STOCK PURCHASE AGREEMENT
Between
GRASEBY ELECTRO-OPTICS INC., the sole Shareholder
of
GRASEBY CONTROLS INCORPORATED,
a Delaware corporation,
as SELLER
and
XX XXXX'X INCORPORATED,
a Pennsylvania Corporation
as BUYER
Dated As of May 8, 1997
39
TABLE OF CONTENTS
ARTICLE I DEFINITIONS ......................................................1
ARTICLE II PURCHASE AND SALE OF SHARES ......................................6
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER .........................7
Section 3.01 - Organization, Good Standing and Authority
of the Company ....................................7
Section 3.02 - Warranty of Title to the Shares ...................7
Section 3.03 - Capital Structure of the Company ..................7
Section 3.04 - No Subsidiaries ...................................7
Section 3.05 - Authorized and Effective Agreement;
No Violation ......................................8
Section 3.06 - Financial Statements; Organizational Documents;
Minute Books ......................................8
Section 3.07 - Operations Subsequent to December 31, 1996 ........9
Section 3.08 - Governmental Authorizations ......................10
Section 3.09 - Consents .........................................10
Section 3.10 - Intangibles ......................................10
Section 3.11 - Properties .......................................11
Section 3.12 - Environmental Matters ............................12
Section 3.13 - Tax Matters ......................................14
Section 3.14 - Employee Benefit Plans ...........................15
Section 3.15 - Certain Contracts ................................19
Section 3.16 - Legal Proceedings; Regulatory Approvals ..........19
Section 3.17 - Compliance with Laws .............................19
Section 3.18 - Brokers and Finders ..............................20
Section 3.19 - Inventory ........................................20
Section 3.20 - Accounts Receivable ..............................20
Section 3.21 - No Undisclosed Liabilities .......................20
Section 3.22 - Title ............................................21
Section 3.23 - Transactions with Related Parties ................21
Section 3.24 - Compensation Arrangements; Bank Accounts;
Officers and Directors ...........................21
Section 3.25 - Labor Relations ..................................21
Section 3.26 - Products Liability ...............................22
Section 3.27 - Insurance ........................................22
(i)
40
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER .........................23
Section 4.01 - Organization, Standing and Authority of Buyer ....23
Section 4.02 - Authorized and Effective Agreement ...............23
Section 4.03 - Legal Proceedings; Regulatory Approvals ..........23
Section 4.04 - Securities .......................................24
Section 4.05 - Brokers and Finders ..............................24
ARTICLE V CONDITIONS PRECEDENT ............................................24
Section 5.01 - Conditions Precedent -- Buyer and Seller .........24
Section 5.02 - Conditions Precedent -- Seller ...................25
Section 5.03 - Conditions Precedent -- Buyer ....................25
ARTICLE VI CLOSING .........................................................27
ARTICLE VII WAIVER ..........................................................27
ARTICLE VIII CERTAIN POST-CLOSING OBLIGATIONS ................................28
Section 8.01 - Confidential Information .........................28
Section 8.02 - Indemnification by Seller ........................28
Section 8.03 - Indemnification by Buyer .........................30
Section 8.04 - Indemnification Procedures .......................30
Section 8.05 - Claims Against the Company .......................31
Section 8.06 - Tax Matters ......................................32
Section 8.07 - Noncompetition Covenant ..........................35
Section 8.08 - Nature and Survival of Representations ...........35
Section 8.09 - Employees; 401(k) Plan ...........................35
ARTICLE IX MISCELLANEOUS ...................................................36
Section 9.01 - Authorized and Effective Agreement;
No Violation (Guarantors) ............36
Section 9.02 - Expenses .........................................37
Section 9.03 - Consent to Jurisdiction; Forum Selection .........37
Section 9.04 - Entire Agreement .................................37
Section 9.05 - Assignment .......................................37
Section 9.06 - Notices ..........................................37
Section 9.07 - Captions; Headings ...............................39
Section 9.08 - Amendments .......................................39
(ii)
41
Section 9.09 - Severability .....................................39
Section 9.10 - Construction .....................................39
Section 9.11 - Counterparts .....................................39
Section 9.12 - Post-Closing Cooperation .........................39
Section 9.13 - Governing Law ....................................40
List of Exhibits..............................................................44
List of Schedules.............................................................44
42
(iii)
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement"), is made and entered
into this 8th day of May, 1997 by and among GRASEBY ELECTRO-OPTICS INC., a
Delaware corporation ("Seller"), the sole shareholder of Graseby Controls
Incorporated (the "Company"), a Delaware corporation, XX XXXX'X INCORPORATED, a
Pennsylvania corporation ("Buyer"), GRASEBY plc, an English corporation, and
GRASEBY XXXXXXXX INC., a Delaware corporation (Graseby plc and Graseby Xxxxxxxx
Inc. are sometimes collectively referred to hereinafter as "Guarantors").
W I T N E S S E T H:
WHEREAS, Seller owns one hundred percent (100%) of the issued and
outstanding shares of $1.00 par value common stock of the Company (the
"Shares"); and
WHEREAS, Seller desires to sell, transfer and assign to Buyer, and Buyer
desires to purchase, assume, and accept from Seller, the Shares, for the price
and on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and promises contained herein, Seller and Buyer, intending to be
legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
"Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated
under the Securities Exchange Act of 1934, as amended.
"Business" shall mean the business presently conducted by the Company,
including the business of designing, manufacturing, selling, and servicing
electronic controllers for rotating electrical machinery.
"Buyer" shall mean XX Xxxx'x Incorporated.
"Closing" shall have the meaning set forth in Article VI of this Agreement.
"Closing Date" shall have the meaning set forth in Article VI of this
Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Company" shall mean Graseby Controls Incorporated.
"Consents" shall mean consents, permits or approvals of third parties
necessary to transfer the Shares to Buyer or otherwise consummate the
transactions contemplated hereby and to conduct the Business.
"Damage" or "Damages" shall mean the aggregate amount of losses,
liabilities, claims, obligations, damages, deficiencies, costs, expenses, fines
or penalties, including without limitation reasonable attorney fees and other
defense costs, costs of investigation, remediation or other response actions,
each to the extent reasonable and actually incurred, with respect to a matter
for which an indemnification obligation exists under this Agreement.
"Effective Time" shall mean the time and date specified pursuant to Article
VI hereof as the effective time of the Sale.
43
"Encroachment" shall mean (i) encroachments of any buildings or other
improvements onto the Real Property, and (ii) encroachments of any buildings or
other improvements situated on the Real Property onto properties or
rights-of-way abutting the Real Property.
"Financial Statements" shall mean the unaudited balance sheets (including
related notes and schedules, if any) of the Company as of December 31, 1995 and
1996 and the related unaudited statements of operations and shareholders' equity
(including related notes and schedules, if any) for each of the periods ended
December 31, 1994, 1995, and 1996, copies of which are attached hereto as
Exhibit A.
"GAAP" shall mean generally accepted accounting principles in effect in the
United States from time to time, as applied by the entity in respect of which
the term is used, consistently with its past practices.
"Governmental Body" shall mean any foreign, federal, state, local or other
governmental authority or regulatory body.
"Intangibles" shall mean (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,
and 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). Notwithstanding the
foregoing and any other provision in this Agreement or any agreement, document,
or instrument delivered or to be delivered pursuant to this Agreement,
"Intangibles" does not and shall not include, and this Agreement shall in no
manner represent an agreement by Seller to convey to Buyer, any right or
interest in or to the name "Graseby" or any translation, adaptation, derivation,
or combination thereof, provided, however, that (i) Seller hereby grants to
Buyer a license to use the corporate name "Graseby Controls Incorporated" as the
name of the Company, and for no other purpose, for the one (1) month period
commencing on the Closing Date, it being agreed by the parties that on or before
the expiration of such one (1) month period Buyer shall cause the name of the
Company to be changed to a name which does not include the name "Graseby" or any
translation, adaptation, derivation, or combination thereof, and (ii) the
Company may use and sell, for a period of six (6) months commencing on the
Closing Date, the Company's inventories
44
of products, components, supplies, brochures, stationery, business forms, and
other similar materials in stock as of the Closing Date which contain the name
"Graseby Controls Incorporated" and translations, adaptations, derivations, and
combinations thereof, it being agreed by the parties that after the expiration
of such six (6) month period Buyer shall no longer use the name "Graseby
Controls Incorporated" or any translation, adaptation, derivation, or
combination thereof on any product, component, supply, brochure, stationery,
business forms, or other similar materials.
"Knowledge," when used in the phrase "to the knowledge of" or a similar
phrase, shall mean the knowledge of the officers and management (including,
without limitation, the officers responsible for tax matters) of the Person to
whom such phrase refers, it being understood that the Knowledge of Seller shall
always be deemed to include the Knowledge of the Company.
"Licenses" shall mean all licenses, permits and other authorizations issued
by any federal, state or local governmental authorities to the Company in
connection with the Business or required for the conduct of the Business.
"Lien" shall mean any mortgage, lease, covenant, condition, restriction,
deed of trust, lien, pledge, hypothecation, assignment, deposit arrangement,
option, right of first refusal, indenture, license, security interest,
encumbrance, right of way, easement, encroachment or similar arrangement of any
kind or nature or any title defect whatsoever.
"Material Adverse Effect" shall mean, with reference to any event, matter,
item or circumstance (other than as a result of changes (a) in applicable laws
or regulations of general applicability or interpretations thereof by court or
governmental entities, or (b) in GAAP), that in and of itself, or when combined
with all other events, matters, items or circumstances, such event, matter, item
or circumstance reasonably could be expected to have, now or in the future, a
material adverse effect on the Business, properties, financial condition,
operations, or results of operations of the Company, as the case may be, but
shall not include those changes which would reasonably be expected to occur as a
reasonable consequence of the Sale, including, without limitation, the
consequences of employee resignations and employee relations difficulties.
"Ordinary Course of Business" shall mean the ordinary course of business of
the entity with respect to which this term is used, conducted in the same manner
as theretofore conducted during the three (3) year period preceding the date of
this Agreement and consistent with the entity's past policies, practices, and
methods (including with respect to quantity and frequency) in effect during such
three (3) year period. When used with reference to the Company, Ordinary Course
of Business shall mean the (a) Ordinary Course of Business of the Company, and
(b) the Ordinary Course of Business of Graseby Xxxxxxxx Corporation prior to its
merger with and into the Company.
"Permitted Exceptions" shall have the meaning set forth in Section
3.11(b)(ii) of this Agreement.
45
"Person" shall mean an individual, a partnership, a corporation, a
commercial bank, an industrial bank, a savings association, a savings bank, a
limited liability company, an association, a joint stock company, a trust, a
business trust, a joint venture, an unincorporated organization, or a
governmental entity (or any department, agency, or political subdivision
thereof).
"Personal Property" shall mean the machinery, equipment, tools, vehicles,
furniture, leasehold improvements, office equipment, plant and other tangible
personal property used or useful in the Business, and all computer disks and
tapes, plans, diagrams, blueprints, schematics and books and records relating to
the Company or the Business.
"Predecessor in Interest" shall mean, with respect to the entity to which
such phrase refers, all entities to which such entity has succeeded by way of
merger or acquisition. When used with respect to the Company, the phrase
"Predecessor in Interest" shall mean and include, but shall not be limited to,
Graseby Xxxxxxxx Corporation, Tasc Drives, Inc., and Electrical South, Inc.
"Purchase Price" shall have the meaning set forth in Article II.
"Real Property" shall mean that certain parcel or parcels of land located
in Greensboro, Guilford County, North Carolina and more particularly described
in Exhibit B hereto, together with all fixtures, fittings, buildings, structures
and other improvements thereon, and all easements, rights and privileges of
every type and nature used by the Company in connection therewith or appurtenant
thereto.
"Regulations" shall mean the federal income tax regulations under the Code,
promulgated by the Treasury Department and contained in Title 26 of the Code of
Federal Regulations, including any amendments or any substitute or successor
provisions thereto.
"Related Party" shall mean Seller, any of the officers or directors of the
Company or Seller, any Affiliate of Seller, the Company, or any business or
entity in which Seller, the Company, or any Affiliate of any such Person has any
direct, or material indirect, interest.
"Rights" shall mean warrants, options, rights (whether stock appreciation
rights, conversion rights, exchange rights, profit participation rights, or
otherwise), convertible securities and other arrangements or commitments which
obligate a Person to issue, otherwise cause to become outstanding, sell,
transfer, pledge, or otherwise dispose of any of its or any other Person's
capital stock or other ownership interests, or any voting rights thereof or
therein.
"Sale" shall mean the sale of the Shares by Seller to Buyer pursuant to
this Agreement.
46
"Seller" shall mean Graseby Electro-Optics Inc., successor by merger to
Graseby Overseas Corporation.
"Shares" shall mean all of the issued and outstanding shares of capital
stock of the Company.
"Significant Contract" shall mean, with respect to the Company, (a) any
note, bond, mortgage or other instrument which evidences or secures indebtedness
of the Company with a balance outstanding of Twenty Five Thousand Dollars
($25,000) or more, (b) any agreement, arrangement, commitment, contract or other
instrument, except a lease of Real or Personal Property, to which the Company is
a party or by which the Company is bound, the performance or nonperformance of
which could either (i) increase the liabilities or decrease the assets of the
Company or (ii) decrease the income or increase the expenses of the Company, in
each case by Twenty Five Thousand Dollars ($25,000) or more over the remaining
term of the obligation, exclusive of all optional renewal periods and extensions
of the term, provided, however, that any such agreement, arrangement,
commitment, contract or other instrument shall not be deemed to be a Significant
Contract in the event the Company has the contractual right to terminate the
agreement, arrangement, commitment, contract or other instrument in question on
thirty (30) days' notice or less without incurring a penalty, premium, or other
expense in excess of Twenty Five Thousand Dollars ($25,000).
"Significant Lease" shall mean, with respect to the Company, (a) any lease
of Real or Personal Property, or any sublease of Real Property, by the Company,
as lessee or sublessee, pursuant to which the Company reasonably anticipates the
payment of aggregate rent, taxes, insurance, utilities (if applicable) and other
charges in excess of Twenty Five Thousand Dollars ($25,000) over the remaining
term of such lease or sublease, exclusive of all optional renewal periods and
optional extensions of the term thereof (provided, however, that any such lease
or sublease shall not be deemed a Significant Lease in the event that the
Company has the contractual right to terminate such lease in question on thirty
(30) days' notice or less without incurring a penalty, premium, or other expense
in excess of Twenty Five Thousand Dollars ($25,000)), and (b) any lease of Real
or Personal Property, or any sublease of Real Property, by the Company as lessor
or sublessor.
"Survey" shall mean that certain survey of the Real Property prepared by
Xxxxxx X. Xxxxxxxxxx (L-3098), dated April 23, 1997, last revised on May 6,
1997, entitled "Boundary Survey of Xxx 0 Xxxxxx'x Xxx. Xxxxxxxxxx, Xxxxxxxx
Xxxxxx, X.X. Graseby Controls Inc.," a copy of which is attached hereto as
Exhibit C.
"Survey Defect" shall mean any of the following shown on or discernable
from the Survey: (a) a lack of vehicular access to and from the Real Property to
and from a dedicated and accepted public right-of-way; (b) any zoning or land
use ordinances (other than Permitted Exceptions); (c) noncompliance with any
applicable zoning law, including, without limitation, those relating to setback
or height restrictions; (d) noncompliance with any covenant, restriction or
condition affecting the Real Property; or (e) any Lien (other than Permitted
Exceptions) which
47
individually or when aggregated with other matters affecting title (other than
Permitted Exceptions): (i) materially detracts from the value of the Real
Property, (ii) impairs, or reasonably could be expected to impair, the use of
the Real Property in the manner such property is currently being used by the
Company in connection with the Business, (iii) impairs, or reasonably could be
expected to impair, the operations of the Company or the conduct of the
Business, or (iv) renders the title to the Real Property unmarketable.
"Tax" or "Taxes" shall mean any federal, state, local, foreign or other net
income, gross income, gross receipts, windfall profits, severance, property,
production, sales, use, transfer, gains, license, excise, franchise, employment,
payroll, withholding (which includes, without limitation, income, payroll tax,
foreign withholding, backup withholding, and any other withholding obligation
imposed by the Code or a Governmental Body), value added, estimated, alternative
or add-on minimum tax, or any other tax, custom, duty, governmental fee or other
like assessment or charge of any kind whatsoever, together with any interest or
any penalty, addition to tax or additional amount imposed by any Governmental
Body.
"Tax Return" shall mean any return, report or similar statement required to
be filed with respect to any Taxes (including any required schedules),
including, without limitation, any information return, claim for refund, amended
return and declaration of estimated Tax.
Other terms used herein are defined elsewhere in this Agreement.
ARTICLE II
PURCHASE AND SALE OF SHARES
At the Closing, upon satisfaction of the conditions contained in this
Agreement, (i) Seller shall sell and deliver the Shares to Buyer, and (ii) in
exchange therefor, Buyer shall pay the Purchase Price in full in immediate
funds. The "Purchase Price" for the Shares shall be the sum of Four Million Nine
Hundred Fifty Thousand United States Dollars ($4,950,000.00), of which Three
Million Eight Hundred Eighteen Thousand One Hundred Ninety-Seven United States
Dollars ($3,818,197.00) shall be paid to Seller in full satisfaction of the loan
in that amount to the Company by Graseby Overseas Corporation (to which Seller
has succeeded as payee pursuant to a merger between Graseby Overseas Corporation
and Seller, with Seller as the surviving entity) and One Million One Hundred
Thirty-One Thousand Eight Hundred Three United States Dollars ($1,131,803.00)
shall be paid to Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
48
Section 3.1. Organization, Good Standing and Authority of the Company.
The Company is duly organized, validly existing, and in good standing as a
general business corporation under the laws of the State of Delaware, is duly
qualified to do business in the State of North Carolina, and has the powers and
privileges of a general business corporation, including, without limitation,
full power to carry on the Business. The Company is not required by law to
qualify to do business in any foreign jurisdiction other than North Carolina,
except where failure to qualify in such foreign jurisdiction would not have a
Material Adverse Effect.
Section 3.2. Warranty of Title to the Shares.
Seller holds of record and beneficially owns, and has good and marketable
title to, the Shares. The Shares are not subject to any Taxes, Liens, or Rights.
Seller is not a party to any voting trust, shareholders' agreement, proxy,
voting trust, or other agreement or understanding with respect to the Shares
owned by Seller or the voting rights associated therewith.
Section 3.3. Capital Structure of the Company.
The authorized capital stock of the Company consists of One Thousand
(1,000) shares of common stock, par value $1.00 per share ("Common Stock"). As
of the date hereof, there were One Thousand (1,000) shares of Common Stock
issued and outstanding. The Shares constitute all of such outstanding Common
Stock. The Shares were not issued in violation of the terms of any agreement or
other understanding binding upon the Company, and were issued in compliance with
all applicable federal and state securities or "blue-sky" laws and regulations.
All Shares have been duly issued and constitute validly outstanding, fully paid,
and nonassessable shares of Common Stock. There are no Rights authorized, issued
or outstanding with respect to any capital stock of the Company. None of the
outstanding shares of the Company's capital stock has been issued in violation
of the preemptive rights of any Person.
Section 3.4. No Subsidiaries.
The Company does not own and has not owned, directly or indirectly, any
outstanding capital stock or other voting securities or ownership interests of
any corporation, partnership, limited liability company, or other organization.
Section 3.5. Authorized and Effective Agreement; No Violation.
(a) Seller has all requisite power and authority to enter into, to deliver,
and (subject to receipt of all Consents set forth in Schedule 3.9 hereto) to
perform all of its obligations under this
49
Agreement. This Agreement and all other agreements and instruments required to
be executed and delivered by Seller and the Company, as applicable, in
connection with or pursuant hereto have been duly executed and delivered by
Seller and the Company, as applicable, and constitute the legal, valid and
binding obligations of Seller and the Company, as applicable, enforceable in
accordance with their terms, subject as to enforceability, to bankruptcy,
insolvency and other laws of general applicability relating to or affecting
creditors' rights, and to general equity principles. Upon delivery to Buyer at
the Closing of certificates representing the Shares in accordance herewith,
Buyer will acquire good and valid title to the Shares, free and clear of all
liens, claims, security interests, pledges, charges, equities, options,
restrictions and encumbrances of whatsoever nature. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary
corporate action on the part of Seller and the Company (including shareholder
approval).
(b) Neither the execution and delivery of this Agreement, the consummation
of the transactions contemplated hereby, nor compliance by Seller or the Company
with any of the provisions hereof will: (i) conflict with or result in a breach
of any provision of the articles of incorporation or bylaws of Seller or the
Company; (ii) conflict with or constitute or result in a breach of any term,
condition or provision of, or constitute a default under, or give rise to any
right of termination, cancellation or acceleration with respect to, any note,
bond, mortgage, indenture, lease, license, agreement, instrument, or other
arrangement or obligation to which Seller or the Company is a party or by which
any of them is bound, or result in the creation or imposition of any Lien upon
any property or asset of Seller or the Company, except where such occurrence
would not have a Material Adverse Effect; or (iii) violate any order, ruling,
decree, charge, writ, injunction, regulatory agreement or memorandum of
understanding, constitution, statute, rule or regulation applicable to Seller,
the Guarantors, or the Company, except where such violation would not have a
Material Adverse Effect.
Section 3.6. Financial Statements; Organizational Documents; Minute Books.
(a) The books of account and related records of the Company fairly reflect
in all material respects and in reasonable detail all assets, liabilities and
transactions of the Company in accordance with GAAP. Seller has previously
delivered to Buyer the Financial Statements. The Financial Statements: (i) are
correct and complete in all material respects and in accordance with the books
and records of the Company; (ii) fairly present in all material respects the
financial condition, assets and liabilities of the Company and the Business as
of their respective dates and the results of operations and cash flows of the
Company and the Business for the periods covered thereby; and (iii) reflect
accurately in all material respects all costs and expenses of the Company and
the Business as if the Company were independent and not affiliated with any
other corporation or business, except as set forth in Schedule 3.6(a) attached
hereto.
(b) Seller previously has delivered to Buyer true, complete and correct
copies of the articles of incorporation and bylaws of the Company, and
previously has provided to Buyer
50
access to all minute books, stock certificate books and stock transfer records
of the Company. The minute books of the Company contain all material actions of
its shareholders and its board of directors.
Section 3.7. Operations Subsequent to December 31, 1996.
(a) Except as set forth in Schedule 3.7(a) attached hereto, since December
31, 1996, the Company has conducted the Business only in the Ordinary Course of
Business consistent with historical practice.
(b) Except as set forth in Schedule 3.7(b) attached hereto, since December
31, 1996, there has not been any change in the Business, financial condition,
operations or results of operations of the Company which would have a Material
Adverse Effect.
(c) Except as set forth in Schedule 3.7(c) attached hereto, since
December 31, 1996: (i) the Company has not sold, leased, transferred, or
assigned any of its assets, tangible or intangible, other than for a fair
consideration in the Ordinary Course of Business; (ii) the Company has not
entered into any Significant Contract or Significant Lease; (iii) the Company
has not accelerated, terminated, modified or canceled any agreement, contract,
lease, license, (or series of related agreements, contracts, leases, or
licenses), involving more than Twenty Five Thousand Dollars ($25,000) to which
the Company is a party or by which the Company is bound outside the Ordinary
Course of Business; (iv) the Company has not imposed, nor suffered the
imposition of, any Lien upon any of its assets, tangible or intangible, except
Liens granted in connection with the purchase of equipment or supplies in the
Ordinary Course of Business which in the aggregate do not exceed Fifty Thousand
Dollars ($50,000); (v) there has been no change made or authorized in the
articles of incorporation or bylaws of the Company; (vi) the Company has not
issued, sold, or otherwise disposed of any of its capital stock, or granted any
Rights with respect to its capital stock, or agreed to, or allowed the
imposition of, any Lien with respect to its capital stock; (vii) the Company has
not declared, set aside, or paid any dividend or made any distribution with
respect to its capital stock (whether in cash or in kind) or redeemed,
purchased, or otherwise acquired any of its capital stock; (viii) the Company
has not experienced any damage, destruction, or loss (whether or not covered by
insurance) to its property in excess of Fifty Thousand Dollars ($50,000) per
occurrence; (ix) the Company has not granted any material increase in the
compensation of any of its directors, officers, employees, or independent
contractors outside the Ordinary Course of Business; (x) the Company has not
adopted, amended, modified or terminated any bonus, profit-sharing, incentive,
severance, or other plan, contract, or commitment for the benefit of any of its
directors, officers, and employees (or taken any such action with respect to any
other Employee Benefit Plan); (xi) the Company has not made or pledged to make
any charitable or other capital contribution; (xii) there has been no material
change in the Company's accounting principles, practices or methods; (xiii)
there has been no organized labor walkout, work stoppage or slowdown by any of
the Company's employees or, to the Knowledge of Seller, any threat thereof or
any organized attempts to establish unions or collectively bargain with respect
to the employees of the Company; (xiv) there has been no cancellation or waiver
by the Company of any right material to the operation of
51
the Company nor any disposition of or failure to keep in effect any rights in,
to, or for the use of any material patent, or any trademark, service xxxx, or
tradename used in any jurisdiction where the Company has a material amount of
product sales, nor has there been any disclosure by the Company to any person
not an employee of the Company or other disposal of any trade secret, process,
or know-how; (xv) the Company has not made, nor has the Company or any taxing
authority changed or revoked, any Tax election relating to the Company; (xvi) to
the Knowledge of Seller, there has not been any other occurrence, event,
incident, action, failure to act, or transaction outside the Ordinary Course of
Business involving the Company which has or will have a Material Adverse Effect;
and (xvii) the Company has not committed to do, or to permit the occurrence of,
any of the foregoing.
Section 3.8. Governmental Authorizations.
To the Knowledge of Seller, the Company possesses and is in material
compliance with all of the Licenses and other federal, state, and local
governmental approvals, certificates, filings, franchises, licenses, notices,
permits, and rights ("Permits") necessary for the Company to own, lease, or
operate its properties and assets and to carry on the Business as it is now
conducted, which are set forth in Schedule 3.8 attached hereto. No default has
occurred under any License which would have a Material Adverse Effect. The
Company has conducted the Business and is now doing so in compliance with all
applicable laws, rules, regulations, judgments and orders, except for such
non-compliance which could not have a Material Adverse Effect.
Section 3.9. Consents.
Except as set forth in Schedule 3.9 attached hereto, no consent, approval,
permit or authorization of, or declaration to, or filing with, any governmental
or regulatory authority or any other third party is required to consummate this
Agreement and the transactions contemplated hereby.
Section 3.10. Intangibles.
Schedule 3.10 attached hereto sets forth all Intangibles owned by or
licensed to the Company (the "Company's Intangibles"). Except as set forth in
Schedule 3.10: (a) no Intangibles, other than the Company's Intangibles, are
required to conduct the Business in the Ordinary Course of Business; (b) none of
the Company's Intangibles is used pursuant to a license from a third party or
licensed to a third party; (c) all of the Company's Intangibles which consist of
patents, registered trademarks, service marks and copyrights are in full force
and effect and are held of record in the Company's name; (d) there is no
agreement to which the Company is a party or to which the Company is legally
bound, and to Seller's Knowledge no restriction, materially and adversely
affecting the use by the Company of any of the Company's Intangibles; (e) there
is no pending reexamination of or pending litigation with respect to any of the
Company's Intangibles; (f) there is no order, holding, decision or judgment
which has been rendered by any governmental authority, and no agreement, consent
or stipulation exists to which the Company is a party or of which the Company
has Knowledge which would prevent the
52
Company from using any of the Company's Intangibles; (g) there is no pending or,
to the Company's knowledge threatened, objection or claim being asserted against
the Company in any administrative or judicial proceeding or by any person with
respect to the ownership, validity, enforceability, or use of any of the
Company's Intangibles or challenging or questioning the validity or
effectiveness of the Company's ownership or license of any of the Company's
Intangibles; (h) no notice of rejection, opposition, interference or refusal to
register has been received by the Company in connection with any patent
application or any application for trademark, service xxxx or copyright
registration included within the Company's Intangibles; (i) the Company has not
infringed or misappropriated any rights of any other Person with respect to any
United States or foreign patents, trademarks, trade names, service marks,
copyrights or applications therefor or any other intellectual property rights in
its operation of the Business, nor does the Company have Knowledge of any
infringement or misappropriation which will occur as a result of the continued
operation of the Business as now conducted; and (j) the Company has not taken
any action which would permit any party other than the Company, or its agents,
officers or employees (acting on behalf of the Company), to use, license,
sublicense or operate under any of the Company's Intangibles.
Section 3.11. Properties.
(a) Personal Property; Company's Intangibles. The Company has good and
marketable title to, or leasehold interests in, all of the Personal Property and
the Company's Intangibles reflected on the balance sheet included in the
Financial Statements as of December 31, 1996, or acquired between that date and
the Effective Time, free and clear of all Liens, except (i) such imperfections
of title, restrictions, covenants, and encumbrances, if any, as would not have a
Material Adverse Effect, and (ii) dispositions and encumbrances for adequate
consideration in the Ordinary Course of Business of the Company. The Personal
Property constitutes substantially all of the personal property that is used or
held by the Company for use in the operation of the Business.
(b) Real Property.
(i) Except for the Real Property, the Company does not own, lease or
otherwise occupy any real property or interest therein and no other real
property or interest therein is used in the conduct of the Business.
(ii) The Company has (and will continue to have immediately
following consummation of the transactions contemplated hereby) good, valid,
marketable and indefeasible fee simple title to, and is in actual possession of,
the Real Property. The legal description of the Real Property attached hereto as
Exhibit B is accurate, current and complete. Seller has delivered to Buyer
complete copies of all title reports, title opinions, title insurance
commitments, title insurance policies and surveys, if any, pertaining to the
Real Property that are known by Seller, after reasonable inquiry, to exist and
are in the possession or control of Seller, the Company or any Affiliate of
either of the same (Seller, the Company and all Affiliates of either of the same
being hereinafter collectively referred to in this Section 3.11(b)(ii) as
"Seller
53
Entities"). The Real Property is free and clear of all Liens and Survey Defects,
including, without limitation, security interests, including, without
limitation, any conditional sale or other title or interest retention agreements
or arrangements, options to purchase, liens, encumbrances, mortgages, pledges,
assessments, easements, covenants, restrictions, reservations, defects in title,
Encroachments, leases, subleases, rights of occupancy, chattel mortgages and
collateral security arrangements, rights-of-way, building use restrictions,
exceptions, variances or reservations of any nature whatsoever, except the
following (collectively, "Permitted Exceptions"): (A) matters set forth on
Schedule 3.22; (B) minor imperfections of title, conditions, easements,
covenants and restrictions, if any, none of which have a Material Adverse
Effect; (C) zoning and land use ordinances, none of which, individually or in
the aggregate, to the Knowledge of Seller has a Material Adverse Effect; and (D)
liens for real estate taxes and assessments not yet due and payable. None of the
Seller Entities has received written notice of any violation of or nonconformity
with any zoning, subdivision, wetlands, or other similar law, code, rule,
regulation or ordinance from any governmental authority with respect to the Real
Property, or of any condemnation action, eminent domain proceeding or other
litigation concerning any of the Real Property. The water, gas, electricity and
other utilities serving the Real Property have been and are currently adequate
to service the Business.
Section 3.12. Environmental Matters.
(a) The Company holds and is in compliance with all Permits required under
all applicable environmental statutes, rules, regulations, ordinances and orders
of any governmental entity, including those relating to Hazardous Substances (as
defined below) ("Environmental Laws") in connection with the Business, and all
of such Permits are in full force and effect. All such Permits are listed on
Schedule 3.8 attached hereto and any that are not transferable are so
designated. The Company has complied with and is not in violation of
Environmental Laws. The Company has made timely application for renewals of all
such Permits for which Environmental Laws require that applications must be
filed on or before the Closing to maintain such Permits in full force and
effect. Neither Seller nor the Company has reason to believe that such renewals
will not be issued in the ordinary course or will require payment of money or
imposition of conditions, other than as set forth in Schedule 3.8.
(b) No notice, citation, summons or order has been issued, no complaint has
been filed, no penalty has been assessed and no investigation or review is
pending, or to Seller's Knowledge threatened, by any governmental or other
entity: (i) with respect to any alleged violation by the Company of any
Environmental Laws; (ii) with respect to any alleged failure by the Company to
have any Permit required in connection with the Business; or (iii) with respect
to any use, possession, generation, treatment, storage, recycling,
transportation or disposal (collectively, "Management" or "Manage") of any
hazardous or toxic substance or waste, pollutant or contaminant including
petroleum products and radioactive materials ("Hazardous Substances") by or on
behalf of the Company or any Predecessor in Interest of the Company.
(c) The Company has not received any written request for information,
notice of claim, demand or notification that it is or may be potentially
responsible with respect to any
54
investigation or cleanup of any threatened or actual Release (as defined below)
of any Hazardous Substance.
(d) Except as set forth on Schedule 3.12(d): (i) the Company has not used,
generated, treated, stored for more than ninety (90) days, recycled or disposed
of any Hazardous Substances on any property now or previously owned, operated or
leased by the Company, nor to Seller's Knowledge has any other Person treated,
stored for more than ninety (90) days, recycled or disposed of any Hazardous
Substances on any property now or previously owned, operated, or leased by the
Company at any time during the Company's ownership, lease, or operation of such
property; (ii) no polychlorinated biphenyls ("PCBs") or asbestos-containing
materials are or have been present at any property now or previously owned,
operated or leased by the Company at any time during the Company's ownership,
operation, or lease of such property; and (iii) no underground storage tanks,
active or abandoned, are or have been present at any property now or previously
owned, operated or leased by the Company at any time during the Company's
ownership, operation, or lease of such property.
(e) No Hazardous Substance Managed by the Company has been recycled,
treated, stored, disposed of or transported by any Person other than those
listed on Schedule 3.12(e). Except as set forth on Schedule 3.12(e), no
Hazardous Substance Managed by or on behalf of the Company or any Predecessor in
Interest of the Company has come to be located at any site which is listed or
proposed for listing under the National Priority List promulgated pursuant to
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), the Comprehensive Environmental Response,
Compensation and Liability Information System ("CERCLIS") or on any similar
state list, or which is the subject of federal, state or local enforcement
actions or other investigations which may lead to claims against the Company or
Buyer for clean-up costs, remedial work, damages to natural resources or for
personal injury claims, including, but not limited to, claims under CERCLA.
(f) Except as set forth in Schedule 3.12(f), no Hazardous Substance has
been released, spilled, leaked, discharged, or disposed of, pumped, poured,
emitted, emptied, injected, leached, dumped or allowed to escape ("Released")
at, on, about or under any property now or formerly owned, operated or leased by
the Company or any Predecessor in Interest of the Company at any time during the
ownership, operation, or lease of such property by the Company or a Predecessor
in Interest of the Company, which Release would have a Material Adverse Effect.
(g) Except as set forth in Schedule 3.12(g), no oral or written
notification of a Release or threat of Release of a Hazardous Substance has been
filed by or on behalf of the Company or in relation to any property now or
previously owned, operated or leased by the Company or any Predecessor in
Interest of the Company. No property currently owned, leased, or operated by the
Company is listed or proposed for listing on the National Priority List
promulgated pursuant to CERCLA or CERCLIS or on any similar state list of sites
requiring investigation or clean-up.
55
(h) There are no environmental liens on any properties currently owned or
leased by the Company and no government actions have been taken or are in
process or pending which could subject any of such properties to such liens.
(i) The Company would not be required to place any notice or restriction
relating to the presence of Hazardous Substances in the deed to any property
currently owned by it, and to Seller's Knowledge no property now or formerly
owned by the Company has such notice or restriction in its deed.
(j) No consent, approval or authorization of, or registration or filing
with any Person, including any environmental governmental authority or
regulatory agency, is required in connection with the execution and delivery of
this Agreement or the consummation of the transactions contemplated hereby. The
Company has or will prepare and file all applications for Permit transfers, if
any, in adequate time for transfer to occur prior to the Closing.
(k) Except as set forth in Schedule 3.12(k) and as heretofore provided to
Buyer, to Seller's Knowledge there have been no environmental inspections,
investigations, studies, audits, tests, reviews or other analyses conducted in
relation to any property now or previously owned, operated or leased by the
Company.
(l) Neither Seller nor the Company has Knowledge of any other facts or
circumstances related to the properties of the Company or any Predecessor in
Interest of the Company, or to the Business, that could reasonably be expected
to lead to any future environmental claims, liabilities or responsibilities
affecting the Company or Buyer.
Section 3.13. Tax Matters.
(a) All Tax Returns that are required to have been filed by the Company
have been filed within the time and in the manner required by law, and all such
Tax Returns are in all material respects true and correct and accurately reflect
the Tax liabilities of the Company. All Taxes of the Company that have become
due pursuant to such Tax Returns, or any assessments or demand for payment
received, have been paid. The provision for Taxes reflected on the Company's
December 31, 1996, balance sheet is adequate to cover all Tax liabilities,
whether or not disputed, of the Company and any Predecessor in Interest of the
Company with respect to any taxable year or taxable period ending on or before
December 31, 1996, and nothing has occurred subsequent to December 31, 1996, to
make any such provision inadequate. All Taxes related to taxable periods of the
Company subsequent to December 31, 1996, have been paid or are adequately
reserved for on the books and records of the Company. Except as set forth in
Schedule 3.13(a), there are no current, pending, or to Seller's Knowledge or the
Company's Knowledge threatened, claims, assessments, notices, proposals to
assess, deficiencies, or audits with respect to any Taxes. No Governmental Body
with respect to which the Company does not file Tax Returns has claimed that the
Company is or may be subject to taxation by that Governmental Body. The Company
has withheld and paid all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, shareholder, creditor,
independent contractor or other party. The Company has not executed any
presently effective waiver or extension of any statute of limitations against
assessments and collections of Taxes. Except as set forth in Schedule 3.13(a),
no Tax Returns of the Company are presently subject to an extension of time to
file.
56
(b) The Company has not filed and has not had filed on its behalf an
election under Section 341(f) of the Code that is applicable to the Company or
any of its assets. The Company has not made any payments, is not obligated to
make any payments, nor is a party to any agreement that under any circumstances
could obligate it to make any payments that will not be deductible under Code
Section 280G. The Company is not a party to any Tax allocation or sharing
agreement. Except as disclosed on Schedule 3.13(b)(i), the Company (or any
Predecessor in Interest of the Company), has never been a member of an
affiliated group that elected to file or was required to file consolidated
returns for federal income tax purposes or consolidated, combined or unitary tax
returns for state or local income tax purposes. Except for this Agreement, and
except as set forth in Schedule 3.13(b)(ii), there is no agreement with any
Person pursuant to which the Company would have any obligation after Closing in
respect of Taxes of such other Person.
(c) None of the assets of the Company is property that the Company is
required to treat as being owned by any other Person pursuant to the "safe
harbor lease" provisions of former Section 168(f)(8) of the Code. None of the
assets of the Company directly or indirectly secures any debt the interest on
which is tax-exempt under Section 103(a) of the Code. None of the assets of the
Company is "tax-exempt use property" within the meaning of Section 168(h) of the
Code.
(d) The Company has not agreed to make nor is it required to make any
adjustment under Section 481(a) of the Code by reason of a change in accounting
or otherwise.
(e) Neither the Company nor Seller is a "foreign person" within the meaning
of the Code and the Regulations.
(f) The Company has no interest in any entity that is treated as a
partnership for federal income tax purposes.
(g) Except as disclosed in Schedule 3.13(g), the Company is not a successor
to any other business entity by way of merger, reorganization, liquidation or
similar transaction.
(h) There is no ruling issued to the Company, or closing agreement or gain
recognition agreement to which the Company is a party, concerning Taxes from or
with any Governmental Body which would have a continuing effect on the Company
after the Closing Date.
57
Section 3.14. Employee Benefit Plans.
(a) Schedule 3.14(a) lists all "employee benefit plans," as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and all pension, profit sharing, retirement, supplemental retirement,
stock, stock option, basic and supplemental accidental death and dismemberment,
basic and supplemental life and health insurance, post-retirement medical or
life, welfare, dental, vision, savings, bonus, deferred compensation, incentive
compensation, business travel and accident, holiday, vacation, severance pay,
salary continuation, sick pay, sick leave, short and long term disability,
tuition refund, service award, company car, scholarship, relocation, patent
award, fringe benefit and other employee benefit plans, arrangements, contracts,
policies, or practices whether written or unwritten, qualified or unqualified,
funded or unfunded, (i) maintained, contributed to, or required to be
contributed to by the Company or any ERISA Affiliate (as defined below) with
respect to any Company employees, or (ii) pursuant to which the Company or any
ERISA Affiliate may have any liability with respect to any Company employees,
within the United States (the "Benefit Plans"). For purposes of this Agreement,
the term "ERISA Affiliate" means: (i) any corporation included with the Company
in a controlled group of corporations within the meaning of Section 414(b) of
the Code; (ii) any trade or business (whether or not incorporated) which is
under common control with the Company within the meaning of Section 414(c) of
the Code; (iii) any member of an affiliated service group of which the Company
is a member within the meaning of Section 414(m) of the Code; or (iv) any other
person or entity treated as an affiliate of the Company under Section 414(o) of
the Code.
(b) As applicable, with respect to each of the Benefit Plans, true and
complete copies of the following have been delivered to Buyer: (i) all plan
documents (including all amendments and modifications thereof) pertaining to the
"Graseby Savings and Investment Plan" and the Company's medical plan with United
Health Care of North Carolina, Inc., and in the case of an unwritten Benefit
Plan a written description thereof; (ii) the filed Form 5500 series and all
schedules thereto, as applicable, for 1993, 1994 and 1995; (iii) the "Financial
Statements and Supplemental Schedules to the Graseby Savings and Investment
Plan" for 1992, 1993, 1994, and 1995; and (iv) copies of determination letters
issued with respect to the Benefit Plans within the past five years.
(c) The Company and each ERISA Affiliate are in compliance in all material
respects with the provisions of ERISA and the Code applicable to the Benefit
Plans. Each Benefit Plan has been maintained, operated and administered in
compliance in all material respects with its terms and any related documents or
agreements and the applicable provisions of ERISA and the Code.
(d) No Benefit Plan is, or at any time has been, a "multiemployer plan" as
defined in Section 3(37) of ERISA.
(e) The Company's 401(k) plan is the only Benefit Plan which are "employee
pension benefit plans" within the meaning of Section 3(2) of ERISA and which are
intended to meet the qualification requirements of Section 401(a) of the Code
(each a "Pension Plan"). Each Pension Plan now meets and at all times since its
inception has met the qualification requirements of Section 401(a) of the Code
and each related trust is now, and at all times since its inception has been,
exempt from taxation under Section 501(a) of the Code.
(f) Each Pension Plan has received a determination letter from the IRS to
the effect that such Pension Plan is qualified and all related trusts are exempt
from federal income taxes and no determination letter with respect to any
Pension Plan has been revoked nor, is there any reason for such revocation, nor
has any Pension Plan been amended since the date of its most recent
determination letter in any respect which would adversely affect its
qualification.
(g) All contributions to, and payments from, any Benefit Plan which may
have been required in accordance with the terms of such Benefit Plan or any
related document and, when applicable, Section 302 of ERISA or Section 412 of
the Code, have been timely made. No Benefit Plan has incurred an "accumulated
funding deficiency" within the meaning of Section 302 of ERISA or Section 412 of
the Code, nor has any waiver of the minimum funding standards of Section 302 of
ERISA or Section 412 of the Code been requested, or granted, with respect to any
Benefit Plan. The funding method used in connection with each Benefit Plan which
is subject to the minimum funding requirements of ERISA and the Code is
acceptable under current IRS guidelines, and the actuarial assumptions used in
connection with funding each such Benefit Plan are reasonable.
58
(h) Each Benefit Plan subject to Title IV of ERISA has assets sufficient on
a plan termination basis to be eligible on the Closing Date for standard
termination pursuant to Section 4041 of ERISA. The PBGC has not instituted
proceedings to terminate any Benefit Plan or to appoint a trustee or
administrator of any such Benefit Plan, and no circumstances exist that
constitute grounds under Title IV of ERISA for any such proceeding. There has
been no "reportable event" within the meaning of Section 4043 of ERISA that has
not been fully and accurately reported in a timely fashion, as required, or
which, whether or nor reported, would authorize the PBGC to institute
termination proceedings with respect to any Benefit Plan. No liability under
Title IV of ERISA has been incurred or is expected to be incurred that could
result in liability to any Benefit Plan, the Seller, any ERISA Affiliate or the
Buyer, other than for premiums pursuant to Section 4007 of ERISA that are not
yet due.
(i) There are no pending audits or investigations by any governmental
agency involving the Benefit Plans, and no pending, or to Seller's Knowledge
threatened, claims (except for individual claims for benefits payable in the
normal operation of the Benefit Plans), suits or proceedings involving any
Benefit Plan, any fiduciary thereof or service provider thereto, nor to the
Knowledge of the Seller is there any reasonable basis for any such claim, suit
or proceeding.
(j) Neither the Company nor any ERISA Affiliate, or any employee of the
Company or any ERISA Affiliate, has engaged in a "prohibited transaction" within
the meaning of Section 406 of ERISA or Section 4975 of the Code, nor has any
such Person breached any duty imposed by Title I of ERISA, with respect to any
Benefit Plan. To the Knowledge of Seller, no other Person has engaged in such a
prohibited transaction or breach.
(k) Any insurance premium under any insurance policy related to a Benefit
Plan for any period up to and including the Closing Date has been paid, or
accrued and booked on or before the Closing Date, and, with respect to any such
insurance policy or premium payment obligation, none of the Company, or any
ERISA Affiliate nor Buyer shall be subject to a retroactive rate adjustment,
loss sharing arrangement or other actual or contingent liability.
(l) With respect to each Benefit Plan that is a "group health plan" within
the meaning of Section 607 of ERISA and that is subject to Section 4980B of the
Code, the Company and each ERISA Affiliate comply in all material respects with
the continuation coverage requirements of the Code and ERISA.
(m) Except as set forth in Schedule 3.14(m), no Benefit Plan provides
benefits, including, without limitation, death or medical benefits, beyond
termination of service or retirement other than (i) coverage mandated by law or
(ii) death or retirement benefits under a Benefit Plan qualified under Section
401(a) of the Code.
59
(n) Except as set forth in Schedule 3.14(n), the execution of, and
performance of the transactions contemplated by, this Agreement will not
constitute an event under the "Graseby Savings and Investment Plan" or the
Company's medical plan with United Health Care of North Carolina, Inc. that will
result in any payment (whether as severance pay or otherwise), acceleration,
vesting or increase in benefits with respect to any employee. Except as set
forth in Schedule 3.14(n), no Benefit Plan provides for "parachute payments"
within the meaning of Section 280G of the Code.
(o) Schedule 3.14(o) lists all pension, profit sharing, retirement,
supplemental retirement, stock, stock option, basic and supplemental accidental
death and dismemberment, basic and supplemental life and health insurance,
post-retirement medical or life, welfare, dental, vision, savings, bonus,
deferred compensation, incentive compensation, business travel and accident,
holiday, vacation, severance pay, salary continuation, sick pay, sick leave,
short and long term disability, tuition refund, service award, company car,
scholarship, relocation, patent award, fringe benefit and other employee benefit
plans, arrangements, contracts, policies or practices whether written or
unwritten, funded or unfunded (i) maintained, contributed to, or required to be
contributed to by the Company or any Affiliate with respect to any Company
employees, or (ii) pursuant to which the Company or any Affiliate may have any
liability with respect to any Company employees, outside the United States (the
"Foreign Plans").
(p) A true and complete copy of each Foreign Plan, including all amendments
and modifications thereof (and in the case of an unwritten Foreign Plan, a
written description thereof), together with all related agreements including,
without limitation, trust agreements, insurance contracts and investment
management agreements have been delivered to Buyer.
(q) Each Foreign Plan has been maintained, operated and administered in
compliance in all material respects with its terms and any related documents or
agreements and with all applicable laws.
(r) There are no unfunded liabilities with respect to any Foreign Plan and
all contributions and other payments required to be made by the Company or any
affiliate to any Foreign Plan with respect to any period up to and including the
Closing Date shall have been made or accrued and booked on or before the Closing
Date.
(s) There are no pending audits or investigations by any governmental or
quasi-governmental agency involving the Foreign Plans and pending, or to
Seller's Knowledge threatened, claims (except for individual claims for benefits
payable in the normal operation of the Foreign Plan), suits or proceedings
involving any Foreign Plan, any fiduciary thereof or service provider thereto,
nor to the Knowledge of the Seller is there any reasonable basis for any such
claim, suit or proceeding.
60
Section 3.15. Certain Contracts.
(a) Except as set forth in Schedule 3.15(a), as of the date hereof the
Company is not a party to, bound or affected by, nor receives benefits under (in
each case whether written or oral): (i) any Significant Contract; (ii) any
Significant Lease; (iii) any agreement, arrangement or commitment relating to
the employment of an independent contractor or the employment, election or
retention in office of any present or former officer, director, or employee,
other than contracts terminable at will or on less than thirty (30) days' notice
with no liability other than paying that person's usual compensation through the
date of termination; or (iv) any collective bargaining agreement or other
understanding with a labor union.
(b) All agreements to which the Company is a party or by which it is bound
are in full force and effect. The Company (i) is not in default under any such
agreement, (ii) has not, during the three-year period immediately prior to the
Closing, been in default under any agreement with any of its distributors or
agents, which default could have a Material Adverse Effect, and (iii) to
Seller's Knowledge, all other parties to any agreement to which the Company is a
party or by which it is bound have complied with the provisions thereof. To
Seller's Knowledge, no such other party is in default, which default would have
a Material Adverse Effect, under any Significant Contract, Significant Lease, or
any agreement, commitment, arrangement or other indenture described in Section
3.15(a), whether written or oral, and there has not occurred any event that,
with the lapse of time or giving of notice or both, would constitute such a
default.
Section 3.16. Legal Proceedings; Regulatory Approvals.
Except as set forth in Schedule 3.16, as of the date hereof there are: (i)
no outstanding injunctions, judgments, orders, decrees, rulings or regulatory
directives against the Company or to which the Company is a party; and (ii) no
actions, suits, claims, governmental investigations or proceedings have been
instituted, are pending, or to the Knowledge of Seller are threatened, against
the Company that in any such case, if decided adversely, would reasonably be
expected to have a Material Adverse Effect. There are no actual or, to Seller's
Knowledge threatened, actions, suits or proceedings against the Company which
present a claim to restrain or which would have the effect of prohibiting the
transactions contemplated herein.
Section 3.17. Compliance with Laws.
The Company is, and for the three-year period immediately prior to the
Closing has been, in compliance in all respects with all federal, state, and
local statutes and regulations applicable to the conduct of the Business (except
for any violations that do not have a Material Adverse Effect), and the Company
has not received notification from any agency or department of federal, state or
local government (i) asserting a violation or possible violation of any such
statute or regulation, which violation would have a Material Adverse Effect,
(ii) threatening to revoke any License, or (iii) restricting or limiting in any
respect its operation of the Business, which restriction or limitation would
have a Material Adverse Effect.
61
Section 3.18. Brokers and Finders.
Except as set forth in Schedule 3.18 hereto, neither Seller, the Company,
nor any of their respective officers, directors, employees or Affiliates has
employed any broker, finder or financial advisor or incurred any liability for
any fees or commissions or other payments in connection with the transactions
contemplated herein (except for fees to accountants, lawyers and advisors).
Section 3.19. Inventory.
All of the inventories of the Company are valued at the lower of cost or
market value, the cost thereof being determined on a first-in, first-out basis,
except as disclosed in the Financial Statements. Attached hereto as Schedule
3.19 is a summary of the Company's inventory of finished goods as of the last
day of the month for the month immediately preceding the present month. All of
the net inventories of the Company reflected in the balance sheet dated December
31, 1996 (the "Balance Sheet") and all such inventories acquired since the date
of the Balance Sheet consist of items of a quality and quantity useable and
saleable in the Ordinary Course of Business within a reasonable period of time
and at normal profit margins.
Section 3.20. Accounts Receivable.
All of the accounts and notes receivable of the Company represent amounts
receivable for merchandise actually delivered or services actually provided (or,
in the case of non-trade accounts or notes represent amounts receivable in
respect of other bona-fide business transactions), have arisen in the Ordinary
Course of Business, are not subject to any defenses, counterclaims or offsets
and have been billed and are generally due within thirty (30) days after such
billing. Schedule 3.20 attached hereto sets forth (a) the total amount of
accounts receivable of the Company outstanding as of the last day of the month
immediately preceding the present month, and (b) the agings of such receivables
based on the following schedule: 0-30 days, 31-60 days, 61-90 days, and over 90
days, from the due date thereof. All such receivables are fully collectible in
the Ordinary Course of Business of the Company, except to the extent of a
reserve in an amount not in excess of the reserve for doubtful accounts
reflected on the Balance Sheet.
Section 3.21. No Undisclosed Liabilities.
The Company has no liability or obligation of any nature, whether due or to
become due, absolute, contingent or otherwise, including liabilities for or in
respect of federal, state and local taxes and any interest or penalties relating
thereto, except (a) to the extent reflected as a liability on the Balance Sheet,
(b) liabilities incurred in the Ordinary Course of Business since December 31,
1996, and of the same character, kind and magnitude as are consistent with past
practice and fully reflected as liabilities on the Company's books of account,
none of which would have a Material Adverse Effect, and (c) liabilities
disclosed on Schedule 3.21 attached hereto.
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Section 3.22. Title.
The Company has good and marketable title to all of its personal properties
and assets, including the properties and assets reflected in the Balance Sheet
(except those disposed of in the Ordinary Course of Business since December 31,
1996), free and clear of any mortgage, pledge, lien, restriction, encumbrance,
tenancy, license, encroachment, covenant, condition, right of way, easement,
claim, security interest, charge or any other matter affecting title, except (a)
minor imperfections of title, none of which, individually or in the aggregate,
materially detracts from the value of or impairs the use of the affected
properties or impairs the operations of the Company, (b) liens for current taxes
not yet due and payable, and (c) Permitted Exceptions (as set forth in Schedule
3.22).
Section 3.23. Transactions with Related Parties.
Except as disclosed on Schedule 3.23 attached hereto, no Related Party:
(a) has borrowed money or loaned money to the Company that has not
been repaid;
(b) has any contractual or other claim, express or implied, of any
kind whatsoever against the Company;
(c) has any interest in any Intangibles used by the Company with
respect to the Business; or
(d) has been engaged, since January 1, 1996, in any other transaction
(or series of transactions) involving in excess of Twenty Five
Thousand Dollars ($25,000) in any twelve-month period with the
Company (other than employment relationships at the salaries
disclosed on Schedule 3.24 attached hereto).
Section 3.24. Compensation Arrangements; Bank Accounts; Officers and Directors.
Schedule 3.24 attached hereto sets forth the following information:
(a) the names and current annual salary, including any bonus, if
applicable, of all present officers and employees of the Company
whose current annual salary, including any promised, expected or
customary bonus, equals or exceeds Fifty Thousand Dollars
($50,000), together with a statement of the full amount of all
remuneration paid by the Company to each such person and to any
director of the Company, during the twelve-month period preceding
the date hereof; and
(b) the name of each bank in which the Company has an account or safe
deposit box, the identifying numbers or symbols thereof and the
names of all persons authorized to draw thereon or to have access
thereto; and the names and titles of all directors and officers
of the Company and of each trustee, fiduciary or plan
administrator of each employee benefit plan of the Company.
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Section 3.25. Labor Relations.
Except as set forth in Schedule 3.25 attached hereto: (a) no employee of
the Company is represented by any union or other labor organization; (b) there
is no unfair labor practice complaint against the Company pending, or to
Seller's Knowledge threatened, before the National Labor Relations Board; (c)
there is no labor strike, dispute, slow down or stoppage actually pending or, to
Seller's Knowledge threatened, against or involving the Company; (d) no
grievance is pending which would have a Material Adverse Effect; (e) no private
agreement restricts the Company from relocating, closing or terminating any of
its operations or facilities; and (f) the Company in the past three (3) years
has not experienced any work stoppage or other labor difficulty or committed any
unfair labor practice.
Section 3.26. Products Liability.
Except for lawsuits, claims, damages and expenses adequately covered by
insurance or fully indemnified by the Company's suppliers, and except as
disclosed on Schedule 3.26 attached hereto, there are no (a) liabilities of the
Company, fixed or contingent, asserted or unasserted, with respect to any
product liability or any similar claim that relates to any product stored,
distributed or sold by the Company to others, or (b) liabilities of the Company,
fixed or contingent, asserted or unasserted, with respect to any claim for the
breach of any express or implied product warranty or any other similar claim
with respect to any product stored, distributed or sold by the Company to
others.
Section 3.27. Insurance.
Attached hereto as Schedule 3.27 is a complete and correct list of all
policies and binders of insurance of which the Company is the owner, insured or
beneficiary, or covering any of its property (showing for each policy or binder,
the carrier, risks insured, the amounts of coverage, deductible, premium rate,
cash value if any, expiration date and any pending claims thereunder). All such
policies are outstanding and in full force and effect. There is no default with
respect to any provision contained in any such policy, nor has there been any
failure to give any notice or present any claim under any such policy in a
timely fashion or in the manner or detail required by the policy. There are no
outstanding unpaid premiums or claims under such policies. Schedule 3.27
attached hereto contains an accurate and complete description of any provision
contained in such policies which provide for retrospective or retroactive
premium adjustments. No notice of cancellation or non-renewal with respect to,
or disallowance of any claim under, any such policy has been received by the
Company. The Company has not been refused any insurance, nor has its coverage
been limited by any insurance carrier to which it has applied for insurance or
with which it has carried insurance, during the last five years. Since January
1992, all products liability and general liability policies maintained by or for
the benefit of the Company have been "occurrence" policies and not "claims made"
policies; Schedule 3.27 attached hereto contains a complete and correct list of
all such products liability and general liability policies, indicating for each
policy, the carrier, risks insured, the amount and dates of coverage, deductible
and any pending claims thereunder; and all such policies are in full force and
effect.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
Section 4.1. Organization, Standing and Authority of Buyer.
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the Commonwealth of Pennsylvania with full corporate
power and authority to carry on its business as now conducted and is duly
qualified to do business in the states of the United States and foreign
jurisdictions where its ownership or leasing of property or the conduct of its
business requires such qualification.
Section 4.2. Authorized and Effective Agreement.
(a) Buyer has all requisite corporate power and authority to enter into and
perform all of its obligations under this Agreement. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate action in
respect thereof on the part of Buyer. This Agreement constitutes a legal, valid
and binding obligation of Buyer, enforceable against it in accordance with its
terms subject, as to enforceability, to bankruptcy, insolvency and other laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
(b) Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, nor compliance by Buyer
with any of the provisions hereof shall (i) conflict with or result in a breach
of any provision of the articles or certificate of incorporation (or charter) or
bylaws of Buyer, (ii) constitute or result in a breach of any term, condition or
provision of, or constitute a default under, or give rise to any right of
termination, cancellation or acceleration with respect to, or result in the
creation of any lien, charge or encumbrance upon any property or asset of Buyer
pursuant to, any note, bond, mortgage, indenture, license, agreement or other
instrument or obligation, or (iii) subject to receipt of all required Consents,
violate any order, ruling, decree, charge, writ, injunction, regulatory
agreement or memorandum of understanding, constitution, statute, rule or
regulation applicable to Buyer.
Section 4.3. Legal Proceedings; Regulatory Approvals.
There are no actual, or to the Knowledge of Buyer threatened, actions,
suits or proceedings which present a claim or restrain or prohibit the
transactions contemplated herein. To the Knowledge of Buyer, Buyer is qualified
legally, financially and otherwise to become the owner, as contemplated herein,
of the Shares.
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Section 4.4. Securities.
Solely for purposes of enabling Seller to comply with applicable federal
and state securities laws: (a) Buyer acknowledges that the offering and sale of
the Shares pursuant hereto will not be registered under the Securities Act of
1933, as amended, or any other securities laws (the "Acts") and that the Shares
are characterized as "restricted securities" under the Acts and may not be
transferred unless a registration statement for the re-offering and sale of the
Shares is appropriately filed or unless the Shares are subject to exemption from
registration under the Acts; and (b) Buyer agrees that it (i) shall acquire the
Shares for investment for its own account, not as a nominee or agent and not
with a view to the resale or distribution of any part thereof, (ii) has no
present intention of selling, granting or participating in, or otherwise
distributing all or part of the Shares, (iii) has had sufficient opportunity to
ask questions and receive answers from Seller and the Company regarding the
Company, the Business, and the terms and conditions of this Agreement, (iv) has
received all the information it considers necessary or appropriate for deciding
whether to acquire the Shares, and if so under what terms and conditions, (v) is
an "accredited investor," as defined in Rule 501(a) under Regulation D adopted
by the Securities and Exchange Commission under the Securities Act of 1933, (vi)
has no need for liquidity in its investment in the Shares, and (vii) is aware of
and able to bear the risks of the investment in the Shares for an indefinite
period of time.
Section 4.5. Brokers and Finders.
Neither Buyer nor its officers, directors, employees or Affiliates has
employed any broker, finder or financial advisor or incurred any liability for
any fees or commissions or other payments in connection with the transactions
contemplated herein (except for fees to accountants, lawyers, and advisors).
ARTICLE V
CONDITIONS PRECEDENT
Section 5.1. Conditions Precedent -- Buyer and Seller.
The respective obligations of Buyer and Seller to effect the transactions
contemplated by this Agreement shall be subject to satisfaction or waiver of the
following conditions at or prior to the Effective Time: Neither Buyer, Seller,
nor the Company shall be subject to any order, decree, judgment, ruling or
injunction of a court or governmental body of competent jurisdiction which
enjoins or prohibits consummation of the transactions contemplated herein, nor
shall any of them be a party or subject to any pending action, suit or
proceeding before any court or governmental agency of competent jurisdiction
wherein an unfavorable order, decree, judgment, ruling or injunction would (i)
enjoin or prohibit consummation of the transactions contemplated herein, (ii)
cause any of the transactions contemplated herein to be rescinded following
consummation, (iii) adversely affect the right of Buyer to own and/or to vote
the Shares or to control the Company, or (iv) affect adversely the right of the
Company to own its assets and to operate the Business.
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Section 5.2. Conditions Precedent -- Seller.
The obligations of Seller to effect the transactions contemplated by this
Agreement shall be subject to satisfaction of the following additional
conditions at or prior to the Effective Time unless waived by Seller pursuant to
Article VII hereof:
(a) The representations and warranties of Buyer set forth in Article IV
hereof shall be true and correct in all material respects as of the date of this
Agreement and as of the Effective Time with the same force and effect as though
such representations and warranties had been made on, as of, and with reference
to such Effective Time;
(b) Buyer shall have performed all obligations and complied with all
covenants required by this Agreement to be performed by Buyer on or before
Closing;
(c) Buyer shall have demonstrated its ability to make the deliveries
required of it pursuant to this Agreement;
(d) The Company shall have received the Consents;
(e) Buyer shall have assumed responsibility for payment of the severance
obligations of the Company set forth in Schedule 5.2(e) attached hereto; and
(f) All instruments and documents required on Buyer's part to effectuate
and consummate the transactions contemplated hereby shall be delivered to Seller
and shall be in form and substance reasonably satisfactory to Seller and its
counsel.
Section 5.3. Conditions Precedent -- Buyer.
The obligations of Buyer to effect the transactions contemplated by this
Agreement shall be subject to satisfaction of the following additional
conditions at or prior to the Effective Time unless waived by Buyer pursuant to
Article VII hereof:
(a) The representations and warranties of Seller set forth in Article III
hereof shall be true and correct in all material respects as of the date of this
Agreement and as of the Effective Time with the same force and effect as though
such representations and warranties had been made on, as of, and with reference
to such Effective Time;
(b) Seller and the Company shall have in all material respects performed
all material obligations and complied with all material covenants required by
this Agreement to be performed by them on or before Closing;
(c) Seller shall have demonstrated its ability to make the deliveries
required pursuant to this Agreement;
(d) The Company shall have received the Consents;
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(e) All instruments and documents required on Seller's and the Company's
part to effectuate and consummate the transactions contemplated hereby shall be
delivered to Buyer and shall be in form and substance reasonably satisfactory to
Buyer and its counsel;
(f) No order of any court or administrative agency shall be in effect which
restrains or prohibits the transactions contemplated hereby or which would limit
or adversely affect Buyer's ownership or control of the Company or the Business,
and there shall not have been threatened, nor shall there be pending, any action
or proceeding by or before any court or governmental agency or other regulatory
or administrative agency or commission, (i) challenging any of the transactions
contemplated by this Agreement or seeking monetary relief by reason of the
consummation of such transactions or (ii) by any present or former owner of any
capital stock or equity interest in the Company (whether through a derivative
action or otherwise) against the Company or any officer, director or shareholder
of the Company in his, her or its capacity as such or (iii) which might have a
Material Adverse Effect;
(g) All loans by the Company to any Related Party shall have been repaid in
full and there shall be no outstanding debts or obligations due from any Related
Party to the Company;
(h) Buyer shall have received all Licenses, Permits and certificates and
governmental approvals listed on Schedule 3.8;
(i) Seller shall have delivered to Buyer the written resignation of each
member of the board of directors and each of the officers of the Company;
(j) Buyer shall have obtained, at Buyer's expense, a good and valid,
irrevocable ALTA title insurance binder or commitment (the "Title Commitment"),
in final form from First American Title Insurance Company (the "Title Company"),
committing the Title Company to issuing an ALTA extended coverage form of title
insurance policy (the "Title Policy") insuring the Buyer's fee title to the Real
Property in the amount of not less than Six Hundred Thousand Dollars
($600,000.00), subject to no Liens or exceptions to title other than the
Permitted Exceptions; provided that the commitment of the Title Company to issue
the Title Policy may be subject to and the Title Commitment may set forth or be
subject to such standard requirements relating to the issuance of final policies
of title insurance as are reasonably acceptable to Buyer and to the payment of
the Title Company's premiums and other charges for the issuance of the Title
Policy. The Title Commitment shall be effective as of a date occurring not
earlier than April 18, 1997 and, if required by Buyer, the effective date of the
Title Commitment shall be brought down to the morning of the Closing Date; and
(k) Buyer shall have received from Seller and Graseby plc a release in the
form of Exhibit D attached hereto.
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ARTICLE VI
CLOSING
The transactions contemplated by this Agreement shall be consummated at
a closing (the "Closing") to be held at the offices of Seller's counsel, Brooks,
Pierce, XxXxxxxx, Xxxxxxxx & Xxxxxxx, L.L.P., Suite 2000, Renaissance Plaza, 230
North Elm Street, Greensboro, North Carolina, or such other place as may be
agreed to by Buyer and Seller, on the date hereof or such later date as may be
agreed to by Buyer and Seller (the "Closing Date"). The Sale shall be effective
as of the Closing on the Closing Date or at such other time and date specified
by the parties at the Closing (the "Effective Time"); provided, however, that
solely for financial accounting and Tax reporting purposes, the Sale shall be
deemed effective as of 11:59:59 o'clock p.m., Greensboro, North Carolina local
time, on the Closing Date.
At Closing: (a) Seller shall deliver to Buyer (i) the various certificates,
instruments and documents required of it pursuant to this Agreement, (ii) stock
certificates representing ownership of the Shares, endorsed for transfer to
Buyer, and (iii) any other documents that are necessary to transfer to Buyer
good title to the Shares free and clear of all liens, claims, security
interests, pledges, charges, equities, options, restrictions, and encumbrances
of whatever nature; and (b) Buyer shall (i) deliver to Seller the various
certificates, instruments and documents required of it pursuant to this
Agreement, (ii) deliver to Seller copies of resolutions adopted by Buyer
authorizing and approving the execution of this Agreement and the consummation
of the transactions contemplated herein, certified by Buyer's Secretary as being
true and correct on the Closing Date, and (iii) deliver to Seller the Purchase
Price in immediately available funds.
In the case at any time after the Effective Time any further action is
necessary to carry out the purposes of this Agreement, Seller and Buyer shall
take such further action (including the execution and delivery of such further
instruments and documents) as the other may reasonably request, all at the sole
cost and expense of the requesting party.
ARTICLE VII
WAIVER
Except with respect to any required regulatory approval, each party hereto
by written instrument, may at any time extend the time for the performance of
any of the obligations or other acts of the other party hereto and may waive (a)
any inaccuracies of the other party in the representations and warranties
contained in this Agreement or any document delivered pursuant hereto, (b)
compliance with any of the covenants, undertakings or agreements of the other
party, or satisfaction of any of the conditions precedent to its obligations,
contained herein or (c) the performance by the other party of any of its
obligations set out herein. No waiver by either such party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
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ARTICLE VIII
CERTAIN POST-CLOSING OBLIGATIONS
Section 8.1. Confidential Information.
Seller acknowledges that after the Closing, Buyer could be irreparably
damaged if Seller's or any of its Affiliates' confidential knowledge of the
operations of the Company were disclosed to or utilized on behalf of any Person
other than Buyer or its Affiliates, and Seller covenants and agrees that it will
not following the Closing, without the prior written consent of Buyer, disclose
(or permit to be disclosed) or use in any way any such confidential information,
unless (i) compelled to disclose such confidential information by judicial or
administrative process or, in the opinion of its counsel, by other requirements
of law, or (ii) such confidential information is generally available to the
public through no fault of Seller.
Section 8.2. Indemnification by Seller, Graseby Xxxxxxxx Inc. and Graseby plc.
(a) Extent of Indemnity. Seller and the Guarantors, jointly and severally,
hereby agree to indemnify, defend and hold harmless Buyer and the Company from
and against:
(i) any Damages of or to Buyer or the Company arising out of or resulting
from any misrepresentation or breach of representation or warranty of Seller
contained in this Agreement or in any agreement or statement or certificate
furnished or to be furnished by Seller or the Company to Buyer pursuant hereto
or in connection with the transactions contemplated hereby;
(ii) any Damages of or to Buyer or the Company arising out of or resulting
from any breach or nonfulfillment of any covenant or agreement of Seller
contained in this Agreement or in any agreement or statement or certificate
furnished or to be furnished by Seller or the Company to Buyer pursuant hereto
or in connection with the transactions contemplated hereby;
(iii) regardless of whether any of the following are contained in any
disclosure schedule to this Agreement or were otherwise disclosed to Buyer prior
to the Closing, any and all Damages known or unknown, foreseen or unforeseen,
whether contingent or otherwise, fixed or absolute, present or future, asserted
against or incurred by Buyer or the Company arising out of or related to (A) the
off-site transportation, storage, treatment, recycling or disposal of Hazardous
Materials Managed or Released by the Company or in connection with the Business
prior to the Closing; (B) any Release at, on, in or under the Real Property that
requires investigation, remediation, or other response action relating to or
arising from the Company's drum handling prior to Closing; and (C) any failure
by the Company at any time prior to the Closing to have any Permit or give any
notice required in connection with the Company's wastewater or other discharge
to the applicable sewer authority including without limitation fines, penalties,
and assessments arising from any such discharge;
(iv) the matters described on Schedule 8.2(a)(iv); and
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(v) any Damages incident to any of the foregoing, including reasonable
attorneys' fees actually incurred by Buyer as the prevailing party in an action
to enforce this Section.
(b) Time Limit on Certain Indemnification Claims. No action or claim for
Damages resulting from breaches of the representations and warranties of Seller
shall be brought or made after June 1, 1998, except that such time limitation
shall not apply to (i) claims for misrepresentations or breaches of warranty
relating to Sections 3.2 (Warranty of Title to the Shares), 3.3 (Capital
Structure of the Company), and 3.5 (Authorized and Effective Agreement; No
Violation), (ii) claims for misrepresentations or breaches of warranty relating
to Sections 3.13 (Tax Matters), 3.14 (Employee Benefit Plans), 3.18 (Brokers and
Finders), 3.23 (Transactions with Related Parties), or 9.1 (Authorized and
Effective Agreement; No Violations (Guarantors)), each of which may be asserted
until the running of the applicable statute of limitations with respect to the
period to which the particular claims relate, or (iii) any claims which have
been the subject of a written notice from Buyer to Seller prior to the
expiration of any of the foregoing periods, which notice specifies in reasonable
detail the nature of the claim. No action or claim for Damages pursuant to
Section 8.2(a)(iii)(A) or Section 8.2(a)(iii)(B) shall be brought by Buyer after
expiration of the five-year period commencing on the Closing Date. No action or
claim for Damages pursuant to Section 8.2(a)(iii)(C) shall be brought by Buyer
after the expiration of the three-year period commencing on the Closing Date.
(c) Limitations on Liability. None of Seller or either of the Guarantors
shall be required to make an indemnity payment for Damages arising pursuant to
Section 8.2(a)(i) unless and until the aggregate amount of Damages arising
pursuant to Section 8.2(a)(i) exceeds Two Hundred Thousand Dollars
($200,000.00)(the "Deductible"). Only Damages arising pursuant to Section
8.2(a)(i) which, with respect to a single claim or a series of related claims
arising pursuant to Section 8.2(a)(i), exceed Seven Thousand Five Hundred
Dollars ($7,500.00) shall be taken into account in determining whether the
Deductible has been reached. After the Deductible has been reached, Seller,
Graseby Xxxxxxxx Inc. and Graseby plc, jointly and severally, shall thereafter
(subject to the time limitations indemnification procedures set forth in this
section 8.2) be required to make an indemnity payment for Damages arising
pursuant to Section 8.2(a)(i) which, with respect to a single claim or a series
of related claims, in the aggregate exceed Seven Thousand Five Hundred Dollars
($7,500.00)(the "Basket"). None of Seller or either of the Guarantors shall have
any obligation to indemnify Buyer for aggregate indemnification payments arising
pursuant to Section 8.2(a)(i) in excess of the Purchase Price, notwithstanding
any provision in this Agreement to the contrary, provided. however, that the
foregoing limitations on liability shall not apply to Damages which arise (i)
from fraud or other intentional misrepresentations or omissions on the part of
Seller or the Company with respect to this Agreement or the transactions
contemplated by this Agreement, or (ii) a misrepresentation or breach of
warranty with respect to any one or more of Sections 3.2 (Warranty of Title to
the Shares), 3.3 (Capital Structure of the Company), 3.5 (Authorized and
Effective Agreement; No Violation), 3.13 (Tax Matters), 3.14 (Employee Benefit
Plans), 3.18 (Brokers and Finders), 3.23 (Transactions with Related Parties), or
9.1 (Authorized and Effective Agreement; No Violations (Guarantors)) For
purposes of this section, all qualifications in this Agreement regarding
Material Adverse Effects and materiality shall be disregarded for purposes of
applying the Deductible and the Basket to claims for Damages arising pursuant to
Section 8.2(a)(i).
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Section 8.3. Indemnification by Buyer.
Buyer hereby agrees to indemnify, defend and hold harmless Seller from and
against:
(a) any Damage of or to Seller arising out of or resulting from any
misrepresentation or breach of representation or warranty of Buyer contained in
this Agreement or in any agreement or statement or certificate furnished or to
be furnished by Buyer pursuant hereto or in connection with the transactions
contemplated hereby;
(b) any Damage of or to Seller arising out of or resulting from any breach
or nonfulfillment of any covenant or agreement of Buyer contained in this
Agreement or in any agreement or statement or certificate furnished or to be
furnished to Buyer pursuant hereto or in connection with the transactions
contemplated hereby; and
(c) any Damages incident to any of the foregoing, including reasonable
attorneys' fees actually incurred by Seller as the prevailing party in an action
to enforce this Section.
Section 8.4. Indemnification Procedures.
(a) A party seeking indemnification pursuant to this Agreement (an
"Indemnified Party") shall give prompt notice to the party from whom such
indemnification is sought (the "Indemnifying Party") of the assertion of any
claim, or the commencement of any action, suit or proceeding by a third party
which is not an Affiliate of any party hereto in respect of which indemnity may
be sought hereunder (a "Third Party Claim"), and will give the Indemnifying
Party such information with respect thereto as the Indemnifying Party may
reasonably request, but failure to give such notice shall not relieve the
Indemnifying Party of any liability hereunder except to the extent that the
Indemnifying Party is actually prejudiced thereby.
(b) The Indemnifying Party shall have the right, exercisable by written
notice to the Indemnified Party within thirty (30) days of receipt of notice
from the Indemnified Party of the commencement or assertion of any Third Party
Claim in respect of which indemnity may be sought hereunder, to assume and
conduct the defense of such Third Party Claim with counsel selected by the
Indemnifying Party and reasonably acceptable to the Indemnified Party; provided
that: (i) the defense of such Third Party Claim by the Indemnifying Party will
not, in the judgment of the Indemnified Party, have a Material Adverse Effect on
the Indemnified Party; (ii) the Indemnifying Party has sufficient financial
resources, in the judgment of the Indemnified Party, to satisfy the amount of
any adverse monetary judgment that is reasonably likely to result; (iii) the
Third Party Claim solely seeks (and continues to seek) monetary damages; and
(iv) the Indemnifying Party expressly agrees in writing that as between the
Indemnifying Party and the Indemnified Party, the Indemnifying Party shall be
solely obligated to satisfy and discharge the Third Party Claim (the conditions
set forth in clauses (i) through (iv) are collectively referred to as the
"Litigation Conditions") . If the Indemnifying Party does not assume the defense
of such Third Party Claim in accordance with this Section 8.4, the Indemnified
Party may continue to defend the Third Party Claim. If the Indemnifying Party
has assumed the defense of a Third Party Claim, the Indemnifying Party will not
be liable for any legal expenses subsequently incurred by the Indemnified Party
in connection with the defense thereof; provided, however, that if (i) the
Litigation Conditions cease to be met, or (ii) the Indemnifying Party fails to
take reasonable steps necessary to defend diligently such Third Party Claim, the
Indemnified Party may assume its own defense, and the Indemnifying Party will be
liable for all reasonable costs or expenses paid or incurred in connection
therewith.
(c) The Indemnifying Party or the Indemnified Party, as the case may be,
shall have the right to participate in (but not control), at its own expense,
the defense of any Third Party Claim which the other is defending as provided in
this Agreement.
(d) The Indemnifying Party, if it shall have assumed the defense of any
Third Party Claim as provided in this Agreement, shall not, without the prior
written consent of the Indemnified Party, consent to a settlement of, or the
entry of any judgment arising from, any such Third Party Claim (i) which does
not include as an unconditional term thereof the giving by the claimant or the
plaintiff to the Indemnified Party a complete release from all liability in
respect of such Third Party Claim, or (ii) which grants any injunctive or
equitable relief, or (iii) which may reasonably be expected to have a Material
Adverse Effect on the affected business of the Indemnified Party. The
Indemnified Party shall have the right to settle any Third Party Claim, the
defense of which has not been assumed by the Indemnifying Party, with the
written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld or delayed.
(e) Amounts payable in respect of indemnification obligations of the
parties shall be treated as an adjustment to the Purchase Price. Whether or not
the Indemnifying Party chooses to defend or prosecute any Third Party Claim, all
the parties hereto shall cooperate in the defense or prosecution thereof and
shall furnish such records, information and testimony, and attend such
conferences, discovery proceedings, hearings, trials and appeals, as may be
reasonably requested in connection therewith.
(f) Sections 8.2 through 8.4 shall not be interpreted to permit a double
recovery with respect to Taxes for which indemnification is provided under
Section 8.6 nor to permit a party to recover amounts with respect to Taxes that
are such party's responsibility under Section 8.6.
Section 8.5. Claims Against the Company.
Notwithstanding any provision in this Agreement to the contrary, Seller
agrees that it shall not be entitled to any indemnification from, or to make or
receive any amount for any claim against, the Company in respect of any Damage
or Damages arising out of or resulting from this Agreement or the transactions
contemplated by this Agreement.
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Section 8.6. Tax Matters.
(a) Seller's Pre-Closing Returns.
(i) The Company shall continue to be included for all taxable periods
ending on or before the Closing Date in the consolidated federal income Tax
Return that includes Seller and any required state or local consolidated or
combined income or franchise Tax Returns of Seller or its Affiliates that
include the Company.
(ii) Seller shall timely prepare and file (or cause to be prepared and
filed) (A) all federal, state and local income and franchise tax returns
required by law, covering the Company for all taxable periods ending on or
before the Closing Date (including all Tax Returns due by virtue of the
Elections described below in section 8.6(f)) and (B) all other Tax Returns
required by law covering the Company that are required to be filed on or before
the Closing Date (all Tax Returns specified in subparagraphs (A) and (B) are
hereinafter referred to as "Seller's Pre-Closing Returns"). Sellers shall timely
pay (or cause to be paid) on behalf of the Company all Taxes shown as due and
payable on Seller's Pre-Closing Returns.
(iii) Buyer and Seller agree that if the Company is permitted under any
applicable state or local income tax law to treat the Closing Date as the last
day of the taxable period during which the Closing occurs, Buyer and Seller
shall treat (and cause their respective affiliates to treat) such date as the
last day of such taxable period.
(b) Buyer's Tax Returns. Buyer shall timely prepare and file (or cause to
be so prepared and filed) (i) all federal, state or local income and franchise
Tax Returns required by law covering the Company for all taxable periods ending
after the Closing Date and (ii) all other Tax Returns required by law covering
the Company that are required to be filed after the Closing Date (all Tax
Returns specified in subparagraphs (i) and (ii) are hereinafter referred to as
"Buyer's Tax Returns"). Buyer shall submit to Seller copies of all Buyer's Tax
Returns, as filed, that include a taxable period or date prior to or including
the Closing Date.
(c) Tax Cooperation. After the Closing Date, Seller shall submit to Buyer
blank Tax Return work paper packages. Buyer shall cause the Company to prepare
completely and accurately all information that Seller shall reasonably request
in such work paper packages and shall submit to Seller such packages within the
later of sixty (60) calendar days after Buyer's receipt thereof or sixty (60)
calendar days after the close of the taxable period to which a work paper
package relates. Buyer and Seller and their Affiliates shall reasonably
cooperate with each other in connection with the preparation of Tax Returns
related to the Company and shall preserve all information, returns, books,
records and documents relating to any liabilities for Taxes with respect to a
taxable period until the later of the expiration of all applicable statutes of
limitation and extensions thereof, or a final determination with respect to
Taxes for such period and shall not destroy or otherwise dispose of any record
without first providing the other party with a reasonable opportunity to review
and copy the same. Buyer shall provide Seller (or cause the Company to provide
Seller) with applicable powers of attorney with respect to Seller's Pre-Closing
Returns.
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(d) Post-Closing Audits.
(i) Buyer shall notify Seller in writing within ten (10) days after receipt
by Buyer, the Company, or any Affiliate thereof, of any official inquiry,
examination, audit or proceeding ("Audit") regarding any Tax Return or period
with respect to which Seller may be liable for Taxes pursuant to section 8.6(a)
or for which Seller may have an indemnification obligation under section 8.6(e).
Seller shall have the right to exercise, at its own expense, control at any time
over the handling, disposition and/or settlement of any issue raised in any
Audit regarding any Seller's Pre-Closing Return. Buyer shall cooperate with
Seller, as Seller may reasonably request, in any such Audit.
(ii) Buyer shall have the right, at its own expense, to exercise control at
any time over the handling, disposition and/or settlement of any issue raised in
any official inquiry, examination or proceeding regarding any Tax Return other
than as described in section 8.6(d)(i) above (including the right to settle or
otherwise terminate any contest with respect thereto); provided that, in the
case of any Tax Return for a period beginning before the Closing Date, Buyer
shall settle any issue (if such settlement would result in a required
indemnification payment by Seller under section 8.6(e)) only with the prior
consent of Seller, which consent shall not be unreasonably withheld.
(e) Indemnification.
(i) After the Closing Date, and regardless of whether Buyer or the Company
would be entitled to indemnification for such amount under Section 8.2, Seller
shall indemnify and hold harmless Buyer and the Company and each of their
respective affiliates, successors and assigns from and against any Tax liability
with respect to Seller's Pre-Closing Returns (whether or not such Taxes are
shown to be due on such Seller's Pre-Closing Returns). Seller shall pay such
amounts as it is obligated to pay to Buyer or the Company within fifteen (15)
calendar days after payment of any applicable Tax liability by Buyer or the
Company. Seller shall also indemnify and hold harmless Buyer and the Company,
regardless of whether Buyer or the Company would be entitled to indemnification
for such amount under Section 8.2, from and against (A) any Tax liability for
periods prior to and including the Closing Date resulting from the Company being
severally liable for any Taxes of any consolidated group of which the Company as
of the Closing Date is, or prior the Closing Date was, a member pursuant to
Treasury Regulations ss.1.1502-6 or any analogous state or local tax provision,
and (B) any Tax liability for Buyer's Tax Returns attributable to the Business
and/or the Company for the period prior to the Closing.
(ii) Any Taxes for a period of time including both a pre-Closing period and
a post-Closing period shall be apportioned between such pre-Closing period and
the post-Closing period based, in the case of real and personal property Taxes,
on a per diem basis and in the case of other Taxes, on the actual activities,
taxable income or taxable loss of the Company during such pre-Closing period and
post-Closing period determined as if the books of the Company were closed on the
close of the Closing Date.
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(f) Section 338(h)(10). Seller and Buyer agree that they shall jointly make
or cause to be made the election under Section 338(h)(10) of the Code and
Treasury Regulation Section 1.338(h)(10)-1(d) (and any corresponding election
under state, local or foreign tax law) with respect to the purchase and sale of
the Shares (the "Election"). If Seller is not the common parent of a "selling
consolidated group" of which the Company is a member, as that term is defined
under Treasury Regulation Section 1.338(h)(10)-1, Seller shall cause the Person
that is the common parent with respect to the Company to join in making the
Election with Buyer. (The Person authorized to make the Election with respect to
the Company is referred to as the "Authorized Person" herein.) Schedule 8.6(f)
sets forth the principles of Seller's and the Buyer's allocation of the modified
aggregate deemed sale price ("MADSP") (as defined in Treasury Regulation section
1.338(h)(10)-1(f)) among the assets of the Company. Seller and Buyer shall agree
to a final allocation of the MADSP consistent with the principles set forth in
Schedule 8.6(f) as soon as practicable following the Closing Date. Buyer shall
prepare IRS Form 8023-A and any similar state, local or foreign tax forms
required to make the Election (collectively, the "Election Forms") and submit
the Election Forms to Seller no later than seventy five (75) days prior to the
date the Election Forms are required to be filed. Seller then shall deliver to
Buyer the Election Forms, which shall have been executed by the Authorized
Person, no later than thirty (30) days prior to the date the Election Forms are
required to be filed. Buyer shall thereafter complete any required attachments
to the Election Forms, execute and timely file the Election Forms, and provide
Seller with a copy of the Election Forms as filed. Seller and Buyer shall each
take or cause to be taken any other actions that are necessary for making or
perfecting the Elections. Seller and Buyer shall each report all transactions
pursuant to this Agreement in a manner that is consistent with the Elections and
shall take no position contrary thereto unless required to do so pursuant to a
"determination" within the meaning of Section 1313 of the Code. The parties
agree that a violation of the provisions of this Section 8.6(f) is a proper
subject of injunctive relief.
(g) Tax Effect of Payments. The amount of any payments required to be made
under this section 8.6 shall be reduced by the amount of any tax benefit
actually received by (including by refund or by reduction of or offset against
Taxes otherwise payable) the recipient by reason of the payment or incurrence by
such recipient of the item for which the indemnity is being sought. Each party
shall notify the other of such receipt of any such tax benefits.
(h) Refunds. Buyer shall pay to Seller or cause the Company to pay to
Seller any refund of any Tax received with respect to any taxable period ending
on or before the Closing Date reduced by the amount of any cost incurred by the
Company or Buyer as a result of such refund. If any refund of any Tax is
received with respect to a taxable period that includes both a pre-Closing
period and a post-Closing period, such a refund shall be apportioned between
Seller and Buyer (or the Company) in the same manner as Tax liability is
apportioned under section 8.6(e)(ii).
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Section 8.7. Noncompetition Covenant.
Neither Seller nor any of Seller's Affiliates shall compete with Buyer with
respect to the Business for a period of two (2) years after the Closing Date at
any location within (a) North America, (b) the State of North Carolina, and (c)
the Commonwealth of Pennsylvania. Notwithstanding the foregoing, Seller and
Seller's Affiliates shall, during such two (2) year period, have the right to
acquire or merge with one or more entities which, as an incidental portion of
their business, are engaged in the business of designing, manufacturing, and
selling motor drives, provided that within one (1) year after the effective date
of such acquisition or merger Seller or Seller's Affiliate, as the case may be,
shall divest itself of such motor drive business.
Section 8.8. Nature and Survival of Representations.
(a) The representations, warranties, covenants and agreements of Buyer and
Seller contained in this Agreement, and all statements contained in this
Agreement or any exhibit or schedule hereto, or any certificate, financial
statement or report or other document delivered pursuant to this Agreement, or
in connection with the transactions contemplated hereby, shall be deemed to
constitute representations, warranties, covenants and agreements of the
respective party delivering the same.
(b) Seller and the Company acknowledge that their representations and
warranties in this Agreement shall not be affected or mitigated by any
investigation conducted by Buyer or its representatives prior to Closing or to
any Knowledge of Buyer.
Section 8.9. Employees; 401(k) Plan.
(a) Employee Matters. Buyer intends to continue the employment of those
employees of the Company who wish to continue employment with the Company
following Buyer's purchase of the Shares ("Employees") on terms and conditions
that provide employee benefits substantially similar to those provided to other
similarly situated employees of Buyer, with credit for services under Seller's
Benefit Plans taken into account and with no pre-existing condition limitations
or waiting periods beyond those imposed by Seller's Benefit Plans. Seller
covenants and agrees that it will provide Buyer with any employment, benefit
participation, medical, OSHA or other records pertaining to those Employees that
are not in the Company's custody that Buyer may reasonably request. Seller
further agrees that it will cause any Benefit Plan, other than a plan maintained
exclusively by the Company for the benefit of its employees, to cooperate with
Buyer, as Buyer may reasonably request, to effect the transfer of coverage of
the Employees from any Benefit Plan maintained by Seller to those employee
benefit plans maintained by Buyer, in accordance with the terms of the
respective plans.
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(b) 401(k) Transfer.
(i) Participation. Effective as of the Closing Date, all Employees
shall cease participation in the Graseby Savings & Investment
Plan ("Seller's 401(k) Plan"). As soon as practicable, following
Closing, Buyer shall designate an existing savings plan,
qualified under Code ss. 401(a) and ss. 401(k), and a trust
thereunder that is exempt from tax under Code ss.
501(a)(collectively, "Buyer's Savings Plan"), and shall allow
Employees to participate in Buyer's Savings Plan on the same
terms and conditions as apply to other similarly situated
employees of Buyer.
(ii) 401(k) Transfer. As soon as practicable after the designation of
Buyer's Savings Plan, and upon evidence reasonably satisfactory
to Seller, which may be in the form of an opinion of Buyer's
counsel, that Buyer's Savings Plan is qualified under Codess.
401(a) and exempt from tax under Codess.501(a), Seller's 401(k)
Plan shall allow all participating Employees the option to
transfer their full account balances in Seller's 401(k) Plan,
determined as of the most recent valuation date and determined
without regard to any applicable vesting schedule, either to (A)
Buyer's Savings Plan, or (B) to an individual retirement account
selected by the Employee, in either case in a transaction
qualifying as a direct rollover under Codess.401(a)(31).
ARTICLE IX
MISCELLANEOUS
Section 9.1. Authorized and Effective Agreement; No Violation (Guarantors).
Guarantors hereby represent and warrant to Buyer as follows:
(a) Each of the Guarantors has all requisite power and authority to enter
into, to deliver, and to perform all of their respective obligations under this
Agreement. This Agreement and all other agreements and instruments required to
be executed and delivered by the Guarantors in connection with or pursuant
hereto have been duly executed and delivered by the Guarantors and constitute
the legal, valid and binding obligations of Guarantors, enforceable in
accordance with their terms, subject as to enforceability, to bankruptcy,
insolvency and other laws of general applicability relating to or affecting
creditors' rights, and to general equity principles. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary
corporate action on the part of the Guarantors.
(b) Neither the execution and delivery of this Agreement, the consummation
of the transactions contemplated hereby, nor compliance by either or both of the
Guarantors with any of the provisions hereof will: (i) conflict with or result
in a breach of any provision of the articles of incorporation, bylaws, or other
constitutive documents of either of the Guarantors; (ii) conflict with or
constitute or result in a breach of any term, condition or provision of, or
constitute a default under, or give rise to any right of termination,
cancellation or acceleration with respect to, any note, bond, mortgage,
indenture, lease, license, agreement, instrument, or other arrangement or
obligation to which either of the Guarantors is a party or by which either of
the Guarantors is bound, or result in the creation or imposition of any Lien
upon any property or asset of either of the Guarantors, except where such
occurrence would not have a Material Adverse Effect; or (iii) violate any order,
ruling, decree, charge, writ, injunction, regulatory agreement or memorandum of
understanding, constitution, statute, rule or regulation applicable to the
Guarantors, except where such violation would not have a Material Adverse
Effect.
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Section 9.2. Expenses.
Each party hereto shall bear and pay all costs and expenses incurred by it
in connection with the transactions contemplated by this Agreement, including
fees and expenses of its own financial consultants, accountants and counsel,
except as may otherwise be specifically provided for herein.
Section 9.3. Consent to Jurisdiction; Forum Selection.
(a) Buyer hereby irrevocably (i) consents to the non-exclusive personal
jurisdiction of the state and federal courts located in the City of Greensboro,
North Carolina in any action, claim or other proceeding arising out of any
dispute in connection with this Agreement or the transactions contemplated or
consummated pursuant to this Agreement, and (ii) consents to the service of a
summons and complaint and other process in any action, claim or proceeding
brought by Seller arising out of any dispute in connection with this Agreement
or the transactions contemplated or consummated pursuant to this Agreement in
the manner set forth in Section 9.6 of this Agreement.
(b) All parties to this Agreement hereby acknowledge and agree that nothing
in this Agreement affects Graseby plc's amenability, if any, to service of
process in the United States, nor the ability, if any, of any state, or any
state or federal court, in the United States to assert personal jurisdiction
over Graseby plc, nor the right of Graseby plc to contest the personal
jurisdiction, if any, of any state, or of any state or federal court, in the
United States.
Section 9.4. Entire Agreement.
This Agreement contains the entire agreement between the parties with
respect to the transactions contemplated hereunder and supersedes all prior
arrangements or understandings with respect thereto, written or oral, other than
documents referred to herein that are to be executed at or in connection with
the Closing. The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the parties hereto, and their respective
successors and permissible assignees. Nothing in this Agreement, expressed or
implied, is intended to confer upon any party, other than the parties hereto,
and their successors, any rights, remedies, obligations or liabilities.
Section 9.5. Assignment.
No party hereto may assign any of its rights or obligations under this
Agreement to any other Person without the prior written consent of the other
parties hereto.
Section 9.6. Notices.
All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if delivered personally or sent by
overnight express or by registered or certified mail, postage prepaid, addressed
as follows:
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If to Seller, Graseby Xxxxxxxx Inc., or Graseby plc:
Graseby plc
Xxxxxx Xxxxx
0-00 Xxxxxxxxx Xxxxxx
Xxxxxx, XX XX0X 0XX
c/o Xxxxxxxx Xxxxxx, Financial Director
(For Overnight Delivery):
Same.
With a required copy (which shall not constitute notice to Seller) to:
Brooks, Pierce, XxXxxxxx, Xxxxxxxx & Xxxxxxx, L.L.P.
Xxxx Xxxxxx Xxx 0000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq. and
Xxxxxx X. Xxxxx, Esq.
(For Overnight Delivery):
Brooks, Pierce, XxXxxxxx, Xxxxxxxx & Xxxxxxx, L.L.P.
0000 Xxxxxxxxxxx Xxxxx, 000 Xxxxx Xxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Xxxxxx X. Xxxxx, Esq.
If to Buyer:
XX Xxxx'x Incorporated
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
(For Overnight Delivery):
Same.
With a required copy to:
Dechert Price & Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention:........Xxxxx X. Xxxxxxxx, Esq.
(For Overnight Delivery):
Same.
Section 9.7. Captions; Headings.
The captions and section headings contained in this Agreement are for
reference purposes only and are not part of this Agreement.
Section 9.8. Amendments.
No amendment of any provision of this Agreement shall be valid unless the
same shall be in writing and signed by Buyer and Seller.
Section 9.9. 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.
Section 9.10. Construction.
Seller and Buyer have participated jointly in the negotiation and drafting
of this Agreement. In the event an ambiguity or a question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring either party by virtue of the authorship of any of the provisions
of this Agreement. 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. The word
"including" shall mean including without limitation. Seller and Buyer intend
that each representation, warranty, covenant and agreement contained herein
shall have independent significance.
Section 9.11. Counterparts.
This Agreement may be executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
Section 9.12. Post-Closing Cooperation.
Buyer and Seller and their Affiliates shall reasonably cooperate with each
other subsequent to the Closing by preparing, executing, and delivering any
documents reasonably requested by another party hereto necessary to effectuate
and consummate the transactions contemplated by this Agreement.
Section 9.13. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of North Carolina applicable to agreements made and entirely
to be performed within such jurisdiction, without giving effect to any conflict
of laws provisions of North Carolina law that would otherwise cause the laws of
another jurisdiction to apply.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
ATTEST: XX Xxxx'x Incorporated
____________________ By: ____________________
__________ Secretary ___________ President
[Corporate Seal]
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ATTEST: Graseby Electro-Optics Inc.
_________________________ By: _______________________________
_________ Secretary Title:
[Corporate Seal]
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Graseby Xxxxxxxx Inc.
By:
Title:
82
Graseby plc
By:
Title:
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List of Exhibits
Exhibit A Financial Statements
Exhibit B Real Property
Exhibit C Survey
Exhibit D Release
List of Schedules
Schedule Topic
3.6(a) Business with Affiliated Persons
3.7(a), (b) and (c) Operations Subsequent to December 31, 1996
3.8 Permits
3.9 Consents
3.10 Company's Intangibles
3.12(d), (e), (f) and (g) Hazardous Substances
3.12(k) Environmental Reports
3.13(a) Tax Matters
3.13(b)(i) Consolidated Groups
3.13(b)(ii) Post-Closing Tax Agreements
3.13(g) Company as Successor by Merger
3.14(a), (m), (n) and (o) Employee Benefit Plans
3.15(a) Certain Contracts
3.16 Legal Proceedings; Regulatory Approvals
3.18 Brokers and Finders
3.19 Inventory
3.20 Accounts Receivable
3.21 Undisclosed Liabilities
3.22 Permitted Exceptions
3.23 Transactions With Related Parties
3.24 Compensation Arrangements; Bank Accounts;
Officers and Directors
3.25 Labor Relations
3.26 Products Liability
3.27 Insurance
5.2(e) Severance Obligations
8.2(a)(iv) Certain Indemnification Obligations
8.6(f) Modified Aggregate Deemed Sale Price
