Asset Purchase Agreement (2006)Full Document 

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ASSET PURCHASE AGREEMENT

between

SENSUS METERING SYSTEMS INC.,

as Purchaser

and

ADVANCED METERING DATA SYSTEMS, L.L.C.,

as Seller

June 2, 2006

 



TABLE OF CONTENTS

 

          Page

ARTICLE 1     DEFINITIONS

   1

1.1

   Certain Defined Terms    1

1.2

   Other Defined Terms    10

1.3

   Accounting Terms    11

1.4

   Other Definitional Provisions    11

ARTICLE 2     PURCHASE AND SALE OF ASSETS

   11

2.1

   Purchase and Sale of the Purchased Assets    11

2.2

   Non-Transferable Contracts and Permits    14

2.3

   Assumption of Liabilities    14

2.4

   Closing Date Consideration; Adjustment of Closing Date Consideration    15

2.5

   Earnout    16

2.6

   Withholding and Transfer Taxes    16

2.7

   Purchase Price Allocation    17

2.8

   Closing    17

ARTICLE 3     REPRESENTATIONS AND WARRANTIES OF SELLER

   20

3.1

   Organization, Power and Authority; Capitalization    20

3.2

   Due Authorization    20

3.3

   No Violation; Consents and Notices    20

3.4

   Ownership of Purchased Assets    21

3.5

   Financial Statements; Distributions    21

3.6

   Absence of Changes    21

3.7

   Absence of Undisclosed Liabilities    23

3.8

   Leased Personal Property    23

3.9

   Real Property    23

3.10

   Contracts    24

3.11

   Intellectual Property    26

3.12

   Sufficiency and Condition of Assets    27

3.13

   Insurance    27

3.14

   Environmental Matters and OSHA    27

3.15

   Litigation    29

 

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TABLE OF CONTENTS

(continued)

 

          Page

3.16

   Tax Matters    29

3.17

   Employee Benefit Plans    29

3.18

   Labor Matters    30

3.19

   Compliance with Laws    31

3.20

   Accounts Receivable    32

3.21

   Customers and Suppliers    32

3 22

   Permits    32

3.23

   FCC Licenses and Related Matters    32

3.24

   Products    33

3.25

   Inventory    34

3.26

   Transactions with Affiliates    34

3.27

   Brokers and Finders    34

3.28

   Disclosure    34

3.29

   No Other Representations or Warranties    35

ARTICLE 4     REPRESENTATIONS AND WARRANTIES OF PURCHASER

   35

4.1

   Organization and Corporate Power    35

4.2

   Due Authorization    35

4.3

   No Violation; Consents and Notices    35

4.4

   Brokers and Finders    36

4.5

   Litigation and Claims    36

4.6

   Financial Capability    36

4.7

   FCC Licenses    36

4.8

   Operations    36

4.9

   Inspections; No Other Representations or Warranties    36

ARTICLE 5     COVENANTS

   37

5.1

   Efforts    37

5.2

   Conduct of Business Prior to Closing    37

5.3

   Access and Cooperation Prior to Closing    38

5.4

   Notification of Changes    39

5.5

   HSR; Consents    39

 

ii


TABLE OF CONTENTS

(continued)

 

          Page

5.6

   FCC Matters    39

5.7

   Certain Tax Matters    40

5.8

   Employees and Benefit Plans    40

5.9

   Consultants    41

5.10

   No Solicitation or Negotiation    41

5.11

   Confidential Information    41

5.12

   Public Statements    42

5.13

   Collection; Inquiries    42

5.14

   Repayment of Indebtedness    42

5.15

   TGB Funding Commitment and Marketing Undertaking    42

5.16

   Asset Transfer or Liquidation Transactions    43

5.17

   Financial Statements    44

5.18

   Southern Telecom Agreement    44

5.19

   Assignment and Recordation    44

5.20

   Confidential Information    44

5.21

   Alpha Storage Agreement    45

5.22

   Purchaser Loan    45

5.23

   Employment Agreements    45
ARTICLE 6     CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER    45

6.1

   Representations and Warranties    45

6.2

   Covenants    46

6.3

   Required Consent    46

6.4

   Governmental Approvals    46

6.5

   No Prohibition    46

6.6

   Documents    46
ARTICLE 7     CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER    46

7.1

   Representations and Warranties    46

7.2

   Covenants    46

7.3

   HSR Waiting Period    46

7.4

   No Prohibition    46

 

iii


TABLE OF CONTENTS

(continued)

 

          Page

7.5

   Documents    47

7.6

   Purchaser Parent Bye-Laws    47
ARTICLE 8     TERMINATION    47

8.1

   Termination    47

8.2

   Effect of Termination    47
ARTICLE 9     INDEMNIFICATION    47

9.1

   Survival    47

9.2

   Obligation to Indemnify    48

9.3

   Procedures for Indemnification: Third Party Claims    50

9.4

   Procedures for Indemnification: Other Claims    51

9.5

   Right of Setoff    52

9.6

   Adjustments to Losses    52

9.7

   Characterization of Indemnification Payments    52

9.8

   Remedies    52
ARTICLE 10     GENERAL PROVISIONS    52

10.1

   Fees and Expenses    52

10.2

   Bulk Sales Laws    53

10.3

   Notices    53

10.4

   Further Assurances    54

10.5

   Assignment; Binding Effect    54

10.6

   No Third Party Beneficiaries    54

10.7

   Independent Contractors; No Implied Obligations    54

10.8

   Headings    55

10.9

   Counterparts    55

10.10

   Integration of Agreement; Amendments and Waivers    55

10.11

   Schedules    55

10.12

   Governing Law; Waiver of Trial by Jury    55

10.13

   Partial Invalidity    56

10.14

   Construction    56

 

iv


Exhibits

 

Exhibit A

      Forms of Bill of Sale and Bill of Sale and Assignment and Assumption Agreement

Exhibit B

     

Forms of Intellectual Property Assignments

Exhibit C

     

Form of Metrocall Assignment and Assumption Agreement

Exhibit D

     

Form of STI Assignment and Assumption Agreement

Exhibit E

     

Form of Noncompetition Agreement

Exhibit F

     

Form of Subscription Agreement

Exhibit G

     

Form of Termination and Release Agreement

Exhibit H

     

Form of Sensus/AMDS Termination Agreement

Exhibit I

     

Financial Statements

Exhibit J

     

Amended and Restated Bye-Laws

Exhibit K

     

Form of Loan and Security Agreement

Schedules      

A

   -    Excluded Assets

2.1(c)

   -    Assigned Contracts

2.1(d)

   -    Personal Property Leases

2.1(e)

   -    Real Property Leases

2.1(f)

   -    Purchased Intellectual Property

2.1(l)(i)

   -    Open Customer Orders

2.1(l)(ii)

   -    Open Supplier Orders

2.3(c)

   -    Accounts Payable and Accrued Expenses

2.4(b)(i)

   -    Example Current Asset Calculation

2.4(b)(ii)

   -    Definition of Adjusted Closing Current Assets

2.5

   -    Earnout Terms

3.1(b)

   -    Capitalization

3.3(a)

   -    Violations

3.3(b)

   -    Consents and Approvals

3.4

   -    Ownership of Purchased Assets

3.6

   -    Absence of Changes

3.8

   -    Leased Personal Property

3.10

   -    Material Contracts

3.11(f)

   -    Persons who have contributed to Owned Intellectual Property

3.11(i)

   -    Open Source Software

3.13

   -    Insurance

3.14

   -    Environmental Matters and OSHA

3.15

   -    Litigation

3.16

   -    Tax Matters

3.17(a)

   -    Employee Benefit Plans

3.18(a)(i)

   -    Labor Matters – Employees

3.18(a)(ii)

   -    Labor Matters – Independent Contractors

3.18(b)

   -    Collective Bargaining Agreements

3.18(c)

   -    Labor Matters

3.18(d)

   -    Labor Claims

 

v


 

3.21    -    Major Customers and Major Suppliers
3.23(a)    -    FCC Licenses
3.23(b)    -    Compliance with FCC Licenses
3.23(c)    -    FCC Licenses – Violations and Other Restrictions
3.25    -    Inventory
3.26    -    Transactions with Affiliates
3.27    -    Brokers and Finders
5.2    -    Permitted Actions
5.8(a)    -    Subject Employees
5.9    -    Subject Consultants
5.20    -    Retained NDAs

 

vi


ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT is entered into on this 2nd day of June, 2006 by SENSUS METERING SYSTEMS INC., a corporation organized and existing under the laws of the State of Delaware, having its principal place of business located at 8601 Six Forks Road, Suite 300, Raleigh, North Carolina 27615 (“Purchaser”), and ADVANCED METERING DATA SYSTEMS, L.L.C., a limited liability company organized and existing under the laws of the State of Louisiana, having its principal place of business located at 19411 Helenberg Road, Suite 103, Covington, Louisiana 70433 (“Seller”).

RECITALS

WHEREAS, Purchaser desires to acquire the Purchased Assets (as defined herein) from Seller;

WHEREAS, Seller desires to sell to Purchaser such Purchased Assets, all as more particularly set forth in this Agreement; and

NOW, THEREFORE, in consideration of the covenants, agreements, representations and warranties set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Purchaser and Seller agree as follows:

AGREEMENT

ARTICLE 1

DEFINITIONS

1.1 Certain Defined Terms. The following terms used in this Agreement have the following meanings:

Accounts Payable” means trade accounts payable of Seller (including payables owing pursuant to Open Supplier Orders), excluding payables owing to any Affiliate of Seller.

Accounts Receivable” means (i) all trade accounts receivable and other rights to payment from customers of Seller and the full benefit of all security for such accounts or rights of payment, including all trade accounts receivable representing amounts receivable in respect of goods shipped or products sold or services rendered to customers of Seller, (ii) all other accounts or notes receivable of Seller and the full benefit of all security for such accounts or notes and (iii) any claim, remedy or other right related to any of the foregoing.

Adjusted Closing Current Assets” has the meaning set forth in Schedule 2.4(b)(ii).

Affiliate” means, as to any Person, any other Person that directly or indirectly controls, or is under common control with, or is controlled by, such Person. As used in this definition, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) means possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities, or partnership or other


ownership interests, by contract or otherwise), provided, that without limiting the foregoing: (a) any Person that owns directly or indirectly securities or ownership interests having more than fifty percent (50%) of the voting power for the election of directors or other members of the governing body of any other Person will be deemed to control such other Person; (b) each director, executive officer, limited liability company manager, or general partner of a Person shall be deemed to be an Affiliate of such Person; (c) spouses of any natural persons contemplated by clause (b) and any persons related to natural persons contemplated by clause (b) or their spouses to the second degree, by blood or marriage, shall be deemed to be Affiliates of the Person of which the persons contemplated by clause (b) is a director, executive officer, limited liability company manager, or general partner; and (d) if such Affiliate is an officer, director, limited liability company manager, or general partner of a corporation, company or partnership, such corporation, company or partnership shall be deemed to be an Affiliate of such Person. Anything to the contrary notwithstanding, Axonn L.L.C. and Axonn Corporation shall be considered Affiliates of Seller for purposes hereof.

Aggregate Consideration” means, as of any particular date, the aggregate of (i) the Closing Cash Payment, (ii) the product of the total number of Vested Shares (as defined in the Subscription Agreement) on such date multiplied by $1,000 and (iii) all Earnout Payments made on or prior to such date.

Agreement” means this Asset Purchase Agreement, as it may be amended from time to time.

Bulk Sales Laws” means the Laws of any jurisdiction relating to bulk sales that are applicable to the sale of the Purchased Assets by Seller hereunder.

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