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Exhibit 2.1
EXECUTION VERSION
ASSET PURCHASE AGREEMENT
by
and among,
TOWER AUTOMOTIVE, INC.,
a debtor-in-possession
and its
DEBTOR AFFILIATE SIGNATORIES HERETO,
and
TA ACQUISITION COMPANY, LLC
Dated as of May 1, 2007
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TABLE OF CONTENTS
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ARTICLE 1.
DEFINITIONS...................................................
1
Section 1.1.
Certain Defined
Terms................................... 1
Section 1.2.
Other Defined
Terms..................................... 12
ARTICLE 2. PURCHASE AND
SALE............................................. 12
Section 2.1.
Transfer of Acquired
Assets and Assumption of Assumed
Liabilities.............................................
12
Section 2.2.
Right to Contest
Claims................................. 12
Section 2.3.
Excluded
Liabilities.................................... 12
Section 2.4.
Allocation of Purchase
Price............................ 12
Section 2.5.
Deposit.................................................
12
Section 2.6.
Closing.................................................
12
Section 2.7.
Letters of
Credit....................................... 12
Section 2.8.
Closing Deliveries by
Seller............................ 12
Section 2.9.
Closing Deliveries by
Purchaser......................... 12
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY................. 12
Section 3.1.
Organization............................................
12
Section 3.2.
Bank Accounts; Letters
of Credit........................ 12
Section 3.3.
Affiliate
Transactions.................................. 12
Section 3.4.
Insurance...............................................
12
Section 3.5.
Accounts Receivable,
Inventory and Accounts Payable..... 12
Section 3.6.
Export Control
Laws..................................... 12
Section 3.7.
Certain
Payments........................................ 12
Section 3.8.
Authority;
Enforceability............................... 12
Section 3.9.
No Conflicts or
Violations; Consents.................... 12
Section 3.10.
Title to Assets and Location of Assets..................
12
Section 3.11.
Financial Information...................................
12
Section 3.12. No
Undisclosed Liabilities.............................. 12
Section 3.13.
Absence of Certain Changes or Events....................
12
Section 3.14.
Contracts...............................................
12
Section 3.15.
Suppliers...............................................
12
Section 3.16.
Compliance with Law.....................................
12
Section 3.17.
Litigation..............................................
12
Section 3.18.
Employee Compensation and Benefit Plans; ERISA..........
12
Section 3.19.
Labor and Employment Matters............................
12
Section 3.20.
Properties..............................................
12
Section 3.21.
Intellectual Property...................................
12
Section 3.22.
Environmental Laws......................................
12
Section 3.23.
Brokers.................................................
12
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Section 3.24.
Tax Matters.............................................
12
Section 3.25.
Disclosure..............................................
12
Section 3.26. No
Other Representations or Warranties.................. 12
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF
PURCHASER................... 12
Section 4.1.
Organization............................................
12
Section 4.2.
Authority;
Enforceability............................... 12
Section 4.3.
Non-Contravention.......................................
12
Section 4.4.
Governmental
Consents................................... 12
Section 4.5.
Financing...............................................
12
Section 4.6.
Brokers.................................................
12
Section 4.7.
Acquired Assets "AS
IS"; Purchaser's Acknowledgment
Regarding Same..........................................
12
ARTICLE 5. ADDITIONAL
AGREEMENTS......................................... 12
Section 5.1.
Conduct of Business
Prior to the Closing................ 12
Section 5.2.
Access to
Information................................... 12
Section 5.3.
Superior
Offers......................................... 12
Section 5.4.
Bankruptcy Court
Orders................................. 12
Section 5.5.
Notice of
Filings....................................... 12
Section 5.6.
Further Action;
Reasonable Best Efforts................. 12
Section 5.7.
Public
Announcements.................................... 12
Section 5.8.
Availability of
Business Records; Cooperation Following
the Closing.............................................
12
Section 5.9.
Financing
Assistance.................................... 12
Section 5.10.
Further Assurances......................................
12
Section 5.11.
Reorganizations.........................................
12
Section 5.12.
Transfer Taxes..........................................
12
Section 5.13.
Name Change.............................................
12
Section 5.14.
Certain Contract Matters................................
12
Section 5.15.
Certain Tax Matters.....................................
12
Section 5.16.
Assumed Contracts and Cure Amounts......................
12
ARTICLE 6. EMPLOYEE
MATTERS.............................................. 12
Section 6.1.
Employee
Matters........................................ 12
Section 6.2.
Management Incentive
Plan............................... 12
ARTICLE 7. CONDITIONS TO
CLOSING......................................... 12
Section 7.1.
Mutual Conditions to
Closing............................ 12
Section 7.2.
Conditions to
Obligations of Purchaser.................. 12
Section 7.3.
Conditions to
Obligations of Seller..................... 12
ARTICLE 8. TERMINATION, AMENDMENT AND
WAIVER............................. 12
Section 8.1.
Termination.............................................
12
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Section 8.2.
Effect of
Termination................................... 12
Section 8.3.
Amendment...............................................
12
Section 8.4.
Waiver..................................................
12
ARTICLE 9. GENERAL
PROVISIONS............................................ 12
Section 9.1.
Non-Survival of
Representations, Warranties and
Agreements..............................................
12
Section 9.2.
Materiality; Company
Disclosure Schedule................ 12
Section 9.3.
Notices.................................................
12
Section 9.4.
Severability............................................
12
Section 9.5.
Entire
Agreement........................................ 12
Section 9.6.
Assignment..............................................
12
Section 9.7.
No Third Party
Beneficiaries............................ 12
Section 9.8.
Governing
Law........................................... 12
Section 9.9.
Jurisdiction............................................
12
Section 9.10.
Waiver of Jury Trial....................................
12
Section 9.11.
Counterparts; Electronic Transmission...................
12
Section 9.12.
Interpretation..........................................
12
Section 9.13.
Expenses................................................
12
Section 9.14.
Currency................................................
12
Section 9.15.
Preparation of this Agreement...........................
12
Section 9.16.
Releases................................................
12
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EXHIBITS
Exhibit A
- Form of Assignment and Assumption Agreement
Exhibit B
- Form of Bill of Sale
Exhibit C
- Marketing Protocol Order
Exhibit D
- Escrow Agreement
Exhibit E
- Form of Plan
Exhibit F
- Form of Sale Order
SCHEDULES
Schedule 1.1(a)(i) - Chapter 5 Claims
Schedule 1.1(a)(ii) - Excluded Chapter 5
Claims
Schedule 1.1(a)(iii) -
Seller's Budget
Schedule 1.1(a)(iv) - Excluded Foreign
Entity
Schedule 1.1(a)(v) - Additional Excluded
Assets
Schedule 1.1(a)(vi) - Knowledge Officers
Schedule 1.1(a)(vii) -
Retiree Benefits Settlements
Schedule 1.1(a)(viii) - Pre-petition Secured Tax Obligations
Schedule 1.1(a)(ix) - Allowed Priority Tax
Obligations - Taxes
Schedule 3.1(b)
- Organization
(Domestic)
Schedule 3.1(b) -
Organization (Foreign)
Schedule 3.1(c) -
Options
Schedule 3.2(a) -
Bank Accounts
Schedule 3.2(b) -
Letters of Credit
Schedule 3.3
- Affiliate Transactions
Schedule 3.4
- Insurance
Schedule 3.5(c) -
Accounts Payable
Schedule 3.6
- Export Control Laws
Schedule 3.7
- Certain Payments
Schedule 3.8
- Authority
Schedule 3.9
- Conflicts and Consents
Schedule 3.10
- Encumbrances on Foreign Assets
Schedule 3.11(a) -
Financial Information
Schedule 3.12
- Undisclosed Liabilities
Schedule 3.13
- Absence of Certain Changes or Events
Schedule 3.14(a) -
Contracts
Schedule 3.14(b) -
Accommodation Agreements
Schedule 3.14(c) -
Outstanding Balances
Schedule 3.14(d) -
Exceptions to Validity of Contracts
Schedule 3.14(e) -
Violation and Default
Schedule 3.14(f) - Foreign
Indebtedness
Schedule 3.14(g) - Foreign
Unrestricted Cash Balances
Schedule 3.14(h) -
Non-Foreign Indebtedness
Schedule 3.14(i) -
Non-Foreign Unrestricted Cash Balances
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Schedule 3.15(a) - Top Ten
Suppliers
Schedule 3.15(b) - Changes
in Supplier Relationships
Schedule 3.16
- Compliance with Law
Schedule 3.17
- Litigation
Schedule 3.18(a) - Employee
Plans
Schedule 3.18(b) - Assumed
Plans
Schedule 3.18(d) - Changes
to Employee Plans
Schedule 3.18(e) -
Continuing Pension Benefits
Schedule 3.19(a) - Labor
and Employment Matters
Schedule 3.19(b) - Plant
Closings and Layoffs
Schedule 3.19(c) - Open
U.S. Facilities Collective Bargaining Agreements
and Relationships
Schedule 3.20(a) - Owned
Real Property
Schedule 3.20(b) - Leased
Real Property
Schedule 3.20(c) - Title
Policies and Holders of Encumbrances
Schedule 3.21(a) -
Intellectual Property
Schedule 3.22
- Environmental Laws
Schedule 3.23
- Brokers
Schedule 3.24
- Tax
Schedule 5.1(a)(x) - Consents
Schedule 5.1(b) -
Conduct Prior to Closing (restrictions)
Schedule 5.2(a)(i) - Contact Group
Schedule 5.5
- Notice of Filing
Schedule 5.16
- Assumed Contracts
Schedule 7.2(f) -
Required Consents
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of May 1, 2007 (this
"AGREEMENT"), by and among Tower Automotive, Inc., a Delaware
corporation, a
debtor-in-possession (the "COMPANY"), the debtor affiliates of the
Company that
are signatories to this Agreement (the Company and, such debtor
affiliates are
referred to collectively herein as "SELLER"), and TA Acquisition
Company, LLC, a
Delaware limited liability company ("PURCHASER"). Seller and
Purchaser, each a
"PARTY" and, collectively, the "PARTIES."
WITNESSETH:
WHEREAS, on February 2, 2005, each of the Persons included within
the
definition of Seller filed a voluntary petition for relief under
Chapter 11 of
the United States Bankruptcy Code (the "BANKRUPTCY CODE") in the
United States
Bankruptcy Court for the Southern District of New York (the
"BANKRUPTCY COURT"),
which cases are jointly administered under Case No. 05-10578 (ALG)
(the
"BANKRUPTCY CASE"); and
WHEREAS, Seller wishes to sell to Purchaser and Purchaser wishes
to
purchase from Seller substantially all of the assets of Seller and
to assume
from Seller certain Liabilities, pursuant to the terms and
conditions set forth
in this Agreement in accordance with sections 105, 363, 365,
1123(a)(5)(D) and
1141(c) of the Bankruptcy Code.
NOW, THEREFORE, in consideration of the foregoing premises, the
mutual
covenants, representations and warranties herein contained, and
such other good
and valuable consideration, the receipt and sufficiency of which is
hereby
acknowledged, the Parties, intending to be legally bound, hereby
agree as
follows:
ARTICLE 1.
DEFINITIONS
Section 1.1. Certain Defined Terms. As used in this Agreement,
the
following terms shall have the following meanings:
"ACQUIRED ASSETS" means, except for the Excluded Assets,
(a) all of the property and assets of Seller including, but not
limited to: all property, real and personal; all assets, whether
tangible or
intangible; all cash and cash equivalents; all accounts receivable;
all
intercompany receivables including all claims against Foreign
Entities; all
deposits relating to any Assumed Contracts; all prepaid expenses
relating to
Acquired Assets or Assumed Contracts; all inventory; all rights in
patents,
trademarks, copyrights and all other Intellectual Property
(including all
computer software or systems) owned, controlled or licensed
(subject to any
rights therein previously granted by Seller to a third party), all
rights to
payment from the licensees of Intellectual Property pursuant to
section 365(n)
of the Bankruptcy Code; all Chapter 5 claims (the "CHAPTER 5
CLAIMS")
(including, but not limited to, those set forth on Schedule
1.1(a)(i)) other
than those set forth on Schedule 1.1(a)(ii) attached hereto); all
other claims
of any kind other than (i) claims in respect of Excluded Assets and
(ii) claims
directly related to Excluded Liabilities which (A) are not
Liabilities to
customers,
<PAGE>
suppliers or other business relations with whom Purchaser does
business after
the Closing and (B) which are identified to Purchaser in advance of
any action
being taken to collect on such claims and as to which Purchaser
does not object
to such claim being asserted in its reasonable discretion, all
Business Records;
all beneficial tax attributes, if any, to the extent transferable
by applicable
law; all of the stock, limited liability interests, partnership
interests, joint
venture interests or any other equity interests held by any of the
Tower Group
entities (whether a majority or a minority interest and including,
but not
limited to, the capital stock or equity interests of the Foreign
Entities
(including, without limitation, all interests in Metalsa), but not
the capital
stock of Seller), and all good will;
(b) the following to the extent they relate to any Acquired
Asset, Assumed Contract, Assumed Liability or any claim or
allegation that
Purchaser is liable or responsible for a Liability of Seller,
whether or not
Purchaser has assumed such Seller Liability: claims, credits,
security or other
deposits, including recoverable deposits, prepayments, prepaid
assets, prepaid
expenses, prepaid rent, deferred charges, refunds or claims for
refunds, causes
of action (including, but not limited to, any recovery with respect
to
litigation involving Metalsa), defenses, counterclaims,
crossclaims, third party
claims, rights of recovery, rights of setoff and rights of
recoupment, insurance
proceeds and all rights under historical or current insurance
policies of any
member of the Tower Group, and, in each case, security interests
relating
thereto, as applicable, as of the Closing Date;
(c) all the assets that are reflected on the Balance Sheet
provided such assets have not been disposed of by the Tower Group
in the
ordinary course of business or pursuant to an Order of the
Bankruptcy Court, and
all assets acquired by the Tower Group in the ordinary course of
business or
pursuant to an Order of the Bankruptcy Court after the Balance
Sheet Date; and
(d) all trusts, insurance contracts, accounts and funding
arrangements relating to any Assumed Plans.
For avoidance of doubt, notwithstanding anything herein to the
contrary, no property, asset, right, title or interest of Seller
included in the
definition of Excluded Asset shall be an Acquired Asset.
"ACQUISITION PROPOSAL" means any proposal or offer (i) for a merger
or
other business combination involving the Tower Group, (ii) to
acquire in any
manner, directly or indirectly, an equity interest in the Tower
Group or any
voting securities of the Tower Group, (iii) to acquire any portion
of the assets
of the Tower Group, other than in the ordinary course of business
or (iv) in
respect of any plan of reorganization other than the Plan.
"AFFILIATE" means, with respect to any specified Person, any
other
Person that directly, or indirectly through one or more
intermediaries,
controls, is controlled by, or is under common control with, such
specified
Person, where "control" means the power, directly or indirectly, to
direct or
cause the direction of the management and policies of another
Person, whether
through the ownership of voting securities, by contract or
otherwise.
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"AFFILIATED GROUP" means any affiliated group within the meaning
of
Code Section 1504(a) or any similar group defined under a similar
provision of
state, local or foreign Law.
"ALLOWED" means, with respect to any Claim, except as otherwise
provided herein: (a) a Claim that has been scheduled by Seller in
its Schedules
as neither disputed, contingent nor unliquidated and for which the
claim amount
has not been identified as unknown, and as to which Seller or other
party in
interest has not filed an objection with the Bankruptcy Court by
the Claims
Objection Bar Date; (b) a Claim that either is not a Disputed Claim
or has been
allowed by a Final Order; (c) a Claim that is allowed: (i) in any
stipulation of
amount and nature of Claim executed prior to the Confirmation Date
and approved
by the Bankruptcy Court; (ii) in any stipulation with Seller of
amount and
nature of Claim executed on or after the Confirmation Date; or
(iii) in or
pursuant to any contract, instrument, indenture or other agreement
entered into
or assumed in connection herewith; (d) a Claim relating to a
rejected Executory
Contract or Unexpired Lease that either (i) is not a Disputed Claim
or (ii) has
been allowed by a Final Order, in either case only if a proof of
Claim has been
Filed by the applicable bar date or has otherwise been deemed
timely Filed under
applicable law; (e) a Claim that is allowed pursuant to the terms
hereof; or (f)
a Disputed Claim as to which a proof of claim has been timely filed
and as to
which no objection has been filed by the Claims Objection Bar Date.
Each
capitalized term used in this definition that is not otherwise
defined herein,
shall have the respective meaning assigned to such term in the
Plan.
"ALLOWED PRIORITY CLAIMS" means any claim accorded priority in
right
of payment pursuant to section 507(a) of the Bankruptcy Code.
"ALLOWED SECURED CLAIMS" has the meaning set forth in the Plan.
"ALTERNATIVE TRANSACTION" means a transaction that involves a sale
of
a material portion of the Acquired Assets, a Chapter 11 plan or a
Chapter 7
liquidation.
"ANCILLARY AGREEMENTS" means the Escrow Agreement, the Assignment
and
Assumption Agreement, the Bill of Sale and the Intellectual
Property
Assignments.
"ANTITRUST LAW" means the Sherman Act, as amended, the Clayton Act,
as
amended, the HSR Act, the Federal Trade Commission Act, as amended,
and all
other federal, state and foreign, statutes, rules, regulations,
Orders, decrees,
administrative and judicial doctrines and other Laws that are
designed or
intended to prohibit, restrict or regulate actions having the
purpose or effect
of monopolization or restraint of trade or lessening of competition
through
merger or acquisition.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means an assignment and
assumption agreement in the form and substance of Exhibit A
attached hereto.
"ASSUMED CONTRACTS" means those of Seller's Collective
Bargaining
Agreements identified on Schedule 3.19(c), the Change in Control
Agreements, the
KERP Agreements and subject to Section 5.16 herein any other
contract expressly
set forth on Schedule 5.16 attached hereto.
"ASSUMED LIABILITIES" means, and is limited to:
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(a) The following post-petition Liabilities of Seller expressly
set forth in this definition:
(i) all Working Capital Obligations;
(ii) all benefit obligations pursuant to the Consolidated
Pension Plan and the other Assumed Plans;
(iii) all contingent Liabilities payable pursuant to the
terms of the Change in Control Agreements;
(iv) the KERP Liability;
(v) all Liabilities pursuant to Assumed Contracts arising
after the Closing. For avoidance of doubt, such obligations shall
not include
any amounts necessary to satisfy the Cure Amounts pursuant to
Bankruptcy Code
section 365 in connection with the assignment and assumption of the
Assumed
Contracts;
(vi) all statutory environmental Liabilities which (A) arise
under Environmental Laws, (B) are associated with real property
acquired by
Purchaser or its Affiliates hereunder, (C) are enforced by a
Governmental Entity
and (D) are not "claims" as defined in section 101(5) of the
Bankruptcy Code;
(vii) the current balance due with respect to the Marsh
Financing, provided all benefits of such insurance policies are
received by or
are available to Purchaser, as contemplated in the definition of
Acquired
Assets;
(viii) if no amount is paid by Purchaser for the IRB Payment
pursuant to Section 2.1(a)(iii), all Seller's Liabilities pursuant
to the
Industrial Revenue Bonds; and
(ix) the Retiree Benefits Settlements (to the extent
provided therein).
(b) pre- and post-petition workers compensation claims.
(c) Notwithstanding anything set forth to the contrary in this
Agreement, Assumed Liabilities shall not include any amounts
included in the
categories constituting the Capped Payments.
"ASSUMED PLANS" means the Consolidated Pension Plan and the
other
Employee Plans expressly set forth on Schedule 3.18(b) attached
hereto.
"ASSUMED PLAN DOCUMENTS AND RECORDS" shall mean any and all
written
records, documents and communications of, or relating to, any
Assumed Plan,
including without limitation any and all correspondence,
governmental filings,
reports, financial statements, trust statements, plan documents,
trust
documents, amendments, summary plan descriptions, participant and
benefit data,
benefit statements, administrative forms, administrative
manuals,
-4-
<PAGE>
domestic relations orders, minutes of any administrator or
fiduciary, fiduciary
liability insurance policies, vendor contracts, and investment
advisor,
management and trust agreements.
"AUCTION" means the auction that may be conducted by Seller
pursuant
to the Marketing Protocol Order.
"BANKRUPTCY CASE CLAIM" means, individually or collectively,
the
Allowed Secured Claims, the Bankruptcy Related Administrative
Claims, the
Allowed Priority Claims, and the Cure Amounts.
"BANKRUPTCY RELATED ADMINISTRATIVE CLAIMS" means all Allowed
administrative claims relating to:
(a) all professional fees, whether or not related to the
Bankruptcy Case, but not including the advisor fees referred to in
clause (b) of
this definition;
(b) Allowed advisor fees to (i) Lazard Freres & Co., LLC as
provided in its engagement letter with Seller as approved by Order
of the
Bankruptcy Court, dated June 15, 2005, a true and complete copy of
which was
provided to Purchaser, and (ii) to Houlihan Lokey Howard &
Zukin, Inc. as
provided in its engagement letter with the Official Committee of
Unsecured
Creditors as approved by Order of the Bankruptcy Court, dated June
14, 2005, a
true and complete copy of which was provided to Purchaser;
(c) the KERP Liability;
(d) the non-1114 related settlement payment due to the
Milwaukee
Unions in the amount of Three Million Five Hundred Thousand Dollars
($3,500,000)
as set forth in Article III.G of that certain Agreement between
Seller and the
Milwaukee Unions under 11 U.S.C. Sections 1113 and 1114, and,
approved by that
certain Order Approving Settlement Agreement With The Milwaukee
Unions, dated
May 22, 2006 (Bankruptcy Court Docket Number 1492); and
(e) (i) Goldman Sachs (DR Lease rejection claim), (ii)
Watershed
Capital Partners claim, (iii) United Furniture Workers claim; (iv)
reclamation
claims; and (v) other administrative claims not included in the
Working Capital
Obligations.
Notwithstanding the foregoing, no Bankruptcy Related
Administrative
Claim shall be included in or deemed a part of the Working Capital
Obligations.
"BILL OF SALE" means the bill of sale in the form and substance
of
Exhibit B attached hereto.
"BUDGET" means that certain budget of Seller, dated January 11,
2007
as attached hereto as Schedule 1.1(a)(iii).
"BUDGETED EXCHANGE RATES" means 0.80 Euro = 1.00 US Dollar,
2.45
Brazilian Real = 1.00 US Dollar, 1,000 Korean Won = 1.00 US Dollar
and 7.88
Chinese RMB = 1.00 US Dollar.
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"BUSINESS DAY" means any day that is not a Saturday, a Sunday or
other
day on which banks are required or authorized by law to be closed
in the City of
New York.
"BUSINESS RECORDS" means all books, records, ledgers and files
or
other similar information used or held for use in the operation or
conduct of
business by the Tower Group, including, without limitation, price
lists,
customer lists, vendor lists, mailing lists, warranty information,
catalogs,
sales promotion literature, advertising materials, brochures,
records of
operation, standard forms of documents, manuals of operations or
business
procedures, research materials, Tax Returns (except Purchaser shall
only be
entitled to a copy of income Tax Returns), contracts, instruments,
filings,
administrative and pricing manuals, records, Claim records, sales
records,
underwriting records, financial records, compliance records,
insurance policies,
and Tax records (except Purchaser shall only be entitled to a copy
of Tax
records), personnel records, corporate minute books, Assumed Plan
Documents and
Records and other materials to the extent relating, directly or
indirectly, to
the Acquired Assets, the Assumed Contracts or the Assumed
Liabilities, or the
assets, the businesses or the Liabilities of any Foreign Entity,
whether or not
in the possession of the Tower Group or their respective
representatives, stored
in hardcopy form or on magnetic, optical or other media, other than
in respect
of the Excluded Assets.
"CAPPED PAYMENTS BAR DATE" means the date that is thirty six
(36)
months after the Closing Date; provided, however that Seller or
the
Post-Consummation Trust, as the case may be, may, with either (i)
agreement of
Purchaser or (ii) upon Order of the Bankruptcy Court following
application for
good cause shown, extend the Capped Payments Bar Date for a period
of time not
to exceed an additional twenty four (24) months.
"CHANGE IN CONTROL" has the meaning set forth in those certain
Change
in Control Agreements by and between each of the CIC Employees and
the Company.
"CHANGE IN CONTROL AGREEMENTS" means the agreements entered
into
between Seller and each of the CIC Employees identified as Change
in Control
Agreements on Schedule 3.14(a).
"CIC EMPLOYEES" means the following individuals: Kathleen
Ligocki,
James Mallak, D. William Pumphrey, E. Renee Franklin, Kathy
Johnston, Paul
Radkoski, Jeffrey Kersten, James Bernard, Craig Corrington, Orrie
Jones, Susan
Nutson, Benson Woo, David Ro, Gyula Meleghy, Vincent Pairet, Gerrit
Kotterman,
Susan Talbot and Hans Grosse.
"CLAIMS" means any and all actions, causes of action, suits,
damages,
losses, expenses, fees, charges, costs, complaints, obligations,
promises,
controversies, rights, demands, debts, Encumbrances, taxes, lis
pendens and
claims whatsoever, whether known or unknown, suspected or claimed,
whether at
law or in equity, and whether contingent or not contingent, which
any Person may
now possess, own or hold or has at any time heretofore owned or
held against
Seller, including any claim as defined in section 101(5) of the
Bankruptcy Code.
"CODE" means the Internal Revenue Code of 1986, as amended, and
the
rules and regulations promulgated thereunder.
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"COLLECTIVE BARGAINING AGREEMENT" means any labor agreement,
collective bargaining agreement or any other labor related
agreement or
arrangement with any labor union, organization or association that
pertains to
any employees of the Tower Group.
"COMPANY SUBSIDIARIES" means the Subsidiaries of the Company,
including, without limitation, those which are included in the
definition of
Seller.
"CONFIDENTIALITY AGREEMENT" means that certain confidentiality
agreement, dated May 15, 2006, between Cerberus Capital Management,
L.P. and the
Company.
"CONFIRMATION ORDER" means an Order confirming the Plan in form
and
substance as may be approved by Purchaser in its reasonable
discretion.
"CONSOLIDATED PENSION PLAN" means the Tower Automotive
Consolidated
Pension Plan (plan number 016).
"CURE AMOUNTS" means all amounts and other consideration that
pursuant
to section 365 of the Bankruptcy Code, as of the Closing Date,
shall be required
to cure any defaults on the part of Seller pursuant to Assumed
Contracts or that
will be otherwise due to nondebtor parties pursuant to Assumed
Contracts, as a
prerequisite to the assignment and assumption of such Assumed
Contracts pursuant
to section 365 of the Bankruptcy Code.
"DIP LENDERS" means, collectively, those financial institutions
party
to the DIP Loan Credit Agreement and all permitted assigns,
transferees and
successors-in-interest thereto.
"DIP LOAN" means collectively the DIP Revolver and the DIP Term
Loan.
"DIP LOAN CREDIT AGREEMENT" means that certain Revolving Credit,
Term
Loan and Guaranty Agreement, dated February 2, 2005, among Seller,
the DIP
Lenders and certain other parties thereto, as amended, supplemented
or modified
from time to time.
"DIP REVOLVER" means that certain $300,000,000 revolving credit
facility component of the DIP Loan Credit Agreement.
"DIP TERM LOAN" means that certain $425,000,000 term loan component
of
the DIP Loan Credit Agreement, used by Sellers to repay, in full,
certain
prepetition first-lien indebtedness.
"ENCUMBRANCE" means any lien, pledge, security interest,
interest,
right of first refusal or conditional sale agreement.
"ENVIRONMENTAL LAW" means any applicable federal, state,
county,
municipal and local statutes, Laws, regulations, ordinances and
regulations and
all judicial or administrative decisions and Orders, that relate to
the
protection of worker safety and health from environmental hazards,
pollution,
and Regulated Substances or the assessment, investigation,
remediation,
restoration or protection of natural resources or the environment,
including,
without limitation, the quality of the ambient air, soil (both
surface and
subsurface), sediments, surface
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<PAGE>
water or groundwater, whether currently existing as of the date of
this
Agreement or hereafter adopted prior to the Closing Date.
"ENVIRONMENTAL PERMITS" means all permits, licenses, registrations
and
other authorizations required under applicable Environmental
Laws.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as
amended, and the rules and regulations promulgated thereunder.
"ESCROW AGENT" means Wells Fargo Bank, National Association.
"ESCROW AGREEMENT" means the escrow agreement attached hereto
as
Exhibit D.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended,
and the rules and regulations promulgated thereunder.
"EXCLUDED ASSETS" means (i) any and all rights of any Seller
pursuant
to this Agreement and the Ancillary Agreements, (ii) (A) the
Chapter 5 Claims
set forth on Schedule 1.1(a)(ii) attached hereto, including any
cash proceeds
from any settlements thereof received by Seller prior to the
Closing and (B) (i)
claims in respect of Excluded Assets and (ii) claims directly
related to
Excluded Liabilities which (I) are not Liabilities to customers,
suppliers or
other business relations with whom the Purchaser does business
after the Closing
and (II) which are identified to Purchaser in advance of any action
being taken
to collect on such claims and as to which Purchaser does not object
to such
claim being asserted in its reasonable discretion, (iii) any asset
or contract
which Purchaser identifies in writing to Seller by June 22, 2007;
provided, that
for avoidance of doubt, the exclusion of any such asset or contract
shall not
reduce or otherwise affect the amount of the Purchase Price, (iv)
any
nonmaterial asset or contract which Purchaser identifies in writing
to Seller
from June 23, 2007 until the date that is at least ten (10)
Business Days prior
to the Closing; provided, that for avoidance of doubt, the
exclusion of any such
asset or contract shall not reduce or otherwise affect the amount
of the
Purchase Price, (v) any equity interests in any of the Sellers,
(vi) any Foreign
Entity identified on Schedule 1.1(a)(iv) or as hereafter determined
by Purchaser
(provided however that any Foreign Entity which Purchaser wishes to
exclude must
be identified in writing to Seller by June 22, 2007), (vii) the
assets
identified on Schedule 1.1(a)(v), and (viii) all beneficial tax
attributes to
the extent not transferable by applicable law and Seller's United
States federal
net operating loss carryforwards. For purposes of clause (iv) of
this definition
only, "nonmaterial asset" does not include (X) any land or
buildings,
structures, fixtures or other improvements located thereon, or (Y)
any asset or
group of related assets for which Seller could reasonably be
expected to incur
fees, expenses or other Liability, net of any proceeds received, in
excess of
Five Hundred Thousand Dollars ($500,000) to dispose of any single
or group of
related assets. Notwithstanding any other provision of this
definition, any
asset excluded pursuant to any of clauses (iii), (vi) or (vii)
shall not be an
Acquired Asset. Nothing contained in this definition shall affect
or impair any
right of Purchaser to reject contracts under Section 5.16 hereof.
The
designation of certain assets as "nonmaterial" for purposes of the
notice
provisions of this definition shall not affect the determination of
materiality
for any other purpose. Notwithstanding the foregoing, Purchaser
shall have the
right at any time prior to Closing, in its
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<PAGE>
sole discretion, to designate any asset that it had identified as
an Excluded
Asset pursuant to clauses (iii), (iv), (vi) or (vii) of this
definition as an
Acquired Asset.
"EXCLUDED LIABILITIES" means any Liabilities of Seller other
than
Assumed Liabilities, including, without limitation, (a) Liabilities
directly
associated with the Excluded Assets, (b) any Indebtedness of Seller
(other than
the Industrial Revenue Bonds if the Purchaser elects to assume such
Liability),
(c) pre-petition Liabilities, Liabilities accruing pre-petition and
Liabilities
otherwise not expressly assumed by Purchaser hereunder including,
without
limitation, environmental liabilities, all other post employment
benefits
including, but not limited to, healthcare and life insurance, and
obligations in
respect of retirees other than Retiree Benefits Settlements, (d)
all
Liabilities, if any, associated with Tower Automotive Capital
Trust, Seller's
variable interest entity, (e) any Liability expunged by Order of
the Bankruptcy
Court, (f) any Liability associated with any proceeding, litigation
or
investigation respecting Seller, except as may be expressly assumed
hereunder,
and (g) indemnification agreements with Persons who are not
Governmental
Authorities with respect to Liabilities under any Environmental Law
including,
without limitation, pursuant to that certain Asset Purchase
Agreement, dated as
of January 27, 1997, among A.O. Smith Corporation, A.O. Smith
Enterprises Ltd.,
Tower Automotive Acquisition, Inc., Tower Automotive, Inc. and R.J.
Tower
Corporation and any claims related thereto.
"FINAL ORDER" means an Order as to which the time to file an
appeal, a
motion for rehearing or reconsideration or a petition for writ of
certiorari has
expired and no such appeal, motion or petition is pending.
"FIRPTA" means the Foreign Investment in Real Property Tax Act
of
1980, as amended, and the rules and regulations promulgated
thereunder.
"FOREIGN ENTITY" means any entity within the Tower Group which
was
incorporated, formed, existed or exists pursuant to the Laws of a
country other
than the United States.
"FOREIGN FINANCIAL INDEBTEDNESS" means, with respect to the
Foreign
Entities, without duplication, (a) all obligations of such Person
for borrowed
money, (b) all obligations of such Person evidenced by bonds,
debentures, notes
or similar instruments, or upon which interest payments are
customarily made,
(c) all obligations (including, without limitation, earnout
obligations) of such
Person issued or assumed as the deferred purchase price of property
or services
purchased by such Person (other than trade debt incurred in the
ordinary course
of business and due within six (6) months of the incurrence
thereof) which would
appear as liabilities on a balance sheet of such Person in
accordance with GAAP,
(d) all Indebtedness of others secured by (or for which the holder
of such
Indebtedness has an existing right, contingent or otherwise, to be
secured by)
any Encumbrance on, or payable out of the proceeds of production
from, property
owned or acquired by such Person, whether or not the obligations
secured thereby
have been assumed, (e) all guaranty obligations of such Person with
respect to
Indebtedness of another Person, (f) the principal portion of all
obligations of
such Person pursuant to capital leases, (g) all reimbursement
obligations in
respect of the maximum amount of all letters of credit issued or
bankers'
acceptances facilities created for the account of such Person and,
without
duplication, all drafts drawn thereunder (to the extent
unreimbursed), (h) all
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<PAGE>
preferred capital stock issued by such Person and, which by the
terms thereof,
could be (at the request of the holders thereof or otherwise)
subject to
mandatory sinking fund payments, redemption or other acceleration,
(i) the
Indebtedness of any partnership or unincorporated joint venture in
which such
Person is a general partner or a joint venturer (other than
Metalsa), and (j)
factoring, receivables financing or securitziations (whether or not
on the
balance sheet, and whether or not recourse); provided, however,
Foreign
Financial Indebtedness shall not include any intercompany
payables.
"GAAP" means United States generally accepted accounting principles
in
effect from time to time.
"GOVERNMENTAL AUTHORITY" means any United States federal, state
or
local or any foreign government, governmental, regulatory or
administrative
authority, agency or commission or any court, tribunal, judicial or
arbitral
body.
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act
of
1976, as amended, and the rules and regulations promulgated
thereunder.
"INDEBTEDNESS" means, with respect to any Person, without
duplication,
(a) all obligations of such Person for borrowed money, (b) all
obligations of
such Person evidenced by bonds, debentures, notes or similar
instruments, or
upon which interest payments are customarily made, (c) all
obligations of such
Person under conditional sale or other title retention agreements
relating to
property purchased by such Person (other than customary
reservations or
retentions of title under agreements with suppliers entered into in
the ordinary
course of business), (d) all obligations (including, without
limitation, earnout
obligations) of such Person issued or assumed as the deferred
purchase price of
property or services purchased by such Person (other than trade
debt incurred in
the ordinary course of business and due within six (6) months of
the incurrence
thereof) which would appear as liabilities on a balance sheet of
such Person in
accordance with GAAP, (e) all obligations of such Person under
take-or-pay or
similar arrangements, (f) all Indebtedness of others secured by (or
for which
the holder of such Indebtedness has an existing right, contingent
or otherwise,
to be secured by) any Encumbrance on, or payable out of the
proceeds of
production from, property owned or acquired by such Person, whether
or not the
obligations secured thereby have been assumed, (g) all guaranty
obligations of
such Person with respect to Indebtedness of another Person, (h) the
principal
portion of all obligations of such Person pursuant to capital
leases, (i) all
obligations of such Person under hedging agreements, excluding any
portion
thereof which would be accounted for as interest expense under
GAAP, (j) the
maximum amount of all letters of credit issued or bankers'
acceptances
facilities created for the account of such Person and, without
duplication, all
drafts drawn thereunder (to the extent unreimbursed), (k) all
preferred capital
stock issued by such Person and which by the terms thereof could be
(at the
request of the holders thereof or otherwise) subject to mandatory
sinking fund
payments, redemption or other acceleration, (l) the principal
balance
outstanding under any synthetic lease, tax retention operating
lease,
off-balance sheet loan or similar off-balance sheet financing
product, (m) the
Indebtedness of any partnership or unincorporated joint venture in
which such
Person is a general partner or a joint venturer (other than
Metalsa) and (n)
factoring, receivables financing or securitziations (whether or not
on the
balance sheet, and whether or not recourse); provided, however,
Indebtedness
shall not include any intercompany payables, operating leases or
the Marsh
Financing.
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<PAGE>
"INDUSTRIAL REVENUE BONDS" means those certain (a) $25,000,000
aggregate principal amount City of Bardstown, Kentucky Taxable
Variable Rate
Demand Industrial Revenue Bonds, Series 1995 (R.J. Tower
Corporation Project)
and (b) $20,000,000 aggregate principal amount City of Bardstown,
Kentucky
Taxable Variable Rate Demand Industrial Revenue Bonds, Series 1994
(R.J. Tower
Corporation Project).
"INTELLECTUAL PROPERTY" means any and all United States or
foreign
intellectual property, including (i) patents, patent applications
and patent
disclosures, together with all reissuances, continuations,
provisionals,
continuations-in-part, divisions, extensions and reexaminations
thereof, (ii)
trademarks, service marks, logos, trade names, corporate names and
trade dress,
including all goodwill associated therewith, and all applications,
registrations
and renewals in connection therewith, (iii) copyrights and
copyrightable works
and all applications, registrations and renewals in connection
therewith, (iv)
registrations for Internet domain names, (v) trade secrets and
confidential
business information, including inventions, ideas, research and
development,
know-how, formulas, compositions, manufacturing and production
processes and
techniques, designs, drawings and specifications, (vi) moral rights
and rights
of attribution, and (vii) computer software, including databases
and related
documentation.
"INTERESTS" means all encumbrances, including mechanics',
materialmen's and other consensual and nonconsensual encumbrances
and statutory
encumbrances, security interests and Claims, including, but not
limited to, any
"claim" as defined in section 101(5) or "lien" as defined in
section 101(37) of
the Bankruptcy Code, Liabilities, reclamation claims, mortgages,
deeds of trust,
pledges, covenants, restrictions, hypothecations, charges,
indentures, loan
agreements, instruments, contracts, leases, licenses, options,
rights of first
refusal, offsets, recoupment, rights of recovery, judgments, Orders
and decrees
of any court or foreign or domestic Governmental Authority, claims
for
reimbursement, contribution, indemnity or exoneration, assignment,
preferences,
debts, charges, suits, licenses, options, rights of recovery,
products
liability, alter-ego, environmental, successor liability, tax and
other
liabilities, causes of action or other encumbrances or restrictions
on or
conditions to transfer or assignment of any kind, including,
without limitation
to the generality of the foregoing, restrictions or conditions on
or to the
transfer, assignment or renewal of licenses, permits,
registrations, and
authorizations or approvals of or with respect to any Governmental
Authority, to
the fullest extent of the law, in each case whether secured or
unsecured, choate
or inchoate, filed or unfiled, scheduled or unscheduled, noticed or
unnoticed,
recorded or unrecorded, perfected or unperfected, Allowed or
disallowed,
contingent or noncontingent, liquidated or unliquidated, matured or
unmatured,
material or nonmaterial, disputed or undisputed, or known or
unknown, whether
arising prior to, on, or subsequent to the commencement of the
Bankruptcy Case,
whether imposed by agreement, understanding, Law, equity or
otherwise.
"IRS" means the United States Internal Revenue Service.
"KERP LIABILITY" means all amounts payable, up to a maximum of
Five
Million Eight Hundred Thousand Dollars ($5,800,000), at or after
the Closing
under the "Retention Program" approved by that certain Order, dated
March 30,
2005, Pursuant to Sections 105(a) and 363(b)(1) of the Bankruptcy
Code,
Approving and Authorizing (I) Seller's Annual Incentive Plan With
Respect to
Certain Senior Executives; (II) a Key Employee Retention Program;
and (III)
Certain of Seller's Prepetition Severance Obligations. Seller has
furnished to
Purchaser true
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<PAGE>
and complete copies of the agreements entered into with employees
of Seller
under the Key Employee Retention Program, including all transition
bonus
agreements (referred to collectively, as the "KERP AGREEMENTS")
prior to the
execution and delivery of this Agreement.
"KNOWLEDGE" means,
(i) with respect to Purchaser, the actual knowledge on the
date hereof of the executive officers of Purchaser upon due inquiry
and
investigation; and
(ii) with respect to Seller, the actual knowledge on the
date hereof of the officers, directors, and certain key employees
of the Tower
Group set forth on Schedule 1.1(a)(vi) attached hereto who are
primarily
responsible for the relevant area as to which the representation in
which
"Knowledge" is used, upon due inquiry and investigation.
"LAW" means any federal, state, local or foreign statute, law,
ordinance, regulation, rule, code or other requirement of law of a
Governmental
Authority or any Order.
"LIABILITY" and "LIABILITIES" means, as to any Person, all
Indebtedness, claims of any kind or nature, including contingent or
unliquidated
claims or any other claims falling within the definition set forth
in section
101(5) of the Bankruptcy Code, Interests, commitments,
responsibilities and
obligations of any kind or nature whatsoever, direct or indirect,
absolute or
contingent, whether known or unknown and whether or not actually
reflected, or
required to be reflected, in such Person's balance sheet or other
books and
records, including Taxes.
"MARKETING PROTOCOL ORDER" means that Order of the Bankruptcy
Court
attached hereto as Exhibit C.
"MARSH FINANCING" means loans made for the sole purpose of
financing
Seller's insurance premiums paid for the balance of the current
year.
"MATERIAL ADVERSE EFFECT" means any change, effect, event,
occurrence,
development, circumstance or state of facts materially adverse to
the business,
properties, operations, financial condition or results of
operations of the
Acquired Assets (including the Foreign Entities and their
respective
businesses), the Assumed Contracts and the Assumed Liabilities of
the Tower
Group, taken as a whole or which materially impair the ability of
Seller to
perform its obligations under this Agreement or have a materially
adverse effect
on or prevent or materially delay the consummation of the
transactions
contemplated by this Agreement; provided, however, the following
shall be
excluded from any determinations as to whether a Material Adverse
Effect has
occurred: any change, effect, event, occurrence, development,
circumstance or
state of facts in general economic or political conditions,
conditions in the
United States or worldwide capital markets and any act of terrorism
or any
outbreak of hostilities or war.
"NET FOREIGN FINANCIAL INDEBTEDNESS" means an amount,
calculated
pursuant to GAAP and using Budgeted Exchange Rates, equal to:
(i) the average daily balance for the thirty (30) calendar
days immediately preceding the Closing Date of the Foreign
Financial
Indebtedness; less
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<PAGE>
(ii) the average daily balance for the thirty (30) calendar
days immediately preceding the Closing Date of the unrestricted
cash on hand of
the Foreign Entities. For avoidance of doubt, any restricted cash
shall not be
deducted for the purposes of clause (ii) of this definition of Net
Foreign
Financial Indebtedness, which such restricted cash shall include,
without
limitation, the restricted cash related to that certain Lease
Agreement (and
related agreements) by and between Tower Automotive, Belgium
B.V.B.A. and ABB
Credit AB, dated as of December 21, 2001, as amended.
"ORDER" means any decree, order, injunction, rule, judgment,
consent
of, or by any Governmental Authority.
"PARTIAL ACQUISITION" means a transaction pursuant to which
Seller
agrees to sell or otherwise transfer less than all of the Acquired
Assets.
"PERMITTED ENCUMBRANCES" means:
(i) tax liens with respect to Taxes not yet due and payable
or post-petition Taxes being contested in good faith;
(ii) interests or title of a third party under or to any
Assumed Contract, including as to any Leased Real Property, any
Encumbrance,
Claim, or Interest affecting the interest of the lessor thereof as
it relates to
such lessor's interest in the Leased Real Property;
(iii) nonexclusive licenses of Intellectual Property owned
by the Tower Group that have been granted by the Tower Group in the
ordinary
course of business and any restrictions on conditions to the
transfer,
assignment or renewal of any licenses of Intellectual Property
owned by third
parties and licensed to the Tower Group, provided such restrictions
were entered
into in the ordinary course of business;
(iv) easements, covenants, conditions, rights-of-way,
restrictions and other similar charges and Encumbrances, Claims, or
Interests
not interfering with the ordinary conduct of the business or
operations
conducted on the particular site;
(v) zoning, entitlement, conservation restriction and other
land use and environmental regulations or building codes which are
imposed by
Governmental Authorities; provided, that none of the foregoing in
this clause
(v) would have a material adverse effect upon the continued use of
the property
to which they relate in the conduct of the business or operations
as currently
conducted thereon;
(vi) such other imperfections or irregularities in title,
charges, easements, survey exceptions, leases, subleases, license
agreements and
other occupancy agreements, reciprocal easement agreements,
restrictions and
other customary Encumbrances, Claims, and Interests on title to
real property;
provided, that none of the foregoing in this clause (vi) would have
a material
adverse effect upon the continued use of the property to which they
relate in
the conduct of the business or operations currently conducted
thereon; and
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<PAGE>
(vii) such other imperfections or irregularities in title
disclosed to Purchaser on title reports and identified on Schedule
3.20(c)
attached hereto; provided, that none of the foregoing in this
clause (vii) would
have a material adverse effect upon the continued use of the
property to which
they relate in the conduct of the business or operations currently
conducted
thereon.
"PERSON" means any individual, partnership, firm, corporation,
association, trust, unincorporated organization, Governmental
Authority, joint
venture, limited liability company or other entity formed,
incorporated or
existing pursuant to any Law.
"PLAN" means the joint Chapter 11 plan of Seller substantially in
the
form and substance of Exhibit E attached hereto, with such changes
as may be
approved by Purchaser in its reasonable discretion.
"POST-CONSUMMATION TRUST" has the meaning set forth in the
Plan.
"PURCHASE PRICE" shall mean the sum of the DIP Payment, the
Second
Lien Payment, the IRB Payment, the Unsecureds Claim Payment, the
Unsecureds Fund
Payment, the Allowed Secured Claims Payment, the Allowed
Administrative Claims
Payment, the Allowed Priority Claims Payment, the Cure Amounts
Payment, the
Indemnification Payment, the Tail Payment and the Escrow Fee
Payment.
"REGULATED SUBSTANCE(S)" means any substance, material,
compound,
pollutant or waste regulated under any Environmental Law including,
without
limitation, radiation, noise, odors, asbestos, PCBs, petroleum and
petroleum
containing materials.
"RETIREE BENEFITS SETTLEMENTS" means the settlements respecting
certain "retiree benefits" (within the meaning set forth in section
1114 (a) of
the Bankruptcy Code) the material terms of which are reflected on
Schedule
1.1(a)(vii), which shall be memorialized in settlement agreements
in form and
substance reasonably acceptable to Purchaser, as approved by the
Bankruptcy
Court; provided, however that any deviation from the terms set
forth on Schedule
1.1(a)(vii) shall require Purchaser's approval in its absolute and
sole
discretion.
"SALE ORDER" means an Order substantially in the form and substance
of
Exhibit F attached hereto with such changes as may be approved by
Purchaser in
its reasonable discretion.
"SEC" means the United States Securities and Exchange
Commission.
"SECOND LIEN LOAN" means that certain Second Lien Pledge and
Security
Agreement, dated as of May 24, 2004, by and among R.J. Tower
Corporation as
borrower, certain guarantors, various lenders and Silver Point
Capital Fund LP,
as amended, supplemented or otherwise modified from time to time
and all
instruments, security agreements, guaranties, intercreditor
agreements and other
documents executed in connection therewith including that certain
$155,000,000
synthetic letter of credit facility governed by the Second Lien
Loan.
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<PAGE>
"SECOND LIEN NOTEHOLDERS" means, collectively, the financial
institutions party to that certain $155,000,000 synthetic letter of
credit
facility governed by the Second Lien Loan, and all permitted
assigns,
transferees and successors-in-interest thereto.
"SEC REPORTS" means, collectively, the Company's (i) Quarterly
Reports
on Form 10-Q for the quarterly periods ended September 30, 2006,
June 30, 2006
and March 31, 2006 filed with the SEC on February 27, 2007,
September 15, 2006
and August 4, 2006 respectively and (ii) Annual Report on Form 10-K
for the year
ended December 31, 2005 filed with the SEC on June 27, 2006.
"SELLER EMPLOYEE" means each employee of the Seller employed in
the
United States.
"SUBSIDIARIES" of a Person means, entities (i) the accounts of
which
would be consolidated with those of Seller in Seller's consolidated
financial
statements if such financial statements were prepared in accordance
with GAAP,
or (ii) of which securities, membership interests or other equity
ownership
interests representing more than 50% of the equity or more than 50%
of the
ordinary voting power or, in the case of a partnership, more than
50% of the
general partnership interests or more than 50% of the profits or
losses of which
are owned, controlled or held by Seller or one or more direct or
indirect
Subsidiaries.
"TAX" or "TAXES" means any federal, state, provincial, local,
territorial or foreign income, gross receipts, license, capital,
capital gains,
payroll, wage, employment, excise, import, severance, stamp,
occupation,
premium, windfall profits, environmental, including Taxes pursuant
to Code
Section 59A, customs duties, capital stock, franchise, profits,
withholding,
social security (or similar), unemployment, disability, real
property, personal
property, sales, use, transfer, ad valorem, registration, value
added, goods and
services, alternative or add-on minimum, estimated or other tax of
any kind
whatsoever, whether computed on a separate or consolidated, unitary
or combined
basis or in any other manner, including any interest, penalty or
addition
thereto, whether disputed or not and including any obligation to
indemnify or
otherwise assume or succeed to the Tax Liability of any other
Person.
"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.
"TITLE POLICY" means, one or more owner's title insurance
policies
issued by a reputable title insurance company selected by Purchaser
and licensed
to transact business in the state or jurisdiction in which each
Owned Real
Property or Leased Real Property is located which policies insure
title to a fee
simple interest in each Owned Real Property and a leasehold
interest in each
Leased Real Property, in an amount reasonably satisfactory to
Purchaser, and
with extended coverage over the general exceptions therein, free of
all
Encumbrances except Permitted Encumbrances. The Title Policy shall
be dated as
of the Closing Date and insure title to each Owned Real Property
and Leased Real
Property and all recorded easements benefiting such parcels and
contain such
endorsements as Purchaser may reasonably request, in each such
circumstance
where the endorsement is available.
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<PAGE>
"TOWER GROUP" means collectively, the Company and the Company's
Subsidiaries, and a member of the Tower Group refers to any member
thereof.
"TRANSFER TAXES" means all sales, value added, goods and
services,
excise, multi-stage, retail sales, use and land transfer taxes,
stamp duties,
stamp duty reserve tax, stamp duty land tax and any other similar
taxes, duties,
assessments or governmental charges, together with all interest,
penalties and
additions imposed with respect to such amounts. For avoidance of
doubt, Transfer
Taxes do not include any Taxes on income, capital gains or other
profits, and
nothing in this Agreement shall obligate Purchaser to pay any
income, capital
gains or other profits Taxes arising as a result of the
transactions
contemplated by this Agreement.
"TREASURY REGULATIONS" or "TREAS. REGS." means the regulations
promulgated under the Code by the United States Department of the
Treasury or
the IRS, including temporary regulations.
"UNSECURED CREDITORS TRUST" has the meaning set forth in the
Plan.
"WORKING CAPITAL OBLIGATIONS" means
(a) all current Liabilities of Seller, other than any Liability
included in the definition of the Purchase Price and used in the
calculation of
the Purchase Price paid to, or on behalf of, Seller by Purchaser at
the Closing
and thereafter;
(i) which are ordinary and customary;
(ii) which are related to the Acquired Assets;
(iii) which would be accrued by Seller as current
Liabilities in accordance with GAAP applied on a consistent basis
with Seller's
historical accounting practices; and
(iv) which relate to Seller's operations occurring after
February 2, 2005.
(b) Working Capital Obligations (i) to the extent they are
postpetition and satisfy clauses (a)(i), (a)(ii), (a)(iii) and
(a)(iv) of this
definition include, but are not limited to, (A) accounts and trade
payables, (B)
accrued Taxes of every kind or nature including federal, state,
sales and
property Taxes and Transfer Taxes, but not any capital gain, income
or other
Taxes arising from the transactions contemplated hereby; and with
respect to
Transfer Taxes arising from or related to the transactions
contemplated hereby,
Working Capital Obligations (and Purchaser's liability with respect
to Transfer
Taxes) shall be limited to, and shall not exceed, an amount up to
Seven Hundred
Fifty Thousand Dollars ($750,000), (C) accrued expenses and (D)
accrued
compensation related items including sick pay, vacation pay,
holiday pay and
paid time off obligations, and (ii) shall exclude Indebtedness and
professional
fees. The Parties also acknowledge that (X) pre-petition secured
Tax
obligations, including all of the Tax obligations listed on
Schedule
1.1(a)(viii), to the extent Allowed, whether or not they are
pre-petition, and
(Y) the Tax obligations that are Allowed Priority Claims other than
Tax claims
Allowed under section 507(a)(2) of the Bankruptcy Code and section
503(b) of the
Bankruptcy
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<PAGE>
Code, including those listed on Schedule 1.1(a)(ix), to the extent
Allowed, are
not Working Capital Obligations.
(c) Notwithstanding anything set forth to the contrary in this
Agreement, Working Capital Obligations shall not include any
Bankruptcy Related
Administrative Claims nor any amount included within the categories
making up
the Capped Payments included in the Purchase Price Cap.
Section 1.2. Other Defined Terms.
The following terms have the meanings defined for such terms in
the
Sections set forth below:
<TABLE>
<CAPTION>
Term
Reference
----
--------------------
<S>
<C>
$ or Dollars
Section 9.14
2006 Audited Statements
Section 3.11(c)
365 Motions
Section 5.16
Agreement
Preamble
Allowed Administrative Claims Payment Section
2.1(a)(vii)
Allowed Priority Claims Payment
Section 2.1(a)(viii)
Allowed Secured Claims Payment
Section 2.1(a)(vi)
Assumed Contract List
Section 5.16
Balance Sheet
Section 3.11(a)(i)
Balance Sheet Date
Section 3.11(a)(i)
Bankruptcy Case
Recitals
Bankruptcy Code
Recitals
Bankruptcy Court
Recitals
Capped Payments
Section 2.1(b)
Change in Control Agreements
Section 3.18(f)
Chapter 11 Cases
Section 5.13
Chapter 5 Claims
Section 1.1
Closing
Section 2.6
Closing Date
Section 2.6
COBRA
Section 3.18(g)
Company
Preamble
Company Disclosure Schedule
Article 3
Cure Amount Payment
Section 2.1(a)(ix)
Deposit
Section 2.5
DIP Payment
Section 2.1(a)(i)
DOJ
Section 5.6(b)
DOL
Section 3.18(c)(vii)
EEOC
Section 3.19(a)(xi)
Electronic Copy
Section 9.11(b)
Employee Plan(s)
Section 3.18(a)(iii)
Escrow Fee Payment
Section 2.1(a)(xii)
Financial Statements
Section 3.11(a)
FIRPTA Affidavit
Section 2.8(g)
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Term
Reference
----
--------------------
<S>
<C>
FTC
Section 5.6(b)
Hired Employees
Section 6.1(b)
Indemnification Payment
Section 2.1(a)(x)
Intellectual Property Assignments
Section 2.8(c)
IRB Payment
Section 2.1(a)(iii)
Leased Real Property
Section 3.20(b)
Listed Intellectual Property
Section 3.21(b)
Management Incentive Plan
Section 6.2
Metalsa
Section 5.1(b)(xiii)
Name Change Filings
Section 5.13
Monthly Representation Report
Section 5.1(a)(v)
Notice Group
Section 5.2(a)(i)
Owned Real Property
Section 3.20(a)
Party(ies)
Preamble
Purchase Price Balance
Section 2.1(e)
Purchase Price Cap
Section 2.1(b)
Purchaser
Preamble
Real Property Lease
Section 3.20(b)
Reorganizations
Section 5.11
Second Lien Fee Claim
Section 2.1(a)(ii)
Second Lien Payment
Section 2.1(a)(ii)
Seller
Preamble
Seller Certificate
Section 7.2(c)
Senior Management
Section 6.2
Subsequent Purchase Price Payment
Section 2.1(e)
Subsequent Purchase Price Payment Notice Section 2.1(e)
Supplier(s)
Section 3.15
Tail Payment
Section 2.1(a)(xi)
Tail Policy
Section 2.1(a)(xi)
Tax-Qualified Plan
Section 3.18(h)
Termination Date
Section 8.1(c)
Unsecureds Claim Payment
Section 2.1(a)(iv)
Unsecureds Funds Payment
Section 2.1(a)(v)
WARN Act
Section 3.19(a)(i)
</TABLE>
ARTICLE 2.
PURCHASE AND SALE
Section 2.1. Transfer of Acquired Assets and Assumption of
Assumed
Liabilities.
(a) On the terms and conditions contained in, and subject to
the
terms of, this Agreement, the Sale Order and the Confirmation
Order, at the
Closing Seller shall sell, convey, transfer, assign and deliver to
Purchaser,
and Purchaser shall purchase from Seller all of
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<PAGE>
Seller's right, title and interest, as of the Closing, in and to
the Acquired
Assets and Assumed Contracts, free and clear of any Claims,
Interests or
Encumbrances other than Permitted Encumbrances. In consideration
for the sale
and transfer of the Acquired Assets, Purchaser shall assume, pay,
perform and
discharge when due the Assumed Liabilities and shall pay to or on
behalf of
Seller as set forth herein, the sum of:
(i) the amount of cash advised by JP Morgan Chase Bank,
N.A., in its capacity as agent for the DIP Lenders, in a payoff
letter delivered
to Seller (but subject to Purchaser's verification) prior to the
Closing, as
necessary to repay in full and otherwise satisfy in full all
Liabilities of
Seller pursuant to the DIP Loan Credit Agreement as of the Closing
Date (Seller
and Purchaser shall jointly instruct Escrow Agent to pay the
Deposit at the
Closing as part of the amount due pursuant to this Section
2.1(a)(i) and
pursuant to the payoff instructions set forth in the payoff letter
delivered by
JP Morgan Chase Bank, N.A. to Seller at the Closing) (collectively,
the "DIP
PAYMENT"); plus
(ii) the amount of cash advised by Silver Point Capital Fund
LP, as agent for the Second Lien Noteholders, in a payoff letter
delivered to
Seller (but subject to Purchaser's verification) prior to the
Closing as
necessary to repay in full and otherwise satisfy in full all
Liabilities of
Seller pursuant to the Second Lien Loan as of the Closing Date;
provided,
however, notwithstanding the foregoing, subject to Section 2.2 of
this
Agreement, the amount paid pursuant to this Section 2.1(a)(ii) on
account of all
nonlegal professional fees owed in respect of the Second Lien Loan
shall not
exceed Four Million Dollars ($4,000,000) (the "SECOND LIEN FEE
CLAIM") in the
aggregate (collectively, the "SECOND LIEN PAYMENT"); plus
(iii) the amount of cash advised by JP Morgan Trust Company,
N.A. or its successors, in a payoff letter delivered to Seller (but
subject to
Purchaser's verification) prior to the Closing Date, as necessary
to repay in
full and otherwise satisfy in full all Liabilities of Seller
pursuant to the
Industrial Revenue Bonds; provided, however, if (A) Purchaser is
permitted to
assume the Industrial Revenue Bonds pursuant to the terms of the
Industrial
Revenue Bonds, (B) at least ten (10) Business Days prior to the
Closing,
Purchaser provides Seller written notice of its intention to assume
the
Industrial Revenue Bonds, (C) prior to the Closing, Purchaser
satisfies all
requirements necessary to allow Purchaser to assume such Industrial
Revenue
Bonds including replacing any letters of credit securing the
Industrial Revenue
Bonds, if required by the Industrial Revenue Bond holders, and (D)
at the
Closing, Purchaser effectively assumes all of Seller's Liability
under the
Industrial Revenue Bonds, then no amount shall be payable to Seller
pursuant to
this Section 2.1(a)(iii) (the "IRB PAYMENT"); plus
(iv) Ten Million Dollars ($10,000,000), which amount shall
be paid to the Unsecured Creditors Trust for distribution by the
Unsecured
Creditors Trust pursuant to the Plan, (the "UNSECUREDS CLAIM
PAYMENT"); plus
(v) Two Million Dollars ($2,000,000), which amount shall be
paid pursuant to the Plan to the Unsecured Creditors Trust to fund
the costs
associated with administering the Unsecured Creditors Trust,
including the
prosecution of the avoidance
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<PAGE>
claims or causes of action set forth on Schedule 1.1(a)(ii)
attached hereto (the
"UNSECUREDS FUNDS PAYMENT"); plus
(vi) the amount of cash necessary to repay in full and
otherwise satisfy in full the Allowed Secured Claims, other than
claims pursuant
to the DIP Loan Credit Agreement, the Second Lien Loan and the
Industrial
Revenue Bonds (the "ALLOWED SECURED CLAIMS PAYMENT"); plus
(vii) the amount of cash necessary to repay in full and
otherwise satisfy in full the Bankruptcy Related Administrative
Claims (the
"ALLOWED ADMINISTRATIVE CLAIMS PAYMENT"); plus
(viii) the amount of cash necessary to repay in full and
otherwise satisfy in full all Allowed Priority Claims (the "ALLOWED
PRIORITY
CLAIMS PAYMENT"); plus
(ix) the amount of cash necessary to pay in full and
otherwise satisfy in full the Cure Amounts (the "CURE AMOUNT
PAYMENT"); plus
(x) Two Million Dollars ($2,000,000), which amount is
intended to be used by Seller pursuant to the Plan to reserve
against directors'
and officers' indemnification claims against Seller (the
"INDEMNIFICATION
PAYMENT"); plus
(xi) an amount up to, but not exceeding, Four Million
Dollars ($4,000,000) paid (or to be paid simultaneously with the
Closing) (the
"TAIL PAYMENT") to Seller to obtain and fully pay for a "tail"
insurance policy
or policies with a claims period of at least six (6) years from the
Closing Date
from an insurance carrier or insurance carriers with approximately
equivalent
credit rating as Seller's current insurance carrier (the "TAIL
POLICY"), which
Tail Policy shall be from an insurer, contain terms and provisions
and otherwise
be satisfactory to Purchaser in its reasonable discretion, with
respect to
directors' and officers' liability insurance in an amount and
scope
substantially as favorable as Seller's existing policies with
respect to matters
existing or occurring at or prior to the Closing Date; plus
(xii) Three Thousand Dollars ($3,000) for fees pursuant to
the Escrow Agreement (the "ESCROW FEE PAYMENT").
(b) Notwithstanding the actual aggregate amount of the Allowed
Secured Claims Payment, the Allowed Administrative Claim Payment,
the Allowed
Priority Claim Payment, the Cure Amount Payment, the
Indemnification Payment,
and the Tail Payment (all such payments collectively referred to as
the "CAPPED
PAYMENTS"), under no circumstances shall Purchaser be required to
pay more than
Seventy Million Dollars ($70,000,000) (the "PURCHASE PRICE CAP") in
respect of
such Capped Payments.
(c) At the Closing, Purchaser shall cause to be paid, (W) to
Seller or, at Purchaser's election, directly to the DIP Lenders,
the Second Lien
Loan lenders and the Industrial Revenue Bond holders, as the case
may be, on
behalf of Seller, by wire transfer of immediately available funds,
the DIP
Payment, the Second Lien Payment and the IRB Payment (if
necessary), (X) to the
Unsecured Creditors Trust, the Unsecureds Claim Payment and the
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<PAGE>
Unsecureds Funds Payment, (Y) to Seller (or if established the
Post-Consummation
Trust) Thirty Five Million Dollars ($35,000,000) on account of the
Capped
Payments for payment pursuant to the Plan and (Z) to Seller the
Escrow Fee
Payment.
(d) Seller or the Post-Consummation Trust, as the case may be,
shall have the right, subject to the provisions of the Plan,
beginning thirty
(30) days after the Closing Date and continuing until the Capped
Payments Bar
Date, to request, by delivering Subsequent Purchase Price Payment
Notices, that
Purchaser deliver Subsequent Purchase Price Payments, up to the
Purchase Price
Balance, in an amount necessary for Seller or the Post-Consummation
Trust, as
the case may be, to maintain a balance of Ten Million Dollars
($10,000,000) on
account of the Capped Payments; provided, however, that other than
in respect of
the last Subsequent Purchase Price Payment Notice, no Subsequent
Purchase Price
Payment Notice may be for an amount less than Two Million Dollars
($2,000,000)
irrespective of whether such minimum request amount would cause
Seller or the
Post-Consummation Trust, as the case may be, to then maintain a
balance of less
than Ten Million Dollars ($10,000,000) on account of the Capped
Payments for any
period of time. The first such Subsequent Purchase Price Payment
Notice shall
require five (5) calendar days advance notice and all other
Subsequent Purchase
Price Payment Notices shall require fifteen (15) calendar days
advance notice.
(e) For
the purposes of this Agreement, a "SUBSEQUENT PURCHASE
PRICE PAYMENT NOTICE" shall be a written notice executed by an
authorized
representative of Seller or the Post-Consummation Trust, as the
case may be, and
shall include (i) a request for payment of a specific dollar
amount, (ii) an
itemized summary by claim of all payments of amounts on account of
Allowed
claims within the categories of Capped Payments since the date of
the last
Subsequent Purchase Price Payment Notice and (iii) a statement as
to the amount
then on deposit with Seller or the Post-Consummation Trust, as the
case may be.
Each payment made by Purchaser to Seller or the Post-Consummation
Trust, as the
case may be, pursuant to the terms of Section 2.1(d) shall be
deemed a
"SUBSEQUENT PURCHASE PRICE PAYMENT", and such payments shall be
paid by wire
transfer of immediately available funds. For the purposes of this
Agreement, at
any point in time the "PURCHASE PRICE BALANCE" shall mean the
amount of cash
equal to Thirty Five Million Dollars ($35,000,000), less the sum of
all
Subsequent Purchase Price Payments. Notwithstanding anything set
forth herein,
aggregate payments pursuant to Section 2.1(c)(y) and Sections
2.1(d) and (e) may
not exceed the Purchase Price Cap, and under no circumstances shall
Purchaser be
required or requested to pay more than Seventy Million Dollars
($70,000,000)
toward the Capped Payments.
(f) Seller or the Post-Consummation Trust, as the case may be,
shall notify Purchaser a reasonable time prior to making any Capped
Payments.
(g) In the event Seller or the Post-Consummation Trust, as the
case may be, receives any amount from Purchaser in respect of
Capped Payments
pursuant to Section 2.1(c)(y) and (y) and Sections 2.1(d) and (e),
which amounts
are no longer required for the payment of Capped Payments, Seller
or the
Post-Consummation Trust, as the case may be, shall promptly return
all such
amounts to Purchaser together with all interest accrued thereon.
Similarly, not
later than the fifth (5th) Business Day following the Capped
Payments Bar Date,
Seller or the Post-Consummation Trust, as the case may be, shall
promptly return
all such amounts then being held by Seller or the Post-Confirmation
Trust, as
the case may be, to
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<PAGE>
Purchaser by wire transfer of immediately available funds to an
account
designated by Purchaser. Seller or the Post-Consummation Trust, as
the case may
be, shall, upon Purchaser's reasonable request provide such
information as
Purchaser may request, from time to time, respecting the amount
paid in respect
of the Capped Payments, the balance still held by or on behalf of
Seller or the
Post-Consummation Trust, as the case may be, or the amounts yet to
be paid to
holders of claims within the categories of Capped Payments. Seller
or the
Post-Consummation Trust, as the case may be, shall notify Purchaser
at such time
as there are no further pending claims within the categories of
Capped Payments.
(h) Upon Purchaser's sale of all or substantially all of its
assets prior to the satisfaction or termination of its obligations
herein
respecting Capped Payments, Purchaser shall either cause the buyer
in such
transaction to assume the Purchaser's obligations under Sections
2.1(d) through
(g), pay to Seller or the Post-Consummation Trust, as the case may
be, an amount
equal to the Purchase Price Balance, or provide reasonably adequate
assurance of
such payment with a letter of credit, but any such payment shall
not be deemed a
waiver of any of Purchaser's rights under Sections 2.1(d), (e), (f)
or (g)
including, without limitation, the right potentially to receive
back amounts
pursuant to Section 2.1(g).
(i) Provided the Sale Order is entered by the Bankruptcy Court
and subject to the terms thereof, Seller shall sell, transfer,
assign, convey
and deliver to Purchaser all of Seller's right, title and interest
in, to and
under the Acquired Assets and Assumed Contracts free and clear of
all Claims,
Interests or Encumbrances (other than Permitted Encumbrances).
Section 2.2. Right to Contest Claims. Purchaser may object and
contest
any filed or submitted Bankruptcy Case Claims and Second Lien Fee
Claim pursuant
to, among other sections, sections 105, 363 and 365 of the
Bankruptcy Code
(except no objection may be made to the KERP (subject to the dollar
limitation
provided herein), the Indemnification Payment, the Three Million
Five Hundred
Thousand Dollar ($3,500,000) payment due in respect of the amounts
owed to the
Milwaukee unions as described in the definition of Bankruptcy
Related
Administrative Claim clause (d) or with respect to the fees owed to
the
professionals identified in an e-mail, dated May 1, 2007, sent from
Seller's
counsel to Purchaser's counsel and received at 2:47 A.M., ET, whose
fees are all
subject to the approval of the Bankruptcy Court (which e-mail
indicated the name
of the professional, the party represented, and the nature of the
services
performed)). Purchaser shall have no obligation to pay any Capped
Payment or any
portion of the Second Lien Fee Claim unless and until such claim is
Allowed by
the Bankruptcy Court.
Section 2.3. Excluded Liabilities. Except for the assumption of
the
Assumed Liabilities, Purchaser does not, and shall not, assume or
pay any
Excluded Liabilities. For avoidance of doubt, the Tower Group will
not discharge
or otherwise satisfy any Liabilities (including the Indebtedness)
of the Foreign
Entities in connection with the transactions contemplated hereby,
and following
the Closing, the Foreign Entities shall have all the Liabilities of
the Foreign
Entities immediately prior to the Closing.
Section 2.4. Allocation of Purchase Price. Purchaser shall prepare
an
allocation of the Purchase Price, and all other capitalized costs,
among the
Acquired Assets in accordance with Code Section 1060 and the
Treasury
Regulations thereunder, and any similar provision of state,
provincial, local,
territorial or foreign law, as appropriate. Purchaser shall deliver
such
allocation
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<PAGE>
to Seller as promptly as practicable after the Closing Date.
Promptly following
receipt thereof, Seller may discuss with Purchaser and Purchaser
shall consider,
in good faith, any potential changes to such allocation that would
result in a
material decrease in state or local income Tax Liability of Seller
while not
resulting in a meaningful current or future increase in the income
Tax Liability
of Purchaser. Thereafter, Purchaser shall deliver a final
allocation to Seller,
which final allocation shall be binding upon Seller. Purchaser and
Seller and
their respective Affiliates shall report, act and file Tax Returns,
including,
but not limited to IRS Form 8594, in all respects and for all
purposes
consistent with such final allocation prepared by Purchaser. Seller
shall timely
and properly prepare, execute, file and deliver all such documents,
forms and
other information as Purchaser may reasonably request to prepare
such
allocation. Neither Purchaser nor Seller shall take any position,
whether in
audits, Tax Returns or otherwise, that is inconsistent with such
final
allocation unless required to do so by applicable law.
Section 2.5. Deposit.
Not later than the date that is three (3) Business Days next
following
the date hereof, Purchaser shall deposit with the Escrow Agent,
pursuant to the
terms of the Escrow Agreement, Twenty Five Million Dollars
($25,000,000) by wire
transfer of immediately available funds (collectively, with any
accrued interest
thereon, the "DEPOSIT"), which Deposit shall be held and released
in accordance
with the provisions of the Escrow Agreement and the other
provisions contained
herein. Provided that the transactions contemplated hereby are
consummated, the
Deposit shall be paid to the DIP Lenders at the Closing as more
fully set forth
in Section 2.1(a)(i) of this Agreement.
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<PAGE>
Section 2.6. Closing. Upon the terms and subject to the conditions
of
this Agreement, the consummation of the transactions contemplated
by this
Agreement shall take place at a closing (the "CLOSING") to be held
at the
offices of Kirkland & Ellis LLP, 153 East 53rd Street, New
York, New York at
9:00 a.m., Eastern Standard Time, on July 31, 2007 or if mutually
agreed upon in
writing by Purchaser and Seller the second (2nd) Business Day
following, but not
including, the date on which the last of the conditions set forth
in Article 7
are satisfied or waived, other than those conditions that by their
nature are to
be satisfied at the Closing, but subject to fulfillment or waiver
of such
conditions, or at such other place or at such other time or on such
other date
as the Parties may mutually agree upon in writing. The day on which
the Closing
takes place shall be deemed the "CLOSING DATE."
Section 2.7. Letters of Credit. Subject to Section 2.1(a)(iii), at
the
Closing, Purchaser will cause to be posted letters of credit in
substitution for
the letters of credit identified in Schedule 3.2(b) attached
hereto. To the
extent the Industrial Revenue Bonds are repaid and not assumed,
Purchaser shall
have no obligation to replace the letters of credit in respect of
the Industrial
Revenue Bonds.
Section 2.8. Closing
Deliveries by Seller.
At the Closing, Seller shall deliver to Purchaser:
(a) one or more Assignment and Assumption Agreements duly
executed by Seller in favor of Purchaser and/or one or more of its
assignees as
requested by Purchaser;
(b) one or more Bills of Sale duly executed by Seller in favor
of
Purchaser and/or one or more of its assignees as requested by
Purchaser;
(c) one or more assignments of the registrations and
applications
for registration of the Listed Intellectual Property, for recording
in the
United States Patent and Trademark Office or the United States
Copyright Office
or similar office in a foreign jurisdiction, if any, as reasonably
requested by
Purchaser in writing at least five (5) Business Days prior to the
Closing
(collectively, the "INTELLECTUAL PROPERTY ASSIGNMENTS");
(d) the certificates representing all of the issued and
outstanding shares of capital stock or other similar instruments
representing
the equity that constitutes a portion of the Acquired Assets of a
Tower Group
entity being acquired hereunder; except for each Seller entity,
duly endorsed in
blank or accompanied by duly executed stock powers, with
appropriate transfer
stamps, if any, or notarial certificate affixed thereto;
(e) notarial or other deeds of transfer, or other similar
instruments, to effect the transfer, sale or assignment of the
stock, limited
liability company interests, partnership interests or any other
equity interests
of Foreign Entities being acquired hereunder, if reasonably
requested by
Purchaser in writing at least twenty (20) calendar days prior to
the Closing;
(f) the Seller Certificate required to be delivered pursuant to
Section 7.2(c);
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<PAGE>
(g) any other document reasonably requested by Purchaser in
writing at least five (5) Business Days prior to the Closing and
necessary to
effectuate the transfer of the Acquired Assets or the Assumed
Contracts from
Seller to Purchaser, including, without limitation, Transfer Tax
returns,
vehicle titles, licenses, Environmental Permits (to the extent
transferable),
duly executed real estate deeds and other similar or collateral
documents for
each of Seller's Owned Real Property in form acceptable for
recording in the
jurisdiction where the respective Owned Real Property is located
and an
affidavit in form and substance required under the Treasury
Regulations issued
pursuant to Code Section 1445 stating that no Seller entity is a
"Foreign
Person" as defined in Code Section 1445 (the "FIRPTA
AFFIDAVIT");
(h) any customary affidavits, undertakings and title clearance
documents reasonably requested by Purchaser in writing at least
twenty (20)
calendar days prior to the Closing and necessary for Purchaser to
obtain the
Title Policy; provided that none of the foregoing shall require the
payment of
money, the placement of any funds in escrow, or the pledge of any
other
collateral by Seller;
(i) the Name Change Filings as more fully set forth in Section
5.13 of this Agreement; and
(j) the Sale Order and the Confirmation Order entered by the
Bankruptcy Court.
Section 2.9. Closing Deliveries by Purchaser. At the Closing,
Purchaser shall deliver to or on behalf of Seller:
(a) the portion of the Purchase Price to be delivered at
Closing
as provided herein;
(b) the Assignment and Assumption Agreement duly executed by
Purchaser;
(c) the Bill of Sale duly executed by Purchaser;
(d) the Intellectual Property Assignments duly executed by
Purchaser;
(e) Purchaser Certificate required to be delivered pursuant to
Section 7.3(d) of this Agreement;
(f) certified copies of the resolutions of Purchaser's board of
directors (or similar governing body) authorizing the execution,
delivery and
performance of this Agreement and the other agreements contemplated
hereby and
the consummation of the transactions contemplated hereby and
thereby; and
(g) subject to Section 2.1(a)(iii), evidence reasonably
satisfactory to Seller that Purchaser has posted any letters of
credit required
pursuant to Section 2.7 hereof.
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<PAGE>
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the disclosure schedules delivered by Seller
to
Purchaser on or prior to the execution of this Agreement (each a
"SCHEDULE" and
together, the "COMPANY DISCLOSURE SCHEDULE"), the Company hereby
represents and
warrants to Purchaser that:
Section 3.1. Organization.
(a) Each of the Company and the Company Subsidiaries is duly
organized, validly existing and in good standing under the Laws of
its
respective jurisdiction and organization and has, subject to the
necessary
authority from the Bankruptcy Court, the requisite corporate or
similar power
and authority to own or lease its properties and to carry on its
business as
presently conducted and is duly qualified to do business and is in
good
standing, where such concept exists, as a foreign corporation in
each
jurisdiction in which the nature of its business or the ownership
or leasing of
its properties makes such qualification necessary, except where the
failure to
be so organized, qualified or in good standing or have such power
or authority
would not reasonably be expected to have, individually or in the
aggregate, a
Material Adverse Effect.
(b) The entities set forth on Schedule 3.1(b) are the only
Subsidiaries of the Company. Schedule 3.1(b) sets forth (i) the
name and
jurisdiction of incorporation of each Foreign Entity, (ii) if
applicable, the
total number of shares of each class of capital stock of each
Foreign Entity
authorized and the number of shares outstanding and the number of
shares owned
by the Tower Group and the specific Tower Group entity which is the
owner and
(iii) a complete list of the directors and officers of each Foreign
Entity. All
of the issued and outstanding shares of capital stock or similar
instrument
representing the equity interest of each Foreign Entity has been
duly and
validly authorized and issued and are fully paid, non-assessable
and free of
preemptive rights. None of the outstanding shares of capital stock
of such
Foreign Entity has been issued in violation of the preemptive
rights of any
stockholder of such entity. The shares of capital stock or similar
instruments
of such entity were issued in material compliance with all
applicable Laws.
(c) Except as set forth in Schedule 3.1(c), there are no
existing
agreements, subscriptions, options, warrants, calls, commitments,
trusts, voting
or otherwise, or rights of any kind whatsoever granting to any
Person any
interest in or the right to purchase or otherwise acquire from any
Foreign
Entity or from any Seller in respect of any Foreign Entity, at any
time, or upon
the occurrence of any stated event, any shares of capital stock of
or equity
interest in any such Foreign Entity, whether or not presently
issued or
outstanding, nor are there any outstanding shares of capital stock
of or equity
interests in any such Foreign Entity or any other entity which are
convertible
into or exchangeable for other shares of capital stock of or equity
interests in
any Foreign Entity nor are there any agreements, subscriptions,
options,
warrants, calls, commitments or rights of any kind granting to any
Person any
interest in or the right to purchase or otherwise acquire from any
such member
of the Tower Group or any other Person any shares of capital stock
or equity
interests so convertible or exchangeable, nor are
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there any proxies, agreements or understandings with respect to the
voting of
the shares of capital stock of or equity interests in any Foreign
Entity.
(d) Seller has made available or delivered to Purchaser true
and
complete copies of the organizational documents of each member of
the Tower
Group.
Section 3.2. Bank Accounts; Letters of Credit. (a) Schedule
3.2(a)
lists substantially all current material bank accounts, lock boxes
and safe
deposit boxes relating to the business and operations of each
Foreign Entity
(with such Schedule to be amended a reasonable time prior to
Closing to list all
such accounts), including the name of the bank or other institution
where such
account or box is located and the name of each authorized signatory
thereto.
(b) Schedule 3.2(b) sets forth all outstanding letters of
credit
issued by financial institutions for the account of the Tower
Group, setting
forth, in each case, the financial institution issuing such letter
of credit,
the maximum amount available under such letter of credit, the
terms, including
the expiration date, of such letter of credit and the party or
parties in whose
favor such letter of credit was issued.
Section 3.3. Affiliate Transactions. Except (a) for matters
described
in the Company's Annual Report on Form 10-K for the year ended
December 31, 2005
filed with the SEC and (b) for compensation paid or payable by the
Tower Group
to bona fide employees of the Tower Group in the ordinary course of
business and
consistent with past practice, no current or former officer or
director of the
Tower Group nor any of their respective relatives or spouses, is
now, or has
been during the last two (2) years, (X) a party to any transaction
or contract
with the Tower Group or any of their respective employees or
Affiliates, (Y) the
direct or indirect owner of a material interest in any Person which
is a present
or potential competitor, supplier or customer of the Tower Group
(other than
non-affiliated holdings in publicly-held companies) or (Z) a
recipient of any
material benefit or material payment from the Tower Group. Except
as set forth
on Schedule 3.3 or in respect of any obligation to indemnify any
officer or
director of the Tower Group pursuant to any certificate of
incorporation, by-law
or similar document, or in any employment agreement identified in
the Schedules
to this Agreement, the Tower Group is not a guarantor or otherwise
directly or
indirectly liable for any actual or potential Liability of any of
its officers,
directors or employees other than members of the Tower Group.
Section 3.4. Insurance. To Seller's Knowledge, Schedule 3.4 sets
forth
a list and brief description of the material policies of insurance
currently
maintained, owned or held by the Tower Group. Each member of the
Tower Group has
complied in all material respects with each such insurance policy
to which it is
a party and has not failed to give any notice or present any claim
thereunder in
a due and timely manner. Except as disclosed in Schedule 3.4, the
full policy
limits (subject to deductibles provided in such policies) are
available and
unimpaired under each such policy and, to Seller's Knowledge, no
insurer under
any of such policies has a basis to void such policy on grounds of
nondisclosure
on the part of any member of the Tower Group thereunder. Each such
policy is in
full force and effect and to Seller's Knowledge, will not in any
way be affected
by, or terminate or lapse by reason of, the transactions
contemplated by this
Agreement. All premiums with respect to such policies have been
paid in full and
on time (it being understood that the premiums for the current year
have been
financed under the Marsh Financing and that regular payments remain
due on the
financed premiums, but that all
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such payments due prior to the date hereof have been paid when
due). No
reservation of rights letters with respect to Acquired Assets,
Assumed
Liabilities or other matters for which Purchaser may have
responsibility after
the Closing have been issued by any insurance carrier. A reasonable
time prior
to the Auction, Seller shall use commercially reasonable efforts to
supplement
Schedule 3.4 to provide information with respect to all insurance
policies
currently maintained including nature of coverage, limits,
deductibles, and
premiums, and all insurance policies maintained, owned or held by
the Tower
Group within the past two (2) years.
(b) Schedule 3.4 also shows a good faith estimate of the
Seller's
workers compensation claims and the letters of credit securing such
claims. The
letters of credit securing the Seller's workers compensation
Liabilities exceed
such good faith estimate.
Section 3.5. Accounts Receiv
