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SECOND
AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
by and among
OEP IMAGING CORPORATION
and
POLAROID CORPORATION
and
THE POLAROID SUBSIDIARIES IDENTIFIED HEREIN
Dated as of July 3, 2002
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.............................................................................................1
Section 1.01. Defined Terms...............................................................................1
ARTICLE II PURCHASE AND SALE OF BUSINESS.........................................................................13
Section 2.01. Purchase and Sale of Business..............................................................13
Section 2.02. Excluded Assets............................................................................16
Section 2.03. Assumed Liabilities........................................................................17
Section 2.04. Excluded Liabilities.......................................................................18
Section 2.05. Consideration; Cash and Cash Equivalents...................................................20
Section 2.06. Deposit Amount.............................................................................20
ARTICLE III THE CLOSING..........................................................................................21
Section 3.01. Closing....................................................................................21
Section 3.02. Consideration; Deliveries..................................................................21
Section 3.03. Purchase Price Allocation..................................................................23
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLERS.........................................................23
Section 4.01. Organization and Good Standing.............................................................23
Section 4.02. Authority Relative to this Agreement.......................................................24
Section 4.03. Governmental Consents and Approvals........................................................25
Section 4.04. No Violations..............................................................................25
Section 4.05. Contracts; Compliance......................................................................25
Section 4.06. Accounts Receivable; Accounts Payable......................................................26
Section 4.07. Inventory..................................................................................26
Section 4.08. All Assets.................................................................................27
Section 4.09. Financial Statements.......................................................................27
Section 4.10. Relationship with Customers and Suppliers..................................................27
Section 4.11. No Changes.................................................................................28
Section 4.12. Litigation.................................................................................29
Section 4.13. No Default.................................................................................29
Section 4.14. No Violation of Law........................................................................29
Section 4.15. Environmental Matters......................................................................30
Section 4.16. Employee Benefits..........................................................................31
Section 4.17. Real Property..............................................................................33
Section 4.18. Title to and Use of Property...............................................................35
Section 4.19. Brokers....................................................................................35
Section 4.20. Intellectual Property......................................................................35
Section 4.21. Labor Matters..............................................................................37
Section 4.22. Tax Matters................................................................................37
Section 4.23. Products Liability.........................................................................38
Section 4.24. Debt Repayment.............................................................................38
Section 4.25. Investment.................................................................................39
Section 4.26. Representations and Warranties.............................................................39
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PURCHASER........................................................39
Section 5.01. Organization...............................................................................39
Section 5.02. Authority Relative to This Agreement.......................................................39
Section 5.03. No Violations..............................................................................39
Section 5.04. Consents and Approvals.....................................................................40
Section 5.05. Litigation.................................................................................40
Section 5.06. Financing..................................................................................40
Section 5.07. Brokers....................................................................................40
ARTICLE VI COVENANTS.............................................................................................41
Section 6.01. Conduct of Business by the Polaroid Entities Pending the Closing...........................41
Section 6.02. Access and Information.....................................................................42
Section 6.03. Filings; Other Actions.....................................................................42
Section 6.04. Public Announcements.......................................................................43
Section 6.05. Acquired Assets............................................................................43
Section 6.06. Bankruptcy Actions.........................................................................43
Section 6.07. Tax Matters................................................................................44
Section 6.08. Certain Employee Benefit Matters...........................................................47
Section 6.09. WARN Act Notices...........................................................................49
Section 6.10. Additional Matters.........................................................................49
Section 6.11. Guarantees.................................................................................50
Section 6.12. No Solicitations...........................................................................50
Section 6.13. Assumed Contracts; Cure Amounts............................................................50
Section 6.14. Title Insurance............................................................................51
Section 6.15. Surveys....................................................................................52
Section 6.16. Zoning Compliance..........................................................................52
Section 6.17. Bulk Transfer Laws.........................................................................52
Section 6.18. Use of Name................................................................................52
Section 6.19. Treatment of Intercompany Payables and Intercompany Receivables............................52
Section 6.20. Closing Date Dividends and Share Buyback...................................................54
ARTICLE VII ADDITIONAL POST-CLOSING COVENANTS....................................................................54
Section 7.01. Further Assurances.........................................................................54
Section 7.02. Books and Records; Personnel...............................................................54
Section 7.03. Continued Cooperation......................................................................55
Section 7.04. Estate Costs...............................................................................55
Section 7.05. Distribution of the Sellers' Stock.........................................................57
Section 7.06. Non-transferable Claims....................................................................57
ARTICLE VIII CONDITIONS PRECEDENT................................................................................58
Section 8.01. Conditions Precedent to Obligations of the Sellers and the Purchaser.......................58
Section 8.02. Conditions Precedent to Obligation of the Sellers..........................................58
Section 8.03. Conditions Precedent to Obligation of the Purchaser........................................59
ARTICLE IX FURTHER AGREEMENTS AND TERMINATION....................................................................60
Section 9.01. Termination................................................................................60
Section 9.02. Termination Payment........................................................................62
Section 9.03. Procedure and Effect of Termination........................................................64
ARTICLE X GENERAL PROVISIONS.....................................................................................64
Section 10.01. Disclosure Schedule........................................................................64
Section 10.02. Notices....................................................................................64
Section 10.03. Descriptive Headings.......................................................................66
Section 10.04. Entire Agreement; Assignment...............................................................66
Section 10.05. Governing Law..............................................................................66
Section 10.06. Venue and Retention of Jurisdiction........................................................66
Section 10.07. Risk of Loss...............................................................................66
Section 10.08. Expenses...................................................................................66
Section 10.09. Amendment..................................................................................66
Section 10.10. Waiver.....................................................................................67
Section 10.11. Counterparts; Effectiveness................................................................67
Section 10.12. Severability; Validity.....................................................................67
Section 10.13. No Third Party Beneficiaries or Liabilities................................................67
Section 10.14. Enforcement of Agreement...................................................................67
Section 10.15. Separate Agreements........................................................................67
Section 10.16. Non-Survival of Representations and Warranties and Certain Covenants.......................68
ARTICLE XI INDEX OF DEFINED TERMS................................................................................68
Section 11.01. Index......................................................................................68
EXHIBITS
Exhibit A Acquired Subsidiaries
Exhibit B Sale Procedures Order
Exhibit C Approval Order
Exhibit D Disclosure Schedule
Exhibit E Deposit Escrow Agreement
Exhibit F Xxxx of Sale
Exhibit G Assignment and Assumption of Contracts
Exhibit H Assumption of Liabilities
Exhibit I Assignment and Assumption of Lease
Exhibit J Assignment of Copyrights
Exhibit K Assignment of Patents
Exhibit L-1 Assignment of Trademarks (for filing in foreign jurisdictions)
Exhibit L-2 Assignment of Trademarks (for filing in the United States)
Exhibit L-3 Assignment of Trademark Applications
Exhibit M Bidding Procedures
Exhibit N Quitclaim Deeds
Exhibit O Foreign Investment in Real Property Tax Act Certification and Affidavit
Exhibit P Projected Balance Sheet
Exhibit Q Tax Records
Exhibit R 2002 Financial Plan
Exhibit S Acquisition Agreement
Exhibit T Wire Instructions of Purchaser
Exhibit U Registration Rights Agreement
SECOND AMENDED AND RESTATED ASSET PURCHASE AGREEMENT (this
"Agreement"), dated as of July 3, 2002, is entered into by and among OEP
Imaging Corporation, a Delaware corporation (the "Purchaser"), Polaroid
Corporation, a Delaware corporation ("Polaroid"), and its Subsidiaries (as
herein defined) listed on the signature pages of this Agreement
(collectively, together with Polaroid, the "Sellers").
WHEREAS, on October 12, 2001 (the "Filing Date"), the Sellers
filed voluntary bankruptcy petitions (the "Petitions") pursuant to Chapter
11 of Title 11 of the United States Code (the "Bankruptcy Code") before the
United States Bankruptcy Court for the District of Delaware (the
"Bankruptcy Court"), jointly administered as Case No. 01-10864 (PJW)
(Bankr. D. Del.) (the "Case");
WHEREAS, the Sellers desire to sell to the Purchaser and the
Purchaser desires to purchase from the Sellers, (i) all of the outstanding
capital stock of the Subsidiaries of Polaroid that are incorporated or
organized outside of the United States which are directly owned by a Seller
and identified on the list attached hereto as Exhibit A (the "Acquired
Subsidiaries") and (ii) all of the assets, rights and properties of the
Sellers relating to the Business (as herein defined) not conducted by the
Acquired Subsidiaries and, in connection with such purchase and sale, the
Purchaser will assume certain obligations and liabilities of Sellers, all
on the terms and subject to the conditions set forth in this Agreement and
in accordance with Sections 363 and 365 of the Bankruptcy Code (the
"Contemplated Transactions"); and
WHEREAS, Sellers and Purchaser are parties to that certain Amended
and Restated Asset Purchase Agreement, dated as of May 14, 2002 (the
"Restated Asset Purchase Agreement"), and desire to amend and restate the
Restated Asset Purchase Agreement in its entirety as set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants hereinafter set forth, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto acknowledge and agree that this Agreement
shall amend and supersede in its entirety the Restated Asset Purchase
Agreement, and hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms. As used herein, the terms below shall
have the following meanings. An index of defined terms is set forth in
Article XI.
"Accounts Payable" means all trade accounts and notes payable of
the Business determined in accordance with GAAP and reflected on the books
and records of the Polaroid Entities with respect to the Business, but
excluding any other accrued liabilities.
"Accounts Receivable" means all accounts and notes receivable of
the Business determined in accordance with GAAP and reflected on the books
and records of the Polaroid Entities with respect to the Business.
"Acquisition Proposal" means a proposal involving a third party
(other than the Purchaser or any of its Affiliates) and any Seller or any
Affiliate of any Seller relating to any merger, consolidation, business
combination, sale of all or substantially all of any Seller's assets, sale
of shares of capital stock or other Equity Interests or any restructuring,
recapitalization, investment, or similar transaction (whether through a
plan of reorganization or otherwise) involving, in each case, a significant
portion of the Acquired Assets or Business to be purchased by the Purchaser
pursuant to this Agreement.
"Affiliate" shall mean with respect to any Person, any other
Person who, directly or indirectly, controls, is controlled by, or is under
common control with that Person.
"Agent" means the agent for the secured lenders to the Sellers.
"Ancillary Agreements" means the Xxxx of Sale substantially in the
form attached hereto as Exhibit F, the Assignment and Assumption of
Contracts substantially in the form attached hereto as Exhibit G, the
Assumption of Liabilities substantially in the form attached hereto as
Exhibit H, each Assignment and Assumption of Lease substantially in the
form attached hereto as Exhibit I, the Assignment of Copyrights
substantially in the form attached hereto as Exhibit J, the Assignment of
Patents substantially in the form attached hereto as Exhibit K, the
Assignments of Trademarks substantially in the forms attached hereto as
Exhibit L-1 and L-2, the Assignment of Trademark Applications substantially
in the form attached hereto as Exhibit L-3, the Deposit Escrow Agreement,
the Quitclaim Deeds substantially in the form attached hereto as Exhibit N,
the Foreign Investment in Real Property Tax Act Certification and Affidavit
substantially in the form attached hereto as Exhibit O, the Acquisition
Agreement substantially in the form attached hereto as Exhibit S, the
Registration Rights Agreement substantially in the form attached hereto as
Exhibit U, and any other assignment or transfer documents delivered at
Closing.
"Applicable Law" means any law, statute, order, rule, ordinance or
regulation in any jurisdiction where the Business is conducted.
"Approval Order" means an order or orders of the Bankruptcy Court
in the form attached hereto as Exhibit C, with such modifications thereto
as the Purchaser shall approve or request in its sole discretion,
authorizing and approving, among other things, the sale, transfer and
assignment of the Acquired Assets to the Purchaser in accordance with the
terms and conditions of this Agreement, free and clear of all Encumbrances
other than Permitted Encumbrances, pursuant to Sections 363 and 365 of the
Bankruptcy Code.
"Assumed Contracts" has the meaning set forth in Section 6.13.
"Bidding Procedures" means those bidding procedures, attached
hereto as Exhibit M, to be employed with respect to the sale of the
Acquired Assets subject to Bankruptcy Court approval pursuant to the Sale
Procedures Order.
"Books and Records" shall mean all books, records, lists, ledgers,
files, manuals, permits, Contracts, agreements, correspondence, reports,
plans, drawings and operating records of every kind (in any form or medium)
pertaining to the Business, the Acquired Assets, the Assumed Liabilities,
customers, suppliers, vendors, distributors or personnel, including,
without limitation, (A) all corporate books and records, disk or tape
files, printouts, runs or other computer-based information and Sellers'
interest in all computer programs required to access, and the equipment
containing, all such computer-based information, (B) all product, business
and marketing plans, (C) all environmental control records, (D) all sales,
maintenance and production records, (E) all technical information, product
development techniques, details of clients, client and customer lists,
referral sources, consultant Contracts, or operational methods, (F) all
litigation records, accounting records and personnel records and (G) other
proprietary information relating to the Business, the Acquired Assets and
the Assumed Liabilities, together with all plans and designs of buildings,
structures, fixtures and equipment.
"Breach" means any breach of, or any inaccuracy in, any
representation or warranty or any breach of, or failure to perform or
comply with, any covenant, obligation, term or condition in or of this
Agreement, any Ancillary Agreement or in any exhibit, schedule, writing,
document, instrument or certificate delivered pursuant to this Agreement or
in connection with the transactions contemplated hereby, or any event which
with the passing of time or the giving of notice, or both, would constitute
such a breach, inaccuracy or failure.
"Bulk Sales Laws" means any foreign, federal, state or local "bulk
sales," "bulk transfer" or similar Laws.
"Business" means the business and activities conducted by the
Sellers and their respective Affiliates on and after the date hereof,
including, without limitation, the business of designing, developing,
manufacturing, marketing and selling products and services relating to
instant and conventional photography, to photographic accessories, to
eyewear, and to printing devices; the business of enhancing and exploiting
certain Intellectual Property assets owned by the Sellers; and the business
of inventing, developing, licensing and otherwise exploiting inventions and
such Intellectual Property assets.
"Business Day" means any day that is not a Saturday, Sunday, or
other day on which banking institutions in New York are authorized or
required by law or executive order to close.
"Capital Lease Obligations" means, as to any Person, the
obligations of such Person to pay rent or other amounts under any lease of
(or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such
Person under GAAP, and, for the purposes of this Agreement, the amount of
such obligations plus related interests at any time shall be the
capitalized amount thereof at such time determined in accordance with GAAP.
"Cash and Cash Equivalents" means all cash (including checks
received prior to the close of business on the Closing Date, whether or not
deposited or cleared prior to the close of business on such day),
certificates of deposit and other bank deposits, treasury bills and other
cash equivalents.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System.
"Claim" means any claim (including, without limitation, as defined
by Bankruptcy Code Section 101(5)), demand, action, complaint, suit,
lawsuit, litigation, inquiry, hearing, investigation, audit, notice of a
violation, citation, summons, subpoena, grievance, arbitration, proceeding,
labor dispute, arbitral action, audit, order, appeal or other dispute
(whether civil, criminal, administrative, judicial, investigative or
otherwise, whether formal or informal, whether public or private) commenced
or brought.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the official committee of unsecured creditors
appointed in the Case.
"Competing Transaction" means a Successful Bid (as defined in the
Bidding Procedures) that is submitted by a Person other than the Purchaser
and is accepted by the Sellers and approved by the Bankruptcy Court.
"Confidentiality Agreement" means the letter agreement between
Polaroid and the Purchaser regarding confidential treatment of certain
information concerning Polaroid and its subsidiaries, dated November 15,
2001.
"Contingent Assets" means all rights of Sellers from and after the
date hereof under (i) the Contingent Purchase Price Agreement dated May 15,
2001 by and between PD Winter Street, LLC and Polaroid, (ii) the Promissory
Note dated June 21, 2000 made by 000 Xxxxxx Xxxxxx, LLC in favor of
Polaroid in the original principal amount of $400,000, (iii) the
Convertible Promissory Note dated April 7, 2000, and due April 7, 2005,
made by Boston Laser, Inc. in favor of Polaroid in the original principal
amount of $1,000,000, (iv) the balance outstanding on the date hereof under
the Promissory Note dated April 7, 2000, and due October 7, 2001, made by
Boston Laser, Inc. in favor of Polaroid in the original principal amount of
$1,000,000, and (v) the Operating Agreement of GNBIF/Polaroid, LLC between
The Greater New Bedford Industrial Foundation and Polaroid that is the
subject of that certain Motion for Order Pursuant to 11 U.S.C. Sections
105(a) and 363(b) and Fed. R. Bankr. P. 6004, Authorizing Polaroid
Corporation's Entry into an Operating Agreement with the Greater New
Bedford Industrial Foundation filed by Polaroid with the Bankruptcy Court
on March 28, 2002 (Docket No. 775).
"Contract" means any agreement, lease, note, loan, evidence of
Indebtedness, the terms of any security, purchase order, letter of credit,
franchise agreement, undertaking, covenant not to compete, employment
agreement or arrangement, License, instrument, obligation, commitment,
quotation or other executory commitment (including all amendments and
supplements to any of the foregoing), whether oral or written, express or
implied, and which pursuant to its terms has not expired, terminated or
been fully performed by the parties thereto.
"Copyrights" means all copyrightable works, mask works,
copyrights, and all domestic and foreign applications, registrations, and
renewals in connection therewith.
"date hereof" and "date of this Agreement" each means, and
"current" and "currently" each relates to, April 18, 2002.
"Deposit Escrow Agreement" means the deposit escrow agreement,
dated as of the date hereof, by and among the Purchaser, the Sellers and
the Escrow Agent substantially in the form attached hereto as Exhibit E.
"Determination Date" means December 31, 2001.
"DIP Financing Order" means the Final Order (I) Authorizing
Debtors to (A) Obtain Post-Petition Financing Pursuant to 11 U.S.C.
ss.ss.105, 361, 362, 363, 364(c)(1), 364(c)(2), 364(c)(3) and 364(d)(1),
and (B) Utilize Cash Collateral Pursuant to 11 U.S.C. ss.363 and (II)
Granting Adequate Protection to Pre-Petition Secured Parties Pursuant to 11
U.S.C. ss.ss.361, 362 and 363 entered by the Bankruptcy Court on November
5, 2001.
"Disclosure Schedule" means the disclosure schedules to this
Agreement delivered by the Sellers to the Purchaser.
"$" or "Dollar" means lawful currency of the United States.
"Domain Names" means all rights in Internet web sites and Internet
domain names.
"Employee" means any Person who is directly employed by any
Polaroid Entity immediately prior to the Closing Date, including Persons on
leave, vacation, disability or other approved periods of absence.
"Employment of Professionals Order" means the Order Pursuant to
Section 327 and 328 of the Bankruptcy Code Authorizing Employment of
Professionals Utilized in the Ordinary Course of Business entered by the
Bankruptcy Court on November 5, 2001.
"Encumbrance" means any Claim, encumbrance, pledge, option,
charge, easement, security interest, lien, deed of trust, mortgage, adverse
claim, right-of-way, encroachment, building or use restriction, encumbrance
or other right of Third Parties, whether voluntarily incurred or arising by
operation of law, and includes, without limitation, any agreement to give
any of the foregoing in the future, and any contingent or conditional sale
agreement or other title retention agreement or lease in the nature
thereof, any capital lease having substantially the same economic effect as
any of the foregoing and any financing statement or other lien notice
filed, given or made pursuant to any Law governing Encumbrances.
"Environmental Laws" means any and all Laws of any Governmental
Authority relating to pollution (including the presence, Release or
Management of Hazardous Materials), protection of human health or safety or
the environment.
"Environmental Liabilities" means, regardless of whether any of
the following are contained in the Disclosure Schedule or otherwise
disclosed to the Purchaser prior to the Closing, any (A) environmental
conditions, including, without limitation, the presence, Release, threat of
Release, Management of or exposure to Hazardous Materials first occurring
on or prior to the Closing Date at, on, in or under any property now or
previously owned, operated or leased by Sellers, any predecessors of
Sellers or with respect to the Business (as currently or formerly
operated); (B) the off-site transportation, storage, treatment, recycling,
disposal or Release of Hazardous Materials Managed or Released by or on
behalf of Sellers or any predecessors of Sellers or with respect to the
Business (as currently or formerly operated); or (C) any violation of any
Environmental Law first existing on or prior to the Closing Date
(including, without limitation, costs and expenses for pollution control or
monitoring equipment required to bring the Business into compliance with
Environmental Laws and fines, penalties and reasonable defense costs
incurred for such reasonable time after the Closing Date as it takes the
Business to come into compliance with Environmental Laws).
"Equity Interest" means (A) the shares of capital stock of a
corporation, (B) the general or limited partnership interests in any
partnership, (C) the membership or other ownership interest in any limited
liability company, (D) the equity securities of or other ownership
interests or rights in any other legal entity, or (E) any option, warrant
or other right to convert into or otherwise receive any of the foregoing,
in any such case, whether owned or held beneficially or legally.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" means any Person which is (or at any relevant
time was) a member of a "controlled group of corporations" with, under
"common control" with, or a member of an "affiliated service group" with,
or otherwise required to be aggregated with, any of the Sellers as set
forth in Section 414(b), (c), (m) or (o) of the Code.
"Escrow Agent" means XX Xxxxxx Xxxxx.
"Estate Costs" means, to the extent any of the following
constitutes Non-Assumed Liabilities Payments, (i) the amounts required to
be paid after June 2, 2002 by the Sellers and/or their successor(s) under
sections 503(b) and 507(a) of the Bankruptcy Code; (ii) payments after June
2, 2002 of allowed secured claims against the Sellers and/or their
successor(s) other than those held or represented by the Agent; (iii)
actual, necessary, and reasonable costs paid after June 2, 2002 by the
Sellers and/or their successor(s) in connection with the wind-down of their
affairs; and (iv) actual, necessary, and reasonable professional fees paid
after June 2, 2002 by the Sellers and/or their successor(s) in connection
with the pursuit of Chapter 5 actions.
"Foreign Subsidiaries" means the Acquired Subsidiaries and their
Subsidiaries.
"GAAP" means generally accepted accounting principles and
practices in effect in the United States from time to time, consistently
applied for the periods presented.
"Governmental Authority" shall mean any domestic or foreign
national, regional, state, provincial or local court, governmental or
regulatory agency with jurisdiction over the Business, the Sellers or the
Acquired Assets (including the Bankruptcy Court).
"Guarantee Obligation" means, as to any Person (the "guaranteeing
person"), any obligation of (A) the guaranteeing person or (B) another
Person (including, without limitation, any bank under any letter of credit)
to induce the creation of which the guaranteeing person has issued a
reimbursement, counter indemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any real property constituting direct or indirect security therefor, (ii)
to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of
the primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the Ordinary Course of
Business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (A) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (B) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee
Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by Polaroid in good
faith with the consent of the Purchaser.
"Hazardous Materials" means: (A) any "waste," "hazardous waste,"
"industrial waste," "solid waste," "hazardous material," "hazardous
substance," "toxic substance," "hazardous material," "pollutant," or
"contaminant" as those or similar terms are defined, identified, or
regulated under any Environmental Laws; (B) any asbestos, polychlorinated
biphenyls, radioactive materials or radon; (C) any petroleum, petroleum
hydrocarbons, petroleum products, crude oil and any components, fractions,
or derivatives thereof; and (D) any substance that, whether by its nature
or its use, is subject to regulation under any Environmental Law or results
in any Governmental Authority requiring any environmental investigation,
remediation, or monitoring thereof.
"Hired Employee" means any Employee who becomes an employee of the
Purchaser or an Affiliate as of the Closing Date pursuant to Section
6.08(a).
"Improvements" means any buildings, facilities, parking lots,
other structures and improvements, building systems and fixtures located
in, on or under any real property or facility owned, leased, operated or
used in the operation of the Business at any time by any Polaroid Entity or
by any predecessor of any Polaroid Entity.
"including" means including without limitation.
"Indebtedness" means, with respect to any Person, the following,
without duplication: (A) all indebtedness of such Person for borrowed
money, (B) all obligations of such Person for the deferred purchase price
of property or services (other than trade payables incurred in the Ordinary
Course of Business), (C) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (D) all indebtedness
created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property), (E)
all Capital Lease Obligations or Synthetic Lease Obligations of such
Person, (F) all Guarantee Obligations of such Person in respect of
obligations of the kind referred to in clauses (A) through (E) above, (G)
all obligations of the kind referred to in clauses (A) through (F) above
secured by (or for which the holder of such obligation has an existing
right, contingent or otherwise, to be secured by) any Encumbrance on
property (including, without limitation, accounts and contract rights)
owned by such Person, whether or not such Person has assumed or become
liable for the payment of such obligation, and (H) the liquidation value of
any mandatorily redeemable preferred Equity Interests in such Person or its
Subsidiaries held by any Person other than such Person and its wholly owned
Subsidiaries.
"Intellectual Property" means (A) Marks, (B) Patents, (C) Trade
Secrets, (D) Domain Names, (E) Copyrights, (F) all computer software
(including data and related documentation and both object code and source
code) and all web site designs, (G) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), and all improvements
thereto, (H) all other proprietary rights, (I) all rights under any
licenses to use any of the intellectual property described in clauses
(A)-(H) above, and (J) all copies and tangible embodiments (in whatever
form or medium) of any of the foregoing.
"Interest Rate" means 6.5% per year calculated on the basis of a
365 day year and charged for the actual number of days elapsed.
"Inventory" means all of the inventory which is held for lease,
sale or resale, and all of the raw materials, works-in-process, finished
goods, products under research and development, demonstration equipment,
spare parts, wrappings, supply and packaging items related thereto, and
office and other supply items, in each case wherever the same may be
located, including any of the foregoing purchased subject to any
conditional sales or title retention agreement in favor of any other
Person, together with all rights against suppliers of any of the foregoing.
"Issued Stock" means, with respect to each class of stock included
in the OEP Equity Securities, the sum of the number of shares of such class
included in the Sellers' Stock and the number of shares of such class
included in the OEP Equity Securities.
"Law" means any federal, state, local, municipal or foreign
statute, law, constitution, ordinance, regulation, rule, code, decree,
order, rule of common law or treaty.
"Legal Proceeding" means any judicial, administrative, regulatory
or arbitral proceeding, investigation or inquiry or administrative charge
or complaint pending at law or in equity before any domestic or foreign
governmental or regulatory body or authority.
"Liability" means any liability, Indebtedness, obligation,
co-obligation, commitment, expense, Claim, deficiency, guaranty or
endorsement of or by any Person of any nature (whether direct or indirect,
known or unknown, absolute or contingent, liquidated or unliquidated, due
or to become due, accrued or unaccrued, matured or unmatured).
"Licenses" means all franchises, certificates of occupancy,
consents or orders of, or filings with, any Governmental Authority or any
other Person, necessary or desirable for the past, present or anticipated
conduct of, or relating to the operation of, the Business or the Acquired
Assets.
"Manage" means manage, use, posses, generate, treat, manufacture,
process, handle, store, recycle, transport or dispose.
"Marks" means all domestic and foreign trademarks, trade dress,
service marks, logos, corporate names, assumed fictional business names,
and trade names (including the name "Polaroid"), together with all
translations, adaptations, derivations, and combinations thereof and
including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith.
"Material Adverse Effect" means any events, conditions or matters
(or series of related events, conditions or matters) in respect of the
Business (other than the filing of the Petitions and the pendency of the
Case and any proceedings with respect thereto) that, individually or in the
aggregate, has or is reasonably likely to have (A) a material adverse
effect on the Business, the Acquired Assets, the Assumed Liabilities or
results of operations or condition (financial or otherwise) of the Business
taken as a whole, (B) a material adverse effect on the ability of the
Sellers to perform their obligations hereunder, or (C) a material adverse
effect on the ability of the Purchaser to continue to operate the Business
immediately after the Closing in substantially the same manner as the
Business is conducted immediately prior to the Closing, except in any such
case where the event, condition or matter results from (i) the public
announcement of the transactions contemplated by or actions required by
this Agreement, (ii) any act or omission of a Seller taken with the prior
consent of the Purchaser, (iii) changes affecting the industries in which
any part of the Business operates which do not disproportionately affect
the Business, (iv) changes in the United States, European or Asian
economies which do not disproportionately affect the Business, (v) changes
resulting from the filing of the Case or from any action approved by the
Bankruptcy Court with the Purchaser's Consent, (vi) changes resulting from
actions taken to bring costs in line with available funds in accordance
with the 2002 Financial Plan, which changes are in accordance with the 2002
Financial Plan, (vii) the regulatory status of the Purchaser, or (viii) a
decline in revenue which is not below projected revenue of the Business
under the 2002 Financial Plan and which is due to a reduction in demand for
the products of the Business.
"Multiemployer Plan" means any "multiemployer plan," as defined in
Section 4001(a)(3) or 3(37) of ERISA, which (A) any Seller or any ERISA
Affiliate maintains, administers, contributes to or is required to
contribute to, or within seven years prior to the Closing Date, maintained,
administered, contributed to or was required to contribute to and (B)
covers any current or former Employee, director, officer or consultant of
such Seller or any ERISA Affiliate (with respect to their relationship with
any such entity).
"Non-Assumed Liabilities Payments" means any payment, satisfaction
or other discharge by any Polaroid Entity after June 2, 2002 of any
Liability of any Polaroid Entity other than (i) Liabilities that otherwise
would have been Assumed Liabilities or (ii) professional fees and expenses
incurred and paid in the Ordinary Course of Business pursuant to the DIP
Financing Order or the Employment of Professionals Order and in accordance
with the 2002 Financial Plan. The Purchaser understands that the Sellers
intend to pay up to $50,000,000 to the secured lenders of the Business
prior to the Closing and the Sellers agree that such payment shall
constitute a Non-Assumed Liability Payment.
"OEP Equity Securities" means the equity securities issued at
Closing to One Equity Partners LLC and/or its Affiliates in exchange for
its or their $60,000,000 investment in equity securities of the Purchaser.
"Ordinary Course of Business" means (i) with respect to the
Sellers, the ordinary course of business consistent with custom and
practice of the Business from and after the Filing Date to the extent
permitted or required by the funds available to support the Business and to
the extent limited by the proceedings of the Case and (ii) with respect to
the Foreign Subsidiaries, the ordinary course of business consistent with
past custom and practice of the Business to the extent permitted or
required by the funds available to support the Business.
"Patents" means all domestic and foreign patents, patent
applications and patent disclosures, together with all reissues,
continuations, continuations-in-parts, divisions, provisional applications,
and reexaminations thereof.
"Pension Plan" means any "employee pension benefit plan" as
defined in Section 3(2) of ERISA (other than a Multiemployer Plan) (A)
which any Seller or any ERISA Affiliate maintains, administers, contributes
to or is required to contribute to, and (B) which covers any current or
former Employee, director, officer or consultant of any Seller or any ERISA
Affiliate (with respect to their relationship with such entity).
"Permits" means all franchises, approvals, permits, licenses,
orders, registrations, certificates, variances, tax abatements and other
similar permits or rights (including Environmental Permits obtained from
any Governmental Authority, and all pending applications therefor).
"Permitted Encumbrances" means (A) with respect to the Real
Estate, an easement, encroachment or similar reservation which does not
impair the current use, occupancy, or value, or the marketability of title,
of such Real Estate and which would not individually (or in the aggregate
with others) have a material adverse effect on the Business or the use or
enjoyment of such Real Estate; (B) with respect to the Acquired Assets, any
liens imposed by law, such as carriers', warehouseman's, mechanics',
materialmen's, landlords', laborers', suppliers' and vendors' liens,
incurred in good faith in the ordinary course of the Business and securing
obligations which are not yet due (other than any Tax liens) or which are
being contested in good faith by appropriate proceedings as to which the
Sellers shall, to the extent required by GAAP, have set aside on its books
appropriate provision for liability; (C) those Encumbrances set forth in
Section 1.01(a) of the Disclosure Schedule and those Encumbrances under the
Assumed Contracts, none of which, individually or in the aggregate, has a
material adverse effect upon the value of the property subject thereto or
the use to which such property is presently put; and (D) extensions,
renewals and replacements of liens referred to in (A) through (C) of this
sentence; provided, that any such extension, renewal or replacement lien
shall be limited to the property or assets covered by the lien extended,
renewed or replaced and that the obligations secured by any such extension,
renewal or replacement lien shall be in an amount not greater than the
amount of the obligations secured by the original lien extended, renewed or
replaced, none of which, individually or in the aggregate, has a material
adverse effect upon the value of the property subject thereto or the use to
which such property is presently put. Notwithstanding the foregoing,
Permitted Encumbrances shall not include, in any event, Liens securing or
with respect to the Excluded Liabilities.
"Person" means any natural person, firm, partnership, limited
liability company, association, corporation, trust, business trust or other
similar entity.
"Polaroid Employee" means any Employee who is directly employed by
any Seller.
"Polaroid Entities" means Polaroid and each of its Subsidiaries.
"Post-Petition Contracts" means the Contracts of the Sellers
relating to the Business entered into by any Seller in the Ordinary Course
of Business or approved by the Bankruptcy Court on or after the Filing
Date.
"Projected Balance Sheet" means the Sellers' projected balance
sheet as of June 30, 2002 attached hereto as Exhibit P.
"Purchaser's Consent" means the written consent of the Purchaser,
which consent shall be deemed to have been given if the Bankruptcy Court
enters an order on a motion filed by the Sellers duly noticed to the
Purchaser in accordance with Section 6.06(c), to which the Purchaser does
not provide a written objection to Polaroid within ten (10) days of receipt
of such notice.
"Recapitalization" means a transaction or series of transactions
pursuant to which the holders of the Indebtedness of any Seller obtain a
majority, directly or indirectly, of the equity interests of any Seller or
all or substantially all of the assets of any Seller in exchange for such
Indebtedness.
"Release" means release, spill, leak, discharge, disposal,
pumping, pouring, emitting, emptying, injection, leaching, dumping, or
allowing to escape.
"Representative" means with respect to a particular Person, any
director, officer, manager, employee, agent, consultant, contractor,
advisor, accountant, financial advisor, legal counsel or other
representative of such Person.
"Sale Procedures Order" means an order or orders of the Bankruptcy
Court substantially in the form attached hereto as Exhibit B.
"Sellers' Auditors" means KPMG LLP.
"Sellers' Knowledge" means, when modifying any representation and
warranty of Sellers, the actual knowledge, after due inquiry, of the
officers and employees of Sellers and the Foreign Subsidiaries listed on
Section 1.01(c) of the Disclosure Schedule.
"Sellers' Stock" means, with respect to each class of stock
included in the OEP Equity Securities, a number of shares of such class
such that the number of shares of such class issued to the Sellers is equal
to 35% of the sum of (i) the number of such shares of such class issued to
the Sellers plus (ii) the number of shares of such class included in the
OEP Equity Securities (i.e., the ratio of Sellers' Stock to OEP Equity
Securities is 35 to 65).
"Subsidiary" means with respect to any Person (the "Owner") (A)
any corporation or other Person of which the Owner (either alone or through
or together with one or more of its Subsidiaries) owns or holds, directly
or indirectly, through one or more intermediaries, more than 50% of the
stock or other Equity Interests of such other Person, (B) any corporation
or other Person of which stock or other Equity Interests having the power
to elect a majority of that corporation's or other Person's board of
directors or similar governing body, or otherwise having the power to
direct the business and policies of such Person (other than securities or
other interests having such power only upon the happening of a contingency
that has not occurred), are held or owned, directly or indirectly, through
one or more intermediaries, by the Owner (either alone or through or
together with one or more of its Subsidiaries), or (C) any Person, the
operations of which are consolidated or combined with the Owner, pursuant
to GAAP, for financial reporting purposes.
"Synthetic Lease Obligations" means all monetary obligations of a
Person under (A) a so-called synthetic, off-balance sheet or tax retention
lease, or (B) an agreement for the use or possession of property creating
obligations which do not appear on the balance sheet of such Person but
which, upon the insolvency or bankruptcy of such Person, would, or are
intended to, be characterized as Indebtedness of such Person (without
regard to accounting treatment).
"Taxes" means all federal, state, local, and foreign taxes, and
other assessments of a similar nature (whether imposed directly or through
withholding), including without limitation, any payroll or value added tax,
interest, additions to tax, or penalties applicable thereto.
"Tax Items" means all items of income, gain, loss, deduction and
credit or other items required to be included in the Tax Returns.
"Tax Election" means the making or changing of a choice permitted
under any statutory or regulatory tax provisions which impacts the
calculation of current or future taxable income, timing of tax payments, or
the form of reporting entity for tax purposes.
"Tax Returns" means all federal, state, local, and foreign tax
returns, declarations, statements, reports, schedules, forms, and
information returns and any amended Tax Returns relating to Taxes, and any
other documents made part of the foregoing.
"Third Party" means a Person that is not a party to this
Agreement, other than an Acquired Subsidiary or a Subsidiary of an Acquired
Subsidiary.
"Trade Secrets" means all trade secrets and confidential business
information including, to the extent protectible under applicable law,
ideas, research and development, invention disclosures, know-how, formulas,
compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, specifications, customer and supplier
lists, pricing and cost information, and business and marketing plans and
proposals.
"2002 Financial Plan" means the Polaroid Corporation's 2002
Financial Plan, dated March 14, 2002, previously delivered to the Purchaser
and attached hereto as Exhibit R.
"Welfare Plan" means any "employee welfare benefit plan" as
defined in Section 3(1) of ERISA, (A) which any Seller or any ERISA
Affiliate maintains, administers, contributes to or is required to
contribute to, and (B) which covers (or covered) any current or former
Employee, officer, director or consultant of any Seller or any ERISA
Affiliate (with respect to their relationship with such entity).
ARTICLE II
PURCHASE AND SALE OF BUSINESS
Section 2.01. Purchase and Sale of Business. On the terms and
subject to the conditions set forth in this Agreement, at the Closing, the
Sellers shall sell, convey, transfer, assign and deliver to the Purchaser
or its designated Affiliates or permitted assigns, and the Purchaser or its
designated Affiliates or permitted assigns shall purchase and accept (i)
all of the Sellers' rights, title and interest in and to all of the
outstanding capital stock of the Acquired Subsidiaries (the "Acquired
Stock") and (ii) all of each of the Sellers' rights, title and interests in
and to all of such Seller's properties, assets and rights of every nature,
kind and description, tangible and intangible (including goodwill),
wherever such properties, assets and rights are located and whether real,
personal or mixed, whether accrued, contingent or otherwise, other than the
Excluded Assets (such rights, title and interests in and to all such
assets, properties and claims being collectively referred to herein,
together with the Acquired Stock, as the "Acquired Assets"), free and clear
of any and all Encumbrances (other than Permitted Encumbrances) in
accordance with, and with all of the protections afforded by, Sections 363
and 365 of the Bankruptcy Code. The Acquired Assets shall include all of
the Sellers' rights, title, and interests in and to the assets, properties,
rights and claims described in clauses (a) through (bb) below (except as
expressly excluded under Section 2.02):
(a) all equipment, furniture, fixtures, machinery, tools, molds,
parts, supplies, vehicles and other tangible personal property owned or
leased by the Sellers at any location;
(b) all real property and all of the rights arising out of the
ownership thereof or appurtenant thereto together with all Improvements,
including, without limitation, all leasehold interests, but only to the
extent such leasehold interests are Assumed Contracts, in each case
together with any options to purchase the underlying property and leasehold
improvements thereon and any other rights, subleases, Licenses, security
deposits and profits appurtenant to or related to such leasehold interests;
(c) all Assumed Contracts, including, without limitation, any
right to receive payment for products sold or services rendered, and to
receive goods and services, pursuant to such Assumed Contracts and to
assert Claims and take other rightful actions in response to breaches,
defaults and other violations of such Assumed Contracts;
(d) all notes and accounts receivable held by the Sellers
(including all intercompany accounts receivable or other intercompany
advances) and all notes, bonds and other evidences of Indebtedness of any
Person held by the Sellers, except any Retained Related Party Accounts
Receivable;
(e) all general intangibles and intangible property of any kind or
nature, including goodwill and all Intellectual Property (including the
name "Polaroid"), and rights of priority and protection of interests
therein under applicable Laws;
(f) all deposits, credits, prepaid expenses, deferred charges,
advanced payments, security deposits, escrowed funds, rights to refunds and
prepaid items relating to the Acquired Assets or the Assumed Liabilities;
(g) all items of Inventory related to the Business;
(h) all rights in and to products sold or leased (including, but
not limited to, products hereafter returned or reposed and unpaid Sellers'
rights of rescission, replevin, reclamation and rights to stoppage in
transit);
(i) all customer and supplier lists and all other information as
to sources of supply and relationships with suppliers and customers;
(j) to the extent their transfer is permitted by Law, all Licenses
(including Environmental Permits) held by each Seller or issued or granted
by any Governmental Authority with respect to the operation of the Business
or the use or ownership of any of the Acquired Assets;
(k) 100% of the shares of the outstanding capital stock or other
Equity Interests of each Subsidiary of Polaroid identified on Exhibit A;
(l) all Books and Records relating to the Business excluding those
Books and Records solely related to the Excluded Assets and the Excluded
Liabilities, subject to Section 2.02(c);
(m) all causes of action, judgments, Claims and demands of any
nature available to or being pursued by any Seller against Third Parties,
whether xxxxxx or inchoate, known or unknown, contingent or otherwise,
except to the extent otherwise provided in Section 2.02(d);
(n) all investments, securities or Equity Interests in or issued
by Persons that are not Subsidiaries, including any interests in
partnerships or joint ventures, and any membership interests in any limited
liability company listed in Section 2.01(n) of the Disclosure Schedule;
(o) all Guarantee Obligations, warranties, indemnities and similar
rights in favor of Sellers with respect to any of the Acquired Assets or
Assumed Liabilities;
(p) all goodwill generated by or associated with the Business;
(q) all Cash and Cash Equivalents held by the Sellers and the
Foreign Subsidiaries;
(r) all rights to insurance proceeds relating to the damage,
destruction or impairment of any of the Acquired Assets, which damage,
destruction or impairment occurred on or prior to the Closing;
(s) Polaroid's collection of art and photographs and the items
stored in Polaroid's archives;
(t) all rights to the return of the cash deposit securing Sellers'
reimbursement obligations under Standby Letter of Credit No. 151270814 in
the amount of $7,000,000 and issued by Fleet National Bank for the account
of Sellers for the benefit of PD Winter Street, LLC, as beneficiary, and
securing Sellers' security deposit obligations (the "Lease Deposits") under
that certain Lease, dated May 15, 2001, between Sellers and PD Winter
Street, LLC, as landlord, with respect to certain property located at 850
and 000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx, and commonly known as the
Polaroid R2 and R5 Buildings (the "PD Winter Street Lease");
(u) the Earn-Out Note, dated May 15, 2001, executed by PD Winter
Street, LLC, as maker, in favor of Polaroid, as holder, and all rights
related thereto and security therefore, including the standby letter of
credit in the amount of $7,000,000 issued for the account of PD Winter
Street, LLC for the benefit of Seller, as beneficiary, and securing the
payment obligations under such note (the "Earn-Out Note");
(v) all rights to the return of the cash deposit securing Sellers'
reimbursement obligations under Standby Letter of Credit No. 151270917 in
the amount of $1,000,000 and issued by Fleet National Bank for the account
of Sellers for the benefit of PD Winter Street, LLC, as beneficiary, and
securing the Sellers' security deposit obligations for demolition costs
(the "Demolition Deposits") under that certain Buyer Demolition Agreement,
dated May 15, 2001, between Polaroid and PD Winter Street, LLC (the
"Demolition Agreement");
(w) the Contingent Assets;
(x) the Equity Interest in and rights relating to 000 Xxxxxxxx
Xxxxx LLC;
(y) the Equity Interest in and rights relating to Digital Media
and Communications LLP;
(z) the Equity Interest in Polaroid Foundation Inc., it being
understood that, if the Purchaser so requests prior to the Closing, the
Equity Interest in Polaroid Foundation Inc. shall not be transferred to the
Purchaser at Closing and shall become an Excluded Asset;
(aa) all rights of Sellers to the surrender value of the Surety
Bond No. 45002078 with NAC Reinsurance Corporation for self-insured
worker's compensation claims and liabilities; and
(bb) the cash collateral, refunds of premiums, and related
interest on performance bonds as contemplated by that certain Asset
Purchase Agreement, dated as of December 4, 2001, among Polaroid, Polaroid
ID Systems, Inc. ("Polaroid ID") and Digimarc Corporation (the "Digimarc
Asset Purchase Agreement").
Section 2.02. Excluded Assets. The following assets, properties,
and rights (the "Excluded Assets") are not included in the Acquired Assets
and shall be retained by the Sellers:
(a) all Contracts other than Assumed Contracts;
(b) 100% of the shares of the outstanding capital stock or other
Equity Interests of each Subsidiary of Polaroid listed in Section 2.02(b)
of the Disclosure Schedule;
(c) all personnel records and other Books and Records that any
Seller is required by Law to retain in its possession;
(d) (i) all causes of action, judgments, Claims and demands of any
nature available to or being pursued by any Seller against Third Parties,
whether xxxxxx or inchoate, known or unknown, contingent or otherwise, to
the extent the foregoing relate to or arise out of the Excluded Assets or
the Excluded Liabilities and (ii) all causes of action, judgments, Claims
and demands of any nature available to or being pursued by any Seller
against (A) any Representative of any Seller, or (B) any supplier or vendor
to any Seller, or (C) any Third Party insurance, reinsurance, bonding or
other similar company providing insurance to the Sellers other than with
respect to causes of action, judgments, Claims and demands against
Representatives, suppliers or vendors described in clause (A), (B) or (C)
below, including all such causes of action, choses in action and rights of
recovery actions for preferences, fraudulent conveyances, and other
avoidance power claims and any recoveries under sections 506(c), 542, 544,
545, 547, 548, 549, 550, 552(b) and 553 of the Bankruptcy Code and the
proceeds, products, rents and profits of all of the foregoing, but only if
such Representative, supplier or vendor is not a director, officer,
employee or agent of, or consultant, supplier, vendor or contractor to, the
Business (A) whose relationship with the Business continues immediately
following the Closing Date or (B) who has been hired, retained or engaged
by the Purchaser or any of its Affiliates within sixty (60) days after the
Closing Date or (C) who, at the end of such sixty (60) day period, is
reasonably expected to have or resume such a continuing relationship with
the Business after such sixty (60) day period;
(e) all rights of any Seller under this Agreement and the
Ancillary Agreements;
(f) except as provided in Section 2.01(bb), all rights of Sellers,
including Polaroid and Polaroid ID, under the Digimarc Asset Purchase
Agreement;
(g) any intercompany receivables of any Seller held by another
Seller;
(h) prepaid expenses of Sellers relating to debt financing costs;
(i) non-current or other assets relating to the Polaroid Pension
Plan; and
(j) any Retained Related Party Accounts Receivable.
Section 2.03. Assumed Liabilities. On the terms and subject to the
conditions set forth in this Agreement, at the Closing, the Purchaser shall
assume no liability or obligation of Sellers except the following specific
liabilities and obligations of Sellers (the "Assumed Liabilities"), which
the Purchaser shall pay, perform, or discharge in accordance with their
terms, subject to any defenses or claimed offsets asserted in good faith
against the obligee to whom such liabilities or obligations are owed:
(a) all obligations of the Sellers under the Assumed Contracts,
including all cure amounts payable in order to cure any defaults or
otherwise effectuate, pursuant to the Bankruptcy Code, the assumption by
and assignment to the Purchaser of Assumed Contracts assigned to the
Purchaser under the Approval Order ("Cure Amounts"); and
(b) the following post-Petition current liabilities of Sellers
incurred or accrued but only in the dollar amount and to the extent such
liabilities exist on the Closing Date:
(i) liabilities or accruals of the type normally included
in the line item "MCC S/T Debt (MCC Hedging Overdrafts)" appearing
on the Projected Balance Sheet;
(ii) liabilities or accruals of the type normally
included in the line item "Trade Payables" appearing on the
Projected Balance Sheet;
(iii) liabilities or accruals of the type normally
included in the line item "Other Payables and Accruals" appearing
on the Projected Balance Sheet, except for liabilities or accruals
of the type normally included in the line item "Other Payables and
Accruals - Other Accruals-Professional Fees" appearing on the
Projected Balance Sheet;
(iv) liabilities or accruals of the type normally
included in the line item "Compensation & Benefits from
Operations" appearing on the Projected Balance Sheet, except for
liabilities or accruals for the Sellers' Retention Program as
defined in that certain Order Under 11 U.S.C. Sections 105(a) and
63(b)(1) authorizing Implementation of Key Employee Retention
Program entered on April 5, 2002 (Docket No. 833);
(v) liabilities or accruals of the type normally included
in the line item "Compensation & Benefits from Restructuring"
appearing on the Projected Balance Sheet; and
(vi) liabilities or accruals of the type normally
included in the line item "Post Employment Benefits" appearing on
the Projected Balance Sheet; and
(c) [Intentionally Omitted]
(d) all intercompany liabilities, including, but not limited to,
ordinary course payables and loans payable, which arose on or after the
Filing Date (the "Post-Petition Intercompany Payables") owed by the Sellers
to the Foreign Subsidiaries, except to the extent that such Post-Petition
Intercompany Payables may be cancelled or contributed pursuant to Section
6.07(i); and
(e) all obligations of the Sellers (excluding any pre-Petition
obligations or liabilities of the Sellers) under the Stipulation and Order
Resolving Motion of International Specialty Products Inc. and ISP Freetown
Fine Chemicals Inc. For an Order Compelling the Debtors to (I) Immediately
Assume or Reject Its Executory Contract Pursuant to Section 365(D)(2) of
the Bankruptcy Code or, in the Alternative, (II) Pay Market Rate Pricing
for Products Delivered Postpetition Should the Debtors Need More Time to
Assume or Reject the Executory Contract or the Debtors Ultimately Reject
Such Contract (Docket No. 749) entered on March 22, 2002.
Section 2.04. Excluded Liabilities. Notwithstanding anything to
the contrary contained in this Agreement or any other writing or commitment
(written or oral) to the contrary, the parties expressly acknowledge and
agree that the Purchaser shall not assume or in any manner whatsoever be
liable or responsible for any Liability of any Seller, or any predecessors
or Affiliate of any Seller, and any of their respective Representatives or
any claim against any and all of the foregoing, whether matured or
unmatured, known or unknown, contingent or absolute, direct or indirect,
whensoever incurred, whether or not related to the Business, other than the
Assumed Liabilities. All such Liabilities other than the Assumed
Liabilities are collectively referred to as the "Excluded Liabilities."
Notwithstanding anything to the contrary contained in this Agreement or any
other writing or commitment (written or oral) to the contrary, and without
limiting the foregoing, the following shall be considered "Excluded
Liabilities" for the purposes of this Agreement:
(a) any warranty or liability claim of any nature in respect of
products of the Business manufactured or sold by the Sellers, or services
of the Business provided by the Sellers, prior to or on the Filing Date;
(b) any liability of Sellers for Taxes, including (i) any of such
Taxes arising as a result of Sellers' operation of the Business or
ownership of the Acquired Assets on or before the Closing Date or that will
arise as a result of the sale of the Acquired Assets pursuant to this
Agreement or that will arise as a result of the Cash Consideration being
paid solely to Polaroid, (ii) any liability for Taxes pursuant to a tax
sharing agreement or tax indemnity and (iii) any liability for deferred
Taxes of any nature;
(c) any Environmental Liabilities of Sellers;
(d) any obligation or liability of Sellers arising under any
Contract other than the Assumed Contracts;
(e) any liability or obligation of Sellers to indemnify their
respective Representatives;
(f) any intercompany payables owed by any Seller to another
Seller;
(g) any liability or obligation to the Polaroid Employees or any
former Polaroid Employees of Sellers, including any liability or obligation
associated with, or in any way related to (in whole or in part): (i) any
Pension Plan or Welfare Plan, (ii) any other plan, agreement, arrangement
or understanding of Sellers or any ERISA Affiliate of Sellers that provides
any compensation or benefit to any Polaroid Employee or any former Polaroid
Employee, including any retiree medical benefits, (iii) any event,
occurrence, injury or illness occurring on or prior to the Closing
(including any (x) claims under workers' compensation laws or (y) medical,
health or disability claims arising after the Closing to the extent related
to any event, occurrence, injury, illness or condition occurring on or
before the Closing) or (iv) any liability or obligation related to the
termination of the employment of any Polaroid Employee or any former
Polaroid Employees of Sellers, or related to any employment, severance,
retention or termination agreement with any Polaroid Employee or any former
Polaroid Employees of Sellers;
(h) any liability or obligation of Sellers arising out of or
related to any employee grievances commenced or relating to periods on or
prior to the Closing Date;
(i) any liability or obligation in respect of the Excluded Assets;
(j) (x) any liability or obligation of Sellers for administrative
fees and expenses, including without limitation, "allowed administrative
expenses" under Section 503(b) of the Bankruptcy Code, except for the
Assumed Liabilities, and (y) any liability or obligation of Sellers for
transaction fees and expenses and fees and expenses payable to lenders,
brokers, financial advisors, legal counsel, accountants and other
professionals;
(k) any liability or obligation of Sellers under the Digimarc
Asset Purchase Agreement;
(l) any other liability or obligation of Sellers including any
liability or obligation directly or indirectly arising out of or relating
to the operation of the Business or ownership of the Acquired Assets on or
prior to the Closing Date, whether contingent or otherwise, fixed or
absolute, known or unknown, matured or unmatured, present, future or
otherwise, except for the Assumed Liabilities;
(m) all Pre-Petition Intercompany Payables (as defined in Section
6.19(a)); and
(n) except as provided in Section 2.03(a), any liability or
obligation of the Sellers incurred prior to the Filing Date.
Section 2.05. Consideration; Cash and Cash Equivalents.
(a) Consideration. In addition to the assumption of the Assumed
Liabilities, the consideration for the Acquired Assets (including the
Acquired Stock) (the "Consideration") shall be (i) the Sellers' Stock plus
(ii) $255,000,000, (w) minus the Requested Retained Cash (as defined in
Section 2.05(b)), (x) minus the Non-Assumed Liabilities Payments, (y) minus
the amounts set forth in Section 6.19(d) and 6.20 hereof actually used to
satisfy any Retained Related Party Accounts Receivable and to pay any Net
Related Party Special Dividends, in each case, to Sellers, and (z) plus the
amount specified in Section 6.19(b) hereof to compensate for any Requested
Dividend Withholding Taxes (the "Cash Consideration").
(b) Requested Retained Cash. At the Purchaser's election, the
Purchaser may require that the Sellers retain at Closing, such amount of
the Cash and Cash Equivalents held by the Sellers and the Foreign
Subsidiaries as determined by the Purchaser (the "Requested Retained
Cash"), in which case such Requested Retained Cash shall not be included in
the Acquired Assets.
(c) Cash and Cash Equivalents. On the date that is one Business
Day prior to the Closing Date, Polaroid shall deliver to the Purchaser
(with copies to counsel to the Committee and counsel to the Agent) a
certificate signed by an officer of Polaroid certifying (i) a good faith
estimate of the amount of Cash and Cash Equivalents held by the Sellers and
the Foreign Subsidiaries as of the date of delivery of the certificate and
(ii) the amount of all Non-Assumed Liabilities Payments made since June 2,
2002.
Section 2.06. Deposit Amount. The Purchaser has delivered to the
Escrow Agent pursuant to the terms of the Deposit Escrow Agreement $10
million in immediately available funds (such amount, together with the
interest accrued thereon prior to the Closing, the "Deposit Amount"), to be
held by the Escrow Agent in an interest bearing account reasonably
acceptable to the Purchaser to serve as a down payment on the
Consideration, and to be released in accordance with the following
procedures:
(a) on the Closing Date, the Sellers and the Purchaser shall
jointly instruct the Escrow Agent to deliver the Deposit Amount, by wire
transfer of immediately available funds, to an account designated by the
Sellers in the Deposit Escrow Agreement (and such amount shall be applied
towards the payment of the Consideration);
(b) upon termination of this Agreement by Purchaser under Section
9.01(d)(v), the Sellers and the Purchaser shall jointly instruct the Escrow
Agent to deliver (i) $3,000,000 of the Deposit Amount, by wire transfer of
immediately available funds, to an account designated by the Sellers in the
Deposit Escrow Agreement, to be retained by the Sellers and (ii) the
remainder of the Deposit Amount, by wire transfer of immediately available
funds, to an account designated by the Purchaser in the Deposit Escrow
Agreement, to be retained by the Purchaser;
(c) (i) upon termination of this Agreement by Polaroid under
Section 9.01(e)(i) or 9.01(e)(ii), and provided that no Seller is then in
material breach of this Agreement for which the Purchaser had previously
notified Polaroid or (ii) upon termination of this Agreement by the
Purchaser in violation of this Agreement, the Sellers and the Purchaser
shall jointly instruct the Escrow Agent to deliver the Deposit Amount, by
wire transfer of immediately available funds, to an account designated by
the Sellers in the Deposit Escrow Agreement, to be retained by the Sellers;
and
(d) upon termination of this Agreement pursuant to Section 9.01
(other than Section 9.01(d)(v), 9.01(e)(i) or 9.01(e)(ii)), the Sellers and
the Purchaser shall jointly instruct the Escrow Agent to deliver the
Deposit Amount, by wire transfer of immediately available funds, to an
account designated by the Purchaser in the Deposit Escrow Agreement, to be
retained by the Purchaser.
ARTICLE III
THE CLOSING
Section 3.01. Closing. The closing of the Contemplated
Transactions (the "Closing") shall take place at the New York offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP at 10:00 a.m. on the later of July
29, 2002 or the second Business Day after the conditions set forth in
Article VIII shall have been satisfied or waived, or at such other time,
date and place as shall be fixed by agreement among the Purchaser and
Polaroid (the date of the Closing being herein referred to as the "Closing
Date").
Section 3.02. Consideration; Deliveries.
(a) Purchaser Deliveries. Subject to the terms and conditions
hereof, at the Closing, the Purchaser shall deliver, or cause to be
delivered, to the Sellers the following:
(i) the Cash Consideration less the Deposit Amount, in
immediately available funds by wire transfer to an account
designated by Polaroid;
(ii) stock certificates representing the Sellers' Stock
registered in the name of Polaroid Corporation, as agent for
itself and the other Sellers;
(iii) a certificate, dated the Closing Date, executed on
behalf of the Purchaser by its Chief Executive Officer or Chief
Financial Officer, certifying that the conditions specified in
Section 8.02(a) have been fulfilled;
(iv) a certificate, dated the Closing Date, executed on
behalf of the Purchaser by its Secretary or an Assistant
Secretary, certifying: (a) a true and correct copy of the
Purchaser's Organizational Documents, (b) a true and correct copy
of the resolutions of the Purchaser's board authorizing the
execution, delivery and performance of this Agreement by the
Purchaser and the consummation of the transactions contemplated
hereby and (c) incumbency matters;
(v) a certificate of the Secretary of State of the State
of Delaware, dated as of a date not earlier than the second
Business Day prior to the Closing, certifying the good standing of
the Purchaser in the State of Delaware; and
(vi) duly executed Ancillary Agreements.
(b) Sellers Deliveries. Subject to the terms and conditions
hereof, at the Closing the Sellers shall deliver, or cause to be delivered,
to the Purchaser or its permitted assigns the following:
(i) duly executed Ancillary Agreements;
(ii) a certificate, dated the Closing Date, executed on
behalf of the Sellers by Polaroid's Chief Executive Officer or
Chief Financial Officer, certifying that the conditions specified
in Section 8.03(a) have been fulfilled;
(iii) a certificate, dated the Closing Date, executed on
behalf of the Sellers by Polaroid's Secretary or an Assistant
Secretary, certifying: (a) a true and correct copy of each
Seller's Organizational Documents, (b) a true and correct copy of
the resolutions of each Seller's board authorizing the execution,
delivery and performance of this Agreement by each Seller and the
consummation of the transactions contemplated hereby and (c)
incumbency matters;
(iv) certified copies of all orders of the Bankruptcy
Court pertaining to the Contemplated Transactions, including the
Sales Procedures Order and the Approval Order;
(v) to the extent that Equity Interests of Acquired
Subsidiaries are represented by stock certificates, original
certificates evidencing the Acquired Stock (to the extent
applicable in the respective jurisdiction), which certificates
shall be duly endorsed for transfer or accompanied by duly
executed stock transfer powers or other appropriate instruments of
assignment and transfer in favor of Purchaser or its permitted
assigns;
(vi) if the Equity Interests of an Acquired Subsidiary
are not represented by stock certificates, evidence of the
transfer of said Equity Interests to the Purchaser or its
permitted assigns;
(vii) title certificates to any motor vehicles included
in the Acquired Assets, duly executed by Sellers (together with
any other transfer forms necessary to transfer title to such
vehicles);
(viii) a receipt for the payment of the Cash
Consideration less the Deposit Amount duly executed by Sellers;
and
(ix) all such other instruments of assignment, transfer
or conveyance as shall, in the reasonable opinion of the Purchaser
and its counsel, be necessary to vest in the Purchaser good, valid
and marketable title to the Acquired Assets and to put the
Purchaser in actual possession or control of the Acquired Assets.
Section 3.03. Purchase Price Allocation.
(a) Prior to the Closing, the Purchaser and the Sellers shall
agree upon the allocation of the Consideration (and all other items
properly included in "consideration," as described in Treasury Regulation
section 1.1060-1(c)(1)), in a manner consistent with Section 1060 of the
Code and the rules and regulations thereunder (the "Allocation"). The
Allocation shall be adjusted as necessary to reflect any adjustments to the
Consideration after the Closing Date. The Purchaser and the Sellers agree
to use such allocation in filing all required forms under Section 1060 of
the Code (or any comparable forms under state or foreign law), and all
other Tax Returns, and the Purchaser and the Sellers further agree that
they shall not take any position inconsistent with such allocation upon any
examination of any such Tax Return, in any refund claim or in any tax
litigation. Not later than 30 days prior to the filing of their respective
Forms 8594 relating to this transaction, each party shall deliver to the
other party a copy of its Form 8594.
(b) The Purchaser and the Sellers further agree that the payment
of the Consideration to Sellers contemplated by Section 3.02 may be made to
a single Seller that is designated by Polaroid in writing as being
authorized to act as agent for all of the Sellers, whereupon each Seller
shall be deemed to have received the Consideration allocable to the
Acquired Assets owned by such Seller in accordance with the allocation
determination under this Section 3.03, provided that any Taxes that arise
as a result of the payment being made to a single Seller shall be Excluded
Liabilities.
(c) The Purchaser and the Sellers agree that, in the event that
the Acquired Assets to be transferred pursuant to this Agreement ultimately
are transferred pursuant to more than one separate agreement between the
Purchaser and/or its designated Affiliate and the Sellers, the Purchaser
and/or its designated Affiliate and the Sellers will treat the transfers
under all such agreements as a series of related transactions within the
meaning of Treasury Regulations section 1.1060-1(b)(5), and such transfers
shall therefore be treated as the transfer of a single trade or business,
as described in Section 1060 of the Code and the rules and regulations
thereunder. The Purchaser and the Sellers shall aggregate the amounts paid
under all such agreements and allocate that aggregate amount among all
assets acquired under all such agreements as if all such transactions had
been consummated pursuant to a single purchase and sale transaction,
resulting in a single Form 8594 being filed for the Contemplated
Transactions.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Except as set forth in the Disclosure Schedule, the Sellers
jointly and severally represent and warrant to the Purchaser on and as of
the date hereof and as of the Closing Date as follows:
Section 4.01. Organization and Good Standing.
(a) Each Polaroid Entity is a legal entity duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization and has all requisite corporate or other
organizational power and, subject to Bankruptcy Court approval, authority
to own, use, lease and operate its properties and assets as now owned,
used, leased and operated and to carry on its business as and where
presently being conducted, and is qualified or licensed to do business and
is in good standing in every jurisdiction where the nature of the business
conducted by it or the properties owned, leased or operated by it requires
qualification or licensure, except where the failure to be so licensed or
qualified would not have a Material Adverse Effect.
(b) Except as set forth on Section 4.01(b) of the Disclosure
Schedule, there are no direct or indirect Subsidiaries of Polaroid other
than the other Sellers and the Acquired Subsidiaries. Except as set forth
on Section 4.01(b) of the Disclosure Schedule, Sellers own all of the
issued and outstanding capital stock and other Equity Interests of each
Acquired Subsidiary. There are no other shares of capital stock or other
Equity Interests of any Acquired Subsidiary issued other than as set forth
on Section 4.01(b) of the Disclosure Schedule and there are no declared and
unpaid dividends or distributions on any such capital stock or other Equity
Interests. The Acquired Stock (i) has been duly authorized, validly issued,
and is fully paid and nonassessable (in those jurisdictions in which such
concepts are applicable), (ii) has not been issued in violation of any
preemptive rights of stockholders or of any terms of any agreement or other
understanding binding upon any Polaroid Entity, and (iii) has been offered
and sold in compliance with any and all applicable securities laws, rules
and regulations. Except for directors' qualifying shares and shares held by
other Polaroid appointees required to be issued to comply with local
government regulations, all of the outstanding capital stock and other
Equity Interests of the Foreign Subsidiaries are owned beneficially and of
record (directly or indirectly) by Polaroid free and clear of any and all
Encumbrances. Except as set forth in Section 4.01(b) of the Disclosure
Schedule, there is no security, option, warrant, right, call, subscription
agreement, commitment or understanding of any nature whatsoever to which
any of the Polaroid Entities is a party or by which it is bound, that (i)
calls for the issuance, sale, pledge or other disposition of any Equity
Interests of the Foreign Subsidiaries or any securities convertible into or
exchangeable for, or other rights to acquire, any Equity Interests of the
Foreign Subsidiaries, (ii) obligates any Polaroid Entity to grant, offer or
enter into any of the foregoing or to repurchase, redeem or otherwise
acquire any capital stock or other Equity Interests of the Foreign
Subsidiaries or (iii) relates to the transfer, dividends rights, voting,
control, or registration rights of such Equity Interests or rights. Upon
the Closing, Purchaser or its designee will be the sole owner of all right,
title and interest in the Equity Interests of the Acquired Subsidiaries.
Section 4.02. Authority Relative to this Agreement. Each Seller
has the corporate or other organizational power and authority to enter into
and deliver this Agreement and the Ancillary Agreements and, subject to
Bankruptcy Court approval, to carry out its obligations hereunder and
thereunder. The execution, delivery, and performance of this Agreement and
the Ancillary Agreements by each of the Sellers party thereto and the
consummation by each of the Sellers of the Contemplated Transactions have
been duly authorized by all requisite corporate or other organizational
actions. Subject to the entry and effectiveness of the Sale Procedures
Order and the Approval Order, this Agreement has been duly and validly
executed and delivered by or on behalf of each of the Sellers and (assuming
this Agreement constitutes a valid and binding obligation of the Purchaser)
constitutes a legal, valid and binding agreement of the Sellers,
enforceable against the Sellers in accordance with its terms, and the
Ancillary Agreements will be, when executed and delivered by the Sellers
parties thereto, the legal, valid and binding obligations of the Sellers
parties thereto, enforceable against the Sellers parties thereto in
accordance with their respective terms, in each case subject to applicable
bankruptcy, reorganization, insolvency, moratorium, and other laws
affecting creditors' rights generally from time to time in effect and to
general equitable principles.
Section 4.03. Governmental Consents and Approvals. No consent,
approval, authorization of, declaration, filing, or registration with, any
domestic or foreign government or regulatory authority, is required to be
made or obtained by any of the Sellers in connection with the execution,
delivery, and performance of this Agreement and the Ancillary Agreements
and the consummation of the Contemplated Transactions, except for: (a)
consents, approvals, authorizations of, declarations, or filings with, the
Bankruptcy Court, (b) the filing of a notification and report form under
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), and the expiration or earlier termination of the applicable
waiting period thereunder, (c) the filing ------- of required notifications
under applicable foreign antitrust laws and regulations and the receipt of
any necessary approvals thereunder, and (d) consents, approvals,
authorizations, declarations, filings and registrations the lack of which
would not have a Material Adverse Effect. The items referred to in clauses
(a) through (c) of this Section 4.03 are hereinafter referred to as the
"Governmental Requirements."
Section 4.04. No Violations. Assuming that the Governmental
Requirements will be satisfied, made, or obtained and will remain in full
force and effect, and assuming receipt of the consents, approvals and
authorizations listed in Section 4.04 of the Disclosure Schedule, neither
the execution, delivery, or performance of this Agreement and the Ancillary
Agreements by the Sellers parties thereto, nor the consummation by any
Seller of the Contemplated Transactions, nor compliance by any Seller with
any of the provisions hereof and of the Ancillary Agreements, will (a)
result in any breach of any provisions of the articles of incorporation or
bylaws or similar organizational documents of any Polaroid Entity, (b)
result in a violation, or breach of, or constitute (with or without due
notice or lapse of time) a default (or give rise to any right of
termination, cancellation, amendment, vesting, payment, exercise,
acceleration, suspension, or revocation) under any of the terms,
conditions, or provisions of any note, bond, mortgage, deed of trust,
security interest, indenture, loan or credit agreement, license, permit,
contract, lease, agreement, plan, or other instrument, commitment or
obligation to which any Polaroid Entity is a party or by which such
Polaroid Entity's properties or assets may be bound or affected, (c)
violate any order, writ, governmental authorization, injunction, decree,
statute, rule, or regulation applicable to any Polaroid Entity or to any
properties or assets of any Polaroid Entity, or (d) result in the creation
or imposition of any Encumbrance other than Permitted Encumbrances on any
asset of a Polaroid Entity, except in the case of clauses (b) and (d)
above, for violations, breaches, defaults, terminations, cancellations,
accelerations, creations, impositions, suspensions, or revocations that (i)
would not individually or in the aggregate have a Material Adverse Effect
or (ii) are excused by or unenforceable as a result of the filing of the
Petitions or the applicability of any provision of or any applicable law of
the Bankruptcy Code.
Section 4.05. Contracts; Compliance. True and complete copies of
all material Contracts relating to the Business have been made available to
Purchaser. Each of the Contracts relating to the Business is valid, binding
and, subject to payment of all cure amounts payable to effectuate, pursuant
to the Bankruptcy Code, the assumption by and assignment to the Purchaser
of such Contracts under the Approval Order, if applicable, enforceable
against the Polaroid Entity party thereto and, to the Sellers' Knowledge,
the other parties thereto, in accordance with its terms and is in full
force and effect. Except as set forth in Section 4.05 of the Disclosure
Schedule and other than with respect to monetary defaults by the Sellers
under Contracts that are curable by payment of all cure amounts payable to
effectuate, pursuant to the Bankruptcy Code, the assumption by and
assignment to the Purchaser of such Contracts under the Approval Order, if
applicable, the Polaroid Entities party thereto and, to the Sellers'
Knowledge, each of the other parties thereto, have performed all
obligations required to be performed by them under, and are not in default
in respect of, any of such Contracts, and no event has occurred which, with
notice or lapse of time, or both, would constitute such a default, other
than where the failure to perform such obligations or such default would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Except as set forth in Section 4.05 of the
Disclosure Schedule and other than with respect to monetary defaults by the
Sellers under Contracts that are curable by payment of all cure amounts
payable to effectuate, pursuant to the Bankruptcy Code, the assumption by
and assignment to the Purchaser of such Contracts under the Approval Order,
if applicable, to the Sellers' Knowledge, Sellers have received no claim or
notice from any other party to any such Contract that any Polaroid Entity
has breached any obligations to be performed by it thereunder, or is
otherwise in default or delinquent in performance thereunder, where the
consequence of such breach or default would be reasonably expected to have
a Material Adverse Effect. Section 4.05 of the Disclosure Schedule lists
all Post-Petition Contracts of the Sellers relating to the Business other
than immaterial Post-Petition Contracts and open purchase orders entered
into in the Ordinary Course of Business. Except as set forth on Section
4.05 of the Disclosure Schedule and except for Post-Petition Contracts that
are immaterial to the Business, none of the Post-Petition Contracts
contains any provisions restricting its assignment to the Purchaser
pursuant to the terms of this Agreement.
Section 4.06. Accounts Receivable; Accounts Payable
(a) All of the Accounts Receivable of the Business reflected on
the Audited Financial Statement for the year ended December 31, 2001 (the
"2001 Audited Financial Statement") or acquired after the date thereof and
on or before the Closing Date represent amounts receivable for products
actually delivered or services actually provided, and have arisen from bona
fide transactions in the Ordinary Course of Business. All Accounts
Receivable of the Business reflected on the 2001 Audited Financial
Statement or acquired after the date thereof and on or before the Closing
Date are accurately reflected on the books of the Business and have arisen
from bona fide transactions. The reserve on the 2001 Audited Financial
Statement for doubtful accounts is adequate in accordance with GAAP.
(b) All of the Accounts Payable and all payables and other
accruals of the Business reflected on the 2001 Audited Financial Statement
or which have arisen after the date thereof and on or before the Closing
Date are accurately reflected on the books of the Business and have arisen
from bona fide transactions in the Ordinary Course of Business.
Section 4.07. Inventory. The raw materials and works-in-process
are useable in the Ordinary Course of Business in the production or
completion of the finished goods included in the Acquired Assets. All of
the raw materials and works-in-process can reasonably be expected to be
consumed (other than with respect to scrappage consistent with past
practice of the Business) in the Ordinary Course of Business within a
reasonable period of time, and the finished goods included in the Acquired
Assets are fit for the ordinary purposes, or if applicable, the particular
purposes, for which such finished goods are used and are saleable in the
Ordinary Course of Business. All Inventory of the Polaroid Entities
relating to the Business and reflected on the 2001 Audited Financial
Statement or acquired by the Polaroid Entities thereafter and on or before
the Closing Date is carried on Sellers' books and records relating to the
Business at not in excess of the lower of historical cost or market price
determined in accordance with GAAP. Sellers have provided for adequate
reserves in accordance with GAAP with respect to slow moving, damaged and
obsolete Inventory.
Section 4.08. All Assets. Except for the Excluded Assets, the
Acquired Assets include all assets and properties of Sellers which are
primarily related to, or otherwise material to the conduct of, the
Business. To Sellers' Knowledge, no additional assets other than those
included in the Acquired Assets are necessary in order to operate the
Business.
Section 4.09. Financial Statements. The books of account and
related records of each Polaroid Entity for the Business fairly reflect in
reasonable detail all assets, liabilities and transactions relating to the
Business in accordance with GAAP. Polaroid has delivered to the Purchaser
true, correct and complete copies of the audited consolidated financial
statements of Polaroid as of and for the 12-month periods ended December
31, 2001, December 31, 2000 and December 31, 1999, each together with a
report thereon by the Sellers' Auditors (the "Audited Financial
Statements"). Attached hereto as Section 4.09 of the Disclosure Schedule
are the unaudited historical balance sheet of the Business as of June 2,
2002 and the unaudited historical statements of results of operations and
cash flows of the Business for the five-month period ended June 2, 2002
(collectively, the "Interim Financial Statements" and together with the
Audited Financial Statements, the "Financial Statements"). The Financial
Statements were compiled from each Polaroid Entity's books and records for
the Business, are in accordance with such books and records, present fairly
in all material respects the financial position of Polaroid and its
consolidated Subsidiaries as of the dates thereof, their results of
operations and cash flows for the periods then ended (except, in the case
of the Interim Financial Statements, in respect of normal and recurring
year end adjustments, none of which is material in amount), and the assets
and liabilities of the Business as of the dates thereof, in accordance with
GAAP consistently applied throughout the period. Except for (a) Liabilities
incurred in the Ordinary Course of Business after the Determination Date;
(b) Liabilities disclosed, reflected or provided for in the Financial
Statements; (c) Liabilities disclosed in the Disclosure Schedule and (d)
Liabilities incurred in connection with the transactions contemplated
hereby, from the Determination Date, no Polaroid Entity has incurred any
Liabilities that would both (i) be required to be reflected or provided for
in a balance sheet prepared in accordance with GAAP and the policies,
procedures and methods used to prepare the Financial Statements and (ii) be
reasonably likely to have a Material Adverse Effect.
Section 4.10. Relationship with Customers and Suppliers. Section
4.10 of the Disclosure Schedule sets forth a complete and correct list of
the twenty (20) largest customers (by net sales) and twenty (20) largest
suppliers (by dollar volume) of the Polaroid Entities for the fiscal year
ended December 31, 2001 and for the two-month period ended March 3, 2002.
To Sellers' Knowledge, no such customer or supplier listed on Section 4.10
of the Disclosure Schedule, or any customer who is the sole purchaser of a
product or any supplier who is the sole source of any supplies, intends to
terminate or adversely and materially modify its business relationship with
any Polaroid Entity.
Section 4.11. No Changes. From the Determination Date to the date
hereof, except as disclosed in Section 4.11 of the Disclosure Schedule, the
Polaroid Entities have conducted the Business only in the Ordinary Course
of Business. Without limiting the generality of the foregoing, since the
Determination Date, except as disclosed in Section 4.11 of the Disclosure
Schedule, there has not been:
(a) any Material Adverse Effect;
(b) any increase in the salaries or other compensation payable or
to become payable to any Employee whose aggregate annual compensation prior
to the Determination Date was in excess of $100,000 (or the foreign
currency equivalent thereof) or any general increase in the salaries or
other compensation payable or to become payable to Employees outside the
Ordinary Course of Business, or any advance (excluding advances for
ordinary business expenses) or loan to, any Employee or any increase in, or
any addition to, other benefits (including any bonus, profit-sharing,
pension or other plan) to which any of the Employees may be entitled, or
any payments to any pension, retirement, profit-sharing, bonus or similar
plan except payments in the Ordinary Course of Business made pursuant to
the benefit plans described in Section 4.11(b) of the Disclosure Schedule,
or any other payment of any kind to or on behalf of any Employee other than
payment of base compensation and reimbursement for reasonable expenses in
the Ordinary Course of Business;
(c) any damage, destruction or loss affecting the Business in
excess of $500,000, whether or not covered by insurance;
(d) any cancellation or waiver of any right material to the
Business or any cancellation or waiver of any material debts or claims of
the Business;
(e) any change by any Polaroid Entity in its method of accounting
or keeping its books of account or accounting practices;
(f) any disposition of or failure to keep in effect any rights in,
to or for the use of any of the Intellectual Property (other than with
respect to Trade Secrets) relating to the Business, or, to the Sellers'
Knowledge, any disposition of or failure to keep in effect any rights in,
to or for the use of any Trade Secrets relating to the Business;
(g) any sale, transfer or other disposition of any material
assets, properties or rights of the Business, except sales of Inventory in
the Ordinary Course of Business;
(h) any mortgage, pledge or subjection to an Encumbrance of any
kind (other than Permitted Encumbrances) of any assets, tangible or
intangible, of the Business;
(i) any making or authorization of any single capital expenditure
in excess of $500,000, or capital expenditures in excess of $5,000,000 in
the aggregate; or
(j) any material change or modification of any Polaroid Entity's
credit, collection and payment policies, procedures and general practices
with respect to the collection of Accounts Receivable and the payment of
Accounts Payable.
Section 4.12. Litigation. Except for the pendency of the Case,
there is no suit, action, proceeding, or investigation (whether at law or
equity, before or by any federal, state, or foreign commission, court,
tribunal, board, agency, or instrumentality, or before any arbitrator)
pending or, to any of the Sellers' Knowledge, threatened against or
affecting any Polaroid Entity, the outcome of which would have,
individually or in the aggregate, a Material Adverse Effect, nor is there
any judgment, decree, injunction, rule, or order of any court, governmental
department, commission, agency, instrumentality, or arbitrator outstanding
against any Polaroid Entity that would have a Material Adverse Effect.
Section 4.13. No Default. No Acquired Subsidiary is in violation,
breach of, or default under (and no event has occurred that with notice or
the lapse of time would constitute a violation, breach of, or a default
under) any term, condition, or provision of (a) its articles of
incorporation or bylaws or other organizational documents, (b) any note,
bond, mortgage, deed of trust, security interest, indenture, loan or credit
agreement, license, permit, contract, lease, agreement, plan, or other
instrument, commitment or obligation to which such Acquired Subsidiary is a
party or by which such Acquired Subsidiary's properties or assets may be
bound or affected, or (c) any order, writ, governmental authorization,
injunction, decree, statute, rule, or regulation applicable to such
Acquired Subsidiary or to such Acquired Subsidiary's properties or assets,
except, in the case of clause (b) above, as would not, individually or in
the aggregate, result in a Material Adverse Effect.
Section 4.14. No Violation of Law.
(a) Except as set forth in Section 4.14 of the Disclosure
Schedule, the Polaroid Entities possess and are in compliance with all
Permits (other than Environmental Permits which are governed by Section
4.15) required in connection with the conduct of the Business under all
applicable laws, rules, regulations and ordinances, the failure of which to
obtain or hold would be reasonably expected to have a Material Adverse
Effect. Except as set forth in Section 4.14 of the Disclosure Schedule,
since December 31, 1999, the Polaroid Entities have conducted the Business
and are currently doing so in compliance with all Applicable Law relating
to the Business, except for such violations which would not be reasonably
expected to have a Material Adverse Effect. Except as set forth in Section
4.14 of the Disclosure Schedule, no Permit (other than Environmental
Permits which are governed by Section 4.15) not presently possessed by the
Polaroid Entities is required under applicable law to conduct the Business,
except as would not, individually or in the aggregate, result in a Material
Adverse Effect. Except as set forth in Section 4.14 of the Disclosure
Schedule, the Permits (other than Environmental Permits which are governed
by Section 4.15) of the Polaroid Entities relating to the operation of the
Business are in full force and effect and there are no proceedings pending
or, to Sellers' Knowledge, threatened that seek the revocation,
cancellation, suspension or any adverse modification of any such Permits,
except as would not, individually or in the aggregate, result in a Material
Adverse Effect.
(b) Except to the extent excused by or unenforceable as a result
of the commencement or pendency of the Case or the application of any
provision of the Bankruptcy Code, no Polaroid Entity is in violation of, or
has been given notice or been charged with any violation of, Applicable Law
relating to the Business, except for such violations, notices, or changes
that would not, individually or in the aggregate, result in a Material
Adverse Effect.
Section 4.15. Environmental Matters. Except as specifically
disclosed in Section 4.15 of the Disclosure Schedule (which disclosed items
would not, individually or in the aggregate, result in a Material Adverse
Effect):
(a) each Polaroid Entity is, and has been for the applicable
statute of limitations period, in compliance in all material respects with
all applicable Environmental Laws (which, for purposes of this subsection,
does not include the Occupational Safety and Health Act);
(b) no Polaroid Entity is subject to any pending or, to the
Sellers' Knowledge, threatened claim, action, suit, investigation, inquiry,
or proceeding under any Environmental Law with respect to the Release or
threat of Release of any Hazardous Materials, or with respect to any
Environmental Liability;
(c) there has been no Release, or, to the Sellers' Knowledge,
threat of Release, of Hazardous Materials by any Polaroid Entity or any of
their predecessors, or otherwise arising in connection with the Business
(as currently or formerly operated) or at any of the properties currently
used, owned, operated or leased by the Business that requires or may
reasonably be expected in the future to require investigation, remediation,
or other responses or actions ("Remediation") under Environmental Laws;
(d) the Polaroid Entities hold and have been for the applicable
statute of limitations period, and are in compliance in all material
respects with, all permits, certificates, licenses, approvals,
registrations and authorizations required under Environmental Laws
("Environmental Permits"), all such Environmental Permits are in full force
and effect and, to the extent required so that the Business can continue
operations immediately after Closing in all material respects in the same
manner as conducted immediately before the Closing, all Environmental
Permits are transferable or assignable to the Purchaser or can be reissued
to the Purchaser under Environmental Laws without material interruption to
the Business.
(e) the Sellers have not received any written or, to the Sellers'
Knowledge, any other request for information, notice of claims, demand or
other notification that they (or any of their predecessors) are or may be
potentially responsible with respect to any Remediation of Hazardous
Materials (whether on-site or off-site). No Hazardous Materials Managed or
Released by or on behalf of Sellers have come to be located at any site
listed on the National Priorities List promulgated pursuant to CERCLA,
CERCLIS, any similar list maintained by any Governmental Authority, or
which requires Remediation under applicable Environmental Laws;
(f) there are no underground storage tanks (either active or
abandoned), asbestos or asbestos-containing materials, or PCB-containing
equipment at any property owned, leased or operated by Sellers which
requires closure, removal, abatement, or retrofilling under Environmental
Laws;
(g) all non-privileged environmental investigations, inspections,
studies, audits, tests, reviews or other analysis conducted in relation to
Sellers, any real property currently or formerly owned, operated or leased
by Sellers (or their predecessors) or the Business (as currently or
formerly operated) (collectively, "Environmental Audits") in the possession
or control of Sellers have been made available to Purchaser, and none of
the privileged Environmental Audits which have not been made available to
the Purchaser contains material information not otherwise disclosed to the
Purchaser in writing; and
(h) the Sellers have not retained or assumed by contract any
liability or responsibility for any Environmental Liabilities,
environmental claims or environmental conditions.
Section 4.16. Employee Benefits.
(a) Section 4.16(a) of the Disclosure Schedule contains a true,
correct and complete list of Pension Plans and Welfare Plans (including,
but not limited to, medical, dental, life insurance and severance plans) or
other material employee fringe benefit plans presently maintained by, or
contributed to by, Sellers for the benefit of any current Employees of
Sellers who are or were engaged in the Business. True and complete copies
of each of said plans have been or will be furnished or made available to
Purchaser.
(b) There are no Multiemployer Plans applicable to any Hired
Employees.
(c) Except as may be disclosed on Section 4.16 of the Disclosure
Schedule, or as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect:
(i) no asset of any Seller or any ERISA Affiliate, which
is to be acquired by Purchaser pursuant to this Agreement, is
subject to any lien under Code section 401(a)(29), ERISA Section
302(f) or Code section 412(n), ERISA Section 4068 or arising out
of any action filed under ERISA Section 4301(b).
(ii) Neither the Sellers nor any ERISA Affiliate has
incurred any liability which would reasonably be expected to
subject Purchaser or any asset to be acquired by Purchaser
pursuant to this Agreement to material liability under Section
4062, 4063, 4064 or 4069 of ERISA.
(iii) Neither the Sellers nor any ERISA Affiliate, has
incurred any withdrawal liability, within the meaning of Section
4201 of ERISA, including a contingent withdrawal liability as a
result of a transaction described in Section 4204 of ERISA with
respect to any multiemployer pension plan, as defined in Section
4001 of ERISA, that could reasonably be expected to subject
Purchaser or any asset to be acquired by Purchaser pursuant to
this Agreement to material liability, which liability has not been
fully paid as of the date hereof.
(d) (i) Schedule 4.16(d) of the Disclosure Schedule contains
a true and complete list of each pension plan and each plan comparable to a
Welfare Plan, including, but not limited to, each medical, dental, life
insurance and severance plan maintained by Sellers or any Acquired
Subsidiary, for any current Employee in the United Kingdom, Xxx
Xxxxxxxxxxx, Xxxxx, Xxxx Xxxx, Xxxxxx, Xxxxxxx and Italy. True copies of
each such plan, or an accurate description of any such plan that is not
written, has been furnished or made available to Purchaser prior to the
Closing Date.
(ii) For purposes of Sections 4.16(e) and (f), the terms
"Foreign Plan" or "Foreign Plans" includes any pension plan, plan
comparable to a Welfare Plan, including, but not limited to,
medical, dental, life insurance and severance plans, as well as
any bonus, deferred compensation or other material fringe benefit
plan maintained or required to be maintained by the law of the
relevant jurisdiction by any Seller or any Acquired Subsidiary for
the benefit of any employee or former employee of any Acquired
Subsidiary.
(e) Sellers and the Acquired Subsidiaries and each of the Foreign
Plans are in compliance in all material respects with the provisions of the
laws of each jurisdiction in which any of the Foreign Plans are maintained,
to the extent such laws are applicable to the Foreign Plans.
(f) Except as may be set forth in Schedule 4.16 of the Disclosure
Schedule, or as could not reasonably be expected, individually or in the
aggregate to have a Material Adverse Effect:
(i) all contributions to, and payments from, the Foreign
Plans, or to or from a trust, insurance contract or other funding
medium maintained in connection with any such Foreign Plan, which
may have been required to be made in accordance with the terms of
any such plan or the law of the jurisdiction in which such plan is
maintained, have been timely made. All contributions to the
Foreign Plans, and all payments under the Foreign Plans, for any
period ending before the Closing Date that are not yet, but will
be, required to be made are properly accrued and reflected on the
financial statements of the employer maintaining such plan.
(ii) All material reports, returns and similar documents
with respect to any Foreign Plan required to be filed with any
government agency or distributed to any Foreign Plan participant
have been duly and timely filed or distributed.
(iii) Each of the Foreign Plans has obtained from the
government or governments having jurisdiction with respect to such
plan any required determinations that such plans are in compliance
with the laws and regulations of any government.
(iv) Each of the Foreign Plans has been administered at
all times, in all material respects, in accordance with its terms.
There are no pending investigations by any governmental agency
involving the Foreign Plans, no claims pending or threatened in
writing (except for claims for benefits payable in the normal
operation of the Foreign Plans), suits or proceedings against any
Foreign Plan or asserting any rights or claims to benefits under
any Foreign Plan which could give rise to any liability, nor are
there any facts that could give rise to any material liability in
the event of such investigation, claim, suit or proceeding.
(v) The assets of each of the Foreign Plans (which is
comparable to an employee pension benefit plan as defined in
Section 3(2) of ERISA or otherwise provides retirement, medical or
life insurance benefits following retirement) are at least equal
to the liabilities of such plans. Purchaser will incur no material
liability with respect to any Foreign Plan with respect to service
thereunder performed before the Closing Date, other than liability
for contributions attributable to periods following the Closing
Date.
(vi) No Foreign Plan entitles any Employee or former
Employee covered under any such Plan to purchase or otherwise
acquire any equity interest in any Seller or any Affiliate of the
Seller maintaining such Foreign Plan.
Section 4.17. Real Property.
(a) Section 4.17 of the Disclosure Schedule sets forth a list of
all of the real estate owned by the Polaroid Entities and used in the
Business (such real estate, together with all beneficial, appurtenant
easements and other appurtenances thereto and with all Improvements, is
collectively referred to herein as the "Owned Real Estate"), and includes
the street address and the related deeds or the legal description of each
parcel of the Owned Real Estate. Sellers have made available to Purchaser
true, correct and complete copies of all (A) title reports, title insurance
policies and commitments therefor, (B) surveys, and (C) licenses,
certificates of occupancy, plans, specifications and permits pertaining to
the Owned Real Estate that are in the possession or control of Sellers.
Sellers represent and warrant with respect to the Owned Real Estate:
(i) Except as set forth in Section 4.17 of the Disclosure
Schedule, the Polaroid Entities have good, valid, marketable and
indefeasible fee simple title to, and are in actual, exclusive
possession of, the Owned Real Estate. The Owned Real Estate is
free and clear of all Encumbrances other than Permitted
Encumbrances.
(ii) No portion of any of the Owned Real Estate is
subject to a special ad valorem tax valuation or rate that will be
lost as a result of the transfer to Purchaser pursuant to the
provisions hereof.
(iii) Sellers have not received notice from any
Governmental Authority or insurance carrier of any matter that
would have a Material Adverse Effect upon the Owned Real Estate.
(iv) The Owned Real Estate and the use thereof by the
Polaroid Entities in connection with the Business as currently
used and consistent with past practice complies in all material
respects with all covenants, easements and restrictions of record
affecting the Owned Real Estate.
(b) Section 4.17 of the Disclosure Schedule sets forth a list of
all of the leases or rights of occupancy pursuant to which the Polaroid
Entities lease or sublease any real property or interest therein related to
or used by the Polaroid Entities in the Business (collectively, as
heretofore modified, amended or extended, the "Leases"), including the
identification of each of the lessors thereof and the street addresses of
all of the real estate demised under each of the Leases (collectively, the
"Leased Real Estate"). To the extent within Sellers' possession and
control, Sellers have made available to Purchaser true, correct and
complete copies of all (A) leasehold title reports, leasehold title
insurance policies and commitments therefor, (B) surveys, (C) licenses,
certificates of occupancy, plans, specifications and permits and other
documents pertaining to the Leased Real Estate that are in the possession
or control of Sellers and (D) each of the Leases, including all amendments,
modifications and extensions, and together with all subordination,
non-disturbance and/or attornment agreements related thereto. Sellers
represent and warrant with respect to the Leased Real Estate:
(i) Except as set forth in Section 4.17 of the Disclosure
Schedule, one or more of the Polaroid Entities is the lessee under
all Leases and has actual exclusive possession of the Leased Real
Estate. No party other than one or more of the Polaroid Entities
has any right to possession, occupancy or use of any of the Leased
Real Estate.
(ii) Each of the Leases is valid and in full force and
effect and is binding and enforceable in accordance with its
terms. Except as set forth in Section 4.17 of the Disclosure
Schedule, none, of the Sellers has received any written notice of
default under any provision of any of the Leases.
(iii) Except as set forth in Section 4.17 of the
Disclosure Schedule, none of the Polaroid Entities and, to
Sellers' Knowledge, none of the lessors under any of the Leases is
in material breach or default under any of the Leases and no event
has occurred that with notice, the passage of time or both would
constitute such a material breach or default or permit
termination, modification or acceleration thereunder.
(iv) The Polaroid Entities have good, valid and
indefeasible title to all the leasehold estates conveyed under the
Leases free and clear of all Encumbrances, except Permitted
Encumbrances.
(v) Except as set forth in Section 4.17 of the Disclosure
Schedule, there have been no casualties or condemnations which
could result in the termination of any of the Leases.
(vi) Except as set forth in Section 4.17 of the
Disclosure Schedule: (i) no consent of any of the lessors under
any of the Leases is required by reason of any of the transactions
contemplated by this Agreement, and (ii) none of the rights of the
Polaroid Entities under any of the Leases will be impaired by the
consummation of the transactions contemplated by this Agreement.
(c) Sellers represent and warrant with respect to both the Owned
Real Estate and the Leased Real Estate (collectively, the "Real Estate")
that (i) there is no violation of any Applicable Laws that would have a
Material Adverse Effect, (ii) all the Real Estate is adequately serviced in
all material respects by appropriate utilities to carry on the Business at
the Real Estate, (iii) there is adequate pedestrian and vehicular access in
all material respects to all the Real Estate, and (iv) other than the Real
Estate, no other real estate or rights, titles, estates or interest therein
is necessary to the conduct of the Business in the United States as
currently conducted and consistent with past practice.
Section 4.18. Title to and Use of Property.
(a) Sellers have good, valid and marketable (or with respect to
personal property, merchantable) title to, or valid and subsisting
leasehold interests in, all of the Acquired Assets; none of the Acquired
Assets is owned jointly with, or leased to, any other Person, including
Affiliates of Sellers; and except as disclosed in Section 4.18 of the
Disclosure Schedule, none of the Acquired Assets is subject to any
Encumbrance, all of which scheduled Encumbrances, other than the Permitted
Encumbrances (and except as specifically noted in Section 4.18 of the
Disclosure Schedule) shall be removed on or prior to the Closing.
(b) Except as disclosed in Section 4.18 of the Disclosure
Schedule, the buildings, machinery, equipment, tools, office furniture and
fixtures, improvements and other tangible assets of the Business included
in the Acquired Assets are in good operating condition and repair, subject
to reasonable wear and tear.
Section 4.19. Brokers. Except for Dresdner Kleinwort Xxxxxxxxxxx,
Inc., the fees related to which shall be borne by Sellers, no person is
entitled to any brokerage, financial advisory, finder's, or similar fee or
commission payable by any Polaroid Entity or any of their Affiliates in
connection with the Contemplated Transactions based upon arrangements made
by or on behalf of any Polaroid Entity or any of their Affiliates.
Section 4.20. Intellectual Property.
(a) The Polaroid Entities, collectively, own, or are licensed or,
to Sellers' Knowledge, otherwise possess legally enforceable rights to use
the Intellectual Property used in or held for use in the Business (the
"Polaroid Intellectual Property"). The Polaroid Intellectual Property
includes all rights reasonably necessary for operation of the Business.
(b) Except for such omissions as would be individually or
collectively immaterial to the Business, Section 4.20 of the Disclosure
Schedule sets forth a complete and accurate list of all Patents, registered
Marks, registered Copyrights, and Domain Names included in the Polaroid
Intellectual Property, specifying as to each such item, as applicable: (A)
the owner of the item, (B) the jurisdictions in which the item is issued or
registered or in which any application for issuance or registration has
been filed, (C) the respective issuance, registration, or application
number of the item, and (D) the date of application and issuance or
registration of the item.
(c) Except for such omissions as would be individually or
collectively immaterial to the Business, Section 4.20 of the Disclosure
Schedule also contains a complete and accurate list of all material
licenses, sublicenses, consents and other agreements (whether written or
otherwise) by which the Polaroid Entities license or otherwise authorize a
Third Party, or are licensed or otherwise authorized by a Third Party, to
use any Intellectual Property. Other than with respect to monetary defaults
by the Sellers under Contracts that are curable by payment of all cure
amounts payable to effectuate, pursuant to the Bankruptcy Code, the
assumption by and assignment to the Purchaser of such Contracts under the
Approval Order, if applicable, none of the Polaroid Entities or, to
Sellers' Knowledge, any other party is in breach of or default under in any
material respect any material license or other agreement and each such
license or other agreement is now and immediately following the Closing
shall be valid and in full force and effect.
(d) Except as would not have a Material Adverse Effect:
(i) no Polaroid Entity will, as a result of the execution
and delivery of this Agreement or the consummation of the
Contemplated Transactions be in breach of or suffer any loss of
rights under any material license, sublicense or other agreement
relating to the Polaroid Intellectual Property;
(ii) (A) each Patent, registered Xxxx, and registered
Copyright owned by a Polaroid Entity which is used in the Business
is subsisting and, to the Sellers' Knowledge, valid and
enforceable; (B) no Polaroid Entity, as of the date hereof, is a
party to any currently pending litigation which involves a claim
of infringement of any Patent, Xxxx, or Copyright or violation of
any Trade Secret or other proprietary right of any Third Party, or
has received written notice of any such threatened claim; and (C)
to the Sellers' Knowledge, the manufacturing, marketing,
licensing, or sale of any products of the Business, in the manner
currently manufactured, marketed, sold, or licensed by the
Polaroid Entities, does not and will not as of the Closing
infringe or misappropriate any Patent, Xxxx, Copyright, Trade
Secret or other proprietary right of any Third Party;
(iii) at the Closing, Sellers will transfer and assign to
the Purchaser all of the Sellers' right, title and interest in and
to the Polaroid Entities' rights in the Polaroid Intellectual
Property free and clear of any Encumbrances;
(iv) all Domain Names are currently registered in the
name of a Polaroid Entity with an appropriate registration
authority; no such Domain Name is currently involved in any
opposition, invalidation or cancellation proceeding and, to the
Sellers' Knowledge, no such action is threatened with respect to
any Domain Name;
(v) to Sellers' Knowledge, none of the Trade Secrets of
the Polaroid Entities has been disclosed to any person unless such
disclosure was necessary, and was made pursuant to an enforceable
confidentiality agreement; and
(vi) the information technology systems owned, licensed,
leased, operated on behalf of, or otherwise used or held for use
by the Polaroid Entities, including computer hardware, software,
firmware and telecommunications systems, perform reliably and in
material conformance with the appropriate specifications or
documentation for such systems. Except for scheduled or routine
maintenance, such information technology systems are reliably
available for use by the Polaroid Entities and, as applicable, by
their customers and clients, 24 hours per day, 7 days per week.
The Polaroid Entities have taken commercially reasonable steps to
provide for the archival, back-up, recovery and restoration of
critical business data, including the provision of hot fail-over
server capacity in the event of a systems failure or disaster. To
Sellers' Knowledge, the computer software owned by the Polaroid
Entities, and all of the licensed software used in their
respective businesses, perform in material conformance with the
applicable documentation for such software, and do not contain any
viruses, trapdoors, worms, or other disabling or malicious code.
Section 4.21. Labor Matters. Except as disclosed in Section 4.21
of the Disclosure Schedule, no Polaroid Entity has entered into any
severance or similar arrangement in respect of any present Employee of any
Polaroid Entity that will result in any obligation of the Purchaser or any
Acquired Subsidiary to make any payment to any present Employee of any
Polaroid Entity following termination of employment or upon a change of
control of any Polaroid Entity or upon consummation of the transactions
contemplated under this Agreement. Since December 31, 2000, no Polaroid
Entity has engaged in any unfair labor practice and, to Sellers' Knowledge,
there are no complaints against any Polaroid Entity pending before the
National Labor Relations Board or any similar state, local or foreign labor
agency by or on behalf of any Employee of any Polaroid Entity. Except as
set forth in Section 4.21 of the Disclosure Schedule, no Seller is a party
to, or a participant in any negotiation of, any collective bargaining
agreement or other labor agreement with respect to its Employees with any
labor organization, union, group or association, and there are no employee
unions (nor any other similar labor or employee organizations) under any
Laws. There are no labor strikes, slow downs or stoppages pending or, to
the Sellers' Knowledge, threatened with respect to the Employees of any
Polaroid Entity, and since December 31, 2000, no Polaroid Entity has
experienced any attempt by organized labor to cause any Polaroid Entity to
comply with or conform to demands of organized labor relating to its
Employees or to enter into a binding agreement with organized labor that
would cover any or all of its Employees. Except as would not have a
Material Adverse Effect, (a) each Polaroid Entity has complied with all
Laws relating to employment, equal employment opportunity,
nondiscrimination, immigration, wages, hours, benefits, collective
bargaining, the payment of social security and similar taxes, occupational
safety and health and plant closings (hereinafter collectively referred to
as the "Employment Laws") and (b) no Polaroid Entity is liable for the
payment of fines, penalties or other amounts, however designated, for
failure to comply with any of the forgoing Employment Laws. Section 4.21 of
the Disclosure Schedule sets forth the number of employees employed by any
of the Sellers (along with such employee's "location/site of employment"
within the meaning of the Worker Adjustment and Retraining Notification Act
("WARN Act"), 29 U.S.C. Section 2101, et seq.) who have experienced an
"employment loss" (as defined by the WARN Act) while employed by any of the
Sellers during the ninety (90)-day period immediately preceding the date
hereof. Not more than five (5) days prior to the Closing Date, Sellers
shall deliver to the Purchaser a list of all employees employed by any of
the Sellers (along with such employees' "location/site of employment"
within the meaning of the WARN Act) who have experienced an "employment
loss" (as defined by the WARN Act) from the date hereof until such date of
delivery.
Section 4.22. Tax Matters. Except as provided in Section 4.22 of
the Disclosure Schedule: (a) All Tax Returns which were required to be
filed by or with respect to any of the Sellers or the Foreign Subsidiaries
have been duly and timely filed and each such Tax Return was true, correct
and complete in all material respects when filed; (b) all Taxes owed by any
of the Sellers or the Foreign Subsidiaries have been timely paid; (c) all
Tax withholding and deposit requirements imposed on or with respect to any
of the Sellers or the Foreign Subsidiaries have been satisfied in all
material respects; (d) to the Sellers' Knowledge, there are no material
mortgages, pledges, liens, encumbrances, charges or other security
interests on any of the assets of any of the Foreign Subsidiaries or on any
of the Acquired Assets that arose in connection with any failure (or
alleged failure) to pay any Tax; (e) there is no written claim against any
of the Sellers or the Foreign Subsidiaries for any Taxes, and no
assessment, deficiency or adjustment has been asserted or proposed in
writing or, to the Sellers' Knowledge, may be proposed with respect to any
Tax Return of or with respect to any of the Sellers or the Foreign
Subsidiaries; (f) no payments are due or will become due by any of the
Foreign Subsidiaries pursuant to any tax sharing agreement or arrangement
or any tax indemnification agreement; (g) none of the Acquired Assets to be
sold by a Seller that is not a United States person (within the meaning of
section 7701(a)(30) of the Code) is a United States real property interest
(within the meaning of section 897(c) of the Code); (h) none of the
Acquired Subsidiaries is engaged in a United States trade or business
(within the meaning of section 864 of the Code) or owns any assets within
the United States; (i) no Foreign Subsidiary has had the amount of Subpart
F income reduced for any taxable year under section 952(c)(1)(A) of the
Code, except to the extent that such reduction subsequently was taken into
account by such Foreign Subsidiary under section 952(c)(2) of the Code; (j)
liability for Taxes reflected on the books of the Foreign Subsidiaries are
at least equal to the accrued but unpaid Taxes of the Foreign Subsidiaries
and on the Closing Date will at least equal the accrued but unpaid Taxes of
such Foreign Subsidiaries through the Closing Date; (k) none of the
Acquired Assets or Foreign Subsidiaries is treated as an interest in a
partnership for Tax purposes; (l) no election has been made under section
7701 of the Code with respect to any of the Foreign Subsidiaries; (m) no
Foreign Subsidiary has had its income adjusted by any taxing authority, or
agreed to any adjustment, pursuant to section 482 of the Code, or any
comparable provision of state, local, or foreign law, which adjustment has
continuing effect; and (n) no Taxing authority with respect to which the
Sellers or the Foreign Subsidiaries do not file Tax Returns has claimed
that the Sellers or the Foreign Subsidiaries are or may be subject to Taxes
by that Taxing authority.
Section 4.23. Products Liability. Except as disclosed on Section
4.23 of the Disclosure Schedule, there are no:
(a) material liabilities of the Polaroid Entities, fixed or
contingent, asserted or, to the Sellers' Knowledge, unasserted, with
respect to any product liability or any similar claim that relates to any
product manufactured by the Business on or prior to the Closing Date; or
(b) material liabilities of the Polaroid Entities, fixed or
contingent, asserted or, to the Sellers' Knowledge, unasserted, with
respect to any claim for the breach of any express or implied product
warranty or any other similar claim with respect to any product
manufactured by the Business on or prior to the Closing Date, other than
standard warranty obligations (to replace, repair or refund) in the
Ordinary Course of Business.
Section 4.24. Debt Repayment. As of April 11, 2002, the Sellers
and/or the Foreign Subsidiaries have paid in full all of the amounts
outstanding under that certain Euros 72,500,000 Multi-Currency Revolving
Loan Facility, dated August 3, 1999, among Polaroid (U.K.) Limited, as
borrower, Polaroid, as guarantor, the lenders from time to time party
thereto, and the agents named therein, as amended (the "UK Loan
Agreement"). The total amount paid under the UK Loan Agreement, including
interest, professional fees and expenses related thereto, was $44,408,046.
The Sellers and the Foreign Subsidiaries have no further liabilities or
obligations under the UK Loan Agreement.
Section 4.25. Investment. Each Seller (a) understands that the
shares of the Sellers' Stock have not been, and, except as set forth in the
Registration Rights Agreement, will not be, registered under the Securities
Act of 1933, as amended (the "Securities Act"), or under any state
securities laws, and are being offered and sold in reliance upon federal
and state exemptions for transactions not involving any public offering,
(b) is acquiring the shares of the Sellers' Stock solely for its own
account for investment purposes, and not with a view to the distribution
thereof, (c) is a sophisticated investor with knowledge and experience in
business and financial matters, (d) has received certain information
concerning the Purchaser and has had the opportunity to obtain additional
information as desired in order to evaluate the merits and the risks
inherent in holding the shares of the Sellers' Stock, (e) is able to bear
the economic risk and lack of liquidity inherent in holding the shares of
the Sellers' Stock, and (f) is an "accredited investor" within the meaning
of Rule 501(a) of Regulation D under the Securities Act, and has such
knowledge and experience in financial and business matters that make it
capable of evaluating the merits and risks of its purchase of the shares of
the Sellers' Stock. Section 4.26. Representations and Warranties. The
Sellers represent and warrant that all of the representations and
warranties of the Sellers contained in this Agreement are true and correct
in all respects as of July 3, 2002 and agree that for purposes of this
Section 4.26 only, all references in the representations and warranties of
the Sellers contained in this Agreement to "date hereof" and "date of this
Agreement" each means, and "current" and "currently" each relates to, July
3, 2002.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Sellers as follows:
Section 5.01. Organization. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware.
Section 5.02. Authority Relative to This Agreement. The Purchaser
has the corporate power and authority to enter into and deliver this
Agreement and to carry out its obligations hereunder. The execution,
delivery, and performance of this Agreement by the Purchaser and the
consummation by the Purchaser of the Contemplated Transactions have been
duly authorized by all requisite corporate actions. This Agreement has been
duly and validly executed and delivered by the Purchaser and (assuming this
Agreement constitutes a legal, valid and binding obligation of the Sellers)
constitutes a legal, valid and binding agreement of the Purchaser,
enforceable against the Purchaser in accordance with its terms, subject to
applicable bankruptcy, reorganization, insolvency, moratorium, and other
laws affecting creditors' rights generally from time to time in effect and
to general equitable principles.
Section 5.03. No Violations. Neither the execution, delivery, or
performance of this Agreement by the Purchaser, nor the consummation by the
Purchaser of the Contemplated Transactions, nor compliance by the Purchaser
with any of the provisions hereof, will (a) except for the Governmental
Requirements, require the Purchaser to obtain any consent, approval or
action of, or make any filing with or give notice to, any domestic or
foreign governmental or regulatory body or any other Person, (b) conflict
with or result in any breach of any provisions of the certificate of
incorporation or bylaws of the Purchaser, (c) result in a violation or
breach of, or constitute (with or without due notice or lapse of time) a
default (or give rise to any right of termination, cancellation,
acceleration, vesting, payment, exercise, suspension, or revocation) under
any of the terms, conditions, or provisions of any note, bond, mortgage,
deed of trust, security interest, indenture, license, contract, agreement,
plan, or other instrument or obligation to which the Purchaser is a party
or by which the Purchaser or the Purchaser's properties or assets may be
bound or affected, (d) violate any order, writ, injunction, decree,
statute, rule, or regulation applicable to the Purchaser or the Purchaser's
properties or assets, or (e) result in the creation or imposition of any
Encumbrance on any asset of the Purchaser.
Section 5.04. Consents and Approvals. Except for Governmental
Requirements, no consent, approval, or authorization of, or declaration,
filing, or registration with, any domestic or foreign government or
regulatory authority is required to be made or obtained by the Purchaser in
connection with the execution, delivery, and performance of this Agreement
and the consummation of the Contemplated Transactions.
Section 5.05. Litigation. Except for the pendency of the Case,
there is no suit, action, proceeding, or investigation (whether at law or
equity, before or by any federal, state, or foreign commission, court,
tribunal, board, agency, or instrumentality, or before any arbitrator)
pending or, to the knowledge of the Purchaser, threatened against or
affecting the Purchaser which could reasonably be expected to result in the
issuance of a judgment, decree, injunction, rule, or order of any court,
governmental department, commission, agency, instrumentality, or arbitrator
outstanding restraining, enjoining or otherwise prohibiting the Purchaser
from consummating the transactions contemplated by this Agreement.
Section 5.06. Financing. The Purchaser has delivered to Polaroid a
true and correct copy of a commitment letter (the "Equity Commitment
Letter") from One Equity Partners LLC ("OEP") for equity financing in
connection with the transactions contemplated hereunder. The Commitment
Letter has been duly executed and delivered by OEP and is in full force and
effect. As of the Closing, when the Purchaser receives the financing
contemplated by the Equity Commitment Letter and by Section 9.01(d)(v), the
Purchaser shall have sufficient funds to pay the Cash Consideration and to
consummate the transactions contemplated under this Agreement.
Section 5.07. Brokers. Except for One Equity Partners LLC, the
fees related to which shall be borne by the Purchaser, no person is
entitled to any brokerage, financial advisory, finder's, or similar fee or
commission payable by the Purchaser or any of its Affiliates in connection
with the Contemplated Transactions based upon arrangements made by or on
behalf of the Purchaser or any of its Affiliates.
ARTICLE VI
COVENANTS
Section 6.01. Conduct of Business by the Polaroid Entities Pending
the Closing. Polaroid covenants and agrees that after the date hereof and
prior to the Closing Date, except (i) as contemplated by this Agreement,
(ii) as disclosed in the Disclosure Schedule, or (iii) as required by,
arising out of, relating to or resulting from the Petitions or otherwise
approved by the Bankruptcy Court with the Purchaser's Consent:
(a) it shall, and shall cause each of the Polaroid Entities to,
use its commercially reasonable efforts to operate in the Ordinary Course
of Business, and conduct, carry on and maintain and preserve the Business
intact; use commercially reasonable efforts to maintain and preserve its
relationships with and the goodwill of suppliers, customers and others
having business relations with the Business; maintain the Acquired Assets,
as well as books of account, records and files related to the conduct of
the Business and the Employees, all in the Ordinary Course of Business; and
use its commercially reasonable efforts to keep available to Purchaser the
Employees;
(b) it shall promptly inform Purchaser in writing of any specific
event or circumstance of which it is aware, or of which it receives notice,
that has or is reasonably likely to have a Material Adverse Effect, on the
Acquired Assets or the current or future earnings of the Business or which
constitute a breach of any representations or warranties set forth in
Article IV hereof;
(c) no Acquired Subsidiary or Subsidiary thereof shall adopt or
propose any change in its certificate of incorporation or bylaws (or
similar organizational documents);
(d) no Acquired Subsidiary or Subsidiary thereof shall declare,
set aside, or pay any dividend or other distribution with respect to any of
its Equity Interests other than in Cash and Cash Equivalents, or split,
combine, or reclassify any of its Equity Interests, or repurchase, redeem,
or otherwise acquire any shares of its Equity Interests;
(e) no Acquired Subsidiary or Subsidiary thereof shall merge or
consolidate with any other Person;
(f) no Polaroid Entity shall lease, license, or otherwise
surrender, relinquish, encumber, or dispose of any material assets other
than in the Ordinary Course of Business;
(g) no Acquired Subsidiary or Subsidiary thereof shall change any
material method of accounting or material accounting practice used by it,
except for any change required by GAAP or Applicable Law;
(h) other than in the Ordinary Course of Business, no Polaroid
Entity shall establish, modify to increase cost or increase the
compensation or benefits under, or promise to establish, modify to increase
cost or increase the compensation or benefits under any Welfare Plans or
Pension Plans or Foreign Plans, or otherwise increase the compensation
payable to any directors, officers, or Employees of any Polaroid Entity,
and no Polaroid Entity will establish, adopt or enter into any collective
bargaining or similar agreement;
(i) Sellers shall not, without the prior written consent of
Purchaser, take or omit to take any action which if taken or omitted prior
to the date hereof would constitute a breach of any representations or
warranties set forth in this Agreement, or which would result in any of the
occurrences or events set forth in Section 4.11 hereof; and
(j) no entity so bound shall agree or commit to do any of the
foregoing.
Section 6.02. Access and Information. Each of the Polaroid
Entities shall afford to the Purchaser and to the Purchaser's
Representatives and financing sources reasonable access without material
disruption to the Business throughout the period prior to the Closing Date
to all its books, documents, records, properties and facilities that relate
to the Business and, during such period, shall furnish as promptly as
practicable to the Purchaser (a) a copy of each report, schedule, and other
document filed or received by them pursuant to the requirements of federal
or state securities laws and (b) all other information as the Purchaser
reasonably may request in furtherance of the Contemplated Transactions.
Each of the Polaroid Entities shall permit the Purchaser and the
Purchaser's Representatives and financing sources to discuss the affairs,
finances and business of the Sellers and the Foreign Subsidiaries with the
officers and employees of Sellers or any Affiliate of Sellers listed in
Section 6.02 of the Disclosure Schedule and, with the prior consent of the
General Counsel or the Deputy General Counsel of Polaroid, any other
officers, employees or directors of Sellers or any Affiliate of Sellers,
and to discuss the financial condition of Sellers and the Foreign
Subsidiaries with Sellers' Auditors. No investigation or receipt of
information by Purchaser pursuant to, or in connection with, this
Agreement, shall diminish or obviate any of the representations,
warranties, covenants or agreements of Sellers under this Agreement or the
conditions to the obligations of Purchaser under this Agreement. Any and
all information obtained by the Purchaser or the Purchaser's
Representatives and financing sources pursuant to this Section 6.02 shall
be subject to and maintained in compliance with the Confidentiality
Agreement.
Section 6.03. Filings; Other Actions. Subject to the terms and
conditions herein provided, as promptly as practicable, the Sellers and the
Purchaser shall (a) promptly make all filings and submissions under the HSR
Act, (b) use all reasonable efforts to cooperate with each other in (i)
determining which filings are required to be made prior to the Closing Date
with, and which material consents, approvals, permits, or authorizations
are required to be obtained prior to the Closing Date from, governmental or
regulatory authorities of the United States and foreign jurisdictions in
connection with the execution and delivery of this Agreement and the
consummation of the Contemplated Transactions; provided, however, that the
Purchaser and the Sellers agree that neither of them will make any
voluntary filing under applicable foreign antitrust laws or regulations
unless advised by legal counsel in such jurisdiction that the failure to
make a filing could result in a Material Adverse Effect or otherwise be in
violation of Applicable Law, and (ii) timely making all such filings and
timely seeking all such material consents, approvals, permits, or
authorizations, and (c) use all reasonable efforts to take, or cause to be
taken, all other action and do, or cause to be done, all other things
reasonably necessary or appropriate to consummate the Contemplated
Transactions, as soon as practicable. In connection with the foregoing, the
Sellers will promptly provide the Purchaser, and the Purchaser will
promptly provide the Sellers, with copies of all correspondence, filings,
or communications (or memoranda setting forth the substance thereof)
between such party or any of its representatives, on the one hand, and any
governmental agency or authority or members of their respective staffs, on
the other hand, with respect to all filings and submissions required
hereunder.
Section 6.04. Public Announcements. The Purchaser and the Sellers
agree that they will not make any public announcement, issue any press
release or respond in writing to any press inquiry with respect to this
Agreement or the Contemplated Transactions without the prior approval of
the Purchaser and Polaroid (which approval will not be unreasonably
withheld), except as may be required by Applicable Law, the Bankruptcy
Court or any requirement of any stock exchange or inter-dealer quotation
system on which the stock of either party is listed or quoted. Following
the execution of this Agreement, the Purchaser and Polaroid shall issue a
joint press release or separate press releases announcing the Contemplated
Transactions, which press release or releases shall be approved by the
Purchaser and Polaroid prior to release. From and after the Closing,
Sellers will keep confidential and cause their Affiliates to keep
confidential all information relating to the Business and the Acquired
Assets, except as specifically and only to the extent required by
applicable law or administrative or legal process; it being understood
that: (a) Sellers will notify Purchaser in writing at least five days (to
the extent possible) prior to any proposed disclosure of such nonpublic
information in order to enable Purchaser to seek an appropriate protective
order; and (b) Sellers shall not be required to keep confidential and may
disclose any information which (i) is or becomes publicly available other
than as a result of a disclosure by Sellers in breach of this Agreement,
(ii) was known to the party receiving such information prior to the receipt
thereof other than as a result of a disclosure by Sellers in breach of this
Agreement, or (iii) was previously independently developed by the party
receiving such information without the assistance of Sellers.
Section 6.05. Acquired Assets. Amounts received by Sellers on or
after the Closing Date in respect of any Acquired Assets shall be paid over
to Purchaser promptly upon receipt by Sellers. Any such amounts received by
Seller by wire transfer shall be paid over to Purchaser promptly by wire
transfer of immediately available funds to the account of the Purchaser
designated on Exhibit T or to any other account designated by the Purchaser
in writing and delivered to Polaroid in accordance with Section 10.02.
Sellers shall promptly send Purchaser copies of all remittance advices and
checks related to payments received by Sellers with respect to such items.
Purchaser shall notify the Business' customers of the change in address of
the owner of the Acquired Assets as may be required in order for such
customers to properly remit any payments required under any applicable
Acquired Asset and Sellers shall cooperate with Purchaser as is reasonably
necessary to so notify such customers.
Section 6.06. Bankruptcy Actions.
(a) Within three days after the execution of this Agreement,
Polaroid shall, and shall cause the other Sellers to, file a motion or
motions (and related notices and proposed orders) with the Bankruptcy Court
seeking approval of the Sale Procedures Order and the Approval Order.
(b) If the Approval Order, or any other orders of the Bankruptcy
Court relating to this Agreement shall be appealed by any Person (or a
petition for certiorari or motion for rehearing or reargument shall be
filed with respect thereto), the Sellers agree to use commercially
reasonable efforts to defend against such appeal, petition or motion, and
the Purchaser agrees to cooperate in such efforts.
(c) The Sellers shall give to the Purchaser written notice and a
copy of all motions, applications and pleadings filed in the Case with the
Bankruptcy Court from and after the date hereof, at the time of such
filing, and in any event, so that such notice is actually received by the
Purchaser no later than three (3) Business Days in advance of any hearing
or presentment date with respect to such motion, application or other
pleading.
Section 6.07. Tax Matters.
(a) The parties agree, upon request, to use their reasonable
efforts to obtain any certificate or other document from any Governmental
Authority or any other Person as may be necessary to mitigate, reduce or
eliminate any transfer, documentary, sales, use, excise, ad valorem,
registration, recordation, value-added, withholding, income and other
similar Taxes, whether such Taxes would be imposed by law upon the
Purchaser or the Sellers (such Taxes referred to herein as the "Transfer
Taxes") to the extent permitted by the Bankruptcy Code, and to the extent
that such certificate or other document would not increase the Taxes of the
Purchaser. In addition, the Sellers agree to obtain such tax clearance or
similar certificates from any Governmental Authority as the Purchaser may
reasonably require (other than any such certificates with respect to income
or franchise taxes), and the Purchaser shall provide such assistance as the
Sellers may reasonably request in obtaining such certificates.
(b) The Purchaser may make elections under Code Sections 338(g)
and 754 and Treasury Regulation Section 301.7701-3 (the "Elections"), as
appropriate, in respect of its purchase of the Acquired Subsidiaries or
other entities included in the Business under this Agreement. Polaroid and
the other Sellers shall assist the Purchaser in the preparation and filing
of the Elections and shall take all such action as is required in order to
give effect to such Elections for state, local and foreign Tax purposes to
the greatest extent permitted by law.
(c) Any agreement between Polaroid or the other Sellers, on the
one hand, and any of the Acquired Subsidiaries, on the other hand,
regarding allocation or payment of Taxes or amounts in lieu of Taxes shall
be deemed terminated as of the Closing.
(d) The Sellers and the Foreign Subsidiaries shall notify the
Purchaser of any proposed United States federal, state, or local Tax
Election and any material foreign Tax Election not later than thirty days
prior to making such election. Neither the Sellers nor the Foreign
Subsidiaries shall make any Tax Election that could have a Material Adverse
Effect without the prior written consent of the Purchaser, which shall not
be unreasonably withheld. The Purchaser shall respond promptly to any
request for consent to any Tax Election pursuant to this Section 6.07(d).
The Purchaser shall be deemed to consent to any such election if it has not
responded to any such request within ten days of receiving such request.
However, the Sellers and the Foreign Subsidiaries may elect to carry back
any Tax losses from Tax periods before the Closing Date to prior Tax
periods if such election does not bind the Purchaser or the Foreign
Subsidiaries for any Tax period or any portion thereof after the Closing
Date.
(e) Not later than 45 days prior to the Closing, the Sellers shall
provide to the Purchaser a list of all Tax records of the Sellers (to the
extent that they relate to the Acquired Assets or the Foreign Subsidiaries)
and each of the Foreign Subsidiaries in the form set forth as Exhibit Q,
including without limitation the prior five Tax Returns of the Sellers (to
the extent that they relate to the Acquired Assets or the Foreign
Subsidiaries) and each of the Foreign Subsidiaries. The Sellers and the
Foreign Subsidiaries shall grant the Purchaser access to all such records
prior to the Closing and shall ensure that the Purchaser may take
possession of all such records at or after the Closing if the Purchaser so
elects. The Sellers and the Foreign Subsidiaries shall provide such access
to their computer systems containing Tax information as may reasonably be
requested by the Purchaser. The Purchaser agrees to bear any reasonable
costs incurred by the Sellers in duplicating and mailing any records that
the Purchaser has requested that the Sellers duplicate and mail to the
Purchaser prior to the Closing.
(f) The Sellers agree to pay all Transfer Taxes. Notwithstanding
the foregoing, the Approval Order shall contain a provision that the sale,
transfer, assignment and conveyance of the Acquired Assets to the Purchaser
hereunder shall be entitled to the protections afforded under Section
1146(c) of the Bankruptcy Code.
(g) The Purchaser and the Sellers agree to furnish or cause to be
furnished to the other, upon request, as promptly as practicable, such
information and assistance relating to the Acquired Assets, including,
without limitation, access to Books and Records, as is reasonably necessary
for the filing of all Tax Returns by the Purchaser or the Sellers, the
making of any election relating to Taxes, the preparation for any audit by
any taxing authority, and the prosecution or defense of any Claim, suit or
proceeding relating to any Tax. Each of the Purchaser and the Sellers shall
retain all Books and Records with respect to Taxes pertaining to the
Acquired Assets until the later of six years following the Closing Date and
the expiration of the statute of limitations period (and, to the extent
notified by the Purchaser or the Sellers, any extensions thereof) of the
respective taxable periods, and to abide by all record retention agreements
entered into with any taxing authority. At the end of such period, each
party shall provide the other with at least ten days prior written notice
before transferring, destroying or discarding any such Books and Records,
during which period the party receiving such notice can elect to take
possession, at its own expense, of such Books and Records. The Purchaser
and the Sellers shall cooperate fully with each other in the conduct of any
audit, litigation or other proceeding relating to Taxes involving the
Acquired Assets, provided that the Sellers or the Purchaser, as
appropriate, shall reimburse the Purchaser or the Sellers for reasonable
costs associated with such cooperation. The Purchaser and the Sellers
further agree, upon request, to use their best efforts to obtain any
certificate or other document from any Governmental Authority or any other
Person as may be necessary to mitigate, reduce or eliminate any Tax that
could be imposed (including, but not limited to, with respect to the
transactions contemplated hereby), to the extent that such certificate or
other document would not increase the Taxes of the Purchaser.
(h) Preparation of Tax Returns.
(i) Unless prohibited by applicable law, Purchaser and
Sellers shall close all Tax periods of the Foreign Subsidiaries on
the Closing Date, and shall cooperate to complete any necessary
elections or filings to close all Tax periods on the Closing Date.
Purchaser shall cause to be prepared and filed all income or
franchise Tax Returns required to be filed with respect to the
Foreign Subsidiaries for taxable periods ending prior to or on the
Closing Date and including amended returns, applications for loss
carryback refunds and applications for estimated tax refunds (all
such income and franchise Tax Returns, amended returns and refund
applications are referred to as the "Prior Period Returns").
Sellers shall make available to Purchaser (and to Purchaser's
accountants and attorneys) any and all books and records and other
documents and information in its possession or control relating to
the Foreign Subsidiaries requested by Purchaser to prepare the
Prior Period Returns. If any Prior Period Returns reflect an
obligation to pay Taxes that were not accrued on the books of
account of the Foreign Subsidiaries through the Closing Date, then
the Purchasers shall provide to the Sellers such Prior Period
Returns within 15 days prior to the due date for such returns,
including extensions, and the Sellers shall pay to the Purchaser,
not later than 5 days prior to the due date for such returns, an
amount equal to the excess of such Taxes over such accruals.
(ii) A "Straddle Period" is any Tax period that includes
(but does not end on) the Closing Date. Purchasers shall cause to
be prepared and filed all income or franchise Tax Returns required
to be filed with respect to the Foreign Subsidiaries for any
Straddle Period (each a "Straddle Period Return"). Income or
franchise Taxes attributable to any Straddle Period shall be
determined as if the Tax period ended on the Closing Date based on
a closing of the books on such date. The Sellers shall be
responsible for income or franchise Taxes for that portion of any
Straddle Period ending on the Closing Date. If the portion of the
Tax shown on any such Tax Return that is the responsibility of the
Sellers ("Sellers' Portion") exceeds the accruals for such Taxes
on the applicable Foreign Subsidiary's books of account, then the
Purchasers shall provide a copy of such Tax Return, together with
a computation of the Sellers' Portion, within 15 days prior to the
due date for such returns, including extensions. Sellers shall pay
the excess of the Sellers' Portion over such accruals to the
Purchaser no later than 5 days prior to the due date of any
Straddle Period Tax Return.
(iii) Purchaser shall file any and all other Tax Returns
for any Acquired Subsidiary that are not Prior Period Returns or
Straddle Period Tax Returns and which are to be filed after the
Closing Date.
(i) Not later than July 8, 2002, the Sellers shall provide to the
Purchaser a list of all outstanding intercompany indebtedness in effect as
of June 2, 2002 between the Foreign Subsidiaries and between any Sellers
and the Foreign Subsidiaries, identifying in each case the specific obligor
and obligee. With respect to any fiscal month of the Sellers ending after
June 2, 2002 and prior to the Closing, the Sellers shall provide a new list
of all such outstanding intercompany indebtedness in effect as of the end
of such fiscal month between the Foreign Subsidiaries and between any
Sellers and the Foreign Subsidiaries within 25 days following the end of
any such fiscal month, identifying in each case the specific obligor and
obligee. The Sellers agree that, immediately prior to the Closing, and
after giving effect to the transactions set forth in Section 6.19, the
Sellers will, at the Purchaser's request, (i) cause any outstanding
intercompany indebtedness owed by any Foreign Subsidiary to any Seller to
be contributed to such Foreign Subsidiary or Foreign Subsidiaries as may be
designated by the Purchaser prior to the Closing (including, but not
limited to, a new Foreign Subsidiary formed at Purchaser's request for this
purpose) and (ii) cause any outstanding intercompany indebtedness owed by
any Seller to any Foreign Subsidiary to be cancelled or assumed by such
Foreign Subsidiary or Foreign Subsidiaries as may be designated by the
Purchaser prior to the Closing (including, but not limited to, a new
Foreign Subsidiary formed at Purchaser's request for this purpose);
provided that, in each case the Purchaser shall bear all costs and capital
or similar foreign Taxes imposed as a result of such contributions,
cancellations or assumptions. Any such requests by the Purchaser shall be
made only with respect to such intercompany indebtedness as remains
outstanding after first taking into account the actions relating to such
indebtedness set forth in Section 6.19.
(j) The Sellers agree to cooperate with the Purchaser in making
any Tax elections and any restructuring of the Sellers' operations that the
Purchaser may reasonably request after the issuance of the Approval Order,
including without limitation any elections under Treasury Regulations
Section 301.7701-3.
Section 6.08. Certain Employee Benefit Matters.
(a) Not less than thirty-five (35) days prior to the Closing Date,
the Purchaser shall provide Sellers with a true, correct and complete list
(the "35 Day List") of (i) all Polaroid Employees to whom the Purchaser
intends to offer employment, commencing on the Closing Date, at the salary
levels and other terms of employment determined by the Purchaser in its
sole and absolute discretion, and (ii) all temporary employees, contract
employees and leased employees with whom Purchaser intends to continue a
service provider relationship, all of whom shall be considered U.S.
employees for purposes of this Section 6.08 and Section 6.09.
Notwithstanding anything contained in this Agreement to the contrary,
nothing in this Agreement hereunder shall confer upon any such Hired
Employees any right to continue in the employ of, or as a consultant for,
the Purchaser or any of its Affiliates, or shall interfere with or restrict
in any way the rights of the Purchaser or any of its Affiliates, which are
hereby expressly reserved, to discharge any such Hired Employees at any
time for any reason whatsoever, with or without cause, except to the extent
expressly provided otherwise in a written employment agreement between any
such Hired Employees and the Purchaser or any of its Affiliates.
(b) From and after the Closing Date, each Seller shall remain
responsible for any and all Liabilities (other than Assumed Liabilities)
with respect to the Hired Employees or their beneficiaries or dependents
that were or are incurred by such individuals on or prior to the Closing
Date under such Seller's applicable Welfare Plans for health, life,
accidental death and dismemberment, supplemental employment compensation,
dental, fringe benefits, expense reimbursement, accident, sickness and
disability benefits. For purposes of this Agreement, (i) a claim for health
benefits (including, without limitation, claims for medical, prescription
drug, dental, and vision care expenses) will be deemed to have been
incurred on the date on which the related medical service is rendered; (ii)
a claim for sickness or disability benefits will be deemed to have been
incurred on the date such sickness or disability occurs, and (iii) in the
case of any claim for benefits other than health benefits (e.g., life
insurance benefits), a claim will be deemed to have been incurred upon the
occurrence of the event giving rise to such claims. The Purchaser shall be
responsible for all claims that are incurred by the Hired Employees on or
after the Closing Date under the applicable benefit plans, policies or
arrangements providing health, life, accidental death and dismemberment,
supplemental employment compensation, dental, fringe benefits, expense
reimbursement, accident, sickness and disability benefits and which are
maintained by the Purchaser (collectively, the "Purchaser's Welfare Benefit
Plans"). During the period beginning on the date of this Agreement and
ending no fewer than 20 days before the Closing Date, the Sellers and the
Purchaser shall cooperate to determine the extent, if any, to which the
Purchaser will adopt any of Sellers' Welfare Benefit Plans as Purchaser's
Welfare Benefit Plans for the benefit of any Hired Employees and to
determine an appropriate mechanism for the satisfaction of any COBRA
obligations that are Assumed Liabilities under this Agreement.
(c) With respect to each employee benefit plan, program or
arrangement of the Purchaser or any affiliate of the Purchaser in which any
Hired Employee participates, for purposes of determining eligibility to
participate, vesting, and entitlement to benefits, but not including
benefit accruals under any defined benefit pension plan, service with the
Sellers shall be treated as service with the Purchaser or such affiliate.
Such service also shall apply for purposes of satisfying any waiting
periods, evidence of insurability requirements, or the application of any
preexisting condition limitations. Each such plan shall waive pre-existing
condition limitations to the same extent waived under the applicable plan
of the Sellers. Hired Employees shall be given credit under the applicable
plan of the Purchaser or any affiliate for amounts paid under a
corresponding benefit plan during the same period for purposes of applying
deductibles, co-payments and out-of-pocket maximums as though such amounts
had been paid in accordance with the terms and conditions of the successor
or replacement plan.
(d) Purchaser will, and will cause the Purchaser's 401(k) Profit
Sharing Plan and Trust (the "Purchaser's 401(k) Plan") to accept the
rollover, by direct or indirect rollover, as selected by each Hired
Employee, of that portion of the Hired Employees' accounts in the Sellers'
401(k) Plan ("Sellers' 401(k) Plan") that constitutes an "eligible rollover
distribution" as that term is defined by section 402(c)(4) of the Code,
provided that at the time a Hired Employee elects such a rollover that
Hired Employee is employed by the Purchaser. Any such rollover will be
effected in cash and, as applicable, any notes evidencing loans from the
Sellers' 401(k) Plan to the Hired Employee electing such rollover.
Purchaser and Sellers will, and will cause the trustees of their respective
401(k) plans to, cooperate with each other with respect to the rollover of
the eligible rollover distribution portions of the Hired Employees' account
balances in the Sellers' 401(k) Plan to the Purchaser's 401(k) Plan.
Purchaser's 401(k) Plan will be substantially comparable, in the aggregate,
to Sellers' 401(k) Plan, provided that (1) Purchaser is able to negotiate
administrative and investment contracts with third party record keepers and
investment managers comparable to those currently in effect under Sellers'
401(k) Plan and (2) Purchaser shall not be required to incur costs in
connection with the design or operation of a substantially comparable plan
that materially exceed those incurred by Sellers' in the maintenance and
operation of Sellers' 401(k) Plan. If Purchaser is unable to negotiate
administrative and investment contracts consistent with subparagraph (1)
above, within the constraints of subparagraph (2) above, Purchaser will
design a 401(k) plan for the Hired Employees that is as comparable as
possible to Sellers' 401(k) Plan within those constraints.
(e) Except as specifically provided herein and except for the
Assumed Liabilities, from and after the Closing Date, each Seller shall
remain responsible for any and all Liabilities accrued or payable under any
employment agreement between any Seller or any ERISA Affiliate and any
Employee or former Employee as well as under any Pension Plans, including
without limitation any supplemental retirement arrangements, bonus, stock
purchase, stock ownership, stock option, deferred compensation, incentive,
severance, termination or other compensation plan or arrangement, or other
material employee fringe benefit plans maintained by, or contributed to by
any Seller or any ERISA Affiliate for the benefit of any Employees or
former Employees (and the beneficiaries or dependents of any such Employees
or former Employees) of any Seller or any ERISA Affiliate.
(f) On and after the Closing Date, Purchaser shall provide
medical, dental, and life insurance benefits to Hired Employees
substantially comparable in the aggregate to the medical, dental, and life
insurance benefits provided by the Sellers immediately prior to the Closing
Date, provided that Purchaser shall not be required to incur costs in
connection with the design or operation of a substantially comparable plan
that materially exceed those incurred by Sellers in the maintenance and
operation of Sellers' medical, dental, and life insurance benefits.
(g) Sellers and each ERISA Affiliate will retain all liabilities
connected with or arising from the Polaroid Pension Plan or any other
defined benefit pension plan maintained by any of them. Neither Purchaser
nor any Affiliate of Purchaser shall have any liability with respect to any
such plan, including, without limitation, any obligation to provide any
similar pension plan after the Closing.
Section 6.09. WARN Act Notices. During the period between the date
of this Agreement and the Closing Date, Sellers will terminate the
employment of such number of those U.S. employees whose employment is
projected to be terminated as the basis for the schedules of 2002 Projected
Involuntary Terminations and 2002 Severance Cost Estimates provided by
Sellers to Purchaser. In addition, Sellers will terminate the employment of
those U.S. employees who are not listed on the 35 Day List. The Sellers
shall be solely responsible for providing any required notice under the
WARN Act arising from any of the Sellers' termination/layoff of any
Polaroid Employees pursuant to this Section 6.09, or any other employment
decision made by Sellers (whether such termination/layoff occurs on,
before, or after the Closing Date).
Section 6.10. Additional Matters. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use its
reasonable best efforts to take, or cause to be taken, all action and to
do, or cause to be done, all things necessary, proper, or advisable under
applicable laws and regulations to consummate and make effective the
Contemplated Transactions, including using all reasonable efforts to obtain
all necessary waivers, consents, and approvals in connection with the
Governmental Requirements and, at the instruction of the Purchaser, to
cause any local nominee holding shares of any Acquired Subsidiary to
transfer such shares to a Person designated by the Purchaser.
Section 6.11. Guarantees. The Purchaser agrees to provide
guarantees, effective as of the Closing, for any obligations of the Sellers
provided on behalf of the Acquired Subsidiaries in the agreements and
arrangements listed in Section 6.11 of the Disclosure Schedule (the "Seller
Guarantees"), as required by the Seller Guarantees in order to relieve the
Sellers of such obligations.
Section 6.12. No Solicitations. From and after the execution of
this Agreement and until the date the Bankruptcy Court enters the Sale
Procedures Order, the Sellers shall not cause, authorize or permit any of
their Representatives, Subsidiaries or Affiliates to, directly or
indirectly, (a) except with respect to the Committee, solicit, seek,
initiate, negotiate, assist, facilitate or encourage the submission of, or
accept or agree to, or otherwise cooperate in any way with any Acquisition
Proposal or (b) except in the Ordinary Course of Business, furnish any
non-public information to any Person, other than the Purchaser, its
Affiliates or their Representatives, any pre-Petition and post-Petition
secured lenders of the Business, or the Committee and their
Representatives, with respect to the Business or any of the Acquired
Assets. If Sellers or any of their Representatives, Subsidiaries or
Affiliates receive from any Person any Acquisition Proposal, offer, inquiry
or information request regarding the Business or any of the Acquired
Assets, Sellers will promptly advise such Person, by written notice (with a
copy to the Purchaser), of the terms of this Section and the Bidding
Procedures and will promptly (and, in any event, within 24 hours) advise
the Purchaser in writing of such Acquisition Proposal, offer, inquiry or
informational request, and deliver copies of any written materials received
by any Seller or their Representatives at any time in connection therewith,
and keep the Purchaser fully informed of the timing and contents of, and
provide the Purchaser with copies of, any further written or oral
communications related thereto.
Section 6.13. Assumed Contracts; Cure Amounts.
(a) As soon as practicable after the date hereof, the Sellers
shall, pursuant to a motion in form and substance acceptable to the
Purchaser (which motion may be incorporated into a motion seeking the
approval of all of the Contemplated Transactions), move to assume and
assign to the Purchaser the Assumed Contracts (as defined below) and shall
provide notice thereof in accordance with all applicable bankruptcy rules.
On or before May 10, 2002, the Sellers will deliver to the Purchaser a
true, correct, and complete list of the monetary amounts the Sellers
believe are necessary to cure, in accordance with Bankruptcy Code section
365, the monetary defaults with respect to each pre-Petition Contract of
the Sellers relating to the Business. Not later than May 17, 2002,
Purchaser will provide to the Sellers a preliminary list of each
pre-Petition Contract of the Sellers relating to the Business that the
Purchaser has selected to constitute the pre-Petition Contracts to be
assumed and assigned to Purchaser at the Closing in connection with the
Transactions (the "Preliminary Assumed Contracts List"). As soon as
practicable thereafter, and in any event, no later than May 20, 2002, the
Sellers shall provide notice to the non-Seller parties to the Contracts on
the Preliminary Assumed Contracts List (A) of the Sellers' intention to
assume, assign, and transfer such designated Contracts to the Purchaser,
(B) of the amount, if any, required to be paid to cure any monetary default
related to each such Contract, (C) of the Purchasers' right to amend or
modify the Preliminary Assumed Contracts List as provided in the Sale
Procedures Order and in this Agreement and (D) containing such other
matters as requested by the Purchaser. Specifically, Purchaser may (i) at
any time up to ten (10) days prior to the Auction, add additional
pre-Petition Contracts to the Preliminary Assumed Contracts List, in which
case such additional pre-Petition Contract(s) shall be assumed and assigned
to the Purchaser and shall be part of the Initial Assumed Contracts (as
defined below) and Acquired Assets and/or (ii) at any time up to one (1)
Business Day prior to the Auction, withdraw any pre-Petition Contract from
the Preliminary Assumed Contracts List, in which case such withdrawn
pre-Petition Contract(s) shall not be assumed and assigned to the Purchaser
and shall not be part of the Initial Assumed Contracts or the Acquired
Assets, such that no later than one (1) Business Day prior to the Auction,
Purchaser shall provide the Sellers with the final list of the pre-Petition
Contracts of the Sellers relating to the Business to be assumed and
transferred to Purchaser at the Closing pursuant to the Approval Order
(collectively, the "Initial Assumed Contracts").
(b) In addition, subsequent to the date that is ten (10) days
prior to the Auction but prior to the Closing, Purchaser may notify the
Sellers of its intention to assume any other or additional pre-Petition
Contract(s) of the Sellers relating to the Business that (i) has not
otherwise been rejected, assumed, or assigned by the Sellers or (ii) is not
the subject of a pending Bankruptcy Court motion of the Sellers to reject,
assume, or assign, as of the date of such notice (the "Additional Assumed
Contracts" and, together with the Post-Petition Contracts and the Initial
Assumed Contracts, the "Assumed Contracts"). As soon as practicable after
the date of receiving such notice from the Purchaser with respect to the
Additional Assumed Contracts, the Sellers shall, pursuant to a motion in
form and substance acceptable to the Purchaser, move to assume and assign
the Additional Assumed Contracts to the Purchaser, and shall provide notice
thereof in accordance with all applicable bankruptcy rules. The Purchaser
shall not be obligated to provide the Sellers with any additional
consideration in connection with any such assumption and assignment of the
Additional Assumed Contracts beyond the Consideration. None of the Sellers
shall reject any Contract of Sellers relating to the Business prior to the
Closing Date without the consent of Purchaser. In connection with any such
assumption and assignment of the Assumed Contracts, Purchaser shall be
responsible for any Cure Amounts.
Section 6.14. Title Insurance. Sellers shall use commercially
reasonable efforts to assist Purchaser in obtaining good and valid,
irrevocable ALTA title insurance commitments (collectively, the "Title
Commitments", and each a "Title Commitment"), in final form, from the title
insurance company selected by Purchaser (the "Title Company"). Seller shall
supply such information within its control or possession and shall provide
Title Company with such certificates, affidavits and other documentation as
reasonably necessary, to enable Title Company to irrevocably commit
(subject only to the satisfaction of any industry standard requirements
contained in the Title Commitment and reasonably acceptable to Purchaser)
to issuing ALTA form of title insurance policies insuring good, valid,
indefeasible fee simple title to the Owned Real Estate in Purchaser, in
such respective amounts that Purchaser requires prior to Closing, subject
to no Encumbrances or other exceptions to title other than Permitted
Encumbrances (collectively the "Title Policies"). On or prior to the
Closing Date, Sellers shall execute and deliver, or cause to be executed
and delivered, to the Title Company any affidavits, standard gap
indemnities and similar documents reasonably requested by the Title Company
in connection with the issuance of the Title Commitments or the Title
Policies. The Purchaser shall pay at Closing all premiums and other fees,
costs and expenses necessary for the issuance of the Title Policies.
Section 6.15. Surveys. Sellers shall make available to Purchaser
all surveys and other documents and information in its possession or
control relating to the Owned Real Estate.
Section 6.16. Zoning Compliance. Sellers shall, at the request of
Purchaser, reasonably cooperate with Purchaser and its agents and
contractors in obtaining certificates of occupancy for the Owned Real
Estate.
Section 6.17. Bulk Transfer Laws. Each Seller and the Purchaser
hereby waive compliance by the Sellers with the provisions of any Bulk
Sales Laws.
Section 6.18. Use of Name. From and after the Closing, Purchaser
shall own all of the corporate names, trade names and trademarks included
in the Polaroid Intellectual Property, including without limitation,
"Polaroid" and all other variations thereof which include the "Polaroid"
name, together with all related designs (collectively, the "Polaroid
Name"). Each Seller shall, and shall cause each of its Subsidiaries not
acquired by the Purchaser pursuant to this Agreement and, if not acquired
by the Purchaser, Polaroid Foundation, Inc. to, promptly following the
Closing Date, change its name to delete any reference to the Polaroid Name
and any other corporate name, trade name or trademark included in the
Polaroid Intellectual Property (and file with the appropriate Governmental
Authorities any certificates or instruments required to effect such name
change); provided, however, that Sellers may use the Polaroid Name in
connection with the disposition of the Case.
Section 6.19. Treatment of Intercompany Payables and Intercompany
Receivables.
(a) Each Seller agrees that, prior to the Closing, it will (i)
offset outstanding intercompany liabilities, including, but not limited to,
ordinary course payables and loans payable, which arose prior to the Filing
Date (the "Pre-Petition Intercompany Payables") owed by such Seller to each
Foreign Subsidiary against intercompany accounts receivable which arose
prior to the Filing Date (the "Pre-Petition Intercompany Receivables") owed
by each such Foreign Subsidiary to such Seller, (ii) offset outstanding
Post-Petition Intercompany Payables owed by such Seller to each Foreign
Subsidiary against intercompany accounts receivable which arose on or after
the Filing Date (the "Post-Petition Intercompany Receivables") owed by each
such Foreign Subsidiary to such Seller, (iii) after the offsets described
in clauses (i) and (ii) above, offset outstanding Post-Petition
Intercompany Payables owed by such Seller to each Foreign Subsidiary
against the Pre-Petition Intercompany Receivables owed by each such Foreign
Subsidiary to such Seller, and (iv) cooperate in any filings and
proceedings before the Bankruptcy Court as may be necessary to effect the
offsets described in clauses (i), (ii) and (iii) above.
(b) After accounting for the offset of accounts receivable and
accounts payable described in subsection (a) above, the Sellers may cause
those Foreign Subsidiaries that have accounts payable to the Sellers to pay
in cash all or a portion of such accounts payable to the Sellers (such
accounts to be paid down being the "Related Party Accounts Receivable");
provided, however, that (i) the Sellers shall not cause such Foreign
Subsidiaries to pay down the Related Party Accounts Receivable if such
payment would reduce the Cash and Cash Equivalents held by the Foreign
Subsidiaries to be less than the minimum amount specified in Section
8.03(f) hereof; (ii) any Related Party Accounts Receivable repaid will be
repaid at their face amount; (iii) the Sellers will inform the Purchaser in
writing of the proposed repayment of any Related Party Accounts Receivable
at least five Business Days prior to such repayment; and (iv) to the extent
requested by the Purchaser in writing, the Sellers will cause the Foreign
Subsidiaries not to pay down the Related Party Accounts Receivable
specified by, and in the amount requested by, the Purchaser in writing (the
"Designated Accounts Receivable"), but instead will cause such Foreign
Subsidiaries, as requested by the Purchaser in writing, to either (x) pay
the cash that would have been used to pay down the Designated Accounts
Receivable to the Sellers as dividends, capital reductions, capital
returns, or otherwise (such dividends, capital reductions, or capital
returns being the "Requested Dividends"), (y) loan the cash that would have
been used to pay down the Designated Accounts Receivable to such other
Foreign Subsidiary specified by the Purchaser in writing, which will, in
turn, use the proceeds of such loan to, as requested by the Purchaser in
writing, either pay down its Related Party Accounts Receivable or pay
Requested Dividends or (z) hold the cash that would have been used to pay
down the Designated Accounts Receivable in such Foreign Subsidiaries (it
being understood that the Cash and Cash Equivalents held by the Foreign
Subsidiaries at Closing may exceed the maximum amount specified in Section
8.03(f) to the extent this clause (z) causes the Cash and Cash Equivalents
held by the Foreign Subsidiaries at Closing to exceed such maximum amount).
The Purchaser and the Sellers will work together to minimize the amount of
any foreign withholding Taxes imposed upon the Requested Dividends (the
"Requested Dividend Withholding Taxes"). To the extent that the Foreign
Subsidiaries pay the Requested Dividends and the Purchaser and the Sellers
cannot eliminate any Requested Dividend Withholding Taxes, then the
Purchaser agrees to increase the Cash Consideration by an amount equal to
the Requested Dividend Withholding Taxes.
(c) The Sellers further agree, upon request of the Purchaser, to
cause the Foreign Subsidiaries to cancel or forgive immediately prior to
the Closing all or any portion of any outstanding Pre-Petition Intercompany
Payables owed by the Sellers to the Foreign Subsidiaries, after giving
effect to any offsets requested by the Purchaser pursuant to this Section
6.19. To the extent that pursuant to this Section 6.19(c) the Sellers cause
Polaroid Contracting CV to cancel or forgive any Pre-Petition Intercompany
Payables, the Sellers shall cause such Foreign Subsidiaries as are
designated by the Purchaser to cancel or forgive an equal amount of any
loans owed to them by Polaroid Contracting CV.
(d) The Sellers agree to retain as Excluded Assets the Designated
Accounts Receivable and such other accounts receivable from the Foreign
Subsidiaries as the Purchaser may request in writing (collectively, the
"Retained Related Party Accounts Receivable"). At Closing, the Purchaser
shall cause the Foreign Subsidiaries to pay in full all of the Retained
Related Party Accounts Receivable.
(e) The Purchaser and the Sellers will cooperate to minimize any
foreign Taxes and costs associated with the actions contemplated by this
Section 6.19. In the event that the Purchaser requests that the Sellers
take any actions pursuant to this Section 6.19 that the Sellers would not
otherwise be required to take, and the Purchaser and the Sellers are unable
to eliminate the costs and foreign Taxes associated with such actions, then
the Purchaser will pay any costs and foreign Taxes incurred by the Sellers
as a result of such actions (except to the extent that such foreign Taxes
are Requested Dividend Withholding Taxes that give rise to an increase to
the Cash Consideration pursuant to Section 6.19(b)).
Section 6.20. Closing Date Dividends and Share Buyback. The
Sellers agree that, if requested by the Purchaser in writing, they will (a)
cause the Foreign Subsidiaries specified in writing by the Purchaser (the
"Borrowing Foreign Subsidiaries") to enter into a Credit Agreement (the
"Credit Agreement") in form and substance satisfactory to the Purchaser
immediately prior to the Closing, (b) cause each Borrowing Foreign
Subsidiary to borrow such amount as is requested by the Purchaser in
writing, and (c) cause each such Borrowing Foreign Subsidiary to either (i)
distribute such borrowings to the Sellers as a dividend or distribution,
(ii) use such borrowings to repurchase or redeem the shares of such
Borrowing Foreign Subsidiary from the Sellers, or (iii) loan such
borrowings to such other Foreign Subsidiary as may be requested by the
Purchaser in writing, which will distribute such borrowings to the Sellers
or repurchase or redeem the shares of such other Foreign Subsidiary from
the Sellers (all such payments described in clause (i), (ii) or (iii) being
referred to as the "Related Party Special Dividends"). The Purchaser and
the Sellers agree to reduce the Cash Consideration by the net amount of any
Related Party Special Dividends actually paid to the Sellers, after
accounting for any foreign withholding Taxes imposed on such Related Party
Special Dividends (the "Net Related Party Special Dividends").
ARTICLE VII
ADDITIONAL POST-CLOSING COVENANTS
Section 7.01. Further Assurances. In addition to the provisions of
this Agreement, from time to time after the Closing Date, the Sellers and
the Purchaser will use all reasonable efforts to execute and deliver such
other instruments of conveyance, transfer, or assumption, as the case may
be, and take such other action as may be reasonably requested to implement
more effectively the Contemplated Transactions.
Section 7.02. Books and Records; Personnel. Sellers and Purchaser
shall reasonably cooperate with each other after the Closing so that
(subject to any limitations that are reasonably required to preserve
applicable attorney-client privilege) each party and any of their
Representatives reasonable access to the respective officers and employees
of the other party, and reasonable access to all business records,
contracts and other documents and information of the other party existing
at the Closing Date and relating to the Acquired Assets, the Assumed
Liabilities, the Excluded Liabilities or the conduct of the Business
(including copies thereof) as is reasonably necessary for the (a)
administration of the Case, or preparation for or the prosecution or
defense of any existing or future Legal Proceeding (other than one by or on
behalf of a party to this Agreement) by or against Sellers or Purchaser,
(b) preparation and filing of any Tax Return or election relating to the
Acquired Assets, the Assumed Liabilities or the conduct of the Business and
any audit by any taxing authority of any returns of Purchaser or Sellers
relating thereto, (c) preparation and filing of any other documents
required by governmental or regulatory bodies, and (d) transfer of data to
Purchaser relating to the Business. The party requesting such information
and assistance shall reimburse the other party for all out-of-pocket costs
and expenses incurred by such party in providing such information and in
rendering such assistance, except that Sellers shall bear the costs and
expenses of transferring to Purchaser or its designee data and other
information reasonably requested by Purchaser in order to enable Purchaser
to establish and operate its own data systems. The access to files, books
and records contemplated by this Section 7.02 shall be during normal
business hours and upon not less than two Business Days' prior written
request, shall be subject to such reasonable limitations as the party
having custody or control thereof may impose to preserve the
confidentiality of information contained therein, and shall not extend to
material subject to a claim of privilege unless expressly waived by the
party entitled to claim the same. Unless prohibited by Law, the Sellers
shall provide to the Purchaser copies of all personnel records and other
Books and Records retained by the Sellers under Section 2.02(c) of this
Agreement.
Section 7.03. Continued Cooperation. If any transfer or assignment
by the Sellers to, or any assumption by the Purchaser of, any interest in,
or liability, obligation or commitment under, any Acquired Asset requires
the consent of a Third Party, and any such consent is not obtained prior to
the Closing, then, if Purchaser so elects, such Acquired Asset shall not be
transferred to Purchaser at the Closing Date and the Sellers shall
cooperate in any lawful and reasonable arrangement reasonably proposed by
the Purchaser (including the appointment of Purchaser as attorney-in-fact
for the Sellers) and do or cause to be done all such things as shall in the
reasonable opinion of Purchaser or its counsel be necessary or proper to
(a) assure that the rights of Purchaser under such Acquired Asset shall be
preserved for the benefit of or transferred or issued to Purchaser and (b)
obtain for Purchaser the economic benefits under the asset, claim or right
with respect to which the consent has not been obtained. Such reasonable
arrangement may include (a) the subcontracting, sublicensing or subleasing
to the Purchaser of any and all rights of the Sellers against the other
party to such third-party agreement arising out of a breach or cancellation
thereof by the other party, and (b) the enforcement by the Sellers of such
rights. To the extent, and only to the extent, the Purchaser is able to
receive the economic claims, rights and benefits under such asset, the
Purchaser shall be responsible for the Assumed Liabilities, if any, arising
under such Acquired Asset.
Section 7.04. Estate Costs. (a) If, after June 2, 2002, the
aggregate amount of the Estate Costs paid or incurred exceeds $27,000,000,
then the Sellers and/or their successor(s) may not incur any expenses to
pursue any causes of action, judgments, Claims or demands that constitute
Excluded Assets without the Purchaser's and the Agent's prior written
consents, which consents shall not be unreasonably withheld.
(b) If, after June 2, 2002 and until the distribution of all of
the Sellers' Stock by the Sellers and/or their successor(s) to the
creditors of the Sellers, the aggregate amount of the Estate Costs paid
exceeds $27,000,000 (and the Sellers and/or their successor(s) do not have
any cash available to pay additional Estate Costs), then, for any Estate
Costs in excess of $27,000,000 that become due and payable, the Purchaser
forthwith shall pay to the Sellers and/or their successor(s) an amount
equal to such excess up to $4,000,000 in cash, upon receipt by the
Purchaser of reasonably satisfactory documentation evidencing Sellers'
and/or their successors(s)' obligation to pay such Estate Costs. If, after
June 2, 2002 and until the distribution of all of the Sellers' Stock by the
Sellers and/or their successor(s) to the creditors of the Sellers, the
aggregate amount of the Estate Costs paid exceeds $31,000,000 (and the
Sellers and/or their successor(s) do not have any cash available to pay
additional Estate Costs), the Sellers and the Purchaser understand that,
for any Estate Costs in excess of $31,000,000 that become due and payable,
the Agent, on behalf of the secured lenders to the Sellers, forthwith shall
pay to the Sellers and/or their successor(s) an amount equal to such excess
up to $3,000,000 in cash (the "Bank Reimbursement"), upon receipt by the
Agent of reasonably satisfactory documentation evidencing Sellers' and/or
their successors(s)' obligation to pay such Estate Costs. If, after June 2,
2002 and until the distribution of all of the Sellers' Stock by the Sellers
and/or their successor(s) to the creditors of the Sellers, the aggregate
amount of the Estate Costs paid exceeds $34,000,000 (and the Sellers and/or
their successor(s) do not have any cash available to pay additional Estate
Costs), then, for any Estate Costs in excess of $34,000,000 that become due
and payable, the Purchaser forthwith shall pay to the Sellers and/or their
successor(s) an amount equal to such excess up to $3,000,000 in cash (the
"Second Tier Reimbursement"), upon receipt by the Purchaser of reasonably
satisfactory documentation evidencing Sellers' and/or their successors(s)'
obligation to pay such Estate Costs.
(c) If, after June 2, 2002 and until the distribution of all of
the Sellers' Stock by the Sellers and/or their successor(s) to the
creditors of the Sellers, the aggregate amount of the Estate Costs paid or
required to be paid exceeds $37,000,000 (and the Sellers and/or their
successor(s) do not have any cash available to pay additional Estate
Costs), then, for any Estate Costs in excess of $37,000,000 that become due
and payable, and for the sole purpose of generating cash to fund all or a
portion of such excess, up to a maximum excess of $4,500,000, the Sellers
and/or their successor(s) shall have the right, but not the obligation, to
sell to the Purchaser up to such number of shares of the Sellers' Stock as
shall equal four percent (4%) of the Issued Stock for a maximum aggregate
purchase price of $4,500,000, as follows: the Sellers and/or their
successor(s) shall have the right, but not the obligation, to sell such
number of shares of the Sellers' Stock to the Purchaser at a price equal
to: (i) for the first two percent (2%) of the Issued Stock, $1,250,000 for
each one percent (1%) of the Issued Stock (or a pro-rata price based
thereon); and (ii) for the next two percent (2%) of the Issued Stock,
$1,000,000 for each one percent (1%) of the Issued Stock (or a pro-rata
price based thereon). If more than one class of stock is included in the
Sellers' Stock, all sales of stock by the Sellers and/or their successor(s)
to the Purchaser pursuant to this paragraph must include the same
percentage of each class of stock included in the Sellers' Stock. Except in
the case of a distribution by the Sellers and/or their successor(s) to the
holders of allowed Claims in the Case under a confirmed Chapter 11 plan of
reorganization, if the Sellers and/or their successor(s) wish to sell or
otherwise transfer shares of the Sellers' Stock to a Third Party pursuant
to a bona fide written offer therefor, then the Sellers and/or their
successor(s) shall give the Purchaser written notice thereof, which notice
shall (x) include a copy of such bona fide written offer and a description
of any other material terms of the offer not contained in such offer,
including the identity of the transferee, the price or other consideration
for which the shares of the Sellers' Stock are proposed to be sold or
transferred, and the number of shares of the Sellers' Stock to be sold or
transferred, and (y) contain an irrevocable offer to sell such shares of
the Sellers' Stock to the Purchaser at the same price and on the same terms
contained in the bona fide written offer. For a period of twenty days after
its receipt of such notice, the Purchaser and/or its designee(s) shall have
the right and option to purchase all or a portion of the shares of the
Sellers' Stock at the same price and on the same terms contained in the
bona fide written offer.
(d) If (i) there remains any assets in the Sellers and/or their
successor(s) (the "Remaining Assets") and (ii) either the Agent shall have
made a Bank Reimbursement or the Purchaser shall have made a Second Tier
Reimbursement, then, unless the Sellers and/or their successor(s) determine
in good faith that there continues to be a reasonable expectation of
additional Estate Costs, the Sellers and/or their successor(s) shall (x)
pay to the Purchaser such percentage of the Remaining Assets as the amount
of the Second Tier Reimbursement actually paid bears to the sum of the
amount of the Bank Reimbursement actually paid and the amount of the Second
Tier Reimbursement actually paid (such sum, the "Total Reimbursement
Paid"), up to $5,000,000 and (y) pay to the Agent, for the benefit of the
secured lenders to the Sellers, such percentage of the Remaining Assets as
the amount of the Bank Reimbursement actually paid bears to the Total
Reimbursement Paid, up to $5,000,000. The Sellers and/or their successor(s)
shall not make any distributions or payments (other than distributions of
the Sellers' Stock or on account of Estate Costs) unless the Sellers shall
have (i) made all of the payments described in the immediately preceding
sentence and (ii) waived their rights to receive any and all payments under
Section 7.04(b) and waived their rights to sell the Sellers' Stock to the
Purchaser under Section 7.04(c).
(e) For purposes of this Section 7.04, "successor(s)" to the
Sellers shall mean a plan administrator or a liquidating trust or an entity
serving a comparable function, and shall not include the creditors of the
Sellers to whom the Sellers' Stock is distributed.
Section 7.05. Distribution of the Sellers' Stock. Sellers agree
that, without the written consent of the Purchaser, the Sellers will not
sell or otherwise transfer or distribute the Sellers' Stock except pursuant
to a distribution by the Sellers to the holders of allowed Claims in the
Case under a confirmed Chapter 11 plan of reorganization or to One Equity
Partners LLC. Sellers further agree that the Sellers' plan of
reorganization (the "Proposed Plan") will, if requested by the Purchaser,
contain, in form and substance reasonably acceptable to the Purchaser,
provisions to the following effect: (i) the Purchaser shall be deemed to be
a "successor" to the Sellers for the limited purpose of the provisions of
section 1145(a) of the Bankruptcy Code; and (ii) the distribution of the
Sellers' Stock under the Proposed Plan to the holders of allowed Claims
against the Sellers shall constitute the offer or sale under a plan of the
Sellers of a security in exchange for a claim against, an interest in, or a
claim for an administrative expense in the Case. In addition, Sellers agree
that any disclosure statement under section 1125 of the Bankruptcy Code in
support of the Proposed Plan shall (i) contain a description, in form and
substance reasonably acceptable to the Purchaser, of the exemption from
securities laws under section 1145 of the Bankruptcy Code with respect to
the Sellers' Stock, and (ii) advise any holder of any Claim potentially
entitled to receive such Sellers' Stock to consult their own advisors with
respect thereto. The Purchaser shall cooperate with the Sellers in the
preparation of any such disclosure statement and provide such information
regarding the Purchaser as shall be necessary to ensure that the disclosure
statement complies with section 1125 of the Bankruptcy Code. Sellers
further agree that they will use their reasonable best efforts to obtain a
final and non-appealable order of the Bankruptcy Court confirming the
Proposed Plan, which final and non-appealable order shall contain, in form
and substance reasonably acceptable to the Purchaser, provisions to the
following effect: (i) the Purchaser shall be deemed to be a "successor" to
the Sellers for the limited purpose of the provisions of section 1145(a) of
the Bankruptcy Code; and (ii) the distribution of the Sellers' Stock under
the Sellers' confirmed Chapter 11 plan to the holders of allowed Claims
against the Sellers shall constitute the offer or sale under a plan of the
Sellers of a security in exchange for a claim against, an interest in, or a
claim for an administrative expense in the Case.
Section 7.06. Non-transferable Claims. If any cause of action,
judgment, Claim or demand intended to be included in the Acquired Assets
pursuant to Section 2.01(m) is not transferable or assignable to the
Purchaser for any reason, the Sellers agree not to pursue any such cause of
action, judgment, Claim or demand without the prior written consent of the
Purchaser.
ARTICLE VIII
CONDITIONS PRECEDENT
Section 8.01. Conditions Precedent to Obligations of the Sellers
and the Purchaser. The respective obligations of each party to effect the
Contemplated Transactions shall be subject to the satisfaction at or prior
to the Closing Date of the following conditions:
(a) any waiting period applicable to the consummation of the
Contemplated Transactions under the HSR Act and any applicable foreign
antitrust or competition laws shall have expired or been terminated;
(b) no statute, rule, regulation, executive order, decree,
decision, ruling, or preliminary or permanent injunction shall have been
enacted, entered, promulgated, or enforced by any U.S. federal or state
court or foreign governmental authority that prohibits, restrains, enjoins
or restricts the consummation of the Contemplated Transactions that has not
been withdrawn or terminated; and
(c) the Approval Order in substantially the form contemplated by
this Agreement (unless the Purchaser shall have agreed to modifications)
shall have been entered by the Bankruptcy Court and shall have become final
and non-appealable.
Section 8.02. Conditions Precedent to Obligation of the Sellers.
The obligation of the Sellers to effect the Contemplated Transactions shall
be subject to the satisfaction at or prior to the Closing Date of the
conditions set forth in Section 8.01 and of the following additional
conditions (compliance with which or the occurrence of which may be waived
in whole or in part in a writing executed by Polaroid):
(a) (i) the Purchaser shall have performed in all material
respects its obligations under this Agreement required to be performed by
it at or prior to the Closing Date and (ii) the representations and
warranties of the Purchaser contained in this Agreement, disregarding all
qualifications and exceptions contained in such representations and
warranties relating to materiality or material adverse effect, shall be
true and correct in all respects, in each case as of the date of this
Agreement and as of the Closing Date as if made at and as of such dates, it
being understood and agreed (A) that the condition set forth in clause (ii)
of this Section 8.02(a) shall be deemed to have been satisfied unless any
failure to be true has had, individually or in the aggregate with all other
failures relating to the various representations and warranties of the
Purchaser, a material adverse effect on the ability of the Purchaser to
consummate the Contemplated Transactions, and (B) that representations and
warranties made as of a specific date need be true only as of that date;
and
(b) all of the documents, agreements and certificates described in
Section 3.02(a) shall have been delivered as described therein.
Section 8.03. Conditions Precedent to Obligation of the Purchaser.
The obligation of the Purchaser to effect the Contemplated Transactions
shall be subject to the satisfaction at or prior to the Closing Date of the
conditions set forth in Section 8.01 and of the following additional
conditions (compliance with which or the occurrence of which may be waived
in whole or in part in a writing executed by the Purchaser):
(a) (i) each Seller shall have performed in all material respects
their obligations under this Agreement required to be performed by them at
or prior to the Closing Date and (ii) the representations and warranties of
the Sellers contained in this Agreement, disregarding all qualifications
and exceptions contained in such representations and warranties relating to
materiality or Material Adverse Effect, shall be true and correct in all
respects, in each case as of the date of this Agreement and as of the
Closing Date as if made at and as of such dates, it being understood and
agreed (A) that the condition set forth in clause (ii) of this Section
8.03(a) shall be deemed to have been satisfied unless any failure to be
true has had, individually or in the aggregate with all other failures
relating to the various representations and warranties of the Sellers, a
Material Adverse Effect, and (B) that representations and warranties made
as of a specific date need be true only as of that date;
(b) all of the documents, agreements and certificates described in
Section 3.02(b) shall have been delivered as described therein;
(c) all consents and approvals of third parties and Governmental
Authorities necessary to consummate the transactions contemplated hereby,
other than those consents and approvals the absence of which, individually
or in the aggregate, would not have a Material Adverse Effect and would not
materially impair the Purchaser's ability to operate the Business
substantially in the same manner as the Business is operated immediately
prior to the Closing, shall have been obtained in a form reasonably
satisfactory to Purchaser, without any diminution in the value of the
Acquired Assets;
(d) the Purchaser shall have received all Permits necessary to
allow the Purchaser to operate the Business immediately after the Closing
substantially in the same manner as the Business is operated immediately
prior to the Closing, other than those Permits the absence of which,
individually or in the aggregate, would not have a Material Adverse Effect
and would not materially impair the Purchaser's ability to operate the
Business substantially in the same manner as the Business is operated
immediately prior to the Closing;
(e) no Material Adverse Effect shall have occurred, nor shall any
event or circumstance which could reasonably be expected to have a Material
Adverse Effect shall have occurred;
(f) at least twenty-five million dollars ($25,000,000) and not
more than thirty million dollars ($30,000,000) of Cash and Cash Equivalents
shall be held by the Foreign Subsidiaries;
(g) with respect to (i) Transfer Taxes due in connection with the
transactions contemplated by this Agreement, and all income Taxes due on
the sale of all of the outstanding capital stock of Polaroid de Mexico S.A.
de C.V. pursuant to Article 190 of the Income Tax Law (Mexico), (ii) all
withholding Taxes due in connection with the repatriation of Cash and Cash
Equivalents held by the Foreign Subsidiaries to the Sellers prior to the
Closing, and (iii) all California sales and use Taxes relating to periods
from July 1997 through June 30, 2000, including any proposed sales and use
Taxes stated by way of notice, audit report, or any other correspondence
received from the California Board of Equalization, the Sellers shall have
provided evidence reasonably satisfactory to the Purchaser (x) of the full
payment of all such Taxes and/or (y) to the extent such Taxes have not been
paid in full, that the Sellers have set aside (or have caused the
applicable Foreign Subsidiaries to set aside) funds in a separate escrow
account reasonably satisfactory to the Purchaser (or, in the case of any
Foreign Subsidiary, in such other manner as is reasonably satisfactory to
the Purchaser), in amounts sufficient to pay in full any and all such
unpaid Taxes, such funds to be held in escrow with an independent escrow
agent for the purpose of paying such Taxes; and
(h) the Sellers shall have provided evidence reasonably
satisfactory to the Purchaser that the Sellers, at the Purchaser's request,
shall have caused, immediately prior to the Closing, any outstanding
intercompany indebtedness owed by any Foreign Subsidiary to any Seller to
be contributed to the capital of such Foreign Subsidiary or Foreign
Subsidiaries as may be designated by the Purchaser prior to the Closing.
ARTICLE IX
FURTHER AGREEMENTS AND TERMINATION
Section 9.01. Termination. This Agreement may be terminated and
the transactions contemplated hereby may be abandoned at any time prior to
the Closing:
(a) by mutual consent of each of Polaroid and the Purchaser;
(b) by either of Polaroid or the Purchaser if a Governmental
Authority shall have issued an order, decree or ruling (which order, decree
or ruling the parties hereto shall have used their reasonable best efforts
to lift), in each case, which has the effect of permanently restraining,
enjoining or otherwise prohibiting the Contemplated Transactions and such
order, decree, ruling or other action shall have become final and
nonappealable;
(c) by either Polaroid or the Purchaser upon written notice to the
non-terminating party by the terminating party:
(i) (A) if the Bankruptcy Court approves a Competing
Transaction or (B) upon the expiration of five Business Days
following the Sale Hearing (as defined in the Bidding Procedures)
(the "Approval Deadline"), if the Approval Order shall not have
been entered by the Bankruptcy Court as a result of the
Committee's sponsorship or proposal of a plan of reorganization or
liquidation or alternative transaction; or
(ii) (A) if the Sellers sell, transfer, lease or
otherwise dispose of, directly or indirectly, including through an
asset sale, stock sale, merger, reorganization, Recapitalization
or other similar transaction, of all or substantially all or a
material portion of the Business or the Acquired Assets (or agrees
to do any of the foregoing) in a transaction or series of
transactions to a party or parties other than the Purchaser and
other than in a Competing Transaction or (B) upon the filing by
the Sellers of a plan of reorganization or liquidation for any of
the Sellers which does not provide for the sale of the Acquired
Assets to the Purchaser under this Agreement, or upon the
confirmation of any such plan, whether or not filed by Sellers;
(d) by the Purchaser:
(i) if the Sales Procedures Order in substantially the
form contemplated by this Agreement (unless the Purchaser shall
have agreed to modifications) shall not have been entered by the
Bankruptcy Court and become final and non-appealable on or before
May 20, 2002; provided, however, Purchaser shall no longer have
the right to terminate this Agreement pursuant to this Section
9.01(d)(i) after the Sales Procedure Order in such form shall have
been entered by the Bankruptcy Court and shall have become final
and non-appealable;
(ii) if the Approval Order in substantially the form
contemplated by this Agreement (unless the Purchaser shall have
agreed to modifications) shall not have been entered by the
Bankruptcy Court and become final and non-appealable on or before
July 12, 2002; provided, however, Purchaser shall no longer have
the right to terminate this Agreement pursuant to this Section
9.01(d)(ii) after the Approval Order in such form shall have been
entered by the Bankruptcy Court and shall have become final and
non-appealable;
(iii) if there shall have been a default or Breach by any
Seller of such Seller's representations and warranties, covenants,
agreements, terms or conditions in this Agreement, the Ancillary
Agreements or in any exhibit, schedule, writing, document,
instrument or certificate delivered pursuant to this Agreement or
in connection with the transactions contemplated hereby, which
default or Breach shall be incapable of being cured or, if capable
of being cured, shall not have been cured within 30 Business Days
following receipt by the Sellers of written notice of such default
or Breach from the Purchaser (specifying, in reasonable detail,
such claimed default or Breach and demanding its cure or
satisfaction), and which default or Breach would entitle the
Purchaser not to consummate the Closing under Section 8.03(a);
(iv) if, since the date of this Agreement, there shall
have been any event, development or change of circumstance that
has had, individually or in the aggregate, a Material Adverse
Effect;
(v) on or prior to May 1, 2002, if the Purchaser shall
not have received a written commitment or commitments for bank
financing, on terms and conditions satisfactory to Purchaser in
its sole discretion, in an amount (together with the proceeds of
the equity financing contemplated by the Equity Commitment Letter)
sufficient to (A) consummate the transactions contemplated by this
Agreement, (B) pay the fees and expenses of the transactions
contemplated by this Agreement and (C) provide for the ongoing
working capital needs of the Business;
(vi) if the Purchaser is ready, willing and able to consummate
the Closing and the Sellers have willfully failed or refuse to
consummate the Closing within five (5) days after the satisfaction
of all conditions precedent to Closing set forth in Sections 8.01
and 8.02; or
(vii) if the Closing shall not have occurred on or before
July 31, 2002.
(e) by Polaroid:
(i) if there shall have been a default or Breach by the
Purchaser of any of the Purchaser's representations and
warranties, covenants, agreements, terms or conditions in this
Agreement, the Ancillary Agreements or in any exhibit, schedule,
writing, document, instrument or certificate delivered pursuant to
this Agreement or in connection with the transactions contemplated
hereby, which default or Breach shall be incapable of being cured
or, if capable of being cured, shall not have been cured within 30
Business Days following receipt by the Purchaser of written notice
of such default or Breach from Sellers (specifying, in reasonable
detail, such claimed default or Breach and demanding its cure or
satisfaction), and which default or Breach would entitle Sellers
not to consummate the Closing under Section 8.02(a); or
(ii) if the Sellers are ready, willing and able to
consummate the Closing and the Purchaser has willfully failed or
refuses to consummate the Closing within five (5) days after the
satisfaction of all conditions precedent to Closing set forth in
Sections 8.01 and 8.03; or
(iii) if the Closing shall not have occurred on or before
August 31, 2002.
Section 9.02. Termination Payment.
(a) In the event this Agreement is terminated pursuant to Section
9.01(c)(i), (c)(ii), (d)(iii) or (d)(vi), and provided that the Purchaser
is not then in material breach of this Agreement for which the Sellers had
previously notified Purchaser (and in the case of Sections 9.01(c)(i) and
(c)(ii), such notice shall have been received by the Purchaser prior to the
Bid Deadline (as defined in the Bidding Procedures attached hereto as
Exhibit M) and such material breach shall not have been cured prior to the
Auction (as defined in the Bidding Procedures)), then Polaroid shall be
obligated to pay the Purchaser an amount equal to $5,000,000 (the
"Termination Payment"). Any Termination Payment payable upon termination of
this Agreement pursuant to Section 9.01(d)(iii) or (d)(vi) shall be
immediately earned and payable by the Sellers to the Purchaser or its
designee upon such termination. Any Termination Payment payable upon
termination of this Agreement pursuant to Section 9.01(c)(i) or (c)(ii)
shall be immediately earned upon such termination and payable by the
Sellers to the Purchaser or its designee upon:
(i) with respect to a termination pursuant to Section
9.01(c)(i)(A), the earlier of (x) the closing of the Competing
Transaction or (y) the expiration of ninety (90) days following
the date of the Bankruptcy Court's approval of such Competing
Transaction;
(ii) with respect to a termination pursuant to Section
9.01(c)(i)(B), the earlier of (x) the consummation of any such
plan or alternative transaction sponsored or proposed by the
Committee or (y) the expiration of ninety (90) days following the
Approval Deadline;
(iii) with respect to a termination pursuant to Section
9.01(c)(ii)(A), the earlier of (x) the consummation of any such
sale, transfer, lease or other disposition of all or substantially
all or a material portion of the Business or the Acquired Assets
or (y) the expiration of ninety (90) days following the date the
Sellers enter into any agreement to do any of the foregoing; and
(iv) with respect to a termination pursuant to Section
9.01(c)(ii)(B), the earlier of (x) the consummation of any such
plan of reorganization or liquidation for any of the Sellers or
(y) the expiration of ninety (90) days following the date of
filing of any such plan of reorganization or liquidation.
(b) In the event this Agreement is terminated pursuant to Section
9.01(b), (d)(ii), (d)(iv), (d)(vii) or (e)(iii), and provided that (i) the
Purchaser is not then in material breach of this Agreement for which the
Sellers had previously notified the Purchaser, (ii) in the case of Section
9.01(b), the issuance of the relevant order, decree or ruling is not the
result of the status of the Purchaser or any action or conduct of the
Purchaser, and (iii) in the case of Sections 9.01(d)(ii), (d)(iv) and
(d)(vii), the failure or occurrence of the event giving rise to any such
termination is not the result of the status of the Purchaser or any action
or conduct of the Purchaser (it being understood that for purposes of this
clause (iii), Purchaser's failure or refusal to amend, modify or waive any
rights or conditions under this Agreement shall not be deemed to be an
action or conduct of the Purchaser), then Polaroid shall be obligated to
pay the Purchaser an amount equal to the Purchaser's reasonable fees and
expenses (including, without limitation, reasonable attorneys' fees,
expenses of its financial advisors, and expenses of other consultants)
incurred in connection with the transactions contemplated by this Agreement
(the "Expense Reimbursement") up to (x) if such termination shall occur
prior to June 12, 2002, three million dollars ($3,000,000) or (y) if such
termination shall occur on or after June 12, 2002, three million five
hundred thousand dollars ($3,500,000). In the event this Agreement is
terminated pursuant to Section 9.01(d)(i), and the Bankruptcy Court so
authorizes, Polaroid shall be obligated to pay the Purchaser an amount
equal to the Expense Reimbursement. Any Expense Reimbursement payable upon
termination of this Agreement pursuant to Section 9.01(b), (d)(i), (d)(ii),
(d)(iv), (d)(vii) or (e)(iii) shall be immediately earned upon such
termination and payable by the Sellers to the Purchaser or its designee
promptly upon the delivery of an invoice related to such Expense
Reimbursement to Polaroid by the Purchaser, provided, however, that if the
Sellers believe, in good faith, that the amount of the Expense
Reimbursement sought by the Purchaser is not reasonable, then they shall
have the right to seek Bankruptcy Court review thereof prior to paying such
amount. Notwithstanding anything to the contrary contained in this Section
9.02, if the Sellers sell substantially all of their assets for
consideration totaling in excess of the consideration provided for herein
within six (6) months after the termination of this Agreement pursuant to
Section 9.01(e)(iii), then Polaroid shall be obligated to pay the Purchaser
an amount equal to the Termination Payment (if the Expense Reimbursement
has not been paid previously) or the excess of the Termination Payment over
the Expense Reimbursement (if the Expense Reimbursement has been paid
previously) (such excess, the "Excess Amount"). Any such Termination
Payment or such Excess Amount, as the case may be, shall be immediately
earned and payable by the Sellers to the Purchaser or its designee upon the
closing of such sale.
(c) The payment to the Purchaser or any designees of the Purchaser
pursuant to this Section 9.02 shall be by wire transfer of immediately
available funds in Dollars, to such account or accounts as the Purchaser
shall designate in writing.
Section 9.03. Procedure and Effect of Termination. In the event of
termination and abandonment of the transactions contemplated hereby
pursuant to Section 9.01, written notice thereof shall forthwith be given
to the other parties to this Agreement and this Agreement shall terminate
(subject to the provisions of this Section 9) and the Contemplated
Transactions shall be abandoned, without further action by any of the
parties hereto. If this Agreement is terminated as provided herein no party
hereto shall have any liability or further obligation to any other party to
this Agreement resulting from such termination except (a) that the
provisions of Section 2.06 (Deposit Amount), Section 6.04 (Public
Announcements), this Article IX (Further Agreements and Termination),
Section 10.02 (Notices), Section 10.05 (Governing Law), Section 10.06
(Venue and Retention of Jurisdiction) and Section 10.08 (Expenses) shall
remain in full force and effect; and (b) no party waives any claim or right
against a breaching party in respect of any of its representations,
warranties, covenants or agreements set forth in this Agreement; provided,
however, that in the event the Purchaser is entitled to receive the
Termination Payment, the right of the Purchaser to receive such amount
shall constitute the Purchaser's sole remedy for (and such amount shall
constitute liquidated damages in respect of) any breach by any Seller of
any of its representations, warranties, covenants or agreements set forth
in this Agreement; and provided further, however, that in the event the
Sellers are entitled to receive the Deposit Amount (or any part thereof)
pursuant to Section 2.06, the right of the Sellers to receive such amount
shall constitute the Sellers' sole remedy for (and such amount shall
constitute liquidated damages in respect of) any breach by the Purchaser of
any of its representations, warranties, covenants or agreements set forth
in this Agreement.
ARTICLE X
GENERAL PROVISIONS
Section 10.01. Disclosure Schedule. Nothing in the Disclosure
Schedule shall be deemed adequate to disclose an exception to a
representation or warranty made herein unless the exception is described on
the Disclosure Schedule with reasonable particularity and expressly refers
to the applicable Section of this Agreement.
Section 10.02. Notices. All notices, claims, demands, and other
communications hereunder shall be in writing and shall be deemed given upon
(a) confirmation of receipt of a facsimile transmission, (b) confirmed
delivery by a standard overnight carrier or when delivered by hand, or (c)
the expiration of three (3) Business Days after the day when mailed by
registered or certified mail (postage prepaid, return receipt requested),
addressed to the respective parties at the following addresses (or such
other address for a party as shall be specified by like notice):
(a) If to the Purchaser, to:
OEP Imaging Corporation
c/o One Equity Partners LLC
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
Facsimile: 212.277.1533
with copies to:
Dechert
0000 Xxxx Xxxxxx
0000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile: 215.994.2222
Dechert
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Facsimile: 212.698.3599
(b) If to any Seller, to:
Polaroid Corporation
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
with copies to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
Facsimile: 212.450.3099
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Facsimile: 212.872.1002
Section 10.03. Descriptive Headings. The headings contained in
this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
Section 10.04. Entire Agreement; Assignment. This Agreement
(including the Exhibits and the Disclosure Schedule and the other documents
and instruments referred to herein) constitutes the entire agreement and
supersedes all other prior agreements and understandings, both written and
oral, between the parties, with respect to the subject matter hereof. This
Agreement and the rights and obligations may not be assigned in whole or in
part by any party hereto, including by operation of law or otherwise except
(a) with the written consent of the other parties hereto, (b) by the
Purchaser to one or more direct or indirect subsidiaries or other
Affiliates of the Purchaser which assignment shall not relieve the
Purchaser of any of its obligations hereunder or (c) by the Purchaser as
collateral security to any entity providing direct or indirect financing to
Purchaser or any of its Affiliates. To the extent any such assignment by
the Purchaser relates to the assignment by any Seller of an executory
contract or unexpired lease hereunder and occurs prior to Closing such
that, at Closing, this Agreement will provide for the Sellers' assignment
of such executory contract or unexpired lease to a party other than the
Purchaser, such assignment by the Seller shall be subject to all applicable
provisions of the Bankruptcy Code.
Section 10.05. Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware without
giving effect to the rules of conflict of laws of the State of Delaware
that would require application of any other law.
Section 10.06. Venue and Retention of Jurisdiction. All actions
brought, arising out of, or related to the Contemplated Transactions shall
be brought in the Bankruptcy Court, and the Bankruptcy Court shall retain
jurisdiction to determine any and all such actions.
Section 10.07. Risk of Loss. Prior to the Closing, all risk of
loss, damage or destruction to all or any part of the Acquired Assets or
the Business shall be borne exclusively by the Sellers.
Section 10.08. Expenses. Except as otherwise expressly provided
herein, whether or not the actions contemplated by this Agreement are
consummated, all costs and expenses incurred in connection with this
Agreement and the Contemplated Transactions shall be paid by the party
incurring such expenses.
Section 10.09. Amendment. This Agreement (including the Exhibits
and the Disclosure Schedule) may not be amended except by an instrument in
writing signed on behalf of the parties hereto.
Section 10.10. Waiver. At any time prior to the Closing Date, the
parties hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in
any document delivered pursuant hereto, and (c) waive compliance with any
of the agreements or conditions contained herein. Except as otherwise
expressly provided herein, any agreement on the part of a party hereto to
any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
Section 10.11. Counterparts; Effectiveness. This Agreement may be
executed in two or more counterparts, each of which shall be deemed to be
an original but all of which shall constitute one and the same agreement.
This Agreement shall become effective when each party hereto shall have
received counterparts thereof signed by all the other parties hereto.
Section 10.12. Severability; Validity. If any provision of this
Agreement or the application thereof to any person or circumstance is held
invalid or unenforceable, the remainder of this Agreement, and the
application of such provision to other persons or circumstances, shall not
be affected thereby, and to such end, the provisions of this Agreement are
agreed to be severable.
Section 10.13. No Third Party Beneficiaries or Liabilities.
Nothing in this Agreement, express or implied, is intended to or shall (i)
confer on any Person other than the parties hereto and their respective
successors or assigns any rights (including third party beneficiary
rights), remedies, obligations or liabilities under or by reason of this
Agreement, (ii) constitute the parties hereto as partners or as
participants in a joint venture (iii) confer on any director, officer or
employee of the Purchaser or its Affiliates any obligations or liabilities
under or by reason of this Agreement. This Agreement shall not provide
third parties with any remedy, claim, liability, reimbursement, cause of
action or other right in excess of those existing without reference to the
terms of this Agreement. Nothing in this Agreement shall be construed as
giving to any Employee or any other individual any right or entitlement
under any Benefit Plan maintained by Sellers except as expressly provided
in such Benefit Plan. No third party shall have any rights under Sections
502, 503 or 504 of ERISA or any regulations thereunder because of this
Agreement which would not otherwise exist without reference to this
Agreement. No third party shall have any right, independent of any right
which may exist irrespective of this Agreement, under or granted by this
Agreement, to bring any suit at law or equity for any matter governed by or
subject to the provisions of this Agreement.
Section 10.14. Enforcement of Agreement. The parties hereto agree
that irreparable damage would occur in the event that any provision of this
Agreement was not performed in accordance with its specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to all other remedies available at law or in equity.
Section 10.15. Separate Agreements. Notwithstanding any provision
to the contrary contained herein, the Purchaser and/or its designated
Affiliate may, at Purchaser's election, purchase all or a portion of the
Sellers' right, title and interest in and to any or all of the outstanding
capital stock of the Acquired Subsidiaries under one or more separate
acquisition agreements substantially in the form attached hereto as Exhibit
S (each, an "Acquisition Agreement"). If the Purchaser and/or its
designated Affiliate elects to enter into one or more Acquisition
Agreements, the Consideration for the Acquired Assets under this Agreement
shall be reduced by the amount of the purchase price for the capital stock
of the Acquired Subsidiaries purchased or sold under such Acquisition
Agreements. Notwithstanding the foregoing, for purposes of any allocations
of consideration (as that term is defined in Treasury Regulation section
1.1060-1(c)), the amounts paid under this Agreement and any and all
Acquisition Agreements shall be aggregated as set forth in Section 3.03(c)
of this Agreement. If the Purchaser and/or its designated Affiliate elects
to enter into one or more Acquisition Agreements, the indemnification and
other post-closing obligation provisions of this Agreement shall apply to
such Acquisition Agreements and be binding on the parties to such
Acquisition Agreements as if the capital stock of the Acquired Subsidiaries
purchased or sold under such Acquisition Agreements were purchased and sold
under this Agreement. In addition to the foregoing, the Sellers agree to
cooperate with the Purchaser in structuring the acquisition of the Foreign
Subsidiaries in such manner as the Purchaser may reasonably request to
facilitate any financing to be entered into by the Purchaser in connection
with the Contemplated Transactions. Furthermore, the Sellers agree to
cooperate with the Purchaser in transferring Cash and Cash Equivalents
between the Sellers and the Foreign Subsidiaries and between the Foreign
Subsidiaries in such manner as the Purchaser may reasonably request in
connection with the Contemplated Transactions. Without limiting the
generality of the immediately foregoing two sentences, the Sellers agree,
at Purchaser's request in writing, to form new entities and, immediately
prior to the Closing, to transfer the equity interests of Foreign
Subsidiaries designated by the Purchaser in writing to such newly formed
entities and that in lieu of acquiring such designated Foreign
Subsidiaries, the Purchaser shall acquire all the equity interests of such
newly formed entities. The Sellers and the Purchaser agree that such newly
formed entities shall be deemed to be "Foreign Subsidiaries" under this
Agreement. Notwithstanding any provision to the contrary contained herein,
the Sellers shall not be required to take any action pursuant to this
Section 10.15 unless the Purchaser agrees to reimburse the Sellers for any
added costs or Taxes resulting therefrom, nor shall the Sellers be required
to take any action pursuant to this Section 10.15 that would delay the
Closing. Prior to the date of the Auction, the Purchaser shall notify the
Sellers of its election or non-election to enter into one or more
Acquisition Agreements and, if applicable, the structure of the acquisition
of the Foreign Subsidiaries.
Section 10.16. Non-Survival of Representations and Warranties and
Certain Covenants. None of the representations and warranties contained in
this Agreement and none of the covenants contained in this Agreement which
are required by their terms to be performed prior to the Closing shall
survive the Closing.
ARTICLE XI
INDEX OF DEFINED TERMS
Section 11.01. Index. The terms listed below shall have meanings
set forth in the Section listed across from the term.
Term Section or Reference
--------------------------------------------------- --------------------
2001 Audited Financial Statement.....................................4.06
2002 Financial Plan..................................................1.01
Accounts Payable.....................................................1.01
Accounts Receivable..................................................1.01
Acquired Assets......................................................2.01
Acquired Stock.......................................................2.01
Acquired Subsidiaries ...............................................Preamble
Additional Assumed Contracts.........................................6.13(c)
Affiliate ...........................................................1.01
Agreement............................................................Preamble
Allocation...........................................................3.03(a)
Ancillary Agreements.................................................1.01
Acquisition Agreement................................................11.15
Acquisition Proposal.................................................1.01
Applicable Law.......................................................1.01
Approval Order.......................................................1.01
Assumed Contracts....................................................1.01
Assumed Liabilities..................................................2.03
Audited Financial Statements.........................................4.09
Bank Reimbursement...................................................7.04(b)
Bankruptcy Code......................................................Preamble
Bankruptcy Court.....................................................Preamble
Bidding Procedures...................................................1.01
Books and Records....................................................1.01
Borrowing Foreign Subsidiaries.......................................6.20
Breach...............................................................1.01
Bulk Sales Laws......................................................1.01
Business.............................................................1.01
Business Day.........................................................1.01
Capital Lease Obligations............................................1.01
Case.................................................................Preamble
Cash and Cash Equivalents............................................1.01
Cash Consideration...................................................2.05
CERCLA...............................................................1.01
CERCLIS..............................................................1.01
Claim................................................................1.01
Closing..............................................................3.01
Closing Date.........................................................3.01
Code.................................................................1.01
Committee............................................................1.01
Competing Transaction................................................1.01
Confidentiality Agreement............................................1.01
Consideration........................................................2.05
Contemplated Transactions............................................Preamble
Contract.............................................................1.01
Copyrights...........................................................1.01
Credit Agreement.....................................................6.20
Cure Amounts.........................................................2.03(a)
date hereof..........................................................1.01
date of this Agreement...............................................1.01
Debt Repayment Amount................................................6.21
Demolition Agreement.................................................2.01(v)
Demolition Deposit...................................................2.01(v)
Deposit Amount.......................................................2.06
Deposit Escrow Agreement.............................................1.01
Designated Accounts Receivable.......................................6.19(b)
Determination Date...................................................1.01
Digimarc Asset Purchase Agreement....................................2.01(bb)
Disclosure Schedule..................................................1.01
Dollar...............................................................1.01
Domain Names.........................................................1.01
Earn-Out Note........................................................2.01(u)
Elections............................................................6.07(b)
Employee.............................................................1.01
Employment Laws......................................................4.21
Encumbrance..........................................................1.01
Environmental Audits.................................................4.15(g)
Environmental Laws...................................................1.01
Environmental Liabilities............................................1.01
Environmental Permits................................................4.15(d)
Equity Commitment Letter.............................................5.06
Equity Interest......................................................1.01
ERISA................................................................1.01
ERISA Affiliate......................................................1.01
Escrow Agent.........................................................1.01
Excess Amount........................................................9.02(b)
Excluded Assets......................................................2.02
Excluded Liabilities.................................................2.04
Exclusivity Order....................................................1.01
Expense Reimbursement................................................9.02(b)
Filing Date..........................................................Preamble
Financial Statements.................................................4.09
Foreign Plans........................................................4.16(d)
Foreign Subsidiaries.................................................1.01
GAAP.................................................................1.01
Governmental Authority...............................................1.01
Governmental Requirements............................................4.03
Guarantee Obligation.................................................1.01
Hazardous Materials..................................................1.01
Hired Employee.......................................................1.01
HSR Act..............................................................4.03
Improvements.........................................................1.01
Including............................................................1.01
Indebtedness.........................................................1.01
Initial Assumed Contracts............................................6.13(b)
Intellectual Property................................................1.01
Interest Rate........................................................1.01
Interim Financial Statements.........................................4.09
Inventory............................................................1.01
Law..................................................................1.01
Leased Real Estate ..................................................4.17(b)
Lease Deposit........................................................2.01(t)
Leases...............................................................4.17(b)
Legal Proceeding.....................................................1.01
Liability............................................................1.01
Licenses.............................................................1.01
Manage ..............................................................1.01
Marks................................................................1.01
Material Adverse Effect..............................................1.01
Modified List........................................................6.08(a)
Multiemployer Plan...................................................1.01
Net Related Party Special Dividends..................................6.20
OEP..................................................................5.06
Ordinary Course of Business..........................................1.01
Owned Real Estate ...................................................4.17(a)
Patents..............................................................1.01
PD Winter Street Lease...............................................2.01(t)
Pension Plan.........................................................1.01
Permits .............................................................1.01
Permitted Encumbrances...............................................1.01
Person...............................................................1.01
Petitions............................................................Preamble
Polaroid.............................................................Preamble
Polaroid Employee ...................................................1.01
Polaroid Entities....................................................1.01
Polaroid ID..........................................................2.01(bb)
Polaroid Intellectual Property.......................................4.20(a)
Polaroid Name .......................................................6.18
Post-Petition Contracts..............................................1.01
Post-Petition Intercompany Payables..................................2.03(d)
Post-Petition Intercompany Receivables...............................6.19(a)
Pre-Petition Intercompany Payables...................................6.19(a)
Pre-Petition Intercompany Receivables................................6.19(a)
Preliminary Assumed Contracts List...................................6.13(a)
Projected Balance Sheet..............................................1.01
Prior Period Returns ................................................6.07(h)(i)
Projected Balance Sheet..............................................2.05
Purchaser............................................................Preamble
Purchaser's Consent..................................................1.01
Purchaser's 401(k) Plan .............................................6.08(d)
Purchaser's Welfare Benefit Plan.....................................6.08(b)
Real Estate .........................................................4.17(c)
Recapitalization.....................................................1.01
Related Party Accounts Receivable....................................6.19(b)
Related Party Special Dividends......................................6.20
Release .............................................................1.01
Remaining Assets ....................................................7.04(c)
Remediation .........................................................4.15(c)
Representative.......................................................1.01
Requested Dividends..................................................6.19(b)
Requested Dividend Withholding Taxes.................................6.19(b)
Restated Asset Purchase Agreement....................................Preamble
Retained Related Party Accounts Receivable...........................6.19(d)
Requested Retained Cash..............................................2.05(b)
Sales Procedures Order...............................................1.01
Second Tier Reimbursement............................................7.04(b)
Securities Act.......................................................4.25
Seller Guarantees....................................................6.11
Sellers' 401(k) Plan ................................................6.08(d)
Sellers..............................................................Preamble
Sellers' Auditors....................................................1.01
Sellers' Knowledge...................................................1.01
Sellers' Stock.......................................................1.01
Sellers' Portion ....................................................6.07(h)(ii)
Straddle Period .....................................................6.07(h)(ii)
Straddle Period Return ..............................................6.07(h)(ii)
Subsidiary...........................................................1.01
Synthetic Lease Obligation...........................................1.01
Taxes................................................................1.01
Tax Items............................................................1.01
Tax Returns..........................................................1.01
Termination Payment..................................................9.02
Third Party..........................................................1.01
35 Day List..........................................................6.08(a)
Threshold Amount ....................................................10.01(a)(i)
Title Commitments....................................................6.14
Title Company........................................................6.14
Title Policies.......................................................6.14
Total Reimbursement Paid.............................................7.04(d)
Trade Secrets........................................................1.01
Transfer Taxes.......................................................6.07(a)
UK Loan Agreement....................................................4.24
WARN Act.............................................................4.21
Welfare Plan.........................................................1.01
Zoning Certifications................................................6.17
IN WITNESS WHEREOF, the Purchaser and each of the Sellers have
caused this Asset Purchase Agreement to be executed on their behalf by
their officers thereunto duly authorized, as of the date first above
written.
PURCHASER
OEP IMAGING CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
SELLERS
POLAROID CORPORATION POLAROID ASIA PACIFIC INTERNATIONAL INC
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------- ----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxxxx X. Xxxxxxxx
Title: Chief Financial Officer Title: President
POLAROID ASIA PACIFIC LIMITED POLAROID LATIN AMERICA CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------- ----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxxxx X. Xxxxxxxx
Title: President Title: Vice President
POLAROID EYEWEAR, INC. POLAROID MALAYSIA LIMITED
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------- ----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxxxx X. Xxxxxxxx
Title: Treasurer Title: Treasurer
INNER CITY, INC. INTERNATIONAL POLAROID CORPORATION
By: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------- ----------------------------------------
Name: Xxxx X. Xxxxxxx Name: Xxxxxxx X. Xxxxxxxx
Title: Assistant Secretary Title: Treasurer
MAG-MEDIA LTD. PMC, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------- ----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxxxx X. Xxxxxxxx
Title: President Title: President
POLAROID PARTNERS, INC. POLINT, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------- ----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxxxx X. Xxxxxxxx
Title: Treasurer Title: President
PRD CAPITAL, INC. PRD INVESTMENT, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------- ----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxxxx X. Xxxxxxxx
Title: President Title: President
POLAROID EYEWEAR FAREAST, INC. SUB DEBT PARTNERS CORP.
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------- ----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxxxx X. Xxxxxxxx
Title: Treasurer Title: President
POLAROID ONLINE SERVICES, INC. POLAROID ID SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------- ----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxxxx X. Xxxxxxxx
Title: Treasurer Title: President
POLAROID DRY IMAGING, LLC
By: POLAROID PARTNERS, INC.
Manager
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Treasurer
