Exhibit 10bw
ASSET PURCHASE AGREEMENT
by
and between
WILLIAMS ADVANCED MATERIALS INC.
and
TECHNI-MET, INC.
Dated as of December 20, 2007
TABLE OF CONTENTS
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ARTICLE 1:
DEFINITIONS
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ARTICLE 2:
PURCHASE AND SALE OF ASSETS
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2.1 Assets to be
Transferred
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2.2 Retained
Assets
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ARTICLE 3:
LIABILITIES
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3.1 Assumed
Liabilities
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3.2 Retained
Liabilities
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ARTICLE 4:
PURCHASE PRICE
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4.1 Purchase
Price
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4.2 Closing
Payments
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4.3 Estimated
Closing Date Adjustments
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4.4 Definitive
Purchase Price Adjustments
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4.5 Allocation of
Purchase Price
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ARTICLE 5:
CLOSING
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5.1 Closing
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5.2 Deliveries by
the Seller
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5.3 Deliveries by
the Purchaser
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ARTICLE 6:
REPRESENTATIONS AND WARRANTIES OF THE SELLER
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6.1 Existence and
Good Standing
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6.2 Power
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6.3
Enforceability
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6.4 No
Conflict
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6.5 Consents
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6.6 Real
Property
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6.7 Personal
Property
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6.8 Necessary
Property
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6.9
Litigation
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6.10 Compliance
with Laws and Orders
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6.11 Conduct of
Business
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6.12 Labor
Matters
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6.13 Employee
Benefit Plans
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6.14
Environmental
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6.15
Contracts
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6.16 Permits
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6.17 Intellectual
Property
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6.18 Financial
Statements
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6.19 Accounts
Receivable and Inventory
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-i-
TABLE OF CONTENTS
(continued)
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6.20 Taxes
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6.21 Customers and
Suppliers
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6.22
Insurance
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6.23 Product
Liability and Warranty
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6.24 Related Party
Transactions
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6.25 Brokers
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ARTICLE 7:
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
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7.1 Existence and
Good Standing
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7.2 Power
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7.3
Enforceability
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7.4 No
Conflict
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7.5 Consents
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7.6 Brokers
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7.7
Financing
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7.8
Litigation
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7.9 Financial
Statements
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ARTICLE 8:
COVENANTS AND AGREEMENTS
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8.1 Access to
Information
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8.2 Conduct of
Business in Normal Course
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8.3 Notification
of Certain Matters
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8.4 Assignments
and Consents; Nonassignable Contracts
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8.5 Tax
Matters
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8.6
Exclusivity
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8.7 HSR
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8.8 Further
Assurances
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8.9 Name Change
Filings
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8.10 Certain
Payments
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8.11 Employee and
Employee Benefit Plan Matters
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8.12 Certain
Environmental Investigations
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ARTICLE 9: CLOSING
CONDITIONS
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9.1 Conditions to
All Parties’ Obligations
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9.2 Conditions to
the Purchaser’s Obligations
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9.3 Conditions to
the Seller’s Obligations
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ARTICLE 10:
TERMINATION
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10.1 Right to
Terminate
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10.2 Effect of
Termination
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10.3 Failure to
Terminate
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ARTICLE 11:
REMEDIES
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-ii-
TABLE OF CONTENTS
(continued)
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11.1 General
Indemnification Obligation
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11.2 Notice and
Opportunity to Defend
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11.3
Survivability; Limitations
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11.4 Specific
Performance
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11.5 Exclusive
Remedy
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ARTICLE 12:
MISCELLANEOUS
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12.1 Press Release
and Announcements
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12.2
Expenses
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12.3 No
Assignment
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12.4
Headings
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12.5 Integration,
Modification and Waiver
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12.6
Construction
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12.7
Severability
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12.8 Notices
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12.9 Governing
Law
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12.10
Counterparts
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-iii-
TABLE OF EXHIBITS
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Exhibit A
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Escrow Agreement |
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Exhibit B
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Balance Sheet |
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Exhibit C
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Bill of Sale |
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Exhibit D
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Assumption Agreement |
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Exhibit E
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Non-Competition Agreement |
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Exhibit F
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Trademark Assignment |
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Exhibit G
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Domain Name Assignment |
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Exhibit H
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Patent Assignment |
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Exhibit I
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Employment Agreement |
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Exhibit J
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Guaranty |
-iv-
ASSET PURCHASE AGREEMENT
THIS
ASSET PURCHASE AGREEMENT (this “ Agreement
”), dated as of this 20 th day of
December, 2007, is by and between Williams Advanced Materials Inc.,
a New York corporation (the “ Purchaser
”), and Techni-Met, Inc., a Connecticut corporation (the
“ Seller ”).
RECITALS
A. The
Seller is engaged in the business of manufacturing precision coated
materials, including the vacuum deposition of inorganic materials
onto flexible polymeric films (the “ Business
”);
B.
J&M Equipment Leasing, LLC, a Connecticut limited liability
company (“ J&M Equipment ”), has
entered into a Purchase and Sale Agreement dated as of the date of
this Agreement (the “ J&M Equipment
Agreement ”) pursuant to which J&M Equipment will
sell to the Seller the equipment currently leased by J&M
Equipment to the Seller, as more particularly described
below;
C. The
Purchaser desires to purchase from the Seller, and the Seller
desires to sell to the Purchaser, all of its right, title and
interest in and to the Purchased Assets (as hereinafter
defined);
D. The
Seller desires to transfer to the Purchaser, and the Purchaser
desires to accept and assume from the Seller, the Assumed
Liabilities (as hereinafter defined); and
NOW,
THEREFORE, in consideration of the mutual promises and
representations and subject to the terms and conditions herein
contained, and other good and valuable consideration, had and
received, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, the parties hereto
agree as follows:
ARTICLE 1: DEFINITIONS
“
Acquisition Proposal ” has the meaning set
forth in Section 8.6 .
“
Affiliate ” of any Person means any Person
directly or indirectly controlling, controlled by, or under common
control with, any such Person and any officer, director or
controlling person of such Person.
“
Ancillary Agreements ” means the Escrow
Agreement, the Bill of Sale, the Assumption Agreement, the
Non-Competition Agreement, the Leases and each agreement, document,
instrument or certificate contemplated by this Agreement to be
executed by the Purchaser or the Seller in connection with the
consummation of the transactions contemplated by this Agreement, in
each case only as applicable to the relevant party or parties to
such Ancillary Agreement, as indicated by the context in which such
term is used.
“
Agreed Accounting Principles ” has the meaning
set forth in Section 4.3(b) .
“
Agreement ” has the meaning set forth in the
preamble.
“
Arbitration Firm ” means KPMG, or if such firm
is unable to or unwilling to act in such capacity, the Arbitration
Firm will be such other firm selected by an agreement of the
Purchaser and the Seller.
“
Assumed Contracts ” has the meaning set forth
in Section 2.1(g) .
“
Assumed Liabilities ” has the meaning set forth
in Section 3.1 .
“
Assumption Agreement ” has the meaning set
forth in Section 5.2(c) .
“
Balance Sheet ” has the meaning set forth in
Section 3.1(a) .
“
Book Value Precious Metal Inventory ” means the
book value of the Seller’s Precious Metal inventory used to
calculate the Estimated NWC.
“
Brush ” means Brush Engineered Materials, Inc.,
an Ohio corporation.
“
Business ” has the meaning set forth in the
Recitals.
“
Claims Notice ” has the meaning set forth in
Section 11.2(a) .
“
Closing ” has the meaning set forth in
Section 5.1 .
“
Closing Date ” has the meaning set forth in
Section 5.1 .
“
Closing FMV Precious Metal Inventory ” has the
meaning set forth in Section 4.4(a) .
“
Closing Purchase Price ” has the meaning set
forth in Section 4.2 .
“
Closing Working Capital ” has the meaning set
forth in Section 4.4(a) .
“
Code ” means the Internal Revenue Code of 1986,
as amended.
“
Confidentiality Agreement ” means that certain
Confidentiality Agreement dated August 14, 2006 between Brush
and the Seller.
“
Consents ” has the meaning set forth in
Section 8.4(a) .
“
Contract ” has the meaning set forth in
Section 6.15 .
“
Controlled Group ” has the meaning set forth in
Section 6.13(a) .
“
Deductible ” has the meaning set forth in
Section 11.3(b) .
“
Employee Benefit Plans ” has the meaning set
forth in Section 6.13(a) .
“
Employment Agreements ” has the meaning set
forth in Section 5.2(m) .
2
“
Environment ” means soil, surface water,
groundwater, air, land, stream sediments and surface or subsurface
strata.
“
Environmental Condition ” means (a) any
condition of the Environment with respect to the Leased Real
Property arising, existing or occurring prior to the Closing Date,
(b) with respect to any real property previously owned, leased
or operated by the Seller in connection with the Business to the
extent such condition existed or occurred at the time of such
ownership, lease or operations, or (c) with respect to any
other Real Property at which any Hazardous Material generated by
the operation of the Business prior to the Closing Date has been
treated, stored or disposed of, which, in the case of any of (a),
(b) or (c), violates any Environmental Law, or even though not
violative of any Environmental Law, nevertheless results in any
Release or Threat of Release.
“
Environmental Law ” means any Law or common law
relating to health and safety or protection of the Environment,
Releases of Hazardous Materials or injury to persons relating to
Releases of Hazardous Materials, as the same exists as of the
Closing Date.
“
ERISA ” means the Employee Retirement Income
Security Act of 1974, as amended.
“
Escrow Agreement ” means that certain escrow
agreement, dated as of the Closing Date, by and among the
Purchaser, the Seller, and JPMorgan Chase Bank (the “
Escrow Agent ”), in substantially the form
attached hereto as Exhibit A .
“
Escrow Amount ” means $9,000,000.
“
Estimated FMV Precious Metal Inventory ” has
the meaning set forth in Section 4.3(c) .
“
Estimated NWC ” has the meaning set forth in
Section 4.3(b) .
“
Estimated NWC Adjustment ” has the meaning set
forth in Section 4.3(b) .
“
Estimated NWC Statement ” has the meaning set
forth in Section 4.3(b) .
“
Excluded Representations ” means the
representations and warranties contained in Sections
6.1 (Existence and Good Standing), 6.2
(Power), 6.3 (Enforceability), the second sentence of
Section 6.6(b) (Real Property), the second
sentence of Section 6.7 (Personal Property), the
first sentence of Section 6.17(b) (Intellectual
Property), 6.20 (Taxes) and 6.25
(Brokers).
“
Expiration Date ” has the meaning set forth in
Section 11.3(a) .
“
Fair Market Value ”, with respect to any
Precious Metal, means the bank spot price therefor as quoted by
Scotia Bank for the time of Closing.
“
Final Purchase Price ” means an amount equal to
the Closing Purchase Price as adjusted to reflect the differences,
if any, between (a) Estimated NWC and Closing Working Capital
and (b) Closing FMV Precious Metal Inventory and Estimated FMV
Precious Metal
3
Inventory, and as further adjusted in accordance with
Section 8.5(b) . For clarification purposes, in
calculating the Final Purchase Price, in addition to any
adjustments required pursuant to Section 8.5(b)
, the Closing Purchase Price shall be (x) increased dollar for
dollar to the extent (1) Closing Working Capital exceeds the
Estimated NWC and (2) Closing FMV Precious Metal Inventory exceeds
Estimated FMV Precious Metal Inventory and (y) decreased dollar for
dollar to the extent (1) the Estimated NWC exceeds Closing
Working Capital and (2) Estimated FMV Precious Metal Inventory
exceeds Closing FMV Precious Metal Inventory.
“
Financial Statements ” has the meaning set
forth in Section 6.18(a) .
“
GAAP ” means U.S. generally accepted accounting
principles as they exist as of the date of this Agreement.
“
Governmental Authority ” means any government
or political subdivision or regulatory body, whether federal,
state, local or foreign, or any agency or instrumentality of any
such government or political subdivision or regulatory authority,
or any federal state, local or foreign court or arbitrator.
“
Gross Purchase Price ” has the meaning set
forth in Section 4.1 .
“
Guarantee ” by any Person means any obligation,
contingent or otherwise, of such Person directly or indirectly
guaranteeing or otherwise supporting in whole or in part the
payment of any Indebtedness or other obligation of any other Person
and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such
Person (a) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or other obligation
of such other Person (whether arising by virtue of partnership
arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (b) entered into for the
purpose of assuring in any other manner the obligee of such
Indebtedness or other obligations of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or
in part). The term “Guarantee” used as verb has a
correlative meaning.
“
Hazardous Material ” means any pollutant, toxic
substance (including friable asbestos), hazardous waste, hazardous
material, hazardous substance, contaminant, petroleum and
petroleum-containing materials, radiation and radioactive
materials, leaded paints, toxic mold and any other harmful
biological agents, and polychlorinated biphenyls as defined in, the
subject of, or that could give rise to liability under, any
Environmental Law.
“
HSR Act ” means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder.
“
Indebtedness ” of any Person means: either
(a) any liability of any Person other than an account payable
(i) for borrowed money (including the current portion
thereof), or (ii) under any reimbursement obligation relating
to a letter of credit, bankers’ acceptance or note purchase
facility, or (iii) evidenced by a bond, note, debenture or
similar instrument (including a purchase money obligation), or
(iv) under interest rate swap, hedging or similar agreements,
or (b) any liability of others described in the preceding
clause (a) that such Person has Guaranteed, that is recourse
to such Person or any of its assets or that is otherwise its legal
liability or that is
4
secured
in whole or in part by the assets of such Person. For purposes of
this Agreement, Indebtedness includes (A) any and all accrued
interest, success fees, prepayment premiums, make-whole premiums or
penalties, and fees or expenses actually incurred (including
attorneys’ fees) associated with the prepayment of any
Indebtedness, and (B) any and all amounts owed by the Seller
to any of its Affiliates.
“
Indemnified Party ” has the meaning set forth
in Section 11.2(a) .
“
Indemnifying Party ” has the meaning set forth
in Section 11.2(a) .
“
Information Systems ” means all computer
hardware, databases and data storage systems, computer, data,
database and communications networks (other than the Internet),
architecture interfaces and firewalls (whether for data, voice,
video or other media access, transmission or reception) and other
apparatus used to create, store, transmit, exchange or receive
information in any form. The foregoing notwithstanding, the
Seller’s Information Systems do not include any wiring
contained within or appended to the walls of any building located
on the Leased Real Property.
“
Intellectual Property ” means any and all
patents and patent applications; trademarks, trade names,
fictitious business names, service marks, certification marks,
collective marks, Internet domain names and uniform resource
locators, and other proprietary rights to words, names, slogans,
symbols, logos, devices, sounds, other things or combination
thereof used to identify, distinguish and indicate the source or
origin of goods or services and the goodwill associated with the
foregoing; inventions, discoveries, ideas, processes, designs,
models, formulae, patterns, compilations, programs, devices,
methods, techniques, processes, know-how, proprietary information,
customer lists, software code, technical information, data and
databases, drawings and blueprints, trade secrets and all
information and materials that would constitute a trade secret
under applicable law; copyrights, copyrightable works, mask work
rights and rights in databases, data collections and software; all
other intellectual property rights and foreign equivalent or
counterpart rights and forms of protection of a similar or
analogous nature or having similar effect in any jurisdiction
throughout the world; all registrations and applications for
registration of the foregoing; and any provisionals, renewals,
extensions, continuations, divisionals, reexaminations or reissues
or equivalent or counterpart of the foregoing.
“
Interim Financial Statements ” has the meaning
set forth in Section 6.18(a) .
“
Inventory Excess ” has the meaning set forth in
Section 4.3(c) .
“
Inventory Shortfall ” has the meaning set forth
in Section 4.3(c) .
“
IRS ” means the Internal Revenue Service.
“
J&M Equipment ” has the meaning set forth
in the Recitals.
“
J&M Equipment Agreement ” has the meaning
set forth in the Recitals.
“
Key Employees ” has the meaning set forth in
Section 5.2(m) .
5
“
Knowledge of the Seller ” means the actual
knowledge of any of Jerome M. Scharr, Michael J. Scharr, Jeffrey
Bouchard or Robert Newton, in each case after due inquiry.
“
Law ” means any law, statute, code, ordinance,
rule, regulation or other requirement of any Governmental
Authority.
“
Leased Real Property ” means the Real Property
located at 300 Lamberton Road, Windsor, Connecticut (the “
Windsor Property ”) and Building 30, 30 East
Newbury Road, Bloomfield, Connecticut (the “ Bloomfield
Property ”).
“
Leases ” has the meaning set forth in
Section 5.2(l) .
“
Liability Claim ” has the meaning set forth in
Section 11.2(a) .
“
Lien ” means any mortgage, lien, pledge,
encumbrance, security interest, claim, charge or defect in
title.
“
Litigation Conditions ” has the meaning set
forth in Section 11.2(b) .
“
Losses ” has the meaning set forth in
Section 11.1(a) .
“
Material Adverse Effect ” means any change or
effect having a material adverse effect on the Seller, the
Business, the Purchased Assets or the liabilities, results of
operations, condition (financial or otherwise), prospects or
employee or customer relations of the Seller; provided ,
however, that no adverse change, effect, event, occurrence, state
of facts or development (a) attributable to either conditions
affecting the industries as a whole in which the Seller
participates or the United States’ economy as a whole, in
each case except to the extent none of the Seller, the Business or
the Purchased Assets are disproportionately affected by such
change, effect, event, occurrence, state of facts or development or
(b) arising from or relating to compliance with the terms of,
or the taking of any action required by, this Agreement shall be
taken into account in determining whether there has been, or will
be, a Material Adverse Effect.
“
Material Customers ” has the meaning set forth
in Section 6.21(a) .
“
Material Suppliers ” has the meaning set forth
in Section 6.21(b) .
“
Net Working Capital ” means the amount by which
(a) the cash, receivables, inventory and other current assets
of the Seller included in the Purchased Assets exceeds
(b) the trade payables, customer deposits and accrued expenses
of the Seller included in the Assumed Liabilities.
“
Non-Competition Agreement ” has the meaning set
forth in Section 5.2(d) .
“
Objection Notice ” has the meaning set forth in
Section 4.4(b) .
“
Order ” means any order, judgment, injunction,
award, decree, ruling, charge or writ of any Governmental
Authority.
6
“
Ordinary Course of Business ” means the
ordinary and usual course of day-to-day operations of the Business
as conducted by the Seller consistent with past custom and practice
(including with respect to quantity and frequency), provided,
however, that any course of action taken by the Seller between
the execution of this Agreement and the completion of the Closing
which is required by or expressly contemplated by this Agreement
shall not be deemed to be out of the Ordinary Course of
Business.
“
Permit ” means any permit, license,
registration, approval, consent, or authorization issued by a
Governmental Authority.
“
Permitted Liens ” (a) Liens for current
Taxes that are not due and payable as of the Closing Date, and
(b) those matters described in Schedule 1.1
.
“
Person ” means any individual, sole
proprietorship, partnership, corporation, limited liability
company, unincorporated society or association, trust, Governmental
Authority or other entity.
“
Personal Property Taxes ” means personal
property Taxes and ad valorem Taxes with respect to the Purchased
Assets.
“
Precious Metal ” means gold, palladium,
platinum or silver.
“
Proceeding ” means any complaint, action,
lawsuit, hearing, investigation, charge, audit, claim or
demand.
“
Purchased Assets ” has the meaning set forth in
Section 2.1 .
“
Purchased Intellectual Property ” has the
meaning set forth in Section 2.1(f) .
“
Purchase Price ” has the meaning set forth in
Section 4.1 .
“
Purchaser ” has the meaning set forth in the
preamble.
“
Real Property ” means any and all of the
Seller’s real property and interests in real property,
including the Leased Real Property and any other subleaseholds,
purchase options, easements, licenses, rights to access and rights
of way and any other real property otherwise owned, occupied, or
used by the Seller in connection with the Business.
“
Real Property Taxes ” means real property
Taxes, ad valorem Taxes, general assessments and special
assessments with respect to the Leased Real Property.
“
Release ” means any releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, migrating, disposing or dumping of a
Hazardous Material into the Environment (including, without
limitation, the abandonment or discarding of barrels, containers
and other closed receptacles containing any Hazardous Materials)
and any condition that results in the exposure of a Person to a
Hazardous Material.
“
Retained Assets ” has the meaning set forth in
Section 2.2 .
7
“
Retained Liabilities ” has the meaning set
forth in Section 3.2 .
“
Returns ” means any report, return, declaration
or other information (including any related schedules or
statements) required to be filed or supplied to a Taxing
Authority.
“
Selling Expenses ” means all (a) unpaid
costs, fees and expenses of outside professionals incurred by the
Seller relating to the process of selling the Purchased Assets
whether incurred in connection with this Agreement or otherwise,
including, without limitation, all legal fees, accounting, tax and
investment banking fees and expenses, (b) bonuses payable to
employees, agents and consultants of and to the Seller as a result
of the transactions contemplated by this Agreement and unpaid by
the Seller as of the Closing Date and (c) severance
obligations owed by the Seller to employees, agents and consultants
of and to the Seller triggered prior to or as a result of the
transactions contemplated by this Agreement, including with respect
to clauses (b) and (c) the employer portion of any
payroll Taxes.
“
Seller ” has the meaning set forth in the
preamble.
“
Seller Basis of Accounting ” means the income
tax basis of accounting as consistently applied by the Seller in
the preparation of the Financial Statements.
“
Target Working Capital ” means $30,522,000
less an amount equal to any distribution made to the
Seller’s shareholders to fund their federal and state income
tax obligations on account of the Seller’s net income
generated during the fourth calendar quarter of 2007 calculated
without regard to any of the transactions contemplated
hereby.
“
Tax ” means (a) any net income,
alternative or add-on minimum tax, gross income, gross receipts,
sales, use, ad valorem, value added, transfer, franchise, profits,
license, withholding, payroll, employment, excise, severance,
stamp, occupation, premium, property, environmental or windfall
profit tax, custom, duty or other tax, governmental fee or other
like assessment or charge of any kind whatsoever, together with any
interest, penalty, addition to tax or additional amount imposed by
any Law or Taxing Authority, (b) any liability for the payment
of any amounts of any of the foregoing types as a result of being a
member of an affiliated, consolidated, combined or unitary group,
or being a party to any agreement or arrangement whereby liability
for payment of such amounts was determined or taken into account
with reference to the liability of any other entity, (c) any
liability for the payment of any of the foregoing amounts as a
result of being a party to any agreements or arrangements (whether
or not written) or with respect to the payment of any amounts of
any of the foregoing types as a result of any express or implied
obligation to indemnify any other Person, and (d) any
liability for the payment of any of the foregoing types as a
successor or transferee.
“
Taxing Authority ” means any Governmental
Authority responsible for the administration or imposition of any
Tax.
“
Threat of Release ” means a substantial
likelihood of a Release that requires action to prevent or mitigate
damage or injury to health, safety or the Environment that might
result from such Release.
“
Transferred Employees ” has the meaning set
forth in Section 8.11(a) .
8
“
Transfer Taxes ” has the meaning set forth in
Section 8.5(c) .
“
Working Capital Statement ” has the meaning set
forth in Section 4.4(a) .
ARTICLE 2: PURCHASE AND SALE OF ASSETS
2.1 Assets to be Transferred . On the
Closing Date, the Purchaser shall purchase from the Seller, and the
Seller shall sell, transfer, assign, convey and deliver to the
Purchaser, all of the Seller’s right, title and interest in
and to all assets, rights and properties of every nature, kind and
description, whether tangible or intangible, owned, leased or
licensed, real, personal or mixed used in or held for use in the
Business (collectively, the “ Purchased Assets
”) free and clear of all Liens other than Permitted Liens,
excluding the Retained Assets, and including, without limitation,
the following:
(a) all
cash and cash equivalents;
(b) all
accounts and notes receivable, including, without limitation, any
and all payments received with respect thereto after the Closing
Date;
(c) all
inventory, including raw materials, work-in-process and finished
goods;
(d) all
prepaid expenses and other current assets, including those set
forth on Schedule 2.1(d) ;
(e) all
personal property, including machinery, equipment, tools, dies,
cranes, fixtures, compressors, vehicles, furniture, computers and
maintenance parts, including, without limitation, the equipment
that is the subject of the J&M Equipment Agreement;
(f) all
Intellectual Property owned, held or used by the Seller, together
with all income, royalties, damages and payments due or payable as
of the Closing or thereafter (including, without limitation,
damages and payments for past, present or future infringements,
misappropriations or other violations thereof) and the rights to
sue, collect damages or otherwise enforce the same for past,
present or future infringements, misappropriations or other
violations thereof, and any corresponding, equivalent or
counterpart rights, title or interest that now exist or may be
secured hereafter anywhere in the world, and all copies and
tangible embodiments of the foregoing, including, without
limitation, the Intellectual Property listed on
Schedule 6.17(a) (all of the foregoing described
in this Section 2.1(f) collectively, the “
Purchased Intellectual Property ”);
(g)
Subject to Section 8.4 , (i) the Contracts
set forth on Schedule 2.1(g) , (ii) all purchase
and sale orders arising in the Ordinary Course of Business and
(iii) all Contracts, purchase orders and sale orders entered
into between the date hereof and the Closing Date in compliance
with Section 8.2 (collectively, the “
Assumed Contracts ”);
9
(h) all
Permits, franchises, certificates of authority, certificates of
occupancy, and building, safety, fire and health approvals, or any
waiver of any of the foregoing, issued to the Seller by any
Governmental Authority to the extent transferable to the Purchaser;
and
(i)
except for the corporate minute books, stock records and tax
records of the Seller, all business and employment records of the
Seller, including, without limitation, all books, records, ledgers,
files, documents, but excluding any “personnel file” or
“medical records” as such terms are defined in Sec.
31-128a of the Connecticut General Statutes, as amended; warranties
for all machinery and equipment included in the Purchased Assets
and guarantees from all manufacturers and suppliers relating to any
of the Purchased Assets, to the extent transferable; and
correspondence, lists (including, without limitation, customer
lists, in whatever form or medium), plats, drawings, photographs,
creative materials, advertising and promotional materials, studies,
reports and other materials (in whatever form or medium), owned or
maintained by the Seller.
2.2 Retained Assets . Notwithstanding
anything in this Agreement to the contrary, the Seller shall retain
only the assets, rights and properties listed on
Schedule 2.2 (collectively, the “
Retained Assets ”). The Purchaser will in no
way be construed to have purchased or acquired (or to be obligated
to purchase or to acquire or have any right to purchase or acquire)
any interest whatsoever in any of the Retained Assets.
ARTICLE 3: LIABILITIES
3.1 Assumed Liabilities . On the
Closing Date, the Purchaser shall assume and become responsible
for, and shall thereafter pay, perform and discharge as and when
due only those liabilities of the Seller forth below (collectively,
the “ Assumed Liabilities ”):
(a)
(i) all liabilities and obligations of the Seller reflected on
the balance sheet dated as of October 31, 2007 (as attached
hereto as Exhibit B , the “ Balance
Sheet ”), but only to the extent that such
liabilities and obligations constitute trade payables, customer
deposits and accrued expenses (other than any accrued Indebtedness
of the Seller, Selling Expenses of the Seller, Taxes payable by the
Seller, accrued liabilities owed to employees of the Seller except
to the extent set forth in Sections 8.
11(e)(i) and 8.11(f) and any accrued
liabilities owed to any of its Affiliates), (ii) all
liabilities and obligations of the Seller incurred since the date
of the Balance Sheet arising in the Ordinary Course of Business to
the extent that such liabilities and obligations relate to trade
payables, customer deposits and accrued expenses (other than any
accrued Indebtedness of the Seller, Selling Expenses of the Seller,
Taxes payable by the Seller, accrued liabilities owed to employees
of the Seller except to the extent set forth in
Sections 8. 11(e)(i) and
8.11(f) and any accrued liabilities owed to any of
its Affiliates), and (iii) any other liability or obligation
of the Seller to the extent taken into account in the determination
of Net Working Capital;
(b) all
liabilities and obligations of the Seller arising under or related
to the Assumed Contracts (including without limitation all
remaining obligations of the Seller to provide product to Nikko
Materials USA, Inc. (d/b/a Gould Electronics)
10
pursuant to
that certain Machine Interest Purchase Agreement dated as of
February 15, 2005 between Nikko Materials USA, Inc. and the
Seller); provided, however, that the Purchaser will not
assume or be responsible for any such liabilities or obligations to
be performed on or prior to the Closing Date (other than to the
extent the same constitute trade payables or accrued expenses
contemplated by Section 3.1(a) ) or that arise
from breaches of such Assumed Contracts by the Seller or defaults
under such Assumed Contracts by the Seller, all of which
liabilities and obligations constitute Retained Liabilities;
and
(c) The
obligations of the Seller with respect to the Transferred Employees
contemplated to be discharged by the Purchaser in
Sections 8. 11(e)(i) and
8.11(f) .
3.2 Retained Liabilities . The Assumed
Liabilities will not include, and the Purchaser will not assume,
any liability or obligation of the Seller unless such liability or
obligation is specifically identified in
Section 3.1 , and without in any way limiting
the generality of the foregoing the Assumed Liabilities will not
include the liabilities listed on Schedule 3.2
(collectively, the “ Retained Liabilities
”). The Retained Liabilities will be retained by and remain
the obligations of the Seller.
ARTICLE 4: PURCHASE PRICE
4.1 Purchase Price . In full consideration for
the Purchased Assets, the Purchaser shall (a) pay or cause to
be paid to the Seller an amount in cash equal to $84,300,000 (the
“ Gross Purchase Price ”), as adjusted in
accordance with this Article 4 and
Section 8.5(b) below and (b) assume the
Assumed Liabilities (collectively, the “ Purchase
Price ”).
4.2 Closing Payments . On the Closing Date and
subject to final adjustment in accordance with this
Article 4 , the Purchaser shall (a) pay or
cause to be paid to the Seller the Gross Purchase Price plus
any positive Estimated NWC Adjustment plus any Inventory
Excess less any negative Estimated NWC Adjustment
less any Inventory Shortfall (subject to further adjustment
as provided in Section 4.4 and Section
8.5(b) , the “ Closing Purchase Price
”) less the Escrow Amount and (b) assume the
Assumed Liabilities. On the Closing Date, the Purchaser shall pay,
or cause to be paid, the Escrow Amount into an escrow account
pursuant to the terms of the Escrow Agreement.
4.3 Estimated Closing Date Adjustments
.
(a) On
or about December 31, 2007 the parties shall mutually conduct
a physical inventory of all of the Seller’s inventory as it
exists as of such date. The results of such physical inventory
shall be rolled forward from such date to the Closing Date to
account for inventory acquired, created, consumed and sold by the
Seller during such period in the manner identified on
Schedule 4.3(a) .
(b) On
the Closing Date the Seller shall in good faith prepare and deliver
to the Purchaser a statement (the “ Estimated NWC
Statement ”) setting forth an estimated calculation
of the Net Working Capital as of the close of business on the day
prior to the Closing Date (the “ Estimated NWC
”) and of the amount obtained by
11
subtracting the
Estimated NWC minus the Target Working Capital (the “
Estimated NWC Adjustment ”). The Estimated NWC
Statement must be prepared in accordance with the “
Agreed Accounting Principles ,” which will
consist of the Seller Basis of Accounting and the principles set
forth on Schedule 4.3(b) ; provided that
to the extent that the Seller Basis of Accounting and the
principles set forth on Schedule 4.3(b)
conflict, the principles set forth on
Schedule 4.3(b) will control. If the Estimated
NWC Adjustment is a negative number, the Gross Purchase Price will
be reduced by the amount of the Estimated NWC Adjustment, subject
to further adjustment as provided in
Sections 4.3(c) , 4.4 and
8.5(b) . If the Estimated NWC Adjustment is a
positive number, the Gross Purchase Price will be increased by the
amount of the Estimated NWC Adjustment, subject to further
adjustment as provided in Sections 4.3(c) ,
4.4 and 8.5(b) .
(c) On
the Closing Date the Seller and the Purchaser shall mutually agree
on a good faith estimate of the Fair Market Value of the Precious
Metal in the Seller’s inventory as of the close of business
on the day prior to the Closing Date (the “ Estimated
FMV Precious Metal Inventory ”). If the Estimated FMV
Precious Metal Inventory is less than the Book Value Precious Metal
Inventory, as identified on the Estimated NWC Statement, the Gross
Purchase Price will be reduced by the amount of such shortfall (the
“ Inventory Shortfall ”), subject to
further adjustment as provided in Sections 4.4
and 8.5(b) . If the Estimated FMV Precious Metal
Inventory is greater than the Book Value Precious Metal Inventory,
as identified on the Estimated NWC Statement, the Gross Purchase
Price will be increased by the amount of such excess (the “
Inventory Excess ”), subject to further
adjustment as provided in Sections 4.4 and
8.5(b) .
4.4 Definitive Purchase Price Adjustments
.
(a)
Within 90 days after the Closing Date, the Purchaser shall
prepare and deliver to the Seller a working capital statement (the
“ Working Capital Statement ”), setting
forth (i) the calculation of the Net Working Capital as of the
close of business on the day prior to the Closing Date (the “
Closing Working Capital ”) and (ii) the
Fair Market Value of the Seller’s Precious Metal inventory as
of the Closing (“ Closing FMV Precious Metal
Inventory ”). The Working Capital Statement must be
prepared in accordance with the Agreed Accounting Principles.
(b)
Within 30 days following receipt by the Seller of the Working
Capital Statement, the Seller shall deliver written notice (an
“ Objection Notice ”) to the Purchaser of
any dispute it has with respect to the preparation or content of
such statement. An Objection Notice must describe in reasonable
detail the items contained in the Working Capital Statement that
the Seller disputes and the basis for any such disputes. Any items
not disputed in the Objection Notice will be deemed to have been
accepted by the Seller. If the Seller does not deliver an Objection
Notice with respect to the Working Capital Statement within such
30 day period, such statement will be final, conclusive and
binding on the parties. In the event that the Seller delivers a
timely Objection Notice, the Purchaser and the Seller shall
negotiate in good faith to resolve such dispute. If the Purchaser
and the Seller, notwithstanding such good faith effort, fail to
resolve such dispute within 30 days after the Seller delivers
an Objection Notice, then the Purchaser and the Seller, jointly,
shall engage the Arbitration Firm to resolve such
12
dispute. As
promptly as practicable thereafter (and, in any event, within
15 days after the Arbitration Firm’s engagement), the
Seller shall submit any unresolved elements of its objection to the
Arbitration Firm in writing (with a copy to the Purchaser),
supported by any documents and arguments upon which it relies. As
promptly as practicable thereafter (and, in any event, within
15 days following the Seller’s submission of such
unresolved elements), the Purchaser shall submit its response to
the Arbitration Firm (with a copy to the Seller) supported by any
documents and arguments upon which it relies. The Purchaser and the
Seller shall request that the Arbitration Firm render its
determination within 15 days following its receipt of the
Purchaser’s response. The scope of the disputes to be
resolved by the Arbitration Firm is limited to the unresolved items
in the Objection Notice. In resolving any disputed item, the
Arbitration Firm may not assign a value to any item greater than
the greatest value claimed for such item by either party or less
than the smallest value claimed for such item by either party. All
determinations made by the Arbitration Firm will be final,
conclusive and binding on the parties. The Purchaser and the Seller
shall share equally the fees and expenses of the Arbitration
Firm.
(c) For
purposes of complying with the terms set forth in this
Section 4.4 , each party shall cooperate with
and make available to the other party and its representatives all
relevant information, records, data and working papers, and shall
permit access to its facilities and personnel, as may be reasonably
required in connection with the preparation and analysis of the
Working Capital Statement and the resolution of any disputes
thereunder.
(d) If
the Final Purchase Price (as finally determined pursuant to
Section 4.4(b) ) is less than the Closing
Purchase Price, then the Seller shall pay to the Purchaser by means
of a wire transfer of immediately available funds to an account
designated in writing by the Purchaser an amount in cash equal to
such shortfall. Such payment must be made within five business days
of the date on which Final Purchase Price is finally determined
pursuant to Section 4.4(b) .
(e) If
the Final Purchase Price (as finally determined pursuant to
Section 4.4(b) ) is greater than the Closing Purchase
Price, then the Purchaser shall pay to the Seller by means of a
wire transfer of immediately available funds to an account
designated in writing by the Seller an amount in cash equal to such
excess. Such payment must be made within five business days of the
date on which Final Purchase Price is finally determined pursuant
to Section 4.4(b) .
4.5 Allocation of Purchase Price . The
Purchase Price (including the Assumed Liabilities included in the
amount realized for federal income tax purposes) will be allocated
among the Purchased Assets in accordance with their fair market
values as determined using the methodology set forth on
Schedule 4.5 attached hereto, which the parties
agree complies with Section 1060 of the Code. Each of the
parties hereto shall report the purchase and sale of the Purchased
Assets and the Assumed Liabilities in accordance with the fair
market values determined pursuant to
Schedule 4.5 for all income Tax purposes. The
Purchaser and the Seller shall each adopt and utilize the fair
market values determined pursuant to Schedule 4.5 for
purposes of filing IRS Form 8594 and all other Returns filed
by each of them (unless otherwise required by Law), and neither of
them will voluntarily take any position inconsistent therewith upon
examination of any such Return, in any Proceeding or otherwise with
respect to such
13
Returns.
The Purchaser and the Seller each agree to provide the other
promptly with any other information required to complete
Form 8594. Schedule 4.5 shall be amended in
accordance with applicable Law as the parties jointly agree in
writing.
ARTICLE 5: CLOSING
5.1 Closing . The closing of the transactions
contemplated hereby (the “ Closing ”)
will take place at the offices of Jones Day, 901 Lakeside Avenue,
Cleveland, Ohio not later than the fifth business day after which
the last of the conditions set forth in
Article 9 have been satisfied or waived (other
than those conditions that are to be satisfied at the Closing) or
on such other date or at such other location that the Purchaser and
the Seller agree to in writing (the “ Closing
Date ”).
5.2 Deliveries by the Seller . On the
Closing Date, the Seller shall deliver to the Purchaser the
following items:
(a) the
Escrow Agreement, duly executed by the Seller;
(b) the
Bill of Sale, in substantially the form attached hereto as
Exhibit C , duly executed by the Seller;
(c) an
assumption agreement, in substantially the form attached hereto as
Exhibit D (the “ Assumption
Agreement ”), duly executed by the Seller;
(d) a
non-competition agreement, in substantially the form attached
hereto as Exhibit E (the “
Non-Competition Agreement ”), duly executed by
the shareholders of the Seller;
(e)
possession of the Purchased Assets;
(f) a
reasonably current certificate of legal existence of the Seller
issued by the Secretary of State of its state of
incorporation;
(g)
copies of resolutions of the board of directors and shareholders of
the Seller approving the execution and delivery of this Agreement
and the Ancillary Agreements to which the Seller is to be a party,
and the consummation of the transactions contemplated hereby and
thereby, certified by an officer of the Seller;
(h)
appropriate termination statements under the Uniform Commercial
Code and other instruments as may be requested by the Purchaser to
extinguish all Liens on the Purchased Assets, in each case other
than the Permitted Liens;
(i) a
certificate in form and substance satisfactory to the Purchaser
executed by the Seller certifying that it is not a “foreign
person” as defined in Section 1445 of the Code;
(j) all
consents, assignments and approvals from, and all necessary filings
with and notices to, any Person set forth on
Schedule 5.2(j) , in each case in a form
reasonably satisfactory to the Purchaser;
14
(k)
assignments transferring to the Purchaser the Purchased
Intellectual Property, in substantially the forms attached hereto
as Exhibit F (Trademark Assignment),
Exhibit G (Domain Name Assignment) and
Exhibit H (Patent Assignment);
(l)
leases for the Windsor Property and the Bloomfield Property that
are structured at market rates, in a form mutually acceptable to
the Purchaser and the lessors (collectively, the “
Leases ”), duly executed by J & M Real
Estate Leasing, LLC (in the case of the Windsor Property) and JMS
Newberry, LLC (in the case of the Bloomfield Property);
(m)
employment agreements by and between the Purchaser and each of
Robert Newton and Jeffrey Bouchard (the “ Key
Employees ”), in substantially the form attached
hereto as Exhibit I (the “
Employment Agreements ”), duly executed by each
of the Key Employees;
(n) a
guaranty, in substantially the form attached hereto as
Exhibit J , by each of the shareholders of the
Seller agreeing to guaranty the Seller’s indemnity
obligations contained in this Agreement;
(o)
certificates of title to all motor and other titled vehicles
included in the Purchased Assets, duly endorsed for transfer to the
Purchaser as of the Closing Date;
(p) the
certificates required by Sections 9.2(a) and
9.2(b) ;
(q)
evidence satisfactory to the Purchaser that the Seller has waived
all of its rights to enforce the noncompetition provisions
contained in the following agreements: (i) Amended and
Restated Incentive Unit Agreement with Robert Newton,
(ii) Amended and Restated Incentive Unit Agreement with
Jeffrey Bouchard, and (iii) Confidentiality, Noncompete and
Nondisclosure Agreements signed by each of the Transferred
Employees; and
(r)
such other documents and instruments as the Purchaser reasonably
requests to consummate the transactions contemplated hereby.
5.3 Deliveries by the Purchaser . On
the Closing Date, the Purchaser shall deliver to the Seller the
following items:
(a) the
Closing Purchase Price;
(b) the
Escrow Agreement, duly executed by the Purchaser (or its Affiliate)
and the Escrow Agent, with the Escrow Amount paid to the Escrow
Agent;
(c) the
Bill of Sale, duly executed by the Purchaser (or its
Affiliate);
(d) the
Assumption Agreement, duly executed by the Purchaser (or its
Affiliate);
15
(e) the
Non-Competition Agreement, duly executed by the Purchaser (or its
Affiliate);
(f) the
Leases, duly executed by the Purchaser (or its Affiliate);
(g) the
Employment Agreements, duly executed by the Purchaser (or its
Affiliate);
(h) the
certificates required by Sections 9.3(a) and
9.3(b) ; and
(i)
such other documents and instruments as the Seller reasonably
requests to consummate the transactions contemplated hereby.
ARTICLE 6: REPRESENTATIONS AND WARRANTIES OF THE
SELLER
The
Seller represents and warrants to the Purchaser as follows:
6.1 Existence and Good Standing . The
Seller is a corporation duly incorporated, validly existing and in
good standing under the laws of its state of incorporation and is
duly qualified to do business as a foreign corporation and is in
good standing in the jurisdictions set forth on
Schedule 6.1 , which are the only jurisdictions
in which the Seller is required to be so qualified. The Seller has
delivered to the Purchaser true, correct and complete copies of its
organizational documents, each as currently in effect and
reflecting any and all amendments thereto through the Closing Date.
Such organizational documents are in full force and effect and the
Seller is not in violation of any provision thereof.
6.2 Power . The Seller has the
requisite power and authority to (a) own, operate and lease
its properties and assets as and where currently owned, operated
and leased, and (b) carry on its business as currently
conducted. The Seller has the requisite power and authority to
execute, deliver and perform fully its obligations under this
Agreement and the Ancillary Agreements. No further action on the
part of the Seller is or will be required in order for the Seller
to have the requisite corporate power and authority in connection
with the transactions contemplated by this Agreement or the
Ancillary Agreements.
6.3 Enforceability . The Seller’s
execution, delivery and performance of this Agreement and the
Ancillary Agreements, and the consummation by the Seller of the
transactions contemplated hereby and thereby, have been duly and
validly authorized by all necessary board of director and
shareholder action on the part of the Seller, and constitute the
valid and legally binding obligations of the Seller enforceable
against the Seller in accordance with their terms.
6.4 No Conflict . Except as set forth
on Schedule 6.4 , neither the Seller’s
execution of this Agreement or the Ancillary Agreements, nor the
performance by the Seller of its obligations hereunder or
thereunder will (a) violate or conflict with the
Seller’s organizational documents or any Law or Order,
(b) violate, conflict with or result in a breach or
termination of, or otherwise give any Person additional rights or
compensation under, or the right to terminate or accelerate, or
constitute (with notice or lapse of time, or both) a default under
the terms of any note, deed, lease, instrument, security agreement,
mortgage, commitment, contract, agreement,
16
license
or other instrument or oral understanding to which the Seller is a
party or by which any of the Purchased Assets are bound, or
(c) result in the creation or imposition of any Lien with
respect to, or otherwise have an adverse effect upon, any of the
Purchased Assets.
6.5 Consents . Except as set forth on
Schedule 6.5 , no consent, approval or
authorization of, or any notice to, any Person is required in
connection with the execution and delivery by the Seller of this
Agreement or the Ancillary Agreements or the consummation by the
Seller of the transactions contemplated hereby or thereby.
6.6 Real Property .
(a) The
Seller does not own any real property.
(b) The
Leased Real Property constitutes all Real Property used or occupied
for the operation of the Business. The Seller has a valid and
enforceable leasehold interest in all of the Leased Real Property.
No portion of the Leased Real Property is leased or subleased to
any third party, and no third party is in possession of any of the
Leased Real Property. The Seller has provided the Purchaser with
accurate, correct and complete copies of all written leases and
other agreements relating to the Leased Real Property, including
all amendments related thereto, and through the notes to the
Financial Statements summaries of the material terms of all
un-written arrangements with respect to the Leased Real Property.
The Seller is in peaceable possession of the Leased Real
Property.
(c)
None of the Leased Real Property is subject to any easements,
rights of way, licenses, grants, building or use restrictions,
exceptions, reservations, limitations or other impediments which
materially and adversely affect the value to the Business of the
leasehold interest therein or which materially interfere with or
impair the present and continued use thereof in the usual and
normal conduct of the Business as currently conducted. Except as
set forth on Schedule 6.6(c) , the Leased Real
Property is in good condition and repair (subject to normal wear
and tear) and is sufficient for the operation of the Business as it
is currently conducted. Except as set forth on Schedule
6.6(c) , all of the Leased Real Property has been
maintained and repaired consistent with past practice in a manner
that is appropriate for the continued operation of the Business.
The Seller has not contracted for any material to be furnished or
labor to be performed in connection with any improvements located
on the Leased Real Property for which (i) such work has not
been completed, (ii) such material has not been furnished or
(iii) payment has not been made.
(d)
Neither the whole nor any portion of the Leased Real Property has
been condemned, requisitioned or otherwise taken by any public
authority, no notice of any such condemnation, requisition or
taking has been received and, to the Knowledge of the Seller, no
such condemnation, requisition or taking of the Leased Real
Property is threatened. There are no public improvements pending
or, to the Knowledge of the Seller, threatened that may result in
special assessments against or otherwise affecting the Leased Real
Property. Each building or other facility located at the Leased
Real Property currently is served by gas, electricity, water,
sewage and waste disposal and other utilities adequate to operate
such building or facility in accordance with its current use, and
none
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of the utility
companies serving any such building or facility has threatened the
Seller with any reduction in service. All of said utilities are
installed and operating and all installation and connection charges
have been paid for in full.
(e) The
Leased Real Property is in material compliance with, and all
buildings, structures, other improvements and fixtures on such
Leased Real Property and the operations of the Business in or about
any Leased Real Property therein conducted, conform in all material
respects to all applicable health, fire, safety, zoning and
building Laws and all applicable covenants, conditions and
restrictions. The Leased Real Property includes all rights to any
off-site facilities necessary to ensure compliance with all
applicable Laws. The zoning of each parcel of Leased Real Property
permits the existing improvements and the continued operation of
the Business by the Purchaser at such sites following the Closing
in the manner operated by the Seller prior to the Closing. The
Seller has all easements and rights necessary or appropriate to
conduct the Business at the Leased Real Property.
6.7 Personal Property . The Seller and J&M
Equipment have entered into the J&M Equipment Agreement
pursuant to which J&M will immediately prior to the Closing
convey to the Seller the equipment listed on
Schedule 6.7 . The Seller has (or will have
immediately prior to the Closing, in the case of the equipment
listed on Schedule 6.7 ) good and marketable
title to, or valid and enforceable leasehold or license interests
in, all of the Purchased Assets, in each case free and clear of all
Liens other than Permitted Liens. The tangible Purchased Assets
other than inventory are in good condition and repair (subject to
normal wear and tear) and are sufficient for the operation of the
Business as it is currently conducted. All of the tangible
Purchased Assets other than inventory have been maintained,
repaired and replaced consistent with past practice in a manner
that is appropriate for the continued operation of the
Business.
6.8 Necessary Property . The Purchased
Assets, when transferred to the Purchaser, and the Leased Real
Property, when leased to the Purchaser, will be adequate and
sufficient to permit the Purchaser to conduct the Business as
conducted by the Seller prior to the Closing Date. The Seller is
the only entity through which the Business is conducted, and the
Seller does not own, lease or use any assets in the conduct of the
Business other than the Leased Real Property, the Purchased Assets
and the Retained Assets. No Affiliate of the Seller owns or uses
any assets used or useful in the Business, other than the Leased
Real Property and the machinery and equipment that is the subject
of the J&M Equipment Agreement.
6.9 Litigation . There is no instance
in which the Seller, in connection with the operation of the
Business or the Purchased Assets, is (a) subject to any
unsatisfied Order or (b) a party, or, to the Knowledge of the
Seller, is threatened to be made a party, to any Proceeding. There
are no Proceedings pending or, to the Knowledge of the Seller,
threatened that question the validity of this Agreement, the
Ancillary Agreements or any of the transactions contemplated hereby
or thereby.
6.10 Compliance with Laws and Orders .
The Seller is now, and, to the Knowledge of the Seller, has been
during the preceding five years, in material compliance with all
Laws and Orders applicable to the Purchased Assets and the
Business. The Seller does not
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have
Knowledge of any proposed Law or Order that would be applicable to
the Purchased Assets or the Business and that would have a Material
Adverse Effect.
6.11 Conduct of Business . Since
December 31, 2006, the Seller has conducted the Business in
the Ordinary Course of Business (apart from entry into this
Agreement and discussions with Brush and its Affiliates, including
the Purchaser, leading thereto), and there has not been any
material adverse change in the operation of the Business or the
performance or financial condition of the Seller. Without limiting
the generality of the foregoing, except for entry into this
Agreement and as set forth on Schedule 6.11 ,
since December 31, 2006, the Seller has not:
(a)
borrowed any amount or incurred or become subject to any liability
except (i) current liabilities incurred in the Ordinary Course of
Business, (ii) liabilities under Contracts entered into in the
Ordinary Course of Business, and (iii) borrowings under lines
of credit existing on such date;
(b)
mortgaged, pledged or subjected to any Lien any of the Purchased
Assets, except Permitted Liens;
(c)
sold, assigned or transferred (including, without limitation,
transfers to any employees, shareholders or Affiliates) any
Purchased Assets except in the Ordinary Course of Business, or
canceled any material debts or claims;
(d)
waived any material rights of value;
(e)
taken any other action or entered into any other transaction
(including any transactions with employees, shareholders or
Affiliates) other than in the Ordinary Course of Business;
(f)
suffered any material theft, damage, destruction or loss of or to
any Purchased Assets;
(g)
(i) increased the salary, wages or other compensation rates of
any officer, employee, director, partner or consultant of the
Seller; or (ii) made or granted any increase in any Employee
Benefit Plan, or amended or terminated any existing Employee
Benefit Plan, or adopted any new Employee Benefit Plan or made any
commitment or incurred any liability to any labor
organization;
(h)
authorized or made any capital expenditures or commitments therefor
in excess of $25,000 individually;
(i)
made any change in its accounting or Tax principles, practices or
policies from those utilized in the preparation of the Financial
Statements;
(j)
made any material write-off or write-down of or made any
determination to write-off or write-down any of its assets and
properties;
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(k)
made any change in its general pricing practices or policies, other
than pricing changes expressly contemplated by Contracts listed on
Schedule 6.15 , or any change in its credit or
allowance practices or policies;
(l)
engaged in any activi
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