EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
DATED AS OF JUNE 27, 2003
by and among
APA OPTICS, INC. ("APA")
APA CABLES AND NETWORKS, INC. ("Buyer")
and
AMERICABLE, INC. ("Americable")
TABLE OF CONTENTS
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. SALE AND TRANSFER OF ASSETS; CLOSING. . . . . . . . . . . . . . 8
2.1 ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.2 PURCHASE PRICE. . . . . . . . . . . . . . . . . . . . . . . . . 8
2.3 ESCROW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.4 ALLOCATION OF PURCHASE PRICE. . . . . . . . . . . . . . . . . . 9
2.5 ASSUMPTION OF LIABILITIES . . . . . . . . . . . . . . . . . . . 9
2.6 CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.7 CLOSING OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . 10
2.8 PRORATION OF EXPENSES . . . . . . . . . . . . . . . . . . . . . 11
2.9 TITLE AND RISK OF LOSS. . . . . . . . . . . . . . . . . . . . . 12
3. REPRESENTATIONS AND WARRANTIES OF AMERICABLE. . . . . . . . . . 13
3.1 ORGANIZATION AND GOOD STANDING. . . . . . . . . . . . . . . . . 13
3.2 AUTHORITY; NO CONFLICT. . . . . . . . . . . . . . . . . . . . . 13
3.3 FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . 14
3.4 TITLE TO PROPERTIES; ENCUMBRANCES . . . . . . . . . . . . . . . 15
3.5 CONDITION AND SUFFICIENCY OF ASSETS . . . . . . . . . . . . . . 15
3.6 CLEAR TITLE . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.7 PRODUCT LIABILITY CLAIMS. . . . . . . . . . . . . . . . . . . . 15
3.8 ACCOUNTS RECEIVABLE . . . . . . . . . . . . . . . . . . . . . . 16
3.9 INVENTORY . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.10 NO UNDISCLOSED LIABILITIES. . . . . . . . . . . . . . . . . . . 16
3.11 TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.12 NO MATERIAL ADVERSE CHANGE. . . . . . . . . . . . . . . . . . . 17
3.13 EMPLOYEE BENEFITS . . . . . . . . . . . . . . . . . . . . . . . 17
3.14 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL
AUTHORIZATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.15 LEGAL PROCEEDINGS; ORDERS . . . . . . . . . . . . . . . . . . . 19
3.16 CONTRACTS; NO DEFAULTS. . . . . . . . . . . . . . . . . . . . . 20
3.17 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.18 ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . . . . . . 22
3.19 EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.20 INTELLECTUAL PROPERTY . . . . . . . . . . . . . . . . . . . . . 22
3.21 DISCLOSURE. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.22 BROKERS OR FINDERS. . . . . . . . . . . . . . . . . . . . . . . 24
3.23 NEGOTIATION OF PURCHASE PRICE . . . . . . . . . . . . . . . . . 24
3.24 INDEBTEDNESS. . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.25 AMERICABLE CREDITORS. . . . . . . . . . . . . . . . . . . . . . 24
4. REPRESENTATIONS AND WARRANTIES OF BUYER AND APA . . . . . . . . 24
4.1 ORGANIZATION AND GOOD STANDING. . . . . . . . . . . . . . . . . 25
4.2 AUTHORITY; NO CONFLICT. . . . . . . . . . . . . . . . . . . . . 25
4.3 CERTAIN PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . 26
4.4 BROKERS OR FINDERS. . . . . . . . . . . . . . . . . . . . . . . 26
5. CONDITIONS PRECEDENT TO OBLIGATION OF BUYER TO CLOSE. . . . . . 28
5.1 ACCURACY OF REPRESENTATIONS . . . . . . . . . . . . . . . . . . 28
5.2 PERFORMANCE BY AMERICABLE . . . . . . . . . . . . . . . . . . . 28
5.3 CONSENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.4 ADDITIONAL DOCUMENTS. . . . . . . . . . . . . . . . . . . . . . 29
5.5 NO PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . . . 29
5.6 NO CLAIMS . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.7 NO PROHIBITION. . . . . . . . . . . . . . . . . . . . . . . . . 29
5.8 DUE DILIGENCE REVIEW. . . . . . . . . . . . . . . . . . . . . . 29
6. CONDITIONS PRECEDENT TO OBLIGATION OF AMERICABLE TO CLOSE . . . 29
6.1 ACCURACY OF REPRESENTATIONS . . . . . . . . . . . . . . . . . . 29
6.2 BUYER'S PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . 30
6.3 CONSENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.4 ADDITIONAL DOCUMENTS. . . . . . . . . . . . . . . . . . . . . . 30
6.5 NO INJUNCTION . . . . . . . . . . . . . . . . . . . . . . . . . 30
7. INDEMNIFICATION; REMEDIES . . . . . . . . . . . . . . . . . . . 31
7.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE. . 31
7.2 INDEMNIFICATION BY AMERICABLE . . . . . . . . . . . . . . . . . 32
8. GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . 33
8.1 EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.2 PUBLIC ANNOUNCEMENTS. . . . . . . . . . . . . . . . . . . . . . 33
8.3 CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . . . . 33
8.4 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.5 JURISDICTION; SERVICE OF PROCESS. . . . . . . . . . . . . . . . 34
8.6 FURTHER ASSURANCES. . . . . . . . . . . . . . . . . . . . . . . 35
8.7 WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.8 ENTIRE AGREEMENT AND MODIFICATION . . . . . . . . . . . . . . . 35
8.9 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS. . . . . . . 35
8.10 SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . 36
8.11 SECTION HEADINGS, CONSTRUCTION. . . . . . . . . . . . . . . . . 36
8.12 TIME OF ESSENCE . . . . . . . . . . . . . . . . . . . . . . . . 36
8.13 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . 36
8.14 COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . . 36
9. COVENANTS REGARDING PERFORMANCE FOLLOWING THE DATE OF CLOSING . 36
9.1 COLLECTION OF RECEIVABLES . . . . . . . . . . . . . . . . . . . 36
9.2 FURTHER ACTS AND ASSURANCES . . . . . . . . . . . . . . . . . . 37
9.3 USE OF FACILITIES . . . . . . . . . . . . . . . . . . . . . . . 37
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9.4 JOINDER AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . 37
9.5 SETTLEMENT OF DEBTS . . . . . . . . . . . . . . . . . . . . . . 37
SCHEDULE 2.3 PURCHASE PRICE ADJUSTMENT
SCHEDULE 2.5 LIABILITIES
EXHIBIT 2.3 FORM OF ESCROW AGREEMENT
EXHIBIT 2.5 ASSUMPTION AGREEMENT
EXHIBIT 2.7 XXXX OF SALE
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is made as of June 27, 2003, by
and among APA Cables and Networks, Inc., a Minnesota corporation ("Buyer"), APA
Optics, Inc., a Minnesota corporation ("APA"), and Americable, Inc., a Minnesota
corporation ("Americable").
RECITALS
Buyer is a wholly-owned Subsidiary of APA.
Buyer desires to purchase substantially all assets of Americable, and Americable
desires to sell such assets to Buyer, for the consideration and on the terms set
forth in this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings specified
or referred to in this Section 1:
"Americable"-- as defined in the introductory paragraph of this Agreement.
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"Americable Financial Statements"-- as defined in the Section 2.7(viii) of this
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Agreement.
"APA"--as defined in the introductory paragraph of this Agreement.
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"Applicable Contract"--any Contract included in the Assets which would be deemed
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"material" to a prudent business person and (a) under which Americable has or
may acquire any material rights, (b) under which Americable has or may become
subject to any material obligation or liability, or (c) by which Americable or
any of the material assets owned or used by it is or is likely to become bound.
By way of example and not limitation, a Contract is material if it provides or
is likely to provide substantial revenues or is likely to subject Americable to
substantial liability. A contract for acquisition by Americable of services or
goods which cannot be obtained from another source or provider is also material.
"Assets"--the assets, tangible and intangible, of Americable used or useful in
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Americable's business, wherever located, consisting of all of Americable's
assets as of the date of this Agreement, plus additions and accretions between
the date of this Agreement and the Closing Date. By way of example, and not in
limitation of the foregoing, the Assets include all equipment, inventory,
finished product, intellectual property, trade secrets, accounts receivable,
Contracts, commitments, customer lists, recoveries in insurance, litigation or
warranty with respect to any assets, work-in process, the corporate name and
assumed names, and all goodwill; provided, however, that the Assets do not
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include the Excluded Assets (as hereinafter defined).
"Assumption Agreement"--as defined in Section 2.5 of this Agreement.
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"Balance Sheet Date"-- May 31, 2003.
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"Basket Amount"--as defined in Section 7.2 of this Agreement.
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"Best Efforts"--the efforts that a prudent Person desirous of achieving a result
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would use in similar circumstances to ensure that such result is achieved as
expeditiously as practicable; provided, however, that an obligation to use Best
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Efforts under this Agreement does not require the Person subject to that
obligation to take actions that would result in a materially adverse change in
the benefits to or rights of such Person under this Agreement or the
Contemplated Transactions.
"Xxxx of Sale"--as defined in Section 2.7 of this Agreement.
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"Bondholder"-a holder of the $10,000,000 Subordinated Debentures issued pursuant
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to that certain Indenture dated as of December 1, 2000 between Americable and
National City Bank of Minneapolis, as Trustee.
"Breach"--a "Breach" by a Person of a representation, warranty, covenant,
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obligation, or other provision of this Agreement or any instrument delivered
pursuant to this Agreement will be deemed to have occurred if there is or has
been any material inaccuracy on the part of such Person in or material breach by
such Person of, or any material failure by such Person to perform or comply
with, such representation, warranty or covenant, obligation or other provision.
"Buyer"--as defined in the first paragraph of this Agreement.
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"Closing"--as defined in Section 2.6 of this Agreement.
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"Closing Date"--June 27, 2003
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"Consent"--any approval, consent, ratification, waiver, or other authorization
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(including any Governmental Authorization).
"Contemplated Transactions"--all of the transactions contemplated by this
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Agreement, including:
(a) the sale of the Assets by Americable to Buyer;
(b) the performance by Buyer, APA and Americable and their respective
Affiliates of their respective covenants and obligations under this Agreement;
and
(c) Buyer's acquisition and ownership of the Assets and exercise of control
over them.
"Contract"--any agreement, contract, obligation, promise or undertaking (whether
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written or oral and whether express or implied) that is legally binding.
5
"Disclosure Letter"--the disclosure letter delivered by Americable to Buyer
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concurrently with the execution and delivery of this Agreement.
"Encumbrance"--any charge, claim, community property interest, condition,
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equitable interest, lien, option, pledge, security interest, right of first
refusal or restriction of any kind, including any restriction on use, voting,
transfer, receipt of income or exercise of any other attribute of ownership.
"Environmental Law"--any Legal Requirement that requires or relates to:
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(a) advising appropriate authorities, employees, and the public of intended
or actual releases of pollutants or Hazardous Materials, violations of discharge
limits, or other prohibitions and of the commencements of activities, such as
resource extraction or construction, that could have a significant impact on the
environment;
(b) preventing or reducing to acceptable levels the release of pollutants
or Hazardous Materials into the environment;
(c) reducing the quantities, preventing the release, or minimizing the
hazardous characteristics of wastes that are generated;
(d) assuring that products are designed, formulated, packaged, and used so
that they do not present unreasonable risks to human health or the environment
when used or disposed of;
(e) protecting resources, species, or ecological amenities;
(f) reducing to acceptable levels the risks inherent in the transportation
of Hazardous Materials;
(g) cleaning up pollutants that have been released, preventing the threat
of release, or paying the costs of such clean up or prevention; or
(h) making responsible parties pay private parties, or groups of them, for
damages done to their health or the environment, or permitting self-appointed
representatives of the public interest to recover for injuries done to public
assets.
"ERISA"--as defined in Section 3.13 of this Agreement.
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"Escrow Agent"--as defined in Section 2.3 of this Agreement.
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"Escrow Agreement"--as defined in Section 2.3 of this Agreement.
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"Excluded Assets"-(1) all cash held by or on behalf of Americable, (2) payments
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due from Related Persons of Americable up to the amount of $166,000, (3)
pre-paid expenses up to the amount of $179,000, (4) 193,800 shares of the common
stock of Vicom, Inc. held by or on behalf of Americable, (5) the Irrevocable
Standby Letter of Credit (the "Letter of Credit") issued by National City Bank
(and restricted cash collateral for the same) in the face amount of $235,000 in
6
favor of in favor of West Real Estate and Management, Inc. (the "Landlord")
under the Lease as security for performance of the Lease, all according to the
terms of such Letter of Credit, and (6) all Contracts except those listed on
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Schedule 2.5 to this Agreement.
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"Facilities"--any real property, leaseholds, or other interests currently owned
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or operated by Americable and any buildings, plants, structures, or equipment
(including motor vehicles and rolling stock) currently or formerly owned or
operated by Americable.
"GAAP"--generally accepted United States accounting principles, applied on a
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consistent basis.
"General Damages"--as defined in Section 7.2 of this Agreement.
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"General Indemnity Claimant"--as defined in Section 7.2 of this Agreement.
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"Governmental Authorization"--any material approval, consent, license, permit,
-----------------------------
waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
material Legal Requirement.
"Governmental Body"--any:
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(a) nation, state, county, city, town, village, district, or other
jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other government;
(c) governmental or quasi-governmental authority of any nature (including
any governmental agency, branch, department, official, or entity and any court
or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority or
power of any nature.
"Hazardous Materials"--any waste or other substance that is listed, defined,
----------------------
designated, or classified as, or otherwise determined to be, hazardous,
radioactive, or toxic or a pollutant or a contaminant under or pursuant to any
Environmental Law, including any admixture or solution thereof, and specifically
including petroleum and all derivatives thereof or synthetic substitutes
therefor and asbestos or asbestos-containing materials.
"Indebtedness"--means the indebtedness described in Schedule 3.24 of the
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Disclosure Letter.
"Indemnified Parties"--as defined in Section 7.2 of this Agreement.
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"Indemnity Fund"--as defined in Section 2.3 of this Agreement.
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"Indemnity Release Date"-the later of (a) the 13-month anniversary of the
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Closing Date, and (b) the final administration of Americable's estate in
accordance with any bankruptcy, reorganization, debt arrangement or other
proceeding under any bankruptcy or insolvency law.
7
"Intellectual Property"--any and all (i) inventions (whether patentable or
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unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications and patent disclosures, together with all
reissuances, continuations, continuations in part, revisions, extensions and
reexaminations thereof, (ii) trademarks, service marks, trade dress, logos,
trade names, assumed names and corporate names, together with all translations,
adaptations, derivations and combinations thereof and including all goodwill
associated therewith, and all applications, registrations and renewals in
connection therewith, (iii) copyrightable works, all copyrights and all
applications, registrations and renewals in connection therewith, (iv) mask
works and all applications, registrations and renewals in connection therewith,
(v) trade secrets and confidential business information (including ideas,
research and development, know-how, technology, formulas, compositions,
manufacturing and production processes and techniques, technical data, designs,
drawings, specifications, customer and supplier lists, pricing and cost
information and business and marketing plans and proposals), (vi) computer
software (including data and related software program documentation in computer
readable and hard-copy forms), (vii) other intellectual property and proprietary
rights of any kind, nature or description, and (viii) copies of tangible and
embodiments thereof (in whatever form or medium).
"IRC" or "Code"--the Internal Revenue Code of 1986 or any successor law, and
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regulations issued by the IRS pursuant to the Internal Revenue Code or any
successor law.
"IRS"--the United States Internal Revenue Service or any successor agency, and,
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to the extent relevant, the United States Department of the Treasury.
"Knowledge"--an individual will be deemed to have "Knowledge" of a particular
-----------
fact or other matter if:
(a) such individual is actually aware of such fact or other matter; or
(b) a prudent individual could be expected to discover or otherwise become
aware of such fact or other matter in the course of conducting a reasonable
investigation concerning the existence of such fact or other matter.
A Person (other than an individual) will be deemed to have "Knowledge" of a
particular fact or other matter if any individual who is serving as an officer
has, or at any time had, Knowledge of such fact or other matter.
"Lease"--the lease dated April 24, 2000 between the Landlord (as lessor) and
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Americable (as tenant) for certain premises located at 00000 Xxxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx.
"Legal Requirement"--any Order or any constitution, law, ordinance, principle of
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common law, regulation, statute or treaty of a Governmental Body.
"Letter of Credit"--as defined in the definition of "Excluded Assets," above.
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"Liability" or "Liabilities" --any and all debts, liabilities and/or obligations
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of any type, nature or description (whether known or unknown, asserted or
unasserted, secured or unsecured, absolute
8
or contingent, accrued or unaccrued, liquidated or unliquidated and whether due
or to become due).
"Material Consent"--as defined in Section 3.2.
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"Occupational Safety and Health Law"--any Legal Requirement designed to provide
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safe and healthful working conditions and to reduce occupational safety and
health hazards.
"Order"--any award, decision, injunction, judgment, order, ruling, subpoena, or
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verdict entered, issued, made, or rendered by any court, administrative agency,
or other Governmental Body or by any arbitrator.
"Organizational Documents"--(a) the articles or certificate of incorporation and
--------------------------
the bylaws of a corporation party to this Agreement; and (b) any amendment to
any of the foregoing.
"Person"-- any individual, corporation (including any non-profit corporation),
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cooperative, general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or Governmental Body.
"Plan"--as defined in Section 3.13 of this Agreement.
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"Proceeding"--any action, arbitration, audit, hearing, investigation,
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litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.
"Purchase Price"--as defined in Section 2.2 of this Agreement.
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"Purchase Price Holdback"--as defined in Section 2.3 of this Agreement.
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"Qualified Claimant"-any Bondholder, trustee in the potential bankruptcy of
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Americable, receiver, trade creditor, contractual creditor, or other party to
whom any debt of Americable is due and owing under or arising from any Contract.
"Qualified Damages"--as defined in Section 7.2 of this Agreement.
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"Related Person"--with respect to a particular individual:
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(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled by such individual
or one or more members of such individual's Family;
(c) any Person in which such individual or members of such individual's
Family hold (individually or in the aggregate) a Material Interest; and
(d) any Person with respect to which such individual or one or more members
of such individual's Family serves as a director, officer, partner, executor, or
trustee (or in a similar capacity).
9
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is directly or
indirectly controlled by, or is directly or indirectly under common control with
such specified Person;
(b) any Person that holds a Material Interest in such specified Person;
(c) each Person that serves as a director, officer, partner, executor, or
trustee of such specified Person (or in a similar capacity);
(d) any Person in which such specified Person holds a Material Interest;
(e) any Person with respect to which such specified Person serves as a
general partner or a trustee (or in a similar capacity); and
(f) any Related Person of any individual described in clause (b) or (c).
For purposes of this definition, (a) the "Family" of an individual includes (i)
the individual, (ii) the individual's spouse and former spouses, (iii) any other
natural person who is related to the individual or the individual's spouse
within the second degree, and (iv) any other natural person who resides with
such individual, and (b) "Material Interest" means direct or indirect beneficial
ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934,
interpreted regardless of whether such Person is subject thereto) of voting
securities or other voting interests representing at least 15% of the
outstanding voting power of a Person or equity securities or other equity
interests representing at least 15% of the outstanding equity securities or
equity interests in a Person.
"Representative"--with respect to a particular Person, any director, governor,
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officer, manager, employee, agent, consultant, advisor, or other representative
of such Person, including legal counsel, accountants, and financial advisors.
"Subsidiary"--with respect to any Person ("Parent"), any corporation or other
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Person whose securities or other interests having the power to elect a majority
of that corporation's or other Person's board of directors or similar governing
body, or otherwise having the power to direct the business and policies of that
corporation or other Person (other than securities or other interests having
such power only upon the happening of a contingency that has not occurred) are
held by the Parent or one or more of its Subsidiaries.
"Tax"--any tax (including any income tax, capital gains tax, value-added tax,
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sales tax, property tax, gift tax, or estate tax), levy, assessment, tariff,
duty (including any customs duty), deficiency, or other fee, and any related
charge or amount (including any fine, penalty, interest or addition to tax),
imposed, assessed or collected by or under the authority of any Governmental
Body or payable pursuant to any tax-sharing agreement or any other Contract
relating to the sharing or payment of any such tax, levy, assessment, tariff,
duty, deficiency or fee.
"Tax Return"--any return (including any information return), report, statement,
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schedule, notice, form, or other document or information filed with or
10
submitted to, or required to be filed with or submitted to, any Governmental
Body in connection with the determination, assessment, collection, or payment of
any Tax or in connection with the administration, implementation, or enforcement
of or compliance with any Legal Requirement relating to any Tax.
"Threatened"--a claim, Proceeding, dispute, action, or other matter will be
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deemed to have been "Threatened" if any demand or statement has been made
(orally or in writing) or any notice has been given (orally or in writing), or
if any other event has occurred or any other circumstances exist, that would
lead a prudent Person to conclude that such a claim, Proceeding, dispute,
action, or other matter is likely to be asserted, commenced, taken, or otherwise
pursued in the future.
2. SALE AND TRANSFER OF ASSETS; CLOSING
2.1 ASSETS
Subject to the terms and conditions of this Agreement, at the Closing,
Americable will sell, transfer and assign to Buyer, and Buyer will purchase and
acquire from Americable, all of Americable's right, title and interest, as of
the Closing Date (as hereinafter defined), in and to all of the Assets.
2.2 PURCHASE PRICE
The purchase price (the "Purchase Price") for the Assets will be
$2,050,000, subject to adjustment as set forth in Section 2.3 of this Agreement.
2.3 ESCROW
(a) At the Closing, Buyer shall cause to be deposited with U.S. Bank
National Association (the "Escrow Agent") the sum of $307,500, consisting
of $205,000 (the "Indemnity Fund") and $102,500 (the "Purchase Price
Holdback") in immediately available funds pursuant to an Escrow Agreement
in substantially the form of Exhibit 2.3 attached hereto (the "Escrow
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Agreement").
(b) The Indemnity Fund shall be held to protect Buyer with respect to
matters as to which Americable is required to indemnify Buyer pursuant to
the provisions of Article 7 of this Agreement. The Indemnity Fund, less the
amount of all claims made by the Buyer for indemnification, plus the amount
of any accrued interest attributed to the portion of the Indemnity Fund
owed to Americable shall be paid to Americable (or as directed by its
authorized representative) as and when described in the Escrow Agreement.
(c) The Purchase Price Holdback shall be used to increase or decrease,
as applicable, the Purchase Price in the event that Closing Net Assets (as
defined in Schedule 2.3) is higher or lower, as the case may be, than Net
------------
Assets as of May 31, 2003, all as more fully described in Schedule 2.3.
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2.4 ALLOCATION OF PURCHASE PRICE
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Buyer shall, in a reasonable manner and after taking into account the
applicable Treasury Regulations and the fair market value of such items,
determine the fair market value of the Assets and Buyer shall allocate the
Purchase Price, as prepared by Buyer on Schedule 2.4, among the Assets in
------------
accordance with said determination and Section 1060 of the IRC. Said allocation
shall be communicated by Buyer to Americable as soon as practical after it is
available. Said allocation shall be subject to Americable's consent (which shall
not be unreasonably withheld). Buyer and Americable shall each file, in
accordance with Section 1060 of the IRC, an Asset Allocation Statement on Form
8594 (which conforms with such allocation) with its federal income Tax Return
for the tax year in which the Closing Date occurs and shall contemporaneously
provide the other party with a copy of the Form 8594 being filed. Each party
agrees not to assert, in connection with any Tax Return, audit or other similar
proceeding, any allocation of the Purchase Price which differs from the
allocation determined by Buyer and consented to by Seller hereunder.
2.5 ASSUMPTION OF LIABILITIES
(a) LIMITATION ON ASSUMPTION OF LIABILITIES. Americable shall transfer
the Assets to Buyer on the Closing Date free and clear of all Encumbrances,
and Buyer shall not, by virtue of its purchase of the Assets, assume or
become responsible for any Liabilities of Americable or any Shareholder
other than pursuant to this Section 2.5.
(b) ASSUMPTION OF CERTAIN LIABILITIES. Notwithstanding the provisions
of Section 2.5(a) Buyer covenants and agrees that on the Closing Date, it
shall execute and deliver to Americable an assumption agreement in the form
of Exhibit 2.5 attached hereto (the "Assumption Agreement") pursuant to
-----------
which it will assume and agree to perform and discharge only the following
Liabilities of Americable:
(i) All Liabilities of Americable arising under the Applicable
Contracts listed or described on Schedule 2.5 which accrue and become
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performable, in full or in part, on and after the Closing Date, except
that Buyer does not assume any Liabilities for Americable products
sold or services rendered (A) under such Contracts prior to the
Closing Date to the extent that Americable has received payment for
such products sold or services rendered or (B) under any Contracts
which are Excluded Assets; and
(ii) Any other Liabilities of Americable identified on Schedule
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2.5 hereto.
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2.6 CLOSING
The purchase and sale (the "Closing") provided for in this Agreement will
take place at the offices of Xxxx & Xxxxxxx, A Professional Association, 4800
Xxxxx Fargo Center, 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, at
10:00 a.m. (local time) on the date of this Agreement (the "Closing Date").
Notwithstanding any provision of this Agreement to the contrary, the Closing
shall be effective for all purposes, including Tax and accounting purposes, as
of the close of business on the Closing Date.
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2.7 CLOSING OBLIGATIONS
At the Closing:
(a) Americable will deliver to Buyer:
(i) a copy certified by the Secretary of Americable of the duly
adopted resolutions of Americable's Board of Directors and shareholders
approving this Agreement and authorizing the execution and delivery of this
Agreement, including the documents, instruments and agreements to be
executed and/or delivered by Americable and/or shareholders pursuant to
this Agreement, and the consummation of the Contemplated Transactions;
(ii) a Xxxx of Sale in the form of Exhibit 2.7 attached hereto to all
-----------
of the Assets duly executed by Americable (the "Xxxx of Sale");
(iii) duly executed assignments by Americable to Buyer with respect to
all Intellectual Property in a form acceptable for filing with the U.S.
Patent and Trademark Office;
(iv) releases, satisfactions, or terminations of all financing
statements or other evidences of Encumbrances filed with the Minnesota
Secretary of State, any county recorder and/or any other similar office in
the State of Minnesota or any other state or jurisdiction evidencing a
material Encumbrance on any of the Assets;
(v) those Material Consents, releases, assignments and permissions set
forth in Section 3.2 of the Disclosure Letter, each in a form reasonably
satisfactory to counsel for Buyer;
(vi) certificates of title and assignments thereof for vehicles
included in the Assets, if any;
(vii) audited financial statements of Americable for its fiscal years
ended December 31, 2002 and December 31, 2001, with reports of the
auditors, and unaudited financial statements for the five months ended May
31, 2003 (collectively, the "Americable Financial Statements");
(viii) the Escrow Agreement;
(ix) the side letter by and among Buyer, APA and Americable concerning
Buyer's occupancy and use of Americable's Bloomington, Minnesota facilities
(the "Side Letter"); and
(x) such other documents and items as are reasonably necessary or
appropriate to effect the consummation of the Contemplated Transactions.
(b) Buyer will deliver:
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(i) to Americable, the Purchase Price (minus the Indemnity Fund and
the Purchase Price Holdback) by wire transfer to Americable's account at
M&I Xxxxxxxx & Xxxxx Bank, Minneapolis Branch, 000 Xxxxxxxx Xxxx,
Xxxxxxxxxxx, XX 00000, ABA #: 000000000, Swift Code: XXXXXX00, account
#0000000, reference: APACN asset purchase;
(ii) to Americable, a copy certified by the Secretary of Buyer of the
duly adopted resolutions of the Board of Directors of Buyer and APA
approving this Agreement and authorizing the execution and delivery of this
Agreement, including the documents, instruments and agreements to be
executed and/or delivered by the Buyer pursuant hereto, and the
consummation of the Contemplated Transactions;
(iii) to Americable, the Assumption Agreement;
(iv) the Side Letter; and
(v) to the Escrow Agent, the escrowed portion of the Purchase Price
and the Escrow Agreement.
2.8 PRORATION OF EXPENSES
Buyer shall be entitled to all amounts due or to become due and payable to
Americable under any Contract included in the Assets both as of and after the
Closing Date. All amounts due or to become due and payable by Americable under
the Contracts and under the Liabilities assumed by Buyer under Section 2.5 shall
be adjusted and prorated as of the opening of business on the Closing Date such
that Americable shall be responsible for amounts allocable with respect to
periods prior to the Closing Date, and Buyer shall be responsible for amounts
allocable with respect to periods on and after the Closing Date.
3. REPRESENTATIONS AND WARRANTIES OF AMERICABLE
Americable represents and warrants to Buyer and APA as follows:
3.1 ORGANIZATION AND GOOD STANDING
Americable is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Minnesota, with full power and
authority, corporate and otherwise, to conduct its business as it is now being
conducted, to own or use the properties and assets that it purports to own or
use, and to perform all its obligations under Applicable Contracts. Americable
is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each state or other jurisdiction in which either the
ownership or use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification.
3.2 AUTHORITY; NO CONFLICT; CONSENTS
(a) This Agreement constitutes the legal, valid, and binding obligation of
Americable, enforceable against Americable in accordance with its terms, except
as such enforcement may be
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limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors' rights or
by general principles of equity. Americable has the requisite right, power,
authority, and capacity to execute and deliver this Agreement and to perform its
obligations under this Agreement.
(b) Except as set forth in the Disclosure Letter, neither the execution and
delivery of this Agreement nor the consummation or performance of any of the
Contemplated Transactions:
(i) contravenes, conflicts with, or violates (A) any provision of the
Organizational Documents of Americable, (B) any resolution adopted by the
board of directors or the shareholders of Americable, or (C) any
Governmental Authorization that is held by Americable or that otherwise
relates to the business of Americable or any of the material Assets; or
(ii) imposes or creates any material Encumbrance upon or with respect
to any of the material Assets.
(c) Except as set forth in the Disclosure Letter, Americable is not
required to give any notice to or obtain any material Consent from any Person in
connection with the execution and delivery of this Agreement or the consummation
or performance of any of the Contemplated Transactions, it being acknowledged
and agreed by Buyer that Buyer, subject to Americable's obligations pursuant to
Section 8.6 hereof, waives all rights against Americable, its successors and
assigns related to the failure of Americable to deliver to Buyer at Closing or
otherwise to procure Consents disclosed as "required," other than those Consents
identified in the Disclosure Letter as "Material Consents."
3.3 FINANCIAL STATEMENTS
Americable has furnished to Buyer true and correct copies of the Americable
Financial Statements. Except as described in the Disclosure Letter or the
Americable Financial Statements, all of said financial statements, including any
notes thereto, are true and correct in all material respects and present in all
material respects an accurate and complete disclosure of the financial position
and condition of Americable as of their respective dates and the results of its
operations for the periods covered in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby; provided, however, that
any interim financial statements are subject to year-end adjustments. Except as
described in the Disclosure Letter or the Americable Financial Statements,
subsequent to the respective dates of the most recent of said financial
statements, there have been no material adverse changes in the properties,
assets, liabilities, revenues, income, expenses, operations, financial condition
or prospects of Americable from that reflected in the most recent of said
financial statements. Except as described in the Disclosure Letter or the
Americable Financial Statements, no prior period adjustment is reflected in the
statements of income, changes in shareholders' equity and cash flow contained in
the Americable Financial Statements, any notes thereto, for the period ending on
the Balance Sheet Date.
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3.4 TITLE TO PROPERTIES; ENCUMBRANCES
Americable does not own any real property, leasehold interest in real
property, or other interests therein, except as set forth in the Disclosure
Letter. Except as set forth in the Disclosure Letter, Americable owns or has
enforceable and assignable leases for all material Assets whether real,
personal, or mixed and whether tangible or intangible. Any Encumbrances
affecting or subjecting any material Assets are described in the Disclosure
Letter.
3.5 CONDITION AND SUFFICIENCY OF ASSETS
The Assets, including without limitation buildings, plants, structures, and
equipment, of Americable are structurally sound, are in good operating condition
and repair, ordinary wear and tear excepted, and are adequate for the uses to
which they are being put, and none of such buildings, plants, structures, or
equipment is in need of maintenance or repairs except for ordinary, routine
maintenance and repairs that are not material in nature or cost. Except as
described in the Disclosure Letter, the Assets are sufficient for the continued
conduct of Americable's business after the Closing in substantially the same
manner as conducted by Americable immediately prior to the Closing.
3.6 CLEAR TITLE
On the Closing Date, Americable will convey to Buyer free and clear of any
and all Encumbrances of any kind, nature or description whatsoever, good, valid
and marketable title to, or a valid leasehold interest in, all Assets (whether
real, personal or mixed, and whether tangible or intangible), including, without
limitation, all of the properties and assets listed on Americable's balance
sheet as of the Balance Sheet Date, except for: (i) personal property sold or
otherwise transferred since the Balance Sheet Date in the ordinary course of
business, and (ii) the Excluded Assets.
3.7 PRODUCT LIABILITY CLAIMS
To Americable's Knowledge, all products which Americable has sold have been
merchantable and free from material defects in material or workmanship for the
term and under the conditions set forth in Americable's standard written product
warranties. Except as set forth in the Disclosure Letter, during the twelve
months immediately preceding the date hereof, Americable has not received a
material claim based upon an alleged breach of product warranty, or arising from
manufacture or sale of its products ("Product Liability Claims"). Americable has
no reasonable grounds to believe that future Product Liability Claims will arise
with respect to products sold prior to the Closing Date.
3.8 ACCOUNTS RECEIVABLE
All accounts receivable of Americable that are reflected on the accounting
records of Americable as of the Closing Date (collectively, the "Accounts
Receivable") represent valid obligations arising from sales actually made or
services actually performed by Americable in the ordinary course of business.
To Americable's Knowledge, the Accounts Receivable are or will be as of the
Closing Date current and collectible net of the respective reserves shown on the
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accounting records of Americable as of the Closing Date (which reserves are
adequate and calculated consistent with past practice and, in the case of the
reserve as of the Closing Date, will not represent a material adverse change in
the composition of such Accounts Receivable in terms of aging). Subject to such
reserves and except as described in the Disclosure Letter, each of the Accounts
Receivable either has been or, to Americable's Knowledge, will be collected in
full, without any set-off, within ninety days after the day on which it first
becomes due and payable. The Disclosure Letter contains a complete and accurate
list of all Accounts Receivable as of the Closing Date, which list sets forth
the aging of such Accounts Receivable.
3.9 INVENTORY
Except for write-offs and other adjustments set forth in the Disclosure
Letter, all of Americable's parts, components, materials, and inventory
(collectively, "Inventory") consists of items which are in all material respects
of merchantable quality and in good condition. Except as described in the
Disclosure Letter, the Inventory has been purchased and/or manufactured in the
ordinary course of business and the volume of purchases and/or production
thereof and of orders therefor have not been reduced or increased in
anticipation of the consummation of the transactions contemplated hereby.
3.10 LIABILITIES OF AMERICABLE
Americable has no Knowledge of any Liabilities other than (i) Liabilities
reflected or reserved in the financial statements of Americable for the period
ending on the Balance Sheet Date or in the notes to such financial statements,
(ii) Liabilities incurred in the ordinary course of business, or (iii)
Liabilities described in the Disclosure Letter hereto.
3.11 TAXES
There exists no proposed tax assessment against Americable except as
disclosed in the Disclosure Letter. All Taxes that Americable is or was required
by Legal Requirements to withhold or collect have been duly withheld, accrued or
collected and, to the extent required, have been paid to the proper Governmental
Body or other Person.
3.12 NO MATERIAL ADVERSE CHANGE
Since the Balance Sheet Date, except as set forth in the Disclosure Letter,
Americable has not (i) sold, transferred or otherwise disposed of any of its
Assets outside the ordinary course of business or to any of its Related Persons;
(ii) mortgaged, pledged or subjected to any material Encumbrance any of the
Assets, Americable's right, title or interest in which is to be transferred,
conveyed or assigned under this Agreement or in connection with any of the
Contemplated Transactions; (iii) acquired any material Assets outside the
ordinary course of business; (iv) declared or paid any dividend or made any
other distribution to its shareholders or repurchased any of its outstanding
capital stock; (v) entered into any transaction or otherwise conducted any
business other than transactions in the ordinary course of business or
transactions which, individually or in the aggregate, involved more than
$100,000; (vi) modified, amended, canceled or terminated any material Contracts
under circumstances that could reasonably be anticipated to
17
have a material adverse effect on Americable; (vii) made any loan or advance to
any Related Persons; (viii) suffered any material adverse change in its Assets,
financial condition, results of operations, business or prospects; (ix)
sustained any material damage, loss or destruction of or to any of its Assets
taken as a whole (whether or not covered by insurance) except for such damages,
loss or destruction that will not have a material adverse effect; (x)
experienced any material labor trouble or any change in its executive personnel
except for such troubles or changes that will not have a material adverse effect
on Americable; or (xi) agreed to or obligated itself to take any of the actions
identified in clauses (i) through (vii) above.
3.13 EMPLOYEE BENEFITS
(a) Except as set forth in the Disclosure Letter, with respect to all
employees and former employees of Americable who perform or performed functions
in connection with the business of Americable and all dependents and
beneficiaries of such employees and former employees: (i) Americable does not
maintain or contribute to any nonqualified deferred compensation or retirement
plans, contracts or arrangements; (ii) Americable does not maintain or
contribute to any qualified defined contribution plans (as defined in Section
3(34) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or Section 414(i) of the Code; (iii) Americable does not maintain or
contribute to any qualified defined benefit plans (as defined in Section 3(35)
of ERISA or Section 414(j) of the Code); and (iv) Americable does not maintain
or contribute to any employee welfare benefit plans (as defined in Section 3(1)
of ERISA).
(b) To the knowledge of Americable, all employee benefit plans (as defined
in Section 3(3) of ERISA) which Americable maintains or to which it contributes
(collectively, the "Plans") comply in all material respects with the
requirements of ERISA and the Code, except for such failures to comply which
individually or in the aggregate could not reasonably be expected to have a
material adverse effect on the financial condition of the business of
Americable.
(c) Americable does not contribute (and has not ever contributed) to any
multi-employer plan, as defined in Section 3(37) of ERISA. To the knowledge of
Americable, Americable has no actual or potential liabilities under Section 4201
of ERISA for any complete or partial withdrawal from a multi-employer plan.
3.14 COMPLIANCE WITH LEGAL REQUIREMENTS
Americable is not in violation of or default under any law, regulation or
order applicable to it, the effect of which, individually or in the aggregate
with such other violations and defaults, could reasonably be expected to have a
material adverse effect on Americable's business, financial condition thereof or
the Assets conveyed to Buyer pursuant to this Agreement.
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3.15 LEGAL PROCEEDINGS
(a) Except as set forth in the Disclosure Letter, to the Knowledge of
Americable, there is no pending or threatened Proceeding:
(i) that has been commenced by or against Americable, or, to the
Knowledge of Americable, any other Person that otherwise relates to or may
affect the Assets conveyed to Buyer under this Agreement; or
(ii) that challenges, or that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions.
3.16 CONTRACTS; NO DEFAULTS
(a) The Disclosure Letter contains a complete and accurate list, and
Americable has made available to Buyer true and complete copies, of:
(i) each Applicable Contract that involves performance of services or
delivery of goods or materials by Americable;
(ii) each Applicable Contract that involves performance of services or
delivery of goods or materials to Americable;
(iii) each Applicable Contract that was not entered into in the
ordinary course of business and that involves expenditures or receipts of
money by Americable;
(iv) each Applicable Contract affecting the ownership of, leasing of,
title to, use of, or any leasehold or other interest in, any real or
material personal property;
(v) each material licensing agreement or other Applicable Contract
with respect to any Intellectual Property;
(vi) each collective bargaining agreement and other Applicable
Contract to or with any labor union or other employee representative of a
group of employees;
(vii) each Contract containing covenants that in any way purport to
materially restrict the business activity of Americable or any affiliate of
Americable or materially limit the freedom of Americable or any affiliate
of Americable to engage in any line of business or to compete with any
Person;
(viii) each Applicable Contract providing for payments to or by any
Person based on sales, purchases, or profits, other than direct payments
for goods;
(ix) each form of written warranty, guaranty, and or other similar
undertaking with respect to contractual performance extended by Americable
other than in the ordinary course of business; and
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(x) each material amendment, supplement, and modification (whether
oral or written) in respect of any of the foregoing.
(b) Except as set forth in the Disclosure Letter, to the Knowledge of
Americable, no officer, director, agent, employee, consultant, or contractor of
Americable is bound by any Contract that purports to limit the ability of such
officer, director, agent, employee, consultant, or contractor to assign to
Americable or to any other Person any rights to any invention, improvement, or
discovery.
(c) Except as set forth in the Disclosure Letter, each material Contract
identified or required to be identified in the Disclosure Letter is in full
force and effect and is valid and enforceable in accordance with its terms.
(d) Except as set forth in the Disclosure Letter:
(i) Americable is in material compliance with all applicable terms and
requirements of each Applicable Contract;
(ii) each other Person that has any Liability to Americable under any
Applicable Contract is to the Knowledge of Americable in material
compliance with the material terms and requirements of such Applicable
Contract;
(iii) no event has occurred or circumstance exists that (with or
without notice or lapse of time) may contravene, conflict with, or result
in a material violation or material breach of, or give Americable or other
Person the right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel, terminate, or
modify, any Applicable Contract; and
(iv) Americable has not given to or received from any other Person any
notice or other communication (whether oral or written) regarding any
actual, alleged, possible, or potential violation or breach of, or material
default under, any Applicable Contract.
(e) Except as described in the Disclosure Letter, there are no
renegotiations of, attempts to renegotiate, or outstanding rights to renegotiate
any material amounts paid to or payable by Americable under current or completed
Contracts with any Person and no such Person has made written demand for such
renegotiation.
(f) Except as described in the Disclosure Letter, no Person who is a
material customer of Americable (whether or not such Person is party to a
Contract with Americable) has indicated in writing that it intends to materially
reduce or cease its business with Americable.
3.17 INSURANCE
There is no material claim by Americable pending under any insurance
policies and fidelity bonds covering the assets, business, equipment,
properties, operations, employees, officers and directors of Americable as to
which coverage has been questioned, denied or disputed by the underwriters of
such policies or bonds. Except as described in the Disclosure
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Letter, all premiums due and payable under all such policies and bonds have been
paid, and Americable is otherwise in material compliance with the terms of such
policies and bonds. Americable has no Knowledge of any Threatened termination
of, or premium increase with respect to, any of such policies or bonds.
3.18 ENVIRONMENTAL MATTERS
To Americable's Knowledge, Americable has not received any actual or
Threatened order, notice, or other communication from (i) any Governmental Body,
or (ii) the current or prior owner or operator of any Facilities, with respect
to any property or Facility at which Hazardous Materials were generated,
manufactured, refined, transferred, imported, used, or processed by Americable.
3.19 EMPLOYEES
The Disclosure Letter contains a list of all employees of Americable
(full-time and part-time) as of June 9, 2003, which includes name, position, and
annual salary. Americable acknowledges that Buyer may, but shall not be
obligated to, offer employment to former employees of Americable. Americable
agrees that it shall promptly and fully discharge any and all obligations to its
employees who are terminated in connection with sale of the Assets to Buyer and
that it shall inform such employees that Buyer has no obligation or
responsibility to hire any employee, pay any obligation related to the
termination of any employee, or honor any promise or obligation of Americable to
any employee. Americable represents that it is not currently a signatory to a
collective bargaining agreement or any memoranda binding it to a collective
bargaining relationship with a labor union. Americable further represents that
if it has ever been a signatory to such an agreement or memoranda, it has
fulfilled all its obligations under such agreements and that all grievances,
notices of arbitration or pending unfair labor practices have been fully
resolved. Americable agrees that it is solely responsible for the resolution of
any grievances, arbitration or unfair labor practices or determination claims
based on facts arising prior to Closing.
3.20 INTELLECTUAL PROPERTY
The Disclosure Letter contains a list and description of all material
Intellectual Property of any kind which relates to, arises from or which is used
in the operation of the business of Americable. Americable has no Knowledge of
any asserted claim that the operation of the business or the possession or use
in the business of Americable of any such Intellectual Property infringes the
intellectual property rights of any other Person. Except as described in the
Disclosure Letter, Americable has the sole and exclusive right to use all of the
Intellectual Property listed in the Disclosure Letter. Except as described in
the Disclosure Letter, Americable has not entered into any Contracts that would
materially impair its rights in and to the Intellectual Property listed in the
Disclosure Letter and Americable has no Knowledge that any of such rights to
such Intellectual Property is, or is claimed to be, invalid. Except as provided
in the Disclosure Letter, Americable is not obligated under any material
Contract transferred to Buyer hereunder to pay royalties, fees or other payments
with respect to any of the Intellectual Property listed in the Disclosure
Letter.
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3.21 DISCLOSURE
(a) To the Knowledge of Americable, no representation or warranty of
Americable in this Agreement and no statement in the Disclosure Letter omits to
state a material fact necessary to make the statements herein or therein, in
light of the circumstances in which they were made, not misleading.
(b) To the Knowledge of Americable, there are no facts that have specific
application to Americable (other than general economic or industry conditions)
that materially adversely affect or, as far as Americable can reasonably
foresee, materially threaten, the assets, business, prospects, financial
condition, or results of operations of Americable that have not been set forth
in this Agreement or the Disclosure Letter.
3.22 BROKERS OR FINDERS
Except as described in the Disclosure Letter, neither Americable nor its
agents has incurred any obligation or liability, contingent or otherwise, for
brokerage or finders' fees or agents' commissions or other similar payment in
connection with this Agreement.
3.23 NEGOTIATION OF PURCHASE PRICE
Americable represents and warrants that it has engaged professional
assistance in seeking qualified buyers for the assets and/or stock of Americable
during a period beginning on or about April 9, 2003, and extending up to the
present. The identity of the professionals is summarized in Schedule 3.23 of
the Disclosure Letter. As a result of these efforts, Americable believes, and
hereby represents and warrants to Buyer, that the terms of this Agreement and
the Contemplated Transactions, taken as a whole, (a) have been negotiated at
arm's length and in good faith by the parties to this Agreement, (b) are
consistent with the terms of other offers received by Americable, and (c) is
within a range which industry professionals would identify as "fair market
value" and "reasonably equivalent value" for the Assets.
3.24 INDEBTEDNESS
Schedule 3.24 of the Disclosure Letter describes all Indebtedness in
existence as of the date of this Agreement. Except as set forth in the
Disclosure Letter, Americable is in full compliance with all terms, conditions
and covenants of, and has performed in all respects all of its obligations
required to be performed by it through the date of this Agreement under the
terms of all such Indebtedness. Except as described in the Disclosure Letter,
Americable is not in breach of or in default in any respect under any
Indebtedness nor has any event or circumstance occurred which, with notice or
lapse of time or both, would constitute any such breach or default.
3.25 AMERICABLE CREDITORS
Americable represents and warrants that the transfers of interest and
incurrence of obligations by it in connection with the Contemplated Transactions
will be done without any intent to hinder, delay, or defraud any Person to which
Americable has or may have in the future, any liability.
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4. REPRESENTATIONS AND WARRANTIES OF BUYER AND APA
Buyer and APA represent and warrant to Americable as follows:
4.1 ORGANIZATION AND GOOD STANDING
Each of APA and the 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, corporate and otherwise, to conduct its business as it
is now being conducted, to own or use the properties and assets that it purports
to own or use. Each of APA and the Buyer is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each state or
other jurisdiction in which either the ownership or use of the properties owned
or used by it, or the nature of the activities conducted by it, requires such
qualification.
4.2 AUTHORITY; NO CONFLICT
(a) This Agreement constitutes the legal, valid, and binding obligation of
Buyer and APA, enforceable against Buyer and APA in accordance with its terms.
Each of Buyer and APA has the requisite right, power, and authority to execute
and deliver this Agreement and to perform its respective obligations under this
Agreement.
(b) Neither the execution and delivery of this Agreement by Buyer or APA
nor the consummation or performance of any of the Contemplated Transactions by
Buyer or APA will give any Person the right to prevent, delay, or otherwise
interfere with any of the Contemplated Transactions.
(c) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated Transactions will,
directly or indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a violation of, or give
any Governmental Body or other Person the right to challenge any of the
Contemplated Transactions or to exercise any remedy or obtain any relief
under, any Legal Requirement or any Order to which the Buyer or APA, or any
of the assets owned or used by the Buyer or APA, may be subject;
(ii) contravene, conflict with, or result in a violation of any of the
terms or requirements of, or give any Governmental Body the right to
revoke, withdraw, suspend, cancel, terminate, or modify, any Governmental
Authorization that is held by the Buyer or APA or that otherwise relates to
the business of, or any of the assets owned or used by, the Buyer or APA;
(iii) contravene, conflict with, or result in a violation or breach of
any provision of, or give any Person the right to declare a default or
exercise any remedy under, or to accelerate the maturity or performance of,
or to cancel, terminate, or modify, any material contract of Buyer or APA ;
or
23
(iv) result in the imposition or creation of any Encumbrance upon or
with respect to any of the assets owned or used by the Buyer or APA.
Buyer and APA are not and will not be required to obtain any Consent from any
Person in connection with the execution and delivery of this Agreement or the
consummation or performance of any of the Contemplated Transactions.
4.3 CERTAIN PROCEEDINGS
There is no pending Proceeding that has been commenced against Buyer or APA
that challenges, or may have the effect of preventing, delaying, making illegal,
or otherwise interfering with, any of the Contemplated Transactions. To Buyer's
and APA's Knowledge, no such Proceeding has been Threatened.
4.4 BROKERS OR FINDERS
Buyer and APA have incurred no obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions or other
similar payment in connection with this Agreement, except as otherwise herein
provided.
5. CONDITIONS PRECEDENT TO OBLIGATION OF BUYER TO CLOSE
Buyer's obligation to purchase the Assets and to take the other actions required
to be taken by Buyer at the Closing is subject to the satisfaction, at or prior
to the Closing, of each of the following conditions (any of which may be waived
by Buyer, in whole or in part):
5.1 ACCURACY OF REPRESENTATIONS
All of Americable's representations and warranties in this Agreement
(considered collectively), and each of these representations and warranties
(considered individually), must be accurate in all material respects as of the
Closing Date.
5.2 PERFORMANCE BY AMERICABLE
(a) All of the covenants and obligations that Americable is required to
perform or to comply with pursuant to this Agreement at or prior to the Closing
(considered collectively), and each of these covenants and obligations
(considered individually), must have been duly performed and complied with in
all material respects.
(b) Each document required to be delivered pursuant to Section 2.7 must
have been delivered.
5.3 CONSENTS
Each of the Material Consents identified in Schedule 3.2 of the Disclosure
Letter must have been obtained and must be in full force and effect.
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5.4 ADDITIONAL DOCUMENTS
Each of the following documents must have been delivered by Americable to
Buyer: (a) such documents as Buyer may reasonably request for the purpose of
(i) evidencing the accuracy of any representations and warranties of Americable,
(ii) evidencing the performance by Americable of, or the compliance by
Americable with any covenant or obligation required to be performed or complied
with by Americable, (iii) evidencing the satisfaction of any condition referred
to in this Section 5, or (iv) otherwise facilitating the consummation or
performance of any of the Contemplated Transactions.
5.5 NO CLAIMS
There must not have been made or Threatened any claim against the Assets or
any portion of the Purchase Price.
5.6 NO PROHIBITION
Neither the consummation nor the performance of any of the Contemplated
Transactions will, directly or indirectly (with or without notice or lapse of
time), materially contravene, or conflict with, or result in a material
violation of, or cause Buyer or any Person affiliated with Buyer to suffer any
material adverse consequence under, (a) any applicable Legal Requirement or
Order, or (b) any Legal Requirement or Order that has been published,
introduced, or otherwise proposed by or before any Governmental Body.
6. CONDITIONS PRECEDENT TO OBLIGATION OF AMERICABLE TO CLOSE
Americable's obligation to sell the Assets and to take the other actions
required to be taken at the Closing is subject to the satisfaction, at or prior
to the Closing, of each of the following conditions (any of which may be waived
by Americable, in whole or in part):
6.1 ACCURACY OF REPRESENTATIONS
All of Buyer's and APA's representations and warranties in this Agreement
(considered collectively), and each of these representations and warranties
(considered individually), must be accurate in all material respects as of the
Closing Date.
6.2 BUYER'S PERFORMANCE
(a) All of the covenants and obligations that Buyer and APA are required to
perform or to comply with pursuant to this Agreement at or prior to the Closing
(considered collectively), and each of these covenants and obligations
(considered individually), must have been performed and complied with in all
material respects.
(b) Buyer must have delivered each of the documents required to be
delivered by Buyer pursuant to Section 2.7 and must have made the cash payment
required to be made by Buyer pursuant to Section 2.7(b)(i).
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6.3 CONSENTS
Each of the Material Consents identified in Schedule 3.2 of the Disclosure
Letter must have been obtained and must be in full force and effect.
6.4 ADDITIONAL DOCUMENTS
Buyer and/or APA must have caused the following documents to be delivered
to Americable:
(a) such documents as Americable may reasonably request for the purpose of
(i) evidencing the accuracy of any representation or warranty of Buyer and APA,
(ii) evidencing the performance by Buyer and APA of, or the compliance by Buyer
and APA with, any covenant or obligation required to be performed or complied
with by Buyer or APA, (iii) evidencing the satisfaction of any condition
referred to in this Section 6, or (iv) otherwise facilitating the consummation
of any of the Contemplated Transactions.
6.5 NO INJUNCTION
There must not be in effect any Legal Requirement or any injunction or
other Order that (a) prohibits the sale of the Assets to Buyer, and (b) has been
adopted or issued, or has otherwise become effective, on or prior to the Closing
Date.
7. INDEMNIFICATION; REMEDIES
7.1 SURVIVAL; EFFECT OF KNOWLEDGE ON RIGHT TO INDEMNIFICATION
All representations, warranties, covenants, and obligations in this
Agreement, the Disclosure Letter, the supplements to the Disclosure Letter, the
certificate delivered pursuant to Section 2.7(a)(i), and any other certificate
or document delivered pursuant to this Agreement will survive the Closing until
the Indemnity Release Date, except for the provisions of Sections 7.1, 7.2, 7.3,
7.4, 8.1, 8.3, 8.4, 8.5, 8.6 (for a period of three months), 8.7, 8.8, 8.9,
8.10, 8.11, 8.13, 9.1, 9.2 (for a period of three months), 9.3 (for a period
ending on July 31, 2003), 9.4 and 9.5 (for a period of six months) hereof, which
shall survive the Agreement for the terms set forth herein or in each such
Section, as the case may be. The right to indemnification, payment of Damages or
other remedy based on such representations, warranties, covenants, and
obligations, all of which rights are described in and only in Section 7.2
hereof, will survive the Closing until the Indemnity Release Date (except as
otherwise provided in Section 7.2 hereof) and will not be affected by any
investigation conducted with respect to the accuracy or inaccuracy of or
compliance with, any such representation, warranty, covenant, or obligation,
except to the extent that such investigation results in the Knowledge of APA,
the Buyer, or any officer or director of the foregoing prior to the Closing
Date. Except as set forth in Section 3.2(c) hereof, the waiver of any condition
based on the accuracy of any representation or warranty, or on the performance
of or compliance with any covenant or obligation, will not affect any right
otherwise available and applicable under this Agreement to indemnification,
payment of Damages, or other available and applicable remedy based on such
representations, warranties, covenants, and obligations.
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7.2 INDEMNIFICATION BY AMERICABLE
(a) Subject to the limitations contained in this Article 7, Americable will
indemnify and hold harmless Buyer and its directors, officers, agents and
shareholders (collectively, the "Indemnified Parties") for the amount of any
claim against such Indemnified Party by any Qualified Claimant (in such party's
capacity as a Qualified Claimant) for any loss, liability, deficiency, damage,
expense, cost (including reasonable legal expenses) or diminution of value
(collectively, "Qualified Damages"), which any such Indemnified Party may
suffer, sustain or become subject to as a result of or in connection with such
Qualified Claimant's claim after the Closing Date as a Qualified Claimant;
provided, however, that the aggregate amount payable to the Indemnified Parties
under Section 7.1(a) and 7.1(b) of this Agreement shall not exceed the amount of
the Indemnity Fund; further provided, that Americable shall be liable to the
Indemnified Parties for Qualified Damages payable to Qualified Claimants only if
Buyer or another Indemnified Party delivers to Americable written notice,
setting forth in reasonable detail the identity, nature and amount of Qualified
Damages and other claims of the Qualified Claimant related to such claim (or
claims, as applicable) as a Qualified Claimant prior to the Indemnity Release
Date.
(b) Subject to the limitations contained in this Article 7, Americable will
indemnify and hold harmless the Indemnified Parties for the amount of any claim
against such Indemnified Party by any Person (other than a Person who is a
Related Party of the Buyer or a Qualified Claimant asserting such claim in such
party's capacity as a Qualified Claimant) (such person, a "General Indemnity
Claimant") for any loss, liability, deficiency, damage, expense, cost (including
reasonable legal expenses) or diminution of value (collectively, "General
Damages"), which any such Indemnified Party may suffer, sustain or become
subject to as a result of or in connection with such General Indemnity
Claimant's claim after the Closing Date as a General Indemnity Claimant, which
General Damages have arisen from any breach of any express representation,
express warranty, express agreement, express covenant or express undertaking of
Americable contained in this Agreement ; provided, however, that the aggregate
amount payable to the Indemnified Parties under Section 7.1(a) and 7.1(b) shall
not exceed the amount of the Indemnity Fund; further provided, that Americable
shall be liable to the Indemnified Parties for General Damages payable to
General Indemnity Claimants (i) only if Buyer or another Indemnified Party
delivers to Americable written notice, setting forth in reasonable detail the
identity, nature and amount of General Damages and other claims of the General
Indemnity Claimant related to such claim (or claims, as applicable) as a General
Indemnity Claimant prior to the Indemnity Release Date, and (ii) only if the
aggregate amount of all General Damages exceeds $50,000 (the "Basket Amount"),
in which case Americable shall be obligated to indemnify the Indemnified Parties
only for the excess of the aggregate amount of all such General Damages over the
Basket Amount.
7.3 METHOD OF ASSERTING INDEMNIFICATION CLAIMS
IN THE EVENT THAT ANY OF THE INDEMNIFIED PARTIES ENTITLED TO
INDEMNIFICATION HEREUNDER IS MADE A DEFENDANT IN OR PARTY TO ANY
ACTION OR PROCEEDING, JUDICIAL OR ADMINISTRATIVE, INSTITUTED BY ANY
THIRD PARTY FOR ANY
27
CLAIM FOR WHICH SUCH INDEMNIFIED PARTY IS ENTITLED TO PROTECTION UNDER
SECTION 7.2 HEREOF (A "CLAIM"), THE INDEMNIFIED PARTY SHALL GIVE
AMERICABLE PROMPT NOTICE THEREOF IN ACCORDANCE WITH THE TERMS OF
SECTION 7.2 HEREOF. THE FAILURE TO GIVE SUCH NOTICE SHALL NOT AFFECT
ANY INDEMNIFIED PARTY'S ABILITY TO SEEK REIMBURSEMENT IN ACCORDANCE
WITH THE TERMS OF SECTION 7.2 HEREOF UNLESS SUCH FAILURE HAS
MATERIALLY AND ADVERSELY AFFECTED AMERICABLE'S ABILITY TO DEFEND
SUCCESSFULLY A CLAIM. AMERICABLE SHALL BE ENTITLED TO CONTEST AND
DEFEND SUCH CLAIM; PROVIDED, THAT AMERICABLE (I) HAS A REASONABLE
BASIS FOR CONCLUDING THAT SUCH DEFENSE MAY BE SUCCESSFUL AND (II)
DILIGENTLY CONTESTS AND DEFENDS SUCH CLAIM. NOTICE OF THE INTENTION SO
TO CONTEST AND DEFEND SHALL BE GIVEN BY AMERICABLE TO THE INDEMNIFIED
PARTY WITHIN 20 BUSINESS DAYS AFTER THE INDEMNIFIED PARTY'S NOTICE OF
SUCH CLAIM (BUT, IN ALL EVENTS, AT LEAST FIVE BUSINESS DAYS PRIOR TO
THE DATE THAT AN ANSWER TO SUCH CLAIM IS DUE TO BE FILED). SUCH
CONTEST AND DEFENSE SHALL BE CONDUCTED BY REPUTABLE ATTORNEYS EMPLOYED
BY AMERICABLE. THE INDEMNIFIED PARTY SHALL BE ENTITLED AT ANY TIME, AT
ITS OWN COST AND EXPENSE (WHICH EXPENSE SHALL NOT CONSTITUTE QUALIFIED
DAMAGES OR GENERAL DAMAGES, AS THE CASE MAY BE, UNLESS THE INDEMNIFIED
PARTY REASONABLY DETERMINES THAT AMERICABLE IS NOT ADEQUATELY
REPRESENTING OR, BECAUSE OF A CONFLICT OF INTEREST, MAY NOT ADEQUATELY
REPRESENT, ANY INTERESTS OF THE INDEMNIFIED PARTIES, AND ONLY TO THE
EXTENT THAT SUCH EXPENSES ARE REASONABLE), TO PARTICIPATE IN SUCH
CONTEST AND DEFENSE AND TO BE REPRESENTED BY ATTORNEYS OF ITS OR THEIR
OWN CHOOSING. IF THE INDEMNIFIED PARTY ELECTS TO PARTICIPATE IN SUCH
DEFENSE, THE INDEMNIFIED PARTY WILL COOPERATE WITH AMERICABLE IN THE
CONDUCT OF SUCH DEFENSE. NEITHER THE INDEMNIFIED PARTY NOR AMERICABLE
MAY CONCEDE, SETTLE OR COMPROMISE ANY CLAIM WITHOUT THE CONSENT OF THE
OTHER PARTY, WHICH CONSENTS WILL NOT BE UNREASONABLY WITHHELD.
NOTWITHSTANDING THE FOREGOING, (I) IF A PARTY PURSUING A CLAIM SEEKS
EQUITABLE RELIEF OR (II) IF THE SUBJECT MATTER OF A CLAIM RELATES TO
THE ONGOING BUSINESS OF ANY OF THE INDEMNIFIED PARTIES, WHICH CLAIM,
IF DECIDED AGAINST ANY OF THE INDEMNIFIED PARTIES, WOULD MATERIALLY
ADVERSELY AFFECT THE ONGOING BUSINESS OR REPUTATION OF ANY OF THE
INDEMNIFIED PARTIES, THEN, IN EACH SUCH CASE, THE INDEMNIFIED PARTIES
ALONE SHALL BE ENTITLED TO CONTEST, DEFEND AND SETTLE SUCH CLAIM IN
THE FIRST INSTANCE AND, IF THE INDEMNIFIED PARTIES DO NOT CONTEST,
DEFEND OR SETTLE SUCH CLAIM, AMERICABLE SHALL THEN HAVE THE RIGHT TO
CONTEST AND DEFEND (BUT NOT SETTLE) SUCH CLAIM.
7.4 SOLE AND EXCLUSIVE REMEDY
The sole and exclusive remedies of Buyer, APA or any other Indemnified
Party under this Agreement for indemnification or recovery of damages of any
nature under this Agreement and in connection with the Contemplated Transactions
shall be recourse by Buyer, APA or another Indemnified Party, as applicable, to
the Indemnity Fund held under the Escrow Agreement for Qualified Damages or
General Damages, as the case may be. Any indemnification payable under this
Article 7 shall be, to the extent permitted by law, an adjustment to purchase
price.
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8. GENERAL PROVISIONS
8.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each party to
this Agreement will bear its respective expenses incurred in connection with the
preparation, execution, and performance of this Agreement and the Contemplated
Transactions, including all fees and expenses of agents, representatives,
counsel, and accountants. In the event of termination of this Agreement, the
obligation of each party to pay its own expenses will be subject to any rights
of such party arising from a Breach of this Agreement by another party.
8.2 PUBLIC ANNOUNCEMENTS
Any public announcement or similar publicity with respect to this Agreement
or the Contemplated Transactions will be issued, if at all, at such time, in
such manner and with such information content as Buyer and Seller jointly
determine; provided, however, that Buyer may make any announcement it reasonably
deems necessary to comply with Legal Requirements without prior consultation
with Americable.
8.3 CONFIDENTIALITY
Between the date of this Agreement and the Closing Date, Buyer, APA and
Americable will maintain in confidence, and will cause the directors, officers,
affiliates, employees, agents, and advisors of Buyer and Americable to maintain
in confidence, and not use to the detriment of the other parties hereto any
written, oral, or other information obtained in confidence from the other
parties hereto in connection with this Agreement or the Contemplated
Transactions, unless (a) such information is already known to the disclosing
party or to others not bound by a duty of confidentiality or such information
becomes publicly available through no fault of such party, (b) the use of such
information is necessary or appropriate in making any filing or obtaining any
consent or approval required for the consummation of the Contemplated
Transactions, or (c) the furnishing or use of such information is required by or
necessary or appropriate in connection with Proceedings.
8.4 NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
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Americable:
Americable, Inc.
00000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Attn: CEO
With a copy to:
Xxxx X. Xxxxxx
Xxxxxx & Xxxxxxx LLP
00 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, XX 00000
Buyer:
APA Cables and Networks, Inc.
c/o APA Optics, Inc.
0000 X.X. 00xx Xxxx
Xxxxxx, XX 00000
Attn: President/CEO
With a copy to:
Xxxxx X. Xxxxxxxxx
Xxxx & Xxxxxxx, P.A.
4800 Xxxxx Fargo Center
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Any notice purported to be given by Americable, APA, or Buyer, must be
signed by the chief executive officer of such entity.
8.5 JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of, or based on
any right arising out of, this Agreement shall be brought against any of the
parties in the courts of the State of Minnesota, County of Hennepin, and each of
the parties consents to the jurisdiction of such court (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world.
30
8.6 FURTHER ASSURANCES
The parties agree (a) to furnish upon request to each other such further
information, (b) to execute and deliver to each other such other documents, and
(c) to do such other acts and things, all as the other party may reasonably
request for the purpose of carrying out the intent of this Agreement and the
documents referred to in this Agreement.
8.7 WAIVER
The rights and remedies of the parties to this Agreement are cumulative and
not alternative. Neither the failure nor any delay by any party in exercising
any right, power, or privilege under this Agreement or the documents referred to
in this Agreement will operate as a waiver of such right, power, or privilege,
and no single or partial exercise of any such right, power, or privilege will
preclude any other or further exercise of such right, power, or privilege or the
exercise of any other right, power, or privilege. To the maximum extent
permitted by applicable law, (a) no claim or right arising out of this Agreement
or the documents referred to in this Agreement can be discharged by one party,
in whole or in part, by a waiver or renunciation of the claim or right unless in
writing signed by the other party; (b) no waiver that may be given by a party
will be applicable except in the specific instance for which it is given; and
(c) no notice to or demand on one party will be deemed to be a waiver of any
obligation of such party or of the right of the party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement or the documents referred to in this Agreement.
8.8 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements between the parties with
respect to its subject matter and constitutes (along with the documents referred
to in this Agreement) a complete and exclusive statement of the terms of the
agreement between the parties with respect to its subject matter. This Agreement
may not be amended except by a written agreement executed by the party to be
charged with the amendment.
8.9 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS
No party may assign any of its rights under this Agreement without the
prior consent of the other parties, except that Buyer may assign any of its
rights under this Agreement to any Subsidiary of Buyer or APA, provided that APA
shall remain obligated to perform its obligations under this Agreement and that
such Subsidiary shall remain obligated to perform the obligations of Buyer under
this Agreement. Subject to the preceding sentence, this Agreement will apply
to, be binding in all respects upon, and inure to the benefit of the successors
and permitted assigns of the parties. Nothing expressed or referred to in this
Agreement will be construed to give any Person other than the parties to this
Agreement any legal or equitable right, remedy, or claim under or with respect
to this Agreement or any provision of this Agreement. This Agreement and all of
its provisions and conditions are for the sole and exclusive benefit of the
parties to this Agreement and their successors and assigns.
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8.10 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by any
court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
8.11 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Agreement. All words used in this Agreement will be construed to be of such
gender or number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words or terms.
8.12 TIME OF ESSENCE
With regard to all dates and time periods set forth or referred to in this
Agreement, time is of the essence.
8.13 GOVERNING LAW
This Agreement will be governed by the laws of the State of Minnesota
without regard to conflicts of laws principles.
8.14 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original copy of this Agreement and all of which, when
taken together, will be deemed to constitute one and the same agreement.
8.15 COMPLETE AGREEMENT
This Agreement, the Exhibits and Schedules hereto, the Disclosure Letter
and the other documents referred to herein contain the complete agreement
between the parties and supersede any prior understandings, agreements or
representations by or between the parties, written or oral, which may have
related to the subject matter hereof in any way.
9. COVENANTS REGARDING PERFORMANCE FOLLOWING THE DATE OF CLOSING
The following covenants and agreements are to be performed after the
Closing by the parties and shall continue in effect for the periods respectively
indicated or, where no indication is made, until performed:
32
9.1 COLLECTION OF RECEIVABLES
After the Closing, Buyer shall be empowered to collect all Accounts
Receivable and other items transferred to Buyer hereunder and to endorse with
the name of Americable any checks or other instrument received on account of any
such Accounts Receivable or other items duly transferred to Buyer at Closing.
Americable agrees to promptly transfer to Buyer any cash, checks or other
property that Americable may receive in respect of the Accounts Receivable or
other items duly transferred to Buyer at Closing. At the written request of
Buyer, Americable will cooperate, and will use its Best Efforts to have the
officers, directors, and other employees of Americable cooperate, with Buyer on
and after the Closing Date in endeavoring to effect the collection of all
Accounts Receivable and with respect to other actions, proceedings, arrangements
or disputes involving Americable or Buyer based upon Contracts, arrangements or
acts of Americable which were in effect or occurred on or prior to the Closing
Date.
9.2 FURTHER ACTS AND ASSURANCES
Americable agrees that, at any time and from time to time, on and during a
period ending on the three-month anniversary of the Closing Date, upon the
reasonable request of Buyer, it will do or cause to be done all such further
acts and things and execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered to Buyer, any and all papers, documents, instruments,
agreements, deeds, assignments, transfers, assurances and conveyances as may be
necessary or desirable to vest, perfect and confirm of record in Buyer, its
successors and assigns, the title to any of the Assets or otherwise to carry out
and give effect to the provisions and intent of this Agreement. In addition,
from and after the Closing Date, Americable will afford to Buyer and its
attorneys, accountants and other representatives access, during normal business
hours, to such personnel, books and records relating to the Assets as may
reasonably be required in connection with the preparation of financial
information or the filing of Tax Returns and will cooperate in all reasonable
respects with Buyer in connection with claims and litigation asserted by or
against third parties, relating to the transactions contemplated hereby.
9.3 USE OF FACILITIES
For the period beginning on the Closing Date and ending on July 31, 2003
(the "Transition Period"), Americable will make its Bloomington, Minnesota
facilities available to Buyer. Buyer will be responsible for all obligations of
any kind to any party related to occupancy or use until the later of (i) the end
of the Transition Period, (ii) the date on which Buyer vacates such premises,
and (iii) the date on which all raw materials, equipment and assets of Buyer,
whether or not transferred to Buyer hereunder, shall have been removed from such
premises (any such obligation, an "Occupancy Obligation"), including but not
limited to all out-of-pocket costs it incurs by reason of such occupancy during
the Transition Period, raw materials and maintenance of equipment. At the end
of the Transition Period, Buyer will pay all costs of removal of its equipment
and its other assets from the Bloomington facility, including all costs of
repair of any damage caused by such removal.
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9.4 JOINDER AGREEMENT
APA joins in and agrees to perform and/or cause Buyer to perform all
obligations of Buyer under this Agreement. APA and Buyer are jointly and
severally liable for all obligations of APA and Buyer hereunder.
9.5 DEBTS OF AMERICABLE
Americable covenants and agrees that 100% of the Purchase Price, net of
related fees and expenses of Americable, that are paid at Closing shall be used
to pay all creditors of Americable, pro rata as their interests may appear (or
as otherwise directed by a court of competent jurisdiction), and that its shall
use its Best Efforts to effect distribution of such Purchase Price and
settlement of such debts within six months after the Closing Date. Americable
further agrees that it shall make no payment to any creditor unless such
creditor agrees in writing that such payment is in full settlement of its debt,
unless otherwise ordered by a court of competent jurisdiction.
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first written above.
AMERICABLE, INC. APA CABLES AND NETWORKS, INC.
By By
------------------------------ --------------------------------
Its Its
------------------------------ --------------------------------
------------------------------ --------------------------------
Print Name and Title Print Name and Title
APA OPTICS, INC.
By
------------------------------------
Its
------------------------------------
------------------------------------
Print Name and Title
35
