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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
DATED AS OF JUNE 27, 2003
by and among
APA OPTICS, INC. ("APA")
APA CABLES AND NETWORKS, INC. ("Buyer")
and
AMERICABLE, INC. ("Americable")
<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . .
. 1
2. SALE AND TRANSFER OF ASSETS; CLOSING. . . . . . . . . . . . .
. 8
2.1 ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 8
2.2 PURCHASE PRICE. . . . . . . . . . . . . . . . . . . . . . .
. . 8
2.3 ESCROW. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 8
2.4 ALLOCATION OF PURCHASE PRICE. . . . . . . . . . . . . . . .
. . 9
2.5 ASSUMPTION OF LIABILITIES . . . . . . . . . . . . . . . . .
. . 9
2.6 CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 10
2.7 CLOSING OBLIGATIONS . . . . . . . . . . . . . . . . . . . .
. . 10
2.8 PRORATION OF EXPENSES . . . . . . . . . . . . . . . . . . .
. . 11
2.9 TITLE AND RISK OF LOSS. . . . . . . . . . . . . . . . . . .
. . 12
3. REPRESENTATIONS AND WARRANTIES OF AMERICABLE. . . . . . . . .
. 13
3.1 ORGANIZATION AND GOOD STANDING. . . . . . . . . . . . . . .
. . 13
3.2 AUTHORITY; NO CONFLICT. . . . . . . . . . . . . . . . . . .
. . 13
3.3 FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . .
. . 14
3.4 TITLE TO PROPERTIES; ENCUMBRANCES . . . . . . . . . . . . .
. . 15
3.5 CONDITION AND SUFFICIENCY OF ASSETS . . . . . . . . . . . .
. . 15
3.6 CLEAR TITLE . . . . . . . . . . . . . . . . . . . . . . . .
. . 15
3.7 PRODUCT LIABILITY CLAIMS. . . . . . . . . . . . . . . . . .
. . 15
3.8 ACCOUNTS RECEIVABLE . . . . . . . . . . . . . . . . . . . .
. . 16
3.9 INVENTORY . . . . . . . . . . . . . . . . . . . . . . . . .
. . 16
3.10 NO UNDISCLOSED LIABILITIES. . . . . . . . . . . . . . . . .
. . 16
3.11 TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 16
3.12 NO MATERIAL ADVERSE CHANGE. . . . . . . . . . . . . . . . .
. . 17
3.13 EMPLOYEE BENEFITS . . . . . . . . . . . . . . . . . . . . .
. . 17
3.14 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL
AUTHORIZATIONS . . . . . . . . . . . . . . . . . . . . . . . . .
. 18
3.15 LEGAL PROCEEDINGS; ORDERS . . . . . . . . . . . . . . . . .
. . 19
3.16 CONTRACTS; NO DEFAULTS. . . . . . . . . . . . . . . . . . .
. . 20
3.17 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . .
. . 22
3.18 ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . . . .
. . 22
3.19 EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . .
. . 22
3.20 INTELLECTUAL PROPERTY . . . . . . . . . . . . . . . . . . .
. . 22
3.21 DISCLOSURE. . . . . . . . . . . . . . . . . . . . . . . . .
. . 23
3.22 BROKERS OR FINDERS. . . . . . . . . . . . . . . . . . . . .
. . 24
3.23 NEGOTIATION OF PURCHASE PRICE . . . . . . . . . . . . . . .
. . 24
3.24 INDEBTEDNESS. . . . . . . . . . . . . . . . . . . . . . . .
. . 24
3.25 AMERICABLE CREDITORS. . . . . . . . . . . . . . . . . . . .
. . 24
4. REPRESENTATIONS AND WARRANTIES OF BUYER AND APA . . . . . . .
. 24
4.1 ORGANIZATION AND GOOD STANDING. . . . . . . . . . . . . . .
. . 25
<PAGE>
4.2 AUTHORITY; NO CONFLICT. . . . . . . . . . . . . . . . . . .
. . 25
4.3 CERTAIN PROCEEDINGS . . . . . . . . . . . . . . . . . . . .
. . 26
4.4 BROKERS OR FINDERS. . . . . . . . . . . . . . . . . . . . .
. . 26
5. CONDITIONS PRECEDENT TO OBLIGATION OF BUYER TO CLOSE. . . . .
. 28
5.1 ACCURACY OF REPRESENTATIONS . . . . . . . . . . . . . . . .
. . 28
5.2 PERFORMANCE BY AMERICABLE . . . . . . . . . . . . . . . . .
. . 28
5.3 CONSENTS. . . . . . . . . . . . . . . . . . . . . . . . . .
. . 28
5.4 ADDITIONAL DOCUMENTS. . . . . . . . . . . . . . . . . . . .
. . 29
5.5 NO PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . .
. . 29
5.6 NO CLAIMS . . . . . . . . . . . . . . . . . . . . . . . . .
. . 29
5.7 NO PROHIBITION. . . . . . . . . . . . . . . . . . . . . . .
. . 29
5.8 DUE DILIGENCE REVIEW. . . . . . . . . . . . . . . . . . . .
. . 29
6. CONDITIONS PRECEDENT TO OBLIGATION OF AMERICABLE TO CLOSE . .
. 29
6.1 ACCURACY OF REPRESENTATIONS . . . . . . . . . . . . . . . .
. . 29
6.2 BUYER'S PERFORMANCE . . . . . . . . . . . . . . . . . . . .
. . 30
6.3 CONSENTS. . . . . . . . . . . . . . . . . . . . . . . . . .
. . 30
6.4 ADDITIONAL DOCUMENTS. . . . . . . . . . . . . . . . . . . .
. . 30
6.5 NO INJUNCTION . . . . . . . . . . . . . . . . . . . . . . .
. . 30
7. INDEMNIFICATION; REMEDIES . . . . . . . . . . . . . . . . . .
. 31
7.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY
KNOWLEDGE. . 31
7.2 INDEMNIFICATION BY AMERICABLE . . . . . . . . . . . . . . .
. . 32
8. GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . .
. 33
8.1 EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . .
. . 33
8.2 PUBLIC ANNOUNCEMENTS. . . . . . . . . . . . . . . . . . . .
. . 33
8.3 CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . .
. . 33
8.4 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 33
8.5 JURISDICTION; SERVICE OF PROCESS. . . . . . . . . . . . . .
. . 34
8.6 FURTHER ASSURANCES. . . . . . . . . . . . . . . . . . . . .
. . 35
8.7 WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 35
8.8 ENTIRE AGREEMENT AND MODIFICATION . . . . . . . . . . . . .
. . 35
8.9 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS. . . . .
. . 35
8.10 SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . .
. . 36
8.11 SECTION HEADINGS, CONSTRUCTION. . . . . . . . . . . . . . .
. . 36
8.12 TIME OF ESSENCE . . . . . . . . . . . . . . . . . . . . . .
. . 36
8.13 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . .
. . 36
8.14 COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . .
. . 36
9. COVENANTS REGARDING PERFORMANCE FOLLOWING THE DATE OF CLOSING
. 36
9.1 COLLECTION OF RECEIVABLES . . . . . . . . . . . . . . . . .
. . 36
9.2 FURTHER ACTS AND ASSURANCES . . . . . . . . . . . . . . . .
. . 37
9.3 USE OF FACILITIES . . . . . . . . . . . . . . . . . . . . .
. . 37
ii
<PAGE>
9.4 JOINDER AGREEMENT . . . . . . . . . . . . . . . . . . . . .
. . 37
9.5 SETTLEMENT OF DEBTS . . . . . . . . . . . . . . . . . . . .
. . 37
SCHEDULE 2.3 PURCHASE PRICE ADJUSTMENT
SCHEDULE 2.5 LIABILITIES
EXHIBIT 2.3 FORM OF ESCROW AGREEMENT
EXHIBIT 2.5 ASSUMPTION AGREEMENT
EXHIBIT 2.7 BILL OF SALE
iii
<PAGE>
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is made as of June
27, 2003, by
and among APA Cables and Networks, Inc., a Minnesota corporation
("Buyer"), APA
Optics, Inc., a Minnesota corporation ("APA"), and Americable,
Inc., a Minnesota
corporation ("Americable").
RECITALS
Buyer is a wholly-owned Subsidiary of APA.
Buyer desires to purchase substantially all assets of
Americable, and Americable
desires to sell such assets to Buyer, for the consideration and
on the terms set
forth in this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as
follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms have the
meanings specified
or referred to in this Section 1:
"Americable"-- as defined in the introductory paragraph of this
Agreement.
------------
"Americable Financial Statements"-- as defined in the Section
2.7(viii) of this
----------------------------------
Agreement.
"APA"--as defined in the introductory paragraph of this
Agreement.
-----
"Applicable Contract"--any Contract included in the Assets which
would be deemed
---------------------
"material" to a prudent business person and (a) under which
Americable has or
may acquire any material rights, (b) under which Americable has
or may become
subject to any material obligation or liability, or (c) by which
Americable or
any of the material assets owned or used by it is or is likely
to become bound.
By way of example and not limitation, a Contract is material if
it provides or
is likely to provide substantial revenues or is likely to
subject Americable to
substantial liability. A contract for acquisition by Americable
of services or
goods which cannot be obtained from another source or provider
is also material.
"Assets"--the assets, tangible and intangible, of Americable
used or useful in
--------
Americable's business, wherever located, consisting of all of
Americable's
assets as of the date of this Agreement, plus additions and
accretions between
the date of this Agreement and the Closing Date. By way of
example, and not in
limitation of the foregoing, the Assets include all equipment,
inventory,
finished product, intellectual property, trade secrets, accounts
receivable,
Contracts, commitments, customer lists, recoveries in insurance,
litigation or
warranty with respect to any assets, work-in process, the
corporate name and
assumed names, and all goodwill; provided, however, that the
Assets do not
-------- -------
include the Excluded Assets (as hereinafter defined).
<PAGE>
"Assumption Agreement"--as defined in Section 2.5 of this
Agreement.
-----------------------
"Balance Sheet Date"-- May 31, 2003.
----------------------
"Basket Amount"--as defined in Section 7.2 of this
Agreement.
----------------
"Best Efforts"--the efforts that a prudent Person desirous of
achieving a result
--------------
would use in similar circumstances to ensure that such result is
achieved as
expeditiously as practicable; provided, however, that an
obligation to use Best
------------------
Efforts under this Agreement does not require the Person subject
to that
obligation to take actions that would result in a materially
adverse change in
the benefits to or rights of such Person under this Agreement or
the
Contemplated Transactions.
"Bill of Sale"--as defined in Section 2.7 of this Agreement.
----------------
"Bondholder"-a holder of the $10,000,000 Subordinated Debentures
issued pursuant
------------
to that certain Indenture dated as of December 1, 2000 between
Americable and
National City Bank of Minneapolis, as Trustee.
"Breach"--a "Breach" by a Person of a representation, warranty,
covenant,
--------
obligation, or other provision of this Agreement or any
instrument delivered
pursuant to this Agreement will be deemed to have occurred if
there is or has
been any material inaccuracy on the part of such Person in or
material breach by
such Person of, or any material failure by such Person to
perform or comply
with, such representation, warranty or covenant, obligation or
other provision.
"Buyer"--as defined in the first paragraph of this
Agreement.
-------
"Closing"--as defined in Section 2.6 of this Agreement.
---------
"Closing Date"--June 27, 2003
---------------
"Consent"--any approval, consent, ratification, waiver, or other
authorization
---------
(including any Governmental Authorization).
"Contemplated Transactions"--all of the transactions
contemplated by this
----------------------------
Agreement, including:
(a) the sale of the Assets by Americable to Buyer;
(b) the performance by Buyer, APA and Americable and their
respective
Affiliates of their respective covenants and obligations under
this Agreement;
and
(c) Buyer's acquisition and ownership of the Assets and exercise
of control
over them.
"Contract"--any agreement, contract, obligation, promise or
undertaking (whether
----------
written or oral and whether express or implied) that is legally
binding.
5
<PAGE>
"Disclosure Letter"--the disclosure letter delivered by
Americable to Buyer
--------------------
concurrently with the execution and delivery of this
Agreement.
"Encumbrance"--any charge, claim, community property interest,
condition,
-------------
equitable interest, lien, option, pledge, security interest,
right of first
refusal or restriction of any kind, including any restriction on
use, voting,
transfer, receipt of income or exercise of any other attribute
of ownership.
"Environmental Law"--any Legal Requirement that requires or
relates to:
--------------------
(a) advising appropriate authorities, employees, and the public
of intended
or actual releases of pollutants or Hazardous Materials,
violations of discharge
limits, or other prohibitions and of the commencements of
activities, such as
resource extraction or construction, that could have a
significant impact on the
environment;
(b) preventing or reducing to acceptable levels the release of
pollutants
or Hazardous Materials into the environment;
(c) reducing the quantities, preventing the release, or
minimizing the
hazardous characteristics of wastes that are generated;
(d) assuring that products are designed, formulated, packaged,
and used so
that they do not present unreasonable risks to human health or
the environment
when used or disposed of;
(e) protecting resources, species, or ecological amenities;
(f) reducing to acceptable levels the risks inherent in the
transportation
of Hazardous Materials;
(g) cleaning up pollutants that have been released, preventing
the threat
of release, or paying the costs of such clean up or prevention;
or
(h) making responsible parties pay private parties, or groups of
them, for
damages done to their health or the environment, or permitting
self-appointed
representatives of the public interest to recover for injuries
done to public
assets.
"ERISA"--as defined in Section 3.13 of this Agreement.
-------
"Escrow Agent"--as defined in Section 2.3 of this Agreement.
---------------
"Escrow Agreement"--as defined in Section 2.3 of this
Agreement.
-------------------
"Excluded Assets"-(1) all cash held by or on behalf of
Americable, (2) payments
------------------
due from Related Persons of Americable up to the amount of
$166,000, (3)
pre-paid expenses up to the amount of $179,000, (4) 193,800
shares of the common
stock of Vicom, Inc. held by or on behalf of Americable, (5) the
Irrevocable
Standby Letter of Credit (the "Letter of Credit") issued by
National City Bank
(and restricted cash collateral for the same) in the face amount
of $235,000 in
6
<PAGE>
favor of in favor of West Real Estate and Management, Inc. (the
"Landlord")
under the Lease as security for performance of the Lease, all
according to the
terms of such Letter of Credit, and (6) all Contracts except
those listed on
------
Schedule 2.5 to this Agreement.
-------------
"Facilities"--any real property, leaseholds, or other interests
currently owned
------------
or operated by Americable and any buildings, plants, structures,
or equipment
(including motor vehicles and rolling stock) currently or
formerly owned or
operated by Americable.
"GAAP"--generally accepted United States accounting principles,
applied on a
------
consistent basis.
"General Damages"--as defined in Section 7.2 of this
Agreement.
------------------
"General Indemnity Claimant"--as defined in Section 7.2 of this
Agreement.
------------------------------
"Governmental Authorization"--any material approval, consent,
license, permit,
-----------------------------
waiver, or other authorization issued, granted, given, or
otherwise made
available by or under the authority of any Governmental Body or
pursuant to any
material Legal Requirement.
"Governmental Body"--any:
--------------------
(a) nation, state, county, city, town, village, district, or
other
jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other
government;
(c) governmental or quasi-governmental authority of any nature
(including
any governmental agency, branch, department, official, or entity
and any court
or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any
administrative,
executive, judicial, legislative, police, regulatory, or taxing
authority or
power of any nature.
"Hazardous Materials"--any waste or other substance that is
listed, defined,
----------------------
designated, or classified as, or otherwise determined to be,
hazardous,
radioactive, or toxic or a pollutant or a contaminant under or
pursuant to any
Environmental Law, including any admixture or solution thereof,
and specifically
including petroleum and all derivatives thereof or synthetic
substitutes
therefor and asbestos or asbestos-containing materials.
"Indebtedness"--means the indebtedness described in Schedule
3.24 of the
--------------
Disclosure Letter.
"Indemnified Parties"--as defined in Section 7.2 of this
Agreement.
----------------------
"Indemnity Fund"--as defined in Section 2.3 of this
Agreement.
-----------------
"Indemnity Release Date"-the later of (a) the 13-month
anniversary of the
--------------------------
Closing Date, and (b) the final administration of Americable's
estate in
accordance with any bankruptcy, reorganization, debt arrangement
or other
proceeding under any bankruptcy or insolvency law.
7
<PAGE>
"Intellectual Property"--any and all (i) inventions (whether
patentable or
------------------------
unpatentable and whether or not reduced to practice), all
improvements thereto,
and all patents, patent applications and patent disclosures,
together with all
reissuances, continuations, continuations in part, revisions,
extensions and
reexaminations thereof, (ii) trademarks, service marks, trade
dress, logos,
trade names, assumed names and corporate names, together with
all translations,
adaptations, derivations and combinations thereof and including
all goodwill
associated therewith, and all applications, registrations and
renewals in
connection therewith, (iii) copyrightable works, all copyrights
and all
applications, registrations and renewals in connection
therewith, (iv) mask
works and all applications, registrations and renewals in
connection therewith,
(v) trade secrets and confidential business information
(including ideas,
research and development, know-how, technology, formulas,
compositions,
manufacturing and production processes and techniques, technical
data, designs,
drawings, specifications, customer and supplier lists, pricing
and cost
information and business and marketing plans and proposals),
(vi) computer
software (including data and related software program
documentation in computer
readable and hard-copy forms), (vii) other intellectual property
and proprietary
rights of any kind, nature or description, and (viii) copies of
tangible and
embodiments thereof (in whatever form or medium).
"IRC" or "Code"--the Internal Revenue Code of 1986 or any
successor law, and
-----------------
regulations issued by the IRS pursuant to the Internal Revenue
Code or any
successor law.
"IRS"--the United States Internal Revenue Service or any
successor agency, and,
-----
to the extent relevant, the United States Department of the
Treasury.
"Knowledge"--an individual will be deemed to have "Knowledge" of
a particular
-----------
fact or other matter if:
(a) such individual is actually aware of such fact or other
matter; or
(b) a prudent individual could be expected to discover or
otherwise become
aware of such fact or other matter in the course of conducting a
reasonable
investigation concerning the existence of such fact or other
matter.
A Person (other than an individual) will be deemed to have
"Knowledge" of a
particular fact or other matter if any individual who is serving
as an officer
has, or at any time had, Knowledge of such fact or other
matter.
"Lease"--the lease dated April 24, 2000 between the Landlord (as
lessor) and
-------
Americable (as tenant) for certain premises located at 10851
Louisiana Avenue
South, Bloomington, Minnesota.
"Legal Requirement"--any Order or any constitution, law,
ordinance, principle of
-------------------
common law, regulation, statute or treaty of a Governmental
Body.
"Letter of Credit"--as defined in the definition of "Excluded
Assets," above.
--------------------
"Liability" or "Liabilities" --any and all debts, liabilities
and/or obligations
----------------------------
of any type, nature or description (whether known or unknown,
asserted or
unasserted, secured or unsecured, absolute
8
<PAGE>
or contingent, accrued or unaccrued, liquidated or unliquidated
and whether due
or to become due).
"Material Consent"--as defined in Section 3.2.
------------------
"Occupational Safety and Health Law"--any Legal Requirement
designed to provide
-------------------------------------
safe and healthful working conditions and to reduce occupational
safety and
health hazards.
"Order"--any award, decision, injunction, judgment, order,
ruling, subpoena, or
-------
verdict entered, issued, made, or rendered by any court,
administrative agency,
or other Governmental Body or by any arbitrator.
"Organizational Documents"--(a) the articles or certificate of
incorporation and
--------------------------
the bylaws of a corporation party to this Agreement; and (b) any
amendment to
any of the foregoing.
"Person"-- any individual, corporation (including any non-profit
corporation),
---------
cooperative, general or limited partnership, limited liability
company, joint
venture, estate, trust, association, organization, labor union,
or other entity
or Governmental Body.
"Plan"--as defined in Section 3.13 of this Agreement.
------
"Proceeding"--any action, arbitration, audit, hearing,
investigation,
------------
litigation, or suit (whether civil, criminal, administrative,
investigative, or
informal) commenced, brought, conducted, or heard by or before,
or otherwise
involving, any Governmental Body or arbitrator.
"Purchase Price"--as defined in Section 2.2 of this
Agreement.
-----------------
"Purchase Price Holdback"--as defined in Section 2.3 of this
Agreement.
---------------------------
"Qualified Claimant"-any Bondholder, trustee in the potential
bankruptcy of
---------------------
Americable, receiver, trade creditor, contractual creditor, or
other party to
whom any debt of Americable is due and owing under or arising
from any Contract.
"Qualified Damages"--as defined in Section 7.2 of this
Agreement.
--------------------
"Related Person"--with respect to a particular individual:
-----------------
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled by such
individual
or one or more members of such individual's Family;
(c) any Person in which such individual or members of such
individual's
Family hold (individually or in the aggregate) a Material
Interest; and
(d) any Person with respect to which such individual or one or
more members
of such individual's Family serves as a director, officer,
partner, executor, or
trustee (or in a similar capacity).
9
<PAGE>
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is directly
or
indirectly controlled by, or is directly or indirectly under
common control with
such specified Person;
(b) any Person that holds a Material Interest in such specified
Person;
(c) each Person that serves as a director, officer, partner,
executor, or
trustee of such specified Person (or in a similar capacity);
(d) any Person in which such specified Person holds a Material
Interest;
(e) any Person with respect to which such specified Person
serves as a
general partner or a trustee (or in a similar capacity); and
(f) any Related Person of any individual described in clause (b)
or (c).
For purposes of this definition, (a) the "Family" of an
individual includes (i)
the individual, (ii) the individual's spouse and former spouses,
(iii) any other
natural person who is related to the individual or the
individual's spouse
within the second degree, and (iv) any other natural person who
resides with
such individual, and (b) "Material Interest" means direct or
indirect beneficial
ownership (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934,
interpreted regardless of whether such Person is subject
thereto) of voting
securities or other voting interests representing at least 15%
of the
outstanding voting power of a Person or equity securities or
other equity
interests representing at least 15% of the outstanding equity
securities or
equity interests in a Person.
"Representative"--with respect to a particular Person, any
director, governor,
----------------
officer, manager, employee, agent, consultant, advisor, or other
representative
of such Person, including legal counsel, accountants, and
financial advisors.
"Subsidiary"--with respect to any Person ("Parent"), any
corporation or other
------------
Person whose securities or other interests having the power to
elect a majority
of that corporation's or other Person's board of directors or
similar governing
body, or otherwise having the power to direct the business and
policies of that
corporation or other Person (other than securities or other
interests having
such power only upon the happening of a contingency that has not
occurred) are
held by the Parent or one or more of its Subsidiaries.
"Tax"--any tax (including any income tax, capital gains tax,
value-added tax,
-----
sales tax, property tax, gift tax, or estate tax), levy,
assessment, tariff,
duty (including any customs duty), deficiency, or other fee, and
any related
charge or amount (including any fine, penalty, interest or
addition to tax),
imposed, assessed or collected by or under the authority of any
Governmental
Body or payable pursuant to any tax-sharing agreement or any
other Contract
relating to the sharing or payment of any such tax, levy,
assessment, tariff,
duty, deficiency or fee.
"Tax Return"--any return (including any information return),
report, statement,
-------------
schedule, notice, form, or other document or information filed
with or
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submitted to, or required to be filed with or submitted to, any
Governmental
Body in connection with the determination, assessment,
collection, or payment of
any Tax or in connection with the administration,
implementation, or enforcement
of or compliance with any Legal Requirement relating to any
Tax.
"Threatened"--a claim, Proceeding, dispute, action, or other
matter will be
------------
deemed to have been "Threatened" if any demand or statement has
been made
(orally or in writing) or any notice has been given (orally or
in writing), or
if any other event has occurred or any other circumstances
exist, that would
lead a prudent Person to conclude that such a claim, Proceeding,
dispute,
action, or other matter is likely to be asserted, commenced,
taken, or otherwise
pursued in the future.
2. SALE AND TRANSFER OF ASSETS; CLOSING
2.1 ASSETS
Subject to the terms and conditions of this Agreement, at the
Closing,
Americable will sell, transfer and assign to Buyer, and Buyer
will purchase and
acquire from Americable, all of Americable's right, title and
interest, as of
the Closing Date (as hereinafter defined), in and to all of the
Assets.
2.2 PURCHASE PRICE
The purchase price (the "Purchase Price") for the Assets will
be
$2,050,000, subject to adjustment as set forth in Section 2.3 of
this Agreement.
2.3 ESCROW
(a) At the Closing, Buyer shall cause to be deposited with U.S.
Bank
National Association (the "Escrow Agent") the sum of $307,500,
consisting
of $205,000 (the "Indemnity Fund") and $102,500 (the "Purchase
Price
Holdback") in immediately available funds pursuant to an Escrow
Agreement
in substantially the form of Exhibit 2.3 attached hereto (the
"Escrow
-----------
Agreement").
(b) The Indemnity Fund shall be held to protect Buyer with
respect to
matters as to which Americable is required to indemnify Buyer
pursuant to
the provisions of Article 7 of this Agreement. The Indemnity
Fund, less the
amount of all claims made by the Buyer for indemnification, plus
the amount
of any accrued interest attributed to the portion of the
Indemnity Fund
owed to Americable shall be paid to Americable (or as directed
by its
authorized representative) as and when described in the Escrow
Agreement.
(c) The Purchase Price Holdback shall be used to increase or
decrease,
as applicable, the Purchase Price in the event that Closing Net
Assets (as
defined in Schedule 2.3) is higher or lower, as the case may be,
than Net
------------
Assets as of May 31, 2003, all as more fully described in
Schedule 2.3.
------------
2.4 ALLOCATION OF PURCHASE PRICE
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Buyer shall, in a reasonable manner and after taking into
account the
applicable Treasury Regulations and the fair market value of
such items,
determine the fair market value of the Assets and Buyer shall
allocate the
Purchase Price, as prepared by Buyer on Schedule 2.4, among the
Assets in
------------
accordance with said determination and Section 1060 of the IRC.
Said allocation
shall be communicated by Buyer to Americable as soon as
practical after it is
available. Said allocation shall be subject to Americable's
consent (which shall
not be unreasonably withheld). Buyer and Americable shall each
file, in
accordance with Section 1060 of the IRC, an Asset Allocation
Statement on Form
8594 (which conforms with such allocation) with its federal
income Tax Return
for the tax year in which the Closing Date occurs and shall
contemporaneously
provide the other party with a copy of the Form 8594 being
filed. Each party
agrees not to assert, in connection with any Tax Return, audit
or other similar
proceeding, any allocation of the Purchase Price which differs
from the
allocation determined by Buyer and consented to by Seller
hereunder.
2.5 ASSUMPTION OF LIABILITIES
(a) LIMITATION ON ASSUMPTION OF LIABILITIES. Americable shall
transfer
the Assets to Buyer on the Closing Date free and clear of all
Encumbrances,
and Buyer shall not, by virtue of its purchase of the Assets,
assume or
become responsible for any Liabilities of Americable or any
Shareholder
other than pursuant to this Section 2.5.
(b) ASSUMPTION OF CERTAIN LIABILITIES. Notwithstanding the
provisions
of Section 2.5(a) Buyer covenants and agrees that on the Closing
Date, it
shall execute and deliver to Americable an assumption agreement
in the form
of Exhibit 2.5 attached hereto (the "Assumption Agreement")
pursuant to
-----------
which it will assume and agree to perform and discharge only the
following
Liabilities of Americable:
(i) All Liabilities of Americable arising under the
Applicable
Contracts listed or described on Schedule 2.5 which accrue and
become
------------
performable, in full or in part, on and after the Closing Date,
except
that Buyer does not assume any Liabilities for Americable
products
sold or services rendered (A) under such Contracts prior to
the
Closing Date to the extent that Americable has received payment
for
such products sold or services rendered or (B) under any
Contracts
which are Excluded Assets; and
(ii) Any other Liabilities of Americable identified on
Schedule
--------
2.5 hereto.
---
2.6 CLOSING
The purchase and sale (the "Closing") provided for in this
Agreement will
take place at the offices of Moss & Barnett, A Professional
Association, 4800
Wells Fargo Center, 90 South Seventh Street, Minneapolis,
Minnesota 55402, at
10:00 a.m. (local time) on the date of this Agreement (the
"Closing Date").
Notwithstanding any provision of this Agreement to the contrary,
the Closing
shall be effective for all purposes, including Tax and
accounting purposes, as
of the close of business on the Closing Date.
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<PAGE>
2.7 CLOSING OBLIGATIONS
At the Closing:
(a) Americable will deliver to Buyer:
(i) a copy certified by the Secretary of Americable of the
duly
adopted resolutions of Americable's Board of Directors and
shareholders
approving this Agreement and authorizing the execution and
delivery of this
Agreement, including the documents, instruments and agreements
to be
executed and/or delivered by Americable and/or shareholders
pursuant to
this Agreement, and the consummation of the Contemplated
Transactions;
(ii) a Bill of Sale in the form of Exhibit 2.7 attached hereto
to all
-----------
of the Assets duly executed by Americable (the "Bill of
Sale");
(iii) duly executed assignments by Americable to Buyer with
respect to
all Intellectual Property in a form acceptable for filing with
the U.S.
Patent and Trademark Office;
(iv) releases, satisfactions, or terminations of all
financing
statements or other evidences of Encumbrances filed with the
Minnesota
Secretary of State, any county recorder and/or any other similar
office in
the State of Minnesota or any other state or jurisdiction
evidencing a
material Encumbrance on any of the Assets;
(v) those Material Consents, releases, assignments and
permissions set
forth in Section 3.2 of the Disclosure Letter, each in a form
reasonably
satisfactory to counsel for Buyer;
(vi) certificates of title and assignments thereof for
vehicles
included in the Assets, if any;
(vii) audited financial statements of Americable for its fiscal
years
ended December 31, 2002 and December 31, 2001, with reports of
the
auditors, and unaudited financial statements for the five months
ended May
31, 2003 (collectively, the "Americable Financial
Statements");
(viii) the Escrow Agreement;
(ix) the side letter by and among Buyer, APA and Americable
concerning
Buyer's occupancy and use of Americable's Bloomington, Minnesota
facilities
(the "Side Letter"); and
(x) such other documents and items as are reasonably necessary
or
appropriate to effect the consummation of the Contemplated
Transactions.
(b) Buyer will deliver:
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<PAGE>
(i) to Americable, the Purchase Price (minus the Indemnity Fund
and
the Purchase Price Holdback) by wire transfer to Americable's
account at
M&I Marshall & Isley Bank, Minneapolis Branch, 651
Nicollet Mall,
Minneapolis, MN 55402, ABA #: 075000051, Swift Code: MARLUS44,
account
#1123912, reference: APACN asset purchase;
(ii) to Americable, a copy certified by the Secretary of Buyer
of the
duly adopted resolutions of the Board of Directors of Buyer and
APA
approving this Agreement and authorizing the execution and
delivery of this
Agreement, including the documents, instruments and agreements
to be
executed and/or delivered by the Buyer pursuant hereto, and
the
consummation of the Contemplated Transactions;
(iii) to Americable, the Assumption Agreement;
(iv) the Side Letter; and
(v) to the Escrow Agent, the escrowed portion of the Purchase
Price
and the Escrow Agreement.
2.8 PRORATION OF EXPENSES
Buyer shall be entitled to all amounts due or to become due and
payable to
Americable under any Contract included in the Assets both as of
and after the
Closing Date. All amounts due or to become due and payable by
Americable under
the Contracts and under the Liabilities assumed by Buyer under
Section 2.5 shall
be adjusted and prorated as of the opening of business on the
Closing Date such
that Americable shall be responsible for amounts allocable with
respect to
periods prior to the Closing Date, and Buyer shall be
responsible for amounts
allocable with respect to periods on and after the Closing
Date.
3. REPRESENTATIONS AND WARRANTIES OF AMERICABLE
Americable represents and warrants to Buyer and APA as
follows:
3.1 ORGANIZATION AND GOOD STANDING
Americable is a corporation duly organized, validly existing,
and in good
standing under the laws of the State of Minnesota, with full
power and
authority, corporate and otherwise, to conduct its business as
it is now being
conducted, to own or use the properties and assets that it
purports to own or
use, and to perform all its obligations under Applicable
Contracts. Americable
is duly qualified to do business as a foreign corporation and is
in good
standing under the laws of each state or other jurisdiction in
which either the
ownership or use of the properties owned or used by it, or the
nature of the
activities conducted by it, requires such qualification.
3.2 AUTHORITY; NO CONFLICT; CONSENTS
(a) This Agreement constitutes the legal, valid, and binding
obligation of
Americable, enforceable against Americable in accordance with
its terms, except
as such enforcement may be
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<PAGE>
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or
other laws of general application affecting enforcement of
creditors' rights or
by general principles of equity. Americable has the requisite
right, power,
authority, and capacity to e
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