[EXECUTION COPY]
ASSET PURCHASE AGREEMENT
BY
AND
BETWEEN
XXXXXXX CORPORATION
XXXXXXX XXXXXXX, INC.
AND
XXXXXXX PRINTING, LIMITED PARTNERSHIP
XXXXXXX PRINTING CORP.
XXXXXX X. XXXXXXX XX
XXX X. XXXXXXX
THE XXX AND XXXX XXXXXXX FAMILY TRUST
AND
XXXXX X. XXXXXX
DATED AS OF
MARCH 11, 1999
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of March 11, 1999, is by and
between Xxxxxxx Corporation, a Minnesota corporation (the "PARENT" or
"XXXXXXX"), Xxxxxxx Xxxxxxx, Inc. a Minnesota corporation (the "PURCHASER")
and Xxxxxxx Printing, Limited Partnership (the "SELLER"), Xxxxxxx Printing
Corp., a Massachusetts corporation and the sole general partner of the Seller
("XXXXXXX"), Xxxxxx X. Xxxxxxx XX ("X. XXXXXXX"), Xxx X. Xxxxxxx
("X.XXXXXXX"), The Xxx and Xxxx Xxxxxxx Family Trust under agreement dated
September 1, 1994 (the "Trust"), and Xxxxx X. Xxxxxx ("XXXXXX") (X. Xxxxxxx,
X.Xxxxxxx the Trust and Xxxxxx are hereinafter referred to as the "LIMITED
PARTNERS", which together with the General Partner are collectively referred
to as the "OWNERS").
A. The parties hereto wish to provide for the terms and conditions
upon which the Purchaser will purchase substantially all of the assets and
assume substantially all of the liabilities of the Seller's business (the
"BUSINESS").
B. The parties hereto wish to make certain representations,
warranties, covenants and agreements in connection with the purchase of the
assets and the Business and also to prescribe various conditions to such
transaction.
Accordingly, and in consideration of the representations, warranties,
covenants, agreements and conditions herein contained, the parties hereto
agree as follows:
1. PURCHASE OF ASSETS.
1.1. ASSETS TO BE PURCHASED.
(a) Upon the terms and subject to the conditions of this
Agreement, the Seller will sell, transfer, convey, assign and deliver to
the Purchaser, and the Purchaser will purchase, as a going concern, from
the Seller, at the Closing, all of the businesses, assets, properties,
goodwill and rights of the Seller, of every nature, kind and description,
tangible and intangible, real, personal or mixed, wheresoever located and
whether or not carried or reflected on the books and records of the
Seller, including, without limitation, real and personal property that is
now owned or leased by the Seller or in which the Seller has any right or
interest; franchises; all right, title and interest in and to the use of
Seller's corporate or entity names and any derivatives or combinations
thereof (in accordance with Section 4.16 herein), including, without
limitation, those listed in Exhibit 1.1(a) hereto; logos, trademarks,
trademark registrations and trademark applications or registrations
thereof, including the goodwill associated therewith; the goodwill of the
Seller's business; copyrights, copyright applications and copyright
registrations, patents and patent applications; rights under or pursuant
to licenses by or to the Seller; development and prototype hardware,
software, processes, formula, trade secrets, inventories and royalties,
including all rights to xxx for past infringements; leaseholds and other
interests in land, inventory (accumulated costs of jobs and supplies),
equipment,
machinery, furniture, fixtures, motor vehicles and supplies; cash,
money and deposits with financial institutions and others,
certificates of deposit, commercial paper, notes, evidences of
indebtedness, stocks, bonds and other investments; accounts
receivables; prepaid expenses; insurance policies, contracts, purchase
orders, customers, lists of customers and suppliers, sales
representative agreements, and all favorable business relationships,
causes of action, judgments, claims and demands of whatever nature;
telephone, telefax and telex numbers; all listings in all telephone
books and directories; all credit balances of or inuring to the Seller
under any state unemployment compensation plan or fund; employment
contracts (except for those employment contracts specifically excluded
herein); obligations of the present and former officers and employees
and of individuals and corporations; rights under joint venture
agreements or arrangements; files, papers and records relating to the
Seller's businesses and assets; and the assets as reflected on the
Latest Balance Sheet, with only such dispositions of such assets
reflected on the Latest Balance Sheet as shall have occurred in the
ordinary course of Seller' businesses between the date thereof and the
Closing and which are permitted by the terms hereof (the foregoing are
sometimes collectively called the "ASSETS").
(b) Notwithstanding the foregoing, the Seller will not sell,
transfer, convey, assign or deliver to the Purchaser, and the Purchaser
will not purchase from the Seller, the following assets (the "EXCLUDED
ASSETS"):
(i) the consideration delivered to the Seller pursuant
to this Agreement for the Assets;
(ii) the minute books (and any documents related to the
Seller's organization or foreign qualification contained in such
minute books), corporate seal and limited partnership records;
(iii) limited and general partnership interests or other
interests representing the ownership of the Seller;
(iv) amounts owing to the Seller by: (A) the Owners; and
(B) officers and directors of the Seller;
(v) all documentation pertaining to any liability of the
Seller not assumed by Purchaser;
(vi) all rights to seek contribution from any responsible
persons pursuant to Massachusetts General Laws Chapter 21E for the
costs Owners incur in their performance of any environmental
remediation, monitoring or other work;
(vii) the Seller Employment Agreements and the Seller
Severance Agreements as those terms are defined in Section 1.2(c)
herein;
(viii) cash equal to the amount of the reserves reflected
on the Latest Balance Sheet set forth in Section 1.3(a)(iii)
herein;
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(ix) the Key Man Life Insurance Policies issued by Mass
Mutual and Northwest Mutual insuring the life of Xxxxxx X. Xxxxxxx
XX;
(x) all amounts collected from customers or employees in
respect of Taxes relating to Tax Returns due after the date hereof
for which the Seller is responsible to remit such Taxes to an
Authority;
(xi) annuity contract with respect to Xxxx X. Xxxxxxx,
policy number 1,881,852;
(xii) a sufficient amount of cash to make the Seller's
required matching contribution to the 401(k) Plan (as defined in
Section 4.17) with respect to the payroll paid (or payable)
through the Closing Date, provided that Seller will make a good
faith estimate of this amount at least three (3) days prior to the
Closing Date and provide such estimate to Purchaser. Within ten
(10) days after the Closing Date Seller will provide Purchaser
with an accounting of such contribution actually made and shall
pay the excess, if any, of the estimated amount to Purchaser;
(xiii) the whole life insurance policy with respect to the
Life of Xxxxxx Xxxxxxxxx issued by Massachusetts Mutual Life
Insurance Company, Policy Number 8,598,301 in the amount of
$100,000; and
(xiv) the assets specifically described on Exhibit 1.1(b)
hereto.
1.2. LIABILITIES ASSUMED.
Upon satisfaction of all conditions to the obligations of the parties
contained herein (other than such conditions as have been made in accordance
with the terms hereof), the Purchaser will assume all liabilities of the Seller
(the "ASSUMED LIABILITIES"), including those set forth on Exhibit 1.2 (the
"LIABILITIES UNDERTAKING"), other than the Retained Liabilities (as defined
below). The Seller expressly understands and agrees that, except as expressly
assumed by the Purchaser, the Purchaser has not agreed to pay, will not be
required to assume and will have no liability or obligation, direct or indirect,
absolute or contingent, for the liabilities of the Seller or any respective
affiliates or associates, which are retained by Seller, which liabilities will,
as between the Seller and the Owners, on the one hand, and the Purchaser, on the
other hand, remain the sole responsibility of, and will be satisfied by, the
Seller (the "RETAINED LIABILITIES"), which Retained Liabilities are:
(a) any debt, liability or obligation of the Seller or any
affiliates or associates, direct or indirect, known or unknown, fixed,
contingent or otherwise, that (i) is unrelated to the Assets or the
Business; or (ii) relates to the Assets and is based upon or arises from
any act, omission, transaction, circumstance, sale of goods or services,
state of facts or other condition occurring or existing on or before the
Closing Date, and known by the Seller or the Owners and not disclosed to
the Purchaser in writing on or prior to the Closing Date (other than any
debt, liability or obligation of the Seller arising after the date of the
Latest Balance Sheet which is not required to be disclosed pursuant to
Section 2.8)
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except to the extent that the same was expressly assumed by the
Purchaser pursuant to the terms of the Liabilities Undertaking;
(b) (i) any obligation for Taxes related to the Seller, the
Business or any of the Assets for any Tax period or portion thereof
ending on or before June 30, 1994; (ii) any obligation for Taxes measured
by the income of the Seller or the Owners; and (iii) any Tax liability
relating to or arising out of the transfer of the Assets pursuant to this
Agreement;
(c) (i) any debt, liability or obligation, direct or indirect,
known or unknown, fixed, contingent or otherwise, based upon or arising
from any act, omission, transaction, circumstance, state of facts or
other condition occurring or existing on or before the Closing Date and
relating to (A) any collective bargaining agreement or any "employee
pension benefit plan" ("PENSION PLAN") as such term is defined in Section
3(2) of ERISA, including without limitation, any such plan that is
excluded from coverage by Section 4 of ERISA or is a "multi-employer
plan" within the meaning of Section 3(37) or 4001(a)(3) of ERISA, or (B)
any "employee welfare benefit plan" ("WELFARE PLAN") as such term is
defined in Section 3(1) of ERISA, including without limitation, any such
plan that is excluded from coverage by Section 4 of ERISA or is a Multi-
Employer Plan within the meaning of Section 3(37) of ERISA, or any
cafeteria plan subject to Section 125 of the Code, and any plan, policy,
practice or agreement that provides health, dental or life insurance
benefits whether insured or otherwise, to which the Seller is a party or
under which the Seller's employees, former employees or spouses or
dependents of employees or former employees is covered, including without
limitation, or any obligation to contribute to, or any obligation or
liability for any withdrawal liability arising in connection with, any
Multiemployer Plan attributable to participation therein by current or
former employees of the Seller as a result of this Agreement and the
transactions contemplated hereby or otherwise, (ii) any of the matters
described in Sections 2.16(a) (except for the five employment agreements
with the sales representatives) or 2.19 of the Disclosure Schedule, or
(iii) any employment agreements or arrangements between the Seller and
Xxxxxx X. Xxxxxxx, Xxxxx X. Xxxxxx and Xxx X. Xxxxxxx (collectively, the
"SELLER EMPLOYMENT AGREEMENTS"), or (iv) any severance agreements or
arrangements between the Seller and Xxx X. Xxxxxxxx and Xxxxxxx X. Xxxxxx
(collectively, the "SELLER SEVERANCE AGREEMENTS");
(d) (i) (A) any liability arising out of or related to the
management of wastes, byproducts or spent materials generated by the
Seller, any subsidiaries, former subsidiaries or affiliates; or (B) any
liability arising out of or related to any pollution or threat to human
health or the environment or violation of any Environmental Law that is
related to the Seller's management, use, control, ownership or operation
of the business of the Seller, any subsidiary, former subsidiaries or
affiliates, including without limitation any on-site or off-site
activities involving Environmentally Regulated Materials, that occurred,
existed, arises out of conditions or circumstances that occurred or
existed, or was caused, in whole or in part, on or before the Closing
Date, whether or not the pollution or threat to human health or the
environment or violation of any Environmental Law is described in the
Disclosure Schedule; and (ii) any Environmental Claim against
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any person or entity whose liability for such Environmental Claim the
Seller has or may have assumed or retained either contractually or by
operation of law;
(e) any debt, liability or obligation, direct or indirect,
known or unknown, fixed, contingent or otherwise owing by the Seller to
(i) any of the Owners; or (ii) officers or directors of the Seller other
than salary, reimbursement of approved business expenses or other
recurring payments due and payable in the ordinary course of business;
(f) any liability arising out of the litigation captioned
XXXXXXXX XXXX X. XXXXXXX PRINTING CO. and XXX XXXX X. XXXXXXX PRINTING
CO. Docket Nos. 96-026456 and 97-27636 currently pending in the Superior
Court of the Commonwealth of Massachusetts (the "JAIN LAWSUIT");
(g) the subordinated debt in the amount of $5,862,285 owed to
X. Xxxxxxx and DPC Disposition Trust as of February 28, 1999, plus any
interest accrued thereon between February 28, 1999 and the Closing Date;
and
(h) any amount due Xxxxxx Xxxxxxx, Incorporated, which amount
shall be paid by the Owners at the Closing.
At the Closing, the Seller will convey, transfer, assign and delegate, and the
Purchaser will accept and assume, those contracts, agreements and commitments
listed on the Liabilities Undertaking to be assumed by the Purchaser (the
"ASSUMED CONTRACTS").
1.3. PURCHASE PRICE.
(a) The total consideration to be paid by the Purchaser to the
Seller for the Assets (the "PURCHASE PRICE") will be an amount equal to:
(i) Forty-Five Million Dollars ($45,000,000); plus
(ii) the assumption by the Purchaser of the Assumed
Liabilities as of the Closing Date pursuant to the Liabilities
Undertaking referred to in Section 1.2 hereof; plus
(iii) the amount of the reserve as set forth on the Latest
Balance Sheet (as defined in Section 2.7) with respect to the Jain
Lawsuit; minus
(iv) the amounts owing to the Seller, if any, by (A) the
Owners, and (B) the officers and directors of the Seller as of the
Closing Date; minus
(v) the book value, if any, on the Latest Balance Sheet
of the Key Man Life Insurance policies issued by Mass Mutual and
Northwest Mutual insuring the life of Xxxxxx X. Xxxxxxx XX; and
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(vi) plus or minus, as the case may be, the amount by
which the accrual for vacation, holiday and sick pay as of the
Closing Date exceeds or is less than the amount actually paid to
the employees pursuant to Section 4.11(f) herein.
(b) At the Closing, the Purchaser will:
(i) pay the Seller, by wire transfer, immediately
available funds of Forty-five Million Dollars ($45,000,000) less
(A) the sum of the amounts set forth in Sections 1.3(b)(ii) and
(iii) and 1.3(a)(iv) and (v), plus (B) the sum of the amounts set
forth in Section 1.3(a)(iii), plus or minus, as the case may be,
(C) the amount described in Section 1.3(a)(vi), to a bank account
of the Seller pursuant to written instructions of the Seller given
to the Purchaser at least 48 hours prior to the Closing;
(ii) pay to Fleet Bank of Massachusetts, on behalf of
Seller, by wire transfer, immediately available funds of Five
Million Three Hundred Thousand Dollars ($5,300,000) plus all
interest accrued thereon to Closing pursuant to the terms of that
certain Credit Facility dated as of June 30, 1994 by and between
Seller and Fleet Bank (the "FLEET AGREEMENT");
(iii) deposit, on behalf of the Seller, an amount equal to
Two Million Dollars ($2,000,000) (the "ESCROW DEPOSIT") with U.S.
Bank, N.A. or another escrow agent mutually acceptable to the
Seller and the Purchaser (the "ESCROW AGENT") under the escrow
agreement (the "ESCROW AGREEMENT"), a copy of which is attached as
Exhibit 1.3(b) hereto, which Escrow Deposit will be retained and
disbursed by the Escrow Agent under the terms of the Escrow
Agreement;
(iv) execute and deliver to the Seller, the Liabilities
Undertaking; and
(v) pay the full amount of the revolving credit
borrowings under the Fleet Agreement.
1.4. ALLOCATION OF PURCHASE PRICE.
The Purchase Price will be allocated among the Assets in the manner which
is consistent with the requirements of Section 1060 of the Code and as set forth
on Exhibit 1.4 hereto; it being understood that such determination will be
binding on the Purchaser only for the purposes of U.S. Federal, state and local
taxation. The Purchaser, the Seller and the Owners will file all Tax Returns
and tax reports (including IRS Form 8594) in accordance with and based upon such
allocation and will take no position in any Tax Return, tax proceeding or tax
audit which is inconsistent with such allocation. If any portion of the Escrow
Deposit is paid to the Purchaser by the Escrow Agent under the terms of the
Escrow Agreement, the Purchaser and the Seller shall negotiate in good faith the
appropriate reduction in the Purchase Price allocated to any Asset pursuant to
the provisions in Exhibit 1.4, taking into account the reason for the payment.
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1.5. CLOSING.
Unless this Agreement has been terminated and the transactions
contemplated have been abandoned pursuant to Article 7 hereof, a closing (the
"CLOSING") will be held on March 30, 1999 at 9:00 a.m., Minneapolis, Minnesota
local time or at such other time as the parties may agree upon (the "CLOSING
DATE"); provided, however, that if any of the conditions provided for in
Articles 5 and 6 hereof have not been satisfied or waived by such date, then the
party to this Agreement which is unable to satisfy such condition or conditions,
despite the best efforts of such party, will be entitled to postpone the Closing
by notice to the other parties until such condition or conditions will have been
satisfied (which such notifying party will seek to cause to happen at the
earliest practicable date) or waived, but in no event will the Closing occur
later than April 30, 1999 (the "TERMINATION DATE"). The Closing will be held at
the offices of Xxxxxxxx, Xxxxxxx & Xxxxxxx in Boston, Massachusetts or at such
other place as the parties may mutually agree, at such time as the parties may
agree, at which time and place the documents and instruments necessary or
appropriate to effect the transactions contemplated herein will be exchanged by
the parties.
1.6. INSTRUMENTS OF TRANSFER TO PURCHASER.
(a) At the Closing, the Seller will deliver to the Purchaser
such bills of sale, endorsements, assignments, deeds and other good and
sufficient instruments of conveyance and transfer, in form and substance
reasonably satisfactory to the Purchaser and its counsel, as will be
required to vest in the Purchaser title to the Assets, including without
limitation:
(i) a cashier's or certified check drawn by the Seller
to the order of the Purchaser in the aggregate amount of all of
the Seller's cash on hand and in banks less an amount equal to all
uncleared checks which have been drawn by the Seller prior to the
Closing in payment of Assumed Liabilities (the Seller agree to
retain in such banks an amount equal to such uncleared checks
until such checks are cleared) or, at the Purchaser's option, an
assignment of all of the Seller' bank accounts in form and
substance satisfactory to the Purchaser,
(ii) bills of sale executed by the Seller vesting in the
Purchaser good and merchantable or marketable title, as the case
may be, to all of the Assets in the form attached as Exhibit 1.6
hereof;
(iii) a Massachusetts quit claim deed, FIRPTA Affidavit
and such other documents necessary to vest marketable title in the
Real Property in Purchaser;
(iv) appropriate endorsements and assignments of the
contracts, licenses, agreements, permits, plans, commitments and
other binding arrangements included in the Assets;
(v) all data relating to the Assets, property, goodwill
and business included in the Seller' business; and
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(vi) all copies of the source code and object code and
all documentation relating thereto for all computer software
programs included in the Assets.
(b) The Seller will take all other actions necessary to put the
Purchaser in actual possession and operating control of the Assets.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE OWNERS.
The Seller hereby represents and warrants to the Purchaser as of the date
hereof and each Owner represents and warrants to the Purchaser, severally and
not jointly, as to matters in Sections 2.3 and 2.4 hereof as follows:
2.1. DISCLOSURE SCHEDULE.
The disclosure schedule delivered simultaneously herewith by the Seller
and labeled as the disclosure schedule (the "DISCLOSURE SCHEDULE") is divided
into sections which correspond to the sections of this Article 2. The
Disclosure Schedule is accurate and complete. Nothing in the Disclosure
Schedule will be deemed adequate to disclose an exception to a representation or
warranty made herein, unless the Disclosure Schedule identifies the exception
with reasonable particularity in a manner which reasonably puts Purchaser on
notice of the intended exception to the representation or warranty described.
Disclosures in any subsection of the Disclosure Schedule will not constitute
disclosure for purposes of any other subsection and other section of this
Agreement or any exhibit to or other writing which is designated herein as being
part of this Agreement, unless (i) it is reasonably clear from such disclosure
of the applicability to some other section, or (ii) such disclosure specifically
cross-references such other section or subsection.
2.2. CORPORATE ORGANIZATION.
(a) The Seller is a limited partnership duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts with requisite power and authority to carry on its business
as it is now being conducted and to own, operate and lease its properties
and assets. The Seller is duly qualified or licensed to do business as a
foreign limited partnership in good standing in every other jurisdiction
in which the character or location of the properties and assets owned,
leased or operated by it or the conduct of its business requires such
qualification or licensing. The Disclosure Schedule contains a list of
all jurisdictions in which the Seller is qualified or licensed to do
business. The Seller has provided the Purchaser with complete and
correct copies of the Seller's limited partnership agreement. The Seller
does not own (and has not at any time since June 30, 1994) of record or
beneficially any equity interest of any corporation, partnership, limited
liability company, joint venture or other entity.
(b) Xxxxxxx is a corporation duly organized, validly existing
and in good standing under the laws of the Commonwealth of Massachusetts,
has the full corporate power and authority to carry on its business as it
is now being conducted and to own, lease and operate its properties and
assets.
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2.3. CAPITALIZATION.
(a) All shares of capital stock of Xxxxxxx are owned by X.
Xxxxxxx, X.Xxxxxxx and Xxxxxx free and clear of any lien, security
interest, pledge, charge, claim, option, right to acquire, restriction on
transfer or encumbrance of any nature whatsoever.
(b) The amount and type of limited partnership interests of the
Seller outstanding as of the date of this Agreement are set forth on the
Disclosure Schedule. All issued and outstanding limited partnership
interests of the Seller are duly authorized, validly issued, and are
without, and were not issued in violation of, preemptive rights. Except
as set forth on the Disclosure Schedule, all limited partnership
interests of the Seller are owned by the Owners free and clear of any
lien, security interest, pledge, charge, claim, option, right to acquire,
restriction on transfer or encumbrance of any nature whatsoever. Except
as set forth on the Disclosure Schedule: (i) there are no partnership
interests of the Seller outstanding or any interests or other rights
convertible into or exchangeable for such interests; (ii) there are no
outstanding rights to purchase or acquire any partnership interests of
the Seller or any interests convertible into or exchangeable for such
partnership interests; and (iii) there are no contracts, commitments,
understandings, arrangements or restrictions by which the Seller is bound
to issue or to acquire any additional partnership interests or other
rights to purchase or acquire any partnership interests of the Seller or
any interests convertible into or exchangeable for such membership
interests.
2.4. AUTHORIZATION.
The Seller and Xxxxxxx have full corporate or partnership, as the case
may be, power and authority to enter into this Agreement and to carry out the
transactions contemplated herein. X. Xxxxxxx, X.Xxxxxxx and Xxxxxx, and each of
them, have the legal capacity to enter into this Agreement and to carry out the
transactions contemplated herein, including without limitation, the legal
capacity to execute, deliver and perform the agreements or contracts, if any,
required by Article 5 to be executed and delivered by any of them as a condition
to the Closing. With respect to the Trust, the trustee executing this Agreement
on behalf of the Trust, as trustee, has full power and authority to enter into
this Agreement and to carry out the transactions contemplated herein. The
Seller, Xxxxxxx and the Owners have taken all action required by law, Xxxxxxx'
articles of organization and Bylaws, the Seller's limited partnership agreement,
the Trust's declaration of trust and otherwise to authorize the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated herein. This Agreement has been duly and validly
executed and delivered by the Seller and Xxxxxxx and no other corporate or
partnership action, as the case may be, is necessary. This Agreement has been
duly and validly executed by the Limited Partners. This Agreement is the valid
and binding legal obligation of the Seller and the Owners, enforceable against
them in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other similar laws of applicability relating to
or affecting creditors' rights and general principles of equity.
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2.5. NON-CONTRAVENTION.
Except as set forth in the Disclosure Schedule, neither the execution,
delivery and performance of this Agreement nor the consummation of the
transactions contemplated herein will: (i) violate or be in conflict with any
provision of the articles of organization or Bylaws of Xxxxxxx; (ii) violate or
be in conflict with any provision of the limited partnership agreement of the
Seller; (iii) be in conflict with, or constitute a default, however defined (or
an event which, with the giving of due notice or lapse of time, or both, would
constitute such a default), under, or cause or permit the acceleration of the
maturity of, or give rise to any right of termination, cancellation, imposition
of fees or penalties under any debt, note, bond, lease, mortgage, indenture,
license, obligation, contract, commitment, franchise, permit, instrument or
other agreement or obligation to which the Seller is a party or by which the
Seller or any of the Seller's properties or assets is bound; (iv) result in the
creation or imposition of any mortgage, pledge, lien, security interest,
conditional or installment sales agreement, encumbrance, claim, easement, right
of way, tenancy, covenant, encroachment, restriction or charge of any kind of
nature (whether or not of record) (a "LIEN"), other than (A) mechanics',
carriers', workers' or other like liens arising in the ordinary course of
business; (B) minor imperfections of title which do not individually or in the
aggregate, impair the continued use and operation of the real property assets
and fixtures to which they relate in the operation of the Business as currently
conducted; and (C) liens for current taxes not yet due and payable ("PERMITTED
LIENS"), upon the Assets, under any Assumed Contract or any debt, obligation,
contract, agreement or commitment to which the Seller is a party or by which the
Seller or any of the Assets is bound; or (v) violate any statute, treaty, law,
judgment, writ, injunction, decision, decree, order, regulation, ordinance or
other similar authoritative matters (referred to herein individually as a "LAW"
and collectively as "LAWS") of any foreign, federal, state or local governmental
or quasi-governmental, administrative, regulatory or judicial court, department,
commission, agency, board, bureau, instrumentality or other authority (referred
to herein individually as an "AUTHORITY" and collectively as "AUTHORITIES").
2.6. CONSENTS AND APPROVALS.
Except for filings under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, and the rules and regulations promulgated thereunder (the
"HSR ACT") or otherwise as set forth in the Disclosure Schedule, with respect to
the Seller and the Owners, no consent, approval, order or authorization of or
from, or registration, notification, declaration or filing ("CONSENT") with any
individual or entity, including without limitation any Authority, is required in
connection with the execution, delivery or performance of this Agreement by the
Seller or the Owners or the consummation by the Seller and the Owners of the
transactions contemplated herein.
2.7. FINANCIAL STATEMENTS.
The Disclosure Schedule contains true and complete copies of audited
balance sheets of the Seller as of December 31, 1996, 1997 and 1998, and the
related statements of operations (or income or loss), changes in cash flow for
each of the respective fiscal years then ended, and the report thereon of Xxxxxx
Xxxxxxxx, LLP, independent certified public accountants and the
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unaudited balance sheet of the Seller as of January 31, 1999, and the related
statements of operations (or income or loss), changes in cash flow for the
year then ended. The balance sheet as of January 31, 1999 is referred to
herein as the "LATEST BALANCE SHEET." Except as disclosed therein, the
foregoing financial statements (i) are in accordance with the books and
records of the Seller and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis ("GAAP"); (ii)
fairly present the financial position of the Seller as of the respective
dates thereof, and the results of operations (or income or loss) and changes
in cash flow for the periods then ended, all in accordance with GAAP; and
(iii) with respect to the Latest Balance Sheet, the absence of footnotes and
normal year-end adjustments.
2.8. ABSENCE OF UNDISCLOSED LIABILITIES.
To the Seller's Knowledge, except as and to the extent (i) reflected
on or reserved for in the Latest Balance Sheet, (ii) set forth on the
Disclosure Schedule, (iii) related to the purchase of paper, ink or
consumables in the ordinary course of business after the date of the Latest
Balance Sheet, or (iv) incurred in the ordinary course of business after the
date of the Latest Balance Sheet and not exceeding $50,000 in amount in any
single case, the Seller does not have any debt, liability or obligation,
known or unknown, secured or unsecured, whether accrued, absolute,
contingent, unasserted or otherwise, of any nature whatsoever, including
without limitation any foreign or domestic tax liabilities or deferred tax
liabilities incurred in respect of or measured by the Seller's income, or any
other debts, liabilities or obligations relating to or arising out of any
act, omission, transaction, circumstance, sale of goods or services, state of
facts or other condition which occurred or existed on or before the date
hereof, whether or not known, due or payable (collectively "LIABILITY").
Seller is not subject to any obligation or requirement to provide funds to or
make any investment (in the form of a loan, capital contribution or
otherwise) in any person or entity.
2.9. ABSENCE OF CERTAIN CHANGES.
Except as set forth in the Disclosure Schedule, since the date of the
Latest Balance Sheet, the Seller has owned and operated the Assets in the
ordinary course of business and consistent with past practice. Without
limiting the generality of the foregoing, subject to the foregoing exceptions:
(a) the Seller has not experienced any change which has had a
Material Adverse Effect or experienced any event (excluding general
market and industry conditions as to which Purchaser and Seller are each
aware) or failed to take any action which reasonably could be expected to
result in a Material Adverse Effect on the Seller;
(b) the Seller has not suffered any material loss, damage,
destruction of property or Assets or other casualty to property or Assets
(whether or not covered by insurance) which has or would have a Material
Adverse Effect;
(c) the Seller has not suffered any loss of officers,
directors, partners, employees, dealers, distributors, independent
contractors, customers or suppliers which
11
had or may reasonably be expected to result in a Material Adverse Effect
on the Seller; and
(d) no event has taken place which if it had occurred following
the date hereof would constitute a violation of Section 4.1 hereof.
2.10. ASSETS.
(a) Except as set forth in the Disclosure Schedule, the Seller
has good and marketable (or merchantable, as the case may be) title to
all of the Assets, free and clear of any Lien, other than Permitted
Liens.
(b) The Seller has full right and power to, and at the Closing
will, convey to the Purchaser at Closing good title to all of the Assets,
free and clear of any Lien, other than Permitted Liens.
(c) The machinery, equipment, vehicles and other personal
property used by the Seller in the Business are in good operating
condition and repair, normal wear and tear excepted, and fit for the
intended purposes thereof. Such machinery, equipment, vehicles and other
personal property has been maintained in accordance with Seller's
standard maintenance procedures and according to such procedures no
material maintenance, replacement or repair has been deferred or
neglected.
(d) To the Seller's Knowledge, except as set forth on the
Disclosure Schedule, all real properties included in the Latest Balance
Sheet or acquired after the date thereof by the Seller, and all real
properties leased by the Seller (collectively, the "REAL PROPERTY"), are
free from any structural defects, in good condition and repair, with no
material maintenance, repair or replacement having been deferred or
neglected, suitable for the intended use, and free from other material
defects, normal wear and tear accepted. Except as set forth on the
Disclosure Schedule, each such Real Property and its present use conform
in all respects to all occupational, safety or health, zoning, planning,
subdivision, platting and similar Laws. Except as set forth on the
Disclosure Schedule, all public utilities necessary for the use and
operation of any facilities on the aforesaid real properties are
available for use or access at such properties and there is no legal or
physical impairment to free ingress or egress from any of such facilities
or Real Properties. The legal description of all Real Property is set
forth on the Disclosure Schedule. With respect to the leased Real
Property, the Disclosure Schedule includes termination/renewal provisions
of such leasehold interest, and the amount of rent and/or royalty to be
paid under the terms of such leases. All such leasehold interests are
valid and in full force and effect and enforceable in accordance with
their terms, subject to the effect of applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance, and other
laws affecting the rights of creditors generally or the availability of
specific performance, injunctive relief and other equitable remedies.
Seller is not, and to Seller's Knowledge no other party is, in violation,
breach or default, of or under such leasehold interest. No such
leasehold interests contain any provision that would be triggered or
cause a breach or a right to terminate such leasehold interests upon a
change
12
in control (or change in ownership) of the lessee. The lease by and
between Seller and CStone-Boston, Inc., successor in interest to
Lincoln Summer Realty Trust dated as of July 12, 1995, for the real
property located at 000 Xxxxxx Xxxxxx (the "BOSTON LEASE") is freely
assignable by Seller to Purchaser without the consent of the landlord
or any other party. The lease by and between Seller and Xxxx 00xx
Xxxxxx Limited Partnership, successor in interest to Xxxxxxx-La Cholla
Joint Venture for the real property located at 00 Xxxx 00xx Xxxxxx,
dated as of January 25, 1995 (the "NEW YORK LEASE") is freely
assignable by the Seller without the consent of the landlord or any
other party as a result of the transactions contemplated by this
Agreement so long as Xxxxxxx has a net worth at least equal to or in
excess of Seller's net worth and provided further that Xxxxxxx
executes a recordable assignment agreement, and delivers its financial
statements to the landlord evidencing such net worth. In the case of
both the Boston Lease and the New York Lease, upon such assignment to
Purchaser, Purchaser will be entitled to all of the benefits of each
such lease and the terms of each such lease shall be binding upon each
respective landlord.
(e) The Assets constitute all of the property and assets, real,
personal and mixed, tangible and intangible, presently used to carry on
the Business of the Seller, and the Assets are adequate to carry on the
Business of the Seller as presently conducted.
(f) Neither the Seller nor any of the Owners are a foreign
person and are not controlled by a foreign person, as the term foreign
person is defined in Section 1445(f)(3) of the Code.
2.11. INVENTORIES.
Except as set forth in the Disclosure Schedule, all accumulated costs on
jobs in progress as of the date of the Latest Balance Sheet are, and as of the
Closing Date will be, valued at the lower of cost or market. Except as set
forth on the Disclosure Schedule, to the Seller's Knowledge, all inventory and
other supplies of the Seller used in the Business (including, without
limitation, paper, ink and chemicals) (the "INVENTORY"): (i) are of a quality
and quantity usable in the ordinary course of the Business, and the present
quantities of Inventory of the Seller used in the Business are reasonable; and
(ii) meet in the aggregate the stricter of industry or Seller specifications
applicable to such Inventory.
2.12. RECEIVABLES AND PAYABLES
(a) The Disclosure Schedule contains a summary aging report as
of January 31, 1999 of all of the receivables of the Seller included in
the Assets. Except as set forth on the Disclosure Schedule, (i) the
Seller has good right, title and interest in and to the trade accounts
receivable and notes receivable included in the Assets; (ii) none of such
receivables are subject to any Lien, other than Permitted Liens; (iii)
all of the trade accounts receivable and notes receivable owing to the
Seller constitute valid and enforceable claims arising from bona fide
transactions in the ordinary course of business, and there are no known
claims, refusals to pay or other rights of set-off against any thereof;
(iv) except as set forth on the Disclosure Schedule, no account or note
debtor is
13
delinquent in payment by more than 90 days; (v) the aging schedule of
the trade accounts receivable and notes receivable accounts of the
Seller attached to the Disclosure Schedule is complete and accurate;
and (vi) the reserve established by the Seller on the Latest Balance
Sheet has been established in accordance with GAAP and, to the
Seller's Knowledge, is adequate to cover any doubtful accounts.
(b) The Disclosure Schedule contains a listing of all trade
accounts payable and notes payable of the Seller as of the date specified
thereon. All such trade accounts payable and notes payable arose from
bona fide transactions in the ordinary course of the Seller's Business
and, except as set forth on the Disclosure Schedule, no such account
payable or note payable is delinquent by more than 90 days in its
payment.
2.13. INTELLECTUAL PROPERTY RIGHTS.
(a) The Disclosure Schedule contains a listing of all (i)
patents, patent applications (collectively the "PATENTS"), (ii)
copyrights (the "COPYRIGHTS"), (iii) tradenames, registered and common
law trademarks, trademark applications (the "TRADEMARKS"), (iv) service
marks, service xxxx applications (the "SERVICE MARKS"), and (v) computer
programs and other computer software used or to the Seller's Knowledge
necessary in connection with the Assets and for the conduct of the
Business of the Seller (the Patents, Copyrights, Trademarks, Service
Marks, together with trade secrets, plans and specifications, inventions,
know-how, technology, proprietary processes and formulae (the "TRADE
SECRETS") used or to the Seller's Knowledge necessary in connection with
the Assets and for the conduct of the Business of the Seller are
collectively referred to as "INTELLECTUAL PROPERTY RIGHTS"). All issued
Patents and registered Copyrights, Trademarks and Service Marks are
collectively referred to as the "REGISTERED INTELLECTUAL PROPERTY
RIGHTS." The Intellectual Property Rights are sufficient to conduct the
Business as presently conducted.
(b) Except as set forth on the Disclosure Schedule, the Seller
owns, has the unrestricted right to use and has sole and exclusive
possession of and have good and valid title to, or sufficient license or
other rights to, all of the Intellectual Property Rights, free and clear
of all Liens.
(c) All Registered Intellectual Property Rights are in
compliance in all material respects with formal legal requirements
(including the payment of filing, examination and maintenance fees and
proofs of working or use), are valid and enforceable and are not subject
to any maintenance fees or taxes or actions falling due within 90 days
after the Closing Date. All Patents are valid and enforceable and no
Patents have been or are now involved in any interference, reissue,
reexamination, opposition, declaratory judgment or other invalidating
proceeding, nor, to the Seller's Knowledge is any such action threatened
with respect to any of the Patents. To Seller's Knowledge, no
application for a potentially infringing patent has been filed and no
potentially infringing patent has been issued. To Seller's Knowledge, no
Trademarks have been or are involved in any opposition, invalidation or
cancellation proceeding and, there is no basis for the commencement of
any such proceeding. To the Seller's
14
Knowledge, the Trademarks are valid and enforceable and, to Seller's
Knowledge, no person holds any infringing or potentially infringing
trademark and, to the Seller's Knowledge, no application for any
infringing or potentially infringing trademark has been made.
(d) A copy of all documentation relating to the Trade Secrets
have been furnished to the Purchaser. Such documentation is current,
accurate and complete in all material respects. To the Seller's
Knowledge, the Trade Secrets are not part of the public domain or
literature nor have they been used, divulged or appropriated for the
benefit of any person or entity other than the Seller or to the detriment
of either of the Seller. The Seller has taken such measures and
precautions to protect the secrecy, confidentiality and value of the
Trade Secrets as it has deemed appropriate.
(e) Except as set forth on the Disclosure Schedule, the use of
all Intellectual Property Rights necessary or required for the conduct of
the Business of the Seller as presently conducted does not and , to the
Seller's Knowledge, will not infringe or violate any trade secrets, plans
and specifications, patents, copyrights, tradenames, registered and
common law trademarks, trademark applications, service marks, service
xxxx applications, computer programs and other computer software,
inventions, know-how, technology, proprietary processes and formulae or
other intellectual property rights of any other person or entity (the
"THIRD PARTY INTELLECTUAL PROPERTY RIGHTS"). The Seller is not, to the
Seller's Knowledge, using any confidential information or trade secrets
of others.
(f) All agreements relating to licenses of Intellectual
Property Rights granted by or to the Seller are set forth on the
Disclosure Schedule. All such licenses set forth on the Disclosure
Schedule are in good standing, valid and effective in accordance with
their respective terms and there is not, under any of such licenses, any
existing default or event of default (or event which with notice or lapse
of time, or both, would constitute a default, or would constitute a basis
for a claim of force majeure or other claim of excusable delay or
non-performance), in each case by either the Seller or by any other party
thereto. There are no outstanding and, to the Seller's Knowledge, no
threatened disputes or disagreements with respect to any such agreement.
(g) Except as set forth on the Disclosure Schedule, the Seller
is not obligated or under any Liability whatsoever to make any payments
by way of royalties, fees or otherwise to any owner of, licensor of, or
other claimant to, any Intellectual Property Rights or Third Party
Intellectual Property Rights.
(h) Except as set forth on the Disclosure Schedule, all
employees, contractors and consultants of the Seller have executed
written agreements with the Seller which assign to the Seller all rights
to any inventions, improvements, discoveries or information. No
employee, or, to Seller's Knowledge any contractor or consultant of the
Seller, have entered into any agreement which restricts or limits in any
way the scope or type of work in which such employee, contractor or
consultant may be engaged or requires such employee, contractor or
consultant to transfer, assign or disclose information concerning such
employee's, contractor's or consultant's work to anyone other than the
Seller.
15
(i) Except as set forth on the Disclosure Schedule, to the
Seller's Knowledge the software, hardware, and firmware used by Seller
and by its suppliers, vendors and customers is Year 2000 Compliant. The
term "YEAR 2000 COMPLIANT" as used in the preceding sentence, means that
no operational, financial, data transmission, communication or process is
materially affected or materially interrupted by dates prior to, during
or after the Year 2000, and in particular, without prejudice to the
generality of the foregoing that:
(i) no value for current date will cause any
interruption in operation;
(ii) all manipulation of time related data will produce
the required results for all valid date values prior to, during
and after the Year 2000;
(iii) if the date elements in interfaces and data storage
specify the century, they will permit specifying the correct
century either explicitly or by unambiguous algorithms or
inferencing rules; and where any date element is represented
without a century, the correct century shall be unambiguous for
all manipulations involving that element; and
(iv) Year 2000 must be recognized as a leap year.
2.14. LITIGATION.
Except as set forth in the Disclosure Schedule, (i) there is no legal,
administrative, arbitration, or other proceeding, suit, claim, judgment, decree,
decision, injunction, writ or order pending or noticed, and (ii) to the Seller's
Knowledge, there is no investigation, review or audit of any kind (including
without limitation a proceeding, suit, claim or action, or an investigation,
review or audit, involving any environmental Law or matter), pending or
scheduled, or any threatened legal, administrative arbitration, or other suit,
claim, judgment, decree, decision, injunction, writ or order, in any case
involving as a party, the Seller, its assets, properties or business or its
officers, directors, managers, agents or employees (but only in their capacity
as such), whether at law or in equity, before or by any person or entity or
Authority, or which questions or challenges the validity of this Agreement or
any action taken or to be taken by the parties hereto pursuant to this Agreement
or in connection with the transactions contemplated herein.
2.15. TAX MATTERS.
(a) The Seller has properly completed and duly filed on a
timely basis (subject to any valid extensions filed by the Seller) and in
form and substance that is, in all material respects, correct, all Tax
Returns required to be filed on or prior to the date hereof with respect
to Taxes imposed upon the Seller relating to its business and operations.
Any such Tax Returns filed by the Seller after the date hereof, to the
extent they include taxable periods ending before the Closing Date, will
conform with the provisions of this subsection 2.15(a).
16
(b) All Taxes imposed upon the Seller with respect to all
taxable periods ending on or before the Closing Date, to the extent that
such Taxes have become due, have been paid or will be paid on or before
the Closing Date. There are no Liens for such Taxes upon any property or
assets of the Seller. The Seller has withheld and remitted or will
withhold and remit all Taxes required to be withheld and remitted by it
on or before the Closing Date with respect to all taxable periods or
portions of taxable periods ending on or before the Closing Date. The
Purchaser and the Seller will cooperate in the filing of Tax Returns for
periods which include the Closing Date but are due after the Closing
Date. Seller shall be responsible for the filing of all such Tax Returns
and the payment of all Taxes shown due thereon.
(c) No Tax Returns of the Seller (or the Owners with respect to
items of income or loss of the Seller) whether federal, state, local or
foreign, have been examined by the Internal Revenue Service or any
similar state, local or foreign Authority. There are no pending
examinations of any Tax Returns of the Seller (or the Owners with respect
to items of income or loss of the Seller) currently being made by any
Authority, nor has there been any written or oral notification to the
Seller (or the Owners with respect to items of income or loss of the
Seller) of any intention to examine any such Tax Return, and there are no
outstanding agreements or waivers extending the statutory period of
limitations applicable to any such Tax Return for any period.
(d) To the Seller's Knowledge, no Owner has taken and the
Seller has not taken any action that would or may cause the Seller not to
be treated as a "partnership" for federal, state or local tax purposes.
Except as set forth on the Disclosure Schedule, since its inception to
and including the Closing Date, the Seller has not incurred and will not
incur or become liable for the payment of any entity-level income Tax.
2.16. BENEFIT PLANS.
(a) Section 2.16 of the Disclosure Schedule lists each employee
benefit, incentive compensation, deferred compensation, equity-based
compensation or perquisite plan, policy or practice covering current or
former employees of Seller or their spouses, dependents or beneficiaries
(a "PLAN"). The Seller has delivered to Purchaser a complete copy of any
severance arrangement maintained in effect for any current employees and
all documents related to such arrangement. The Disclosure Schedule lists
the name of each individual who, immediately prior to the Closing, was
covered or eligible to be covered under any severance arrangement
maintained by Seller. With respect to each other Plan, Seller has made
available to Purchaser the current Plan document or a complete and
accurate description of the Plan.
(b) Seller does not and will not have any liability arising
directly or indirectly under Section 412 of the Internal Revenue Code of
1986, as amended (the "CODE") or Section 302 or Title IV of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
17
(c) Seller does not and will not have any liability arising
directly or indirectly to or with respect to any "multi-employer plan"
within the meaning of Section 4001(a)(3) of ERISA.
(d) Seller does not and will not have any liability arising
directly or indirectly in connection with any failure of Seller or any
"person" within the meaning of Section 7701(a)(1) of the Code, that
together with the Seller is considered a single employer pursuant to
Section 414(b), (c), (m) or (o) of the Code or Section 3(5) or 4001(b)(1)
of ERISA, to comply with Section 4980B of the Code or Part 6 of Subtitle
B of Title I of ERISA ("COBRA"). The Disclosure Schedule lists the name
of each individual who as of the date of the Disclosure Schedule, and as
updated immediately prior to the Closing, was covered or eligible to be
covered under any group health Plan maintained by the Seller pursuant to
the group health plan continuation requirements of COBRA.
(e) Nothing has occurred or failed to occur with respect to any
Plan which will result in any liability to Purchaser or any affiliate of
Purchaser other than a liability expressly assumed pursuant to this
Agreement.
2.17. CONTRACTS AND COMMITMENTS; NO DEFAULT.
(a) The Disclosure Schedule contains an accurate and complete
list of:
(i) All real property owned by the Seller included in
the Assets or in which the Seller has a leasehold or other
interest and which is included in the Assets or which is used by
the Seller in connection with the operation of the Business. A
true and correct copy of each lease, sublease, license, or any
other instrument under which the Seller claims or holds such
leasehold or other interest or right to the use thereof or
pursuant to which the Seller has assigned, sublet or granted any
rights therein, has been delivered to the Purchaser.
(ii) All machinery, tools, equipment, motor vehicles and
other tangible personal property (other than inventory and
supplies), owned, leased or used by the Seller and included in the
Assets, except for items having a cost of less than $5,000. The
Seller has provided the Purchaser with either a copy of or a
summary description of all leases and Liens relating thereto,
identifying the parties thereto, the rental or other payment
terms, expiration date and cancellation and renewal terms thereof.
(iii) All contracts, agreements and commitments, whether
or not fully performed, in respect of the issuance, sale or
transfer of capital stock bonds, membership interests or other
securities of the Seller or pursuant to which the Seller has
acquired any substantial portion of its business or assets.
(iv) All contracts, agreements, commitments or
understandings that restrict the Seller from carrying on its
businesses or any part thereof anywhere in the world or from
competing in any line of business with any person or entity.
18
(v) All purchase or sale contracts or agreements that
call for aggregate purchases or sales in excess over the course of
such contract or agreement of $5,000 or which continues for a
period of more than twelve months (including without limitation
periods covered by any option to renew or extend by either party)
which is not terminable on 60 days' or less notice without cost or
other Liability at or any time after the Closing.
(vi) Any contract, commitment, agreement or arrangement
with any "disqualified individual" (as defined in Section 280G(c)
of the Code) which contains any severance or termination pay
liabilities which would result in a disallowance of the deduction
for any "excess parachute payment" (as defined in Section
280G(b)(1) of the Code) under Section 280G of the Code.
(vii) All Assumed Contracts.
(viii) The names and current annual salary rates of all
employees of the Seller, showing separately for each such person
the amounts paid or payable as salary, bonus payments and any
indirect compensation for the year ended December 31, 1998.
(ix) The names of all consultants (other than
accountants, lawyers and other professional advisors) used by the
Seller for the year ended December 31, 1998 who received
compensation of at least $20,000, including the compensation paid
to each such consultant and a brief description of the services
provided by such consultants.
(x) The names of all of the officers, directors and
partners of the Seller.
(xi) All collective bargaining agreements, employment and
consulting agreements, executive compensation plans, bonus plans,
deferred compensation agreements, employee option or purchase
plans, other employee arrangements or commitments, whether or not
legally binding, including without limitation, holiday, vacation,
Christmas and other bonus practices, to which either of the Seller
are a party or is bound or which relates to the operation of the
Business.
(b) The Assumed Contracts and all other contracts, agreements,
leases, licenses and commitments required to be listed on the Disclosure
Schedule (other than those which have been fully performed), are valid
and binding, enforceable in accordance with their respective terms in all
material respects, except as enforcement might be limited by bankruptcy
and other laws related to creditors' rights and principles of equity, and
are in full force and effect. Except as otherwise specified in the
Disclosure Schedule, the Assumed Contracts are validly assignable to the
Purchaser without the consent of any other party. Except as disclosed in
the Disclosure Schedule, none of the payments required to be made under
any Assumed Contract has been prepaid more than 30 days prior to the due
date of such payment thereunder. Except as set forth in the Disclosure
19
Schedule, the Seller is not in material breach, violation or default,
however defined, in the performance of any of its obligations under any
Assumed Contract or any other contract, agreement, lease, license or
commitment required to be listed on the Disclosure Schedule, and no facts
and circumstances exist which, whether with the giving of due notice,
lapse of time, or both, would constitute such a material breach,
violation or default thereunder or thereof. To the Seller's Knowledge,
none of the Assumed Contracts is, either when considered singly or in the
aggregate with others, likely, either before or after the Closing, to
result in a Material Adverse Effect on the Business. Except as set forth
in the Disclosure Schedule, none of the Assumed Contracts is subject to
renegotiation with any government body. True and complete copies of all
of the Assumed Contracts (together with any and all amendments thereto)
have been delivered to the Purchaser.
2.18. ORDERS, COMMITMENTS AND RETURNS.
Except as set forth in the Disclosure Schedule, all accepted and
unfulfilled orders for the sale of products and the performance of services
entered into by the Seller and all outstanding material contracts or material
commitments for the purchase of supplies, materials and services were made in
bona fide transactions in the ordinary course of business. To the Seller's
Knowledge, the Seller is not subject to any outstanding sales or purchase
contracts, commitments or proposals which is anticipated to result in a loss
upon completion or performance thereof.
2.19. LABOR MATTERS.
Except as set forth in the Disclosure Schedule:
(a) to the Seller's Knowledge, the Seller is and has been in
compliance in all material respects with all applicable Laws respecting
employment and employment practices, terms and conditions of employment
and wages and hours, including without limitation any such Laws
respecting employment discrimination and occupational safety and health
requirements, and has not and is not engaged in any unfair labor
practice;
(b) to the Seller's Knowledge, there is no unfair labor
practice complaint against the Seller pending or threatened before the
National Labor Relations Board or any other comparable Authority;
(c) there is no labor strike, dispute, slowdown or stoppage
actually pending or to the Seller's Knowledge, threatened against or
directly affecting the Seller;
(d) no labor representation question exists respecting the
employees of the Seller and there is not pending or to the Seller's
Knowledge, threatened any activity intended or likely to result in a
labor representation vote respecting the employees of the Seller;
(e) to Seller's Knowledge, during the last twelve months, there
has been no attempt by either employees of the Seller, any labor
organization, or others to organize the employees of Seller into a labor
union or to provide for other labor representation;
20
(f) no grievance or any arbitration proceeding arising out of
or under collective bargaining agreements is pending and no claims
therefor exist or, to the Seller's Knowledge, have been threatened;
(g) no collective bargaining agreement is binding and in force
against the Seller or currently being negotiated by the Seller;
(h) the Seller has not experienced any significant work
stoppage;
(i) the Seller is not delinquent in payments to any persons for
any wages, salaries, commissions, bonuses or other direct or indirect
compensation for any services performed by them or amounts required to be
reimbursed to such persons, including without limitation any amounts due
under any Plan; and
(j) to Seller's Knowledge, upon termination of the employment
of any person, neither the Seller, the Purchaser, Xxxxxxx or any
subsidiary of Xxxxxxx will, by reason of anything done at or prior to or
as of the Closing Date (other than termination of employment with Seller
on the Closing), be liable to any of such persons for so-called
"severance pay" or any other payments.
2.20. COMPLIANCE WITH LAW; PERMITS AND OTHER OPERATING RIGHTS.
Except as set forth in the Disclosure Schedule, and without limiting the
scope of any other representations or warranties contained in this Agreement,
but without intending to duplicate the scope of such other representations and
warranties, to the Seller's Knowledge, the assets, properties, business and
operations of the Seller, are and have been in compliance in all material
respects with all Laws applicable to the Seller's assets, properties, business
and operations. Except as set forth in the Disclosure Schedule, to the Seller's
Knowledge, the Seller does not require the Consent of any Authority to permit
them to operate in the manner in which they are presently being operated. To
the Seller's Knowledge, the Seller possesses all permits, licenses and other
authorizations from all Authorities necessary to permit it to operate the
Business in the manner in which it presently is conducted.
2.21. ENVIRONMENTAL AND SAFETY MATTERS.
Except as set forth on the Disclosure Schedule:
(a) Except in material compliance with Environmental Laws and
Occupational Safety and Health Laws, neither the Seller nor any
subsidiary or former subsidiary of the Seller engaged in or permitted
operations or activities upon the properties upon which the Seller's
business operates (the "PROPERTIES") which involved the emission,
release, discharge, refining, dumping or disposal of any Environmentally
Regulated Materials on, under, in or about the Properties, or transported
any Environmentally Regulated Materials to, from or across the
Properties. The Properties do not contain any: (i) underground or
aboveground storage tanks; (ii) to the Seller's Knowledge asbestos; (iii)
equipment using PCBs; (iv) underground injection xxxxx; or (v)
21
septic tanks in which process waste water or any Environmentally
Regulated Materials have been disposed.
(b) (i) No violation or noncompliance with Environmental
Laws or Occupational Safety and Health Laws has occurred during the
period in which the Seller operated such Properties and conducted such
operations; the Seller have obtained all permits, licenses and
authorizations required by, and the Seller and the Properties are in
compliance with, all Environmental Laws and Occupational Safety and
Health Laws including, without limitation, all applicable restrictions,
conditions, standards, limitations, prohibitions, requirements,
obligations, schedules and timetables contained in the Environmental and
Occupational Safety and Health Laws or contained in any regulation, code,
plan, order, decree, judgment, injection, notice or demand letter issued,
entered, promulgated or approved thereunder;
(ii) no enforcement, investigation, cleanup, removal,
remediation or response or other governmental or regulatory
actions have been, at any time in the past, asserted or threatened
and to Seller's Knowledge there does not exist any basis for such
enforcement, investigation, cleanup, removal, remediation, or
response or action (A) with respect to operations conducted by the
Seller on the Properties or (B) against the Seller or any
subsidiary or former subsidiary with respect to or in any way
regarding the Properties pursuant to any Environmental Laws or
Occupational Safety and Health Laws; and
(iii) no claims or settlements relating to or arising out
of Environmental Laws or Environmentally Regulated Materials (any
such enforcement, investigation, cleanup, removal, remediation or
response, other governmental or regulatory action, claim or
settlement is herein referred to as an "ENVIRONMENTAL CLAIM"), or
Occupational Safety and Health Laws have been made or, to the
Seller's Knowledge, been threatened by any third party, including
any Authority, nor, to the Seller's Knowledge, does there exist
any basis for any such claim against the Seller or any subsidiary
or former subsidiaries with respect to the operations conducted by
the Seller on the Properties.
(c) With regard to the activities of the Seller, there are no
past or present events, conditions, circumstances, activities, practices,
incidents, actions or plans which may interfere with or prevent
compliance or continued compliance with Environmental Laws and
Occupational Health and Safety Laws, as in effect on the Closing Date.
2.22. INSURANCE.
The Disclosure Schedule contains a listing of all policies of fire and
other casualty, general liability, theft, life, workers' compensation, health,
directors and officers, business interruption and other forms of insurance owned
or held by the Seller other than policies relating to Plans, specifying the
insurer, the policy number, the risk insured against, the term of the coverage,
the limits of coverage, the deductible amount (if any), the premium rate, the
date through which coverage will continue by virtue of premiums already paid
and, in the case of any
22
"claims made" coverage, the same information as to predecessor policies for
the previous five years. All present policies are in full force and effect
and all premiums with respect thereto have been paid. The Seller has not
been denied any form of insurance requested by Seller and no policy of
insurance has been revoked or rescinded since June 30, 1994, except as
described on the Disclosure Schedule.
2.23. BANK ACCOUNTS.
The Disclosure Schedule contains a list of the names of all financial
institutions, investment banking and brokerage houses, and other similar
institutions at which the Seller maintains accounts, deposits, safe deposit
boxes of any nature, and the names of all persons authorized to draw thereon or
make withdrawals therefrom; and the names of all persons, if any, holding tax or
other powers of attorney from the Seller.
2.24. BROKERS.
Except as set forth in the Disclosure Schedule and except for amounts
owing to Xxxxxx Xxxxxxx, Incorporated which amounts will be paid at Closing by
the Owners, neither the Seller, the Owners nor any of the Seller's directors,
officers, partners, shareholders or employees have employed any broker, finder,
or financial advisor or incurred any liability for any brokerage fee or
commission, finder's fee or financial advisory fee, in connection with the
transactions contemplated hereby, nor, to the Seller's Knowledge, is there any
basis for any such fee or commission to be claimed by any person or entity.
2.25. ABSENCE OF CERTAIN BUSINESS PRACTICES.
Except as set forth on the Disclosure Schedule, and to the Seller's
Knowledge, neither the Seller, nor any director, officer, partner, employee
or agent of the Seller, nor any other person acting on their behalf, have,
directly or indirectly, within the past five years given or agreed to give
any gift or similar benefit to any customer, supplier, governmental employee
or other person who is or may be in a position to help or hinder the Seller
(or assist the Seller in connection with any actual or proposed transaction)
which: (i) might subject the Seller, the Purchaser, Xxxxxxx or the
Purchaser's or Xxxxxxx'x affiliates to any damage or penalty in any civil,
criminal or governmental litigation proceeding; (ii) if not given in the
past, might have had a Material Adverse Effect on the Business; or (iii) if
not continued in the future, might materially adversely effect the Business
or which might subject the Seller, the Purchaser, Xxxxxxx or the Purchaser's
or Xxxxxxx'x affiliates to suit or penalty in any private or governmental
litigation or proceeding.
2.26. BUSINESS GENERALLY.
Except as set forth in the Disclosure Schedule, (excluding general
market and industry conditions as to which the Purchaser and Seller are each
aware) there has been no event, transaction or information which has come to
the attention of the Seller which would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Seller.
Without limiting the generality of the foregoing, except as set forth in the
Disclosure Schedule, there has not been in the 12-month period prior to the
date hereof any material adverse
23
change in the business relationship of the Seller with any customer, dealer
or supplier to the Seller, except for such changes in the ordinary course of
business consistent with past practices.
2.27. TRANSACTIONS WITH CERTAIN PERSONS.
Except as set forth in the Disclosure Schedule, during the past three
years, the Seller has not, directly or indirectly, purchased, leased or
otherwise acquired any property or obtained any services from, or sold,
leased or otherwise disposed of any property or furnished any services to, or
otherwise dealt with, in the ordinary course of business or otherwise, any
affiliate or associate of the Seller or any member, shareholder, or partner
of any affiliate or associate of the Seller (except with respect to
compensation in the ordinary course of business for services rendered as a
director, officer, governor, manager or employee of the Seller). Except as
set forth on the Disclosure Schedule, the Seller does not owe any amount to,
or have any agreement or contract with or commitment to, any of its partners,
directors, officers, employees or consultants or any affiliate or associate
thereof (other than compensation for current services not yet due and payable
and reimbursement of expenses arising in the ordinary course of business),
and none of such persons owes any amount to the Seller.
2.28. CUSTOMERS.
Except as set forth on the Disclosure Schedule, to the Seller's
Knowledge, there has not been in the 12-month period prior to the date
hereof, any dispute with any Material Customer of the Seller, nor any set of
circumstances (other than general market and industry conditions as to which
the Purchaser and Seller are each aware) either of which is reasonably
anticipated to have a material adverse effect on the relationship between the
Seller and any of such Material Customers. Except as set forth on the
Disclosure Schedule, the Seller is not aware of any circumstances that could
materially affect the ability of any Material Customer of the Seller, to
continue doing business with the Seller in the manner in which such business
has been conducted in the past. For purposes of this Section, a "MATERIAL
CUSTOMER" shall mean any customer of the Seller who, during the 12 month
period ended December 31, 1998, purchased at least One Hundred Thousand
Dollars ($100,000) of goods or services from Seller.
2.29. ACCURACY OF INFORMATION.
No representation or warranty made by the Seller or the Owners in this
Agreement, the Disclosure Schedule, or in any agreement, instrument,
document, certificate, statement or letter furnished or to be furnished to
the Purchaser at the Closing by or on behalf of the Seller or the Owners in
connection with any of the transactions contemplated by this Agreement
contains or will contain any untrue statement of material fact or omit or
will omit to state any material fact necessary in order to make the
statements herein or therein not misleading in light of the circumstances in
which they are made, and all of the foregoing completely and correctly
present the information required or purported to be set forth herein or
therein. The representations and warranties contained in this Article 2 or
elsewhere in this Agreement or any document delivered pursuant hereto will
not be affected or deemed waived by reason of the fact that the Purchaser or
its representatives knew or should have known that any such representation or
warranty is or might be inaccurate in any respect.
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3. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.
The Purchaser and the Parent, jointly and severally, represent and
warrant to the Seller and the Owners as of the date hereof as follows:
3.1. CORPORATE ORGANIZATION.
The Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Minnesota.
3.2. AUTHORIZATION.
The Purchaser and the Parent have all the requisite corporate power
and authority to enter into this Agreement and to carry out the transactions
contemplated herein. The Board of Directors of the Purchaser and the Parent
have taken all action required by law, their respective articles of
incorporation and bylaws or otherwise to authorize the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated herein and no action of the stockholders of the Purchaser or the
Parent is required. This Agreement is a valid and binding legal obligation
of the Purchaser and the Parent enforceable against each of them in
accordance with its terms subject to bankruptcy, insolvency, reorganization,
moratorium and other similar laws of applicability relating to or affecting
creditors' rights and general principals of equity.
3.3. NON-CONTRAVENTION.
Neither the execution, delivery and performance of this Agreement nor
the consummation of the transactions contemplated herein will: (i) violate
any provision of the articles of incorporation or bylaws of either the
Purchaser or the Parent; or (ii) except for such violations, conflicts,
defaults, accelerations, terminations, cancellations, impositions of fees or
penalties, mortgages, pledges, liens, security interests, encumbrances,
restrictions and charges which would not, individually or in the aggregate,
have a Material Adverse Effect on the Purchaser or the Parent, (A) violate,
be in conflict with, or constitute a default, however defined (or an event
which, with the giving of due notice or lapse of time, or both, would
constitute such a default), under, or cause or permit the acceleration of the
maturity of, or give rise to, any right of termination, cancellation,
imposition of fees or penalties under, any debt, note, bond, lease, mortgage,
indenture, license, obligation, contract, commitment, franchise, permit,
instrument or other agreement or obligation to which the Purchaser or the
Parent is a party or by which the Purchaser or the Parent or any of their
respective properties or assets are or may be bound (unless with respect to
which defaults or other rights, requisite waivers or consents shall have been
obtained at or prior to the Closing) or (B) result in the creation or
imposition of any Lien, upon any property or assets of the Purchaser or the
Parent under any debt, obligation, contract, agreement or commitment to which
the Purchaser or the Parent is a party or by which the Purchaser or the
Parent or any of their respective assets or properties is or may be bound; or
(iii) violate any Law of any Authority.
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3.4. CONSENTS AND APPROVALS.
Except for filings under the HSR Act, no Consent is required by any
person or entity, including without limitation any Authority, in connection
with the execution, delivery and performance by the Purchaser and the Parent
of this Agreement, or the consummation of the transactions contemplated
herein, other than any Consent which, if not made or obtained, will not,
individually or in the aggregate, have a Material Adverse Effect on the
business of the Purchaser or the Parent.
3.5. BROKERS.
Except as set forth in the Disclosure Schedule, neither the Purchaser,
the Parent, nor any of their officers, directors or employees have employed
any broker, finder, or financial advisor or incurred any liability for any
brokerage fee or commission, finder's fee or financial advisory fee, in
connection with the transactions contemplated hereby, nor is there any basis
known to the Purchaser or the Parent for any such fee or commission to be
claimed by any person or entity.
3.6. FINANCIAL ABILITY TO PERFORM.
The Parent and/or the Purchase has sufficient funds to pay all amounts
required to be paid hereunder at the Closing and to take such other actions
as may be required by it to consummate the transactions contemplated hereby.
The Parent and/or the Purchaser has obtained all consents, authorizations and
approvals necessary to pay the Purchase Price and to acquire the Assets.
4. COVENANTS OF THE PARTIES.
4.1. CONDUCT OF BUSINESS OF THE SELLER.
Except as contemplated by this Agreement, during the period from the
date of this Agreement to the Closing Date, the Seller will conduct its
business and operations according to its ordinary and usual course of
business, use its best efforts to preserve substantially intact its business
organizations and to use its best efforts to preserve its current
relationships with customers, employees, suppliers and other persons with
which it has significant business relations. Without limiting the generality
of the foregoing, and, except as otherwise expressly provided in this
Agreement, prior to the Closing Date, without the prior written consent of
the Purchaser, the Seller will not:
(a) amend its articles of organization, limited partnership
agreement or other charter documents;
(b) issue, reissue, sell, deliver or pledge or authorize or
propose the issuance, reissuance, sale, delivery or pledge of partnership
interests or securities convertible into partnership interests, or any
rights, warrants or options to acquire any partnership interests in the
Seller;
(c) redeem, purchase or otherwise acquire, or propose to redeem
or purchase or otherwise acquire, any partnership interests of the
Seller;
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(d) declare, set aside or pay any distribution (whether in
cash, limited or general partnership interests or property or any
combination thereof) in respect of the Seller's partnership interests or
redeem or otherwise acquire any partnership interests, except that the
Seller will be permitted to make distributions to each of the Owners for
their respective federal and state income tax liabilities on account of
net taxable income, gain and earnings of the Seller from January 1, 1999
up to and including the Closing Date, computed at the highest combined
federal and Massachusetts individual tax rates in effect during the
applicable period as though, in the case of the period from January 1,
1999 through the Closing Date the books of the Seller had closed on the
Closing Date, provided that prior to such distribution, the Owners
provide to the Purchaser a detailed calculation of the amount of such
distribution, including supporting financial statements;
(e) increase in any manner the compensation of any of the
Seller's directors, officers, partners other than as required by written
agreements set forth in Exhibit 2.16 as in effect on the date of this
Agreement or, except in the ordinary course of business, and consistent
with past practice, other employees; pay or agree to pay any pension,
retirement allowance or other employee benefit not required or permitted
by any existing plan, agreement or arrangement to any such director,
officer, partner or employee, whether past or present of the Seller; or
except in connection with any written arrangement approved by the
Purchaser, commit the Seller to any additional pension, profit-sharing,
bonus, incentive, deferred compensation, group insurance, severance pay,
retirement or other employee benefit plan, agreement or arrangement, or
to any employment agreement or consulting agreement (arising out of prior
employment) with or for the benefit of any person, or, except to the
extent required to comply with applicable law, amend any of such plans or
any of such agreements in existence on the date of this Agreement;
(f) except in the ordinary course of business, incur, assume,
suffer or become subject to, whether directly or by way of guarantee or
otherwise, any Liabilities which, individually or in the aggregate, are
material to the conduct of the businesses of the Seller or would have a
Material Adverse Effect on the Seller;
(g) pay, discharge or satisfy any Liabilities of the Seller
other than the payment, discharge or satisfaction in the ordinary course
of business and consistent with past practice;
(h) sell, transfer, or otherwise dispose of any of the Seller's
properties or assets (real, personal or mixed, tangible or intangible),
other than inventory in the ordinary course of business and consistent
with past practice;
(i) except as set forth on the Disclosure Schedule, permit or
allow any of the Seller's property or assets (real, personal or mixed,
tangible or intangible) to be subjected to any Lien, except for Permitted
Liens;
(j) write down the value of any Inventory (including
write-downs by reason of shrinkage or xxxx-down) or write off as
uncollectible any of the Seller's notes or
27
accounts receivable, except for immaterial write-downs and write-offs
in the ordinary course of business and consistent with past practice;
(k) cancel any of the Seller's debts or waive any of their
claims or rights, in each case, of substantial value;
(l) dispose of or permit to lapse any rights to the use of any
of the Seller's Intellectual Property Rights (except as necessary in the
conduct of its business) to any individual, corporation, partnership,
joint venture, association, trust, unincorporated organization or, as
applicable, any other entity other than representatives of the Purchaser;
(m) make or enter into any commitment of the Seller for capital
expenditures for additions to property, plant, equipment or intangible
capital assets;
(n) lend or advance any amount to, or sell, transfer or lease
any of the Seller's properties or assets (real, personal or mixed,
tangible or intangible) to, or enter into any agreement or arrangement
with, any of its officers, directors, partners, employees or any
affiliate or associate of any of their officers, directors, partners or
employees;
(o) terminate, enter into or amend in any material respect any
contract, agreement, lease, license or commitment identified in the
Disclosure Schedule, or take any action or omit to take any action which
will cause a breach, violation or default (however defined) under any
such items, except in the ordinary course of business and consistent with
past practice;
(p) acquire any of the business or assets of any other person
or entity;
(q) permit any of the Seller's current insurance (or
reinsurance) policies to be canceled or terminated or any of the coverage
thereunder to lapse, unless simultaneously with such termination,
cancellation or lapse, replacement policies providing coverage equal to
or greater than coverage remaining under those canceled, terminated or
lapsed are in full force and effect;
(r) take any action which would cause an adverse change in the
Seller's relationship with any customer, including the loss of any such
customer;
(s) enter into other agreements, commitments or contracts not
in the ordinary course of business or in excess of current requirements;
(t) modify, amend or terminate any Assumed Contract, or waive,
release, relinquish or assign any Assumed Contract or other right or
claim if such modification amendment or termination would have a Material
Adverse Effect;
(u) settle or compromise any material suit, claim or dispute or
threatened material suit, claim or dispute other than the Jain Lawsuit;
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(v) make any change in the Seller's accounting methods,
principles or practices except as required by GAAP; or
(w) agree in writing or otherwise to take any of the foregoing
actions or any action which would make any representation or warranty in
this Agreement untrue or incorrect in any material respect.
4.2. NO SOLICITATION OF ALTERNATE TRANSACTION; TERMINATION FEE.
The Seller and its officers, directors, governors, managers,
employees, Owners, independent contractors, consultants, counsel,
accountants, investment advisors and other representatives and agents
(collectively the "SELLER'S AGENTS") will not, directly or indirectly,
solicit or entertain offers from, negotiate with, provide any nonpublic
information to, enter into any agreement with, or in any manner encourage,
discuss, accept or consider any proposal of, any third party relating to the
acquisition of the Seller, its assets or businesses, in whole or in part,
whether through a tender offer (including a self tender offer), exchange
offer, merger, consolidation, sale of substantial assets or of a significant
amount of assets, sale of partnership interests, acquisition of partnership
interests, liquidation, dissolution or similar transactions involving the
Seller or any division of the Seller. Notwithstanding any other provisions in
this Agreement to the contrary, (i) in the event that Seller breaches its
obligations under this Section and the transactions contemplated by this
Agreement are not consummated, Seller will pay a termination fee to Purchaser
equal to Two Million Five Hundred Thousand Dollars ($2,500,000) as liquidated
damages and not as a penalty, and (ii) in the event Purchaser terminates the
Agreement prior to Closing for any reason other than pursuant to Section 7.2
or 7.3(a), (b), (c) or (d), Purchaser will pay a termination fee to Seller
equal to Two Million Five Hundred Thousand Dollars ($2,500,000) as liquidated
damages and not as a penalty (collectively the "Termination Fee"). Payment
of the Termination Fee by either party shall be in lieu of any other rights
or remedies available at law or in equity to the other party. This Section
will terminate and be of no further force and effect in the event that the
transactions contemplated by this Agreement are not closed on or before
May 31, 1999.
4.3. ACCESS TO PURCHASER.
Throughout the period prior to Closing, the Seller will afford to the
Purchaser, and its directors, officers, employees, counsel, accountants,
investment advisors and other authorized representatives and agents,
reasonable access to the facilities, properties, books and records of the
Seller at reasonable times during normal business hours and upon reasonable
notice in order that the Purchaser may have full opportunity to make such
investigations as it shall desire to make of the affairs of the Seller. The
Seller will furnish such additional financial and operating data and other
information as the Purchaser will, from time to time, reasonably request,
including without limitation access to the working papers of its independent
certified public accountants; PROVIDED, HOWEVER, that any such investigation
will not affect or otherwise diminish or obviate in any respect any of the
representations and warranties of the Seller and the Owners herein.
29
4.4. CONFIDENTIALITY.
Each of the parties hereto agrees that it will not use, or permit the
use of, any of the information relating to any other party hereto furnished
to it in connection with the transactions contemplated herein ("INFORMATION")
in a manner or for a purpose detrimental to such other party or otherwise
than in connection with the transaction, and that they will not disclose,
divulge, provide or make accessible (collectively, "DISCLOSE"), or permit the
Disclosure of, any of the Information to any person or entity, other than
their respective directors, officers, governors, managers, employees,
investment advisors, accountants, counsel and other authorized
representatives and agents, except as may be required by judicial or
administrative process or, in the opinion of such party's counsel, by other
requirements of Law; PROVIDED, HOWEVER, that prior to any Disclosure of any
Information permitted hereunder, the disclosing party shall first obtain the
recipients' undertaking to comply with the provisions of this subsection with
respect to such information. The term "Information" as used herein shall not
include any information relating to a party which the party disclosing such
information can show: (i) to have been in its possession prior to its
receipt from another party hereto; (ii) to be now or to later become
generally available to the public through no fault of the disclosing party;
(iii) to have been available to the public at the time of its receipt by the
disclosing party; (iv) to have been received separately by the disclosing
party in an unrestricted manner from a person entitled to disclose such
information; or (v) to have been developed independently by the disclosing
party without regard to any information received in connection with this
transaction. Each party hereto also agrees to promptly return to the party
from whom it originally received such information all original and duplicate
copies of materials in any media containing Information should the
transactions contemplated herein not occur. A party hereto shall be deemed
to have satisfied its obligations to hold the Information confidential if it
exercises the same care as it takes with respect to its own similar
information.
4.5. FILINGS; CONSENTS; REMOVAL OF OBJECTIONS.
Subject to the terms and conditions herein provided, the parties
hereto will use their respective commercially reasonable efforts to take or
cause to be taken all actions and do or cause to be done all things
necessary, proper or advisable under applicable Laws to consummate and make
effective, as soon as reasonably practicable, the transactions contemplated
hereby, including without limitation obtaining all Consents of any person or
entity, whether private or governmental, required in connection with the
consummation of the transactions contemplated herein (including, without
limitation, those consents listed in Sections 2.5(b) and 2.6 of the
Disclosure Schedule). In furtherance, and not in limitation of the
foregoing, it is the intent of the parties to consummate the transactions
contemplated herein at the earliest practicable time, and they respectively
agree to exert their best efforts to that end, including without limitation:
(I) to respond as promptly as practicable to all inquiries from the Federal
Trade Commission ("FTC") or the Antitrust Division of the Department of
Justice (the "ANTITRUST DIVISION") in connection with the filings to be made
by Xxxxxxx and the Seller with the FTC and Antitrust Division as soon as
practicable after the date hereof pursuant to the HSR Act; (ii) the removal
or satisfaction, if possible, of any objections to the validity or legality
of the transactions contemplated herein; and (iii) the satisfaction of the
conditions to consummation of the transactions contemplated hereby.
30
To the extent that any of the necessary approvals, consents or waivers
listed in Sections 2.5(b) and 2.6 of the Disclosure Schedule cannot be
obtained by Seller, Seller will (i) cooperate with Purchaser in any
reasonable and lawful arrangements designed to provide the benefits of such
approval, consent or waiver to Purchaser; and (ii) enforce, at the reasonable
request of Purchaser, any rights of Seller arising under the agreements for
which such approval, consent or waiver was necessary against the other party
or parties thereto (including, without limitation, the right to elect to
terminate any such agreement in accordance with the terms thereof upon advice
of Purchaser).
4.6. FURTHER ASSURANCES; COOPERATION; NOTIFICATION.
(a) Each party hereto will, before, at and after Closing,
execute and deliver such instruments and take such other actions as the
other party or parties, as the case may be, may reasonably require in
order to carry out the intent of this Agreement. Without limiting the
generality of the foregoing, at any time after the Closing, at the
request of the Purchaser and without further consideration, the Seller
will execute and deliver such instruments of sale, transfer, conveyance,
assignment and confirmation and take such action as the Purchaser may
reasonably deem necessary or desirable in order to more effectively
consummate the transactions contemplated hereby and to vest in the
Purchaser good and marketable title to, all of the Assets, to put the
Purchaser in actual possession and operating control thereof and to
assist the Purchaser in exercising all rights with respect thereto,
without further cost or expense to the Purchaser.
(b) The Seller will cause the Seller's management to cooperate
with the Purchaser to promptly develop plans for the management of the
business after the Closing, including without limitation plans relating
to productivity, marketing, operations and improvements, and the Seller
will further cooperate with the Purchaser to provide for the
implementation of such plans as soon as practicable after the Closing.
Subject to applicable Law, the Seller will cause the Seller's management
to confer on a regular and reasonable basis with one or more
representatives of the Purchaser to report on material operational
matters and the general status of ongoing operations.
(c) At all times from the date hereof until the Closing, each
party will promptly notify the other in writing of the occurrence of any
event which it reasonably believes will or may result in a failure by
such party to satisfy the conditions specified in this Article 4.
4.7. SUPPLEMENTS TO DISCLOSURE SCHEDULE.
At least 72 hours prior to the Closing, the Seller will supplement or
amend the Disclosure Schedule with respect to any event or development which,
if existing or occurring at or prior to the date of this Agreement, would
have been required to be set forth or described in the Disclosure Schedule or
which is necessary to correct any information in the Disclosure Schedule or
in any representation and warranty of the Seller which has been rendered
inaccurate by reason of such event or development. For purposes of
determining the accuracy as of the date hereof of the representations and
warranties of the Seller contained in Article 2 hereof in order to
31
determine the fulfillment of the conditions set forth herein and to determine
whether a material breach has occurred pursuant to Section 7.3(b), the
Disclosure Schedule will be deemed to exclude any information contained in
any supplement or amendment hereto delivered after the delivery of the
Disclosure Schedule.
4.8. PUBLIC ANNOUNCEMENTS.
None of the parties hereto will make any public announcement with
respect to the transactions contemplated herein without the prior written
consent of the other party, which consent will not be unreasonably withheld
or delayed; PROVIDED, HOWEVER, that any of the parties hereto may at any time
make any announcements which are required by applicable Law so long as the
party so required to make an announcement promptly upon learning of such
requirement notifies the other party of such requirement and discusses with
the other party in good faith the exact proposed wording of any such
announcement.
4.9. TAX MATTERS.
(a) The Owners or the Seller, as the case may be, shall be
responsible for (i) any obligation for Taxes related to the Seller, the
Business or any of the Assets for any Tax period or portion thereof
ending on or before June 30, 1994, (ii) any obligation for Taxes measured
by the income of the Seller or the Owners; and (iii) any Tax liability
relating to or arising out of the transfer of the Assets pursuant to this
Agreement.
(b) As a condition precedent to the consummation of the
transactions contemplated by this Agreement, the Seller will provide the
Purchaser with any clearance certificate or similar document(s) which may
be required by any state taxing authority in order to relieve the
Purchaser of any obligation to withhold any portion of the Purchase
Price.
(c) In addition to and without limiting those representations
and warranties set forth in Section 2.15 of this Agreement, in the event
that any sales or use Tax, or any Tax in the nature of a sales or use
tax, or any transactional Tax is payable or assessed relative to the
transactions contemplated herein, the Seller will pay all such Taxes and
will not collect any part thereof from the Purchaser. The parties hereto
will cooperate to make any necessary filings with state and local or
foreign taxing Authorities and to furnish any required supplemental
information with respect to any state and local or foreign Tax
liabilities resulting from the consummation of the transactions
contemplated herein.
(d) In addition to and without limiting those representations
and warranties set forth in Section 2.15 of this Agreement, the Seller or
the Owners, as the case may be, will pay all Taxes arising from or
relating to the transactions contemplated by this Agreement, including
without limitation Tax on any income or gains arising from the sale of
the Assets. The Seller will file all federal, foreign and state Tax
Returns for the Seller reflecting all activities of the Seller through
and including the Closing Date. Except as otherwise provided in this
Agreement, regardless of any prior practice, no distribution of
32
cash or property will be made by the Seller on or before the Closing
Date without the express written consent of the Purchaser.
(e) The Seller, the Owners and the Purchaser will:
(i) each provide the other with such assistance as may
reasonably be requested by any of them in connection with the
preparation of any Tax Return of the other, audit or other
examination by any taxing Authority with respect thereto or
judicial or administrative proceedings relating to liability for
Taxes of the other,
(ii) each retain and provide the other with any records
or other information which may be relevant to such Tax Return,
audit, examination or proceeding, and
(iii) each provide the other with any final determination
of such audit or examination or proceeding that affects any amount
required to be shown on any Tax Return of the other for any
period.
(f) Without limiting the generality of the foregoing, the
Seller and the Purchaser will retain, until the applicable statutes of
limitations (including all extensions) have expired, copies of their
respective Tax Returns, supporting work schedules and other records or
information which may be relevant to such Tax Returns for all Tax periods
or portions thereof ending on or before the Closing Date and will not
destroy or otherwise dispose of any such records without first providing
the other party with a reasonable opportunity to review and copy the
same.
4.10. BULK TRANSFERS.
The Seller and the Owners have requested and the Purchaser has agreed
to waive the requirements of the Uniform Commercial Code concerning bulk
transfers, as in effect in the various states in which the Seller has assets,
including without limitation the requirement of notice to creditors.
4.11. EMPLOYEE BENEFITS.
(a) The Purchaser will not have any liability or obligation to
employ or offer employment to any employee of the Seller in connection
with the transactions contemplated hereby other than as set forth in this
Section 4.11. As soon as is practicable after the date hereof, Seller
shall provide Purchaser with a complete list of all current employees of
the Seller including such employees' job title and rate of pay. At least
five (5) days prior to the Closing Date, Purchaser shall provide Seller
with Exhibit 4.11(a) which shall include a list of all employees to whom
Purchaser intends to make offers of employment (which Exhibit will become
a part of this Agreement). The Seller hereby authorizes the Purchaser to
enter into discussions with any of such employees concerning the future
employment of such individual by the Purchaser; provided, however, that
(i) such discussions will not be commenced prior to the giving of notice
by the Seller to the employees of the Seller of the transactions
contemplated by this Agreement; and (ii) all
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such discussions will be conducted in such a manner as not to
interfere unreasonably with the business operations of the Seller.
Except as otherwise provided in this Agreement, the terms and
conditions of such employment will be established by the Purchaser in
its sole discretion. Any such employee who accepts an employment
offer with the Purchaser and reports for work on the date directed by
the Purchaser shall be sometimes referred to as a "TRANSFERRED
EMPLOYEE."
(b) Except as expressly provided in this subsection 4.11(b),
the Purchaser will be responsible for making any required payment of
severance compensation including any notice pay and severance pay in
order to comply with the requirements of the Worker Adjustment and
Retraining Act ("WARN") (or any similar state or local Law) to any
employee of the Seller who is not offered employment by the Purchaser or
who, as a result of being offered a position by Purchaser which is
substantially different than the position such employee held with Seller,
refuses to accept any such offer of employment by the Purchaser provided,
however, that Purchaser will only be liable for an amount of severance or
notice pay in an amount not to exceed the amount payable pursuant to
applicable law.
(c) Each Transferred Employee will be permitted to participate
in the Purchasers benefit plans, policies and practices in accordance
with the terms thereof applicable to newly hired employees and without
regard to service with the Seller or any aspect of participation in any
benefit plans, practices or policies of the Sellers, except (i) a
Transferred Employee will be eligible to participate in the Purchasers
medical, dental disability and life insurance plans effective as of the
date in which he or she becomes a Transferred Employee in accordance with
the otherwise applicable terms of such plans and the Purchaser will waive
or cause to be waived any pre-existing condition, exclusions or
limitations applicable to such persons under such medical and dental
plans provided such Transferred Employees participated in the Seller's
medical or dental plans, as the case may be, on the Closing Date, (ii) a
Transferred Employee who would be eligible to participate in Xxxxxxx'x
401(k) plan if such Transferred Employee's service with the Seller were
counted as eligibility service for purposes of such 401(k) plan will be
permitted to enter Xxxxxxx'x 401(k) plan no later than on the first day
of the second succeeding calendar month after the calendar month in which
Closing occurs (except with respect to Transferred Employees who are
temporary or on-call employees such entry into Xxxxxxx'x 401(k) shall not
take effect until August 1, 1999) and one-half of such Transferred
Employee's service with the Seller will be counted for vesting purposes
with respect to Xxxxxxx'x 401(k) plan; and (iii) the Purchaser will
recognize a Transferred Employee's service with the Seller for purposes
of the Purchaser's vacation policy. The Seller will provide the
Purchaser with any information regarding Transferred Employees' service
with the Seller that the Purchaser may reasonably request to affect the
foregoing. Nothing in this Section 4.11(c) shall in any way limit, or
prevent the Purchaser from changing the terms of any plan or changing the
underlying insurance company or other provider with respect to any
benefit at any time after the Closing Date provided, however, that
Purchaser shall maintain in all material respects the level of benefits
set forth on Exhibit 4.11(c) with respect to the Transferred Employees
until at least January 31, 2000.
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(d) The Seller and the Owners will not, for a period of five
(5) years after the Closing Date, take any action, other than with the
written consent of the Purchaser, to induce any employee who accepts an
offer pursuant to subsection (a) above, while still employed by the
Purchaser or any affiliate of the Purchaser, to enter into the employ of
the Seller, the Owners or any affiliate of the Seller or the Owners.
(e) The Purchaser will not be obligated under, and hereby
specifically disclaims any assumption or liability with respect to, any
Pension Plan, Welfare Plan or any collective bargaining agreement to
which the Seller is a party or under which the Seller's employees or
former employees are covered. Without limiting the generality of the
foregoing, the Purchaser is not assuming any obligation to contribute to,
or any obligation or liability for any withdrawal liability arising in
connection with, any multi-employer plan, within the meaning of Section
4001(a)(3) of ERISA, attributable to participation therein by current or
former employees of the Seller as a result of this Agreement or the
transactions contemplated hereby. Within three business days after the
Closing, the Seller will deliver to Purchaser a complete and accurate
list of the date and nature of the qualifying event pursuant to which
each individual listed on the Disclosure Schedule pursuant to Section
2.16(d) became covered or eligible to be covered under any "group health
plan" maintained by the Seller pursuant to the group health plan
continuation requirements of Part 6 of Subtitle B of Title I of ERISA and
Section 4980B of the Code, and the last known address of each such
individual together with all documents, records, forms, elections,
notices and other materials relating to such coverage or eligibility to
elect such coverage in the possession of any of or reasonably accessible
to the Seller. With respect to each individual listed on the Disclosure
Schedule pursuant to Section 2.16(d) who received proper notification of
his or her continuation coverage rights pursuant to COBRA, in connection
with any "qualifying event" that has occurred on or before the Closing
Date or with respect to whom the deadline for providing such notice in
connection with such qualifying event has not yet passed, as between the
Purchaser, on the one hand, and the Seller, on the other hand, the
Purchaser is responsible for providing group health plan continuation
coverage in accordance with Section 4980B of the Code and Part 6 of
Subtitle B of Title I of ERISA. With respect to any other individual who
is not listed on the Disclosure Schedule pursuant to Section 2.16(d) or
who has not received proper notification of his or her continuation
coverage rights pursuant to COBRA, but who is a "qualified beneficiary"
currently receiving or eligible to receive group health plan continuation
coverage under any "group health plan" maintained by the Seller or any
Affiliated Organization, as between the Purchaser, on the one hand, and
the Seller, on the other hand, the Seller is responsible for providing
group health plan continuation coverage in accordance with COBRA (without
regard to whether the Purchaser is ultimately determined to be
responsible to provide such coverage to any such individual) and the
Seller will indemnify, defend and hold harmless the Purchaser and its
affiliates from and against any liability, expense, cost, tax or
obligation of any nature with respect to such individual arising in
connection with group health plan coverage required under COBRA.
(f) On or prior to the Closing Date, Seller shall make a cash
payment to each of its employees in an amount equal to the vacation time,
holiday time and sick pay
35
properly due each such employee through the Closing Date. The parties
acknowledge that proceeds used to make such cash payment will be
provided by the Seller (and not the Owners) and, provided that Seller
has properly accrued such amounts on the Latest Balance Sheet and as
of the Closing Date, such payment will not result in any reduction or
increase to the Purchase Price.
4.12. AUTHORIZATION.
(a) On or prior to the Closing, the Seller will deliver to the
Purchaser a copy of the resolutions of the Board of Directors of Xxxxxxx
and partners of the Seller, approving the execution and delivery of this
Agreement and the consummation of all of the transactions contemplated
hereby, duly certified by an officer of the Seller.
(b) On or prior to the Closing, the Purchaser will deliver to
the Seller a copy of the resolutions of the Board of Directors approving
the execution and delivery of this Agreement and the consummation of all
of the transactions contemplated hereby, duly certified by an officer of
the Purchaser.
4.13. ADDITIONAL POST-CLOSING OBLIGATIONS OF THE SELLER.
Effective as of the Closing, the Seller appoints the Purchaser, its
successors and assigns, the true and lawful attorney or attorneys of the Seller,
with full power of substitution, in the name of the Seller but on behalf and for
the benefit of and at the expense of the Purchaser:
(a) to collect in the name of the Seller for the account of the
Purchaser all receivables and other items included in the Assets, if any,
to be sold and transferred to the Purchaser as provided herein;
(b) to institute and prosecute, in the name of the Seller or
otherwise, all proceedings which the Purchaser may deem necessary or
desirable in order to collect, assert or enforce any claim, right or
title of any kind;
(c) to defend and compromise any and all actions, suits or
proceedings in respect of the Assets to the extent liability therefor has
been assumed by the Purchaser hereunder; and
(d) to do all such acts and things in relation to the foregoing
as is reasonably necessary to exercise such powers, as the Purchaser may
deem advisable.
The foregoing power is coupled with an interest and will be irrevocable by
the Seller or by their dissolution in any manner or for any reason. The
Purchaser will retain for its own account any amounts collected pursuant to
the foregoing power, including any sums payable as interest in respect
thereof, and the Seller will pay to the Purchaser, when received, any amounts
which will be received by the Seller in respect of any receivables or other
assets or properties related to the Assets. The Purchaser will pay to the
Seller, when received, any amounts which will be received by the Purchaser in
respect of any receivables or other assets or properties of the Seller (other
36
than those related to the Assets). The powers granted pursuant to this
Section 4.13 shall have no application with respect to any indemnification
claim, brought pursuant to Article 8 herein.
4.14. COVENANT NOT TO COMPETE; NON-SOLICITATION.
(a) In order that the Purchaser may have and enjoy the benefit
of the transactions contemplated and the goodwill to be acquired pursuant
to this Agreement, the Seller covenants and agrees that, for a period of
five (5) years from the Closing Date, it will not, and will not permit
any of its affiliates (which shall not include the Owners, each of whom
has separately entered into similar non-competition agreements) to,
directly or indirectly, (i) engage in, (ii) have any ownership or equity
interest exceeding 5% in any business, firm, corporation, joint venture
or other entity engaged in, or (iii) consult with or assist any person or
entity who or which is engaged in, any business competitive with the
Purchaser or Xxxxxxx.
(b) The invalidity or unenforceability of any provision of this
Section 4.14, in whole or by virtue of the following sentence in part,
will not affect the validity or enforceability of any other provision of
this Section 4.14 or of any other provision of this Agreement, all of
which will to the full extent consistent with applicable law continue in
full force and effect. In addition, if any provision of Section 4.14(a)
are adjudged to be excessively broad as to duration, geographical scope,
activity or subject, the parties intend that such provision will be
deemed modified to the minimum degree necessary to make such provision
valid and enforceable under applicable law and that such modified
provision shall thereafter be enforced to the fullest extent possible.
The Seller and the Owners acknowledge that any violation of any of the
provisions of Section 4.14(a) is likely to cause irreparable damage to
the Purchaser and it is agreed that the Purchaser will be entitled to
equitable relief, including injunction and specific performance, in the
event of any violation of such provision.
4.15. REAL ESTATE MATTERS.
At least 15 days prior to closing, Seller will deliver to Purchaser:
(a) an ALTA commitment for an owner's policy of title insurance
for all Real Property issued by a title insurer designated by Purchaser
naming Purchaser as the proposed insured in an amount to be determined by
Purchaser (the "COMMITMENT"). The Commitment will show all exceptions to
title including, without limitation, all covenants, conditions,
restrictions, reservations, easements, rights and rights-of-way, liens
and other matters of record, and will include proper searches for
bankruptcies, judgments and state and federal tax liens affecting the
Real Property. The Commitment will be accompanied by legible copies of
all documents referred to therein affecting title to such Real Property.
The Commitment will also include a commitment to (1) endorse the title
policy so as to delete any general or standard exceptions (including
exceptions for parties in possession, unrecorded instruments, survey
matters, and mechanics liens, except for matters which Purchaser has
created, suffered or permitted to accrue after the date hereof); (2)
issue a zoning endorsement (ALTA Form 3.1); and (3) issue an endorsement
to insure that the
37
Real Property complies with all existing covenants, conditions and
restrictions of record and that the instruments creating any such
restrictions do not contain any forfeiture of title or right of
re-entry provisions (ALTA Form 100); a non-imputation endorsement
insuring the Purchaser, or its assigns, against any knowledge imputed
to it through the Seller or by operation of law; all such endorsements
and agreements will be in form and substance reasonably satisfactory
to Purchaser. The premium for the polices of title insurance will be
paid for by Purchaser. Owner will pay for the fees and costs of
obtaining and issuing the Commitments.
(b) surveys of the Real Property which Seller will cause to be
prepared by a registered land surveyor, certified to the Purchaser and
the title insurer. The surveys will be prepared in accordance with
current ALTA/ASCM minimum standard detail requirements by a land surveyor
registered in Massachusetts, showing and certifying (1) the legal
description of the Real Property, (2) the area of the Real Property to
the nearest 1/1000th of an acre, and the area of the Real Property to the
nearest 1/1000th of an acre net of any roadway easements; (3) whether the
Real Property is located in an area designated by an agency of the United
States of America as being subject to flood hazards or flood risks; (4)
the location of any improvements (including distances from perimeter lot
lines), driveways, sidewalks, paved and unpaved areas and curbcuts; all
easements affecting the Real Property, whether visible or of record, and
easements over property other than the Real Property for the benefit of
the Real Property; all portions of the Real Property subject to building
lines, setback lines or other restrictions; (5) the location of storm
sewers, sanitary sewers and water lines located upon the real estate and
the service lines thereof from the respective main line; (6) the location
of all visible encroachments; (7) the boundary lines of the Real
Property; (8) the location of all xxxxx on the Real Property; and (9) all
other matters referred to on the Commitment that can be shown on such
surveys ("SURVEYS"). The cost of the Surveys of the Real Property will
be paid by Owner.
Purchaser will be allowed until the Closing Date for the examination of the
Commitment and the Surveys and to make any objections to the marketability of
title, such objections to be made in writing or deemed to be waived. If any
objections are so made, Seller will be allowed seven (7) days to make such title
marketable (at Owner's sole cost and expense provided the Owners shall not be
required to spend more than $250,000 to cure any such objections, provided,
further that Owner's failure to cure such objections shall permit Purchaser to
terminate this Agreement pursuant to Section 7.3). If such defects are cured
within said seven (7) day period, Purchaser will be notified in writing of the
curing of said defects. If such title is not marketable and not made so within
said seven (7) day period and Purchaser does not waive, by written notice given
to Seller the curing of said defects, Purchaser will be permitted to terminate
this Agreement in accordance with Section 7.3 herein without payment of the
Termination Fee.
(c) Seller shall pay all general and special real estate taxes
due and payable in 1998 and all prior years.
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4.16. USE OF NAME.
For a period of three (3) years after the Closing Date, Purchaser shall
have the exclusive right to the commercial use of each of Seller's names and any
derivatives or combinations thereof, including, without limitation, those listed
in Exhibit 1.1(a) hereto. After such initial three-year period, Purchaser shall
be entitled to the nonexclusive use of such names, provided, however, that
neither Seller nor Owners (nor any of their respective affiliates) shall, for a
period of ten (10) years from the Closing Date, use such names (including any
derivatives or combination thereof) in any business activity that is competitive
with either the Purchaser or Xxxxxxx.
4.17. TERMINATION OF 401(k) PLAN.
On or prior to the Closing Date, the Seller shall terminate the Xxxxxxx
Printing Limited Partnership Employees' Savings Plan and any other plan
maintained by Seller that includes a qualified cash or deferred arrangement
pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended,
(individually and collectively the "401(K) PLAN"), effective as of a date prior
to the Closing Date. Prior to the Closing Date, or promptly thereafter, the
Seller shall, at the Seller's expense, take any action required by the 401(k)
Plan or applicable law in connection with the termination and seek a
determination letter from the IRS relating to the termination of the 401(k)
Plan. As soon as administratively practicable after receiving a favorable
determination letter, the Seller shall, at the Seller's expense, complete the
distribution of assets from the 401(k) Plan and take any other actions necessary
to complete the termination of the 401(k) Plan. On or prior to the Closing, the
Seller shall deliver to Purchaser a certified copy of a resolution of the board
of directors of Seller terminating the 401(k) Plan in accordance with this
Section 4.18. After Seller receives a favorable determination letter relating
to the 401(k) Plan, Purchaser will allow Transferred Employees (who are still
employed by Purchaser at such time) to roll over the distribution of their
account balances from the 401(k) Plan to Xxxxxxx'x 401(k) Plan.
4.18. WORKERS' COMPENSATION.
The Seller is currently a member in a workers compensation self-insurance
group known as Graphic Arts Compensation Corporation ("GACC"). Effective on or
prior to the Closing Date, the Seller shall terminate its participation in the
GACC. Seller shall be responsible for all premium payments due with respect to
periods up to and including the Closing Date. Effective as of the Closing Date,
all Transferred Employees shall be included in, and covered under, Purchaser's
workers compensation arrangement. Purchaser hereby agrees to assume and become
responsible for any additional assessments made by GACC for periods prior to the
Closing Date provided, however, that Seller has made all required premium
payments relating to such periods. Purchaser shall be entitled to any refund or
dividend of surplus funds paid or payable by GACC to Seller after the Closing
Date regardless of whether such refund or dividend relates to periods prior to
the Closing Date.
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4.19. ENVIRONMENTAL LIABILITY PROTECTION.
The Owners shall ensure that the Massachusetts Oil and Hazardous Material
Release Prevention Act, Massachusetts General Law Chapter 21E, is complied with
regarding the results of the phase II environmental site assessment ("PHASE II")
of the Seller's property located at 40 and 00 Xxxxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxxxxx (collectively, the "SITE"), by taking such actions as necessary,
including:
(a) providing proper notification regarding the results of the
Phase II to the Massachusetts Department of Environmental Protection
("DEP") including a Release Notification form and all necessary
supporting documents, and
(b) preparing and submitting all required information, forms,
reports and other documentation, including a Response Action Outcome
Opinion and all necessary supporting documentation, pursuant to 310 Code
of Massachusetts Regulations 40.0000 to show that no further action at
the Site is necessary.
4.20. INTELLECTUAL PROPERTY MATTERS.
At lease five (5) days prior to the Closing Date, Seller shall use its
commercially reasonable efforts to obtain a written license agreement in a form
and substance reasonably satisfactory to Purchaser with respect to the Content
Manager software currently used by the Seller (the "LICENSE AGREEMENT"). The
License Agreement shall permit the Purchaser to use the software internally and
on a service bureau basis with respect to its customers. The License Agreement
shall be perpetual in duration and shall be royalty-free.
5. CONDITIONS TO PURCHASER'S OBLIGATIONS.
Notwithstanding any other provision of this Agreement to the contrary,
the obligation of the Purchaser to effect the transactions contemplated herein
will be subject to the satisfaction or waiver at or prior to the Closing of each
of the following conditions:
5.1. REPRESENTATIONS AND WARRANTIES TRUE.
The representations and warranties of the Seller and the Owners contained
in this Agreement, including without limitation in the Disclosure Schedule
initially delivered to Purchaser as Exhibit 2 (as, and to the extent, updated
and accepted by Purchaser pursuant to Section 4.7), will be in all material
respects true, complete and accurate as of the date when made and at and as of
the Closing as though such representations and warranties were made at and as of
such time, except for changes specifically permitted or contemplated by this
Agreement, and except insofar as the representations and warranties relate
expressly and solely to a particular date or period, in which case they will be
true and correct in all material respects at the Closing with respect to such
date or period.
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5.2. PERFORMANCE.
The Seller and the Owners will have performed and complied in all
material respects with all agreements, covenants, obligations and conditions
required by this Agreement to be performed or complied with by the Seller and
the Owners on or prior to the Closing.
5.3. REQUIRED APPROVALS AND CONSENTS.
(a) All action required by law and otherwise to be taken by the
Seller and the Owners to authorize the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby will have been duly and validly taken.
(b) All Consents of or from all Authorities or any other person
required hereunder to consummate the transactions contemplated herein,
will have been delivered, made or obtained, and Purchaser will have
received copies thereof.
5.4. ADVERSE CHANGES.
No material adverse change will have occurred in the Business or the
Assets since the date of this Agreement.
5.5. NO PROCEEDING OR LITIGATION.
No suit, action, investigation, inquiry or other proceeding by any
Authority or other person or entity will have been instituted or threatened
which delays or questions the validity or legality of the transactions
contemplated hereby or which, if successfully asserted, would individually or in
the aggregate, otherwise have a Material Adverse Effect on either of the Seller'
business, financial condition, prospects, assets or operations.
5.6. OPINION OF SELLER'S COUNSEL.
Purchaser will have received an opinion from Xxxxxxxx Xxxxxxx & Xxxxxxx,
counsel to the Seller, dated the Closing Date, substantially in the form and
substance set forth as Exhibit 5.6 hereto.
5.7. LEGISLATION.
No Law will have been enacted which prohibits, restricts or delays the
consummation of the transactions contemplated hereby or any of the conditions to
the consummation of such transaction.
5.8. CERTIFICATES.
The Purchaser will have received such certificates of the Seller and the
Owners, in a form and substance reasonably satisfactory to the Purchaser, dated
the Closing Date, to evidence compliance with the conditions set forth in this
Article 5 and such other matters as may be reasonably requested by the
Purchaser.
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5.9. EMPLOYMENT, CONSULTING AND NON-COMPETE AGREEMENTS.
The Purchaser and each of Xxxxxx X. Xxxxxxx, Xxx X. Xxxxxxx, Xxxxxxx
X. Xxxxxx, Xxxxxxx X. Xxxxxx and Xxx X. Xxxxxxxx will have executed and
delivered employment/consulting agreements, in substantially the form of
Exhibit 5.9 hereof (the "EMPLOYMENT AGREEMENTS"). Xxxxx X. Xxxxxx will have
executed and delivered a non-competition agreement substantially in the form
of Exhibit 5.9(a) hereof (the "NON-COMPETITION AGREEMENT").
5.10. APPROPRIATE DOCUMENTATION.
The Purchaser will have received, in a form and substance reasonably
satisfactory to the Purchaser and its counsel, dated the Closing Date, all
bills of sale, deeds, assignments and other conveyance and transfer
documentation consistent with the negotiated provisions of this Agreement and
necessary to vest title in the Assets to the Purchaser.
5.11. HSR FILING.
Any waiting period applicable to the consummation of the transaction
under the HSR Act shall have expired or been terminated, and no action shall
have been instituted by the Department of Justice or the Federal Trade
Commission challenging or seeking to enjoin the consummation of this
transaction, which action shall have not been withdrawn or terminated.
5.12. TITLE COMMITMENTS AND SURVEYS.
Owners shall have obtained and delivered the Commitments and Surveys
in a form and substance reasonably satisfactory to Purchaser.
5.13. FACILITIES LEASE.
The Seller will have obtained the consent of Xxxxxx and Xxxxxxxxx
Xxxxxxxx and the Board of Managers ("CONDO LANDLORDS") for the assignment of
that certain lease dated March 23, 1995 between the Seller and the Condo
Landlords or, in the alternative, if the Condo Landlord refuses to deliver
such consent Seller shall make all payments under the lease through the
remainder of the term of the lease, provided, however, that Purchaser shall
reimburse Seller promptly for all such lease payments made.
5.14. ENVIRONMENTAL LIABILITY PROTECTION.
The Owners shall have taken all actions necessary to ensure that the
Massachusetts Oil and Hazardous Material Release Prevention Act,
Massachusetts General Law Chapter 21E, is complied with by taking such
actions as necessary, including:
(a) providing proper notification regarding the results of the
Phase II of the Site to the DEP including a Release Notification form and
all necessary supporting documents, and
42
(b) preparing and submitting all required information, forms,
reports and other documentation, including a Response Action Outcome
Opinion and all necessary supporting documentation, pursuant to 310 Code
of Massachusetts Regulations 40.0000 to show that no further action at
the Site is necessary.
5.15. INTELLECTUAL PROPERTY MATTERS.
Seller shall have obtained the License Agreement contemplated by
Section 4.20. This condition is absolute and is not intended to be satisfied
by Seller exercising commercially reasonable efforts to obtain such License
Agreement.
6. CONDITIONS TO OBLIGATIONS OF THE SELLER AND THE OWNERS.
Notwithstanding anything in this Agreement to the contrary, the
obligation of the Seller and the Owners to effect the transactions
contemplated herein will be subject to the satisfaction or waiver at or prior
to the Closing of each of the following conditions:
6.1. REPRESENTATIONS AND WARRANTIES TRUE.
The representations and warranties of the Purchaser contained in this
Agreement will be in all material respects true, complete and accurate as of
the date when made and at and as of the Closing, as though such
representations and warranties were made at and as of such time, except for
changes permitted or contemplated in this Agreement, and except insofar as
the representations and warranties relate expressly and solely to a
particular date or period, in which case they will be true and correct in all
material respects at the Closing with respect to such date or period.
6.2. PERFORMANCE.
The Purchaser will have performed and complied in all material
respects with all agreements, covenants, obligations and conditions required
by this Agreement to be performed or complied with by the Purchaser at or
prior to the Closing.
6.3. CORPORATE APPROVALS.
All action required to be taken by the Board of Directors of the
Purchaser to authorize the execution, delivery and performance of this
Agreement by the Purchaser and the consummation of the transactions
contemplated hereby will have been duly and validly taken.
6.4. NO PROCEEDING OR LITIGATION.
No suit, action, investigation, inquiry or other proceeding by any
Authority or other person or entity will have been instituted or threatened
which delays or questions the validity or legality of the transactions
contemplated hereby or which, if successfully asserted, would individually or
in the aggregate, otherwise have a Material Adverse Effect on Purchaser's
business, financial condition, prospects, assets or operations.
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6.5. CERTIFICATES.
The Purchaser will have furnished to the Seller and the Owners such
certificates and other documents, instruments and writings to evidence the
fulfillment of the conditions set forth in this Article 6 as Seller and the
Owners may reasonably request.
6.6. PAYMENT OF CONSIDERATION.
The Seller will have received satisfactory evidence that the actions
to be taken and documents to be delivered pursuant to Section 1.3 have been
taken or delivered, as the case may be.
6.7. HSR FILING.
Any waiting period applicable to the consummation of the transaction
under the HSR Act shall have expired or been terminated, and no action shall
have been instituted by the Department of Justice or the Federal Trade
Commission challenging or seeking to enjoin the consummation of this
transaction, which action shall have not been withdrawn or terminated.
6.8. OPINION OF PURCHASER'S COUNSEL.
Seller will have received an opinion from Xxxxxxxxxxx Xxxxx &
Xxxxxxxx, counsel to the Purchaser, dated the closing date, substantially in
the form and substance set forth as Exhibit 6.8 hereto.
7. TERMINATION AND ABANDONMENT.
7.1. TERMINATION BY MUTUAL CONSENT.
This Agreement may be terminated at any time prior to the Closing by the
written consent of the Seller and the Purchaser.
7.2. TERMINATION BY EITHER THE SELLER OR THE PURCHASER.
This Agreement may be terminated by either the Seller or the Purchaser
if:
(a) the Closing shall not have been consummated by 5:00 p.m.
(Minneapolis, Minnesota) on April 30, 1999 (provided that the right to
terminate this Agreement under this Subsection 7.2(a) will not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of or resulted in the failure of the Closing
to occur on or before such date); or
(b) any court of competent jurisdiction in the United States or
some other governmental body or regulatory authority will have issued an
order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the Closing or permitting
consummation of the Closing only subject to a condition or restriction
unacceptable to the Purchaser and such order, decree, ruling or other
action shall have become final and nonappealable.
44
7.3. TERMINATION BY THE PURCHASER.
This Agreement may be terminated at any time prior to the Closing Date by
the Purchaser if:
(a) the Seller and the Owners fail to comply in any material
respect with any of the covenants, conditions or agreements contained in
this Agreement required to be performed or complied with by the Seller
and the Owners prior to the Closing Date;
(b) any representation or warranty of the Seller or the Owners
contained in this Agreement is or becomes untrue or incorrect in any
material respect (except for changes permitted by this Agreement and
those representations which address matters only as of a particular date
that remain true and correct as of such date);
(c) any of the exception items on the Commitments which are
listed objectionable to Purchaser are not timely cured by Seller except
for the activity and use limitation referred to in Section 2.21 of the
Disclosure Schedule;
(d) Seller delivers supplements or amendments to the Disclosure
Schedule which are not acceptable to Purchaser; or
(e) Purchaser pays the Termination Fee to Seller pursuant to
Section 4.2 herein.
7.4. TERMINATION BY THE SELLER.
This Agreement may be terminated prior to the Closing Date by action of
the Seller if:
(a) the Purchaser fails to comply in any respect with any of
the covenants, conditions or agreements contained in this Agreement
required to be performed on or complied with by the Purchaser prior to
the Closing Date; or
(b) any representation or warranty of the Purchaser contained
in this Agreement is or becomes untrue or incorrect (except for changes
permitted by this Agreement and those representations which address
matters as of a particular date that remain true and correct as of such
date).
7.5. PROCEDURE AND EFFECT OF TERMINATION.
In the event of termination of this Agreement and abandonment of the
transactions contemplated hereby by the Seller and the Owners or the
Purchaser pursuant to this Article 7, written notice will be given to all
other parties and this Agreement will terminate (other than Sections 4.2,
4.4, 4.8, 9.1, 9.8 and this Section 7.5) and the transactions contemplated
hereby will be abandoned, without further action by any of the parties
hereto. If this Agreement is terminated as provided herein:
45
(a) Upon request therefor, each of the parties hereto will
redeliver all documents, workpapers and other material of the other
parties relating to the transactions contemplated hereby, whether
obtained before or after the execution hereof, to the party furnishing
the same;
(b) No party will have any liability for a breach of any
representation, warranty, agreement, covenant or the provision of this
Agreement, unless such breach was due to a willful or bad faith action or
omission of such party or any representative, agent, employee or
independent contractor thereof; and
(c) All filings, applications and other submissions made
pursuant to the terms of this Agreement will, to the extent practicable,
be withdrawn from the agency or other person to which made.
8. SURVIVAL AND INDEMNIFICATION.
8.1. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS;
INVESTIGATION.
All representations and warranties of the parties contained in this
Agreement will survive the Closing Date for a period of two (2) years (other
than the representations and warranties set forth in Section 2.10(a), clause
(i) of the second sentence of 2.12(a) and 2.13(b), which survive indefinitely
and the representations and warranties set forth in Sections 2.15, 2.16 and
2.21 which survive for the applicable statute of limitations). The
covenants, agreements and obligations contained herein and in the exhibits
hereto will survive the Closing without limitation as to time unless the
covenant or agreement specifies the term, in which case such covenant or
agreement will survive until the expiration of such specified term and will
thereupon expire. The right to indemnification or any other remedy based on
representations, warranties, covenants and obligations in this Agreement will
not be affected by any investigation conducted with respect to, or any
knowledge acquired (or capable of being acquired) at any time, whether before
or after the execution and delivery of this Agreement or the Closing Date,
with respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant or obligation. The waiver of any
condition based on the accuracy of any representation or warranty, or on the
performance of or compliance with any covenant or obligation, will not affect
the right to indemnification or any other remedy based on such
representations, warranties, covenants and obligations, except with respect
to the specific matter or item upon which such waiver was predicated, the
waiving party shall have no right to indemnification or other remedy against
the other party.
8.2. INDEMNIFICATION BY THE PURCHASER.
The Purchaser agrees to indemnify, defend and hold the Seller and the
Owners harmless from and against any and all losses, liabilities,
obligations, demands, judgments, settlements, damages (but excluding
consequential damages, lost profits or punitive damages) or expense
(including but not limited to interest, penalties, fees and reasonable
professional fees and expenses) and against all claims in respect thereof
(including, without limitation, amounts paid in settlement and costs of
investigation) or diminution in value, whether or not involving a third-
46
party claim (collectively as "SELLER'S LOSS" or "SELLER'S LOSSES") to which
the Seller and the Owners may suffer or incur, directly or indirectly, as a
result from or in connection with:
(a) any untrue representation of, or breach of warranty by, the
Purchaser in any part of this Agreement;
(b) the breach of or nonfulfillment of any covenant, agreement
or undertaking of the Purchaser in this Agreement;
(c) the operation of the Assets of the Business after the
Closing Date;
(d) any failure to pay or perform Assumed Liabilities;
(e) any claim by a former employee of Seller who is employed by
the Seller on the Closing Date and who is not offered employment by
Purchaser or who is offered a substantially different job by Purchaser;
and
(f) any response actions pursuant to Massachusetts General
Laws, Chapter 21E or 310 Code of Massachusetts Regulations 40.0000
resulting from or related to construction or development on the Real
Property after the Closing Date, other than maintenance and repair in the
ordinary course of business of the structures existing on the Real
Property on the Closing Date.
8.3. INDEMNIFICATION BY THE SELLER AND THE OWNERS.
The Seller and the Owners, jointly and severally, with respect to the
Escrow Deposit and severally (in accordance with allocation set forth on
Exhibit 8.3) with respect to all amounts in excess of the Escrow Deposit,
agree to indemnify the Purchaser and Xxxxxxx, their respective subsidiaries
and affiliates and each of their respective shareholders, officers, directors
and employees (the "PURCHASER INDEMNIFIED PARTIES") against all losses,
liabilities, obligations, demands, judgments, settlements, damages (but
excluding any claims for consequential damages, lost profits or punitive
damages suffered directly by the Purchaser as opposed to consequential
damages, lost profits or punitive damages paid by the Purchaser to a third
party), Taxes, or expenses (including, but not limited to, interest,
penalties, fees, and reasonable professional fees and expenses) and against
all claims in respect thereof (including, without limitation, amounts paid in
settlement and costs of investigation) or diminution in value, whether or not
involving a third-party claim (herein referred to collectively as
"PURCHASER'S LOSSES" or individually as a "PURCHASER'S LOSS") to which the
Purchaser may become subject to or which it may suffer or incur, directly or
indirectly, as a result from or in connection with:
(a) any untrue representation of or breach of warranty, by the
Seller or the Owners in any part of this Agreement;
(b) the breach of or nonfulfillment of any covenant, agreement
or undertaking of the Seller or the Owners in this Agreement;
47
(c) any debt, liability or obligation, direct or indirect,
fixed contingent or otherwise not included in the Assumed Liabilities,
that relates to the Seller or the Owners and is based upon or arises from
any act or omission, transaction, circumstance, state of facts or other
condition occurring or existing on or before the Closing Date, due or
payable, known by the Seller or the Owners on or prior to the Closing
Date and not disclosed to the Purchaser in writing on or prior to the
Closing Date;
(d) any obligation for Taxes of the Owners for any period (or
portion thereof) prior to the Closing Date;
(e) any Retained Liabilities;
(f) the failure of the Seller or the Owners to obtain any
clearance certificate or similar document required by any taxing
Authority in order to relieve the Purchaser of any obligation to withhold
any portion of the Purchase Price or in order to avoid any successor
liability for Taxes;
(g) except as otherwise provided in Section 4.11(e), any
liability, expense, cost, tax or obligation of any nature with respect to
such current or former employee or other individual arising in connection
with group health plan coverage required under COBRA; and
(h) any liability, expense or obligation of any nature arising
out of or relating to Seller's use (or its customers' use) of the Content
Manager software.
8.4. LIMITATION ON INDEMNIFICATION.
Except for claims by Purchaser pursuant to Section 8.3(e) or (g) and
claims involving fraud or willful or intentional misrepresentation (which
claims will not be subject to limitation pursuant to this Section 8.4) both
Purchaser's on the one hand, and Seller and Owners, on the other hand,
indemnification obligations under this Section 8 shall be limited to (i)
Eight Million Dollars ($8,000,000) with respect to all indemnification claims
brought within fourteen (14) months after the Closing Date, and (ii) Four
Million Dollars ($4,000,000) with respect to all indemnification claims
brought more than fourteen (14) months after the Closing Date (the
"INDEMNIFICATION CAP").
8.5. EXCEPTION AMOUNT.
Except for claims by Purchaser pursuant to Section 8.3(e) or (g) and
claims involving fraud or willful or intentional misrepresentation (which
claims shall not be subject to this Section 8.5), the Purchaser shall not be
entitled to any indemnification under this Section 8 unless the aggregate
amount of all claims is more than Two Hundred Thousand Dollars ($200,000)
(the "EXCEPTION AMOUNT") and then only to the extent in excess of the
Exception Amount. Subject to Section 8.4, the Indemnified Party shall be
entitled to full indemnification of all claims in excess of the Exception
Amount. The parties hereto do not intend that the Exception Amount be deemed
to be a definition of what is "material" for any purpose in this Agreement.
48
8.6. REDUCTION OF INDEMNIFICATION CLAIMS.
All claims for indemnification by any party hereto shall be determined
net of: (a) any proceeds of insurance coverage actually paid to the
Indemnified Party with respect to such claim. If there is a dispute as to
whether any indemnification claim is covered by insurance but not as to the
underlying reason giving rise to the claim, the Indemnifying Party shall
nonetheless pay the Indemnified Party the amount of the claim and if
insurance coverage is ever accepted by the relevant insurance company or
required by an Authority, the Indemnified Party shall refund the
indemnification amount to the Indemnifying Party up to the insurance coverage
actually received by the Indemnified Party, and the Indemnifying Party shall
have no claim or cause of action against such insurance company or Authority;
and (b) any tax benefit actually recognized and utilized to offset or reduce
the tax liability of the Indemnified Party in the year of the claim.
8.7. CLAIMS FOR INDEMNIFICATION.
(a) GENERAL. The parties intend that all indemnification
claims be made as promptly as practicable by the party seeking
indemnification (the "INDEMNIFIED PARTY"). Whenever any claim will arise
for indemnification hereunder the Indemnified Party will promptly notify
the party from whom indemnification is sought (the "INDEMNIFYING PARTY")
of the claim and, when known, the facts constituting the basis for such
claim. The failure so to notify the Indemnifying Party will not relieve
the Indemnifying Party of any liability that it may have to the
Indemnified Party except to the extent the Indemnifying Party
demonstrates that the defense of such action is materially prejudiced
thereby.
(b) CLAIMS BY THIRD PARTIES. With respect to claims made by
third parties, the Indemnifying Party will be entitled to assume control
of the defense of such action or claim with counsel reasonably
satisfactory to the Indemnified Party; provided, however, that:
(i) the Indemnified Party will be entitled to
participate in the defense of such claim and to employ counsel at
its own expense to assist in the handling of such claim;
(ii) no Indemnifying Party will consent to (A) the entry
of any judgment or enter into any settlement that does not include
as an unconditional term thereof the giving by each claimant or
plaintiff to each Indemnified Party of a release from all
liability in respect of such claim or (B) if, pursuant to or as a
result of such consent or settlement, injunctive or other
equitable relief would be imposed against the Indemnified Party or
such judgment or settlement could materially interfere with the
business, operations or assets of the Indemnified Party; and,
(iii) if the Indemnifying Party does not assume control of
the defense of such claim in accordance with the foregoing
provisions within ten (10) business days after receipt of notice
of the claim, the Indemnified Party will have the right to defend
such claim in such manner as it may deem appropriate at the cost
and
49
expense of the Indemnifying Party, and the Indemnifying Party
will promptly reimburse the Indemnified Party therefore in
accordance with this Article 8; provided that the Indemnified
Party will not be entitled to consent to the entry of any judgment
or enter into any settlement of such claim that does not include
as an unconditional term thereof the giving by each claimant or
plaintiff to each Indemnifying Party of a release from all
liability in respect of such claim without the prior written
consent of the Indemnifying Party if, pursuant to or as a result
of such consent or settlement, injunctive or other equitable
relief would be imposed against the Indemnifying Party or such
judgment or settlement could materially interfere with the
business, operations or assets of the Indemnifying Party.
(c) REMEDIES CUMULATIVE. The remedies provided herein will be
cumulative and will not preclude assertion by any party of any rights or
the seeking of any other remedies against any other party.
9. MISCELLANEOUS PROVISIONS.
9.1. EXPENSES.
The Purchaser and the Owners will each bear their own costs and
expenses relating to the transactions contemplated hereby, including without
limitation, fees and expenses of legal counsel, accountants, investment
bankers, brokers or finders, printers, copiers, consultants or other
representatives for the services used, hired or connected with the
transactions contemplated hereby, it being expressly understood and agreed
that the Owners and not the Seller will bear all such costs and expenses of
the Seller and will not use funds of the Seller to pay such costs and
expenses.
9.2. AMENDMENT AND MODIFICATION.
This Agreement may not be amended or modified by the parties hereto
except by means of a writing duly executed by each of the parties hereto.
9.3. WAIVER OF COMPLIANCE; CONSENTS.
Any failure of a party to comply with any obligation, covenant,
agreement or condition herein may be expressly waived in writing by the party
entitled hereby to such compliance, but such waiver or failure to insist upon
strict compliance with such obligation, covenant, agreement or condition will
not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure. No single or partial exercise of a right or remedy will
preclude any other or further exercise thereof or of any other right or
remedy hereunder. Whenever this Agreement requires or permits the consent by
or on behalf of a party, such consent will be given in writing in the same
manner as for waivers of compliance.
50
9.4. NO THIRD PARTY BENEFICIARIES.
Nothing in this Agreement will entitle any person or entity (other
than a party hereto and his, her or its respective successors and assigns
permitted hereby) to any claim, cause of action, remedy or right of any kind.
9.5. NOTICES.
All notices, requests, demands and other communications required or
permitted hereunder will be made in writing and will be deemed to have been
duly given and effective: (i) on the date of delivery, if delivered
personally or sent by Federal Express or another nationally recognized
overnight delivery service; (ii) on the earlier of the fifth (5th) day after
mailing or the date of the return receipt acknowledgment, if mailed, postage
prepaid, by certified or registered mail, return receipt requested; or (iii)
on the date of transmission, if sent by facsimile, telecopy, telegraph, telex
or other similar telegraphic communications equipment and receipt thereof is
confirmed telephonically:
If to the Seller and the Owners:
To: Xxxxxxx Printing, Limited Partnership
00 Xxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx XX
Fax: (000) 000-0000
With copies to:
Xxxxxxxx, Xxxxxxx & Xxxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
or to such other person or address as the Representative will furnish to the
other parties hereto in writing in accordance with this subsection.
If to Purchaser:
To: Xxxxxxx Xxxxxxx, Inc.
Xxx Xxxxxxx Xxxxxx
Xx. Xxxx, XX 00000
Attn.: Xxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
51
With a copy to:
Xxxxxxxxxxx Xxxxx & Xxxxxxxx LLP
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000, Xxxxx XXX
Xxxxxxxxxxx, XX 00000
Attn.: Xxxxx X. Xxxxx
Fax: (000) 000-0000
or to such other person or address as the Purchaser will furnish to the other
parties hereto in writing in accordance with this subsection.
9.6. ASSIGNMENT.
This Agreement and all of the provisions hereof will be binding upon
and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned (whether
voluntarily, involuntarily, by operation of law or otherwise) by any of the
parties hereto without the prior written consent of the other parties,
PROVIDED, HOWEVER, that the Purchaser may assign its rights (but not its
obligations) under this Agreement, in whole or in any part, and from time to
time, to a wholly owned, direct or indirect, subsidiary of Xxxxxxx.
9.7. GOVERNING LAW.
This Agreement and the enforcement thereof shall be governed by and
construed in accordance with the internal substantive laws of the State of
Minnesota (without regard to the laws of conflict that might otherwise apply)
as to all matters, including without limitation matters of validity,
construction, effect, performance and remedies.
9.8. ARBITRATION.
(a) The parties agree that any dispute arising out of or
relating to this Agreement or the formation, breach, termination or
validity thereof, except for injunctive relief contemplated by Section
9.12 (a "DISPUTE") will be resolved as follows. If the Dispute cannot be
settled through direct discussions, the parties will first try to settle
the Dispute in an amicable manner by mediation under the Commercial
Mediation Rules of the American Arbitration Association, before resorting
to arbitration. Any Dispute that has not been resolved within 60 days of
the initiation of the mediation procedure (the "MEDIATION DEADLINE") will
be settled by binding arbitration in Chicago, Illinois by a panel of
three (3) arbitrators, selected in accordance with subsection (b) below,
in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the "AMERICAN ARBITRATION RULES"). The
arbitrators in any such arbitration will have the discretion to order a
pre-hearing exchange of information by the parties, including, without
limitation, production of requested documents, exchange of summaries of
testimony and proposed witnesses, and examination by deposition of
parties. The arbitrators are not empowered to award damages in excess of
compensatory damages, as
52
limited by this Agreement, and each party hereby irrevocably waives
any damages in excess of compensatory damages. Judgment upon any
arbitration award may be entered in any court having jurisdiction
thereof and the parties consent to the jurisdiction of the courts of
the State of Minnesota for this purpose. The parties agree that
service of process and of any notices required in connection with any
arbitration hereunder or any related court proceedings may be given in
the manner provided for the giving of notices under this Agreement as
set forth in Section 9.5.
(b) Within twenty (20) days of the Mediation Deadline, the
Purchaser will nominate one arbitrator and the Seller and the Owners,
together, will nominate one arbitrator. Within thirty (30) days of the
nomination and appointment of the two arbitrators, the two arbitrators
shall select a third arbitrator, and if they fail to do so, a neutral
arbitrator shall be chosen in accordance with the American Arbitration
Rules.
9.9. COUNTERPARTS.
This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.10. HEADINGS.
The table of contents and the headings of the sections and subsections
of this Agreement are inserted for convenience only and shall not constitute
a part hereof.
9.11. ENTIRE AGREEMENT.
This Agreement, the Disclosure Schedule and the exhibits and other
writings referred to in this Agreement or in the Disclosure Schedule or any
such exhibit or other writing are part of this Agreement, together they
embody the entire agreement and understanding of the parties hereto in
respect of the transactions contemplated by this Agreement and together they
are referred to as this "AGREEMENT" or the "AGREEMENT". There are no
restrictions, promises, warranties, agreements, covenants or undertakings,
other than those expressly set forth or referred to in this Agreement. This
Agreement supersedes all prior agreements and understandings between the
parties with respect to the transaction or transactions contemplated by this
Agreement. Any provision of this Agreement that becomes invalid or
unenforceable under applicable Law will be stricken to the extent necessary
and the remainder of such provisions and the remainder of this Agreement will
continue in full force and effect.
9.12. INJUNCTIVE RELIEF.
It is expressly agreed among the parties hereto that monetary damages
would be inadequate to compensate a party hereto for any breach by any other
party of its agreements and covenants in this Agreement. Accordingly, the
parties agree and acknowledge that any such violation or threatened violation
will cause irreparable injury to the other and that, in addition to any other
remedies which may be available, such party will be entitled to seek
injunctive relief against the threatened breach of this Agreement hereof or
the continuation of any such breach
53
without the necessity or proving actual damages and may seek to specifically
enforce the terms thereof.
9.13. CERTAIN DEFINITIONS.
For purposes of this Agreement, the terms:
(a) "ENVIRONMENTAL LAW(S)" means any common law or duty,
caselaw or other Law, that regulates, creates standards for or imposes
liability or standards of conduct concerning any element, compound,
pollutant, contaminant, or toxic or hazardous substance, material or
waste, or any mixture thereof, or relates in any way to emissions or
releases into the environment or ambient environmental conditions, or
conduct affecting such matters. Such laws shall include, but not be
limited to, the National Environmental Policy Act, 42 U.S.C. Sections
4321 et seq., the Comprehensive Environmental Response, Compensation,
and Liability Act, 42 U.S.C. Sections 9601 et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Sections 6901 et seq., the
Federal Water Pollution Control Act, 33 U.S.C. Sections 1251 et seq.,
the Federal Clean Air Act, 42 U.S.C. Sections 7401 et seq., the Toxic
Substances Control Act, 15 U.S.C. Sections 2601 et seq., the Emergency
Planning and Community Right to Know Act, 42 U.S.C. Section 11011, the
Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Section
136, and any caselaw interpretations, amendments or restatements
thereof, or similar enactments thereto, as is now or at any time
hereafter may be in effect, as well as their international, state and
local counterparts.
(b) "ENVIRONMENTALLY REGULATED MATERIALS" means any element,
compound, pollutant, contaminant, substance, material or waste, or any
mixture thereof, designated, listed, referenced, regulated or identified
pursuant to any Environmental Law or any Occupational Safety and Health
Law.
(c) "MATERIAL ADVERSE EFFECT" means an individual or cumulative
material adverse change in or material adverse effect on the business,
customers, customer relations, operations, properties, working capital
condition (financial or otherwise), assets, properties or liabilities of
the Seller, taken as a whole, or the Purchaser, Xxxxxxx and their
subsidiaries, taken as a whole, as the case may be or would prevent the
Seller and the Owners, on the one hand, or the Purchaser, on the other
hand, from consummating the transactions contemplated hereby.
(d) "OCCUPATIONAL SAFETY AND HEALTH LAWS" means any common law
or duty caselaw or other Law, that is designed to provide safe and
healthful working conditions or reduce occupational safety and health
hazards. Such laws shall include, but not be limited to, the
Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq., the
Hazard Communication Act, 29 U.S.C. Section 651 et seq. and any caselaw
interpretations, amendments or restatements thereof, or similar
enactments thereto, as is now or at any time hereafter may be in effect,
as well as their international, state and local counterparts.
(e) "SELLER'S KNOWLEDGE" and other terms of similar import
means (i) the actual knowledge or awareness of the Seller (which shall
mean the actual knowledge and
54
awareness after due inquiry of the Owners, officers, directors and key
employees of the Seller listed on Exhibit 9.13(e)), and (ii) the
knowledge or awareness which a prudent business person would have
obtained in the conduct of such business persons business.
(f) "TAXES" means all federal, state, local, foreign and other
net income, gross income, gross receipts, sales, use, ad valorem,
transfer, franchise, profits, license, lease, service, service use,
withholding, payroll, employment, excise, severance, stamp, occupation,
premium, real or personal property, windfall profits, customs, duties or
other taxes, fees, assessments, charges or levies of any kind whatever,
together with any interest and any penalties, additions to tax or
additional amounts with respect thereto, and the term "TAX" means any one
of the foregoing Taxes.
(g) "TAX RETURNS" means all returns, declarations, reports,
statements and other documents required to be filed with any Authority in
respect of Taxes, and the term "TAX RETURN" means any one of the
foregoing Tax Returns.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
55
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
XXXXXXX XXXXXXX, INC. XXXXXXX PRINTING, LIMITED
PARTNERSHIP
By: Xxxxxxx Printing Corp.
Its: General Partner
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxx XX
--------------------- -------------------------
Its: SECRETARY Its: PRESIDENT
XXXXXXX CORPORATION XXXXXXX PRINTING CORP.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxx XX
--------------------- -------------------------
Its: VICE PRESIDENT, GENERAL COUNSEL Its: PRESIDENT
AND SECRETARY
/s/ Xxxxxx X. Xxxxxxx XX
---------------------------------
Xxxxxx X. Xxxxxxx XX
/s/ Xxx X. Xxxxxxx
---------------------------------
Xxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxx
---------------------------------
Xxxxx X. Xxxxxx
THE XXX AND XXXX XXXXXXX FAMILY TRUST
By: /s/ M. Xxxxxx Xxxxxxx
--------------------------------
Its: Trustee, as Trustee thereunder
and not individually
56
TABLE OF CONTENTS
1. PURCHASE OF ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Assets to be Purchased.. . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Liabilities Assumed. . . . . . . . . . . . . . . . . . . . . . . . . 3
1.3. Purchase Price.. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.4. Allocation of Purchase Price.. . . . . . . . . . . . . . . . . . . . 6
1.5. Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.6. Instruments of Transfer to Purchaser.. . . . . . . . . . . . . . . . 7
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE OWNERS.. . . . . . . . 8
2.1. Disclosure Schedule. . . . . . . . . . . . . . . . . . . . . . . . . 8
2.2. Corporate Organization.. . . . . . . . . . . . . . . . . . . . . . . 8
2.3. Capitalization.. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.4. Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.5. Non-Contravention. . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.6. Consents and Approvals.. . . . . . . . . . . . . . . . . . . . . . . 10
2.7. Financial Statements.. . . . . . . . . . . . . . . . . . . . . . . . 10
2.8. Absence of Undisclosed Liabilities.. . . . . . . . . . . . . . . . . 11
2.9. Absence of Certain Changes.. . . . . . . . . . . . . . . . . . . . . 11
2.10. Assets.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.11. Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.12. Receivables and Payables . . . . . . . . . . . . . . . . . . . . . . 13
2.13. Intellectual Property Rights.. . . . . . . . . . . . . . . . . . . . 14
2.14. Litigation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.15. Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.16. Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.17. Contracts and Commitments; No Default. . . . . . . . . . . . . . . . 18
2.18. Orders, Commitments and Returns. . . . . . . . . . . . . . . . . . . 20
2.19. Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.20. Compliance with Law; Permits and Other Operating Rights. . . . . . . 21
2.21. Environmental and Safety Matters.. . . . . . . . . . . . . . . . . . 21
2.22. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.23. Bank Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.24. Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.25. Absence of Certain Business Practices. . . . . . . . . . . . . . . . 23
2.26. Business Generally.. . . . . . . . . . . . . . . . . . . . . . . . . 23
2.27. Transactions with Certain Persons. . . . . . . . . . . . . . . . . . 24
2.28. Customers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.29. Accuracy of Information. . . . . . . . . . . . . . . . . . . . . . . 24
3. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER. . . . . . . . . . . 25
3.1. Corporate Organization.. . . . . . . . . . . . . . . . . . . . . . . 25
i
3.2. Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.3. Non-Contravention. . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.4. Consents and Approvals.. . . . . . . . . . . . . . . . . . . . . . . 26
3.5. Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.6. Financial Ability to Perform.. . . . . . . . . . . . . . . . . . . . 26
4. COVENANTS OF THE PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.1. Conduct of Business of the Seller. . . . . . . . . . . . . . . . . . 26
4.2. No Solicitation of Alternate Transaction; Termination Fee. . . . . . 29
4.3. Access to Purchaser. . . . . . . . . . . . . . . . . . . . . . . . . 29
4.4. Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.5. Filings; Consents; Removal of Objections.. . . . . . . . . . . . . . 30
4.6. Further Assurances; Cooperation; Notification. . . . . . . . . . . . 31
4.7. Supplements to Disclosure Schedule.. . . . . . . . . . . . . . . . . 32
4.8. Public Announcements.. . . . . . . . . . . . . . . . . . . . . . . . 32
4.9. Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.10. Bulk Transfers.. . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.11. Employee Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.12. Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.13. Additional Post-Closing Obligations of the Seller. . . . . . . . . . 36
4.14. Covenant Not to Compete; Non-Solicitation. . . . . . . . . . . . . . 37
4.15. Real Estate Matters. . . . . . . . . . . . . . . . . . . . . . . . . 37
4.16. Use of Name. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.17. Termination of 401(k) Plan.. . . . . . . . . . . . . . . . . . . . . 39
4.18. Workers' Compensation. . . . . . . . . . . . . . . . . . . . . . . . 39
4.19. Environmental Liability Protection.. . . . . . . . . . . . . . . . . 40
4.20. Intellectual Property Matters. . . . . . . . . . . . . . . . . . . . 40
5. CONDITIONS TO PURCHASER'S OBLIGATIONS.. . . . . . . . . . . . . . . . . . . 40
5.1. Representations and Warranties True. . . . . . . . . . . . . . . . . 40
5.2. Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.3. Required Approvals and Consents. . . . . . . . . . . . . . . . . . . 41
5.4. Adverse Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.5. No Proceeding or Litigation. . . . . . . . . . . . . . . . . . . . . 41
5.6. Opinion of Seller's Counsel. . . . . . . . . . . . . . . . . . . . . 41
5.7. Legislation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.8. Certificates.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.9. Employment, Consulting and Non-Compete Agreements. . . . . . . . . . 42
5.10. Appropriate Documentation. . . . . . . . . . . . . . . . . . . . . . 42
5.11. HSR Filing.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.12. Title Commitments and Surveys. . . . . . . . . . . . . . . . . . . . 42
5.13. Facilities Lease.. . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.14. Environmental Liability Protection.. . . . . . . . . . . . . . . . . 42
5.15. Intellectual Property Matters. . . . . . . . . . . . . . . . . . . . 43
6. CONDITIONS TO OBLIGATIONS OF THE SELLER AND THE OWNERS. . . . . . . . . . . 43
ii
6.1. Representations and Warranties True. . . . . . . . . . . . . . . . . 43
6.2. Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.3. Corporate Approvals. . . . . . . . . . . . . . . . . . . . . . . . . 43
6.4. No Proceeding or Litigation. . . . . . . . . . . . . . . . . . . . . 43
6.5. Certificates.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.6. Payment of Consideration.. . . . . . . . . . . . . . . . . . . . . . 44
6.7. HSR Filing.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.8. Opinion of Purchaser's Counsel.. . . . . . . . . . . . . . . . . . . 44
7. TERMINATION AND ABANDONMENT.. . . . . . . . . . . . . . . . . . . . . . . . 44
7.1. Termination by Mutual Consent. . . . . . . . . . . . . . . . . . . . 44
7.2. Termination by Either the Seller or the Purchaser. . . . . . . . . . 44
7.3. Termination by the Purchaser.. . . . . . . . . . . . . . . . . . . . 45
7.4. Termination by the Seller. . . . . . . . . . . . . . . . . . . . . . 45
7.5. Procedure and Effect of Termination. . . . . . . . . . . . . . . . . 45
8. SURVIVAL AND INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . 46
8.1. Survival of Representations, Warranties and Covenants;
Investigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.2. Indemnification by the Purchaser.. . . . . . . . . . . . . . . . . . 46
8.3. Indemnification by the Seller and the Owners.. . . . . . . . . . . . 47
8.4. Limitation on Indemnification. . . . . . . . . . . . . . . . . . . . 48
8.5. Exception Amount.. . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.6. Reduction of Indemnification Claims. . . . . . . . . . . . . . . . . 49
8.7. Claims for Indemnification.. . . . . . . . . . . . . . . . . . . . . 49
9. MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 50
9.1. Expenses.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
9.2. Amendment and Modification.. . . . . . . . . . . . . . . . . . . . . 50
9.3. Waiver of Compliance; Consents.. . . . . . . . . . . . . . . . . . . 50
9.4. No Third Party Beneficiaries.. . . . . . . . . . . . . . . . . . . . 51
9.5. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
9.6. Assignment.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.7. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.8. Arbitration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.9. Counterparts.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.10. Headings.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.11. Entire Agreement.. . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.12. Injunctive Relief. . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.13. Certain Definitions. . . . . . . . . . . . . . . . . . . . . . . . . 54
iii
The following documents are exhibits to the Asset Purchase Agreement
and have been omitted pursuant to Item 601(b)(2) of Regulation S-K. These
exhibits will be furnished supplementally to the Commission upon request.
LIST OF EXHIBITS
NAME OF EXHIBIT NUMBER OF EXHIBIT
--------------- -----------------
List of Trade Names to be Purchased. . . . . . . . . . . . . . . . . . Exhibit 1.1(a)
Excluded Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit 1.1(b)
Liabilities Undertaking. . . . . . . . . . . . . . . . . . . . . . . . . .Exhibit 1.2
Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit 1.3(b)
Allocation of Purchase Price Among the Assets. . . . . . . . . . . . . . .Exhibit 1.4
Xxxx of Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Exhibit 1.6
Employees to be Hired. . . . . . . . . . . . . . . . . . . . . . . . .Exhibit 4.11(a)
Schedule of Benefits . . . . . . . . . . . . . . . . . . . . . . . . .Exhibit 4.11(c)
Opinion of Seller's Counsel. . . . . . . . . . . . . . . . . . . . . . . .Exhibit 5.6
Employment Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . .Exhibit 5.9
Non-Competition Agreement. . . . . . . . . . . . . . . . . . . . . . . Exhibit 5.9(a)
Opinion of Purchaser's Counsel . . . . . . . . . . . . . . . . . . . . . .Exhibit 6.8
Owner Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Exhibit 8.3
List of Key Employees. . . . . . . . . . . . . . . . . . . . . . . . .Exhibit 9.13(e)
LIST OF DEFINED TERMS
TERM PAGE
401(k) Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
American Arbitration Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Antitrust Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Assumed Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Assumed Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Authorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Boston Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
COBRA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Condo Landlords. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Copyrights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Xxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
DEP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Disclose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Disclosure Schedule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Dispute. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Employment Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Environmental Claim. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Environmental Law(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Environmentally Regulated Materials. . . . . . . . . . . . . . . . . . . . . . . . 55
ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Escrow Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Escrow Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Exception Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Excluded Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Fleet Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
FTC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
X. Xxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
GACC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Xxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
HSR Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Indemnification Cap. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Indemnified Party. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Indemnifying Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Intellectual Property Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Jain Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
X.Xxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Latest Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Liabilities Undertaking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Liability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
License Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Limited Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Material Adverse Effect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Material Customer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Mediation Deadline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Xxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
New York Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Non-Competition Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Occupational Safety and Health Laws. . . . . . . . . . . . . . . . . . . . . . . . 55
Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Patents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Pension Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Permitted Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Phase II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Purchaser. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Purchaser's Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Purchaser's Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Purchaser Indemnified Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Real Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Registered Intellectual Property Rights. . . . . . . . . . . . . . . . . . . . . . 14
Retained Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Seller's Agents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Seller's Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Seller's Loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Seller's Losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Seller Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Seller Severance Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Service Marks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Surveys. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Tax Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Tax Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Third Party Intellectual Property Rights . . . . . . . . . . . . . . . . . . . . . 15
Trade Secrets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Transferred Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
WARN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Welfare Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Year 2000 Compliant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
