Exhibit 10.2
___________________________________________________________
ASSET PURCHASE AGREEMENT
Among
XXXXX XXXXXX
CORPORATION, as
Seller,
U.S. ASSEMBLIES SAN DIEGO, INC., as Buyer
and THE MATCO ELECTRONICS GROUP, INC., as
Guarantor
Dated as of November 14, 1997
___________________________________________________________
TABLE OF CONTENTS
Page ARTICLE I
SALE AND PURCHASE OF ASSETS
SECTION 1.01 SALE OF THE ASSETS 1
SECTION 1.02 PURCHASE PRICE AND PAYMENT FOR2
SECTION 1.03 DELIVERY OF THE ASSETS 2
SECTION 1.04 POST-CLOSING EMPLOYMENT OF
SELLER'S EMPLOYEES 2
ARTICLE II
CLOSING
SECTION 2.01 CLOSING 3
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
SECTION 3.01 CORPORATE ORGANIZATION 3
SECTION 3.02 CORPORATE AUTHORITY 3
SECTION 3.03 NO VIOLATION; CONSENTS AND APPROVALS 3
SECTION 3.04 TITLE TO ASSETS; ABSENCE OF LIENS 4
SECTION 3.05 LITIGATION 4
SECTION 3.06 COMPLIANCE WITH LAW 4
SECTION 3.07 CONTRACTS 5
SECTION 3.08 MAINTENANCE OF THE ASSETS 5
SECTION 3.09 EMPLOYEES; LABOR RELATIONS 5
SECTION 3.10 SUPPLIERS 5
SECTION 3.11 CERTAIN TRANSACTIONS 6
SECTION 3.12 DISCLAIMER OF OTHER REPRESENTATIONS
AND WARRANTIES; BEST KNOWLEDGE;
DISCLOSURE 6
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
SECTION 4.01 CORPORATE ORGANIZATION 7
SECTION 4.02 CORPORATE AUTHORITY 7
SECTION 4.03 NO VIOLATION; CONSENTS AND APPROVALS 7
SECTION 4.04 LITIGATION 8
ARTICLE V
CERTAIN COVENANTS AND
AGREEMENTS OF SELLER, BUYER
AND GUARANTOR
SECTION 5.01 EXPENSES AND FINDERS' FEES 8
SECTION 5.02 CONFIDENTIALITY 8
SECTION 5.03 PRESS RELEASES 9
SECTION 5.04 BOOKS AND RECORDS 9
SECTION 5.05 USE OF NAMES 9
ARTICLE VI
CONDITIONS PRECEDENT OF BUYER AND GUARANTOR
SECTION 6.01 OPINION OF COUNSEL 10
SECTION 6.02 CLOSING DOCUMENTATION. 10
10SECTION 6.03 APPROVAL OF LEGAL MATTERS. 10
SECTION 6.04 OTHER AGREEMENTS. 11
SECTION 6.05 CONSENTS. 11
ARTICLE VII CONDITIONS PRECEDENT OF SELLER
SECTION 7.01 OPINION OF COUNSEL. 11
SECTION 7.02 CLOSING DOCUMENTATION. 11
SECTION 7.03 APPROVAL OF LEGAL MATTERS. 12
SECTION 7.04 OTHER AGREEMENTS. 12
SECTION 7.05 CONSENTS. 12
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01 INDEMNIFICATION BY SELLER. 12
SECTION 8.02 INDEMNIFICATION BY BUYER AND
GUARANTOR. 13
SECTION 8.03 REMEDIES. 14
SECTION 8.04 PERIOD OF INDEMNITY. 14
SECTION 8.05 CERTAIN LIMITATIONS. 14
ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
SECTION 9.01 REPRESENTATIONS AND WARRANTIES. 15
ARTICLE X
MISCELLANEOUS
SECTION 10.01 COOPERATION. 15
SECTION 10.02 WAIVER. 15
SECTION 10.03 NOTICES. 15
SECTION 10.04 GOVERNING LAW AND CONSENT TO
JURISDICTION. 17
SECTION 10.05 COUNTERPARTS. 17
SECTION 10.06 HEADINGS. 17
SECTION 10.07 ENTIRE AGREEMENT. 17
SECTION 10.08 AMENDMENT AND MODIFICATION. 17
SECTION 10.09 BINDING EFFECT; BENEFITS. 17
SECTION 10.10 ASSIGNABILITY. 18
SECTION 10.11 GUARANTEE. 18
LIST OF SCHEDULES AND EXHIBITS
Schedule 1.01(a) Assets and Retained
Assets
Schedule 1.01(b) Assumed Liabilities
Schedule 1.04 Management Employees
Schedule 3.03 No Violations;Consents
Schedule 3.04 Encumbrances
Schedule 3.05 Litigation
Schedule 3.07 Contracts
Schedule 3.09 Employees; Labor Relations
Schedule 3.10 Suppliers
Schedule 3.11 Certain Transactions
Schedule 3.12 Persons with "Knowledge"
Schedule 4.03 No Violations; Consents
Schedule 4.04 Litigation
Schedule 5.01 Finders' Fees
Exhibit A Xxxx of Sale
Exhibit B Assignment and Assumption Agreement
Exhibit C Opinion of Seller's Counsel
Exhibit D Opinion of Buyer's Counsel
ASSET PURCHASE AGREEMENT dated as of November 14, 1997
(together with the Schedules and Exhibits attached hereto,
the "Agreement") between XXXXX XXXXXX CORPORATION, a
Delaware corporation ("SCC" or "Seller"), U.S. ASSEMBLIES
SAN DIEGO, INC., a Delaware corporation ("Buyer"), and The
Matco Electronics Group, Inc., a Delaware corporation
("Guarantor").
W I T N E S S E T H:
WHEREAS, Seller is the owner of certain machinery,
equipment, leasehold improvements and other assets used in
connection with the business of manufacturing typewriters
and related supplies and contract manufacturing generally
(the "Business");
WHEREAS, Seller wishes to sell and Buyer wishes to
purchase the Assets (as defined below) and Buyer wishes to
assume certain specified liabilities and obligations of
Seller and the parties wish to consummate the other
transactions herein provided, all upon the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in reliance upon the representations and
warranties made herein and in consideration of the
mutual agreements herein contained, the parties
agree as follows: ARTICLE I
SALE AND PURCHASE OF ASSETS
Section 1.01 Sale of the Assets.
At the Closing provided for in Section 2.01:
(a)
Seller shall sell the assets set forth on
Schedule 1.01(a) (the "Assets," provided however that
Assets shall not include the retained assets set forth on
Schedule 1.01(a), the "Retained Assets") and Buyer shall
purchase the Assets for the purchase price provided in
Section 1.02; and
(b)
Buyer shall assume and undertake to perform the
liabilities and obligations of Seller specifically
described on Schedule 1.01(b) hereto (such
liabilities and obligations being
hereinafter referred to as the "Assumed Liabilities").
Other than the Assumed Liabilities, Buyer shall not assume
or be responsible for, and Seller shall retain and remain
responsible for, any and all obligations and liabilities of
Seller of any nature whatsoever, whether past, current or
future, whether accrued, contingent, known or unknown.
Section 1.02 Purchase Price and Payment for
Assets.
(a)
Purchase Price. In addition to the assumption by
Buyer of the Assumed Liabilities, as full consideration to
be paid by Buyer, the aggregate purchase price for the
Assets is $9,000,000, (the "Purchase Price"); and
(b)
Payment of Purchase Price. At the Closing, Buyer
shall deliver to Seller an amount equal to the Purchase
Price in immediately available funds by wire transfer to an
account designated by Seller.
Section 1.03 Delivery of the Assets.
At the Closing, Seller will deliver to Buyer a Xxxx of
Sale, substantially in the form of Exhibit A hereto (the
"Xxxx of Sale"), and such other endorsements, certificates
of title, assignments and other good and sufficient
instruments of conveyance and transfer, as shall be
necessary to vest in Buyer good, valid, marketable and
insurable title to the Assets in accordance herewith.
Buyer acknowledges and agrees that the Assets presently
are, and shall remain in the possession of SCM, and that
Seller shall have no obligation to deliver the Assets since
the Assets are already in the possession of SCM.
Seller further agrees that, from and after the Closing, it
will execute and deliver to Buyer such additional
instruments and documents and take such further action as
Buyer may reasonably require in order to more fully vest,
record and/or perfect Buyer's title to, or interest in, the
Assets.
Section 1.04 Post-Closing Employment of Seller's
Employees.
Buyer shall use its best efforts to offer to the
employees listed on Schedule 1.04 (the "Management
Employees") positions within Buyer's organization. Buyer
shall use its best efforts to hire and retain all current
Management Employees pursuant to its currently effective
employment practices consistent with compensation and
benefits offered by Buyer generally. If any Management
Employee refuses Buyer's offer of employment, and if
Seller, either by (i) applying its severance policy in a
manner consistent with past practices, or (ii) as a result
of litigation, pays severance to such Management Employee,
then Buyer agrees not to hire, employ or retain such
Management Employee in any capacity whatsoever, including
as an advisor, consultant or leased employee, for a period
of three years after
the Closing Date unless Buyer first reimburses Seller for
the amount of severance paid to the Management Employee
plus simple interest at the rate of eight (8%) percent per
year. Buyer shall require any Management Employee who
accepts its offer of employment to voluntarily resign or
retire from Seller. ARTICLE II
CLOSING
Section 2.01 Closing.
The closing of the transactions provided for herein (the
"Closing") will take place at the offices of Winthrop,
Stimson, Xxxxxx & Xxxxxxx, Financial Centre, 000 Xxxx Xxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx at 10:00 A.M. (local time) on
November 14, 1997 (the "Closing Date") or at such other
place, time and date as may be agreed upon by Buyer and
Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Subject to the Schedules attached hereto and referred
to below, Seller represents and warrants, to Buyer and
Guarantor that:
Section 3.01 Corporate Organization.
Seller is a corporation duly organized and validly existing
under the laws of the State of Delaware. Section 3.02
Corporate Authority.
Seller has full corporate power and authority to enter into
this Agreement and all other documents required to be
entered into hereunder (this Agreement, collectively with
such other documents, the "Documents") and to consummate
the transactions contemplated thereby. The execution,
delivery and performance by Seller of the Documents have
been duly authorized by all requisite corporate action.
The Documents have been duly executed and delivered by
Seller, and (assuming due execution and delivery by Buyer
and Guarantor) the Documents constitute the valid and
binding obligations of Seller, enforceable in accordance
with their terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally or by
general equitable principles.
Section 3.03 No Violation; Consents and Approvals.
Except as disclosed in Schedule 3.03, Seller is not subject
to or bound by any provision of:
(a)
any law, statute, rule, regulation or judicial or
administrative decision,
(b)
any articles or certificate of incorporation or
by laws or other similar organization documents,
(c)
any mortgage, deed of trust, lease, note,
shareholders' agreement, bond, indenture, other instrument
or agreement, license, permit, trust, custodianship, other
restriction, or
(d)
any judgment, order, writ, injunction or decree
of any court, governmental body, administrative agency or
arbitrator,
that would prevent or be violated by or that would result
in the creation of any material Encumbrance (as defined
below) as a result of, or, with respect to material
agreements, under which there would be a default or right
of termination as a result of, the execution, delivery and
performance by Seller of the Documents and the consummation
of the transactions contemplated thereby. Except as
disclosed in Schedule 3.03, no consent, approval or
authorization of or
declaration or filing with any individual, corporation,
partnership, trust or unincorporated organization or any
government or any agency or political subdivision thereof
(a "Person") is required for the valid execution, delivery
and performance by Seller of the Documents and the
consummation of the transactions contemplated thereby.
Seller agrees to obtain all necessary consents
required for Seller to obtain full benefit of any leasehold
interest assigned or transferred pursuant hereto. Seller
hereby represents and warrants that all leases subject to
this Agreement are assignable by their terms or if not
assignable by their terms then Seller shall obtain the
written consent of the Lessor to such transfer as
contemplated under the terms of this Agreement. All such
leases sought to be transferred by the Seller are disclosed
in Schedule 3.03.
Section 3.04 Title to Assets; Absence of Liens.
Seller has good and valid title to, or subsisting leasehold
interests in, all of the Assets free and clear of any
pledges, liens, charges, encumbrances, easements, defects,
security interests, claims, options and restrictions of every kind
(collectively, "Encumbrances"). Seller will deliver to
Buyer title to the Assets free and clear of all
Encumbrances.
Section 3.05 Litigation.
Except as disclosed in Schedule 3.05, there is no action,
suit, proceeding or investigation as of the date hereof
pending or, to the best knowledge of Seller after due
inquiry, threatened against Seller at law, in equity or
otherwise, in, before, or by any court of competent
jurisdiction.
Section 3.06 Compliance with Law.
To the best knowledge of Seller after due inquiry, the
Business is being conducted in compliance with all laws,
ordinances and regulations of any governmental entity
applicable to Seller including Seller's obligation to
comply with the applicable laws and regulations of the
United Mexican States regulating or effecting Seller or its
subsidiary Xxxxx Corona de Mexico, S.A. de C.V. ("SCM").
To the best knowledge of Seller, all governmental
approvals, permits and licenses required by Seller in
connection with the conduct of the Business have been
obtained and are in full force and effect and are being
complied with in all material respects.
Section 3.07 Contracts.
Except as set forth in Schedule 3.07, and except for
contracts made in the ordinary and usual course of business
or in connection with this Agreement and the transactions
contemplated hereby, Seller is not as of the date hereof a
party to, or bound by, any contract of any kind to be
performed after the Closing Date pursuant to which Seller
is obligated to expend more than $5,000 in any twelve-month
period and which is not subject to cancellation by Seller
without penalty or increased cost.
Section 3.08 Maintenance of the Assets.
The Assets which are currently being used in the
manufacturing processes if taken together with the assets
of SCM are adequate to conduct the Business as currently
being conducted, and are in good operating condition,
maintenance and repair, taking into account the age
thereof.
Section 3.09 Employees; Labor Relations.
As of November 1, 1997, Seller employed a total of 27
employees with respect to the Business (the "Employees").
As of the date hereof, except as set forth on Schedule 3.09
attached hereto, (a) Seller is not delinquent in the
payment (i) to or on behalf of its past or present
Employees of any wages, salaries, commissions, bonuses,
benefit plan contributions or other compensation for all
periods prior to the date hereof, or (ii) of any material
amount which is due and payable with regard to any Employee
to any state or state fund pursuant to any workers'
compensation statute, rule or regulation or any amount
which is due and payable to any workers' compensation
claimant or any other party arising under or with respect
to a claim that has been filed under state statutes and
approved in the ordinary course in accordance with Seller's
policies regarding workers' compensation and/or any
applicable state statute or administrative procedure; (b)
to the best knowledge of Seller, there is no unfair labor
practice charge or complaint against the Business pending
before the National Labor Relations Board; (c) there is no
labor strike, dispute, slowdown or stoppage actually in
progress or, to the best knowledge of Seller, threatened
against the Business; (d) there are no collective
bargaining agreements currently in effect between the
Business and labor unions or organizations representing any
Employees;
and (e) no material grievance or arbitration proceedings
are pending relating to the Business.
Section 3.10 Suppliers.
Schedule 3.10 hereto contains a list as of the date hereof
of suppliers of the Business (in dollar volume).
Section 3.11 Certain Transactions.
Except as set forth in Schedule 3.11, there are no
transactions between SCM or SCC (including SCC's
affiliates), and SCM's or SCC's (including SCC's
affiliates) directors, officers or salaried employees, or
the family members or affiliates of any of the above (other
than for services as employees, officers and directors),
including, without limitation, any contract, agreement or
other arrangement providing for the furnishing of services
to or by, providing for rental of real or personal property
to or from, or otherwise requiring payments to or from, SCC
or SCM to any such officer, director or salaried employee,
family member, or affiliate or any corporation,
partnership, trust or other entity in which such family
member, affiliate, officer, director or employee has a
substantial interest or is a shareholder, officer,
director, trustee or partner.
Section 3.12 Disclaimer of Other Representations and
Warranties; Best Knowledge; Disclosure.
(a)
Seller does not make, and has not made, any
representations or warranties relating to Seller or
otherwise in connection with the transactions contemplated
hereby other than those expressly set out herein which are
made by Seller. Without limiting the generality of the
foregoing, Seller has not made, and shall not be deemed to
have made, any representations or warranties in any
presentation of the Business in connection with the
transactions contemplated hereby, and no statement
contained in any such presentation shall be deemed a
representation or warranty hereunder or otherwise. It is
understood that any cost estimates, projections, forecasts
or other predictions, any data, any financial information
or any memoranda or offering materials or presentations are
not and shall not be deemed to be or to include
representations or warranties of Seller. No person has
been authorized by Seller to make any representation or
warranty relating to Seller or otherwise in connection with
the transactions contemplated hereby and, if made, such
representation or warranty must not be relied upon as
having been authorized by Seller.
(b)
Whenever a representation or warranty made by
Seller herein refers to the best knowledge of Seller, such
knowledge shall be deemed to consist only of the actual
knowledge of any of those persons listed on Schedule 3.12.
Seller has not undertaken, nor shall Seller have any duty
to undertake, any investigation concerning any matter as
to which a representation or warranty is made as to the
best knowledge of Seller.
(c)
Notwithstanding anything to the contrary
contained in this Agreement or in any Schedule, any
information disclosed in one Schedule shall be deemed to be
disclosed in all Schedules. Certain information set forth
in the Schedules is included solely for informational
purposes and may not be required to be disclosed pursuant
to this Agreement. The disclosure of any information shall
not be deemed to constitute an acknowledgment
that such information is required to be disclosed in
connection with the representations and warranties made by
Seller in this Agreement or is material, nor shall such
information be deemed to establish a standard of
materiality.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Subject to the Schedules attached hereto and referred
to below, each of Buyer and Guarantor, as to itself only
and not as to the other, represents and warrants to Seller
that:
Section 4.01 Corporate Organization.
Each of Buyer and Guarantor is a corporation duly organized
and validly existing and in good standing under the laws of
the State of Delaware.
Section 4.02 Corporate Authority.
Each of Buyer and Guarantor has full corporate power and
authority to enter into the Documents and to consummate the
transactions contemplated thereby. The execution, delivery
and performance by Buyer and Guarantor of the Documents
have been duly authorized by all requisite corporate
action. The Documents have been duly executed and
delivered by Buyer and Guarantor, and (assuming due
execution and delivery by Seller) the Documents constitute
the valid and binding obligations of Buyer and Guarantor,
enforceable in accordance with their terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization or similar
laws affecting creditors' rights generally or by general
equitable principles.
Section 4.03 No Violation; Consents and Approvals.
Except as disclosed in Schedule 4.03, neither Buyer nor
Guarantor is subject to or bound by any provision of:
(a)
any law, statute, rule, regulation or judicial or
administrative decision,
(b)
any articles or certificate of incorporation or
by laws or other organization documents,
(c)
any mortgage, deed of trust, lease, note,
shareholders' agreement, bond, indenture, other instrument
or agreement, license, permit, trust, custodianship, other
restriction, or
(d)
any judgment, order, writ, injunction or decree
of any court, governmental body, administrative agency or
arbitrator, that would prevent or be violated by or that would result
in the creation of any material Encumbrance as a result of,
or, with respect to material agreements, under which there
would be a default or right of termination as a result of,
the execution, delivery and performance by Buyer or
Guarantor of the Documents and the consummation of
transactions contemplated thereby. Except as disclosed in
Schedule 4.03, no consent, approval or authorization of or
declaration or filing with any Person is required for the
valid execution, delivery and performance by Buyer or
Guarantor of the Documents and the consummation of the
transactions contemplated thereby.
Section 4.04 Litigation.
Except as disclosed in Schedule 4.04, there is no action,
suit, proceeding or investigation as of the date hereof
pending or, to the best knowledge of Buyer or Guarantor
after due inquiry, threatened against Buyer or Guarantor at law,
in equity or otherwise, in, before, or by any court of competent
jurisdiction.
ARTICLE V
CERTAIN COVENANTS AND AGREEMENTS
OF SELLER, BUYER AND GUARANTOR
Section 5.01 Expenses and Finders' Fees.
Buyer, Guarantor and Seller will each bear its own expenses
in connection with this Agreement and its performance.
Seller, on the one hand, and Buyer and Guarantor, on the
other hand, each represent and warrant to the other that,
except as set forth on Schedule 5.01, the negotiations
relative to this Agreement and the transactions
contemplated hereby have been carried on in such a manner
as not to give rise to any valid claims against the other
party for a brokerage commission, finder's fee or other
like payment.
Section 5.02 Confidentiality.
Buyer, Guarantor and Seller hereby confirm the terms and
provisions of that certain Confidentiality Agreement
executed by SCC and Guarantor dated as of July 31, 1996
(the "Confidentiality Agreement") and hereby incorporate the
Confidentiality Agreement herein, in its entirety, by this
reference and intend to be bound by the terms thereof.
Buyer, Guarantor and Seller further acknowledge and agree
that all information provided to Buyer and Guarantor
hereunder shall constitute Confidential Information (as
such term is defined in the Confidentiality Agreement), and
that the provisions of this Section 5.02, including the
terms and provisions of the Confidentiality Agreement,
shall survive the termination of this Agreement for any
reason before Closing.
Section 5.03 Press Releases.
Except as required by law or stock exchange regulation, any
public announcements regarding the transactions
contemplated hereby shall be made only with the mutual
consent of Buyer, Guarantor and Seller.
Section 5.04 Books and Records.
Buyer will retain all books, records and other documents
pertaining to the Assets and Assumed Liabilities in
existence on the Closing Date for a period of seven (7)
years from the Closing Date and to make the same available
after the Closing Date for such seven (7) year period for
inspection and copying by Seller at Seller's expense during
the normal business hours of the Business, upon reasonable
request and upon reasonable advance notice. No such books,
records or documents shall be destroyed by the Business
without first advising Seller in writing and giving Seller
a reasonable opportunity to obtain possession thereof.
Without limiting the generality of the foregoing, Buyer
will make available to Seller and its representatives all
information deemed necessary or desirable by Seller in
preparing its financial statements and Returns and
conducting any audits in connection therewith.
Section 5.05 Use of Names.
Anything herein to the contrary notwithstanding, and
subject to rights granted to Guarantor in the Manufacturing
Agreement (as defined below), neither Buyer nor Guarantor
shall acquire any interest in or right to use the name
Xxxxx Xxxxxx or any derivatives thereof, or the respective
trademarks and logos of Seller and Seller's group of
companies is being transferred hereunder (collectively, the
"Names and Logos"). Buyer and Guarantor each agree that it
will, as promptly as practicable but in any event within
sixty (60) days following the Closing Date, remove or
obliterate all Names and Logos from all signs, purchase
orders, invoices, sales orders, labels, letterheads,
shipping documents and other materials used by it or any of its
affiliates. Notwithstanding anything herein to the
contrary, Buyer and Guarantor each agree that after the
Closing Date it will neither use, nor permit any of its
affiliates to use, (i) any purchase orders, invoices, sales
orders, letterheads or shipping documents existing on the
date hereof, which bear any of the Names and Logos or any
name or logo confusingly similar thereto, without first
obliterating or covering such Name or Logo, or (ii) any
such materials not in existence on the Closing Date which
bear such Name or Logo. At Seller's request, Buyer and
Guarantor each will cooperate, and will cause each of its
affiliates to cooperate, in taking all steps reasonably
necessary in any jurisdiction to preserve for Seller and,
where appropriate, assign to Seller, all
right, title and interest in and to such Names and Logos,
the registration and usage thereof and the goodwill
associated therewith. Buyer and Guarantor each will not,
and will cause each of its affiliates not to,
misappropriate, misrepresent or otherwise infringe, abuse
or diminish the value of such Names and Logos.
ARTICLE VI
CONDITIONS PRECEDENT OF BUYER AND GUARANTOR
Neither Buyer nor Guarantor need consummate the
transactions contemplated by this Agreement unless the
following conditions shall be fulfilled or waived by both
Buyer and Guarantor:
Section 6.01 Opinion of Counsel.
Buyer and Guarantor shall have been furnished with an
opinion dated the Closing Date of Winthrop, Stimson, Xxxxxx
& Xxxxxxx, counsel for Seller, substantially in the form
attached hereto as Exhibit C.
Section 6.02 Closing Documentation.
Buyer and Guarantor shall have received the following
documents, agreements and instruments from Seller:
(a)
Xxxx of Sale and such other endorsements,
certificates of title, assignments as shall be
reasonably requested by Buyer or Guarantor;
(b)
a certificate dated as of a recent date from the
Secretary of State of the State of Delaware to the effect
that Seller is duly incorporated and in good standing in
such state;
(c)
evidence, reasonably satisfactory to Buyer and
Guarantor, of the authority and incumbency of the persons
acting on behalf of Seller in connection with the execution
of any document delivered in connection with this
Agreement; and
(d)
such other instruments and documents as Buyer and
Guarantor shall reasonably request not inconsistent with
the provisions hereof.
Section 6.03 Approval of Legal Matters.
The form of all instruments, certificates and documents to
be executed and delivered by Seller to Buyer and Guarantor
pursuant to this Agreement and all legal matters in respect
of the transactions as herein contemplated shall be
reasonably satisfactory to Buyer, Guarantor and their
counsel, none of whose approval shall be unreasonably
withheld or delayed.
Section 6.04 Other Agreements.
The following documents shall have been entered into
simultaneously herewith: the Stock Purchase Agreement dated
the date hereof among Seller, W. Xxxxxxx Xxxxxxxx, Buyer
and Guarantor (the "Stock Purchase Agreement"), the
Contract Manufacturing Agreement dated the date hereof
between Guarantor and Seller (the "Manufacturing
Agreement"), the Assignment and Assumption Agreement dated
the date hereof among Seller, Buyer and Guarantor in the
form attached hereto as Exhibit B (the "Assignment and
Assumption Agreement") and the Sublease dated the date
hereof between Buyer and Seller (the "Sublease").
Section 6.05 Consents.
Buyer and Guarantor shall have obtained consents from all
the parties set forth on Schedule 4.03.
ARTICLE VII
CONDITIONS PRECEDENT OF SELLER
Seller need not consummate the transactions
contemplated by this Agreement unless the following
conditions shall be fulfilled or waived by Seller:
Section 7.01 Opinion of Counsel.
Seller shall have been furnished with an opinion dated the
Closing Date of Xxxxx, Xxxxxx & Xxxxxx, LLP, counsel for
Buyer and Guarantor, substantially in the form attached
hereto as Exhibit D.
Section 7.02 Closing Documentation.
Seller shall have received the following documents,
agreements and instruments from Buyer and Guarantor, where
applicable:
(a)
payment of the Purchase Price pursuant to Section 1.02 hereof;
(b)
certificate dated as of a recent date from the
Secretary of State of the State of Delaware to the effect
that Buyer and Guarantor each is duly incorporated and in
good standing in such state;
(c) evidence, reasonably satisfactory to
Seller, of the authority and incumbency of the persons
acting on behalf of Buyer and Guarantor in connection with
the execution of any document delivered in connection with
this Agreement; and
(d)
such other instruments and documents as Seller
shall reasonably request not inconsistent with the
provisions hereof.
Section 7.03 Approval of Legal Matters.
The form of all certificates, instruments and documents to
be executed and delivered by Buyer and Guarantor to Seller
pursuant to this Agreement and all legal matters in respect
of the transactions as herein contemplated shall be
reasonably satisfactory to Seller and its counsel, neither
of whose approval shall be unreasonably withheld or
delayed.
Section 7.04 Other Agreements.
The following documents shall have been entered into
simultaneously herewith: the Stock Purchase Agreement, the
Manufacturing Agreement, the Assignment and Assumption
Agreement and the Sublease.
Section 7.05 Consents.
Seller shall have obtained consents from all the parties
set forth on Schedule 3.03.
ARTICLE VIII
INDEMNIFICATION
Section 8.01 Indemnification by Seller.
Seller hereby agrees to defend, indemnify and hold harmless
Buyer and Guarantor, their respective successors, assigns
and affiliates (collectively, the "Buyer Indemnitees") from
and against any and all losses, deficiencies, liabilities,
damages, assessments, judgments, costs and expenses,
including attorneys' fees (both those incurred in
connection with the defense or prosecution of the
indemnifiable claim and those incurred in connection with
the enforcement of this provision), (collectively, "Buyer
Losses"), caused by, resulting from or arising out of:
(a)
(i) breaches of the representations and
warranties hereunder on the part of Seller; (ii) failures
by Seller to perform or otherwise fulfill any undertaking
or other agreement or obligation hereunder; (iii) any value
added taxes ("VAT") or similar taxes assessed by the United
Mexican States by reason of the sale of the Assets
hereunder; and/or (iv) any claims which may be brought by a
Management Employee
against SCM, Buyer or Guarantor, or any of their
subsidiaries or related entities, which claims arise out of
such Management Employee's employment or separation from
employment from SCC prior to the Closing; and/or
(b)
any and all actions, suits, proceedings, claims,
demands, incident to any of the foregoing or such
indemnification; provided, however, that if any claim, liability, demand,
assessment, action, suit or proceeding shall be asserted in
respect of which a Buyer Indemnitee proposes to demand
indemnification ("Buyer Indemnified Claims"), such Buyer
Indemnitee shall notify Seller thereof, provided, further,
however, that failure to give such notification shall not
affect the indemnification provided hereunder except to the
extent the indemnifying party shall have been actually
prejudiced as a result of such failure. Subject to rights
of or duties to any insurer or other third Person having
liability therefor, Seller shall have the right promptly
upon receipt of such notice to assume the control of the
defense, compromise or settlement of any such Buyer
Indemnified Claims arising out of a lawsuit or claim
brought by a third party (provided that any compromise or
settlement must be reasonably approved by Buyer),
including, at its own expense, employment of counsel
reasonably satisfactory to Buyer; provided, however, that
if Seller shall have exercised its right to assume such
control, Buyer may, in its sole discretion and at its
expense, employ counsel to represent it (in addition to
counsel employed by Seller) in any such matter, and in such
event counsel selected by Seller shall be required to
cooperate with such counsel of Buyer in such defense,
compromise or settlement.
Section 8.02 Indemnification by Buyer and Guarantor.
Buyer and Guarantor hereby agree to defend, indemnify and
hold harmless Seller and its successors, assigns and
affiliates (collectively, "Seller Indemnitees") from and
against any and all losses, deficiencies, liabilities,
damages, assessments, judgments, costs and expenses,
including attorneys' fees (both those incurred in
connection with the defense or prosecution of the
indemnifiable claim and those incurred in connection with
the enforcement of this provision) (collectively, "Seller
Losses"), resulting from or arising out of:
(a)
(i) breaches of representations and warranties
hereunder on the part of Buyer or Guarantor, (ii) failures
by Buyer or Guarantor to perform or otherwise fulfill any
undertaking or agreement or obligation hereunder and/or
(iii) any claims which may be brought by a Management
Employee against SCC, or any of its subsidiaries or related
entities, which claims arise out of such Management
Employee's employment or separation from employment from
SCM, Buyer or Guarantor subsequent to the Closing; and/or
(b)
any and all actions, suits, proceedings, claims
and demands incident to any of the foregoing or such
indemnification;
provided, however, that if any claim, liability, demand,
assessment, action, suit or proceeding shall be asserted in
respect of which such Seller Indemnitee proposes to demand
indemnification ("Seller Indemnified Claims"), such Seller
Indemnitee shall notify Buyer thereof, provided, further,
however, that failure to give such notification shall not
affect the indemnification provided hereunder except to the
extent the indemnifying party shall have been actually
prejudiced as a result of such failure. Subject to rights
of or duties to any insurer or other third Person having
liability therefor, Buyer shall have the right promptly
upon receipt of such notice to assume the control of the
defense, compromise or settlement of any such Seller
Indemnified Claims arising out of a lawsuit or claim
brought by a third party (provided that any compromise or
settlement must be reasonably approved by Seller)
including, at its own expense, employment of counsel
reasonably satisfactory to Seller; provided, however, that
if Buyer shall have exercised its right to assume such
control, Seller may, in its sole discretion
and at its expense, employ counsel to represent it (in
addition to counsel employed by Buyer) in any such matter,
and in such event counsel selected by Buyer shall be
required to cooperate with such counsel of Seller in such
defense, compromise or settlement.
Section 8.03 Remedies.
Except for the right to seek to specifically enforce the
covenants hereunder, and except as specifically provided in
this Agreement, the sole and exclusive remedy of Buyer,
Guarantor and Seller hereunder shall be restricted to the
indemnification rights set forth in this Article VIII.
Section 8.04 Period of Indemnity.
The indemnities contained in this Article VIII shall expire
one (1) year from the Closing Date, except with respect to
Seller's indemnity for VAT, which will expire five (5)
years from the Closing Date, and except with respect to
Seller's, Buyer's and Guarantor's indemnity for Management
Employees' claims which will expire three (3) years after
the Closing Date and except with respect to Buyer Losses or
Seller Losses as to which notice has been given pursuant to
Sections 8.01 or 8.02 within such period, in which case the
indemnification period shall be extended until final
resolution of such losses.
Section 8.05 Certain Limitations.
(a)
Notwithstanding any other provision hereof, in
no event shall Seller be liable for or obligated to
indemnify Buyer and Guarantor from and against any
consequential, indirect or special damages, including,
without limitation, lost profits, business interruption and
loss of business opportunities or goodwill. This exclusion
of any such consequential, indirect or special damages
shall apply whether the action in recovery of damages is
sought based on contract,
tort (including sole, concurrent or other negligence or
strict liability), statute or otherwise. To the extent
permitted by law, any statutory remedies which are
inconsistent with this Section 8.05(a) are hereby waived by
Buyer and Guarantor.
(b)
Seller's obligation to indemnify for Buyer Losses
under Section 8.01 of this Agreement shall accrue only if
the aggregate of all such Buyer Losses exceeds Fifty
Thousand Dollars ($50,000) and then Seller shall be liable
for such Buyer Losses only to the extent that they exceed
such amount, with the exception of Seller's obligation to
indemnify for Buyer Losses in the nature of Management
Employee claims set forth in subsection 8.01(a)(iv) above,
which obligation will be without monetary limit or
threshold.
(c)
Seller's obligation to indemnify for Buyer Losses
shall be limited to an amount or amounts in the aggregate
equal to fifty percent (50%) of the total Purchase Price.
(d)
If on the Closing Date either party (the "first
party") has actual knowledge of the untruth, inaccuracy or
breach of any representation or warranty by the other party
contained in this Agreement or the Documents, then any liability,
obligation, claim, loss, cost, damage and expense, including attorneys
fees and disbursements, arising out of or resulting
therefrom shall not be included as part of Losses of the
first party and the other party shall have no obligation to
indemnify the first party therefor.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
Section 9.01 Representations and Warranties.
The representations and warranties of the parties contained
herein shall survive the Closing to the extent provided in
Section 8.04.
ARTICLE X
MISCELLANEOUS
Section 10.01 Cooperation.
Each of the parties hereto shall use its reasonable efforts
to take or cause to be taken all actions, to cooperate with
the other party hereto, with respect to 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.
Section 10.02 Waiver.
Any failure of Seller to comply with any of its obligations
or agreements herein contained may be waived only in
writing by Buyer and Guarantor. Any failure of Buyer or
Guarantor to comply with any of its obligations or
agreements herein contained may be waived only in writing
by Seller.
Section 10.03 Notices.
All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given
upon receipt of: hand delivery; certified or registered
mail, return receipt requested; or telecopy transmission
with confirmation of receipt:
(i)
If to Buyer or Guarantor, to:
U.S. Assemblies San Diego, Inc.
or The Matco Electronics Group, Inc.
000 Xxxxx Xxxxxx Xxxx Xxxxxx, Xxx Xxxx
00000 Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxxx Xxxxx
(with a copy to):
Xxxxx, Xxxxxx & Xxxxxx,LLP
0 Xxxxxxx Xxxxxxx
Xxxxxx, Xxx Xxxx 00000-0000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxx Esq.
(ii)
If to Seller, to:
Xxxxx Corona Corporation
000 Xxxxx 00 Xxxxx
Xxxxxxxx, Xxx Xxxx 00000-0000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Attention: W. Xxxxxxx Xxxxxxxx
(with a copy to):
Winthrop, Stimson, Xxxxxx & Xxxxxxx
Financial Centre
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Attention: G. Xxxxxxx Xxxxxx, Esq.
Such names and addresses may be changed by written notice
to each person listed above.
Section 10.04 Governing Law and Consent to Jurisdiction.
(a)
This Agreement shall be governed by and construed
in accordance with the internal substantive laws and not
the choice of law rules of the State of New York.
(b)
Any judicial proceeding brought with respect to
this Agreement must be brought in any court of competent
jurisdiction in the State of New York, and, by execution
and delivery of this Agreement, each party (i) accepts,
generally and unconditionally, the exclusive jurisdiction
of such courts and any related appellate court, and
irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement and (ii)
irrevocably waives any objection it may now or hereafter
have as to the venue of any such suit, action or proceeding
brought in such a court or that such court is an
inconvenient forum. THE PARTIES HEREBY WAIVE TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING TO WHICH THEY ARE BOTH PARTIES
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
AGREEMENT.
Section 10.05 Counterparts.
This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the
same instrument.
Section 10.06 Headings.
The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
Section 10.07 Entire Agreement.
This Agreement, including the Exhibits and Schedules hereto
and the documents referred to herein, embodies the entire
agreement and understanding of the parties hereto in respect
of the subject matter contained herein. This Agreement
supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
Section 10.08 Amendment and Modification.
This Agreement may be amended or modified only by written
agreement of the parties hereto.
Section 10.09 Binding Effect; Benefits.
This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and
assigns; nothing in this Agreement, express or implied, is
intended to confer on any Person other than the parties hereto
and their respective successors and assigns (and, to the
extent provided in Sections 8.01 and 8.02, the other
Buyer Indemnitees and Seller Indemnitees) any rights,
remedies, obligations or
liabilities under or by reason of this Agreement. Section
10.10 Assignability.
This Agreement shall not be assignable by any party hereto
without the prior written consent of the other party.
Section 10.11 Guarantee.
Guarantor hereby approves the transactions contemplated by
this Agreement and hereby agrees to be jointly and severally
liable along with Buyer for each and every one of Buyer's
obligations hereunder to the same extent that Buyer is liable,
as a co obligor and not as a surety or guarantor.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the date first above written.
U.S. ASSEMBLIES SAN DIEGO, INC.
By: /s/ Xxxxxxxx X. Xxxxx
Name: Xxxxxxxx X. Xxxxx
Title: Vice President and Secretary
THE MATCO ELECTRONICS GROUP, INC.
By: /s/Xxxxxxxx X. Xxxxx
Name: Xxxxxxxx X. Xxxxx
Title: Treasurer/CFO
XXXXX XXXXXX CORPORATION
By: /s/ W. Xxxxxxx Xxxxxxxx
Name: W. Xxxxxxx Xxxxxxxx
Title: Chief Executive Officer
Schedule 1.01(a)
Assets
Contracts identified as "MAT" on Schedule 3.07.
Machinery, equipment, leasehold improvements and other assets
used in connection with the business of manufacturing
manufacturing generally, presently located in Tijuana,
Mexico and described in the computer report Xxxxx
Corona Corporation Sold Assets, Date 11/12/97 Time
3:22 P.M. Both Buyer and Seller are in possession of
identical printed copies of such computer report,
which is hereby incorporated by reference into this Schedule.
Retained Assets
Patents and trademarks including the name "Xxxxx Xxxxxx".
Product specifications, drawings and bills of material
related to the production of typewriters, personal
word processors, headsets and supplies and
accessories.
Contracts identified as "SCC" on Schedule 3.07
Tooling, dies, jigs, gages and fixtures related to the
production of typewriters, personal word processors,
headsets and supplies and accessories. Property,
plant and equipment related to the distribution
California. Both Buyer and Seller are in possession
of identical printed copies of the computer report
Xxxxx Corona Corporation Retained Assets Date
11/12/97 Time 3:27 P.M., which is hereby incorporated
by reference into this Schedule.
Schedule 1.01(b)
Assumed Liabilities
None.
Schedule 1.04
Management Employees
Xxxxxx Xxxxx
Xxxxxxx Xxxxxx
Xxxxxx Xxx
Xxxxx Xxxxxxx
Schedule 3.03
No Violations;
Consents
Violations - none.
Consents are needed from:
Congress Financial Corporation
805 Properties (San Diego landlord)
Schedule 3.04
Encumbrances
Congress Financial Corporation has a lien on all of
Seller's now owned and hereafter acquired accounts,
contract rights, general intangibles, documents,
instruments, chattel paper, inventory, equipment,
fixtures, and other property, and the
proceeds/products hereof. This lien will be released
from the Assets before the Closing.
Schedule 3.05
Litigation
SCC was the owner of manufacturing facilities in Groton,
New York (the "Groton Site") and Cortlandville, New York
(the "Cortlandville Site" and together, the "Owner/Operator
Sites"). SCC's liability, if any, at the Owner/Operator
Sites stems from groundwater contamination at the
Cortlandville Site and soil contamination at the Groton
Site.
SCC was served in June 1992 with a summons and complaint
and, in June 1994, with an amended complaint in a
contribution action brought by five private plaintiffs in
the United States District Court for the Northern District
of New York pursuant to the federal Comprehensive
Environmental Response, Compensation and Liability Act and
certain state law theories (the "Copper Industries
action"). The amended complaint sought contribution or
reimbursement for response costs incurred to date, and to
be incurred in the future, for the remediation of a site in
Cortland, New York known as the "Xxxxx Site". Claims
concerning the Xxxxx Site were filed against the
Environmental Protection Agency, the United States
Department of the Interior, the New York Department of
Environmental Conservation ("DEC"), the New York Department
of Health ("DOH") and certain plaintiffs and defendants in
the Copper Industries action. SCC entered into a written
agreement with the United States (on behalf of the DEC and
DOH) , and the five Copper Industries plaintiffs dated as
of February 14, 1997 (the "Xxxxx Site Settlement"). The
Xxxxx Site Settlement was approved by the Bankruptcy Court
on May 29, 1997 after all the conditions precedent to the
settlement had been satisfied.
SCC is also a defendant or plaintiff in various other legal
actions that have arisen in the ordinary course of
business, the ultimate resolution of which will not have a
material adverse effect on either SCC's financial position
or results of operation.
Schedule 3.07
Contracts
Both Buyer and Seller are in possession of identical
printed copies of the computer report Contracts for
Maintenance, Services, Rentals and Leases Dated
11/13/97, which is hereby incorporated by reference
into this Schedule.
Schedule 3.09
Employees; Labor Relations
None.
Schedule 3.10
Suppliers
Both Buyer and Seller are in possession of identical
printed copies of the computer report Suppliers of
the Business Date 11/12/97 Time 5:26 P.M., which is
hereby incorporated by reference into this Schedule.
Schedule 3.11
Certain Transactions
None.
Schedule 3.12
Persons with "Knowledge"
W. Xxxxxxx Xxxxxxxx President and Chief Executive Officer
Xxxx X. Xxxxxxxxxxx Executive Vice President, Chief Financial Officer and
Assistant Secretary
Xxxxxxx X. Xxxxxxxx Vice President/Operations
Xxxxxx X. Xxxxxx Vice President/Controller
Schedule
4.03 No
Violations;
Consents
Violations - none.
Consents are needed from:
Bank of Canada syndicate
GE Capital Corp.
Schedule
4.04
Litigation
None.
Schedule 5.0
Finders' Fees
None.
Exhibit A
Xxxx of Sale
Exhibit B
Assignment and Assumption Agreement
Exhibit C
Opinion of Seller's Counsel
Exhibit D
Opinion of Buyer's Counsel
