Exhibit 10
ASSET PURCHASE AGREEMENT
DATED AS OF APRIL 8, 2005
AMONG
DELUXE PATTERN CORPORATION,
CERTAIN OF ITS AFFILIATES NAMED HEREIN,
VENTURE HOLDINGS COMPANY, LLC,
CERTAIN OF ITS AFFILIATES NAMED HEREIN,
AND
NEW VENTURE HOLDINGS, LLC
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS.................................................... 1
1.1 Definitions................................................... 1
ARTICLE II PURCHASE AND SALE............................................. 10
2.1 Purchased Assets.............................................. 10
2.2 Excluded Assets............................................... 12
2.3 Assumed Liabilities........................................... 13
2.4 Excluded Liabilities.......................................... 13
2.5 Assignments; Cure Amounts..................................... 14
ARTICLE III PURCHASE PRICE............................................... 14
3.1 Purchase Price................................................ 14
3.2 Allocation of Purchase Price.................................. 15
ARTICLE IV CLOSING....................................................... 15
4.1 Closing Date.................................................. 15
4.2 Payment on the Closing Date................................... 15
4.3 Buyer's Additional Deliveries................................. 16
4.4 Sellers' Deliveries........................................... 16
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLERS...................... 17
5.1 Organization of Sellers....................................... 17
5.2 Subsidiaries and Investments.................................. 17
5.3 Authority of Sellers.......................................... 17
5.4 Real Property................................................. 18
5.5 Title to Property............................................. 20
5.6 Taxes......................................................... 20
5.7 Absence of Certain Developments............................... 20
5.8 Sellers' Intellectual Property................................ 20
5.9 Employment Matters............................................ 21
5.10 Sufficiency of Assets......................................... 22
5.11 Compliance with Laws; Governmental Permits.................... 22
5.12 Contracts..................................................... 23
5.13 Financial Statements.......................................... 23
5.14 No Undisclosed Liabilities.................................... 23
5.15 Litigation.................................................... 23
5.16 Accounts Receivable........................................... 24
5.17 Equipment..................................................... 24
5.18 Inventory..................................................... 24
5.19 Affiliate Transactions........................................ 24
5.20 No Finder..................................................... 24
5.21 Disclaimer.................................................... 25
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ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER....................... 25
6.1 Organization of Buyer......................................... 25
6.2 Authority of Buyer............................................ 25
6.3 No Finder..................................................... 26
6.4 Payment of Purchase Price..................................... 26
ARTICLE VII ACTION PRIOR TO THE CLOSING DATE............................. 26
7.1 Investigation of the Business by Buyer........................ 26
7.2 Preserve Accuracy of Representations and Warranties........... 26
7.3 Third Party Consents.......................................... 27
7.4 Governmental Approvals........................................ 27
7.5 Operations Prior to the Closing Date.......................... 28
7.6 Notification of Certain Matters............................... 31
7.7 Insurance..................................................... 31
ARTICLE VIII ADDITIONAL AGREEMENTS....................................... 31
8.1 Taxes......................................................... 31
8.2 Employees and Employee Benefit Plans.......................... 32
8.3 Collection of Receivables..................................... 33
8.4 Adequate Assurances Regarding Seller Agreements............... 33
8.5 Performance Under Seller Agreements........................... 34
8.6 Certain Actions............................................... 34
8.7 Covenant Not to Compete; Non-Solicitation..................... 34
8.8 No Liability for Representations and Warranties............... 35
ARTICLE IX CONDITIONS TO CLOSING......................................... 36
9.1 Conditions to Each Party's Obligations to Effect the Closing.. 36
9.2 Conditions to Obligations of Buyer............................ 36
9.3 Conditions to Obligations of the Sellers...................... 37
ARTICLE X TERMINATION.................................................... 37
10.1 Termination................................................... 37
10.2 Notice of Termination......................................... 38
10.3 Effect of Termination......................................... 38
ARTICLE XI GENERAL PROVISIONS............................................ 38
11.1 Survival of Obligations....................................... 38
11.2 Confidential Nature of Information............................ 38
11.3 Investigation................................................. 39
11.4 No Public Announcement........................................ 40
11.5 Notices....................................................... 40
11.6 Successors and Assigns........................................ 42
11.7 Access to Records after Closing............................... 42
11.8 Entire Agreement; Amendments; Schedules....................... 42
11.9 Interpretation................................................ 43
11.10 Waivers....................................................... 43
11.11 Expenses...................................................... 43
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11.12 Partial Invalidity............................................ 43
11.13 Execution in Counterparts..................................... 43
11.14 Further Assurances............................................ 44
11.15 Governing Law................................................. 44
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SCHEDULES
SECTION SCHEDULE*
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1.1(a) Persons With Knowledge
1.1(b) Third Party Consents
2.1(e) Seller Agreements
2.1(n) Foreign Subsidiaries
2.2(d) Excluded Assets
2.2(g) Excluded Accounts Receivable
2.2(i) Actions Against Other Sellers
2.3(g) Assumed General Unsecured Claims
5.2 Subsidiaries and Investments
5.4(a) Owned Real Property
5.4(b) Leased Real Property
5.5 Title to Property
5.6 Taxes
5.8(a) Intellectual Property
5.8(b) Intellectual Property Licenses and Agreements
5.8(c) Intellectual Property Violations, Claims and Actions
5.9(c) Unfair Labor Practice, Charges and Other Employee-Related
Complaints or Claims
5.9(d) Labor and Collective Bargaining Agreements
5.13 Financial Statements
5.15 Litigation
5.19 Affiliate Transactions
8.2(a) Employees Not Given Offers
8.2(b) Employee Benefit Plans
8.2(d) Employee and Consulting Agreements
EXHIBITS
EXHIBIT A - DELUXE ENTITIES
EXHIBIT B - VENTURE ENTITIES
EXHIBIT C - ASSIGNMENT AND ASSUMPTION AGREEMENT*
EXHIBIT D - BILL OF SALE*
EXHIBIT E - ASSIGNMENT OF PATENTS*
EXHIBIT F - ASSIGNMENT OF TRADEMARKS*
EXHIBIT G - ASSIGNMENT OF COPYRIGHTS*
EXHIBIT H - ASSIGNMENT OF DOMAIN NAMES*
EXHIBIT I - KEY EMPLOYEE RETENTION PROGRAM TERMS*
EXHIBIT J - LOAN AGREEMENTS*
EXHIBIT K - SALE ORDER*
*Note: Copies of the Schedules / omitted Exhibits will be furnished
supplementally to the Securities and Exchange Commission upon request.
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of April 8, 2005 (this
"Agreement"), among Deluxe Pattern Corporation, a Michigan corporation ("Deluxe
Pattern"), and certain of its Affiliates listed in Exhibit A attached hereto
(together with Deluxe Pattern, the "Deluxe Entities"), Venture Holdings Company,
LLC, a Michigan limited liability company ("Venture Holdings"), and certain of
its Affiliates listed in Exhibit B attached hereto (together with Venture
Holdings, the "Venture Entities", and together with the Deluxe Entities,
"Sellers") and New Venture Holdings, LLC, a Delaware limited liability company
("Buyer").
WHEREAS, the Venture Entities are, among other things, engaged in the
business of the supply, design, system integration and manufacture of interior
and exterior plastic components, modules and systems for the automotive industry
and other industries (the "Venture Business");
WHEREAS, the Deluxe Entities are, among other things, engaged in the
business of the ownership of real estate, machinery and equipment and
intellectual property and the performance of manufacturing related and
administrative services (including design work and tooling) and marketing
formats integral to the supply, design, system integration and manufacture of
interior and exterior plastic components, modules and systems for the automotive
industry (the "Deluxe Business", and together with the Venture Business, the
"Business");
WHEREAS, each of the Venture Entities and Deluxe Entities has
commenced reorganization proceedings by filing a voluntary petition for relief
with the Bankruptcy Court under Chapter 11 of the Bankruptcy Code (each, a
"Filing" and together, the "Filings"); and
WHEREAS, Sellers desire to sell or cause to be sold to Buyer, and
Buyer desires to purchase, subject to the approval of the Bankruptcy Court
pursuant to Section 363 of the Bankruptcy Code, substantially all of the assets
of the Business, together with Buyer assuming certain liabilities related
thereto, all on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, it is hereby agreed between Sellers and Buyer
as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. In this Agreement, the following terms have the meanings
specified or referred to in this Section 1.1 and shall be equally applicable to
both the singular and plural forms. Any agreement referred to below shall mean
such agreement as amended, supplemented and modified from time to time to the
extent permitted by the applicable provisions thereof and by this Agreement.
"ACTION" means any legal action, suit or arbitration, or any inquiry,
proceeding or investigation, by or before any Governmental Authority.
"AFFILIATE" means, with respect to any specified Person at any time,
(a) each Person directly or indirectly controlling, controlled by or under
direct or indirect common control with such specified Person, (b) each Person
who is at such time an officer or director of, or direct or indirect beneficial
holder of at least 10% of any class of the equity interests of, such specified
Person, (c) each Person that is managed by a common group of executive officers
and/or directors as such specified Person, (d) any relative (including by
marriage or adoption) (i) of each officer, director or holder described in
clause (b) and (ii) if such specified Person is an individual, of such specified
Person and (e) each Person of which such specified Person or an Affiliate (as
defined in clauses (a) through (d)) thereof will, directly or indirectly,
beneficially own at least 10% of any class of equity interests at such time.
"AGENT" has the meaning specified in Section 1.1.5. of the Settlement
Agreement.
"AGREEMENT" has the meaning specified in the first paragraph.
"ALLOCATION SCHEDULE(S)" has the meaning specified in Section 3.2.
"ANCILLARY DOCUMENTS" means the Bill of Sale, Deeds, Assignment and
Assumption Agreement, Assignment of Patents, Assignment of Trademarks,
Assignment of Copyrights and Assignment of Domain Names.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means the Assignment and
Assumption Agreement in substantially the form of Exhibit C.
"ASSIGNMENT OF COPYRIGHTS" has the meaning specified in Section
4.4(b).
"ASSIGNMENT OF DOMAIN NAMES" has the meaning specified in Section
4.4(b).
"ASSIGNMENT OF PATENTS" has the meaning specified in Section 4.4(b).
"ASSIGNMENT OF TRADEMARKS" has the meaning specified in Section
4.4(b).
"ASSUMED LIABILITIES" has the meaning specified in Section 2.3.
"AVAILABLE EMPLOYEES" has the meaning specified in Section 8.2(a).
"AVOIDANCE ACTIONS" means any and all claims for relief of Sellers
under Chapter 5 of the Bankruptcy Code.
"AUCTION DATE" has the meaning specified in Section 2.1.
"BANKRUPTCY CODE" means 11 U.S.C. Sections 101 et seq.
"BANKRUPTCY COURT" means the United States Bankruptcy Court for the
Eastern District of Michigan, Southern Division or any other court of competent
jurisdiction agreed to by Buyer and Sellers.
"BANKRUPTCY PROCEEDINGS" means the proceedings in the Bankruptcy Court
involving Sellers.
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"BILL OF SALE" means the Bill of Sale substantially in the from of
Exhibit D.
"BUSINESS" has the meaning specified in the second recital.
"BUYER" has the meaning specified in the first paragraph.
"CLOSING" has the meaning specified in Section 4.1.
"CLOSING DATE" has the meaning specified in Section 4.1.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1985.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONTRACTS" means all contracts, agreements, indentures, notes, bonds,
Leases, leases, subleases, licenses, sublicenses, commitments, indemnities,
assignments, understandings and arrangements, whether written or oral.
"COPYRIGHTS" means all United States and foreign copyright interests
in any original work of authorship, whether registered or unregistered,
including all United States copyright registrations or foreign equivalent, all
applications for registration or foreign equivalent, all moral rights, all
common-law rights, and all rights to register and obtain renewals and extensions
of copyright registrations, together with all other copyright interests accruing
by reason of international copyright convention.
"COURT ORDER" means any judgment, order, award or decree of any
foreign, federal, state, local or other court or tribunal and any award in any
arbitration proceeding.
"CREDIT BID" has the meaning specified in Section 1.1.18. of the
Settlement Agreement.
"DEEDS" means the deeds transferring the Owned Real Property to be
delivered pursuant to Section 4.4(a).
"DELUXE ENTITIES" has the meaning specified in the first paragraph.
"DELUXE PATTERN" has the meaning specified in the first paragraph.
"DISCLOSURE SCHEDULE" means the written information that Sellers have
prepared and delivered to Buyer pursuant to the terms of this Agreement setting
forth information regarding the Business, the Purchased Assets, the Assumed
Liabilities and other matters with respect to Sellers specified therein.
"DOMAIN NAMES" is any alphanumeric designation registered with or
assigned by a domain name registrar, registry or domain name registration
authority as part of an electronic address on the Internet. A Domain Name may or
may not also be a Trademark.
"EGTRRA" means the Economic Growth and Tax Relief Reconciliation Act
of 2001.
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"ELECTRONIC DATA ROOM" means (i) documents posted by Sellers on
www.intralinks.com and (ii) four CD-ROMs provided to Buyer by Sellers labeled as
follows: "Venture Holdings Electronic Data Room North America & Europe
3/9/05-#D1-2B," "Venture Holdings Electronic Data Room Deluxe & Revised Model
3/9/05-#D2-8," "Data Room Documents France" and "Data Room Documents Bohemia".
"ENCUMBRANCE" means any lien (statutory or other), claim, charge,
security interest, mortgage, deed of trust, pledge, hypothecation, assignment,
license, conditional sale or other title retention agreement, preference,
priority or other security agreement or preferential arrangement of any kind or
nature, and any easement, charges, encroachment, covenant, restriction, right of
way, state of fact, defect in title or other encumbrance of any kind.
"ENVIRONMENT" means all air, water vapor, surface water, groundwater,
drinking water supply or land, including land surface or subsurface, and
includes all fish, wildlife, biota and all other natural resources.
"ENVIRONMENTAL LAWS" means all foreign, federal, state or local
environmental, land use, health, chemical use, safety and sanitation laws,
statutes, ordinances, rules, regulations (including with respect to the
Business, specific Environmental Permits and Orders) and codes, as in effect on
the date hereof, relating to the protection of the Environment and/or governing
the discharge of pollutants or the use, storage, treatment, generation,
transportation, processing, handling, production or disposal of Hazardous
Substances, including but not limited to the Resource Conservation and Recovery
Act of 1976 as amended ("RCRA"), the Clean Air Act as amended, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 as amended
("CERCLA"), the Toxic Substances Control Act, as amended, the Occupational
Safety and Health Act of 1970 and state and foreign statutes similar to or based
upon the foregoing, as the same are in effect on the date hereof.
"ENVIRONMENTAL PERMITS" means all approvals, authorizations, consents,
permits, licenses, registrations and certificates required by any applicable
Environmental Laws relating to: (A) pollution or protection of the Environment
including those relating to a Release of any Hazardous Substances into the
Environment, (B) the use, treatment, storage, disposal, generation, transport or
handling of pollutants, contaminants or chemicals, or industrial, toxic or
Hazardous Substances, or (C) the ownership, use, operation, cleanup or
remediation of leased or owned properties.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCLUDED ACTION" means the Action by certain Sellers against Autoliv
ASP, Inc. for breach of contract, which Action is presently pending in the
United States District Court for the Eastern District of Michigan.
"EXCLUDED ASSETS" has the meaning specified in Section 2.2.
"EXCLUDED LIABILITIES" has the meaning specified in Section 2.4.
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"EXIT CASH REQUIREMENT" has the meaning specified in Section 1.1.34.
of the Settlement Agreement.
"FACILITIES" means any plant, building, facility, structure,
underground storage tank, equipment or unit, or other assets owned, leased or
operated by any of Sellers and used in the conduct of the Business.
"FILING" has the meaning specified in the third recital.
"FINAL ORDER" means, for purposes of the consents required from any
Governmental Authority, an action by any such Governmental Authority that has
not been reversed, stayed, enjoined, set aside, annulled or suspended, or where
the time period for any further action by such Governmental Authority has
expired without further action by such Governmental Authority. Notwithstanding
the foregoing, in the case of any consent required of a Governmental Authority,
such consent by such Governmental Authority shall be deemed a Final Order even
if there is a timely request for stay, appeal, reconsideration, review or
rehearing challenging the action by such Governmental Authority, unless in the
reasonable opinion of Buyer (x) such challenge has a substantial probability of
success on its merits or (y) such challenge, if successful, would reasonably be
expected to have a Material Adverse Effect.
"FINAL SALE ORDER" means a Sale Order that has not been reversed,
stayed, modified or amended, and for which the time to appeal, seek certiorari
or motion for reargument or rehearing has expired, and for which no appeal,
petition for certiorari or motion for reargument or rehearing has been timely
taken.
"FINANCIAL STATEMENTS" has the meaning specified in Section 5.13(a).
"GAAP" means generally accepted accounting principles in the United
States.
"GOVERNMENTAL AUTHORITY" means any foreign, federal, state, local or
other government, governmental, statutory or administrative authority,
regulatory body or commission or any court, tribunal or judicial or arbitral
body.
"GOVERNMENTAL PERMITS" means all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals, clearances and orders of any Governmental Authority which are
necessary or customary for Sellers to own, lease and operate their properties
and assets or to carry on the Business as it is now being conducted or proposed
to be conducted.
"HAZARDOUS SUBSTANCE" means any substance, whether solid, liquid or
gaseous, that is listed, defined or regulated as a "hazardous substance,"
"hazardous waste," or "solid waste," or is otherwise classified as hazardous or
toxic, in or pursuant to any Environmental Law; or which is or contains
asbestos, radon, any polychlorinated biphenyl, urea formaldehyde foam
insulation, explosive or radioactive material, or motor fuel or other petroleum
hydrocarbons; or which causes or poses a threat to cause contamination or a
nuisance or a hazard to the Environment or to the health or safety of persons.
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"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the relevant rules and regulations thereunder.
"INTELLECTUAL PROPERTY" means all intellectual property owned, used or
licensed (as licensor or licensee) by a Seller, or that has been used in the
Business of a Seller, or in any product, service, technology or process
currently or formerly offered by a Seller, or currently under development by a
Seller, including all Software, Copyrights, Patents, Trademarks, Trade Secrets
and Domain Names, all documentation and media constituting, describing or
relating to the above, including memoranda, manuals, technical specifications
and other records wherever created throughout the world, and the right to sue
for and recover damages, profits and any other remedy for past, present, or
future infringement or other violation relating to any of the foregoing.
"INTEREST" means any claim defined in Section 101(5) of the Bankruptcy
Code, as well as any other claim, judgment, demand, confidentiality restriction,
option, right of first refusal, right to any equitable remedy and restrictions
of any kind or nature.
"INVENTIONS" means novel devices, processes, compositions of matter,
methods, techniques, improvements, observations, discoveries, apparatuses,
machines, designs, expressions, theories and ideas, whether or not patentable.
"INVENTORY" has the meaning specified in Section 2.1(c).
"IRS" means the Internal Revenue Service.
"KERP" means the Key Employee Retention Program of certain Sellers in
accordance with the terms set forth on Exhibit I attached hereto, as approved by
the Bankruptcy Court on March 11, 2005.
"KNOW-HOW" means scientific, engineering, mechanical, electrical,
financial, marketing or practical knowledge or experience useful in the
operation of the Business.
"KNOWLEDGE" means, with respect to Sellers, as to a particular matter,
the actual knowledge after reasonable investigation of the Persons set forth on
Schedule 1.1(a).
"LEASED REAL PROPERTY" has the meaning specified in Section 5.4(b).
"LEASES" has the meaning specified in Section 5.4(b).
"LIABILITY" means any debt, liability or obligation (whether direct or
indirect, known or unknown, absolute or contingent, accrued or unaccrued,
liquidated or unliquidated, or due or to become due), and including all costs
and expenses relating thereto.
"LICENSE" has the meaning specified in Section 5.8(b).
"LOAN AGREEMENTS" means the lending agreements set forth in Exhibit J.
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"MATERIAL ADVERSE EFFECT" means any fact, condition, change or event
that would, individually or in the aggregate, materially and adversely affect
the Purchased Assets or the Business (excluding the Excluded Assets and the
Excluded Liabilities), taken as a whole, except to the extent that any such
fact, condition, change or event results from or arises out of (i) the Filings,
(ii) the announcement of this Agreement or the consummation of the transactions
contemplated hereby, or (iii) changes in general economic conditions or changes
affecting the industry in which the Business operates generally.
"NON-TRANSFERRED SUBSIDIARY" has the meaning specified in Section
2.2(f).
"ORDER" means any order, injunction, judgment, decree, ruling, writ,
assessment or arbitration award of a Governmental Authority.
"OWNED REAL PROPERTY" has the meaning specified in Section 5.4(a).
"PATENTS" means United States and foreign patents (including
certificates of invention and other patent equivalents), patent applications,
provisional applications and patents issuing therefrom, as well as any
continuations, continuations-in-part, divisions, extensions, reexaminations,
reissues, renewals, patent disclosures, Inventions (whether or not patentable or
reduced to practice) or improvements thereto.
"PERMITTED ENCUMBRANCES" means (a) liens for Taxes and other
governmental charges and assessments arising in the ordinary course of the
Business that are not yet due and payable or that are being contested in good
faith and are fully reserved against on the Reference Date Balance Sheet, (b)
liens of landlords and liens of carriers, warehousemen, mechanics, molders,
fabricators and tool or die makers, personal property lessors and materialmen
and other like liens arising in the ordinary course of the Business for sums not
yet due and payable or that are being contested in good faith and are fully
reserved against on the Reference Date Balance Sheet, and (c) other non-monetary
restrictions, covenants, easements, rights of way or imperfections on real
property that do not prohibit, and are not violated by, the consummation of the
transactions contemplated by this Agreement, and that do not materially detract
from the value or the use of such real property for its current use and do not,
and are not reasonably likely to, have a Material Adverse Effect.
"PERSON" means any individual, corporation, partnership, joint
venture, limited liability company, association, joint-stock company, trust,
unincorporated organization or Governmental Authority.
"PURCHASE PRICE" has the meaning specified in Section 3.1.
"PURCHASED ASSETS" has the meaning specified in Section 2.1.
"REFERENCE DATE" means February 28, 2005.
"REFERENCE DATE BALANCE SHEET" means the unaudited pro forma balance
sheet of the Business as of the Reference Date which has been delivered to
Buyer.
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"RELEASE" means any past or present spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing of a Hazardous Substance into the Environment (including the
abandonment or discharging of barrels, containers and other closed receptacles
containing any Hazardous Substance).
"REPRESENTATIVES" means with respect to any Person, its officers,
employees, counsel, accountants, financial advisors, consultants and other
representatives.
"REQUIRED CONSENTS" means, collectively, (a) the filings by Sellers
and Buyer required by the HSR Act and the expiration or earlier termination of
all waiting periods under the HSR Act, and (b) consents required under foreign
anti-trust or competition laws.
"REQUIREMENTS OF LAW" means any foreign, federal, state and local
laws, statutes, regulations, rules, codes, ordinances or requirements enacted,
adopted, issued or promulgated by any Governmental Authority (including those
pertaining to electrical, building, zoning, subdivision, land use, environmental
and occupational safety and health requirements, employees and employee
benefits, patient confidentiality, the health care industry and third-party
reimbursement) or common law.
"SALE HEARING" means the hearing in the Bankruptcy Court to consider
approval of the transactions contemplated under this Agreement and all Ancillary
Documents.
"SALE ORDER" means an order of the Bankruptcy Court, substantially in
the form of Exhibit K, approving this Agreement and the Ancillary Documents, and
authorizing, pursuant to all applicable sections of the Bankruptcy Code, all of
the transactions and agreements contemplated hereby and thereby, which order
shall not have been stayed, vacated or otherwise rendered ineffective.
"SALE PROCEDURES ORDER" means the February 1, 2005 order of the
Bankruptcy Court approving an auction and bidding procedures for the sale of
substantially all of the Sellers' assets.
"SELLER AGREEMENTS" has the meaning specified in Section 2.1(e).
"SELLERS" has the meaning specified in the first paragraph.
"SELLER GROUP MEMBER" means Sellers and their Affiliates and their
respective successors and assigns.
"SENIOR LENDERS" has the meaning specified in the Settlement
Agreement.
"SETTLEMENT AGREEMENT" means that certain Global Settlement Agreement
dated as of March 31, 2005, by and among JPMorgan Chase Bank, N.A., as
administrative agent, the Official Committee of Unsecured Creditors, certain of
the Venture Entities and the Deluxe Entities.
"SOFTWARE" means computer software programs and software systems,
including all databases, compilations, tool sets, compilers, higher level or
"proprietary" languages, related
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documentation, technical manuals and materials, whether in source code, object
code or human readable form, and any licenses or rights with respect to the
foregoing.
"SUBSIDIARY" means any entity in which a Seller or a Transferred
Subsidiary has an equity interest, directly or indirectly.
"SUPPLIER DEPOSITS" means all deposits and pre-payments made by any
Seller to suppliers as advance payments with respect to materials, services,
goods or supplies to be received.
"TAX" means (i) any federal, state, local or foreign net income,
alternative or add-on minimum, ad valorem, value-added, gross income, gross
receipts, windfall profits, severance, production, environmental (including
taxes under Section 59A of the Code), property, sales, use, transfer, stamp,
gains, license, excise, employment, payroll, withholding or minimum tax, or any
other tax, custom, duty, governmental fee or other like assessment or charge of
any kind whatsoever, together with any interest or any penalty, addition to tax
or additional amount imposed by any Governmental Authority; and (ii) any
liability of Sellers for the payment of amounts of a type described in clause
(i) as a result of being a member of an affiliated, consolidated, combined or
unitary group, or as a result of any obligation of Sellers under any Tax sharing
arrangement or Tax indemnity agreement.
"TAX RETURN" means any return, report or similar statement required to
be filed with respect to any Taxes (including any attached schedules), including
any information return, claim for refund, amended return or declaration of
estimated Tax.
"TERMINATION DATE" has the meaning specified in Section 10.1.
"THIRD PARTY CONSENTS" means the consents, approvals and waivers set
forth on Schedule 1.1(b).
"TRADE PAYABLES" means accounts payable to trade creditors (other than
employees of Sellers) for goods and services furnished to the Business.
"TRADEMARKS" means United States, state and foreign trademarks,
service marks, logos, slogans, trade dress and trade names (including all
assumed or fictitious names under which the Business has been conducted), and
any other indicia of source or sponsorship of goods and services, designs and
logotypes related to the above, in any and all forms, whether registered or
unregistered, and registrations and pending applications to register the
foregoing (including intent to use applications), and all goodwill related to
the foregoing.
"TRADE SECRETS" means confidential ideas, trade secrets, Know-How,
concepts, methods, processes, formulae, algorithms, reports, data, customer
lists, mailing lists, business plans, market surveys, market research studies,
information contained on drawings and other documents, information relating to
research, development or testing, or other proprietary and confidential
information.
"TRANSFER TAXES" has the meaning specified in Section 8.1(b).
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"TRANSFERRED EMPLOYEES" has the meaning specified in Section 8.2(a).
"TRANSFERRED SUBSIDIARY" has the meaning specified in Section 2.1(n).
"TREASURY REGULATIONS" means the regulations promulgated by the U.S.
Treasury Department pursuant to the Code.
"VENTURE BUSINESS" has the meaning specified in the first recital.
"VENTURE ENTITIES" has the meaning specified in the first paragraph.
"VENTURE HOLDINGS" has the meaning specified in the first paragraph.
"WARN ACT" means the Worker Adjustment and Retraining Notification
Act.
"WINGET ACTIONS" means Actions against the Winget Defendants.
"WINGET DEFENDANTS" has the meaning specified in the Settlement
Agreement.
ARTICLE II
PURCHASE AND SALE
2.1 PURCHASED ASSETS. Upon the terms and subject to the conditions of this
Agreement, on the Closing Date, Sellers shall sell, transfer, assign, convey and
deliver, or cause to be sold, transferred, assigned, conveyed and delivered, to
Buyer, and Buyer shall purchase, free and clear of all Encumbrances and
Interests (except for Permitted Encumbrances and Assumed Liabilities), all
right, title and interest of Sellers in, to or under the properties and assets
of Sellers of every kind and description, wherever located, real, personal or
mixed, tangible or intangible, owned, licensed, used or held for use in or
relating to the Business as the same shall exist on the date hereof or be
acquired after the date hereof in the ordinary course of the Business, except as
subsequently disposed of in accordance with the provisions of this Agreement
(herein collectively called the "Purchased Assets"), including all right, title
and interest of each Seller in, to or under:
(a) all notes and accounts receivable generated by the Business, except
those listed or described in Schedule 2.2(g);
(b) all of the assets reflected on the Reference Date Balance Sheet or in
the notes thereto, except those assets disposed of or converted into cash after
the Reference Date in the ordinary course of the Business consistent with past
practice and not in violation of any provisions of this Agreement;
(c) all raw materials, supplies, work-in-process, finished goods, packaging
materials, samples and other materials included in the inventory of the Business
(the "Inventory");
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(d) all machinery, equipment, appliances, vehicles, tools, spare parts,
accessories, furniture and other personal property used in the Business;
(e) all Contracts listed or described in Schedule 2.1(e), other than those
excluded pursuant to the next to last paragraph of this Section 2.1, as the same
may be supplemented pursuant to Section 2.5 (the "Seller Agreements");
(f) the Owned Real Property, except for the Owned Real Property listed on
Schedule 2.2(d), and all Leases of Leased Real Property;
(g) all Governmental Permits;
(h) all Intellectual Property owned, licensed or used by the Sellers, or
otherwise used, or held for use, in or relating to the Business (including all
goodwill associated therewith);
(i) all products and Intellectual Property in or related thereto in
development by the Sellers for use in or relating to or otherwise in development
for the Business;
(j) all computer software programs and software systems owned, licensed or
used by the Sellers, or otherwise used, or held for use, in or relating to the
Business, including all websites, databases, compilations, tool sets, compilers,
higher level or "proprietary" languages, related documentation, technical
manuals and materials, whether in source code, object code or human readable
form, and any licenses or right relating to the foregoing;
(k) all books, records, files, invoices, Inventory records, product
specifications, advertising materials, customer lists, cost and pricing
information, supplier lists, business plans, catalogs, customer literature,
quality control records and manuals, research and development files, records and
laboratory books and credit records of customers (including all data and other
information stored on discs, tapes or other media) to the extent used in or to
the extent relating to the assets, properties, including the Intellectual
Property, business or operations of the Business;
(l) all telephone, telex and telephone facsimile numbers and other
directory listings used in connection with the Business;
(m) all refundable security deposits, and all benefits and rights arising
from prepaid expenses and prepaid rent for or relating to the Purchased Assets;
(n) the capital stock of the foreign Subsidiaries of Sellers listed in
Schedule 2.1(n) (each a "Transferred Subsidiary");
(o) all Supplier Deposits;
(p) subject in all respects to the terms of the Sale Procedures Order (to
the extent, if any, as modified by the Settlement Agreement), and except for the
rights, claims and Actions listed or described in Schedule 2.2(i), the Avoidance
Actions, the Winget Actions and the Excluded Action, all of Sellers' and its
Affiliates' rights, claims and Actions against third
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parties relating to the Business or the Purchased Assets arising out of
transactions, events or a state of facts occurring or existing prior to the
Closing Date; and
(q) all goodwill related to any of the foregoing.
At any time at least five days prior to the Closing Date, Buyer, in
its discretion by written notice to Sellers, may exclude from being assigned
pursuant hereto any Contracts, other than Contracts described in Section 8.2,
and such Contracts shall not constitute Seller Agreements, and Buyer shall not
acquire any rights or assume any Liabilities with respect thereto. Upon Buyer's
reasonable request, and, as applicable, in accordance with the Sale Order,
Sellers shall provide additional detailed information as to the Liabilities
under the Contracts sufficient for Buyer to make an informed assessment whether
to accept an assignment and assumption of such Contracts hereunder.
At any time prior to three business days prior to the date of the
auction provided for in the Sale Procedures Order (the "Auction Date"), Buyer
may, in its discretion by written notice to Sellers, designate any of the
Purchased Assets as additional Excluded Assets, which notice shall set forth in
reasonable detail the Purchased Assets so designated. Buyer acknowledges and
agrees that there shall be no reduction in the Purchase Price if it elects to
designate any Purchased Assets as Excluded Assets. Notwithstanding any other
provision hereof, the Liabilities of Sellers under or related to any Purchased
Asset excluded under this paragraph will constitute Excluded Liabilities.
2.2 EXCLUDED ASSETS. Notwithstanding the provisions of Section 2.1, the
Purchased Assets shall not include the following (herein referred to as the
"Excluded Assets"):
(a) all minute books and capital stock transfer books and the corporate
seal, if any, of Sellers;
(b) all refunds of any Tax for which any Seller is liable pursuant to
Section 8.1;
(c) any Contracts not listed or described in Schedule 2.1(e), as the same
may be supplemented pursuant to Section 2.5;
(d) the assets listed in Schedule 2.2(d);
(e) The following shall be Excluded Assets: all Avoidance Actions, the
Winget Actions, the Excluded Action and each Seller's rights, claims and Actions
against third parties relating to the Business or the Purchased Assets which (1)
might arise in connection with the discharge by Sellers of the Excluded
Liabilities or (2) are pending Actions as of the Closing Date; provided,
however, that subject to the limitation, if any, expressly set forth in the
Settlement Agreement, this clause (2) shall not include the Actions for
infringement of Intellectual Property rights against Autoliv ASP, Inc. and
Delphi Corporation pending in the United States District Court for the Eastern
District of Michigan;
(f) the capital stock, membership interests or other equity interests of
any domestic Subsidiaries (each a "Non-Transferred Subsidiary") of any Seller;
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(g) all intercompany receivables of Sellers and all other accounts
receivable of Sellers described in Schedule 2.2(g), other than receivables owed
by a Transferred Subsidiary to a Seller;
(h) all cash and cash equivalents of Sellers, except for any Supplier
Deposit; and
(i) each Seller's rights, claims and Actions against any other Seller or
any Affiliate of any other Seller listed or described in Schedule 2.2(i).
2.3 ASSUMED LIABILITIES. Upon the terms and subject to the conditions of
this Agreement, on the Closing Date, Buyer shall execute and deliver to Sellers
the Assignment and Assumption Agreement pursuant to which Buyer shall assume and
agree to discharge, when due (in accordance with their respective terms and
subject to the respective conditions thereof), the following Liabilities
(without duplication) existing as of immediately prior to the Closing
(collectively the "Assumed Liabilities") and no others:
(a) all obligations and liabilities of any Seller under the Seller
Agreements that arise on or after the Closing Date or arise prior to the Closing
Date to the extent requiring performance after the Closing Date, but excluding
any such obligations or liabilities arising because of any breach or
nonperformance of such Seller Agreements prior to Closing;
(b) all liabilities for which Buyer is liable pursuant to Section 8.2;
(c) all liabilities in respect of Taxes for which Buyer is liable pursuant
to Section 8.1;
(d) all post-petition Trade Payables of the Sellers not to exceed $23
million;
(e) all liabilities that arise after the Closing Date from or are related
to Buyer's conduct of the Business, use of the Purchased Assets, sale of any
products manufactured and/or sold by Buyer and/or delivery of services by Buyer;
(f) all obligations of the Purchaser as defined in the KERP; and
(g) all general unsecured claims listed on Schedule 2.3(g) against and
administrative expenses of the Deluxe Entities from the Bankruptcy Proceedings
to the extent allowed (except claims or causes of action that have been or could
be brought by or on behalf of the estates of the Venture Entities or their
Affiliates), subject to all defenses to any such challenges, including the
Buyer's right to contest the Venture Entities' or their Affiliates' standing to
assert any such challenges.
2.4 EXCLUDED LIABILITIES. Buyer shall not assume and shall not be obligated
to assume or be obliged to pay, perform or otherwise discharge any Liability of
any Seller, and Sellers shall be solely and exclusively liable with respect to
all Liabilities of Sellers, other than the Assumed Liabilities (collectively the
"Excluded Liabilities").
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2.5 ASSIGNMENTS; CURE AMOUNTS. Sellers shall transfer and assign all Seller
Agreements to Buyer, and Buyer shall assume all Seller Agreements from the
Sellers, as of the Closing Date pursuant to Section 365 of the Bankruptcy Code
and the Final Sale Order. In connection with such assignment and assumption,
Sellers shall provide for cure of all non-monetary defaults and Buyer shall cure
any monetary defaults arising under such Seller Agreements to the extent
required by Section 365(b) of the Bankruptcy Code. Within ninety days after the
Closing Date, Buyer may, in its discretion by giving written notice to Sellers,
assume any Contract identified in such notice, and Sellers shall transfer and
assign such Contract to Buyer, and Buyer shall assume such Contracts so
identified and shall cure any monetary defaults arising under such Contracts to
the extent required by Section 365(b) of the Bankruptcy Code. The cure amount
under any Seller Agreement shall be an amount determined by Buyer based upon the
books and records of Sellers; provided, however, if any non-debtor party to such
Seller Agreement disputes such amount, the cure amount for such Seller Agreement
shall be the amount determined by the Bankruptcy Court.
In the case of licenses, certificates, approvals, authorizations,
Contracts and other commitments included in the Purchased Assets (a) that cannot
be transferred or assigned effectively without the consent of third parties,
which consent has not been obtained prior to the Closing (after giving effect to
the Sale Order and the Bankruptcy Code), Sellers shall, subject to any approval
of the Bankruptcy Court that may be required, reasonably cooperate with Buyer,
at the cost and expense of Sellers, in endeavoring to obtain such consent, and
if any such consent is not obtained, Sellers shall, subject to any approval of
the Bankruptcy Court that may be required, reasonably cooperate with Buyer, in
all reasonable respects and at Sellers' cost and expense, to provide to Buyer
the benefits thereof in some other manner, or (b) that are otherwise not
transferable or assignable (after giving effect to the Final Sale Order and the
Bankruptcy Code), Sellers shall, subject to any approval of the Bankruptcy Court
that may be required, reasonably cooperate with Buyer, at the cost and expense
of Sellers, to provide to Buyer the benefits thereof in some other manner
(including the exercise of the rights of Sellers thereunder), provided that
Sellers shall not be required to expend unreasonable amounts pursuant to clauses
(a) or (b) of this paragraph.
ARTICLE III
PURCHASE PRICE
3.1 PURCHASE PRICE. The purchase price (the "Purchase Price") for the
purchase, sale, assignment and conveyance of Sellers' right, title and interest
in, to and under the Purchased Assets shall be:
(a) cash in the amount of the Exit Cash Requirement; plus
(b) cash in the amount necessary to pay the 506(c) Advance (as defined in
the Settlement Agreement), plus
(c) a Credit Bid, of $500,000 of the Prepetition Obligations (as defined in
the Settlement Agreement), plus
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(d) the amount of cash necessary to provide to any Senior Lenders who have
not contributed their Prepetition Obligations a percentage cash recovery equal
to (x) the aggregate Prepetition Obligations of the Senior Lenders who have
contributed their Prepetition Obligations that are included in the Credit Bid,
divided by (y) the aggregate Prepetition Obligations of the Senior Lenders who
have contributed their Prepetition Obligations, which cash shall be paid on
behalf of Sellers directly to the Agent pursuant to the Sale Order for the
benefit of the Senior Lenders, as their interests may appear, plus
(e) the Assumed Liabilities, including cash, if any, required to be paid at
the Closing (i) pursuant to the KERP, and (ii) for pre-petition trade payables
of the Deluxe Entities as set forth in Schedule 2.3(g), plus
(f) cure costs pursuant to Section 2.5.
3.2 ALLOCATION OF PURCHASE PRICE. Within one hundred eighty days after the
Closing, Buyer shall deliver to Sellers for Sellers' review and approval
allocation schedule(s) (the "Allocation Schedule(s)") allocating the Purchase
Price and the Assumed Liabilities that are liabilities for federal income Tax
purposes on a dollar basis among the Purchased Assets. The Allocation
Schedule(s) shall be reasonable and shall be prepared in accordance with Section
1060 of the Code and the regulations thereunder. Sellers agree that, following
their approval of the Allocation Schedule(s), such approval not to be
unreasonably withheld, Sellers shall sign the Allocation Schedule(s) and return
an executed copy thereof to Buyer within ten days after receiving the Allocation
Schedule(s) from Buyer. Buyer, on the one hand, and Sellers, on the other hand,
each agrees to file IRS Form 8594, and all Tax Returns, in accordance with the
Allocation Schedule(s). Buyer, on the one hand, and Sellers, on the other hand,
each agrees to provide the other promptly with any other information required to
complete Form 8594.
ARTICLE IV
CLOSING
4.1 CLOSING DATE. Upon the terms and subject to the satisfaction of the
conditions contained in Article IX, the closing of the sale of the Purchased
Assets and the assumption of the Assumed Liabilities contemplated hereby (the
"Closing") shall take place at a mutually agreed upon location at 10:00 A.M.
(local time) no later than the fifth Business Day following the date on which
the conditions set forth in Article IX have been satisfied (other than the
conditions with respect to actions the respective parties hereto will take at
the Closing itself) or, to the extent permitted, waived in writing, or at such
other place or time as Buyer and Sellers may mutually agree. The date and time
at which the Closing actually occurs is hereinafter referred to as the "Closing
Date."
4.2 PAYMENT ON THE CLOSING DATE. Subject to fulfillment or waiver (if
permissible) of the conditions set forth in Article IX, at Closing Buyer shall
pay Sellers an amount in cash equal to the cash portion of the Purchase Price
provided for in Sections 3.1(a) and (c) by wire transfer of immediately
available funds to the account in the United States specified by Sellers in
writing to Buyer at least three business days prior to the Closing.
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4.3 BUYER'S ADDITIONAL DELIVERIES. At or prior to the Closing, Buyer shall
deliver to Sellers all the following:
(a) copies of Buyer's Certificate of Formation, certified as of a recent
date by the Secretary of State of the State of Delaware;
(b) certificate of good standing of Buyer issued as of a recent date by the
Secretary of State of the State of Delaware;
(c) certificate of an authorized officer of Buyer, dated the Closing Date,
in form and substance reasonably satisfactory to Sellers, as to (i) no
amendments to the Certificate of Formation of Buyer since the date of the
certified Certificate of Formation delivered pursuant to Section 4.3(a); (ii)
the resolutions of the Board of Managers of Buyer authorizing the execution and
performance of this Agreement and the Ancillary Documents to which Buyer is a
party and the transactions contemplated hereby and thereby; and (iii) incumbency
and signatures of the officers of Buyer executing this Agreement and such
Ancillary Documents;
(d) the Assignment and Assumption Agreement duly executed by Buyer; and
(e) such other assignments and other good and sufficient instruments of
assumption and transfer, in form reasonably satisfactory to Sellers, as Sellers
may reasonably request to transfer and assign the Assumed Liabilities to Buyer.
4.4 SELLERS' DELIVERIES. At or prior to the Closing, Sellers shall deliver
to Buyer all the following:
(a) the Bill of Sale, Deeds and Assignment and Assumption Agreement duly
executed by Sellers;
(b) instruments of assignment of the Patents (the "Assignment of Patents"),
Trademarks (the "Assignment of Trademarks"), Copyrights (the "Assignment of
Copyrights") and Domain Names (the "Assignment of Domain Names") that are
included in the Purchased Assets, if any, duly executed by Sellers, in form for
recordation with the appropriate Governmental Authorities, substantially in the
form of Exhibits E, F, G, and H, respectively, and any other assignments or
instruments with respect to any Intellectual Property included in the Purchased
Assets for which an assignment or instrument is required to assign, transfer,
convey and deliver such assets to Buyer;
(c) certified copy of the Sale Order;
(d) certificates or other instruments representing all of the shares or
other equity interests of the Transferred Subsidiaries accompanied by stock
powers duly executed in blank and otherwise in form reasonably satisfactory to
Buyer for transfer of the Transferred Subsidiaries;
(e) certificates executed by each Seller, in the form prescribed under
Treasury Regulation Section 1.1445-2(b), that such Seller is not a foreign
person within the meaning of Section 1445(f)(3) of the Code; and
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(f) such other bills of sale, deeds, endorsements, assignments and other
good and sufficient instruments of conveyance and transfer, in form reasonably
satisfactory to Buyer, as are necessary or otherwise customary to vest in Buyer
all the right, title and interest of Sellers in, to or under any or all the
Purchased Assets and other transfer tax forms, affidavits and certificates
customarily delivered in connection therewith.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLERS
As used in this Article V, references to Transferred Subsidiary
include any Subsidiary of a Transferred Subsidiary. As an inducement to Buyer to
enter into this Agreement and to consummate the transactions contemplated
hereby, each Seller jointly and severally represents and warrants to Buyer and
agrees as follows:
5.1 ORGANIZATION OF SELLERS. Each Seller is a corporation or a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Michigan. Each Seller is duly qualified to transact
business as a foreign corporation or limited liability company and is in good
standing in each of the jurisdictions in which the ownership or leasing of its
properties or the conduct of its businesses requires such qualification, except
where failure to so qualify or be in good standing would not reasonably be
expected to have a Material Adverse Effect. Each Seller has full corporate or
limited liability company power (as the case may be) and authority to own or
lease and to operate and use the Purchased Assets and to carry on the Business
as now conducted. Each Transferred Subsidiary is duly organized and validly
existing under the laws of its jurisdiction of incorporation or formation. Each
Transferred Subsidiary has full power and authority to own its properties and
assets and to carry on the Business as now conducted.
5.2 SUBSIDIARIES AND INVESTMENTS. Except as set forth in Schedule 5.2,
Sellers do not, directly or indirectly, own, of record or beneficially, any
outstanding voting securities, membership interests or other equity interests in
any Person. All outstanding voting securities, membership interests or other
equity interests of each Transferred Subsidiary are 100% owned by Sellers and
after Closing, Buyer shall own, free and clear of all Encumbrances and
Interests, all outstanding voting securities and other equity interests of each
Transferred Subsidiary.
5.3 AUTHORITY OF SELLERS. (a) Each Seller has full power and authority to
execute, deliver and, subject to the entry of the Sale Order, perform this
Agreement and each of the Ancillary Documents to which each Seller is a party.
The execution, delivery and performance of this Agreement and such Ancillary
Documents by each Seller have been duly authorized and approved by each Seller's
board of directors (or similar governing body), is in accordance with the
Bankruptcy Code and, subject to the entry of the Final Sale Order, does not
require any authorization or consent of any Seller's shareholders or members
that has not been obtained. This Agreement has been duly authorized, executed
and delivered by Sellers and, subject to the entry of the Final Sale Order, is
the legal, valid and binding obligation of Sellers enforceable in accordance
with its terms, and each of the Ancillary Documents to which each Seller is a
party has been duly authorized by Sellers and upon execution and delivery by
Sellers and subject to the
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entry of the Final Sale Order, will be a legal, valid and binding obligation of
Sellers enforceable in accordance with its terms.
(b) Subject to receipt of the Required Consents and the Third Party
Consents, neither the execution and delivery of this Agreement or any of the
Ancillary Documents or the consummation of any of the transactions contemplated
hereby or thereby nor compliance with or fulfillment of the terms, conditions
and provisions hereof or thereof will conflict with, result in a breach of the
terms, conditions or provisions of, or constitute a default or an event of
default, or permit the acceleration of any liability or obligation, under (1)
any charter (or similar governing instrument) or Bylaws (or similar governing
document) of any Seller or any Transferred Subsidiary, (2) any Governmental
Permits, (3) any Court Order to which any Seller or any Transferred Subsidiary
is a party or any of the Purchased Assets is subject or by which any Seller or
any Transferred Subsidiary is bound, (4) any Requirements of Law affecting
Sellers or any Transferred Subsidiary or the Purchased Assets, or (5) any Seller
Agreement listed or described on Schedule 2.1(e) on the date hereof.
5.4 REAL PROPERTY. (a) Schedule 5.4(a) lists, as of the date of this
Agreement, all real property which is owned by any Seller and used in connection
with the Business (collectively, the "Owned Real Property").
(i) Sellers have received all Governmental Permits which are necessary
or appropriate in connection with Sellers' occupancy, ownership or leasing
of the Owned Real Property and the present use of the Owned Real Property
that constitutes a Purchased Asset does not violate the Governmental
Permits applicable thereto, except where the failure to receive, or
violation of, a Governmental Permit would not reasonably be expected to
have a Material Adverse Effect.
(ii) No Seller has received written notice or otherwise has knowledge
of any pending or threatened (A) condemnation, eminent domain,
expropriation or similar proceeding affecting the Owned Real Property that
constitutes a Purchased Asset, (B) proceeding to change the zoning
classification of any portion of the Owned Real Property that constitutes a
Purchased Asset or (C) imposition of any special assessments for public
betterments affecting the Owned Real Property that constitutes a Purchased
Asset, which in any case would reasonably be expected to have a Material
Adverse Effect.
(iii) To Sellers' knowledge, the Owned Real Property that constitutes
a Purchased Asset and the present uses of such Owned Real Property by
Sellers are in compliance with, and not in default under or in violation
of, any building, zoning, land use, public health, public safety, sewage,
water, sanitation or other comparable Requirements of Law, except for such
noncompliance, default or violation that would not reasonably be expected
to have a Material Adverse Effect.
(b) Schedule 5.4(b) lists, as of the date of this Agreement, all leases or
other occupancy agreements (collectively, "Leases") of real property used in
connection with the Business (the "Leased Real Property"). True, complete and
correct copies of the Leases, including any amendments thereto, are available in
the Electronic Data Room or have been delivered to Buyer by Sellers.
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(c) Schedules 5.4(a) and 5.4(b) list all of the real property used in
connection with the Business.
(d) Except as would not reasonably be expected to have a Material Adverse
Effect:
(i) The Sellers and each of the Transferred Subsidiaries have all
Environmental Permits as are necessary for the lawful operation of the
Business.
(ii) The ongoing activities of the Business are in compliance with all
terms and conditions of the Environmental Permits, are in compliance with,
and are not subject to any Order with respect to, any Environmental Laws
and none of the Sellers or Transferred Subsidiaries has received notice of,
or is aware of facts in connection with the activities of the Business that
could constitute, a violation or claim under any Environmental Laws.
(iii) There have been no Releases of any Hazardous Substances at, on
or under any of the properties owned or used by the Sellers or the
Transferred Subsidiaries in the conduct of the Business, and to the
knowledge of Sellers, none of such properties has been used by any Person
as landfill or storage, treatment or disposal site for any type of
Hazardous Substance or non-hazardous solid wastes as defined under RCRA.
(iv) The Sellers and Transferred Subsidiaries have not voluntarily
assumed any environmental liabilities affecting any of the Owned Real
Property that constitutes a Purchased Asset by Contract with any party
other than pursuant to this Agreement.
(v) There are no claims, suits or proceedings by any employee pending
or, to the knowledge of any of the Sellers, threatened against any of the
Sellers or Transferred Subsidiaries that are premised on the exposure to
asbestos or asbestos-containing material in any of the Owned Real Property
that constitutes a Purchased Asset.
(vi) To the knowledge of Sellers, the storage tanks that presently
exist on, at or under any of the Owned Real Property that constitutes a
Purchased Asset have been operated and maintained in accordance with all
Environmental Laws and none of them is Releasing any Hazardous Substance.
(vii) No Encumbrance has been imposed or asserted on any Owned Real
Property that constitutes a Purchased Asset by any Governmental Authority
or other Person in connection with any Environmental Law.
(viii) All material documents, records and information in the
possession of the Sellers concerning the condition of the Environment at
any of the Owned Real Property that constitutes a Purchased Asset, whether
generated by the Sellers or Transferred Subsidiaries or others, including
environmental audits and environmental site assessments, are available in
the Electronic Data Room or have been delivered to Buyer by Sellers.
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5.5 TITLE TO PROPERTY. Immediately prior to Closing, Sellers will have,
and, upon delivery to Buyer on the Closing Date of the instruments of transfer
contemplated by Section 4.4, and subject to the terms of the Final Sale Order,
Sellers will thereby transfer to Buyer, good and marketable title to, or, in the
case of property leased or licensed by the Sellers, a valid leasehold or
licensed interest in, all of the Purchased Assets, free and clear of all
Encumbrances and Interests, except (a) as set forth on Schedule 5.5, (b)
Permitted Encumbrances and (c) the Assumed Liabilities.
5.6 TAXES. Except as set forth on Schedule 5.6, the Sellers and the
Transferred Subsidiaries have (i) each timely filed all material Tax Returns
required to be filed with the appropriate Governmental Authorities in all
jurisdictions in which such Tax Returns are required to be filed (taking into
account any extension of time to file granted or to be obtained on behalf of the
Sellers and its Subsidiaries), which were complete and accurate in all material
respects; and (ii) all Taxes shown to be payable on such Tax Returns have been
paid. Except as set forth on Schedule 5.6, on the date hereof, (i) no material
examination of any such Tax Return of the Sellers or any Transferred Subsidiary
is currently in progress by any Governmental Authority; (ii) no material
adjustment has been proposed in writing with respect to any such Tax Returns for
the last five (5) fiscal years by any Governmental Authority; (iii) there are no
waivers in force extending the statutory period of limitation applicable to any
such Tax Return of the Sellers or any Transferred Subsidiary; and (iv) no
material claim has been made in writing within the last five (5) years by any
Governmental Authority in a jurisdiction where the Sellers or any Transferred
Subsidiary does not file Tax Returns that it is or may be subject to Taxes by
that jurisdiction.
5.7 ABSENCE OF CERTAIN DEVELOPMENTS. Except as required by law or GAAP,
since the Reference Date:
(a) the Business has been conducted by the Sellers and the Transferred
Subsidiaries in the ordinary course of the Business;
(b) there have not occurred any changes, effects or circumstances
constituting, individually or in the aggregate, a Material Adverse Effect; and
(c) none of the Sellers nor any Transferred Subsidiary has taken any
actions described in Section 7.5(b).
5.8 SELLERS' INTELLECTUAL PROPERTY.
(a) Schedule 5.8(a) contains a complete list of (i) all issued Patents, and
all pending applications for Patents, owned by a Seller; (ii) all registered
Trademarks, and all pending applications for Trademarks, owned by a Seller;
(iii) all registered Copyrights, and all pending applications for Copyrights,
owned by a Seller; and (iv) all Domain Names owned by a Seller.
(b) Schedule 5.8(b) contains a complete list of all material licenses,
sublicenses, agreements or instruments involving the Intellectual Property of a
Seller including (i) all licenses by a Seller to any Person of any Intellectual
Property; and (ii) all licenses by any other Person to a Seller of any
Intellectual Property (except with respect to generally available
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"off-the-shelf" Software) (each a "License"). Except as otherwise disclosed in
Schedule 5.8(b): (i) each License is a valid and binding agreement enforceable
in accordance with its terms; (ii) with respect to each License, there is no
default (or event that with the giving of notice or passage of time would
constitute a default) by a Seller, or to the Sellers' knowledge, the other party
thereto, except for defaults that would not reasonably be expected to have a
Material Adverse Effect; and (iii) there are no pending and, to the Sellers'
knowledge, no threatened claims with respect to any License that, if decided
adversely, would reasonably be expected to have a Material Adverse Effect.
(c) Except as disclosed on Schedule 5.8(c), and except as would not
reasonably be expected to have a Material Adverse Effect, (i) no Seller has been
alleged to have, nor to Sellers' knowledge has, a Seller infringed upon,
misappropriated or otherwise violated any intellectual property or other right
of another Person, and (ii) there are no pending, and to the Sellers' knowledge,
threatened claims or Actions contesting or challenging the Intellectual Property
or Sellers' use of the Intellectual Property owned by another Person, or
asserting that the conduct of the Business of any of the Sellers as conducted
prior to Closing, infringes, misappropriates or otherwise violates any
intellectual property or other right of any Person. To Sellers' knowledge, no
third party, including any current or former officer, director, employee or
contractor of a Seller, is infringing upon, misappropriating or otherwise
violating Sellers' rights to the Intellectual Property.
5.9 EMPLOYMENT MATTERS.
(a) The Sellers' and Transferred Subsidiaries' relations with their
employees are good and no Seller has any reasonable basis to believe that the
consummation of the transactions contemplated by this Agreement would reasonably
be expected to have a Material Adverse Effect on relations with the Sellers' or
Transferred Subsidiaries' employees.
(b) The Sellers and the Transferred Subsidiaries are in compliance in all
material respects with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours.
(c) Neither the Sellers nor any of the Transferred Subsidiaries are engaged
in any unfair labor practice or other unlawful employment practice. Except as
disclosed on Schedule 5.9(c), there are no unfair labor practice charges or
other employee-related complaints or claims against the Sellers or the
Transferred Subsidiaries pending or, to the knowledge of the Sellers, threatened
before the National Labor Relations Board, the Equal Employment Opportunity
Commission, the Occupational Safety and Health Review Commission, the Department
of Labor or any other Governmental Authority by or concerning the employees,
independent contractors or consultants of the Sellers and the Transferred
Subsidiaries, that if decided adversely would reasonably be expected to have a
Material Adverse Effect. Except as disclosed on Schedule 5.9(c), neither the
Sellers nor the Transferred Subsidiaries have (i) been notified by any
Governmental Authority of any alleged violation by the Sellers or the
Transferred Subsidiaries of applicable law that remains unresolved respecting
employment, employment practices or terms and conditions of employment, or (ii)
received any notice of the intent of any Government Authority responsible for
the enforcement of labor or employment
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laws to conduct an investigation of the Sellers or any of the Transferred
Subsidiaries, and, to the knowledge of the Sellers, no such investigation is in
progress.
(d) Except as set forth on Schedule 5.9(d), neither the Sellers nor any
Transferred Subsidiary is a party to any labor or collective bargaining
agreement, and (i) no other such agreement is currently being negotiated, (ii)
neither the Sellers nor any Transferred Subsidiary is under any obligation to
negotiate any such agreement, and (iii) as related to the Sellers and the
Transferred Subsidiaries, no labor organization or group of employees of the
Sellers or the Transferred Subsidiaries has made a pending demand for
recognition or certification, there are no existing organization drives, and
there are and have been no representation or certification proceedings or
petitions seeking a representation proceeding, with the National Labor Relations
Board or any other labor relations tribunal or authority, nor have any such
demands, proceedings or petitions been brought or filed or, to the knowledge of
Sellers, threatened to be brought or filed within the past three (3) years.
(e) There are no strikes, slowdowns or work stoppages pending or, to the
knowledge of the Sellers, threatened with respect to the employees of the
Sellers or the Transferred Subsidiaries, nor has any such strike, slowdown or
work stoppage occurred or, to the knowledge of the Sellers, been threatened
within three (3) years prior to the date hereof.
(f) Neither the Sellers nor the Transferred Subsidiaries have promised or
represented or distributed any written material to any of their management or
other key employees that any of such persons will be employed or engaged
subsequent to the date hereof or the Closing Date.
(g) All material levies, assessments and penalties made against the Sellers
or the Transferred Subsidiaries pursuant to all applicable workers compensation
legislation as of the date hereof have been paid by the Sellers and the
Transferred Subsidiaries and the Sellers and the Transferred Subsidiaries have
not been reassessed under any such legislation.
5.10 SUFFICIENCY OF ASSETS. The Purchased Assets are sufficient to carry on
the Business substantially in the manner in, and to the extent to, which it is
presently conducted.
5.11 COMPLIANCE WITH LAWS; GOVERNMENTAL PERMITS.
(a) The Sellers and each of the Transferred Subsidiaries are, and have
been, in compliance with all Requirements of Law applicable to their respective
operations or the Business, except where the failure to be in compliance would
not reasonably be expected to have a Material Adverse Effect. None of the
Sellers nor any Transferred Subsidiary has received any written notice from any
Governmental Authority with respect to, or been charged with, the violation of
any Requirements of Law, except in each case where the violation would not
reasonably be expected to have a Material Adverse Effect.
(b) The Sellers and the Transferred Subsidiaries currently (to the extent
applicable) have all Governmental Permits which are required for the operation
of the Business as presently conducted and all such Governmental Permits are in
full force and effect, except in each case where such failure would not
reasonably be expected to have a Material Adverse Effect. None of the Sellers
nor any Transferred Subsidiary is in default or violation (and no
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event has occurred which, with notice or the lapse of time or both, would
constitute a default or violation) of any Governmental Permit to which it is a
party except where such default or violation would not reasonably be expected to
have a Material Adverse Effect.
(c) The representations and warranties set forth in this Section 5.11 shall
not be applicable to Environmental Laws and Environmental Permits, which are
covered by Section 5.4(d), or Requirements of Law that are applicable to the
Owned Real Property or to employment matters, which are covered by Sections
5.4(a)(iii) and 5.9, respectively.
5.12 CONTRACTS. Except for the Contracts provided in the Electronic Data
Room or otherwise delivered to Buyer by Sellers, Sellers and the Transferred
Subsidiaries are not party to any Contract that (i) was not entered into in the
ordinary course of the Business, (ii) is a material purchase contract or
purchase commitment of the Business that has a remaining term greater than
twelve (12) months (other than those which may be terminated on ninety (90) days
or less notice without additional cost or penalty) or is in a quantity or amount
in excess of the normal, ordinary, usual and current requirements for the
operation of the Business or are in excess of market prices generally available
to purchasers of similar quantities, or (iii) would reasonably be expected to
have a Material Adverse Effect.
5.13 FINANCIAL STATEMENTS.
(a) Schedule 5.13 contains true and complete copies of the Reference Date
Balance Sheet, (the "Financial Statements").
(b) The Financial Statements have been prepared from the books and records
of the Sellers and the Transferred Subsidiaries and are true and accurate in all
material respects and fairly present the financial condition of Sellers and the
Transferred Subsidiaries as of the Reference Date.
(c) Sellers have made available to Buyer prior to the Closing Date accurate
and complete copies of all the books of account and accounting records of such
Sellers', all of which contain in all material respects true, correct and
complete entries with respect to the assets and liabilities of such Seller.
5.14 NO UNDISCLOSED LIABILITIES. Neither the Sellers nor any of the
Transferred Subsidiaries have any Liabilities, except Liabilities (i) in the
aggregate adequately provided for in the Reference Date Balance Sheet; (ii)
incurred in the ordinary course of the Business and not required under GAAP to
be reflected on the Reference Date Balance Sheet; (iii) incurred in connection
with the Loan Agreements; (iv) incurred since the Reference Date in the ordinary
course of the Business consistent with past practice or as required by
applicable Requirements of Law; (v) incurred in connection with this Agreement
or the transactions contemplated hereby; or (vi) which individually or in the
aggregate (not including Liabilities referred to in clauses (i) through (v)
above) would not reasonably be expected to have a Material Adverse Effect.
5.15 LITIGATION. Except as set forth on Schedule 5.15, there are no Actions
pending or, to the knowledge of the Sellers, threatened against the Sellers or
the Transferred Subsidiaries or to which the Sellers or the Transferred
Subsidiaries are otherwise a party, by or before any Governmental Authority,
which would reasonably be expected to have a Material Adverse
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Effect. Except as set forth on Schedule 5.15, the Sellers and the Transferred
Subsidiaries are not subject to any Order of any Governmental Authority except
to the extent the same would not reasonably be expected to have a Material
Adverse Effect.
5.16 ACCOUNTS RECEIVABLE. All accounts and notes receivable reflected on
the Reference Date Balance Sheet and all accounts and notes receivable arising
subsequent to the Reference Date, have arisen in the ordinary course of the
Business, represent or will represent legal, valid, binding and enforceable
obligations to a Seller and, subject only to reserves for bad debts established
in a manner consistent with past practice, have been or (to the Sellers'
knowledge) will be collected, or are or (to the Sellers' knowledge) will be
collectible, in the aggregate recorded amounts thereof in accordance with their
terms and, to the Sellers' knowledge, will not be subject to any contests,
claims, counterclaims or setoffs that would reasonably be expected to have a
Material Adverse Effect.
5.17 EQUIPMENT. All of the fixtures and other improvements to the Owned
Real Property and Leased Real Property included in the Purchased Assets
(including any Facilities) and all of the tangible personal property other than
Inventory included in the Purchased Assets are in good working order and repair
(ordinary wear and tear excepted), except to the extent as would not reasonably
be expected to have a Material Adverse Effect.
5.18 INVENTORY. All Inventory of any Seller or any Transferred Subsidiary
consists of items of a quantity and quality historically useable or saleable in
the normal course of business, except for items of obsolete and slow-moving
material and materials which are below standard quality that are not material to
the financial condition or operation of the Business. Inventory possessed by any
Seller or any Transferred Subsidiary and owned by others, including goods
already sold, is not carried on the Reference Date Balance Sheet as an asset.
Inventory on hand as of the date hereof was purchased in the ordinary course of
the Business at a cost not exceeding market prices prevailing at the time of
purchase except to the extent such purchases would not reasonably be expected to
have a Material Adverse Effect.
5.19 AFFILIATE TRANSACTIONS. Except as disclosed on Schedule 5.19, in the
Electronic Data Room or in documents delivered to Buyer by Seller, no Affiliate
of any Seller (a) is an officer, director, employee, consultant, competitor,
creditor, debtor, customer, distributor, supplier or vendor of any Seller or any
Transferred Subsidiary, (b) is a party to any Contract with any Seller or any
Transferred Subsidiary, other than Contracts entered into in the ordinary course
of the Business among the Sellers and the Transferred Subsidiaries, (c) has any
Action against any Seller or any Transferred Subsidiary, or (d) has a loan
outstanding from any Seller or any Transferred Subsidiary.
5.20 NO FINDER. The Sellers have engaged the firm of Rothschild Inc. to
assist them in connection with the matters contemplated by this Agreement and
will be responsible for the fees and expenses of such firm. Other than as
described in the preceding sentence, no broker, investment banker, financial
advisor or other Person is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated by this Agreement, based upon arrangements made by or on behalf of
any Seller or any of their respective Affiliates, except that Jeffries & Co. may
assert a claim under an engagement agreement that provides a fee to be paid to
it under certain circumstances.
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5.21 DISCLAIMER.
SUBJECT ONLY TO THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS
ARTICLE V, BUYER IS ACQUIRING THE PURCHASED ASSETS AND THE BUSINESS "AS-IS,
WHERE -IS AND WITH ALL FAULTS", AND NO SELLER MAKES (AND SELLERS EXPRESSLY
DISCLAIM) ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH
RESPECT TO THE PURCHASED ASSETS OR THE BUSINESS, INCLUDING WITHOUT
LIMITATION IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to Sellers to enter into this Agreement and to
consummate the transactions contemplated hereby, Buyer hereby represents and
warrants to Sellers and agrees as follows:
6.1 ORGANIZATION OF BUYER. Buyer is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has full limited liability company power and authority to own or
lease and to operate and use its properties and assets and to carry on its
business as now conducted.
6.2 AUTHORITY OF BUYER. (a) Buyer has full limited liability company power
and authority to execute, deliver and perform this Agreement and all of the
Ancillary Documents to which it is a party. The execution, delivery and
performance of this Agreement and such Ancillary Documents by Buyer have been
duly authorized and approved by Buyer's Board of Managers and do not require any
further authorization or consent of Buyer or its members. This Agreement has
been duly authorized, executed and delivered by Buyer and is the legal, valid
and binding agreement of Buyer enforceable against Buyer in accordance with its
terms, and each Ancillary Document to which Buyer is a party has been duly
authorized by Buyer and upon execution and delivery by Buyer will be a legal,
valid and binding obligation of Buyer enforceable against Buyer in accordance
with its terms.
(b) Subject to the receipt of the Required Consents (other than the Third
Party Consents), neither the execution and delivery of this Agreement or any of
such Ancillary Documents or the consummation of any of the transactions
contemplated hereby or thereby nor compliance with or fulfillment of the terms,
conditions and provisions hereof or thereof will:
(i) conflict with, result in a breach of the terms, conditions or
provisions of, or constitute a default, an event of default or an event of
default under (1) the Certificate of Formation or Operating Agreement of
Buyer, (2) any Court Order to which Buyer is a party or by which it is
bound or (3) any Requirements of Law affecting Buyer; or
(ii) require the approval, consent, authorization or act of, or the
making by Buyer of any declaration, filing or registration with, any
Person, other than filings with the Bankruptcy Court or under the HSR Act
or other anti-trust or competition laws.
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6.3 NO FINDER. Neither Buyer nor any Person acting on its behalf has paid
or become obligated to pay any fee or commission to any broker, finder or
intermediary for or on account of the transactions contemplated by this
Agreement for which any Seller Group Member is liable, and Buyer shall hold
harmless and indemnify Seller Group Members from any claims with respect to any
such fees or commissions.
6.4 PAYMENT OF PURCHASE PRICE. Buyer has immediately available funds, or
the ability to obtain immediately available funds, for purposes of payment of
the entire cash portions of the Purchase Price.
ARTICLE VII
ACTION PRIOR TO THE CLOSING DATE
The respective parties hereto covenant and agree to take the following
actions between the date hereof and the Closing Date:
7.1 INVESTIGATION OF THE BUSINESS BY BUYER. (a) Sellers shall afford and
cause the Business to afford to the authorized Representatives of Buyer access
during normal business hours to the offices, properties, employees, outside
accountants, business, agreements and other documentation and financial records
(including computer files, retrieval programs and similar documentation) with
respect to the Business, Purchased Assets and Assumed Liabilities to the extent
Buyer shall deem necessary or desirable, and shall permit Buyer and its
Representatives to make copies of such materials. Seller shall furnish to Buyer
or its authorized Representatives such additional information concerning the
Purchased Assets, the Business and the operations of the Business and Assumed
Liabilities as shall be reasonably requested, including all such information as
shall be necessary to enable Buyer or its Representatives to (i) verify the
accuracy of each Seller's representations and warranties contained in this
Agreement, (ii) verify that the covenants of each Seller contained in this
Agreement have been complied with, (iii) determine whether the conditions set
forth in Article IX have been satisfied and (iv) assist Buyer in the
determination of cure amounts pursuant to Section 2.5. The Sellers shall use its
reasonable best efforts to cause their outside accountants and outside counsel
to cooperate with Buyer in its investigation. No investigation made or
discussion had by Buyer or its Representatives hereunder shall affect the
representations and warranties of Sellers hereunder.
(b) To the extent permitted by applicable law, as requested by Buyer from
time to time, Sellers shall use reasonable best efforts to cooperate with Buyer
in connection with Buyer and Sellers contacting suppliers and customers of the
Business.
7.2 PRESERVE ACCURACY OF REPRESENTATIONS AND WARRANTIES. Each of the
parties hereto shall use its reasonable best efforts to refrain from taking any
action that would render any representation or warranty contained in Article V
or VI inaccurate as of the Closing Date. Each party shall promptly notify the
other of any Action that shall be instituted or threatened against such party to
restrain, prohibit or otherwise challenge the legality of any transaction
contemplated by this Agreement or the Ancillary Agreements.
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7.3 THIRD PARTY CONSENTS. Sellers will reasonably cooperate with Buyer to
secure, before the Closing Date, all Third Party Consents, to the extent such
consents are not provided for or satisfied by the Final Sale Order; provided
that neither Sellers nor Buyer shall have any obligation to offer or pay any
consideration in order to obtain any such consents, approvals or waivers except
for such amounts as Sellers shall be obligated to pay as condition to any such
assumption and assignment (including cure amounts) pursuant to Section 365(b) of
the Bankruptcy Code.
7.4 GOVERNMENTAL APPROVALS. (a) Subject to Section 7.4(c), as soon as
reasonably practicable, Sellers and Buyer shall each prepare and file, or cause
to be prepared and filed, any notifications required to be filed under the HSR
Act with the United States Federal Trade Commission ("FTC") and the Department
of Justice ("DOJ"), and request early termination of the waiting period under
the HSR Act. Each party shall promptly respond to any requests for additional
information in connection with such filings and shall take all other reasonable
actions to cause the waiting periods under the HSR Act to terminate or expire at
the earliest possible date after the date of filing; provided, however, that
nothing in this Section shall require Buyer to (A) incur any material liability
or obligation of any kind, or (B) agree to any sale, transfer, license, separate
holding, divestiture or other disposition of, or to any prohibition of, or to
any limitation on, the acquisition, ownership, operation, effective control or
exercise of full right of ownership of any Purchased Asset of the Business of
Seller or any of Seller's Affiliates or any asset or assets of the business of
Buyer. Buyer shall be responsible for payment of the applicable filing fee under
the HSR Act, but not Sellers' costs and expenses (including attorneys' fees and
other legal fees and expenses) associated with the preparation of Sellers'
portion of any antitrust filings. Buyer and its counsel shall be responsible for
discussions with the FTC, DOJ, and any other antitrust authorities, after
consultation and coordination with Seller and its counsel.
(b) In addition to the actions to be taken under Section 7.4(a), during the
period prior to the Closing Date, Sellers and Buyer shall act diligently and
reasonably, and shall cooperate with each other, to secure any consents and
approvals of any Governmental Authority required to be obtained by them under
non-United States anti-trust or competition laws, in order to assign or transfer
any Governmental Permits to Buyer, to permit the consummation of the
transactions contemplated by this Agreement, or to otherwise satisfy the
conditions set forth in Article IX, in each case as necessary to the extent such
consents are not provided for or satisfied by the Sale Order; provided that
Sellers shall not make any agreement or understanding affecting the Purchased
Assets or the Business (excluding the Excluded Assets or Excluded Liabilities)
as a condition for obtaining any such consents or approvals except with the
prior written consent of Buyer. During the period prior to the Closing Date,
Buyer shall act diligently and reasonably to cooperate with Sellers, to the
extent commercially reasonable, to obtain the consents and approvals
contemplated by this Section 7.4(b).
(c) Sellers and Buyer (i) shall promptly inform each other of any
communication from any Governmental Authority concerning this Agreement, the
transactions contemplated hereby, and any filing, notification or request for
approval and (ii) shall permit the other party to review in advance any proposed
written communication or information submitted to any such Governmental
Authority in response thereto. In addition, each of Sellers and Buyer shall not
agree to participate in any meeting with any Governmental Authority in respect
of any filings, investigation or other inquiry with respect to this Agreement,
the transactions
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contemplated hereby or any such filing, notification or request for approval
unless it consults with the other party in advance and, to the extent permitted
by any such Governmental Authority, gives the other party the opportunity to
attend and participate thereat, in each case to the maximum extent practicable.
Subject to any restrictions under applicable laws, rules or regulations, each of
Sellers and Buyer shall furnish the other party with copies of all
correspondence, filings and communications (and memoranda setting forth the
substance thereof) between it and its Affiliates and their respective
representatives on the one hand, and the Governmental Authority or members of
its staff on the other hand, with respect to this Agreement, the transactions
contemplated hereby (excluding documents and communications which are subject to
preexisting confidentiality agreements and to the attorney-client privilege or
work product doctrine) or any such filing, notification or request for approval.
Each of Sellers and Buyer shall also furnish the other party with such necessary
information and assistance as such other party and its Affiliates may reasonably
request in connection with their preparation of necessary filings, registration
or submissions of information to the Governmental Authority in connection with
this Agreement, the transactions contemplated hereby and any such filing,
notification or request for approval. Sellers and Buyer shall prosecute all
required requests for approval with all necessary diligence and otherwise use
their respective reasonable best efforts to obtain the grant thereof by a Final
Order as soon as possible.
7.5 OPERATIONS PRIOR TO THE CLOSING DATE. (a) Sellers shall maintain the
Purchased Assets and operate and carry on the Business only in the ordinary
course consistent with past practice except as otherwise expressly provided in
this Agreement. Consistent with the foregoing and to the extent permitted or
required by the Bankruptcy Proceedings, Sellers shall use reasonable best
efforts to continue operating the Business as a going concern, and to maintain
the business organization of the Business intact and to preserve the goodwill of
the manufacturers, suppliers, contractors, licensors, employees, customers,
distributors and others having business relations with the Business.
In connection therewith, and except for employees who Buyer notifies
Seller will not be hired by Buyer pursuant to Schedule 8.2(a), no Seller shall
(i) transfer or cause to be transferred from the Business any employee or agent
thereof, (ii) offer employment for any period on or after the Closing Date to
any such employee or agent regarding whom Buyer makes offers of employment (if
any), or (iii) otherwise attempt to persuade any such person to terminate his or
her relationship with the Business.
(b) Except (x) as otherwise expressly provided in this Agreement, or (y)
with the express written approval of Buyer, no Seller, Transferred Subsidiary or
any Subsidiary of any Transferred Subsidiary shall:
(i) make any capital expenditure in excess of $100,000 in the
aggregate with respect to the Business or enter into any Contract or
commitment therefor, except in each case in the ordinary course of Business
pursuant to existing Contracts;
(ii) enter into any Contract for or relating to the Business that
cannot be assigned to Buyer or a permitted assignee of Buyer under Section
11.6;
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(iii) enter into any Contract for the purchase of real property to be
used, or held for use in, or otherwise relating to the Business, other than
real property that is an Excluded Asset or enter into any Contract that is
for a term longer than six months that cannot be terminated by Buyer
without penalty or that is in the nature of a "requirements" Contract;
(iv) purchase, sell, lease (as lessor), transfer or otherwise dispose
of (including any transfer from the Business to any Affiliates of Sellers),
or mortgage or pledge, or impose or suffer to be imposed any Encumbrance or
Interest on (other than Permitted Encumbrances and Assumed Liabilities),
any of the Purchased Assets, other than the sale of Inventory for fair
value in the ordinary course of the Business consistent with past practice;
(v) cancel or settle any material debts owed to or material claims
held by the Business (including the settlement of any claims or litigation)
other than the compromise of customer accounts receivable in the ordinary
course of Business consistent with past practice or agree to, settle or pay
any material claim against any Seller or any Transferred Subsidiary;
(vi) enter into, or agree to enter into, any sale-leaseback
transactions;
(vii) accelerate or delay collection of any notes or accounts
receivable generated by the Business in advance of or beyond their regular
due dates, except in the ordinary course of the Business consistent with
past practice or collect or agree to collect any such receivable for less
than the amount billed therefor;
(viii) delay or accelerate payment of any account payable or other
liability of the Business beyond or in advance of its due date except in
the ordinary course of the Business consistent with past practice and
except for any such acceleration resulting from the Filings of which Buyer
is given notice by Sellers;
(ix) allow the levels of Inventory with respect to the Business to
decline below the level necessary for the continued operation of the
Business or the level customary for the Business in the ordinary course
consistent with past practice, or fail to maintain the Purchased Assets in
good condition, reasonable wear and tear excepted;
(x) institute any new, or any increase (including any increase in
coverage) in any existing, profit-sharing, bonus, incentive, deferred
compensation, severance insurance, pension, retirement, medical, hospital,
disability, welfare or other employee benefit plan with respect to
directors, officers or employees of any Seller, Transferred Subsidiary or
Subsidiary of any Transferred Subsidiary, except, solely with respect to
increases, in the ordinary course of the Business consistent with prior
practice (including, 401(k) plan increased contributions authorized by
EGTRRA);
(xi) except for employees who Buyer notifies Seller will not be
offered employment by Buyer pursuant to Schedule 8.2(a), make any change in
compensation (including salary, bonus or incentive compensation) of the
directors, officers, employees of, or independent contractors or
consultants to, any Seller, Transferred Subsidiary or
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Subsidiary of any Transferred Subsidiary, other than immaterial changes
made consistent with prior compensation practices, provided that Sellers
shall notify Buyer in writing prior to any such changes;
(xii) enter into any collective bargaining, employment, deferred
compensation, severance, consulting, independent contractor, nondisclosure,
non-competition or similar agreement (or amend any such agreement) to which
any Seller, Transferred Subsidiary or Subsidiary of any Transferred
Subsidiary is a party or involving any of their directors, officers or
employees in his or her capacity as a director, officer or employee of any
Seller, Transferred Subsidiary or Subsidiary of any Transferred Subsidiary;
(xiii) make or rescind any material election in relation to Taxes;
(xiv) declare, set aside, make or pay any dividend or other
distribution in respect of the capital stock, membership interests or other
equity interests of any of the Sellers, Transferred Subsidiaries or
Subsidiaries of the Transferred Subsidiaries, or repurchase, redeem or
otherwise acquire any outstanding shares of the capital stock, membership
interests or other securities of, or other ownership interests in, any of
the Sellers, Transferred Subsidiaries or Subsidiaries of the Transferred
Subsidiaries;
(xv) transfer, issue, sell or dispose of any shares of capital stock
or other securities of the Transferred Subsidiaries or Subsidiaries of the
Transferred Subsidiaries, or grant or exercise options, warrants, calls or
other rights to purchase or otherwise acquire shares of the capital stock
or other securities of the Sellers;
(xvi) enter into or amend any agreement or incur any commitment that
involves or may involve total annual expenditure or revenues individually
or in the aggregate in excess of $100,000;
(xvii) except pursuant to the Loan Agreements, incur any indebtedness
for borrowed money (including any intra-group borrowings), enter into any
material guarantee, indemnity or other agreement to secure any obligation
of a third party or create any Encumbrance (other than a Permitted
Encumbrance) for the benefit of a third party over any of the Purchased
Assets, except as required by Requirements of Law and except in the
ordinary course of the Business consistent with past practice;
(xviii) make any payment, or otherwise remit any monies, to any Seller
or its Affiliates for any purpose whatsoever;
(xix) incur any material Liability except in the ordinary course of
the Business consistent with past practice;
(xx) change any accounting policy or practice except in the ordinary
course of the Business;
(xxi) amend the certificate of incorporation or by-laws or comparable
organization documents of the Sellers, Transferred Subsidiaries or
Subsidiaries of the Transferred Subsidiaries in any material respect;
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(xxii) (i) modify or terminate any Seller Agreements (other than in
the ordinary course of the Business), or (ii) enter into or modify any
contract containing material penalties which would be payable as a result
of, and upon the consummation of, the transaction contemplated by this
Agreement; or
(xxiii) enter into any agreement or commitment to take any action
prohibited by this Section 7.5.
7.6 NOTIFICATION OF CERTAIN MATTERS. During the period prior to the Closing
Date, Sellers will promptly advise Buyer in writing of (i) any Material Adverse
Effect of which any of the Sellers has knowledge, or (ii) any written notice or,
to the knowledge of any of the Sellers, other communication from any third
Person alleging that the consent of such third Person is or may be required in
connection with the transactions contemplated by this Agreement.
7.7 INSURANCE. Until the Closing, Sellers shall maintain or cause to be
maintained in force (including necessary renewals thereof) insurance policies
against risk and liabilities to the extent and in the manner and at the levels
heretofore maintained by Sellers with respect to the Business and the Purchased
Assets.
ARTICLE VIII
ADDITIONAL AGREEMENTS
8.1 TAXES. (a) Sellers shall be liable for and shall pay or cause to be
paid, and pursuant to Section 8.1(c) shall reimburse Buyer for, all Taxes
(whether assessed or unassessed) applicable to the Business, the Purchased
Assets and the Assumed Liabilities, in each case attributable to periods (or
portions thereof) ending on or prior to the Closing Date, including Taxes
arising from any subpart F income, as defined in Section 952 of the Code, of a
Subsidiary attributable to such pre-Closing Date period or portions thereof.
Buyer shall be liable for and shall pay or cause to be paid, and pursuant to
Section 8.1(c) shall reimburse the applicable Seller for, all Taxes (whether
assessed or unassessed) applicable to the Business, the Purchased Assets and the
Assumed Liabilities, in each case attributable to periods (or portions thereof)
beginning after the Closing Date. For purposes of this paragraph (a), any period
beginning before and ending after the Closing Date shall be treated as two
partial periods, one ending on the Closing Date and the other beginning on the
day after the Closing Date except that Taxes (such as property Taxes) imposed on
a periodic basis shall be allocated on a daily basis.
(b) Notwithstanding Section 8.1(a), any sales Tax, use Tax, real property
transfer or gains Tax, documentary stamp Tax or similar Tax attributable to the
sale or transfer of the Purchased Assets and not exempted under the Final Sale
Order or by Section 1146(c) of the Bankruptcy Code ("Transfer Taxes") shall be
borne by Buyer. Sellers and Buyer shall use reasonable efforts and cooperate in
good faith to exempt the sale and transfer of the Purchased Assets from any such
Transfer Taxes. Sellers shall prepare and file all necessary Tax Returns or
other documents with respect to all such Transfer Taxes; provided, however, that
in the event any such Tax Return requires execution by Buyer, Sellers shall
prepare and deliver to Buyer a copy of such Tax Return at least ten days before
the due date thereof, and Buyer shall promptly execute such Tax Return and
deliver it to Sellers, which shall cause it to be filed.
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(c) Sellers or Buyer, as the case may be, shall provide reimbursement for
any Tax paid by one party all or a portion of which is the responsibility of the
other party in accordance with the terms of this Section 8.1. Within a
reasonable time prior to the payment of any said Tax, the party paying such Tax
shall give notice to the other party of the Tax payable and the portion which is
the liability of each party, although failure to do so will not relieve the
other party from its liability hereunder.
8.2 EMPLOYEES AND EMPLOYEE BENEFIT PLANS.
(a) Buyer shall offer employment to commence as of the Closing Date to all
of the employees of the Sellers and Transferred Subsidiaries other than those
employees listed on Schedule 8.2(a) (such employees who are not listed on
Schedule 8.2(a) being "Available Employees"), provided, that at any time at
least three days prior to the Closing Date, Buyer, in its discretion by written
notice to Sellers, may list additional employees on Schedule 8.2(a). Those
employees who accept Buyer's offer of employment and commence working for Buyer
on the Closing Date shall hereafter be referred to as "Transferred Employees."
For periods prior to Closing, with respect to employees, Sellers and Transferred
Subsidiaries shall retain the sole responsibility for all matters relating to
the maintenance of personnel and payroll records and the withholding and payment
of federal, state and local income and payroll Taxes. At all times, Sellers and
Transferred Subsidiaries shall retain responsibility for (i) any severance and
WARN Act liability for employees who are listed on Schedule 8.2(a) or who do not
accept Buyer's offer of employment that may be triggered as a result of any
termination of employment, and (ii) any payment that may be triggered by the
consummation of the transactions contemplated herein. Buyer shall be responsible
for any severance for Transferred Employees that may be triggered as a result of
any termination of employment after the Closing Date.
(b) Effective on the Closing Date, Buyer shall assume sponsorship of, and
Sellers shall transfer to Buyer all obligations under, and the sponsorship of,
all of Sellers' employee benefit plans and programs listed on Schedule 8.2(b),
and Sellers shall assign to Buyer and Buyer shall accept the assignment of and
assume, and all third-party agreements related thereto (such as group insurance
policies and third-party administrator agreements). In connection with the
assumption of such plans, Buyer shall assume all liability related thereto,
including but not limited to liability for claims incurred prior to the Closing
Date but unpaid as of such date, to the extent such claims are not covered by an
insurance policy. The Sellers shall have transferred to the Buyer all records in
its possession that are necessary for the Buyer to operate such plans and
programs after the Closing Date. The Buyer specifically agrees to be responsible
and assume liability for completing and timely filing the Form 5500 reports for
any such plans or programs for which a report is required for the 2004 plan year
if not heretofore filed. Notwithstanding the foregoing, Buyer shall not assume
any of Sellers' liabilities with respect to such plans or programs to the extent
they are Excluded Liabilities.
(c) Buyer will be deemed a successor employer to Sellers for COBRA
purposes, and shall be responsible for all COBRA coverage for any individual
whose COBRA qualifying event occurred on or prior to the Closing Date and who
has rights to continuation coverage under COBRA as of or on the Closing Date,
including all "M&A qualified beneficiaries" under COBRA.
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(d) Sellers shall take such actions as Buyer may request to arrange for the
individuals listed on Schedule 8.2(d) to discuss with Buyer their entering into
employment or consulting agreements with Buyer; provided that Buyer acknowledges
that Sellers have no obligation to ensure that any such individuals become
employees of Buyer. At any time at least three days prior to the Closing Date,
Buyer, in its discretion by written notice to Sellers, may list additional
individuals on Schedule 8.2(d). Except for Transferred Employees who enter into
employment agreements with the Buyer for a definite length of time, the Buyer
shall be under no obligation to continue to employ any Transferred Employee for
any period.
(e) Buyer assumes and shall pay all obligations and liabilities of the
Purchaser under and as defined in the KERP.
(f) Buyer assumes and shall pay all obligations and liabilities under the
WARN Act with respect to Transferred Employees resulting from the termination of
such employees' employment after the Closing Date. Sellers shall use best
efforts to assist Buyer in fulfilling Buyer's obligations pursuant to the WARN
Act.
(g) Buyer shall grant all Transferred Employees from and after the Closing
Date credit for all service with Sellers and their respective predecessors prior
to the Closing Date for eligibility and vesting purposes under Buyer's benefit
plans (including with respect to any vacation or severance benefits offered by
Buyer). With respect to Buyer's benefit plans that provide welfare benefits,
such plans shall, to the extent permissible, waive any exclusions or limitations
with respect to pre-existing conditions and, to the extent allowed by such
plans, waiting periods, and, to the extent allowed by such plans, shall credit
Transferred Employees with deductibles and copayments made prior to Closing for
the plan year of Buyer's plan in which the transaction occurs.
8.3 COLLECTION OF RECEIVABLES. If, after the Closing Date, Sellers shall
receive any payment from any account debtor with respect to any accounts
receivable included in the Purchased Assets, Sellers shall immediately deliver
such funds and assets to Buyer and take all steps necessary to vest title to
such funds and/or assets in Buyer. Each Seller hereby designates Buyer and its
respective officers as such Seller's true and lawful attorney-in-fact, with full
power of substitution, to execute and endorse for the benefit of Buyer all
checks, notes or other documents received by such Seller in payment of or in
substitution or exchange for any of the Purchased Assets. Each Seller hereby
acknowledges and agrees that the power of attorney set forth in the preceding
sentence in favor of Buyer is coupled with an interest, and further agrees to
execute and deliver to Buyer from time to time any documents or other
instruments reasonably requested by Buyer to evidence such power of attorney.
8.4 ADEQUATE ASSURANCES REGARDING SELLER AGREEMENTS. With respect to each
Seller Agreement, Buyer will make commercially reasonable efforts to provide
adequate assurance as required under the Bankruptcy Code of the future
performance of such Seller Agreement by Buyer. Buyer and Sellers agree that they
will promptly take all actions reasonably required to assist in obtaining a
Bankruptcy Court finding that there has been an adequate demonstration of
adequate assurance of future performance under the Seller Agreements, such as
furnishing affidavits, non-confidential financial information or other documents
or information
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for filing with the Bankruptcy Court and making Buyer's and Sellers' employees
and representatives available to testify before the Bankruptcy Court.
8.5 PERFORMANCE UNDER SELLER AGREEMENTS. Subject to the terms and
conditions of this Agreement, Buyer shall, from and after the Closing Date, (a)
assume all obligations and liabilities of Sellers that constitute Assumed
Liabilities under the Seller Agreements; and (b) satisfy and perform all of the
Assumed Liabilities related to each of the Seller Agreements when the same are
due in accordance with the terms of the Seller Agreements.
8.6 CERTAIN ACTIONS.
(a) Buyer hereby agrees to, and shall take all action reasonably necessary
to, join any Seller as co-plaintiff in the Excluded Action, provided that the
Seller plaintiffs shall control such litigation in all respects.
(b) Within thirty days after the Closing Date, Sellers shall take such
corporate, limited liability company and other actions that are necessary to
change their corporate and company names, and shall change their names to, names
that are not similar to or confusing with their current names, including any
necessary filings required by the general corporation law or limited liability
company law of the State of Michigan.
(c) Sellers have engaged the firm of Rothschild Inc. to assist them in
connection with the matters contemplated by this Agreement and Sellers will be
responsible for and shall pay the fees and expenses of such firm and any other
fees referred to in Section 5.20.
8.7 COVENANT NOT TO COMPETE; NON-SOLICITATION.
(a) For a period commencing on the Closing Date and ending on the five year
anniversary of the Closing Date (the "Restricted Period"), neither the Sellers
nor the Transferred Subsidiaries shall, directly or indirectly, establish,
finance, own, manage, operate, engage in or otherwise participate in the conduct
of, in North America and Europe, any business that is the same or substantially
similar to the Business.
(b) During the Restricted Period, the Sellers and the Transferred
Subsidiaries shall not (i) directly or indirectly solicit, encourage or attempt
to solicit or encourage any of the employees, agents, independent contractors,
consultants or representatives of the Buyer to terminate his, her or its
relationship with the Buyer; (ii) directly or indirectly solicit, encourage or
attempt to solicit or encourage any of the employees, agents, independent
contractors, consultants or representatives of the Buyer to become employees,
agents, representatives, consultants or independent contractors of any other
Person; (iii) directly or indirectly solicit or attempt to solicit any customer,
vendor or distributor of the Buyer with respect to any product or service being
furnished, made, sold or leased by the Buyer; or (iv) persuade or seek to
persuade any customer of the Buyer to cease to do business or to reduce the
amount of business which any customer has customarily done prior to the Closing
Date with the Sellers and/or the Transferred Subsidiaries or contemplates doing
with the Buyer.
(c) The parties expressly acknowledge that it would be difficult to measure
the damages that might result from any breach of this Section 8.7, and that any
such breach will
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result in immediate, substantial and irreparable injury to the Buyer for which
it will have no adequate remedy at law. The Buyer shall be entitled to, without
the posting of any bond, an injunction or other equitable relief issued by a
court of competent jurisdiction enjoining and restraining any violation or
threatened violation of this Section 8.7 by the Sellers, the Non-Transferred
Subsidiaries or their shareholders, as applicable. The Sellers acknowledge and
agree that (i) this Section 8.7 is a material inducement for the Buyer to enter
into this Agreement and to consummate the transactions contemplated hereby, and
(ii) this Section 8.7 is reasonable under the circumstances to protect the
Purchased Assets and goodwill acquired by the Buyer under this Agreement. Rights
and remedies provided for in this Section 8.7 are cumulative and shall be in
addition to rights and remedies otherwise available to the parties hereunder or
under any other agreement or applicable law.
(d) If any provision contained in this Section 8.7 is for any reason held
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability will not affect any other provisions of this Section, but this
Section will be construed as if such invalid, illegal or unenforceable provision
had never been contained herein. It is the intention of the parties that if any
of the restrictions or covenants contained herein is held to cover a geographic
area or to be for a length of time which is not permitted by applicable law, or
in any way construed to be too broad or to any extent invalid, such provision
will not be construed to be null, void and of no effect, but to the extent such
provision would be valid or enforceable under applicable law, a court of
competent jurisdiction will construe and interpret or reform this Section 8.7 to
provide for a covenant having the maximum enforceable geographic area, time
period and other provisions (not greater than those contained herein) as will be
valid and enforceable under such applicable law.
8.8 NO LIABILITY FOR REPRESENTATIONS AND WARRANTIES. The Buyer on behalf of
itself and any other Person claiming by or through the Buyer, to the fullest
extent permitted by applicable law, hereby (a) irrevocably covenants to refrain
from, directly or indirectly, asserting any claim or demand, or commencing,
instituting or causing to be commenced, any proceeding of any kind against any
of the Sellers or any of the Sellers' respective past, present or future
officers, directors, managers, employees, agents, consultants, advisors, legal
counsel, accountants and financial advisors (collectively, the "Releasees"),
based upon any actual or alleged breach of representation or warranty set forth
or provided for in this Agreement or in any certificate delivered on behalf of
Sellers pursuant hereto, and (b) unconditionally and irrevocably fully and
forever releases and discharges each of the Releasees from any and all claims,
counterclaims, setoffs, choses in action, demands, proceedings, causes of
action, orders, judgments, obligations, contracts, agreements, debts and
liabilities whatsoever, whether known or unknown, suspected or unsuspected, both
at law and in equity, which Buyer now has, has ever had or may hereafter have
against the respective Releasees based upon any actual or alleged breach of
representation or warranty of Sellers, set forth or provided for in this
Agreement or in any certificate delivered on behalf of Sellers pursuant hereto;
provided, however, that nothing in this Section 8.8 shall be applicable to
intentional misrepresentation and fraud. In the event any Action is brought by
the Buyer or any other Person claiming by or through the Buyer against any
Releasee based on a claim of intentional misrepresentation or fraud, the losing
party in such Action shall pay to the prevailing party in such Action all costs
and expenses (including reasonable attorneys' fees and costs) incurred by the
prevailing party in such Action.
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ARTICLE IX
CONDITIONS TO CLOSING
9.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS TO EFFECT THE CLOSING. The
respective obligations of each party to effect the sale and purchase of the
Purchased Assets shall be subject to the fulfillment on or prior to the Closing
Date, of the following conditions:
(a) the waiting period under the HSR Act applicable to the consummation of
the transactions contemplated hereby shall have expired or been terminated and
all required non-United States anti-trust or competition approvals shall have
been obtained;
(b) except to the extent not obviated by the Final Sale Order, all consents
of Governmental Authorities required for the consummation of the transactions
contemplated by this Agreement shall have become Final Orders of the respective
Governmental Authorities; and
(c) no preliminary or permanent injunction or other order or decree by any
federal or state court which prevents the consummation of a material part of the
transactions contemplated hereby shall be in effect (each party agreeing to use
its commercially reasonable best efforts to have any such injunction, order or
decree lifted) and no statute, rule or regulation shall have been enacted by any
Governmental Authority which prohibits the consummation of the transactions
contemplated hereby.
9.2 CONDITIONS TO OBLIGATIONS OF BUYER. The obligation of Buyer to effect
the purchase of the Purchased Assets contemplated by this Agreement shall be
subject to the fulfillment on or prior to the Closing Date of the following
additional conditions:
(a) there shall have been no material breach by any Seller in the
performance of any of its covenants and agreements herein; each of the
representations and warranties of Sellers contained or referred to herein or in
the Disclosure Schedule shall be true and correct in all material respects on
the Closing Date (except, in each case, those representations and warranties
that are qualified by materiality which shall be true and correct in all
respects) as though made on the Closing Date, except for changes therein
specifically permitted by this Agreement; and there shall have been delivered to
Buyer a certificate to such effect, dated the Closing Date, signed on behalf of
Sellers by an authorized officer of such Sellers;
(b) the Sale Order shall be a Final Sale Order;
(c) between the date hereof and the Closing Date, there shall have been no
Material Adverse Effect and there shall have been delivered to Buyer a
certificate to such effect, dated the Closing Date, signed on behalf of Sellers
by an authorized officer of such Sellers;
(d) Sellers shall have obtained all Third Party Consents; and
(e) each of the deliveries required to be made to Buyer pursuant to Section
4.4 shall have been so delivered.
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Any condition specified in this Section 9.2 may be waived by Buyer;
provided that no such waiver shall be effective against Buyer unless it is set
forth in a writing executed by Buyer.
9.3 CONDITIONS TO OBLIGATIONS OF THE SELLERS. The obligation of Sellers to
effect the sale of the Purchased Assets contemplated by this Agreement shall be
subject to the fulfillment on or prior to the Closing Date of the following
additional conditions:
(a) there shall have been no material breach by Buyer in the performance of
any of its covenants and agreements herein; each of the representations and
warranties of Buyer contained or referred to in this Agreement shall be true and
correct in all material respects on the Closing Date (except, in each case,
those representations and warranties that are qualified by materiality which
shall be true and correct in all respects) as though made on the Closing Date;
and there shall have been delivered to Sellers a certificate to such effect,
dated the Closing Date and signed on behalf of Buyer by an authorized officer of
Buyer; and
(b) each of the deliveries required to be made to Sellers pursuant to
Section 4.3 shall have been so delivered;
(c) the Sale Order shall have been entered and shall be in full force and
effect, and all conditions contemplated by the Sale Order to consummate the
transactions contemplated hereby shall have been satisfied or waived.
Any condition specified in this Section 9.3 may be waived by the
Sellers; provided that no such waiver shall be effective against the Sellers
unless it is set forth in writing executed by the Sellers.
ARTICLE X
TERMINATION
10.1 TERMINATION. Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated at any time prior to the
Closing Date (any such occurrence a "Termination Date"):
(a) by the mutual consent of Buyer and Sellers;
(b) by Buyer or Sellers if the Sale Order has not become a Final Sale Order
by 30 days after the Sale Hearing; provided that the failure of the Sale Order
to become a Final Sale Order by such date shall not have been caused by, or
result from, actions by the terminating party;
(c) subject to extension as provided in the Sale Procedures Order,
automatically and without further action by Buyer and Sellers if the Closing
shall not have occurred on or prior to April 28, 2005 (or later date as is
required to obtain any reviews or approvals under the HSR Act or other
anti-trust or competition laws applicable to the transactions contemplated by
this Agreement, but in no event later than May 28, 2005);
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(d) by Buyer in the event of any material breach by any Seller of any of
Sellers' covenants, agreements, representations or warranties contained herein
and the failure of Sellers to cure such breach within seven days after receipt
of written notice from Buyer requesting such breach to be cured;
(e) by Sellers in the event of any material breach by Buyer of any of
Buyer's covenants, agreements, representations or warranties contained herein
and the failure of Buyer to cure such breach within seven days after receipt of
notice from Sellers requesting such breach to be cured; or
(f) by Buyer, upon: (i) conversion of the Filings to filings under Chapter
7 of the Bankruptcy Code; (ii) transfer of venue of one but not both of the
Filings from the Bankruptcy Court or Sellers seeking to transfer the venue of
either of the Filings; provided, however, that if venue of one of the Filings is
transferred from the Bankruptcy Court, Sellers may seek to transfer the venue of
the other Filing so that the same court has jurisdiction over both Filings and
if Sellers are successful in so doing within ten business days of the transfer
of venue of the first Filing, Buyer will not have a termination right pursuant
to this Section 10.1(f)(ii); (iii) the filing by Sellers of a plan of
reorganization or liquidation for any of Sellers which does not provide for the
sale of the Purchased Assets to the Buyer under this Agreement, or the
confirmation of any such plan, whether or not filed by Sellers; or (iv) the
appointment of a trustee, examiner with expanded powers, receiver, responsible
person, or similar party for either of Sellers.
10.2 NOTICE OF TERMINATION. Any party desiring to terminate this Agreement
pursuant to Section 10.1 shall give notice of such termination to the other
party to this Agreement.
10.3 EFFECT OF TERMINATION. In the event that this Agreement shall be
terminated pursuant to this Article X, all further obligations of the parties
under this Agreement (other than Sections 11.2 and 11.11) shall be terminated
without further liability of any party to the other, provided that nothing
herein shall relieve any party from liability for its breach of this Agreement.
ARTICLE XI
GENERAL PROVISIONS
11.1 SURVIVAL OF OBLIGATIONS. All representations and warranties contained
in this Agreement shall terminate upon the Closing Date and all covenants and
obligations contained in this Agreement shall survive the consummation of the
transactions contemplated by this Agreement.
11.2 CONFIDENTIAL NATURE OF INFORMATION. Each party agrees that it will
treat in confidence all documents, materials and other information that it shall
have obtained regarding the other party during the course of the negotiations
leading to the consummation of the transactions contemplated hereby (whether
obtained before or after the date of this Agreement), the investigation provided
for herein and the preparation of this Agreement and other related documents.
Such documents, materials and information shall not be communicated to any third
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Person (other than, in the case of Buyer, to its counsel, accountants, financial
advisors and lenders, and in the case of Sellers, to their counsel, accountants
or financial advisors). No party shall use any confidential information in any
manner whatsoever except solely for the purpose of evaluating the proposed
purchase and sale of the Purchased Assets and the enforcement of its rights
hereunder and under the Ancillary Documents; provided, however, that after the
Closing Buyer may use or disclose any confidential information included in the
Purchased Assets and may use other confidential information that is otherwise
reasonably related to the Business or the Purchased Assets for purposes of the
conduct of the Business. The obligation of each party to treat such documents,
materials and other information in confidence shall not apply to any information
that (i) is or becomes available to such party from a source other than such
party, (ii) is or becomes available to the public other than as a result of
disclosure by such party or its agents, (iii) is required to be disclosed under
applicable law or judicial process, including the Bankruptcy Proceedings, but
only to the extent it must be disclosed, or (iv) such party reasonably deems
necessary to disclose to obtain any of the consents or approvals contemplated
hereby.
11.3 INVESTIGATION. Except for the representations and warranties contained
in Article V and in the Disclosure Schedule, Buyer acknowledges that neither the
Sellers nor any other person or entity, acting on behalf of any Seller makes or
has made any other express or implied representation or warranty to Buyer as to
the accuracy or completeness of any information regarding the Business or any
other matter. Buyer further agrees that neither the Sellers nor any other person
or entity will have or be subject to any liability to Buyer or any other person
resulting from the distribution to Buyer, or Buyer's use, of any such
information, and any information, document or material made available or
provided to Buyer in certain "data rooms," management presentations or any other
form in expectation of the transactions contemplated by this Agreement. Buyer
acknowledges that it is Buyer's understanding that the burden to conduct an
investigation of the Business lies solely with Buyer and that (a) the Sellers
have no obligation to disclose matters relating to the Business; (b) any
disclosure the Sellers make, or fail to make, in the course of Buyer's
investigation of the Business shall not give rise to any further obligation or
liability of the Sellers, including, any duty to update or supplement such
disclosure; and (c) Buyer bears the risk that any information, document or
material made available or provided to Buyer in the course of its investigation
is inaccurate or incomplete, except in each case as set forth in this Agreement
and in the Disclosure Schedule.
Without limitation, in connection with Buyer's investigation of the
Business and the Purchased Assets, Buyer has received from or on behalf of the
Sellers certain projections, including, projected statements of operating
revenues and income from operations of the Business for the fiscal year ending
December 31, 2005 and for subsequent fiscal years and certain business plan
information for such fiscal year and succeeding fiscal years. Buyer acknowledges
that there are uncertainties inherent in attempting to make such estimates,
projections and other forecasts and plans, that Buyer is familiar with such
uncertainties, that Buyer is taking full responsibility for making its own
evaluation of the adequacy and accuracy of all estimates, projections and other
forecasts and plans so furnished to it including the reasonableness of the
assumptions underlying such estimates, projections and forecasts, and that Buyer
shall have no claim against the Sellers or any other person acting on behalf of
any Seller with respect thereto. Accordingly, the Sellers make no representation
or warranty with respect to such estimates, projections and other forecasts and
plans including the reasonableness of the
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assumptions or the accuracy of the information underlying such estimates,
projections and forecasts.
11.4 NO PUBLIC ANNOUNCEMENT. Neither Sellers nor Buyer shall, without the
approval of the other, make any press release or other public announcement
concerning the transactions contemplated by this Agreement, except as and to the
extent that any such party shall be so obligated by law, including as may be
required by the Bankruptcy Proceedings, or the rules of any stock exchange or
NASDAQ, in which case the other party shall be advised and the parties shall use
their best efforts to cause a mutually agreeable release or announcement to be
issued.
11.5 NOTICES. All notices or other communications required or permitted
hereunder shall be in writing and shall be given or delivered by personal
delivery, by registered or certified mail (first class postage prepaid) or by a
nationally recognized private overnight courier service addressed as follows:
If to Buyer, to:
NEW VENTURE HOLDINGS, LLC
c/o Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036
Attn: Thomas M. Mayer
and:
HMC VENTURE, INC.
c/o Harbert Distressed Investment Master Fund, Ltd.
555 Madison Avenue, 28th Floor
New York, New York 10022
Attn: Philip A. Falcone
and:
THE YUCAIPA COMPANIES
9130 West Sunset Boulevard
Los Angeles, CA 90069
Attn: Ed Renwick
with a copy to:
Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036
Attn: Thomas M. Mayer
and:
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Munger, Tolles & Olson LLP
355 South Grand Avenue, 35th Floor
Los Angeles, CA 90071
Attn: Thomas B. Walper
and:
Clifford Chance US LLP
31 West 52nd Street
New York, New York 10019-6131
Attn: G. David Brinton
If to Sellers, to:
VENTURE HOLDINGS COMPANY, LLC
6555 15 Mile Road
Sterling Heights, Michigan 48312
Facsimile: 586.276.1839
Attn: David Barnes, Esq.
with copies to:
Foley & Lardner LLP
500 Woodward Ave., Suite 2700
Detroit, Michigan 48226
Attn: Judy A. O'Neill, Esq., Nicole Y. Lamb-Hale, Esq.
and:
DELUXE PATTERN CORPORATION
34537 Bennett Drive
Fraser, MI 48026-9002
Attn: Kevin Collins
with copies to:
Shaw Gussis Fishman Glantz Wolfson & Towbin, LLC
321 North Clark Street, Suite 800
Chicago, Illinois 60610
Attn: Brian M. Graham, Esq.
or to such other address as such party may indicate by a notice delivered to the
other party hereto.
Any notice, consent, authorization, direction or other communication
delivered as aforesaid shall be deemed to have been effectively delivered and
received, if sent by a nationally
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recognized private overnight courier service, on the date following the date
upon which it is delivered for overnight delivery to such courier service, if
sent by mail, on the earlier of the date of actual receipt or the fifth business
day after deposit in the United States mail, or, if delivered personally, on the
date of such delivery.
11.6 SUCCESSORS AND ASSIGNS. (a) The rights of the parties under this
Agreement shall not be assignable by such parties prior to the Closing without
the written consent of the other, except that all or any portion of the rights
of Buyer hereunder may be assigned prior to the Closing, without the consent of
Sellers, to any Affiliate of Buyer; provided that (i) the assignee shall assume
in writing all of Buyer's obligations to Sellers hereunder, and (ii) Buyer shall
not be released from any of its obligations hereunder by reason of such
assignment.
(b) This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their successors and permitted assigns. The successors and
permitted assigns hereunder shall include any permitted assignee as well as the
successors in interest to such permitted assignee (whether by merger,
consolidation, liquidation (including successive mergers, consolidations or
liquidations) or otherwise). Nothing in this Agreement, expressed or implied, is
intended or shall be construed to confer upon any Person other than the parties
and successors and assigns permitted by this Section 11.6 any right, remedy or
claim under or by reason of this Agreement.
11.7 ACCESS TO RECORDS AFTER CLOSING. For a period of six years after the
Closing Date, Sellers and its Representatives shall have reasonable access to
all of the books and records of the Business transferred to Buyer hereunder to
the extent that such access may reasonably be required by Sellers in connection
with matters relating to or affected by the operations of the Business prior to
the Closing Date. Such access shall be afforded by Buyer upon receipt of
reasonable advance notice and during normal business hours. Sellers shall be
solely responsible for any costs or expenses incurred by them pursuant to this
Section 11.7.
For a period of six years after the Closing Date, Buyer and its
Representatives shall have reasonable access to all of the books and records
relating to the Business that Sellers may retain after the Closing Date. Such
access shall be afforded by Sellers upon receipt of reasonable advance notice
and during normal business hours. Buyer shall be solely responsible for any
costs and expenses incurred by it pursuant to this Section 11.7. If Sellers
shall desire to dispose of any of such books and records prior to the expiration
of such six-year period, Sellers shall, prior to such disposition, give Buyer a
reasonable opportunity, at Buyer's expense, to segregate and remove such books
and records as Buyer may select.
11.8 ENTIRE AGREEMENT; AMENDMENTS; SCHEDULES. This Agreement and the
Exhibits and Schedules referred to herein and the documents delivered pursuant
hereto contain the entire understanding of the parties hereto with regard to the
subject matter contained herein or therein, and supersede all prior agreements,
understandings or letters of intent between or among any of the parties hereto.
This Agreement shall not be amended, modified or supplemented except by a
written instrument signed by an authorized representative of each of the parties
hereto. Any fact or item disclosed on any Schedule to this Agreement shall be
deemed disclosed on all other Schedules to this Agreement to which such fact or
item may reasonably apply so long as such
-42-
disclosure is in sufficient detail to enable a party hereto to identify the
facts or items to which it applies.
11.9 INTERPRETATION. Article titles and headings to Sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement. The Schedules and
Exhibits referred to herein shall be construed with and as an integral part of
this Agreement to the same extent as if they were set forth verbatim herein.
Reference to the singular includes the plural and reference to the plural
includes the singular, according to the context. Reference to the neuter gender
includes the masculine and feminine where appropriate. References to any statute
shall include any amendments thereto, any successor statutes and all
regulations, rulings and orders promulgated thereunder, in effect at any
applicable date of determination. Except as otherwise stated, reference to
Articles, Sections, Schedules, Exhibits, paragraphs and recitals means the
Articles, Sections, Schedules, Exhibits, paragraphs and recitals of this
Agreement. The words "including" or "includes" or similar terms used herein
shall be deemed to be followed by the words "without limitation", whether or not
such additional words are actually set forth herein.
11.10 WAIVERS. Any term or provision of this Agreement may be waived, or
the time for its performance may be extended, by the party or parties entitled
to the benefit thereof. Any such waiver shall be validly and sufficiently
authorized for the purposes of this Agreement if, as to any party, it is
authorized in writing by an authorized representative of such party. The failure
of any party hereto to enforce at any time any provision of this Agreement shall
not be construed to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of any party
thereafter to enforce each and every such provision. No waiver of any breach of
this Agreement shall be held to constitute a waiver of any other or subsequent
breach.
11.11 EXPENSES. Except as otherwise provided herein, each party hereto will
pay all costs and expenses incident to its negotiation and preparation of this
Agreement and to its performance and compliance with all agreements and
conditions contained herein on its part to be performed or complied with,
including the fees, expenses and disbursements of its counsel and accountants.
11.12 PARTIAL INVALIDITY. Wherever possible, each provision hereof shall be
interpreted in such manner as to be effective and valid under applicable law,
but in case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
provision shall be ineffective to the extent, but only to the extent, of such
invalidity, illegality or unenforceability without invalidating the remainder of
such invalid, illegal or unenforceable provision or provisions or any other
provisions hereof, unless such a construction would be unreasonable.
11.13 EXECUTION IN COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be considered an original instrument, but all
of which shall be considered one and the same agreement, and shall become
binding when one or more counterparts have been signed by and delivered to each
of the parties hereto.
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11.14 FURTHER ASSURANCES. From time to time following the Closing and
subject to any approval of the Bankruptcy Court that may be required, Sellers
shall execute and deliver, or cause to be executed and delivered, to Buyer such
other documents and instruments, including instruments of conveyance and
transfer, as Buyer may reasonably request or as may be otherwise necessary, and
Sellers shall take all other actions as may be reasonably necessary, to more
effectively convey and transfer to, and vest in, Buyer and put Buyer in
possession and control of the Business and the Purchased Assets, and to effect
the transactions contemplated by this Agreement and the Ancillary Agreements.
Sellers shall also use reasonable best efforts to cooperate with and assist
Buyer in preparing and submitting any information required in connection with
registrations and licenses that relate to periods of time before and after the
Closing Date. Sellers and Buyer further agree to reasonably cooperate with each
other with respect to the appropriate disposition of any Assumed Liability or
Excluded Liability, including without limitation any Actions, provided that such
duty to reasonably cooperate shall in no event affect the status of any
liability as an Assumed Liability or an Excluded Liability.
11.15 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws (as opposed to the conflicts of law
provisions) of the State of Michigan.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed the day and year first above written.
BUYER:
NEW VENTURE HOLDINGS, LLC
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
SELLERS:
VENTURE HOLDINGS COMPANY, LLC
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
DELUXE PATTERN CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
VEMCO, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
VENTURE INDUSTRIES CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
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VENTURE MOLD & ENGINEERING CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
VENTURE LEASING COMPANY
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
VENTURE LEASING, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
VENTURE HOLDINGS CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
VENTURE SERVICE COMPANY
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
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EXPERIENCE MANAGEMENT LLC
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
VENTURE EUROPE, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
VENTURE EU CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
FARM & COUNTRY REAL ESTATE COMPANY
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
PATENT HOLDING COMPANY
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
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REALVEN CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
VENTURE AUTOMOTIVE CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
VENTURE EQUIPMENT ACQUISITION COMPANY
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
VENTURE HEAVY MACHINERY LLC
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
VENTURE REAL ESTATE, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
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VENTURE REAL ESTATE ACQUISITION COMPANY
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
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EXHIBIT A
DELUXE ENTITIES
Deluxe Pattern Corporation
Farm & Country Real Estate Company
Patent Holding Company
Realven Corporation
Venture Automotive Corporation
Venture Equipment Acquisition Company
Venture Heavy Machinery LLC
Venture Real Estate, Inc.
Venture Real Estate Acquisition Company
A-1
EXHIBIT B
VENTURE ENTITIES
Venture Holdings Company, LLC
Vemco, Inc.
Venture Industries Corporation
Venture Mold & Engineering Corporation
Venture Leasing Company
Venture Leasing, Inc.
Venture Holdings Corporation
Venture Service Company
Experience Management LLC
Venture Europe, Inc.
Venture EU Corporation
B-1