Exhibit 2.2
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is made and entered into as
of this ___ day of March, 2001, by and between CPM Acquisition Corp., a Delaware
corporation ("Buyer") and Consolidated Process Machinery, Inc., a California
corporation and Debtor and Debtor in Possession ("Seller") under a case (the
"Case") in the United States Bankruptcy Court for the Middle District of Florida
(the "Bankruptcy Court").
RECITALS
A. Seller is engaged in the manufacture of process machinery and other
equipment utilized primarily in the agricultural and food producing /
processing industries (the "Business").
B. Seller wishes to sell to Buyer substantially all the assets it uses in
connection with the Business at the price and on the other terms and
conditions specified in detail below and Buyer wishes to so purchase and
acquire such assets from Seller.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Transfer of Assets
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1.1 Purchase and Sale of Assets. On the Closing Date, as hereinafter
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defined, in consideration of the covenants, representations and obligations of
Buyer hereunder, and subject to the conditions hereinafter set forth, Seller
shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall
purchase from Seller all of Seller's right, title and interest as of the Closing
Date in and to the following assets, wherever located (collectively, the
"Property"):
1.1.1 Leases and Contracts. Seller's right, title and interest (i) as
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lessee under the real property lease or leases described on Exhibit "A-1 " to
this Agreement (collectively, the "Real Property Leases"), (ii) as lessee under
those equipment, personal property and intangible property leases, rental
agreements, licenses, contracts, agreements and similar arrangements described
on Exhibit "A-2" to this Agreement (collectively, the "Other Leases"), and (iii)
as a party to those other contracts, leases, orders, purchase orders, licenses,
contracts, agreements and similar arrangements described on Exhibit "A-3"
(collectively, the "Other Contracts" and together with the Other Leases, the
"Other Leases and Contracts").
1.1.2 Real Property and Improvements. Seller's fee simple ownership
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interest in that certain real property described in Exhibit "A-4" and all
improvements located thereon (collectively, the "Real Property"), but in all
events only to the extent, if any, of Seller's interest in the same
(collectively, the "Improvements"). Specifically excluded herein is real
property of Seller located at Aurora, Colorado and Hasselholm, Sweden, none of
which is utilized in the operation of the Business.
1.1.3 Personal Property. All of those items of equipment and tangible
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personal property owned or leased by Seller and used in the Business, including,
without limitation, those
items of equipment and other personal property listed in Exhibit "B" attached to
this Agreement and any other tangible personal property acquired or leased by
Seller after the date hereof but prior to the Closing Date exclusively in
connection with the Business (collectively, the "Personal Property"). As used in
this Agreement, the Personal Property shall not include the Inventory.
1.1.4 Intangible Property. All intangible personal property owned or
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held by Seller and used exclusively in connection with the Business, but in all
cases only to the extent of Seller's interest therein and only to the extent
transferable, together with a copy of all books, records and like items
pertaining exclusively to the Business (collectively, the "Intangible
Property"), including, without limitation, the names "California Pellet Mill,"
"Xxxxxxx Champion" and such other names and items identified on Exhibit "C"
hereto. As used in this Agreement, Intangible Property shall in all events
exclude, (i) any materials containing privileged communications or information
about employees, disclosure of which would violate an employee's reasonable
expectation of privacy and any other materials which are subject to attorney-
client or any other privilege, (ii) Seller's corporate books and records
relating to its organization and existence, and (iii) Seller's books and records
relating to indebtedness owing by Seller.
1.1.5 Receivables. All accounts receivable arising out of the
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operation of the Business and, subject to Section 1.2, all causes of action
relating or pertaining to the foregoing (collectively, the "Receivables").
1.1.6 Inventory. All supplies, goods, materials, work in process,
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inventory and stock in trade owned by Seller exclusively for use or sale in the
ordinary course of the Business (collectively, the "Inventory").
1.1.7 Stock. All stock in the following subsidiaries: CPM Europe
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S.A., CPM Europe B.V., CPM Europe Ltd., CPM Pacific (Private) Ltd., and
California Pellet Mill Europe Ltd. (the "Purchased Subsidiaries").
1.2 Excluded Assets. Notwithstanding anything to the contrary in this
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Agreement, the Property shall not include (i) those items excluded pursuant to
the provisions of Section 1.1 above; (ii) all cash, cash equivalents and
marketable securities (including cash, cash equivalents and marketable
securities owned by the Purchased Subsidiaries); (iii) Inventory transferred,
used or sold by Seller in the ordinary course of the Business prior to the
Closing Date; (iv) any lease, rental agreement, contract, agreement, license or
similar arrangement ("Contracts") terminated or expired prior to the Closing
Date in accordance with its terms or in the ordinary course of the Business; (v)
any right, property or asset listed on Exhibit "D" hereto; (vi) all preference
or avoidance claims and actions of Seller, including, without limitation, any
such claims and actions arising under Sections 544, 547, 548, 549, and 550 of
the United States Bankruptcy Code; (vii) Seller's rights under this Agreement
and all cash and non-cash consideration payable or deliverable to Seller
pursuant to the terms and provisions hereof; or (viii) insurance proceeds,
claims and causes of action with respect to or arising in connection with (A)
any Contract which is not assigned to Buyer at the Closing, or (B) any item of
tangible or intangible property not acquired by Buyer at the Closing; and (ix)
the business, equity interest, and all of the assets of the Seller and its
subsidiaries not directly utilized in the operations of the Business, which
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include, but is not limited to, General Combustion Corporation, Thermotech
Systems, Equipment Services Group, Inc., Bituma Corporation, Bituma Stor Inc.,
CPM Brazil, Inc., Silver Weibull A.B. and Gumaco, Inc.
1.3 Instruments of Transfer. The sale, assignment, transfer, conveyance
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and delivery of the Property to Buyer and the assumption of liabilities provided
herein by Buyer shall be made by assignments, xxxx of sale, and other
instruments of assignment, transfer and conveyance provided for in Section 3
below and such other instruments as may reasonably be requested by Buyer or
Seller. None of the foregoing documents shall increase in any material way the
burdens imposed by this Agreement upon Seller or Buyer.
2. Consideration; Deposit Escrow; Working Capital Escrow.
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2.1 Purchase Price.
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2.1.1 The cash consideration to be paid by Buyer to Seller for the
Property (the "Purchase Price") shall be $52,000,000.
2.1.2 Concurrently with the mutual execution and delivery of this
Agreement (the date of such mutual execution and delivery is sometimes referred
to herein as the "Execution Date"), Buyer shall deposit into escrow (the
"Deposit Escrow") with the law firm of Xxxxxx Xxxxx and Xxxxxxxxx P.A. (the
"Deposit Escrow Holder") $5,000,000 (the "Deposit") in immediately available,
good funds (funds delivered in this manner are referred to herein as "Good
Funds"), pursuant to joint escrow instructions to be delivered to and
acknowledged by the Deposit Escrow Holder on or before the Execution Date. Such
escrow instructions shall include the provisions set forth in this Section
2.1.2. Upon receipt of the Deposit, the Deposit Escrow Holder shall immediately
deposit the Deposit into an interest-bearing account. The Deposit shall become
nonrefundable upon the earlier of (x) the entry of the Approval Order following
the hearing on the Sale Motion (as such terms are defined in Section 8.4.2
below), or (y) the termination of the transaction contemplated by this Agreement
by reason of Buyer's material default (a "Buyer Default Termination"). At the
Closing, the Deposit (and any interest accrued thereon) shall be delivered to
Seller and credited toward payment of the Purchase Price in the manner specified
in Section 2.1.3 below. In the event the Deposit becomes non-refundable by
reason of a Buyer Default Termination, Deposit Escrow Holder shall immediately
disburse the Deposit and all interest accrued thereon to Seller to be retained
by Seller for its own account. If the transactions contemplated herein terminate
by reason of (A) Seller's material default hereunder, (B) the failure of a
condition to Buyer's obligations, or (C) the consummation of a sale to a third
party as described in Section 8.4.1 below, the Deposit Escrow Holder shall
return to Buyer the Deposit (together with all interest thereon). The Deposit
Escrow Holder's escrow fees and charges shall be paid one-half by Seller and
one-half by Buyer.
2.1.3 On the Closing Date, Buyer shall (i) pay and deliver to Seller,
by wire transfer in Good Funds, the Purchase Price less the Deposit (and
interest accrued thereon) and less the Working Capital Escrow Amount (as defined
in Section 2.1.4, below), and (ii) instruct the Deposit Escrow Holder to deliver
the Deposit (and any interest accrued thereon) to Seller, by wire transfer of
Good Funds.
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2.1.4 Notwithstanding anything to the contrary in this Agreement,
Buyer and Seller agree that at the Closing, Seller shall deposit (via diversion
of a portion of the Purchase Price otherwise due at Closing) into escrow (the
"Working Capital Escrow") with Fleet Bank, N.A. or any other escrow agent or
company reasonably acceptable to both parties (the "Working Capital Escrow
Holder") $l,000,000 (the "Working Capital Escrow Amount") in Good Funds,
pursuant to a Working Capital Escrow Agreement (the "Working Capital Escrow
Agreement") by and among Buyer, Seller and the Working Capital Escrow Agent, and
substantially in the form attached hereto as Exhibit "E." Upon receipt of the
Working Capital Escrow Amount, the Working Capital Escrow Holder shall
immediately deposit the Working Capital Escrow Amount into an interest-bearing
account. The Working Capital Escrow Amount shall be held until such time as the
Modified Working Capital Statement (as defined in Section 2.3.1 hereof) is final
and binding (the "Working Capital Escrow Period"), and shall be used solely as a
source of payment to satisfy Seller's obligation, if any, to pay the Buyer
Closing Adjustment (as defined in Section 2.3.2) to Buyer. Such Working Capital
Escrow Amount shall otherwise be administered and released during the Working
Capital Escrow Period as specifically provided for herein and in the Working
Capital Escrow Agreement.
2.2 Assumed Liabilities. Buyer shall, effective as of the Closing Date,
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assume and perform all liabilities accruing under the Real Property Leases and
under the Other Leases and Contracts on and after the Closing Date and or
otherwise required to be performed with respect to the property on or after the
Closing Date ("Assumed Liabilities"); provided that Buyer shall pay all cure
amounts owing under any of the Real Property Leases and Other Leases and
Contracts as of the Closing which the Bankruptcy Court may order to be paid as a
condition to Seller's assumption and assignment of any Real Property Lease or
Other Leases or Contracts ("Cure Amounts"); provided, however, that all such
Cure Amounts shall reduce the purchase price on a dollar for dollar basis; and
provided, further, that Buyer shall indemnify, defend (with counsel reasonably
satisfactory to Seller), protect, and save and hold Seller harmless from and
against any and all claims or demands asserted by any person or entity in
connection with the Assumed Liabilities relating to or arising out of post-sale
conduct by Buyer. Other than the liabilities and obligations of Seller expressly
assumed by Buyer hereunder, Buyer is not assuming and shall not be liable for
any liabilities or obligations of Seller other than trade payables arising in
the ordinary incurred after September 13, 2000 and outstanding on the Closing
Date.
2.3 Post-Closing Purchase Price Adjustment. The Purchase Price shall be
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subject to adjustment as provided in this Section 2.3:
2.3.1 Buyer shall, within forty-five (45) days of the Closing Date,
prepare and deliver to Seller a statement of Modified Working Capital as of the
Closing Date (the "Modified Working Capital Statement"). For purposes of this
Section 2.3, "Modified Working Capital" shall mean: (i) all current assets of
the Business in the United States as of the Closing Date, determined in
accordance with generally accepted accounting principles in effect in the United
States (except the Excluded Assets), plus (ii) the aggregate of all current
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assets of the Purchased Subsidiaries (except the Excluded Assets) as of the
Closing Date, determined in each case in accordance with generally accepted
accounting principles in effect in the jurisdictions of
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organization of the Purchased Subsidiaries, minus (iii) all Assumed Liabilities
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(except the Excluded Assets), minus (iv) the aggregate of all current
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liabilities of the Purchased Subsidiaries as of the Closing Date, determined in
accordance with generally accepted accounting principles in effect in the
jurisdictions of organization of the Purchased Subsidiaries, including, without
limitation, income or similar taxes in respect of any period prior to the
Closing, minus (v) any prorations called for by Section 3.5 hereof, minus (vi)
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any long-term debt of the Purchased Subsidiaries (taken in the aggregate) on the
Closing Date, determined in accordance with generally accepted accounting
principles in effect in the jurisdictions of organization of the Purchased
Subsidiaries. The parties acknowledge that the Modified Working Capital as of
December 31, 2000 is $18,900,000.
2.3.2 If the Modified Working Capital Statement reflects Modified
Working Capital on the Closing Date of less than $18,900,000, then Buyer shall
be entitled to payment from Seller in the amount of such short fall (the "Buyer
Closing Adjustment") in immediately available funds. Any Buyer Closing
Adjustment shall be made first by the Escrow Agent from the Working Capital
Escrow. If and to the extent the Buyer Closing Adjustment is greater than, and
therefore entirely depletes the Working Capital Escrow, any excess unpaid
portion of the Buyer Closing Adjustment shall be paid by Seller and, until so
paid, shall constitute an administrative expense claim in the Case with priority
over all other administrative expense claims in the Case.
2.3.3 If the Modified Working Capital Statement reflects Modified
Working Capital of greater than $18,900,000, then Seller shall be entitled to
payment in the amount of such excess (the "Seller Closing Adjustment") in
immediately available funds, provided, however, that under no circumstances
shall Buyer be obligated to make payment in respect of the Seller Closing
Adjustment in excess of $500,000.
2.3.4 Seller may object to Buyer's determination of the Modified
Working Capital as contained in the Modified Working Capital Statement,
provided, however, that any such objection must be based upon a claim that the
Closing Statement (i) contains mathematical errors, (ii) was not prepared in
accordance with Section 2.3.1 or (iii) in Seller's good faith determination,
there is a substantive discrepancy in the Modified Working Capital Statement.
Any such objection must be made by delivery of a written statement of objections
(stating the basis of the objections with reasonable specificity) to Buyer
within fifteen (15) days following delivery of the Modified Working Capital
Statement. If Seller makes such objection, Buyer and Seller shall seek in good
faith to resolve such differences within twenty (20) days following the delivery
of such objections. During such time, if Buyer disagrees with Seller's
objections, it shall state the basis of such disagreement with reasonable
specificity. If Seller does not so object to the Modified Working Capital
Statement within such 15-day period, the Modified Working Capital Statement
shall be considered final and binding upon the parties.
2.3.5 In the event Buyer and Seller are unable to resolve a dispute
or disagreement set forth in a written objection pursuant to Section 2.3.4, then
either party may elect, by written notice to the other party, to have all such
disputes or disagreements resolved by an accounting firm of recognized national
standing acceptable to Buyer and Seller and not then employed by either Seller
or Buyer (the "Selected Accounting Firm"). If Buyer and Seller
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cannot agree upon the accounting firm to serve as the Selected Accounting Firm,
then the New York office of KPMG (the "Default Accounting Firm") shall serve as
the Selected Accounting Firm. The Selected Accounting Firm shall make a final
and binding resolution of the disputes or disagreements, and the Closing
Adjustment as finally determined by the Selected Accounting Firm shall be deemed
acceptable to Buyer and Seller for all purposes of this Agreement. The Selected
Accounting Firm shall be instructed that, in making its final and binding
resolution, it must select either the position of the Buyer in its entirety or
the position of the Seller in its entirety. No appeal from such determination
shall be permitted. The Selected Accounting Firm shall be instructed to use
every reasonable effort to perform its services within thirty (30) days after
submission of the Closing Statement to it, and in any case, as soon as
practicable after such submission. The costs and expenses for the services of
the Selected Accounting Firm shall be borne by the non-prevailing party.
3. Closing Transactions.
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3.1 Closing. The Closing of the transactions provided for herein (the
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"Closing") shall take place at the offices of Xxxxxx Xxxxx and Xxxxxxxxx, 000
Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000.
3.2 Closing Date. The Closing shall be held within five days after
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satisfaction or waiver of the conditions to closing in Section 4 (the "Closing
Date") but in no event later than June 15, 2001 (the "Outside Date").
Alternatively, the parties may mutually agree to an extended Closing Date. Until
this Agreement is either terminated or the parties have agreed upon an extended
Closing Date, the parties shall diligently continue to work to satisfy all
conditions to Closing.
3.3 Seller's Deliveries to Buyer at Closing. On the Closing Date, subject
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to satisfaction of the conditions precedent set forth in Section 4.1, Seller
shall make the following deliveries to Buyer:
3.3.1 An Assignment and Assumption Agreement in form to be negotiated
by the parties, duly executed by Seller, pursuant to which Seller assigns the
Real Property Leases and the Other Leases and Contracts (the "Assignment
Agreement"); provided, however, that the Assignment Agreement need not be
delivered by Seller if the Bankruptcy Court has issued an order, in form and
substance satisfactory to Buyer, prior to the Closing Date authorizing the
assumption and assignment of the Real Property Leases and the Other Leases and
Contracts.
3.3.2 A xxxx of sale, duly executed by Seller, in the form and on the
terms of the xxxx of sale attached hereto as Exhibit "F," pursuant to which
Seller transfers the Property other than the Real Property Leases and the Other
Leases and Contracts to Buyer (the "Xxxx of Sale").
3.3.3 A xxxx of sale, duly executed by Seller, in a form reasonably
requested by Buyer, pursuant to which Seller specifically transfers the
Intangible Property (the "Intangible Property Xxxx of Sale").
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3.3.4 A deed of trust, reasonably satisfactory in form and substance
to Buyer ("Deed of Trust"), duly executed by Seller, in respect of the Real
Property.
3.3.5 The Working Capital Escrow Agreement, duly executed by Seller
and Working Capital Escrow Holder.
3.4 Buyer's Deliveries to Seller at Closing. On the Closing Date, subject
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to satisfaction of the conditions precedent set forth in Section 4.2, Buyer
shall make or cause the following deliveries to Seller:
3.4.1 That portion of the Purchase Price to be delivered by Buyer
directly to Seller at the Closing under Section 2.1 (and Buyer shall cause
Deposit Escrow Holder to deliver the Deposit and accrued interest to Seller).
3.4.2 The Assignment Agreement, duly executed by Buyer; provided,
however, that the Assignment Agreement need not be delivered by Buyer if the
Bankruptcy Court has issued an order, in form and substance satisfactory to
Buyer, prior to the Closing Date authorizing the assumption and assignment of
the Real Property Leases and the Other Leases and Contracts.
3.4.3 The Working Capital Escrow Agreement, duly executed by Buyer
and Working Capital Escrow Holder.
3.5 Prorations. Rent, current taxes and other items of expense (including,
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without limitation, any prepaid insurance under the Real Property Leases or
Other Leases and Contracts, or any of them) and income relating to or
attributable to the Property and/or the Real Property Leases or the Other Leases
and Contracts shall be prorated between Seller and Buyer as of the Closing Date.
All obligations due in respect of periods prior to Closing shall be paid in full
or otherwise satisfied by Seller and all obligations due in respect of periods
after Closing shall be paid in full or otherwise satisfied by Buyer. Rent shall
be prorated on the basis of a thirty (30) day month. Buyer shall pay to Seller
in cash on the Closing Date the amount of any security or similar deposits with
the landlords or other contracting parties under the Real Property Leases and
the Other Leases and Contracts and the amount of any other deposits made by
Seller relating to the Real Property or the property to which the Other Leases
and Contracts relate.
3.6 Sales, Use and Other Taxes. Any sales, purchases, transfer, fixed
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asset, stamp, documentary stamp, use or similar taxes which may be payable by
reason of the sale of the Property under this Agreement or the transactions
contemplated herein shall be borne and timely paid by Buyer, and Buyer shall
indemnify, defend (with counsel reasonably satisfactory to Seller), protect, and
save and hold Seller harmless from and against any and all claims, charges,
interest or penalties assessed, imposed or asserted in relation to any such
taxes.
3.7 Possession. Right to possession of the Property shall transfer to
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Buyer on the Closing Date. Seller shall transfer and deliver to Buyer on the
Closing Date such keys, lock and safe combinations and other similar items as
Buyer shall require to obtain immediate and full occupation and control of the
Property, and shall also make available to Buyer at their then
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existing locations the originals of all documents in Seller's possession that
are required to be transferred to Buyer by this Agreement.
4. Conditions Precedent to Closing.
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4.1 Conditions to Seller's Obligations. Seller's obligation to make the
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deliveries required of Seller at the Closing Date shall be subject to the
satisfaction or waiver by Seller of each of the following conditions.
4.1.1 All of the representations and warranties of Buyer contained
herein shall continue to be true and correct at the Closing in all material
respects, all covenants and obligations to be performed by Buyer prior to the
Closing shall have been performed in all material respects and Buyer shall have
certified the foregoing to Seller in writing.
4.1.2 Buyer shall have executed and delivered to Seller the Working
Capital Escrow Agreement, the Assignment Agreement and each other document
reasonably requested by Seller pursuant to Section 1.3.
4.1.3 Seller shall have received the total Purchase Price (less the
Working Capital Escrow Amount) in immediately available funds.
4.1.4 Buyer shall have delivered to Seller appropriate evidence of
all necessary corporate action by Buyer in connection with the transactions
contemplated hereby, including, without limitation: (i) certified copies of
resolutions duly adopted by Buyer's directors approving the transactions
contemplated by this Agreement and authorizing the execution, delivery, and
performance by Buyer of this Agreement; and (ii) a certificate as to the
incumbency of officers of Buyer executing this Agreement and any instrument or
other document delivered in connection with the transactions contemplated by
this Agreement.
4.1.5 Seller shall have determined that it will not incur any
liability under the Worker Adjustment and Retraining Notification Act in
connection with the consummation of this transaction.
4.1.6 All applicable waiting periods relating to the Xxxx-Xxxxx-
Xxxxxx Antitrust Improvements Act of 1976 shall have expired or been terminated
and any proceedings that may have been filed or instituted thereunder shall have
been satisfactorily concluded.
4.1.7 No action, suit or other proceedings shall be pending before
any court, tribunal or governmental authority seeking or threatening to restrain
or prohibit the consummation of the transactions contemplated by this Agreement,
or seeking to obtain substantial damages in respect thereof, or involving a
claim that consummation thereof would result in the violation of any law, decree
or regulation of any governmental authority having appropriate jurisdiction.
4.1.8 The Bankruptcy Court shall have entered the Procedure Order in
accordance with Section 8.4.1 below and the Approval Order as contemplated by
and defined in
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Section 8.4.2 below and the Approval Order shall not have been stayed, modified,
terminated or rescinded as of the Closing Date.
4.2 Conditions to Buyer's Obligations. Buyer's obligation to make the
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deliveries required of Buyer at the Closing shall be subject to the satisfaction
or waiver by Buyer of each of the following conditions:
4.2.1 All representations and warranties of Seller contained herein
shall continue to be true and correct at the Closing in all material respects,
all covenants and obligations to be performed by Seller prior to the Closing
shall have been performed in all material respects and Seller shall have
certified the foregoing to Buyer in writing.
4.2.2 Seller shall have executed and delivered to Buyer the Working
Capital Escrow Agreement, the Assignment Agreement, the Xxxx of Sale, the
Intangible Property Xxxx of Sale and each other document reasonably requested by
Buyer pursuant to Section 1.3.
4.2.3 All applicable waiting periods relating to the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 shall have expired or been
terminated and any proceedings that may have been filed or instituted thereunder
shall have been satisfactorily concluded.
4.2.4 No action, suit or other proceedings shall be pending before
any court, tribunal or governmental authority seeking or threatening to restrain
or prohibit the consummation of the transactions contemplated by this Agreement,
or seeking to obtain substantial damages in respect thereof, or involving a
claim that consummation thereof would result in the violation of any law, decree
or regulation of any governmental authority having appropriate jurisdiction.
4.2.5 The Bankruptcy Court shall have entered the Procedure Order in
accordance with Section 8.4.1 below and the Approval Order in accordance with
Section 8.4.2 below and the Approval Order shall not have been stayed, modified,
terminated or rescinded as of the Closing Date.
4.2.6 The transactions contemplated by this Agreement shall have been
consummated by the Outside Date.
4.3 Termination. If any of the above conditions is neither satisfied nor
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waived on or before the date by which the condition is required to be satisfied,
the party who is not then in default hereunder may terminate this Agreement by
delivering to the other written notice of termination. Any waiver of a condition
shall be effective only if such waiver is stated in writing and signed by the
waiving party; provided, however, that the consent of a party to the Closing
shall constitute a waiver by such party of any conditions to Closing not
satisfied as of the Closing Date.
5. Seller's Representations and Warranties. Seller hereby makes the following
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representations and warranties to Buyer:
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5.1 Validity of Agreement. Upon obtaining the Approval Order, this
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Agreement, and each other document ancillary to this Agreement to which Seller
is a party shall constitute the valid and binding obligation of Seller
enforceable in accordance with its terms.
5.2 Organization, Standing, Power and Authority. Seller is a corporation
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duly organized, validly existing and in good standing under the laws of the
State of Florida, and each of the Purchased Subsidiaries is an entity duly
organized and validly existing an in good standing under the laws of the country
of its organization. Seller and each of the Purchased Subsidiaries has all
requisite corporate or company power and authority to own, lease and operate its
properties, to carry on its business as now being conducted, and Seller has,
subject to the applicable provisions of bankruptcy law and to Seller's obtaining
the Approval Order, all corporate power and authority to execute, deliver and
perform this Agreement and all writings relating hereto. Seller has delivered,
or has caused to be delivered, to Buyer complete and correct copies of each of
the Seller's and each Purchased Subsidiaries' organizational documents,
including all amendments thereto, as in effect as of the date of this Agreement.
5.3 Financial Statements. Seller has heretofore delivered to Buyer true
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and correct copies of its financial statements (balance sheet and income
statement) for the Business, including Purchased Subsidiaries, as of December
31, 2000 (collectively, the "Financial Statements"). Except as set forth in
Schedule 5.3, the Financial Statements (a) fairly present in all material
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respects, the financial condition and the results of operations of Seller as of
the dates and for the periods indicated, and (b) have been prepared in
accordance with generally accepted accounting principles consistently applied
over the periods referenced. Seller has made available to Buyer all books and
records which relate to the business of Seller, and such books and ledgers are
true and complete in all material respects. The Financial Statements have been
derived from and are consistent with the books and records.
5.4 Absence of Certain Changes or Events. Except as set forth in Schedule
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5.4 or as otherwise contemplated by this Agreement, to Seller's knowledge, since
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December 31, 2000, (i) Seller has operated the Business, including, without
limitation, with respect to the management of Inventory and Receivables, in the
ordinary course, (ii) each of the Purchased Subsidiaries has operated its
business (the "Purchased Subsidiaries' Business"), in the ordinary course, and
(iii) there have occurred no changes or events which, individually or in the
aggregate, would have a material adverse effect on the business, future
prospects, properties, financial condition or results of operations of Seller or
of any of the Purchased Subsidiaries or the ability of Seller to consummate the
transactions contemplated hereby ("Material Adverse Effect").
5.5 No Conflicts or Violations. Upon obtaining the Approval Order, the
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execution and delivery of this Agreement, the consummation of the transactions
herein contemplated, and the performance of, fulfillment of and compliance with
the terms and conditions hereof by Seller do not and will not: (i) conflict with
or result in a breach of the organizational documents of any of the Seller or
the Purchased Subsidiaries, (ii) violate any statute, law, rule or regulation,
or any order, writ, injunction or decree of any court or governmental authority;
or (iii) violate or conflict with or constitute a default under any agreement,
instrument or writing of any nature to which either the Seller or any of the
Purchased Subsidiaries is a party or by which and of them or the Property may be
bound.
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5.6 Title to Personal Property. Except for the liens set forth in Schedule
-------------------------- --------
5.6 ("Permitted Liens"), Seller has good and valid title to all the Personal
---
Property owned by it, and a valid and enforceable right to use all Personal
Property leased by or licensed to it, which is used or held for use in the
conduct of the Business as conducted prior to the date hereof, in each case,
free and clear of all liens, imperfections of title or encumbrances of any
nature whatsoever. Seller has delivered to Buyer true and complete copies of all
Other Leases and Contracts.
5.7 Title to Real Property Leases; Real Property.
--------------------------------------------
5.7.1 Seller has a good and valid leasehold interest in all Real
Property Leases, and each of the Purchased Subsidiaries, as applicable, has a
good and valid leasehold interest in all the real property leases listed on
Schedule 5.7.1 hereto (the "Purchased Subsidiaries' Real Property Leases").
--------------
Exhibit A-1 contains a complete and accurate list and description of all Real
-----------
Property Leases, and Schedule 5.7.1 contains a complete and accurate list and
--------------
description of all Purchased Subsidiaries' Real Property Leases. Each of the
Real Property Leases and the Purchased Subsidiaries' Real Property Leases is in
full force and effect and is valid, binding and enforceable in accordance with
its terms. Seller and each of the Purchased Subsidiaries, as applicable, enjoys
quiet possession of all real property subject to the Real Property Leases or the
Purchased Subsidiaries' Real Property Leases, as the case may be, and Seller has
delivered, or has caused to be delivered, to Buyer true and complete copies
thereof.
5.7.2 Exhibit A-4 hereto contains a complete and accurate list and
-----------
description of all Real Property. Schedule 5.7.2 hereto contains a complete and
--------------
accurate list and description of all real property the fee simple ownership of
which, and of all improvements located thereon, resides in one of the Purchased
Subsidiaries (the "Purchased Subsidiaries' Real Property") (the Real Property
and the Purchased Subsidiaries' Real Property herein together referred to as the
"Owned Real Property").
5.7.3 Seller and each of the Purchased Subsidiaries, as applicable,
has good, marketable and insurable fee simple title to its Owned Real Property
free and clear of any liens, except Permitted Liens. Seller has previously
delivered, or has caused to be delivered, to Buyer: (a) a complete and correct
copy of each deed or other instrument or evidence of title relating to the Owned
Real Property; (b) a complete and correct copy of each title insurance policy in
Seller's or any Purchased Subsidiaries' possession insuring title to the Owned
Real Property; and (c) a true and correct copy of each survey in Seller's or any
Purchased Subsidiaries' possession of the Owned Real Property.
5.7.4 Seller and each of the Purchased Subsidiaries, as applicable,
has full legal and practical access to all of its Owned Real Property, and all
easements, rights of way, and real property licenses relating thereto have been
properly recorded in the appropriate public recording offices. To Seller's
knowledge, the Owned Real Property includes all the Real Property, easements,
rights of way, and other Real Property interests necessary to conduct the
Business and operations of Seller as now conducted or, as applicable, all the
Purchased Subsidiaries' Real Property, easements, rights of way, and other
Purchased Subsidiaries' Real Property interests necessary to conduct the
Purchased Subsidiaries' Business as now conducted. To Seller's
11
knowledge, none of the Improvements, or any improvements to Purchased
Subsidiaries' Real Property ("Purchased Subsidiaries' Improvements"), encroach
upon adjoining real property, and all such Improvements and Purchased
Subsidiaries' Improvements, together with all fixtures, are constructed and are
operated and used in conformance with all "set back" lines, easements,
covenants, restrictions and all applicable building, fire, zoning, health and
safety laws and codes. To Seller's knowledge, all Improvements and Purchased
Subsidiaries' Improvements are in good and technically sound operating
condition, have no latent structural mechanical or other defects of material
significance, are reasonably suitable for the purposes for which they are being
used and each has adequate rights of ingress and egress, utility service for
water and sewer, telephone, electric and/or gas, and sanitary service for the
conduct of the Business or Purchased Subsidiaries' Business, as the case may be,
as presently conducted. Other than the Case, there is no pending or, to the best
knowledge of Seller, threatened condemnation or other proceeding or action of
any kind relating to the Real Property.
5.8 Inventory. All Inventory will, on the Closing Date, consist of items
---------
that are good and merchantable and of a quantity and quality that are usable or
saleable in the ordinary course of the Business consistent with past practices
at prices at least equal to their value on Seller's books and records. All work
in process and finished goods in the inventory and stock in trade owned by any
of the Purchased Subsidiaries (the "Purchased Subsidiaries' Inventory")
exclusively for use or sale in the ordinary course of such Purchased
Subsidiaries' Business have been produced in compliance with Seller's and such
of the Purchased Subsidiaries' quality control procedures applicable to the
Foreign Subsidiaries' Business. Seller has good and marketable title to all
Inventory, and each of the Purchased Subsidiaries had good and marketable title
to all of its Purchased Subsidiaries' Inventory, free and clear of all liens,
except Permitted Liens.
5.9 Intellectual Property. All Intangible Property, together with all
---------------------
intangible personal property owned or held by any of the Purchased Subsidiaries
and used exclusively in connection with such Purchased Subsidiaries' Business
(collectively, the "Intellectual Property"), is set forth on Exhibit C. Except
---------
as set forth on Exhibit C, to Seller's knowledge: (a) Seller and each of the
---------
Purchased Subsidiaries, and each predecessor in title to any of them, has taken
all necessary actions and has not taken any improper actions such that its
right, title, and interest in its Intellectual Property as owner or, subject to
the terms of any applicable license, as licensee, as applicable, is valid,
enforceable, and uncontested, and is free and clear of all liens, of any third
party, except for Permitted Liens, and, except to the extent any of the
Intellectual Property is licensed to Seller or any of the Purchased
Subsidiaries, as the case may be, of licenser; (b) all computer software and
databases located at any of Seller's or the Purchased Subsidiaries' premises or
used in the Business or the Purchased Subsidiaries' Business, as the case may
be, are owned by or properly licensed to Seller or such of the Purchased
Subsidiaries, and all of Seller's or such of the Purchased Subsidiaries' uses of
such computer software and databases are authorized under such licenses, as
applicable; (c) all of Seller's right, title and interest in and to its
Intellectual Property, including computer software and databases and any
warranties therein, shall be assignable to Buyer at Closing, and upon such
assignment, Buyer shall receive complete and exclusive right, title, and
interest in and to all tangible and intangible property rights existing in such
Intellectual Property; and (d) there are no infringements, unlawful uses,
improper assignments, or defaults of any license or other agreement with respect
to the Intellectual Property in connection with the Business or the Purchased
Subsidiaries'
12
Business, neither Seller nor any of the Purchased Subsidiaries has received any
notice or demand alleging that it is in default of any license or other
agreement or that it is infringing upon any rights of any third party in its use
of the Intellectual Property, and no circumstances exist which reasonably could
be expected to adversely affect the validity, subsistence, or existence of the
Intellectual Property or Seller's or such of the Purchased Subsidiaries', as the
case may be, continued right to use the Intellectual Property.
5.10 Compliance with Laws. To Seller's knowledge, neither Seller nor any
--------------------
of the Purchased Subsidiaries is in violation of any applicable law, rule or
regulation ("Applicable Laws"), the violation of which could adversely affect
the Property, the Business, the Purchased Subsidiaries' Business, results of
operations, or conditions (financial or otherwise), and has received no
notification or communication from any governmental authority (i) asserting that
it is not in compliance with any of the statutes, regulations or ordinances that
such governmental authority enforces, or (ii) threatening to revoke any license,
franchise, permit or authorization of any governmental authority.
5.11 Capitalization.
--------------
5.11.1 The authorized capital stock of each of the Purchased
Subsidiaries is set forth on Schedule 5.11, and such capital stock is referred
-------------
to herein, collectively, as the "Capital Stock". All of issued and outstanding
shares of Capital Stock are duly and validly issued and outstanding and are
fully paid and nonassessable. A listing of all holders of outstanding and issued
Common Stock (the "Stockholders") and the amount of shares owned by each
Stockholder is set forth on Schedule 5.11. All options, the recipient of any
-------------
options, the grant date, exercise price, vesting and other material terms of any
such options are also described on Schedule 5.11.
-------------
5.11.2 Except as set forth in subsection (a) above, there are no
shares of capital stock or other equity securities of Purchased Subsidiaries
outstanding, and except as set forth in Schedule 5.11, there are no outstanding
-------------
options, warrants or rights to subscribe for, securities or rights convertible
into or exchangeable for, or contracts, commitments or arrangements by which
Seller or any of the Purchased Subsidiaries is or may be required to issue or
sell additional shares of any of the Purchased Subsidiaries.
5.12 Permits. To Seller's knowledge, each of Seller and the Purchased
-------
Subsidiaries has duly obtained and holds in full force and effect all consents,
authorizations, permits, licenses, orders or approvals of, and has made all
declarations and filings with, all federal, state, local or other governmental
or regulatory bodies that are material or necessary in or to the conduct of its
business (collectively, the "Permits"); all of the Permits have been duly
obtained and are in full force and effect; no violations are or have been
recorded in respect of any such Permit and no Proceeding (as defined herein) is
pending or, to the best knowledge of Seller, threatened to revoke, deny or
limit any such Permit.
5.13 Outstanding Commitments. To the best knowledge of Seller, neither
-----------------------
Seller nor any of the Purchased Subsidiaries is bound by any commitments for the
performance of services or delivery of products in excess of its ability to
provide such services or deliver such products
13
during the time available to satisfy such commitments and all outstanding
commitments for the performance of services or delivery of products were made on
a basis calculated to produce a profit under the circumstances prevailing when
such commitments were made.
5.14 Labor Matters: Employees.
------------------------
5.14.1 To Seller's knowledge, each of Seller and the Purchased
Subsidiaries is in compliance, in all material respects, with all federal,
state, local or other laws respecting employment and employment practices
(including, in the case of Seller, the Americans with Disabilities Act and the
Family and Medical Leave Act) employee benefits, terms and conditions of
employment, wages and hours, and nondiscrimination in employment, and has not
and is not engaged in any unfair labor practice.
5.14.2 In connection with the operations of the Business or the
Purchased Subsidiaries' Business, as applicable, to Seller's knowledge, neither
Seller nor any of the Purchased Subsidiaries is a party to, or subject to any
obligation, liability or commitment with respect to any written or oral
employment, compensation, consulting, severance pay or similar agreement other
than the agreements previously disclosed to Buyer.
5.14.3 Seller knows of no employee who intends to terminate his or
her employment with Seller prior to or following the Closing Date.
5.15 Environmental Matters.
---------------------
5.15.1 Except as set forth in Schedule 5.15, to Seller's knowledge:
-------------
(i) Each of Seller and the Purchased Subsidiaries is and
has been in material compliance with all applicable Environmental Laws (as
hereinafter defined), which compliance includes, but is not limited to, the
possession by it of all Permits required under applicable Environmental
Laws, and compliance with the terms and conditions thereof;
(ii) There are no Environmental Claims pending or, to the
knowledge of Seller, threatened against either Seller or any of the
Purchased Subsidiaries, or any person with respect to which any of them has
or may have retained or assumed partial or total liability for, either
contractually or by operation of law for which adequate reserves have not
been established in the Financial Statements; and
(iii) There are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without
limitation, the release, threatened release or presence of any Hazardous
Substance, that could form the basis of any Environmental Claim against
either Seller or any of the Purchased Subsidiaries or for which any of them
could be liable, except where such actions, activities, circumstances,
conditions, events or incidents will not have a Material Adverse Effect.
14
5.15.2 As used in this Agreement:
(i) "Environmental Claim" means any proceeding by any
person which may impose any environmental liability.
(ii) "Environmental Law" means any law or order of any
governmental authority relating to (A) the generation, treatment, storage,
disposal, use, handling, manufacturing, transportation or shipment of, or
(B) the environment or to emissions, discharges, releases or threatened
releases of, Hazardous Substances, into the environment, and includes,
without limitation, in the case of Seller, the Clean Air Act, 42 U.S.C. (S)
7401 et seq.; Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. (S) 9601 et seq.; Emergency Planning and Community
Right to Know Act, 42 U.S.C. (S) 11000 et seq.; Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C. (S) 136 et seq.; Clean Water Act,
33 U.S.C. (S) 1251 et seq.; Oil Pollution Act, 33 U.S.C. (S) 2701 et seq.;
Resource Conservation and Recover Act, 42 U.S.C. (S) 6901 et seq.; Safe
Water Drinking Act, 42 U.S.C. (S) 300f et seq.; Toxic Substance Control
Act, 15 U.S.C. (S) 2601 et seq.; and Occupational Safety and Health Act 29
U.S.C. (S) 651 et seq.
(iii) "Environmental Liability" means any proceeding or
liability (whether known or unknown, whether asserted or unasserted,
whether absolute or contingent, whether accrued or unaccrued, whether
liquidated or unliquidated, and whether due or to become due), arising out
of or based on any violation of or obligation under any Environmental Law,
(including, without limitation, liability for investigatory costs, clean up
costs, governmental response costs, natural resources damages, property
damages, personal injuries, death or penalties).
(iv) "Hazardous Substances" means (A) any petroleum or
petroleum products, radioactive materials or friable asbestos; (B) any
chemicals or other materials or substances which are now defined as or
included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes," "restricted hazardous
wastes," "toxic substances," or "toxic pollutants" under any Environmental
Law; and (C) pesticides.
5.16 Assets Sufficient to Operate Business. The Property constitutes all
-------------------------------------
of the assets necessary and sufficient to operate the Business as currently
operated by Seller.
5.17 Absence of Intercompany Debt. None of the Purchased Subsidiaries owe
----------------------------
any amounts to Seller or any affiliate of Seller other than Purchased
Subsidiaries.
6. Buyer's Representations and Warranties. Buyer hereby makes the following
--------------------------------------
representations and warranties to Seller:
15
6.1 Validity of Agreement. All action on the part of Buyer necessary for
---------------------
the authorization, execution, delivery and performance of this Agreement by
Buyer, including, but not limited to, the performance of Buyer's obligations
hereunder, has been duly taken. This Agreement, when executed and delivered by
Buyer, shall constitute the valid and binding obligation of Buyer enforceable in
accordance with its terms.
6.2 Organization. Standing and Power. Buyer is a corporation duly
--------------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has all requisite corporate power and authority to own, lease
and operate its properties, to carry on its business as now being conducted and
to execute, deliver and perform this Agreement and all writings relating hereto.
6.3 No Conflicts or Violations. The execution and delivery of this
--------------------------
Agreement, the consummation of the transactions herein contemplated, and the
performance of, fulfillment of and compliance with the terms and conditions
hereof by Buyer do not and will not: (i) conflict with or result in a breach of
the articles of incorporation or by-laws of Buyer; (ii) violate any statute,
law, rule or regulation, or any order, writ, injunction or decree of any court
or governmental authority; or (iii) violate or conflict with or constitute a
default under any agreement, instrument or writing of any nature to which Buyer
is a party or by which Buyer or its assets or properties may be bound.
6.4 Financing. Buyer has sufficient funds available to consummate the
---------
transactions contemplated hereby - THERE IS NO FINANCING CONTINGENCY WITH
RESPECT TO THIS TRANSACTION.
7. "AS IS" Transaction. BUYER HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT AS
------------------
OTHERWISE EXPRESSLY PROVIDED IN SECTION 5 ABOVE, SELLER MAKES NO REPRESENTATIONS
OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY MATTER
RELATING TO THE PROPERTY INCLUDING, WITHOUT LIMITATION, INCOME TO BE DERIVED OR
EXPENSES TO BE INCURRED IN CONNECTION WITH THE PROPERTY, THE PHYSICAL CONDITION
OF ANY PERSONAL PROPERTY COMPRISING A PART OF THE PROPERTY OR WHICH IS THE
SUBJECT OF ANY OTHER LEASE OR CONTRACT TO BE ASSUMED BY BUYER AT THE CLOSING,
THE ENVIRONMENTAL CONDITION OR OTHER MATTER RELATING TO THE PHYSICAL CONDITION
OF ANY REAL PROPERTY OR IMPROVEMENTS WHICH ARE THE SUBJECT OF ANY REAL PROPERTY
LEASE TO BE ASSUMED BY BUYER AT THE CLOSING, THE ZONING OF ANY SUCH REAL
PROPERTY OR IMPROVEMENTS, THE VALUE OF THE PROPERTY (OR ANY PORTION THEREOF),
THE TRANSFERABILITY OF PROPERTY, THE TERMS, AMOUNT, VALIDITY OR ENFORCEABILITY
OF ANY ASSUMED LIABILITIES, THE TITLE OF THE PROPERTY (OR ANY PORTION THEREOF)
THE MERCHANTABILITY OR FITNESS OF THE PERSONAL PROPERTY OR ANY OTHER PORTION OF
THE PROPERTY FOR ANY PARTICULAR PURPOSE, OR ANY OTHER MATTER OR THING RELATING
TO THE PROPERTY OR ANY PORTION THEREOF. WITHOUT IN ANY WAY LIMITING THE
FOREGOING, SELLER HEREBY DISCLAIMS ANY WARRANTY, EXPRESS OR IMPLIED, OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
16
PURPOSE AS TO ANY PORTION OF THE PROPERTY. BUYER FURTHER ACKNOWLEDGES THAT BUYER
HAS CONDUCTED AN INDEPENDENT INSPECTION AND INVESTIGATION OF THE PHYSICAL
CONDITION OF THE PROPERTY AND ALL SUCH OTHER MATTERS RELATING TO OR AFFECTING
THE PROPERTY AS BUYER DEEMED NECESSARY OR APPROPRIATE AND THAT IN PROCEEDING
WITH ITS ACQUISITION OF THE PROPERTY, EXCEPT FOR ANY REPRESENTATIONS AND
WARRANTIES EXPRESSLY SET FORTH IN SECTION 5, BUYER IS DOING SO BASED SOLELY UPON
SUCH INDEPENDENT INSPECTIONS AND INVESTIGATIONS. ACCORDINGLY, BUYER WILL ACCEPT
THE PROPERTY AT THE CLOSING "AS IS," "WHERE IS," AND "WITH ALL FAULTS."
8. Conduct and Transaction Prior to Closing.
----------------------------------------
8.1 Access to Records and Properties of Seller. From and after the date of
------------------------------------------
this Agreement until the Closing Date, Seller shall, upon reasonable advance
notice, afford to Buyer's officers, independent public accountants, counsel,
lenders, consultants and other representatives who shall be bound as
"Representatives" under the confidentiality agreements heretofore signed by
Buyer, reasonable access during normal business hours to the Property and all
records pertaining to the Property or the Business. Buyer, however, shall not be
entitled to access to any materials containing privileged communications or
information about employees, disclosure of which might violate an employee's
reasonable expectation of privacy. Buyer expressly acknowledges that nothing in
this Section 8.1 is intended to give rise to any contingency to Buyer's
obligations to proceed with the transactions contemplated herein.
8.2 Operation of Seller's Business Pending Closing. Unless Buyer otherwise
----------------------------------------------
consents, during the period prior to the Closing Date, Seller shall operate the
Business, subject to the orders and direction of the Bankruptcy Court, as
currently operated and only in the ordinary course and, consistent with such
operation, shall use commercially reasonable efforts to preserve intact the
Business and its relationships with employees and persons having dealings with
it. Notwithstanding the foregoing, Seller may take such action as is reasonably
necessary prior to the Closing to withdraw excess cash balances from the
Purchased Subsidiaries to the extent that such withdrawals do not prevent the
Purchased Subsidiaries from continuing the conduct of business in the ordinary
course.
8.3 Xxxx-Xxxxx-Xxxxxx Cooperation. Buyer and Seller shall cooperate with
-----------------------------
each other (at their respective sole cost and expense) to comply with, and
provide the information required by, the pre-merger notification and waiting
period rules of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976
(codified in Section 18(a) of Title 15, U.S. Code) (the "Act"), in any Federal
Trade Commission regulations, and in any provisions or regulations of or
relating to the Xxxxxxx Act. In that connection, Buyer and Seller shall use
diligent efforts to make their joint pre-merger notification filing with the
Federal Trade Commission no later than ten (10) days following the Execution
Date. Buyer and Seller also mutually agree to request early termination of all
applicable waiting periods under the Act.
17
8.4 Bankruptcy Court Approvals.
--------------------------
8.4.1. Bankruptcy Court Approval of Sale Procedures. Promptly
--------------------------------------------
following the Execution Date (and in no event later than ten (10) business days
thereafter), Seller will file a motion (the "Sale Procedure Motion") with the
Bankruptcy Court requesting the entry of an order in form and substance
acceptable to Buyer (the "Procedure Order") (i) fixing the time, date, and
location of a hearing (the "Approval Hearing") to approve Seller's consummation
of this Agreement, (ii) fixing the time and date of an auction (the "Auction")
to be held at the offices of Xxxxxxxx Xxxxx Xxxxxx & Xxxxx, Atlanta, Georgia, at
which higher and better offers to purchase the Property may be presented to
Seller, (iii) providing that if Seller receives from a third party a higher and
better offer to purchase the Property at the Auction, and such third party offer
is subsequently approved by the Bankruptcy Court and closes as provided by its
terms, then Buyer will be entitled to receive from Seller a flat fee payment
(not dependent on amounts actually expended or incurred by Buyer) in cash or
other immediately available good funds in the amount of 3% of Purchase Price
(the "Break-Up Fee") which payment shall be made to Buyer concurrently with the
consummation of such third party sale, (iv) no prospective purchaser will be
permitted to bid at the Auction unless such party has been deemed "financially
qualified" by Xxxxxxxx Xxxxx Xxxxxx & Xxxxx Capital ("HLHZ"), Seller's
investment banker, (v) no prospective purchaser who bids for the Property at
Auction shall be entitled to purchase the Property unless such prospective
purchaser offers to purchase the Property for consideration which is at least
$2,000,000 greater than the consideration set forth in this Agreement (including
all cash, non-cash consideration and assumed liabilities) and otherwise on terms
at least as favorable to Seller as those set forth in this Agreement, and (vi)
after any initial overbid, all further overbids must be in increments of at
least $500,000. Should overbidding take place, Buyer shall have the right, but
not the obligation, to participate in the overbidding and to be approved as the
overbidder at the Approval Hearing based upon any such overbid. Should an
overbidder be approved at the hearing on the Sale Motion, Buyer shall deliver to
such approved overbidder all third party reports, studies and the like resulting
from Buyer's Due Diligence investigations. Following the filing of the Sale
Procedure Motion, Seller shall use reasonable efforts to obtain the Procedure
Order (the date on which the Procedure Order is entered and becomes final is
referred to herein as the "Sale Procedure Date").
8.4.2 Bankruptcy Court's Approval of Sale. Promptly following the
-----------------------------------
Execution Date, and contemporaneously with the filing of the Sale Procedure
Motion, Seller shall file a motion with the Bankruptcy Court (the "Sale Motion")
requesting entry of an order in form and substance satisfactory to Buyer (the
"Approval Order") which (i) approves the sale of the Property to Buyer on the
terms and conditions set forth in this Agreement and authorizes Seller to
proceed with this transaction, (ii) includes a specific finding and conclusion
of law that Buyer is a good faith purchaser of the Property within the meaning
of Section 363(m) of the Bankruptcy Code, (iii) states that the sale of the
Property to Buyer shall be free and clear of all liens, claims, interests and
encumbrances whatsoever (except as expressly provided in this Agreement), and
(iv) approves Seller's assumption and assignment of the Real Property Leases and
Other Leases and Contracts (collectively, the "Section 365 Contracts") pursuant
to Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code and orders Buyer to pay any
cure amounts payable to the other parties to the Section 365 Contracts as a
condition to such assumption and assignment. Following the filing of the Sale
Motion, Seller shall use reasonable efforts to obtain entry of the
18
Approval Order. Both Buyer's and Seller's obligations to consummate the
transactions contemplated in this Agreement which Buyer and Seller may hereafter
enter into shall be conditioned upon the Bankruptcy Court's entry of the
Approval Order.
9. Indemnity
---------
9.1. Survival of Representations. The representations and warranties of
---------------------------
Seller contained in Section 5 hereof shall terminate upon the Closing, except
for the representations and warranties contained in Section 5.15 (Environmental
Matters) and Section 5.16 (Assets Sufficient to Operate Business), each of which
shall survive until such time as Seller's plan of reorganization in the Case
shall have been approved and confirmed by the Bankruptcy Court (the "Survival
Period"). The representations and warranties of Buyer contained in Section 6
hereof shall terminate upon the Closing.
9.2 Indemnity by Seller. Subject to the terms and conditions of this
-------------------
Section 9, Seller hereby agrees to indemnify, defend and hold harmless Buyer and
its affiliates and each of their respective members, officers, directors,
employees, stockholders, agents and representatives at any time after the
Closing, from and against all demands, claims, actions or causes of action,
assessments, losses, damages, liabilities, obligations, penalties, fines, costs
and expenses (including without limitation reasonable fees and expenses of
counsel) ("Damages") asserted against, resulting from, imposed upon or incurred
by Buyer, directly or indirectly, by reason of or resulting from: (a) any
liabilities or obligations of Seller which are not Assumed Liabilities; (b) a
breach of any representation or warranty of Seller contained in or made pursuant
to Section 5.15 (Environmental Matters) and Section 5.16 (Assets Sufficient to
Operate Business); (c) the breach by Seller of any covenant or agreement of
Seller contained in or made pursuant to this Agreement or in any agreement
delivered in connection herewith; (d) any liability for brokerage, financial
advisory or finders' fees or other commissions based on agreements, arrangements
or understandings made by Seller for services rendered for or on behalf of
Seller in connection with the transactions contemplated hereby; (e) the failure
to comply with statutory provisions relating to bulk sales and transfers, if
applicable; and (f) the failure of Seller to comply with the reasonable requests
of Buyer necessary to satisfy any applicable statutory or other governmental
provisions relating to transfers of stock of foreign entities. Any claim or
claims for Damages made by Buyer that are based upon a breach of any of the
representations or warranties in Section 5.15 or Section 5.16 during the
Survival Period shall be treated, until paid in full by Seller, as claims for
administrative expenses in the Case with priority over all other claims for
administrative expenses other than any claim asserted under Section 2.3.2
hereof.
9.3 Indemnity by Buyer. Subject to the terms and conditions of this
------------------
Section 9, Buyer hereby agrees to indemnify, defend and hold harmless Seller at
any time after the Closing, from and against all Damages asserted against,
resulting to, imposed upon or incurred by Seller, directly or indirectly, by
reason of or resulting from: (a) any obligations or liabilities of Buyer; (b)
any Assumed Liabilities; (c) any liabilities, obligations or claims which arise
out of the operations of the business or ownership of the Property by Buyer
after the Closing Date; (d) the breach by Buyer of any covenant or agreement of
Buyer contained in or made pursuant to this Agreement; or (e) any liability for
brokerage or finders' fees or other commissions based on agreements,
arrangements or
19
understandings made by Buyer for services rendered for or on behalf of Buyer in
connection with the transactions contemplated hereby.
9.4 Limitations: Calculation. Notwithstanding anything contained in this
------------------------
Agreement to the contrary, the amount of any Damages for which indemnification
is provided under this Section 9 shall be net of any amounts actually recovered
by the indemnified party under insurance policies with respect to such Damages
and shall be (i) increased to take account of any net tax cost incurred by the
indemnified party arising from the receipt of indemnity payments hereunder
(grossed up for such increase) and (ii) reduced to take account of any net tax
benefit realized by the indemnified party arising from the incurrence or payment
of any such Damages. In computing the amount of any such tax cost or tax
benefit, the indemnified party shall be deemed to recognize all other items of
income, gain, loss deduction or credit before recognizing any item arising from
the receipt of any indemnity payment hereunder or the incurrence or payment of
any indemnified Damages. Any offset made against any accounts or notes
receivable based upon or arising from any liability of Seller that Buyer has not
expressly agreed to assume pursuant to this Agreement shall be Damages for which
indemnification is provided hereunder.
10. Miscellaneous.
-------------
10.1 Attorneys' Fees. In the event that either party hereto brings an
---------------
action or other proceeding to enforce or interpret the terms and provisions of
this Agreement, the prevailing party in that action or proceeding shall be
entitled to have and recover from the non-prevailing party all such fees, costs
and expenses (including ??? and reasonable attorneys' fees) as the prevailing
party may ??? or incur in the pursuit of defense of such action or proceeding.
10.2 Reasonable Access to Records and Certain Personnel. So long as the
-------------------------------------------------
Case is pending, (i) Buyer shall permit Seller's counsel and other professionals
employed in the Case reasonable access to the financial and other books and
records relating to the Property or the Business (whether in documentary or data
form) for the purpose of the continuing administration of the Case (including,
without limitation, the pursuit of any avoidance, preference or similar action),
which access shall include (a) the right of such professionals to copy, at
Seller's expense, such documents and records as they may request in furtherance
of the purposes described above, and (b) Buyer's copying and delivering to
Seller or its professionals such documents or records as they may request, but
only to the extent Seller or its professionals furnishes Buyer with reasonably
detailed written descriptions of the materials to be so copied and Seller
reimburses Buyer for the reasonable costs and expenses thereof), and (ii) Buyer
shall provide Seller and such professionals (at no cost to Seller) with
reasonable access to Xxx Xxxxxxx during regular business hours to assist Seller
in the continuing administration of the Case, provided that such access does not
unreasonably interfere with Buyer's business operations.
10.3 Notices. Unless otherwise provided herein, any notice, tender, or
-------
delivery to be given hereunder by either party to the other may be effected by
personal delivery in writing, or by registered or certified mail, postage
prepaid, return receipt requested, and shall be deemed
20
communicated as of the date of mailing. Mailed notices shall be addressed as set
forth below, but each party may change his address by written notice in
accordance with this paragraph.
To Seller: Gencor Industries, Inc.
0000 Xxxxx Xxxxxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: X. X. Xxxxxxx
Fax: 000-000-0000
With copies to: Xxxxxxxxx, Stang, Ziehl, Young & Xxxxx P.C.
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx
Fax: 000-000-0000
and
Xxxxxx, Xxxxx and Xxxxxxxxx P.A.
000 Xxxxx Xxxxxxxx Xxxx., Xxxxx 0000
Xxxxx, XX 00000
Attn: Xxxx Xxxxxxxxx
Fax: 000-000-0000
and
Xxxxxxxx Xxxxx Xxxxxx & Xxxxx
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxx
Fax: 000-000-0000
To Buyer: CPM Acquisition Corp.
Sixty Xxx Xxxxxx Xxxx, 0/xx/ Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: I. Xxxxxx Xxxxxxx
Fax: 000-000-0000
and
The Compass Group International, LLC
Sixty Xxx Xxxxxx Xxxx, 0/xx/ Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxx, Principal
Fax: 000-000-0000
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With a copy to: Squire, Xxxxxxx & Xxxxxxx LLP
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Fax: 000-000-0000
10.4 Entire Agreement. This instrument and the documents to be executed
-----------------
pursuant hereto contain the entire agreement between the parties relating to the
sale of the Property. Any oral representations or modifications concerning this
Agreement or any such other document shall be of no force and effect excepting a
subsequent modification in writing, signed by the party to be charged.
10.5 Modification. This Agreement may be modified, amended or supplemented
------------
only by a written instrument duly executed by all the parties hereto.
10.6 Closing Date. All actions to be taken on the Closing Date pursuant to
------------
this Agreement shall be deemed to have occurred simultaneously, and no act,
document or transaction shall be deemed to have been taken, delivered or
effected until all such actions, documents and transactions have been taken,
delivered or effected.
10.7 Severability. Should any term, provision or paragraph of this
------------
Agreement be determined to be illegal or void or of no force and effect, the
balance of the Agreement shall survive except that, if Buyer cannot acquire and
Seller cannot sell substantially all of the Property, either party may terminate
this Agreement, and it shall be of no further force and effect, unless both
parties agree in writing to the contrary.
10.8 Captions. All captions and headings contained in this Agreement
--------
are for convenience of reference only and shall not be construed to limit or
extend the terms or conditions of this Agreement.
10.9 Further Assurances. Each party hereto will execute, acknowledge and
------------------
deliver any further assurance, documents and instruments reasonably requested by
any other party hereto for the purpose of giving effect to the transactions
contemplated herein or the intentions of the parties with respect thereto.
10.10 Waiver. No waiver of any of the provisions of this Agreement shall be
------
deemed, or shall constitute, a waiver of other provisions, whether or not
similar, nor shall any waiver constitute a continuing waiver. No waiver shall be
binding unless executed in writing by the party making the waiver.
10.11 Brokerage Obligations. Seller is represented by HLHZ as its exclusive
---------------------
sale agent with respect to the transactions contemplated herein pursuant to that
certain order entered by the Bankruptcy Court on November 6, 2000 and HLHZ's
fees and expenses are to be paid by Seller immediately and in accordance with
the terms and provisions of such order. Seller and Buyer each represent and
warrant to the other that, except for HLHZ, such party has incurred no liability
to any broker or agent with respect to the payment of any commission regarding
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the consummation of the transaction contemplated hereby. Except for any claims
of HLHZ (which are to be handled and satisfied by Seller in accordance with the
above referenced order), it is agreed that if any claims for commissions, fees
or other compensation, including, without limitation, brokerage fees, finder's
fees, or commissions are ever asserted against Buyer or Seller in connection
with this transaction, all such claims shall be handled and paid by the party
whose actions form the basis of such claim and such party shall indemnify,
defend (with counsel reasonably satisfactory to the party entitled to
indemnification), protect, and save and hold the other harmless from and against
any and all such claims or demands asserted by any person, firm or corporation
in connection with the transaction contemplated hereby.
10.12 Payment of Fees and Expenses. Except as provided in Sections 10.1
----------------------------
and 10.11 above, each party to this Agreement shall be responsible for, and
shall pay, all of its own fees and expenses, including those of its counsel,
incurred in the negotiation, preparation and consummation of the Agreement and
the transaction described herein.
10.13 Survival. The representations and warranties made in this Agreement
--------
shall survive the Closing only to the extent provided for in Section 9 hereof.
Except for the covenants and agreements to be performed after the Closing Date,
none of the respective covenants and agreements of Seller and Buyer herein, or
in any certificates or other documents delivered prior to or at the Closing,
shall survive the Closing.
10.14 Assignments. This Agreement shall not be assigned by either party
-----------
hereto without the prior written consent of the other party hereto.
10.15 Binding Effect, Subject to the provisions of Section 10.14 above,
--------------
this Agreement shall bind and inure to the benefit of the respective heirs,
personal representatives, successors, and assigns of the parties hereto.
10.16 Applicable Law. This Agreement shall be governed by and construed in
--------------
accordance with the laws of California.
10.17 Good Faith. All parties hereto agree to do all acts and execute
----------
documents required to carry out the terms of this Agreement and to act in good
faith with respect to the terms and conditions contained herein before and after
Closing.
10.18 Construction. In the interpretation and construction of this
------------
Agreement, the parties acknowledge that the terms hereof reflect extensive
negotiations between the parties and that this Agreement shall not be deemed,
for the purpose of construction and interpretation, drafted by either party
hereto.
10.19 Counterparts. This Agreement may be signed in counterparts. The
------------
parties further agree that this Agreement may be executed by the exchange of
facsimile signature pages.
10.20 Time is of the Essence. Time is of the essence in this Agreement,
----------------------
and all of the terms, covenants and conditions hereof.
23
10.21 Bankruptcy Court Jurisdiction. BUYER AND SELLER AGREE THAT THE
-----------------------------
BANKRUPTCY COURT SHALL HAVE EXCLUSIVE JURISDICTION OVER ALL DISPUTES AND OTHER
MATTERS RELATING; TO (i) THE INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT OR
ANY ANCILLARY DOCUMENT EXECUTED PURSUANT HERETO; AND/OR (ii) THE PROPERTY AND/OR
ASSUMED LIABILITIES, AND BUYER EXPRESSLY CONSENTS TO AND AGREES NOT TO CONTEST
SUCH EXCLUSIVE JURISDICTION.
24
IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase
Agreement as of the day and year first above written.
CPM Acquisition Corp.
By: _______________________
Name: _______________________
Its: _______________________
Consolidated Process Machinery, Inc.
Debtor and Debtor In Possession
By: _______________________
Name: _______________________
Its: _______________________
Exhibits "A-1" through "E"
--------------------------
[EXHIBITS TO BE DELIVERED BY SELLER]
25
IN WITNESS WHEREOF, the parties hereto have executed this Asset
Purchase Agreement as of the day and year first above written.
CPM Acquisition Corp.
By: ____________________________
Name: __________________________
Its: ___________________________
Consolidated Process Machinery, Inc.
Debtor and Debtor In Possession
By: /s/ Xxxx X. Xxxxxxx
----------------------------
Name: XXXX X. XXXXXXX
---------------------------
Its: VICE PRESIDENT
---------------------------
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10.21 Bankruptcy Court Jurisdiction. BUYER AND SELLER AGREE THAT THE
-----------------------------
BANKRUPTCY COURT SHALL HAVE EXCLUSIVE JURISDICTION OVER ALL DISPUTES AND OTHER
MATTERS RELATING; TO (i) THE INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT OR
ANY ANCILLARY DOCUMENT EXECUTED PURSUANT HERETO; AND/OR (ii) THE PROPERTY AND/OR
ASSUMED LIABILITIES, AND BUYER EXPRESSLY CONSENTS TO AND AGREES NOT TO CONTEST
SUCH EXCLUSIVE JURISDICTION.
IN WITNESS WHEREOF, the parties hereto have executed this Asset
Purchase Agreement as of the day and year first above written.
CPM Acquisition Corp.
By:
----------------------
Name:
--------------------
Its: President
---------------------
Consolidated Process Machinery, Inc.
Debtor and Debtor In Possession
By: _________________________
Name:________________________
Its: ________________________
Exhibit "A-1 through "E"
------------------------
[EXHIBITS TO BE DELIVERED BY SELLER]
25
