SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 1, 1996
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PrimeSource Corporation
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(Exact name of registrant as specified in charter)
Pennsylvania 0-21750 23-1430030
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(State of Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
4350 Haddonfield Road, Suite 222, Pennsauken, New Jersey 08109
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609) 488-4888
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS
a. On November 1, 1996, the Registrant acquired from VGC Corporation ("VGC"),
the operating assets (excluding accounts receivable) of VGC's Minneapolis,
Minnesota; Milwaukee, Wisconsin; Des Moines, Iowa; and Omaha, Nebraska
operations for approximately $11.2 million. The assets acquired consisted
primarily of inventory and property and equipment.
The consideration given was arrived at as a result of arms-length
negotiations. There were no common directors, ownership, or other material
relationships between the Registrant and VGC. Funding for the acquisition
was provided from the Registrant's revolving credit agreement with PNC
Bank.
b. The acquired assets were used primarily in the supply and distribution of
photographic and graphic arts supplies and equipment. The Registrant
intends to continue to use the assets for the same purpose.
Based on the consolidated income and consolidated asset provisions for
determining if a transaction is significant, as amended under SEC Rule
34-37802, the above transaction exceeds the 10% threshold, but is less than
the 20% threshold. Accordingly, as prescribed, no financial or pro-forma
statements are provided under Item 7 of this filing.
EXHIBITS
Exhibit No. Name of Exhibit
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2 Asset Purchase Agreement
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PrimeSource Corporation
(Registrant)
By: /s/ WILLIAM A. DEMARCO
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William A. DeMarco
Vice President of Finance and
Chief Financial Officer
(principal financial and accounting officer)
Date November 13, 1996
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ASSET PURCHASE AGREEMENT
By and Among
VGC CORP.,
VGC HOLDING USA, INC.,
NV KONINKLIJKE KNP BT
and
PRIMESOURCE CORPORATION
Dated as of September 27, 1996
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TABLE OF CONTENTS
Page
ARTICLE 1.
PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES............. 1
1.1 Agreement of Purchase and Sale..................... 1
1.2 Description of Assets Being Purchased.............. 2
1.3 The Purchase Price................................. 3
1.4 Assumed Liabilities and Contracts.................. 3
1.5 Payment of Estimated Purchase Price at
Closing............................................ 4
1.6 Allocation......................................... 4
1.7 Post Closing Adjustment............................ 5
1.8 Excluded Assets.................................... 6
1.9 Instruments of Conveyance and Transfer;
Further Assurances................................. 6
ARTICLE 2.
CLOSING AND TERMINATION............................................ 7
2.1 Closing............................................ 7
2.2 Termination........................................ 7
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF THE SELLER....................... 8
3.1 Corporate Organization and Authority of the
Seller............................................. 8
3.2 No Violation: Consents............................. 8
3.3 Title to Properties; Absence of Liens.............. 9
3.4 Certain Events..................................... 9
3.5 Financial Statements............................... 10
3.6 Environmental Matters.............................. 10
3.7 Employment Matters................................. 11
3.8 Employee Benefits.................................. 11
3.9 Property; Machinery and Equipment.................. 11
3.10 Contracts.......................................... 11
3.11 Broker's and Finder's Fees......................... 11
3.12 Litigation......................................... 12
3.13 Tax Matters........................................ 12
3.14 Disclaimer of Other Representations and
Warranties; Disclosure............................. 12
3.15 Insurance.......................................... 13
3.16 Transactions with Affiliates....................... 13
3.17 Representations Concerning Real Estate............. 13
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF THE BUYER........................ 15
4.1 Organization....................................... 15
4.2 Corporate Authority................................ 15
4.3 No Violation: Consents............................. 15
4.4 Broker's and Finder's Fees......................... 16
4.5 Litigation......................................... 16
4.6 Financing.......................................... 16
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ARTICLE 5.
CERTAIN COVENANTS AND AGREEMENTS OF THE SELLER AND THE
BUYER.............................................................. 17
5.1 Conduct of Business Prior to the Closing Date...... 17
5.2 Risk of Loss Prior to Closing Date................. 17
5.3 Employees.......................................... 17
5.4 Use of Names and Logos............................. 18
5.5 Collection of Seller Receivables................... 18
5.6 Certain Taxes and Fees............................. 19
5.7 Access to Information and Confidentiality.......... 20
5.8 Books and Records; Personnel....................... 20
5.9 Other Negotiations................................. 21
5.10 Press Releases..................................... 21
5.11 Closing Conditions................................. 21
5.12 Covenant Not To Compete............................ 22
ARTICLE 6.
CONDITIONS PRECEDENT OF THE BUYER.................................. 22
6.1 Representations and Warranties..................... 22
6.2 No Actions......................................... 23
6.3 Consents........................................... 23
6.4 Closing Documentation.............................. 23
6.5 Effectiveness of Certain Contracts................. 24
6.6 Physical Inventory................................. 24
6.7 Due Diligence...................................... 24
ARTICLE 7.
CONDITIONS PRECEDENT OF THE SELLER................................. 24
7.1 Representations and Warranties..................... 24
7.2 No Actions......................................... 25
7.3 Consents........................................... 25
7.4 Closing Documentation.............................. 25
7.5 Use Agreement...................................... 25
ARTICLE 8.
INDEMNIFICATION.................................................... 26
8.1 Indemnification by the Seller...................... 26
8.2 Indemnification by the Buyer....................... 26
8.3 Remedies........................................... 27
8.4 Survival of Representations and Warranties......... 27
8.5 Certain Limitations................................ 28
8.6 Procedures Not Involving Third Party Claims........ 29
8.7 Procedures Regarding Third Party Claims............ 29
ARTICLE 9.
GUARANTY OF KNP BT AND HOLDING..................................... 30
9.1 Guaranty........................................... 30
9.2 Notice to KNP BT and Holding....................... 30
9.3 Absoluteness of Guaranty........................... 30
9.4 Exhaustion of Remedies Not Required................ 31
9.5 No Limitation of Remedies.......................... 31
9.6 Ownership.......................................... 31
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ARTICLE 10.
MISCELLANEOUS...................................................... 32
10.1 Cooperation........................................ 32
10.2 Waiver............................................. 32
10.3 Notices............................................ 32
10.4 Governing Law and Consent to Jurisdiction.......... 33
10.5 Counterparts....................................... 34
10.6 Headings........................................... 34
10.7 Entire Agreement................................... 34
10.8 Amendment and Modification......................... 34
10.9 Binding Effect; Benefits........................... 34
10.10 Assignability...................................... 34
10.11 Expenses........................................... 34
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THIS ASSET PURCHASE AGREEMENT is dated as of September 27,
1996 (herein, together with the Schedules and Exhibits attached hereto, referred
to as this "Agreement") by and among VGC Corp., a Minnesota corporation ("VGC"
or the "Seller"), NV Koninklijke KNP BT, a Netherlands corporation ("KNP BT"),
and VGC Holding USA, Inc., an indirect wholly owned subsidiary of KNP BT and the
sole shareholder of VGC and a Delaware corporation ("Holding"), and PrimeSource
Corporation, a Pennsylvania corporation (the "Buyer").
W I T N E S S E T H:
WHEREAS, the Buyer desires to purchase from the Seller
substantially all of the assets and properties of the Seller relating to its
graphic equipment and supplies distribution businesses and operations in the Des
Moines, Iowa, Minneapolis, Minnesota, Omaha, Nebraska and Milwaukee, Wisconsin
greater metropolitan areas (the "Business"), subject to certain exceptions as
hereinafter specified, and to assume certain liabilities of the Seller relating
to the Business, all upon the terms and conditions hereinafter set forth; and
WHEREAS, the Seller is willing to sell, transfer, convey,
assign and deliver the same to the Buyer upon the terms and conditions
hereinafter set forth; and
WHEREAS, Holding and KNP BT desire that the foregoing be
effected.
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, the parties agree as follows:
ARTICLE 1.
PURCHASE AND SALE OF ASSETS;
ASSUMPTION OF LIABILITIES
1.1 Agreement of Purchase and Sale. On the terms and subject
to the conditions of this Agreement, at the Closing (as such term is defined in
Section 2.1 hereof), the Seller shall sell, transfer, convey, assign and deliver
(or cause to be sold, transferred, conveyed, assigned and delivered) to the
Buyer, and the Buyer shall purchase and accept delivery of, all of the Seller's
right, title and interest in and to all of the assets of the Seller of every
kind, character and description, tangible or intangible, real, personal or
mixed, used for the Business, including, without limitation, all of the assets
described in Section 1.2, but excluding, however, the assets described in
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Section 1.8 (the "Excluded Assets") (said assets, other than the Excluded
Assets, constituting the "Purchased Assets").
Except as set forth herein, the Purchased Assets
will be sold free and clear of all mortgages, deeds of trust, liens, pledges,
charges, security interests, contractual restrictions, claims or encumbrances of
any kind or character (collectively, "Encumbrances").
1.2 Description of Assets Being Purchased. The Buyer shall
purchase all of the Seller's right, title and interest in and to the Purchased
Assets which shall include, to the extent not identified in the Excluded Assets,
all the assets of the Seller used in or for the Business, including all
collateral and supporting assets, including specifically the items listed in
Section 1.2(a) through Section 1.2(f) below, and further including, to the
extent not elsewhere listed and to the extent not identified as an Excluded
Asset, all machinery, equipment (both mobile and non-mobile), personal
computers, terminals and printers, personal computer software, tools, furniture,
furnishings, trade fixtures, supplies and parts, and automobiles, trucks,
vehicles, and other tangible personal property (including any of the foregoing
purchased subject to any conditional sales or title retention agreement in favor
of any third party) that are used for the Business, whether owned, leased, or
subleased. Included in the Purchased Assets shall be the transfer of any
favorable ratings of the Seller relating to unemployment taxes under any
applicable Iowa, Minnesota, Nebraska or Wisconsin state laws or regulations
relating to the payment of unemployment taxes and compensation, to the extent
that any such favorable ratings are transferable.
(a) The Inventory of the Seller for the Business,
as defined on Schedule 1.2(a).
(b) All other tangible and intangible property of
the Seller used in the Business as described on Schedule 1.2(b), but excluding
anything included in the Excluded Assets. Tangible and intangible property
includes any assets subject to capital leases, as determined under Statement of
Financial Accounting Standards, No. 13, "Accounting for Leases."
(c) All other assets of the Seller for the
Business including deposits, prepaid expenses and like items, all as described
on Schedule 1.2(c).
(d) All operating leases of the Seller for the
Business, as described on Schedule 1.2(d), which operating leases include real
property leases, motor vehicle leases, and equipment leases.
(e) All miscellaneous assets of the Seller used
in the Business, not otherwise specifically itemized, as
generically described on Schedule 1.2(e).
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(f) The real property owned by the Seller in
Ankeny, Iowa and Mendota Heights, Minnesota, as more fully described on Schedule
1.2(f) (the "Owned Real Property").
1.3 The Purchase Price. The purchase price ("Purchase
Price") to be paid by the Buyer to the Seller for the Purchased
Assets shall be the sum of the following components:
(a) For the Inventory as described in Section
1.2(a), the average inventory cost therefor as shown on Seller's regular detail
computer printouts for inventory, less a reserve of $1,750,000.
(b) For all tangible and intangible property
described in Section 1.2(b), the sum of $1,125,000.
(c) For all other assets described in Section
1.2(c), the fair value thereof as determined by applying accepted industry
standards for all items generic to the industry, or the fair market value
thereof as determined under generally accepted accounting principles ("GAAP")
for all items which are not industry specific.
(d) For all operating leases described in Section
1.2(d), the purchase price therefor is agreed to be equal to the obligations the
Buyer assumes under each operating lease.
(e) For the Owned Real Property as described in
Section 1.2(f), the sum of $2,725,000.
1.4 Assumed Liabilities and Contracts. On the terms
and subject to the conditions of this Agreement, at the Closing:
(a) the Buyer shall assume and undertake to
perform the liabilities and obligations, including the balances due under
capital leases, of the Seller specifically described on Schedule 1.4(a) attached
hereto (such liabilities and obligations being hereinafter referred to as the
"Assumed Liabilities"). Except as provided in Section 5.3 hereof, the Buyer
shall not assume any liabilities of the Seller regarding Seller's employees,
including, without limitation, liabilities or obligations of the Seller for
medical benefits of any kind or workers compensation benefits and liabilities
arising out of the National Labor Relations Act ("NLRA"), Civil Rights Act of
1964, Americans with Disabilities Act ("ADA"), Age Discrimination and Employment
Act ("ADEA"), Equal Pay Act, Fair Labor Standards Act ("FLSA"), Worker
Adjustment and Retraining Notification Act ("WARN"), Family Medical Leave Act
("FMLA"), wrongful discharge of employees, the Employee Retirement Income
Security Act of 1974 ("ERISA"), the Consolidated Budget Reconciliation Act of
1985 ("COBRA"), any employee pension benefit plan or employee welfare benefit
plan (as such terms are defined in ERISA) and any other state, local or federal
laws, rules or regulation governing employment relations (collectively,
"Employment Laws").
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(b) The Buyer shall assume and undertake to
perform the duties and obligations of the Seller under the contracts and
agreements specifically described on Schedule 1.4(b) attached hereto (such
duties and obligations arising under said contracts and agreements being
hereinafter referred to as the "Assumed Contracts").
Other than the Assumed Liabilities and the Assumed
Contracts, the Seller shall retain and remain responsible for all obligations,
duties and liabilities of the Seller of any nature whatsoever and the Buyer
assumes no other liability, duty or obligation.
The Seller hereby agrees to timely pay, satisfy
and discharge when and as the same may become due, and not any sooner, all of
its liabilities, duties and obligations of any kind or nature with respect to
its liabilities and obligations under the Assumed Contracts to be paid,
satisfied or discharged by the Seller prior to the Closing Date and to pay and
satisfy its liabilities and obligations which are required to be satisfied by it
prior to the Closing Date.
1.5 Payment of Estimated Purchase Price at Closing. At the
Closing, the Buyer shall deliver to the Seller an amount equal to the sum of the
Purchase Price as determined in Section 1.3 less the amount of Assumed
Liabilities as defined in Section 1.4(a), all as determined as at a date as
close to the date of the Closing as possible (the "Estimated Purchase Price"),
in immediately available funds by wire transfer to an account designated by the
Seller prior to the Closing Date.
For purposes of facilitating the post closing
adjustments required under Section 1.7, the parties hereby define "Net Working
Capital" to be the sum of the Inventory (Section 1.2(a)) plus the other current
assets (Section 1.2(c)) less the amount of the Assumed Liabilities (Section
1.4(a)). Prior to the Closing, for purposes of the Estimated Purchase Price, the
Buyer and the Seller shall have agreed upon the amount of the estimated Net
Working Capital as at a date as close to the date of the Closing as possible
(such amount being herein referred to as the "Estimated Net Working Capital").
Only the Net Working Capital component of the Estimated Purchase Price shall be
subject to adjustment under this Agreement, it being agreed that all other
components of the Purchase Price will be final as of the Closing.
1.6 Allocation. Schedule 1.6 hereto sets forth the allocation
of the Purchase Price and the Assumed Liabilities among the Purchased Assets, as
mutually agreed between the Seller and the Buyer. The parties agree that this
allocation is fair and reasonable. The parties further agree that no party shall
take a position on any federal or state income tax return, including without
limitation, IRS Form 8594 and any amendments thereto, before any governmental
agency charged with the collection of any tax or in any proceeding that is
inconsistent
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with the attached allocation without the prior written consent of the other
party, which consent may be absolutely and unconditionally withheld by the other
party.
1.7 Post Closing Adjustment.
(a) As soon as reasonably practicable, but not
later than thirty (30) days after the Closing Date, the Seller shall prepare and
deliver to the Buyer a statement of the amount of Net Working Capital as at the
Closing Date (the "Net Working Capital Statement"). The Net Working Capital
Statement shall set forth the amount of each of the components of Net Working
Capital as at the Closing Date and shall be prepared by the Seller in accordance
with the requirements set forth in this Section 1.7. All inventories reflected
on the Net Working Capital Statement shall be so reflected on the basis of a
complete physical count taken in accordance with Section 6.6 hereof and shall be
valued as of the Closing Date in accordance with Section 1.2(a). The Seller
shall be entitled to call upon and to receive the assistance of Coopers &
Lybrand LLP in the preparation of the Net Working Capital Statement. The Buyer
agrees to cooperate with and assist the Seller in the preparation of the Net
Working Capital Statement, and the Buyer shall give to the Seller and Coopers &
Lybrand LLP full access to the books and records of the Buyer that the Seller
requires to complete the Net Working Capital Statement.
(b) Within forty-five (45) days of the delivery
by the Seller to the Buyer of the Net Working Capital Statement, the Buyer shall
review the Net Working Capital Statement. For purposes of such review, the
Seller shall give, and shall cause to be given, to the Buyer full access, during
normal business hours and on reasonable prior notice, to the books and records
used in connection with the preparation of the Net Working Capital Statement,
including, without limitation, the detail ledgers of the Seller, work papers and
historical financial information reasonably requested by the Buyer. In the event
that, by the expiration of such forty-five (45) day period, the Buyer shall not
have notified the Seller of any objection to the Net Working Capital Statement,
the Net Working Capital Statement shall be deemed agreed to by the Buyer and the
Seller and shall be final, conclusive and binding on all the parties hereto. If
such a notice of objection is given by the Buyer to the Seller, then, if the
parties are unable to resolve such objection within thirty (30) days after
receipt by the Seller of such notice, the Seller and the Buyer shall submit the
dispute to Arthur Andersen LLP (the "Accountant"). The parties shall instruct
the Accountant to issue its determination regarding the dispute and the amount
of the Net Working Capital as at the Closing Date within thirty (30) days of its
engagement or otherwise as soon as practicable. Upon the engagement of the
Accountant, the Seller and the Buyer shall submit a statement to the Accountant
setting forth their respective positions regarding the dispute and the amount of
the Net Working Capital as at the Closing Date. The
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Seller shall give, and shall cause to be given, to the Accountant the same
access afforded to the Buyer under this Section 1.7. The determination by the
Accountant shall be conclusive and binding on all the parties hereto.
(c) If the amount of Net Working Capital set
forth in the Net Working Capital Statement (as agreed to by the parties or as
determined by the Accountant) is less than the Estimated Net Working Capital
(such shortfall being hereinafter called the "Net Working Capital Deficiency"),
then, an adjustment to the Estimated Purchase Price (the "Purchase Price
Adjustment") shall be automatically effected pursuant to which the Estimated
Purchase Price shall be reduced by an amount equal to the Net Working Capital
Deficiency and such amount shall be due and payable within ten (10) days by the
Seller to the Buyer. If the amount of the Net Working Capital set forth in the
Net Working Capital Statement (as agreed to by the parties or as determined by
the Accountant) exceeds the Estimated Net Working Capital (such excess being
hereinafter called the "Net Working Capital Surplus"), then the Purchase Price
Adjustment shall be automatically effected pursuant to which the Estimated
Purchase Price shall be increased by an amount equal to the Net Working Capital
Surplus and such amount shall be due and payable within ten (10) days by the
Buyer to the Seller. The Estimated Purchase Price, as adjusted pursuant to this
Section 1.7, shall be the "Purchase Price," as defined in Section 1.3.
(d) The party which makes a payment pursuant to a
Purchase Price Adjustment shall include, with such payment, simple interest on
the amount of such payment computed at a rate per annum of eight percent (8%),
from the Closing Date through the payment date.
(e) All fees and expenses of the Accountant in
performing its duties under this Agreement shall be shared equally by the Seller
and the Buyer and each of the Seller and the Buyer hereby agrees to pay its
share of such fees and expenses.
1.8 Excluded Assets. The Seller will retain and not
sell, convey, assign, transfer or deliver to the Buyer, and the
Buyer shall not purchase or acquire any of the assets described
on Schedule 1.8, which shall constitute the "Excluded Assets."
1.9 Instruments of Conveyance and Transfer; Further
Assurances.
(a) Instruments of Conveyance and Transfer. At
the Closing, the Seller shall deliver to the Buyer a Bill of Sale for the
Purchased Assets in the form of Exhibit 1.9(a) hereto (the "Bill of Sale"), and
such other endorsements, certificates of title, assignments and other good and
sufficient instruments of conveyance and transfer as shall be reasonably
necessary to
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vest in the Buyer title to the Purchased Assets in accordance
herewith.
(b) Further Assurances. The Seller further
agrees that, from and after the Closing, it will execute and deliver to the
Buyer such additional instruments and documents and take such further action as
the Buyer may reasonably require in order to more fully vest, record and/or
perfect the Buyer's title to, or interest in, the Purchased Assets.
ARTICLE 2.
CLOSING AND TERMINATION
2.1 Closing. The closing of the transactions provided for
herein (the "Closing") will take place at the offices of the Seller located at
1395 Commerce Drive, Mendota Heights, Minnesota at 10:00 A.M. (local time) no
later than October 30, 1996 (the "Closing Date") or at such other place, time
and date as may be
agreed upon by the Buyer and the Seller.
2.2 Termination. This Agreement may be terminated in
writing at any time:
(a) without liability on the part of any party
hereto, by mutual written consent of the Buyer and the Seller;
(b) without liability on the part of any party
hereto by either the Buyer or the Seller, if the Closing shall not have occurred
on or before October 30, 1996 (or such later date as may be agreed upon in
writing by the parties hereto);
(c) by the Buyer, if
(i) there shall have been a failure of a
condition precedent as set forth in Article 6 hereunder, and
(ii) the Seller shall not have provided
reasonable assurance that such condition precedent will be
satisfied on or before October 30, 1996, and
(iii) such condition precedent shall not
have been satisfied or waived prior to or on October 30,
1996;
(d) by the Seller, if
(i) there shall have been a failure of a
condition precedent as provided in Article 7, and
(ii) the Buyer shall not have provided
reasonable assurance that such condition precedent will be
satisfied on or before October 30, 1996, and
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(iii) such condition precedent shall not
have been satisfied or waived prior to or on October 30,
1996;
(e) by the Buyer pursuant to Section 5.2 if an
event described in Section 5.2(a), (b) or (c) occurs prior to the
Closing Date.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF THE SELLER
Subject to the Schedules attached hereto and referred to
below, the Seller represents and warrants to the Buyer that:
3.1 Corporate Organization and Authority of the Seller. The
Seller is a corporation duly organized, validly existing and in good standing
under the laws of the State of Minnesota. The Seller has full corporate power
and authority to enter into this Agreement and all other documents required to
be entered into by the Seller pursuant hereto (this Agreement, together with
such other documents, being herein referred to as the "Agreements") and to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance by the Seller of the Agreements have been duly
authorized by all requisite corporate action. This Agreement has been, and each
of the other Agreements will be as of the Closing Date, duly executed and
delivered by the Seller, and (assuming due execution and delivery by the Buyer)
this Agreement constitutes, and each of the other Agreements when executed and
delivered will constitute, a valid and binding obligation of the Seller
enforceable against the Seller in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally or by general equitable
principles.
3.2 No Violation: Consents. The execution and
delivery by the Seller of the Agreements, the consummation by the
Seller of the transactions contemplated hereby and thereby and
the performance by the Seller of its obligations hereunder and
thereunder do not and will not, except as set forth on Schedule
3.2 hereto,
(a) conflict with or violate any of the
provisions of the certificate or articles of incorporation or by-
laws, each as amended, of the Seller,
(b) violate any law, ordinance, rule or
regulation or any judgment, order, writ, injunction or decree or similar command
of any court, administrative or governmental agency or other body applicable to
the Seller,
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(c) violate or conflict with the terms of, or
result in the acceleration of, any indebtedness or obligation of the Seller
under, or violate or conflict with or result in a breach of, or constitute a
default under, any material instrument, agreement, indenture, mortgage, deed of
trust or other contract to which the Seller is a party, or by which the Seller
is bound, or
(d) result in the creation or imposition of any
Encumbrance upon any of the Purchased Assets.
Except as set forth in Schedule 3.2 hereto, no consent,
authorization or approval of, or notice to, or filing or registration with, any
governmental body or authority, or any other third party, is required in
connection with the execution and delivery by the Seller of the Agreements, the
consummation by the Seller of the transactions contemplated hereby and thereby
and the performance by the Seller of its obligations hereunder or thereunder.
3.3 Title to Properties; Absence of Liens. The Seller has good
and valid title to, or subsisting leasehold interests in, those Purchased Assets
owned or leased by it, as the case may be, free and clear of all Encumbrances,
except for the following (collectively, "Permitted Encumbrances"):
(a) In the case of the Owned Real Property,
Encumbrances that do not interfere with the present use by the
Seller of the property subject thereto or affected thereby; and
(b) Encumbrances disclosed in Schedule 3.3
hereto.
3.4 Certain Events. Except as disclosed in Schedule 3.4
hereto, since December 25, 1995, the Seller has operated the Business in the
ordinary course and, except as set forth on Schedule 3.4 hereto, there has not
occurred:
(a) any damage, destruction or loss (whether or
not covered by insurance) materially adversely affecting the
Purchased Assets;
(b) any sale, transfer, pledge or other
disposition of any tangible or intangible assets of the Business
(except in the ordinary course of business);
(c) any capital appropriation or expenditure or
commitment therefor on behalf of the Seller for the Business in
excess of $25,000;
(d) any event or any other change in the
condition of the Seller which has, or could reasonably be expected to have, a
material adverse effect on the Purchased Assets or the Business;
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(e) any default by the Seller in any material
liability or obligation of the Seller for the Business or any material adverse
change in the terms of any contract or instrument for the Business to which the
Seller is a party;
(f) any waiver, cancellation, sale or other
disposition, for less than the face amount thereof, of any claim or right which
the Seller has against others which relate to the Business or the Purchased
Assets;
(g) any change in any method of accounting or
accounting practice; or
(h) any notices that any supplier or customer has
taken or contemplates any steps which could materially and
adversely disrupt the Business.
3.5 Financial Statements. The gross revenues of the
Business for the year ended December 25, 1995 are shown on
Schedule 3.5.
3.6 Environmental Matters.
(a) Except as set forth in Schedule 3.6, as of
the date of this Agreement, the Seller has obtained and is in compliance with
all permits, licenses and such other authorizations required to be obtained for
the operation of the Business and the ownership and use of the Purchased Assets
under currently applicable federal, state and local laws, including all rules
and regulations promulgated thereunder, relating to pollution or protection of
human health or the environment (the "Environmental Laws") except for any
permits, licenses or authorizations which, if not obtained, would not have a
material adverse effect on the Purchased Assets or the Business.
(b) Except as set forth in Schedule 3.6, the
Seller is, as of the date of this Agreement, with respect to the Business:
(i) in material compliance with all terms
and conditions of the permits, licenses and authorizations
referred to in Section 3.6(a) above, and
(ii) in material compliance with all other
limitations, restrictions, conditions, standards, prohibitions,
requirements and obligations contained in Environmental Laws presently
in effect.
(c) As of the date of this Agreement, there are
no civil, criminal or administrative actions, suits, hearings, proceedings,
written notices of violation, claims or demands pending or, to the best
knowledge of the Seller, threatened against the Seller under the Environmental
Laws which, if
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adversely determined against the Seller, would have a material adverse effect on
the Purchased Assets or the Business.
3.7 Employment Matters. To the best of the Seller's knowledge,
the Seller has not violated any Employment Laws, the violation of which would
have a material adverse effect on the Business or Purchased Assets. Schedule 3.7
also discloses any existing employee leave of absence for the Business that has
been identified or designated as a leave of absence subject to the FMLA.
There are no collective bargaining agreements in effect or any
labor organization representing any employees of the Seller at any location of
the Business. Within the last two (2) years, the Seller has not been the subject
of any union activity or labor dispute, nor has there been any strike of any
kind called, or threatened to be called, against any of them with respect to any
location of the Business.
3.8 Employee Benefits. No promise has been made by Seller to
any of its employees or former employees that the Buyer will continue, assume or
otherwise be responsible for any of the employee benefits that the Seller has
provided or is providing to such employees or former employees, or that the
Buyer will provide any employee benefits to employees who are hired by the Buyer
subsequent to Closing.
3.9 Property; Machinery and Equipment.
(a) The Purchased Assets that are owned by the
Seller that constitute fixed assets and that, as of the Closing Date, have not
been fully depreciated by the Seller, are in existence and in working condition,
in accordance with industry standards taking into account the age thereof.
(b) There are no material leases or other
agreements for the Business under which the Seller is lessee of or holds or
operates any items of machinery, equipment, motor vehicles, furniture and
fixtures or other property owned by any third party, which are not included in
the Assumed Liabilities or in the Schedules to this Agreement.
3.10 Contracts. The Seller has in all material respects
performed all of its obligations required to be performed by it to the date
hereof under, and are not in default in any material respect under, any contract
that is included in the Assumed Contracts.
3.11 Broker's and Finder's Fees. Neither the Seller nor
Holding nor KNP BT has incurred any liability to any broker, finder or agent or
any other person or entity for any fees or commissions with respect to the
transactions contemplated by this Agreement, and the Seller hereby agrees to
assume all liability
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to any such broker, finder or agent or any other person or entity claiming any
such fee or commission.
3.12 Litigation. There is no action, suit, proceeding or
investigation pending or, to the best knowledge of the Seller, threatened
against the Seller which would materially and adversely affect the Seller's
ability to consummate the transactions contemplated hereby or adversely affect
the Business or the Purchased Assets.
3.13 Tax Matters. To the best of the Seller's knowledge, the
Seller has filed all tax returns or reports which were required to be filed by
it for all periods prior to or including the Closing Date, and such returns or
reports are correct and complete in all material respects. All federal, state
and local income, profits, franchise, sales, use, occupation, property, excise,
payroll, withholding, employment, estimated and other taxes of any nature,
including interest, penalties and other additions to such taxes ("Taxes"),
payable by, or due from, the Seller for all periods prior to the date hereof
have been fully paid or adequately reserved for by the Seller, or, with respect
to Taxes required to be accrued, the Seller has properly accrued such Taxes. All
Taxes which the Seller is required by law to withhold or collect relating to the
Business have been duly withheld or collected and have been paid over to the
appropriate governmental agency or authority or are properly recorded as a
liability on the books of the Seller.
3.14 Disclaimer of Other Representations and Warranties;
Disclosure. The Seller does not make, or has not made, any representations or
warranties relating to any of the Purchased Assets or Assumed Liabilities or
otherwise in connection with the transactions contemplated hereby other than
those expressly set out herein which are made by the Seller. Without limiting
the generality of the foregoing, neither the Seller nor Holding or KNP BT has
made, or shall be deemed to have made, any representations or warranties in the
Confidential Memorandum dated November 1, 1995 relating to Holding and the
Seller supplied to the Buyer prior to the date hereof (the "Offering
Memorandum") or in any presentation of the business of the Seller in connection
with the transactions contemplated hereby, and no statement contained in the
Offering Memorandum or made in any such presentation shall be deemed a
representation or warranty hereunder or otherwise. It is understood that any
projections, forecasts or other predictions, any data, any financial information
or any memoranda or offering materials or presentations, including but not
limited to the Offering Memorandum, are not and shall not be deemed to be or to
include representations or warranties of KNP BT, Holding or the Seller. No
person has been authorized by KNP BT, Holding or the Seller to make any
representation or warranty relating to the Purchased Assets or the Assumed
Liabilities or otherwise in connection with the transactions contemplated hereby
and, if made, such
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representation or warranty must not be relied upon as having been authorized by
KNP BT, Holding or the Seller.
IN FURTHERANCE OF THE FOREGOING, THE PARTIES HERETO AGREE
THAT, EXCEPT AS SPECIFICALLY PROVIDED IN SECTION 3 OF THIS AGREEMENT AND EXCEPT
FOR THE EXISTING MANUFACTURER AND THIRD PARTY WARRANTIES ON THE PURCHASED ASSETS
WHICH ARE BEING ASSIGNED TO THE BUYER, THE PURCHASED ASSETS ARE BEING SOLD,
CONVEYED, TRANSFERRED AND ASSIGNED ON AN "AS IS, WHERE IS" BASIS "WITH ALL
FAULTS" AND THAT, EXCEPT AS SPECIFICALLY PROVIDED IN SECTION 3 OF THIS
AGREEMENT, KNP BT, HOLDING AND THE SELLER MAKE NO REPRESENTATIONS OR WARRANTIES
OF ANY NATURE, EXPRESS OR IMPLIED, CONCERNING THE PURCHASED ASSETS, INCLUDING
WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
3.15 Insurance. The Seller has not been refused any insurance,
nor has its coverage been limited or subject to any additional premiums because
of additional risks, by any insurance company within the last two years relating
to the Business and the Purchased Assets.
3.16 Transactions with Affiliates. Except as set forth on
Schedule 3.16, during the last two years, with respect to or for the Business,
the Seller has not purchased, leased, or otherwise acquired any material
property or assets or obtained material property or assets or obtained any
material services from, or sold, leased or otherwise disposed of any material
property or provided any material services to, any person or entity which is
affiliated with the Seller or any officer or director of the Seller or any
member of the immediate family of such officer and director.
3.17 Representations Concerning Real Estate. With
respect to the Owned Real Property, the Seller represents and
warrants as follows:
(a) To the best of Seller's knowledge, subject to
encumbrances listed on the ProForma Title Insurance Policy referred to on
Schedule 3.3 hereto, the Owned Real Property is free from any development, use
or occupancy restrictions, except those imposed by applicable law, and from all
special taxes or assessments, except those generally applicable to other
properties in the tax districts in which the Owned Real Property is located. No
options have been granted to others to purchase, lease or otherwise acquire any
interest in the Owned Real Property or any part thereof. To the best of Seller's
knowledge, subject to encumbrances listed on the ProForma Title Insurance
Policy, Seller has the exclusive right of possession of each tract or parcel
comprising the Owned Real Property.
(b) To the best of Seller's knowledge with the
exception that Seller makes no representations or warranties with
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respect to compliance with the Americans with Disabilities Act
("ADA"):
(i) the present use, occupancy and
operation of the Owned Real Property, and the Improvements thereof, as defined
herein, to the Owned Real Property are in compliance in all material respects
with all, and not in violation of any, Laws and with all restrictive covenants
of record; and
(ii) Seller has received no notice of any
proposed change therein that would affect in any material respect any of the
Owned Real Property or the present use, occupancy or operation thereof; and
(iii) Except to the extent same have been
cured, Seller has received no notice of any violation of any Laws, code, order,
rule, regulation, requirement or restrictive covenants of record, or notice of
any pending violation of any Laws, code, order, regulation, requirement or
restrictive covenants of record from any Government or other person relating to
any of the Owned Real Property or the activities thereon and knows of no fact
which would constitute grounds for receiving any such notice; and
(iv) Seller has received no notice that any
portion of the Owned Real Property is subject to any classification, designation
or preliminary determination of any Government or pursuant to any Law which
would restrict the use, development, occupancy or operation of the Owned Real
Property in connection with the Business in any material respect; and
(v) All building systems included within
the Improvements are in working order in accordance with industry standards,
taking into account the age thereof.
(c) Neither the Seller nor any other person has
caused any work or improvements to be performed upon or made to any of the Owned
Real Property for which there remains outstanding any payment obligation that
would or might serve as the basis for any lien in favor of the Person who
performed the work.
(d) As used in this Section 3.17, and for no
other purpose in this Agreement: "Government" shall mean any federal, national,
state, provincial, local, or municipal government or any department, commission,
board, bureau, agency instrumentality, unit, or taxing authority thereof.
"Known," "to the knowledge of," "to the best knowledge of" "aware" or words of
similar import employed in this Section 3.17 with reference to any individual or
entity shall be conclusively presumed to mean that the person or entity has made
reasonable efforts under the circumstances to become knowledgeable; in the case
of the Seller as a business entity, "knowledge" shall be deemed to be the
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individual and collective "knowledge" (as defined above) of its directors and
senior officers and managers. "Improvements" shall mean all buildings,
structures and other improvements of any and every nature located on the Owned
Real Property and all fixtures attached or affixed, actually or constructively,
to the Owned Real Property or to any such buildings, structures or other
improvements to the extent any of same materially affect the use and/or
operation of said Owned Real Property. "Law" shall mean all federal, national,
state, provincial, local, municipal constitutions, statutes, rules, regulations,
ordinances, acts, codes, legislation, treaties, conventions, judicial decisions
and similar laws and legal requirements, whether of the United States of America
or any other jurisdiction in which the Owned Real Property is located as in
effect at the time of the Closing.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Seller that:
4.1 Organization. The Buyer is a corporation duly organized
and validly existing and in good standing under the laws of the State of
Pennsylvania.
4.2 Corporate Authority. The Buyer has full corporate power
and authority to enter into this Agreement and all other documents required to
be entered into by the Buyer pursuant hereto and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by the
Buyer of this Agreement and all other documents required to be entered into by
the Buyer pursuant hereto (the "Other Agreements") have been duly authorized by
all requisite corporate action. This Agreement has been, and each of the Other
Agreements will be as of the Closing Date, duly executed and delivered by Buyer,
and (assuming due execution and delivery by the Seller) this Agreement
constitutes, and all other documents required to be entered into by the Buyer
pursuant hereto when executed and delivered will constitute, a valid and binding
obligation of the Buyer, enforceable against the Buyer in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally or by
general equitable principles.
4.3 No Violation: Consents. The execution and
delivery by the Buyer of this Agreement and the other agreements,
documents and instruments contemplated hereby, the consummation
by the Buyer of the transactions contemplated hereby and thereby
and the performance by the Buyer of its obligations hereunder and
thereunder will not
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(a) conflict with or violate any of the
provisions of the certificate of incorporation or by-laws of the
Buyer,
(b) violate any law, ordinance, rule or
regulation or any judgment, order, writ, injunction or decree or similar command
of any court administrative or governmental agency or other body applicable to
the Buyer, or
(c) violate or conflict with the terms of, or
result in the acceleration of, any indebtedness or obligation of the Buyer
under, or violate or conflict with or result in a breach by the Buyer of, or
constitute a default under, any material instrument, agreement or indenture or
any mortgage, deed of trust or similar contract to which the Buyer is a party or
by which the Buyer or any of its assets may be otherwise bound or affected.
Except as set forth in Schedule 4.3 hereto, no
consent, authorization or approval of, or notice to, or filing or registration
with, any governmental body or authority, or any other third party, is required
in connection with the execution and delivery by the Buyer of this Agreement and
the other agreements, documents and instruments to be executed and delivered in
connection herewith, the consummation by the Buyer of the transactions
contemplated hereby and thereby and the performance by the Buyer of its
obligations hereunder and thereunder.
4.4 Broker's and Finder's Fees. The Buyer has not incurred any
liability to any broker, finder or agent or any other person or entity for any
fees or commissions with respect to the transactions contemplated by this
Agreement, and the Buyer hereby agrees to assume all liability to any such
broker, finder or agent or any other person or entity claiming any such fee or
commission.
4.5 Litigation. There is no action, suit, proceeding or
investigation as of the date hereof pending or, to the best knowledge of the
Buyer, threatened against the Buyer which would materially and adversely affect
the Buyer's ability to consummate the transactions contemplated hereby.
4.6 Financing. The Buyer has sufficient funds (or
access to sufficient funds) to consummate the transactions
contemplated hereby.
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ARTICLE 5.
CERTAIN COVENANTS AND AGREEMENTS
OF THE SELLER AND THE BUYER
5.1 Conduct of Business Prior to the Closing Date. The
Seller agrees that, between the date hereof and the Closing Date:
(a) Except as contemplated by this Agreement or
permitted by written consent of the Buyer, the Seller shall operate the Business
only in the ordinary course consistent with prior practice (including, without
limitation, maintaining all insurance coverages in place as of the date hereof).
(b) The Seller shall use its reasonable best
efforts to preserve its business organization intact and shall use its
reasonable best efforts to keep available to the Buyer the services of the
present employees of the Seller and to preserve for the Buyer the goodwill of
the Seller's material suppliers and customers and others having material
business relations with the Seller.
5.2 Risk of Loss Prior to Closing Date. The risk of
loss to any of the Purchased Assets shall remain with Seller
until the Closing. If, before the Closing
(a) all or any part of the Purchased Assets is
taken by eminent domain;
(b) a condemnation proceeding has been filed or
is threatened against the Purchased Assets or any part thereof;
or
(c) all or any material part of the Purchased
Assets is destroyed or materially damaged,
then Seller promptly shall provide written notice to Buyer of any such event and
Buyer may inspect the Purchased Assets subject to such event within ten (10)
days after receiving Seller's notice. Within ten (10) days after the completion
of such inspection, the Buyer may terminate this Agreement as a result of such
event without further obligation by delivering written notice of such
termination to the Seller within such 10 day period. If Buyer does not so
terminate this Agreement, the Buyer will be deemed for all purposes hereunder to
have agreed to take such Purchased Assets in the condition in which they exist
after such event (and this Agreement shall be deemed amended for all purposes to
so provide), in which case the Seller shall, at the Closing, assign and transfer
to the Buyer all of the Seller's right, title and interest in and to any awards
or insurance proceeds payable to the Seller as a result of such event.
5.3 Employees. At least two (2) weeks prior to the
Closing Date, the Buyer shall notify the Seller in writing as to
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which employees of the Seller for the Business to whom the Buyer intends to
offer employment. At or prior to the Closing, the Buyer shall offer employment
to such employees upon terms and conditions of employment satisfactory to the
Buyer.
Moreover, any employees of Seller hired by Buyer shall be "at
will" employees of Buyer, meaning that either the employee or Buyer may
terminate the employment relationship at any time, with or without cause or
advance notice.
5.4 Use of Names and Logos. Anything herein to the contrary
notwithstanding, no interest in or right to use the names NV Koninklijke KNP BT,
VRG Holding B.V., VGC Holding USA, Inc. or VGC Corp. or any derivatives thereof
or any trademarks or logos of any such company or the trademark/service mark
"VGC Advantage" (collectively, the "KNP BT Names and Logos") is being
transferred hereunder.
The Buyer agrees that it will, as promptly as
practicable but in any event within ninety (90) days following the Closing Date,
remove or obliterate any KNP BT Names and Logos from any Purchased Asset to
which any KNP BT Names and Logos has been affixed and from all signs, purchase
orders, invoices, sales orders, labels, letterheads, shipping documents and
other materials used by the Buyer (collectively, "Supplies") and will not
thereafter use any such Supplies which bear any such KNP BT Names or Logos;
provided, that, the Buyer may, for a period of up to one hundred and eighty
(180) days after the Closing Date, use the Seller's remaining inventory of
Supplies which contain any of the KNP BT Names and Logos provided such Supplies
are (i) used only in connection with the sale of inventory included in the
Purchased Assets and (ii) conspicuously marked with the company name of the
Buyer, and provided further that all products sold in connection with the use of
such Supplies shall be of a quality at least equal to that of similar products
sold by the Seller prior to the Closing Date. The Buyer will not, and will cause
each of its affiliates not to, misappropriate, misrepresent or otherwise
infringe, abuse or diminish the value of any of the KNP BT Names and Logos.
5.5 Collection of Seller Receivables.
(a) The Buyer shall, for 180 days after the
Closing Date, act as collection agent for the Seller with respect to the
collection of the Seller's trade accounts receivable for the Business (the
"Seller Receivables"), which, as provided in Section 1.8 hereof, are an Excluded
Asset. In collecting the Seller Receivables for the Seller, the Buyer shall use
efforts consistent with the efforts used by the Buyer in the collection of its
own accounts receivable, exclusive, however, of suit or other third-party
collection methods. Amounts received by the Buyer from parties that have
outstanding Seller Receivables shall be applied first against the oldest of
Seller Receivables, in order of age, owed by such party until all Seller
Receivables
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owed by such party are paid in full and then to other amounts owed by such party
to the Buyer, except that amounts shall not be applied against a Seller
Receivable, or portion thereof (if only a portion thereof is in dispute), that
is subject to a bona fide dispute by the customer until such dispute is
resolved.
(b) The Buyer shall maintain complete and
accurate records of its collection activities for the Seller Receivables on
behalf of the Seller. Commencing one month after Closing, and on the tenth day
of each month thereafter, the Buyer shall remit to the Seller the net proceeds
collected by the Buyer on behalf of the Seller for the Seller Receivables during
the preceding calendar month, together with a report detailing the collection
activity and outstanding balance of the Seller Receivables, as well as such
other information in connection with the Seller Receivables and the collection
thereof as the Seller shall reasonably request.
(c) The Buyer shall provide access to the Seller
to such records and documents of the Buyer as the Seller shall reasonably
request to verify and substantiate compliance by the Buyer of this Section 5.5.
At the end of such 180 day period, or sooner with respect to specific files,
documents and records as requested by Seller, all files, documents and records
relating to the Seller Receivables that are in the Buyer's possession shall be
returned to the Seller. The Seller shall be entitled to pursue the collection of
any outstanding Seller Receivable at any time and in any manner that the Seller
desires. At the end of such 180 day period, Buyer shall provide to Seller a
detailed summary of all collection activity of the Buyer.
(d) Notwithstanding the foregoing, it is
understood that, with respect to those parties which had done business with
Buyer and had outstanding balances with Buyer on the date of Closing for
business transacted prior to Closing, payments to Buyer for such business
arising prior to Closing will not be considered with respect to this paragraph.
5.6 Certain Taxes and Fees.
(a) All sales and transfer and other similar
taxes and/or fees which may be due or payable in connection with the
transactions contemplated hereby shall be borne by the Buyer.
(b) All documentary recording costs and fees
shall be borne by the Buyer.
(c) The following taxes, charges and payments
("Charges") shall be prorated on a per diem basis and apportioned
between the Seller and the Buyer as of the date of the Closing:
real property, use and intangible taxes, utility charges, rental
or lease charges, license fees, general assessments imposed with
respect to the Purchased Assets, and employee payrolls. The
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Seller shall be liable for and shall pay that portion of the Charges relating
to, or arising in respect of, periods prior to the date of the Closing and the
Buyer shall be liable for and shall pay that portion of the Charges relating to,
or arising in respect of, any period on and after the date of the Closing.
5.7 Access to Information and Confidentiality. The
-----------------------------------------
Seller shall permit the Buyer and its representatives to have
reasonable access during normal business hours, upon reasonable
advance notice, to the books and records and properties of the
Seller in connection with the transactions contemplated hereby.
The Buyer hereby confirms the terms and provisions of that
certain confidentiality agreement dated October 23, 1995 between
the Buyer and Holding (the "Confidentiality Agreement"), and such
terms are hereby incorporated herein, in its entirety, by this
reference. The Buyer further acknowledges and agrees that all
information provided to the Buyer hereunder shall constitute
Confidential Material (as such term is defined in the
Confidentiality Agreement), and that the provisions of this
Section 5.7, including the terms and provisions of the
Confidentiality Agreement, shall survive the termination of this
Agreement for any reason.
5.8 Books and Records; Personnel. For a period of seven years
from the Closing Date (or such other period as specified herein or such longer
period as may be required by any governmental agency or requested by the Seller
or Buyer in connection with disputes or litigation):
(a) Neither the Seller nor the Buyer shall
dispose of or destroy any of the books and records included in the Purchased
Assets without first offering to turn over possession thereof to the other party
by written notice to the other party at least thirty (30) days prior to the
proposed date of such disposition or destruction.
(b) The Buyer shall allow the Seller and its
agents reasonable access upon reasonable advance notice to all books and records
included in the Purchased Assets during normal business hours at Buyer's
principal places of business or at any location where any such books and records
are stored, and the Seller shall have the right, at its own expense, to make
copies of any such books and records; provided, however, that any such access or
copying shall be had or done in such a manner so as not to unreasonably
interfere with the normal conduct of the Buyer's business.
(c) The Buyer shall make available to the Seller
upon the Seller's reasonable written request
(i) copies of any books and records included
in the Purchased Assets,
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(ii) the Buyer's personnel to assist the
Seller in locating and obtaining any such books and records,
(iii) any of the Buyer's personnel whose
assistance or participation is reasonably required by the Seller in
anticipation of, or preparation for, existing or future litigation, tax
returns (including sales tax returns) or other similar matters in which
Seller is involved, and
(iv) any of the Buyer's personnel whose
assistance or participation is reasonably required by the Seller in
connection with the Seller's obligation to pay accounts payable of the
Business as of the Closing when due (which obligation of the Seller is
not an Assumed Liability pursuant to this Agreement).
The Seller shall reimburse the Buyer for the
reasonable out-of-pocket costs and expenses incurred by the Buyer in performing
the covenants contained in this Section 5.8(c).
(d) For a period of six (6) months after the
Closing Date, the Seller shall make available to the Buyer, upon the Buyer's
reasonable request, any of the Seller's personnel whose assistance is required
by the Buyer with respect to matters involving the Purchased Assets, Assumed
Liabilities or the transactions contemplated hereby. The Buyer shall reimburse
the Seller for the reasonable out-of-pocket expenses incurred by the Seller in
performing the covenants contained in this Section 5.8(d).
5.9 Other Negotiations. Neither KNP BT, Holding or the Seller
shall pursue, initiate, encourage or engage in any negotiations or discussions
with, or provide any information to, any other person or entity (other than the
Buyer and its representatives) regarding the sale of any of the Purchased
Assets.
5.10 Press Releases. Except as required by law, any
public announcements regarding the transactions contemplated
hereby shall be made only with the mutual consent of the Seller
and the Buyer.
5.11 Closing Conditions. Each party shall use all reasonable
best efforts (and shall cause its affiliates, successors and assigns, if
applicable, to use all reasonable best efforts) to satisfy promptly the
conditions to Closing set forth in Article 6 hereof (in the case of the Seller)
or Article 7 hereof (in the case of the Buyer) required herein to be satisfied
and any other covenants or agreements of such party to be satisfied prior to the
Closing.
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5.12 Covenant Not To Compete. Each of the Seller,
Holding and KNP BT hereby agrees that it will not, directly or
indirectly:
(a) compete with any of the Business within the
States of Iowa, Minnesota, Nebraska and Wisconsin for a term of
five (5) years from the Closing; or
(b) use any of the proprietary information or
trade secrets of the Seller to obtain an unfair advantage in
competing against the Business purchased from the Seller; and,
(c) solicit or hire any of the employees of the
Seller who are employed by the Buyer at the Closing for a period of three (3)
years after the Closing.
The foregoing covenant not to compete shall not
apply to BT Office Products International, Inc. and its subsidiaries and to the
sale by the Seller, Holding or KNP BT of any of the Seller Inventory.
Furthermore, the foregoing covenant not to compete shall not restrict in any way
(i) KNP BT or any of its affiliates from selling anywhere in the United States
any product lines of Heidelberger Druckmaschinen AG and its affiliates,
MAN-Roland AG and its affiliates or Linotype Hell and its affiliates, or (ii)
VGC Credit Corp. from selling any repossessed equipment under existing equipment
leases of such company.
In the event that any provision of this Section
5.12 is determined to be invalid by any court or other entity of competent
jurisdiction, the provisions of this Section 5.12 shall be deemed to have been
amended, and the parties hereto agree to execute all documents necessary to
evidence such amendment, so as to eliminate or modify any such invalid provision
so as to carry out the intent of this Section 5.12 as far as possible and to
render the terms of this Section 5.12 enforceable in all respects as so
modified.
ARTICLE 6.
CONDITIONS PRECEDENT OF THE BUYER
The Buyer need not consummate the transactions contemplated by
this Agreement unless the following conditions shall be fulfilled by the Seller
or waived by the Buyer:
6.1 Representations and Warranties. Except as
otherwise contemplated or permitted by this Agreement,
(a) the representations and warranties of the
Seller contained in this Agreement shall be true and correct in all material
respects at and as of the date of this Agreement and shall be deemed to have
been made again at and as of the Closing
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Date and shall then be true and correct in all material respects, except to the
extent that any representation or warranty is made as of a specified date, in
which case such representation and warranty shall be true in all material
respects as of such date, and
(b) the Seller shall have performed and complied,
in all material respects, with all agreements and covenants required by this
Agreement to be performed or complied with by it prior to or on the Closing
Date, and the Buyer shall have been furnished with a certificate of an
appropriate officer of the Seller, dated the Closing Date, certifying to the
accuracy of this Section 6.1.
6.2 No Actions. No action, suit, or proceeding before any
court or governmental or regulatory authority shall be pending, no investigation
by any governmental or regulatory authority shall have been commenced, and no
action, suit or proceeding by any governmental or regulatory authority shall
have been threatened, against the Buyer, the Seller, Holding, KNP BT, or any of
the principals, officers or directors of any of them, seeking to restrain,
prevent or change the transactions contemplated hereby or questioning the
legality or validity of any such transactions or seeking damages in connection
with any such transactions.
6.3 Consents. All material consents, approvals and
authorizations of any third person and governmental or regulatory authorities,
and all material filings with and notifications of governmental authorities and
regulatory agencies or other entities which regulate the Business of the Seller
or the Buyer, necessary on the part of the Seller or the Buyer to the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby, shall have been obtained or effected (and all applicable
waiting periods, if any, including any extensions thereof, under any applicable
law, statute, regulation or rule, including but not limited to the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), if
applicable, shall have expired or terminated, as applicable).
6.4 Closing Documentation. The Buyer shall have
received the following documents, agreements and instruments from
the Seller:
(a) the Bill of Sale and all necessary deeds,
assignments, documents and instruments to effect the transfers, conveyances and
assignments to the Buyer referred to in Article 1 hereof, free and clear of all
Encumbrances except for Permitted Encumbrances;
(b) evidence, reasonably satisfactory to the
Buyer, of the authority and incumbency of the persons acting on
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behalf of the Seller in connection with the execution of any
document delivered in connection with this Agreement;
(c) a copy of the resolutions of the sole
shareholder of the Seller authorizing the transactions
contemplated hereby, certified by the Secretary or an Assistant
Secretary of the Seller; and
(d) such other instruments and documents as the
Buyer shall reasonably request not inconsistent with the provisions hereof.
6.5 Effectiveness of Certain Contracts. The Buyer shall have
received reasonable assurances from the companies set forth on Schedule 6.5
hereof that the distributor contracts relating to the Business to which such
companies and the Seller are a party will continue to be in full force and
effect after the Closing.
6.6 Physical Inventory. Concurrent with the Closing, the
Seller shall have caused a physical inventory to be taken of all of its
inventory and the Buyer and its auditing firm shall have had an opportunity to
observe and be present at such physical inventory and to review the work papers
of the Seller and its auditors with respect to such physical inventory.
6.7 Due Diligence. The results of the Buyer's due diligence
investigation concerning the Purchased Assets, the Assumed Liabilities and the
sales of the Business as reflected in its financial statements shall be
reasonably satisfactory to the Buyer.
ARTICLE 7.
CONDITIONS PRECEDENT OF THE SELLER
The Seller need not consummate the transactions contemplated
hereby unless the following conditions shall be fulfilled by the Buyer or waived
by the Seller:
7.1 Representations and Warranties. Except as
otherwise contemplated or permitted by this Agreement,
(a) the representations and warranties of the
Buyer contained in this Agreement shall be true and correct at and as of the
date of this Agreement and shall be deemed to have been made again at and as of
the Closing Date and shall then be true and correct, except to the extent that
any representation or warranty is made as of a specified date, in which case
such representation and warranty shall be true in all material respects as of
such date, and
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(b) the Buyer shall have performed and complied
with all agreements and covenants required by this Agreement to be performed or
complied with by it prior to or on the Closing Date, and the Seller shall have
been furnished a certificate of an appropriate officer of the Buyer, dated the
Closing Date, certifying to the accuracy of this Section 7.1.
7.2 No Actions. No action, suit, or proceeding before any
court or governmental or regulatory authority shall be pending, no investigation
by any governmental or regulatory authority shall have been commenced, and no
action, suit or proceeding by any governmental or regulatory authority shall
have been threatened, against the Buyer, the Seller, Holding, KNP BT, or any of
the principals, officers or directors of any of them, seeking to restrain,
prevent, or change the transactions contemplated hereby or questioning the
legality or validity of any such transactions or seeking damages in connection
with any such transactions.
7.3 Consents. All material consents, approvals and
authorizations of governmental and regulatory authorities, and all material
filings with and notifications of governmental authorities and regulatory
agencies or other entities which regulate the business of the Seller or the
Buyer, necessary on the part of the Seller or the Buyer to the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby, shall have been obtained or effected (and all applicable waiting
periods, if any, including any extensions thereof, under any applicable law,
statute, regulation or rule, including but not limited to the HSR Act, if
applicable, shall have expired or terminated, as applicable).
7.4 Closing Documentation. The Seller shall have
received the following from the Buyer:
(a) payment at Closing of the Estimated Purchase
Price pursuant to Section 1.5 hereof;
(b) evidence, reasonably satisfactory to the
Seller, of the authority and incumbency of the persons acting on behalf of the
Buyer in connection with the execution of any document delivered in connection
with this Agreement; and
(c) such other instruments and documents as the
Seller shall reasonably request not inconsistent with the provisions hereof.
7.5 Use Agreement. The Seller shall have received from the
Buyer a duly executed Letter Agreement permitting the Seller, after the Closing,
to use office space (including office facilities such as telephone, etc.) and to
use the Spectrum payroll system in the Buyer's Mendota Heights, Minnesota
facility for up to six (6) employees of the Seller, for a maximum term of
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one (1) year, such agreement to contain such terms as shall be mutually
agreeable to the Buyer and the Seller.
ARTICLE 8.
INDEMNIFICATION
8.1 Indemnification by the Seller. The Seller hereby agrees to
defend, indemnify and hold harmless the Buyer and its successors, assigns and
affiliates (collectively, the "Buyer Indemnitees") from and against any and all
liabilities, losses, injuries, damages, assessments, judgments, costs and
expenses, including without limitation the cost of any investigation or suit and
attorneys' fees relating thereto, (collectively, "Buyer Losses"), caused by,
resulting from or arising out of:
(a) breaches of the representations and
warranties hereunder on the part of the Seller contained in this Agreement or
from any misrepresentation in or omission from any certificate or instrument
furnished or to be furnished by the Seller hereunder;
(b) failures by the Seller to perform or
otherwise fulfill any undertaking or agreement or obligation or
covenant hereunder or in any certificate or instrument furnished
or to be furnished by the Seller hereunder;
(c) the assertion against any Buyer Indemnitee of
any liability or obligation of the Seller not expressly assumed by the Buyer
under this Agreement or under any other document or instrument delivered or to
be delivered hereunder (including, without limitation, all liabilities and
obligations of the Seller for Taxes); and/or
(d) the assertion against any Buyer Indemnitee of
any liability or obligation of the Seller relating to product liability or
warranty obligations which are not expressly assumed by the Buyer under Section
1.4(b) of this Agreement or under any other document or instrument delivered or
to be delivered hereunder.
8.2 Indemnification by the Buyer. The Buyer hereby agrees to
defend, indemnify and hold harmless the Seller and its successors, assigns and
affiliates (collectively, the "Seller Indemnitees") from and against any and all
liabilities, losses, injuries, damages, assessments, judgments, costs and
expenses, including without limitation the cost of any investigation or suit and
attorneys' fees relating thereto, (collectively, "Seller Losses"), caused by,
resulting from or arising out of:
(a) breaches of the representations and
warranties hereunder on the part of the Buyer contained in this
Agreement or from any misrepresentation in or omission from any
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certificate or instrument furnished or to be furnished by the
Buyer hereunder;
(b) failures by the Buyer to perform or otherwise
fulfill any undertaking or agreement or obligation or covenant
hereunder or in any certificate or instrument furnished or to be
furnished by the Buyer hereunder;
(c) the assertion against any Seller Indemnitee
of any liability or obligation assumed by the Buyer under this Agreement or
under any other document or instrument delivered or to be delivered hereunder;
(d) the assertion against any Seller Indemnitee
of any liability or obligation of the Buyer relating to the
business or operations of the Buyer; and/or
(e) the Buyer's use of any KNP BT Name or Logo,
whether or not pursuant to the terms of Section 5.4.
8.3 Remedies. Except for remedies that cannot be waived as a
matter of law, except for fraud and gross negligence, and except for the right
to seek injunctive relief, specific performance and rescission, and except as
otherwise specifically provided in this Agreement, the sole and exclusive remedy
of both the Buyer and the Seller hereunder shall be restricted to the
indemnification rights set forth in this Article 8.
8.4 Survival of Representations and Warranties. The
------------------------------------------
representations and warranties of the Seller and the Buyer
contained in this Agreement shall survive the Closing for a
period of one (1) year with the exception of the representations
and warranties contained in Section 3.3 (Title), in Section 3.6
(Environmental Matters) and in Section 3.13 (Taxes), which shall
survive the Closing until the expiration of the applicable
statutes of limitation, if any, plus a period of ninety (90)
days.
As to each representation and warranty of the
parties hereto, the date to which such representation and warranty shall survive
is hereinafter referred to as the "Survival Date." No claim for indemnification
with respect to a breach of a representation and warranty shall be made under
this Agreement after the applicable Survival Date unless prior to such Survival
Date the Buyer Indemnitee or the Seller Indemnitee, as the case may be, shall
have given the Seller or the Buyer, as the case may be, written notice of such
claim for indemnification based upon actual loss sustained, or potential loss
anticipated, as a result of the existence of any claim, demand, suit or cause of
action against such Buyer Indemnitee or Seller Indemnitee, as the case may be.
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8.5 Certain Limitations.
(a) No Buyer Losses shall be asserted by the
Buyer with respect to any matter which is covered by insurance, to the extent
proceeds of such insurance are received (net of any additional costs incurred by
reason of such recovery) by the Buyer. The Buyer shall, and shall cause other
Buyer Indemnitees to, use its best efforts to recover all insurance recoverable
in respect of a particular Buyer Loss.
(b) No claim may be made against the Seller for
indemnification pursuant to Section 8.1 hereto with respect to any individual
item of Buyer Losses, and Buyer Losses shall not include any individual item,
unless such item exceeds $1,000 (the "De Minimis Exclusion").
(c) The Seller shall be obligated to indemnify
the Buyer Indemnitees for Buyer Losses with respect to any matters under Section
8.1(a) of this Agreement when, and only when, the aggregate of all such Buyer
Losses with respect to all matters exceeds $75,000, and then the Seller shall be
liable for such Buyer Losses only to the extent that they exceed such amount
(the "Threshold"). The Seller's obligation to indemnify the Buyer Indemnitees
for Buyer Losses with respect to all matters shall be limited to an amount, or
amounts in the aggregate, equal to forty percent (40%) of the Purchase Price
(the "Cap").
(d) Notwithstanding the foregoing, neither
Section 8.5(b) or (c) above shall apply to, and the Seller shall indemnify Buyer
Indemnitees for all Buyer Losses with respect to, indemnification claims for a
breach of the representations and warranties contained in Section 3.3 (Title)
and in Section 3.13 (Taxes), it being further understood that all Buyer Losses
with respect to any such breach shall not be applied against, or used to reduce,
the Threshold.
(e) Notwithstanding any other provision hereof,
in no event shall the Seller be liable for or obligated to indemnify any Buyer
Indemnitee (i) to the extent such Buyer Losses relate to actions taken by such
Buyer Indemnitee or any of its affiliates, or (ii) from and against any
consequential, indirect or special damages, including, without limitation, lost
profits, business interruption and loss of business opportunities or goodwill
(other than any such consequential, indirect or special damages resulting from
claims from customers, vendors or employees of the Business, which claims would
be subject to the provisions of Sections 8.5(b) and (c) above). This exclusion
of consequential, indirect or special damages shall apply whether an action for
recovery of damages is sought based on contract, tort (including sole,
concurrent or other negligence or strict liability), statute or otherwise. To
the extent permitted by law, any statutory remedies which are inconsistent with
this Section 8.5(a) are hereby waived by the Buyer.
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8.6 Procedures Not Involving Third Party Claims.
(a) The Buyer shall notify the Seller in writing
of any indemnifiable claim, stated with particularity the amount due and the
reason therefor. The Seller shall, within 30 days of receipt of the Buyer's
notice, advise Buyer of whether or not Seller agrees with such claim. If Seller
agrees with such claim, then Seller shall pay any amounts with respect to such
claim within thirty days thereafter.
8.7 Procedures Regarding Third Party Claims. The
procedures to be followed by the Buyer Indemnitees and the Seller
with respect to indemnification hereunder regarding claims by
third persons shall be as follows:
(a) Promptly after receipt by any Buyer
Indemnitee or Seller Indemnitee, as the case may be, of notice of the
commencement of any action or proceeding (including, without limitation, any
notice relating to a tax audit) or the assertion of any claim by a third person,
which the person receiving such notice has reason to believe may result in a
claim by it for indemnity pursuant to this Agreement, such person (the
"Indemnified Party") shall give notice of such action, proceeding or claim to
the party against whom indemnification pursuant hereto is sought (the
"Indemnifying Party"), setting forth in reasonable detail the nature of such
action or claim, including copies of any written correspondence from such third
person to such Indemnified Party.
(b) The Indemnifying Party shall be entitled at
its own expense to assume and control such defense with counsel chosen by the
Indemnifying Party and approved by the Indemnified Party, which approval shall
not be unreasonably withheld or delayed. The Indemnified Party shall be entitled
to participate therein after such assumption of defense, the costs of such
participation following such assumption to be at its own expense. Upon assuming
such defense, the Indemnifying Party shall have full rights to enter into any
monetary compromise or settlement which is dispositive of the matters involved;
provided, that such settlement is paid in full by the Indemnifying Party and
will not have any continuing material adverse effect upon the Indemnified Party.
(c) With respect to any action, proceeding or
claim as to which the Indemnifying Party shall not have exercised its right to
assume the defense, the Indemnified Party shall assume and control the defense
of and contest such action, proceeding or claim with counsel chosen by it and
approved by the Indemnifying Party, which approval shall not be unreasonably
withheld or delayed. The Indemnifying Party shall be entitled to participate in
the defense of such action, the cost of such participation to be at its own
expense. The Indemnifying Party shall be obligated to pay the reasonable
attorneys' fees and expenses of the Indemnified Party to the extent that such
fees
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and expenses relate to claims as to which indemnification is due under Sections
8.1 or 8.2 hereof, as the case may be. The Indemnified Party shall have full
rights to dispose of such action and enter into any monetary compromise or
settlement; provided, however, that the Indemnified Party shall not settle or
compromise any claims without the approval of the Indemnifying Party, which
approval shall not be unreasonably withheld or delayed.
(d) Both the Indemnifying Party and the
Indemnified Party shall cooperate fully with one another in connection with the
defense, compromise or settlement of any such claim, proceeding or action,
including, without limitation, by making available to the other all pertinent
information and witnesses within its control.
ARTICLE 9.
GUARANTY OF KNP BT AND HOLDING
9.1 Guaranty. KNP BT and Holding jointly and severally hereby
guarantee the due and punctual payment, observance and performance by the Seller
of each and all of the obligations and liabilities of the Seller under this
Agreement, subject to all of the conditions and limitations thereon as set forth
herein (including, without limitation, those conditions and limitations set
forth in Sections 8.3, 8.4 and 8.5 hereof). All of the foregoing liabilities and
obligations of the Seller under this Agreement, together with any and all
reasonable fees, costs and expenses (including, without limitation, attorneys'
fees) which may be paid or incurred by the Buyer in enforcing or collecting the
obligations of KNP BT and Holding under this Guaranty, are hereinafter called,
collectively, the "Guaranteed Obligations" and, individually, a "Guaranteed
Obligation."
9.2 Notice to KNP BT and Holding. KNP BT and Holding hereby
agree that if any Guaranteed Obligation is not paid, observed or performed, as
the case may be, when and as due, the Buyer may notify KNP BT and Holding of
such non-performance, whereupon KNP BT and Holding shall cause the Seller to
promptly pay, observe or perform, or KNP BT and Holding, jointly and severally,
will promptly pay, observe or perform, as the case may be, such Guaranteed
Obligation.
9.3 Absoluteness of Guaranty. The obligations of KNP BT and
Holding under this Guaranty shall be absolute and unconditional, present and
continuing, irrespective of any bankruptcy proceeding involving the Seller or
any voluntary or involuntary liquidation, dissolution or winding up of the
affairs of or termination of the existence of the Seller.
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9.4 Exhaustion of Remedies Not Required. KNP BT and Holding
agree that it shall not be necessary for the Buyer or the Buyer Indemnitees, or
their legal representatives, successors or assigns to institute suit or exhaust
their legal remedies against the Seller in order to enforce this guaranty.
9.5 No Limitation of Remedies. KNP BT and Holding consent and
agree that in the event of a breach under the Agreements, the Buyer, Buyer
Indemnitees, and their legal representatives, successors or assigns, shall have
the right to pursue any remedy at law or equity against the Seller, KNP BT or
Holding, and may pursue a claim against the Seller, KNP BT or Holding
individually or jointly, with or without joining either or any of them in any
claim or action.
9.6 Ownership. KNP BT and Holding, jointly and
severally, represent and warrant to the Buyer that:
(a) KNP BT and Holding are corporations duly
organized, validly existing and in good standing under the laws of its state or
country of incorporation. Each of KNP BT and Holding has full corporate
authority to enter into this Agreement and any of the other Agreements to which
it is a party and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance by each of KNP BT and Holding
of this Agreement and any of the other Agreements to which it is a party have
been duly authorized by all requisite corporate action. This Agreement has been,
and each of the other Agreements to which KNP BT or Holding is a party will be
as of the Closing Date, duly executed and delivered by each of KNP BT and/or
Holding, as the case may be, and (assuming due execution and delivery by the
Buyer) this Agreement constitutes, and each of such other Agreements when
executed and delivered will constitute, a valid and binding obligation of KNP BT
and/or Holding, as the case may be, enforceable against such party in accordance
with its terms, except that such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights generally
or by general equitable principals.
(b) Holding is the record and beneficial owner of
all the issued and outstanding shares of the Seller. Holding is
an indirect wholly owned subsidiary of KNP BT.
(c) The execution and delivery by each of KNP BT
and Holding of the Agreements to which it is a party, the consummation by each
of KNP BT and Holding of the transaction contemplated hereby and thereby and the
performance by each of KNP BT and Holding of its obligations hereunder and
thereunder do not and will not (I) conflict with or violate any of the
provisions of the certificate of incorporation or other organizational documents
of such party, (ii) violate any law, ordinance, rule or regulation or any
judgment, order, writ, injunction or decree or similar command of any court,
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administrative or governmental agency or other body applicable to such party,
and (iii) violate or conflict with the terms of or result in a breach of or
constitute a default under any material instrument, agreement, indenture,
mortgage, deed of trust or other contract to which such party is a party.
(d) Except as set forth in Schedule 3.2 hereto,
no consent authorization or approval of, or notice to, or filing or registration
with, any governmental body or authority, or any other third party, is required
in connection with the execution and delivery by each of KNP BT and Holding of
the Agreements to which it is a party, the consummation by each of KNP BT and
Holding of the transactions contemplated hereby and thereby and the performance
by each of KNP BT and Holding of its obligations hereunder or thereunder.
ARTICLE 10.
MISCELLANEOUS
10.1 Cooperation. Each of the parties hereto shall use its
reasonable best efforts to take or cause to be taken all actions, to cooperate
with the other party hereto, with respect to all actions, and to do or cause to
be done all things necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement.
10.2 Waiver. Any failure of the Seller to comply with any of
its obligations or agreements herein contained may be waived only in writing by
the Buyer. Any failure of the Buyer to comply with any of its obligations or
agreements herein contained may be waived only in writing by the Seller.
10.3 Notices. All notices, claims, certificates, requests,
demands and other communications hereunder shall be given in writing and shall
be delivered personally or sent by telecopier or by a nationally recognized
overnight courier, postage prepaid, and shall be deemed to have been duly given
when so delivered personally or sent by telecopier, with receipt confirmed, or
two (2) business days after the date of deposit with such nationally recognized
overnight courier. All such notices, claims, certificates, requests, demands and
other communications shall be addressed to the respective parties at the
addresses set forth below or to such other address as the person to whom notice
is to be given may have furnished to the others in writing in accordance
herewith.
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(i) If to the Buyer, to:
PrimeSource Corporation
4350 Haddonfield Road, Suite 222
Pennsauken, NJ 08109
Telecopier: (609) 486-2999
Telephone: (609) 488-4888
Attention: William A. DeMarco
(with a copy to):
Barry Maulding, Esq.
PrimeSource Momentum
355 Treck Drive
Seattle, WA 98188
Telecopier: (206) 394-5587
Telephone: (206) 394-5582
(ii) If to KNP BT, Holding or the Seller, to:
NV Koninklijke KNP BT
Hoogoorddreef 62
1100 DE Amsterdam ZO
The Netherlands
Telecopier: 011-31-20-691-8849
Telephone: 011-31-20-651-1104
Attention: Heidi van der Kooij, Esq.
(with a copy to):
Winthrop, Stimson, Putnam & Roberts
Financial Centre
695 East Main Street
Stamford, CT 06904
Telecopier: (203) 965-8226
Telephone: (203) 348-2300
Attention: Frank W. Hogan, III, Esq.
The Buyer, KNP BT, Holding and the Seller may
change the address or telecopier number to which such notices or communications
are to be directed by giving written notice to the other in the manner provided
in this Agreement.
10.4 Governing Law and Consent to Jurisdiction.
(a) This Agreement shall be governed by and
construed in accordance with the internal substantive laws, and not the choice
of law rules, of the State of Minnesota.
(b) Any judicial proceeding brought with respect
to this Agreement must be brought in any court of competent jurisdiction in the
State of Minnesota, and, by execution and delivery of this Agreement, each party
(i) accepts, generally and unconditionally, the exclusive jurisdiction of such
courts and
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any related appellate court, and irrevocably agrees to be bound by any judgment
rendered thereby in connection with this Agreement and (ii) irrevocably waives
any objection it may now or hereafter have as to the venue of any such suit,
action or proceeding brought in such a court or that such court is an
inconvenient forum. THE PARTIES HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING TO WHICH THEY ARE BOTH PARTIES INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT.
10.5 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
10.6 Headings. The section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
10.7 Entire Agreement. This Agreement, including the Exhibits
and Schedules hereto and the documents referred to herein, embodies the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter. There
are no representations, promises, warranties, covenants or undertakings of the
parties other than as expressly set forth herein or therein.
10.8 Amendment and Modification. This Agreement may
be amended or modified only by written agreement of the parties
hereto.
10.9 Binding Effect; Benefits. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and assigns. Nothing in this Agreement, express or implied, is
intended to confer on any person or entity other than the parties hereto and
their respective successors and assigns (and, to the extent provided in Sections
8.1 and 8.2, the Buyer Indemnitees and the Seller Indemnitees) any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
10.10 Assignability. This Agreement may not be
assigned in whole or in any part without the express written
consent of the other party.
10.11 Expenses. Except as otherwise set forth herein, each
party shall be responsible for its own legal fees and other costs and expenses
incurred in connection with this Agreement and the negotiation, consummation and
performance of the transactions contemplated hereby.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
PRIMESOURCE CORPORATION
By:
Name:
Title:
VGC CORP.
By:
Name:
Title:
VGC HOLDING USA, INC.
By:
Name:
Title:
NV KONINKLIJKE KNP BT
By:
Name:
Title:
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Schedules
Schedule 1.2(a) Inventory
Schedule 1.2(b) Tangible and Intangible Property
Schedule 1.2(c) Other Current Assets
Schedule 1.2(d) Operating Leases
Schedule 1.2(e) Miscellaneous Assets
Schedule 1.2(f) Real Property
Schedule 1.4(a) Assumed Liabilities
Schedule 1.4(b) Assumed Contracts
Schedule 1.6 Allocation Agreement
Schedule 1.8 Excluded Assets
Schedule 3.2 No Violation; Consents
Schedule 3.3 Permitted Encumbrances
Schedule 3.4 Certain Events
Schedule 3.5 Financial Statements
Schedule 3.6 Environmental Matters
Schedule 3.16 Transactions with Affiliates
Schedule 4.3 No Violation; Consents
Schedule 6.5 Effectiveness of Certain Contracts
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Exhibits
Exhibit 1.9(a) Bill of Sale; Assignment and Assumption of Lease
Agreements; Lessors' Consent and Estoppel
Certificates
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