Exhibit 99.1
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ASSET PURCHASE AGREEMENT
BY AND AMONG
SMI SNP, INC.
(THE "BUYER"),
METROMEDIA INTERNATIONAL GROUP, INC.
("PARENT"),
AND
SNAPPER, INC.
(THE "COMPANY")
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TABLE OF CONTENTS
PAGE
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1. Definitions..............................................................................................1
2. Purchase and Sale........................................................................................7
(a) Basic Transaction......................................................................7
(b) Assumed Liabilities....................................................................8
(c) Excluded Liabilities..................................................................10
(d) Purchase Price........................................................................11
(e) Certain Adjustments...................................................................11
(f) Allocation of Purchase Price..........................................................13
(g) Real Estate Taxes.....................................................................14
(h) The Closing...........................................................................14
(i) Deliveries at the Closing.............................................................14
3. Representations and Warranties of Parent................................................................14
(a) Organization of Parent................................................................14
(b) Authorization of Transaction..........................................................14
(c) Noncontravention......................................................................14
(d) Brokers' Fees.........................................................................15
4. Representations and Warranties Concerning the Company...................................................15
(a) Organization, Qualification, and Corporate Power......................................15
(b) Noncontravention......................................................................15
(c) Broker's Fees.........................................................................16
(d) Title to Assets.......................................................................16
(e) Subsidiaries..........................................................................16
(f) Financial Statements..................................................................16
(g) No Material Change....................................................................16
(h) Absence of Change or Event............................................................16
(i) Legal Compliance......................................................................18
(j) Tax Matters...........................................................................18
(k) Real Property.........................................................................19
(l) Intellectual Property.................................................................20
(m) Contracts.............................................................................23
(n) Litigation............................................................................24
(o) Employee Matters......................................................................24
(p) Environmental Matters.................................................................26
(q) Certain Business Relationships with the Company.......................................28
(r) Insurance.............................................................................28
(s) Receivables...........................................................................28
(t) Inventory.............................................................................28
(u) Personal Property.....................................................................29
(v) Disclaimer of other Representations and Warranties....................................29
5. Representations and Warranties of the Buyer.............................................................30
(a) Organization of the Buyer.............................................................30
(b) Authorization of Transaction..........................................................30
(c) Noncontravention......................................................................30
(d) Availability of Financing.............................................................30
(e) Brokers' Fees.........................................................................30
TABLE OF CONTENTS
(Cont'd)
PAGE
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6. Pre-Closing Covenants...................................................................................30
(a) General...............................................................................30
(b) Notices and Consents..................................................................31
(c) Operation of Business.................................................................31
(d) Full Access...........................................................................33
(e) Notice of Developments................................................................33
(f) Employees.............................................................................33
(g) No Solicitation.......................................................................35
(h) Insurance.............................................................................35
7. Post-Closing Covenants..................................................................................35
(a) General...............................................................................35
(b) Litigation Support; Business Records..................................................36
(c) Transition............................................................................36
(d) Covenant Not to Compete...............................................................36
(e) Bulk Sales Requirements...............................................................35
(f) Termination of Self-Insurance Obligations.............................................37
(g) Subcontracting........................................................................37
8. Conditions to Obligation to Close.......................................................................37
(a) Conditions to Obligation of the Buyer.................................................37
(b) Conditions to Obligation of the Company...............................................39
9. Survival of Representations, Warranties and Covenants; Indemnification..................................40
(a) Representations, Warranties and Covenants.............................................40
(b) Indemnification by the Company and Parent.............................................40
(c) Indemnification by the Buyer..........................................................40
(d) Procedure for Claims By Third Parties.................................................41
(e) Procedure for Claims Between the Parties..............................................42
(f) Exclusive Remedy......................................................................43
(g) Limits on Indemnification.............................................................43
10. Termination.............................................................................................43
(a) Termination of Agreement..............................................................43
(b) Effect of Termination.................................................................44
11. Miscellaneous...........................................................................................44
(a) Press Releases and Public Announcements...............................................44
(b) No Third-Party Beneficiaries..........................................................45
(c) Entire Agreement......................................................................45
(d) Succession and Assignment.............................................................45
(e) Counterparts..........................................................................45
(f) Headings..............................................................................45
(g) Notices...............................................................................45
(h) Governing Law.........................................................................46
(i) Amendments and Waivers................................................................46
(j) Severability..........................................................................47
(k) Expenses..............................................................................47
(l) Construction..........................................................................47
(m) Incorporation of Exhibits and Schedules...............................................47
EXHIBITS
Exhibit A Form of Assumption Agreement
Exhibit B Form of Xxxx of Sale
Exhibit C Form of Deeds
Exhibit D Form of Intellectual Property Assignments
Exhibit E Form of Transition Services Agreement
Exhibit F Terms of Post-Retirement Benefits
Exhibit G Financial Statements
Exhibit H Commitment Letters
Exhibit I Title Affidavit
Exhibit J WARN Notice
Exhibit K Severance Policy
Exhibit L Environmental Insurance Policy
Exhibit M FIRPTA Affidavit
SCHEDULES
Annex I Disclosure Schedule
Section 3(d) Broker's Fees
Section 4(a) Directors and Officers/Jurisdictions
Section 4(b) Consents/Violations
Section 4(d) Title to Assets
Section 4(f) Undisclosed Liabilities
Section 4(g) Material Adverse Change
Section 4(h) Certain Changes
Section 4(j) Tax Matters
Section 4(k) Real Property
Section 4(l) Intellectual Property
Section 4(m) Contracts
Section 4(n) Litigation
Section 4(o) Employee Matters
Section 4(p) Environmental Matters
Section 4(q) Affiliate Transactions
Section 4(r) Insurance
Section 4(s) Receivables
Section 4(t) Inventory
Section 4(u) Personal Property
Section 6(c)(viii) Employment Agreements
Schedule I Excluded Contracts
Schedule II Net Purchased Assets, together with Purchase Price
Calculation Based on August Financials and sample
allocation of Purchase Price among acquired Assets
Schedule III Bid Balance Sheet
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ASSET PURCHASE AGREEMENT
Asset Purchase Agreement (the "AGREEMENT") is entered into as of October
22, 2002, by and among SMI SNP, INC., a Delaware corporation (the "BUYER"),
METROMEDIA INTERNATIONAL GROUP, INC. ("PARENT"), and SNAPPER, INC., a Georgia
corporation (the "Company"). The Buyer, the Company and Parent are each referred
to herein individually as a "PARTY" and, collectively, as the "Parties."
WHEREAS, the Company is engaged in the manufacture and marketing of
outdoor power equipment (the "BUSINESS");
WHEREAS, Parent owns all of the issued and outstanding capital stock of
the Company;
WHEREAS, except for the Excluded Assets (as defined below), the Company
desires to sell and transfer the Assets (as defined below) to the Buyer, and the
Buyer desires to purchase the same from the Company, subject to the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the promises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties hereby agree as follows.
1. DEFINITIONS.
"ADJUSTED PURCHASE PRICE" has the meaning set forth in Section 2(e)(i)
below.
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act of 1934, as amended.
"AIG INSURANCE" has the meaning set forth in Section 8(a)(viii) below.
"ASSETS" has the meaning set forth in Section 2(a) below.
"ASSUMED CONTRACTS" means all of the Contracts of the Company set forth
on Section 4(m) of the Disclosure Schedule other than any Excluded Contract.
"ASSUMED LIABILITIES" has the meaning set forth in Section 2(b) below.
"ASSUMPTION AGREEMENT" means an Assumption Agreement in the form of
EXHIBIT A attached hereto.
"BID BALANCE SHEET" has the meaning set forth in Section 2(e)(ii) below.
"XXXX OF SALE" means a Xxxx of Sale from the Company in the form of
EXHIBIT B attached hereto.
"BUSINESS" has the meaning set forth in the introduction to this
Agreement.
"BUYER" has the meaning set forth in the preface above.
"BUYER INDEMNITEES" has the meaning set forth in Section 9(b) below.
"BUYER LOSSES" has the meaning set forth in Section 9(b) below.
"CAPITAL LEASES" means the Contracts set forth on Section 4(m)(ii) of the
Disclosure Schedule.
"CASH" means cash and cash equivalents (including marketable securities
and short term investments) calculated in accordance with GAAP applied on a
basis consistent with the preparation of the Financial Statements.
"CHANGE OF CONTROL AGREEMENTS" means the Contracts set forth on Section
4(o)(i)(C) of the Disclosure Schedule.
"CLEANUP" has the meaning set forth in Section 4(p)(v)(A) below.
"CLOSING" has the meaning set forth in Section 2(h) below.
"CLOSING DATE" has the meaning set forth in Section 2(h) below.
"CLOSING DATE BALANCE SHEET" has the meaning set forth in Section
2(e)(iii) below.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY" has the meaning set forth in the preface above.
"COMPETING TRANSACTION" means any business combination or
recapitalization involving the Company or any acquisition or purchase of all or
a significant portion of the assets of, or any material equity interest in, the
Company or any similar transaction with respect to the Company involving any
Person or entity other than the Buyer or its Affiliates.
"CONFIDENTIAL INFORMATION" means any information concerning the
businesses and affairs of the Company that is not already generally available to
the public.
"CONTRACT" means any contract, lease, license, purchase order, sales
order or other agreement or binding commitment, whether or not in writing,
relating to the Company and the Business, including noncompetition agreements.
"DEALER NETWORK FINANCING FACILITY PROGRAMS" means (a) the dealer network
financing facility program established by the Company with Textron Financial
Corporation pursuant to that certain Program Agreement dated as of August 24,
2001 by and between the Company and Textron Financial Corporation, together with
the Repurchase Agreement dated as of August 24, 2001 related thereto, as
amended, (b) the floor plan financing program established by the Company with
Transamerica Commercial Finance Corporation pursuant to that Manufacturer's
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Financing Agreement dated as of May 3, 1996 by and between the Company and
Transamerica Commercial Finance Corporation, as amended, and (c) the
arrangements entered into by the Company with respect to the dealers listed on
Section 4(f) of the Disclosure Schedule pursuant to which the Company has
assumed the interest obligations incurred by the dealers in connection with
certain bank financing arranged for such dealers with their local banks.
"DEEDS" means the special or limited warranty deeds conveying title to
the Owned Real Property substantially in the form of EXHIBIT C hereto.
"DISCLOSURE SCHEDULE" means the disclosure schedule delivered by the
Company and/or Parent to the Buyer on the date hereof and attached as Annex I
attached hereto.
"EMPLOYEE BENEFIT PLAN" means any employee benefit plan or compensation
plan, agreement or arrangement covering present or former employees of the
Company (including those within the meaning of ERISA Section 3(3)), stock
purchase plan, stock option plan, fringe benefit plan, change in control plan,
severance plan, bonus plan, pension plan and any other deferred compensation
agreement or plan or funding arrangement.
"EMPLOYEE PENSION BENEFIT PLAN" has the meaning set forth in ERISA
Section 3(2).
"EMPLOYEE WELFARE BENEFIT PLAN" has the meaning set forth in ERISA
Section 3(1).
"ENCUMBRANCES" means all pledges, liens, charges, encumbrances,
easements, encroachments, defects, security interests, mortgages, claims,
options and restrictions of every kind.
"ENVIRONMENTAL LAWS" has the meaning set forth in Section 4(p)(v)(B)
below.
"ENVIRONMENTAL LIABILITIES AND COSTS" has the meaning set forth in
Section 4(p)(v)(C) below.
"EQUIPMENT AND FURNISHINGS" has the meaning set forth in Section 2(a)(i)
below.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" means each entity which is treated as a single employer
with the Company for purposes of Code Section 414.
"ESTIMATED CLOSING DATE BALANCE SHEET" has the meaning set forth in
Section 2(e)(ii) below.
"EXCLUDED ASSETS" means (i) all Cash, (ii) all unamortized goodwill of
the Company as reflected on the Closing Date Balance Sheet and (iii) any
deferred Tax asset.
"EXCLUDED CONTRACTS" means (i) all Contracts (other than Capital Leases)
relating to Indebtedness, including without limitation, the Revolving Credit
Facility, (ii) except to the extent otherwise assumed by Buyer under this
Agreement, the Change of Control Agreements, (iii) the Union Contract, and (iv)
any other Contract set forth on SCHEDULE I attached hereto.
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"EXCLUDED LIABILITIES" has the meaning set forth in Section 2(c) below.
"FINANCIAL STATEMENTS" has the meaning set forth in Section 4(f) below.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time and consistently applied.
"XXXX-XXXXX-XXXXXX ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
"HAZARDOUS SUBSTANCES, OILS, POLLUTANTS AND CONTAMINANTS" has the meaning
set forth in Section 4(p)(v)(D) below.
"INDEBTEDNESS" means with respect to the Company, (a) all indebtedness of
the Company for borrowed money, including, without limitation, any and all
amounts outstanding under the Revolving Credit Facility, but excluding the
Dealer Network Financing Facility Programs and the Capital Leases (b) all
obligations of the Company evidenced by notes, bonds, debentures or other
similar instruments, and (c) all obligations, contingent or otherwise, of the
Company in respect of acceptances, letters of credit or similar extensions of
credit.
"INDEMNIFICATION ACKNOWLEDGMENT" has the meaning set forth in Section
9(d)(i)(B) below.
"INDEMNITEE" has the meaning set forth in Section 9(d)(i) below.
"INDEMNITOR" has the meaning set forth in Section 9(d)(i) below.
"INTELLECTUAL PROPERTY" has the meaning set forth in Section 4(l)(i)(F)
below.
"INTELLECTUAL PROPERTY ASSIGNMENTS" mean the forms of assignment attached
as EXHIBIT D hereto.
"INVENTORY" has the meaning set forth in Section 2(a)(ii) below.
"KNOWLEDGE" means actual knowledge, without independent investigation.
"LEASED REAL PROPERTY" means all leasehold or subleasehold estates and
other rights to use or occupy any land, buildings, structures, improvements,
fixtures or other interest in real property which is used in the Company's
business.
"LEASES" means all leases, subleases, licenses, concessions and other
agreements (written or oral), including all amendments, extensions, renewals,
guaranties and other agreements with respect thereto, pursuant to which the
Company holds any real or personal property.
"LETTER OF CREDIT" shall mean a letter of credit delivered by the Buyer
to an independent third party for the account of the Company at Closing to
secure the payment of any downward Purchase Price adjustment under Section 2(d)
below. The face amount of the Letter of Credit shall be equal to $1,500,000, as
may be adjusted pursuant to Section 2(e)(ii).
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"LOSSES" means losses, deficiencies, liabilities, damages, assessments,
judgments, costs and expenses, including attorneys' and expert's fees.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, operations, assets, properties, liabilities, or condition (financial
or otherwise) of the Business or (ii) the ability of Parent and/or the Company
to consummate the transactions contemplated hereby.
"MOST RECENT FINANCIAL STATEMENTS" has the meaning set forth in Section
4(f) below.
"MOST RECENT FISCAL QUARTER END" has the meaning set forth in Section
4(f) below.
"MULTIEMPLOYER PLAN" has the meaning set forth in ERISA Section 3(37).
"NET PURCHASED ASSETS" means the positive difference between the assets
and liabilities of the Company of the type set forth on Schedule II hereto
calculated in accordance with GAAP.
"NOTICE OF CLAIM" has the meaning set forth in Section 9(d)(i)(A)
below.
"OWNED REAL PROPERTY" means all land, together with all buildings,
structures, improvements and fixtures located thereon, and all easements and
other rights and interests appurtenant thereto, owned by the Company on the date
hereof and used in the Business, including those set forth on in Section 4(k)(i)
of the Disclosure Schedule.
"PARENT" has the meaning set forth in the preface above.
"PARENT INDEMNITEES" has the meaning set forth in Section 9(c) below.
"PARENT LOSSES" has the meaning set forth in Section 9(c) below.
"PARTY" has the meaning set forth in the preface above.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PERMITS" has the meaning set forth in Section 2(a)(v) below.
"PERMITTED ENCUMBRANCES" means with respect to each parcel of Owned
Real Property: (a) real estate taxes, assessments and other governmental levies,
fees or charges imposed with respect to such Owned Real Property which are not
due and payable as of the Closing Date or which are being contested in good
faith by appropriate proceedings which suspend the collection thereof and for
which appropriate reserves have been established in accordance with GAAP; (b)
mechanics liens and similar liens for labor, materials or supplies provided with
respect to such Owned Real Property incurred in the ordinary course of business
for amounts which are not delinquent and which could not reasonably be expected
to have a Material Adverse Effect or which are being contested in good faith by
appropriate proceedings or with respect to which arrangements for payment or
release have been made and for which appropriate reserves have been established
in accordance with GAAP; (c) zoning, building codes and other land use laws
regulating the use or occupancy of such Owned Real Property or the activities
conducted thereon which are imposed by any governmental authority having
jurisdiction over such Owned Real
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Property; (d) easements, covenants, conditions, restrictions and other similar
matters affecting title to such Owned Real Property of record and other title
defects, all of which do not or would not materially impair the use or occupancy
of such Owned Real Property in the operation of the Business; (e) Encumbrances
disclosed in title reports obtained by, the Buyer and affecting the Owned Real
Property; and (f) any Encumbrance existing as of the date hereof that is
satisfied, discharged, terminated or released by the relevant secured party on
or prior to the Closing Date.
"PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"PERSONAL PROPERTY" has the meaning set forth in Section 4(u)(i) below.
"PROPERTIES" has the meaning set forth in Section 4(p)(i) below.
"PURCHASE PRICE" has the meaning set forth in Section 2(d) below.
"REAL PROPERTY LEASES" means any Leases pursuant to which the Company
holds any Leased Real Property.
"RECEIVABLES" means all accounts and notes receivable of the Company,
and proceeds thereof.
"RELEASE" has the meaning set forth in Section 4(p)(v)(E) below.
"REVOLVING CREDIT FACILITY" means that certain Loan and Security
Agreement dated November 11, 1998 by and among the Company, as borrower, the
lenders party thereto, and Fleet Capital Corporation, as agent thereunder, as
amended.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"SUBSIDIARY" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"TAX" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Section
59A), customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not, and any obligation to
indemnify, assume or succeed to the liability of any other Person in respect of
the foregoing.
"TAX LIABILITY" means any liability (whether known or unknown, absolute
or contingent, liquidated or unliquidated, and whether due or to become due)
with respect to Taxes.
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"TAX RETURN" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"TRANSITION SERVICES AGREEMENT" means the Transition Services Agreement
substantially in the form of EXHIBIT E hereto.
"UNION" means Local Union 3944 of the United Steel Worker's of America
A.F.L.-C.I.O.
"UNION CONTRACT" means the Collective Bargaining Agreement between the
Company and the Union for the period July 15, 2001 through July 14, 2004,
including all supplements, memoranda, amendments and letters of understanding.
"WARN" means the "Worker Adjustment and Retraining Notification Act,"
29 U.S.C. Section 2102 et seq.
2. PURCHASE AND SALE.
(a) BASIC TRANSACTION. On and subject to the terms and conditions of
this Agreement, the Buyer agrees to purchase from the Company, and the Company
agrees to sell to the Buyer, good and marketable title to (insurable, at the
Buyer's option and expense, in the case of the Owned Real Property) all assets
(except the Excluded Assets) of the Company of every kind and type, tangible or
intangible, real and personal, as of the Closing Date free and clear of all
Encumbrances, which assets shall include, without limitation, the following
(collectively, the "ASSETS"):
(i) all tangible personal property, equipment, machinery, data
processing hardware and software, furniture, furnishings, appliances, vehicles,
leasehold improvements, telephone, facsimile and internet service numbers and
web addresses, and other tangible personal property of every description and
kind and all replacement parts therefore (collectively, the "EQUIPMENT AND
FURNISHINGS") including, without limitation, the items set forth in Section
4(u)(i) of the Disclosure Schedule;
(ii) all inventory of goods and supplies (collectively, the
"INVENTORY");
(iii) all Receivables;
(iv) all prepaid expenses and deposits;
(v) to the full extent transferable by law, all local, state and
federal licenses, permits, registrations, certificates, contracts, consents,
accreditations, approvals and other authorizations (collectively, the
"PERMITS"), together with assignments thereof, if required, and all waivers
which the Company currently has, if any, of any requirements pertaining to such
licenses, permits, registrations, certificates, consents, accreditations,
approvals and franchises;
(vi) all goodwill, customer files, customer contracts, advertising
listings and contracts, and, to the extent assignable by the Company, all
warranties (express or implied) and rights and claims;
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(vii) all rights under all insurance policies of the Company
(other than self insurance policies), including the insurance policies in the
name of the Company (but not the insurance policies in the name of Parent)
listed in Section 4(r) of the Disclosure Schedule, for any acts, omissions or
occurrences on or prior to the Closing Date;
(viii) all Contracts, other than the Excluded Contracts;
(ix) all studies, including marketing research studies; and
(x) all Intellectual Property (including goodwill associated
therewith).
(b) ASSUMED LIABILITIES. Subject to the terms and conditions set forth
in this Agreement, at the Closing the Buyer shall assume, and agree to pay,
perform, fulfill and discharge only the following obligations of the Company
and, in the case of the clause (iv) only, Parent, related to or arising out of
the Business or the Assets (collectively, the "ASSUMED LIABILITIES"):
(i) all accrued and unpaid trade accounts payable as set forth on
the Closing Date Balance Sheet (which shall be deemed to include all outstanding
but uncashed checks written on the bank accounts of the Company as of Closing;
PROVIDED that the aggregate amount of checks outstanding at Closing is
consistent with the past practices of the Company);
(ii) except to the extent limited by Section 2(b)(iv) below, all
warranty obligations and liabilities for products manufactured prior to Closing;
(iii) all obligations and liabilities for rebates and co-op
advertising expenses set forth on the Closing Date Balance Sheet;
(iv) all third party claims for product liability for (A) products
manufactured by the Company and (B) products of the type manufactured by the
Company that were manufactured by the Parent, in each case manufactured on or
prior to the Closing Date; PROVIDED that the Buyer does not assume any liability
or obligation (contingent or otherwise) with respect to the facts and
circumstances described in Section 2(b)(iv) of the Disclosure Schedule or with
respect to any third party claims for product liability that (x) the Company had
Knowledge of prior to Closing, (y) are not set forth on the Disclosure Schedule
as of Closing, and (z) involve damages of more than $100,000 per claim;
(v) all obligations for post-retirement benefits as described on
EXHIBIT F hereto;
(vi) all allowances for sales promotion expenses set forth on the
Closing Date Balance Sheet;
(vii) all allowances for freight expenses set forth on the Closing
Date Balance Sheet;
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(viii) subject to Section 2(g), all real estate taxes relating to
the Company's Owned Real Property in McDonough, Georgia described on Section
4(k)(i) of the Disclosure Schedule;
(ix) any liabilities or obligations for any Taxes of the Buyer
from and after the Closing Date;
(x) any liability to reimburse the Company for severance pay
pursuant to Section 6(f) below;
(xi) any liabilities or obligations relating to any employee to
whom the Buyer does not make an offer of employment pursuant to Section 6(f)
below to the extent arising from any claim of discrimination, wrongful
discharge, unfair labor practices or constructive termination attributable to
any actions or inactions by the Buyer in connection with its decision not to
hire such employee (PROVIDED that the Buyer shall assume no liability or
obligation for actions or inactions of Parent or the Company occurring prior to
the Closing Date);
(xii) all obligations and liabilities under all Leases, including
all Real Property Leases and all Capital Leases, and under all Contracts other
than Excluded Contracts; and
(xiii) all liabilities and obligations under the Dealer Network
Financing Programs;
(xiv) any liability under WARN for salary and benefits for actions
taken by the Buyer on or after the Closing Date, including, without limitation,
any actions, such as plant closings or additional employee terminations, that
subsequently make the transaction subject to WARN;
(xv) any liability under WARN for (A) salary and benefits for any
employee to whom Buyer makes an offer of employment pursuant to Section 6(f)
below, and (B) up to 30 days' salary (but not benefits) for any employee to whom
Buyer does not make an offer of employment pursuant to Section 6(f) below, in
each case, in the event that either the Company or the Buyer is deemed to have
liability under WARN as a result of the transactions contemplated by this
Agreement; PROVIDED that, except for the transactions contemplated by this
Agreement, within the period 90 days prior to the Closing Date, the Company has
not temporarily or permanently closed or shut down any single site of employment
or any facility or any operating unit, department or service within a single
site of employment, as such terms are used in WARN or terminated and/or laid off
more than 125 employees in the aggregate; and
(xvi) any liability for any purchase order entered into in the
ordinary course of business consistent with past practice, including, but not
limited to the purchase orders listed on Section 4(m)(iii) of the Disclosure
Schedule, which includes those purchase orders in excess of $100,000 for
inventory items and those purchase orders in excess of $50,000 for all other
items.
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(xvii) any liability of the Company, for premiums or otherwise,
arising after the Closing Date under any of the insurance policies of the
Company assumed by the Buyer pursuant to Section 2(a)(vii) above.
(c) EXCLUDED LIABILITIES. Notwithstanding anything in this Agreement to the
contrary, the Buyer shall not assume, and shall not be deemed to have assumed,
any liability or obligation of the Company, related to or arising out of the
following unassumed liabilities and obligations (collectively, the "EXCLUDED
LIABILITIES"):
(i) any amount owing by the Company under any Indebtedness
(including prepayment fees and other associated expenses);
(ii) except as otherwise provided in Section 2(b)(viii) above, any
liabilities or obligations of the Company for any Taxes;
(iii) any liabilities or obligations under any Employee Benefit
Plan, including any pension plan, compensation plan or group health insurance
plan, other than post-retirement benefits as provided in Section 2(b)(v) above;
(iv) any liabilities or obligations under any Excluded Contract;
(v) except as otherwise provided in this Agreement, all
liabilities or obligations of the Company for expenses (including fees and
disbursements of counsel, independent public accountants and investment bankers
for the Company) incurred by the Company in connection with the purchase
transaction described in this Agreement;
(vi) any liabilities or obligations relating to any real property
other than the Owned Real Property and the Leased Real Property;
(vii) any liabilities or obligations arising under any
Environmental Laws with respect to any condition in existence at Closing;
(viii) any intercompany obligations of the Company to Parent or
any Affiliates of the Company or Parent;
(ix) any third party claim for product liability arising out of
the facts and circumstances described in Section 2(b)(iv) of the Disclosure
Schedule or any other third party claims for product liability for products
manufactured by the Company (or products of the type manufactured by the Company
that were manufactured by the Parent) on or prior to the Closing Date that (x)
the Company had Knowledge of prior to Closing, (y) are not set forth on the
Disclosure Schedule as of Closing, and (z) involve damages of more than $100,000
per claim;
(x) any change of control payment owing to any employee of the
Company as a result of the transactions contemplated hereby under any Change of
Control Agreement; and
10
(xi) any and all other liabilities or obligations of the Company
or Parent of whatever nature, whether known or unknown, absolute or contingent
which is not expressly an Assumed Liability.
(d) PURCHASE PRICE. The purchase price payable to the Company by the
Buyer for the Assets and in consideration for the agreements contained herein
will be $73,300,000 (the "PURCHASE PRICE"), subject to adjustment as provided in
this Agreement.
(e) CERTAIN ADJUSTMENTS. The Purchase Price shall be adjusted as follows:
(i) At Closing, the Purchase Price shall be increased or
decreased, as the case may be, on a dollar for dollar basis by the amount by
which the Net Purchased Assets as set forth on the Estimated Closing Date
Balance Sheet, is greater or less than $76,150,000 (the "ADJUSTED PURCHASE
PRICE"). The Adjusted Purchase Price, less the face amount of the Letter of
Credit, shall be paid to the Company at Closing in cash by wire transfer.
(ii) As soon as practicable (but in any event at least 5 days
prior to Closing), Parent and the Company shall prepare and deliver to the Buyer
a calculation of the Net Purchased Assets of the Company as of September 30,
2002 (the "ESTIMATED CLOSING DATE BALANCE SHEET"). The Estimated Closing Date
Balance Sheet shall be prepared in accordance with GAAP and with principles
applied on a basis consistent with the accounting principles (including
recommended updates from KPMG LLP of such accounting principles) used in
preparing the Net Purchased Assets as of December 31, 2001 attached as SCHEDULE
III hereto (the "BID BALANCE SHEET") and the audited December 31, 2001 financial
statements. The Estimated Closing Balance Sheet shall be audited by KPMG LLP and
reviewed by Deloitte & Touche LLP. A representative of the Buyer and Parent
shall be present at the taking of the physical inventory conducted in connection
with the preparation of the Estimated Closing Balance Sheet. An example of the
calculation of the Adjusted Purchase Price based on the Company's August 2002
financial statements is included in SCHEDULE II to this Agreement. In the event
that the Buyer disputes the Estimated Balance Sheet, and the Company and the
Buyer are unable to agree upon the Estimated Closing Balance Sheet prior to the
Closing Date, any difference that would result in a downward purchase price
adjustment shall be subtracted from the Adjusted Purchase Price payable at
Closing and added to the face amount of the Letter of Credit and shall be
resolved as provided in Section 2(e)(iii) below; PROVIDED that, in no event,
shall the face amount of the Letter of Credit be increased pursuant to this
Section 2(e)(ii) by an amount in excess of $1,000,000.
(iii) As soon as practicable (but in no event sooner than 70 days
or later than 85 days) following the Closing Date, Parent and the Company shall
prepare and deliver to the Buyer a calculation of the Net Purchased Assets of
the Company as of the Closing Date (the "CLOSING DATE BALANCE SHEET"). The Buyer
agrees to provide Parent and the Company with all necessary access to the books,
records and former employees of the Company and an office at the main
administrative offices of the Company in McDonough, Georgia, for the purpose of,
and to cooperate with and provide reasonable assistance to Parent and the
Company in connection with, preparing the Closing Date Balance Sheet. The
Closing Date Balance Sheet shall be prepared in accordance with GAAP and with
principles applied on a basis consistent with the accounting principles
(including recommended updates from KPMG LLP of such accounting principles) used
in preparing the Net Purchased Assets for the Bid Balance Sheet and the
11
Estimated Closing Balance Sheet and shall be based on a "roll forward" of the
Estimated Closing Balance. The Buyer shall have a period of 15 days following
the delivery of the Closing Date Balance Sheet to object to the Closing Date
Balance Sheet, during which time the Buyer shall have the right to review the
work papers of Parent and the Company and talk to any employees involved in the
preparation of the Closing Date Balance Sheet. If no objection is made within
such 15-day period, the Closing Date Balance Sheet shall be final and binding on
all parties. If an objection is made that cannot be resolved by the parties
within ten business days, Price Waterhouse Coopers shall be retained to review
the Closing Date Balance Sheet and any dispute regarding the Estimated Balance
Sheet. Price Waterhouse Coopers shall be authorized to select the position of
either the Company or the Buyer (but no other position) which, in the view of
Price Waterhouse Coopers, is most closely based on GAAP and has been prepared
consistent with principles (including recommended updates from KPMG LLP of such
accounting principles) applied on a basis consistent with the accounting
principles used in calculating the Net Purchased Assets for the Bid Balance
Sheet. In addition, in the event that Price Waterhouse Coopers determines that
the Bid Balance Sheet was not prepared in accordance with GAAP, any purchase
price adjustment that would have resulted if such financial statements had been
prepared in accordance with GAAP shall be added to any purchase price adjustment
otherwise determined under this Section 2(e). The decision of Price Waterhouse
Coopers shall be final and binding upon the parties. In acting under this
Agreement, Price Waterhouse Coopers shall be entitled to the privileges and
immunities of arbitrators. The fees and expenses of Price Waterhouse Coopers
shall be borne equally by the Company and Parent, on the one hand, and the Buyer
on the other hand. To the extent any adjustment is made to the Estimated Balance
Sheet or Closing Balance Sheet as a result of updating of accounting principles,
the Bid Balance Sheet shall be adjusted to conform to such principles so that
the same principles are utilized for the Bid Balance Sheet, Estimated Balance
Sheet and Closing Balance Sheet. Notwithstanding anything contained in this
Agreement to the contrary, for purposes of the Estimated Balance Sheet and the
Closing Date Balance Sheet, the reserve for retiree medical expense shall be
$3,345,331. In addition, for purposes of the Bid Balance Sheet, the Estimated
Balance Sheet and the Closing Date Balance Sheet, the reserve for product
liability shall be at least equal to $5,100,000 (less, in the case of the
Closing Date Balance Sheet, the actual amount of settlements paid by the Company
between the date hereof and the Closing Date for any product liability case
previously reserved to the extent of such reserve for such case),
notwithstanding the fact that the Company's product liability reserve is
maintained on the books and records of Parent. To the extent that any prepaid
asset of the Company relating to services provided by Parent or any receivable
owing to the Company for Parent is terminated or forgiven as of the Closing,
such asset or receivable shall be recorded on the Closing Date Balance Sheet as
$0.00.
(iv) If the Net Purchased Assets of the Company reflected on the
Closing Date Balance Sheet is less than (or greater than) the Net Purchased
Assets as shown on the Estimated Closing Date Balance Sheet, the Purchase Price
shall be reduced (or increased) by the amount of such difference. To the extent
any amount is owing to the Company and such amount is equal to or less than the
face amount of the Letter of Credit, such amount shall be paid through a draw on
the Letter of Credit in the applicable amount. To the extent that the Letter of
Credit is insufficient to pay the amount owing to the Company, the Buyer shall
pay the requisite amount in cash by wire transfer within two business days after
completion of the process defined in Section 2(e)(iii) above. To the extent that
less than the entire face amount of the Letter of Credit is drawn to pay any
adjustment under this Section 2(e)(iv), such undrawn amount shall be
12
cancelled and the Purchase Price shall be deemed to have been decreased by such
undrawn, amount. To the extent that the amount owing to the Buyer by the Company
is greater than the face amount of the Letter of Credit, the Letter of Credit
shall be cancelled, and Parent and the Company shall remain jointly and
severally liable to the Buyer for the amount of such adjustment. If an amount is
due the Buyer, it shall be paid by a wire transfer within two business days
after completion of the process defined in Section 2(e)(iii) above.
(v) During the period beginning with the date of this Agreement
through and including the Closing Date, the Company shall not sell any
receivables to or through the Dealer Network Financing Facility Programs, except
in the ordinary course of business consistent with past practice.
(vi) At the Closing, the Company or Parent shall pay the Company's
and Parent's attorneys' fees; and all other costs and expenses incurred by the
Company and Parent in closing and consummating the purchase and sale of the
Assets pursuant to this Agreement. At Closing, the Buyer shall pay all transfer
taxes, documentary stamps and similar charges incident to the sale or conveyance
of the Owned Real Property; all sales taxes related to the sale of all other
Assets; and the cost of recording the Deeds. At the Closing, the Buyer shall
also pay the title insurance premiums, survey cost and expenses, costs of
environmental or engineering surveys; environmental insurance, the Buyer's
attorneys' fees, and all other costs and expenses incurred by the Buyer in
closing and consummating the purchase and sale of the Assets pursuant to this
Agreement. Subject to Section 2(g), to the extent that it is not reasonably
practicable to cause bills relating to utility charges or real property or other
ad valorem taxes or business occupancy taxes associated with the Assets to be
rendered by the appropriate utilities or governmental authorities as of the
Closing Date, such utility charges and taxes shall be apportioned as of the
Closing Date and reflected on the Closing Date Balance Sheet.
(f) ALLOCATION OF PURCHASE PRICE. The Company and the Buyer shall use
their best efforts to agree on an allocation of the Purchase Price among the
Assets promptly after Closing. Such allocation will be based on the example of
the allocation of the Purchase Price among the Assets based upon the Company's
August 2002 financial statements that is included in SCHEDULE II to this
Agreement. Such allocation will comply with the requirements of Section 1060 of
the Code. Unless otherwise required by a final determination within the meaning
of Section 1313 of the Code (or a counterpart provision of foreign, state or
local law), the Company and the Buyer agree to report the transactions hereunder
in accordance with such allocation, as so adjusted, for all federal, state,
local and other tax purposes (but such allocation shall not constrain reporting
for other purposes) and to execute and file a Form or Forms 8594 prepared by the
Company and reflecting such allocation, as so adjusted. The Company and Buyer
represent, warrant and agree that such allocation will be determined through
arm's length negotiations and, in no event, will the aggregate allocation to
intangible assets exceed $500,000. Each of the Company and the Buyer agrees
that, to the extent permitted by applicable law, it will adopt and utilize the
amounts allocated to each asset or class of assets for purposes of all Tax
Returns filed by it and that it will not voluntarily take any position
inconsistent therewith upon examination of any such Tax Returns, in any
litigation or otherwise with respect to such Tax Returns. Notwithstanding any
other provisions of this Agreement, the foregoing agreement shall survive the
Closing Date without limitation.
13
(g) REAL ESTATE TAXES. The Purchase Price shall be reduced for the pro
rata portion of any unpaid real estate Taxes (whether or not payable at such
time) for any period on or prior to the Closing Date.
(h) THE CLOSING. Subject to the terms hereof, the closing of the
transactions contemplated by this Agreement (the "CLOSING") shall take place at
the offices of Xxxxx Raysman Xxxxxxxxx Xxxxxx & Xxxxxxx LLP in
New York,
New
York or the offices of counsel for Fleet National Bank, commencing at 10:00 a.m.
local time on November 15, 2002 but in no event earlier than the date that is
three business days after the satisfaction or waiver of the conditions set forth
in Section 8 or such other date and place as the Buyer and the Company may
mutually determine (the "CLOSING DATE").
(i) DELIVERIES AT THE CLOSING. At the Closing, (i) the Company and Parent
will deliver to the Buyer the various certificates, instruments, and documents
referred to in Section 8(b) below, (ii) the Buyer will deliver to the Company
the various certificates, instruments, and documents referred to in Section 8(a)
below, and (iii) the Buyer will deliver to the Company the Adjusted Purchase
Price and the Letter of Credit, as specified in Sections 2(d) and (e) above.
3. REPRESENTATIONS AND WARRANTIES OF PARENT. Parent represents and
warrants to the Buyer that the statements contained in this Section 3 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section 3
with respect to itself), except as set forth in the Disclosure Schedule.
(a) ORGANIZATION OF PARENT. Parent is duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its incorporation.
(b) AUTHORIZATION OF TRANSACTION. Parent has full corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid and legally binding obligation
of Parent, enforceable in accordance with its terms and conditions, except as
the enforceability thereof may be limited by any applicable bankruptcy,
reorganization, insolvency or other laws affecting creditors' rights generally
or by general principles of equity. Except for the notices and consents
described in Section 6(b) below, Parent need not give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any Person
(including the shareholders of Parent) or any government or governmental agency
in order to consummate the transactions contemplated by this Agreement.
(c) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(A) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Parent is subject, or any provision of
its charter or bylaws or (B) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
Parent is a party or by which it is bound or to which any of its assets is
subject.
14
(d) BROKERS' FEES. Except as set forth in Section 3(d) of the Disclosure
Schedule, Parent has no liability or obligation to pay any fees or commissions
to any broker, finder, or agent with respect to the transactions contemplated by
this Agreement for which the Buyer could become liable or obligated.
4. REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY. The Company
represents and warrants to the Buyer, and, only to the extent expressly set
forth below, Parent and the Company severally represent to the Buyer, that the
statements contained in this Section 4 are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date of
this Agreement throughout this Section 4), except as set forth in the Disclosure
Schedule.
(a) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. The Company is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Georgia. The Company is duly authorized to conduct business
and is in good standing under the laws of each State where such qualification is
required, except where the lack of such qualification would not have a Material
Adverse Effect. The Company has full corporate power and authority to carry on
the businesses in which it is engaged and to own and use the properties owned
and used by it. Section 4(a) of the Disclosure Schedule lists the directors and
officers of the Company and each State in which the Company is duly authorized
to conduct business. This Agreement constitutes the valid and legally binding
obligation of the Company, enforceable in accordance with its terms and
conditions, except as the enforceability thereof may be limited by any
applicable bankruptcy, reorganization, insolvency or other laws affecting
creditors' rights generally or by general principles of equity.
(b) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Company is subject or any provision
of the charter or bylaws of the Company or (ii) except as set forth in Section
4(b) of the Disclosure Schedule, conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice or
consent under any Contract to which the Company is a party or by which it is
bound or to which any of its assets is subject (or result in the imposition of
any Encumbrances upon any of its assets), except where the violation, conflict,
breach, default, acceleration, termination, modification, cancellation, failure
to give notice or obtain consent, or the Encumbrance could not reasonably be
expected to have a Material Adverse Effect; provided that in no event shall the
failure of Parent or the Company to have obtained any consent from any third
party under any Contract or Permit constitute a breach of any of the
representations, warranties, covenants or agreements made by Parent or the
Company in this Agreement. To the Knowledge of the Company and except for the
notices and consents described in Section 6(b) below, the Company is not
required to give notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order for the
Parties to consummate the transactions contemplated by this Agreement, except
where the failure to give notice, to file, or to obtain any authorization,
consent, or approval could not reasonably be expected to have a Material Adverse
Effect.
15
(c) BROKER'S FEES. The Company does not have any liability or obligation
to pay any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement.
(d) TITLE TO ASSETS. Except as otherwise set forth in Section 4(d) of the
Disclosure Schedule, the Company has good and marketable title to, or a valid
leasehold interest in, the Assets used by the Company in the operation of the
Business.
(e) SUBSIDIARIES. The Company does not have any Subsidiaries and is not a
general partner in any partnership or a co-venturer in any joint venture or
other business enterprise.
(f) FINANCIAL STATEMENTS. Parent and the Company severally represent and
warrant as follows: attached hereto as EXHIBIT G are the following financial
statements (collectively the "FINANCIAL STATEMENTS"): (i) audited balance sheets
and statements of income, changes in stockholders' equity, and cash flow as of
and for the fiscal years ended December 31, 1999, December 31, 2000 and December
31, 2001 for the Company; (ii) unaudited balance sheets and statements of income
and cash flow (the "MOST RECENT FINANCIAL Statements") as of and for the fiscal
quarter ended June 30, 2002 (the "MOST RECENT FISCAL QUARTER END") for the
Company, and (iii) unaudited balance sheets and statements of income and cash
flow for the month ended August 31, 2002. The Financial Statements (including
the notes thereto) have been prepared in accordance with GAAP applied on a
consistent basis (except as may be indicated therein or in the notes or
schedules thereto) throughout the periods covered thereby and present fairly the
financial condition of the Company as of such dates and the results of
operations of the Company for such periods; PROVIDED that the Most Recent
Financial Statements are subject to normal year-end adjustments and lack
footnotes and other presentation items. Except as set forth on the Most Recent
Financial Statements or set forth in Section 4(f) of the Disclosure Schedule,
the Company does not have any liabilities or obligations of the type required to
be disclosed in accordance with GAAP.
(g) NO MATERIAL CHANGE. Except as set forth in Section 4(g) of the
Disclosure Schedule, since the Most Recent Fiscal Quarter End, there has been no
material adverse change in the financial condition, assets, liabilities, results
of operations, or business of the Company.
(h) ABSENCE OF CHANGE OR EVENT. Except as set forth in Section 4(h) of
the Disclosure Schedule, since the Most Recent Fiscal Quarter End to and
including the date hereof, the Company has conducted its business only in the
ordinary course and has not:
(i) incurred any obligation or liability, absolute, accrued,
contingent or otherwise, whether due or to become due, in excess of $100,000 in
the aggregate, except liabilities or obligations incurred in the ordinary course
of business and consistent with prior practice;
(ii) except in the ordinary course of business consistent with
past practice, entered into any new Contract obligating the Company to purchase
goods or services for a period of 90 days or more;
(iii) permitted any Encumbrance to be placed on any Asset;
16
(iv) sold, transferred, licensed, leased to others or otherwise
disposed of any of the Assets including the payment of any loans owed to any
affiliate, except for inventory sold to customers or returned to vendors and
payments to any non-Affiliates on account of accounts payable or scheduled
payments in respect of indebtedness for money borrowed disclosed in the Most
Recent Financial Statements, in each case in the ordinary course of business and
consistent with prior practice, or canceled, waived, released or otherwise
compromised any debt or claim, or any right of significant value;
(v) suffered any damage, destruction or loss (whether or not
covered by insurance) having an individual value in excess of $50,000;
(vi) made or committed to make any capital expenditures or capital
additions or betterments in excess of an aggregate of $100,000;
(vii) encountered any labor union organizing activity or had any
actual or threatened employee strikes, work stoppages, slow-downs or lock-outs;
(viii) instituted any litigation, action or proceeding before any
court, governmental body or arbitration tribunal relating to it or its property,
except for litigation, actions or proceedings instituted in the ordinary course
of business and consistent with prior practice;
(ix) declared or paid any dividend or made any other payment or
distribution in respect of its capital stock, or directly or indirectly
redeemed, purchased or otherwise acquired any of its capital stock, or issued or
sold, or agreed to issue or sale, any equity securities of the Company or
securities convertible into or exchangeable for equity securities of the
Company, or any other rights to acquire equity securities of the Company;
(x) established or adopted any new employee benefit plan or
granted any increase in the compensation payable or benefits to any officer,
director, employee (or a class thereof) or agent, or instituted any bonus,
pension, profit sharing, change in control, deferred compensation, savings,
insurance, retirement or other employee benefit plan;
(xi) increased promotional or advertising expenditures except in
the ordinary course of business consistent with prior practice or otherwise
changed its policies or practices with respect thereto; (xii) made or changed
any election concerning Taxes or Tax Returns, changed any annual accounting
period, adopted or changed any Tax or accounting method or practice, filed any
amended return, entered into any closing agreement with respect to Taxes,
settled any Tax claim or assessment, surrendered any right to claim a refund of
Taxes or obtained or entered into any Tax ruling, agreement, contract,
understanding, arrangement or plan;
(xiii) written off as uncollectible, or established any
extraordinary reserve with respect to, any Receivables;
(xiv) amended or terminated any of the Contracts;
17
(xv) knowingly operated the business of the Company in material
violation of any Environmental Law;
(xvi) merged, consolidated or combined with any other entity, or
agreed to do so;
(xvii) incurred any Indebtedness except in the ordinary course of
business consistent with prior practice;
(xviii) entered into any agreement, arrangement, transaction or
understanding with Parent or any Affiliate of Parent except in the ordinary
course of business consistent with prior practice; and
(xix) made any commitment with respect to any of the foregoing.
(i) LEGAL COMPLIANCE. The Company has complied with all applicable laws
(including rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of federal, state, local, and foreign
governments (and all agencies thereof), except where the failure to comply could
not reasonably be expected to have a Material Adverse Effect. The Company has
all Permits necessary for the Company to occupy, operate and conduct the
Business, except where the failure to have any such Permit could not reasonably
be expected to have a Material Adverse Effect.
(j) TAX MATTERS. Parent and the Company severally represent and warrant
that, except as set forth in Section 4(j) of the Disclosure Schedule:
(i) The Company has filed, or will prepare and timely file, all
Tax Returns that it was required to file for all periods prior to and including
the Closing Date, and such Tax Returns were correct and complete in all material
respects.. The Company has paid or adequately reserved for all Taxes owed by the
Company (whether or not shown on any Tax Return). The Company has withheld or
collected all Taxes which the Company was required to withhold or collect and
has paid all such monies over to the appropriate government authority or has
properly recorded such unpaid amounts as a liability on the Company's books. The
reserves for Taxes reflected in the Most Recent Financial Statements are
adequate to cover all Tax Liabilities accrued as of the date hereof.
(ii) Section 4(j) of the Disclosure Schedule sets forth all Tax
Returns filed with respect to the Company for taxable periods ended on or after
December 31, 2001, indicates those Tax Returns that have been audited, and
indicates those Tax Returns that currently are the subject of audit. The Company
has delivered to the Buyer correct and complete copies of all federal Tax
Returns, examination reports, and statements of deficiencies assessed against or
agreed to by the Company since December 31, 2001. There is no pending Tax
examination or audit of, nor any action, suit, investigation or claim asserted
or, to the Knowledge of the Company or Parent, threatened in writing against the
Company by any federal, state or local authority.
(iii) The Company has not waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
18
(iv) The Company is not a party to any Tax allocation or sharing
agreement.
(v) No Tax liens or other Encumbrances have attached to any of the
Company's assets because of a deficiency or delinquency in payment of Taxes by
the Company.
(k) REAL PROPERTY.
(i) Section 4(k) of the Disclosure Schedule sets forth the address
and description of each parcel of Owned Real Property. With respect to each
parcel of Owned Real Property:
(A) except as set forth in Section 4(k) of the Disclosure
Schedule, the Company has good and marketable fee simple title, free and clear
of all Encumbrances, except Permitted Encumbrances;
(B) except as set forth in Section 4(k) of the Disclosure
Schedule, the Company has not leased or otherwise granted to any Person the
right to use or occupy such Owned Real Property or any portion thereof;
(C) there are no outstanding options, rights of first offer
or rights of first refusal to purchase such Owned Real Property or any portion
thereof or interest therein;
(D) the Company has good and valid rights of ingress and
egress to and from all of the Owned Real Property from and to the public street
systems for all usual street, road and utility purposes;
(E) to the Knowledge of the Company, the Owned Real
Property is currently zoned in the zoning category which permits operation of
such properties as now used, operated and maintained for the operation of the
Business; and the consummation of the transactions contemplated herein will not
result in a violation of any applicable zoning ordinance or the termination of
any applicable zoning variance now existing; the Company has not received any
notice of any appropriation, condemnation or like proceeding, or of any
violation of any applicable zoning law, regulation or other law, order,
regulation, requirement or Permit relating to or affecting the Owned Real
Property or any part thereof, and, to the Knowledge of the Company, no such
proceeding has been threatened or commenced; and
(F) except as set forth in Section 4(k) of the Disclosure
Schedule, all of the buildings, structures, improvements and fixtures in or on
the Owned Real Property are in a good state of repair, maintenance and operating
condition and, except as so disclosed and except for normal wear and tear, to
the Knowledge of the Company, there are no defects with respect thereto which
would impair the day-to-day use of any such buildings, structures, improvements
or fixtures.
(ii) Section 4(k) of the Disclosure Schedule sets forth the
address of each parcel of Leased Real Property, and a true and complete list of
all Leases for each such parcel of Leased Real Property. With respect to each
parcel of Leased Real Property:
19
(A) the Company is in peaceful and undisturbed possession
of the space and/or estate comprising each parcel of Leased Real Property and
there are no defaults by the Company or, to the Knowledge of the Company, any
other party under any Lease. No event has occurred and no condition exists
which, with the giving of notice or the lapse of time or both, would constitute
such a default or termination event or condition.
(B) each Lease relating to the Leased Real Property is
valid and binding in all material respects upon the Company (except as the
enforceability thereof may be limited by any applicable bankruptcy,
reorganization, insolvency or other laws affecting creditors' rights generally
or by general principles of equity) and is in full force and effect, and all
rent and other sums and charges payable by the Company, as tenant thereunder,
are current;
(C) the Company has a good and valid leasehold interest in
each Leased Real Property, free and clear of all Encumbrances other than
Permitted Encumbrances;
(D) the Company has delivered to the Buyer a true and
complete copy of each Lease;
(E) the Company has good and valid rights of ingress and
egress to and from all of the Leased Real Property from and to the public street
systems for all usual street, road and utility purposes;
(F) to the Knowledge of the Company, the Leased Real
Property is currently zoned in the zoning category which permits operation of
such properties as now used, operated and maintained for the operation of the
Business; the consummation of the transactions contemplated herein will not
result in a violation of any applicable zoning ordinance or the termination of
any applicable zoning variance now existing; and, except as disclosed on Section
4(k) of the Disclosure Schedule, the Company has not received any notice of any
appropriation, condemnation or like proceeding, or of any violation of any
applicable zoning law, regulation or other law, order, regulation or requirement
relating to or affecting the Leased Real Property or any part thereof, and, to
the Knowledge of the Company, no such proceeding has been threatened or
commenced; and
(G) except as set forth in Section 4(k) of the Disclosure
Schedule, all of the buildings, structures, improvements and fixtures in or on
the Leased Real Property are in a good state of repair, maintenance and
operating condition and, except as so disclosed and except for normal wear and
tear, there are no defects with respect thereto which would impair the
day-to-day use of any such buildings, structures, improvements or fixtures.
(l) INTELLECTUAL PROPERTY.
(i) Section 4(l) of the Disclosure Schedule sets forth:
(A) all patents held by the Company or used by the Company
in the conduct of the Business, and all reissues, divisions, continuations,
continuations in part, extensions and renewals thereof and all patent
applications by the Company, including for each such patent the serial or patent
number, country, filing and expiration date and title;
20
(B) all trademarks, service marks, trademark registrations,
service xxxx registrations, applications for trademark registrations,
applications for service xxxx registrations, trade names, brand names, product
names and common law marks, and the renewals thereof, of, or used by the Company
in the conduct of, the Business, including for each such trademark or service
xxxx the registration number, country, registration, renewal and expiration
dates, xxxx and class;
(C) all copyrights, and the renewals thereof, of, or used
by the Company in the conduct of, the Business and applications by the Company
for copyrights, and the renewals thereof, including the registration number,
country and filing and expiration date of each such copyright;
(D) all trade names and common law marks of, or used by the
Company in the conduct of, the Business, including a statement of and evidence
supporting the date of first use and length of use of such names and marks and
the jurisdictions of such use;
(E) all trademark licenses, service xxxx licenses,
copyright licenses, royalty agreements, patent licenses, assignments, grants and
contracts with employees or others relating in whole or in part to disclosure,
assignment, registering or patenting of any trademarks, service marks,
copyrights, inventions, discoveries, improvements, processes, formulae, trade
secrets or other know-how of, or used by the Company in the conduct of, the
Business; and
(F) to the extent that any of the following have been
reduced to writing, all other trade secrets, formulae, proprietary processes and
inventions for which no patent applications are pending and all other industrial
property rights presently owned, in whole or in part, or used by, the Company
(collectively, "INTELLECTUAL PROPERTY").
(ii) Section 4(l) of the Disclosure Schedule also sets forth:
(A) any written communications from the Company to third
parties, or from third parties to the Company alleging infringement by third
parties, of any of the Intellectual Property or alleging related acts of unfair
competition or activities or actions of any anti-competitive nature together
with all responses to such communications and a description of the status of
each such alleged infringement;
(B) a complete list of any product sold by any Person other
than the Company, which in the opinion of the Company infringes upon any
Intellectual Property listed in Section 4(l) of the Disclosure Schedule; and
(C) a list of countries as to which the Company believes
the Company may have unregistered trademarks.
(iii) Except as disclosed in Section 4(l) of the Disclosure
Schedule:
(A) the Company owns the Intellectual Property (including
without limitation exclusive rights to use and license the same) free and clear
of any Encumbrances;
21
(B) the Company has not granted and is not obligated to
grant any other party rights (including without limitation licenses) with
respect to the Intellectual Property;
(C) the patents, trademarks, service marks and copyrights
included in the Intellectual Property are valid;
(D) the trademark registrations, service xxxx
registrations, copyright registrations and patents included in the Intellectual
Property, except as set forth in Section 4(l) of the Disclosure Schedule, have
been duly issued and have not been canceled, abandoned or otherwise terminated;
(E) except as set forth in Section 4(l) of the Disclosure
Schedule and to the Knowledge of the Company, the trademark applications,
service xxxx applications, copyright applications and patent applications
included in the Intellectual Property have been duly filed;
(F) all licenses, assignments, grants, agreements and
contracts included in the Intellectual Property were entered into in the
ordinary course of business, are valid and binding in accordance with their
terms (except as the enforceability thereof may be limited by any applicable
bankruptcy, reorganization, insolvency or other laws affecting creditors' rights
generally or by general principles of equity) and are in full force and effect;
(G) the Company is not in default under any of the
foregoing licenses, assignments, grants, agreements and contracts, and, to the
Knowledge of the Company, no other party is in default thereunder;
(H) to the Knowledge of the Company, the Company is not
obligated to disclose any of the Intellectual Property to any other party;
(I) the Intellectual Property is valid and there are and
have been no proceedings, actions or claims and no proceedings, actions or
claims are pending or, to the Knowledge of the Company, threatened impugning the
title, validity or enforceability of any of the Intellectual Property;
(J) to the Knowledge of the Company, none of the processes
currently used by the Company or any of the properties or products currently
sold by the Company or any Intellectual Property held by or used by the Company
infringes the patent, industrial property, trademark, trade name, label, other
xxxx, right or copyright or any other similar right of any other Person or
entity;
(K) the Company has not received any notice of adverse
claim or threat of adverse claim by any third party with respect thereto and, to
the Knowledge of the Company, no basis exists for any such claim, and, to the
Knowledge of the Company, no act has been done or has been omitted to be done by
the Company to entitle any person to make such claim or to cancel, forfeit or
modify any Intellectual Property;
22
(L) the Company does not require a license or right under
or in respect of any intellectual property of any other Person to conduct the
Business as presently conducted and no substantial part of such Business is
carried on under the agreement or consent of any other Person nor is there any
agreement to which the Company is a party which significantly restricts the
fields in which such business may be carried on;
(M) to the Knowledge of the Company, no disclosure has been
made to any Person of the know-how or financial or trade secrets of the Company,
except properly and in the ordinary course of business and on condition that
such disclosure is to be treated as being of a confidential nature; and
(N) to the Knowledge of the Company, none of the
Intellectual Property is being infringed by any other party.
(m) CONTRACTS.
(i) Section 4(m)(i) of the Disclosure Schedule lists all Contracts
to which the Company is a party or to which its assets are subject (excluding
customary inventory purchase orders in the ordinary course of business) that:
(A) involve aggregate consideration in excess of $100,000;
(B) will require the Company to purchase or provide goods
or services for a period of more than 90 days after the Closing Date;
(C) evidence or provide for any indebtedness for borrowed
money for which the Company or the Buyer will be liable following the Closing or
any Encumbrance on any of the Assets;
(D) guarantees the performance, liabilities or obligations
of any other entity, which restrict in any material respect the ability of the
Company to conduct any business activities, which involve any related party,
including any Affiliate of the Company or Parent;
(E) provides for non-competition agreements;
(F) relates to the hiring or leasing of employees, which
are not in the ordinary course of business; or
(G) are subject to termination or modification by any third
party as a result of the transactions contemplated by this Agreement.
(ii) Section 4(m)(ii) of the Disclosure Schedule lists all leases
of the Company that are treated as capital leases on the books and records of
the Company as of September 30, 2002.
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(iii) Section 4(m)(iii) of the Disclosure Schedule lists, as of
October 4, 2002, all inventory purchase orders for goods or products in excess
of $100,000 and all other purchase orders for other goods or products in excess
of $50,000.
(iv) The Company has made available to the Buyer a correct and
complete copy of each Contract. The Company is not in material breach of any
Contract, nor, to the Company's Knowledge, is any third party in material breach
of any Contract.
(n) LITIGATION. The Company and Parent severally represent and warrant
that: except as set forth in Section 4(n) of the Disclosure Schedule, neither
the Company nor Parent has received written notice of any violation of law,
rule, regulation, ordinance or order of any court or federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality. Except as set forth in Section 4(n) of the Disclosure Schedule
and to the Knowledge of Parent, neither the Company nor any of its Assets is (i)
subject to any outstanding injunction, judgment, arbitration, order, decree,
ruling, or charge or (ii) a party to or subject to any action, suit, proceeding,
hearing, or investigation of, in, or before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign government, and,
to the Knowledge of the Company, no such action, suit, proceeding, hearing or
investigation is threatened.
(o) EMPLOYEE MATTERS.
(i) Section 4(o) of the Disclosure Schedule sets forth: (A) a
complete list of all of the employees of the Business, together with their rates
of pay and a categorization of each such person as a full-time or part-time
employee of the Company, and (B) a list of each person who has an employment
agreement or Change of Control Agreement with the Company. For purposes of this
Section 4(o), "PART-TIME EMPLOYEE" means an employee who is employed for an
average of fewer than 20 hours per week or who has been employed for fewer than
six of the 12 months preceding the date on which notice is required pursuant to
WARN.
(ii) Section 4(o) of the Disclosure Schedule lists each Employee
Benefit Plan that the Company maintains or to which the Company contributes.
(A) to the Knowledge of the Company, each such Employee
Benefit Plan (and each related trust, insurance contract, or fund) has been
maintained, funded and administered in accordance with the terms of such
Employee Benefit Plan and complies in form and in operation in all respects with
the applicable requirements of ERISA and the Code, except where the failure to
comply could not reasonably be expected to have a Material Adverse Effect.
(B) all contributions (including all employer contributions
and employee salary reduction contributions) which are due have been made to
each such Employee Benefit Plan which is an Employee Pension Benefit Plan. All
premiums or other payments which are due have been paid with respect to each
such Employee Benefit Plan which is an Employee Welfare Benefit Plan.
(C) each such Employee Benefit Plan which is intended to
meet the requirements of a "qualified plan" under Code Section 401(a) has
received a determination
24
letter from the Internal Revenue Service to the effect that it meets the
requirements of Code Section 401(a) and the Company has no Knowledge of any
circumstances which could reasonably be expected to result in the revocation of
any such determination letter.
(D) except as disclosed in Section 4(o) of the Disclosure
Schedule, as of the last day of the most recent prior plan year, the market
value of assets under each such Employee Benefit Plan which is an Employee
Pension Benefit Plan (other than any Multiemployer Plan) and which is subject to
the minimum funding requirements of Section 302 of ERISA or Section 412 of the
Code, equaled or exceeded the present value of liabilities thereunder
(determined in accordance with then current funding assumptions).
(E) to the Knowledge of the Company, no action, suit,
proceeding, hearing, or investigation with respect to the administration or the
investment of the assets of any such Employee Benefit Plan (other than routine
claims for benefits) is pending, except where the action, suit, proceeding,
hearing, or investigation could not reasonably be expected to have a Material
Adverse Effect.
(iii) Except as set forth in Section 4(o) of the Disclosure
Schedule, each of the following is true:
(A) the Company is in compliance with all applicable laws
and collective bargaining agreements respecting employment and employment
practices, terms and conditions of employment and wages and hours and
occupational safety and health, and is not engaged in any unfair labor practice
within the meaning of Section 8 of the National Labor Relations Act in all
cases, except where the failure to comply could not reasonably be expected to
have a Material Adverse Effect and, there is no action, suit or legal,
administrative, arbitration, grievance or other proceeding pending or, to the
Knowledge of the Company, threatened in writing, or any investigation pending or
threatened against the Company relating to any thereof, and to the Knowledge of
the Company, no basis exists for any such action, suit or legal, administrative,
arbitration, grievance or other proceeding or governmental investigation;
(B) there is no labor strike, dispute, slowdown or stoppage
actually pending or, to the Knowledge of the Company, threatened against the
Company;
(C) other than pursuant to the Union Contract, none of the
employees of the Company (in his or her capacity as an employee of the Company)
is represented by, any labor union and, to the Knowledge of the Company, there
are no attempts of whatever kind and nature being made to organize any of such
employees;
(D) without limiting the generality of paragraph (C) above,
to the Knowledge of the Company, no certification or decertification is pending
or was filed within the past twelve (12) months respecting the employees of the
Company, and no certification or decertification petition is being or was
circulated among the employees of the Company within the past twelve (12)
months;
(E) no agreement (including any collective bargaining
agreement), arbitration or court decision, decree or order or governmental order
which is binding
25
on the Company in any way limits or restricts the Company from relocating or
closing any of its operations;
(F) the Company has not experienced any organized work
stoppage in the last five (5) years; and
(G) there are no charges, administrative proceedings or
formal complaints of discrimination (including without limitation discrimination
based upon sex, age, marital status, race, national origin, sexual preference,
handicap or veteran status) pending or, to the Knowledge of the Company,
threatened, or any investigation pending or, to the Knowledge of the Company,
threatened before the Equal Employment Opportunity Commission or any federal,
state or local agency or court. There have been no audits of the equal
employment opportunity practices of the Company, and no basis for any such claim
exists.
(iv) Except for the transactions contemplated by this Agreement,
within the period 90 days prior to the Closing Date, the Company has not
temporarily or permanently closed or shut down any single site of employment or
any facility or any operating unit, department or service within a single site
of employment, as such terms are used in WARN. During such period, the Company
has not terminated or laid off more than 125 employees in the aggregate.
(v) Section 4(o)(iii)(v) of the Disclosure Schedule sets forth the
severance amount that would be owing to each employee of the Company under the
severance pay policy attached hereto as EXHIBIT K if (i) such employee's
employment with the Company was terminated on October 31, 2002 and (ii) such
employee was not offered continuous employment with the Buyer.
(p) ENVIRONMENTAL MATTERS.
(i) Except as disclosed in Section 4(p) of the Disclosure
Schedule, there have been no Releases of Hazardous Substances, Oils, Pollutants
or Contaminants from each location currently owned, operated or leased by the
Company (the "PROPERTIES") during the past five (5) years which have required
reporting to federal, state or local government agencies under applicable law.
(ii) Except as disclosed in Section 4(p) of the Disclosure
Schedule, there have been no prosecutions or claims for contravention of any
Environmental Law asserted against the Company during the past five (5) years.
(iii) Except as disclosed in Section 4(p) of the Disclosure
Schedule, there have been no claims made against the Company for Cleanup or for
Environmental Liabilities and Costs resulting from the Release of Hazardous
Substances, Oils, Pollutants or Contaminants from the Properties during the past
five (5) years.
(iv) Except as disclosed in Section 4(p) of the Disclosure
Schedule, and to the Knowledge of the Company, there are no conditions that are
likely to result in the Company incurring Environmental Liabilities or Costs or
Cleanup as a result of the Release of Hazardous Substances, Oils, Pollutants or
Contaminants on the Properties; provided, however, to
26
the extent that AIG Insurance issues an endorsement under the insurance policy
contemplated by Section 8(a)(vi) limiting the persons included within the
meaning of "known by a Responsible Insured" for purposes of Exclusion 1.I
("Prior Knowledge/Non-Disclosure"), the representation contained in this Section
4(p)(iv) shall be limited to the Knowledge of such persons set forth in such
endorsement.
(v) The following terms shall be defined below:
(A) "CLEANUP" means all actions required to: (A) cleanup,
remove, treat or remediate Hazardous Substances, Oils, Pollutants or
Contaminants, or any other substance regulated by any Environmental Law in the
natural environment; or (B) perform post-remedial monitoring and care.
(B) "ENVIRONMENTAL LAWS" means all materially applicable
foreign, federal, and state laws, regulations, statutes, codes, rules relating
to pollution or protection of the environment, or to health and safety,
including without limitation laws relating to occupational safety, asbestos,
lead-based paint, petroleum products, Releases or threatened Releases of
Hazardous Substances, Oils, Pollutants or Contaminants into the environment
(including without limitation ambient air, surface water, groundwater, land,
surface and subsurface strata) or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, Release, transport, clean up,
or handling of Hazardous Substances, Oils, Pollutants or Contaminants, and all
laws and regulations with regard to record keeping, monitoring, sampling,
notification, training, disclosure and reporting requirements respecting
Hazardous Substances, Oils, Pollutants or Contaminants.
(C) "ENVIRONMENTAL LIABILITIES AND COSTS" means all
liabilities, obligations, responsibilities, obligations to conduct Cleanup, or
to pay for losses, damages, punitive damages, treble damages, and costs
(including without limitation all costs of investigations and feasibility
studies and responding to government requests for information or documents),
resulting from any claim or demand, by any Person, based on Environmental Laws,
as a result of past or present operation of any properties owned, leased or
operated by the Company, including without limitation any of the foregoing
incurred in connection with the conduct of any Cleanup.
(D) "HAZARDOUS SUBSTANCES, OILS, POLLUTANTS OR
CONTAMINANTS" means all chemical substances, petroleum products, pollutants or
contaminants defined as such in the National Oil and Hazardous Substances
Pollution Contingency Plan, 40 C.F.R. 300.5, or defined as such by, or regulated
as such under, any Environmental Law.
(E) "RELEASE" means, when used as a noun and except as
permitted or otherwise allowed in material compliance with Environmental Laws,
any material release, spill, emission, discharge, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the natural
environment (including without limitation ambient air, surface water,
groundwater, and surface or subsurface strata), including the movement of
Hazardous Substances, Oils, Pollutants or Contaminants through or in the air,
soil, surface water, groundwater or property; and, when used as a verb, the
occurrence of any Release.
27
(q) CERTAIN BUSINESS RELATIONSHIPS WITH THE COMPANY. Parent and the
Company severally represent and warrant that, except as set forth on Section
4(q) of the Disclosure Schedule, none of Parent or any of its Affiliates has
been involved in any material business arrangement or relationship with the
Company within the past 12 months and none of Parent or any of its Affiliates
owns any material asset, tangible or intangible, which is used in the business
of the Company.
(r) INSURANCE. Parent and the Company severally represent and warrant as
follows: Section 4(r) of the Disclosure Schedule sets forth: (i) the policies of
insurance presently in force covering the business of the Company and, without
restricting the generality of the foregoing, those covering public and product
liability, personnel, properties, buildings, machinery, equipment, furniture,
fixtures and operations, specifying with respect to each such policy the name of
the insurer, type of coverage, term of policy, limits of liability and annual
premium; (ii) the Company's premiums and losses in excess of $500,000.00 by year
and by type of coverage for the past five (5) years based on information
received from the Company's insurance carrier(s); (iii) all outstanding
insurance claims in excess of $500,000.00 in the aggregate by the Company for
damage to or loss of property or income which have been referred to insurers or
which the Company believes to be covered by commercial insurance; (iv) general
comprehensive liability policies (including any self-insurance policies provided
by the Company or Parent) carried by the Company for the past five (5) years,
including excess liability policies; and (v) any agreements, arrangements or
commitments by or relating to the business of the Company under which the
Company is required to carry insurance for the benefit of any other Person. The
Company has heretofore delivered to the Buyer complete and correct copies of the
policies and agreements set forth in Section 4(r) of the Disclosure Schedule.
Neither Parent nor the Company has received any notice that any insurance
company does not intend to renew any insurance policy with the Company.
(s) RECEIVABLES. The Receivables appearing on the balance sheet included
in the Most Recent Financial Statements and all Receivables created since that
date through the Closing Date represent and will represent valid obligations
owing to the Company and, except as set forth in Section 4(s) of the Disclosure
Schedule, are fully collectible by the Company, subject to the reserve for
doubtful accounts appearing on such balance sheet, and arose from transactions
in the ordinary course of business. All orders that have been shipped as of the
date hereof have been, to the Knowledge of the Company, accepted by the
recipient, and such orders are not subject to valid return (except for products
returned in the ordinary course consistent with the Company's past practice).
(t) INVENTORY. Except as set forth in Section 4(t) of the Disclosure
Schedule, the inventories of raw materials, in-process and finished products of
the Company are in good condition, conform in all respects with the applicable
specifications and warranties of the Company, are not obsolete, are useable or
saleable in the ordinary course of business and, if saleable, are saleable at
values not less than the book value amounts thereof and all in-process and
finished products in such inventories have been produced in compliance with the
applicable quality control procedures of the Company. The value of all items of
obsolete materials and of materials of below standard quality has been written
down to net realizable value or adequate reserves have been provided therefore.
The values at which such inventories are carried are in accordance with GAAP
consistently applied. The amount and mix of items in the inventories of
28
supplies, in-process and finished products is, and will be at the Closing Date,
consistent with the Company's past business practices. All Inventory has been
manufactured in accordance with applicable law in effect at the time of such
manufacture, except where the failure to comply with such applicable law could
not reasonably be expected to result in a Material Adverse Effect.
(u) PERSONAL PROPERTY.
(i) Section 4(u) of the Disclosure Schedule sets forth (A) the
tangible physical assets of the Company that do not constitute land (including
without limitation machinery, equipment, tools, dies, furniture, furnishings,
leasehold improvements, vehicles, buildings and fixtures) and that have a value
in excess of $10,000 per item or per category of items and the location of such
items, (B) individual refundable deposits, prepaid expenses, deferred charges
and "other assets" in excess of $10,000 or $100,000 in the aggregate, (C) all
loans or advances made by the Company to any Person in excess of $10,000 and (D)
all personal property leased by the Company that has a value in excess of
$10,000 (the "PERSONAL PROPERTY").
(ii) Except as set forth in Section 4(u) of the Disclosure
Schedule, the Company has good and valid title to all of the Personal Property,
free and clear of all Encumbrances. Except as set forth in Section 4(u) of the
Disclosure Schedule, the Company owns, and has valid leasehold interests in or
valid contractual rights to use, all of the assets, tangible and intangible,
used by, or necessary (both individually and in the aggregate) for the conduct
the businesses of, the Company.
(iii) The Equipment and Furnishings are in good working order,
normal wear and tear excepted, are being used or are useful in the Business at
its present level of activity and are (both individually and in the aggregate)
in an operating condition sufficient to conduct the Business as now being
conducted.
(iv) All motor vehicles used in the Business, whether owned or
leased, are set forth on Section 4(u) of the Disclosure Schedule. Such vehicles
are in good working order taking into account their usage in the ordinary course
of business, normal wear and tear excepted.
(v) DISCLAIMER OF OTHER REPRESENTATIONS AND WARRANTIES. Except as
expressly set forth in Section 3 and this Section 4, neither Parent nor the
Company makes any representation or warranty, express or implied, at law or in
equity, in respect of the Company or any of its assets, liabilities or
operations, including, without limitation, with respect to merchantability or
fitness for any particular purpose, and any such other representations or
warranties are hereby expressly disclaimed. Buyer hereby acknowledges and agrees
that, except to the extent specifically set forth in Section 3 and this Section
4, the Buyer is purchasing the Assets on an "as-is, where-is" basis.
29
5. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents and
warrants to Parent and the Company that the statements contained in this Section
5 are correct and complete as of the date of this Agreement and will be correct
and complete as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout this
Section 5).
(a) ORGANIZATION OF THE BUYER. The Buyer is duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation.
(b) AUTHORIZATION OF TRANSACTION. The Buyer has full power and authority
to execute and deliver this Agreement and to perform its obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of the
Buyer, enforceable in accordance with its terms and conditions, except as the
enforceability thereof may be limited by any applicable bankruptcy,
reorganization, insolvency or other laws affecting creditors' rights generally
or by general principles of equity. The Buyer need not give any notice to, make
any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order to consummate the transactions
contemplated by this Agreement other than the applicable filings under the
Xxxx-Xxxxx-Xxxxxx Act.
(c) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Buyer is subject or any provision of
its charter or bylaws or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Buyer is a party or by which it is bound or to which any of its assets is
subject.
(d) AVAILABILITY OF FINANCING. The Buyer has a commitment for the
financing of the transactions contemplated hereby, a copy of which is attached
hereto as EXHIBIT H, and such commitment would, if funded, provide funds which
would, together with other funds available to the Buyer, be sufficient to pay
the Adjusted Purchase Price at the Closing.
(e) BROKERS' FEES. Except for Kohlberg & Company, LLC, the Buyer has no
liability or obligation to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by this Agreement.
6. PRE-CLOSING COVENANTS. The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing.
(a) GENERAL. Each of the Parties will use its commercially reasonable
efforts to take all action and to do all things necessary, proper, or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the closing conditions set
forth in Section 8 below). In furtherance of the foregoing, the Company shall
deliver to Chicago Title Company an owner's affidavit in the form of EXHIBIT I
hereto and other such documents as may reasonably be requested by the title
company.
30
(b) NOTICES AND CONSENTS. Parent will cause the Company to give any
notices to third parties, and will cause the Company to use its commercially
reasonable efforts to obtain any third party consents that the Buyer reasonably
may request in connection with the transactions contemplated by this Agreement.
Each of the Parties will (and Parent will cause the Company to) give any notices
to, make any filings with, and use its commercially reasonable efforts to obtain
any required authorizations, consents, and approvals of governments and
governmental agencies in connection with the transactions contemplated by this
Agreement. Without limiting the generality of the foregoing, each of the Parties
will (i) take all action necessary, on or prior to the date five business days
after the date hereof to make the filings required of the Buyer and the Company
(or the "ultimate parent entity" of such party) under the Xxxx-Xxxxx-Xxxxxx Act
to consummate the transactions contemplated by this Agreement, (ii) use their
commercially reasonable efforts to obtain early termination of the waiting
period thereunder and (iii) promptly comply at the earliest practical date with
any request for additional information received by the Buyer, Parent or the
Company from the United States Federal Trade Commission (the "FTC") or the
Antitrust Division of the United States Department of Justice (the "DOJ")
pursuant to the Xxxx-Xxxxx-Xxxxxx Act. In addition, each of the Buyer, Parent
and the Company shall (and the "ultimate parent entity" of such party, if
applicable, shall) make reasonable efforts to satisfy any antitrust concern
raised by the FTC, DOJ or any state attorney general (collectively, the
"ANTITRUST AUTHORITIES") and cooperate with the other party in resolving those
issues, including but not limited to, providing supplemental information to the
Antitrust Authorities with respect to antitrust issues raised by the Antitrust
Authorities and making any voluntary presentation to the Antitrust Authorities
in order to resolve any antitrust issue raised by such authorities. Without
limiting the foregoing, each of the Buyer, Parent and the Company will cooperate
with the other party in connection with any filings required under the
Xxxx-Xxxxx-Xxxxxx Act and overcoming any objections, including (x) furnishing to
the other party, upon request, such information as shall reasonably be required
in connection with the preparation of the party's filings under the
Xxxx-Xxxxx-Xxxxxx Act, (y) with respect to the transactions contemplated by this
Agreement, coordinating responses and establishing reasonable schedules and
deadlines in connection with resolving any investigation, other inquiry, or
legal proceedings commenced by the Antitrust Authorities and (z) providing the
other parties with any communication received by any governmental entity with
respect to the foregoing. The Buyer shall pay all filing fees payable in
connection with the pre-merger notification filing under the Xxxx-Xxxxx-Xxxxxx
Act.
(c) OPERATION OF BUSINESS. Except as expressly contemplated by this
Agreement or otherwise consented to by the Buyer in writing, the Company shall,
at its cost and expense:
(i) conduct the Business only in the usual, regular and ordinary
course in substantially the same manner as heretofore conducted and maintain
working capital at current levels subject to normal fluctuation consistent with
past experience:
(ii) maintain in all material respects all of the structures,
equipment, vehicles and other tangible personal property of the Business in its
present condition, except for ordinary wear and tear and damage by unavoidable
casualty;
(iii) preserve and maintain the Intellectual Property;
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(iv) keep in full force and effect insurance comparable in amount
and scope of coverage to that now carried with respect to the Business;
(v) perform in all material respects all obligations under all
Contracts so as to prevent any default thereunder;
(vi) maintain the books of account and records of the Business in
the usual, regular and ordinary manner;
(vii) comply in all material respects with all Permits, statutes,
laws, ordinances, rules and regulations applicable to the conduct of the
Business so as to prevent any material violation thereof;
(viii) except as set forth in Section 6(c)(viii) of the Disclosure
Schedule, not enter into any employment agreement or commitment to employees of
the Business or effect any increase in the compensation or benefits payable or
to become payable to any officer, director or employee of the Business other
than increases in non-officer employee compensation effected in the ordinary
course of business;
(ix) not create any consensual Encumbrance on the Assets;
(x) not enter into or modify any agreement for indebtedness or any
Contract obligating the Company to purchase goods or services for a period of 90
days or more, or sell, lease, license or otherwise dispose of any Asset (other
than dispositions of obsolete Assets and inventory in the ordinary course of
business) or acquire any substantial assets other than replacement assets,
inventory and supplies to be used in the Business and vehicles upon repayment of
the applicable capital lease or enter into any capital leases;
(xi) not take any action with respect to, or make any material
change in its accounting or Tax policies or procedures, except as may be
required by changes in GAAP upon the advice of its independent accountants;
(xii) not make or revoke any Tax election or settle or compromise
any Tax liability, or amend any Tax Return;
(xiii) not sell any Receivables under the Dealer Network Financing
Facility Programs during the period from the date of this Agreement through the
Closing Date, except in the ordinary course of business consistent with past
practice;
(xiv) not make any distribution to Parent;
(xv) not change or modify any existing, or adopt any new, sale
programs, incentive programs, rebate programs or retail financing programs; or
(xvi) not authorize or enter into any commitment with respect to
any of the matters described in (viii), (ix), (x), (xi), (xii), (xiii), (xiv),
or (xv) above.
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(d) FULL ACCESS. The Company will permit, and Parent will cause the
Company to permit, representatives of the Buyer to have full access at all
reasonable times, and in a manner so as not to interfere with the normal
business operations of the Company, to all premises, properties, personnel,
books, records (including tax records and evidence of checks written,
outstanding and held), contracts, and documents of or pertaining to the Company;
provided, however, that, to the extent that the Buyer conducts any environmental
review of the Company's Owned Real Property or Leased Real Property, such review
shall be conducted strictly in accordance with a mutually acceptable site access
agreement and shall be conducted only after the prior review and approval of the
Company and Parent. Any and all Confidential Information that the Buyer receives
from Parent or the Company shall be subject in all respects to strict compliance
with the terms and conditions of the Confidentiality Agreement dated as of
January 17, 2002 by and between Parent and the Buyer (the "CONFIDENTIALITY
AGREEMENT"). In the course of the reviews contemplated by this Section 6(d), the
Buyer will not use any of the Confidential Information except as expressly
permitted by the Confidentiality Agreement, and, if this Agreement is terminated
for any reason whatsoever, will return to Parent or the Company, as the case may
be, all tangible embodiments (and all copies) of the Confidential Information
which are in its possession.
(e) NOTICE OF DEVELOPMENTS. Without limiting the Buyer's rights under
Section 10(a) below, Parent will give prompt written notice to the Buyer of any
development causing a breach of any of the representations and warranties in
Sections 3 and 4 above.
(f) EMPLOYEES.
(i) On the date hereof or as soon as reasonably practicable
thereafter, the Company shall provide notice under WARN to each of the employees
of the Company other than those that are terminated immediately following the
execution of this Agreement, in the form attached hereto as EXHIBIT J, with
respect to a potential "plant closing" or "mass layoff" (as defined under WARN).
Included with such notices to employees as to whom the Buyer has stated its
intention to make an offer of continued employment shall be information about
Buyer and employment application forms to enable the employees to apply for
positions with Buyer to commence upon the termination of their employment with
the Company.
(ii) The Buyer agrees to make offers of employment, with
employment to commence the next business day following the Closing, to all of
the Company's represented employees employed in the Business on the Closing Date
and not less than 193 of the remaining or non-represented employees employed on
the Closing Date. Except as set forth in Section 6(f)(ii) of the Disclosure
Schedule, each such offer of employment will be at the same base salary (or
hourly compensation) level and, except as set forth on Section 6(f)(ii) of the
Disclosure Schedule, for a position having the same title, duties and
responsibilities, in each case as in effect, with respect to such employee,
immediately prior to the Closing Date. Each such employee who accepts such offer
of employment is referred to hereinafter as a "TRANSFERRED EMPLOYEE," and all
such employees collectively as the "TRANSFERRED EMPLOYEES." The Buyer and the
Company agree to utilize the "STANDARD PROCEDURE" provided for in Section 4 of
Revenue Procedure 96-60, 1996-2 Cumulative Bulletin 399, with respect to filing
and furnishing Internal Revenue Service forms W-2, W-3 and 941 with respect to
those employees who are hired by the Buyer as of the Closing. The Buyer agrees
to provide to the Company access to those
33
employment records of the Company's former employees which are then in the
Buyer's possession or under the Buyer's control for the purposes of preparing,
filing and furnishing such forms. The Company and Parent agree not to terminate
or lay off more than 125 employees from the date hereof through the Closing Date
(other than the termination of Transferred Employees on the Closing Date who are
simultaneously offered employment with the Buyer).
(iii) Not later than the Closing Date, the Buyer shall establish
initial terms and conditions of employment and shall offer employment to all
Company employees represented by the Union. As soon as practicable at or
following Closing, the Buyer shall recognize the Union based on majority status
and shall enter into a collective bargaining agreement with the Union.
(iv) Following Closing, (A) the Buyer shall waive any waiting
periods, exclusions, or pre-existing condition limitations that may otherwise be
applicable to Transferred Employees, and their spouses and eligible dependents,
under any benefit plans of the Buyer, and (B) the Buyer shall provide health
insurance to the Transferred Employees which is substantially equivalent to the
health insurance provided by the Company prior to Closing; PROVIDED that,
although the Buyer has agreed to assume all obligations for post-retirement
benefits as described on EXHIBIT F hereto, the Buyer may, at its option (without
any liability on the part of the Company), alter the retiree medical insurance
or retiree life insurance that is currently offered by the Company and may
provide such benefits to the extent and under the conditions determined by the
Buyer in its sole discretion. Following Closing, each employee benefit plan or
arrangement and employee compensation policy or practice sponsored by the Buyer
or its Affiliates shall credit, for all purposes (except for benefit accruals
under any defined benefit pension plans), all service of the Transferred
Employees, and other employees and officers of the Company, with the Company to
the same extent such service was taken into consideration under comparable
employee benefit plans of the Company.
(v) With respect to any otherwise eligible employee of the Company
on the Closing Date to whom Buyer does not make an offer of employment pursuant
to Section 6(f)(ii) above and who is not covered by a Change of Control
Agreement, (i) the Company shall pay such employee severance in accordance with
the severance pay plan attached as EXHIBIT K hereto up to a maximum amount of
$1.2 million, and (ii) the Buyer shall reimburse the Company for any severance
owing to such employees in excess of $1.2 million in the aggregate. The Company
and Parent acknowledge and agree that all severance obligations owing to any
employee not offered employment with the Buyer pursuant to Section 6(f)(ii), or
to any employee who rejects employment with the Buyer after receiving an offer
from the Buyer that is made on the terms and conditions set forth in Section
6(f)(ii), shall be the obligation of the Company.
(vi) Under the terms of the Company's severance pay plan attached
as EXHIBIT K, severance is paid in installments in accordance with the Company's
standard payroll practices. Subject to Parent's and the Company's compliance
with the Transition Services Agreement, the Buyer agrees that it will administer
the payment of severance pay to the employees eligible for such severance,
including withdrawing applicable payroll taxes and transmitting them to the
Internal Revenue Service.
34
(g) NO SOLICITATION.
(i) Unless this Agreement shall have been terminated pursuant to
Section 9 below, Parent shall not, directly or indirectly through any officer,
director, employee, agent, affiliate or otherwise, enter into any agreement,
agreement in principle or other commitment (whether or not legally binding)
relating to a Competing Transaction or solicit, initiate or encourage the
submission of any proposal or offer from any person or entity (including any of
Parent's officers, partners, employees and agents) relating to any Competing
Transaction, nor participate in any discussions or negotiations regarding, or
furnish to any other person or entity any information with respect to, or
otherwise cooperate in any way with, or assist or participate in, facilitate or
encourage, any effort or attempt by any other person or entity to effect a
Competing Transaction. Parent shall immediately cease any and all contacts,
discussions and negotiations with third parties regarding any Competing
Transaction.
(ii) Unless this Agreement shall have been terminated pursuant to
Section 9 below, the Company shall not, directly or indirectly through any
officer, director, employee, agent, affiliate or otherwise, enter into any
agreement, agreement in principle or other commitment (whether or not legally
binding) relating to a Competing Transaction or solicit, initiate or encourage
the submission of any proposal or offer from any person or entity (including any
of the Company's officers, partners, employees and agents) relating to any
Competing Transaction, nor participate in any discussions or negotiations
regarding, or furnish to any other person or entity any information with respect
to, or otherwise cooperate in any way with, or assist or participate in,
facilitate or encourage, any effort or attempt by any other person or entity to
effect a Competing Transaction. The Company shall immediately cease any and all
contacts, discussions and negotiations with third parties regarding any
Competing Transaction.
(h) INSURANCE. On or prior to the date hereof, Parent and the Buyer shall
each deposit with AIG Insurance or another insurance carrier as specified in
Section 8(a)(viii) below one-half of the premium required to pay in full the
insurance policy contemplated by Section 8(a)(viii) below.
(i) BULK SALES REQUIREMENTS. The Company and the Buyer shall comply with
all statutory requirements of applicable bulk sales laws. At least 15 days prior
to Closing, the Company shall notify the Buyer of the names and business
addresses of all creditors of the Company, with amounts known, and the names of
all Persons who are known to the Company to assert claims against it even though
such claims are disputed. Buyer shall notify the Company's creditors, to the
extent addresses and contact information are provided by the Company, of its
acquisition of the Company's assets at least ten (10) days prior to the Closing.
7. POST-CLOSING COVENANTS. The Parties agree as follows with respect to
the period following the Closing.
(a) GENERAL. In case at any time after the Closing any further action is
necessary to carry out the purposes of this Agreement, each of the Parties will
take such further action (including the execution and delivery of such further
instruments and documents) as any other Party reasonably may request, all at the
sole cost and expense of the requesting Party (unless the requesting Party is
entitled to indemnification therefore under Section 9 below).
35
(b) LITIGATION SUPPORT; BUSINESS RECORDS.
(i) In the event and for so long as any Party actively is
contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand in connection with (A) any
transaction contemplated under this Agreement or (B) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or prior to the Closing Date
involving the Company, each of the other Parties shall cooperate with such Party
and its counsel in the defense or contest, make available their personnel, and
provide such testimony and access to their books and records as shall be
necessary in connection with the defense or contest, all at the sole cost and
expense of the contesting or defending Party (unless the contesting or defending
Party is entitled to indemnification therefor under Section 9 below).
(ii) The Buyer acknowledges that business records of the Company
relating to the operations of the Business prior to the Closing will be conveyed
to the Buyer as part of the Assets and that Parent and the Company may from time
to time require access to or copies of such records in connection with the
preparation of the Closing Date Balance Sheet, tax matters, litigation claims
and other matters arising with respect to the operations of the Company prior to
the Closing or the winding up of the Company's affairs. The Buyer agrees that,
upon reasonable prior notice from Parent and/or the Company, the Buyer will,
during normal business hours, provide Parent and/or the Company with access to
(including office space), and (at Parent's expense) copies of, such records for
such purposes. The Company and Parent agree to hold any confidential information
so provided in confidence and to use such information only for the purposes
described above. The Buyer agrees that it will not within three (3) years after
the Closing Date destroy any material business records prepared prior to the
Closing without first notifying Parent and affording it the opportunity to
remove or copy them.
(c) TRANSITION. Parent and the Company will not take any action that is
designed or intended to have the effect of discouraging any lessor, licensor,
customer, supplier, or other business associate of any of the Company from
maintaining the same business relationships with the Buyer after the Closing as
it maintained with the Company prior to the Closing.
(d) COVENANT NOT TO COMPETE. For a period of three years from and after
the Closing Date, neither Parent nor the Company will engage directly or
indirectly in any business that competes with the Business in any geographic
area in which the Company conducts that business as of the Closing Date;
PROVIDED that no owner of less than 5% of the outstanding stock of any
publicly-traded corporation shall be deemed to engage solely by reason thereof
in any of its businesses. If the final judgment of a court of competent
jurisdiction declares that any term or provision of this Section 7(d) is invalid
or unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed. Parent and the Company acknowledge and agree
that the covenant contained in this Section 7(d) is material to the transactions
contemplated
36
hereby and but for such covenant, the Buyer would not have entered into this
Agreement. In the event of any breach of this Section 7(d), the length of this
covenant shall automatically be extended by the length of such breach.
(e) NAME CHANGE. Immediately following the Closing, the Company shall
change its name to a name that does not include the word "Snapper" or anything
similar, and shall make similar changes in each state in which it is qualified
to do business.
(f) TERMINATION OF SELF-INSURANCE OBLIGATIONS. Parent, the Company and
the Buyer hereby acknowledge, consent and agree that, effective as of the
Closing Date, Parent shall terminate any and all self-insurance programs and
arrangements relating to product liability claims previously established between
the Company and Parent and, effective as of the Closing Date; PROVIDED, however,
that such termination shall not affect the liabilities assumed by the Buyer
hereunder.
(g) SUBCONTRACTING. Nothing in this Agreement will constitute a transfer,
sale or assignment or an attempted transfer, sale or assignment of any Contract
or Permit which is not capable of being transferred, sold or assigned without
the consent, approval, novation or waiver of a third-party or any Contract or
Permit the transfer, sale or assignment or attempted transfer, sale or
assignment of which would constitute a breach of such Contract or Permit or a
violation of any applicable law (collectively, the "NON-ASSIGNABLE CONTRACTS"
and the "NON-ASSIGNABLE PERMITS," respectively). To the extent that any consent,
approval, novation or waiver with respect to a Non-assignable Contract or
Non-assignable Permit is not obtained on or prior to the Closing Date, Parent
and the Company will, at the Buyer's reasonable request and direction, in any
reasonable and lawful arrangement (including entering into a subcontract with
Buyer), seek to provide the Buyer the benefits and risks of such Non-assignable
Contract or Non-assignable Permit to the extent relating to the Business for the
period commencing with the Closing Date and continuing until the earlier of (i)
the expiration of the original term of the applicable Non-assignable Contract or
Non-assignable Permit, (ii) Parent's receipt of written notice from the Buyer
that the Buyer has obtained an adequate replacement for such Non-assignable
Contract or Non-assignable Permit or (iii) the assignment to the Buyer of the
applicable Non-assignable Contract or Non-assignable Permit. Each Non-assignable
Contract or Non-assignable Permit shall be administered by the Buyer pursuant to
the Transition Services Agreement.
8. CONDITIONS TO OBLIGATION TO CLOSE.
(a) CONDITIONS TO OBLIGATION OF THE BUYER. The obligation of the Buyer to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Sections 3 and
4 that are qualified with reference to materiality shall be true and correct and
the representations and warranties that are not so qualified shall be true and
correct in all material respects at and as of the Closing Date;
(ii) Parent and the Company shall have performed and complied with
all of their respective covenants hereunder in all material respects through the
Closing;
37
(iii) there shall not be any injunction, judgment, order, decree,
ruling, or charge in effect preventing consummation of any of the transactions
contemplated by this Agreement or seeking substantial damages therefrom, and
there shall be no pending action which, in the reasonable judgment of Buyer,
could reasonably be expected to result in any such judgment or damages;
(iv) Parent and the Company shall have delivered to the Buyer a
certificate signed by the Chief Financial Officer of Parent and the Chief
Executive Officer, Chief Financial Officer and Chief Operating Officer of the
Company to the effect that each of the conditions specified above in Section
8(a)(i)-(iii), as applies separately with respect to each of Parent and the
Company, is satisfied in all respects;
(v) all applicable waiting periods (and any extensions thereof)
under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or otherwise been terminated;
(vi) the financing contemplated by the financing commitment
referred to in Section 5(d) above (a copy of which is attached hereto as EXHIBIT
H) shall have been funded simultaneously with the Closing on the Closing Date;
(vii) American International Specialty Line Insurance Company
("AIG Insurance") or another insurance with similar ratings shall have issued a
coverage binder effective at or before Closing committing to issue an
environmental insurance policy substantially in the form attached as EXHIBIT L
hereto, with per claim and aggregate limits of liability not less than
$10,000,000, naming the Buyer (or an affiliate) as insured and the Company and
Parent as additional insureds; PROVIDED that the Buyer has used its best efforts
to secure such coverage;
(viii) the consents set forth on Section 8(a)(ix) of the
Disclosure Schedule shall have been obtained;
(ix) the Buyer shall have received an affidavit from the Company,
sworn to under penalty of perjury, setting forth such party's name, address and
federal tax identification number and stating that such Person, is not a
"foreign person" within the meaning of Section 1445 of the Code in the form of
EXHIBIT M hereto;
(x) all amounts outstanding under the Revolving Credit Facility
shall have been satisfied and all Encumbrances related thereto, together with
the Encumbrances set forth on Section 8(a)(xi), shall have been released;
(xi) the Buyer shall have received duly executed copies of (a) the
Xxxx of Sale, (b) the Deeds, (c) the Intellectual Property Assignments and any
similar assignments required in connection with the assignment of any non-United
States Intellectual Property, and (d) resale certificates for the Inventory; and
(xii) all actions to be taken by Parent and the Company in
connection with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to effect the
transactions contemplated hereby shall be reasonably satisfactory in form and
substance to the Buyer.
38
The Buyer may waive any condition specified in this Section 8(a) if it executes
a writing so stating at or prior to the Closing.
(b) CONDITIONS TO OBLIGATION OF THE COMPANY. The obligation of the
Company to consummate the transactions to be performed by the Company in
connection with the Closing is subject to satisfaction of the following
conditions:
(i) the representations and warranties set forth in Section 5 that
are qualified with reference materiality shall be true and correct and the
representations and warranties that are not so qualified shall be true and
correct in all material respects at and as of the Closing Date;
(ii) the Buyer shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) there shall not be any injunction, judgment, order, decree,
ruling, or charge in effect preventing consummation of any of the transactions
contemplated by this Agreement or seeking substantial damages therefrom, and
there shall be no pending action which, in the reasonable judgment of Buyer,
could reasonably be expected to result in any such judgment or damages;
(iv) the Buyer shall have delivered to the Company a certificate
signed by its Chief Executive Officer or Chief Financial Officer to the effect
that each of the conditions specified above in Section 8(b)(i)-(iii) is
satisfied in all respects;
(v) all applicable waiting periods (and any extensions thereof)
under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or otherwise been terminated;
(vi) AIG Insurance or another insurance with similar ratings shall
have issued a coverage binder effective at or before Closing committing to issue
an environmental insurance policy substantially in the form attached as EXHIBIT
L hereto naming the Company and Parent as additional insureds;
(vii) each of TransAmerica Commercial Finance Corporation and
Textron Financial Corporation shall have consented to the assumption by the
Buyer of the Dealer Network Financing Programs and Parent shall have been
released from any and all guarantees pursuant to which Parent shall have
guaranteed any such obligations of the Company;
(viii) the Buyer shall have executed and delivered the Assumption
Agreement and the Transition Services Agreement; and
(ix) all actions to be taken by the Buyer in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby shall be reasonably satisfactory in form and substance to
the Company.
The Company may waive any condition specified in this Section 8(b) if Parent and
the Company execute a writing so stating at or prior to the Closing.
39
9. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS;
INDEMNIFICATION.
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. The covenants contained in
this Agreement shall survive the Closing Date without limitation. The
representations and warranties contained herein shall survive the Closing Date
for a period of two (2) years; PROVIDED that the representations and warranties
contained in Section 4(j) shall survive until the expiration of the applicable
statute of limitations. Any matter as to which a claim has been asserted by
notice to the other party received before such date that is pending or
unresolved at the end of any applicable limitation period shall continue to be
covered by Section 9 notwithstanding any applicable statute of limitations
(which the parties hereby waive) until such matter is finally terminated or
otherwise resolved by the parties or by a court of competent jurisdiction and
any amounts payable hereunder are finally determined and paid.
(b) INDEMNIFICATION BY THE COMPANY AND PARENT. Parent and the Company
hereby, jointly and severally, agree to defend, indemnify and hold harmless the
Buyer, its successors and assigns and its officers, directors, shareholders,
affiliates, employees and agents (collectively, the "BUYER INDEMNITEES") from
and against any and all Losses (both those incurred in connection with the
defense or prosecution of the indemnifiable claim and those incurred in
connection with the enforcement of this provision) (collectively, "BUYER
LOSSES") caused by, based upon, resulting from or arising out of:
(i) any breach of a representation or warranty hereunder on the
part of Parent or the Company (after giving effect to any materiality or
Material Adverse Effect qualification contained therein; PROVIDED that, solely
for purposes of this Section 9(b), the terms "material" and "Material Adverse
Effect" shall be limited to any event, action or circumstance that results in a
total liability to the Company in excess of $40,000);
(ii) any failure by Parent or the Company to perform or otherwise
fulfill any covenant, provision, undertaking or other agreement or obligation
hereunder;
(iii) any Excluded Liabilities; and
(iv) any and all actions, suits, proceedings, claims, and demands
incident to any of the foregoing or such indemnification.
(c) INDEMNIFICATION BY THE BUYER. The Buyer hereby agrees to defend,
indemnify and hold harmless Parent and the Company, each of their successors and
assigns and each of their officers, directors, shareholders, affiliates,
employees and agents (collectively, the "PARENT INDEMNITEES") from and against
any and all Losses (both those incurred in connection with the defense or
prosecution of the indemnifiable claim and those incurred in connection with the
enforcement of this provision) (collectively, "PARENT LOSSES"), caused by, based
upon, resulting from or arising out of:
(i) any breach of a representation or warranty hereunder on the
part of the Buyer;
(ii) any failure by the Buyer to perform or otherwise fulfill any
covenant, provision, undertaking or other agreement or obligation hereunder,
including its
40
obligation to make offers of employment to the employees of the Company in the
manner contemplated by Section 6(f)(ii) of this Agreement;
(iii) any Assumed Liabilities (it being understood and agreed
that, for purposes of this Section 9, any Non-Assignable Contract or
Non-Assignable Permit shall be deemed to be an Assumed Liability); and
(iv) any and all actions, suits, proceedings, claims, and demands
incident to any of the foregoing or such indemnification.
(d) PROCEDURE FOR CLAIMS BY THIRD PARTIES.
(i) The rights and obligations of a party claiming a right to
indemnification hereunder (each, an "INDEMNITEE") from a party to this Agreement
(each, an "INDEMNITOR") in any way relating to a third party claim shall be
governed by the following provisions of this Section 9(d):
(A) The Indemnitee shall give prompt written notice to the
Indemnitor of the commencement of any claim, action, suit or proceeding, or any
threat thereof, or any state of facts which Indemnitee determines will give rise
to a claim by the Indemnitee against the Indemnitor based on the indemnity
agreements contained in this Agreement setting forth, in reasonable detail, the
nature and basis of the claim and the amount thereof, to the extent known, and
any other relevant information in the possession of the Indemnitee (a "NOTICE OF
CLAIM"). The Notice of Claim shall be accompanied by any relevant documents in
the possession of the Indemnitee relating to the claim (such as copies of any
summons, complaint or pleading which may have been served or any written demand
or document evidencing the same). No failure to give a Notice of Claim shall
affect, limit or reduce the indemnification obligations of an Indemnitor
hereunder, except to the extent such failure actually prejudices such
Indemnitor's ability successfully to defend the claim, action, suit or
proceeding giving rise to the indemnification claim.
(B) In the event that an Indemnitee furnishes an Indemnitor
with a Notice of Claim, then upon the written acknowledgment by the Indemnitor
given to the Indemnitee within 30 days of receipt of the Notice of Claim,
stating that the Indemnitor is undertaking and will prosecute the defense of the
claim under such indemnity agreements and confirming that as between the
Indemnitor and the Indemnitee, the claim covered by the Notice of Claim is
subject to this Section 9 (without admitting responsibility to indemnify
therefore) and that the Indemnitor would be able to pay the full amount of
potential liability in connection with any such claim (including, without
limitation, any action, suit or proceeding and all proceedings on appeal or
other review which counsel for the Indemnitee may reasonably consider
appropriate) (an "INDEMNIFICATION ACKNOWLEDGMENT"), then the claim covered by
the Notice of Claim may be defended by the Indemnitor, at the sole cost and
expense of the Indemnitor; PROVIDED that the Indemnitee is authorized to file
any motion, answer or other pleading that may be reasonably necessary or
appropriate to protect its interests during such 30 day period. However, in the
event the Indemnitor does not furnish an Indemnification Acknowledgment to the
Indemnitee or does not offer reasonable assurances to the Indemnitee as to
Indemnitor's financial capacity to satisfy any final judgment or settlement, the
Indemnitee may, upon written
41
notice to the Indemnitor, assume the defense (with legal counsel chosen by the
Indemnitee) and dispose of the claim, at the sole cost and expense of the
Indemnitor. Notwithstanding receipt of an Indemnification Acknowledgment, the
Indemnitee shall have the right to employ its own counsel in respect of any such
claim, action, suit or proceeding, but the fees and expenses of such counsel
shall be at the Indemnitee's own cost and expense, unless (1) the employment of
such counsel and the payment of such fees and expenses shall have been
specifically authorized by the Indemnitor in connection with the defense of such
claim, action, suit or proceeding or (2) the Indemnitee shall have reasonably
concluded based upon a written opinion of counsel that there may be specific
defenses available to the Indemnitee which are different from or in addition to
those available to the Indemnitor in which case the fees and expenses of counsel
incurred by the Indemnitee shall be borne by the Indemnitor.
(C) The Indemnitee or the Indemnitor, as the case may be,
who is controlling the defense of the action, suit, proceeding or claim, shall
keep the other fully informed of such claim, action, suit or proceeding at all
stages thereof, whether or not such party is represented by counsel. The parties
hereto agree to render to each other such assistance as they may reasonably
require of each other in order to ensure the proper and adequate defense of any
such claim, action, suit or proceeding. Subject to the Indemnitor furnishing the
Indemnitee with an Indemnification Acknowledgment in accordance with Section
9(d)(i)(B), the Indemnitee shall cooperate with the Indemnitor and provide such
assistance, at the sole cost and expense of the Indemnitor, as the Indemnitee
may reasonably request in connection with the defense of any such claim, action,
suit or proceeding, including, but not limited to, providing the Indemnitor with
access to and use of all relevant corporate records and making available its
officers and employees for depositions, pre-trial discovery and as witnesses at
trial, if required. In requesting any such cooperation, the Indemnitor shall
have due regard for, and attempt to not be disruptive of, the business and
day-to-day operations of the Indemnitee and shall follow the requests of the
Indemnitee regarding any documents or instruments which the Indemnitee believes
should be given confidential treatment.
(ii) The Indemnitor shall not make or enter into any settlement of
any claim, action, suit or proceeding which Indemnitor has undertaken to defend,
without the Indemnitee's prior written consent (which consent shall not be
unreasonably withheld or delayed), unless there is no obligation, directly or
indirectly, on the part of the Indemnitee to contribute to any portion of the
payment for any of the Losses, the Indemnitee receives a general and
unconditional release with respect to the claim (in form, substance and scope
reasonably acceptable to the Indemnitee), there is no finding or admission of
any violation of law by, or effect on any other claim that may be made against
the Indemnitee.
(iii) Any claim for indemnification that may be made under more
than one subsection under Section 9(a) or Section 9(b) may be made under the
subsection that the claiming party may elect in its sole discretion,
notwithstanding that such claim may be made under more than one subsection.
(e) PROCEDURE FOR CLAIMS BETWEEN THE PARTIES. Upon obtaining knowledge of
a Loss that shall entitle an injured party to indemnification hereunder which
does not arise from a third party claim, the injured party shall deliver a
Notice of Claim to the indemnifying party. The Notice of Claim shall state in
reasonable detail the nature and estimated amount of any such
42
Loss giving rise to the right of indemnification hereunder. The Indemnitor shall
have 20 days after receipt of a Notice of Claim to respond to such Notice of
Claim stating whether or not it disputes its liability or the amount thereof,
and the basis for any objection. If the indemnifying party fails to respond to
such Notice of Claim within such 20 day period, the indemnifying party shall be
deemed to have acknowledged its responsibility for such Loss, and in such event,
or if the indemnifying party does not dispute its liability, then the
indemnifying party shall pay and discharge any such Loss which is not contested
within 45 days after receipt of such Notice of Claim.
(f) EXCLUSIVE REMEDY. The Buyer, Parent and the Company acknowledge and
agree that the foregoing indemnification provisions in this Section 9 shall be
the exclusive remedy of the Buyer, Parent and the Buyer with respect to the
transactions contemplated by this Agreement, other than for fraud.
(g) LIMITS ON INDEMNIFICATION.
(i) Parent's and the Company's obligation to indemnify for Buyer
Losses under Section 9(b)(i) of this Agreement (A) shall accrue only if the
aggregate of all such Buyer Losses exceeds 1% of the Purchase Price (as adjusted
pursuant to Section 2(e)) (the "SELLER BASKET") and then Parent shall be liable
for all such Buyer Losses only to the extent that such Buyer Losses exceed such
amount and (B) shall be limited in the aggregate to an amount equal to 5% of the
Purchase Price (as adjusted pursuant to Section 2(e)) (the "Cap"). For
illustration purposes only, based on Schedule II, if Schedule II was the Closing
Date Balance Sheet, the Seller Basket would be $565,840 and the Cap would be
$2,829,200. Any deductible paid by the Buyer in accordance with the terms and
conditions of the environmental insurance policy contemplated under Section
8(a)(viii) above shall apply towards the Basket.
(ii) The Buyer's obligation to indemnify for Parent Losses under
Section 9(c)(i) above shall accrue only if the aggregate of all such Parent
Losses exceeds 1% of the Purchase Price (as adjusted pursuant to Section
2(e))(the "BUYER BASKET") and then the Buyer shall be liable for all such Parent
Losses only to the extent that such Parent Losses exceed such amount; PROVIDED
that the Buyer shall be obligated to pay any severance that becomes payable to
any employee of the Company as a result of the Buyer's failure to comply with
its obligations under Section 6(f)(ii) of this Agreement, and shall indemnify
Parent and the Company for, and hold them harmless from and against, any such
severance amount, in each case, without giving effect to the Buyer Basket.
(iii) Prior to Parent or the Company being obligated to make any
payment to the Buyer arising under any Environmental Law as a result of this
Agreement or otherwise, the Buyer shall have pursued its rights under the
environmental insurance policy contemplated under Section 8(a)(viii) and either
(x) the insurance company shall have denied coverage or (y) the policy limits
shall have been exhausted.
10. TERMINATION.
(a) TERMINATION OF AGREEMENT. The Parties may terminate this Agreement as
provided below:
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(i) the Buyer and Parent and the Company may terminate this
Agreement by mutual written consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement by giving written
notice to Parent and the Company at any time prior to the Closing in the event
(A) Parent or the Company has within the then previous 10 business days given
the Buyer any notice pursuant to Section 6(e) above and (B) the development that
is the subject of the notice has had a Material Adverse Effect;
(iii) the Buyer may terminate this Agreement by giving written
notice to Parent and the Company at any time prior to the Closing (A) in the
event Parent or the Company has breached any representation, warranty, or
covenant contained in this Agreement that is qualified by materiality and any
other representation, warranty, or covenant contained in this Agreement in any
material respect, the Buyer has notified Parent and the Company of the breach,
and the breach has continued without cure for a period of thirty (30) days after
the notice of breach or (B) if the Closing shall not have occurred on or before
November 30, 2002, by reason of the failure of any condition precedent under
Section 8(a) above (unless the failure results primarily from the Buyer itself
breaching any representation, warranty, or covenant contained in this
Agreement); and
(iv) Parent may terminate this Agreement by giving written notice
to the Buyer at any time prior to the Closing (A) in the event the Buyer has
breached any representation, warranty, or covenant contained in this Agreement
in any material respect, Parent has notified the Buyer of the breach, and the
breach has continued without cure for a period of thirty (30) days after the
notice of breach, or (B) if the Closing shall not have occurred on or before
November 30, 2002, by reason of the failure of any condition precedent under
Section 8(b) above (unless the failure results primarily from Parent or the
Company breaching any representation, warranty, or covenant contained in this
Agreement).
(b) EFFECT OF TERMINATION. If any Party terminates this Agreement
pursuant to Section 10(a) above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
(except for any liability of any Party then in breach); provided that the
confidentiality provisions contained in Section 6(d) above shall survive
termination.
11. MISCELLANEOUS.
(a) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Closing without the prior written approval of each
of the other Parties; PROVIDED that any Party may make any public disclosure it
believes in good faith is required by applicable law or any listing or trading
agreement concerning its publicly-traded securities (in which case the
disclosing Party will use reasonable efforts to advise the other Parties prior
to making the disclosure but such other Party's written approval will not be
necessary).
44
(b) NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
(c) ENTIRE AGREEMENT. This Agreement (including the Exhibits referred to
herein and the side letters entered into among the Parties on the date hereof)
constitutes the entire agreement among the Parties and supersedes any prior
understandings, agreements, or representations by or among the Parties, written
or oral, to the extent they have related in any way to the subject matter
hereof.
(d) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of his
or its rights, interests, or obligations hereunder without the prior written
approval of the Buyer and the Company; PROVIDED that the Buyer may (i) assign
any or all of its rights and interests hereunder to one or more of its
Affiliates or to any lender providing financing for the transactions
contemplated hereby as security (including any refinancings thereof), and (ii)
designate one or more of its Affiliates to perform its obligations hereunder (in
any or all of which cases the Buyer nonetheless shall remain responsible for the
performance of all of its obligations hereunder).
(e) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) HEADINGS. The Section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (i) hand
delivered, (ii) sent by a nationally recognized overnight courier for next
business day deliver, or (iii) sent by confirmed facsimile transmission as
follows:
If to Parent at anytime or the Company after Closing:
Metromedia International Group, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxx Raysman Xxxxxxxxx Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
45
Attention: Xxxx Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Company prior to the Closing:
Snapper, Inc.
000 Xxxxx Xxxxxx
XxXxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Buyer:
Simplicity Manufacturing, Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx Xxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxxxxx Hyatt & Xxxxxx, P.C.
000 00xx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
The date of giving of any such notice shall be as follows: if by hand delivery,
on the date of delivery; if by courier service, on the next business day after
delivery to the overnight courier service if by facsimile, on the date of
confirmed facsimile transmission or, if such day is not a business day, on the
next business day thereafter. Any Party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other Parties notice in the manner herein set forth.
(h) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of
New York without giving effect
to any choice 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.
(i) AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer, Parent and the Company. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or
46
subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
(j) SEVERABILITY. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) EXPENSES. Each of the Buyer, Parent and the Company will bear its own
costs and expenses (including legal fees and expenses) incurred in connection
with this Agreement and the transactions contemplated hereby.
(l) CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
(m) INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
SMI SNP, INC.
By: /s/ Xxxxx Xxxx
----------------------------------------
Xxxxx Xxxx
Chief Executive Officer
METROMEDIA INTERNATIONAL GROUP, INC.
By: /s/ Xxxxx Xxxx
----------------------------------------
Xxxxx Xxxx
Chief Financial Officer
SNAPPER, INC.
By: /s/ Xxxxx Xxxxxxxxxxx
----------------------------------------
Xxxxx Xxxxxxxxxxx
President and Chief Executive Officer
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