EXECUTION COPY
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of September 1, 2004 by and among KINCO, LTD., a Florida limited
partnership ("Seller"), KINCO, INC., a Florida corporation (the "General
Partner"), XXXXX X. XXXXX MARITAL TRUST (the "Trust"), BANCBOSTON VENTURES,
INC., a Massachusetts corporation ("BancBoston"), XXXXXX X. XXXX ("King") and
XXXXXX XXXXX ("Xxxxx", and, together with the Trust, BancBoston and King, the
"Limited Partners"), on the one hand, and ATRIUM WINDOWS AND DOORS OF FLORIDA,
LLC, a Delaware limited liability company ("Buyer"), and ATRIUM COMPANIES, INC.,
a Delaware corporation ("Atrium"), on the other hand. Seller, the General
Partner and the Limited Partners are referred to herein collectively as the
"Selling Parties" (each, individually, a "Selling Party").
WITNESSETH:
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller, substantially all of the assets used in connection with the
business of Seller on the terms and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained in this Agreement, each of the parties hereto hereby agrees
as follows:
ARTICLE 1. DEFINITIONS
1.1 "AAA" shall have the meaning assigned to such term in Section 12.4
hereof.
1.2 "Accounts Receivable" shall mean all amounts owed to Seller by its
customers and others as of the Closing Date that are classified as "accounts
receivable" in accordance with GAAP as consistently applied in the preparation
of the Financial Statements.
1.3 "Affiliate" shall mean, with respect to any person, any other
person that, directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with, such person. For
purposes of this definition, "control" (including, with its correlative
meanings, the terms "controlling," "controlled by" and "under common control
with"), as applied to any person, shall include the possession, directly or
indirectly, of the power to vote more than fifty percent (50%) of the securities
having voting power for the election of directors of such person or otherwise to
direct or cause the direction of the management and policies of that person,
including by ownership or control of more than fifty percent (50%) of the
capital or profits interest of such entity, whether through the ownership of
voting securities, by contract or otherwise.
1.4 "Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement dated as of the Closing Date by and among the parties
hereto
relating to the Assumed Agreements and the Assumed Liabilities, substantially in
the form of Exhibit A hereto.
1.5 "Assumed Agreements" shall mean those agreements, contracts,
equipment leases, commitments and other written obligations listed on Schedule
1.5, together with all of the open purchase orders and sales contracts of Seller
issued or entered into in the ordinary course of business on or prior to the
Closing Date.
1.6 "Assumed Liabilities" shall mean (i) all liabilities and
obligations of Seller arising in the ordinary course of business of Seller
(including such amounts reflected in the Closing Balance Sheet), (ii) all
liabilities and obligations arising on or after the Closing Date under the
Assumed Agreements, (iii) all liabilities and obligations arising on or after
the Closing Date relating to Buyer's use, occupancy or lease of the
Manufacturing Facility, (iv) all liabilities and obligations arising after the
Closing Date in connection with the operation of the Business or ownership of
the Purchased Assets, and (v) all liabilities or obligations relating to
environmental conditions that arise after the Closing Date (other than such
environmental conditions that existed prior to the Closing Date), at or on any
of the Real Estate; provided, however, that in no event shall the Assumed
Liabilities include any Excluded Liabilities (as defined in Section 1.31
hereof).
1.7 "Xxxx of Sale" shall mean the Xxxx of Sale and Assignment dated as
of the Closing Date evidencing the transfer of the Purchased Assets from Seller
to Buyer, substantially in the form of Exhibit B hereto.
1.8 "Books and Records" shall mean all books and records, whether in
physical, electronic or other media, related to the Business, the Purchased
Assets or the employees of Seller, including, without limitation, (i) financial
books and records, (ii) mailing, distribution, customer and supplier lists,
(iii) records with respect to pricing, production, product development, sales
volume, payment history, costs and legal, Tax and environmental and regulatory
matters, (iv) employment records, and (v) records relating to Intellectual
Property Rights.
1.9 "Breaching Party" shall have the meaning assigned to such term in
Section 9.1(a) hereof.
1.10 "Business" shall mean the manufacture, fabrication, distribution,
marketing and installation by Seller of windows and any products related
thereto.
1.11 "Buy/Sell Agreement" shall have the meaning assigned to such term
in Section 6.12 hereof.
1.12 "Cash Adjustment" shall have the meaning assigned to such term in
Section 2.3(a) hereof.
1.13 "Cash and Cash Equivalents" shall mean currency, certificates of
deposit, commercial paper, money market mutual funds, repurchase agreements in
respect of any of the foregoing, bank accounts and other similar investments.
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1.14 "Claim Notice" shall have the meaning assigned to such term in
Section 10.4(a) hereof.
1.15 "Closing" shall mean the consummation of the transactions
contemplated by this Agreement and the Related Agreements (the "Contemplated
Transactions").
1.16 "Closing Balance Sheet" shall have the meaning assigned to such
term in Section 2.3(a) hereof.
1.17 "Closing Date" shall mean the date on which the Closing actually
takes place.
1.18 "Code" shall mean the Internal Revenue Code of 1986, as amended.
All citations to provisions of the Code, or to the Treasury regulations
promulgated thereunder, shall include any amendments thereto and any substitute
or successor provisions thereto.
1.19 "Confidential Information" shall mean all confidential
information, know-how, inventions, designs, customer lists, processes, computer
programs (including source code) and technical data and information.
1.20 "Contemplated Transactions" shall have the meaning assigned to
such term in Section 1.15 hereof.
1.21 "Deductible" shall have the meaning assigned to such term in
Section 10.3(a) hereof.
1.22 "Employment Agreements" shall have the meaning assigned to such
term in Section 6.14 hereof.
1.23 "Encumbrances" shall have the meaning assigned to such term in
Section 2.7 hereof.
1.24 "Environmental and Safety Laws" means any and all applicable
federal, state and local laws (including but not limited to common law),
statutes, ordinances, judgments, decrees, licenses, permits, rules and
regulations, or other binding contractual requirement relating to pollution or
protection of human health and the environment, worker health and safety,
emissions, discharges, releases or threatened releases of any Hazardous Material
(as defined in Section 1.36), or otherwise relating to the use, treatment,
storage, disposal, transport or handling of any Hazardous Material.
1.25 "Environmental or Safety Claim" means any claim, demand,
complaint, action, suit, proceeding, investigation or notice by any Person
alleging potential liability arising out of, based on, or relating to
Environmental and Safety Laws or the presence of any Hazardous Material at any
location.
1.26 "ERISA" shall have the meaning assigned to such term in Section
4.16(a) hereof.
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1.27 "Escrow Agent" shall mean Xxxxx Fargo Bank Texas, N.A.
1.28 "Escrow Agreement" shall have the meaning assigned to such term in
Section 2.2(a) hereof.
1.29 "Estimated Closing Balance Sheet" shall mean the estimated closing
balance sheet attached as Exhibit K hereto, which was prepared by Seller in
accordance with GAAP and setting forth the estimated Working Capital of Seller
as of the Closing Date.
1.30 "Excluded Assets" shall mean (i) all Cash and Cash Equivalents of
Seller as of 12:01 a.m. on the Closing Date, (ii) the Manufacturing Facility,
(iii) all minute books, ownership records and seals of Seller, (iv) all Books
and Records that Seller is required by law to retain in its possession, (v) all
claims of Seller for Tax refunds related to any Tax period (or portion thereof)
ending prior to the Closing Date (net of any amounts that may be owed to Buyer
as a result of any breach of the representations or warranties set forth in
Section 4.13 or pursuant to Section 10.1(d) hereof), (vi) all rights of Seller
in connection with any assets of any Plan (unless such Plan is expressly adopted
in writing by Buyer), (vii) all rights of the Selling Parties arising under this
Agreement, (viii) all insurance policies of Seller and all rights as primary
beneficiary to make claims or receive proceeds thereunder (subject to Buyer's
and Atrium's rights to be named as additional insureds on such policies pursuant
to Section 8.11 hereof); and (ix) all other tangible and intangible assets of
Seller set forth on Schedule 1.30.
1.31 "Excluded Liabilities" shall mean (a) any liabilities or
obligations of Seller relating to environmental conditions, known or unknown,
existing on or prior to the Closing Date, at, on or in the near vicinity of any
real property or facility (including the Real Estate) used or owned at any time
by Seller or any of its predecessors-in-interest; (b) any federal, state, local
or foreign Taxes of any kind (including any cost, penalty, interest expense or
fine related to any Tax deficiency) imposed by any taxing authority payable by,
or attributable to, or imposed on or with respect to, any Selling Party or the
Purchased Assets with respect to any Tax period (or portion thereof) ending on
or prior to the Closing Date, except for such sales, use and other tax and
license amounts expressly accrued for on the Closing Balance Sheet; (c) any
indebtedness of any of the Selling Parties owed to any other Selling Party or
(other than as described in clause (k) below) to any Selling Party's management
or employees; (d) any indebtedness for borrowed money or any guarantee of
indebtedness for borrowed money of any Selling Party; (e) all liabilities and
obligations arising out of or related to any litigation, arbitration or other
proceeding pending or, to the Knowledge of Seller, threatened against any of the
Selling Parties or their Affiliates as of the Closing Date; (f) any liabilities
or obligations of any of the Selling Parties in respect of any agreement,
contract, lease or commitment other than the Assumed Agreements; (g) any capital
lease obligations of Seller; (h) any liability or obligation under or related to
any Plan, including any employee benefit plan, within the meaning of Section
3(3) of ERISA, which any of the Selling Parties or any of their ERISA Affiliates
(as defined in Section 4.16(a) of this Agreement) has ever sponsored or to which
any of them has ever contributed (except for liabilities or obligations arising
after the Closing Date under any such Plan that is expressly adopted in writing
by Buyer
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or Atrium); (i) any deferred compensation accrued or owing by any Selling Party
as of the Closing Date (including any accrued bonuses owing to Gates Dearen
and/or Xxxxxx X. Xxxx); (j) any liability or obligation under the WARN Act (or
any similar state law) arising or related to any period prior to the Closing
Date; (k) except for such amounts expressly accrued on the Closing Balance
Sheet, any liability for compensation, accrued bonuses, benefits, vacation pay,
sick leave or severance pay, or any fines or penalties assessed by any
governmental authority that relates to services performed before the Closing by
any employees of Seller or other service providers for Seller; (l) any fees
and/or expenses of the Selling Parties relating to the Contemplated
Transactions; (m) any liabilities or obligations relating to the Excluded Assets
or not arising out of the Business; (n) any outstanding and/or unpaid checks
written by Seller as of the Closing Date; (o) any liabilities or obligations for
professional fees of Seller (including but not limited to any audit, attorney or
brokerage fees); (p) any liabilities of Seller not covered, in whole or in part,
by insurance as a result of Seller's lack of an occurrence-based commercial
general liability policy (whether primary, excess or umbrella) during the period
from July 21, 2003 to January 31, 2004, as described in Schedule 4.27; (q) any
liability related to any claim made by any current or former employee of Seller
(including but not limited to any worker's compensation claims) to the extent
such claim relates to such employee's employment with Seller prior to the
Closing Date; (r) any liabilities of Seller related to or associated with any
insurance audit or review conducted by any insurance company or any governmental
authority, including any monies deemed to be owed as a result thereof, regarding
any period prior to the Closing Date; and (s) any other debt or liabilities of
Seller not reflected in the Financial Statements, the Closing Balance Sheet or
on a Schedule hereto.
1.32 "Exhibits" shall mean the Exhibits to this Agreement.
1.33 "Financial Statements" shall mean, collectively, (i) the audited
balance sheets of Seller and related statements of earnings, retained earnings
and cash flows at and for the fiscal years ended December 31, 2003, 2002 and
2001, together with the reports thereon by Seller's independent certified public
accountants (the "Audited Financial Statements"); (ii) the unaudited balance
sheets of Seller and related interim statements of earnings at and for the
quarters ended March 31 and June 30, 2004 (together with the financial
statements referred to in clause (iii) of this Section 1.33, the "Unaudited
Financial Statements"); and (iii) all financial statements required to be
delivered to Buyer pursuant to Section 4.5(b) hereof.
1.34 "Fixed Assets" shall mean all leasehold improvements, machinery,
equipment, auxiliary equipment, fixtures attached to or associated with the
equipment or machinery, machine parts, shop tools and equipment, spare parts,
supplies, office equipment, computers, furniture, furnishings, office supplies,
sales and promotional materials and motor vehicles owned by Seller and used in
connection with the conduct of the Business as currently conducted by Seller on
the Closing Date or that, upon refurbishment, could be used in connection with
the conduct of the Business, including but not limited to those listed on
Schedule 1.34; provided, however, that Fixed Assets shall not include any
Excluded Assets.
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1.35 "GAAP" shall mean United States generally accepted accounting
principles, in effect from time to time, consistently applying the same
principles, policies and practices used in the preparation of the Audited
Financial Statements.
1.36 "Hazardous Material" means any material, substance or compound
which is, or the emission, discharge, transport, storage, treatment or release
of which is, regulated under Environmental and Safety Laws, whether constituting
a useful product or otherwise, including without limitation any pollutant,
contaminant, waste, hazardous waste, hazardous substance, toxic substance,
hazardous material, extremely hazardous material, asbestos, polychlorinated
biphenyl, petroleum, or any refined product, fraction, byproduct or constituent
thereof.
1.37 "Indemnified Losses" shall have the meaning assigned to such term
in Section 10.1 hereof.
1.38 "Indemnified Party" shall have the meaning assigned to such term
in Section 10.3(a) hereof.
1.39 "Indemnifying Party" shall have the meaning assigned to such term
in Section 10.4(a) hereof.
1.40 "Indemnity Caps" shall have the meaning assigned to such term in
Section 10.3 hereof.
1.41 [Intentionally omitted.]
1.42 "Intellectual Property Rights" shall have the meaning assigned to
such term in Section 4.26(a) hereof.
1.43 "Inventory" shall mean all raw materials and supplies, work in
process, finished goods, packaging and other manufacturing supplies owned by any
of the Selling Parties as of the Closing Date that is used in connection with
the Business and is classified as "inventory" in accordance with GAAP as applied
in the preparation of the Financial Statements.
1.44 "Knowledge" shall mean, with respect to Seller and the General
Partner, the actual knowledge, after reasonable inquiry, of each of Xxxxxx X.
Xxxx, Xxxxx Xxxxxx, Xxx Xxxx, Xxxxx Xxxxxx, Xxxxx Xxxxxxxx, Xxxxx Xxxx and Xxxxx
Xxxxxxx.
1.45 "Lease Agreement" shall have the meaning assigned to such term in
Section 6.17 hereof.
1.46 "Leased Real Estate" shall mean the real property described on
Schedule 1.46, together with the improvements thereon and the leasehold
interests therein.
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1.47 "Manufacturing Facility" shall mean Seller's window manufacturing
facility located at 0000 Xxx Xxxxx Xxxx, Xxxxx Xxxxxxxxxxxx, Xxxxxxx 00000,
including the improvements and fixtures attached thereto identified on Schedule
1.47.
1.48 "Material Adverse Effect" shall mean, individually or in the
aggregate, a material adverse effect upon the business, operations, properties,
assets, liabilities or financial condition of Seller or the Business, taken as a
whole, that results or is reasonably likely to result in any damage, destruction
or loss to the Business or adjustment to the Business's current earnings of
$100,000 or more.
1.49 "Non-Breaching Party" shall have the meaning assigned to such term
in Section 9.1(a) hereof.
1.50 "Non-Compete Period" shall have the meaning assigned to such term
in Section 11.2 hereof.
1.51 "Owned Real Estate" shall mean the real property described on
Schedule 1.51, together with the improvements thereon and the leasehold
interests therein, which constitutes all of the real property owned by Seller or
its Affiliates and that is used by or in connection with the Business.
1.52 "Parent" shall mean Atrium Corporation, a Delaware corporation.
1.53 "Parent Stock" shall mean the common stock, par value $.01 per
share, of Parent.
1.54 "Permits" shall have the meaning assigned to such term in Section
4.18 hereof.
1.55 "Permitted Encumbrances" shall mean those exceptions to title set
forth on the Title Policy (as defined in Section 6.16) and approved by Buyer,
such approval not to be unreasonably withheld.
1.56 "Person" shall mean any individual, corporation, general or
limited partnership, limited liability company, limited liability partnership,
joint venture, estate, trust, association, organization, governmental body or
other entity or body.
1.57 "Plans" shall have the meaning assigned to such term in Section
4.16(a) hereof.
1.58 "Purchased Assets" shall mean the Accounts Receivable, Assumed
Agreements, Books and Records, Fixed Assets, Intellectual Property Rights,
Inventory, Owned Real Estate (other than the Manufacturing Facility), any and
all monies or damages awarded by any court, arbitrator or administrative body to
Seller after the Closing in connection with the Business (except for, and to the
extent of, any claim for which the Selling Parties are obligated to indemnify
Buyer or Atrium pursuant to Article 10 hereof), all rights against third parties
arising out of the Business after the Closing (including any and all claims of
Seller (including all future claims) or rights as an
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additional insured under any of the current insurance policies listed on
Schedule 4.27), any monies being held in escrow to guaranty any obligation of
the Business (excluding any escrowed funds pursuant to the Escrow Agreement),
and all other assets (whether tangible or intangible) used in or arising out of
the conduct of the Business as currently conducted by the Selling Parties, but
excluding the Excluded Assets.
1.59 "Purchase Price" shall have the meaning assigned to such term in
Section 2.2 hereof.
1.60 "Real Estate" shall mean the Leased Real Estate and the Owned Real
Estate.
1.61 "Related Agreements" means the agreements listed as Exhibits to
this Agreement.
1.62 "Release" means any release, threatened release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching,
migrating or presence of any Hazardous Material in the environment.
1.63 "Safety and Environmental Permits" shall have the meaning assigned
to such term in Section 4.22(a) hereof.
1.64 "Schedules" shall mean the Schedules to this Agreement, as
referred to herein, that have been delivered to the parties and initialed or
otherwise signed by the parties to confirm their receipt thereof.
1.65 "Tax Returns" means any return, report, statement, election,
information return or other document (including any related or supporting
information) filed or required to be filed with any governmental entity in
connection with the determination, assessment, collection or administration of
any Taxes or the administration of any laws, regulations or administrative
requirements relating to any Taxes.
1.66 "Tax" or "Taxes" means taxes, charges, fees, imposts, levies,
interest, penalties, fines, additions to tax or other assessments or fees of any
kind, including, but not limited to, income, corporate, capital, estimated,
deferred, excise, property, real property, sales, use, turnover, environmental,
gross receipts, ad valorem, transfer, gains, profits, inventory, capital stock,
license, payroll, employment, unemployment, social security, workers'
compensation, stamp, value added and franchise taxes, required deposits,
deductions, withholdings and customs duties, imposed by any governmental entity,
together with any obligations under Treas. Reg. Section 1.1502-6 (or comparable
provisions of state, local or foreign Tax law) or any agreement or arrangement
with any Person with respect to the liability for, or sharing of, Taxes, and
including any liability as a successor or transferee, by contact or otherwise,
in respect of Taxes.
1.67 "Third Party Accounting Firm" shall have the meaning assigned to
such term in Section 2.3(b) hereof.
1.68 "Transaction Deadline Date" means September 1, 2004.
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1.69 "Transferee Employees" shall have the meaning assigned to such
term in Section 8.12(a) hereof.
1.70 "WARN ACT" shall have the meaning assigned to such term in Section
4.6(q) hereof.
1.71 "Warrant" shall have the meaning assigned to such term in Section
6.11 hereof.
1.72 "Working Capital" means Inventory, Accounts Receivable and any
other current assets of Seller (other than Cash and Cash Equivalents or any
other Excluded Assets), less any accounts payable and any other current
liabilities (other than any Excluded Liabilities), as reflected on the Closing
Balance Sheet and all as determined in accordance with GAAP.
ARTICLE 2. PURCHASE AND SALE OF ASSETS
2.1 Purchased Assets. Subject to the terms and conditions of this
Agreement, at the Closing, Seller hereby agrees to sell, convey, transfer and
assign all of Seller's right, title and interest in and to the Purchased Assets
to Buyer and Buyer hereby agrees, in accordance with Section 2.2 hereof, to
purchase the Purchased Assets.
2.2 Purchase Price. Subject to the terms and conditions of this
Agreement, at the Closing, the purchase price for the Purchased Assets shall be
$26,773,075 and shall be paid by Buyer and Parent as follows (the "Purchase
Price"):
(a) In order to secure the Selling Parties' obligations to
indemnify Buyer and Atrium, if so required, pursuant to Article 10 hereof, Buyer
shall deliver or cause to be delivered to the Escrow Agent $2,700,000 in cash by
wire transfer of immediately available funds (the "Escrow Funds"), and such
amounts shall be held by the Escrow Agent, subject to the terms and conditions
of, and for the period set forth in, an Escrow Agreement substantially in the
form of Exhibit C hereto (the "Escrow Agreement"); and
(b) Buyer shall deliver or cause to be delivered to the Escrow
Agent $23,923,075 (which amount shall be adjusted, dollar-for-dollar, after the
Closing in the amount, if any, by which the remaining payments owed by Seller as
of the date hereof under the vinyl manufacturing equipment purchase agreement
with VEKA, Inc. identified on Schedule 1.5 exceeds (in which case there will be
a downward adjustment) or falls short of (in which case there will be an upward
adjustment) $351,925, such adjustment, if any, to be made simultaneous with the
Cash Adjustment to be made pursuant to Section 2.3), in cash by wire transfer of
immediately available funds (the "Payment Funds"), and such Payment Funds shall
be paid by the Escrow Agent as set forth in Schedule A to the Escrow Agreement
in the amounts set forth therein; and
(c) Parent shall, at the direction of Seller and on behalf of
Buyer, deliver or cause to be delivered to Gates Dearen the Warrant entitling
such person the
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right to purchase up to and including 150 shares of Parent Stock (based on a
value of $1,000 per share), at a per share price as set forth in such Warrant.
2.3 Post-Closing Adjustment to the Purchase Price.
(a) Within sixty (60) days subsequent to the Closing Date,
Buyer shall prepare in accordance with GAAP and the Estimated Closing Balance
Sheet and deliver to Seller a consolidated balance sheet of the Business as of
the close of business on the Closing Date (the "Closing Balance Sheet"). Upon
completion of the Closing Balance Sheet, Buyer shall determine the post-closing
cash adjustment (the "Cash Adjustment"), which Cash Adjustment shall be equal to
the difference between the Working Capital of the Business as set forth on the
Closing Balance Sheet and $11 million. If the Working Capital of the Business as
set forth on the Closing Balance Sheet is less than $11 million, Seller shall
pay to Buyer an amount equal to the Cash Adjustment. If the Working Capital of
the Business as set forth on the Closing Balance Sheet is greater than $11
million, Buyer shall pay to Seller an amount equal to the Cash Adjustment.
Notwithstanding the foregoing, neither party shall (i) be required to pay a Cash
Adjustment under this Section 2.3 unless such Cash Adjustment exceeds $100,000,
in which case the applicable party shall pay only such portion of the Cash
Adjustment that exceeds $100,000, and (ii) be required, in any event, to pay a
Cash Adjustment under this Section 2.3 that exceeds $900,000. Concurrently with
Buyer's delivery to Seller of the Closing Balance Sheet, Buyer shall deliver to
Seller a reasonably detailed calculation of the Cash Adjustment along with the
basis for such calculations. If Seller does not object to the amount of the Cash
Adjustment within thirty (30) days of receipt thereof, such Cash Adjustment
shall be final and binding and Seller shall pay to Buyer, or Buyer shall pay to
Seller, as the case may be, no later than the fifth (5th) business day after the
thirtieth (30th) day following receipt of the calculation of the Cash Adjustment
an amount in cash equal to the Cash Adjustment, if any.
(b) If Seller objects to the Cash Adjustment, if any, it shall
notify Buyer in writing within thirty (30) days following receipt thereof,
setting forth in specific detail the basis for its objection and its proposal
for any adjustments to the Cash Adjustment. Buyer and Seller shall seek in good
faith to reach agreement as to any such proposed adjustment or that no such
adjustment is necessary within thirty (30) days following Buyer's receipt of
written notice of Seller's objection. If agreement is reached in writing within
such period as to all proposed further adjustments, or that no adjustments are
necessary, the parties shall make such adjustments, if any, and the Cash
Adjustment shall be based thereon. If Buyer and Seller are unable to reach
agreement within thirty (30) days following Buyer's receipt of written notice of
Seller's objection, then a "Big-4" independent accounting firm as agreed upon by
Buyer and Seller (the "Third Party Accounting Firm") shall be engaged to review
the proposed Cash Adjustment and, to the extent necessary, the Closing Balance
Sheet, and such Third Party Accounting Firm shall make a determination as to the
resolution of any adjustments necessary to cause the Cash Adjustment to have
been properly prepared in accordance with this Agreement. All such resolutions
shall relate only to such matters as are still in dispute and shall represent
either agreement with the position taken by Buyer or Seller or a compromise
between such positions. The determination of the Third Party Accounting
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Firm shall be delivered as soon as practicable following selection of the Third
Party Accounting Firm and shall be final, conclusive and binding upon the
parties. Thereafter, Seller shall pay to Buyer, or Buyer shall pay to Seller, as
the case may be, not later than five (5) business days following the
determination of adjustments by the Third Party Accounting Firm, an amount in
cash equal to the Cash Adjustment, if any, as determined by the Third Party
Accounting Firm. All fees and expenses of the Third Party Accounting Firm shall
be borne pro rata by Buyer and Seller in proportion to the allocation of the
dollar amount of changes made by the Third Party Accounting Firm.
2.4 Assumed Liabilities. At the Closing, Buyer shall assume and hereby
covenants and agrees to perform, pay and discharge, at no cost or expense to the
Selling Parties, the Assumed Liabilities pursuant to the terms of the Assignment
and Assumption Agreement.
2.5 Excluded Liabilities. Subject to the provisions contained in
Article 10, neither Buyer nor Atrium shall assume or in any way be responsible
for, and the Selling Parties shall remain solely responsible for, the Excluded
Liabilities. Subject to the provisions contained in Article 10, the Selling
Parties covenant and agree to cause, at no expense or cost to Buyer or Atrium,
all Excluded Liabilities to be fully paid, discharged and satisfied as of the
Closing Date or shall fully pay, discharge and satisfy such Excluded Liabilities
when due and payable after the Closing Date, as applicable, unless such Excluded
Liabilities are being contested in good faith by the Selling Parties (provided
that the foregoing shall not in any way limit the Selling Parties' obligations
to Buyer and Atrium under this Agreement.
2.6 Allocation of Purchase Price. The Purchase Price shall be allocated
among the Purchased Assets as shall be reasonably agreed to among the parties as
soon as practicable following the Closing and which allocation among the
Purchased Assets shall be in accordance with Section 1060 of the Code and the
regulations promulgated thereunder and all applicable provisions of state, local
and foreign law. Without limiting the foregoing, Seller shall prepare and
deliver to Buyer, prior to Closing, an estimated allocation of the Purchase
Price among the Purchased Assets. Unless required by applicable law, no party
hereto will, and each party will cause its respective Affiliates not to, take a
position on any federal, state, local or foreign Tax Return (including any Asset
Acquisition Statement required by Code Section 1060 (Form 8594 (or any successor
form)) filed in connection therewith), before any governmental agency charged
with the collection of any income tax or in any judicial proceeding that is in
any way inconsistent with the final purchase price allocation described in this
Section 2.6.
2.7 Closing. The Closing shall take place at the offices of Buyer,
located at 0000 Xxxx Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, on or
about September 1, 2004, or at such other time and place as shall be mutually
agreed upon by the parties (but in all events prior to the Transaction Deadline
Date unless otherwise agreed to by the parties). Subject to the terms and
conditions of this Agreement, at the Closing, Seller shall deliver the Purchased
Assets to Buyer, free and clear of all claims, pledges, security interests,
liens, charges and all other encumbrances of any kind (collectively,
"Encumbrances"), other than the Assumed Liabilities and the Permitted
Encumbrances.
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2.8 Assignment of Contracts and Rights. Notwithstanding anything in
this Agreement to the contrary, this Agreement shall not constitute an agreement
to assign any claim, contract, license, lease, commitment, sales order, purchase
order or any claim or right, or any benefit arising thereunder or resulting
therefrom, if an attempted assignment thereof without the consent of a third
party thereto would constitute a breach thereof or in any way affect the rights
of Buyer or Seller thereunder. Each of the Selling Parties shall cooperate with
Buyer in obtaining the benefits of such claims, contracts, licenses, leases,
commitments, sales orders or purchase orders.
2.9 Further Documents and Statements. Each of the parties hereto hereby
agrees to execute and deliver, without further consideration, such documents and
instruments in addition to those provided for herein as may be reasonably
requested by any other party to effectuate the provisions hereof, whether at or
after the Closing, including but not limited to such confirmatory conveyances
and assignments as may be reasonably requested.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF THE LIMITED PARTNERS
Each of the Limited Partners, severally and not jointly, represents and
warrants to Buyer and Parent as follows:
3.1 Ownership. Such Limited Partner is, and at the Closing will be, the
lawful owner of record of the partnership interest percentage of Seller set
forth opposite such Limited Partner's name on Schedule 3.1 hereto.
3.2 Legal Capacity; Binding Obligation; No Conflict.
(a) Such Limited Partner has full power and legal authority
and full legal capacity to execute and deliver this Agreement and the Related
Agreements to which it is a party and to consummate and perform the Contemplated
Transactions to be performed by such Limited Partner. Such Limited Partner has
duly executed and delivered this Agreement and each of the Related Agreements to
which it is a party and such Agreement and Related Agreements constitute the
legal, valid and binding obligations of such Limited Partner, enforceable
against such Limited Partner in accordance with their respective terms, except
as enforceability is limited by (i) principles of equity that may restrict the
availability of specific performance and other equitable remedies (whether such
enforceability is considered in a proceeding in equity or at law) and (ii)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance,
fraudulent transfer and other laws applicable to creditors' rights generally.
(b) Except as set forth on Schedule 3.2 hereto, no permit,
authorization, consent or approval of, or filing with or notification to, any
governmental, regulatory or administrative body or any other third party is
required in connection with the execution and delivery of this Agreement and the
Related Agreements by such Limited Partner.
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(c) There is no pending action or proceeding that has been
commenced against such Limited Partner that may have the effect of preventing,
delaying or making illegal the Contemplated Transactions and, to the knowledge
of such Limited Partner, no such action or proceeding has been threatened.
Except as set forth on Schedule 3.2 hereto, neither the execution and delivery
of this Agreement or the Related Agreements by such Limited Partner nor the
consummation by such Limited Partner of the Contemplated Transactions will
conflict with, violate, or result in a breach of, default under or the creation
of any Encumbrance pursuant to, any agreement to which such Limited Partner is a
party or by which he, she or it is bound or any law, order, judgment or decree
or any provision of any organizational or operating document or by-laws to which
such Limited Partner is subject or bound.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF SELLER AND THE GENERAL PARTNER
Each of Seller and the General Partner, jointly and severally,
represents and warrants to Buyer and Atrium as follows:
4.1 Organization and Good Standing.
(a) Seller is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Florida. The
General Partner is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida.
(b) Each of Seller and the General Partner has full power and
authority to own, lease and operate its properties and assets (including, with
respect to Seller, the Purchased Assets) and to carry on its business as
presently conducted and is duly qualified and in good standing as a limited
partnership or corporation, as applicable, in each jurisdiction in which the
character of properties owned or leased by it or the nature of its business
requires such qualification, which jurisdictions are set forth on Schedule 4.1,
except where the failure to so qualify would not, individually or in the
aggregate, have a Material Adverse Effect.
4.2 Due Authorization; Binding Obligation.
(a) Each of Seller and the General Partner has all requisite
power and authority, limited partnership, corporate or otherwise, to enter into
and deliver this Agreement and the Related Agreements and to perform its
obligations hereunder and thereunder and has duly authorized the execution,
delivery and performance of this Agreement and the Related Agreements by all
necessary limited partnership or corporate action, as the case may be.
(b) This Agreement and the Related Agreements have been duly
and validly authorized, executed and delivered by each of Seller and the General
Partner and
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constitute such Seller's and General Partner's legal, valid and binding
obligation, enforceable in accordance with their respective terms, except as
enforceability is limited by (i) principles of equity that may restrict the
availability of specific performance and other equitable remedies (whether such
enforceability is considered in a proceeding in equity or at law) and (ii)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance,
fraudulent transfer and other laws applicable to creditors' rights generally.
4.3 Governmental Approvals and Notices. The execution, delivery and
performance of this Agreement and the Related Agreements by Seller and the
General Partner, and consummation of the Contemplated Transactions, are not
subject to the jurisdiction, approval, notification of or consent of any
governmental, regulatory or administrative agency.
4.4 Approvals and Notices Required; Conflict with Other Instruments.
Except as described on Schedule 4.4, the execution, delivery and performance of
this Agreement and the Related Agreements by Seller and the General Partner and
consummation of the Contemplated Transactions will not (a) violate (with or
without the giving of notice or the lapse of time or both) or require any
consent or approval, filing or notice under and will not conflict with, or
result in the breach or termination of any provision of, or constitute a default
under, or result in the acceleration of the performance of the obligations of
any of Seller or the General Partner under, Seller's certificate of limited
partnership or limited partnership agreement, or under the General Partner's
articles of incorporation or bylaws, or under any indenture, mortgage, deed of
trust, lease, license agreement, contract, instrument or other agreement, or any
law, statute, order, judgment or decree to which any of Seller or the General
Partner is a party or by which it or any of the Purchased Assets is subject or
bound, except where such violation, conflict, breach, termination, default or
acceleration would not have a Material Adverse Effect or adversely affect the
ability of the parties to consummate the Contemplated Transactions, or (b)
result in the creation of any Encumbrance upon any of the Purchased Assets.
4.5 Financial Condition.
(a) The Audited Financial Statements, correct and complete
copies of which are attached hereto as Schedule 4.5(a), were prepared in
accordance with GAAP applied on a consistent basis, except as may be indicated
in the notes thereto, and present fairly the financial position, results of
operations, retained earnings and cash flows of Seller as of December 31, 2003,
2002 and 2001, and for the years then ended.
(b) The Unaudited Financial Statements, correct and complete
copies of which are attached hereto as Schedule 4.5(b), were prepared in
accordance with GAAP (except for the lack of footnotes, customary year-end
adjustments consistent with past practice and other presentation items) applied
on a basis consistent with that used in the preparation of the Audited Financial
Statements (except as described in Section 4.5(g)) and present fairly the
financial condition, results of operations, retained earnings and cash flows of
Seller as of and for the quarters ended March 31 and June 30, 2004.
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(c) As soon as completed, and in any event within twenty (20)
days following the end of each month ending subsequent to the date hereof and
prior to the Closing Date, Seller shall deliver to Buyer and Atrium correct and
complete copies of the unaudited balance sheet of Seller as of the end of each
such month and the related statements of earnings for each month then ended. The
Financial Statements furnished to Buyer and Atrium after the date hereof
pursuant to this Section 4.5(c) will be (i) prepared in accordance with GAAP
applied on a basis consistent with that used in the preparation of the Audited
Financial Statements (except for the lack of footnotes, customary year-end
adjustments consistent with past practice and other presentation items), and
(ii) subject to the foregoing, will present fairly the financial condition,
results of operations, retained earnings and cash flows of Seller as of and for
the month then ended.
(d) All Inventory of Seller as set forth in the Financial
Statements or on the Closing Balance Sheet, subject to reserves reflected in the
Financial Statements, consisted of, and all such inventory as of the Closing
Date will consist of, raw materials, supplies, work-in-process, goods in transit
and finished goods of a quality and quantity usable or salable in the ordinary
course of the Business. The value at which inventories were reflected in the
Financial Statements was at the lower of cost or market value adjusted to
conform to FIFO inventory valuation principles, all in accordance with GAAP
applied on a basis consistent with that of the preceding fiscal year cost.
(e) All Accounts Receivable of Seller as set forth in the
Financial Statements are, and all such Accounts Receivable which arise between
the date hereof and the Closing Date will be, genuine, valid, binding and
subsisting, having arisen or arising out of bona fide sales and deliveries of
products or the performance of services in the ordinary course of the business
consistent with past practice and, subject to reserves reflected in the
Financial Statements or on the Closing Balance Sheet, are collectible in the
ordinary course of business, subject to no defenses, counterclaims or set-offs
(other than in the ordinary course).
(f) Seller has no indebtedness or capitalized lease
obligations other than as described on Schedule 4.5(f).
(g) The Audited Financial Statements and the Unaudited
Financial Statements use different accounting principles in recording partial
shipments of products as further described on Schedule 4.5(g).
4.6 Absence of Certain Changes. Except as set forth on Schedule 4.6,
since January 1, 2004, Seller and the General Partner have conducted the
Business only in the ordinary course consistent with past practice, without
extraordinary or unusual transactions, and neither Seller nor the General
Partner has:
(a) mortgaged, pledged or subjected to any lien, charge or
other encumbrance, any portion of Seller's assets,
(b) suffered any change, event or condition that individually
or in the aggregate has had (or could reasonably be expected to have) a Material
Adverse Effect;
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(c) sold, assigned or transferred any Intellectual Property
Rights;
(d) suffered any damage, destruction or loss (whether or not
covered by insurance) which, in the aggregate, exceeds $100,000;
(e) except for purchase orders or sales contracts issued or
entered into in the ordinary course of business, borrowed any amount or incurred
any obligations or liabilities of any kind, absolute, contingent or otherwise,
whether due or to become due, which, in the aggregate, exceed $100,000 in value;
(f) made any unfunded or committed to make any unfunded
capital expenditures in excess of $100,000;
(g) increased or changed the terms of the compensation or
benefits payable or to become payable to any of its officers, directors,
employees or agents, except increases in the ordinary course of business;
(h) made any change in the terms of any bonus, insurance,
pension or other benefit plan for or with any of its officers, directors,
employees or agents which increases amounts paid, payable or to become payable
thereunder, other than in the ordinary course of business;
(i) entered into any employment or collective bargaining
agreement with any individual, representative, labor organization and/or union;
(j) disposed of any assets, other than the disposal of
inventory in the ordinary course of business, which, in the aggregate, exceed
$100,000 in value;
(k) written down, written off, compromised or taken any steps
to accelerate collection of, any of its accounts receivables;
(l) except for purchase orders and sales contracts issued or
entered into in the ordinary course of business, entered into any contracts,
leases or license agreements which, in the aggregate, exceed $100,000 in value;
(m) engaged in, or agreed to engage in, any transaction with
any Affiliate;
(n) made any change in its accounting procedures or practices;
(o) made any changes from its past practice with respect to
its credit criteria;
(p) made any distribution or transferred any assets to any
other Selling Party or any Affiliate thereof; or
(q) caused any "employment loss," as such term is defined in
the Worker Adjustment and Retraining Notification Act (the "WARN Act").
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4.7 Title. Except as set forth on Schedule 4.7, Seller has, and as of
the Closing Date will have and will convey and transfer to Buyer, good and
marketable title to the Purchased Assets, free and clear of all Encumbrances
(other than the Assumed Liabilities and the Permitted Encumbrances). The
Purchased Assets, together with use of the Manufacturing Facility pursuant to
the Lease Agreement and utilizing a labor force of substantially similar size to
that used by Seller on the date hereof, include all assets necessary to conduct
the Business in the manner such Business was conducted by Seller and the General
Partner as of and prior to the date hereof.
4.8 "Foreign Person". Neither Seller nor the General Partner is a
"foreign person" within the meaning of Section 1445(f)(3) of the Code and
Treasury Regulation Section 1.1445-2(b)(2)(i).
4.9 Fixed Assets. The Fixed Assets are, and as of the Closing Date will
be, in satisfactory operating condition and repair and capable of continued
operation in accordance with applicable permits, ordinary wear and tear
excepted, subject to routine maintenance and repair in accordance with past
practice.
4.10 Books and Records. The Books and Records have been maintained in
the ordinary course of business and reflect bona fide transactions.
4.11 Real Estate. Except as set forth on Schedule 4.11:
(a) Schedule 1.46 and Schedule 1.51, collectively, sets forth
a true, correct and complete list of all real property owned, leased or used by
any of the Selling Parties in connection with the Business.
(b) Seller or Seller's Affiliates have good and marketable
title to the Real Estate (other than the Leased Real Estate), and Seller has a
valid and subsisting leasehold interest in and to the Leased Real Estate, free
and clear of any Encumbrance, except for the Permitted Encumbrances.
(c) There are no pending or, to the Knowledge of Seller,
threatened condemnation or eminent domain proceedings, lawsuits or
administrative actions relating to any of the Real Estate or other matters
affecting materially and adversely the current use, occupancy or value thereof,
or, to the Knowledge of Seller, any basis therefor.
(d) The buildings and improvements used in the operation of
the Business are located within the boundary lines of the Real Estate, are not
in violation of applicable setback requirements, zoning laws, and ordinances and
do not encroach on any easement, except that with respect to the Leased Real
Estate the foregoing is to the Knowledge of Seller.
(e) All plants, facilities and structures used in the
operation of the Business are suitable for the purposes used, are adequate and
sufficient for all current operations of their respective businesses and,
subject to ordinary wear and tear, are in good operating condition and repair.
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(f) There are no leases, subleases, licenses, concessions, or
other agreements, written or oral, granting to any party or parties other than
Seller the right of use or occupancy of any portion of the Real Estate, except
that with respect to the Leased Real Estate the foregoing is to the Knowledge of
Seller.
(g) There are no outstanding options or rights of first
refusal to purchase the Real Estate or any portion thereof or interest therein,
except that with respect to the Leased Real Estate the foregoing is to the
Knowledge of Seller.
(h) There are no parties other than Seller in possession of
the Real Estate.
(i) Ingress and egress to and from the Real Estate is provided
over and across publicly dedicated paved streets, which are maintained by the
local municipality and, to the Knowledge of Seller, there are no proposals to
change such access roads adjoining or abutting the Real Estate or to change the
grade of such access roads, except that with respect to the Leased Real Estate
the foregoing is to the Knowledge of Seller.
(j) The Real Estate is serviced by water, sewer and utility
service which has been adequate for Seller's current use thereof.
(k) The Real Estate and the improvements erected thereon are
currently located in an area whose zoning classification permits the
development, use and operation of the Real Estate as currently used without
special exception or permit (except that with respect to the Leased Real Estate
the foregoing is to the Knowledge of Seller), and none of Seller or the General
Partner has received any notice of any proceeding to change adversely or
down-zone the existing zoning classification as to any portion of the Real
Estate.
(l) The improvements to the Real Estate have been constructed
in material accordance with, and materially comply with, the requirements of all
applicable laws, ordinances, regulations and orders, including without
limitation applicable zoning, building and fire safety codes and all restrictive
covenants, if any, and other easements, encumbrances or agreements affecting
title to the Real Estate (except that with respect to the Leased Real Estate the
foregoing is to the Knowledge of Seller), and no written outstanding notices of
violation of any law, regulation, ordinance, order or requirement has been
received by any of Seller or the General Partner. No portion of the Real Estate
is a designated historic property or subject to any laws, ordinances,
regulations or orders which, in the event of total or partial casualty, would
prevent the reconstruction of the improvements to the Real Estate or the
restoration of the current use of such improvements at the time of such casualty
as a matter of right without special exception or permit (except that with
respect to the Leased Real Estate the foregoing is to the Knowledge of Seller).
(m) Seller has delivered to Buyer copies of all certificates
of occupancy with respect to the Real Estate.
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4.12 Leased Real Estate. Schedule 1.46 hereto sets forth a true,
correct and complete list of all leased real property used by any of Seller or
the General Partner in connection with the Business, together with a list of
each lease, sublease, license or any other instrument under which any of Seller
or the General Partner claims or holds a leasehold or other interest or right to
the use thereof, and with respect to the leases, subleases, licenses and other
instruments on Schedule 1.46, identifying which of those leases, subleases,
licenses or other instruments, if any, require that a consent be obtained (from
any lessors, guarantors or any other third parties) before a valid transfer of
such leases, subleases, licenses or other instruments may be obtained, and
identifying in each instance the party which is required to grant consent
thereto, the location of the premises, the date and term of the agreement, the
amount of the monthly rent and any additional material terms thereof. Such
leases, subleases, licenses and other agreements are valid, subsisting, in full
force and effect and binding upon Seller and, to the Knowledge of Seller, the
other parties thereto in accordance with their terms, and, to the Knowledge of
Seller, there is no default or event which with the giving of notice or passage
of time, or both, would result in a default under such agreement. Prior to the
date hereof, Seller has delivered to Buyer true, correct and complete copies of
all of the leases, subleases, licenses and other instruments set forth on
Schedule 1.46 and any related agreements. Seller has paid in full or accrued all
amounts due, and have satisfied in full or accrued all liabilities due and
payable under such leases, subleases, licenses and other agreements. None of
Seller or the General Partner is, and as of the Closing Date none of them will
be, in default under any of such leases, subleases, licenses or other
agreements, nor to the Knowledge of Seller, is any other party in default
thereunder, and no facts or circumstances have occurred which, with the giving
of notice or the passage of time or both, would constitute a default under any
of such leases, subleases, licenses or other agreements.
4.13 Tax Matters.
(a) Except as set forth on Schedule 4.13(a), Seller has timely
filed, or caused to be timely filed, all Tax Returns required to be filed by it
with all governmental entities, including, without limitation, all Tax Returns
due on a quarterly basis, and all such Tax Returns which have been filed are
accurate and complete in all material respects and were prepared in accordance
with applicable law. No extension of time within which to file any Tax Return
which has not been filed has been requested by or on behalf of Seller.
(b) Seller has timely paid, withheld or deducted (or there has
been timely paid, withheld or deducted on its behalf) all Taxes required to be
paid, withheld or deducted (as applicable), or for which Seller is liable,
whether or not such Taxes are shown (or required to be shown) on a Tax Return,
including, without limitation, all quarterly or estimated payments and deposits.
The Financial Statements reflect an adequate accrual or reserve (without regard
to deferred Tax assets and liabilities) for all Taxes not yet due and payable as
of the date hereof.
(c) Seller has delivered to, or made available for inspection
by, Buyer and Parent true, correct and complete copies of all Tax Returns, audit
and examination
19
reports, and statements of deficiencies filed by, assessed against or agreed to
by Seller for the past three (3) years and will deliver to, or make available
for inspection by (including providing notice to Buyer and Parent of Seller's
receipt thereof), Buyer and Parent any such documents received on or before the
Closing Date immediately upon receipt. None of Seller or the General Partner has
received written notice of any deficiencies for any Taxes asserted or assessed
against Seller or the General Partner that remain unpaid. None of Seller or the
General Partner has received any written notice that the Tax Returns of Seller
are currently being or may be audited or examined by the Internal Revenue
Service or any other state, local or foreign governmental authority. No
examinations, actions, suits or proceedings with respect to Taxes are pending
or, to the Knowledge of Seller, threatened against Seller or the General
Partner. Seller has not waived any statute of limitations in respect of Taxes or
agreed to any extension of time with respect to a Tax assessment or deficiency.
(d) Seller is not required to make any adjustments under
Section 481 or 482 of the Code (or an analogous provision of the law of any
other jurisdiction) due to a change in accounting method, related-party
transaction or otherwise. Neither Seller nor any Taxing authority has proposed
or requested any such adjustment. None of the Seller or the General Partner has
received notice of a claim by any Taxing authority in a jurisdiction where
Seller does not file Tax Returns that Seller is or may be subject to Tax in such
jurisdiction. Neither Seller nor the General Partner is, or ever has been, a
member of an "affiliated group" within the meaning of Section 1504(a)(1) of the
Code (or affiliated, combined, consolidated, unitary or similar group for state,
local or foreign Tax purposes) with respect to any Tax filings. There are no Tax
rulings, requests for rulings or closing agreements with any Taxing authority
with respect to any of Seller or the General Partner.
(e) None of Seller or the General Partner (i) is, or has ever
been, a party to, bound by or subject to any Tax allocation or Tax sharing
agreement (or similar agreement), or (ii) has any current or potential
contractual obligation to indemnify any other person with respect to Taxes.
Schedule 4.13(e) sets forth a list of states, territories and jurisdictions
(whether foreign or domestic) in which Seller is required to file Tax Returns,
including, without limitation, sales tax returns. There are no liens for Taxes
upon any of the assets of Seller (other than Permitted Encumbrances). No power
of attorney with respect to any matter relating to Taxes of Seller will be in
effect after the Closing Date.
4.14 Employment Agreements; Employee Handbooks. Except as set forth on
Schedule 4.14, Seller has no written or oral employment, consulting, severance,
change-in-control, or similar agreements or commitments with employees of
Seller. Seller has delivered to Buyer and Atrium copies of all employee
handbooks currently applicable to employees of Seller.
4.15 Employment Matters. There are no collective bargaining agreements
covering any employees of Seller, nor is Seller bargaining with, or subject to a
duty to bargain with any labor organization. Except as set forth on Schedule
4.15, there are no controversies pending, or to the Knowledge of Seller,
threatened against Seller involving
20
its employees, former employees, job applicants, or any association or group of
such persons, and, to the Knowledge of Seller, Seller has not acted, or failed
to act, in a manner that would provide a reasonable basis for such a controversy
or charge of an unfair labor practice. Seller has complied with all laws
applicable to it relating to employment, including, without limitation, any
provisions relating to employment discrimination, wages, hours, employee leave,
unemployment insurance, workplace safety, collective bargaining and the payment
of social security, employment, payroll and similar taxes. To the Knowledge of
Seller, except as set forth on Schedule 4.15, there are no activities or
proceedings of any labor union (or representatives thereof) to organize any
employees of Seller. Seller not has experienced or, to the Knowledge of Seller,
been threatened with any work stoppage. There is not pending any demand for
recognition or any other request or demand from a labor organization for
representative status with respect to any persons employed by Seller.
4.16 Employee Benefit Plans.
(a) Except as listed and described on Schedule 4.16(a),
neither Seller nor any trade or business required to be aggregated with it under
subsections (b), (c), (m) or (o) of Section 414 of the Code ("ERISA Affiliates")
maintains or is obligated to contribute to (i) any "employee pension benefit
plans" (the "Pension Plans"), as such term is defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974 ("ERISA"), (ii) any "employee
welfare benefit plans" (the "Welfare Plans"), as such term is defined in Section
3(1) of ERISA or (iii) any other bonus, deferred compensation, incentive
compensation, insurance, stock purchase, stock option, severance or termination
pay, educational assistance, vacation, sick pay, holiday pay or profit-sharing
plan, program, agreement or arrangement (other than arrangements involving the
payment of regular wages) for the benefit of any current or former employee,
director or independent contractor of Seller or any ERISA Affiliate (the
"Non-ERISA Plans"). The Pension Plans, the Non-ERISA Plans and the Welfare Plans
are collectively referred to as the "Plans." Each of the Pension Plans on
Schedule 4.16(a) that are intended to be qualified under Section 401(a) of the
Code has received a favorable determination letter from the IRS that it is so
qualified and that the related trusts are exempt from tax under Section 501(a)
of the Code, and none of Seller or the General Partner is aware of any fact or
circumstance that would jeopardize the qualification of such Pension Plans.
Except for amendments with respect to which the remedial amendment period under
Section 401(b) of the Code has not expired, the Plans comply in form and in
operation with the requirements of the Internal Revenue Code, ERISA and any
other applicable laws. Seller does not have any formal plan or commitment to
create any additional Plan or modify or change any existing Plan that would
result in a material increase in the cost of such Plan to Seller. None of the
Pension Plans is subject to Section 302 of ERISA, Section 412 of the Code, or
Title IV of ERISA, nor has Seller or any ERISA Affiliate maintained or
contributed to any such Plan or any plan of the type described in Sections 4063
and 4064 of ERISA or of the type described in Section 413 of the Code. None of
the Plans is a "multiemployer plan" or a "multiple employer welfare arrangement"
as defined respectively in Sections 3(37) and 3(40) of ERISA, nor has Seller or
any ERISA Affiliate been required to contribute to or had any obligation with
respect to any such Plan within
21
the five-year period ending on the Closing Date. Except for any Pension Plan,
none of the benefits under any of the Plans is funded through a trust.
(b) With respect to each of the Plans, (i) the cost of any
benefit arising prior to the Closing Date has been, or will be as of the Closing
Date, paid or properly accrued by Seller on the Books and Records, (ii) there
are no actions, suits or claims pending or, to the Knowledge of Seller,
threatened, other than routine claims for benefits, and (iii) there have been no
"prohibited transactions"(as that term is defined in Section 406 of ERISA or
Section 4975 of the Code).
(c) With respect to each Plan (other than the Non-ERISA
Plans), Seller has furnished to Buyer and Atrium true, accurate and complete
copies of (i) the most recent determination letter received from the IRS
regarding any Plan; (ii) the three most recent Forms 5500 and financial
statements for the Plans; (iii) a copy of each Plan (including all amendments
thereto); (iv) a copy of the most recent Summary Plan Description, together with
each Summary of Material Modifications, required under ERISA with respect to
such Plan; (v) if the Plan is funded through a trust or any third party funding
vehicle, such as an insurance contract, a copy of the trust or other funding
agreement (including all amendments thereto) and the latest financial statements
thereof; (vi) all contracts relating to the Plans with respect to which Seller
may have any liability, including, without limitation, insurance contracts,
investment management agreements, subscription and participation agreements and
record keeping agreements; and (vii) a copy of all material documents and
correspondence relating to the Plans received from or provided to the Department
of Labor or the IRS during the past three (3) years and any applicable tax
determination letters.
(d) Neither Seller nor, to the Knowledge of Seller, any of its
directors, officers, employees or any "fiduciary," as such term is defined in
Section 3 of ERISA, has committed any breach of fiduciary responsibility imposed
by ERISA or any other applicable law with respect to the Plans that would
subject Buyer or Seller to liabilities in excess of $25,000.
(e) Except as set forth on Schedule 4.16(e), no employee of
Seller will be entitled to any additional benefits or any acceleration of the
time of payment or vesting of any benefits under any Plan as a result of the
Contemplated Transactions, and Seller will not have any obligation to make any
payments that is not fully deductible due to Section 162(m) or 280G of the Code.
(f) All Persons who have at any time been classified as
consultants, independent contractors or service providers to Seller
(collectively, the "Consultants") have been properly so classified and excluded
from the classification as an employee in accordance with all applicable laws,
including without limitation, ERISA and the Code and in accordance with the
terms of each Plan. Schedule 4.16(f) lists all Persons who have provided
services to Seller for more than 500 hours in any 12-month period during the
three-year period ending on the Closing Date in any capacity other than as a
common-law employee.
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(g) Except as described on Schedule 4.16(g), no Plan provides
benefits, including, without limitation, death or medical benefits (whether or
not insured), with respect to current or former employees upon retirement or
other termination of service (other than (i) coverage mandated by applicable
law, (ii) death benefits or retirement benefits under a Pension Plan, (iii)
deferred compensation benefits accrued as liabilities on the Books and Records
of Seller, or (iv) benefits the full cost of which is borne by the current or
former employee (or his beneficiary)). The list of Plans on Schedule 4.16(a)
discloses whether each Plan is insured. No Plan is subject to laws of a country
or jurisdiction other than the United States.
4.17 Non-Competition Agreements. Except as set forth on Schedule 4.17,
none of Seller or the General Partner is a party to any agreement or other
commitment imposing any restriction on the manner or in the geographic location
in which Seller conducts or may conduct its business or uses or may use its
properties or assets in competition with any third party.
4.18 Licenses and Permits. Except as set forth on Schedule 4.18, Seller
has all necessary licenses, permits, consents, authorizations and approvals from
all appropriate governmental or quasi-governmental authorities required for the
operation of the Business of Seller and the use and operation of any of the Real
Estate, except where the failure to have or obtain any such license, permit,
consent, authorization or approval would not have a Material Adverse Effect or
adversely affect the ability of the parties to consummate the Contemplated
Transactions, and all such licenses, permits, consents, authorizations and
approvals are listed on Schedule 4.18 (the "Permits"). Each of the Permits is
validly issued, in good standing and in full force and effect.
4.19 Legal Proceedings. Except as set forth on Schedule 4.19, (a) there
is no litigation, arbitration or other proceeding or governmental investigation
pending or, to the Knowledge of Seller, threatened against (i) Seller or any of
the Purchased Assets; (ii) any other Selling Party that (x) could reasonably be
expected to have a Material Adverse Effect on Seller or the Business or (y)
threatens or challenges the consummation of the Contemplated Transactions, and,
to the Knowledge of Seller, there is no basis for any such action; (b) there are
no actions pending or, to the Knowledge of Seller, threatened by any
governmental or quasi-governmental agency with respect to compliance by Seller
with applicable laws, ordinances or regulations and, to the Knowledge of Seller,
there is no basis for any such action; and (c) to the Knowledge of Seller ,
there is no outstanding execution, order, writ, injunction, judgment or decree
of any court, government or governmental agency against any of Seller or the
General Partner or the Purchased Assets or to which any of Seller or the General
Partner or the Purchased Assets are subject.
4.20 Utilities. Seller has available sufficient power, fuel oil,
natural gas and water supplies and adequate sewage, waste disposal and air
emission systems for the operation of its Business and all such supplies and
systems have been and are in material compliance with all federal, state and
local environmental and other regulatory laws and regulations. To the Knowledge
of Seller, all such supplies and systems, including utility services, will be
available to Buyer subsequent to the Closing.
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4.21 Compliance With Laws. Except as set forth on Schedule 4.21, Seller
and its respective properties and operations are and have, since their
inception, been in compliance with all applicable federal, state, local and
foreign laws, ordinances, regulations, orders, judgments, injunctions, awards,
decrees and other requirements of any governmental or quasi-governmental body,
court or arbitrator, except failures to so comply that would not, individually
or in the aggregate, result in a Material Adverse Effect.
4.22 Environmental Matters.
(a) Except as set forth on Schedule 4.22(a), Seller is not,
nor has ever been in violation of or delinquent under, nor has it received any
notice of any violation of or delinquency with respect to any applicable
Environmental and Safety Laws. To the Knowledge of Seller, there are no
circumstances or conditions existing at any Real Estate used by Seller that
could reasonably be expected to prevent or interfere with such compliance in the
future. Except as set forth on Schedule 4.22(a), Seller has obtained all
permits, authorizations or approvals required under applicable Environmental and
Safety Laws (collectively, "Safety and Environmental Permits"), and all such
Safety and Environmental Permits are valid and in good standing and transferable
to Buyer as part of the Contemplated Transactions without consent of or notice
to the governmental authority issuing the permit, authorization or approval.
(b) Except as set forth on Schedule 4.22(b), there is no
Environmental or Safety Claim pending or, to the Knowledge of Seller, threatened
against Seller or relating to the Purchased Assets, or any Real Estate used by
Seller.
(c) Except as set forth on Schedule 4.22(c), to the Knowledge
of Seller, there are no past or present actions, activities, circumstances,
conditions, events or incidents, including without limitation the Release,
transportation, treatment, storage, recycling or reclamation of any Hazardous
Material at any location, that could reasonably be expected to form the basis of
any Environmental or Safety Claim against Seller or relating to the Purchased
Assets or any Real Estate used, or previously owned, operated or used, by Seller
in connection with the Business.
(d) Except as set forth on Schedule 4.22(d), Seller has not,
and, to the Knowledge of Seller, no other Person has, caused a Release of any
Hazardous Material in violation of any applicable Environmental and Safety Laws
at, on, under, from or otherwise affecting the soil, surface water or
groundwater at any Real Estate used, or previously owned, operated or used, by
Seller in connection with the Business.
(e) Except as disclosed on Schedule 4.22(e), to the Knowledge
of Seller, there are no underground or above ground storage tanks located at any
Real Estate, and neither Seller nor any Affiliate has installed, owned or
operated any underground or above ground storage tanks at any such properties.
(f) Except as disclosed on Schedule 4.22(f), to the Knowledge
of Seller, there are no past or present actions, activities, circumstances,
conditions, events or
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incidents, including without limitation the Release, transportation, treatment,
storage, recycling or reclamation of any Hazardous Material, and or otherwise
relating to any violation or alleged violation of law, that could reasonably be
expected to form the basis for any Environmental or Safety Claim relating to any
former properties, assets, operations or business, owned, operated, or conducted
by any of Seller or any of its Affiliates or any of their predecessors in
connection with the Business.
(g) Seller has provided Buyer and Atrium with copies of all
surveys, reports, assessments, audits, evaluations, sampling results, or other
documents relating to compliance with or violation or suspected violation of
Environmental and Safety Laws, or to the handling, storage, transportation or
Release of any Hazardous Material, prepared by, for or at the request of Seller
or in its possession and relating to Seller, any Real Estate, the Business or
the Purchased Assets.
4.23 Assumed Agreements. Except for purchase orders and sales contracts
issued or executed in the ordinary course of business, the Assumed Agreements
listed on Schedule 1.5 are all of the contracts and agreements that (i) are
material to the Business of Seller; (ii) involve performance of services or the
delivery of goods or materials of an amount or value in excess of $50,000; (iii)
involve expenditures or receipts in excess of $50,000, (iv) relate to any lease
or agreement under which Seller is a lessee or lessor of, or holds or operates,
or permits any third party to hold or operate, any personal or real property for
which the annual rental exceeds $50,000; (v) restrict a third party from
competing with Seller; (vi) relate to any representative or sales agency
contracts or commitments to which Seller is a party; or (vii) include any
Affiliate as a party. Seller has delivered to Buyer and Atrium true and complete
copies of all Assumed Agreements (and all amendments, waivers and other
modifications thereto). Except as limited by bankruptcy and insolvency laws and
other laws affecting the rights of creditors generally, all of the Assumed
Agreements are valid, in full force and effect, binding upon Seller that is a
party thereto and, to the Knowledge of Seller, binding upon the other parties
thereto in accordance with their terms and Seller is not in default under any of
them nor, to the Knowledge of Seller, is any other party thereto in default
thereunder, nor does any condition exist that with notice or lapse of time or
both would constitute a default thereunder.
4.24 Absence of Undisclosed Liabilities. There are no material
liabilities or material obligations of Seller, either accrued, absolute,
contingent or otherwise, except:
(a) to the extent reflected in the June 30, 2004 balance sheet
included as part of Schedule 4.5(b) and not heretofore paid or discharged;
(b) those incurred, consistently with past business practice,
in or as a result of the normal and ordinary course of business since June 30,
2004; and
(c) liabilities or obligations specifically disclosed in the
Schedules to this Agreement.
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4.25 Disclosure. Neither (i) this Agreement nor any Related Agreement,
nor (ii) any statement made in any Schedule to this Agreement or any Related
Agreement contains or will contain any untrue statement of a material fact or
omits or will omit to state any material fact necessary to make any statement
herein or therein not misleading. Seller has made available for inspection by
Buyer and Atrium complete and correct copies of the minute books of Seller. Such
minute books contain the minutes of all partner meetings of Seller that have
been held prior to the date hereof and all written consents to action executed
in lieu thereof.
4.26 Intellectual Property Rights.
(a) "Intellectual Property Rights" shall mean all patents and
patent applications, trademarks, service marks, logos, trade names, slogans,
trade dress rights (whether registered or unregistered) and applications for
registration and registrations therefore; Internet domain names and 1-800 and
1-888 telephone numbers; all permits, grants, franchises and licenses to or from
any of Seller or the General Partner; all copyrights, including rights in
advertising and promotional material (whether registered or unregistered) and
applications for registration and registrations therefor; and all Confidential
Information, used or developed by any of Seller or the General Partner, or in
which any of Seller or the General Partner has an interest, used in connection
with the Business, and their respective actual or potential use or application,
including but not limited to those Intellectual Property Rights set forth on
Schedule 4.26. Other than the Intellectual Property Rights, no other patent,
trademark, service xxxx, trade name, copyright, confidential information or any
other intellectual property right or license under any such patent, trademark,
service xxxx, trade name, copyright, confidential information or any other
intellectual or intangible property is necessary to permit the Business to be
conducted as now conducted. Except as set forth on Schedule 4.26, Seller owns
exclusively and/or has the right to use, free and clear of all Encumbrances, all
Intellectual Property Rights (and, with respect to such owned Intellectual
Property Rights, all renewals therefor and claims for infringement thereof).
Except as set forth on Schedule 4.26, none of Seller or the General Partner is
obligated or under any liability whatsoever to make any payments by way of
royalties, fees or otherwise to any owner or licensee of, or other claimant to,
any patent, trademark, service xxxx, trade name, copyright, confidential
information or other intangible asset, with respect to the use of any of the
Intellectual Property Rights, in connection with Seller's ownership of its
assets or the conduct of the Business. None of Seller or the General Partner has
licensed or transferred any of the Intellectual Property Rights to any third
party. Except as described on Schedule 4.26, to the Knowledge of Seller, Seller
is not in violation or infringement of, and has not violated or infringed, any
proprietary or intellectual property rights of any third party. To the Knowledge
of Seller, none of Seller or the General Partner has received any demand, claim,
notice or inquiry from any third party with respect to any of the Intellectual
Property Rights which challenges, threatens to challenge, or inquires as to
whether there is any basis to challenge, the validity of, or the rights of
Seller in, any such Intellectual Property Rights, and to the Knowledge of Seller
, there is no basis for any such challenge. To the Knowledge of Seller, none of
the Intellectual Property Rights is being infringed or potentially infringed.
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(b) To the Knowledge of Seller, Seller has the unrestricted
right to use all Confidential Information required for or incident to the
development, manufacture, operation, advertisement, promotion, distribution and
sale of all products sold and services offered, or proposed to be sold or
offered, by Seller free and clear of all Encumbrances, including, without
limitation, of any former employer of Seller's employees.
4.27 Insurance. Seller is insured under various policies of fire,
liability and other forms of insurance, as set forth on Schedule 4.27 hereto,
which policies are valid and enforceable in accordance with their terms. Except
as set forth in Schedule 4.27, at no time since Seller commenced operations was
there a period in which Seller lacked occurrence-based insurance coverage.
Seller shall continue to carry all such policies or similar policies until the
Closing Date, and all outstanding claims under such policies are described in
Schedule 4.27 hereto. There is no recorded liability for retrospective insurance
premium adjustments for any period prior to the date hereof. Schedule 4.27
hereto sets forth a complete and accurate list of the following, each of which
have been made available to Buyer and Atrium for their review:
(a) All comprehensive general liability and other policies of
insurance under which Seller is or has been insured at any time within the three
(3) year period immediately preceding the date of this Agreement.
(b) All property and casualty policies of insurance under
which Seller is presently insured.
(c) All obligations of Seller to provide insurance coverage to
third parties (for example under leases or other contracts).
(d) The expiration date of each insurance policy under which
Seller is currently insured.
4.28 Affiliated Transactions. Except as set forth on Schedule 4.28,
since January 1, 2003 no present or former officer, director, shareholder,
employee or Affiliate of Seller and, to the Knowledge of Seller, no individual
in such officer's, director's, shareholder's, employee's or Affiliate's
immediate family, is or was a party to any agreement, contract, commitment or
transaction with Seller or has any interest in any property owned or used by
Seller. Except as set forth on Schedule 4.28, to the Knowledge of Seller, no
employee of Seller or any individual in such employee's immediate family is a
party to any agreement, contract, commitment or transaction with any Selling
Party or has any interest in any property owned or used by any Selling Party.
4.29 Change of Control Provisions. Except as set forth on Schedule
4.29, neither the execution and delivery of this Agreement or the Related
Agreements nor the consummation of the Contemplated Transactions will trigger
(i) any obligation of Seller to any third party, including without limitation,
the obligation to make payment to any third party pursuant to any contract or
agreement to which Seller is a party or by which it
27
or its assets are bound, or (ii) any termination or other rights under any of
the Assumed Agreements.
4.30 Brokerage Fees. Except as set forth on Schedule 4.30, no brokerage
commissions, finders' fees or similar compensation will be payable to any party
in connection with the Contemplated Transactions based on any arrangement or
agreement made by or on behalf of any of Seller or the General Partner.
4.31 Customers and Suppliers. Except as set forth on Schedule 4.31,
since January 1, 2004, Seller has maintained and has had good relationships with
its top ten (10) customers and its top ten (10) suppliers of raw materials (each
as determined by dollar volume paid for 2003), and none of Seller or the General
Partner is aware of any specific facts that would lead to a reasonable
expectation that any such relationship would be terminated or materially
diminished. To the Knowledge of Seller, Seller is not in breach of any
representation, warranty, covenant, obligation or other provision of any
outstanding agreement with any such customer or supplier, except for breaches
which would not, individually or in the aggregate, result in a Material Adverse
Effect. Schedule 4.31 sets forth a list of the top ten (10) customers and top
ten (10) suppliers of raw materials of Seller (each as determined by dollar
volume paid for 2003).
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF BUYER AND ATRIUM
Each of Buyer and Atrium, jointly and severally, represents and
warrants to the Selling Parties as follows:
5.1 Organization and Good Standing. Buyer is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware. Atrium is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
5.2 Due Authorization; Binding Obligation.
(a) Each of Buyer and Atrium has all requisite limited
liability company or corporate power and authority, as the case may be, to enter
into and deliver this Agreement and the Related Agreements to which it is a
party and to perform its obligations hereunder and thereunder and has duly
authorized the execution, delivery and performance of this Agreement and the
Related Agreements by all necessary limited liability company or corporate
action, as the case may be.
(b) This Agreement and the Related Agreements have been duly
and validly authorized, executed and delivered by each of Buyer and Atrium and
constitute Buyer's and Atrium's legal, valid and binding obligation, enforceable
in accordance with their respective terms, except as enforceability is limited
by (i) principles of equity that may restrict the availability of specific
performance and other equitable remedies (whether such enforceability is
considered in a proceeding in equity or at law) and (ii) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, fraudulent transfer and other
laws applicable to creditors' rights generally.
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5.3 Governmental Approvals. The execution, delivery and performance of
this Agreement and the Related Agreements by Buyer and Atrium, and consummation
of the Contemplated Transactions, are not subject to the jurisdiction, approval,
notification of or consent of any governmental, regulatory or administrative
agency.
5.4 Approvals and Notices Required; Conflict with Other Instruments.
Except as described on Schedule 5.4, the execution, delivery and performance of
this Agreement and the Related Agreements by Buyer and Atrium and the
consummation of the Contemplated Transactions will not violate (with or without
the giving of notice or the lapse of time or both) or require any consent or
approval, filing or notice under and will not conflict with, or result in the
breach or termination of any provision of, or constitute a default under, or
result in the acceleration of the performance of the obligations of Buyer under
Buyer's Certificate of Formation or Operating Agreement or of Atrium under
Atrium's certificate of incorporation or bylaws or under any indenture,
mortgage, deed of trust, lease, license agreement, contract, instrument or other
agreement, or any law, order, judgment or decree to which Buyer or Atrium is a
party or by which Buyer or Atrium is bound.
5.5 Brokerage Fees. No brokerage commissions, finders' fees or similar
compensation arrangements will be payable to any party in connection with the
Contemplated Transactions based on any arrangement or agreement made by or on
behalf of Buyer or Atrium.
ARTICLE 6. CONDITIONS TO BUYER'S AND ATRIUM'S PERFORMANCE
The obligations of Buyer and Atrium under this Agreement shall be
subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:
6.1 Financing. Atrium shall have obtained the debt and/or equity
financing necessary to consummate the Contemplated Transactions on terms
satisfactory to Atrium in its sole discretion, and Atrium shall be permitted to
incur such financing under its existing financing arrangements.
6.2 Compliance by the Selling Parties. Each of the Selling Parties
shall have complied with and performed all of its respective agreements and
obligations under the terms, covenants and conditions of this Agreement to be
complied with or performed by it on or prior to the Closing Date.
6.3 Representations and Warranties of the Selling Parties. The
representations and warranties of the Selling Parties contained in this
Agreement shall be true and correct as of the Closing Date, with the same force
and effect as if made as of the Closing Date, except for those representations
and warranties that specifically refer to some other date.
6.4 Certificate of Seller. The Chief Executive Officer or other duly
authorized officer of each of Seller and the General Partner shall have
delivered to Buyer and Atrium a certificate, dated as of the Closing Date,
stating that the conditions specified in Sections 6.2 and 6.3 have been
fulfilled.
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6.5 Consents, Permits, and Waivers. The Selling Parties shall have
obtained all of the consents, permits and waivers set forth on Schedule 6.5 in
form and substance reasonably satisfactory to Buyer and Atrium.
6.6 Delivery of Documents. Seller and the General Partner shall have
delivered to Buyer and Atrium each of the following:
(a) a certificate of the Secretary of each of Seller and the
General Partner relating to the incumbency and partnership and corporate
proceedings, as applicable, in connection with the execution, delivery and
performance of this Agreement and the Related Agreements and the consummation of
the Contemplated Transactions, and the absence of changes in Seller's
certificate of limited partnership and limited partnership agreement and in the
General Partner's articles of incorporation and bylaws, together with copies of
the resolutions duly adopted by each of Seller's and the General Partner's
governing body authorizing the execution, delivery and performance of this
Agreement and the Related Agreements and the consummation of the Contemplated
Transactions;
(b) (i) a copy of the organizational documents of each of
Seller and the General Partner, and all amendments thereto, certified by the
Florida Secretary of State as of a date not more than ten (10) days prior to the
date hereof; (ii) a copy of the governing operational documents of each of
Seller and the General Partner, certified by the Secretary of such entity as of
the Closing Date, and all amendments thereto; (iii) with respect to each of
Seller and the General Partner, a Certificate of Existence or Good Standing from
the Secretary of State of the State of Florida, as of a date not more than ten
(10) days prior to the Closing Date, evidencing such entity's existence or good
standing in such jurisdiction; and (iv) Certificates of Existence or Good
Standing from the Secretary of State of each state wherein Seller is duly
qualified to conduct business, as of a date not more than ten (10) days prior to
the Closing Date, evidencing Seller's existence or good standing in such
jurisdictions.
6.7 Assignment and Assumption Agreement. Seller shall have executed and
delivered to Buyer the Assignment and Assumption Agreement.
6.8 Xxxx of Sale. Seller shall have executed and delivered to Buyer the
Xxxx of Sale.
6.9 Escrow Agreement. The Selling Parties and the Escrow Agent shall
have executed and delivered the Escrow Agreement.
6.10 Opinion of Counsel. Seller and the General Partner shall have
delivered to Buyer and Atrium an opinion of their counsel, dated the Closing
Date, in the form of Exhibit D hereto.
6.11 Warrant. Gates Dearen shall have executed and delivered a warrant
substantially in the form of Exhibit E hereto (the "Warrant") and the parties
thereto shall be prepared to consummate the transactions contemplated thereby
simultaneously with the Closing hereunder.
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6.12 Buy/Sell Agreement. Gates Dearen shall have executed and delivered
a buy/sell agreement substantially in the form of Exhibit F hereto (the
"Buy/Sell Agreement").
6.13 FIRPTA Certificate. Each of Seller and the General Partner shall
have executed and delivered a certificate, substantially in the form of Exhibit
G hereto, containing the information, under penalties of perjury, set forth in
Treasury Regulation Section 1.1445-2(b)(2).
6.14 Employment Agreements. Each of Gates Dearen, Xxxxx Xxxxxx and
Xxxxx Xxxx shall have executed an employment agreement substantially in the form
of Exhibit H hereto (the "Employment Agreements").
6.15 [Intentionally omitted.]
6.16 Owned Real Estate. Seller shall have (i) executed and delivered to
Buyer any and all documents and instruments necessary to sell, convey and
transfer to Buyer good and marketable title to the Owned Real Estate, free and
clear of Encumbrances, other than the Assumed Liabilities and the Permitted
Encumbrances, (ii) obtained, executed (if applicable) and delivered to Buyer the
required consents necessary to transfer to Buyer all of Seller's right, title
and interest in and to the Leased Real Estate, free and clear of Encumbrances
(other than the Permitted Encumbrances), subject to Section 4.11(b) of this
Agreement, (iii) obtained, delivered and transferred to Buyer the certificates
of occupancy, estoppels, related due diligence and the Permits (to the extent
the same are transferable), required for the operation of the Real Estate,
subject to Section 4.18 of this Agreement, (iv) caused to be delivered to Buyer,
at Seller's sole cost and expense (such cost and expenses not to exceed
$20,000), a title insurance policy (the "Title Policy") issued by Commonwealth
Land Title Insurance Company (the "Title Company"), in the amount of $4,845,000,
insuring Buyer's good and marketable title to the Owned Real Estate and Buyer's
leasehold interests in the Leased Real Estate, subject only to (a) those
exceptions approved, or deemed to be approved, by Buyer, and as otherwise
provided herein, and (b) the standard printed exceptions included in the Title
Policy, and (v) executed, delivered or caused to be delivered to Buyer such
other documents and instruments, otherwise required to consummate the closing of
the transactions contemplated by this Agreement.
6.17 Manufacturing Facility Lease. Buyer and Seller (or an Affiliate of
Seller) shall have entered into a lease agreement, substantially in the form of
Exhibit I hereto (the "Lease Agreement"), pursuant to which Seller (or an
Affiliate of Seller) shall lease the Manufacturing Facility to Buyer.
6.18 Nondisturbance Agreement. The Selling Parties shall have obtained
and delivered to Buyer an agreement, substantially in the form of Exhibit J
hereto, from any holder of any mortgage or deed of trust placed upon any of the
Manufacturing Facility or any other manufacturing facility leased or owned by
Seller or used in connection with Seller's Business, or any part thereof, that
the possession, use or enjoyment of said Manufacturing Facility or other
manufacturing facilities by Buyer shall not be disturbed
31
by such holder, its designee or nominee, or a purchaser at foreclosure, or any
of their successors or assigns, provided that Buyer is not in default of any
lease thereon.
6.19 No Litigation or Governmental Proceeding. No action or proceeding
shall have been instituted before any court or governmental body or by any third
party to restrain or prohibit, or to obtain damages in respect of, the
consummation of the Contemplated Transactions. No party to this Agreement shall
have received written notice from any governmental body of (i) its intention to
institute any action or proceeding to restrain or enjoin or nullify this
Agreement, the Related Agreements or the Contemplated Transactions, or to
commence any investigation into the consummation of the Contemplated
Transactions, or (ii) the actual commencement of such an investigation.
6.20 No Material Adverse Effect. No event shall have occurred which has
or can reasonably be expected to have a Material Adverse Effect.
6.21 Satisfaction of Obligations and Release of Encumbrances. The
Selling Parties shall have satisfied, or will satisfy with the Purchase Price
proceeds payable to Seller hereunder, in full (i) all of Seller's indebtedness
and guarantees of indebtedness for money borrowed outstanding and all prepayment
penalties, accrued interest and other obligations relating thereto, including,
without limitation, all notes payable to general or limited partners or other
equity holders, and (ii) all of Seller's capitalized lease obligations and all
prepayment penalties, accrued interest and other obligations relating thereto,
if any. Buyer and Atrium shall have received payoff letters with respect to, and
satisfactory evidence of the satisfaction of each of the liabilities and
obligations set forth in Schedule 6.22 and of the release of all Encumbrances on
the Purchased Assets, if any (other than the Permitted Encumbrances). The
Selling Parties shall have received and delivered to Buyer and Atrium all
consents from third parties necessary to file UCC-3 termination statements or
similar terminating documents related to any Encumbrances on any of the
Purchased Assets.
6.22 [Intentionally omitted.]
6.23 Corporate Name Changes. Each of Seller and the General Partner
shall have amended their respective organizational documents so as to amend or
modify promptly after the Closing the formal corporate or trade names, as the
case may be, of Kinco in all jurisdictions where those names are registered and
shall have made the name Kinco available for Buyer's immediate use.
6.24 Estimated Closing Balance Sheet. Buyer and Seller shall have
reached agreement as to the form and substance of the Estimated Closing Balance
Sheet.
6.25 Due Diligence. Buyer shall be satisfied in its sole discretion as
to the results of its due diligence investigation of the business, properties,
assets and liabilities of Seller.
6.26 Acknowledgment of No Liability. Each of the persons identified on
Schedule 6.26 shall have executed and delivered to Buyer a written
acknowledgement that neither Atrium nor Buyer, nor any of their respective
Affiliates, shall have any
32
liability, known or unknown, to such person under any prior or existing
agreement or understanding between such person and any Selling Party.
6.27 Waiver by Buyer and Atrium. Buyer and Atrium may at their option
waive in writing the performance of any of the Selling Parties' covenants or any
of the conditions contained in this Article 6.
ARTICLE 7. CONDITIONS TO SELLING PARTIES' PERFORMANCE
The obligations of the Selling Parties under this Agreement shall be
subject to the satisfaction on or prior to the Closing Date of the following
conditions:
7.1 Compliance by Buyer and Atrium. Each of Buyer and Atrium shall have
complied with and performed all its agreements and obligations under the terms,
covenants and conditions of this Agreement to be complied with or performed by
it on or prior to the Closing Date, including delivery of the Purchase Price
pursuant to Section 2.2 hereof.
7.2 Buyer's and Atrium's Representations and Warranties. The
representations and warranties of Buyer and Atrium contained in this Agreement
shall be true and correct as of the Closing Date, with the same force and effect
as if made as of the Closing Date, except for those representations and
warranties that specifically refer to some other date.
7.3 Certificate of Buyer. Buyer's and Atrium's Chief Executive Officer
shall have delivered to Seller a certificate, dated as of the Closing Date,
stating that the conditions specified in Sections 7.1 and 7.2 have been
fulfilled by Buyer and Atrium.
7.4 Buyer's Consents, Permits and Waivers. Buyer and/or Atrium shall
have obtained all of the consents, permits and waivers set forth on Schedule 5.4
in form and substance reasonably satisfactory to the Selling Parties.
7.5 Delivery of Documents. Buyer and Atrium shall have delivered to the
Selling Parties each of the following:
(a) a certificate of the Secretary of each of Buyer and Atrium
relating to the incumbency and limited liability company and corporate
proceedings, as applicable, in connection with the execution, delivery and
performance of this Agreement and the Related Agreements and the consummation of
the Contemplated Transactions, and the absence of changes in Buyer's certificate
of formation and limited liability company agreement and Atrium's articles of
incorporation and bylaws, together with copies of the resolutions duly adopted
by each of Buyer and Atrium's governing body authorizing the execution, delivery
and performance of this Agreement and the Related Agreements and the
consummation of the Contemplated Transactions;
(b) (i) a copy of the organizational documents of each of
Buyer and Atrium, and all amendments thereto, certified by the Delaware
Secretary of State as of a date not more than ten (10) days prior to the date
hereof; (ii) a copy of the governing
33
operational documents of each of Buyer and Atrium, certified by the Secretary of
such entity as of the Closing Date, and all amendments thereto; and (iii) with
respect to each of Buyer and Atrium, a Certificate of Existence or Good Standing
from the Secretary of State of the State of Delaware, as of a date not more than
ten (10) days prior to the Closing Date, evidencing such entity's existence or
good standing in such jurisdiction.
7.6 No Litigation or Governmental Proceeding. No action or proceeding
shall have been instituted before any court or governmental body or by any third
party to restrain or prohibit, or to obtain damages in respect of, the
consummation of the Contemplated Transactions. No party to this Agreement shall
have received written notice from any governmental body of (i) its intention to
institute any action or proceeding to restrain or enjoin or nullify this
Agreement, the Related Agreements or the Contemplated Transactions, or to
commence any investigation into the consummation of the Contemplated
Transactions, or (ii) the actual commencement of such an investigation.
7.7 Assignment and Assumption Agreement. Buyer shall have executed and
delivered to Seller the Assignment and Assumption Agreement.
7.8 Escrow Agreement. Buyer, Atrium and the Escrow Agent shall have
executed and delivered the Escrow Agreement.
7.9 Warrant. Parent shall have executed and delivered the Warrant and
Parent shall be prepared to consummate the transactions contemplated thereby
simultaneously with the Closing hereunder.
7.10 Buy/Sell Agreement. Parent shall have executed and delivered the
Buy/Sell Agreement.
7.11 Lease Agreement. Buyer shall have entered into the Lease
Agreement.
7.12 Employment Agreements. Buyer shall have executed the Employment
Agreements.
7.13 [Intentionally omitted.]
7.14 Estimated Closing Balance Sheet. Buyer and Seller shall have
reached agreement as to the form and substance of the Estimated Closing Balance
Sheet.
7.15 Waiver. The Selling Parties may at their option waive in writing
the performance of any of Buyer's and/or Atrium's covenants or any of the
conditions contained in this Article 7.
ARTICLE 8. COVENANTS AND AGREEMENTS
8.1 [Intentionally omitted.]
8.2 Future Litigation; Breaches of Representations and Warranties.
Seller shall promptly advise Buyer in writing of (A) the commencement or threat
against Seller
34
of (i) any claim, litigation or proceeding, and (ii) any Tax audit, and (B) any
breach by any of Seller or the General Partner of any of their respective
representations and warranties set forth herein.
8.3 Expenses. Subject to Section 9.2 hereof, each of the parties hereto
will, except as set forth elsewhere in this Agreement, bear its or his own
expenses in connection with this Agreement and the Contemplated Transactions
(including, without limitation, attorneys' fees, accounting fees and investment
banking fees); provided, however, that:
(a) Seller shall pay (i) the basic premium (not to exceed
$20,000) for the Title Policy (excluding any additional premiums, costs or fees
required to modify or delete any standard exceptions or to obtain any other
endorsements except as otherwise agreed by Seller), (ii) the cost of the
preparation and recording of any deeds related to the Owned Real Estate, (iii)
the costs for tax certificates, and (iv) one-half (1/2) of any valid escrow fee
charged by the Title Company; and
(b) Buyer shall pay (i) any additional premiums, costs or fees
required to modify or delete any of the standard exceptions or to obtain any
endorsements, (ii) the cost of an inspection of the Owned Real Estate by the
Title Company required to delete the "rights of parties in possession"
exception, if Buyer elects to obtain any such modifications, deletions or
endorsements, and (iii) one-half (1/2) of any valid escrow fee charged by the
Title Company.
8.4 Tax Matters and Post-Closing Cooperation.
(a) Seller shall prepare and timely file or cause to be
prepared and timely filed in a manner consistent with past practice, all Tax
returns that are required to be filed by or with respect to Seller and/or the
Business on or before the Closing Date. Seller shall pay or cause to be paid all
Taxes shown as due, or required to be shown as due, on such Tax returns. Buyer
shall allow Seller and its agents reasonable access to all information necessary
to file all Tax Returns contemplated by this Section 8.4.
(b) Notwithstanding anything in this Agreement to the
contrary, Seller agrees to pay and discharge, promptly and diligently, when due,
all transfer, sales, bulk sales, use, value-added, stamp duties or other like
transfer taxes or recording fees, if any, payable as a result of the
Contemplated Transactions.
(c) Any ad valorem, use, real and personal property,
intangible and other similar Taxes, installments or special assessments,
utility, water or similar payments arising from, or relating to, the Purchased
Assets, which become due and payable on or after the Closing Date and relate to
periods beginning before and ending after the Closing Date, shall be prorated
and adjusted between Buyer and Seller as of the Closing Date on a per diem basis
and Seller shall be responsible for the portion of such amounts allocable to the
period (or portion thereof) ending on or prior to the Closing Date.
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(d) The parties agree that for Tax purposes the Contemplated
Transactions shall be reported as a sale of assets and the existence of Seller
as an entity shall survive the Closing. Seller shall prepare and timely file, or
cause to be prepared and timely filed, in a manner consistent with past
practice, all Tax Returns that are required to be filed with respect to
liabilities for Taxes of Seller arising in the ordinary course of business of
Seller up through and including the Closing Date, or from the sale of the
Purchased Assets to Buyer.
(e) Seller shall satisfy and have discharged any Tax liens
(other than Permitted Encumbrances) on the Purchased Assets prior to the Closing
Date.
(f) Seller shall have the right for a period after the Closing
Date and equal to the applicable statute of limitations to the filing of any Tax
return to have reasonable access to those books, records and accounts, including
financial and Tax information, correspondence and other records of the Buyer and
Atrium (which Buyer and Atrium agree to retain in accordance with customary
operating procedures) to the extent that any of the foregoing is needed by a
Selling Party in order to comply with its obligations under applicable
securities, Tax, environmental, employment or other laws and regulations.
8.5 [Intentionally omitted.]
8.6 Warranties. As of the Closing, Seller shall be deemed to have
assigned to Buyer, without recourse, all of their right, title and interest in
and to such warranties (express or implied) as are assignable and continue in
effect with respect to any of the Purchased Assets and to have nominated Buyer
as its true and lawful attorney to enforce such warranties against any
manufacturers or vendors, and Seller shall execute and deliver such specific
assignments of such warranty rights as Buyer may reasonably request.
8.7 [Intentionally omitted.]
8.8 [Intentionally omitted.]
8.9 Purchase Orders and Inquiries. All customer purchase orders and
inquiries received by any Selling Party after the Closing with respect to the
Business will be referred to Buyer.
8.10 Collection of Receivables. Following the Closing Date, all cash,
checks or other proceeds received by Seller or any of its banks or other
financial institutions in payment of Accounts Receivable shall be paid to Buyer
within five (5) business days after receipt by Seller, which payments shall be
accompanied by a statement identifying the payee, the amount of the payment and
the related invoice number. Seller agrees to endorse and Buyer shall have the
right to endorse the name of Seller on any such checks or proceeds (whether
received directly by Buyer or received from Seller or its bank) and shall
deposit such checks and other proceeds in bank accounts maintained in Buyer's
name. From and after the Closing Date, Seller shall cooperate with, and provide
36
reasonable assistance to Buyer in collecting such accounts. Buyer shall use
commercially reasonable efforts to collect the Accounts Receivable outstanding
as of the Closing Date.
8.11 Insurance Matters. Promptly after the Closing, Seller shall cause
all of Seller's existing insurance polices listed on Schedule 4.27, as
applicable, to be endorsed with Buyer and Atrium as additional insureds;
provided, however, that Seller will remain the primary beneficiary of any
coverage relating to periods prior to the Closing Date.
8.12 Employee Matters.
(a) Contingent on the consummation of the Contemplated
Transactions, effective as of the Closing Date, (i) Seller shall terminate the
employment of all employees of the Business and (ii) Buyer shall offer
employment to substantially all employees of the Business on substantially
similar terms and conditions of employment as those previously provided by
Seller. No later than two (2) days prior to the Closing, Seller shall deliver
written notice (in form and substance reasonably acceptable to Buyer) to all
employees of the Business advising them of the foregoing and that any such
employee's future employment with Buyer shall be conditioned upon such employee
executing and delivering to Buyer a new form W-4 and form I-9 and any other
documents reasonably required by Buyer. All such employees offered and accepting
employment with Buyer shall be referred to herein as "Transferee Employees."
Seller and Buyer shall cooperate with each other to the extent practicable to
minimize any disruption to Seller's workforce arising from the foregoing.
(b) Seller shall be solely responsible for any obligations for
continuation coverage under Section 4980B of the Tax Code and part 6 of Subtitle
B of Title I of ERISA with respect to all employees of the Business and their
eligible dependents who become M&A qualified beneficiaries (as defined by
Treasury Regulation Section 54.4980B-9, Q&A-4); provided, however, that this
Section 8.12(b) shall not obligate Seller to maintain any insurance plan or
benefit, except as may be required by applicable law. Specifically, King hereby
waives and releases any claims for COBRA coverage he may have at any time
against Buyer, Atrium or any of its Affiliates and King covenants and agrees to
execute any additional documents reasonably requested by Buyer or Atrium to
effectuate this release and waiver.
(c) Although Buyer currently intends to, and knows of no
reason that it would not, for the indefinite future, continue the employment of
essentially all Transferee Employees, the Transferee Employees will be employed
by Buyer "at will" and Buyer reserves the right at any time and for any reason
to terminate any Transferee Employee. Buyer shall have the right to determine,
in its sole discretion, the compensation and benefits policies applicable to the
Transferee Employees after Closing; provided, however, that under any welfare,
pension or profit sharing plans adopted by Buyer (but not for the actual accrual
of benefits), (i) service with Seller and its Affiliates prior to the Closing
shall be counted for purposes of determining any period of eligibility to
participate or to vest in benefits, including vacation rights, (ii) any amounts
previously expended by Transferee Employees for purposes of satisfying
deductibles under any medical or dental plans of Seller for the applicable
current plan year shall be credited for
37
purposes of satisfying any deductibles under Buyer's plans, and (iii) no
preexisting condition limitations (that would not have been applicable under
Seller's health benefit plans) shall be imposed on Transferee Employees upon
admittance into any health benefits plan maintained by Buyer.
(d) From and after the Closing, Seller shall assume or retain,
as the case may be, and be solely responsible for, all liabilities and
obligations arising under, resulting from or relating to Seller's Plans or,
except as set forth on the Closing Balance Sheet, Seller's employment of or
termination of its employees, whether incurred before, on or after the Closing.
(e) At the Closing, Seller shall disclose to Buyer any
"employment loss," as such term is defined in the WARN Act, incurred by Seller
during the period beginning on the date that is ninety (90) days prior to the
Closing Date and ending on the Closing Date (along with certification that all
such employment losses and other terminations of employment have not triggered
liability of Seller or their Affiliates for any worker protection benefits under
the WARN Act or any similar state or local law). Notwithstanding any provision
of the Agreement to the contrary, should Buyer take any action from and after
the Closing Date which causes any liability under WARN relating to personnel
actions of Seller occurring at or before the Closing (including, without
limitation, any failure by Buyer to comply with this Section 8.12 hereof or any
constructive discharge of any of the Transferee Employees as a result of Buyer
failing to offer such employees compensation and benefits comparable to those
currently payable to such employees by Seller under the terms of their
employment arrangements with Seller), Buyer shall indemnify, defend and hold
harmless the Selling Parties against any and all costs, expenses, liabilities
and losses arising under WARN attributable to Buyer's actions.
ARTICLE 9. TERMINATION
9.1 Termination. This Agreement may be terminated at any time by
written notice given prior to or at the Closing:
(a) by either Buyer and Atrium, on the one hand, or the
Selling Parties, on the other hand (the "Non-Breaching Party"), if there is a
material violation or material breach by the other (the "Breaching Party") of
any covenant, representation, warranty or obligation contained in this Agreement
and such violation or breach has not been waived by the Non-Breaching Party or
cured by the Breaching Party within ten (10) days after written notice thereof
from the Non-Breaching Party;
(b) by either Buyer and Atrium, on the one hand, or the
Selling Parties, on the other hand, if the Contemplated Transactions have not
been consummated (other than through the failure of any party seeking to
terminate this Agreement to comply in all material respects with its obligations
under this Agreement) by the Transaction Deadline Date, or such later date as
the parties may agree in writing; provided that none of the parties shall be
entitled to terminate this Agreement pursuant to
38
this Section 9.1(b) if such party's knowing or willful breach of this Agreement
has prevented the consummation of the Contemplated Transactions; or
(c) by mutual written consent of Buyer, Atrium and the Selling
Parties.
9.2 Effect of Termination. In the event of termination of this
Agreement as provided in Section 9.1, the provisions of this Agreement shall
immediately become of no further force and effect (other than Section 8.3, this
Article 9 and Article 12, each of which shall survive the termination of this
Agreement) without any party being liable to any other party; provided, however,
that the following shall apply:
(a) in the event that this Agreement may be terminated by the
Non-Breaching Party pursuant to Section 9.1(b) hereof and the Non-Breaching
Party elects to close rather than terminate the Contemplated Transactions
despite a breach or violation of this Agreement, such Non-Breaching Party shall
be entitled to seek indemnity from the Breaching Party pursuant to Article 10
hereof; and
(b) in the event that this Agreement is terminated pursuant to
Section 9.1(b) hereof and the violation or breach of this Agreement was willful
or intentional, the Non-Breaching Party shall be entitled to receive from the
Breaching Party an amount equal to all reasonable out-of-pocket fees and
expenses (including reasonable fees and expenses of counsel) incurred by the
Non-Breaching Party and its representatives and Affiliates in connection with
this Agreement and the Contemplated Transactions, and may seek damages from the
Breaching Party and/or equitable relief.
ARTICLE 10. INDEMNIFICATION
10.1 Seller's and General Partner's Agreement to Indemnify. Subject to
the terms and conditions of this Article 10, each of Seller and the General
Partner, jointly and severally, hereby agrees to indemnify, defend and hold
harmless Buyer and Atrium and their officers, directors, employees,
stockholders, insurers, representatives, agents, successors and assigns from and
against all losses, damages, demands, claims, assessments, actions, Taxes,
penalties, interest, reasonable attorneys' and accountants' fees, settlement
costs and other costs and expenses, less any insurance proceeds actually
received by the Indemnified Parties in connection therewith (collectively,
"Indemnified Losses") arising out of, or incident to, without duplication, any
of the following:
(a) any breach of any representation or warranty made by any
of Seller or the General Partner herein or in any certificate or other
instrument delivered pursuant hereto (except for any breach of any
representation or warranty set forth in Section 4.5(d) or 4.5(e) that results in
an adjustment to Working Capital pursuant to Section 2.3 in favor of Buyer);
(b) any breach or failure by either Seller or the General
Partner to perform or fulfill any of its covenants or agreements set forth
herein (including, without limitation, failure by such person to pay, discharge
or perform any of its obligations and liabilities that constitute Excluded
Liabilities);
39
(c) any liabilities or obligations resulting from any of
Seller's or the General Partner's failure to comply with the provisions of any
state's laws with respect to bulk transfers, or acts of similar nature, as such
laws may be applicable to the Purchased Assets;
(d) any Tax liability of or attributable to any of Seller or
the General Partner with respect to any Tax period;
(e) any Excluded Liability; or
(f) any and all claims, actions, suits, proceedings,
investigations, demands, assessments and judgments incident to any of the
foregoing, including but not limited to any litigation costs or attorneys fees
incurred by Buyer or Atrium associated with determining Seller's insurance
coverage or lack thereof during the period of July 21, 2003 to January 31, 2004.
10.1A Limited Partners' Agreement to Indemnify. Subject to the terms
and conditions of this Article 10, each Limited Partner, severally, and not
jointly, hereby agrees to indemnify, defend and hold harmless each of Buyer and
Atrium and each of their respective officers, directors, employees,
stockholders, representatives, agents, successors and assigns from and against
all Indemnified Losses arising out of, or incident to, without duplication, any
of the following:
(a) any breach of any representation or warranty made by
Seller or the General Partner herein or in any certificate or other instrument
delivered pursuant hereto (except for any breach of any representation or
warranty set forth in Section 4.5(d) or 4.5(e) that results in an adjustment to
Working Capital pursuant to Section 2.3 in favor of Buyer);
(b) any breach or failure by Seller or the General Partner to
perform or fulfill any of its covenants or agreements set forth herein
(including, without limitation, failure by such Person to pay, discharge or
perform any of its obligations and liabilities that constitute Excluded
Liabilities);
(c) any breach of any representation or warranty made by such
Limited Partner contained in Article 3 of this Agreement;
(d) any breach or failure by such Limited Partner to perform
or fulfill any of its covenants or agreements set forth herein;
(e) any liabilities or obligations resulting from any Seller's
failure to comply with the provisions of any state's laws with respect to bulk
transfers, or acts of similar nature, as such laws may be applicable to the
Purchased Assets;
(f) any Tax liability of or attributable to any of the Selling
Parties with respect to any Tax period;
(g) any Excluded Liability; or
40
(h) any and all claims, actions, suits, proceedings,
investigations, demands, assessments and judgments incident to any of the
foregoing, including but not limited to any litigation costs or attorneys fees
incurred by Buyer or Atrium associated with determining Seller's insurance
coverage or lack thereof during the period of July 21, 2003 to January 31, 2004.
10.2 Buyer's and Atrium's Agreement to Indemnify. Subject to the terms
and conditions of this Article 10, each of Buyer and Atrium, jointly and
severally, hereby agrees to indemnify, defend and hold harmless the Selling
Parties and their officers, directors, employees, stockholders, insurers,
representatives, agents, successors and assigns from and against all Indemnified
Losses arising out of, or incident to, without duplication, any of the
following:
(a) any breach of any representation or warranty made by Buyer
or Atrium herein or in any certificate or other instrument delivered pursuant
hereto;
(b) any failure by Buyer or Atrium to perform or fulfill any
of its covenants or agreements set forth herein (including, without limitation,
Buyer's failure to pay, discharge or perform any of the Assumed Liabilities);
(c) any Assumed Liability; or
(d) any and all claims, actions, suits, proceedings,
investigations, demands, assessments and judgments incident to any of the
foregoing.
10.3 Limitations on Indemnification. The indemnification provided for
in this Article 10 shall be subject to the following limitations:
(a) Deductible. The Selling Parties shall have no liability
under any provision of Article 10 unless and until the aggregate amount of all
Indemnified Losses of Buyer and Atrium for which the Selling Parties would, but
for this Section 10.3(a), be liable exceeds $150,000 (the "Deductible"). In no
event shall the Deductible apply to any Indemnified Loss arising out of (i) any
breach of a representation or warranty made in Section 4.2 or the first sentence
of Section 4.7, (ii) any Excluded Liabilities, (iii) liabilities for Taxes as
described in Section 10.1(d) or Section 10.1A(f), or (iv) any Selling Party's
fraud, bad faith or willful misconduct. Notwithstanding the foregoing, or
anything else in this Agreement to the contrary, the Selling Parties shall have
no liability under Article 10 with respect to any Indemnified Losses arising
from any environmental conditions, known or unknown, existing at any time at, on
or in the near vicinity of the Owned Real Estate located in Tampa, Florida,
unless and until the aggregate amount of all such Indemnified Losses of Buyer
and Atrium for which the Selling Parties would, but for this Section 10.3(a), be
liable exceeds $200,000.
(b) Indemnity Caps. Notwithstanding anything contained in this
Article 10:
(i) the aggregate liability of the Selling Parties
under Section 10.1(a) and Section 10.1(A)(a) shall not exceed $10 million less
any amounts
41
previously paid by the Selling Parties under this Section 10 (the "Basic
Indemnity Cap"); provided, however, that, subject to Section 10.1(b)(ii), the
Basic Indemnity Cap shall not apply to any Indemnified Loss arising out of (i)
any breach of a representation or warranty made in Section 4.2 or the first
sentence of Section 4.7, (ii) any Excluded Liabilities, (iii) liabilities for
Taxes as described in Section 10.1(d), or (iv) any Selling Party's fraud, bad
faith or willful misconduct;
(ii) notwithstanding the proviso in Section
10.3(b)(i), the aggregate liability of the Selling Parties under Section 10.1
and Section 10.1(A) with respect to any Indemnified Loss arising out of any
Excluded Liabilities described in clauses (a), (h) and (s) of Section 1.31 shall
not exceed $21 million less any amounts previously paid by the Selling Parties
under this Section 10 (the "Excluded Liabilities Indemnity Cap");
(iii) the Basic Indemnity Cap and the Excluded
Liabilities Indemnity Cap are collectively referred to herein as the "Indemnity
Caps";
(iv) notwithstanding anything to the contrary
contained herein, the representations and warranties contained in Article 3 and
the covenants set forth in Article 11 are made severally and not jointly by each
Selling Party as to himself or itself only and no other Selling Party shall be
liable therefor and no Selling Party shall be liable hereunder for any other
Selling Party's fraud, bad faith or willful misconduct.
(c) The indemnification obligations of each Limited Partner
under this Article 10 shall be limited to such Limited Partner's Allocable
Portion of the Indemnified Losses, and the aggregate Indemnified Losses for
which any Limited Partner may be liable under this Article 10 with respect to
indemnification claims subject to an Indemnity Cap shall not exceed an amount
equal to the applicable Indemnity Cap multiplied by such Limited Partner's
Allocable Portion less any amount previously paid or determined to be owing by
such Limited Partner pursuant to this Article 10. For purposes of this Section
10.3(c), a Limited Partner's "Allocable Portion" shall be equal to such Limited
Partner's ownership percentage of Seller as set forth on Schedule 3.1 hereto.
(d) If Buyer and/or Atrium are entitled to Indemnified Losses
pursuant to this Article 10, the amounts due to Buyer and/or Atrium shall be
satisfied first from the Escrow Fund as long as any funds remain therein, and
then from the Selling Parties in accordance with this Article 10.
(e) All indemnification claims hereunder and the calculation
of Indemnified Losses resulting therefrom shall first be adjusted to take into
account any insurance proceeds or net tax benefits actually received by the
Indemnified Party as a result of such claim or the underlying factual basis
therefor.
10.4 Notice of Claims. All claims for indemnification hereunder shall
be resolved in accordance with the following procedures:
(a) If Buyer or Atrium, on the one hand, or any Selling Party,
on the other hand, has incurred or reasonably believes that it may incur any
Indemnified Loss
42
(the "Indemnified Party"), it shall deliver promptly written notice to the other
(the "Indemnifying Party") setting forth in reasonable detail the nature and
amount of the Indemnified Loss or potential Indemnified Loss, if possible, and
further referencing the Sections of this Agreement upon which the claim for
indemnification for such Indemnified Loss is based and the date by which a
response from the Indemnifying Party is due (a "Claim Notice"). If an
Indemnified Party receives notice of a third-party claim for which it intends to
seek indemnification hereunder, it shall give the Indemnifying Party prompt
written notice of such claim, so that the Indemnifying Party's defense of such
claim under Section 10.5 hereof may be timely instituted. The failure by an
Indemnified Party to provide such written notice shall not constitute a waiver
of the Indemnified Party's right to indemnity unless such failure has resulted
in the loss of substantive rights with respect to the Indemnifying Party's
ability to defend such claim, and then only to the extent of such loss.
(b) If, after receiving a Claim Notice for an Indemnified
Loss, the Indemnifying Party desires to dispute such claim or the amount claimed
in the Claim Notice, it shall deliver to the Indemnified Party a written
objection to such claim or payment setting forth the basis for disputing such
claim or payment. Such notice shall be delivered within thirty (30) days after
the date the Claim Notice to which it relates is received by the Indemnifying
Party. If no such notice is received within the aforementioned 30-day period,
the Indemnified Party shall be entitled to payment for such Indemnified Loss
from the Indemnifying Party within fifteen (15) days after the end of such
30-day objection period (subject to Section 10.3(d)). If the parties are unable
to resolve the disputed claim within 60 days after delivery of notice of the
dispute, such dispute shall be resolved exclusively by binding arbitration
pursuant to Section 12.4 hereof.
10.5 Defense of Third-Party Claims. The Indemnifying Party under this
Article 10 shall have the right to conduct and control through counsel of its
own choosing, which counsel shall be reasonably acceptable to the Indemnified
Party, any third-party claim, action or suit; provided that the Indemnifying
Party diligently contests and defends such claim. The Indemnified Party shall
cooperate with the Indemnifying Party and its counsel in the defense or
compromise of such claim, action or suit. The Indemnified Party shall be
entitled at any time, at its own cost and expense (except that such cost and
expense shall be paid by the Indemnifying Party if the Indemnified Party
reasonably determines that the Indemnifying Party is not adequately representing
or, because of a conflict of interest, may not adequately represent the
interests of any Indemnified Party), to participate in such contest and defense
and to be represented by attorneys of its or their own choosing. Except with the
prior written consent of the Indemnified Party, which shall not be unreasonably
withheld, no Indemnifying Party, in the defense of such claim or litigation,
shall consent to entry of any judgment or order, interim or otherwise, or enter
into any settlement that provides for injunctive or other nonmonetary relief
affecting the Indemnified Party or that does not include as an unconditional
term thereof the giving by each claimant or plaintiff to such Indemnified Party
of a release from all liability with respect to such claim or litigation.
43
10.6 Failure to Defend. In the event that the Indemnifying Party does
not elect or otherwise fails to defend against any third-party claim, the
Indemnified Party may defend against such claim in such manner as it may in its
good faith discretion deem appropriate and, to the extent and subject to the
limitations provided in this Article 10, the Indemnifying Party shall be liable
for any legal expenses reasonably incurred in connection with such defense;
provided, however, that the Indemnified Party shall not, without the consent of
the Indemnifying Party, which consent shall not be unreasonably withheld, settle
or consent to the entry of judgment with respect to such third-party claim.
10.7 Cooperation. In the event of any claim by a third party, the
parties hereto agree that they will cooperate fully with each other in
connection with the defense or settlement of such matter.
10.8 Survival of Representations, Warranties, Covenants and Agreements.
Each of the parties hereto has the right to rely fully upon the representations,
warranties, covenants and agreements of the other contained herein or in any
certificate delivered with respect to any of the foregoing. Each of the
covenants and agreements shall survive the Closing indefinitely, except that any
covenant or agreement related to any Excluded Liability described in clauses
(a), (h) or (s) of Section 1.31 shall survive and remain in full force and
effect for a period of five (5) years following the Closing Date. The
representations and warranties set forth in this Agreement shall survive the
execution of this Agreement and the Closing and shall remain in full force and
effect for a period of two (2) years following the Closing Date. Notwithstanding
the foregoing, none of the limitations on survival set forth in this Section
10.8 shall apply to (i) any representation or warranty if a Claim Notice with
respect thereto is delivered as provided in this Article 10 hereof prior to
expiration of such period, or (ii) any representation or warranty made in
Section 4.2, the first sentence of Section 4.7 or Section 4.13, or any claim
based upon any Selling Party's fraud, bad faith or willful misconduct in
connection with this Agreement or the Related Agreements, which shall, in each
case set forth in this clause (ii) of this Section 10.8, survive until the
expiration of the applicable statute of limitations.
10.9 No Consequential Damages. The Indemnifying Party shall not be
liable to the Indemnified Party for consequential, enhanced, punitive or special
damages or the like unless such damages are included in a third-party claim and
the Indemnified Party is liable to the third party claimant for such damages.
10.10 Exclusive Remedy. Each of the parties hereto acknowledges and
agrees that the foregoing provisions of this Article 10 shall be the exclusive
remedy of the parties hereto with respect to any dispute or claim arising out of
or related to the Contemplated Transactions if the Contemplated Transactions are
consummated.
ARTICLE 11. NONCOMPETITION AND NONSOLICITATION
11.1 Acknowledgments. Each of the Selling Parties acknowledges that the
agreements and covenants contained in this Article 11 are essential to protect
the confidential information and goodwill associated with the Business being
acquired by
44
Buyer and that neither Buyer nor Atrium would enter into this Agreement but for
the agreements and covenants contained in this Article 11.
11.2 Covenant Against Competition. Each of the Selling Parties
covenants and agrees that, for a period of five (5) years following the Closing
Date (the "Non-Compete Period"), none of the Selling Parties nor their
Affiliates shall, without the consent of Buyer and Atrium, directly or
indirectly, engage in any manner in the business of making, assembling,
manufacturing, marketing or distributing any products similar to such products
as are manufactured or sold by the Business as of the Closing Date or any other
windows, doors, shutters or screens for sale in the United States, either for
its own account or in association with any other Person in any capacity,
including without limitation, as a partner, shareholder, investor, member,
principal, agent, lender or consultant; provided, however, that this restriction
shall not prevent any Selling Party from owning securities of any entity traded
on any national securities exchange or market if it or he is not a controlling
person of, or a member of a group which controls, such entity and does not,
directly or indirectly, own 1% or more of any class of securities of such
entity.
11.3 Nonsolicitation. During the Non-Compete Period, none of the
Selling Parties shall (a) directly or indirectly solicit or attempt in any
manner to persuade or influence any employees of Buyer or Atrium or any of their
respective Affiliates to work for any other Person or (b) directly or indirectly
solicit or attempt in any manner to persuade or influence any present or future
customer of Buyer or Atrium or any of their respective Affiliates to divert its
purchases of any products of Buyer or Atrium or any of their respective
Affiliates to any Person then in competition with Buyer or Atrium or their
respective Affiliates or to cease purchasing from Buyer or Atrium or any of
their respective Affiliates.
11.4 Rights and Remedies Upon Breach. If any Selling Party breaches, or
threatens to breach, any of the provisions of this Article 11, in addition to
any other rights Buyer or Atrium may have, including a claim for damages, Buyer
and Atrium shall have the right to have the provisions of this Article 11
specifically enforced by any court of competent jurisdiction, without
presentment of a bond (such requirement being expressly waived by the Selling
Parties), it being agreed that any breach or threatened breach of this Article
11 would cause irreparable harm to Buyer and Atrium in that money damages would
not provide an adequate remedy.
11.5 Further Assurances. Each of the Selling Parties acknowledges and
agrees that the restrictions contained in this Article 11 are reasonable and
valid in geographical and temporal scope and in all other respects. If any
provision of this Article 11 or the application hereof to any party or
circumstance shall be invalid or unenforceable to any extent, the remainder of
this Article 11 and the application of such provision to other parties or
circumstances shall not be affected thereby and shall be enforced to the maximum
extent permitted under applicable law.
11.6 No Applicability to BancBoston. Notwithstanding anything in this
Agreement to the contrary, none of the covenants or agreements set forth in this
45
Article 11 shall have any applicability whatsoever to BancBoston or its
Affiliates. For purposes of this Article 11, none of the Selling Parties (other
than BancBoston) shall be deemed to be an "Affiliate" of BancBoston.
ARTICLE 12. GENERAL PROVISIONS
12.1 Successors and Assigns. This Agreement shall be binding upon,
shall inure to the benefit of, and be enforceable by, the parties hereto and
their respective personal representatives, heirs, successors and assigns, except
that none of the parties shall have the right to assign any of its or his
obligations hereunder without the consent of the other party hereto.
Notwithstanding the foregoing, each of Buyer and Atrium may, without the Selling
Parties' consent, (i) assign or delegate any or all of its rights or obligations
under this Agreement to any Affiliate of Buyer and/or Atrium, so long as Buyer
and Atrium remain fully liable for their respective obligations hereunder and
(ii) pledge this Agreement and the rights and obligations hereunder to any of
its lenders as security for indebtedness owing or to be owed to such lenders.
12.2 Entire Agreement. This Agreement, including the Schedules and
Exhibits hereto, and that certain confidentiality agreement dated as of February
11, 2004, constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and may not be changed, modified or
amended, except by an instrument in writing signed by the party against whom any
such change, modification or amendment is asserted.
12.3 Commercially Reasonable Efforts. Each of the parties hereto agrees
to use its commercially reasonable efforts to cause all conditions precedent to
its obligations under this Agreement to be satisfied. Notwithstanding the
foregoing, the obligations to use commercially reasonable efforts shall not
include the obligation to pay monies to any party or the obligation to agree to
any financial arrangement that any party hereto considers to be not in its best
interest.
12.4 Binding Arbitration. Except as provided in Section 11.4 hereof,
any dispute or claim between the parties arising out of or related to this
Agreement or the Contemplated Transactions shall be fully and finally resolved
by binding arbitration in Dallas, Texas in accordance with the Commercial
Arbitration Rules and practices (the "Rules") of the American Arbitration
Association ("AAA") from time to time in force and effect. This agreement to
arbitrate shall be specifically enforceable and is the exclusive remedy for the
resolution of such disputes under this Agreement. There shall be a
three-arbitrator panel (the "Panel") which shall be chosen in accordance with
the Rules of the AAA. Only individuals who are (i) lawyers engaged full-time in
the practice of law and (ii) on the AAA register of arbitrators shall be
selected as an arbitrator. Judgment upon any award determined by the Panel shall
be entered in state or federal court located in Dallas, Texas. The parties
hereby submit to the exclusive jurisdiction of the courts so selected, to the
exclusion of any other court which might have had jurisdiction apart from this
Section 12.4, waive any defense of lack of in personam jurisdiction of such
courts and agree that service of process in any action before such courts may be
made by mailing it to the party to be served at the address provided for in
46
Section 12.6 hereof. The Panel shall require the non-prevailing party to pay the
Panel's full fees and expenses; provided, that in the event of a compromise
between the positions of the parties, such fees and expenses shall be pro rated
based on the relative success of the parties in prevailing on their positions.
Each party to this Agreement covenants not to institute any action or litigation
in any court, or commence any other proceeding, with respect to any matter under
this Agreement other than as provided for in Section 11.4 hereof.
12.5 Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Texas without regard to any
jurisdiction's principles of conflict of laws.
12.6 Notices. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given if delivered personally or by a
nationally recognized overnight delivery service, as follows:
If to Buyer or Atrium: Atrium Companies, Inc.
0000 Xxxx Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxx
Facsimile Number: (000) 000-0000
With a copy to: Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxxx, Esq.
Xxxx X. Xxxxx, Esq.
Facsimile Number: (000) 000-0000
If to any Selling Party: Xxxxx X. Xxxxx Marital Trust
c/o Xxxx X. Xxxxxxxxxx
The Xxxxxx Company
Suite 400, Market Center
000 Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Facsimile Number: (000) 000-0000
BancBoston Ventures, Inc.
000 Xxxxxxx Xxxxxx, 00/X
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx Xxxxxxx, Vice President
Facsimile Number: (000) 000-0000
47
Xxxxxx X. Xxxx
0000 Xxxxxxx Xxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Xxxxxx Xxxxx
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
With a copy to: Xxxxxx & Xxxxxx PLLC
1000 Volunteer Building
000 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Facsimile Number: (000) 000-0000
or to such other address as any pay shall have specified by notice in writing to
the other parties. All such notices, requests, demands and communications shall
be deemed to have been received on the date of delivery.
12.7 Press Releases and Communications. No press release or public
announcement related to this Agreement, the Related Agreements or the
Contemplated Transactions or, prior to the Closing, any other announcement or
communication to the employees, customers or suppliers of Seller shall be issued
or made by any of parties hereto or any of their respective officers, directors,
employees, advisors, agents or representatives, without the prior written
consent of the other parties. If any party is required by law (based on the
advice of counsel) to make an announcement, the other parties shall have the
right to review such press release or announcement prior to publication.
Following consummation of the Contemplated Transactions, Atrium shall have the
right to issue a press release announcing the consummation of the Contemplated
Transactions. Atrium shall provide Seller with a courtesy copy.
12.8 No Third Party Beneficiaries. Except as expressly stated herein,
nothing in this Agreement, expressed or implied, is intended to confer on any
Person other than the parties hereto or their respective personal
representatives, heirs, successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement or any of the
Related Agreements.
12.9 Guarantee. To induce Buyer and Atrium to enter into this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, for a period of five (5) years from
the Closing Date (the "Guarantee Period"), Xxxxx X. Xxxxx ("Xxxxx"), the sole
beneficiary of the Trust, personally and (subject to the proviso below in this
Section 12.9) unconditionally guarantees and promises the full and prompt
payment, as and when due, of any and all obligations and liabilities of the
Trust arising under Article 10 of this Agreement or arising in connection
therewith, and agrees to indemnify Buyer and Atrium on demand for any and all
reasonable fees and expenses (including, without limitation, reasonable
attorneys' fees) incurred by Buyer or Atrium in enforcing its rights under this
Section 12.9; provided,
48
however, that this personal guarantee shall be applicable only in such instance
in which the Trust has distributed principal of the Trust representing proceeds
received from the Contemplated Transactions ("Kinco Proceeds") to Xxxxx or a
member of her family or for their benefit and, as a result thereof, the Trust
does not have sufficient assets to satisfy one or more of its obligations or
liabilities arising under Article 10 of this Agreement. In addition, Xxxxx
agrees to cause the Trust's independent auditor to provide to Buyer, on a
semi-annual basis during the Guarantee Period, an auditor's certificate
specifying the Kinco Proceeds then held in the Trust.
12.10 Construction and Interpretation. This Agreement has been
negotiated by the undersigned and their respective legal counsel, and legal or
equitable principles that might require the construction of this Agreement, or
any provision of this Agreement, against the party drafting this Agreement will
not apply in any construction or interpretation of this Agreement.
12.11 Headings. The Section headings contained in this Agreement are
for reference purposes only and shall not affect the meaning or interpretation
of this Agreement. Throughout this Agreement, the masculine gender shall be
deemed to include the feminine and the neuter, the singular the plural, and the
plural the singular, all as the context may require.
12.12 Severability. If any provision of this Agreement shall be
declared by any court of competent jurisdiction to be illegal, void or
unenforceable, all other provisions of this Agreement shall not be affected and
shall remain in full force and effect.
12.13 [Intentionally omitted.]
12.14 Joint and Several Liability of Buyer and Atrium. Each of Buyer
and Atrium acknowledge and agree that each shall be jointly and severally liable
to the Selling Parties for any and all obligations of any of Buyer and Atrium
under this Agreement or any Related Agreement (other than the Employment
Agreements) or arising in connection herewith or therewith.
12.15 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be an original,
but all such counterparts shall constitute one and the same agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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EXECUTION COPY
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the day and year first above written.
KINCO, LTD.
BY: KINCO, INC., ITS GENERAL PARTNER
By:
--------------------------------------
Name: Xxxx X'Xxxxxxx
Title: Vice President
KINCO, INC.
By:
--------------------------------------
Name: Xxxx X'Xxxxxxx
Title: Vice President
XXXXX X. XXXXX MARITAL TRUST
By:
--------------------------------------
Name: Xxxx X. Xxxxxxxxxx, Xx.
Title: Trustee
BANCBOSTON VENTURES, INC.
By:
--------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
-----------------------------------------
XXXXXX X. XXXX
-----------------------------------------
XXXXXX XXXXX
SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT
EXECUTION COPY
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the day and year first above written.
ATRIUM WINDOWS AND DOORS OF FLORIDA, LLC
BY: ATRIUM SHUTTERS, INC., ITS SOLE MEMBER
By:
-----------------------------------------------
Xxxx X. Xxxx
Chairman, President and Chief Executive Officer
ATRIUM COMPANIES, INC.
By:
-----------------------------------------------
Xxxx X. Xxxx
Chairman, President and Chief Executive Officer
JOINDER
Xxxxx X. Xxxxx hereby joins in this Agreement for the sole purpose of
agreeing to be bound by the provisions of Section 12.9.
-----------------------------------------------
Xxxxx X. Xxxxx
SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT
EXECUTION COPY
SCHEDULES
Schedule 1.5 Assumed Agreements
Schedule 1.30 Excluded Assets
Schedule 1.34 Fixed Assets
Schedule 1.46 Leased Real Estate
Schedule 1.47 Manufacturing Facility Improvements and Attachments
Schedule 1.51 Owned Real Estate
Schedule 3.1 Limited Partners' Allocable Shares
Schedule 3.2 Approvals and Notices Required of Limited Partners
Schedule 4.1 Jurisdictions
Schedule 4.4 Approvals and Notices Required of Seller
Schedule 4.5(a) Audited Financial Statements
Schedule 4.5(b) Unaudited Financial Statements
Schedule 4.5(f) Indebtedness
Schedule 4.5(g) Financial Statement Differences
Schedule 4.6 Adverse Changes
Schedule 4.7 Title Exceptions
Schedule 4.11 Real Estate Exceptions
Schedule 4.13 Taxes
Schedule 4.14 Employment Agreements
Schedule 4.15 Employment Matters
Schedule 4.16 Employee Benefit Plans
Schedule 4.17 Non-Competition Agreements
Schedule 4.18 Licenses and Permits
Schedule 4.19 Legal Proceedings
Schedule 4.21 Compliance Exceptions
Schedule 4.22 Environmental Matters
Schedule 4.26 Intellectual Property Rights
Schedule 4.27 Insurance
Schedule 4.28 Affiliated Transactions
Schedule 4.29 Change of Control Provisions
Schedule 4.30 Brokerage Fees
Schedule 4.31 Customers, Suppliers and Distributors
Schedule 5.4 Approvals and Notices Required of Buyer
Schedule 6.5 Closing Condition Consents
Schedule 6.21 Releases and Payoffs
Schedule 6.26 Written Acknowledgments
EXECUTION COPY
EXHIBITS
Exhibit A Assignment and Assumption Agreement
Exhibit B Xxxx of Sale
Exhibit C Escrow Agreement
Exhibit D Opinion of Selling Parties' Counsel
Exhibit E Warrant
Exhibit F Buy/Sell Agreement
Exhibit G FIRPTA Certificate
Exhibit H Employment Agreements
Exhibit I Lease Agreement
Exhibit J Nondisturbance Agreement
Exhibit K Estimated Closing Balance Sheet
