Execution Copy
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ASSET PURCHASE AGREEMENT
Dated as of July 12, 2001
By and Among
NV Acquisition LLC,
NuVisions Manufacturing, Inc.
and
Nu Horizons Electronics Corporation
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TABLE OF CONTENTS
1. Definitions....................................................... 1
2. Acquisition of Assets by Buyer.................................... 8
2.1. Purchase and Sale of Assets................................. 8
2.2. Excluded Assets............................................. 9
2.3. Assumption of Liabilities................................... 10
2.4. Liabilities Not Assumed..................................... 11
2.5. Purchase Price.............................................. 12
2.6. Purchase Price Adjustment................................... 13
2.7. The Closing................................................. 14
2.8. Deliveries at the Closing................................... 14
2.9. Purchase Price Allocation................................... 14
3. Representations and Warranties of the Seller and the Stockholder.. 14
3.1. Organization of the Company................................. 14
3.2. Ownership of the Company.................................... 14
3.3. Authorization of Transaction................................ 15
3.4. Noncontravention............................................ 15
3.5. Brokers' Liabilities........................................ 15
3.6. Title to Assets............................................. 15
3.7. All Assets Necessary to Conduct Business.................... 15
3.8. Subsidiaries................................................ 15
3.9. Financial Statements........................................ 16
3.10. Absence of Changes.......................................... 16
3.11. Absence of Undisclosed Liabilities.......................... 17
3.12. No Material Adverse Effect.................................. 18
3.13. Taxes....................................................... 18
3.14. Property, Plant and Equipment............................... 19
3.15. Intellectual Property....................................... 19
3.16. Inventories................................................. 21
3.17. Contracts................................................... 21
3.18. Insurance................................................... 23
3.19. Litigation.................................................. 23
3.20. Product Warranties; Defects; Liability...................... 23
3.21. Employees................................................... 23
3.22. Employee Benefit Plans...................................... 23
3.23. Environment, Health, and Safety............................. 24
3.24. Affiliated Transactions..................................... 25
3.25. Distributors, Customers, Suppliers.......................... 25
3.26. No Illegal Payments and Compliance with Law................. 25
3.27. Books and Records........................................... 26
3.28. Consents.................................................... 26
3.29. Accredited Investor......................................... 26
3.30. Unregistered Securities..................................... 26
3.31. Disclosure.................................................. 27
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4. Representations and Warranties of the Buyer........................ 27
4.1. Organization of the Buyer.................................... 27
4.2. Authorization of Transaction................................. 27
4.3. Noncontravention............................................. 27
4.4. Brokers' Fees................................................ 28
4.5. Litigation................................................... 28
4.6. Bankruptcy................................................... 28
4.7. Due Diligence................................................ 28
4.8. Disclosure................................................... 28
5. Covenants.......................................................... 28
5.1. General...................................................... 28
5.2. Notices and Consents......................................... 29
5.3. Operation of Business........................................ 29
5.4. Preservation of Business..................................... 29
5.5. Full Access.................................................. 29
5.6. Notice of Developments....................................... 29
5.7. No Solicitation.............................................. 29
5.8. Access to Records after Closing.............................. 30
5.9. Transfer Taxes............................................... 31
5.10. Employee Benefits............................................ 31
5.11. Transfer Notices............................................. 33
5.12. Change of Name............................................... 33
5.13. Further Assurances........................................... 33
5.14. Transfer of Assets........................................... 34
5.15. License with Lemelson Foundation............................. 34
5.16. Xxxxxx Xxxxxxx Fee........................................... 34
5.17. Subordination Agreement...................................... 34
6. Conditions to Obligation to Close.................................. 34
6.1. Conditions to Obligation of the Buyer........................ 34
6.2. Conditions to Obligations of the Seller and the Stockholder.. 36
7. Confidentiality.................................................... 37
8. Noncompetition..................................................... 38
9. Indemnification.................................................... 38
9.1. Survival of Representations and Warranties................... 38
9.2. Indemnity by the Seller and the Stockholder.................. 39
9.3. Indemnity by Buyer........................................... 40
9.4. Matters Involving Third Parties.............................. 40
9.5. Recourse Against Escrowed Funds.............................. 41
10. Termination........................................................ 41
10.1. Termination of Agreement..................................... 41
10.2. Effect of Termination........................................ 42
11. Miscellaneous...................................................... 42
11.1. Press Releases and Public Announcements...................... 42
11.2. No Third Party Beneficiaries................................. 43
11.3. Entire Agreement............................................. 43
11.4. Succession and Assignment.................................... 43
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11.5. Counterparts......................................... 43
11.6. Headings............................................. 43
11.7. Notices.............................................. 43
11.8. Governing Law........................................ 44
11.9. Amendments and Waivers............................... 44
11.10. Severability......................................... 45
11.11. Expenses............................................. 45
11.12. Construction......................................... 45
11.13. Incorporation of Exhibits and Schedules.............. 46
11.14. Specific Performance................................. 46
11.15. Consent to Jurisdiction.............................. 46
11.16. Waiver of Jury Trial................................. 46
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Exhibits
A-1 - Form of Escrow Agreement
A-2 - Form of Subordinated Promissory Note
A-3 - Form of Xxxx of Sale
A-4 - Form of Warrant
B - Form of Assignment and Assumption Agreement
C - Financial Statements
D - Projections
E - Form of Opinion of Blau, Kramer, Wactlar and Xxxxxxxxx
F - Commitment Letters/Agreements
G - Form of Employment Contract
H - Form of Transition Services Agreement
I - Form of Stockholders Agreement
J - Form of Opinion of Ropes & Xxxx
Schedules
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2.1(b) - Leases
2.1(c) - Licenses
2.1(d) - Intellectual Property
3.4(a) - Noncontravention
3.7 - Necessary Assets
3.8 - Subsidiaries
3.10 - Absence of Changes
3.13 - Taxes
3.14(b)- Real Property Leases
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3.15(b)- Past Conflict with Third-Party Intellectual Property Rights
3.15(c)- Patents/Registrations/Trade Names/Licences to Third Parties
3.15(d)- Permissible Use of Third-Party Intellectual Property
3.15(e)- Current/Future Conflict with Third-Party Intellectual Property
Rights
3.16 - Inventories
3.17 - Contracts
3.18 - Insurance
3.19 - Litigation
3.20 - Product Warranties
3.22(a)- Employee Benefit Plans
3.23 - Release/Storage of Chemical Substances/Hazardous Waste
3.24 - Affiliated Transactions
3.25 - Customers and Suppliers
3.28 - Consents
5.10(a)- Employees to be Transferred
5.14 - Transfer of Assets
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") dated as of July 12, 2001,
by and among NV Acquisition LLC, a Delaware limited liability company (the
"Buyer"), NuVisions Manufacturing, Inc., a Massachusetts corporation (the
"Company" or the "Seller") and Nu Horizons Electronics Corporation, a Delaware
corporation (the "Stockholder"). The Buyer, the Seller and the Stockholder are
collectively referred to herein as the "Parties."
This Agreement contemplates a transaction in which the Buyer will purchase
certain of the assets owned by, or used in connection with, the operation of the
Company's printed circuit boards and other electronic manufacturing services
business (the "Business") in consideration of the Purchase Price (as defined
below).
Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
1. Definitions.
"Acquired Assets" has the meaning set forth in Section 2.1.
"Acquired Intellectual Property" means all Intellectual Property included
in the Acquired Assets.
"Action" means any claim, action, cause of action or suit (in contract or
tort or otherwise), litigation, arbitration, investigation, hearing, charge,
complaint, demand, notice or proceeding to, from, by or before any Governmental
Authority.
"Affiliate" means, as to any specified Person at any time, (i) each Person
directly or indirectly controlling, controlled by or under direct or indirect
common control with such specified Person at such time, (ii) each Person who is
or has been within two years prior to the time in question an officer, director
or direct or indirect beneficial holder of at least 10% of any class of the
outstanding capital stock of such specified Person and the Members of the
Immediate Family of each such officer, director or holder (and, if such
specified Person is a natural person, of such specified Person) and (iii) each
Person of which such specified Person or an Affiliate (as defined in clauses (i)
or (ii) above) thereof shall, directly or indirectly, beneficially own at least
10% of any class of outstanding capital stock or other evidence of beneficial
interest at such time.
"Agreement" has the meaning set forth in the preamble.
"AAA" has the meaning set forth in Section 11.15(a).
"Assumed Liabilities" has the meaning set forth in Section 2.3.
"Assumed Product Warranty Liabilities" has the meaning set forth in Section
2.3(d).
"Business" has the meaning set forth in the preamble.
"Business Day" means any day on which banking institutions in Boston,
Massachusetts are open for the purpose of transacting business.
"Buyer" has the meaning set forth in the preamble.
"Buyer's Knowledge" means the actual knowledge of the Buyer after
reasonable investigation.
"By-laws" means, with respect to any Person (other than an individual), all
by-laws relating to such Person, as from time to time in effect.
"Charter" means the certificate or articles of incorporation or
organization, statute, constitution, joint venture, limited liability company or
partnership agreement or articles or other charter documents of any Person
(other than an individual), each as from time to time in effect.
"Chemical Substance" means any chemical substance, material or waste which
is regulated or may give rise to Liability under any Environmental Law, as now
in effect, including any (i) pollutant, contaminant, irritant, chemical, raw
material, intermediate, product, by-product, slag, construction debris; (ii)
industrial, solid, liquid or gaseous toxic or hazardous substance, material or
waste, (iii) petroleum or any fraction thereof; (iv) asbestos or asbestos-
containing material; (v) polychlorinated biphenyl; and (vi) chlorofluoracarbons.
"Closing" has the meaning set forth in Section 2.7.
"Closing Date" has the meaning set forth in Section 2.7.
"Code" means the federal Internal Revenue Code of 1986 or any successor
statute, and the rules and regulations thereunder, and in the case of any
referenced section of any such statute, rule or regulation, any successor
section thereto, collectively and as from time to time amended and in effect.
"Company" has the meaning set forth in the preamble.
"Company Plan" is defined in Section 3.22.
"Company Takeover Proposal" means (i) any proposal or offer for a merger,
consolidation, dissolution, recapitalization or other business combination
involving the Company, (ii) any proposal for the issuance by the Company of over
20% of its equity securities as consideration for the assets or securities of
another person or (iii) any proposal or offer to acquire in any manner, directly
or indirectly, over 20% of the equity securities or consolidated total assets of
the Company, in each case other than pursuant to the Transactions.
"Confidential Information" means any and all information concerning the
Business other than that information which is already generally or readily
obtainable by the public or is publicly known or becomes publicly known through
no fault of the Company or the Stockholder.
"Contracts" has the meaning set forth in Section 2.1(f).
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"Contractual Obligation" means, with respect to any Person, any contract,
agreement, deed, mortgage, lease, license, commitment, undertaking, arrangement
or understanding, written or oral, or other document or instrument, including
any document or instrument evidencing or otherwise relating to any Debt but
excluding the Charter and By-laws of such Person, to which or by which such
Person is a party or otherwise subject or bound or to which or by which any
property or right of such Person is subject or bound.
"Debt" of any Person means all obligations of such Person (i) for borrowed
money, (ii) evidenced by notes, bonds, debentures or similar instruments, (iii)
for the deferred purchase price of goods or services (other than trade payables
or accruals incurred in the Ordinary Course of Business), (iv) under capital
leases and (v) in the nature of Guarantees of the obligations described in
clauses (i) through (iv) above of any other Person.
"Employee Benefit Plan" means any (a) Employee Pension Benefit Plan, (b)
Employee Welfare Benefit Plan, (c) material fringe benefit plan or program or
(d) profit sharing, bonus, stock option, stock purchase, equity, stock
appreciation, deferred compensation, incentive, severance plan or other benefit
plan, program or arrangement, whether covering a single individual or a group of
individuals.
"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).
"Environment" means soil, land surface or subsurface strata, real property,
surface waters (including navigable waters, ocean waters, streams, ponds,
drainage basins and wetlands), groundwater, water body sediments, drinking water
supply, stream sediments, ambient air (including indoor air), plant and animal
life and any other environmental medium or natural resource.
"Environmental Laws" mean the Comprehensive Environmental Response,
Compensation and Liability Act, the Resource Conservation and Recovery Act, the
Clean Air Act, the Federal Water Pollution Control Act, the Emergency Planning
and Community Right to Know Act, the Oil Pollution Act, the Toxic Substances
Control Act, each as amended, as now in effect, and any other Legal Requirement,
as now in effect, relating to: (a) the Release, containment, removal,
remediation, response, cleanup or abatement of any sort of any Chemical
Substance; (b) the manufacture, generation, formulation, processing, labeling,
distribution, introduction into commerce, use, treatment, handling, storage,
recycling, disposal or transportation of any Chemical Substance; (c) exposure of
persons, including employees, to any Chemical Substance; or (d) the pollution,
protection or clean up of the Environment.
"Environmental Liabilities and Costs" means all Losses incurred: (i) to
comply with any Environmental Law as in effect on or prior to the Closing; (ii)
as a result of a Release of any Chemical Substance that gives rise to a duty to
remediate; or, (iii) as a result of any environmental contamination present at,
created by or arising out of the past or present operations of the Company or
the Stockholder.
"Escrow Agreement" has the meaning set forth in Section 2.5.
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"Escrowed Funds" has the meaning set forth in Section 2.5.
"Excluded Assets" has the meaning set forth in Section 2.2.
"Financial Statements" has the meaning set forth in Section 3.9.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"Governmental Authority" means any United States federal, state or local or
any foreign government, governmental authority, regulatory or administrative
agency, governmental commission, court or tribunal (or any department, bureau or
division thereof) or any arbitral body.
"Guarantee" means (i) any guarantee of the payment or performance of, or
any contingent obligation in respect of, any Debt or other obligation of any
other Person, (ii) any other arrangement whereby credit is extended to one
obligor on the basis of any promise or undertaking of another Person (A) to pay
the Debt or other obligation of such obligor, (B) to purchase any obligation
owed by such obligor, (C) to purchase or lease assets (other than inventory in
the Ordinary Course of Business) under circumstances that would enable such
obligor to discharge one or more of its obligations or (D) to maintain the
capital, working capital, solvency or general financial condition of such
obligor and (iii) any liability as a general partner of a partnership or as a
venturer in a joint venture in respect of indebtedness or other obligations of
such partnership or venture.
"Hired Employees" has the meaning set forth in Section 5.10(a).
"Indemnified Party" has the meaning set forth in Section 9.4(a).
"Indemnifying Party" has the meaning set forth in Section 9.4(a).
"Intellectual Property" means the entire right, title and interest in and
to all proprietary rights of every kind and nature, including patents,
copyrights, Trademarks, mask works, trade secrets and proprietary information,
all applications for any of the foregoing, and any Contractual Obligations
granting rights related to the foregoing (i) subsisting in, covering, reading
on, directly applicable to or existing in the Products or Technology, including
all Intellectual Property identified in Schedule 2.1(d); (ii) that are owned,
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licensed or controlled in whole or in part by the Seller, and relate to the
Business; or (iii) that are used in the development, manufacture, sales,
marketing or testing of the Products.
"Intercompany Liabilities" has the meaning set forth in Section 2.4(l).
"Leases" has the meaning set forth in Section 2.1(b).
"Legal Requirement" means any applicable federal, state, local or foreign
law, statute, standard, ordinance, code, order, rule, regulation, resolution or
promulgation, or any order, judgment or decree of any Governmental Authority, or
any license, franchise, permit or similar
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right granted under any of the foregoing, or any similar provision having the
force and effect of law.
"Lemelson License" has the meaning set forth in Section 3.15(d).
"Liability" means any liability or obligation (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated, whether incurred or
consequential and whether due or to become due), including any liability for
Taxes.
"Lien" means any mortgage, pledge, lien, security interest, charge, adverse
or prior claim, encumbrance, restriction on transfer, conditional sale or other
title retention device or arrangement (including a capital lease), transfer for
the purpose of subjection to the payment of any Debt or other obligation, or
restriction on the creation of any of the foregoing, whether relating to any
property or right or the income or profits therefrom; provided, however, that
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the term "Lien" shall not include (i) statutory liens for Taxes to the extent
that the payment thereof is not in arrears or otherwise due, (ii) encumbrances
in the nature of zoning restrictions, easements, rights or restrictions of
record on the use of real property if the same do not materially impair its use
in the Business as currently conducted, (iii) statutory or common law liens to
secure landlords, lessors or renters under leases or rental agreements confined
to the premises rented to the extent that no payment or performance under any
such lease or rental agreement is in arrears or is otherwise due, (iv) deposits
or pledges made in connection with, or to secure payment of, worker's
compensation, unemployment insurance, old age pension programs mandated under
Legal Requirements or other social security and (v) statutory or common law
liens in favor of carriers, warehousemen, mechanics and materialmen, statutory
or common law liens to secure claims for labor, materials or supplies and other
like liens, which secure obligations to the extent that payment thereof is not
in arrears or otherwise due.
"Losses" has the meaning set forth in Section 9.2.
"Material Adverse Effect" means any change, circumstance or effect when
considered either singly or in the aggregate together with all other changes,
circumstances or effects, which has a material and adverse effect on the
business, operations, assets, prospects or condition, financial or otherwise, of
the Business, or materially and adversely affects the ability of the Seller or
the Stockholder to perform their respective obligations under this Agreement and
consummate the Transactions.
"Members of the Immediate Family," with respect to any individual, shall
mean each spouse, parent, aunt, uncle, brother, sister or child of such
individual, each spouse of any such Person, each child of any of the
aforementioned Persons, each trust created in whole or in part for the benefit
of one or more of the aforementioned Persons and each custodian or guardian of
any property of one or more of the aforementioned Persons.
"Most Recent Balance Sheet" means the balance sheet contained within the
Most Recent Financial Statements.
"Most Recent Financial Statements" means the audited Financial Statements
for the Most Recent Fiscal Year End.
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"Most Recent Fiscal Year End" has the meaning set forth in Section 3.9
below.
"Net Income" shall mean net income determined in accordance with GAAP.
"Net Operating Assets" means the sum of the Company's (i) current assets
(exluding cash and cash equivalents), (ii) property, plant and equipment and
(iii) other assets (excluding any reserves for Taxes) less the Company's current
liabilities (excluding Liabilities for Taxes and any Debt), all as determined in
accordance with GAAP.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Party" and "Parties" have the meanings set forth in the preamble.
"Person" means an individual, a partnership, a corporation, an association,
a joint stock company, a limited liability company, a trust, a joint venture, an
unincorporated organization, a Governmental Authority or any other entity of any
kind.
"Products" means all current products and services of the Company, any
subsequent versions of such products currently being developed, any products
currently being developed by the Company which are designed to supersede,
replace or function as a component of such products, and any upgrades,
enhancements, improvements and modifications to the foregoing.
"Projections" has the meaning set forth in Section 3.9(b).
"Release" means any actual, threatened or alleged spilling, leaking,
pumping, pouring, emitting, dispersing, emptying, discharging, injecting,
escaping, leaching, dumping, or disposing of any Chemical Substance into the
Environment that causes an Environmental Liability and Cost (including the
disposal or abandonment of barrels, containers, tanks or other receptacles
containing or previously containing any Chemical Substance).
"Representatives" has the meaning set forth in Section 5.7(a).
"Safety Laws" means any Legal Requirement relating to workplace health or
safety, including the Occupational Safety and Health Act, as amended, as now in
effect, relating to (a) exposure of employees to any Chemical Substance or (b)
the physical structure, use or condition of a building, facility, fixture or
other structure, including those relating to equipment or manufacturing
processes, or the management, use, storage, disposal, cleanup or removal of any
Chemical Substance.
"Safety Liabilities and Costs" means all Losses incurred to comply with any
Safety Law as in effect prior to the Closing or as a result of any health or
safety conditions present at, created by or arising out of the past or present
operations of the Seller.
"Securities Act" has the meaning set forth in Section 3.29.
"Seller" has the meaning set forth in the preamble.
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"Seller Note" has the meaning set forth in Section 2.5.
"Seller's Knowledge" means the actual knowledge of Xxxxxxx Xxxxxx, Xxxx
Xxxxxxx and Xxxxxx Xxxxxxxxx after reasonable investigation.
"Stockholder" has the meaning set forth in the preamble.
"Stockholder's Board" has the meaning set forth in Section 5.7(a).
"Subsidiary" means with respect to any Person, (i) any corporation at least
a majority of whose outstanding voting stock is owned, directly or indirectly,
by such Person or by one or more of its Subsidiaries, or by such Person and one
or more of its Subsidiaries; (ii) any general partnership, joint venture or
similar entity, at least a majority of whose outstanding partnership or similar
interests shall at the time be owned by such Person, or by one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries; and (iii)
any limited partnership of which such Person or any of its Subsidiaries is a
general partner. For the purposes of this definition, "voting stock" means
shares, interests, participations or other equivalents in the equity interest
(however designated) in such Person having ordinary voting power for the
election of a majority of the directors (or the equivalent) of such Person other
than shares, interests, participations or other equivalents having such power
only by reason of the occurrence of a contingency.
"Superior Company Proposal" means any proposal made by a third party to
acquire substantially all the equity securities or assets of the Company,
pursuant to a merger, a consolidation, a liquidation or dissolution, a
recapitalization or a sale of all or substantially all its assets, (i) on terms
which the Stockholder's Board determines to be superior from a financial point
of view to the holders of the Stockholder's common stock to the Transactions
(after consultation with the Company's financial advisor, which shall be Xxxxxx
Xxxxxxx or another comparable independent financial advisor), taking into
account all the terms and conditions of such proposal and this Agreement
(including any proposal by Buyer to amend the terms of the Transactions) and
(ii) that is reasonably capable of being completed, taking into account all
financial, regulatory, legal and other aspects of such proposal.
"Tax" or "Taxes" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Section
59A), customs duties, capital stock, franchise, profits, withholding, social
security (or similar, including FICA), unemployment, disability, real property,
personal 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, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Technology" means all inventions, copyrightable works, discoveries,
innovations, know-how, information (including ideas, research and development,
know-how, formulas, compositions, processes and techniques, technical data,
designs, drawings, specifications, customer and supplier lists, pricing and cost
information, business and marketing plans and
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proposals, documentation, and manuals), computer software, computer hardware,
integrated circuits and integrated circuit masks , electronic, electrical and
mechanical equipment and all other forms of technology, including improvements,
modifications, derivatives or changes, whether tangible or intangible, embodied
in any form, whether or not protectible or protected by patent, copyright, mask
work right or trade secret law that (i) were conceived, developed, or reduced to
practice by or for the Seller or, in the case of the Stockholder, in connection
with the Business, or (ii) are incorporated, embodied or used in or are used to
develop, manufacture, test, market, distribute or maintain and support the
Products.
"Third Party Claim" has the meaning set forth in Section 9.4(a).
"Trademarks" means any trademarks, service marks, trade dress, and logos,
together with all translations, adaptations, derivations, and combinations
thereof and including all goodwill associated therewith.
"Transactions" means the transactions contemplated by this Agreement.
"Transferred Employees" has the meaning set forth in Section 5.10(a).
"Transition Services Agreement" has the meaning set forth in Section
6.1(j).
"WARN" means the Worker Adjustment and Retraining Act of 1988, as from time
to time in effect.
"Warrants" has the meaning set forth in Section 2.5.
2. Acquisition of Assets by Buyer.
2.1. Purchase and Sale of Assets. Subject to and upon the other terms and
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conditions contained herein, the Seller and the Stockholder agree that the
Seller will sell and transfer to the Buyer, and the Buyer agrees to purchase
from the Seller at the Closing, the following assets of the Seller, other than
the Excluded Assets, (collectively, the "Acquired Assets") free and clear of any
Lien whatsoever:
(a) All assets of the Company reflected on the Most Recent Balance
Sheet and all assets of the Company that have been acquired since the date
of Most Recent Balance Sheet (other than assets reflected on the Most
Recent Balance Sheet that have been disposed of in the Ordinary Course of
Business since the date of the Most Recent Balance Sheet) (collectively,
the "Balance Sheet Assets"), including:
(i) all real property, improvements, fixtures and fittings
thereon, easements, rights-of-way, and other appurtenant rights
thereto (such as appurtenant rights in and to public streets);
(ii) all tangible personal property (such as machinery,
equipment, control systems, inventories, raw materials, supplies,
manufactured and purchased parts, works in progress, finished goods,
computer and office equipment, furniture, automobiles, trucks,
tractors, trailers, tools, jigs and dies);
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(iii) all accounts receivable, notes receivable, $160,000 of cash
and cash equivalents, securities, prepaid expenses and other current
assets of the Company;
(b) All rights with respect to leasehold interests and subleases
relating to real and personal property, including the rights under the
leases listed on Schedule 2.1(b) (the "Leases");
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(c) All rights under all licenses (other than as set forth in Section
2.1(d)), permits, authorizations, orders, registrations, certificates,
approvals, consents and franchises or any pending applications relating to
any of the foregoing, including all governmental permits, licenses,
authorizations, approvals and consents described in Schedule 2.1(c);
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(d) All Intellectual Property, goodwill associated therewith,
licenses and sublicenses granted in respect thereto and rights thereunder,
remedies against infringements thereof and rights to protection of interest
therein, including the Intellectual Property described in Schedule 2.1(d);
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(e) All customer, distributor, supplier and mailing lists;
(f) All rights under Contractual Obligations (the "Contracts");
(g) All of the Company's claims, deposits, prepayments, refunds,
causes of action, choses in action, rights of recovery, rights of set off
and rights of recoupment;
(h) All business and financial records, books, ledgers (including, to
the extent that the Buyer has obtained the necessary software licenses, an
electronic copy of the general ledger maintained for the Company), files,
plans, documents, correspondence, lists, plats, architectural plans,
drawings, notebooks, specifications, creative materials, advertising and
promotional materials, marketing materials, studies, reports, equipment
repair, maintenance or service records, whether written or electronically
stored or otherwise recorded, excluding, however, the corporate minute
books, stock ledgers, checkbooks, canceled checks, tax returns, reports,
statements and other documents related to taxes and necessary to support
any tax and government audit (provided that the Seller and the Stockholder
shall provide access to any such documents to Buyer to the extent
reasonably necessary in connection with the operation of the Business, will
maintain such records for a period of five years from the date hereof, or,
if the Seller or the Stockholder desires to destroy such records, will
notify Buyer and give Buyer an opportunity to take possession thereof);
(i) All of the Seller's rights to the use of the names Nu Visions, Nu
Visions Manufacturing, Inc., NuVisions Manufacturing, Inc. and any
variations thereof; and
(j) All other assets of the Seller of every kind and description,
tangible or intangible.
2.2. Excluded Assets. There shall be excluded from the Acquired Assets to
---------------
be sold, assigned, transferred, conveyed and delivered to Buyer hereunder, and
to the extent in existence
-9-
on the Closing Date, there shall be retained by the Seller, the following
assets, properties and rights (collectively, the "Excluded Assets"):
(a) non-cash reserves for Taxes;
(b) the corporate minute books, stock ledgers, checkbooks, canceled
checks, tax returns, reports, statements and other documents related to
taxes and necessary to support any tax and government audit (provided that
the Seller and the Stockholder shall provide access to any such documents
to Buyer to the extent reasonably necessary in connection with the
operation of the Business, will maintain such records for a period of five
years from the date hereof, or, if the Seller or the Stockholder desires to
destroy such records, will notify Buyer and give Buyer an opportunity to
take possession thereof), as well as a copy of any financial books and
records of the Company which Seller or the Stockholder reasonably believes
will be required by it for the purpose of performing any of its accounting,
or other administrative functions which are performed in the Ordinary
Course of Business;
(c) all rights to refunds of Taxes paid by the Seller for the period
prior to and following the Closing Date;
(d) all rights under the Lemelson License other than the rights that
may be transferred to Buyer under Section 3(i) of such Lemelson License
which shall be part of the Acquired Assets; and
(e) all cash and cash equivalents in excess of $160,000.
2.3. Assumption of Liabilities. On the terms and subject to the conditions
-------------------------
set forth herein and except as contemplated by Section 2.4 hereof, from and
after the Closing, the Buyer will assume and satisfy or perform when due only
the following Liabilities of the Company (the "Assumed Liabilities"):
(a) (i) all Liabilities of the Company to the extent recorded on the
face of the Most Recent Balance Sheet (rather than in any notes thereto);
and (ii) all Liabilities of the Company incurred after the Most Recent
Balance Sheet in the Ordinary Course of Business that would, if incurred
during the last fiscal year, be required in accordance with GAAP to be
recorded on the face of the Most Recent Balance Sheet (rather than in any
notes thereto), in each case, solely to the extent recorded on the Closing
Statement used to determine the final Purchase Price Adjustment;
(b) all Liabilities of the Company under the Leases listed in
Schedule 2.1(b) arising after the Closing Date;
---------------
(c) the Stockholder's guarantee of the Company's obligations under
the Lease Agreement dated as of November 11, 1997 by and between East
Springfield Industrial Buildings Corporation and Nu Visions Manufacturing,
Inc. for land and building at 000 Xxxxxxx Xxxxx, Xxxxxxxxxxx, XX; and
-10-
(d) Liabilities for returns of products sold prior to Closing by the
Company under warranty and for repairs of such products to the extent such
returns and repairs are consistent with the Company's Ordinary Course of
Business and do not exceed $100,000 within six months of the Closing Date
(such Liabilities being the "Assumed Product Warranty Liabilities").
2.4. Liabilities Not Assumed. Except as expressly set forth in this
-----------------------
Agreement, the Buyer will not assume or perform any Liabilities not specifically
contemplated by Section 2.3 hereof nor any of the following Liabilities (whether
or not contemplated by Section 2.3):
(a) any Liability of the Seller or the Stockholder for Taxes whether
or not relating to the Business and whether or not incurred prior to the
Closing and any Liability of the Seller or the Stockholder for the unpaid
Taxes of any Person under Treasury Regulation 1.1502-6 (or any similar
provision of state, local, or foreign law) as a transferee or successor, by
contract, or otherwise;
(b) any Liability of the Company to indemnify any Person by reason of
the fact that such Person was a director, officer, employee, or agent of
the Company or was serving at the request of such entity as a partner,
trustee, director, officer, employee, or agent of another entity;
(c) any Liability of the Seller or the Stockholder arising as a
result of any legal or equitable action or judicial or administrative
proceeding initiated at any time in respect of anything done, suffered to
be done or omitted to be done by such Party or any of its directors,
officers, employees or agents, excluding any actions or omissions by
Xxxxxxx Xxxxxx in his capacity as an employee or director of the Buyer
after the Closing;
(d) any Liability of the Seller or the Stockholder for costs and
expenses incurred in connection with this Agreement, the making or
performance of this Agreement and the Transactions;
(e) any Liability of the Seller or the Stockholder under this
Agreement;
(f) any Liability relating to or arising out of products manufactured
or sold or services rendered by the Company prior to the Closing Date,
other than the Assumed Product Warranty Liabilities;
(g) any Liability of the Seller or the Stockholder arising out of any
Employee Benefit Plan currently or formerly established or maintained by
the Company or to which the Company contributes or has contributed
(including (i) any Liability relating to the termination of any such plan,
(ii) any Liability that the Seller or the Stockholder is required to retain
by law to provide former employees so-called COBRA continuation coverage to
the extent provided in Section 5.10 of this Agreement, and (iii) any
Liability in respect of medical and other benefits for existing and future
retirees that accrued prior to the Closing Date);
-11-
(h) any Liability of the Seller or the Stockholder in respect of
work-related employee injuries that occurred prior to the Closing Date or
worker's compensation claims that accrued prior to the Closing Date;
(i) any Liability pertaining to the Company or the Business which
arises out of or results from the Release prior to Closing of any Chemical
Substance and/or noncompliance by Seller prior to the Closing Date with any
Legal Requirements as in effect prior to the Closing (including any
Environmental Liabilities and Costs and Safety Liabilities and Costs
whether or not arising out of or resulting from the Seller's or the
Stockholder's noncompliance with Environmental Laws or Safety Laws, except
to the extent that such Liability results from an action of the Buyer but
excluding any actions of Buyer taken to remedy any Release prior to the
Closing Date or any non-compliance prior to the Closing Date with any Legal
Requirements as in effect prior to the Closing);
(j) any Liability of the Seller or the Stockholder (i) under any
leases not listed on Schedule 2.1(b) or (ii) arising from any breach or
---------------
default under any Lease occurring prior to the Closing Date;
(k) any Liability of the Seller or the Stockholder in respect of
Environmental Liabilities and Costs arising out of any condition which
existed prior to the Closing and constitutes a violation of or gives rise
to a duty to remediate under any Environmental Law;
(l) any Liability of the Company to the Stockholder or any Affiliate
of the Stockholder (the "Intercompany Liabilities");
(m) any Liability of the Seller or the Stockholder in respect of debt
for borrowed money; and
(n) any Liability of the Seller or the Stockholder to any broker,
finder, investment bank or similar Person with respect to the Transactions.
2.5. Purchase Price. The Buyer agrees to assume the Assumed Liabilities
--------------
and to pay to the Seller at the Closing an aggregate amount (as adjusted
pursuant to Section 2.6, collectively the "Purchase Price") equal to $31,563,000
consisting of: (i) $28,563,000 in cash payable by wire transfer to the Company
in accordance with written instructions of the Company given to the Buyer at
least two Business Days prior to the Closing; (ii) $1,000,000 in cash (the
"Escrow Funds") payable to an escrow agent to be mutually agreed upon by the
Parties, to be held and released in accordance with the terms of the Escrow
Agreement in substantially the form attached hereto as Exhibit A-1 (the "Escrow
Agreement"); and (iii) the delivery to Seller of a subordinated eight percent
promissory note substantially in the form of Exhibit A-2 attached hereto (the
"Seller Note") in the original principal amount of $2,000,000 and related
warrants substantially in the form of Exhibit A-4 attached hereto (the
"Warrants") to Purchase a number of shares of PCEMS, Inc.'s common stock equal
to two percent (2%) of its issued and outstanding shares of Class A Common Stock
at the time of the issuance of the Warrants at a per share price equal to the
price per share of PCEMS, Inc.'s Class A Common Stock paid by the Investors (as
defined in the Stockholders Agreement) at the Closing.
-12-
2.6. Purchase Price Adjustment.
-------------------------
(a) The Purchase Price shall be decreased by an amount, if any, by
which the Company's Net Operating Assets as of the Closing Date, as
reflected on the Closing Statement, are less than $21,963,000. The Purchase
Price shall be increased by an amount, if any, equal to the product of: (i)
the amount by which the Company's Net Operating Assets as of the Closing
Date, as reflected on the Closing Statement, exceed $21,963,000 multiplied
by (ii) 0.33. In addition, the Purchase Price shall be increased by an
amount, if any, equal to the product of: (x) the amount of the Company's
Net Income for the period from February 28, 2001 through the Closing Date
multiplied by (y) 0.415. The aggregate of the amounts set forth in this
paragraph shall be referred to herein as the "Purchase Price Adjustment"
and shall be determined and paid as set forth in clause (b).
(b) Within thirty days following the Closing Date, the Buyer shall
prepare and deliver to the Seller and the Stockholder a closing statement
that shall consist of (i) a balance sheet (which shall exclude the Excluded
Assets and include only the Assumed Liabilities) of the Company as of the
Closing Date and (ii) a statement of income of the Company for the period
from February 28, 2001 through the Closing Date, each prepared in
accordance with GAAP (other than the absence of footnotes) (as each of (i)
and (ii) may be adjusted in accordance with this paragraph, the "Closing
Statement"). Within twenty days following the delivery of the Closing
Statement by the Buyer to the Seller and the Stockholder, the Seller and
the Stockholder may object to any divergence from GAAP in the preparation
of the Closing Statement by giving a written notice to the Buyer specifying
in reasonable detail such divergences (an "Objection"). Buyer agrees to
cooperate with the Seller and the Stockholder to provide such Parties and
their certified public accountants information used to prepare the Closing
Statement and information relating thereto. If the Seller and the
Stockholder deliver an Objection, the Parties shall attempt to resolve such
Objection by negotiation. If the Parties are unable to resolve such
Objection within twenty days of delivery of the Objection, the Parties
shall, by mutual agreement, appoint one of the five largest firms of
independent certified public accountants or another firm of independent
certified public accountants who shall, at the joint expense of the Seller
and Stockholder, on the one hand, and Buyer, on the other hand, review the
unresolved divergences from GAAP specified in the Objection and determine,
based solely on such divergences from GAAP specified in the Objection,
whether any change in the Closing Statement is warranted. The finding of
such accounting firm shall be binding on the Parties and, to the extent
necessary, the Closing Statement shall be adjusted accordingly. Upon the
final determination of the Purchase Price Adjustment, the Party owing the
Purchase Price Adjustment shall deliver the Purchase Price Adjustment to
the other Party no later than five Business Days after such determination
in immediately available funds or in any other manner as reasonably
requested by the payee; provided, that if the Purchase Price Adjustment is
owed to the Buyer, it shall first be satisfied from the Escrowed Funds, if
any. The acceptance by the Buyer, on the one hand, and Seller and the
Stockholder, on the other hand, of the Purchase Price Adjustment shall not
constitute or be deemed to constitute a waiver of the rights of such Party
in respect of any other provision of this Agreement.
-13-
2.7. The Closing. The closing of the Transactions (the "Closing") shall
-----------
take place three business days after the closing conditions set forth in
Sections 6.1 and 6.2 hereof are satisfied or waived (or the applicable party
receives reasonable assurances that such conditions will have been satisfied by
such third business day) at the offices of Ropes & Xxxx in Boston,
Massachusetts, commencing at 10:00 a.m. eastern time on such third business day
or such other date as the Parties may mutually determine (the "Closing Date").
2.8. Deliveries at the Closing. At the Closing, the Seller and the
-------------------------
Stockholder will deliver to the Buyer properly executed and acknowledged, if
appropriate (i) the various certificates, instruments, and documents referred to
in Section 6.1 below, (ii) such other instruments of sale, transfer, conveyance
and assignment as the Buyer and its counsel may reasonably request, and (iii)
the Xxxx of Sale in the form attached hereto as Exhibit A-3. The Buyer will
execute, acknowledge (if appropriate), and deliver the Assignment and Assumption
Agreement in the form attached hereto as Exhibit B and will deliver the
consideration specified in Section 2.5 above. Simultaneously with such
delivery, the Seller and the Stockholder shall put Buyer in possession and
operating control of the Acquired Assets, free and clear of all Liens
whatsoever.
2.9. Purchase Price Allocation. Within 60 days following the Closing, the
-------------------------
Buyer, with the consent of the Seller (not to be unreasonably withheld), shall
allocate the purchase price among the Acquired Assets in accordance with Section
1060 of the Code and the Treasury Regulations promulgated thereunder. Such
allocation shall be amended to reflect any subsequent adjustments to the
purchase price. The Buyer, the Seller and the Stockholder shall file all Tax
Returns consistently with such allocation.
3. Representations and Warranties of the Seller and the Stockholder. The
----------------------------------------------------------------
Seller and the Stockholder jointly and severally represent and warrant to the
Buyer that the statements contained in this Section 3 are correct and complete
as of the date of this Agreement and, unless a date is specified in such
representation and warranty, will be correct and complete as of the Closing Date
(as though made then and as though the Closing Date were substituted for the
date of this Agreement throughout this Section 3).
3.1. Organization of the Company. The Company is a corporation duly
---------------------------
organized, validly existing and in good standing under the laws of The
Commonwealth of Massachusetts. The Stockholder is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Copies of the Charter and By-Laws of the Company, each as amended to date, have
been heretofore delivered to Buyer (or will be so delivered prior to the
Closing) and are (or will be) complete. The Company is qualified to do business
and is in good standing as a foreign corporation in each jurisdiction where the
nature of the activities conducted by it in the conduct of the Business or the
character of the property owned, leased or operated by it in the conduct of the
Business make such qualification necessary or appropriate except for those
jurisdictions where the failure to be so qualified has not had and will not have
a Material Adverse Effect.
3.2. Ownership of the Company. The Stockholder owns directly 95 shares of
------------------------
common stock of the Company and Xxxxxx Xxxxxx owns directly 5 shares of common
stock of the Company, which together constitute all of the outstanding shares of
capital stock of the
-14-
Company. No Person, other than the Stockholder and Xxxxxx Xxxxxx, has any direct
or indirect right, title or interest in the Company or any profits, earnings,
gains or losses with respect thereto.
3.3. Authorization of Transaction. Each of the Seller and the Stockholder
----------------------------
has the power and authority (including full corporate power and authority) to
execute and deliver this Agreement and to perform its obligations hereunder. All
corporate and other actions or proceedings to be taken by or on the part of each
of the Seller and the Stockholder to authorize and permit the execution and
delivery by such Parties of this Agreement and the instruments required to be
executed and delivered by such Parties pursuant hereto, the performance by such
Parties of their obligations hereunder, and the consummation by such Parties of
the Transactions, have been duly and properly taken. This Agreement has been
duly executed and delivered by each of the Seller and the Stockholder and is
enforceable against them.
3.4. Noncontravention. Neither the execution and the delivery of this
----------------
Agreement, nor the consummation of the Transactions (including the assignments
and assumptions referred to in Section 2 above), will (i) violate any Legal
Requirement to which the Seller or the Stockholder or any of their property are
subject or any provision of the Charter or By-laws of the Seller or the
Stockholder or (ii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
material Contractual Obligation to which the Company is a party or by which it
is bound or to which any of its assets are subject (or result in the imposition
of any Lien upon any of the Acquired Assets). Neither the Stockholder nor the
Company needs to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any Governmental Authority in order for
the Parties to consummate the Transactions (including the assignments and
assumptions referred to in Section 2 above), other than the authorizations,
consents or approvals set forth on Schedule 3.4(a) hereto, all of which shall be
---------------
obtained by the Closing.
3.5. Brokers' Liabilities. Neither the Seller nor the Stockholder has any
--------------------
Liability to any broker, finder, investment bank or similar agent with respect
to the Transactions for which the Buyer could become liable or obligated.
3.6. Title to Assets. The Seller has good and marketable title to, or a
---------------
valid and subsisting leasehold interest in, and the power to sell and transfer
to the Buyer, all of the Acquired Assets, free and clear of all Liens.
3.7. Assets Necessary to Conduct Business. The Acquired Assets, comprise
------------------------------------
all of the assets, properties and rights of every type and description, real,
personal, tangible and intangible used by the Company in, and, in the reasonable
opinion of the management of the Company, necessary to, the conduct of the
Company's business as currently conducted except, in each case, as set forth on
Schedule 3.7 hereto.
------------
3.8. Subsidiaries. Except as set forth on Schedule 3.8, the Company has no
------------ ------------
Subsidiaries and does not own, directly or indirectly, any capital stock of, any
partnership or other ownership interest in, or any other security issued by, any
other corporation, organization, association or entity.
-15-
3.9. Financial Statements.
--------------------
(a) Attached hereto as Exhibit C are the following financial
statements (collectively, the "Financial Statements"): (i) unaudited
consolidated balance sheets and statements of income, changes in
stockholders' equity, and cash flow as of and for the fiscal years ended
February 28, 1999 and February 29, 2000 for the Company and (ii) audited
consolidated balance sheets and statements of income, changes in
stockholders' equity and cash flows for the fiscal year ended February 28,
2001 (the "Most Recent Fiscal Year End") for the Company. The Financial
Statements (including the notes thereto) have been prepared in accordance
with GAAP applied on a consistent basis throughout the periods covered
thereby, are correct and complete and present fairly the financial
condition of the Company as of such dates and the results of operations of
the Company for such periods are consistent with the books and records of
the Company, subject, in the case of the unaudited financial statements, to
normal and recurring year end adjustments, which shall not be material in
the aggregate, and the absence of notes.
(b) Attached hereto as Exhibit D is the projected financial
information of the Company prepared by the Seller (the "Projections"). The
Projections were prepared in good faith, based on assumptions believed to
be reasonable, and represent the Seller's best estimate as of the date of
such Projections respecting the Company's projected financial performance
for the periods covered thereby (although the Sellers expressly disclaim
any assurance that such Projections will in fact be achieved).
3.10. Absence of Changes. Since February 28, 2001, the Company has
------------------
conducted its business only in the Ordinary Course of Business and except as set
forth on Schedule 3.10 there has not been:
-------------
(a) any sale, lease, transfer, or assignment of any of the Company's
assets, tangible or intangible, other than sales of inventory for a fair
consideration in the Ordinary Course of Business;
(b) any Contractual Obligation entered into other than in the
Ordinary Course of Business;
(c) any acceleration, termination, modification, or cancellation of
any material agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) to which the Company is a
party or by which it is bound;
(d) any creation or imposition of any Lien upon any of the Acquired
Assets;
(e) any capital expenditure (or series of related capital
expenditures) involving more than $25,000 singly or $100,000 in the
aggregate;
(f) any cancellation, compromise, waiver, or release of any right or
claim or Indebtedness (or series of related rights and claims);
(g) any settlement regarding any infringement of its rights to any
Intellectual Property;
-16-
(h) any dividend or distribution (whether in cash or in kind) or
repurchase, redemption or retirement of any capital stock of the Company;
(i) any threat or notification in writing or, to the Seller's
Knowledge, orally, that, and there has not been, one or more distributors,
customers or suppliers which are, individually or in the aggregate,
material that have terminated or intend to terminate or are considering
terminating their respective business relationships or have modified or
intend to modify such relationships with the Company, and the Seller has no
knowledge of any facts which would form the basis for such termination or
modification;
(j) any material damage, destruction, or loss (whether or not
covered by insurance) to the Company's property;
(k) any loan to, or any other transaction with, any of the
Company's directors, officers, and employees outside the Ordinary Course of
Business;
(l) any Contractual Obligation relating to employment entered into
(including any collective bargaining agreement), or modification of the
terms of any existing such Contractual Obligation;
(m) any modification or change in the employment terms for any of
the Company's directors, officers, and employees outside the Ordinary
Course of Business;
(n) any payment of any amount to any third party outside the
Ordinary Course of Business with respect to any Liability (excluding any
costs and expenses incurred or which may be incurred in connection with
this Agreement and the Transactions ) which would not constitute an Assumed
Liability if in existence as of the Closing;
(o) any modification or change in the application of GAAP from the
manner in which it was applied in the Most Recent Financial Statements;
(p) any other occurrence, event, incident, action, failure to act,
or transaction outside the Ordinary Course of Business involving the
Company; and
(q) the Company has not entered into any Contractual Obligation
with respect to any of the foregoing.
3.11. Absence of Undisclosed Liabilities. Except for Liabilities arising
----------------------------------
after the Closing Date under the Leases, the Company does not have any Liability
(and to the Seller's Knowledge there is no basis for any present or future
action, suit, proceeding, hearing, investigation, charge, complaint, claim, or
demand against it giving rise to any Liability), except for (i) Liabilities
reflected on the face of the Most Recent Balance Sheet (rather than in any notes
thereto) and (ii) Liabilities which have arisen after the date of the Most
Recent Balance Sheet in the Ordinary Course of Business (none of which
Liabilities results from, arises out of, relates to, is in the nature of, or was
caused by any material breach of contract, breach of warranty (other than the
Assumed Product Warranty Liabilities), tort, infringement, or violation of law),
in each case, solely to the extent reflected on the Closing Statement used to
determine the final Purchase Price Adjustment.
-17-
3.12. No Material Adverse Effect. Since the date of the Most Recent
--------------------------
Financial Statements, there has not been any Material Adverse Effect and to the
Seller's Knowledge no event has occurred or circumstances exist that could
reasonably be expected to result in such a Material Adverse Effect.
3.13. Taxes.
-----
(a) The Seller and the Stockholder have filed all Tax Returns that
they were required to file with respect to the Company's business. All such
Tax Returns were true, correct and complete. All Taxes (other than Taxes
not yet due) owed by the Seller and the Stockholder (whether or not shown
on any Tax Return) have been paid. Other than as set forth on Schedule
--------
3.13, the Seller and the Stockholder currently are not the beneficiary of
----
any extension of time within which to file any such Tax Return. No claim
has ever been made by an authority in a jurisdiction where the Seller or
the Stockholder does not file Tax Returns that the Company may be subject
to taxation by that jurisdiction. There are no liens or other encumbrances
on the assets of the Company that arose in connection with any failure (or
alleged failure) to pay any Tax.
(b) The Seller and the Stockholder have withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor, stockholder, or
other third party with respect to the Company's business.
(c) There is no basis for any authority to assess any additional
Taxes with respect to the Company's business for any period for which Tax
Returns have been filed. There is no dispute, audit, investigation,
proceeding or claim concerning any Liability with respect to Taxes of the
Company either (i) claimed or raised by any Governmental Authority in
writing or (ii) to the Seller's Knowledge, threatened based upon contact
with any such Governmental Authority. Neither the Seller nor the
Stockholder has waived any statute of limitations in respect of Taxes
related to the Business or agreed to any extension of time with respect to
a Tax assessment or deficiency related to the Business.
(d) The Seller has not made any payments, is not obligated to make
any payments, and is not a party to any Agreement that under certain
circumstances could obligate it to make any payments that will not be
deductible under Code Sections 162, 280G or 404.
(e) The unpaid Taxes of the Company (i) did not, as of the date of
the Most Recent Balance Sheet included in the Financial Statements, exceed
the reserve for Tax Liability (rather than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) set
forth on the face of Financial Statements (rather than in any notes
thereto), and (ii) do not exceed that reserve as adjusted for the passage
of time through the Closing Date in accordance with the past custom and
practice of the Seller and the Stockholder.
-18-
3.14. Property, Plant and Equipment.
-----------------------------
(a) The Seller owns no real property .
(b) Schedule 3.14(b) lists all real property leased or subleased to
----------------
Sellers which is used to conduct the Company's business. The Company has
delivered to the Buyer complete copies of the leases and subleases listed
in Schedule 3.14(b) (as amended to date) which such leases and subleases
----------------
have not been amended or modified since the date thereof. With respect to
each lease and sublease listed in Schedule 3.14(b):
----------------
(i) the lease or sublease is legal, valid, binding,
enforceable, and in full force and effect;
(ii) subject to obtaining necessary consents as disclosed on
Schedule 3.28, the lease or sublease will continue to be legal,
-------------
valid, binding, enforceable, and in full force and effect on
substantially identical terms following the consummation of the
Transactions (including the assignments and assumptions referred to
in Section 2 above);
(iii) the Company is not and, to the Seller's Knowledge, no
other party to the lease or sublease is in breach or default, and no
event has occurred which, with notice or lapse of time, would
constitute a breach or default or permit termination, modification,
or acceleration thereunder;
(iv) the Company has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the
leasehold or subleasehold;
(v) all facilities leased or subleased thereunder have
received all approvals of Governmental Authorities (including
licenses and permits) required in connection with the operation
thereof and have been operated and maintained in accordance in all
material respects with all Legal Requirements as in effect on or
prior to the Closing Date; and
(vi) all facilities leased or subleased thereunder are supplied
with utilities and other services necessary for the operation of
said facilities.
3.15. Intellectual Property.
---------------------
(a) The Company owns or has the right to use pursuant to a
Contractual Obligation all Intellectual Property necessary for or used in
the operation of the Business as presently conducted. Subject to obtaining
all necessary consents and assignments as disclosed in Schedule 3.28, each
-------------
item of Acquired Intellectual Property will be owned or available for use
by the Buyer on substantially identical terms and conditions immediately
subsequent to the Closing hereunder.
(b) Except as set forth on Schedule 3.15(b), the Company has not, to
----------------
the Seller's Knowledge, interfered with, infringed upon, misappropriated,
or otherwise come into conflict with any Intellectual Property rights of
third parties in connection with the
-19-
conduct of the Business, and the Company has never received any charge,
complaint, claim, demand, or notice alleging any such interference,
infringement, misappropriation, or violation (including any claim that the
Company must license or refrain from using any Intellectual Property rights
of any third party). To the Seller's Knowledge, no third party has
interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any Intellectual Property rights of the Seller relating to
the conduct of the Business.
(c) Schedule 3.15(c) identifies each patent or registration which has
----------------
been issued to the Company with respect to the Acquired Intellectual
Property, identifies each pending patent application or application for
registration which has been made with respect to the Acquired Intellectual
Property, and identifies each license, agreement, or other permission which
the Company has granted to any third party with respect to any of the
Acquired Intellectual Property (together with any exceptions). The Company
has delivered to the Buyer complete copies of all such patents,
registrations, applications, licenses, agreements, and permissions (as
amended to date) and has made available to the Buyer complete copies of all
other written documentation evidencing ownership and prosecution (if
applicable) of each such item. Schedule 3.15(c) also identifies each trade
----------------
name or unregistered Trademark used by the Company in the conduct of the
Business. With respect to each item of Acquired Intellectual Property
required to be identified in Schedule 3.15(c):
----------------
(i) the Company possesses all right, title, and interest in and
to the item, free and clear of any Lien;
(ii) the item is not subject to any outstanding injunction,
judgment, order, decree, ruling, or charge;
(iii) to the Seller's Knowledge, no Action is pending or is
threatened which challenges the legality, validity, enforceability,
use, or ownership of the item; and
(iv) the Company has not agreed to indemnify any Person for or
against any interference, infringement, misappropriation, or other
conflict with respect to the item.
(d) Schedule 3.15(d) identifies each item of Acquired Intellectual
----------------
Property that any third party owns and that the Seller uses in connection
with the Business pursuant to an existing Contractual Obligation other than
"off the shelf" software that is widely available on a retail basis. The
Company has delivered to the Buyer correct and complete copies of all such
Contractual Obligations (as amended to date). With respect to each item of
Acquired Intellectual Property required to be identified in Schedule
--------
3.15(d):
-------
(i) the Contractual Obligation covering the item is legal,
valid, binding and enforceable and in full force and effect;
(ii) subject to obtaining necessary consents as disclosed in
Schedule 3.28, the Contractual Obligation will be enforceable and in
-------------
full force
-20-
and effect on substantially identical terms following the consummation
of the Transactions (including the assignments and assumptions
referred to in Section 2 above), other than the Stockholder's license
with the Lemelson Medical, Education and Research Foundation, Limited
Partnership under the Agreement dated August 11, 2000 (the "Lemelson
License");
(iii) the Company is not and, to the Seller's Knowledge, no
other party to the Contractual Obligation is in breach or default, and
no event has occurred which with notice or lapse of time would
constitute a breach or default or permit termination, modification, or
acceleration thereunder;
(iv) to the Seller's Knowledge, no party to the Contractual
Obligation has repudiated any provision thereof;
(v) with respect to each sublicense, the representations and
warranties set forth in subsections (i) through (iv) above are true
and correct with respect to the underlying license;
(vi) the underlying item of Acquired Intellectual Property is
not subject to any outstanding injunction, judgment, order, decree,
ruling, or charge;
(vii) to the Seller's Knowledge, no Action is pending or is
threatened which challenges the legality, validity, or enforceability
of the underlying item of Acquired Intellectual Property; and
(viii) the Company has not granted any sublicense or similar
right with respect to the license, sublicense, agreement, or
permission.
(e) To the Seller's Knowledge, except as set forth on Schedule
--------
3.15(e), the Company would not interfere with, infringe upon, misappropriate,
or otherwise come into conflict with, any Intellectual Property rights of
third parties as a result of the continued operation of the Business as
presently conducted.
3.16. Inventories. The inventory of the Company consists of raw materials
-----------
and supplies, manufactured and purchased parts, goods in process, and finished
goods, substantially all of which is merchantable and fit or suitable and usable
for the production or completion of merchantable products for sale in the
Ordinary Course of Business, and none of which is slow-moving, obsolete, below
standard quality, damaged, or defective, subject only to the reserve for
inventory writedown reflected in the Most Recent Balance Sheet, which reserve
amount is set forth on Schedule 3.16 hereto, as adjusted for the passage of time
-------------
through the Closing Date in accordance with GAAP and the past custom and
practice of the Company.
3.17. Contracts. Schedule 3.17 lists the following Contractual
--------- -------------
Obligations to which the Company is a party:
(a) any Contractual Obligation (or group of related Contractual
Obligations) for the lease of personal property to or from any Person
providing for lease payments in excess of $25,000;
-21-
(b) any Contractual Obligation (or group of related Contractual
Obligations) for the purchase or sale of raw materials, commodities,
supplies, products, or other personal property, or for the furnishing or
receipt of services, the performance of which will extend over a period of
more than one year or result in a material loss to the Company or involve
consideration in excess of $25,000;
(c) any Contractual Obligation concerning a partnership or joint
venture;
(d) any Contractual Obligation (or group of related Contractual
Obligations) under which it has created, incurred, assumed, or guaranteed
any Debt in excess of $25,000 or under which it has imposed a Lien on any
of its assets, tangible or intangible;
(e) any Contractual Obligation concerning confidentiality or
noncompetition;
(f) any Contractual Obligation between or among the Company and any
of its Affiliates;
(g) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or
arrangement for the benefit of its current or former directors, officers,
and employees;
(h) any collective bargaining agreement;
(i) any written Contractual Obligation providing for the employment
or consultancy with any individual on a full time, part time, consulting or
other basis in excess of $25,000 or any Contractual Obligation providing
for severance or retirement benefits;
(j) any Contractual Obligation under which it has advanced or loaned
any amount to any of its stockholders, Affiliates, directors, officers, or
employees other than in the Ordinary Course of Business;
(k) any Contractual Obligation under which the consequences of a
default or termination is reasonably likely to have a Material Adverse
Effect; or
(l) any other Contractual Obligation (or group of related Contractual
Obligations) the performance of which involves consideration in excess of
$25,000.
The Company has delivered to the Buyer a complete copy of each written
Contractual Obligation listed in Schedule 3.17 (as amended to date) and a
-------------
written summary setting forth the terms and conditions of each oral Contractual
Obligation referred to in Schedule 3.17. Except as disclosed in Schedule 3.17,
------------- -------------
with respect to each Contractual Obligation required to be listed on Schedule
--------
3.17: (i) the Contractual Obligation is legal, valid, binding, enforceable, and
----
in full force and effect; (ii) subject to the Company obtaining the necessary
consents disclosed in Schedule 3.28, the Contractual Obligation will continue to
-------------
be legal, valid, binding, enforceable, and in full force and effect on
substantially identical terms following the consummation of the Transactions
(including the assignments and assumptions referred to in Section 2 above);
(iii) the Company is not and, to the Seller's Knowledge, no other party is in
material breach or default, and no event
-22-
has occurred which with notice or lapse of time would constitute a breach or
default, or permit termination, modification, or acceleration, under the
Contractual Obligation; and (iv) the Company has not and, to the Seller's
Knowledge, no other party has repudiated any provision of the Contractual
Obligation.
3.18. Insurance. Schedule 3.18 sets forth the following information with
--------- -------------
respect to each insurance policy (including policies providing property,
casualty, liability, and workers' compensation coverage and bond and surety
arrangements) to which the Business and/or the Company has been a party, a named
insured, or otherwise the beneficiary of coverage from the period from March 31,
1996 to the date hereof: the name, address, and telephone number of the agent;
the name of the insurer, the name of the policyholder, and the name of each
covered insured; the policy number, the period of coverage; and a description of
any retrospective premium adjustments or other loss-sensitive premium
arrangements.
3.19. Litigation. Except as disclosed in Schedule 3.19, there are no
---------- -------------
judicial or administrative actions, claims, suits, proceedings or
investigations, to the Seller's Knowledge, pending or threatened, that would be
reasonably likely to result in a Material Adverse Effect, or that question the
validity of this Agreement or of any action taken or to be taken pursuant to or
in connection with the provisions of this Agreement nor, to the Seller's
Knowledge, is there any basis for any such action, claim, suit, proceeding or
investigation. There are no judgments, orders, decrees, citations, fines or
penalties heretofore assessed against the Company affecting the Acquired Assets
or Assumed Liabilities under any federal, state or local law.
3.20. Product Warranties; Defects; Liability. Each product manufactured,
--------------------------------------
sold, leased, or delivered by the Company has been in conformity in all material
respects with all Legal Requirements, as in effect on or prior to the Closing,
and Contractual Obligations and all express and implied warranties. No product
manufactured, sold, leased, or delivered by the Seller in the conduct of the
Business is subject to any guaranty, warranty, or other indemnity beyond the
applicable standard terms and conditions of sale or lease. Schedule 3.20
-------------
includes copies of the standard terms and conditions of sale or lease for the
Company (containing applicable guaranty, warranty, and indemnity provisions).
To the Seller's Knowledge, the Company has no Liability (and to the Seller's
Knowledge no basis for any present or future Action giving rise to any Liability
exists) arising out of any injury to individuals or property as a result of the
ownership, possession, or use of any product manufactured, sold, leased, or
delivered by the Company, and, to the Seller's Knowledge, there has been no
inquiry or investigation made in respect thereof by any Person including any
Governmental Authority.
3.21. Employees. To the Seller's Knowledge, no executive, key employee,
---------
or group of employees has any plans to terminate employment with the Company.
The Company has not experienced any labor disputes or work stoppage due to labor
disagreements. The Company is in compliance with all applicable laws respecting
employment and employment practices and terms and conditions of employment. The
Company is not nor has ever been a party to any collective bargaining agreements
and the Company has not been the subject of any organizational activity.
3.22. Employee Benefit Plans.
----------------------
-23-
(a) Company Plans. Schedule 3.22(a) sets forth all Employee Benefit
-------------- ----------------
Plans (A) which are maintained by the Seller or the Stockholder or by any
corporation, trust, partnership or other entity (a "Related Entity") that
would be considered as a single employer with Seller or the Stockholder
under Section 4001(b)(1) of ERISA or Section 414(b), (c), (m) or (o) of the
Code, and (B) which benefit any current or former employee, director,
consultant or other independent contractor who provides services to or for
the benefit of the Business, or any beneficiary or dependant of any such
individual, (a "Company Plan"). With respect to each Company Plan, the
Company has provided to Buyer a current and complete copy of all plan
documents.
(b) Liability. No circumstance exists and no event (including any
---------
action or the failure to do any act) has occurred with respect to any
Employee Benefit Plan maintained or formerly maintained by the Seller, the
Stockholder or any Related Entity, or to which the Seller, the Stockholder
or any Related Entity is or has been required to contribute, that could
subject Buyer to any material liability, or the assets of the Business to
any material lien, under ERISA or the Code, nor will the Transactions give
rise to any such material liability or lien.
(c) Retiree or Other Post-Termination Welfare Benefits. Except as
--------------------------------------------------
described in Schedule 3.22(c) and other than as required under Section 601
----------------
et seq. of ERISA or applicable state law, no Company Plan provides benefits
or coverage in the nature of life insurance, health insurance or medical
benefits following retirement or other termination of employment.
(d) No Union Representation or Multiemployer Plan. No Company
---------------------------------------------
employees are represented by any union or covered under any collective
bargaining agreement. Neither the Company nor any Related Party maintains,
has maintained, contributes to, has contributed to, or has any liability
with respect to any plan that is a "multiemployer plan" within the meaning
of Section 4001(a)(3) of ERISA.
(e) Qualification of Employee Pension Benefit Plans. Each Company
-----------------------------------------------
Plan which the Seller or the Stockholder maintains or contributes to for
the benefit of employees or former employees of the Company which is
intended to be qualified under section 401(a) of the Code is, to the
Seller's Knowledge, so qualified; each such Company Plan has either
received a favorable determination letter from the Internal Revenue Service
that it is so qualified or the remedial amendment period as defined in
Section 401(b) of the Code for obtaining such letter has not yet expired.
Each such Company Plan, including any associated trust or fund, has been
administered in accordance with its terms and with applicable law, except
where failure to do so would not result in any material liability, and
nothing has occurred with respect to any such Company Plan that has
subjected or could reasonably be expected to subject the Seller, the
Stockholder or any plan participant to a material penalty under Section 502
of ERISA or to a material excise tax under the Code.
3.23. Environment, Health, and Safety. There is no Action pending against
-------------------------------
the Company in respect of (i) noncompliance by the Company with any
Environmental Law or (ii) Release into the environment of any Chemical
Substance. Except as set forth on Schedule 3.23,
-------------
-24-
there has been no material Release of any Chemical Substance on, upon, into or
from any site currently or herefore owned, leased or otherwise used by the
Company. Except as set forth on Schedule 3.23, to the Seller's Knowledge, there
-------------
has been no Chemical Substance generated by the Company that has been disposed
of or come to rest at any site that has been included in any published U.S.
federal, state or local "superfund" site list or any other similar list of
hazardous or toxic waste sites published by any Governmental Authority in the
United States. Except as set forth on Schedule 3.23, there are no underground
-------------
storage tanks located on, no polychlorinated biphenyls ("PCBs") or PCB-
containing equipment used or stored on, and no hazardous waste as defined by the
Resource Conservation and Recovery Act, as amended, stored on, any site owned or
operated by the Company, except for the storage of hazardous waste in quantities
that are used by the Company in the Ordinary Course of Business. The Seller and
the Stockholder have presented the Buyer with all environmental reports, audits,
assessments or similar documents regarding any site currently or heretofore
owned, leased or otherwise used by the Seller in the conduct of the Business. To
the Seller's Knowledge, the Company is in compliance in all material respects
with all Environmental Laws.
3.24. Affiliated Transactions. Except as set forth in Schedule 3.24, (a)
----------------------- -------------
the Company is not, nor has it been, a party to or bound by any Contractual
Obligation with any of the Affiliates of the Stockholder, other than on arms-
length terms which are no less favorable to the Company than those which could
be obtained with a third party which is not an Affiliate of the Stockholder; and
(b) no Affiliate of the Stockholder (other than the Company) owns or otherwise
has any rights to or interests in any asset, tangible or intangible, which is
used in the conduct of the Business.
3.25. Distributors, Customers, Suppliers.
----------------------------------
(a) Schedule 3.25(a) sets forth a complete and accurate list of
(i) the ten largest customers (by dollar volume) of the Products during the
Most Recent Fiscal Year, indicating the existing Contractual Obligation
with each such customer by Product and (ii) all suppliers of significant
materials or services to the Company in connection with the conduct of the
Business, indicating any Contractual Obligation for continued supply from
such Person. The Company has no distributors for its Products.
(b) There are no Contractual Obligations to which the Company is
a party under the terms of which (i) the Company may be obligated to
purchase any product from, or sell any Product to, any other person on an
exclusive basis with respect to any geographic area or group of potential
customers or (ii) any other Person may be similarly obligated to the
Company.
3.26. No Illegal Payments and Compliance with Law.
-------------------------------------------
(a) In connection with the conduct of the Business, none of the
Seller, the Stockholder nor any of their directors or officers nor, to the
Seller's Knowledge, any of their employees or agents, has (x) directly or
indirectly given or agreed to give any illegal gift, contribution, payment
or similar benefit to any supplier, customer, governmental official or
employee or other person who was, is or may be in a position to help or
hinder the Company (or assist in connection with any actual or proposed
transaction) or made or
-25-
agreed to make any illegal contribution, or reimbursed any illegal
political gift or contribution made by any other person, to any candidate
for federal, state, local or foreign public office (i) which might subject
such Seller or the Buyer to any damage or penalty in any civil, criminal or
governmental litigation or proceeding or (ii) the non-continuation of which
has had or might have a Material Adverse Effect or (y) established or
maintained any unrecorded fund or asset or made any false entries on any
books or records for any purpose.
(b) The Seller is, and the Seller and the Stockholder operate,
and have operated, the Business, in compliance in all material respects
with all Legal Requirements, as in effect on or prior to the Closing, and
no action, suit, proceeding, hearing, investigation, charge, complaint,
claim, demand, or notice has, to the Seller's Knowledge, been filed or
commenced against any of them alleging any failure so to comply. Neither
the ownership nor use of properties of the Company nor the conduct of the
Business conflicts with the rights of any other Person or violates, or with
the giving of notice or the passage of time or both will violate, conflict
with or result in a default, right to accelerate or loss of rights under,
any terms or provisions of any of its Charter or By-laws or, any Lien to
which the Company is a party or by which it may be bound or affected. To
the Seller's Knowledge, there does not exist any proposed law, rule,
regulation, ordinance, order, judgment, decree, governmental taking,
condemnation or other proceeding which would be applicable to the Company's
business, operations or properties and which might adversely affect its
properties, assets, liabilities, operations or prospects.
3.27. Books and Records. The books and all corporate (including minute
-----------------
books and stock record books) and financial records of the Company are complete
and correct in all material respects and have been maintained in accordance with
applicable sound business practices, laws and other material requirements.
3.28. Consents. Schedule 3.28 sets forth a complete list of the
-------- -------------
identities of any Person whose consent or approval is required and the matter,
agreement or contract to which such consent relates in connection with the
transfer, assignment or conveyance by the Company of any of the Acquired Assets.
3.29. Accredited Investor. Seller is an "accredited investor" within the
-------------------
meaning of Regulation D under the Securities Act of 1933 (the "Securities Act").
3.30. Unregistered Securities. Seller understands that the Seller Note
-----------------------
and Warrants that it will receive through the Transactions have not been, and
will not be, registered under the Securities Act, by reason of a specific
exemption from the registration provisions of the Securities Act which depends
upon, among other things, the bona fide nature of the investment intent and the
accuracy of the Seller's representations as expressed herein. The Seller
understands that the Seller Note and Warrants are "restricted securities" under
applicable U.S. federal and state securities laws and that, pursuant to these
laws, the Seller must hold the Seller Note and Warrants indefinitely unless they
are registered with the Securities and Exchange Commission and qualified by
state authorities, or an exemption from such registration and qualification
requirements is available. The Seller acknowledges that PCEMS, Inc. has no
-26-
obligation to register or qualify the Seller Note and Warrants for resale
except, with respect to the Warrants, as set forth in the Stockholders Agreement
contemplated by Section 6.1(k) hereof. The Seller further acknowledges that if
an exemption from registration or qualification is available, it may be
conditioned on various requirements including, but not limited to, the time and
manner of sale, the holding period for the shares of common stock represented by
the Warrants, and on requirements relating to PCEMS, Inc. which are outside of
the Seller's control, and which PCEMS, Inc. is under no obligation and may not
be able to satisfy.
3.31. Disclosure. The representations and warranties contained in this
----------
Section 3 (including the Disclosure Schedules and any other schedules and
exhibits required to be delivered by the Seller and the Stockholder to the Buyer
pursuant to this Agreement) and any certificate furnished or to be furnished by
the Seller and the Stockholder to the Buyer do not contain and on the Closing
Date will not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements and information
contained in this Section 3 not misleading; provided, that, notwithstanding the
-------- ----
representations and warranties made in Section 3.9(b) hereof, Buyer acknowledges
that none of the Seller, the Stockholder, their Affiliates nor their
Representatives have made any representation or warranty regarding the
achievement of any projected financial results of the Business.
4. Representations and Warranties of the Buyer. The Buyer represents and
-------------------------------------------
warrants to the Seller and the Stockholder that the statements contained in this
Section 4 are correct and complete as of the date of this Agreement and, unless
a date is specified in such representation and warranty, will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section 4).
4.1. Organization of the Buyer. The Buyer is a limited liability company
-------------------------
duly formed, validly existing, and in good standing under the laws of the State
of Delaware. A copy of the Charter, as amended to date, has been heretofore
delivered to the Sellers (or will be so delivered prior to the Closing) and is
(or will be) complete.
4.2. Authorization of Transaction. The Buyer has the power and authority
----------------------------
to execute and deliver this Agreement and to perform its obligations hereunder.
All actions and proceedings to be taken by or on the part of the Buyer to
authorize and permit the execution and delivery by the Buyer of this Agreement
and the instruments to be executed and delivered by the Buyer pursuant hereto,
and the performance of the Buyer of its obligations hereunder, and the
consummation by the Buyer of the Transactions, have been duly and properly
taken. This Agreement has been duly executed and delivered by the Buyer and is
enforceable against the Buyer.
4.3. Noncontravention. Neither the execution and the delivery of this
----------------
Agreement, nor the consummation of the Transactions contemplated hereby
(including the assignments and assumptions referred to in Section 2 above), will
(i) violate any Legal Requirement to which the Buyer is subject or any provision
of its Charter or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
Contractual Obligation to which the Buyer is a party or by which it is bound or
to which any of its assets is subject. The Buyer does
-27-
not need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any Governmental Agency in order for the
Parties to consummate the Transactions (including the assignments and
assumptions referred to in Section 2 above).
4.4. Brokers' Fees. The Buyer does not have any Liability or obligation
-------------
to pay any fees or commissions to any broker, finder, or agent with respect to
the Transactions for which the Seller or the Stockholder could become liable or
obligated.
4.5. Litigation. There are judicial or administrative actions, claims,
----------
suits, proceedings or investigations pending or, to the Buyer's Knowledge,
threatened, that would be reasonably likely to result in a Material Adverse
Effect, or that question the validity of this Agreement or of any action taken
or to be taken by Buyer pursuant to or in connection with the provisions of this
Agreement nor, to the Buyer's Knowledge is there any basis for any such action,
claim, suit, proceeding or investigation.
4.6. Bankruptcy. The Buyer is not involved in any action, suit,
----------
complaint, charge, hearing, inquiry, investigation or legal or administrative
arbitration proceeding by or against the Buyer as a debtor before any
governmental entity or authority under Title 11 of the U.S. Bankruptcy Act or
any other insolvency or debtor's relief act, whether state or federal, or for
the appointment of a trustee, receiver, liquidator, assignee, sequestration, or
other similar official for any part of the property of the Buyer.
4.7. Due Diligence. In making its decision to purchase the Acquired
-------------
Assets, the Buyer has relied only on the representations and warranties
contained in this Agreement and the documents specified herein. Buyer
recognizes that none of the Stockholder, the Company nor any of their respective
Affiliates or agents or consultants have made any representation or warranty in
respect of the Company's future financial results upon which Buyer is relying in
entering into this Agreement, or will be relying upon subsequent to the Closing
Date. Buyer further acknowledges, agrees and recognizes that any cost
estimates, projections or other similar predictions contained or referred to in
any document provided to Buyer or any of its employees, agents or
representatives were prepared for internal planning purposes only and are not
and shall not be deemed to be representations or warranties of the Seller, the
Stockholder or any of their respective Affiliates, agents or consultants.
4.8. Disclosure. The representations and warranties contained in this
----------
Section 4 and any certificate furnished or to be furnished by the Buyer to the
Seller and the Stockholder do not contain and will not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements and information contained in this Section 4 not
misleading.
5. Covenants. The Parties agree as follows:
---------
5.1. General. Each of the Parties will use its reasonable best efforts to
-------
take all action and to do all things necessary, proper, or advisable in order to
consummate and make effective the Transactions (including satisfaction, but not
waiver, of the closing conditions set forth in Section 6 below).
-28-
5.2. Notices and Consents. The Company will give any notices to third
--------------------
parties, and will use its reasonable best efforts to obtain any third party
consents, that are necessary or desirable to transfer the Acquired Assets to the
Buyer.
5.3. Operation of Business. The Company will not engage in any practice,
---------------------
take any action, or enter into any transaction outside the Ordinary Course of
Business. Without limiting the generality of the foregoing, the Company will
not (A) declare, set aside, or pay any dividend or make any distribution with
respect to its capital stock or redeem, purchase, or otherwise acquire any of
its capital stock, (B) pay any amount to any third party with respect to any
Liability or obligation (other than any costs and expenses the Company has
incurred or may incur in connection with this Agreement and the Transactions)
which would not constitute an Assumed Liability if in existence as of the
Closing, or (C) otherwise engage in any practice, take any action, or enter into
any transaction of the sort described in Section 3.10 above.
5.4. Preservation of Business. The Company will use its reasonable best
------------------------
efforts to keep the Business and Acquired Assets substantially intact, including
using its reasonable best efforts to (i) maintain its present operations,
physical facilities and working conditions, (ii) keep available to Buyer the
services of the Company's present officers, employees, agents and independent
contractors and (iii) preserve for the benefit of Buyer the goodwill of the
Company's customers, suppliers, licensors, lessors and others having business
relations with it.
5.5. Full Access. The Seller and the Stockholder will permit
-----------
representatives of the Buyer, any direct or indirect investors in the Buyer and
any third party financial sources of the Buyer to have full access to all
premises, properties, personnel, books, records (including Tax records),
Contractual Obligations, and documents of or pertaining to the Company on
reasonable notice and at reasonable times.
5.6. Notice of Developments. Each Party will give prompt written notice
----------------------
to each other Party of any development occurring subsequent to the execution of
this Agreement and prior to the Closing Date which would cause a failure of the
conditions set forth in subsection 6.1 and 6.2 hereof with respect to
representations and warranties of such Party. No disclosure by any Party
pursuant to this Section 5.6, however, shall be deemed to amend or supplement
the Disclosure Schedule or to prevent or cure any misrepresentations, breach of
warranty, or breach of covenant.
5.7. No Solicitation.
---------------
(a) None of the Seller, the Stockholder, nor any officer,
director or employee of, or any investment banker, attorney or other
advisor or representative (collectively, "Representatives") of, the Seller
or the Stockholder shall, (i) directly or indirectly solicit, initiate or
encourage the submission of, any Company Takeover Proposal, (ii) enter into
any Contractual Obligation with respect to any Company Takeover Proposal or
(iii) directly or indirectly participate in any discussion or negotiations
regarding, or furnish to any Person any information with respect to, or
take any other action or facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any
Company Takeover Proposal; provided, however, that prior to the Closing the
-------- -------
Seller and the Stockholder may, to the extent necessary to act in a manner
consistent
-29-
with the fiduciary obligations of the Stockholder's board of directors (the
"Stockholder's Board"), as determined in good faith by it after
consultation with outside counsel, in response to a Company Takeover
Proposal that the Stockholder's Board determines, in good faith after
consultation with outside counsel and Xxxxxx Xxxxxxx or another comparable
independent financial advisor, is reasonably likely to lead to a Superior
Company Proposal, that was not solicited by the Seller or the Stockholder
and that did not otherwise result from a breach of this Section 5.7(a), and
subject to compliance with Section 5.7(c), (x) furnish information with
respect to the Company to the person making such Company Takeover Proposal
and its Representatives pursuant to a customary confidentiality agreement
and (y) participate in discussions or negotiations with such person and its
Representatives regarding such Company Takeover Proposal.
(b) Unless the Stockholder's Board, after consultation with outside
counsel, determines in good faith judgment that it is necessary to do so in
order to fulfill its fiduciary obligations under applicable law, none of
the Stockholder's Board, the board of directors of the Company nor any
committee of either such board shall (i) approve any letter of intent,
agreement in principle, acquisition agreement or similar agreement relating
to any Company Takeover Proposal or (ii) approve or recommend any Company
Takeover Proposal.
(c) The Seller and the Stockholder promptly shall advise Buyer
orally and, within two business days, in writing of any Company Takeover
Proposal or any inquiry with respect to or that could reasonably be
expected to lead to any Company Takeover Proposal, the material terms and
conditions of any such Company Takeover Proposal (including any changes
thereto) and the identity of the person making such Company Takeover
Proposal or inquiry. The Seller and the Stockholder shall (i) keep Buyer
fully informed of the status and details (including any change to the terms
thereof) of any such Company Takeover Proposal and (ii) provide to Buyer as
soon as practicable after receipt or delivery thereof with copies of all
correspondence and other written material sent or provided to the Seller or
the Stockholder by any third party in connection with any Company Takeover
Proposal or sent or provided by the Seller or the Stockholder to any third
party in connection with any Company Takeover Proposal.
5.8. Access to Records after Closing. Sellers may retain a copy of any
-------------------------------
financial books and records of the Company which Seller reasonably believes will
be required by it for the purpose of performing any of the Seller's accounting,
or other administrative functions which are performed in the Ordinary Course of
Business. For a period of five years after the Closing Date, the Seller, the
Stockholder and their representatives shall have reasonable access to all of the
books and records of the Company to the extent that such access may reasonably
be required by such Parties in connection with matters relating to or affected
by the operations of the Company in the conduct of the Business prior to the
Closing Date. Such access shall be afforded by the Buyer upon receipt of
reasonable advance notice and during normal business hours. The Seller and the
Stockholder shall be solely responsible for any costs or expenses incurred by
them pursuant to this Section 5.8. If the Buyer shall desire to dispose of any
of such books and records prior to the expiration of such five-year period, the
Buyer shall, prior to such disposition, give the Seller and the Stockholder a
reasonable opportunity, at their expense, to segregate and remove such books and
records as the Seller and the Stockholder may select.
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5.9. Transfer Taxes. The Seller agrees to pay all Taxes on the transfer
--------------
of the Acquired Assets hereunder.
5.10. Employee Benefits.
-----------------
(a) Employment of Initial Employees. Reasonably in advance of the
-------------------------------
Closing, Buyer will offer to the individuals listed or described on
Schedule 5.10(a) (the "Transferred Employees"), which Schedule is intended
----------------
to list all current employees of the Company, employment with the Buyer
effective as of the Closing, with initial job responsibilities,
compensation, and benefits comparable in the aggregate to those extended to
such individuals by the Seller immediately prior to Closing. Seller will
use its commercially reasonable best efforts to assist Buyer in making
arrangements for Buyer to hire all Transferred Employees as of the Closing,
including terminating the Transferred Employees immediately prior to the
Closing and cooperating with Buyers to accomplish the transfer of account
balances described in Section 5.10(e) below. Effective as of the Closing,
all Transferred Employees who accept Buyer's offer of employment will
become employees of the Buyer ("Hired Employees"). Buyer will employ the
Hired Employees at will, except in those cases in which Buyer and a Hired
Employee enter into a mutually agreed upon written contract of employment.
Notwithstanding the foregoing, Buyer shall not at or after the Closing
cause to occur a "mass layoff" or "plant closing" as those terms are
defined in the Worker Adjustment and Retraining Notification Act ("WARN")
that would result in any Liability to the Company or the Stockholder under
WARN, nor shall Buyer cause to occur after the Closing a "plant closing" or
"covered partial plant closing" as defined in Chapter 151A section 71A of
the Massachusetts General laws that would result in any liability of the
Company or the Stockholder to provide health benefits, in each case with
respect to Hired Employees; it being understood that Buyer shall be free to
take any of the actions described in this sentence so long as Buyer
indemnifies the Company and the Stockholder for any Liabilities that would
otherwise be incurred by such Parties.
(b) Credit for Service and Accrued Leave with Company. For each
-------------------------------------------------
Hired Employee, Buyer shall credit service with Sellers for purposes of
eligibility and vesting in any employee benefit plans that it may
establish. In addition, Buyer shall credit each Hired Employee with any
vacation, sick, personal or other leave accrued with the Sellers but unused
as of the Closing Date and shall allow such Hired Employee to take such
leave in accordance with the Buyer's policies; provided, however, that to
the extent that Sellers cash-out any Hired Employee as of the Closing with
respect to any such accrued leave such Hired Employee may take such accrued
leave following the Closing and prior to the close of the calendar year in
which the Closing occurs on an unpaid basis only; and provided further that
nothing in this Agreement shall be construed as requiring Sellers to cash-
out any Hired Employee for such leave. Buyer shall credit Transferred
Employees with service with Seller in calculating any future leave earned
after the Closing that is determined, in whole or in part, based upon
service with Buyer.
(c) COBRA. Seller shall retain the obligation to provide so-
-----
called COBRA continuation health coverage and required notices (both under
Section 601 et seq. of ERISA and applicable state law) to any employee of
the Seller who was eligible to
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receive such continuation coverage from the Company as of the day before
the Closing. Buyer shall provide COBRA continuation coverage and required
notice thereunder to any Transferred Employee who under applicable law
first becomes eligible for such continuation coverage on or after the
Closing Date and to any Hired Employee; provided that Transferred Employees
shall be eligible for COBRA continuation coverage under the Stockholder's
COBRA continuation coverage plan in accordance with the terms of the
Transition Services Agreement. Buyer shall be responsible for providing
COBRA continuation health coverage for such Transferred Employees and Hired
Employees under any group health plans which Buyer may maintain for the
benefit of Hired Employees, provided, that Buyer expressly agrees to
maintain health coverage that does not contain a preexisting condition
limitation for Hired Employees, and, provided further, that Buyer may
require the Hired Employees to contribute such portion of the cost of such
insurance as it shall determine, consistent with the terms of this
Agreement.
(d) Company Plans.
(i) As of the Closing Date, all Hired Employees shall cease to
participate in Company Plans.
(ii) Seller, Stockholder and their Affiliates shall retain any
and all liabilities (including any liabilities associated with any
severance or retention arrangements) with respect to such Company
Plans through and after the Closing Date, except as set forth in
Section 5.10(e) with respect to certain amounts to be spun off from
the Nu Horizons Electronics Corporation's 401(k) Plan ("401(k) Plan").
(e) Transfer of Account Balances in 401(k) plan and ESOP.
(i) 401(k) Spin Off. Buyer agrees to either (i) cover as of the
----------------
Closing all Hired Employees under one or more existing qualified plans
maintained by the Buyer or by any corporation, trust, partnership or
other entity (a "Related Entity") that would be considered as a single
employer with Buyer under Section 4001(b)(1) of ERISA or Section
414(b), (c), (m) or (o) of the Code, or (ii) establish effective on or
about the Closing a qualified plan which will cover all Hired
Employees as of the Closing Date or the date such plan is established,
whichever is later (such plan or plans hereinafter referred to as the
Buyer's Plan). The Buyer's Plan will recognize service of Hired
Employees rendered to Seller and recognized by the 401(k) Plan. Seller
and the Stockholder shall cause all accounts of all Hired Employees in
the 401(k) Plan to become fully vested as of the Closing Date. As soon
as practicable thereafter, Seller and Buyer will agree in good faith
on a valuation date (the "401(k) Valuation Date"). On a date as
further agreed upon by Seller and Buyer after the 401(k) Valuation
Date (but in no event more than 30 days following the 401(k) Valuation
Date), Seller and the Stockholder will (i) cause the account balances
of each Hired Employee in the 401(k) Plan to be liquidated into a cash
amount (and, if applicable a promissory note evidencing any loan from
the 401(k) Plan to a Hired Employee) equal to the value of each Hired
Employee's account balance in the 401(k) Plan as of the
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close of business on the 401(k) Valuation Date; and (ii) cause the
cash amounts (and, if applicable a promissory note evidencing any loan
from the 401(k) Plan to a Hired Employee) as so determined to be spun
off and transferred to the Buyer's 401(k) Plan, once satisfactory
evidence of intended IRS qualification of the Buyer's 401(k) Plan has
been provided to Seller and the Stockholder.
(ii) ESOP. Seller and the Stockholder shall cause all
----
accounts of all Hired Employees in the Nu Horizons Electronics
Corporation's Employee Stock Ownership Plan (the "ESOP") to become
fully vested as of the Closing Date and shall distribute such
account balances to the Hired Employees. Stockholder shall amend the
ESOP, as necessary, to permit such distributions. Buyer shall accept
cash rollovers (direct or otherwise) of Hired Employees liquidated
account balances in the ESOP to the Buyer's Plan. Buyer shall not be
required to accept the Stockholder's stock or Company stock in a
rollover from the ESOP.
(f) No Third Party Beneficiaries. No provision of this Section
----------------------------
5.10 shall create any third party beneficiary or other rights in any
employee or former employee (including any beneficiary or dependent
thereof) of the Seller or of any of its Affiliates in respect of continued
employment (or resumed employment) with the Buyer or any of its Affiliates,
and no provision of this Section 5.10 shall create any such rights in any
such persons in respect of any benefits that may be provided, directly or
indirectly, under any Employee Benefit Plan or any plan or arrangement
which may be established by Buyer or any of its Affiliates. No provision of
the Agreement shall constitute a limitation on rights to amend, modify or
terminate after the Closing Date any such plans or arrangements of the
Buyer or its Affiliates or the Seller or its Affiliates.
5.11. Transfer Notices. Promptly following the execution and delivery of
----------------
this Agreement, the Seller and the Stockholder shall deliver notice (in a form
reasonably acceptable to the Buyer) to the creditors of the Company to whom the
Assumed Liabilities are owed of the assignment and assumption of the Assumed
Liabilities to be made pursuant to the terms hereof.
5.12. Change of Name. On or prior to the Closing Date, the Stockholder
--------------
agrees to cause the Company to amend its Charter to change its name "NUV Inc."
and thereafter to cease use of the name "Nu Visions" or "NuVisions" in its or
any Affiliates' business.
5.13. Further Assurances. At any time and from time to time after the
------------------
Closing, at the request of the Buyer and without further consideration, the
Seller and the Stockholder will execute and deliver such other instruments of
sale, transfer, conveyance, assignment and confirmation and take such action as
the Buyer may reasonably determine is necessary to transfer, convey and assign
to the Buyer, and to confirm the Buyer's title to or interest in the Acquired
Assets, to put the Buyer in actual possession and operating control thereof and
to assist the Buyer in exercising all rights with respect thereto. Upon any
failure to act by Seller or Stockholder, each of them hereby constitutes and
appoints the Buyer and its successors and assigns as its true and lawful
attorneys-in-fact in connection with the Transactions, with full power of
substitution, in the name and stead of the Seller and the Stockholder, but on
behalf and for the benefit of the Buyer and its successors and assigns, to
demand and to receive any and all of the assets, properties, rights and business
hereby conveyed, assigned and transferred or
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intended so to be, and to give receipt and releases for and in respect of the
same and any part thereof, and from time to time to institute and prosecute, in
the name of the Seller, the Stockholder or otherwise, for the benefit of the
Buyer and its successors and assigns, proceedings at law, in equity or
otherwise, which the Buyer or its successors and assigns reasonable deem proper
in order to collect or reduce to possession or endorse any of the Acquired
Assets and to do all acts and things in relation to the Acquired Assets which
the Buyer or its successors or assigns reasonably deem desirable.
5.14. Transfer of Assets. Prior to the Closing, the Stockholder will
------------------
transfer, and will cause to be transferred, to the Company all assets of every
kind and description, tangible or intangible (if any) owned by the Stockholder
or any of its Subsidiaries (other than the Seller) which are used in the
operation of the Business except for those assets set forth on Schedule 5.14
-------------
hereto.
5.15. License with Lemelson Foundation. To permit the Buyer to obtain a
--------------------------------
license from the Lemelson Medical Education and Research Foundation, the
Stockholder agrees to pay the portion of the license fee under such license
covering the increment of revenues between $36.6 million and $49.2 million, not
to exceed $15,000.
5.16. Xxxxxx Xxxxxxx Fee. The Seller has not made and shall not make any
------------------
payment to Xxxxxx Xxxxxxx with respect to the Transactions.
5.17. Subordination Agreement. At or prior to the Closing, the Seller
-----------------------
shall duly execute and deliver a subordination agreement which agreement shall
provide for the subordination of the liabilities and obligations of the Buyer
and its Affiliates in respect of the Seller Note (the "Seller Note Obligations")
to the liabilities and obligations of the Buyer and its Affiliates in respect of
the financing referenced in Section 6.1(h) (the "Senior Debt Obligations")
provided, however, that no term or provision of such subordination agreement
-------- -------
shall provide for (a) the subordination of the Seller Note Obligations to any
Senior Debt Obligations which either (i) have a stated maturity later than six
months prior to the stated maturity of the Seller Note or (ii) have no stated
maturity or (b) the right by the holders of the Senior Debt Obligations to block
the Seller's exercise of remedies in respect of the Seller Note Obligations for
a period in excess of two hundred and forty (240) days.
6. Conditions to Obligation to Close.
6.1. Conditions to Obligation of the Buyer. The obligation of the Buyer to
-------------------------------------
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(a) Representations and Warranties. To the Seller's Knowledge, the
------------------------------
representations and warranties set forth in Section 3 above shall have been
true and correct when made and shall be deemed to be made again at and as
of the Closing Date and shall then be true and correct; provided, however,
that the representations and warranties set forth in Sections 3.1, 3.2,
3.3, 3.6, 3.9 and 3.13, shall have been and shall be, so true and correct
without regard to the Seller's Knowledge except to the extent that such
representations and warranties are expressly so qualified;
-34-
(b) Performance by Seller and Stockholder. The Seller and the
-------------------------------------
Stockholder shall have performed and complied in all material respects with
all of their covenants, agreements and obligations hereunder through the
Closing;
(c) Consents. The Seller shall have procured all of the
--------
governmental approvals, consents or authorizations and third party consents
specified in Section 3.28 and Section 5.2 above;
(d) Absence of Litigation. No Action shall be pending or threatened
---------------------
wherein an unfavorable injunction, judgment, order, decree, ruling, or
charge would (i) prevent consummation of any of the Transactions, (ii)
cause any of the Transactions to be rescinded following consummation, (iii)
affect adversely the right of the Buyer to own the Acquired Assets or to
operate the Business (and no such injunction, judgment, order, decree,
ruling, or charge shall be in effect);
(e) Certificates. The Seller and the Stockholder shall have
------------
delivered to the Buyer a certificate to the effect that each of the
conditions specified above in Section 6.1 are satisfied in all respects;
(f) Opinion. The Buyer shall have received from counsel to the
-------
Seller and the Stockholder an opinion in form and substance as set forth in
Exhibit E attached hereto, addressed to the Buyer, and dated as of the
Closing Date;
(g) No Material Adverse Change. There shall not have been any
--------------------------
change which has resulted in a Material Adverse Effect and no event shall
have occurred nor shall any circumstance be in existence that could
reasonably be expected to result in such a Material Adverse Effect;
(h) Funding. The Debt financing described in the commitment letters
-------
attached hereto as Exhibit F shall have been provided to the Buyer and/or
its Affiliates as contemplated therein on such additional terms and
conditions as may be reasonably satisfactory to the Buyer;
(i) Executive Employment Agreements. Xxxxxxx Xxxxxx and Xxxxxx
-------------------------------
Xxxxxxxxx shall have entered into employment agreements with Buyer
substantially in the form attached hereto as Exhibit G;
(j) Transition Services Agreement. The Stockholder and the Buyer
-----------------------------
shall have entered into a Transition Services Agreement substantially in
the form attached hereto as Exhibit H (the "Transition Services
Agreement");
(k) Stockholders Agreement. The Seller and Xxxxxxx Xxxxxx shall
----------------------
have entered into a Stockholders Agreement, substantially in the form
attached hereto as Exhibit I;
(l) Tax Clearance Certificate. The Seller shall have delivered to
-------------------------
the Buyer a tax good standing certificate from The Commonwealth of
Massachusetts;
-35-
(m) Escrow Agreement. The Seller and the Stockholder shall have
----------------
entered into the Escrow Agreement, substantially in the form attached
hereto as Exhibit A-1; and
(n) All Necessary Actions. All actions to be taken by the Seller and
---------------------
the Stockholder in connection with the consummation of the Transactions and
all certificates, opinions, instruments and other documents required to
effect the Transactions will be reasonably satisfactory in form and
substance to the Buyer.
The Buyer may waive any condition specified in this Section 6.1 if it executes a
writing so stating at or prior to the Closing and such waiver shall not be
considered a waiver of any other provision in this Agreement unless the writing
specifically so states.
6.2. Conditions to Obligations of the Seller and the Stockholder. The
-----------------------------------------------------------
obligations of the Seller and the Stockholder to consummate the transactions to
be performed by them in connection with the Closing is subject to satisfaction
of the following conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties set forth in Section 4 above shall be true and correct at and as
of the Closing Date;
(b) Performance by Buyer. The Buyer shall have performed and
--------------------
complied in all material respects with all of its covenants hereunder
through the Closing;
(c) Absence of Litigation. No Action shall be pending or threatened
---------------------
wherein an unfavorable injunction, judgment, order, decree, ruling, or
charge would (i) prevent consummation of any of the Transactions or (ii)
cause any of the Transactions to be rescinded following consummation (and
no such injunction, judgment, order, decree, ruling, or charge shall be in
effect);
(d) Certificate. The Buyer shall have delivered to the Seller and
-----------
the Stockholder a certificate to the effect that each of the conditions
specified above in Section 6.2(a)-(c) is satisfied in all respects;
(e) Stockholders Agreement. The Buyer shall have entered into a
----------------------
Stockholders Agreement, substantially in the form attached hereto as
Exhibit I;
(f) Opinion. The Seller and the Stockholder shall have received from
-------
counsel to the Buyer an opinion in form and substance as set forth in
Exhibit J attached hereto, addressed to such Parties, and dated as of the
Closing Date; and
(g) Escrow Agreement. The Buyer shall have entered into the Escrow
----------------
Agreement.
(h) All Necessary Actions. All actions to be taken by Buyer in
---------------------
connection with the consummation of the Transactions and all certificates,
opinions, instruments and other documents required to effect the
Transactions will be reasonably satisfactory in form and substance to the
Seller and the Stockholder.
The Seller and the Stockholder may waive any condition specified in this Section
6.2 if they
-36-
execute a writing so stating at or prior to the Closing and such waiver shall
not be considered a waiver of any other provision in this Agreement unless the
writing specifically so states.
7. Confidentiality.
---------------
(a) From and after the Closing Date, the Seller and Stockholder
will treat and hold as such all of the Confidential Information, refrain
from using any of the Confidential Information except in connection with
this Agreement, and deliver promptly to the Buyer or destroy, at the
request and option of the Buyer, all tangible embodiments (and all copies)
of the Confidential Information which are in their possession; provided,
that Seller and Stockholder are not required to destroy or return to Buyer
any information that Seller and Stockholder have the right to retain
pursuant to Section 2.2 (other than as provided by such Section 2.2). From
and after the Closing Date, in the event that the Seller and Stockholder
are requested or required (by oral question or request for information or
documents in any legal proceeding, interrogatory, subpoena, civil
investigative demand, or similar process) to disclose any Confidential
Information, such Parties will notify the Buyer promptly of the request or
requirement so that the Buyer may seek an appropriate protective order or
waive compliance with the provisions of this Section 7. If, in the absence
of a protective order or the receipt of a waiver hereunder, the Seller and
Stockholder are compelled to disclose any Confidential Information to any
tribunal or else stand liable for contempt, such Parties may disclose the
Confidential Information to the tribunal; provided, however, that such
-------- -------
Parties shall use their best efforts to obtain, at the request and expense
of the Buyer, an order or other assurance that confidential treatment will
be accorded to such portion of the Confidential Information required to be
disclosed as the Buyer shall designate.
(b) From and after the date of this Agreement, the Buyer will treat
and hold as such all of the Confidential Information, refrain from using
any of the Confidential Information except in connection with this
Agreement, and deliver promptly to the Sellers or destroy, at the request
and option of the Seller, all tangible embodiments (and all copies) of the
Confidential Information which are in its possession; provided, that if the
Closing shall occur, then the provisions of this Section 7(b) shall cease
to apply. If the Closing shall not occur, in the event that the Buyer is
requested or required (by oral question or request for information or
documents in any legal proceeding, interrogatory, subpoena, civil
investigative demand, or similar process) to disclose any Confidential
Information, Buyer will notify the Seller and Stockholder promptly of the
request or requirement so that such Parties may seek an appropriate
protective order or waive compliance with the provisions of this Section
7(b). If, in the absence of a protective order or the receipt of a waiver
hereunder, the Buyer is compelled to disclose any Confidential Information
to any tribunal or else stand liable for contempt, the Buyer may disclose
the Confidential Information to the tribunal; provided, however, that the
-------- -------
Buyer shall use its best efforts to obtain, at the request and expense of
the Seller and the Stockholder, an order or other assurance that
confidential treatment will be accorded to such portion of the Confidential
Information required to be disclosed as such Parties shall designate.
-37-
8. Noncompetition.
--------------
(a) Each of the Seller and Stockholder agrees that, in
consideration of the purchase by Buyer hereunder, it shall not, on or prior
to the date which is four (4) years after the Closing Date, directly or
indirectly, run, own, manage, operate, control, be employed by, provide
consulting services to, be an officer or director of, participate in, lend
his, her or its name to, invest in or be connected in any manner with the
management, ownership, operation or control of any business, venture or
activity which competes with the Business or relating to products
performing functions similar to those of the Products; provided, however,
that neither Seller nor Stockholder shall be considered to be in default of
this Section 8 solely by virtue of holding directly for portfolio purposes
as a passive investor not more than five percent (5%) of the issued and
outstanding equity securities of a corporation, the equity securities of
which are listed or quoted on a stock exchange or an over-the-counter
market within the United States.
(b) Each of the Seller and the Stockholder further agrees that for
a period of four (4) years after the Closing Date such Party will not
directly or indirectly without the prior written consent of Buyer, recruit,
offer employment, employ, engage as a consultant, lure or entice away or in
any other manner persuade or attempt to persuade any person who is an
employee of the Company, the Buyer or any Subsidiary, group, or division of
Buyer or any Affiliate thereof, to leave the employ of Buyer or any of its
Affiliates unless such person has been terminated by the Buyer or an
Affiliate of Buyer.
9. Indemnification.
---------------
9.1. Survival of Representations and Warranties. All of the
------------------------------------------
representations and warranties of the Seller and the Stockholder (except for
those contained in Sections 3.1 (Organization of the Company), 3.2 (Ownership of
Company), 3.3 (Authorization of Transaction), 3.4 (Noncontravention), 3.6 (Title
to Assets), 3.9 (Financial Statements), 3.11 (Absence of Undisclosed
Liabilities), 3.13 (Taxes), 3.23 (Environmental, Health and Safety) and 3.26(b)
(Compliance with Laws)) contained herein or in any document certificate or other
instrument required to be delivered hereunder shall expire on the Closing Date.
The representations and warranties of the Seller and the Stockholder contained
in Sections 3.4, 3.11, 3.23 and 3.26(b) shall survive the Closing and shall
continue in full force and effect for a period of one year thereafter. The
representations and warranties of the Seller and the Stockholder contained in
Sections 3.1, 3.3, 3.6, 3.9, and 3.13 shall survive the Closing and shall
continue in full force and effect for a period of two years thereafter. The
representations and warranties of the Seller and the Stockholder contained in
Section 3.2 shall survive the Closing and shall continue in full force and
effect without limit as to time. The termination of any such representation and
warranty, however, shall not affect any claim for breaches of representations or
warranties if written notice thereof is given to the breaching party or parties
prior to such termination date. All of the representations and warranties of the
Buyer (except those contained in Sections 4.1 (Organization of the Buyer), 4.2
(Authorization of Transaction) and 4.3 (Noncontravention)) contained in Section
4 shall expire on the Closing Date. The representations and warranties of the
Buyer contained in Section 4.3 shall survive the Closing and shall continue in
full force and effect for a period of one year thereafter. The representations
and warranties of the Buyer contained in Sections 4.1 and 4.2 shall survive the
Closing and shall
-38-
continue in full force and effect for a period of two years thereafter. All
covenants and indemnities of any Party in this Agreement or in any document or
certificate delivered hereunder shall, unless otherwise specifically provided
therein, remain in full force and effect forever.
9.2. Indemnity by the Seller and the Stockholder. The Seller and the
-------------------------------------------
Stockholder hereby agree to jointly and severally indemnify, defend and hold
harmless Buyer and each of its respective direct and indirect partners,
stockholders and members, officers, directors, employees, agents and Affiliates
against and in respect of all Liabilities, obligations, judgments, Liens,
injunctions, charges, orders, decrees, rulings, damages, dues, assessments,
Taxes, losses, fines, penalties, expenses, fees, costs, amounts paid in
settlement, including reasonable attorneys' and expert witness fees and
disbursements in connection with investigating, defending or settling any action
or threatened action, (in each case net of (i) income tax benefits to the Buyer,
calculated on a with and without basis, to the extent actually realized by the
Buyer through a reduction of Taxes for the Tax year in which the Loss (as
defined below) occurred and (ii) insurance proceeds if and when actually
received by the Buyer to the extent such proceeds exceed increased insurance
premiums relating to the applicable claim, provided, however, that Buyer shall
retain the right in its sole discretion to determine whether to pursue such
claims by, through or against an insurer or to bring such claims directly or
indirectly against the Seller and the Stockholder pursuant to this Section 9.2)
(collectively, "Losses") arising out, relating to or resulting from:
(a) the inaccuracy of any representation or warranty made by Seller
or Stockholder herein, or resulting from any misrepresentation or breach of
warranty contained herein or in any agreement or instrument required to be
entered into in connection herewith or from any misrepresentation in or
omission from any schedule, document, certificate or other instrument
required to be furnished by Seller or Stockholder hereunder; provided,
--------
however, that (other than as specified in the following proviso) the Seller
-------
and the Stockholder shall be liable under this Section 9.2(a) in respect of
Losses only to the extent the aggregate of all such Losses exceeds $315,630
in which case the Seller and the Stockholder shall be liable under this
Section 9.2(a) for the amount of such Losses in excess of $315,630, up to a
maximum aggregate amount of $3,156,300 (the "Cap"); provided, further, that
-------- -------
in the case of Losses resulting from a breach of the representations and
warranties set forth in Sections 3.1, 3.2, 3.3, 3.6, 3.9, and 3.13, the
Seller and the Stockholder shall be liable for all Losses resulting from
such a breach up to a maximum aggregate amount of $31,563,000; and
(b) any nonfulfillment of any agreement or covenant of Seller or
Stockholder contained herein or in any agreement or instrument required to
be entered into in connection herewith or any Liability of the Company
which is not an Assumed Liability (including any Liability of the Company
that becomes a Liability of the Buyer under any bulk transfer law of any
jurisdiction, under any common law doctrine of de facto merger or successor
liability, or otherwise by operation of law).
In the event that Seller or Stockholder may be obliged to indemnify Buyer under
both subsection (a) and subsection (b) of this Section 9.2, their obligations
under subsection (b) shall be controlling and the limitations provided in
Sections 9.1 and 9.2(a) hereof relating to their obligations in respect of
Losses resulting from the inaccuracy of any representation and warranty, or any
misrepresentation, breach of warranty as described in Section 9.2(a), shall not
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apply. Buyer shall give Seller and Stockholder written notice for any claim
made in respect of the indemnification provided in this Section 9.2, whether or
not arising out of a claim by a third party.
9.3. Indemnity by Buyer. The Buyer hereby agrees to indemnify, defend
------------------
and hold harmless the Seller and the Stockholder and their respective directors,
officers, stockholders, employees, agents and Affiliates against and in respect
of all Losses that arise out of or result from the inaccuracy of any
representation or warranty made by Buyer herein, or resulting from any
misrepresentation, breach of warranty or nonfulfillment of any agreement or
covenant of Buyer contained herein or in any agreement or instrument required to
be entered into in connection herewith or from any misrepresentation in or
omission from any schedule, document, certificate or other instrument required
to be delivered by Buyer hereunder; provided, however, that the Buyer shall be
-------- -------
liable under this Section 9.3 in respect of Losses only to the extent the
aggregate of such Losses exceeds $315,630 in which case the Buyer shall be
liable under this Section 9.3 for the amount of such Losses in excess of
$315,630, up to a maximum aggregate amount of $3,156,300; provided, further, in
-------- -------
the case of Losses resulting from a breach of the representations and warranties
set forth in Sections 4.1 and 4.2, the Buyer shall be liable for all Losses
resulting from such a breach up to a maximum aggregate amount of $31,563,000.
9.4. Matters Involving Third Parties.
-------------------------------
(a) If any third party shall notify either Party (the
"Indemnified Party") with respect to any matter (a "Third Party Claim")
which may give rise to a claim for indemnification against the other Party
(the "Indemnifying Party") under this Section 9, then the Indemnified Party
shall promptly deliver notice to the Indemnifying Party thereof in writing;
provided, however, that no delay on the part of the Indemnified Party in
-------- -------
delivering notice to the Indemnifying Party shall relieve the Indemnifying
Party from any obligation hereunder unless (and then solely to the extent)
the Indemnifying Party is materially prejudiced thereby.
(b) The Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party so long as (i) the
Indemnifying Party delivers notice to the Indemnified Party in writing
within 20 days after the Indemnified Party has given notice of the Third
Party Claim that the Indemnifying Party will indemnify the Indemnified
Party from and against the entirety of any Losses the Indemnified Party may
suffer resulting from, arising out of, relating to, in the nature of, or
caused by the Third Party Claim, (ii) the Indemnifying Party provides the
Indemnified Party with evidence reasonably acceptable to the Indemnified
Party that the Indemnifying Party will have the financial resources to
defend against the Third Party Claim and fulfill its indemnification
obligations hereunder, (iii) the Third Party Claim involves only money
damages and does not seek an injunction or other equitable relief, (iv)
settlement of, or an adverse judgment with respect to, the Third Party
Claim is not, in the good faith judgment of the Indemnified Party, likely
to establish a precedential custom or practice adverse to the continuing
business interests of the Indemnified Party, (v) the Indemnifying Party's
defense of the Third Party Claim does not, in the good faith judgment of
the Indemnified Party, create a conflict between the Indemnified Party's
position and the position of the
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Indemnifying Party respecting defense of the claim (such conflict to
include, with respect to Buyer as the Indemnified Party, any defense by the
Indemnifying Party that could, in the Buyer's good faith judgment, have a
negative effect on the Buyer's relationship with a customer) and (vi) the
Indemnifying Party conducts the defense of the Third Party Claim actively
and diligently.
(c) So long as the Indemnifying Party is conducting the defense
of the Third Party Claim in accordance with Section 9.4(b) above, (i) the
Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Third Party Claim, (ii) the
Indemnified Party will not consent to the entry of any judgment or enter
into any settlement with respect to the Third Party Claim without the prior
written consent of the Indemnifying Party (which consent shall not
unreasonably be withheld), and (iii) the Indemnifying Party will not
consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim unless written agreement is obtained
releasing the Indemnified Party from all Liability thereunder.
(d) In the event any of the conditions in Section 9.4(b) above is
or becomes unsatisfied, however, (i) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any
settlement with respect to, the Third Party Claim in any manner it may
reasonably deem appropriate (and the Indemnified Party need not consult
with, or obtain any consent from, any Indemnifying Party in connection
therewith), (ii) the Indemnifying Party will reimburse the Indemnified
Party promptly and periodically for the costs of defending against the
Third Party Claim (including reasonable attorneys' fees and expenses), and
(iii) the Indemnifying Party will remain responsible for any Losses the
Indemnified Party may suffer resulting from, arising out of, relating to,
in the nature of, or caused by the Third Party Claim as provided in this
Section 9.
9.5. Recourse Against Escrowed Funds. The Buyer and its Affiliates agree
-------------------------------
that claims under this Section 9 shall first be satisfied from the Escrowed
Funds, if any.
10. Termination.
10.1. Termination of Agreement. Either of the Parties may terminate this
------------------------
Agreement as provided below:
(a) The Parties may terminate this Agreement by mutual written
consent at any time prior to the Closing;
(b) The Buyer may terminate this Agreement by giving written
notice to the Sellers at any time prior to the Closing (i) in the event the
Seller or the Stockholder has breached any representation, warranty, or
covenant contained in this Agreement in any material respect, the Buyer has
notified such Party of the breach, and the breach has continued without
cure for a period of 30 days after the notice of breach or (ii) if the
Closing shall not have occurred on or before the 45/th/ day after the date
hereof, by reason of the failure of any condition precedent under Section
6.1 hereof (unless the failure
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results primarily from the Buyer itself breaching any representation,
warranty, or covenant contained in this Agreement);
(c) The Seller and the Stockholder may terminate this Agreement
by giving written notice to the Buyer at any time prior to the Closing (i)
in the event the Buyer has breached any representation, warranty, or
covenant contained in this Agreement in any material respect, the Seller
and the Stockholder have notified the Buyer of the breach, and the breach
has continued without cure for a period of 30 days after the notice of
breach or (ii) if the Closing shall not have occurred on or before the
45/th/ day after the date hereof, by reason of the failure of any condition
precedent under Section 6.2 hereof (unless the failure results primarily
from the Seller or the Stockholder themselves breaching any representation,
warranty, or covenant contained in this Agreement);
(d) The Buyer may terminate this Agreement by giving written
notice to the Seller and the Stockholder at any time prior to the Closing
if: (i) the Stockholder's Board or the Company's board of directors
withdraws or modifies in a manner adverse to Buyer its approval of this
Agreement or approves any Company Takeover Proposal; or (ii) the Seller,
the Stockholder or any of their officers, directors, employees,
representatives or agents takes any of the actions that would be proscribed
by Section 5.7(a) but for the exceptions therein allowing certain actions
to be taken pursuant to the proviso in the first sentence of Section
5.7(a);
(e) The Seller and the Stockholder may terminate this Agreement
by giving written notice to the Buyer at any time prior to the Closing if
the Stockholder's Board, in compliance with the provisions of Section 5.7
hereof, has determined that it is necessary to accept a Superior Company
Proposal; and
(f) By either Buyer, on the one hand, or the Seller and the
Stockholder, on the other hand, if a court of competent jurisdiction or
other governmental authority shall have issued a non-appealable final
order, decree or ruling or taken any other non-appealable action, in each
case having the effect of permanently restraining, enjoining or otherwise
prohibiting the transfer of the Acquired Assets.
10.2. Effect of Termination. If any Party terminates this Agreement
---------------------
pursuant to Section 10.1 above, all rights and obligations of the Parties
hereunder shall terminate without any Liability of any Party to any other Party
(except for any Liability of any Party then in breach).
11. Miscellaneous.
11.1. Press Releases and Public Announcements. No Party shall issue any
---------------------------------------
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Closing without the prior approval of the other
Party; provided, however, that either Party may make any public disclosure it
-------- -------
believes in good faith is required by applicable law or any listing or trading
agreement concerning its publicly-traded securities (in which case the
disclosing Party will provide the other Party with the opportunity to review in
advance the disclosure).
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11.2. No Third Party Beneficiaries. This Agreement shall not confer any
----------------------------
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns and such other Persons entitled to
indemnification under Section 9.
11.3. Entire Agreement. This Agreement (including the documents referred
----------------
to herein) constitutes the entire agreement between the Parties and supersedes
any prior understandings, agreements, or representations by or between the
Parties, written or oral, to the extent they related in any way to the subject
matter hereof.
11.4. Succession and Assignment. This Agreement shall be binding upon and
-------------------------
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party; provided, however, that the Buyer may (i) with the Seller's
-------- -------
consent, not to be unreasonably withheld, assign any or all of its rights and
interests hereunder to one or more of its Affiliates, (ii) designate one or more
of its Affiliates to perform its obligations hereunder and (iii) assign all of
its rights and interests hereunder to any lenders as security for providing
financing for the Transactions, but no such assignment shall relieve the Buyer
of any of its obligations hereunder.
11.5. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
11.6. Headings. The section headings contained in this Agreement are
--------
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
11.7. Notices. All notices, requests, demands and other communications
-------
hereunder will be in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given and delivered (i) upon
confirmation of receipt of facsimile at the facsimile, (ii) one Business Day
following the date sent when sent by overnight delivery by recognized overnight
courier service for delivery on the next Business Day and (iii) five Business
Days following the date mailed when mailed by registered or certified mail
return receipt requested and postage prepaid at the following address:
If to the Seller or the Stockholder
-----------------------------------
Nu Horizons Electronics Corporation
00 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxx Xxxxxxx
Vice President of Finance
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Copy to:
-------
Blau, Kramer, Wactlar and Xxxxxxxxx
000 Xxxxxxx Xxxxxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxx X. Xxxxxxxxx
If to the Buyer:
---------------
NV Acquisition LLC
c/o Golden Gate Capital
Xxx Xxxxxxxxxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxxxxx Xxxx
Copy to:
-------
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Either
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Party
notice in the manner herein set forth.
11.8. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the domestic laws of the Commonwealth of Massachusetts without
giving effect to any choice or conflict of law provision or rule (whether of the
Commonwealth of Massachusetts or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the Commonwealth of
Massachusetts.
11.9. Amendments and Waivers. No amendment of any provision of this
----------------------
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Seller and the Stockholder. No waiver by either Party of any
default, misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
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11.10. Severability. Any term or provision of this Agreement that is
------------
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
11.11. Expenses.
--------
(a) Each of the Buyer, on the one hand, and the Seller and the
Stockholder, on the other hand, will bear their own costs and expenses
(including legal and accounting fees and expenses) incurred in connection
with this Agreement and the Transactions, it being understood that any such
expenses of the Company shall be reflected on the Closing Statement as a
current liability or, to the extent paid prior to Closing, a reduction of
cash.
(b) The Seller and the Stockholder shall pay to Buyer a fee of
$633,402 if: (i) the Buyer terminates this Agreement pursuant to Section
10.1(d)(i); (ii) the Buyer terminates this Agreement pursuant to Section
10.1(d)(ii) as a result of a material breach of Section 5.7; (iii) the
Seller or the Stockholder terminates this Agreement pursuant to Section
10.1(e); or (iv) after the date of this Agreement, (A) any Person makes a
Company Takeover Proposal, (B) this Agreement is terminated pursuant to
Section 10.1(b)(i) due to a willful breach or pursuant to Section
10.1(b)(ii) and (C) within twelve months of such termination the Company
enters into a definitive agreement to consummate, or consummates, the
transactions contemplated by a Company Takeover Proposal. Any fee due
under this Section 11.11(b) shall be paid by wire transfer of same-day
funds on the date of termination of this Agreement, except that in the case
of clause (iv) above such payment shall be made on the date of execution of
such definitive agreement, or, if earlier, the consummation of such
transactions).
11.12. Construction. The Parties have participated jointly in the
------------
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring either Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. Nothing disclosed in
a Schedule shall be deemed adequate to disclose an exception to a representation
or warranty made herein unless the Schedule identifies the exception. Without
limiting the generality of the foregoing, the mere listing (or inclusion of a
copy) of a document or other item shall not be deemed adequate to disclose an
exception to a representation or warranty made herein (unless the representation
or warranty has to do with the existence of the document or other item itself).
The Parties intend that each representation, warranty, and covenant contained
herein shall have independent significance. If either Party has breached any
representation, warranty, or covenant contained herein in any respect, the fact
that there exists another representation, warranty, or covenant relating to the
same subject matter (regardless of the relative levels of specificity) which the
Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty, or covenant.
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11.13. Incorporation of Exhibits and Schedules. The Exhibits and
---------------------------------------
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof. Any matter that is disclosed on a Schedule which matter, on
its face, is applicable to another Schedule shall be deemed disclosed on such
other Schedule.
11.14. Specific Performance. Each of the Parties acknowledges and agrees
--------------------
that the other Party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are materially breached. Accordingly, each of the Parties
agrees that the other Party shall be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to enforce specifically
this Agreement and the terms and provisions hereof in any Action instituted in
any court of the United States or any state thereof having jurisdiction over the
Parties and the matter in addition to any other remedy to which it may be
entitled, at law or in equity.
11.15. Consent to Jurisdiction. Each Party to this Agreement, by its
-----------------------
execution hereof, (i) hereby irrevocably submits to the exclusive jurisdiction
of the state courts of The Commonwealth of Massachusetts or the United States
District Court located in the District of Massachusetts for the purpose of any
action, claim, cause of action or suit (in contract, tort or otherwise),
inquiry, proceeding or investigation arising out of or based upon this Agreement
or relating to the subject matter hereof, (ii) hereby waives to the extent not
prohibited by applicable law, and agrees not to assert by way of motion, as a
defense or otherwise, in any such action, any claim that it is not subject
personally to the jurisdiction of the above-named courts, that its property is
exempt or immune from attachment or execution, that any such proceeding brought
in one of the above-named courts is improper, or that this Agreement or the
subject matter hereof may not be enforced in or by such court, and (iii) hereby
agrees not to commence any action, claim, cause of action or suit (in contract,
tort or otherwise), inquiry, proceeding or investigation arising out of or based
upon this Agreement or relating to the subject matter hereof other than before
one of the above-named courts nor to make any motion or take any other action
seeking or intending to cause the transfer or removal of any such action, claim,
cause of action or suit (in contract, tort or otherwise), inquiry, proceeding or
investigation to any court other than one of the above-named courts whether on
the grounds of inconvenient forum or otherwise. Each Party hereby consents to
service of process in any such proceeding in any manner permitted by
Massachusetts law, and agrees that service of process by registered or certified
mail, return receipt requested, at its address specified pursuant to Section
11.7 hereof is reasonably calculated to give actual notice.
11.16. Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE
--------------------
LAW WHICH CANNOT BE WAIVED, THE PARTIES HEREBY WAIVE, AND COVENANT THAT THEY
WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO
TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT
MATTER HEREOF, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN
TORT OR CONTRACT OR OTHERWISE.
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[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
BUYER
-----
NV ACQUISITION LLC
By: /s/ Xxxxxxxx Xxxx
Title: Authorized Signatory
SELLERS
-------
NUVISIONS MANUFACTURING, INC.
By: /s/ Xxxxxxx Xxxxxxxx
Title: Vice President and Clerk
NU HORIZONS ELECTRONICS CORPORATION
By: /s/ Xxxxxxx Xxxxxxxx
Title: Vice President and Secretary
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