Exhibit 10.15
ASSET PURCHASE
AGREEMENT
BY AND BETWEEN
MULTI-COLOR
CORPORATION,
MCC-WISCONSIN,
LLC,
MCC-NORWAY, INC.,
NORTHSTAR PRINT GROUP,
INC.
AND
JOURNAL COMMUNICATIONS,
INC.
January 25, 2005
ASSET PURCHASE
AGREEMENT
This ASSET PURCHASE AGREEMENT (this
“ Agreement ”) is made as of the
25 th day of January, 2005, by and among
MULTI-COLOR CORPORATION, an Ohio corporation (“
Multi-Color ”); MCC-WISCONSIN, LLC (“
MCC-Wisconsin ”), an Ohio limited liability
company wholly owned by Multi-Color; MCC-NORWAY, INC., a Michigan
corporation wholly owned by Multi-Color (“
MCC-Norway ”) (collectively Multi-Color,
MCC-Wisconsin and MCC-Norway, the “ Buyer
”); NORTHSTAR PRINT GROUP, INC., a Wisconsin corporation (the
“ Seller ”); and JOURNAL COMMUNICATIONS,
INC., a Wisconsin corporation and the sole shareholder of the
Seller (“ JCI ”).
RECITALS
The Seller is engaged in the
business of the production of gravure and flexographic labels for
the prime label consumer product market and operates three (3)
facilities located at 1222 Perry Way, Watertown, Wisconsin; 1836
Sal Street, Green Bay, Wisconsin; and 512 Ninth Avenue, Norway,
Michigan (the “ Business ”). The Buyer
desires to purchase, and the Seller desires to sell the Business
and substantially all of the non-cash assets of the Seller, upon
the terms and conditions herein set forth, and JCI owns the real
estate located at 1222 Perry Way, Watertown, Wisconsin, which JCI
desires to sell and the Buyer desires to purchase.
NOW, THEREFORE, for and in
consideration of the mutual promises herein made, and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged,
IT IS HEREBY AGREED AS
FOLLOWS:
AGREEMENT
DEFINITIONS
As used in this Agreement, the
following terms shall have the following meanings:
“ AAA ”
shall mean the American Arbitration Association.
“ Adverse Effect
” shall mean any condition, change or event that would
materially and adversely affect the Business, operations,
properties (including intangible properties) or financial condition
of the Business taken as a whole.
“ Arbitrator
” has the meaning set forth in Section 2.3(c)
.
“ Assumed Environmental
Liabilities ” shall mean all Liability: (a) for the
Cleanup of any Contamination on the Green Bay Real Estate, except
the Green Bay Contamination Liability retained by Seller; (b) for
the Cleanup of any Contamination on the Norway Real Estate,
except
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the Norway Contamination Liability retained by
Seller; (c) for the Cleanup of any Contamination on the Watertown
Real Estate; (d) arising from any violation, potential violation,
or Liability set forth in the Norway Voluntary Disclosure Response
after the earlier of the scheduled implementation of the proposed
Disclosure Response for said violation or potential violation or
the completion of implementation of the Disclosure Response for
said violation or potential violation by Seller or Buyer; and (e)
arising from the existing condenser unit located on the roof top
over the office on the Norway Real Estate after the earlier of
either the scheduled replacement or repair date for the existing
condenser unit or the replacement or repair of the existing
condenser unit by Buyer.
“ Assumed
Liabilities ” has the meaning set forth in
Section 3.1 .
“ Assumption
Agreement ” has
the meaning set forth in Section 2.2(a)(ii)
.
“ Balance Sheet
Date ” shall mean July 25, 2004.
“ Books and
Records ” shall mean the books of account and records
of the Business.
“ Business
” has the meaning set forth in the Recitals.
“ Buyer ”
shall have the meaning set forth in the caption of this Agreement.
Unless otherwise specifically designated or required by context
herein, Buyer shall mean MCC-Wisconsin, MCC-Norway and Multi-Color
jointly and severally.
“ Buyer Ancillary
Documents ” shall mean this Agreement and all other
agreements, certificates or documents contemplated hereby to which
Buyer is a party.
“ Buyer Voluntary
Disclosure ” shall mean the Voluntary Disclosure,
including the Disclosure Response, filed by Buyer with MDEQ
pursuant to Part 148, Environmental Audit Privilege and Immunity,
of the Michigan Natural Resources and Environmental and Protection
Act, P.A. 451 of the Public Acts of 1994, as amended. Upon
completion of an environmental compliance audit, said Voluntary
Disclosure shall list, but not be limited to, all of the
violations, potential violations or Liabilities, dates of
occurrences, regulatory references and Disclosure Responses that
are set forth in the Norway Voluntary Disclosure Response except
for those violations or potential violations along with their
respective Disclosure Responses which have been completed prior to
Closing by Seller and which are referred to in Section
6.12(d) .
“ Buyer’s Group
Health Plan ” has the meaning set forth in Section
7.2(h) .
“ Buyer’s 401(k)
Plan ” has the meaning set forth in Section
7.2(g) .
“ CERCLA ”
shall mean the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, and as amended thereafter.
“ Claims ”
shall mean any written demand, notice of violation, potentially
responsible party letter, investigation letter, inquiry, cause of
action, Proceeding, Order, citation, subpoena, or other notice or
communication, for cost recovery, response costs, removal costs,
fines, penalties, monetary compensation, contribution, and the
like.
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“ Cleanup
” shall mean any responsibility or Liability for any
investigation, monitoring, assessment, testing, sampling, record
keeping, reporting, well abandonment, decommissioning, operation
and maintenance costs and expenses, analytical costs, expert,
consulting and legal fees, removal, closure, containment,
abatement, remediation, response actions or other corrective
actions, and for any natural resource damages or medical
monitoring, all as required by applicable Environmental Laws. The
terms “removal,” “remedial”, and
“response action” include the types of activities
covered by CERCLA and any comparable Michigan or Wisconsin
law.
“ Closing
” has the meaning set forth in Section 1.5
.
“ Closing Date
” shall mean January 25, 2005.
“ Closing Date Net
Working Capital Statement ” has the meaning set forth in Section
2.3(a)(ii) .
“ COBRA Coverage
” has the meaning set forth in Section 6.8(p)
.
“ Code ”
shall mean the Internal Revenue Code of 1986, as
amended.
“ Commonly-Controlled
Entity ” shall mean any entity under common control
with Seller within the meaning of section 4001(b)(1) of ERISA and
the regulations promulgated thereunder.
“ Computers
” shall mean all computers and computer systems owned, leased
or used by Seller in connection with the Business (including
software, communication links and storage media) and which are
included in the Purchased Assets.
“ Confidentiality
Agreement ” has
the meaning set forth in Section 1.2(b) .
“ Contamination
” shall mean, without limitation, any Hazardous Materials, or
other element, substance, waste, material, pollutant, contaminant,
compound or mixture, including disease-causing agents, which upon
exposure to, ingestion, inhalation or assimilation into any
organism, either directly or indirectly, will or may reasonably be
anticipated to cause death, disease, behavioral abnormalities,
cancer, genetic mutation, physiological malfunctions, including
malfunctions in reproduction or physical deformations in such
organisms or their offspring which is Released into the
Environment.
“ Contracts
” shall mean all contracts, agreements, instruments,
documents and leases.
“ Coors Sales
Adjustment ” has the meaning set forth in Section
2.3(b)(i) .
“ Copyrights
” has the meaning set forth in Section 4.11(e)
.
“ Early Retiree Eligible
Employees ” has
the meaning set forth in Section 7.2(f) .
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“Eligible Hired
Employees” has the
meaning set forth in Section 7.2(h) .
“ Employee Benefit
Plan ” ha s the
meaning set forth in Section 4.24(a) .
“ Encumbrance
” shall mean any charge, Claim, community property interest,
condition, equitable interest, lien, option, pledge, right of
refusal, security interest or other restriction or interest of any
kind, including any restriction on use, voting, transfer, receipt
of income or exercise of any other attribute of
ownership.
“ Environment
” shall mean soil, land surface or subsurface strata, surface
waters (including navigable waters, ocean waters, streams, ponds,
drainage basins and wetlands), groundwaters, drinking water supply,
stream sediments, ambient air (including indoor air), plant and
animal life and any other environmental medium or natural
resource.
“ Environmental
Law ” shall mean any Laws pertaining to environmental
protection, the use, generation, treatment, storage, or disposal of
Hazardous Materials, the regulation of pollution, the Cleanup of
Contamination, including those contained in (i) the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended, 42 USC Section 9601, et seq., (“CERCLA”); (ii)
the Resource Conservation and Recovery Act, as amended, 42 USC
Section 6901, et seq., (“RCRA”); (iii) the Federal
Water Pollution Control Act, as amended, USC Section 1251 et seq.,
(“FWPCA”); (iv) the Clean Air Act, as amended, 42 USC
7401 et seq. (“CAA”); (v) the Toxic Substances Control
Act, as amended, 15 USC 2601 et seq., (“TSCA”); (vi)
the Emergency Planning and Community Right to Know Act, as amended,
42 USC 11001 et seq., (“EPCRTKA”); (vii) the laws and
regulations of Wisconsin, as applicable; (viii) the laws and
regulations of Michigan, as applicable; (ix) any regulations
promulgated pursuant to CERCLA, RCRA, FWPCA, CAA, TSCA and
EPCRTKA.
“ Environmental
Reports ” ha s
the meaning set forth in Section 4.16(e) .
“ Equipment
” has the meaning set forth in Section 1.1(e)
.
“ ERISA ”
shall mean the Employee Retirement Security Act of 1974, as
amended.
“ Excluded
Assets ” has the meaning set forth in Section
1.2 .
“ Facilities
” shall mean with respect to the operation or the conduct of
the Business, any real property, leaseholds or other real property
interests and any buildings, plants, structures or equipment that
are owned or leased by Seller as of the Closing Date.
“ Fiduciary
” has the meaning prescribed by Section 3(21)(A) of
ERISA.
“ Financial
Statements ” shall mean, collectively, the internally
prepared financial statements (including balance sheets and
statement of earnings) of the Business for each of the fiscal years
ending December 31, 2001, December 31, 2002 and December 31,
2003.
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“ Gallo Sales
Adjustment ” h as the meaning set forth in Section
2.3(b)(ii) .
“ GCIU Fund
” or “ Fund ” shall mean the GCIU
Supplemental Retirement and Disability Fund.
“ GCIU Local 663
” has the meaning set forth in Section 7.2(e)
.
“ Governmental
Authority ” shall mean the government of the United
States or any foreign jurisdiction, any state, county, municipality
or other governmental or quasi governmental unit, or any agency,
board, bureau, instrumentality, commission or court of any of the
foregoing.
“ Governmental
Authorizations ” shall mean any Order, License,
Permit, covenant not to sue, no further action letter, or other
authorization issued, granted, given or otherwise made available by
or under the authority of any Governmental Authority or pursuant to
any Environmental Laws.
“ Green Bay
Contamination ” shall mean (a) the Contamination on
and/or emanating from the Green Bay Real Estate which is described
in the Work Authorization for Soil Probe Borings dated December 10,
2004, between RMT and JCI, the Work Authorization for First Phase
of NR 716 Site Investigation between RMT and JCI dated December 23,
2004, and Change Order No. 1 between RMT and JCI dated January 14,
2005, all of which are attached hereto as Exhibit O ;
provided, however, the extent and nature of this Contamination has
not been fully investigated and may not be fully described,
identified or known, and (b) any other Contamination discovered on,
in, or emanating to or from the Green Bay Real Estate in a Phase II
Investigation performed by Buyer and reported in writing to Seller
prior to the later of 9 (nine) months from the execution of this
Agreement or the submission by Seller of the Remediation Plan for
the Green Bay Contamination to the WDNR. Seller shall promptly
reimburse Buyer up to $20,000 for the cost of any such Phase II
Investigation.
“ Green Bay
Contamination Closure ” shall mean a written
Governmental Authorization regarding the completion of the Cleanup
of the Green Bay Contamination in accordance with applicable
Wisconsin Environmental Law, and which satisfies the following
criteria:
(a) In the event that a Preventive
Action Level is exceeded on or off site, Table 5 s NR 140
Groundwater Quality Item 1 (no action pursuant to s NR 140.24 (5))
or Item 12 (Monitored natural attenuation to meet the requirements
of s NR 140.24 (2)) will apply.
(b) In the event that an Enforcement
Standard is exceeded on or off site, Table 6 s 140 Groundwater
Quality Item 8 (Monitored natural attenuation to meet the
requirements of s NR 140.24 (2)) will apply.
(c) Average concentrations in
subsurface soils do not exceed residual contaminant levels for
property zoned for industrial use based upon protection of
groundwater (s NR 720.09) or protection of human health from direct
contact (s NR 720.11) or based upon soil cleanup standards specific
to a site or facility (s NR 720.19).
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(d) Implementation of a deed
restriction that limits future use of the property to industrial
land use zoning that is consistent with the soil residual
contaminant levels (concentrations) left on site.
(e) Listing of the site on the GIS
Registry of closed remediation sites with residual and/or
groundwater contamination.
“ Green Bay
Contamination Liability ” shall mean (i) any
Liability for any Claims by a Government Authority under
Environmental Law or Government Authorizations for the Green Bay
Contamination and (ii) any Liability arising from any Claims under
Law for property damage or personal injury to any Person other than
Buyer caused by the Green Bay Contamination, all such Liability
under (i) and (ii) above, for purposes of this Agreement including
the obligations of Seller to Buyer contained in Sections
6.12(a) and 6.12(c) , shall be satisfied or
otherwise extinguished at the time Seller achieves Green Bay
Contamination Closure. This Liability shall include all costs to
achieve Green Bay Contamination Closure, including engineering
controls, operation and maintenance costs, monitoring,
recordkeeping, reporting, financial assurance, and any other costs
and expenses related to the Green Bay Contamination
Closure.
“ Green Bay
Lease ” has the meaning set forth in Section
6.8(d) .
“ Green Bay Real
Estate ” shall mean all land, buildings,
improvements, fixtures and appurtenances thereto located at 1836
Sal Street, Green Bay, Wisconsin, the legal description of which is
set forth on Schedule 1.2(p) .
“ Hazardous
Activity ” shall mean the distribution, generation,
handling, importing, management, manufacturing, processing,
production, refinement, Release, storage, transfer, transportation,
treatment, disposal, exposure to or use (including any withdrawal
or other use of groundwater) of Hazardous Materials in, on, under,
about or from the Facilities or any part thereof into the
Environment.
“ Hazardous
Materials ” shall mean any Hazardous Substances,
chemical, waste, substance, material, or other substance that is
listed, defined, regulated, prohibited, designated or classified as
hazardous, radioactive, toxic, or a pollutant or a contaminant
under or pursuant to any Environmental Law, and specifically
including petroleum and all derivatives thereof or synthetic
substitutes therefor, and asbestos or asbestos-containing
materials.
“ Hazardous
Substances ” shall mean hazardous substances as
defined under CERCLA, the Wisconsin Hazardous Substances Spills
Law, Section 292.01(5), Wis. Stats., and the Michigan Natural
Resources and Environmental Protection Act, Section 324.20101, and
all regulations promulgated thereunder all as in effect on the date
of this Agreement.
“ HIPAA ”
has the meaning set forth in Section 6.8(o)
.
“ Hired
Employees ” has the meaning set forth in
Section 7.2(a) .
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“ Included Prepaid
Expenses ” has
the meaning set forth in Section 1.1(c) .
“ Indemnifiable
Damages ” shall mean all losses, Claims, damages,
Liabilities, costs, expenses or deficiencies described in
Section 8.1 or 8.2 , as the case may
be.
“ Indemnitee
” has the meaning set forth in Section 8.3
.
“ Indemnitor
” has the meaning set forth in Section 8.3
.
“ Intellectual
Property ” ha s
the meaning set forth in Section 4.11(a) .
“ Interim Financial
Statements ” shall mean the internally prepared,
unaudited financial statements (including balance sheets and
statement of earnings) of the Business for the period from January
1, 2004 through July 25, 2004 prepared in accordance with the
principles of U.S. GAAP.
“ Inventories
” has the meaning set forth in Section 1.1(a)
.
“ IRS ”
shall mean the Internal Revenue Service.
“ JCI ”
has the meaning set forth in the caption of this
Agreement.
“ Knowledge
” shall mean (i) with respect to the Buyer, the actual,
implied or constructive knowledge (without any duty of independent
investigations), of those persons holding executive offices of
Buyer, and (ii) with respect to Seller or JCI, the actual, implied
or constructive knowledge (without any duty of independent
investigations), of Richard Gasper, Jim Gombar, Rob Brendel, Murray
White, Andy Walker, Paul Bonaiuto, Mike Julian, Greg Petre and Dick
McMonagle.
“ Latest Balance
Sheet ” shall mean the balance sheet of the Business
for the period ending August 22, 2004.
“ Latest Balance Sheet
Date ” shall mean the date of the Latest Balance
Sheet.
“ Laws ”
shall mean all federal, state, local, municipal, foreign or
international constitutions, laws, statutes, ordinances, rules,
regulations, codes, or principles of common law.
“ Leased Real
Property ” has the meaning set forth in Section
4.7 .
“ Legal
Requirement ” shall mean any applicable federal,
state, local, municipal, foreign, international, multinational or
other administrative Order, constitution, Laws, Governmental
Authorizations or treaty, the failure to comply with which would
have an Adverse Effect.
“ Liability
” shall mean, with respect to any Person, any liability or
obligation of such Person of any kind, character or description,
whether known or unknown, absolute or contingent, accrued or
unaccrued, disputed or undisputed, liquidated or unliquidated,
secured or unsecured, joint or several, due or to become due,
vested or unvested, executory, determined, determinable or
otherwise, and whether or not the same is required to be accrued on
the financial statements of such Person.
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“ Licenses
” shall mean governmental licenses, permits, approvals and
other authorizations.
“ Marks ”
has the meaning set forth in Section 4.11(d)
.
“ MCC-Norway
” has the meaning set forth in the caption of this
Agreement.
“ MCC-Norway
Assets ” has the meaning set forth in Section
1.3 .
“ MCC-Wisconsin
” has the meaning set forth in the caption of this
Agreement.
“ MCC-Wisconsin
Assets ” has the meaning set forth in Section
1.3 .
“ MDEQ ”
shall mean the Michigan Department of Environmental
Quality.
“ Milwaukee Real
Estate ” shall mean all land, buildings,
improvements, fixtures and appurtenances thereto, and related items
of personal property, used by the Seller’s former Milwaukee
Display Division and located at 5100 W. Brown Deer Road, Milwaukee,
Wisconsin.
“ Multi-Color
” has the meaning set forth in the caption of this
Agreement.
“ Net Working Capital
Amount ” shall mean (i) the aggregate net book value
of the Inventories (as defined at Section 1.1(a)
hereof), net of a reserve for unsaleable, unuseable or obsolete
Inventories, and the Receivables (as defined at Section
1.1(b) hereof), net of a reserve for doubtful or
uncollectible accounts, and Included Prepaid Expenses (as defined
in Section 1.1(c) hereof), less (ii) the book
value of the trade payables and the accrued expenses of the
Business, all as determined as of 12:01 a.m. on the applicable date
of determination in the Ordinary Course, including, without
limitation, using U.S. GAAP and Seller’s cost accounting
system, methodology, accounting valuations, means of determining
obsolescence and reserves, and other accounting principles used by
the Seller in preparation of the Latest Balance Sheet.
“ Non-Real Estate
Purchased Assets ” has the meaning set forth in Section
4.8(a).
“ Norway Condenser Unit
Replacement ” shall mean the existing condenser unit
located on the roof top over the office on the Norway Real Estate,
which is subject to the price adjustment set forth on
Schedule 4.32 and which shall be replaced or repaired
by Buyer on or before 90 days from Closing.
“ Norway Condenser Unit
Replacement Liability ” shall mean (i) any Liability
for any Claims by a Governmental Authority under Environmental Law
or Government Authorizations arising from the existing condenser
unit prior to replacement or repair and (ii) any Liability under
Law arising from any Claims for property damage or personal injury
to any Person other than Buyer arising from the existing condenser
unit prior to replacement or repair.
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“ Norway
Contamination ” shall mean the Contamination on the
Norway Real Estate which is generally described in the Revised Cost
Proposal for Remediation of Soil and Groundwater Impacts dated May
12, 2004, from Sigma Environmental Services, Inc.
(“Sigma”), the Services Agreement between Sigma and
Seller dated July 13, 2004, and the Work Authorization between
Sigma and Seller dated July 13, 2004, all of which are attached
hereto as Exhibit N .
“ Norway Contamination
Closure ” shall mean Case Closure or similar written
Governmental Authorization as set forth in the Work Authorization
between Sigma and Seller dated July 13, 2004, and attached hereto
as a part of Exhibit N .
“ Norway Contamination
Liability ” shall mean (i) any Liability for any
Claims by a Governmental Authority under Environmental Law or
Government Authorizations for Cleanup of the Norway Contamination
and (ii) any Liability under Law arising from any Claims for
property damage or personal injury to any Person other than Buyer
caused by the Norway Contamination, all such Liability under (i)
and (ii) above, for purposes of this Agreement including
Seller’s obligations to Buyer in Sections
6.12(a) and 6.12(b) , shall be satisfied or
otherwise extinguished at the time Seller achieves Norway
Contamination Closure.
“ Norway Real
Estate ” shall mean all land, buildings,
improvements, fixtures and appurtenances thereto located at 512
Ninth Avenue, Norway, Michigan, the legal description of which is
set forth on Schedule 1.1(d) .
“ Norway Voluntary
Disclosure Response” or “Disclosure Response
” shall mean the Voluntary Disclosure, including the
Disclosure Response, filed by Seller, with the MDEQ on January 24,
2005 pursuant to Part 148, Environmental Audit Privilege and
Immunity, of the Michigan Natural Resources and Environmental
Protection Act, P.A. 451 of the Public Acts of 1994 as amended,
which Voluntary Disclosure is described in Schedule
4.16(e) .
“ Norway Voluntary
Disclosure Response Liability ” shall mean (i) any
Liability for any Claims by a Governmental Authority under
Environmental Law or Governmental Authorization arising from any
violation, potential violation, or Liability occurring prior to the
scheduled implementation of the Disclosure Response described for
said violation, potential violation, or Liability in the Disclosure
Response, and (ii) any Liability arising from any Claims under Law
for property damage or personal injury to any Person other than
Buyer arising from any such violation, potential violation, or
Liability occurring prior to the scheduled implementation of the
Disclosure Response described for said violation, potential
violation or Liability in the Disclosure Response, all such
Liability under (i) and (ii) above as to each such violation or
potential violation, for purposes of this Agreement, including
Seller’s obligations to Buyer, shall be satisfied or
otherwise extinguished (a) upon the earlier of either the scheduled
implementation date for the response strategy for said violation or
potential violation or the completion of implementation of the
response strategy for said violation or potential violation by
Seller or Buyer, and (b) for the following numbered items on the
Norway Voluntary Disclosure Response, the following dates shall
satisfy or otherwise extinguish all such Liability under this
Agreement including Seller’s obligations to Buyer for such
violations or potential violations: item 4.1, November 15, 2005;
item 4.2, November 15, 2005; item 4.5, Closing Date; item 4.6, July
1, 2005; item 4.9, October 1, 2005; item 4.10, November 15, 2005;
and item 4.11, November 15, 2005.
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“ Notice of
Claim ” shall mean a certificate signed by the
Indemnitee or its authorized representative: (i) stating that the
Indemnitee has paid or accrued (or intends to pay or accrue)
Indemnifiable Damages to which it is entitled to indemnification
pursuant to Article 8 and the amount thereof (to the
extent then known); and, (ii) specifying in reasonable detail, to
the extent possible, (A) the individual items of loss, damage,
Liability, cost, expense or deficiency included in the amount so
stated, (B) the date each such item was or will be paid or accrued
and (C) the basis upon which Indemnifiable Damages are
Claimed.
“ Notice of
Objection ” shall mean a written notice of objection
by the Indemnitor which shall set forth the grounds upon which the
objection is based and state whether the Indemnitor objects to all
or only a portion of the matter described in the Notice of
Claim.
“ Orders ”
shall mean all decisions, injunctions, writs, orders, settlements,
fines, penalties, awards, judgments, subpoenas, verdicts, or
decrees entered, issued, made or rendered by any Governmental
Authority pursuant to Law.
“ Ordinary
Course ” shall mean the ordinary course of the
Business, consistent with the past practices of the
Business.
“ Other Plans
” has the meaning set forth in Section 4.24
(a)
“ Owned Real
Property ” shall mean the Green Bay Real Estate, the
Norway Real Estate and the Watertown Real Estate,
collectively.
“ Patents
” has the meaning set forth in Section 4.11(c)
.
“ PBGC ”
has the meaning set forth in Section 7.2(i)(v)
.
“ Permits
” shall mean all permits, registrations, certificates,
consents, waivers, renewals, applications, modifications, approvals
and licenses, including franchises, titles (including motor vehicle
titles and current registrations), fuel permits and any other
similar authorizations necessary to the operation of the Business
as conducted immediately prior to the Closing Date or the use and
occupancy of the Owned Real Property as conducted immediately prior
to the Closing Date, all as issued by a Governmental Authority
pursuant to Law.
“ Person ”
shall mean an individual, partnership, corporation, business trust,
limited liability company, limited liability partnership, joint
stock company, trust, unincorporated association, joint venture or
other entity, or a Governmental Authority.
“ Proceeding
” shall mean any action, arbitration, audit, hearing,
investigation, litigation or suit (whether civil at law or equity,
criminal, administrative, judicial or investigative, whether formal
or informal, whether public or private) commenced, brought,
conducted or heard by or before, or otherwise involving, any
Governmental Authority, or arbitrator.
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“ Purchased
Assets ” has the meaning set forth in Section
1.1 .
“ Purchased Assets
Purchase Price ” has the meaning set forth in Section
2.1 .
“ Receivables
” has the meaning set forth in Section 1.1(b)
.
“ Release
” shall mean any exposure to or spilling, leaking, emitting,
discharging, pumping, pouring, emptying, injecting, depositing,
leaching, migrating, escaping, abandonment, leaching, dumping, or
other releasing into the Environment, whether intentional or
unintentional.
“ Retained Environmental
Liabilities ” shall mean, collectively, the Green Bay
Contamination Liability, the Norway Condenser Unit Replacement
Liability, the Norway Contamination Liability and the Norway
Voluntary Disclosure Response Liability.
“ Sales Purchase Price
Adjustment ” has the meaning set forth in Section
2.3(b)(ii) .
“ Sales Purchase Price
Adjustment Period” has the meaning set forth in Section
2.3(b)(i) .
“ Seller ”
has the meaning set forth in the caption of this
Agreement.
“ Seller’s Pension
Plan ” has the
meaning set forth in Section 7.2(e)
.
“ Software
” has the meaning set forth in Section 4.13(a)
.
“ Supplemental Financial
Statements ” shall mean the audited financial
statements of the Seller prepared by Grant Thornton LLP in
conjunction with Buyer’s pre-transaction due diligence
review.
“ Threatened
” shall mean any demand or statement made in writing or any
notice given in writing asserting a Claim.
“ Trade Secrets
” has the meaning set forth in Section 4.11(f)
.
“ U.S. GAAP
” shall mean generally accepted accounting principles as
utilized or applied in the United States of America.
“ Vehicles
” has the meaning set forth in Section 1.1(f)
.
“ WARN Act
” has the meaning set forth in Section 7.2(c)
.
“ WDNR ”
shall mean the Wisconsin Department of Natural
Resources.
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“ Watertown Real
Estate ” shall mean all land, buildings,
improvements, fixtures and appurtenances thereto located at 1222
Perry Way, Watertown, Wisconsin, the legal description of which is
set forth on Schedule 1.3 .
“ Watertown Real Estate
Purchase Price ” has the meaning set forth in Section
2.1 .
“ Welfare Plan
” has the meaning set forth in Section 4.24(a)
.
ARTICLE 1
PURCHASE AND SALE OF
ASSETS
1.1 Purchase of Assets from the
Seller . Subject to the terms and conditions herein set forth,
the Buyer shall purchase on the Closing Date, and the Seller shall
sell and transfer to the Buyer, the Business and all of the assets
of the Business, except only the assets excluded pursuant to
Section 1.2 hereof, all as the foregoing may exist as
of the Closing Date (hereinafter, all of such assets and properties
are referred to as the “ Purchased Assets
”). The Purchased Assets shall include, without limitation,
the following assets of the Business:
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(a)
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All inventories
including, without limitation, finished goods, work-in-process and
raw materials (the “ Inventories
”);
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(b)
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All trade and
other accounts receivable, all notes receivable and all other
amounts receivable (the “ Receivables
”);
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(c)
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The prepaid
expenses, advance payments and deposits set forth on Schedule
1.1(c) attached hereto (the “ Included Prepaid
Expenses ”);
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(d)
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The Norway Real
Estate;
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(e)
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All equipment
(building or office), machinery, tooling, dies, molds, patterns,
stampings, prototypes, parts, components, projects in process,
furniture, fixtures and fixed assets including, without limitation,
those items listed on Schedule 1.1(e) attached hereto
(the “ Equipment ”);
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(f)
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All motor
vehicles, including, without limitation, those listed on
Schedule 1.1(f) attached hereto (the “
Vehicles ”);
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(g)
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All rights of
the Seller under the Contracts listed on Schedule
1.1(g) attached hereto;
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(h)
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All of the
intangible and intellectual property described in Section
4.11 ;
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(i)
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All
Governmental Authorizations to the extent transferable;
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(j)
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All
manufacturing, delivery, office and other supplies;
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(k)
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All warranty
rights, guaranty rights, causes of action, judgments and Claims and
similar rights of the Seller against vendors, suppliers, designers,
architects, engineers or other third parties;
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(l)
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All lists of
customers, suppliers, vendors and sources; all books, records,
journals, computer software and files; all information, blueprints,
engineering data, drawings, sales and promotional materials, and
telephone and telecopier numbers and listings; and
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(m)
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All other
properties and assets of every kind, character or description,
tangible or intangible, owned by Seller and used or held solely for
use in connection with the Business, whether or not similar to the
items or types specifically set forth above.
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1.2 Excluded Assets . The
Purchased Assets shall not include, and the Seller shall retain,
the following assets (the “ Excluded Assets
”):
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(a)
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Cash, cash
equivalents, invested funds and marketable securities;
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(b)
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The
Seller’s rights under this Agreement and under the
Confidentiality and Nondisclosure Agreement dated July 21, 2004
between Buyer and Seller (the “ Confidentiality
Agreement ”);
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(c)
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Tax returns and
permanent tax and accounting records;
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(d)
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All rights
under Contracts, other than those listed on Schedule
1.1(g) ;
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(e)
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Any loan,
advance, note or receivable owed to the Business by JCI, any
affiliate of the Seller or any division of the Seller;
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(f)
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Insurance
policies and all rights with respect thereto;
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(g)
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The Milwaukee
Real Estate;
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(h)
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The
Seller’s and JCI’s rights under the Asset Purchase
Agreement by and among Kubin-Nicholson Corporation and NorthStar
Print Group, Inc. and Journal Communications, Inc. dated January 4,
2001, as amended;
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(i)
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Claims or
causes or rights of action to the extent they relate to any
Excluded Asset or any Liability or obligation which is not assumed
by the Buyer pursuant to Section 3.1
hereof;
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(j)
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All prepaid
expenses, advance payments and deposits, and refunds, except the
Included Prepaid Expenses;
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(k)
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Tax credits and
rights to any refunds with respect to taxes or tax
returns;
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(l)
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The
Seller’s minute books, stock and other corporate
records;
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(m)
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The
Seller’s rights under any employee benefit or other plan
offered by the Seller to its employees;
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(n)
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The lease
between the Seller and JCI for the Watertown Real
Estate;
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(o)
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All
Governmental Authorizations to the extent not transferable;
and
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(p)
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The Green Bay
Real Estate.
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1.3 Allocation of Purchased
Assets . All of the Purchased Assets physically located in the
State of Wisconsin on the Closing Date shall be purchased by
MCC-Wisconsin (the “ MCC-Wisconsin Assets
”). All of the Purchased Assets physically located outside of
the State of Wisconsin on the Closing Date shall be purchased by
MCC-Norway (the “ MCC-Norway Assets ”).
Notwithstanding the foregoing, the Patents and Marks shall be
purchased by Multi-Color.
1.4 Purchase of Watertown Real
Estate from JCI . Subject to the terms and conditions herein
set forth, MCC-Wisconsin shall purchase on the Closing Date, and
JCI shall sell and transfer to MCC-Wisconsin, the Watertown Real
Estate.
1.5 Closing . The closing
(the “ Closing ”) of the purchase and
sale of the Business, the Purchased Assets and the Watertown Real
Estate shall take place at 10:00 a.m., local time, on the Closing
Date, at the offices of Michael Best & Friedrich LLP, 100 East
Wisconsin Avenue, Milwaukee, Wisconsin 53202, or at such other
place as may be mutually agreed to by the Buyer and the Seller,
including, but not limited to, Closing via mail or facsimile. The
Closing shall be effective as of 12:01 a.m. on the Closing
Date.
1.6 Retention of Business
Records . The Buyer shall retain for a period of at least six
years all of the records of the Business included within the
Purchased Assets and the Seller shall retain for a period of at
least six years all of the records of the Business not included in
the Purchased Assets, and each party shall provide the other access
to the same during normal business hours for the purpose of
inspecting, reviewing and copying the same; provided, that
following the expiration of such six year period, each party may
dispose of any of such records in its possession which it no longer
desires to retain if such party first shall have notified the other
party in writing of such proposed disposition and allowed the other
party the opportunity to take possession of the records proposed to
be disposed of by such party.
ARTICLE 2
CONSIDERATION FOR
TRANSFER
2.1 Purchase Price . Subject
to adjustment pursuant to Section 2.3 hereof, the
purchase price for the Purchased Assets (the “Purchased
Assets Purchase Price” ) shall be $24,481,231 plus
the Buyer’s assumption of the Assumed Liabilities, as defined
at Section 3.1 hereof. The purchase price for the
Watertown Real Estate (the “Watertown Real Estate
Purchase Price” ) shall be $2,550,000.
15
2.2 Payment of the Purchase
Price . The Purchased Assets Purchase Price and the Watertown
Real Estate Purchase Price shall be paid on the Closing Date by
wire transfer of immediately available funds from Buyer to such
account as is designated by JCI, an amount equal to
$27,031,231.
2.3 Post-Closing Adjustments to
Purchased Assets Purchase Price .
(a) Net Working Capital
Adjustment .
(i) Calculation of Adjustment
. The Purchased Assets Purchase Price shall be reduced by the
amount that the Net Working Capital Amount as of the Closing Date
is less than the Net Working Capital Amount as of the Balance Sheet
Date, which is $8,763,643, as shown on the calculation attached
hereto as Schedule 2.3(a)(i) . The Purchased Assets
Purchase Price shall be increased by the amount that the Net
Working Capital Amount as of the Closing Date is greater than the
Net Working Capital Amount as of the Balance Sheet Date (such
adjustments being collectively referred to as the “ Net
Working Capital Purchase Price Adjustment
”).
(ii) Closing Date Net Working
Capital Statement . No later than 45 days after the Closing
Date, the Buyer shall prepare and deliver to the Seller a statement
of the Net Working Capital Amount as of the Closing Date (the
“ Closing Date Net Working Capital Statement
”). The Closing Date Net Working Capital Statement shall set
forth a separate line item for the Inventories, the Receivables,
the trade payables and the accrued expenses and shall be calculated
consistently with the method contained on Schedule
2.3(a)(i) for the calculation of the Net Working Capital
Amount as of the Balance Sheet Date. For purposes of measuring the
carrying value of any element of the Net Working Capital Amount as
of the Closing Date, the assets and liabilities that are part of
the definition thereof will be presented as though the transactions
contemplated herein had not occurred. In connection with the
preparation of the Closing Date Net Working Capital Statement, the
Buyer and Seller shall grant the other party access to such
documents and information included in the Purchased Assets as such
party may reasonably request. The Seller may review the
Buyer’s work papers used in the preparation of the Closing
Date Net Working Capital Statement, and the Buyer shall make
available to the Seller all work papers or other documents and
information as may be reasonably requested. Within 30 days after
the Closing Date Net Working Capital Statement is delivered to the
Seller by the Buyer, the Buyer and the Seller shall meet (if
necessary) in an attempt to stipulate to the Net Working Capital
Amount as of the Closing Date.
(iii) Supplemental Financial
Statements . To the extent that the Supplemental Financial
Statements result in an adjustment to the Purchase Price on or
before the Closing Date, the items and amounts taken into account
for such adjustment of the Purchase Price shall not be included in
the calculation of the Net Working Capital Purchase Price
Adjustment.
(b) Sales Purchase Price
Adjustment .
(i) Coors Sales Adjustment .
The Purchased Assets Purchase Price shall be increased by an amount
equal to 4.5 times the EBITDA impact for sales of
“Zima” labels, which shall be calculated consistently
with the method contained on Schedule 2.3(b)(i) , for
sales made to
16
Coors Brewing Company (the “ Coors
Sales Adjustment ”) during the period commencing on
the date which is six (6) months from the Closing Date and ending
on the date which is eighteen (18) months from the Closing Date
(the “ Sales Purchase Price Adjustment Period
”).
(ii) Gallo Sales Adjustment .
The Purchased Assets Purchase Price shall be either (A) increased
by an amount equal to the excess of (i) 4.5 times the EBITDA impact
for sales of “Bartles & James” labels, which shall
be calculated consistently with the method contained on
Schedule 2.3(b)(i) , to Gallo Winery during the Sales
Purchase Price Adjustment Period, over (ii) $1,725,750, or (B)
decreased by an amount equal to the excess of (i) $1,725,750 over
(ii) 4.5 times the EBITDA impact for sales of “Bartles &
James” labels, which shall be calculated consistently with
the method contained on Schedule 2.3(b)(i) , to Gallo
Winery during the Sales Purchase Price Adjustment Period (such
adjustments being collectively referred to as the “
Gallo Sales Adjustment ”). For purposes of this
Agreement, the Coors Sales Adjustment and the Gallo Sales
Adjustment shall be collectively referred to as the “
Sales Purchase Price Adjustment .”
(iii) No later than 30 days after
the Sales Purchase Price Adjustment Period, the Buyer shall prepare
and deliver to the Seller a statement of the Sales Purchase Price
Adjustment (the “Sales Purchase Price Adjustment
Statement” ). In connection with the preparation of
the Sales Purchase Price Adjustment Statement, the Buyer shall
grant Seller access to the Buyer’s work papers used in the
preparation of the Sales Purchase Price Adjustment Statement and
the Buyer shall make available to the Seller all other documents
and information as Seller may reasonably request. Within 30 days
after the Sales Purchase Price Adjustment Statement is delivered to
Seller by Buyer, the Buyer and Seller shall meet (if necessary) in
an attempt to stipulate to the Sales Purchase Price
Adjustment.
(c) Dispute Resolution . If
the Seller and the Buyer cannot so stipulate to the Net Working
Capital Amount as of the Closing Date within the 30-day period
following the delivery of the Closing Date Net Working Capital
Statement referenced above, or agree upon the Sales Purchase Price
Adjustment with the 30-day period following the delivery of the
Sales Purchase Price Adjustment Statement, the matters with respect
to which no stipulation or agreement has been reached shall be
submitted to and resolved by the Milwaukee office of
PriceWaterhouse Coopers, LLP (the “ Arbitrator
”), whose decision shall be binding and final upon the
parties. The parties shall use their best reasonable efforts to
cause the Arbitrator to render its decision no later 75 days after
the disputed matters have been submitted to the Arbitrator. Each
party shall be responsible for one half of the fees of the
Arbitrator. Each party shall cooperate with the Arbitrator and
provide the Arbitrator with access to such documents and
information as are in its possession and as may be requested by the
Arbitrator.
(d) Payment .
(i) Net Working Capital Purchase
Price Adjustment . At such time as the parties have stipulated
to the amount of the Net Working Capital Amount as of the Closing
Date or when the Arbitrator has rendered its decision under
Section 2.3(c) above, (a) if the Net Working Capital
Amount as of the Balance Sheet Date is greater than the Net Working
Capital Amount as of the Closing Date, then the amount of such
excess, plus interest thereon at the rate of 5% per annum computed
from the Closing Date until paid, shall be paid by the Seller to
the Buyer in cash, or (b) if
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the Net Working Capital Amount as of the Closing
Date is greater than the Net Working Capital Amount as of the
Balance Sheet Date, then the amount of such excess, plus interest
thereon at the rate of 5% per annum computed from the Closing Date
until paid, shall be paid by the Buyer to the Seller in
cash.
(ii) Sales Purchase Price
Adjustment . At such time as the parties have stipulated to the
amount of the Sales Purchase Price Adjustment or when the
Arbitrator has rendered its decision under Section
2.3(c) above, the Buyer shall pay to the Seller, or the
Seller shall pay to the Buyer, as applicable, any amounts due under
the Sales Purchase Price Adjustment, plus interest thereon at the
rate of 5% per annum computed from the first day of the Sales
Purchase Price Adjustment Period until paid.
(e) Inventory . For purposes
of determining the Net Working Capital Amount as of the Closing
Date and the Net Working Capital Purchase Price Adjustment pursuant
to this Section 2.3 , Seller and Buyer, at each
party’s own expense, shall jointly conduct and complete a
physical count and valuation of the Business’s Inventories as
of such date as they may mutually agree using procedures normally
used by Seller to take inventories of the type of inventory being
counted. The value, usability and salability of the Inventories
shall be determined in the Ordinary Course, including, without
limitation, using Seller’s cost accounting system,
methodology, accounting valuations, means of determining
obsolescence and reserves, and other accounting principles. Any
disputes regarding the foregoing shall be settled in the same
manner as other disputes are settled relating to the Net Working
Capital Purchase Price Adjustment. The Inventories reflected
thereby shall be valued in accordance with U.S. GAAP applied on a
consistent basis and consistent with the Ordinary
Course.
2.4 Purchase Price Allocation
. The parties acknowledge and agree that the Purchased Assets
Purchase Price was negotiated and concluded on the basis of the
component prices set forth on Schedule 2.4 attached
hereto in accordance with the respective fair market values of the
Purchased Assets. The parties agree to report and allocate, for all
federal, state and local tax purposes (including IRS Form 8594),
the Purchased Assets Purchase Price as so allocated and will not
take any inconsistent or contrary position therewith for any other
purpose.
ARTICLE 3
LIABILITIES
3.1 Assumed Liabilities;
Executory Contracts . At the Closing, the Buyer shall assume
and agree to pay, perform and discharge when and as due the Assumed
Liabilities. “ Assumed Liabilities ”
means (i) the trade payables of the Seller as of the Closing Date
as reflected in the Net Working Capital Amount as of the Closing
Date, (ii) the accrued expenses of the Seller as of the Closing
Date as reflected in the Net Working Capital Amount as of the
Closing Date, (iii) all of the written obligations of the Seller
under the Contracts listed on Schedule 1.1(g)
attached hereto, which are to be performed or discharged, under the
terms of such agreements, on or after the Closing Date, but as to
any payment obligation, only to the extent that the payment is for
goods, services or other types of consideration that are delivered,
performed or provided on or after the Closing Date, (iv) the
Assumed Environmental Liabilities, (v) all collective bargaining
agreements
18
listed on Schedule 3.1 , and all
Liabilities thereunder, (vi) the employee benefit plans listed on
Schedule 3.1 , and all Liabilities related thereto,
and (vii) all of the obligations of the Seller under Governmental
Authorizations, Licenses, Orders and Permits related to the
Business, the Purchased Assets and the Owned Real Property that are
transferred to the Buyer, which are to be performed or discharged
on or after the Closing Date except as otherwise set forth in this
Agreement.
3.2 Warranty Obligations .
The Buyer hereby assumes all Liability of the Seller with respect
to Claims made before or after Closing by any customer of the
Seller or other third party that any products sold by the Seller
prior to the Closing Date are defective; provided ,
however , (i) that the Buyer is not assuming, by virtue of
this Section 3.2 , any Liability of the Seller for
personal injury or property damage arising out of any such
defective product that was manufactured or sold prior to the
Closing, and (ii) to the extent that the aggregate cost to repair,
replace, correct and scrap any defective product pursuant to a
warranty Claim exceeds the Seller’s reserve therefor, such
excess shall constitute a Claim for indemnification against Seller
pursuant to Section 8.1 , and shall be subject to the
limitations on Indemnifiable Damages described in Section
8.6 , if and to the extent that such warranty Claim relates
to a product that was manufactured or sold prior to the
Closing.
3.3 Non-Assumption of
Liabilities . Except only as provided in Sections
3.1 , 3.2 and 7.2 hereof or
elsewhere in this Agreement, the Buyer shall not assume, pay,
perform, discharge or accept any Liabilities, debts or obligations
of the Seller or JCI of any kind whatsoever, whether actual,
contingent, accrued, known or unknown, including but not limited to
the following, which shall be specifically retained by
Seller:
(a) Agreement Liabilities .
Any Liability or obligation of Seller arising under this
Agreement.
(b) Certain Contract
Liabilities . Any Liability under any Contract transferred to
Buyer hereunder as part of the Purchased Assets that Buyer or
Seller learns of after the Closing Date and which is proximately
caused by a material breach of or material default under any such
transferred Contract, where such breach, default or event occurred
prior to the Closing Date.
(c) Employment Agreement
Liabilities . Any Liability under any employment, severance,
retention or termination agreement with any employee of
Seller.
(d) Employee Grievance
Liabilities . Any Liability arising out of or related to any
employee grievance Claim commenced or relating to periods prior to
the Closing Date, whether or not the affected employees become
employees of Buyer.
(e) Indemnification
Liabilities . Any Liability to indemnify any shareholder,
officer, director, employee or agent of Seller.
(f) Non-Compliance
Liabilities . Any Liability arising out of or resulting from
Seller’s non-compliance with any Legal Requirement, if and to
the extent that such non-compliance existed or was caused on or
prior to the Closing Date.
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(g) Post-Closing Acts or Failures
to Act Liabilities . Any Liability based upon acts or failures
to act of Seller occurring after the Closing Date, except with
respect to the Assumed Liabilities.
(h) Proceeding Liabilities .
Any Liability arising out of any Proceeding resulting from any
occurrence or event happening prior to the Closing Date.
(i) Product Liabilities .
Except for warranty obligations, any Liability or obligation
arising from any product liability of Seller or the Business not
included in the Assumed Liabilities in respect of products of the
Business manufactured, sold or provided to customers, clients or
others, prior to the Closing Date.
(j) Related Party Liabilities
. Any Liability of the Business to Seller or JCI (except as
specifically assumed by Buyer pursuant to Section 3.1
).
(k) Retained Contracts
Liabilities . Any Liability arising under any contract not
transferred to Buyer under this Agreement, including, without
limitation, all operating leases retained by Seller.
(l) Tax Liabilities . Any
Liability for any tax owed by Seller, including (1) any taxes
arising out of, or resulting from, Seller’s ownership or
operation of the Business or the Purchased Assets before the
Closing; and (2) any Liability for deferred taxes of any
nature.
(m) Retained Environmental
Liabilities . The Retained Environmental
Liabilities.
(n) Other Liabilities . Any
other Liability of Seller not included in the Assumed Liabilities,
if and to the extent that such Liability relates to periods prior
to Closing.
ARTICLE 4
REPRESENTATIONS AND
WARRANTIES
OF THE SELLER
In order to induce the Buyer to
enter into this Agreement, the Seller (and, as to certain specified
representations and warranties, JCI) makes the following
representations and warranties to the Buyer, except as qualified by
the disclosures made in the Schedules attached hereto, each of
which shall be deemed to be independently material and relied upon
by Buyer. All capitalized terms used in the Schedules, unless
otherwise defined therein, have the meaning set forth in this
Agreement. Unless otherwise noted therein, Section references in
the Schedules are to the Sections of this Agreement. The Seller
shall use reasonable efforts to disclose each applicable item in
the Schedule correlating to the appropriate Section of this
Agreement, however, an item disclosed in one Schedule which relates
to another Schedule and/or Section of this Agreement shall be
deemed disclosed in such other Schedule. Neither the
representations and warranties of Seller, nor the indemnification
obligations of Seller and JCI, shall be affected, qualified,
modified or deemed waived by reason of the fact that Buyer should
have known that any representation or warranty of Seller is or
might be inaccurate in any respect.
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4.1 Organization . The Seller
is a corporation duly organized and validly existing under the Laws
of the State of Wisconsin, has filed with the Wisconsin Department
of Financial Institutions the most recent annual report required to
be filed by it, has not filed articles of dissolution and has a
perpetual period of existence. Seller has, and at all times has
had, full corporate or other applicable power and authority to own
and lease its properties used in the conduct of the Business as
such properties are now owned and leased and to conduct the
Business as and where the Business has and is now being conducted.
Neither the nature of the Business, nor the character and location
of the properties owned or leased by Seller, makes its
qualification as a foreign corporation necessary under the laws of
any jurisdiction with respect to the operation of the Business,
except as set forth on Schedule 4.1 , or except where
the failure to be so qualified would not have any Adverse
Effect.
4.2 Conflicting Obligations .
The execution and delivery of this Agreement do not, and the
consummation of the sale and purchase of the Purchased Assets and
the Business contemplated hereby will not conflict with or violate
any provisions of the articles of incorporation or bylaws of the
Seller or any provisions of any Contract or Law to which the Seller
is subject or to which the Seller is a party, other than as set
forth on Schedule 4.2 and except for the failure to
obtain any third party consent required or necessary for any such
Contract to be assigned by the Seller to the Buyer.
4.3 Third Party Consents . To
Seller’s Knowledge, and except as set forth on Schedule
4.3 , no material third party consents, approvals or
authorizations, including Governmental Authorizations, are
necessary for the Seller and JCI to execute and deliver this
Agreement and to consummate the transactions contemplated hereby,
nor are any such material consents, approvals or authorizations
required in order for any of the Purchased Assets to be assigned to
the Buyer.
4.4 Enforceability . This
Agreement and all other agreements of the Seller contemplated
hereby are, or upon the execution and delivery thereof will be, the
valid and binding obligations of the Seller and JCI, enforceable
against the Seller and JCI in accordance with their
terms.
4.5 Authorization . The
Seller and JCI have all necessary power and authority to enter into
and perform the transactions contemplated hereby in accordance with
the terms and conditions hereof. The execution and delivery of this
Agreement, and the performance by the Seller and JCI of each of
their obligations contained herein, have been duly approved by the
Seller’s Board of Directors, Seller’s shareholders and
JCI’s Board of Directors.
4.6 Financial Statements
.
(a) Attached to Schedule
4.6(a) is a complete set of copies of the Financial
Statements. Except as otherwise disclosed on Schedule
4.6(a) , the Financial Statements have been prepared in
accordance with U.S. GAAP applied on a consistent basis throughout
the indicated periods and fairly present the financial condition
and results of operation of the Business at the dates and for the
relevant periods indicated, except for the absence of notes and
subject to normal recurring year-end adjustments, the effect of
which will not, individually or in the aggregate, have an Adverse
Effect.
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(b) Attached to Schedule
4.6(b) is a complete set of copies of the Interim Financial
Statements. Except as otherwise disclosed on Schedule
4.6(b) , the Interim Financial Statements have been
prepared in the Ordinary Course using U.S. GAAP, including, without
limitation, using Seller’s cost accounting system,
methodology, accounting valuations, means of determining
obsolescence and reserves, and other accounting
principles.
4.7 Real Property; Leases .
Except for the Milwaukee Real Estate, the only real properties
owned by the Seller are the Green Bay Real Estate and the Norway
Real Estate. Except as otherwise disclosed on Schedule
4.7 (the “ Leased Real Property
”), the Seller does not lease or rent any real property to or
from another Person.
4.8 Title .
(a) Non-Real Estate Purchased
Assets . Except as disclosed on Schedule 4.8(a) ,
the Seller owns good and marketable title to all of the Non-Real
Estate Purchased Assets, free and clear of all security interests,
conditional sale or other title retention agreements, liens, and
other encumbrances of any kind. All of the Non-Real Estate
Purchased Assets are located upon the Seller’s premises,
except as otherwise disclosed on Schedule 4.8(a) .
“ Non-Real Estate Purchased Assets ”
means the Purchased Assets, other than the Green Bay Real Estate,
the Norway Real Estate and the Watertown Real Estate.
(b) Real Estate . Except as
disclosed on Schedule 4.8(b) , the Seller owns good
and marketable title to the Green Bay Real Estate and the Norway
Real Estate. Except as disclosed on Schedule 4.8(b) ,
JCI owns good and marketable title to the Watertown Real Estate.
For the purposes of this Agreement, if and to the extent there are
any differences or conflicts between the exceptions and
encumbrances listed on Schedule 4.8(b) and those
listed on the applicable deeds for the Norway Real Estate or the
Watertown Real Estate or in the Green Bay Lease, the exceptions and
encumbrances listed on Schedule 4.8(b) shall
control.
4.9 Receivables . All of the
Receivables arose and will arise solely from bona fide transactions
in the Ordinary Course.
4.10 Inventories. Except as
otherwise disclosed on Schedule 4.10 , no items
included in the Inventories are pledged as collateral or held by
Seller on consignment from another Person. Except as otherwise
disclosed on Schedule 4.10 , the inventories are
valued in accordance with U.S. GAAP, consistent with Seller’s
past practices, and were so valued on the Latest Balance
Sheet.
4.11 Intellectual Property
.
(a) Definition of Intellectual
Property . The term “ Intellectual Property
” as used in this Agreement means all of the following
intangible and intellectual property of Seller solely with respect
to the operation or conduct of the Business or the ownership or use
of any of the Purchased Assets:
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(i) all Internet domain names
(registered and unregistered), telephone numbers, facsimile numbers
and email addresses used in the Business, each of which is set
forth on Schedule 4.11(a) ;
(ii) the name
“NorthStar,” and all other Marks;
(iii) all Patents;
(iv) all Copyrights; and
(v) all Trade Secrets.
(b) Ownership of Intellectual
Property . Except as disclosed on Schedule
4.11(b) , Seller owns all right, title and interest in and
to, or has a valid license for the use of, all of the Intellectual
Property, free and clear of all liens, security interests, charges,
Encumbrances, equities and other adverse Claims material to the
operation of the Business as it is currently conducted and has the
right to use all of such Intellectual Property without payment to a
third party. Except as disclosed on Schedule 4.11(b)
, all Intellectual Property is either assignable or licensable by
Seller to Buyer and such assignment or license may be made without
the consent of any third party and will not result in any breach,
violation or default under any agreement involving Intellectual
Property.
(c) Patents . Set forth on
Schedule 4.11(c) is a complete and accurate list,
including abstracts, of all patents Seller has the right to use in
the operation or conduct of the Business (“
Patents ”). Except as disclosed on
Schedule 4.11(c) :
(i) all of the issued Patents are
(A) currently in compliance with all applicable Legal Requirements
(including payment of filing, examination and maintenance fees and
proofs of working or use); (B) to Seller’s Knowledge, valid
and enforceable; and (C) not subject to any maintenance fees or
taxes or actions falling due within 90 days after the Closing
Date;
(ii) no Patent is now involved in
any interference, reissue, reexamination or opposition
Proceeding;
(iii) no written Claim has been
asserted by Seller against any third party under any Patent nor has
any written Claim been made by any third party against Seller that
a Patent is invalid or unenforceable; and
(iv) no written Claim by any third
party has been received by Seller that any of the products
manufactured and sold, or any process or know-how used, by Seller
infringes or is alleged to infringe upon any patent or other
proprietary right of any third party.
(d) Marks . Set forth on
Schedule 4.11(d) is a complete and accurate list and
summary description of all registered marks used solely with
respect to the operation or conduct of the Business (“
Marks ”). Except as disclosed on Schedule
4.11(d) :
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(i) all Marks that have been
registered with the United States Patent and Trademark Office are
(A) currently in compliance with all applicable Legal Requirements
(including the timely post-registration filing of affidavits of use
and incontestability and renewal applications); (B) to
Seller’s Knowledge, valid and enforceable; and (C) not
subject to actions falling due within 90 days after the date
hereof, except for such noncompliance which would not be expected
to have an Adverse Effect;
(ii) no Mark is now involved in any
opposition, invalidation, cancellation or infringement action and
to Seller’s Knowledge no such action is Threatened against
any of the Marks; and
(iii) to Seller’s Knowledge,
none of the Marks used by Seller, infringes or is alleged to
infringe any trade name, trademark or service mark of any third
party, nor is there any potentially interfering trademark or
trademark application of any third party.
(e) Copyrights . Set forth on
Schedule 4.11(e) is a list and summary description of
all of Seller’s registered copyrights used solely with
respect to the operation or conduct of the Business (“
Copyrights ”). Except as disclosed on
Schedule 4.11(e) :
(i) to Seller’s Knowledge, all
the material Copyrights that have been registered are (A) currently
in compliance with all applicable Legal Requirements; (B) valid and
enforceable; and (C) not subject to any taxes or actions falling
due within 90 days after the date hereof;
(ii) to Seller’s Knowledge, no
Copyright is infringed or has been challenged or threatened in any
way; and
(iii) to Seller’s Knowledge,
none of the subject matter of any of the Copyrights infringes or is
alleged to infringe any copyright of any third party or is a
derivative work based on the work of a third party.
(f) Trade Secrets . Set forth
on Schedule 4.11(f) is a list and summary of
Seller’s key trade secrets and know how related to or used
with respect to the operation or conduct of the Business (“
Trade Secrets ”). Seller has taken all
reasonable precautions to protect the secrecy, confidentiality and
value of each Trade Secret of Seller with respect to the operation
or conduct of the Business or the ownership or use of any of the
Purchased Assets. To Seller’s Knowledge, and except as
disclosed on Schedule 4.11(f) , (a) Seller has good
title and an absolute, exclusive right to use the Trade Secrets;
(b) the Trade Secrets are not part of the public knowledge or
literature and have not been used, divulged or appropriated either
for the benefit of any other Person or to the detriment of Seller;
(c) no Trade Secret is subject to any adverse Claim or has been
challenged or Threatened in any way; and (d) the documentation
relating to such Trade Secret, is current, accurate and sufficient
in detail and content to identify and explain it and to allow its
full and proper use.
(g) Royalties . Set forth on
Schedule 4.11(g) is a list and summary description,
including any royalties paid or received by Seller with respect to
the operation or conduct of the
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Business, of all agreements or contracts
relating to any of the Intellectual Property to which Seller is a
party or by which it is bound, except for any license implied by
the sale of a product and perpetual, paid-up licenses for commonly
available software programs with a value of less than $500 under
which Seller is the licensee. There are no outstanding or, to the
Knowledge of Seller, threatened disputes or disagreements relating
to any such agreement.
(h) Employee Agreements . To
Seller’s Knowledge, and except as set forth on Schedule
4.11(h) , (a) no former or current employee of Seller has
executed a written agreement that assigns to a person other than
Seller any or all rights to any inventions, improvements,
discoveries or information relating to the Business and developed
by such former or current employee in the course of his or her
employment with Seller; (b) any inventions, improvements,
discoveries or information relating to the Business and developed
by former or current employees of Seller in the course of their
employment with Seller are owned by Seller; and (c) no employee of
Seller has entered into any agreement that restricts or limits in
any way the scope or type of work in which the employee may be
engaged or requires the employee to transfer, assign or disclose
information concerning his work to anyone other than
Seller.
4.12 Governmental
Authorizations . Except as disclosed on Schedule
4.12 : (a) the Business possesses all Governmental
Authorizations as are required and necessary for the conduct of the
Business as it was conducted as of the Closing Date and the use and
operation of the Owned Real Property; (b) all such Governmental
Authorizations are currently in full force and effect; (c)
Schedule 4.12 sets forth a list of all such
Governmental Authorizations, and pending applications for such
Governmental Authorizations, and true and complete copies thereof
have been previously delivered to the Buyer; and (d) the Seller and
JCI are and at all times have been in compliance with the terms and
conditions of all such Governmental Authorizations. The Seller has
timely submitted renewal applications and associated fees for all
such Governmental Authorizations that are due prior to the Closing
and has paid all fees associated with such Governmental
Authorizations that are due and owing prior to the
Closing.
4.13 Software .
(a) List . Schedule
4.13(a) sets forth a list of all material software used by
Seller in the operation of the Business as of the Closing Date (the
“ Software ”).
(b) Ownership . To
Seller’s Knowledge, and except as disclosed on Schedule
4.13(b) , Seller owns all right, title and interest in and
to, or has a valid license for the use of, all of the Software and
has the right to use all of such Software without payment to a
third party.
(c) Assignability . To
Seller’s Knowledge, and except as disclosed on Schedule
4.13(c) , all of the Software is either assignable or
licensable by Seller to Buyer and such assignment or license may be
made without the consent of any third party and will not result in
any breach, violation or default under any agreement involving the
Software.
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