Exhibit 10.12
ASSET PURCHASE AGREEMENT
Dated as of June 24, 2002
By and Between
ASSOCIATED MATERIALS INCORPORATED
and
AMERCABLE INCORPORATED
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "AGREEMENT"), dated as of June
24, 2002, is entered into by and between Associated Materials Incorporated
("SELLER"), a Delaware corporation, and AmerCable Incorporated ("BUYER"), a
Delaware corporation.
W I T N E S S E T H :
WHEREAS, Seller's AmerCable division (the "DIVISION") is in the
business of manufacturing, distributing and selling certain specialty electrical
cables and cable accessories for use in underground and surface mining, marine
and offshore drilling, automotive assembly robotics, telecommunications and a
variety of other industrial applications under the tradenames of "AmerCable" and
"Offshore/Marine Cable Specialists" (the "BUSINESS");
WHEREAS, Buyer wishes to purchase and Seller wishes to sell
substantially all of the assets and properties used or held for use in the
conduct of the Business upon and subject to the terms and conditions set forth
in this Agreement; and
WHEREAS, in connection with such purchase and sale, Buyer shall
assume certain Liabilities (as defined below) and Seller shall retain certain
Liabilities upon the terms and subject to the conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the terms and conditions
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. When used in this Agreement, the following terms
shall have the respective meanings specified therefor below (such meanings to be
equally applicable to both the singular and the plural forms of the terms
defined).
"ACQUIRED ACCOUNTS RECEIVABLE" shall have the meaning set forth in
Section 2.1(j).
"ACQUIRED CONTRACTS" shall have the meaning set forth in Section
2.1(d).
"ACQUIRED CURRENT ITEMS" shall have the meaning set forth in Section
2.1(i).
"ACQUIRED INVENTORY" shall have the meaning set forth in Section
2.1(c).
"ACQUIRED LEASED REAL PROPERTY" shall have the meaning set forth in
Section 2.1(a).
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"ACQUIRED TANGIBLE PERSONAL PROPERTY" shall have the meaning set
forth in Section 2.1(b).
"AFFILIATE" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
such Person; provided that, for the 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, by contract or otherwise.
"AGREED CLAIMS" shall have the meaning set forth in Section 10.4(d).
"AGREEMENT" shall have the meaning set forth in the preamble to this
Agreement.
"AMERCABLE EMPLOYEE HEALTH BENEFIT ACCOUNT" shall have the meaning
set forth in Section 5.2(a).
"ASSIGNMENT AND ASSUMPTION AGREEMENT" shall mean the assignment and
assumption agreement to be executed by Buyer and Seller in substantially the
form of Exhibit A.
"ASSUMED EMPLOYEE BENEFIT PLANS" shall have the meaning set forth in
Section 5.3(a).
"ASSUMED LIABILITIES" shall have the meaning set forth in Section
2.2.
"ASSUMED TAXES" shall have the meaning set forth in Section 2.2(f).
"BOOKS AND RECORDS" shall mean books, records, files and data,
including electronic or computerized data, certificates and other documents,
including accounting and financial records and sales and promotional literature.
"BUSINESS" shall have the meaning set forth in the first recital.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or
a day on which banks located in New York, New York shall be authorized or
required by law to close.
"BUYER" shall have the meaning set forth in the preamble to this
Agreement.
"BUYER INDEMNIFIED PARTY" shall have the meaning set forth in
Section 10.2(a).
"CERCLA" shall have the meaning set forth in the definition of
"ENVIRONMENTAL LAW".
"CERTIFICATE" shall have the meaning set forth in Section 10.4(a).
"CLAIMS" shall have the meaning set forth in Section 6.10.
"CLOSING" shall have the meaning set forth in Section 2.5.
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"CLOSING DATE" shall have the meaning set forth in Section 2.5.
"COBRA" shall have the meaning set forth in Section 5.2(b).
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and regulations promulgated thereunder.
"CONTRACTS" shall mean all written agreements, contracts, insurance
policies, licenses, leases of personal property, leases of real property,
indentures, mortgages, instruments, security interests, purchase and sale orders
and other similar arrangements, commitments or understandings.
"DISPUTE NOTICE" shall have the meaning set forth in Section
6.11(d).
"DIVISION" shall have the meaning set forth in the first recital.
"EMPLOYEE BENEFIT PLANS" shall have the meaning set forth in Section
3.8(a).
"EMPLOYEE BENEFITS ASSIGNMENT AND ASSUMPTION AGREEMENT" shall mean
the assignment and assumption agreement to be executed by Buyer and Seller in
substantially the form of Exhibit B.
"ENCUMBRANCES" shall mean liens, security interests, options, rights
of first refusal, easements, mortgages, pledges, charges, adverse claims,
indentures, deeds of trust, rights-of-way, restrictions on the use of real
property, encroachments, licenses to third parties, leases to third parties,
security agreements, or any other encumbrances and other restrictions or
limitations on use of real or personal property.
"ENVIRONMENTAL LAW" shall mean any Federal, state or local statute,
law or regulation relating to the protection of public health and welfare and
the environment or to Hazardous Substances, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, 42 U.S.C. Section 9601 et seq. ("CERCLA"); the Resource Conservation
and Recovery Act, as amended, 42 U.S.C. Section 6901 et seq.; the Federal Water
Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Clean Air Act, as
amended, 42 U.S.C. Section 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C.
Section 3808 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et
seq.; and analogous state and local laws.
"ENVIRONMENTAL LIABILITIES" shall mean any and all Liabilities
arising in connection with the Business or the Purchased Assets that arise under
or relate to any Environmental Law.
"ERISA" shall have the meaning set forth in Section 3.8(a).
"ERISA AFFILIATE" shall have the meaning set forth in Section
5.3(a).
"EXCLUDED ASSETS" shall mean (i) cash and cash equivalents held by
the Division as of the Closing Date; (ii) all intercompany receivables payable
to the Division by Seller or any
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of its Affiliates as of the Closing Date; (iii) all refunds, rebates or similar
payments relating to Taxes attributable to the Purchased Assets, the Business or
the Division, but only to the extent such Taxes were previously paid by Seller
or any of its Affiliates; provided, however, that the term Excluded Assets shall
not include any refunds, rebates or similar payments relating to any Assumed
Taxes attributable to taxable periods ending prior to December 31, 2002; (iv)
all Returns of Seller except that Buyer shall have access to any Returns of
Seller relating to the Assumed Taxes, as provided herein; (v) any Books and
Records referred to in Section 2.1(f) that Seller is required by law to retain;
(vi) all insurance policies or insurance coverage (or assumed or self-insurance
coverage) of Seller or its Affiliates not related exclusively to or used
exclusively in the Business (subject to the parties' rights and obligations set
forth in Section 6.11); (vii) any rights of Seller or any of its Affiliates
under this Agreement; (viii) all claims, causes of action or rights of recovery
for reimbursement, contribution, refunds, indemnity or other similar payment
recoverable by Seller from or against any third party with respect to any
Retained Liabilities or any Losses for which an indemnification payment is made
to Buyer by Seller under this Agreement (including rights of set-off, rights to
refunds and rights of recoupment from or against any such third party), but only
to the extent of such indemnification payment; and (ix) all other properties,
assets, rights, claims and Contracts of Seller not included as Purchased Assets
or otherwise excluded herein.
"GOVERNMENTAL ENTITY" shall mean any Federal, state, municipal or
other government, or any department, commission, board, bureau, agency, public
authority, or instrumentality thereof, or any court or arbitrator.
"HAZARDOUS SUBSTANCES" shall have the meaning set forth in CERCLA
and shall also include "pollutant or contaminant" and "petroleum products" as
those terms are defined or used in CERCLA, urea formaldehyde insulation,
polychlorinated biphenyls, asbestos, asbestos-containing materials, radioactive
materials and municipal solid waste.
"INDEMNIFIED PARTY" shall have the meaning set forth in Section
10.4(a).
"INDEMNIFYING PARTY" shall have the meaning set forth in Section
10.4(a).
"INDEPENDENT INSURANCE EXPERT" shall have the meaning set forth in
Section 6.11(d).
"INTELLECTUAL PROPERTY" shall mean all fictitious business names,
trade names, trade dress, service marks, brand names, patents, patent
applications, trade secrets and know how, trademarks, trademark registrations
and applications therefor, copyrights, proprietary and technical information,
domain names and data, methods, designs, processes, software, procedures,
improvements thereon, refinements thereof and all agreements relating to
intellectual property.
"INVENTORY" shall mean all inventory held for sale (directly or by
consignment) and all raw materials, packaging and supply materials, purchased
parts, component parts, spare parts, finished goods and products and work in
process.
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"KNOWLEDGE" (i) when referring to Seller, shall mean the actual
knowledge of Michael Caporale or Keith LaVanway and (ii) when referring to
Buyer, shall mean the actual knowledge of Robert Hogan, Chad Archer, Rodney Cole
or David Nasky.
"LEASED REAL PROPERTY" shall have the meaning set forth in Section
2.1(a).
"LETTER OF INTENT" shall have the meaning set forth in Section
6.2(b).
"LIABILITY" shall mean any liabilities, obligations,
responsibilities, commitments and expenses of any nature or kind, whether known
or unknown, accrued or unaccrued, absolute, contingent or otherwise, and whether
due or to become due.
"LOSSES" shall mean any penalties, fines, costs, amounts paid in
settlement, damages, losses, obligations, claims of any kind, interest or
expenses (including reasonable attorneys' fees and expenses), whether or not
involving a third party claim.
"MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" shall mean
(i) when used with respect to the Business, any materially adverse change in or
effect on the Purchased Assets, operations, financial condition or results of
operations of the Business as a whole, except for any such change or effect
resulting from or arising out of (a) changes or developments in United States or
global economic conditions generally, (b) changes or developments in the
industry in which the Division operates, (c) changes or developments in
financial or securities markets or (d) changes or developments caused by acts of
terrorism or war (whether or not declared) or (ii) when used with respect to
Buyer or Seller, any materially adverse change in or effect on the ability of
Buyer or Seller, as the case may be, to perform its obligations under this
Agreement.
"OVERLAP PERIOD" shall mean any taxable year or other taxable period
beginning on or before the Closing Date and ending after the Closing Date.
"PERMITS" shall mean governmental permits, franchises, approvals,
licenses, certificates, registrations and authorizations.
"PERMITTED ENCUMBRANCES" shall mean (i) those encumbrances set forth
on Schedule 1.1, (ii) statutory liens of landlords and liens of carriers,
warehousemen, mechanics materialmen and other similar Encumbrances arising or
incurred in the ordinary course of business, (iii) liens for Taxes, assessments
or other governmental charges not yet due and payable, or due but not yet
delinquent, or which are being contested in good faith, (iv) liens incurred or
deposits made in connection with worker's compensation, unemployment insurance
or other types of social security and (v) minor defects of title, easements,
rights-of-way, restrictions and other similar charges or Encumbrances which, in
the case of each of clauses (i) through (iv) do not materially detract from the
value, or impair the use or transfer, of the Business.
"PERSON" shall mean and include any individual, partnership, firm,
limited liability company, joint venture, corporation, trust, unincorporated
organization and Governmental Entity.
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"PRE-CLOSING INSURANCE POLICIES" shall have the meaning set forth in
Schedule 6.11.
"PRE-CLOSING PERIOD" shall mean any taxable year or other taxable
period that ends on or before the Closing Date and, with respect to the Overlap
Period, the portion of such taxable year or other taxable period ending on and
including the Closing Date.
"PURCHASE PRICE" shall have the meaning set forth in Section 2.4.
"PURCHASED ASSETS" shall have the meaning set forth in Section 2.1.
"REPRESENTATIVES" shall have the meaning set forth in Section
6.4(a).
"RETAINED LIABILITIES" shall mean (i) all Liabilities related to
Taxes attributable to the Purchased Assets, the Business or the Division for
taxable periods or portions thereof ending on or prior to the Closing Date,
other than those Taxes assumed by Buyer pursuant to Sections 2.2(e) and 2.2(f),
(ii) all Liabilities related to accounts payable by the Division to Seller or
any of its Affiliates as of the Closing Date, (iii) all Liabilities relating to
any Employee Benefit Plan subject to Title IV of ERISA or Section 412 of the
Code, including any "multiemployer plans" as defined by Section 3(37) of ERISA,
even if such plans benefited the Transferred Employees or any former employee of
the Division; (iv) all Liabilities relating to any post-retirement plans,
arrangements or agreements with respect to Earl R. Karges, Edwin J. Kazanovicz,
Donald A. Vickers or George L. Marchand, or any of the beneficiaries of such
individuals, (v) all Liabilities relating to or arising out of any of Seller's
contracts, agreements or commitments not included in the Purchased Assets, (vi)
all Liabilities of Seller under or in connection with this Agreement or any of
the transactions contemplated hereby, including all Liabilities with respect to
which Seller is obligated to indemnify Buyer under this Agreement, and (vii) all
Liabilities of Seller not specifically assumed by Buyer hereunder.
"RETIREMENT PLAN" shall have the meaning set forth in Section
5.3(b).
"RETURN" shall mean any return, declaration, report, statement or
other document required to be filed in respect of Taxes.
"SELLER" shall have the meaning set forth in the preamble to this
Agreement.
"SELLER INDEMNIFIED PARTY" shall have the meaning set forth in
Section 10.3(a).
"SELLER NAMES" shall have the meaning set forth in Section 6.8.
"SELLER PRORATED TAXES" shall have the meaning set forth in Section
11.5.
"SELLER'S MEDICAL PLAN" shall have the meaning set forth in Section
5.2(a).
"TAXES" shall mean all taxes, assessments, charges, duties, fees,
levies or other governmental charges, including all Federal, state, local,
foreign and other income, franchise, profits, capital gains, capital stock,
transfer, gift, estate, death, inheritance, generation-skipping, sales, use,
occupation, property, excise, severance, windfall profits, stamp, license,
payroll,
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employment, unemployment, ad valorem, withholding and other taxes, assessments,
charges, duties, fees, levies or other governmental charges of any kind
whatsoever (whether payable directly or by withholding and whether or not
requiring the filing of a Return), all estimated taxes, deficiency assessments,
additions to tax, penalties and interest and any liability for such amounts as a
result either of being a member of a combined, consolidated, unitary or
affiliated group or of a contractual obligation to indemnify any Person.
"TRANSFERRED EMPLOYEE" shall have the meaning set forth in Section
5.1(a).
"UNASSIGNED CONTRACTS" shall have the meaning set forth in Section
6.6.
"WARN" shall have the meaning set forth in Section 5.3(d).
1.2 Construction. In this Agreement, unless the context otherwise
requires:
(a) any reference to "writing" or comparable expressions includes a
reference to facsimile transmission or comparable means of communication;
(b) words expressed in the singular number shall include the plural
and vice versa, words expressed in the masculine shall include the feminine and
neuter gender and vice versa;
(c) references to Articles, Sections, Exhibits, Schedules and
Recitals are references to articles, sections, exhibits, schedules and recitals
of this Agreement;
(d) reference to "day" or "days" are to calendar days;
(e) this "Agreement" or any other agreement or document shall be
construed as a reference to this Agreement or, as the case may be, such other
agreement or document as the same may have been, or may from time to time be,
amended, varied, novated or supplemented; and
(f) "include," "includes," and "including" are deemed to be followed
by "without limitation" whether or not they are in fact followed by such words
or words of similar import.
1.3 Schedules and Exhibits. The Schedules and Exhibits to this
Agreement are incorporated into and form an integral part of this Agreement. If
an Exhibit is a form of agreement, such agreement, when executed and delivered
by the parties thereto, shall constitute a document independent of this
Agreement.
ARTICLE II
PURCHASE AND SALE OF ASSETS
2.1 Purchase and Sale of Assets. Upon the terms and subject to the
conditions, limitations and exclusions set forth in this Agreement, Seller shall
sell, convey, transfer, assign and deliver to Buyer on the Closing Date, and
Buyer shall purchase, acquire and
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accept from Seller, all of Seller's right, title (to the extent Seller has such
title) and interest in, to and under the properties, assets, rights, claims and
Contracts related exclusively to or used exclusively or held for use exclusively
in the Business, other than the Excluded Assets (collectively, the "PURCHASED
ASSETS"), including the following:
(a) the leased real property listed on Schedule 2.1(a) (the "LEASED
REAL PROPERTY"), together with all improvements thereon (collectively, the
"ACQUIRED LEASED REAL PROPERTY");
(b) all tangible personal property, including machinery, equipment,
furniture, furnishings, vehicles, tools, dies, parts, supplies and other
tangible personal property related exclusively to or used exclusively or held
for use exclusively in the Business, including the items of the type set forth
on Schedule 2.1(b) (collectively, the "ACQUIRED TANGIBLE PERSONAL PROPERTY"),
which Schedule sets forth the tangible personal property of the Division as of
June 21, 2002;
(c) the Inventory related exclusively to or used exclusively or held
for use exclusively in the Business, including the items of the type set forth
on Schedule 2.1(c) (collectively, the "ACQUIRED INVENTORY"), which Schedule sets
forth the Inventory of the Division as of June 21, 2002;
(d) subject to the receipt of any consents that are required, all
rights and interest in and under Contracts related exclusively to or used
exclusively or held for use exclusively in the Business, including all rights to
sell and receive goods and services pursuant to such Contracts and to assert
claims and take other actions in respect of breaches or other violations
thereof, including the Contracts set forth on Schedule 2.1(d) (collectively, the
"ACQUIRED CONTRACTS") (it being understood that the Unassigned Contracts shall
be treated as provided for in Section 6.6);
(e) the Intellectual Property used exclusively or held for use
exclusively in the Business, including the Intellectual Property set forth on
Schedule 2.1(e);
(f) the Books and Records used exclusively or held for use
exclusively in the Business;
(g) to the extent transferable, all rights under express or implied
warranties from suppliers to the Division to the extent such warranties relate
exclusively to the Business or the Purchased Assets (it being understood that
any such warranties that are not transferable or that do not relate exclusively
to the Business shall be treated as provided for in Section 6.9);
(h) to the extent transferable, and subject to the receipt of any
Required Governmental Consent, the Permits related exclusively to or used
exclusively or held for use exclusively in connection with the use, operation or
ownership of the Purchased Assets or the conduct of the Business;
(i) all prepaid assets, expenses, security deposits and other
current assets related exclusively to the Business, including those set forth on
Schedule 2.1(i) (collectively, the "ACQUIRED CURRENT ITEMS"), but excluding
current assets that are Excluded Assets;
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(j) all accounts receivable, notes or other evidences of
indebtedness (in favor of the Business) related exclusively to the Business,
including those of the type set forth on Schedule 2.1(j) (collectively, the
"ACQUIRED ACCOUNTS RECEIVABLE"), which Schedule sets forth all accounts
receivable, notes or other evidences of indebtedness as of June 21, 2002, to the
extent payment with respect thereto shall not have been received by Seller prior
to the Closing Date, but excluding any intercompany receivables that are
Excluded Assets;
(k) the Assumed Employee Benefit Plans to be transferred to Buyer
pursuant to Section 5.3(b);
(l) all customer and supplier lists used exclusively or held for use
exclusively in the Business;
(m) the goodwill related exclusively to the Business;
(n) all causes of action, claims, settlements, rights of recovery,
insurance proceeds (from policies held by third parties relating to any
Purchased Assets or Assumed Liabilities) and set-off of every kind pertaining
exclusively or relating exclusively to the Business or the Purchased Assets, or
to the extent the related Liability, if any, is an Assumed Liability, including
all insurance, warranty and condemnation proceeds, judgments and awards received
after the Closing Date with respect to damage, destruction or loss of any
Purchased Assets, any third party claims or otherwise (it being understood that
any such causes of action, claims, settlements, rights of recovery, insurance
proceeds and set-offs that (i) relate exclusively to the Business or the
Purchased Assets, but are not (for any reason whatsoever) transferable to,
assignable to or enforceable by Buyer, or (ii) do not relate exclusively to the
Business, but do relate directly to a Purchased Asset or an Assumed Liability
and have a value in excess of $100,000, shall be treated as provided in Section
6.10);
(o) all of Seller's rights to the telephone numbers used exclusively
by the Division; and
(p) all other assets of Seller not specifically set forth in this
Section 2.1 if such asset is used exclusively or held for use exclusively in the
Business.
In connection with the foregoing (but without affecting the
interpretation of any other provision of this Agreement), there shall be a
rebuttable presumption that (a) any tangible asset that is (i) normally located
at the Division's facilities in El Dorado, Arkansas or Houston, Texas, (ii) held
on consignment at any location set forth on Schedule 2.1(q), (iii) held at any
vendor location set forth on Schedule 2.1(q) for further processing, (iv) a
laptop computer or printer in the possession of the Division's field sales
personnel or (v) in transit to or from any of the above locations where legal
title and risk of ownership is retained or has been assumed by the Division
shall be deemed a Purchased Asset, (b) any Contract executed by or in the name
of the Division (including Offshore/Marine Cable Specialists) shall be deemed a
Purchased Asset and (c) any account receivable previously invoiced in the name
of the Division (including Offshore/Marine Cable Specialists) shall be deemed a
Purchased Asset.
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It is acknowledged that Schedules 2.1(b), 2.1(c) and 2.1(j) set
forth lists of assets, rights, claims and Contracts as of a certain date and
that such lists are subject to change in the ordinary course of business.
2.2 Assumption of Liabilities. Upon the terms and subject to the
conditions and exclusions set forth in this Agreement, Buyer shall assume and
discharge or perform when due, and shall assume pursuant to the Assignment and
Assumption Agreement and the Employee Benefits Assignment and Assumption
Agreement, all Liabilities (other than the Retained Liabilities) related
exclusively to, arising exclusively out of, or incurred exclusively in
connection with the Business or the operation thereof, currently or as hereafter
conducted, and whether accrued before, on or after the Closing Date (unless
otherwise specified) (collectively, the "ASSUMED LIABILITIES"), including the
following:
(a) all Liabilities relating to accounts payable of the Business and
the Division, other than Retained Liabilities;
(b) all Liabilities relating to, arising out of or incurred in
connection with any Acquired Contract;
(c) all Liabilities arising out of or in connection with any
warranties relating to the sale or disposition of any product or service by the
Business or the Division;
(d) all Liabilities arising out of or in connection with any
product-liability claims or Losses that involve the use of any product
manufactured, designed, sold or otherwise disposed of exclusively by the
Business or the Division, whether before, on or after the Closing Date;
(e) all Liabilities for sales, transfer, documentary, use, filing
and similar Taxes and fees arising solely in connection with the transactions
contemplated by this Agreement, whether levied on Buyer or Seller;
(f) all Liabilities for Taxes attributable to the Purchased Assets,
the Business or the Division that relate to taxable periods, or portions
thereof, ending on or prior to the Closing Date, but only to the extent that (i)
the preparation of Returns relating to, or the payment of, such Taxes is or has
been the direct responsibility of the Division (including the management,
employees or agents thereof) prior to or on the Closing Date or (ii) such Taxes
arise out of or in connection with untrue or inaccurate information provided to
Seller by the Division (including the management, employees or agents thereof)
prior to the Closing Date (all Liabilities referred to in this Section 2.2(f),
together with all Liabilities referred to in Section 2.2(e), the "ASSUMED
TAXES");
(g) all Liabilities assumed by Buyer pursuant to Article V;
(h) all Environmental Liabilities; and
(i) all Liabilities relating to, arising out of or incurred in
connection with those certain Severance Agreements dated as of December 27,
2001, by and between Seller and each of William Reisdorf, Robert Hogan, Chad
Archer, Rodney Cole and David Nasky.
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2.3 Retained Liabilities. Notwithstanding the foregoing, Buyer shall
not assume and shall not discharge, perform or otherwise be liable for, and
Seller shall retain, perform and discharge, any of the Retained Liabilities no
matter how or when they may have arisen or arise. Without limiting the
foregoing, the Retained Liabilities shall remain the sole and exclusive
responsibility of Seller.
2.4 Payment of Purchase Price. Upon the terms and subject to the
conditions of this Agreement, Buyer shall deliver to Seller at the Closing, in
payment for the Purchased Assets, Twenty Eight Million Three Hundred Thirty Two
Thousand Five Hundred Fifty Dollars ($28,332,550) (the "PURCHASE PRICE") and
shall assume the Assumed Liabilities.
2.5 Closing. Subject to the terms and conditions of this Agreement,
the closing of the sale referred to in Section 2.1 (the "CLOSING") shall take
place at the offices of Haynes and Boone, LLP, located at 901 Main Street, Suite
3100, Dallas, Texas 75202, at 10:00 a.m., local time, on June 24, 2002, or such
later date as may be mutually agreed upon by Buyer and Seller (the "CLOSING
DATE").
2.6 Seller's Deliveries at Closing. At the Closing, Seller shall
execute and deliver or cause to be delivered to Buyer the following items:
(a) Bill of Sale. Seller shall deliver to Buyer a bill of sale in
substantially the form of Exhibit C.
(b) Lease Assignments. For the Leased Real Property, Seller shall
deliver to Buyer a recordable lease assignment in form and substance reasonably
satisfactory to Buyer that transfers, assigns and conveys to Buyer all of
Seller's right, title and interest in the Leased Real Property.
(c) Articles, Resolutions, and Incumbency. Seller shall deliver to
Buyer (i) copies of its organizational documents, certified by its secretary;
(ii) copies of the resolutions of the Board of Directors and stockholders (if
required) authorizing and approving this Agreement and the consummation of the
transactions contemplated by this Agreement certified by its secretary; and
(iii) an incumbency certificate relating to each Person executing on behalf of
Seller any document executed and delivered to Buyer by Seller pursuant to the
terms hereof.
(d) Copies of Books and Records. Seller shall deliver to Buyer
photocopies of such Books and Records referred to in Section 2.1(f) which Seller
is required by law to retain.
(e) FIRPTA Compliance. Seller shall deliver to Buyer a nonforeign
person affidavit, as required by Section 1445(a) of the Code.
(f) Trademark Assignment. Seller shall execute and deliver a
trademark assignment in substantially the form of Exhibit D evidencing the
assignment of any trademarks, trademark registrations and applications for
registration and the domain names, together with the goodwill associated with
and symbolized thereby, used exclusively or held for use exclusively in the
Business to Buyer.
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(g) Patent Assignment. Seller shall execute and deliver a patent
assignment in substantially the form of Exhibit E evidencing the assignment of
any patents, patent applications and inventions used exclusively or held for use
exclusively in the Business to Buyer.
(h) Release. Seller shall deliver to Buyer a release in
substantially the form of Exhibit F relating to the release by Seller of the
members of management of the Division set forth on Schedule 5.6 hereto with
respect to compliance with the Amended and Restated Corporate Directive of
Seller issued on May 14, 2002.
(i) Other Instruments. Seller shall execute and deliver to Buyer
such other instruments as Buyer or its counsel may reasonably request to effect
or evidence the consummation of the transactions contemplated by this Agreement.
2.7 Buyer's Deliveries at Closing. At the Closing, Buyer shall
execute and deliver or cause to be delivered to Seller the following items:
(a) Purchase Price. Buyer shall make payment of the Purchase Price
to Seller by wire transfer of immediately available funds, to an account
designated by Seller. Seller shall provide written notice to Buyer of such
account information at least two (2) Business Days prior to the Closing Date.
(b) Articles, Resolutions, and Incumbency. Buyer shall deliver to
Seller (i) copies of its organizational documents, certified by its secretary;
(ii) copies of the resolutions of its Board of Directors and stockholders
authorizing and approving this Agreement and the consummation of the
transactions contemplated by this Agreement certified by its secretary; and
(iii) an incumbency certificate relating to each Person executing on behalf of
Seller any document executed and delivered to Buyer by Seller pursuant to the
terms hereof.
(c) Other Instruments. Buyer shall execute and deliver to Seller
such other instruments as Seller or its counsel may reasonably request to effect
or evidence the consummation of the transactions contemplated by this Agreement.
2.8 Buyer's and Seller's Joint Deliveries at Closing. At the
Closing, both Buyer and Seller shall execute and deliver the following items:
(a) Assignment and Assumption Agreement. Buyer and Seller shall
execute and deliver the Assignment and Assumption Agreement, pursuant to which
Seller assigns to Buyer the Assumed Liabilities and Seller's rights and
interests in the Acquired Contracts and Buyer assumes the Assumed Contracts and
agrees to assume and discharge or perform when due the Assumed Liabilities.
(b) Employee Benefits Assignment and Assumption Agreement. Buyer and
Seller shall execute and deliver the Employee Benefits Assignment and Assumption
Agreement evidencing the assignment of the Assumed Employee Benefit Plans to be
transferred to Buyer pursuant to Sections 5.3(a) and 5.3(b).
(c) Lockbox Agreement. Buyer and Seller shall execute and deliver a
lockbox agreement in substantially the form of Exhibit G.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
3. Representations and Warranties. Seller hereby represents and
warrants to Buyer as follows:
3.1 Organization; Good Standing. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and it has all requisite corporate power to carry on the Business as
currently conducted and to execute and deliver this Agreement, and any other
instruments or agreements to be executed by Seller pursuant to this Agreement,
perform its obligations hereunder and thereunder and enter into the transactions
contemplated hereby and thereby. Seller is licensed or qualified to do business
and is in good standing as a foreign corporation in each jurisdiction set forth
on Schedule 3.1.
3.2 Authorization. The execution, delivery and performance by Seller
of this Agreement and any other instruments or agreements to be executed by
Seller pursuant to this Agreement, and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized by the Board of
Directors of Seller and no other corporate action on the part of Seller or its
stockholders is necessary to authorize the execution, delivery and performance
by Seller of this Agreement or any other instruments or agreements to be
executed by Seller pursuant to this Agreement and the consummation of the
transactions contemplated hereby and thereby. This Agreement and any other
instruments or agreements to be executed by Seller pursuant to this Agreement,
when delivered in accordance with the terms hereof and thereof, assuming the due
execution and delivery of this Agreement or each such other instrument or
agreement by the other parties hereto and thereto, have been duly executed and
delivered by Seller and constitute the legal, valid and binding obligations of
Seller, enforceable against Seller in accordance with their respective terms,
except to the extent that such enforceability may be subject to applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and to general equitable principles.
3.3 No Violation or Conflict. The execution, delivery and
performance by Seller of this Agreement and any other instruments or agreements
to be executed by Seller pursuant to this Agreement, and the consummation by
Seller of the transactions contemplated hereby and thereby, will not, with or
without the giving of notice or the lapse of time or both (i) violate, conflict
with, or result in a breach or default under any provision of the certificate of
incorporation or by-laws of Seller, (ii) violate any statute, ordinance, rule,
regulation, order, judgment or decree of any Governmental Entity applicable to
Seller or the Business, or (iii) subject to obtaining the consents set forth on
Schedule 3.3, constitute a violation or breach by Seller of, conflict with,
constitute a default by Seller (or give rise to any right of termination,
cancellation, payment or acceleration) under, or result in the creation of any
Encumbrance, except for Permitted Encumbrances, upon any of the Purchased Assets
under, any of the terms, conditions or provisions of any Contract, Permit or
other instrument or obligation to which Seller is a party or by which Seller is
bound (other than any Contract, Permit, instrument or obligation that is a
Purchased Asset (x) that is not set forth on Schedule 3.3 or (y) that Buyer has
knowledge of on the Closing Date), except, in the case of clause (ii) or (iii),
for such violations, conflicts,
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breaches, defaults, terminations, cancellations, payments, accelerations or
Encumbrances as would not reasonably be expected to have a Material Adverse
Effect on the Business. In connection with the foregoing (but without affecting
the interpretation of any other provision of this Agreement), there shall be a
rebuttable presumption that Buyer has knowledge of any Contract, Permit,
instrument or obligation executed by or in the name of the Division (including
Offshore/Marine Cable Specialists).
3.4 Title to Assets. Subject to any Encumbrances and such other
imperfections to and diminutions of title that have resulted from actions taken
by the Division (including the management, employees or agents thereof) outside
the ordinary course of business and without the express written authorization or
knowledge of Seller, Seller has good and marketable title, free and clear of all
Encumbrances (except for Permitted Encumbrances), to each of the following
Purchased Assets:
(a) the Acquired Current Items set forth on Schedule 2.1(i);
(b) the Acquired Inventory (i) located at the Division's facilities
in El Dorado, Arkansas and Houston, Texas, (ii) held on consignment at any
location set forth on Schedule 2.1(q), (iii) held at any vendor location set
forth on Schedule 2.1(q) for further processing, and (iv) in transit to or from
any of the above locations where legal title and risk of ownership is retained
or has been assumed by the Division;
(c) the Intellectual Property set forth on Schedule 3.4(c); and
(d) the Acquired Tangible Personal Property located at the
Division's facilities in El Dorado, Arkansas and Houston, Texas, or the laptops
and printers in the possession of the Division's field sales personnel.
Subject to any Encumbrances and such other imperfections to and
diminutions of title that have resulted from actions taken by the Division
(including the management, employees or agents thereof) outside the ordinary
course of business and without the express written authorization or knowledge of
Seller, to the knowledge of Seller, (a) Seller has good and marketable title to
the Acquired Accounts Receivable, and (b) no Acquired Contract has been
assigned, transferred or otherwise conveyed by Seller to any other party prior
to the consummation of this Agreement.
3.5 No Encumbrances. Subject to any Encumbrances that have resulted
from actions taken by the Division (including the management, employees or
agents thereof) outside the ordinary course of business and without the express
written authorization or knowledge of Seller, Seller's right, title (to the
extent Seller has such title) and interest in each of the following Purchased
Assets is free and clear of all Encumbrances, except for Permitted Encumbrances:
(a) the Acquired Leased Real Property;
(b) the Acquired Accounts Receivable, as invoiced by or in the name
of the Division (including Offshore/Marine Cable Specialists);
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(c) (i) the Acquired Contracts set forth on Schedule 2.1(d) and (ii)
the Acquired Contracts executed by Seller in the name of the Division (including
Offshore/Marine Cable Specialists) without Buyer's knowledge;
(d) the Intellectual Property set forth on Schedule 3.5(d); and
(e) the software set forth on Schedule 2.1(e)(iii).
In connection with Section 3.5(c) (but without affecting the
interpretation of any other provision of this Agreement), there shall be a
rebuttable presumption that Buyer has knowledge of any Acquired Contract
executed by or in the name of the Division (including Offshore/Marine Cable
Specialists).
3.6 Consents of Governmental Entities. No consent, approval or
authorization of, or exemption by, or filing with, any Governmental Entity is
required to be obtained or made by Seller in connection with the execution and
delivery of this Agreement or the transfer, sale or assignment of the Purchased
Assets as contemplated hereby, except, in each case, where the failure to obtain
such consents, approvals, authorizations, exemptions or filings would not
reasonably be expected to have a Material Adverse Effect on the Business.
3.7 Taxes. Except with respect to (i) Returns relating to, or (ii)
the payment of, the Assumed Taxes:
(a) Seller has filed all material Returns that it was required to
file pursuant to applicable law with respect to the Division or the Purchased
Assets;
(b) all such Returns were correct and complete in all material
respects;
(c) all material Taxes due and owing by Seller with respect to the
Division or the Purchased Assets (whether or not shown on any Return) have been
paid;
(d) Seller has an adequate reserve for all material Taxes payable by
Seller with respect to the Division or the Purchased Assets for all taxable
periods and portions thereof through the Closing Date;
(e) Seller has not waived any statute of limitations in respect of
material Taxes with respect to the Division or the Purchased Assets or agreed to
any extension of time with respect to a material Tax assessment or deficiency or
the collection of a material amount of Taxes, in each case with respect to the
Division or the Purchased Assets;
(f) no deficiencies, adjustments or claims for any material amount
of Taxes have been proposed, asserted or assessed against Seller with respect to
the Division or the Purchased Assets;
(g) there are no Encumbrances for a material amount of Taxes other
than for current Taxes not yet due upon any assets of Seller with respect to the
Division or the Purchased Assets.
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(h) none of the Returns of Seller with respect to the Division or
the Purchased Assets are now under audit or examination by any tax authority or
other Governmental Entity, and there are no suits, actions, proceedings or
investigations pending or, to the knowledge of Seller, threatened against Seller
with respect to any Taxes with respect to the Division or the Purchased Assets;
and
(i) all material Taxes that are required by law to be withheld or
collected by Seller with respect to the Division or the Purchased Assets have
been duly withheld and collected and, to the extent required by applicable law,
have been paid to the proper tax authority or other Governmental Entity or
properly segregated or deposited.
3.8 Employee Benefit Plans.
(a) Schedule 3.8 sets forth a true and complete list of all
"employee benefit plans" as defined by Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), all specified material fringe
benefit plans as defined in Section 6039D of the Code, and all other material
bonus, incentive compensation, deferred compensation, profit sharing, stock
option, stock appreciation right, stock bonus, stock purchase, employee stock
ownership, savings, severance, supplemental unemployment, layoff, salary
continuation, retirement, pension, health, life insurance, dental, disability,
accident, group insurance, vacation, holiday, sick leave, fringe benefit or
welfare plan, and any other material employee compensation or benefit plan,
agreement, policy, or contract (whether qualified or nonqualified), and any
trust, escrow or other funding arrangement related thereto, which currently is
sponsored, established, maintained or contributed to or required to be
contributed to by Seller or for which Seller has any liability, contingent or
otherwise, under which employees of the Division participate or are entitled to
receive benefits (collectively, the "EMPLOYEE BENEFIT PLANS").
(b) Except as set forth on Schedule 3.8, Seller does not maintain
and is not obligated to provide benefits under any life, medical, or health plan
(other than as an incidental benefit under any Employee Benefit Plan intended to
be "qualified" within the meaning of Section 401(a) of the Code ("QUALIFIED
PLAN")) which provides benefits to retirees of the Division or other terminated
employees of the Division other than benefit continuation rights under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
(c) Except as set forth in Schedule 3.8, neither Seller nor any
Person that currently would be treated as a "single employer" with Seller under
Section 414(b), (c), (m), or (o) of the Code ("ERISA AFFILIATE") currently
maintains or contributes to or at any time within the six (6) year period
preceding the date of this Agreement was required to maintain or contribute to
or had any liability with respect to any "multiemployer plan," as that term is
defined in Section 4001 of ERISA or an "employee benefit plan" (as defined in
Section 3(3) of ERISA) that is subject to Title IV of ERISA or Section 412 of
the Code. Neither Seller nor any other ERISA Affiliate has at any time within
the six (6) year period preceding the date of this Agreement, incurred any
unsatisfied liability under Sections 4062, 4063, or 4064 of ERISA or Section 412
of the Code with respect to any Employee Benefit Plan that is subject to Title
IV of ERISA or Section 412 of the Code or incurred any unsatisfied withdrawal
liability under Part 1 of Subtitle E of Title IV of ERISA to any multiemployer
plan, as defined in Section 3(37) of
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ERISA with respect to which Buyer would have any Loss or that could result in an
Encumbrance on the Purchased Assets.
(d) With respect to any Employee Benefit Plans that are not
administered or maintained by the Division, to the knowledge of Seller or the
actual knowledge of John Haumesser, there are no pending or threatened material
claims by or on behalf of any such Employee Benefit Plan, or by any Person
covered thereby, other than ordinary claims for benefits submitted by
participants or beneficiaries, or any pending or, to the knowledge of Seller or
the actual knowledge of John Haumesser, threatened material claims regarding
breaches of fiduciary duty under ERISA and, to the knowledge of Seller or or the
actual knowledge of John Haumesser, there is no basis for any such claim.
(e) To the extent any Employee Benefit Plans are not administered or
maintained by the Division, Seller has delivered or made available to Buyer:
(i) copies of the current Employee Benefit Plan documents and
any amendments thereto for each Employee Benefit Plan and copies of any
related trusts, and (A) the most recent summary plan descriptions of such
Employee Benefit Plans for which Seller is required to prepare, file, and
distribute summary plan descriptions, and (B) the most recent copy of any
material written summaries and descriptions furnished to participants and
beneficiaries regarding Employee Benefit Plans for which a plan
description or summary plan description is not required;
(ii) the Form 5500 filed in each of the most recent three (3)
plan years with respect to each Employee Benefit Plan, including all
schedules thereto and any opinions of independent accountants relating
thereto;
(iii) all insurance policies or agreements regarding other
funding arrangements that are currently in force which were purchased by
or that provide benefits under any Employee Benefit Plan or otherwise
reimburse for benefits paid under Employee Benefit Plans;
(iv) all material written agreements that are currently in
force with third party administrators, investments managers, consultants
and service providers relating to any Employee Benefit Plan and any and
all material written reports, including discrimination testing, submitted
to Seller by such third party administrators, investment managers,
consultants and service providers within the two (2) years preceding the
date hereof; and
(v) with respect to Employee Benefit Plans that are Qualified
Plans, the most recent determination letter for each such Employee Benefit
Plan.
(f) Except as set forth on Schedule 3.8(f), Seller has not filed or
been required to file any notices, forms or reports with the IRS, the PBGC or
the Department of Labor ("DOL"), with respect to any Employee Benefit Plan not
administered or maintained by the Division, pursuant to statute, other than
annual reports, any PBGC Form 1, or any other filings
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made in the ordinary course of plan administration, within the two (2) years
preceding the date hereof.
(g) Seller has not received any notice from the IRS, the PBGC, or
the DOL relating to any Employee Benefit Plan not administered or maintained by
the Division regarding an audit of any Employee Benefit Plan or the assessment
of a material penalty within the two (2) years preceding the date hereof.
3.9 Brokers' or Finders' Fees. No agent, broker, Person or firm
acting on behalf of Seller is, or will be, entitled to any commission or
brokers' or finders' fees from Buyer or any of its Affiliates in connection with
any of the transactions contemplated by this Agreement.
3.10 No Implied Representation. NOTWITHSTANDING ANYTHING CONTAINED
IN THIS ARTICLE III OR ANY OTHER PROVISION OF THIS AGREEMENT, (I) BUYER
ACKNOWLEDGES AND AGREES THAT NONE OF SELLER OR ANY OF ITS AFFILIATES, AGENTS OR
REPRESENTATIVES IS MAKING, WHETHER CONTAINED, OR REFERRED TO, IN ANY DUE
DILIGENCE MATERIALS THAT HAVE BEEN PROVIDED TO BUYER OR ANY OF ITS AFFILIATES,
AGENTS OR REPRESENTATIVES ANY REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR
IMPLIED (INCLUDING, ANY IMPLIED WARRANTY OR REPRESENTATION AS TO THE VALUE,
CONDITION, MERCHANTABILITY OR SUITABILITY AS TO ANY OF THE PURCHASED ASSETS)
BEYOND THOSE EXPRESSLY GIVEN BY SELLER IN THIS ARTICLE III AND (II) IT IS
UNDERSTOOD THAT EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS
ARTICLE III, BUYER TAKES THE BUSINESS AND THE PURCHASED ASSETS "AS IS AND WHERE
IS".
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
4. Representations and Warranties of Buyer. Buyer represents and
warrants to Seller as follows:
4.1 Organization; Good Standing. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and it has all requisite corporate power to execute and deliver this
Agreement, and any other instruments or agreements to be executed by Buyer
pursuant to this Agreement, perform its obligations hereunder and thereunder and
enter into the transactions contemplated hereby and thereby including the
purchase of the Purchased Assets and the assumption of the Assumed Liabilities.
4.2 Authorization. The execution, delivery and performance by Buyer
of this Agreement and any other instruments or agreements to be executed by
Buyer pursuant to this Agreement, and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized by the Board of
Directors of Buyer and no other corporate action on the part of Buyer or its
stockholders is necessary to authorize the execution, delivery and
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performance by Buyer of this Agreement or any other instruments or agreements to
be executed by Buyer pursuant to this Agreement and the consummation of the
transactions contemplated hereby and thereby. This Agreement and any other
instruments or agreements to be executed by Buyer pursuant to this Agreement,
when delivered in accordance with the terms hereof and thereof, assuming the due
execution and delivery of this Agreement and each such other instrument or
agreement by the other parties hereto and thereto, have been duly executed and
delivered by Buyer and constitute the legal, valid and binding obligations of
Buyer, enforceable against Buyer in accordance with their respective terms,
except to the extent that such enforceability may be subject to applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and to general equitable principles.
4.3 No Violations or Conflict; Consents. The execution, delivery and
performance by Buyer of this Agreement, and any other instruments or agreements
to be executed by Buyer pursuant to this Agreement and the consummation by Buyer
of the transactions contemplated hereby and thereby, will not, with or without
the giving of notice or the lapse of time or both (i) violate, conflict with, or
result in a breach or default under any provision of the certificate of
incorporation or by-laws of Buyer, (ii) violate any statute, ordinance, rule,
regulation, order, judgment or decree of any Governmental Entity applicable to
Buyer or by which any of its properties or assets may be bound, (iii) require
any filing by Buyer, or require Buyer to obtain any Permit, consent or approval
of, or require Buyer to give any notice to, any Governmental Entity applicable
to Buyer, or (iv) constitute a violation or breach by Buyer of, conflict with,
constitute a default by Buyer (or give rise to any right of termination,
cancellation, payment or acceleration) under, or result in the creation of any
Encumbrance upon any of the properties or assets of Buyer under, any of the
terms, conditions or provisions of any Contract, Permit or other instrument or
obligation to which Buyer is a party or by which Buyer is bound, except (x) in
the case of the creation of any Encumbrances, with respect to its financing
arrangements with Fleet Capital Corporation and, (y) in the case of clause (ii),
(iii) or (iv), for such violations, conflicts, breaches, defaults, terminations,
cancellations, payments, accelerations or Encumbrances as would not reasonably
be expected to have a Material Adverse Effect on Buyer.
4.4 Brokers' or Finders' Fees. Except with respect to the fees
payable to Morgan Keegan, Inc. (whose fees and expenses shall be paid by Buyer),
no agent, broker, Person or firm acting on behalf of Buyer is, or will be,
entitled to any commission or brokers' or finders' fees from Seller or any of
its Affiliates in connection with any of the transactions contemplated by this
Agreement.
ARTICLE V
EMPLOYEE BENEFITS
5.1 Transfer of Employees.
(a) Within a reasonable period of time prior to the Closing Date,
Buyer shall offer employment on an "at will" basis, commencing as of the Closing
Date, to all of the employees of the Division as of the date hereof (and still
employed by Seller on the date of such
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offer of employment) and any former employees of the Division on long term
disability as of the Closing Date. Buyer's offer of employment shall be for a
job or position substantially identical to the employee's job or position as of
the date hereof and shall provide for a base salary or wages and bonus,
incentive compensation or commission which, at a minimum, is at least as
favorable in the aggregate to the employee's base salary or wages and bonus,
incentive compensation or commission with Seller in effect on the date hereof
and employee benefits and other terms and conditions of employment at least as
favorable in the aggregate as those provided to the employee by Seller as of the
date hereof. Each such employee or former employee who accepts such offer of
employment is referred to hereinafter as a "TRANSFERRED EMPLOYEE." No provision
in this Article V constitutes any commitment, contract, or understanding
(expressed or implied) of any obligation on the part of Buyer to a post-Closing
employment relationship of any fixed term or duration or upon any terms or
conditions other than those that Buyer may establish pursuant to individual
offers of employment in accordance with this Agreement. Nothing in this
Agreement shall be deemed to prevent or restrict in any way the right of Buyer
to terminate, reassign, promote, or demote any of the Transferred Employees
after the Closing Date or to change adversely or favorably the title, powers,
duties, responsibilities, functions, locations, salaries, other compensation or
terms or conditions of employment of such employees.
(b) Buyer shall have the right prior to the Closing Date to meet
with employees of Seller to arrange the transition of ownership of the Division;
provided, however, that such meetings shall be held at times and dates
reasonably satisfactory to Seller, and shall be held at such times and in such a
manner (including, at the request of Seller, the presence of a representative of
Seller) as not to adversely interfere with Seller's normal business operations.
(c) Seller shall make available to Buyer all personnel records,
including names, Social Security numbers, performance ratings and evaluations
(if available), dates of hire by Seller, dates of birth, numbers of hours worked
each fiscal year and compensation histories (if available) for all Transferred
Employees; provided, however, that Seller shall not make available to Buyer
prior to Closing medical and other records relating to Transferred Employees
that Seller is obligated by law, regulation, rule or agreement to keep
confidential. Seller may retain copies of any records relating to the
Transferred Employees so long as Seller provides Buyer the original, if
available, or at least one copy of such records, at Buyer's cost, in accordance
with the immediately preceding sentence.
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5.2 Provision of Health Benefits
(a) On the Closing Date, Buyer shall (i) assume sponsorship of the
Seller's medical plan that provides coverage to the Transferred Employees
("SELLER'S MEDICAL PLAN") and the liabilities thereunder, with respect to all
persons entitled to benefits under the provisions of the Seller's Medical Plan
and (ii) be substituted for Seller as the plan sponsor under the Seller's
Medical Plan. On or as soon as practicable following the Closing Date, but in
any event not later than thirty (30) days following the Closing Date, Seller
shall cause all right, title, interest, authorities, obligations, duties,
liabilities, and assets of Seller in, to and under the Seller's Medical Plan and
the bank account related thereto (the "AMERCABLE EMPLOYEE HEALTH BENEFIT
ACCOUNT") to be transferred to Buyer. On or as soon as practicable following the
Closing Date, but in any event not later than thirty (30) days following the
Closing Date, the parties shall execute and deliver such documents and
instruments as may be required to effect the assumption and transfer of the
Seller's Medical Plan and the AmerCable Employee Health Benefit Account, by and
to Buyer and to ensure that all assets, contracts, and agreements associated
with the Seller's Medical Plan and the AmerCable Employee Health Benefit
Account, as the same exist immediately prior to the Closing Date, shall be
transferred with the Seller's Medical Plan to the extent provided herein.
Immediately following the assumption and transfer of the Seller's Medical Plan
to Buyer, Seller shall deliver all medical and other records of the Transferred
Employees created, maintained, or associated with the Seller's Medical Plan to
Buyer.
(b) After the Closing Date, Buyer shall be solely responsible for
compliance with the requirements of Section 4980B of the Code and part 6 of
subtitle B of Title I of ERISA ("COBRA"), including the provision of
continuation coverage, with respect to all employees of the Division (whether or
not any such employee accepts Buyer's offer of employment and/or becomes a
Transferred Employee), and their spouses and dependents, for whom a qualifying
event occurs prior to, on or after the Closing Date. For purposes of this
Section 5.2(b), the terms "continuation coverage" and "qualifying event" shall
have the meanings ascribed to them in COBRA.
5.3 Assumption of Liabilities.
(a) From and after the Closing Date, Buyer shall assume and shall
honor, pay, perform, and satisfy when due any and all liabilities, obligations
and responsibilities (whether known or unknown on the Closing Date) solely with
respect to the Transferred Employees or any former employees of the Division,
and any of their beneficiaries, arising under the terms of, or in connection
with, or with respect to any Employee Benefit Plan or any other employee benefit
or fringe benefit, retention, bonus, short-term or long-term disability,
vacation, sick or other paid time off plan, policy, arrangement or agreement
that benefits or benefited any Transferred Employee or former employee of the
Division with respect to claims or events arising at any time; provided,
however, that such liabilities, obligations and responsibilities shall not
include any Retained Liabilities (collectively referred to herein as the
"ASSUMED EMPLOYEE BENEFIT PLANS"). Except as otherwise provided for by this
Agreement, Buyer shall assume and be solely responsible for any obligations and
Liabilities relating to claims made by any of the Transferred Employees and each
former employee of the Division, for their compensation, severance, or
termination pay, benefits or notice under any Federal, state or local law or
under any plan,
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policy, practice or agreement which arises as a result of their employment or
separation from employment with Seller or Buyer or their respective Affiliates
at any time. Notwithstanding any other provisions of this Agreement to the
contrary, on and after the Closing Date, Buyer shall reimburse Seller for fifty
percent (50%) of all Liabilities relating to any post-retirement plans,
arrangements or agreements (other than any Liabilities associated with the
Alside Retirement Plan) with respect to Earl R. Karges, Edwin J. Kazanovicz,
Donald A. Vickers or George L. Marchand, or any of the beneficiaries of such
individuals.
(b) On the Closing Date, Buyer shall assume sponsorship of and be
substituted for Seller as the plan sponsor of (i) the AmerCable Retirement Plan
(the "RETIREMENT PLAN") and the related trust, and the liabilities thereunder,
with respect to all persons entitled to benefits under the provisions of the
Retirement Plan (including, for the avoidance of doubt Stephanie Johnson, Robert
Winspear, and Lisa Curry) and (ii) all other Assumed Employee Benefit Plans,
excluding any Assumed Employee Benefit Plans in which both employees of the
Division and employees of any division of Seller other than the Division
participate. On or as soon as practicable following the Closing Date, but in any
event not later than thirty (30) days following the Closing Date, Seller shall
cause all right, title, interest, authorities, obligations, duties, liabilities
and assets of Seller in, to and under the Retirement Plan and the related trust
and the other Assumed Employee Benefit Plans to be transferred to Buyer and any
successor trustee, where applicable, and Buyer shall assume all authorities,
obligations, duties and liabilities under the Retirement Plan, in accordance
with applicable law. On or as soon as practicable following the Closing Date,
but in any event not later than thirty (30) days following the Closing Date, the
parties shall execute and deliver such documents and instruments as may be
required to effect the assumption and transfer of the Retirement Plan and of all
other Assumed Employee Benefit Plans to be transferred to Buyer by and to Buyer
and to ensure that all assets, contracts and agreements of or associated with
the Retirement Plan and any other Assumed Employee Benefit Plans to be
transferred to Buyer, as the same exist immediately prior to the Closing Date,
shall be transferred with the Retirement Plan and such Assumed Employee Benefit
Plans to the extent provided herein.
(c) Nothing in this Agreement shall be deemed to prevent or restrict
Buyer from amending, merging or terminating the Retirement Plan or any Assumed
Employee Benefit Plan in accordance with the respective terms and conditions
thereof or from transferring the Transferred Employees or former employees of
the Division to another employee plan or program that is maintained by Buyer or
one of its subsidiaries. The parties agree and understand that Buyer assumes no
responsibility and makes no commitment for the maintenance and continuation
after the Closing Date of any Assumed Employee Benefit Plan or the provisions of
any particular benefits for any Transferred Employee or former employee of the
Division after the Closing Date, subject to the applicable terms and conditions
of each relevant Assumed Employee Benefit Plan.
(d) In the event of any "plant closing" or "mass layoff" by Buyer,
as defined by the Federal Worker Adjustment Retraining Notification Act, 29
U.S.C. Section 2101 et seq. ("WARN"), or any state law equivalent, which shall
occur after the Closing Date, Buyer shall comply with all of the requirements of
WARN and any applicable state law equivalent.
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(e) On and after the Closing Date, Seller shall reimburse Buyer for
(i) any Liabilities incurred by Buyer relating to any other employee benefit or
fringe benefit, retention, bonus, short-term or long-term disability, vacation,
sick or other paid time off, plan, policy, arrangement or agreement not
maintained, administered, or established by the Division regarding which Buyer
has no knowledge as of the Closing Date and (ii) any Liabilities incurred by
Buyer relating to or arising from any actions taken by Seller prior to Closing
with respect to any Assumed Employee Benefit Plans without Buyer's knowledge.
5.4 Participation and Crediting of Service Under Employee Benefit
Plans and Practices.
(a) Following the Closing Date, (i) Buyer shall ensure that no
limitations or exclusions as to pre-existing conditions, proof of insurability
or waiting periods or other limitations or restrictions on coverage are
applicable to any Transferred Employees under any employee welfare benefit plans
of Buyer or its subsidiaries in which the Transferred Employees may be eligible
to participate, except to the extent that such limitations, restrictions, or
exclusions applied to the Transferred Employees under any employee welfare
benefit plans of Seller prior to the Closing Date;, and (ii) Buyer shall provide
or cause to be provided that any costs or expenses incurred by the Transferred
Employees or any other former employee of the Division provided COBRA
continuation coverage under such benefit plans (and their dependents) up to and
including the Closing Date shall be taken into account for purposes of
satisfying applicable co-payment, deductible, maximum out-of-pocket provisions
and like adjustments or limitations on coverage under such benefit plans of
Buyer or its subsidiaries. Following the Closing, each employee benefit plan or
arrangement and employee compensation policy or practice (including vacation,
floating holiday, sickness, paid time off, retirement, severance and welfare
benefit plans, of Buyer or its Affiliates) shall credit, for all purposes, all
service of the Transferred Employees, and other employees of the Division, with
Seller and its predecessors.
(b) No provision in this Article V shall create any third-party
beneficiary rights in any employee or former employee (including any beneficiary
or dependent thereof) of Buyer, Seller, or any ERISA Affiliate.
5.5 Employment Taxes. Seller hereby acknowledges that Buyer
qualifies as a successor employer for FICA and FUTA tax purposes with respect to
the Transferred Employees. In connection with the foregoing, the parties agree
to follow the "Alternative Procedures" set forth in Section 5 of Revenue
Procedure 96-60, 1996-2 C.B. 399. In connection with the application of the
"Alternative Procedures," (i) Seller and Buyer each shall report on a
predecessor-successor basis as set forth in such Revenue Procedure;, (ii)
subject to Seller providing Buyer with all necessary payroll records for the
calendar year that includes the Closing Date, Seller shall be relieved from
furnishing Forms W-2 to the Transferred Employees for the full calendar year in
which the Closing Date occurs, and (iii) subject to Seller providing Buyer with
all necessary payroll records for the calendar year that includes the Closing
Date, Buyer shall assume the obligations of Seller to furnish such Forms W-2 to
such employees for the full calendar year in which the Closing Date occurs.
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5.6 Grant of Stock Options. As of the Closing Date, Buyer shall
grant replacement stock options to each member of management of the Division set
forth on Schedule 5.6, which options shall be immediately fully exercisable and
have equivalent economic value as the options of such member of management to
purchase preferred stock of Associated Materials Holdings Inc. immediately prior
to the Closing Date.
ARTICLE VI
PRE-CLOSING AND POST-CLOSING MATTERS
6. Agreements of the Parties. Buyer and Seller agree as follows:
6.1 Conduct of the Business. During the period from the date of this
Agreement up to and including the earlier of (a) the date upon which this
Agreement is terminated and (b) the Closing Date, unless Buyer otherwise
consents (i) Seller shall operate and conduct the Business with respect to the
Purchased Assets and the Division as currently operated and only in the ordinary
course, (ii) Seller shall, in a manner consistent with such operation, use
commercially reasonable efforts to preserve intact the Business and its
relationships with employees and persons having dealings with it, (iii) Seller
shall inform Buyer of any operational matters relating to the Business that are
of a material nature, (iv) Seller shall otherwise promptly respond to the
requests of Buyer regarding information concerning the status of the Business
and the operations and finances of the Division, and (v) Seller shall not enter
into any transactions with its Affiliates relating to or affecting the Business
or the Division other than in the ordinary course of business consistent with
past practice.
6.2 Review of the Business. (a) Buyer may, prior to the Closing
Date, directly or through its representatives, review the properties, the Books
and Records and the financial and legal condition of the Business to the extent
it deems necessary or advisable to familiarize itself with such properties and
other matters. Subject to applicable law, Seller agrees to permit Buyer and its
representatives to have, after the date of execution of this Agreement,
reasonable access during normal business hours and upon reasonable notice to the
premises of the Business located at the Leased Real Property and to all the
assets, personnel, properties, Contracts and Books and Records and to use
commercially reasonable efforts to cause the officers of the Division to furnish
Buyer and its representatives with such financial and operating data and other
information with respect to the Business as Buyer and its representatives shall
from time to time reasonably request.
(b) Any information obtained by Buyer pursuant to this Section 6.2
shall be subject to paragraph 2 of Part Two of that certain letter agreement,
dated May 8, 2002, from Wingate Partners III, L.P. to Seller, as amended by
Amendment No. 1 thereto, dated as of June 7, 2002 (the "LETTER OF INTENT").
Effective upon, and only upon, the Closing, Buyer's obligation under this
Section 6.2(b) shall terminate with respect to information relating to the
Business or the Division; provided that Buyer acknowledges and agrees that any
and all other confidential information provided to it by Seller or its
representatives concerning Seller but that does not
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relate exclusively to the Business or the Division shall remain subject to the
terms and conditions of the Letter of Intent after the Closing Date.
(c) After the Closing, Buyer shall permit Seller, its attorneys and
accountants to have reasonable access during normal business hours and upon
reasonable notice to the Books and Records of the Division to the extent such
access is reasonably required in connection with (i) the preparation of Seller's
Tax returns or any Tax audits or (ii) any proceedings, investigations or actions
brought against Seller in connection with the Division, the Business or the
Purchased Assets. Unless otherwise consented to in writing by Seller, Buyer
shall not, for a period of seven (7) years following the date hereof, destroy,
alter or otherwise dispose of the Books and Records of the Division without
first offering to surrender to Seller such Books and Records or any portion
thereof that Buyer intends to destroy, alter or dispose of.
6.3 Commercially Reasonable Efforts. Buyer and Seller agree to
cooperate and use commercially reasonable efforts to take all appropriate action
and in making all filings necessary, proper or advisable under applicable laws
and regulations to consummate and make effective the transactions contemplated
by this Agreement, including commercially reasonable efforts to obtain, prior to
the Closing Date, all licenses, Permits, consents, approvals, authorizations,
qualifications and orders of Governmental Authorities and parties to Contracts
with the Division as are necessary for the complete consummation of the
transactions contemplated by this Agreement.
6.4 Exclusive Dealing. (a) Seller agrees, and agrees to use
commercially reasonable efforts to cause its stockholders, officers, directors,
advisors and agents (collectively, "REPRESENTATIVES"), to immediately terminate
all other discussions, direct and indirect, and without regard to the party
initiating such discussions, with third parties or their Representatives
regarding any transaction involving the acquisition of any significant portion
of the Business, the Division or the Purchased Assets (including by means of a
recapitalization) and Seller agrees that it shall not, and shall use
commercially reasonable efforts so that its Representatives shall not, initiate,
solicit or participate in any such discussions.
(b) During the period from the date of this Agreement up to and
including the earlier of (i) the date upon which this Agreement is terminated
and (ii) the Closing Date, Seller shall, and shall use commercially reasonable
efforts so that its Representatives shall, promptly notify Buyer (but in any
event within two (2) Business Days) if it becomes aware of any contact between
Seller or its Representatives and any other person regarding any such
discussions, offers, proposals or any related inquiries.
6.5 Further Assurances. (a) On or after the Closing Date and without
further consideration, Seller shall, from time to time at Buyer's request,
execute and deliver such further instruments of conveyance, assignment and
transfer and shall take, or cause to be taken, such other action as Buyer may
reasonably request for the more effective conveyance, assignment and transfer to
Buyer of any of the Purchased Assets. Additionally, if any of the Purchased
Assets are owned indirectly by Seller through a subsidiary of Seller, Seller
shall take, or cause to be taken, all action necessary to convey, transfer,
assign and deliver to Buyer such Purchased Assets, as if such Purchased Assets
had been held directly by Seller immediately prior to Closing.
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(b) Seller shall, as promptly as practical but in no event later
than five (5) Business Days after receipt, deliver to Buyer any cash, checks,
amounts received by wire transfer, mail, packages, notices and other similar
communications it receives pertaining to the Business, the Purchased Assets, the
Acquired Contracts and any other matter belonging to Buyer as a result of the
transactions consummated pursuant to this Agreement or related transactions.
Buyer shall, as promptly as practical but in no event later than five (5)
Business Days after receipt, deliver to Seller any cash, checks, amounts
received by wire transfer, mail, packages, notices and other similar
communications pertaining to the Excluded Assets, the Retained Liabilities and
any other matter belonging to the Seller after the transactions consummated
pursuant to this Agreement or the related transactions. Seller shall endorse in
favor of Buyer any checks or other instruments of payment payable to Seller but
acquired by Buyer hereunder, and Buyer shall endorse in favor of Seller any
checks or other instruments of payment payable to Buyer but retained by Seller
hereunder.
6.6 Unassigned Contracts. Notwithstanding anything to the contrary
contained in this Agreement, this Agreement shall not constitute an agreement to
transfer, sell or otherwise assign any Contract or Permit which would otherwise
be a Purchased Asset but which is not permitted to be assigned in connection
with a transaction of the type contemplated by this Agreement (the "UNASSIGNED
CONTRACTS"). If a consent to the assignment of a Contract is not obtained or if
an attempted assignment of a Contract is ineffective for any other reason,
Seller shall cooperate with Buyer in continuing to attempt to obtain such
consent or otherwise procure an effective assignment of such Unassigned Contract
and, pending the obtaining of such consent or the procurement of such
assignment, shall use commercially reasonable efforts to implement any
reasonable arrangement (including, without limitation, entering into additional
agreements on terms reasonably satisfactory to the parties thereto, including an
agreement to deliver to Buyer no later than five (5) Business Days after receipt
any cash, checks, amounts received by wire transfer, packages, notices and other
similar communications with respect to such Unassigned Contract) to provide to
Buyer all benefits (including any economic benefits) under any such Unassigned
Contracts; provided, however, that Buyer shall (i) reimburse Seller for any
reasonable out-of-pocket expenses incurred in connection with any such
arrangement and (ii) accept the burdens and discharge and perform and indemnify
Seller for all Liabilities and obligations under such Unassigned Contract as a
subcontractor of Seller. If, with respect to any such Unassigned Contract, the
consent to the assignment is obtained or an effective assignment can otherwise
be made following the Closing, Seller shall promptly assign to Buyer all of its
right and interest in and to such Unassigned Contract and shall, at Buyer's
request, execute and deliver any further instruments of conveyance, assignment
and transfer with respect to such Unassigned Contract. Buyer shall thereupon
agree to assume and perform all Liabilities and obligations arising under such
Unassigned Contract after the date of such consent, at which time such
Unassigned Contract shall be deemed an Acquired Contract, without payment or
further consideration, and the obligations so assumed thereunder shall be deemed
Assumed Liabilities. If (i) a consent to the assignment of an Unassigned
Contract is not obtained or if an attempted assignment is ineffective for any
other reason and (ii) (x) Buyer requests that it not receive the benefits
thereof or (y) an arrangement to provide such benefits is not feasible, Seller,
in consultation with Buyer, shall terminate or wind-up such Unassigned Contract
and Buyer shall reimburse Seller for all reasonable costs and expenses incurred
by Seller as a result thereof. Subject to its compliance with this Section 6.6,
Seller shall not have any liability whatsoever to Buyer arising out of or
relating to the failure to obtain any consents or waivers that may be
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required in connection with the transactions contemplated by this Agreement or
because of the termination of any Contract as a result thereof.
6.7 Use of Division Names and Trademarks. Promptly, but not later
than thirty (30) days after the Closing Date, Seller shall cease and refrain
from using the names "AmerCable" and "Offshore/ Marine Cable Specialists" and
all trade names, service marks, brand names and trademarks set forth on
Schedules 2.1(e)(i) and 2.1(e)(ii), and any similar names used by Seller
exclusively in the conduct of the Business, including the use or display thereof
on all buildings, vehicles, business cards, web sites, stationery, displays,
signs, promotional materials, manuals, forms, invoices, and other materials. Not
later than thirty (30) Business Days after Closing, Seller shall file the
necessary documents with the Secretary of State of the State of Texas and the
County Clerk of Dallas County, Texas releasing its use of the assumed name
"Offshore/ Marine Cable Specialists." Seller shall promptly furnish Buyer with
evidence of such filings.
6.8 Seller Name Use. Buyer acknowledges that, from and after the
Closing Date, Seller and its Affiliates have the absolute and exclusive
proprietary right to all names, marks, trade names, service marks and trademarks
incorporating either "Associated Materials Incorporated" or "AMI," by itself or
in combination with any other name (collectively "SELLER NAMES"), and that none
of the rights thereto or goodwill represented thereby or pertaining thereto are
being transferred hereby or in connection herewith. Buyer agrees that from and
after the Closing Date it will not, and will cause its Affiliates not to, use
any name, phrase or logo incorporating any of the Seller Names in or on any of
its literature, buildings, vehicles, business cards, web sites, stationery,
displays, signs, promotional materials, manuals, forms, invoices, sales
materials or products or otherwise in connection with the sale of any products
or services; provided, however, that Buyer may continue to use any business
cards, web sites under the domain names that are Purchased Assets, stationery,
manuals, forms, invoices, printed literature, sales materials, purchase orders
and sales, maintenance or license agreements, and sell any products or services,
that are included in the Purchased Assets on the Closing Date and that bear a
name, phrase or logo incorporating either of the Seller Names on the Closing
Date, until the supplies thereof existing on the Closing Date have been
exhausted (and the web sites under domain names that are Purchased Assets have
been modified), but in any event for not longer than ninety (90) days from the
Closing Date; provided, further, that Buyer shall have thirty (30) days
following the Closing Date to replace any signs located on the Leased Real
Property displaying the Seller Names. With respect to the printed purchase
orders and sales, maintenance or license agreements referred to in the preceding
sentence, from and after the Closing Date Buyer shall cover or otherwise mark
such documents as necessary in order to indicate clearly that neither Seller nor
any of its Affiliates is a party to such documents.
6.9 Non-Assignable Warranties. To the extent any third-party product
warranties exist as of the Closing Date that (i) relate exclusively to the
Business but are not (for any reason whatsoever) transferable to, assignable to
or enforceable by Buyer, or (ii) do not relate exclusively to the Business but
relate directly to any of the Purchased Assets, Seller shall at Buyer's request
and expense cooperate with Buyer and use commercially reasonable efforts to
attempt to enforce any warranty claims thereunder on Buyer's behalf and shall
promptly forward to Buyer the benefits (including economic benefits) realized
from any such action; provided, however, that Seller shall not be obligated to
file suit to enforce such warranty claims.
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6.10 Non-Assignable Claims. To the extent any causes of action,
claims, settlements, rights of recovery, insurance proceeds (from policies held
by third parties relating to any Purchased Assets or Assumed Liabilities) or
set-offs related directly to a Purchased Asset or an Assumed Liability
("CLAIMS") arise after the Closing Date that (i) relate exclusively to the
Business or the Purchased Assets, but are not (for any reason whatsoever)
transferable to, assignable to or enforceable by Buyer, or (ii) do not relate
exclusively to the Business, but have a value in excess of $100,000, Seller
shall at Buyer's request and expense cooperate with Buyer and use commercially
reasonable efforts to attempt to enforce any such Claims on Buyer's behalf and
shall promptly forward to Buyer the benefits (including economic benefits)
realized from any such action.
6.11 Insurance.
(a) The parties acknowledge that, contemporaneously with the
Closing, the Seller's insurance policies described on Schedule 6.11 (the
"PRE-CLOSING INSURANCE POLICIES") have been endorsed to name Buyer (and its
related parties, as provided pursuant to the applicable policies) as named
insureds with respect to the insurance coverage provided therein. Seller hereby
agrees that it shall take no action with respect to the Pre-Closing Policies
after Closing to cause Buyer (or its related parties) to be removed as a named
insured under such Pre-Closing Policies.
(b) To the extent that either the Buyer or the Seller (or their
respective related parties) makes any claim under any of the Pre-Closing
Insurance Policies following the Closing, the parties further agree as follows:
(i) the party making such claim shall pay and discharge any
remaining deductible in connection with any such claim that is payable
pursuant to the applicable Pre-Closing Insurance Policy;
(ii) Seller shall not make claims in the aggregate in excess
of $30,000,000 in any policy year under any such Pre-Closing Insurance
Policy; and
(iii) Buyer shall not make any claims in the aggregate in
excess of $10,000,000 in any policy year under any such Pre-Closing
Insurance Policy.
(c) Seller shall cooperate with and provide to Buyer copies of all
Books and Records of Seller concerning the Pre-Closing Insurance Policies and
shall make available to Buyer during normal business hours the Books and Records
regarding any other insurance policies covering Assumed Liabilities, all to the
extent that Buyer may reasonably request.
(d) Without limiting the foregoing, for a period of five (5) years
after Closing, Buyer agrees to reimburse Seller in an amount equal to any
increase in Seller's general liability insurance premiums that is directly
attributable to any post-Closing claims made by Buyer under any of the
Pre-Closing Insurance Policies. Within sixty (60) days following its receipt of
notice of any such increase in its premiums, Seller shall give written notice to
Buyer stating the amount of any requested reimbursement pursuant to this Section
6.11(d) and Seller's position regarding the reason for such increase. Upon
receipt of such notice, Buyer shall within thirty (30) days
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deliver a response to Seller setting forth either (i) its agreement to reimburse
Seller in such amount, in which case the requested reimbursement shall be paid
by Buyer together with such response, or (ii) any dispute of such amount,
together with an explanation of such dispute (a "DISPUTE NOTICE"). In the event
of a dispute, the parties shall, within ten (10) days of receipt by Seller of
such Dispute Notice, select an insurance expert to review the facts and
circumstances of the premium increase and Seller's claim for reimbursement under
this Section 6.11(d). The insurance experts shall jointly select a third
independent insurance expert (the "INDEPENDENT INSURANCE EXPERT") to assist in
this review and analysis. The Independent Insurance Expert shall be instructed
to deliver to Buyer and Seller, within thirty (30) days following Buyer's
delivery to Seller of a Dispute Notice, a written determination as to the extent
of any increase in Seller's general liability insurance premiums that it
determines to be directly attributable to any post-Closing claims made by Buyer
under any of the Pre-Closing Insurance Policies. Any such determination by the
Independent Insurance Expert shall be non-appealable and binding upon Buyer and
Seller for purposes of this Section 6.11. To the extent that the Independent
Insurance Expert determines that Seller is entitled to any reimbursement by
Buyer under this Section 6.11(d), Buyer shall deliver payment of such amount to
Seller within ten (10) Business Days of such determination. Buyer and Seller
shall each pay one-half of the Independent Insurance Expert's fees and expenses.
(e) Buyer shall be permitted to engage in discussions after the
Closing with the insurance carrier for each of Seller's insurance policies set
forth on Schedule 6.11(e) to amend such policies to list Buyer (and its related
parties, as provided pursuant to the applicable policy) as named insureds with
respect to the insurance coverage provided therein and Seller shall permit Buyer
and its Representatives to have access to such insurance carriers for such
purpose; provided, however, that prior to finalizing any such arrangement, Buyer
shall provide Seller with written documentation, in form and substance
reasonably satisfactory to Seller, evidencing that the addition of Buyer (and
its related parties, as provided pursuant to the applicable policy) as named
insureds on any such policies of insurance shall not increase Seller's costs,
fees or expenses in connection with any such policy of insurance (other than any
costs, fees or expenses contemplated in Section 6.11(d)). Seller shall have no
liability to Buyer under this Section 6.11(e) in the event that any such
insurance carriers refuse to provide such endorsement to Buyer for any reason.
Subject to the foregoing, to the extent that Buyer is added after the Closing as
a named insured on any insurance policy listed on Schedule 6.11(e), such
insurance policy shall thereafter be deemed a Pre-Closing Insurance Policy for
purposes of this Agreement.
ARTICLE VII
CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE
7. Conditions. The obligation of Buyer to purchase the Purchased
Assets under this Agreement is subject to the satisfaction or waiver, at or
prior to Closing, of the following conditions set forth in this Article VII:
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7.1 Accuracy of Representations. Each representation and warranty of
Seller shall have been true and correct as of the date of this Agreement and
shall be true and correct on and as of the Closing Date as though made at that
time, except to the extent that such representations and warranties expressly
relate to an earlier date (in which case such representations and warranties
shall be true and correct on and as of such earlier date) and except to the
extent any untruth or inaccuracy would not reasonably be expected to have a
Material Adverse Effect on the Business.
7.2 Performance of Seller. Seller shall have performed in all
material respects the covenants and agreements required to be performed by it
pursuant to this Agreement on or before the Closing Date.
7.3 Consents. As of the Closing Date, Seller shall have received the
consents set forth on Schedule 3.3.
7.4 No Material Adverse Change. During the period commencing on the
date hereof and ending on the date immediately preceding the Closing Date, there
shall not have been any Material Adverse Change to the Business.
7.5 Officer's Certificate. Buyer shall have received a certificate
from the president of Seller stating that the conditions set forth in Sections
7.1, 7.2 and 7.4 have been satisfied.
7.6 Good Standing Certificates. Buyer shall have received
certificates (i) from the Secretary of State of the State of Delaware,
evidencing that Seller is existing and in good standing under the laws of the
State of Delaware and (ii) from each state set forth on Schedule 3.1 evidencing
that Seller is qualified to do business and is in good standing as a foreign
entity in such states.
7.7 Release of Liens. All Encumbrances on or affecting the Purchased
Assets created by Seller (other than Permitted Encumbrances or any Encumbrance
created by the Division (including the management, employees or agents thereof))
shall have been released and evidence thereof reasonably satisfactory to Buyer
shall have been delivered by Seller to Buyer.
7.8 Opinion of Seller's Counsel. Buyer shall have received an
opinion of White & Case LLP, counsel to Seller, dated as of the Closing Date, in
form and substance reasonably satisfactory to Buyer.
7.9 Certificates of No Tax Due. Buyer shall have received tax
clearance certificates from the State of Delaware and each state set forth on
Schedule 7.9.
7.10 Orders. No order or injunction of any kind shall have been
entered, promulgated or enforced by any court or Governmental Entity which would
prohibit or materially delay the consummation of the transactions contemplated
by this Agreement.
7.11 Landlord Estoppel Letters. Seller shall have delivered to Buyer
estoppel letters duly executed by the landlords of the Leased Real Property in
form and substance reasonably satisfactory to Buyer on or prior to the Closing
Date.
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7.12 Seller's Closing Deliveries. Buyer shall have received all of
the closing deliveries set forth in Sections 2.6 and 2.8.
ARTICLE VIII
CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE
8. Conditions. The obligation of Seller to sell the Purchased Assets
pursuant to this Agreement is subject to the satisfaction or waiver, at or prior
to the Closing Date, of the following conditions set forth in this Article VIII:
8.1 Accuracy of Representations. Each representation and warranty of
Buyer shall have been true and correct as of the date of this Agreement and
shall be true and correct on and as of the Closing Date as though made at that
time, except to the extent that such representations and warranties expressly
relate to an earlier date (in which case such representations and warranties
shall be true and correct on and as of such earlier date) and except to the
extent any untruth or inaccuracy would not reasonably be expected to have a
Material Adverse Effect on Buyer.
8.2 Performance of Buyer. Buyer shall have performed in all material
respects the covenants and agreements required to be performed by it pursuant to
this Agreement on or before the Closing Date.
8.3 Officer's Certificate. Seller shall have received a certificate
from the president of Buyer stating, in such detail as Seller or its counsel may
reasonably request, that the conditions set forth in Sections 8.1 and 8.2 have
been satisfied.
8.4 Opinion of Buyer's Counsel. Seller shall have received an
opinion of Haynes and Boone, LLP, counsel to Buyer, dated as of the Closing
Date, in form and substance reasonably satisfactory to Seller.
8.5 Management Releases. Seller shall have received releases in the
form of Exhibit H from the members of management of the Division set forth on
Schedule 5.6 on or before the Closing Date.
8.6 Buyer's Closing Deliveries. Seller shall have received all of
the closing deliveries set forth in Sections 2.7 and 2.8.
ARTICLE IX
TERMINATION
9.1 Termination. Anything contained in this Agreement other than in
this Section 9.1 to the contrary notwithstanding, this Agreement may be
terminated in writing at any time before the Closing:
(a) by mutual consent of Buyer and Seller;
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(b) by either Buyer or Seller, if the Closing shall not have
occurred on or before June 28, 2002 (or such later date as may be agreed upon in
writing by the parties hereto); or
(c) by either Buyer or Seller if a court of competent jurisdiction
shall have issued an order, decree or ruling permanently restraining, enjoining
or otherwise prohibiting the transactions contemplated by this Agreement, and
such order, decree, ruling or other action shall have become final and
nonappealable.
9.2 Effect of Termination. In the event that this Agreement is
terminated pursuant to Section 9.1 (i) all obligations of the parties hereto
under this Agreement (other than pursuant to this Section 9.2) shall terminate
and (ii) there shall be no liability of any party hereto to any other party
except (x) the obligations of the parties under Sections 6.2 (Review of the
Business), 12.1 (Expenses), 12.2 (Notices), 12.4 (Entire Agreement), 12.6
(Governing Law), 12.7 (Submission to Jurisdiction; Venue; Waiver of Jury Trial),
12.12 (Publicity; Non-Disclosure) and this Section 9.2 (Effect of Termination),
which shall survive the termination of this Agreement, and (y) that nothing
herein shall relieve any party from liability hereunder for a willful breach of
any representation, warranty or obligation under this Agreement.
ARTICLE X
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
10.1 Survival of Representations; Covenants. (a) Except as set forth
in paragraph (b) of this Section 10.1, the respective representations and
warranties of Buyer and Seller set forth in this Agreement or in any Schedule,
Exhibit, agreement, certificate or document delivered pursuant to this Agreement
shall survive the purchase and sale of the Purchased Assets pursuant to this
Agreement for a period of one (1) year after the Closing Date. Covenants shall
survive in accordance with their respective terms.
(b) The representations and warranties set forth in Sections 3.7
(Taxes) and 3.8 (Employee Benefit Plans) shall survive until the expiration of
the applicable statute of limitations period.
(c) No indemnification claim with respect to a representation or
warranty shall be valid if made for the first time after the date such
representation or warranty expires. Notwithstanding the foregoing, any such
representation or warranty shall survive such expiration date for purposes of
that claim (i) if prior to such expiration date, Buyer or Seller, as applicable,
shall have been advised of such claim by such other party in writing pursuant to
Section 10.4 (Indemnification Procedures) or (ii) if the party making such
representation or warranty made a fraudulent or intentional misrepresentation in
connection with such representation or warranty.
(d) The right to indemnification, payment of Losses or other remedy
based on such representations, warranties and covenants shall not be affected by
any investigation conducted by Buyer with respect to the accuracy or inaccuracy
of or compliance with, any such representation, warranty or covenant.
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10.2 Indemnification by Seller. (a) Subject to Section 10.1, Seller
shall at all times after the Closing indemnify and hold harmless Buyer and its
officers, directors, stockholders, accountants, agents and employees, Affiliates
and its heirs, successors and permitted assigns (each a "BUYER INDEMNIFIED
PARTY") from and against any and all Losses which any Buyer Indemnified Party
may at any time suffer or incur, or become subject to, as a result of or in
connection with:
(i) the failure of any representation or warranty made by
Seller in this Agreement or in any Schedule, Exhibit, agreement,
certificate or document delivered by Seller pursuant to this Agreement to
be true and correct as of the date hereof and the Closing Date (without
giving effect to any "materiality," "Material Adverse Change," "Material
Adverse Effect" or similar qualifications);
(ii) any failure by Seller to perform, satisfy and discharge
any of its covenants under this Agreement or any other agreement delivered
by Seller pursuant to this Agreement;
(iii) the failure by Seller to comply with the laws relating
to bulk transfers or bulk sales with respect to the transactions
contemplated by this Agreement; or
(iv) the Retained Liabilities.
(b) The amounts for which Seller shall be liable to any Buyer
Indemnified Party under Section 10.2(a) shall be net of any tax benefit actually
realized (by reason of a deduction, basis adjustment, credit or otherwise) by
such Buyer Indemnified Party, or any insurance benefit actually realized by such
Buyer Indemnified Party in connection with the Losses or facts giving rise to
the right of indemnification.
(c) Notwithstanding any other provision of this Agreement to the
contrary:
(i) Seller shall not be required to indemnify and hold
harmless any Buyer Indemnified Party pursuant to Section 10.2(a)(i) for
the inaccuracy of any representation or warranty set forth in Sections
3.3 (No Violation or Conflict) (but only with respect to those Contracts,
Permits or other instruments or obligations that are Purchased Assets (x)
that are not set forth on Schedule 3.3 and (y) that Buyer has no knowledge
of on the Closing Date), 3.4 (Title to Assets), 3.5 (No Encumbrances), 3.6
(Consents of Governmental Entities), 3.7 (Taxes) or 3.8 (Employee Benefit
Plans) until the aggregate amount of the Buyer Indemnified Parties' Losses
as a result of or in connection with such inaccuracy or inaccuracies, as
the case may be (without giving effect to any "materiality," "Material
Adverse Change," "Material Adverse Effect" or similar qualifications),
exceeds $500,000, after which Seller shall be required to indemnify and
hold harmless any Buyer Indemnified Party for all Losses of such Buyer
Indemnified Party as a result of or in connection with such inaccuracy or
inaccuracies, as the case may be (without giving effect to any
"materiality," "Material Adverse Change," "Material Adverse Effect" or
similar qualifications), in excess of $500,000 only; provided, however,
that the aggregate indemnification obligation of Seller pursuant to
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Section 10.2(a)(i) for the inaccuracy of any representation or warranty
set forth in Sections 3.3 (No Violation or Conflict) (but only with
respect to those Contracts, Permits or other instruments or obligations
that are Purchased Assets (x) that are not set forth on Schedule 3.3 and
(y) that Buyer has no knowledge of on the Closing Date), 3.4 (Title to
Assets), 3.5 (No Encumbrances), 3.6 (Consents of Governmental Entities),
3.7 (Taxes) or 3.8 (Employee Benefit Plans) (without giving effect to any
"materiality," "Material Adverse Change," "Material Adverse Effect" or
similar qualifications) shall in no event exceed $5,000,000;
(ii) the aggregate indemnification obligation of Seller (x)
pursuant to Section 10.2(a)(i) for the inaccuracy of any representation or
warranty set forth in Sections 3.3 (No Violation or Conflict) (but only
with respect to those Contracts, Permits or other instruments or
obligations that are Purchased Assets (A) that are not set forth on
Schedule 3.3 and (B) that Buyer has no knowledge of on the Closing Date),
3.4 (Title to Assets), 3.5 (No Encumbrances), 3.6 (Consents of
Governmental Entities), 3.7 (Taxes) or 3.8 (Employee Benefit Plans)
(without giving effect to any "materiality," "Material Adverse Change,"
"Material Adverse Effect" or similar qualifications) and (y) pursuant to
Section 10.2(a)(ii), solely for the failure by Seller to perform, satisfy
and discharge its covenant set forth in Section 5.3(e), shall in no event
exceed $10,000,000; and
(iii) the indemnification obligation of Seller shall in no
event exceed the Purchase Price.
(d) Notwithstanding any other provision of this Agreement to the
contrary, to the extent a Buyer Indemnified Party may seek indemnification from
Seller pursuant to Section 10.2(a)(i) for the inaccuracy of any representation
or warranty set forth in Section 3.8 and pursuant to Section 10.2(a)(ii) for the
failure by Seller to perform, satisfy and discharge its covenant set forth in
Section 5.3(e) as a result of the same claim, the Buyer Indemnified Party shall
only seek indemnification pursuant to Section 10.2(a)(ii).
10.3 Indemnification by Buyer. (a) Subject to Section 10.1, Buyer
shall at all times after the Closing indemnify and hold harmless Seller and its
officers, directors, stockholders, accountants, agents and employees, Affiliates
and its heirs, successors and permitted assigns (each a "SELLER INDEMNIFIED
PARTY") from and against any and all Losses which such Seller Indemnified Party
may at any time suffer or incur, or become subject to, as a result of or in
connection with:
(i) the failure of any representation or warranty made by
Buyer in this Agreement or in any Schedule, Exhibit, agreement,
certificate or document delivered by Buyer pursuant to this Agreement to
be true and correct as of the date hereof and the Closing Date;
(ii) any failure by Buyer to perform, satisfy and discharge
any of its covenants under this Agreement or any other agreement delivered
by Buyer pursuant to this Agreement; or
(iii) the Assumed Liabilities.
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(b) The amounts for which Buyer shall be liable to any Seller
Indemnified Party under Section 10.3(a) shall be net of any tax benefit actually
realized (by reason of a deduction, basis adjustment, credit or otherwise) by
such Seller Indemnified Party, or any insurance benefit actually realized by
such Seller Indemnified Party in connection with the Losses or facts giving rise
to the right of indemnification.
(c) Notwithstanding any other provision of this Agreement to the
contrary, the indemnification obligation of Buyer with respect to Section
10.3(a)(ii) for the failure by Buyer to perform, satisfy and discharge its
covenant set forth in the last sentence of Section 5.3(a) shall in no event
exceed $10,000,000.
10.4 Indemnification Procedure. (a) Within a reasonable period of
time after the determination or incurrence of Losses by any Buyer Indemnified
Party or Seller Indemnified Party seeking indemnification (the "INDEMNIFIED
PARTY") which might give rise to indemnification hereunder, the Indemnified
Party shall deliver to the party from which indemnification is sought (the
"INDEMNIFYING PARTY") a certificate in the form of Exhibit I (the
"CERTIFICATE"), which Certificate shall:
(i) state that the Indemnified Party has incurred Losses for
which such Indemnified Party is entitled to indemnification pursuant to
this Agreement; and
(ii) specify in reasonable detail each individual item of the
Losses included in the Certificate, the date such item arose or was
identified, the nature of the misrepresentation, breach of warranty,
breach of covenant or claim to which each such item is related and the
computation of the amount to which such Indemnified Party claims to be
entitled hereunder.
Without prejudice to the first sentence of Section 10.1(c), the
failure to deliver the Certificate to the Indemnifying Party within a reasonable
period of time will not relieve the Indemnifying Party of any indemnification
obligation hereunder, except to the extent the Indemnifying Party establishes
that the defense of the claim for which indemnification is sought is prejudiced
by the Indemnified Party's failure to give such notice within a reasonable
period of time.
(b) In case the Indemnifying Party shall object to the
indemnification of an Indemnified Party in respect of any claim or claims
specified in any Certificate, the Indemnifying Party shall, within ten (10) days
after receipt by the Indemnifying Party of such Certificate, deliver to the
Indemnified Party a notice to such effect and the Indemnifying Party and the
Indemnified Party shall, within the 30-day period beginning on the date of
receipt by the Indemnified Party of such objection, attempt in good faith to
agree upon the rights of the respective parties with respect to each of such
claims to which the Indemnifying Party shall have so objected. If the
Indemnified Party and the Indemnifying Party shall succeed in reaching agreement
on their respective rights with respect to any of such claims, the Indemnified
Party and the Indemnifying Party shall promptly prepare and sign a memorandum
setting forth such agreement. Should the Indemnified Party and the Indemnifying
Party be unable to agree as to any particular item or items or amount or
amounts, then the Indemnified Party and the Indemnifying Party shall submit such
dispute to a court of competent jurisdiction. The party that receives a
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final judgment in its favor in such dispute shall be indemnified and held
harmless for all reasonable attorney and consultant's fees or expenses incurred
in obtaining such judgment by the other party.
(c) Promptly after the assertion by any third party of any claim
against any Indemnified Party that, in the judgment of such Indemnified Party,
may result in the incurrence by such Indemnified Party of Losses for which such
Indemnified Party would be entitled to indemnification pursuant to this
Agreement (other than any such claims which are a result of or are in connection
with the untruth or inaccuracy of any representation or warranty of Seller made
in Section 3.7 (Taxes) (which shall be governed by Section 11.3)), such
Indemnified Party shall deliver to the Indemnifying Party a notice describing in
reasonable detail such claim. The failure to promptly deliver such notice to the
Indemnifying Party will not relieve the Indemnifying Party of any
indemnification obligation hereunder, except to the extent the Indemnifying
Party establishes that the defense of the claim for which indemnification is
sought is prejudiced by the Indemnified Party's failure to give such notice
within a reasonable period of time. The Indemnifying Party may, at its option by
notice to the Indemnified Party within thirty (30) days after having been
notified by the Indemnified Party of the existence of such claim, assume and
conduct the defense and/or settlement of the Indemnified Party against such
claim (including the employment of counsel, who shall be reasonably satisfactory
to such Indemnified Party), and the payment of expenses so long as the
Indemnifying Party pursues the claim diligently and in good faith. Any
Indemnified Party shall have the right to employ separate counsel in any such
action or claim and to participate in the defense thereof, but the fees and
expenses of such counsel shall not be at the expense of the Indemnifying Party
unless (x) the Indemnifying Party shall have failed, within such 30-day period
after having been notified by the Indemnified Party of the existence of such
claim as provided in the preceding sentence, to assume and conduct the defense
and/or settlement of such claim, (y) the employment of such counsel has been
specifically authorized in writing by the Indemnifying Party, or (z) the named
parties to any such action (including any impleaded parties) include both such
Indemnified Party and the Indemnifying Party and such Indemnified Party shall
have been advised in writing by such counsel that there may be one or more legal
defenses available to the Indemnified Party which are not available to the
Indemnifying Party, or available to the Indemnifying Party, the assertion of
which would be adverse to the interests of the Indemnified Party. Neither the
Indemnified Party nor the Indemnifying Party may enter into a settlement without
the consent of the other party, which consent shall not be unreasonably
withheld.
(d) Claims for Losses specified in any Certificate to which an
Indemnifying Party shall not object in writing within ten (10) days of receipt
of such Certificate, claims for Losses covered by a memorandum of agreement of
the nature described in paragraph (b), claims for Losses the validity and amount
of which have been the subject of judicial determination as described in
paragraph (b) and claims for Losses the validity and amount of which shall have
been the subject of a final judicial determination, or shall have been settled
with the consent of the Indemnifying Party or, as the case may be, the
Indemnified Party, as described in paragraph (c), are hereinafter referred to,
collectively, as "AGREED CLAIMS." Within ten (10) days of the determination of
the amount of any Agreed Claims, the Indemnifying Party shall pay to the
Indemnified Party an amount equal to the Agreed Claim by wire transfer of
immediately available funds, to a bank account or accounts designated by the
Indemnified Party. The Indemnified
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Party shall provide written notice to the Indemnifying Party of such account
information at least two (2) Business Days prior to such payment.
10.5 Exclusive Remedy. After the Closing, the right of Buyer and
Seller (and their respective officers, directors, stockholders, accountants,
agents and employees, Affiliates and heirs, successors and permitted assigns) to
indemnification pursuant to Sections 10.2 and 10.3 shall be the sole and
exclusive right and remedy exercisable against any other party to this Agreement
regardless of the legal theory advanced in support of such claims, including
claims for contributions or other rights of recovery arising out of alleged
fraud, intentional misrepresentation or negligent misrepresentation or relating
to any Environmental Laws; provided, however, that this Section 10.5 shall not
apply with respect to claims relating to Sections 3.1, 3.2, 3.4 and 3.5 only, in
cases of fraud or intentional misrepresentation.
ARTICLE XI
TAX MATTERS
11.1 Allocation of Purchase Price. (a) Seller and Buyer agree to
allocate the aggregate purchase price to be paid for the Purchased Assets in
accordance with Section 1060 of the Code and to reduce such allocation to
writing on or prior to the Closing Date. Such allocation shall be adjusted after
the Closing Date if Seller and Buyer mutually agree that an adjustment to the
allocation is necessary to reflect the fair market value of the Purchased Assets
as of the Closing Date. Seller and Buyer agree to resolve any disagreement with
respect to such allocation, or any adjustment thereof, in good faith.
(b) In addition, Seller and Buyer hereby undertake and agree to file
timely any information that may be required to be filed pursuant to Treasury
Regulations promulgated under Section 1060(b) of the Code, and shall use the
allocation determined pursuant to this Section 11.1 in connection with the
preparation of IRS Form 8594 and any similar state or local Tax forms as such
forms relate to the transactions contemplated by this Agreement. Neither Seller
nor Buyer shall file any Return or other document or otherwise take any position
that is inconsistent with the allocation determined pursuant to this Section
11.1 except as may be adjusted by subsequent agreement following an audit by the
IRS or state or local taxing authority or by court decision.
11.2 Returns. Seller shall have the exclusive obligation and
authority to file or cause to be filed all Returns that are required to be filed
by or with respect to Seller for all taxable years or periods, and, with respect
to the Division, the Business and the Purchased Assets, for all taxable years or
periods (or portions thereof) ending on or prior to the Closing Date, and Buyer
shall have the exclusive obligation and authority to file or cause to be filed
all Returns that are required to be filed with respect to the Taxes imposed upon
or by reference to the Purchased Assets or the conduct of the operation of the
Division and the Business for any taxable year or other taxable period ending
after the Closing Date; provided, however, that items set forth on such Returns
shall be treated in a manner consistent with the past practices of Seller
(taking into account any amended Returns and the submission of any IRS Forms
3115) with respect to such items unless otherwise required by law or except to
the extent such
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inconsistencies would not, or would not reasonably be expected to, adversely
affect the Tax liability of Seller for any post-Closing period.
11.3 Controversies. Buyer shall timely forward to Seller all written
notifications and other communications that Buyer receives from any taxing
authority relating to any Tax audit or other proceeding relating to the Tax
liability of Seller with respect to the Purchased Assets (with respect to a
taxable year or period (or portion thereof) ending on or prior to the Closing
Date). The failure of Buyer to give Seller such written notice shall excuse
Seller from its obligations under Section 10.2 with respect to any increased Tax
liability directly attributable to any such notification or other communication
if the failure to provide such written notice adversely affects the ability of
Seller to timely contest any claim arising from such Tax audit or other
proceeding. Seller and its duly appointed representatives shall have the
exclusive authority to control any audit or examination by any taxing authority,
initiate any claim for refund, amend any Return, and contest, resolve and defend
against any assessment for additional Taxes, notice of Tax deficiency or other
adjustment of Taxes of or relating to any liability of Seller for all
Pre-Closing Periods, and Seller shall be entitled to any Tax refund relating to
any such taxable period; provided, however, that Seller shall not settle or
compromise any issue relating to Assumed Taxes without Buyer's consent, which
consent shall not be unreasonably withheld, conditioned, or delayed. Buyer shall
have the exclusive authority to control any audit or examination by any taxing
authority, initiate any claim for refund, amend any Return, and contest, resolve
and defend against any assessment for additional Taxes, notice of Tax deficiency
or other adjustment of Taxes of or relating to any liability for Taxes that are
imposed upon or by reference to the Purchased Assets or the conduct of the
operation of the Division or the Business for all taxable periods after the
Closing Date; provided, however, that neither Buyer nor its duly appointed
representatives shall, without the prior written consent of Seller which consent
shall not be unreasonably withheld, conditioned or delayed, enter into any
settlement of any contest or otherwise compromise any issue that materially
affects or may materially affect the Tax liability of Seller or any of its
Affiliates for any taxable year or period (or portion thereof) ending on or
prior to the Closing Date or require payment by Seller of any amount under
Section 10.2 unless Buyer shall have waived or caused to be waived for itself
any right to indemnification for any such amounts from Seller.
11.4 Sales and Transfer Fees and Taxes. Except as set forth in
Section 10.2(a)(iii), Buyer shall be responsible for and pay all applicable
sales, transfers, documentary, use, filing and other similar taxes and fees that
may become due or payable as a result of the sale, conveyance, assignment,
transfer or delivery of the Purchased Assets and the consummation of the
transactions contemplated by this Agreement, whether levied on Buyer or Seller.
11.5 Prorations. Ad valorem and similar Taxes and assessments
relating to the Purchased Assets shall be prorated on a per diem basis between
Seller, on the one hand, and Buyer, on the other hand, as of the Closing Date
based upon estimates of the amount of such taxes and assessments that are due
and payable on the Purchased Assets during the taxable year during which the
Closing Date occurs. As soon as the amount of actual Taxes and assessments is
known, Seller and Buyer shall reassess the amounts to be paid by each party with
the result that Seller shall be liable for those Taxes and assessments
attributable to the time period up to and including the Closing Date (the
"SELLER PRORATED TAXES") and Buyer shall pay for those Taxes and assessments
attributable to the period thereafter. Buyer shall be responsible for preparing
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and filing the Returns for ad valorem and similar Taxes that were not filed
prior to the Closing Date.
11.6 Cooperation on Tax Matters. Seller shall cooperate with and
provide to Buyer copies of all Returns of Seller together with accompanying
schedules and related workpapers, documents relating to rulings or other
determinations by any taxing authority and records concerning the ownership and
Tax basis of property, that Seller may possess to the extent such Returns,
schedules, workpapers, documents and records are related to the Assumed Taxes.
ARTICLE XII
MISCELLANEOUS
12.1 Expenses. Each of Sellers and Buyer shall pay its own expenses
incident to the negotiation, preparation, and carrying out of this Agreement
(and any documents entered into incident thereto) and the consummation of the
transactions contemplated hereby, including the fees and expenses of their
respective counsel and accountants.
12.2 Notices. All notices, requests, consents, approvals, objections
and other communications required or permitted hereunder shall be in writing and
shall be sufficiently given if delivered in person or if sent by telecopy, by
nationally recognized courier or by certified or registered mail, postage
prepaid, deemed to have been delivered on the date personally delivered or on
the date telecopied or three days after the date mailed, if addressed as
follows:
(a) If to Seller, to:
Associated Materials Incorporated
c/o Harvest Partners, Inc.
280 Park Avenue,
33rd Floor
New York, New York 10017
Facsimile: (212) 812-0100
Attn: Ira D. Kleinman
Jonathan Angrist
with a copy (which shall not constitute notice) to:
Associated Materials Incorporated
3773 State Road
Cuyahoga Falls, Ohio 44223
Facsimile: (330) 922-2312
Attn: Keith LaVanway
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with a copy (which shall not constitute notice) to:
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036-2787
Facsimile: (212) 354-8113
Attn: John M. Reiss, Esq.
Oliver C. Brahmst, Esq.
(b) If to Buyer, to:
AmerCable Incorporated
c/o Wingate Partners III, L.P.
750 N. St. Paul Street
Suite 1200
Dallas, Texas 75201
Facsimile: (214) 871-8799
Attn: James A. Johnson
with a copy (which shall not constitute notice) to:
AmerCable Incorporated
350 Bailey Road
El Dorado, Arkansas 71730
Facsimile: (870) 862-8659
Attn: Robert F. Hogan, Jr.
with a copy (which shall not constitute notice) to:
Haynes and Boone, LLP
901 Main Street
Suite 3100
Dallas, Texas 75202
Facsimile: (214) 200-0617
Attn: Taylor H. Wilson, Esq.
Any party may change its address for purposes of this Section 12.2 by giving the
other parties written notice of the new address in the manner set forth above.
12.3 Amendment. This Agreement may be amended only by an instrument
in writing executed by each of the parties hereto.
12.4 Entire Agreement. This Agreement, the Exhibits, Schedules,
certificates, and documents referred to herein constitute the entire agreement
of the parties hereto, and supersede all prior understandings between the
parties hereto with respect to the subject matter hereof, including the Letter
of Intent.
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12.5 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which shall constitute the
same instrument.
12.6 Governing Law. This Agreement is to be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the law that might be applied under applicable principles of conflicts of laws.
12.7 Submission to Jurisdiction; Venue; Waiver of Jury Trial. (a)
Any judicial proceeding brought against any of the parties to this Agreement
with respect to any dispute arising out of, under or in connection with this
Agreement may be brought in the courts of the State of Delaware or in the United
States District Court for the District of Delaware, and, by the execution and
delivery of this Agreement, each of the parties hereto accepts the exclusive
jurisdiction of such courts, and irrevocably agrees to be bound by any judgment
rendered thereby in connection with this Agreement.
(b) Each of the parties to this Agreement hereby irrevocably waives
any objection which it may now or hereafter have to the laying of the venue of
any proceeding arising out of, under or in connection with this Agreement in any
of the courts referred to in Section 12.7(a) and hereby further irrevocably
waives and agrees not to plead or claim that any such court is not a convenient
forum for any such proceeding.
(c) Each of the parties to this Agreement hereby irrevocably waives
any right it may have to a trial by jury in respect of any litigation as between
the parties directly or indirectly arising out of, under or in connection with
this Agreement. Each of Buyer and Seller (i) certifies that no representative,
agent or attorney of the other party has represented, expressly or otherwise
that such other party would not, in the event of litigation, seek to enforce the
foregoing waiver and (ii) acknowledges that it and the other party have been
induced to enter into this Agreement by, among other things, the mutual waivers
and certifications in this Section 12.7.
12.8 Headings. The headings of the several paragraphs of this
Agreement are inserted solely for convenience of reference and are not a part of
this Agreement and are not intended to govern, limit or aid in the construction
of any of the terms or provisions of this Agreement.
12.9 Benefit and Assignment. (a) Nothing in this Agreement, whether
expressed or implied, is intended and shall not be construed to confer any
rights or remedies under or by reason of this Agreement on any persons other
than the parties to it and their respective successors and assigns (except
Sections 10.2 and 10.3, as such Sections relate to the respective officers,
directors, stockholders, accountants, agents and employees, Affiliates and
heirs, successors and permitted assigns of Buyer and Seller), nor is anything in
this Agreement intended to relieve or discharge the obligation or liability of
any third persons to any party to this Agreement, nor shall any provision
contained herein give any third party any right of subrogation or action over or
against any party to this Agreement.
(b) This Agreement shall be binding on, and accrue to the benefit
of, the parties hereto and their respective successors and permitted assigns.
This Agreement may not be
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assigned by any of the parties hereto; provided, however, that Seller hereby
consents to the assignment by Buyer of its rights hereunder to its financing
sources as security for any borrowings.
12.10 Waiver. The waiver by a party of the performance of any
covenant, condition or promise herein shall not invalidate this Agreement nor
shall it be considered a waiver by such party of any other covenant, condition
or promise herein, nor shall any such waiver be construed as a waiver or
relinquishment for the future of the time for the performance of any other act
or identical act, covenant, condition or promise herein.
12.11 Severability. In case any provision in this Agreement shall be
held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby; provided that the invalidity, illegality or
unenforceability of such provision is not materially adverse to the interest of
any party hereto.
12.12 Publicity; Non-Disclosure. Except as otherwise required by
law, none of the parties hereto shall make any public disclosure of any part or
all of the terms and conditions of this Agreement or issue any press release or
make any other public statement of the terms and conditions of this Agreement
without obtaining the prior written approval of Seller and Buyer to the contents
and manner of presentation and publication thereof. To the extent that any such
disclosure is required by law, the disclosing party shall provide Buyer or, as
the case may be, Seller with written notice of such required disclosure prior to
such disclosure and Buyer or, as the case may be, Seller shall review and
approve the proposed disclosure, which approval shall not be unreasonably
withheld. Notwithstanding the foregoing, the parties agree and acknowledge that
neither party shall be restricted following the Closing Date from disclosing
without the consent of the other party the fact that the transactions
contemplated by this Agreement have been consummated.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the day, month and year first above written.
ASSOCIATED MATERIALS INCORPORATED
By: /s/ D. Keith LaVanway
-------------------------------------
Title: Vice President and
Chief Financial Officer
AMERCABLE INCORPORATED
By: /s/ James A. Johnson
-------------------------------------
Title: President
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EXHIBIT A
to Asset Purchase Agreement
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT (this "AGREEMENT"), dated
as of June 24, 2002, is entered into by and between Associated Materials
Incorporated, a Delaware corporation ("ASSIGNOR"), and AmerCable Incorporated, a
Delaware corporation ("ASSIGNEE").
Capitalized terms used and not otherwise defined herein shall have
the respective meanings assigned to them in the Asset Purchase Agreement (as
defined below).
W I T N E S S E T H :
WHEREAS, Assignor and Assignee have entered into that certain Asset
Purchase Agreement (the "ASSET PURCHASE AGREEMENT"), dated as of June 24, 2002,
pursuant to which Assignee has agreed (i) subject to Section 6.6 of the Asset
Purchase Agreement, to purchase and take assignment of Assignor's right and
interest in, to and under the Acquired Contracts and (ii) to assume and
discharge or perform the Assumed Liabilities; and
WHEREAS, pursuant to the Asset Purchase Agreement, Assignor has
agreed to sell, convey, transfer, assign and deliver to Assignee all of
Assignor's right and interest in, to and under the Acquired Contracts.
NOW, THEREFORE, in consideration of the terms and conditions
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee, intending
to be legally bound, hereby agree as follows:
1. Assignor hereby irrevocably assigns, conveys and transfers to
Assignee, its successors and permitted assigns, all of Assignor's right and
interest in, to and under the Acquired Contracts.
2. Assignee hereby accepts the foregoing assignment of the Acquired
Contracts.
3. Assignor hereby irrevocably assigns, conveys and transfers to
Assignee, its successors and permitted assigns, the Assumed Liabilities.
4. Assignee hereby accepts and assumes the Assumed Liabilities and
agrees to assume and discharge or perform when due the Assumed Liabilities.
5. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which shall constitute the same
instrument.
6. This Agreement may be amended only by an instrument in writing
executed by each of the parties hereto.
Page 2
7. (a) Nothing in this Agreement, whether express or implied, is
intended and shall not be construed to confer any rights or remedies under or by
reason of this Agreement on any Persons other than the parties to it and the
parties to the Contracts being assigned hereby and their respective successors
and permitted assigns, nor is anything in this Agreement intended to relieve or
discharge the obligation or liability of any third Persons to any party to this
Agreement, nor shall any provision contained herein give any third party any
right of subrogation or action over or against any party to this Agreement.
(b) This Agreement shall be binding on, and accrue to the benefit
of, the parties hereto and their respective successors and permitted assigns.
This Agreement may not be assigned by any of the parties hereto; provided,
however, that Assignor hereby consents to the assignment by Assignee of its
rights hereunder to its financing sources as security for any borrowings.
8. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, regardless of the law that might be
applied under applicable principles of conflicts of laws. Each Acquired Contract
shall continue to be governed and construed in accordance with the laws of the
jurisdiction specified therein.
9. In case any provision in this Agreement shall be held invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions hereof shall not in any way be affected or impaired
thereby; provided that the invalidity, illegality or unenforceability of such
provision is not materially adverse to the interest of any party hereto.
10. On or after the date hereof and without further consideration,
Assignor shall, from time to time at Assignee's request, execute and deliver
such further instruments of conveyance, assignment and transfer and shall take,
or cause to be taken, such other action as Assignee may reasonably request for
the more effective conveyance, assignment and transfer to Assignee of the
Acquired Contracts.
11. Assignor and Assignee hereby agree and acknowledge that this
Agreement is being entered into and delivered pursuant to and subject to the
terms and conditions set forth in the Asset Purchase Agreement, that additional
rights and obligations of Assignor and Assignee are expressly provided for
therein, and that the execution and delivery of this Agreement shall not impair
or diminish any of the rights or obligations of any of the parties to the Asset
Purchase Agreement, as set forth therein. In the event of any conflict between
the provisions of the Asset Purchase Agreement and this Agreement, the
provisions of the Asset Purchase Agreement will prevail and control.
Page 3
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the day, month and year first written above.
ASSOCIATED MATERIALS INCORPORATED
By ________________________________
Name:
Title:
AMERCABLE INCORPORATED
By ________________________________
Name:
Title:
EXHIBIT B
to Asset Purchase Agreement
FORM OF AGREEMENT OF TRANSFER
AND ASSUMPTION OF SPONSORSHIP OF
BENEFIT PLANS
This AGREEMENT OF TRANSFER AND ASSUMPTION OF SPONSORSHIP OF BENEFIT
PLANS (the "AGREEMENT") is entered into as of June 24, 2002, by and between
Associated Materials Incorporated, a Delaware corporation ("AMI") and AmerCable
Incorporated, a Delaware corporation ("AMERCABLE").
WHEREAS, pursuant to the Asset Purchase Agreement, dated June 24,
2002, by and among AMI and AmerCable (the "PURCHASE AGREEMENT"), AmerCable will
purchase substantially all of the assets, and assume certain liabilities, of the
AmerCable division (the "DIVISION") of AMI;
WHEREAS, AMI sponsors and maintains for the benefit of the
Division's eligible employees (i) the AmerCable Retirement Plan amended and
restated effective January 1, 1997, as further amended by the First Amendment to
the AmerCable Retirement Plan effective January 1, 2001 (the "RETIREMENT PLAN")
and the trust related thereto as evidenced by the Trust Agreement by and between
AMI and Fidelity Management Trust Company dated effective as of January 1, 1997;
(ii) the AmerCable Employee Health Care Plan originally effective February 1,
1998 and revised effective February 1, 2001 (the "HEALTH PLAN") and account
#80-1019-6402 at Regions Bank, El Dorado, Arkansas relating thereto which is
commonly referred to as the "AmerCable Employee Health Benefit Account"; and
(iii) any other Assumed Employee Benefit Plans (as such term is defined by the
Purchase Agreement) (subparagraphs (i), (ii), and (iii) above are collectively
referred to herein as the "PLANS");
WHEREAS, AmerCable desires, in connection with transactions
contemplated in the Purchase Agreement, to assume the sponsorship and
maintenance of the Plans, effective as of the Closing Date, as that term is
defined in the Purchase Agreement; and
WHEREAS, AMI desires, in connection with transactions contemplated
in the Purchase Agreement, to transfer sponsorship and maintenance to AmerCable
of the Plans, effective as of the Closing Date.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. AMI, as sponsor of the Plans, hereby assigns and transfers to
AmerCable the sponsorship and maintenance of the Plans and all the rights,
obligations, responsibilities and liabilities of AMI thereunder. AMI hereby
approves and consents to AmerCable's adoption and assumption of the sponsorship
and maintenance of the Plans, including, without limitation, all rights,
obligations, responsibilities and liabilities of AMI thereunder and agrees that
AmerCable shall be solely responsible for each such plan (including, without
limitation, the administration and payment of benefits thereunder)
2. AmerCable hereby adopts and assumes the sponsorship of the Plans,
including, without limitation, all rights, obligations, responsibilities and
liabilities of AMI thereunder and agrees that it shall be solely responsible for
each such plan (including, without limitation, the administration and payment of
benefits thereunder) and shall promptly discharge any obligations of the
sponsors thereunder.
3. AMI and AmerCable agree to take any and all actions required to
perfect and complete the transfer of sponsorship and maintenance of each of the
Plans from AMI to AmerCable. AMI and AmerCable shall promptly amend the
Retirement Plan, any other Plans, as necessary, to reflect such transfers.
4. AMI shall notify Fidelity Management Trust Company, as the
trustee of the Retirement Plan, that effective as of the Closing Date, AmerCable
is the plan sponsor of the Retirement Plan, and shall take all steps necessary
to transfer bank account #80-1019-6402 at Regions Bank in El Dorado, Arkansas
for the Health Plan to AmerCable effective as of the Closing Date.
5. Notwithstanding the foregoing, for purposes of transferring
sponsorship of Assumed Employee Benefit Plans pursuant to this Agreement, the
term "Assumed Employee Benefit Plans" shall not include any plan in which both
employees of the Division and employees of any division of AMI other than the
Division participate.
6. This Agreement is not intended, nor shall it be construed, to
confer upon any person or entity, other than the parties hereto and their
respective successors and permitted assigns, any rights or remedies under or by
reason of this Agreement. This Agreement and the rights and obligations of
AmerCable or AMI hereunder may not be assigned by any party hereto without the
prior written consent of the other parties, which consent shall not be
unreasonably withheld. This Agreement may be modified only by an instrument
executed by the parties hereto. This Agreement is being entered into in
connection with the Purchase Agreement, but does not otherwise modify or affect
in any respect, the provisions of the Purchase Agreement or the indemnification
obligations thereunder, including, without limitation, the obligations of the
parties under Section 5.3(a) of the Purchase Agreement. In the event of any
conflict between the provisions of the Purchase Agreement and this Agreement,
the provisions of the Purchase Agreement will prevail and control.
7. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
IN WITNESS WHEREOF, this Agreement of Transfer and Assumption of
Sponsorship of the Plans has been executed as of the date first above written.
ASSOCIATED MATERIALS INCORPORATED
By: ______________________________
Its:______________________________
AMERCABLE INCORPORATED
By: ______________________________
Its:______________________________
EXHIBIT C
to Asset Purchase Agreement
FORM OF BILL OF SALE
Associated Materials Incorporated ("SELLER"), a Delaware
corporation, pursuant to that certain Asset Purchase Agreement (the
"AGREEMENT"), dated as of June 24, 2002, entered into by and between Seller and
AmerCable Incorporated ("BUYER"), a Delaware corporation, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, does
hereby grant, sell, convey, assign, transfer and deliver to Buyer and its
successors and permitted assigns forever all of Seller's right, Seller's title
(to the extent Seller has such title) and Seller's interest in, to and under all
of the Purchased Assets (as such term is defined in the Agreement) upon the
terms and as more particularly described and set forth in the Agreement, TO HAVE
AND TO HOLD the same unto Buyer, its successors and permitted assigns, to or for
its use forever.
There shall be excluded from this Bill of Sale any personal and real
property, tangible and intangible, which are part of the Purchased Assets but
which are the specific subject of a separate instrument of conveyance.
On or after the date hereof and without further consideration,
Seller shall, from time to time at Buyer's request, execute and deliver such
further instruments of conveyance, assignment and transfer and shall take, or
cause to be taken, such other action as Buyer may reasonably request for the
more effective conveyance, assignment and transfer to Buyer of the Purchased
Assets.
Seller hereby agrees and acknowledges that this Bill of Sale is
being entered into and delivered pursuant to and subject to the terms and
conditions set forth in the Agreement, that additional rights and obligations of
Seller and Buyer are expressly provided for therein, and that the execution and
delivery of this Bill of Sale shall not impair or diminish any of the rights or
obligations of any of the parties to the Agreement, as set forth therein. In the
event of any conflict between the provisions of the Agreement and this Bill of
Sale, the provisions of the Agreement will prevail and control.
Nothing in this Bill of Sale, whether express or implied, is
intended and shall not be construed to confer any rights or remedies under or by
reason of this Bill of Sale on any persons other than Buyer and its respective
successors and permitted assigns, nor is anything in this Bill of Sale intended
to relieve or discharge the obligation or liability of any third persons to
Seller or Buyer, nor shall any provision contained herein give any third party
any right of subrogation or action over or against Seller or Buyer.
This Bill of Sale shall be binding on Seller and its successors and
assigns, and shall accrue to the benefit of Buyer and its successors and
permitted assigns. This Bill of Sale may not be assigned by Seller or Buyer;
provided, however, that Seller hereby consents to the assignment by Buyer of its
rights hereunder to its financing sources as security for any borrowings.
This Bill of Sale shall be governed by and construed in accordance
with the laws of the State of Delaware, regardless of the law that might be
applied under applicable principles of conflicts of law.
IN WITNESS WHEREOF, Seller has caused this instrument to be duly
executed by its duly authorized officer this 24th day of June, 2002.
ASSOCIATED MATERIALS INCORPORATED
By ___________________________
Name:
Title:
EXHIBIT D
to Asset Purchase Agreement
FORM OF TRADEMARK ASSIGNMENT
This Trademark Assignment (the "ASSIGNMENT") is pursuant to that certain Asset
Purchase Agreement by and between Associated Materials Incorporated, a Delaware
corporation ("ASSIGNOR"), and AmerCable Incorporated, a Delaware corporation
("ASSIGNEE"), dated June 24, 2002 (the "AGREEMENT").
WHEREAS, pursuant to the Agreement, Assignor has agreed to sell, convey,
transfer, assign and deliver to Assignee all of Assignor's right, title (to the
extent Assignor has such title) and interest in, to and under certain
intellectual property assets used exclusively or held for use exclusively in the
Business (as defined in the Agreement), including the trademarks, trademark
registrations and applications for registration and the domain names set forth
on attached SCHEDULE A (the "MARKS"); and
WHEREAS, Assignee is desirous of acquiring the Marks and the goodwill associated
with and symbolized by the marks.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged:
1. Assignor hereby irrevocably assigns, transfers, conveys, and delivers to
Assignee and its successors and permitted assigns, all of its right, title (to
the extent Assignor has such title), and interest in and to the Marks, in the
United States and elsewhere, together with the goodwill associated with and
symbolized by the Marks, and the right to sue for past infringement.
2. On or after the date hereof and without further consideration, Assignor
shall, from time to time at Assignee's request, execute and deliver such further
instruments of conveyance, assignment and transfer and shall take, or cause to
be taken, such other action as Assignee may reasonably request for the more
effective conveyance, assignment and transfer to Assignee of any of the Marks.
3. Assignor hereby agrees and acknowledges that this Assignment is being entered
into and delivered pursuant to and subject to the terms and conditions set forth
in the Agreement, that additional rights and obligations of Assignor and
Assignee are expressly provided for therein, and that the execution and delivery
of this Assignment shall not impair or diminish any of the rights or obligations
of any of the parties to the Agreement, as set forth therein. In the event of
any conflict between the provisions of the Agreement and this Assignment, the
provisions of the Agreement will prevail and control.
4. Nothing in this Assignment, whether express or implied, is intended and shall
not be construed to confer any rights or remedies under or by reason of this
Assignment on any persons other than Assignee and its respective successors and
permitted assigns, nor is anything in this Assignment intended to relieve or
discharge the obligation or liability of any third persons to Assignor or
Assignee, nor shall any provision contained herein give any third party any
right of subrogation or action over or against Assignor or Assignee.
5. This Assignment shall be binding on Assignor and its successors and assigns,
and shall accrue to the benefit of Assignee and its successors and permitted
assigns. This Assignment may not be assigned by Assignor or Assignee; provided,
however, that Assignor hereby consents to the assignment by Assignee of its
rights hereunder to its financing sources as security for any borrowings.
6. This Assignment shall be governed by and construed in accordance with the
laws of the State of Delaware, regardless of the law that might be applied under
applicable principles of conflicts of law.
ASSOCIATED MATERIALS INCORPORATED
Date: ______________ By: ________________________________
Name: ________________________________
Title: ________________________________
State: )
) ss:
County: )
On this ___ day of June, 2002, the above signed officer of Associated Materials
Incorporated, the above named Assignor, personally appeared before me, and
acknowledged that he executed the foregoing Trademark Assignment on behalf of
said Assignor pursuant to authority duly received.
___________________________________
Notary Public Signature
EXHIBIT E
to Asset Purchase Agreement
FORM OF PATENT ASSIGNMENT
This Patent Assignment (the "ASSIGNMENT") is pursuant to that certain Asset
Purchase Agreement by and between Associated Materials Incorporated, a Delaware
corporation ("ASSIGNOR"), and AmerCable Incorporated, a Delaware corporation
("ASSIGNEE"), dated June 24, 2002 (the "AGREEMENT").
WHEREAS, pursuant to the Agreement, Assignor has agreed to sell, convey,
transfer, assign and deliver to Assignee all of Assignor's right, title (to the
extent Assignor has such title) and interest in, to and under certain
intellectual property assets used exclusively or held for use exclusively in the
Business (as defined in the Agreement), including the patents, patent
applications and inventions set forth on the attached SCHEDULE A (the
"PROPERTIES"); and
WHEREAS, Assignee is desirous of acquiring the Properties.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged:
1. Assignor hereby irrevocably assigns, transfers, conveys, and delivers to
Assignee and its successors and permitted assigns, all of its right, title (to
the extent Assignor has such title), and interest in and to the Properties, in
the United States and elsewhere, together with all divisionals, renewals, and
continuing applications thereof, and the right to sue for past infringement.
2. On or after the date hereof and without further consideration, Assignor
shall, from time to time at Assignee's request, execute and deliver such further
instruments of conveyance, assignment and transfer and shall take, or cause to
be taken, such other action as Assignee may reasonably request for the more
effective conveyance, assignment and transfer to Assignee of any of the
Properties.
3. Assignor hereby agrees and acknowledges that this Assignment is being entered
into and delivered pursuant to and subject to the terms and conditions set forth
in the Agreement, that additional rights and obligations of Assignor and
Assignee are expressly provided for therein, and that the execution and delivery
of this Assignment shall not impair or diminish any of the rights or obligations
of any of the parties to the Agreement, as set forth therein. In the event of
any conflict between the provisions of the Agreement and this Assignment, the
provisions of the Agreement will prevail and control.
4. Nothing in this Assignment, whether express or implied, is intended and shall
not be construed to confer any rights or remedies under or by reason of this
Assignment on any persons other than Assignee and its respective successors and
permitted assigns, nor is anything in this Assignment intended to relieve or
discharge the obligation or liability of any third persons to Assignor or
Assignee, nor shall any provision contained herein give any third party any
right of subrogation or action over or against Assignor or Assignee.
5. This Assignment shall be binding on Assignor and its successors and assigns,
and shall accrue to the benefit of Assignee and its successors and permitted
assigns. This Assignment may not be assigned by Assignor or Assignee; provided,
however, that Assignor hereby consents to the assignment by Assignee of its
rights hereunder to its financing sources as security for any borrowings.
6. This Assignment shall be governed by and construed in accordance with the
laws of the State of Delaware, regardless of the law that might be applied under
applicable principles of conflicts of law.
ASSOCIATED MATERIALS INCORPORATED
Date: ______________ By: ________________________________
Name: ________________________________
Title: ________________________________
State: )
) ss:
County: )
On this ___ day of _____, 2002, the above signed officer of Associated Materials
Incorporated, the above named Assignor, personally appeared before me, and
acknowledged that he executed the foregoing Patent Assignment on behalf of said
Assignor pursuant to authority duly received.
___________________________________
Notary Public Signature
EXHIBIT F
to Asset Purchase Agreement
FORM OF RELEASE AGREEMENT
This RELEASE AGREEMENT (this "AGREEMENT"), dated as of June 24, 2002 is
entered into by and among Associated Materials Incorporated, a Delaware
corporation ("AMI"), and Robert F. Hogan, Chad E. Archer, Rodney Cole and David
Nasky (collectively, "MANAGEMENT").
RECITALS
WHEREAS, AMI has previously delivered to Management that certain Corporate
Directive, dated May 8, 2002, and that certain Amended and Restated Corporate
Directive, dated May 14, 2002 (collectively, the "CORPORATE DIRECTIVE"); and
WHEREAS, in connection with and in consideration of the closing of the
transactions contemplated by that certain Asset Purchase Agreement by and
between AMI and AmerCable Incorporated, a Delaware corporation, dated June 24,
2002 (the "PURCHASE AGREEMENT"), AMI wishes to release Management from any
claims that could be made against Management by AMI in connection with the
Corporate Directive.
AGREEMENT
In consideration of the premises and of the agreements contained herein
and in the Purchase Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby expressly acknowledged, AMI and
Management hereto agree as follows:
1. RELEASE OF CLAIMS. AMI, for itself and on behalf of its affiliates,
associates, employees, agents, representatives, directors, officers,
shareholders, partners, principals, and their respective successors, heirs, and
assigns (each an "AMI RELEASOR") and all persons claiming by or through them,
does hereby generally release and forever discharge, and covenant not to sue or
assist anyone in any claim against, each member of Management of and from any
and all causes of action, claims, liabilities, damages, or demands of any kind,
whether presently known or unknown, suspected or unsuspected, whether based in
contract, tort, or any other recovery theory (including, without limitation,
costs of investigation, defense, settlement and attorneys' fees) ("CLAIMS"),
which each AMI Releasor or any person claiming by or through any of them, has,
had, or may have, directly in indirectly, arising out of or relating to the
compliance by Management with the Corporate Directive. AMI agrees that the
release set forth in this section shall be and remain in effect in all respects
as a complete general release as to the matters released.
2. ADDITIONAL RIGHTS AND OBLIGATIONS. The parties hereby agree and
acknowledge that this Agreement is being entered into and delivered pursuant to
and subject to the terms and conditions set forth in the Purchase Agreement,
that additional rights and obligations of the parties are expressly provided for
therein, and that the execution and delivery of this Agreement shall not impair
or diminish any of the rights or obligations of any of the parties to the
Purchase Agreement, as set forth therein.
3. BINDING EFFECT. This Agreement, and all the terms and provisions
hereof, shall be binding upon and shall inure to the benefit of Management and
AMI, and their respective successors and permitted assigns.
4. SEVERABILITY. In case any provision in this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof shall not in any way be affected or impaired
thereby; provided that the invalidity, illegality or unenforceability of such
provision is not materially adverse to the interest of any party hereto.
5. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the law that
might be applied under applicable principles of conflicts of laws.
6. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which shall constitute the same
instrument.
7. SECTION HEADINGS. The headings contained in this Agreement are for
reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOLLOWS
2
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date above written.
ASSOCIATED MATERIALS INCORPORATED
By:___________________________________
Name:_________________________________
Title:________________________________
ROBERT F. HOGAN
______________________________________
CHAD E. ARCHER
______________________________________
RODNEY COLE
______________________________________
DAVID NASKY
______________________________________
EXHIBIT G
to Asset Purchase Agreement
FORM OF LOCKBOX AGREEMENT
Associated Materials Incorporated June 21, 2002
c/o Harvest Partners, Inc.
280 Park Avenue
33rd Floor
New York, New York 10017
Associated Materials Incorporated
3773 State Road
Cuyhoga Falls, Ohio 44223
Re: AMERCABLE DIV. OF ASSOCIATED MATERIALS, Lockbox No. 70649
AMERCABLE/OFFSHORE MARINE, Lockbox No. 270649
AMERCABLE DISBURSEMENT ACCOUNT, No. 319010000036
OMCS DISBURSEMENT ACCOUNT, No. 70021048
OFFSHORE MARINE CABLE SPECIALISTS, No. 720993500506
Ladies and Gentlemen:
In connection with the proposed sale (the "SALE") of the assets of the
AmerCable Division of Associated Materials Incorporated, a Delaware corporation
("AMI"), to AmerCable Incorporated, a Delaware corporation ("AMERCABLE"), AMI
and AmerCable hereby agree to the terms and obligations of this letter agreement
(the "AGREEMENT").
This Agreement will confirm our arrangements regarding the transfer of
funds in AMERCABLE DIV. OF ASSOCIATED MATERIALS, Lockbox No. 70649 depositing
into account number 1102514500 and AMERCABLE/OFFSHORE MARINE, Lockbox No. 270649
(together, the "LOCKBOX ACCOUNTS") which Key Bank (the "BANK") currently
maintains for the AmerCable Division of AMI. In connection with the closing of
the Sale, the Bank shall be instructed to make all necessary arrangements to
transfer all funds in the Lockbox Accounts to AMI's primary account at the Bank
at the close of business on June 21, 2002 in accordance with the existing
instructions for such Lockbox Accounts. The Bank shall be further instructed to
make all necessary arrangements to transfer and convey the Lockbox Accounts to
AmerCable, effective as of 10:00 a.m. Central Daylight Time, on June 24, 2002.
The Bank shall be instructed to suspend processing of the Lockbox Accounts on
June 24, 2002, and to resume processing of the Lockbox Accounts on June 25,
2002.
This Agreement will also confirm our arrangements regarding the transfer
of funds in AMERCABLE DISBURSEMENT ACCOUNT, No. 319010000036, OMCS
DISBURSEMENT ACCOUNT, No. 70021048 and OFFSHORE MARINE CABLE SPECIALISTS, No.
720993500506 (collectively, the "CASH DISBURSEMENT ACCOUNTS") which the Bank
currently maintains for the AmerCable Division of AMI. In connection with the
closing of the Sale, the Bank shall be instructed to make all necessary
arrangements to transfer the Cash Disbursement Accounts to AmerCable, effective
as of the open of business, 8:00 a.m. Central Daylight Time, on June 24, 2002.
The Bank shall be instructed to settle all open items in the Cash Disbursement
Accounts at the close of business on June 21, 2002 prior to such transfer. New
funds will be transferred into the Cash Disbursement Accounts by AmerCable for
purposes of settling Cash Disbursement Account transactions later in the day on
June 24, 2002 pursuant to separate instructions.
Following the closing of the Sale, AmerCable shall be the new signatory on
the Lockbox Accounts and the Cash Disbursement Accounts. Further, all AMI
personnel shall no longer have any access to the Lockbox Accounts or the Cash
Disbursement Accounts for any purposes whatsoever.
AMI and AmerCable shall jointly deliver instructions to the Bank with
respect to the transfer of the Lockbox Accounts and the Cash Disbursement
Accounts, as described above, immediately prior to the closing of the Sale on
June 24, 2002. Such instructions are to be sent via email to Beth Horseman at
beth_a_horseman@keybank.com. Diana Vance, Bernie Avondet and Dawn Mullee are to
be copied on such email at diana_vance@keybank.com, bernie_m_avondet@keybank.com
and dawn_mullee@keybank.com. In the event that such closing does not occur at
such time, either AMI or AmerCable may deliver notice to the Bank to such
effect, whereupon this Agreement shall be revoked and of no further force or
effect.
This Agreement is binding upon AMI and AmerCable and their successors and
assigns and is enforceable by AMI and AmerCable. It supersedes all prior
agreements relating to the Lockbox Accounts and the Cash Disbursement Accounts,
and it may not be modified or terminated except upon the written consent of AMI
and AmerCable.
This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one and
same agreement.
AMERCABLE INCORPORATED
By:________________________________
Name:______________________________
Title:_____________________________
Page 2
Acknowledged and agreed to this 21st day of June, 2002.
ASSOCIATED MATERIALS
INCORPORATED
By:___________________________
Name:_________________________
Title:________________________
Page 3
EXHIBIT H
to Asset Purchase Agreement
FORM OF MANAGEMENT RELEASE
June 24, 2002
[____________] (the "RELEASOR") for himself, his heirs, assigns,
successors, executors, and administrators, in consideration of the terms and
conditions set forth in that certain Option Conversion Agreement, dated as of
the date hereof, by and among Holdings (as defined below), the Company (as
defined below) and the Releasor, intending to be legally bound, hereby fully
releases and discharges ASSOCIATED MATERIALS INCORPORATED (the "COMPANY"), a
Delaware corporation, and ASSOCIATED MATERIALS HOLDINGS INC. ("HOLDINGS"), a
Delaware corporation, and their respective predecessors, successors,
subsidiaries, affiliated and parent companies, and all of the present and former
officers, directors, agents, employees, and representatives, respectively, of
the Company and Holdings (collectively, the "RELEASEES") forever and
unconditionally from any and all manner of action, claim, demand, damages, cause
of action, debt, sum of money, contract, covenant, controversy, agreement,
promise, judgment, and demand whatsoever, in law or equity, known or unknown,
existing or claimed to exist, relating to or arising out of his employment
and/or separation from employment with the Company, including, without
limitation, (i) the stock option (the "STOCK OPTION") granted to the Releasor
pursuant to the Associated Materials Holdings Inc. 2002 Stock Option Plan and
the Stock Option Award Agreement, dated as of the date hereof, between Holdings
and the Releasor, to purchase [__] shares of preferred stock of Holdings,
including, without limitation, the cancellation of such stock option; (ii) the
stock options (the "AMI OPTIONS") granted to the Releasor pursuant to the
Associated Materials Incorporated 1994 Stock Incentive Plan and any and all
Nonqualified Stock Option Award Agreements by and between the Company and the
Releasor, including, without limitation, the cancellation of such stock option,
EXHIBIT H
Page 2
and any other stock options or rights granted by the Company to the Releasor;
(iii) the letter agreement, dated April 18, 2002, between Holdings and the
Releasor, relating to the Stock Option and surrender of the AMI Option; and (iv)
any discrimination claim based on sex, sexual orientation or preference, race,
religion, color, national origin, age or disability, retaliation, or any cause
of action under the following in each case as amended: the Age Discrimination in
Employment Act of 1967, Title VII of the Civil Rights Act of 1964, the Civil
Rights Act of 1991, the Civil Rights Act of 1866, the Equal Pay Act of 1963, the
American with Disabilities Act of 1990, the Family and Medical Leave Act of
1993, the Worker Adjustment and Retraining Notification Act, the Employee
Retirement Income Security Act of 1974 (except any valid claim to recover vested
benefits, if applicable), any applicable Executive Order program, and their
state or local counterparts or any other federal, state or local law, rule,
regulation, constitution or ordinance, or under any public policy or common law
or arising under any practices or procedure of the Company, and/or any claim for
wrongful termination, back pay, future wage loss, injury subject to relief under
the Workers' Compensation Act, any other claim, whether in tort, contract or
otherwise, or any claim for costs, fees or other expenses, including attorneys'
fees, incurred in these matters, against any one or more of the Releasees.
Notwithstanding anything otherwise set forth in the foregoing
paragraph, Releasees shall not be deemed to have released or discharged any
action, claim, demand, damages, cause of action, debt, sum of money, contract,
covenant, controversy, agreement, promise, judgment, and demand whatsoever, in
law or equity, known or unknown, existing or claimed to exist, that Releasees,
or any of them, might be entitled to assert by counterclaim, cross complaint,
affirmative defense, or any other form of defense to any action, claim or demand
EXHIBIT H
Page 3
asserted by the Company, Holdings or any affiliate (as defined in the Securities
Exchange Act of 1934, as amended) thereof.
By signing this Release, the Releasor acknowledges that:
(i) he has read and fully understands the terms of this Release and
had the opportunity to negotiate its terms;
(ii) he has been advised and urged to consult with his attorneys,
concerning the terms this Release, and that he has done so to the extent
he deems necessary;
(iii) he has had ample opportunity to negotiate through his
attorneys concerning this Release;
(iv) he has agreed to this Release knowingly, voluntarily, with such
advice from his attorneys as he deemed appropriate, and was not subjected
to any undue influence or coercion in agreeing to the terms of this
Release; and
(v) he has been given at least 21 days to consider this Release, and
acknowledges that in the event that he executes this Release prior to the
expiration of the 21 day period, he hereby waives the balance of said
period.
_____________________________
Releasor
Sworn to before me this
___ day of June, 2002.
_____________________________
Notary Public
EXHIBIT I
to Asset Purchase Agreement
FORM OF LOSS CLAIM CERTIFICATE
[LETTERHEAD OF INDEMNIFIED PARTY]
[Address of Indemnifying Party]
Attention: [__________]
__________ __, 20__
Dear Sirs:
With reference to that certain Asset Purchase Agreement (the "ASSET
PURCHASE AGREEMENT"), dated as of June [__], 2002, entered into by and between
Associated Materials Incorporated and AmerCable Incorporated, we hereby claim
the following Losses (as defined in the Asset Purchase Agreement):
[INSERT THE NATURE OF THE CLAIM INCLUDING THE FOLLOWING:
- STATE THAT THE INDEMNIFIED PARTY (AS DEFINED IN THE ASSET PURCHASE
AGREEMENT) HAS INCURRED LOSSES FOR WHICH IT IS ENTITLED TO BE
INDEMNIFIED UNDER SECTION [10.2/10.3] OF THE ASSET PURCHASE
AGREEMENT
- A DETAILED DESCRIPTION OF EACH INDIVIDUAL ITEM OF THE LOSSES
- THE DATE, IF ANY, ON WHICH EACH INDIVIDUAL ITEM AROSE OR WAS
IDENTIFIED
- THE NATURE OF THE MISREPRESENTATION, BREACH OF WARRANTY, BREACH OF
COVENANT OR CLAIM TO WHICH EACH INDIVIDUAL ITEM IS RELATED
- THE COMPUTATION OF THE AMOUNT TO WHICH THE INDEMNIFIED PARTY CLAIMS
TO BE ENTITLED]
Very truly yours,
[The Indemnified Party]
By ___________________________
Name:
Title:
cc: [__________]