Exhibit 10.110
ASSET PURCHASE AGREEMENT
AMONG
SIMMONS OUTDOOR CORPORATION,
MEADE INSTRUMENTS CORP.
AND
BUSHNELL, INC.
Transfer of the Simmons Brand
And Simmons Inventory
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT
(“Agreement”), dated as of June 12, 2008, is
entered into by and among Simmons Outdoor Corporation, a Delaware
corporation (“Seller”), and Bushnell, Inc., a
Delaware corporation (“Buyer”), and Meade Instruments
Corp. (“Parent” and together with Seller, the
“Meade Parties”).
RECITALS
WHEREAS, the Meade Parties are engaged in the
marketing, sale, distribution and servicing of certain sports
optics under the brand name Simmons (the
“Business”);
WHEREAS, the Meade Parties wish to sell to
Buyer, and Buyer wishes to purchase from the Meade Parties, upon
the terms and subject to the conditions of this Agreement, certain
of the assets of the Meade Parties relating to the Business;
and
WHEREAS, concurrently with the consummation of
the transactions contemplated by this Agreement, the Meade Parties
and Buyer shall enter into a Transition Services Agreement, dated
as of the date hereof, pursuant to which the Meade Parties shall
agree to provide Buyer with certain services related to the
operation of the Business following Closing.
ACCORDINGLY, in consideration of the premises
and the mutual agreements, covenants, representations and
warranties hereinafter set forth, the parties hereby agree as
follows:
ARTICLE 1
DEFINITIONS
In
addition to terms that may be defined elsewhere herein, the
following terms shall have the respective meanings set forth
below:
“Action” means any litigation,
suit, investigation, originating application to an employment
tribunal, binding arbitration or proceeding of any kind.
“Affiliate” means, with respect to
any specified Person, any other Person that directly, or indirectly
through one or more intermediaries, controls or is controlled by,
or is under common control with such specified Person.
“Agreement” means this Asset
Purchase Agreement entered into by Seller, Parent and Buyer,
together with any amendments, exhibits and schedules.
“Assignment of Patents and
Trademarks” means collectively, the documents to record the
assignment of the patents, patent applications and trademark
registrations and applications for registration included in the
Purchased Assets to Buyer in the United States Patent and Trademark
Office and the corresponding government offices in all the
applicable jurisdictions, substantially in the forms attached as
Exhibit A.
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“Bill of Sale” means the bill of
sale transferring to Buyer title to the Purchased Assets (as
defined in Section 2.1), substantially in the form attached as
Exhibit B.
“Buyer” means Bushnell, Inc.,
a Delaware corporation, together with its successors and permitted
assigns.
“Claim” means any legal claim,
legal demand or Action.
“Closing Date” means the date and
time of closing on the sale and purchase under the Agreement as set
forth in Section 3.4.
“Code” means the Internal Revenue
Code of 1986, as amended, including without limitation, any
successor revenue code of the United States federal government,
together with the rules and regulations promulgated
thereunder.
“Confidential Information” means
all information of a confidential or proprietary nature (whether or
not specifically labeled or identified as
“confidential”), in any form or medium, that relates to
the Business and/or its suppliers, distributors, customers,
independent contractors and/or other business relations, but
excludes any information already properly in the public
domain. Confidential Information also includes confidential
and proprietary information and trade secrets that third parties
entrust to the Meade Parties in confidence regarding the
foregoing.
“GAAP” means Unites Stated
generally accepted accounting principles, as in effect from time to
time.
“General Assignment and Assumption
Agreement” means the agreement defined in Section 2.4,
substantially in the form attached as Exhibit C.
“Governmental License” means any
permission, order, certificate, variance, license, permit, consent,
registration, exemption, approval, authorization or qualification
obtained from a Governmental Body.
“Governmental Body” means any
government or agency, administration, department, commission,
board, subdivision, court, or bureau of any foreign, federal, state
or local government or political subdivision thereof, or any
quasi-governmental, arbitral or private body exercising any
regulatory, taxing, importing or any other governmental or
quasi-governmental authority.
“Indebtedness” means (i) any
indebtedness for borrowed money; (ii) any indebtedness
evidenced by any note, bond, debenture or other debt security;
(iii) any liabilities or obligations for the deferred purchase
price of property or services with respect to which the Meade
Parties are liable, contingently or otherwise, as obligor or
otherwise (other than account payables which are not more than
ninety (90) days past due); (iv) any commitment by which the
Meade Parties assure a creditor against loss (including contingent
reimbursement obligations with respect to letters of credit);
(v) any indebtedness guaranteed in any manner by the Meade
Parties (including guarantees in the form of an agreement to
repurchase or reimburse); (vi) any indebtedness or liabilities
secured by a Lien on the Purchased Assets; (vii) any amounts
owed by Seller to any
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Person under any noncompetition or consulting
arrangements; and (viii) any amounts owed to Affiliates of
Seller (including intercompany trade and accounts
payable).
“Know-How” means technical
knowledge.
“Knowledge of Seller” means the
actual knowledge, after reasonable inquiry, of any of the
individuals listed on Schedule 1.0 (collectively, the
“Specified Individuals”).
“Laws” means all applicable laws
(whether statutory, common law, or otherwise), rules, regulations,
orders, ordinances, judgments, decrees, writs, statues, codes and
injunctions enacted or promulgated by any Governmental
Body.
“Liabilities” means any and all
Claims, causes of action, assessments, losses, damages
(compensatory, punitive or other), liabilities, obligations,
reimbursements, costs and expenses of any kind or nature, actual,
contingent, present or future, including, without limitation, where
applicable under the operative documents, laws or statutes,
interest, penalties and reasonable attorneys’ and
experts’ fees and expenses.
“Liens” means any liens, pledges,
deeds of trusts, hypothecation, Claims, licenses, leases,
mortgages, security interests, charges, voting trusts, restrictions
on transfer, or other encumbrances.
“Loss” means any loss, Liability,
demand, claim, action, cause of action, cost, damage, deficiency,
Tax, penalty, fine or expense, whether or not arising out of third
party claims (including interest, penalties, reasonable
attorneys’ fees and expenses and all reasonable amounts paid
in investigation, defense or settlement of any of the foregoing and
the enforcement of any rights hereunder).
“Material Adverse Effect” means any
circumstance, change, event or effect that, individually or in the
aggregate with any other circumstance, change, event or effect, is
or reasonably could be expected to be materially adverse to the
business, assets, financial condition or results of operations of
the Business taken as a whole, but excluding the effects of:
(i) changes to the industries and markets in which the
Business operates, to the extent such changes do not have a
disproportionately adverse effect on the Seller or the Business
(ii) changes in the United States or world financial markets,
to the extent such changes do not have a disproportionately adverse
effect on the Seller or the Business, or (iii) a public
announcement related to this Agreement.
“Parent” means Meade Instruments
Corp., a Delaware corporation, together with its successors and
permitted assigns.
“Person” means any individual,
corporation, Governmental Body, association, partnership, limited
liability company, or other entity.
“Product(s)” means all products
manufactured, marketed, sold, distributed and serviced by or on
behalf of the Meade Parties in connection with the Business and
listed on Schedule 1.2 by SKU.
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“Proprietary Rights” means all
(i) patents, patent applications and inventions (whether or
not patentable or reduced to practice); (ii) Trademarks and
internet domain names; (iii) works of authorship (whether or
not copyrightable) and copyrights; (iv) Trade Secrets,
Know-How and confidential information; (v) software (including
source code, executable code, systems, tools, data, databases,
firmware, and related documentation); (vi) registrations and
applications for any of the foregoing; (vii) all other
intellectual property and proprietary rights; and (viii) all
copies and tangible embodiments of any of the foregoing, in
whatever form or medium.
“Related Agreements” means the
Assignment of Patents and Trademarks (Exhibit A), the Bill of
Sale (Exhibit B), and the General Assignment and Assumption
Agreement (Exhibit C). The Related Agreements are a part
of this Agreement.
“Seller” means Simmons Outdoor
Corporation, a Delaware corporation, together with its successors
and permitted assigns.
“Taxes,” means any federal, state,
local, provincial and foreign income, payroll, withholding, excise,
value added, social security, sales, use, real and personal
property, occupancy, business and occupation, mercantile, capital
stock, franchise, profits, gross receipts, transfer, employment,
wage, severance, real estate, stamp, alternative or add-on minimum,
environmental, license, capital, intangible, services, premium, ad
valorem, windfall profits, import, custom, and any other taxes,
fees, duties, assessments or governmental charges of any kind
whatsoever (including interest, other additions to Taxes and
penalties thereon and including estimated taxes
thereof).
“Tax Return” means any report,
return, statement, declaration or other written information
(including any related or supporting schedule, statement or
information) required to be supplied to or filed with a taxing
authority in connection with Taxes.
“Trademarks” means trademarks,
service marks, trade names, corporate names, business names, logos,
slogans, trade dress, and all other indicia of origin, together
with all translations, adaptations, derivations, and combinations
thereof and all goodwill associated therewith.
“Trade Secrets” means all trade
secrets and other proprietary information, technologies, processes,
techniques, protocols, methods, formulae, compositions, industrial
models, architectures, designs, drawings, plans, specifications,
methodologies, ideas, research and development, and confidential
information (including technical data, customer and supplier lists,
pricing and cost information, and business and marketing plans and
proposals), in each case to the extent protectable under applicable
law.
“$” means U.S. Dollar.
ARTICLE 2
PURCHASE AND SALE OF ASSETS
2.1.
Assets to be
Purchased . On the terms and subject to the
conditions set forth in this Agreement, the Meade Parties hereby
sells, transfers, conveys, assigns and delivers to or causes to be
sold, transferred, conveyed, assigned and delivered to Buyer and
Buyer hereby purchases from the Meade Parties, free and clear of
any and all Liens, all of the Meade Parties’s
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right, title and interest in and to the
following assets, properties, rights, titles and interests used or
held for use by the Meade Parties in connection with the Business,
as exists immediately prior to the Closing Date, except to the
extent constituting Retained Assets as provided in Section 2.2
(the “Purchased Assets”):
(a)
all tooling, machinery and
equipment owned and used primarily for the design, manufacture,
inspection and testing of the Products, including without
limitation, the manufacturing, maintenance and testing tools, dies,
jigs, molds, fixtures, patterns, and equipment (including, without
limitation, all special test equipment), and spare or replacement
parts, described on Schedule 2.1(a);
(b)
all inventory related
primarily to the Business as set forth on
Schedule 2.1(b) (the “Inventory”);
(c)
subject to Sections 2.3
and 6.4 below, all of the Meade Parties’ right, title and
interest in and to all contracts, subcontracts, purchase orders and
licenses under which the Meade Parties have committed to provide
goods or services primarily in connection with the Products,
including the contracts set forth on Schedule 2.1(c), other than in
violation of Section 6.1 (collectively,
“Contracts”);
(d)
subject to Sections 2.3
and 6.4 below, all of the Meade Parties’ right, title and
interest in and to the contracts, subcontracts, purchase orders,
co-production arrangements and licenses under which the Meade
Parties has committed to acquire goods or services primarily in
connection with the Products, including the subcontracts set forth
on Schedule 2.1(d), other than in violation of Section 6.1
(collectively, “Subcontracts”);
(e)
subject to
Section 2.2(c) below, a copy of operating records used by
the Meade Parties primarily for the Business as follows: sales and
sales promotional data, sales order files, advertising materials,
customer lists and records, vendor/supplier lists, customer bid and
proposal information, catalogs, price lists, and marketing
photographs; supplier lists and records; test data and reports;
training materials and equipment; market research; customer
surveys; media plans; raw artwork files including catalogues, ads,
POP and promotions; promotional material including banners, signs,
posters, hats, clothing, scope cap covers, CDs, DVDs, and videos,
and technical publications and related data, in each case whether
evidenced in writing, electronic data, computer software or
otherwise;
(f)
all Proprietary Rights
used or held for use primarily for the design, manufacture,
testing, marketing, sale, or service of the Products, including the
issuances, registrations or applications therefor and unregistered
Trademarks, set forth on Schedule 2.1(f), and all rights to collect
royalties, products and proceeds in connection with the foregoing
and all rights to sue and bring other claims for past, present and
future infringement, misappropriation or other violation of any of
the foregoing, and all rights to recover damages (including
attorneys’ fees and expenses) or lost profits in connection
therewith;
(g)
all software used or held
for use primarily for the design, manufacture, testing, sale, or
service of the Products or otherwise in connection with the
Business(excluding commercial software and related licenses)
including source code and executable code (collectively, the
“Exclusive Seller Software”), set forth on
Schedule 2.1(g);
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(h)
all products used or held
for use by the Meade Parties primarily in connection with marketing
or testing relating to the Products, including the products listed
on Schedule 2.1(h) and dated as of the dates indicated in such
schedule;
(i)
to the extent
transferable, all of the Meade Parties’s copies and tangible
embodiments, in whatever form or medium, containing and documenting
any Proprietary Rights;
(j)
the domain names listed on
Schedule 2.1(j);
(k)
all credits, prepaid
expenses, deferred charges, advance payments, security deposits and
other prepaid items made by, or received by, the Meade Parties to
the extent they relate to the performance of Contracts or
Subcontracts following the Closing;
(l)
subject to
Section 2.3, all Governmental Licenses primarily used or
intended for use by the Business, and the rights to all data and
records held by any Governmental Body relating to the Purchased
Assets;
(m)
with respect to contracts
pursuant to which the Meade Parties provide to the counterparty
both services relating to the Products and other services, the
rights thereunder relating to the Products (such rights relating to
the Products, the “Shared Contracts”), including the
Shared Contracts listed on Schedule 2.1(m); and
(n)
the phone number
1-800-285-0689.
2.2.
Retained
Assets .
Notwithstanding any other provision of this Agreement, subject to
the licenses granted in Section 6.13, the Meade Parties shall
retain their right, title and interest in and to all assets,
properties, rights and interests relating to or arising from
Seller’s business that are not included in the Purchased
Assets (the “Retained Assets”), including without
limitation:
(a)
except and to the extent
provided in Section 2.1(k), all cash, cash equivalents and
accounts receivable;
(b)
all rights, recoveries,
refunds (including credits and refunds for Taxes attributable to
the operations of Seller’s business with respect to any
period, or portion thereof, ending on or prior to the Closing Date
or otherwise attributable to the period prior to the Closing Date),
counterclaims, rights of set-off and other causes of action and
Claims against third parties with respect to the Business before
the Closing Date;
(c)
Seller’s corporate
minute books, stock transfer records, stock certificates,
consolidating entry records, corporate seals, Tax Returns, tax and
accounting records, and all other books and records not
specifically set forth in Section 2.1(e), except such books
and accounting records necessary to support the Purchased
Assets;
(d)
subject to
Section 6.2, all Claims, rights of recovery and rights of
setoff of any kind related to the Retained Assets or the Retained
Liabilities, including without limitation, any liens,
mechanic’s liens or any rights to payment or to enforce
payment in connection with
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work performed on or prior to the Closing Date,
except to the extent that retention of Claims or rights impairs the
Purchased Assets or the Liabilities assumed by Buyer;
(e)
all corporate purchase
agreements under which Seller makes purchases for products, other
than primarily for the Business;
(f)
any insurance policies of
Seller (any coverage thereunder) and any proceeds of any claims
made against such policies;
(g)
all Governmental Licenses
relating to Seller’s business, except to the extent the
Licenses are assigned or assumed by Buyer under the terms of this
Agreement;
(h)
any assets of any
“employee benefit plans” (as defined in
Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”)) and any rights under
any plan, program, policy, arrangement or agreement relating to
employee benefits, employment or compensation of Seller or its
ERISA Affiliates;
(i)
all tooling, test
equipment and other machinery and equipment other than that
described in Section 2.1(a), and all rolling stock, vehicles,
security equipment, telephones, facsimile machines, photocopy
equipment, computers, and networking equipment used by
Seller;
(j)
all credits and refunds
for Taxes attributable to the operation of the Business with
respect to any period, or portion of a period, ending on or prior
to the Closing Date or otherwise attributable to the period prior
to the Closing Date;
(k)
all obligations or
Liabilities under any intercompany accounts payable to or
intercompany obligations among the Seller, Parent and their
respective Affiliates; and
(l)
the patent and patent
application listed on Schedule 2.2(l), together with all inventions
and technology related to the foregoing, subject to
Section 6.13.
2.3.
Nonassignable
Contracts . Notwithstanding anything in this
Agreement to the contrary, this Agreement shall not constitute an
agreement to assign any Contract, Subcontract, claim, authorization
of a Governmental Body, or any claim, right or benefit arising
thereunder or resulting therefrom, if the transfer of any such
Contract, Subcontract, claim, authorization of a Governmental Body,
or any claim, right or benefit arising thereunder or resulting
therefrom, or any other assets under this Agreement would be deemed
an attempted assignment thereof without the required consent of a
third party thereto and would constitute a breach or a claim of
breach thereof or in any way affect the rights of Seller or Buyer
thereunder. Any assumption by Buyer of obligations under this
Agreement, whether by operation of Law or in connection with the
transfer of assets under this Agreement, which assumption shall
require the consent or approval of any third party shall be made
subject to such consent or approval being obtained. If any such
consent shall not be obtained despite Seller’s and
Buyer’s commercially reasonable efforts to procure same, then
Seller shall cooperate with Buyer in any reasonable arrangement
designed to provide for the Buyer the benefits intended to be
transferred to Buyer with respect to the underlying Contract,
including, enforcement of such Contract at the cost and for the
account of the Buyer of any and all rights of the Seller against
any other party to such Contract arising out of the breach,
nonfulfillment or cancellation thereof by such other party or
otherwise, and
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subject to the terms and conditions contained
herein, Buyer shall assume liability for Seller’s obligations
thereunder arising on or after the Closing Date.
2.4.
Liabilities to be
Assumed .
Subject to the terms and conditions of this Agreement, on the
Closing Date, Buyer shall deliver to Seller an agreement (the
“General Assignment and Assumption Agreement”), whereby
Seller shall assign, cause to be assigned, delegate or otherwise
transfer to Buyer, and Buyer shall assume and agree to perform and
discharge when due only the following the Liabilities
(collectively, the “Assumed Liabilities”):
(a)
Subject to
Sections 2.3 and 6.4, all Liabilities of Seller and its
Affiliates under all the Contracts and Subcontracts actually
assigned to and assumed by Buyer with respect to performance
required after the Closing Date, but specifically excluding any
Liabilities relating to or arising out of such Assumed Contracts as
a result of (A) any breach of such Contract or Subcontract
occurring on or prior to the Closing Date, (B) any violation
of law, breach of warranty, tort or infringement occurring on or
prior to the Closing Date; or (C) any charge, complaint,
action, suit, proceeding, hearing, investigation, claim or demand
that arises as a result of a matter referred to in clause
(A) or clause (B) above or that is filed prior to the
Closing Date;
(b)
Subject to
Section 6.2, Liabilities for warranty claims for Products sold
by Seller and solely based upon the express warranty of Seller as
described on Schedules 4.15(a)(i) and (ii) up to an
aggregate of $200,000 over the first 24 months following Closing;
and
(c)
All Liabilities arising
from Buyer’s ownership of the Purchased Assets after the
Closing Date.
2.5.
Retained
Liabilities .
Notwithstanding anything to the contrary in this Agreement, except
for the Assumed Liabilities, Seller retains all Liabilities of any
nature whatsoever, whether accrued, absolute, contingent or
otherwise, whether known or unknown, whether due or to become due,
whether related to the Business or the Purchased Assets and whether
disclosed on the schedules attached hereto, and regardless of when
or by whom asserted, including, without limitation, all of the
following (collectively the “Retained
Liabilities”):
(a)
any of Seller’s
liabilities or obligations under this Agreement, the schedules
attached hereto, and the Related Agreements;
(b)
all Liabilities arising
out of or relating to the Retained Assets;
(c)
all Liabilities of the
Meade Parties to the extent that they do not arise out of, or are
not related to, the Business or the Purchased Assets;
(d)
all Liabilities relating
to the Meade Parties’ employees and any employee benefit
plans, programs, policy or arrangement presently or formerly
maintained or contributed to by Seller or its ERISA Affiliates, or
with respect to which Seller or any such ERISA Affiliate has any
liability; provided, however, that nothing herein shall imply or
create an obligation of Seller or its Affiliates to provide or
continue to provide compensation or benefits to Seller’s
employees who are hired by Buyer other than those which are
required by Law to be provided to individuals who terminate their
employment with Seller;
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(e)
all Liabilities of the
Meade Parties, or any Affiliate of the Meade Parties, for Taxes
other than Transfer Taxes as defined in Section 3.3 which are
attributable to any period without regard to whether such Taxes
relate to periods (or portions thereof) ending on or prior to the
Closing Date, including without limitation, all Taxes on taxable
gain or loss resulting from the sale of the Purchased Assets to the
Buyer;
(f)
Liabilities, if any, for
severance pay or other separation benefits to Seller’s
employees;
(g)
all Liabilities, whether
arising in contract or in tort (including warranty, negligence and
strict liability), arising from events occurring prior to the
Closing Date relating to or arising from the Business or Purchased
Assets;
(h)
all Liabilities with
respect to any Products that were sold or services that were
performed prior to or on the Closing Date, including any obligation
to pay a commission, product liability claims, infringement claims
and any related Claims and Actions;
(i)
all Liabilities for
attorneys’, accountants’ and other advisor fees and
expenses and other costs and expenses incurred by or on behalf of
Seller or any of its Affiliates in connection with the transactions
contemplated by this Agreement;
(j)
any of Seller’s
liabilities or obligations arising (A) by reason of any
violation or alleged violation of any federal, state, local or
foreign law or any requirement of any Governmental Body, or
(B) by reason of any breach by the Meade Parties of any
Contract, Subcontract or Shared Contract on or before the Closing
Date;
(k)
any Liabilities relating
to any Law, Claim or Action arising out of or in connection with
Seller’s or any of its Affiliate’s conduct of the
Business or any other conduct of Seller, Seller’s officers,
directors, employees, consultants, agents or advisors on or prior
to the Closing Date;
(l)
any of the Meade
Parties’ Liabilities for Indebtedness;
(m)
Subject to
Section 6.2, Liabilities for warranty claims for Products sold
by Seller and based upon the express warranties of Seller as
described on Schedules 4.15(a)(i) and (ii) in excess
of $200,000 over the first 24 months following Closing;
and
(n)
all Liabilities whether
arising in contract or in tort (including warranty, negligence and
strict liability), arising prior to, on or after the Closing Date
which involve (i) any Products sold or otherwise transferred
by Seller before the Closing Date or (ii) Retained Assets,
other than Products, and any Claims or Actions related to
(i) or (ii) arising prior to, on or after the Closing
Date.
ARTICLE 3
PRICE AND TERMS
3.1.
Purchase
Price .
The purchase price of the Purchased Assets (the “Purchase
Price”) shall be $7,250,000.
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3.2.
Payment of the Purchase
Price .
At the Closing, Buyer shall pay to Seller the Purchase Price in
immediately available funds by way of wire transfer to the bank
account designated by Seller.
3.3.
Transfer
Taxes .
Buyer and Seller shall share equally all costs of any sales, use,
privilege and other transfer or similar taxes, (but excluding all
withholding and other taxes computed on the basis of net income)
including any interest and penalties (“Transfer
Taxes”), imposed upon either party hereto as a result of the
transactions contemplated hereby. To the extent any
exemptions from such Transfer Taxes are available, Buyer and Seller
shall cooperate to prepare any certificates or other documents
necessary to claim such exemptions.
3.4.
Closing Date
. The closing of the
transactions contemplated by this Agreement (the
“Closing”) shall take place at the offices of
Kirkland & Ellis LLP, 153 East 53rd Street, New York, NY
10022, at 10:00 a.m., local time, on June 12, 2008, or
such other date as the Parties may mutually agree upon in writing
(the “Closing Date”).
3.5.
Allocation of Purchase
Price .
The Purchase Price (and all other capitalizable costs) shall be
allocated among the Purchased Assets in accordance with Schedule
3.5. Such allocation shall be binding upon Buyer and Seller
for purposes of Section 1060 of the Code and the Treasury
Regulations promulgated thereunder (and any similar provision of
state, local or foreign law, as appropriate). Buyer and
Seller and their respective affiliates shall report, act and file
Tax Returns (including, but not limited to Internal Revenue Service
Form 8594) in all respects consistent with such
allocation. Neither Buyer nor Seller, nor any of them, shall
take any position in Tax Returns that is inconsistent with such
allocation unless expressly required to do so by applicable
law.
3.6.
Inventory
Statement .
(a)
No later than two
(2) days prior to Closing, Seller will deliver to Buyer a
written statement (the “Estimated Inventory Statement”)
setting forth in good faith the Seller’s estimate of the
value of the Inventory (as defined below), together with an
itemization. The value of the Inventory will be based on
Seller’s currently disclosed cost by SKU as listed on the
Estimated Inventory Statement. Within 30 days after the
Closing Date, Buyer will prepare and deliver to Seller a statement
setting forth Buyer’s calculation of the value of the
Inventory (the “Closing Statement”), together with an
itemization. Within five (5) days after receipt of the
Closing Statement, Seller will notify Buyer in writing of its
agreement or disagreement, as the case may be, with the Closing
Statement. If the Seller does not provide written notice to
the Buyer objecting to the Closing Statement within five
(5) days of receipt, the Closing Statement will be deemed the
Final Inventory Statement (as defined below). If the Seller
disputes any aspect of the Closing Statement, the Seller’s
written notice of objection must include its proposed alternative
calculation of the value of the Inventory, and basis
therefore. Thereafter, Buyer and Seller will attempt in good
faith to resolve and finally determine the value of the
Inventory. In connection with the resolution of any dispute,
each party shall pay its own fees and expenses, including without
limitation, legal, accounting and consultant fees and
expenses.
(c)
Upon the final
determination of the value of the Inventory pursuant to
Section 3.6(b) (the “Final Inventory
Statement”), the Purchase Price will be adjusted as set forth
in this Section 3.6(c). If the Final Inventory Statement
is less than the Estimated Inventory Statement, the Purchase Price
will be decreased by the difference and the Seller will
promptly
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pay
to Buyer such amount. Any payment due under this
Section 3.6(c) will be made by wire transfer of
immediately available funds within five business days after the
Final Inventory Statement has been determined.
ARTICLE 4
SELLER’S REPRESENTATIONS AND WARRANTIES
As
of the date of this Agreement, Seller represents and warrants to
and agrees with Buyer as follows:
4.1.
Existence, Power,
Authorization and Qualifications of Seller . Seller is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Delaware and has the requisite corporate power and
corporate authority to execute, deliver and perform this Agreement
and the Related Agreements, and to carry on its business as it is
now being conducted, and is duly qualified to do business and is in
good standing in every jurisdiction in which Seller’s
Business requires it to be so qualified, except where the failure
to be so qualified would not have a Material Adverse Effect.
The execution, delivery and performance by Seller of this Agreement
and the Related Agreements have been duly authorized by all
necessary corporate action of Seller, and no other proceeding on
the part of Seller or its shareholder are necessary to authorize
the execution, delivery or performance of this Agreement or the
other agreements contemplated hereby. This Agreement, and the
Related Agreements, to be executed and delivered by Seller
constitute valid and legally binding obligations of Seller
enforceable against it in accordance with their terms, except as
limited by applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting the enforcement of
creditors’ rights generally, and by general principles of
equity (regardless of whether enforceability is considered in a
proceeding in equity or law), including without limitation,
possible unavailability of specific performance, injunctive relief,
or other equitable remedies. No Claim exists or has been
asserted that would prevent or delay consummation of the Closing or
transfer of the Purchased Assets to Buyer.
4.2.
Non-Contravention . Neither the execution and
delivery by Seller of this Agreement, the Related Agreements and
the other documents and agreements contemplated by this Agreement,
nor the consummation by Seller of the transactions contemplated by
this Agreement (including, without limitation, the assignment to
Buyer of all right, title and interest of Seller in and to the
Contracts and Subcontracts), will violate, conflict with or result
in a breach of any provision of, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute
a default) under, or result in the termination of, or accelerate
the performance required by, or result in a right of termination or
acceleration under, require any consent, waiver or approval under,
or require any offer to purchase or any prepayment of any
mater
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