Exhibit 10.1
ASSET
PURCHASE AGREEMENT
by and between
ENRANGE LLC
W. CHRISTOPHER DULIN
WILLIAM GIBSON
DAVID ASHBURN
and
MAGNETEK, INC.
dated as of
February 4, 2008
TABLE
OF CONTENTS
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Article 1
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DEFINITIONS
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1
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1.1
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Definitions
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1
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1.2
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Terms Defined
in Agreement
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7
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Article
2
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SALE AND
PURCHASE OF ASSETS
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9
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2.1
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Sale and
Purchase of Assets
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9
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2.2
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Excluded
Assets
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10
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2.3
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Liabilities
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10
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2.4
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Purchase
Price
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12
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2.5
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Net Working
Capital Adjustment
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13
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2.6
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Closing
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14
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2.7
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Closing
Deliveries by Seller
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14
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2.8
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Closing
Deliveries by Buyer
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15
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2.9
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Payoff of
Creditors
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15
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Article
3
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REPRESENTATIONS AND WARRANTIES OF SELLER AND
SELLER MEMBERS
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16
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3.1
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Organization
and Authority of Seller
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16
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3.2
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Authorization
of Agreement
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16
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3.3
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No
Conflicts
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17
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3.4
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Notices and
Consents
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17
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3.5
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Seller and
Seller Members
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17
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3.6
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Financial
Statements
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17
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3.7
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Books and
Records
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18
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3.8
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No Undisclosed
Liabilities
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18
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3.9
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Title to
Purchased Assets; Encumbrances
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18
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3.10
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Sufficiency of
Assets
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18
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3.11
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Condition of
Equipment
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18
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3.12
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Inventories
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18
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3.13
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Real
Property
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3.14
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Accounts
Receivable
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20
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3.15
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Accounts
Payable
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20
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Page
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3.16
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Intellectual
Property
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20
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3.17
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Agreements,
Contracts and Commitments
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22
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3.18
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Material
Customers and Suppliers
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23
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3.19
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Insurance
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23
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3.20
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Proceedings
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24
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3.21
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Employees
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24
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3.22
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Labor
Disputes; Compliance
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25
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3.23
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Employee
Benefit Matters
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25
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3.24
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Taxes
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26
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3.25
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Compliance
with Laws
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27
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3.26
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Environmental
Matters
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28
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3.27
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No Material
Adverse Effect
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28
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3.28
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Absence of
Certain Changes or Events
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29
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3.29
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Brokers or
Finders
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29
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3.30
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Information
Furnished
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29
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3.31
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Accuracy of
Representations and Warranties
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29
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Article
4
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REPRESENTATIONS AND WARRANTIES OF
BUYER
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30
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4.1
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Organization
and Good Standing
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30
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4.2
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Authorization
of Agreement
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30
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4.3
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No
Conflicts
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30
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4.4
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Notices and
Consents
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31
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4.5
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Proceedings
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31
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4.6
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Brokers
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31
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Article
5
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COVENANTS OF
THE PARTIES
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31
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5.1
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Transfer of
Permits and Agreements
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31
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5.2
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Further
Assurances
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31
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5.3
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Announcements
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32
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5.4
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Confidentiality
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32
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5.5
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Non-Competition; Non-Solicitation
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34
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Page
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5.6
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Protected Term
and Protected Territory Defined
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34
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5.7
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Amendment of
Provisions to Comply with Law
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35
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5.8
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Injunctive
Relief
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35
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5.9
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Employees
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35
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5.10
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Change of
Seller’s Name
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37
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5.11
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Seller’s
Handling of Accounts Receivable
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37
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Article
6
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TAX
MATTERS
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37
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6.1
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Allocation of
Purchase Price
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37
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6.2
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Cooperation
With Tax Returns
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37
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6.3
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Straddle
Period Taxes
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38
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Article
7
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SURVIVAL AND
INDEMNIFICATION
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38
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7.1
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Survival
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38
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7.2
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Indemnification By Seller and the Seller
Members
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38
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7.3
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Indemnification by Buyer
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39
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7.4
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Timing of
Indemnification Claims
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39
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7.5
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Third Party
Claim Procedures
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40
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7.6
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Other
Claims
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42
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7.7
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Limitation on
Indemnity Obligations
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42
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7.8
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Insurance
Policies
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43
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7.9
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Right of
Set-Off
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43
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7.10
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Exclusive
Remedy
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43
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Article
8
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MISCELLANEOUS
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43
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8.1
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Expenses
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43
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8.2
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Entire
Agreement; Modification
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43
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8.3
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Severability
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44
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8.4
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Notices
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44
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8.5
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Governing
Law
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45
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8.6
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Forum for
Disputes
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45
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8.7
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Headings;
Interpretation
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46
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8.8
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Assignments;
Successors; No Third-Party Rights
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46
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Page
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8.9
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Waiver;
Remedies Cumulative
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46
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8.10
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Joint
Preparation
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47
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8.11
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Dates and
Times
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47
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8.12
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Execution of
Agreement
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47
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iv
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of
February 4, 2008, is made by and between Enrange LLC, a
Pennsylvania limited liability company (“ Seller
”), W. Christopher Dulin, an individual residing in the State
of Pennsylvania, William Gibson, an individual residing in the
State of West Virginia, and David Ashburn, an individual residing
in the State of West Virginia (collectively, the “ Seller
Members ”), and Magnetek, Inc., a Delaware
corporation (“ Buyer ”). Seller, the
Seller Members and Buyer are sometimes referred to herein
collectively as the “ Parties ” and each
individually as a “ Party ”.
RECITALS
A.
Seller is in the business of
developing, designing, manufacturing, marketing and selling
wireless radio remote controls for the material handling,
industrial, hydraulic, and rock mining industries (the
“ Business ”).
B.
Seller wishes to sell, and Buyer wishes to purchase, the Business
and the assets of Seller used in the conduct of the Business, and
Buyer is prepared to assume certain specified operating liabilities
with respect to the Business, in each case for the consideration
and on the terms and conditions set forth in this Agreement.
C.
The Seller Members are the holders of all of the outstanding equity
interests in Seller and will benefit from the sale of the Business
and substantially all of Seller’s assets.
NOW
THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the receipt and
sufficiency of which are hereby acknowledged, the Parties,
intending to be legally bound, agree as follows:
ARTICLE 1
DEFINITIONS
1.1
Definitions . Except as otherwise expressly provided
in this Agreement, or unless the context otherwise requires,
whenever used in this Agreement (including in the Schedules
attached hereto), the following terms shall have the respective
meanings indicated below.
“ Accounts Receivable ”
means all trade and other accounts receivable and other rights to
payment from past or present customers and other account debtors of
Seller arising or accruing exclusively in connection with the
Business, and the full benefit of all security for such accounts or
rights to payment, including all trade, vendor and other accounts
receivable representing amounts receivable in respect of goods sold
or services rendered to customers of the Business or in respect of
amounts refundable or otherwise due to Seller from vendors,
suppliers or other Persons exclusively in connection with the
Business.
“ Advanced Radiotech Corporation
Marketing and Sales Agreement ” means the Marketing and
Sales Agreement by and between Seller and Advanced Radiotech
Corporation, dated as of June 20, 2007.
1
“ Affiliate ” of a
Person means a Person that, directly or indirectly, through one or
more intermediaries, controls, is controlled by, or is under common
control with, the first Person. For purposes of this
definition, “control” (including the terms
“controlled by” and “under common control
with”) means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting
securities, by Contract or credit arrangement, as trustee or
executor, or otherwise.
“ Agreement ” means
this Asset Purchase Agreement, including the Schedules and Exhibits
attached hereto, as may be amended from time to time in accordance
with the provisions hereof.
“ Applicable Law ”
means, with respect to any Person, any constitution, treaty,
statute, law (including common law), rule, regulation, ordinance,
code, or any Permit, order, decision, injunction, judgment, award,
decree or agreement of or with any Governmental Authority, in any
such case to the extent applicable to such Person or any of its
Affiliates or any of their respective assets and/or businesses.
“ Benefit Plan ” means
any employee benefit plan within the meaning of
Section 3(3) of ERISA, and each other bonus, deferred
compensation, incentive compensation, stock purchase, stock option,
stock appreciation right or other equity-based incentive,
severance, termination, change in control, retention, employment,
hospitalization or other medical, life or other insurance,
disability, sick leave, salary continuation, workers’
compensation, welfare, supplemental unemployment, profit-sharing,
pension or retirement plan, program, agreement or arrangement that
is sponsored, maintained or contributed to by Seller or an ERISA
Affiliate or under which Seller or an ERISA Affiliate has any
liability. For the purposes of this definition, an “
ERISA Affiliate ” means an incorporated or
unincorporated trade or business that together with Seller is
treated as a single employer under Section 414 of the
Code.
“ Business Day ”
means any day other than a Saturday, Sunday or other day on which
banks in Menomonee Falls, Wisconsin or Canonsburg, Pennsylvania are
permitted or required by Applicable Law to close.
“ Centra Line of Credit ”
means the Line of Credit by and between Seller and Centra Bank,
dated July 25, 2007.
“ Code ” means the
Internal Revenue Code of 1986, as amended.
“ Copyrights ” the meaning
given in the definition of Intellectual Property.
“ Consent ” means any
consent, approval, authorization, waiver, Permit, grant, franchise,
concession, agreement, license, exemption or order of,
registration, certificate, declaration or filing with any
Person.
“ Contemplated Transactions
” means the transactions contemplated under this Agreement to
occur at Closing.
2
“ Contract ” means any
contract, agreement, purchase or sale order, invoice, indenture,
note, bond, loan, instrument, lease, commitment or other
arrangement or agreement, whether written or oral.
“ Effective Time ” means
11:59 p.m. on the date immediately preceding the Closing
Date.
“ Employee ” means any
full-time or part-time employee of Seller (including any member of
management) who is employed primarily in connection with the
conduct of the Business.
“ Encumbrance ” means
any mortgage, pledge, lien, charge, hypothecation, security
interest, encumbrance, adverse right, interest or claim, lease,
sublease, license, easement, covenant, encroachment, title defect,
option, right of first refusal or other restriction or limitation
of any nature whatsoever.
“ Environment ” means soil,
land surface or subsurface strata, surface waters, groundwaters,
drinking water supply, stream sediments, ambient air (including
indoor air), plant and animal life and any other environmental
medium or natural resource.
“ Environmental, Health and Safety
Liabilities ” means any and all claims, costs, damages,
expenses, Liabilities and/or other responsibility or potential
responsibility arising from or under any Environmental Law or
Occupational Safety and Health Law (including compliance
therewith).
“ Environmental Laws
” mean all Applicable Laws, regulations, standards,
requirements, ordinances, policies, guidelines, orders, approvals,
notices, permits or directives, or parts thereof, pertaining to
environmental or occupational health and safety matters, in effect
as at the date hereof, including laws and regulations relating to
releases or threatened releases of Hazardous Substances, or
otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of
Hazardous Substances, including the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C.
§ 9601 et seq.), the Hazardous Substances Transportation
Act (49 U.S.C. App. § 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. § 6901 et seq.),
the Clean Water Act (33 U.S.C. § 1251 et seq.), the Clean
Air Act (42 U.S.C. § 7401 et seq.) the Toxic
Substances Control Act (15 U.S.C. § 2601 et seq.), the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C.
§ 136 et seq.), and the Occupational Safety and Health
Act (29 U.S.C. § 651 et seq.), as each has been or may be
amended and the regulations promulgated pursuant thereto.
“ Equipment ” means all
vehicles, machinery, equipment, tools, furniture, office equipment,
computer hardware (including peripherals), fixtures, leasehold
improvements, dies, tooling, appliances, spare parts, supplies,
materials and other items of tangible personal property (other than
Inventories) of every kind owned or leased by Seller for use in the
conduct of the Business.
“ ERISA ” means the Employee
Retirement Income Security Act of 1974, as amended.
3
“ GAAP ” means
generally accepted accounting principles as in effect in the United
States of America as determined by the Financial Accounting
Standards Board from time to time applied on a consistent basis as
of the date of any application thereof.
“ Governmental Authority
” means any nation or government, any state, county,
municipality or other political subdivision thereof, any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including
any government authority, agency, department, board, commission or
instrumentality of the United States, any State of the United
States or any political subdivision thereof, or of any foreign
country, or any court, tribunal or arbitrator(s) of competent
jurisdiction, any self-regulatory organization or any Indian tribal
authority.
“ Hazardous Activity ” means
the distribution, generation, handling, importing, management,
manufacturing, processing, production, refinement, Release,
storage, transfer, transportation, treatment or use (including any
withdrawal or other use of groundwater) of any Hazardous Substance
in, on, under, about or from any facility (including any Leased
Real Property) or other real property owned, leased, operated or
otherwise used by Seller, whether or not in connection with the
conduct of the Business, or from any other asset of Seller, into
the Environment, beyond what is authorized by applicable
Environmental Laws.
“ Hazardous Substance
” means any substance that: (i) is or contains asbestos,
urea formaldehyde foam insulation, polychlorinated biphenyls,
petroleum or petroleum-derived substances or wastes, radon gas or
related materials, (ii) requires investigation, removal or
remediation or for which there are restrictions pursuant to any
Environmental Law regarding its use or disposal, under any
Environmental Law, or is defined, listed or identified as a
“hazardous waste,” “toxic substance,”
“toxic material,” “pollutant,” or
“hazardous substance” thereunder, or (iii) is
toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic, or otherwise hazardous and is regulated by
any Governmental Authority or Environmental Law.
“ Intellectual Property
” means all intellectual property owned, licensed (as
licensee) or otherwise used by Seller arising from or in respect of
the following, whether protected, created or arising under the laws
of the United States or any other jurisdiction: (i) all
patents and applications therefor, including continuations,
divisionals, continuations-in-part, or reissues of patent
applications and patents issuing thereon (collectively, “
Patents ”), (ii) all trademarks, service marks,
trade names, service names, brand names, trade dress rights, logos,
Internet URL addresses, corporate names and general intangibles of
a like nature, together with the goodwill associated with any of
the foregoing, and all applications, registrations and renewals
thereof (collectively, “ Marks ”),
(iii) all copyrights and registrations and applications
therefor, works of authorship and mask work rights (collectively,
“ Copyrights ”), (iv) all discoveries,
concepts, ideas, research and development, know-how, formulae,
inventions, compositions, manufacturing and production processes
and techniques, technical data, procedures, designs, drawings,
specifications, databases, and other proprietary and confidential
information, including customer lists, supplier lists, pricing and
cost information, and
4
business and marketing plans and proposals of
Seller, in each case excluding any rights in respect of any of the
foregoing that comprise or are protected by Copyrights or Patents
(collectively, “ Trade Secrets ”), (v) all
Software; and (vi) all other Technology.
“ Inventories ” means all
product inventories of Seller, including finished goods, supplies,
scrap, work in process and raw materials to be used or consumed by
Seller in the production of finished goods.
“ IRS ” means the
Internal Revenue Service.
“ Knowledge ”
means:
(a)
when used to qualify a representation, warranty or other statement
of Seller or the Seller Members in this Agreement, (i) the
knowledge that any Seller Member actually has with respect to the
particular fact or matter that is the subject of such
representation, warranty or other statement, and (ii) the
knowledge that any Seller Member could reasonably be expected to
have as a prudent and responsible manager of Seller and the
Business after having conducted a reasonably comprehensive inquiry
or investigation with respect to the fact or matter that is the
subject of such representation, warranty or other statement;
and
(b)
when used to qualify a representation, warranty or other statement
of Buyer in this Agreement, (i) the knowledge that any of
David P. Reiland, Marty Schwenner or Jolene Shellman actually has
with respect to the particular fact or matter that is the subject
of such representation, warranty or other statement, and
(ii) the knowledge that any David P. Reiland, Marty Schwenner
or Jolene Shellman could reasonably be expected to have as a
prudent and responsible manager of Buyer after having conducted a
reasonably comprehensive inquiry or investigation with respect to
the fact or matter that is the subject of such representation,
warranty or other statement.
“ Liability ” means, with
respect to any Person, any liability or obligation of such Person
of any kind, character or description, whether known or unknown,
absolute or contingent, accrued or unaccrued, disputed or
undisputed, liquidated or unliquidated, secured or unsecured, joint
or several, due or to become due, vested or unvested, executory,
determined, determinable or otherwise, and whether or not the same
is required to be accrued on the financial statements of such
Person.
“ Marks ” has the meaning
given in the definition of Intellectual Property.
“ Material Adverse Effect ”
means a material adverse effect on the Business and assets
of Seller, taken as a whole, that is so substantial and adverse as
to fundamentally impair the value to Buyer of the Business and the
Purchased Assets (taken as a whole); provided, however, that the
following shall not be considered when determining whether a
Material Adverse Effect has occurred: (i) any general
social, political or economic condition or event, the effects of
which are not specific or unique to the Business or the industry in
which it operates, including stock market fluctuations, acts of war
or terrorism or the consequences of any of the foregoing;
(ii) the general conditions of the industry in
5
which the Business operates, including any
change in such conditions; (iii) any change in currency
exchange rates or interest rates; or (iv) any change
in any Applicable Law.
“ Net Working Capital ”
means, as of the Effective Time, the amount by which the current
assets of Seller included in the Purchased Assets exceeds the
current liabilities of Seller included in the Assumed Liabilities
(as the terms “current assets” and “current
liabilities” are defined under GAAP).
“ Occupational Safety and Health
Law ” means any Applicable Law designed to provide safe
and healthful working conditions and to reduce occupational safety
and health hazards, including the Occupational Safety and Health
Act (29 U.S.C. § 651 et seq.), and any Applicable Law
designed to provide safe and healthful working
conditions.
“ Order ” means any order,
injunction, judgment, decision, finding, decree, ruling, assessment
or arbitration award of any Governmental Authority or
arbitrator.
“ Patents ” has the meaning
given in the definition of Intellectual Property.
“ Permit ” means, with
respect to any Person, any license, permit, registration,
Consent, certificate, order, approval or other authorization
required by any Governmental Authority for such Person to lawfully
(i) own, lease or use a particular asset, (ii) occupy,
access or use particular real property, or (iii) conduct a
particular business or other activity.
“ Permitted Encumbrance ”
means (i) any statutory Encumbrance for Taxes not yet due or
delinquent or being contested in good faith by appropriate
proceedings; (ii) any zoning, planning or other similar
limitation or restriction, including rights of any Governmental
Authority, to regulate any property or asset owned, leased or
otherwise used by Seller, or (iii) any matter of public record
or matter disclosed or disclosable by a survey.
“ Person ” means any
natural person, firm, partnership, association, corporation,
company, limited liability company, trust, business trust,
Governmental Authority, or other unincorporated entity or
organization.
“ Proceeding ” means any
action, arbitration, audit, hearing, investigation, litigation or
lawsuit (whether civil, criminal, administrative, judicial or
investigative, whether formal or informal, and whether public or
private) commenced, brought, conducted or heard by or before, or
otherwise involving, any Governmental Authority, mediator or
arbitrator.
“ Release ” means any
release, spill, emission, leaking, pumping, pouring, dumping,
emptying, injection, deposit, disposal, discharge, dispersal,
leaching or migration on or into the Environment or into or out of
any property.
“ Representative ” means
with respect to a particular Person, any director, officer, member,
manager, employee, agent, consultant, advisor, accountant,
financial advisor, legal counsel or other representative of that
Person.
6
“ Target Net Working Capital
” means $768,136.
“ Tax ” means any
federal, state, county, local, foreign or other income,
alternative, minimum, accumulated earnings, personal holding
company, franchise, capital stock, net worth, capital, profits,
windfall profits, gross receipts, value added, privilege, sales,
use, goods and services, excise, customs duties, transfer,
conveyance, mortgage, registration, stamp, documentary, recording,
premium, severance, environmental (including taxes under
Section 59A of the Code), real property, personal property,
transfer, ad valorem, intangibles, rent, occupancy, license,
occupational, employment, unemployment insurance, social security,
disability, workers’ compensation, payroll, health care,
registration, withholding, estimated or other similar tax, duty or
other governmental charge or assessment or deficiencies thereof
(including all interest and penalties thereon and additions thereto
whether disputed or not).
“ Tax Return ” means
any return, report, declaration, form, claim for refund or
information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment
thereof.
“ Technology ” means,
collectively, all designs, formulae, algorithms, procedures,
methods, techniques, ideas, know-how, research and development,
technical data, programs, subroutines, tools, materials,
specifications, processes, inventions (whether patentable or
unpatentable and whether or not reduced to practice), apparatus,
creations, improvements, works of authorship and other similar
materials, and all recordings, graphs, drawings, reports, analyses,
and other writings, and other tangible embodiments of the
foregoing, in any form whether or not specifically listed herein,
and all related technology, that are used in, incorporated in,
embodied in, displayed by or relate to, or are used by Seller or
any Seller Member in connection with the Business.
“ Third Party ” means a
Person that is not a Party or an Affiliate of a Party, and is not
acting in the capacity as agent for a Party or any of its
Affiliates.
“ Third Party Claim ” means
any claim against any Indemnitee by a Third Party, whether or not
involving a Proceeding.
“ Trade Secrets ” the
meaning given in the definition of Intellectual
Property.
“ Treasury Regulations ”
means the Treasury Regulations promulgated under the Code, and the
term “Treasury Regulation” followed by a particular
§ number reference means that particular section or subsection
of the Treasury Regulations.
1.2
Terms Defined in Agreement . For purposes of this
Agreement, the following terms have meanings set forth in the
Sections or paragraphs of this Agreement indicated alongside such
terms:
|
Term
|
|
Section
|
|
|
|
|
|
Assigned
Contracts
|
|
2.1(e)
|
|
Assignment and
Assumption Agreement
|
|
2.7(d)
|
7
|
Term
|
|
Section
|
|
|
|
|
|
Assumed
Liabilities
|
|
2.3(a)
|
|
Assumed
Payables
|
|
2.3(a)(i)
|
|
Bill of
Sale
|
|
2.7(c)
|
|
Buyer
|
|
Introductory
Paragraph of Agreement
|
|
Buyer Closing
Documents
|
|
4.2
|
|
Buyer
Indemnitees
|
|
7.2
|
|
Claims
Cap
|
|
7.7(a)
|
|
Claims
Period
|
|
7.4
|
|
Closing
|
|
2.6
|
|
Closing
Date
|
|
2.6
|
|
Closing
Payment
|
|
2.4(a)
|
|
Closing
Statement
|
|
2.5(b)
|
|
Confidential
Information
|
|
5.4(a)
|
|
Earnout
Payments
|
|
2.4(c)
|
|
Employment
Agreement
|
|
5.9(a)
|
|
Encumbered
Assets
|
|
2.9
|
|
Excluded
Assets
|
|
2.2
|
|
Financial
Statements
|
|
3.6
|
|
Indemnitee
|
|
7.5(a)
|
|
Indemnitor
|
|
7.5(a)
|
|
IRS
|
|
3.23(b)(ii)
|
|
Lease
Assignment
|
|
2.7(g)
|
|
Leased Real
Property
|
|
3.13(b)
|
|
Losses
|
|
7.2
|
|
Independent
Accountants
|
|
2.5(c)
|
|
Paying
Party
|
|
6.3
|
|
Party and
Parties
|
|
Introductory
Paragraph of Agreement
|
|
Promissory
Note
|
|
2.4(b)
|
|
Protected
Term
|
|
5.6(a)
|
|
Protected
Territory
|
|
5.6(b)
|
|
Purchased
Assets
|
|
2.1
|
|
Purchase
Price
|
|
2.4
|
|
Non-Paying
Party
|
|
6.3
|
|
Real Property
Lease
|
|
3.13(c)
|
|
Retained
Liabilities
|
|
2.3(b)
|
|
Seller
|
|
Introductory
Paragraph of Agreement
|
|
Seller
Indemnitees
|
|
7.3
|
|
Seller Closing
Documents
|
|
3.2
|
|
Straddle
Period Tax
|
|
6.3
|
|
Transferred
Employees
|
|
5.9(b)
|
8
ARTICLE 2
SALE AND PURCHASE OF ASSETS
2.1
Sale and Purchase of Assets . Upon the terms and
subject to the conditions set forth in this Agreement, at the
Closing, but effective as of the Effective Time, Seller shall sell,
convey, assign, transfer and deliver to Buyer, and Buyer shall
purchase and acquire from Seller, free and clear of any Encumbrance
other than the Permitted Encumbrances, all legal and beneficial
right, title and interest in and to the real and personal property
and assets owned by Seller and used or otherwise arising in
connection with the conduct of the Business (collectively, the
“ Purchased Assets ”), including the following,
but excluding in all cases the Excluded Assets:
(a)
all Equipment, including the Equipment described on Schedule
2.1(a) ;
(b)
all Inventories;
(c)
all Accounts Receivable;
(d)
all prepaid expenses, deposits, credits with, and refunds due from,
vendors or suppliers to the Business, to the extent relating to any
Assigned Contract;
(e)
all of Seller’s rights under the Contracts listed on
Schedule 2.1(e) (collectively, the “Assigned
Contracts”);
(f)
all Permits of Seller exclusively relating to the Business or any
of the Purchased Assets, in each case to the extent transferable to
Buyer by their terms or otherwise under Applicable Law;
(g)
the telephone and facsimile numbers of Seller listed on Schedule
2.1(g) ;
(h)
all guarantees, warranties, warranty rights, indemnities, claims
and similar rights of Seller relating to the Purchased Assets or
the Business, whether choate or inchoate, known or unknown,
contingent or non-contingent, and all related claims, credits,
rights of recovery and set off;
(i)
all Intellectual Property, including the items listed on
Schedule 2.1(i) ;
(j)
all other intangible rights and property of Seller relating to the
Business, including going concern value and goodwill; and
(k)
originals or copies of all data and records related to the
operation of the Business or the ownership or use of the Purchased
Assets, including applicable customer records, research and
development reports and records, production reports and records,
service and warranty records, equipment logs, operating guides and
manuals, accounting records, promotional materials, correspondence
and other similar documents and records and, subject to Applicable
Law, copies of all personnel records for the Employees hired by
Buyer pursuant to Section 5.9(a) , but excluding the
corporate records of Seller specified in Section 2.2(g)
.
9
2.2
Excluded Assets . Notwithstanding anything to the
contrary contained in Section 2.1 or elsewhere in this
Agreement, the following property and assets of Seller
(collectively, the “ Excluded Assets ”) are not
part of the sale and purchase contemplated hereunder, are excluded
from the Purchased Assets and shall remain the property of Seller
after the Closing:
(a)
all cash and cash equivalents, investments, securities, rights to
offset and other similar financial assets of Seller, whether or not
relating to the Business;
(b)
any claim by Seller for any refund of Taxes in connection with the
Business or any of the Purchased Assets with respect to any period
ending on or before the Closing Date, and the proceeds of any such
claim;
(c)
Seller’s rights under this Agreement and any ancillary
document or agreement contemplated hereby to which Seller is a
party or under which Seller has any right;
(d)
Seller’s rights under any Contract that is not an Assigned
Contract;
(e)
all insurance policies of Seller and the rights thereunder, whether
or not maintained for the Business or the Purchased Assets;
(f)
any Benefit Plan of Seller, and any assets underlying, payable or
distributable under any such Benefit Plan;
(g)
the Certificate of Incorporation, Bylaws, minute books and other
corporate records of Seller; and
(h)
the other specified property and assets (if any) listed on
Schedule 2.2(h) .
2.3
Liabilities .
(a)
Assumed Liabilities . At the Closing, but effective as
of the Effective Time, Buyer shall assume and take exclusive
responsibility for, and hereby agrees to satisfy and discharge in
accordance with their respective terms, the following Liabilities
of Seller that exclusively relate to the Purchased Assets or the
Business (such Liabilities being the “ Assumed
Liabilities ”):
(i)
Seller’s trade and vendor accounts payable incurred in the
ordinary course of the Business and unpaid as of the Effective Time
(the “ Assumed Payables ”), it being understood
and agreed that such Assumed Payables shall not include any of
Seller’s or any Seller Member’s costs incurred in
connection with the negotiation of this Agreement or with the
consummation of the Contemplated Transactions, including fees and
expenses of legal and other professional advisors;
(ii)
Seller’s ongoing payment and performance obligations under
the Assigned Contracts, but only to the extent that such
obligations first accrue, arise or exist after the Effective Time
and are not based on or do not relate to any
10
breach by or outstanding obligation of Seller
arising, occurring or existing before the Effective Time ;
and
(iii)
to the extent Seller makes payment towards or pays off the Centra
Line of Credit on the Business Day immediately preceding the
Closing Date, Buyer shall reimburse Seller for such amount at the
Closing.
(b)
Retained Liabilities . The Retained Liabilities shall
remain the exclusive responsibility of, and shall be retained,
paid, performed and discharged exclusively by, Seller in accordance
with their respective terms. Notwithstanding anything to the
contrary contained in Section 2.3(a) or elsewhere in this
Agreement, “ Retained Liabilities ” shall mean,
collectively, every Liability of Seller other than the Assumed
Liabilities. Without limiting the generality of the
foregoing, the Retained Liabilities shall include:
(i)
any Liability under any Assigned Contract that arises, accrues or
exists after the Effective Time out of or relating to (A) any
breach of Seller that occurred before the Effective Time, or
(B) any outstanding obligation of Seller that was required to
have been satisfied or performed by Seller before the Effective
Time (except for accounts payable obligations assumed by Buyer
pursuant to Section 2.3(a)(i) );
(ii)
any Liability under any contract or agreement not included in the
Assigned Contracts;
(iii)
except as provided in Section 2.3(a)(iii) , any Liability of
Seller under any note, loan, borrowing arrangement, debt financing,
credit facility, capital lease (except as included in the Assigned
Contracts), financial or performance guaranty, surety, indemnity or
bond, or any security interest related to any of the foregoing;
(iv)
any Liability of Seller for any Tax relating to or arising in
connection with the operation of the Business or ownership of the
Purchased Assets by Seller before the Effective Time;
(v)
any Environmental, Health and Safety Liability arising out of or
relating to the operation of the Business prior to the Effective
Time or the leasing, ownership or operation of any asset (including
any real property) by Seller, whether or not included in the
Purchased Assets;
(vi)
any Liability arising out of or relating to any Employee grievance
or claim against Seller (including any director, officer or other
Employee thereof), any Seller Member or any prior member of Seller,
whether or not the Employee involved with such grievance or claim
is hired by Buyer;
(vii)
any Liability relating to any Benefit Plan of Seller or any
payroll, sick leave or pay, workers’ compensation,
unemployment benefits, or other
11
benefits or
compensation of any kind for Seller’s directors, former
directors, officers, managers, Employees or former
Employees;
(viii)
any Liability under any employment, severance, retention or
termination agreement with any present or past director, officer,
manager, member or Employee of Seller;
(ix)
any Liability of Seller to defend, indemnify, hold harmless or
reimburse any Person, including any present or former director,
officer, manager, member, Employee or agent of Seller, except to
the extent such Liability is expressly included in an Assigned
Contract (and then only to the extent that such Liability arises in
connection with acts, omissions, facts, events or circumstances
first existing, accruing or arising after the Effective Time);
(x)
any Liability of Seller to any Affiliate or to any Seller Member or
any prior member of Seller, including any and all debt amounts
payable by Seller to any Affiliate or any Seller Member;
(xi)
any Liability of Seller to distribute to any Person (including any
Seller Member or any prior member of Seller) or otherwise apply all
or any part of the Purchase Price received by Seller hereunder;
(xii)
any Liability of Seller arising out of (A) any past Proceeding
or any Proceeding underway or pending as of the Effective Time by
or against Seller, any Seller Member or any prior member of Seller,
or any Affiliate thereof, or (B) any Proceeding commenced
after the Effective Time that relates to any act, omission,
occurrence or event happening, or any fact or circumstance
existing, before the Effective Time;
(xiii)
any Liability of Seller arising out of or resulting from
non-compliance with any Applicable Law or Order by Seller, any
Seller Member or any prior member of Seller;
(xiv)
any Liability of Seller under this Agreement or under any Seller
Closing Document, Buyer Closing Document or other document or
agreement contemplated thereby; and
(xv)
any Liability of Seller based upon or arising from the acts or
omissions of Seller or any Seller Member occurring after the
Effective Time.
2.4
Purchase Price . In consideration for the Purchased
Assets and Seller’s and the Seller Members’ covenants
under Section 5.3 , in addition to Buyer’s assumption
of the Assumed Liabilities, Buyer shall pay to Seller the sum of
$2,500,000, plus the aggregate amount of Earnout Payments
(as defined below), minus the amount, if any, by which the
Net Working Capital as determined pursuant to Section 2.5 is
less than the Target Net Working Capital (collectively, the “
Purchase Price ”). Buyer shall pay the Purchase
Price to Seller in the following manner:
12
(a)
At the Closing, Buyer shall pay to or for the account of Seller by
wire transfer of immediately available funds $1,750,000.00 (the
“ Closing Payment ”).
(b)
At the Closing, Buyer shall deliver to Seller a Promissory Note, in
the form attached hereto as Exhibit A (the “
Promissory Note ”), for the principal amount of
$750,000, which shall be payable in full by Buyer on the first
anniversary of the Closing Date, subject to Section
7.9.
(c)
Subject to Section 7.9 , Buyer shall pay to or for the
account of Seller, within ninety (90) days after the end of each
Fiscal Year (as defined below), through and including the Fiscal
Year ending June 28, 2010, in immediately available funds (by
wire transfer to a bank account designated by the Seller), the
amount determined in accordance with the Earnout Schedule attached
hereto as Exhibit B (each, an “ Earnout
Payment ”). “ Fiscal Year ”
shall mean the fifty-two (52) or fifty-three (53) week period
commencing on the Monday following the Sunday that is nearest to
June 30 th and ending on the Sunday that is nearest
June 30 th of each year. The first Fiscal
Year is the 2008 Fiscal Year, ending June 29, 2008.
2.5
Net Working Capital Adjustment . For purposes of
Section 2.4 , the Target Net Working Capital and Net Working
Capital shall be determined as follows:
(a)
Exhibit C attached hereto sets forth pro forma balance
sheets of Seller as of the Effective Time and the methodology for
calculating the Net Working Capital based thereon.
(b)
Within ninety (90) days following the Closing Date, Buyer shall
deliver to Seller a statement (the “ Closing Statement
”) setting forth Buyer’s determination of the Net
Working Capital based on the financial and other records of the
Business, which determination shall be made in a manner consistent
with the calculation set forth on Exhibit C .
Seller shall have thirty (30) days from the date of its receipt of
the Closing Statement to review Buyer’s determination of the
Net Working Capital set forth in the Closing Statement. Buyer
shall provide Seller with reasonable access to Buyer’s books
and records to the extent relevant to verifying Buyer’s
determination of the Net Working Capital. Upon completion of
its review (and in any event within the required thirty (30)-day
period), Seller shall deliver to Buyer written notice of
Seller’s acceptance or rejection of Buyer’s
determination of the Net Working Capital, including, in the case of
any such rejection, an explanation of the reason for such
rejection. If Seller fails to deliver any such written notice
to Buyer within such thirty (30)-day period, Seller shall be deemed
to have accepted Buyer’s determination of the Net Working
Capital, in which event Buyer’s determination of the Net
Working Capital shall be final, binding and conclusive on the
Parties.
(c)
If Seller delivers written notice to Buyer under Section
2.5(b) of Seller’s rejection of Buyer’s
determination of the Net Working Capital as set forth in the
Closing Statement (which notice of rejection must contain
reasonable details as to the basis of such rejection), Seller and
Buyer shall promptly (and in any event within ten
(10) Business Days) cause their respective Representatives to
confer with each other with a view to resolving such matter.
If such Representatives are unable to resolve such matter
13
within thirty (30) days
after the date of delivery of Seller’s notice of rejection to
Buyer, Seller and Buyer shall refer the dispute to a mutually
acceptable firm of independent public accountants (the “
Independent Accountants ”) for review and final
determination of the Net Working Capital. The Independent
Accountants may request of Seller and Buyer such documents and
information as may be necessary or appropriate for proper
determination of the matter, and Seller and Buyer shall cooperate
reasonably to promptly satisfy any such request. The
determination by the Independent Accountants of the Net Working
Capital, shall be final, binding and conclusive on Seller and
Buyer. The costs of the Independent Accountants in
undertaking such review and determination shall be shared equally
by Seller and Buyer.
(d)
Within five (5) Business Days after the Net Working Capital is
finally determined:
(i)
if the Net Working Capital is less than the Target Net Working
Capital, the Purchase Price shall be deemed to be adjusted
downwards on a dollar-for-dollar basis by the amount of such
shortfall, and Seller shall (and the Seller Members shall cause
Seller to) forthwith pay the amount of such shortfall to Buyer by
wire transfer of immediately available funds; and
(ii)
if the Net Working Capital exceeds the Target Net Working Capital,
the Purchase Price shall not be adjusted.
2.6
Closing . The consummation of the Contemplated
Transactions (the “ Closing ”) shall take place
at the offices of Buyer at N49 W 13650 Campbell Drive, Menomonee
Falls, Wisconsin 53051, commencing at 10:00 a.m. (local time)
on February 4, 2008 (the “ Closing Date ”),
or at such other time and place as Seller and Buyer may agree.
2.7
Closing Deliveries by Seller . At the Closing, Seller
shall deliver or cause to be delivered to Buyer the following:
(a)
a certificate of good standing of Seller dated not more than ninety
(90) days before the Closing Date issued by the Secretary of State
of Pennsylvania;
(b)
a copy, certified by an executive officer of Seller, of the
resolutions of the Seller Members authorizing and approving
(i) Seller’s execution and delivery of this Agreement
and the other agreements contemplated hereby and the consummation
of the Contemplated Transactions, and (ii) the change of
Seller’s name in accordance with the provisions of
Section 5.10 ;
(c)
a general bill of sale for all of the Equipment, Inventories and
other tangible personal property included in the Purchased Assets,
in form and substance reasonably acceptable to Buyer (the “
Bill of Sale ”), duly executed by Seller;
(d)
an assignment of the Accounts Receivable, Assigned Contracts,
Permits (to the extent transferable to Buyer by their terms or
under Applicable Law), Intellectual Property and other intangible
personal property included in the Purchased Assets, in form and
substance reasonably acceptable to Buyer, which assignment shall
also contain
14
Buyer’s
assumption of the Assumed Liabilities (the “ Assignment
and Assumption Agreement ”), duly executed by
Seller;
(e)
intentionally left blank;
(f)
intentionally left blank;
(g)
an assignment of Seller’s rights under the Real Property
Lease, in form and substance reasonably acceptable to Buyer, which
assignment shall also contain Buyer’s assumption of
Seller’s obligations under the Real Property Lease (the
“ Lease Assignment ”), duly executed by Seller
and the landlord under the Real Property Lease;
(h)
written consents of all Third Parties necessary for the assignment
and assumption of the agreements listed on Schedule 2.7(h)
;
(i)
the Employment Agreement, duly executed by W. Christopher
Dulin;
(j)
the documents and records related to the Business and the Purchased
Assets referred to in Section 2.1(k) ; and
(k)
such other documents and instruments as Buyer may reasonably
require to further and give effect to the Contemplated
Transactions.
2.8
Closing Deliveries by Buyer . At the Closing, Buyer
shall deliver or cause to be delivered to Seller the following:
(a)
a copy, certified by an officer of Buyer, of resolutions of the
directors of Buyer authorizing and approving the execution and
delivery of this Agreement and the consummation of the Contemplated
Transactions;
(b)
the Assignment and Assumption Agreement, duly executed by
Buyer;
(c)
the Lease Assignment, duly executed by Buyer;
(d)
the Closing Payment, subject to the provisions of
Section 2.9 ;
(e)
the Employment Agreement, duly executed by Buyer; and
(f)
such other documents and instruments as Seller may reasonably
require to further and give effect to the Contemplated
Transactions.
2.9
Payoff of Creditors . Except for the Assumed
Liabilities, including but not limited to any equipment leases
included in the Assigned Contracts, and except for any other
Permitted Encumbrance, Seller shall be required, at or before the
Closing, at its sole cost, to buy out, settle and discharge any
equipment lease, lease purchase contract, installment sale
contract, loan agreement or other agreement or arrangement that
creates, provides for or gives rise to any Encumbrance on any of
the Purchased Assets (the “ Encumbered Assets ”)
so that Seller is able to convey clear title to the Encumbered
Assets to Buyer at the Closing, free and clear of any further
15
payment obligations or other
Encumbrances. At least three (3) Business Days before
the Closing Date, Seller shall obtain from all applicable lessors
or creditors, and deliver to Buyer, payout statements for all
amounts owing by Seller in respect of the Encumbered Assets as of
the Closing Date. At the Closing, Buyer shall be entitled,
and Seller hereby authorizes and directs Buyer, to pay applicable
portions of the Closing Payment directly to such lessors or
creditors on Seller’s behalf so as to fully buy out, settle
and discharge all amounts owing to such lessors or creditors in
respect of the Encumbered Assets . Any payments by
Buyer to such lessors or creditors of Seller shall be deemed to
constitute payments by Buyer to Seller for purposes of satisfaction
of Buyer’s payment obligations under
Section 2.4(a) .
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF
SELLER AND SELLER MEMBERS
Seller and the Seller Members acknowledge that
Buyer is relying on the accuracy of the representations and
warranties contained in this Article 3 and that such
representations and warranties are given in order to induce Buyer
to enter into this Agreement and consummate the Contemplated
Transactions. Accordingly, as between Seller and the Seller
Members, collectively, both jointly and severally represent and
warrant to Buyer, and, as among the Seller Members, each severally
represents and warrants to Buyer, as follows:
3.1
Organization and Authority of Seller . Seller is a
limited liability company duly organized, validly existing and in
good standing under the laws of the State of Pennsylvania, with
full limited liability company power and authority to own its
properties and to carry on its business as now being conducted and
as presently intended to be conducted. Seller is not
registered to do business as a foreign limited liability company in
any state or other jurisdiction, as neither the ownership or use of
the properties owned or used by it, nor the nature of the
activities conducted by it, requires such registration.
3.2
Authorization of Agreement . The execution and
delivery by Seller of this Agreement and each other agreement or
instrument to be executed and delivered by Seller at Closing and
the performance of the Contemplated Transactions by Seller have
been duly authorized by all necessary limited liability company
action by Seller, and no other action on the part of Seller is
necessary to authorize this Agreement or any such other agreement
or instrument or to consummate the Contemplated Transactions.
This Agreement has been duly and validly executed and delivered by
Seller and the Seller Members and constitutes a valid and binding
obligation of Seller and the Seller Members, enforceable against
Seller and the Seller Members in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors
generally and by the availability of equitable remedies. Upon
their execution and delivery at Closing by Seller, the Bill of
Sale, Assignment and Assumption Agreement, Lease Assignment and
other agreements and instruments to be executed and delivered by
Seller at Closing pursuant to this Agreement (collectively, the
“ Seller Closing Documents ”) shall constitute
valid and binding obligations of Seller, enforceable against Seller
in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors
generally and by the availability of equitable remedies.
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3.3
No Conflicts . Neither the execution and delivery by
Seller of this Agreement or any of the Seller Closing Documents nor
the consummation or performance of any of the Contemplated
Transactions does or shall, directly or indirectly (with or without
notice or lapse of time):
(a)
violate any provision of the certificate of organization, operating
agreement or other governing documents of Seller, or contravene any
resolution adopted by the members of Seller;
(b)
breach any Applicable Law or Order to which Seller, any Seller
Member, the Business or any of the Purchased Assets is subject or
give any Governmental Authority or other Person the right to
challenge any of the Contemplated Transactions or to exercise any
remedy or obtain any relief under any Applicable Law or any Order
to which Seller, any Seller Member, the Business or any of the
Purchased Assets is subject;
(c)
contravene, conflict with or result in a breach of any of the terms
or requirements of, or give any Governmental Authority the right to
revoke, withdraw, suspend, cancel, terminate or modify, any Permit
that is held by or on behalf of Seller and that relates to the
Business or any of the Purchased Assets;
(d)
cause Buyer (or any Affiliate thereof) to become subject to, or to
become liable for the payment of, any Tax that is not contemplated
by this Agreement or that would not be the reasonably contemplated
result of the Contemplated Transactions;
(e)
breach any provision of, or give any Person the right to declare a
default or exercise any remedy under, or to accelerate the maturity
or performance of, or payment under, or to cancel, terminate or
modify, any Contract to which Seller or any Seller Member is a
party or by which Seller or any Seller Member is bound (including
any Assigned Contract); or
(f)
result in the imposition or creation of any Encumbrance (other than
a Permitted Encumbrance) on any of the Purchased Assets.
3.4
Notices and Consents . Except as set forth under on
Schedule 3.4 , Seller is not required to give any notice to,
or obtain any consent from, any Person in connection with the
execution and delivery of this Agreement or the consummation of the
Contemplated Transactions.
3.5
Seller and Seller Members . The Seller Members are the
only members of Seller. Seller has delivered to Buyer a
complete copy of the certificate of organization and there is no
operating agreement of Seller.
3.6
Financial Statements . Seller has provided to Buyer
correct and complete copies of the unaudited financial statements
of Seller as of and for the fiscal years ended December 31,
2006 and 2005 and copies of the unaudited, monthly consolidated
financial statements of Seller as of and for each completed monthly
period ended after December 31, 2006, including in each case a
balance sheet, a statement of income and retained earnings, a
statement of changes in shareholders’ equity and a statement
of cash flows (the “ Financial Statements
”). The Financial
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Statements have been prepared from and are in
accordance in all material respects with the accounting records of
Seller, and fairly present in all material respects the financial
condition and results of operations of Seller and the
Business as of the respective dates of and for the periods
referred to therein .
3.7
Books and Records . The financial, business and other
records of Seller, all of which have been made available to Buyer,
are complete and correct in all material respects and have been
maintained in accordance with sound business practices.
3.8
No Undisclosed Liabilities . Except for the Assumed
Liabilities and the Retained Liabilities, Seller does not have any
obligation or liability (whether accrued, absolute, contingent,
liquidated, unliquidated, or otherwise, whether due or to become
due and regardless of when asserted) except for
(i) liabilities reflected in the Financial Statements or
Seller’s current financial records (copies of all of which
have been made available to Buyer), (ii) ongoing performance
obligations under Contracts that are not required by GAAP to be
reflected in the Financial Statements, (iii) current
liabilities incurred in the ordinary course of business of Seller
since the date of the most recent balance sheet included in the
Financial Statements, and (iv) Liabilities set forth on
Schedule 3.8 .
3.9
Title to Purchased Assets; Encumbrances . Except for
(i) the Encumbrances listed under Part 1 of Schedule
3.9 , all of which shall be discharged by Seller before or in
connection with the Closing, and (ii) any other Permitted
Encumbrance, Seller has good and marketable title (or a valid
leasehold interest with respect to leased assets) to all of its
assets and properties free and clear of any Encumbrance.
Except for assets or property leased by Seller under written lease
agreements, Seller is not in possession of any property or asset
that is owned by any other Person, and no such property or asset is
included in the Purchased Assets. Except as listed under
Part 2 of Schedule 3.9 , and except for Inventories in
transit to or from customers or suppliers, no Third Party is in
possession of any asset or property of the Seller.
3.10
Sufficiency of Assets . Except for the Excluded
Assets, the Purchased Assets constitute all of the property and
assets, tangible and intangible, of any nature whatsoever,
necessary to operate the Business in the manner presently operated
by Seller.
3.11
Condition of Equipment . Each item of Equipment owned
or leased by Seller is in good repair and good operating condition,
ordinary wear and tear excepted, is suitable for immediate use in
the ordinary course of business, is free from apparent defects and
is being operated and maintained in all material respects in
accordance with prescribed operating instructions necessary to
ensure the effectiveness of Equipment warranties and/or service
plans, and (ii) no item of Equipment owned or leased by Seller
is in need of repair or replacement other than as part of routine
maintenance in the ordinary course of business. All Equipment
owned or leased by Seller is, and immediately before the Closing
shall be, in the possession or under the control of Seller.
3.12
Inventories . Except as set forth on Schedule
3.12 , all items included in the Inventories consist of a
quality and quantity usable or saleable in the ordinary course of
business of Seller, except for obsolete items and items of
below-standard quality, all of which have been written off or
written down to net realizable value in the Financial
Statements. All of the
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Inventories have been valued at the lower of
cost or net realizable value. Inventories now on hand that
were purchased after the date of the most recent balance sheet
included in the Financial Statements were purchased in the ordinary
course of business of Seller at a cost not exceeding market prices
prevailing at the time of purchase. Seller has provided Buyer
with a complete and accurate list of Inventories current to within
five (5) days of the date of this Agreement.
3.13
Real Property .
(a)
Seller does not own any interest in real property.
(b)
The real property described on Schedule 3.13(b) (the “
Leased Real Property ”) constitutes the only real
property leased by Seller as tenant or otherwise occupied or used
by Seller in the conduct of the Business. The Leased Real
Property, including buildings, fixtures and other improvements
thereon, are in good operating condition and repair, ordinary wear
and tear excepted, and is not in need of repair other than as part
of routine maintenance in the ordinary course of business. To
the Knowledge of Seller and the Seller Members, all buildings,
structures, improvements and fixtures on the Leased Real Property
are in material compliance with all Applicable Laws, including
Occupational Safety and Health Laws.
(c)
Seller has provided Buyer with a complete copy of the real property
lease for the Leased Real Property, including all amendments and
supplements thereto (the “ Real Property Lease
”). Seller has not entered into any agreement,
arrangement or understanding with any landlord (including any
predecessor landlord) under the Real Property Lease, written or
oral, that in any way alters or affects the express terms and
conditions of such Real Property Lease. The legal and other
descriptions of Leased Real Property contained in each Real
Property Lease are accurate and complete.
(d)
Seller has a valid and enforceable leasehold interest under the
Real Property Lease, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of
whether enforcement is sought in a Proceeding at law or in
equity). Seller has not granted to any Person any sublease,
license, easement or other right to use or access any part of the
Leased Real Property, nor has Seller suffered to exist any
unauthorized use or occupancy of any part of the Leased Real
Property by any Person. The Real Property Lease is in full
force and effect, and Seller is not in default thereunder, and no
condition exists that with notice or lapse of time, or both, would
constitute a default by Seller under the Real Property Lease.
To the Knowledge of Seller and the Seller Members, no other party
to the Real Property Lease is in default thereunder or has
exercised any termination right with respect thereto. No
notice of default or notice of termination has been received by
Seller with respect to the Real Property Lease that has not been
withdrawn or canceled.
(e)
To the Knowledge of Seller and the Seller Members, there does not
exist any actual, threatened or contemplated condemnation or
eminent domain Proceeding that affects or could be reasonably
expected to affect the Leased Real Property or any part
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thereof, and Seller has
not received any written notice of the intention of any
Governmental Authority to undertake any such Proceeding.
(f)
Seller has not made any alteration or caused any damage to the
Leased Real Property, ordinary wear and tear excepted, that was not
consented to by the applicable landlord and that has resulted in or
could reasonably be expected to result in any claim by such
landlord against Seller or, following the Closing, Buyer for
repair, replacement, remediation, reimbursement or other remedies
available to such landlord under the Real Property Lease or under
Applicable Law. Seller does not currently have, nor has it
had within the past twelve (12) months, any ongoing dispute or
disagreement with any landlord in respect of any obligation of
Seller, or such landlord under the Real Property Lease where such
dispute has not been fully resolved and settled as of the date
hereof.
3.14
Accounts Receivable . All Accounts Receivable that are
reflected in the Financial Statements or in the accounting records
of Seller as of the date hereof represent valid obligations arising
from sales actually made or services actually performed by Seller
in the ordinary course of business. Except to the extent paid
before the Closing Date, and except as set forth on Schedule
3.14 , such Accounts Receivable are or shall be as of the
Closing Date current and collectible net of the respective reserves
shown o
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