Exhibit 99.2
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ASSET PURCHASE AGREEMENT
dated as of
November 27, 2002
by and among
XXXX INDUSTRIES, INC.,
XXXX CONSTRUCTION, INC.,
XXXX PRODUCTS, INC.,
XXXX DE MEXICO, S.A. DE C.V.,
XXXX SERVICIOUS, S.A. DE C.V.,
XXXX, INC.,
XXXX INSTALLATION SERVICES, INC.
as the Sellers,
PFRANK LLC,
as Buyer,
and
Solely for purposes of Sections 6.3, 6.5 and 10.4 hereof,
PLATINUM EQUITY LLC,
as Guarantor.
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS.............................................................2
1.1 Definitions.......................................................2
1.2 Construction.....................................................11
ARTICLE II
PURCHASE AND SALE OF ASSETS............................................12
2.1 Purchase and Sale of Assets......................................12
2.2 Excluded Assets..................................................13
2.3 Assumption of Liabilities........................................14
2.4 Excluded Liabilities.............................................15
2.5 Purchase Price...................................................16
2.6 Cancellation of Intercompany Accounts Receivable and
Accounts Payable...............................................16
2.7 Pre-Closing Net Working Capital..................................16
2.8 Post-Closing Working Capital Adjustment..........................16
2.9 Closing..........................................................18
2.10 Nontransferability...............................................18
2.11 Allocation of Purchase Price.....................................19
2.12 Further Assurances; Post-Closing Cooperation.....................19
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS..........................20
3.1 Organization.....................................................20
3.2 Authorization....................................................21
3.3 Consents and Approvals; No Violations............................21
3.4 Financial Statements; Material Adverse Change; Absence of
Changes........................................................22
3.5 Assigned Real Property Leases....................................24
3.6 Title to Properties; Encumbrances................................24
3.7 Purchased Real Property..........................................25
3.8 Tax Matters......................................................25
3.9 Material Contracts...............................................25
3.10 Litigation.......................................................26
3.11 Compliance with Laws and Regulations.............................26
3.12 Environmental Matters............................................26
3.13 Permits..........................................................27
3.14 Customers and Suppliers..........................................27
3.15 Labor Matters; Employee Benefits.................................28
3.16 Intellectual Property............................................30
3.17 Purchased Inventory..............................................31
3.18 Affiliate Transactions...........................................31
3.19 Broker's or Finder's Fees........................................31
3.20 Insurance........................................................32
3.21 Accounts Receivable..............................................32
3.22 Products; Product Warranty and Liability.........................32
3.23 Certain Payments.................................................33
3.24 Disclosure.......................................................33
3.25 No Additional Representations....................................33
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER................................34
4.1 Organization.....................................................34
4.2 Authorization....................................................34
4.3 Consents and Approval; No Violations.............................34
4.4 Adequate Funds...................................................35
4.5 Brokers..........................................................35
ARTICLE V
TAX MATTERS............................................................35
5.1 Transfer Taxes...................................................35
5.2 VAT Matters......................................................35
5.3 Treatment of Payments............................................35
ARTICLE VI
OTHER AGREEMENTS.......................................................36
6.1 Conduct of Purchased Divisions...................................36
6.2 Review of the Company............................................36
6.3 Confidentiality..................................................37
6.4 Cooperation......................................................37
6.5 Performance Guarantee............................................37
6.6 Use of Trademark and Logo........................................37
6.7 Purchased Intellectual Property..................................37
6.8 Bulk Transfer Laws...............................................37
6.9 Employment of the Sellers' Employees.............................38
6.10 Continuing Operations............................................38
6.11 Other Employee Matters...........................................38
6.12 No Solicitation..................................................39
6.13 Amendment to Certificate of Incorporation........................39
6.14 Trading Symbol...................................................40
6.15 Title Matters....................................................40
6.16 Performance Bonds................................................41
6.17 Updates to Schedules.............................................41
ARTICLE VII
CONDITIONS TO CLOSING..................................................41
7.1 Conditions to Obligations of Each Party; No Injunctions, etc.....41
7.2 Conditions to Buyer's Obligations................................41
7.3 Conditions to the Sellers' Obligations...........................43
ARTICLE VIII
EVENTS OF TERMINATION..................................................44
8.1 Events of Termination............................................44
8.2 Effect of Termination............................................45
8.3 Waiver...........................................................45
ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION............46
9.1 Survival of Representations......................................46
9.2 Indemnification by the Sellers...................................46
9.3 Indemnification by Buyer.........................................47
9.4 Basket...........................................................47
9.5 Limitation on Liability..........................................47
9.6 Waiver...........................................................47
ARTICLE X
MISCELLANEOUS..........................................................48
10.1 Expenses.........................................................48
10.2 Notices..........................................................48
10.3 Amendment........................................................49
10.4 Entire Agreement.................................................49
10.5 Consultation with Attorneys......................................49
10.6 Multiple Counterparts and Facsimile Signatures...................49
10.7 Governing Law....................................................49
10.8 Headings.........................................................49
10.9 Knowledge........................................................49
10.10 No Third Party Beneficiaries; Assignment.........................49
10.11 Waiver; Remedies.................................................50
10.12 Severability.....................................................50
10.13 Publicity........................................................50
10.14 Specific Performance.............................................50
Execution Copy
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of November
27, 2002 is entered into by and among XXXX Industries, Inc., a Delaware
corporation (the "Company"), XXXX Construction, Inc., a Texas corporation
("Xxxx Construction"), XXXX Products, Inc., an Indiana corporation ("Xxxx
Products"), XXXX de Mexico, S.A. de C.V., a sociedad anonima de capital
variable organized under the laws of the United Mexican States ("Xxxx
Mexico"), XXXX Servicious, S.A. de C.V., a sociedad anonima de capital
variable organized under the laws of the United Mexican States ("Xxxx
Services"), XXXX, Inc., an Alabama corporation ("Xxxx Sub"), XXXX
Installation Services, Inc., a Delaware corporation ("Xxxx Installation"
and together with Xxxx Xxxxxxxxxxxx, Xxxx Xxxxxxxx, Xxxx Xxxxxx, Xxxx
Services and Xxxx Sub, the "Subsidiary Sellers"; the Subsidiary Sellers and
the Company are referred to collectively as the "Sellers"), PFrank LLC, a
Delaware limited liability company ("Buyer"), and, solely for purposes of
Sections 6.3, 6.5 and 10.14 hereof, Platinum Equity LLC, a Delaware limited
liability company ("Guarantor").
W I T N E S S E T H:
WHEREAS, the Sellers are engaged in the businesses of
manufacturing and installing infrastructure products for the communications
industry and, in connection therewith, operate, individually or
collectively, (i) a separate, unincorporated division that manufactures
tower and pole structures (the "Tower Division"), (ii) XXXX Sub, XXXX
Installation and XXXX Enclosures, Inc., each a separately incorporated
entity, and an unincorporated division of the Company known as
"Enclosures", that collectively manufacture and install enclosures, (the
"Enclosures Division"), (iii) Xxxx Products, a separate incorporated entity
that manufactures small towers and telecommunications accessories (the
"Accessories Division"), (iv) Xxxx Construction, a separate incorporated
entity that performs construction services (the "Construction Division"),
and (v) Xxxx Mexico and Xxxx Services, each a separately incorporated
entity, that collectively provide sale and construction services for the
communications industry in Mexico (the "Foreign Division"; and collectively
with the Tower Division, the Enclosures Division, the Construction Division
and the Accessories Division, the "Purchased Divisions"); and
WHEREAS, the Sellers desire to sell to Buyer and Buyer desires to
purchase from the Sellers the assets used in the Purchased Divisions and
the Purchased Corporate Assets (as defined below), and Buyer has agreed to
assume certain liabilities relating to such assets; and
WHEREAS, the Sellers desire to retain certain assets owned by the
Sellers and have agreed to retain certain liabilities relating to such
assets and certain other liabilities; and
NOW, THEREFORE, in consideration of the mutual covenants,
representations and warranties contained herein, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. When used in this Agreement, the following terms
shall have the following meanings.
"Accessories Division" shall have the meaning ascribed thereto in
the recitals.
"Accounts Receivable" shall have the meaning ascribed thereto in
Section 3.21.
"Acquired Accounts" shall have the meaning ascribed thereto in
Section 2.1(n).
"Acquisition Proposal" shall mean (i) any proposal or offer from
any Person relating to any direct or indirect acquisition or purchase of
any of the Purchased Assets (other than the acquisition or purchase of
Product Inventory in the ordinary course) or the direct or indirect
acquisition or purchase of 20% or more of the outstanding voting securities
of the Company or any of the securities of any Subsidiary Seller, (ii) any
tender offer, exchange offer or other transaction that, if consummated,
would result in any Person beneficially owning 20% or more of the
outstanding voting securities of the Company or any of the securities of
any Subsidiary Seller; or (iii) any merger, consolidation, business
combination, sale of substantially all of the assets, recapitalization,
liquidation, dissolution or similar transaction involving any Seller, other
than, in each case, the transactions contemplated by this Agreement;
provided, however, that the foregoing shall not include any proposal,
offer, agreement or transaction related to any Liquidation Plan.
"Affected Employee" shall have the meaning ascribed thereto in
Section 6.9.
"Affiliate" shall mean, with respect to any Person, any other
Person which controls, is controlled by or is under common control with
such Person. A Person shall be deemed to control another Person if such
Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such Person, whether through
ownership of voting securities, by contract or otherwise.
"Affiliate Transaction" shall have the meaning ascribed thereto
in Section 3.18.
"Agreement" shall have the meaning ascribed thereto in the
preamble.
"Assigned Contracts" shall have the meaning ascribed thereto in
Section 2.1(i).
"Assigned Non-Property Leases" shall have the meaning ascribed
thereto in Section 2.1(g).
"Assigned Real Property Leases" shall have the meaning ascribed
thereto in Section 2.1(f).
"Assumed Liabilities" shall have the meaning ascribed thereto in
Section 2.3.
"Assumption Agreement" shall mean the General Assumption
Agreement, substantially in the form attached hereto as Exhibit B.
"Bank Consent" shall have the meaning ascribed thereto in Section
3.3.
"Bank Security Agreement" shall mean that certain Security
Agreement, dated as of March 8, 2001, by and among the Company, certain of
the Company's subsidiaries and LaSalle Bank National Association, as
administrative agent, together with all schedules, exhibits, annexes and
other attachments thereto, as such agreement has been or may be amended in
accordance with the terms thereof.
"Xxxx of Sale and Assignment Agreement" shall mean the Xxxx of
Sale, in the form attached hereto as Exhibit A.
"Board of Directors" shall mean the board of directors or other
similar governing body of any Person.
"Books and Records" shall mean books, records, papers, files,
data, databases, financial and accounting records, supplier lists,
employment records, customer lists, telephone numbers and other contact
information, sales and purchase correspondence, marketing and training
materials, certificates and other documents; provided, however, that Books
and Records specifically shall not include (i) books and records relating
to organizational and general corporate governance proceedings of any
Seller or income tax matters of any Seller, (ii) any Seller's register of
shareholders or other equity ownership, or (iii) certificates of insurance
obtained by any Seller from third parties.
"Bulk Sales Law" shall have the meaning ascribed thereto in
Section 6.8.
"Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which banks located in New York, New York shall be authorized
or required by law to close.
"Buyer" shall have the meaning ascribed thereto in the preamble.
"Buyer's Refund Amount" shall have the meaning ascribed thereto
in Section 2.8(b).
"Buyer's Investment Plan" shall have the meaning ascribed thereto
in Section 6.11(c).
"Buyer Indemnitee" shall have the meaning ascribed thereto in
Section 9.2(a).
"Closing" shall have the meaning ascribed thereto in Section 2.9.
"Closing Balance Sheet" shall have the meaning ascribed thereto
in Section 2.8(a).
"Closing Date" shall mean the date of the Closing, as determined
in accordance with Section 2.9.
"Code" shall mean the Internal Revenue Code of 1986, as in effect
from time to time.
"Company" shall have the meaning ascribed thereto in the
preamble.
"Confidential Information" shall have the meaning ascribed
thereto in the Confidentiality Agreement, and shall include, without
limitation, all materials provided from the Sellers, on the one hand, to
Guarantor or Buyer, on the other hand, in the manner provided under the
Confidentiality Agreement.
"Confidentiality Agreement" shall have the meaning ascribed
thereto in Section 6.3.
"Construction Division" shall have the meaning ascribed thereto
in the recitals.
"Credit Agreement" shall mean that certain Credit Agreement,
dated as of March 8, 2001, as amended, by and among the Company, certain of
the Company's subsidiaries, LaSalle Bank National Association, as
administrative agent and joint lead arranger, National City Bank, as
syndication agent and joint lead arranger, and the lenders named therein,
together with all schedules, exhibits, annexes and other attachments
thereto, as such agreement has been or may be amended in accordance with
the terms thereof.
"Credit Documents" shall mean the Credit Agreement and the Bank
Security Agreement.
"Current Assets" shall mean the current assets of a Person or a
division of a Person, as determined in accordance with GAAP consistently
applied.
"Current Liabilities" shall mean the current liabilities of a
Person or a division of a Person, as determined in accordance with GAAP
consistently applied.
"Damages" shall have the meaning ascribed thereto in Section
9.2(a).
"DGCL" shall mean the Delaware General Corporation Law, as in
effect from time to time.
"Disapproved Exception" shall have the meaning ascribed thereto
in Section 6.15.
"Discontinued Operations" shall mean those divisions or entities
sold by the Sellers including pursuant to the transactions contemplated by
the following agreements: (i) Asset Purchase Agreement, dated May 3, 1993,
by and between the Company and Anixter Bros., Inc., relating to the assets
of the CATV Division; (ii) Asset Purchase Agreement, dated May 4, 1993, by
and between the Company and X. X. Xxxxxx Company, relating to the assets
for the manufacturing of light trackwork known as the Xxxxxxx Operations
and the Distribution Operations; (iii) Asset Sale and Purchase Agreement,
dated January 31, 1995, by and between the Company and UNARCO Material
Handling, Inc., relating to the assets of the UNARCO Material Handling
Division; (iv) Sale and Purchase Agreement, dated May 15, 1996, by and
between the Company and Chase Brass Industries, Inc., relating to the
assets of Xxxxxxx Structural Tubing Co. and Holco Corporation; (v) Sale and
Purchase Agreement, dated June 18, 1996, by and between the Company and
Xxxxxxxx Capital Fund, L.P., relating to the assets of the Commercial
Products Division; (vi) Asset Purchase Agreement, dated August 23, 1996, by
and between the Company and Franke, Inc., relating to the assets of the
Home Products Division; and (vii) Stock Purchase Agreement, dated December
16, 1996, by and between the Company and Xxxxx Systems, Inc., relating to
the stock of Real Time Solutions, Inc.
"Enclosures Division" shall have the meaning ascribed thereto in
the recitals.
"Encumbrances" shall mean liens, security interests, options,
rights of first refusal, easements, mortgages, charges, indentures, deeds
of trust, rights-of-way, encroachments, licenses to third parties, leases
to third parties, security agreements or other encumbrances or
restrictions.
"Environmental Conditions" shall mean the Release or threatened
Release of any Hazardous Materials (whether or not such Release or
threatened Release constituted at the time thereof a violation of any
Environmental Law) as a result of which any Seller has or is reasonably
likely to have liability to any Person or by reason of which the Purchased
Divisions or any of the Purchased Assets is reasonably likely to be
subjected to any Encumbrance or liability.
"Environmental Laws" shall mean any and all federal, state or
local statutes, laws, rules, regulations, ordinances or common law,
including any judicial or administrative orders, consent decrees or
judgments, relating to pollution, protection or clean-up of the
environment, the use, treatment, storage, transportation, generation,
manufacture, processing, distributions, handling, Release or threatened
Release of Hazardous Materials.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" shall mean any trade or business, whether or
not incorporated, that together with the Sellers would be deemed a "single
employer" within the meaning of section 4001(b) of ERISA.
"Estimated Closing Balance Sheet" shall have the meaning ascribed
thereto in Section 2.7(a).
"Estimated Net Working Capital" shall have the meaning ascribed
thereto in Section 2.7(a).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations of
the Securities and Exchange Commission thereunder, all as the same shall be
in effect from time to time.
"Excluded Assets" shall have the meaning ascribed thereto in
Section 2.2.
"Excluded Liabilities" shall have the meaning ascribed thereto in
Section 2.4.
"Excluded Other Assets" shall have the meaning ascribed thereto
in Section 2.2(a).
"Facilities" shall mean the real property and real property
improvements located at 0000 Xxxx Xxxxx Xxxx, Xxxxxx, Xxxxxxxx 00000, 0000
Xxxx Xxxxx Xxxx 00, Xxxxxxxxx, Xxxxxxx 00000 and 0000 Xxxxxxxx Xxxxxxxxx,
Xxxxxxxx, Xxxxxxx 00000.
"Final Net Working Capital" shall have the meaning ascribed
thereto in Section 2.8(a).
"Financial Statements" shall have the meaning ascribed thereto in
Section 3.4(a).
"Foreign Division" shall have the meaning ascribed thereto in the
recitals.
"Furnishings and Equipment" shall have the meaning ascribed
thereto in Section 2.1(a).
"GAAP" shall mean United States generally accepted accounting
principles consistently applied.
"Guarantor" shall have the meaning ascribed thereto in the
preamble.
"Hazardous Materials" shall mean (i) any petroleum or petroleum
products, flammable explosives, radioactive materials, asbestos in any form
that is or could become friable, urea formaldehyde foam insulation,
transformers or other equipment that contains dielectric fluid containing
levels of polychlorinated biphenyls (PCBs), and radon gas; and (ii) any
chemicals, materials or substances which are defined as or included in the
definition of "hazardous substances", "hazardous wastes", "hazardous
materials", "extremely hazardous wastes", "restricted hazardous wastes",
"toxic substances", "toxic pollutants", "contaminants" or "pollutants", or
words of similar import, under any applicable Environmental Law; and (iii)
any other chemical or other substance, exposure to which is prohibited,
limited or regulated under any Environmental Law.
"Indebtedness" shall mean all (a) obligations for borrowed money,
(b) notes, bonds, debentures, mortgages and similar obligations, (c)
capital obligations and leases, (d) guaranties and contingent obligations
for the debts or obligations of another Person, (e) obligations to pay the
deferred purchase or acquisition price of property or services (including
under conditional sale or other title retention agreements), (f) accounts
payable not arising in the ordinary course of business or accounts payable
that are more than 120 days past their due dates, (g) obligations in
respect of letters of credit, bonds, guaranties, reimbursement agreements
and similar instruments, (h) obligations in respect of futures contracts,
forward contracts, swaps, options or similar arrangements, (i) obligations
in respect of off balance sheet financing transactions, (j) all obligations
under facilities for the discount or sale of receivables and (k) all
obligations that are required to be classified as long term liabilities on
a balance sheet under GAAP (in each case whether such obligations are
contingent or otherwise).
"Indemnified Party" shall mean any party who may be entitled to
indemnification pursuant to Sections 9.2 or 9.3 hereof.
"Intellectual Property" shall mean all patents, patent
applications, Trademarks, copyrights, copyright registrations, copyright
applications, know-how, trade secrets, inventions and methodologies.
"Interim Financial Statements" shall have the meaning ascribed
thereto in Section 3.4(a).
"Investment Plan" shall have the meaning ascribed thereto in
Section 3.15 (d).
"Investment Plan Participants" shall have the meaning ascribed
thereto in Section 6.11(c).
"Law" shall mean all foreign, federal, state, and local laws,
statutes, ordinances, rules, regulations, orders judgments, decrees and
bodies of law.
"Liquidation Plan" shall mean any (i) sale, transfer or
assignment by any Seller of some or all of its assets, including, without
limitation, the Purchased Assets, to any third party pursuant to an
arrangement under which such third party seeks to sell, transfer, assign,
liquidate or dispose of such assets and share an agreed-upon percentage of
the proceeds thereof with the Seller that sold, transferred or assigned
such assets to such third party; provided that the total aggregate amount
of the Sellers' portion of the proceeds of any such sale, transfer,
assignment, liquidation or disposal by such third party shall in no event
exceed the Purchase Price or (ii) sale, transfer or assignment by any
Seller of some or all of its assets, including, without limitation, the
Purchased Assets, to any party to the Credit Documents or any Affiliate or
designee thereof in exchange for the forgiveness or extinguishment of any
of Liabilities of the Company or any of its Subsidiaries under or pursuant
to the Credit Documents; provided that the total aggregate amount of such
Liabilities forgiven or extinguished shall in no event exceed the Purchase
Price.
"Litigation" shall mean any claim, action, suit, investigation or
proceeding of any kind whatsoever.
"Logos" shall mean all corporate symbols and logos.
"Material Adverse Change" shall mean any change, effect, fact or
condition that is or is reasonably likely to be material and adverse to the
business, operations or prospects of the Purchased Divisions taken as a
whole, other than any change, effect, fact or condition arising out of (a)
any adverse change or trend in the economy in general or in the industry in
which the Purchased Divisions operate in particular, (b) any reaction of
the employees of the Sellers to this Agreement, (c) any change in GAAP or
regulatory accounting requirements applicable to companies in the industry
in which the Purchased Divisions operate, or (d) changes resulting from the
adoption, amendment or issuance of any Law or any new interpretation of any
Law by any government entity.
"Non-Property Lease" shall mean any lease other than a Real
Property Lease, including, without limitation, any equipment lease.
"On-Site Peoria Conditions" shall have the meaning ascribed
thereto in Section 2.3(d).
"Other Performance Bonds" shall have the meaning ascribed thereto
in Section 6.16.
"Pennsylvania Performance Bond" shall have the meaning ascribed
thereto in Section 6.16.
"Pension Plan" shall have the meaning ascribed thereto in Section
3.15(d)(i).
"Permits" means all federal, state, local or other governmental
and other third party permits (including occupancy permits), certificates,
licenses, approvals, registrations, consents and authorizations.
"Permitted Encumbrances" shall have the meaning ascribed thereto
in Section 3.6.
"Person" shall mean any individual, partnership, joint venture,
limited liability company, corporation, trust, unincorporated organization
or government or any department, agency or subdivision thereof.
"Plan" shall mean any bonus, incentive compensation, deferred
compensation, pension, profit sharing, retirement, stock purchase, stock
option, stock ownership, stock appreciation rights, phantom stock, leave of
absence, layoff, sick day, vacation day or dependent care, legal services,
cafeteria, life, health, accident, disability, workmen's compensation or
other insurance, severance, separation or other employee benefit plan,
program, agreement, or arrangement, including, but not limited to, any
"employee benefit plan" within the meaning of Section 3(3) of ERISA,
maintained, sponsored or contributed to (or required to be contributed to)
by any Seller or any ERISA Affiliate of any Seller, or for which any Seller
or any ERISA Affiliate is a "successor employer" under applicable law, for
the benefit of one or more of its employees (or former employees)and/or
their beneficiaries .
"Post-Closing Period" shall mean a taxable year or other taxable
period other than a Pre-Closing Period.
"Pre-Closing Period" shall mean a taxable year or other taxable
period ending prior to the Closing Date and, with respect to any taxable
year or other taxable period that begins before and ends on or after the
Closing Date, the portion of such taxable year or other taxable period
ending immediately prior to the Closing Date.
"Pre-Paid Expenses" shall mean any Tax, rent, utility charge,
common area charge, pre-paid insurance, insurance deposit, license
agreement or any other item which has been pre-paid by any Seller, as
determined in accordance with GAAP consistently applied.
"Preliminary Closing Balance Sheet" shall have the meaning
ascribed thereto in Section 2.8(a).
"Preliminary Net Working Capital" shall have the meaning ascribed
thereto in Section 2.8(a).
"Product Inventory" shall mean all goods, products and other
items, whether finished or unfinished, works-in-progress, owned for
storage, sale or completion, including, without limitation, poles, towers,
booms, mounts, enclosures, accessories, clamps, harnesses, raw materials,
inventories, moldings, steel components, sections, parts, paint and
painting supplies, appurtenances and equipment, as determined in accordance
with GAAP consistently applied.
"Purchased Assets" shall have the meaning ascribed thereto in
Section 2.1.
"Purchased Divisions" shall have the meaning ascribed thereto in
the recitals.
"Purchased Corporate Assets" shall have the meaning ascribed
thereto in Section 2.1.
"Purchased Intellectual Property" shall have the meaning ascribed
thereto in Section 2.1(e).
"Purchased Inventory" shall have the meaning ascribed thereto in
Section 2.1(b).
"Purchased Real Property" shall have the meaning ascribed thereto
in Section 2.1(h).
"Purchase Price" shall have the meaning ascribed thereto in
Section 2.5.
"Real Property Lease" shall mean any lease for and leasehold
interests in real property and any transferable licenses and permits and
other appurtenances relating to any such lease and leasehold interest.
"Records Facility" shall mean the building located at the
Facilities located at Peoria, Illinois in which the Company currently
maintains its Books and Records, or any replacement location thereof.
"Release" shall mean any release, spill, leak, pumping, pouring,
emission, emptying, discharge, injection, escape, leaching, dumping or
disposal into the environment.
"Retiree Health Plans" shall have the meaning ascribed thereto in
Section 3.15(j).
"Retirement Plans" shall have the meaning ascribed thereto in
Section 3.15(j).
"Xxxx Construction" shall have the meaning ascribed thereto in
the preamble.
"Xxxx Installation" shall have the meaning ascribed thereto in
the preamble.
"Xxxx Mexico" shall have the meaning ascribed thereto in the
preamble.
"Xxxx Products" shall have the meaning ascribed thereto in the
preamble.
"Xxxx Services" shall have the meaning ascribed thereto in the
preamble.
"Xxxx Sub" shall have the meaning ascribed thereto in the
preamble.
"Seller Indemnitee" shall have the meaning ascribed thereto in
Section 9.3.
"Sellers" shall have the meaning ascribed thereto in the
preamble.
"Site" shall mean any real property now or previously owned or
operated by any Seller with respect to the Purchased Divisions.
"Subsidiary" shall have the meaning ascribed thereto in
Regulation S-X promulgated under the Exchange Act, as the same shall be in
effect from time to time.
"Subsidiary Sellers" shall have the meaning ascribed thereto in
the preamble.
"Surveys" shall have the meaning ascribed thereto in Section
6.15.
"Target" shall have the meanings ascribed thereto in Section
2.7(b).
"Tax" or "Taxes" shall mean any taxes, assessments, duties, fees,
levies or other governmental charges (including their principal amount and,
as the case may be, penalties, surcharges and interest thereon) levied,
imposed, assess or otherwise charged by any supranational, foreign,
federal, state, municipal or other government agency or entity, including,
without limitation, (i) corporation taxes, taxes on distributions,
withholding taxes, VAT, turnover, consumption, real and personal property
taxes, sales, excise taxes, social security taxes, payroll taxes, property
taxes, business taxes, transfer taxes and contribution taxes, stamp duty,
and capital taxes registration taxes and any taxes based on salaries, and
(ii) any Tax due as a result of any joint and several obligation with such
Person or any obligation to bear the Taxes of such Person (in particular as
a result of a tax consolidation or any similar agreement).
"Tax Authority" shall mean any taxing or other authority
competent to impose any liability in respect of Taxes or responsible of the
administration and/ or collection of Taxes or enforcement of any law in
relation to Taxes.
"Tax Return" shall mean any return, report, information return or
other document (including any related or supporting information) filed or
required to be filed with any federal, state, local or foreign governmental
entity or other authority in connection with the determination, assessment
or collection of any Tax or the administration of any Laws, regulations or
administrative requirements relating to any Tax.
"Title Commitments" shall have the meaning ascribed thereto in
Section 6.15.
"Title Company" shall have the meaning ascribed thereto in
Section 6.15.
"Title Policies" shall have the meaning ascribed thereto in
Section 6.15.
"Tower Division" shall have the meaning ascribed thereto in the
recitals.
"Trademarks" shall mean all trademarks, tradenames, service
marks, corporate names, Logos, trade dress and domain names, together with
all translations, adaptations, derivations, and combinations thereof and
including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith.
"Transaction Documents" shall mean this Agreement, the Assumption
Agreement, the Xxxx of Sale and Assignment Agreement, and all other
contracts, agreements, schedules, certificates and other documents being
delivered pursuant to or in connection with this Agreement.
"Transfer Taxes" shall have the meaning ascribed thereto in
Section 5.1.
"VAT" shall mean a Value Added Tax.
"Valuation Date" shall have the meaning ascribed thereto in
Section 6.11(c).
"WARN Act" shall have the meaning ascribed thereto in Section
3.15(b).
"Year-end Financial Statements" shall have the meaning ascribed
thereto in Section 3.4(a).
1.2 Construction. For all purposes of this Agreement, unless otherwise
expressly provided or unless the context requires otherwise:
(a) the terms defined in Section 1.1 and elsewhere in this
Agreement may include both the plural and singular, as the context may
require;
(b) the words "herein", "hereto" and "hereby", and other words of
similar import, refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision of this Agreement;
(c) unless otherwise specified, references to Articles, Sections,
paragraphs, recitals, clauses, subclauses, subparagraphs, Exhibits and
Schedules are references to Articles, Sections, paragraphs, recitals,
clauses, subclauses, subparagraphs, Exhibits and Schedules of this
Agreement;
(d) the words "including" and "include" and other words of
similar import shall be deemed to be followed by the phrase "without
limitation";
(e) any reference herein to a statute, rule or regulation of any
governmental entity (or any provision thereof) shall include such statute,
rule or regulation (or provision thereof), including any successor thereto,
as it may be amended from time to time; and
(f) whenever the context may require, any pronouns used herein
shall include the corresponding masculine, feminine or neuter forms, and
the singular form of names and pronouns shall include the plural and vice
versa.
ARTICLE II
PURCHASE AND SALE OF ASSETS
2.1 Purchase and Sale of Assets. Upon the terms and subject to the
conditions set forth in this Agreement, Buyer agrees to purchase from the
Sellers and each Seller agrees to sell, convey, transfer, assign and
deliver to Buyer on the Closing Date all of such Seller's right, title and
interest in and to the Purchased Assets. The term "Purchased Assets" shall
mean all of the assets and properties (other than the Excluded Assets set
forth in Section 2.2) that are owned by the Sellers as of the Closing that
are (i) used in or held for use in connection with or that are necessary
for the conduct of the Purchased Divisions or (ii) listed on Schedule 2.1
(the assets listed on Schedule 2.1, the "Purchased Corporate Assets").
Except as provided otherwise in Section 2.2, the Purchased Assets shall
include the following:
(a) all equipment, supplies, motor vehicles, machinery, tools,
furniture, furnishings, computers, computer software and computer programs
and other fixed assets (collectively, "Furnishings and Equipment") used in
the Purchased Divisions;
(b) all Product Inventory used or produced for or by the
Purchased Divisions (the "Purchased Inventory");
(c) all Current Assets of the Sellers relating to the Purchased
Divisions or the Purchased Corporate Assets, including, without limitation,
notes, accounts receivable and Pre-Paid Expenses, and all long term assets
(not otherwise described in clause (a) above) of the Sellers relating to
the Purchased Divisions or the Purchased Corporate Assets;
(d) all Books and Records relating to the Purchased Divisions or
the Purchased Corporate Assets or copies thereof and copies of all Books
and Records relating to Taxes;
(e) all Intellectual Property owned or licensed and used or held
for use by the Sellers in connection with the business of the Purchased
Divisions, including, without limitation, all Intellectual Property
incorporating the Trademark "XXXX" (alone or in any combination of words or
Logos, or any variation thereof) (the "Purchased Intellectual Property"),
including, without limitation, any contracts, agreements and commitments
relating to any Intellectual Property;
(f) all Real Property Leases relating to the Purchased Divisions
or the Purchased Corporate Assets, if any, as set forth on Schedule 2.1(f)
(the "Assigned Real Property Leases"), together with all deposits with
respect thereto and all other rights therefrom;
(g) all Non-Property Leases relating to the Purchased Divisions
or the Purchased Corporate Assets, together with all deposits with respect
thereto and all other rights therefrom (the "Assigned Non-Property
Leases"), including, without limitation, those set forth on Schedule
2.1(g);
(h) the real property listed on Schedule 2.1(h), together with
all buildings, facilities, fixtures and other improvements thereon and all
easements, rights of way and transferable Permits and other appurtenances
related thereto (the "Purchased Real Property"), including, without
limitation, the Facilities, subject to all easements or other rights of way
listed on Schedule 2.1(h);
(i) all material contracts, agreements and commitments related to
the Purchased Divisions or the Purchased Corporate Assets as set forth on
Schedule 2.1(i) (the "Assigned Contracts");
(j) to the extent their transfer is permitted by Law and subject
to the limitations set forth on Schedule 2.1(j), all Permits held by the
Sellers in connection with the conduct of the Purchased Divisions or the
Purchased Corporate Assets;
(k) all rights under or pursuant to all warranties,
representations and guarantees made by suppliers, manufacturers and
contractors in connection with the Purchased Assets or the Purchased
Corporate Assets;
(l) all rights of any Seller pertaining to any claims, causes of
action, rights of recovery, set-offs or defenses of any kind primarily
pertaining to, and arising out of, the Purchased Divisions or the Purchased
Corporate Assets;
(m) all rights of any Seller arising under or in connection with
any insurance policies or other contracts of insurance of any Seller or
acquired or assumed by any Seller prior to the Closing Date relating to the
Purchased Divisions or the Purchased Corporate Assets and the proceeds or
benefits of such insurance policies; and
(n) all rights, title and interest in any bank accounts of the
Sellers including any "lockbox" or other depository accounts into which
customers deposit funds as set forth on Schedule 2.1(n) ("Acquired
Accounts") (but in all events excluding any cash or other items deposited
therein as of the Closing Date).
2.2 Excluded Assets. Notwithstanding the foregoing, the Purchased
Assets shall not include the following (the "Excluded Assets"):
(a) the assets listed on Schedule 2.2(a) (the "Excluded Other
Assets");
(b) all cash and cash equivalents, either on hand or in banks, of
the Sellers;
(c) all original Books and Records relating to Taxes;
(d) the real property, together with all buildings, facilities,
fixtures and other improvements thereon and all easements, rights of way
and transferable Permits and other appurtenances thereto, located in Casa
Grande, Arizona;
(e) all the contracts, agreements, leases and commitments (i)
primarily arising out of or relating to the Excluded Other Assets or (ii)
set forth on Schedule 2.2(e);
(f) all rights of any Seller pertaining to any claims, causes of
action, rights of recovery, set-offs, or defenses of any kind primarily
pertaining to, and arising out of, the Excluded Other Assets;
(g) all assets relating to the Discontinued Operations, as set
forth on Schedule 2.2(g);
(h) all rights of any Seller arising under or in connection with
any insurance policies or other contracts of insurance of any Seller or
acquired or assumed by any Seller prior to the Closing Date primarily
relating to the Excluded Other Assets and the proceeds or benefits of such
insurance policies;
(i) all assets held in any trust or in connection with any Plan
except as otherwise provided in Section 6.11;
(j) all rights to refunds of Taxes paid by the Sellers or which
are otherwise the responsibility of the Sellers under this Agreement,
including, without limitation, those relating to (i) any Pre-Closing Period
and (ii) any Post-Closing Period relating to the Excluded Assets;
(k) all capital stock of any Person, including, without
limitation, of the Subsidiary Sellers, and all assets of the Company's
Subsidiaries listed on Schedule 2.2(k);
(l) the Sellers' rights under this Agreement and the other
Transaction Documents;
(m) all directors' and officers' liability insurance policies and
rights thereunder; and
(n) the proceeds of any of the foregoing.
2.3 Assumption of Liabilities. Upon the Closing, Buyer shall assume
and agree to pay, honor and discharge, in a timely manner in accordance
with the terms thereof, only the following liabilities of the Sellers (the
"Assumed Liabilities"):
(a) the liabilities and obligations of any Seller arising after
the Closing Date under the Assigned Contracts, the Assigned Real Property
Leases and the Assigned Non-Property Leases; provided that Buyer shall not
assume any liability or obligation that constitutes a breach of a
representation or warranty contained herein or that is due to any breach or
default by any Seller;
(b) subject to Section 2.4(a), all Current Liabilities of the
Sellers incurred in the ordinary course of business to the extent related
to the Purchased Divisions, Purchased Assets or the Affected Employees and
to the extent reflected on the Closing Balance Sheet (other than
liabilities and obligations related to Taxes (except for accrued sales and
use taxes and accrued real property taxes reflected on the Closing Balance
Sheet, which are Assumed Liabilities), costs of the transactions
contemplated by this Agreement, environmental claims, any liabilities
relating to employees who are non-Affected Employees or severance
expenses);
(c) all liabilities and obligations arising under or in
connection with the Pension Plan and the Retiree Health Plans; and
(d) all liabilities and obligations arising under any
Environmental Law relating to the Facilities located in Peoria, Illinois,
including all such liabilities and obligations arising out of or in
connection with the use, storage, handling, treatment, processing,
intra-Facility disposal, generation or intra-Facility transportation,
Release and/or threatened Release of any Hazardous Materials at such
location and/or migration of any Hazardous Materials to or from such
location (collectively "On-Site Peoria Conditions"), provided, however,
that all liabilities and obligations arising under any Environmental Laws
relating to the disposal, transportation, Release or threatened Release of
any Hazardous Materials at any off-site location prior to the Closing Date
shall be the sole liability and responsibility of the Sellers.
2.4 Excluded Liabilities. Buyer and the Sellers agree that Buyer is
not assuming any liabilities or obligations of the Sellers except as
expressly provided in Sections 2.3 and 5.1, such excluded liabilities to
include (the "Excluded Liabilities"):
(a) all liabilities and obligations for Indebtedness, including
all liabilities arising out of the Credit Documents;
(b) any liability of the Sellers for Taxes (other than any
liability for accrued sales and use taxes and accrued real property taxes
reflected on the Closing Balance Sheet);
(c) all liabilities and obligations arising out of the Excluded
Assets and all liabilities and obligations relating to the Discontinued
Operations;
(d) except as set forth in Section 2.3(d), all liabilities and
obligations arising under any Environmental Law relating to the operation
of the Purchased Divisions or the condition of the Purchased Assets prior
to the Closing Date, including all such liabilities and obligations arising
out of or in connection with the use, storage, handling, treatment,
processing, disposal, generation, transportation, Release and or threatened
Release of any Hazardous Materials at any on-site or off-site location;
(e) subject to Sections 2.3(b), all liabilities (other than
liabilities under the Pension Plan or the Retiree Health Plans) related to
any employee or any former employee of any Seller or any Plan (other than
the Pension Plan and the Retiree Health Plans) including any plan providing
retiree health benefits;
(f) unless specifically provided in Sections 2.3(c) or 2.3(d),
all liabilities arising in connection with any claim, action, suit or
proceeding instituted against Buyer or any of its Affiliates before, on or
after the Closing Date relating to the conduct of the business of the
Sellers prior to the Closing Date, including those matters disclosed in the
Schedule 3.10 hereto; and
(h) all liabilities for checks which have been written for the
account of any Seller and which have not been cashed, cleared or otherwise
settled on or before the Closing Date.
2.5 Purchase Price. In consideration of the purchase by Buyer of the
Purchased Assets, Buyer shall, on the Closing Date, pay to the Company by
wire transfer of immediately available funds to such bank account or
accounts designated by the Company in writing at least two (2) Business
Days prior to the Closing Date the aggregate purchase price of Eight
Million Seven Hundred and Fifty Thousand United States dollars
($8,750,000.00), as adjusted pursuant to Sections 2.7 and 2.8 (such amount,
the "Purchase Price").
2.6 Cancellation of Intercompany Accounts Receivable and Accounts
Payable. All intercompany accounts receivable, intercompany accounts
payable and other obligations due and owing between any Seller and any of
its Affiliates shall be cancelled as of the Closing Date.
2.7 Pre-Closing Net Working Capital.
(a) Prior to the Closing Date, but in no event more than seven
(7) Business Days prior to the Closing Date, the Sellers shall prepare in
good faith an estimated balance sheet of the Purchased Assets and the
Assumed Liabilities as of the Closing Date (the "Estimated Closing Balance
Sheet"), which shall include an estimate of the net working capital
included in the Purchased Assets and the Assumed Liabilities at the Closing
Date ("Estimated Net Working Capital"), which shall quantify in reasonable
detail the items constituting Current Assets that are included in the
Purchased Assets and the items constituting Current Liabilities that are
included in the Assumed Liabilities and which shall exclude from the
calculation the Excluded Assets and Excluded Liabilities. The Estimated
Closing Balance Sheet and the Estimated Net Working Capital shall be
prepared in accordance with GAAP consistently applied. Buyer shall review
the Estimated Closing Balance Sheet and Estimated Net Working Capital and
the parties shall resolve in good faith any disagreements relating thereto
as soon as practicable, but in no event later than three (3) Business Days
prior to the Closing. In the event that the parties are unable to resolve
any disagreement relating thereto, the Estimated Net Working Capital shall
be deemed to be equal to Buyer's good faith estimate of the net working
capital included in the Purchased Assets and the Assumed Liabilities for
the purposes of adjusting the Purchase Price pursuant to Section 2.7(b).
(b) The Purchase Price shall be adjusted as of the Closing Date
as follows: (i) If the Estimated Net Working Capital is less than
$26,911,000 (the "Target"), then the Purchase Price shall be reduced by the
amount of such difference or (ii) if the Estimated Net Working Capital
exceeds the Target, then the Purchase Price shall be increased by the
amount of such excess.
2.8 Post-Closing Working Capital Adjustment.
(a) Within 30 days after the Closing Date, Sellers shall deliver
to Buyer a preliminary balance sheet of the Purchased Assets and the
Assumed Liabilities as of the Closing Date, prepared in accordance with
GAAP consistently applied (the "Preliminary Closing Balance Sheet"), and a
calculation of net working capital included in the Purchased Assets and the
Assumed Liabilities, prepared in accordance with GAAP consistently applied
("Preliminary Net Working Capital") which shall quantify in reasonable
detail the items constituting Current Assets that are included in the
Purchased Assets and the items constituting Current Liabilities that are
included in the Assumed Liabilities and which shall exclude from the
calculation the Excluded Assets and Excluded Liabilities. Buyer will give
the Sellers and their representatives reasonable access to the Books and
Records of the Purchased Assets and the Assumed Liabilities for the purpose
of preparing the Preliminary Closing Balance Sheet. Buyer and its
representatives shall review the Preliminary Closing Balance Sheet, which
review shall be completed within 90 days after the Closing Date. During
such period of time Buyer may dispute the Preliminary Closing Balance Sheet
only with regard to the calculation of Preliminary Net Working Capital. If
Buyer shall raise any dispute relating to the calculation of Preliminary
Net Working Capital, Buyer, the Sellers and their respective
representatives shall use their reasonable best efforts to promptly resolve
any such dispute and reach agreement in good faith on the calculation of
Preliminary Net Working Capital. If such agreement has not been reached
within 30 days (or longer, as mutually agreed by the parties) after
delivery of a dispute notice by Buyer, Buyer and the Sellers shall submit
the disagreement to a nationally recognized independent accounting firm
(other than Buyer's, Guarantor's or any Seller's accountants) jointly
selected by Buyer and the Sellers. The resolution by such firm of such
disagreement and its determination of the amount of the Preliminary Net
Working Capital shall be completed as promptly as practicable and shall be
final and binding upon Buyer and the Sellers. The Preliminary Net Working
Capital as finally determined in accordance with this Section 2.8(a) shall
be referred to as "Final Net Working Capital." The Preliminary Closing
Balance Sheet as finally determined in accordance with this Section 2.8(a)
shall be referred to as "Closing Balance Sheet." The fees, costs and
expenses of the independent accounting firm selected in the event of a
dispute shall be shared equally by the Sellers, on the one side, and Buyer,
on the other side. The Sellers shall pay the fees, costs and expenses of
their accountants and Buyer shall pay the fees, costs and expenses of its
accountants.
(b) If Final Net Working Capital exceeds Estimated Net Working
Capital, then Buyer shall pay to the Sellers the amount of such excess
("Buyer's Refund Amount"), together with interest thereon from the Closing
Date at 6% per annum; provided, however, that if, as provided in the last
sentence of Section 2.7(a), Buyer's good faith estimate of the net working
capital included in the Purchased Assets and the Assumed Liabilities was
used to determine the Estimated Net Working Capital for the purposes of
adjusting the Purchase Price pursuant to Section 2.7(b), then Buyer shall
also pay to Sellers, concurrently with the payment of Buyer's Refund
Amount, an additional amount equal to fifteen percent (15%) of Buyer's
Refund Amount. If Final Net Working Capital is less than Estimated Net
Working Capital, then the Sellers shall pay to Buyer the amount of such
difference, together with interest thereon from the Closing Date at 6% per
annum.
(c) Any amount required to be paid by Buyer or the Sellers
pursuant to Section 2.8(b) shall be paid no later than five (5) Business
Days after the determination of Final Net Working Capital by wire transfer
of immediately available funds to an account or accounts designated in
writing by the party entitled to such payment.
(d) For purposes of determining the Estimated Net Working Capital
and Final Net Working Capital (i) the corporate level reserves for doubtful
accounts related to the Purchased Corporate Assets (i.e., $3,150,000, as
specifically set forth on Schedule 2.8(d)) and the corporate level reserves
for obsolete and slow-moving inventory related to the Purchased Corporate
Assets (i.e., $1,250,000) that were reflected on the balance sheet at
October 31, 2002, may not be decreased and may not be used to offset
deficiencies in other reserves of the Sellers; provided, however, that the
reserve for doubtful accounts shown on Schedule 2.8(d) may be reduced in
the amount that any account receivable relating to a specific reserve is
collected, (ii) the accrual captioned "Other Accrued" with respect to the
Foreign Division on the balance sheet at October 31, 2002 (i.e., $928,000)
will not be decreased, (iii) the reserve for the "Qwest installation
expense" with respect to the Enclosures Division on the balance sheet at
October 31, 2002 (i.e, $335,000) will not be decreased; provided, however,
that the accrual may be reduced in the amount that actual costs are
incurred for the specific intended purpose the accrual was established for
and (iv) all Current Liabilities with respect to the Pension Plan are not
included in the calculation.
(e) If the Sellers shall receive any instrument of payment
relating to any of the Current Assets transferred to Buyer pursuant to
Section 2.1(c), the Sellers shall forthwith deliver such instrument to
Buyer, endorsed where necessary, in favor of Buyer. Sellers shall take all
steps necessary to terminate or cancel any "sweep" of Acquired Accounts by
lenders of the Sellers as of the Closing.
2.9 Closing. The closing of the sale referred to in Section 2.1, the
assumption referred to in Section 2.3, and any other transaction
contemplated hereby (the "Closing") shall take place at the offices of
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, or such other location as shall be mutually agreed upon by the
Sellers and Buyer, at 10:00 a.m. (local time) on the earliest Business Day
permitted by Rule 14c-2 of the Exchange Act or, if all of the conditions
set forth in Article VII (other than those conditions that by their nature
are to be satisfied at the Closing, but subject to the satisfaction or
waiver of those conditions) have not been satisfied or waived by the
Sellers or Buyer, as appropriate, on such date, at a date to be mutually
agreed upon by the Sellers and Buyer, which shall be at least one (1) but
no more than three (3) calendar days after the date following the
satisfaction or waiver by the Sellers or Buyer, as appropriate, of the
conditions set forth in Article VII (other than those conditions that by
their nature are to be satisfied at the Closing, but subject to the
satisfaction or waiver of those conditions); provided, however, that in the
event the parties are not able to mutually agree on a Closing Date in
accordance with the immediately preceding clause, the parties agree that
the Closing Date shall be on the third (3rd) calendar day following the
satisfaction or waiver of all of the conditions set forth in Article VII
(other than those conditions that by their nature are to be satisfied at
the Closing, but subject to the satisfaction or waiver of those conditions)
or, if such day shall not be a Business Day, on the first Business Day
thereafter.
2.10 Nontransferability. Subject to Section 7.2(d), to the extent that
the transactions contemplated hereby would constitute the assignment of any
contract, lease, commitment, sales order, purchase order, account, license,
Permit, membership or undertaking of any Seller in violation of the terms
thereof, this Agreement shall not constitute an agreement to assign the
same. Such Seller shall (i) hold in trust for the benefit and account of
Buyer (at Buyer's expense) any non-assignable Purchased Assets, (ii) remit
to Buyer all amounts paid to such Seller with respect thereto after the
Closing promptly upon the receipt thereof and (iii) when such
non-assignable Purchased Assets become assignable to Buyer without
constituting a breach thereof, promptly assign or otherwise transfer such
assets to Buyer. So long as the Sellers shall comply with their obligations
under and pursuant to the immediately preceding sentence, Buyer shall pay,
honor and discharge, in a timely manner, any and all liabilities and
obligations under such non-assignable Purchased Assets. Nothing contained
herein shall relieve the Sellers of their obligations hereunder to obtain
all necessary consents for the assignment of the Purchased Assets.
2.11 Allocation of Purchase Price. Buyer and the Sellers agree to
allocate the aggregate purchase price to be paid for the Purchased Assets
and the Assumed Liabilities, in such manner as Buyer and the Sellers agree,
as promptly as possible following the date of final determination of the
Closing Balance Sheet, in a manner consistent with Section 1060 of the
Code. Buyer and the Sellers agree to timely file any information that may
be required to be filed under Section 1060 of the Code and Treasury
Regulations thereunder. None of the Sellers or Buyer shall file any Tax
Return or take any position for any tax purpose inconsistent with the
allocation determined pursuant to this Section 2.11.
2.12 Further Assurances; Post-Closing Cooperation. (a) Subject to the
terms and conditions of this Agreement, at any time or from time to time
after the Closing, at Buyer's reasonable request, any Seller shall execute
and deliver to Buyer such other instruments of sale, transfer, conveyance,
assignment and confirmation, provide such materials and information and
take such other actions as shall be reasonably deemed necessary to
transfer, convey and assign to Buyer, and to confirm Buyer's title to, all
of the Purchased Assets. Without limiting the provisions of this Section
2.12(a), to the extent that Buyer discovers any additional assets or
properties, including without limitation, any Intellectual Property, which
should have been transferred to Buyer as Purchased Assets or Purchased
Intellectual Property, the Sellers shall cooperate with Buyer and execute
and deliver any instruments of transfer or assignment reasonably necessary
to transfer and assign such assets or properties to Buyer, and Buyer shall
be solely responsible for all costs relating to the preparation and the
filing or other recordation of any such instruments of transfer or
assignment. Without limiting the provisions of this Section 2.12(a), to the
extent that the Sellers discover any assets or properties, including,
without limitation, any Intellectual Property, which does not constitute
Purchased Assets or Purchased Intellectual Property and/or which was
inadvertently or otherwise mistakenly transferred to Buyer and/or which is
an asset or properties, including, without limitation, any Intellectual
Property, that is an Excluded Asset which was inadvertently or otherwise
mistakenly transferred to Buyer, Buyer shall cooperate with any Seller and
execute and deliver any instruments of transfer or assignment reasonably
necessary to transfer and assign such asset or property back to such Seller
or an Affiliate of such Seller which such Seller designates, or otherwise
re-vest in such Seller or its designated Affiliate title to such asset or
property, and the Sellers shall be solely responsible for all costs
relating to the preparation and the filing or other recordation of any such
instruments of transfer or assignment.
(b) Following the Closing, each party will afford the other
party, its counsel and its accountants, during normal business hours,
reasonable access to the books, records and other data relating to the
Purchased Divisions, the Purchased Corporate Assets, or the Excluded Other
Assets with respect to the period prior to the Closing Date in its
possession and the right to make copies and extracts therefrom, to the
extent that such access may be reasonably required by the requesting party
in connection with (i) the preparation of Tax Returns, (ii) the
determination or enforcement of rights and obligations under this
Agreement, (iii) compliance with the requirements of any governmental or
regulatory authority, (iv) the determination or enforcement of the rights
and obligations of any Indemnified Party or (v) in connection with any
actual or threatened action or proceeding. Any information obtained by such
party in accordance with this Section 2.12 shall be treated as Confidential
Information in accordance with Section 6.3.
(c) If requested by Buyer, the Sellers shall use commercially
reasonable efforts to assist Buyer and its accountants, at Buyer's cost and
expense, in the preparation of historical financial statements of the
Purchased Divisions and the Purchased Corporate Assets.
(d) Notwithstanding anything to the contrary contained in this
Section 2.12, if the parties are in an adversarial relationship in
litigation or arbitration, the furnishing of information, documents or
records in accordance with Section 2.12 shall be subject to applicable
rules relating to discovery.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers jointly and severally represent and warrant, as of
the date hereof and (except with respect to Section 3.4(d)) as of the
Closing Date, to Buyer as follows:
3.1 Organization.
(a) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware with
all requisite corporate power and authority to carry on its business as
presently conducted, to own or lease of the Purchased Assets held by it and
to execute and deliver this Agreement and the other Transaction Documents
to which the Company is a party and to perform its obligations hereunder
and thereunder.
(b) Xxxx Construction is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Texas with
all requisite corporate power and authority to carry on its business, to
own or lease its respective portion of the Purchased Assets and to execute
and deliver this Agreement and the other Transaction Documents to which
Xxxx Construction is a party and to perform its obligations hereunder and
thereunder.
(c) Xxxx Products is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Indiana with
all requisite corporate power and authority to carry on its business, to
own or lease its respective portion of the Purchased Assets and to execute
and deliver this Agreement and the other Transaction Documents to which
Xxxx Products is a party and to perform its obligations hereunder and
thereunder.
(d) Xxxx Mexico is a sociedad anonima de capital variable duly
organized, validly existing, and in good standing under the laws of the
United Mexican States with all requisite corporate power and authority to
carry on its business, to own or lease its respective portion of the
Purchased Assets and to execute and deliver this Agreement and the other
Transaction Documents to which Xxxx Mexico is a party and to perform its
obligations hereunder and thereunder.
(e) Xxxx Services is a sociedad anonima de capital variable duly
organized, validly existing, and in good standing under the laws of the
United Mexican States with all requisite corporate power and authority to
carry on its business, to own or lease its respective portion of the
Purchased Assets and to execute and deliver this Agreement and the other
Transaction Documents to which Xxxx Services is a party and to perform its
obligations hereunder and thereunder.
(f) Xxxx Sub is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Alabama with all
requisite corporate power and authority to carry on its business, to own or
lease its respective portion of the Purchased Assets and to execute and
deliver this Agreement and the other Transaction Documents to which Xxxx
Sub is a party and to perform its obligations hereunder and thereunder.
(g) Xxxx Installation is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware with
all requisite corporate power and authority to carry on its business, to
own or lease its respective portion of the Purchased Assets and to execute
and deliver this Agreement and the other Transaction Documents to which
Xxxx Installation is a party and to perform its obligations hereunder and
thereunder.
3.2 Authorization. The execution, delivery and performance of this
Agreement and the other Transaction Documents to be executed and delivered
by each Seller as contemplated hereby, and the consummation of the
transactions contemplated hereby and thereby, have been duly authorized by
the respective Board of Directors of each such Seller. Subject to the
approval of the shareholders of the Sellers, including, in the case of the
Company, pursuant to Sections 242 and 271 of the DGCL, if necessary, no
other corporate action on the part of each Seller is necessary to authorize
the execution, delivery and performance of this Agreement and the other
Transaction Documents to be executed and delivered by each Seller as
contemplated hereby and the consummation by each Seller of the transactions
contemplated hereby and thereby. This Agreement and the other Transaction
Documents to be executed and delivered by the Sellers as contemplated
hereby, when delivered in accordance with the terms hereof, shall be valid
and binding obligations of each such Seller enforceable against such Seller
in accordance with their terms, except to the extent that their
enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar Laws affecting the enforcement of
creditors' rights generally and to general equitable principles.
3.3 Consents and Approvals; No Violations. Except as set forth on
Schedule 3.3 and (ii) any consents, approvals, waivers of or amendments
that may be required under the Credit Agreement and/or the Bank Security
Agreement in connection with, or to consummate, the transactions
contemplated by this Agreement and the other Transaction Documents
necessary to release any security interest in any of the Purchased Assets
held by the lenders under the Credit Agreement (the "Bank Consent"), the
execution, delivery and performance of this Agreement and the other
Transaction Documents and the consummation of the transactions contemplated
hereby will not, with or without the giving of due notice or the lapse of
time or both: (a) violate, conflict with, or result in a breach or default
under any provision of the respective certificate of incorporation or
by-laws (or other appropriate organizational document(s)) of any Seller;
(b) violate in any material respect any statute or ordinance or any order,
judgment or decree of any court or any governmental or regulatory body,
agency or authority applicable to any Seller or the Purchased Assets or by
which the Purchased Assets may be bound; (c) subject to any obligations of
the Company pursuant to Section 14 of the Exchange Act, require any filing
by any Seller or require any Seller to obtain any Permit, consent or
approval of, or require any Seller to give any notice to, any governmental
or regulatory body, agency or authority or any other person or entity,
including, without limitation, under any Assigned Contract or Permit; (d)
result in a material violation or material breach by any Seller of,
constitute (with or without due notice or lapse of time or both) a material
default by any Seller (or give rise to any right of termination,
cancellation, payment or acceleration) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, license, franchise,
Permit, agreement, lease, or franchise agreement to which any Seller is a
party, or by which any Seller or the Purchased Assets are bound, or (e)
give rise to a declaration or imposition of any Encumbrance on any
Purchased Asset.
3.4 Financial Statements; Material Adverse Change; Absence of Changes.
(a) The Sellers have heretofore furnished Buyer with the unaudited
pro-forma balance sheet of the Purchased Divisions and the Purchased
Corporate Assets as of December 31, 2001 and the related pro-forma
statements of income for the fiscal year ended December 31, 2001
(collectively the "Year-end Financial Statements") and the unaudited
pro-forma balance sheet of the Purchased Divisions and the Purchased
Corporate Assets as of October 31, 2002 and the related pro-forma
statements of income for the ten (10) month period then ended (the "Interim
Financial Statements" and, together with the Year-end Financial Statements,
the "Financial Statements"). The Financial Statements have been prepared in
accordance with GAAP consistently applied. The Financial Statements fairly
present the financial condition of the Purchased Divisions and the
Purchased Corporate Assets at the dates thereof and the related statements
of income fairly present the results of operations of the Purchased
Divisions (including effects of the Purchased Corporate Assets) for the
periods indicated. All reserves reflected in the Financial Statements have
been established in the ordinary course of business, in accordance with
GAAP, consistently applied. The Acquired Accounts are all of the accounts
of the Sellers into which customers of the Sellers deposit funds.
(b) Except for the execution and delivery of this Agreement, the
transactions to take place pursuant hereto on or prior to the Closing Date
and the events, facts or occurrences set forth on Schedule 3.4(b), since
the date of the Interim Financial Statements, there has not been a Material
Adverse Change.
(c) Except as reflected or reserved against in the Financial
Statements or in the notes thereto or as disclosed on Schedule 3.4(c),
there are no liabilities, Indebtedness or obligations against, relating to
the Purchased Divisions or affecting the Purchased Assets, other than those
incurred since the date of the Interim Financial Statements in the ordinary
course of business consistent with past practice (none of which relates to
any breach of contract, breach of warranty, tort, infringement or violation
of Law or arose out of any action, proceeding, claim, complaint, grievance,
investigation or unfair labor practice complaint, grievance or
investigation).
(d) Except as set forth on Schedule 3.4(d), since the date of the
Interim Financial Statements, the Sellers have conducted their business in
the ordinary course consistent with past practice and there has not been
any:
(i) in a single transaction or a series of related transactions,
sale (including by sale-leaseback), lease, license, pledge,
transfer or disposition of any assets of the Purchased Divisions,
other than sales of inventory in the ordinary course of business
and consistent with past practice;
(ii) acquisition of or agreement to acquire by merging with, or
by purchasing a substantial equity interest in or a substantial
portion of the assets of, or by any other manner, any business or
any corporation, partnership, limited liability company,
association or other business entity, in a transaction or series
of related transactions;
(iii) change in any accounting methods, principles or practices
by the Sellers affecting the Purchased Divisions;
(iv) revaluation by the Sellers of any of the Purchased Assets or
Assumed Liabilities, including without limitation, any
write-offs, increases or decreases in any reserves or any
write-up or write-down of the value of inventory, property,
plant, equipment or any other property, in each case, which would
constitute Purchased Assets or Assumed Liabilities, or any change
in any assumptions underlying, or facts relating to, or methods
of calculating, any bad debt, contingency or other reserves
relating to the Purchased Divisions;
(v) Indebtedness incurred, assumed or guaranteed by the Sellers
or any commitment to incur Indebtedness entered into by the
Sellers, in each case, which would constitute Assumed
Liabilities, or any loans made or agreed to be made by the
Sellers, other than relating to performance or surety bonds;
(vi) increase in the compensation or benefits of any officer or
other employee (including any such increase pursuant to any
bonus, pension, profit sharing or other plan or commitment) or
any increase in the compensation or benefits payable or to become
payable to any officers or employees;
(vii) granting of any bonus, incentive compensation, severance,
termination, change of control, service, award or other like
benefit to any officer or other employee;
(viii) incurrence or imposition of an Encumbrance, other than
Permitted Encumbrance, on any of the Purchased Assets;
(ix) delay or failure to pay or perform any Assumed Liability
(including accounts payable) of the Sellers when due;
(x) acceleration or prepayment of any accounts receivable or any
Indebtedness or other material obligation constituting a
Purchased Asset owed to any Seller before it is due or otherwise
owed;
(xi) termination, amendment, modification or waiver of, or any
breach, violation or default by any party under, any Assigned
Contract or enter into any contract that would be required to be
disclosed on Schedule 3.9;
(xii) forgiveness, waiver or agreement to extend repayment of any
Indebtedness or other material obligation owed by or to any
Seller, other than under the Credit Agreement;
(xiii) disposition or lapse of any rights to use any of the
Purchased Intellectual Property;
(xiv) capital expenditures or commitments for additions to any
property of any Seller relating to the Purchased Divisions and
constituting capital assets not previously contained in a capital
budget furnished to Buyer; or
(xv) except as provided in Section 6.12, negotiation, discussion
or contract or agreement to take or agree to take any of the
actions described in this subsection (d).
3.5 Assigned Real Property Leases. Schedule 3.5 contains a list and
description of the term of and annual rent on each Assigned Real Property
Lease. The Seller set forth opposite each Assigned Real Property Lease in
Schedule 3.5 is the lessee or sublessee under such Assigned Real Property
Lease. The applicable Seller has good and valid leasehold title to each
property subject to an Assigned Real Property Lease, free and clear of all
Encumbrances, other than Permitted Encumbrances. The Sellers have delivered
to Buyer true, correct and complete copies of each Assigned Real Property
Lease and all amendments thereto. Each Assigned Real Property Lease is in
full force and effect and constitutes a legal, valid and binding agreement
of the Seller party thereto and, to the Seller's knowledge, the lessor
thereto, enforceable against such Seller and, to the Seller's knowledge,
the lessor thereto, in accordance with such terms. Except as disclosed on
Schedule 3.5, neither the Seller party thereto nor, to the Seller's
knowledge, the lessor thereto, is in violation or breach of, or default
under, any such Assigned Real Property Lease (or with notice or lapse of
time or both, would be in violation or breach of or default under, any such
Assigned Real Property Lease) in any material respect.
3.6 Title to Properties; Encumbrances. Except as set forth on Schedule
3.6, the Sellers have good and valid title to all Purchased Assets
(tangible and intangible), in each case subject to no Encumbrance, except
for (i) liens arising by operation of Law which are, individually or in the
aggregate, of immaterial amount (other than Taxes not included in clause
(ii) hereof), other than under ERISA or section 412 of the Code, (ii)
Encumbrances for current taxes, assessments or governmental charges or
levies on property not due and payable as of the Closing Date, (iii)
Encumbrances arising from the Credit Documents, (iv) with respect to real
property, any zoning, building codes and other land use Laws regulating the
use or having jurisdiction over real property, which do not, individually
or in the aggregate, have a material impact on the use or value of such
property, and (v) with respect to real property, any easements, covenants,
conditions restrictions or other similar matters of record affecting title
to such property which would not or do not impair the use or occupancy of
such property in its current use and operation. Encumbrances referred to in
clauses (i) through (v) above are collectively referred to as "Permitted
Encumbrances." Upon the Closing, the Sellers will transfer to Buyer good
and valid title to all of the Purchased Assets subject to no Encumbrance
(other than Permitted Encumbrances, but not including Encumbrances arising
from the Credit Documents). Except as set forth on Schedule 3.6, the
Purchased Assets are in good working order and condition, ordinary wear and
tear excepted. The Purchased Assets constitute all assets necessary for the
conduct of the Purchased Divisions as currently conducted.
3.7 Purchased Real Property. Schedule 2.1(h) contains a list of all
the real property included in the Purchased Assets and a list of all
indebtedness secured by a lien, mortgage or deed of trust thereon. All of
the buildings, structures and appurtenances situated on the real property
listed or required to be listed on Schedule 2.1(h) are in good operating
condition and in a state of good maintenance and repair, ordinary wear and
tear excepted, and are adequate and suitable for the purpose for which they
are presently being used. The real property set forth on Schedule 2.1 (h)
and the property subject to an Assigned Real Property Lease constitute all
of the real property interests owned, leased or occupied in whole or in
part by any Seller which are used in or necessary in connection with the
business of the Purchased Divisions.
3.8 Tax Matters. (a) Each Seller has timely filed or caused to be
timely filed with the appropriate Tax Authorities all material Tax Returns
for any Tax that are required to be filed with respect to the Purchased
Assets prior to the Closing Date.
(b) Except as set forth on Schedule 3.8(b), no material Tax liens
have been filed with respect to the Purchased Divisions and no material
cliams are being asserted in writing that would give rise to a Tax lien
with respect to the Purchased Assets.
(c) Except as set forth on Schedule 3.8, there is no action, suit
proceeding investigation, audit or cliam now pending or, to the knowledge
of any Seller, threatened, by any Tax Authority regarding any material Tax,
relating to the Purchased Assets for any taxable year or other taxable
period.
3.9 Material Contracts. (a) Schedule 3.9(a) sets forth a true and
complete list of all written contracts, agreements or commitments with
respect to the Purchased Divisions which constitute the following: (i) any
agreement, contract or commitment limiting the freedom of any Seller to
engage in any line of business similar to the Purchased Divisions or to
compete with any other Person in any business similar to the Purchased
Divisions; (ii) any agreement, contract or commitment relating to capital
expenditures in excess of $100,000; (iii) any notes, mortgages, indentures,
letters of credit, performance bonds and other agreements and instruments
for or relating to any lending or indebtedness or any guarantee or other
contingent liability in respect of any indebtedness or obligation of any
Person other than the endorsement of negotiable instruments for collection
in the ordinary course of business; (iv) any loan or advance to, or
investment in, any Person, or any agreement, contract or commitment
relating to the making of any such loan, advance or investment, (v) any
agreement, contract or commitment not entered into in the ordinary course
of business in excess of $25,000; (vi) any collective bargaining or similar
labor contract covering any employee; (vii) any other agreements, contracts
or commitments that involve the payment or potential payment pursuant to
the terms of such agreement, contract or commitment, by or to the Sellers
of more than $100,000 annually or (viii) all material licenses and
agreements with respect to Purchased Intellectual Property. Each contract
or agreement set forth on Schedule 3.9(a) or required to be set forth in
Schedule 3.9(a) is in full force and effect and constitutes a legal, valid
and binding agreement of the Seller party thereto and, to each Seller's
knowledge, of each other party thereto, enforceable against such Seller
and, to each Seller's knowledge, each other party thereto, in accordance
with its terms. Except as set forth on Schedule 3.9(a), no Seller and, to
each Seller's knowledge, no other party thereto, is in violation or breach
of, or default under, any such contract (or with notice or lapse of time or
both, would be in violation or breach of or default under any such
contract) in any material respect. A true and complete copy of each
contract set forth on Schedule 3.9(a) has been provided to Buyer. Except as
set forth on Schedule 3.9(a), there are no material oral contracts with
respect to the Purchased Divisions.
(b) Except as set forth on Schedule 3.9(b), the execution,
delivery and performance by each Seller of this Agreement, and the
consummation of the transactions contemplated hereby, will not (A) result
in or give to any Person any right of termination, cancellation,
acceleration or modification in or with respect to, or (B) result in or
give to any Person any additional rights or entitlement to increased,
additional, accelerated or guaranteed payments under any contract required
to be disclosed pursuant to this Section 3.9 or any Assigned Contract.
3.10 Litigation. Except as set forth on Schedule 3.10, there are no
material claims and no actions, suits or proceedings pending or, to the
knowledge of any Seller, threatened, before or by any court, arbitrator,
mediator or federal, state, municipal or other governmental department,
commission, board, agency or instrumentality against any Seller relating to
the Purchased Assets or the operation of the Purchased Divisions. None of
the Sellers, or any of the Purchased Assets or the operation of the
Purchased Divisions, is subject to any order, writ, injunction, judgment or
decree of any court or other governmental agency or authority.
3.11 Compliance with Laws and Regulations. Except as set forth on
Schedule 3.11, each Seller is in compliance, in all material respects, with
all applicable foreign, federal, state and municipal statutes, ordinances,
regulations, orders, judgments and decrees, relating to the Purchased
Assets or the operation of the Purchased Divisions.
3.12 Environmental Matters. (a) Notwithstanding any other provision in
this Agreement, this Section 3.12 contains the exclusive representations of
Sellers concerning matters arising under or relating to Environmental Laws.
(b) Except as set forth on Schedule 3.12:
(i) Each Seller (with respect to the Purchased Divisions) and
each Facility is in material compliance with all, and each Seller
(with respect to the Purchased Divisions) has no material
liability under any, applicable Environmental Laws;
(ii) There are no present or past material Environmental
Conditions relating to any Seller (with respect to the Purchased
Divisions), any Facilities or, to the Sellers' knowledge, any
real property formerly owned or operated by the Sellers (with
respect to the Purchased Divisions) or the Purchased Divisions;
(iii) No Seller (with respect to the Purchased Divisions) is a
potentially responsible party with respect to any foreign,
federal, state, or local environmental clean-up site or with
respect to investigations, remediation or corrective actions
under any Environmental Law, except for sites, investigations,
remediation or corrective actions that would not reasonably be
expected to be material;
(iv) No Seller has received notice of any alleged, actual or
potential claim, demand, action, investigation or administrative
or judicial proceeding in connection with the Purchased Divisions
regarding (A) any Release or threatened Release of any Hazardous
Materials at any Site or other location, (B) any violation of or
non-compliance by any Seller with the conditions of any Permit
required under any Environmental Law or the provisions of any
Environmental Law with respect to the Purchased Divisions or any
Site, or (C) any actual or threatened injury or damage to any
Person, property, natural resource or the environment arising
from or relating to any Release, threatened Release, generation,
transportation, disposal or presence of any Hazardous Materials
with respect to the Purchased Divisions; in the case of each of
(A), (B) or (C) that would not reasonably be expected to be
material; and
(v) Each Seller has obtained all material permits, licenses and
approvals required by applicable Environmental Laws with respect
to the Purchased Assets or the Purchased Divisions.
(c) The Sellers have delivered or made available to Buyer copies
of all material environmental audits or other studies or reports in the
Sellers' possession concerning any Environmental Condition relating to the
Purchased Divisions or the Sites.
(d) None of the items disclosed in Schedule 3.12 (other than with
respect to on-site conditions at the Peoria Facility) are reasonably likely
to, individually or in the aggregate, constitute a Material Adverse Change.
3.13 Permits. Schedule 3.13 contains a list of the Permits which are
necessary to operate the Purchased Divisions as the Purchased Divisions are
currently operated. Except as set forth on Schedule 3.13, (a) each Seller
is in material compliance with all Permits necessary in connection with the
ownership, operation and maintenance of the Purchased Assets; and (b) no
proceeding to modify, suspend, revoke, withdraw, terminate or otherwise
limit any Permit is pending or, to the knowledge of any Seller, threatened.
3.14 Customers and Suppliers.
(a) Schedule 3.14(a) includes a list of the ten (10) largest
customers of each of the Purchased Divisions by dollar volume of sales made
or services provided during the last twelve (12) months. Except as set
forth on Schedule 3.14(a), (i) in the last twelve (12) months, no customer
listed on Schedule 3.14(a) has cancelled or otherwise terminated, or
threatened to cancel or otherwise terminate, its relationship with any
Seller; (ii) in the last twelve (12) months, no Seller has received written
notice that any customer listed on Schedule 3.14(a) intends to cancel or
otherwise adversely modify its relationship with any Seller; and (iii) the
Sellers are in compliance in all material respects with their obligations
to their customers.
(b) Schedule 3.14(b) includes a list of the ten (10) largest
suppliers of each of the Purchased Divisions by dollar volume of sales made
or services provided during the last twelve (12) months. Except as set
forth on Schedule 3.14(b), (i) in the last twelve (12) months, no supplier
listed on Schedule 3.14(b) has cancelled or otherwise terminated, or
threatened to cancel or otherwise terminate, its relationship with any
Seller; (ii) in the last twelve (12) months, no Seller has received written
notice that any supplier listed on Schedule 3.14(b) intends to cancel or
otherwise adversely modify its relationship with any Seller; and (iii) the
Sellers are in compliance in all material respects with their obligations
to their suppliers, vendors and other providers of services. Those
suppliers listed on Schedule 3.14(b) have not materially increased the
prices charged to the Sellers since December 31, 2001.
3.15 Labor Matters; Employee Benefits. (a) Except as set forth on
Schedule 3.15(a), (i) there is no labor strike, dispute, slowdown, stoppage
or lockout pending, or to the knowledge of any Seller, threatened against
or affecting the Purchased Divisions, (ii) there is no unfair labor
practice charge or complaint or any other claim against any Seller with
respect to the Purchased Divisions pending or, to the knowledge of any
Seller, threatened before the National Labor Relations Board or any similar
agency or union, (iii) to the Sellers' knowledge, there are no petitions
for election or demands for certification or recognition pending or
threatened, and (iv) none of the Sellers' employees has been improperly
characterized as an independent contractor or leased employee.
(b) WARN Act. The Sellers have given the notifications under the
Worker Adjustment and Retraining Notification Act (the "WARN Act") to each
employee located at the Sellers' Facilities located in Peoria, Illinois and
Bessemer, Alabama.
(c) Schedule 3.15(c) sets forth a true and complete list of all
material Plans and any Plan for which Buyer may have any liability by
reason of the transactions contemplated by this Agreement. Except as set
forth on Schedule 3.15(c), no Seller has any material unwritten
compensation arrangements which, if put into writing, would constitute a
Plan.
(d) The Company has delivered or made available to Buyer a true
and complete copy of:
(i) The Xxxx Industries, Inc. Pension Plan (the "Pension
Plan") and the Xxxx Industries, Inc. 401(k) Profit Sharing Plan (
the "Investment Plan" and together with the Pension Plan, the
"Retirement Plans") and any related funding agreements (e.g.,
trust agreements or insurance contracts), including all
amendments (and Schedule 3.15(d) includes a description of any
such amendment that is not in writing);
(ii) The current draft of the Summary Plan Description of
each Retirement Plan and Form 5500 filings including all
schedules for at least the last two years;
(iii) The most recent Internal Revenue Service determination
letter for each Retirement Plan, which determination letter,
except as set forth on Schedule 3.15(d), reflects all amendments
that have been made to the Retirement Plan; and
(iv) The most recent trustee's report for each of the
Retirement Plans showing the type of investment and value of each
trust asset.
(e) Except as set forth on Schedule 3.15(e), the Pension Plan has
not incurred any "accumulated funding deficiency", as defined in Section
302 of ERISA and Section 412 of the Code, whether or not waived, as of the
last day of the most recent fiscal year ended prior to the Closing Date,
and all contributions required to be made with respect thereto on or prior
to the Closing date have been timely made.
(f) Except as set forth in Schedule 3.15(f), no Plan is a
"multi-employer plan", as defined in Section 3(37) of ERISA, nor is any
Plan a plan described in Section 4063 of ERISA. Except as set forth in
Schedule 3.15(f), no withdrawal liability is owed, or as a result of this
transaction (and assuming that the provisions of ERISA Section 4202 are not
applicable), will be owed by any Seller to any multi-employer plan.
(g) With respect to the Pension Plan, no liability under Title IV
of ERISA has been incurred by any Seller or by any ERISA Affiliate, since
the effective date of ERISA that has not been satisfied in full, and no
condition exists that presents a risk to any Seller or any ERISA Affiliate
of incurring a liability under such Title other than liability for premiums
due the Pension Benefit Guaranty Corporation (which premiums have been paid
when due). Except as set forth in Schedule 3.15(g) with respect to the
Pension Plan which is subject to Title IV of ERISA, the present value of
accrued benefits under such plan, based upon the actuarial assumptions used
for funding purposes in the most recent actuarial report prepared by such
Plan's actuary with respect to such Plan did not exceed, as of its latest
valuation date, the then current value of the assets of such Plan allocable
to such accrued benefits.
(h) Except as set forth on Schedule 3.15(h), each Retirement Plan
complies currently, and has complied in the past, both in form and
operation, in all material respects, with all laws applicable to the
relevant time, including but not limited to ERISA and the Code. To the
knowledge of each Seller, each Retirement Plan has been operated in
accordance with its terms and applicable section of the Code and ERISA.
(i) No prohibited transaction has occurred with respect to any of
the Retirement Plans which is not exempt under Section 4975 of the Code and
Section 406 of ERISA, and no Seller has engaged in any transaction with
respect to any Retirement Plan which could subject it to either a material
civil penalty assessed pursuant to Section 409, 502(i) or 502(l) of ERISA,
or a material tax imposed pursuant to Section 4975 or 4976 of the Code.
(j) Except as to the Plans set forth on Schedule 3.15(j) (as
those plans shall be amended prior to Closing, the "Retiree Health Plans"),
no Seller maintains any Plan that provides (or will provide) medical or
death benefits to one or more former employees (including retirees) beyond
their retirement or other termination of service, other than benefits that
are required to be provided pursuant to Section 4980B of the Code or state
law continuation coverage or conversion rights.
(k) Except as set forth on Schedule 3.15(k), there are no
proceedings or lawsuits, and to the knowledge of any Seller, there are no
investigations, either currently in progress or expected to be instituted
in the future, relating to any Retirement Plan or any Plan set forth on
Schedule 3.15(c), by any administrative agency, whether local, state or
federal.
(l) Except as set forth on Schedule 3.15(l), there are no pending
or, to the knowledge of any Seller, threatened lawsuits or other claims
(other than routine claims for benefits under a Plan) against or involving
(i) any Retirement Plan or any Plan set forth on Schedule 3.15(c) or (ii)
any fiduciary of such Plan (within the meaning of Section 3(21)(A) of
ERISA) brought on behalf of any participant, beneficiary or fiduciary
thereunder, nor to the knowledge of any Seller is there any reasonable
basis for any such claim.
(m) Except as set forth on Schedule 3.15(m), no Seller has any
intention or commitment, whether legally binding or not to create any
additional Plan that should be set forth on Schedule 3.15(c), or to modify
or change any existing Plan set forth on Schedule 3.15(c). The benefits
under all Plans set forth on Schedule 3.15(c) are as represented, and
except in the ordinary course of business and consistent with past
practices or as required by law, have not been, and will not be increased
subsequent to the date documents are provided to Buyer.
(n) Except as set forth on Schedule 3.15(n), none of the Plans
set forth on Schedule 3.15(c) will entitle any current or former employee
to any benefits or other compensation that become payable solely as a
result of the consummation of the transaction contemplated hereby.
(o) Neither of the Retirement Plans is subject to the tax on
unrelated business taxable income or unrelated debt-financed income under
Section 511 of the Code.
(p) Except as set forth on Schedule 3.15(p), with respect to any
Plan set forth on Schedule 3.15(c) all reports, notices and other
disclosure relating to Plans required to be filed with, or furnished to,
governmental entities, plan participants or plan beneficiaries have been
timely filed and furnished in accordance with applicable law.
(q) Except as set forth on Schedule 3.15(q), to the Knowledge of
Seller no Retirement Plan has any interest in any annuity contract or other
investment or insurance contract issued by an insurance company that is the
subject of bankruptcy, conservatorship, rehabilitation or similar
proceeding.
3.16 Intellectual Property. (a) Schedule 3.16(a) sets forth a true and
complete list of all Purchased Intellectual Property which are
applications, registrations or which are unregistered material Purchased
Intellectual Property, specifying, if applicable, the registration or
application numbers for each such item of Purchased Intellectual Property.
Other than the Purchased Intellectual Property, no Seller owns or uses any
other item of Intellectual Property which is necessary to the Purchased
Divisions as currently conducted. The Sellers have taken reasonable steps
to protect the material Purchased Intellectual Property.
(b) Each Seller owns or has adequate right to use, free and clear
of all Encumbrances, its respective Purchased Intellectual Property. Except
as set forth on Schedule 3.16(b), no person has a right to receive from any
Seller a royalty or similar payment in respect of any Purchased
Intellectual Property.
(c) The use of the Purchased Intellectual Property in the
business of the Purchased Divisions as currently conducted does not
infringe upon any third party Intellectual Property or proprietary rights
of any other Person. To the Sellers' knowledge, no third party is
infringing upon the Purchased Intellectual Property.
(d) Except as set forth on Schedule 3.16(d), there is no
outstanding claim or suit brought by any Seller for infringement by any
other Person of any of the Purchased Intellectual Property.
3.17 Purchased Inventory. All Product Inventory maintained by the
Sellers relating to the Purchased Divisions is (i) of good and merchantable
quality (except for obsolete or discontinued items of Product Inventory
which have been adequately reserved for in accordance with GAAP,
consistently applied) and (ii) adequate for the conduct of the business of
the Purchased Divisions in the ordinary course as currently conducted. All
Product Inventory relating to the Purchased Divisions is recorded on the
books of the Sellers at the lower of cost or market value determined in
accordance with GAAP, consistently applied. All Product Inventory related
to the Purchased Divisions is located at the Purchased Real Property or a
location which is the subject of an Assigned Real Property Lease. Purchase
commitments for raw materials and parts are not in excess of normal
requirements and were not made at a price materially in excess of market
prices existing on the date such commitments were made.
3.18 Affiliate Transactions. Other than (i) transactions among the
Purchased Divisions or (ii) transactions between any Seller and any
director or executive officer of such Seller not in excess of $25,000,
Schedule 3.18 sets forth the parties to and the date, nature and amount of
each transaction involving the transfer of any cash, property, services or
rights to or from any Seller from, to or for the direct or indirect benefit
of any Affiliate or former Affiliate of any Seller ("Affiliate
Transactions") since January 1, 2002. Except as set forth on Schedule 3.18,
no officer, director, employee, stockholder or Affiliate or any entity in
which any such Person or individual is an officer, director or the owner of
fifteen percent (15%) or more of the beneficial ownership interests, is a
party to any agreement, contract, commitment or transaction with any Seller
or has any interests in any property used by any Seller. Except as set
forth on Schedule 3.18, each Affiliate Transaction was effected on terms
equivalent to those which would have been established by an arms-length
negotiation with an unaffiliated third party. Except as set forth on
Schedule 3.18, no Seller nor any of its Affiliates has any direct or
indirect interest in any competitor.
3.19 Broker's or Finder's Fees. No agent, broker, Person or firm
acting on behalf of any Seller is, or will be, entitled to any commission
or broker's or finder's fees from any of the parties hereto in connection
with any of the transactions contemplated by this Agreement, except for
Xxxxx X. Xxxxxxx Company Limited, whose fees shall be the responsibility of
the Sellers.
3.20 Insurance. There is in full force and effect one or more policies
of insurance issued by insurers of recognized national standing insuring
the properties and business of the Sellers against such losses and risks
and in such amounts as are usual and customary in the Sellers' industry.
Schedule 3.20 identifies the policies of insurance currently maintained by,
or on behalf of, the Sellers, its business and properties, setting forth
the name of the insurer, the holder of each such policy, the nature of
coverage, the amount of such coverage, the expiration dates thereof and
information concerning any claim in excess of $25,000 asserted thereunder
since January 1, 2000. Neither the Sellers nor any other insured named on
Schedule 3.20 is in material default with respect to its obligations under
any of such outstanding insurance policies and all premiums with respect
thereto are current. Neither the Sellers nor, to the Sellers' knowledge,
any other insured named on Schedule 3.20 has failed to give any notice or
to present any material claim under any such policy in a due and timely
fashion. Such policies are in full force and effect on the date hereof and
will continue to be kept in full force and effect on substantially
equivalent terms until the consummation of the transactions contemplated
hereby and in the Transaction Documents, except to the extent policies
expire and are replaced in the ordinary course of business with policies on
substantially equivalent terms and except with respect to those policies
listed on Schedule 3.20, marked as such, which shall continue to be kept in
full force and effect from the date hereof on identical terms through the
consummation of the transactions contemplated by this Agreement. All
premiums due under the policies identified on Schedule 3.20 have been paid
and neither the Sellers nor, to the Sellers' knowledge, any other such
insured has been issued or has received any notice of cancellation,
material modification or termination in respect of any such policy or is in
default thereunder. Neither the Sellers nor, to the Sellers' knowledge, any
other such insured has been issued or has received notice that any insurer
under any policy referred to on Schedule 3.20 is denying liability with
respect to a claim thereunder or defending under a reservation of rights
clause.
3.21 Accounts Receivable. A complete and correct list of all accounts
receivable of the Sellers as of October 31, 2002 (the "Accounts
Receivable") has been delivered to Buyer prior to the date hereof, and sets
forth the aging of such Accounts Receivable, a complete and correct copy of
which is attached hereto as Schedule 3.21. The Accounts Receivable and all
accounts receivable created after October 31, 2002 represent bona fide
sales actually made or services actually performed on or prior to such date
in the ordinary course of business of the Sellers. Except as set forth in
Schedule 3.21, there is no asserted contest, claim or right of set-off
contained in any oral or written agreement with any account debtor relating
to the amount or validity of any Account Receivable, or any other account
receivable created after October 31, 2002. The Accounts Receivable and all
accounts receivable created after October 31, 2002 are valid.
3.22 Products; Product Warranty and Liability.
(a) Schedule 3.22(a) sets forth, in general terms, a complete and
correct list of each product and service being sold or otherwise provided
in the conduct of the Purchased Divisions as of the date hereof and as of
Closing. Schedule 3.22(a) contains a complete and current list of all
jurisdictions in which such licenses have been applied for or obtained by
any Seller or any other Person with respect to the Purchased Divisions, in
each case identifying the name of the Person that applied for or holds the
same, and the expiration date thereof.
(b) Except as set forth on Schedule 3.22(b), each product or
service manufactured, fabricated or provided by the Sellers and relating to
the Purchased Divisions has been manufactured, fabricated or provided in
compliance with all applicable laws and all applicable contractual
commitments and warranties and each product or service has been
distributed, sold and provided in conformity with all applicable
contractual commitments and warranties, and, to the Sellers' knowledge,
there is no reasonable basis for any present or future action, suit or
other proceeding giving rise, individually or in the aggregate, to any
liability or other obligation with respect to such products or services,
including for the replacement thereof or for damages in connection
therewith or resulting therefrom. Except as set forth on Schedule 3.22(b),
no Seller has received any notice that any action, suit or other proceeding
has been made alleging that any product manufactured or sold or service
rendered by the Seller and relating to the Purchased Divisions is or was
defective in any way.
(c) Schedule 3.22(c) sets forth complete and correct lists of (i)
all warranties applicable to products or services sold or otherwise
provided since September 30, 1997 and relating to the Purchased Divisions,
(ii) all recalls with respect to products during the past five years
relating to the Purchased Divisions and the dates, if any, such recalls
were closed, and (iii) all claims with respect to products or services that
are open as of the date hereof relating to the Purchased Divisions. Except
as set forth on Schedule 3.22(c), to the Sellers' knowledge, there is no
reasonable basis for any present or future product recall or product claims
with respect to any products that could reasonably be expected to give rise
to any liability or other obligation in excess of $50,000.
3.23 Certain Payments. No Seller, nor any director, officer, agent,
employee or other Person acting on behalf of any Seller, has: (i) paid or
authorized any commission, bonus, "finders fee," referral fee or other
payment or inducement relating to the contracts, orders or business of the
Purchased Divisions which has not been properly recorded on the Sellers'
books of account; (ii) established or maintained any unrecorded account or
funds for such purposes; or (iii) received any payment, gift, or other
consideration from any supplier, vendor or customer relating to business
with the Purchased Divisions.
3.24 Disclosure. No disclosure made by any Seller in this Agreement,
any Schedule hereto, any Transaction Document, or any information, document
or certificate furnished or to be furnished by or on behalf of any Seller
to Buyer or its Affiliates, agents and representatives in connection with
this Agreement and the Transaction Documents or the transactions
contemplated hereby or thereby contains or will contain any untrue
statement of a material fact, or omits or will omit to state a material
fact necessary to make the statements contained herein or therein, in light
of the circumstances in which they are made, not misleading. To the
Sellers' knowledge, there is no fact that has not been disclosed in this
Agreement or the Transaction Documents which has caused, individually or in
the aggregate, a Material Adverse Change.
3.25 No Additional Representations. NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED IN THIS ARTICLE III OR ANY OTHER PROVISION OF THIS
AGREEMENT, IT IS THE EXPLICIT INTENT OF EACH PARTY HERETO THAT EACH SELLER
IS MAKING NO REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED,
BEYOND THOSE EXPRESSLY GIVEN IN THIS ARTICLE III, INCLUDING, BUT NOT
LIMITED TO, ANY IMPLIED WARRANTY OR REPRESENTATION AS TO THE CONDITION,
MERCHANTABILITY OR SUITABILITY OF ANY OF THE PROPERTIES OR ASSETS OF ANY
SELLER. ANY COST ESTIMATES, PROJECTIONS OR OTHER PREDICTIONS CONTAINED OR
REFERRED TO IN THE CONFIDENTIAL INFORMATION MEMORANDUM AND THE SCHEDULES
HERETO OR OTHERWISE PROVIDED ARE NOT, AND SHALL NOT BE DEEMED TO BE,
REPRESENTATIONS OR WARRANTIES OF ANY SELLER.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants, as of the date hereof and as of
the Closing Date, to each of the Sellers as follows:
4.1 Organization. Buyer is a limited liability company duly organized,
validly existing, and in good standing under the laws of the State of
Delaware with all requisite corporate power and authority to carry on its
business, to own or lease the Purchased Assets and to execute and deliver
this Agreement and the other Transaction Documents to be executed and
delivered by Buyer as contemplated thereby and to perform its obligations
hereunder and thereunder.
4.2 Authorization. The execution, delivery and performance of this
Agreement and the other Transaction Documents to be executed and delivered
by Buyer as contemplated hereby, and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized by the Board of
Directors of Buyer and no other corporate or shareholder action on the part
of Buyer or its shareholders is necessary to authorize the execution,
delivery and performance of this Agreement and the other Transaction
Documents to be executed and delivered by Buyer as contemplated hereby and
the consummation by Buyer of the transactions contemplated hereby and
thereby. This Agreement and the other Transaction Documents to be executed
and delivered by Buyer as contemplated hereby when delivered in accordance
with the terms hereof shall be valid and binding obligations of Buyer
enforceable against Buyer in accordance with their terms, except to the
extent that their enforceability may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting the
enforcement of creditors' rights generally and to general equitable
principles.
4.3 Consents and Approval; No Violations. Except as set forth on
Schedule 4.3, the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby will not, with or
without the giving of due notice or the lapse of time or both: (a) violate,
conflict with, or result in a breach or default under any provision of the
certificate of incorporation or by-laws of Buyer; (b) violate in any
material respect any statute or ordinance or any order, judgment or decree
of any court or any governmental or regulatory body, agency or authority
applicable to Buyer or its subsidiaries or by which their respective
properties or assets may be bound; (c) require any filing by Buyer, or
require Buyer to obtain any permit, consent or approval of, or require
Buyer to give any notice to, any governmental or regulatory body, agency or
authority or any other Person; or (d) result in a material violation or
material breach by Buyer of, constitute (with or without due notice or
lapse of time or both) a material default by Buyer (or give rise to any
right of termination, cancellation, payment or acceleration) under, or
result in the creation of any Encumbrance upon Buyer or its subsidiaries or
any of their respective properties or assets under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
franchise, permit, agreement, lease, franchise agreement or other
instrument or obligation, to which Buyer or any of its subsidiaries is a
party, or by which their respective properties or assets may be bound.
4.4 Adequate Funds. Buyer has all funds necessary to pay the Purchase
Price in accordance with Section 2.5 hereof.
4.5 Brokers. No agent, broker, Person or firm acting on behalf of
Buyer is, or will be, entitled to any commission or broker's or finder's
fees from any of the parties hereto in connection with any of the
transactions contemplated by this Agreement.
ARTICLE V
TAX MATTERS
5.1 Transfer Taxes. All stamp, transfer, documentary, sales, use,
registration, and other such Taxes and fees (including any penalties and
interest and all real property Transfer Taxes) incurred in connection with
this Agreement and the transactions contemplated hereby (collectively,
"Transfer Taxes") shall be paid 50% by the Sellers and 50% by Buyer. The
Sellers and Buyer shall cooperate to file on a timely basis all necessary
Tax returns, reports, forms, and other documentation with respect to any
Transfer Taxes and to timely pay such Transfer Taxes.
5.2 VAT Matters. The Sellers shall, notwithstanding any other
provision of this Agreement, as soon as reasonably practicable following
the date hereof, deliver VAT documents related to the Purchased Divisions
to Buyer. Notwithstanding any provisions of this Agreement, where Buyer can
claim a credit for any VAT, such VAT shall be borne exclusively by Buyer,
and shall not be subject to reimbursement or sharing under this Agreement.
In all other circumstances, the VAT shall be borne equally by Buyer and the
Sellers. The Sellers and Buyer shall use commercially reasonable efforts
(including, for the avoidance of doubt, the making of an election or
application in respect of VAT to any Tax Authority) to secure that the sale
of the Purchased Divisions is treated as a transfer of a going concern but
neither a supply of goods nor a supply of services solely for the purposes
of the laws governing VAT in the relevant state. Buyer represents and
warrants, as of the date hereof, that it is or will become, and, as of the
Closing, is a taxable person for VAT purposes in all relevant states and
agrees that it will use the Purchased Assets in carrying on the same kind
of business, whether or not as part of its existing business, as the
Sellers.
5.3 Treatment of Payments. Buyer and the Sellers agree to treat any
payments under Sections 2.7 and 2.8 and any indemnity payments under
Article IX as adjustments to the Purchase Price solely for all Tax
purposes.
ARTICLE VI
OTHER AGREEMENTS
6.1 Conduct of Purchased Divisions. During the period from the date of
this Agreement to the Closing Date, the Sellers agree to conduct the
Purchased Divisions only in the ordinary course consistent with past
practice. Without limiting the generality of the foregoing, the Sellers
will:
(a) use commercially reasonable best efforts to (i) preserve
intact the present business organization and reputation of the Purchased
Divisions, (ii) maintain the Purchased Assets in good working order and
condition, ordinary wear and tear excepted, (iii) maintain the good will of
customers, suppliers, lenders and other Persons from whom the Sellers
purchase or to whom the Sellers sell goods or provide services or with whom
the Sellers otherwise have significant business relationships in connection
with the Purchased Divisions, (iv) continue sales, marketing and
promotional activities relating to the Purchased Divisions consistent with
past practice and (v) continue to implement pricing policies relating to
the Purchased Divisions consistent with past practice;
(b) (i) cause the Books and Records to be maintained in the
usual, regular and ordinary manner, (ii) except to the extent required by
applicable Law or GAAP, not permit any material change in any accounting,
financial reporting or Tax practice or policy of the Sellers that would
adversely affect the Purchased Divisions, the Purchased Assets or the
Assumed Liabilities, and (iii) not permit any material change in any
investment, inventory, credit or allowance practice or policy of the
Sellers that would adversely affect the Purchased Divisions, the Purchased
Assets or the Assumed Liabilities;
(c) comply, in all material respects, with all Laws applicable to
the Purchased Divisions and promptly following receipt thereof give to
Buyer copies of any notice received from any governmental or regulatory
authority or other Person alleging any material violation of any such Law;
and
(d) acquire or commit to acquire Inventory for sale which is of a
quality and quantity usable in the ordinary course of the business and
consistent with past practice and normal purchasing patterns;
(e) not take any action or permit the occurrence of any action
described in Section 3.4(d) without the prior written consent of Buyer.
6.2 Review of the Company. Buyer may, prior to the Closing Date,
through its representatives, review the properties, books and records of
the Sellers relating to the Purchased Assets and the Purchased Divisions to
familiarize themselves with the Purchased Assets and the Purchased
Divisions. The Sellers shall provide Buyer and its representatives, upon
receiving reasonable notice from Buyer, reasonable access to the premises
and to such books and records during normal working hours and to furnish
Buyer with such financial and operating data and other information with
respect to the Purchased Assets and the Purchased Divisions as Buyer shall
from time to time reasonably request.
6.3 Confidentiality. Information obtained by Buyer or Guarantor
pursuant to Section 6.2 shall be subject to the provisions of the
Confidentiality Agreement (the "Confidentiality Agreement"), dated July 1,
2002, by and among the Company and Guarantor, and shall be treated as
"Confidential Information" as provided in the Confidentiality Agreement.
Buyer hereby agrees to be bound by the terms of and to comply with the
Confidentiality Agreement. In the event of termination of this Agreement
for any reason, Buyer and Guarantor shall promptly return to the Sellers
all Confidential Information obtained from the Sellers and any copies made
of, or reports or analyses based on, such Confidential Information.
6.4 Cooperation. Each of the parties agrees to use its reasonable best
efforts to take, or cause to be taken, all action to do, or cause to be
done, and to assist and cooperate with the other party hereto in doing, all
things necessary, proper or advisable to satisfy the conditions to Closing
set forth in Article VII hereof.
6.5 Performance Guarantee. Guarantor hereby irrevocably and
unconditionally guarantees to the Sellers the due and punctual observance
and performance of each and every obligation of Buyer contained in this
Agreement, including, without limitation, the payment of the Purchase
Price, all upon the terms and subject to the conditions set forth herein.
Guarantor shall have no further obligations relating to or arising out of
this Agreement following the Closing.
6.6 Use of Trademark and Logo. (a) The Sellers shall remove the "XXXX"
Trademark and Logo from all Excluded Assets and cease use of such Trademark
and Logo as promptly as commercially practicable after the Closing Date;
provided that for a period of six (6) months following the Closing Date,
the Sellers and all other Subsidiaries of the Company shall have the right
to use existing letterhead, business cards and similar materials containing
the "XXXX" Trademark and Logo for purposes of winding-down and liquidating
the remaining operations of the Sellers and the other Subsidiaries of the
Company. The Sellers and all other Subsidiaries of the Company shall have
the right to use existing marketing and sales material with appropriate
stickering a period of six (6) months after the Closing Date for purposes
of winding-down and liquidating the remaining operations of the Sellers and
the other Subsidiaries of the Company so long as the stickering is approved
in advance by Buyer, such approval not to be unreasonably withheld,
conditioned or delayed. The Sellers shall be responsible for all costs and
expenses incurred in connection with the foregoing.
(b) Buyer grants to the Sellers and each of the other
Subsidiaries of the Company, upon the Closing, a non-transferable
limited-use license to use the "XXXX" Trademark and Logo as is commercially
necessary while the Sellers comply with their obligations pursuant to
Section 6.6(a).
6.7 Purchased Intellectual Property. Subject to Sections 6.6 and 6.13,
the Sellers agree that commencing upon the Closing Date, the Sellers shall
cease, and shall cause their Affiliates to cease, use of the Purchased
Intellectual Property.
6.8 Bulk Transfer Laws. Buyer and the Sellers hereby waive compliance
with the provisions of any so-called bulk transfer laws of any jurisdiction
("Bulk Sales Law") in connection with the transactions contemplated by this
Agreement.
6.9 Employment of the Sellers' Employees. Nothing expressed or implied
in this Agreement shall obligate Buyer to offer employment to any employee
of the Sellers or their Affiliates as of the Closing Date or provide
continued employment or any level of compensation or benefits to any such
employee for any period of time following the Closing Date. Each employee
of Sellers who is employed by Buyer after the Closing is herein referred to
as an "Affected Employee."
6.10 Continuing Operations.
(a) For a period of six (6) months following the Closing Date,
Buyer shall allocate to the Company and provide the Company with access to
a portion of the office and administrative space of the Facilities located
at Peoria, Illinois to the extent necessary to permit up to ten (10)
employees of the Company to operate, wind-down or liquidate the Other
Excluded Assets or the Sellers or to carry-on other administrative
functions of the Sellers; provided that Buyer shall have a right to bar
such employees of the Company from access to such Facilities (or any
portion thereof) if, in the reasonable good faith judgment of Buyer, Buyer
has determined that such access causes or is reasonably likely to cause
unreasonable disruption to the conduct of the Purchased Divisions or the
work environment at such Facilities.
(b) For a period of six (6) months following the Closing Date,
Buyer shall cooperate with the Sellers to enable the Sellers to use such
portions of the Furnishings and Equipment included in the Purchased Assets,
including, without limitation, office equipment, as is necessary for the
Sellers to operate, wind-down or liquidate the Other Excluded Assets or the
Sellers or to carry-on other administrative functions of the Sellers.
(c) For a period of six (6) months following the Closing Date,
Buyer shall make available those former employees of the Sellers or their
Affiliates employed by Buyer, and shall permit such employees who have
until the date hereof primarily performed administrative functions for the
Sellers to perform a de minimus amount of such functions for the Sellers as
is necessary for the Sellers to operate, wind-down or liquidate the Other
Excluded Assets or the Sellers or to carry-on other administrative
functions of the Sellers; provided that Buyer shall have a right to
restrict the performance of such services if, in the reasonable good faith
judgment of Buyer, Buyer has determined that such services cause or are
reasonably likely to cause unreasonable disruption to the conduct of the
Purchased Divisions.
6.11 Other Employee Matters.
(a) Collective Bargaining Agreements. Buyer will adopt and assume
at and as of the Closing each collective bargaining agreement (as modified
as of the Closing Date) set forth on Schedule 6.11(a).
(b) Pension Plan. As of the Closing Date, Buyer shall adopt and
become the successor sponsor of the Pension Plan. As of the Closing Date,
Buyer shall assume all of Sellers' liabilities and obligations and be
entitled to all of Sellers' rights with respect to the Pension Plan and the
related trust and assets therein, including, without limitation, all
obligations to make contributions required to be made to the Pension Plan
after the Closing Date. Buyer shall execute such documents as may be
reasonably requested by Sellers to effect such adoption and assumption.
(c) 401(k) Plan. (i) As soon as practicable after the Closing
Date, Buyer shall establish or designate, and maintain, a defined
contribution plan (the "Buyer's Investment Plan") to provide benefits to
the Affected Employees who, on the Closing Date, are participants
("Investment Plan Participants") in the Investment Plan. The Buyer's
Investment Plan shall be qualified under Sections 401(a) and 401(k) of the
Code. Within 60 days after the Closing Date, Buyer shall provide Sellers
with documentation satisfactory to Sellers as to the qualified status of
Buyer's Investment Plan, which may take the form of a determination letter
issued by the Internal Revenue Service or an opinion of counsel that the
Buyer's Investment Plan and related trust satisfy the requirements for
qualification under Sections 401(a) and 401(k) of the Code. As soon as
practicable after receipt of such documentation by Sellers, Sellers shall
cause the trustee of the Investment Plan to transfer to the trust forming a
part of the Buyer's Investment Plan cash (or with respect to participant
loans granted prior to the Closing Date, if any, such loans and any
promissory notes or other documents evidencing such loans) in an amount
equal to the account balances of Investment Plan Participants as of the
date preceding the transfer date (the "Valuation Date").
6.12 No Solicitation.
(a) The Sellers shall, and shall cause their respective
directors, officers and employees to, cease discussions or negotiations, if
any, with any parties other than Buyer or Guarantor conducted prior to the
date hereof with respect to an Acquisition Proposal. The Sellers shall not
(i) solicit or initiate the making of any proposal that constitutes an
Acquisition Proposal or (ii) participate in any discussions or negotiations
regarding an Acquisition Proposal; provided, however, that if the Board of
Directors determines in good faith, after consultation with its outside
counsel and its financial advisors, that failure to do so would be highly
likely to constitute a breach of its fiduciary duties to the Company's
stockholders or creditors under applicable law, the Company, subject to
compliance with Section 6.12(b), may (x) respond to an Acquisition
Proposal, (y) furnish to the Person making such Acquisition Proposal
non-public information with respect to any Seller pursuant to a
confidentiality agreement, and (z) participate in negotiations regarding
such Acquisition Proposal; provided, however, that the Company shall have
complied with its obligations under this Section 6.12.
(b) The Company shall promptly advise Buyer of any Acquisition
Proposal and the material terms and conditions of such Acquisition
Proposal. The Sellers shall, to the extent reasonably practicable, keep
Buyer informed on the status and details (including amendments or proposed
amendments) of any such Acquisition Proposal.
(c) Nothing contained in this Section 6.12 shall prohibit the
Company from making any disclosure to the Company's stockholders or
creditors required under any applicable law.
6.13 Amendment to Certificate of Incorporation. Within five (5)
calendar days following the Closing Date, each of the Company, Xxxx
Construction and Xxxx Products shall file with the Secretary of State of
the State of Delaware, Texas and Indiana, respectively, an amendment to its
certificate of incorporation or other organizational document changing its
corporate name to a corporate name that does not include the corporate name
"XXXX." Within ten (10) calendar days following the Closing Date, each of
Xxxx Mexico and Xxxx Services shall make all necessary filings an obtain
all necessary Permits, including without limitation, Permits from the
Ministry of Foreign Affairs of Mexico, if applicable, to change its name to
a corporate name that does not include the corporate name "XXXX." Subject
to Section 6.6, within ten (10) calendar days following the Closing Date,
the Company shall take all actions, including, without limitation, making
all such filings, as is necessary to change the corporate name of any other
direct or indirect wholly-owned subsidiary that contains the corporate name
"XXXX" in its corporate name to a corporate name that does not contain the
corporate name "XXXX".
6.14 Trading Symbol. Within thirty (30) calendar days from the Closing
Date, the Company shall take all actions, including, without limitation,
making all such filings, as is necessary to change the symbol for trading
of any securities of the Company traded on the New York Stock Exchange or
another national stock exchange or quoted on the Nasdaq Stock Market,
Inc.'s National Market System or SmallCap Market System to a trading symbol
other than "XXXX".
6.15 Title Matters. Within five (5) Business Days of the date hereof,
each applicable Seller shall deliver to Buyer (i) copies of any existing
title insurance policies in the possession of such Seller with respect to
each of the Purchased Real Properties and (ii) copies of any surveys of any
of the Purchased Real Properties in the possession of such Seller. As
promptly as practicable after the execution of this Agreement, but in no
event later than seven (7) Business Days after the date hereof, the Sellers
shall obtain for and deliver to Buyer (i) a commitment for title insurance
for each Purchased Real Property, ALTA 1970 Form "B" (or the equivalent
which is reasonably satisfactory to Buyer), issued by a title company or
companies reasonably selected by Buyer (the "Title Company"), including all
schedules and exhibits thereto, together with true, correct and legible
copies of all instruments giving rise to any exceptions to title to each of
the Purchased Real Properties (collectively, the "Title Commitments") and
(ii) a current ALTA survey of each Purchased Real Property (the "Surveys")
certified to Buyer and the Title Company, in form reasonably acceptable to
Buyer. The cost of the Title Commitments and the Surveys shall be borne
solely by the Sellers. Within ten (10) Business Days after Buyer's receipt
of the last of the Title Commitment and Survey, Buyer shall give notice to
Sellers, specifying all matters shown on the Title Commitment or disclosed
by the Survey which are reasonably disapproved by Buyer (any such item a
"Disapproved Exception"). Buyer shall be deemed to have accepted any
exception that is not a Disapproved Exception. The Sellers shall use their
reasonable best efforts to cure or remove any Disapproved Exception on or
before the Closing; provided, however, that the Sellers' inability to cure
or remove any Disapproved Execption despite their reasonable best efforts
shall not preclude Buyer from asserting the failure of a condition to
Buyer's obligation to consummate the transactions contemplated hereby.
Notwithstanding the foregoing, Sellers shall be obligated to remove any
monetary liens or liens securing encumbrances of liquidated amounts. With
respect to each Purchased Real Property, no later than the Closing, the
Sellers shall cause to be delivered to Buyer an extended coverage policy of
title insurance (the "Title Policies"), ALTA 1970 Form "B" (or the
equivalent that is reasonably satisfactory to Buyer), insuring that Buyer
owns fee title to each Purchased Real Property subject only to the
permitted exceptions and other exceptions reasonably approved by Buyer. The
cost of such Title Policies shall be borne solely by the Sellers.
6.16 Performance Bonds. Sellers shall maintain that certain
performance bond relating to the contract with the Commonwealth of
Pennsylvania dated November 23, 1999, as amended (the "Pennsylvania
Performance Bond") in full force and effect following the Closing Date. At
any time after April 30, 2003, in connection with the liquidation of
Sellers and winding up of its operations, Seller shall have the right to
terminate the Pennsylvania Performance Bond on thirty (30) days' prior
written notice to Buyer (i.e., effective no earlier than May 30, 2003).
Seller shall maintain in effect all other performance bonds, surety bonds
and similar instruments (the "Other Performance Bonds") related to the
Purchased Divisions outstanding as of the date of this Agreement at least
through the date that is ninety (90) days after the Closing Date; provided,
however, that if any such Other Performance Bond is secured by a letter of
credit that cannot be maintained by Seller following the Closing Date,
Buyer shall post a letter of credit or other collateral to support such
Other Performance Bond up to an aggregate amount of $250,000 in such credit
support and Sellers shall provide any additional collateral (by means of
cash or other security) in excess of $250,000 required to maintain such
Other Performance Bond through the expiration of such ninety (90) day
period.
6.17 Updates to Schedules. On or before 8:00 p.m. (eastern standard
time) on December 4, 2002, the Sellers may amend or modify the disclosure
schedules to this Agreement; thereafter the schedules may not be amended or
modified.
ARTICLE VII
CONDITIONS TO CLOSING
7.1 Conditions to Obligations of Each Party; No Injunctions, etc. The
obligations of the parties to consummate the transactions contemplated
hereby shall be subject to the fulfillment on or prior to the Closing Date
of the condition that the consummation of the transactions contemplated by
this Agreement and the other Transaction Documents shall not have been
restrained, enjoined or otherwise prohibited by any applicable Law,
including any order, injunction, decree or judgment of any court or other
governmental or regulatory body, agency or authority and no proceeding
brought by any governmental or regulatory authority with respect to the
application of any such applicable Law to such effect shall be pending.
7.2 Conditions to Buyer's Obligations. The purchase of the Purchased
Assets and the assumption of the Assumed Liabilities by Buyer on the
Closing Date is conditioned upon the satisfaction or waiver, at or prior to
the Closing, of the following condition:
(a) Accuracy of Representations and Warranties. All of the
representations and warranties of the Sellers contained in this Agreement
and each of the other Transaction Documents (i) that are qualified as to
materiality shall be true and correct as of date hereof and (except with
respect to Section 3.4(d)) the Closing, and (ii) that are not so qualified
shall be true and correct in all material respects as of date hereof and
(except with respect to Section 3.4(d)) the Closing, and the Sellers shall
have delivered a certificate to Buyer, dated as of the Closing Date, to
such effect.
(b) Performance of Agreements. All of the agreements of the
Sellers required to be performed at or prior to the Closing pursuant to the
terms hereof shall have been duly performed in all material respects and
each Seller shall have delivered a certificate to Buyer, dated the Closing
Date, to such effect.
(c) Stockholder Approval. The stockholders of the Company and of
any of the Subsidiary Sellers shall have approved the transactions
contemplated hereby in compliance with all applicable securities laws,
including, without limitation, the approval of the Company's stockholders
pursuant to Sections 242 and 271 of the DGCL.
(d) Consents. The consents, approvals and authorizations (or in
lieu thereof waivers) set forth on Schedule 7.2(d) shall have been obtained
and shall be in full force and effect.
(e) Deliveries. The Sellers shall have delivered to Buyer the
following:
(i) a duly executed Xxxx of Sale and Assignment Agreement,
which shall be in full force and effect and under which there
shall exist no breach of, or default under, the Assignment
Agreement;
(ii) a duly executed Assumption Agreement, which shall be in
full force and effect and under which there shall exist no
breach of, or default under, the Assumption Agreement;
(iii) all trademark assignments, copyright assignments and
patent assignments relating to Trademarks, copyrights or
patents which are Purchased Intellectual Property;
(iv) a copy of each Seller's certificate of incorporation or
other organizational document certified by the Secretary of
State of the jurisdiction of its incorporation or
organization or, in the case of Xxxx Mexico and Xxxx
Services, a comparable Mexican government official;
(v) a certificate of good standing of each Seller issued not
earlier than ten (10) Business Days prior to the Closing Date
by the Secretary of State of the jurisdiction of its
incorporation or organization or, in the case of Xxxx Mexico
and Xxxx Services, a comparable Mexican government official;
(vi) a copy of each Sellers' by-laws or, in the case of Xxxx
Mexico and Xxxx Services, a copy of such Seller's estatutos
socials;
(vii) each Seller that transfers Purchased Real Property
which is a United States real property interest (as defined
in Section 897 of the Code) shall have furnished to Buyer on
or before the Closing Date a Non-foreign Person affidavit as
required by Section 1445 of the Code; and
(viii) with respect to all Purchased Real Property, (i) a
warranty deed with respect to all Purchased Real Property
with covenants against grantor's acts, each naming Buyer as
grantee and duly executed and acknowledged with all
documentary, revenue, transfer and tax stamps or receipts in
the required amounts affixed thereto at Seller's expense
together with all transfer tax forms or affidavits
accompanying same and (ii) the Title Policies.
(f) Outstanding Encumbrances. The Sellers shall have delivered to
Buyer at the Closing all documents, certificates and agreements necessary
to transfer to Buyer title to the Purchased Assets, free and clear of all
Encumbrances thereon (other than Permitted Encumbrances, but not including
Encumbrances arising out of the Credit Documents).
(g) Indebtedness. Except as set forth in Section 6.16, all
Indebtedness of the Sellers with respect to the Purchased Divisions shall
have been paid off with evidence thereof reasonably satisfactory to Buyer.
(h) Material Adverse Change. Since the date hereof, there shall
not have occurred a Material Adverse Change.
7.3 Conditions to the Sellers' Obligations. The sale of the Purchased
Assets and assumption of the Assumed Liabilities by Buyer on the Closing
Date is conditioned upon the satisfaction or waiver, at or prior to the
Closing, of the following conditions:
(a) Accuracy of Representations and Warranties. All of the
representations and warranties of Buyer contained in this Agreement and
each of the other Transaction Documents (i) that are qualified as to
materiality shall be true and correct as of date hereof and the Closing,
and (ii) that are not so qualified shall be true and correct in all
material respects as of date hereof and the Closing, and Buyer shall have
delivered a certificate to Buyer, dated as of the Closing Date, to such
effect.
(b) Performance of Agreements. All of the agreements of Buyer to
be performed at or prior to the Closing Date pursuant to the terms hereof
shall have been duly performed in all material respects and each of Buyer
shall have delivered to the Sellers a certificate, dated the Closing Date,
to such effect.
(c) Shareholder Approval. The stockholders of the Company and of
any of the Subsidiary Sellers shall have approved the transactions
contemplated hereby in compliance with all applicable securities laws,
including, without limitation, the approval of the Company's stockholders
pursuant to Sections 242 and 271 of the DGCL and compliance with Section 14
of the Exchange Act.
(d) Consents. The consents, approvals and authorizations (or in
lieu thereof waivers) set forth on Schedule 7.3(d) shall have been obtained
and shall be in full force and effect.
(e) Deliveries. Buyer shall have delivered to the Sellers the
following:
(i) the Purchase Price;
(ii) a duly executed Assumption Agreement, which shall be in full
force and effect and under which there shall exist no breach of,
or default under, the Assumption Agreement;
(iii) a duly executed Xxxx of Sale and Assignment Agreement,
which shall be in full force and effect and under which there
shall exist no breach of, or default under, the Assignment
Agreement;
(iv) a copy of Buyer's certificate of incorporation or other
organizational document certified by the Secretary of State of
the State of Delaware;
(v) a certificate of good standing of Buyer issued not earlier
than ten (10) Business Days prior to the Closing Date by the
Secretary of State of the State of Delaware; and
(vi) a copy of Buyer's by-laws.
ARTICLE VIII
EVENTS OF TERMINATION
8.1 Events of Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned:
(a) at any time prior to the Closing Date by the mutual written
agreement of the Sellers and Buyer;
(b) by the Sellers, provided that the Sellers are not in material
breach of this Agreement, (i) if Buyer or Guarantor is in material breach
of this Agreement and such breach shall remain uncured for a period of
three (3) Business Days after the Sellers shall have given notice of such
breach to Buyer, (ii) after December 30, 2002, if the Closing shall not
have occurred as of such date, or (iii) if the Closing cannot occur on or
before December 31, 2002 in compliance with Section 14 of the Exchange Act;
(c) by Buyer, provided that Buyer or Guarantor is not in material
breach of this Agreement, (i) if the Sellers are in material breach of this
Agreement and such breach shall remain uncured for a period of three (3)
Business Days after Buyer and Guarantor shall have given notice of such
breach to the Sellers, (ii) if the stockholders of the Company shall not
have approved the transactions contemplated hereby in accordance with
Sections 271 and 242 of the DGCL or if the shareholders of any Subsidiary
Sellers shall not have approved the transactions contemplated hereby in
accordance with the applicable law of the jurisdiction of their respective
incorporation by December 31, 2002; provided, however, that such right of
termination shall no longer be available once the approval of the
shareholders of each Seller has been obtained; (iii) on or prior to 8:00
p.m. New York time on December 11, 2002, if Buyer determines in good faith
that there is a reasonable basis in law and in fact to conclude that (A)
any environmental liability (in the case of On-Site Peoria Conditions, not
previously disclosed in any of the environmental reports set forth on
Schedule 3.12 at I.A., items 1-12 (other than item 8), or, in the case of
all other environmental matters (other than On-Site Peoria Conditions),
whether or not previously disclosed) is reasonably likely, individually or
in the aggregate, to constitute a material liability of the Purchased
Divisions taken as a whole or to have a material adverse effect upon the
Purchased Divisions taken as a whole or (B) as a result of the consummation
of the transactions contemplated hereby, Buyer or any Affiliate of Buyer
could reasonably be anticipated to have any (1) material environmental
liability for any Discontinued Operation or (2) material liability for any
asbestos-related claim arising from any activity prior to the completion of
Sellers' bankruptcy proceedings; (iv) on or prior to 8:00 p.m. New York
time on December 6, 2002, if the Sellers shall have amended or modified any
schedule to this Agreement pursuant to Section 6.17 and Buyer concludes
that any matter described in such additional disclosure is reasonably
likely, individually or in the aggregate, to constitute a material
liability of the Purchased Divisions taken as a whole or to have a material
adverse effect upon the Purchased Divisions taken as a whole, (v) on or
prior to 8:00 p.m. New York time on December 6, 2002, if Buyer determines
in good faith, based on its due diligence investigation of the Purchased
Divisions and Purchased Assets, that there exists any liability of which
Buyer was not aware prior to the date hereof to an extent reasonably
necessary to appreciate the significance thereof, which is reasonably
likely, individually or in the aggregate, to constitute a material
liability of the Purchased Divisions taken as a whole or to have a material
adverse effect upon the Purchased Divisions taken as a whole (it being
understood and agreed that this clause (v) shall be in addition to and
shall in no way limit Buyer's right of termination under clause (iii)), or
(vi) on or after January 1, 2003, if the Closing shall not have occurred as
of such date; and
(d) by the Sellers if, in connection with an Acquisition
Proposal, the Board of Directors determines, in its good faith judgment,
that failure to do so would constitute a breach of its fiduciary duties to
the stockholders or creditors of the Company under applicable law;
provided, however, that in the event of a termination by the Sellers
pursuant to this Section 8.1(d), the Sellers shall be obligated to pay to
Buyer an amount equal to Seven Hundred and Fifty Thousand United States
Dollars ($750,000) within five (5) Business Days of the consummation of any
Acquisition Proposal.
8.2 Effect of Termination. In the event that this Agreement shall be
terminated by any party pursuant to Section 8.1, all further obligations of
the parties hereto under this Agreement, other than pursuant to Sections
6.3, 6.5, 10.1, 10.2, 10.3, 10.4, 10.5, 10.7, 10.8, 10.9, 10.10, 10.11,
10.12, 10.13 and 10.14, shall be terminated without further liability or
obligation of either party to the other party hereunder; provided, however,
that termination pursuant to Section 8.1(b) or 8.1(c) shall not relieve the
defaulting or breaching party from liability to the other party hereto.
8.3 Waiver. Any of the Sellers or Buyer may (a) extend the time for
the performance of any of the obligations or other acts of the other party
hereto, (b) waive any inaccuracies in the representations and warranties of
the other party hereto contained herein or in any document delivered
pursuant hereto or (c) waive compliance with any of the agreements or
conditions contained herein. Any such extension or waiver shall be valid if
set forth in an instrument in writing signed by the party to be bound
thereby.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
9.1 Survival of Representations. The representations and warranties of
the Sellers and Buyer contained in Article III and Article IV of this
Agreement, respectively, shall survive until the first anniversary of the
Closing Date, except with respect to Section 3.8 or Section 3.12 which
shall survive until the expiration of the applicable statute of limitations
(including any extensions thereof); provided that with respect to Section
3.12, representations and warranties solely with respect to On-Site Peoria
Conditions shall not survive the Closing).
9.2 Indemnification by the Sellers. (a) From and after the Closing,
the Sellers agree, jointly and severally, to indemnify Buyer, its
Affiliates, and their respective directors, officers, members,
shareholders, employees, agents, consultants, attorneys and representatives
(each, a "Buyer Indemnitee") against, and hold each Buyer Indemnitee
harmless from, any and all loss, liability, cost, damage, claim and
expense, including reasonable attorneys' fees and disbursements, interest
and penalties (collectively, "Damages"), whether or not resulting from
third party claims, which Buyer Indemnitee may sustain at any time by
reason of or resulting from (i) the inaccuracy or breach of any agreement,
covenant, representation or warranty of the Sellers contained in this
Agreement occurring or developing during the period of survival of such
agreement, covenant, representation or warranty; and (ii) the assertion
against Buyer of any claim or liability with respect to the Excluded
Liabilities; provided however, Buyer Indemnitees shall not be entitled to
recover Damages under clause (i) to the extent Buyer Indemnitee had been
made whole as a result of any adjustment pursuant to either Section 2.7 or
Section 2.8.
(b) Buyer Indemnitee shall give the Sellers prompt written notice
of any claim, suit or demand which Buyer Indemnitee believes will give rise
to indemnification by the Sellers under this section; provided, however,
that the failure to give such notice shall not affect the liability of the
Sellers hereunder unless the failure to give such notice adversely and
materially affects the ability of the Sellers to defend Buyer against any
such claim, suit or demand or to cure the breach or inaccuracy giving rise
to the claim for indemnification. If notice of commencement of any such
action is given to the Seller as above provided, the Sellers shall be
entitled to participate in and, to the extent any Seller may wish, to
assume the defense of such action at its own expense, with counsel chosen
by it and reasonably satisfactory to Buyer Indemnitee. Buyer Indemnitee
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such
counsel (other than reasonable costs of investigation) shall be paid by
Buyer Indemnitee unless (i) the Sellers agree to pay the same, (ii) the
Sellers fail to assume the defense of such action with counsel satisfactory
to Buyer Indemnitee in its reasonable judgment, (iii) the named parties to
any such action (including any impleading parties) have been advised by
such counsel that either (A) representation of Buyer Indemnitee and the
Sellers participating in such action by the same counsel would be
inappropriate under applicable standards of professional conduct or (B)
there may be one or more legal defenses available to Buyer Indemnitee which
are different from or additional to those available to the Sellers. In
either of such cases, the Sellers shall not have the right to assume the
defense of such action on behalf of Buyer Indemnitee. No Seller shall be
liable for any settlement entered into without its written consent, which
consent shall not be unreasonably withheld. The Sellers shall not, without
the written consent of Buyer Indemnitee, effect the settlement or
compromise of, or consent to any entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification
or contribution may be sought hereunder.
9.3 Indemnification by Buyer. From and after the Closing, Buyer agrees
to indemnify each Seller, its Affiliates, and their respective directors,
officers, members, shareholders, employees, agents, consultants, attorneys
and representatives (each, a "Seller Indemnitee") against, and hold each
Seller Indemnitee harmless from, any and all Damages, whether or not
resulting from third party claims, which Seller Indemnitee may sustain at
any time by reason of or resulting from (i) the inaccuracy or breach of any
agreement, covenant, representation or warranty of Buyer contained in this
Agreement occurring or developing during the period of survival of such
agreement, covenant, representation or warranty; (ii) the assertion against
any Seller of any claim, suit or liability with respect to any Assumed
Liability, including, for the avoidance of doubt, the Assumed Liability set
forth in Section 2.3(d) or (iii) any liability incurred by Sellers under
the Pennsylvania Performance Bond or any Other Performance Bond resulting
from any failure by Buyer to perform any obligation secured thereby
following the Closing. Any indemnification by Buyer shall use the process
set forth in Section 9.2.
9.4 Basket. Neither the Sellers, on the one hand, nor Buyer, on the
other hand, shall have any obligation to indemnify such other parties for
Damages under any indemnity claim with respect to the breach of a
representation or warranty contained in this Agreement other than Section
3.8 until such time, if ever, as the aggregate amount of all such Damages
incurred by Buyer in the case of indemnification under Section 9.2(a)(i) or
by the Sellers in the case of indemnification under Section 9.3(i) shall
exceed $250,000.
9.5 Limitation on Liability. Notwithstanding anything to the contrary
contained in this Agreement, the obligation of the Sellers, on one hand,
and Buyer, on the other hand, to indemnify such other parties for Damages
with respect to the breach of a representation or warranty contained in
this Agreement pursuant to Section 9.2(i)(a) and Section 9.3(i)
respectively, shall not exceed, in the aggregate, the Purchase Price.
9.6 Waiver. Notwithstanding the foregoing or anything to the contrary
in this Agreement, Buyer and its successors and assigns understand and
agree that the indemnification obligations of the Sellers under Sections
9.2(a)(i) (insofar as it relates to Section 3.12) and 9.2(a)(ii) (insofar
as it relates to Section 2.4(d)) of this Agreement shall constitute the
sole and exclusive remedy of Buyer with respect to any matters or claims
arising under Environmental Laws solely with respect to On-Site Peoria
Conditions, and Buyer hereby waives, and unconditionally releases the
Sellers from, any rights and remedies that Buyer may otherwise have against
any Seller under any Environmental Law, including, without limitations, any
claims contribution under the Comprehensive Response, Compensation and
Liability Act of 1980 or common law with respect to such matters or claims.
ARTICLE X
MISCELLANEOUS
10.1 Expenses. Whether or not the transactions contemplated hereby are
consummated, the Company shall pay its own costs and expenses and the
reasonable, documented, out-of-pocket costs and expenses of Buyer and its
Affiliates (including the fees and expenses of their respective counsel)
incident to the negotiation, preparation, and carrying out of this
Agreement and the consummation of the transactions contemplated hereby up
to a maximum of $75,000, such amount to be paid in full concurrently with
the execution of this Agreement.
10.2 Notices. All notices, requests, consents, and other
communications required or permitted hereunder shall be in writing and
shall be sufficiently given if delivered in person or if sent by telecopy
or by certified or registered mail, postage prepaid, and shall be deemed to
have been delivered when received, if addressed as follows:
(a) If to any or all the Sellers, to:
XXXX Industries, Inc.
0000 Xxxx Xxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxx, Chief Financial Officer
Fax: (000) 000-0000
with a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxxxxx, Esq.
Fax: (000) 000-0000
(b) If to Buyer, to:
PFrank LLC
c/o Platinum Equity LLC
0000 Xxxxxxx Xxxx Xxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxx Xxxxxxxx, General Counsel
Fax: (000) 000-0000
(c) If to Guarantor, to:
Platinum Equity LLC
0000 Xxxxxxx Xxxx Xxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxx Xxxxxxxx, General Counsel
Fax: (000) 000-0000
Any party may change its address for purposes of this Section 10.2 by
giving the other parties written notice of the new address in the manner
set forth above.
10.3 Amendment. This Agreement may be amended, modified or
supplemented only by an instrument in writing executed by each of the
parties hereto.
10.4 Entire Agreement. This Agreement, the exhibits, schedules,
certificates, and documents referred to herein, the Confidentiality
Agreement, and the letter agreement between the parties hereto of even date
herewith constitute the entire agreement of the parties hereto, and
supersede all prior understandings between the parties hereto with respect
to the subject matter hereof.
10.5 Consultation with Attorneys. Each party represents and warrants
that this Agreement is the product of negotiation and preparation by and
among all of the parties hereto and their respective attorneys. The parties
hereto expressly acknowledge that this Agreement shall not be deemed to
have been prepared or drafted by one party or another, or its attorneys,
and will be construed accordingly.
10.6 Multiple Counterparts and Facsimile Signatures. This Agreement
may be executed in several counterparts, each of which shall be deemed an
original, but all of which shall constitute the same instrument. This
Agreement may be executed and delivered by facsimile copies or other means
of electronic transmission.
10.7 GOVERNING LAW. THIS AGREEMENT IS TO BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
10.8 Headings. The headings of the several paragraphs of this
Agreement are inserted solely for convenience of reference and are not a
part of this Agreement and are not intended to govern, limit or aid in the
construction of any of the terms or provisions of this Agreement.
10.9 Knowledge. The term "knowledge" of any Seller as used in this
Agreement, with respect to any fact or circumstance, shall mean any fact or
circumstance which is actually known to Xxxx Xxxxxx, Xxxxx Xxxxxxx, Xxxx
Xxx, Xxxx Xxxxx, Xxxxxxx Xxxxxxxxx or Xxxxxx Xxxx.
10.10 No Third Party Beneficiaries; Assignment.
(a) Except as set forth in Article IX, nothing in this Agreement,
whether expressed or implied, is intended and shall not be construed to
confer any rights or remedies under or by reason of this Agreement on any
persons other than the parties to it and their respective successors and
assigns, nor is anything in this Agreement intended to relieve or discharge
the obligation or liability of any third persons to any party to this
Agreement, nor shall any provision contained herein give any third party
any right of subrogation or action over against any party to this
Agreement.
(b) This Agreement shall be binding on, and accrue to the benefit
of, the parties hereto and their respective successors and permitted
assigns. This Agreement may not be assigned by Guarantor without the prior
written consent of the Sellers. This Agreement may not be assigned by the
Sellers without the prior written consent of Buyer. This Agreement may not
be assigned by Buyer without the prior written consent of the Sellers;
provided, however, that Buyer may assign its rights under this Agreement to
any of its Affiliates, but in such event, Buyer shall remain obligated to
perform its obligations under this Agreement.
10.11 Waiver; Remedies. The waiver by a party of the performance of
any covenant, condition or promise herein shall not invalidate this
Agreement nor shall it be considered a waiver by such party of any other
covenant, condition or promise herein, nor shall any such waiver be
construed as a waiver or relinquishment for the future of the time for the
performance of any other act or identical act, covenant, condition or
promise herein. Remedies, either under this Agreement or by law or
otherwise affordable, will be cumulative and not alternative.
10.12 Severability. In case any provision in this Agreement shall be
held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby.
10.13 Publicity. The Sellers shall give Buyer a reasonable opportunity
to review and comment on all press releases and public filings made between
the date hereof and the second anniversary hereof referring, either
directly or indirectly, to any of Buyer, this Agreement or the transactions
contemplated hereby, in each case, prior to release in the form in which it
will be issued (on a strictly confidential basis until such information is
released). Buyer shall give the Company a reasonable opportunity to review
and comment on all press releases and public filings made between the date
hereof and the second anniversary hereof referring, either directly or
indirectly, to any of the Sellers, this Agreement or the transactions
contemplated hereby, in each case, prior to release in the form in which it
will be issued (on a strictly confidential basis until such information is
released). Each of the Sellers and Buyer acknowledges that the other party
may publish and use standard announcements of the execution of this
Agreement and the consummation of the transactions contemplated hereby,
subject to the provisions set forth in this Section 10.13.
10.14 Specific Performance. Each of the Sellers, on the one hand, and
Buyer and Guarantor, on the other hand, agree that money damages would not
be a sufficient remedy of a breach of this Agreement by a party hereto,
and, that, in addition to all other remedies available at law or in equity
to the Sellers, Buyer or Guarantor, as the case may be, for a breach of
this agreement by the other party hereto, the non-breaching party shall be
entitled to specific performance as a remedy for any such breach.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the day, month and year first above written.
Sellers
ROHN INDUSTRIES, INC.
By: /s/ Xxxxxx Xxxx
------------------------------
Name: Xxxxxx Xxxx
Title:
XXXX CONSTRUCTION, INC.
By: /s/ Xxxxxx Xxxx
------------------------------
Name: Xxxxxx Xxxx
Title:
XXXX PRODUCTS, INC.
By: /s/ Xxxxxx Xxxx
------------------------------
Name: Xxxxxx Xxxx
Title:
XXXX DE MEXICO, S.A. DE C.V.
By: /s/ Xxxxxx Xxxx
------------------------------
Name: Xxxxxx Xxxx
Title:
XXXX SERVICIOUS, S.A. DE C.V.
By: /s/ Xxxxxx Xxxx
------------------------------
Name: Xxxxxx Xxxx
Title:
XXXX, INC.
By: /s/ Xxxxxx Xxxx
------------------------------
Name: Xxxxxx Xxxx
Title:
XXXX INSTALLATION SERVICES, INC.
By: /s/ Xxxxxx Xxxx
------------------------------
Name: Xxxxxx Xxxx
Title:
Buyer
PFRANK LLC
By: /s/ Xxxxxxx Xxxxx
------------------------------
Name: Xxxxxxx Xxxxx
Title:
Guarantor
Solely for purposes of Sections 6.3,
6.5 and 10.14 hereof.
PLATINUM EQUITY LLC
By: /s/ Xxxxxxx Xxxxx
------------------------------
Name: Xxxxxxx Xxxxx
Title:
