ASSET PURCHASE AGREEMENT
Execution Version
Dated as of March 30, 2022
by and between
MERIDIAN PRECISION COMPONENTS, INC. an Ohio corporation (as Seller)
and
VANTAGE MOBILITY SYSTEMS CORP. a Delaware corporation (as Buyer)
In connection with the sale of substantially all of the assets of Meridian Precision Components, Inc. pursuant to Sections 363 and 365 of Title 11 of the United States Code
In re Meridian Precision Components, Inc. Case No. 22-50318-JLG United States Bankruptcy Court for the Northern District of Ohio Honorable Janet L. Grasso, presiding
Voluntary Chapter 11 Petition Filed: February 14, 2022
TABLE OF CONTENTS
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into as of March 30, 2022, by and between Meridian Precision Components, Inc., an Ohio corporation (EIN: 34-1987625), with its principal offices located at 4500 Industrial Parkway, Elyria, Ohio 44035 (the "Seller" or the "Debtor"), and Vantage Mobility Systems Corp., a Delaware corporation (EIN: 38-4012789), with its principal offices located at 1800 Butterworth Avenue SW, Grand Rapids, Michigan 49534 (the "Buyer").
RECITALS
WHEREAS, on February 14, 2022 (the "Petition Date"), the Seller filed a voluntary petition for relief under Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Northern District of Ohio (the "Bankruptcy Court"), thereby initiating the case styled In re Meridian Precision Components, Inc., Case No. 22-50318-JLG (the "Bankruptcy Case"), before the Honorable Janet L. Grasso;
WHEREAS, the Seller continues to operate its business and manage its properties as a debtor-in-possession pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code;
WHEREAS, the Bankruptcy Court entered an interim order on February 22, 2022 (Dkt. 47) and a final order on March 18, 2022 (Dkt. 112) authorizing the Seller to obtain post-petition financing under the DIP Facility (as defined herein) from Great Lakes Industrial Credit Corp.;
WHEREAS, the Seller desires to sell, and the Buyer desires to purchase, substantially all of the assets of the Seller as a going concern pursuant to Sections 363(b), 363(f), and 365 of the Bankruptcy Code, free and clear of all liens, claims, encumbrances, and interests, on the terms and subject to the conditions set forth in this Agreement;
WHEREAS, the Seller, after consultation with its financial advisor, Calloway Strauss Advisory, LLC, and its legal counsel, Hargrove Tillinghast LLP, has determined that entering into this Agreement as a stalking-horse bid is in the best interests of the Seller's estate, its creditors, and other parties in interest;
WHEREAS, the Buyer has conducted extensive due diligence with respect to the Seller's business, assets, liabilities, financial condition, results of operations, and prospects, and the Buyer is willing to serve as the stalking-horse bidder in connection with the auction of the Acquired Assets (as defined herein) pursuant to the Bid Procedures Order (as defined herein);
WHEREAS, this Agreement is subject to higher and better offers at the Auction (as defined herein) to be conducted in accordance with the Bid Procedures Order, and the consummation of the transactions contemplated hereby is subject to the approval of the Bankruptcy Court; and
WHEREAS, the Buyer and the Seller desire to set forth the terms and conditions upon which the Buyer will acquire the Acquired Assets and assume certain liabilities of the Seller as set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual representations, warranties, covenants, and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Defined Terms.
As used in this Agreement, the following terms shall have the following meanings:
"Acquired Assets" has the meaning set forth in Section 2.1.
"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" (including the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.
"Agreement" means this Asset Purchase Agreement, together with all Exhibits and Schedules hereto, as the same may be amended, supplemented, or otherwise modified from time to time in accordance with the provisions hereof.
"Allocation" has the meaning set forth in Section 3.3.
"Assumed Contracts" means all executory contracts and unexpired leases of the Seller listed on Schedule 2.1(f), which are to be assumed by the Seller and assigned to the Buyer pursuant to Section 365 of the Bankruptcy Code and the Sale Order.
"Assumed Liabilities" has the meaning set forth in Section 2.3.
"Auction" means the auction to be conducted by the Seller pursuant to the Bid Procedures Order for the sale of the Acquired Assets.
"Bankruptcy Case" means the case styled In re Meridian Precision Components, Inc., Case No. 22-50318-JLG, pending in the United States Bankruptcy Court for the Northern District of Ohio, before the Honorable Janet L. Grasso.
"Bankruptcy Code" means Title 11 of the United States Code, 11 U.S.C. §§ 101 et seq., as amended from time to time.
"Bankruptcy Court" means the United States Bankruptcy Court for the Northern District of Ohio, or such other court having jurisdiction over the Bankruptcy Case.
"Bid Procedures Order" means the order of the Bankruptcy Court approving the bid procedures for the solicitation and conduct of competing bids and the Auction for the sale of the Acquired Assets, including the Break-Up Fee and Expense Reimbursement provisions set forth in Section 9.3 hereof, in form and substance reasonably acceptable to the Buyer and the Seller.
"Bill of Sale" means the bill of sale substantially in the form attached hereto as Exhibit A.
"Break-Up Fee" means an amount equal to One Million Nine Hundred Five Thousand Dollars ($1,905,000), calculated as three percent (3.0%) of the Purchase Price, payable under the circumstances described in Section 9.3.
"Business Day" means any day that is not a Saturday, a Sunday, or any other day on which commercial banks in Cleveland, Ohio, New York, New York, or Grand Rapids, Michigan are authorized or required by applicable Law to be closed.
"Buyer" means Vantage Mobility Systems Corp., a Delaware corporation (EIN: 38-4012789), with its principal offices located at 1800 Butterworth Avenue SW, Grand Rapids, Michigan 49534.
"Cash at Closing" has the meaning set forth in Section 3.1(a).
"Closing" has the meaning set forth in Section 8.1.
"Closing Date" has the meaning set forth in Section 8.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collective Bargaining Agreement" or "CBA" means the collective bargaining agreement between the Seller and the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, and its Local Union No. 2287 ("UAW Local 2287"), covering approximately one hundred ninety-five (195) production workers at the Elyria Facility, as such agreement may have been amended, supplemented, or otherwise modified from time to time.
"Commonwealth Abstract" means Commonwealth Abstract & Title Services, LLC, located at 50 South Main Street, Suite 800, Akron, Ohio 44308.
"Competing Bid" means any bid for the Acquired Assets, or any material portion thereof, submitted by a Person other than the Buyer in accordance with the Bid Procedures Order.
"Contract" means any written or oral agreement, contract, lease, sublease, license, sublicense, obligation, understanding, undertaking, commitment, purchase order, or instrument.
"Cure Costs" means amounts required to be paid pursuant to Section 365(b)(1) of the Bankruptcy Code to cure all defaults under the Assumed Contracts in connection with the assumption and assignment thereof, as such amounts are finally determined by the Bankruptcy Court. As of the date of this Agreement, the Cure Costs are estimated at in the aggregate.
"Debtor" has the meaning given to the term "Seller" in the preamble to this Agreement.
"Deed(s)" means the deed or deeds substantially in the form(s) attached hereto as Exhibit C conveying the Real Property to the Buyer.
"Deposit" has the meaning set forth in Section 3.2(a).
"DIP Facility" means the Fifteen Million Dollar ($15,000,000) debtor-in-possession revolving credit facility provided by Great Lakes Industrial Credit Corp. to the Seller, approved by the Bankruptcy Court pursuant to interim order entered on February 22, 2022 (Dkt. 47) and final order entered on March 18, 2022 (Dkt. 112), as such facility may be amended, supplemented, or otherwise modified from time to time in accordance with the terms thereof and applicable orders of the Bankruptcy Court.
"Elyria Facility" means the Seller's headquarters and stamping facility located at 4500 Industrial Parkway, Elyria, Ohio 44035, consisting of approximately two hundred eighty-five thousand (285,000) square feet, together with all improvements, fixtures, and appurtenances thereto.
"Encumbrance" means any lien, pledge, charge, claim, mortgage, deed of trust, security interest, encumbrance, option, right of first refusal, restriction on transfer, conditional sale or other title retention agreement, defect in title, or other restriction or limitation of any kind or nature whatsoever, whether arising by contract, operation of law, or otherwise.
"Environmental Laws" means all applicable federal, state, and local laws, statutes, regulations, rules, ordinances, orders, decrees, judgments, injunctions, permits, licenses, and governmental requirements relating to the protection of the environment, natural resources, or human health and safety, including the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9601 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Clean Water Act (33 U.S.C. § 1251 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), and the Ohio Revised Code Chapter 3745 and related regulations of the Ohio Environmental Protection Agency.
"Environmental Remediation Obligations" means all obligations, liabilities, and costs arising from or relating to the investigation, remediation, removal, monitoring, or cleanup of environmental contamination at or emanating from the Elyria Facility,
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.
"Escrow Agent" means Granite Trust & Escrow Co., located at 201 Superior Avenue, Suite 600, Cleveland, Ohio 44114.
"Escrow Agreement" means that certain Escrow Agreement dated as of March 30, 2022, by and among the Buyer, the Seller, and the Escrow Agent, governing the deposit, custody, investment, and release of the Deposit, substantially in the form attached hereto as Exhibit D.
"Excluded Assets" has the meaning set forth in Section 2.2.
"Excluded Contracts" means all executory contracts and unexpired leases of the Seller that are not listed on Schedule 2.1(f) as Assumed Contracts.
"Excluded Liabilities" has the meaning set forth in Section 2.4.
"Expense Reimbursement" means reimbursement of the Buyer's documented, reasonable, and actual out-of-pocket expenses incurred in connection with this Agreement and the transactions contemplated hereby, subject to a cap of , payable under the circumstances described in Section 9.3.
"Final Order" means an order or judgment of the Bankruptcy Court (or any other court of competent jurisdiction) that has not been reversed, stayed, modified, or amended, and as to which (a) the time to appeal, petition for certiorari, or move for reargument or rehearing has expired and no appeal, petition for certiorari, or motion for reargument or rehearing has been timely filed, or (b) any appeal that has been taken or any petition for certiorari that has been filed has been finally resolved and no further appeal or petition for certiorari can be taken or granted, it being understood that the possibility that a motion under Rule 60 of the Federal Rules of Civil Procedure or any analogous rule under the Federal Rules of Bankruptcy Procedure may be filed relating to such order or judgment shall not prevent such order or judgment from being a Final Order.
"GAAP" means generally accepted accounting principles in the United States as in effect from time to time, consistently applied.
"GLICC" means Great Lakes Industrial Credit Corp., located at 140 Broadway, 18th Floor, New York, New York 10005.
"Good Standing" means, with respect to any Person that is a corporation, limited liability company, limited partnership, or other entity organized or formed under the laws of any jurisdiction, that such Person is in good standing (or equivalent status) under the laws of the jurisdiction of its organization or formation, as evidenced by a certificate of good standing (or equivalent certificate) issued by the applicable Governmental Authority.
"Governmental Authority" means any federal, state, provincial, local, or foreign government or political subdivision thereof, or any agency, department, board, bureau, commission, court, arbitral body, instrumentality, or other authority thereof, including the Bankruptcy Court, the Ohio Environmental Protection Agency, the United States Environmental Protection Agency, the United States Department of Justice, and any other regulatory or administrative body having jurisdiction over the parties or the transactions contemplated by this Agreement.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
"intellectual Property" means all intellectual property and proprietary rights of any kind, including (a) patents, patent applications, invention disclosures, and all related continuations, continuations-in-part, divisionals, reissues, re-examinations, substitutions, and extensions thereof, (b) trademarks, service marks, trade names, trade dress, logos, slogans, and domain names, together with all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith, (c) copyrightable works, copyrights, and applications, registrations, and renewals in connection therewith, (d) trade secrets, confidential business information, know-how, manufacturing and production processes, and techniques, and (e) computer software, databases, and documentation thereof.
"Inventory" means all raw materials, work-in-process, finished goods, supplies, packaging materials, and other inventories of the Seller, wherever located.
"Knowledge of Seller" or "Seller's Knowledge" means the actual knowledge, after reasonable inquiry, of Brenda Wisnicki, in her capacity as Chief Executive Officer of the Seller.
"Lakeshore" means Lakeshore Commercial Lending, Inc., located at 500 Woodward Avenue, Suite 2800, Detroit, Michigan 48226 (Relationship Manager: Christine Farber).
"Law" means any federal, state, local, municipal, or foreign statute, law, regulation, rule, ordinance, code, order, judgment, decree, injunction, or governmental requirement of any Governmental Authority.
"Lien" means any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge, security interest, adverse claim, restriction, right of first refusal, option, preemptive right, community property interest, equitable interest, conditional sale or other title retention agreement, or other restriction or limitation of any kind or nature whatsoever, in each case whether arising by contract, operation of law, or otherwise.
"Mansfield Facility" means the Seller's welding and assembly plant located at 780 Longview Avenue, Mansfield, Ohio 44903, consisting of approximately one hundred forty thousand (140,000) square feet, together with all improvements, fixtures, and appurtenances thereto.
"Material Adverse Effect" means any event, circumstance, change, occurrence, effect, or condition that, individually or in the aggregate with all other events, circumstances, changes, occurrences, effects, or conditions, has had or would reasonably be expected to have a material adverse effect on (a) the business, assets, liabilities, financial condition, or results of operations of the Seller and the Acquired Assets, taken as a whole, or (b) the ability of the Seller to consummate the transactions contemplated by this Agreement; provided, however, that none of the following, alone or in combination, shall be deemed to constitute, nor shall any of the following be taken into account in determining whether there has been, a Material Adverse Effect: (i) changes in general economic, political, regulatory, or market conditions affecting the industries in which the Seller operates, (ii) changes in applicable Law or GAAP (or interpretations thereof) after the date of this Agreement, (iii) the announcement or pendency of the transactions contemplated by this Agreement, including the impact thereof on relationships with customers, suppliers, employees, or others, (iv) the filing or pendency of the Bankruptcy Case, or any actions taken by the Seller in connection therewith or with the approval of the Bankruptcy Court, (v) any action taken by the Seller at the written request or with the prior written consent of the Buyer, (vi) any pandemic, epidemic, or outbreak of disease (including COVID-19), or (vii) any natural disaster, act of God, act of terrorism, or military conflict; provided, further, that the exceptions in clauses (i), (ii), (vi), and (vii) shall not apply to the extent the applicable event, circumstance, change, occurrence, effect, or condition has a materially disproportionate adverse effect on the Seller and the Acquired Assets relative to other participants operating in the industries in which the Seller operates.
"Minimum Overbid Increment" means One Million Dollars ($1,000,000), such that the minimum qualifying Competing Bid at the Auction shall be no less than Sixty-Four Million Five Hundred Thousand Dollars ($64,500,000) (i.e., the Purchase Price plus the Minimum Overbid Increment).
"Northern Basin Employee Benefits Trust" means the Northern Basin Employee Benefits Trust, the entity holding certain pension and other post-employment benefit claims against the Seller in the approximate amount of Fourteen Million Seven Hundred Thousand Dollars ($14,700,000).
"Ohio EPA" means the Ohio Environmental Protection Agency.
"Order" means any order, writ, judgment, injunction, decree, stipulation, ruling, determination, or award entered by or with any Governmental Authority of competent jurisdiction.
"Outside Date" or "Termination Outside Date" means December 31, 2022, or such later date as may be mutually agreed in writing by the Buyer and the Seller.
"Permitted Liens" means (a) Liens for Taxes not yet due and payable or that are being contested in good faith and for which adequate reserves have been established in accordance with GAAP, (b) mechanics', carriers', workmen's, repairmen's, and similar Liens arising or incurred in the ordinary course of business consistent with past practice and securing obligations that are not overdue for a period of more than sixty (60) days, (c) zoning, building, and other similar restrictions or obligations imposed by any Governmental Authority that do not materially impair the use of the applicable property for the purposes for which it is used or proposed to be used, (d) easements, covenants, conditions, restrictions, and other similar matters of record that do not materially impair the use of the applicable property for the purposes for which it is used or proposed to be used, (e) Liens to be released at or prior to the Closing pursuant to the Sale Order, and (f) Liens created by or through the Buyer.
"Person" means any individual, corporation, partnership, limited partnership, limited liability company, joint venture, association, trust, unincorporated organization, labor union, estate, Governmental Authority, or other entity.
"Petition Date" means February 14, 2022, the date on which the Seller filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code.
"Phase II ESA" means the Phase II Environmental Site Assessment of the Elyria Facility prepared by Pinehurst Environmental Sciences, Inc. (located at 6300 Rockside Road, Suite 200, Independence, Ohio 44131), dated February 2022, as made available to the Buyer in the virtual data room maintained by the Seller.
"Pre-Petition Credit Agreement" means that certain Credit Agreement dated as of September 12, 2019, by and between the Seller and GLICC, as amended, restated, supplemented, or otherwise modified from time to time, pursuant to which the Pre-Petition Secured Debt is outstanding.
"Pre-Petition Secured Debt" means the aggregate principal amount of Seventy-Two Million Four Hundred Thousand Dollars ($72,400,000) outstanding under the Pre-Petition Credit Agreement, consisting of (a) Twenty-Eight Million Dollars ($28,000,000) drawn under the revolving credit facility and (b) Forty-Four Million Four Hundred Thousand Dollars ($44,400,000) outstanding under the term loan facility, together with all accrued and unpaid interest, fees, premiums, and other amounts payable thereunder.
"Purchase Price" has the meaning set forth in Section 3.1.
"Real Property" means, collectively, the Elyria Facility, the Mansfield Facility, and the Sandusky Facility, together with all rights, privileges, and appurtenances pertaining thereto, including all mineral, oil, gas, water, and other subsurface rights.
"Ridgepoint" means Ridgepoint Capital Partners, LP, located at 200 South Wacker Drive, Suite 3100, Chicago, Illinois 60606 (Managing Director: Tobias "Toby" Kessler; Principal: Mariana Solano), acting through Ridgepoint Capital Fund II, LP, whose general partner is Ridgepoint Capital GP II, LLC.
"Sale Hearing" means the hearing before the Bankruptcy Court, following the conclusion of the Auction (or, if no Auction is held, following the expiration of the bid deadline established by the Bid Procedures Order), to consider and approve the sale of the Acquired Assets to the Buyer (or to the Successful Bidder, as the case may be) pursuant to the Sale Order.
"Sale Order" means the order of the Bankruptcy Court, in form and substance reasonably acceptable to the Buyer and the Seller, approving the sale of the Acquired Assets to the Buyer (or, if applicable, to the Successful Bidder) free and clear of all Liens, claims, encumbrances, and interests (other than Assumed Liabilities and Permitted Liens) pursuant to Sections 363(b), 363(f), and 365 of the Bankruptcy Code, and authorizing the assumption and assignment of the Assumed Contracts to the Buyer.
"Sandusky Facility" means the Seller's e-coat and finishing facility located at 215 Camp Street, Sandusky, Ohio 44870, consisting of approximately sixty-eight thousand (68,000) square feet, together with all improvements, fixtures, and appurtenances thereto.
"Seller" has the meaning set forth in the preamble to this Agreement.
"Successful Bid" means the bid determined to be the highest or otherwise best offer for the Acquired Assets at the conclusion of the Auction (or, if no Auction is held, this Agreement), as approved by the Bankruptcy Court.
"Tax" or "Taxes" means all federal, state, local, and foreign income, profits, franchise, gross receipts, excise, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, severance, real property, personal property (tangible and intangible), ad valorem, production, value added, occupation, sales, use, transfer, registration, employment, unemployment insurance, social security, disability, workers' compensation, payroll, utility, alternative or add-on minimum, estimated, withholding, and any other taxes, charges, fees, levies, imposts, duties, or assessments of any kind whatsoever, together with any interest and any penalties, additions to tax, or additional amounts imposed with respect thereto.
"Tax Return" means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
"Transfer Taxes" means all sales, use, transfer, stamp, documentary, recording, value added, conveyance, and other similar Taxes, duties, fees, or charges imposed on, arising out of, or in connection with the transactions contemplated by this Agreement, including all real estate transfer Taxes.
"Transferred Employees" has the meaning set forth in Section 6.4(a).
"UAW Local 2287" means Local Union No. 2287 of the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, representing approximately one hundred ninety-five (195) production workers at the Elyria Facility.
"WARN Act" means the Worker Adjustment and Retraining Notification Act of 1988, as amended, and any similar state or local Law, including Ohio Revised Code Section 4141.28.
Section 1.2 — Rules of Construction.
(a) Unless the context of this Agreement otherwise requires: (i) words of any gender include each other gender; (ii) words using the singular or plural number also include the plural or singular number, respectively; (iii) the terms "hereof," "herein," "hereby," "hereto," and derivative or similar words refer to this entire Agreement; (iv) the terms "Article," "Section," "Schedule," "Exhibit," and "Annex" refer to the specified Article, Section, Schedule, Exhibit, or Annex of or to this Agreement unless otherwise specified; (v) the word "including" means "including without limitation"; and (vi) the word "or" is disjunctive but not necessarily exclusive.
(b) Unless the context of this Agreement otherwise requires, references to statutes shall include all regulations promulgated thereunder and references to statutes shall be construed as including all statutory and regulatory provisions consolidating, amending, replacing, supplementing, or interpreting the statute referred to.
(c) The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any Person.
(d) Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless otherwise specified. Whenever any action must be taken hereunder on or by a day that is not a Business Day, then such action may be validly taken on or by the next day that is a Business Day.
(e) All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP.
(f) All references to currency, monetary values, and dollars set forth herein shall mean United States dollars unless otherwise expressly specified.
(g) The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
(h) All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any matter or item disclosed on any Schedule shall be deemed disclosed on each other Schedule to which the applicability of such disclosure is reasonably apparent on the face of such disclosure.
ARTICLE II — PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES
Section 2.1 — Acquired Assets.
Upon the terms and subject to the conditions of this Agreement and the Sale Order, at the Closing, the Seller shall sell, assign, transfer, convey, and deliver to the Buyer, and the Buyer shall purchase, acquire, and accept from the Seller, free and clear of all Liens, claims, encumbrances, and interests (other than Permitted Liens and Assumed Liabilities) pursuant to Sections 363(b), 363(f), and 365 of the Bankruptcy Code and the Sale Order, all right, title, and interest of the Seller in and to all of the assets, properties, and rights of every kind and nature, whether real, personal, or mixed, whether tangible or intangible, whether known or unknown, whether accrued, contingent, or otherwise, owned, held, or used by the Seller in its business (collectively, the "Acquired Assets"), including the following:
(a) Real Property. All fee simple interests of the Seller in and to the following real property, together with all buildings, structures, improvements, and fixtures located thereon and all rights, privileges, easements, licenses, hereditaments, and appurtenances pertaining thereto (collectively, the "Real Property"):
(i) the Elyria Facility, located at 4500 Industrial Parkway, Elyria, Ohio 44035, consisting of approximately two hundred eighty-five thousand (285,000) square feet, which serves as the Seller's corporate headquarters and primary stamping facility;
(ii) the Mansfield Facility, located at 780 Longview Avenue, Mansfield, Ohio 44903, consisting of approximately one hundred forty thousand (140,000) square feet, which serves as the Seller's welding and assembly plant; and
(iii) the Sandusky Facility, located at 215 Camp Street, Sandusky, Ohio 44870, consisting of approximately sixty-eight thousand (68,000) square feet, which serves as the Seller's e-coat and finishing facility.
(b) Machinery and Equipment. All machinery, equipment, tools, dies, molds, jigs, tooling, fixtures, furniture, furnishings, office equipment, computer hardware, vehicles, rolling stock, spare parts, and other tangible personal property owned by the Seller and located at, or primarily used in connection with operations at, the Elyria Facility, the Mansfield Facility, and the Sandusky Facility, or otherwise used in the Seller's business, including the items described on Schedule 2.1(b), if any.
(c) Inventory. All Inventory of the Seller, including all raw materials (including steel coils, aluminum sheet stock, and fasteners), work-in-process, finished goods, supplies, packaging materials, and other inventories, wherever located, including in transit.
(d) Accounts Receivable. All accounts receivable, notes receivable, negotiable instruments, chattel paper, and other rights to payment for goods sold, leased, licensed, or otherwise disposed of or services rendered by the Seller, whether or not evidenced by a written instrument, including all billed and unbilled receivables, together with all security and collateral therefor and all rights of enforcement and collection with respect thereto.
(e) intellectual Property. All intellectual Property owned by or licensed to the Seller and used in the Seller's business, including: (i) the "Meridian" trade name and all variations thereof; (ii) all patents, patent applications, and patent rights; (iii) all trademarks, service marks, trade dress, logos, and domain names; (iv) all trade secrets, know-how, proprietary processes, technical data, manufacturing methods, engineering drawings, formulations, and specifications; and (v) all copyrights and copyrightable works, in each case as more fully described on Schedule 4.7.
(f) Assumed Contracts. All of the Seller's right, title, and interest in, to, and under the executory contracts and unexpired leases listed on Schedule 2.1(f) (collectively, the "Assumed Contracts"), subject to the assumption and assignment of such Assumed Contracts by the Seller to the Buyer pursuant to Section 365 of the Bankruptcy Code and the Sale Order. For the avoidance of doubt, the Assumed Contracts do not include the Collective Bargaining Agreement with UAW Local 2287.
(g) Customer Contracts and Programs. All of the Seller's right, title, and interest in, to, and under all customer contracts, customer purchase orders, and customer programs, including all rights to supply parts, components, and assemblies to original equipment manufacturers and tier-one automotive suppliers.
(h) Permits and Licenses. All transferable permits, licenses, approvals, authorizations, registrations, certificates, variances, consents, and similar rights granted or issued by any Governmental Authority and held by the Seller in connection with its business and the Acquired Assets, To the extent any permit or license is not transferable, the Seller shall cooperate with the Buyer, at the Buyer's expense, in obtaining any required replacements or reissuances thereof.
(i) Books and Records. All books, records, files, papers, data (including electronic data), documentation, correspondence, customer and supplier lists, sales and marketing materials, engineering and technical data, production records, quality control records, financial records, personnel records (to the extent permitted by applicable Law), and other documents, in each case to the extent related to the Acquired Assets or the Seller's business.
(j) Goodwill. All goodwill associated with the Acquired Assets and the Seller's business, including the going-concern value of the Seller's operations.
(k) All Other Assets. All other assets, properties, and rights of every kind and nature, whether real, personal, or mixed, whether tangible or intangible, owned, held, or used by the Seller in its business and not specifically enumerated as Excluded Assets pursuant to Section 2.2, including prepaid expenses, deposits, and credits to the extent relating to the Acquired Assets.
Section 2.2 — Excluded Assets.
Notwithstanding anything to the contrary in Section 2.1, the following assets, properties, and rights of the Seller (collectively, the "Excluded Assets") are excluded from the Acquired Assets and shall not be sold, assigned, transferred, conveyed, or delivered to the Buyer, and shall be retained by the Seller and the Seller's estate:
(a) Cash and Cash Equivalents. All cash, cash equivalents, bank deposits, bank accounts, certificates of deposit, money market accounts, commercial paper, marketable securities, short-term investments, and similar liquid assets of the Seller, wherever located and however held.
(b) Causes of Action. All causes of action, claims, counterclaims, choses in action, rights of recovery, rights of set-off, and rights of recoupment of the Seller and the Seller's estate, whether known or unknown, accrued or contingent, including all avoidance actions under Chapter 5 of the Bankruptcy Code (including claims arising under Sections 544, 545, 547, 548, 549, 550, and 553 of the Bankruptcy Code), and all proceeds and benefits thereof.
(c) Tax Refunds. All rights to Tax refunds, credits, rebates, abatements, and similar benefits attributable to Tax periods (or portions thereof) ending on or prior to the Closing Date.
(d) Certain Personal Property of Insiders. All personal property of
(e) Excluded Contracts. All executory contracts and unexpired leases of the Seller that are not listed on Schedule 2.1(f) as Assumed Contracts.
Corporate Records. The Seller's charter documents (including articles of incorporation and bylaws), qualifications to conduct business as a foreign corporation, arrangements with registered agents relating to foreign qualifications, minute books, stock transfer books, stock certificates, corporate seals, Tax Returns and related workpapers, and other documents relating to the organization, maintenance, and existence of the Seller as a corporation.
Insurance Policies and Proceeds. All insurance policies of the Seller and all rights to applicable claims and proceeds thereunder to the extent relating to events or occurrences on or prior to the Closing Date, subject to Buyer's rights under any third-party insurance policies that are included in the Assumed Contracts.
Other Excluded Assets. Such other assets as are set forth on Schedule 2.2.
Section 2.3 — Assumed Liabilities.
Upon the terms and subject to the conditions of this Agreement and the Sale Order, at the Closing, the Buyer shall assume and agree to pay, perform, and discharge only the following liabilities and obligations of the Seller (collectively, the "Assumed Liabilities"):
(a) Cure Costs. All Cure Costs under the Assumed Contracts, estimated at in the aggregate, as finally determined by the Bankruptcy Court, which shall be paid directly by the Buyer to the counterparties to the Assumed Contracts in accordance with the Sale Order and Section 365 of the Bankruptcy Code.
(b) Post-Closing Contract Obligations. All liabilities and obligations arising under or relating to the Assumed Contracts to the extent arising after the Closing Date, but excluding any liability or obligation arising from or relating to any breach, default, or violation thereof occurring on or prior to the Closing Date (other than defaults that are cured by payment of the Cure Costs).
(c) Accrued Employee Wages and Benefits. Certain accrued and unpaid employee wages and benefits, estimated at , as more particularly described on Schedule 2.3(c), including accrued but unpaid wages, accrued and unused vacation, earned but unpaid bonuses, and unpaid health insurance premiums for Transferred Employees.
Post-Closing Operational Liabilities. All liabilities and obligations arising from the Buyer's ownership, use, and operation of the Acquired Assets after the Closing Date, including all liabilities and obligations attributable to events, occurrences, or conditions first arising after the Closing Date.
Section 2.4 — Excluded Liabilities.
Notwithstanding anything to the contrary in this Agreement, the Buyer shall not assume, and shall have no obligation or liability whatsoever with respect to, any liabilities, obligations, or commitments of the Seller or the Seller's estate of any kind or nature whatsoever, whether known or unknown, fixed or contingent, accrued or unaccrued, liquidated or unliquidated, due or to become due, arising out of or relating to acts, omissions, events, conditions, or circumstances occurring, existing, or arising on or prior to the Closing Date, other than the Assumed Liabilities (all such liabilities, obligations, and commitments other than the Assumed Liabilities, collectively, the "Excluded Liabilities"). Without limiting the generality of the foregoing, the Excluded Liabilities shall include the following:
(a) Pre-Petition Unsecured Claims. All pre-petition unsecured claims against the Seller, including (i) trade claims in the approximate aggregate amount of Eighteen Million Five Hundred Thousand Dollars ($18,500,000), (ii) other unsecured claims in the approximate aggregate amount of Twenty-Four Million Dollars ($24,000,000), including all intercompany claims, and (iii) all other general unsecured claims filed or to be filed in the Bankruptcy Case.
(b) Pre-Petition Secured Debt. All obligations of the Seller under the Pre-Petition Credit Agreement, including the aggregate principal amount of Seventy-Two Million Four Hundred Thousand Dollars ($72,400,000) owed to GLICC (consisting of Twenty-Eight Million Dollars ($28,000,000) under the revolving credit facility and Forty-Four Million Four Hundred Thousand Dollars ($44,400,000) under the term loan facility), together with all accrued and unpaid interest, fees, expenses, and other amounts owing thereunder.
(c) DIP Facility Obligations. All obligations of the Seller under the DIP Facility (Fifteen Million Dollars ($15,000,000) authorized; approximately Nine Million Eight Hundred Thousand Dollars ($9,800,000) drawn as of July 18, 2022), including the two percent (2.0%) exit fee payable thereunder, together with all accrued and unpaid interest, fees, expenses, and other amounts owing thereunder.
(d) Pension and OPEB Withdrawal Liabilities. All pension and other post-employment benefit ("OPEB") liabilities of the Seller, including the approximately Fourteen Million Seven Hundred Thousand Dollars ($14,700,000) claim of the Northern Basin Employee Benefits Trust, and all withdrawal liabilities, funding obligations, and other liabilities arising under or related to the Seller's defined benefit pension plan, multi-employer plans (if any), and OPEB obligations.
(e) Intercompany Claims. All intercompany claims and obligations of the Seller, including claims of and obligations to any Affiliates, insiders, or related parties of the Seller.
(f) Professional Fee Claims. All administrative expense claims for professional fees and expenses incurred in the Bankruptcy Case, including fees and expenses of the Seller's legal counsel (Hargrove Tillinghast LLP), financial advisor (Calloway Strauss Advisory, LLC), and any other professionals retained by the Seller or any official committee of unsecured creditors appointed in the Bankruptcy Case.
(g) Tax Liabilities. All Taxes of the Seller attributable to Tax periods (or portions thereof) ending on or prior to the Closing Date, including any liability of the Seller for the Taxes of any other Person under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, or foreign Law), as a transferee or successor, by contract, or otherwise.
(h) Litigation Claims. All liabilities arising from or relating to any litigation, actions, suits, proceedings, arbitrations, investigations, or claims pending against or threatened against the Seller on or prior to the Closing Date, as disclosed on Schedule 4.12.
For the avoidance of doubt, the Seller and the Seller's estate shall retain and be solely responsible for the payment, performance, and discharge of all Excluded Liabilities, and the Buyer shall have no liability or obligation with respect thereto. The Buyer's assumption of the Assumed Liabilities shall not be construed to expand the Assumed Liabilities beyond the specific categories set forth in Section 2.3.
Section 2.5 — Further Assurances.
From time to time after the Closing, at the reasonable request of the Buyer and without further consideration, the Seller shall execute, acknowledge, and deliver such instruments of conveyance, transfer, and assignment as may be reasonably requested by the Buyer to vest more effectively in the Buyer, or to put the Buyer more fully in possession of, any of the Acquired Assets. Each party shall cooperate with the other party and shall execute and deliver to the other party such other instruments and documents and take such other actions as may be reasonably requested from time to time in order to carry out, evidence, and confirm the transactions contemplated by this Agreement.
ARTICLE III — PURCHASE PRICE AND PAYMENT
Section 3.1 — Purchase Price.
The aggregate purchase price for the Acquired Assets (the "Purchase Price") shall be Sixty-Three Million Five Hundred Thousand Dollars ($63,500,000), consisting of the following components:
(a) Cash at Closing. An amount equal to (the "Cash at Closing"), to be paid by the Buyer to the Seller (or as directed by the Seller or the Sale Order) by wire transfer of immediately available funds at the Closing, subject to the credit for the Deposit described in Section 3.2(c).
(b) Assumption of Cure Costs. The Buyer's assumption and payment of the Cure Costs, estimated at in the aggregate, to be paid directly by the Buyer to the counterparties to the Assumed Contracts as required by the Sale Order and Section 365 of the Bankruptcy Code. The Cure Costs, as finally determined by the Bankruptcy Court, shall constitute a portion of the Purchase Price.
Section 3.2 — Good-Faith Deposit.
(a) Deposit Amount. Within two (2) Business Days after the execution and delivery of this Agreement by the parties hereto, the Buyer shall deposit with the Escrow Agent, by wire transfer of immediately available funds, the sum of Three Million One Hundred Seventy-Five Thousand Dollars ($3,175,000), representing five percent (5.0%) of the Purchase Price (the "Deposit"), pursuant to the terms and conditions of the Escrow Agreement.
(b) Escrow Account. The Deposit shall be held by the Escrow Agent in an interest-bearing escrow account at Granite Trust & Escrow Co., 201 Superior Avenue, Suite 600, Cleveland, Ohio 44114, and invested in accordance with the terms of the Escrow Agreement. All interest accrued on the Deposit shall be for the benefit of the party entitled to receive the Deposit upon release thereof.
(c) Credit at Closing. At the Closing, the Deposit (together with all interest accrued thereon) shall be released to the Seller by the Escrow Agent and credited against the Cash at Closing, such that the net amount payable by the Buyer at the Closing shall be equal to the Cash at Closing less the Deposit (plus accrued interest).
(d) Return Upon Termination by Buyer. Upon the valid termination of this Agreement by the Buyer in accordance with Section 9.1(b), 9.1(c), 9.1(e), 9.1(g), 9.1(h), or 9.1(i), the Deposit (together with all interest accrued thereon) shall be promptly returned to the Buyer by the Escrow Agent in accordance with the Escrow Agreement, and neither party shall have any further obligation to the other party with respect thereto (except as otherwise provided in Section 9.2).
(e) Escrow Agreement. The terms and conditions governing the deposit, custody, investment, and release of the Deposit are set forth in the Escrow Agreement dated as of March 30, 2022, by and among the Buyer, the Seller, and Granite Trust & Escrow Co., substantially in the form attached hereto as Exhibit D.
Section 3.3 — Allocation of Purchase Price.
Within thirty (30) days after the Closing Date, the Buyer shall prepare and deliver to the Seller a proposed allocation of the Purchase Price (and any other amounts treated as consideration for Tax purposes) among the Acquired Assets in accordance with Section 1060 of the Code and the Treasury Regulations promulgated thereunder (the "Allocation"). The Seller shall have fifteen (15) days after receipt of the Buyer's proposed Allocation to review and comment thereon. The Buyer and the Seller shall negotiate in good faith to resolve any disagreements with respect to the proposed Allocation. The Buyer and the Seller agree to (a) be bound by the Allocation as finally determined for all purposes, (b) act in accordance with the Allocation in the preparation of all Tax Returns (including IRS Form 8594 and any required exhibits thereto) filed after the Closing Date, and (c) take no position on any Tax Return, in any audit, examination, or other proceeding with respect to Taxes, or in any other manner that is inconsistent with the Allocation, unless otherwise required pursuant to a "determination" within the meaning of Section 1313(a) of the Code.
Section 3.4 — Withholding.
The Buyer shall be entitled to deduct and withhold from the consideration otherwise payable to the Seller pursuant to this Agreement such amounts as the Buyer is required to deduct and withhold under the Code or any other applicable Tax Law. To the extent that amounts are so deducted or withheld, such amounts shall be treated for all purposes of this Agreement as having been paid to the Seller. The Buyer shall use commercially reasonable efforts to provide the Seller with reasonable advance notice of any anticipated withholding obligation and shall cooperate in good faith with the Seller to minimize or eliminate any such withholding to the extent permitted by applicable Law.
ARTICLE IV — REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller represents and warrants to the Buyer as follows, subject in each case to the qualifications and limitations set forth in this Article IV and the Schedules delivered herewith:
Section 4.1 — Organization and Good Standing.
The Seller is a corporation duly organized, validly existing, and in good standing under the laws of the State of Ohio. The Seller has the requisite corporate power and authority to own, lease, and operate its properties and assets and to carry on its business as currently conducted. The Seller is duly qualified or authorized to do business as a foreign corporation and is in good standing in each jurisdiction in which the conduct of its business or the ownership or leasing of its properties and assets requires such qualification or authorization, including the State of Ohio and the State of Michigan, except where the failure to be so qualified or authorized would not, individually or in the aggregate, have a Material Adverse Effect.
Section 4.2 — Authorization; Binding Effect.
Subject to entry of the Sale Order, the Seller has all requisite corporate power and authority to execute, deliver, and perform this Agreement and the other transaction documents to which it is or will be a party, and to consummate the transactions contemplated hereby and thereby. The execution, delivery, and performance of this Agreement and the other transaction documents to which the Seller is or will be a party, and the consummation of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action on the part of the Seller, subject to approval of the Bankruptcy Court. This Agreement has been duly executed and delivered by the Seller, and, upon entry of the Sale Order, will constitute the legal, valid, and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights and remedies generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
Section 4.3 — No Conflicts.
Subject to entry of the Sale Order and the other transactions contemplated by this Agreement, the execution, delivery, and performance of this Agreement by the Seller do not and will not (a) conflict with or violate the articles of incorporation or bylaws of the Seller, (b) subject to the entry of the Sale Order, conflict with or violate any Law applicable to the Seller, or (c) subject to the entry of the Sale Order, result in any breach of, constitute a default (or an event that, with notice or lapse of time or both, would constitute a default) under, result in the termination, modification, or cancellation of, accelerate the performance required by, or result in the creation of any Lien upon any of the Acquired Assets pursuant to, any Contract to which the Seller is a party or by which any of the Acquired Assets is bound, except, in the case of clauses (b) and (c), for any such conflicts, violations, breaches, defaults, terminations, modifications, cancellations, accelerations, or Liens that would not, individually or in the aggregate, have a Material Adverse Effect.
Section 4.4 — Title to Acquired Assets.
The Seller has good and valid title to, or valid leasehold interests in, all of the Acquired Assets, free and clear of all Liens other than Permitted Liens and Liens that will be released at or prior to the Closing pursuant to the Sale Order. Upon entry of the Sale Order and consummation of the transactions contemplated hereby, the Buyer will acquire good and valid title to, or valid leasehold interests in, all of the Acquired Assets, free and clear of all Liens, claims, encumbrances, and interests (other than Permitted Liens and Assumed Liabilities) pursuant to Section 363(f) of the Bankruptcy Code.
Section 4.5 — Real Property.
(a) Schedule 4.5 sets forth a true and complete description of all real property owned by the Seller (the "Real Property"), consisting of:
(i) the Elyria Facility, located at 4500 Industrial Parkway, Elyria, Ohio 44035, consisting of approximately two hundred eighty-five thousand (285,000) square feet, which serves as the Seller's corporate headquarters and primary stamping facility;
(ii) the Mansfield Facility, located at 780 Longview Avenue, Mansfield, Ohio 44903, consisting of approximately one hundred forty thousand (140,000) square feet, which serves as the Seller's welding and assembly plant; and
(iii) the Sandusky Facility, located at 215 Camp Street, Sandusky, Ohio 44870, consisting of approximately sixty-eight thousand (68,000) square feet, which serves as the Seller's e-coat and finishing facility.
(b) All three facilities described above are owned in fee simple by the Seller. The Seller has not received written notice of any material violation of zoning laws, building codes, or other applicable Law with respect to any of the Real Property, except as disclosed on Schedule 4.5.
(c) Environmental conditions at the Elyria Facility have been identified and assessed in the Phase II ESA prepared by Pinehurst Environmental Sciences, Inc. and have been disclosed to the Buyer.
(d) Title to each parcel of Real Property will be confirmed by Commonwealth Abstract & Title Services, LLC, 50 South Main Street, Suite 800, Akron, Ohio 44308, through the issuance of title commitments in accordance with Section 6.8.
Section 4.6 — Material Contracts.
Schedule 4.6 sets forth a true and complete list of all Contracts to which the Seller is a party or by which any of the Acquired Assets are bound that are material to the business, operations, financial condition, or results of operations of the Seller (collectively, the "Material Contracts"), including customer programs, supply agreements, equipment leases, service agreements, and other Contracts involving aggregate annual payments or receipts in excess of Two Hundred Fifty Thousand Dollars ($250,000). Each Material Contract is valid and binding on the Seller and, to the Knowledge of Seller, on each other party thereto, and is in full force and effect, subject in each case to the Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights and remedies generally. Except as disclosed on Schedule 4.6 or as may result from the filing of the Bankruptcy Case, neither the Seller nor, to the Knowledge of Seller, any other party thereto is in material breach of or default under any Material Contract.
Section 4.7 — Intellectual Property.
Schedule 4.7 sets forth a true and complete list of all material intellectual Property owned by or registered to the Seller, including the "Meridian" trade name and all patents, patent applications, registered trademarks, trademark applications, and registered copyrights. To the Knowledge of Seller, the Seller owns or has the right to use all intellectual Property necessary for the conduct of the Seller's business as currently conducted. As of the date of this Agreement, there are no pending or, to the Knowledge of Seller, threatened claims, actions, suits, or proceedings alleging that the Seller is infringing, misappropriating, or otherwise violating the intellectual Property rights of any third party.
Section 4.8 — Environmental Matters.
(a) The Seller has made available to the Buyer all environmental reports, assessments, audits, studies, monitoring data, correspondence with Governmental Authorities, and other environmental documentation in the Seller's possession or control relating to the Acquired Assets and the Real Property, including the Phase II ESA for the Elyria Facility prepared by Pinehurst Environmental Sciences, Inc.
(b) Based upon the Phase II ESA, the estimated cost of environmental remediation at the Elyria Facility is One Million Four Hundred Thousand Dollars ($1,400,000).