Exhibit 2.1
ASSET PURCHASE AGREEMENT
by and among
MPC CORPORATION,
MPC-PRO, LLC,
GATEWAY, INC.
and
GATEWAY TECHNOLOGIES, INC.
September 4, 2007
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TABLE OF CONTENTS
PAGE
ARTICLE 1
PURCHASE AND SALE OF ASSETS
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Section 1.01. Purchased Assets
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2
|
|
Section 1.02. Excluded Assets
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4
|
ARTICLE 2
ASSUMPTION OF LIABILITIES
|
Section 2.01. Liabilities to be Assumed
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5
|
|
Section 2.02. Liabilities Not to be
Assumed
|
7
|
|
Section 2.03. Credit Support for Warranty
Liabilities
|
7
|
ARTICLE 3
EQUITY PURCHASE
|
Section 3.01. Purchase and Sale of GCI
Stock
|
9
|
|
Section 3.02. Purchase and Sale of GP Membership
Interest
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10
|
|
|
|
ARTICLE 4
PURCHASE PRICE
|
Section 4.01. Purchase Price
|
10
|
|
|
Section 4.02. Determination of Net Inventory Minus
Liabilities.
|
11
|
|
Section 4.03. Allocation of Purchase
Price
|
13
|
|
|
|
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLER
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Section 5.01. Corporate Matters.
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14
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Section 5.02. Ownership of GCI
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15
|
|
Section 5.03. Ownership of GCC
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15
|
|
Section 5.04. Ownership of GP
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15
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|
Section 5.05. No Violation
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16
|
|
Section 5.06. Financial Statements.
|
16
|
|
Section 5.07. Inventory
|
17
|
|
Section 5.08. Absence of Certain Changes
|
17
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|
Section 5.09. No Litigation
|
18
|
|
Section 5.10. Compliance With Laws and
Orders
|
18
|
|
Section 5.11. Title to Purchased Assets.
|
20
|
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Section 5.12. Transferred Contracts and
Commitments
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20
|
|
Section 5.13. Labor Matters
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21
|
|
Section 5.14. Employee Benefit Plans
|
21
|
|
Section 5.15. Warranties; Product
Liability
|
22
|
|
Section 5.16. Licensed Trade Rights
|
23
|
|
Section 5.17. Tax Matters
|
23
|
|
Section 5.18. Restrictive Documents and Territorial
Restrictions
|
24
|
|
Section 5.19. Relationships
|
24
|
|
Section 5.20. Related Party Transactions
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24
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Section 5.21. No Insolvency
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24
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Section 5.22. Brokers or Finders
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25
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Section 5.23. Private Placement
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25
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Section 5.24. Purchase for Investment
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25
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Section 5.25. Inspections; No Other
Representations
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25
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|
Section 5.26. SEC Filings and the Sarbanes-Oxley
Act
|
25
|
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYER AND
MPC
|
Section 6.01. Corporate Matters.
|
27
|
|
Section 6.02. Authority of MPC and Buyer
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27
|
|
Section 6.03. No Violation
|
27
|
|
Section 6.04. Issuance of MPC Shares
|
28
|
|
Section 6.05. Capitalization
|
28
|
|
Section 6.06. SEC Filings and the Sarbanes-Oxley
Act
|
28
|
|
Section 6.07. Financial Statements
|
29
|
|
Section 6.08. No Litigation
|
29
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|
Section 6.09. No Undisclosed Material
Liabilities
|
29
|
|
Section 6.10. Compliance with Laws and
Orders
|
30
|
|
Section 6.11. Ownership of Buyer; No Prior
Activities
|
31
|
|
Section 6.12. Private Placement
|
31
|
|
Section 6.13. Brokers or Finders
|
31
|
|
Section 6.14. Purchase for Investment
|
31
|
|
Section 6.15. Sufficient Cash
|
31
|
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Section 6.16. Tax Matters
|
31
|
|
Section 6.17. Inspections; No Other
Representations
|
31
|
ARTICLE 7
EMPLOYEES - EMPLOYEE BENEFITS
|
Section 7.01. Transferred Organization Employees;
Affected Employees
|
32
|
|
Section 7.02. Reporting; Payroll Taxes; Commissions
and Bonuses.
|
33
|
|
Section 7.03. Employee Benefit Plans.
|
34
|
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ARTICLE 8
ADDITIONAL COVENANTS
|
Section 8.01. Reasonable Efforts; Antitrust
Filings
|
35
|
|
Section 8.02. Access to Information and
Records
|
36
|
|
Section 8.03. Notices
|
37
|
|
Section 8.04. Conduct of Transferred Organization
Pending the Closing
|
38
|
|
Section 8.05. Material Consents; Assignment of
Transferred Contracts
|
39
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|
Section 8.06. Financial Statements
|
39
|
|
Section 8.07. No Solicitation of
Employees
|
39
|
|
Section 8.08. Control of Transferred
Organization
|
40
|
|
Section 8.09. Public Announcements
|
40
|
|
Section 8.10. Non-Competition
|
40
|
|
Section 8.11. MPC Board Nominee
|
41
|
|
Section 8.12. Observer Rights
|
42
|
|
Section 8.13. Conversion of MPC Preferred
Shares
|
43
|
ARTICLE 9
CONDITIONS PRECEDENT TO BUYER’S
OBLIGATIONS
|
Section 9.01. Representations and Warranties True on
the Closing Date
|
43
|
|
Section 9.02. Compliance with Agreement
|
43
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|
Section 9.03. Absence of Litigation
|
43
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|
Section 9.04. Compliance with Law
|
44
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|
Section 9.05. HSR; Regulatory Approvals
|
44
|
|
Section 9.06. Material Consents
|
44
|
|
Section 9.07. Transition Services
Agreement
|
44
|
|
Section 9.08. License of Seller Rights
|
44
|
|
Section 9.09. Lock-Up Agreement
|
44
|
|
Section 9.10. Resignation of Directors and
Officers
|
44
|
|
Section 9.11. Agreements with Quanta
|
44
|
ARTICLE 10
CONDITIONS PRECEDENT TO SELLER’S
OBLIGATIONS
|
Section 10.01. Representations and Warranties True
on the Closing Date
|
45
|
|
Section 10.02. Compliance with Agreement
|
45
|
|
Section 10.03. Absence of Litigation
|
45
|
|
Section 10.04. Compliance with Law
|
45
|
|
Section 10.05. HSR; Regulatory Approvals
|
45
|
|
Section 10.06. MPC Capital
|
45
|
|
Section 10.07. Registration Rights
|
45
|
|
Section 10.08. Transition Services
Agreement
|
46
|
|
Section 10.09. Intercreditor Agreement
|
46
|
|
Section 10.10. Purchase of Quanta’s Interest
in GCC
|
46
|
|
Section 10.11. Section 338(h)(10)
Election
|
46
|
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ARTICLE 11
SURVIVAL; INDEMNIFICATION
|
Section 11.01. Survival
|
46
|
|
Section 11.02. Indemnification by Seller
|
46
|
|
Section 11.03. Indemnification by MPC and
Buyer
|
47
|
|
Section 11.04. Indemnification of Third-Party
Claims
|
47
|
|
Section 11.05. Claims Procedure
|
48
|
|
Section 11.06. Limitations on
Indemnification
|
49
|
|
Section 11.07. Purchase Price Adjustment
|
50
|
|
Section 11.08. Allocation of Taxes
|
50
|
|
Section 11.09. Exclusivity of
Indemnification
|
51
|
ARTICLE 12
CLOSING
|
Section 12.01. Documents to be Delivered by
Seller
|
51
|
|
Section 12.02. Documents to be Delivered by
Buyer
|
52
|
ARTICLE 13
TERMINATION
|
Section 13.01. Right of Termination
|
53
|
|
Section 13.02. Termination for Breach
|
53
|
ARTICLE 14
POST-CLOSING COVENANTS
|
Section 14.01. Mutual Confidentiality
Agreements.
|
54
|
|
Section 14.02. Tax Covenants
|
55
|
|
Section 14.03. Books and Records;
Personnel
|
57
|
|
Section 14.04. Assignment of Contracts
|
57
|
|
Section 14.05. Certain Contracts Not
Assigned
|
58
|
|
Section 14.06. Provisions Relating to Environmental
Liabilities
|
58
|
|
Section 14.07. Reports
|
59
|
ARTICLE 15
RESOLUTION OF DISPUTES
|
Section 15.01. Nonbinding Mediation
|
60
|
|
Section 15.02. Mediator
|
60
|
|
Section 15.03. Procedures
|
60
|
|
Section 15.04. Fees and Costs
|
60
|
|
Section 15.05. Confidentiality
|
60
|
|
Section 15.06. Continued Performance
|
60
|
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Section 15.07. Tolling
|
60
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ARTICLE 16
MISCELLANEOUS
|
Section 16.01. Schedules
|
61
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|
Section 16.02. Further Assurance
|
61
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|
Section 16.03. Disclosures and
Announcements
|
61
|
|
Section 16.04. Assignment; Parties in
Interest
|
61
|
|
Section 16.05. Governing Law; Exclusive
Jurisdiction
|
62
|
|
Section 16.06. WAIVER OF JURY TRIAL
|
62
|
|
Section 16.07. Amendment and Waiver
|
62
|
|
Section 16.08. Notice
|
62
|
|
Section 16.09. Expenses
|
63
|
|
Section 16.10. Prevailing Party’s
Attorneys’ Fees
|
64
|
|
Section 16.11. Entire Agreement
|
64
|
|
Section 16.12. Counterparts; Electronic Signatures;
Third Party Beneficiaries
|
64
|
|
Section 16.13. Headings
|
65
|
|
Section 16.14. Severability
|
65
|
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SCHEDULES
|
Schedule 1.01(b)
|
—
|
Transferred Organization Inventory
|
|
Schedule 1.01(c)
|
—
|
Service and Replacement Parts Inventory
|
|
Schedule 1.01(d)
|
—
|
Transferred Organization Equipment and Transferred
Software
|
|
Schedule 1.01(f)
|
—
|
Transferred Tooling
|
|
Schedule 1.01(h)
|
—
|
Assigned Licenses and Permits
|
|
Schedule 1.01(i)
|
—
|
Transferred Contracts
|
|
Schedule 2.01(a)
|
—
|
Warranty Obligations
|
|
Schedule 2.01(d)
|
—
|
Tooling Liabilities
|
|
Schedule 5.03
|
—
|
Ownership of GCC
|
|
Schedule 5.05
|
—
|
No Violation
|
|
Schedule 5.07
|
—
|
Inventory
|
|
Schedule 5.08
|
—
|
Absence of Certain Change
|
|
Schedule 5.09
|
—
|
No Litigation
|
|
Schedule 5.10
|
—
|
Compliance with Laws and Orders
|
|
Schedule 5.11
|
—
|
Title to Purchased Assets
|
|
Schedule 5.14
|
—
|
Employee Benefit Plans
|
|
Schedule 5.17
|
—
|
Tax Matters
|
|
Schedule 6.05
|
—
|
Capitalization
|
|
Schedule 6.08
|
—
|
No Litigation
|
|
Schedule 8.04
|
—
|
Material Changes
|
|
Schedule 9.06
|
—
|
Required Consents
|
vii
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EXHIBITS
|
Exhibit A
|
Promissory Note
|
|
|
Exhibit B
|
Amendment to MPC’s Articles of
Incorporation
|
|
Exhibit C
|
Agreed Accounting Principles
|
|
|
Exhibit D
|
Transition Services Agreement
|
|
|
Exhibit E
|
License Agreement
|
|
|
Exhibit F
|
Lock-Up Agreement
|
|
|
Exhibit G
|
Registration Rights Agreement
|
|
|
Exhibit H
|
Intercreditor Agreement
|
|
|
Exhibit I
|
Bill of Sale
|
|
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viii
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE
AGREEMENT (this “
Agreement ”)
dated and effective as of September 4, 2007 (the “
Effective Date ”), by and between MPC
CORPORATION , a Colorado corporation
(“ MPC ”), MPC-PRO, LLC
, a Delaware limited liability company
(“ Buyer ”), GATEWAY, INC.
, a Delaware corporation (“
Seller ”)
and GATEWAY TECHNOLOGIES, INC.
, a Delaware corporation (“
Gateway Technologies ”). Certain capitalized terms used herein shall have the
meanings given to them in the Table of Definitions attached to this
Agreement as Annex I
, which is incorporated hereby.
RECITALS
A.
Seller, through its Professional Division and that
portion of its Consumer Direct Division that markets
business-related products, is engaged in the sale, resale and
marketing of desktop computer systems, laptops, servers, networking
gear and other peripherals, and replacement parts with respect
thereto to customers of the Professional Division and that portion
of its Consumer Direct Division that markets business-related
products (the “ Products
”), and, through portions of its Customer Care
& Support department, the provision of technical services to
such customers (collectively, and together with GCI and GP, the
“ Transferred
Organization ”). Seller will retain
all other aspects of its business, including without limitation,
its product development and operations departments, the remainder
of its Customer Care & Support department and its consumer
direct business, except for the portion of the Consumer Direct
Division that is part of the Transferred Organization and the
warranty liabilities transferred pursuant to this Agreement
(“ Seller’s Retained
Business ”).
B.
Gateway Companies, Inc., a Delaware corporation
(“ GCI ”) is a wholly-owned subsidiary of Seller. Seller owns
all of the issued and outstanding common stock of GCI (the
“ GCI Stock ”).
C.
Seller and Quanta Computer Inc. (“
Quanta ”) have
entered into a joint venture and formed Gateway Pro Partners, LLC,
a Delaware limited liability company (“ GCC ”). GCI owns a sixty
percent (60%) membership interest in GCC (the “
GCC Interest ”).
D.
GCI owns 90% of the membership interest in Gateway
Professional, LLC, a Delaware limited liability company
(“ GP ”), and Gateway Technologies owns the remaining 10% of
the membership interest in GP (together, the “
GP Interest ”).
E.
Buyer desires to purchase and assume from Seller and
its Affiliates, and Seller desires to sell and transfer to Buyer
(i) certain assets and liabilities of Seller set forth herein
associated with the Transferred Organization, (ii) the
GCI
(MP) 08481/006/APA/APA.doc
Stock, (iii) the GCC Interest and (iv) the GP
Interest, in each case on the terms and conditions set forth in
this Agreement.
AGREEMENT
In consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions
hereinafter set forth, and intending to be legally bound hereby,
the parties hereto agree as follows.
ARTICLE 1
PURCHASE AND SALE
OF ASSETS
Section 1.01 . Purchased
Assets. Subject to the terms and
conditions of this Agreement (including, without limitation,
Section 1.02), Seller shall sell, transfer, convey, assign and
deliver to Buyer, or shall cause to be sold, transferred, conveyed
and delivered to Buyer, and Buyer shall purchase, assume and accept
all of Seller’s and/or the relevant Transferred
Subsidiary’s right, title and interest to, the following
specified assets related to the Transferred Organization and GCC
(collectively, the “ Purchased
Assets ”) on the Closing Date, in
each case as such assets exist as of the Closing Date:
(a)
General Intangibles .
The (i) customer lists, (ii) customer relationships, (iii) goodwill
(other than goodwill that relates to the use of the Seller’s
Trademarks, which shall be subject to the terms and conditions of
the License Agreement) and (iv) other intangible rights which are,
in the case of each of clauses (i) through (iv), related
exclusively to the Transferred Organization.
(b)
Owned Inventory . Such
of the Seller’s or the Transferred Subsidiaries’
inventories of raw materials, work-in-process, finished goods,
supplies, components, and related packaging materials held at GCC
and the Tennessee BAX hub (together, the “
GCC Facilities ”)
as are set forth in or otherwise described in Schedule 1.01(b) (the
“ Transferred Organization
Inventory ”); provided , however , that (i) Seller will be
responsible for all delivery refusals and will own the inventory
related to any such refusal when it comes back, (ii) Seller will be
responsible for all returns of products sold prior to the Closing
Date where such returns occur within 30 days after the Closing
Date, and will similarly own the inventory associated with such
returns and (iii) Seller will collect payment for and recognize
revenue in respect of all products delivered to and held at a NSP
Vendor prior to the Closing Date and will be responsible for
completing delivery of such products from NSP Vendors to end-users.
The parties acknowledge and agree that (x) a portion of the
Transferred Organization Inventory shall be transferred from Seller
to GCC immediately prior to the Closing Date and (y) the
intracompany account payable from GCC to Seller that results from
such transfer shall be cancelled as of the Closing Date, with the
Note and other consideration payable to Seller pursuant to Article
4substituting therefor.
2
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(c)
Service and Replacement Parts
. Such of the service and replacement parts owned by
the Seller or the Transferred Subsidiaries as are set forth in or
otherwise described in Schedule1.01(c).
(d)
Owned Personal Property . Such of the Seller’s or the Transferred
Subsidiaries’ machinery, equipment, furniture, fixtures, work
stations, supplies, telephone handsets, and the other personal
property owned by Seller or one of the Transferred Subsidiaries and
used primarily in the operation of the Transferred Organization to
support the Transferred Organization Employees as is set forth in
or otherwise described in Schedule1.01(d), but in all cases
excluding (i) servers, switches, and other telephony equipment,
(ii) tooling and (iii) any computer programs or other software that
are not Assigned Software (together, the “
Transferred Organization Equipment
”).
(e)
Computer Software .
Subject to Section 14.04, such of the Seller’s or Transferred
Subsidiaries’ rights in computer programs and other software
as is set forth in or otherwise described in Schedule1.01(d),
including all machine readable code, printed listings of code,
documentation and related property and information, in each case to
the extent (and only to the extent) that Seller has the right to
effect the transfer of such computer programs and other software
but specifically excluding the programs referred to as Order
Capture 1.5, Order Capture 2.0 and Order Capture 2.4, (together,
the “ Assigned Software
”).
(f)
Tooling . Such of the
Seller’s tooling for products that are unique to the
Transferred Organization as is set forth in or otherwise described
in Schedule1.01(f), in each case to the extent (and only to the
extent) that Seller has the right to effect the transfer of such
tooling.
(g)
Books and Records .
Subject to Section 14.01, the Seller’s records, files,
invoices, customer lists, accounting records, business records,
operating data and other data that in each case relate exclusively
to the Transferred Organization (“ Books and Records ”).
(h)
Licenses and Permits .
Subject to obtaining all required third party consents and in each
case to the extent (and only to the extent) that Seller has the
right to effect the transfer thereof, such of the licenses,
permits, approvals, authorizations and certifications of Government
Entities held by Transferred Subsidiaries on the Closing Date as
are set forth on Schedule Section 14.01 (the “
Licenses and Permits ”).
(i)
Transferred Contracts .
The customer, sales and other agreements set forth on or described
in Schedule 1.01(i); provided
that until the date that is 30 days after the
Closing Date, Seller may update such list of contracts by adding
those additional contracts of Seller that meet the criteria set
forth in Schedule 1.01(i) (the “ Transferred Contracts ”).
3
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(j)
GCC Assets . All assets
of any type held by GCC on the Closing Date. For the avoidance of
doubt, Buyer shall acquire such assets through its acquisition of
the GCI Stock and not through any separate transfer of assets by
Seller or any of its Subsidiaries.
Section 1.02 . Excluded
Assets. Notwithstanding the provisions of
Section 1.01, the “Purchased Assets” shall not include,
and Seller shall not sell, transfer, assign, convey or deliver to
Buyer, any of the Excluded Assets. The “
Excluded Assets ”
means, as of the Closing Date:
(a)
Retained Business Assets . All assets used or held for use in Seller’s Retained
Business to the extent not specifically identified as a Purchased
Asset under Section 1.01.
(b)
Cash and Cash Equivalents . Cash and cash equivalents held by the Transferred
Organization or by Seller or any of its Subsidiaries, except for
cash and cash equivalents held by GCC on the Closing
Date.
(c)
Accounts Receivable .
Accounts receivable held by the Transferred Organization or by
Seller or any of its Subsidiaries other than GCC either (i) as of
the Closing Date or (ii) in respect of shipments from GCC, Quanta
or Arima that occurred prior to the Closing Date;
provided ,
however , that (x)
Seller will be responsible for all delivery refusals and will own
the inventory related to any such refusal when it comes back, (y)
Seller will be responsible for all returns for products sold prior
to the Closing Date, which returns occur within 30 days after the
Closing Date, and will similarly own the inventory associated with
such returns and (z) Seller will be responsible for products held
by any NSP Vendor on the Closing Date and will similarly recognize
revenue and collect associated accounts receivable for such
products when delivered from the NSP Vendor to the relevant
customers.
(d)
RPL Receivables .
Accounts receivable for replacement parts, regardless of whether
such accounts receivable are held by Seller, any of Seller’s
Subsidiaries or the Transferred Organization.
(e)
Customer Prepayments .
Prepayments by customers of the Transferred Organization,
regardless of the form of such prepayments or the manner in which
held by Seller and its Subsidiaries prior to the Closing Date (the
“ Customer Prepayments
”).
(f)
IML Inventory . All
inventory of Seller or any of its Subsidiaries held at Ingram
Micro’s Logistics facility in Memphis, Tennessee.
(g)
Information Technology and Software
. All information technology systems, equipment,
software, and related assets of Seller or any of its Subsidiaries
other than the Transferred Organization Equipment and the Assigned
Software.
4
(MP) 08481/006/APA/APA.doc
(h)
Microsoft COAs . All
software produced by Microsoft Corporation and certificates of
authenticity for such software constituting inventory of Seller.
For purposes of clarity, the Microsoft Corporation software and
certificates of authenticity with respect to computer equipment
constituting Transferred Organization Equipment is part of the
Purchased Assets to the extent (and only to the extent) that Seller
has the right to effect the transfer of such software and
certificates of authenticity.
(i)
Ordinary Course Sales .
Any assets sold or otherwise disposed of in the ordinary course of
business during the period from the date hereof until the Closing
Date.
(j)
Insurance Policies .
Insurance policies relating to the Transferred Organization and all
claims, credits, causes of action or rights thereunder.
(k)
Certain Books and Records . All books, records, files and papers, whether in hard copy or
computer format, prepared in connection with this Agreement or the
transactions contemplated hereby and all minute books and corporate
records of Seller and its Affiliates, other than the minute books
and corporate records of the Transferred Subsidiaries.
ARTICLE 2
ASSUMPTION OF
LIABILITIES
Section 2.01 . Liabilities
to be Assumed. Subject to the terms and
conditions of this Agreement, on the Closing Date, MPC and Buyer
shall assume and agree to pay, perform and discharge when due the
following, and only the following, Liabilities of Seller relating
to the Transferred Organization and/or the relevant Transferred
Subsidiary, whether arising before or after the Closing Date
(collectively, the “ Assumed
Liabilities ”):
(a)
Warranty Liabilities .
All warranty Liabilities of Seller or any of its Subsidiaries in
respect of customers whose customer identification numbers are (1)
set forth in Schedule 2.01(a), as delivered on the Effective Date,
(2) added to Schedule 2.01(a) in connection with an update of such
Schedule to add those customer identification numbers associated
with those customers of the “Professional Division”
covered by a “Lifetime Support” warranty, it being
understood that such update shall be delivered within five Business
Days after the Effective Date, (3) added to Schedule 2.01(a) in
connection with an update of such Schedule as of the Closing Date
as a result of sales to customers in the ordinary course of
business (“ Recent
Customers ”), it being understood
that such update may be delivered up to 14 days after the Closing
Date or (4) added to Schedule 2.01(a) after the Effective Date and
prior to the one-year anniversary of the Closing Date in accordance
with the provisions of this Section 2.01(a). The parties hereby
acknowledge and agree that:
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(i) Seller may
include on Schedule 2.01(a) the customer identification number of
any customer of Seller or any of its Subsidiaries other than an
Excluded Customer. For purposes of this Agreement, “
Excluded Customer ” shall mean any consumer customer who did not purchase a
Professional Product from Seller’s Professional Division or
its Consumer Direct Division prior to the Closing Date, as
determined in accordance with the methodology set forth in Schedule
2.01(a); and
(ii)
After the Effective Date and prior to the one-year
anniversary of the Closing Date, Seller may supplement Schedule
2.01(a) with additional customer identification numbers for
customers that are not Excluded Customers (each, an “
Additional Customer ”); provided
, however
, that the number of units held by Additional
Customers shall not exceed two percent (2%) of the total number of
units held by customers whose customer identification numbers were
included on Schedule 2.01(a) as delivered on the Effective Date
plus the total number of units held by Recent Customers included in
any supplement(s) to Schedule 2.01(a) delivered in connection with
an update of such Schedule as of the Closing Date (the
“ Unit Cap ”). For the avoidance of doubt, Recent Customers will not
be subject to or counted toward the Unit Cap, and only those
Additional Customers added to Schedule 2.01(a) that are not Recent
Customers shall be subject to the Unit Cap.
(b)
Contractual Liabilities . All Liabilities that accrue or are to be performed after the
Closing Date under and pursuant to the Transferred Contracts, but
not including any Liability of Seller for any breach thereof by
Seller, an Affiliate, or a predecessor-in-interest occurring before
the Closing Date.
(c)
Liabilities Related to Transferred
Employees . All Liabilities and
obligations associated with the Transferred Employees, except for
(i) the portion of performance-based bonuses and sales commissions
accrued by Seller as of the Closing Date for prior performance with
the Seller and (ii) any liability arising out of any employment or
compensation practice, violation of any employment laws, or any
tort or contract liability of the Transferred Organization and/or
any applicable Transferred Subsidiary occurring before the Closing
Date (the “ Employee-Related
Liabilities ”).
(d)
Tooling Liabilities .
All Liabilities related to the tooling equipment transferred to
Buyer pursuant to Section 1.01(f) arising or payable after the
Closing Date, in each case as determined in accordance with the
methodology set forth in Schedule 2.01(d).
(e)
Product Environmental Liabilities
. All Liabilities that arise on account of
Environmental Laws or Orders (“ Environmental Liabilities ”)
relating to ownership, possession, sale, or disposal of the
Products sold by the Transferred Organization and/or any applicable
Transferred Subsidiary during the six-year period beginning five
years prior to the Closing Date and ending one year
after
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the Closing Date (the “ Covered Period ”), but
excluding all Environmental Liabilities arising from ownership,
occupancy, or operation of Seller’s facilities prior to the
Closing Date. For purposes of this Agreement, to the extent that it
cannot be determined whether Product Environmental Liabilities
relate to Products sold during the Covered Period, MPC and Buyer
shall assume and be responsible for the portion of such Product
Environmental Liabilities equal to (i) the total amount of such
Product Environmental Liabilities, multiplied by (ii) the number of
units of Products sold during the Covered Period and divided by
(iii) the total installed base of all products sold by Seller and
its Affiliates using the Licensed Trade Rights, and Seller shall
retain and be responsible for the remainder of such Product
Environmental Liabilities. No Claim or other demand shall be
brought by Seller under this Section 2.01(e) after the six (6) year
anniversary of the Closing Date.
(f)
GCC Liabilities . All
Liabilities or obligations of GCC of any type on the Closing Date,
including, for the avoidance of doubt, accounts payable and taxes
arising or accruing before the Closing Date.
(g)
Liabilities Related to Customer
Prepayments . All Liabilities that accrue
or are to be performed after the Closing Date with respect to
Products or services that were the subject of Customer
Prepayments.
Section 2.02 . Liabilities
Not to be Assumed. Notwithstanding any
other provision of this Agreement, Buyer is assuming only the
Assumed Liabilities and is not assuming (a) any Liability of Seller
relating to the portion of Seller’s Consumer Direct Division
that is being retained by Seller or (a) any other liability or
obligation of Seller of whatever nature, whether presently in
existence or arising hereafter. All such other liabilities and
obligations of the Transferred Organization, GCI or GP, including,
but not limited to accounts payable and taxes arising or accruing
before the Closing Date, shall be retained by and remain
obligations and liabilities of Seller (all such liabilities and
obligations not being assumed being herein referred to as the
“ Excluded Liabilities
”).
Section 2.03 . Credit
Support for Warranty Liabilities.
(a) In furtherance of MPC’s and Buyer’s assumption of
the warranty Liabilities specified in Section 2.01(a), MPC
covenants that on or before the date that is 120 days after the
Closing Date it shall establish, and for three years thereafter it
shall keep available to Seller, a letter of credit (the
“ Letter of Credit
”) with a U.S. bank or federal savings and
loan institution having a combined capital surplus in excess of
$250,000,000, pursuant to which Seller shall have the right in the
event of a Warranty Default or a Warranty Quality Shortfall to draw
funds in accordance with this Section 2.03. The Letter of Credit
shall provide Seller with the right to draw (i) up to $3,000,000
during that period beginning on the date that is 120 days after the
Closing Date and ending two years after such date and (ii) up to
$2,000,000 thereafter.
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(b) In the event of a Warranty Default or a Warranty Quality
Shortfall, and only in such event, Seller shall have the right, in
its sole discretion, to draw funds from the Letter of Credit and to
provide quality warranty support to the customers of the
Transferred Organization and GCC that is equivalent to or better
than the warranty support provided to MPC customers as of the
Closing Date. For the avoidance of doubt, Seller shall only have
the right to draw funds from the Letter of Credit after providing
written notice to MPC of a failure to pay, perform and discharge
warranty Liabilities pursuant to Section 2.03(c) or a failure to
provide quality warranty support to the customers of the
Transferred Organization pursuant to Section 2.03(d) below. The
amount of funds that Seller shall be permitted to draw from the
Letter of Credit shall be (i) such funds as Seller reasonably deems
necessary to remedy the Warranty Default, in the case of a Warranty
Default and (ii) such funds as may be agreed between Seller and
Buyer or determined by arbitration, in the case of a Warranty
Quality Shortfall. In the event that Seller draws any funds from
the Letter of Credit, MPC shall promptly make such payments or take
such other actions as are necessary to restore the funds available
under the Letter of Credit to the levels specified in the last
sentence of Section 2.03(a) above.
(c) In the event that Seller believes that MPC and Buyer are
failing to pay, perform and discharge the warranty Liabilities
specified in Section 2.01(a), Seller shall have the right, in its
sole discretion, to provide MPC with written notice thereof, which
notice shall, to the extent reasonably practicable, specify the
customer or customers who have not been provided warranty service
and the nature of the alleged failure. MPC shall have until the
date that is three (3) Business Days from the date of such notice
(a “ Warranty Notice
Deadline ”) to respond to such
notice and/or cure the alleged failure. Immediately following any
Warranty Notice Deadline, a “ Warranty Default ” shall be
deemed to have occurred unless, prior to the Warranty Notice
Deadline, MPC has provided Seller with reasonable evidence that (i)
MPC has cured the alleged failure, (ii) if the alleged failure
cannot reasonably be cured before the Warranty Notice Deadline, MPC
has developed a plan to cure the alleged failure and is taking
reasonable steps to implement such plan, and Seller agrees to such
plan (which agreement shall not be unreasonably withheld by
Seller), (iii) the customer or customers in question are not within
warranty or (iv) the matter referred to in Seller’s notice
stems from customer-induced damage.
(d) In the event that Seller believes that MPC and Buyer are
failing to provide quality warranty support to the customers of the
Transferred Organization and GCC that is equivalent to or better
than the warranty support provided to Seller’s customers
immediately prior to the Closing Date, or if Seller disagrees with
any response provided by MPC pursuant to clauses (i) through (iv)
of Section 2.03(c) above (including any disagreement as to
reasonableness with respect to clause (ii)), Seller shall have the
right, in its sole discretion, to provide MPC with written notice
of its request to resolve such matter pursuant to the procedures of
this Section 2.03(d). Such notice shall, to the extent
reasonably
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practicable, specify the nature of MPC’s and
Buyer’s failure to provide quality warranty support or
Seller’s disagreement with MPC’s response under Section
2.03(c), as applicable. Upon delivery of such notice to MPC, the
chief operating officers (or officers with equivalent
responsibility) of Seller and MPC shall promptly meet, in person or
telephonically, and work in good faith to resolve the issues
specified in Seller’s notice. If the parties are unable to
agree on a resolution within 10 Business Days after the date of
Seller’s notice, the matter shall promptly be submitted to
binding arbitration in accordance with the procedures set forth in
Section 2.03(e). A “ Warranty
Quality Shortfall ” shall be deemed
to have occurred to the extent (i) determined by arbitration
pursuant to Section 2.03(e) or (ii) otherwise agreed between the
parties as part of a resolution of issues specified in a notice
provided by Seller pursuant to this Section 2.03(d).
(e) Any matter submitted to arbitration pursuant to Section 2.03(d)
shall be so submitted on an expedited basis solely to determine (i)
the question of whether MPC and Buyer are failing to provide
quality warranty support to the customers of the Transferred
Organization and GCC that is equivalent to or better than the
warranty support provided to Seller’s customers immediately
prior to the Closing Date, or MPC and Buyer are failing to pay,
perform and discharge the warranty Liabilities specified in Section
2.01(a), as applicable and (ii) the amount of funds Seller shall be
permitted to draw from the Letter of Credit to remedy the relevant
Warranty Quality Shortfall, if any. Upon the submission of a matter
to arbitration, Seller shall promptly appoint one arbitrator, MPC
shall promptly appoint one arbitrator, and the two arbitrators so
appointed shall select a third arbitrator. In the event such
arbitrators cannot agree upon a third arbitrator, a third
arbitrator shall be selected in accordance with the rules as then
in effect of the American Arbitration Association. The decision of
two of the three arbitrators so appointed as to the matters in
dispute shall be conclusive and binding upon the parties to this
Agreement and the parties to this Agreement shall act in accordance
with such decision. Any such arbitration shall be held in Denver,
Colorado under the rules to be mutually agreed upon by the
arbitrator selected by Seller and the arbitrator selected by the
MPC or, if no such agreement can be reached, under the rules as
then in effect of the American Arbitration Association. The fees,
costs and expenses of such arbitration shall be borne by MPC, in
the event that a Warranty Quality Shortfall is determined to have
occurred, or by Seller, in the event that a Warranty Quality
Shortfall is determined not to have occurred.
ARTICLE 3
EQUITY PURCHASE
Section 3.01 . Purchase and
Sale of GCI Stock. For the consideration,
and subject to the terms and conditions in this Agreement, Seller
shall sell, convey, transfer and deliver to Buyer, and Buyer shall
purchase from Seller, at the Closing, all of the GCI Stock and any
rights and benefits incident to the ownership thereof, free and
clear of any Liens.
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Section 3.02 . Purchase and
Sale of GP Membership Interest. For the
consideration, and subject to the terms and conditions in this
Agreement, Gateway Technologies shall sell, convey, transfer and
deliver to Buyer, and Buyer shall purchase from Gateway
Technologies, at the Closing, the 10% membership interest in GP
owned by Gateway Technologies and any rights and benefits incident
to the ownership thereof, free and clear of any Liens.
ARTICLE 4
PURCHASE PRICE
Section 4.01 . Purchase
Price. The consideration payable by Buyer
for the Purchased Assets and the Purchased Securities shall
be:
|
(a)
|
The assumption of the Assumed
Liabilities;
|
(b) A promissory note payable to Seller within six (6) months of
the Closing Date in the amount of (i) Net Inventory Minus
Liabilities (as defined in Section 4.02 below), as determined on
the Final Net Inventory/Liability Statement, plus (ii) the amount
paid by GCI to Quanta to purchase the Quanta GCC Interest, minus
(iii) the total amount of Customer Prepayments as of the Closing
Date in respect of which Buyer is assuming Liabilities to deliver
Products or perform services pursuant to Section 2.01(g), minus
(iv) twenty-one million eight hundred thousand dollars
($21,800,000), bearing interest at a rate of eight percent (8%),
repayable in equal bimonthly installments and on such other terms
as set forth in Exhibit A
(the “ Note ”). If the formula
contained in the first sentence of this Section 4.01(b) would
result in the Note having a negative principal amount, then there
shall be no Note, and Seller shall credit such negative amount
against Buyer’s obligations under the Transition Services
Agreement in accordance with the terms thereof; and
(c) The issuance by MPC to Seller of (i) that number of shares of
common stock of MPC equal to Nineteen and Nine-Tenths Percent
(19.9%) of the outstanding common stock of MPC as of the Closing
Date (the “ MPC Common
Shares ”) and (ii) the greater of
(x) that number of shares of Series B Preferred Stock of MPC that
would fully convert into Four Million (4,000,000) shares of MPC
common stock (following approval by MPC’s shareholders
permitting such conversion) and (y) that number of shares of Series
B Preferred Stock of MPC that, assuming the full conversion of such
shares into MPC common stock (and approval by MPC’s
shareholders permitting such conversion), would be equal to the
difference between (a) Nineteen and Nine-Tenths Percent (19.9%) of
the outstanding common stock of MPC as of the Closing Date on a
fully-diluted basis (excluding securities issued to MPC employees
under MPC’s current employee equity plans) and (b) the number
of shares of the MPC Common Shares referenced in clause (i) above
(the “ MPC Preferred
Shares ” and, together with the MPC
Common Shares, the “ MPC
Shares ”). The MPC Preferred
Shares
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shall have terms as set forth in the Amendment to
MPC’s Articles of Incorporation attached as
Exhibit B .
The “ Purchase
Price ” shall equal the sum of: (i)
the amount of Assumed Liabilities as reflected on the Final Net
Inventory/Liability Statement, (ii) the principal amount of the
Note, and (iii) the MPC Shares valued at the closing market price
of the MPC Shares one business day before the Closing Date;
provided that, for
avoidance of doubt, for purposes of the calculation of the Purchase
Price, each MPC Preferred Share shall be deemed equivalent in value
to the number of shares of MPC’s common stock into which such
MPC Preferred Share is or would be convertible, assuming the
approval by MPC’s shareholders of the issuance of all MPC
common stock underlying the MPC Preferred Shares.
Section 4.02 .
Determination of Net Inventory Minus Liabilities.
(i) The term
“ Net Inventory Minus
Liabilities ” shall mean the dollar
amount by which (x) the Transferred Organization Inventory on the
Closing Date (including, for the avoidance of doubt, any
Transferred Organization Inventory transferred from Seller to GCC
prior to the Closing Date) exceeds (y) the sum of the amount of the
Employee-Related Liabilities on the Closing Date (excluding
Employee-Related Liabilities in respect of accrued vacation or sick
pay) and the portion of the commissions and bonuses due to
Transferred Employees for which Seller is responsible but that the
parties have agreed shall be paid by Buyer (calculated as provided
in Sections 7.02(c) and 7.02(d)), each as calculated in accordance
with GAAP applied consistently with the accounting policies,
practices and procedures used by Seller prior to the Closing Date.
For the avoidance of doubt and disputes, the parties hereto agree
that (A) the accounting principles set forth in
Exhibit C are in
accordance with GAAP and (B) none of the parties hereto, their
respective accountants or any Independent Accountant shall have any
basis whatsoever to hereafter assert, conclude or determine that
the accounting principles set forth in Exhibit C are not in accordance with
GAAP applied consistently with the accounting policies, practices
and procedures used by Seller prior to the Closing Date. Buyer
acknowledges and agrees that it has reviewed the aspects of the
accounting policies, practices and procedures used by Seller prior
to the Closing Date that involve significant management estimates,
including, but not limited to, warranty liabilities and inventory
reserves, and that Buyer agrees with the methodologies used to
determine such management estimates.
(ii)
The term “ Estimated
Net Inventory Minus Liabilities ”
shall mean the Net Inventory Minus Liabilities, as reflected on the
Estimated Net Inventory/Liability Statement.
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(iii)
The term “ Final Net
Inventory Minus Liabilities ” shall
mean the Net Inventory Minus Liabilities, as reflected on the Final
Net Inventory/Liability Statement.
(iv)
The term “ Final Net
Inventory/Liability Statement ”
shall be (A) the Net Inventory/Liability Statement in the event
that (x) no Buyer’s Objection is delivered to Seller during
the 60-day period specified in Section 4.02(d) or (y) Seller and
Buyer so agree; (B) the Net Inventory/Liability Statement, adjusted
in accordance with Buyer’s Objection in the event that Seller
does not respond to Buyer’s Objection within the 15-day
period following receipt by Seller of Buyer’s Objection; or
(C) the Net Inventory/Liability Statement, as adjusted by either
(x) the agreement of Seller and Buyer or (y) Independent Accountant
pursuant to Section 4.02(d).
(b)
Estimated Net Inventory/Liability
Statement . For purposes of determining
the Estimated Net Inventory Minus Liabilities, two (2) days before
the Closing Date, Seller will prepare and deliver to Buyer a pro
forma estimated unaudited statement of the Net Inventory Minus
Liabilities as of the Closing Date (the “
Estimated Net Inventory/Liability
Statement ”) in accordance with
this Section 4.02. Prior to the date that is two days after the
delivery of the Estimated Net Inventory/Liability Statement, the
Buyer shall have the right to object to any determination of the
Estimated Net Inventory Minus Liabilities not made in accordance
with this Section 4.02 and Buyer and Seller shall use their
reasonable best efforts to resolve any such objections prior to
such date.
(c)
Net Inventory/Liability Statement
. Within thirty (30) days after the Closing Date,
Seller will prepare and deliver to Buyer an unaudited statement of
the Transferred Organization Inventory and Assumed Liabilities as
of the Closing Date (the “ Net
Inventory/Liability Statement ”),
prepared in accordance with this Section 4.02, together with all
work papers related thereto. In the event that such statement and
calculations are not delivered to Buyer within such thirty (30)
days, the Estimated Net Inventory/Liability Statement shall be
deemed to be the Net Inventory/Liability Statement.
(d)
Access to Information; Disputes Regarding Final
Net Inventory/Liability Statement .
Seller shall provide Buyer and Buyer’s representatives with
reasonable access to all information used by Seller in preparing
the Estimated Net Inventory/Liability Statement and Net
Inventory/Liability Statement. Buyer shall, within sixty (60) days
after delivery by Seller of the Net Inventory/Liability Statement,
complete its review of the Net Inventory Minus Liabilities derived
from the Net Inventory/Liability Statement. If Buyer determines
that the Net Inventory Minus Liabilities has not been determined in
accordance with this Section 4.02, then Buyer shall inform the
Seller on or before the last day of such 60-day period by
delivering a notice to the Seller (“ Buyer’s Objection ”)
setting forth a specific description, and providing supporting
calculations and detailed backup information of the basis of
Buyer’s
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Objection and Buyer’s proposed adjustments to
the Net Inventory Minus Liabilities that Buyer believes should be
made in accordance with Section 4.02. Seller and its
representatives, including if so desired by Seller, its independent
accounting firm, shall then have fifteen (15) days to review and
respond to Buyer’s Objection. Buyer and Seller shall seek in
good faith to resolve any differences that they may have with
respect to any matter specified in Buyer’s Objection. If
Buyer and Seller are unable to mutually resolve all of their
disagreements with respect to the determination of the foregoing
items within fifteen (15) days following Seller’s receipt of
Buyer’s Objection, then Buyer and Seller shall refer their
remaining differences to an independent accounting firm of
recognized standing that is mutually agreeable to Seller and Buyer
and that does not have any material relationship with Seller, Buyer
or MPC (the “ Independent
Accountant ”) who shall, acting as
experts and not as arbitrators, determine solely on the basis of
the standards set forth in this Section 4.02 and only with respect
to the remaining accounting-related differences so submitted by
Buyer to the Seller (and not by independent review), whether and to
what extent, if any, the Net Inventory Minus Liabilities requires
adjustment in order to be prepared in accordance with this Section
4.02. Buyer and Seller shall direct the Independent Accountant to
use the following resolution procedures. Buyer and Seller shall
further direct the Independent Accountant to use its reasonable
best efforts to render its determination within twenty (20) days of
complete submission; provided
that both Seller and Buyer agree to provide all
necessary or requested information to the Independent Accountant as
promptly as reasonably practicable. The determination of the
Independent Accountant shall be final, conclusive and binding upon
Seller and Buyer. The fees and disbursements of the Independent
Accountant shall be paid by the parties based upon the degree to
which the Independent Accountant accepts the respective positions
of the parties. Seller and Buyer shall make readily available to
the Independent Accountant all relevant books and records and any
work papers and audit programs (including those of Buyer’s
Accountants) and all other information and items reasonably
requested by the Independent Accountant.
(e)
Cooperation . Each of
Buyer and Seller agrees that, following the Closing Date, it will
not take any actions with respect to the accounting and financial
books, records, practices, policies and procedures of the
Transferred Organization or of Seller’s Retained Business
that would obstruct or prevent the determination of the Net
Inventory Minus Liabilities.
Section 4.03 . Allocation
of Purchase Price. As soon as practicable
after the determination of the Final Net Inventory/Liability
Statement, Seller will prepare and deliver to Buyer a statement
(the “ Allocation
Statement ”) reflecting (i) the
allocation of the Purchase Price among the Purchased Assets (other
than the assets of GCC) and the Purchased Securities and (ii) an
allocation of the ADSP (as such term is defined in Treasury
Regulations Section 1.338-4) for GCI among the assets of GCI
(including the GP Interest owned by GCI and the assets of GCC) in
accordance with the Treasury regulations promulgated under
Section
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338(h)(10). If within 10 days after the delivery of
the Allocation Statement Buyer notifies Seller in writing that
Buyer objects to the allocation set forth in the Allocation
Statement, Buyer and Seller shall use commercially reasonable
efforts to resolve such dispute within 20 days. In the event that
Buyer and Seller are unable to resolve such dispute within 20 days,
Buyer and Seller shall jointly retain the Independent Accountant to
resolve the disputed items. Upon resolution of the disputed items,
the allocation reflected on the Allocation Statement shall be
adjusted to reflect such resolution. The costs, fees and expenses
of the Independent Accountant pursuant to this Section 4.03 shall
be borne by Buyer. Buyer and Seller shall execute and file all Tax
Returns in a manner consistent with the allocation as set forth on
the Allocation Statement and shall not take any position before any
taxing authority or in any judicial proceeding that is inconsistent
with such allocation. As soon as practicable after the Closing,
Seller will file a form 8023 with the IRS. Buyer and Seller shall
each timely file a Form 8594 with the IRS in accordance with the
requirements of Section 1060 of the Internal Revenue Code of 1986,
as amended (the “ Code
”).
ARTICLE 5
REPRESENTATIONS AND
WARRANTIES OF
SELLER
Except as set forth in the Seller’s disclosure
schedules to this Agreement (the “ Seller Disclosure Schedules ”),
each of Seller and Gateway Technologies represents and warrants to
Buyer and MPC as of the date hereof and as of the Closing Date
that:
Section 5.01 . Corporate
Matters.
(a)
Organization . Seller
is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware. GCI is a
corporation duly organized, validly existing, and in good standing
under the laws of the State of Delaware. GCC is a limited liability
company duly organized, validly existing, and in good standing
under the laws of the State of Delaware. GP is a limited liability
company duly organized, validly existing, and in good standing
under the laws of the State of Delaware. Gateway Technologies is a
corporation duly organized, validly existing, and in good standing
under the laws of the State of Delaware.
(b)
Authorization; Validity . The execution and delivery of this Agreement and the
Ancillary Agreements as to which Seller and Gateway Technologies
are or will be a party and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of Seller, Gateway
Technologies, and the Transferred Subsidiaries. No other or further
corporate act or proceeding on the part of Seller Gateway
Technologies or the Transferred Subsidiaries is necessary to
authorize this Agreement or the Ancillary Agreements or the
consummation of the
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transactions contemplated hereby and thereby,
including, without limitation, any action by Seller’s
stockholders. This Agreement constitutes, and when executed and
delivered, the Ancillary Agreements will constitute, valid and
binding agreements of Seller and Gateway Technologies, enforceable
against Seller and Gateway Technologies in accordance with their
respective terms.
(c)
Corporate Power .
Seller and its Subsidiaries have all requisite corporate power and
authority to own, operate and lease the Purchased Assets, to carry
on the Transferred Organization as and where such is now being
conducted, to transfer the GCI Stock, to enter into this Agreement
and the Ancillary Agreements as to which they are or will be
parties, and to carry out the transactions contemplated hereby and
thereby except where failure to have such power and authority would
not have a Material Adverse Effect.
(d)
Foreign Qualification .
Each of GCI, GCC, and GP is duly licensed or qualified to do
business as a foreign company, and is in good standing, in each
jurisdiction where such qualification is necessary, except where
the failure to be so qualified, individually or in the aggregate,
would not have a Material Adverse Effect.
Section 5.02 . Ownership of
GCI . Seller owns all of the issued and
outstanding shares of common stock of GCI free and clear of any
Liens. GCI has no authorized preferred stock or other classes of
capital stock. Seller has provided copies of all organizational
documents with respect to GCI. There are no subscriptions, options,
warrants, conversion privileges, or other rights or agreements with
respect to the issuance thereof, presently outstanding to purchase
any of the capital stock of GCI. The shares of GCI Stock are: (i)
not subject to any preemptive rights or rights of first refusal and
(ii) duly and validly authorized, issued and outstanding, fully
paid, and nonassessable. Seller has not subjected the GCI Stock to
any proxies, voting agreements, or other restrictions on the
incidents of ownership thereof.
Section 5.03 . Ownership of
GCC. GCI owns a sixty percent (60%)
interest in GCC, free and clear of any Liens. On or prior to the
Closing Date, GCI will hold a one hundred percent (100%) interest
in GCC, free and clear of any Liens. Seller has provided copies of
all organizational, joint venture, and other agreements between
Seller, GCI and Quanta with respect to GCC. There are no
subscriptions, options, warrants, conversion privileges, or other
rights or agreements with respect to the issuance thereof,
presently outstanding to purchase any ownership interest of GCC.
The ownership interests in GCC are not subject to any preemptive
rights or rights of first refusal. Neither Seller nor GCI have
subjected the GCC Interest to any proxies, voting agreements, or
other restrictions on the incidents of ownership
thereof.
Section 5.04 . Ownership of
GP. GCI owns a 90% interest in GP and
Gateway Technologies owns the remaining 10% interest in GP, in each
case free and clear of any Liens. Seller has provided copies of all
organizational
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documents with respect to GP. There are no
subscriptions, options, warrants, conversion privileges, or other
rights or agreements with respect to the issuance thereof,
presently outstanding to purchase any ownership interest of GP. The
ownership interest in GP is not subject to any preemptive rights or
rights of first refusal. Neither Seller nor GCI have subjected the
GP Interest to any proxies, voting agreements, or other
restrictions on the incidents of ownership thereof.
Section 5.05 . No
Violation. Neither the execution and
delivery of this Agreement or the Ancillary Agreements as to which
it is or will be a party, nor the consummation by Seller and its
Subsidiaries of the transactions contemplated hereby and thereby,
(a) will violate any Applicable Law or Order, (b) except for any
action or notice required under any federal, state or local
“plant closing” or similar Law or antitrust approval
that may be required under the HSR Act, will require any
authorization, consent, approval, exemption or other action by or
notice to any Government Entity, or (c) violate or conflict with,
or constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under any term or
provision of the articles of incorporation, by laws, or other
organizational documents of Seller, Gateway Technologies or any of
the Transferred Subsidiaries or (d) violate or conflict with, or
constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or will result in
the termination of, or accelerate the performance required by, or
result in the creation of any Lien upon any of the Purchased Assets
(other than the Transferred Contracts), Subsidiary Assets (other
than the Transferred Contracts), GCI Stock, GCC Interest, or GP
Interest, except the case of clauses (a), (b) and (d) above for
such violations, authorizations, consents, conflicts, defaults,
terminations, accelerations or Liens which would not have a
Material Adverse Effect.
Section 5.06 . Financial
Statements.
(a) As used in this Agreement, “ Financial Statements ” shall
mean (i) the audited balance sheets of the Transferred Organization
combined with GCC as of December 31, 2006 and 2005, (ii) the
audited statements of operations of the Transferred Organization
combined with GCC for each of the years ended December 31, 2006,
2005 and 2004, (iii) the unaudited balance sheets of the combined
Transferred Organization combined with GCC as of September 30, 2007
and (iv) the unaudited statements of operations of the Transferred
Organization combined with GCC for the nine months ended September
30, 2007; provided , that for the avoidance of doubt, the parties acknowledge and
agree that the Financial Statements do not reflect any assets,
liabilities or operations of GCC prior to the date of its formation
in June 2006.
(b) The Financial Statements, when provided to MPC by Seller in
accordance with Section 8.06 hereof, will have been prepared on a
consistent basis from the books and records of Seller, GCI, GCC,
and GP in accordance with GAAP (other than as specified in the
notes thereto and, in the case of the unaudited interim financial
statements of the Transferred Organization combined
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with GCC as of and for the nine months ended
September 30, 2007, subject to normal and recurring year-end
adjustments), and fairly present in all material respects the
assets, liabilities and financial position and the results of
operations of the Transferred Organization combined with GCC as of
the dates and for the years and periods indicated. The Financial
Statements do not (i) contain any material items of special or
non-recurring income or other income not earned in the ordinary
course of business or (ii) reflect the operations of any entity or
business other than the Transferred Organization and
GCC.
(c) For the avoidance of doubt and disputes, the parties hereto
agree that (A) the accounting principles set forth in
Exhibit C are in
accordance with GAAP and (B) none of the parties hereto, their
respective accountants or any Independent Accountant shall have any
basis whatsoever to hereafter assert, conclude or determine that
the accounting principles set forth in Exhibit C are not in accordance with
GAAP applied consistently with the accounting policies, practices
and procedures used by Seller prior to the Closing Date. Buyer
acknowledges and agrees that it has reviewed the aspects of the
accounting policies, practices and procedures used by Seller prior
to the Closing Date that involve significant management estimates,
including, but not limited to, warranty liabilities and inventory
reserves, and that Buyer agrees with the methodologies used to
determine such management estimates.
Section 5.07 .
Inventory. The Transferred Organization
Inventory (as of the relevant date) will be reflected on the
Estimated Net Inventory/Liability Statement and the Final Net
Inventory/Liability Statement. All Transferred Organization
Inventory (collectively, “ Inventory ”) is of a quantity
and quality that is usable and saleable in the ordinary course of
business. Except as set forth on Schedule 5.07, as of the Closing
Date, all Inventory is located on Seller or Transferred Subsidiary
premises and will not be the subject of any counterclaim, or a
claim for a charge back, deduction, credit, set off or other
offset, or any claim of a party-in-possession, such as a claim for
a Lien or other restriction.
Section 5.08 . Absence of
Certain Changes. Except as and to the
extent set forth on Schedule 5.08, and other than as a result of
events or circumstances which, individually or in the aggregate,
will not have a Material Adverse Effect, since the date of the
Recent Financial Statements, the Transferred Organization and the
affairs of the Transferred Subsidiaries have been conducted only in
the ordinary course of business consistent in all material respects
with past practice, except that Seller has significantly reduced
its marketing commitments for the Transferred Organization, and
there has not been:
(a)
No Material Adverse Effect . One or more events, occurrences or changes in circumstances
that have had or would have, individually or in the aggregate, a
Material Adverse Effect;
(b)
No Increase in Compensation
. Any increase in the compensation, salaries or
wages payable or to become payable to any Transferred
Organization
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Employee (including, without limitation, any
increase or change pursuant to any Employee Plan/Agreement), in the
case of this Section 5.08(b) as measured against the compensation,
salary and wage of the Transferred Organization Employees as of the
date of this Agreement and, for the avoidance of doubt, not as
against the Recent Financial Statements; provided , however , that MPC’s and
Buyer’s consent to any such increase shall not be
unreasonably withheld;
(c)
No Liens . Any Lien
made on any of the Purchased Assets, Subsidiary Assets, the GCI
Stock, GCC Interest, or GP Interest;
(d)
No Material Amendment of Transferred
Contracts. Any entering into, material
amendment or termination by Seller or any of the Transferred
Subsidiaries of any Transferred Contract, or any waiver of material
rights thereunder, other than in the ordinary course of
business;
(e)
No Change in Accounting Practices
. Any material change in the manner of conducting
the Transferred Organization, or the business of the Transferred
Subsidiaries, or change in a method of accounting or accounting
practices, except in each case as may be required by Applicable Law
or changes in GAAP;
(f)
No Loss of Assets . No
assets or properties of the Seller used in the Transferred
Organization or Subsidiary Assets that are, individually or in the
aggregate, material have been destroyed, damaged or otherwise lost
(whether or not covered by insurance); and
(g)
No Commitments . Any
commitment (contingent or otherwise) by the Seller or any of its
Subsidiaries to do any of the foregoing;
(h)
No Distributions. Any
declaration of dividend or distribution upon or with respect to any
equity interest by GCC;
(i)
No Disposition of Assets. Any sale, transfer or disposal of, or agreement to sell,
transfer or dispose of, any Purchased Asset held by GCC other than
a sale, transfer or disposal in the ordinary course of
business.
Section 5.09 . No
Litigation. There is no Litigation
pending or, to Seller’s Knowledge, threatened against Seller,
the Transferred Subsidiaries, the Transferred Organization or any
of the Purchased Assets or Subsidiary Assets, which would result in
a Material Adverse Effect. Neither Seller, Subsidiaries, the
Transferred Organization nor the Purchased Assets or Subsidiary
Assets is subject to any Order, which would result in a Material
Adverse Effect.
Section 5.10 . Compliance
With Laws and Orders.
(a)
Compliance . To
Seller’s Knowledge, Seller and Subsidiaries are, and since
January 1, 2005 have been, in compliance with all Laws and all
Orders
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of any Government Entities in the operation of the
Transferred Organization, except for instances of noncompliance
which would not, individually or in the aggregate, have a Material
Adverse Effect. To the Seller’s Knowledge, Seller and
Subsidiaries have not, within the past five (5) years, received
written notice of any violation or alleged violation of, and, is
subject to no Liability for, past or continuing violations of any
Laws or Orders regarding the operation of the Transferred
Organization which would have a Material Adverse Effect.
(b)
Licenses and Permits .
To Seller’s Knowledge, Seller and Subsidiaries have all
Licenses and Permits required for the current conduct of the
Transferred Organization and the business of the Subsidiaries, and
current operation of the Leased Facility, except for such failures
to obtain such Licenses and Permits which would not, individually
or in the aggregate, have a Material Adverse Effect. All Licenses
and Permits are in full force and effect, except for instances
which would not, individually or in the aggregate, have a Material
Adverse Effect. Seller and Subsidiaries are and have been in
compliance with all such Licenses and Permits, except for instances
of noncompliance which would not, individually or in the aggregate,
have a Material Adverse Effect.
(c)
Environmental Matters .
The applicable Laws relating to public health and safety, worker
health and safety, pollution or protection of the environment,
including but not limited to Laws relating to emissions,
discharges, generation, storage, releases or threatened releases of
pollutants, contaminants, chemicals or industrial, toxic, hazardous
or petroleum or petroleum-based substances or wastes, pesticides,
asbestos, noise or radiation (“ Waste ”) into the environment
or otherwise relating to the presence, manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of Waste including, without limitation, the Clean Water
Act, the Clean Air Act, the Resource Conservation and Recovery Act,
the Toxic Substances Control Act and the Comprehensive
Environmental Response Compensation Liability Act, as amended
(“ CERCLA ”), and their state and local counterparts are herein
collectively referred to as the “ Environmental Laws. ” To
Seller’s Knowledge, Seller and Subsidiaries have obtained any
required permit, license, and other authorization and have complied
and are in compliance with all Environmental Laws, except for
instances of noncompliance which would not, individually or in the
aggregate, have a Material Adverse Effect. There is no Litigation
nor any demand, claim, hearing or notice of violation pending or,
to the Seller’s Knowledge, threatened against Seller or the
Transferred Organization or any facility used in connection
therewith, or Subsidiaries relating to the Environmental Laws or
any Order issued, entered, promulgated or approved thereunder. To
Seller’s Knowledge, no materials or equipment containing
polychlorinated biphenyls or asbestos containing material in any
form or condition exist at any property or facility owned or
operated by Seller or Subsidiaries. Neither Seller nor any of its
predecessors or Affiliates has treated, stored, disposed of,
arranged for or permitted the disposal of, transported, handled, or
released any substance, including without limitation, any hazardous
substances,
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or owned or operated any property or facility, in a
manner that has given or would give rise to obligations or
liabilities, including without limitation, any obligation or
liability for response costs, correction action costs, personal
injury, property damage, natural resources damages or attorney fees
pursuant to any Environmental Law.
Section 5.11 . Title to
Purchased Assets.
(a) Seller, Gateway Technologies and/or the applicable Transferred
Subsidiary has good and marketable title to all of the Purchased
Assets (including the Subsidiary Assets, as applicable, free and
clear of all Liens, except for Liens of which Seller does not have
knowledge and that, individually or in the aggregate, would not
have a Material Adverse Effect. At Closing, Buyer will receive good
and marketable title to all the Purchased Assets, free and clear of
all Liens, except for Liens of which Seller does not have Knowledge
and that, individually or in the aggregate, would not have a
Material Adverse Effect.
(b) With respect to each of the properties and assets that are
leased by any of the Transferred Subsidiaries, the relevant
Transferred Subsidiary is in compliance with such lease and holds a
valid leasehold interest in such property or asset free of any
Liens except for those Liens of which Seller does not have
Knowledge and that, individually or in the aggregate, would not
have a Material Adverse Effect.
Section 5.12 . Transferred
Contracts and Commitments. To
Seller’s Knowledge, neither Seller nor any of its
Subsidiaries is in default under any Transferred Contract, nor has
any event or omission occurred which through the passage of time or
the giving of notice, or both, would constitute a default
thereunder or cause the acceleration of any of Seller’s
obligations or result in the creation of any Lien on any of the
Purchased Assets or Subsidiary Assets, except for defaults or
potential defaults that would not have a Material Adverse Effect.
To Seller’s Knowledge, no third party is in default under any
Transferred Contract, nor has any event or omission occurred which,
through the passage of time or the giving of notice, or both, would
constitute a default thereunder, except for defaults or potential
defaults which would not have a Material Adverse Effect. Except as
set forth on Schedule 5.12, none of the Transferred Contracts
include:
(a) Any loan or advance to or investment in, any Person, or any
agreement, contract or commitment relating to the making of any
such loan, advance or investment or any agreement, contract or
commitment involving a sharing of profits;
(b) Any guarantee or other contingent liability in respect of any
indebtedness or obligation of any Person other than a Transferred
Subsidiary;
(c) Other than the Seller’s Warranty Policies, any agreement,
contract or commitment requiring Seller to indemnify or hold
harmless any person, other
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than purchase orders, standard supplier
arrangements, and revenue earning contracts, entered into in the
ordinary course of business; or
(d) Any amendment, modification or supplement in respect of any of
the foregoing.
Seller has (i) furnished to Buyer complete and
accurate copies of the twenty-five (25) largest Transferred
Contracts that are customer contracts, as measured by historical
revenue and (ii) provided Buyer with the opportunity to request and
review copies of all other Transferred Contracts. On or prior to
the Closing Date, Seller shall deliver to Buyer a written inventory
of all of the Transferred Contracts, and will deliver copies of all
such contracts within fifteen (15) days after the Closing
Date; provided that the foregoing requirement shall not apply to Transferred
Contracts identified by Seller after the Closing Date in accordance
with Section 1.01(i), which contracts shall be delivered to Buyer
no later than the date that is 120 days after the Closing
Date.
Section 5.13 . Labor
Matters. On or prior to the date that is
five days before the Closing Date, Seller will have provided, to
the extent permitted by Law, a complete and accurate list of the
position, location of employment, U.S. visa status if applicable,
hire date, and current annual rates of salary and variable pay of
each of the Transferred Organization Employees as well as a list of
all existing employment or consulting contracts which constitute
contractual obligations of Seller and its Subsidiaries and a list
of which such Transferred Organization Employees are on long term
disability leave, extended unpaid absence or receiving benefits
pursuant to workers’ compensation legislation (the
“ Transferred Organization Employees
List ”), in each case as of a date
that is no more than seven days before the Closing Date;
provided ,
however , that in the
event that the parties do not have at least seven days’ prior
notice of the Closing Date pursuant to Article 12 hereof, such
lists shall be delivered as promptly as reasonably practicable. All
current assessments under workers’ compensation legislation
in relation to the Transferred Organization have been paid or
accrued and Seller and the Subsidiaries have not been subject to
any material special or penalty assessment with respect to the
Transferred Organization under such legislation which has not been
paid. Seller and Subsidiaries are not parties to any collective
bargaining agreements with any unions, guilds, shop committees or
other collective bargaining groups with respect to the Transferred
Organization Employees. With respect to the Transferred
Organization Employees, (i) Seller and Subsidiaries have not
experienced any labor disputes, union organization attempts or any
work stoppage due to labor disagreements in connection with the
Transferred Organization in the last two years, in each case that
are material and (ii) there is no material unfair labor practice
charge or complaint against Seller or Subsidiaries pending or, to
Seller’s Knowledge, threatened.
Section 5.14 .
Employee Benefit Plans. Schedule 5.14 sets forth all material pension, thrift, savings,
profit sharing, retirement, incentive bonus or other bonus,
medical, dental, life, accident insurance, benefit, employee
welfare,
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disability, group insurance, stock purchase, stock
option, stock appreciation, stock bonus, executive or deferred
compensation, hospitalization and other similar fringe or employee
benefit plans, programs and arrangements, and any material
employment agreements, retention agreements, consulting contracts,
“golden parachutes,” collective bargaining agreements,
severance agreements or plans, vacation and sick leave plans,
programs, arrangements and policies, including, without limitation,
all material “employee benefit plans” (as defined in
Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended (“ ERISA
”)) which are provided to, for the benefit of,
or relate to, any Transferred Organization Employees. The items
described in the foregoing sentence are hereinafter sometimes
referred to collectively as “ Employee Plans/Agreements, ”
and each individually as an “ Employee Plan/Agreement. ” Each
Employee Plan/Agreement has been administered in accordance with
its terms and complies in all material respects with and has been
administered in compliance with the provisions of all Applicable
Laws, except for failures that would not, individually or in the
aggregate, have a Material Adverse Effect. No material improvements
to any Employee Plan/Agreement have been promised, and no
improvements or amendments to any Employee Plan/Agreement will be
made or promised prior to the Closing Date, except as required by
Applicable Law. Except as set forth on Schedule 5.14, there is no
pending or, to Seller’s Knowledge, threatened Litigation
against or involving any such Employee Plan/Agreement (other than
routine claims for benefits). Other than the 401k Plan or as
required by Applicable Law, none of the Employee Plans/Agreements
provides benefits to retired employees or consultants or the
beneficiaries or dependents of retired employees or consultants of
the Seller. True and correct copies of all the Employee
Plans/Agreements have heretofore been provided to Buyer.
Section 5.15 . Warranties;
Product Liability. Seller has provided or
made available to Buyer written copies of the material warranty
policies and practices (“ Warranty
Policies ”) currently in force and
made by Seller or any of its Subsidiaries covering or relating to
Products and for any services furnished or rendered by the
Transferred Organization (“ Transferred Organization’s Products or
Services ”). To Seller’s
Knowledge, there are not (a) any Liabilities of Seller or any of
the Transferred Subsidiaries asserted and arising out of or based
upon incidents occurring on or before the date hereof with respect
to any product or service Liability or any similar Claim that
relates to any of Transferred Organization’s Products or
Services which would, individually or in the aggregate, have a
Material Adverse Effect (subject to the reserve for warranty
liabilities set forth on the Recent Financial Statements), or (a)
any Liabilities of Seller or Subsidiaries which would, individually
or in the aggregate, have a Material Adverse Effect (subject to the
reserve for warranty liabilities set forth on the Recent Financial
Statements) asserted and arising out of or based upon incidents
occurring on or before the date hereof with respect to any Claim
for the breach of any express or implied Warranty Policy, or any
similar Claim that relates to any of Transferred
Organization’s Products or Services, and Seller has no
Knowledge of any material defect or deficiency in any of
Transferred Organization’s Products
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or Services which could give rise to any such
Liabilities or Claims which would have a Material Adverse Effect
(subject to the reserve for warranty liabilities set forth on the
Recent Financial Statements).
Section 5.16 . Licensed Trade Rights.
Seller owns or licenses the Licensed Trade Rights
and has the necessary rights to fulfill its obligations and grant
all licenses and rights granted under this Agreement and the
License Agreement. Seller has not previously granted any rights in
the Licensed Trade Rights to any third party that are inconsistent
with the rights granted herein to Buyer. Seller has taken those
actions that it believed were necessary or appropriate to maintain
and protect the Licensed Trade Rights. Seller acquired all of its
rights to the Licensed Trade Rights through the efforts of its own
employees, agents and/or independent contractors or through
contractual arrangements with third parties. Seller has provided or
made available to Buyer true and correct copies of all agreements,
licenses, or sublicenses, that are part of the Licensed Trade
Rights not owned by Seller. There is no Litigation or Claim pending
or, to Seller’s Knowledge, threatened, asserting the
invalidity, misuse, or unenforceability of any of the Licensed
Trade Rights, and Seller has no Knowledge of any reasonable grounds
for any such claims.
Section 5.17 . Tax
Matters. Except as set forth on Schedule
5.17:
(a) Neither the Purchased Assets, the Subsidiary Assets, the
Transferred Organization nor the Transferred Subsidiaries are
encumbered by any Liens arising out of any unpaid taxes and, to
Seller’s Knowledge, there are no grounds for the assertion or
assessment of any material Liens against the Purchased Assets, the
Subsidiary Assets, the Transferred Organization or the Transferred
Subsidiaries in respect of any taxes.
(b) Seller or Subsidiaries have paid all material taxes required to
be paid with respect to the Purchased Assets, the Subsidiary
Assets, the Transferred Organization or the Transferred
Subsidiaries.
(c) No written claim has been made since January 1, 2005 or, to
Seller’s Knowledge, made on or prior to January 1, 2005 or,
to Seller’s Knowledge, threatened by a Government Entity in a
jurisdiction where Seller or Subsidiaries do not file Tax Returns
that the Transferred Organization or Transferred Subsidiaries are
or may be subject to taxes by that jurisdiction.
(d) Subject to any applicable reserves reflected in the applicable
Net Inventory/Liability Statement, no Litigation or Order is
pending or, to Seller’s Knowledge, threatened, by any
Government Entity for any audit, examination, deficiency,
assessment or collection from Seller or Subsidiaries of any taxes
related to the Transferred Organization or Transferred
Subsidiaries, no unresolved written claim for any deficiency,
assessment or collection of any taxes related to the Transferred
Organization or Transferred Subsidiaries has been
asserted
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against Seller, and all resolved claims for
assessments of taxes related to the Transferred Organization or
Transferred Subsidiaries have been paid.
(e) To Seller’s Knowledge, no issues have been raised by the
relevant taxing authorities on audit that are of a recurring nature
and that would have a material effect upon the taxes of the
Transferred Organization or Transferred Subsidiaries.
(f)
The provisions for taxes in the Recent Financial
Statements are sufficient for the payment of all material accrued
and unpaid federal, state, county, and local taxes, whether or not
assessed or disputed as of the date of the Recent Financial
Statements.
(g) The Transferred Subsidiaries are not parties to any tax sharing
agreements.
Section 5.18 . Restrictive
Documents and Territorial Restrictions. Except for restrictions contained in this Agreement, the
Transferred Organization is not subject to, or a party to, any
charter, by-law, mortgage, Liens, lease, license, permit,
agreement, instrument, Law, judgment or decree, or any other
restriction of any kind or character, limiting the ability of the
Transferred Organization to compete in any geographic area or with
any Person.
Section 5.19 .
Relationships. To Seller’s
Knowledge, there are no outstanding disputes with any suppliers,
customers, resellers or partners of the Transferred Organization,
other than disputes that would not, individually or in the
aggregate, have a Material Adverse Effect. Except as would not,
individually or in the aggregate, have a Material Adverse Effect,
no customer or reseller of the Transferred Organization has refused
to do business with Seller or Subsidiaries.
Section 5.20 . Related
Party Transactions. To Seller’s
Knowledge, no officer or director of any of the Transferred
Subsidiaries or any Affiliate of any such Person, has, either
directly or indirectly, a material interest in: (i) any Person that
purchases from or sells, licenses, or supplies to the Transferred
Organization any goods, property, technology, intellectual
property, or other property rights or services, or (ii) any
contract or agreement to which any of the Transferred Subsidiaries
is a party or by which it may be bound or affected.
Section 5.21 . No
Insolvency. No insolvency proceeding of
any character, including without limitation, bankruptcy,
receivership, reorganization, composition or arrangement with
creditors, voluntary or involuntary, affecting the Transferred
Organization, the Subsidiaries, or any of the Purchased Assets or
Subsidiary Assets, is pending or threatened. Neither Seller nor
Subsidiaries have taken any action in contemplation of, or that
would constitute the basis for, the initiation of any such
insolvency proceedings.
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Section 5.22 . Brokers or
Finders. Seller has not retained,
employed or used any broker or finder in connection with the
transactions provided for herein or the negotiation
hereof.
Section 5.23 . Private
Placement. The offer, sale and issuance
of the Purchased Securities constitutes a transaction exempt from
the registration requirements of Section 5 of the 1933 Act. Neither
Seller nor any agent on its behalf has solicited or will solicit
any offers to sell or has offered to sell or will offer to sell all
or any part of the Purchased Securities to any Person or Persons so
as to bring the sale of such Purchased Securities by Seller within
the registration provisions of the 1933 Act or any state securities
laws.
Section 5.24 . Purchase for
Investment. Seller is purchasing the MPC
Shares for investment for its own account and not with a view to,
or for sale in connection with, any distribution thereof. Seller
(either alone or together with its advisors) has sufficient
knowledge and experience in financial and business matters so as to
be capable of evaluating the merits and risks of its investment in
the MPC Shares and is capable of bearing the economic risks of such
investment.
Section 5.25 . Inspections;
No Other Representations. Seller is an
informed and sophisticated purchaser, and has engaged expert
advisors, experienced in the evaluation and purchase of securities
such as the MPC Shares as contemplated hereunder. Seller has
undertaken such investigation and has been provided with and has
evaluated such documents and information as it has deemed necessary
to enable it to make an informed and intelligent decision with
respect to the purchase of the MPC Shares as contemplated
hereunder. Seller acknowledges and agrees that it is acquiring the
MPC Shares without reliance upon any express or implied warranties
of any nature made by or on behalf of or imputed to Buyer, except
as expressly set forth in this Agreement. Without limiting the
generality of the foregoing, Seller acknowledges that Buyer makes
no representation or warranty with respect to (i) any projections,
estimates or budgets delivered to or made available to Seller of
future revenues, future results of operations (or any component
thereof), future cash flows or future financial condition (or any
component thereof) of MPC or (ii) any other information or
documents made available to Seller or its counsel, accountants or
advisors with respect to MPC, except as expressly set forth in this
Agreement.
Section 5.26. SEC Filings
and the Sarbanes-Oxley Act . Seller has
delivered or made available (including through the SEC’s
EDGAR system) to Buyer (i) its annual report on Form 10-K for its
fiscal year ended December 31, 2006 (the “
Seller 10-K ”),
its quarterly reports on Form 10-Q for its fiscal quarters ended
March 31, 2007 and June 30, 2007, (ii) its proxy statement and
additional definitive proxy soliciting materials relating to
Seller’s 2007 annual meeting of stockholders and (iii) all of
its other reports, statements, schedules and registration
statements filed with the SEC since December 31, 2006 (the
documents referred to in this Section 6.06 collectively, the
“ Seller SEC Filings
”).
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(a) As of its filing date, each Seller SEC Filing complied as to
form in all material respects with the applicable requirements of
the Securities Act of 1933, as amended (the “
1933 Act ”), and
the Securities Exchange Act of 1934, as amended (the “
1934 Act ”), as
the case may be.
(b) As of its filing date, each Seller SEC Filing filed pursuant to
the 1934 Act did not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances
under which they were made, not misleading.
(c) Each Seller SEC Filing that is a registration statement, as
amended or supplemented, if applicable, filed pursuant to the 1933
Act, as of the date such registration statement or amendment became
effective, did not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
(d) Seller has established and maintains disclosure controls and
procedures (as defined in Rule 13a-15 under the 1934 Act). Except
as disclosed in the Seller SEC Filings, such disclosure controls
and procedures are designed to ensure that material information
relating to Seller, including its consolidated Subsidiaries, is
made known to Seller’s principal executive officer and its
principal financial officer by others within those entities,
particularly during the periods in which the periodic reports
required under the 1934 Act are being prepared. Except as disclosed
in the Seller SEC Filings, such disclosure controls and procedures
are effective in timely alerting Seller’s principal executive
officer and principal financial officer to material information
required to be included in Seller’s periodic reports required
under the 1934 Act.
(e) Seller has established and maintained a system of internal
control over financial reporting (as defined in Rule 13a-15 under
the 1934 Act) (“ Internal
Controls ”). Except as disclosed in
the Seller SEC Filings, such Internal Controls are sufficient to
provide reasonable assurance regarding the reliability of
Seller’s financial reporting and the preparation of Seller
financial statements for external purposes in accordance with GAAP.
Seller has disclosed, based on its most recent evaluation of
Internal Controls prior to the date hereof, to Seller’s
auditors and audit committee (x) any significant deficiencies and
material weaknesses in the design or operation of Internal Controls
which are reasonably likely to adversely affect Seller’s
ability to record, process, summarize and report financial
information and (y) any fraud, whether or not material, that
involves management or other employees who have a significant role
in Internal Controls.
ARTICLE 6
REPRESENTATIONS AND
WARRANTIES OF BUYER
AND MPC
Except as set forth in Buyer and MPC’s
disclosure schedules to this Agreement (the “
Buyer Disclosure Schedules ”), each of Buyer and MPC
26
(MP) 08481/006/APA/APA.doc
represents and warrants to Seller, as of the date
hereof and as of the Closing Date that:
Section 6.01 . Corporate
Matters.
(a)
Organization . MPC is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Colorado. Buyer is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware.
(b)
Company Power . Each of
Buyer and MPC has all requisite corporate power to enter into this
Agreement and the Ancillary Agreements to which it is a party and
to carry out the transactions contemplated hereby and
thereby.
(c)
Foreign Qualifications . Each of Buyer and MPC is duly licensed or qualified to do
business as a foreign company, and is in good standing, in each
jurisdiction where such qualification is necessary, except where
the failure to be so qualified, individually or in the aggregate,
would not have a material adverse effect.
Section 6.02 . Authority of
MPC and Buyer. The execution and delivery
of this Agreement and the Ancillary Agreements to which MPC and
Buyer are a party and the consummation of the transactions
contemplated hereby and thereby have been dul