or bound by any agreement with respect to an
Acquisition Proposal other than under this Agreement. The Seller shall cause its
officers, directors, agents and advisors to comply with the provisions of this
Section 5.4. In the event the Closing does not occur (other than by reason of
the failure to satisfy the condition set forth in Section 6.1(i), or by reason
of the willful conduct of the Buyers or Holdco) and all or substantially all of
the Business or the stock of the Seller is sold to or merged into a third party
on or prior to June 30, 1998, the Seller agrees to pay to the Buyer on demand
all of its costs and expenses (including the fees and costs of its professional
advisors and financiers but excluding incidental and consequential damages) in
connection with this Agreement and the attempted Closing not to exceed $500,000.
In consideration of the foregoing, the Buyer shall on the date of this Agreement
is entered into, deposit into an account with Nationsbank, N.A. the amount of
$50,000.00. If the Closing does not occur on or before November 10, 1997, by
reason of the failure to satisfy the condition set forth in Section 6.1(i), or
by reason of the willful conduct of the Buyer or Holdco then the Xxxxxxx Deposit
shall be paid to the Seller. In the event the Closing occurs on or prior to
November 10, 1997, the Xxxxxxx Amount shall be payable to the Seller on the
Closing Date in part satisfaction of the Cash Payment of the Purchase Price.
5.5 Mutual Assistance. The Seller and the Buyer agree that they will
cooperate in the expeditious filing of all notices, reports and other filings
with any Governmental Body required to be submitted jointly by the Seller and
the Buyer in connection with the execution and delivery of this Agreement, the
other agreements contemplated hereby and the consummation of the transactions
contemplated hereby or thereby, including any filings under any applicable state
tax statutes, in connection with the sale of the Assets to the Buyer.
Additionally, (i) to the extent a matter is the Seller's responsibility and/or
the Seller has a duty to cooperate with the Buyer and/or Holdco, the Seller will
use its best efforts to cause to be satisfied as soon as practicable, and prior
to the Closing Date, all of the conditions set forth in Section VI to the
obligation of the Buyer to enter into and complete the Closing; and (ii) to the
extent a matter is the Buyer's or Holdco's responsibility and/or either Buyer
and/or Holdco have a duty to cooperate with the Seller, Buyer and Holdco will
use their best efforts to cause to be satisfied as soon as practicable, and
prior to the Closing Date, all of the conditions set forth in Section VI to the
obligation of the Seller to enter into and complete the Closing.
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5.6 Name Changes. On or prior to the Closing, the Seller shall amend
its articles of incorporation to change its name to a name which does not
contain the word Crispaire, Marvair and E-Tech, or substantially or confusingly
similar words, and thereafter the Seller shall not use the name Crispaire,
Marvair and E-Tech in any capacity whatsoever in connection with the operation
of their respective businesses.
5.7 Public Announcements. None of the parties hereto shall make, nor
permit any agent or Affiliate to make, any public statements, including, without
limitation, any press releases, with respect to this Agreement and the
transactions contemplated hereby without the prior written consent of the other,
except any public disclosure (i) made to or by any of the Buyer's financing
sources, (ii) which either party in good faith believes is required by law (in
which case the disclosing party will consult with the other party prior to
making such disclosure) or (iii) in connection with a public offering of the
securities of the Buyer or any subsequent transferee of all or substantially all
of the Assets. The Buyer and the Seller shall jointly agree on the content and
substance of all public announcements concerning the transactions contemplated
hereby.
5.8 Holdco Equity. Holdco agrees to issue to certain employees of
the Seller pursuant to documents mutually agreed to on the Closing Date, in such
allocations as the Seller may elect, an aggregate of 833,334 shares of Holdco's
Series A Preferred Stock, par value $.01 per share ("A Preferred") and shares
representing 8.34% of Holdco's then outstanding Class A Common Stock, par value
$.01 per share ("A Common") for an aggregate consideration of $2,500,000.00
payable to Holdco by wire transfer on the Closing Date. Holdco agrees that for
an additional investment of $500,000.00, the shareholders shall be entitled to
be issued an additional 166,666 shares of A Preferred and shares representing an
additional 1.6% of the A Common. Holdco further agrees that for every additional
investment of $1,000,000.00 (after the $3,000,000.00 referred to above), the
shareholders shall be entitled to be issued additional shares representing an
additional 5% of the A Common. The percentages of A Common referred to in this
Section 5.8 are determined prior to dilution by issuances pursuant to Holdco's
RV Products Holding Corp. 1996 Stock Option Plan (as amended).
5.9 Transfer Taxes. Except for ad valorem taxes, the Seller and the
Buyer agree to each pay half of all sales, use, transfer, real property
transfer, recording, stamp, stock transfer and other similar taxes and fees
("Transfer Taxes") arising out of or in connection with the transactions
contemplated by this Agreement, and to deliver evidence of payment of, and
indemnify, defend and hold harmless each other with respect to, such Transfer
Taxes. The Seller and the Buyer shall each file all necessary documentation and
Tax Returns with respect to, such Transfer Taxes. All ad valorem taxes accrued
and owing on all real and personal property which are parts of the Assets shall
be apportioned between the Seller and Buyer based on the time period such real
and personal property was held by the Seller or Buyer.
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SECTION VI
CONDITIONS PRECEDENT TO THE CLOSING
6.1 Conditions Precedent to the Obligations of the Buyer. The
obligations of the Buyer to enter into and complete the Closing are subject to
the fulfillment on or prior to the Closing Date of the following conditions, any
one or more of which may be waived by the Buyer:
(a) Representations, Warranties and Covenants. The representations
and warranties of the Seller contained in this Agreement shall be true, complete
and correct in all material respects on and as of the Closing Date with the same
force and effect as though made on and as of the Closing Date. The Seller shall
have performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied with by it on
or prior to the Closing Date.
(b) Consents, Waivers, Licenses, Filings, etc. The consents,
approvals, authorizations, licenses, registrations, declarations or filings with
regard to the commercial lease contract listed on Schedule 3.3 hereto shall have
been obtained or made, as the case may be.
(c) Third Party Consents. Except as otherwise waived by the Buyer,
all consents, permits and approvals from parties to contracts or other
agreements with the Seller set forth on any Schedule to this Agreement, and any
other material consent, permit or approval that may be required in connection
with the performance by the Seller of its obligations under this Agreement or
the consummation of the transactions contemplated by this Agreement or the
continuance of the Seller's contracts or other agreements with the Buyer after
the Closing shall have been obtained.
(d) Injunction, etc. At the Closing, there shall not be any Order
outstanding against any party hereto or Law promulgated that restrains,
prohibits, invalidates or otherwise prevents consummation of the transactions
contemplated by, or seeks damages as a result of or otherwise interferes with
this Agreement or any of the conditions to the consummation of the transactions
contemplated by this Agreement or would be likely to have any Material Adverse
Effect on the Business or the Assets to be purchased by the Buyer hereunder.
(e) Opinion of Counsel. The Buyer shall have received the opinion of
Xxxxx, Xxxx & Xxxxx, LLC, counsel to the Seller.
(f) Closing Certificate of the Seller. The Seller shall have
delivered to the Buyer certificates signed by an authorized executive officer of
the Seller, dated the Closing Date, as to the matters set forth in Section
6.1(a) and in form and substance satisfactory to the Buyer.
(g) Other Agreements. The parties hereto shall have entered into the
Escrow Agreement, each of Xx. Xxxxxx X. Xxxxx, Xx. Xxxxx X. Xxxxxxx and Xx. X.X.
Xxxxxxx, Xx. shall have entered into an executive employment agreement with the
Buyer in a form similar to that attached as Exhibit C, each of Xx. Xxxxxx X.
Xxxxx, Xx. Xxxxx X. Xxxxxxx and Xx. X.X. Xxxxxxx, Xx. and Mr.
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Xxxx Xxxxxxx shall have executed Amendment No. 1 to the Stockholders Agreement
in a form similar to that attached as Exhibit D and the Joinder To Registration
Rights Agreement in a form similar to that attached as Exhibit E and the Seller
shall have terminated Xxxxxx X. Xxxxx from his employment with the Seller.
(h) New Equity. Certain shareholders and/or management of the Seller
shall have invested at least $2,500,000.00 in cash for equity securities of
Holdco pursuant to Section 5.8.
(i) Financing. The Buyer shall have received cash proceeds from its
financing sources in an amount sufficient to consummate the transactions
contemplated by this Agreement and to pay all fees and expenses in connection
therewith and to provide for the ongoing working capital needs of the Buyer, all
on terms and conditions reasonably satisfactory to the Buyer.
(j) Conveyancing Documents. The Seller shall have executed and
delivered to the Buyer a Transfer and Assumption Agreement in substantially the
form of Exhibit F hereto and such further instruments and documents as may be
reasonably requested by the Buyer in order to complete the transfer of the
Assets to the Buyer.
(k) Environmental. The Buyer shall have completed to its
satisfaction an environmental due diligence review with respect to the Real
Estate and with respect to the Business.
(l) Intellectual Property. With regard to the Intellectual Property
owned by the Seller, the Seller shall have delivered to the Buyer duly executed
patent, trademark and copyright assignment documents in a form acceptable to the
Buyer and suitable for filing in the U.S. Patent
and Trademark Office and the U.S. Copyright Office.
(m) Real Property Deeds. The Seller shall have delivered to the
Buyer a limited warranty deed for each parcel of Owned Property in the form
customary in the jurisdiction where such parcel is located and an assignment of
lease with respect to each Real Property Lease, in each case in form and
substance reasonably acceptable to the Buyer.
(n) Title Insurance. A title insurance company selected by the Buyer
(the "Title Company") shall be willing to insure at standard rates the Seller's
marketable title in and to the Owned Property in fee simple, the Seller's
leasehold estate in any financeable Leased Real Property (a "Financeable
Leasehold"), and the Buyer's lender's (the "Lender") mortgage lien on the Owned
Property and each Financeable Leasehold free and clear of all Liens, defects,
claims, leases, rights of possession or other encumbrances (other than as
described in Schedules 3.12(a) and (b)) and with such endorsements and
affirmative coverages as the Buyer and Lender shall reasonably require
(including non-imputation endorsements). The Seller shall provide all such
affidavits and indemnities as the Title Company reasonably shall require in
order to afford such coverages and shall bear 50% of the cost of obtaining such
title insurance.
(o) Surveys. The Buyer shall have the opportunity to have conducted
and shall receive a survey of each Owned Property and each Leased Real Property
to which the Seller holds
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a Financeable Leasehold conforming to the Minimum Standard Detail Requirements
jointly established and approved in 1992 by ALTA and ACSM certified to the
Seller, the Buyer, the Lender and the Title Company and showing no defects,
encroachments or encumbrances other than the matters disclosed in Schedule
3.12(a). The Seller shall bear 50% of the cost of obtaining such surveys.
(p) Real Estate. All Real Estate shall be in substantially the same
condition and repair as that on the date of this Agreement, reasonable wear and
tear excepted.
(q) Real Property Leases. The Buyer shall have received (i) from
each landlord under a Real Property Lease an estoppel, (ii) from each landlord
under a Real Property Lease identified in Schedule 3.12(b) as to which a consent
is required, a consent to the transactions contemplated by this Agreement and
(iii) from each mortgagee and ground lessor of any Leased Real Property a
nondisturbance agreement, in each case in form and substance reasonably
satisfactory to the Buyer and Lender. Lender shall have received from the
landlord under each Real Property Lease designated by the Lender an agreement
regarding the subordination to Lender of such landlord's lien against personal
property on the applicable premises and such other matters as the Lender
reasonably requires.
(r) Real Property Affidavits. The Buyer shall have received from the
Seller an affidavit (i) stating that the Seller is not a "foreign person", as
defined in Section 1445(f)(3) of the Internal Revenue Code, (ii) setting forth
the Seller's taxpayer identification number, (iii) stating that the Seller
intends to file a U.S. income tax return with respect to the sale of such Owned
Property, and (iv) granting the Buyer permission to furnish a copy of such
affidavit to the Internal Revenue Service.
6.2 Conditions Precedent to the Obligations of the Seller. The
obligations of the Seller to enter into and complete the Closing are subject to
the fulfillment on or prior to the Closing Date, of the following conditions,
any one or more of which may be waived by the Seller:
(a) Representations, Warranties and Covenants. The representations,
warranties and covenants of the Buyer and Holdco shall be true, complete and
correct in all material respects as of the Closing Date with the same force and
effect as though made on and as of the Closing Date. The Buyer and Holdco shall
have performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied with by the
Buyer and Holdco on or prior to the Closing Date.
(b) Injunction, etc. At the Closing, there shall not be any Order
outstanding against any party hereto or Law promulgated that restrains,
prohibits, invalidates or otherwise prevents consummation of the transactions
contemplated by, or seeks damages as a result of or otherwise interferes with
this Agreement or any of the conditions to the consummation of the transactions
contemplated by this Agreement or would be likely to have any Material Adverse
Effect on the Business or the Assets to be purchased by the Buyer hereunder.
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(c) Closing Certificates of the Buyer and Holdco. The Buyer and
Holdco shall have tendered to the Seller a certificate signed by a duly
authorized officer of the Buyer or Holdco, as the case may be, dated the Closing
Date, as to the matters set forth in Section 6.2(a) and in form and substance
satisfactory to the Seller.
(d) Delivery of Consideration. The Buyer and Holdco shall have
tendered to the Seller the Cash Payment and the Non-Cash Consideration in
accordance with Section 2.5 hereof.
(e) Opinion of Counsel. The Seller shall have received the opinion
of Xxxxxxxx & Xxxxx, counsel to the Buyer and Holdco.
(f) Other Agreements. The parties hereto shall have entered into the
Escrow Agreement, each of Xx. Xxxxxx X. Xxxxx, Xx. Xxxxx X. Xxxxxxx and Xx. X.X.
Xxxxxxx shall have entered into an employment agreement with the Buyer in a form
similar to that attached as Exhibit C agreed to by the respective parties
thereto and each of Xx. Xxxxxx X. Xxxxx, Xx. Xxxxx X. Xxxxxxx, Xx. X.X. Xxxxxxx,
Xx. and Xx. Xxxx Xxxxxxx shall have executed Amendment No. 1 to the Stockholders
Agreement in a form similar to that attached as Exhibit D and the Joinder To
Registration in Rights Agreement in a form similar to that attached as Exhibit
E.
(g) Consents, Waivers, Licenses, Filings, etc. The consents,
approvals (including stockholder approval), authorizations, licenses,
registrations, declarations or filings listed on Schedule 4.3 hereto shall have
been obtained or made, as the case may be.
SECTION VII
POST-CLOSING COVENANTS
The parties covenant to take the following actions after the Closing
Date:
7.1 Further Information. Following the Closing, each party will
afford to the other party, its counsel and its accountants, during normal
business hours, reasonable access to the books, records and other data of the
Seller or relating to the Business, the Assets, the Assumed Liabilities or the
Seller in its possession with respect to periods prior to the Closing and the
right to make copies and extracts therefrom, to the extent that such access may
be reasonably required by the requesting party (a) to facilitate the
investigation, litigation and final disposition of any claims which may have
been or may be made against any party or its Affiliates and (b) in connection
with any Tax Return, audit, examination, proceeding or determination and (c) for
any other reasonable business purpose.
7.2 Record Retention. Each party agrees that for a period of not
less than seven (7) years following the Closing Date, it shall not destroy or
otherwise dispose of any of the Books and Records relating to the Business, the
Assets, the Assumed Liabilities, the Excluded Assets or the Seller in its
possession with respect to periods prior to the Closing. Each party shall have
the
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right to destroy all or part of such Books and Records after the seventh
anniversary of the Closing Date.
7.3 Tax Assistance. During the six years following the Closing, the
Seller and Shareholders, on the one hand, and the Buyer and Holdco, on the other
hand, will provide each other with such assistance as may reasonably be
requested in connection with the preparation of any Tax Return, any audit or
other examination by any taxing authority, or any judicial or administrative
proceedings relating to liability for Taxes.
7.4 No Assignment Causing Breach. Neither this Agreement nor any
document or instrument delivered pursuant hereto shall constitute an assignment
of any claim, Contract, lease, commitment or sales or purchase order if an
attempted assignment thereof without the consent of any other Person would be
ineffective, constitute a breach thereof or in any way adversely affect the
rights thereunder. Until such consent is obtained, the Seller, the Buyer and
Holdco will cooperate with each other to provide for the Buyer the benefits of,
and to permit the Buyer to assume all liabilities under, any such claim,
Contract, lease, commitment or sales or purchase order, including enforcement at
the request and expense of the Buyer for the benefit of the Buyer of any and all
rights of the Seller against a third party thereto; and any transfer or
assignment to the Buyer by the Seller of any property or property rights or any
Contract which requires the consent or approval of any third party shall be made
subject to such consent or approval being obtained.
7.5 Insurance Coverage. Whether or not the insurance policies listed
on Schedule 3.21 are being assigned to the Buyer on or before the Closing Date,
the Seller (effective on the Closing Date) shall have the Buyer named as an
additional insured and loss payee, as its interest may appear, on all current
insurance policies maintained by the Seller covering time periods beginning
prior to the date hereof and extending beyond the date hereof, until the
expiration date of such policy or policies. With respect to any Liabilities of
the Seller which the Buyer has agreed to assume pursuant to this Agreement or to
indemnify the Seller pursuant to Section 8.3, the Seller agrees to prosecute
diligently any insurance claims which may be asserted by it in respect thereof
and to promptly notify the Buyer of the assertion of each such claim. In the
event that the Seller recovers insurance proceeds in respect of any such
amounts, the Seller shall promptly remit such proceeds to the Buyer; provided
that the Buyer provides assurances reasonably satisfactory to the Seller that
the Buyer is satisfying its obligations with regard to the Assumed Liability and
under Section VIII.
7.6 Employee Matters and Employee Benefit.
(a) Assumed Plans. Subject to the Buyer's review of the Plans prior
to the Closing Date, the Buyer, and the Seller shall cause the Buyer to assume
sponsorship of the Plans listed on Schedule 7.6 hereto. The Plans assumed by the
Buyer under the foregoing provision of this Section 7.6(a) shall be referred to
herein as the "Assumed Plans." The Buyer and the Seller shall use their
reasonable best efforts to cooperate in the execution of any documents, adoption
of any corporate resolutions or the taking of any other reasonable actions
necessary to effectuate such assumption of sponsorship and related transfers of
trust assets or other funding vehicles or insurance
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contracts. After the date hereof the Seller shall provide any information and
assistance reasonably requested by the Buyer in connection with the Buyer's
efforts to maintain the Assumed Plans in accordance with all applicable Laws,
and in connection with the fulfillment by the Buyer of any reporting, disclosure
or filing requirements arising after the date hereof with respect to the Assumed
Plans.
(b) Non-Transferred Employees. Nothing in this Section 7.6 shall be
deemed to impose upon the Buyer any liabilities or responsibilities for periods
prior to the Closing regarding individuals who do not become employees of the
Buyer pursuant to offers of employment made under Section 7.6(d) (including
without limitation individuals to whom offers are not required to be made under
Section 7.6(d)), including without limitation liabilities or responsibilities
for (i) pension, retirement, profit-sharing, savings, medical, dental,
disability income, life insurance or accidental death benefits, whether insured
or self-insured, whether funded or unfunded, (ii) workers' compensation (both
long term and short term) benefits, whether insured or self-insured, whether or
not accruing or based upon exposure to conditions prior to the date of this
Agreement or for claims incurred or for disabilities commencing prior to the
Closing Date, or (iii) severance benefits; provided that the Buyer shall be
responsible with respect to Assumed Plans that are intended to be qualified
under Section 401(a) of the Code to the extent that such Plans must be
administered with respect to pre-Closing benefits accrued thereunder, and the
Buyer shall be responsible for such obligations under Code Section 4980B and
ERISA Section 601 et seq. ("COBRA") as are set forth on Schedule 7.6 hereto.
(c) Severance Expressly Excluded. Without limiting the generality of
any other responsibilities of the Seller, the Seller shall be (prior to and
after the date hereof) solely responsible for any severance pay obligations
arising prior to or through the Closing Date.
(d) Offers of Employment. The parties agree that the Buyer will
offer as of the Closing Date employment at will to all employees of the Seller
that are actively employed by the Seller immediately prior to the Closing Date
(other than the employees referred to in Section 6.1(g)); provided that nothing
herein shall require the continuation of any employment or any terms of
employment after the Closing Date. The Seller shall be responsible for complying
with the notice requirements of COBRA and the Workers Adjustment and Retraining
Notification Act with respect to any event or condition on or prior to the
Closing Date. However, the Buyer and Holdco represent and warrant that the Buyer
has no current intention of terminating any employee of the Seller.
Notwithstanding any other provision of this Agreement, the Buyer shall not have
any responsibilities for any legally mandated continuation of health care
coverage, or for compliance with any related requirements, for employees or
their dependents or beneficiaries who incur a loss of health care coverage due
to a qualifying event occurring before or through the Closing. Notwithstanding
the foregoing, Buyer shall, with respect to all employees accepting employment
offered pursuant to this Section, be responsible for all COBRA notices and
coverage and all certificates of coverage required under the Health Insurance
Portability Act required subsequent to the Closing.
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7.7 Non-Compete and Confidentiality.
(a) Covenants Against Competition. The Seller acknowledges that the
Business (i) is national in scope, (ii) has been developed by a limited number
of persons who have received certain confidential information and trade secrets
of the Seller; and (iii) would not be the subject of this Agreement but for the
covenants of the Seller contained in this Section. Accordingly, the Seller
covenants and agrees not to (1) engage in the Business; (2) render any services
to any Person (other than the Buyer) engaged in such activities; or become
interested in any such Person as a partner, member, principal, agent, trustee,
consultant or in any other similar relationship or capacity; or (3) solicit or
encourage to leave the employment of the Buyer, any employee of the Buyer or
hire any employee who has left the employment of the Buyer after the date of
this Agreement within five (5) years of the termination of such employee's
employment with the Buyer; in the United States of America, directly or
indirectly, for a period commencing on the Closing Date and terminating 5 years
following the Closing Date.
(b) Confidentiality. From the date hereof the Seller shall keep
secret and retain in strictest confidence, and shall not use for the benefit of
itself or others all information about Holdco, the Buyer or the Buyer's business
learned by the Seller in the course of the negotiation of this Agreement and the
transactions contemplated hereby (the "Buyer Information"). As from the Closing,
the Seller shall keep secret and retain in strictest confidence, and shall not
use for the benefit of itself or others all confidential information with
respect to the Seller and its Business and the Assets, or learned by the Seller
heretofore or hereafter directly or indirectly from its own information or the
Buyer, including, without limitation, information with respect to (a)
prospective products and facilities, (b) sales figures, (c) profit or loss
figures, (d) customers, clients, suppliers, sources of supply and customer lists
(the "Confidential Company Information"), and shall not disclose such
Confidential Company Information except with the Buyer's express written
consent. This provision does not prohibit legally mandated disclosure or
disclosure or use of Buyer Information or Confidential Company Information which
becomes publicly known through no wrongful act of either the Buyer or Holdco or
the Seller or any of its shareholders, as the case may be. The parties
acknowledge that they remain bound by the documents referred to in Section 9.4
until Closing, whereupon such documents shall be superseded in their entirety by
the provisions hereof.
(c) Rights and Remedies. Upon the breach or threatened breach of any
of the covenants in this section (the "Restrictive Covenants"), the Buyer has
the right to have the Restrictive Covenants specifically enforced (without
posting any bond) by any court having equity jurisdiction, including, without
limitation, the right to an entry against the Seller of restraining orders and
injunctions (preliminary, mandatory, temporary and permanent) against
violations, threatened or actual, and whether or not then continuing, it being
acknowledged and agreed that any such breach or threatened breach will cause
irreparable injury to the Buyer and that money damages will not provide adequate
remedy to the Buyer. Further, the Buyer has the right to require the Seller to
account for and pay over to the Buyer all compensation, profits, monies,
accruals, increments or other benefits derived or received by such person the
result of any transactions constituting a breach of any of the Restrictive
Covenants. The aforementioned rights and remedies are severally
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enforceable and are in addition to, and not in lieu of, any other rights and
remedies available to the Buyer under law or in equity including pursuant to
Section VIII:
(d) Enforceability. The Buyer and the Seller intend to and hereby
confer jurisdiction to enforce the Restrictive Covenants upon the courts of any
jurisdiction within the geographical scope of the Restrictive Covenants. If any
court determines that any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable, the remainder of the Restrictive Covenants shall not
thereby be affected and shall be given full effect, without regard to the
invalid portions. Further, if any of the Restrictive Covenants, or any part
thereof, is found unenforceable because of the duration of such provision or the
area covered thereby, such court shall have the power to reduce the duration or
area of such provisions and, in its reduced form, such provision shall then be
enforceable and shall be enforced.
7.8 Further Assurances. From and after the Closing, each of the
Buyer, Holdco and the Seller will, and will cause their respective Affiliates
to, execute and deliver such further instruments of sale, conveyance, transfer,
assignment and delivery and such consents, assurances, powers of attorney and
other instruments and take such other action as reasonably may be necessary to
in order to vest in the Buyer (and record and perfect) all right, title and
interest of the Seller in and to the Assets, to put the Buyer in actual
possession and control of the Business and to otherwise fully effectuate and
carry out the transactions contemplated by this Agreement and the Related
Documents. The parties shall use their commercially reasonable best efforts to
fulfill or obtain the fulfillment of the conditions to the Closing, including,
without limitation, the execution and delivery of any Document, the execution
and delivery of which are conditions precedent to the Closing.
7.9 Mail and Other Receipts. The Seller agrees to deliver to the
Buyer promptly upon receipt thereof of any mail, checks or documents which it
receives pertaining to the Business, the Assets (but not the Excluded Assets) or
the Assumed Liabilities. Further, if the Seller receives any payment of the
Accounts Receivable or other asset included in the Assets after the Closing
Date, the Seller will hold such amounts received or paid as trustee for and
remit such payments to the Buyer as soon as practicable. After the Closing Date
the Buyer is entitled (i) to receive and open mail addressed to the Seller and
(ii) to deal with the contents thereof in any manner the Buyer sees fit. The
Buyer agrees to deliver to the Seller promptly upon receipt thereof of any mail,
checks or documents which it receives pertaining to the Excluded Assets or the
Excluded Liabilities.
7.10 Business Operations. The Buyer agrees to operate the Business
as a business unit separate from its own operations until such time as the
Buyer's Board of Directors in good faith determines that it is no longer in the
Buyer's interests to do so.
7.11 Continued Management of the Seller. The current directors and
officers of the Seller shall not, by virtue of the transactions contemplated
hereby, be precluded from continuing to direct and operate the Seller after the
Closing Date.
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SECTION VIII
SURVIVAL; INDEMNIFICATION
8.1 Survival of Representations, Warranties, Covenants and
Agreements. The representations, warranties, covenants and agreements of the
Seller, the Buyer and Holdco contained in this Agreement will survive the
Closing (a) for the applicable statutes of limitation (including all periods of
extension) with respect to the representations and warranties contained in
Sections 3.1 through 3.4, 3.9, 3.23 and 4.1 through 4.4, (b) for 3 1/2 years
from the Closing with respect to the representations and warranties contained in
Section 3.20, (c) until sixty (60) days after the receipt by the Buyer from its
independent accountants of its audited financial statements for the first full
fiscal year after the Closing in the case of all other representations and
warranties, and (d) with respect to each covenant or agreement contained in this
Agreement, until ninety (90) days following the last date on which such covenant
or agreement is to be performed, pursuant to this Agreement or, if no such date
is specified, indefinitely; provided however that any representation, warranty,
covenant or agreement that would otherwise terminate in accordance with clause
(a), (b), (c) and (d) above will continue to survive, if a Party gives notice to
another Party hereunder that it is aware of circumstances which may give rise to
a Claim Notice (as defined below) at, on or prior to such termination date,
until the related claim for indemnification has been satisfied or otherwise
resolved as provided in this Section VIII.
8.2 Indemnification of the Buyer and Holdco. Subject to the
limitations contained in this Section VIII, the Seller agrees to indemnify,
defend and hold harmless the Buyer, Holdco, and their respective Affiliates,
directors, officers, partners, employees, successors and assigns from and
against any and all losses, Liabilities (including punitive or exemplary damages
and fines or penalties and any interest thereon), expenses (including fees and
disbursements of counsel and expenses of investigation and defense), claims,
liens or other obligations of any nature whatsoever (hereinafter individually, a
"Loss" and collectively, "Losses") which, directly or indirectly, arise out of,
result from or relate to (a) any inaccuracy in or any breach of any
representation and warranty, (b) any breach of any covenant or agreement, of the
Seller contained in this Agreement or in any Related Document, or (c) any
Excluded Liability.
8.3 Indemnification of the Seller. Subject to the limitations
contained in this Section VIII, Holdco and the Buyer, jointly and severally,
agree to indemnify, defend and hold harmless the Seller, its Affiliates and
their respective directors, officers, partners, shareholders, employees,
successors and assigns from and against any and all Losses which, directly or
indirectly, arise out of, result from or relate to (a) any inaccuracy in or any
breach of any representation and warranty, or any breach of any covenant or
agreement, of the Buyer contained in this Agreement, or (b) any Assumed
Liability assumed by the Buyer pursuant to Section 2.3.
8.4 Limitations on Indemnification. Notwithstanding anything to the
contrary contained in this Agreement, the Seller shall have no liability, nor be
subject to any claim or demand under this Section VIII, in each case in respect
of any inaccuracy in or any breach of any
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representation or warranty of the Seller contained in this Agreement only,
unless and until the amount of Losses exceeds $500,000 in the aggregate, and
then to the extent of such Losses; provided, however, that in no event shall
such liability for the recovery of any Losses from the Seller exceed the amount
of the funds held from time to time pursuant to the Escrow Agreement and
available for such Losses pursuant to the terms of the Escrow Agreement plus the
amount of $4,000,000.00 in the aggregate (in the manner and as provided below).
The first recourse of the Buyer and/or Holdco under Section 8.2 shall be to the
amounts held pursuant to the Escrow Agreement. To the extent the Losses of Buyer
and/or Holdco which are subject to indemnification by the Seller under Section
8.2 thereafter exceed the amounts held and available for such Losses pursuant to
the Escrow Agreement at that time, up and until the third anniversary of the
Closing Date, Buyer's and/or Holdco's second recourse for recovery from the
Seller shall only be a set-off against the principal amount of the Note, which
set-off shall not exceed $4,000,000 in the aggregate. No set-off against the
Note may occur prior to the delivery of the relevant Claim Notice. This second
recourse shall be the final recourse of Buyer and/or Holdco against the Seller
and shall be the final recourse of Buyer for all losses.
8.5 Method of Asserting Claims. The party making a claim under this
Section VIII is referred to as the "Indemnified Party" and the party against
whom such claims are asserted under this Section VIII is referred to as the
"Indemnifying Party". All claims by any Indemnified Party under this Section
VIII shall be asserted and resolved as follows:
(a) In the event that any claim or demand for which an Indemnifying
Party would be liable to an Indemnified Party hereunder is asserted against or
sought to be collected from such Indemnified Party by a third party, said
Indemnified Party shall as soon as reasonably practicable notify in writing the
Indemnifying Party of such claim or demand, (the "Claim Notice"); provided,
however, that any failure to give such Claim Notice will not be deemed a waiver
of any rights of the Indemnified Party except to the extent the rights of the
Indemnifying Party are actually prejudiced by such failure. Actually prejudiced,
when used in this Section 8.5(a), means prejudice resulting in an inability of
the Indemnifying Party to obtain any fact, evidence or witness, or which results
in an increase in cost or expense to the Indemnifying Party greater than would
likely have been incurred on the providing of prompt notice. The Indemnifying
Party, upon request of the Indemnified Party, shall retain counsel (who shall be
reasonably acceptable to the Indemnified Party) to represent the Indemnified
Party and shall pay the reasonable fees and disbursements of such counsel with
regard thereto; provided, however, that any Indemnified Party is hereby
authorized prior to the date on which it receives written notice from the
Indemnifying Party designating such counsel, to retain counsel, whose reasonable
fees and expenses shall be at the expense of the Indemnifying Party, to file any
motion, answer or other pleading and take such other action which it reasonably
shall deem necessary to protect its interests or those of the Indemnifying Party
until the date on which the Indemnified Party receives such notice from the
Indemnifying Party. After the Indemnifying Party shall retain such counsel, the
Indemnified Party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
unless (x) the Indemnifying Party and the Indemnified Party shall have mutually
agreed to the retention of such counsel or (y) the named parties of any such
proceeding (including any impleaded parties) include both the Indemnifying Party
and the Indemnified Party
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and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. The Indemnifying
Party shall not, in connection with any proceedings or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one such
firm for the Indemnified Party (except to the extent the Indemnified Party
retained counsel to protect its (or the Indemnifying Party's) rights prior to
the selection of counsel by the Indemnifying Party). If requested by the
Indemnifying Party, the Indemnified Party agrees to cooperate with the
Indemnifying Party and its counsel in contesting any claim or demand which the
Indemnifying Party defends. A claim or demand may not be settled by the
Indemnifying Party without the prior written consent of the Indemnified Party
(which consent will not be unreasonably withheld) unless, as part of such
settlement, the Indemnified Party shall receive a full and unconditional release
reasonably satisfactory to the Indemnified Party and provided that the
settlement does not impose a material impediment or obligation on the
Indemnified Party.
(b) In the event any Indemnified Party shall have a claim against
any Indemnifying Party hereunder which does not involve a claim or demand being
asserted against or sought to be collected from it by a third party, the
Indemnified Party shall send a Claim Notice with respect to such claim to the
Indemnifying Party.
(c) After delivery of a Claim Notice, so long as any right to
indemnification exists pursuant to this Section VIII, the affected parties each
agree to retain all Books and Records related to such Claim Notice. In each
instance, the Indemnified Party shall have the right to be kept fully informed
by the Indemnifying Party and its legal counsel with respect to any legal
proceedings. Any information or documents made available to any party hereunder
and designated as confidential by the party providing such information or
documents and which is not otherwise generally available to the public and not
already within the knowledge of the party to whom the information is provided
(unless otherwise covered by the confidentiality provisions of any other
agreement among the parties hereto, or any of them), and except as may be
required by applicable law, shall not be disclosed to any third Person (except
for the representatives of the party being provided with the information, in
which event the party being provided with the information shall request its
representatives not to disclose any such information which it otherwise required
hereunder to be kept confidential).
(d) Notwithstanding that by virtue of the operation of the
$500,000.00 limitation in Section 8.4 a claim or demand (whether or not asserted
by a third party) would not result in a Loss with respect to which the Seller
would be an Indemnifying Party, nonetheless the Seller shall be provided with
notice of such claim or demand and may, by written notice, to the Buyer, elect
to undertake the responsibilities imposed on the Indemnifying Party in Section
8.5(a) above. Such undertaking shall not be deemed to be an assumption of any
liability or indemnification other than as set forth in this Agreement or a
waiver of any limitation on indemnification set forth in Section 8.4.
8.6 Remedies. The Parties acknowledge that money damages would not
be a sufficient remedy for any breach of any covenant in this Agreement and
agree that each of the parties shall be entitled to specific performance and
injunctive relief as remedies for any such breach (without any requirement of
posting a bond). The parties acknowledge that, other than injunctive
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relief, and in the absence of Actual Fraud, their sole and exclusive remedies
with respect to any inaccuracy in or breach of any representation, warranty or
covenant in this Agreement or any Related Document shall be as set forth in this
Section VIII, and that the representations, warranties and/or covenants in this
Agreement or any Related Document create no other rights among the parties
hereto or in favor of any third party.
8.7 Bard Litigation. The Seller hereby irrevocably agrees and
covenants with the Buyer and Holdco:
(a) to notify it insurers and make a request for coverage with
respect to the Bard Litigation and thereafter to take all possible actions to
make and preserve all claims thereunder with respect to the Bard Litigation;
provided, that the Seller's obligation to make any payment or financial
contribution for any legal fees or other costs associated with the Bard
Litigation is only as specifically provided in Section 8.7(c) below;
(b) to co-operate to the fullest degree practicable with the Buyer
in defending, appealing or settling the Bard Litigation or implementing any
redesign program to avoid or mitigate liability with respect to the products the
subject of the Bard Litigation; provided, that the Seller's obligation to make
any payment or financial contribution for any legal fees or other costs
associated with the Bard Litigation is only as specifically provided in Section
8.7(c) below;
(c) as a separate and independent indemnity, with respect to the
legal fees and disbursements associated with defending, appealing and/or
settling the Bard Litigation and all damages, settlement payments and/or
engineering, design and manufacturing fees, costs and expenses in relation to
any product redesign (including substitute product design) for the purpose of
liability avoidance or court order or settlement compliance with the respect to
the products the subject the Bard Litigation, in each case in excess of any
insurance coverage with respect thereto (together, the "Bard Costs"), that the
Seller will indemnify the Buyer as to 50% of all Bard Costs up to a maximum of
$1,000,000. The Buyer agrees that its first recourse with respect to such Bard
Costs is limited to $500,000 in cash held pursuant to the terms of the Escrow
Agreement and thereafter to a further $500,000 by way of set-off against the
Note; provided, that no set-off may occur without prior written notice thereof
to the Seller. This shall be the final recourse of Buyer and/or Holdco against
the Seller with regard to the Bard Litigation.
SECTION IX
MISCELLANEOUS
9.1 Termination. This Agreement may be terminated at any time prior
to the Closing as follows:
(a) by the Buyer, on the one hand, or by the Seller, on the other
hand, by written notice to the other parties hereto, in the event that the
Closing shall not have occurred on or prior
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to the close of business on November 7, 1997 (unless such event has been caused
by a breach of this Agreement by the party seeking such termination); or
(b) at any time on or prior to the Closing Date, by written consent
of the Buyer and the Seller.
In the event this Agreement is terminated pursuant to this Section
9.1, (i) this Agreement shall become null and void and of no further force and
effect, except for the provisions of Section 5.4 and 5.7, and (ii) there shall
be no liability on the part of the Seller, the shareholders of the Seller or the
Buyer, their Affiliates or their respective partners, officers, directors,
employees or agents, provided, however, that if such termination shall result
from the wilful breach by a party of the provisions contained in this Agreement,
such party shall be fully liable for any and all damages, costs and expenses
sustained or incurred as a result of such breach by the other parties hereto.
9.2 Expenses. Subject only to the provisions of Sections 5.4, 5.9,
6.1(n) and (o), each of the parties hereto shall pay its own expenses
(including, without limitation, attorneys' and accountants' fees and
out-of-pocket expenses) incident to this Agreement and the transactions
contemplated hereby.
9.3 Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
given personally, telegraphed, telexed, sent by facsimile transmission or sent
by prepaid air courier or certified, registered or express mail, postage
prepaid. Any such notice shall be deemed to have been given (a) when received,
if delivered in person, telegraphed, telexed, sent by facsimile transmission and
confirmed in writing within three (3) Business Days thereafter or sent by
prepaid air courier or (b) three (3) Business Days following the mailing
thereof, if mailed by certified first class mail, postage prepaid, return
receipt requested, in any such case as follows (or to such other address or
addresses as a party may have advised the other in the manner provided in this
Section 9.3):
If to the Seller:
Crispaire Corporation
Xxxxxxx 00 Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn.: Xxxxxx X. Xxxxx
Fax: (000) 000-0000
With a copy to (which shall not constitute notice):
Xxxxx, Xxxx & Xxxxx, LLC
00 Xxxxxxxxx Xxxxxx Xxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxx Xxxx
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Fax: (000) 000-0000
If to the Buyer and/or Holdco:
Airxcel, Inc.
0000 Xxxxx Xx. Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxx 00000
Attn.: Xxx Xxxxx
Fax: (000) 000-0000
With a copy to (which shall not constitute notice):
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn.: Xxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
9.4 Entire Agreement. This Agreement (including the Exhibits and
Schedules) and the agreements, certificates and other documents delivered
pursuant to this Agreement contain the entire agreement among the parties with
respect to the transactions described herein, and supersede all prior
agreements, written or oral, with respect thereto including the letter and
confidentiality agreement dated August 28, 1997 (to the extent provided in
Section 7.7(b) above).
9.5 Waivers and Amendments. This Agreement may be amended,
superseded, cancelled, renewed or extended, and the terms hereof may be waived,
only by a written instrument signed by the parties or, in the case of a waiver,
by the party waiving compliance. No delay on the part of any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof. The
rights and remedies of any parties based upon, arising out of or otherwise in
respect of any inaccuracy in or breach of any representation, warranty, covenant
or agreement contained in this Agreement shall in no way be limited by the fact
that the act, omission, occurrence or other state of facts upon which any claim
of any such inaccuracy or breach is based may also be the subject matter of any
other representation, warranty, covenant or agreement contained in this
Agreement (or in any other agreement between the parties as to which there is no
inaccuracy or breach).
9.6 Governing Law. All questions concerning the construction,
validity and interpretation of this Agreement hereto shall be governed by and
construed in accordance with the internal laws of the State of New York, without
giving effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New York.
9.7 Binding Effect; No Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and
permitted assigns. This Agreement is not assignable by any party hereto without
the prior written consent of the other parties
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hereto except by operation of law and any other purported assignment shall be
null and void; provided, however, that without the consent of the other parties
hereto the Buyer may assign this Agreement to any lenders to the Buyer or any
subsequent purchaser of all or any part of the Business, and the Seller may
assign the benefit of this Agreement pro-rata to its Shareholders in any
liquidation or similar distribution.
9.8 Severability of Provisions. If any provision or any portion of
any provision of this Agreement or the application of such provision or any
portion thereof to any Person or circumstance, shall be held invalid or
unenforceable, the remaining portion of such provision and the remaining
provisions of this Agreement, or the application of such provision or portion of
such provision as is held invalid or unenforceable to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby.
9.9 Counterparts. This Agreement may be executed by the parties
hereto in one or more counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies
hereof each signed by less than all, but together signed by all of the parties
hereto.
9.10 Waiver of Jury Trial. Each of the parties hereto waives to the
fullest extent permitted by law any right it may have to trial by jury in
respect of any claim, demand, action or cause of action based on, or arising out
of, under or in connection with this Agreement, or any course of conduct, course
of dealing, verbal or written statement or action of any party hereto, in each
case whether now existing or hereafter arising, and whether in contract, tort,
equity or otherwise. The parties to this Agreement each hereby agrees that any
such claim, demand, action or cause of action shall be decided by court trial
without a jury and that the parties to this Agreement may file an original
counterpart of a copy of this Agreement with any court as evidence of the
consent of the parties hereto to the waiver of their right to trial by jury.
9.11 Bulk Transfer Laws. The Seller, Buyer and Holdco hereby agree
to waive compliance with the provisions of the Uniform Commercial Code - Bulk
Transfers, also known as the Bulk Sales Act, and the provisions of any similar
law.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the date and year first above written.
CRISPAIRE CORPORATION
By:
-------------------------
Its:
AIRXCEL, INC.
By:
-------------------------
Its:
AIRXCEL HOLDINGS, INC.
By:
-------------------------
Its:
