ASSET PURCHASE AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of the
18th day of June, 2001, by and among XXXXXX XXXXXXXXXX
TECHNOLOGIES, INC., a Delaware corporation ("WGT") and GB
ACQUISITION CO., INC., a Delaware corporation (the
"Purchaser"); and XXXXXXX TECHNOLOGIES, INC., a Delaware
corporation ("Xxxxxxx") and XXXXXXX ELECTRONIC COMPONENTS
GROUP, INC., a California corporation ("Seller").
BACKGROUND STATEMENT
Seller desires to sell to Purchaser, and Purchaser
desires to purchase from Seller, certain of the assets of
Seller relating to the Business (as hereafter defined)
presently conducted in or in connection with Seller's
Sierra-KD Components Division ("Sierra") and to assume
certain liabilities of Seller associated with such Business,
upon and subject to the terms of this Agreement. Seller is
a wholly-owned subsidiary of Xxxxxxx. Purchaser is an
indirect wholly-owned subsidiary of WGT.
TERMS OF AGREEMENT
NOW, THEREFORE, in consideration of the mutual
covenants and promises contained in this Agreement, and for
other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, Purchaser, WGT,
Seller and Xxxxxxx agree as follows:
1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement,
the terms that are underlined or listed below shall have the
following meanings:
"Affiliate" means, as to any Person, any other
Person which directly or indirectly controls, or is under
common control with, or is controlled by, such Person. As
used in this definition "control" (including, with its
correlative meanings, "controlled by" and "under common
control with") shall mean possession, directly or
indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of
securities, ownership of partnership or other equity
interests, by contract or otherwise).
"Accounts Receivable" means all trade accounts
receivable of the Business and all debts or obligations due
from the customers of the Business.
"Agreement" means this Asset Purchase Agreement,
together with the Schedules and Exhibits attached to this
Agreement and the certificates and instruments to be
executed and delivered in connection with this Agreement.
"Assumed Contracts" means (i) the Contracts listed on
Schedule 4.13(a) except for any of such Contracts that are also
identified on Schedule 1.1(A) as being a Retained Liability and
(ii) the Minor Contracts.
"Assumed Liabilities" means the following liabilities of
the Seller and only such liabilities:
(1) the Assumed Operating Liabilities; and
(2) Seller's liabilities under the Assumed
Contracts which arise from and after the
Closing Date.
"Assumed Operating Liabilities" means the obligations and
liabilities of Seller as of the Effective Time of the specific
types listed on Schedule 1.1(B) which were incurred in the
ordinary course of operating the Business and which have not
yet been paid or discharged.
"Business" means the portion of the Seller's operations and
business operated as its Sierra Division which (i) manufactures,
designs and/or sells ceramic filter capacitors, (ii) integrates
such filters with wire feedthroughs and (iii) designs,
manufactures and markets ceramic capacitors for military,
aerospace and commercial applications (the "Product Lines")
whether such operations and business are conducted by Seller or
by any Affiliate of Seller.
"Business Records" means all originals of all data and
records of Seller and Xxxxxxx, on whatever media, located at
the Seller's facility in Carson City, Nevada which relate to
the operation of the Business or Purchased Assets including,
but not limited to, purchase and sale orders and invoices,
sales and sales promotional data, advertising materials,
marketing analyses, past and present price lists, past and
present customer service files, credit files, cost data,
written operating methods and procedures, operating records
and other information related to the Tangible Personal Property,
all information and documents pertaining to the Transferred
Intellectual Property, personnel records for the Transferred
Employees and other records pertaining to the Purchased Assets
or customers or suppliers of, or any other parties having
contracts or other business relationships with, the Seller
relating to the Business, but not including any Excluded Assets.
"Closing Date" means June 18, 2001, except that if all
of the conditions to Closing set forth in Article 7 of this
Agreement shall not have been satisfied or waived on or prior
to such date, "Closing Date" shall mean such business day after
the satisfaction or waiver of all such conditions to Closing
as the parties may agree upon.
"Code" means the Internal Revenue Code of 1986, as amended
to date.
"Contract" shall mean any contract, agreement, obligation,
promise, commitment or undertaking (whether written or oral,
express or implied) that is legally binding.
"Customer Lists" means all past and current customer and
potential customer lists of the Business.
"Employee Pension Benefit Plan" has the meaning set forth
in ERISA Section 3(2).
"Employee Welfare Benefit Plan" has the meaning set forth
in ERISA Section 3(1).
"Encumbrance" means with respect to any Person any mortgage,
deed of trust, pledge, lien, security interest, charge or other
security arrangement of any nature whatsoever, whether
voluntarily or involuntarily given, including any conditional
sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of,
security and any filed financing statement or other notice of
any of the foregoing (whether or not a lien or other encumbrance
is created or exists at the time of the filing).
"Environmental Claim" means any accusation in writing,
allegation in writing, notice of violation, claim in writing, suit,
action, demand in writing or written order by any Person for any damage
(including, but not limited to, personal injury, tangible or intangible
property damage, contribution, indemnity, indirect or consequential
damages, damage to the environment, environmental remediation costs,
nuisance, pollution, contamination or other adverse effects on the
environment or for fines, penalties or restrictions) resulting from or
relating to (i) an Environmental Condition at, in, by or from any of
the Facilities, (ii) the use, handling, transportation, storage,
treatment or disposal of any Hazardous Substance at or in connection
with the operation of any of the Facilities, or (iii) the violation, or
alleged violation, of any Environmental Laws relating to any operations
at or in connection with any of the Facilities.
"Environmental Condition" means the existence or threat of
any Release into the environment of, or exposure to, any Hazardous
Substance.
"Environmental Law" means any applicable federal, state,
local or foreign statutes, ordinances or other laws, any rules or
regulations promulgated thereunder, and any licenses, permits, orders,
judgments, notices or other requirements lawfully issued pursuant
thereto and applicable to any of the Facilities, or any operations
thereat (including, but not limited to, laws regulating the
identification, reporting, generation, manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
threatened release of, any pollutants, contaminants, wastes or any
other substances or materials) relating to pollution or protection of
the environment (including, but not limited to, ambient air, surface
water, groundwater, land surface or sub-surface strata, whether
outside, inside or under any structure). Without limiting the
generality of the foregoing, Environmental Laws shall include the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, the Toxic Substances Control Act, as amended, the
Hazardous Materials Transportation Act, as amended, the Resource
Conservation and Recovery Act, as amended, the Clean Water Act, as
amended, the Safe Drinking Water Act, as amended, the Clean Air Act, as
amended, the Atomic Energy Act of 1954, as amended, the Occupational
Safety and Health Act, as amended, and all analogous laws enacted,
promulgated or lawfully issued by the United States, any state of the
United States or any political subdivision of any such state.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Excluded Assets" means:
(1) cash, cash equivalents and marketable securities
(determined in accordance with GAAP) of Seller;
(2) all assets, tangible and intangible, of the Seller that
are not used solely in connection with the Business;
(3) all financial, accounting and bookkeeping books
and records, minute books of Seller that are not
Business Records;
(4) All assets related to any Employee Benefit Plan
of Seller or any Affiliate thereof;
(5) Any and all Tax credits and Tax refunds relating
to the operation of the Business prior to Closing
other than any such credits and refunds relating to
an Assumed Operating Liability;
(6) Any permits of Seller relating to the Business
that are not assignable to Purchaser;
(7) The Accounts Receivable;
(8) The name "XXXXXXX," alone or in any combination
with any other words; and
(9) All software or network connections which relate
to, or connect with, Seller's and Xxxxxxx'x
computer systems.
"Facilities" means (i) the Real Property and (ii) any real
property leased or rented by Seller relating to the Business now or at
any time since January 1, 1996.
"GAAP" means generally accepted accounting principles.
"Goodwill" means the goodwill of the Business.
"Governmental Authority" means any federal, state, local or
foreign government, or any political subdivision of any of the
foregoing, or any court, agency or other entity, body, organization or
group, exercising any executive, legislative, judicial, quasi-judicial,
regulatory or administrative function of government.
"Governmental Requirement" means any law, statute, rule,
regulation, code, plan, injunction, judgment, order, decree, ruling or
charge under any Governmental Authority.
"Hazardous Substances" means any pollutants, contaminants,
chemicals, wastes and any carcinogenic, ignitable, corrosive, reactive,
toxic or other hazardous substances or materials, whether solids,
liquids or gases (including, but not limited to, petroleum and its
derivatives, PCBs, asbestos, radioactive materials, waste waters,
sludges, slag and any other substance, material or waste) that are
subject to regulation or remediation under any Environmental Law.
"Indebtedness" shall mean indebtedness for borrowed money or
the equivalent or represented by notes, bonds or other similar
instruments or letters of credit (or reimbursement agreements in
respect thereof) or representing the balance deferred and unpaid of the
purchase price of any property (other than trade payables constituting
current liabilities and personal property leases), and including
without limitation capital lease obligations, including all accrued and
unpaid interest thereon, and applicable prepayment, breakage or other
premiums, fees or penalties and the costs of discharging such
indebtedness, all as determined in accordance with GAAP.
"Intellectual Property" means collectively, any of the
following types of intangible assets: (i) all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions, and re-examinations
thereof, (ii) all trademarks, service marks, trade dress, logos, trade
names, and corporate names, together with all translations,
adaptations, derivations, and combinations thereof and including all
goodwill associated therewith, and all applications, registrations, and
renewals in connection therewith, (iii) all copyrightable works, all
copyrights, and all applications, registrations and renewals in
connection therewith, (iv) all mask works and all applications,
registrations, and renewals in connection therewith, (v) all trade
secrets and confidential business information (including ideas,
research and development, know-how, formulas, compositions,
manufacturing and production processes and techniques, technical data,
designs, drawings, specifications, customer and supplier lists, pricing
and cost information, and business and marketing plans and proposals),
(vi) all computer software (including data and related documentation
and including software installed on hard disk drives), (vii) all copies
and tangible embodiments thereof (in whatever form or medium), and
(viii) all joint or partial interests in any of the foregoing.
"Inventory" means all raw material, work-in-process and
finished goods inventories of the Business, wherever located.
"Multiemployer Plan" has the meaning set forth in ERISA Section 3(37).
"Minor Contracts" means Contracts entered into in the
ordinary course of the Business which involve financial obligations of
Seller of less than $50,000 individually and $100,000 in the aggregate,
which have a duration of three months or less, or which are cancelable
on thirty (30) days notice without penalty to Seller.
"Other Current Assets" means all prepaid expenses, deposits
and other current assets of the Business.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permits" means all licenses, permits and other authorizations
required from any Governmental Authority or other Person in connection
with Seller's carrying on the Business as presently conducted.
"Permitted Encumbrance" means (i) liens for Taxes not yet due
and payable or for Taxes that the taxpayer is contesting in good faith
through appropriate proceedings or (ii) other liens arising in the
ordinary course of business (not including any mechanic's lien that
does not relate to an Assumed Operating Liability) that were not
incurred in connection with any Indebtedness and which will not
materially impair Purchaser's use of the Purchased Assets after the
Closing.
"Person" means any corporation, governmental authority,
individual, partnership, trust or other entity.
"Pre-Closing Date Tax Period" means any Tax period ending on
or before the Closing Date, and, with respect to a Tax period that
begins on or before the Closing and ends thereafter, the portion of
such Tax period ending on the Closing Date.
"Proceeding" means any action, order, writ, injunction,
judgment, decree, claim, suit, litigation, dispute, grievance, arbitral
action, investigation or other proceeding.
"Purchased Assets" means all right, title and interest of
Seller in and to all of the tangible and intangible assets of Seller
(other than the Excluded Assets) used in the Business including,
without limitation, the following:
(1) the Assumed Contracts;
(2) the Business Records;
(3) the Customer Lists;
(4) the Goodwill;
(5) the Sierra Intellectual Property;
(6) the Inventory;
(7) the Real Property;
(8) the Other Current Assets;
(9) the Permits (to the extent assignable); and
(10) the Tangible Personal Property.
"Real Property" means the real property and improvements
thereon located as described on Schedule 4.16 and whose street address
is 5150 and 0000 Xxxxxxxx Xxxxx, Xxxxxx Xxxx, Xxxxxx 00000 and owned by
Xxxxxxx.
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching,
migration, dumping or disposing into the environment.
"Reportable Event" shall have the meaning set forth in ERISA
Section 4043.
"Representative" means any officer, director, principal,
attorney, agent, financial advisor, lender or potential lender or
investor, employee or other representative of any Person.
"Seller's knowledge "or" to the knowledge of Seller" means
the knowledge of (a) the officers and directors of both Xxxxxxx and
Seller and (b) Xxxx Xxxxxxx, Xxx Xxxxxx and Xxxxxx X. Xxxxxxxxx,
including matters with respect to which such individuals should have
knowledge after a reasonable inquiry.
"Sierra Intellectual Property" means all of the Intellectual
Property listed or required to be listed on Schedule 4.8, including,
but not limited to, the Sierra-KD Components tradename and trademark.
"Sierra Material Adverse Event" means any occurrence or
action the effect of which is material and adverse to the Purchased
Assets or the business, assets, liabilities, results of operations or
prospects of the Business.
"Tangible Personal Property" means all tangible personal
property (other than Excluded Assets) used to conduct the Business
including, without limitation, all production and processing equipment,
warehouse equipment, computer hardware, furniture and fixtures,
transportation equipment, leasehold improvements, tooling, supplies and
other tangible personal property whether located at the Facilities or
elsewhere, together with any transferable manufacturer or vendor
warranties related thereto.
"Tax" means any federal, state, local or foreign income,
gross receipts, license, payroll, employment, excise, severance,
startup, occupation, premium, windfall profits, environmental
(including taxes under Code Section 59A), customs duties, capital
stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, intangible
property, sales, use, transfer, registration, value added, alternative
or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty or addition thereto, whether disputed
or not.
"Tax Return" means any return, declaration, statement,
report, claim for refund, or information return or statement relating
to Taxes, including any schedule or attachment thereto, and any
amendment thereof.
1.2 Other Defined Terms. The following terms shall
have meanings defined for such terms in the Sections set forth below:
Term Section
Accounting Firm 2.2(b)
Acquiring Person 8.10(d)
AOL-Type Retained Liabilities 9.3(b)(ii)
A/R Collections 8.9(a)
Assumption Agreement 2.4
Basket 9.3(b)
Certified Financial Statements 4.9(a)
Closing 3.1
Closing Date Assumed Operating
Liabilities 2.2(b)
Closing Date Statement 2.2(b)
COBRA 4.10(i)
Confidentiality Agreement 6.3
Confidential Information 8.10(b)
Effective Time 3.1
Employee Plans 4.10(a)
ERISA Affiliate 4.10(h)
Estimated AOL Statement 2.2(b)
Final Allocation 2.5
Indemnification Notice 9.5(a)
Indemnification Objection Notice 9.5(a)
Indemnified Person 9.2
Indemnifying Person 9.2
Key Employees 8.8
Losses 9.2
Non-Transferable Assets 3.5
Payables 8.4(a)
Pension Plans 4.10(a)
Permitted Exceptions 8.6
Permitted Indemnification Claim 9.5(a)
Physical Inventory 2.5
Preliminary Purchase Price 2.2(b)
Purchase Price 2.1
Purchaser's Pension Plans 8.8(c)
Related Person 4.29
Retained Accounts Receivable 8.10
Retained Liabilities 2.4
Sierra Background Statement
Survey and Surveys 8.6(b)
Title Policies 8.6(a)
Third Party Action 9.2
Transferred Employees 8.8
WARN Act 8.8
Welfare Plans 4.10(a)
1.3 Usage of Terms. Except where the context otherwise
requires, words importing the singular number shall include the plural
number and vice versa.
1.4 References to Articles, Sections, Exhibits and
Schedules. All references in this Agreement to Articles, Sections (and
other subdivisions), Exhibits and Schedules refer to the corresponding
Articles, Sections (and other subdivisions), Exhibits and Schedules of
or attached to this Agreement, unless the context expressly, or by
necessary implication otherwise requires.
2. PURCHASE AND SALE OF ASSETS
2.1 Transfer of Assets; Assumption of Assumed
Liabilities. Subject to the terms and conditions contained in this
Agreement:
(a) Seller and Xxxxxxx, as applicable, shall sell,
convey, transfer, assign, and deliver to Purchaser, and Purchaser shall
acquire from Seller and Xxxxxxx, as applicable, on the Closing Date the
Purchased Assets free and clear of any Encumbrances other than
Permitted Encumbrances.
(b) Purchaser shall assume the Assumed Liabilities on
the Closing Date and pay Seller the Purchase Price.
2.2 Purchase Price.
(a) The purchase price for the Purchased Assets
("Purchase Price") shall be Forty Nine Million Twenty-Six Thousand
Dollars ($49,026,000) minus an amount equal to the Assumed Operating
Liabilities, as determined in accordance with Sections 2.2(b), 2.2(c)
and 2.2(d). For purposes of determining the Purchase Price, the amount
used for Assumed Operating Liabilities shall be the amount of such
liabilities that is reflected on the balance sheet of the Business as
of the Closing Date, determined in accordance with GAAP consistently
applied.
(b) For purposes of consummating the Closing, Seller has
delivered to Purchaser prior to Closing a statement certified by its
chief financial officer setting forth an estimate of the Assumed
Operating Liabilities expected to be reflected on the Closing Date
Statement, a copy of which is attached hereto as Schedule 2.2(b) (the
"Estimated AOL Statement"). The parties shall use the amount of
Assumed Operating Liabilities set forth on the Estimated AOL Statement
to calculate a Purchase Price for purposes of Closing which shall be
subject to adjustment as herein provided (the "Preliminary Purchase
Price").
As of the Closing Date, Seller shall perform a full closing
of its books to derive a balance sheet for the Business and a
calculation of Assumed Operating Liabilities reflected in such balance
sheet in a form consistent with the form of the Estimated AOL Statement
("Closing Date Statement"). The Closing Date Statement shall include a
proposed calculation of the Closing Adjustment (as hereinafter
defined), if any, and a statement certified by the chief financial
officer of Xxxxxxx to the effect that all adjustments provided, or if
the type provided, for in the audit of the Seller as of December 31,
2000 have been appropriately reflected in the Closing Date Statement,
if applicable. No later than thirty (30) days after Closing, Seller
shall deliver to Purchaser its proposed final Closing Date Statement.
The amount of Assumed Operating Liabilities shown on such Closing Date
Statement, subject to final determination pursuant to this Section 2.2,
shall be the "Closing Date Assumed Operating Liabilities." To the
extent the amount of the Closing Date Assumed Operating Liabilities is
greater or less than estimate of the Assumed Operating Liabilities set
forth on the Estimated AOL Statement, such difference will result in a
dollar for dollar decrease or increase, respectively, in the
Preliminary Purchase Price (the "Closing Adjustment"). In the case of
an increase in the Preliminary Purchase Price then the Closing
Adjustment will be paid in cash by the Purchaser to Seller. In the
case of a decrease in the Preliminary Purchase Price then the Closing
Adjustment will be paid by Seller to the Purchaser. The payment of the
Closing Adjustment shall be made by wire transfer within ten (10) days
from the date on which the parties reach agreement on the Closing
Adjustment or it is finally determined as provided in Sections 2.2(c)
and (d).
(c) Seller shall make available to Purchaser and
Deloitte & Touche LLP such books and records relating to the Closing
Date Statement as Purchaser may request. If Purchaser disagrees with
Seller's determination of the proposed Closing Adjustment, Purchaser
shall so notify Seller in writing within seventy-five (75) days after
Purchaser's acknowledgment of receipt of the Closing Date Statement,
specifying in detail the basis of such disagreement; provided, however,
that if Purchaser fails to notify Seller of any disagreement within
such 75-day period, then the determination of the Closing Date Assumed
Operating Liabilities and the Closing Adjustment as reflected in the
Closing Date Statement shall be final, conclusive and binding upon the
Parties.
(d) Seller and Purchaser shall negotiate in good faith
to resolve any disagreement related to the Closing Adjustment. If any
such disagreement cannot be resolved by the parties within ten days
after Purchaser's receipt of Seller's notice of disagreement, then the
Parties shall jointly engage one of the "big five" accounting firms
which has no business dealings with Xxxxxxx or WGT (the "Accounting
Firm") to act as an arbitrator to resolve as expeditiously as possible
all points of disagreement with respect to the Closing Adjustment. All
determinations made by the Accounting Firm with respect to the Closing
Adjustment shall be final, conclusive and binding on the Parties
hereto. Each Party shall be responsible for its own fees and expenses,
as well as one-half of the fees and expenses of the Accounting Firm,
incurred in connection with the resolution of the dispute.
2.3 Payment of Purchase Price.
(a) The Preliminary Purchase Price shall be paid to
Seller at Closing by wire transfer of immediately
available funds.
(b) To the extent provided for in Section 2.2, any
amounts payable by Purchaser to Seller in addition to
the Preliminary Purchase Price, or by Seller to
Purchaser, as the case may be, as a Closing Adjustment
shall be paid in accordance with Section 2.2.
2.4 Assumed Liabilities; Retained Liabilities. It is expressly
understood and agreed that, other than the Assumed Liabilities,
Purchaser shall not assume, nor shall it be liable for, any liability,
Indebtedness, obligation, or Contract of Seller or any Affiliate
thereof, or any claim against any of the foregoing, of any kind or
nature whatsoever, at any time existing or asserted, whether or not
accrued, whether fixed, contingent or otherwise, whether known or
unknown, and whether or not recorded on the books and records of
Seller, all of which shall be retained by Seller and are hereafter
referred to as the "Retained Liabilities." Without limiting the
foregoing, Purchaser shall have no responsibility with respect to any
of the following liabilities of Seller (all of which shall be deemed to
be Retained Liabilities) whether or not disclosed on the Certified
Financial Statements:
(a) except for any Assumed Operating Liabilities, any
liability of Seller for (i) accrued salaries, wages, vacation pay,
bonuses and other employment benefits or commissions and related Taxes
or under any Employee Plan (except as expressly provided for in
Schedule 1.1(B) and Section 8.8) and/or (ii) severance payments or
other termination benefits payable to employees of Seller.
(b) any liability of Seller directly or indirectly as a
member of a group of employers under Section 414(b), (c) or (m) of the
Code, arising out of any employee benefit plans as defined in Section
3(3) ERISA, maintained by Seller or any Affiliate thereof including,
without limitation, liabilities attributable to a complete or partial
withdrawal from a multiemployer plan (as defined under Section (3)(37)
or Section 4001 of ERISA) or to the PBGC for benefit liabilities or
premiums due any liability resulting from failure to provide
continuation coverage under group health plan as required under Section
162(k) of the Code, or any liabilities arising out of any nonqualified
plan or plans covering any employees or former employees of Seller;
(c) any liability of Seller relating to the Excluded
Assets;
(d) any liability for any government-imposed fees or
charges arising out of doing business prior to Closing in any
jurisdiction where Seller is not qualified to do business as a foreign
corporation that would not have been incurred if such Seller had been
so qualified;
(e) any liability of Seller for any Indebtedness or to
any trade or non-trade creditor, customer, employee, financial
institution, government entity, trust company or other party, either
directly or by reason of any guaranty or other Contract other than any
Assumed Operating Liabilities;
(f) any liability of Seller arising after the Closing
Date, except to the extent specifically assumed by Purchaser pursuant
to this Agreement;
(g) any obligations and liabilities arising from the non-
compliance by Seller with any federal, state, local or foreign laws,
regulations, orders or administrative or judicial determinations
(including all Environment Laws), and any obligations and liabilities
arising from incidents, occurrences, suits, claims, actions, programs
and proceedings of any kind, voluntary or otherwise, relating to
alleged or actual pollution, contamination or harm of any kind to the
environment (including, without limitation, harm to any person or
property), attributable to or caused by, assigned to or otherwise
involving Seller, the Purchased Assets, or the Facilities, regardless
of when the underlying incident, occurrence, suit, claim, action,
program or proceeding occurred or is discovered or made, including
without limitation anything contained on Schedules 4.15 and Schedules
4.18(a)-4.18(d) hereof;
(h) any liability for workers compensation claims,
general liability claims, automobile liability claims or any other
negligent act or omission of Seller, whether related to the Business or
otherwise;
(i) any liability of Seller under any Contract except for
the Assumed Contracts; and
(j) any liability of Seller for any Tax except for any
Taxes included in the Assumed Liabilities.
On the Closing Date, Purchaser shall execute and deliver
to Seller an assignment and assumption agreement, which shall be
substantially in the form of Exhibit 2.4 ("Assumption Agreement") to
reflect Purchaser's assumption of the Assumed Liabilities. The
assumption by Purchaser of any Assumed Contract of Seller shall include
only payment and performance obligations thereunder which accrue or
arise after the Closing Date; in no event shall Purchaser assume or be
deemed to assume any liability of any nature (whether known, unknown,
absolute, accrued, contingent or otherwise) relating to the performance
under any such Assumed Contract which accrued prior to the Closing Date,
unless such liability is included within the Assumed Operating
Liabilities.
2.5 Allocation of Purchase Price. Not later than ninety
(90) days after the Closing Date, Purchaser shall prepare and deliver
to Seller a proposed allocation of the Purchase Price among the
Purchased Assets substantially in the form of Schedule 2.5 hereto.
Unless Seller objects to such allocation within ten (10) business days
after receipt by Seller of such proposed allocation, such allocation
shall be considered to be final. If Seller shall object to Purchaser's
proposed allocation, the Parties shall negotiate in good faith to reach
agreement upon a final allocation. Neither Seller nor Purchaser shall
take any position on any Tax Return or other filing with a governmental
authority that is inconsistent with the final allocation as determined
by the Parties (the "Final Allocation"). Purchaser and Seller shall
duly prepare and timely file such reports and information returns as
may be prescribed or appropriate under section 1060 of the Code and any
regulations thereunder and any corresponding provisions of applicable
state income tax laws to report the allocation of the Purchase Price in
accordance with such Final Allocation. Any adjustments to the Purchase
Price after the Closing shall be allocated among the Purchased Assets
in a manner consistent with the foregoing.
3. CLOSING
3.1 Closing. The consummation of the transactions
contemplated in this Agreement (the "Closing") shall be held at
9:00 a.m. local time on the Closing Date at the offices of Xxxxxxx Xxxx
LLP, Buffalo, New York or at such other place as shall be mutually
agreed upon. The Closing shall be effective at 11:59:59 p.m. (Nevada
Time) on the Closing Date (the "Effective Time").
3.2 Conveyances at Closing.
(a) Instruments and Possession. Upon the terms and
conditions contained in this Agreement, on the Closing Date Seller
shall deliver to Purchaser (i) one or more bills of sale or other
instruments conveying in the aggregate all of the Tangible Personal
Property, (ii) one or more assignments of the Assumed Contracts,
(iii) one or more assignments of the Sierra Intellectual Property in
recordable form, (iv) such deeds and other instruments as shall be
reasonably required to vest in Purchaser title in and to the Purchased
Assets (including but not limited to the Real Property) in accordance
with the provisions of this Agreement and (v) such other documents and
agreements as are contemplated by this Agreement.
(b) Form of Instruments. All of such instruments
shall be in form and substance, and shall be executed and delivered in
a manner, reasonably satisfactory to Purchaser and Seller, but shall
not diminish the status of title to the Purchased Assets required to be
delivered by Seller pursuant to this Agreement.
3.3 Assumptions at Closing.
(a) Instruments. Upon the terms and conditions
contained in this Agreement, on the Closing Date, Purchaser shall
deliver to Seller (i) the Assumption Agreement and such other
instruments of assumption evidencing Purchaser's assumption of the
Assumed Liabilities as shall be reasonably requested by Seller and
(ii) such other documents and agreements as are contemplated by this
Agreement.
(b) Form of Instruments. All such instruments shall
be in form and substance, and shall be executed and delivered in a
manner, reasonably satisfactory to Seller and Purchaser, but shall not
increase or decrease the liabilities and obligations required to be
assumed by Purchaser pursuant to this Agreement.
3.4 Certificates and Other Documents. WGT and Purchaser, and
Seller and Xxxxxxx, shall deliver the certificates and other items
provided for in Articles 7 and 8 of this Agreement.
3.5 Non-Transferable Assets. It is understood that certain
Purchased Assets (including, without limitation, manufacturers',
contractors' and other warranties and guaranties, and one or more
Assumed Contracts) may not be immediately transferable or assignable
to Purchaser, and Purchaser may in its sole discretion allow Seller to
retain certain of such assets after the Closing Date (the "Non-
Transferable Assets"), and this Agreement shall not constitute an
assignment of any such Non-Transferable Assets. In such event, (i)
Seller shall grant to Purchaser full use and benefit of its interest
in the Non-Transferable Assets to the extent permitted by the terms of
or applicable to such Non-Transferable Assets, it being the intent of
the parties that Purchaser shall have the benefit of the Non-
Transferable Assets as though it were the sole owner thereof, (ii) Seller
shall take all actions necessary to preserve the value of the Non-
Transferable Assets, (iii) Seller shall not transfer or assign the Non-
Transferable Assets to any Person other than Purchaser or Purchaser's
assigns, (iv) Seller shall transfer or assign the Non-Transferable
Assets to Purchaser at the earliest date, if any, on which such
transfer or assignment can be effected and (v) Purchaser shall be
responsible for obligations relating to such Non-Transferable Assets
as if they had been transferred or assigned to Purchaser in accordance
with the terms of this Agreement; provided however that all reasonable
costs and expenses incurred by Seller in carrying out the foregoing
clauses (i), (ii) and (iv) shall be paid or reimbursed by Purchaser
on demand.
3.6 Simultaneous Transactions. All transactions to be
effectuated at the Closing shall be deemed to have taken place
simultaneously, and no such transaction shall be deemed to have been
completed until all transactions are completed and all documents
delivered.
4. REPRESENTATIONS AND WARRANTIES OF SELLER AND XXXXXXX
Seller and Xxxxxxx, jointly and severally, represent and warrant
to Purchaser as follows:
4.1 Organization. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
State of California. Seller is duly qualified as a foreign corporation
to do business in all jurisdictions where the nature of the Business or
the character of the Purchased Assets would require such qualification.
Seller has all corporate power and authority to own its property
included in the Purchased Assets and to carry on the Business as now
conducted by it.
4.2 Corporate Action; Legal, Valid and Binding Agreement.
Seller and Xxxxxxx have all necessary power, and authority, and all
necessary corporate action of Seller and Xxxxxxx have been properly
taken, to authorize, execute and deliver this Agreement and the
instruments to be executed and delivered pursuant hereto and to
consummate the transactions contemplated hereby, and resolutions of the
Board of Directors of Seller and Xxxxxxx, respectively certified by the
Secretary or an Assistant Secretary of Seller and Xxxxxxx (as
applicable) and in form reasonably satisfactory to counsel for
Purchaser shall be delivered to Purchaser at the Closing. This
Agreement is the legal, valid and binding agreement of the Seller and
Xxxxxxx, enforceable in accordance with its terms.
4.3 No Violation; Consents and Approvals. Except as
disclosed on Schedule 4.3, neither the execution, delivery nor
performance of this Agreement by the Seller and Xxxxxxx or the
documents executed in connection herewith, nor the consummation of the
transactions contemplated hereby or thereby is prohibited by, is a
violation of, is in conflict with, constitutes a default under (whether
such default would occur with the passage of time, the giving of notice
or both) or requires Seller or Xxxxxxx to obtain any consent,
authorization or approval or registration under, or gives any person
the right to accelerate the performance of any obligation under (a) any
term or provision of the articles of incorporation or organization or
the by-laws of the Seller, (b) any agreement or commitment to which
Seller or Xxxxxxx is bound, (c) any Contract relating to any bank or
other institutional loans or indebtedness of Seller or Xxxxxxx, or (d)
any judgment, or Governmental Requirement, or any statute or law
applicable to either of Seller or Xxxxxxx. Except for any filings set
forth on Schedule 4.3, no consent, approval or authorization of, or
declaration, filing or registration with, any Person is required to be
made or obtained by Seller or Xxxxxxx in connection with the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated by this Agreement.
4.4 Corporate Records. Except as set forth in Schedule
4.4, none of the records, systems, controls, data or information which
are material to the operation of the Business are recorded, stored,
maintained, operated or otherwise wholly or partly dependent upon or
held by any means (including any electronic, mechanical or photographic
process, whether or not computerized) which (including all means of
access thereto and therefrom) are not under the exclusive ownership and
direct control of Seller. Seller has delivered or made available to
Purchaser or Purchaser's counsel, for review, true and complete copies
of (a) the articles of incorporation or organization and all amendments
thereto for Seller, and (b) the by-laws and all amendments thereto for
Seller. The foregoing articles of incorporation or organization have
not been amended, except and to the extent provided in any articles of
amendment heretofore delivered to Purchaser or Purchaser's counsel.
4.5 Taxes; Tax Returns. As of the Closing Date:
(a) In connection with, or relating to, Seller's
operation of the Business, and except as set forth in Schedule 4.5(a):
(i) all Tax Returns required to be filed with
any Governmental Authority with respect to any Pre-Closing Date Tax
Period by or on behalf of Seller, have been or will be, to the extent
required to be filed on or before the date hereof, filed when due in
accordance with all applicable Governmental Requirements;
(ii) all such Tax Returns are, or will be at
the time of filing, true, complete, and accurate in all material
respects;
(iii) all material Taxes shown as due and
payable on the Tax Returns that have been filed have been timely paid,
or withheld and remitted to the appropriate Governmental Authority;
(iv) the charges, accruals and reserves for
Taxes with respect to Seller for any Pre-Closing Date Tax Period
(including any Pre-Closing Date Tax Period for which no Tax Return has
yet been filed) reflected on the books of Seller (excluding any
provision for deferred income taxes) are adequate to cover such Taxes
in all material respects;
(v) Seller is not delinquent in the payment
of any material Tax;
(vi) Seller has not granted any extension or
waiver of the statute of limitations period applicable to any Tax
Return, which period (after giving effect to such extension or waiver)
has not yet expired;
(vii) there is no claim, audit, action, suit,
proceeding or investigation now pending or, to Seller's knowledge,
threatened against or with respect to Seller in respect of any Tax or
Tax Return;
(viii) all information set forth in the Certified
Financial Statements relating to any Tax asset or any Tax matters is
true and complete in all material respects;
(ix) Seller has not entered into any agreement
or arrangement with any Governmental Authority with regard to the Tax
liability of Seller;
(x) Seller has not participated in orcooperated
with an international boycott within the meaning of Section 999 of the
Code nor has been requested to do so in connection with any transaction
or proposed transaction; and
(xi) Seller has withheld and paid all material
Taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee, independent contractor, creditor,
shareholder, or other third party.
(b) Schedule 4.5(b) contains a list of all jurisdictions
(whether foreign or domestic) to which any Tax is paid by Seller in
connection with, or relating to, the Business.
4.6 Real Property.
(a) Schedule 4.6 contains a true, complete and correct
description of the Real Property. Title to all of the Real Property is
in Xxxxxxx.
(b) Except as set forth on Schedule 4.6, (i) Seller
enjoys peaceful and undisturbed possession of the Real Property, (ii)
the Real Property is not subject to any commitment for sale or use by
any Person other than Seller, (iii) the Real Property is not subject to
any Encumbrance which in any material respect interferes with or
impairs the value, transferability or present and continued use thereof
in the usual and normal conduct of the Business, (iv) no labor has been
performed or material furnished for the Real Property for which a
mechanic's or materialman's lien or liens, or any other lien, has been
or could be claimed by any Person except with respect and relating to
any Assumed Operating Liability, (v) the Real Property is in material
compliance with all Governmental Requirements (including without
limitation all zoning, subdivision and other applicable land use
ordinances and by-laws), and all existing covenants, conditions,
restrictions and easements, and the current use of the Real Property
does not constitute a non-conforming use under the applicable zoning
ordinances and (vi) no default or breach exists with respect to, and
Seller has not received any notice of any default or breach under, any
Encumbrance affecting the Real Property. There are no existing, or to
the knowledge of Seller, contemplated or threatened, general or special
assessments affecting the Real Property or any portion thereof. Seller
has not received notice of, nor does Seller have any knowledge of, any
pending or threatened proceeding (including without limitation
condemnation or eminent domain proceeding) before any Governmental
Authority which relates to the ownership, maintenance, use or operation
of the Real Property, nor does Seller know of any fact which might give
rise to any such proceeding or any type of existing or intended use of
any real property adjacent to the Real Property which might materially
adversely affect the use of the Real Property.
(c) None of the Real Property is located within any area
determined to be flood-prone under the Federal Flood Protection Act of
1973, or any comparable state or local Governmental Requirement.
Seller has not received any notice from any insurance company of any
defects or inadequacies in the Real Property or any part thereof which
would materially and adversely affect the insurability of the Real
Property or the premiums for the insurance thereof, and no notice has
been given by any insurance company which has issued a policy with
respect to any portion of the Real Property or by any board of fire
underwriters (or other body exercising similar functions) requesting
the performance of any repairs, alterations or other work which has not
been complied with.
(d) To the knowledge of Seller, all water, sewer, gas,
electric, telephone and drainage facilities and all other utilities
servicing the Real Property are installed to the improvements situated
on the Real Property, are connected pursuant to valid permits, enter
the Real Property through adjoining public streets, are adequate for
the present operation of the Business and otherwise are in compliance
in all material respects with all Governmental Requirements applicable
thereto. Access to and from the Real Property is via public streets,
which streets are sufficient to ensure adequate vehicular and
pedestrian access for the present operation of the Business.
(e) Except as set forth on Schedule 4.6(e), (i) the
buildings and improvements at the Real Property (including, without
limitation, the heating, air conditioning, mechanical, electrical and
other systems used in connection therewith) are in a good state of
repair (ordinary wear and tear excepted), and have been well
maintained, and (ii) there are no repairs or replacements exceeding
$50,000 in the aggregate for the Real Property or $10,000 for any
single repair or replacement which are currently contemplated by Seller
or which, to the knowledge of Seller, should be made in order to
maintain said buildings and improvements in a reasonable state of
repair.
4.7 Tangible Personal Property.
(a) Seller has delivered to Purchaser (i) a depreciation
list of each item of Tangible Personal Property owned by Seller and
used in the Business having a historical cost in excess of $50,000, and
(ii) a list of each item of Tangible Personal Property leased by Seller
and used in the Business having an annual rental in excess of $10,000.
Except as set forth in Schedule 4.7, there is no tangible personal
property used in the operation of the Business other than the Tangible
Personal Property. Except with respect to any Tangible Personal
Property located at any of the Facilities other than the Real Property
as set forth on Schedule 4.7, all of the Tangible Personal Property is
located at the Real Property. Except as set forth in Schedule 4.7, to
the knowledge of Seller, the Tangible Personal Property is, taken as a
whole, in reasonable working order and adequate for its intended use,
ordinary wear and tear and normal repairs and replacements excepted.
Except as disclosed on Schedule 4.7, there are no repairs or
replacements exceeding $50,000 in the aggregate for all Tangible
Personal Property or $10,000 for any single item of Tangible Personal
Property which are currently contemplated by Seller.
(b) Except as set forth on Schedule 4.7, the Tangible
Personal Property owned by Seller is free and clear of any Encumbrances
(other than Permitted Encumbrances).
4.8 Intellectual Property.
(a) Schedule 4.8 identifies all Intellectual Property
which is currently used in the Business, which was used in the Business
at any time in the last five years or which Seller plans to use in
connection with the Business in the next 18 months, including but not
limited to, each patent or registration which has been issued to Seller
or Xxxxxxx with respect to any of the Intellectual Property, and
identifies each pending patent application or application for
registration which Seller or Xxxxxxx has made with respect to any of
the Intellectual Property. Schedule 4.8 also identifies each license
or other agreement pursuant to which Seller (including, but not limited
to, any written or implied license from Xxxxxxx) has granted to any
third party with respect to any of the Intellectual Property. Seller
has delivered to Purchaser correct and complete copies of all such
patents, registrations, applications, licenses and agreements (as
amended to date) and has made available to Purchaser correct and
complete copies of all other written documentation evidencing ownership
and prosecution (if applicable) of each such item. Except as set forth
on Schedule 4.8, with respect to each item of Intellectual Property
identified or required to be identified on Schedule 4.8: (i) Seller
possesses all right, title and interest in and to the item, free and
clear of any Encumbrances or licenses, (ii) the item is not subject to
any outstanding injunction, judgment, order, decree, ruling, or charge,
(iii) no proceeding is pending or, to the knowledge of Seller,
threatened which challenges the legality, validity, enforceability, use
or ownership of the item and (iv) other than routine indemnities given
to distributors, sales representatives, dealers and customers, neither
the Seller nor Xxxxxxx has any current obligations to indemnify any
Person for or against any interference, infringement, misappropriation,
or other conflict with respect to the item.
(b) Except as set forth on Schedule 4.8, (i) to the
knowledge of Seller, each item of Intellectual Property owned or used
by Seller immediately prior to the Closing Date will be owned or
available for use by Purchaser on substantially similar terms and
conditions immediately subsequent to the Closing Date and (ii) Seller
and Xxxxxxx have taken reasonable commercial actions to maintain and
protect each item of Intellectual Property material to the Business.
(c) Except as set forth on Schedule 4.8, to the
knowledge of Seller (i) neither the Seller nor Xxxxxxx have during the
last five (5) years in connection with the Business interfered with,
infringed upon, misappropriated or otherwise come into conflict with
any Intellectual Property rights of third parties, and neither Seller
nor Xxxxxxx have received any charge, complaint, claim, demand or
notice alleging any such interference, infringement, misappropriation
or violation (including any claim that Seller or Xxxxxxx must license
or refrain from using any Intellectual Property rights of any third
party) which has not been resolved and (ii) no third party has
interfered with, infringed upon, misappropriated or otherwise come
into conflict with any of the Intellectual Property.
(d) Schedule 4.8 specifically identifies each item of
Intellectual Property that any third party owns and that Seller or
Xxxxxxx uses in connection with the Business pursuant to license,
sublicense or agreement. Seller or Xxxxxxx has delivered to Purchaser
correct and complete copies of all such licenses, sublicenses and other
agreements (as amended to date). Except as set forth on Schedule 4.8,
with respect to each item of Intellectual Property required to be
identified in Schedule 4.8: (i) the license, sublicense or other
agreement covering the item is enforceable, (ii) to the knowledge of
Seller, following the Closing, the license, sublicense or other
agreement will continue to be enforceable on substantially similar
terms and conditions, (iii) neither Seller nor Xxxxxxx, to the
knowledge of Seller, nor any other party to the license, sublicense or
other agreement is in material breach or default thereof, and no event
has occurred which, with notice or lapse of time, would constitute a
breach or default or permit early termination, modification or
acceleration thereunder, (iv) to the knowledge of Seller, no other
party to the license, sublicense or other agreement has repudiated any
provision thereof, (v) the underlying item of Intellectual Property is
not subject to any outstanding injunction, judgment, order, decree,
ruling or charge, (vi) no proceeding is pending or, to the knowledge of
Seller, threatened which challenges the legality, validity or
enforceability of the underlying item of Intellectual Property and
(vii) neither Seller nor Xxxxxxx have granted any sublicense or similar
right with respect to the license, sublicense or other agreement.
(e) Except as set forth on Schedule 4.8, Purchaser's
use of any Intellectual Property will not interfere with, infringe upon,
misappropriate, or otherwise come into conflict with, any intangible
property rights of third parties or Xxxxxxx as a result of the
continued operation of the Business as presently conducted and as
presently proposed to be conducted.
4.9 Financial Information.
(a) Seller has delivered to Purchaser an internally
prepared unaudited balance sheet and unaudited statements of net income
for the Business for the four (4) months ending April 29, 2001,
certified by the chief financial officer of Seller (the "Certified
Financial Statements"). Except as set forth on Schedule 4.9(a), the
Certified Financial Statements (i) have been prepared on a going-
concern basis in accordance with the books and records of Seller on a
basis consistent with Seller's historical practices, (ii) are complete
and correct in all material respects as of April 29, 2001 and (iii)
except as indicated therein, reflect all claims against and all debts
and liabilities of the Business and its operations, fixed or
contingent, as at the respective dates thereof which would be required
to be reflected or disclosed in financial statements prepared in
accordance with GAAP, and the statements of income, included therein
fairly present in all material respects the results of operations of
the Business for the periods indicated.
(b) Except as set forth on Schedule 4.9(b), all
Accounts Receivable recorded in the Certified Financial Statements as
being due to Seller as of April 29, 2001 were actually made in the
ordinary course of business and will be good and collectible in full in
the ordinary course of business, net of reserves and allowances
provided in the Certified Financial Statements. To Seller's knowledge,
none of such Accounts Receivable are subject to any defense,
counterclaim or set-off. Seller has delivered to Purchaser a complete
and accurate list of all Accounts Receivable of the Business as of
April 29, 2001 a copy of which is attached hereto as part of Schedule
4.9.
(c) Except as set forth on Schedule 4.9(c), (i) the
amount of Inventory shown on the Certified Financial Statements is true
and correct in all material respects as of the dates indicated therein;
(ii) Seller has good and marketable title to all of the Inventory free
and clear of all Encumbrances; (iii) none of the Inventory is on
consignment; and (iv) the Inventory net of any reserves set forth on
the Certified Financial Statements for excess and obsolete inventory,
consists in all material respects of inventories of good and
merchantable quality and of the kind and quality regularly and
currently used in the Business.
4.10 Employee Benefit Plans.
(a) Schedule 4.10 sets forth a list identifying each
Employee Pension Benefit Plan (the "Pension Plans") and a list
identifying each "Employee Welfare Benefit Plan" (the "Welfare Plans")
that, in either case, are maintained, administered or contributed to by
Seller and/or Xxxxxxx in connection with Sierra or the Business, or
that cover any employee or former employee of Seller and/or Xxxxxxx in
connection with Sierra or the Business. Collectively, the Pension
Plans and the Welfare Plans hereafter are referred to as the "Employee
Plans."
(b) Seller and/or Xxxxxxx has delivered or has caused
to be delivered to Purchaser either (i) true and complete copies of the
Employee Plans or (ii) summaries of the terms of and benefits under the
Employee Plans. There has been no amendment to, written interpretation
or announcement (whether or not written) by Seller and/or Xxxxxxx in
connection with Sierra or the Business relating to, or change in
employee participation or coverage under, any Employee Plan that would
increase materially the expense of maintaining the Employee Plan above
the level of expense incurred with respect to the Employee Plan for the
most recent plan year.
(c) Each Employee Plan has been maintained in
compliance with its terms and, in all material respects, the
requirements prescribed by any and all statutes, orders, rules and
regulations, including but not limited to, ERISA and the Code, that
apply to the Employee Plan.
(d) Each Pension Plan is "qualified" within the meaning
of Code Section 401(a), and has been qualified during the period from
the date of its adoption to the date of this Agreement, and each trust
created thereunder is tax-exempt under Code Section 501(a). Seller
and/or Xxxxxxx has delivered, or caused to be delivered, to Purchaser
the latest determination letters of the Internal Revenue Service
relating to each Pension Plan.
(e) Except as disclosed on Schedule 4.10, there are
no pending or, to the knowledge of Seller and/or Xxxxxxx, threatened
(i) claims, suits or other proceedings by any employees, former
employees or plan participants or the beneficiaries, spouses or
representatives of any of them, other than ordinary and usual claims
for benefits by participants or beneficiaries, or (ii) suits,
investigations or other proceedings by any Governmental Authority, of
or against any Employee Plan, the assets held thereunder, the trustee
of any such assets, or Seller and/or Xxxxxxx relating to any of the
Employee Plans. If any of the actions described in this subsection
are initiated prior to the Closing Date, Seller and/or Xxxxxxx will
notify Purchaser of such action prior to the date of Closing.
(f) Seller and/or Xxxxxxx have not engaged (i) in any
transaction or acted or failed to act in a manner that violates the
fiduciary requirements of ERISA Section 404, or (ii) in any "prohibited
transaction" within the meaning of ERISA Section 406(a) or 406(b), or
of Code Section 4975(c), with respect to any Employee Plans, and will
not so engage, act or fail to act prior to the date of Closing.
Furthermore, to the knowledge of Seller and/or Xxxxxxx, no other "party
in interest," as defined in ERISA Section 3(14), or "disqualified
person," as defined in Code Section 4975(e)(2), has engaged in any such
"prohibited transaction."
(g) No Employee Plan provides benefits, including
without limitation, any other post-employment benefit, salary
continuation, termination, death, disability, or health or medical
benefits (whether or not insured), life insurance or similar benefit
with respect to current or former employees (or their spouses or
dependents) of Seller and/or Xxxxxxx beyond their retirement or other
termination of service other than (i) coverage mandated by applicable
law, (ii) death, disability or retirement benefits under any Pension
Plan, (iii) deferred compensation benefits accrued as liabilities on
the financial statements of Seller and/or Xxxxxxx, (iv) benefits, the
full cost of which is borne by the current or former employee (or his
or her beneficiary), (v) Seller's severance pay policy, or (vi) post-
employment payments under Seller's insurance policies relating to
events during employment by Seller.
(h) Neither Seller nor Xxxxxxx nor any trade or
business, whether or not incorporated, that is deemed to be under
common control or affiliated with Seller and/or Xxxxxxx within the
meaning of ERISA Section 4001 or Code Sections 414(b), (c), (m) or (o)
(an "ERISA Affiliate") has ever maintained, adopted or established,
contributed or been required to contribute to, or otherwise
participated or been required to participate in, nor will they become
obligated to do so through the Closing Date, any defined benefit
pension plan or "multiemployer plan" (as defined in ERISA Section
3(37)). No amount is due from, or owed by, Seller and/or Xxxxxxx or
any ERISA Affiliate on account of a "multiemployer plan" (as defined
in ERISA Section 3(37)) or on account of any withdrawal therefrom.
(i) Each of Xxxxxxx and Seller, and/or its agents who
administer any Employee Plan that is a group health plan has complied,
and will continue to comply with, the requirements of Part 6 of
Subtitle B of Title I of ERISA and Code Section 4980B, and all
applicable regulations thereunder ("COBRA") with respect to each
Employee Plan that is subject to the requirements of COBRA, including,
but limited to the notification and written notice requirements. Each
employee Plan that is a group health plan, within the meaning of Code
Section 9832(a), has complied with and satisfied the applicable
requirements of Code Section 9801 and 9802.
4.11 Labor Matters.
(a) Schedule 4.11(a) identifies each current employee
of the Seller who is employed in connection with the Business and, for
each such current employee who is employed in connection with the
Business having a current annual compensation (base salary plus bonus),
in excess of $60,000: his or her name, position or job title, his or
her base compensation and bonus compensation earned in calendar year
2000, and his or her current base compensation. Except as set forth on
Schedule 4.11(a), to the knowledge of Seller, each employee of the
Sierra Division of the Seller is an employee at will. Except as set
forth on Schedule 4.11(a), no such employee has a Contract with Seller
relating to his or her employment which commits Seller to continue the
employment of such employee for a specified period of time. With
respect to the Business, except as set forth on Schedule 4.11(a):
(i) Seller does not have any obligations under any written or oral
labor agreement, collective bargaining agreement or other Contract with
any labor organization or employee group, (ii) Seller is not currently
engaged in any unfair labor practice and there is no unfair labor
practice charge or other employee-related or employment-related
complaint against Seller pending or, to the knowledge of Seller,
threatened before any Governmental Authority, (iii) there is currently
no labor strike, labor disturbance, slowdown, work stoppage or other
material labor dispute or arbitration pending or, to the knowledge of
Seller, threatened against Seller and no material grievance currently
being asserted, (iv) Seller has not experienced a labor strike, labor
disturbance, slowdown, work stoppage or other material labor dispute at
any time during the three years immediately preceding the date of this
Agreement and (v) there is, to the knowledge of Seller, no
organizational campaign being conducted or contemplated and there is no
pending or, to the knowledge of Seller, threatened petition before any
Governmental Authority or other dispute as to the representation of any
employees of Seller. Except as set forth on Schedule 4.11(a), to the
knowledge of Seller, Seller has complied in all material respects with,
and is currently in compliance in all material respects with, all
applicable Governmental Requirements relating to its employees and
consultants (including, without limitation, any Governmental
Requirement of the Occupational Safety and Health Administration), and
Seller has not received within the past three (3) years with respect to
the Business any written notice of failure to comply with any such
Governmental Requirement which has not been rectified.
(b) Except as set forth on Schedule 4.11(b), Seller
has on file a valid Form I-9 for each employee hired on or after
November 7, 1986 and continuously employed after November 6, 1986 or
the applicable date of hire. Except as set forth on Schedule 4.11(b),
no employee requires an amended petition filing with U.S. Immigration
or any other Governmental Authority to accept employment with
Purchaser. Except as set forth on Schedule 4.11(b), to the knowledge
of Seller, all employees of Sierra employed in the U.S. are (i) United
States citizens, or lawful permanent residents of the United States,
(ii) aliens whose right to work in the United States is unrestricted,
(iii) aliens who have valid, unexpired work authorization issued by the
Attorney General of the United States (Immigration and Naturalization
Service) or (iv) aliens who have been continually employed by Seller
since November 6, 1986 or the applicable date of hire. Except as set
forth on Schedule 4.11(b), Seller has not been with respect to the
Business the subject of an immigration compliance or employment visit
from, nor has Seller been assessed any fine or penalty by, or been the
subject of any order or directive of, the United States Department of
Labor or the Attorney General of the United States (Immigration and
Naturalization Service).
(c) Except as set forth on Schedule 4.11(c), Seller
has not terminated any employee of the Business during the 90 day
period prior to the date hereof (other than voluntary resignations or
terminations for cause).
4.12 Insurance. Schedule 4.12 contains a complete and
accurate list of all current policies or binders of insurance (showing
as to each policy or binder the carrier, policy number, coverage
limits, expiration dates, deductibles and a general description of the
type of coverage provided) maintained by Seller and relating to the
Business, its personnel and/or the Purchased Assets. Except as set
forth on Schedule 4.12, all of the Insurance is "occurrence" based
insurance. The insurance is in full force and effect and sufficient
for compliance in all material respects with all requirements of
applicable law and of all Contracts to which Seller is a party. Seller
is not in material default under any of the insurance.
4.13 Contracts.
(a) Schedule 4.13(a) contains a true and correct list
or description of all Contracts to which Seller or Xxxxxxx is a party
that are material to the Business including, but not limited to:
(i) any lease (a) for real property or (b)
for personal property providing for annual rentals for such personal
property lease of $10,000 or more, or aggregate remaining payments
under such personal property lease of $100,000 or more;
(ii) any Contract for the purchase of
materials, software, supplies, goods, services, equipment or other
assets providing for either individual payments of $10,000 or more or
aggregate annual payments of $100,000 or more;
(iii) any sales, distribution or other similar
Contract providing for the sale of materials, supplies, goods,
services, equipment or other assets that provides for either individual
payments of $10,000 or more or aggregate annual payments of $100,000 or
more;
(iv) any partnership, joint venture or other
similar agreement or arrangement;
(v) any Contract relating to the acquisition or
disposition of any business (whether by merger, sale of stock, sale of
assets or otherwise);
(vi) any Contract relating to indebtedness for
borrowed money or the deferred purchase price of property (in either
case, whether incurred, assumed, guaranteed or secured by any asset);
(vii) any option, license (including any
software license other than commercial-off-the-shelf licenses),
franchise or similar Contract;
(viii) any agency, dealer, sales representative,
marketing or other similar Contract;
(ix) any Contract that limits the freedom of
Seller to compete in any line of business or with any Person or in any
area after the Closing Date;
(x) any Contract containing any right of first
refusal or similar right;
(xi) any Contract pursuant to which Seller
has hired or retained a consultant providing for aggregate annual
payments of $10,000 or more;
(xii) any Contract entered into within the past
year between Seller and/or Xxxxxxx and a third Person pursuant to which
such Person is subject to confidentiality or non-disclosure obligations
in connection with the divestiture of the Business; or
(xiii) any Contract under which Seller agrees to
indemnify any Person other than in the ordinary course of business.
(b) Each Contract disclosed in Schedule 4.13(a) or
required to be disclosed in Schedule 4.13(a) is a valid and binding
agreement of Seller, and is in full force and effect, and neither
Seller nor, to Seller's knowledge, any other party thereto is in
default or breach in any material respect under the terms of any such
Contract, and, to Seller's knowledge, no event or circumstance has
occurred that, with notice or lapse of time or both, would constitute
any event of default thereunder.
4.14 Absence of Certain Payments. To the knowledge of
Seller, neither Seller, nor any of its Representatives, nor any other
Person acting on behalf of any of them, have with respect to the
Business (a) engaged in any activity prohibited by the United States
Foreign Corrupt Practices Act of 1977 or any other similar law,
regulation or decree, directive or order of any Governmental Authority
or (ii) without limiting the generality of the preceding clause
(i), used any corporate or other funds for unlawful contributions,
payments, gifts or entertainment, or made any unlawful expenditures
relating to political activity to officials of any Governmental
Authority.
4.15 Litigation. Except as set forth on Schedule 4.15,
there is no Proceeding pending or, to the knowledge of Seller,
threatened which relates to the Business or the Purchased Assets
(including but not limited to any discrimination or sexual harassment
claim). Schedule 4.15 lists all Proceedings against the Seller (i)
which are pending or, to Seller's knowledge, threatened or (ii) which
were pending at any time, since January 1, 1996. There is no
Proceeding pending or, to Seller's knowledge, threatened which
questions or challenges the validity of this Agreement or any of the
transactions contemplated by this Agreement or otherwise seeks to
prevent or have the effect of preventing the consummation of the
transactions contemplated hereby.
4.16 Compliance with Laws. Except as set forth on
Schedule 4.16, Seller is in material compliance with all applicable
statutes, laws and Governmental Requirements pertaining to the Business
and the Purchased Assets, and Seller has not received notice of any
violation of any such statutes, laws or Governmental Requirements,
including, without limiting the generality of the foregoing, any notice
from any Governmental Authority having jurisdiction over Seller as to
any violation of any building, fire, environmental, health, immigration
or other Governmental Requirement pertaining to the Business or the
Purchased Assets.
4.17 Permits, Licenses and Authorizations. Schedule 4.17(a)
attached hereto is a complete list of all material permits, approvals,
consents, licenses, franchises and other governmental authorizations
held by Seller and required for the conduct of the Business. Except
as set forth on Schedule 4.17(b), Seller possesses all material
permits, approvals, consents, licenses, franchises and other
governmental authorizations necessary for the use and occupancy of the
Business.
4.18 Environmental Matters.
(a Except as set forth on Schedule 4.18(a), Seller has
materially complied with and is currently in material compliance with
all Environmental Laws, and has not been charged with, has not received
any notice of, and is not under investigation for the failure to comply
with, any Environmental Law pertaining to the Business or the Purchased
Assets, or the operation, conduct or occupancy thereof.
(b Except as set forth in Schedule 4.18(b), Seller has
not previously disposed of any Hazardous Substance at or from the
Facilities, regardless of whether at the time of disposal, the act of
disposal was lawful, and, to the knowledge of Seller, no Environmental
Condition exists relating to the Business or Facilities for which
Seller or their predecessors is or may be liable.
(c Each transporter and disposal facility that has
transported or disposed of any Hazardous Substance from the Facilities
on behalf of Seller, if any, (i) is listed on Schedule 4.18(c) attached
hereto, (ii) was properly licensed at the time of such transportation
or disposal and (iii) all such Hazardous Substances were properly
transported or disposed of at a facility with authorization to dispose
of such materials. All manifests or equivalent documents required by
any and all of the statutes, laws and Governmental Requirements of any
or all Governmental Authorities to be completed and retained by Seller
in connection with each such instance of transportation were so
completed and retained, copies of which will be made available to
Purchaser within a reasonable period of time prior to the Closing.
(d Neither the Real Property nor any portion thereof is
listed, or has ever been listed, on the National Priorities List
("NPL") or on any federal or Nevada registry, list or report of
inactive hazardous waste disposal sites. Seller has no above ground or
underground storage tanks located at the Real Property except as
disclosed on Schedule 4.18(d).
(e Each of the foregoing representations and warranties
of this Section 4.18 shall be in addition to, and not in lieu of, any
other representation or warranty contained in this Agreement, including
but not limited to, those contained in Section 4.16 hereof.
4.19 Products; Product Warranties.
(a The form of each product warranty relating to
products manufactured or sold by Seller and relating to the Business
that is currently in use and, to Seller's knowledge, was in use at any
time during the three (3) year period preceding the date of this
Agreement has been delivered to the Purchaser.
(b Schedule 4.19 sets forth a true and complete list of
(A) all products manufactured, marketed or sold by Seller and relating
to the Business that have been recalled or withdrawn (whether
voluntarily or otherwise) at any time during the past three (3) years
(for purposes of this paragraph, a product shall have been recalled or
withdrawn if all or a substantial number of products in a product line
were recalled or withdrawn) and (B) all Proceedings (whether completed
or pending) at any time during the past three (3) years seeking the
recall, withdrawal, suspension or seizure of any product sold the
Business.
(c Except as set forth on Schedule 4.19, Seller is not
aware of any defect in design, materials, manufacture or otherwise in
any products manufactured, distributed or sold by the Business during
the past three (3) years or any defect in repair to any such products
which could give rise to any claims in excess of historical warranty
expenses; provided, however, that for purposes of this paragraph
improvements made to products in the ordinary course of business shall
not be interpreted as an indication of the existence of any defects.
(d The warranty expenses and other unreimbursed repair,
maintenance and replacement expenses actually incurred by the Business
for the 12 months ending December 31, 2000 did not exceed (as a
percentage of sales) the annual average of such expenses for the most
immediate three preceding years, and Seller has no knowledge of any
circumstances which are likely to cause such warranty and other
expenses (as a percentage of sales) to increase in the future.
(e Except as provided in any of the standard product
warranties described in paragraph (a) of this Section and as otherwise
set forth on Schedule 4.19, Seller has not sold any products or
services which are subject to an extended warranty of Seller beyond
twelve (12) months and which warranty has not yet expired.
4.20 Customers.
(a) Schedule 4.13(a) lists all material customer
Contracts included in the Assets. Except as set forth on Schedule
4.20, no customer of the Business has given Seller or Xxxxxxx written
notice of termination or intent to terminate its business with Seller.
(b) The work substantially completed by Seller prior to
the Closing Date which will require either customer or third party
approval or acceptance but which has not yet received the required
customer or third party approval of acceptance will meet all material
requirements and specifications of the Contract under which such work
was completed, as modified through the Closing Date in all material
respects.
4.21 General Representation and Warranty. No statement
contained in any representation or warranty made by Seller and Xxxxxxx
herein, or in any Exhibit or Schedule attached hereto contains any
untrue statement of a material fact or omits to state any material fact
necessary, in order to make the statements herein or therein not
misleading in light of the circumstances in which they are made. The
financial projections relating to the Business delivered to Purchaser
are the financial projections the Seller utilized in connection with
its operations.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER AND WGT
Purchaser and WGT represent and warrant to Seller and Xxxxxxx
as follows:
5.1 Organization. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware. Purchaser is duly qualified to transact business
and is in good standing in all jurisdictions where the nature of the
business transacted by Purchaser or the character of the properties
owned by Purchaser would require such qualification. Purchaser has all
power and authority to own its property and to carry on its operations
as now conducted by it.
5.2 Corporate Action; Legal, Valid and Binding Agreement.
All action of Purchaser and WGT necessary to authorize the execution
and delivery of this Agreement and the instruments to be executed and
delivered pursuant hereto and to consummate the transactions
contemplated hereby has been properly taken, and resolutions of the
Board of Directors of the Purchaser and WGT, respectively, certified by
the Secretary or an Assistant Secretary of Purchaser and WGT (as
applicable) and in form satisfactory to counsel for Seller, shall be
delivered at the Closing to Seller. Upon execution and delivery, this
Agreement will constitute a legal, valid and binding agreement of
Purchaser and WGT enforceable in accordance with its terms.
5.3 No Violation. Except as set forth in Schedule 5.3
attached hereto, neither the execution, delivery nor performance of
this Agreement nor the consummation of the transactions contemplated
hereby is prohibited by, or requires Purchaser or WGT to obtain any
consent, authorization or approval or registration under or gives any
person the right to accelerate the performance of any obligation under
(a) any term or provision of the Articles of Incorporation or the By-
laws of Purchaser or WGT, (b) any Contract to which the Purchaser or
WGT is bound, (c) any Contract relating to any bank or other
institutional loans or indebtedness of the Purchaser or WGT, or (d) any
judgment, or Governmental Requirement, or any statute or law applicable
to Purchaser or WGT. Except for any filings set forth on Schedule 5.3,
no consent, approval or authorization of, or declaration, filing or
registration with, any Person is required to be made or obtained by
Purchaser or WGT in connection with the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated by this Agreement.
5.4 Litigation. There is no Proceeding pending or
threatened which questions or challenges the validity of this Agreement
or any of the transactions contemplated by this Agreement or otherwise
seeks to prevent or have the effect of preventing the consummation of
the transactions contemplated hereby.
5.5 General Representation and Warranty. None of the
representations and warranties of Purchaser made in this Agreement
contain any untrue statements of material fact or omit to state any
material fact necessary in order to make said representations and
warranties not misleading.
6. ACCESS AND CONFIDENTIALITY.
6.1 Access to Properties and Records.
(a Purchaser, through its Representatives and such other
advisers as may be selected by Purchaser, shall through the Closing
Date have access (which access shall not be materially disruptive to or
unreasonably interfere with any business or operations of Seller) to
all premises and operations of Seller used in the operations of the
Business and to their officers and employees for the purpose of its due
diligence (including but not limited to environmental due diligence)
examination of all of the Purchased Assets and other relevant records,
papers and information relating to the operations of Business. Seller
shall cooperate fully and will arrange for the cooperation of their
employees and their independent certified public accountants, and will
comply with all reasonable requests for data, information and access.
Upon the reasonable request of Purchaser, copies of such records,
papers and information shall be promptly furnished. Any third party
costs incurred by Seller in connection with Purchaser's due diligence
investigation (such as the costs of Seller's independent accountants in
respect thereto) shall be reimbursed by Purchaser.
6.2 Environmental Audit. Purchaser shall, at Purchaser's
sole expense, be permitted to cause environmental audits of the
Facilities to be conducted assessing the presence and or disposition of
Hazardous Substances and compliance with Environmental Laws; provided,
however, that Purchaser will not conduct or cause to be conducted any
"Phase II" environmental audits or other invasive testing procedures
without the express prior written consent of Seller. Seller hereby
grants a license to Purchaser's qualified environmental consultants to
enter upon the Facilities, upon giving Seller reasonable notice, with
personnel and materials to conduct such environmental audits.
6.3 Confidentiality by Purchaser; Return of Information.
All information acquired by or on behalf of WGT or Purchaser about or
relating to Xxxxxxx, Seller and the Purchased Assets pursuant to this
Agreement shall be "Evaluation Material" as defined in, and which shall
be subject to the terms and conditions of, the Confidentiality
Agreement between Xxxxxxx and WGT, dated March 22, 2001 (the
"Confidentiality Agreement"). Purchaser and WGT each agrees to
promptly return to Seller or destroy, at Seller's discretion, all
copies of any confidential information acquired by or on behalf of
Purchaser in the investigation of the Business to the extent provided
for in the Confidentiality Agreement.
6.4 Access to Records After the Closing. From and after
the Closing, Seller and its Representatives shall be allowed, upon
reasonable request, to inspect and copy at their expense the business
records and accounts of Purchaser pertaining to (i) all matters as to
which Seller is required to provide indemnification pursuant to this
Agreement, and (ii) any transactions of Seller occurring or assets of
Seller held at the Facilities, at and through the Closing Date.
Purchaser agrees not to destroy or abandon any such business records or
accounts for a period of four (4) years following the Closing and to
destroy such business records or accounts only upon thirty (30) days'
advance written notice to Seller for an additional period of two (2)
years thereafter. If Seller requests the surrender of such records or
accounts, then Purchaser shall surrender, at Seller's expense, such
records or accounts so requested rather than proceeding with such
destruction.
From and after the Closing, Purchaser and its Representatives
shall be allowed upon reasonable request to inspect and copy at its
expense the records of Seller and Xxxxxxx relating to the Business
through the date of the Closing that are not transferred to Purchaser,
including, without limitation, all financial records and tax returns of
Seller and Xxxxxxx relating to the Business. Each of Seller and
Xxxxxxx agrees not to destroy or abandon any such records for a period
of four (4) years following the Closing.
7. CONDITIONS PRECEDENT TO CLOSING
7.1 Conditions to Each Party's Obligation to Close. The
respective obligations of each party to consummate the transactions
provided for in this Agreement shall be subject to the satisfaction at
or prior to the Closing Date of the following conditions:
(a No temporary restraining order, preliminary or
permanent injunction or other order by any federal or state court in
the United States which prohibits the consummation of the transactions
provided for in this Agreement shall have been issued and remain in
effect.
(b Each of Seller and Purchaser shall have obtained such
consents from third parties and Governmental Authorities, as shall be
required and which are material to Seller and Purchaser and to
consummation of the transactions contemplated hereby.
7.2 Conditions Precedent to the Obligation of Purchaser
to Close. The obligation of Purchaser to consummate the transactions
provided for in this Agreement is subject to the satisfaction at or
before the Closing Date of each of the following conditions precedent:
(a Seller shall have delivered access to and possession
of all of the Purchased Assets to Purchaser and shall have delivered to
Purchaser such fully executed instruments of assignment, transfer and
conveyance as are necessary in the opinion of, and satisfactory in form
to, counsel to Purchaser to transfer good and marketable title to all
of the Purchased Assets to Purchaser in accordance with the provisions
of this Agreement.
(b The representations and warranties of Seller and
Xxxxxxx contained in this Agreement shall be true in all material
respects as of the date hereof and shall be true in all material
respects on the Closing Date as if made on that date. All covenants,
agreements and obligations and all conditions precedent on the part of
Seller and Xxxxxxx to be performed hereunder on or prior to the Closing
Date shall have been duly performed and complied with in all material
respects.
(c Seller shall have delivered to Purchaser a
certificate executed by an authorized officer of Seller and Xxxxxxx
dated the Closing Date stating that (i) all representations and
warranties made by Seller and Xxxxxxx contained in this Agreement are
true, complete and accurate as of the Closing as if made on and as of
such date, and (ii) all terms, covenants (to the extent required to be
performed prior to the Closing), conditions and provisions of this
Agreement to be met by Seller and Xxxxxxx have been complied with.
(d There shall not have occurred since December 31, 2000
a Sierra Material Adverse Event.
(e Purchaser shall have obtained commitments for the
Title Policies insuring Purchaser's fee title interest in and to each
parcel of Real Property, as more particularly described in Section 8.6
hereof.
(f Seller shall have executed and delivered the
Assumption Agreement and the other instruments of conveyance specified
by Section 3.2(a).
(g At or prior to the Closing, Purchaser shall have
received a UCC search report dated as of a recent date issued by the
Secretary of State of Delaware and each state in which Seller is
qualified to do business indicating that there are no filings under the
Uniform Commercial Code on file with such Secretary of State which name
Seller and/or Xxxxxxx as debtor or otherwise indicating any Encumbrance
on the Purchased Assets, except for (i) Permitted Encumbrances or other
liens which Purchaser has approved, in its sole discretion, and (ii)
any Encumbrances with respect to which Seller will deliver releases on
or before the Closing Date duly executed by the lender or other
creditor which is the holder of such lien.
(h All of the Key Employees identified on Schedule
8.8(a) shall have indicated his or her agreement to accept employment
with Purchaser or shall have agreed to become consultants to Purchaser
after the Closing on terms and conditions acceptable to Purchaser in
its sole and absolute discretion (contingent upon the Closing and
effective on the Closing Date), provided that such Key Employees are
offered salaries and benefits reasonably comparable in the aggregate to
their current salaries and benefits.
Purchaser shall have the right, exercisable in its sole discretion, to
waive any one or more of the foregoing conditions (which waiver shall
not operate as a waiver of any right of indemnity or any other right or
remedy for breach of this Agreement with respect thereto, and to
proceed with the Closing, or to terminate this Agreement.
7.3 Conditions Precedent to the Obligation of the Seller
to Close. The obligation of Seller to consummate the transactions
provided for in this Agreement is subject to the satisfaction at or
before the Closing Date of each of the following conditions precedent:
(a The representations and warranties of Purchaser and
WGT contained in this Agreement shall be true in all material respects
as of the date hereof and shall be true in all material respects on the
Closing Date as if made on that date. All covenants, agreements and
obligations and all conditions precedent on the part of Purchaser and
WGT to be performed or complied with hereunder at or prior to the
Closing shall have been duly performed and complied with in all
material respects.
(b Purchaser shall have delivered to Seller a
certificate executed by an authorized officer of Purchaser and WGT
dated the Closing Date stating that (i) all representations and
warranties made by Purchaser and WGT and contained in this Agreement
are true and accurate as of the Closing, and (ii) all terms, covenants
(to the extent required to be performed prior to the Closing),
conditions and provisions of this Agreement to be met by Purchaser and
WGT have been complied with.
(c Purchaser shall have delivered to Seller good and
sufficient instruments, satisfactory in form to counsel to Seller,
evidencing the assumption by Purchaser of the Assumed Liabilities.
(d Purchaser shall have delivered the Preliminary
Purchase Price to Seller.
(e Purchaser shall have executed and delivered the
Assumption Agreement to Seller and Xxxxxxx.
Seller shall have the right, exercisable in its sole discretion, to
waive any one or more of the foregoing conditions (which waiver shall
not operate as a waiver of any right of indemnity or any other right or
remedy for breach of this Agreement with respect thereto and to proceed
with the Closing, or to terminate this Agreement.
8. ADDITIONAL AGREEMENTS
8.1 Bulk Sales Laws. The parties hereto waive compliance
with the bulk transfer provisions of the Uniform Commercial Code as
adopted in any state relevant to the transactions provided for in this
Agreement. Seller warrants and agrees to pay when due and discharge
all claims of creditors and all Taxes and interest and penalties and
all other liabilities of whatsoever nature which do not constitute
Assumed Liabilities and which could be collected from Purchaser by
reason of such noncompliance.
8.2 Further Assurances. After the Closing, each of the
parties hereto agrees to take whatever further action is necessary and
to execute whatever further documents, instruments of assignment,
transfer, conveyance or authorization and agreements as may be
reasonably requested by the other in order to fulfill the purposes and
the intent of this Agreement.
8.3 Brokerage Commissions and Fees. WGT and Purchaser,
on the one hand, and Seller and Xxxxxxx, on the other hand, represent
and warrant to each other that all negotiations between them have been
carried on by them directly, each with the other, or with the other's
Representatives, without the intervention of any third person and that
there are no brokers' commissions, finder's fees or other payments of
like nature payable to any person. Purchaser agrees to indemnify and
hold harmless Seller from and against any and all losses, claims,
costs, damages and expenses of whatsoever nature (including, without
limitation, all legal expenses) attributable to any claim, liability or
obligation for any brokers' commission, finder's fees or other payment
of like nature which arises from any contract or agreement or
obligation on the part of the Purchaser with any broker, finder or like
person. Seller agrees to indemnify and hold harmless Purchaser from
and against any and all losses, claims, costs, damages and expenses of
whatsoever nature (including, without limitation, all legal fees and
expenses) attributable to any claim or liability or obligation for any
brokers' commissions, finder's fees or payment of like nature which
arises from any contract, agreement or obligation on the part of Seller
with any broker, finder or like person.
8.4 Operation of the Business Prior to Closing. (a)
Except as set forth on Schedule 8.4, prior to the Closing, Seller:
(i) shall operate the Business in the usual, regular
and ordinary course of business (except with the prior written consent
of Purchaser);
(ii) shall maintain the Purchased Assets in good
operating condition and repair;
(iii) shall pay its accounts payable and pay and
perform its other obligations when they become due and payable in the
ordinary course of business consistent with prior practice, or when
required to be performed, as the case may be it being agreed that, with
respect to the trade payables of the Business included in the Assumed
Operating Liabilities ("Payables"), Seller will, prior to Closing, pay
the Payables so that none of the Payables as of the Closing Date will
be older than 45 days.
(iv) shall maintain the books, accounts and records
of Seller in the usual, regular and ordinary manner on a basis
consistent with past practice; and
(v) shall use its reasonable commercial efforts to
assist Purchaser and WGT in connection with Purchaser's financing for
the transactions contemplated by this Agreement.
(b) Except as set forth on Schedule 8.4, prior to the
Closing, Seller:
(i) shall not make any material increase in the
salary, benefits, bonuses or other compensation (whether commission,
benefits (retirement, severance or other) or other direct or indirect
remuneration) payable to employees of the Business;
(ii) shall not enter into any employment contract
with any employee of the Business;
(iii) shall not sell, assign, transfer, convey,
lease, pledge, encumber or otherwise dispose of or agree to sell,
assign, transfer, convey, lease, pledge, encumber or otherwise dispose
of any of the Purchased Assets or other material rights, except in the
ordinary course of business;
(iv) shall not transfer or grant any right under, or
enter into any settlement regarding the breach or infringement of, any
Sierra Intellectual Property, or modify any existing right with respect
thereto;
(v) shall not enter into any Contract other than in
the ordinary course of business or enter into any material amendment,
supplement or waiver in respect of any Assumed Contract or enter into
any amendment, supplement or waiver with respect to any existing such
Assumed Contract;
(vi) shall not agree to incur any severance payment,
"stay bonus", "sale bonus" or similar obligation by reason of this
Agreement to any employee of the Business except for payments for
cancellation of outstanding stock options of Seller or its Affiliates.
(vii) shall not grant or extend any power of
attorney relating to the Business;
(viii) shall not make any commitment for capital
expenditures or capital additions or improvements relating to the
Business under which payment or expenditure obligations exceeding
$25,000 in the aggregate will remain outstanding as of the Closing
Date;
(ix) shall not enter into or amend any collective
bargaining or union contract or agreement covering any employees of the
Business;
(x) shall not institute, settle or agree to settle
any Proceeding before any arbitrator, tribunal, court or other
Governmental Authority that creates or imposes any continuing
obligation or restriction on the Business;
(xi) shall not in any other manner, modify, change
or otherwise alter the fundamental nature of the Business as presently
conducted;
(xii) shall not make or permit any change to its
accounting methods or principles; and
(xiii) shall not otherwise commit, whether in
writing or otherwise, to do, or take any action or omit to take any
action that would result in, any of the foregoing.
8.5 Public Statements. WGT, Purchaser, Seller and
Xxxxxxx agree (a) to cooperate, prior to the Closing, in preparing
language for and issuing any press releases or otherwise making public
statements with respect to the transactions contemplated by this
Agreement and that the press releases of WGT and Xxxxxxx, respectively,
included as Exhibit 8.5 shall be issued at 8:00 AM PDT on June 19,
2001 (the "Press Releases"); and (b) that no written press releases or
other public statements relating to the transactions contemplated by
this Agreement shall be issued after the Closing prior to the release
of the Press Releases without the joint consent of Purchaser and
Xxxxxxx (except as may be required by law and, in any such event, only
after consultation with the other party).
After the Closing, Seller and Purchaser shall jointly notify
all customers of the Business that the transactions contemplated by
this Agreement have occurred.
8.6 Matters Relating to Real Property.
(a On behalf of Purchaser, Seller shall request a
preliminary title commitment from a title insurance company acceptable
to Purchaser (the "Title Company") for the issuance of an California
Land Title Association extended coverage owner's policy of title
insurance (including mechanics' lien coverage) for each parcel included
in the Real Property setting forth the status of title to each such
parcel (individually a "Title Commitment" and collectively the "Title
Commitments"). The Title Commitments shall be accompanied by true,
complete and legible copies of all Encumbrances identified therein.
The policies to be issued pursuant to the Title Commitments
(individually a "Title Policy" and collectively the "Title Policies")
shall insure that Purchaser has good, marketable and indefeasible title
to such Real Property, subject only to those Encumbrances accepted by
Purchaser pursuant to paragraph (c) of this Section 8.6 ("Permitted
Title Encumbrances"), and shall include such additional coverages and
endorsements as Purchaser may reasonably require (collectively the
"Endorsements"). Purchaser shall pay all premiums for the issuance of
the Title Policy and the Endorsements, and shall deliver to the Title
Company such affidavits, indemnities and other documentation as shall
be necessary to enable the Title Company to issue the Title Policies
with the Endorsements subject only to Permitted Title Encumbrances.
(b Seller shall obtain, at Purchaser's sole cost and
expense (other than the cost of providing copies of existing surveys),
surveys covering each parcel included in the Real Property
(individually a "Survey" and collectively the "Surveys"), each of which
shall be prepared by a surveyor duly licensed under the laws of Nevada
and approved by Purchaser.
(c Prior to Closing, Purchaser shall notify Seller in
writing of any unacceptable Encumbrances or other matters disclosed by
either the Title Commitments or the Surveys (individually a
"Disapproved Encumbrance" and collectively the "Disapproved
Encumbrances"). Seller agrees to use commercially reasonable efforts
to eliminate the Disapproved Encumbrances or otherwise resolve the
Disapproved Encumbrances to the satisfaction of Purchaser.
8.7 Expenses; Sales Tax; Transfer Tax; Proration.
Whether or not the Closing is consummated all costs and expenses
incurred in connection with the negotiation, execution and performance
of this Agreement, including but not limited to legal and accounting
fees and expenses, shall be paid by the party that incurs such costs
and expenses except as expressly provided for in this Agreement.
Except for any Taxes determined based on the income of Seller or any
Affiliate thereof, Purchaser shall be responsible for payment of any
Taxes generated by the completion of the purchase of the Purchased
Assets contemplated by this Agreement including but not limited to the
transfer of the Real Property to Purchaser.
8.8 Employee Matters.
(a Purchaser agrees that it will offer employment to any
individual employed by Seller who, on the Closing Date, works for the
Business. If that employment offer is accepted, employment will
commence effective on the day following the Closing Date. Purchaser
has identified certain employees of Seller who are listed on Schedule
8.8(a) ("Key Employees"). The terms and conditions of Purchaser's
offers of employment to the employees of the Business will be
determined in Purchaser's sole discretion (subject to Section 8.8(b)
below).
(b) Purchaser will provide initial wages and benefits to
all employees of the Business who accept Purchaser's offer of
employment ("Transferred Employees") that are reasonably equivalent, in
the aggregate, to the compensation and benefits received by the
Transferred Employees from Seller as of the Closing Date. With respect
to Transferred Employees, Purchaser and Seller agree to cooperate fully
in the transition of any such employees to employment with Purchaser.
Nothing contained in this Section will be construed to affect any right
Purchaser or its Affiliates may have after the Closing to terminate the
employment of any Transferred Employee at any time.
(c) For the purposes of satisfying the service requirements,
if any, to participate in Purchaser's employee pension and welfare
benefit plans ("Purchaser's Employee Plans"), Purchaser will treat
service by each of the Transferred Employees with Seller as service
with Purchaser. For purposes of vesting in benefits payable under
Purchaser's employee pension benefit plans ("Purchaser's Pension
Plans"), but not for purposes of computing the amount of the benefits,
or the existence of a benefit, under Purchaser's Pension Plans,
Purchaser will treat service by each of the Transferred Employees with
Seller as service with Purchaser; provided that such service will not
be recognized to the extent that such recognition would result in
duplication of benefits (or is not recognized for such purposes under
Purchaser's Pension Plans). In addition, Purchaser will recognize and
assume responsibility for vacation hours accrued by Transferred
Employees under Seller's vacation policy on or before the Closing Date.
With the exception of liabilities included in the Assumed
Operating Liabilities, Purchaser is not assuming, under this Agreement
or otherwise, and the Seller is and shall remain fully responsible for
any obligation, responsibility or liability, whether contractual or
statutory, arising out of the termination of employees not hired by
Purchaser, or, in the case of Transferred Employees, any such
obligations, responsibilities or liabilities that relate to their
employment with Seller for the period of time up until the Closing.
(d) Except for Purchaser's agreements in Section 8.8(b)
and (c), after the Closing nothing herein expressed or implied confers
upon any former employee of Seller, or any other Person, any rights or
remedies (including, but not limited to, any right to employment, or
continued employment, for any specified period) or any right to any
particular benefits in connection with any employment of any nature or
kind whatsoever under or by reason of this Agreement.
(e) Seller is responsible for providing all notices and
other communications to employees of Seller and any Governmental
Authority that are required under the Worker Adjustment and Retraining
Notification Act (the "WARN Act"). Seller shall offer, or cause to be
offered by any ERISA Affiliate, continuation coverage as required by
COBRA to those individuals, if any, who are eligible to elect such
coverage by reason of the transaction contemplated by this Agreement.
Seller shall provide, or cause to be provided, all certifications
required by Code Section 9801(e) and all applicable notifications of
any conversion rights or privileges available under any Employee Plan
that arise as a result of the transaction contemplated by this
Agreement.
(f) Purchaser and Seller agree to work together to
accomplish direct rollovers of the Transferred Employees' account
balances, including outstanding loans by Seller's 401(k) Plan to the
Transferred Employees, under Seller's 401(k) Plan to Purchaser's 401(k)
Plan if such direct rollovers are permissible under both Seller's and
Purchaser's respective 401(k) Plans.
8.9 Accounts Receivable. The Purchased Assets shall not
include any of the Accounts Receivable of Seller. The Parties agree to
the following procedures with respect thereto:
(a) Purchaser shall use its reasonable commercial efforts
to collect the Accounts Receivable as agent for Seller which obligation
shall continue for 120 days following the Closing Date. Proceeds of
such collection received from any customer hereunder ("A/R
Collections") shall be applied by Purchaser first against the oldest
Accounts Receivable of such customer unless any such customer expressly
directs otherwise. Purchaser shall not be required to commence legal
action against any party nor to cease doing business with any customer
in connection with this Section 8.9. Seller agrees to reimburse,
indemnify and hold harmless Purchaser from and against any and all
claims, liabilities and losses (but not normal administrative expenses)
whatsoever that may be suffered or incurred by Purchaser to Seller or
any third party, including, but not limited to, attorney's fees,
arising out of or incurred with respect to Purchaser's efforts pursuant
to this Section 8.9, except to the extent that any such claims,
liabilities or losses arise out of the willful misconduct or gross
negligence of Purchaser.
(b) Subject to Section 9.7 hereof, Purchaser shall pay
all A/R Collections to Seller within five (5) business days after
Purchaser shall have identified and applied any A/R Collections on its
records. To the extent that Seller or any Affiliate thereof receives
any payment from any customer of the Business in respect of goods or
services sold by Purchaser after the Closing (i.e., a payment that is
not in respect of any Account Receivable), Seller shall pay such funds
to Purchaser within five (5) business days after the identification
thereof. During the 120 day collection period contemplated by this
Section 8.9, Purchaser shall give Seller a monthly written report on
the status of its collection efforts, and Seller shall also provide a
monthly report with respect to all funds received from customers of the
Business owing to Purchaser. Each party shall have the right to review
all cash receipts and other records of the other party relating to such
other party's obligations under this Section 8.9. Within 30 days
following the end of the 120 day period after the Closing Date, the
parties shall promptly meet and discuss any open issues under this
Section 8.9 and an appropriate means for the Purchaser to continue to
collect, or for Seller to assume collection of, the balance of the
Accounts Receivable not covered by Purchaser's collection efforts
hereunder. Unless the parties otherwise agree, Purchaser shall deliver
all records relating to the Accounts Receivable to Seller at such time.
8.10 Non-Competition and Nondisclosure.
(a As an inducement for Purchaser to enter into this
Agreement and in consideration of the Purchase Price to be paid to
Seller under this Agreement, and subject to Paragraph (d) of this
Section 8.10, Seller and Xxxxxxx agree that:
(i) For a period of four (4) years after the Closing:
(A) Seller and Xxxxxxx will not, directly or
indirectly through any Affiliate of Seller and
Xxxxxxx, invest in, own, manage, operate, finance,
control, or participate in the ownership,
management, operation, financing, or control of,
any Person whose business, products or activities
compete in whole or in part with the Product Lines
or activities of the Business anywhere in the
world; provided, however, that (I) the provisions
of this Section 8.10(a) shall not prohibit Seller
or Xxxxxxx, or any Affiliate thereof, from
conducting business with any such Person involving
products or services currently, or in the future,
offered or required by Seller, Xxxxxxx or any such
Affiliate (other than any of the products involved
in the Business), (II) the provisions of this
Section 8.10(a) shall not prohibit Seller or
Xxxxxxx, or any Affiliate thereof, from investing
in, or providing credit to, any Person engaged in
a business that does not compete with the Product
Lines even if such Person has an Affiliate which
is engaged in competition with the Product Lines
so long as no such investment or credit is directly
or indirectly used to support the competing business
of such Person's Affiliate, and (III) Seller or
Xxxxxxx may purchase or otherwise acquire up to
(but not more than) one percent of any class of
securities of any enterprise (but without otherwise
participating in the activities of such enterprise)
if such securities are listed on any national or
regional securities exchange or have been
registered under Section 12(g) of the Securities
Exchange Act of 1934. Seller and Xxxxxxx agree
that this covenant is reasonable with respect to
its duration, geographical area, and scope.
(B) Xxxxxxx and Seller will not, directly or
indirectly through any Affiliate thereof, (x)
induce or attempt to induce any Transferred
Employee to leave the employ of Purchaser, (y) in
any way interfere with the relationship between
Purchaser and any Transferred Employee, (z) induce
or attempt to induce any customer, supplier,
licensee, or business relation of Purchaser to
cease doing business with Purchaser in the Product
Lines, or in any way interfere with the
relationship between any customer, supplier,
licensee, or business relation of Purchaser in the
Product Lines.
(C) Xxxxxxx and Seller will not, directly or
indirectly through any Affiliate thereof, solicit
the business of any Person known to Seller to be a
customer of Purchaser, with respect to products or
activities which compete in whole or in part with
the Product Lines or activities of the Business.
(ii) In the event of a breach by Xxxxxxx or Seller
or any Affiliate thereof of any covenant set forth
in Subsection 8.10(a)(i) of this Agreement, the
term of such covenant will be extended by the
period of the duration of such breach; and
(iii) Xxxxxxx and Seller will not, at any time
during the four-year period herein provided,
disparage the Business or any employees or agents
of the Business.
(b Xxxxxxx and Seller acknowledge and agree that from
and after the Closing Date all confidential information of the Business
known by Xxxxxxx and/or Seller or any of their Representatives
("Confidential Information"), is the property of Purchaser. Therefore,
each of Xxxxxxx and Seller agrees that it will not, at any time,
disclose to any unauthorized Person or use for its own account or for
the benefit of any third Person any Confidential Information, whether
Xxxxxxx and/or Seller has such information in the memory of its
employees or embodied in writing or other physical form, without
Purchaser's prior written consent, unless and to the extent that the
Confidential Information is or becomes generally known to and available
for use by the public other than as a result of either Xxxxxxx or
Seller's fault or the fault of any other Person bound by a duty of
confidentiality to Purchaser or Xxxxxxx or Seller.
(c If Xxxxxxx or Seller breaches the covenants set forth
in Paragraphs (a) or (b) of this Section 8.10, Purchaser will be
entitled to seek an injunction or the equitable relief against Xxxxxxx
and/or Seller, and it will also be entitled to the following remedies:
(i) Damages from Xxxxxxx and Seller; and
(ii) To offset against any and all amounts owing to
Seller under this Agreement any and all amounts
which Purchaser may claim under clause (i) above.
The rights and remedies of the Purchaser in this Paragraph (c) are
cumulative and not alternative.
(d If a controlling interest in Xxxxxxx or Seller shall
be acquired by a Person other than a Person who is an Affiliate of
Xxxxxxx at the time of any such acquisition ("Acquiring Person"), then
the operation or continued operation by such Acquiring Person of its
business shall not constitute a violation or breach of this Section
8.10 by Xxxxxxx or Seller so long as and provided that: (i) Xxxxxxx and
Seller and their Affiliates as of the date of Closing shall continue to
be bound by all of the terms and conditions of this Section 8.10 and
(ii) without limiting the foregoing, any such Acquiring Person and its
Affiliates (including but not limited to Xxxxxxx and Seller) shall be
subject to, and bound by, the provisions of Paragraph (b) and, to the
extent it relates to said Paragraph (b), Paragraph (c) of this Section
8.10 as though they were an original signatory to this Agreement.
8.11 Transition Services. After the Closing, Seller will
supply certain services to Purchaser as follows:
(a) Employee Matters. Seller will pay, or cause its
payroll services provider (Ceridian) to pay, all wages and salaries
payable to the Transferred Employees of the Business, net of all
required withholding for a reasonable period of time after the Closing.
Purchaser will pay to Seller or its designee by wire transfer, on the
next business day following notice from Seller to Purchaser as to the
aggregate amount of each such payment to Purchaser's employees, plus
the aggregate amount of any payroll or withholding taxes or any other
payroll related deductions remitted by Seller on behalf of Purchaser or
the Transferred Employees and any out-of-pocket expenses incurred by
Seller in connection therewith, but not including any allocation of the
costs of Seller's employees. Purchaser will provide Seller with all
information required by Seller to perform its services hereunder. To
the extent that Seller's services under this Paragraph (a) extend
beyond two pay periods of the Business after the Closing Date,
Purchaser shall reimburse Seller for an allocation of the cost of the
Seller's employees performing such services in connection therewith.
In addition:
(i) Purchaser and Seller agree, with respect to any
Transferred Employees, to use the "alternate procedure"
set forth in IRS Rev. Proc. 96-60, 1996-2 C.B. 399, for:
(A) preparing and filing Forms W-2 (Wage and Tax
Statements), Forms W-3 (Transmittal of Income and Tax
Statements), and any remaining Forms 941 (Employer's
Quarterly Federal Tax Return) for 2001; and (B)
transferring Forms W-4 (Employee's Withholding Allowance
Certificate) and Forms W-5 (Earned Income Credit Advance
Payment Certificate). Seller will remain responsible for
the Forms W-2 for 2001 and all other required reporting
obligations for those employees of Seller who are not
Transferred Employees.
(ii) On and after the Closing Date, Seller will make
available to Purchaser all current Forms W-4 and Forms
W-5 that were provided to Seller by the Transferred
Employees and any other wage and payroll tax payment and
withholdings records, reports and other data as may be
reasonably necessary to enable Purchaser to furnish
Forms W-2 to the Transferred Employees for 2001, to file
Forms 941 for 2001 and to make all other appropriate
reportings and withholdings related to wages paid to the
Transferred Employees. Immediately upon receipt of
notice of the hire of each Transferred Employee,
Purchaser will transfer to Seller custody of the current
Form W-4, and if applicable, Form W-5, that was provided
to Seller by such Transferred Employee.
(b) Xxxxxxx. Seller will make available to Purchaser the
services of Xxxx Xxxxxxx to assist Purchaser in connection with
Purchaser's closing of the books of the Business for the month of June
2001. Such services will be provided on a reasonable, part-time basis
during the month of July 2001. Seller shall provide such services free
from any charge for the service of Xxxxxxx, but Purchaser shall
reimburse Seller for any out-of-pocket costs incurred in connection
with providing such services.
(c) Test Equipment. Seller shall continue to provide
such engineers and technicians as may be reasonably necessary to
complete the ongoing installation of certain testing equipment and
software at the Xxxxxx City facility of the Business. Purchaser shall
pay Seller for any such services provided after Closing under this
clause an amount equal to (i) Seller's actual costs for such personnel
and services plus (ii) any out-of-pocket expenses, including reasonable
travel and lodging expenses incurred in performing such services,
consistent with Seller's travel expense policy and subject to Seller
providing Purchaser with documentation supporting such expenses.
(d) IT. Xxxxxxx and Seller shall cooperate with
Purchaser in connection with the termination of all information
technology interfaces between Xxxxxxx or Seller and the Business.
Purchaser shall have the right to continue to use the T-1 line service
which prior to the Closing Xxxxxxx has provided or made available to
the Business for a period of up to 60 days, or such longer period as
the parties may agree upon; in connection therewith, Purchaser shall
pay or reimburse Xxxxxxx for all out-of-pocket costs incurred in
connection with this service and Xxxxxxx and Purchaser shall cooperate
and use their reasonable commercial efforts to effectuate appropriate
procedures to protect each other's confidential information to the
extent practicable. In addition, subject to the foregoing, Xxxxxxx
shall discontinue and terminate as soon as practicable after Closing
any links to the Business which are contained on its Website.
8.12 Consents and Best Efforts.
(a As soon as practicable, Purchaser and Seller, as
applicable, will commence all reasonable action required hereunder to
obtain all consents, approvals and agreements of, and to give all
notices and make all filings with, any Person as may be necessary to
authorize, approve or permit the full and complete sale, conveyance,
assignment or transfer of the Purchased Assets, free of Encumbrances,
including but not limited to approval from customers of the Business
for the transfer of the Assumed Contracts. Purchaser and Xxxxxxx or
Seller agree to use commercially reasonable best efforts to satisfy all
conditions precedent to their respective obligations to consummate the
transactions contemplated by this Agreement.
(b Xxxxxxx and Seller shall not, nor shall they authorize
any of their Representatives, directly or indirectly, (i) to solicit,
initiate or encourage the submission of any proposal by any Person
with respect to, or which includes, a purchase of all or any
significant portion of the assets of the Business, or any other
transaction that would involve a change of ownership or control of any
of the Purchased Assets ("Acquisition Proposal"), (ii) to participate
in any discussions or negotiations regarding, or furnish to any Person
any information with respect to, or take any action to facilitate any
inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Acquisition Proposal.
Notwithstanding the foregoing, Xxxxxxx shall promptly notify Purchaser
orally and in writing of (x) the receipt by Xxxxxxx or Seller or any of
their Representatives after the date hereof of any Acquisition
Proposal, (y) the material terms and conditions thereof and (z) the
identity of the Person(s) who has made the Acquisition Proposal.
8.13 SEC Financials. Xxxxxxx and Seller acknowledge that
WGT is required under Governmental Requirements to prepare or have
prepared and report, certain financial statements for the Business
which include (i) an audited balance sheet and audited statements of
income and cash flow of the Business in accordance with GAAP for the
Seller's most recent fiscal year; (ii) an unaudited balance sheet and
unaudited statements of income and cash flows of the Business for the
Seller's fiscal quarters ending March 31, 2001 and April 1, 2000,
respectively; and (iii) unaudited proforma financial information for
the Business including a proforma balance sheet and a proforma
statement of income for the most recent fiscal year end and for the
fiscal quarter ending March 31, 2001 (collectively, "Audited
Financials") as soon as possible for purposes of a proposed
registration statement to be filed by WGT, or, in any event, within
five (5) days after the Closing Date.
With respect to the foregoing Xxxxxxx, Seller and WGT agree
as follows:
(a Xxxxxxx and Seller will assist and cooperate, and
cause its accountants to cooperate, with WGT in connection with the
WGT's efforts to prepare, complete and file the Audited Financials in a
timely manner, pursuant to all Governmental Requirements. In that
regard, Xxxxxxx and Seller will make available to WGT and its
Representatives at all reasonable times all financial and other books
and records of Seller, and cause its accountants to make available all
of their work papers, which are relevant, necessary or advisable in
order for WGT to complete and file the Audited Financials.
(b WGT shall pay or reimburse Seller for all direct,
out-of-pocket costs and expenses incurred by Xxxxxxx and Seller or
their Representatives in assisting and cooperating with WGT as provided
for in Paragraph (a) hereof. Xxxxxxx and Seller shall not pay,
reimburse or otherwise be responsible for any costs and expenses of any
kind whatsoever that may be incurred by WGT or its Representatives in
connection with their completion of the Audited Financials.
8.14 Cooperation Regarding Insurance Coverage. Xxxxxxx
agrees to provide such information as Purchaser may reasonably request
and otherwise provide reasonable cooperation to Purchaser in connection
with Purchaser's application for a medical products liability insurance
policy that will provide coverage for pre-Closing prior acts.
9. SURVIVAL AND INDEMNIFICATION
9.1 Survival of Representations, Warranties, Covenants
and Indemnities. The representations and warranties of the parties to
this Agreement shall survive the Closing until December 31, 2002, at
which time they shall terminate, except that (a) the representations
and warranties set forth in Section 4.5 shall survive the Closing until
all applicable statutes of limitation, as extended, shall have expired;
(b) the representations and warranties set forth in Section 4.18 shall
survive the Closing for a period of five (5) years after the Closing
Date; (c) there shall be no time limitation on the representations and
warranties set forth in Sections 4.2 and 4.7(b); and (d) any claims
made prior to the expiration of the applicable survival period with
respect to any Loss arising out of any breach of any representation and
warranty by any party, shall survive until the liability shall be
finally determined. The covenants of the parties to this Agreement,
including but not limited to the covenants and indemnities set forth in
this Article 9 of this Agreement, shall survive the Closing until they
have been fully satisfied or otherwise discharged.
9.2 Definitions. For purposes of this Article 9:
"Loss" and "Losses" means any and all losses, damages,
liabilities, payments, costs and obligations, and all expenses related
thereto. Losses shall include any reasonable legal fees and costs
incurred by any of the Indemnified Persons subsequent to the Closing in
defense of or in connection with any alleged or asserted liability,
payment or obligation, whether or not any liability or payment,
obligation or judgment is ultimately imposed against the Indemnified
Persons and whether or not the Indemnified Persons are made or become
parties to any such action.
"Indemnified Person" means any person entitled to be
indemnified under this Article 9.
"Indemnifying Person" means any person obligated to indemnify
another person under this Article 9.
"Purchaser's Indemnified Persons" means the Purchaser, their
directors, officers, employees, stockholders and agents.
"Seller's Indemnified Persons" means Xxxxxxx, Seller, their
directors, officers, employees, stockholders and agents.
"Third Party Action" means any written assertion of a claim,
or the commencement of any action, suit, or proceeding, by a third
party as to which any person believes it may be an Indemnified Person
hereunder.
9.3 Indemnification by Seller and Xxxxxxx.
(a) Subject to the terms and conditions of this Article
9, Seller and Xxxxxxx hereby agree, jointly and severally, to defend,
indemnify and hold harmless Purchaser's Indemnified Persons from and
against all Losses directly or indirectly incurred by or sought to be
imposed upon any of them:
(i) resulting from or arising out of any breach of
any of the representations or warranties (other than those in Sections
4.2, 4.5, 4.7(b) and 4.18) made by Seller or Xxxxxxx in or pursuant to
this Agreement or in any agreement, document or instrument executed and
delivered pursuant hereto or in connection with the Closing;
(ii) resulting from or arising out of any breach of
any of the representations or warranties made by Seller or Xxxxxxx
pursuant to Section 4.2 or 4.7(b));
(iii) resulting from or arising out of any breach of
any covenant or agreement made by Seller in or pursuant to this
Agreement;
(iv) in respect of any Retained Liability or any
liability or obligation of Seller not included in the Assumed
Liabilities;
(v) resulting from or arising out of the conduct of
the Business (including but not limited to the manufacture of any
product) at any time prior to the Effective Time including, but not
limited to, any Proceeding against the Seller or Xxxxxxx and any
litigation or similar matter arising out of such conduct, whether or
not described or required to be described on Schedule 4.15 (except for
any Assumed Liabilities expressly assumed by Purchaser in this
Agreement).
(vi) resulting from or arising out of a breach of
any representation warranty made by Seller or Xxxxxxx in or pursuant to
Section 4.5 or out of any liability, payment or obligation in respect
of any Taxes owing by Seller or Xxxxxxx of any kind or description
(including interest and penalties with respect thereto) for all the
Pre-Closing Tax Periods unless included in the Assumed Operating
Liabilities;
(vii) resulting from or arising out of a breach of
any representation or warranty made by Seller or Xxxxxxx in or pursuant
to Section 4.18 or resulting from or arising out of any Environmental
Claim or any violation of any Environmental Laws which occurred or
relate to time periods or events on or prior to the Closing Date, which
violation does not otherwise relate to a Retained Liability under
Section 2.4 and as to which indemnification may be sought under item
(iv) of this paragraph (a);
(viii) resulting from or arising out of any Employee
Benefit Plan except for any Assumed Liabilities; and
(ix) resulting from or arising out of Seller's
failure to comply with bulk sales laws notwithstanding Purchaser's
waiver of Seller's compliance therewith pursuant to this Agreement.
(b) The right to indemnification under paragraph (a) of
this Section 9.3 is subject to the following limitations:
(i) Seller and Xxxxxxx shall have no liability under
paragraph (a) unless one or more of the Purchaser's Indemnified Persons
gives an Indemnification Notice to Seller asserting a claim for Losses
before the expiration of the applicable period set forth below:
(A) for claims under clause(s) (i) and (ix)
of paragraph (a) above, the period until December 31, 2002;
(B) for claims under clause (vii) of paragraph
(a) above a period of five (5) years after the Closing Date;
(C) for claims under clause(s) (iii), (iv),
(v), (vi) and (viii) of paragraph (a) above, for so long as any claim
may be made in respect of such matters under any applicable statute of
limitations; and
(D) for claims for fraud or under clause (ii)
of paragraph (a) above, without limitation as to time.
(ii) Indemnification for claims under clauses (i)
and (ix) of Section 9.3(a) above and for claims relating to AOL-Type
Retained Liabilities under clause (iv) of Section 9.3(a) above, but not
for claims for fraud or under clauses (ii), (iii), (v), (vi), (vii) and
(viii) of Section 9.3(a) or, except for Retained Liabilities of the
type identified on Schedule 9.3(b) ("AOL-Type Retained Liabilities"),
under clause (iv) of Section 9.3(a), (A) shall be payable by the Seller
and Xxxxxxx hereunder only if and to the extent that the aggregate
amount of all Losses hereunder by the Purchaser's Indemnified Persons
shall exceed $250,000 (the "Basket"), whereupon Seller and Xxxxxxx
shall be responsible for paying all such amounts in excess of the
Basket and (B) shall not exceed $49,026,000 in the aggregate.
(iii) The limitations on the period of survival in
this Section 9.3 shall not apply to any covenant or undertaking
contained in this Agreement (or in any agreement or instrument
delivered pursuant hereto) which is to be performed following the
Closing.
9.4 Indemnification by Purchaser and WGT.
(a) Subject to the terms and conditions of this Article
9, from and after the Closing Date, Purchaser and WGT hereby agree,
jointly and severally, to indemnify and hold harmless Seller's
Indemnified Persons from any and all Losses directly or indirectly
incurred by or sought to be imposed upon them;
(i) resulting from or arising out of any breach of
any of the representations or warranties made
by Purchaser, in or pursuant to this Agreement
or in any agreement, document or instrument
executed and delivered pursuant hereto or in
connection with the Closing; or
(ii) resulting from or arising out of any breach of
any covenant or agreement made by Purchaser in
or pursuant to this Agreement including but not
limited to any failure to pay or otherwise
discharge any of the Assumed Liabilities.
(b) The right to indemnification under paragraph (a)
above is subject to the limitation that Purchaser shall have no
liability under paragraph (a) unless a Seller's Indemnified Person
gives written notice to Purchaser asserting a claim for Losses,
including reasonably detailed facts and circumstances pertaining
thereto, before December 31, 2002, provided that with respect to a
claim for Losses relating to a breach of the representations in Section
5.2, there shall be no time limit for the assertion of such a claim.
Indemnification for claims under paragraph (a) (other than claims
relating to any Assumed Liability) shall be payable by Purchaser only
if and to the extent that the aggregate amount of all Losses hereunder
by the Seller's Indemnified Persons shall exceed the Basket, whereupon
Purchaser shall be responsible for paying all such amounts in excess of
the Basket for indemnification.
(c) The limitations on the period of survival in this
Section 9.4 shall not apply to any covenant or undertaking contained
in this Agreement (or in any agreement or instrument delivered pursuant
hereto) which is to be performed following the Closing.
9.5 Notice of Indemnification Claims.
(a) If (i) a Third Party Claim is made against any
Indemnified Person that is subject to a right of indemnification under
this Article 9 or (ii) any party hereto becomes aware of facts or
circumstances establishing that such party has experienced or incurred
Losses or will experience or incur Losses subject to indemnification
under this Article 9, then such Indemnified Person shall give to the
Indemnifying Person notice of such claim ("Indemnification Notice") as
soon as reasonably practicable but in no event more than thirty (30)
days after the Indemnified Person has received notice of or obtains
actual knowledge of such claims (provided that failure to give such
notice shall not limit the Indemnifying Person's indemnification
obligation hereunder except to the extent that the delay in giving, or
failure to give, the notice adversely affects the Indemnifying Person's
ability to defend against the claim). To the extent practicable, the
Indemnification Notice will describe with reasonable specificity (A)
the nature of and the basis for the indemnification claim, including
any relevant supporting documentation, and (B) an estimate of all
Losses associated therewith. If the Indemnifying Party does a not
object within thirty (30) days after receipt of the Indemnification
Notice, the indemnification claims described in the Indemnification
Notice shall be deemed final and binding upon the Indemnifying Person
(hereinafter, "Permitted Indemnification Claim"). If the Indemnifying
Person contests the propriety of an indemnification claim described in
any Indemnification Notice and/or the amount of Losses associated with
such claim, then the Indemnifying Person shall deliver to the
Indemnified Person a written notice detailing with reasonable
specificity all specific objections that the Indemnified Person has
with respect to the indemnification claims contained in the
Indemnification Notice ("Indemnification Objection Notice"). If the
Indemnifying Person and the Indemnified Person are unable to resolve
the disputed matters described in the Indemnification Objection Notice
within fifteen (15) business days after the date the Indemnifying
Person received the Indemnification Objection Notice, the disputed
matters will be subject to the dispute resolution procedures set forth
in Section 9.9 hereof. Any undisputed indemnification claims contained
in any Indemnification Notice shall be deemed to be final and binding
upon the Indemnifying Persons and shall constitute a Permitted
Indemnification Claim. If the determination of the disputed matters
pursuant to Section 9.9 results in all or any portion of an
indemnification claim properly being subject to indemnification
pursuant to this Article 9, such claim or portion thereof shall be
final and binding upon the Indemnifying Person and shall constitute a
Permitted Indemnification Claim.
(b) Defense of Third Party Actions:
(i) Upon receipt of a notice of a Third Party Action
subject to an Indemnification Notice under this Section 9.5, the
Indemnifying Person shall have the right, at its option and at its own
expense, to participate in and be present at the defense of such Third
Party Action, but not to control the defense, negotiation or settlement
thereof, which control shall remain with the Indemnified Person, unless
the Indemnifying Person makes the election provided in paragraph (ii)
below.
(ii) By written notice within 45 days after receipt
of a notice of a Third Party Action, an Indemnifying Person may elect
to assume control of the defense, negotiation and settlement thereof,
with counsel reasonably satisfactory to the Indemnified Person;
provided, however, that its right to assume such control shall be
subject to the Indemnifying Person agreeing in writing (A) to promptly
indemnify the Indemnified Person for its expenses to date, (B) that any
Losses arising out of the Third Party Action constitute a Permitted
Indemnification Claim and (C) to hold the Indemnified Person harmless
from and against any and all Losses caused by or arising out of any
settlement of the Third Party Action approved by the Indemnifying
Person or any judgment in connection with that Third Party Action. The
Indemnifying Person shall not in the defense of the Third Party Action
enter into any settlement which does not include as a term thereof the
giving by the third party claimant of an unconditional release of the
Indemnified Person, or consent to entry of any judgment except with the
consent of the Indemnified Person.
(iii) Upon assumption of control of the defense of a
Third Party Action under paragraph (ii) above, the Indemnifying Person
will not be liable to the Indemnified Person hereunder for any legal or
other expenses subsequently incurred in connection with the defense of
the Third Party Action, other than reasonable expenses of
investigation.
(iv) If the Indemnifying Person does not elect to
control the defense of a Third Party Action under paragraph (ii), the
Indemnifying Person shall promptly reimburse the Indemnified Person for
expenses incurred by the Indemnified Person in connection with defense
of such Third Party Action, as and when the same shall be incurred by
the Indemnified Person.
(v) Any person who has not assumed control of the
defense of any Third Party Action shall have the duty to cooperate with
the party which assumed such defense.
9.6 Miscellaneous.
(a) Purchaser's Indemnified Persons shall be entitled to
indemnification under Section 9.2(a) and Seller's Indemnified Persons
shall be entitled to indemnification under Section 9.3(a), regardless
of whether the matter giving rise to the applicable liability, payment,
obligation or expense may have been previously disclosed to any such
person.
(b) If any Loss is recoverable under more than one
provision this Article 9, the Indemnified Person shall be entitled to
assert a claim for such Loss until the expiration of the longest period
of time within which to assert a claim for Loss under any of the
provisions which are applicable.
(c) To the extent that more than one representation and
warranty contained in this Agreement requires the same disclosure, the
appearance of such disclosure on any single Schedule shall serve as
disclosure for all of the representations and warranties to which such
disclosure applies so long as the matter is disclosed on each
applicable Schedule in sufficient detail so as to make it apparent to
Purchaser that such disclosure is relevant to the applicable
representation and warranty. Notwithstanding the foregoing, Seller
agrees that it shall use all reasonable efforts to reference each
disclosure on each Schedule to which it applies.
(d) The obligations of the Indemnifying Parties shall
continue with respect to any claims for Damages asserted by any
Indemnitee prior to the last date upon which such Indemnitee may assert
such claims until resolution thereof.
(e) Purchaser shall undertake commercially reasonable
efforts to mitigate all Losses incurred hereunder until such time as
any claim for Losses hereunder is finally and fully resolved, including
the time during which Seller may be pursuing claims with respect to
such Losses under and with respect to any policy or policies of
insurance maintained by Seller prior to the Closing Date. In addition,
if and to the extent that such Losses are or may be covered by any such
policy or policies of insurance maintained by Seller prior to the
Closing Date, Purchaser shall provide reasonable and commercially
practical cooperation and assistance to Seller in conjunction with its
efforts to make any and all claims under and with respect to such
insurance policies, and any proceeds of such insurance policies which
actually are paid or become payable to Purchaser shall be applied to
offset any Losses which otherwise would be paid or become payable by
Seller hereunder, provided that the prosecution or resolution of any
claims under or with respect to such insurance policies shall not
xxxxx, impair, or delay Purchaser's' ability to pursue its rights under
this Article 9.
9.7 Payment of Indemnification; Attorneys Fees.
Permitted Indemnification Claims under this Article 9 shall be paid or
otherwise satisfied by Indemnifying Persons within 30 days after notice
thereof is given by the Indemnified Person. If an Indemnified Person
is required to initiate arbitration under Section 9.9(c) or legal
action against an Indemnifying Person to enforce any arbitration award
under Section 9.9 or Purchaser's rights under Section 8.10, it shall be
entitled to recover from the Indemnifying Person all legal fees and
expenses incurred by such Indemnified Person if it is successful in
such arbitration or action.
9.8 Exclusivity. The parties agree that, except in the
case of fraud or for a breach of Section 8.10, their sole and exclusive
remedy for, under or in connection with this Agreement, including, but
not limited to, any violations or any breach of this Agreement, shall
be a claim under and in accordance with the provisions of this Article
9.
9.9 Dispute Resolution.
(a) Negotiated Resolution. If any dispute arises (i) out
of or relating to, this Agreement or any alleged breach thereof, or
(ii) with respect to any of the transactions or events contemplated
hereby ("Dispute"), the party desiring to resolve such Dispute shall
deliver a written notice describing such Dispute with reasonable
specificity to the other parties ("Dispute Notice"). If any party
delivers a Dispute Notice pursuant to this Section 9.9, or if any
Indemnifying Person delivers to any Indemnitee an Indemnification
Objection Notice pursuant to Section 9.5(a), the parties involved in
the Dispute shall meet at least twice within the thirty (30) day period
commencing with the date of the Dispute Notice or the Indemnification
Objection Notice (as the case may be) and in good faith shall attempt
to resolve such Dispute or the rejected indemnification claim
("Rejected Claim"), as the case may be.
(b) Mediation. If any Dispute or Rejected Claim is not
resolved or settled by the parties as a result of negotiation pursuant
to Section 9.9(a) above, the parties shall submit the Dispute or
Rejected Claim to non-binding mediation before a retired judge of a
federal District Court or the New York State Supreme Court, or some
similarly qualified, mutually agreeable individual. The parties shall
bear the costs of such mediation equally.
(c) Arbitration. If the Dispute or Rejected Claim is not
resolved by mediation pursuant to Section 9.9(b) above, or if the
parties fail to agree upon a mediator, within ninety (90) days after
the Dispute Notice or Indemnification Objection Notice (as the case may
be), the Dispute or Rejected Claim shall be settled by arbitration
conducted in New York State which shall be in accordance with the rules
and procedures of JAMS/Endispute then in effect with respect to
commercial disputes. The arbitration of such issues, including the
determination of any amount of damages suffered by any party hereto by
reason of the acts or omissions of any party, shall be final and
binding upon all parties. Notwithstanding the foregoing, the
arbitrator shall not be authorized to award punitive damages with
respect to any such claim or controversy, nor shall any party seek
punitive damages relating to any matter under, arising out of or
relating to this Agreement in any other forum. Except as otherwise set
forth in the Agreement, the cost of any arbitration hereunder,
including the cost of the record or transcripts thereof, if any,
administrative fees, and all other fees involved including reasonable
attorneys' fees incurred by the party determined by the arbitrator to
be the prevailing party, shall be paid by the party determined by the
arbitrator not to be the prevailing party, or otherwise allocated in an
equitable manner as determined by the arbitrator.
(d) Injunctive Relief. The provisions of this Section
9.9 shall not preclude Purchaser from seeking an injunction or other
equitable relief to enforce the provisions of Section 8.10 of this
Agreement.
10. TERMINATION
10.1 Termination by Mutual Consent. This Agreement may
be terminated at any time prior to the Closing Date by mutual written
consent of Seller and Purchaser.
10.2 Termination by either Seller or Purchaser. This
Agreement may be terminated by Seller or Purchaser if:
(a) The Closing is not consummated on or before June
30, 2001, or such later date as shall have been approved by Seller and
Purchaser (the "Termination Date"); provided, however, that the right
to terminate this Agreement under this Section 10.2(a) shall not be
available to any party whose failure to fulfill any obligation under
this Agreement has been the cause of, or resulted in, the failure of
the Closing to occur on or before the Termination Date.
(b) A court of competent jurisdiction or Governmental
Authority shall have issued an order, decree or ruling or taken any
other action (which order, decree or ruling the parties shall use their
commercially reasonable efforts to lift), in each case permanently
restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, and such order, decree, ruling or other
action shall have become final and nonappealable.
10.3 Effect of Termination. In the event of the
termination of this Agreement under this Article 10, this Agreement
shall become void and have no effect, without any liability on the part
of Purchaser or Seller (or their respective Representatives) to the
other party except (i) as provided in Sections 6.3 and 8.7 and (ii) as
provided in Article 9, to the extent that such termination results from
the willful breach by any party hereto of any material representation,
warranty, covenant or agreement hereunder.
11. GENERAL PROVISIONS
11.1 Notices. All notices and other communications
required or permitted by this Agreement shall be made in writing and
any such notice or communication shall be deemed delivered (a) when
delivered in person, by recognized overnight courier or transmitted by
facsimile or telecopier, or (b) five (5) days after it has been sent by
air mail, as follows:
A. SELLER OR XXXXXXX:
Xxxxxxx Technologies, Inc.
0000 Xxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, General Counsel
Fax No.: 000-000-0000
B. WGT OR PURCHASER:
Xxxxxx Xxxxxxxxxx Technologies, Inc.
9,645 Xxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, CEO
Fax No.: 000-000-0000
with a copy to:
Xxxxxxx Xxxx LLP
Xxx X & X Xxxxx, Xxxxx 0000
Xxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Xx., Esq.
Fax No.: 000-000-0000
Any party may from time to time designate by written notice pursuant to
this Section 11.1 any other address or party to which such notice or
communication or copies thereof shall be sent.
11.2 Assignment. Purchaser may assign its right to
purchase the Purchased Assets to an Affiliate of Purchaser, provided
that, notwithstanding any such assignment, Purchaser shall remain
primarily liable for all of its obligations under this Agreement.
Except as provided in the preceding sentence, no party shall assign
this Agreement or any rights, interests or obligations hereunder, or
delegate performance of any of its obligations hereunder, without the
prior written consent of the other party.
11.3 Waiver, Amendment, etc. This Agreement may not be
amended or supplemented, and no waivers of or consents to departures
from the provisions hereof shall be effective, unless set forth in a
writing signed by, and delivered to, both parties. No failure to delay
of a party in exercising any power or right under this Agreement will
operate as a waiver thereof, nor will any single or partial exercise of
any right or power, or any abandonment or discontinuance of steps to
enforce such right or power, preclude any other or further exercise
thereof or the existence of any other right or power.
11.4 Binding Agreement; No Third Party Beneficiaries.
This Agreement will be binding upon and inure to the benefit of the
parties and their successors and permitted assigns. Nothing expressed
or implied herein is intended or will be construed to confer upon or to
give any other Person any rights or remedies by virtue hereof.
11.5 Severability. The invalidity or unenforceability of
any provision hereof in any jurisdiction will not affect the validity
or enforceability of the remainder hereof in that jurisdiction or the
validity or enforceability of this Agreement, including that provision
in any other jurisdiction. To the extent permitted by applicable law,
each party waives any provision of applicable law that renders any
provision hereof prohibited or unenforceable in any respect. If any
provision of this Agreement is held to be unenforceable for any reason,
it shall be adjusted rather than avoided, if possible, in order to
achieve the intent of the parties to the extent possible.
11.6 Counterparts; Facsimile. This Agreement may be
executed by facsimile signature transaction and in one or more
counterparts each of which when so executed and delivered will be
deemed an original but all of which will constitute one and the same
Agreement.
11.7 Headings. The headings used in this Agreement are
for reference purposes only and shall not be given substantive effect.
11.8 Governing Law. This Agreement shall be governed by
and interpreted in accordance with the laws of New York without
reference to its principles of conflicts of laws.
11.9 Entire Agreement. This Agreement, the Schedules,
the Exhibits hereto and the Additional Agreements, together with the
Confidentiality Agreement, constitute the entire agreement and
understanding of the parties in respect of any subject matter contained
herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
11.10 Representation by Counsel; Interpretation. Each of
Xxxxxxx and Seller, and WGT and Purchaser, acknowledges that it has
been represented by counsel in connection with this Agreement and the
transactions contemplated by this Agreement. Accordingly, any rule of
law or any legal decision that would require interpretation of any
claimed ambiguities in this Agreement against the party that drafted it
has no application and any such right is expressly waived. The
provisions of this Agreement shall be interpreted in a reasonable
manner to effect the intent of Xxxxxxx, Seller, WGT and Purchaser.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have duly executed this Agreement
as of the date first above written.
XXXXXX XXXXXXXXXX TECHNOLOGIES, INC.
By: /s/Xxxxx Xxxxx VP, Corporate Development
----------------------------------------
(Title)
GB ACQUISITION CO., INC.
By: /s/Xxxxx Xxxxx VP, Corporate Development
----------------------------------------
(Title)
XXXXXXX TECHNOLOGIES, INC.
By: /s/Xxxxxxx X. Xxxx, CEO
----------------------------------------
(Title)
XXXXXXX ELECTRONIC COMPONENTS GROUP, INC.
By: /s/Xxxxxxx X. Xxxx, CEO
----------------------------------------
(Title)
INDEX OF SCHEDULES AND EXHIBITS
SCHEDULES:
Schedule 1.1(A) Contracts which are Retained Liabilities
Schedule 1.1(B) Assumed Operating Liabilities
Schedule 2.2(b) Estimated AOL Statement
Schedule 2.5 Form of Purchase Price Allocation
Schedule 4.3 Seller Violations and Conflicts; Consents
Schedule 4.4 Corporate Records
Schedule 4.5(a) Tax Matters
Schedule 4.5(b) Tax Jurisdictions
Schedule 4.6 Real Property Matters
Schedule 4.6(e) Real Property Repairs
Schedule 4.7 Exceptions to Title
Schedule 4.8 Intellectual Property Matters
Schedule 4.9(a) Certified Financial Statements
Schedule 4.9(b) Accounts Receivable Exceptions
Schedule 4.9(c) Inventory Exceptions
Schedule 4.10 Employee Benefit Plans
Schedule 4.11(a) List of Certain Employees and Contracts
Schedule 4.11(b) Immigration Matters
Schedule 4.11(c) Terminated Employees
Schedule 4.12 Insurance
Schedule 4.13(a) Material Contracts
Schedule 4.15 Litigation
Schedule 4.16 Noncompliance with Law
Schedule 4.17(a) Lists of Permits, Licenses and Authorizations
Schedule 4.17(b) Permits, Licenses, Etc. Lacking
Schedule 4.18(a) Notice of Failure to Comply with Environmental Laws
Schedule 4.18(b) Disposal of Hazardous Materials
Schedule 4.18(c) List of Hazardous Waste Disposal Facilities
and Transporters
Schedule 4.18(d) Underground Storage Tanks
Schedule 4.19 Product Warranties
Schedule 4.20 Customers
Schedule 5.3 Purchaser Violations and Conflicts; Consents
Schedule 8.4 Permitted Pre-Closing Actions of Seller
Schedule 8.8(a) Key Employee List
Schedule 9.3(b) AOL-Type Retained Liabilities
EXHIBITS:
Exhibit 2.4 Form of Assumption Agreement
Exhibit 8.5 Forms of Press Release
SCHEDULE 9.3(b)
"AOL-Type Retained Liabilities" shall mean Retained
Liabilities which meet all of the following tests:
(1) they were incurred in the ordinary course of
operating the Business;
(2) they are not Indebtedness (except Indebtedness to any
trade creditor to the extent that it is included as a
Assumed Operating Liability on the final Closing Date
Statement); and
(3) they do not fall within the types of Retained
Liability included within Paragraphs (b), (c), (f), (h),
(i) and (j) of Section 2.4 of the Agreement; provided,
however, that so long as the other tests of this
Schedule 9.3(b) are met:
(x) with respect to a Retained Liability included
within Paragraph (c) of Section 2.4, if any such
Retained Liability relates to the Accounts
Receivable it shall be an AOL-Type Retained
Liability (it being understood that this does not
make Purchaser obligated to pay Seller if any
Accounts Receivable are not collected); and
(y) with respect to a Retained Liability included
within Paragraph (h) of Section 2.4, if any such
Retained Liability does not give rise to a
Proceeding, it shall be an AOL-Type Retained
Liability.
(4) they do not fall within the types of Retained
Liabilities included within Paragraph (g) of Section 2.4
of the Agreement but only to the extent that said
Paragraph (g) relates to a violation of Environmental
Laws.
