ASSET PURCHASE AGREEMENT

Exhibit 2.1

 

ASSET PURCHASE AGREEMENT

 

by and among

 

GOODMAN GLOBAL HOLDINGS, INC.

(as Seller),

 

FRIO HOLDINGS, INC.

(as Parent)

 

and

 

FRIO, INC.

(as Buyer)

 

dated as of

 

November 18, 2004

TABLE OF CONTENTS

 

 

- i -

 

- ii -

 

- iii -

 

CONSENT OF SHAREHOLDERS

 

 

- iv -

 

ASSET PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT (“Agreement”) dated as of November 18, 2004, is made and entered into by and among Goodman Global Holdings, Inc., a Texas corporation (“Seller”), Frio Holdings, Inc., a Delaware corporation (“Parent”), and Frio, Inc., a Delaware corporation (“Buyer”).

 

WHEREAS , Seller owns all the outstanding Equity Securities (the “Equity Interests”) in the corporations and limited liability companies identified in the table below (the “First Tier Subsidiaries”):

 

 

; and

 

WHEREAS, the First Tier Subsidiaries, directly or indirectly, own 100% of the Equity Securities (the “Second Tier Equity Interests”) in the corporations, limited liability companies and limited partnerships identified in the table below (the “Second Tier Subsidiaries”):

 

 

; and

 

WHEREAS , Seller, the First Tier Subsidiaries and the Second Tier Subsidiaries research, develop, design, manufacture, test, process, market, package, sell and distribute air conditioning and heating products, including insulation, for residential and light commercial use in the United States and elsewhere (collectively, the “Business”); and

 

WHEREAS, although Seller directly owns, in addition to the Equity Interests, (a) cash, bank deposits and cash equivalents, (b) the right to use the “Amana” trademark under a licensing agreement with Maytag Corporation and one of its subsidiaries, (c) certain rights arising under licensing arrangements with others, and (d) a limited number of other assets that are deployed in the Business as described in Section 2.1(a)(ii) (clauses (b) – (d) collectively, but excluding any

Excluded Assets, the “Incidental Assets”), and has incurred liabilities relating to the Business primarily under its principal bank credit facility and its guaranties of the commercial obligations of the First Tier Subsidiaries and the Second Tier Subsidiaries (collectively, the “Subsidiaries”), substantially all the assets and liabilities associated with the Business are owned or have been incurred by the Subsidiaries; and

 

WHEREAS , Seller and Buyer Entities desire to enter into this Agreement pursuant to which Seller is agreeing to sell to Buyer, and Buyer Entities are agreeing the Buyer will (a) purchase from Seller the Equity Interests and all the Incidental Assets (other than the Excluded Assets), (b) purchase the limited partner interest in Goodman Manufacturing Company, L.P. from Goodman Holding Company, L.L.C. and (c) assume substantially all the debts, liabilities and obligations of Seller relating to the Business (other than the Excluded Liabilities) (collectively, the “Transaction”); and

 

WHEREAS , simultaneously with the execution and delivery of this Agreement by Seller, the holders of all the issued and outstanding shares of Series A Common Stock, $0.01 par value, of Seller (the “Series A Stock”), being Seller’s only class or series of outstanding capital stock entitled to vote on the Transaction, have executed and delivered the Consent of Shareholders annexed to this Agreement; and

 

WHEREAS , certain members of management of Seller (the “Management Investors”) have executed and delivered the binding term sheets attached to this Agreement as Exhibit A (the “Management Investor Term Sheets”) pursuant to which the Management Investors have agreed, among other things, to invest as of the Closing Date in the equity of Parent; and

 

WHEREAS , certain members of the Goodman family (the “Family Investors”) intend to invest as of the Closing Date in the equity of the Parent on the terms and conditions set forth in the term sheet attached as Exhibit B (the “Family Investor Term Sheet”).

 

NOW THEREFORE , in consideration of the premises and the respective representations, warranties, covenants and agreements contained in this Agreement, Buyer Entities and Seller agree as follows:

 

ARTICLE I

DEFINITIONS

 

As used in this Agreement, the following terms shall have the following meanings:

 

“ APA Agreement ” means the Asset Purchase Agreement by and among Amana Appliance Company, L.P., Seller, Maytag Corporation and Maytag Worldwide N.V., dated as of June 4, 2001, as amended, and the documents executed and delivered in connection with the consummation of the transactions contemplated therein, including a licensing agreement relating to the trademark “Amana”.

 

“ Access Period ” means the period of time, commencing on the Closing Date and ending on the seventh anniversary thereof.

 

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“ Accounts Payable ” means all accounts payable (excluding all accounts payable in respect of Taxes accruing during the Pre-Closing Tax Period), accrued expenses, accrued warranty and other current liabilities (including prepaid sales and accrued freight) of the members of the Seller Group.

 

“ Adjusted Working Capital ” means an amount equal to (a) the sum of (i) the book balances of all cash, bank deposits and cash equivalents held by the members of the Seller Group as of the Closing Date, plus (ii) the amount of the Inventory as of the Closing Date, plus (iii) the aggregate net carrying value of the Receivables as of the Closing Date, plus (iv) the value of the Other Current Assets as of the Closing Date, minus (b) the sum of (i) the book balances of all cash, bank deposits and cash equivalents held by Seller as of the Closing Date, plus (ii) the Accounts Payable as of the Closing Date, plus (iii) all estimated Taxes payable by each C Corporation in respect of any Pre-Closing Tax Period, plus (iv) all estimated state, county and local Taxes payable by any Flow Through Entity in respect of any Pre-Closing Tax Period, plus (v) other current liabilities of the members of the Seller Group as of the Closing Date, plus (vi) the amount of Pro Forma Target Liabilities, all as determined in a manner consistent with this Agreement, including Section 2.5(b). For the avoidance of doubt, “Adjusted Working Capital” shall be exclusive of any Excluded Assets or Excluded Liabilities.

 

“ affiliate ” of any person means any other person directly or indirectly controlling, controlled by or under common control with such person; provided that for purposes of this definition, “control” (including with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person, whether through the ownership of voting securities or partnership interests, by contract or otherwise.

 

“ Agreement ” has the meaning set forth in the introductory paragraph.

 

“ Allocation Schedule ” has the meaning set forth in Section 2.8.

 

“ Antitrust Division ” means the Antitrust Division of the United States Department of Justice.

 

“ Assumed Claims ” means all Claims of Environmental Liability, all Environmental Exposure Claims, all Product Liability Claims, all Product Warranty Claims, all Worker’s Compensation Claims, all Intellectual Property Claims, all Employee Claims and all Other Claims, in every case whether the resulting losses, claims or demands, as the case may be, arise from or relate to conditions existing or events occurring on or before the Closing Date.

 

“ Assumed Liabilities ” has the meaning set forth in Section 2.3.

 

“ Audit ” has the meaning set forth in Section 5.20(b)(i).

 

“ Audited Financial Statements ” has the meaning set forth in Section 3.16(a)(i).

 

“ Bankruptcy Exceptions ” means the extent to which enforcement of an agreement, instrument or other document: (a) may be limited by bankruptcy, insolvency (including all laws

 

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relating to fraudulent transfers), reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally; and (b) is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

 

“ Bulk Sales Laws ” has the meaning set forth in Section 5.10.

 

“ Business ” has the meaning set forth in the third recital to this Agreement.

 

“ Business Agreements ” has the meaning set forth in Section 3.10(b).

 

“ Business Loss ” has the meaning set forth in Section 2.5(c).

 

“ Business Records ” means all books, records, manuals, documents, books of account, correspondence, sales and credit reports, supplier lists, customer lists, distributor lists, bid and quote information, literature, catalogs, brochures, advertising material, financial information and operating data and the like of the members of the Seller Group.

 

“ business day ” means each day other than a Saturday, Sunday or other day in the City of Houston, Texas on which national banks are authorized by law or regulation not to open for business.

 

“ Buyer ” has the meaning set forth in the introductory paragraph of this Agreement.

 

“ Buyer Entities ” means, collectively, Parent and Buyer.

 

“ Buyer FSA ” has the meaning set forth in Section 5.18(c).

 

“ Buyer Indemnified Parties ” has the meaning set forth in Section 7.2(a).

 

“ Buyer Indemnified Tax Liabilities ” has the meaning set forth in Section 5.14(a).

 

“ C Corporation ” means each Corporate Subsidiary that is referenced with a single asterisk in Section 3.1(b) of the Disclosure Schedule.

 

“ CERCLA ” has the meaning set forth in the definition of “Environmental Law.”

 

“ Claim Notice ” has the meaning set forth in Section 7.2(c).

 

“ Claim of Environmental Liability ” means all claims, liabilities, obligations, judgments, penalties, expenses, losses or damages (including natural resource damages) relating to the Business or the assets comprising the Business resulting from: (a) any suit, action, administrative proceeding, notice, investigation or demand asserted or threatened by any third-party (including any governmental agency or authority) arising under any Environmental Law; (b) requirements imposed by any Environmental Law, including costs of remediation or costs incurred in obtaining applicable permits or complying with any Environmental Law; or (c) the presence or release into the environment of any Hazardous Substances.

 

“ Closing ” has the meaning set forth in Section 6.1.

 

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“ Closing Date ” means the date and effective time at which the Closing occurs.

 

“ Code ” means the Internal Revenue Code of 1986, as amended.

 

“ Collective Bargaining Agreement ” means a collective bargaining agreement relating to the Business to which a member of the Seller Group is a party and which is listed in Section 1(a) of the Disclosure Schedule.

 

“ Commitment Letters ” has the meaning set forth in Section 4.5.

 

“ Confidentiality Agreement ” means the Confidentiality Agreement dated September 9, 2004 between Apollo Management V, L.P., an affiliate of Buyer Entities, and Goldman, Sachs & Co. on behalf of Seller.

 

“ Consolidated Corporate Subsidiaries ” means those Corporate Subsidiaries that are referenced with a cross in Section 3.1(b) of the Disclosure Schedule.

 

“ Contracts ” means all contracts, agreements, commitments, and leases of personal property (including computer equipment and programs), whether oral or written, with customers, suppliers, vendors, lessors, lessees, utilities, providers or others entered into by a member of the Seller Group, including those Contracts listed in Section 3.10(a) of the Disclosure Schedule but excluding any Contract identified as an Excluded Asset or any Excluded Liability.

 

“ Corporate Subsidiaries ” means those First Tier Subsidiaries and Second Tier Subsidiaries that have been organized as corporations under the applicable corporation law of one of the states of the United States or a foreign state, province or country and that are listed in Section 3.1(b) of the Disclosure Schedule.

 

“ Credit Agreement ” means the Fourth Amended and Restated Credit Agreement dated as of November 21, 2003 among Seller and certain other members of the Seller Group, the Lenders and the other parties thereto.

 

“ Disclosure Schedule ” means the Disclosure Schedule, dated as of the date of this Agreement, delivered by Seller to Buyer Entities, as amended and updated pursuant to Section 5.13.

 

“ E&I Indemnitees ” has the meaning set forth in Section 7.6(a).

 

“ E&I Provisions ” has the meaning set forth in Section 7.6(a).

 

“ Employee Claims ” means all claims, charges, demands, grievances, complaints, proceedings and other similar matters relating to the employment of any person by a member of the Seller Group, including those reflected in any subsection of Section 3.11 to the Disclosure Schedule.

 

“ Employees ” has the meaning set forth in Section 5.18(a)(ii).

 

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“ Encumbrances ” means any mortgages, deeds of trust, liens, security interests, encumbrances, claims, pledges, assignments, charges, options, preferential arrangements, rights of tenants or others, rights of first refusal or other title retention agreements, easements, defects in title, covenants, conditions or other restrictions of any nature whatsoever, including any restriction on the use, transfer or receipt of income or other exercise of any attributes of ownership.

 

“ Environmental Exposure Claim ” means any third party lawsuits, claims or demands alleging bodily injury, adverse health effects or death, or seeking medical monitoring, arising out of or related to an exposure to any Release of Hazardous Substance related to the operations of the Business.

 

“ Environmental Law ” means any federal, state, or local law, rule, regulation, order, ordinance, writ, judgment, injunction, decree, Permit or determination applicable to the Business to the extent relating to the protection of the environment, the preservation or reclamation of natural resources, worker health and safety, the release or threatened release of or exposure to any Hazardous Substances into the environment, the generation, management, handling, use, manufacture, distribution, formulation, packaging, labeling, transportation, storage, treatment and disposal of Hazardous Substances, or the pollution of air, soil, groundwater or surface water (including the Clean Air Act, the Toxic Substance Control Act, the Clean Water Act, the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), the Occupational Safety and Health Act (“OSHA”) and the Resource Conservation and Recovery Act (“RCRA”), or their state counterparts or analogues, and any non-U.S. laws of similar import and all amendments or regulations promulgated thereunder, and any common law doctrine, including, but not limited to, negligence, nuisance, trespass, personal injury or property damage related to or arising out of the presence, release, or exposure to Hazardous Substances.

 

“ Environmental Matters ” means (a) any obligation or liability arising under any Environmental Law; (b) any Claim of Environmental Liability; or (c) any Environmental Exposure Claim.

 

“ Equipment ” means all of the machinery, equipment, vehicles, including tractors, trailers and other transportation equipment, owned or leased by a member of the Seller Group, including the items identified on the list set forth in Section 3.4(d) of the Disclosure Schedule, with such additions and deletions as have occurred in the ordinary course of business after the date hereof.

 

“ Equity Interests ” has the meaning set forth in the first recital to this Agreement.

 

“ Equity Securities ” means any shares or other securities or other equity interests which have the right to vote or receive profits from, or any securities convertible into or exchangeable for shares or other securities or other equity interests which have the right to vote or receive profits from, or any other rights, warrants or options to acquire any of the foregoing from, the issuer thereof.

 

“ ERISA ” means the Employee Retirement Income Security Act of 1974.

 

“ Excluded Assets ” has the meaning set forth in Section 2.2.

 

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“ Exchange Offer ” has the meaning set forth in Section 5.20(b).

 

“ Excluded Liabilities ” has the meaning set forth in Section 2.4.

 

“ Family Investor Term Sheet ” has the meaning set forth in the eighth recital to this Agreement.

 

“ Family Investors ” has the meaning set forth in the eighth recital to this Agreement.

 

“ FTC ” means the United States Federal Trade Commission.

 

“ Financing ” means all of the financing arrangements required by Buyer Entities to consummate the transactions contemplated hereby.

 

“ First Tier Subsidiaries ” has the meaning set forth in the first recital to this Agreement.

 

“ Fixtures and Improvements ” means the buildings, structures, fixtures and other fixed assets and personalty of a permanent nature annexed, affixed or attached to Real Property or Leased Property.

 

“ Flow Through Entities ” means the LLC Subsidiaries, the LP Subsidiaries and the QSSS Entities.

 

“ Former Employees ” has the meaning set forth in Section 5.18(a)(i).

 

“ Generally Accepted Accounting Principles ” or “ GAAP ” means generally accepted accounting principles in the United States (as such term is used in the American Institute of Certified Public Accountants Professional Standards).

 

“ Government Authority ” means any United States or non-United States federal, national, supranational, provincial, state, municipal, local or similar government, government authority, regulatory or administrative agency, governmental commission, department, board, bureau, agency or instrumentality, court, tribunal, arbitrator or arbitral body.

 

“ Government Contract ” means any Contract entered into by a member of the Seller Group with any Government Authority.

 

“ Hazardous Substances ” means any hazardous or toxic materials, wastes or chemicals, petroleum or petroleum product or derivative thereof, asbestos or asbestos containing materials, polychlorinated biphenyls (“PCBs”), mold, and all other materials, chemicals or substances which are regulated by, form the basis of liability under, or are defined as or regulated as pollutants, contaminants, hazardous, extremely hazardous, toxic or words of similar import pursuant to, any Environmental Law.

 

“ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

 

“ Incidental Assets ” has the meaning set forth in the fourth recital to this Agreement.

 

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“ Indebtedness ” means, with respect to any person, (a) all indebtedness of such person, whether or not contingent, for borrowed money, (b) all obligations of such person evidenced by notes, loans, letters of credit, mortgages, bonds, debentures or other similar instruments or agreements, (c) all obligations of such person as lessee under leases that have been or should be, in accordance with GAAP, recorded as capital leases, (d) all obligations of such person for breakage and other costs relating to interest rate and currency obligation swaps, hedges or similar arrangements, and (e) all Indebtedness of others referred to in clauses (a) through (d) above guaranteed directly or indirectly in any manner by such person, or in effect guaranteed directly or indirectly by such person.

 

“ Indemnifiable Damages ” means any and all liabilities, losses, claims, judgments, damages, fines, penalties, environmental response costs, natural resource damages, expenses and costs (including reasonable counsel fees and costs and expenses incurred in connection therewith), together with interest thereon from the date such damages are incurred at an interest rate equal to the prime rate in effect on the Closing Date as reported in the national edition of The Wall Street Journal and as revised on each anniversary of the Closing Date by reference to the prime rate reported in the national edition of The Wall Street Journal for such anniversary date or, if the anniversary date falls on a Saturday, Sunday or other day on which The Wall Street Journal is not published, the next day on which The Wall Street Journal is published.

 

“ Indemnitor ” has the meaning set forth in Section 7.2(c).

 

“ Insurance Proceeds ” means those monies (a) received by a member of the Seller Group (other than Seller) from an insurance carrier or (b) paid by an insurance carrier on behalf of a member of the Seller Group (other than Seller), in either case, net of any applicable premium adjustment, retrospectively-rated premium, deductible, retention, or cost of reserve paid or held by or for the benefit of such member of the Seller Group.

 

“ Intellectual Property ” means all: (a) United States and foreign patents, patent applications, and patent disclosures, together with all continuations, continuations in part, divisions, reissues, revisions, extensions and reexaminations thereof and all inventions and designs (whether patentable or unpatentable and whether or not reduced to practice) and improvements thereto; (b) United States and foreign trademarks, service marks, trade dress, logos, trade names, brand names, and corporate names, and any other source-identifying designations or devices, including Internet domain names and registrations thereof, along with all translations, adaptations, derivations and combinations thereof, and including all goodwill associated with the foregoing and registrations and applications and renewals associated with any of the foregoing; (c) works of authorship (whether or not copyrightable and whether or not published) including, without limitation, all product manuals, marketing brochures, training materials and web site content, and all United States and foreign copyrights and registrations and applications for registration thereof; (d) mask works and registrations and applications for registration thereof; (e) computer software (in both source code and object code form), data and documentation; (f) trade secrets and confidential business information (including ideas, formulas, and compositions, know-how, manufacturing and production processes and techniques, research and development information, software products in development, drawings, specifications, designs, plans, proposals, technical data, financial (excluding employee benefit plans), marketing, and business data, pricing and cost information, business and marketing plans, and

 

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customer and supplier lists and information) and other proprietary information; and (g) copies and tangible embodiments thereof (in whatever form or medium).

 

“ Intellectual Property Claims ” has the meaning set forth in Section 3.7(b).

 

“ Interim Balance Sheet ” has the meaning set forth in Section 3.16(a)(ii).

 

“ Interim Financial Statements ” has the meaning set forth in Section 5.20.

 

“ Inventory ” means all of the inventory of raw materials, work-in-process, parts, scrap, wrapping, operating supplies and packaging items and finished goods (including any in-transit or mill direct inventory, obsolescences and other inventory reserves, and lower of FIFO cost or market inventory reserves, but excluding all LIFO reserves) of the members of the Seller Group, except for (a) such finished goods as have been purchased by customers of members of the Seller Group and are being held, stored or retained for such customers and (b) all supplies and raw materials owned by third parties.

 

“ JAMS ” has the meaning set forth in Section 7.3.

 

“ Knowledge ” as used in the phrases “to the knowledge of Seller,” or “to Seller’s knowledge” or similar references to the knowledge of Seller means the actual knowledge of those persons set forth in Section 1(b) of the Disclosure Schedule.

 

“ Leased Property ” means those parcels of real property leased by a member of the Seller Group (as tenant) pursuant to the Leases, together with (a) all of such member’s right, title and interest in and to the Fixtures and Improvements located on such real property, if any, (b) all of such member’s right, title and interest in and to all easements, rights, and privileges appurtenant thereto, if any, and (c) all options to renew or extend the term of such Leases or to purchase all or any part of such real property, if any.

 

“ Leases ” means all leases and subleases of real property listed in Section 3.4(b) of the Disclosure Schedule, including any amendments or modifications thereto, and “Lease” means any one of them.

 

“ Lenders ” means the lending institutions that are parties to the Credit Agreement.

 

“ License Agreements ” has the meaning set forth in Section 3.7(a)(ii).

 

“ LLC Subsidiaries ” means those First Tier Subsidiaries and Second Tier Subsidiaries that have been formed as limited liability companies or unlimited liability companies under the applicable business organization law of one of the states of the United States or one of the provinces of Canada and that are listed in Section 3.1(c) of the Disclosure Schedule.

 

“ LP Interest ” has the meaning set forth in the last paragraph of Section 2.1.

 

“ LP Subsidiaries ” means those Second Tier Subsidiaries that have been formed as limited partnerships under the applicable limited partnership law of one of the states of the United States and that are listed in Section 3.1(d) of the Disclosure Schedule.

 

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“ Management Investor Term Sheet ” has the meaning set forth in the seventh recital of this Agreement.

 

“ Management Investors ” has the meaning set forth in the seventh recital of this Agreement.

 

“ Material Adverse Effect ” means any occurrence, event or circumstance that, individually or in the aggregate, is, or could reasonably be expected to be, materially adverse to (i) the business, condition (financial or otherwise), assets, liabilities or operations of the members of the Seller Group, considered as a whole, or (ii) the ability of Seller to consummate or perform the transactions contemplated hereby; in each case other than adverse effects from events, changes or occurrences (a) in the general economy or capital markets in the United States, (b) generally affecting other persons engaged in the same business as the Business and not disproportionately affecting the Business, or (c) arising from the announcement of the pendency of the Transaction.

 

“ Material Leased Property ” means those certain parcels of Leased Property leased by a member of the Seller Group (as tenant) pursuant to the Material Leases.

 

“ Material Leases ” means the Leases that are marked with an asterisk on Schedule 3.4(b) of the Disclosure Schedule.

 

“ Maximum Premium ” has the meaning set forth in Section 7.6(b).

 

“ Monthly Capital Expenditures Budget ” has the meaning set forth in Section 3.17(b)(xi).

 

“ Monthly Financial Statements ” has the meaning set forth in Section 5.20.

 

“ Multiemployer Plan ” means a multiemployer plan as defined in section 3(37) of ERISA.

 

“ Neutral Accountants ” means KPMG LLC, or any other firm of independent certified public accountants that is mutually acceptable to Seller and Buyer.

 

“ Organizational Documents ” means (a) the charter documents and bylaws of Seller and the Corporate Subsidiaries, (b) the certificates of formation, articles of organization, limited liability company agreements or regulations, as applicable, of the LLC Subsidiaries and (c) the certificates of limited partnership and the agreements of limited partnership of the LP Subsidiaries.

 

“ Other Claims ” means all matters of the type referred to in Section 3.5 other than Claims of Environmental Liability, Environmental Exposure Claims, Product Liability Claims, Product Warranty Claims, Workers’ Compensation Claims, Intellectual Property Claims and Employee Claims.

 

“ Other Current Assets ” means all prepaid and deferred items (including prepaid rent and other prepaid expenses), credits and deposits, rights of offset and credits and claims for

 

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refund (other than Tax refunds arising from or pertaining to the Pre-Closing Tax Period) generated or incurred by the members of the Seller Group.

 

“ Overlap Period ” means any Tax Period that includes but does not end on the Closing Date.

 

“ Overlap Period Tax Proceeding ” has the meaning set forth in Section 5.14(i).

 

“ PBCs ” has the meaning set forth in the definition of Hazardous Substances.

 

“ Parent ” has the meaning set forth in the introductory paragraph of this Agreement.

 

“ Past Service ” has the meaning set forth in Section 5.18(b)(ii).

 

“ Permits ” means licenses, certificates, permits, franchises, approvals, authorizations, consents, orders or exemptions of, agreements, filings and registrations with, and notifications to any Government Authority and other similar authorizations and rights relating to the Business.

 

“ Permitted Encumbrances ” means all Encumbrances arising in connection with the Credit Agreement, which will not survive the Closing.

 

“ Permitted Exceptions ” means:

 

(a) all liens for Taxes and assessments, both general and special, and other governmental charges which are not yet due and payable;

 

(b) all liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security;

 

(c) all licenses, including those relating to Intellectual Property, granted by a member of the Seller Group in connection with sales of products in the ordinary course of business, consistent with past practice but not including any such license granting any third person the sole or exclusive right to use the Intellectual Property of any member of the Seller Group in any geographic area or with respect to a particular line of business;

 

(d) all land use (including environmental and wetlands regulations), building and zoning codes and ordinances, and other laws, ordinances, regulations, rules, orders, licenses or determinations of any federal, state, county, municipal or other governmental authority heretofore, now or hereafter enacted, made or issued by any such authority affecting any parcel of real property or any leasehold interest in real property, as the case may be;

 

(e) all easements, rights-of-way, covenants, conditions, restrictions, reservations, real property licenses and agreements, and other matters of record affecting any parcel of real property or any leasehold interest in real property, which individually or in the aggregate do not materially adversely affect the present use, ownership or value of such parcel or leasehold interest;

 

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(f) all encroachments, overlaps, overhangs, unrecorded easements, or any other matters not of record with respect to a parcel of real property or a leasehold interest in real property, which individually or in the aggregate do not materially adversely affect the present use, ownership or value of such parcel or leasehold interest;

 

(g) all electric power, telephone, gas, sanitary sewer, storm sewer, water and other utility lines, pipelines, service lines, and facilities of any nature on, over or under any parcel of real property or leasehold interest in real property, which individually or in the aggregate do not materially adversely affect the present use, ownership or value of such parcel or leasehold interest;

 

(h) all existing public and private roads and streets (whether dedicated or undedicated), and all railroad lines and rights-of-way affecting any parcel of real property or leasehold interest in real property, which individually or in the aggregate do not materially adversely affect the present use, ownership or value of such parcel or leasehold interest;

 

(i) prior reservations or conveyances of mineral rights or mineral leases of every kind and character;

 

(j) statutory liens of landlords, statutory liens of banks and rights of setoff, carriers’, warehousemen’s, mechanics’, materialmen’s, workmen’s, repairmen’s, employees’ and other like liens imposed by law, arising in the ordinary course of business and securing obligations that are not yet due and payable; and

 

(k) with respect to each parcel of real property or leasehold in real property owned or leased by any member of the Seller Group, other imperfections of title, easements and encumbrances (other than items for the payment of Indebtedness which encumber the parcel or leasehold interest, if any), which do not materially adversely affect the marketability, mortgageability or insurability of title to such parcel or leasehold interest or materially detract from the value of or materially interfere with the present use or ownership of such parcel or leasehold interest.

 

“ person ” means a natural person, corporation, general or limited partnership, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization, Government Authority or other legal entity.

 

“ Post-Closing Tax Period ” means any Tax Period beginning after the Closing Date and that portion of any Overlap Period beginning after the Closing Date.

 

“ Pre-Closing Tax Period ” means any Tax Period ending on or before the Closing Date and that portion of any Overlap Period ending on the Closing Date.

 

“ Product Liability Claims ” means all product liability claims or other claims for injury to person or property or financial interest resulting from or relating to products of the Business, whether based on theories of tort, contract, strict liability, express or implied warranty or otherwise.

 

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“ Product Warranty Claims ” means: (a) all demands for refunds, returns or allowances pertaining to products of the Business, without regard to the date of manufacture, shipment or sale of the product or the design of the product in question; and (b) all claims (other than Product Liability Claims) asserted in accordance with warranties and guarantees issued by any member of the Seller Group.

 

“ Pro Forma Target Liabilities ” means any liability reflected on the pro forma balance sheet used by Seller to determine the Target Adjusted Working Capital, which liability is an Excluded Liability or which is a liability that is expected to be paid or discharged in connection with the Closing, including, without limitation, any liability in respect of hedging obligations in connection with Seller’s existing credit agreement. The amount of such liability shall be the amount so reflected on such pro forma balance sheet used by Seller and Buyer Entities to determine the Target Adjusted Working Capital.

 

“ Purchase Price ” has the meaning set forth in Section 2.5(a).

 

“ Purchased Assets ” has the meaning set forth in Section 2.1.

 

“ QSSS Entities ” means each Corporate Subsidiary that is referenced with a double asterisk in Section 3.1(b) of the Disclosure Schedule.

 

“ RCRA ” has the meaning set forth in the definition of “Environmental Law.”

 

“ Real Property ” means the parcels of real property owned by members of the Seller Group, including those more particularly described in Section 3.4(a) of the Disclosure Schedule, together with: (a) the Fixtures and Improvements located thereon; (b) all easements, rights and privileges appurtenant thereto; (c) any interest held in land in the bed of any street or road in front of or adjoining such real property; and (d) any reversionary rights attributable thereto.

 

“ Receivables ” means all of the accounts receivable, notes receivable and advance payments generated or incurred by members of the Seller Group (including allowances for deductions from remittances, airline travel advances, employee advances, rebates receivable, deposits on bids, other receivables and claims receivables, less allowances for doubtful accounts and excluding intercompany receivables).

 

“ Release ” means any actual or threatened spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, abandoning or migrating into the environment.

 

“ SEC ” has the meaning set forth in Section 5.20(b)(ii).

 

“ Second Tier Equity Interests ” has the meaning set forth in the second recital to this Agreement.

 

“ Second Tier Subsidiaries ” has the meaning set forth in the second recital to this Agreement.

 

“ Section 2.4 Employee Obligations ” has the meaning set forth in Section 2.4(e).

 

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“ Seller ” has the meaning set forth in the introductory paragraph of this Agreement.

 

“ Seller FSA ” has the meaning set forth in Section 5.18(c).

 

“ Seller Group ” means collectively Seller and the Subsidiaries.

 

“ Seller Indemnified Parties ” has the meaning set forth in Section 7.2(b).

 

“ Seller Indemnified Tax Liabilities ” has the meaning set forth in Section 5.14(a).

 

“ Seller’s Benefit Plans ” has the meaning set forth in Section 3.11(b).

 

“ Series A Stock ” has the meaning set forth in the sixth recital to this Agreement.

 

“ Series B Stock ” means the shares of Series B Common Stock, $0.01 par value, of Seller.

 

“ Shares ” has the meaning specified in Section 3.1(g).

 

“ Signatory Member ” has the meaning set forth in Section 3.10(b).

 

“ Statement of Net Working Capital ” has the meaning set forth in Section 2.6(a).

 

“ Subsidiaries ” has the meaning set forth in the fourth recital to this Agreement.

 

“ Target Adjusted Working Capital ” means Two Hundred Thirty Eight Million Dollars ($238,000,000).

 

“ Tax or Taxes ” means all taxes, assessments, charges, duties, fees, levies, imposts or other governmental charges, including all federal, state, local, municipal, county and other income, franchise, profits, capital gains, capital stock, capital structure, alternative or add on minimum, gross receipts, sales, use, service, ad valorem, energy, employment, property, excise, occupation, capital, environmental, severance, production, windfall profits, premium, transfer, workers’ compensation, social security, stamp, payroll, unemployment, disability, withholding or similar taxes and any other tax or other governmental fee, duty, assessment or charge of any kind whatsoever imposed by any country or political subdivision thereof (whether payable directly or by withholding), and all estimated taxes, deficiency assessments, additions to tax and additional amounts imposed by any governmental authority (domestic or foreign), together with all interest and all penalties imposed with respect thereto.

 

“ Tax Authority ” means any Government Authority or any subdivision, agency, commission or authority thereof, or any quasi-governmental or private body having jurisdiction over the assessment, determination, collection or imposition of any Tax.

 

“ Tax Period ” means any period prescribed by any Tax Authority for which a Tax Return is required to be filed or a Tax is required to be paid.

 

“ Tax Proceeding ” has the meaning provided such term in Section 5.14(h).

 

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“ Tax Return ” means any report, return, election, document, estimated tax filing, declaration or other filing provided to any Tax Authority or jurisdiction with respect to Taxes, including any amendments thereto.

 

“ Third Party Claim ” has the meaning set forth in Section 7.2(c).

 

“ Transaction ” has the meaning set forth in the fifth recital to this Agreement.

 

“ Transferring Employees ” has the meaning set forth in Section 5.18(a)(i).

 

“ Unconsolidated Corporate Subsidiaries ” means those Corporate Subsidiaries that are referenced with a triangle in Section 3.1(b) of the Disclosure Schedule.

 

“ WARN ” means the Worker Adjustment and Retraining Notification Act of 1988.

 

“ Workers’ Compensation Claims ” means any and all claims under workers’ compensation laws in respect of or arising in connection with occurrences involving employees of a member of the Seller Group.

 

“ Working Capital Adjustment Estimate ” has the meaning set forth in Section 2.5(b).

 

“ Working Capital Estimate ” has the meaning set forth in Section 2.5(b).

 

ARTICLE II

PURCHASE AND SALE OF ASSETS

 

Section 2.1 Purchase and Sale.

 

On the terms and subject to the satisfaction or waiver of the conditions set forth herein and as partial consideration for receipt of payment of the Purchase Price, at the Closing Seller shall sell, transfer, convey, assign and deliver to Buyer and Buyer shall, and Parent shall cause Buyer to, purchase, acquire and accept from Seller, all of the Equity Interests, free and clear of all Encumbrances, and all of its right, title and interest in, to and under all of the Incidental Assets, other than the Excluded Assets, free and clear of all Encumbrances, other than Permitted Exceptions (collectively with the Equity Interests, sometimes, the “Purchased Assets”), including, without limitation, all right, title and interest of Seller in, to and under:

 

(a) all of the assets of Seller reflected on the Interim Balance Sheet, except those disposed of or converted into cash after the date of such balance sheet in the ordinary course of business consistent with past practices, including (i) the outstanding Equity Interests, (ii) the Incidental Assets set forth in Section 2.1(a)(ii) of the Disclosure Schedule and (iii) the Business as a going concern and all goodwill of Seller associated with the Business;

 

(b) the name “Goodman” and any derivations thereof and associated logos, and all goodwill associated with the foregoing; provided, however, that the foregoing shall not prevent any member of the Goodman family from using the Goodman name in a business that does not and could not reasonably be expected to (i) compete with the Business or (ii) in any way detract from or impair the value of the Business.

 

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(c) all rights of Seller under the APA Agreement; and

 

(d) except for the Excluded Assets, all other assets, tangible or intangible, owned by Seller, including (i) all past, present and future claims, chooses in action and rights of action by Seller against third parties arising from events, acts, omissions or circumstances on or before the Closing Date; (ii) all claims for refunds (other than Taxes) of governmental charges or assessments arising from or pertaining to periods, activities, operations or events occurring on or prior to the Closing Date; and (iii) all insurance policies (and the proceeds therefrom) providing coverage for the Business, the Subsidiaries, the Purchased Assets and the Assumed Liabilities.

 

In furtherance of the foregoing, Seller shall cause Goodman Holding Company, L.L.C. to sell, transfer, convey, assign and deliver directly to Buyer its entire limited partner interest in Goodman Manufacturing Company, L.P. (the “LP Interest”) immediately prior to the purchase of the Equity Interests of Goodman Holding Company, L.L.C. by Buyer or a designated affiliate of Buyer.

 

Section 2.2 Excluded Assets.

 

The assets listed below shall be retained by Seller and shall not be transferred to or assumed by Buyer (the “Excluded Assets”):

 

(a) any cash, bank deposits, cash equivalents or similar cash items held by Seller;

 

(b) all of Seller’s claims for refunds of Taxes arising from or pertaining to Pre-Closing Tax Periods, which are not included in the determination of Adjusted Working Capital;

 

(c) any books and records of Seller that Seller is required by law to retain; provided that Seller shall provide Buyer with copies of such retained books and records that relate to the Business or any of the Purchased Assets;

 

(d) the assets, if any, of Seller set forth in Section 2.2(d) to the Disclosure Schedule; and

 

(e) all rights of Seller pursuant to this Agreement and the instruments delivered hereunder.

 

Section 2.3 Assumed Liabilities.

 

As partial consideration for consummation of the Transaction, at the Closing Buyer shall, and Parent shall cause Buyer to, assume and agree to perform all the debts, obligations and liabilities of Seller, whether known, unknown, fixed, contingent or otherwise, including without limitation the following (the “Assumed Liabilities”), other than Excluded Liabilities:

 

(a) all liabilities, obligations, costs and expenses of Seller arising out of or relating to the operation of the Business (other than Taxes), including those that relate to or arise out of the performance of Seller’s Contracts, Leases, Permits and other commercial arrangements set forth in Section 2.3(a) of the Disclosure Schedule and Seller’s guarantees of the obligations of its Subsidiaries under their Contracts, Leases, Permits and other commercial arrangements;

 

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(b) all Accounts Payable of Seller;

 

(c) all Assumed Claims relating to Seller;

 

(d) all obligations and liabilities of Seller under the APA Agreement;

 

(e) all obligations and liabilities of Seller under the indemnity agreements with its directors, executive officers and others set forth in Section 2.3(e) of the Disclosure Schedule relating to or arising from events occurring on or prior to the Closing Date;

 

(f) all obligations and liabilities of Seller under Seller’s Benefit Plans other than the Section 2.4 Employee Obligations (to the maximum extent permitted by law); and

 

(g) all Permitted Exceptions, and all other Encumbrances other than Permitted Encumbrances, obligations and liabilities that are expressly identified as Assumed Liabilities in this Agreement or in the Disclosure Schedule.

 

Section 2.4 Excluded Liabilities.

 

Seller shall retain the following debts, obligations and liabilities (known, unknown, fixed, contingent or otherwise) of Seller (the “Excluded Liabilities”):

 

(a) except as contemplated by Section 2.9 below, any liability of Seller for Taxes, and any penalties, interest, fines or assessments with respect thereto, for Pre-Closing Tax Periods;

 

(b) obligations or expenses of Seller in connection with the Transaction, including, without limitation, legal and accounting fees and expenses and brokerage and finders’ fees due including obligations under its agreements and arrangements with Goldman, Sachs & Co.;

 

(c) all obligations in respect of Indebtedness of Seller, including Indebtedness, obligations or expenses of Seller under the Credit Agreement;

 

(d) those liabilities retained by Seller pursuant to Section 5.14;

 

(e) the liabilities or obligations of Seller to employees pursuant to the Seller’s Benefit Plans set forth in Section 2.4(e) to the Disclosure Schedule (the “Section 2.4 Employee Obligations”) or to the employees set forth in Item 1, Section 5.18(a) of the Disclosure Schedule;

 

(f) all liabilities and obligations relating to the Excluded Assets;

 

(g) all liabilities and obligations relating to any shareholder agreements, voting rights agreements or other agreements, Indebtedness or obligations to any direct or indirect shareholder of Seller or any termination (or negotiations leading to the termination) thereof;

 

(h) the liabilities and obligations, if any, of Seller set forth in Section 2.4(h) to the Disclosure Schedule; and

 

(i) all other liabilities or obligations undertaken by Seller pursuant to the other provisions of this Agreement and the instruments delivered hereunder.

 

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Section 2.5 Purchase Price.

 

(a) Subject to any adjustment in accordance with this Section 2.5, Section 2.6 or Section 6.2(g), the purchase price (the “Purchase Price”) payable in consideration of the sale, transfer, conveyance, assignment and delivery (i) by Seller of the Equity Interests and the Incidental Assets (in addition to assuming the Assumed Liabilities) and (ii) by Goodman Holding Company, L.L.C. of the LP Interest shall be an amount equal to $1,422,500,000 (a portion of which shall be allocated to the agreement not to compete in Section 5.15, such amount to be set forth on the Allocation Schedule). Buyer will pay the Purchase Price (as adjusted in accordance with Section 2.5(b) and/or Section 6.2(g)) to Seller at Closing, by wire transfer in immediately available funds to an account designated by John B. Goodman on behalf of Seller.

 

(b) At least ten (10) days prior to the Closing, Seller shall deliver to Buyer its good faith estimate of the Adjusted Working Capital (the “Working Capital Estimate”), together with reasonably detailed supporting documentation and work papers. If the Working Capital Estimate minus the Target Adjusted Working Capital (such difference, which may be a positive or negative number, the “Working Capital Adjustment Estimate”) (A) is equal to a negative number, at Closing the Purchase Price payable by Buyer shall be decreased by an amount equal to the absolute value of the Working Capital Adjustment Estimate, or (B) is equal to a positive number, at Closing the Purchase Price payable by Buyer shall be increased by an amount equal to the Working Capital Adjustment Estimate. Except as specifically provided in the definitions thereof, the Working Capital Estimate, Adjusted Working Capital and all components thereof shall be prepared from the books and records of the members of the Seller Group in accordance with GAAP, applied on a consistent basis and shall present fairly the financial position of the members of the Seller Group as of the Closing Date.

 

(c) If between the date of this Agreement and the Closing Date, there is any loss, destruction or other physical damage to any real property or personal property of any member of the Seller Group (other than Excluded Assets or substantially immaterial personal property) resulting from a fire, accident or other casualty, whether or not insured, or any taking of any such real property by condemnation (collectively, a “Business Loss”), then Seller shall promptly give notice to Buyer of such Business Loss. The Purchase Price shall be reduced by an amount equal to a binding estimate to be obtained by Seller from a qualified construction contractor or other expert reasonably satisfactory to Buyer of the cost required for such contractor or expert on a fixed-bid basis to restore such real property or personal property substantially to its condition prior to such Business Loss, or the reasonably estimated value of the member of the Seller Group’s interest in any condemned real property, plus in each case an amount sufficient to compensate Buyer for the business interruption related to such Business Loss subsequent to the Closing, as determined by such expert, less the aggregate amount of Insurance Proceeds (including business interruption Insurance Proceeds) paid over or assigned to Buyer in respect thereof on or prior to the Closing Date. The member of the Seller Group that suffered the Business Loss shall also assign to Buyer at the Closing the right to any business interruption Insurance Proceeds, if any, received by such member of the Seller Group with respect to such Business Loss applicable to periods subsequent to the Closing.

 

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Section 2.6 Determination of Adjusted Working Capital.

 

(a) As promptly as practical after the Closing Date, and in any event no later than 60 days thereafter, Buyer shall prepare and deliver to Seller an unaudited statement of working capital with respect to the Business as of the Closing Date, but immediately prior to the Closing and prior to giving effect to any purchase accounting adjustments made by Buyer (the “Statement of Net Working Capital”), showing the Adjusted Working Capital determined in a manner consistent with this Agreement, including the last sentence of Section 2.5(b).

 

(b) After Buyer’s delivery to Seller of the Statement of Net Working Capital, Seller and its representatives shall be afforded the opportunity to review and inspect at reasonable times all of the financial records, work papers, schedules and other supporting papers relating to the preparation of the Statement of Net Working Capital and to consult with Buyer and its representatives, if necessary, regarding the methods used in the preparation of the Statement of Net Working Capital.

 

(c) The Adjusted Working Capital as shown on the Statement of Net Working Capital prepared by Buyer shall be final, conclusive and binding for purposes of this Agreement, unless Seller shall give written notice of disagreement with any values thereon within 20 business days following its receipt of the Statement of Net Working Capital, specifying in reasonable detail the nature and extent of such disagreement; provided that the basis of any such disagreement shall be limited to the failure of the calculation of Adjusted Working Capital to have been determined on a basis consistent with the last sentence of Section 2.5(b). Seller shall not be permitted to give a notice of disagreement with respect to the Statement of Net Working Capital prepared by Buyer unless the amount in dispute exceeds Two Hundred Fifty Thousand Dollars ($250,000).

 

(d) If within 60 business days following receipt by Seller of a notice of the type referred to in subsection (c) above, Seller and Buyer, after devoting substantive time and attention to good faith negotiations, are unable to resolve any disagreement with respect to the Statement of Net Working Capital so that the amount then disputed by Seller exceeds Two Hundred Fifty Thousand Dollars ($250,000), the disagreement shall be submitted for resolution to the Neutral Accountants. The Neutral Accountants shall act as an arbitrator to determine and resolve only those issues still in dispute. The Neutral Accountants’ resolution shall be made within 30 days of the submission of the dispute unless the parties mutually agree otherwise, shall be in a manner which is consistent with this Agreement, including Section 2.5(b), shall be set forth in a written statement delivered to Seller and Buyer setting forth the reasons for their determination, and shall be final, conclusive and binding on Seller and Buyer.

 

The fees and expenses of the Neutral Accountants in connection with any such determination shall be apportioned between Seller and Buyer by the Neutral Accountants based upon the inverse proportion of disputed amounts resolved in favor of each party (i.e. so that the prevailing party bears a lesser amount of such fees and expenses). Otherwise, Buyer and Seller shall each pay their own costs incurred in connection with this Section 2.6, including the fees and expenses of their respective accountants and legal counsel, if any.

 

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Section 2.7 Payment of Adjusted Purchase Price.

 

Promptly following the final determination of Adjusted Working Capital as provided in Section 2.6, but in no event later than ten days after such determination:

 

(a) if the Adjusted Working Capital minus the Target Working Capital (such difference, which may be a positive or negative number, the “Working Capital Adjustment”) is greater than the Working Capital Adjustment Estimate, Buyer shall wire transfer in immediately available funds to Seller an amount equal to such difference; or

 

(b) if the Working Capital Adjustment is less than the Working Capital Adjustment Estimate, Seller shall wire transfer to Buyer in immediately available funds the amount of such excess.

 

Any payment required to be made pursuant to this Section 2.7 shall be made together with interest thereon from the Closing Date to the date of payment at the rate of interest per annum equal to the prime rate in effect on the Closing Date as reported in the national edition of The Wall Street Journal . All wire transfers hereunder shall be to such account as the recipient thereof may designate in writing for that purpose.

 

Section 2.8 Allocation of Purchase Price.

 

Buyer and Seller agree that the Purchase Price shall be allocated among the assets included in the Purchased Assets and the covenant not to compete granted pursuant to Section 5.15 in accordance with a schedule (the “Allocation Schedule”), which shall be agreed upon by Seller and Buyer at least five days prior to the Closing Date, unless extended by mutual agreement. The Allocation Schedule shall further reallocate the portion of the Purchase Price allocated to each Flow-Through Entity among that entity’s respective assets in accordance with Section 2.8 of the Disclosure Schedule. Seller and Buyer shall supplement such schedule at the Closing to reflect the composition of the Purchased Assets actually delivered by Seller to Buyer pursuant hereto. The Allocation Schedule shall be reasonable and shall be prepared in accordance with Section 1060 of the Code and the Treasury Regulations promulgated thereunder. Seller and Buyer agree to complete and timely file Internal Revenue Service Form 8594 in accordance with the Allocation Schedule (as agreed upon by the Buyer and Seller pursuant to this Section 2.8) and to furnish each other with a copy of such form prepared in draft form at least 45 days prior to the filing due date of such form. Neither Seller nor Buyer shall file any return or take a position with any taxing authority that is inconsistent with the Allocation Schedule, unless required by law. Seller and Buyer also agree to revise such Form 8594 after all adjustments, if any, have been made to the Purchase Price in accordance with Section 2.6.

 

Section 2.9 Certain Costs, Fees and Expenses.

 

Each of Seller and Buyer shall pay one-half of: (a) all costs and expenses relating to any estoppel agreements from the lessors of the Leased Property reasonably required by Buyer; (b) all necessary consents and approvals required for the transfer of any Intellectual Property of Seller; (c) all filing fees required in connection with filing of the Notification and Report Forms under the HSR Act; and (d) any sales, use, transfer, value added (to the extent not creditable), stock, documentary and real property transfer Tax, fees or similar Taxes or charges and all

 

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recording and filing fees that may be imposed, assessed against or incurred by either party to this Agreement as a result of the Transaction; provided, however, that the parties to this Agreement shall fully cooperate with each other to minimize the aggregate amounts that would otherwise be payable under this Section 2.9 (including the filing of any bulk or occasional sales notification or similar filings with the appropriate Tax Authorities).

 

Section 2.10 Receipts After Closing.

 

After the Closing, Seller may receive funds, proceeds, contributions, refunds, rebates, payments or receipts that are attributable to the Purchased Assets and are properly allocable to Buyer under the terms of this Agreement. Seller agrees to remit or cause to be remitted any of the foregoing to Buyer promptly upon receipt. Buyer agrees to remit to Seller promptly upon Buyer’s receipt, any funds, proceeds, contributions, rebates, payments or receipts that are attributable to the Excluded Assets and are properly allocable to Seller under the terms of this Agreement. After the Closing, Seller may receive invoices, bills, statements and other claims for the costs attributable to the operation of the Business that are properly payable by Buyer. Any of the foregoing received by Seller will be promptly forwarded to Buyer.

 

Section 2.11 Withholding Taxes.

 

Buyer shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement such amounts as it is required to deduct and withhold with respect to the making of such payment under the Code and the rules and regulations promulgated thereunder, or any provision of state, local or foreign tax law. To the extent that amounts are so withheld by the Buyer, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Seller.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller, recognizing that each Buyer Entity is relying on the contents of this Article III as a material inducement to its execution, delivery and performance of this Agreement, hereby represents and warrants to and covenants and agrees with each Buyer Entity as of the date hereof and as of the Closing Date, or if a different date is set forth in such representation and warranty, as of such date, as follows:

 

Section 3.1 Organization, Good Standing, Authority and Capitalization.

 

(a) Incorporation and Good Standing of Seller. Seller is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Texas, is duly qualified to do business and in good standing as a foreign corporation in each jurisdiction set forth in Section 3.1(a) of the Disclosure Schedule, being the only jurisdictions in which its ownership of properties or the conduct of its business requires such qualification (except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect), and has the corporate power and authority necessary to own, lease or license and operate its properties and assets and to conduct the aspects of the Business in which it is engaged as currently conducted.

 

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(b) Incorporation and Good Standing of Corporate Subsidiaries. Each of the Corporate Subsidiaries is a corporation duly incorporated, validly existing and in good standing under the laws of the state of its incorporation set forth in Section 3.1(b) of the Disclosure Schedule, is duly qualified to do business and in good standing as a foreign corporation in each jurisdiction set forth in Section 3.1(b) of the Disclosure Schedule, being the only jurisdictions in which its ownership of properties or the conduct of its business requires such qualification (except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect), and has the corporate power and authority necessary to own, lease or license and operate its properties and assets and to conduct the aspects of the Business in which it is engaged as currently conducted.

 

(c) Organization and Good Standing of LLC Subsidiaries. Each of the LLC Subsidiaries is a limited liability company duly organized, validly existing and in good standing under the laws of the state of its organization set forth in Section 3.1(c) of the Disclosure Schedule, is duly qualified to do business and in good standing as a foreign limited liability company in each jurisdiction set forth in Section 3.1(c) of the Disclosure Schedule, being the only jurisdictions in which its ownership of properties or the conduct of its business requires such qualification (except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect), and has the limited liability company power and authority necessary to own, lease or license and operate its properties and assets and to conduct the aspects of the Business in which it is engaged as currently conducted.

 

(d) Formation and Good Standing of LP Subsidiaries. Each of the LP Subsidiaries is a limited partnership duly formed and validly existing and in good standing as a limited partnership under the laws of the state of its formation set forth in Section 3.1(d) of the Disclosure Schedule, is duly qualified to do business and in good standing as a foreign limited partnership in each jurisdiction set forth in Schedule 3.1(d) of the Disclosure Schedule, being the only jurisdictions in which its ownership of properties or the conduct of its business requires such qualification (except to the extent that the failure to so qualify or be in good standing would not have a Material Adverse Effect), and has the limited partnership power and authority necessary to own, lease or license and operate its properties and assets and to conduct the aspects of the Business in which it is engaged as currently conducted.

 

(e) No Other Subsidiaries. Except for the Subsidiaries and as otherwise set forth in Section 3.1(e) of the Disclosure Schedule, Seller does not, directly or indirectly, (i) own, of record or beneficially, any outstanding voting securities or other Equity Securities in any corporation, limited liability company, general or limited partnership, joint venture or other person or (ii) control any corporation, limited liability company, general or limited partnership, joint venture or other person.

 

(f) Authority and Approval. Seller has the corporate power and authority to execute and deliver this Agreement, to consummate the Transaction and to perform all the terms and conditions of this Agreement to be performed by it. The execution and delivery by Seller of this Agreement, the performance by Seller of all the terms and conditions hereof to be performed by it (including the other agreements, instruments and documents to be executed and delivered by Seller hereunder) and the consummation of the Transaction have been duly authorized and approved by the Board of Directors of Seller and the holders of Series A Stock. No approval of

 

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the shareholders of Seller is required in connection with the consummation of the Transaction other than the Consent of Shareholders attached to this Agreement, which consent has been obtained. This Agreement has been duly executed and delivered by Seller and constitutes the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, and each of the other agreements, instruments and documents being or to be executed and delivered by Seller under this Agreement or in connection herewith has been duly authorized and, upon execution and delivery by Seller, will constitute a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, except in each case as such enforcement may be limited by Bankruptcy Exceptions.

 

(g) Capitalization of Seller and Subsidiaries. The entire authorized capital stock of Seller consists of 19,530,804 shares, par value one cent ($0.01) per share, of which: (i) 1,168 shares are issued and outstanding, fully paid and nonassessable and are designated as Series A Stock and (ii) 18,805,744 shares are issued and outstanding, fully paid and nonassessable and are designated as Series B Stock. Except as to voting rights, each share of Series A Stock and each share of Series B Stock (collectively, the “Shares”) have identical rights and privileges in every respect. The holders of shares of Series A Stock have the sole right to vote upon all matters submitted to a vote of the shareholders of Seller, except in those instances where the holders of Series B Stock are entitled to vote as a matter of applicable law. The authorized and outstanding Equity Interests and Second Tier Equity Interests of each of the Subsidiaries, as the case may be, are set forth in Section 3.1(g) of the Disclosure Schedule and constitute all of the issued and outstanding Equity Securities of the Subsidiaries and are owned of record and beneficially by a member of the Seller Group. All shares of capital stock of the Corporate Subsidiaries are issued and outstanding, fully paid and non-assessable and none of such shares were issued in violation of preemptive rights. Except as set forth in Section 3.1(g) of the Disclosure Schedule, there are no outstanding subscriptions, options, convertible securities, warrants, calls, rights or agreements of any kind to purchase or otherwise acquire or otherwise relating to, or any preemptive rights with respect to, any Equity Security of any of the Subsidiaries. At the Closing, Seller will have full legal right to sell, assign and transfer the Equity Interests to Buyer and will, upon the assignment and/or delivery of the Equity Interests to Buyer pursuant to the terms of this Agreement, transfer to Buyer good and valid title to the Equity Interests free and clear of all Encumbrances.

 

(h) Partnership Agreements. Each partnership agreement relating to a LP Subsidiary: (i) has been duly authorized, executed and delivered by each general and limited partner party thereto and (ii) constitutes a valid and legal binding obligation of each general partner named therein, enforceable in accordance with its terms, except as such enforcement may be limited by Bankruptcy Exceptions.

 

(i) True, correct and complete copies of the Organizational Documents of the Subsidiaries, as in effect on the date hereof, have been furnished to Buyer.

 

Section 3.2 Absence of Conflicts and Consent Requirements.

 

Except as set forth in Section 3.2 of the Disclosure Schedule, Seller’s execution and delivery of this Agreement, the performance of its obligations hereunder, and the consummation of the transactions contemplated hereby do not: (a) conflict with or violate, the Organizational

 

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Documents of any member of the Seller Group; or (b) violate or, alone or with notice or the passage of time, result in the breach or the termination of, or otherwise give any contracting party the right to terminate, declare a default or declare an acceleration under, the terms of any Business Agreement; (c) result in the imposition of any Encumbrance on any material assets of any member of the Seller Group or (d) violate in any material respect any judgment, order, decree or, any law, statute, regulation or other judicial or governmental restriction to which any member of the Seller Group is subject. Except for compliance with the HSR Act, and as otherwise noted in Section 3.2 of the Disclosure Schedule, there is no requirement applicable to Seller or any other member of the Seller Group to make any filing with, or to obtain any Permit, authorization, consent or approval of, any Government Authority or any third party, in connection with Seller’s execution and delivery of this Agreement, and the performance of its obligations hereunder and the consummation of the transactions contemplated hereby.

 

Section 3.3 Environmental Matters. Except as set forth in Section 3.3 of the Disclosure Schedule:

 

(a) the operations of the Business by the members of the Seller Group comply and since January 1, 2000 have complied in each case in all material respects with Environmental Law;

 

(b) each member of the Seller Group holds all material environmental, health and safety Permits necessary for its operations as currently conducted, all such Permits are valid and in full force and effect, and each member of the Seller Group is in material compliance with the terms and conditions of such Permits;

 

(c) no member of the Seller Group, or any of its present or former property or operations, is subject to any on-going investigation by, order or information request from or agreement with any person or entity respecting any Claim of Environmental Liability;

 

(d) no member of the Seller Group is subject to any pending or, to Seller’s knowledge, threatened judicial or administrative proceeding, or to any order, judgment, decree or settlement, all liabilities and obligations under which have not been fully resolved, in each case alleging or addressing a material violation of or liability under any Environmental Law;

 

(e) no member of the Seller Group has:

 

(i) reported a Release of a Hazardous Substance pursuant to Section 103(a) of CERCLA or any state equivalent;

 

(ii) filed a notice pursuant to Section 103(c) of CERCLA; or

 

(iii) filed any notice under any Environmental Law reporting a material violation of any Environmental Law;

 

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(f) there is not now located on or in any of properties currently or formerly owned, occupied or leased by a member of the Seller Group:

 

(i) any treatment, recycling, storage or disposal of any hazardous waste, as that term is defined under 40 CFR Part 261 or any state equivalent, that requires a Permit pursuant to Section 3005 of RCRA; or

 

(ii) any surface impoundment or underground storage tank that has not been removed in accordance with Environmental Law; or

 

(iii) to the knowledge of Seller, any landfill or waste pile;

 

(g) no Hazardous Substances are present in, on, about or migrating to or from any property currently or formerly owned, occupied or leased by any member of the Seller Group that could be expected to give rise to any obligation of or claim against a member of the Seller Group under Environmental Law;

 

(h) no member of the Seller Group has received any written notice under Environmental Law that it is or may be liable in any material respect to any person (including any Government Authority) as a result of the Release or threatened Release of a Hazardous Substance at any location;

 

(i) no Encumbrance has attached to any property currently owned or, to the knowledge of Seller, leased by a member of the Seller Group in favor of any Government Authority for: (i) any liability under any Environmental Law, or (ii) damages arising from, or costs incurred by such Government Authority in response to, a Release or threatened Release of a Hazardous Substance into the environment;

 

(j) any asbestos-containing material which is on or part of any property currently owned or leased by a member of the Seller Group is in good repair according to the current standards and practices governing such material, and its presence or condition does not violate in any material respect any Environmental Law;

 

(k) there are no articles, containers or equipment containing PCBs on, at or within any property owned, occupied or leased by a member of Seller Group;

 

(l) none of the products currently or previously manufactured, distributed or sold by any member of the Seller Group contains or has contained, asbestos or asbestos-containing material;

 

(m) Seller has provided Buyer with true and complete copies of, or access to, all written environmental and worker health and safety investigations, assessments, studies, audits, tests and reports that have been prepared by or on behalf of any member of Seller Group; and

 

(n) members of Seller Group maintain and have in force insurance coverage for the Environmental Liabilities and have provided to Buyer a true and complete list of their current and historic insurance coverage for Environmental Liabilities of the members of the Seller Group.

 

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Section 3.4 Ownership of Assets.

 

(a) Real Property. Section 3.4(a) of the Disclosure Schedule sets forth a list and legal description of all the Real Property owned by any member of the Seller Group. Except as set forth in Section 3.4(a) of the Disclosure Schedule, a member of the Seller Group has good and marketable title to the Real Property, free and clear of any Encumbrances, except for Permitted Exceptions and Permitted Encumbrances.

 

(b) Leases and Leased Property. Section 3.4(b) of the Disclosure Schedule sets forth a list of all leases and subleases of real property under which a member of the Seller Group is lessee or sublessee of any real property including any amendments or modifications thereto; and, except as set forth in Section 3.4(b) of the Disclosure Schedule, no member of the Seller Group has assigned any Lease to any other person. Except as set forth in Section 3.4(b) of the Disclosure Schedule, each Lease is in full force and effect and constitutes the legal, valid and binding obligation of each member of the Seller Group that is the lessee thereunder and, to the knowledge of Seller, any other parties thereto. Except as set forth in Section 3.4(b) of the Disclosure Schedule, all rent and other payments due under each Lease have been paid and there are no existing material defaults with respect to any Lease (or events or conditions which, with notice or lapse of time or both, would constitute a material default) of any member of the Seller Group that is a lessee thereunder. To the knowledge of Seller, except as set forth in Section 3.4(b) of the Disclosure Schedule, there are no existing material defaults of any of the other parties thereto (or events or conditions which, with notice or lapse of time or both, would constitute a material default). Except as set forth in Section 3.4(b) of the Disclosure Schedule, each member of the Seller Group that is the lessee thereunder has the right to quiet enjoyment of each Leased Property for the full term of the related Lease, and the leasehold or other interest of the member of the Seller Group in the Leased Property is not subject or subordinate to any Encumbrance except for Permitted Exceptions and Permitted Encumbrances. Complete and correct copies of all Leases, together with any existing title opinions, surveys and appraisals in the possession of Seller or any policies of title insurance currently in force and in the possession of Seller with respect to each parcel of Leased Property, have heretofore been made available to Buyer by Seller.

 

(c) Condemnation. To the knowledge of Seller: (i) neither the whole nor any part of the Real Property or the Leased Property is subject to any pending suit for condemnation or other taking by any Government Authority and (ii) no such condemnation or other taking is threatened or contemplated.

 

(d) Personal Property. Section 3.4(d) of the Disclosure Schedule sets forth a representative list, dated as of the date of the Interim Balance Sheet, of all Equipment and other tangible personal property owned leased, licensed or used by the members of the Seller Group. Except as set forth in Section 3.4(d) of the Disclosure Schedule, a member of the Seller Group has good and marketable title to, or a valid leasehold interest in, or valid rights to use, as the case may be, all Equipment and other items of tangible personal property and all items of intangible property used in the Business, including all items reflected on the Interim Balance Sheet, free and clear of any Encumbrances, except for Permitted Exceptions and Permitted Encumbrances and other minor Encumbrances that in the aggregate are not substantial in amount and do not materially detract from the value of the assets subject thereto or materially interfere with the

 

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present use thereof. Such Equipment and other items of tangible personal property are structurally sound, in good operating condition (subject to normal wear and tear), and are otherwise of the quality usable in the regular and ordinary course of business consistent with past practice.

 

(e) Sufficiency of Purchased Assets. The Purchased Assets encompass all of the assets, properties (other than the cash component of working capital) and rights reasonably necessary for the operation of the Business by the Subsidiaries after the Closing Date, consistent with the operations of the Business by the members of the Seller Group as conducted as of the date of the Interim Balance Sheet and as currently conducted.

 

Section 3.5 Litigation.

 

Except as set forth in Section 3.5-1 of the Disclosure Schedule and as provided in Section 3.3 with respect to Environmental Matters, Section 3.7(b) with respect to Intellectual Property Claims, and Section 3.13 with respect to Tax matters, there is no claim, action, proceeding or investigation pending or, to Seller’s knowledge, threatened, and there is no outstanding writ, order, decree, injunction, award or judgment: (a) against, affecting or relating to any member of the Seller Group or the Business, including Claims of Environmental Liability, Environmental Exposure Claims, Product Liability Claims, Product Warranty Claims and Workers’ Compensation Claims; (b) that calls into question the authority or right of Seller to enter into this Agreement and consummate the Transaction; or (c) that would otherwise prevent or delay the Transaction. Except as set forth in Section 3.5-2 of the Disclosure Schedule, each of the claims listed in Section 3.5-1 of the Disclosure Schedule is covered by applicable insurance policies of the members of the Seller Group, including with respect to punitive damages and attorneys fees, except where such matters will result in a claim below the applicable self-insurance retention or deductible amount.

 

Section 3.6 Permits and Compliance With Law.

 

Except as set forth in Section 3.6 of the Disclosure Schedule and except as provided in Section 3.3 of the Disclosure Schedule with respect to environmental matters and in Section 3.11 of the Disclosure Schedule with respect to labor and employment matters:

 

(a) the members of the Seller Group hold all material Permits which are necessary for the current ownership of their respective assets and to conduct the Business as presently carried on by the members of the Seller Group;

 

(b) the members of the Seller Group have conducted the Business in all material respects so as to comply with all laws, statutes, ordinances, rules, regulations and orders of any Government Authority applicable to the Business and no member of Seller Group has received notice that it is not in compliance thereof; and

 

(c) each member of the Seller Group has fulfilled and performed in all material respects its obligations under each Permit, and (i) no event has occurred or condition or state of facts exists which constitutes or, after notice or lapse of time or both, would constitute a material breach or default under any such material Permit or which permits or, after notice or lapse of time or both, would permit revocation or termination of any such material Permit, or which

 

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would materially adversely affect the rights of any member of the Seller Group under any such material Permit; (ii) no notice of cancellation, of default or of any dispute concerning any material Permit, or of any event, condition or state of facts described in the preceding clause, has been received by Seller; and (iii) each Permit is valid, subsisting and in full force and effect.

 

Section 3.7 Intellectual Property Rights.

 

(a) Schedule. Section 3.7(a) of the Disclosure Schedule sets forth a true and correct list of:

 

(i) all Intellectual Property owned by a member of the Seller Group, including the owner of record if registered or registration has been applied for, registration or application date, registration or application number, jurisdiction, expiration date and other information sufficient to identify and distinguish it; and

 

(ii) all contracts, licenses, assignments, royalty agreements, settlements, judgments, permissions and decrees (collectively, “License Agreements”) pursuant to which any member of the Seller Group has or acquired the right to use any Intellectual Property of any third person (excluding “off-the-shelf” computer software that is generally available pursuant to a “mass-market license”) and all License Agreements pursuant to which any member of Seller Group has granted to any third person the right to use any of the Intellectual Property referred to in clause (i) above, in each case, including the parties, effective date, term, statutes, subject and Intellectual Property to which they relate.

 

(b) Claims, etc. Except as set forth in Section 3.7(b) of the Disclosure Schedule, there are no actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands or allegations pending or, to the knowledge of Seller, threatened, alleging that any member of the Seller Group infringes, misappropriates, misuses, interferes with or otherwise violates any Intellectual Property of any other person (“Intellectual Property Claims”) and, to the knowledge of Seller, there is no basis for any such Intellectual Property Claim. Except as set forth in Section 3.7(b) of the Disclosure Schedule, the operation of the Business as currently conducted by the members of the Seller Group has not and does not infringe, misappropriate, misuse, interfere with or otherwise violate any Intellectual Property of any other person. To the knowledge of Seller, except as set forth in Section 3.7(b) of the Disclosure Schedule, no third person has infringed, misappropriated, misused, interfered with or otherwise violated any Intellectual Property of a member of Seller Group.

 

(c) Ownership. Except as otherwise referred to in Section 3.7(c) of the Disclosure Schedule, a member of the Seller Group is the sole owner of all of the right, title, and interest in and to the item, in the listed country or jurisdiction, free and clear of any Encumbrances (other than Permitted Encumbrances and Permitted Exceptions).

 

(d) Validity, etc. Except as set forth in Section 3.7(d) of the Disclosure Schedule, with respect to each item of Intellectual Property required to be identified in Section 3.7(a)(i) of the Disclosure Schedule, (i) the item is in good standing and, to the knowledge of Seller, is valid and enforceable; (ii) all registrations for copyrights, patent rights and trademarks identified in

 

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Section 3.7(a)(i) of the Disclosure Schedule are in full force and, to the knowledge of Seller, valid and all applications to register any unregistered copyrights, patent rights or trademarks so identified are pending and in good standing; (iii) no action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand is pending, or to the knowledge of Seller, threatened, that challenges the legality, validity, enforceability, registration, use or ownership of the item in the listed country and/or jurisdiction; (iv) each member of the Seller Group has taken all necessary actions, including the making of all requisite filings, renewals and payments, to maintain such item in full force and effect and (v) each member of the Seller Group has the sole and exclusive right to bring actions for infringement, misappropriation or unauthorized use of the item, and, to the knowledge of Seller, there is no basis for any such action. Copies of all registrations or current applications relating to the Intellectual Property identified in Section 3.7(a)(i) of the Disclosure Schedule have been made available to Buyer.

 

(e) Sufficiency. Each item of Intellectual Property owned or used by a member of the Seller Group immediately prior to the Closing hereunder will be owned or available for use by Buyer or a Subsidiary on identical terms and conditions immediately subsequent to the Closing hereunder. The members of the Seller Group are taking and have taken all actions that are required to maintain, and all actions that they reasonably believe are required to protect, each item of Intellectual Property that they own or use.

 

(f) Trade Secrets . All Intellectual Property owned by the members of the Seller Group that derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use has been maintained in confidence in accordance with protection procedures that are adequate for protection, and in accordance with procedures customarily used in the industry to protect rights of like importance.

 

(g) Right to Royalty Payments . No former or current shareholder, employee, director or officer of any member of the Seller Group will have, directly or indirectly, any interest in any Intellectual Property used in or pertaining to the Business, nor will any such person have any rights to past or future royalty payments or license fees from any member of the Seller Group, deriving from licenses, technology agreements or other Contracts between any such person or any member of Seller Group.

 

(h) Privacy Policies, etc . The members of the Seller Group’s use and dissemination of any and all data and information concerning users of their web sites is in compliance with all applicable privacy policies or terms of use. The Transaction will not violate any privacy policy or terms of use relating to the use, dissemination, or transfer of such data or information.

 

Section 3.8 Computer Hardware and Software.

 

Section 3.8 of the Disclosure Schedule sets forth a list of all computer equipment, computer programs and documentation, and computer services which are owned or licensed by a member of the Seller Group and are material to the continued operation of the Business in a manner consistent with current operations.

 

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Section 3.9 Receivables; Inventories.

 

Except as set forth in Section 3.9 of the Disclosure Schedule:

 

(a) Receivables. All of the Receivables of the members of the Seller Group arose or will arise from bona fide sale transactions, and, to the knowledge of Seller, no portion of the Receivables is subject to counterclaim or setoff (other than discounts allowed in the ordinary course of business).

 

(b) Inventories. The Inventories of the members of the Seller Group (including raw materials, supplies, work-in-process, finished goods and other materials): (i) are in good, merchantable and useable condition; (ii) are located at facilities owned or leased by a member of the Seller Group; (iii) have not been consigned to any third party; and (iv) are, in the case of finished goods, of a quality and quantity saleable in the ordinary course of business and, in the case of all other Inventories, of a quality and quantity useable in the ordinary course of business, except for obsolete items that (x) have been written down to estimated net realizable value or (y) are entitled to the benefit of a reserve to achieve the same purpose, in each case in accordance with GAAP.

 

Section 3.10 Material Contracts.

 

(a) Schedule. Section 3.10(a) of the Disclosure Schedule lists or describes, as of the date of this Agreement, the following Contracts (including leases of personal property, purchase contracts and commitments) to which a member of the Seller Group is a party or by which it is bound:

 

(i) all Contracts (x) involving future obligations on the part of a member of the Seller Group (other than those listed on Section 3.11 of the Disclosure Schedule) in an amount which are, individually or in the aggregate, reasonably expected to exceed Seven Hundred Fifty Thousand Dollars ($750,000);

 

(ii) all Organizational Documents relating to the formation of partnerships and joint ventures:

 

(iii) all Material Leases;

 

(iv) all notes, bonds, mortgages, security agreements or other material agreements creating an Encumbrance on the assets of any member of the Seller Group, whether tangible or intangible, guarantees and other material agreements, instruments and evidences of Indebtedness for or relating to any lending by any member of the Seller Group to any person other than a member of the Seller Group (other than Seller) of any amount (exclusive of advances to employees for expenses in the ordinary course of business consistent with past practice) or any borrowing (excluding Excluded Liabilities) by any member of the Seller Group from any person other than a member of the Seller Group (other than Seller);

 

(v) all forms of Contracts used with dealers,

 

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(vi) all distributor, manufacturer’s representative, commission, consulting and sales agency Contracts;

 

(vii) all material advertising or public relations Contracts;

 

(viii) all guarantees by any member of the Seller Group of the obligations of any of its customers, suppliers, officers, directors, employees, affiliates or others;

 

(ix) all Contracts which limit or restrict where any member of the Seller Group may conduct the Business or the type or line of business in which any member of the Seller Group may engage;

 

(x) all joint venture, limited liability company, partnership or other Contracts (however named) involving a sharing of profits, losses, costs or liabilities;

 

(xi) all Contracts that involve the purchase or sale of any business or person or any unit or product line thereof or any material assets other than in the ordinary course of business;

 

(xii) all Contracts that involve the indemnification or similar commitment with respect to the obligations or liabilities of any other person;

 

(xiii) all emplo