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Title: |
Asset Purchase Agreement |
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Entities: |
Ableco Finance LLC; Boeing Co.; Houlihan Lokey Howard & Zukin Inc.; TransTechnology Corp.; Dechert LLP; Norco, Inc.; Marathon Power Technologies Company |
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Date: |
2003 |
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Size: |
Preview shows 38KB of 221KB total |
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Price: |
$61 |
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ID: |
#131177 |
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ASSET PURCHASE AGREEMENT
dated as of January 24, 2003
among
TransTechnology Corporation
and
Norco, Inc.
and
Marathon Power Technologies Company
{PAGE}
TABLE OF CONTENTS
{TABLE}
{S} {C}
ARTICLE I - PURCHASE AND SALE OF THE ASSETS AND LIABILITIES.......................................................1
1.1. Transfer of Assets..............................................................................1
1.2. Excluded Assets.................................................................................3
1.3. Assumption of Liabilities.......................................................................3
1.4. Excluded Liabilities............................................................................3
1.5. Consideration...................................................................................5
1.6. Purchase Price Adjustment.......................................................................6
1.7. Purchase Price Allocation.......................................................................7
ARTICLE II - REPRESENTATIONS AND WARRANTIES RELATING TO THE PARENT................................................8
2.1. Due Authorization and Execution.................................................................8
2.2. Ownership of Stock..............................................................................8
2.3. Organization....................................................................................8
2.4. No Conflicts....................................................................................8
2.5. Consents........................................................................................9
2.6. Fees, Commissions and Expenses..................................................................9
ARTICLE III - REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY.............................................10
3.1. Organization of the Company....................................................................10
3.2. Due Authorization and Execution................................................................10
3.3. Capitalization and Corporate Records of the Company............................................10
3.4. Dividends and Distributions....................................................................11
3.5. Financial Statements...........................................................................11
3.6. No Undisclosed Liabilities.....................................................................11
3.7. Absence of Certain Changes.....................................................................12
3.8. Customers and Suppliers........................................................................13
3.9. Taxes..........................................................................................14
3.10. Litigation.....................................................................................16
3.11. Consents, Violations and Authorizations........................................................16
3.12. Agreements, Contracts, Commitments and Leases..................................................17
3.13. Assets.........................................................................................19
3.14. Inventory......................................................................................20
3.15. Accounts Receivable............................................................................20
3.16. Intellectual Property..........................................................................20
3.17. Insurance......................................................................................21
3.18. Compliance with Law............................................................................22
3.19. Employee Benefit Plans.........................................................................22
3.20. Labor Matters..................................................................................23
3.21. Fees, Commissions and Expenses.................................................................23
3.22. Environmental Laws and Regulations.............................................................24
3.23. Real Property..................................................................................26
3.24. Product Warranties.............................................................................26
3.25. Transactions with Affiliates; Intercompany Accounts............................................26
{/TABLE}
i
{PAGE}
{TABLE}
{S} {C}
3.26. Indebtedness...................................................................................27
3.27. No Illegal Payments, etc.......................................................................27
3.28. Books and Records..............................................................................28
3.29. Due Consideration..............................................................................28
3.30. No Material Omission...........................................................................28
3.31. Exclusivity of Representations.................................................................28
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF THE BUYER.........................................................29
4.1. Due Authorization and Execution................................................................29
4.2. Organization of the Buyer......................................................................29
4.3. Consents, Violations and Authorizations........................................................29
4.4. Fees, Commissions and Expenses.................................................................30
ARTICLE V - CONDUCT OF BUSINESS PENDING CLOSING..................................................................30
5.1. Ordinary Course................................................................................30
5.2. No Acquisitions................................................................................30
5.3. No Dispositions................................................................................30
5.4. Employees......................................................................................30
5.5. Mortgages, Liens and Other Encumbrances........................................................31
5.6. Material Agreements............................................................................31
5.7. Capital Expenditures...........................................................................31
5.8. Distributions..................................................................................31
5.9. No Stock Issuances.............................................................................31
5.10. No Charter Amendments..........................................................................31
5.11. Representations and Warranties.................................................................31
5.12. Agreements.....................................................................................32
ARTICLE VI - CONDITIONS TO THE OBLIGATIONS OF THE BUYER..........................................................32
6.1. Representations and Warranties of the Company and the Parent...................................32
6.2. Opinion of Counsel for the Company and the Parent..............................................32
6.3. Absence of Litigation or Investigation.........................................................32
6.4. Requisite Regulatory Approvals.................................................................32
6.5. Consents.......................................................................................33
6.6. Authorization Documents........................................................................33
6.7. Material Adverse Effect........................................................................33
6.8. Audited Financial Statements...................................................................34
6.9. Release from Indebtedness......................................................................34
6.10. Assignment of Contracts........................................................................34
6.11. Lease..........................................................................................34
6.12. Trademarks.....................................................................................34
6.13. Fairness and Solvency Opinions.................................................................35
6.14. Delivery of Documents..........................................................................35
ARTICLE VII - CONDITIONS TO THE OBLIGATIONS OF THE COMPANY.......................................................35
7.1. Representations and Warranties of the Buyer....................................................35
7.2. Opinion of Counsel for the Buyer...............................................................36
7.3. Absence of Litigation or Investigation.........................................................36
{/TABLE}
ii
{PAGE}
{TABLE}
{S} {C}
7.4. Requisite Regulatory Approvals.................................................................36
7.5. Authorization Documents........................................................................36
7.6. Delivery of Documents, Payments................................................................36
ARTICLE VIII - SURVIVAL; INDEMNIFICATION.........................................................................36
8.1. Survival of Representations, Warranties and Covenants..........................................36
8.2. General Indemnification........................................................................37
ARTICLE IX - TAX MATTERS.........................................................................................39
9.1. Tax Cooperation................................................................................39
9.2. Transfer Taxes and Incremental State Income Taxes..............................................39
9.3. Tax Effect of Payments.........................................................................40
ARTICLE X - ADDITIONAL COVENANTS OF THE PARTIES..................................................................41
10.1. Access by Buyer and Agents.....................................................................41
10.2. Use of Name....................................................................................41
10.3. Environmental Transfer Statute.................................................................41
10.4. Environmental Remediation......................................................................42
10.5. Notices Prior to Closing.......................................................................43
10.6. Public Announcements...........................................................................43
10.7. HSR Filing.....................................................................................44
10.8. Financial Statements...........................................................................44
10.9. Survival.......................................................................................44
10.10. Employees and Employee Benefit Plans...........................................................44
10.11. Notices Regarding Acquisition Proposals........................................................46
10.12. Information Technology and Telephone Systems...................................................46
ARTICLE XI - POST-CLOSING COVENANTS OF THE PARTIES...............................................................46
11.1. Availability of Records to the Parent..........................................................46
11.2. Non-Compete; Non-Solicitation..................................................................47
11.3. Confidentiality................................................................................48
11.4. Payments to Employees..........................................................................48
11.5. Amounts Received In Respect of Assets..........................................................48
11.6. Survival.......................................................................................49
ARTICLE XII - CLOSING............................................................................................49
12.1. Closing........................................................................................49
12.2. Deliveries by the Company and the Parent at Closing............................................49
12.3. Deliveries by Buyer at Closing.................................................................50
ARTICLE XIII - TERMINATION.......................................................................................51
13.1. Termination....................................................................................51
13.2. Procedure Upon Termination.....................................................................51
ARTICLE XIV - GENERAL PROVISIONS.................................................................................52
14.1. Expenses.......................................................................................52
14.2. Certain Filings and Consents...................................................................52
{/TABLE}
iii
{PAGE}
{TABLE}
{S} {C}
14.3. Further Assurances.............................................................................52
14.4. Notices........................................................................................53
14.5. Successors.....................................................................................54
14.6. Permitted Assignments..........................................................................54
14.7. Entire Agreement...............................................................................55
14.8. Amendment and Modification.....................................................................55
14.9. Waiver of Compliance...........................................................................55
14.10. Gender; Number.................................................................................55
14.11. Severability...................................................................................55
14.12. Construction...................................................................................55
14.13. Governing Law..................................................................................56
14.14. Headings; Interpretation.......................................................................56
14.15. Enforcement of Agreement.......................................................................56
14.16. Counterparts...................................................................................56
{/TABLE}
iv
{PAGE}
LIST OF EXHIBITS
Exhibit A - Escrow Agreement
Exhibit B - Methodology for Calculating Net Working Capital
Exhibit C - Form of opinion of counsel to the Parent and the Company
Exhibit D - Form of opinion of counsel to the Buyer
Exhibit E - Bill of Sale and Assumption Agreement
LIST OF SCHEDULES
Schedule 3.5 Financial Statements
Schedule 3.6 No Undisclosed Liabilities
Schedule 3.7 Absence of Certain Changes
Schedule 3.8 Customers and Suppliers
Schedule 3.9 Taxes
Schedule 3.10 Litigation
Schedule 3.11 Consents, Violations and Authorizations
Schedule 3.12 Agreements, Contracts, Commitments and Leases
Schedule 3.13 Assets
Schedule 3.14 Inventory
Schedule 3.15 Accounts Receivable
Schedule 3.16 Intellectual Property
Schedule 3.17 Insurance
Schedule 3.18 Compliance with Law
Schedule 3.19 Employee Benefit Plans
Schedule 3.22 Environmental Laws and Regulations
Schedule 3.23 Real Property
Schedule 3.24 Product Warranties
Schedule 3.25 Transactions with Affiliates, Intercompany Accounts
Schedule 3.26 Indebtedness
Schedule 11.4 Payments to Employees
v
{PAGE}
INDEX OF DEFINED TERMS
{TABLE}
{CAPTION}
Defined Term Section
------------ -------
{S} {C}
1998 Transaction......................................................................... 10.4(a)
Acquisition Proposal..................................................................... 10.11
Action................................................................................... 1.4(b)
affiliate................................................................................ 3.7
Agreement................................................................................ Preamble
Allocation............................................................................... 1.7
Assets................................................................................... 1.1
Assumed Liabilities...................................................................... 1.3
Auditors................................................................................. 1.6(a)
Balance Sheet Date....................................................................... 3.5
Benefit Plans............................................................................ 3.19(a)
Boeing Contract.......................................................................... 3.8(b)
Boeing Letter Agreement.................................................................. 3.8(b)
Bill of Sale and Assumption Agreement.................................................... 12.2(a)
Business................................................................................. Preamble
Buyer.................................................................................... Preamble
Buyer Breach............................................................................. 13.1(c)
Buyer's 401(k) Plan...................................................................... 10.10(a)
Closing.................................................................................. 12.1
Closing Date............................................................................. 12.1
Closing Date Balance Sheet............................................................... 1.6(a)
Closing Payment.......................................................................... 1.5(b)
Code..................................................................................... 3.9(j)
Company.................................................................................. Preamble, 3.22(a)(i)
Company Expenses......................................................................... 14.1
Company-to-Parent Contracts.............................................................. 3.25(d)
Contracts................................................................................ 1.1(c)
Corporate Records........................................................................ 3.3
Customer Contracts....................................................................... 5.6
Damages.................................................................................. 8.2(a)
Deposit Amount........................................................................... 1.5(b)
ECAF..................................................................................... 10.3
ELUR..................................................................................... 10.4(a)
Environmental Conditions................................................................. 3.22(a)(iii)
Environmental Indemnification Agreements................................................. 6.10
Environmental Law........................................................................ 3.22(a)(iv)
Environmental Permits.................................................................... 3.22(a)(v)
ERISA.................................................................................... 3.19(a)
ERISA Affiliate.......................................................................... 3.19(d)
Escrow Agent............................................................................. 1.5(c)
Escrow Agreement......................................................................... 1.5(c)
Excluded Contracts....................................................................... 1.1(c)
Excluded Assets.......................................................................... 1.2
{/TABLE}
vi
{PAGE}
{TABLE}
{S} {C}
Excluded Liabilities..................................................................... 1.4
Final Effective Date Balance Sheet....................................................... 1.6(d)
Final Effective Net Working Capital Statement............................................ 1.6(d)
Final Payment Date....................................................................... 1.6(d)
Financial Statements..................................................................... 3.5
GAAP..................................................................................... 1.6(a)
Hazardous Wastes......................................................................... 3.22(a)(vi)
HSR Act.................................................................................. 2.4
Income Tax Escrow Amount................................................................. 9.2(b)
Incremental State Income Taxes........................................................... 9.2(b)
Indebtedness............................................................................. 3.26
Indemnified Party........................................................................ 8.2(c)
Indemnifying Party....................................................................... 8.2(c)
Intellectual Property.................................................................... 1.1(b)
Interim Financial Statements............................................................. 3.5
Key Customers............................................................................ 3.8(a)
Key Suppliers............................................................................ 3.8(a)
Liens.................................................................................... 2.4
Litigation Conditions.................................................................... 8.2(d)
Management............................................................................... 3.22(g)
Material Adverse Effect.................................................................. 3.1
Material Contract........................................................................ 3.12
Monthly Financial Statements............................................................. 10.8
Net Working Capital...................................................................... 1.6(a)
Net Working Capital Statement............................................................ 1.6(a)
Neutral Auditor.......................................................................... 1.6(c)
Norco Name............................................................................... 10.2(a)
Ordinary Course of Business.............................................................. 3.7
Owned Real Property...................................................................... 1.2(e)
Parent................................................................................... Preamble
Parent Breach............................................................................ 13.1(b)
Parent Group............................................................................. 3.9(m)(i)
Parent's 401(k) Plan..................................................................... 10.10(a)
Parent-to-Company Contracts.............................................................. 3.25(d)
PBGC..................................................................................... 3.19(d)(i)
Permits.................................................................................. 1.1(i)
Permitted Liens.......................................................................... 2.4
Person................................................................................... 3.1
Prime Rate............................................................................... 1.6(f)
Purchase Price........................................................................... 1.5(a)
Release.................................................................................. 3.22(a)(ii)
Remediation.............................................................................. 3.22(a)(viii)
Representatives.......................................................................... 10.1
Restricted Period........................................................................ 11.2(a)
Rohr Contract............................................................................ 3.8(b)
Rohr Letter Agreement.................................................................... 3.8(b)
{/TABLE}
vii
{PAGE}
{TABLE}
{S} {C}
Scheduled Closing Date................................................................... 12.1
Senior Lenders........................................................................... 2.5
Site..................................................................................... 3.22(a)(vii)
Specific Performance Sections............................................................ 14.15
Stock.................................................................................... 2.2
Subordinated Lenders..................................................................... 2.5
Tax Return............................................................................... 3.9(m)(iii)
Taxes.................................................................................... 3.9(m)(ii)
Taxing Authority......................................................................... 3.9(m)(iv)
Transaction Documents.................................................................... 2.1
Transfer Act............................................................................. 10.3
Transfer Taxes........................................................................... 9.2(a)
Transferred Employee..................................................................... 10.10(a)
Transition Period........................................................................ 10.10(f)
Year End Financial Statements............................................................ 3.5
{/TABLE}
viii
{PAGE}
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of
January 24, 2003, is entered into among NORCO, Inc., a Connecticut corporation
(the "Company"), TransTechnology Corporation, a Delaware corporation and the
parent corporation of the Company (the "Parent"), and Marathon Power
Technologies Company (the "Buyer").
WHEREAS, the Company is engaged in the business of
manufacturing a broad range of standard and custom-designed mechanical
apparatus, including without limitation, hold-open rods, special connecting
devices, linear motion actuators, power transmission components, mechanical
support systems and locking mechanisms (the "Business"); and
WHEREAS, the Company desires to sell the assets and assign
the liabilities of the Business, and the Buyer desires to purchase such assets
and assume such liabilities, all on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the mutual agreements
contained herein, intending to be legally bound hereby, the parties hereto
agree as follows:
ARTICLE I - PURCHASE AND SALE OF THE ASSETS AND LIABILITIES
1.1. Transfer of Assets.
Upon the terms and subject to the conditions herein set
forth, the Company and the Parent agree to sell, convey, transfer and assign to
the Buyer, and the Buyer agrees to purchase from the Company and the Parent, on
the Closing Date, all of the tangible and intangible assets, properties and
business of the Company and all of the tangible and intangible assets,
properties and business used or held for use in or otherwise material to the
conduct of the Business, whether real, personal or mixed, of every kind and
nature and wherever situated (which assets, properties and business shall
include all assets, goodwill, going concern value, rights, claims, contracts,
causes of action and properties, whether tangible or intangible, matured or
unmatured, known or unknown, contingent or fixed, whether or not any of such
assets have any value for accounting purposes or are carried or reflected on or
specifically referred to in Company's books or financial statements with
respect to the Business) (collectively, the "Assets"), except as provided in
Section 1.2, free and clear of all Liens except the Permitted Liens. The Assets
shall include, without limitation, all of the following:
(a) All assets reflected in the Financial Statements and
not disposed of in the Ordinary Course of Business as permitted by this
Agreement and all assets of the Business acquired after the date hereof;
(b) All patents, trademarks, trade names, service marks,
copyrights, software, trade secrets or know-how used in or necessary for the
conduct of the Company's business, including without limitation, the "Norco"
name (the "Intellectual Property");
{PAGE}
(c) All agreements, contracts, licenses, leases, notes,
evidence of indebtedness, letters of credit, instruments and other written or
oral commitments concerning the Business or to which the Business is subject or
entitled (the "Contracts"), but excluding (i) Contracts which provide for any
type of severance payments or benefits or stay bonuses to executives of the
Company, including without limitation, the Executive Severance Agreement, dated
October 15, 1998, between the Company and Surin Malhotra, (ii) Contracts which
provide for any type of indemnification of any executive or affiliate of the
Company, including without limitation, the Indemnification Agreement, dated
October 15, 1998, between the Company and Surin Malhotra and (iii) the
Consulting Agreement, dated March 5, 1999, between the Company and Joseph Metz
(collectively, the "Excluded Contracts");
(d) All owned and consigned inventory of the Business,
including supplies, raw materials, work in process and finished goods, both on
hand and on order;
(e) All furniture, trade fixtures, machinery, equipment
and other personal property of the Business, including without limitation, all
such items located at the Company's facility located at 139 Ethan Allen
Highway, Ridgefield, Connecticut;
(f) All deposits, deferred charges, security deposits,
escrowed funds, rights to refunds, prepaid items, credits, and rights of offset
relating to the Business;
(g) All credit balances of or inuring to the Business,
including rebates from suppliers;
(h) All books and records relating to the Business,
including, without limitation, accounting records, customer lists, sales
records, credit data and other information regarding customers, suppliers,
distributors and agents of the Business;
(i) All permits, licenses, franchises, authorizations,
certificates, approvals, registrations and other governmental authorizations
relating to the Business (including, without limitation, Parts Manufacturer
Approvals from the Federal Aviation Administration of the Department of
Transportation) (collectively, the "Permits");
(j) All part drawings and specifications, blueprints,
designs, test data, research and development files, memoranda, promotional
materials, logs, journals and other technical materials used in the Business;
(k) All rights to insurance proceeds relating to the
damage, destruction or impairment of any of the Assets;
(l) All accounts and notes receivable of the Business;
(m) All rights, claims or causes of action against any
Person relating to the Business; and
(n) All automobiles and other vehicles owned or leased
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