EXHIBIT 2.1
EXECUTION COPY
ASSET PURCHASE AGREEMENT
between
XXXXXX INTERNATIONAL, INC.,
and
TMT-PATHWAY, L.L.C.
Dated as of April 20, 1999
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made as of the 20th day of April 1999,
between Xxxxxx International, Inc., an Indiana corporation (the "Seller"), and
TMT-Pathway, L.L.C., a Delaware limited liability company (the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Purchaser desires to purchase, and the Seller desires to
sell, the Business of the Xxxxxx Traffic Markings Division of the Seller (the
"Company");
WHEREAS, the Board of Directors of the Seller has approved this
Agreement pursuant to the terms and conditions contained herein;
WHEREAS, the Managing Member of the Purchaser has approved this
Agreement pursuant to the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants, agreements and warranties herein contained, the parties agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. The following terms shall have the following
meanings for the purposes of this Agreement:
"Acquired Assets" means all right, title, and interest that Seller
possesses and has the right to transfer, in and to all of the assets
constituting and used primarily in the Business, including but not limited to,
all of the (a) real property, leaseholds and subleaseholds therein,
improvements, fixtures, and fittings thereon, and easements, rights-of-way, and
other appurtenants thereto (such as appurtenant rights in and to public
streets), (b) tangible personal property (such as machinery, equipment,
inventories of supplies, manufactured and purchased parts, furniture,
automobiles, trucks, tractors, trailers, tools, jigs, and dies), (c)
Intellectual Property, goodwill associated therewith, licenses and sublicenses
granted and obtained with respect thereto, and rights thereunder, remedies
against infringements thereof, and rights to protection of interests therein
under the laws of all jurisdictions, (d) leases, subleases, and rights
thereunder, (e) Contracts, Liens, guarantees, other similar arrangements, and
rights thereunder, (f) accounts, notes, and other receivables, (g) claims,
deposits, prepayments, causes of action, choses in action, rights of recovery,
rights of set off, and rights of recoupment (but not including any such item
relating to the payment of Taxes), (h) Permits and (i) books, records, ledgers,
files, documents, correspondence, lists, plats, architectural plans, drawings,
and specifications, creative materials, advertising and
promotional materials, studies, reports, and other printed or written materials;
provided, however, that the Acquired Assets shall not include (i) any corporate
charter, qualifications to conduct business as a foreign corporation,
arrangements with registered agents relating to foreign qualifications, taxpayer
and other identification numbers, seals, minute books, stock transfer books,
blank stock certificates, and other documents relating to the organization,
maintenance, and existence of the Seller, (ii) rights in and with respect to the
assets associated with any Employee Benefit Plans, (iii) any of the rights of
the Seller under this Agreement (or under any side agreement between the Seller
on the one hand and the Purchaser on the other hand entered into on or after the
date of this Agreement), (iv) any cash, (v) any claims of the Seller for tax
refunds, or (vi) except as provided in Section 6.16, the name "Xxxxxx" and all
variations of that name, all logos used in connection with that name, and all
goodwill associated with that name.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, Liens, losses, expenses,
investigative and remedial corrective action costs, and fees, including
litigation costs and reasonable attorneys' fees and expenses.
"Affiliate" means, with respect to any specified Person, (a) any other
Person which, directly or indirectly, controls, is under common control with, or
is controlled by, such specified Person, or (b) any director or executive
officer with respect to such Person.
"Agreement" means this Agreement, including all the exhibits and
schedules hereto, as this Agreement may be amended, restated or otherwise
modified from time to time.
"Assumed Liabilities" means the Liabilities and obligations of the
Business set forth on Schedule 2.2, which shall include: (a) all Liabilities of
the Company reflected on the most recent Financial Statements (rather than in
any notes thereto), (b) all Liabilities of the Company which have arisen after
the most recent fiscal month end in the Ordinary Course of Business (other than
any Liability resulting from, arising out of, relating to, in the nature of, or
caused by any breach of Contract, breach of warranty, tort, infringement,
violation of Law, or environmental matter, including without limitation those
arising under any Environmental Law or any health and safety regulations), (c)
all obligations of the Company arising after the Closing Date (other than any
Liability resulting from, arising out of, relating to, in the nature of, or
caused by any breach of Contract, breach of warranty, tort, infringement,
violation of Law, or environmental matter, including without limitation those
arising under any Environmental Law or any health and safety regulations
relating to events or conditions on or before the Closing Date) under the
Contracts and other arrangements referred to in the definition of Acquired
Assets, (d) accrued vacation of Transferred Employees and (e) any separation
allowances to be paid by the Purchaser pursuant to Section 6.18(e); provided,
however, that the Assumed Liabilities shall not include (i) any Liability of the
Seller or the Company for Taxes, other than transfer Taxes arising in connection
with the consummation of the transactions contemplated hereby which shall be
paid by the party upon
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which the tax is imposed by the applicable law or ordinance, (ii) any Liability
of the Seller or the Company for the unpaid Taxes of any Person (other than the
Company) under Reg. ss.1.1502-6 (or any similar provision of state, local, or
foreign law), as a transferee or successor, by Contract, or otherwise for
periods prior to the Closing Date, (iii) any obligation of the Seller or the
Company to indemnify any Person by reason of the fact that such Person was a
director, manager, officer, employee, or agent of the Seller or the Company or
was serving at the request of any such entity as a partner, member, trustee,
director, manager, officer, employee, or agent of another entity (whether such
indemnification is for judgments, damages, penalties, fines, costs, amounts paid
in settlement, losses, expenses, or otherwise and whether such indemnification
is pursuant to any statute, charter document, bylaw, agreement, or otherwise),
(iv) any Liability of the Seller or the Company for costs and expenses incurred
in connection with this Agreement and the transactions contemplated hereby, (v)
any Liability that relates to any Employee Benefit Plan with respect to which
the Seller or the Company has any Liability (whether arising from acts occurring
prior to or after the Closing Date), except those, if any, that are expressly
identified above as Assumed Liabilities, (vi) any Liability for workers
compensation, disability or medical claims incurred by employees of the Company
or their eligible dependents arising on or prior to the Closing Date, (vii) any
Liability for retention bonuses payable to Transferred Employees, (viii) any
Liability for performance bonuses payable by the Seller or the Company, (ix) any
Liability of the Seller or the Company, whether related to the Owned Real
Property, the Leased Real Property or to any other property, for costs and
expenses incurred in connection with events or conditions in existence on or
before the Closing Date and arising out of (A) any actual or alleged violation
of Environmental Law, (B) arising under Environmental Laws relating to the
Company or its facilities or its operations or (C) any pre-Closing arrangement
for the treatment, disposal or recycling of Hazardous Materials at property not
owned or leased by the Seller or the Company, including any investigating,
remedial or corrective obligations, (x) any Liability of the Seller or the
Company related to the property located at Mount Angel, Oregon, (xi) any
Liability of the Seller or the Company for any products manufactured, sold,
leased or delivered prior to the Closing in excess of the reserves shown on the
Financial Statements, (xii) any Liability for matters listed on Schedule 4.19,
(xiii) any Liabilities not accounted for on the face of the Financial Statements
and not expressly identified above as Assumed Liabilities, or (xiv) any
Liability or obligation of the Seller under this Agreement (or under any side
agreement between the Seller on the one hand and the Purchaser on the other hand
entered into on or after the date of this Agreement).
"Authority" means any governmental, regulatory or administrative body,
agency or authority, any court or judicial authority, any public, private or
industry regulatory authority, whether national, Federal, state or local or
otherwise, or any Person lawfully empowered by any of the foregoing to enforce
or seek compliance with any applicable Law.
"Backlog" has the meaning set forth in Section 4.18.
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"Business" means the manufacture and distribution of traffic marking
products including, but not limited to, any traffic marking coatings and any
products used in the application of local striping or other traffic marking
coatings, and any similar or incidental business conducted by, or engaged in by
the Company.
"Business Day" means any day on which banking institutions in New York,
New York and St. Louis, Missouri, are open for the transaction of banking
business.
"Certificate of Formation" means the Certificate of Formation of the
Purchaser as filed with the Secretary of State of the State of Delaware, as
amended from time to time.
"Certificate of Incorporation" means the Certificate of Incorporation
of the Seller as filed with the Secretary of State of the State of Indiana, as
amended from time to time.
"Closing" means the consummation of the transactions contemplated
herein.
"Closing Date" has the meaning set forth in Section 3.1.
"Closing Statement" has the meaning set forth in Section 2.4.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" has the meaning set forth in the Preamble.
"Contract" means any contract, lease, commitment, sales order, purchase
order, agreement, indenture, mortgage, note, bond, right, warrant, instrument,
plan or license, whether written or oral.
"Employee Benefit Plan" means any (a) nonqualified deferred
compensation or retirement plan or arrangement, (b) qualified defined
contribution retirement plan or arrangement which is an Employee Pension Benefit
Plan, (c) qualified defined benefit retirement plan or arrangement which is an
Employee Pension Benefit Plan (including any Multiemployer Plan), or (d)
Employee Welfare Benefit Plan or material fringe benefit or other retirement,
bonus, or incentive plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA
ss.3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA
ss.3(1).
"Employment Agreement" means, unless otherwise noted, the Employment
and Non-Competition Agreement, dated the Closing Date, between the Purchaser and
Xxxxxx Xxxxxxx.
"Environmental Audit" has the meaning set forth in Section 6.12.
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"Environmental Law" means any Law which relates to or otherwise
regulates or imposes liability or standards of conduct concerning discharges,
emissions, releases or threatened releases of noises, odors or any Hazardous
Materials into ambient air, water, or land, or otherwise relating to the
manufacture, processing, generation, distribution, use, treatment, storage,
disposal, cleanup, transport or handling of Hazardous Materials, including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 and
the Superfund Amendments and Reauthorization Act of 1986 (together, as amended,
"CERCLA"), the Resource Conservation and Recovery Act of 1976, as amended, the
Toxic Substances Control Act of 1976, as amended, the Federal Water Pollution
Control Act Amendments of 1972, the Clean Air Act, the Clean Water Act, as
amended, any so-called "Superfund" law, and any other similar Federal, state or
local Law, all as in effect on the Closing Date.
"Environmental Post Closing Covenant Matters" has the meaning set forth
in Section 6.19(c).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Financial Statements" means the following:
(a) the separate unaudited operating statements of the Company
as of June 30, 1998, June 30, 1997, June 30, 1996, June 30, 1995 and June 30,
1994 (including all notes thereto) which are included in Schedule 4.3,
consisting of the statement of operating investment at such dates and the
related statements of operating income, operating cash flows and EBITDA for the
twelve month periods then ended.
(b) the unaudited financial statements of the Company as of
February 28, 1999, which are included in Schedule 4.3, consisting of the
statements of operating investment at such date and the related statements of
operating income, operating cash flows and EBITDA for the 8 month period then
ended.
"GAAP" means generally accepted accounting principles, as of the date
hereof, in the United States.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended;
(c) any petroleum product or fractions thereof; or
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(d) any pollutant or contaminant or hazardous, dangerous,
toxic or radioactive chemical, material or substance, whether as matter or
energy, within the meaning of any applicable Environmental Law all as now or at
any time hereafter in effect.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Independent Accounting Firm" has the meaning set forth in Section 2.4.
"Indemnification Period" has the meaning set forth in Section 10.1.
"indemnitee" has the meaning set forth in Section 10.4.
"indemnitor" has the meaning set forth in Section 10.4.
"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade 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, (c) all
copyrightable works, all copyrights, and all applications, registrations, and
renewals in connection therewith, (d) all mask works and all applications,
registrations, and renewals in connection therewith, (e) all trade secrets and
confidential business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing plans
and proposals, (f) all computer software (including data and related
documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium), in each case as
related to or associated with the Business. Except as set forth in Section 6.16,
the term "intellectual property" shall not include the name "Xxxxxx", any
variations of that name, any logos used in connection with that name, or any
goodwill associated with that name.
"knowledge" means actual knowledge, after reasonable inquiry, of the
employees of the Seller identified on Schedule 1.1, except that with regard to
environmental matters, "knowledge" shall also include the on-site manager for
each Owned Real Property.
"Law" means any law, statute, regulation, ordinance, rule, order,
common law standard, decree, judgment, standard, guideline, consent decree or
governmental requirement enacted, promulgated, entered into, agreed or imposed
by any Authority.
"Leased Real Property" has the meaning set forth in Section 4.6.
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"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due).
"Lien" means any mortgage, lien (except for any lien for Taxes not yet
due and payable), charge, restriction, pledge, security interest, option, lease
or sublease, right of any third party, easement, encroachment or encumbrance.
"Major Customers" means the 15 largest customers of the Company, in
terms of revenue during each of the 1997 and 1998 fiscal years.
"Major Products" means the 15 products with the largest sales volume
sold by the Company in terms of revenue during each of the 1997 and 1998 fiscal
years.
"Major Suppliers" means the 15 largest suppliers of the Company in
terms of purchases during each of the 1997 and 1998 fiscal years.
"material" means any circumstance or state of facts which results in,
or would reasonably be expected to result in, losses or the expenditure or
commitment of $50,000 or more, or which results in any material limitation or
restriction on the ability of the Purchaser to conduct the Business as it
previously has been conducted by the Seller.
"Material Adverse Effect" means any circumstances, developments or
matters whose effect on the business, properties, assets, results, operations,
condition (financial and other) and prospects of a Person, either alone or in
the aggregate, is or would reasonably expected to be materially adverse.
"Multiemployer Plan" has the meaning set forth in ERISA ss.3(37).
"Objection Notice" has the meaning set forth in Section 2.4.
"Ordinary Course of Business" means the ordinary course of business of
the Company consistent with past custom and practice (including with respect to
quantity and frequency).
"Owned Real Property" has the meaning set forth in Section 4.5.
"Permits" has the meaning set forth in Section 4.17.
"Person" means any individual, corporation, proprietorship, firm,
partnership, limited partnership, limited liability company, trust, association,
governmental authority or other entity.
"Purchase Price" has the meaning set forth in Section 2.3.
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"Purchaser" has the meaning set forth in the Preamble.
"Purchaser Group" has the meaning set forth in Section 10.2.
"Related Agreement" means any Contract which is or is to be entered
into at the Closing or otherwise pursuant to this Agreement or in connection
with the transactions contemplated hereby.
"Required Consents" means the consents, approvals or waivers of each
Person whose consent or approval shall be required in connection with this
Agreement and the transactions contemplated hereby, except for those consents or
approvals for which failure to obtain would not, individually and in the
aggregate, have a Material Adverse Effect upon the consummation of the
transactions contemplated hereby.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" has the meaning set forth in the Preamble.
"Subsidiary" means any corporation, proprietorship, firm, partnership,
limited partnership, limited liability company, trust, association, or other
entity that is directly or indirectly controlled by the Company.
"Survey" means a survey with respect to each property, consisting of a
plat and field notes, prepared by a licensed surveyor acceptable to the
Purchaser and the Title Company, which survey shall: (a) reflect the actual
dimensions, the gross area and the net area of the property, the location of any
easements, rights-of-way, setback lines or other matters referred to in the
Title Commitment; (b) include the surveyor's registration number and seal and
the date of the survey; (c) include a certification to Purchaser and the Title
Company acceptable to each; (d) reflect that the property has access to and from
a publicly dedicated street, roadway or highway; (e) be sufficient to cause the
Title Company to delete the "survey exception" in Schedule B of the Title Policy
to the extent permitted by the rules of ALTA; (f) reflect the area within the
property, if any, that has been designated by any governmental agency or body as
being subject to special or increased flood hazards; and (g) comply with the
most recent regulations of ALTA/ACSM, including Items 1, 2, 3, 4, 6, 7(a), 8,
10, 11 and 13 from Table A of such regulations.
"Taxes" means all taxes, charges, fees, duties, levies or other
assessments, including, without limitation, income, gross receipts, net
proceeds, ad valorem, turnover, real and personal property (tangible and
intangible), sales, use, franchise, excise, value added, license, payroll,
unemployment, environmental (including taxes under Section 59A of the Code),
customs duties, capital stock, disability, stamp, leasing, lease, user,
transfer, fuel, excess profits, occupational and interest equalization, windfall
profits, severance and employees' income withholding and Social Security taxes
imposed by the United States or any foreign country or by any state,
municipality, subdivision or instrumentality of the
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United States or of any foreign country or by any other tax authority, including
all applicable penalties and interest, and such term shall include any interest,
penalties or additions to tax attributable to such taxes.
"Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Third Party Claim" has the meaning set forth in Section 10.4.
"Title Commitment" has the meaning set forth in Section 7.10.
"Title Company" has the meaning set forth in Section 7.10.
"Transferred Employees" has the meaning set forth in Section 6.18.
"Year 2000 Ready" means the ability to accurately process date/time
data (including but not limited to, calculating, composing, and sequencing)
from, into and between the twentieth and twenty-first centuries, and the years
1999 and 2000, including leap year calculations.
ARTICLE II
BASIC TRANSACTION
SECTION 2.1 Purchase and Sale of Assets. On and subject to the terms
and conditions of this Agreement, the Purchaser agrees to purchase from the
Seller and the Seller agrees to sell, transfer, convey, and deliver to the
Purchaser, all of the Acquired Assets at the Closing for the consideration
specified in Section 2.3.
SECTION 2.2 Assumption of Liabilities. On and subject to the terms and
conditions of this Agreement, the Purchaser agrees to assume and become
responsible for all of the Assumed Liabilities at the Closing, as set forth on
Schedule 2.2. The Purchaser will not assume or have any responsibility with
respect to any other obligations or Liability of the Company or the Seller not
included within the definition of Assumed Liabilities.
SECTION 2.3 Purchase Price. As consideration for the Acquired Assets
the Purchaser shall pay to the Seller, by wire transfer of immediately available
funds, cash in the amount of $38,000,000 minus the amount of any outstanding
indebtedness and minus the amounts set forth in Sections 6.4 and 6.17(b) (as so
adjusted, the "Purchase Price").
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SECTION 2.4 Purchase Price Adjustment.
(a) Preparation of Closing Statement. Within 10 Business Days
after the Closing Date, the Seller will prepare and deliver to the Purchaser a
statement of operating investment of the Company as of the close of business on
the Closing Date (the "Closing Statement"), and a certificate of the Chief
Financial Officer of the Company stating that the Closing Statement was prepared
so as to present fairly the financial position of the Company on a basis
consistent with the Financial Statements. Within 10 Business Days after the
Purchaser's receipt of the Closing Statement, the Purchaser may give the Seller
a written notice stating in reasonable detail the Purchaser's objections (an
"Objection Notice") to the Closing Statement. If the Purchaser does not tender
to the Seller an Objection Notice within 10 Business Days after receipt of the
Closing Statement, then the Closing Statement will be conclusive and binding
upon the parties.
(b) Dispute and Amicable Resolution. If the Purchaser timely
gives an Objection Notice as described in subsection (a) above, then the
Purchaser and the Seller will attempt amicably to resolve their disputes as
reflected in the Objection Notice, and any amount agreed to in writing by the
Purchaser and the Seller will be conclusive and binding upon the parties.
(c) Resolution by Independent Accounting Firm. If the
Purchaser and the Seller do not resolve all disputes as reflected in the
Objection Notice within 15 Business Days after the Objection Notice is given,
then the Purchaser and the Seller will retain the firm of Deloitte & Touche LLP
(the "Independent Accounting Firm") to review the Closing Statement, as soon as
practicable, and, in any event, within 20 Business Days after the submission of
any dispute to it, including all work papers prepared by the parties. The final
determination by the Independent Accounting Firm will be conclusive and binding
upon the parties for the purposes of Section 2.4(d) below. The fees and expenses
of the Independent Accounting Firm shall be borne by the Purchaser, on the one
hand, and the Seller, on the other hand, in such proportion as shall be
determined by the Independent Accounting Firm giving consideration to the
Purchaser's and Seller's initial positions with respect to the Closing Statement
and how far such positions were from the Independent Accounting Firm's decision.
(d) Purchase Price Adjustment. If the final "working capital"
(as that term is defined in Section 7.6(b)) of the Company is less than $9.6
million, the Seller shall pay to the Purchaser the amount of the difference by
wire transfer of immediately available funds to an account or accounts
designated by Purchaser in writing, no later than three Business Days after the
final determination of the Company's final working capital.
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ARTICLE III
CLOSING OF THE TRANSACTION
SECTION 3.1 Closing. The Closing of the transactions contemplated by
this Agreement shall take place at the offices of Xxxxx, Xxxxx & Xxxxx, 000
Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 at 10:00 A.M. on the latest of:
(a) May 20, 1999,
(b) five Business Days after the satisfaction or waiver of the
conditions precedent set forth in Articles VII and VIII, or
(c) such other date, time and place as may be agreed by the
Purchaser and the Seller; provided, however, that the date of the Closing shall
be automatically extended from time to time for so long as any of the conditions
set forth in Articles VII and VIII shall not be satisfied or waived, subject,
however, to the provisions of Section 9.1. The date on which the Closing occurs
in accordance with the preceding sentence is referred to in this Agreement as
the "Closing Date."
SECTION 3.2 Deliveries at the Closing. At the Closing, (a) the Seller
will deliver to the Purchaser the various certificates, instruments, and
documents referred to in Article VII; (b) the Purchaser will deliver to the
Seller the various certificates, instruments, and documents referred to in
Article VIII; (c) the Seller will execute, acknowledge (if appropriate), and
deliver to the Purchaser (i) assignments (including real property and
Intellectual Property transfer documents) in the forms attached hereto as
Exhibit A through C and (ii) such other instruments of sale, transfer,
conveyance, and assignment as the Purchaser and their counsel may reasonably
request; (d) the Purchaser will execute, acknowledge (if appropriate), and
deliver to the Seller (i) an assumption in the form attached hereto as Exhibit D
and (ii) such other instruments of assumption as the Seller or their counsel may
reasonably request; and (e) the Purchaser will deliver to the Seller the
consideration specified in Section 2.3 above.
SECTION 3.3 Allocation. The Purchaser and the Seller agree to allocate
the Purchase Price (including the amount of Assumed Liabilities and all other
capitalizable costs) among the Acquired Assets for all purposes (including
financial accounting and tax purposes) in accordance with the allocation
schedule attached as Schedule 3.3. Any adjustment to the Purchase Price shall be
allocated as provided in Temp. Treas. Regulation ss. 1.1060-1T(f).
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Purchaser that, except
as set forth in the relevant schedule, as of the date hereof and as of the
Closing Date:
SECTION 4.1 Due Incorporation; Authorization.
(a) The Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Indiana, with all
requisite power and authority to own and operate its assets and properties as
they are now being owned and operated, except where the failure to have such
power and authority would not have a Material Adverse Effect. The Company has no
direct or indirect Subsidiaries. True, correct and complete copies of the
Certificate of Incorporation and the By-laws, as amended, of the Seller have
been delivered to Purchaser.
(b) The Seller has full corporate power and authority to
execute and deliver this Agreement and the Related Agreements and to perform the
other transactions contemplated hereby. The execution and delivery of this
Agreement and the Related Agreements by the Seller and the performance by the
Seller of its obligations hereunder and the other transactions provided for
herein have been duly and validly authorized by all necessary corporate action
on the part of the Seller. The Board of Directors of the Seller has approved the
execution, delivery and performance of this Agreement and the other transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Seller and constitutes the valid and binding agreement of the Seller,
enforceable against the Seller in accordance with its terms, subject to
applicable bankruptcy, insolvency and other similar laws affecting the
enforceability of creditors' rights generally, general equitable principles and
the discretion of courts in granting equitable remedies.
SECTION 4.2 Noncontravention. The execution, delivery and performance
of this Agreement, the Related Agreements, and the other transactions
contemplated by this Agreement and the fulfillment of and compliance with the
terms and conditions of this Agreement do not and will not, with the passing of
time or the giving of notice or both, violate or conflict with, constitute a
breach of or default under, result in the loss of any material benefit under, or
permit the acceleration of any obligation under, (a) any term or provision of
the Certificate of Incorporation or By-laws of the Seller; (b) any judgment,
decree or order of any Authority to which the Seller or the Company is a party
or by which the Seller, the Company or any of their respective properties are
bound, (c) any material Contract to which the Seller or the Company is a party
or by which the Seller, the Company or any of their respective assets or
properties are bound, or (d) any Law applicable to the Seller or the Company.
Except for compliance with the applicable requirements of the HSR Act and as set
forth on the relevant schedule, no material consent, approval, order or
authorization of, or registration, declaration or filing with, any Person is
required in
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connection with the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated by this Agreement.
SECTION 4.3 Financial Statements.
(a) The Financial Statements have been prepared in accordance
with GAAP, present fairly the financial position of the Company as of the dates
thereof and the results of operations and cash flows of the Company for the
periods covered thereby, and are consistent in all material respects with the
books and records of the Company (which books and records are correct and
complete in all material respects), except that interim financial statements
omit footnotes and are subject to year-end adjustments and accruals.
(b) The Company has no material Liabilities, debts, claims or
obligations of any nature on the date of this Agreement (and, to the knowledge
of the Seller, there is no basis for any action, suit proceeding, hearing,
investigation, charge, complaint, claim or demand against it giving rise to any
material liability) except (i) Liabilities disclosed in Schedule 4.3 or in the
Financial Statements, (ii) Liabilities incurred in the Ordinary Course of
Business and consistent with past practice since February 28, 1999 (none of
which relates to any breach of Contract, breach of warranty, tort, infringement,
or violation of Law or arose out of any charge, complaint, action, suit, claim,
proceeding or demand) and (iii) Liabilities incurred in connection with or as a
result of the transactions contemplated by this Agreement and the Related
Agreements.
SECTION 4.4 Title to Assets. Except as disclosed in the Schedule 4.4,
the Company has good title to, and is the lawful owner of, all of the assets and
properties that are material to the Company or the Business, free and clear of
any Lien, except for (a) assets which are leased and Intellectual Property which
is licensed; (b) mechanics', carriers', landlords', workers' and other similar
Liens imposed by Law arising in the Ordinary Course of Business; and (c) Liens
for Taxes not yet due and payable (collectively, the "Permitted Liens").
SECTION 4.5 Owned Real Property. Schedule 4.5 lists and describes
briefly all real property owned by the Company or the Seller at which the
operations of the Business are conducted (the "Owned Real Property"). With
respect to each parcel of Owned Real Property listed in Schedule 4.5:
(a) the Company or the Seller has good and marketable title to
the parcel of real property, subject only to the title exceptions identified in
the Title Commitments;
(b) there are no (i) pending or, to the knowledge of the
Seller, threatened condemnation proceedings relating to the property or (ii)
pending or, to the knowledge of the Seller, threatened litigation or
administrative actions relating to the property, or (iii) other matters that
materially and adversely affect the current use, occupancy, or value thereof;
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(c) all facilities have received all material approvals of
Authorities (including licenses and permits) required in connection with the
ownership or operation thereof and have been operated and maintained in
accordance with applicable laws, rules, and regulations except for violations
which are not material;
(d) there are no leases, subleases, licenses, concessions, or
other agreements, written or oral, granting to any party or parties the right of
use or occupancy of any portion of the parcel of real property;
(e) there are no outstanding options or rights of first
refusal to purchase the parcel of real property, or any portion thereof or
interest therein;
(f) there are no parties (other than the Company) in
possession of the parcel of real property who are in possession of space to
which they are entitled;
(g) all facilities located on the parcel of real property are
supplied with utilities and other services necessary for the operation of such
facilities, including gas, electricity, water, telephone, sanitary sewer, and
storm sewer, all of which services are adequate in accordance with all
applicable laws, ordinances, rules, and regulations and are provided via public
roads or via permanent, irrevocable, appurtenant easements benefitting the
parcel of real property;
(h) neither the Seller nor the Company has experienced any
material damage, destruction, or loss (whether or not covered by insurance) to
the Owned Real Property within the previous five years; and
(i) all Required Consents for the assignment of each parcel of
real property have been obtained or will be obtained prior to the Closing Date.
SECTION 4.6 Real Property Leases. Schedule 4.6 lists and describes
briefly all real property leased or subleased to the Company or the Seller that
relates in any way to the Business (the "Leased Real Property"). The Seller has
delivered to the Purchaser correct and complete copies of the leases and
subleases listed in Schedule 4.6 (as amended to date).
With respect to each lease and sublease listed in Schedule 4.6:
(a) the lease or sublease is legal, valid, binding, enforce-
able, and in full force and effect;
(b) the lease or sublease will continue to be legal, valid,
binding, enforceable, and in full force and effect on identical terms following
the Closing and all Required Consents for the assignment of such lease or
sublease have been obtained or will be obtained prior to the Closing Date;
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(c) no party to the lease or sublease is in material breach or
default, and no event has occurred which, with notice or lapse of time, would
constitute a material breach or default or permit termination, modification, or
acceleration thereunder;
(d) no party to the lease or sublease has repudiated any
provision thereof;
(e) there are no disputes, oral agreements, or forbearance
programs in effect as to the lease or sublease;
(f) with respect to each sublease, the representations and
warranties set forth in subsections (a) through (e) above are true and correct
with respect to the underlying lease;
(g) neither the Company nor the Seller has assigned,
transferred, conveyed, mortgaged, deeded in trust, or encumbered any interest in
the leasehold or subleasehold;
(h) all facilities leased or subleased thereunder have
received all approvals of Authorities (including licenses and permits) required
in connection with the operation thereof and have been operated and maintained
in accordance with applicable laws, rules, and regulations; and
(i) all facilities leased or subleased thereunder are supplied
with utilities and other services necessary for the operation of said
facilities.
SECTION 4.7 Intellectual Property.
(a) The Seller or the Company owns or has the right to use
pursuant to license, sublicense, Contract, or permission all Intellectual
Property necessary for the operation of the Business as presently conducted.
Each item of Intellectual Property owned or used by the Seller or the Company in
the Business immediately prior to the Closing hereunder will be owned or
available for use by the Purchaser on identical terms and conditions immediately
subsequent to the Closing hereunder. However, except as provided in Section
6.16, the Seller is retaining all rights to the name "Xxxxxx" and to all
variations of that name, all logos used in connection with that name, and all
goodwill associated with that name. The Seller and the Company have taken all
necessary action to maintain and protect each item of Intellectual Property
which is material to the Business in accordance with the customary practices of
the Business.
(b) Except as disclosed in Schedule 4.7, (i) neither the
Seller nor the Company has interfered with, infringed upon, misappropriated, or
otherwise come into conflict with any Intellectual Property rights of third
parties in connection with the operation of the Business, (ii) neither the
Seller nor the Company has ever received any charge, complaint, claim, demand,
or notice alleging any such interference, infringement, misappropriation, or
violation (including any claim that the Seller or the Company must license or
refrain from using any Intellectual Property rights of any third party), (iii)
to the
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knowledge of the Seller, no third party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual Property
rights of the Seller or the Company, and (iv) there are no interferences,
infringements, misappropriations or violations of the Intellectual Property
rights of any person by the Seller or the Company that would reasonably be
expected to have a Materially Adverse Effect on the Business.
(c) Schedule 4.7 identifies each unexpired registration which
has been issued to the Seller or the Company with respect to any of its
Intellectual Property, identifies each pending application for registration of
trademark or copyright which the Seller or the Company has made with respect to
any of its Intellectual Property, and identifies each license, Contract or other
permission which the Seller or the Company has granted to any third party with
respect to any of its Intellectual Property (together with any exceptions). The
Seller has made available to the Purchaser correct and complete copies of all
such patents, registrations, applications, licenses, Contracts and permissions
(as amended to date). Schedule 4.7 also identifies each trade name or
unregistered trademark used by the Seller or the Company in connection with the
Business. With respect to each item required to be identified in Schedule 4.7:
(i) the Seller or the Company possesses all right,
title, and interest in and to the item, free and clear of any Lien,
license, or other restriction;
(ii) the item is not subject to any outstanding
injunction, judgment, order, decree, ruling, or charge;
(iii) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or, to
the knowledge of the Seller, is threatened which challenges the
legality, validity, enforceability, use, or ownership of the item.
(iv) neither the Seller nor the Company is presently
obligated to indemnify any Person for or against any interference,
infringement, misappropriation, or other conflict with respect to the
item.
(d) Schedule 4.7 identifies each material item of Intellectual
Property that any third party owns and that the Seller or the Company uses
pursuant to a license, sublicense, Contract or permission granted to the Seller
or the Company. The Seller has made available to the Purchaser correct and
complete copies of all such licenses, sublicenses, Contracts and permissions (as
amended to date). With respect to each item required to be identified in
Schedule 4.7, except as disclosed in Schedule 4.7:
(i) with respect to the Seller and, to the knowledge
of the Seller, with respect to the other parties, the license,
sublicense, Contract or permission is legal, valid, binding,
enforceable, and in full force and effect in all material respects;
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(ii) the license, sublicense, Contract or permission
will continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms following the consummation of the
transactions contemplated hereby;
(iii) no party to the license, sublicense, Contract
or permission is in breach or default in any material respect, and, to
the knowledge of the Seller, no event has occurred which with notice or
lapse of time would constitute a breach or default or permit
termination, modification, or acceleration thereunder;
(iv) neither the Seller nor the Company has, and no
other party to the license, sublicense, or permission has notified the
Seller that it has, repudiated any material provision thereof;
(v) the item of Intellectual Property under the
license, sublicense or permission is not subject to any outstanding
injunction, judgment, order, decree, ruling, or charge;
(vi) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or, to
the knowledge of the Seller, is threatened which challenges the
legality, validity, or enforceability of the item of Intellectual
Property under the license, sublicense or permission; and
(vii) neither the Seller nor the Company has granted
any sublicense or similar right with respect to the license,
sublicense, or permission.
(e) There are no patents or unexpired patent registrations
issued to the Seller or the Company and no patents have been assigned by the
Seller or the Company, in each case, that are used in connection with the
Business.
SECTION 4.8 Tangible Assets. The Company owns or leases all buildings,
machinery, equipment and other tangible assets necessary for the conduct of the
Business as presently conducted. Except as disclosed in Schedule 4.8, each such
tangible asset is free from material defects, has been maintained substantially
in accordance with normal industry practice, is in good operating condition and
repair (subject to normal wear and tear) and is suitable for the purposes for
which it presently is used. The Acquired Assets will be sufficient to permit the
Purchaser to operate the Business as presently conducted.
SECTION 4.9 Inventory. The inventory of the Company consists of raw
materials and supplies, manufactured and processed parts, work in process, and
finished goods, all of which is merchantable and fit for the purpose for which
it was procured or manufactured, and none of which is slow-moving, obsolete,
damaged, or defective, subject only to the reserve for inventory writedown set
forth on Schedule 4.9 as adjusted for operations and transactions through the
Closing Date in accordance with the past custom and practice of the Company.
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SECTION 4.10 Contracts. Schedule 4.10 contains an accurate list as of
the date of this Agreement of all the Contracts of the following types that
relate in any material way to the Company or the Business to which the Seller or
the Company is a party or to which any of its assets or properties are subject:
(a) any Contract (or group of related Contracts) for the lease
of personal property to or from any Person providing for lease payments in
excess of $50,000 per annum;
(b) any Contract (or group of related Contracts) for the
purchase or sale of raw materials, commodities, supplies, products, or other
personal property, or for the furnishing or receipt of services, the performance
of which will extend over a period of more than one year or involve
consideration in excess of $100,000;
(c) any Contract outside the Ordinary Course of Business
granting to any Person a right of first refusal or option to purchase or acquire
any material assets;
(d) any Contract which involves or contributes to the
Company's aggregate annual remuneration which exceeds 5% of the Company's annual
revenues for the fiscal years ended June 30, 1998 and June 30, 1997;
(e) any capitalized lease, pledge, conditional sale or title
retention agreement involving the payment of more than $50,000 in the aggregate;
(f) any Contract concerning a partnership or joint venture;
(g) any material Contract with a sales representative,
manufacturer's representative, distributor, dealer, broker, sales agency,
advertising agency or other Person engaged in sales, distributing or promotional
activities, or any agreement to act as one of the foregoing on behalf of any
Person;
(h) any material Contract (or group of related Contracts)
under which the Company has created, incurred, assumed, or guaranteed any
indebtedness for borrowed money, or any capitalized lease obligation, or under
which it has imposed a Lien on any of its assets, tangible or intangible;
(i) any material Contract pursuant to which the Company has
made or will make loans or advances, or has or will have incurred debts or
become a guarantor or surety or pledged its credit on or otherwise become
responsible with respect to any undertaking of another Person (except for the
negotiation or collection of negotiable instruments in transactions in the
Ordinary Course of Business);
(j) any mortgage, indenture, note, bond or other agreement
relating to indebtedness incurred or provided by the Company;
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(k) any Contract concerning confidentiality or noncompetition
or otherwise prohibiting the Company from freely engaging in any business;
(l) any material Contract between the Company and the Seller;
(m) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or arrangement for
the benefit of its current or former directors, officers, and employees;
(n) any material license, royalty or other written Contract
relating to Intellectual Property not otherwise delivered to the Purchaser
pursuant to Section 4.7(d);
(o) any material Contract with any governmental body;
(p) any collective bargaining agreement;
(q) any Contract for the employment of any individual on a
full-time, part-time, consulting, or other basis providing annual compensation
in excess of $50,000 or providing severance benefits;
(r) any material Contract, except Contracts which have been
fully performed, relating to any acquisition or disposition of any division,
line of business, or real property;
(s) any material Contract under which it has advanced or
loaned any amount to any of its directors, officers, and employees which remains
unpaid;
(t) any Contract under which the consequences of a default or
termination could have a Material Adverse Effect on the Company;
(u) any other Contract (or group of related Contracts) the
performance of which involves consideration in excess of $50,000.
Each of the foregoing Contracts has been made available for review by the
Purchaser. In the case of any material Contract described above which is not
written, the Seller has provided to the Purchaser a brief written description of
such Contract. With respect to each such Contract, except as disclosed in
Schedule 4.10: (A) with respect to the Seller and, to the knowledge of the
Seller, with respect to other parties, the Contract is legal, valid, binding,
enforceable, and in full force and effect in all material respects; (B) the
Contract will continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms following the consummation of the
transactions contemplated hereby; (C) all Required Consents for the assignment
of the Contract have been obtained or will be obtained prior to the Closing
Date; (D) with respect to the Seller and, to the knowledge of the Seller, with
respect to other parties, no party is in material breach or default, and no
event has occurred which with notice or lapse of time would constitute a breach
or default, or permit
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termination, modification, or acceleration, under the Contract; and (E) no party
has notified the Seller that it has repudiated any material provision of the
Contract.
SECTION 4.11 Insurance. Schedule 4.11 contains an accurate and complete
list as of the date of this Agreement of all policies of fire and casualty,
liability, workmen's compensation, product liability and other forms of
insurance owned by the Company, including any self insurance arrangements. The
Seller maintains policies of fire and casualty, liability, workmen's
compensation, product liability and other forms of insurance in such amounts,
with such deductibles and against such risks and losses as are, in the Seller's
judgment, reasonable for the Business and assets of the Company.
SECTION 4.12 Employee Benefit Plans.
(a) General. Except as set forth on Schedule 4.12, the Company
is not a party to, does not participate in or have any liability or contingent
liability with respect to:
(i) any Employee Welfare Benefit Plan or Employee Pension
Benefit Plan, other than a Multiemployer Plan;
(ii) any retirement or deferred compensation plan,
incentive compensation plan, stock plan, unemployment compensation
plan, vacation pay, severance pay, bonus or benefit arrangement,
insurance or hospitalization program or any other fringe benefit
arrangements for any current or former employee, director, consultant
or agent, whether pursuant to contract, arrangement, custom or informal
understanding, which does not constitute an Employee Benefit Plan; or
(iii) any employment agreement.
(b) Plan Documents and Reports. A true and correct copy of the
summary plan description for each of the Employee Pension Benefit Plans and each
of the Employee Welfare Benefit Plans listed on Schedule 4.12 has been supplied
to the Purchaser. A true and correct copy of the most recent Internal Revenue
Service determination letter with respect to each Employee Pension Benefit Plan
has been supplied to the Purchaser.
(c) Compliance with Employee Benefit Laws; Liabilities.
(i) All Employee Benefit Plans which are Employee Pension
Benefit Plans comply in form and in operation in all material respects
with all applicable requirements of Sections 401(a) and 501(a) of the
Code.
(ii) Each Employee Benefit Plan which constitutes a
"group health plan" (as defined in Section 607(1) of ERISA or Section
4980B(g)(2) of the Code), including any plans of current and former
affiliates which must be taken into account under Sections 4980B and
414(t) of the Code or Section 601 of ERISA, has been
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operated substantially in compliance with applicable law, including
coverage requirements of Section 4980B of the Code and Section 601 of
ERISA to the extent such requirements are applicable.
(d) Multiemployer Plans. The Company does not contribute to,
has not contributed to, and does not have any liability or contingent liability
with respect to any multiemployer plan.
(e) The Seller has disclosed to the Purchaser all of the terms
and conditions of any severance and bonus arrangements and has delivered to the
Purchaser all documents relating to such arrangements.
SECTION 4.13 Legal Compliance. Except as disclosed in Schedule 4.13,
(a) the Company has complied in all material respects with all applicable Laws
except where the failure to comply would not be material to the Company and (b)
no action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice is currently pending against it alleging any failure so to
comply except where the failure to comply would not be material to the Company.
SECTION 4.14 No Material Adverse Effect. Except as disclosed in
Schedule 4.14, since December 31, 1998 until the date hereof, the Company has
conducted its Business only in the Ordinary Course of Business and as of the
date hereof there has not been any Material Adverse Effect on the Company, and
no event has occurred or circumstance exists that may reasonably be expected to
result in a Material Adverse Effect.
SECTION 4.15 Taxes.
(a) All federal, state, local and foreign Tax Returns required
to be filed by or with respect to the Company through the Closing Date have been
or will be accurately prepared, and have been or will be duly and timely filed,
and all Taxes (including Taxes withheld from employees' salaries and all other
withholding Taxes and obligations and all deposits required to be made by or
with respect to the Company with respect to such withholding Taxes or
otherwise), interest, penalties, assessments and/or deficiencies due with
respect to any taxable period or partial taxable period of the Company ending on
or before the Closing Date have been or will be timely paid, or to the extent
not due and payable as of the Closing Date, adequate provision for the payment
thereof has been or will be made on the financial statements or the books of
account of the Company.
(b) Except as set forth in Schedule 4.15 attached hereto, the
Purchaser will not be required to deduct and withhold any amount pursuant to
Section 1445(a) of the Code upon the transfer of the Acquired Assets to the
Purchaser.
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SECTION 4.16 Environmental Matters. Except as disclosed in Schedule
4.16 (such exceptions to be identified with the subpart of this Section 4.16 to
which the exception applies):
(a) the Company:
(i) has complied and is in compliance in all material
respects with all Environmental Laws;
(ii) has not received notice of any action, suit,
proceeding, hearing, investigation, information request, charge,
complaint, claim, demand against it alleging any such failure to
comply; and
(iii) has obtained and complied in all material respects
with, and is in compliance in all material respects with, all Permits,
licenses and other authorizations that are required pursuant to
Environmental Laws.
(b) Since 1993, neither the Seller nor the Company has
received any written or oral notice, report or other information regarding (i)
any alleged violation of Environmental Laws, or (ii) any Adverse Consequences
arising under Environmental Laws relating to the Company or its facilities,
including any investigatory, remedial or corrective obligations.
(c) The Company has not handled or disposed of any substance,
arranged for or permitted the release or disposal of any substance, exposed any
employee or other individual to any substance or condition, or owned or operated
any property or facility in any manner that has given or could reasonably give
rise to any material Adverse Consequences for any site, location or body of
water (surface or subsurface), for any illness of or personal injury to any
employee or other individual, or for any reason under any Environmental Law.
(d) None of the following exists at any property or facility
owned or operated by the Company: (1) underground storage tanks, (2)
asbestos-containing material in any form or condition, (3) materials or
equipment containing polychlorinated biphenyls, or (4) landfills, subsurface
impoundments, or Hazardous Material disposal areas.
(e) Neither this Agreement nor the consummation of the
transactions that is the subject of this Agreement will result in any material
obligations for site investigation or cleanup, or notification to or consent of
government agencies or third parties, pursuant to any so-called
"transaction-triggered" or "responsible property transfer" laws.
(f) The Company has never expressly assumed or undertaken any
Adverse Consequences of any other Person relating to Environmental Laws,
including without limitation any obligation for corrective or remedial action.
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(g) Nothing has come to the attention of the Seller that would
cause it to believe that the Company will be prevented, hindered or limited from
continued compliance with Environmental Laws, or will be subject to any
investigatory, remedial or corrective actions or obligations pursuant to
Environmental Laws, or will be subject to any other material Adverse
Consequences pursuant to Environmental Laws, including without limitation any
relating to onsite or offsite releases or threatened releases of Hazardous
Materials or wastes, personal injury, property damage or natural resources
damage.
(h) With respect to each parcel of Owned Real Property and
Leased Real Property, Seller has provided Purchaser with complete copies of all
environmental related data, notices, orders, correspondence, warnings,
judgments, Permits, investigations, assessments, audits, studies, tests and
related materials in possession of Seller, or known to Seller to exist.
SECTION 4.17 Permits. Schedule 4.17 is a true and accurate list by
category of all material licenses, certificates, permits, franchises, rights,
code approvals and private product approvals (collectively, "Permits") held by
the Company. The Seller has made each such Permit available for review by the
Purchaser. There are no material Permits that the Company does not have, whether
federal, state, local or foreign, which are necessary for the lawful operation
of the Business of the Company as presently conducted.
SECTION 4.18 Backlog. The Seller has made available for review by the
Purchaser and its representatives an accurate accounting of all customer orders
of the Company which constitute backlog ("Backlog") as of February 28, 1999 and
the dollar amount represented by such orders. Except as set forth on Schedule
4.18, none of the Backlog orders have been canceled and, to the knowledge of the
Seller, there are no threats of cancellation with respect to the Backlog orders.
SECTION 4.19 Litigation. Except as disclosed on Schedule 4.19, there
are no claims pending or, to the knowledge of the Seller, threatened against or
affecting the Company, or any of its officers, directors, managers or employees
in their capacity as such, or any of the properties or Business of the Company.
Schedule 4.19 sets forth each instance in which the Company (i) is subject to
any unsatisfied judgment, order, decree, stipulation, injunction, or charge or
(ii) is a party to any charge, complaint, action, suit, proceeding, hearing, or
investigation of or in any court or quasi-judicial or administrative agency of
any federal, state, local, or foreign jurisdiction.
SECTION 4.20 Labor Matters. Schedule 4.20 contains a true, complete and
accurate list of the names, titles, annual compensation and all bonuses and
similar payments made for the last completed fiscal year for all directors,
officers and employees of the Company whose annual compensation, including any
bonuses, equals or exceeds $50,000. To the knowledge of the Seller, no key
employee or group of employees has any plans to terminate employment with the
Company during the next 12 months. The Company has complied in all material
respects with all applicable foreign, federal and state laws relating to
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the employment of labor including the provisions thereof relating to wages,
hours, collective bargaining and the payment of social security and other Taxes
and the Company is not liable for any arrears of wages or any Tax or any penalty
for failure to comply with any of the foregoing. There are no material
controversies pending or threatened between the Company and its employees.
Except as set forth on Schedule 4.20, there are no collective bargaining
agreements currently binding on or being negotiated with respect to the business
of the Company. There are no pending petitions by labor unions to the National
Labor Relations Board for certification as representative of any employees of
the Company. The Company has not experienced any strikes, grievances, claims of
unfair labor practices or lockouts within the last three years.
SECTION 4.21 Product Warranty. Except as disclosed on Schedule 4.21,
substantially all of the products manufactured, sold, leased, or delivered by
the Company have been in conformity in all material respects with all applicable
contractual commitments and all express and implied warranties. The Liability of
the Company for replacement or repair thereof or other damages in connection
therewith for products manufactured, sold, leased, or delivered by the Company
in any fiscal year prior to the Closing will not exceed $250,000. No product
manufactured, sold, leased, and delivered by the Company is subject to any
express guaranty, warranty or other indemnity beyond the applicable standard
terms and conditions of sale or lease. Schedule 4.21 includes copies of the
standard terms and conditions of sale or lease for the Company (containing
applicable guaranty, warranty, and indemnity provisions).
SECTION 4.22 Product Liability. Except as disclosed in Schedule 4.22,
the Company has no material Liability arising out of any injury to individuals
or property as a result of the ownership, possession, or use of any product
manufactured, sold, leased, or delivered by the Company.
SECTION 4.23 Year 2000. Except as disclosed in Schedule 4.23, the
Company's computer systems and embedded technology, including all applicable
hardware and software, are Year 2000 Ready and the failure of the foregoing to
be Year 2000 Ready shall not materially and adversely affect the performance of
the Company.
SECTION 4.24 Customers, Suppliers and Products. Since October 31, 1998,
there has not been any material change in the business relationship, and there
has been no material dispute, between the Company and any Major Customer or
Major Supplier, and, to the knowledge of the Seller, no Major Customer or Major
Supplier has stated that it intends to reduce its purchases from, or sales to,
the Company. Since October 31, 1998, there have been no material decreases in
the profit margins on any Major Product. To the knowledge of the Seller, no
Major Customer or Major Supplier intends to terminate its business relationship
with the Company as a result of the transactions contemplated by this Agreement.
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SECTION 4.25 Brokers. The Seller has used no broker or finder in
connection with the transactions contemplated hereby, and neither the Purchaser
nor any Affiliate of the Purchaser has or shall have any liability or otherwise
suffer or incur any Adverse Consequences as a result of or in connection with
any brokerage or finder's fee or other commission of any Person retained by
Purchaser in connection with any of the transactions contemplated by this
Agreement.
SECTION 4.26 Accuracy of Statements. No representation or warranty by
the Seller contained in this Agreement 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 therein or herein not misleading,
when all are taken together as a whole (it being understood that, in the event
of any inconsistency between this Agreement and any other writings, this
Agreement shall control). The Seller knows of no information or fact which has
or would have a Material Adverse Effect on the financial condition, business or
business prospects of the Company which has not been disclosed to Purchaser.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Purchaser represents and warrants to the Seller that:
SECTION 5.1 Due Incorporation. The Purchaser is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware with all requisite power and authority to own and operate
its assets and properties as they are now being owned and operated.
SECTION 5.2 Due Authorization. Purchaser has full power and authority
to enter into this Agreement and its Related Agreements and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance by Purchaser of this Agreement and its Related Agreements have been
duly and validly approved by the managing member of Purchaser and no other
actions or proceedings on the part of the Purchaser is necessary to authorize
this Agreement, its Related Agreements and the transactions contemplated hereby
and thereby. Purchaser has duly and validly executed and delivered this
Agreement and has duly and validly executed and delivered (or prior to or at the
Closing will duly and validly execute and deliver) its Related Agreements. This
Agreement constitutes the legal, valid and binding obligation of Purchaser and
Purchaser's Related Agreements, upon execution and delivery by Purchaser, will
constitute legal, valid and binding obligations of Purchaser, in each case,
enforceable in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws in effect which affect the enforcement of
creditors' rights generally and by equitable principles.
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SECTION 5.3 Noncontravention. The execution, delivery and performance
by Purchaser of this Agreement and its Related Agreements will not (a) violate
any Law applicable to Purchaser; (b) except for any filings under the HSR Act,
require any filing or registration by Purchaser with, or consent or approval
with respect to Purchaser of, any Person; (c) violate or conflict with or result
in a breach or default under any Contract to which Purchaser is a party or by
which Purchaser or any of its assets or properties are bound; or (d) violate or
conflict with the Certificate of Formation or operating agreement of Purchaser.
SECTION 5.4 Brokers. Purchaser has no liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement, and none of the Seller, the
Company, nor any Affiliate of the Seller or the Company, has or shall have any
liability or otherwise suffer or incur any Adverse Consequences as a result of
or in connection with any brokerage or finder's fee or other commission of any
person retained by the Purchaser in connection with any of the transactions
contemplated by this Agreement.
ARTICLE VI
COVENANTS
SECTION 6.1 Access to Information and Facilities. From the date of this
Agreement to the Closing Date, the Seller and the Company shall give the
Purchaser and the Purchaser's representatives reasonable access during normal
business hours to the offices, facilities, books and records of the Company, and
shall make the officers and employees of the Company available to the Purchaser
and its representatives as the Purchaser and its representatives shall from time
to time reasonably request, in each case to the extent that such access and
disclosure would not obligate the Company to take any actions that would
unreasonably disrupt the normal course of its business or violate the terms of
any Contract to which the Company is bound or any applicable law or regulation.
The Purchaser and the Purchaser's representatives will not use any of the
confidential information that they receive from the Company except in connection
with this Agreement, and, if this Agreement is terminated for any reason
whatsoever, the Purchaser and the Purchaser's representatives will return to the
Company all tangible embodiments (and all summaries and copies, including
electronically stored information) of the confidential information that they
receive from the Company which are in its possession; provided, however, that
the Purchaser and the Purchaser's representatives shall not be responsible for
the confidentiality of any information (i) which, at the time of disclosure, is
available publicly, through no fault of the Purchaser (ii) which, after
disclosure, becomes available publicly through no fault of the Purchaser, or
(iii) which the Purchaser knew or to which the Purchaser had access prior to
disclosure. If, prior to the Closing, the Purchaser shall discover that any
representation or warranty made by the Seller in this Agreement is untrue or
incorrect, the Purchaser shall so notify the Seller promptly. The Purchaser
shall not be entitled to bring any claim for damages or
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indemnification against the Seller after the Closing by reason of the breach of
any representation or warranty if an executive officer of Xxxxxxx Products, Inc.
had actual knowledge that the Seller was in breach of such representation or
warranty on or before the Closing Date.
SECTION 6.2 Preservation of Business. From the date of this Agreement
until the Closing Date, the Company shall be operated in the Ordinary Course of
Business and consistent with past practice, and shall use commercially
reasonable efforts to preserve intact the present business organization and
personnel of the Company, preserve the business relationships of the Company
with other Persons material to the operation of the Company, and not permit any
action or omission which would cause any of the representations or warranties of
the Company contained herein to become inaccurate or any of the covenants of the
Company to be breached. Without limiting the generality of the foregoing, except
as set forth in Schedule 6.2, prior to the Closing the Company will not, without
the prior written consent of the Purchaser:
(a) incur any obligation or enter into any Contract which
either (i) requires a payment by any party in excess of, or a series of payments
which in the aggregate exceed, $50,000, or (ii) has a term of, or requires the
performance of any obligations by the Company over a period in excess of six
months;
(b) take any action, or enter into or authorize any Contract
or transaction, other than in the Ordinary Course of Business and consistent
with past practice and other than any transactions contemplated by this
Agreement;
(c) sell, transfer, convey, assign or otherwise dispose of any
of its material assets or properties, except for sales of inventory in the
Ordinary Course of Business;
(d) waive, release or cancel any claims against third parties
or debts owing to the Company, or any rights which have any value;
(e) make any changes in its accounting systems, policies,
principles or practices;
(f) enter into, authorize, or permit any transaction with the
Seller or any Affiliates of the Seller, or enter into any Contract relating to
compensation or benefits with any Person, or modify any compensation amounts or
levels of any officer or employee;
(g) make any borrowings, incur any debt, or assume, guarantee,
endorse (except for the negotiation or collection of negotiable instruments in
the Ordinary Course of Business and consistent with past practice) or otherwise
become liable (whether directly, contingently or otherwise) for the obligations
of any other Person, or make any payment or repayment in respect of any
indebtedness (other than trade payables and accrued expenses in the Ordinary
Course of Business and consistent with past practice);
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(h) make any loans, advances or capital contributions to, or
investments in, any other Person;
(i) enter into, adopt, amend or terminate any bonus, profit
sharing, compensation, termination, stock option, stock appreciation right,
restricted stock, performance unit, pension, retirement, deferred compensation,
employment, severance or other employee benefit agreements, trusts, plans, funds
or other arrangements for the benefit or welfare of any director, manager,
officer or employee, or increase in any manner the compensation or fringe
benefits of any director, manager, officer or employee or pay any benefit not
required by any existing plan and arrangement or enter into any Contract to do
any of the foregoing;
(j) acquire, lease or encumber any assets outside the Ordinary
Course of Business or any assets which are material to the Company;
(k) authorize or make any capital expenditures which
individually or in the aggregate are in excess of $50,000;
(l) make any Tax election or settle or compromise any federal,
state, local or foreign income Tax liability, or waive or extend the statute of
limitations in respect of any such Taxes;
(m) pay any amount, perform any obligation or agree to pay any
amount or perform any obligation, in settlement or compromise of any suits or
claims of Liability against the Company or any of its directors, managers,
officers, employees or agents;
(n) terminate, modify, amend or otherwise alter or change any
of the terms or provisions of any Contract, or pay any amount not required by
Law or by any Contract; or
(o) other than overnight deposits or money market instruments
and investments existing on the date hereof, make any investments with cash or
the proceeds of existing investments.
SECTION 6.3 Exclusivity. Prior to the Closing or termination of this
Agreement, neither the Seller nor the Company nor any of their respective
Affiliates, officers, directors, employees, representatives or agents will (i)
solicit, initiate, or encourage the submission of any proposal or offer from any
Person relating to the acquisition of any capital stock or other voting
securities, or any substantial portion of the assets, of the Company (including
any acquisition structured as a merger, consolidation, or share exchange) or
(ii) participate in any discussions or negotiations regarding, furnish any
information with respect to, assist or participate in, or facilitate in any
other manner any effort or attempt by any Person to do or seek any of the
foregoing. The Seller will notify the Purchaser immediately if any Person makes
any proposal or offer with respect to any of the foregoing.
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SECTION 6.4 Efforts. Subject to the terms and conditions hereof, each
party hereto shall use all reasonable efforts to consummate the transactions
contemplated hereby as promptly as practicable.
(a) The Seller and the Purchaser will as promptly as
practicable file with the Department of Justice the notification and report
forms required by the HSR Act for the transactions contemplated hereby and any
supplemental information that may be reasonably requested by the Department of
Justice or the Federal Trade Commission in connection therewith. The Seller and
the Purchaser shall cooperate with each other and shall use their reasonable
efforts to obtain all consents required by the Department of Justice. The
Purchaser shall pay the costs of obtaining such consents and the Purchase Price
shall be reduced by $22,500, representing the Seller's proportionate share of
such costs.
(b) The Seller and the Purchaser will, as promptly as
practicable (i) make the required filings with, and take all reasonable steps to
obtain all other required authorizations, approvals, consents and other actions
of, Authorities and (ii) take all reasonable steps (not including the
expenditure of money or the payment or delivery of other consideration) to
obtain all other Required Consents of other Persons with respect to the
transactions contemplated hereby.
SECTION 6.5 Discharge of Liens, etc. Prior to or as of the Closing
Date, the Seller shall cause all Liens affecting the Company or any of the
assets of the Company, other than Permitted Liens to be discharged and
extinguished.
SECTION 6.6 Maintenance of Insurance. The Company will continue to
carry its existing insurance through the Closing Date, and shall not allow any
breach, default or cancellation (other than expiration and replacement of
policies in the ordinary cause of business) of such insurance policies or
agreements to occur or exist.
SECTION 6.7 Notice and Supplemental Information.
(a) The Seller and the Purchaser shall each give prompt notice
to the other parties of any material adverse development causing a breach of any
of its own representations and warranties in Articles IV and V respectively. No
disclosure by any party under this Section 6.7(a), however, shall be deemed to
amend or supplement any of the schedules or to prevent or cure any
misrepresentation or breach of covenant unless the schedules are amended or
supplemented pursuant to Section 6.7(b).
(b) The Seller will, from time to time, as necessary, prior to
or at the Closing, by notice in accordance with the terms of this Agreement,
supplement or amend the schedules, including one or more supplements or
amendments to correct any matter which would constitute a breach of any
representation, warranty, agreement or covenant contained herein. Except with
respect to information relating to the representations and warranties contained
in Sections 4.1, 4.2 and 4.25, the information provided pursuant to this Section
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6.7(b) will be deemed to have amended the relevant schedule, to have qualified
the representations and warranties contained in Article IV, and to have cured
any misrepresentation or breach of warranty that otherwise might have existed
under this Agreement in the absence of the disclosure of the supplementary
information and amendment of the schedules. Except with respect to information
relating to the representations and warranties contained in Sections 4.1, 4.2,
and 4.26, the information provided pursuant to this Section 6.7(b) will be
deemed to have amended the relevant schedule, to have qualified the
representations and warranties contained in Article IV, and to have cured any
misrepresentation or breach of warranty that otherwise might have existed under
this Agreement in the absence of the disclosure of the supplementary information
and amendment of the schedules. If, in the opinion of the Purchaser, such
supplement or amendment to the schedules would materially and adversely affect
the Business being acquired or the transactions contemplated by this Agreement,
the Purchaser may exercise its rights under Section 9.1(d) to terminate this
Agreement.
SECTION 6.8 Post-Closing Access and Cooperation. The Purchaser, after
the Closing Date, will (a) follow the Seller's record-retention policies and (b)
afford the Seller and its representatives reasonable access during normal
business hours to the offices, facilities, books, records, officers and
employees of the Purchaser to the extent reasonably requested by such Persons to
the extent such access does not disrupt the operation of the business of the
Purchaser. Without limiting the generality of the foregoing, the Purchaser will
cooperate with the Seller in the defense of any litigation (including, without
limitation, making personnel available for purposes of trial preparation and
testimony) and providing information requested by any such Person for the
preparation of any such Person's Tax Returns. The Purchaser shall not destroy
any Company records which are acquired hereunder so long as such records are
required to be maintained by applicable law.
SECTION 6.9 Public Announcements. The Seller and the Purchaser will
consult with each other before issuing any press release or otherwise making any
public statements with respect to the transactions contemplated by this
Agreement and no party shall, without the prior written consent of the others,
issue any such press release or make any such public statement, except as may be
required by applicable law or by the New York Stock Exchange.
SECTION 6.10 Consistent Tax Reporting. The Seller and Purchaser shall
treat and report the transactions contemplated by this Agreement in all respects
consistently for purposes of any federal, state or local tax. The parties hereto
shall not take any actions or positions inconsistent with the obligations or
agreements set forth herein, including without limitation, the allocation of the
Purchase Price and Assumed Liabilities set forth on Schedule 3.3.
SECTION 6.11 Interim Financial Statements. The Company agrees to
provide to the Purchaser as soon as practicable after the end of each calendar
month operating statements of the Company, consisting of a statement of
operating investment as of the end of such month,
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and statements of operating income, operating cash flow and EBITDA for that
month and for the portion of the year then ended.
SECTION 6.12 Environmental Audit. The Seller, with the cooperation and
assistance of the Purchaser, shall prepare an audit (the "Environmental Audit")
providing environmental assessments of the real property and facilities owned,
leased or operated by the Company. The Purchaser shall provide the Seller with
copies of all environmental reports prepared by Purchaser's environmental
consultants to assist in the preparation of the Environmental Audit.
SECTION 6.13 Transition. The Seller will not take any action that is
designed or intended to have the effect of discouraging any lessor, licensor,
customer, supplier, or other business associate of the Company from maintaining
the same business relationships with the Purchaser after the Closing as it
maintained with the Company prior to the Closing. For one year after the
Closing, the Seller will refer all customer inquiries relating to the Business
of the Company to the Purchaser.
SECTION 6.14 Confidentiality. The Seller will treat and hold as such
all of the confidential information of the Purchaser, refrain from using any of
the confidential information of the Purchaser except in connection with this
Agreement, and, in the event of a Closing, deliver promptly to the Purchaser or
destroy, at the request and option of the Purchaser, all tangible embodiments
(and all copies) of the confidential information of the Purchaser which are in
its possession. In the event that the Seller is requested or required (by oral
question or request for information or documents in any legal proceeding,
interrogatory, subpoena, civil investigative demand, or similar process) to
disclose any confidential information of the Purchaser, the Seller will notify
the Purchaser promptly of the request or requirement so that the Purchaser may
seek an appropriate protective order or waive compliance with the provisions of
this Section 6.14. If, in the absence of a protective order or the receipt of a
waiver hereunder, a party is, on the advice of counsel, compelled to disclose
any confidential information of the Purchaser to any tribunal or else stand
liable for contempt, the Seller may disclose the confidential information of the
Purchaser to the tribunal; provided, however, that the Seller shall use its
reasonable best efforts to obtain, at the request of the Purchaser, an order or
other assurance that confidential treatment will be accorded to such portion of
the confidential information of the Purchaser required to be disclosed as the
Purchaser shall designate. The foregoing provisions shall not apply to any
information (i) which, at the time of disclosure, is available publicly, through
no fault of the Seller, or (ii) which, after disclosure, becomes available
publicly through no fault of the Seller.
SECTION 6.15 Noncompetition; Nonsolicitation.
(a) The Seller acknowledges that it has a special knowledge of
the Business and the proprietary and Confidential Information included in the
Business, and that the Purchaser is making a considerable investment in the
Business from which the Seller has
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benefitted. In consideration of this Agreement and such investment and benefit,
and as an inducement to the Purchaser to enter into this Agreement and
consummate the transactions contemplated herein, the Seller agrees that, for a
period of four years after the Closing Date, it will not, directly or
indirectly, own, manage, operate, control or participate in the ownership,
management, operation or control of, or be connected as partner, or otherwise
have any financial interest in, or aid or assist anyone else in the conduct of,
any business that directly or indirectly designs, manufactures and/or
distributes (i) traffic marking coatings, or (ii) any products used in the
application of local striping or other traffic marking coatings (a "Competitive
Business"); provided, however, that the Seller may own less than 1% of any
outstanding class of securities registered pursuant to the Securities Exchange
Act of 1934, as amended, of an issuer that is a Competitive Business.
(b) For a period of four years following the Closing Date, the
Seller covenants that it will not, without the express prior written approval of
the Board of Directors of the Purchaser, directly or indirectly recruit, solicit
or otherwise induce or influence any sales agent, joint venturer, lessor,
supplier, agent, representative or any other person that has or had during the
one year period initially preceding the Closing Date a business relationship
with the Company other than as an employee, to discontinue, reduce or adversely
modify such employment, agency or business relationship with the Purchaser as it
relates to the Business as conducted by the Purchaser after the Closing Date.
(c) For a period of four years following the Closing Date, the
Seller will not without the express prior written approval of the Board of
Directors of the Purchaser, directly or indirectly, recruit, solicit or
otherwise induce or influence any customer of the Purchaser to discontinue,
reduce or modify such business relationship with the Purchaser.
(d) Notwithstanding anything to the contrary set forth in this
Section 6.15, the Purchaser expressly acknowledges that the Seller has entered
into a Merger Agreement with Rohm and Xxxx Company pursuant to which a
subsidiary of Rohm and Xxxx will acquire a majority of the outstanding stock of
Seller which subsidiary will then be merged into Seller. Nothing contained in
this Section 6.15 shall restrict Rohm and Xxxx or any subsidiary or affiliate of
Rohm and Xxxx, other than Seller and subsidiaries of Seller, from engaging in
the business of supplying raw materials or other components used in the
manufacture of traffic markings in the ordinary course of business. Except as
otherwise provided in this Section 6.15(d), Rohm and Xxxx shall be subject to
the provisions of this Section 6.15.
(e) Except in connection with the transactions contemplated
hereby, for a period of six (6) months following the Closing Date, neither the
Seller nor the Purchaser shall employ or seek to employ any person or agent who
is employed or retained, as of the Closing Date, (i) by the Purchaser, in the
case of the Seller or the Company or (ii) by the Seller, in the case of the
Purchaser. The provisions of this Section 6.15(e) shall not be applicable in the
case of any employee who is laid off by the Purchaser for economic or budgetary
reducing purposes.
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(f) The Seller, the Company and the Purchaser agree that the
violation or threatened violation of any of the provisions of this Section 6.15
shall cause immediate and irreparable harm to the non-breaching party and that
the damage to the non-breaching party will be difficult or impossible to
calculate with precision. Therefore, in the event that any party violates this
Section 6.15, an injunction restraining the breaching party from such violation
may be entered against the breaching party in addition to any other relief
available to the non-breaching party.
(g) If, at the time of enforcement of any provision of this
Section 6.15, a court shall hold that the duration, scope or other restrictions
stated herein are unreasonable under circumstances then existing, the parties
agree that the maximum duration, scope or other restrictions reasonable under
such circumstances shall be substituted for the stated duration, scope or other
restrictions and that the court shall be allowed to revise the restrictions
contained herein to cover the maximum period, scope and other restrictions
permitted by law.
SECTION 6.16 Business Name. For a period of one year after the Closing
Date, the Purchaser and its Affiliates shall be permitted to use the name
"Xxxxxx" in connection with the Acquired Assets and the Business being purchased
hereunder to the extent necessary to exhaust supplies of products, literature
and signage acquired hereunder.
SECTION 6.17 Proration of Real Estate and Personal Property Taxes;
Transfer, Sales and Use Taxes.
(a) All real estate and personal property Taxes relating to
the Acquired Assets which shall have accrued and become payable prior to the
Closing Date shall be paid by the Company. All such Taxes which shall be accrued
but unpaid shall be prorated to the Closing Date. In connection with such
proration of Taxes, in the event that actual Tax figures are not available at
the Closing Date, proration of Taxes shall be based upon 105% of the actual
Taxes for the preceding year for which actual Tax figures are available. The
amount due one party as a result of such proration shall be paid to the other
party at the Closing.
(b) Any transfer Taxes payable as a result of the transactions
contemplated hereby will be paid by the party upon which the Tax is imposed by
the applicable law or ordinance. The Purchaser shall pay all sales and use Taxes
due as a result of the transactions contemplated hereby and the Purchase Price
shall be reduced by 50% of such Taxes due, representing the Seller's
proportionate share of such Taxes.
SECTION 6.18 Transferred Employees.
(a) Purchaser will offer employment to such active employees
of the Company as Purchaser shall decide. Each such employee who accepts
Purchaser's offer of employment shall be a "Transferred Employee" upon the later
of the Closing Date or the date on which the Transferred Employee begins
employment with the Purchaser.
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(b) Effective as of the date that a person becomes a
Transferred Employee, each Transferred Employee shall cease to be covered by
Seller's or the Company's Employee Welfare Benefit Plans. Seller shall retain
responsibility for all claims incurred under the Employee Welfare Benefit Plans
by such employees prior to the date they become Transferred Employees. Seller
shall retain any obligation for payment of long or short-term disability claims
arising from disabilities of such employees, or workers compensation claims of
such employees that occurred prior to the Closing Date. For purposes of this
paragraph, a claim shall be deemed to have been incurred when the medical or
other service giving rise to the claim is performed, except that disability and
workers compensation claims shall be deemed to have been incurred on the date
the employee becomes disabled or injured.
(c) Seller shall retain responsibility for COBRA beneficiaries
under the Employee Welfare Benefit Plans as well as any retiree medical benefit
obligation the Seller has to the Transferred Employees.
(d) Seller shall provide all reasonable assistance to
Purchaser in making direct rollovers to Purchaser's 401(k) plan on behalf of the
Transferred Employees.
(e) In order to induce employees of the Company to remain in
the Company's employ and assist in implementing a smooth transition in the
ownership of the Company, the Seller has entered into agreements with the
employees of the Company for separation allowances and retention bonuses. The
retention bonuses will be payable by the Seller to designated employees of the
Company who are offered employment by the Purchaser and who are retained in the
employ of the Purchaser for at least six months after the Closing Date. The
Purchaser shall assume all obligations of the Seller with respect to the payment
of separation allowances earned by employees of the Company (a) who are
relocated by the Purchaser, (b) whose employment is terminated by the Purchaser
for reasons other than cause, or (c) whose wage rate or salary is reduced by the
Purchaser below his or her wage rate or salary as of the Closing Date, in each
case within six months after the Closing Date.
SECTION 6.19 Post-Closing Covenants. The Seller and the Purchaser agree
as follows with respect to the period following the Closing:
(a) In case at any time after the Closing any further action
is necessary or desirable to carry out the purposes of this Agreement, each of
the parties will take such further action (including the execution and delivery
of such further instruments and documents) as any other party hereto reasonably
may request, all at the sole cost and expense of the requesting party (unless
the requesting party is entitled to indemnification therefor under Article X).
From and after the Closing, the Purchaser will be entitled to access all
documents, books, records, agreements, and financial data of any sort relating
to the Company upon reasonable advance notice.
(b) In the event and for so long as any party hereto actively
is contesting or defending against any charge, complaint, action, suit,
proceeding, hearing, investigation,
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claim, or demand in connection with (i) any transaction contemplated under this
Agreement or (ii) any fact, situation, circumstance, status, condition,
activity, practice, plan, occurrence, event, incident, action, failure to act,
or transaction on or prior to the Closing Date involving the Company, each of
the other parties hereto will cooperate with it and its counsel in the contest
or defense, make available their personnel, and provide such testimony and
access to their books and records as shall be necessary in connection with the
contest or defense, all at the sole cost and expense of the contesting or
defending party (unless the contesting or defending party is entitled to
indemnification therefor under Article X).
(c) In regard to all matters disclosed on Schedule 4.16 or as
set forth on the Environmental Audit, as between Seller and Purchaser, Seller
hereby agrees and covenants that Seller will be responsible, at its sole cost
and expense, for all investigations, studies, cleanup, corrective action,
response or remedial action required under applicable Environmental Law by any
Authority now or hereafter authorized to regulate environmental matters, or by
any consent decree, court or administrative order or Environmental Law, now or
hereafter in effect ("Environmental Post Closing Covenant Matters"). This
covenant shall survive the Closing and continue in full force and effect until
the expiration of any applicable statute of limitations (including any
extensions and waivers thereof).
As between Seller and Purchaser, Seller shall have the primary
responsibility and right to provide information to and negotiate with
Authorities and to implement all investigations and any environmental cleanup,
remediation, or other activities relating to the Environmental Post Closing
Covenant Matters. Purchaser hereby grants to Seller and Seller's agents a right
of entry upon the facilities to permit the implementation and fulfillment of
Seller's covenants hereunder, provided, however, that Seller hereby agrees (i)
to hold harmless, defend and indemnify Purchaser from and against all Adverse
Consequences caused by Seller's exercise of the right of entry herein granted
except for Adverse Consequences caused by the Purchaser's own negligence and
(ii) Seller shall not permit any damage, nuisance, or waste on the Owned Real
Property and Seller shall conduct its operation on the Owned Real Property in a
manner reasonably satisfactory to Purchaser. Purchaser shall have the right to
participate in any conversations or meetings with Authorities relevant to the
investigation or remediation of the Environmental Post Closing Covenant Matters.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER
The obligations of the Purchaser to effect the transactions
contemplated by this Agreement are subject to the satisfaction or written waiver
by the Purchaser of the following conditions precedent on or before the Closing
Date:
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SECTION 7.1 Warranties True as of Both Present Date and Closing Date.
The representations and warranties of the Seller in Article IV herein shall have
been accurate, true and correct in all material respects on and as of the date
of this Agreement and shall also be accurate, true and correct in all material
respects on and as of the Closing Date with the same force and effect as though
made on and as of the Closing Date; provided, that any representation or
warranty which is by its terms qualified by materiality shall be accurate, true
and correct in all respects.
SECTION 7.2 Compliance with Agreements and Covenants. The Seller and
the Company shall have performed and complied in all material respects with all
of the covenants, obligations and agreements contained in this Agreement to be
performed and complied with by the Seller or the Company on or prior to the
Closing Date; provided, that any covenant which is by its terms qualified by
materiality shall have been performed and complied in all respects.
SECTION 7.3 Execution of Related Agreements. All of the Related
Agreements shall have been duly executed by all of the relevant parties and
shall be effective as of the Closing Date.
SECTION 7.4 Compliance with HSR Act. In the reasonable opinion of the
Purchaser, the parties shall have complied with all applicable provisions of the
HSR Act and of the regulations interpreting that Act, and any "waiting periods"
applicable to the transaction contemplated by this Agreement which are imposed
by the HSR Act shall have expired prior to the Closing Date or shall have been
terminated by the appropriate Authority.
SECTION 7.5 Required Consents. All Required Consents shall have been
obtained.
SECTION 7.6 Financial Condition at Closing. All of the following
financial conditions shall exist at Closing:
(a) The Company shall not have any outstanding indebtedness.
The term "indebtedness" shall include notes payable and the short-term and
long-term portions of any and all indebtedness for borrowed money or other
obligations, including capitalized lease obligations, including accrued
interest, fees and prepayment penalties with respect thereto, all as determined
in accordance with GAAP. In the event there is outstanding indebtedness, the
Purchase Price shall be reduced by the amount of such indebtedness as provided
in Section 2.3.
(b) The minimum level of working capital of the Company shall
be at least $9.6 million. The term "working capital" shall be defined as
accounts receivable plus inventory less accounts payable excluding any year end
adjustments for current liabilities (to the extent not included in Section
7.6(a)), all as determined in accordance with GAAP. In the event the working
capital of the Company is less than $9.6 million, the Purchase Price shall be
reduced by the amount of such difference as provided in Section 2.4.
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SECTION 7.7 No Prohibition. No Law or injunction shall have been
adopted, promulgated or entered by any Authority which prohibits the
consummation of the transactions contemplated hereby.
SECTION 7.8 Litigation. No action, suit, or proceeding shall be pending
or, to the knowledge of the Seller, threatened before any court or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (i) prevent consummation of any
of the transactions contemplated by this Agreement, (ii) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, (iii) affect adversely the right of the Purchaser to own the
Acquired Assets, or (iv) affect materially and adversely the right of the
Company to own its assets and to operate the Business (and no such injunction,
judgment, order, decree, ruling, or charge shall be in effect).
SECTION 7.9 No Material Adverse Change. There shall not have occurred
any material adverse change (taken together with all other developments) since
the date of this Agreement in the business, operations, assets, results and
condition (financial and other) or prospects of the Company.
SECTION 7.10 Real Property Matters. (a) Purchaser shall have received a
commitment or commitments for title insurance policies (the "Title Commitment")
from a title insurance company or companies of Purchaser's choice (the "Title
Company") insuring Purchaser's fee simple ownership of the Owned Real Property
and Purchaser's leasehold interest in the Leased Real Property, subject only to
exceptions acceptable to Purchaser and containing reasonable endorsements that
customarily are issued by title insurance companies in transactions of this
kind. Purchaser shall pay the search charges, copying charges and title
insurance premium associated with the Title Commitment.
(b) Purchaser, at the Purchaser's sole expense, shall have
received a Survey or Surveys of the Owned Real Property and the Leased Real
Property acceptable to Purchaser.
(c) Purchaser shall have received special warranty deeds for
the transfer of the Owned Real Property and lease assignments for the Leased
Real Property.
SECTION 7.11 Environmental Audit. The Purchaser shall have received,
and shall be reasonably satisfied with the results of, the Environmental Audit.
SECTION 7.12 Schedules. The Purchaser shall be reasonably satisfied
with the schedules prepared by the Seller.
SECTION 7.13 Discharge of Liens. The Company shall have caused all
Liens on the Acquired Assets, other than Permitted Liens, to be discharged and
extinguished.
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SECTION 7.14 Employment Agreement. The Purchaser and Xxxxxx Xxxxxxx
shall have entered into the Employment Agreement.
SECTION 7.15 Contracts. None of the material Contracts entered into by
any of the Company shall be breached or subject to termination, modification or
change as a result of the transactions contemplated by this Agreement, and none
of the customers of the Company shall have stated or indicated their
determination or intention to reduce or otherwise adversely change their orders
or business.
SECTION 7.16 FIRPTA Certificate. Purchaser shall have received from the
Seller a duly executed certificate in the form specified by Treasury Regulation
ss.1.1445-2(b)(2).
SECTION 7.17 Authorization. All corporate action necessary by the
Seller to authorize the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby shall have been
duly and validly taken.
SECTION 7.18 Documents. The Purchaser shall have received in form and
substance satisfactory to it:
(a) A certificate of the Seller substantially to the effect
set forth in Sections 7.1 and 7.2 with respect to the representations,
warranties, agreements and covenants of the Seller and the Company;
(b) The Certificate of Incorporation of the Seller certified
by the Secretary of State of the State of Indiana, the By-laws of the Seller and
the resolutions of the Board of Directors of the Seller authorizing the
execution and delivery of this Agreement and the transactions contemplated
hereby, certified by the secretary, assistant secretary or equivalent Person of
the Seller (together with an incumbency certificate regarding the officer(s)
signing on behalf of the Seller);
(c) Certificate of Good Standing for the Seller from the
Secretary of State of the State of Indiana; and
(d) An opinion dated the Closing Date, of Xxxxx X. Xxx, Vice
President, Legal Affairs, Group Counsel, Xxxxxx Coatings, in substantially the
form attached hereto as Exhibit E.
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ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligations of the Seller at Closing under Article II of this
Agreement are subject to the satisfaction or written waiver by the Seller of the
following conditions precedent on or before the Closing Date:
SECTION 8.1 Warranties True as of Both Present Date and Closing Date.
The representations and warranties of the Purchaser contained in Article V
herein shall have been accurate, true and correct on and as of the date of this
Agreement and as of the Closing Date, in all material respects.
SECTION 8.2 Compliance with Agreements and Covenants. The Purchaser
shall have performed and complied with all of its covenants, obligations and
agreements contained in this Agreement to be performed and complied with by it
on or prior to the Closing Date, in all material respects.
SECTION 8.3 Execution of Related Agreements. All of the Related
Agreements shall have been duly executed by all of the relevant parties and
shall be effective as of the Closing Date.
SECTION 8.4 Compliance with HSR Act. In the reasonable opinion of the
Seller, the parties shall have complied with all applicable provisions of the
HSR Act and the regulations interpreting that Act, and any "waiting periods"
applicable to the transaction contemplated by this Agreement which are imposed
by the HSR Act shall have expired prior to the Closing Date or shall have been
terminated by the appropriate Authority.
SECTION 8.5 No Prohibition. No law or injunction shall have been
adopted, promulgated or entered by any Authority which prohibits the
consummation of the transactions contemplated hereby.
SECTION 8.6 Litigation. No action, suit, or proceeding shall be pending
or threatened before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator wherein
an unfavorable injunction, judgment, order, decree, ruling, or charge would (i)
prevent consummation of any of the transactions contemplated by this Agreement
or (ii) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation (and no such injunction, judgment, order,
decree, ruling, or charge shall be in effect).
SECTION 8.7 Environmental Audit. The Seller shall be reasonably
satisfied with the results of the Environmental Audit.
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SECTION 8.8 Authorization. All action necessary by the Purchaser to
authorize the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby shall have been duly and
validly taken.
SECTION 8.9 Documents. The Company shall have received, in form and
substance satisfactory to the Company:
(a) A certificate, dated the Closing Date, of an officer of
the Purchaser substantially to the effect set forth in Sections 8.1 and 8.2;
(b) A certificate of the secretary, assistant secretary or
equivalent Person of the Purchaser certifying resolutions of the managing member
of the Purchaser approving and authorizing the execution, delivery and
performance of this Agreement and its Related Agreements and the consummation of
the transactions contemplated hereby and thereby (together with an incumbency
certificate regarding the officer(s) signing on behalf of the Purchaser);
(c) The Certificate of Formation of the Purchaser certified by
the Secretary of the State of Delaware, the operating agreement of the Purchaser
and the resolutions of the managing member of the Purchaser authorizing the
execution and delivery of this Agreement and the transactions contemplated
hereby, certified by the secretary, assistant secretary or equivalent Person of
the Purchaser;
(d) Certificate of Good Standing for the Purchaser from the
Secretary of State of the State of Delaware; and
(e) An opinion, dated the Closing Date, of Xxxxx, Xxxxx &
Xxxxx, counsel for the Purchaser, in substantially the form attached hereto as
Exhibit F.
ARTICLE IX
TERMINATION
SECTION 9.1 Termination. This Agreement may be terminated at any time
on or prior to the Closing Date:
(a) with the mutual consent of the Seller and the Purchaser;
(b) by written notice from the Seller or the Purchaser to the
other if the Closing shall not have taken place on or before June 30, 1999;
provided, however, that the right to terminate this Agreement under this Section
9.1(b) shall not be available to any party whose failure to perform any
obligation under this Agreement has been the cause of or resulted in the failure
of the Closing to occur on or before such date, or
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(c) by written notice from the Seller or the Purchaser to the
other (i) in the event the other party has breached any material representation,
warranty, or covenant contained in this Agreement in any material respect, one
of the non-breaching parties has notified the breaching party of the breach, and
the breach has continued without cure for a period of 15 days after such notice,
or (ii) if any court of competent jurisdiction or other governmental body shall
have issued an order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated
hereby and such order, decree, ruling or other action shall have become final
and nonappealable.
(d) by written notice from the Purchaser to the Seller in the
event that any supplement or amendment to the schedules hereto shall, in the
opinion of the Purchaser, materially and adversely affect the Business being
acquired or the transactions contemplated by this Agreement.
SECTION 9.2 Effect of Termination.
(a) If this Agreement is terminated pursuant to Section 9.1,
all obligations of the parties hereunder (except for the obligations set forth
in Section 10.1, which shall survive the termination of this Agreement) shall
terminate without liability of any party (or any stockholder, member, Affiliate,
director, manager, officer, employee, agent, consultant or representative of
such party) to any other party, except that no such termination shall relieve
any party from liability for any willful breach of this Agreement prior to such
termination, and the willfully breaching party shall be fully liable for any and
all Adverse Consequences sustained or incurred by any other party from such
breach.
(b) If this Agreement is terminated, the Purchaser will return
to the Seller or destroy, at the request and option of the Seller, all tangible
embodiments (and all copies) of the confidential information of the Company
which are in the Purchaser's possession. In addition, if this Agreement is
terminated, the Purchase shall preserve the secrecy of all of the confidential
information of the Company that it has obtained, and it shall refrain from using
any of that confidential information. However, the preceding sentence shall not
apply to any information which is or becomes publicly available through no fault
on the part of the Purchaser.
ARTICLE X
SURVIVAL AND REMEDY; INDEMNIFICATION
SECTION 10.1 Survival. All of the terms and conditions of this
Agreement, together with the warranties, representations, agreements and
covenants contained herein or in any instrument or document delivered or to be
delivered pursuant to this Agreement, shall survive the execution of this
Agreement and the Closing Date, notwithstanding any
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investigation heretofore or hereafter made by or on behalf of any party hereto;
provided, however, that unless otherwise stated, the agreements and covenants
set forth in this Agreement shall survive and continue until all obligations set
forth therein shall have been performed and satisfied. Notwithstanding the
foregoing, (a) the representations and warranties of the Seller contained in
Sections 4.1, 4.2 and 4.26 of this Agreement and the representations and
warranties of the Purchaser contained in Article V of this Agreement shall
survive the Closing and continue in full force and effect indefinitely; (b) the
representations and warranties of the Seller contained in Sections 4.12 and 4.15
of this Agreement and the covenants of the Seller contained in Section 6.19(c)
of this Agreement shall survive the Closing and continue in full force and
effect until the expiration of any applicable statute of limitations (including
any extensions or waivers thereof); (c) the representations and warranties of
the Seller contained in Section 4.16 shall survive and continue in full force
and effect until the seventh anniversary of the Closing Date; and (d) all other
representations and warranties, and the related agreements of the Seller and the
Purchaser to indemnify each other set forth in this Article X, shall survive and
continue for, and all indemnification claims with respect thereto shall be made
prior to the second anniversary of the Closing Date, except for representations,
warranties and related indemnities for which an indemnification claim shall be
pending as of the end of the applicable period referred to above, in which event
such indemnities shall survive with respect to such indemnification claim until
the final disposition thereof (the "Indemnification Period").
SECTION 10.2 Indemnification by the Seller.
(a) In the event that, during the Indemnification Period there
is (i) a breach (or an alleged breach) of any of the representations or
warranties made by, or any breach of or failure to perform any covenant,
agreement or obligation of, the Seller or the Company in this Agreement, any
Related Agreement or contained in any exhibit or schedule to this Agreement,
(ii) any Liabilities (other than Assumed Liabilities), Adverse Consequences or
remediation, clean-up or similar obligations or costs under Environmental Laws
and relating to the Business and activities or the ownership, operation or lease
by the Company of facilities in respect of any periods prior to the Closing, and
(iii) any demand, assessment, judgment, cost and reasonable legal and other
expenses or other Adverse Consequences arising from, or in connection with, any
investigation, action, suit, proceeding or other claim incident to any of the
foregoing and, if there is an applicable survival period pursuant to Section
10.1, then, in each case, provided that the Purchaser makes a written claim for
indemnification against the Seller within such survival period, the Seller
agrees (subject to the limitations set forth in this Section 10.2), to indemnify
the Purchaser and its Affiliates, directors, officers, managers, members and
stockholders (collectively, the "Purchaser Group") from and against the entirety
of any Adverse Consequences the Purchaser Group may suffer through and after the
date of the claim for indemnification (including any Adverse Consequences the
Purchaser Group may suffer through and after the end of the applicable survival
period) resulting from, arising out of, or caused by any breach (or alleged
breach) of the foregoing; provided, however, that except for failure to perform
any of the Seller's
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covenants set forth in Section 6.19(c) of this Agreement or for breaches of the
representations and warranties contained in Sections 4.12, 4.15 and 4.16 of this
Agreement or as set forth in Section 10.2(b) of this Agreement, (A) the Seller
shall not have any obligation to indemnify the Purchaser Group from and against
any Adverse Consequences resulting from, arising out of, relating to, in the
nature of, or caused by any breach (or alleged breach) by the Company until the
Purchaser Group have suffered Adverse Consequences by reason of all such
breaches (or alleged breaches) in excess of a $380,000 aggregate threshold (at
which point the Seller will be obligated to indemnify the Purchaser Group from
and against all such Adverse Consequences) and (B) there will be a $3,800,000
aggregate ceiling on the obligation to indemnify the Purchaser Group from and
against Adverse Consequences resulting from, arising out of, or relating to, the
items identified in this Article X.
(b) Provided the Purchaser Group makes a written claim to the
Seller prior to the conclusion of the applicable Indemnification Period, the
Seller shall indemnify the Purchaser Group from and against the entirety of any
Adverse Consequences the Purchaser Group may suffer resulting from, arising out
of, relating to, in the nature of, or caused by any of the following:
(i) any Taxes of the Company with respect to any Tax year
or portion thereof ending on or before the Closing Date (or for any Tax
period beginning before and ending after the Closing Date to the extent
allocable to the portion of such period beginning before and ending on
the Closing Date);
(ii) any unpaid Taxes of any Person (other than the
Company) under Reg. ss.1.1502-6 (or any similar provision of state,
local, or foreign Law), as a transferee or successor, by Contract, or
otherwise;
(iii) any breach of or failure by the Seller to perform
any covenant, agreement or obligation of the Seller in this Agreement,
any Related Agreement, any agreement or instrument contemplated hereby,
any document relating hereto or thereto or contained in any exhibit or
schedule to this Agreement;
(iv) any claims by or Liabilities with respect to any
employee of the Company with respect to his or her employment or
termination of employment on or prior to the Closing Date by the
Company, including, without limitation, any and all worker's
compensation claims or Liabilities arising out of any accidents,
illness or other events which occurred on or prior to the Closing Date
or any Liability relating to any Employee Benefit Plan;
(v) any events or conditions in existence on or before
the Closing Date, whether related to the Owned Real Property, the
Leased Real Property or any other property, and arising out of (A) any
actual or alleged violation of Environmental Laws, (B) arising under
Environmental Laws relating to the Company or its facilities
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or its operations or (C) any pre-Closing arrangement for the treatment,
disposal or recycling of Hazardous Materials at property not owned or
leased by the Seller or the Company, including any investigating,
remedial or corrective obligations, including all matters set forth on
the Environmental Audit;
(vi) any Liabilities which are not Assumed Liabilities
(including any Liability of the Company that becomes a Liability of the
Purchaser under any doctrine of de facto merger or successor liability,
under Environmental Laws or otherwise by operation of Law);
(vii) any claims or Liabilities relating to any of the
matters set forth on Schedule 4.19; and
(viii) all demands, assessments, judgements, costs and
reasonable legal and other expenses arising from, or in connection
with, any investigation, action, suit, proceeding or other claim
incident to any of the foregoing in this Agreement.
SECTION 10.3 Indemnification by the Purchaser. The Purchaser Group
agrees to indemnify the Seller against, and agrees to hold it harmless from, any
and all Adverse Consequences incurred or suffered by it arising out of (i) any
breach of or any inaccuracy in any representation or warranty made by the
Purchaser pursuant to this Agreement or any Related Agreement, any agreement, or
instrument contemplated hereby, any document relating hereto or thereto or
contained in any exhibit or schedule to this Agreement; (ii) any breach of or
failure by the Purchaser to perform any agreement, covenant or obligation of the
Purchaser set out in this Agreement or any Related Agreement, any agreement, or
instrument contemplated hereby, any document relating hereto or thereto or
contained in any exhibit or schedule to this Agreement; and (iii) any acts or
omissions by the Purchaser and any obligations and liabilities in respect of the
Purchaser from and after the Closing Date.
SECTION 10.4 Third-Party Claims.
(a) If any third party shall notify any party (the
"indemnitee") with respect to any matter (a "Third Party Claim") which may give
rise to a claim for indemnification against any other party (the "indemnitor")
under this Section 10.4, then the indemnitee shall promptly notify each
indemnitor thereof in writing; provided, however, that no delay on the part of
the indemnitee in notifying any indemnitor shall relieve the indemnitor from any
obligation hereunder unless (and then solely to the extent) the indemnitor
thereby is prejudiced.
(b) Any indemnitor will have the right to defend the
indemnitee against the Third Party Claim with counsel of its choice reasonably
satisfactory to the indemnitee so long as (i) the indemnitor notifies the
indemnitee in writing within 15 days after the indemnitee has given notice of
the Third Party Claim that the indemnitor will indemnify the indemnitee from and
against the entirety of any Adverse Consequences the indemnitee may
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suffer resulting from, arising out of, relating to, in the nature of, or caused
by the Third Party Claim, (ii) the indemnitor provides the indemnitee with
evidence acceptable to the indemnitee that the indemnitor will have the
financial resources to defend against the Third Party Claim and fulfill its
indemnification obligations hereunder, (iii) the Third Party Claim involves only
money damages and does not seek an injunction or other equitable relief, (iv)
settlement of, or an adverse judgment with respect to, the Third Party Claim is
not, in the good faith judgment of the indemnitee, likely to establish a
precedential custom or practice materially adverse to the continuing business
interests of the indemnitee, and (v) the indemnitor conducts the defense of the
Third Party Claim actively and diligently.
(c) So long as the indemnitor is conducting the defense of the
Third Party Claim in accordance with Section 10.4(b) above, (i) the indemnitee
may retain separate co-counsel at its sole cost and expense and participate in
the defense of the Third Party Claim, (ii) the indemnitee will not consent to
the entry of any judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of the indemnitor, not to be
withheld unreasonably, and (iii) the indemnitor will not consent to the entry of
any judgment or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the indemnitee, not to be withheld
unreasonably.
(d) In the event any of the conditions in Section 10.4(b)
above is or becomes unsatisfied, however, (i) the indemnitee may defend against,
and consent to the entry of any judgment or enter into any settlement with
respect to, the Third Party Claim in any manner it reasonably may deem
appropriate (and the indemnitee need not consult with, or obtain any consent
from, any indemnitor in connection therewith), (ii) the indemnitors will
reimburse the indemnitee promptly and periodically for the costs of defending
against the Third Party Claim (including reasonable attorneys' fees and
expenses), and (iii) the indemnitors will remain responsible for any Adverse
Consequences the indemnitee may suffer resulting from, arising out of, relating
to, in the nature of, or caused by the Third Party Claim to the fullest extent
provided in this Section 10.4.
SECTION 10.5 Indemnification Limits. Indemnification claims shall be
reduced, by and to the extent, that an indemnitee shall be entitled to receive
proceeds under insurance policies, risk sharing pools, or similar arrangements
specifically as a result of, and in compensation for, the subject matter of an
indemnification claim by such indemnitee; provided, however, that
indemnification claims shall not be reduced by tax benefits, if any.
SECTION 10.6 Exclusive Remedy. The Purchaser and the Seller acknowledge
and agree that the indemnification provisions set forth above in this Article X
shall be the exclusive remedy of the parties with respect to any claim for an
alleged breach of any provisions of this Agreement.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Expenses. Each party hereto shall bear its own expenses
(including legal fees and expenses) with respect to this Agreement and the
transactions contemplated hereby.
SECTION 11.2 Limitation of Best Efforts. For purposes of this
Agreement, when an obligation is imposed upon a Person to use its "best efforts"
and/or "best efforts to cause", or words of similar import are used, they shall
not be required to pay or transfer any money, property or other thing of value
to any other party except nominal and routine charges for filing or recording
fees, and courier and other communication services.
SECTION 11.3 Amendment. This Agreement may be amended, modified or
supplemented but only in writing signed by each of the parties hereto.
SECTION 11.4 Notices. Any notice, request, instruction or other
document to be given hereunder by a party hereto shall be in writing and shall
be deemed to have been given, (a) when received if given in person or by courier
or a courier service, (b) on the date of transmission if sent by telex,
facsimile or other wire transmission or (c) three Business Days after being
deposited in the U.S. mail, certified or registered mail, postage prepaid:.
If to the Seller, addressed as follows:
Xxxxxx International, Inc.
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. XxXxxxx
Facsimile No.: (000) 000-0000
with a copy to:
XxXxxxx Xxxxx & Xxxxx
000 Xxxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
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If to the Purchaser, addressed as follows:
TMT-Pathway, L.L.C.
c/x Xxxxxxx Products, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxx
Facsimile No: (000) 000-0000
with a copy to:
Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.
SECTION 11.5 Waivers. The failure of a party hereto at any time or
times to require performance of any provision hereof shall in no manner affect
its right at a later time to enforce the same. No waiver by a party of any
condition or of any breach of any term, covenant, representation or warranty
contained in this Agreement shall be effective unless in writing, and no waiver
in any one or more instances shall be deemed to be a further or continuing
waiver of any such condition or breach in other instances or a waiver of any
other condition or breach of any other term, covenant, representation or
warranty.
SECTION 11.6 Applicable Law. This agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Illinois without giving effect to the principles of conflicts of law thereof.
SECTION 11.7 Succession and Assignment. This Agreement and the Related
Agreements shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. No party may assign either this
Agreement or any of its rights, interests, or obligations hereunder without the
prior written approval of the Purchaser and the Seller; provided, however, that
the Purchaser may (i) assign any or all of its rights and interests hereunder to
one or more of its Affiliates, (ii) designate one or more of its Affiliates to
perform its obligations hereunder (in any or all of which cases the Purchaser
nonetheless shall remain responsible for the performance of all of its
obligations hereunder) and (iii) grant a security interest in respect of its
rights hereunder to its lenders.
SECTION 11.8 No Third Party Beneficiaries. Other than as set forth in
Section 11.7, this Agreement is solely for the benefit of the parties hereto and
no provision of this Agreement shall be deemed to confer upon third parties any
remedy, claim, liability, reimbursement, cause of action or other right.
SECTION 11.9 Publicity. Prior to the Closing Date, except as required
by law or the rules of any stock exchange, no public announcement or other
publicity regarding this
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Agreement or the transactions referred to herein shall be made by either party
hereto or any of their respective Affiliates, officers, directors, managers,
employees, representatives or agents, without the prior consent of the other
party, in any case, as to form, content, timing and manner of distribution or
publication; provided, however, that nothing in this Section shall prevent such
parties from discussing such transactions with those Persons whose approval,
agreement or opinion, as the case may be, is required for consummation of such
transactions.
SECTION 11.10 Further Assurances. Upon the reasonable request of the
Purchaser or the Company, each party will on and after the Closing Date execute
and deliver to the other parties such other documents, assignments and other
instruments as may be required to effectuate completely the transfer and
assignment to the Purchaser of, and to vest fully in the Purchaser title to, the
Acquired Assets, and to effect and evidence the provisions of this Agreement and
the Related Agreements and the transactions contemplated hereby.
SECTION 11.11 Entire Understanding. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof. This Agreement and the Related Agreements set forth the entire
agreement and understanding of the parties hereto and supersede any and all
prior agreements, arrangements and understandings among the parties.
SECTION 11.12 Severability. Any term or provision of this Agreement
that is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. If the final judgement of a
court of competent jurisdiction declares that any term or provision hereof is
invalid or unenforceable, the parties agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce
the scope, duration, or area of the term or provision, to delete specific words
or phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified after the expiration of the
time within which the judgment may be appealed.
SECTION 11.13 Interpretation. The headings contained in this Agreement
and the attached Schedules are for convenience only and shall not affect in any
way the meaning or interpretation of this Agreement or the Schedules. The use of
the masculine, feminine or neuter gender herein shall not limit any provision of
this Agreement. The use of the terms "including" or "include" shall in all cases
herein mean "including, without limitation" or "include, without limitation,"
respectively. Underscored references to Articles, Sections, Subsections,
Exhibits or Schedules shall refer to those portions of this Agreement. Time is
of the essence of each and every covenant, agreement and obligation in this
Agreement.
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SECTION 11.14 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 11.15 Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rule of strict construction shall be applied against any Party. Any
reference to any federal, state, local, or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder, unless
the context requires otherwise.
SECTION 11.16 Specific Performance. Each of the parties acknowledges
and agrees that the other parties would be damaged irreparably in the event any
of the provisions of Sections 6.1, 6.3, 6.8, 6.9, 6.14, 6.15 and 6.19 of this
Agreement are not performed in accordance with their specific terms or otherwise
are breached. Accordingly, each of the parties agrees that the other parties
shall be entitled to an injunction or injunctions to prevent breaches of the
aforementioned provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
parties and the matter (subject to the provisions set forth in Section 11.17
below), in addition to any other remedy to which they may be entitled, at law or
in equity.
SECTION 11.17 Submission to Jurisdiction. Each of the parties submits
to the jurisdiction of any state or federal court sitting in Chicago, Illinois
in any action or proceeding arising out of or relating to this Agreement and
agrees that all claims in respect of the action or proceeding may be heard and
determined in any such court. Each party also agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court. Each
of the parties waives any defense of inconvenient forum to the maintenance of
any action or proceeding so brought and waives any bond, surety, or other
security that might be required of any other party with respect thereto. Any
party may make service on any other party by sending or delivering a copy of the
process to the Party to be served at the address and in the manner provided for
the giving of notices in Section 11.4 above. Nothing in this Section 11.17,
however, shall affect the right of any party to bring any action or proceeding
arising out of or relating to this Agreement in any other court or to serve
legal process in any other manner permitted by law or at equity. Each party
agrees that a final judgment in any action or proceeding so brought shall be
conclusive and may be enforced by suit on the judgment or in any other manner
provided by law or at equity.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
XXXXXX INTERNATIONAL, INC.
By: /s/ Xxxxx X. ???
Name: Xxxxx X. ???
Title: Executive Vice President
TMT-PATHWAY, L.L.C.
By: /s/ Xxxxxxxxxxx X. Xxxxx
Name: Xxxxxxxxxxx X. Xxxxx
Title: Vice President
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TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS
1.1 Definitions....................................................1
ARTICLE II
BASIC TRANSACTION
2.1 Purchase and Sale of Assets....................................9
2.2 Assumption of Liabilities......................................9
2.3 Purchase Price.................................................9
2.4 Purchase Price Adjustment......................................9
ARTICLE III
CLOSING OF THE TRANSACTION
3.1 Closing.......................................................11
3.2 Deliveries at the Closing.....................................11
3.3 Allocation....................................................11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER
4.1 Due Incorporation; Authorization..............................12
4.2 Noncontravention..............................................12
4.3 Financial Statements..........................................13
4.4 Title to Assets...............................................13
4.5 Owned Real Property...........................................13
4.6 Real Property Leases..........................................14
4.7 Intellectual Property.........................................15
4.8 Tangible Assets...............................................17
4.9 Inventory.....................................................17
4.10 Contracts.....................................................18
4.11 Insurance.....................................................20
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TABLE OF CONTENTS
(continued)
Section Page
4.12 Employee Benefit Plans........................................20
4.13 Legal Compliance..............................................21
4.14 No Material Adverse Effect....................................21
4.15 Taxes.........................................................21
4.16 Environmental Matters.........................................22
4.17 Permits.......................................................23
4.18 Backlog.......................................................23
4.19 Litigation....................................................23
4.20 Labor Matters.................................................23
4.21 Product Warranty..............................................24
4.22 Product Liability.............................................24
4.23 Year 2000.....................................................24
4.24 Customers, Suppliers and Products.............................24
4.25 Brokers.......................................................25
4.26 Accuracy of Statements........................................25
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
5.1 Due Incorporation.............................................25
5.2 Due Authorization.............................................25
5.3 Noncontravention..............................................26
5.4 Brokers.......................................................26
ARTICLE VI
COVENANTS
6.1 Access to Information and Facilities..........................26
6.2 Preservation of Business......................................27
6.3 Exclusivity...................................................28
6.4 Efforts.......................................................29
6.5 Discharge of Liens, etc.......................................29
6.6 Maintenance of Insurance......................................29
6.7 Notice and Supplemental Information...........................29
6.8 Post-Closing Access and Cooperation...........................30
6.9 Public Announcements..........................................30
6.10 Consistent Tax Reporting......................................30
6.11 Interim Financial Statements..................................30
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TABLE OF CONTENTS
(continued)
Section Page
6.12 Environmental Audit...........................................31
6.13 Transition....................................................31
6.14 Confidentiality...............................................31
6.15 Noncompetition; Nonsolicitation...............................31
6.16 Business Name.................................................33
6.17 Proration of Real Estate and Personal Property Taxes;
Transfer, Sales and Use Taxes...............................33
6.18 Transferred Employees.........................................33
6.19 Post-Closing Covenants........................................34
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER
7.1 Warranties True as of Both Present Date and Closing Date......36
7.2 Compliance with Agreements and Covenants......................36
7.3 Execution of Related Agreements...............................36
7.4 Compliance with HSR Act.......................................36
7.5 Required Consents.............................................36
7.6 Financial Condition at Closing................................36
7.7 No Prohibition................................................37
7.8 Litigation....................................................37
7.9 No Material Adverse Change....................................37
7.10 Real Property Matters.........................................37
7.11 Environmental Audit...........................................37
7.12 Schedules.....................................................37
7.13 Discharge of Liens............................................37
7.14 Employment Agreement..........................................38
7.15 Contracts.....................................................38
7.16 FIRPTA Certificate............................................38
7.17 Authorization.................................................38
7.18 Documents.....................................................38
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
8.1 Warranties True as of Both Present Date and Closing Date......39
8.2 Compliance with Agreements and Covenants......................39
8.3 Execution of Related Agreements...............................39
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TABLE OF CONTENTS
(continued)
Section Page
8.4 Compliance with HSR Act.......................................39
8.5 No Prohibition................................................39
8.6 Litigation....................................................39
8.7 Environmental Audit...........................................39
8.8 Authorization.................................................40
8.9 Documents.....................................................40
ARTICLE IX
TERMINATION
9.1 Termination...................................................40
9.2 Effect of Termination.........................................41
ARTICLE X
SURVIVAL AND REMEDY; INDEMNIFICATION
10.1 Survival......................................................41
10.2 Indemnification by the Seller.................................42
10.3 Indemnification by the Purchaser..............................44
10.4 Third-Party Claims............................................44
10.5 Indemnification Limits........................................45
10.6 Exclusive Remedy..............................................45
ARTICLE XI
MISCELLANEOUS
11.1 Expenses......................................................46
11.2 Limitation of Best Efforts....................................46
11.3 Amendment.....................................................46
11.4 Notices.......................................................46
11.5 Waivers.......................................................47
11.6 Applicable Law................................................47
11.7 Succession and Assignment.....................................47
11.8 No Third Party Beneficiaries..................................47
11.9 Publicity.....................................................47
11.10 Further Assurances............................................48
11.11 Entire Understanding..........................................48
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TABLE OF CONTENTS
(continued)
Section Page
11.12 Severability..................................................48
11.13 Interpretation................................................48
11.14 Counterparts..................................................49
11.15 Construction..................................................49
11.16 Specific Performance..........................................49
11.17 Submission to Jurisdiction....................................49
EXHIBITS
Exhibit A Form of Xxxx of Sale
Exhibit B Form of Real Property Assignment
Exhibit C Form of Trademark Assignment
Exhibit D Form of Assignment and Assumption Agreement
Exhibit E Form of Opinion of Seller's Counsel
Exhibit F Form of Opinion of Purchaser's Counsel
SCHEDULES
Schedule 1.1 Seller Employees with Knowledge
Schedule 2.2 Assumed Liabilities
Schedule 3.3 Purchase Price Allocation
Schedule 4.3 Financial Statements
Schedule 4.4 Title to Assets
Schedule 4.5 Owned Real Property
Schedule 4.6 Leased Real Property
Schedule 4.7 Intellectual Property
Schedule 4.8 Tangible Assets
Schedule 4.9 Inventory
Schedule 4.10 Contracts
Schedule 4.11 Insurance
Schedule 4.12 Employee Benefit Plans
Schedule 4.13 Legal Compliance
Schedule 4.14 Events Outside the Ordinary Course of Business
Schedule 4.15 Taxes
Schedule 4.16 Environmental Matters
Schedule 4.17 Permits
Schedule 4.18 Backlog
Schedule 4.19 Litigation
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Schedule 4.20 Employees
Schedule 4.21 Product Warranty
Schedule 4.22 Product Liability
Schedule 4.23 Year 2000
Schedule 6.2 Conduct of Business
EXHIBIT A
XXXX OF SALE
THIS XXXX OF SALE ("Xxxx of Sale") is made and entered into as of May
17, 1999 by XXXXXX INTERNATIONAL, INC., an Indiana corporation ("Seller" or
"Xxxxxx"), having an address at 000 Xxxxx Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000, in favor of TMT-PATHWAY, L.L.C., a Delaware limited liability company
("Buyer"), having an address at c/x Xxxxxxx Products, Inc., 0000 Xxxxxxxx Xxxx,
Xxxxxxxxxxxx, Xxxxxxxx 00000.
W I T N E S S E T H:
WHEREAS, reference is made to an Asset Purchase Agreement, dated April
20, 1999, by and between Seller and Buyer (the "Asset Purchase Agreement"),
providing for, among other things, the transfer to Buyer of certain assets and
properties by Seller for consideration in the amount and on the terms and
conditions provided for in the Asset Purchase Agreement.
WHEREAS, all capitalized terms used herein and not otherwise defined
herein shall have the respective definitions ascribed to such terms in the Asset
Purchase Agreement.
WHEREAS, to carry out the intent and purpose of the Asset Purchase
Agreement, Seller is executing and delivering to Buyer this instrument
evidencing the vesting in Buyer of all of Seller's right, title and interest in
and to certain assets used in the Business of the Company, on the terms and
conditions set forth in the Asset Purchase Agreement, in addition to such other
instruments which Buyer shall have otherwise received or may hereafter receive
pursuant to the Asset Purchase Agreement.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
contained in the Asset Purchase Agreement and herein, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, effective as of the Closing, Seller hereby sells, transfers,
conveys, assigns and delivers unto Buyer, its successors and assigns forever,
subject to the terms and conditions of the Asset Purchase Agreement, all right,
title and interest that Seller posses and has the right to transfer in and to
all of the assets constituting and used primarily in the Business, including all
Acquired Assets as such term is defined in the Asset Purchase Agreement,
including, but not limited to, all of the following:
(a) real property, leaseholds and subleaseholds therein,
improvements, fixtures, and fittings thereon, and easements,
rights-of-way, and other appurtenants thereto (such as appurtenant
rights in and to public streets), (b) tangible personal property (such
as machinery, equipment, inventories of supplies, manufactured and
purchased parts, furniture, automobiles, trucks, tractors, trailers,
tools, jigs, and dies), (c) Intellectual Property, goodwill associated
therewith, licenses and sublicenses granted and obtained with respect
thereto, and rights thereunder, remedies against infringements thereof,
and rights to protection of interests therein under the laws of all
jurisdictions, (d) leases,
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36359199.2 51499 201E 99512683
subleases, and rights thereunder, (e) Contracts, Liens, guarantees,
other similar arrangements, and rights thereunder, (f) accounts, notes,
and other receivables, (g) claims, deposits, prepayments, refunds,
causes of action, choses in action, rights of recovery, rights of set
off, and rights of recoupment (but not including any such item relating
to the payment of Taxes), (h) Permits and (i) books, records, ledgers,
files, documents, correspondence, lists, plats, architectural plans,
drawings, and specifications, creative materials, advertising and
promotional materials, studies, reports, and other printed or written
materials;
provided, however, that the Acquired Assets shall not include the following
excluded assets (the "Excluded Assets"):
(a) any corporate charter, qualifications to conduct business
as a foreign corporation, arrangements with registered agents relating
to foreign qualifications, taxpayer and other identification numbers,
seals, minute books, stock transfer books, blank stock certificates,
and other documents relating to the organization, maintenance, and
existence of the Seller, (b) rights in and with respect to the assets
associated with any Employee Benefit Plans, (c) any of the rights of
the Seller under this Agreement (or under any side agreement between
the Seller on the one hand and the Purchaser on the other hand entered
into on or after the date of this Agreement), (d) any cash, (e) any
claims of the Seller for tax refunds or (f) except as provided in
Section 6.16 of the Asset Purchase Agreement, the name "Xxxxxx" and all
variations of that name, all logos used in connection with that name,
and all goodwill associated with that name.
Nothing in this Xxxx of Sale, express or implied, is intended or shall
be construed (i) as a transfer or assignment to Buyer of any Excluded Assets, or
(ii) to confer upon, or give to, any person other than Buyer and its successors
and assigns any remedy or claim under or by reason of this instrument. All of
the terms, covenants and conditions herein contained shall be for the sole and
exclusive benefit of Buyer and its successors and assigns.
This Xxxx of Sale is executed to implement, and not to modify, the
Asset Purchase Agreement.
THIS XXXX OF SALE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF ILLINOIS, AND SHALL BE BINDING UPON AND INURE TO THE
BENEFIT OF BUYER AND ITS RESPECTIVE SUCCESSORS AND ASSIGNS.
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IN WITNESS WHEREOF, the Seller has caused this Xxxx of Sale to be
signed by its duly authorized officers and its corporate seal to be affixed
hereto as of the date first above written.
XXXXXX INTERNATIONAL, INC.
By
Xxxxx X. Xxxxxxxxxx
Executive Vice President
CORPORATE SEAL
ATTEST:
-------------------------
Name:
Title:
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EXHIBIT D
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Assignment") is made and
entered into as of May 17, 1999, by and among TMT-Pathway, L.L.C., a Delaware
limited liability company ("Assignee") and Xxxxxx International, Inc., an
Indiana corporation (the "Assignor"). Capitalized terms not otherwise defined
herein shall have the meanings given to such terms in that certain Asset
Purchase Agreement, dated as of April 20, 1999 (the "Purchase Agreement"),
between Assignor and Assignee.
W I T N E S S E T H:
WHEREAS, the Purchase Agreement provides for, among other things, the
transfer by Assignor to Assignee of all of the Assumed Liabilities for
consideration in the amount and on the terms and conditions provided for in the
Purchase Agreement; and
WHEREAS, the Purchase Agreement provides for, among other things, the
assumption by Assignee of the Assumed Liabilities of Assignor, on the terms and
conditions provided for in the Purchase Agreement; and
WHEREAS, the Purchase Agreement provides for, among other things, the
assumption by Assignor of the Excluded Liabilities of Assignor, on the terms and
conditions provided for in the Purchase Agreement; and
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree
as follows:
1. Assignor hereby assigns to Assignee, as of the date hereof, all of
Assignor's obligations under and relating to the Assumed Liabilities, subject to
the terms and conditions of the Purchase Agreement.
2. Assignee hereby assumes Assignor's obligations under the Assumed
Liabilities.
3. Assignor shall retain all Liabilities not specifically assumed by the
Assignee.
4. This Assignment is executed to implement, and not to modify, enlarge or
restrict any of the relative rights and obligations of the parties under the
Purchase Agreement.
IN WITNESS WHEREOF, the parties have executed this Assignment on the date
first above written.
ASSIGNOR:
XXXXXX INTERNATIONAL, INC.,
By:________________________________
Name: Xxxxx X. Xxxxxxxxxx
Title: Executive Vice President
ASSIGNEE:
TMT-PATHWAY, L.L.C.
By:________________________________
Name:
Title:
