EXHIBIT 2
ASSET PURCHASE AGREEMENT
by and among
ASSEMBLY & TEST WORLDWIDE, INC.,
DETROIT TOOL AND ENGINEERING COMPANY,
ASSEMBLY TECHNOLOGY & TEST, INC.,
ADVANCED ASSEMBLY AUTOMATION, INC.,
and
DT INDUSTRIES, INC.
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Dated as of May 12, 2004
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ARTICLE I DEFINITIONS....................................................... 1
Section 1.1 Definitions................................................... 1
Section 1.2 Additional Definitions........................................ 9
Section 1.3 Headings...................................................... 9
Section 1.4 Schedules..................................................... 9
Section 1.5 References to Articles, Etc................................... 9
Section 1.6 References to "Herein," Etc................................... 10
ARTICLE II PURCHASE AND SALE OF THE ASSETS; PURCHASE PRICE ................ 10
Section 2.1 Purchase and Sale of the Assets............................... 10
Section 2.2 Excluded Assets............................................... 11
Section 2.3 Assumption of Liabilities..................................... 12
Section 2.4 Excluded Liabilities.......................................... 13
Section 2.5 Purchase Price................................................ 13
Section 2.6 Purchase Price Adjustments Based on Net Working Capital....... 14
Section 2.7 Allocation of the Final Purchase Price........................ 17
Section 2.8 Contract Rejection and Assumption............................. 17
Section 2.9 Cure of Defaults.............................................. 18
ARTICLE III THE CLOSING .................................................... 18
Section 3.1 Time and Place of Closing..................................... 18
Section 3.2 Deliveries at Closing......................................... 18
Section 3.3 Assignment of Designated Contracts, Etc....................... 19
Section 3.4 Sales, Use and Other Taxes.................................... 19
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND PARENT ........ 20
Section 4.1 Organization.................................................. 20
Section 4.2 Capitalization................................................ 20
Section 4.3 Power and Authority........................................... 20
Section 4.4 No Violation.................................................. 21
Section 4.5 Actions....................................................... 21
Section 4.6 Compliance with Laws.......................................... 21
Section 4.7 Title to Property............................................. 22
Section 4.8 Approvals..................................................... 22
Section 4.9 Broker's or Finder's Fees..................................... 22
Section 4.10 Real Property .............................................. 22
Section 4.11 Designated Contracts ........................................ 22
Section 4.12 Intellectual Property ....................................... 23
Section 4.13 "AS IS" Transaction ......................................... 23
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PURCHASER................... 24
Section 5.1 Organization and Good Standing................................ 24
Section 5.2 Power and Authority........................................... 24
Section 5.3 No Violation.................................................. 24
Section 5.4 Approvals..................................................... 25
Section 5.5 Solvency; Availability of Funds............................... 25
Section 5.6 Investment Representation..................................... 25
Section 5.7 Affiliated and Associated Persons............................. 25
Section 5.8 Broker's or Finder's Fees..................................... 26
ARTICLE VI COVENANTS OF THE SELLERS ........................................ 26
Section 6.1 Conduct of Business........................................... 26
Section 6.2 Acquisition Proposals......................................... 26
Section 6.3 Access to the Sellers......................................... 27
Section 6.4 WARN Act...................................................... 27
Section 6.5 Certificate of Service........................................ 27
ARTICLE VII COVENANTS OF THE PURCHASER ..................................... 28
Section 7.1 No Interference with Bankruptcy Cases......................... 28
Section 7.2 Adequate Assurance............................................ 28
Section 7.3 Confidentiality............................................... 28
ARTICLE VIII AGREEMENTS OF PURCHASER AND SELLERS 28
Section 8.1 Xxxx-Xxxxx-Xxxxxx Cooperation................................. 28
Section 8.2 Employees..................................................... 29
Section 8.3 Restricted Assets............................................. 29
Section 8.4 Bankruptcy Court Orders....................................... 29
ARTICLE IX CONDITIONS PRECEDENT TO THE PURCHASER'S OBLIGATIONS ............. 31
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Section 9.1 Representations and Warranties................................ 31
Section 9.2 Performance................................................... 31
Section 9.3 Sale Order.................................................... 31
Section 9.4 Expiration of the HSR Act Waiting Period...................... 32
Section 9.5 Conduct of Business........................................... 32
Section 9.6 Material Adverse Changes...................................... 32
Section 9.7 Compliance with Laws.......................................... 32
ARTICLE X CONDITIONS PRECEDENT TO THE SELLERS' OBLIGATIONS.................. 32
Section 10.1 Representations and Warranties .............................. 33
Section 10.2 Performance ................................................. 33
Section 10.3 Sale Order .................................................. 33
Section 10.4 Expiration of the HSR Act Waiting Period .................... 33
ARTICLE XI COVENANTS AND AGREEMENTS SUBSEQUENT TO THE CLOSING .............. 33
Section 11.1 Books and Records; Access ................................... 33
Section 11.2 Further Assurances .......................................... 33
ARTICLE XII TERMINATION .................................................... 34
Section 12.1 Termination ................................................. 34
Section 12.2 Effect of Termination ....................................... 35
ARTICLE XIII MISCELLANEOUS ................................................. 36
Section 13.1 Public Announcements ........................................ 36
Section 13.2 Amendment; Waiver ........................................... 36
Section 13.3 No Survival of Representations and Warranties ............... 36
Section 13.4 Fees and Expenses ........................................... 36
Section 13.5 Notices ..................................................... 36
Section 13.6 Assignment .................................................. 37
Section 13.7 Governing Law; Consent to Jurisdiction ...................... 38
Section 13.8 WAIVER OF JURY TRIAL ........................................ 39
Section 13.9 Entire Agreement ............................................ 39
Section 13.10 Severability ............................................... 39
Section 13.11 No Third Party Beneficiaries ............................... 39
Section 13.12 Enforcement ................................................ 39
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Section 13.13 Counterparts ............................................... 39
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of May 12, 2004, is made by and
among Detroit Tool and Engineering Company, a Delaware corporation, Assembly
Technology & Test, Inc., a Delaware corporation, Advanced Assembly Automation,
Inc., an Ohio corporation (collectively, the "Sellers"), DT Industries, Inc., a
Delaware corporation ("Parent"), and Assembly & Test Worldwide, Inc., a Delaware
corporation, as buyer ("Purchaser").
R E C I T A L S
A. Sellers are wholly-owned subsidiaries of Parent that manufacture
special automation assembly and processing equipment, precision tooling and
dies, welding systems, custom non-synchronous and synchronous assembly systems,
rotary dial assembly systems, electrified monorail material handling systems,
fuel injection, engine and transmission test systems, and lean assembly systems
(the "Business");
B. The Purchaser desires to purchase from Sellers and Parent, and Sellers
and Parent desire to sell, convey, assign and transfer to the Purchaser, the
Transferred Assets (hereinafter defined), and in connection therewith, the
Purchaser desires to assume certain specified obligations and liabilities of the
Sellers and Parent relating thereto, all in the manner and subject to the terms
and conditions set forth herein and in accordance with Sections 105, 363 and 365
of the Bankruptcy Code (collectively, the "Transaction");
C. The parties desire to consummate the Transaction as promptly as
practical after the entry of an order approving the Transaction ("Sale Order")
in the voluntary cases (the "Bankruptcy Cases") to be filed by Parent, the sole
stockholder of Sellers, and Sellers, under Chapter 11 of Title 11 of the United
States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for
the Southern District of Ohio Dayton Office (the "Bankruptcy Court").
A G R E E M E N T
In consideration of the premises, the mutual covenants herein contained
and other good and valuable consideration (the receipt and sufficiency of which
is hereby acknowledged), the parties hereto, subject to the terms and conditions
contained herein, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. The following terms, as used in this Agreement,
shall have the following meanings:
"Account" shall have the meaning ascribed to such term in Section 9-102 of
the Uniform Commercial Code as in effect in the State whose laws govern the
interpretation of this Agreement as of its Effective Time.
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"Acquired Stock" shall have the meaning ascribed to such term in Section
2.1(a).
"Acquired Subsidiary" shall have the meaning ascribed to such term in
Section 2.1(a).
"Acquisition Documents" shall mean, collectively, this Agreement, the Xxxx
of Sale, the Assignment and Assumption Agreement, the Escrow Agreement and all
agreements, instruments, certificates and other documents executed and delivered
in connection herewith or contemplated hereby.
"Added Contracts" shall have the meaning ascribed to such term in Section
2.8 hereof.
"Action" shall mean any claim, dispute, demand, cause of action or action
asserted in any arbitration, litigation, adversary proceeding, mediation, suit,
investigation or other proceeding and any appeal therefrom.
"Affiliate" shall mean, with respect to any Person, any Person which,
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. As used in this
definition, the term "control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly, of the power
to (a) vote one-third (1/3) or more of the voting power of the outstanding
voting securities of such Person, or (b) otherwise direct the management
policies of such Person by contract or otherwise.
"Agreement" shall mean this Asset Purchase Agreement and shall include all
of the Schedules and Exhibits attached hereto.
"Allocation" shall have the meaning ascribed to such term in Section 2.7
hereof.
"Alternative Transaction" shall mean any transaction occurring after the
Bidding Procedures Order is entered involving the consummation of the sale of
all or a material portion of the Business pursuant to Section 363(b) of the
Bankruptcy Code or a plan of reorganization under Section 1123 of the Bankruptcy
Code to a purchaser or purchasers other than the Purchaser and/or one or more of
its Affiliates at any time during the pendency of the Bankruptcy Cases.
"Approval" shall mean any approval, authorization, consent, license,
franchise, order or permit of or by, notice to, or filing or registration with,
a Person.
"AS Financial Statements" shall have the meaning ascribed to such term in
Section 4.2 hereof.
"AS Tangible Equity" shall have the meaning ascribed to such term in
Section 2.6(d) hereof.
"AS Tangible Equity Adjustment" shall have the meaning ascribed to such
term in Section 2.6(d) hereof.
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AS Tangible Equity Shortfall" shall have the meaning ascribed to such term
in Section 2.6(d) hereof.
"AS Tangible Equity Target" shall have the meaning ascribed to such term
in Section 2.6(d) hereof.
"Assets" shall mean both the Transferred Assets and the Excluded Assets.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement, substantially in the form attached hereto as Exhibit A.
"Assumed Liabilities" shall have the meaning ascribed to such term in
Section 2.3 hereof.
"Bankruptcy Cases" shall have the meaning ascribed to such term in the
recitals to this Agreement.
"Bankruptcy Code" shall have the meaning ascribed to such term in the
recitals to this Agreement.
"Bankruptcy Court" shall have the meaning ascribed to such term in the
recitals to this Agreement.
"Bidding Procedures Hearing" shall have the meaning ascribed to such term
in Section 8.4(b) hereof.
"Bidding Procedures Order" shall have the meaning ascribed to such term in
Section 8.4(b) hereof.
"Xxxx of Sale" shall mean the xxxx of sale transferring to the Purchaser
the Transferred Assets, substantially in the form attached hereto as Exhibit B.
"Books and Records" shall have the meaning ascribed to such term in
Section 2.1(h) hereof.
"Break-Up Fee" shall mean cash in an amount equal to $540,000.
"Business" shall have the meaning ascribed to such term in the recitals to
this Agreement.
"Business Day" shall mean a day that is not a Saturday, a Sunday or a day
on which banks in the State of Ohio or Missouri are required or authorized to
close for regular banking business.
"Claim" shall have the meaning ascribed to such term in Section 101(5) of
the Bankruptcy Code so long as such Claim arises out of or relates to the
Transferred Assets, the Business or any Seller.
"Cash Deposit" shall have the meaning ascribed to such term in Section
2.5(b)(ii) hereof.
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"Closing" shall mean the consummation of the transactions contemplated by
this Agreement.
"Closing Date" shall mean the Business Day that is three (3) Business Days
after the date of the Sale Order, subject to the satisfaction or waiver of the
other conditions to Closing described in Articles IX and X hereof, or such other
date as the Purchaser and Parent may mutually agree upon.
"Closing Date Net Working Capital" shall have the meaning ascribed to such
term in Section 2.6(c) hereof.
"COBRA Liabilities" shall have the meaning ascribed to such term in
Section 2.3(a)(viii) hereof.
"Commencement Date" shall mean the date of the entry of the order for
relief in the Bankruptcy Case of a Seller.
"Contract" shall mean each instrument, contract, license and other
agreement, including real property leases, operating leases, capital leases,
unexpired leases of personal property and other leases, in each case primarily
relating to the Business, to which any Seller is a party or by which any Seller
or any of the Transferred Assets is bound.
"Cure Costs" shall have the meaning ascribed to such term in Section
2.3(a)(iii) hereof.
"Deposit" shall have the meaning ascribed to such term in Section 2.5(a)
hereof.
"Designated Contracts" shall have the meaning ascribed to such term in
Section 2.8 hereof.
"Designated Contract List" shall have the meaning assigned to such term in
Section 2.8 hereof.
"Drop Dead Date" shall have the meaning ascribed to such term in Section
12.1(f) hereof.
"EarthShell Equipment" shall have the meaning ascribed to such term in
Section 2.6(g) hereof.
"EarthShell Order" shall have the meaning ascribed to such term in Section
2.6(g) hereof.
"EarthShell Profit" shall have the meaning ascribed to such term in
Section 2.6(g) hereof.
"Effective Time" shall mean 12:01 a.m. on the Closing Date.
"Eligible Employee" shall mean any individual in the employment of any
Seller with respect to the Business both on the Petition Date and at the
Effective Time.
"Equipment" shall mean each item of machinery, equipment and fixture owned
by any Seller as of the date hereof, or any subsequent replacements or additions
thereto, in each case which has been or is now used by any Seller in connection
with the Business.
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"Equipment Leases" shall mean any and all operating leases of equipment
where any Seller is the lessor.
"Escrow Account" shall have the meaning set forth in the Escrow Agreement.
"Escrow Agent" means LaSalle Bank, N.A.
"Escrow Agreement" shall mean the Escrow Agreement dated, as of the date
hereof, entered into by and among the Purchaser, the Sellers, the Parent and the
Escrow Agent.
"Escrow Fees" shall have the meaning set forth in the Escrow Agreement.
"Escrow Fund" shall have the meaning ascribed to such term in Section
2.5(b)(ii) hereof.
"Estimated AS Tangible Equity Shortfall" shall have the meaning ascribed
to such term in Section 2.6(d).
"Estimated Net Working Capital" shall have the meaning ascribed to such
term in Section 2.6(b) hereof.
"Estimated Net Working Capital Excess" shall have the meaning ascribed to
such term in Section 2.6(a) hereof.
"Estimated Net Working Capital Shortfall" shall have the meaning ascribed
to such term in Section 2.6(a) hereof.
"Estimated Working Capital Adjustment" shall have the meaning ascribed to
such term in Section 2.6(a) hereof.
"Excluded Assets" shall have the meaning ascribed to such term in Section
2.2 hereof.
"Excluded Liabilities" shall have the meaning ascribed to such term in
Section 2.4 hereof.
"Final Adjustment" shall have the meaning ascribed to such term in Section
2.6(f) hereof.
"Final Order" means an order (the finality of which may be waived by
Purchaser in writing) entered by a court of competent jurisdiction as to which
the time for appellate review has expired without any party having sought such
review or the determination of any such review by the affirmance of such order.
"Final Purchase Price" shall have the meaning ascribed to such term in
Section 2.5 hereof.
"GAAP" shall mean generally accepted accounting principles in the United
States.
"Governmental Authority" shall mean any foreign, federal, state, local or
other governmental, administrative or regulatory authority, body, agency, court,
tribunal or similar
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entity including any arbitrator or arbitration panel, including, without
limitation, the Bankruptcy Court.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976.
"IBNR Claims" shall have the meaning ascribed to such term in Section
2.3(a)(viii) hereof.
"Independent Auditor" shall have the meaning ascribed to such term in
Section 2.6(e) hereof.
"Initial Purchase Price" shall have the meaning ascribed to such term in
Section 2.5 hereof.
"Intellectual Property" shall mean all of the following that relate to the
operation of the Business: (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto
and all United States and foreign patents of any description, and applications
therefor, utility models and utility model applications (whether owned or
licensed), including any continuations, continuations-in-part, reissues,
registrations, additions or extensions thereof; (b) United States (federal and
state) and foreign trademarks (and goodwill associated therewith) and other
trade names, service marks, logos, labels, trade dress, advertising and package
designs, and other trade rights, whether or not registered and all applications
therefor; (c) United States and foreign copyrights, whether or not registered
and all applications therefor (including copyrights in computer software and
computer software documentation, source code and systems documentation), and
websites; and (d) know-how, trade secrets, business leads, research and results
thereof, technology, techniques, data, methods, processes, instructions,
drawings and specifications, inventions, discoveries, improvements, designs,
processes, formulae, recipes, shop rights and license agreements and other
agreements of every kind and character relating to the Business, and all claims
and causes of action relating to any of the foregoing.
"Inventory" shall have the meaning ascribed to such term in Section 9-102
of the Uniform Commercial Code as in effect in the State whose laws govern the
interpretation of this Agreement as of its Effective Time.
"Knowledge" means with respect to Sellers, the actual knowledge, without
independent investigation, of Xxxxx Xxxxxxx, Xxxx Xxxxxx, Xxxx Xxxxxx and Xxxx
Xxxxxxx.
"Law" shall mean any law, statute, rule, regulation, ordinance, standard,
requirement, administrative ruling, order or process promulgated by any
Governmental Authority as in effect from time to time (including, without
limitation, any zoning or land use law or ordinance, building code, securities,
blue sky, civil rights or occupational health and safety law or regulation and
any court, administrative agency or arbitrator's order or process).
"Letter of Credit" shall have the meaning ascribed to such term in Section
2.5(a) hereof.
"Liability" shall mean any debt, liability, commitment, responsibility,
cost, expense and guaranty, warranty or obligation of any kind, character or
nature whatsoever, whether based in
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common law or statute or arising under written contract or otherwise, known or
unknown, primary or secondary, direct or indirect, xxxxxx or inchoate, secured
or unsecured, tangible or intangible, real or potential, fixed, absolute,
contingent or otherwise, and whether or not accrued or due or to become due.
"Lien" shall have the meaning ascribed to such term in Section 101(37) of
the Bankruptcy Code, including, without limitation, statutory lien, pledge,
mortgage, security interest, charge, easement, right of way, covenant, claim,
restriction, right, option, conditional sale or other title retention agreement,
or encumbrance of any kind or nature.
"Material Adverse Change" shall mean any change or effect that is, or
reasonably likely would result in, a material adverse change in the Transferred
Assets or the Business, in each case taken as a whole and taking into account
the operations of the Sellers as distressed companies, other than (i) changes or
effects resulting from the commencement or pendency of the Bankruptcy Cases,
(ii) changes or effects resulting from the entry into this Agreement or the
public announcement thereof, or (iii) changes in general economic conditions,
financial markets or conditions generally affecting the Business or related
industries.
"Net Working Capital" shall have the meaning ascribed to such term in
Section 2.6(b) hereof.
"Non-Disclosure Agreement" shall have the meaning ascribed to such term in
Section 6.2 hereof.
"Objections Statement" shall have the meaning ascribed to such term in
Section 2.6(e) hereof.
"Ohio Court" shall have the meaning ascribed to such term in Section
13.7(c) hereof.
"Other Personalty" shall mean all personal property (including parts,
furniture and furnishings), other than Equipment, Intellectual Property and
Inventory, owned, held or leased by any Seller, in each case in connection with
the operation of the Business.
"Parent" shall have the meaning ascribed to such term in the recitals to
this Agreement.
"Permitted Exceptions" means imperfections of title, restrictions or
encumbrances, if any, that (a) would not involve material costs to correct or
remove, (b) do not materially impair the use and operation of the applicable
Transferred Asset in the Business as currently conducted or (c) are caused
solely by the Purchaser.
"Person" shall mean any individual, general or limited partnership,
corporation, limited liability company, association, business trust, joint
venture, Governmental Authority, business entity or other entity of any kind or
nature.
"Petition Date" shall mean the date the Bankruptcy Cases are filed with
the Bankruptcy Court by Parent and Sellers.
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"Purchaser" shall have the meaning ascribed to such term in the preamble
to this Agreement.
"Real Property" shall have the meaning ascribed to such term in Section
4.10 hereof.
"Representative" shall mean, with respect to a Person, any employee,
officer, director, stockholder, partner, accountant, attorney, investment
banker, broker, finder, investor, subcontractor, consultant or other authorized
agent or representative of such Person.
"Restricted Assets" shall have the meaning ascribed to such term in
Section 3.3 hereof.
"Sale Hearing" shall have the meaning ascribed to such term in Section
8.4(c) hereof.
"Sale Hearing Notice" shall have the meaning ascribed to such term in
Section 8.4(b) hereof.
"Sale Order" shall have the meaning ascribed to such term in the recitals
to this Agreement.
"Schedules" means the schedules annexed hereto and made a part hereof.
"Sellers" shall have the meaning ascribed to such term in the preamble to
this Agreement.
"Subsidiary" means, with respect to any Person, any corporation, limited
liability company, partnership, association, or other business entity of which
(i) if a corporation, a majority of the total voting power of shares of stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers, or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof or (ii) if a limited
liability company, partnership, association, or other business entity (other
than a corporation), a majority of partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more Subsidiaries of that Person or a combination thereof
and for this purpose, a Person or Persons owns a majority ownership interest in
such a business entity (other than a corporation) if such Person or Persons
shall be allocated a majority of such business entity's gains or losses or shall
be or control any managing director or general partner of such business entity
(other than a corporation). The term "Subsidiary" shall include all Subsidiaries
of such Subsidiary.
"Target" shall have the meaning ascribed to such term in Section 2.6(a)
hereof.
"Tax" or "Taxes" means all taxes, assessments, charges, duties, fees,
levies, imposts or other governmental charges, including, without limitation,
all federal, state, local, municipal, county, foreign and other income,
franchise, profits, capital gains, capital stock, capital structure, transfer,
gross receipt, sales, use, transfer, service, occupation, ad valorem, property,
excise, severance, windfall profits, premium, stamp, license, payroll,
employment, social security, unemployment, disability, environmental, taxes
under Tax Code Section 59A, alternative, minimum, add-on, value-added,
withholding and other taxes, assessments, charges, imposts or other governmental
charges of any kind whatsoever (whether payable directly or by withholding
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and whether or not requiring the filing of a Tax Return), and all estimated
taxes, deficiency assessments, additions to tax, additional amounts imposed by
any governmental authority (domestic or foreign), penalties and interest.
"Tax Code" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
"Tax Return" shall mean any return, report, declaration, claim for refund,
estimate, election, or information statement or return relating to any Tax,
including any schedule or attachment thereto, and any amendment thereof.
"Transaction" shall have the meaning ascribed to such term in the recitals
to this Agreement.
"Transfer" shall mean any sale, transfer, conveyance, assignment, delivery
or other disposition, and "Transfer" or "Transferred," used as a verb, shall
each have a correlative meaning.
"Transferred Assets" shall have the meaning ascribed to such term in
Section 2.1 hereof.
"Treasury Regulation" means a regulation promulgated by the Treasury
Department under the Tax Code, including a temporary regulation and a proposed
regulation to the extent that, by reason of their actual or proposed effective
date, would or could, as of the date of any determination or opinion as to the
Tax consequences of any action or proposed action or transaction, be applied to
the Transferred Assets.
"Working Capital Adjustment" shall have the meaning ascribed to such term
in Section 2.6(c) hereof.
Section 1.2. Additional Definitions. In addition to the foregoing defined
terms, other capitalized terms appearing in this Agreement shall have the
respective meanings ascribed to such terms where they first appear in the text
of this Agreement.
Section 1.3. Headings. The headings contained in this Agreement are for
convenience of reference only and shall not constitute a part hereof or define,
limit or otherwise affect the meaning of any of the terms or provisions hereof.
Section 1.4. Schedules. Unless the context otherwise requires, all
capitalized terms used in the Schedules shall have the respective meanings
assigned in this Agreement. No reference to or disclosure of any item or other
matter in the Schedules shall be construed as an admission or indication that
such item or other matter is material or that such item or other matter is
required to be referred to or disclosed in the Schedules. No disclosure in the
Schedules relating to any possible breach or violation of any agreement, law or
regulation shall be construed as an admission or indication that any such breach
or violation exists or has actually occurred. Any information, item or other
disclosure set forth in any Schedule shall be deemed to have been set forth in
all other applicable Schedules if the relevance of such disclosure to such other
Schedules is reasonably apparent from the facts specified in such disclosure.
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Section 1.5. References to Articles, Etc. All references herein to
Articles, Sections, Exhibits and Schedules shall be to Articles and Sections of
and Exhibits and Schedules to this Agreement.
Section 1.6. References to "Herein," Etc. As used in this Agreement, the
words "herein," "hereof," "hereby" and "hereunder" shall refer to this Agreement
as a whole, and not to any particular section, provision or subdivision of this
Agreement.
ARTICLE II
PURCHASE AND SALE OF
THE ASSETS; PURCHASE PRICE
Section 2.1. Purchase and Sale of the Assets. Subject to the terms and
conditions of this Agreement, at and as of the Effective Time, Sellers and
Parent shall Transfer to (or cause to be Transferred to) Purchaser, and
Purchaser shall purchase and accept from Sellers and Parent, all of the Sellers'
and Parent's right, title and interest in and to all assets held for use or used
in connection with the operation of the Business, free and clear of all Liens or
other interests (except Permitted Exceptions), other than any Excluded Assets,
including the following (collectively, the "Transferred Assets"):
(a) the outstanding capital stock (the "Acquired Stock") of DT
Assembly & Test Europe GmbH, a company organized under the laws of Germany
(the "Acquired Subsidiary"), and it is agreed and understood that in
connection with Purchaser's purchase of such Acquired Stock, by operation
of Law, the Liabilities of the Acquired Subsidiary shall remain
Liabilities of the Acquired Subsidiary after the Closing;
(b) the Equipment Leases;
(c) the Equipment and Other Personalty;
(d) the Intellectual Property;
(e) all Inventory related to the operation of the Business,
including, without limitation, the EarthShell Equipment;
(f) all rights of the Sellers under the Designated Contracts;
(g) all prepaid expenses, security deposits and other credits owed
to the Sellers from third parties;
(h) originals or copies of all books, financial and other records
and information which has been reduced to written, recorded or encoded
form, in each case to the extent related to the Business (collectively,
the "Books and Records");
(i) licenses and permits used in the operation of the Business, to
the extent transferable;
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(j) owned and leased Real Property;
(k) the assets of the Parent, including, without limitation,
software licenses (including Encompix and Microsoft), computer and related
hardware (including servers, work stations, air conditioners, back-up
generators and furniture), phone systems hardware and software (including
voicemail, phone switch and hand sets), office, audio and video equipment,
used in the operation of the Business;
(l) all Accounts of Sellers related to the operation of the
Business; and
(m) all Claims and causes of action of Sellers against third parties
to enforce rights under any of the foregoing categories of Transferred
Assets.
Section 2.2. Excluded Assets. Notwithstanding anything to the contrary
contained herein, including in Section 2.1 above, the Sellers shall retain all
of their right, title and interest in and to, and shall not Transfer to the
Purchaser, the following assets of the Sellers or Parent as applicable
(collectively, the "Excluded Assets"):
(a) all cash, cash equivalents and marketable securities;
(b) all Contracts that are not Designated Contracts;
(c) all defenses, Claims, counter-Claims, rights of offset and other
Actions against any Person asserting or seeking to enforce any Liability
against the Sellers, to the extent such Liability is not assumed by the
Purchaser pursuant to this Agreement;
(d) any rights of Sellers under this Agreement;
(e) any avoidance or similar Actions, including, but not limited to,
Actions under Sections 544, 545, 547, 548, 550 and 553 of the Bankruptcy
Code;
(f) any Tax refunds or credits arising out of the operation of the
Business prior to the Closing Date;
(g) except to the extent a Designated Contract (as defined herein),
any assets of any employee benefit plan of any Seller and any rights under
any such plan or any contract, agreement or arrangement between any
employee or consultant and any Seller;
(h) any Books and Records related to the Sellers' employees that are
not being hired by Purchaser at or after the Effective Time, the Transfer
of which would conflict with any confidentiality or privacy obligations of
Sellers under applicable law;
(i) the capital stock of Sellers or their Subsidiaries, other than
the Acquired Stock; and
(j) except to the extent a Transferred Asset, any assets, properties
and rights of any Seller or Parent not used in the operation of the
Business as it is currently operated by Sellers.
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Section 2.3. Assumption of Liabilities.
(a) Subject to the terms and conditions of this Agreement, at and as
of the Effective Time, the Purchaser shall assume and agree to pay,
perform, discharge and satisfy when due in accordance with their terms the
following Liabilities:
(i) all Liabilities to the extent arising out of, incurred in
connection with or relating in any way to the ownership of the
Transferred Assets on or following the Closing Date or the operation
of the Business by the Purchaser on or following the Closing Date;
(ii) Liabilities under any of the Designated Contracts
accruing, or arising out of or relating to performance by the
Purchaser thereunder, after the Effective Time;
(iii) all amounts which may be payable according to the Sale
Order or other order of the Bankruptcy Court entered pursuant to
Sections 365(b) of the Bankruptcy Code to cure defaults in
connection with the assumption and assignment of the Designated
Contracts ("Cure Costs");
(iv) any Liabilities for unpaid salaries, severance benefits
and any other accrued but unpaid benefits (including, but not
limited to, accrued vacation) payable to Eligible Employees who are
hired by the Purchaser at the Effective Time (other than retention
bonuses and severance obligations relating to key employees approved
by the Bankruptcy Court in the Bankruptcy Cases), or any other
accruals, in each case to the extent reflected in Closing Date Net
Working Capital;
(v) any post-Petition Date accounts payable to the extent
reflected in Closing Date Net Working Capital;
(vi) Liabilities for Taxes to the extent reflected in the
Closing Date Net Working Capital as determined pursuant to Section
2.6(c) below;
(vii) insured health care expenses incurred by Eligible
Employees who are hired by the Purchaser at or after the Effective
Time that have been reported but not yet paid or for which claims
have not been submitted as of the Closing Date ("IBNR Claims"); and
(viii) Liabilities incurred by the Purchaser arising under the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") for
Eligible Employees who are not hired by the Purchaser at the
Effective Time if and only if applicable regulations under COBRA
would obligate the Purchaser to satisfy such Liabilities
(notwithstanding that such Liabilities are otherwise Excluded
Liabilities hereunder), to the extent reflected in the Closing Date
Net Working Capital ("COBRA Liabilities").
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(The Liabilities described in the foregoing clauses (i), (ii),
(iii), (iv), (v), (vi), (vii) and (viii) are collectively defined herein
as the "Assumed Liabilities".)
(b) From the date hereof through the Closing Date, Sellers shall use
commercially reasonable efforts to obtain settlements or stipulations (but
without any obligation of Sellers to pay any material amount in respect of
such settlements) with any party that objects to the assumption and
assignment of a Designated Contract or any related cure amount.
Section 2.4. Excluded Liabilities. Except for the Assumed Liabilities, the
Purchaser shall not assume, and shall have no liability or obligation for other
Claims against, or Liabilities of, the Sellers or Parent (collectively, the
"Excluded Liabilities"). The Excluded Liabilities include, but are not limited
to, (i) Liabilities for Taxes of the Sellers or Parent, other than for Taxes set
forth in Section 2.3(a)(vi), (ii) that certain lawsuit identified as Green
Packaging SDN BHD and Green Earth Packaging Corp. vs. Detroit Tool & Engineering
Company, DT Industries, Inc., et al., Case No. 01129608, Superior Court of the
State of California, Santa Xxxxxxx County, Anacapa Division, and (iii)
Liabilities in connection with any matter referred to in Schedule 4.5 or
Schedule 4.6.
Section 2.5. Purchase Price. The aggregate consideration for the
Transferred Assets shall consist of cash in the amount of $18,000,000 (the
"Initial Purchase Price"), as may be adjusted pursuant to Section 2.6 below (the
resulting adjusted aggregate consideration being referred to herein as the
"Final Purchase Price"), payable as follows:
(a) Deposit. Prior to the execution and delivery of this Agreement
by the parties hereto and following evidence reasonably satisfactory to
the Purchaser of receipt by Sellers of debtor-in-possession financing, the
Purchaser shall have deposited $900,000 in the form of a letter of credit
(the "Letter of Credit") in the Escrow Account (the amount deposited in
the Escrow Account through the earlier of termination of this Agreement in
accordance herewith and the Closing Date is referred to herein as the
"Deposit"). Upon termination of this Agreement for any reason other than
by Sellers pursuant to, and as permitted by, Section 12.1(c) below due to
a material breach of a covenant or agreement by Purchaser, the Escrow
Agent shall return the Deposit to the Purchaser in accordance with the
terms of the Escrow Agreement. If this Agreement is terminated by Sellers
pursuant to, and as permitted by, Section 12.1(c) below due to a material
breach of a covenant or agreement by Purchaser, the Escrow Agent shall pay
the Deposit to the Sellers in accordance with the terms of the Escrow
Agreement. The Purchaser, Parent and the Sellers shall, within three (3)
Business Days following such termination, execute and deliver to the
Escrow Agent joint written instructions directing the Escrow Agent to
deliver the Deposit in accordance with the foregoing. Sellers' right to
receive the Deposit under such circumstances shall be without prejudice to
any rights Sellers may have to be compensated in full for any damages
which they may have suffered as a result of any breach of this Agreement
by the Purchaser.
(b) Initial Purchase Price. At the Closing, the Purchaser shall
deliver to Sellers by wire transfer of immediately available funds to that
account or accounts designated in writing by Sellers:
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(i) cash in the amount of the Initial Purchase Price, as may
be adjusted pursuant to Section 2.6 below in the case of an
Estimated Net Working Capital Shortfall and/or Estimated AS Tangible
Equity Shortfall, if any; minus
(ii) cash in the amount of $1,500,000 (the "Cash Deposit") to
secure the Sellers' and Parent's obligations for the Working Capital
Adjustment and/or AS Equity Adjustment pursuant to Section 2.6 below
(the Cash Deposit, together with any investment earnings thereon,
the "Escrow Fund"), $900,000 of which Cash Deposit shall be
deposited into the Escrow Account by the Purchaser in place of the
Letter of Credit at the Closing by wire transfer of immediately
available funds (and the parties hereto shall, at the Closing,
instruct the Escrow Agent to return the Letter of Credit to the
Purchaser upon deposit of such funds), and $600,000 of which Cash
Deposit shall be deposited into the Escrow Account by the Purchaser
at the Closing by wire transfer of immediately available funds.
(c) Payment of Estimated Net Working Capital Excess. To the extent
any Estimated Net Working Capital Excess is not paid by the Purchaser at
the Closing, such amount shall be paid by the Purchaser by wire transfer
of immediately available funds within fifteen (15) Business Days following
the Closing Date.
(d) Escrow Fees. Purchaser shall pay directly to the Escrow Agent
the Escrow Fees as and when due under the Escrow Agreement.
Section 2.6. Purchase Price Adjustments Based on Net Working Capital.
(a) Adjustments for Estimated Net Working Capital Shortfall/Excess.
The Initial Purchase Price shall be (a) reduced dollar-for-dollar to the
extent the Estimated Net Working Capital (as defined below) is less than
the Target (such shortfall, if any, being referred to herein as the
"Estimated Net Working Capital Shortfall") or (b) increased
dollar-for-dollar to the extent the Estimated Net Working Capital is
greater than the Target (such excess, if any, being referred to herein as
the "Estimated Net Working Capital Excess"). The Estimated Net Working
Capital Excess or the Estimated Net Working Capital Shortfall shall be the
"Estimated Working Capital Adjustment." As used herein, the "Target" shall
be $16,697,000, plus up to $256,000 in amounts owing to Pyxis to the
extent any amounts owed to Pyxis by Sellers have not been paid prior to
the Closing Date, plus up to $150,000 in amounts owing to ITE to the
extent any amounts owed to ITE by Sellers have not been paid prior to the
Closing Date.
(b) Closing Date Net Working Capital Estimate. At least three (3)
days prior to the Closing Date, the Sellers and Purchaser shall mutually
agree upon a good faith reasonable estimate of the Closing Date Net
Working Capital (the "Estimated Net Working Capital"). "Net Working
Capital" means, consistent with the categories of current assets and
current liabilities of the Sellers as set forth on Schedule 2.6 hereto, an
amount equal to (a) the sum of the current assets included among the
Transferred Assets, including trade receivables, costs and estimated
earnings in excess of amounts billed on uncompleted contracts, Inventory
and prepaid expenses, determined on a consolidated basis (excluding cash,
cash equivalents and marketable securities), minus (b) trade
18
payables, customer advances, xxxxxxxx in excess of costs and estimated
earnings on uncompleted contracts and any other accounts payable, Cure
Costs or accrued expenses (including warranty reserves and rebates)
included among the Assumed Liabilities. Net Working Capital shall also
include COBRA Liabilities; provided that any accrual for COBRA Liabilities
shall not exceed $150,000 in the Closing Date Net Working Capital
calculation determined pursuant to Section 2.6(c) below. Net Working
Capital does not include: (w) any assets or Liabilities of the Acquired
Subsidiary, (x) any amounts payable for IBNR Claims or (y) the value of
the EarthShell Equipment and any costs or expenses incurred in connection
with the EarthShell Equipment prior to receipt of an EarthShell Order. The
Net Working Capital shall be determined in accordance with GAAP and, to
the extent consistent with GAAP, in a manner consistent with Sellers'
historical accounting practices, and shall include only those accounts set
forth on Schedule 2.6 hereto.
(c) Closing Balance Sheet. On a date no later than sixty (60) days
following the Closing Date, Purchaser will prepare a balance sheet of the
Business of Sellers, as of the Closing Date, in accordance with GAAP and,
to the extent consistent with GAAP, in a manner consistent with the
accounting practices used in connection with the preparation of the
Estimated Net Working Capital, together with a calculation of the Net
Working Capital as of the Closing Date (the "Closing Date Net Working
Capital"). Purchaser shall also include a written calculation of the
proposed adjustment amount equal to (A) the Closing Date Net Working
Capital, minus (B) the sum of the Target and the Estimated Working Capital
Adjustment (such amount, the "Working Capital Adjustment"), which may be a
positive or a negative number. The Closing Date Net Working Capital shall
consist of the same components as the Estimated Net Working Capital.
(d) Adjustments for Acquired Subsidiary Tangible Stockholders'
Equity. On a date no later than sixty (60) days following the Closing
Date, Purchaser will prepare, in accordance with GAAP and, to the extent
consistent with GAAP, in a manner consistent with the historical
accounting practices of the Acquired Subsidiary, a statement of tangible
stockholders' equity of the Acquired Subsidiary as of the Closing Date
(the "AS Tangible Equity"). For clarity, the AS Tangible Equity shall be
calculated without regard to goodwill. The parties hereto agree that the
Initial Purchase Price shall be reduced dollar-for-dollar to the extent
the AS Tangible Equity is less than 1,353,000 Euros (the "AS Tangible
Equity Target") (such shortfall, if any, being referred to herein as the
"AS Tangible Equity Shortfall" and said reduction shall be the "AS
Tangible Equity Adjustment"). Notwithstanding the foregoing, if the AS
Tangible Equity is at least 1,303,000 Euros, the AS Tangible Equity
Adjustment shall be zero. At least three (3) days prior to the Closing
Date, the Sellers and the Purchaser shall mutually agree upon a good faith
reasonable estimate of the AS Tangible Equity Shortfall, if any (the
"Estimated AS Tangible Equity Shortfall").
(e) Disputes. After delivery of the Closing Date Net Working Capital
and AS Tangible Equity, the Sellers and their accountants shall be
permitted reasonable access to review the Purchaser's books and records
and work papers related to the preparation of the Closing Date Net Working
Capital, the Working Capital Adjustment, the AS Tangible
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Equity and the AS Tangible Equity Adjustment. The Sellers and their
accountants may make inquiries of Purchaser and its respective accountants
regarding questions concerning or disagreements with the Closing Date Net
Working Capital, the Working Capital Adjustment, the AS Tangible Equity
and the AS Tangible Equity Adjustment arising in the course of their
review thereof, and Purchaser shall use its reasonable best efforts to
cause any such accountants to respond to such inquiries. If the Sellers
have any objections to the Closing Date Net Working Capital, the Working
Capital Adjustment, the AS Tangible Equity and the AS Tangible Equity
Adjustment, the Sellers shall deliver to Purchaser a statement setting
forth their objections thereto (an "Objections Statement"). If an
Objections Statement is not delivered to Purchaser within 15 days after
delivery of the Closing Date Net Working Capital, the Closing Date Net
Working Capital, the Working Capital Adjustment, the AS Tangible Equity
and the AS Tangible Equity Adjustment shall be final, binding and
non-appealable on the parties hereto. The Sellers and Purchaser shall
negotiate in good faith to resolve any such objections, but if they do not
reach a final resolution within 15 days after the delivery of the
Objections Statement, the Sellers and Purchaser shall submit such dispute
to a representative from the office of a nationally recognized accounting
firm chosen by the Sellers and Purchaser (the "Independent Auditor"). The
Sellers and Purchaser shall use their commercially reasonable efforts to
cause the Independent Auditor to resolve all disagreements as soon as
practicable, but in any event, within twenty (20) days. The resolution of
the dispute by the Independent Auditor shall be final, binding and
non-appealable on the parties hereto. The costs and expenses of the
Independent Auditor shall be paid equally by Purchaser and the Sellers.
(f) Payment of Adjustments from Escrow Fund. If, based on the
Closing Date Working Capital, the Working Capital Adjustment, the AS
Tangible Equity and the AS Tangible Equity Adjustment as finally
determined pursuant to Section 2.6(e) (the aggregate of the Working
Capital Adjustment and the AS Tangible Equity Adjustment shall be referred
to herein as the "Final Adjustment") the Final Adjustment is a positive
number, the Purchaser and the Sellers shall forthwith (but in any event
within three (3) Business Days) instruct the Escrow Agent to release the
Escrow Fund, including any interest thereon, to the Sellers, and the
Purchaser shall forthwith (but in any event within fifteen (15) Business
Days) pay the amount of the Final Adjustment to the Sellers. If, based on
the Closing Date Working Capital, the Work Capital Adjustment, the AS
Tangible Equity and the AS Tangible Equity Adjustment as finally
determined pursuant to Section 2.6(e), the Final Adjustment is a negative
number, the Sellers and the Purchaser shall forthwith (but in any event
within three (3) Business Days) instruct the Escrow Agent to pay such
negative amount to the Purchaser from the Escrow Fund, including any
interest thereon, and to pay any amounts remaining in the Escrow Fund
after such payment to the Sellers. By way of example, and solely for
purposes of illustration, if the Working Capital Adjustment is equal to
$50,000 and the AS Tangible Equity Adjustment is equal to -$10,000, the
Final Adjustment payable to Seller shall equal $40,000. Any payment
required to be made pursuant to this paragraph shall be made by wire
transfer of immediately available funds to an account designated in
writing by the party that is to receive payment of such adjustment.
Sellers and Purchaser agree that the party required to pay the Final
Adjustment pursuant to this Section 2.6(f) shall be liable to the other
party for any amount payable pursuant to this Section 2.6(f) in excess
20
of the Escrow Fund. To the extent required, the Purchase shall pay such
excess amount to Sellers within fifteen (15) Business Days of the
determination of the Final Adjustment.
(g) EarthShell Equipment. Purchaser intends to acquire as part of
the Transferred Assets the first eight (8) units (comprising two (2)
systems) currently on the Sellers' floor and related work-in-process
Inventory and Equipment of Detroit Tool and Engineering Company ("DTE")
relating to an equipment vendor sublicense agreement between DTE and
EarthShell Corporation (the "EarthShell Equipment"). Purchaser hereby
agrees that in the event a purchase order is received for the EarthShell
Equipment following the date hereof but prior to the Closing Date (an
"EarthShell Order"), Purchaser will assume such EarthShell Order if it is
reasonably determined by Xxxx Xxxxxx, or a successor agreed upon by
Purchaser and Parent, that such EarthShell Order includes material terms
(including, without limitation, performance specifications, price and
delivery timetables) substantially similar to, or more favorable to DTE
than, those included in the quotation provided by DTE to Meridian and such
EarthShell Order is not contingent upon the execution and delivery of a
license agreement with EarthShell Corporation. With respect to such
assumed EarthShell Order, Parent shall be entitled to the greater of (i)
50% of the profit earned on such EarthShell Equipment, and (ii) $1,000,000
(the "EarthShell Profit"). Purchaser shall pay the EarthShell Profit to
Parent promptly upon acceptance of the EarthShell Equipment by the
customer on the customer's floor pursuant to the terms of the EarthShell
Order with respect to the EarthShell Equipment, and such payment shall be
deemed to be in addition to the Final Purchase Price. For purposes of this
Section 2.6(g), the EarthShell Profit shall equal the pro rata revenue
received by Purchaser from the EarthShell Order related to the EarthShell
Equipment minus only those costs and expenses specifically and directly
incurred by Purchaser with respect to the EarthShell Equipment after the
date such EarthShell Order is received. Such costs and expenses shall be
incurred by Purchaser consistent with the past practices of DTE and
Purchaser agrees that Parent shall be permitted reasonable access to
review the Purchaser's books and records related to the determination of
the EarthShell Profit. By way of example, if the EarthShell Order is for
sixteen (16) units (comprising four (4) systems), the pro rata revenue
would be based on fifty percent (50%) of the EarthShell Order. Purchaser
covenants and agrees that it will not, prior to the Closing Date,
interfere with Sellers' efforts to obtain an acceptable EarthShell Order
or contact potential customers of Sellers concerning the EarthShell
Equipment.
Section 2.7. Allocation of the Final Purchase Price. Following the
Closing, the Purchaser will submit to the Sellers its allocation of the Final
Purchase Price for the Transferred Assets (including the cash purchase price and
the assumption of the Assumed Liabilities) subject to the approval of the
Sellers, which approval shall not be unreasonably withheld, and pursuant to
Section 1060 of the Tax Code and the regulations thereunder (the "Allocation").
Except as otherwise required by law, the Purchaser and the Sellers agree to use
such Allocation in filing all required forms under Section 1060 of the Tax Code
and not take any position inconsistent with such Allocation upon any examination
of any such Tax Return, in any refund claim or in any tax litigation. The
Sellers and the Purchaser shall also file IRS form 8594 in a manner consistent
with this Section 2.7.
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Section 2.8. Contract Rejection and Assumption. Schedule 2.8 sets forth a
true and complete list prepared by the Sellers of the following: all executory
Contracts of the Sellers as of the date of this Agreement that relate to (a) the
Intellectual Property of the Sellers, or (b) the provision of goods or services
by the Sellers, including, without limitation, statements of work and pending
proposals to provide goods or services, including for each of the Contracts
identified in clauses (a) and (b), Sellers' good faith estimate of the aggregate
amount or other actions required to cure any defaults or breaches under those
Contracts at the Closing. Schedule 2.8 also sets forth a true and complete list
prepared by the Sellers of any other material executory Contracts of the
Sellers, including for each of the Contracts that relate to the Transferred
Assets, Sellers' good faith estimate of the aggregate amount of Cure Costs as of
the date hereof. The agreements identified on Schedule 2.8 (collectively, the
"Designated Contracts List") with an asterisk are referred to herein
collectively as the "Designated Contracts". The Designated Contracts are
included within the Transferred Assets, and at the Closing, subject to Section
365 of the Bankruptcy Code, the Sellers shall assign all of the Designated
Contracts to Purchaser, on the terms and subject to the conditions of this
Agreement. No later than three (3) Business Days prior to the Sale Hearing,
Sellers shall update their good faith estimate of Cure Costs for the Contracts
on Schedule 2.8. Purchaser shall have the option, which shall be exercisable no
later than two (2) Business Days prior to the Closing Date, to exclude from the
Transferred Assets any Contract or pending proposal, whether or not previously
identified as a Designated Contract, or to add to the Transferred Assets any
Contract, whether or not previously identified as a Designated Contract, or
pending proposals; provided, that in no event shall the Initial Purchase Price
be affected by any such exclusion or addition of any Contract from the
Transferred Assets. Upon exercise of the option in the preceding sentence, the
Designated Contracts List shall be deemed to be modified to give effect to such
change as of the date hereof; provided that notwithstanding anything herein to
the contrary, the Sellers shall, pursuant to Section 365 of the Bankruptcy Code
and the terms of this Agreement, move the Bankruptcy Court for the entry of a
Final Order authorizing the Sellers to assume and assign to Purchaser at the
Closing any Contracts added to the Acquired Assets by Purchaser that were not
previously included on the Designated Contracts List pursuant to the exercise of
the option in the previous sentence ("Added Contracts"), but in the event any
Added Contracts cannot be assumed and assigned at the Closing, Sellers shall
proceed expeditiously after the Closing to obtain that relief.
Section 2.9. Cure of Defaults. Subject to the prior approval of the
Bankruptcy Court and only to the extent required under Section 2.3, the
Purchaser shall, on or prior to the Closing or such later date as may be set
forth in the Sale Order, any other Final Order of the Bankruptcy Court with
respect to Added Contracts or in a written agreement between Purchaser and the
Person entitled thereto, pay to such Person the amount necessary to cure any and
all monetary defaults and breaches under and satisfy (or, with respect to any
Assumed Liability or obligation that cannot be rendered non-contingent and
liquidated prior to the Closing Date, make effective provision reasonably
satisfactory to the Bankruptcy Court for satisfaction from funds of the
Purchaser) any Assumed Liability with respect to each Designated Contract with
such Person as may be assumed by the Sellers and assigned to the Purchaser in
accordance with the provisions of Section 365 of the Bankruptcy Code and this
Agreement.
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ARTICLE III
THE CLOSING
Section 3.1. Time and Place of Closing. The Closing shall take place at
10:00 a.m., Illinois time, on the Closing Date at the offices of Xxxxxx Xxxxxx
Xxxxx Xxxxxxxx, 000 X. Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000. The
Closing, the Transfer of the Transferred Assets, the effectiveness of the other
Acquisition Documents, and the consummation of the transactions contemplated
hereby shall be deemed to occur at the Effective Time.
Section 3.2. Deliveries at Closing.
(a) Deliveries by Purchaser. At or prior to the Closing, the
Purchaser shall deliver to the Sellers the following:
(i) a wire transfer in immediately available funds of the
Purchase Price, as adjusted in accordance with Section 2.5(b) above;
(ii) the Assignment and Assumption Agreement;
(iii) a certificate of an executive officer of the Purchaser
to evidence compliance with the conditions set forth in Sections
10.1 through 10.2 hereof and any other certificates to evidence
compliance with the conditions set forth in Article X hereof as may
be reasonably requested by the Sellers or their counsel;
(iv) any Cure Costs required pursuant to Section 2.9 hereof;
and
(v) such other documents as reasonably requested by Sellers,
including certificates of good standing, board of director
resolutions and certificates of incumbency and specimen signatures.
(b) Deliveries by the Sellers and Parent. At or prior to the
Closing, the Sellers (or their Affiliates, if applicable) shall deliver to
the Purchaser the following:
(i) the Xxxx of Sale;
(ii) the Assignment and Assumption Agreement;
(iii) a certificate of an executive officer of Sellers to
evidence compliance with the conditions set forth in Sections 9.1
through 9.2 hereof and any other certificates to evidence compliance
with the conditions set forth in Article IX hereof as may be
reasonably requested by the Purchaser or its counsel; and
(iv) such other documents as reasonably requested by the
Purchasers, including assignments and assumptions (including
assignments of Intellectual Property in form and substance
sufficient for filing), certificates of title, stock certificates or
notarial deeds evidencing Parent's ownership interest in the
23
Acquired Subsidiary (and any Articles of Association or similar
organizational documents for the Acquired Subsidiary), certificates
of good standing, board and stockholder resolutions, and
certificates of incumbency and specimen signatures.
Section 3.3. Assignment of Designated Contracts, Etc. Anything contained
herein to the contrary notwithstanding, this Agreement shall not effect the
Transfer of any Designated Contract or any claim, right, or benefit arising
thereunder or resulting therefrom, if, notwithstanding the provisions of
Sections 363 and 365 of the Bankruptcy Code, a Transfer thereof, without the
Approval of the non-debtor party thereto, would excuse the non-debtor party
thereto from accepting performance from the Purchaser, constitute a breach
thereof or in any way affect the rights of Sellers or the Purchaser, as the case
may be, thereunder (collectively, "Restricted Assets"). Any Transfer to the
Purchaser of any Restricted Asset which shall, notwithstanding the provisions of
Sections 363 and 365 of the Bankruptcy Code, require the Approval of any
non-debtor party for such Transfer as aforesaid shall be made subject to such
Approval being obtained.
Section 3.4. Sales, Use and Other Taxes. Any sales, use, purchase,
transfer, stamp, or documentary stamp Taxes which may be payable by reason of
the sale of the Transferred Assets under this Agreement for the transactions
contemplated herein and any and all claims, charges, interest or penalties
assessed, imposed or asserted in relation to any such taxes, shall be the
responsibility and obligation of and timely paid by the Sellers and the Parent.
In no event shall any party to this Agreement be responsible for the income
Taxes of any other party that arise as a consequence of the transactions
consummated hereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND PARENT
With respect to the representations and warranties of Sellers and Parent,
the Purchaser specifically acknowledges and agrees that the Purchaser will not
have any recourse to Sellers, Parent or to any of the officers or directors of
Sellers or Parent in the event any of the representations and warranties made
herein or deemed made are untrue as at any time of expression thereof. The only
remedy for a breach of such representations and warranties shall be the
Purchaser's option, under certain circumstances, not to close in accordance with
and subject to the limitations set forth herein and, without limiting the
foregoing, the Purchaser shall have no remedy whatsoever for any such breach
after the Closing.
As an inducement to the Purchaser to enter into this Agreement, the
Sellers and the Parent represent and warrant as of the date hereof as follows:
Section 4.1. Organization. Each of the Sellers, the Parent and the
Acquired Subsidiary is a corporation duly organized, validly existing and (where
applicable) in good standing under the laws of its jurisdiction of
incorporation, formation or organization and except as affected by the pendency
of the anticipated Bankruptcy Cases, has the requisite power and authority to
own, operate and lease its properties and assets and to conduct the Business as
it is now being owned, operated, leased and conducted.
Section 4.2 Capitalization. As of the date hereof, the Acquired Stock is
owned of record by Parent. The Acquired Stock has been duly authorized and is
validly issued, fully paid and nonassessable. Except as set forth on Schedule
4.2, other than the Acquired Stock, there are not any other equity securities
authorized, issued or outstanding, and there are no agreements or other rights
or arrangements existing or outstanding which provide for the sale or issuance
of any of the foregoing by the Acquired Subsidiary. Except as set forth on
Schedule 4.2, there are no rights, subscriptions, warrants, options, conversion
rights or agreements of any kind outstanding to purchase or otherwise acquire
any capital securities or other equity securities of the Acquired Subsidiary of
any kind. There are no agreements or other obligations (contingent or otherwise)
which require the Acquired Subsidiary to repurchase or otherwise acquire any
capital securities or other equity securities. The Acquired Subsidiary has no
Liabilities, except for Liabilities (i) reserved against or reflected in the
February 29, 2004 financial statements of the Acquired Subsidiary provided to
Purchaser (the "AS Financial Statements"), (ii) incurred after the date of the
AS Financial Statements, provided that such Liabilities are incurred in the
ordinary course of business, consistent with past practices, or (iii) as set
forth on Schedule 4.2.
Section 4.3 Power and Authority. Subject to Bankruptcy Court approval
pursuant to the Sale Order, (i) each of the Sellers and Parent has the requisite
corporate power and authority to execute and deliver this Agreement and the
other Acquisition Documents to which it is a party and to perform its
obligations hereunder and thereunder and consummate the transactions
contemplated hereby and thereby, (ii) the execution and delivery by Sellers and
Parent of this Agreement and the other Acquisition Documents to which it is a
party, the performance of its obligations hereunder and thereunder and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary corporate actions on the part of each Seller
and Parent, subject to the approval and adoption of this Agreement and the
approval of the Transaction by Parent as sole stockholder of the Sellers, and
(iii) this Agreement and each other Acquisition Document to which any Seller or
Parent is a party will constitute, upon the mutual execution and delivery
thereof, the legal, valid and binding obligation of Sellers and Parent,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to or affecting creditors generally and by
general equity principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
Section 4.4 No Violation. Neither the execution and delivery by Sellers
and Parent of this Agreement or any of the other Acquisition Documents to which
it is a party, the performance by it of its obligations hereunder or thereunder,
nor the consummation by it of the transactions contemplated hereby or thereby,
will (i) contravene any provision of the certificate of incorporation and bylaws
(or equivalent charter documents) of any Seller, Parent or the Acquired
Subsidiary; (ii) result in the creation or imposition of any Lien upon any of
the properties or assets of any Seller, the Parent or the Acquired Subsidiary,
or (iii) violate or conflict with any Law or any judgment, decree or order of
any Governmental Authority to which any Seller, the Parent or the Acquired
Subsidiary is subject or by which it or any of its assets or properties are
bound.
Section 4.5 Actions. Except as set forth on Schedule 4.5, and except for
Actions to be filed in the Bankruptcy Court with respect to the Bankruptcy
Cases, there is no Action pending or, to the Knowledge of any Seller,
threatened, against any Seller, the Parent or the
25
Acquired Subsidiary before any Governmental Authority relating to the Business
or any Transferred Asset, or that questions or challenges the validity of this
Agreement or the other Acquisition Documents or any action taken or proposed to
be taken by any Seller, the Parent or the Acquired Subsidiary pursuant hereto or
thereto or in connection with the transactions contemplated hereby or thereby.
Section 4.6 Compliance with Laws. Except as set forth on Schedule 4.6, and
except as excused by the Bankruptcy Code or in connection with the Bankruptcy
Cases, and except as would not adversely impact in any material respect (i) the
valid Transfer of the Transferred Assets to the Purchaser, (ii) the operation of
the Business by the Purchaser following the Closing Date and (iii) the value of
the Transferred Assets Transferred to the Purchaser on the Closing Date, (A)
neither Sellers, Parent nor the Acquired Subsidiary are in violation of any Laws
relating to the Business or the Transferred Assets, (B) neither Sellers, Parent
nor the Acquired Subsidiary have been notified in writing nor has any Knowledge
that it has been charged with or threatened in writing with, any charge
concerning any violation of any provision of any Law relating to the Business or
the Transferred Assets that has not already been resolved, and (C) neither
Sellers, Parent nor the Acquired Subsidiary are in violation of, or in default
under, and no event has occurred which, with the lapse of time or the giving of
notice, or both, would result in the violation of or default under, the terms of
any judgment, decree, order, injunction or writ of any Governmental Authority
relating to the Transferred Assets or the Business. The Sellers have complied
with the WARN Act, and any similar law of any applicable State, with respect to
its operations in Benton Harbor, Michigan.
Section 4.7 Title to Property. Except as set forth on Schedule 4.7, each
of the Sellers and Parent has, and at the Closing will transfer to the
Purchaser, good and marketable title to, or a valid leasehold interest in, all
of the Transferred Assets free and clear of all Liens (other than Permitted
Exceptions).
Section 4.8 Approvals. Except (i) for Approval of the Bankruptcy Court,
(ii) for Approval under the HSR Act, if applicable, and (iii) as otherwise set
forth on Schedule 4.8, no Approval of any Governmental Authority or other Person
is required to be made, obtained or given by or with respect to Sellers in
connection with the execution or delivery by Sellers of this Agreement and the
other Acquisition Documents to which they are a party, the performance by them
of their obligations hereunder or thereunder or the consummation by them of the
transactions contemplated hereby or thereby, including without limitation the
Transfer of the Transferred Assets to the Purchaser.
Section 4.9 Broker's or Finder's Fees. Except as set forth on Schedule
4.9, the Sellers have not authorized any Person to act as broker, finder,
banker, consultant, intermediary or in any other similar capacity which would
entitle such Person to any investment banking, brokerage, finder's or similar
fee in connection with the transactions contemplated by this Agreement or any of
the other Acquisition Documents.
Section 4.10 Real Property. Schedule 4.10 sets forth the street address of
each parcel of real property (the "Real Property") held for use or used in the
operation of the Business owned, leased or subleased by Sellers or the Acquired
Subsidiary and the name of the lessor or sublessor. Except as set forth on
Schedule 4.10, no matter (recorded or unrecorded) exists with
26
respect to the Real Property that (i) is material in nature, and (ii) would be
raised as an exception to title (and not capable of being insured over) or an
exclusion from coverage under a policy of title insurance. Neither the Sellers
nor the Acquired Subsidiary have received notice of, and continuation of the
present locations, uses, occupancies and operations will not result in a
violation of, any zoning, building, health, safety, disability, environmental,
pollution control, fire or similar law, ordinance, order, directive or
regulation respecting the Real Property or any part thereof. There has been no
damage or loss to the Real Property by any fire or other casualty, any act of
God or any hazard prior to the date hereof. The Sellers and the Acquired
Subsidiary own good, marketable and indefeasible fee simple title to the Real
Property owned by the Sellers or the Acquired Subsidiary, respectively, subject
only to real estate taxes not yet due and payable and Liens set forth on
Schedule 4.10, which Liens will be satisfied at Closing.
Section 4.11 Designated Contracts. Schedule 2.8 is true and complete as of
the date of this Agreement, and as amended in accordance with Section 2.8, will
be true and complete as of the Closing Date. True and complete copies of each
written Contract (or written summaries of the terms of any oral Contract)
included in the Transferred Assets have been previously made available to
Purchaser. All Contracts to which the Sellers are parties that are material to
the Intellectual Property of Sellers or otherwise material to the Business are
set forth on Schedule 2.8. All Designated Contracts as of the date hereof, and
those Contracts identified in Schedule 2.8, are valid and binding obligations of
Sellers and, upon entry of the Sale Order or the Final Order regarding the Added
Contracts, as the case may be, and assuming duly authorized execution by the
other party thereto, will be enforceable in accordance with their terms, and
such Designated Contracts are in full force and effect.
Upon the cure of defaults in accordance with Section 2.8 and 2.9, the
Sellers will have cured in all material respects the obligations required
pursuant to each Designated Contract and the Bankruptcy Court to have been
performed by them through the Closing Date. Other than the defaults to be cured
in accordance with Section 2.9, there is not as of the date hereof, and will not
be as of the Closing Date, any default under any of the Designated Contracts on
the part of the Sellers or, to the Knowledge of Sellers, any other party to the
Designated Contracts, nor have the Sellers received notice of a default as of
the date hereof, nor will they receive such a notice of default as of the
Closing Date, under any of the Designated Contracts from any other party to the
Designated Contracts or, except in accordance with the Bankruptcy Code, sent
notice of any such default as of the date hereof, or will send such a notice as
of the Closing Date, under any of the Designated Contracts to any other party to
the Designated Contracts. Other than the defaults to be cured in accordance with
Section 2.8 and Section 2.9, no event has occurred that, with the giving of
notice or the lapse of time, or both, could constitute a default as of the date
hereof, or as of the Closing Date, on the part of the Sellers under any of the
Designated Contracts nor, to the Knowledge of Sellers, has any event occurred
which with the giving of notice or the lapse of time, or both, could constitute
a default as of the date hereof, or as of the Closing Date, on the part of any
other party to any of the Designated Contracts.
Section 4.12 Intellectual Property. Schedule 4.12 of this Agreement
contains a true and complete list of all Intellectual Property. Except as
disclosed on Schedule 4.12, (x) Parent, Sellers or the Acquired Subsidiary are
the owner of all right, title and interest in and to each item of Intellectual
Property and/or has the valid right to use such Intellectual Property, (y)
except for Intellectual Property excluded from the Transferred Assets pursuant
to Section 2.8, all such
27
rights, titles and interests are part of the Transferred Assets and will be
acquired, free and clear of all Liens (except the Permitted Exceptions), and (z)
the Sellers', Parent's and Acquired Subsidiary's ownership and/or use of the
Intellectual Property does not infringe the rights of any Person.
Section 4.13 "AS IS" Transaction. The Purchaser hereby acknowledges and
agrees that, except as otherwise expressly provided in this Agreement, Sellers
make no representations or warranties whatsoever, express or implied, with
respect to any matter relating to the Business or the Transferred Assets,
including, without limitation, income to be derived or expenses to be incurred
in connection with the Transferred Assets, the physical condition of any
personal property comprising a part of the Transferred Assets or which is the
subject of any Assigned Contract to be assumed by the Purchaser 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 Assigned Lease
to be assumed by the Purchaser at the Closing, the zoning of any such real
property or improvements, the value or transferability of the Transferred Assets
(or any portion thereof), the terms, amount, validity or enforceability of any
Assumed Liabilities, the title of the Transferred Assets (or any portion
thereof), the merchantability or fitness of the Transferred Assets (or any
portion thereof for any particular purpose, or any other matter or thing
relating to the Business or the Transferred Assets or any portion thereof).
Without in any way limiting the foregoing, Sellers hereby disclaim any warranty
(express or implied) of merchantability or fitness for any particular purpose as
to any portion of the Transferred Assets. The Purchaser further acknowledges
that the Purchaser has conducted an independent inspection and investigation of
the physical condition of the Transferred Assets and all such other matters
relating to or affecting the Transferred Assets as the Purchaser deemed
necessary or appropriate and that in proceeding with its acquisition of the
Transferred Assets, the Purchaser is doing so based solely upon such independent
inspections and investigations. Accordingly, the Purchaser will accept the
Transferred Assets at the Closing "AS IS," "WHERE IS," and "WITH ALL FAULTS."
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
As an inducement to Sellers and Parent to enter into this Agreement,
Purchaser hereby represents and warrants as of the date hereof and as of the
Closing Date as follows:
Section 5.1 Organization and Good Standing. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has the requisite corporate power and
authority to own, operate and lease its properties and assets and to conduct its
business as they are now being owned, operated, leased and conducted. Purchaser
is duly qualified or licensed to do business as a foreign corporation and is in
good standing in every jurisdiction where such qualification is material to the
Business.
Section 5.2 Power and Authority. The Purchaser has the requisite corporate
power and authority to execute and deliver this Agreement and the other
Acquisition Documents, perform its obligations hereunder and thereunder and
consummate the transactions contemplated hereby and thereby. The execution and
delivery by the Purchaser of this Agreement and the other
28
Acquisition Documents to which it is a party, the performance by it of its
obligations hereunder and thereunder and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate actions on the part of the Purchaser. This Agreement and
each other Acquisition Document to which the Purchaser is a party will
constitute upon the mutual execution and delivery thereof the legal, valid and
binding obligation of the Purchaser, enforceable against it in accordance with
its terms, except as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar Laws now or hereafter in effect relating
to creditors' rights generally and subject to general principles of equity.
Section 5.3 No Violation. Except as would not materially adversely impair
the ability of the Purchaser to consummate the Transaction, neither the
execution and delivery by the Purchaser of this Agreement or any of the other
Acquisition Documents to which it is a party, the performance by it of its
obligations hereunder or thereunder, nor the consummation by it of the
transactions contemplated hereby or thereby, will (i) contravene any provision
of the certificate of incorporation and bylaws of the Purchaser; (ii) result in
the creation or imposition of any Lien upon any of the properties or assets of
the Purchaser, or (iii) violate, conflict with or require any Approval, other
than Approval by the Bankruptcy Court, under, any Law or any judgment, decree or
order of any Governmental Authority to which the Purchaser is subject or by
which it or any of its assets or properties are bound.
Section 5.4 Approvals. Except as set forth on Schedule 5.4 and under the
HSR Act, if applicable, no Approval of any Governmental Authority or other
Person is required to be made, obtained or given by or with respect to the
Purchaser in connection with the execution or delivery by it of this Agreement
and the other Acquisition Documents, the performance by it of its obligations
hereunder or thereunder or the consummation by it of the transactions
contemplated hereby or thereby.
Section 5.5 Solvency; Availability of Funds.
(a) As of the Closing and immediately after consummating the
Transaction and the other transactions contemplated by the Acquisition
Documents, the Purchaser will not (i) be insolvent (either because its
financial condition is such that the sum of its debts is greater than the
fair value of its assets or because the present fair value of its assets
will be less than the amount required to pay its probable Liability on its
debts as they become absolute and matured), (ii) have unreasonably small
capital with which to engage in its business, including the Business, or
(iii) have incurred or plan to incur debts beyond its ability to repay
such debts as they become absolute and matured.
(b) No later than one (1) Business Day prior to the Bidding
Procedures Hearing (as defined below), the Purchaser shall make a call
upon such financing commitments as are sufficient funds to enable it to
pay the Initial Purchase Price (without regard to any Estimated Net
Working Capital Excess) in full at Closing and consummate the transactions
contemplated under the Acquisition Documents. Purchaser covenants and
agrees that it shall have sufficient funds to enable it to pay the Initial
Purchase Price in full at Closing (without regard to any Estimated Net
Working Capital Excess).
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Section 5.6 Investment Representation. The Purchaser is purchasing the
Acquired Stock for its own account with the present intention of holding the
Acquired Stock for investment purposes and not with a view to or for sale in
connection with any public distribution of the Acquired Stock in violation of
any federal or state securities laws. The Purchaser has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of an investment in the Acquired Stock. Purchaser
acknowledges that the Acquired Stock has not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or any state or
foreign securities laws and that the Acquired Stock may not be sold,
transferred, offered for sale, pledged hypothecated or otherwise disposed of
unless such transfer, sale, assignment, pledge, hypothecation or other
disposition is pursuant to the terms of an effective registration statement
under the Securities Act and is registered under any applicable state or foreign
securities laws or pursuant to an exemption from registration under the
Securities Act and any applicable state or foreign securities laws.
Section 5.7 Affiliated and Associated Persons. As of the date hereof,
there are no officers, directors, employees or Affiliates of any Seller that are
assisting, advising, affiliated with, participating with or otherwise associated
with the Purchaser or any Affiliate of the Purchaser (including as current or
prospective equity-holders or co-investors in or with the Purchaser or its
Affiliates) in connection with the Transaction by reason of any arrangement in
place as of the date hereof, other than any assistance, advice, participation or
association which results from ordinary course business contacts between the
Purchaser and the Sellers and their respective officers, directors, employees or
affiliates as a result of the contemplated sale of the Business.
Section 5.8 Broker's or Finder's Fees. Sellers are represented by and will
pay the fees and expenses of Xxxxxxxx Xxxxx Xxxxxx & Xxxxx Capital ("HLH&Z") as
its exclusive sale agent with respect to the transactions contemplated hereby
and HLH&Z's commission, fees and expenses are to be paid by the Sellers at
Closing as a cost of the transaction in accordance with the terms and provisions
of an order of the Bankruptcy Court approving its retention by the Sellers.
Neither the Purchaser nor any of its Affiliates has authorized any Person to act
as broker, finder, banker, consultant, intermediary or in any other similar
capacity which would entitle such Person to any investment banking, brokerage,
finder's or similar fee in connection with the transactions contemplated by this
Agreement or any of the other Acquisition Documents, except where any fee or
payment due such persons would be solely the obligation of the Purchaser or its
Affiliates.
ARTICLE VI
COVENANTS OF THE SELLERS
The Sellers hereby covenant and agree that, subject to the orders and
direction of the Bankruptcy Court and except as otherwise consented to in
writing by the Purchaser or as otherwise contemplated by this Agreement, from
and after the date hereof until the Closing:
Section 6.1 Conduct of Business. Sellers shall, subject to the
requirements and obligations under the Bankruptcy Code, (i) conduct the Business
in the ordinary course consistent with past practice, to the extent consistent
with the terms of debtor-in-possession
30
financing received by Sellers in connection with the Bankruptcy Cases, (ii)
preserve intact its business organizations and relationships with employees and
persons having dealings with it; (iii) not take any action, or cause the
Acquired Subsidiary to take any action, that would result in the failure of
Sellers to satisfy the closing condition set forth in Section 9.5; (iv) not
institute any new methods of accounting that will vary materially from the
methods used by the Sellers as of the date of this Agreement except as may be
required by GAAP; (v) continue to operate the Sellers' billing and collection
policies and procedures with respect to the Business consistent with the
reasonable business practices of a similarly situated debtor-in-possession; and
(vi) maintain its Books and Records in accordance with the reasonable business
practices of a similarly situated debtor-in-possession; provided that, the
foregoing shall not obligate the Sellers to pay any Claim arising prior to the
Commencement Date other than to avoid the rejection of any Designated Contract,
and provided further that, except for the Real Property leases in Dayton, Ohio
(which Sellers shall not reject prior to fifty-nine (59) days of the date
hereof), the foregoing shall not prevent the Sellers from rejecting Contracts
that are not Designated Contracts being assumed by the Purchaser hereunder
provided that such Sellers provide at least five (5) Business Day's notice to
Purchaser of the hearing on such relief and an opportunity to designate such
Contract as a Designated Contract or Added Contract in accordance with this
Agreement.
Section 6.2 Acquisition Proposals. Anything herein to the contrary
notwithstanding, at or prior to a hearing in the Bankruptcy Court on the motion
to approve the Sale Order, the Sellers may furnish information concerning the
Business to any qualified Person in order to permit such Person to determine
whether to make a higher and better offer for the Transferred Assets at such
hearing or at such time prior to the hearing as the Bankruptcy Court may direct
and the Sellers and their Representatives may solicit, encourage and negotiate
with any Persons to make offers for the Transferred Assets at or prior to such
hearing, as the case may be; provided that, all potential bidders agree to be
subject to substantially the same restrictions and limitations on the use of
such information as those imposed on the Purchaser. Any other prospective
purchaser or Person who receives proprietary information regarding the Sellers
shall also agree to execute a separate non-disclosure agreement in form and
substance similar to the Non-Disclosure Agreement entered into by and between
the Purchaser and Parent on March 11, 2004 (the "Non-Disclosure Agreement"). As
promptly as practicable and in any event no later than two (2) Business Days
prior to an auction of the Transferred Assets, the Sellers shall inform the
Purchaser of the terms and conditions of any competing offer made for any
portion of the Business or the Transferred Assets. Notwithstanding anything to
the contrary set forth herein or in any other written or oral understanding or
agreement between the parties hereto, the parties acknowledge and agree that any
obligations of confidentiality contained herein and therein shall not apply to
the tax treatment and tax structure of the transactions contemplated hereby upon
the earlier to occur of (i) the date of the public announcement of discussions
relating to the transactions, (ii) the date of the public announcement of the
transactions, or (iii) the date of the execution of this Agreement, all within
the meaning of Treasury Regulations Section 1.6011-4; provided, however, that
the foregoing is not intended to affect each party's privilege to maintain, in
its sole discretion, the confidentiality of communications with its attorneys or
with a federally authorized tax practitioner under Section 7525 of the Internal
Revenue Code.
Section 6.3 Access to the Sellers. The Sellers shall use reasonable
efforts to afford the Purchaser and its Representatives reasonable access during
normal business hours throughout any period from and after the date hereof until
the Closing Date, upon one (1) Business Day's
31
prior notice, to the Books and Records, files, pleadings, data base, documents,
properties, facilities, employees and, with Parent's prior approval, which
approval shall not be unreasonably withheld, customers of the Sellers relating
to the Business or the Transferred Assets, as the Purchaser may reasonably
request; provided that such reasonable access shall not unduly interfere with
Sellers' ongoing business, operations or obligations relating to the Bankruptcy
Cases.
Section 6.4 WARN Act. With respect to the Sellers' facility in Lebanon,
Missouri, the Sellers shall deliver any notices contemplated by the WARN Act, or
any similar state law, to the extent that all conditions precedent to requiring
notice have accrued or shall accrue on or before the Closing Date; provided,
however, that Sellers shall not be liable for delivering or failing to deliver
such notices to the extent that any conditions precedent to requiring such
notices shall accrue after the Closing Date.
Section 6.5 Certificate of Service. Within three (3) Business Days of the
date hereof, Sellers shall deliver to Purchaser a certificate of service, which
certificate shall include (i) all parties entitled to notice of the Sellers'
intent to sell the Transferred Assets (and assume and assign the Designated
Contracts) under Bankruptcy Rule 2002, the Bankruptcy Code or other applicable
nonbankruptcy law, and (ii) all parties owning, claiming or asserting a Lien,
Claim or other interest in or to any of the Transferred Assets, including every
other party to a Designated Contract.
ARTICLE VII
COVENANTS OF THE PURCHASER
The Purchaser hereby covenants and agrees that, except as otherwise
consented to in writing by the Sellers, from and after the date hereof until the
Closing:
Section 7.1 No Interference with Bankruptcy Cases. So long as the
Bankruptcy Cases shall be pending and the Purchaser has not terminated this
Agreement pursuant to Section 12.1, the Purchaser shall not acquire whether
directly or indirectly any Claim against or Liability of the Sellers nor
cooperate with, induce or support any entity (other than the Sellers) in the
acquisition of any Claim against or Liability of the Sellers, in the formation
of a plan of reorganization in the Bankruptcy Cases, in the objection to the
Sale Order, or in seeking the appointment of a Chapter 11 trustee or examiner or
the conversion of the Bankruptcy Cases to a case under Chapter 7 of the
Bankruptcy Code.
Section 7.2 Adequate Assurance. Purchaser shall provide evidence and
argument in support of the Sale Order in order to establish its ability to
provide "adequate assurance of future performance" (within the meaning of
Section 365(f)(2)(B) of the Bankruptcy Code) of any Contract identified as a
Designated Contract. The Sellers agree to use their commercially reasonable
efforts to cooperate with the Purchaser in the presentation of such evidence and
argument. The Bankruptcy Court's refusal to approve the assumption by the
Purchaser of any Designated Contract or Added Contract solely on the grounds
that "adequate assurance of future performance" by the Purchaser of such
Designated Contract or Added Contract has not been
32
provided shall not constitute (i) a failure of the condition precedent described
in Section 9.2 hereof, or (ii) grounds for termination pursuant to Section
12.1(b) hereof.
Section 7.3 Confidentiality. The Purchaser acknowledges that the terms and
provisions of the Non-Disclosure Agreement are in full force and effect. In the
event that this Agreement is terminated and the transactions contemplated hereby
are not consummated, the Non-Disclosure Agreement shall continue to be in full
force and effect in accordance with its terms
ARTICLE VIII
AGREEMENTS OF PURCHASER AND SELLERS
Section 8.1 Xxxx-Xxxxx-Xxxxxx Cooperation. To the extent applicable, the
Purchaser and the Sellers shall cooperate with each other (at the sole cost and
expense of the Purchaser) to comply with, and provide the information required
by, the pre-merger notification and waiting period rules of the HSR Act, if
necessary, in any Federal Trade Commission regulations, and in any provisions or
regulations of or relating to the Xxxxxxx Act. In that connection, the Purchaser
and the Sellers shall use diligent efforts to make their joint pre-merger
notification filing with the Federal Trade Commission, if necessary, no later
than three (3) days following the entry of the Sales Order. The Purchaser shall
bear the Sellers' cost of any filing fee in connection with such filing.
Section 8.2 Employees. Purchaser shall have the right, but not the
obligation, to make offers of employment to the employees of the Sellers set
forth on Schedule 8.2, subject to the consummation of the transactions
contemplated in this Agreement. The Purchaser currently intends the terms of
employment offered to such employees of the Sellers set forth on Schedule 8.2 to
be at substantially similar salary levels to those currently enjoyed by such
employees (except where market conditions warrant changes), and with such other
terms and conditions of employment to be determined by the Purchaser.
Section 8.3 Restricted Assets. The Purchaser and the Sellers shall utilize
their commercially reasonable efforts to obtain the Approvals of third parties
as required to validly Transfer the Restricted Assets.
Section 8.4 Bankruptcy Court Orders.
(a) The Sellers hereby confirm that it is critical to the process of
arranging an orderly sale of the Sellers' assets to proceed by selecting
the Purchaser to enter into this Agreement in order to present the
Bankruptcy Court with arrangements for obtaining the highest realizable
prices for the assets and that, without the Purchaser having committed
substantial time and effort to such process, the estates of the Sellers
and Parent would have to employ a less orderly process of sale and thereby
both incur higher costs and risk attracting lower prices. Accordingly, the
contributions of the Purchaser to the process have indisputably provided
very substantial benefit to the estates of the Sellers. The Sellers
acknowledge that the Purchaser would not have invested the effort in
negotiating and documenting this proposed transaction and incurring duties
to pay its outside
33
advisors if the Purchaser were not entitled to the Break-Up Fee incurred
as a result of the Purchaser's attempt to purchase the Acquired Assets, if
the Purchaser is not the successful bidder for the Acquired Assets.
(b) Sellers shall file the Bankruptcy Cases within three (3)
Business Days after the execution of this Agreement. On or before three
(3) Business Days after the commencement of the Bankruptcy Cases, Sellers
shall file a motion or motions with the Bankruptcy Court to set a hearing
(the "Bidding Procedures Hearing") to consider entry of an order in a form
and substance reasonably acceptable to Purchaser (the "Bidding Procedures
Order") approving the Sale Hearing Notice (as defined below) and bidding
procedures applicable to all bidders, including any Person wishing to make
a credit bid under Section 363(k) of the Bankruptcy Code. Among other
things, such Bidding Procedures shall include, without limitation: (i)
authorization of the Break-Up Fee and all other payments to Purchaser
arising under this Agreement a joint and several liability of the Sellers
having priority under Section 364(d)(1) of the Bankruptcy Code and a
surcharge on all Liens in the Transferred Assets and the proceeds thereof,
(ii) all bidders must provide assurance adequate to Sellers (in Sellers'
sole discretion) of their ability to perform the obligations pursuant to
any bid, including a deposit equal to $900,000 in the form of a letter of
credit or immediately available funds; (iii) any competing offer for all
of the Transferred Assets must be in an amount of at least $640,000 in
excess of the Initial Purchase Price and must provide for the direct
payment to Purchaser on or before the closing date of the other sale of
the Break-Up Fee; (iv) any subsequent competing offer, including by the
Purchaser, must be in increments of no less than $100,000; (v) all
competing offers may be for all or any combination of the Transferred
Assets, or any other assets of the Sellers, Parent or Parent's other
Subsidiaries, and on the same or different terms, provided that such
competing offers may not be contingent on financing necessary to
consummate the transaction, and provided further that no such competing
bids may be accepted by the Sellers unless the aggregate deposit and the
aggregate consideration payable to the Sellers thereunder complies with,
and the other terms are subject to, the other provisions set forth in this
Section 8.4(b); (vi) Purchaser shall be entitled to credit the Break-Up
Fee against any competing offer; and (vii) Sellers shall provide notice of
the Sale Hearing to the Sellers' creditors (the "Sale Hearing Notice").
The Bidding Procedures Hearing shall specify the notice to be given to
creditors and other parties in interest in respect of the sale of the
Transferred Assets and otherwise be in form and substance satisfactory to
Purchaser in its reasonable discretion. Sellers, in accordance with
applicable law and in consultation with their creditors, shall determine
whether competing offers submitted pursuant to this Section 8.4(b) shall
be deemed to be higher and better offers. Purchaser shall have standing to
object to (i) Sellers' designation of a qualified competing offer, or (ii)
Sellers' determination that a competing offer is higher and better;
provided that any such objection shall made by Purchaser at the Sale
Hearing.
(c) On or before three (3) Business Days after the commencement of
the Bankruptcy Cases, the Sellers shall file with the Bankruptcy Court a
motion to set a hearing (the "Sale Hearing") to consider entry of a Sale
Order on an expedited basis, which may be the same motion as the motion
seeking the Bidding Procedures Order; and
34
(d) The Sellers shall use its reasonable efforts to obtain the
Bankruptcy Court's entry of (i) the Bidding Procedures Order on or before
May 31, 2004 and in any event as soon as is reasonably practicable, and
(ii) a Sale Order on or before June 30, 2004 approving of this proposed
transaction. The Sale Order shall be in such form and substance reasonably
acceptable to the Purchaser and shall provide, among other things, that:
(i) adequate notice of the Sellers' motion to sell the Transferred Assets
outside of the ordinary course of Sellers' business and to assume and
assign the Designated Contracts duly has been given to all parties
entitled thereto; (ii) Sellers are authorized to consummate the
transactions contemplated by the Agreement and to perform any other act
that is necessary or appropriate for the consummation of the transfer of
the Transferred Assets and to assign the Designated Contracts to
Purchaser; (iii) except for the Assumed Liabilities, the Transferred
Assets shall be conveyed and delivered to Purchaser upon Closing, free and
clear of all Liens, Claims or other interests, with all such Liens, Claims
and interests to attach to the proceeds payable to Sellers; (iv) that
Purchaser has acted in "good faith" in connection with the transactions
contemplated herein, as provided in Section 363(m) of the Bankruptcy Code
and that all conditions and terms of Section 363(f) of the Bankruptcy Code
and the Bankruptcy Rules that are applicable thereto have been satisfied;
and (v) any commissions or fees due to Sellers' brokers and investment
bankers shall be paid out of the net proceeds of the sale of the assets.
(e) In the event an appeal is taken, or a stay pending appeal is
requested or reconsideration is sought, from the Bidding Procedures Order
or Sale Order, the Sellers shall immediately notify the Purchaser of such
appeal or stay request and shall provide to the Purchaser within one (1)
day a copy of the related notice of appeal or order of stay or application
for reconsideration. The Sellers shall also provide the Purchaser with
copies of any other or further notice of appeal, motion or application
filed in connection with any appeal from or application for
reconsideration of either of such orders and any related briefs. Sellers
agree to take all steps as may be reasonable and appropriate to defend
against such appeal, petition or motion and to use its reasonable efforts
to obtain an expedited resolution of such appeal, provided that nothing
herein shall preclude the parties hereto from consummating the
transactions contemplated herein if the Sale Order shall have been entered
and not been stayed and the Purchaser (in its sole discretion) has waived
in writing the condition set forth in Section 9.3(b).
(f) Sellers further agree to include Purchaser on the service list
for all notices, motions, applications, pleadings and other documents
filed in with the Bankruptcy Cases or any related adversary proceedings,
and any notices given pursuant to Sellers' debtor in possession financing
arrangements and to support the entry of an order of the Bankruptcy Court
approving such service by all parties in interest.
ARTICLE IX
CONDITIONS PRECEDENT TO THE PURCHASER'S OBLIGATIONS
The obligations of the Purchaser to purchase and accept transfer and
delivery of the Transferred Assets are subject to the satisfaction on or, where
appropriate, prior to, the Closing
35
Date, of the following conditions, except to the extent that any such condition
may have been waived in writing by the Purchaser on or prior to the Closing
Date:
Section 9.1 Representations and Warranties. The representations and
warranties of the Sellers contained in Article IV of this Agreement shall have
been true and correct in all material respects when made and, except as would
not constitute a Material Adverse Change, will be true and correct at and as of
the Closing Date.
Section 9.2 Performance. The Sellers shall have performed and complied in
all material respects with the covenants and obligations required by this
Agreement to be performed or complied with by the Sellers at or prior to the
Closing Date.
Section 9.3 Sale Order.
(a) The Sale Order shall have been entered and become a Final Order.
(b) Notice of the hearing on the Sale Order shall have been duly
given to (i) all parties entitled to notice of the Sellers' intent to sell
the Transferred Assets (and assume and assign the Designated Contracts)
under Bankruptcy Rule 2002, the Bankruptcy Code or other applicable
nonbankruptcy law, and (ii) all parties owning, claiming or asserting a
Lien, Claim or other interest in or to any of the Transferred Assets,
including all other parties to Designated Contracts.
(c) The Sale Order shall be in full force and effect and not stayed
as of the Closing Date and shall provide that (i) the Sellers are
authorized and directed to enter into the transactions contemplated by
this Agreement and the Acquisition Documents and to execute and deliver
all documents and perform all acts necessary or appropriate to effectuate
the sale of the Transferred Assets to the Purchaser; (ii) the transactions
contemplated by this Agreement are undertaken by the Purchaser in good
faith, as that term is used in Section 363(m) of the Bankruptcy Code, and
the Purchaser shall have all of the benefits of such section; and (iii) in
the event the Purchaser is entitled to receive payment of a purchase price
adjustment pursuant to Section 2.6(f) hereof in an amount greater than the
Escrow Fund, the application of the proceeds of the Transaction by
Parent's senior secured lenders shall be provisional and, upon entry of an
order of the Bankruptcy Court upon motion by Purchaser or Sellers with
notice to such lenders, such lenders shall remain subject to the
jurisdiction of the Bankruptcy Court and obligated to forthwith disgorge
and remit to Purchaser any such payable to Purchaser as a post-closing
adjustment hereunder from the Transaction proceeds received by such
lenders.
Section 9.4 Expiration of the HSR Act Waiting Period. The applicable
waiting period, if any, required under the HSR Act with respect to the
Transaction shall have expired or been terminated and all other approvals set
forth on Schedule 5.4 shall have been received or waived by Purchaser.
Section 9.5 Conduct of Business. Following the date hereof, (i) the
Sellers shall not have suffered any casualty, damage, destruction or loss, or
any material interruption in use, of any material assets or property (whether or
not covered by insurance), on account of fire, flood, riot, strike or other
hazard or act of God; (ii) the Acquired Subsidiary shall not have not
36
paid, declared or set aside any dividend or other distribution on its securities
of any class or purchased, exchanged or redeemed any of its securities of any
class; and (iii) the Sellers shall have not made any material change in
accounting or Tax methods or principles.
Section 9.6 Material Adverse Changes. Following the date hereof, neither
the Sellers nor the Business shall have suffered or, to the Sellers' Knowledge,
been threatened with any Material Adverse Change.
Section 9.7 Compliance with Laws. As of the Closing Date, there shall not
be issued and outstanding an order, decree, ruling or injunction of a
Governmental Authority having competent jurisdiction restraining, enjoining or
otherwise prohibiting the transaction contemplated by this Agreement or the
other Acquisition Documents.
ARTICLE X
CONDITIONS PRECEDENT TO THE SELLERS' OBLIGATIONS
The obligations of the Sellers to sell, transfer and deliver the
Transferred Assets are subject to the satisfaction on or, where appropriate,
prior to the Closing Date, of the following conditions, except to the extent
that any such condition may have been waived in writing by the Sellers on or
prior to the Closing Date:
Section 10.1 Representations and Warranties. The representations and
warranties of the Purchaser contained in Article V of this Agreement shall have
been true and correct in all material respects when made and shall be true and
correct in all material respects at and as of the Closing Date (except to the
extent such representations and warranties expressly relate to an earlier date,
in which case such representations and warranties shall be true and correct in
all material respects as of such earlier date.
Section 10.2 Performance. The Purchaser shall have performed and complied
in all material respects with the covenants and obligations required by this
Agreement to be performed or complied with by the Purchaser at or prior to the
Closing Date.
Section 10.3 Sale Order. The Sale Order shall have been entered.
Section 10.4 Expiration of the HSR Act Waiting Period. The applicable
waiting period, if any, required under the HSR Act with respect to the
Transaction shall have expired or been terminated and all other approvals set
froth on Schedule 5.4 shall have been received or waived by Sellers.
ARTICLE XI
COVENANTS AND AGREEMENTS SUBSEQUENT TO THE CLOSING
Section 11.1 Books and Records; Access. After the Closing Date, the
parties hereto shall afford the other parties and their Representatives
reasonable access to their books, records, personnel and other information with
respect to the Business that is necessary for the purpose of obtaining
information related to the Bankruptcy Cases, litigation and investigations,
winding up
37
the Bankruptcy Cases, Taxes and other reasonable business purposes and shall
cooperate with the other parties with respect to such matter. The right of
access described in the immediately preceding sentence shall include the right
to make copies at the reviewing party's expense.
Section 11.2 Further Assurances. In addition to the actions, documents,
files, pleadings and instruments specifically required to be taken or delivered
by this Agreement or the other Acquisition Documents, whether on or before or
from time to time after the Closing, and without further consideration, each
party hereto shall make commercially reasonable efforts to take such other
actions, and execute and/or deliver such other documents, data, pleadings,
files, information and instruments, as the other party hereto or its counsel may
reasonably request in order to effectuate and perfect the transactions
contemplated by this Agreement and the other Acquisition Documents, including
without limitation, such actions as may be necessary to Transfer to the
Purchaser and to place the Purchaser in possession or control of, all of the
rights, properties, assets and businesses intended to be sold, Transferred,
conveyed, assigned and delivered hereunder, or to assist in the collection of
any and all such rights, properties and assets or to enable the Purchaser to
exercise and enjoy all rights and benefits of the Sellers and Parent with
respect thereto.
ARTICLE XII
TERMINATION
Section 12.1 Termination. This Agreement may be terminated at any
time prior to the Closing:
(a) by the mutual written consent of the Purchaser and the
Sellers;
(b) by the Purchaser upon written notice in the event of a material
breach of any covenant or agreement to be performed or complied with by
the Sellers pursuant to the terms of this Agreement or any of the
Acquisition Documents, which breach would result in a condition to Closing
set forth in Article IX hereof becoming incapable of fulfillment or cure
(which condition has not been waived by the Purchaser in writing) prior to
the Drop Dead Date;
(c) by the Sellers upon written notice in the event of a material
breach of any covenant or agreement to be performed or complied with by
the Purchaser pursuant to the terms of this Agreement or any of the
Acquisition Documents, which breach would result in a condition to Closing
set forth in Article X hereof becoming incapable of fulfillment or cure
(which condition has not been waived by the Sellers in writing) prior to
the Drop Dead Date; provided, that Purchaser shall have ten (10) days
following such written notice in which to cure such breach before the
Agreement shall be terminated if, and only if, such breach occurs prior to
the entry of the Sale Order;
(d) by either the Purchaser or the Sellers if any Governmental
Authority having competent jurisdiction shall have issued a final,
non-appealable order, decree, ruling or injunction restraining, enjoining
or otherwise prohibiting the transactions contemplated by this Agreement
or the other Acquisition Documents; and such injunction
38
or restraining order shall not have been dissolved within fifteen 15
Business Days after the entry of the Sale Order; provided, however, that
the right to terminate this Agreement under this Section 12.1(d) shall not
be available to any party who shall not have complied with its
obligations, if any, under Articles VI, VII or VIII, as the case may be,
to avoid the issuance of such order, decree, ruling or injunction;
(e) by the Sellers or the Purchaser upon the Approval by the
Bankruptcy Court of an Alternative Transaction;
(f) by either the Sellers or the Purchaser if (i) the Bankruptcy
Court has not entered the Sale Order on or before June 30, 2004; or (ii)
the Closing shall not have occurred on or before July 15, 2004 (the "Drop
Dead Date"); provided, however, that the right to terminate this Agreement
under this Section 12.1(f) shall not be available to any party whose
failure to fulfill any obligation under this Agreement shall have been the
cause of, or shall have resulted in, the failure of the Closing to occur
on or prior to such date (for purposes of this subsection (f) the failure
or refusal by any party to provide any waiver that under the terms hereof
may be given or withheld in such party's discretion shall not be deemed a
failure to fulfill any obligation under this Agreement);
(g) by Purchaser if the Bankruptcy Court has not entered the
Bidding Procedures Order on or before June 1, 2004;
(h) by Purchaser if any of the Designated Contracts shall have been
rejected pursuant to Section 365 of the Bankruptcy Code or if such
Designated Contracts are not assumed by Sellers and assigned pursuant to
the terms of this Agreement, except as would not constitute a Material
Adverse Change;
(i) by Purchaser if any of the Bankruptcy Cases of Sellers or Parent
shall have been dismissed or converted to a case under Chapter 7 of the
Bankruptcy Code; a trustee or an examiner with expanded powers shall have
been appointed under Section 1104 of the Bankruptcy Code; or
(j) by Purchaser if: (i) Parent or Sellers fail to satisfy their
payroll obligations when due or (ii) the debtor in possession financing or
right to use cash collateral of Parent or Sellers (A) is not obtained by
Parent or the Sellers on or prior to May 17, 2004 or the Purchaser has not
received complete and accurate copies of all documentation evidencing such
financing arrangements on or prior to such date (including any operating
budgets) or (B) terminates or expires; provided, however, that Purchaser
may only exercise its right to terminate the Agreement under this Section
12.1(j) within three (3) Business Days after the Purchaser first obtains
knowledge of the events giving rise to such right to terminate this
Agreement.
Section 12.2 Effect of Termination.
(a) In the event of the termination of this Agreement under Section
12.1, except with respect to this Section 12.2, Section 13.1, Section
13.2, Section 13.3, Section 13.4 and Sections 13.7 through 13.12 hereof,
(i) this Agreement shall forthwith become void, and (ii) subject to the
provisions of Section 12.2(b) below, there shall be no
39
liability on the part of the Sellers, the Purchaser or any of their
respective Representatives and, to the extent set forth in Section 2.5(a),
Purchaser shall be entitled to the return of the Deposit paid hereunder in
accordance with Section 2.5(a) (provided that Sellers shall be entitled to
the Deposit in the event this Agreement is terminated by Sellers pursuant
to Section 12.1(c) hereof).
(b) Notwithstanding the provisions of Section 12.2(a) above, if (i)
there is a termination of this Agreement pursuant to Section 12.1(e) and
(ii) the Purchaser is not in material breach of this Agreement or any
other Acquisition Document, the Sellers shall immediately, upon the
consummation of the Alternative Transaction that gave rise to such
termination, pay to the Purchaser the Break-Up Fee, as a liability
entitled to priority under Section 364(d)(1) in the Sellers' Bankruptcy
Cases and a surcharge on all Liens on the Transferred Assets and the
proceeds thereof, in lieu of any losses the Purchaser may suffer, and not
as a penalty, as the Purchaser's sole and exclusive remedy as a result of
such a termination.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 Public Announcements. Other than statements made in the
Bankruptcy Court (or in pleadings filed therein), the Purchaser and the Sellers
shall consult with each other before issuing any press release or making any
public statement or other public communication with respect to this Agreement or
the Transaction. The Purchaser and the Sellers shall not issue any such press
release or make any such public statement or public communication without the
prior written consent of the other party, which shall not be unreasonably
withheld or delayed; provided, however, that a party may, without the prior
consent of the other party, issue such press release or make such public
statement as may, upon the advice of counsel, be required by applicable Law, any
Governmental Authority with competent jurisdiction or any listing agreement with
any national securities exchange.
Section 13.2 Amendment; Waiver. Neither this Agreement, nor any of the
terms or provisions hereof, may be amended, modified, supplemented or waived
except by a written instrument signed by all of the parties hereto (or, in the
case of a waiver, by the party granting such waiver). No waiver of any of the
terms or provisions of this Agreement shall be deemed to be or shall constitute
a waiver of any other term or provision hereof (whether or not similar), nor
shall such waiver constitute a continuing waiver. No failure of a party hereto
to insist upon strict compliance by another party hereto with any obligation,
covenant, agreement or condition contained in this Agreement shall operate as a
waiver of, or estoppel with respect to, any subsequent or other failure.
Whenever this Agreement requires or permits consent by or on behalf of a party
hereto, such consent shall be given in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 13.2.
Section 13.3 No Survival of Representations and Warranties. The
representations and warranties of the Sellers set forth in Article IV hereof and
the Purchaser set forth in Article V hereof shall not survive the Closing.
40
Section 13.4 Fees and Expenses. Except as otherwise expressly provided in
this Agreement, each of the parties hereto shall bear and pay all fees, costs
and expenses incurred by it or any of its Affiliates in connection with the
origin, preparation, negotiation, execution and delivery of this Agreement and
the other Acquisition Documents and the transactions contemplated hereby or
thereby (whether or not such transactions are consummated) and the performance
of their respective obligations under this Agreement, including, without
limitation, any fees, expenses or commissions of any of its Representatives. The
Sellers and the Parent shall pay the fees and expenses of HLH & Z.
Section 13.5 Notices.
(a) All notices, requests, demands and other communications required
or permitted under this Agreement shall be in writing and mailed or
facsimiled or delivered by hand or courier service:
(i) If to the Sellers or Parent, to:
DT Industries, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx
With a copy, which shall not constitute notice, to:
Xxxxxx Xxxxxx Xxxxx Xxxxxxxx
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxxx X. Elegant
Xxxx. X. Xxxxx
(ii) If to the Purchaser, to:
Xxxxxxxx Street Capital Partners
000 Xxxxx Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxxxx
With a copy, which shall not constitute notice, to:
Xxxxxx Xxxxxx LLP
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxxx and J. Xxxx Xxxxxx
41
(b) All notices and other communications required or permitted under
this Agreement which are addressed as provided in this Section 13.5 (i) if
delivered personally against proper receipt or by confirmed facsimile
transmission shall be effective upon delivery and (ii) if delivered (A) by
certified or registered mail with postage prepaid shall be effective five
(5) Business Days or (B) by overnight Federal Express or similar courier
service with courier fees paid by the sender, shall be effective two (2)
Business Days following the date when mailed or couriered, as the case may
be. Any party hereto may from time to time change its address or facsimile
number for the purpose of notices to such party by a similar notice
specifying a new address or facsimile number, but no such change shall be
deemed to have been given until it is actually received by the party
sought to be charged with its contents.
Section 13.6 Assignment. This Agreement and all of the terms and
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Prior to the
Effective Time, neither this Agreement nor any of the rights, interests or
obligations hereunder may be assigned by the Sellers or the Purchaser, except
the Purchaser may assign its rights with respect to a portion of the Transferred
Assets to a direct or indirect subsidiary of the Purchaser. Any assignment made
in contravention of the terms of this Section 13.6 shall be void ab initio.
Section 13.7 Governing Law; Consent to Jurisdiction.
(a) This Agreement and the legal relations among the parties hereto
shall be governed by and interpreted in accordance with the laws of the
State of Ohio applicable to agreements made and to be performed entirely
within such State.
(b) Until the entry of an order either closing or dismissing the
Bankruptcy Cases, each party hereto (i) irrevocably elects as the sole
judicial forum for the adjudication of any matters arising under or in
connection with the Agreement, and consent to the exclusive jurisdiction
of, the Bankruptcy Court; (ii) expressly waives any defense or objection
to jurisdiction or venue based on the doctrine of forum non-conveniens;
and (iii) stipulates that the Bankruptcy Court shall have in personam
jurisdiction and venue over such party.
(c) After the entry of an order either closing or dismissing the
Bankruptcy Cases, each party to this Agreement hereby irrevocably submits
to the exclusive jurisdiction of any Ohio state or federal court (an "Ohio
Court") in any Action arising out of or relating to this Agreement or the
other Acquisition Documents, and each such party hereby irrevocably agrees
that all claims in respect of such Action shall be heard and determined in
such Ohio Court. Each party, to the extent permitted by applicable Laws,
hereby expressly waives any defense or objection to jurisdiction or venue
based on the doctrine of forum non conveniens, and stipulates that any
Ohio Court shall have in personam jurisdiction and venue over such party
for the purpose of litigating any dispute or controversy between the
parties arising out of or related to this Agreement or the other
Acquisition Documents. In the event any party shall commence or maintain
any Action arising out of or related to this Agreement in a forum other
than an Ohio Court, the other party shall be entitled to request the
dismissal or stay of such Action, and each such party
42
stipulates for itself that such Action shall be dismissed or stayed. To
the extent that any party to this Agreement has or hereafter may acquire
any immunity from jurisdiction of any Ohio Court or from any legal process
(whether through service or notice, attachment prior to judgment,
attachment in aid of execution or otherwise) with respect to itself or its
property, each such party hereby irrevocably waives such immunity.
(d) After the entry of an order either closing or dismissing the
Bankruptcy Cases, each party irrevocably consents to the service of
process of any of the Ohio Courts in any such Action by any means
permitted by the rules applicable in such Ohio Court including, if
permissible, personal delivery of the copies thereof or by the mailing of
the copies thereof by certified mail, return receipt requested, postage
prepaid, to it as its address specified in accordance with Section 13.5
above, such service to become effective upon the earlier of (i) the date
ten (10) calendar days after such mailing or (ii) any earlier date
permitted by applicable Law.
Section 13.8 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER ACQUISITION DOCUMENTS.
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER ACQUISITION AGREEMENTS, AS APPLICABLE, BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 13.8.
Section 13.9 Entire Agreement. This Agreement, the other Acquisition
Documents and the Non-Disclosure Agreement embody the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersede all prior agreements, commitments, arrangements,
negotiations or understandings, whether oral or written, between the parties
hereto, their respective Affiliates or any of the Representatives of any of them
with respect thereto. There are no agreements, covenants or undertakings with
respect to the subject matter of this Agreement, the other Acquisition Documents
and the Non-Disclosure Agreement other than those expressly set forth or
referred to herein or therein and no representations or warranties of any kind
or nature whatsoever, express or implied, are made or shall be deemed to be made
herein by the parties hereto except those expressly made in this Agreement, the
other Acquisition Documents and the Non-Disclosure Agreement.
Section 13.10 Severability. Each term and provision of this Agreement
constitutes a separate and distinct undertaking, covenant, term and/or provision
hereof. In the event that any term or provision of this Agreement shall be
determined to be unenforceable, invalid or illegal in any respect, such
unenforceability, invalidity or illegality shall not affect any other term or
provision hereof, but this Agreement shall be construed as if such
unenforceable, invalid or illegal term or provision had never been contained
herein. Moreover, if any term or provision of this Agreement shall for any
reason be held to be excessively broad as to time, duration, activity,
43
scope or subject, the parties request that it be construed, by limiting and
reducing it, so as to be enforceable to the fullest extent permitted under
applicable Law.
Section 13.11 No Third Party Beneficiaries. Except as and to the extent
otherwise provided herein, nothing in this Agreement is intended, nor shall
anything herein be construed, to confer any rights, legal or equitable, in any
Person other than the parties hereto and their respective successors and
permitted assigns.
Section 13.12 Enforcement. If a party shall be in breach of this
Agreement, such party shall pay on demand all costs and expenses of enforcement
of this Agreement, including reasonable legal fees and expenses.
Section 13.13 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which, when
taken together, shall constitute one and the same instrument.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
44
IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase
Agreement to be duly executed as of the day and year first above written.
SELLERS
DETROIT TOOL AND ENGINEERING COMPANY
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
ASSEMBLY TECHNOLOGY & TEST, INC.
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
ADVANCED ASSEMBLY AUTOMATION, INC.
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
PARENT
DT INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President -- Finance and
CFO
PURCHASER
ASSEMBLY & TEST WORLDWIDE, INC.
By: /s/ Xxxxx Xxxx Xxxxxx
-----------------------------------------
Name: Xxxxx Xxxx Xxxxxx
Title: President
45
LIST OF EXHIBITS AND SCHEDULES
Exhibits
Exhibit A Form of Assignment and Assumption Agreement
Exhibit B Form of Xxxx of Sale
Schedules
Schedule 2.6 Calculation of Target Net Working Capital
Schedule 2.8 Designated Contracts
Schedule 4.2 Capitalization
Schedule 4.5 Actions
Schedule 4.6 Compliance with Laws
Schedule 4.7 Title to Property
Schedule 4.8 Sellers Approvals
Schedule 4.9 Broker's or Finder's Fees
Schedule 4.10 Real Property Leases
Schedule 4.12 Intellectual Property
Schedule 5.4 Purchaser Approvals
Schedule 8.2 Employees of Sellers
EXHIBIT A
FORM OF
ASSIGNMENT AND ASSUMPTION AGREEMENT
For good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, [__________________] (the "Sellers"), hereby assign, grant,
bargain, sell, convey and transfer to Assembly & Test Worldwide, Inc., a
Delaware corporation (the "Purchaser"), all of Sellers' right, title and
interest to the Contracts listed on Schedule I attached hereto together with all
amendments, waivers, supplements and other modifications of and to such
agreements, contracts, licenses and other instruments through the date hereof
(collectively, the "Designated Contracts").
Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in that certain Asset Purchase Agreement, dated as of May
12, 2004, by and among Sellers, DT Industries, Inc., a Delaware corporation, and
Purchaser (the "Purchase Agreement").
Upon the execution and delivery hereof, in consideration of the foregoing
assignment and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Purchaser hereby assumes the Assumed
Liabilities (as such term is defined in Section 2.3(a) of the Purchase
Agreement), including, without limitation the Designated Contracts, to the
extent set forth in, and in accordance with the terms and provisions of, the
Purchase Agreement.
This Assignment and Assumption Agreement shall be binding upon the
successors and assigns of the parties.
[Signature Page Follows]
EXHIBIT A
Executed this __ day of ________, 2004.
SELLERS
DETROIT TOOL AND ENGINEERING COMPANY
By:
-----------------------------------------
Name:
Title
ASSEMBLY TECHNOLOGY & TEST, INC.
By:
-----------------------------------------
Name:
Title
ADVANCED ASSEMBLY AUTOMATION, INC.
By:
-----------------------------------------
Name:
Title:
PARENT
DT INDUSTRIES, INC.
By:
-----------------------------------------
Name:
Title
PURCHASER
ASSEMBLY & TEST WORLDWIDE, INC.
By:
-----------------------------------------
Name:
Title:
EXHIBIT A
SCHEDULE I
THE DESIGNATED CONTRACTS
EXHIBIT B
FORM OF
XXXX OF SALE
For good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, [_____________________] (the "Sellers"), and DT Industries,
Inc., a Delaware corporation (the "Parent"), hereby grant, bargain, transfer,
sell, assign, convey and deliver to Assembly & Test Worldwide, Inc., a Delaware
corporation (the "Purchaser"), all right, title and interest in and to the
Transferred Assets as such term is defined in the Asset Purchase Agreement,
dated as of May 12, 2004 (the "Asset Purchase Agreement"), by and among Sellers,
Parent and Purchaser. Capitalized terms used but not defined herein shall have
the meanings ascribed to such terms in the Asset Purchase Agreement.
This Xxxx of Sale is being executed and delivered by Sellers and Parent as
of the __ day of ________, 2004 pursuant to the terms of the Asset Purchase
Agreement.
[Signature Page Follows]
EXHIBIT B
Executed this ___ day of _________, 2004.
SELLERS
DETROIT TOOL AND ENGINEERING COMPANY
By:
-----------------------------------------
Name:
Title
ASSEMBLY TECHNOLOGY & TEST, INC.
By:
-----------------------------------------
Name:
Title
ADVANCED ASSEMBLY AUTOMATION, INC.
By:
-----------------------------------------
Name:
Title:
PARENT
DT INDUSTRIES, INC.
By:
-----------------------------------------
Name:
Title
PURCHASER
ASSEMBLY & TEST WORLDWIDE, INC.
By:
-----------------------------------------
Name:
Title:
