EXHIBIT 10.20
FINAL EXECUTION COPY
CONFIDENTIAL
ASSET PURCHASE AGREEMENT
BETWEEN
ATRIUM COMPANIES, INC.,
AS BUYER,
AND
DANVID WINDOW COMPANY,
AS SELLER
DATED AS OF
FEBRUARY 14, 2003
TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS........................................................................7
1.1 Definitions.......................................................................7
ARTICLE 2 SALE AND PURCHASE OF THE ASSETS....................................................8
2.1 Transferred Assets................................................................8
2.2 Excluded Assets...................................................................9
2.3 Assumption of Liabilities........................................................10
2.4 Excluded Liabilities.............................................................11
ARTICLE 3 THE CLOSING; PURCHASE PRICE.......................................................12
3.1 Place and Date...................................................................12
3.2 Purchase Price...................................................................13
3.3 Deposit..........................................................................13
3.4 Allocation of Purchase Price.....................................................13
3.5 Deliveries.......................................................................13
3.6 [Intentionally Omitted.].........................................................13
3.7 Consents of Third Parties........................................................14
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER..........................................14
4.1 Organization, Standing, Etc. of Seller...........................................14
4.2 Corporate Authorization..........................................................14
4.3 Enforceability...................................................................15
4.4 Governmental Authorizations and Consents.........................................15
4.5 Financial Statements.............................................................15
4.6 Absence of Certain Changes or Events.............................................15
4.7 Title to Transferred Assets......................................................16
4.8 Transferred Intellectual Property................................................16
4.9 Assumed Contracts................................................................16
4.10 Licenses and Permits.............................................................17
4.11 Environmental Compliance.........................................................17
4.12 Benefit Plans....................................................................17
4.13 Brokers..........................................................................18
4.14 Taxes............................................................................18
4.15 Compliance with Law..............................................................19
4.16 Product Warranties...............................................................19
4.17 Employment Matters...............................................................19
4.18 Transferred Assets...............................................................19
4.21 Non-Competition Agreements.......................................................19
4.22 Legal Proceedings................................................................20
4.23 Insurance........................................................................20
4.24 Affiliated Transactions..........................................................20
4.25 Customers, Suppliers and Distributors............................................20
4.26 Relationship with General Electric Company.......................................21
4.27 No Other Representations and Warranties..........................................21
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ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER...........................................21
5.1 Organization and Standing of Buyer...............................................21
5.2 Authorization....................................................................21
5.3 Enforceability...................................................................21
5.4 Compliance with Other Instruments and Laws.......................................22
5.5 Governmental Authorizations and Consents.........................................22
5.6 Access...........................................................................22
5.7 Brokers..........................................................................22
ARTICLE 6 COVENANTS RELATING TO PERSONNEL ARRANGEMENTS......................................22
6.1 Transferee Employees.............................................................22
6.2 COBRA Obligations................................................................22
6.3 Plans, Benefits and Policies.....................................................23
ARTICLE 7 COVENANTS OF SELLER...............................................................24
7.1 Conduct of Business..............................................................24
7.2 Access...........................................................................25
ARTICLE 8...................................................................................26
COVENANTS OF BUYER..........................................................................26
8.1 Investigation....................................................................26
8.2 Assistance with Respect to Excluded Assets.......................................26
ARTICLE 9 COVENANTS OF BOTH PARTIES.........................................................26
9.1 Commercially Reasonable Efforts..................................................26
9.2 Governmental Filings.............................................................26
9.3 Public Announcements.............................................................26
9.4 Use of Business Names by Buyer...................................................27
9.5 Consents; Cooperation............................................................27
9.6 Communications with Customers and Suppliers......................................28
9.7 Liability for Transfer Taxes.....................................................28
9.8 Books and Records................................................................28
9.9 Tax Matters......................................................................29
9.10 Confidentiality..................................................................29
9.11 Transition Period Assistance.....................................................30
ARTICLE 10 BUYER PROTECTIONS: OVERBIDDING PROCEDURES AND BREAK-UP FEES.....................30
10.1 Bankruptcy Court Approvals.......................................................30
10.2 Bidding Procedures...............................................................31
ARTICLE 11 CONDITIONS TO OBLIGATIONS OF BUYER TO CLOSE......................................34
11.1 Accuracy of Representations and Warranties.......................................34
11.2 Performance......................................................................34
11.3 No Conflict......................................................................34
11.4 Certificate......................................................................34
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11.5 Bankruptcy Court Approval........................................................35
11.6 Consents.........................................................................35
11.7 Transfer Documents...............................................................35
11.8 Transaction Documents............................................................35
11.9 Further Instruments..............................................................35
ARTICLE 12 CONDITIONS TO OBLIGATIONS OF SELLER TO CLOSE.....................................35
12.1 Accuracy of Representations and Warranties.......................................36
12.2 Performance......................................................................36
12.3 No Conflict......................................................................36
12.4 Certificate......................................................................36
12.5 Bankruptcy Court Approval........................................................36
12.6 Consents.........................................................................36
12.7 Assumption Agreement.............................................................37
12.8 Transaction Documents............................................................37
12.9 Further Instruments..............................................................37
12.10 Payment......................................................................37
ARTICLE 13 TERMINATION......................................................................37
13.1 Right to Terminate Agreement.....................................................37
13.2 Return of Deposit After Termination..............................................38
ARTICLE 14 MISCELLANEOUS....................................................................38
14.1 Expiration of Representations, Warranties and Covenants..........................38
14.2 No Implied Representations or Warranties.........................................38
ARTICLE 15 AGREEMENT CONVENTIONS............................................................38
15.1 Further Assurances...............................................................38
15.2 Notices..........................................................................39
15.3 Assignment.......................................................................40
15.4 Entire Agreement; Amendment; Governing Law; Etc..................................41
15.5 Consent to Jurisdiction..........................................................41
15.6 Severability.....................................................................41
15.7 Reliance on Counsel and Other Advisors...........................................41
15.8 Exhibits and Schedules...........................................................42
15.9 Rules of Construction............................................................42
15.10 Counterparts.................................................................42
Exhibit A...................................................................................44
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SCHEDULES
Schedule Subject Matter
-------- --------------
2.1(c) Owned and Leased Real Property
2.1(d) Transferred Intellectual Property
2.2(g) Excluded Litigation Rights
2.3(c) Assumed Liabilities
2.4(i) Other Excluded Liabilities
4.6 Exceptions to Ordinary Course
4.7 Title to Transferred Assets
4.9 Assumed Contracts
4.10 Licenses, Permits and Exceptions
4.11 Environmental Compliance Exceptions
4.12 Benefit Plans
4.14(c) Tax Waivers, Liens and Suits
4.14(d) Tax Return Jurisdictions
4.14(e) Disputed Taxes
4.16 Product Warranties
4.20 Employment Agreements
4.21 Non-Compete Agreements
4.22 Legal Proceedings
4.23 Insurance
4.24 Affiliated Transactions
4.25 Customers, Suppliers and Distributors
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4.26 Relationship with GE Company
5.5 Government Authorizations and Consents Required By Buyer
7.1 Conduct of Business
11.6 Consents as Conditions to Obligations
v
EXHIBITS
A. Definitions
B. Intentionally Omitted
C. Bidding Procedures Motion and Form of Bidding Procedures Order
D. Sale Motion and Form of Sale Order
vi
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into as of
February ___, 2003, by and between ATRIUM COMPANIES, INC., a Delaware
corporation ("Buyer"), on the one hand, and DANVID WINDOW COMPANY, a Delaware
corporation ("Danvid" or "Seller"), on the other hand.
RECITALS
WHEREAS, Seller, among others, filed a bankruptcy petition under Chapter
11 of the United States Bankruptcy Code ("Bankruptcy Code") on December 18, 2000
(the "Filing Date") in the United States Bankruptcy Court for the Northern
District of Ohio ("Bankruptcy Court") which case is being jointly administered
as Case No. 00-43726 ("Bankruptcy Case");
WHEREAS, Danvid is a wholly owned subsidiary of American Architectural
Products Corporation ("AAPC");
WHEREAS, Danvid is engaged in the business of the manufacture, sale and
installation of aluminum and vinyl windows, doors and related products for
residential, institutional and commercial markets;
WHEREAS, Danvid is known as the "Business";
WHEREAS, Buyer wishes to purchase and acquire from Seller, and Seller
wishes to sell, assign and transfer to Buyer, the Transferred Assets (as defined
in Exhibit A), and Seller wishes to assume and assign to Buyer and Buyer has
agreed to assume the Assumed Liabilities (as defined in Exhibit A), with the
approval of the Bankruptcy Court pursuant to sections 363 and 365 of the
Bankruptcy Code, all for the Purchase Price (as defined in Exhibit A), and upon
the terms and subject to the conditions, herein set forth; and
WHEREAS, the transactions contemplated by this Agreement involve a sale,
other than in the ordinary course of business, of certain of Seller's assets and
properties out of Seller's bankruptcy estate pursuant to Bankruptcy Code
Sections 363 and 365.
NOW, THEREFORE, in consideration of the premises and of the
representations, warranties and covenants hereinafter set forth, and intending
to be legally bound hereby, the parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. The definitions set forth in Exhibit A are
incorporated herein by reference.
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ARTICLE 2
SALE AND PURCHASE OF THE ASSETS
2.1 TRANSFERRED ASSETS. Subject to and upon the terms and conditions
set forth in this Agreement, at the Closing, Seller shall sell, assign,
transfer, convey and deliver to Buyer, free and clear of all Liens, except as
set forth in this Agreement, and Buyer shall purchase and acquire from Seller,
all right, title and interest of Seller in and to the properties, assets,
contracts and rights of Seller used in the Business, other than the Excluded
Assets (collectively, the "Transferred Assets"). The Transferred Assets include,
without limitation, the following:
(a) all of the Fixed Assets;
(b) all of the Accounts Receivable, other than Intercompany
Receivables;
(c) all rights and ownership interest of Seller in the owned
and leased real property listed on Schedule 2.1(c);
(d) all rights in respect of the Transferred Intellectual
Property, including without limitation such intellectual property identified in
Schedule 2.1(d);
(e) to the extent transferable, all of Seller's rights under
the Assumed Contracts;
(f) all inventories of goods (raw materials, spare parts,
work in progress and finished goods), office and other supplies located at the
Transferred Facilities or used in the Business;
(g) all of the prepaid expenses and security deposits that
relate to any of the Assumed Contracts or Transferred Assets;
(h) all customer lists, files and Books and Records of the
Business;
(i) to the extent transferable under Applicable Law, all
Consents and Permits related to the Transferred Facilities, the Transferred
Assets or the Business;
(j) to the extent transferable, all rights under express or
implied warranties from or rights against Seller's suppliers, vendors and other
third parties with respect to the Transferred Assets or the Assumed Contracts;
(k) all rights to causes of action, lawsuits, claims and
demands of any nature available to Seller that relate to the Transferred Assets,
the Assumed Liabilities or to the Business, other than (i) avoidance actions
under the Bankruptcy Code and (ii) causes of action, lawsuits, claims and
demands identified in Schedule 2.2(g);
(l) to the extent transferable, all guarantees, warranties,
indemnities, bonds, letters of credit and similar arrangements that run in favor
of Seller in connection with the Transferred Assets;
(m) the retentions and advances that relate to the Assumed
Contracts;
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(n) additional assets of the Business acquired in the
ordinary course of business between the date hereof and the Closing Date;
(o) business names of the Business;
(p) telephone and facsimile numbers of the Business;
(q) e-mail addresses and web sites of the Business;
(r) to the extent transferable, software used in the
Business;
(s) all of Seller's rights and interests under all
outstanding purchase orders entered into by Seller for the purchase of goods or
services used in the Business;
(t) all rights of action against the Policies maintained by
Seller but only to the extent that Buyer may have a claim regarding coverage for
any Transferred Asset or Assumed Liability against such Policies and at no cost
to Seller; and
(u) to the extent transferable and used in the Business, all
other or additional privileges, rights, interests, properties and assets of
Seller of every kind and description and wherever located, that are used or
intended for use in connection with, or that are necessary to the continued
conduct of, the Business as presently being conducted.
2.2 EXCLUDED ASSETS. Notwithstanding anything contained in Section
2.1 hereof to the contrary, the Transferred Assets do not include, and Buyer
shall not purchase or acquire any right, title or interest of Seller in or to
any of the following (herein referred to collectively as the "Excluded Assets"):
(a) except to the extent expressly set forth in the
Transaction Documents, the names and marks "American Architectural Products
Corporation" and "AAPC" and any name or xxxx derived from or including the
foregoing, including all corporate symbols or logos incorporating "American
Architectural Products Corporation" or "AAPC" (the "Excluded Intellectual
Property");
(b) any rights of Seller in intellectual property,
intangible property rights, license agreements and software licenses not within
the definition of Transferred Intellectual Property;
(c) all collateral posted by Seller or its Affiliates
associated with any bonds, letters of credit and similar arrangements provided
by Seller that run in favor of third parties;
(d) Intercompany Receivables and payables arising between or
among the Business and the balance of AAPC's business from the conduct of the
Business prior to the Closing Date (including without limitation any prepaid
assets associated with AAPC's property, general liability and automobile
insurance policies);
(e) all books and records relating to or used in the
business of Seller and not specific to the Business, Seller's corporate
franchise and stock record books, corporate seal, corporate record books
containing minutes of meetings of directors and stockholders, tax returns and
records;
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(f) except as stated in Section 2.1(t), all Policies
maintained by Seller, and all rights of action, lawsuits, claims and demands,
rights of recovery and set-off, and proceeds, under or with respect to such
Policies;
(g) all rights to causes of action, lawsuits, claims and
demands listed on Schedule 2.2(g) and any rights accruing under this Agreement;
(h) all right, title and interest of Seller in and to and
any claims for any refund, credit, rebate or abatement with respect to Taxes of
the Business for any period or portion thereof prior to the Closing Date, but
only to the extent such corresponding tax liability is not assumed by Buyer;
(i) all assets relating to Benefit Plans;
(j) all prepaid expenses and security deposits other than
those transferred pursuant to Section 2.1(g);
(k) all claims against third parties for Losses suffered in
connection with Excluded Assets and Excluded Liabilities;
(l) all cash and cash equivalents and similar type
investments specific to the Business, such as certificates of deposit, treasury
bills and other marketable securities;
(m) the services available to Seller that are not related to
the Business as conducted prior to the Closing Date;
(n) except as stated in Section 2.1(i), permits related to
the conduct of the Business;
(o) all contracts and leases rejected pursuant to Section
365 of the Bankruptcy Code by Seller prior to the Closing Date;
(p) any properties, assets, contracts and rights of Seller
not constituting a part of the Transferred Assets;
(q) the assets and properties used in the Business which
have been disposed of since the date of this Agreement, provided such
disposition has been made in accordance with the terms hereof and in the
ordinary course of business consistent with past practice;
(r) any shares of capital stock or debenture of Seller; and
(s) any projections, descriptive brochures or other sales
related documentation prepared in connection with the sale of the Transferred
Assets.
For the avoidance of doubt, and in those instances where certain categories of
Transferred Assets are expressly described as those being related or specific
either to the Business or to any other assets otherwise transferred hereby, or
as otherwise specified, it is the intention of the parties that Buyer is buying
and shall have the benefit of all assets currently used and necessary to operate
the Business.
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2.3 ASSUMPTION OF LIABILITIES. Subject to the terms and conditions
set forth herein, at the Closing, Buyer shall assume and agree to pay, honor,
perform and discharge when due all of the Liabilities and obligations relating
to the Transferred Assets and the Business (other than the Excluded
Liabilities), including, without limitation, the following:
(a) Liabilities and obligations of Seller under or relating
to the Transferred Assets, Assumed Contracts and the Transferred Facilities that
are due to be performed from and after the Closing Date (without giving effect
to any amendment, waiver or extension entered into after execution of this
Agreement with respect to the respective due date for such performance), except
warranty obligations which are specifically assumed in accordance with Section
2.3(d);
(b) all Liabilities and obligations arising out of the
conduct of the Business on or after the Closing Date;
(c) all Liabilities identified on Schedule 2.3(c) and
reflected on the Financial Statements, but only to the extent such Liabilities
are incurred on or after the Filing Date and are not due and payable prior to
the Closing Date after giving effect to Section 7.1(a) (without giving effect to
any amendment, waiver or extension entered into after execution of this
Agreement with respect to the respective due date for such payment); and
(d) all Liabilities with respect to warranty claims relating
to the Business arising solely out of the express terms of Seller's warranty
Contracts with its customers that are in the form of (and solely in the form of)
the express warranties identified on Schedule 4.16 hereto and that relate solely
to products sold by Seller with respect to the Business on or after the Filing
Date, but excluding Liabilities for personal injury or damage to property other
than damage to windows and doors manufactured by Seller and sold to such
customers.
The Liabilities and obligations described in clauses (a) through (d) are
collectively referred to as the "Assumed Liabilities."
2.4 EXCLUDED LIABILITIES. Except as specifically set forth in
Section 2.3 and elsewhere in the Transaction Documents, Buyer shall not assume
or in any way be responsible for, and Seller shall remain responsible for, the
following debts, claims, commitments, liabilities and obligations of Seller and
the Business (the "Excluded Liabilities"):
(a) all Tax liabilities, including penalties and interest,
in respect of periods prior to the Closing Date;
(b) all indebtedness for borrowed money relating to the
conduct of the Business for all periods prior to the Closing Date;
(c) Liabilities arising out of or relating to the Excluded
Assets;
(d) any Environmental Liabilities relating to or arising out
of (1) the acts or omissions of Seller, (2) the acts or omissions of any person
prior to the Closing Date related to Seller, the Business or the Transferred
Assets, or (3) the use, handling, storage, treatment or disposal of any
Hazardous Materials related to Seller, the Business or the Transferred Assets
prior to the Closing Date;
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(e) Inter-company receivables and payables arising between
or among the Business and the balance of AAPC's business from the conduct of the
Business prior to the Closing Date;
(f) Liabilities and obligations under any Benefit Plans;
(g) all trade payables and obligations incurred prior to the
Filing Date;
(h) all amounts owing to employees of Seller under the Key
Employee Retention Program, as approved and described by the Bankruptcy Court
Order in Orders dated June 11, 2001 and June 12, 2002 ;
(i) the Liabilities, if any, listed on Schedule 2.4(i);
(j) any Liabilities relating to pending or threatened
litigation, warranty claims (other than those included in the Assumed
Liabilities), or bankruptcy and any Liability of Seller for costs and expenses
incurred in connection with the Contemplated Transactions, including, without
limitation, any broker's or finder's commission, fee or similar compensation;
(k) any actual or alleged violation by Seller or any of its
Affiliates of any Applicable Law;
(l) any infringement or alleged infringement of the rights
of any Person arising out of the use of any of the Transferred Intellectual
Property in connection with the Business prior to the Effective Time;
(m) any workers compensation claims relating to the Business
for any period prior to the Effective Time;
(n) any Liabilities or obligations with respect to any
outstanding checks written or issued by Seller or any of its Affiliates prior to
the Closing Date; and
(o) except for items specifically included in the Assumed
Liabilities, all Liabilities of Seller relating to or arising out of any act,
event or omission occurring prior to the Effective Time.
ARTICLE 3
THE CLOSING; PURCHASE PRICE
3.1 PLACE AND DATE. The closing of the sale and purchase of the
Transferred Assets (the "Closing") and the assumption of the Assumed Liabilities
shall take place at 10:00 a.m. local time, not later than (i) five (5) business
days following the satisfaction or waiver of the conditions referred to in
Articles 11 and 12 or (ii) seven (7) business days after the Sale Order is
entered, whichever is later, at such place upon which the parties may agree. The
day on which the Closing actually occurs is sometimes referred to herein as the
"Closing Date." Notwithstanding the actual time of Closing on the Closing Date,
the Closing shall be deemed to have occurred as of 12:01 a.m., local time, on
the Closing Date (the "Effective Time").
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3.2 PURCHASE PRICE. On the terms and subject to the conditions set
forth in this Agreement, the purchase price shall be U.S. $5,800,000.00 (the
"Cash Portion") plus the assumption of the Assumed Liabilities (collectively the
"Purchase Price").
3.3 DEPOSIT. Simultaneously with the execution of this Agreement,
the Buyer shall deliver to Squire, Xxxxxxx & Xxxxxxx, L.L.P., attorneys for
Seller, an amount equal to U.S.$150,000.00 (the "Deposit") as a deposit toward
the Cash Portion of the Purchase Price. The Deposit shall be held and invested
in an interest bearing account, the proceeds of which shall be included in the
Deposit for the benefit of either Buyer or Seller, as the case may be.
3.4 ALLOCATION OF PURCHASE PRICE.
(a) The parties shall allocate the aggregate consideration
received by Seller with respect to the Transferred Assets and the assumption of
the Assumed Liabilities, in accordance with Section 1060 of the Tax Code, as
mutually agreed to by the parties within forty-five (45) days following the
Closing. Subject to the requirements of any applicable Tax law or election, all
such mutually agreed to allocations shall be used by each party in preparing any
filings required pursuant to Section 1060 of the Tax Code or any similar
provisions of state or local law and all relevant Income Tax Returns. Neither
Buyer nor Seller will take any position before any taxing authority or in any
judicial proceeding with respect to Income Taxes that is inconsistent with such
mutually agreed to allocations without the prior written consent of the other
party, in the consenting party's commercially reasonable discretion. The parties
shall exercise commercially reasonable efforts to support such mutually agreed
to reported allocations in any audit proceedings initiated by any taxing
authority.
(b) Within 15 days after agreeing to the tax allocation
pursuant to Section 3.4(a), Seller will provide to Buyer copies of IRS Form 8594
and any required exhibits thereto with Seller's proposed allocation of the
consideration received by Seller with respect to the Transferred Assets for
Buyer's approval, which shall not be unreasonably withheld. If Buyer fails to
respond to Seller within 15 days of Buyer receiving such IRS Form 8594, then
Buyer shall be deemed to have approved Seller's allocation. Buyer agrees to
provide Seller with any financial documentation concerning the Business
reasonably required by Seller to prepare the IRS Form 8594 described in this
Section 3.4(b) or otherwise in furtherance of this Section 3.4.
3.5 DELIVERIES. At the Closing: (a) Buyer shall deliver to, or as
directed by Seller, the Cash Portion of the Purchase Price, less the Deposit,
and the agreements, instruments of assumption, certificates and other documents
required to be delivered by Buyer pursuant to Article 12; and (b) Seller shall
deliver to Buyer the agreements, instruments of transfer, certificates and other
documents required to be delivered by Seller pursuant to Article 11.
3.6 [Intentionally Omitted.]
3.7 CONSENTS OF THIRD PARTIES. Notwithstanding anything to the
contrary in this Agreement, this Agreement shall not constitute an agreement to
assign or transfer any Consent from a Governmental Authority, instrument,
contract (including the Assumed Contracts), lease, or other agreement or
arrangement or any claim, right or benefit arising thereunder or resulting
therefrom, to the extent that such assignment or transfer or an attempt to make
such an assignment or transfer cannot be made pursuant to Section 365 of the
Bankruptcy Code without the consent or approval of a third party. In the event
any such
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consent or approval is not obtained on or prior to the Closing Date, Seller
shall, in any lawful arrangement, provide Buyer with the benefits under any such
Consent, instrument, contract, lease or other agreement or arrangement, provided
that Buyer shall undertake to pay, perform, discharge or satisfy the
corresponding liabilities and obligations for the enjoyment of such benefit to
the extent Buyer would have been responsible therefor if such consent or
approval had been obtained.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth in the Disclosure Schedule delivered to Buyer
contemporaneously herewith (the "Disclosure Schedule"), of which the Schedules
referred to below are a part, and in the documents and other materials
identified in the Disclosure Schedule (it being agreed that any matter disclosed
in the Disclosure Schedule with respect to any section of this Agreement shall
be deemed to have been disclosed with respect to all other sections of this
Agreement to the extent that a person reasonably familiar with the Business
would deem such disclosure to modify such other sections of this Agreement), and
subject to the limitations contained in Section 14.1, as of the date of this
Agreement, Seller makes to Buyer the following representations and warranties.
4.1 ORGANIZATION, STANDING, ETC. OF SELLER. Danvid is a corporation
duly incorporated and validly existing under the laws of the jurisdiction where
it is organized and has all requisite corporate power and authority to carry on
the Business as currently conducted and to own or lease and to operate the
properties of the Business. Danvid is in good standing and is qualified to do
business in each state of the United States in which the Business is conducted
that requires such qualification and where the failure to so qualify would have
a Material Adverse Effect on the Business. Seller is currently a
debtor-in-possession in the Bankruptcy Case pursuant to the Bankruptcy Code, and
retains full authority and power to operate its business and affairs pursuant to
Sections 1107 and 1108 of the Bankruptcy Code, with no trustee, examiner,
facilitator or other officer or agent with similar authority or powers to a
trustee, examiner or facilitator having been appointed in such Bankruptcy Case.
4.2 CORPORATE AUTHORIZATION. Subject to approval by the Bankruptcy
Court, the execution, delivery and performance of this Agreement and all other
documents executed or to be executed pursuant to this Agreement by Seller, and
the consummation of the Contemplated Transactions, have been duly authorized by
all necessary corporate action on the part of Seller. Subject to approval by the
Bankruptcy Court, this Agreement has been duly executed and delivered by a duly
authorized officer of Seller.
4.3 ENFORCEABILITY. Subject to approval by the Bankruptcy Court,
this Agreement constitutes the valid and legally binding obligation of Seller,
enforceable in accordance with its terms.
4.4 GOVERNMENTAL AUTHORIZATIONS AND CONSENTS. No consents, licenses,
approvals or authorizations of, or registrations or declarations with, any
Governmental Authority are required to be obtained or made by Seller in
connection with the execution, delivery, performance, validity and
enforceability of this Agreement, other than (a) bankruptcy court approval, and
(b) other consents, licenses, approvals, authorizations, registrations or
declarations, where the failure to obtain such would not have a Material Adverse
Effect on the Business.
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4.5 FINANCIAL STATEMENTS. Seller has delivered to Buyer the
following: a) audited financial statements as of and for the twelve month period
ending December 31, 2001; b) 2002 monthly income statement of the Business for
the months available through the date this Agreement is executed; and c) 2002
monthly balance sheet for the Business for the months available through the date
this Agreement is executed (such statements hereinafter being referred to as the
"Financial Statements"). The Financial Statements have been prepared in
accordance with past practice and the accounting records and policies of Seller
and reasonably present in all material respects the Transferred Assets and the
Assumed Liabilities of the Business as of the dates thereof.
4.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except: (i) as set forth
on Schedule 4.6 and (ii) the filing of the Bankruptcy Case and any actions taken
in connection therewith, since January 1, 2002, Seller has conducted its
operations related to the Business in the ordinary course of business and Seller
has not:
(a) mortgaged, pledged or subjected to any Lien, except
Permitted Encumbrances, any portion of the Transferred Assets,
(b) sold, assigned or transferred any Transferred
Intellectual Property;
(c) allowed the Business to suffer any damage, destruction
or loss (whether or not covered by insurance) which, in the aggregate, exceeds
$100,000;
(d) borrowed any amount or incurred any obligations or
liabilities of any kind, absolute, contingent or otherwise, whether due or to
become due, which, in the aggregate, exceed $100,000 in value, except for
purchase orders or sales contracts issued or entered into in the ordinary course
of business;
(e) made or committed to make any unfunded capital
expenditures in excess of $100,000;
(f) materially increased or changed the terms of the
compensation or benefits payable or to become payable to any of its officers,
directors, employees or agents, except increases in the ordinary course of
business;
(g) made any material change in the terms of any bonus,
insurance, pension or other benefit plan for or with any of its officers,
directors, employees or agents which increases amounts paid, payable or to
become payable thereunder, other than in the ordinary course of business;
(h) disposed of any assets, other than the disposal of
Inventory in the ordinary course of business, which, in the aggregate, exceed
$100,000 in value;
(i) offered any incentive to any third party to accelerate
collection of any of the Accounts Receivable other than customary discounting
terms;
(j) engaged in, or agreed to engage in, any transaction with
any Affiliate;
(k) made any material change in its accounting procedures or
practices; or
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(l) decreased the pricing of any products of the Business in
excess of five percent (5%), or extended payment terms beyond thirty (30) days,
to any of its top twenty (20) customer as determined based upon calendar year
2002 sales.
4.7 TITLE TO TRANSFERRED ASSETS. Except as set forth on Schedule
4.7, Seller has good, transferable and marketable title to or other valid
ownership rights in the Transferred Assets. This Section 4.7 does not apply to
the Transferred Intellectual Property.
4.8 TRANSFERRED INTELLECTUAL PROPERTY.
(a) Seller owns, or is licensed or otherwise possesses the
right to use, all the Transferred Intellectual Property, and the Transferred
Intellectual Property is all the intellectual property necessary to conduct the
Business substantially as currently conducted by Seller.
(b) Schedule 2.1(d) includes a list of patents, registered
copyrights, registered trademarks, registered trade names and registered service
marks, and any pending applications therefor, included in the Transferred
Intellectual Property.
4.9 ASSUMED CONTRACTS. The Assumed Contracts listed on Schedule 4.9
are all of the contracts and agreements that (i) are material to the Business,
(ii) involve performance of services or the delivery of goods or materials of an
amount or value in excess of $50,000, (iii) involve expenditures or receipts in
excess of $50,000, (iv) relate to any lease or agreement under which Seller is a
lessee or lessor of, or holds or operates, or permits any third party to hold or
operate, any personal or real property for which the annual rental exceeds
$5,000; (v) relate to any representative or sales agency contracts or
commitments to which Seller is a party; or (vi) include any Affiliate as a
party. To the Knowledge of Seller, all of the Assumed Agreements are valid, in
full force and effect, binding upon Seller and, to the Knowledge of Seller,
binding upon the other parties thereto in accordance with their terms and,
Seller is not in default under any of them nor, to the Knowledge of Seller, is
any other party thereto in default thereunder, nor, to the Knowledge of Seller,
does any condition exist that with notice or lapse of time or both would
constitute a default thereunder. To the Knowledge of Seller, there has been no
notice given or claim, demand or allegation made by any third party that has
triggered, or could reasonably be expected to trigger, a duty on the part of
Seller to defend or indemnify any third party under any of the Assumed
Contracts, and, to the Knowledge of Seller, there are no facts or basis for any
such notice, claim, demand or allegation.
4.10 LICENSES AND PERMITS. Schedule 4.10 includes a list of all
permits, licenses and other authorizations from Governmental Authorities
necessary for the conduct of the Business substantially as currently conducted.
Seller has all licenses, permits and other authorizations from Governmental
Authorities necessary for the conduct of the Business as conducted by Seller
prior to the date hereof (collectively "Permits"), except where the failure to
have such Permits could not reasonably be expected to result in a Material
Adverse Effect on the Business. Except as set forth on Schedule 4.10, (a) each
of said Permits is in full force and effect, (b) the Business is in compliance
with the terms, provisions and conditions thereof, except where the failure to
be so in compliance could not reasonably be expected to result in a Material
Adverse Effect on the Business, (c) to Seller's Knowledge, there are no
outstanding violations, notices of noncompliance, judgments, consent decrees,
orders or judicial or administrative actions, investigations or proceedings
adversely affecting any of said Permits, and (d) to Seller's Knowledge, no
condition exists and no event has occurred which (whether with or without
notice, lapse of time or the occurrence of any other event) would permit the
suspension or revocation of any material
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Permits other than by expiration of the term set forth therein. Seller makes no
representation or warranty with respect to the transferability of the Permits to
Buyer.
4.11 ENVIRONMENTAL COMPLIANCE. Except as set forth in Schedule 4.11,
the conduct of the Business complies in all material respects with all
Environmental Laws, except where the failure to so comply would not reasonably
be expected to result in a Material Adverse Effect on the Business. To the
Knowledge of Seller, except as disclosed on Schedule 4.11, (a) there have been
no spills or discharges of any Hazardous Materials on any of the owned or leased
properties which are Transferred Assets or which have been leased or otherwise
used in connection with the Business and (b) there are no Environmental
Liabilities relating to the conduct of the Business at any time that would
reasonably be expected to result in a Material Adverse Effect on the Business.
"Environmental Laws" shall mean all applicable U.S. and foreign federal, state
and local laws, ordinances and regulations pertaining to air and water quality,
Hazardous Materials, waste, disposal or other environmental matters, including
the Clean Water Act, the Clean Air Act, the Federal Water Pollution Control Act,
the Solid Waste Disposal Act, the Resource Conservation Recovery Act, the
Occupational Health and Safety Act, the Comprehensive Environmental Response,
Compensation, and Liability Act, and the rules, regulations and ordinances of
the cities and other jurisdictions in which the Business is located, the
Environmental Protection Agency and all other applicable Governmental
Authorities.
4.12 BENEFIT PLANS. Schedule 4.12 lists and identifies (i) each
employee pension benefit plan, as defined in Section 3(2) of ERISA (a "Pension
Plan"); and (ii) each employee welfare benefit plan, as defined in Section 3(1)
of ERISA (a "Welfare Plan"), that is maintained or contributed to by Seller or
any entity that would be considered a single employer with Seller under Section
414(b), 414(c), 414(m) or 414(o) of the Tax Code (collectively, the "Benefit
Plans"). No Benefit Plan is a "multiemployer plan" within the meaning of ERISA
Section 3(37), subject to Title IV of ERISA, or subject to the funding
requirements of ERISA Section 302 or Section 412 of the Tax Code. All required
contributions of Seller have been made to the Pension Plans. Except as disclosed
on Schedule 4.12, Seller does not maintain or contribute to any Welfare Plan
that provides benefits to employees after termination of employment other than
as required by Part 6 of Subtitle B of Title I of ERISA.
4.13 BROKERS. With the exception of fees and expenses payable to
Xxxxxx, Del Genio, Xxxxx & Co., LLC, which shall be paid by Danvid, all
negotiations relating to this Agreement, and the Contemplated Transactions, have
been carried on without the participation of any Person acting on behalf of
Seller or its Affiliates in such manner as to give rise to any valid claim
against Buyer for any brokerage or finder's commission, fee or similar
compensation upon consummation of the Contemplated Transactions.
4.14 TAXES. Except as set forth on Schedule 4.14, with respect to
Taxes:
(a) Seller has properly completed and filed or caused to be
filed or shall properly complete and file or cause to be filed, in accordance
with and within the time prescribed by Applicable Law, including extensions, all
Tax Returns with respect to the Transferred Assets that are or were required to
be filed under federal, state, local or any foreign laws on or prior to the
Closing Date.
(b) Seller has, within the time and in the manner prescribed
by law, paid or caused to be paid (and until the Closing will, within the time
and in the manner prescribed by law, pay or cause to be paid) all Taxes that are
due and payable with respect to the Business, whether or not shown on any Tax
Return. The Business has paid or, in the case of Taxes not due or being
contested in good faith, has made
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adequate provisions for the payment of all Taxes for which the Business is or
may reasonably become liable for payment.
(c) (i) Prior to the date hereof, Seller has provided to
Buyer or its agents copies of all written revenue agent's reports and all other
written or formal assertions of deficiencies or other liabilities for Taxes
(including all reports, statements, summaries and other communications of
assertions or claims of deficiencies or other liabilities) of Seller with
respect to the periods of xxxx Xxxxxx has owned the Business.
(ii) Except for waivers and extensions disclosed on
Schedule 4.14(c), there are no waivers or extensions of any applicable statute
of limitations for the assessment or collection of Taxes with respect to any Tax
Return that relates to Seller or the Business which waivers or extensions
currently are in effect, and which Taxes could result in a Lien or Liens in
excess of $25,000 in the aggregate upon any of the Transferred Assets or the
Business, and no request for any such waiver or extension is currently pending.
(iii) Except as disclosed on Schedule 4.14(c), no
Lien, action, suit, proceeding, investigation, audit, examination, request for
information, claim or assessment is presently pending or, to the Knowledge of
Seller, proposed with regard to any Taxes that relate to the Business for which
Buyer would or could be liable or which could result in a Lien or Liens in
excess of $25,000 in the aggregate on the Transferred Assets or the Business.
(iv) Seller is not a "foreign person" within the
meaning of Section 1445(f)(3) of the Tax Code and Treasury Regulation Section
1.1445-2(b)(2)(i).
(d) Schedule 4.14(d) sets forth a list of states,
territories and jurisdictions (whether foreign or domestic) in which Seller is
required to file Tax Returns. Seller has filed all required Tax Returns required
by Tax authorities in jurisdictions in which Seller conducts business and to
Seller's Knowledge, Seller has not received notice from any Tax authority that
it is required to file additional Tax Returns concerning the operation of the
Business.
(e) There are no Liens for Taxes (other than for Taxes not
yet due and payable) upon Seller except with respect to Taxes that are being
contested in good faith by appropriate proceedings (all of which are disclosed
on Schedule 4.14(e)) and for payment of which Taxes adequate reserves have been
established and disclosed to Buyer.
4.15 COMPLIANCE WITH LAW. To the Knowledge of Seller, Seller is in
compliance with all Applicable Laws. To the Knowledge of Seller, Seller has not
received any notice of any violation or alleged violation of any Applicable
Laws.
4.16 PRODUCT WARRANTIES. Schedule 4.16 contains a true, correct, and
complete copy of Seller's standard warranties and return policies for its
products, and except as stated therein or provided for under any Applicable Law,
there are no warranties, commitments or obligations with respect to the return,
repair or replacement of Seller's products.
4.17 EMPLOYMENT MATTERS. Seller is not presently, and has not been in
the past, a party to, or bound by, any collective bargaining agreement, union
contract or similar agreement with respect to the
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employees of the Business, (i) no collective bargaining agreement or similar
agreement is being negotiated by Seller, whether directly or indirectly, for the
employees of the Business, (ii) to the Knowledge of Seller, there is no effort
by or on behalf of any labor union to organize any employees of the Business for
purposes of collective bargaining, and (iii) there is no strike, labor dispute,
work slowdown or work stoppage actually pending or, to the Knowledge of Seller,
threatened, against Seller with respect to the Business.
4.18 TRANSFERRED ASSETS. The Transferred Assets include all assets
necessary to conduct the Business in the manner such business was substantially
conducted by Seller prior to the date hereof.
4.19 LEASES AND FACILITIES. Schedule 2.1(c) hereto sets forth a true,
correct and complete list of all real property owned or used by Seller in the
operation of the Business, together with a list of each lease, sublease, license
or any other agreements under which Seller holds a leasehold or other interest
in real property or right to the use thereof. Such leases, subleases, licenses
and other agreements are valid, in full force and effect and binding upon the
parties thereto in accordance with their terms, and neither Seller nor, to the
Knowledge of Seller, any other party, is in default thereunder, nor does any
condition exist that with notice or lapse of time, or both, would constitute a
default.
4.20 EMPLOYMENT AGREEMENTS. Except as set forth on Schedule 4.20,
Seller has no written or oral employment, consulting, severance,
change-in-control, or similar agreements or commitments with employees of
Seller.
4.21 NON-COMPETITION AGREEMENTS. Except as set forth on Schedule
4.21, Seller is not a party to any agreement or other commitment imposing any
restriction on the manner or the geographic location in which Seller conducts or
may conduct the Business or uses or may use its properties or assets in
competition with any third party.
4.22 LEGAL PROCEEDINGS. Except as set forth on Schedule 4.22, (a)
there is no litigation, arbitration or other proceeding or governmental
investigation pending or, to the Knowledge of Seller, threatened against Seller
or any of the Transferred Assets or that threatens or challenges the
consummation of the Contemplated Transactions, and, to the Knowledge of Seller,
there is no basis for any such action; (b) there are no actions pending or, to
the Knowledge of Seller, threatened by any governmental or quasi-governmental
agency with respect to compliance by Seller with applicable laws, ordinances or
regulations and, to the Knowledge of Seller, there is no basis for any such
action; and (c) to the Knowledge of Seller, there is no outstanding execution,
order, writ, injunction, judgment or decree of any court, government or
governmental agency against Seller or the Transferred Assets or that threatens
or challenges the consummation of the Contemplated Transactions, or to which
Seller or the Transferred Assets are subject.
4.23 INSURANCE. Seller is insured under various policies of fire,
liability and other forms of insurance, as set forth on Schedule 4.23 hereto,
which policies are valid and enforceable in accordance with their terms. Since
December 10, 1997, there was no period during which Seller lacked insurance
coverage. Seller shall continue to carry all such policies or similar policies
during the pendency of this Agreement, and all outstanding claims under such
policies are described in Schedule 4.23 hereto. There is no recorded liability
for retrospective insurance premium adjustments for any period prior to the date
hereof. Seller has made the following available to Buyer for its review:
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(a) All comprehensive general liability and other policies
of insurance under which Seller is or has been insured at any time within the
three (3) year period immediately preceding the date of this Agreement.
(b) All property and casualty policies of insurance under
which the Seller is presently insured.
(c) All obligations of Seller to provide insurance coverage
to third parties (for example under leases or other contracts).
(d) The expiration date of each insurance policy under which
Seller is currently insured.
4.24 AFFILIATED TRANSACTIONS. Except as set forth on Schedule 4.24,
since January 1, 2002 no present or former officer, director, shareholder,
employee or Affiliate of Seller and, to the Knowledge of Seller, no individual
in such officer's, director's, shareholder's, employee's or Affiliate's
immediate family, is or was a party to any agreement, contract, commitment or
transaction with Seller or has any interest in any property owned or used by
Seller with a value in excess of $100,000, except regarding employment
relationships with Seller regarding the Business. Except as set forth on
Schedule 4.24, to the Knowledge of Seller, no employee of Seller or any
individual in such employee's immediate family is a party to any agreement,
contract, commitment or transaction with Seller or has any interest in any
property owned or used by Seller, except regarding employment relationships with
Seller regarding the Business.
4.25 CUSTOMERS, SUPPLIERS AND DISTRIBUTORS. Seller maintains and has
good relationships with its top twenty (20) customers, and its major suppliers
of raw materials and distributors, and Seller has received no written notice of
any facts that would lead to a reasonable expectation of a material
deterioration in any such relationship. Schedule 4.25 sets forth a list of the
top twenty (20) customers, suppliers of raw materials and distributors of
Seller.
4.26 RELATIONSHIP WITH GENERAL ELECTRIC COMPANY. Except as set forth
on Schedule 4.26, neither Seller nor, to the Knowledge of Seller, any of its
Affiliates has any equity, creditor or similar relationship, including, without
limitation, any investment in, or any debtor, revolving credit, leasing or
creditor relationship, but excluding any vendor or vendee relationship, with
General Electric Company or any entity known by Seller or its Affiliates to be a
subsidiary of General Electric Company.
4.27 NO OTHER REPRESENTATIONS AND WARRANTIES. Except as expressly set
forth in this Agreement, the Schedules and Exhibits hereto, and any certificate
or instrument delivered pursuant to the terms hereof, Seller makes no
representations or warranties with respect to the Business or Seller's
operations, assets (including, without limitation, the Transferred Assets),
liabilities (including, without limitation, the Assumed Liabilities) or
condition, including, with respect to the Transferred Assets, any representation
or warranty of merchantability, suitability or fitness for a particular purpose,
or quality as to the Transferred Assets, or any part thereof, or as to the
condition or workmanship thereof, or the absence of any defects therein, whether
latent or patent.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as set forth below as of the
date of this Agreement:
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5.1 ORGANIZATION AND STANDING OF BUYER. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction where it is organized and has all requisite corporate power and
authority to enter into this Agreement, and on the Closing Date will have all
requisite corporate power and authority to carry out the Contemplated
Transactions and to perform its obligations hereunder. Buyer is a domestic
corporation within the meaning of Section 7701 of the Tax Code.
5.2 AUTHORIZATION. The execution, delivery and performance of this
Agreement and all other documents executed or to be executed by Buyer pursuant
to this Agreement, and the consummation of the Contemplated Transactions have
been duly authorized by all necessary corporate and other action on the part of
Buyer. This Agreement has been duly executed and delivered by a duly authorized
officer of Buyer.
5.3 ENFORCEABILITY. This Agreement constitutes the valid and legally
binding obligation of Buyer, enforceable in accordance with its terms, except as
such enforceability may be limited by equitable principles and by applicable
bankruptcy, insolvency, reorganization, arrangement, moratorium or similar laws
relating to or affecting the rights of creditors generally.
5.4 COMPLIANCE WITH OTHER INSTRUMENTS AND LAWS. The execution,
delivery and performance of this Agreement and the consummation of the
Contemplated Transactions will not conflict with or result in any violation of
or default under any provision (a) of the charter or bylaws of Buyer, or (b) of
any mortgage, indenture, trust, lease, partnership or other agreement or other
instrument, permit, concession, grant, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to Buyer or any
of its properties or assets, the result of which, with respect to items
identified in clause (b) would (either individually or in the aggregate) have a
material adverse effect on the operations or financial condition of Buyer or
would materially impair Buyer's ability to consummate the Contemplated
Transactions (a "Material Adverse Effect on Buyer").
5.5 GOVERNMENTAL AUTHORIZATIONS AND CONSENTS. Except as set forth on
Schedule 5.5, no consents, licenses, approvals or authorizations of, or
registrations or declarations with, any Governmental Authority, bureau, agency
or commission, or any third party, are required to be obtained or made by Buyer
in connection with the execution, delivery, performance, validity and
enforceability of this Agreement other than (a) Bankruptcy Court approval, and
(b) other consents, licenses, approvals, authorizations, registrations or
declarations, where the failure to obtain such would not have a Material Adverse
Effect on Buyer.
5.6 ACCESS. Buyer has received and reviewed the Financial Statements
and is acquainted with the Business. Buyer has had an opportunity to review the
assets, books, records and contracts of the Business, and has been given the
opportunity to meet with officers and other representatives of Seller for the
purpose of investigating and obtaining information regarding the Business
operations and its financial and legal affairs.
5.7 BROKERS. No agent, broker, Person or firm acting on behalf of
Buyer or its stockholders is, or will be, entitled to any commission or broker's
or finder's fees from any of the parties hereto, or from any Person controlling,
controlled by or under common control with any of the parties hereto, in
connection with any of the Contemplated Transactions.
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ARTICLE 6
COVENANTS RELATING TO PERSONNEL ARRANGEMENTS
6.1 TRANSFEREE EMPLOYEES. Effective as of the Closing Date, Seller
shall terminate the employment of the employees of the Business. Buyer shall
offer employment to all employees of the Business on the Closing Date on
substantially similar terms and conditions of employment as those previously
provided by Seller. All such employees offered and accepting employment with
Buyer shall be referred to herein as "Transferee Employees."
6.2 COBRA OBLIGATIONS.
(a) Buyer will be solely responsible for any obligations for
continuation coverage under Section 4980B of the Tax Code and part 6 of Subtitle
B of Title I of ERISA with respect to Transferee Employees, provided that Seller
shall be solely responsible for notifying Transferee Employees of their right to
such continuation coverage in accordance with Sections 4980B(f)(6) of the Tax
Code and 606(a)(4) of ERISA. Seller shall provide Buyer with a form of notice
for Buyer's review no later than five (5) days prior to the date that such
notice is sent to the Transferee Employees.
(b) Seller will be solely responsible for any obligations
for continuation coverage under Section 4980B of the Tax Code and part 6 of
Subtitle B of Title I of ERISA with respect to all employees other than
Transferee Employees.
6.3 PLANS, BENEFITS AND POLICIES.
(a) Buyer will, as of the Closing Date, adopt and provide,
or otherwise make available, a group health plan for Transferee Employees.
(b) To the extent that Buyer provides any Transferee
Employee benefits under any Benefit Plan, Buyer will credit such Transferee
Employee with service with Seller (and predecessors of Seller) for purposes of
(i) vesting for and eligibility to participate in any Pension Plan of Buyer, but
not for purposes of benefit accruals; (ii) any waiting periods, eligibility or
pre-existing condition limitations for any Welfare Plan of Buyer; and (iii)
eligibility and benefit computation for vacation and severance pay plans of
Buyer; provided, however, that the foregoing shall not require Buyer to offer
any of such plans to any Transferee Employees, except as provided in Section
6.3(a) above. Such requirements identified in clause (i) and (ii) above shall
only apply to plans qualified under Section 401(a) of the Tax Code.
(c) Seller shall retain and be solely responsible for all
liabilities related to its Benefit Plans, whether incurred before, on or after
the Closing. Seller shall assume or retain, as the case may be, and be solely
responsible for all liabilities arising under, resulting from or relating to
Seller's employment or termination of any of its former employees (other than
Transferee Employees). Except as otherwise provided herein, as of the Closing,
all Transferee Employees shall cease participation in Benefit Plans of Seller.
(d) After Closing, Buyer and Seller will cooperate with each
other and provide each other such information as is reasonably required
concerning Transferee Employees.
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(e) No provision in this Section 6.3 shall create any
third-party beneficiary rights in any employee or former employee (including any
beneficiary or dependent thereof) of Buyer, Seller or any of their respective
Affiliates.
(f) Buyer shall have no responsibility, liability or
obligation relative to the Benefit Plans, except as may be set forth in this
Agreement.
ARTICLE 7
COVENANTS OF SELLER
7.1 CONDUCT OF BUSINESS.
(a) Except as set forth on Schedule 7.1 or as may be
otherwise expressly permitted by this Agreement or with the prior written
consent of Buyer, and subject to any order of the Bankruptcy Court which shall
take precedence over any provision of this Agreement, from the date hereof and
prior to the Closing, Seller will: (i) operate the Business only in the ordinary
course; (ii) use commercially reasonable efforts to preserve intact the
organization of the Business; (iii) continue in full force and effect all
existing insurance policies (or comparable insurance) of or relating to the
Business; (iv) preserve relationships with suppliers, customers, licensors and
licensees and others having business dealings with Seller relating to the
Business; (v) repair or replace any material Transferred Asset damaged or
destroyed; (vi) maintain the Permits in good standing and in full force and
effect; (vii) maintain the Books and Records in a manner consistent with past
practices; and (viii) promptly advise Buyer in writing of any organized labor
activity related to the Business.
(b) Without limiting the generality of Section 7.1(a), and
except as may be otherwise expressly permitted by this Agreement or approved by
the Bankruptcy Court or with the prior written consent of Buyer, which shall not
be unreasonably withheld, delayed or conditioned, from the date hereof through
the Closing, Seller shall not, with respect to the Business:
(i) enter into any material transaction in
connection with the Business outside the ordinary course of
business;
(ii) conduct the Business in a manner that departs
materially from the manner in which the Business was being
conducted prior to the date of this Agreement;
(iii) sell, lease, transfer, mortgage, assign or
encumber any of the Transferred Assets, tangible or intangible,
other than in the ordinary course of business;
(iv) cancel, compromise, knowingly waive or lease any
material right or claim (or series of related rights and claims)
under Material Contracts, outside the ordinary course of
business;
(v) make any material change in the rate of
compensation, commission, bonus or other direct or indirect
remuneration payable, to or in respect of any employee of the
Business, other than the increases and payments in the ordinary
course of business consistent with past practice since the
Filing Date;
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(vi) enter into any contract or obligation related to
the Business or the Transferred Assets that can reasonably be
expected to create an obligation in excess of $100,000;
(vii) make or agree to make any capital expenditure in
excess of $100,000;
(viii) make any material changes in Seller's accounting
procedures and practices from those in effect at December 31,
2002;
(ix) make any material changes in Seller's credit
sales criteria in effect at December 31, 2002 for its top twenty
(20) customers as determined based upon calendar year 2002
sales;
(x) except in the ordinary course of business,
modify any terms or conditions of the Assumed Contracts;
(xi) make any loans or advances to, or assume, or
guarantee or otherwise become liable for any indebtedness of
another person;
(xii) not adopt, terminate or amend (except as
required by Applicable Law) any Benefit Plan;
(xiii) accelerate the collection of Accounts Receivable
other than customary discounting terms or defer the payment of
Accounts Payable, other than as may be consistent with past
practice; or
(xiv) agree to do any of the foregoing.
(c) In the event that Seller wishes to engage in any act
which falls within the provisions of Section 7.1(b), Seller shall provide
written notice thereof to Buyer who shall advise Seller within three (3)
business days of any objection Buyer has with respect to such action. In the
event that Buyer fails to object within such period, Buyer shall be deemed to
have waived any objection to such act.
(d) Seller shall provide to Buyer, two (2) days prior to the
Closing Date, an updated aged trial balance with respect to its Accounts
Receivable and Accounts Payable.
(e) Seller shall promptly notify Buyer if, at any time from
the date hereof through the Closing, Seller receives any notice, claim, demand
or allegation, or otherwise learns or becomes aware of any facts, that would
make, or could reasonably be expected to make, any representation or warranty
contained in Section 4.9 untrue.
7.2 ACCESS. Subject to reasonable notice and as permitted by law,
Seller shall afford to Buyer and its accountants, counsel and other agents and
representatives full access during normal business hours throughout the period
prior to the Closing Date to all of the properties, books, contracts,
commitments and records of the Business and, during such period, Seller shall
furnish promptly to Buyer and its representatives in relation to the Business
access to all other information concerning the business, properties and
personnel of the Business as Buyer may reasonably request. Seller shall promptly
upon request provide Buyer access to a true, complete and correct copy of each
written agreement or other instrument, together with all amendments or
clarifications thereto, and a true, complete and correct
- 24 -
summary of the terms and conditions of each oral agreement, identified in the
Disclosure Schedule. If access is restricted due to a term in the agreement or
by Applicable Law, Seller shall use its commercially reasonable efforts to
secure consent from the other party(ies) to the agreement to provide such access
prior to Closing with sufficient time for Buyer review. Buyer will treat the
documents and other material and information referred to in this Section 7.2 as
confidential in compliance with Section 9.10.
ARTICLE 8
COVENANTS OF BUYER
8.1 INVESTIGATION. In conducting its review of the Business, Buyer
shall conduct itself so as not to unreasonably interfere with the Business or
with the performance of Seller's employees.
8.2 ASSISTANCE WITH RESPECT TO EXCLUDED ASSETS. Following the
Closing Date, upon the request of Seller, Buyer will, at Seller's sole expense,
use its commercially reasonable efforts to assist Seller in connection with
collection, maintenance or liquidation of the Excluded Assets. If Buyer receives
payment in respect of such items following the Closing, Buyer shall promptly pay
such amounts to Seller and shall notify promptly each such payor that any and
all payments by that payor to Seller in the future should be made directly to
Seller.
ARTICLE 9
COVENANTS OF BOTH PARTIES
9.1 COMMERCIALLY REASONABLE EFFORTS. Subject to the terms and
conditions of this Agreement, each party will use its commercially reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary or desirable under Applicable Law and the terms of
this Agreement to consummate the Contemplated Transactions, including at any
time and from time to time after the Closing the execution and delivery of any
further instruments or documents which are reasonably requested by a party or
its counsel to any party signatory hereto in order to evidence or facilitate the
consummation of the Contemplated Transactions.
9.2 GOVERNMENTAL FILINGS. Buyer and Seller shall cooperate with one
another (i) in determining whether any action by or in respect of, or filing
with, any Governmental Authority is required, or any actions, consents,
approvals or waivers are required to be obtained from parties to any Material
Contracts, in connection with the consummation of the Contemplated Transactions
and (ii) in taking such actions or making any such filings, in furnishing such
information as may be required in connection therewith, and in seeking timely to
obtain any such actions, consents, approvals or waivers.
9.3 PUBLIC ANNOUNCEMENTS. None of Buyer, Seller nor any of their
Affiliates will issue any press release or make any public statement with
respect to this Agreement or the Contemplated Transactions to any Person or
entity prior to the Closing and, after the Closing, will not issue any such
press release or make any such public statement without the prior consent of the
other party (which consent shall not be unreasonably withheld or delayed),
subject to disclosures required in connection with the Bankruptcy Case or to the
extent otherwise required by Applicable Law or legal proceedings. In addition
and subject to Section 9.10, prior to the Closing Date: 1) Seller may inform its
employees of the
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Contemplated Transactions; and 2) Buyer may engage in transitional discussions
with Seller's employees in any reasonable manner deemed appropriate and
necessary by Buyer.
9.4 USE OF BUSINESS NAMES BY BUYER.
(a) Buyer acknowledges that Seller has asserted the absolute
and exclusive proprietary right to all names, marks, trade names, trademarks,
service names and service marks (collectively, "Names") incorporating "American
Architectural Products Corporation" or "AAPC" or any similar Name and to all
corporate symbols or logos (collectively, "Logos") incorporating "American
Architectural Products Corporation" or "AAPC" or any similar Name. All rights of
Seller and its Affiliates to the same and the goodwill represented thereby and
pertaining thereto are being retained by Seller or its Affiliates. Buyer agrees
that it will not, and will cause the Business following the Closing not to, use
the American Architectural Products Corporation or AAPC Name or any similar Name
or any Logo incorporating such Name or any similar Name in any manner, including
in connection with the sale of any products or services or otherwise in the
conduct of the Business, except as expressly permitted by subsection (b) of this
Section 9.4.
(b) For a period of one (1) year from the Closing Date (the
"Window Period"), Seller shall and hereby irrevocably grants to Buyer, effective
as of the Closing Date, on a fully-paid, non-exclusive, royalty-free basis, the
non-exclusive right to use the American Architectural Products Corporation and
AAPC Logos and the American Architectural Products Corporation and AAPC Names in
connection with the operation of the Business as currently conducted including,
during the Window Period, (i) to market and sell all such services and products
produced by the Business and (ii) to use any other assets on hand included in
the Transferred Assets, including, without limitation, any catalogs, invoices,
packaging material or stationery, bearing the American Architectural Products
Corporation and AAPC Names or American Architectural Products Corporation and
AAPC Logos provided, however, that Buyer shall use its commercially reasonable
efforts to cease its use of the American Architectural Products Corporation and
AAPC Names and the American Architectural Products Corporation and AAPC Logos
within the Window Period. Immediately upon the expiration of the Window Period,
Buyer shall cease to use in any manner the American Architectural Products
Corporation and AAPC Names and the American Architectural Products Corporation
and AAPC Logos incorporating such Names and remove or obliterate such Names and
the American Architectural Products Corporation and AAPC Logos from any products
or other Assets and clearly and prominently xxxx the new name of the Business
thereon. Except as set forth in this Section 9.4, at all times following the
Closing, Buyer shall not indicate that Buyer or the Business is affiliated with
Seller or any of its Affiliates.
(c) On the Closing Date, Seller shall modify the formal
corporate or trade names, as the case may be, of Danvid in all jurisdictions
where those names are registered and shall make such names available for Buyer's
immediate use.
9.5 CONSENTS; COOPERATION. Seller and Buyer will use their
commercially reasonable efforts:
(a) to obtain prior to the earlier of the date required (if
so required) or the Closing Date, all authorizations, consents, orders, permits
or approvals of, or notices to, or filings, registrations or qualifications
with, all Governmental Authorities (including, without limitation, the approval
of the Bankruptcy Court) and any other Person or entity that are required on
their respective parts, for the consummation of the Contemplated Transactions;
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(b) to defend, consistent with applicable principles and
requirements of law, any lawsuit or other legal proceeding, whether judicial or
administrative, whether brought derivatively or on behalf of third Persons
(including Governmental Authorities) challenging this Agreement or the
Contemplated Transactions;
(c) to furnish to each other such information and assistance
as may reasonably be requested in connection with the foregoing; and
(d) to reasonably assist each other as necessary with regard
to the determination of contract or order closeouts or other issues which affect
the Assumed Contracts, to notify Buyer of additional disallowances or potential
adverse audit findings, and to consult and reach agreement with respect to
advanced coordination of negotiating positions, offers of compromise, or final
agreements or settlements, all such cooperation to be at a reasonable charge to
the party receiving such cooperation.
9.6 COMMUNICATIONS WITH CUSTOMERS AND SUPPLIERS. Buyer may engage in
communications with suppliers and customers of the Business relating to this
Agreement and the Contemplated Transactions prior to the Closing Date.
9.7 LIABILITY FOR TRANSFER TAXES.
(a) The parties shall cooperate and use commercially
reasonable efforts to avail themselves of the exemption from transfer taxes
contained in Section 1146(c) of the Bankruptcy Code. Buyer shall pay in a timely
manner all title search, title policy, sales, use, value added, documentary,
stamp, gross receipts, foreign withholding, registration, transfer, conveyance,
excise, recording, license, property and other similar Taxes and fees (including
without limitation any goods and services tax ("Transfer Taxes") arising out of
or in connection with or attributable to the Contemplated Transactions. Each
party hereto shall prepare and timely file all Tax Returns required to be filed
in respect of Transfer Taxes that are the primary responsibility of such party
under Applicable Law, provided, however, that such party's preparation of any
such Tax Returns shall be subject to the other party's approval which approval
shall not be unreasonably withheld, conditioned or delayed.
(b) The Transferred Assets are composed of (i) assets as to
which the "isolated, casual or occasional sale" exemption or similar exemption
from Transfer Taxes is or may be applicable and (ii) other assets as to which
other exemptions from Transfer Taxes are or may be applicable. In order to
obtain any exemption or favorable tax rate, Buyer shall, to the extent
consistent with Applicable Law, provide Seller with any exemption or resale
certificate, permit, license or such other documentation as may be required by
any taxing authority to establish the right to such exemption or tax rate.
9.8 BOOKS AND RECORDS. Subject to the confidentiality provisions
hereof, Seller shall have the right to retain copies of the Books and Records.
From and after the Closing and until the second anniversary thereof, (a) Seller
agrees to grant to Buyer, upon reasonable notice and during normal business
hours, reasonable access to any books and records that pertain to the Business,
but which are not Books and Records, to the extent it is operating and has books
and records in its possession, and (b) Buyer agrees to grant to Seller or its
estate, upon reasonable notice and during normal business hours, reasonable
access to any Books and Records included in the Transferred Assets that pertain
to the operations of the Business on or prior to the Closing Date.
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9.9 TAX MATTERS.
(a) Seller and Buyer shall provide each other and their
Affiliates with such assistance and documents, without charge and in a timely
fashion, as may be reasonably requested by either of them in connection with (i)
the preparation of any Tax Return, (ii) the conduct of any procedure relating to
Taxes, or (iii) any other matter that is the subject of this Agreement. Such
assistance shall include, without limitation: (x) the provision on demand of
books, records, Tax Returns, documentation or other information relating to any
relevant Tax Return ("Tax Data"); (y) the execution of any document that may be
necessary or reasonably helpful in connection with the filing of any Tax Return,
or in connection with any procedure relating to Taxes, including, without
limitation, the extensions of applicable statutes of limitations; and (z) the
use of reasonable efforts to obtain any documentation from any Governmental
Authority or other Person that may be necessary or reasonably helpful in
connection with the foregoing. Such cooperation shall include, without
limitation, making their respective employees and independent auditors
reasonably available on a mutually convenient basis for all reasonable purposes,
including, without limitation, to provide explanations and background
information and to permit the copying of books, records, schedules, workpapers,
notices, revenue agent reports, settlement or closing agreements and other
documents containing the Tax Data ("Tax Documentation"). If a third party is
retained in connection with any review hereunder, the party retaining such third
party shall be responsible for any fees and expenses for such third party.
(b) Seller and Buyer shall retain or cause to be retained
the Tax Data, the Tax Documentation, all Tax Returns, schedules and workpapers,
and all material records or other documents relating thereto, until one year
after the Closing Date or until the expiration of any additional period that
either Buyer or Seller, as the case may be, may reasonably request in writing
with respect to specifically designated material records or documents; provided,
however, that in the event a party notifies the other party that an audit,
examination, investigation or other proceeding has been instituted prior to the
first anniversary of the Closing Date, the Tax Data and Tax Documentation
relating thereto shall be retained until there is a final determination thereof
(and the time for any appeal has expired). After the expiration of the time when
the Tax Data and the Tax Documentation must be retained pursuant to this Section
9.9, then any such material may be destroyed. Seller shall give Buyer not less
than thirty (30) day's prior written notice before Tax Data or Tax
Documentation, in the possession or control of any member of the consolidated
group of which AAPC is the common parent, is destroyed and shall give Buyer an
opportunity to copy any such material during such thirty (30) day period.
9.10 CONFIDENTIALITY.
(a) Between the date of this Agreement and the Closing Date,
Buyer and Seller will maintain in confidence, and will cause their respective
Affiliates, directors, officers, employees, agents and advisors to maintain in
confidence, and not use to the detriment of another party any written, oral, or
other information obtained in confidence from another party in connection with
this Agreement or the Contemplated Transactions, unless (i) such information is
already known to such party or to others not bound by a duty of confidentiality
or such information becomes publicly available through no fault of such party,
(ii) 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 (including, without limitation, Bankruptcy Court
approval of any of the Contemplated Transactions), or (iii) the furnishing or
use of such information is required by law, rule, regulation or legal
proceedings, provided, however, that the party required to disclose the
confidential information shall first notify the other party of such order and
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afford the other party the opportunity to seek a protective order relating to
such disclosure. Notwithstanding anything herein to the contrary, Seller shall
not be under any restrictions with respect to disclosures to the Committee, the
Bankruptcy Court in the Bankruptcy Case or any prospective purchaser of the
Business (and their respective agents and representatives) (provided that any
such prospective purchaser enters into a confidentiality agreement with terms
substantially similar to the Prior Confidentiality Agreement). Buyer
acknowledges that Seller will file this Agreement with the Bankruptcy Court in
furtherance of obtaining the Sale Order or other appropriate relief from the
Bankruptcy Court.
(b) If the Contemplated Transactions are not consummated,
each party will immediately return or destroy all such confidential information
and any and all copies thereof, however stored, and, if requested by the other
party, shall certify conformity with this Section 9.10 in writing.
(c) The provisions of this Article 9.10 are in addition to,
and not in lieu of, the provisions of the Confidentiality Agreement dated
January 16, 2003, by and between Buyer and Seller related to the Contemplated
Transactions (the "Prior Confidentiality Agreement"). From and after the Closing
Date, the Prior Confidentiality Agreement shall be of no further force or
effect.
9.11 TRANSITION PERIOD ASSISTANCE. Seller agrees that during the
60-day period beginning on the Closing Date it will reasonably cooperate, and
cause its officers, directors and other representatives to reasonably cooperate,
with Buyer in transitioning to Buyer payroll and other general corporate
services pertaining to the Business.
ARTICLE 10
BUYER PROTECTIONS: OVERBIDDING PROCEDURES
AND BREAK-UP FEES
10.1 BANKRUPTCY COURT APPROVALS.
(a) The obligations of Buyer hereunder are subject to, and
conditioned upon (i) the entry of an order of the Bankruptcy Court, in form and
substance reasonably satisfactory to Buyer (the "Bidding Procedures Order"), (A)
approving and expressly incorporating the procedures and provisions set forth in
Section 10.2 hereof, including, without limitation, the provisions regarding the
payment of a Break-Up Fee, (B) authorizing the allowance and ordering the
payment of a Break-Up Fee in accordance with the provisions of Section 10.2(d)
(subject to any limitations imposed by the Bankruptcy Court), and (C) granting
Buyer a claim for such amounts pursuant to Sections 503(b)(1), 507(a)(1), and
105 of the Bankruptcy Code, and (ii) the Bidding Procedures Order becoming final
and no longer subject to appeal (unless Buyer, in its sole discretion, shall
elect to waive some or all of the conditions set forth in this Section 10.1)
(the conditions set forth in this Section 10.1(a) being referred to herein as
the "Bidding Procedures Order Approval").
(b) The obligations of Buyer and Seller to consummate the
Contemplated Transactions (other than the obligations of the Seller under
Section 10.2(d)) are subject to and conditioned upon (i) the hearing before the
Bankruptcy Court to approve the Sale Order (the "Sale Hearing") occurring on or
before Xxxxx 00, 0000, (xx) the entry of an order (the "Sale Order") of the
Bankruptcy Court, in form and substance reasonably satisfactory to Buyer, (A)
approving this Agreement and the Contemplated Transactions, (B) transferring the
Transferred Assets to Buyer free and clear of all interests and Liens
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(except Permitted Encumbrances), and subject to the Assumed Liabilities,
pursuant to Sections 105, 363 and 365 of the Bankruptcy Code, (C) authorizing
Seller to assume and assign to Buyer and Buyer to assume all of the Assumed
Contracts pursuant to Section 365 of the Bankruptcy Code, (D) finding that good
and sufficient notice of the application for approval of the Sale Order has been
given to all Persons to whom such notice is required under the rules and
procedures of the Bankruptcy Court or otherwise to effectuate the Contemplated
Transactions, and (E) finding that this Agreement was entered into in good faith
by the parties and was not the result of any improper agreements or actions,
such that the parties are afforded the protections set forth in Section 363(m)
of the Bankruptcy Code, and (iii) such Sale Order becoming final and no longer
subject to appeal on or before March 31, 2003, or, if there shall be an appeal
of the Sale Order, such order shall not have been stayed pending such appeal
(the conditions set forth in this Section 10.1(b) being referred to herein as
the "Sale Order Approval").
(c) Within five (5) business days after the date hereof,
Seller shall file with the Bankruptcy Court (i) a motion, notices and proposed
order, for the Bidding Procedures Order in accordance with Section 10.1(a) above
(the "Bidding Procedures Motion"), and (ii) a motion, notices and proposed order
for the Sale Order as described in Section 10.1(b) above (the "Sale Motion").
Seller shall use commercially reasonable efforts to obtain the Bidding
Procedures Order Approval and Sale Order Approval, and Buyer shall cooperate
with Seller in obtaining such orders and approvals. Seller shall give notice of
the Bidding Procedures Motion and the Sale Motion to all parties on the official
service list as maintained in the Bankruptcy Case and all non-debtor parties to
Assumed Contracts and other Persons to whom notice may be required under all
applicable rules and orders of the Bankruptcy Court to obtain the Bidding
Procedures Order Approval and Sale Order Approval, to render such orders valid
and enforceable and to implement the Contemplated Transactions.
10.2 BIDDING PROCEDURES. Seller acknowledges that this Agreement is
the culmination of an extensive process undertaken by Seller to identify and
negotiate a transaction with a bidder who was prepared to pay the highest and
best purchase price for the Transferred Assets while assuming or otherwise
satisfying certain liabilities in order to maximize the value of those assets.
Set forth below are the bidding procedures (the "Bidding Procedures") to be
employed with respect to this Agreement concerning the sale of the Transferred
Assets to Buyer (the "Sale"). The Sale is subject to competitive bidding only as
set forth herein and approval by the Bankruptcy Court at the Sale Hearing under
Sections 105, 363, and 365 of the Bankruptcy Code. The following overbid
provisions and related bid protections are designed to compensate Buyer for its
efforts and agreements to date and to facilitate a full and fair process
designed to maximize the value of the Transferred Assets for the benefit of
Seller's creditors and stakeholders.
(a) Bid Deadline. All Bids must be submitted to Seller, c/o
American Architectural Products Corporation, 000 Xxxxxxxx-Xxxxxxxx Xxxx, Xxxx
Xxxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxx 00000, to the attention of its General
Counsel and to Seller's counsel, Squire, Xxxxxxx & Xxxxxxx L.L.P., and Xxxxxx,
Del Genio, Xxxxx & Co., LLC, Seller's financial advisor, so as to be received
not later than 11:00 a.m., prevailing Eastern time on the date which is five (5)
business days prior to the date scheduled by the Bankruptcy Court for the Sale
Hearing, which date may change from time to time (the "Bid Deadline"). Seller
will immediately distribute by facsimile transmission, personal delivery or
reliable overnight courier service in accordance with the notice procedures set
forth in Section 15.2 a copy of each Bid upon receipt to (i) counsel to the
Committee and (ii) counsel to Buyer. For purposes of this Agreement, "Bid" shall
mean a letter from a Person who the Board of Directors of Seller has determined
in the exercise of its fiduciary duty is financially able to consummate the
Contemplated Transactions (a "Qualified Bidder") stating that (A) such Qualified
Bidder offers to purchase the Transferred Assets upon the terms and
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conditions set forth in this Agreement, together with all Schedules and Exhibits
hereto (the "Definitive Sale Documentation"), marked to show those amendments
and modifications to the Definitive Sale Documentation, including, but not
limited to, price and the time of closing, that such Qualified Bidder proposes,
(B) such Qualified Bidder is prepared to enter into and consummate the
Contemplated Transactions within not more than eleven (11) days after approval
by the Bankruptcy Court of a sale order, subject to receipt of any Consents of
Governmental Authorities (which must be obtained within sixty (60) days of the
approval by the Bankruptcy Court of a sale order), and (C) such Qualified
Bidder's offer is irrevocable until the closing of a purchase of the Transferred
Assets.
(b) Qualified Bid. Only Qualified Bids will qualify for
consideration at the Auction. For purposes of this Agreement, a "Qualified Bid"
is a Bid that:
(i) complies in all respects with Section 10.2(a);
(ii) has a cash component of at least an amount
sufficient to pay a Break-Up Fee to Buyer in accordance with
Section 10.2(d) and provides for payment, in full, of such
Break-Up Fee directly to Buyer at closing;
(iii) is a proposal that Seller determines, in the
good faith opinion of the Board of Directors of Seller after
consultation with the independent financial advisor of Seller
and the Committee, is under all circumstances, on balance, a
higher and better Bid and has a value greater than or equal to
the sum of (x) the value, as reasonably determined by the
independent financial advisor of Seller, of Buyer's offer plus
(y) the amount of the Break-Up Fee payable to Buyer pursuant to
Section 10.2(d) plus (z) $200,000 over the preceding Qualified
Bid;
(iv) is substantially on the same or better terms and
conditions as those set forth in the Definitive Sale
Documentation;
(v) is accompanied by satisfactory evidence of
committed financing or other ability to perform; and
(vi) is accompanied by a deposit (by means of a
certified bank check from a U.S. bank or by wire transfer) equal
to or greater than the Break-Up Fee payable to Buyer pursuant to
Section 10.2(d). Such deposit shall either be returned to the
Qualified Bidder in the event the Qualified Bidder's Bid is not
determined to be the best Qualified Bid, or retained by Seller
at the Closing and applied toward the Purchase Price.
If Seller does not receive any Qualified Bids, no Auction will
be conducted, Seller will report the same to the Bankruptcy Court and will
proceed with a sale and assignment of the Transferred Assets to Buyer pursuant
to the terms of this Agreement. This Agreement executed by Buyer shall
constitute a Qualified Bid for all purposes.
(c) Auction, Bidding Increments, and Bids Remaining Open.
(i) If Seller receives a Qualified Bid, Seller will
conduct an auction (the "Auction") at the location designated by
Seller at least 3 business days prior to the Auction, on the
date that is one (1) business day prior to the date scheduled by
the Bankruptcy Court
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for the Sale Hearing, beginning at 11:00 a.m., prevailing
Eastern time, or such later time or other place as Seller shall
notify all Qualified Bidders who have submitted Qualified Bids.
Only Buyer, Seller, representatives of the Committee, and a
representative from the U.S. Trustee's office (via telephone
conference) and any Qualified Bidders who have timely submitted
Qualified Bids and their respective counsel shall be entitled to
attend the Auction, and only Buyer and Qualified Bidders will be
entitled to make any subsequent Qualified Bids at the Auction.
The opening bid, which does not need to be re-submitted at the
Auction, is the highest Qualified Bid submitted before the
Auction by a Qualified Bidder (the "Opening Bid"), which must
include (A) the Break-up Fee and (B) an incremental increase in
the Purchase Price of not less than $200,000 (the "Overbid
Increment"). Bidding at the Auction will continue until such
time as the highest and best Qualified Bid is determined. Seller
may announce at or prior to the Auction additional procedural
rules that are reasonable under the circumstances (e.g., the
amount of time allotted to make subsequent overbids) for
conducting the Auction so long as such rules are not
inconsistent with these Bidding Procedures.
(ii) After the Opening bid, all subsequent bids must
exceed the previous bid by not less than the Overbid Increment.
Any bid by Buyer over the Opening Bid must be in an amount not
less than the last bid plus the Overbid Increment (giving Buyer
non-cash credit for the Break-Up Fee). For the duration of the
Auction, all bids by either a Qualified Bidder or Buyer include
the Break-Up Fee. If Buyer is the successful bidder at the close
of the Auction, Buyer's winning bid will be reduced by the
Break-Up Fee.
(iii) At least one (1) business day prior to the
Auction, Seller will give Buyer and all other Qualified Bidders
a copy of the highest and best Qualified Bid received and copies
of all other Qualified Bids. In addition, Seller will inform
Buyer and each Qualified Bidder who has expressed its intention
to participate in the Auction of the identity of all Qualified
Bidders that may participate in the Auction.
(d) Break-Up Fee.
(i) If this Agreement is terminated (x) by Buyer
pursuant to Section 13.1(c)(i) because any condition in Section
11.1, 11.2, 11.4, 11.7, 11.8 or 11.9 is not satisfied, (y) by
Seller for any reason other than as permitted under Section
13.1(a) or 13.1(c)(ii), or (z) pursuant to Section 13.1(d), then
Seller shall be obligated to pay to Buyer a break-up fee (a
"Break-Up Fee") of $250,000, in order to reimburse Buyer for its
reasonable out-of pocket expenses in connection with due
diligence and the negotiation and preparation of this Agreement
(including, but not limited to, the expense of accountants,
consultants, and other experts, and the obtaining of related
financing), and the value added by Buyer (A) in establishing a
bid standard or minimum for other bidders, (B) in placing
Seller's estate property in a sales configuration mode
attracting other bidders to the Auction and (C) for serving, by
its name and expressed interest, as a catalyst for other
potential or actual bidders.
(ii) If a Break-Up Fee is owed pursuant to the
provisions of this Section 10.2(d), it shall be allowed and paid
as an administrative expense of Seller under Section 503(b)(1)
of the Bankruptcy Code upon the termination of this Agreement;
provided, however, that if
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the Transferred Assets are sold to a competing bidder or any
other third party, the Break-Up Fee shall be immediately paid to
Buyer out of the proceeds of such sale.
ARTICLE 11
CONDITIONS TO OBLIGATIONS OF BUYER TO CLOSE
The obligations of Buyer to purchase the Business and the Transferred
Assets and otherwise consummate the transactions that are to be consummated at
the Closing are subject to the satisfaction, as of the Closing Date, of the
following conditions (any of which may be waived by Buyer, in its sole
discretion, in whole or in part):
11.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Seller set forth in Article 4 shall be accurate in all
material respects as of the Closing, as though made on and as of the Closing
Date, except to the extent in Section 4.5 of this Agreement that any of such
representations and warranties refers specifically to a date other than the
Closing Date, in which case such representation or warranty shall have been
accurate in all material respects as of such other date.
11.2 PERFORMANCE. Seller shall have performed in all material
respects all obligations required by this Agreement to be performed by Seller on
or before the Closing Date (including, without limitation, the obligation to
close in accordance with the provisions of this Agreement).
11.3 NO CONFLICT. The Contemplated Transactions and the consummation
of the Closing shall not be illegal or prohibited under any Applicable Law. No
temporary restraining order, preliminary or permanent injunction, cease and
desist order or other order issued by any court of competent jurisdiction or any
competent Governmental Authority or any other legal restraint or prohibition
preventing the transfers contemplated hereby or the consummation of the Closing
shall be in effect, and there shall be no pending or threatened actions or
proceedings by any Governmental Authority (or determinations by any Governmental
Authority).
11.4 CERTIFICATE. Buyer shall have received from a duly authorized
officer of Seller a certificate dated the Closing Date confirming that the
conditions in Sections 11.1, 11.2 and, to Seller's Knowledge, 11.3 have been
met.
11.5 BANKRUPTCY COURT APPROVAL. The Bankruptcy Court shall have
entered the Sale Order, in form and substance reasonably satisfactory to Buyer,
and the implementation, operation or effect of such order shall not be stayed or
any stay entered shall have been dissolved.
11.6 CONSENTS. All approvals, consents, waivers and authorizations
required to be obtained by Seller in connection with the Contemplated
Transactions that are identified on Schedule 11.6 shall have been obtained and
shall be in full force and effect, except where the failure to obtain such
consents did not and would not reasonably be expected to result in a Material
Adverse Effect on the Business.
11.7 TRANSFER DOCUMENTS. Seller shall have delivered to Buyer at the
Closing all documents, certificates and agreements necessary to transfer to
Buyer all of Seller's right and title to and interests in the Transferred Assets
free and clear of all Liens, except Permitted Encumbrances or those assumed by
Buyer, including, without limitation:
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(a) bills of sale, assignments and general conveyances, in
form and substance reasonably satisfactory to Buyer, dated the Closing Date,
with respect to the Transferred Assets;
(b) assignments of all Assumed Contracts and any other
agreements and instruments constituting Transferred Assets, dated the Closing
Date, assigning to Buyer all of Seller's right, title and interest therein and
thereto; and
(c) certificates of title to all owned motor vehicles, if
any, included in the Transferred Assets to be transferred to Buyer hereunder,
duly endorsed for transfer to Buyer as of the Closing Date.
11.8 TRANSACTION DOCUMENTS. Seller shall have executed and delivered
the Transaction Documents.
11.9 FURTHER INSTRUMENTS. Seller shall deliver to Buyer such further
instruments of assignment, conveyance or transfer or other documents of further
assurance as Buyer may reasonably request.
ARTICLE 12
CONDITIONS TO OBLIGATIONS OF SELLER TO CLOSE
The obligation of Seller to sell the Transferred Assets and otherwise
consummate the transactions that are to be consummated at the Closing is subject
to the satisfaction, as of the Closing Date, of the following conditions (any of
which may be waived by Seller upon consultation with the Committee, in their
sole discretion in whole or in part):
12.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Buyer set forth in Article 5 shall be accurate in all material
respects as of the Closing, as though made on and as of the Closing Date, except
to the extent that any of such representations and warranties refers
specifically to a date other than the Closing Date, in which case such
representation or warranty shall have been accurate in all material respects as
of such other date.
12.2 PERFORMANCE. Buyer shall have performed in all material respects
all obligations required by this Agreement to be performed by Buyer on or before
the Closing Date (including, without limitation, the obligation to close in
accordance with the provisions of this Agreement).
12.3 NO CONFLICT. The Contemplated Transactions and the consummation
of the Closing shall not be illegal or prohibited under any Applicable Law. No
temporary restraining order, preliminary or permanent injunction, cease and
desist order or other order issued by any court of competent jurisdiction or any
competent Governmental Authority or any other legal restraint or prohibition
preventing the transfer contemplated hereby or the consummation of the Closing,
or imposing damages in respect thereto, shall be in effect, and there shall be
no pending or threatened actions or proceedings by any Governmental Authority
(or determinations by any Governmental Authority) that would reasonably be
expected to have a material adverse effect on the Contemplated Transactions.
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12.4 CERTIFICATE. Seller shall have received from a duly authorized
officer of Buyer a certificate dated the Closing Date confirming that the
conditions in Sections 12.1, 12.2 and, to Buyer's actual knowledge, 12.3 have
been met.
12.5 BANKRUPTCY COURT APPROVAL. The Bankruptcy Court shall have
entered the Sale Order, in form and substance reasonably satisfactory to Seller,
and the implementation, operation or effect of such order shall not be stayed or
any stay entered shall have been dissolved.
12.6 CONSENTS. All approvals, consents, waivers and authorizations
required to be obtained by Buyer in connection with the Contemplated
Transactions that are identified on Schedule 11.6 shall have been obtained and
shall be in full force and effect, except where the failure to obtain such
consents did not and would not reasonably be expected to have a material adverse
effect on the Contemplated Transactions.
12.7 ASSUMPTION AGREEMENT. Seller shall have received from Buyer an
assumption agreement, in form and substance reasonably satisfactory to Seller,
under which Buyer shall have assumed the Assumed Liabilities.
12.8 TRANSACTION DOCUMENTS. Buyer shall have executed and delivered
the Transaction Documents.
12.9 FURTHER INSTRUMENTS. Buyer shall deliver to Seller such further
instruments of assumption or other documents as Seller may reasonably request.
12.10 PAYMENT. Seller shall have received immediately available funds
by wire transfer in accordance with Section 3.2 hereto in the amount of the Cash
Portion of the Purchase Price less the Deposit.
ARTICLE 13
TERMINATION
13.1 RIGHT TO TERMINATE AGREEMENT. This Agreement may be terminated
and the Contemplated Transactions may be abandoned at any time prior to the
Closing (the actual date on which this Agreement is terminated being referred to
herein as the "Termination Date"):
(a) by Buyer or Seller, if the Closing has not occurred on
or before the date that is thirty (30) days after the Sale Order is entered (the
"Outside Date"), unless such failure to close is due to the failure of the party
seeking to terminate this Agreement to comply fully with its obligations under
this Agreement;
(b) by mutual written consent of Buyer and Seller, subject
to any necessary Bankruptcy Court approval;
(c) (i) by Buyer, if any condition in Article 11 has not
been satisfied or if satisfaction of any such condition is or becomes impossible
as of the Outside Date (other than through the failure of Buyer to comply with
Buyer's obligations under this Agreement), and Buyer has not waived such
conditions on or before the Outside Date; or
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(ii) by Seller, if any condition in Article 12 has
not been satisfied or if satisfaction of any such condition is or becomes
impossible as of the Outside Date (other than through the failure of Seller to
comply with Seller's obligations under this Agreement), and Seller has not
waived such conditions on or before the Outside Date; or
(d) automatically, if the Bankruptcy Court shall have
entered an order approving a Competing Bid and the transactions contemplated by
the Competing Bid are subsequently consummated.
Notwithstanding anything to the contrary, any termination by Seller shall be
made only upon consultation with the Committee.
13.2 RETURN OF DEPOSIT AFTER TERMINATION. Seller shall promptly
return the Deposit to Buyer in the event this Agreement is terminated pursuant
to Sections 13.1(a); 13.1(b); 13.1(c)(i); 13.1(c)(ii), but only because any
condition in Section 12.3, 12.5, or 12.6 is not satisfied; or 13.1(d).
ARTICLE 14
MISCELLANEOUS
14.1 EXPIRATION OF REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties set forth in Articles 4 and 5 of this Agreement
shall terminate and expire, and shall cease to be of any force or effect, on the
Closing Date; all liability of the parties hereto with respect to such
representations and warranties shall thereupon be extinguished; and BUYER
ACKNOWLEDGES THAT IT HAS HAD SUFFICIENT OPPORTUNITY TO MAKE WHATEVER
INVESTIGATION MAY BE NECESSARY AND ADVISABLE FOR PURPOSES OF DETERMINING WHETHER
OR NOT TO ENTER INTO AND CLOSE THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
The covenants provided for in Articles 6, 7, 8, 9 and 15 shall continue without
expiration or limit; provided however, that nothing in this sentence shall
prevent Seller and/or any of its Affiliates from consummating a complete
liquidation.
14.2 NO IMPLIED REPRESENTATIONS OR WARRANTIES. Seller makes no
representation or warranty to Buyer except as specifically made in this
Agreement. In particular, Seller makes no representation or warranty to Buyer
with respect to the contents of Seller's descriptive materials and management
presentations to Buyer or the data room made available to Buyer. Buyer
acknowledges that (a) there are uncertainties inherent in such descriptive
materials and management presentations, (b) it is familiar with such
uncertainties, (c) it is taking full responsibility for making its own
evaluation of the adequacy and accuracy of all such descriptive materials and
management presentations so furnished to it, and (d) it shall have no claim
against Seller with respect thereto.
ARTICLE 15
AGREEMENT CONVENTIONS
15.1 FURTHER ASSURANCES. Each party agrees, at any time and from time
to time after the Closing Date, upon reasonable request from the other party, to
do, execute, acknowledge and deliver, as appropriate, such further acts, deeds,
assignments, transfers, conveyances, assumptions, and powers of attorney as may
reasonably be required for (a) the better assigning, transferring, granting,
conveying,
- 36 -
assuming, assuring and confirming to such other party, or its successors and
assigns, of any of the assets, properties or liabilities to be assigned to it,
or (b) the reassignment or return to Seller of assets that may have been
inadvertently assigned, transferred or delivered to Buyer but should not have
been so assigned, transferred or delivered, in each case as provided in the
Transaction Documents.
15.2 NOTICES. All notices, requests, demands, waivers and other
communications required or permitted to be given under the Transaction Documents
shall be in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed by first-class, registered or certified mail, return
receipt requested, postage prepaid, (c) sent by next-day or overnight mail or
courier or (d) sent by facsimile transmission. All such notices, requests,
demands, waivers and other communication shall be deemed to have been received
(i) if by personal delivery, upon delivery, (ii) if by certified or registered
mail, on the third business day after the mailing thereof, (iii) if by next-day
or overnight mail or courier, on the business day after such mailing, (iv) if by
facsimile, three hours after the sender receives a fax confirmation, unless the
fax is sent after 5:00 p.m. on a business day or on a non-business day, in which
case it shall be deemed received on the next business day.
If to Buyer:
Atrium Companies, Inc.
0000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxx 0000X
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxxx, Esq.
Xxxx X. Xxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
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If to Seller, to:
Danvid Window Company
0000 Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Danvid Window Company
000 Xxxxxxxx-Xxxxxxxx Xxxx
Xxxxx 000
Xxxx Xxxxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
and
Squire, Xxxxxxx & Xxxxxxx L.L.P.
Two Renaissance Square
00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attention: Jordan X. Xxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
or, in each case, to such other address as may be specified in writing to the
other parties.
Any party may give any notice, instruction or communication in
connection with the Transaction Documents using any other means (including
telecopy or ordinary mail), but no such notice, instruction or communication
shall be deemed to have been delivered unless and until it is actually received
by the party to whom it was sent. Any party may change the address to which
notices, instructions, or communications are to be delivered by giving the other
parties to the Transaction Documents notice thereof in the manner set forth in
this Section 15.2.
15.3 ASSIGNMENT. This Agreement may not be assigned by any party
without the express written consent of the other party hereto; provided,
however, that Buyer may (i) assign its rights, duties and obligations under this
Agreement to an Affiliate of Buyer and (ii) pledge this Agreement and the rights
and obligations hereunder to any of its lenders as security for indebtedness
owing or to be owed to such lenders.
- 38 -
Subject to the foregoing, this Agreement and the rights and obligations set
forth herein shall inure to the benefit of, and be binding upon, the parties
hereto and each of their respective successors, heirs and permitted assigns.
15.4 ENTIRE AGREEMENT; AMENDMENT; GOVERNING LAW; ETC. The Transaction
Documents (together with the Exhibits and Schedules thereto) embody the entire
agreement and understanding between the parties hereto with respect to the
subject matter thereof. The Transaction Documents may be amended, modified,
waived, discharged or terminated only by (and any consent hereunder shall be
effective only if contained in) an instrument in writing signed by the party
against which enforcement of such amendment, modification, waiver, discharge,
termination or consent is sought. The Transaction Documents shall be construed
in accordance with and governed by the laws of the State of Ohio as it applies
to contracts to be performed entirely within Ohio.
15.5 CONSENT TO JURISDICTION. THE BANKRUPTCY COURT SHALL HAVE
JURISDICTION OVER ALL MATTERS, INCLUDING, BUT NOT LIMITED TO, ANY LEGAL ACTION,
SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY RELATED
AGREEMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY AND THE
INTERPRETATION, IMPLEMENTATION AND ENFORCEMENT OF THIS AGREEMENT, AND THE
PARTIES HERETO IRREVOCABLY SUBMIT AND CONSENT TO SUCH JURISDICTION.
Each of Buyer and Seller further agrees that service of any process,
summons, notice or document by U.S. registered mail to such party's respective
address set forth in Section 15.2 of this Agreement shall be effective service
of process for any action, suit or proceeding with respect to any matters to
which it has submitted to jurisdiction as set forth above. Each of Buyer and
Seller irrevocably and unconditionally waives any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement in the
Bankruptcy Court, and irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum. In the
event that a court should find that subject matter jurisdiction is not available
in the Bankruptcy Court, Buyer and Seller hereby agree to submit any and all
disputes arising out of this Agreement to the jurisdiction and venue of the U.S.
District Court for the Northern District of Ohio.
15.6 SEVERABILITY. Any term or provision of the Transaction Documents
that is invalid or unenforceable in any jurisdiction, as to such jurisdiction,
shall be ineffective to the extent of such invalidity or unenforceability,
without rendering invalid or unenforceable the remaining terms and provisions of
the Transaction Documents or affecting the validity or enforceability of any of
the terms or provisions of the Transaction Documents in any other jurisdiction.
15.7 RELIANCE ON COUNSEL AND OTHER ADVISORS. Each party has consulted
such legal, financial, technical or other experts as it deems necessary or
desirable before entering into the Transaction Documents. Each party represents
and warrants that it has read, knows, understands and agrees with the terms and
conditions of the Transaction Documents.
15.8 EXHIBITS AND SCHEDULES. Each of the Exhibits and Schedules
referred to in the Transaction Documents and attached thereto is an integral
part of the Transaction Documents and is incorporated in the respective
Transaction Documents by this reference.
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15.9 RULES OF CONSTRUCTION. Unless the context otherwise requires:
(a) a term has the meaning assigned to it; (b) an accounting term not otherwise
defined has the meaning assigned to it in accordance with generally accepted
accounting principles; (c) references in the singular or to "him," "her," "it,"
"itself," or other like references, and references in the plural or the feminine
or masculine reference, as the case may be, shall also, when the context so
requires, be deemed to include the plural or singular, or the masculine or
feminine reference, as the case may be; (d) the use of the word "including"
shall mean including, without limitation, with regard to the items listed
thereafter; (e) provisions apply to successive events and transactions; (f)
references to Articles, Sections, Schedules and Exhibits in a Transaction
Document shall refer to Articles, Sections, Schedules and Exhibits of that
Transaction Document, unless otherwise specified; (g) the headings in the
Transaction Documents are for convenience and identification only and are not
intended to describe, interpret, define or limit the scope, extent, or intent of
the respective Transaction Documents or any provision thereof; (h) the
Transaction Documents shall be construed without regard to any presumption or
other rule requiring construction against the party that drafted and caused the
Transaction Documents to be drafted; (i) the use of the term "specific" in
relation to a subject means relating exclusively to that subject; and (j)
references to "commercially reasonable efforts" in the Transaction Documents
shall require the efforts that a prudent person desirous of achieving a
commercially reasonable result would use in similar circumstances to achieve a
result within a commercially reasonable time.
15.10 COUNTERPARTS. The Transaction Documents may be executed in
several counterparts, each of which shall be an original, but all of which shall
constitute one instrument.
SIGNATURE PAGE TO FOLLOW
- 40 -
IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement
to be executed as of the date first above written.
ATRIUM COMPANIES, INC.
By:
-------------------------------------------
Name: Xxxx X. Xxxx
Title: President and Chief Executive Officer
DANVID WINDOW COMPANY
By:
-------------------------------------------
Name: Xxxxxx Xxxxxxxxxxx
Title: President and Chief Executive Officer
- 41 -
DANVID WINDOW COMPANY
EXHIBIT A
DEFINITIONS
The following terms, as used in any Transaction Document, shall have the
following meanings unless otherwise specifically defined therein:
"AAPC" has the meaning set forth in the Recitals to the
Agreement.
"Accounts Payable" means all amounts owed by Seller to its
suppliers, vendors and other third parties that are reflected on the Financial
Statements or that have arisen since December 31, 2001.
"Accounts Receivable" means all notes and accounts receivable of
Seller that are reflected on the Financial Statements or that have arisen since
December 31, 2001.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition, "control" of a
Person means the power, directly or indirectly, either to (a) vote 10% or more
of the securities having ordinary voting power for the election of directors of
such Person or (b) direct or cause the direction of the management and policies
of such Person, whether by contract or otherwise.
"Agreement" means this Asset Purchase Agreement (including the
Exhibits and the Schedules), as the same from time to time may be amended,
supplemented or waived.
"Applicable Law" means all applicable provisions of all (a)
constitutions, treaties, statutes, laws (including the common law), rules,
regulations, ordinances, codes or orders of any Governmental Authority, and (b)
orders, decisions, injunctions, judgments, awards and decrees of, or agreements
with, any Governmental Authority.
"Assumed Contracts" means all rights of Seller under the
Contracts to which Seller is a party or by which Seller is bound and all other
Contracts to which Seller is a party or by which Seller is bound that are used
or held for use or that arise out of the operation or conduct of the Business.
"Assumed Liabilities" has the meaning set forth in Section 2.3
of the Agreement.
"Auction" has the meaning set forth in Section 10.2(c)(i) of the
Agreement.
"Bankruptcy Case" has the meaning set forth in the Recitals of
the Agreement.
"Bankruptcy Code" has the meaning set forth in the Recitals of
the Agreement.
"Bankruptcy Court" has the meaning set forth in the Recitals of
the Agreement.
"Benefit Plans" has the meaning set forth in Section 4.12 of the
Agreement.
- 42 -
"Bid Deadline" has the meaning set forth in Section 10.2(a) of
the Agreement.
"Bid" has the meaning set forth in Section 10.2(a) of the
Agreement.
"Bidding Procedures" has the meaning set forth in Section 10.2
of the Agreement.
"Bidding Procedures Motion" has the meaning set forth in Section
10.1(c) of the Agreement.
"Bidding Procedures Order" has the meaning set forth in Section
10.1(a) to the Agreement.
"Bidding Procedures Order Approval" has the meaning set forth in
Section 10.1(a) of the Agreement.
"Books and Records" means the books and records of Seller,
including manuals, price lists, mailing lists, lists of customers, sales and
promotional materials, purchasing materials, personnel records, manufacturing
and quality control records and procedures, research and development files, and
accounting records (regardless of the media in which stored), in each case that
are used or held for use or that arise primarily out of the conduct of the
operation of the Business, but specifically excluding Tax records.
"Break-Up Fee" has the meaning set forth in Section 10.2(d)(i)
of the Agreement.
"Business" means the Danvid Subsidiary of AAPC that manufactures
and sells aluminum and vinyl windows and doors for residential and
institutional/commercial construction.
"Buyer" has the meaning set forth in the preamble to the
Agreement.
"Cash Portion" has the meaning set forth in Section 3.2 of the
Agreement.
"Closing" has the meaning set forth in Section 3.1 of the
Agreement.
"Closing Date" has the meaning set forth in Section 3.1 of the
Agreement.
"Committee" means AAPC's and Danvid's Official Committee of
Unsecured Creditors in the Bankruptcy Case.
"Consent(s)" means any consent, approval, authorization, waiver,
permit, grant, franchise, concession, agreement, license, exemption, order or
variance of, registration, certificate, declaration or filing with, or report or
notice to, any Person, including, but not limited to, any Governmental
Authority.
"Contemplated Transactions" means the transactions contemplated
by the Agreement.
"Contracts" means all legally binding agreements, contracts,
commitments, orders, licenses, leases and other instruments and arrangements.
"Danvid" has the meaning set forth in the preamble to the
Agreement.
"Definitive Sale Documentation" has the meaning set forth in
Section 10.2(a) of the Agreement.
- 43 -
"Deposit" has the meaning set forth in Section 3.3 of the
Agreement.
"Disclosure Schedule" has the meaning set forth in Article 4 of
the Agreement.
"Effective Time" has the meaning set forth in Section 3.1 of the
Agreement.
"Environmental Laws" has the meaning set forth in Section 4.11
of the Agreement.
"Environmental Liabilities" shall mean any and all liabilities,
responsibilities, claims, suits, losses, costs (including remediation, removal,
response, abatement, clean-up, investigative, and/or monitoring costs and any
other related costs and expenses), damages, settlements, expenses, charges,
assessments, Liens, penalties, fines, prejudgment and post-judgment interest,
attorney fees and other legal fees (a) pursuant to any agreement, order, notice
of responsibility, directive (including directives embodied in Environmental
Laws), injunction, judgment or similar documents (including settlements) arising
out of or in connection with any Environmental Laws, or (b) pursuant to any
claim by a Governmental Authority or other Person for personal injury, property
damage, damage to natural resources, remediation, or similar costs or expenses
incurred or asserted by such Person pursuant to Applicable Law arising out of or
in connection with any Environmental Law or activity.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Excluded Assets" has the meaning set forth in Section 2.2 of
the Agreement.
"Excluded Intellectual Property" has the meaning set forth in
Section 2.2(a) of the Agreement.
"Excluded Liabilities" has the meaning set forth in Section 2.4
of the Agreement.
"Exhibits" means the Exhibits to the Agreement.
"Filing Date" has the meaning set forth in the Recitals of the
Agreement.
"Financial Statements" has the meaning set forth in Section 4.5
of the Agreement.
"Fixed Assets" means all machinery, equipment, furniture,
furnishings, tools, supplies, jigs, vehicles, telephones, computers, drawings
and other tangible personal property classified as fixed assets owned by Seller
and used or held for use in the Business.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including, without limitation, any governmental authority or
quasi-governmental agency, department, board, commission or instrumentality of
the United States, any state of the United States or any political subdivision
thereof, any tribunal or arbitrator(s) of competent jurisdiction and any
self-regulatory organization.
"Hazardous Materials" means any substance, material or waste
that is regulated by any state or local Governmental Authority or the U.S.
Government, including, without limitation, any material or substance that is (a)
defined as a "hazardous waste," "hazardous material," "hazardous substance,"
- 44 -
"extremely hazardous waste" or "restricted hazardous waste" under any provision
of any Applicable Law, (b) petroleum or a petroleum product, (c) asbestos,
radioactive material or polychlorinated biphenyls, (d) designated as a
"hazardous substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C.
Section 1251, et seq. (33 U.S.C. Section 1321), or listed pursuant to Section
307 of the Clean Water Act (33 U.S.C. Section 1317), (e) defined as a "hazardous
waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act,
42 U.S.C. Section 6901, et seq. (42 U.S.C. Section 6903), or (f) defined as a
"hazardous substance" pursuant to Section 101 of the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. Section 9601, et seq. (42
U.S.C. Section 9601).
"Income Tax" means any federal, state, local or foreign income
or franchise tax, including any interest, penalty, or addition thereto.
"Income Tax Return" means any Tax Return with respect to Income
Taxes.
"Intercompany Receivables" means intercompany accounts
receivables arising between the Business and the balance of AAPC's business from
the conduct of the Business prior to the Effective Time.
"Inventory" means all raw materials and supplies, work in
process, finished goods, packaging and other manufacturing supplies owned by
Seller as of the Closing Date that are used in connection with the Business and
are classified as "inventory" on the Financial Statements.
"IRS" means the Internal Revenue Service.
"Key Employee Retention Program" means the retention programs
regarding employees of Seller as approved by the Bankruptcy Court.
"Liability" means, with respect to any Person, any liability or
obligation of such Person of any kind, character or description, whether known
or unknown, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, secured or unsecured, joint or several, due or to become due,
vested or unvested, executory, determined, determinable or otherwise and whether
or not the same is required to be accrued on the financial statements of such
Person or is disclosed on any Schedule to the Agreement.
"Lien(s)" means any mortgage, pledge, assessment, security
interest, liens easement, license, option, covenant, condition, restriction,
levy, charge, claim, right of first refusal, right of first offer, right of use
or occupancy or other legal or equitable encumbrance affecting title or any
other interest in property, or other encumbrance of any kind or any claim of any
kind.
"Logo" has the meaning set forth in Section 9.4(a) of the
Agreement.
"Losses" means claims, losses, liabilities, damages,
deficiencies, costs and expenses, including without limitation, losses resulting
from the defense, settlement and/or compromise of a claim and/or demand and/or
assessment, reasonable attorneys, accountants and expert witnesses' fees, costs
and expenses of investigation, and the costs and expenses of recouping such
losses.
"Material Adverse Effect on the Business" means any material
adverse change in, or material adverse effect on, the Transferred Assets or the
Business taken as a whole.
"Material Adverse Effect on Buyer" has the meaning set forth in
Section 5.4 of the Agreement.
- 45 -
"Material Contract(s)" means all Contracts and Assumed Contracts
that are material to the operation or conduct of the Business.
"Name" has the meaning set forth in Section 9.4(d) of the
Agreement.
"Opening Bid" has the meaning set forth in Section 10.2(c)(i) of
the Agreement.
"Outside Date" has the meaning set forth in Section 13.1(a) of
the Agreement.
"Pension Plan" has the meaning set forth in Section 4.12 of the
Agreement.
"Permits" means any license, permit, qualification or
registration and any other authorization from Governmental Authorities.
"Permitted Encumbrances" means (a) Liens identified on Schedule
4.7; (b) statutory liens for current Taxes, assessments or governmental charges
or levies not yet due; and (c) easements, rights-of-way, zoning and similar
restrictions and other similar charges and encumbrances on the use of real
property and minor irregularities in the title thereto which do not (A) secure
obligations for the payment of money or (B) materially impair the value of such
property or the use thereof by Buyer.
"Person" means any natural person, firm, partnership,
association, corporation, company, limited liability company, trust, business
trust, Governmental Authority or other entity.
"Policies" means any and all insurance policies pertaining to
Transferred Assets, Excluded Assets, Assumed Liabilities, Excluded Liabilities
or otherwise related to the operation or conduct of the Business.
"Prior Confidentiality Agreement" has the meaning set forth in
Section 9.10(c) of the Agreement.
"Purchase Price" has the meaning set forth in Section 3.2 of the
Agreement.
"Qualified Bid" has the meaning set forth in Section 10.2(b) of
the Agreement.
"Qualified Bidder" has the meaning set forth in Section 10.2(a)
of the Agreement.
"Sale" has the meaning set forth in Section 10.2 of the
Agreement.
"Sale Hearing" has the meaning set forth in Section 10.1(b) of
the Agreement.
"Sale Order" has the meaning set forth in Section 10.1(b) of the
Agreement.
"Sale Order Approval" has the meaning set forth in Section
10.1(b) of the Agreement.
"Schedules" means the Schedules to the Agreement.
- 46 -
"Seller" has the meaning set forth in the preamble to the
Agreement.
"Seller's Knowledge" and "Knowledge of Seller" (or other words
to any such effect) mean the actual knowledge of one or more of the following
individuals: Xxxxxx Xxxxxxxxxxx, Xxxxxxxx X. Xxxxxxxxx, Xxxxxx Xxxxxxxx, Xxxx
Xxxxx, Xxx Xxxxxx and Xxxxx XxXxxxx; and, with respect to the representations
and warranties contained in Section 4.25, Xxxxxxx XxXxxx and Xxxxxx Xxxxx.
"Subsidiary" means and refers to any corporation, association or
other business entity of which more than fifty (50) percent of the issued and
outstanding shares of capital stock or equity interests is owned or controlled,
directly or indirectly, by Seller or Buyer, as the case may be, and in which
Seller or Buyer, as the case may be, has the power, directly or indirectly, to
elect a majority of the directors or other governing body.
"Tax Code" means the Internal Revenue Code of 1986, as amended.
"Tax Data" has the meaning set forth in Section 9.9(a) of the
Agreement.
"Tax Documentation" has the meaning set forth in Section 9.9(a)
of the Agreement.
"Taxes" in the plural and "Tax" in the singular means all
Federal, state, local and foreign taxes, levies, fees, duties, required deposits
or assessments, including income, employment (including Social Security,
payroll, workers' compensation, unemployment, withholding and state disability),
excise, property, franchise, gross income, gross receipts, value added,
transfer, gains, profits, net worth, estimated, real or personal property, ad
valorem, sales, use, customs, duties, and other taxes, fees, assessments or
charges of any kind, together with all interest, additions to tax and penalties
relating thereto, and including liability as a successor or transferee in
respect of Taxes.
"Tax Return" means any return, report, declaration, form, claim
for refund or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Termination Date" has the meaning set forth in Section 13.1 of
the Agreement.
"Transaction Documents" means the Agreement and the other
documents and instruments contemplated by the Agreement to be delivered at the
Closing.
"Transfer Taxes" has the meaning set forth in Section 9.7(a) of
the Agreement.
"Transferee Employees" has the meaning set forth in Section 6.1
of the Agreement.
"Transferred Assets" has the meaning set forth in Section 2.1 of
the Agreement.
"Transferred Facilities" means the offices and facilities used
in whole or in part, by the Business as of the date of the Agreement that are
the subject of real property leases included on Schedule 2.1(c).
"Transferred Intellectual Property" means all patents, patent
applications, registered and unregistered copyrights, copyright applications,
registered and unregistered trademarks,
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trademark applications, trade names, business names, inventions, trade secrets,
research and development data and know-how, assignable computer software or
other intellectual property, in each case used or held for use in the conduct of
the Business.
"U.S. Government" means the United States government, including
any and all departments, agencies, commissions, branches and instrumentalities
thereof, as well as any corporations owned or chartered by the United States
government.
"Welfare Plan" has the meaning set forth in Section 4.12 of the
Agreement.
"Window Period" has the meaning set forth in Section 9.4(b) of
the Agreement.
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DANVID WINDOW COMPANY
EXHIBIT C
BIDDING PROCEDURES MOTION
AND
FORM OF BIDDING PROCEDURES ORDER
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DANVID WINDOW COMPANY
EXHIBIT D
SALE MOTION AND FORM OF SALE ORDER
See attachments.
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