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EXHIBIT 10(d)
SALE AGREEMENT
THIS SALE AGREEMENT (the "Agreement") is entered into as of the 2nd day
of November, 1998, by and between XXXXX INDUSTRIES, INC., an Ohio corporation
(the "Buyer"), and CONTICO INTERNATIONAL, INC., a Missouri corporation
("Contico").
RECITALS:
A. Allibert-Contico, L.L.C., a Missouri limited liability company (the
"Company"), (i) owns and operates a manufacturing facility in Springfield,
Missouri, (ii) manufactures, distributes and sells industrial containers, totes
and pallets for materials handling, and (iii) owns all of the outstanding stock
of Allibert Industries Limitee, a Quebec corporation ("AIL"), that is engaged in
distribution of industrial containers.
B. Contico holds fifty percent (50%) of the outstanding percentage
interests in the Company, and Allibert Equipement U.S., Inc., a Delaware
corporation ("Allibert"), holds the remaining fifty percent (50%) of the
outstanding percentage interests in the Company.
C. The Buyer and Contico have reached an understanding concerning the
Buyer's purchase from Contico of its percentage interest in the Company.
AGREEMENT:
IN CONSIDERATION OF the respective representations, warranties and
covenants of the parties contained in this Agreement, and intending to be
legally bound, the parties agree as follows:
ARTICLE 1
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Purchase and Sale of Contico Interest
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1.1 PURCHASE AND SALE. At the Closing (as defined in Article 5),
subject to the terms and conditions set forth in this Agreement, Contico shall
sell to the Buyer, and the Buyer shall purchase from Contico, all of the
percentage interest in the Company owned by Contico (which represents fifty
percent (50%) of the outstanding percentage interests in the Company), free and
clear of all liens, security interests, claims, encumbrances and transfer
restrictions, but subject to the terms of the Operating Agreement of the
Company, as amended. The percentage interest of Contico is sometimes referred to
in this Agreement as the "Contico Interest."
1.2 CONTICO INTEREST PURCHASE PRICE. The aggregate consideration to be
paid by the Buyer to Contico for the Contico Interest (the "Contico Interest
Purchase Price") shall be $22,500,000, adjusted as calculated in Section 1.3(b)
based on the difference, if any, between the Company's projected EBIT (as
hereinafter defined) for calendar year 1998 of $4,318,000, and the actual EBIT
for calendar year 1998 as determined from the Final Audited Financial Statements
as defined in Section 1.3. The Contico Interest Purchase Price shall be adjusted
by an amount equal to one-half of the difference between the EBIT projected by
the Company of $4,318,000 for the 12 months
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ended December 31, 1998, and the actual EBIT for such period based upon the
Final Audited Financial Statements ("Actual EBIT"). One-half of the Actual EBIT
shall be multiplied by a factor of 10.4215. The Contico Interest Purchase Price
shall either be increased or decreased based upon such calculation, but in no
event shall the Contico Interest Purchase Price be adjusted downward by more
than One Million Dollars ($1,000,000) (the "Maximum Decrease") as a result of
such adjustment. The term "EBIT" means the net income of the Company for such
period, plus the sum of (a) all interest expense during such period, plus (b)
all income, franchise, gross receipts and excise tax expense during such period;
in each case to the extent such expense is deducted from income in determining
net income; all of the foregoing being determined on a consolidated basis in
accordance with United States generally accepted accounting principles ("GAAP")
consistently applied.
1.3 CONTICO INTEREST PURCHASE PRICE PAYMENT AND ADJUSTMENT.
(a) CLOSING PAYMENTS. At the Closing, Buyer shall wire transfer
$22,500,000 of immediately available funds, $21,500,000 of which (the "Closing
Payment") shall be paid to the account(s) directed by Contico, and the remaining
$1,000,000 of which shall be deposited into an escrow account, to be held,
invested and paid pursuant to the terms of an Escrow Agreement in substantially
the form of EXHIBIT A attached hereto ("Escrow Agreement").
(b) CONTICO INTEREST PURCHASE PRICE ADJUSTMENT. Promptly following
December 31, 1998, Contico shall cooperate with Allibert to cause the financial
books of the Company and AIL to be closed and shall instruct the Company's
independent public accounting firm, Xxxxxx Xxxxxxxx, L.L.P. ("Accounting Firm"),
to commence its audit of the Company's consolidated balance sheet and
consolidated statements of income and cash flows as of and for the fiscal year
ended December 31, 1998, and to issue an audit opinion of such Accounting Firm
thereon. The Buyer and its professional representatives shall be entitled, at
Buyer's expense, to observe the preparation of such financial statements in
accordance with such reasonable procedures as the Accounting Firm shall
establish. Within forty-five (45) days after the Closing Date, Contico shall
deliver to the Buyer (i) the audited consolidated balance sheet of the Company
as of December 31, 1998, and related audited consolidated statements of income
and cash flow for the 12 month period then ended, including the notes thereto,
prepared by the Accounting Firm, and (ii) the Accounting Firm's calculation of
the Company's EBIT and any Contico Interest Purchase Price adjustment. If the
Buyer objects to any aspect of such financial statements or calculations, the
Buyer shall notify Contico in writing within ten (10) business days after its
receipt of such statements, and thereafter representatives of the parties shall
meet promptly to resolve any disagreements. All parties shall instruct the
Company and the Accounting Firm to make available to each party such supporting
information and work papers as any party shall reasonably request in its review.
The financial statements of the Company as of December 31, 1998, as agreed by
the parties or as determined under Section 1.3(d) below, are referred to
collectively as the "Final Audited Financial Statements."
(c) ADJUSTING PAYMENT. If the Contico Interest Purchase Price
adjustment represents an increase of the Contico Interest Purchase Price above
$22,500,000, then (i) Contico shall be entitled to receive the entire escrow
account and all earnings thereon, and (ii) the Buyer shall
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pay the amount of such increase by wire transfer of immediately available funds
to such account(s) as Contico shall direct. If the Contico Interest Purchase
Price adjustment results in the Contico Interest Purchase Price decreasing by
the Maximum Decrease, then the Buyer shall be entitled to receive the entire
escrow account and all earnings thereon. If the Contico Interest Purchase Price
adjustment results in the Contico Interest Purchase Price decreasing by less
than the Maximum Decrease, then (1) the Buyer shall be entitled to receive from
the escrow account an amount equal to such decrease in Purchase Price, (2)
Contico shall be entitled to receive the balance of the principal of the escrow
account, and (3) the earnings shall be paid over to the parties in the same
proportions as the principal is paid over. Any payment required to be made by a
party under this Section 1.3(c), shall be made within three (3) business days
after agreement on, or determination of, the Final Audited Financial Statements.
(d) RESOLUTION. If, within ten (10) days after receipt of notice of
the buyer's objections, Buyer and Contico cannot agree on any aspect of the
Final Audited Financial Statements or the computation of EBIT or the Contico
Interest Purchase Price adjustment, then the parties shall submit their
respective positions and any appropriate supporting documentation within the
following five days to the St. Louis, Missouri office of Deloitte & Touche LLP.
If such firm shall be unable to accept its dispute resolution function, then its
most recent managing partner shall designate an alternate. The decision of such
firm, which shall be rendered within ten (10) days after submission of all
documentation, shall be binding on all interested parties. The cost of such firm
shall be shared equally by the Buyer on the one hand and Contico and Allibert on
the other hand.
1.4 ALLOCATION OF PURCHASE PRICE. The parties acknowledge that, for
federal income tax purposes, the purchase of the Contico Interest by the Buyer
is treated as a purchase of one-half of the assets of the Company. The parties
hereby acknowledge and agree that the assets of the Company are being purchased
at their adjusted book value for federal income tax purposes, and that to the
extent the Contico Interest Purchase Price exceeds such book value, the excess
is being paid by the Buyer for goodwill and going concern value.
ARTICLE 2
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Representations and Warranties Relating to Company and AIL
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Contico hereby represents and warrants to Buyer as follows:
2.1 STATUS.
(a) EXISTENCE AND STATUS. The Company is a duly organized, validly
existing limited liability company in full force and effect under the laws of
the State of Missouri. AIL is a duly organized, validly existing corporation in
good standing in full force and effect under the laws of the Province of Quebec.
(b) CONSTITUENT DOCUMENTS. Attached to this Agreement as EXHIBIT B
are copies of (i) the original articles of organization of the Company and all
amendments, restatements or other
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filings with respect thereto, (ii) the currently effective operating agreement
of the Company, as amended (the "Operating Agreement"), (iii) the articles of
incorporation of AIL, as amended, and (iv) the bylaws of AIL, as amended; which
are all of the constituent documents of the Company and AIL.
(c) POWER AND AUTHORITY. Each of the Company and AIL has the power
and authority to own and lease its properties and otherwise to conduct its
business as currently conducted.
(d) QUALIFICATION. SCHEDULE 2.1(d) lists the jurisdictions in which
the Company is qualified to do business as a foreign limited liability company,
and in which AIL is qualified to do business.
(e) OWNERSHIP INTERESTS. Except for its wholly owned subsidiary
AIL, the Company has no subsidiaries or any equity securities of, investment in
or loans or advances to any business enterprise or person or any agreements or
commitments for such (other than trade terms and similar arrangements extended
to customers in the ordinary course of business), and is not subject to any
arrangement that should be treated as a partnership for federal income tax
purposes.
(f) RECORDS. The record books of the Company and AIL are complete,
accurate and up to date in all material respects with all necessary signatures
and set forth, where legally required or as required under the Operating
Agreement, all meetings held and actions taken by the managers and members of
the Company and directors and shareholders of AIL, respectively, and all
transactions involving ownership interests in the Company and AIL, respectively.
(g) ABSENCE OF VIOLATIONS OR CONFLICTS. Except as disclosed in
SCHEDULE 2.1(g), the consummation of the sale of the Contico Interest does not
and will not with or without the passage of time or giving of notice or both:
(i) constitute a violation of, be in conflict with, constitute
a default or require any payment under, permit a termination of, require any
consent or authorization under, or result in the creation or imposition of any
material lien, encumbrance or other adverse claim or interest upon the Contico
Interest or any assets or properties of the Company or AIL under (A) any
contract, agreement, commitment, undertaking or understanding to which the
Company or AIL is a party or to which it or any of its assets or properties are
subject or bound, (B) any judgment, decree or order of any governmental
authority to which the Company or AIL or any of their respective assets or
properties are subject or bound, (C) any applicable law, or (D) any governing or
applicable agreements, instruments or other documents (including organizational
documents); or
(ii) create, or cause the acceleration of the maturity of, any
material debt, obligation or liability of the Company or AIL.
(h) NO GOVERNMENTAL CONSENTS REQUIRED. Except as set forth in
SCHEDULE 2.1(h), no consent, approval, order or authorization of, or
registration, declaration or filing with, any
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governmental authority on the part of Contico, the Company or AIL is required in
connection with the consummation of the sale of the Contico Interest.
2.2 FINANCIAL MATTERS.
(a) INTERIM FINANCIAL STATEMENTS. Attached as SCHEDULE 2.2(a) are:
(i) copies of the audited consolidated balance sheet of the Company as of
August 31, 1998, and related audited statements of income and cash flow for the
eight month period then ended (all of which, including the notes thereto, are
collectively referred to in this Agreement as the "Interim Financial
Statements;" with the consolidated balance sheet relating to August 31, 1998
referred to separately as the "Interim Balance Sheet"). The Interim Financial
Statements are complete and accurate in all material respects, have been
prepared in accordance with GAAP applied on a consistent basis, and fairly
present the consolidated financial position of the Company as of their
respective dates and the consolidated results of operations of the Company for
the respective periods then ended.
(b) ABSENCE OF UNDISCLOSED LIABILITIES. Except (i) as and to the
extent expressly reflected or specifically reserved against in the Interim
Balance Sheet, and (ii) for accrued expenses, trade payables and other
liabilities incurred in the ordinary course of business since the date of the
Interim Balance Sheet, to Contico's knowledge the Company has no liability of a
type required to be set forth in a balance sheet prepared in accordance with
GAAP.
(c) CAPITAL LEASES. SCHEDULE 2.2(c) lists all lease agreements
regarding the leasing of assets to the Company or AIL which are recorded on the
Interim Financial Statements as capital leases.
(d) ABSENCE OF CERTAIN CHANGES. Except as set forth in SCHEDULE
2.2(d), since the date of the Interim Balance Sheet there has not been:
(i) any material adverse change in the assets, operations,
liabilities, earnings, business or condition (financial or otherwise) of the
Company;
(ii) any occurrence of physical damage, destruction or casualty
loss which has been materially adverse to the assets, operations, liabilities,
earnings, business or condition (financial or otherwise) of the Company;
(iii) any material increase in the compensation payable by the
Company or AIL to any director, officer, employee or agent other than routine
increases made in the ordinary course of business consistent with past practice,
or any bonus, incentive compensation, service award or other like benefit,
granted, made or accrued, contingently or otherwise, to or to the credit of any
of such director, officer, employee or agent, or any employee welfare, pension,
retirement or similar payment or arrangement made or agreed to by the Company or
AIL with respect to any such director, officer, employee or agent, other than
pursuant to the existing plans disclosed on SCHEDULE 2.8 or in the ordinary
course of business consistent with past practice;
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(iv) any addition to, or modification of, any profit sharing,
bonus, deferred compensation, insurance, pension, retirement or other employee
benefit plan, arrangement or practice described on SCHEDULE 2.8, other than
accruals made for fiscal year 1998 in accordance with the normal practices of
the Company and AIL and the extension of coverage to employees who became
eligible after the date of the Interim Balance Sheet;
(v) any sale, assignment or transfer (including without
limitation any collateral assignment or the granting or permitting of any lien,
encumbrance or other claim) of any material asset, property or right of the
Company or AIL other than in the ordinary course of business (and the phrase
"ordinary course of business" includes monthly distributions by the Company to
its members of 45% of the Company's pretax income);
(vi) any amendment, modification, waiver or cancellation of any
material debt owed to, or material claim of, the Company or AIL, other than in
the ordinary course of business;
(vii) incurrence of any material obligation or liability
(whether absolute or contingent), other than current liabilities incurred in the
ordinary course of business and draws on existing lines of credit to fund
operating expenses in the ordinary course of business and in amounts consistent
with historical practice;
(viii) any material capital expenditure or commitment to make a
material capital expenditure by the Company or AIL (exclusive of expenditures
for repair or maintenance of equipment in the ordinary course of business);
(ix) any actual or, to Contico's knowledge, threatened
cancellation, termination or material amendment of any material contract,
agreement, license, permit or other instrument or right to which the Company or
AIL is a party or which it holds in connection with the conduct of its business;
(x) any contract or transaction outside of the ordinary course
of business or failure on the part of the Company or AIL to operate its business
in the ordinary course; or
(xi) any change in the identity of the members of the Company,
or any change in the Articles of Organization or Operating Agreement of the
Company or any organizational document of AIL.
(e) BUSINESS RECORDS AND SYSTEMS. Except as set forth in SCHEDULE
2.2(e), all business records and systems of the Company and AIL have been
maintained in the ordinary course of business, and are complete, accurate and up
to date in all material respects.
2.3 TAXES.
(a) DEFINITIONS. For purposes of this Agreement:
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(i) the term "Code" shall mean the Internal Revenue Code of
1986, as amended;
(ii) the term "Returns" shall mean, collectively, (A) all
reports, declarations, estimates, returns, information statements, and similar
documents relating to, or required to be filed in respect of, any Taxes; and (B)
any statements, returns, reports, or similar documents required to be filed
pursuant to Part III of Subchapter A of Chapter 61 of the Code or pursuant to
any similar income, excise, or other tax provision of any federal, territorial,
state, local, or foreign law; and the term "Return" means any one of the
foregoing Returns; and
(iii) the term "Taxes" shall mean (A) all net income, gross
income, gross receipts, sales, use, ad valorem, franchise, profits, license,
lease, service, service use, withholding, employment, payroll, excise,
severance, transfer, documentary, registration, stamp, occupation,
environmental, premium, property, windfall profits, customs, duties, and other
taxes, fees, assessments or charges of any kind whatever, together with any
interest, penalties and other additions with respect thereto, imposed by any
federal, territorial, state, local or foreign government; and (B) any penalties,
interest, or other additions to tax for the failure to collect, withhold, or pay
over any of the foregoing, or to accurately file any Return; and the term "Tax"
shall mean any one of the foregoing Taxes; provided, however, that when used
with reference to a specified person (for example and without limitation,
"Company's Taxes"), the terms "Taxes" and "Tax" shall include only those amounts
for which such person is, or could become, liable in whole or part (including,
without limitation, any obligation in connection with a duty to collect,
withhold, or pay over any Tax, any obligation to contribute to the payment of
any Taxes determined on a consolidated, combined, or unitary basis, any
liability as a transferee, or any liability as a result of any express or
implied obligation to indemnify or pay the Tax obligations of another person).
(b) RETURNS FILED AND TAXES PAID. Except as otherwise set forth in
SCHEDULE 2.3, (i) the Company has duly filed or caused to be filed, on or before
the due date thereof (taking into account timely filed extensions), with the
appropriate taxing authorities, all Returns that it is required to file; (ii)
each such Return (including any amendment thereto) is true, correct, and
complete in all material respects; and (iii) all Taxes of the Company shown to
be due on each such Return (or amendment) or subsequent assessment with regard
thereto, have been timely paid or are being contested in good faith by
appropriate proceedings. Notwithstanding the foregoing, however, Contico makes
no representation or warranty with respect to any Taxes (A) arising as a result
of any changes in Tax laws, regulations or interpretations after the date of the
Interim Balance Sheet, or (B) in respect of deferred taxation attributable to
changes in tax rates which are effective after such date.
(c) TAX LIABILITIES. The Company has collected or withheld all
Taxes that it is required to collect or withhold. The Company is not a party to
or bound by any tax indemnity, tax sharing or tax allocation agreement, or any
other contractual obligation to pay the Tax obligations of another person.
(d) TAX ATTRIBUTES AND ELECTIONS. The Company has been properly
classified as a partnership for all Federal and state income Tax purposes for
all periods since its inception, and
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the Company has never realized any income subject to Tax at the Company level by
a state or other jurisdiction that imposes a Tax on the gross receipts, income,
net income or taxable income of a limited liability company. The Company has
never been a member of an affiliated group of corporations within the meaning of
Section 1504 of the Code. The Company has never been a member of any combined,
consolidated, or unitary group for state income or franchise tax purposes and
does not file (and is not required to file) combined, consolidated, or unitary
Returns for state income or franchise tax purposes.
2.4 PROPERTY.
(a) OWNERSHIP AND TITLE. SCHEDULE 2.4(a) lists all real property
and all material items of tangible personal property (except inventory) to which
the Company or AIL holds legal or equitable title (collectively, "Properties"),
together with copies of the most recent survey and title information in the
Company's possession. Except as set forth on SCHEDULE 2.4(a): (i) the Company
and AIL each has good and marketable title to all of such Properties owned by it
as indicated on SCHEDULE 2.4(a); and (ii) none of such properties is subject to
any lien or encumbrance, except (A) liens for taxes not yet due and payable, (B)
liens securing indebtedness reflected on the Interim Balance Sheet, and (C)
liens imposed by law and incurred in the ordinary course of business for
obligations not yet due and payable to landlords, carriers, warehousemen,
laborers, materialmen and the like (none involving amounts exceeding $5,000, or
aggregating more than $25,000).
(b) LEASES. For purposes of this Agreement, "Lease" means any
written or oral lease, sublease or rental agreement (and any related contract,
agreement, commitment, arrangement, undertaking or understanding) and all
amendments, modifications and supplements thereof and waivers and consents
thereunder pursuant to which the Company or AIL leases, subleases or rents any
real or personal property, either as lessor, lessee, landlord or tenant.
SCHEDULE 2.4(b) lists all Leases, except those which (i) can be canceled by the
Company or AIL upon 30 or fewer days' notice without penalty or the acceleration
of rentals, or (ii) involve an annual rental of $10,000 or less. SCHEDULE 2.4(b)
describes all material oral Leases required to be disclosed in SCHEDULE 2.4(b),
and true and complete copies of all written Leases required to be disclosed have
been delivered to Buyer.
(c) CONDITION. Except as set forth in SCHEDULE 2.4(c): (i) to
Contico's knowledge the Properties and the properties subject to a Lease are
free from defects which would materially impair their use as presently
contemplated; (ii) the Properties and all of the properties subject to a Lease
are each structurally or mechanically (as applicable) sound and in good repair
and operating condition, normal wear and tear excepted; and (iii) the Company
and AIL are in compliance with all applicable building, zoning, land use or
other similar statutes, laws, ordinances, regulations, permits, health and
safety codes or other requirements in respect of any of the Properties or any of
the properties subject to a Lease.
(d) ACCOUNTS RECEIVABLE. The trade receivables, notes receivable
and other accounts receivable (collectively, "Receivables") as reflected on the
Interim Balance Sheet and the Receivables arising since the date of the Interim
Balance Sheet were and are valid and existing and
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represent monies due for goods sold and delivered or services rendered in the
ordinary course of business, except as otherwise disclosed in SCHEDULE 2.4(d).
(e) INVENTORIES. The inventories reflected on the Interim Balance
Sheet, and those reflected on the books of the Company and AIL, have been
determined and valued in accordance with GAAP applied on a consistent basis. The
inventories of the Company and AIL carried for value on the books of the Company
and AIL, taken as a whole, consist of items which are of a quality and quantity
presently usable or saleable in the ordinary course of the Company's and AIL's
business consistent with past practice.
2.5 INTELLECTUAL PROPERTY.
(a) RIGHTS, LICENSES, PROCEEDINGS. All patents, trademarks, service
marks, trade names or copyrights owned or used by the Company or AIL and all
applications or registrations therefor; and all contracts, agreements,
commitments and understandings relating to the use or license of technology,
know-how or processes by the Company or AIL (the "Intellectual Property
Licenses"); are listed in SCHEDULE 2.5. Except as disclosed in SCHEDULE 2.5: (a)
each of the Company and AIL owns, or has the valid right to use, under
Intellectual Property Licenses or otherwise, patents, trademarks, service marks,
trade names, trade secrets, designs, know-how, processes, formulae, engineering
drawings, sales data, mailing lists, catalogues, brochures, artwork, photographs
and advertising materials (collectively, "Intellectual Property") used in or
necessary for the ordinary conduct of its business; (b) neither the Company nor
AIL has assigned any such Intellectual Property to any other person; (c) the
consummation of the transactions contemplated by this Agreement will not alter
or impair any such rights; and (d) to the knowledge of Contico, no Intellectual
Property owned, licensed or used by the Company or AIL, or Intellectual Property
License of the Company or AIL, is the subject of a lawsuit or any other
proceeding, nor has any party challenged or threatened to challenge the
Company's or AIL's right to use such Intellectual Property or Intellectual
Property License or application for any of the foregoing. The Company and AIL
hold valid licenses for all computer software used in their respective
businesses, and to Contico's knowledge the Company and AIL are in compliance
with each such license.
(b) YEAR 2000 ISSUES. Upon the completion of certain remedial
actions being undertaken by the personnel of the Company and certain independent
consultants, the cost of which will not be material to the business or profits
of the Company and AIL, the operations of the Company and AIL from and after
January 1, 2000 shall not be different than the operations immediately prior to
such date (excluding changes effected by Buyer or the Company or AIL after the
Closing), and the financial and operating systems and the proprietary software
of the Company and AIL will be able to process, store, record and present data
containing dates in the year 2000 and thereafter, in the same manner as data
containing dates prior to the year 2000.
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2.6 LOANS AND MATERIAL CONTRACTS.
(a) INDEBTEDNESS. SCHEDULE 2.6(a) sets forth (i) a list or
description of all instruments or other documents ("Debt Instruments")
evidencing any direct or indirect indebtedness of the Company or AIL to any
person for borrowed money, as well as indebtedness by way of capital leases,
lease-purchase arrangements, guarantees, and letters of credit, in an amount
exceeding $25,000, (ii) a list or description of all accelerations or costs
assessable by third parties against the Company due to the sale of the Contico
Interest, and (iii) a list of all loans of money to managers, employees or
members of the Company or AIL (but excluding travel and similar advances to
employees in the ordinary course of business).
(b) MATERIAL CONTRACTS. SCHEDULE 2.6(b) lists each contract,
agreement, commitment, arrangement, undertaking or understanding of the type
listed below (except where the same does not call for the payment or receipt of
cash or other property or services having a value in excess of $25,000 or is
terminable without liability to the Company on 30 days notice or less) to which
the Company is a party or bound or to which it or its property is subject,
whether written or oral ("Material Contract," but such list and the term
"Material Contract" does not include Leases, Intellectual Property Licenses,
Debt Instruments, Insurance Policies and employee-related matters disclosed
elsewhere in this Agreement):
(i) for the purchase or rental of materials, inventory and
supplies by the Company entered into in the ordinary course of business which
individually exceed $25,000 and which are not reasonably expected to be fully
performed within 45 days of their respective dates;
(ii) for the purchase of services by the Company entered into
in the ordinary course of business which are not reasonably expected to be fully
performed within 45 days of their respective dates;
(iii) that were entered into in the ordinary course of business
and involve, or are reasonably expected to involve, an amount in excess of
$25,000 and which are not reasonably expected to be fully performed within 45
days of their respective dates;
(iv) for matters not in the ordinary course of the Company's
business;
(v) making the Company liable, by guaranty, suretyship
agreement, indemnification agreement, contribution agreement or otherwise, upon
or with respect to, or obligating it in any way to provide funds in respect of,
or obligating it to guarantee, serve as surety for or assume, any debt, dividend
or other liability or obligation of any person, corporation, association,
partnership or other entity (except endorsements made in the ordinary course of
business in connection with the deposit of items for collection);
(vi) granting a power of attorney;
(vii) relating to participation in a cooperative, partnership
or joint venture; and
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(viii) restricting or limiting the right of the Company to
compete in any line of business.
SCHEDULE 2.6(b) also describes all oral Material Contracts required to be
disclosed in SCHEDULE 2.6(b), and true and complete copies of all written
Material Contracts (as amended) required to be disclosed in SCHEDULE 2.6(B) have
been delivered to Buyer.
(c) INSURANCE. All insurance policies now in force with respect to
the assets, operations and personnel of the Company (including comprehensive
general liability, comprehensive general casualty and extended coverage,
automobile, boiler and machinery, fire and lightning, and worker's compensation)
("Insurance Policies") are listed in SCHEDULE 2.6(c). Copies of such policies
have been delivered by the Company to Buyer.
2.7 EMPLOYMENT RELATIONSHIPS. SCHEDULE 2.7 contains a true and complete
list of all employees of the Company and AIL as of August 31, 1998, specifying
their titles (if any) and hourly wages or annual rate of compensation. Except as
disclosed pursuant to SCHEDULE 2.7 or SCHEDULE 2.8, the Company and AIL have no
obligations, oral or written, contingent or otherwise: (i) under any employment
contract, agreement, commitment, undertaking, understanding, plan, program,
policy or arrangement; (ii) under any bonus, incentive or deferred compensation
contract, agreement, commitment, undertaking, understanding, plan, program,
policy or arrangement (including one for severance or other payments conditioned
upon a change of control of Company); or (iii) under any pension,
profit-sharing, stock purchase or any other such plan, program or arrangement.
2.8 EMPLOYEE AND FRINGE BENEFIT PLANS.
(a) SCHEDULE OF PLANS. Except as set forth in SCHEDULE 2.8, the
Company does not maintain, is not required to contribute to and otherwise does
not participate in (and has not since its inception maintained, contributed to
or otherwise participated in) any employee pension benefit plan qualified under
Section 401 or 501 of the Code or any multi-employer plan (as such term is
defined in the Employee Retirement Income Security Act of 1974, as amended
("ERISA")). Except as set forth in SCHEDULE 2.8, the Company does not maintain,
is not required to contribute to and otherwise does not participate in (and has
not since its inception maintained, contributed to or otherwise participated in)
any employee pension benefit plan not qualified under Section 401 or 501 of the
Code, or any employee welfare benefit plan ("Welfare Plan") within the meaning
of ERISA (all of the foregoing described in this sentence being referred to
herein collectively as "Employee Plans" and individually as an "Employee Plan").
Except to the extent required by laws relating to the continuation of health
insurance, the Company and AIL are not obligated to provide medical benefits to
their respective retirees.
(b) SELF-INSURANCE. The Company does not self-insure any material
risk relating to its present or former employees.
(c) REPORTING AND DISCLOSURE. Summary plan descriptions and all
other reports, documents, statements and communications which are required to
have been filed, published or disseminated under ERISA or other federal law and
the rules and regulations promulgated by the United
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States Department of Labor under ERISA and the Treasury Department under the
Code with respect to the Employee Plans have been filed, published or
disseminated by the Company on a timely basis.
(d) PROHIBITED TRANSACTIONS; TERMINATIONS; OTHER REPORTABLE EVENTS.
To Contico's knowledge, none of the Employee Plans, and no administrator or any
person or entity holding or controlling assets over which the Company has any
controlling interest, has engaged in any "prohibited transaction" (as such term
is defined in ERISA or the Code) which could subject any of the Employee Plans,
or any administrator thereof, or any person or entity holding or controlling
assets of any of the Employee Plans or any person or entity dealing with them to
any material tax, penalty or other cost or liability of any kind. Except as set
forth in SCHEDULE 2.8, no termination, whether partial or complete, has occurred
with respect to any Employee Plan disclosed in SCHEDULE 2.8.
(e) OTHER. The Company has complied in all material respects with
all of its obligations under each of the Employee Plans and with all provisions
of ERISA and any and all other laws, rules, regulations, releases and other
official pronouncements applicable to the Employee Plans. No written notice has
been received by the Company of any claim by any participant in the Employee
Plans of any violation of such laws, nor is Contico aware of any basis for such
a claim.
2.9 LABOR RELATIONS. Except as disclosed in SCHEDULE 2.9: (a) The
Company and AIL are in compliance with all federal, state, provincial, local and
other applicable law respecting employment and employment practices, terms and
conditions of employment and wages and hours; and (b) there is no unfair labor
practice, complaint, charge or other matter against or involving the Company or
AIL pending or, to Contico's knowledge, threatened before any governmental
authority. Neither the Company nor AIL are parties to nor otherwise bound by any
contract, agreement or collective bargaining agreement with any labor union or
organization. No employees of the Company or AIL are represented by any labor
union or similar organization. Neither the Company nor AIL has experienced any
general labor disputes or any work stoppage due to labor disagreements within
the past three years.
2.10 LITIGATION. Except as disclosed in SCHEDULE 2.10, neither the
Company nor AIL is (i) engaged in, a party to, subject to or, to Contico's
knowledge, threatened with (A) any material claim, legal or equitable action, or
other legal proceeding (whether as plaintiff, defendant or otherwise and
regardless of the forum or the nature of the opposing party) involving an amount
in controversy or a potential award or loss that can reasonably be expected to
exceed $50,000, or (B) any claim with respect to any product manufactured,
processed, sold or distributed by the Company (including without limitation
claims for personal injury or property damage, but excluding ordinary warranty
claims); or (ii) a party to or subject to any judgment, order or decree
applicable to the Company or AIL or its assets.
2.11 COMPLIANCE WITH LAWS. Except as set forth in SCHEDULE 2.11:
(a) CHARGES OR VIOLATIONS. The Company and AIL are not (and during
the preceding two years have not been) either charged with, in receipt of any
notice or warning of, or to Contico's knowledge under investigation with respect
to, any failure or alleged failure to comply in any material respect with any
applicable law.
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(b) PERMITS. To the knowledge of Contico: (i) the Company and AIL
each has all occupancy certificates and other licenses, permits, certificates of
need and other certificates ("Permits") required in connection with its
ownership, possession, use, occupancy or operation of any of the Properties
owned, leased or used by it in the conduct of its business; (ii) all of the
Permits are in full force and effect; (iii) the Company and AIL each is (and has
been) in full compliance with the Permits; and (iv) none of the Permits will be
affected by, or require the consent of any party by reason of, the transactions
contemplated by this Agreement where such effect or failure to obtain such
consent would materially restrict or hamper the operation of any facility owned,
leased or used by the Company or AIL.
(c) ENVIRONMENTAL.
(i) Except as described in SCHEDULE 2.11(c), none of the
Company's or AIL's property are, or to Contico's knowledge have been, used as a
garbage or a refuse dump site, a waste storage or disposal facility, a waste
transfer station, a landfill or disposal site, with the exception in each case
for the ordinary and proper storage of trash commonly generated used or stored
in facilities of the type used by the Company and AIL.
(ii) Except as described in SCHEDULE 2.11(c), to Contico's
knowledge the Company's and AIL's property is not presently contaminated with
hazardous substance in amounts that would result in a federal or state
"superfund" lien under "Environmental Laws" (as defined below), or require
notification or remedial action pursuant to any Environmental Laws.
(iii) Except as described in SCHEDULE 2.11(c), with regard to
the Company's or AIL's property, there are no civil criminal or administrative
investigations, notices of violation, requests for information or "notice
letters" pending, or to Contico's knowledge, threatened or planned, and there
are no judgments, decrees, or orders applicable to such property arising out of
Environmental Laws.
(iv) Except as shown in SCHEDULE 2.11(c), to Contico's
knowledge the Company's and AIL's property, and the operations of the business,
have been and presently are, conducted in compliance with all applicable
Environmental Laws.
(v) To Contico's knowledge, no underground tanks are now or
have been located at any facility now or previously owned or operated by the
Company or AIL, and no toxic or hazardous substances have been generated,
transported, treated, stored, disposed of on or from or otherwise deposited in
or on or allowed to emanate from any such facility by the Company or AIL
(irrespective to whether such substances remain at the facility or were
transferred to or otherwise disposed of off-site), including the surface waters
and subsurface waters thereof, in violation of any federal, state or local
environmental statues, ordinances, regulations or guidelines.
(vi) "Environmental Laws" means the Resource Conservation and
Recovery Act, the Comprehensive Environmental Response Compensation and
Liability Act, the Superfund Amendments and Reauthorization Act, the Toxic
Substances Control Act, the Safe Drinking Water Act, the Federal Water Pollution
Control Act (Clean Water Act), the Clean Air Act, the Powerplant and
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Industrial Fuel Use Act of 1978, the National Environmental Impact Statement,
and antipollution, waste control and disposal and environmental "cleanup"
provisions of similar statutes of any federal, state, local or provincial
governmental authority, and all regulations and standards enacted pursuant
thereto and all permits and authorizations issued in connection therewith.
2.12 BANK ACCOUNTS. SCHEDULE 2.12 lists all bank, money market, savings
and similar accounts and safe deposit boxes of the Company and AIL, specifying
the account numbers and the authorized signatories or persons having access to
them.
2.13 TRANSACTIONS WITH AFFILIATES. Except as disclosed in SCHEDULE
2.13, neither Contico, Allibert nor any manager of the Company, or any
"affiliate" or "associate" (as such terms are defined in the rules and
regulations of the Securities and Exchange Commission under the Securities Act
of 1933, as amended) of any of the foregoing:
(a) has been a party to any lease, sublease, contract, agreement,
commitment, understanding or other arrangement of any kind whatsoever, involving
any such person and the Company which is not disclosed in SCHEDULE 2.13, or
(b) owns directly or indirectly, in whole or in part, any property
that the Company uses or otherwise has rights in respect of, or
(c) has any cause of action or other claim whatsoever against, or
owes any amount to, the Company other than (i) for compensation (including
fringe benefits) to officers, employees and directors disclosed pursuant to
Section 2.7 and for reimbursement of ordinary and necessary expenses incurred in
connection with employment by the Company, (ii) for rights under the employee
benefit plans disclosed pursuant to Section 2.8, and (iii) as otherwise
disclosed pursuant to this Agreement.
2.14 COMMISSIONS. Except for Societe Generale and/or XX Xxxxx
Securities Corporation, whose fee will be borne by Contico and Allibert no
person, firm or corporation is entitled to any commission or broker's or
finder's fee in connection with the sale of the Contico Interest contemplated by
this Agreement by reason of any act or omission of the Company or Contico.
2.15 ILLEGAL PAYMENTS. No part of the Company's business is dependent
upon, or results from any payments, direct or indirect, in the nature of bribes,
kick-backs, or similar payments to any government or agency thereof or to any
other person, or in the nature of contributions to any domestic or foreign
political party or candidate, and no such illegal payments have been made.
2.16 CUSTOMERS. SCHEDULE 2.16 lists all of the Company's and AIL's
major customers for the past three years (being each party or company
representing three percent or more of the gross sales of the Company in 1996,
1997 and the eight month period ending August 31, 1998), and sets forth the
gross sales to each such customer during those periods. In the six (6) months
preceding the date of this Agreement, management of the Company has not brought
to Contico's attention that any of the customers listed for the period ending
August 31,1998 has indicated an intention to cease doing business with the
Company or AIL.
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ARTICLE 3
---------
Representations and Warranties of Contico
-----------------------------------------
Contico hereby represents and warrants to the Buyer that:
3.1 STATUS OF CONTICO.
(a) EXISTENCE. Contico is a corporation duly organized, entitled to
conduct business and validly existing in good standing under the laws of
Missouri.
(b) POWER. Contico has the power to own and lease its properties,
to conduct its business as currently conducted, and to perform all of its
obligations under this Agreement.
(c) AUTHORIZATION
(i) Contico has the right, power and authority to enter into
this Agreement and to consummate the sale of the Contico Interest contemplated
by, and otherwise to comply with and perform its obligations under, this
Agreement;
(ii) The execution and delivery by Contico of this Agreement,
and the consummation by Contico of the sale of the Contico Interest contemplated
by, and other compliance with and performance of its obligations under, this
Agreement have been duly authorized by all necessary corporate action on the
part of Contico in compliance with governing or applicable agreements,
instruments or other documents (including its articles of incorporation and
bylaws (as amended)) and applicable law; and
(iii) This Agreement constitutes the valid and binding
agreement of Contico that is enforceable against Contico in accordance with its
terms.
(d) ABSENCE OF VIOLATIONS OR CONFLICTS. The execution and delivery
of this Agreement by Contico and the consummation by Contico of the transactions
contemplated by, or other compliance with or performance under, this Agreement,
do not and will not with the passage of time or giving of notice or both:
(i) constitute a violation of, be in conflict with, constitute
a default or require any payment under, permit a termination of, require any
consent or authorization under, or result in the creation or imposition of any
material lien, encumbrance or other adverse claim or interest upon any
properties of Contico under (A) any contract, agreement, commitment, undertaking
or understanding to which Contico is a party or to which it or any of its assets
or properties are subject or bound, (B) any judgment, decree or order of any
governmental authority to which Contico or any of its properties are subject or
bound, (C) any applicable law, or (D) any governing or applicable agreements,
instruments or other documents (including its articles of incorporation and
bylaws (as amended)); or
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(ii) create, or cause the acceleration of the maturity of, any
debt, obligation or liability of Contico.
(e) NO GOVERNMENTAL CONSENTS REQUIRED. Except as noted in Section
6.6, no consent, approval, order or authorization of, or registration,
declaration or filing with, any governmental authority on the part of Contico is
required in connection with its execution or delivery of this Agreement or the
consummation of the sale of the Contico Interest by Contico.
3.2 COMMISSIONS. Except for Societe Generale and/or XX Xxxxx Securities
Corporation, whose fee will be borne by Contico and Allibert, no person, firm or
corporation is entitled to any commission or broker's or finder's fee in
connection with the purchase of the Contico Interest contemplated by this
Agreement by reason of any act or omission of Contico.
3.3 OWNERSHIP. Contico owns the Contico Interest, representing fifty
percent (50%) of the outstanding equity interests in the Company, free and clear
of all liens, claims, security interest, encumbrances and restrictions on
transfer of any nature whatsoever, but subject to the terms of the Operating
Agreement.
ARTICLE 4
---------
Representations and Warranties of Buyer
---------------------------------------
Buyer hereby represents and warrants to Contico as follows:
4.1 STATUS OF BUYER.
(a) EXISTENCE. Buyer is a corporation duly organized, entitled to
conduct business and validly existing in good standing under the laws of Ohio.
(b) POWER. Buyer has the power to own and lease its properties, to
conduct its business as currently conducted, and to perform all of its
obligations under this Agreement.
(c) AUTHORIZATION
(i) Buyer has the right, power and authority to enter into this
Agreement and to consummate the purchase of the Contico Interest contemplated
by, and otherwise to comply with and perform its obligations under, this
Agreement;
(ii) The execution and delivery by Buyer of this Agreement, and
the consummation by Buyer of the purchase of the Contico Interest contemplated
by, and other compliance with and performance of its obligations under, this
Agreement have been duly authorized by all necessary corporate action on the
part of Buyer in compliance with governing or applicable agreements, instruments
or other documents (including its certificate of incorporation and bylaws (as
amended)) and applicable law; and
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(iii) This Agreement constitutes the valid and binding
agreement of Buyer that is enforceable against Buyer in accordance with its
terms.
(d) ABSENCE OF VIOLATIONS OR CONFLICTS. The execution and delivery
of this Agreement by Buyer and the consummation by Buyer of the transactions
contemplated by, or other compliance with or performance under, this Agreement,
do not and will not with the passage of time or giving of notice or both:
(i) constitute a violation of, be in conflict with, constitute
a default or require any payment under, permit a termination of, require any
consent or authorization under, or result in the creation or imposition of any
material lien, encumbrance or other adverse claim or interest upon any
properties of Buyer under (A) any contract, agreement, commitment, undertaking
or understanding to which Buyer is a party or to which it or any of its assets
or properties are subject or bound, (B) any judgment, decree or order of any
governmental authority to which Buyer or any of its properties are subject or
bound, (C) any applicable law, or (D) any governing or applicable agreements,
instruments or other documents (including its articles of incorporation and
bylaws (as amended)); or
(ii) create, or cause the acceleration of the maturity of, any
debt, obligation or liability of Buyer.
(e) NO GOVERNMENTAL CONSENTS REQUIRED. Except as noted in Section
7.3 and for a notice of nonreviewable acquisition of AIL pursuant to the
Investment Canada Act, no consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental authority on the part
of Buyer is required in connection with its execution or delivery of this
Agreement or the consummation of the purchase of the Contico Interest by Buyer.
4.2 COMMISSIONS. No person, firm or corporation is entitled to any
commission or broker's or finder's fee in connection with the purchase of the
Contico Interest contemplated by this Agreement by reason of any act or omission
of Buyer.
ARTICLE 5
---------
Closing and Closing Date
------------------------
The pre-closing and closing (collectively, "Closing") of the sale of
the Contico Interest contemplated by this Agreement shall take place at the
office of Xxxxxxxx Xxxxxx commencing at 10:00 a.m. local time on January 5, 1999
(the "Closing Date"), or on a business day subsequent thereto, not later than
February 1, 1999, agreed to by the parties following satisfaction or waiver of
all conditions to Closing set forth herein.
ARTICLE 6
---------
Covenants of Contico
--------------------
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6.1 CONDUCT OF BUSINESS. From the date hereof to the Closing Date,
except for transactions which are approved in writing by the Buyer in its
discretion, and subject to Section 6.11, Contico shall cause the Company and AIL
to refrain from:
(a) Subjecting any of the Company's or AIL's material assets to any
lien, encumbrance or other claim of any kind, exclusive of liens permitted by
this Agreement;
(b) Except for sales of inventory in the ordinary course of
business, selling, assigning, transferring, leasing, licensing or otherwise
disposing of any material portion of the Company's or AIL's assets and
properties;
(c) Modifying, amending, altering or terminating (whether by
written or oral agreement, or any manner of action or inaction) any of the
Leases, Intellectual Property Rights, Contract Rights or Insurance Policies, or
entering into any such arrangement which is outside of the ordinary course of
business or which involves the payment or receipt by the Company or AIL of an
amount in excess of $100,000; and/or
(d) Taking or permitting any other action that, if taken or
permitted immediately prior to the execution of this Agreement, would constitute
an exception to the representations and warranties in Section 2.2(d) hereof.
6.2 AFFIRMATIVE COVENANTS. From the date hereof to the Closing Date,
subject to Section 6.11, Contico shall cause each of the Company and AIL to:
(a) Maintain property and liability insurance with respect to its
assets and properties in amounts and with coverage at least as great as the
amounts and coverage in effect on the date of this Agreement;
(b) Maintain, in a manner consistent with past practice, the
respective assets and properties of the Company and AIL in good repair, order
and condition, reasonable wear and tear excepted, and use its best efforts to
preserve its possession and control of all of such properties;
(c) Maintain the books, accounts and records of the Company and AIL
in a manner consistent with past practice and with sound business practices;
(d) Allow, at all reasonable times, the Buyer's employees,
attorneys, auditors, accountants and other authorized representatives, free and
full access to the facilities, plants, properties, personnel, books, records,
documents and correspondence of the Company and AIL, in order that the Buyer may
have full opportunity to make such investigation as it may desire of the
business of the Company and AIL and the personnel employed in such businesses;
(e) Comply with all applicable law relating to the conduct of its
business, and conduct its business in such a manner so that on the Closing Date
the representations and warranties
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contained in this Agreement shall be true as though such representations and
warranties were made on and as of such date, except for changes permitted or
contemplated by the terms of this Agreement;
(f) Provide the Buyer with (i) prompt written notice of any
material adverse change in the assets, operations, liabilities (whether
contingent or otherwise), earnings, prospects, business or condition (financial
or otherwise) of the Company or AIL, and (ii) monthly financial statements of
the Company and AIL; and
(g) Operate its business in the ordinary course so as to preserve
its business organization intact, including the services of its present officers
and the goodwill of its suppliers, customers and others having business
relations with such Seller.
6.3 CONSENTS OF THIRD PARTIES. Contico shall support and cooperate
with, and offer all reasonable assistance to, the Buyer in negotiating with any
third party under any of the Contract Rights, in order to obtain any consent or
approval that may be required in connection with the sale of the Contico
Interest.
6.4 DUE DILIGENCE. Contico hereby authorizes the Buyer to continue its
due diligence examination of the assets, liabilities, books and records
(including without limitation personnel records and employment histories) of the
Company and AIL for purposes of confirming the representations and warranties of
Contico in this Agreement. Contico shall cause the Company and AIL each (i) to
make available and assemble at all reasonable times during normal business hours
all records, Leases, Debt Instruments, Contract Rights, Insurance Policies,
Intellectual Property Rights and other documents and data related to the
Company's assets and liabilities, (ii) to allow the Buyer and its authorized
representatives (including without limitation its legal, actuarial, accounting
and other professional advisors and its environmental consultants) to make
physical inspections of the Company's and AIL's facilities and, in Buyer's
discretion and at Buyer's expense, to initiate and implement a Phase I
environmental assessment of such facilities by an environmental consulting firm
reasonably satisfactory to Contico, and if recommended by such consultant, a
Phase II investigation (collectively, the "Environmental Assessment"), and (iii)
to reasonably cooperate with the Buyer's other due diligence requirements.
Contico consents to the examination by Buyer's auditors of all work papers and
other records of the independent public accountants of the Company and AIL, and
Contico shall cooperate with the Buyer to obtain such access and related
information from the Company's and AIL's independent public accountants.
6.5 CONSENTS AND CLOSING CONDITIONS. Contico shall use all commercially
reasonable efforts (a) to obtain such consents from third parties and to take
other actions as may be appropriate in order to fulfill the closing conditions
contained herein which are reasonably within Contico's control, and (b) to cause
the representations and warranties in Articles 2 and 3 to be true and correct on
and as of the Closing Date.
6.6 XXXX-XXXXX-XXXXXX COMPLIANCE. Within ten (10) business days after
the date of this Agreement, Contico shall file, or cause the Company to file, an
appropriate notification and report form with the Federal Trade Commission and
the Antitrust Division of the Department of Justice (collectively,
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the "Antitrust Authorities") pursuant to The Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended ("HSR Act"), and shall request early
termination of the waiting period under the HSR Act. Contico shall furnish to
the Buyer such information as the Buyer shall require to complete its
notification, shall promptly notify the Buyer of any formal or informal request
for additional information received by Contico or the Company, from the
Antitrust Authorities, and shall promptly comply with all such requests.
6.7 NEGOTIATIONS WITH OTHERS. During the period from the date of this
Agreement to the Closing Date, or until such date as this Agreement may be
terminated in accordance with Article 13, neither Contico nor any of its
directors, officers, counsel, accountants, auditors or other agents retained by
or acting on behalf of Contico shall, directly or indirectly, solicit or
encourage, or enter into any agreement with, or hold discussions with, any
corporation, partnership, person or other entity or group (other than Buyer or
an affiliate of Buyer) seeking to make a proposal regarding a sale or purchase
of the Contico Interest in the Company or AIL or a merger, consolidation, sale
or purchase of assets or other similar transaction involving the Company or AIL.
6.8 COMPETITION. At the Closing, Contico shall execute and deliver to
Buyer a written agreement not to compete with the Buyer in the form attached as
EXHIBIT C ("Noncompetition Agreement").
6.9 INTEGRATION OF OPERATIONS. During the period from the date of this
Agreement to the Closing Date, Contico shall cause the Company to consult and
cooperate with Buyer to prepare for and facilitate the integration of the
Company's and AIL's operations with the Buyer's operations following the Closing
Date, including, without limitation, preparation for the integration of such
financial and accounting, and management information, systems and operations
(including, without limitation, the preparation for the necessary installation
of all of Buyer's hardware and software systems), employee compensation and
benefit matters, and employee training, provided that all such integration prior
to the Closing Date shall be subject to the approval of the Company.
6.10 ENVIRONMENTAL REMEDIATION. Contico and Allibert shall pay one-half
the cost of any Phase II investigation and testing recommended by the consulting
firm described in Section 6.4, with Buyer to pay the remaining one half. If the
Environmental Assessment identifies any environmental condition affecting the
Company's property, facility or business that requires remediation in order to
comply with applicable law, then Contico and Allibert shall cause such
remediation to be completed at their expense to the extent such remediation can
be completed for an estimated cost of less than One Million Dollars
($1,000,000), and attached to this Agreement as SCHEDULE 6.10 is a Contribution
Agreement between Contico and Allibert to such effect. If such estimated cost is
One Million Dollars ($1,000,000) or more, then Contico shall have the right to
terminate this Agreement in its sole discretion without effecting any
remediation; provided that Buyer may notify Contico in writing that it elects to
close in accordance with this Agreement and to accept the property, facility and
business of the Company in its current condition, in which case this Agreement
shall continue in force and the Contico Interest Purchase Price and Closing
Payment shall be reduced by One Million Dollars ($1,000,000).
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6.11 COVENANTS CONCERNING COMPANY. Notwithstanding the foregoing
provisions of this Article 6, it is understood and acknowledged by the parties
that Contico, as the owner of a one-half interest in the Company, does not own a
controlling interest in the Company and AIL, and that control is shared with
Allibert. Contico shall not be deemed to have breached violated any provision of
this Article 6 by reason of any action or omission of Allibert with respect to
the Company or AIL that results in the nonperformance of any of the foregoing
covenants, as long as Contico did not participate in such action or omission.
6.12 AMENDMENT OF OPERATING AGREEMENT. Notwithstanding the foregoing
provisions of this Article 6, it is understood that Allibert and Contico may
amend the Operating Agreement of the Company to the extent appropriate (a) to
eliminate those provisions that are no longer applicable to the Company or its
members, or that have been fully performed, or that impose duties on Allibert or
Contico that are personal to them or that cannot reasonably be performed by a
transferee of their interests, (b) that conflict with the terms of this
Agreement or any related agreement (including but not limited to the
Noncompetition Agreement), (c) to amend the technology license between Allibert
Equipement S.A. and the Company to provide that no obligation to provide
prospective technology or technical assistance on the part of Allibert
Equipement S.A. shall be the subject of such license, (d) to preserve the
existence of the Company following any sale by Contico and Allibert to the
Buyer, and (e) to make any other changes that the Allibert and Contico deem
appropriate and that are not inconsistent with the sale of the Contico Interest.
Such amendments shall be subject to the approval of the Buyer, which shall not
be unreasonably withheld.
6.13 CONTRIBUTION. As of or prior to the Closing, Contico shall assign
to the Company, for no additional consideration, all rights of Contico with
respect to the collapsible bin technology that is presently licensed from
Contico to the Company, pursuant to a written instrument of assignment
reasonably satisfactory to Buyer.
6.14 NET WORTH. Contico hereby covenants to Buyer that, at all times
during the eighteen month period commencing on the Closing Date, and thereafter
for so long as any indemnification claims asserted against Contico in accordance
with this Agreement remain unresolved, Contico shall maintain a net worth of not
less than Twenty Million Dollars ($20,000,000). Contico shall deliver to the
Buyer in confidence and upon request, but not more frequently than quarterly,
such financial statements or other information as the Buyer shall reasonably
request to confirm Contico's compliance with this Section.
ARTICLE 7
---------
Covenants of the Buyer
----------------------
7.1 CONSENTS AND CLOSING CONDITIONS. The Buyer shall use all
commercially reasonable efforts (a) to obtain such consents from third parties
and to take other actions as may be appropriate in order to fulfill the closing
conditions contained herein which are reasonably within its control, and (b) to
cause the representations and warranties of the Buyer in Article 4 to be true
and correct on and as of the Closing Date.
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7.2 CONFIDENTIALITY OF INFORMATION. Prior to the Closing Date, and for
a period of two years from the date of this Agreement if the Closing Date does
not occur, the Buyer and its employees, agents, auditors, attorneys and other
authorized representatives shall not, without the Company's prior written
consent, communicate or divulge to any person or entity or use for their benefit
any information, other than information becoming public other than by the
Buyer's action and information developed independently by Buyer, concerning any
confidential business information possessed, owned or used by the Company that
may be communicated to, acquired by or learned by the Buyer pursuant to this
Agreement or the Buyer's investigations contemplated hereby.
7.3 XXXX-XXXXX-XXXXXX COMPLIANCE. Within ten (10) business days after
the date of this Agreement, the Buyer shall file or cause its ultimate parent
entity to file an appropriate notification and report form with the Antitrust
Authorities pursuant to the HSR Act, and shall request early termination of the
waiting period under the HSR Act. The Buyer shall furnish to Contico such
information as it shall require to complete the notification required of
Contico, shall promptly notify Contico of any formal or informal request for
additional information received by the Buyer or its ultimate parent entity from
the Antitrust Authorities, and shall promptly comply with all such requests.
7.4 NAMES. Within ninety (90) days after the Closing Date, the Buyer
shall cause the Company and AIL (a) to change their respective names to remove
the Contico portions of their names, and (b) to cease all manufacture of
inventory bearing such name or related marks. As promptly thereafter as
reasonable, and in any event within 12 months after the Closing Date, the Buyer
shall cause the Company and AIL to remove or cover all references to the Contico
name and related marks on all Company and AIL property (except unsold inventory
manufactured by the Company before the 90th day after the Closing Date).
Effective as of the Closing, Contico hereby grants to the Company a nonexclusive
limited license to its name and related marks historically used by the Company,
for the limited purposes set forth in this Section 7.4.
7.5 INDEBTEDNESS OF COMPANY. At the time of the Closing, the Buyer
either (a) shall assume, guarantee or accept all then existing indebtedness of
the Company and AIL under agreements and instruments listed on SCHEDULE 2.6(a)
on terms satisfactory to Contico, Allibert and the respective lenders, or (b) at
Buyer's expense shall cause all such indebtedness to be paid in full on the date
of the Closing.
ARTICLE 8
---------
Tax Matters
-----------
8.1 PAYMENT OF TAXES. Contico shall pay in a timely fashion, before the
same shall become delinquent and before penalties accrue thereon, all Taxes
(including any Taxes incurred in connection with the transactions contemplated
by this Agreement, if and to the extent Taxes are the responsibility of Contico)
(a) shown (or required to be shown) on any Return (or amendment thereto) filed
(or required to be filed) by Contico before, on or after the Closing Date, or
(b) that become due from or payable by Contico before, on or after the Closing
Date.
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8.2 COOPERATION AND RECORDS RETENTION. From time to time after the
Closing, Contico and the Buyer shall permit reasonable access, and shall cause
their respective accountants and other representatives to permit reasonable
access to each other, to the information that they or their accountants or other
representatives have within their control and that may be reasonably necessary
in connection with the preparation of any Return or the examination by any
taxing authority or other administrative or judicial proceeding relating to any
Return. Any party in possession of such information may require that a
commercially reasonable confidentiality undertaking be signed by the party
requesting access to such information under this Section. Each of Contico and
the Buyer shall retain or cause to be retained, until the applicable statutes of
limitations (including any extensions) have expired, copies of all Returns for
all tax periods beginning before the Closing Date, together with supporting work
schedules and other records or information that may be relevant to such Returns.
8.3 TAX ELECTIONS. No new elections with respect to Taxes, or any
changes in current elections with respect to Taxes, affecting any of the assets
shall be made by Contico or the Company after the date of this Agreement without
the prior written consent of the Buyer.
ARTICLE 9
---------
Buyer's Conditions to Closing
-----------------------------
The obligation of the Buyer to purchase the Contico Interest shall be
subject to the fulfillment of each of the following conditions:
9.1 CONTINUED TRUTH OF WARRANTIES. The representations and warranties
of Contico in Articles 2 and 3 hereof shall be true and correct in all material
respects on the Closing Date as if made on such date, except for changes
contemplated or permitted by this Agreement; provided, however, that this
condition shall be deemed satisfied if Contico agrees to indemnify the Buyer and
Company against all losses that may be suffered as a result of any materially
incorrect representation or warranty.
9.2 PERFORMANCE OF COVENANTS. Contico shall have performed all
covenants and obligations and complied with all conditions required by this
Agreement or to be performed or complied with by it on or prior to the Closing
Date.
9.3 HSR ACT. All applicable waiting periods under the HSR Act shall
have expired or been terminated.
9.4 ABSENCE OF LITIGATION. No suit, claim, action, proceeding or
governmental investigation shall have been commenced by a governmental authority
or other third party against any of the parties to this Agreement which
challenges the validity, legality or enforceability of this Agreement or the
performance by the parties hereto of their respective obligations hereunder, or
which could reasonably be expected to have a material adverse effect on the
Company.
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9.5 CERTIFICATE. Contico shall have furnished Buyer with a certificate
dated the Closing Date that, to the best of its knowledge and belief, the
conditions set forth in Sections 9.1 through 9.4 have been satisfied.
9.6 EXTRAORDINARY EVENTS. There shall not have occurred (a) any
impairment of a significant portion of the physical assets of the Company, (b)
any major labor dispute affecting the Company, (c) any significant impairment of
the operations of the Company and AIL taken as a whole, or (d) any judicial,
governmental or administrative injunction which has or which can reasonably be
expected to result in a reduction of production by the Company of more than 20%
for three consecutive months as compared to the same period in the prior year.
ARTICLE 10
----------
Contico's Conditions to Closing
-------------------------------
The obligation of Contico to sell the Contico Interest shall be subject
to the fulfillment of the following conditions:
10.1 CONTINUED TRUTH OF WARRANTIES. The representations and warranties
of the Buyer herein contained shall be true and correct in all material respects
on the Closing Date as if made on such date.
10.2 PERFORMANCE OF COVENANTS. The Buyer shall have performed all
covenants and obligations and complied with all conditions required by this
Agreement to be performed or complied with by it on or prior to the Closing
Date.
10.3 HRS ACT. All applicable waiting periods under the HSR Act shall
have expired or been terminated.
10.4 ABSENCE OF LITIGATION. No suit, claim, action, proceeding or
governmental investigation shall have been commenced by a governmental authority
or other third party against either of the parties to this Agreement which
challenges the validity, legality or enforceability of this Agreement or the
performance by the parties hereto of their respective obligations hereunder, or
which could reasonably be expected to have a material adverse effect on the
Company.
10.5 CERTIFICATE. Buyer shall have furnished Contico with a certificate
dated the Closing Date that, to the best of Buyer's knowledge and belief, the
conditions set forth in Sections 10.1 through 10.4 have been satisfied.
ARTICLE 11
----------
Documents to be Delivered at Closing
------------------------------------
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11.1 DOCUMENTS TO BE DELIVERED BY CONTICO. At the Closing, Contico
shall:
(a) Deliver to the Buyer a certified copy of the resolutions
adopted by the board of directors of Contico, authorizing the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby, duly certified as of the Closing Date by the Secretary or an Assistant
Secretary of Contico;
(b) Deliver to Buyer certificates of good standing or their
equivalent, dated not more than ten days prior to the date of Closing, attesting
to the good standing of the Company under the laws of the State of Missouri and
AIL under the laws of the Province of Quebec;
(c) To the extent any consents or approvals shall be necessary to
any of the transactions herein contemplated, deliver to Buyer copies of all such
consents or approvals;
(d) Execute and deliver a Transition Services Agreement
substantially in the form of EXHIBIT D attached to this Agreement ("Transition
Services Agreement");
(e) Execute and deliver the Noncompetition Agreement and Escrow
Agreement; and
(f) Execute and deliver to Buyer an appropriate instrument of
transfer and assignment, providing good and marketable title with respect to the
Contico Interest, consistent with the terms of this Agreement.
11.2 DOCUMENTS TO BE DELIVERED BY BUYER. At the Closing, Buyer shall:
(a) Deliver to Contico a certified copy of the resolutions adopted
by the board of directors of Buyer, authorizing the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby,
duly certified as of the Closing Date by the Secretary or an Assistant Secretary
of Buyer;
(b) Deliver to Contico a certificate of good standing or its
equivalent, dated not more than ten days prior to the Closing Date, attesting to
the good standing of Buyer as a corporation under the laws of the State of
Missouri;
(c) To the extent any consents or approvals shall be necessary to
any of the transactions herein contemplated, deliver to Company upon request
copies of all such consents or approvals as obtained by Buyer;
(d) Execute and deliver the Transition Services Agreement,
Noncompetition Agreement and Escrow Agreement; and
(e) Deliver the Contico Interest Purchase Price to Contico as set
forth in Section 1.3 of this Agreement.
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ARTICLE 12
----------
Survival and Indemnification
----------------------------
12.1 SURVIVAL. The representations, warranties, covenants and
agreements set forth in this Agreement or in any certificate or other writing
delivered in connection with this Agreement shall survive the Closing and the
sale of the Contico Interest contemplated hereby, but only to the extent
provided in Section 12.4 below.
12.2 GENERAL INDEMNIFICATION.
(a) BY CONTICO. Subject to Section 12.4 below, by execution of
this Agreement, Contico agrees to indemnify the Buyer, the Company and their
respective successors and assigns and hold them harmless against and in respect
of:
(i) fifty percent (50%) of (A) any and all loss, liability,
cost, expense or damage (including judgments and settlement payments) incurred
by any of them incident to, arising in connection with or resulting from any
breach of a representation, warranty or covenant made or contained in Article 2
or Article 6 (excluding Sections 6.6, 6.7, 6.8, 6.13 and 6.14) of this Agreement
or in any Exhibit, Schedule, certificate or other document executed and
delivered to Buyer by or on behalf of Contico under or pursuant to this
Agreement or the transactions contemplated herein, together with (B) all costs,
expenses and all other actual damages incurred by any of them in claiming,
contesting or remedying any such breach or inaccurate representation described
in this paragraph (i), such costs, expenses and damages to include, by way of
illustration and not limitation, all legal and accounting fees, other
professional expenses and all filing fees and collection costs incident thereto
and all such fees, costs and expenses incurred in defending claims which, if
successfully prosecuted, would have resulted in Damages (as defined below); and
(ii) one hundred percent (100%) of (A) any and all loss,
liability, cost, expense or damage (including judgments and settlement payments)
incurred by any of them incident to, arising in connection with or resulting
from any breach of a representation, warranty or covenant of Contico made or
contained in Article 3 or Section 6.6, 6.7, 6.8, 6.13 or 6.14 of this Agreement,
together with (B) all costs, expenses and all other actual damages incurred by
any of them in claiming, contesting or remedying any breach or incorrect
representation described in this paragraph (ii), such costs, expenses and
damages to include, by way of illustration and not limitation, all legal and
accounting fees, other professional expenses and all filing fees and collection
costs incident thereto and all such fees, costs and expenses incurred in
defending claims which, if successfully prosecuted, would have resulted in
Damages.
(b) BY BUYER. By execution of this Agreement, Buyer agrees to
indemnify Contico and its successors and assigns and hold them harmless against
and in respect of:
(i) any and all loss, liability, cost, expense or damage
(including judgments and settlement payments) incurred by any of them incident
to, arising in connection with or resulting
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from any breach of a representation, warranty, or covenant of the Buyer made or
contained in this Agreement or in any Exhibit, Schedule, certificate or document
executed and delivered by or on behalf of Buyer under or pursuant to this
Agreement or the transactions contemplated herein; and
(ii) any and all costs, expenses and all other actual damages
incurred by such Selling Party in claiming, contesting or remedying any breach
or incorrect representation of Buyer described above, including, by way of
illustration and not limitation, all legal and accounting fees, other
professional expenses and all filing fees and collection costs incident thereto
and all such fees, costs and expenses incurred in defending claims which, if
successfully prosecuted, would have resulted in Damages.
(c) DAMAGES. Any and all of the items set forth in Section 12.2(a)
or (b) for which a party is entitled to be indemnified hereunder are
collectively called "Damages." The computation of Damages shall take into
account any benefit received and receivable by an Indemnitee in respect of an
indemnifiable matter, including without limitation amounts received under
policies of insurance, tax benefits and other third party reimbursement or
absorption of loss. In no event shall "Damages" include any loss, liability,
damage or expense attributable to any matter to the extent either (i) a reserve
for such matter was included in the Interim Balance Sheet, or (ii) such loss,
liability, damage or expense was taken into account in the determination of the
Contico Interest Purchase Price as adjusted under this Agreement.
(d) PRIOR DISCLOSURE OR KNOWLEDGE. Notwithstanding the foregoing
provisions of this Article 12 or any other provision of this Agreement, a party
shall not be entitled to be indemnified for its Damages incurred in connection
with a purported breach of any representation or warranty if the party from whom
indemnity is sought can demonstrate that the facts or circumstances on which
such indemnity claim was made were, as of or prior to the Closing, disclosed in
writing to or known by the party requesting indemnification or its authorized
representatives.
12.3 NOTICE OF, AND PROCEDURES FOR, COLLECTING INDEMNIFICATION.
(a) INITIAL CLAIM NOTICE. When a party becomes aware of a
situation which may result in Damages for which it would be entitled to be
indemnified hereunder, such party (the "Indemnitee") shall submit a written
notice (the "Initial Claim Notice") to the other party (the "Indemnitor") to
such effect with reasonable promptness after it first becomes aware of such
matter and shall furnish the Indemnitor with such information as it has
available demonstrating its right or possible right to receive indemnity. If the
potential claim is predicated upon, or later results in, the filing by a third
party of any action at law or in equity (a "Third Party Claim"), the Indemnitee
shall provide the Indemnitor with a supplemental Initial Claim Notice not later
than ten (10) days prior to the date on which a responsive pleading must be
filed, and shall also furnish a copy of such claim (if made in writing) and of
all documents received from the third party in support of such claim. Each
Initial Claim Notice shall name, when known, the person or persons making the
assertions which are the basis for such claim.
(b) RIGHTS OF INDEMNITOR. If, prior to the expiration of thirty
(30) days from the mailing of an Initial Claim Notice (the "Claim Answer
Period"), the Indemnitor shall request in writing
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that such claim not be paid, the same shall not be paid, and the Indemnitor
shall settle, compromise or litigate in good faith such claim, and employ
attorneys of its choice to do so; provided, however, that Indemnitee shall not
be required to refrain from paying any claim which has matured by court judgment
or decree, unless appeal is taken therefrom and proper appeal bond posted by the
Indemnitor, nor shall it be required to refrain from paying any claim where such
action would result in the foreclosure of a lien upon any of its assets or a
default in a lease or other contract except a lease or other contract which is
the subject of the dispute. If Allibert and Contico each is responsible for a
portion of the Damages attributable to such claim (a "Joint Indemnity Matter"),
Allibert and Contico must agree on the handling of such claim jointly in order
to have the right to settle, compromise or litigate such claim. Indemnitee shall
cooperate fully to make available to the Indemnitor and its attorneys,
representatives and agents, all pertinent information under its control.
Indemnitee shall have the right to elect to settle or compromise all other
contested claims with respect to which the Indemnitor has not, within the Claim
Answer Period, acknowledged in writing (i) liability therefor (should such
claim, to the extent Indemnitor is ultimately determined to be liable for such
indemnification under this Agreement, ultimately be resolved against
Indemnitee), and (ii) its election to assume full responsibility for the
settlement, compromise, litigation and payment of such claim (and in the case of
a Joint Indemnity Matter, the agreement of Allibert and Contico on the handling
of such claim).
(c) FINAL CLAIMS STATEMENT. At such time as Damages for which the
Indemnitor is liable hereunder are incurred by Indemnitee by actual payment
thereof or by entry of a final judgment, Indemnitee shall forward a Final Claims
Statement to the Indemnitor setting forth the amount of such Damages in
reasonable detail on an itemized basis. All undisputed amounts reflected on each
Final Claims Statement shall be paid promptly by Indemnitor to Indemnitee.
12.4 LIMITATIONS ON INDEMNIFICATION BY CONTICO.
(a) TIME LIMITATION. Notwithstanding the other provisions of this
Article 12, Contico shall not be liable to indemnify Buyer or the Company for
Damages unless the Buyer or the Company delivers an Initial Claim Notice to
Contico of its claim or potential claim for indemnification thereunder not later
than eighteen (18) months after the Closing Date. Such limitation shall not
apply, however, to any claim by Buyer or the Company for indemnification based
on the Buyer's failure to receive good, marketable and indefeasible title to the
Contico Interest free and clear of all liens, claims, encumbrances and transfer
restrictions.
(b) LIMITATIONS ON AMOUNT. Notwithstanding the other provisions of
this Article 12, Contico shall not be liable to indemnify the Buyer or the
Company for Damages attributable to any breach of a representation, warranty or
covenant in this Agreement unless and until the indemnifiable Damages suffered
by Buyer and the Company as a result of such breach exceeds $2,000 on a per
claim basis (the "Indemnifiable Claims") and the aggregate amount of all
Indemnifiable Claims exceeds $500,000 (the "Gross Basket"), and thereafter
indemnification shall be made only to the extent of such excess. In no event
shall Contico be liable to indemnify the Buyer or the Company for Damages that
exceed thirty percent (30%) of the Contico Interest Purchase Price, except for
Damages attributable to the Buyer's failure to receive good, marketable and
indefeasible title to the Contico Interest free and clear of all liens, claims,
encumbrances and transfer restrictions.
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ARTICLE 13
----------
Termination of Agreement
------------------------
13.1 TERMINATION. This Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing:
(a) by mutual written consent of the Buyer and Contico;
(b) upon written notice from the Buyer to Contico if either (i)
any of the conditions precedent to the Buyer's obligations hereunder shall have
become incapable of fulfillment through no fault of the Buyer, or (ii) Contico
is in breach of any covenant of Contico in this Agreement, which breach has
continued for ten (10) days after delivery of written notice to Contico
specifying such breach;
(c) upon written notice from Contico to the Buyer if either (i)
any of the conditions precedent to Contico's obligations hereunder shall have
become incapable of fulfillment through no fault of Contico (ii) Contico has the
right to terminate this Agreement pursuant to Section 6.10, or (iii) Buyer is in
breach of any representation, warranty or covenant of Buyer in this Agreement,
which breach has continued for ten (10) days after delivery of written notice to
Buyer specifying such breach; or
(d) upon written notice from either party to the other party
hereto if the Closing does not occur by February 1, 1999 (unless the failure to
consummate the purchase and sale of the Contico Interest by such date shall be
due to the action or failure to act of the party seeking to terminate this
Agreement or any affiliate thereof).
Any such written notice shall state the grounds for termination asserted by the
party delivering such notice of termination.
13.2 EFFECT OF TERMINATION. If this Agreement is terminated and the
transactions contemplated hereby are abandoned pursuant to Section 13.1, then
this Agreement shall become null and void and of no effect, except for the
provisions of Section 7.2, this Article 13 and Article 14 (relating to, among
other things, notices, contract construction and effect and confidentiality);
PROVIDED, HOWEVER, that such termination shall not affect the right of either
party to bring an action against the other party for a breach occurring prior to
the termination or for a wrongful termination.
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ARTICLE 14
----------
Miscellaneous
-------------
14.1 NOTICES. Any notices or other communications required or permitted
hereunder to any party hereto shall be sufficiently given if (a) delivered in
person, (b) sent by certified or registered mail, postage prepaid, (c)
dispatched by reputable overnight delivery service, or (d) transmitted by
facsimile machine if an answerback is received and notice is confirmed by any
other manner provided herein, in each case addressed as follows:
In the case of Buyer:
Xxxxx Industries, Inc.
0000 Xxxxx Xxxx Xxxxxx
Xxxxx, Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, Vice President - Finance
Facsimile: 330/761-6156
With a copy to:
Xxxxxx & XxXxxxxx, L.P.A.
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx, Xxxx 00000
Attn: Xxxxx X. X'Xxxx
Facsimile: 330/253-8601
In the case of Contico:
Contico International, Inc.
0000 Xxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxx, Vice Chairman
Facsimile: 314/997-0776
With a copy to:
Xxxxxxxx Xxxxxx
Xxx Xxxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Facsimile: 314/552-7000
or such substituted address as any party shall have given notice to the others
in writing in the manner set forth in this Section 14.1.
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14.2 AMENDMENT. This Agreement may be amended or modified in whole or
in part only by an agreement in writing executed by all parties hereto and
making specific reference to this Agreement.
14.3 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one instrument.
14.4 BINDING ON SUCCESSORS AND ASSIGNS. Prior to the Closing, neither
party hereto may assign this Agreement or any rights or obligations hereunder
except (a) with the prior written consent of the other party hereto, or (b) in
connection with the sale or other disposition of substantially all of such
party's assets or business; provided that Buyer may assign its rights and
obligations hereunder to a wholly owned subsidiary (including an indirect
subsidiary) if (i) such assignee executes a written assumption agreement
reasonably satisfactory to Contico, and (ii) the Buyer executes and delivers a
Guaranty of Performance in the form of Exhibit E attached hereto. From and after
the Closing, either party may freely assign its rights under this Agreement to
any other person, firm or corporation, but such assignment shall not relieve the
assigning party of its obligations hereunder. Subject to the foregoing, this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
and against the parties hereto and their respective successors and assigns in
accordance with the terms hereof.
14.5 SEVERABILITY. In the event that any one or more of the provisions
contained in this Agreement or any application thereof shall be invalid, illegal
or unenforceable in any respect, the validity, legality or enforceability of the
remaining provisions of this Agreement and any other application thereof shall
not in any way be affected or impaired thereby; provided, however, that to the
extent permitted by applicable law, any invalid, illegal, or unenforceable
provision may be considered for the purpose of determining the intent of the
parties in connection with the other provisions of this Agreement.
14.6 PUBLICITY. Except as may be required by law, any public
announcements concerning the transaction contemplated by this Agreement shall be
jointly planned and simultaneously released by Buyer and Contico following
approval by Allibert, and neither party shall act in this regard without the
prior written approval of the other party, which approval shall not be
unreasonably withheld.
14.7 HEADINGS. The headings in the sections and subsections of this
Agreement and in the Schedules are inserted for convenience only and in no way
alter, amend, modify, limit or restrict the contractual obligations of the
parties.
14.8 LIST OF EXHIBITS AND SCHEDULES. As mentioned in this Agreement,
there are attached hereto or delivered herewith, the following Exhibits and
Schedules:
EXHIBITS
--------
Section
Exhibit Document Reference
------- -------- ---------
A Form of Escrow Agreement 1.3(a)
B Organizational Documents 2.1(b)
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C Form of Noncompetition Agreement 6.7
D Form of Transition Services Agreement 11.1(c)
E Form of Guaranty of Performance 14.4
SCHEDULES
---------
Schedule
No. Schedule Caption
------ ----------------
2.1(d) Qualification
2.1(g) Absence of Violation or Conflicts
2.1(h) No Governmental Consents Required
2.2(a) Financial Statements
2.2(c) Capital Leases
2.2(d) Absence of Certain Changes
2.3 Tax Matters
2.4(a) Real and Personal Property
2.4(b) Leases; Subleases
2.4(c) Condition
2.5 Intellectual Property; Patents
2.6(a) Indebtedness
2.6(b) Other Contracts
2.6(c) Insurance
2.6(d) Status
2.7 Employment Relationships
2.8 Schedule of Plans
2.9 Labor Relations
2.10 Litigation
2.11 Compliance with Laws
2.12 Bank Accounts
2.13 Transactions with Affiliates
9.3 Consents
Each of the foregoing Exhibits and Schedules is incorporated herein by this
reference and expressly made a part hereof.
14.9 EXPENSES. Except to the extent otherwise provided in this
Agreement, each of the parties hereto shall bear its own expenses incurred in
connection with this Agreement and the transactions herein contemplated,
including, but not limited to, legal and accounting fees and expenses.
14.10 ENTIRE AGREEMENT; LAW GOVERNING. All prior negotiations and
agreements between the parties hereto are superseded by this Agreement. There
are no representations, warranties, understandings or agreements between the
parties with respect to the Contico Interest other than those expressly set
forth in this Agreement, or in an Exhibit or Schedule delivered pursuant hereto
or in the Guaranty, except as modified in writing concurrently herewith or
subsequent hereto. This Agreement
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shall be governed by and construed and interpreted according to the laws of the
State of Missouri, determined without reference to conflicts of law principles.
14.11 ARBITRATION. After the Closing, except for disputes concerning
the Audited Financial Statements and the EBIT calculation, all disputes between
the Buyer and Contico shall be settled by binding arbitration in the City of St.
Louis, Missouri in accordance with the commercial arbitration rules of the
American Arbitration Association. The disputing parties shall select a single
arbitrator, or if they cannot agree on an arbitrator, each shall designate an
arbitrator and the two so appointed shall select a third, with the decision of a
majority to be binding on all parties in interest. Judgment on any award may be
enforced in any court of competent jurisdiction. The costs of such arbitration
shall be assessed against the party whose position has not been accepted, as
determined by the arbitration panel, who may allocate the costs equitably in the
event that neither party's position is accepted in full.
[THE BALANCE OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their duly authorized representatives on the day and year
first above written.
XXXXX INDUSTRIES, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxxxx
Vice President-Finance
CONTICO INTERNATIONAL, INC.
By /s/ Xxxxx X. Xxxx
----------------------------------------
Xxxxx X. Xxxx, Vice Chairman
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