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Exhibit 2
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ASSET PURCHASE AGREEMENT
AMONG
METATEC ACQUISITION CORP.
("METATEC ACQUISITION")
METATEC INTERNATIONAL B.V.
("METATEC INTERNATIONAL")
METATEC CORPORATION
("METATEC")
AND
IMATION CORP.
("IMATION")
IMATION INTERNATIONAL B.V.
("INTERNATIONAL")
IMATION ENTERPRISES CORP.
("ENTERPRISES")
DATED AS OF JULY 29, 1998
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS..................................................................................1
1.1 Definitions..................................................................................1
1.2 Interpretation...............................................................................9
ARTICLE II SALE AND PURCHASE OF ASSETS;
ASSUMPTION OF ASSUMED OBLIGATIONS............................................................9
2.1 Purchased Assets.............................................................................9
2.2 Assignment of Contracts and Permits.........................................................11
2.3 Excluded Assets.............................................................................13
2.4 Assumed Obligations.........................................................................14
2.5 No Other Liabilities Assumed................................................................15
ARTICLE III PURCHASE PRICE AND PAYMENT..................................................................16
3.1 Payment of Purchase Price...................................................................16
3.2 Adjustment to Purchase Price................................................................17
3.4 Allocation of Consideration.................................................................19
3.5 Reassignment of Certain Accounts Receivable.................................................19
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE IMATION
COMPANIES...................................................................................20
4.1 Due Incorporation...........................................................................20
4.2 Due Authorization...........................................................................20
4.3 No Conflicts................................................................................20
4.4 Financial Statements. .....................................................................21
4.5 Title to Properties.........................................................................21
4.6 Undisclosed Liabilities.....................................................................22
4.7 Absence of Certain Changes..................................................................22
4.8 Consents and Approvals......................................................................23
4.9 Contracts and Leases........................................................................23
4.10 Inventory...................................................................................23
4.11 Accounts Receivable.........................................................................23
4.12 Permits.....................................................................................23
4.13 Employee Benefit Plans and Employment Agreements............................................24
4.14 Employment and Labor Matters................................................................24
4.15 Taxes.......................................................................................25
4.16 Compliance with Laws........................................................................25
4.17 Environmental Matters.......................................................................25
4.18 Litigation..................................................................................26
4.19 Brokers.....................................................................................26
4.20 Certain Intellectual Property...............................................................26
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE METATEC
COMPANIES...................................................................................27
5.1 Due Incorporation...........................................................................27
5.2 Due Authorization...........................................................................27
5.3 Consents and Approvals; No Conflicts........................................................28
5.4 Litigation..................................................................................29
5.5 Brokers.....................................................................................29
ARTICLE VI COVENANTS OF THE IMATION COMPANIES..........................................................29
6.1 Conduct of Business.........................................................................29
6.2 Access......................................................................................31
6.3 HSR Act Notification; Other Governmental Consents...........................................31
6.4 Tax Matters.................................................................................31
6.5 Financial Statements........................................................................32
6.6 Confidentiality.............................................................................32
6.7 Exclusive Rights............................................................................32
6.8 Reasonable Efforts..........................................................................32
6.9 Collection of Accounts Receivable...........................................................33
ARTICLE VII COVENANTS OF THE METATEC COMPANIES..........................................................33
7.1 HSR Act Notification; Other Governmental Consents...........................................33
7.2 Tax Matters.................................................................................33
7.3 Access; Retention of Records................................................................33
7.4 Confidentiality.............................................................................34
7.5 Duty Drawback...............................................................................34
7.6 Reasonable Efforts..........................................................................34
7.7 Financial Statements........................................................................34
ARTICLE VIII CONDITIONS PRECEDENT TO OBLIGATIONS
OF THE METATEC COMPANIES....................................................................35
8.1 Warranties True as of Both Present Date and Closing Date....................................35
8.2 Compliance with Agreements and Covenants....................................................35
8.3 Xxxx-Xxxxx-Xxxxxx...........................................................................35
8.4 Consents and Approvals......................................................................35
8.5 Related Agreements..........................................................................35
8.6 Actions or Proceeding.......................................................................36
8.7 No Material Adverse Change..................................................................36
8.8 Financial Statements........................................................................36
8.9 Works Council...............................................................................36
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ARTICLE IX CONDITIONS PRECEDENT TO OBLIGATIONS
OF THE IMATION COMPANIES....................................................................36
9.1 Warranties True as of Both Present Date and Closing Date....................................36
9.2 Compliance with Agreements and Covenants....................................................36
9.3 Xxxx-Xxxxx-Xxxxxx...........................................................................37
9.4 Actions or Proceeding.......................................................................37
9.5 Related Agreements..........................................................................37
9.6 Works Council...............................................................................37
ARTICLE X EMPLOYEES AND BENEFIT PLANS.................................................................37
10.1 Offer of Employment.........................................................................37
10.2 Seniority and Certain Payables..............................................................38
10.3 401(k) Plan.................................................................................38
10.4 No Third Party Beneficiaries................................................................38
ARTICLE XI CLOSING.....................................................................................38
11.1 Closing.....................................................................................38
11.2 Deliveries by the Imation Companies.........................................................39
11.3 Deliveries by Purchasers....................................................................40
ARTICLE XII TERMINATION.................................................................................41
12.1 Termination.................................................................................41
12.2 Effect of Termination.......................................................................41
ARTICLE XIII INDEMNIFICATION.............................................................................42
13.1 Survival; Remedy for Breach.................................................................42
13.2 Indemnification by the Imation Companies ...................................................42
13.3 Indemnification by the Metatec Companies....................................................43
13.4 Claims......................................................................................44
13.5 Notice of Third Party Claims; Assumption of Defense.........................................44
13.6 Settlement or Compromise....................................................................45
13.7 Losses in Connection with Third Party Claims................................................45
ARTICLE XIV NON-COMPETITION.............................................................................45
14.1 Non-Competition.............................................................................45
14.2 Equitable Relief............................................................................46
ARTICLE XV MISCELLANEOUS...............................................................................46
15.1 Disclosure Schedules........................................................................46
15.2 Expenses....................................................................................46
15.3 Amendment...................................................................................47
15.4 Notices.....................................................................................47
15.5 Payments in Dollars.........................................................................48
15.6 Waivers.....................................................................................48
15.7 Bulk Sales..................................................................................48
15.8 Successors and Assigns......................................................................48
15.9 No Third Party Beneficiaries................................................................49
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15.10 Publicity...................................................................................49
15.11 Further Assurances..........................................................................49
15.12 Severability................................................................................49
15.13 Remedies Cumulative.........................................................................49
15.14 Entire Understanding........................................................................49
15.15 Applicable Law..............................................................................50
15.16 Waiver of Jury Trial........................................................................50
15.17 Counterparts................................................................................50
SCHEDULES
Schedule 1.1(a) Knowledge
Schedule 1.1(b) Transition Services Agreement
Schedule 2.1(a) Equipment
Schedule 2.1(b) Vehicles
Schedule 2.2(a) Real Property Leases
Schedule 2.2(b) Personal Property Leases
Schedule 2.2(e) Other Contracts
Schedule 2.2(g) Transferred Permits
Schedule 2.3(b) Excluded Contracts
Schedule 2.3(n) Other Excluded Assets
Schedule 3.4 Preliminary Purchase Price Allocation
Schedule 4.3 Seller Conflicts
Schedule 4.4 Financial Statements
Schedule 4.5 Liens
Schedule 4.7 Absence of Certain Changes
Schedule 4.8 Consents and Approvals
Schedule 4.9 Certain Contracts and Leases
Schedule 4.10 Inventory Exceptions
Schedule 4.11 Accounts Receivable Exceptions
Schedule 4.14(a) Employee Matters
Schedule 4.14(b) Contract Employees
Schedule 4.14(c) Breda Affected Employees
Schedule 4.17 Environmental Matters
Schedule 4.18 Litigation
Schedule 5.3(a) Metatec Company Consents
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Schedule 5.3(b) Metatec Company Conflicts
Schedule 6.1 Conduct of Business
Schedule 8.4 Required Consents and Approvals
Schedule 8.5 Terms of Breda Lease
Schedule 10.1(a) Selected Menomonie Employees
Schedule 10.1(b) Benefits
Schedule 10.1(c) Severance Benefits
EXHIBITS
Exhibit A Form of Assignment and Assumption Agreement
Exhibit B Form of International Asset Transfer Agreement
Exhibit C Form of Note
Exhibit D Form of License Agreement
Exhibit E Form of Opinion of Counsel for Imation Companies
Exhibit F Form of Opinion of Van Benthem & Keulen
Exhibit G Form of Opinion of Counsel for the Metatec Companies
Exhibit H Form of Opinion of Trenite Van Doorne
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is made as of the 29th day of July 1998,
by and among METATEC ACQUISITION CORP., an Ohio corporation ("Metatec
Acquisition"), METATEC INTERNATIONAL B.V., a Netherlands corporation ("Metatec
International"), METATEC CORPORATION, a Florida corporation ("Metatec"), IMATION
CORP., a Delaware corporation ("Imation"), IMATION INTERNATIONAL B.V., a
Netherlands corporation ("International"), and IMATION ENTERPRISES CORP., a
Delaware corporation ("Enterprises"). Certain capitalized terms used herein are
defined in Article I.
W I T N E S S E T H:
WHEREAS, Purchasers desires to purchase from the Imation Companies and
the Imation Companies desire to sell to Purchasers all of the Purchased Assets
(as hereinafter defined), and Purchasers are willing to assume all of the
Assumed Obligations (as hereinafter defined), all upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and the mutual
warranties, representations, covenants and agreements herein contained, the
parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions.
"Accounts Receivable" shall mean all accounts receivable, trade
receivables, notes receivable and other receivables, which in any case are
payable as a result of goods sold or services provided by the Imation Companies
exclusively as part of the Business.
"Acquisition Proposal" shall have the meaning provided in Section 6.9.
"Affected Employees" shall have the meaning provided in Section 4.14.
"Affiliate" shall mean, with respect to any specified Person, any other
Person which, directly or indirectly, owns or controls, is under common
ownership or control with, or is owned or controlled by such specified Person. A
Person shall be deemed to "own" another Person if it owns more than 50% of the
capital stock or other equity interest of such other Person.
"Agreement" shall mean this Asset Purchase Agreement, including all
exhibits and schedules hereto, as it may be amended, supplemented or modified
from time to time in accordance with its terms.
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"Assets" shall mean the Purchased Assets and the Leased Assets.
"Assignment and Assumption Agreement" shall mean an assignment and
assumption agreement and xxxx of sale between Metatec Acquisition and Sellers to
be dated the Closing Date, in substantially the form attached hereto as
Exhibit A.
"Assumed Obligations" shall have the meaning provided in Section 2.4.
"Breda Facility" shall mean the facility leased by International in
Breda, The Netherlands, for use in the Business.
"Bulk Sale Laws" shall mean the Laws of any jurisdiction relating to
bulk sales which are applicable to the sale of the Purchased Assets by Sellers
pursuant to this Agreement.
"Business" shall mean the CD-ROM Services business previously and
currently conducted by the Imation Companies. The term "Business" excludes the
operation of the Excluded Assets and all other businesses of the Imation
Companies, including but not limited to any business of the Imation Companies
conducted under secure military contracts.
"Business Day" shall mean any day of the year other than (i) any
Saturday or Sunday or (ii) any other day on which banks located in Minneapolis,
Minnesota generally are closed for business.
"Business Financial Statements" shall mean the unaudited summary of pro
forma balance sheet information of the Business as of December 31, 1996 and 1997
and March 31, 1998 and the pro forma income statements of the Business for the
years ended December 31, 1996 and 1997 and for the quarter ended March 31, 1998.
"Cash" shall mean all cash, certificates of deposit, bank deposits and
other cash equivalents, together with all accrued but unpaid interest thereon.
"Cause" shall have the meaning provided on Schedule 10.1(b).
"Closing" shall mean the consummation of the transactions contemplated
herein in accordance with Article XI.
"Closing Date" shall mean the date on which the Closing occurs or is to
occur.
"Closing Date Deficiency" shall mean the amount by which the Net
Working Capital, calculated based on the Closing Date Working Capital Statement,
is less than $12,800,000. If the Net Working Capital is not less than
$12,800,000, there shall be no Closing Date Deficiency.
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"Closing Date Excess" shall mean the amount by which the Net Working
Capital, calculated based on the Closing Date Working Capital Statement, exceeds
$12,800,000. If the Net Working Capital does not exceed $12,800,000, there shall
be no Closing Date Excess.
"Closing Date Working Capital Statement" shall have the meaning
provided in Section 3.2(a).
"Closing Documents" shall have the meaning provided in Section 13.1.
"Code" shall mean the United States Internal Revenue Code of 1986, as
amended.
"Confidential Information" shall mean all Information and Records and
Intellectual Property that are not and have not become ascertainable or
obtainable from public or published information.
"Confidentiality Agreement" shall mean the Confidentiality Agreement
dated February 20, 1998 between Metatec and Xxxxxx Xxxxxxx & Company LLC, as
agent for Imation.
"Contested Adjustments" shall have the meaning provided in
Section 3.2(b).
"Contract" shall mean any contract, lease, commitment, understanding,
sales order, purchase order, agreement, indenture, mortgage, note, bond, right,
warrant, instrument, plan, permit, license or Customer Contract, whether written
or verbal, which is intended or purports to be binding and enforceable.
"Contract Employees" shall have the meaning provided in
Section 4.14(b).
"Credit Agreement" shall mean the Credit Agreement, dated as of July 1,
1996, as modified and supplemented, among Imation, certain Lenders, Issuing
Banks, Swing Line Lenders and the Administrative Agent (as such terms are
defined therein) and any and all agreements relating thereto.
"Customer Contracts" shall have the meaning provided in Section 2.2(c).
"Default" shall mean a breach of any obligation under any Real Property
Lease or any Contract by any of the Imation Companies that would give the
counterparty thereto the right to (a) terminate such Real Property Lease or
Contract or (b) accelerate all payments due under such Real Property Lease or
Contract.
"Disclosure Schedules" shall mean the schedules hereto with respect to
the representations and warranties of the Imation Companies set forth in Article
IV, as updated in accordance with Section 15.1.
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"Dollars" or numbers preceded by the symbol "$" shall mean amounts in
United States Dollars.
"DVD-ROM" shall mean digital versatile disk - read only memory.
"Enterprises" shall have the meaning provided in the Preamble.
"Environmental Law" shall mean any Law relating to the protection of
the environment, natural resources or pollution and any Law which relates to or
otherwise imposes liability or standards of conduct concerning the manufacture,
transportation, storage, handling, disposal, discharges, emissions, releases or
threatened releases of odors or any pollutants, contaminants or hazardous or
toxic wastes, substances or materials, whether as matter or energy, into ambient
air, water or land, or otherwise relating to the manufacture, processing,
generation, distribution, use, treatment, storage, disposal, cleanup, transport
or handling of pollutants, contaminants or hazardous or toxic wastes, substances
or materials, including without limitation the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, the Superfund
Amendments and Reauthorization Act of 1986, as amended, the Resource
Conservation and Recovery Act of 1976, as amended, the Toxic Substances Control
Act of 1976, as amended, the Federal Water Pollution Control Act of 1976, as
amended, the Clean Water Act of 1977, as amended, any so-called "Superfund" or
"Superlien" Law (including those already referenced in this definition) and any
other Law having a similar subject matter.
"Environmental Permit" shall mean any Permit required by or pursuant to
any applicable Environmental Law.
"Equipment" shall have the meaning provided in Section 2.1(a).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Excluded Assets" shall have the meaning provided in Section 2.3.
"Excluded Contracts" shall have the meaning provided in Section 2.3(b).
"Excluded Obligations" shall have the meaning provided in Section 2.5.
"Facilities" shall mean the Breda Facility, the Fremont Facility and
the Menomonie Facility.
"Fremont Employees" shall have the meaning provided in Section 10.1.
"Fremont Facility" shall mean the facilities leased by Enterprises in
Fremont, California for use in the Business.
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"GAAP" shall mean U.S. generally accepted accounting principles, as
applied by the Imation Companies consistent with past practices, at the time in
effect.
"Governmental Authority" shall mean the government of the United States
or any foreign country or any state or political subdivision thereof and any
entity, body or authority exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
"Hazardous Substance" shall mean any material or substance which
(i) constitutes a hazardous substance, toxic substance or pollutant (as such
terms are defined by or pursuant to any Environmental Law) or (ii) is regulated
or controlled as a hazardous substance, toxic substance, pollutant or other
regulated or controlled material, substance or matter pursuant to any
Environmental Law.
"Hired Employee" shall have the meaning provided in Section 10.1.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"Imation" shall have the meaning provided in the Preamble.
"Imation Companies" shall mean Imation, Enterprises and International,
collectively.
"Imation Company" shall mean Imation, Enterprises or International, as
applicable.
"Imation Employees" shall have the meaning provided in Section 10.3.
"Indemnified Person" shall mean the Person or Persons entitled to, or
claiming a right to, indemnification under Article XIII.
"Indemnifying Person" shall mean the Person or Persons claimed by the
Indemnified Person to be obligated to provide indemnification under Article
XIII.
"Independent Accountants" shall have the meaning provided in
Section 3.2(b).
"Information and Records" shall have the meaning provided in
Section 2.1(d).
"Intellectual Property" shall mean all United States and foreign
patents (including continuations, continuations-in-part, reissues and
re-examinations thereof) and patent applications; registered and unregistered
trade names, trademarks, service names and service marks (and applications for
registration of the same) and all goodwill associated therewith; copyrights and
copyright registrations (and applications for the same); trade secrets, computer
data (including formulations and analyses), computer software (in source code
and object code form) and all related
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programming, user and systems documentation; inventions, processes and designs
(whether or not patentable or reduced to practice); know-how and formulae; and
all other intangible assets, properties and rights.
"Intellectual Property Licenses" shall mean all agreements for the
license to or by any of the Imation Companies of any Intellectual Property
relating exclusively to the Business.
"International" shall have the meaning provided in the Preamble.
"International Asset Transfer Agreement" shall mean the asset transfer
agreement between Metatec International and International, in substantially the
form attached hereto as Exhibit B.
"Inventory" shall have the meaning provided in Section 2.1(c).
"Law" shall mean any law (including common law), statute, regulation,
ordinance, rule, order, writ, injunction, ruling, decree, judgment, consent
decree, settlement agreement or governmental requirement enacted, promulgated,
entered into, agreed or imposed by any Governmental Authority.
"Leased Assets" shall mean all assets leased to any of the Imation
Companies pursuant to any of the Real Property Leases or the Personal Property
Leases.
"Leased Real Property" shall have the meaning provided in
Section 4.17(a).
"License Agreement" shall mean a license agreement between Metatec and
Imation to be dated the Closing Date for the use of certain Intellectual
Property, in substantially the form attached hereto as Exhibit D.
"Licensed Software" shall mean all computer software and all related
programming, user and systems documentation (which documentation is in the
possession of the Imation Companies) licensed to one or more of the Imation
Companies that is listed on Schedule 2.2(e).
"Liens" shall mean mortgages, liens, charges, restrictions, pledges,
security interests, options, leases or subleases, claims, rights of any
third-party, easements, encroachments or encumbrances. Notwithstanding the
foregoing, the term "Liens" shall not include any of the following: (a)
mechanics', carriers', workers', suppliers' and other similar liens arising in
the ordinary course of business and consistent with past practice for any amount
the payment of which is not delinquent or in dispute; (b) zoning laws that do
not impair the present or anticipated use of the property subject thereto; and
(c) liens for current Taxes not yet due and payable.
"Loss" or "Losses" shall mean any and all liabilities, losses, costs,
claims, damages (excluding, except as otherwise provided in Section 13.7,
punitive damages and claims for
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lost profits), penalties and expenses (including without limitation reasonable
attorneys' fees and expenses and costs of investigation and litigation).
"Material Adverse Change" shall mean a change in the business,
operations or condition (financial or otherwise) of the Business that is
material and adverse.
"Material Adverse Effect" shall mean an effect on the business,
operations or condition (financial or otherwise) of the Business that is
material and adverse.
"Menomonie Facility" shall mean the facilities leased by Imation in
Menomonie, Wisconsin, and Chippewa Falls, Wisconsin for use in the Business.
"Metatec" shall have the meaning provided in the Preamble.
"Metatec Acquisition" shall have the meaning provided in the Preamble.
"Metatec Companies" shall mean Metatec, Metatec Acquisition and Metatec
International.
"Metatec Company" shall mean Metatec, Metatec Acquisition or Metatec
International, as applicable.
"Metatec International" shall have the meaning provided in the
Preamble.
"Net Working Capital" shall mean the amount by which the Working
Capital Assets exceed the book value of the current portion of the Assumed
Obligations as set forth on the Closing Date Working Capital Statement.
"Note" shall mean the Promissory Note in substantially the form
attached hereto as Exhibit C.
"Other Contracts" shall have the meaning provided in Section 2.2(e).
"Owned Software" shall have the meaning provided in Section 2.1(g).
"Permits" shall mean all consents, orders, registrations, permits,
tariffs, authorizations, licenses, certificates, variances, interim permits,
approvals, franchises and rights under any Law or otherwise required by or
obtained from any Governmental Authority and any applications for the foregoing.
"Person" shall mean any individual, corporation, proprietorship, firm,
partnership, limited partnership, limited liability partnership, limited
liability company, trust, association or other entity.
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"Personal Property Leases" shall have the meaning provided in
Section 2.2(b).
"Purchase Price" shall have the meaning provided in Section 3.1.
"Purchased Assets" shall have the meaning provided in Section 2.1.
"Purchased Contracts and Permits" shall have the meaning provided in
Section 2.2.
"Purchasers" shall mean Metatec Acquisition and Metatec International.
"Purchasers' Accountants" shall mean the accounting firm of Deloitte &
Touche, L.L.P.
"Purchaser's 401(k) Plan" shall have the meaning provided in
Section 10.3.
"Real Property Leases" shall have the meaning provided in
Section 2.2(a).
"Related Agreement" shall mean any Contract which is or is to be
entered into at the Closing or otherwise pursuant to or in connection with this
Agreement, including, without limitation, the International Asset Transfer
Agreement. The Related Agreements executed by a specified Person shall be
referred to as "such Person's Related Agreements," "its Related Agreements" or
another similar expression.
"Selected Menomonie Employees" shall have the meaning provided in
Section 10.1.
"Seller" shall mean Imation or Enterprises, as applicable.
"Sellers" shall mean Imation and Enterprises.
"Sellers' Accountants" shall mean the accounting firm of
PricewaterhouseCoopers L.L.P.
"Specified Agreement" shall mean the Assignment and Assumption
Agreement, the International Asset Transfer Agreement or the Note, as
applicable.
"Specified Agreements" shall mean the Assignment and Assumption
Agreement, the International Asset Transfer Agreement and the Note.
"Tax Return" shall mean any report, return or other information
required to be supplied to a Governmental Authority in connection with any
Taxes.
"Taxes" shall mean all taxes, charges, fees, duties (including customs
duties), levies or other assessments, including income, gross receipts, net
proceeds, ad valorem, turnover, real and personal property (tangible and
intangible), sales, use, franchise, excise, value added, stamp, leasing, lease,
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user, transfer, fuel, excess profits, occupational, interest equalization,
windfall profits, license, payroll, environmental, capital stock, disability,
severance, employee's income withholding, other withholding, unemployment and
Social Security taxes, which are imposed by any Governmental Authority, and such
term shall include any interest, penalties or additions to tax attributable
thereto, whether or not disputed.
"to the knowledge" of an Imation Company or the Imation Companies or
"knowledge", when used in reference to any Imation Company, shall mean the
actual knowledge of the Persons listed on Schedule 1.1(a), acquired in the
ordinary course and without any special investigation or inquiry, or acquired in
connection with the negotiation, preparation, execution or delivery of this
Agreement or the International Asset Transfer Agreement, without any other
special investigation or inquiry, as applicable.
"to the knowledge" of a Metatec Company or the Metatec Companies or
"knowledge", when used in reference to any Metatec Company, shall mean the
actual knowledge of Xxxxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxxx or Xxxx Xxxx,
acquired in the ordinary course and without any special investigation or
inquiry, or acquired in connection with the negotiation, preparation, execution
or delivery of this Agreement or the International Asset Transfer Agreement,
without any other special investigation or inquiry, as applicable.
"Transferred Permits" shall have the meaning provided in
Section 2.2(f).
"Transition Services Agreement" shall mean a transition services
agreement between the appropriate Metatec Companies and Imation Companies and
their respective Affiliates to be dated the Closing Date, which agreement shall
include, amongst other terms and conditions, the terms and conditions consistent
with those set forth on Schedule 1.1(b).
"Vehicles" shall have the meaning provided in Section 2.1(b).
"Working Capital Assets" shall mean the sum of the book values (as
determined in accordance with U.S. generally accepted accounting principles
consistently applied pursuant to the historical accounting practices of the
Imation Companies except for packaging, factory supplies, factory spare parts
and raw materials that are transferred on the Closing Date which will be valued
based upon actual quantities on hand and the actual or estimated purchase price
thereof as of the Closing Date, and except as otherwise provided below) of the
following Purchased Assets as of the close of business on the day prior to the
Closing Date (as shown on the Closing Date Working Capital Statement): Accounts
Receivable (not net of any reserve for doubtful accounts); prepaid expenses
which will benefit Purchasers following the Closing in the ordinary course of
the operation of the Business; deposits, to the extent useable by Purchasers
following the Closing in the ordinary course of Business; and Inventory (to the
extent usable in the operation of the Business in the ordinary course).
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1.2 Interpretation. The headings preceding the text of Articles and
Sections included in this Agreement and the headings to Schedules attached to
this Agreement are for convenience only and shall not be deemed part of this
Agreement or be given any effect in interpreting this Agreement. The use of the
masculine, feminine or neuter gender or the singular or plural form of words
herein shall not limit any provision of this Agreement.
ARTICLE II
SALE AND PURCHASE OF ASSETS;
ASSUMPTION OF ASSUMED OBLIGATIONS
2.1 Purchased Assets. Subject to the terms and conditions of this
Agreement, at and as of the Closing, the Imation Companies shall sell, assign,
convey, transfer and deliver to Purchasers all of the Imation Companies' right,
title and interest in and to, and Purchasers shall purchase, acquire and take
assignment and delivery of all of the Imation Companies' right, title and
interest in and to, the following assets, but in each case excluding the
Excluded Assets:
(a) Equipment. All machinery, equipment, fixed assets,
furniture, tools, spare parts, mastering equipment, manufacturing
machinery and equipment, production machinery and equipment, fulfilment
and distribution machinery and equipment, maintenance equipment,
monitoring and test equipment, materials, computers, printers, servers
and other items of personal property of every kind and description that
are (i) located at the Menomonie Facility and used or held for use
exclusively in, or related exclusively to, or material to, the
Business, (ii) located at the Fremont Facility or (iii) located at the
Breda Facility, together with (x) the DVD-ROM equipment located at the
Facilities and (y) the leasehold improvements owned by the Imation
Companies located at the Fremont Facility and the Breda Facility, but
excluding in all cases the Vehicles and Inventory, and including
without limitation the Equipment set forth on Schedule 2.1(a)
(collectively, the "Equipment");
(b) Vehicles. All automobiles, service trucks, delivery
trucks, tractors, trailers and other vehicles that are (i) located at
the Menomonie Facility and used or held for use exclusively in, or
related exclusively to, or material to, the Business, (ii) located at
the Fremont Facility or (iii) located at the Breda Facility
(collectively, the "Vehicles"), including, without limitation, the
Vehicles set forth on Schedule 2.1(b);
(c) Inventory. All (i) raw materials, factory spare parts and
factory supplies inventories located at the Fremont Facility and the
Breda Facility (provided that factory spare parts located at the Breda
Facility shall not exceed $100,000 in value), (ii) raw materials
inventories located at the Menomonie Facility that are used or held for
use exclusively in, or related exclusively to, or material to, the
Business, (iii) customer specific packaging inventories located at the
Fremont Facility and the Breda Facility having usage in the six month
period immediately preceding the Closing Date, (iv) customer specific
packaging
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inventories having usage in the six month period immediately preceding
the Closing Date that are located at the Menomonie Facility and that
are used or held for use exclusively in, or related exclusively to, or
material to, the Business, (v) finished goods and packaging inventories
identified as active with customers that are located at the Fremont
Facility and the Breda Facility and (vi) finished goods and packaging
inventories identified as active with customers that are located at the
Menomonie Facility and that are used or held for use exclusively in, or
related exclusively to, or material to, the Business, including in all
such cases, to the extent not inconsistent with the foregoing
subparagraphs (i)-(vi), the inventory set forth in the computer disk or
other electronic media delivered to Purchasers on the date of this
Agreement (collectively, the "Inventory").
(d) Information and Records. Copies or originals of the
following papers and records in the care, custody or control of the
Imation Companies that are used or held for use exclusively in, or
related exclusively to, or material to, the Business (other than
Intellectual Property, Tax and labor relations records): books,
records, files, databases, plans, specifications, technical
information, confidential information (to the extent permitted),
operating manuals, computer hardware documentation (which documentation
is in the possession of the Imation Companies), copies of business
plans and reports, price lists, supplier lists, promotional materials,
advertising copy and data, marketing research and information,
competitive analyses, sales records, service records, customer lists
and files, other customer information, plans and designs of fixtures
and equipment, monitoring and test records and all other proprietary
information, including financial and accounting records, work papers
and files, personnel records and employee benefits and compensation
plans and records exclusively involving Affected Employees and all
other such files, papers and records which are used or held for use
exclusively in or related exclusively to, or material to, the operation
of the Business (collectively, the "Information and Records");
(e) Other Intangibles. All customer relationships and
goodwill, if any, used exclusively in, related exclusively to, or
arising solely in conjunction with, the Business;
(f) Accounts Receivable. All Accounts Receivable;
(g) Computer Software. All computer software (including,
without limitation, source code) and all related programming, user and
systems documentation (which documentation is in the possession of the
Imation Companies) owned by the Imation Companies that relates
exclusively to the Assets or is used or held for use exclusively in, or
relates exclusively to, the Business (the "Owned Software"); and
(h) Other Assets. All of the following other assets of the
Imation Companies that are used or held for use exclusively in the
Business: prepaid expenses and lease, utility and similar deposits of
the Imation Companies, and any and all other deposits, prepayments,
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guaranties, letters of credit, bonds, claims and rights of or for the
benefit of the Imation Companies that are used or held for use
exclusively in, or related solely to, the Business.
All of the foregoing assets described in this Section 2.1, together with the
Purchased Contracts and Permits, are referred to herein collectively as the
"Purchased Assets."
2.2 Assignment of Contracts and Permits. Subject to the terms and
conditions of this Agreement, at and as of the Closing Date, the Imation
Companies shall assign and transfer to Purchasers all of the Imation Companies'
right, title and interest in and to, and Purchasers shall take assignment of,
(i) all of the Contracts (including, without limitation, portions of customer
contracts, purchase orders and other Contracts for the sale or provision by the
Imation Companies of goods and/or services) to which any Imation Company is a
party which relate solely to the Business and which are assignable and (ii) all
of the Permits of the Imation Companies which relate solely to the Business and
which are transferable, including the following:
(a) Real Property Leases. All rights and claims under leases
and subleases of real property and improvements listed on Schedule
2.2(a), together with all easements, rights-of-way and other
appurtenant rights and privileges relating thereto (collectively, the
"Real Property Leases");
(b) Personal Property Leases. All rights and claims under the
leases of equipment, vehicles or other tangible personal property that
are (i) used at the Menomonie Facility and relate exclusively to or are
material to the Business, (ii) used at the Fremont Facility or (iii)
used at the Breda Facility (collectively, the "Personal Property
Leases"), including, without limitation, the Personal Property Leases
set forth on Schedule 2.2(b);
(c) Customer Contracts. All customer contracts, purchase
orders and other Contracts for the sale or provision by the Imation
Companies of goods and/or services or pursuant to which the Imation
Companies are granted any franchise or license to provide goods and/or
services that relate exclusively to the Business (collectively, the
"Customer Contracts");
(d) Purchase Contracts. All purchase and sales orders,
quotations, executory commitments and other Contracts for the purchase
by the Imation Companies of goods, materials and/or services that
relate exclusively to the Business;
(e) Other Contracts. All other Contracts of the Imation
Companies that relate exclusively to the Business including, without
limitation, the Licensed Software listed on Schedule 2.2(e)
(collectively, the "Other Contracts");
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(f) Telephone Numbers. All of Sellers' telephone numbers used
at the Fremont Facility, the Breda Facility and Sellers' toll-free
telephone number used at the Menomonie Facility; and
(g) Transferred Permits. All Permits that relate solely to the
Business and which are transferable (collectively, the "Transferred
Permits"), including, without limitation, the Transferred Permits set
forth on Schedule 2.2(g).
All of the foregoing are referred to herein collectively as the "Purchased
Contracts and Permits." Anything in this Agreement to the contrary
notwithstanding, this Agreement shall not constitute an agreement to assign any
Contract or Permit or any claim or right or any benefit or obligation thereunder
or resulting therefrom if an assignment thereof, without the consent of a third
party thereto, would constitute a breach or violation thereof and if such a
consent is not obtained at or prior to the Closing.
If a consent to the assignment of a Contract or Permit related to the
Business is not obtained prior to the Closing or if an attempted assignment of a
Contract or Permit related to the Business is ineffective for any other reason,
the Imation Companies will use commercially reasonable efforts to attempt to
obtain such consent or otherwise procure an effective assignment of such
Contract or Permit and, pending the obtaining of such consent or the procurement
of such assignment, the Imation Companies and the Metatec Companies will discuss
the desirability and feasibility of implementing an arrangement to provide for
Purchasers the benefits and obligations under any such Contracts or Permits on
terms mutually satisfactory to the parties. If, with respect to any such
Contract or Permit that the parties agree to assign or effectively assign to a
Purchaser, the consent to assignment is obtained or an effective assignment can
otherwise be made following the Closing on mutually satisfactory terms, the
appropriate Imation Company shall promptly assign to the appropriate Purchaser,
all of its right, title and interest in and to such Contract or Permit and such
Purchaser shall assume the liabilities and obligations of such Imation Company
under such Contract or Permit pursuant to a transfer instrument substantially
similar in form and substance to the transfer instrument used for the assignment
of similar Contracts or Permits related to the Business at the Closing.
Purchasers acknowledge that all or some of the Permits used by the
Imation Companies in the Business may not be transferable, however, the Imation
Companies shall use all commercially reasonable efforts to have all transferable
Permits transferred.
2.3 Excluded Assets. Notwithstanding the terms of Sections 2.1 and 2.2,
the following assets of the Imation Companies shall be retained by the Imation
Companies, are not being sold, assigned, transferred or conveyed to Purchasers
hereunder and do not constitute Purchased Assets (all of the following are
referred to herein collectively as the "Excluded Assets"):
(a) Cash. All Cash, marketable securities and bank accounts;
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(b) Excluded Contracts. All loan agreements and credit
facilities and related agreements of the Imation Companies with banks,
financial institutions or other lenders, all Contracts of the Imation
Companies with Minnesota Mining and Manufacturing Corporation (except
for Contracts for the supply of raw materials or the purchase of CD-ROM
services in the ordinary course of the Business) and all other
Contracts of the Imation Companies listed on Schedule 2.3(b)
(collectively, the "Excluded Contracts") and any rights thereunder,
including the right to receive any payments thereunder;
(c) Employee Assets. Except as otherwise provided in the
International Asset Transfer Agreement, all assets of any Benefit
Plans, Contracts between the Imation Companies and their respective
employees, arrangements and other plans;
(d) Originals. Except to the extent originals are provided in
accordance with Section 2.1(d), originals of the Imation Companies'
financial records and files, personnel records and employee benefits
and compensation plans and records, in whatever form or media embodied,
other than those originals or copies of such documents required to be
delivered by the Imation Companies pursuant to Section 11.2(b);
(e) Intellectual Property. Except for the Owned Software and
except to the extent the Licensed Software and Intellectual Property is
licensed pursuant to the License Agreement, all Intellectual Property
owned by or licensed to any Imation Company;
(f) Insurance Policies. Any insurance policies and claims and
rights to insurance proceeds and awards;
(g) Securities. All securities, including, without limitation,
all of the shares of issued and outstanding capital stock of Imation,
Enterprises and International;
(h) Excluded Receivables. The Accounts Receivable relating to
(i) secure contracts with Governmental Authorities, (ii) the sale of
blank recordable media (data products) and (iii) sales to or between
the Imation Companies and their Affiliates (the "Excluded
Receivables");
(i) Excluded Accounts. All rights, goodwill or opportunities
with respect to accounts and business opportunities with (i)
Governmental Authorities covered by secure contract and (ii) the
Imation Companies and their Affiliates (collectively, the "Excluded
Accounts") and all Customer Contracts, receivables and other documents
relating thereto;
(j) Excluded Businesses. Any assets, properties and rights of
the Imation Companies relating exclusively to or used exclusively in
any business of the Imation Companies other than the Business,
including, without limitation, all of the Imation Companies' right,
title and interest in and to the video disk business of the Imation
Companies;
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(k) Related Agreements. This Agreement and the agreements,
documents and instruments contemplated herein;
(l) Tax Refunds. Any claim for Tax refunds with respect to any
Tax return of any Imation Company;
(m) Duty Drawback. All rights of the Imation Companies with
respect to claims for duty drawback, as provided in 19 U.S.C. section
1313, as amended, on merchandise exported, returned or destroyed by the
Imation Companies prior to the Closing Date;
(n) Other Excluded Assets. The assets listed on
Schedule 2.3(n); and
(o) Excluded Inventory. All factory spare parts and factory
supplies inventories located at the Menomonie Facility, and all
packaging and other inventory not specifically described in
Section 2.1(c).
2.4 Assumed Obligations. At the Closing, Purchasers shall assume, and
agree to pay, perform, fulfill and discharge, the following obligations of the
Imation Companies (the "Assumed Obligations"):
(a) Contract Obligations. The obligations of the Imation
Companies which are required to be performed and which accrue after the
Closing Date under the Purchased Contracts and Permits, to the extent
such Contracts and Permits, and all rights of the Imation Companies
thereunder, are effectively assigned to Purchasers on the Closing Date
or thereafter pursuant to Section 2.2;
(b) Current Liabilities. All liabilities of the Imation
Companies relating exclusively to the Business that are classified as
current liabilities (other than accounts payable) in accordance with
GAAP and which were incurred in the ordinary course of business, for
which an Imation Company received goods or services and which are
listed specifically in the Closing Date Working Capital Statement; and
(c) International Obligations. The obligations of any Imation
Company specifically assumed by any Metatec Company pursuant to the
International Asset Transfer Agreement.
2.5 No Other Liabilities Assumed. Except as expressly set forth in
Sections 2.4 and 7.9 of this Agreement or in the International Asset Transfer
Agreement, no Metatec Company nor any Affiliates of the Metatec Companies shall
assume or in any way be liable or responsible for, any
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claims, liabilities, obligations or debts of the Imation Companies or any of
their Affiliates, including without limitation, the following claims,
liabilities, obligations, or debts of the Imation Companies and their Affiliates
(collectively, "Excluded Obligations"):
(a) indebtedness and other obligations or guarantees of the
Imation Companies, including without limitation, current liabilities of
the Imation Companies (other than Assumed Obligations) or short-term
and long-term indebtedness;
(b) federal, state or local tax liabilities or obligations of
the Imation Companies relating to the operations of the Imation
Companies prior to the Closing or arising or accruing prior to the
Closing or resulting from the consummation of the transactions
contemplated herein, including, without limitation, any income tax, any
franchise tax, and tax recapture, any sales/or use tax, any state and
local recording fees and taxes and any FICA, FUTA, workers'
compensation and, any and all other taxes or amounts due and payable as
a result of the exercise by any of the Imation Companies' employees of
such employees' right to vacation, sick leave and holiday benefits
accrued while in the employ of the Imation Companies.
(c) liability for any and all claims by or on behalf of the
Imation Companies employees, any other individual, entity, governmental
agency or employee plan, including, without limitation, for or related
to any pension, profit sharing, deferred compensation, disability, or
any other employee health and welfare benefit plans or any other
arrangement providing for insurance coverage, liability for any EEOC
claim, wage and hour claim, unemployment compensation claim or workers'
compensation claim or other liability, and liability for all employee
wages and benefits, including accrued vacation, sick leave and holiday
pay and taxes or other liability related thereto in respect of the
Imation Companies' employees;
(d) liabilities or obligations relating to any Contract;
(e) any liability arising out of or in connection with claims
for alleged acts or omissions relating to the ownership or operation of
the Assets which occurred prior to the Closing;
(f) any liability for any environmental claims or claims
associated with or arising under any Environmental Laws relating to
periods prior to or as of the Closing whether or not discovered or
known prior to Closing;
(g) any debt, obligation, expense or liability of the Imation
Companies arising out of or incurred as a result of any transaction or
activity of the Imation Companies occurring after the Closing or for
any violation by the Imation Companies of any Law at any time;
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(h) any account payable attributable to legal or accounting
fees or similar expenses incurred by the Imation Companies;
(i) any warranty liabilities or products liability of the
Imation Companies with respect to any products or merchandise of the
Business manufactured or sold or services provided prior to the
Closing;
(j) any liability of the Imation Companies for injury to or
death of person or damage to or destruction of property which occurred
prior to Closing, regardless of when said claim or liability is
asserted;
(k) any liabilities of the Imation Companies arising out of
infringement of the intellectual property right of any Person which
occurred prior to the Closing;
(l) any liabilities not reflected on the Closing Date Working
Capital Statement;
(m) any liabilities relating to the Excluded Assets; and
(n) any liability for compensation paid or payable to any
employee of the Imation Companies except to the extent such liability
is accrued on the Working Capital Statement.
ARTICLE III
PURCHASE PRICE AND PAYMENT
3.1 Payment of Purchase Price. On the Closing Date, in consideration
for the sale of the Purchased Assets by the Imation Companies, Purchasers shall
(a) assume the Assumed Obligations, and (b) pay an aggregate purchase price (the
"Purchase Price") of $39,800,000 as follows: (i) (A) Metatec Acquisition shall
pay to Sellers $30,400,000, (B) less or plus the net amount of prorations owing
to or payable by Purchasers pursuant to Section 3.3 (to the extent ascertainable
on or prior to the Closing Date), and (C) less the principal amount of the Note,
payable to Sellers by electronic transfer to such account or accounts as Sellers
shall specify to Purchasers prior to the Closing Date, (ii) the Metatec
Companies shall execute and deliver the Note (having a principal amount of
$2,800,000) to the Imation Companies and (iii) Metatec International shall pay
to International the amount specified in Section 2.2 of the International Asset
Transfer Agreement, payable to International as provided in the International
Asset Transfer Agreement.
3.2 Adjustment to Purchase Price.
(a) As soon as practicable, but within 60 days after the
Closing Date, the Imation Companies and Sellers' Accountants shall prepare and
deliver to Purchasers a pro forma net working capital statement (the "Closing
Date Working Capital Statement") as at the close of business on the day prior to
the Closing Date, setting forth the Net Working Capital as at such date. In
connection
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with the preparation of the Closing Date Working Capital Statement, the Imation
Companies and Sellers' Accountants shall take a physical inventory of all of the
Inventory as of the close of business on the day prior to the Closing Date, and
Purchasers and Purchasers' Accountants shall be entitled to observe such
physical inventory at each location at which it is conducted.
(b) Upon receipt of the Closing Date Working Capital
Statement, Purchasers and Purchasers' Accountants shall have a period of 60 days
to review such Closing Date Working Capital Statement and propose any
adjustments thereto. All adjustments proposed by Purchasers shall be set out in
a written statement delivered to the Imation Companies and shall be incorporated
into the Closing Date Working Capital Statement unless the Imation Companies
shall object in writing to such proposed adjustments within 30 days of delivery
by Purchasers to the Imation Companies of such proposed adjustments. If the
Imation Companies do object in writing within 30 days to any such proposed
adjustment (the proposed adjustment or adjustments to which the Imation
Companies object are referred to herein as the "Contested Adjustments"), the
Imation Companies and Purchasers shall use reasonable efforts to resolve their
dispute regarding the Contested Adjustments, but if a final resolution thereof
is not obtained within 15 days after the Imation Companies deliver to Purchasers
the Imation Companies' written objection to the Contested Adjustments, the
Imation Companies and Purchasers shall promptly retain Xxxxxx Xxxxxxxx LLP or
another nationally recognized independent accounting firm acceptable to both the
Imation Companies and Purchasers (the "Independent Accountants") to resolve any
remaining disputes concerning the Contested Adjustments to the Closing Date
Working Capital Statement. Either the Imation Companies or Purchasers may retain
the Independent Accountants on behalf of the Imation Companies and Purchasers
upon the expiration of such 15-day period, except that if the Independent
Accountants are other than Xxxxxx Xxxxxxxx LLP, the written agreement of the
Imation Companies and Purchasers shall be required to retain the Independent
Accountants. If Independent Accountants are retained, then (i) the Imation
Companies and Purchasers shall each submit to the Independent Accountants in
writing within 15 days after the Independent Accountants are retained their
respective proposals with respect to the Contested Adjustments, together with
such supporting documentation as they deem necessary or as the Independent
Accountants request (provided that if any documentation requested by the
Independent Accountants cannot be obtained by the Imation Companies or
Purchasers within such 15-day period (acting in good faith and in a diligent
manner), then such 15-day period shall be extended for such period of time as is
reasonably necessary for such information to be obtained), (ii) the Independent
Accountants shall select, within 30 days after receiving the proposals of both
the Imation Companies and Purchasers and all supplementary supporting
documentation requested by the Independent Accountants, either the Imation
Companies' or Purchasers' proposal, but not a different proposal, with respect
to the Contested Adjustments, which selection shall be final and binding on the
Imation Companies and Purchasers, and (iii) the fees and expenses of the
Independent Accountants shall be borne by the party whose proposal with respect
to the Contested Adjustments is not selected.
(c) Within five Business Days after the Closing Date Working
Capital Statement has become final and binding upon the Imation Companies and
Purchasers pursuant to Section
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3.2(b), the Purchase Price shall be adjusted as follows: (i) if, based on the
Closing Date Working Capital Statement, there is a Closing Date Deficiency, then
the Imation Companies shall pay to Purchasers the amount of the Closing Date
Deficiency; and (ii) if, based on the Closing Date Working Capital Statement,
there is a Closing Date Excess, Purchasers shall pay to the Imation Companies
the amount of such Closing Date Excess. If, based on the Closing Date Working
Capital Statement, there is neither a Closing Date Deficiency nor a Closing Date
Excess, the Purchase Price shall not be adjusted pursuant to this Section 3.2.
Any amounts payable under this Section 3.2(c) shall be made by electronic
transfer of immediately available funds to such account or accounts as the party
being paid shall specify to the paying party.
(d) Any adjustment to the Purchase Price made pursuant to this
Section 3.2 shall be appropriately allocated between that portion of the
Purchase Price payable to the Sellers and the portion of the Purchase Price
payable to International consistent with the allocation schedule referred to in
Section 3.4.
3.3 Prorations. The Imation Companies and the Purchasers agree that all
of the items listed below relating to the Business and the Purchased Assets will
be prorated as of the Closing Date to the extent that such items are not
otherwise covered in the Closing Date Working Capital Statement, with the
Imation Companies liable to the extent such items relate to any time period up
to (and including) the Closing Date and the Purchasers liable to the extent such
items relate to periods subsequent to the Closing Date.
(a) Personal property, real estate, occupancy and other Taxes,
if any, payable by the Imation Companies with respect to the Purchased Assets;
(b) Rents, Taxes, royalties and other items which in any case
are payable periodically by or to the Imation Companies under any of the Real
Property Leases or Personal Property Leases;
(c) The amount of any fees and charges which in any case are
payable periodically by the Imation Companies pursuant to any Contracts;
(d) The amount of any fees and charges which in any case are
payable periodically to the Imation Companies pursuant to any Contracts;
(e) The amount of any fees or charges which in any case are
payable to or by the Imation Companies periodically with respect to any of the
Transferred Permits; and
(f) The amount of sewer rents and charges for water,
electricity and other utilities and fuel.
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The Imation Companies agree to furnish the Purchasers with such documents and
other records as are reasonably necessary in order to confirm all adjustment and
proration calculations made pursuant to this Section 3.3. Final payments with
respect to prorations contemplated by this Section 3.3 that are not
ascertainable on or before the Closing Date shall be settled between the parties
as soon as practicable after they are ascertainable.
3.4 Allocation of Consideration. The Purchase Price for the Purchased
Assets shall be allocated among the Purchased Assets in accordance with Section
1060 of the Code and pursuant to a schedule jointly prepared and mutually agreed
upon by the Imation Companies and the Purchasers. A preliminary Purchase Price
allocation is set forth on Schedule 3.4 and the final Purchase Price allocation
shall be substantially consistent with Schedule 3.4. The Imation Companies and
the Purchasers shall exercise all reasonable good faith efforts to agree upon
such final allocation as soon as reasonably practicable after the Closing, and
in any event within 120 days after the Closing Date. The Purchasers and the
Imation Companies shall not take any position inconsistent with such allocation
in connection with their respective federal, state, or local Tax Returns and
other filings (including without limitation Internal Revenue Service Form 8594).
Any adjustment to the Purchase Price shall be allocated as provided in Temp.
Treas. Reg. Section 1.1060-1T(f).
3.5 Reassignment of Certain Accounts Receivable. Beginning on the date
that is 60 calendar days after the Closing Date, the Purchasers shall be
entitled to reassign and transfer to the Imation Companies any Account
Receivable that has not been collected in full within 90 days after such Account
Receivable arose and the Imation Companies shall be required to accept any such
uncollected Account Receivable which has been so reassigned and transferred;
provided, however, that no particular Account Receivable may be so reassigned
and transferred if (a) the Purchasers have not used commercially reasonable
efforts to collect such Account Receivable, (b) the obligor on such Account
Receivable has refused to pay such Account Receivable due to any disagreement
between such obligor and Purchasers regarding the failure of Purchasers to
perform their obligation to the obligor or (c) during the first 90 calendar days
after the Closing Date the Purchasers have not followed substantially the same
credit and collection policies as the Imation Companies applied to such Account
Receivable immediately prior to the Closing Date. In the event the Purchasers
reassign and transfer any such uncollected Account Receivable, the Imation
Companies shall pay to the Purchasers an amount equal to the aggregate amount of
such uncollected Account Receivable concurrently with such reassignment.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE IMATION COMPANIES
The Imation Companies, jointly and severally, represent and warrant to
the Metatec Companies, as of the date of this Agreement (unless otherwise
specified), as follows:
4.1 Due Incorporation. Each of Imation and Enterprises is a corporation
duly organized, validly existing and in good standing under the Laws of the
State of Delaware, with all requisite corporate power and authority to own,
lease and operate its properties and to carry on the Business
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as they are now owned, leased and operated. International is a corporation
organized under the Laws of The Netherlands, with all requisite corporate power
and authority to own, lease and operate its properties and to carry on the
Business as they are now owned, leased and operated. Each of Imation and
Enterprises is licensed or qualified to do business and is in good standing as a
foreign corporation in each jurisdiction where the nature of the properties
owned, leased or operated by it and the businesses transacted by it require such
licensing and qualification, except where the failure to be so licensed,
qualified or in good standing would not result in a Material Adverse Effect.
4.2 Due Authorization. Each of Imation and Enterprises has full
corporate power and authority to execute, deliver and perform this Agreement and
its Related Agreements and to consummate the transactions contemplated hereby
and thereby. International has full power and authority to execute, deliver and
perform this Agreement, the International Asset Transfer Agreement and its
Related Agreements and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance by each of the Imation
Companies of this Agreement, and by the applicable Imation Company of each of
the Related Agreements, and the consummation by each of the Imation Companies of
the transactions contemplated hereby and thereby, have been duly and validly
approved by the board of directors of each of the Imation Companies, as
applicable, and, to the extent required by applicable Law, by all stockholders
of the Imation Companies entitled to vote thereon, and no other actions or
proceedings on the part of any Imation Company are necessary to authorize the
execution, delivery and performance by any of the Imation Companies of this
Agreement or by any Imation Company of its Related Agreements, or the
transactions contemplated hereby and thereby. Each of the Imation Companies has
duly and validly executed and delivered this Agreement and each of the Imation
Companies has duly and validly executed and delivered (or prior to or at the
Closing will duly and validly execute and deliver) its Related Agreements. This
Agreement constitutes the legal, valid and binding obligation of each of the
Imation Companies, and the Related Agreements, upon execution and delivery by
the applicable Imation Companies, will constitute legal, valid and binding
obligations of each such Imation Company, in each case enforceable in accordance
with their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium, reorganization or similar laws in
effect which affect the enforcement of creditors' rights generally, by equitable
limitations on the availability of specific remedies and by principles of
equity.
4.3 No Conflicts. Except as set forth on Schedule 4.3, and except as
would not result in a Material Adverse Effect, the execution, delivery and
performance by the Imation Companies of this Agreement and of their Related
Agreements and the consummation by the Imation Companies of the transactions
contemplated hereby and thereby do not and will not (i) violate any Law
applicable to the Imation Companies or any of the Purchased Assets; (ii) violate
or conflict with, result in a breach or termination of, constitute a default
under, accelerate the performance required by or give any third-party any
additional right (including a termination right) under, permit the cancellation
of, result in the creation of any Lien upon any of the Purchased Assets under,
or result in or constitute a circumstance which, with or without notice or lapse
of time or both, would constitute any of the foregoing under any Contract
relating to the Business to which any Imation
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Company is a party or by which any of the Imation Companies or any of the
Purchased Assets are bound; (iii) permit the acceleration of the maturity of any
indebtedness of any of the Imation Companies related to the Business or
indebtedness secured by any of the Purchased Assets; or (iv) violate, conflict
with or result in a breach of, any provision of the certificate of incorporation
or bylaws or similar organizational instruments of any Imation Company.
4.4 Financial Statements. Attached hereto as Schedule 4.4 are copies of
the Business Financial Statements. The Business Financial Statements fairly
present the financial position of the Business in all material respects as of
the dates thereof and the results of the operation of the Business for the
periods covered thereby.
4.5 Title to Properties. Except as set forth on Schedule 4.5, the
Imation Companies have good and valid title to all of the Purchased Assets and
have the right to sell, convey, transfer, assign and deliver the Purchased
Assets as contemplated by this Agreement (provided that no representation or
warranty is being made as to the effectiveness of any arrangement to convey the
benefits and burdens of any Contract as contemplated pursuant to Section 2.2).
Except as set forth on Schedule 4.5, none of the Purchased Assets is subject to
any Lien. At the Closing, the Imation Companies will convey the Purchased Assets
to the Metatec Companies free and clear of all Liens.
Except as set forth on Schedule 4.5, all of the Purchased Assets have
been properly maintained consistent with the past practices of the Imation
Companies and are reasonably suitable for the purpose or purposes for which they
are being used by the Imation Companies (including full compliance with all
applicable Laws). Except as set forth on Schedule 4.5 and excluding the
Menomonie Facility, to the knowledge of the Imation Companies there are no
material structural defects in the exterior walls or the interior bearing walls,
the foundation or the roof of any building, garage or other such structure
leased or used by any of the Imation Companies in connection with the Business,
and the electrical, plumbing, heating systems and air conditioning systems of
any such structures are in good operating condition, ordinary wear and tear
excepted. To the knowledge of the Imation Companies, (a) the utilities servicing
any such real properties are adequate to permit the continued operation of the
Business by the Imation Companies, and (b) there are no pending or threatened
zoning, condemnation or eminent domain proceedings, building, utility or other
moratoria, or injunctions or court orders which would have a Material Adverse
Effect. Schedule 4.5 lists, and the Imation Companies have furnished or made
available to Purchasers, copies of all engineering, geologic, and environmental
reports prepared by or for the Imation Companies and in their possession with
respect to such real properties.
4.6 Undisclosed Liabilities. Except for any liability or obligation
that would not result in a Material Adverse Effect, and except for any liability
or obligation relating to duty drawbacks, there is no liability or obligation of
any nature relating in any way to the Business (whether liquidated,
unliquidated, accrued, absolute, contingent or otherwise and whether due or to
become due) other than:
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(a) Those liabilities or obligations set forth or reflected in
the Business Financial Statements which have not been paid or
discharged since the date thereof;
(b) Current liabilities (determined in accordance with GAAP)
incurred since the date of the most recent balance sheet contained in
the Business Financial Statements and arising in the ordinary course of
business consistent with past practices which are properly reflected on
their books; and
(c) Those liabilities or obligations arising from and after
the date of this Agreement under the Purchased Contracts and Permits
and the Excluded Contracts.
4.7 Absence of Certain Changes. Except as set forth on Schedule 4.7,
since the date of the most recent balance sheet contained in the Business
Financial Statements, there has not been:
(a) Any Material Adverse Change;
(b) Any transaction entered into or carried out by any of the
Imation Companies other than in the ordinary course of business
consistent with past practices;
(c) Any material change by any of the Imation Companies in the
method of doing business with respect to the Business or any material
change in the accounting principles or practices utilized by the
Imation Companies with respect to the Business or in the method of
application of such principles or practices;
(d) Any sale, lease or other disposition of, or any agreement
to sell, lease or otherwise dispose of any of the properties or assets
which are part of the Assets of the Business owned by any Imation
Company, other than in the ordinary course of business consistent with
past practices;
(e) Unless previously approved by Purchasers as herein
provided, any purchase of, or any agreement to purchase, any capital
assets or any lease or any agreement to lease, as lessee, any capital
assets in connection with the Business; or
(f) Any material modification, waiver, change, amendment,
release, rescission or termination of, or accord and satisfaction with
respect to, any material term, condition or provision of any assumed
contract obligation under Section 2.4(a), other than any satisfaction
by performance in accordance with the terms thereof in the ordinary
course of business.
4.8 Consents and Approvals. Except as would not result in a Material
Adverse Effect, and except with respect to HSR Act filings, and except with
respect to any purchase orders accepted in the ordinary course of the Business
and except as set forth on Schedule 4.8, no consent, authorization or approval
of, or filing or registration with, any Governmental Authority or any other
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Person not a party to this Agreement is necessary in connection with the
execution, delivery and performance by the Imation Companies of this Agreement
and their Related Agreements. The share of the Imation Companies of the CD-ROM
Services market in Belgium constitutes less than 25% of such market.
4.9 Contracts and Leases. Schedules 2.2(a), 2.2(b), 2.2(e) and 4.9
collectively list each Real Property Lease, each Personal Property Lease and all
other Contracts of the Imation Companies to be assigned to Purchasers in
accordance with this Agreement (other than (a) purchase orders or sales orders
made or accepted in the ordinary course of the Business and (b) Contracts made
in the ordinary course of the Business that are not material to the Business).
All rents and other amounts currently due and payable by the Imation Companies
under such leases and Contracts have been paid. The Imation Companies have not
received any notice of Default under any of such leases which has not been
remedied or waived and which Default could result in a Material Adverse Effect.
If a Contract listed on Schedule 2.2(a) is an oral arrangement, Schedule 2.2(a)
also contains a description of the material terms of such arrangement. Originals
or copies of the written Contracts assigned to Purchasers in accordance with
this Agreement have been provided or will be provided to the Metatec Companies
prior to or at Closing.
4.10 Inventory. Schedule 2.1(c) sets forth a list of the Inventory as
of the date of this Agreement. Except as set forth on Schedule 4.10, the
Inventory is, in all material respects, usable in the ordinary course of the
Business and (a) the Inventory has been priced at the lower of cost or market,
standard costs that approximate the FIFO method for raw materials and the
average cost method for work in process, all applied on a consistent basis, and
(b) each item of Inventory which has been purchased (as opposed to manufactured)
has been purchased by the Imation Companies directly from the manufacturer
thereof or from any authorized distributor of such items in full compliance with
applicable Law and any policy of, and any agreement with, such manufacturer or
distributor. None of the Inventory has been pledged or otherwise given as
collateral, or is held by the Imation Companies on assignment or consignment.
4.11 Accounts Receivable. Schedule 2.1(f) sets forth a list of the
Accounts Receivable as of the date set forth on such schedule. Except as set
forth on Schedule 4.11, each existing Account Receivable represents and each
Account Receivable arising between the date of this Agreement and the Closing
Date will represent a sale made in the ordinary course of the Business. The
applicable Imation Company has (or will have by the Closing Date) performed all
of its obligations to produce the goods or perform the services to which each
such Account Receivable relates.
4.12 Permits. Each of the Permits relating to the Business is currently
valid and in full force, except where the failure to maintain such Permits valid
and in full force would not result in a Material Adverse Effect. With respect to
the Business, each of the Imation Companies possesses, is not in violation of
and is not subject to any suspension, adverse modification, revocation or
adverse proceeding with respect to, any Permit which is necessary or material
for such Imation
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Company to engage in the Business as currently conducted, other than such
Permits the failure of which to possess, or the suspension, modification or
revocation of which, would not result in a Material Adverse Effect. There is no
pending or, to the knowledge of the Imation Companies, threatened proceeding
which would result in the revocation, cancellation or inability to renew any
material Permit. All Permits which relate solely to the Business and which are
transferable are listed on Schedule 2.2(g).
4.13 Employee Benefit Plans and Employment Agreements. Descriptions of
all "employee welfare benefit plans" or "employee pension benefit plans" as
those terms are respectively defined in sections 3(1) and 3(2) of ERISA, and all
retirement or deferred compensation plans, incentive compensation plans, stock
plans, unemployment compensation plans, vacation pay, severance pay, bonus or
benefit arrangements, insurance or hospitalization programs or any other fringe
benefit arrangements (whether pursuant to Contract, arrangement, custom or
informal understanding) which do not constitute "employee benefit plans" (as
defined in section 3(3) of ERISA) and all employment agreements, covering any
Affected Employee of Sellers have been supplied to the Metatec Companies.
4.14 Employment and Labor Matters. (a) Schedule 4.14(a) sets forth a
list, as of the date set forth on such schedule, of the names and titles of each
employee of the Sellers wholly or primarily dedicated to the Business and each
employee of the Sellers who devotes substantially all of his or her time to the
day-to-day operations of the Business and Schedule 4.14(c) sets forth a list, as
of the date set forth on such schedule, of the names and titles of each employee
of International wholly or primarily dedicated to the Business and each employee
of International who devotes substantially all of his or her time to the
day-to-day operations of the Business (the employees listed on Schedule 4.14(a)
and (c) together being the "Affected Employees"). Except as set forth on
Schedule 4.14(a) or Schedule 4.14(c), since December 31, 1997, there has been no
material change in compensation, by means of wages, salaries, bonuses,
gratuities or otherwise, to any Affected Employee or any material change in
compensation to Affected Employees for reimbursable business expenses, other
than changes made pursuant to the normal periodic salary review process of the
Imation Companies, and other than certain bonuses to be paid in connection with
the transactions contemplated by this Agreement. Except as set forth on Schedule
4.14(a) or Schedule 4.14(c), during the past two (2) years, there has been no
labor strike, dispute, slow-down, work stoppage, union organizing campaign,
unfair labor practice complaint or other labor difficulty actually pending or,
to the knowledge of the Imation Companies, threatened involving the Business
which had or would have a Material Adverse Effect on the Business. None of the
Affected Employees is covered by any collective bargaining agreement other than
the agreements listed on Schedule 4.14(a) or Schedule 4.14(c).
(b) Schedule 4.14(b) sets forth, as of the date set forth on such
schedule, a list of the names (other than names of employees (i) at the
Menomonie Facility and (ii) of Minnesota Mining and Manufacturing Company) and
titles of each individual not employed by the Imation Companies who, by contract
with the Imation Companies, (x) is wholly or primarily dedicated to the Business
or (y)
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devotes substantially all of his or her time to the day-to-day operations of the
Business (collectively, the "Contract Employees") and the annual compensation
payable to each such individual for the current fiscal year.
4.15 Taxes. The Imation Companies are not delinquent in the payment of
any Taxes, the failure of which to pay would result in a Lien on all or a
substantial part of the Purchased Assets or a liability to the Metatec
Companies, and the accrual for Taxes on the most recent balance sheet in the
Business Financial Statements is adequate to cover the corresponding liability
for accrued and unpaid Taxes.
4.16 Compliance with Laws. Except as may be disclosed in any Disclosure
Schedule hereto and except for failures to comply which would not result in a
Material Adverse Effect, the Business has been and is being conducted in
compliance with all applicable Laws (other than Environmental Laws, which are
covered in Section 4.17), including without limitation: (a) zoning, fire, safety
and building Laws; (b) Title VII of the Civil Rights Act of 1964, as amended;
(c) the Fair Labor Standards Act of 1938, as amended; (d) the Occupational
Safety and Health Act of 1970, as amended; (e) the Americans with Disabilities
Act of 1990; (f) Laws relating to employment; (g) Laws governing payment of
minimum wages and overtime rates and the withholding and payment of taxes from
compensation of employees; (h) applicable federal and state antitrust and trade
regulation Laws governing competition generally or governing agreements
restricting, allocating or otherwise affecting geographic or product markets;
(i) the Controlled Substances Act, as amended; and (j) the Foreign Corrupt
Practices Act of 1977, as amended.
4.17 Environmental Matters. Except as set forth on Schedule 4.17 or in
the environmental reports, if any, referenced therein:
(a) The Imation Companies have not used the real property
leased pursuant to the Real Property Leases (the "Leased Real
Property") or any part thereof or any personal property owned, leased
or used by the Imation Companies, for the generation, transportation,
treatment, storage, processing, handling or disposal of any Hazardous
Materials or any hazardous or toxic substance or waste in violation of
any Environmental Law. Except as set forth on Schedule 4.17, the
Imation Companies have not disposed, released or discharged any
hazardous or toxic substance or water on any real property owned,
leased or used by the Imation Companies in connection with the Business
in violation of any Environmental Law. To the knowledge of the Imation
Companies, there is no asbestos located in, or which is a part of, any
of the Assets that the Imation Companies are obligated to remove or
otherwise remediate pursuant to any applicable Environmental Laws, the
Occupational Safety and Health Act or any state equivalent or pursuant
to the provisions of any of the Real Property Leases. None of the
Imation Companies has been given notice that it may be obligated to so
remove or otherwise remediate any such asbestos. The Imation Companies
have not released into, stored or deposited, upon or below any real
property leased or otherwise used in the Business, or released directly
or indirectly into any surface or ground water systems
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on or below the surface of any real property used in the Business, or
in any structures located on any real property used in the Business,
any hazardous substance in violation of any Environmental Law. To the
knowledge of the Imation Companies, there is no condition of the
structures or fixtures of any real property described above in this
paragraph which is in violation of any Environmental Law, there are no
notices of violation and no pending or threatened investigations,
consensual or unilateral work orders, or plans for removal, remediation
or corrective action relating to such real property from or required by
any police or fire department, sanitation, environmental or health
authorities or from any other foreign, federal, state or municipal
authority.
(b) There is not now pending or, to the knowledge of the
Imation Companies, threatened any action, suit or proceeding before any
court or Governmental Authority alleging that the Leased Real Property
is in violation of any Environmental Law.
(c) The Imation Companies have obtained, kept current and
maintained compliance with the terms and conditions of all permits,
authorizations, registrations or other requirements imposed by any
applicable Environmental Law, including the filing of all reports that
may be required.
4.18 Litigation. Except as set forth on Schedule 4.18, there is no
legal, administrative or arbitration proceeding, suit or action of any nature
pending or, to the knowledge of the Imation Companies, threatened against (i)
any Imation Company, with respect to the Business, which involves claims against
such party exceeding $100,000 or (ii) any of the Imation Companies which
questions or challenges the validity of this Agreement or the International
Asset Transfer Agreement or any action taken or to be taken by the Imation
Companies pursuant to this Agreement or the International Asset Transfer
Agreement or any of the Imation Companies in connection with the transactions
contemplated hereby or thereby. Except for any disputes, conflicts or
circumstances that would not result in a Material Adverse Effect, there exists
no dispute, conflict or circumstance providing the basis for a dispute or
conflict which would result in material legal, administrative or arbitration
proceeding, suit or action. The Imation Companies are not subject to any
outstanding judgment, order, writ, injunction or decree which would result in a
Material Adverse Effect. Except as set forth in Schedule 4.18, there are no
pending or, to the knowledge of the Imation Companies, threatened disputes,
investigations or controversies between any Imation Company and any Governmental
Authority with respect to the Business that would result in a Material Adverse
Effect.
4.19 Brokers. Other than Xxxxxx Xxxxxxx & Company LLC, the Imation
Companies have not used any broker or finder in connection with the transactions
contemplated hereby, and neither Purchasers nor any of their Affiliates has or
shall have any liability or otherwise suffer or incur any Loss as a result of or
in connection with any brokerage or finder's fee or other commission of any
Person retained by the Imation Companies in connection with any of the
transactions contemplated by this Agreement, the International Asset Transfer
Agreement or the Related Agreements.
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4.20 Certain Intellectual Property. That portion of the Imation
Companies' Intellectual Property to be licensed pursuant to the License
Agreement includes all of the intellectual property owned by the Imation
Companies which is necessary for the operation of the Business.
EXCEPT AS TO THOSE MATTERS EXPRESSLY COVERED BY THE REPRESENTATIONS AND
WARRANTIES BY THE IMATION COMPANIES IN THIS AGREEMENT, THE IMATION COMPANIES
EXPRESSLY DISCLAIM ALL REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESSED OR
IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY
OR FITNESS FOR ANY PARTICULAR PURPOSE.
The Imation Companies make no representation or warranty with respect
to any information concerning the Assets, the Business or the Imation Companies
not expressly represented or warranted to in this Agreement, including, without
limitation, except as otherwise expressly set forth in this Agreement (a) the
information set forth in the Confidential Memorandum distributed by Xxxxxx
Xxxxxxx & Company LLC with respect to the Imation Companies and the Business or
(b) any financial projection or forecast relating to the Assets, the Business or
the Imation Companies. With respect to any such projection or forecast delivered
by or on behalf of the Imation Companies to any Metatec Company each of the
Metatec Companies acknowledges that (x) there are uncertainties inherent in such
projections and forecasts and (y) each of the Metatec Companies is familiar with
such uncertainties and takes full responsibility for making its own evaluation
of the adequacy and accuracy of all such projections and forecasts. None of the
Metatec Companies shall have any claim against the Imation Companies, and the
Imation Companies shall have no liability to the Metatec Companies with respect
to any such disclaimed information, including, without limitation, the
Confidential Information Memorandum or any financial projection or forecast
relating to the Assets, the Business or the Imation Companies.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE METATEC COMPANIES
The Metatec Companies, jointly and severally, represent and warrant to
the Imation Companies, as of the date of this Agreement, as follows:
5.1 Due Incorporation. Each of Metatec Acquisition and Metatec is a
corporation duly organized, validly existing and in good standing under the Laws
of the States of Ohio and Florida, respectively, with all requisite corporate
power and authority to own, lease and operate its properties and to carry on its
business as they are now owned, leased and operated. Metatec International is a
corporation organized under the Laws of The Netherlands, with all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its businesses as they are now owned, leased and operated. Each of
Metatec Acquisition and Metatec is licensed or qualified to do business and is
in good standing as a foreign corporation in each jurisdiction where the nature
of the properties owned, leased or operated by it and the businesses transacted
by it require such licensing
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or qualification, except where the failure to be so licensed, qualified or in
good standing would not result in a material adverse effect on the business,
operations or condition (financial or otherwise) of the Metatec Companies taken
as a whole (a "Metatec Material Adverse Effect").
5.2 Due Authorization. Each of the Metatec Companies has full corporate
power and authority to execute, deliver and perform this Agreement and its
Related Agreements and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance by each of the Metatec
Companies of this Agreement and the execution, delivery and performance by each
of the Metatec Companies of its Related Agreements and the consummation by the
Metatec Companies of the transactions contemplated hereby and thereby have been
duly and validly approved by each of the Metatec Companies' board of directors
and, to the extent required by applicable Law, by all stockholders of the
Metatec Companies entitled to vote thereon, and no other actions or proceedings
on the part of the Metatec Companies are necessary to authorize the execution,
delivery and performance by each of the Metatec Companies of this Agreement, or
the execution, delivery and performance by each of the Metatec Companies of its
Related Agreements or the transactions contemplated hereby and thereby. Each of
the Metatec Companies has duly and validly executed and delivered this
Agreement, and each of Metatec Companies has duly and validly executed and
delivered (or prior to or at the Closing will duly and validly execute and
deliver) its Related Agreements. This Agreement constitutes legal, valid and
binding obligations of the Metatec Companies and the Related Agreements upon
execution and delivery by each of the Metatec Companies will constitute legal,
valid and binding obligations of the Metatec Companies, in each case enforceable
in accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws in effect which affect the enforcement of creditors' rights
generally, by equitable limitations on the availability of specific remedies and
by principles of equity.
5.3 Consents and Approvals; No Conflicts.
(a) Except as would not result in a Metatec Material Adverse
Effect and except with respect to HSR Act filings and consents identified on
Schedule 5.3(a), no consent, authorization or approval of, or filing or
registration with, any Governmental Authority or any other Person not a party to
this Agreement is necessary in connection with the execution, delivery and
performance of this Agreement and their Related Agreements by the Metatec
Companies; and the agreements, documents and instruments contemplated herein do
not, and the consummation of the transactions contemplated hereby and thereby by
the Metatec Companies will not, violate or conflict with, result in a breach of,
constitute a Default under (whether with notice or the lapse of time or both),
or accelerate or permit the acceleration of the performance required by, any
contract or agreement to which any of the Metatec Companies is a party or by
which it is bound or by which any of its property is bound.
(b) Except as set forth on Schedule 5.3(b), the execution,
delivery and performance by each of the Metatec Companies of this Agreement and
their Related Agreements and
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the consummation by the Metatec Companies of the transactions contemplated
hereby and thereby do not and will not: (i) violate any Law applicable to the
Metatec Companies or any of their respective properties or assets; (ii) violate
or conflict with, result in a breach or termination of, constitute a default or
give any third-party any additional right (including a termination right) under,
permit the cancellation of, or result in or constitute a circumstance which,
with or without notice or lapse of time or both, would constitute any of the
foregoing under any Contract to which any of the Metatec Companies is a party or
by which any of the Metatec Companies or any of their respective assets are
bound; (iii) permit the acceleration of the maturity of any indebtedness of any
of the Metatec Companies or indebtedness secured by any of their assets or
properties; or (iv) violate or conflict with any provision of the certificate of
incorporation or bylaws or similar organizational instruments of the Metatec
Companies.
5.4 Litigation. There is no legal, administrative or arbitration
proceeding, suit or action of any nature pending or, to the knowledge of the
Metatec Companies, threatened against any of the Metatec Companies or any of
their respective Affiliates which questions or challenges the validity of this
Agreement or any of the agreements, documents and instruments contemplated
herein or any action taken or to be taken by the Metatec Companies pursuant to
this Agreement or in connection with the transactions contemplated hereby. There
are no pending or, to the knowledge of the Metatec Companies, threatened
disputes or controversies between the Metatec Companies or any of their
respective Affiliates and any Governmental Authority or third party that would
adversely affect or impair the ability of the Metatec Companies to consummate
the transactions contemplated by this Agreement or any of the agreements,
documents and instruments contemplated herein. As of the date of this Agreement,
none of the Metatec Companies nor any of their respective Affiliates has
received any communication from any Governmental Authority that such authority
would oppose or refuse to grant or issue its consent or approval to, if
required, or would impose a burdensome condition on any of the Metatec Companies
with respect to, the transactions contemplated by this Agreement.
5.5 Brokers. Other than Legg, Mason, Wood, Walker, Inc., none of the
Metatec Companies has used any broker or finder in connection with the
transactions contemplated hereby, and none of the Imation Companies or any of
their Affiliates has or shall have any liability or otherwise suffer or incur
any Loss as a result of or in connection with any brokerage or finder's fee or
other commission of any Person retained by any of the Metatec Companies in
connection with any of the transactions contemplated by this Agreement or the
Related Agreements.
ARTICLE VI
COVENANTS OF THE IMATION COMPANIES
Prior to the Closing, the Imation Companies agree to perform each of
the following covenants:
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6.1 Conduct of Business.
(a) Except as otherwise contemplated by this Agreement, and
except as described on Schedule 6.1, or as otherwise consented to by Purchasers
(which consent shall not be unreasonably withheld or delayed), from the date
hereof until the Closing, the Imation Companies will conduct the Business in the
usual and ordinary course and shall use commercially reasonable efforts to (i)
preserve intact the present business organization and personnel of the Business
and (ii) preserve the goodwill and advantageous relationships of the Business
with customers, suppliers, independent contractors, employees and other Persons
material to the operation of the Business, in each case taking into account any
reaction that customers, suppliers, independent contractors, employees and other
Persons material to the conduct of the Business may have to the announcement of
the transactions contemplated hereby.
(b) Except as otherwise contemplated by this Agreement, and
except as described on Schedule 6.1, or as otherwise consented to by Purchasers
(which consent shall not be unreasonably withheld or delayed), from the date
hereof until the Closing, the Imation Companies shall not, with respect to the
Business:
(i) enter into or amend in any material respect any
Contract material to the Business except in the ordinary course of
business;
(ii) other than pursuant to this Agreement, sell,
lease or dispose of any of the Assets, except sales of Inventory in the
ordinary course of business;
(iii) purchase, lease or otherwise acquire any asset
(of any type or nature), other than (A) Inventory in the ordinary
course of business, and (B) other operating assets having an aggregate
value of $100,000 or less;
(iv) except as otherwise expressly contemplated by
this Agreement, modify or terminate any of the Real Property Leases,
Permits, Personal Property Leases or Contracts in a manner which
results in a Material Adverse Change;
(v) engage in any transaction or enter into any
Contract with any Affiliate of any of the Imation Companies, except for
transactions expressly permitted by this Agreement or transactions in
the ordinary course of business;
(vi) Other than changes made pursuant to the normal
periodic salary review process of the Imation Companies, and other than
certain bonuses to be paid in connection with the transactions
contemplated by this Agreement, enter into or modify any employment,
severance, termination, or similar agreement or arrangement with, or
grant any bonuses, salary increases, severance or termination pay to,
any officer or consultant of any of the Imation Companies employed in
the Business;
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(vii) Other than certain compensation changes that
are described on Schedule 4.14, and other than certain bonuses to be
paid in connection with the transactions contemplated by this
Agreement, and except as required by Law, adopt, amend or terminate any
employee benefit plan or increase, amend or terminate any benefits to
officers, consultants or employees employed in the Business or change
the compensation of any Fremont Employees or Selected Menomonie
Employees or any employee of International employed in the Business; or
(viii) enter into any Contract to do any of the
foregoing.
(c) As used in this Section 6.1, "ordinary course of business"
shall be determined by reference to the past practices of the Imation Companies
(in each case solely with respect to the Business).
6.2 Access. The Imation Companies will afford to the Metatec Companies
and their authorized representatives and agents reasonable access from the date
hereof until the Closing, during normal business hours, to the properties,
books, records and employees of the Imation Companies to the extent relating to
the Business and furnish to the Metatec Companies such additional financial and
operating data and other information as the Metatec Companies may reasonably
request to the extent that such access and disclosure would not violate the
terms of any agreement to which any Imation Company is bound or any applicable
Law. The Metatec Companies and their representatives will have the right at
mutually agreeable times and at mutually agreeable locations to interview the
suppliers and customers and key personnel of the Imation Companies identified to
them by the Metatec Companies. The Imation Companies will exercise commercially
reasonable efforts to cooperate with the Metatec Companies and their
representatives in conducting these activities. Other than in connection with
any claims, suits, actions or proceeding against the Imation Companies or any of
their Affiliates by any of the Metatec Companies or any of their Affiliates, the
Imation Companies will, at and after the Closing, furnish the Metatec Companies
with such additional financial and operating data and other information about
the Purchased Assets and the Business as may be reasonably requested by the
Metatec Companies and which is reasonably available.
6.3 HSR Act Notification; Other Governmental Consents. Sellers shall
cause to be filed with the Federal Trade Commission and the Department of
Justice the notification and report form required for the transactions
contemplated by this Agreement and the agreements, documents and instruments
contemplated herein and any supplemental information that may be reasonably
requested in connection therewith, which notification and report form and which
supplemental information will comply with the requirements of the HSR Act. The
Imation Companies shall make as promptly as practicable the filings with, and
take all commercially reasonable steps to obtain the authorizations, approvals,
consents and other actions of, Governmental Authorities described in Section
4.8.
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6.4 Tax Matters. The Imation Companies shall, at their own expense,
preserve and keep the records in their possession relating to the preparation of
any Tax Return required to be filed by any Metatec Company (other than in
connection with claims for duty drawbacks) and such records as any Metatec
Company may reasonably require in connection with any other Tax matter,
including, without limitation, for the defense of any audit, examination,
administrative appeal or litigation of any such Tax Return (other than in
connection with claims for duty drawbacks) for a period of seven years from the
Closing Date and shall make such records available to any Metatec Company as may
be reasonably required by such Metatec Company. In the event the Imation
Companies wish to destroy such records after that time, the Imation Companies
shall first give ninety (90) days' prior written notice to the Metatec Companies
and the Metatec Companies shall have the right at their option and expense, upon
prior written notice given to the Imation Companies within that ninety (90) day
period, to take possession of the records within one hundred eighty (180) days
after the date of such notice.
6.5 Financial Statements. The Imation Companies shall use commercially
reasonable efforts to assist PricewaterhouseCoopers L.L.P. in the preparation of
(i) audited balance sheets of the Business as of December 31, 1996 and December
31, 1997 and the related audited statements of income, retained earnings and
cash flows for the three fiscal years ended December 31, 1997 and (ii) unaudited
statements of income, retained earnings and cash flows for the six-month periods
ended June 30, 1997 and June 30, 1998, in each case to the extent required to
enable Metatec to satisfy its Form 8-K filing requirement under the Securities
Exchange Act of 1934, as amended, provided that the Imation Companies shall not
be required to incur any out-of-pocket expenses in connection therewith.
6.6 Confidentiality. Except as required by Law or any Governmental
Authority, the Imation Companies shall maintain all Confidential Information
relating to the Business (other than such Confidential Information which (i)
relates to the Excluded Assets or the Excluded Obligations or (ii) after the
Closing is or becomes generally known to the public other than through any
breach of any provision of this Section 6.7 by any of the Imation Companies, or
received from a third party (provided such third party is not known by the
Imation Companies to be bound by an obligation of secrecy)) in strict confidence
in accordance with the procedures they use to protect their own information of a
similar nature and shall not use any such Confidential Information for any
purpose.
6.7 Exclusive Rights. None of the Imation Companies shall, directly or
indirectly, solicit (including without limitation by way of furnishing or making
available any non-public information concerning the Business) or engage in
negotiations or discussions with, disclose any of the terms of this Agreement
to, accept any offer from, furnish any information to, or otherwise cooperate,
assist or participate with any Person (other than the Metatec Companies and
their representatives) regarding any Acquisition Proposal (defined below),
except that any Person making an Acquisition Proposal may be informed of the
restrictions contained in this sentence. The Imation Companies agree to promptly
notify Metatec of any such Acquisition Proposal or any negotiations, discussions
or requests for information relating to any Acquisition Proposal. For purposes
of this Agreement,
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"Acquisition Proposal" shall mean any offer or proposal received by any of the
Imation Companies after the date of this Agreement and prior to the Closing Date
regarding the acquisition by purchase, merger, lease or otherwise of the
Business.
6.8 Reasonable Efforts. Subject to the terms and conditions of this
Agreement, the Imation Companies shall use all commercially reasonable efforts
to take all actions and do all things necessary to consummate the transactions
contemplated by this Agreement or the International Asset Transfer Agreement,
including without limitation using all commercially reasonable efforts to cause
the conditions set forth in Article VIII for which any Imation Company is wholly
or partially responsible to be satisfied, as soon as reasonably practicable.
Furthermore, subject to the terms and conditions of this Agreement, the Imation
Companies shall use all reasonable good faith efforts to negotiate the terms and
conditions of the Transition Services Agreement with the Metatec Companies as
soon as reasonably practicable. Subject to the terms and conditions of this
Agreement, International shall execute and deliver the International Asset
Transfer Agreement on the Closing Date.
6.9 Collection of Accounts Receivable. If the Imation Companies receive
payment for any of the Accounts Receivable which have been transferred to the
Metatec Companies pursuant to this Agreement or the International Asset Transfer
Agreement, the Imation Companies shall promptly remit the funds so collected to
the Metatec Companies.
ARTICLE VII
COVENANTS OF THE METATEC COMPANIES
Prior to the Closing, the Metatec Companies agree to perform each of
the following covenants:
7.1 HSR Act Notification; Other Governmental Consents. The Metatec
Companies will cause to be filed as promptly as practicable with the Federal
Trade Commission and the Department of Justice the notification and report form
required for the transactions contemplated by this Agreement and the agreements,
documents and instruments contemplated herein and any supplemental information
that may be reasonably requested in connection therewith, which notification and
report form and supplemental information will comply with the requirements of
the HSR Act. The Metatec Companies shall make as promptly as practicable the
filings with, and take all commercially reasonable steps to obtain the
authorizations, approvals, consents and other actions of, Governmental
Authorities described in Section 5.3(a).
7.2 Tax Matters. The Metatec Companies shall, at their own expense,
preserve and keep the records in their possession relating to the preparation of
any Tax Return required to be filed by any Imation Company and such records as
any Imation Company may reasonably require for the defense of any audit,
examination, administrative appeal or litigation of any such Tax Return for a
period of seven years from the Closing Date and shall make such records
available to the Imation
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Companies as may be reasonably required by the Imation Companies. In the event
the Metatec Companies wish to destroy such records after that time, the Metatec
Companies shall first give ninety (90) days' prior written notice to the Imation
Companies and the Imation Companies shall have the right at their option and
expense, upon prior written notice given to the Metatec Companies within that
ninety (90) day period, to take possession of the records within one hundred
eighty (180) days after the date of such notice.
7.3 Access; Retention of Records. The Metatec Companies will, at and
after the Closing, afford promptly to the Imation Companies and their agents
reasonable access during normal business hours to the properties, books,
records, employees and auditors of the Business, to the extent reasonably
necessary to permit the Imation Companies to determine any matter relating to
the Imation Companies' rights and obligations hereunder (including such Imation
Company's rights and obligations under Section 13.5) or relating to or arising
during any period ending on or before the Closing Date. Without limiting the
foregoing, the Metatec Companies shall also reasonably cooperate with the
Imation Companies in connection with claims, suits, actions and proceedings of
the types referred to in Section 13.5, including making available the personnel
of the Metatec Companies, whether as witnesses or for informational purposes.
The Metatec Companies shall, at their own expense, preserve and keep the
properties, books and records relating to the Business for a period of seven
years from the Closing Date. In the event the Metatec Companies wish to destroy
such records after that time, the Metatec Companies shall first give ninety (90)
days prior written notice to the Imation Companies and the Imation Companies
shall have the right at their option and expense, upon prior written notice
given to the Metatec Companies within that ninety (90) day period, to take
possession of the properties, books and records within one hundred eighty (180)
days after the date of such notice.
7.4 Confidentiality. Nothing contained herein shall negate the
obligations of the Metatec Companies under the Confidentiality Agreement.
7.5 Duty Drawback. After the date of this Agreement, the Metatec
Companies shall not make any claims, demands or inquiries relating to duty
drawback, as provided in 19 U.S.C. section 1313, as amended, on merchandise
exported, returned or destroyed by the Imation Companies in the ordinary course
of the Business prior to the Closing. Notwithstanding any other provision of
this Agreement, the Imation Companies shall retain any and all rights to such
duty drawback on merchandise exported, returned or destroyed by the Imation
Companies prior to the Closing, and the Metatec Companies waive any and all such
rights with respect to merchandise included in, or manufactured from, the
Purchased Assets. The Imation Companies shall have no obligation to maintain
records pertinent to, nor shall the Metatec Companies have any right of access
to the Imation Companies' records pertinent to, any such duty drawback claims of
the Metatec Companies.
7.6 Reasonable Efforts. Subject to the terms and conditions of this
Agreement, the Metatec Companies shall use all commercially reasonable efforts
to take all actions and do all things necessary to consummate the transactions
contemplated by this Agreement and the International
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Asset Transfer Agreement, including without limitation using all commercially
reasonable efforts to cause the conditions set forth in Article IX for which any
Metatec Company is wholly or partially responsible to be satisfied, as soon as
reasonably practicable. Furthermore, subject to the terms and conditions of this
Agreement, the Metatec Companies shall use all reasonable good faith efforts to
negotiate the terms and conditions of the Transition Services Agreement with the
Imation Companies as soon as reasonably practicable.
7.7 Financial Statements. The Metatec Companies shall reimburse the
Imation Companies promptly upon request for the Imation Companies' payment of
the fees and expenses of PricewaterhouseCoopers L.L.P. in connection with the
audit of the financial statements described in Section 6.5. Coopers and Xxxxxxx
L.L.P. has initially indicated to the Imation Companies that its fees will be
billed as follows: $75,000 on June 29, 1998, $75,000 on July 15, 1998, $25,000
on July 31, 1998, $25,000 on August 15, 1998, and any remaining unbilled fees on
August 31, 1998.
7.8 Non-Solicitation. Prior to the earlier of the Closing and May 5,
2000, the Metatec Companies and their Affiliates agree that they will not
solicit for hire or hire any employee of the Business, whether the Business is
owned by the Imation Companies or any other Person.
7.9 Inventory Matters. During the term of the Transition Services
Agreement, the Metatec Companies will purchase from the Imation Companies all of
their requirements of factory spare parts and factory supplies inventories used
exclusively in the Business, to the extent available, from the Menomonie
Facility. Promptly following the termination of the Transition Services
Agreement, the Metatec Companies will purchase from the Imation Companies the
factory spare parts and factory supplies inventories used exclusively in the
Business that are then located at the Menomonie Facility; provided, however,
that the Metatec Companies shall not be required to purchase (a) more than
$200,000 of such inventories or (b) such inventories as would not be useable
within a reasonable time in the ordinary course of the Business. The purchase
price for any such inventories shall be as agreed from time to time by the
Imation and the Metatec Companies.
ARTICLE VIII
CONDITIONS PRECEDENT
TO OBLIGATIONS OF THE METATEC COMPANIES
The obligations of the Metatec Companies under Articles II and III of
this Agreement are subject to the satisfaction or waiver by the Metatec
Companies of the following conditions precedent on or before the Closing Date:
8.1 Warranties True as of Both Present Date and Closing Date. The
representations and warranties of the Imation Companies contained herein and in
the Related Agreements shall have been true, accurate and correct in all
material respects on and as of the date of this Agreement and shall also be
true, accurate and correct in all material respects on and as of the Closing
Date with the same force and effect as though made by the Imation Companies on
and as of the Closing Date.
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8.2 Compliance with Agreements and Covenants. The Imation Companies
shall have performed and complied in all material respects with all of their
covenants, obligations and agreements contained in this Agreement and in their
Related Agreements to be performed and complied with by them on or prior to the
Closing Date.
8.3 Xxxx-Xxxxx-Xxxxxx. All waiting periods under the HSR Act shall have
expired or been earlier terminated without action by the Justice Department or
the Federal Trade Commission to prevent or materially alter the consummation of
the transactions contemplated by this Agreement and the Related Agreements.
8.4 Consents and Approvals. Purchasers shall have received written
evidence satisfactory to them that the consents listed on Schedule 8.4 have been
obtained. If the Imation Companies update any schedules as permitted by Section
15.1 then the Metatec Companies shall be permitted to update Schedule 8.4 within
five (5) Business Days after any such schedule update by the Imation Companies,
but only to add to such Schedule 8.4 any consents related to matters added to
any schedules by the Imation Companies after the date of this Agreement.
8.5 Related Agreements. Sellers shall have executed and delivered the
Assignment and Assumption Agreement and the License Agreement. The appropriate
Imation Companies and their Affiliates shall have executed and delivered the
Transition Services Agreement and such Transition Services Agreement shall be
reasonably satisfactory in all material respects to Purchasers. International
shall have executed and delivered the International Asset Transfer Agreement.
Metatec International and Minnesota Mining and Manufacturing Company shall have
entered into a lease concerning the facility currently leased by International
for use in the Business from Minnesota Mining and Manufacturing Company in
Breda, The Netherlands, such lease to substantially have the terms described in
Schedule 8.5. The closing contemplated by the International Asset Transfer
Agreement shall occur at the same time as the Closing.
8.6 Actions or Proceeding. No action or proceeding by any Governmental
Authority or other Person shall have been instituted or threatened which could
enjoin, restrain or prohibit, or could result in substantial damages in respect
of, any provision of this Agreement or any Related Agreement or the consummation
of the transactions contemplated hereby and thereby.
8.7 No Material Adverse Change. There shall have been no Material
Adverse Change since the date of the most recent balance sheet contained in the
Business Financial Statements.
8.8 Financial Statements. Metatec shall have received the financial
statements described in Section 6.5 in form and content sufficient to allow
Metatec to comply with its Form 8-K filing requirements under the Securities
Exchange Act of 1934, as amended.
8.9 Works Council. The Imation-Breda employee works council shall have
provided its positive advice to International regarding the transactions
contemplated hereunder.
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ARTICLE IX
CONDITIONS PRECEDENT
TO OBLIGATIONS OF THE IMATION COMPANIES
The obligations of the Imation Companies under Article II of this
Agreement are subject to the satisfaction or waiver by the Imation Companies of
the following conditions precedent on or before the Closing Date:
9.1 Warranties True as of Both Present Date and Closing Date. The
representations and warranties of the Metatec Companies contained herein and in
their Related Agreements shall have been true, accurate and correct in all
material respects on and as of the date of this Agreement and shall also be
true, accurate and correct in all material respects on and as of the Closing
Date with the same force and effect as though made by the Metatec Companies on
and as of the Closing Date.
9.2 Compliance with Agreements and Covenants. The Metatec Companies
shall have performed and complied in all material respects with all of its
covenants, obligations and agreements contained in this Agreement and in their
Related Agreements to be performed and complied with by them on or prior to the
Closing Date.
9.3 Xxxx-Xxxxx-Xxxxxx. All waiting periods under the HSR Act shall have
expired or been earlier terminated without action by the Justice Department or
the Federal Trade Commission to prevent or materially alter the consummation of
the transactions contemplated by this Agreement and the Related Agreements.
9.4 Actions or Proceeding. No action or proceeding by any Governmental
Authority or other Person shall have been instituted or threatened which could
enjoin, restrain or prohibit, or could result in substantial damages in respect
of, any provision of this Agreement or any Related Agreement or the consummation
of the transactions contemplated hereby and thereby.
9.5 Related Agreements. The Metatec Companies, as appropriate, shall
have executed and delivered the Assignment and Assumption Agreement, the License
Agreement, the Transition Services Agreement and the International Asset
Transfer Agreement and the Transition Services Agreement shall be reasonably
satisfactory in all material respects to the Imation Companies. The closing
contemplated by the International Asset Transfer Agreement shall occur at the
same time as the Closing.
9.6 Works Council. The Imation-Breda employee works council shall have
provided its positive advice to International regarding the transactions
contemplated hereunder.
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ARTICLE X
EMPLOYEES AND BENEFIT PLANS
10.1 Offer of Employment. Schedule 4.14(a) contains a list of all
Affected Employees of Sellers as of the date stated in such schedule. Schedule
4.14(a) shall be updated by Sellers immediately prior to the Closing Date to
reflect changes in the Fremont Employees and any changes to Schedule 10.1(a). On
the Closing Date, Metatec Acquisition shall offer employment to all those
Affected Employees who were employed at the Fremont Facility on the day
immediately preceding the Closing Date (the "Fremont Employees") and to those
Affected Employees who were employed at the Menomonie Facility immediately
preceding the Closing Date who are listed on Schedule 10.1(a) (such schedule to
be updated upon the mutual agreement of the parties) (the "Selected Menomonie
Employees"). The offer of employment shall involve an at will employment
relationship, shall include similar job responsibilities as those under which
the Affected Employees were employed immediately prior to the Closing Date; and
Metatec Acquisition shall offer employment at a rate of base pay equal to the
employee's base pay from Sellers as in effect on the date immediately prior to
the Closing Date, plus an amount such that the employee's before-tax base pay
from Metatec Acquisition will be six percent greater than the employee's
before-tax base pay from Sellers and such rate of pay shall not be reduced
during the 12 month period immediately following the Closing Date except in
connection with a pay rate adjustment equally affecting substantially all of the
employees of Metatec and its Affiliates. Each Fremont Employee and each Selected
Menomonie Employee who accepts any such offer of employment shall be referred to
herein as a "Hired Employee." Effective as of the Closing Date, Metatec
Acquisition shall establish benefit plans covering Hired Employees which provide
those benefits described in Schedule 10.1(b) in addition to any benefits
specifically described in this Article X. If Metatec Acquisition terminates the
employment of a Hired Employee without cause, then Metatec Acquisition shall pay
severance benefits in accordance with and in the amount specified in the table
listed in Schedule 10.1(c). The obligations of Metatec Acquisition set forth in
this Section 10.1 shall not apply to any Contract Employees. Notwithstanding any
other provisions of this Article X, subject to the agreement expressly set forth
above prohibiting reductions in pay rates during the 12-month period following
the Closing Date, the Metatec Companies shall have the right to change the terms
and conditions of employment, including without limitation rates of pay and
benefits, provided to its employees from time to time after the Closing Date.
10.2 Seniority and Certain Payables. Effective as of the Closing Date,
Metatec Acquisition shall credit the Hired Employees with seniority for
vacation, promotion, compensation and employee welfare benefits equal to that
which such Hired Employees were credited with by the Sellers as of the Closing
Date for service with the Sellers and their predecessors. Sellers shall pay at
or prior to the Closing all accrued amounts for vacation, compensation and other
employee welfare benefits owing to Affected Employees, except for any such
amounts specifically assumed by Metatec Acquisition in writing and as reflected
on the Working Capital Statement.
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10.3 401(k) Plan. If not already adopted by Purchasers prior to the
Closing Date, as soon as practicable after the Closing Date, Purchasers shall
establish an individual account plan qualified under section 401(a) of the Code
and containing a cash or deferred arrangement meeting the requirements of
section 401(k) of the Code, which shall provide benefits described in Schedule
10.1(b) (the "Purchasers' 401(k) Plan").
10.4 No Third Party Beneficiaries. It is understood and agreed between
the parties that all provisions contained in this Agreement with respect to
employee benefit plans or employee compensation are included for the sole
benefit of the respective parties hereto and do not and shall not create any
right in any other Person, including any Hired Employee, any participant in any
benefit or compensation plan or any beneficiary thereof.
ARTICLE XI
CLOSING
11.1 Closing. The Closing shall take place at the offices of Xxxxx,
Xxxxx & Xxxxx, Chicago, Illinois, at 10:00 a.m. on August 31, 1998 or, if all of
the closing conditions set forth in Articles VIII and IX have not then been
satisfied, on the date that is five (5) Business Days after all of the closing
conditions set forth in Articles VIII and IX have been satisfied. The Closing,
and all transactions to occur at the Closing, shall be deemed to have taken
place at, and shall be effective as of, the close of business on the Closing
Date.
11.2 Deliveries by the Imation Companies. At the Closing, the Imation
Companies shall deliver to the Metatec Companies the following:
(a) The Assignment and Assumption Agreement, duly executed by
Sellers;
(b) Originals or copies of, and assignments duly executed by
the Imation Companies of, all of the following: (i) the Real Property
Leases; (ii) the Personal Property Leases; and (iii) all other
Purchased Contracts and Permits;
(c) Certificates of title for all Vehicles, duly endorsed for
transfer to the Metatec Companies, and keys for all Vehicles;
(d) Written evidence of the consents referred to in
Section 8.4;
(e) A certificate, dated the Closing Date, of the Imation
Companies certifying as to the compliance by the Imation Companies with
Sections 8.1 and 8.2;
(f) A certificate of the secretary of each of the Sellers,
each such certificate certifying resolutions of the board of directors
or similar governing body of the applicable Seller (i) approving and
authorizing the execution, delivery and performance of this
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Agreement and its Related Agreements and the consummation by such
Seller of the transactions contemplated hereby and thereby and (ii)
with respect to Sellers only, relating to the Business;
(g) The certificate of incorporation or similar instrument of
each of the Sellers, certified by the appropriate Secretary of State or
equivalent Person of the jurisdiction of incorporation of each of the
Sellers and the bylaws or similar instrument of each of the Sellers,
each certified by the secretary of the applicable Seller;
(h) A Certificate of Good Standing for Sellers from the
Secretary of State of the State of Delaware;
(i) An opinion, dated the Closing Date, of Xxxxx, Xxxxx &
Xxxxx, counsel for Sellers, substantially in the form set forth on
Exhibit E;
(j) An opinion, dated the Closing Date, of Van Benthem &
Keulen Advocaten, counsel for International, substantially in the form
set forth in Exhibit F;
(k) The closing documents to be delivered pursuant to the
International Asset Transfer Agreement;
(l) The License Agreement, the Transition Services Agreement
and the International Asset Transfer Agreement, duly executed by the
appropriate Imation Companies;
(m) A written statement reasonably satisfactory to Purchasers
from each Person holding a Lien upon any of the Purchased Assets,
confirming the release of such Lien; and
(n) Such other documents and instruments as may be reasonably
required by the Metatec Companies to consummate the transactions
contemplated by this Agreement and the Related Agreements.
11.3 Deliveries by Purchasers. At the Closing, Purchasers shall make
the payments described in Section 3.1 and deliver to the Imation Companies the
following:
(a) The Assignment and Assumption Agreement, duly executed by
Metatec Acquisition;
(b) A certificate, dated the Closing Date, of the Metatec
Companies, certifying as to compliance by the Metatec Companies with
Sections 9.1 and 9.2;
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(c) A certificate of the secretary of each Purchaser
certifying resolutions of the board of directors or similar governing
body of each Purchaser approving and authorizing the execution,
delivery and performance of this Agreement and its Related Agreements
and the consummation by the Purchasers of the transactions contemplated
hereby and thereby;
(d) The certificate of incorporation or similar instrument of
each Purchaser, certified by the Secretary of State or equivalent
Person of the jurisdiction of incorporation of each Purchaser, and the
by-laws or similar instrument of each Purchaser, each certified by the
secretary of the applicable Purchaser;
(e) A Certificate of Good Standing for Metatec and Metatec
Acquisition from the Secretary of State or equivalent Person of the
States of Ohio and Florida, as the case may be.
(f) An opinion, dated the Closing Date, of Xxxxx & Xxxxxxxxx
LLP, counsel for the Metatec Companies, substantially in the form set
forth on Exhibit G;
(g) An opinion, dated the Closing Date, of Trenite Van Doorne,
counsel for Metatec International, substantially in the form set forth
on Exhibit H.
(h) The closing documents to be delivered pursuant to the
International Asset Transfer Agreement;
(i) The License Agreement, the Transition Services Agreement,
the Note and the International Asset Transfer Agreement, duly executed
by the appropriate Metatec Companies; and
(j) Such other documents and instruments as may be reasonably
required by the Imation Companies to consummate the transactions
contemplated by this Agreement and the Related Agreements.
ARTICLE XII
TERMINATION
12.1 Termination. This Agreement may be terminated at any time on or
prior to the Closing Date:
(a) by the mutual written agreement of the Imation Companies
and the Metatec Companies;
(b) by the Metatec Companies, if there shall have been a
material breach of any covenant, representation or warranty of the
Imation Companies hereunder or under any of their Related Agreements
and such breach shall not have been remedied within thirty (30)
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days after receipt by the Imation Companies of a notice in writing from
the Metatec Companies specifying the breach and requesting such be
remedied;
(c) by the Imation Companies, if there shall have been a
material breach of any covenant, representation or warranty of the
Metatec Companies hereunder or under any of their Related Agreements
and such breach shall not have been remedied within thirty (30) days
after receipt by the Metatec Companies of notice in writing from the
Imation Companies specifying the breach and requesting such be
remedied; or
(d) by the Imation Companies or the Metatec Companies, if the
Closing shall not have taken place on or before October 15, 1998;
provided, that the right to terminate this Agreement under this clause
(d) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of or resulted in
the failure of the Closing to occur on or before such date.
12.2 Effect of Termination. If this Agreement is terminated pursuant to
Section 12.1, all obligations of the parties hereunder shall terminate, except
for the obligations set forth in Sections 7.4, and 15.2 and 15.10, which shall
survive the termination of this Agreement, and except that no such termination
shall relieve any party from liability for any prior wilful breach of this
Agreement.
ARTICLE XIII
INDEMNIFICATION
13.1 Survival; Remedy for Breach. (a) The representations and
warranties contained in this Agreement or in any Specified Agreement shall
survive the Closing until March 31, 2000, at which time they shall expire,
except that the representations and warranties in Section 4.17 shall survive the
Closing for a period of five years, at which time they shall expire. No claim
regarding a breach of any such representation or warranty shall be made for the
first time after the expiration date applicable to such representation or
warranty. The agreements and covenants of the parties contained in this
Agreement or in any Closing Document shall survive the Closing; provided, that
no claim regarding a breach of any agreement or covenant contained in this
Agreement occurring before the Closing and known prior to the Closing to the
party claiming indemnification shall be made after the Closing Date.
(b) Except as provided in Section 14.2, and except in the case
of a claim of fraud or a claim for specific performance relating to the failure
of the Imation Companies to deliver the Purchased Assets or perform any of their
other respective obligations under this Agreement in accordance with the terms
and conditions of this Agreement, the sole and exclusive remedy of the Metatec
Companies and the Imation Companies for any breach of any covenant or agreement,
or any inaccuracy or other breach of any representation or warranty, contained
in this Agreement or any Specified Agreement shall be the indemnities contained
in Sections 13.2 and 13.3, respectively, and the parties hereby waive, release
and agree not to assert any other right, whether arising by statute,
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common law, equity or otherwise, in connection therewith or otherwise relating
to the transactions contemplated by this Agreement.
13.2 Indemnification by the Imation Companies . (a) Subject to Sections
13.1, 13.2(b) and 13.2(c), the Imation Companies, jointly and severally, agree
to indemnify, defend and hold harmless the Metatec Companies and their
respective officers, directors, employees and Affiliates from and against any
and all Losses incurred or suffered by the Metatec Companies arising out of any
of the following:
(i) any breach of or any inaccuracy in any
representation or warranty made by the Imation Companies in this
Agreement or any Specified Agreement;
(ii) any material breach of or material failure by
the Imation Companies to perform any covenant or obligation of the
Imation Companies set out or contemplated in this Agreement or any
Specified Agreement;
(iii) the Excluded Assets and the Excluded
Obligations;
(iv) the fees of Xxxxxx Xxxxxxx & Company LLC owed by
the Imation Companies or any fee claimed from the Imation Companies by
any other broker or finder as a result of the transactions contemplated
hereby; or
(v) the failure of the Imation Companies to comply
with any applicable Bulk Sales Laws.
(b) The liability of the Imation Companies to provide
indemnification pursuant to Section 13.2 shall be limited as follows:
(i) The Imation Companies shall not be liable with
respect to any matter referred to in Sections 13.2(a)(i) or (ii), until
the total of all Losses with respect to such matters exceeds $250,000
and then only for the amount by which such Losses exceed $250,000. The
Imation Companies' aggregate liability under Sections 13.2(a)(i) and
(ii) shall not exceed $23,000,000.
(ii) Notwithstanding anything to the contrary in this
Section 13.2(b), the limits on liability set forth in this Section
13.2(b)(i) shall not apply to any payments required to be made under
Section 3.2(c) or Section 3.5.
(c) The amount for which the Imation Companies shall be liable
in respect of any Loss pursuant to Section 13.2(a) shall be reduced to the
extent that any Metatec Company or any Affiliate thereof shall realize any net
proceeds recovered from insurers or other third parties with respect to such
Loss. If any Metatec Company shall have received or shall have had paid on its
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behalf an indemnity payment in respect of a Loss and shall subsequently receive
directly or indirectly such proceeds, then such Metatec Company shall promptly
pay to the Imation Companies the net amount of such proceeds or, if less, the
amount of such indemnity payment. The Metatec Companies shall promptly recover
insurance proceeds that may be due to the Metatec Companies.
13.3 Indemnification by the Metatec Companies. (a) Subject to Sections
13.1, and 13.3(b), the Metatec Companies, jointly and severally, agree to
indemnify, defend and hold harmless each of the Imation Companies and their
respective officers, directors, employees and Affiliates from and against any
and all Losses incurred or suffered by them arising out of any of the following:
(i) any breach of or any inaccuracy in any
representation or warranty made by the Metatec Companies in this
Agreement or any Specified Agreement;
(ii) any material breach of or material failure by
the Metatec Companies to perform any covenant or obligation of the
Metatec Companies set out or contemplated in this Agreement or any
Specified Agreement;
(iii) the Assumed Obligations;
(iv) any liability or obligation arising from the
operation of the Business or the Assets by the Metatec Companies (or
any of its Affiliates, or their respective successors or assigns) from
and after the Closing (including, without limitation, any liability or
obligation arising out of or related to the removal of Assets from the
Menomonie Facility);
(v) any liability or obligation relating to Licensed
Products (as defined in the License Agreement) under the License
Agreement;
(vi) any liability or obligation of the Metatec
Companies pursuant to Article X or Section 6 of the International Asset
Transfer Agreement;
(vii) any liability or obligation arising from the
failure of any Metatec Company to hire any Affected Employee or any of
the Transferred Employees (as defined in the International Asset
Transfer Agreement);
(viii) any liability or obligation of the Metatec
Companies pursuant to the International Asset Transfer Agreement; or
(ix) any fee claimed from the Metatec Companies by
Legg, Mason, Wood, Walker, Inc. or any fee claimed from the Metatec
Companies by any other broker or finder as a result of the transactions
contemplated hereby.
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(b) The amount for which the Metatec Companies shall be liable
in respect of any Loss pursuant to Section 13.3(a) shall be reduced to the
extent that the Imation Companies shall realize any net proceeds recovered from
insurers or other third parties with respect to such Loss. If any Imation
Company shall have received or shall have had paid on its behalf an indemnity
payment in respect of a Loss and shall subsequently receive directly or
indirectly such proceeds, then such Imation Company shall promptly pay to the
Metatec Companies the net amount of such proceeds or, if less, the amount of
such indemnity payment. The Imation Companies shall promptly recover insurance
proceeds that may be due to the Imation Companies.
13.4 Claims. As soon as is reasonably practicable after becoming aware
of a claim for indemnification under this Agreement not involving any claim, or
the commencement of any suit, action or proceeding, of the type described in
Section 13.5, the Indemnified Person shall promptly give notice to the
Indemnifying Person of such claim and the amount the Indemnified Person will be
entitled to receive hereunder from the Indemnifying Person; provided, that the
failure of the Indemnified Person to give notice shall not relieve the
Indemnifying Person of its obligations under this Article XIII except to the
extent (if any) that the Indemnifying Person shall have been actually prejudiced
thereby.
13.5 Notice of Third Party Claims; Assumption of Defense. The
Indemnified Person shall give notice as promptly as is reasonably practicable to
the Indemnifying Person of the assertion of any claim, or the commencement of
any suit, action or proceeding, by any Person not a party hereto in respect of
which indemnity may be sought under this Agreement; provided, that the failure
of the Indemnified Person to give notice shall not relieve the Indemnifying
Person of its obligations under this Article XIII except to the extent (if any)
that the Indemnifying Person shall have been actually prejudiced thereby. The
Indemnifying Person may, at its own expense, (a) participate in the defense of
any claim, suit, action or proceeding and (b) upon notice to the Indemnified
Person and the Indemnifying Person's delivery to the Indemnified Person of a
written agreement that the Indemnified Person is entitled to indemnification
pursuant to Section 13.2 or 13.3 for all Losses arising out of such claim, suit,
action or proceeding, at any time during the course of any such claim, suit,
action or proceeding, assume the defense thereof; provided, that (i) the
Indemnifying Person's counsel is reasonably satisfactory to the Indemnified
Person and (ii) the Indemnifying Person shall thereafter consult with the
Indemnified Person upon the Indemnified Person's reasonable request for such
consultation from time to time with respect to such claim, suit, action or
proceeding. If the Indemnifying Person assumes such defense, the Indemnified
Person shall have the right (but not the obligation) to participate in the
defense thereof and to employ counsel, at its own expense, separate from the
counsel employed by the Indemnifying Person. If, however, the Indemnified Person
reasonably determines in its judgment that representation by the Indemnifying
Person's counsel of both the Indemnifying Person and the Indemnified Person
would present such counsel with a conflict of interest, then such Indemnified
Person may employ separate counsel to represent or defend it in any such claim,
action, suit or proceeding, and the Indemnifying Person shall pay the fees and
disbursements of such separate counsel. Whether or not the Indemnifying Person
chooses to defend
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or prosecute any such claim, suit, action or proceeding, all of the parties
hereto shall cooperate in the defense or prosecution thereof.
13.6 Settlement or Compromise. Any settlement or compromise made or
caused to be made by the Indemnified Person or the Indemnifying Person, as the
case may be, of any such claim, suit, action or proceeding of the kind referred
to in Section 13.5 shall also be binding upon the Indemnifying Person or the
Indemnified Person, as the case may be, in the same manner as if a final
judgment or decree had been entered by a court of competent jurisdiction in the
amount of such settlement or compromise; provided, that no obligation,
restriction or Loss shall be imposed on the Indemnified Person as a result of
such settlement without its prior written consent. The Indemnified Person will
give the Indemnifying Person at least thirty (30) days' notice of any proposed
settlement or compromise of any claim, suit, action or proceeding it is
defending, during which time the Indemnifying Person may reject such proposed
settlement or compromise; provided, that from and after such rejection, the
Indemnifying Person shall be obligated to assume the defense of and full and
complete liability and responsibility for such claim, suit, action or proceeding
and any and all Losses in connection therewith in excess of the amount of
unindemnifiable Losses which the Indemnified Person would have been obligated to
pay under the proposed settlement or compromise.
13.7 Losses in Connection with Third Party Claims. The definitions of
"Loss" and "Losses" shall be deemed to include indirect, special, exemplary,
punitive and consequential damages if such Loss or Losses arise out of any
claim, suit, action or proceeding by any Person not a party (or an Affiliate of
a party) to this Agreement in respect of which indemnity may be sought under
this Agreement.
ARTICLE XIV
NON-COMPETITION
14.1 Non-Competition. Each of the Imation Companies, in order to induce
the Metatec Companies to enter into this Agreement, expressly covenants and
agrees, jointly and severally, that for a period of two years from and after the
Closing Date, none of the Imation Companies or any of their respective
Affiliates will own, manage, operate or control any Person, which is at the time
engaged, wholly or partly, in the use of duplication and fulfilment services of
pre-recorded optical media equipment in the markets traditionally served by the
Business, provided that the restrictions contained in this Section 14.1 shall
not apply to the operations or activities of the Imation Companies or any of
their respective Affiliates in the video disk business. Nothing in this Section
14.1 shall prevent the Imation Companies from licensing third parties under
Imation's Intellectual Property to make, use and sell any products, including
CD-ROM and DVD-ROM.
To the extent that any part of this Section 14.1 may be invalid, illegal or
unenforceable for any reason, it is intended that such part shall be enforceable
to the extent that a court of competent jurisdiction shall determine that such
part if more limited in scope would have been enforceable and
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such part shall be deemed to have been so written and the remaining parts shall
as written be effective and enforceable in all events.
14.2 Equitable Relief. The Imation Companies agree that damages would
be an inadequate remedy for any actual or threatened breach of Section 14.1 and
that the Metatec Companies shall, in addition to other potential remedies
available at law, be entitled to equitable relief in the form of preliminary and
permanent injunctions without bond or other security upon any actual or
threatened breach of Section 14.1.
ARTICLE XV
MISCELLANEOUS
15.1 Disclosure Schedules. The Imation Companies may update any
Schedule referred to in this Agreement from time to time prior to or at the
Closing to reflect matters occurring after the date hereof, by notice in
accordance with the terms of this Agreement. Such update will be effective to
cure and correct for all other purposes any immaterial breach of any
representation, warranty, agreement or covenant which would have existed if the
Imation Companies had not made such update unless such breaches are material in
the aggregate, in which event such update shall not cure and correct such
breaches, and all references to any Schedule hereto which is updated as provided
in this Section 15.1 shall, for all purposes, whether or not the Closing occurs,
be deemed to be a reference to such Schedule as so updated. The Metatec
Companies agree that any disclosure by the Imation Companies in any Schedule
attached hereto shall constitute a disclosure under each other Schedule referred
to herein, whether or not such disclosure is specifically referenced within such
other Schedule.
15.2 Expenses. Except as otherwise provided herein, each party hereto
shall bear its own expenses with respect to the transactions contemplated
hereby. Purchasers and Sellers each shall pay one-half of any filing fee
required under the HSR Act. The Imation Companies shall pay all sales, use,
stamp, transfer, value-added and like Taxes, if any, excluding income and
capital gains Taxes of any Metatec Company, which are required to be paid in
connection with the transfer of the Purchased Assets pursuant hereto and the
assets sold to Metatec International pursuant to the International Asset
Transfer Agreement, and shall pay all recording and filing fees (and the fees
and costs of any agent retained to effect any such recordations or filings)
required to be paid in connection with the transfer of the Purchased Assets
pursuant to this Agreement and the assets sold to Metatec International pursuant
to the International Asset Transfer Agreement or any agreement, document or
instrument contemplated herein or therein; provided that, for the purposes of
determining California State sales or use Taxes, the Metatec Companies will use
the appraised value of the Purchased Assets at the Fremont Facility for which
the Metatec Companies have obtained a specific appraisal ($3,296,000 maximum)
and will use all commercially reasonable efforts to obtain the 5% exemption
potentially available under California Code Section 6377, and the parties hereto
will reasonably cooperate to obtain all other applicable exemptions or
reductions; provided further that, to the extent the Metatec Companies receive
California State investment Tax credits on the
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Purchased Assets at the Fremont Facility and use the same to offset California
income Taxes in future years, the Metatec Companies will pay the amount of such
credits to the Imation Companies from time to time as such credits are used up
to a maximum aggregate amount not to exceed the amount of transfer Taxes paid by
the Imation Companies pursuant to this Section 15.2 in connection with the
transfer of the Purchased Assets at the Fremont Facility.
15.3 Amendment. This Agreement may be amended, modified or
supplemented, but only in writing signed by the parties.
15.4 Notices. Any notice, request, instruction or other document to be
given hereunder by a party hereto shall be in writing and shall be deemed to
have been given (a) when received if given in person or by courier or a courier
service, (b) on the date of transmission if sent by telex, facsimile or other
wire transmission (receipt confirmed) or (c) five (5) Business Days after being
deposited in the mail, certified or registered, postage prepaid:
If to any Imation Company, addressed as follows:
Imation Corp.
0 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to any Metatec Company, addressed as follows:
Metatec Acquisition Corp.
c/o Metatec Corporation
0000 Xxxxxxx Xxxx.
Xxxxxx, Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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with a copy to:
Xxxxx & Xxxxxxxxx LLP
00 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Attention: Xxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.
15.5 Payments in Dollars. Except as otherwise provided herein or in a
Related Agreement, all payments pursuant hereto shall be made in U.S. Dollars,
in same day or immediately available funds, without any setoff, deduction or
counterclaim whatsoever.
15.6 Waivers. The failure of a party hereto at any time or times to
require performance of any provision hereof shall in no manner affect its right
at a later time to enforce the same. No waiver by a party of any condition or of
any breach of any term, covenant, representation or warranty contained in this
Agreement shall be effective unless in writing, and no waiver in any one or more
instances shall be deemed to be a further or continuing waiver of any such
condition or breach in other instances or a waiver of any other condition or
breach of any other term, covenant, representation or warranty.
15.7 Bulk Sales. The parties hereby waive compliance with the
requirements of (a) all applicable state Tax laws that may require notification
of state taxing authorities and related actions in respect of bulk sales of
assets outside of the ordinary course of business and (b) any bulk transfer laws
(such as Article 6 of the Uniform Commercial Code as enacted in any state) or
similar legislation applicable to the transactions provided for in this
Agreement, and the Metatec Companies shall have no liability with respect to any
failure by any Imation Company to comply therewith.
15.8 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties and their respective successors and
assigns; provided, however, that neither this Agreement, any Related Agreement
or other document or instrument contemplated herein nor any right or obligation
hereunder or thereunder may be assigned by a party without the consent of the
other parties. Notwithstanding the foregoing, no party shall have the right to
assign any right or obligation under this Agreement or any Related Agreement or
any other document or instrument contemplated herein if such assignment may
reasonably be expected to result in (a) any material increase in the obligations
of the other parties under this Agreement or any agreement, document or
instrument contemplated herein or (b) the failure of the Closing to occur or a
delay in the occurrence of the Closing.
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15.9 No Third Party Beneficiaries. This Agreement is solely for the
benefit of the parties hereto and, to the extent provided herein, their
respective Affiliates, and no provision of this Agreement shall be deemed to
confer upon any other third parties any remedy, claim, liability, reimbursement,
cause of action or other right.
15.10 Publicity. Prior to the Closing Date, except as required by Law
or the rules of NASDAQ or any stock exchange (in which case the affected party
shall give the other parties hereto notice and an opportunity to review any
required public announcement or other publicity), no public announcement or
other publicity regarding the transactions referred to herein shall be made by
the Metatec Companies or the Imation Companies or any of their respective
Affiliates, officers, directors, employees, representatives or agents, without
the prior written agreement of the Metatec Companies and the Imation Companies,
in any case, as to form, content, timing and manner of distribution or
publication; provided, that nothing in this Section 15.10 shall prevent such
parties from discussing such transactions with those Persons whose approval,
agreement or opinion, as the case may be, is required for consummation of such
transactions. Such parties shall exercise all reasonable efforts to assure that
such Persons will agree to keep confidential any information relating to this
Agreement or any agreement, document or instrument contemplated herein.
15.11 Further Assurances. The Imation Companies and the Metatec
Companies agree to cooperate fully with each other in connection with obtaining
the satisfaction of the conditions set forth in Articles VIII and IX. The
Imation Companies and the Metatec Companies agree to execute and deliver such
other documents, certificates, agreements and other writings and to take such
other actions as may be reasonable, necessary or desirable in order to
consummate or implement expeditiously the transactions contemplated by this
Agreement and any agreement, document or instrument contemplated herein.
15.12 Severability. If any provision of this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality or enforceability of
the other provisions hereof shall not be affected thereby, and there shall be
deemed substituted for the provision at issue a valid, legal and enforceable
provision as similar as possible to the provision at issue.
15.13 Remedies Cumulative. The remedies provided in this Agreement
shall be cumulative and shall not preclude the assertion or exercise of any
other rights or remedies available under law, in equity or otherwise.
15.14 Entire Understanding. This Agreement and the Related Agreements
set forth the entire agreement and understanding of the parties hereto with
respect to the transactions contemplated hereby and supersede any and all prior
agreements, arrangements and understandings among the parties relating to the
subject matter hereof.
15.15 Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
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STATE OF DELAWARE WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW
THEREOF. The State Courts of Delaware and the United States District Court for
Delaware shall have non-exclusive jurisdiction over any and all claims, lawsuits
and litigation relating to or arising out of this Agreement, the subject matter
hereof or the transactions contemplated hereby. Each of the parties hereto
hereby irrevocably (a) submits to the personal jurisdiction of such courts over
such party in connection with any litigation, proceeding or other legal action
arising out of or in connection with this Agreement, (b) waives to the fullest
extent permitted by Law any objection to the venue of any such litigation,
proceeding or action which is brought in any such court and (c) agrees to the
mailing of service of process to the address specified above for such party as
an alternative method of service of process in any legal proceeding brought in
any such court.
15.16 Waiver of Jury Trial. EACH PARTY HERETO WAIVES THE RIGHT TO A
TRIAL BY JURY IN ANY DISPUTE ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT, ANY RELATED AGREEMENT, OR ANY MATTERS DESCRIBED OR CONTEMPLATED
HEREIN OR THEREIN AND AGREES TO TAKE ANY AND ALL ACTION NECESSARY OR APPROPRIATE
TO EFFECT SUCH WAIVER.
15.17 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same original instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered as of the date first above written.
IMATION CORP.
By: /s/ XXXXXXX X. XXXXXXX
------------------------------
Name: XXXXXXX X. XXXXXXX
----------------------------
Title: CEO
---------------------------
IMATION ENTERPRISES CORP.
By: /s/ XXXXXXX X. XXXXXXX
------------------------------
Name: XXXXXXX X. XXXXXXX
----------------------------
Title: CEO
---------------------------
IMATION INTERNATIONAL B.V.
By: /s/ XXXXXXX X. XXXXXXX
------------------------------
Name: XXXXXXX X. XXXXXXX
----------------------------
Title: CEO
---------------------------
METATEC ACQUISITION CORP.
By: /s/ XXXXXXX X. XXXXXXX
------------------------------
Name: XXXXXXX X. XXXXXXX
----------------------------
Title: PRESIDENT
---------------------------
METATEC INTERNATIONAL B.V.
By: Metatec Corporation, managing director
By: /s/ XXXXXXX X. XXXXXXX
---------------------------
Name: XXXXXXX X. XXXXXXX
-------------------------
Title: CHIEF EXECUTIVE OFFICER
------------------------
METATEC CORPORATION
By: /s/ XXXXXXX X. XXXXXXX
------------------------------
Name: XXXXXXX X. XXXXXXX
----------------------------
Title: CHIEF EXECUTIVE OFFICER
---------------------------
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List of Omitted Schedules
-------------------------
Schedule 1.1(a) Knowledge
Schedule 1.1(b) Transition Services Agreement
Schedule 2.1(a) Equipment
Schedule 2.1(b) Vehicles
Schedule 2.2(a) Real Property Leases
Schedule 2.2(b) Personal Property Leases
Schedule 2.2(e) Other Contracts
Schedule 2.2(g) Transferred Permits
Schedule 2.3(b) Excluded Contracts
Schedule 2.3(n) Other Excluded Assets
Schedule 3.4 Preliminary Purchase Price Allocation
Schedule 4.3 Seller Conflicts
Schedule 4.4 Financial Statements
Schedule 4.5 Liens
Schedule 4.7 Absence of Certain Changes
Schedule 4.8 Consents and Approvals
Schedule 4.9 Certain Contracts and Leases
Schedule 4.10 Inventory Exceptions
Schedule 4.11 Accounts Receivable Exceptions
Schedule 4.14(a) Employee Matters
Schedule 4.14(b) Contract Employees
Schedule 4.14(c) Breda Affected Employees
Schedule 4.17 Environmental Matters
Schedule 4.18 Litigation
Schedule 5.3(a) Metatec Company Consents
Schedule 5.3(b) Metatec Company Conflicts
Schedule 6.1 Conduct of Business
Schedule 8.4 Required Consents and Approvals
Schedule 8.5 Terms of Breda Lease
Schedule 10.1(a) Selected Menomonie Employees
Schedule 10.1(b) Benefits
Schedule 10.1(c) Severance Benefits
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List of Omitted Exhibits
------------------------
EXHIBITS
Exhibit A Form of Assignment and Assumption Agreement
Exhibit B Form of International Asset Transfer Agreement
Exhibit C Form of Note
Exhibit D Form of License Agreement
Exhibit E Form of Opinion of Counsel for Imation Companies
Exhibit F Form of Opinion of Van Benthem & Keulen
Exhibit G Form of Opinion of Counsel for the Metatec Companies
Exhibit H Form of Opinion of Trenite Van Doorne
