Exhibit 2.1
ASSET PURCHASE AGREEMENT
BY AND AMONG
SLEEPTEC, INC.
ST. XXXX VENTURE CAPITAL IV, LLC/
ST. XXXX VENTURE CAPITAL V, LLC/
ST. XXXX VENTURE CAPITAL VI, LLC
AND
SELECT COMFORT CORPORATION
DATED AS OF NOVEMBER 10, 2000
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement') is made and entered into
as of November 10, 2000, by and among SLEEPTEC, INC., a Delaware corporation
("Seller"), ST. XXXX VENTURE CAPITAL IV, LLC/ST. XXXX VENTURE CAPITAL V, LLC/ST.
XXXX VENTURE CAPITAL VI, LLC (collectively, "SPVC") and SELECT COMFORT
CORPORATION, a Minnesota corporation ("Buyer").
WHEREAS, Seller is the owner of a sofa sleeper manufacturing and
distribution business that operates under the SleepTec trademark (the
"Business");
WHEREAS, SPVC , or its affiliate, is the majority equity holder of Seller;
and
WHEREAS, Seller wishes to sell certain of the assets used in the Business,
and Buyer wishes to purchase such assets from Seller, all upon and subject to
the terms of this Agreement; and
WHEREAS, SPVC desires to facilitate the transactions contemplated by this
Agreement by providing Buyer with certain assurances and financing terms.
NOW THEREFORE, in consideration of the respective covenants and promises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
---------------------------
1.1 TRANSFER OF ASSETS. Upon the terms and subject to the conditions
contained herein, at the Closing and on the Closing Date (as such terms are
defined herein), Seller agrees to sell, convey, transfer, assign and deliver all
of Seller's right, title and interest in, to and under the following assets (the
"Assets"), and Buyer agrees to purchase from Seller such Assets:
(a) INTELLECTUAL PROPERTY RIGHTS. All patents, patent applications,
patent rights, registered and unregistered trademarks, trademark
applications, names, logos, trade names, service marks, service xxxx
applications, copyrights, computer programs and other computer
software, inventions, know-how, trade secrets, technology, proprietary
processes, trade dress and formulae used in connection with the
Business, including without limitation the intellectual property more
specifically described on SCHEDULE 1.1(A) (collectively, "Intellectual
Property Rights").
(b) INVENTORY. The inventory, including raw materials,
work-in-progress, finished goods and supplies, stored or held in
connection with the Business as set forth on SCHEDULE 1.1(B) (the
"Inventory").
(c) EQUIPMENT. The machinery, equipment, vehicles, spare parts, tools,
dies and supplies, whether in the possession of Seller, Seller's
suppliers or
otherwise, that are used in the Seller's Business and that are
identified or described on SCHEDULE 1.1(C) hereto (the "Equipment").
(d) PERMITS. To the extent assignable, all governmental licenses,
permits or approvals necessary for the conduct of the Business as
currently conducted including without limitation the licenses and
permits described on SCHEDULE 1.1(D) (the "Permits").
(e) PREPAID EXPENSES. All those prepayments or prepaid expenses
relating to the Business listed on SCHEDULE 1.1(E) (the "Prepaid
Expenses").
(f) CUSTOMER LISTS. All customer lists relating to the Business (the
"Customer Lists").
(g) ASSUMED CONTRACTS. Those contracts, purchase orders and sales
orders listed on SCHEDULE 1.1(G) (the "Assumed Contracts").
(h) BOOKS AND RECORDS. All of business records, files, supplier lists,
specifications, sales literature and all other books and records which
relate to the Business and the Assets (the "Books and Records").
1.2 EXCLUDED ASSETS. No assets other than as described in Section 1.1
hereof shall be included as "Assets" to be purchased hereunder. Without limiting
the generality of the foregoing, the following shall be excluded from the
"Assets" sold hereunder (the "Excluded Assets"):
(a) Cash, money and deposits with financial institutions and others,
certificates of deposit, commercial paper, notes, evidences of
indebtedness, stocks, bonds and other investments;
(b) Any right, title and interest under all leases, contracts,
agreements, licenses, permits, exemptions, franchises, variances,
waivers, consents, approvals and other authorizations which are not
included in the Assumed Contracts; and
(c) Inventory and equipment owned by the Seller that are not included
on Schedule 1.1(b) or Schedule 1.1(c).
Seller and SPVC agree that the Excluded Assets shall be used or liquidated
solely to satisfy any liabilities of Seller to its various creditors.
1.3 ASSUMPTION OF LIABILITIES. Upon the terms and subject to the conditions
contained herein, at the Closing, Buyer shall assume and agree to pay, discharge
or perform, as appropriate, only the obligations of Seller accruing, arising out
of or related to the Assumed Contracts(the "Assumed Liabilities"). It is
specifically agreed and understood that any liabilities, obligations or
commitments of any kind or nature that are not specifically included in the
Assumed Liabilities, whether accrued or unaccrued, whether known or unknown, and
whether now
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existing or hereafter arising from the operations of Seller, the
transactions contemplated hereby or otherwise, including without limitation,
liabilities, obligations or commitments:
(a) for any taxes of Seller for any period and any liabilities for any
taxes levied or imposed upon the Assets for any period (or any portion
of any period) ending on or prior to the Closing;
(b) of Seller to its employees incurred or made in connection with
their employment with Seller (except as specified in the Transition
Plan (as defined in Section 5.5 of this Agreement)), including under
the Benefit Plans (as defined in Section 2.8 of this Agreement), the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")
and the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended ("COBRA") (except as provided in Section 5.6(d) below);
(c) arising from the breach or performance of any contract,
commitment, agreement or understanding of any kind, or from the use of
the Assets by Seller that occurred prior to the Closing;
(d) relating to workers' compensation claims in existence as of the
Closing Date or arising from facts or events that occur on or before
the Closing Date; or
(e) relating to product warranty or liability claims arising with
respect to products produced prior to the Closing Date; or
(f) relating to any liens or encumbrances on the Assets;
are excluded from the Assumed Liabilities and shall remain liabilities of the
Seller to be satisfied by Seller (the "Excluded Liabilities").
1.4 PURCHASE CONSIDERATION.
(a) The consideration for the sale, transfer, assignment, conveyance
and delivery of the Assets (the "Purchase Consideration") shall
consist of, and be payable in accordance with, the following:
(i) At the Closing Buyer shall issue to Seller, or its designee,
a five-year non-interest bearing subordinated convertible
debenture in the principal amount of Four Million Dollars
($4,000,000) (the "Debenture") convertible at the election of the
holder into shares of common stock of Buyer based on a conversion
price of $5.50 per share. The Debenture shall be in the form of
EXHIBIT A.
(ii) At the Closing, Buyer shall pay to Seller, or its designee,
the sum of $207,000 (which is equal to $400,000 less the $193,000
previously advanced by Buyer to Seller, which Seller
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acknowledges as received), which shall be paid in immediately
available funds (the "Closing Date Cash Payment"); and
(b) Seller and SPVC hereby acknowledge the determination of the
Purchase Consideration, and agree that the Purchase Consideration
represents fair value for the Assets. Each of Seller and SPVC agree
that it will not challenge the fairness of the Purchase Consideration
in any subsequent negotiation or litigation involving the affairs of
Seller.
(c) Seller and SPVC hereby agree that the Closing Date Cash Payment
will be used by Seller to satisfy liabilities of Seller to its various
creditors.
1.5 ALLOCATION OF PURCHASE PRICE. The Purchase Consideration shall be
allocated as set forth in Schedule 1.5. This allocation shall be binding upon
the parties hereto and each of the parties hereto agrees to file their tax
returns in accordance with this allocation.
1.6 TAXES. Except as otherwise provided in this Agreement, all federal,
state, local, foreign or other taxes, assessments, levies or other government
charges (collectively, "Taxes") in respect of the Assets and income of the
Business for the period or portions of periods ending on or prior to the Closing
Date shall be borne by Seller. Except as otherwise provided in this Agreement,
all Taxes in respect of the Assets and income of the Business as conducted by
Buyer for the period or portions of periods beginning on and after the Closing
Date shall be borne by Buyer.
1.7 CLOSING COSTS, TRANSFER TAXES AND FEES.
(a) Seller shall be responsible for any sales, use, transfer or
documentary taxes and recording fees applicable to the transfer
contemplated by this Agreement. The sales, use and transfer tax
returns required by reason of said transfer shall be timely prepared
and filed by Seller. The parties agree to cooperate with each other in
connection with the preparation and filing of such returns, in
obtaining all available exemptions from such sales, use and transfer
Taxes, and in timely providing each other with resale certificates and
any other documents necessary to satisfy any such exemptions.
(b) If Buyer pays any Tax agreed to be borne by Seller under this
Agreement, Seller shall promptly (within 30 business days after
written notice of the payment is received from the Buyer) reimburse
the Buyer for the amounts so paid. If any party receives any refund or
credit of Tax to which another party is entitled under this Agreement,
the receiving party shall promptly (within 30 days after receipt of
such payment) pay such amounts to the party entitled thereto.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Seller hereby represents and warrants to Buyer, as of the date hereof as
follows:
2.1 ORGANIZATION. Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, has full corporate
power and authority to carry on the Business as it is now being conducted and to
own, lease and operate the properties and assets of the Business, and is duly
qualified or licensed to do business as a foreign corporation in good standing
in every other jurisdiction in which the character or location of the properties
and assets owned, leased or operated by it or the conduct of the Business
requires such qualification or licensing, except in such jurisdictions in which
the failure to be so qualified or licensed and in good standing would not have a
Material Adverse Effect on the Business. For purposes of this Agreement, a
"Material Adverse Effect" with respect to the Business or the Assets shall mean
an effect that is, or is reasonably expected to be, materially adverse to the
business, customers, operations, working capital, financial condition, assets,
properties or liabilities of the Business or the Assets or would prevent Seller
from consummating the transactions contemplated hereby. Seller has no
subsidiaries.
2.2 AUTHORIZATION. Seller has all requisite corporate power and authority,
and has taken all corporate action necessary (including obtaining shareholder
approval), to execute and deliver this Agreement and all other agreements it has
or will execute in connection herewith, to consummate the transactions
contemplated hereby, and to perform its obligations hereunder. This Agreement
and all other agreements it has or will execute in connection herewith, have
been or will be duly executed and delivered by Seller and each such agreement
constitutes or will constitute a legal, valid and binding obligation of Seller
enforceable against Seller in accordance with its terms, except as the
enforceability thereof may be limited by (a) the effect of bankruptcy,
insolvency, liquidation, reorganization, moratorium, fraudulent conveyance,
fraudulent transfer, preferential transfer or distribution laws and other
similar laws now or hereafter in effect relating to or affecting the rights of
creditors generally, and (b) the effect of general principles of equity
(regardless of whether considered in a proceeding in equity or at law).
2.3 CONSENTS AND APPROVALS. No notice to, declaration, filing or
registration with, or authorization, consent or approval of, or permit from, any
domestic or foreign governmental or regulatory body or authority, or any other
person or entity, is required to be made or obtained by Seller in connection
with the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby other than those notices,
declarations, filings or registrations, the failure of which to make, and
authorizations, consents or approvals, the failure of which to obtain, would not
have a Material Adverse Effect on the Business or the Assets.
2.4 NO CONFLICT OR VIOLATION. Neither the execution, delivery or
performance of this Agreement, nor the consummation of the transactions
contemplated hereby, nor compliance by Seller with any of the provisions hereof,
will (a) violate or conflict with any provision of the Certificate of
Incorporation or Bylaws of Seller, (b) violate, conflict with, or result in or
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constitute a default under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or result in the creation of any encumbrance upon any of Seller's assets
under, any of the terms, conditions or provisions of any contract, indebtedness,
note, bond, indenture, security or pledge agreement, commitment, license, lease,
franchise, permit, agreement, authorization, concession, or other instrument or
obligation to which Seller is a party, or (c) violate any statute, rule or other
governmental regulation except, in the case of each of clauses (b) and (c)
above, for such violations, defaults, terminations, accelerations or creations
of encumbrances which, in the aggregate, would not have a Material Adverse
Effect on the Business or the Assets of Seller or its ability to consummate the
transactions contemplated hereby or thereby.
2.5 FINANCIAL INFORMATION. Seller has heretofore supplied to Buyer the
financial information relating to the Business and the Assets, which includes
without limitation the unaudited balance sheet of Seller dated as of September
29, 2000, all attached hereto as Schedule 2.5 (collectively, the "Seller
Financial Information"). The Seller Financial Information presents fairly and
accurately in all material respects the information purported to be presented
therein at the dates indicated therein; provided, however, Buyer acknowledges
that the Seller Financial Information has not been prepared in accordance with
generally accepted accounting principles ("GAAP") and failure to comply with
GAAP shall not be deemed to be a breach of Seller's representation in this
Section 2.5.
2.6 EMPLOYMENT MATTERS. Seller: (i) is in compliance in all material
respects within all applicable foreign, federal, state and local laws, rules and
regulations respecting employment, employment practices, terms and conditions of
employment and wages and hours, in each case, with respect to the employees of
the Business (collectively, the "Employees" and each, individually, an
"Employee"); (ii) has withheld, reported, and paid all amounts required by law
or by agreement to be withheld and reported with respect to wages, salaries and
other payments to Employees; (iii) is not liable for any arrears of wages or any
taxes or any penalty for failure to comply with any of the foregoing; and (iv)
is not liable for any payment to any trust or other fund or to any governmental
or administrative authority, with respect to unemployment compensation benefits,
social security or other benefits or obligations for Employees (other than
routine payments to be made in the normal course of business and consistent with
past practice). There are no pending, or to the knowledge of the Seller
threatened, or reasonably anticipated on the basis of injury or medical
condition known to Seller, claims or actions against Seller under any worker's
compensation policy or long-term disability policy.
2.7 LABOR MATTERS. None of the employees of Seller are represented by any
labor union or collective bargaining unit. There is no labor strike pending or,
to Seller's knowledge, threatened against Seller in connection with the Business
nor is Seller experiencing a work stoppage, slowdown, picketing or employee
grievance process in connection with the Business. There is no unfair labor
practice charge or complaint against Seller pending before the National Labor
Relations Board or any other governmental agency arising out of Seller's
activities in connection with the Business.
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2.8 EMPLOYEE BENEFIT PLANS.
(a) Notwithstanding any provision in this Agreement to the contrary,
for purposes of this Section 2.8, the term "Benefit Plan" means any
pension, retirement, profit sharing, deferred compensation, stock
option, employee stock ownership, severance pay, vacation, bonus or
other incentive plan; any medical, vision, dental or other health or
welfare plan; any life insurance plan or any other employee benefit
plan or fringe benefit plan; any other written or unwritten employee
program, arrangement, agreement or understanding; commitments,
obligations or methods of contribution or compensation (whether
arrived at through collective bargaining or otherwise), whether formal
or informal, whether funded or unfunded, and whether legally binding
or not; any "employee benefit plan," as that term is defined in
Section 3(3) of ERISA, that is currently or previously adopted,
maintained, administered, sponsored in whole or in part, or
contributed to by Seller or any entity that is required to be
aggregated with Seller under Section 414 of the Internal Revenue Code
of 1986, as amended, (the "Code") at any time prior to the Closing
Date, and which shall be referred to as "ERISA Affiliate", for the
benefit of, providing any remuneration or benefits to, or covering any
current or former employee, retiree, dependent, spouse, or other
family member or beneficiary of such employee or retiree, director,
independent contractor, shareholder, officer or consultant of Seller
or any ERISA Affiliate or under (or in connection with) which Seller
or any ERISA Affiliate has any contingent or noncontingent liability
of any kind, whether or not probable of assertion (collectively, the
"Benefit Plans").
(b) All of the Benefit Plans of Seller or any ERISA Affiliate and the
assets retained for the funding of benefits through said Benefit Plans
and any corresponding or related liabilities (except as specified in
the Transition Plan) are specifically excluded from any assets and
liabilities transferred pursuant to this Agreement. Except as
specified in the Transition Plan and Section 4.6(d) below, Buyer is
not obligated to adopt or continue, or assume any obligations of or
responsibilities for, any Benefit Plans maintained by or sponsored by
Seller (or any ERISA Affiliate) or any Benefit Plans in which Seller
(or any ERISA Affiliate) is a participating employer or for which
Seller (or any ERISA Affiliate) has any obligations or
responsibilities.
2.9 NO BROKERS. Seller has not employed or made any agreement with any
broker, finder or similar agent or any person or firm which will result in the
obligation of Buyer to pay any finder's fee, brokerage fees or commission or
similar payment in connection with the transactions contemplated hereby.
2.10 NO OTHER AGREEMENTS TO SELL THE ASSETS. Neither Seller nor any of its
representatives has any commitment or legal obligation, absolute or contingent,
to any other person or firm other than Buyer to sell, assign, transfer or effect
a sale of any of the Assets (other
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than inventory in the ordinary course of business), or to enter into any
agreement or cause the entering into of an agreement with respect to any of the
foregoing.
2.11 TITLE TO ASSETS; CONDITION. At the Closing, Seller shall transfer to
Buyer good and marketable title to all of the Assets, free and clear of any and
all mortgages, security interests, liens, pledges, charges, encumbrances,
equities, claims, easements, rights of way, covenants, conditions or
restrictions. The Inventory is usable and saleable by Buyer in the ordinary
course of business, consistent with past practices. The Equipment is in good
operating condition and repair and fit for the intended purposes thereof,
ordinary wear and tear excepted.
2.12 TAX RETURNS AND AUDITS. Seller has filed all federal, state, and local
tax returns required by law, has correctly reported its income and has paid all
taxes, assessments and penalties shown to be due and payable on such tax returns
within the times and in the manner prescribed by law.
2.13 INTELLECTUAL PROPERTY RIGHTS. Except as set forth in Schedule 1.1(a)
hereto:
(a) Seller owns or has the unrestricted right to enforce and use all
of the Intellectual Property Rights, free and clear of all liens and
encumbrances.
(b) All of the Intellectual Property Rights are subsisting, unexpired,
have not been abandoned and have been properly and validly filed,
submitted or maintained to the applicable government agency if such
filing, submission or maintenance is necessary in order to perfect
such rights. Seller has not misappropriated the trade secrets,
technology, know-how, inventions or the like of any third party. No
judgment, decree, injunction, rule or order, directly or indirectly
relating to Seller's rights in and to the Intellectual Property Rights
has been rendered by any governmental entity which would limit, cancel
or question the validity of or their respective rights in and to, any
of the Intellectual Property Rights. Seller has not received written
notice, and does not otherwise have knowledge, of any pending or
threatened suit, action or proceeding that either does or would limit,
cancel or question the validity of, Seller's rights in and to, any of
the Intellectual Property Rights. Seller has not received notice, and
does not otherwise have knowledge, of any allegations, assertions or
other indications that the manufacturing, marketing or selling of any
of the products of Seller infringe the intellectual property rights of
a third party.
(c) Seller has taken all reasonable measures to maintain the
confidentiality of all of the Intellectual Property Rights the value
of which is contingent, in whole or in part, upon maintenance of the
confidentiality thereof. Seller does not (i) own or use any
Intellectual Property Rights pursuant to any written license agreement
and (ii) has not granted any person or entity any rights, pursuant to
written license agreement or otherwise, to use any of the Intellectual
Property Rights.
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(d) Seller has the sole and exclusive right to market and sell its
products anywhere in the world and no third party has any rights or
claims to prevent such activities of Seller.
(e) Schedule 1.1(a) hereto sets forth a complete and correct list of
all patents, patent applications, trademarks, trademark applications
and licenses (other than licenses for commercially available software)
that are a part of the Intellectual Property Rights.
2.14 ASSUMED CONTRACTS. There is no default or event which, with the lapse
of time or the giving of notice or both, would constitute a default by any party
to any of the Assumed Contracts.
2.15 LITIGATION. Seller is not subject to any legal, administrative,
arbitration or other proceeding, suit, claim or action of any nature, or
investigation, review or audit of any kind, or judgment, decree, decision,
injunction, writ or order pending, noticed, scheduled or, to the knowledge of
Seller, threatened or contemplated by or against or involving the Assets or the
Business, whether at law or in equity, before or by any person or entity or
authority, or against Seller or its directors, officers, agents or employees
that questions or challenges the validity of this Agreement or any action taken
or to be taken by the parties hereto pursuant to this Agreement or in connection
with the transactions contemplated herein.
2.16 TRUTHFUL REPRESENTATIONS. None of the representations, warranties, or
statements made by Seller in this Agreement or in any of the documents described
in Section 8.2 (including any Schedules or Exhibits attached to this Agreement
or such documents described in Section 8.2, either (i) contains or will contain
any untrue statement of a material fact or (ii) omits or will omit any material
fact necessary to make the statements made not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer hereby represents and warrants to Seller, as of the date hereof,
as follows:
3.1 ORGANIZATION OF BUYER. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Minnesota with full
power and authority to own and lease its properties and conduct its business as
it is presently being conducted.
3.2 AUTHORIZATION. Buyer has all requisite corporate power and authority,
and has taken all corporate action necessary, to execute and deliver this
Agreement, to consummate the transactions contemplated hereby and to perform its
obligations hereunder. The execution and delivery of this Agreement and the
consummation by Buyer of the transactions contemplated hereby have been duly
authorized by all necessary corporate action by Buyer. No other corporate
proceedings on the part of Buyer are necessary to authorize this Agreement and
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by Buyer and constitutes a legal, valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms.
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3.3 NO CONFLICT OR VIOLATION. Neither the execution, delivery or
performance of this Agreement, nor the consummation of the transactions
contemplated hereby, nor compliance by Buyer with any of the provisions hereof,
will (a) violate or conflict with any provision of the Articles of Incorporation
or Bylaws of Buyer, (b) violate, conflict with, or result in or constitute a
default under, or result in the termination of, or accelerate the performance
required by, or result in a right of termination or acceleration under, or
result in the creation of any encumbrance upon any of Buyer's assets under, any
of the terms, conditions or provisions of any contract, indebtedness, note,
bond, indenture, security or pledge agreement, commitment, license, lease,
franchise, permit, agreement, authorization, concession, or other instrument or
obligation to which Buyer is a party, or (c) violate any statute, rule or other
governmental regulation except, in the case of each of clauses (b) and (c)
above, for such violations, defaults, terminations, accelerations or creations
of encumbrances which, in the aggregate, would not have a Material Adverse
Effect on the business of Buyer or its ability to consummate the transactions
contemplated hereby or thereby.
3.4 CONSENTS AND APPROVALS. No notice to, declaration, filing or
registration with, or authorization, consent or approval of, or permit from, any
domestic or foreign governmental or regulatory body or authority, or any other
person or entity, is required to be made or obtained by Buyer in connection with
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby.
3.5 NO BROKERS. Buyer has not employed or made any agreement with any
broker, finder or similar agent or any person or firm which will result in the
obligation of Seller to pay any finder's fee, brokerage fees or commission or
similar payment in connection with the transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SPVC
--------------------------------------
SPVC hereby represents and warrants to Seller, as of the date hereof, as
follows:
4.1 ORGANIZATION OF SPVC. SPVC is a corporation duly organized, validly
existing and in good standing under the laws of the State of Minnesota with full
power and authority to own and lease its properties and conduct its business as
it is presently being conducted.
4.2 AUTHORIZATION. SPVC has all requisite corporate power and authority,
and has taken all corporate action necessary, to execute and deliver this
Agreement, to consummate the transactions contemplated hereby and to perform its
obligations hereunder. The execution and delivery of this Agreement and the
consummation by SPVC of the transactions contemplated hereby have been duly
authorized by all necessary corporate action by SPVC. No other corporate
proceedings on the part of SPVC are necessary to authorize this Agreement and
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by SPVC and constitutes a legal, valid and binding obligation of SPVC,
enforceable against SPVC in accordance with its terms.
4.3 NO CONFLICT OR VIOLATION. Neither the execution, delivery or
performance of this Agreement, nor the consummation of the transactions
contemplated hereby, nor compliance by
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SPVC with any of the provisions hereof, will (a) violate or conflict with any
provision of the Articles of Incorporation or Bylaws of SPVC, (b) violate,
conflict with, or result in or constitute a default under, or result in the
termination of, or accelerate the performance required by, or result in a right
of termination or acceleration under, or result in the creation of any
encumbrance upon any of SPVC's assets under, any of the terms, conditions or
provisions of any contract, indebtedness, note, bond, indenture, security or
pledge agreement, commitment, license, lease, franchise, permit, agreement,
authorization, concession, or other instrument or obligation to which SPVC is a
party, or (c) violate any statute, rule or other governmental regulation except,
in the case of each of clauses (b) and (c) above, for such violations, defaults,
terminations, accelerations or creations of encumbrances which, in the
aggregate, would not have a Material Adverse Effect on the business of SPVC or
its ability to consummate the transactions contemplated hereby or thereby.
4.4 CONSENTS AND APPROVALS. No notice to, declaration, filing or
registration with, or authorization, consent or approval of, or permit from, any
domestic or foreign governmental or regulatory body or authority, or any other
person or entity, is required to be made or obtained by SPVC in connection with
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby.
4.5 NO BROKERS. SPVC has not employed or made any agreement with any
broker, finder or similar agent or any person or firm which will result in the
obligation of Seller to pay any finder's fee, brokerage fees or commission or
similar payment in connection with the transactions contemplated hereby.
ARTICLE V
COVENANTS OF THE PARTIES
------------------------
The parties each covenant and agree with the others as follows:
5.1 FURTHER ASSURANCES. Upon the terms and subject to the conditions
contained herein, the parties agree, both before and after the Closing, (i) to
use commercially reasonable efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement
and the Ancillary Agreements, (ii) to execute any documents, instruments or
conveyances of any kind which may be reasonably necessary or advisable to carry
out any of the transactions contemplated hereunder or thereunder, and (iii) to
cooperate with each other in connection with the foregoing. Furthermore, SPVC
hereby agrees that, during the period before the Closing and for the period of
three (3) years following the Closing, it will: (i) not make any filings or
otherwise take any action that would have the effect of subjecting Seller, the
Business or any of the Assets to any proceedings under bankruptcy or other
similar laws, and (ii) take all such actions as may be necessary to prevent
Seller, the Business and the Assets from becoming or remaining subject to any
proceedings under bankruptcy or other similar laws.
5.2 NOTIFICATION OF CERTAIN MATTERS. From the date hereof through the
Closing, Seller shall give prompt notice to Buyer of, and Buyer shall give
prompt notice to Seller if it obtains knowledge of (a) the occurrence, or
failure to occur, of any event which occurrence or failure would likely cause
any representation or warranty contained in this Agreement, or in any
11
document delivered in connection with the Agreement, to be untrue or inaccurate
in any material respect and (b) any material failure of Seller, on the one hand,
or Buyer on the other hand, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement or any
document delivered in connection with the Agreement, and each party shall use
all reasonable efforts to remedy any such failure on its part.
5.3 NO SOLICITATION OR ALTERNATE TRANSACTION. Seller and SPVC agree that
they will not, and will ensure that their employees, independent contractors,
consultants, counsel, accountants, investment advisors and other representatives
and agents will not, directly or indirectly, solicit or entertain offers from,
negotiate with, provide any nonpublic information to, enter into any agreement
with, or in any manner encourage, discuss, accept or consider any proposal of,
any third party relating to the acquisition of the Business or any of the
Assets, in whole or in part, through a sale of substantially all of the assets
or of a significant amount of assets, or similar transactions involving Seller
(such proposals, announcements or transactions being called herein "Acquisition
Proposals"). Sellers will promptly inform Buyer of any inquiry (including the
terms thereof and the identity of the third party making such inquiry) which it
may receive in respect of an Acquisition Proposal and furnish to Buyer a copy of
any such written inquiry.
5.4 ACCESS TO INFORMATION. Seller shall cooperate with Buyer and provide
Buyer and its authorized agents and representatives, both during the period of
time prior to the Closing Date and at all times thereafter, reasonable access to
the Assets, and shall permit Buyer and its authorized agents and representatives
to make such inspections and testing and conduct such interviews and inquiries
as Buyer may reasonably require in connection with Buyer's review of the
Business, including, without limitation, financial information, customer lists,
and up-to-date marketing information. Buyer shall conduct all such inspections,
testing and other information gathering described above only (a) at Buyer's sole
cost and expense, (b) during regular business hours, and (c) in a manner which
will not unduly interfere with the operation of the Business. Any and all such
information gathered by Buyer as a result of, or in connection with, such
information gathering shall be treated as Confidential Information and subject
to the provisions of Section 11.13.
5.5 TRANSITION PLAN. Each of the parties hereto hereby agrees to comply in
all respects with the Transition Plan attached hereto as Schedule 5.5 (the
"Transition Plan").
5.6 EMPLOYEE MATTERS.
(a) GENERAL. Seller agrees to continue the employment of its employees
in accordance with the Transition Plan. Seller agrees to fund the
compensation expressly committed to be funded by Seller as specified
in the Transition Plan for such transitional employees. Buyer agrees
to fund the compensation expressly committed to be funded by Buyer as
specified in the Transition Plan for such transitional employees that
meet the requirements of the Transition Plan including achievement of
any applicable objectives established by Buyer. Buyer shall not be
required to offer employment to any of the employees of Seller. Buyer
may offer
12
employment to employees of Seller on such terms and conditions as may
be determined by Buyer in its sole discretion.
(b) ACCRUED VACATION AND SEVERANCE PAY. Except as specifically set
forth in the Transition Plan, Buyer shall not be responsible for any
accrued vacation, severance or other employment-related expenses of
any of the employees of Seller. Seller shall remain responsible for
all accrued vacation and/or severance pay to its employees, except as
expressly committed to be funded by Buyer under the Transition Plan.
(c) NO ASSUMPTION OF BENEFIT PLANS. Except for: (i) Buyer's funding of
severance and granting of options as specified in the Transition Plan,
and (ii) Buyer's making COBRA continuation coverage available to
certain individuals as specified in Section 5.6(d) below, Buyer has
not agreed to and will not assume any of the Benefit Plans or any
obligation or liability in connection therewith. Seller shall
indemnify and hold Buyer and its Affiliates harmless from and against
any liabilities, obligations, claims, damages, penalties, causes of
action, costs and expenses (including, without limitation, attorneys'
fees and expenses) of any nature in connection with liabilities of
Seller associated with any pension, welfare or other benefit plan
maintained by Seller.
(d) COBRA CONTINUATION COVERAGE. Beginning as of the later of the
Closing Date or the date on which Seller ceases to provide any group
health plan to its employees, Buyer shall make COBRA continuation
coverage available to each individual who is a qualified beneficiary
whose qualifying event occurs prior to or in connection with the
transactions contemplated by this Agreement and who is, or whose
qualifying event occurred in connection with, an employee of Seller
covered under Seller's group health plan (an "Eligible Qualified
Beneficiary"). Within two (2) business days after the Closing Date,
Seller shall deliver to Buyer a complete and accurate list of each
then Eligible Qualified Beneficiary, the date and nature of the
qualifying event pursuant to which the Eligible Qualified Beneficiary
became covered or eligible to be covered under Seller's group health
plan and the last known address of each such Eligible Qualified
Beneficiary together with all documents, records, forms, elections,
notices and other relevant materials relating to such coverage or
eligibility to elect such coverage in the possession of or reasonably
accessible to Seller. Thereafter, Seller shall promptly provide to
Buyer the information specified in the previous sentence for any
individual who subsequently becomes an Eligible Qualified Beneficiary.
Any term used in this subsection (d) that is defined in Section 4980B
of the Code or regulations or proposed regulations thereunder shall
have the meanings ascribed to the term in Section 4980B of the Code or
such regulations or proposed regulations.
13
5.7 CONSENTS AND BEST EFFORTS. Buyer shall, as soon as practicable,
commence to take all action required to obtain all consents, approvals and
agreements of, and to give all notices and make all other filings with, any
third parties, including governmental authorities, necessary to authorize,
approve or permit the full and complete sale, conveyance, assignment and
transfer of the Assets, and Seller shall cooperate with Buyer with respect
thereto. In addition, subject to the terms and conditions herein provided, each
of the parties hereto covenants and agrees to use its commercially reasonable
efforts to take, or cause to be taken, all action or do, or cause to be done,
all things necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the transactions contemplated hereby and to
cause the fulfillment of the parties' obligations hereunder.
5.8 CONDUCT OF BUSINESS. Seller shall not, except as specifically
contemplated by this Agreement or as consented to by Buyer in writing: (a) sell,
assign, transfer, convey, lease, mortgage, pledge or otherwise dispose of or
encumber any of the Assets, or any interests therein, except in the ordinary
course of business; (b) acquire by merger or consolidation with, or merge or
consolidate with, or purchase substantially all of the assets of, or otherwise
acquire any material assets or business of, any corporation, partnership,
association or other business organization or division thereof related to the
Business; or (c) enter into any agreement, or otherwise become obligated, to
take any action which would prohibit Seller from complying with its obligations
hereunder.
5.9 DISPOSITION OF EXCLUDED LIABILITIES. Seller and SPVC hereby agree that
they shall remain jointly and severally responsible for satisfying all of the
Excluded Liabilities. SPVC hereby agrees to provide such funding to Buyer as may
be necessary to enable Buyer (or its successor) to fully satisfy the Excluded
Liabilities. Seller and SPVC hereby jointly and severally agree to defend,
indemnify and hold harmless the Buyer and its officers, directors and
subsidiaries from and against all costs, expenses and damages (including
reasonable attorneys' fees and costs) that may be incurred by Buyer and its
officers, directors and subsidiaries as a result of the failure of Seller and/or
SPVC to satisfy the Excluded Liabilities. The obligations of SPVC under this
Section 5.9 are also subject to the limitation under Section 10.3 of this
Agreement.
5.10 CHANGE IN SELLER'S CORPORATE NAME. Following the Closing, Seller
agrees to change its name in order to enable Buyer to have exclusive use of
Seller's corporate name.
ARTICLE VI
CONDITIONS TO SELLER'S OBLIGATIONS
----------------------------------
The obligations of Seller to consummate the transactions provided for
hereby are subject to the satisfaction, on or prior to the Closing Date, of each
of the following conditions, any of which may be waived by Seller:
6.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. All representations and
warranties of Buyer contained in this Agreement shall be true and correct in all
material respects at and as of the date of this Agreement and at and as of the
Closing Date, and Buyer shall have performed and satisfied in all material
respects all agreements and covenants required hereby to be performed by it
prior to or on the Closing Date.
14
6.2 CERTIFICATES. Buyer shall furnish Seller with such certificates of its
officers and others to evidence compliance with the conditions set forth in this
Article VI as may be reasonably requested by Seller.
6.3 CORPORATE DOCUMENTS. Seller shall have received from Buyer resolutions
adopted by the Board of Directors of Buyer approving this Agreement and the
transactions contemplated hereby, certified by Buyer's corporate secretary.
6.4 ANCILLARY DOCUMENTS. Buyer shall have executed and delivered each of
the documents described in Section 8.3.
6.5 NO ACTIONS OR COURT ORDERS. No action by any governmental authority or
court order shall have been instituted, or overtly threatened, seeking to enjoin
or otherwise prevent the transactions contemplated by this Agreement.
ARTICLE VII
CONDITIONS TO BUYER'S OBLIGATIONS
---------------------------------
The obligations of Buyer to consummate the transactions provided for
hereby are subject to the satisfaction, on or prior to the Closing Date, of each
of the following conditions, any of which may be waived by Buyer:
7.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. All representations and
warranties of Seller contained in this Agreement shall be true and correct in
all material respects at and as of the date of this Agreement and at and as of
the Closing Date, and Seller shall have performed and satisfied in all material
respects all agreements and covenants required hereby to be performed by it
prior to or on the Closing Date.
7.2 CONSENTS, REGULATORY COMPLIANCE AND APPROVAL. Seller shall have
obtained all consents, approvals and waivers from governmental authorities and
other parties necessary to the consummation of the transactions contemplated
hereby, unless the failure to obtain any such consent, approval or waiver would
not have a Material Adverse Effect on the Business or the Assets.
7.3 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date, there shall have
been no Material Adverse Effect on the Assets or the Business.
7.4 NO ACTIONS OR COURT ORDERS. No action by any governmental authority or
court order shall have been instituted, or overtly threatened, seeking to enjoin
or otherwise prevent the transactions contemplated by this Agreement.
7.5 CERTIFICATES. Seller shall furnish Buyer with such certificates of its
officers and others to evidence compliance with the conditions set forth in this
Article VII as may be reasonably requested by Buyer.
7.6 CORPORATE DOCUMENTS. Buyer shall have received from Seller resolutions
adopted by the Board of Directors and shareholders of Seller, and the Board of
Directors of SPVC, approving this Agreement and each of the Ancillary Agreements
to which it is a party and the
15
transactions contemplated hereby and thereby, certified by the corporate
secretary of Seller and SPVC, respectively.
7.7 ANCILLARY AGREEMENTS. Seller shall have executed and delivered each of
the documents set forth in Section 8.2.
ARTICLE VIII
CLOSING
-------
8.1 CLOSING. The closing of the transactions contemplated herein (the
"Closing") shall be held on November 10, 2000 or at such other time and date as
the parties hereto may agree (the "Closing Date"). For the purpose of any
calculation or determination required to be made by any of the parties following
the Closing, the Closing shall be deemed to have been effective as of 12:01 a.m.
on the Closing Date.
8.2 SELLER'S DELIVERIES. At the Closing, Seller shall deliver to Buyer:
(a) An executed original of a Xxxx of Sale and Assignment Agreement in
the form of EXHIBIT B (the "Xxxx of Sale") and other required
documents of conveyance relating to the Intellectual Property Rights,
Inventory, Equipment, Receivables, Permits, Prepaid Expenses, Customer
Lists, Assumed Contracts and Books and Records;
(b) All consents, certificates and other documents required by Article
VII in form reasonably satisfactory to Buyer; and
(c) An opinion of counsel to Seller dated as of the Closing Date, in
form and substance reasonably satisfactory to Buyer and its counsel.
8.3 BUYER'S DELIVERIES. At the Closing, Buyer shall deliver to Seller:
(a) An executed original of an Assumption Agreement relating to the
Assumed Liabilities, in the form of EXHIBIT C (the "Assumption
Agreement");
(b) The Closing Date Payment contemplated by Section 1.4;
(c) The Debenture;
(d) All consents, certificates and other documents required by Article
VI in form reasonably satisfactory to Seller; and
(e) An opinion of counsel to Buyer dated as of the Closing Date, in
form and substance reasonably satisfactory to Seller and its counsel.
The Xxxx of Sale and the Assumption Agreement are collectively referred to
herein as the "Ancillary Agreements."
16
ARTICLE IX
ACTIONS BY SELLER AND BUYER AFTER THE CLOSING
---------------------------------------------
9.1 TAX MATTERS. Seller and Buyer shall (i) each provide the other with
such assistance as may reasonably be requested by any of them in connection with
the preparation of any return, audit, or other examination by any taxing
authority or judicial or administrative proceedings relating to any liability
for Taxes, (ii) each retain and provide the other with any records or other
information that may be relevant to such return, audit or examination,
proceeding or determination, and (iii) each provide the other with any final
determination of any such audit or examination, proceeding, or determination
that affects any amount required to be shown on any tax return of the other for
any period. Without limiting the generality of the foregoing, Buyer and Seller
shall each retain, until the applicable statutes of limitations (including any
extensions) have expired, copies of all tax returns, supporting work schedules,
and other records or information that may be relevant to such returns for all
tax periods or portions thereof ending on or before the Closing Date.
ARTICLE X
SURVIVAL AND INDEMNIFICATION
----------------------------
10.1 SURVIVAL OF REPRESENTATIONS, ETC. The representations, warranties and
covenants of the parties shall survive until the statute of limitations
applicable to the subject matter of such representations expire.
10.2 INDEMNIFICATION.
(a) OBLIGATION TO INDEMNIFY. In addition to specific indemnification
provisions set forth elsewhere in this Agreement, each party (the
"Indemnitor") shall indemnify and hold harmless the other party and
its employees, officers and directors (each an "Indemnitee") from and
against any and all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses (including, without
limitation, attorneys' fees and expenses) incurred by, imposed upon or
asserted against the Indemnitee in connection with, arising out of, or
resulting from (i) any breach of any representation or warranty made
by the Indemnitor in this Agreement or in any of the Ancillary
Agreements; provided that the Indemnitee shall have given Indemnitor
specific notice of the alleged breach during the survival period
specified in Section 10.1; or (ii) any failure by the Indemnitor to
perform any agreement, covenant or obligation of the Indemnitor
pursuant to this Agreement or any of the Ancillary Agreements;
provided that the Indemnitee shall have given Indemnitee notice of the
alleged breach during the survival period specified in Section 10.1.
Furthermore, Seller and SPVC shall indemnify and hold Buyer and its
officers, directors and subsidiaries harmless from and against all
liabilities, obligations, claims, damages, penalties, causes of
action, costs and expenses (including, without limitation, attorneys'
fees and expenses) (i) included among or arising in connection with
the Excluded Liabilities, or (ii) incurred by, imposed upon or
asserted against
17
any such party resulting from any actual or potential claims of any
third party, whether now known or hereafter arising, that any product,
as presently manufactured by Seller (and as such products are
manufactured by Buyer without modification), infringes any patent
rights owned by any such third party, including any claims relating to
patents that may have been abandoned but continue to have revival
rights.
(b) CONDITIONS PRECEDENT; DEFENSE OF CLAIMS. The obligation of the
Indemnitor to indemnify any Indemnitee hereunder shall be conditioned
upon (i) timely notice by such Indemnitee or a third party to the
Indemnitor of any event that has given or may give rise to a claim for
indemnification hereunder, and (ii) at least sixty (60) days notice by
such Indemnitee or a third party to the Indemnitor of any intention to
settle or compromise any claim or liability for which a claim for
indemnification is subsequently made hereunder. At any time within ten
(10) days after receipt of any such notice, the Indemnitor shall be
entitled, if it so elects, at its own cost, risk and expense, (i) to
take control of the defense and investigation of such lawsuit or
action and (ii) to employ and engage attorneys of its own choice to
handle and defend the same. In the event the Indemnitee assumes the
defense of the claim in question, the Indemnitee shall keep the
Indemnitor reasonably informed of the progress of any such defense.
Indemnitee shall not enter into a compromise or settlement for which
it seeks indemnity without the prior written consent of the
Indemnitor.
(c) BUYER'S RIGHTS TO OFFSET CLAIMS AGAINST DEBENTURE. As a
non-exclusive remedy for claims of indemnification under this
Agreement, Buyer shall be entitled to offset its claims for
indemnification under this Agreement, from either Seller or SPVC,
against any amount that may be owed by Buyer under the Debenture
delivered as part of the Purchase Consideration under this Agreement.
Buyer may effect such rights of offset by giving written notice
thereof to the holder of the Debenture in accordance with the terms of
the Debenture, specifying the nature and amount of the claims to be
offset. The Company agrees to give the Holder not less than thirty
(30) days notice of its intention to exercise its rights to offset
hereunder in order to give the Holder adequate opportunity to satisfy
any such claims in cash. The Holder shall not be entitled to convert
the Debenture during the pendency of any notice of offset.
10.3 LIMITATION. SPVC shall have no liability pursuant to this Article 10
for any amounts in excess of Four Million Dollars ($4,000,000) (the "Maximum
Amount").
18
ARTICLE XI
MISCELLANEOUS
-------------
11.1 TERMINATION. This Agreement may be terminated at any time prior to
Closing:
(a) By mutual written consent of Buyer, Seller and SPVC;
(b) By Buyer or Seller if the Closing shall not have occurred on or
before November 30, 2000; PROVIDED however, that this provision shall
not be available to Buyer if Seller has the right to terminate this
Agreement under clause (d) of this Section 11.1, and this provision
shall not be available to Seller if Buyer has the right to terminate
this Agreement under clause (c) of this Section 11.1;
(c) By Buyer if there is a material breach of any representation or
warranty set forth in Article II hereof or of any covenant or
agreement to be complied with or performed by Seller or SPVC pursuant
to the terms of this Agreement or the failure of a condition set forth
in Article VI to be satisfied (and such condition is not waived in
writing by Buyer) on or prior to the Closing Date, or the occurrence
of any event which results or would result in the failure of a
condition set forth in Article VI to be satisfied on or prior to the
Closing Date, PROVIDED that, Buyer may not terminate this Agreement
pursuant to this Section 11.1(c) prior to the Closing if Buyer has not
provided Seller and SPVC with written notice of the noncompliance or
nonperformance and Seller or SPVC has not cured such noncompliance or
nonperformance in all material respects within ten (10) business days
thereafter; or
(d) By Seller if there is a material breach of any representation or
warranty set forth in Article III hereof or of any covenant or
agreement to be complied with or performed by Buyer pursuant to the
terms of this Agreement pursuant to this Section 11.1(d) or the
failure of a condition set forth in Article V to be satisfied (and
such condition is not waived in writing by Seller) on or prior to the
Closing Date, or the occurrence of any event which results or would
result in the failure of a condition set forth in Article V to be
satisfied on or prior to the Closing Date; PROVIDED that, Seller may
not terminate this Agreement prior to the Closing Date if Seller has
not provided Buyer with written notice of the noncompliance or
nonperformance, and Buyer has not cured such noncompliance or
nonperformance in all material respects within ten (10) business days
thereafter to cure such failure.
11.2 IN THE EVENT OF TERMINATION. In the event of termination of this
Agreement:
(a) Each party shall promptly redeliver all documents, work papers and
other material of any other party relating to the transactions
contemplated
19
hereby, whether obtained before or after the execution hereof, to the
party furnishing the same; and
(b) No party hereto shall have any liability to any other party to
this Agreement, except as stated in subsection (a) of this Section
11.2, and except for any willful breach of this Agreement occurring
prior to the proper termination of this Agreement.
11.3 ASSIGNMENT. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by any party without the prior written
consent of the other parties, provided that, Buyer may assign its rights under
this Agreement to any wholly owned subsidiary of Buyer so long as Buyer remains
obligated to fulfill its obligations under this Agreement. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, and no
other person shall have any right, benefit or obligation under this Agreement as
a third party beneficiary or otherwise.
11.4 NOTICES. All notices, requests, demands and other communications which
are required or may be given under this Agreement shall be in writing and shall
be deemed to have been duly given: (i) when received if personally delivered;
(ii) when transmitted if transmitted by telecopy, electronic or digital
transmission method; (iii) the day after it is sent, if sent for next day
delivery to a domestic address by recognized overnight delivery service (e.g.,
Federal Express); and (iv) upon receipt, if sent by certified or registered
mail, return receipt requested.
In each case notice shall be sent to:
(a) If to Seller, addressed to:
SleepTec, Inc.
0000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxx
Chief Financial Officer
Facsimile: 000-000-0000
With a copy to:
Xxxxxxx X. Xxxxx
King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Facsimile: 404-572-5100
With another copy to:
Xxxxxxx X. Needle, Esq.
Needle & Xxxxxxxxx, P.C.
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000-0000
Facsimile: 000-000-0000
20
(b) If to Buyer, addressed to:
Select Comfort Corporation
00000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Senior Vice President and General Counsel
Facsimile: 000-000-0000
With a copy to:
Xxxxxx X. Xxxxx, Esq.
Xxxxxxxxxxx Xxxxx & Xxxxxxxx XXX
Xxxxx XXX, Xxxxx 0000
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Facsimile: 612-607-7100
(c) If to SPVC, addressed to:
St. Xxxx Venture Capital, Inc.
00000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
Facsimile: 000-000-0000
or to such other place and with such other copies as either party may designate
as to itself by written notice to the others.
11.5 CHOICE OF LAW. This Agreement shall be construed, interpreted and the
rights of the parties determined in accordance with the laws of the State of
Minnesota (without reference to its choice of law provisions).
11.6 ENTIRE AGREEMENT: AMENDMENTS AND WAIVERS. This Agreement, together
with all Exhibits and Schedules hereto and the Ancillary Agreements, constitute
the entire agreement among the parties pertaining to the subject matter hereof
and supersede all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the parties. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto. No amendment, supplement, modification or waiver of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby.
11.7 MULTIPLE COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.8 EXPENSES. Except as otherwise specified in this Agreement, each party
hereto shall pay its own legal, accounting, out-of-pocket and other expenses
incident to this Agreement and to any action taken by such party in preparation
for carrying this Agreement into effect.
21
11.9 INVALIDITY. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
11.10 TITLES. The titles, captions or headings of the Articles and Sections
herein are for convenience of reference only and are not intended to be a part
of or to affect or restrict the meaning or interpretation of this Agreement.
11.11 NO THIRD-PARTY BENEFICIARY. The provisions of this Agreement are for
the benefit only of the parties hereto, and no third party may seek to enforce,
or benefit from, these provisions. The parties specifically disavow any desire
or intention to create any third party beneficiary hereunder, and specifically
declare that no person or entity, except for the parties and their successors
and permitted assigns, shall have any right hereunder nor any right of
enforcement hereof.
11.12 REPRESENTATION BY COUNSEL; MUTUAL NEGOTIATION. Each party has had the
opportunity to be represented by counsel of its choice in negotiating this
Agreement. This Agreement shall therefore be deemed to have been negotiated and
prepared at the joint request, direction, and construction of the parties, at
arm's-length, with the advice and participation of counsel, and will be
interpreted in accordance with its terms without favor to any party. The
parties' respective counsel may not be disqualified from representing their
clients in indemnification or other disputes arising out of this transaction by
virtue of such counsel's prior representation of the other party in an unrelated
matter.
11.13 CONFIDENTIALITY. Each of the parties hereto agrees that all
information obtained by them in the course of negotiating the transaction and
conducting the due diligence investigation regarding the transaction as
described above will be held in strictest confidence by each of the parties
hereto and will be divulged in strictest confidence only to those employees and
agents of the parties hereto, including legal counsel, accountants and financial
advisers, who have a need to know such information.
22
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on their respective behalf by their respective officers thereunto
duly authorized, all as of the day and year first above written.
SELECT COMFORT CORPORATION SLEEPTEC, INC.
By: /s/ Xxxxxxx X. XxXxxxxxxx By: /s/ Xxxxxxx X. Xxxx
---------------------------- -------------------------------
Name: Xxxxxxx X. XxXxxxxxxx Name:
-------------------------- -----------------------------
Its: President and CEO Its:
--------------------------- ------------------------------
ST. XXXX VENTURE CAPITAL IV, LLC
By: /s/ Xxxxxxx X. Xxxx
-------------------------------
Name:
-----------------------------
Its:
------------------------------
ST. XXXX VENTURE CAPITAL V, LLC
By: /s/ Xxxxxxx X. Xxxx
-------------------------------
Name:
-----------------------------
Its:
------------------------------
ST. XXXX VENTURE CAPITAL VI, LLC
By: SPVC Management VI, LLC
Its: Managing Member
/s/ Xxxxxxx X. Xxxx
----------------------------------
Name:
-----------------------------
Title:
----------------------------
23
EXHIBITS
--------
Exhibit A Debenture
Exhibit B Xxxx of Sale
Exhibit C Assumption Agreement
SCHEDULES
---------
Schedule 1.1(a) Intellectual Property Rights
Schedule 1.1(b) Inventory
Schedule 1.1(c) Equipment
Schedule 1.1(d) Permits
Schedule 1.1(e) Prepaid Expenses
Schedule 1.1(g) Assumed Contracts
Schedule 1.5 Allocation of Purchase Price
Schedule 2.5 Seller Financial Information
Schedule 5.5 Transition Plan
