September 9, 2004 (Wire)
ASSET PURCHASE AND SALE AGREEMENT
BETWEEN
XXXXXXX, XXXXXXXXXXXX
(AS SELLER)
AND
GERDAU AMERISTEEL US INC.
(AS BUYER)
DATED AS OF SEPTEMBER 9, 2004
September 9, 2004 (Wire)
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS ....................................................... 1
ARTICLE II SALE AND PURCHASE OF PURCHASED ASSETS; ASSUMPTION OF ASSUMED
OBLIGATIONS .................................................................... 9
2.1 Purchased Assets .................................................. 9
2.2 Procedures for Assets Not Transferable ............................ 10
2.3 Excluded Assets ................................................... 11
2.4 Assumed Obligations ............................................... 12
2.5 Excluded Obligations .............................................. 13
2.6 Schedule Updates .................................................. 14
ARTICLE III PURCHASE PRICE AND PAYMENT ........................................ 14
3.1 Payment of Purchase Price ......................................... 14
3.2 Purchase Price Adjustment ......................................... 14
3.3 Allocation of Purchase Price ...................................... 16
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLER ...................... 16
4.1 Existence, Good Standing, Residency ............................... 16
4.2 Due Authorization ................................................. 16
4.3 Consents .......................................................... 17
4.4 Absence of Conflicts .............................................. 17
4.5 Financial Statements; Interim Reports ............................. 18
4.6 Title to Assets ................................................... 18
4.7 Compliance with Laws .............................................. 18
4.8 Taxes ............................................................. 19
4.9 Litigation ........................................................ 19
4.10 Brokers ........................................................... 20
4.11 Contracts ......................................................... 20
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4.12 Affected Employees ................................................ 21
4.13 Intellectual Property ............................................. 22
4.14 Environmental Matters ............................................. 22
4.15 Disclaimer ........................................................ 23
4.16 Purchased Assets Complete ......................................... 23
4.17 Recent Developments ............................................... 23
4.18 Leased Real Property .............................................. 24
4.19 Tangible Assets ................................................... 24
4.20 Warranties ........................................................ 24
4.21 Solvency .......................................................... 24
4.22 Disclosure ........................................................ 25
4.23 Accounts Receivable ............................................... 25
4.24 Disclaimer ........................................................ 25
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYER ....................... 26
5.1 Existence and Good Standing ....................................... 26
5.2 Due Authorization ................................................. 26
5.3 Consents .......................................................... 27
5.4 Absence of Conflicts .............................................. 27
5.5 Litigation ........................................................ 27
5.6 Brokers ........................................................... 27
5.7 Sufficient Funds .................................................. 27
ARTICLE VI COVENANTS OF THE SELLER ........................................... 28
6.1 Conduct of Business ............................................... 28
6.2 Negative Covenants Relating to Conduct of the Business ............ 28
6.3 Disclosure Schedules .............................................. 29
6.4 Notice of Events .................................................. 29
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6.5 Payment of Excluded Obligations ................................... 29
6.6 Repurchase of Uncollected Accounts Receivable ..................... 29
ARTICLE VII COVENANTS OF THE BUYER AND THE SELLER ............................. 30
7.1 HSR Act Notification; Other Consents .............................. 30
7.2 Access to Information, Inspections, Environmental Due Diligence ... 30
7.3 Post-Closing Environmental Matters ................................ 31
7.4 Title Commitment and Survey ....................................... 31
7.5 Motor Vehicles .................................................... 32
7.6 Tax Matters ....................................................... 32
7.7 Bulk Sales Compliance ............................................. 33
7.8 Confidentiality ................................................... 33
7.9 Payments Received ................................................. 34
7.10 Satisfaction of Conditions and Further Assurances ................. 34
7.11 Inventory Valuation Procedures .................................... 35
ARTICLE VIII CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BUYER .................. 35
8.1 Accuracy of Representations and Warranties ........................ 35
8.2 Compliance with Agreements and Covenants .......................... 35
8.3 Xxxx-Xxxxx-Xxxxxx ................................................. 35
8.4 No Injunctions .................................................... 35
8.5 Title Insurance ................................................... 35
8.6 Deliveries ........................................................ 36
8.7 Steel Xxxxx Acquisition ........................................... 36
8.8 Transition Services Agreement ..................................... 36
ARTICLE IX CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER ................. 36
9.1 Accuracy of Representations and Warranties ........................ 36
9.2 Compliance with Agreements and Covenants .......................... 36
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9.3 Xxxx-Xxxxx-Xxxxxx ................................................. 36
9.4 No Injunctions .................................................... 36
9.5 Deliveries ........................................................ 37
9.6 Steel Xxxxx Acquisition ........................................... 37
9.7 Transition Services Agreement ..................................... 37
ARTICLE X EMPLOYEES AND BENEFIT PLANS .......................................... 37
10.1 Offer of Employment ............................................... 37
10.2 Severance Benefits ................................................ 37
10.3 Vacation .......................................................... 38
10.4 Salaries and Benefits ............................................. 38
10.5 No Transfer of Assets ............................................. 40
10.6 WARN Act Notification ............................................. 40
10.7 Employee Records .................................................. 40
10.8 Union Recognition and Labor Contracts ............................. 40
10.9 General Employment Provisions ..................................... 41
ARTICLE XI CLOSING ........................................................... 41
11.1 Closing ........................................................... 41
11.2 Deliveries by the Seller .......................................... 41
11.3 Deliveries by the Buyer ........................................... 43
11.4 Prorations as of the Closing Date; Closing Costs .................. 44
ARTICLE XII TERMINATION ....................................................... 44
12.1 Termination ....................................................... 44
12.2 Effect of Termination ............................................. 45
ARTICLE XIII INDEMNIFICATION ................................................... 45
13.1 Survival; Remedy for Breach ....................................... 45
13.2 Indemnification by the Seller ..................................... 45
September 9, 2004 (Wire)
13.3 Indemnification by the Buyer ...................................... 47
13.4 Claims ............................................................ 49
13.5 Assumption of Defense ............................................. 49
13.6 Settlement or Compromise .......................................... 49
13.7 Failure of Indemnifying Person to Act ............................. 50
13.8 Direct Claims ..................................................... 50
13.9 Exclusive Remedy/Limitations ...................................... 50
13.10 Maintenance of Privilege .......................................... 51
ARTICLE XIV DISPUTE RESOLUTION ................................................. 51
14.1 Mutual Dispute Resolution ......................................... 51
ARTICLE XV MISCELLANEOUS ..................................................... 51
15.1 Disclosure Schedules .............................................. 51
15.2 Expenses .......................................................... 52
15.3 Amendment ......................................................... 52
15.4 Interpretation .................................................... 52
15.5 Notices ........................................................... 52
15.6 Waivers ........................................................... 53
15.7 Successors and Assigns ............................................ 53
15.8 No Third Party Beneficiaries ...................................... 53
15.9 Publicity ......................................................... 53
15.10 Further Assurances ................................................ 54
15.11 Severability ...................................................... 54
15.12 Entire Understanding .............................................. 54
15.13 Applicable Law .................................................... 54
15.14 Submission to Jurisdiction ........................................ 54
15.15 Waiver of Jury Trial .............................................. 55
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15.16 Counterparts ...................................................... 55
15.17 Specific Performance .............................................. 55
15.18 Passage of Title and Risk of Loss ................................. 55
September 9, 2004 (Wire)
EXHIBITS
Exhibit A Assignment and Assumption Agreement
Exhibit B Xxxx of Sale
Exhibit C Special Warranty Deed
Exhibit D Seller's Opinion of Counsel
Exhibit E Buyer's Opinion of Counsel
September 9, 2004 (Wire)
SCHEDULES
Schedule 1.1 Knowledge of the Seller
Schedule 1.2 Knowledge of the Buyer
Schedule 1.3 Permitted Encumbrances
Schedule 2.1(a) Tangible Assets
Schedule 2.1(b) Data Processing Hardware and Software
Schedule 2.1(d) Owned Real Property
Schedule 2.1(e) Intellectual Property
Schedule 2.1(h) Leased Property
Schedule 2.1(j) Assigned Contracts
Schedule 3.2(a) Statement of Working Capital
Schedule 4.3 Material Consents of the Seller
Schedule 4.5 Business Financial Statements
Schedule 4.6(a) Exception to Title to Purchased Assets
Schedule 4.7 Compliance with Laws
Schedule 4.8(c) Tax Status of Purchased Assets
Schedule 4.9 Litigation of the Seller
Schedule 4.11(b) Contracts Subject to Confidentiality Provisions
Schedule 4.11(d) Description of Seller Employee Retenton Agreements; Seller
Guarantees
Schedule 4.12(b) Affected Employees; Employment Litigation; Labor Contracts
Schedule 4.12(e) Other Labor/Employment Matters
Schedule 4.13(a) Exceptions to Transferred Intellectual Property
Schedule 4.13(b) Adverse Intellectual Property Claims
Schedule 4.14 Environmental Matters
Schedule 4.15 Inventory Exceptions
Schedule 4.17 Recent Developments
Schedule 4.20 Warranties
Schedule 5.3 Material Consents of the Buyer
Schedule 5.5 Litigation of the Buyer
Schedule 7.11 Inventory Valuation Procedure
Schedule 10.4(h) Outstanding Employee Loans
September 9, 2004 (Wire)
ASSET PURCHASE AND SALE AGREEMENT
This ASSET PURCHASE AND SALE AGREEMENT is made as of the 9th day of
September, 2004, by and between Xxxxxxx, Xxxxxxxxxxxx, a Delaware corporation
("Cargill") (hereinafter referred to as the "Seller") and Gerdau Ameristeel US
Inc., a Florida corporation ("Buyer").
WITNESSETH:
WHEREAS, the Buyer desires to purchase from the Seller and the Seller
desires to sell to the Buyer substantially all of the assets constituting the
Business (as defined below), and the Buyer is willing to assume certain
obligations of the Business, all upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the foregoing and the mutual
warranties, representations, covenants and agreements herein contained, the
parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Certain capitalized terms used in this Agreement shall have the meanings
set forth below.
"Accounts Payable" shall mean all trade payables and accrued expenses of
the Seller (including any intercompany payables) which in any case are payable
as a result of goods sold to, or services provided for or to, the Seller
exclusively as a part of the Business, including any Taxes payable, but
excluding any accrued expenses for which the Seller retains the corresponding
liability pursuant to the terms of this Agreement, and amounts due by the Seller
to its Affiliates for short-term borrowings.
"Accounts Receivable" shall mean all trade and non-trade receivables of
the Seller (including any intercompany receivables) which in any case are
payable as a result of goods sold or services provided by the Seller exclusively
as a part of the Business, excluding any Tax refunds or credits.
"Affected Employees" shall mean, as of any determination date, all
employees of the Seller principally employed at the Business facilities located
in Beaumont, Texas, Carrollton, Texas and Memphis, Tennessee (including Persons
on vacation, temporary layoff, approved leave of absence, sick leave, family
medical leave under the Family and Medical Leave Act, or short-term disability
leave; and excluding Persons on long-term disability leave under a long-term
disability plan maintained by the Seller or any Affiliate of the Seller) as of
such date, plus other employees of the Seller as mutually agreed by the parties
in writing.
"Affiliate" shall mean, with respect to any specified Person, any other
Person who, directly or indirectly, owns or controls, is under common ownership
or control with, or is owned or controlled by, such specified Person. Without
limiting the generality of the foregoing, a Person shall be deemed to "own"
another Person if it owns, directly or indirectly, more than 50% of the capital
stock or other equity
September 9, 2004 (Wire)
interest of such other Person generally entitled to vote, without regard to
specified contingencies, for the election of directors or equivalent governing
body of such other Person.
"Agreement" shall mean this Asset Purchase and Sale Agreement, including
all exhibits and schedules hereto, as it may be amended, supplemented or
modified from time to time in accordance with its terms.
"Ancillary Agreements" shall mean the Assignment and Assumption
Agreements, the Transition Services Agreement, the Conveyance Documents and all
other documents to be delivered pursuant to the terms of this Agreement or the
terms of any of the aforementioned agreements.
"Assigned Contracts" has the meaning set forth in Section 2.1(j).
"Assignment and Assumption Agreements" shall mean the Assignment and
Assumption Agreements executed by the Seller and the Buyer on the Closing Date,
substantially in the form of Exhibit A.
"Assumed Obligations" has the meaning set forth in Section 2.4.
"Baseline Working Capital Amount" shall mean an amount equal to
$20,937,858.00, which is the amount of the Working Capital of the Business as of
April 30, 2004 as more particularly calculated on Schedule 3.2(a).
"Xxxx of Sale" shall mean the Xxxx of Sale to be executed and delivered by
the Seller on the Closing Date, substantially in the form of Exhibit B.
"Books and Records" has the meaning set forth in Section 2.1(i).
"Business" shall mean the Seller's wire products business as presently
conducted by the Seller at its facilities in Beaumont, Texas, Carrollton, Texas
and Memphis, Tennessee.
"Business Day" shall mean any day of the year other than (a) any Saturday
or Sunday; or (b) any other day on which banks located in New York, New York are
generally closed for business.
"Business Financial Statements" shall mean the two unaudited balance
sheets of the Business as of April 30, 2004 and the related statements of
earnings for the eleven-month period ending April 30, 2004 that are contained in
Schedule 4.5.
"Buyer" has the meaning set forth in the Preamble hereto.
"Buyer Group" has the meaning set forth in Section 13.2.
"Cash" shall mean all cash, certificates of deposit, bank accounts and
other cash equivalents, together with all accrued but unpaid interest thereon.
September 9, 2004 (Wire)
"Closing" shall mean the consummation of the transactions contemplated
herein in accordance with Article XI.
"Closing Date" shall mean the date on which the Closing actually takes
place.
"COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985, and the regulations promulgated thereunder.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
"Confidentiality Agreement" shall mean the Confidentiality Agreement dated
as of February 10, 2004 between the Buyer and the Seller.
"Consent" has the meaning set forth in Section 4.3.
"Contract" shall mean any contract, lease, easement, license, sales order,
purchase order, supply agreement, or any other agreement, commitment or
understanding whether oral or written, other than Permits or any Employee Plan.
"Conveyance Documents" has the meaning set forth in Section 11.2(a).
"Direct Claim" has the meaning set forth in Section 13.8.
"Dollars" or numbers preceded by the symbol "$" shall mean amounts in
United States Dollars.
"Effective Time" shall mean 11:59 p.m., Central Time, on the day before
the Closing Date.
"Employee Plan" shall mean any "employee benefit plan" within the meaning
of Section 3(3) of ERISA, all specified fringe benefits as defined in Section
6039D of the Code, and all other retirement, savings, disability, salary
continuation, medical, dental, health, life insurance (including, without
limitation, any individual life insurance policy under which any Affected
Employee is the named insured and as to which the Seller or their ERISA
Affiliates makes premium payments, whether or not the Seller is the owner,
beneficiary or both of such policy), death benefit, group insurance,
post-retirement insurance, profit-sharing, deferred compensation, stock option,
educational assistance, stock purchase, bonus, incentive, vacation pay,
severance, or other employee benefit or fringe benefit plan, trust, arrangement,
contract, policy, understanding or commitment, (whether qualified or
nonqualified, currently effective or terminated, written or oral), which is
intended to provide or does in fact provide benefits to any or all Affected
Employees or other individuals who are currently or were formerly employed in
the Business to which the Seller or the Seller's Affiliates have any obligation
or liability, contingent or otherwise (whether or not the Seller still maintains
such plan, trust, arrangement, contract, agreement, policy or commitment).
September 9, 2004 (Wire)
"Employee Records" has the meaning set forth in Section 10.7.
"Encumbrance" shall mean any charge, claim, community or other marital
property, interest, condition, equitable interest, lien, option, pledge,
security interest, mortgage, judgment, attachment, right of way, easement,
encroachment, servitude, right of first option, right of first refusal, or
similar restriction.
"Environmental Claims" shall mean any written notice to the Seller by a
person or entity alleging any potential material liability of the Seller
(including potential material liability for investigatory costs or government
response costs) arising out of, based on, or resulting from (i) the presence, or
release into the Environment, of any Hazardous Substance at any Real Estate, or
(ii) circumstances forming the basis of any violation, or alleged violation, of
any Environmental Law.
"Environmental Laws" shall mean all federal, state, local and foreign
laws, duties and regulations (including common law) relating to pollution,
compensation for damage or injury caused by pollution or protection of human
health and the Environment; provided however, that Environmental Laws shall not
include the Federal Occupational Safety & Health Act, regulations promulgated
thereunder or any analogous state or local law or regulation.
ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the regulations promulgated thereunder.
"ERISA Affiliate" means the Seller and all other trades or businesses,
whether or not incorporated, which together with the Seller would be deemed a
"single employer" within the meaning of Section 414(b), (c) or (m) of the Code.
"Excluded Assets" has the meaning set forth in Section 2.3.
"Excluded Businesses" shall mean all the businesses performed by the
Seller and its Affiliates, except for the Business.
"Excluded Obligations" has the meaning set forth in Section 2.5.
"Final Purchase Price" has the meaning set forth in Section 3.2(c).
"Final Statement" has the meaning set forth in Section 3.2(b).
"GAAP" shall mean generally accepted accounting principles in the U.S.
applied in a consistent manner throughout the periods specified.
"Governmental Authority" shall mean the government of the United States,
or any other foreign country or any state, provincial, local or other political
subdivision thereof and any entity, body or
September 9, 2004 (Wire)
authority exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Hazardous Material" shall mean any substance, material or waste which is
defined as a "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "contaminant," "toxic
waste" or "toxic substance" under any provision of Environmental Law, and
including petroleum, petroleum products, asbestos, presumed asbestos-containing
material or asbestos-containing material, urea formaldehyde and polychlorinated
biphenyls, including but not limited to any substance, material or waste which
is regulated as a hazardous substance by the National Oil and Hazardous
Substances Pollution Contingency Plan, 40 C.F.R. Section 300.5.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the regulations promulgated thereunder.
"Indemnified Person" shall mean the Person or Persons entitled to, or
claiming a right to, indemnification under Article XIII.
"Indemnifying Person" shall mean the Person or Persons claimed by the
Indemnified Person to be obligated to provide indemnification under Article
XIII.
"Independent Accounting Firm" has the meaning set forth in Section 3.2(b).
"Intellectual Property" shall mean intellectual property of every kind and
nature, including, without limitation, all inventions, information, data,
samples, specifications, plans, schematics, drawings, blue prints, compositions,
processes, designs, know-how, and process technology, including confidential
information and trade secrets (whether or not patentable or reduced to
practice), confidential or proprietary technical and business information,
computer software, domain names and all United States and foreign patents and
xxxxx patents (including continuations, continuations-in-part, divisions,
reissues, re-examinations, extensions and renewals thereof) and patent
applications, registered and unregistered trade names, brand names, trademarks,
service names and service marks, logos and designs (and applications for
registration of the same) and all goodwill symbolized thereby or associated
therewith, and copyrights and copyright registrations (and applications for the
same) relating thereto, and all extensions or renewals thereof, United States
and foreign registrations and applications to register copyrights, technical
manuals and documentation made or used in connection with any of the foregoing.
"Interim Balance Sheet" shall mean the unaudited balance sheet of the
Business as of April 30, 2004 and contained as part of the Business Financial
Statements.
"Inventory" has the meaning set forth in Section 2.1 (c).
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"Knowledge" shall mean, with respect to any party, the actual knowledge of
the party's officers, directors and other employees listed on Schedules 1.1 or
1.2.
"Labor Contracts" means the contracts between the Seller and any labor
union or association representing any Affected Employee which are listed on
Schedule 4.12(b).
"Law" shall mean, any law, statute, code, regulation, ordinance, or rule
enacted or promulgated by any Governmental Authority.
"Leased Real Property" has the meaning set forth in Section 4.6(b).
"Litigation" has the meaning set forth in Section 4.9.
"Loss" or "Losses" shall mean any and all damages, losses, actions,
proceedings, causes of action, liabilities, claims, encumbrances, penalties,
assessments, judgments, costs and expenses including, without limitation,
removal or remediation costs, sales credits, court costs and reasonable
attorneys' fees, fees of experts or consultants, but shall not include
consequential, indirect, special, exemplary, punitive or incidental damages of
any kind.
"Material Adverse Effect" shall mean any event, circumstance, change or
effect that has a material and adverse effect on the operational or financial
condition of the Business, taken as a whole, but specifically excluding an
effect resulting from (a) general, financial, economic or industry conditions
also affecting other similarly situated Persons; or (b) business changes due to
the announcement of an impending sale of the Business to the Buyer.
"Material Contract" means a Contract relating to the Business (i) the term
of which extends beyond the one-year anniversary of this Agreement, and
obligates the Seller or the Business to future expenditures of $250,000 or more
or that entitles the Seller or the Business to future receipts of $1,000,000 or
more, or (ii) the lack of which would have a Material Adverse Effect; provided
however, that "Material Contract" shall not include (y) a Contract that may be
terminated by the Seller upon no more than sixty (60) days notice at any time to
the other parties or (z) any purchase order issued by the Seller to a supplier,
purchase order issued to the Seller by a customer, or customer pricing letter or
other written or verbal understanding between the Seller or any of its
customers.
"Multiemployer Plan" shall have the meaning set forth in Section 3(37) of
ERISA.
"North Star Companies" shall mean North Star Steel Company, North Star
Recycling Company, North Star Steel Texas, Inc. and North Star Steel Kentucky,
Inc.
"Owned Real Property" shall mean all of the real property owned in fee by
the Seller that is listed on Schedule 2.1(d).
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"Permits" shall mean permits, tariffs, authorizations, licenses,
certificates, variances, interim permits and approvals, issued or required by
any Governmental Authority which are necessary for the Seller to engage in the
Business as currently conducted.
"Permitted Encumbrances" shall mean (a) mechanics', carriers', workmen's,
repairmen's or other like liens arising or incurred in the ordinary course of
business, which are being contested in good faith by appropriate proceedings or
which have not yet become due and payable, and which in either case, if they are
material either individually or in the aggregate, are reflected on the Interim
Balance Sheet; (b) liens for Taxes, assessments and other governmental charges
which are not due and payable or which may hereafter be paid without penalty or
which are being contested in good faith by appropriate proceedings, and which in
either case, if they are material either individually or in the aggregate, are
reflected on the Interim Balance Sheet; and (c) other ordinary imperfections of
title or encumbrances, if any, which ordinary imperfections of title or other
encumbrances do not have a Material Adverse Effect on the Business as presently
conducted, taken as a whole; including but not limited to those items listed on
Schedule 1.3.
"Person" shall mean any individual, corporation, business trust,
proprietorship, firm, partnership, limited partnership, limited liability
partnership, limited liability company, trust, association (whether incorporated
or not), joint ventures, Governmental Authority or other entity.
"Purchase Price" has the meaning set forth in Section 3.1.
"Purchased Assets" has the meaning set forth in Section 2.1.
"Real Property" shall mean the Owned Real Property and the Leased Real
Property.
"Seller" has the meaning set forth in the Preamble hereto.
"Seller's Basket" has the meaning set forth in Section 13.2(b).
"Seller's Cap" has the meaning set forth in Section 13.2(b).
"Seller Group" has the meaning set forth in Section 13.3(a).
"Severance Period" has the meaning set forth in Section 10.2.
"Special Warranty Deed" shall mean the Special Warranty Deed to be
executed by the Seller, substantially in the form of Exhibit C.
"Statement of Working Capital" has the meaning set forth in Section
3.2(a).
"Steel Xxxxx Acquisition" shall mean the purchase by Buyer of the steel
products business of the North Star Companies located at St. Xxxx and Duluth,
Minnesota, Beaumont, Texas, Xxxxxxx City, Kentucky, Des Moines and Wilton, Iowa.
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"Steel Xxxxx Purchase Agreement" shall mean the Asset Purchase and Sale
Agreement between the Buyer and the North Star Companies pertaining to the Steel
Xxxxx Acquisition.
"Tangible Assets" has the meaning set forth in Section 2.1(a).
"Tax" (and, with correlative meaning, "Taxes" and "Taxable") shall mean
any federal, state, provincial, county, local or foreign taxes, charges, fees,
duties (including customs duties), levies or other assessments or impositions,
including income, gross receipts, net proceeds, ad valorem, turnover, real and
personal property (tangible and intangible), sales, use, franchise, excise,
value added, alternative, add-on minimum, stamp, leasing, lease, user, transfer,
fuel, excess profits, occupational, interest equalization, windfall profits,
license, payroll, environmental, capital stock, disability, severance,
employee's income withholding, other withholding, unemployment and Social
Security taxes, which are imposed by any Governmental Authority, and such term
shall include any interest, penalties, fines or additions to tax attributable
thereto or associated therewith, and shall include any transferee or successor
liability in respect of Taxes (whether by contract or otherwise).
"Tax Return" shall mean any report, return, report, statement, notice,
form, declaration, claim for refund or other document or information filed,
submitted to, or required to be supplied to a Governmental Authority in
connection with the determination, assessment, collection or payment of any Tax,
including any schedule or attachment thereto, and including any amendment
thereof.
"Third Party" shall mean a Person other than the Buyer, the Seller, or
their respective Affiliates.
"Third Party Claim" shall mean any claim, action, suit or proceeding made
or brought by a Third Party.
"Title Company" has the meaning set forth in Section 7.3(a).
"Transferred Employee" has the meaning set forth in Section 10.1.
"Transferred Intellectual Property" has the meaning set forth in Section
2.1(e).
"Transition Services Agreement" shall mean the Transition Services
Agreement between the Buyer and the Seller, to be entered into at Closing.
"Uncollected Accounts Receivable" shall mean the Accounts Receivable or
portions thereof which are not collected by the Buyer, payable in cash or other
forms of payment (e.g. note, securities), within one hundred twenty (120) days
subsequent to the Closing Date.
"U.S." shall mean United States of America.
"Working Capital" has the meaning set forth in Section 3.2(a).
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ARTICLE II
SALE AND PURCHASE OF PURCHASED ASSETS;
ASSUMPTION OF ASSUMED OBLIGATIONS
2.1 Purchased Assets. Subject to and upon the terms and conditions set
forth in this Agreement, on the Closing Date, but effective as of the Effective
Time, the Seller shall sell, assign, convey, transfer and deliver to the Buyer,
and the Buyer shall purchase, acquire and take assignment and delivery from the
Seller of all of the right, title and interest of the Seller in and to the
following assets, properties and rights as the same may exist at the Effective
Time (excluding the Excluded Assets):
(a) Tangible Assets. All tangible personal property of every kind
and description that is used in the operation of the Business, including,
without limitation, all buildings, structures, improvements, plants, facilities,
fixtures, machinery, equipment, fixed assets, furniture, tools, automobiles,
trucks, loaders and other vehicles, maintenance equipment and materials and all
other tangible personal property of every kind and description including,
without limitation, the tangible personal property set forth on Schedule 2.1(a)
and any replacements thereof acquired prior to the Effective Time (collectively,
the "Tangible Assets");
(b) Data Processing Hardware and Software. All data processing
hardware and software that is used exclusively in the operation of the Business,
including those items listed on Schedule 2.1(b);
(c) Inventory. All supplies, materials, raw materials,
work-in-progress, semi-finished goods, finished goods, stores, goods in transit,
spare parts, packaging materials, and other consumables used in the operation of
the Business including, without limitation, packaging, spare parts and equipment
warehoused and consigned inventories owned by Seller and inventories covered by
purchase orders or held by distributors as of the Effective Time, (collectively,
the "Inventory");
(d) Owned Real Property. Except to the extent set forth in Schedules
1.3 and 4.6(a), the Owned Real Property listed on Schedule 2.1(d), including all
appurtenant easements thereunto, and all buildings, structures, improvements,
plants, facilities, and fixtures located thereon;
(e) Intellectual Property. All Intellectual Property owned by the
Seller and used exclusively in the Business ("Transferred Intellectual
Property"), including the Intellectual Property listed on Schedule 2.1(e), and
all goodwill, if any, relating to the Business;
(f) Other Current Assets. All Accounts Receivable and other assets
listed on the Interim Balance Sheet (subject to adjustment pursuant to Section
3.2 below), prepaid expenses, credits, deposits, letters of credit supporting or
in lieu of deposits, claims, prepayments, refunds, rebates,
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warranties, chooses-in-action, accounts, rights to payment, existing and future
instruments, chattel paper, documents of title, commodity contracts, and other
similar items relating exclusively to or associated with the operation of the
Business.;
(g) Permits. All Permits and permit applications pertaining to the
Business that are legally capable of being transferred;
(h) Leased Real Property. All of the Seller's right, title and
interest in and to the Leased Real Property listed on Schedule 2.1(h) to the
extent legally capable of being transferred;
(i) Books and Records. Copies or originals of all records related
exclusively to the Business which are normally located on the Business premises,
including specifications, service records, plans and designs of fixtures and
equipment, machinery, engineering drawings, and testing records, Customer lists
and files, Supplier records, production records, customer orders, quality
control analysis, sales and warranty records, operating guides and manuals,
Employee Records, financial and accounting records, studies, reports,
correspondence and other similar documents and records; and
(j) Assigned Contracts. To the extent assignable, all Contracts for
the purchase, sale or lease by the Seller, of Inventory, Tangible Assets,
Intellectual Property, data processing hardware or software or other goods,
materials and/or services and all other Contracts, which relate exclusively to
the Business and to which the Seller is a party including but not limited to
those which are listed on Schedule 2.1(j) (collectively, the "Assigned
Contracts").
All of the foregoing assets described in this Section 2.1, are referred to
herein collectively as the "Purchased Assets".
2.2 Procedures for Assets Not Transferable. Anything in this Agreement to
the contrary notwithstanding, this Agreement shall not constitute an agreement
to assign any Contract or any claim or right or any benefit or obligation
thereunder or resulting therefrom if an assignment thereof, without the Consent
of a Third Party, would constitute a breach or violation thereof and if consent
to such assignment is not obtained on or prior to the Closing Date. If any
Contracts or Permits included within the Purchased Assets are not assignable or
transferable to the Buyer without the Consent of any Governmental Authority or
Third Party, and such Consent has not been obtained prior to the Closing Date
and the Closing occurs, this Agreement and the Assignment and Assumption
Agreements shall not constitute an assignment or transfer thereof unless and
until such Consent is obtained. In such case, the Seller shall use commercially
reasonable efforts to obtain such Consent as soon as possible after the Closing
Date; provided, however, that the Seller shall not be required to incur
out-of-pocket expenses in connection therewith and the Buyer shall cooperate
with the Seller in that endeavor. The Seller shall use commercially reasonable
efforts to provide the Buyer the benefit of any such Contract or Permit and to
enforce, at the request of the Buyer
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and for the account of the Buyer, any rights of the Seller arising from any such
Contract or Permit, including the right to elect to terminate in accordance with
the terms thereof upon the advice of the Buyer (to the extent legally
permissible) and shall cooperate in any commercially reasonable and lawful
arrangement designed to provide such benefits to the Buyer. The costs of any
such efforts in providing such benefits shall be for the Buyer's account and in
no event shall the Seller's obligations to provide the benefit of any such
Contract or Permit extend beyond the ninetieth (90th) day following the Closing
Date.
2.3 Excluded Assets. The Seller shall not sell to the Buyer, and the Buyer
shall not purchase any assets of the Seller other than the Purchased Assets
pursuant to this Agreement (the "Excluded Assets"), including the assets
described in Sections 2.3(a) through 2.3(m) below:
(a) Cash. All cash and marketable securities;
(b) Employee Plans and Assets. All Employee Plans of the Seller and
all assets of any Seller Employee Plans;
(c) Insurance Policies. All insurance policies maintained by the
Seller, and all rights to receive payment thereunder and any prepaid premiums;
(d) Records. Employee medical records and other personnel records
expressly described in the last sentence of Section 10.7, corporate accounting,
legal files and other privileged documents, records which relate to the Excluded
Assets, Tax Returns (including all related schedules, records, files and other
documents and all other records required by applicable Law to be maintained to
support such Tax Returns), strategy studies, corporate internal communication
and information received from third parties on a confidential basis that such
third parties have not consented to disclose to the Buyer;
(e) Non-Transferable Contracts and Permits. The rights of the Seller
under legally non-transferable Contracts or Permits applicable to the Business;
(f) Excluded Business. Except as otherwise expressly assigned to the
Buyer, all assets used primarily in the Excluded Businesses;
(g) Hedge Positions. The rights of the Seller under any hedge or
swap position relating to the Business;
(h) Certain Computer Software and Hardware. All rights of the Seller
in the following: "Xpedio" software; "Cargill Steel Direct" Extranet software;
the operating system software, 3rd party software, and the hardware hosting the
IMS sales system software; Cargill Global Office software; XX Xxxxxxx Accounting
system software; "TIBCO" integration software; Fixed Asset Accounting software;
Cargill Benefits XXXX software; Lotus Notes Client licenses; the Brio Enterprise
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Server license and Brio Insight licenses for the Data Warehouse; the NSS shared
servers hosting the E-Invoicing and E-Certs software; Oracle database software
on NSS shared servers licensed by Seller; and certain hardware (including
routers) with respect to the listed software;
(i) Rights in Litigation. All rights of the Seller in or resulting
from the Litigation described in Schedule 4.9 or 4.12(b) or any other Litigation
brought by the Seller or pending or threatened against the Seller as of the
Closing Date;
(j) Derivative Contracts. Any derivative or hedging Contracts
relating to the Business; and
(k) Names and Trademarks. All rights, title and interest of the
Seller in the use of the name Cargill or any registered or unregistered
trademarks or service marks incorporating that name or applicable designs.
2.4 Assumed Obligations. On the Closing Date but effective as of the
Effective Time, the Buyer shall assume, and agree to discharge, the following
obligations of the Seller (the "Assumed Obligations"):
(a) Contract Obligations. The obligations of the Seller under the
Assigned Contracts excluding liabilities for any breach of an Assigned Contract
where the breach occurred prior to the Effective Time;
(b) Transferred Employees. The obligations with respect to
Transferred Employees first accruing after the Effective Time, together with
those obligations with respect to Transferred Employees expressly assumed by
Buyer pursuant to Article X;
(c) Accounts Payable. All Accounts Payable attributable to the
Business and held by the Seller as of the Effective Time;
(d) Warranties and Refunds. All obligations and liabilities with
respect to product returns and product warranty claims relating to the Business,
whether relating to events or sales occurring prior to or after the Effective
Time;
(e) Sales and Use Tax Obligations. Sales and use tax obligations
with respect to the Accounts Receivable and Accounts Payable if and to the
extent that such obligations either (i) are reflected in the Interim Balance
Sheet or (ii) have been incurred in the ordinary course of business between the
date of the Interim Balance Sheet and the Effective Time and are reflected in
the Purchase Price Adjustment pursuant to Section 3.2 below;
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(f) Other Liabilities. Except for the Excluded Obligations, all
other liabilities and obligations of the Seller, known or unknown, to the extent
they relate to the Seller's ownership of the Purchased Assets or to the
operation of the Business before the Effective Time.
2.5 Excluded Obligations. The following obligations shall be retained by
the Seller or the other Persons liable for such obligations ("Excluded
Obligations"):
(a) Excluded Assets. The Seller shall retain any obligations of the
Business that relate exclusively to the Excluded Assets;
(b) Tax Liability. The Seller shall retain all Tax liabilities (i)
arising, imposed or assessed in respect of the Seller's operation of the
Business, its employment of the Affected Employees or its ownership of the
Purchased Assets for periods ending on or before the Effective Time (including
but not limited to Taxes on or measured by income, liabilities related to
required withholding or payment of federal and state income Taxes and employee
or employer Federal Insurance Contribution Act Taxes or employer share of
Federal Unemployment Tax Act Taxes, or as a result of the transactions
contemplated herein), but excluding sales and use tax assumed by the Buyer
pursuant to Section 2.4(e) above, (ii) arising, imposed or assessed in respect
of the Seller's operation of the Excluded Business, its employment of employees
other than the Transferred Employees from and after the Effective Time, or its
ownership of the Excluded Assets, or (iii) for which the Seller may be
responsible pursuant to Treasury Regulation Section 1.1502-6 or any similar
provision of Law or as a transferee or successor;
(c) Fees and Expenses. Fees and expenses incurred by the Seller or
any Affiliate of the Seller in connection with the negotiation, execution,
performance and delivery of this Agreement and the transactions contemplated
hereby, including, without limitation, the fees and expenses of counsel,
investment bankers, and brokers or finders fees;
(d) Litigation. The litigation pending against the Seller as of the
Effective Time; and
(e) Employees and the Seller Employee Plans. All obligations with
respect to the employment of the Affected Employees by the Seller or its
Affiliates prior to the Effective Time or the cessation of such employment prior
to the Effective Time (including unfair labor practice charges, employment
discrimination charges, wrongful termination claims, workers' compensation
claims, and any employment-related tort claims); and any Seller Employee Plan or
other benefit liabilities of the Seller or its Affiliates (except as provided in
Article X).
2.6 Schedule Updates. To the extent Purchased Assets listed on any
schedule referred to in this Article II are sold, transferred, or otherwise
disposed of or terminated in the ordinary course of business prior to the
Closing Date, and in accordance with Sections 6.1 and 6.2, such Purchased Assets
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shall be deemed to be deleted from such schedules and any replacement asset
shall be deemed to be added to such schedules without any action on the part of
the Seller.
ARTICLE III
PURCHASE PRICE AND PAYMENT
3.1 Payment of Purchase Price. On the Closing Date, in consideration for
the sale, assignment, conveyance, transfer and delivery of the Purchased Assets
to the Buyer, the Buyer shall assume the Assumed Obligations and shall pay to
the Seller an aggregate amount equal to Twenty Six Million Dollars ($26,000,000)
(the "Purchase Price"), subject to adjustment as provided in Section 3.2, by
wire transfer of immediately available funds to such accounts of the Seller
designated by the Seller in writing at least two (2) Business Days prior to the
Closing Date.
3.2 Purchase Price Adjustment.
(a) As soon as practicable, but in no event later than sixty (60)
days after the Closing Date, the Seller shall provide the Buyer with a statement
of Working Capital (the "Statement of Working Capital") setting forth a true,
correct and complete listing of each of the components making up Working Capital
and setting forth in reasonable detail the calculation thereof. The Statement of
Working Capital shall be based on a balance sheet of the Business as of the
Effective Time prepared by the Seller in accordance with GAAP using the same
methodology as was used to prepare the Business Financial Statements and
consistent with past practices and the Baseline Working Capital Amount without
regard to any effects of the transactions related to the Closing or any
simultaneous or subsequent action; provided, however, that the determination of
the Statement of Working Capital shall be subject to the terms of this
Agreement, including but not limited to, the reimbursement of severance benefits
by Buyer pursuant to Section 10.1(a). The Buyer and its independent auditors and
other representatives shall have the right to review and to verify the Statement
of Working Capital when received (including reviewing such work papers and other
documents and information reasonably requested by the Buyer and interviewing
those individuals who prepared the Statement of Working Capital on behalf of the
Seller). For purposes of this Agreement, the term "Working Capital" consists of
the following items relating to the Business as of the Effective Time: (i)
Accounts Receivable net of reserves; plus (ii) Inventory (pre-LIFO); minus (iii)
Accounts Payable; minus (iv) all other Current Liabilities assumed by the Buyer.
The Working Capital of the Seller prepared as set forth in this Section 3.2(a)
("Baseline Working Capital Amount") is set forth on Schedule 3.2(a).
(b) The Buyer shall have thirty (30) days following receipt by it of
the Statement of Working Capital during which to dispute the Statement of
Working Capital. The Buyer shall notify the Seller of any such dispute by
delivering written notice to the Seller which shall specifically describe each
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line item of the Statement of Working Capital in dispute and the reasons
therefore. If the Buyer fails to notify the Seller in writing of any such
dispute within such thirty (30) day period, the Statement of Working Capital
shall be final and binding on both the Buyer and the Seller and shall be the
"Final Statement." If the Buyer timely notifies the Seller of any such dispute,
and the Seller and the Buyer cannot resolve any such dispute within twenty (20)
days after receipt by the Seller of such notice, such dispute shall be resolved
by an independent accounting firm agreed to by the Seller and the Buyer (the
accounting firm so engaged shall act as an expert and shall hereinafter be
referred to as the "Independent Accounting Firm"). The Seller shall comply with
any reasonable request for information made by the Independent Accounting Firm.
The determination of the Independent Accounting Firm shall be made as promptly
as practicable and in any event within forty-five (45) days after the submission
of the dispute to the Independent Accounting Firm and shall be final and binding
on both the Buyer and the Seller. Any expenses relating to engagement of the
Independent Accounting Firm shall be shared equally by the Buyer and the Seller.
In the event of a dispute, the Statement of Working Capital, as modified in
writing by the Buyer and the Seller, or by the Independent Accounting Firm,
shall be the "Final Statement."
(c) If the Working Capital, as set forth in the Final Statement
exceeds the Baseline Working Capital Amount, then the Purchase Price shall be
increased by that excess, and the Buyer shall pay to the Seller an amount equal
to the excess. If the Working Capital, as set forth in the Final Statement, is
less than the Baseline Working Capital Amount, then the Purchase Price shall be
decreased by such deficit, and the Seller shall pay to the Buyer an amount equal
to the deficit. The Purchase Price as so adjusted is hereafter referred to as
the "Final Purchase Price."
(d) Any payments to be made by the Buyer or the Seller, as the case
may be, pursuant to Section 3.2(c) shall be made by wire transfer in immediately
available funds within five (5) Business Days after the date upon which the
Statement of Working Capital becomes the Final Statement (either upon expiration
of the thirty (30) day period referred to in Section 3.2(b) or resolution of any
dispute with respect to the Statement of Working Capital), in an amount
determined pursuant to Section 3.2(c), together with interest thereon from the
Closing Date through the date such payment is made at the average prime lending
rate for the thirty (30) day period prior to the date of such payment as
announced by Citibank, N.A.
3.3 Allocation of Purchase Price. Each of the Buyer and the Seller shall
complete its allocation of the Purchase Price and the Assumed Obligations and
shall file IRS Form 8594 with its applicable federal income tax return (or the
federal income tax return of the consolidated group of which the party is a
member) as required by Law. Each of the Seller and the Buyer shall provide the
other with such assistance as is reasonably necessary to satisfy its reporting
obligations under section 1060 of the Code, including as a result of adjustments
to the Purchase Price under Section 3.2. If either the Buyer or
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the Seller receives a notice from a Governmental Authority disputing its
allocation, the Party receiving the notice shall promptly notify the other
parties and shall forward to the other party copies of all correspondence with
the Governmental Authority in respect of the disputed allocation.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants as of the date hereof and as of the
Closing Date as follows:
4.1 Existence, Good Standing, Residency. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Seller has all requisite corporate power and authority to own,
lease and operate the Purchased Assets and to conduct the Business as it is
presently conducted and is duly qualified to transact business as a foreign
corporation and is in good standing in each jurisdiction in which the Purchased
Assets are owned, leased or operated by it or the nature of the operation of the
Business requires the Seller to qualify to transact business as a foreign
corporation, except where the failure to be so qualified and in good standing
would not reasonably be expected to have a Material Adverse Effect.
4.2 Due Authorization. The Seller has all requisite corporate power and
authority to execute, deliver and perform this Agreement and the Ancillary
Agreements to which it is a party and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by the
Seller of this Agreement and the Ancillary Agreements to which it is a party and
the consummation by the Seller of the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary corporate action
on the part of the Seller and no other corporate actions or proceedings on the
part of the Seller or its shareholders are necessary to authorize the execution,
delivery and performance by the Seller of this Agreement and by the Seller of
the Ancillary Agreements to which it is a party or the transactions contemplated
hereby and thereby. The Seller has duly and validly executed and delivered this
Agreement and has duly and validly executed and delivered (or prior to or at the
Closing shall duly and validly execute and deliver) the Ancillary Agreements to
which it is a party. This Agreement constitutes, and upon execution and delivery
thereof (assuming due execution and delivery thereof by all other parties
thereto) the Ancillary Agreements to which the Seller is a party shall
constitute, legal, valid and binding obligations of the Seller, enforceable
against the Seller in accordance with their respective terms, except as may be
limited by (a) applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws in effect which affect creditors' rights generally; or (b)
principles of equity including legal or equitable limitations on the
availability of specific remedies.
4.3 Consents. Except as set forth on Schedule 4.3, no material consent,
authorization, order or approval of, or filing or registration with, or
notification to (collectively, a "Consent") any Person not a
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party to this Agreement or any Governmental Authority (other than in connection
with Permits and the Leased Real Property) is required in connection with the
execution, delivery and performance of this Agreement and the Ancillary
Agreements by the Seller, the consummation of the transactions contemplated
hereby or thereby or the conduct of the Business after the Closing, in
substantially the same manner presently conducted (assuming the Buyer needs no
Consents other than those needed by the Seller), other than Consents of Third
Parties required to transfer a Contract that is not a Material Contract or to
transfer a Permit or a Contract constituting a lease of Real Property. For
purposes of this Section 4.3, a Consent to the transfer of a Material Contract
shall be deemed "required" only if the Contract affirmatively states that
Consent is required.
4.4 Absence of Conflicts. Neither the execution and delivery of this
Agreement or any of the Ancillary Agreements to which the Seller is a party, nor
the consummation of the transactions contemplated hereby or thereby, will
directly or indirectly (with or without notice or lapse of time) violate,
conflict with or result in the breach of: (a) the charter, by-laws or other
organizational documents of the Seller or any resolution adopted by the board of
directors or shareholders of Seller; (b) any judgment, decree or order of any
Governmental Authority to which the Seller is subject or by which the Seller is
bound; (c) any requirements of Laws applicable to the Seller, the Business, or
the Purchased Assets; (d) any Material Contracts to which the Seller is a party
(assuming all Consents listed on Schedule 4.3 are obtained) or any Permits
issued by any Governmental Authority; or will result in the imposition or
creation of any Encumbrance upon or with respect to any of the Purchased Assets.
4.5 Financial Statements; Interim Reports. Attached hereto as Schedule 4.5
are true, complete and correct copies of the Business Financial Statements. The
Business Financial Statements have been prepared in accordance with GAAP, and
fairly present in all material respects the financial position of the Business
as of the dates thereof and the results of the operation for the periods covered
thereby. Since April 30, 2004, there has been no adverse change to the financial
condition, results of operations, business properties, assets or liabilities of
the Business, which when taken as a whole, would result in a Material Adverse
Effect.
4.6 Title to Assets.
(a) Except as set forth on Schedule 4.6(a) and other than Owned Real
Property and the Leased Real Property, which are addressed in Section 4.6(b),
the Seller has, and following the Closing the Buyer shall have, good, valid and
marketable title to all of the Purchased Assets and valid leasehold interests
in, or other rights to use, all of the Purchased Assets in each case, free and
clear of all Encumbrances, other than Permitted Encumbrances.
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(b) Schedules 2.1(d) and 2.1(h) set forth a complete list of all
Owned Real Property and a complete list of all real property leased by the
Seller and used in the Business (the "Leased Real Property"). The Business has
no facilities on any real estate other than the Owned Real Property or Leased
Real Property. Except as set forth on Schedule 4.6(a) and except for Permitted
Encumbrances, the Seller has (i) good, valid and marketable fee title to the
Owned Real Property; and (ii) valid leasehold interests in the Leased Real
Property, in each case, free and clear of all Encumbrances. Except as set forth
in Schedule 4.6(a), to the Seller's Knowledge there are no pending or threatened
condemnation or eminent domain proceeding in respect of the Owned Real Property
or the Leased Real Property.
4.7 Compliance with Laws. Except as set forth on Schedules 4.7, 4.9,
4.12(b) or 4.14, the Seller has not received any written notices and no suits,
actions or judgments are currently pending, or to the Knowledge of the Seller,
threatened, concerning any unresolved violation or alleged violation by the
Seller of any zoning, building, occupational, health and safety, or other
applicable Law relating to the operation of the Business. Except as set forth in
Schedules 4.7, 4.9, 4.12(b) or 4.14, to the Knowledge of Seller, the Business
and Purchased Assets are in material compliance with all Laws. All reports and
returns required to be filed by the Seller with any Governmental Authority have
been filed and were accurate and complete when filed, other than such reports or
returns where the failure to file, or any inaccurate or incomplete filing, would
not have a Material Adverse Effect. Without limiting the generality of the
foregoing:
(i) to the Knowledge of the Seller and except as set forth on Schedules
4.7, 4.9, 4.12(b) or 4.14, the operation of the Business as now conducted
at each of the facilities does not constitute a nuisance that would give
rise to reasonable grounds for a suit, action, claim or demand by any
Person seeking compensation or damages or seeking to restrain, enjoin or
otherwise prohibit the conduct of the Business at each such facility
substantially in the manner in which it is now conducted; and
(ii) the Seller has delivered to the Buyer copies of the following reports
applicable to the Business for the past two (2) years: (A) all OSHA 200
and 300 reports of the Seller required under the Federal Occupational
Safety and Health Act of 1970, as amended, and (B) all reports of Seller's
joint committees on safety at each of Seller's locations which have union
contracts. The deficiencies, if any, noted on the OSHA 200 and 300 reports
have been corrected.
4.8 Taxes.
(a) All Tax Returns of the Seller that are required to have been
filed through the date hereof have been properly prepared and duly filed. All
Tax Returns and reports filed by the Seller are true, correct and complete. All
Taxes shown to be due on such Tax Returns or otherwise required to be
September 9, 2004 (Wire)
paid have been paid in full, other than Taxes that are being contested in good
faith and Taxes that, if not paid when due, would not reasonably be expected to
have a Material Adverse Effect, and would not result in any Encumbrance (other
than a Permitted Encumbrance) on any Purchased Asset..
(b) There are no Encumbrances for Taxes upon the Purchased Assets
except for Permitted Encumbrances.
(c) Except as set forth on Schedule 4.8(c), none of the Purchased
Assets is property that is or will be required to be treated as being (i) owned
by any Person other than the Seller pursuant to the provisions of Section
168(f)(8) of the Internal Revenue Code of 1954 as in effect immediately prior to
the Tax Reform Act of 1986, (ii) "tax-exempt use property" within the meaning of
Section 168(h)(1) of the Code, (iii) "tax-exempt bond finance property" within
the meaning of Section 168(g) of the Code, or (iv) "limited use property" (as
that term is used in Rev. Proc. 2001-28.
(d) The Seller is not a "foreign person" within the meaning of
Section 1445 of the Code.
(e) Seller has withheld and paid all Taxes required to have been
withheld and paid in connection with any amounts paid or owing to any employee,
independent contractor, creditor, stockholder, or other Third Party, and all
Forms W-2 and 1099 required with respect thereto have been properly completed
and timely filed.
4.9 Litigation. As of the date of this Agreement and except for those
matters described on Schedule 4.9 or 4.12(b), there is no legal, administrative
or arbitration proceeding, suit, action, order, judgment, investigation, writ,
injunction, award, or decree in by or before any Governmental Authority
("Litigation") pending or, to the Knowledge of the Seller, threatened against
the Seller relating to the operation of the Business or any of the Assumed
Obligations. There is no Litigation that could reasonably be expected to (a)
result in any injunction, restriction or prohibition on the transfer of any of
the Purchased Assets; (b) prevent the Seller from fulfilling all of its
obligations set out in this Agreement or arising under this Agreement or any
Ancillary Agreement; or (c) reasonably be expected to result in a Material
Adverse Effect. For purposes of this Section 4.9, the items listed on Schedule
4.14 are not deemed to be "Litigation".
4.10 Brokers. Except for CIBC World Markets and Xxxxxxx Xxxxx & Co. Inc.,
the Seller has not used any broker or finder in connection with the transactions
contemplated hereby, and neither the Buyer nor any of its Affiliates shall have
any liability or otherwise suffer or incur any Loss as a result of or in
connection with any brokerage or finder's fee or other commission of any Person
retained by the Seller in connection with any of the transactions contemplated
by this Agreement or any of the Ancillary Agreements.
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4.11 Contracts.
(a) To the Knowledge of Seller, all Material Contracts relating to
the Business to which the Seller is a party as of the date of this Agreement are
included on Schedule 2.1(j) and are specifically identified as such.
(b) Each Material Contract is in full force and effect and is the
valid and binding obligation of the Seller and to the Knowledge of the Seller,
the other parties to it. Neither the Seller nor to the Knowledge of the Seller
any other party to such Contract is in material breach of or in default under
any Material Contract. Except for those Contracts which are subject to
confidentiality obligations and which are identified on Schedule 4.11(b), the
Seller has provided the Buyer with true, complete and correct copies of or
access to all written Material Contracts and all extensions, amendments and
schedules thereto and a written description of all Material Contracts that are
not in writing.
(c) As of the Effective Xxxx Xxxxxx has not received notice from a
Third Party of termination of any Material Contract that was in existence as of
April 30, 2004.
(d) To the Knowledge of Seller (i) except for the Seller Employee
Plans, and the retention agreements described on Schedule 4.11(d), the Seller
has no Contract with any director, officer or employee of the Seller or (except
in the ordinary course of the Business) any other Affiliate of the Seller; (ii)
the Seller has not affirmatively waived any right under any Material Contract;
(iii) the Seller is in substantial compliance with all purchase orders and sales
orders to the extent it is obligated to perform under those orders; and (iv)
except as disclosed in Schedule 4.11(d), Seller has not, expressly or by
operation of Law, guaranteed the obligations of any Person that will become the
obligations of the Buyer pursuant to this Agreement.
4.12 Employee Matters.
(a) No Employee Plan is a Multiemployer Plan or is subject to Title
IV of ERISA or Section 412 of the Code. Neither the Seller nor any of the
Seller's ERISA Affiliates has incurred any material liability under Title IV of
ERISA arising in connection with the termination of any plan covered or
previously covered by Title IV of ERISA, or has maintained a plan subject to
Section 412 of ERISA, for which any termination liability remains outstanding.
(b) Schedule 4.12(b) sets forth (i) a complete and correct list of
all Affected Employees, together with each Affected Employee's name, title or
job description and work location, (ii) a list of all employment related
Litigation involving the Affected Employees, and (iii) a list of the Labor
Contracts. The Seller has separately delivered to the Buyer a list of each
Affected Employees annualized salary or hourly wage rate.
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(c) To the best knowledge of Sellers, each Employee Plan, which is
intended to be qualified under section 401(a) of the Code, is so qualified or,
if such Employee Plan fails to be so qualified, can become qualified on a
retroactive basis, or if Sellers become aware that any such Employer Plan fails
to be so qualified prior to the rollover of any participant's accounts from such
plan to any plan of the Buyer will notify Buyer of such failure.
(d) The Purchased Assets are not now nor will they after the passage
of time be subject to any Lien imposed under Code Section 412(n) by reason of
the failure of the Seller or its ERISA Affiliates to make timely installments or
other payments required by Code Section 412 with respect to any plan maintained
by Seller or its ERISA Affiliates prior to the Closing Date.
(e) To Seller's Knowledge and except as set forth in Schedules
4.12(b) and 4.12(e), and as otherwise provided in Article 10 hereof, (i) other
than amounts which have not yet become payable in accordance with the Seller's
customary practices, which will be paid in a timely manner (including payment
subsequent to the Closing for all work performed through the Closing Date) and
with regard to the Seller's Business, (a) the Seller has paid in full to the
Affected Employees employed at the Business all wages, salaries, commissions,
bonuses and other direct compensation for all services performed by them through
the Closing Date, and (b) the Seller has paid, or will pay in a timely manner,
all severance pay, if any, and benefits, FICA, FUTA, and withholding taxes
accruing through the Closing Date, for all of the Affected Employees and is not
subject to any claim for non-payment or non-performance of any of the foregoing;
(ii) Seller is in material compliance with all Laws respecting employment and
employment practices, terms and conditions of employment and wages and hours
with regard to its operations at the Business; (iii) there is no unfair labor
practice complaint against the Seller, with regard to its operations of the
Business, pending before the National Labor Relations Board or any comparable
state or local agency; (iv) as of the date of this Agreement, there is no labor
strike, slowdown or stoppage pending or threatened against the Seller with
regard to its operations of the Business; and (v) no grievance which might have
a Material Adverse Effect or material proceeding or claim alleging
discriminatory practices is pending against the Seller, with regard to its
operations of the Business.
(f) Other than the post retirement health or life benefits provided
to Affected Employees that are not represented by a labor union, no Employee
Plan or other benefit arrangement provides post retirement health or life
benefits to the Affected Employees, except as required by COBRA or similar state
law.
4.13 Intellectual Property.
(a) Except as set forth on Schedule 4.13(a), (i) the Seller owns, or
possesses legally enforceable rights to use, free and clear of all Encumbrances,
other than Permitted Encumbrances, all
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Transferred Intellectual Property; (ii) to the Seller's Knowledge, no Person is
authorized to use the Transferred Intellectual Property other than the Seller;
(iii) the Seller has no licenses or sublicenses pursuant to which the Seller is
authorized to use any Person's Intellectual Property in the Business (other than
commercial software); and (iv) neither the execution and delivery of the
transactions described in this Agreement or the Ancillary Agreements will give
any Third Party the right or option to cause or declare a violation of a duty,
right or obligation to such Person in connection with any Transferred
Intellectual Property. To the Knowledge of the Seller, the Seller is not
infringing or otherwise acting adversely to the right of any Third Party under
or in respect to any patent, license, trademark, trade name, service xxxx,
copyright or similar intangible right, and there is no claim for damages or any
proceeding pending, or to the Knowledge of the Seller threatened against Seller,
with respect thereto.
(b) Except as set forth on Schedule 4.13(b), (i) no claim adverse to
the interests of the Seller in the Transferred Intellectual Property is pending,
or to the Seller's Knowledge, has been threatened; (ii) the Seller has not
received notice or is otherwise aware of any infringement or other violation of
its rights in any of the Transferred Intellectual Property; and (iii) no
litigation is pending wherein the Transferred Intellectual Property is alleged
to infringe or violate the right of any other Person.
(c) The Transferred Intellectual Property is all of the intellectual
property owned by Seller used exclusively for and necessary to carry out the
Business as presently conducted except for the Excluded Assets.
4.14 Environmental Matters. Except as set forth in Schedule 4.14 or in the
materials identified in Schedule 4.14:
(a) To the Knowledge of the Seller, the Business and the Purchased
Assets are in material compliance with all Environmental Laws including, without
limitation, all restrictions, conditions, standards, limitations, prohibitions,
requirements, obligations, schedules and timetables contained in the
Environmental Laws or contained in any plan, order, decree, permit, judgment or
injunction, promulgated or approved thereunder or in a cleanup, compliance or
remediation plan to which Seller has agreed..
(b) The Seller has made available to the Buyer copies of all
environmental studies and reports in its possession pertaining to the Business
and the Purchased Assets.
(c) To the Knowledge of the Seller there are no Environmental Claims
pending or threatened with respect to the Business or the Purchased Assets.
(d) Seller has not released, placed, stored, buried or dumped any
Hazardous Material on the Real Property, or any other property wherever located,
in form or quantities so as to create any liability under any Environmental Law,
and to the Knowledge of Seller, no other Person has released,
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placed, stored, buried or dumped any Hazardous Materials on the Real Property in
such form or quantities so as to create any liability under any Environmental
Law.
(e) To the Knowledge of the Seller, no environmental cleanup has
occurred on the Real Property that would reasonably be expected to result in the
assertion or creation of a lien on Real Property by any Governmental Authority.
(f) The Seller has not received any notice or order from any
governmental agency, person or private or public entity advising it that it is
responsible (or potentially responsible) for cleanup (or for paying the cost of
cleanup) of any Hazardous Materials at any property that has received Hazardous
Materials generated by Seller in connection with the operation of the Businesses
and Purchased Assets prior to the Closing Date, and the Seller has not entered
into any agreements concerning such cleanup.
(g) The Seller has obtained and maintained in full force and effect
to the date hereof all Permits that are required for the normal use and
operation of the Businesses and Purchased Assets as currently operated. The
Seller has materially complied with all such Permits and has not received any
written notice that either (i) any such Permits will not be renewed upon
expiration or (ii) any material adverse conditions will be imposed in order to
receive any such renewal.
4.15 Inventory. To the Knowledge of Seller and except as set forth in
Schedule 4.15, (a) all Inventory as of the Effective Time will be reflected on
the books and records of the Business; (b) all Inventory reflected on the books
and records of the Business is valued at the lower of cost or market value,
consistent with past accounting practices; and (c) the Inventory as of the
Effective Time will consist of items of Inventory reasonably useable or saleable
in the ordinary course of the Business at a level that is reasonable under
applicable conditions of the Business in light of past practices, except for
customary amounts of raw materials that cannot be incorporated into finished
products and items of obsolete materials and materials of below-standard quality
that have been written off or written down to the Seller's best estimate of net
realizable value.
4.16 Purchased Assets Complete. The Purchased Assets constitute all of the
material assets used by Seller in the conduct of the Business.
4.17 Recent Developments. Except as set forth on Schedule 4.17, since
April 30, 2004, to the Knowledge of the Seller there has not been and no fact or
condition otherwise exists, which would be reasonably expected to cause any
change which would have a Material Adverse Effect, other than changes in the
ordinary course of business the effect of which, individually or in the
aggregate, do not have a Material Adverse Effect.
4.18 Leased Real Property. Each Contract constituting a lease of Leased
Real Property listed on Schedule 2.1(h) is in full force and effect. The Seller
has performed in all material respects all
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obligations on its part to be performed to date under said leases and is current
with respect to the payment of all rents and other charges due thereunder and
its use and occupancy of the demised premises which are the subject matter of
such leases does not violate any of the material terms of such leases, is in
material conformity with all applicable Law and is not violative of the
conditions of any of the Seller's policies of insurance. To Seller's Knowledge,
no lessor or landlord under any lease is in default in the performance of its
obligations thereunder and the Seller has not received notice from any such
lessor or landlord of its intention to exercise any option thereunder which
would terminate the Seller's use or occupancy of the demised premises under such
lease.
4.19 Tangible Assets. To the Knowledge of Seller, all machinery,
equipment, tools, furniture, leasehold improvements, trade fixtures, vehicles,
structures, or any related capitalized items and other tangible property
material to the operation of the Business are either included as part of the
Purchased Assets or are leased by the Seller, and the Contract for such lease is
part of the Purchased Assets. To the Knowledge of Seller, the Tangible Assets
are in suitable operating condition and repair, subject to normal wear and tear
from normal use thereof except where the failure to be in such condition would
not have a Material Adverse Effect.
4.20 Warranties. Except as set forth on Schedule 4.20, (i) no material
claims are pending or to the Seller's Knowledge threatened against the Seller
for product liability with respect to products sold by the Seller which were
manufactured at or shipped by the Business, (ii) the Seller has not received any
written communications from or citations or decisions by any Governmental
Authority that any product manufactured, marketed or distributed at any time by
the Seller in connection with its operation of the Business ("Product") is
defective or fails to meet any standards promulgated by any such Governmental
Authority where such defect or failure can reasonably be expected to result in
future claims against the Buyer and (iii) there has been no recall ordered by
any such Governmental Authority with respect to any Product. To the Knowledge of
the Seller, there is no (i) fact relating to any Product that is reasonably
likely to impose upon the Seller or the Buyer a duty to recall any Product or a
duty to warn customers of a defect in any Product, or (ii) latent or overt
manufacturing or other material defect in any Product.
4.21. Solvency.
(a) The Seller is not now insolvent and will not be rendered insolvent by
any of the transactions contemplated by this Agreement. As used in this section,
"insolvent" means that the sum of the debts and other probable liabilities of
the Seller exceeds the present fair saleable value of Seller's assets.
(b) Immediately after giving effect to the consummation of the
transactions contemplated by this Agreement: (i) the Seller will be able to pay
its liabilities as they become due in the usual course of
September 9, 2004 (Wire)
its business; (ii) the Seller will have assets (calculated at fair market value)
that exceed its liabilities; and (iii) taking into account all pending and
threatened litigation, final judgments against the Seller in actions for money
damages are not reasonably anticipated to be rendered at a time when, or in
amounts such that, the Seller will be unable to satisfy any such judgments
promptly in accordance with their terms (taking into account the maximum
probable amount of such judgments in any such actions and the earliest
reasonable time at which such judgments might be rendered) as well as all other
obligations of the Seller. The cash available to the Seller immediately
subsequent to the Closing, after taking into account all other anticipated uses
of the cash, will be sufficient to pay all such debts and judgments promptly in
accordance with their terms.
4.22 Disclosure. To the Knowledge of the Seller, no representation or
warranty of the Seller contained in this Agreement and in the schedules to this
Agreement contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements and facts contained in this
Agreement and the schedules to this Agreement, in light of the circumstances
under which they are made, not false or misleading.
4.23 Accounts Receivable. The Accounts Receivable reflected on the
Business Financial Statements are, and the Accounts Receivable that will be
reflected on the Statement of Working Capital will be valid and collectible
using commercially reasonable collection practices, subject to normal market
write-offs for bad debt consistent with past practices of the Business. All of
those Accounts Receivable arose in the ordinary course of the Business and none
is subject to any Encumbrance (other than Permitted Encumbrances and claims,
counterclaims, facts or defenses arising in the ordinary course).
4.24 Disclaimer.
(a) EXCEPT AS TO THOSE MATTERS EXPRESSLY COVERED BY THE
REPRESENTATIONS AND WARRANTIES BY THE SELLER IN THIS AGREEMENT AND THE SELLER IN
THE ANCILLARY AGREEMENTS, THE SELLER EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND
WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. In
particular, the Seller disclaims any representation or warranty with respect to
any information concerning the Business, the Seller or any of its Affiliates not
expressly represented and warranted to in this Agreement or the Ancillary
Agreements, including, without limitation, (i) the information set forth in any
information memoranda distributed by the Seller, CIBC World Markets or Xxxxxxx
Xxxxx & Co., Inc., with respect to the Seller and the Business; (ii) except as
expressly set forth in Section 4.5, the Business Financial Statements or any
other financial projection or forecast relating to the Seller or the Business;
(iii) the information included in the data room established by the Seller or
otherwise delivered to the Buyer or its representatives; and (iv) all verbal or
written
September 9, 2004 (Wire)
communications by the Seller, employees thereof, or its representatives
(including, without limitation, CIBC World Markets or Xxxxxxx Xxxxx Co., Inc.).
The Buyer shall have no claim against the Seller, and the Seller shall have no
liability to the Buyer, with respect to any such disclaimed information.
(b) EXCEPT AS TO THOSE MATTERS EXPRESSLY COVERED BY THE
REPRESENTATIONS, WARRANTIES AND COVENANTS IN THIS AGREEMENT, THE BUYER IS
ACQUIRING THE PURCHASED ASSETS ON AN "AS IS, WHERE IS" BASIS OTHER THAN FOR
MANUFACTURERS' WARRANTIES, IF ANY, INCLUDED IN THE PURCHASED ASSETS.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants as of the date hereof and as of the
Closing Date:
5.1 Existence and Good Standing. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of Florida. The
Buyer is duly qualified to transact business as a foreign corporation and is in
good standing in each jurisdiction in which the nature of the assets owned,
leased or operated by the Buyer or the conduct of its business makes such
qualification necessary, except where the failure to be so qualified and in good
standing would not reasonably be expected to have a material adverse effect on
the business, operations or financial condition of the Buyer.
5.2 Due Authorization. The Buyer has all requisite corporate power and
authority to execute, deliver and perform this Agreement and the Ancillary
Agreements to which it is a party and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by the
Buyer of this Agreement and the Ancillary Agreements to which it is a party and
the consummation by the Buyer of the transactions contemplated hereby and
thereby have been duly and validly all authorized by necessary corporate action
on the part of the Buyer, and no other corporate actions or proceedings on the
part of the Buyer are necessary to authorize the execution, delivery and
performance by the Buyer of this Agreement and by the Buyer of the Ancillary
Agreements to which it is a party or the transactions contemplated hereby and
thereby. The Buyer has duly and validly executed and delivered this Agreement
and has duly and validly executed and delivered (or prior to or at the Closing
shall duly and validly execute and deliver) the Ancillary Agreements to which it
is a party. This Agreement constitutes, and upon execution and delivery thereof
(assuming due execution and delivery thereof by all other parties thereto) the
Ancillary Agreements to which the Buyer is a party shall constitute, legal,
valid and binding obligations of the Buyer, enforceable against the Buyer in
accordance with their respective terms, except as may be limited by (a)
applicable bankruptcy, insolvency, moratorium, reorganization or similar laws in
effect which affect creditors' rights generally; or (b) principles of equity
including legal or equitable limitations on the availability of specific
remedies.
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5.3 Consents. Except as set forth on Schedule 5.3, no Consent of any
Person not a party to this Agreement or any Governmental Authority (other than
in connection with Permits) is required in connection with the execution,
delivery and performance of this Agreement and the Ancillary Agreements by the
Buyer, or the consummation of the transactions contemplated hereby or thereby.
5.4 Absence of Conflicts. Neither the execution and delivery of this
Agreement nor any of the Ancillary Agreements to which the Buyer is a party nor
the consummation of any of the transactions contemplated hereby or thereby will,
directly or indirectly (with or without notice or lapse of time), violate,
conflict with, or result in a breach of (a) the charter, by-laws or other
organizational documents of the Buyer or any resolution adopted by the board of
directors or shareholders of the Buyer; (b) any judgment, decree or order of any
Governmental Authority to which the Buyer is subject or by which the Buyer is
bound; or (c) any requirements of Laws applicable to the Buyer.
5.5 Litigation. Except as set forth on Schedule 5.5, there is no
Litigation of any nature pending, asserted, or to the Knowledge of the Buyer,
threatened against the Buyer by or before any Governmental Authority which would
(a) enjoin, restrict or prohibit the transfer of any of the Purchased Assets as
contemplated by this Agreement; (b) prevent the Buyer from fulfilling all of its
obligations set out in this Agreement or arising under this Agreement or any
Ancillary Agreements; or (c) reasonably be expected to adversely affect the
ability of the Buyer to consummate the transactions contemplated hereby.
5.6 Brokers. The Buyer has not used any broker or finder in connection
with the transactions contemplated hereby, and neither the Seller nor any of its
Affiliates has or shall have any liability or otherwise suffer or incur any Loss
as a result of or in connection with any brokerage or finder's fee or other
commission of any Person retained by the Buyer in connection with any of the
transactions contemplated by this Agreement or any of the Ancillary Agreements.
5.7. Sufficient Funds. The Buyer has and on the Closing Date will have,
sufficient cash, lines of credit or other sources of unconditionally available
funds to enable it to pay the Purchase Price and all fees and expenses in
connection with the consummation of the transactions contemplated hereby,
without any new debt or equity financing. The Buyer's obligations hereunder are
not contingent upon procuring financing for the transaction contemplated by this
Agreement.
ARTICLE VI
COVENANTS OF THE SELLER
The Seller hereby covenants with the Buyer as follows:
6.1 Conduct of Business. Except as otherwise contemplated by this
Agreement, and except as otherwise consented to by the Buyer (which consent
shall not be unreasonably withheld or delayed),
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from the date hereof until the Closing Date, the Seller shall conduct the
Business in the usual and ordinary course and in material compliance with all
Laws, and the Seller shall use commercially reasonable efforts consistent with
the Seller's current business practices, to preserve the goodwill of the
Business, including to preserve its current relationships with customers,
suppliers, and employees of the Business, as well as others having business
relations with the Business; provided, that nothing in this Section 6.1 shall
require the Seller to make any capital expenditures, above and beyond routine
maintenance and repair. The parties understand and acknowledge that the matters
referred to in this Section 6.1 may be adversely affected by the public
announcement of the transactions contemplated hereby, and any such adverse
effect shall not be considered a breach of this covenant by the Seller.
6.2 Negative Covenants Relating to Conduct of the Business. Except as
otherwise contemplated by this Agreement, and except as consented to by the
Buyer in writing (which consent shall not be unreasonably withheld or delayed),
the Seller shall not, from the date hereof until the Closing Date, with respect
to the Business:
(a) Enter into, terminate or amend in any material respect any
Material Contract except in the ordinary course of business and except for such
amendments to the Material Contracts, the effect of which could reasonably be
expected to be advantageous to the Business;
(b) Other than pursuant to this Agreement, sell, lease or dispose of
any of the Purchased Assets except pursuant to existing Contracts or in the
ordinary course of business; provided however that notwithstanding the foregoing
clause, Seller shall not sell any fixed asset which is carried on the books of
Seller with a net book value of more than $250,000.00, unless such fixed asset
is replaced, prior to Closing, with a fixed asset of like kind and value;
(c) Increase the rate of compensation of, or pay or agree to pay any
benefit to the Affected Employees, except in the ordinary course of business or
as may be required by the terms of any existing Employee Plan, agreement or
arrangement;
(d) Enter into, adopt or amend any Employee Plan, or employment or
severance agreement affecting the Business, except in the ordinary course of
business;
(e) Take or omit to take any action as a result of which any
representation or warranty of the Seller in Article IV would be rendered untrue
or incorrect if such representation or warranty were made immediately following
the taking or failure to take such action; or
(f) Agree, whether in writing or otherwise, to do any of the
foregoing.
6.3 Disclosure Schedules. The Seller may amend or supplement any Schedules
delivered in connection with this Agreement at any time prior to the Closing by
giving notice to the Buyer in
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accordance with the terms of this Agreement, and shall further be obligated to
promptly amend or supplement any Schedule prior to Closing that the Seller
reasonably believes to be incorrect. All such amendments or supplements will be
effective to cure or correct, for all purposes, any breach of any
representations or warranties of the Seller which would have existed if the
Seller had not made such update, so long as such update does not have a Material
Adverse Effect. In the event such amendment of supplement would have a Material
Adverse Effect, the Buyer's sole remedy is to terminate this Agreement,
whereupon neither party shall have any liability to the other, and this
Agreement and all Ancillary Agreements shall be null and void, and of no further
force or effect except as provided in Section 12.2 below. In the event that the
Buyer consummates the Closing with such amended or supplemented Schedule, then
such amendment or supplement shall be deemed to have been satisfactory to the
Buyer. All references to any Schedule which is updated pursuant to this Section
6.3 shall for all purposes, be deemed to be a reference to such Schedules as
updated.
6.4 Notice of Events. Prior to the Closing, the Seller shall promptly
notify the Buyer of (i) any event, occurrence, transaction or other item which
would have been required to have been disclosed on any Schedule hereunder, had
such event, occurrence, transaction or item existed on the date hereof, other
than items arising in the ordinary course of business which would not render any
representation or warranty of the Seller false or incorrect, and (ii) any
lawsuits, claims, proceedings or investigations which after the date hereof are
threatened or commenced against the Seller or any officer, director, employee,
consultant, agent or shareholder of the Seller with respect to the affairs of
the Seller relating to the Business.
6.5 Payment of the Excluded Obligations. The Seller covenants to pay,
fulfill, perform, and discharge as and when the same are due, all indebtedness,
payables, duties and obligations arising from the Excluded Obligations.
6.6 Repurchase of Uncollected Accounts Receivable. One hundred twenty
(120) days after the Closing Date, the Buyer will sell, transfer, assign, and
deliver to the Seller, without recourse or warranty, all Uncollected Accounts
Receivable. Payment for the Uncollected Accounts Receivable will be made by
Seller to Buyer by wire transfer of immediately available funds within ten (10)
Business Days following Seller's receipt of the repurchase documents from Buyer.
In determining whether a payment has been made to a particular Account
Receivable or otherwise to a receivable owed to the Buyer subsequent to the
Closing Date, the information on the remittance advice, payment voucher or
otherwise reflected on the payment shall control. In the event of a lack of such
information, then payments shall be applied to the oldest Account Receivable.
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ARTICLE VII
COVENANTS OF THE BUYER AND THE SELLER
7.1 HSR Act Notification: Other Consents.
(a) Each of the Buyer and the Seller shall cause to be filed as
promptly as practicable with the Federal Trade Commission and the Department of
Justice the notification and report form required for the transactions
contemplated by this Agreement, the Ancillary Agreements and the agreements,
documents and instruments contemplated herein and therein and shall use
reasonable best efforts to provide any supplemental information that may be
reasonably requested in connection therewith, which notification and report form
and supplemental information shall comply with the requirements of the HSR Act
(it being understood that the filing fee shall be borne by the Buyer).
(b) The Seller shall make as promptly as practicable following the
date hereof the other notifications required in connection with, and shall use
commercially reasonable efforts to obtain the Consents of all Third Parties
required in connection with the consummation of the transactions contemplated
hereby. The Seller and the Buyer shall coordinate and cooperate with each other
in exchanging information and assistance in connection with obtaining consents
of Third Parties and making all filings or notifications necessary to transfer
any Permits to the Buyer, or in connection with any applications for new Permits
relating to the Business.
7.2 Access to Information, Inspections, Environmental Due Diligence.
(a) During the period from the date of this Agreement through the
Closing Date, the Seller shall give the Buyer and its authorized
representatives, including, without limitation, environmental and real estate
professionals, reasonable access during regular business hours and upon
reasonable notice, to all plants, offices, warehouses, facilities, employees and
Books and Records of the Seller relating to the Business as they may reasonably
request; provided, however, that Buyer shall give Seller at least two (2) days
prior notice to access any facility. Notwithstanding and without limiting the
foregoing, the Buyer shall not undertake any sampling or testing, including
without limitation intrusive soil or groundwater testing without the Seller's
approval, which approval shall not be unreasonably withheld, denied or
conditioned. A Seller's representative shall be present at all site visits and
inspections and the Buyer's representative shall, at all times, while on the
premises of the Seller, comply with all directions and requests related to
safety, security and confidentiality. The Buyer shall indemnify the Seller for
any Losses directly caused by the Buyer's access and inspections pursuant to
this Section.
(b) The Buyer shall have the right to cause to be performed, at the
Buyer's expense, Phase I Environmental Site Assessments of the Business and
Purchased Assets, as deemed necessary in
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the sole discretion of the Buyer (collectively the "Environmental Audits") to
determine whether any portion of the Businesses or Purchased Assets are affected
by a material environmental condition.
(c) The Buyer shall, at and after the Closing Date afford promptly
to the Seller and its respective agents reasonable access during normal business
hours, upon reasonable notice, to the properties, employees and Books and
Records of the Business, to the extent reasonably necessary to permit the Seller
to determine any matter relating to or arising during any period ending on or
before the Closing Date. The Seller shall indemnify the Buyer for any Losses
directly caused by the Seller's access pursuant to this Section. If the Buyer
proposes to destroy or otherwise dispose of any records relating to the
Business, other than in the ordinary course of business, consistent with its
written document retention policy, the Buyer shall first notify the Seller in
writing, and afford the Seller the opportunity, for a period of at least ninety
(90) days following the date of such notice, to take custody of such records or
make extracts therefrom or copies thereof.
7.3 [intentionally left blank]
7.4 Title Commitment and Survey.
(a) As evidence of title to the Owned Real Property and the Leased
Real Property, the Seller shall cause to be prepared and delivered to the Buyer,
as soon as reasonably practicable, but in no case later than thirty (30) days
after execution of this Agreement, and at the Seller's expense, a commitment
from Chicago Title Insurance Company (the "Title Company") together with copies
of all exception documents, to issue to the Buyer at Closing, an ALTA Form B
owner's title insurance policy (for Owned Real Properties) and, at the Buyer's
election, a leasehold title insurance policy (for Leased Real Properties). The
Seller shall deliver to the Buyer, as soon as practicable, but in no case later
than fifteen (15) days, after execution of this Agreement, any survey with
respect to each Owned Real Property and Leased Real Property currently in the
possession of the Seller or its Affiliates.
(b) If the Title Commitment survey or other evidence of title
discloses a title defect, (in the Buyer's judgment), exception to title or other
Encumbrance, other than a Permitted Encumbrance or a matter contained on
Schedule 4.6(a), the Buyer shall notify the Seller within ten (10) Business Days
of receiving all of the title evidence requested by this Section. The Seller
shall use reasonable efforts to cure each title objection shown as an exception
to the Title Commitment prior to Closing; provided, however, that it shall not
be obligated to expend money to do so (other than monetary Encumbrances which
the Seller shall have an absolute obligation to cure at its expense); provided,
however, that if the Seller fails or refuses to effect a cure reasonably
satisfactory to the Buyer, then either Buyer or Seller shall have the right to
terminate this Agreement without liability to the other. In addition, the Seller
shall have an absolute obligation to cure any title defect, exception to title,
or other Encumbrance occurring
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from the date of the Title Commitment to the Effective Time. The cost of such
title insurance (including premiums) shall be borne by the Buyer.
7.5 Motor Vehicles. The Seller shall take all actions and prepare all
documents necessary to effect the transfer to the Buyer of all motor vehicle
licenses and registrations pertaining to automobiles, trucks and other motor
vehicles of whatever kind comprising the Tangible Assets, in compliance with
Law. All transfer taxes related to the sale of motor vehicles in connection with
the consummation of the transactions contemplated hereby shall be borne by the
Buyer.
7.6 Tax Matters.
(a) With respect to ad valorem and similar Taxes relating to the
Purchased Assets or any portion of them, the Seller shall pay and be responsible
for all such Taxes for the taxable years 2003 and earlier taxable periods The
Buyer shall pay and be responsible for all payments of such Taxes for the all
such Taxes for taxable years after 2004. All payments of such Taxes for the
taxable year 2004 (including installments) shall be prorated between Seller and
Buyer as of the Closing Date and included in the Purchase Price adjustments
pursuant to Section 3.2.
(b) The Seller shall promptly deliver to the Buyer any and all
notices, tax bills, tax statements, orders, or other similar documents or
communications received by the Seller or any of its Affiliates and relating to
ad valorem or similar Taxes affecting all or any portion of the Purchased
Assets.
(c) The Buyer shall promptly notify the Seller in writing upon
receipt by the Buyer or any of Buyer's Affiliates, of notice of any pending or
threatened Tax liabilities which relate to the Seller for the period prior to
the Effective Time. The Seller shall have the sole right to control any Tax
audit or administrative or court proceeding with respect to such Tax liabilities
that are not part of the Assumed Obligations, and the Buyer agrees that it will
cooperate fully with the Seller and its counsel (at the sole cost of the Seller)
in the defense against or compromise of any claim in any said proceeding. After
the Closing Date, the Buyer shall make available to the Seller such records as
the Seller may reasonably require for the preparation of any Tax Returns, and
the preparation and defense of any audit or administrative or court proceeding.
All refunds of Taxes paid by the Seller that are attributable to periods prior
to the Effective Time shall be for the account of the Seller, unless the
liability for such Tax was a liability which was part of the Assumed
Obligations, in which case the refund shall be for the account of the Buyer.
Unless the Tax was part of the Assumed Obligations, the Buyer (at the expense of
the Seller) shall take such actions as reasonably requested by the Seller to
obtain such refunds and shall deliver to the Seller any such refunds promptly
upon receipt thereof. All refunds of Taxes paid by the Buyer or its Affiliates
attributable to the period from and after the Effective Time shall be for the
Account of the Buyer.
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(d) The Buyer shall not revoke any Tax election previously made by
the Seller nor make any new Tax election that changes the Seller's Tax results
for periods prior to the Effective Time, without securing the Seller's prior
written consent, which consent shall not be unreasonably withheld.
(e) The parties shall pay any documentary stamps or other forms of
transfer taxes, including deed taxes or documentary stamps levied on this
transaction in accordance with the laws and customs of each applicable
jurisdiction.
7.7 Bulk Sales Compliance. The Buyer and the Seller waive compliance with
the provisions of any applicable statutes relating to bulk transfers or bulk
sales. The Buyer and the Seller mutually agree to cooperate in securing any
available exemptions from any such provisions. Notwithstanding the foregoing,
any liability assessed on the Buyer arising out of or relating to the Seller's
failure to comply with applicable statutes relating to bulk, transfers or bulk
sales shall be an indemnification obligation of the Seller pursuant to Section
13.2(a) below.
7.8 Confidentiality.
(a) Until Closing, Buyer shall continue to comply with and be
subject to the terms of the Confidentiality Agreement; provided, however, the
Confidentiality Agreement is hereby amended to the extent necessary to permit
the Buyer to fulfill its obligations under Section 10.1 of this Agreement and as
otherwise agreed on by the Buyer and the Seller in writing. The Confidentiality
Agreement, as so amended, shall terminate as of the Closing Date.
(b) Except as required by Law or on the advice of counsel, for a
period of two (2) years after the Closing Date, the Seller shall and shall cause
its officers, directors, Affiliates, employees, agents and representatives to
hold in confidence and not disclose or use (i) any proprietary or other
confidential and non-public information regarding the Buyer disclosed to the
Seller in connection with the negotiation or preparation of this Agreement; (ii)
the nature or resolution of any disputes arising hereunder after the Closing;
and (iii) any proprietary or other confidential non-public information relating
to the Purchased Assets of the Business; and provided, however, the confidential
and non-public information shall not include any information publicly known
through no fault of the Seller or its Affiliates or disclosures made in
connection with the consummation of the transaction, or the management and
resolution of any Excluded Assets, Excluded Obligations, or Excluded Businesses.
(c) Except as required by Law or on the advice of counsel, for a
period of two (2) years after the Closing Date, the Buyer shall, and shall cause
its respective officers, directors, Affiliates, employees, agents and
representatives to hold in confidence and not disclose or use (i) any
proprietary or other confidential and non-public information (excluding
information relating to the Purchased Assets or the Business) regarding the
Seller and any Affiliate of the Seller disclosed to Buyer in connection with the
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negotiation or preparation of this Agreement and (ii) the nature or resolution
of any dispute arising under this Agreement after the Closing, provided,
however, the confidential and non-public information shall not include any
information publicly known through no fault of buyer of its Affiliates.
(d) For a period of two (2) years after the Closing Date, the Buyer
shall not solicit the employment of any Person who are employed in a management
position with the Seller subsequent to the Closing Date (other than as otherwise
agreed to by the Buyer and the Seller in writing), except that the foregoing
shall not preclude Buyer from hiring any Person whose employment with the Seller
has been terminated prior to any solicitation.
7.9 Payments Received. After the Closing, the Seller and the Buyer shall
hold and promptly transfer and deliver to the other, from time to time as and
when received by them, any cash, checks with appropriate endorsements (using
their best efforts not to convert such checks into cash), or other property that
they may receive on or after the Closing which properly belongs to the other
party, including any insurance proceeds, and shall account to the other for all
such receipts.
7.10 Satisfaction of Conditions and Further Assurances. Without limiting
the generality or effect of any provision of Articles VIII and IX, prior to the
Closing, each of the Parties shall use commercially reasonable efforts and act
in good faith to satisfy promptly all conditions required by this Agreement to
be satisfied by it in order to expedite the consummation of the transactions
described in this Agreement. The Parties shall execute and deliver such other
documents, certificates, agreements and other writings and to take such other
actions as may be reasonable, necessary or desirable in order to consummate or
implement expeditiously the transactions described in this Agreement, and any
agreement, document or instrument described in this Agreement.
7.11 Inventory Valuation Procedures. The Seller and Buyer will value the
Inventory pursuant to the procedures contained in Schedule 7.11 hereto.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BUYER
The obligations of the Buyer to consummate the transactions contemplated
hereby are subject to the satisfaction or waiver (to the extent permitted by
applicable Law) by the Buyer of the following conditions precedent on or before
the Closing Date:
8.1 Accuracy of Representations and Warranties. The representations and
warranties of the Seller contained herein and in any certificate or other
writing delivered by the Seller pursuant to this Agreement or the Ancillary
Agreements shall be true, accurate and correct as of the date hereof and on and
as of the Closing Date, as if made at and as of such date (unless any such
representation or warranty
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refers specifically to a specified date, in which case such representation or
warranty shall be true, accurate and correct on and as of such specified date)
except for such inaccuracies which in the aggregate would not reasonably be
expected to result in a Material Adverse Effect.
8.2 Compliance with Agreements and Covenants. The Seller shall have
performed and complied in all material respects with all of its covenants,
obligations and agreements contained in this Agreement to be performed and
complied with by it on or prior to the Closing Date.
8.3 Xxxx-Xxxxx-Xxxxxx. All applicable waiting periods under the HSR Act
and other applicable Laws shall have expired or been terminated without action
by the Justice Department or the Federal Trade Commission to prevent the
consummation of the transaction described in this Agreement and the Ancillary
Agreements.
8.4 No Injunctions. There shall not be in effect any temporary restraining
order, preliminary injunction, injunction or other pending or threatened action
by any Third Party or any order of any court or Governmental Authority
restraining or prohibiting the Closing of the transaction contemplated by this
Agreement and the Ancillary Agreements.
8.5 Title Insurance. The Buyer shall have received binding commitments to
issue policies of title insurance consistent with Section 7.4, dated as of the
Closing Date, in an aggregate amount equal to the portion of the Purchase Price
allocated to the Real Property. The binding commitments shall insure the state
of the title as shown on the Title Commitment together with the state of the
title after the Seller has effected any cures requested by the Buyer pursuant to
Section 7.4.
8.6 Deliveries. The Seller shall have made, or be prepared to make at the
Closing, all of the deliveries set forth in Section 11.2.
8.7 Steel Xxxxx Acquisition. The Steel Xxxxx Facilities Acquisition shall
close simultaneously with the Closing.
8.8 Transition Services Agreement. The Transition Services Agreement shall
be executed by Seller and delivered to Buyer.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER
The obligations of the Seller to consummate the transactions contemplated
hereby are subject to the satisfaction or waiver (to the extent permitted by
applicable Law) by the Seller of the following conditions precedent on or before
the Closing Date:
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9.1 Accuracy of Representations and Warranties. The representations and
warranties of the Buyer contained herein and in any certificate or other writing
delivered by the Buyer pursuant to this Agreement or the Ancillary Agreements
shall be true, accurate and correct in all material respects as of the date
hereof and on and as of the Closing Date, as if made at and as of such date
(unless any such representation or warranty refers specifically to a specified
date, in which case such representation or warranty shall be true, accurate and
correct in all material respects on and as of such specified date), except for
such inaccuracies which in the aggregate would not be expected to result in a
Material Adverse Effect.
9.2 Compliance with Agreements and Covenants. The Buyer shall have
performed and complied in all material respects with all of its covenants,
obligations and agreements contained in this Agreement to be performed and
complied with by it on or prior to the Closing Date.
9.3 Xxxx-Xxxxx-Xxxxxx. All applicable waiting periods under the HSR Act
and other applicable Laws shall have expired or been terminated without action
by the Justice Department or the Federal Trade Commission to prevent the
consummation of the transaction described in this Agreement and the Ancillary
Agreements.
9.4 No Injunctions. There shall not be in effect any temporary restraining
order, preliminary injunction, injunction or other pending or threatened action
by any Third Party or any order of any court or Governmental Authority
restraining or prohibiting the Closing of the transactions contemplated by this
Agreement and the Ancillary Agreements.
9.5 Deliveries. The Buyer shall have made, or be prepared to make at the
Closing, all of the deliveries set forth in Section 11.3.
9.6 Steel Xxxxx Acquisition. The Steel Xxxxx Acquisition shall close
simultaneously with the Closing.
9.7 Transition Services Agreement. The Transition Services Agreement shall
be executed by Buyer and delivered to Seller.
ARTICLE X
EMPLOYEES AND BENEFIT PLANS
10.1 Offer of Employment.
(a) Immediately prior to the Effective Time, the Seller shall
terminate the employment of all of the Affected Employees.
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(b) On or before the Effective Time and after determining the number
of employees the Buyer deems necessary to operate the Business or any unit
thereof, the Buyer shall first offer employment to all or substantially all of
the Affected Employees (including Affected Employees on vacation, temporary
layoff, approved leave of absence, sick leave, family medical leave under the
Family and Medical Leave Act, and short-term disability, but excluding, at the
Buyer's option, Affected Employees on long-term disability under the Seller's
long-term disability plan. With respect to the work performed by the Seller's
collective bargaining units, the Buyer shall extend offers of employment only to
Affected Employees of the Seller's collective bargaining units until the Buyer
has a full complement of the employees the Buyer deems necessary or until the
Buyer has extended offers of employment to all Affected Employees of the
collective bargaining units, whichever occurs sooner.
(c) The number of Affected Employees to whom the Buyer offers jobs
under Article 10.1(b) will avoid any and all notifications, benefits, and
liabilities to Affected Employees and governmental entities required by the
Worker Adjustment and Retraining Notification Act of 1988 (WARN) or by any other
applicable law relating to plant closings or employee separations or severance
pay.
(d) The Seller shall be responsible for payment of all severance pay
(if any) due under the Seller's severance policies to Affected Employees who are
not offered employment with the Buyer. The Buyer shall reimburse the Seller
through a post-closing adjustment for all severance paid by the Seller to
Affected Employees not offered employment with the Buyer.
(e) Each of the Seller's Affected Employees who accept employment
under Article 10.1(b) shall be referred to herein as a "Transferred Employee".
10.2 Severance Benefits. Each Transferred Employee who is terminated by
the Buyer "without cause" within six (6) months following the Closing Date (the
"Severance Period") in accordance with the terms of the Buyer's written
policies, as applicable, and other than as a result of the Transferred
Employee's death, disability or voluntary retirement, shall be eligible for
severance benefits from the Buyer. For the purposes of this Agreement,
reductions in force and job elimination shall not constitute a "for cause"
termination. Such Transferred Employee who is terminated "without cause" during
the Severance Period will be entitled to receive from the Buyer the greater of
(i) severance pay as calculated under the applicable Labor Contract, (ii) if no
Labor Contract applies, the Seller's severance policy or plan as in effect on
the Closing Date (which benefits shall be paid in the form of salary
continuation); or (iii) salary continuation at the rate in effect as of the
effective date of such termination for the remainder of the Severance Period.
Any Transferred Employee who is terminated "without cause" by the Buyer within
the Severance Period, will be entitled to continued COBRA coverage under the
Buyer's medical plans at employee premium rates, as applicable, during the
Severance Period.
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10.3 Vacation. The Buyer will continue to offer each Transferred Employee
his or her vacation days that the Seller has granted to the Affected Employee
before the Closing Date in accordance with the Seller's vacation policy, but
which the Affected Employee could not use before the Closing Date. The Seller
shall credit to the Buyer through a post-closing adjustment the value of such
earned but unused vacation time based on the Transferred Employee's wage or
salary on the day before the Closing Date pursuant to any applicable Labor
Contract or, if no such Labor Contract applies, the Seller's vacation pay policy
in effect on the Closing Date. If a Transferred Employee is unable to use all of
his or her earned but unused vacation days after the Closing Date, the Buyer
shall pay the Transferred Employee all of his or her earned but unused vacation
pay in cash on the Transferred Employee's separation date from Buyer. The Buyer
shall be responsible and liable for all vacation days and pay that each
Transferred Employee accrues and earns under the Buyer's vacation policies or
the applicable Labor Contracts after the Closing Date.
10.4 Salaries and Benefits.
(a) The Seller shall be responsible for the payment of all wages and
other remuneration that Affected Employees have earned up until the Effective
Time.
(b) The Seller shall be liable for any claims made or incurred by
Affected Employees and their beneficiaries up until the Effective Time under the
Seller's Employee Plans, except as otherwise noted herein. For purposes of the
immediately preceding sentence, a charge will be deemed incurred, in the case of
hospital, medical or dental benefits, when the services that are the subject of
the charge are performed and, in the case of all other benefits when an event
has occurred or when a condition has been diagnosed that entitled the employee
to the benefit.
(c) Except as otherwise noted herein, and except for any short or
long term disability benefits which become due and owing as a result of any
Transferred Employee's continuous, uninterrupted short or long-term disability
condition, which is in effect as of the Effective Time, Employee Plan coverage
of the Seller for Transferred Employees shall cease as of the Effective Time and
coverage under the Buyer's plans for eligible Transferred Employees shall
immediately commence, except that Buyer may elect (to the extent permitted by
law and the applicable plan(s)) to have Seller continue its welfare benefit plan
coverage for Transferred Employees through December 31, 2004. Buyer will provide
Seller written notice of any such election to have Seller continue such
coverage, at least 30 days prior to the Closing Date. If Buyer elects to have
Seller continue such coverage, it shall reimburse Seller the full cost of such
coverage for Transferred Employees, including external administrative services
fees associated with said coverage. For purposes of such reimbursement, a charge
will be deemed incurred, in the case of hospital, medical, or dental benefits,
when the services that are the subject of the charge are performed and, in the
case of all other benefits when an event has occurred or when a
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condition has been diagnosed that entitles the employee to the benefit. The
Seller shall be solely responsible for any continuation coverage required by
COBRA for those terminated employees of the Seller who are not Transferred
Employees, and their qualified beneficiaries. The Buyer shall waive all
pre-existing conditions and waiting periods for the Transferred Employees under
all pension, 401(k), disability and employee health and welfare plans of the
Buyer.
(d) The Seller shall retain all assets in the pension and retirement
funds of the Seller, and shall distribute pension and retirement benefits which
the Transferred Employees shall become entitled to receive from the Seller in
accordance with the applicable plan document and the Transferred Employees'
elections, as applicable.
(e) Effective as of the Closing Date, the Buyer shall give past
service credit to all the Transferred Employees that are not included in any
collective bargaining agreement for purposes of determining vesting, eligibility
and benefit accruals under all employee benefit programs of the Buyer, with the
sole exception of pension plan benefit accruals.
(f) The Seller will retain all Incentive Savings Plan (401(k) plan)
benefits held in the name of the Transferred Employees, if any, unless otherwise
directed by a Transferred Employee or unless distribution is otherwise allowed
or mandated pursuant to the plan document. The Buyer agrees to accept qualified
direct and indirect rollovers from the Seller's Incentive Savings Plan. The
Buyer shall cause to be accepted all loans or substitute comparable loans to
Transferred Employees that are associated with any such rollovers from Seller's
Incentive Savings Plan. Any administrative fees or charges associated with the
rollovers shall be for the Buyer's account.
(g) Retiree Health Coverage. Seller shall make retiree health
coverage available to Affected Employees who are eligible to retire under
Seller's applicable defined benefit pension plan as of the Effective Date, based
upon the terms, conditions and restrictions stated in said Seller sponsored
retiree plan as of the Affected Employee's actual date of retirement. Except as
provided above and in Section 10.8 below, no other Affected Employee shall be
eligible for Seller sponsored retiree health coverage.
(h) Employee Loans. A list of outstanding employee loans held by the
Seller is set forth on Schedule 10.4(h). The Buyer agrees to purchase from the
Seller at Closing, any loans made to Transferred Employees that are outstanding
on the Closing Date and to pay the Seller an amount equal to the principal
balance on the loans plus any accrued interest up to that date.
(i) Tuition Reimbursement. The Buyer shall be obligated to continue
the Seller's tuition reimbursement program for any Transferred Employees for the
duration of the academic term in which the Closing occurs and to pay any tuition
reimbursement for that term which is payable to the Transferred Employees on or
after the Closing Date.
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10.5 No Transfer of Assets. No pension or other employee benefit plan
assets held by the Seller shall be transferred to the Buyer.
10.6 WARN Act Notification. In the event that any liability is incurred
under any Laws relating to plant or facility closings as a result of this
transaction, the Seller will be solely and exclusively responsible for all
obligations and liabilities incurred under such laws relating to this
transaction to the extent they result from events occurring as of or before the
Effective Date. Except as provided in the preceding sentence, in the event that
any liability is incurred under any Laws relating to plant or facility closings
for any reason, including this transaction, the Buyer will be solely and
exclusively responsible for all obligations and liabilities incurred under such
laws.
10.7 Employee Records. The Seller shall make available to the Buyer for
review records which are located on the Business premises or in Seller's
possession and which provide information regarding employees' names, dates of
hire by the Seller, and salary histories for all Affected Employees who are
considered by Buyer for employment with Buyer. The Seller shall not provide
records pertaining to performance ratings and evaluations, disciplinary records
and medical records ("Employee Records").
10.8 Union Recognition and Labor Contracts. The Buyer recognizes the
International Brotherhood of Teamsters as the collective bargaining
representative of Affected Employees in the units that perform bargaining unit
work for the Seller. The Buyer agrees to assume the Seller's Labor Contracts
presently in place at the facilities, including the employment terms and
conditions and expiration dates thereof, subject to the condition that Buyer
must substitute for each Seller Employee Plan a Buyer plan which is
substantially equivalent thereto because the Buyer cannot legally or practicably
sponsor or offer such Seller's Employee Plans. Seller shall continue to be
liable for any benefits, liabilities, or other obligations arising under such
Labor Contracts prior to the Effective Time, or arising under such Labor
Contracts at any time with respect to employees of Seller who retire or
terminate employment prior to or as of the Effective Time.
10.9 General Employment Provisions.
(a) The Seller and the Buyer shall give any notices requested by Law
and take whatever other actions with respect to the plans, programs and policies
described in this Article as may be necessary to carry out the arrangements
contemplated hereby.
(b) The Seller and the Buyer shall each provide the other with such
plan documents and summary plan descriptions, employee data or other information
as may be reasonably required to carry out the arrangements described in this
Article.
(c) If any of the arrangements described in this Article are
determined by the IRS or other Governmental Authority to be prohibited by law,
the Seller and the Buyer shall
September 9, 2004 (Wire)
modify such arrangements to as closely as possible reflect their expressed
intent and retain the allocation of economic benefits and burdens to the parties
contemplated herein in a manner not otherwise prohibited by Law.
ARTICLE XI
CLOSING
11.1 Closing. The Closing shall take place at the Seller's offices in
Minneapolis, Minnesota, at 9:00 a.m. on November 1, 2004 or, if all of the
Closing conditions set forth in Articles VIII and IX have not been satisfied or
waived as of such date, on the first date on which such conditions have been
satisfied or properly waived (to the extent permitted by applicable Laws)
pursuant to the terms of this Agreement, subject to the provisions of Section
12.1(b). The date on which the Closing occurs is referred to in this Agreement
as the "Closing Date." The Closing shall be effective as of the Effective Time.
11.2 Deliveries by the Seller. At or prior to the Closing, the Seller
shall deliver to the Buyer the following, each dated the Closing Date and duly
executed by the Seller:
(a) One or more Assignment and Assumption Agreements, together with
special warranty deeds for each parcel of Owned Real Property, Bills of Sale and
other conveyance documents (collectively, the "Conveyance Documents") with
respect to tangible property included in the Purchased Assets;
(b) Certificates of title for all vehicles included in the Purchased
Assets, duly endorsed for transfer to the Buyer.
(c) Other instruments of transfer reasonably requested by the Buyer
to evidence the transfer of the Purchased Assets to the Buyer and consummation
of the transactions contemplated hereby, including assignments with respect to
any Transferred Intellectual Property to be registered, recorded or filed with
any Governmental Authority, in a form suitable for registration, recordation or
filing with such Governmental Authority, in each case duly executed by the
Seller;
(d) A certificate, dated the Closing Date, of the Seller certifying
as to the compliance by the Seller with Sections 8.1 and 8.2; and
(i) A certificate of the Secretary of the Seller certifying
resolutions of the board of directors of the Seller (or the executive
committee thereof) approving and authorizing the execution, delivery and
performance of this Agreement by the Seller and the Ancillary Agreements
to which the Seller is a party and the consummation by the Seller of the
transactions contemplated hereby and thereby (together with an incumbency
and signature certificate regarding the officer(s) signing on behalf of
the Seller).
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(f) The Consents set forth on Schedule 4.3 and all Consents and
waivers of any Governmental Authority or other Third Party that are otherwise
required in connection with the execution and delivery of this Agreement or any
Ancillary Agreement, the performance of the Seller of its obligations hereunder
or thereunder, and the consummation of the transactions contemplated hereby and
thereby, each of which shall be in form and substance reasonably satisfactory to
the Buyer;
(g) The Transition Services Agreement;
(h) A certificate, in the form prescribed by Treasury regulations
under Section 1445 of the Code, that the Seller is not a foreign Person within
the meaning of Section 1445 of the Code;
(i) The surveys and title insurance policies referenced in Section
7.3 in such amounts as the Seller and the Buyer shall agree insuring that (i)
good and indefeasible fee simple title to the Owned Real Property is vested in
the Buyer and containing no exceptions to title except Permitted Encumbrances,
those listed in Schedule 4.6(b), and those to which the Buyer did not object in
accordance with Section 7.4; and (ii) good and indefeasible leasehold estate to
the Leased Real Property is vested in the Buyer;
(j) Good standing certificates from the applicable Governmental
Authority in Delaware, together with good standing certificates from the
applicable Governmental Authority in Texas and Tennessee with regard to the
status of Seller as a foreign corporation.
(k) Tax clearance certificates from the applicable Governmental
Authorities in Texas and Tennessee;
(l) An opinion of the Seller's counsel in the form of Exhibit D.
(m) Releases from Third Parties who hold Encumbrances on any of the
Purchased Assets (other than Permitted Encumbrances and items listed in Schedule
4.6(b); and
(n) Estoppel certificate in accordance with Section 13.6 of the
Amended and Restated Lease Agreement between Xxxxxx Xxxxxxx Co., Inc. and Seller
dated June 24, 1998, together with a Memorandum of Lease in recordable form and
an Assignment of Lease, all relating to the Carrollton, Texas facility.
(o) Such other documents and instruments as may be reasonably
required to consummate the transactions contemplated by this Agreement and the
Ancillary Agreements.
11.3 Deliveries by the Buyer. At the Closing, the Buyer shall make the
payment described in Section 3.1 and shall deliver to the Seller the following,
each dated the Closing Date and duly executed by the Buyer:
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(a) One or more Assignment and Assumption Agreements;
(b) A certificate dated the Closing Date, of the Buyer, certifying
as to compliance by the Buyer with Sections 9.1 and 9.2;
(c) A certificate of the Secretary of the Buyer certifying
resolutions of the boards of directors of the Buyer approving and authorizing
the execution delivery and performance of this Agreement by the Buyer and the
Ancillary Agreements to which the Buyer is a party and the consummation by the
Buyer of the transactions contemplated hereby and thereby (together with an
incumbency and signature certificate regarding the officer(s) signing on behalf
of the Buyer);
(d) The Transition Services Agreement;
(e) All Consents and waivers of any Governmental Authority or other
Third Party that are otherwise required in connection with the execution and
delivery of this Agreement or any Ancillary Agreement, the performance of the
Buyer of its obligations hereunder or thereunder, and the consummation of the
transactions contemplated hereby and thereby, each of which shall be in form and
substance reasonably satisfactory to the Seller;
(f) Amounts payable to the Seller in connection with employee loans,
pursuant to Section 10.4(h).
(g) An opinion of the Buyer's counsel Xxxxx, Xxxxxxxx & Xxxxxxx, LLP
in the form of Exhibit E; and
(h) Such other documents and instruments as may be reasonably
required to consummate the transactions contemplated by this Agreement and the
Ancillary Agreements.
11.4 Prorations as of the Closing Date; Closing Costs.
(a) The Buyer and the Seller agree that the following items
attributable to the Purchased Assets and the operation associated with the
Purchased Assets shall be prorated as of the Closing Date pursuant to the best
information available to the Seller and the Buyer, with the Seller to be
responsible for and to receive the benefit of the same for the period through
the end of the day before the Closing Date, and the Buyer to be responsible for
and to receive the benefit of the same on and after the day constituting the
Closing Date.
(i) real and personal property Taxes and assessments;
(ii) water, sewer and other similar types of Taxes and installments
or special benefit assessments;
(iii) electric, gas, telephone and other utility charges; and
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(iv) charges under maintenance, service and other Contracts and fees
under licenses transferred to or assumed by Buyer.
Buyer and Seller shall use their best efforts to close Seller's accounts for
utilities serving the Purchased Assets and to open Buyer's accounts for such
utilities effective as of the Closing Date.
(b) Closing costs for any lien releases shall be for Seller's account and
paid for by Seller. Buyer shall pay to record the deeds. Any Closing fee charged
by the Title Company to close this transaction shall be equally split between
Buyer and Seller.
ARTICLE XII
TERMINATION
12.1 Termination. This Agreement may be terminated at any time on or prior
to the Closing:
(a) By the mutual written agreement of the Seller and the Buyer;
(b) By the Seller or the Buyer if the Closing shall not have taken
place on or before January 31, 2005; provided, however, that the terminating
party shall not have failed to fulfill any obligation under this Agreement or be
in breach of any representation or warranty under this Agreement, which failure
or breach was the cause of or resulted in the failure of the Closing to occur on
or before such date;
(c) By the Seller or the Buyer, if any court of competent
jurisdiction or other Governmental Authority shall have issued a final and
non-appealable order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby;
(d) By the Seller or the Buyer, if prior to the Closing Date, the
other party is in default or breach in any material respect of any
representation, warranty, covenant, or agreement contained herein, and such
default or breach shall not be cured within fifteen (15) Business Days after the
date notice of such breach is delivered by the party claiming such default or
breach to the party in default or breach; and
(e) As otherwise provided in this Agreement.
In the event of any termination pursuant to this Section 12.1 (other than
pursuant to clause (a)), written notice setting forth the reasons therefore
shall forthwith be given by the terminating party to the other party.
12.2 Effect of Termination. If this Agreement is terminated pursuant to
Section 12.1, all obligations of the parties hereunder shall terminate, except
for the obligations set forth in Articles XIII
September 9, 2004 (Wire)
and XIV and Sections 7.8, 15.2, 15.9, 15.13 and 15.14 which shall survive the
termination of this Agreement, and except that no such termination shall relieve
any party from liability for any breach of this Agreement prior to such
termination.
ARTICLE XIII
INDEMNIFICATION
13.1 Survival; Remedy for Breach.
(a) The representations and warranties contained in this Agreement
shall survive, for limitation purposes only, until the eighteenth (18th) month
anniversary of the Closing Date at which time they shall expire, except that the
representations and warranties set forth in Section 4.14 shall survive the
Closing for a period of ten (10) years thereafter, and any breach of the
Seller's representations and warranties in Sections 4.1, 4.2, 4.6(a) and 4.8
shall survive for the applicable statutory period of limitations.
(b) Any claim for any other breach of this Agreement (that is, other
than a breach of the representations or warranties) or for breach of any
Ancillary Agreement, shall survive until the eighteenth (18) month anniversary
of the Closing Date.
(c) The indemnity obligations contained in this Agreement shall
continue for the applicable period of survival set forth herein. The indemnity
obligations contained in Section 13.2(a) shall survive until the eighteenth
(18th) month anniversary of the Closing Date at which time all indemnity
obligations of the Seller shall expire; provided, however, that (i) the
indemnity obligations contained in Sections 13.2(a)(i) and 13.2(a)(ii) shall
survive so long as each underlying representation, warranty or covenant shall
survive and (ii) the indemnity obligations contained in Section 13.2(a)(vii)
shall survive for a period of five (5) years after the Closing Date. The right
of a party to make a claim for indemnification shall continue for the period of
survival set forth herein; provided, however, that if a claim is timely made,
the claiming party's right to seek indemnification and the other party's
obligation to provide indemnification shall continue until the claim is resolved
or abandoned.
13.2 Indemnification by the Seller.
(a) Subject to Sections 13.1, 13.2(b), and 13.2(c), the Seller
agrees to indemnify, defend and hold harmless the Buyer, its Affiliates and
their respective stockholders, officers, directors, employees, agents,
representatives, successors and assigns (the "Buyer Group") from and against any
and all Losses incurred or suffered by any of them arising out of or relating to
any of the following:
(i) any breach of any representation or warranty made by the
Seller in this Agreement or Ancillary Agreements;
September 9, 2004 (Wire)
(ii) any breach of or failure by the Seller to perform any
covenant or obligation set forth or contemplated in this Agreement or the
Ancillary Agreements;
(iii) the ownership or operation of the Excluded Assets or
Excluded Businesses;
(iv) any Excluded Obligation;
(v) [intentionally left blank]
(vi) any product returns and product warranty claims relating
to the Business and relating to sales occurring prior to the Effective Time to
the extent that same cannot be satisfied by Buyer exchanging defective product
for non-defective product on a 1:1 basis or by making refunds; and
(vii) the operation of the Business by the Seller or the
ownership of the Purchased Assets by the Seller before the Effective Time, other
than Losses to the extent they are (a) based on matters identified on any
schedules to this Agreement, (b) the subject of any representation, warranty or
covenant or obligation made by the Seller in this Agreement or any Ancillary
Agreement, or (c) based on the matters described in Sections 13.2(a)(iii)
through 13.2(a)(vi);
(b) The liability of the Seller to provide indemnification pursuant
to Section 13.2(a) shall be limited as follows: the Seller shall not be liable
with respect to any matter referred to in Section 13.2(a) unless the total of
the aggregate Losses thereunder, plus the aggregate Losses for which the North
Star Companies are liable under Section 13.2(a) of the Steel Xxxxx Purchase
Agreement, exceeds Five Million and no/100s Dollars ($5,000,000.00) (the
"Seller's Basket") in which event the Indemnified Person will be entitled to
make a claim against the Seller to the full extent of such Losses in excess of
the Seller's Basket. The Seller's and the North Star Companies' combined
aggregate liability under Section 13.2(a) of this Agreement and under Section
13.2(a) of the Steel Xxxxx Purchase Agreement shall not exceed the maximum
aggregate amount of Twenty-Five Million and no/l00s Dollars ($25,000,000.00)
(the "Seller's Cap") for both this Agreement and the Steel Xxxxx Purchase
Agreement. For purposes of determining whether the Seller's Basket has been
"filled," the ENTIRE amount of the Loss shall be counted, and not just the
portion that exceeds any applicable threshold of materiality or Material Adverse
Effect. However, only amounts in excess of the Seller's Basket and actually
received by the Buyer shall be counted in determining whether the Seller's Cap
has been reached. Furthermore, Losses attributable to breaches of Sections 4.1
(Existence, Good Standing, Residency), 4.2 (Due Authorization), 4.6(a) (Title),
and 4.8 (Taxes) shall not be subject to either the Seller's Basket or the
Seller's Cap.
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(c) The amount for which the Seller or the North Star Companies
shall be liable with respect to any Loss pursuant to Section 13.2(a) of this
Agreement or pursuant to Section 13.2(a) of the Steel Xxxxx Purchase Agreement
shall be reduced to the extent that the Buyer or any other member of the Buyer
Group shall theretofore have realized any net proceeds recovered from Third
Parties (other than insurers) with respect to such Loss. If the Buyer or any
other Person entitled to indemnity under this Section 13.2(a) shall have
received from the Seller or shall have had paid by the Seller on its behalf an
indemnity payment with respect to a Loss and shall subsequently receive,
directly or indirectly, such proceeds, then the Buyer shall promptly pay to the
Seller the net amount of such proceeds or, if less, the amount of such indemnity
payment. The Buyer shall have no obligation to take any action to file claims
under applicable policies to recover insurance proceeds that may be due to the
Buyer or any other Person in order to mitigate the Seller's obligations
hereunder.
13.3 Indemnification by the Buyer.
(a) Subject to Section 13.1 and 13.3(b) the Buyer agrees to
indemnify, defend and hold harmless the Seller, its Affiliates and their
respective stockholders, officers, directors, employees, agents,
representatives, successors and assigns (the "Seller Group"), from and against
any and all Losses incurred or suffered by them arising out of any of the
following:
(i) any breach of any representation or warranty made by the
Buyer in this Agreement or the Ancillary Agreements;
(ii) any breach of or failure by the Buyer to perform any
covenant or obligation set forth or contemplated in this Agreement or the
Ancillary Agreements; and
(iii) any of the Assumed Obligations.
(b) The liability of the Buyer to provide indemnification pursuant
to Section 13.3(a) shall be limited as follows: the Buyer shall not be liable
with respect to any matter referred to in Section 13.3(a) unless the total of
the aggregate Losses thereunder, plus the aggregate Losses under Section 13.3(a)
of the Steel Xxxxx Purchase Agreement, exceed Five Million and no/100 Dollars
($5,000.000.00) (the "Buyer's Basket") in which event the Indemnified Person
will be entitled to make a claim against the Buyer to the full extent of such
Losses in excess of the Buyer's Basket. The Buyer's combined aggregate liability
under Section 13.3(a) of this Agreement and under Section 13.3(a) of the Steel
Xxxxx Purchase Agreement shall not exceed the maximum aggregate amount of
Twenty-Five Million and no/100 Dollars ($25,000.000.00) (the "Buyer's Cap") for
both this Agreement and the Steel Xxxxx Purchase Agreement. For purposes of
determining whether the Buyer's Basket has been "filled," the ENTIRE amount of
the Loss shall be counted, and not just the portion that exceeds any applicable
threshold of materiality or Material Adverse Effect. However, only amounts in
excess of the Buyer's Basket and actually received
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by the Seller shall be counted in determining whether the Buyer's Cap has been
reached. Furthermore, Losses attributable to breaches of Sections 5.1 (Existence
and Good Standing) and 5.2 (Due Authorization) shall not be subject to either
the Buyer's Basket or the Buyer's Cap.
(c) The amount for which the Buyer shall be liable with respect to
any Loss pursuant to Section 13.3(a) of this Agreement or pursuant to Section
13.3(a) of the Steel Xxxxx Purchase Agreement shall be reduced to the extent
that the Seller or any other member of the Seller Group shall theretofore have
realized any net proceeds recovered from Third Parties (other than insurers)
with respect to such Loss. If the Seller or any other Person entitled to
indemnity under this Section 13.3(a) shall have received or shall have had paid
on its behalf an indemnity payment with respect to a Loss and shall subsequently
receive, directly or indirectly, such proceeds, then the Seller shall promptly
pay to the Buyer the net amount of such proceeds or, if less, the amount of such
indemnity payment. The Seller shall have no obligation to take any action to
file claims under applicable policies to recover insurance proceeds that may be
due to the Seller or any other Person in order to mitigate the Buyer's
obligations hereunder.
13.4 Claims. As soon as is reasonably practicable after becoming aware of
a Third Party Claim with respect to which indemnity may be claimed pursuant to
the terms of this Agreement, the Indemnified Person shall promptly give notice
to the Indemnifying Person of such claim or the commencement of any such Third
Party Claim; provided, however, that the failure of the Indemnified Person to
give notice shall not relieve the Indemnifying Person of its obligations under
this Article XIII except to the extent (if any) that the Indemnifying Person
shall have been actually prejudiced thereby.
13.5 Assumption of Defense. The Indemnifying Person may, at its own
expense assume control of the defense of any Third Party Claim and upon written
acknowledgement to the Indemnified Person that the Indemnified Person is
entitled to indemnification pursuant to Section 13.2 or 13.3, as applicable, for
all Losses arising out of such Third Party Claim, at any time during the course
of any such Third Party Claim. The right to assume the defense thereof; is
conditioned upon the following: (a) the Indemnifying Person's counsel is
reasonably satisfactory to the Indemnified Person, (b) the Indemnifying Person
shall thereafter consult with and update the Indemnified Person upon the
Indemnified Person's reasonable request for such consultation or update from
time to time with respect to such Third Party Claim, and (c) the Third Party
Claim involves only monetary damages and does not seek an injunction or other
equitable relief or does not, in the good faith judgment of the Indemnified
Person, involve a conflict of interest. If the Indemnifying Person assumes such
defense, the Indemnified Person shall have the right (but not the obligation) to
participate in the defense thereof and to employ counsel, at its own expense,
separate from the counsel employed by the Indemnifying Person; provided,
however, that in the event (i) the Indemnified Person reasonably determines that
a conflict of interest exists or (ii) the Indemnifying Person fails to actively
and diligently conduct the defense of such Third Party Claim in the reasonable
September 9, 2004 (Wire)
opinion of the Indemnified Person, then in either such event, the Indemnified
Person may, upon prior written notice, hire separate counsel, at the
Indemnifying Person's expense. Whether or not the Indemnifying Person chooses to
defend or prosecute any such Third Party Claim, all of the parties hereto shall
reasonably cooperate in the defense or prosecution thereof including but not
limited to the provision of information, documents and testimony..
13.6 Settlement or Compromise. Any settlement or compromise made or caused
to be made by the Indemnified Person or the Indemnifying Person, as the case may
be, of any such Third Party Claim shall also be binding upon the Indemnifying
Person or the Indemnified Person, as the case may be, in the same manner as if a
final judgment or decree had been entered by a court of competent jurisdiction
in the amount of such settlement or compromise; provided, however, that (a)
subject to Section 13.7 hereof, no obligation, restriction, course of conduct or
Loss shall be imposed on the Indemnified Person or the Business, as the case may
be, as a result of such settlement without the prior written consent of such
Indemnified Person; and (b) the Indemnifying Person shall not enter into any
such settlement or compromise without obtaining a duly executed unconditional
release of the Indemnified Person from all liability in respect of such Third
Party Claim. The Indemnified Person or the Indemnifying Person, as the case may
be, shall give the other party hereto at least ten (10) days' prior written
notice of any proposed settlement or compromise of any Third Party Claim it is
defending, during which time such other party may reject such proposed
settlement or compromise. In the event of rejection, such other party shall be
obligated to assume the defense of, and full and complete liability and
responsibility for, such Third Party Claim and any and all Losses in connection
therewith in excess of the amount of Losses which the Indemnified Person would
have been obligated to pay under the proposed settlement or compromise. The
foregoing sentence shall not apply if the basis for the rejection was that the
proposed settlement or compromise contained provisions creating non-cash
obligations or restrictions, or imposed limitations on the Indemnified Person's
future course of conduct, or otherwise imposed an injunction upon the
Indemnified Person.
13.7 Failure of Indemnifying Person to Act. In the event that the
Indemnifying Person does not elect to assume the defense of any Third Party
Claim, then (a) the Indemnified Person shall (upon further notice to the
Indemnifying Person) have the right to undertake the defense, compromise or
settlement of such Third Party Claim on behalf of and for the account and risk
of the Indemnifying Person, subject to the Indemnifying Person's election to
assume the defense of such Third Party Claim at any time prior to settlement,
compromise or final determination thereof; and (b) any failure of the
Indemnified Person to defend or to participate in the defense of any such Third
Party Claim or to cause the same to be done, shall not relieve the Indemnifying
Person of its obligations hereunder.
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13.8 Direct Claims. The Indemnifying Person will have a period of thirty
(30) calendar days within which to respond in writing to any claim made in
writing by an Indemnified Person on account of any Loss that does not result
from a Third Party Claim (a "Direct Claim"). If the Indemnifying Person does not
so respond within such thirty (30) day period, the Indemnifying Party will be
deemed to have rejected such claim, in which event the Indemnified Person will
be entitled to pursue such remedies as may be available to the Indemnified
Person.
13.9 Exclusive Remedy/Limitations. Except as provided in Section 15.17,
the rights and remedies set forth in this Article XIII shall, from and after the
Closing constitute the sole and exclusive rights and remedies of (a) the Seller
Group against the Buyer or the Buyer Group; and (b) the Buyer Group against the
Seller or the Seller Group, in each case with respect to the Purchased Assets,
the Assumed Obligations, the Excluded Assets, the Excluded Obligations, the
Business, this Agreement or the Ancillary Agreements. Each member of the Seller
Group, on the one hand, and each member of the Buyer Group on the other hand,
hereby waives, releases and agrees not to assert any other right, whether
arising by statute, common law, equity or otherwise, including without
limitation, contribution or cost recovery claims under Laws relating to the
environment against the Seller, in connection therewith or otherwise relating to
the Purchased Assets, the Assumed Obligations, the Excluded Obligations, the
Excluded Business, the Business, this Agreement or the Ancillary Agreements.
13.10 Maintenance of Privilege. With respect to any Third-Party Claim
subject to indemnification under this Article XIII, the parties agree to
cooperate in such a manner as to preserve in full (to the extent possible) (i)
the confidentiality of all information constituting Confidential Information
pursuant to the Confidentiality Agreement and (ii) the attorney-client and
work-product privileges. In connection therewith, each party agrees that: (a) it
will use its best efforts, in respect of any Third-Party Claim in which it has
assumed or participated in the defense, to avoid production of Confidential
Information (consistent with applicable law and rules of procedure), and (b) all
communications between any party hereto and counsel responsible for or
participating in the defense of any Third-Party Claim shall, to the extent
possible, be made so as to preserve any applicable attorney-client or
work-product privilege.
ARTICLE XIV
DISPUTE RESOLUTION
14.1 Mutual Dispute Resolution. Except as provided for in Section 3.2 of
this Agreement, any dispute or difference arising out of or in connection with
this Agreement or the formation of this Agreement (including, without
limitation, any contested claim for indemnification pursuant to Article XIII
above), shall be first submitted for resolution pursuant to the following
procedure. First, a senior
September 9, 2004 (Wire)
executive officer of each party will meet in person to resolve the dispute
within ten (10) days after written notice of such dispute is provided to the
other parties. If such executive officers are unable to resolve the dispute
within five (5) days after their meeting, the Chief Executive Officers of each
party shall promptly attempt to resolve the dispute. If the Chief Executive
Officers are unable to resolve the dispute within thirty (30) days following the
original notice of such claim or dispute, then any Party may seek any remedy
available.
ARTICLE XV
MISCELLANEOUS
15.1 Disclosure Schedules. The inclusion of any matter on any schedule
shall not constitute an admission by the Seller that such matter is material or
would reasonably be expected to have a Material Adverse Effect. The Seller may
update any schedules referred to in this Agreement prior to or at the Closing by
giving notice to the Buyer in accordance with the terms of this Agreement.
Matters disclosed by the Seller to the Buyer pursuant to any Section of this
Agreement shall be deemed to be disclosed with respect to all Sections of this
Agreement.
15.2 Expenses. Except as otherwise provided herein, each party hereto
shall bear its own expenses with respect to the transactions contemplated
hereby.
15.3 Amendment. This Agreement may only be amended, modified or
supplemented only by a writing signed by the Buyer and the Seller.
15.4 Interpretation. The headings preceding the text of articles and
sections included in this Agreement and the headings to schedules and exhibits
attached to this Agreement are for convenience only and shall not be deemed part
of this Agreement or be given any effect in interpreting this Agreement. The
terms as set forth in this Agreement have been arrived at after mutual
negotiation with the advice of counsel and, therefore, it is the intention of
the parties that its terms may not be construed against any of the parties by
reason of the fact that it was prepared by one of the parties.
15.5 Notices. Any notice, request, instruction or other document to be
given hereunder by a party hereto shall be in writing and shall be deemed to
have been given (a) when received if given in person or by courier or a courier
service; (b) on the date of transmission if sent by facsimile or other wire
transmission (receipt confirmed); excluding electronic mail (c) on the date of
acknowledged receipt if sent by electronic mail, provided that the sender has
received a confirmation of receipt manually transmitted by the recipient of such
notice (that is, an automatic computer-generated acknowledgment of receipt shall
not suffice) or (d) five (5) Business Days after being deposited in the mail,
certified or registered, postage prepaid:
September 9, 2004 (Wire)
If to the Seller, addressed as follows:
General Counsel
Cargill Law Department
X.X. Xxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
00000 XxXxxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000-0000
Telephone No.: (000)000-0000
Facsimile No.: (000)000-0000
If to the Buyer, addressed as follows:
Gerdau Ameristeel Corporation
0000 Xxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxx, XX 00000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
Attention: Xxxx Xxxxx, Chief Executive Officer
xxxxxx@xxxxxxxxxxxxxxxx.xxx
with a copy to:
Xxxxx, Xxxxxxxx & Xxxxxxx, LLP
0000 Xxxxxxxxx Xxxxxx, XX
Suite 3100, Promenade II
Xxxxxxx, XX 00000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
Attention: Xxxxxx Xxx Xxxxxxxx, Esq.
xxxxxxxxx@xxxxxx.xxx
or to such other individual or address or facsimile number as a party hereto may
designate for itself by notice given as herein provided.
15.6 Waivers. The failure of a party hereto at any time or times to
require performance of any provision hereof shall in no manner affect its right
at a later time to enforce the same. No waiver by a party of any condition or of
any breach of any term, covenant, representation or warranty contained in this
Agreement shall be effective unless in writing, and no waiver in anyone or more
instances shall be deemed to be a further or continuing waiver of any such
condition or breach in other instances or a waiver of any other condition or
breach of any other term, covenant, representation or warranty.
15.7 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties and their respective permitted
successors and assigns; provided, however, that neither this Agreement, nor any
Ancillary Agreements (except as may be expressly provided otherwise in
September 9, 2004 (Wire)
any such Ancillary Agreement) nor any right or obligation hereunder or
thereunder may be assigned by any party hereto other than to an Affiliate of
such party without the prior written consent of the other party; provided
further, that no such assignment shall relieve a party from its obligations
under this Agreement or any Ancillary Agreement.
15.8 No Third Party Beneficiaries. Except as otherwise expressly provided
in Article XIII, this Agreement is solely for the benefit of the parties hereto
and no provision of this Agreement shall be deemed to confer upon any other
Person any remedy, claim, liability, reimbursement, cause of action or other
right, including without limitation, rights of any Affected Employee in respect
of any right to contract or any right to employment or continued employment with
the Buyer.
15.9 Publicity. No public announcement or other publicity regarding the
transactions referred to herein shall be made by the Buyer or the Seller or any
of their respective Affiliates, officers, directors, employees, representatives
or agents, without the prior written agreement of the Seller and the Buyer,
respectively. Any announcement shall be agreed to by the parties as to form,
content, timing and manner of distribution or publication. Nothing in this
Section 15.9 shall prevent such parties from discussing such transactions with
those Persons whose Consent, approval, agreement or opinion, as the case may be,
is required for consummation of such transactions. Such parties shall exercise
all reasonable efforts to assure that such Persons keep confidential any
information relating to this Agreement or any agreement, document or instrument
contemplated herein.
15.10 Further Assurances. The Seller and the Buyer agree to cooperate
fully with each other in connection with obtaining the satisfaction of the
conditions set forth in Articles VIII and IX. The Seller and the Buyer agree to
execute and deliver such other documents, certificates, agreements and other
writings and to take such other actions as may be reasonable, necessary or
desirable in order to consummate or implement expeditiously the transactions
contemplated by this Agreement and any agreement, document or instrument
contemplated herein. In the event that a Material Contract not otherwise set
forth on one or more of the schedules referred to in Article II and transferred
to the Buyer at Closing is identified by the Buyer or the Seller subsequent to
Closing, such Material Contract shall be, at the request of the Buyer, deemed a
Purchased Contract and the Seller agrees to comply with Section 2.2 with respect
to such Material Contract.
15.11 Severability. If any provision of this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality or enforceability of
the other provisions hereof shall not be affected thereby, and there shall be
deemed substituted for the provision at issue a valid, legal and enforceable
provision as similar as possible to the provision at issue.
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15.12 Entire Understanding. This Agreement and the Ancillary Agreements
set forth the entire agreement and understanding of the parties hereto with
respect to the transactions contemplated hereby and thereby and supersede any
and all prior agreements, arrangements and understandings among such parties
relating to the subject matter hereof and thereof.
15.13 Applicable Law. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Minnesota
without giving effect to the principles of conflicts of law thereof.
15.14 Submission to Jurisdiction.
(a) Each party hereto irrevocably agrees that the courts of the
County of Xxxx, State of Illinois or the United States of America for the
District of Illinois are to have jurisdiction to settle any claims, differences
or disputes which may arise out of or in connection with this Agreement.
(b) Each party hereto irrevocably waives any objection it may now or
hereafter have to the laying of the venue of any proceedings in any court
referred to in Section 15.14(a) and any claim that any proceedings brought in
any such court have been brought in an inconvenient forum and further
irrevocably agrees that a judgment in any proceedings brought in a court of the
State of Illinois or of the United States of America for the District of
Illinois shall be conclusive and binding upon the parties hereto and may be
enforced in the courts of any other jurisdiction.
15.15 Waiver of Jury Trial. The parties hereby waive any right to trial by
jury in any proceeding arising out of or relating to this Agreement or any
Ancillary Agreement, whether now existing or hereafter arising, and whether
grounded in contract, tort, strict liability or otherwise. The parties agree
that either of them may file a copy of this Section with any court as written
evidence of the knowing, voluntary and bargained for agreement among the parties
irrevocably to waive trial by jury and that any proceeding whatsoever between
them relating to this Agreement or any of the contemplated transactions shall
instead be tried in a court of competent jurisdiction by a judge sitting without
a jury.
15.16 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same original instrument.
15.17 Specific Performance. The parties hereto recognize that if the
Seller refuses to perform under the provisions of this Agreement, monetary
damages alone will not be adequate to compensate the Buyer for its injuries. The
Buyer shall therefore be entitled, in addition to any other remedies that may be
available, to obtain specific performance of the terms of this Agreement.
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15.18 Passage of Title and Risk of Loss. Legal title, equitable title, and
risk of loss in respect of the Purchased Assets will pass to the Buyer at the
Closing, which transfer, once it has occurred, will be deemed effective for tax,
accounting, and other computational purposes as of the Effective Time.
September 9, 2004 (Wire)
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Asset Purchase and Sale Agreement as of the date first above written.
XXXXXXX, XXXXXXXXXXXX
By: <>
---------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice Chairman and Chief Financial Officer
GERDAU AMERISTEEL US INC.
By: <>
---------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
