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EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
BETWEEN
XXXXX INVESTMENT COMPANY, INC.
AND
GENERAL ELECTRIC CAPITAL CORPORATION
RELATING TO THE
CAPITAL STOCK OF
PMG HOLDINGS, INC.
AND
XXXXXXX MEDIA GROUP, INC.
DATED July 14, 1995
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TABLE OF CONTENTS
Page
1. Definitions ............................................... 2
2. Sale of Shares; Purchase Price ............................ 9
3. Representations and Warranties of Seller .................. 10
(a) Organization and Good Standing ............. 10
(b) Capitalization ............................. 11
(c) Subsidiaries ............................... 12
(d) Ownership of Shares and Execution of
Agreement .................................. 13
(e) Financial Statements ....................... 14
(f) No Undisclosed Liabilities ................. 15
(g) No Material Adverse Change;
No Dividends ............................. 16
(h) Taxes ...................................... 16
(i) Patents, Trademarks and Copyrights ......... 18
(j) Real Property; Leases of Real Property ..... 19
(k) Permits; Compliance with Laws .............. 21
(l) Insurance .................................. 21
(m) Material Contracts ......................... 22
(n) Title to Properties;
Absence of Encumbrances .................. 24
(o) Restrictions ............................... 24
(p) Litigation; Consents ....................... 25
(q) Environmental Matters ...................... 26
(r) Collective Bargaining Agreements
and Labor ................................ 27
(s) ERISA ...................................... 28
4. Representations and Warranties of Purchaser ............... 29
(a) Organization and Good Standing ............. 29
(b) Restrictions ............................... 30
(c) Litigation; Consents ....................... 30
(d) Execution and Effect of Agreement .......... 31
(e) Investment Representation .................. 31
(f) Sources of Information ..................... 31
(g) Financing .................................. 32
5. Covenants of Seller........................................ 32
(a) Access to Documents;
Opportunity to Ask Questions .............. 32
(b) Maintenance of Insurance ................... 33
(c) Conduct of Business ........................ 33
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(d) Consents; Conditions Precedent ................ 35
(e) Xxxx-Xxxxx-Xxxxxx Filings ..................... 35
(f) Discharge of Indebtedness ..................... 36
6. Covenants of Purcher........................................ 36
(a) Representations and Warranties ............... 36
(b) Consents; Conditions Precedent ............... 37
(c) Xxxx-Xxxxx-Xxxxxx Filings .................... 37
(d) Employee and Employee Plans .................. 37
(e) Letters of Credit ............................ 37
7. Tax Matters .............................................. 38
(a) Section 338(h)(10) Election .................. 38
(b) Tax Indemnification .......................... 41
(c) Preparation of Tax Returns;
Payment of Taxes ........................... 42
(d) Cooperation with Respect to Tax Rurns......... 46
(e) Tax Audits ................................... 47
(f) Refund Claims ................................ 49
(g) Tax Sharing Agreements ....................... 50
(h) Transfer Taxes................................ 50
(i) Timing of Tax Indemnity Claim ................ 50
8 Conditio Precedent to Purchaser's Obligation................. 51
9 Condition Precedent to Seller's Obligation................... 53
10 Closing Date; Closing........................................ 55
11 No Brokers................................................... 58
12 Survival of Representations and Warranties.................. 59
13 Indemnification of and by Purchaser
and Limitation of Liability ................................ 59
14 Specific Performance........................................ 66
15 Termination................................................. 66
16 Further Assurances.......................................... 67
17 Confidenential Press Releases............................... 68
18 Notices .................................................... 69
19 Entire Agreement............................................ 70
20 Successors.................................................. 71
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Page
21. Section Headings ................................................... 71
22. Applicable Law ..................................................... 71
23. Expenses ........................................................... 72
24. Severability ....................................................... 72
25. Note ............................................................... 72
26. Counterparts ....................................................... 73
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LIST OF SCHEDULES AND EXHIBITS
Schedules
2 Additional Purchase Price
3(c) Subsidiaries
3(h) Tax Matters
3(i) Patents, Trademarks and Copyrights
3(j) Real Property and Material Leases
3(l) insurance Policies
3(m) Material Contracts
3(n) Encumbrances
3(o) Restrictions
3(p) Litigation
3(q) Environmental Matters
3(r) Collective Bargaining Agreements and Labor
3(s) ERISA
6(e) Letters of Credit
8(g) Consents
Exhibits
A-1 Form of Opinion of Associate General Counsel of Seller
A-2 Form of Opinion of Counsel to Seller
B Form of Opinion of Counsel to Purchaser
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STOCK PURCHASE AGREEMENT
AGREEMENT made this 14th day of July, 1995, by and between Xxxxx
Investment Company, Inc. an Arizona corporation (hereinafter referred to as
Purchaser"), and General Electric Capital Corporation, a New York corporation
(hereinafter referred to as "Seller").
WI T N E S S E T H:
WHEREAS, Seller is the owner of (i) 100 shares of Common Stock, par
value $.01 per share (the "Company Shares"), of PMG Holdings, Inc. a Delaware
corporation (the "Company"), which shares constitute all of the issued and
outstanding shares of capital stock of the Company, and (ii) 991 shares of
Common Stock, par value $1.00 per share (the "Group Shares;" the 991 Group
Shares owned by Seller together with the Company Shares are collectively
referred to as the "Shares") of Xxxxxxx Media Group, Inc., a Delaware
corporation ("Group"), which shares together with the nine (9) Group Shares held
by the Company, constitute all of the issued and outstanding shares of capital
stock of Group; and WHEREAS, the Company, through Group and their respective
subsidiaries are in the business of (a) owning, leasing, constructing, posting,
painting and maintaining outdoor advertising displays and (b) renting and
selling space on such outdoor and other out-of-home advertising
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displays, consisting principally of painted bulletins and poster panels
of various sizes to the general public for outdoor and other out-of-home
advertising purposes; and
WHEARAS, Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, the Shares, for the purchase price and upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter contained, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
have the indicated meanings, which meanings shall be applicable, except to the
extent otherwise indicated in a definition of a particular term, both to the
singular and plural forms of such terms. Any agreement referred to below shall
mean such agreement as amended, supplemented and modified from time to time to
the extent permitted by the applicable provisions thereof and by this Agreement.
"Affiliated Group" means any group of corporations with respect to
which a Consolidated Tax Return was, or was required to have been, filed.
"Balance Sheet" shall mean the unaudited Combined Balance Sheet of the
Company, Group and their Subsidiaries as at April 30, 1995.
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"Balance Sheet Date" shall mean April 30, 1995.
"Best Efforts" shall mean reasonable good faith efforts but shall in no
event require the commencement of litigation against any third party or the
payment of any fees to any third party.
"Business Day" shall mean any weekday on which commercial banks in New
York City are open. Any action, notice or right which is to be exercised or
lapses on or by a given date which is not a Business Day may be taken, given or
exercised, and shall not lapse, until the end of the next Business Day.
"Closing" has the meaning specified in Section 10(a) of this Agreement.
"Closing Date" has the meaning specified in Section 11(a) of this
Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Company" has the meaning specified in the first recital of this
Agreement.
"Company Plan" has the meaning specified in Section 3(s)(i) of this
Agreement.
"Confidentiality Agreement" shall mean that certain letter agreement
dated April 24, 1995 between Seller and Purchaser with respect to, among other
things, the
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treatment of confidential information regarding the Company and Group.
"Consolidated Tax-Return" means any Tax Return that was, or should have
been, filed on a consolidated, combined or unitary basis for the purpose of any
type of Tax.
"Encumbrances" shall mean any lien, security interest, mortgage,
pledge, hypothecation, easement or conditional sale or other title retention
agreement; provided, however, that Encumbrances shall not include any Permitted
Encumbrance.
"Environmental Laws" shall mean any federal, state, or local law,
ordinance, regulation, order or permit pertaining to the environment, natural
resources or public health or safety as presently in effect.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Financial-Statements" shall mean (1) the audited Consolidated Balance
Sheets of the Company and its Subsidiaries as at December 31, 1993 and 1994 and
the related audited Consolidated Statements of Earnings and Cash Flows of the
Company and its Subsidiaries for the years then ended, certified by KPMG Peat
Marwick LLP, and (ii) the unaudited Combined Balance Sheet of the Company, Group
and their Subsidiaries as at April 30, 1995 and the related
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unaudited Combined Statements of Earnings and Cash Flows of the
Company, Group and their Subsidiaries for the four month period then ended.
"Group" has the meaning specified in the first recital of this
Agreement.
"Xxxx-Xxxxx-Xxxxxx Act" has the meaning specified in Section SW of this
Agreement.
"Hazardous Materials" shall mean hazardous wastes as presently defined
by the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 609 et.
seq., as amended, and regulations promulgated thereunder and hazardous
substances as presently defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et. seq., as
amended ("CERCLA" or "Superfund") and regulations promulgated thereunder, and
shall also mean every "hazardous material," "hazardous substance," "hazardous
waste," "toxic substances," or petroleum or petroleum products, as defined or
described in every state, local or other federal Environmental Law which is or
was applicable to the operations of the Company, Group and their Subsidiaries.
"Indebtedness" shall mean all obligations which arise from borrowed money or the
deferred purchase price of property or services (other than accounts payable
arising in the ordinary course of business).
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"Material Adverse Effect" shall mean a material adverse effect on the
business, operations, assets or financial condition of the Company, Group and
their Subsidiaries taken as a whole.
"Material Lease" or "Material Leases" has the meaning specified in
Section 3(j) of this Agreement.
"Multiemployer Plan" has the meaning specified in Section 3 (s)(i).
"Permitted Encumbrance" shall mean, (a) Encumbrances imposed by any
governmental authority for Taxes, assessments or charges not yet due and payable
or which are being contested in good faith and by appropriate proceedings if
adequate reserves with respect thereto are maintained on the books of the
Company or its Subsidiaries in accordance with generally accepted accounting
principles; (b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Encumbrances arising in the ordinary course of
business which are not overdue for a period of more than 30 days or which are
being contested in good faith and by appropriate proceedings, if adequate
reserves with respect thereto are maintained on the books of the Company, Group
or their Subsidiaries in accordance with generally accepted accounting
principles; (c) pledges or deposits in connection with worker's compensation,
unemployment insurance and other social security legislation; (d)
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deposits to secure the performance of any or all of the following: bids, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business; (e) easements, rights-of-way,
restrictions and other similar encumbrances on real property incurred in the
ordinary course of business and encroachments (whether or not in the ordinary
course of business) which, in the aggregate, are not substantial in amount, and
which do not in any case materially detract from the value of the property
subject thereto or interfere with the ordinary conduct of the business thereon;
and (f) all the exceptions to title reflected in Schedule 3(n).
"Purchase Price" has the meaning specified in Section 2 of this
Agreement.
"Purchaser" has the meaning specified in the first paragraph of this
Agreement.
"Section 338(h)(10) Election" has the meaning specified in Section
7(a)(i) of this Agreement
"Selected Accounting Firm" has the meaning specified in Section
7(a)(iii) of this Agreement.
"Seller" has the meaning specified in the first paragraph of this
Agreement.
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"Shares" has the meaning specified in the first recital of this
Agreement.
"Subsidiary" shall mean each corporation; partnership or other entity,
fifty percent (50%) or more of the outstanding voting shares of which or other
voting interests or equity interests in the case of a partnership are owned or
controlled directly or indirectly by the Company or Group.
"Tax" or "Taxes" means all taxes, charges, fees, imposts, levies or
other assessments, including, without limitation, all net income, franchise,
profits, gross receipts, capital, sales, use, ad valorem, value added, transfer,
transfer gains, inventory, capital stock, license, withholding, payroll,
employment, social security, unemployment, excise, severance, stamp, occupation,
real or personal property, and estimated taxes, water, rent and sewer service
charges, customs duties, fees, assessments and charges of any kind whatsoever,
together with any interest and any penalties, fines, additions to tax or
additional amounts thereon, imposed by any taxing authority (federal, state,
local or foreign) and shall include any transferee liability in respect of
Taxes.
"Tax Return" means all returns, declarations, reports, estimates,
information returns and statements required to be filed in respect of any Taxes.
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"Transfer Taxes" has the meaning specified in Section 7(h) of this
Agreement.
"WARN" shall mean the Workers Adjustment and Retraining Notification
Act of 1988 and any similar state or local plant closing law.
"Wazaney Litigation" shall mean that certain lawsuit filed pursuant to
a complaint dated August 18, 1994 in the Supreme Court of the State of New York,
County of New York by Xxxxxx Xxxxxxx, an employee of the Company, against the
Company and Seller.
2. Sale of Shares; Purchase Price. On the terms and subject to the
conditions set forth in this Agreement, Seller hereby agrees to sell, assign and
transfer to Purchaser, and Purchaser hereby agrees to purchase from Seller, on
the Closing Date, the Shares.
In consideration of the sale of the Shares, Purchaser shall pay to
Seller on the Closing Date, by wire transfer in U.S. dollars in immediately
available funds, to the account specified by Seller on or prior to the Closing
Date, a purchase price of $518,500,000 plus an amount equal to all purchase
price and advance payments and capital expenditures (excluding maintenance and
other normal course of business expenditures) up to a maximum of $10,000,000
made during the period from May 1, 1995 through the Closing Date by the Company,
Group or any Subsidiary solely in
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connection with contracts existing on the date hereof and listed on Schedule 2
hereto or (subject to Purchaser's prior written approval) entered into after the
date hereof relating to acquisitions of businesses or advertising properties or
relating to new bus shelters or airport advertising locations (collectively, the
"Purchase Price"). On the Closing Date, Seller shall deliver to Purchaser a
certificate as to the amount of all such payments.
3. Representations and Warranties of Seller. Seller hereby represents
and warrants to Purchaser as follows (it being understood that the inclusion of
any item on a Schedule hereto shall not be deemed an acknowledgement that such
item is material or would be reasonably likely to result in a Material Adverse
Effect):
(a) Organization and Good Standing. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York. Each of the Company and Group is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and has
full corporate power and authority to own its properties and carry on its
business as it is now being conducted. Each of the Company and Group is duly
qualified as a foreign corporation and is in good standing under the laws of (i)
each jurisdiction in which it owns real property and (ii) each other
jurisdiction in which
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the conduct of its business or the ownership of its assets requires such
qualification and where a failure to be so qualified would have a Material
Adverse Effect. The copies of the Company's and Group's Certificate of
Incorporation and By-Laws (together with all amendments thereto) which have been
previously delivered or made available to Purchaser are correct and complete.
(b) Capitalization. The authorized capital stock of the Company
consists of (i) 1,000 shares of Common Stock, par value $.01 per share, of which
100 shares are outstanding as of the date hereof, and (ii) 1,000 shares of
Preferred Stock, par value $1.00 per share, of which no shares are outstanding
as of the date hereof. The authorized capital stock of Group consists of (i)
1,000 shares of Common Stock, par value $1.00 per share, of which 1,000 shares
are outstanding as of the date hereof, and (ii) 2,500 shares of Preferred Stock,
par value $1.00 per share, of which no shares are outstanding as of the date
hereof. All of the outstanding shares of the Company and Group have been validly
issued and are fully paid and non-assessable. No shares of Common Stock or
Preferred Stock are held by either the Company or Group as treasury stock. There
is no existing option, warrant, call, commitment or other security or agreement
of any kind to which the Company or Group is a party requiring, and there are no
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convertible securities of the Company or Group outstanding which upon conversion
would require, the issuance of any additional shares of capital stock of the
Company or Group or other securities convertible into shares of capital stock or
any debt or equity security of the Company or Group of any kind.
(c) Subsidiaries. Neither the Company nor Group has any Subsidiaries,
except as listed on Schedule 3(c) hereto. The authorized and outstanding capital
stock or equity interests of each Subsidiary is as set forth on Schedule 3(c)
hereto. All of such outstanding shares or equity interests have been validly
issued and are fully paid, non-assessable and, except as set forth on Schedule
3(c), owned by the Company or Group as indicated thereon, free and clear of any
and all Permitted Encumbrances and any and all other Encumbrances, other than
the pledge of such shares to Seller, which will terminate on the Closing Date.
No shares of capital stock are held by any Subsidiary as treasury stock. There
is no existing option, warrant, call, commitment or other security or agreement
of any kind to which any Subsidiary is a party requiring, and there are no
convertible securities of any Subsidiary outstanding which upon conversion would
require, the issuance of any additional shares of capital stock or equity
interests of any Subsidiary or other securities convertible into shares of
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capital stock or any other debt or equity security of any kind of any
Subsidiary. Each Subsidiary is duly incorporated or organized and validly
existing in good standing under the laws of its respective state of
incorporation or organization. Each Subsidiary has all requisite corporate or
partnership power and authority to own its properties and carry on its business
as presently conducted. Each Subsidiary is duly qualified as a foreign
corporation or partnership and is in good standing under the laws of (i) each
jurisdiction in which it owns real property and (ii) each other jurisdiction in
which the conduct of its business or the ownership of its assets requires such
qualification and where a failure to be so qualified would have a Material
Adverse Effect. There have been delivered or made available to Purchaser
complete and correct copies of the Certificate of Incorporation and By-Laws
(together with all amendments thereto) or other organizational documents of
non-corporate Subsidiaries of each Subsidiary.
(d) Ownership of Shares and Execution of Agreement. Seller is the
record and beneficial owner of the Shares, free and clear of any and all
Permitted Encumbrances and any and all other Encumbrances. Seller has the
corporate power and authority to enter into this Agreement and to sell,
transfer, assign and deliver the Shares as provided in this Agreement, and such
delivery will convey to
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Purchaser good and marketable title to the Shares, free and clear of any and all
Permitted Encumbrances and any and all Encumbrances. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of
Seller. This Agreement has been duly executed and delivered by Seller and
constitutes the legal, valid and binding obligation of Seller, enforceable
against it in accordance with its terms. The Group Shares not owned by Seller
are owned of record and beneficially by the Company, free and clear of any and
all Permitted Encumbrances and any and all other Encumbrances, other than the
pledge of such Group Shares to Seller, which will terminate on the Closing Date.
(e) Financial Statements. Seller has delivered to Purchaser copies of
the Financial Statements. Each of the Financial Statements is in accordance with
the books and records of the Company, Group and their Subsidiaries as of the
dates and for the periods indicated, has been prepared in accordance with
generally accepted accounting principles and in conformity with the practices
consistently applied by the Company and Group in the immediately preceding
fiscal periods, and, with respect to the unaudited interim financial statements,
subject to normal year-end audit adjustments and the absence of
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footnotes, presents fairly in all material respects the financial position,
results of operations and cash flows of the Company, Group and their
Subsidiaries as at the dates and for the periods indicated.
(f) No Undisclosed Liabilities. As at the Balance Sheet Date, neither
the Company, Group nor any Subsidiary had any Indebtedness or liabilities
(whether accrued, absolute, contingent or otherwise, and whether due or to
become due) which is not shown on the Balance Sheet or disclosed herein or in a
schedule hereto or in any document referred to in a schedule or in the Financial
Statements (including the footnotes thereto), which would normally be disclosed
on a balance sheet (including its footnotes) prepared in accordance with
generally accepted accounting principles if such Indebtedness or liabilities had
been known at the time of the balance sheet's preparation, and which undisclosed
Indebtedness or Liabilities are reasonably likely to result in a Material
Adverse Effect. Except as set forth in the Balance Sheet, neither the Company,
Group nor any Subsidiary has outstanding any material Indebtedness or liability
which would normally be disclosed on a balance sheet (including its footnotes)
prepared in accordance with generally accepted accounting principles if such
Indebtedness or liabilities had been known at the time of the balance sheet's
preparation, other than those incurred since
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the Balance Sheet Date in the ordinary course of business or disclosed herein or
in a schedule hereto or in any document referred to in a schedule or in the
Financial Statements (including the footnotes thereto), which is reasonably
likely to result in a Material Adverse Effect.
(g) No Material Adverse Change: No Dividends. Since the Balance Sheet
Date there has been no material adverse change in the business, operations,
assets or financial condition of the Company, Group and their Subsidiaries taken
as a whole. Since the Balance Sheet Date no dividends or distributions have been
declared or paid on or made with respect to the shares of capital stock or other
equity interests of the Company, Group or the Subsidiaries nor have any such
shares been repurchased or redeemed, other than dividends or distributions paid
to the Company, Group or a Subsidiary.
(h) Taxes. (i) Except as set forth on Schedule 3(h) hereto, (A) all
material Tax Returns required to be filed by or on behalf of the Company, Group
or the Subsidiaries or any Affiliated Group of which the Company, Group or the
Subsidiaries is or was a member have been filed with the appropriate taxing
authorities in all jurisdictions in which such Tax Returns are required to be
filed, and all amounts shown on such Tax Returns (including interest and
penalties) as due from the Company, Group or the
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Subsidiaries either directly, as part of a Consolidated Tax Return, or
otherwise, have been fully and timely paid or are adequately provided for on the
Balance Sheet; (B) all such Tax Returns, insofar as they relate to the Company,
Group or the Subsidiaries, are true, correct and complete in all material
respects; and (C) no waivers of statutes of limitation have been given or
requested with respect to the Company, Group or the Subsidiaries in connection
with any Tax Returns covering the Company, Group or the Subsidiaries.
(ii) Except as set forth on Schedule 3(h) hereto, all deficiencies
asserted or assessments made as a result of any examinations by the Internal
Revenue Service or any other taxing authority of the Tax Returns of or covering
the Company, Group or the Subsidiaries have been fully paid, and there are no
unpaid deficiencies asserted or assessments made by any taxing authority against
the Company, Group or the Subsidiaries and there are no audits currently pending
or issues raised in writing since January 1, 1993, by any taxing authority in
connection with Tax Returns of the Company, Group or their Subsidiaries.
(iii) Except as set forth on Schedule 3(h) hereto, neither the Company,
Group nor the Subsidiaries, nor any other person on their behalf has filed a
consent pursuant to Section 341(f) of the Code or agreed to have Section
341(f)(2) of the Code apply to any disposition of a
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subsection (f) asset (as such term is defined in Section 341(f)(4) of the Code)
owned by the Company, Group or the Subsidiaries.
(iv) None of Seller, the Company, Group or the Subsidiaries is a
foreign person within the meaning of Section 1445 of the Code.
(v) Except for the Affiliated Group of which they are now members,
since January 1, 1993 neither the Company nor Group has been a member of an
Affiliated Group of companies under Section 1504 of the Code.
(vi) Except as set forth on Schedule 3(h) hereto, no property owned by
the Company, Group or the Subsidiaries (A) is property required to be treated as
being owned by another person pursuant to the provisions of Section 168(f)(8) of
the Internal Revenue Code of 1954, as amended and in effect immediately prior to
the enactment of the Tax Reform Act of 1986, (B) constitutes "tax-exempt use
property" within the meaning of Section 168(h)(1) of the Code or (C) is
tax-exempt bond financed property within the meaning of Section 168(g) of the
Code.
(i) Patents, Trademarks and Copyrights. Schedule 3(i) hereto contains
a complete and correct list of each material patent, trademark, trade name,
service xxxx and copyright owned or used by the Company, Group or a Subsidiary
and pending applications therefor, and each
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license or other agreement relating thereto. Except as set forth on Schedule
3(i) hereto, each of the foregoing is owned by the party shown on such Schedule
as owning the same, free and clear of all Encumbrances. To Seller's knowledge,
there have been no claims asserted in writing, which are still pending, that any
of the foregoing is invalid or conflicts with the asserted rights of others,
which would reasonably be likely to result in a Material Adverse Effect. The
Company, Group and each Subsidiary possess all patents, patent licenses, trade
names, trademarks, service marks, brand marks, brand names, copyrights,
know-how, formulas and other proprietary and trade rights necessary for the
conduct of its respective business as now conducted, except for those the
absence of which would not be reasonably likely to result in a Material Adverse
Effect.
(j) Real Property: Leases of Real Property. Except as set forth on
Schedule 3(j) hereto, neither the Company, Group nor their Subsidiaries owns any
real property. Schedule 3(j) hereto contains a complete and correct list in all
material respects of all leases, sub-leases, license agreements or other rights
of possession or occupancy of real property to which the Company, Group or any
Subsidiary is a party (as tenant, occupier or possessor) pursuant to which the
current net annual rent payable by the Company, Group or any Subsidiary
currently exceeds $50,000
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(each such lease or agreement, a "Material Lease" and collectively the "Material
Leases"). All of the Material Leases are in full force and effect except for the
item on Schedule 3(p) relating to Metro/Westpark Corridor. Complete and correct
copies of each Material Lease have been furnished or made available to
Purchaser. Except as disclosed on Schedule 3(j) hereto, no consent is required
of any landlord or other third party to any Material Lease to consummate the
transactions contemplated hereby, and upon consummation of the transactions
contemplated hereby, each Material Lease will continue to entitle the Company,
Group or their Subsidiaries, as the case may be, to the use and possession of
the real property specified in such Material Leases and for the purposes for
which such real property is now being used by the Company, Group or their
Subsidiaries, respectively. Except as set forth in such Schedule, neither the
Company, Group nor their Subsidiaries is in default beyond any applicable notice
or grace period or has received written notice of default still outstanding on
the date hereof under any such Material Lease, and to Seller's knowledge, on the
date hereof, there exists no uncured default thereunder by any third party,
which in either case would be reasonably likely to result in a Material Adverse
Effect. All material Leases are in full force and effect and are enforceable
against the parties thereto in
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accordance with their terms subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors, rights and remedies generally, and subject, as to enforceability, to
general principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity) (the "Bankruptcy and Equity Exceptions").
(k) Permits; Compliance with-Laws. The Company, Group and their
Subsidiaries have all necessary permits, licenses and governmental
authorizations required for the ownership or occupancy of their respective
properties and assets and the carrying on of their respective business, except
where the failure to have any such permit, license or governmental authorization
would not be reasonably likely to result in a Material Adverse Effect.
(1) Insurance. Schedule 3(1) hereto contains a complete and correct
list in all material respects of all policies of insurance of any kind or nature
covering the Company, Group or their Subsidiaries, including, without
limitation, policies of life, fire, theft, employee fidelity and other casualty
and liability insurance, and such policies are in full force and effect.
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Complete and correct copies of each such policy have been furnished or made
available to Purchaser.
(m) Material Contracts. Except as listed in Schedule 3(m) hereto or any
other schedule hereto, and except for loan agreements, pledge agreements and
guarantees with Seller, which will be cancelled at Closing, neither the Company,
Group nor any Subsidiary is a party to any (i) material contract not made in the
ordinary course of business; (ii) contract for the employment of any officer or
employee; (iii) advertising agreement with a remaining term in excess of one
year and a payment obligation in excess of $50,000; (iv) franchise,
distributorship or sales agency agreement; (v) contract for the future purchase
of materials, supplies, services, merchandise or equipment not capable of being
fully performed or not terminable within a period of one year from the date
hereof or in excess of normal operating requirements; (vi) agreement for the
sale or lease of any of its assets other than in the ordinary course of
business; (vii) contract or commitment for capital expenditures in excess of
$100,000; (viii) mortgage, pledge, conditional sales contract, security
agreement, factoring agreement, or other similar agreement with respect to any
of its real or personal property; (ix) lease of machinery or equipment involving
annual payments in excess of $100,000; (x) agreement with a labor union or labor
association; (xi)
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loan agreement, promissory note issued by it, guarantee, subordination or
similar type of agreement; (xii) stock option, retirement, severance, pension,
bonus, profit sharing, group insurance, medical or other fringe benefit plan or
program providing employee benefits; (xiii) consulting agreement involving
annual payments in excess of $50,000; or (xiv) municipal or other governmental
franchise agreements. Complete and correct copies of each such agreement have
been furnished or made available to Purchaser. Except as set forth in Schedule
3(m) hereto, the Company, Group and their Subsidiaries have performed all of the
obligations required to be performed by them to date and are not in default
under any of the agreements, leases, contracts or other documents to which they
are a party listed on Schedule 3(m), other than for those failures to perform
and defaults which would not be reasonably likely to result in a Material
Adverse Effect. Except as set forth in Schedule 3(m) hereto, to Seller's
knowledge, no party with whom the Company, Group or their Subsidiaries has such
a scheduled agreement is in default thereunder, which default would be
reasonably likely to result in a Material Adverse Effect. All such scheduled
agreements are in full force and effect and are enforceable against the parties
thereto in accordance with their terms subject to the Bankruptcy and Equity
Exceptions, as defined in Section 3(j) hereof.
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Except as disclosed herein or in Schedule 3(m) hereto, neither the
Company, Group nor their Subsidiaries is a party to any non-compete or similar
agreement which restricts in any material way the current operation of their
businesses taken as a whole.
(n) Title to Properties; Absence of Encumbrances. The Company, Group
and their Subsidiaries have good and marketable title to all of their respective
properties and assets shown as owned on the Balance Sheet (except for assets
disposed of in the ordinary course of business since the Balance Sheet Date or
as set forth in Schedule 3(n) hereto), free and clear of any and all
Encumbrances, except as set forth in Schedule 3(n) hereto or except for
Permitted Encumbrances.
(o) Restrictions. Except as set forth in Schedules 3(j) or 3(o) hereto
and except for leases which do not constitute Material Leases, neither the
execution or delivery of this Agreement nor the consummation of the transactions
contemplated hereby, will conflict with or result in a breach of, or give rise
to a right of termination of, or accelerate the performance required by, any
terms of any agreement to which the Company, Group or their Subsidiaries is a
party, or constitute a default thereunder, or result in the creation of any
Encumbrance upon any of their respective assets, except for such
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conflicts, breaches, rights of termination or acceleration, defaults
and Encumbrances that in the aggregate would not be reasonably likely to result
in a Material Adverse Effect, nor will it violate any of the provisions of their
respective Certificates of Incorporation or By-Laws or, as to non-corporate
Subsidiaries, organizational documents, or violate any judgment or decree by
which they or Seller is bound.
(p) Litigation; Consents. There is no action, suit, proceeding or
formal governmental inquiry or investigation pending against Seller, the
Company, Group or their Subsidiaries which seeks to restrain or prohibit or
otherwise challenges the consummation, legality or validity of the transactions
contemplated hereby. Except as disclosed in Schedule 3(p) hereto and the Wazaney
Litigation, there is no action, suit, proceeding or formal governmental inquiry
or investigation pending against the Company, Group or the Subsidiaries which is
reasonably likely to result in a Material Adverse Effect. Except as set forth in
Section 5(e) hereof, and except with respect to local governmental permits or
licenses, no consent, approval or authorization of any governmental authority on
the part of Seller, the Company, Group or the Subsidiaries is required in
connection with the execution and delivery of
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this Agreement or the consummation of any of the transactions contemplated
hereby.
(q) Environmental Matters. Except as disclosed in Schedule 3(g) hereto,
to Seller's knowledge (i) the operations of the Company, Group and their
Subsidiaries are now and since January 1, 1993 have been in compliance with
applicable Environmental Laws, except for such noncompliance which is not
reasonably likely to result in a Material Adverse Effect, (ii) neither the
Company, Group nor their Subsidiaries is subject to any pending or threatened
judicial or administrative proceeding alleging the violation of any
Environmental Law, which such proceeding is reasonably likely to result in a
Material Adverse Effect, (iii) neither the Company, Group nor their Subsidiaries
has received any written notice from any governmental authority that it is a
potentially responsible party at any Superfund site; (iv) neither the Company,
Group nor their Subsidiaries has disposed of or released Hazardous Materials
(nor are underground storage tanks present) on, in or at any real property owned
or leased by the Company, Group or their Subsidiaries in any quantity which is
reasonably likely to result in a Material Adverse Effect and (v) since January
1, 1993 the Company, Group and their Subsidiaries have not disposed of or
released any Hazardous Materials in or at any
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other real property in any quantity which is reasonably likely to result in a
Material Adverse Effect.
(r) Collective Bargaining Agreements and Labor. (i) Except as set forth
in Schedule 3(r) hereto, none of the Company, Group or the Subsidiaries is a
party to any labor or collective bargaining agreement and there are no labor or
collective bargaining agreements which pertain to employees of the Company,
Group or the Subsidiaries.
(ii) Except as set forth in Schedule 3(r) hereto, there are no pending
strikes, work stoppages, slowdowns, lockouts, arbitrations or other material
labor disputes against the Company, Group or the Subsidiaries which individually
would be reasonably likely to result in a Material Adverse Effect.
(iii) Except as set forth in Schedule 3(r) hereto, there are no pending
complaints, charges or claims against the Company, Group or the Subsidiaries
filed with any public or governmental authority, arbitrator or court based upon
the employment or termination of employment by the Company, Group or the
Subsidiaries of any individual, which individually would be reasonably likely to
result in a Material Adverse Effect.
(iv) Except as set forth in Schedule 3(r) hereto, the Company, Group
and the Subsidiaries are in compliance with all laws, regulations and orders
relating to
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the employment of labor, including all such laws, regulations and orders
relating to wages, hours, WARN, collective bargaining, discrimination, civil
rights, safety and health, workers' compensation and the collection and payment
of withholding and/or social security taxes and any similar tax, except for such
non-compliance as would not be reasonably likely to result in a Material Adverse
Effect.
(s) ERISA. (i) Schedule 3(s) hereto sets forth all material, written
"employee benefit plans", as defined in Section 3(3) of ERISA, maintained by the
Company, Group or the Subsidiaries or to which the Company, Group or the
Subsidiaries contributed or are obligated to contribute thereunder for current
or former employees of the Company, Group or the Subsidiaries (the "Company
Plans"). Schedule 3(s) hereto separately identifies each Company Plan which is a
multiemployer plan, as defined in Section 3(37) of ERISA ("Multiemployer Plan").
(ii) True, correct and complete copies of the following documents, with
respect to each of the Company Plans (other than the Multiemployer Plans), have
been made available or delivered to Purchaser by Seller, the Company, Group or
the Subsidiaries: (i) any plans and related trust documents, and amendments
thereto; (ii) the most recent Forms 5500; (iii) the last Internal Revenue
Service determination letter, if applicable; (iv) summary
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plan descriptions; and (v) the last actuarial valuation if the plan is a
"defined benefit plan" as defined in Section 3(35) of ERISA.
(iii) The Company Plans intended to qualify under Section 401 of the
Code and the trusts maintained pursuant thereto are exempt from federal income
taxation under Section 501 of the Code, and nothing has occurred with respect to
the operation of the Company Plans which could cause the loss of such
qualification or exemption or the imposition of any liability, penalty or tax
under ERISA or the Code which is reasonably likely to result in a Material
Adverse Effect.
(iv) The Company Plans have been maintained in accordance with their
terms and with all provisions of the Code and ERISA (including rules and
regulations thereunder) and other applicable federal and state laws and
regulations, except where the failure to so maintain would not be reasonably
likely to result in a Material Adverse Effect.
4. Representations and Warranties of Purchaser. Purchaser hereby represents
and warrants to Seller as follows:
(a) Organization and Good Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Arizona,
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and has full corporate power and authority to own its properties and carry on
its business as it is now being conducted.
(b) Restrictions. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not conflict with or
result in a breach of any terms of any agreement to which Purchaser is a party,
except for such conflicts and breaches that in the aggregate would not have a
material adverse effect on the Purchaser's ability to consummate the
transactions contemplated by this Agreement, nor will it violate any of the
provisions of Purchaser's Certificate of Incorporation or By-Laws.
(c) Litigation: Consents. There is no action, suit, proceeding or
formal governmental inquiry or investigation pending against Purchaser which
seeks to restrain or prohibit or otherwise challenges the consummation, legality
or validity of the transactions contemplated hereby, and, except as set forth in
Section 6(c) hereof, no consent, approval or authorization of any governmental
authority on the part of Purchaser is required in connection with the execution
and delivery of this Agreement or the consummation of any of the transactions
contemplated hereby.
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(d) Execution and Effect Of Agreement. Purchaser has the corporate
power and authority to enter into this Agreement, and the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of
Purchaser. This Agreement has been duly executed and delivered by Purchaser and
constitutes the legal, valid and binding obligation of Purchaser, enforceable
against it in accordance with its terms.
(e) Investment Representation. Purchaser possesses such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of its investment hereunder. Purchaser is acquiring the
Shares for its own account, for investment purposes only and not with a view to
the distribution thereof. Purchaser is an "accredited investor" as defined in
Regulation D under the Securities Act of 1933, as amended.
(f) Sources of Information. Purchaser acknowledges that it has
conducted its own investigation of the business and affairs of the Company,
Group and their Subsidiaries, that the Shares have not been registered under the
Securities Act of 1933, as amended, or any state securities or "Blue Sky" laws;
and that it has received all
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the information that it requested from Seller concerning the Company, Group and
the Subsidiaries.
(g) Financing. Purchaser has, or has access to, sufficient funds and
financing to pay the Purchase Price on the Closing Date.
5. Covenants of Seller. Seller hereby covenants and agrees that:
(a) Access to Documents; Opportunity to Ask Ouestions. From and after
the date hereof and until the Closing Date, Seller shall cause the Company,
Group and the Subsidiaries to make available for inspection by Purchaser or its
representatives, upon reasonable advance notice and during normal business
hours, the Company's, Group's and the Subsidiaries' corporate or comparable
records, books of account, contracts and all other documents reasonably
requested by Purchaser, its managerial employees, counsel and auditors in order
to permit Purchaser and such representatives to make reasonable inspection and
examination of the business and affairs of the Company, Group and the
Subsidiaries. Seller shall further cause the managerial employees, counsel and
regular independent certified public accountants of the Company, Group and the
Subsidiaries to be available upon reasonable advance notice to answer questions
of Purchaser's representatives concerning the business and affairs of the
Company, Group
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and the Subsidiaries and shall further cause them to make available all relevant
books and records in connection with such inspection and examination.
(b) Maintenance of Insurance. From and after the date hereof and
until the Closing Date, Seller shall cause the Company, Group and the
Subsidiaries to use their Best Efforts to maintain in full force and effect all
of their presently existing insurance coverage, or insurance comparable to such
existing coverage.
(c) Conduct of Business. From and after the date hereof and until the
Closing Date, Seller shall cause the business of the Company, Group and the
Subsidiaries to be conducted in the ordinary course, consistent with the present
conduct of their business. During such period of time, except upon the prior
written consent of Purchaser, Seller shall not permit the Company, Group or the
Subsidiaries to: (a) amend its Certificate of Incorporation or By-Laws or
comparable organizational documents, (b) issue any additional shares of capital
stock or issue, sell or grant any option or right to acquire or otherwise
dispose of or commit to dispose of any of its authorized but unissued capital
stock or other corporate securities, (c) declare or pay any dividends or make
any other distribution in cash or property on its capital stock or other equity
interests, except to the Company, Group or a Subsidiary, (d) repurchase
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or redeem any shares of its stock or other equity interests, (e) voluntarily
incur any obligation or liability, except obligations and liabilities incurred
in the ordinary course of business, (f) enter into any employment agreement or
become liable for any bonus, profit-sharing or incentive payment to any of its
officers or directors, or otherwise materially change personnel policies,
compensation programs or benefit plans, except pursuant to presently existing
plans, arrangements or agreements disclosed herein or in a schedule hereto or in
the ordinary course of business, (g) mortgage, pledge, or otherwise encumber any
part of its assets, tangible or intangible, except Permitted Encumbrances, (h)
sell, transfer or acquire any properties or assets, tangible or intangible,
other than in the ordinary course of business, and except as set forth in
Schedule 3(n) hereto, (i) make any material changes in its customary method of
operations, including its accounts receivable collection practices (and will not
sell or otherwise transfer accounts receivable), marketing and pricing policies,
and maintenance of business premises, fixtures, furniture and equipment, (j)
modify, amend or cancel any of its existing leases or enter into any contracts,
agreements, leases or understandings, other than in the ordinary course of
business, or enter into any loan agreements, (k) enter into any collective
bargaining
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agreement, (1) merge or consolidate with any corporation, acquire control or,
except in the ordinary course of business, acquire any capital stock or other
securities of any other corporation or business entity, or take any steps
incident to or in furtherance of any such actions whether by entering into an
agreement providing therefor or otherwise, or (m) take any other action which
would cause any of the representations and warranties made by Seller in this
Agreement not to be true and correct in all material respects on and as of the
Closing Date with the same force and effect as if such representations and
warranties had been made on and as of the Closing Date.
(d) Consents. Conditions Precedent. From and after the date hereof and
until the Closing Date, Seller shall use its Best Efforts to obtain the consents
of those parties indicated on Schedule 8(g) in connection with the transactions
contemplated hereby and to cause the conditions precedent to the consummation of
the transactions contemplated hereby to be satisfied.
(e) Xxxx-Xxxxx-Xxxxxx Filings. Seller shall, and shall cause the
Company and Group to, make all required filings as promptly as possible with the
Federal Trade Commission and the U.S. Department of Justice-Antitrust Division
pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 (the
"Xxxx-Xxxxx-Xxxxxx
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Act"), and shall cause the Company and Group to, cooperate with Purchaser in
connection with such filings.
(f) Discharge of Indebtedness. During the period between the date
hereof and the Closing Date, Group may incur Indebtedness from Seller and pay
Indebtedness owing to Seller and interest thereon. On the Closing Date and prior
to the Closing, (i) Seller shall contribute to the capital of Group any
Indebtedness of Group then owing to Seller and shall release its liens on the
stock of Group and the Subsidiaries and any guarantees of such Indebtedness;
(ii) any tax sharing payment obligations owed by Seller to, or owed to Seller
by, the Company, Group or any Subsidiary shall be cancelled, and (iii) any
amounts owed to Seller by the Company or Group relating to Seller's prior
ownership of equity of the Company or Group shall be cancelled.
6. Covenants of Purchaser. Purchaser hereby covenants and agrees that:
(a) Representations and Warranties. From and after the date hereof and
until the Closing Date, Purchaser will not take any action which would cause any
of the representations and warranties made by it in this Agreement not to be
true and correct in all material respects on and as of the Closing Date with the
same force and effect as if such representations and warranties had been made on
and as of the Closing Date.
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(b) Consents; Conditions Precedent. From and after the date hereof and
until the Closing Date, Purchaser shall use its Best Efforts to obtain any
consents required pursuant to Schedules 3(j) and 3(o) hereto in connection with
the transactions contemplated hereby and to cause the conditions precedent to
the consummation of the transactions contemplated hereby to be satisfied.
(c) Xxxx-Xxxxx-Xxxxxx Filings. Purchaser shall make all required
filings as promptly as possible with the Federal Trade Commission and the U.S.
Department of Justice-Antitrust Division pursuant to the Xxxx-Xxxxx-Xxxxxx Act,
and it shall cooperate with Seller, the Company and Group in connection with
such filings.
(d) Employee and Employee Plans. As of the Closing Date, any employee
of the Company, Group or the Subsidiaries shall remain an employee of the
Company, Group or the Subsidiaries, as the case may be, for a period of at least
thirty (30) days following the Closing, and Purchaser shall cause the Company,
Group and the Subsidiaries to continue to be bound by any collective bargaining
or other employment or consulting agreement or arrangement to which it is a
party with respect to any such employee.
(e) Letters of Credit. As of the Closing Date, Purchaser shall arrange
for all letters of credit issued for the benefit of the Company, Group or the
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Subsidiaries and guaranteed by Seller or an affiliate thereof either as
guarantor or account party (a list of which as of the date hereof is set forth
in Schedule 6(e) hereto) and which are outstanding on the Closing Date, to be
returned for cancellation or for such guaranty obligations to be terminated and
released in form and substance acceptable to Seller or, if despite Purchaser's
Best Efforts the foregoing cannot be done, Purchaser shall arrange for Seller to
receive a letter of credit issued for its benefit in form and substance
reasonably acceptable to it as security for any continuing guaranty obligations.
7. Tax Matters.
(a) Section 338(h)(10) Election.
(i) Purchaser will join with Seller in making an election under
Sections 338(g) and 338(h)(10) of the Code and the Treasury Regulations
promulgated under the Code (the "Treasury Regulations") and any corresponding or
similar elections under state, local or foreign Tax law (collectively, a
"Section 338(h)(10) Election") with respect to the purchase and sale of the
Shares hereunder (including with respect to the stock of the Subsidiaries).
Seller and Purchaser shall report, in connection with the determination of
income, franchise or other Taxes measured by net income, the transactions being
undertaken pursuant to this Agreement in a manner consistent with the Section
338(h)(10) Election.
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(ii) Seller shall be responsible for the preparation and filing of all
forms and documents required in connection with the Section 338(h)(10) Election.
To the extent properly prepared by Seller, and timely delivered to Purchaser,
Purchaser shall execute and return to Seller such documents or forms as are
reasonably requested and are required by any Tax laws to complete properly the
Section 338(h)(10) Election no later than April 2, 1996. For the purpose of
making the Section 338(h)(10) Election, on or prior to the Closing Date, Seller
and Purchaser each shall execute two copies of Internal Revenue Service Form
8023-A.
(iii) Purchaser, no later than March 1, 1996, shall provide Seller with
a valuation statement reflecting, as of the Closing Date, the fair market values
of all of the assets and the liabilities and obligations of the Company, Group
and the Subsidiaries. Purchaser and Seller shall file, and shall cause members
of their respective Affiliated Groups to file, all Tax Returns and statements,
forms and schedules in connection therewith in a manner consistent with such
valuations and shall take no position contrary thereto unless required to do so
by applicable Tax laws and after thirty (30) days, prior notice to the other
party. Seller shall have the right to review and approve (which approval shall
not be unreasonably
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withheld) any appraisal upon which such valuations are based and any
such forms and schedules relating to such valuations, prior to the filing
thereof. Any disputes regarding the valuation statement or the preparation,
execution or filing of the forms and documents required in connection with
making the Section 338(h)(10) Election shall be resolved in an arbitration to
be conducted by Ernst & Young (New York office) or if such accounting firm is
unable or declines to serve, such other accounting firm mutually selected by
Purchaser and Seller (the "Selected Accounting Firm"), whose fees shall be
borne equally by the parties. Each of the parties to this Agreement shall be
bound by the decision of the Selected Accounting Firm rendered in such
arbitration.
(iv) To the extent permitted by state, local or foreign Tax laws, the
principles and procedures of this Section 7(a) shall also apply with respect to
an agreed valuation and a Section 338(h)(10) Election under state, local or
foreign law. Seller and Purchaser shall make any election similar to a Section
338(h)(10) Election which is optional under any state, local or foreign law, and
shall cooperate and join in any election made by the Company, Group, the
Subsidiaries or members of their Affiliated Group to effect such an election so
as to treat the transactions
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contemplated herein as a sale of assets for state, local and foreign income Tax
purposes.
(b) Tax indemnification.
(i) Seller shall be liable for, shall pay or cause to be paid and
shall indemnify and hold Purchaser and its Affiliates including after the
Closing the Company, Group and the Subsidiaries and all of their officers,
directors and agents harmless from and against any and all losses, claims,
damages, liabilities, costs, expenses (including reasonable attorneys' fees and
the cost and expenses of enforcing such indemnification against Seller),
interest and penalties, if any, arising out of or based upon or for or in
respect of each of the following: (a) except as otherwise provided in Section
7(h), any and all Taxes with respect to the Company, Group or the Subsidiaries
for any taxable period ending on or before the Closing Date (including any Taxes
arising as a result of the Section 338(h)(310) Election); (b) any and all Taxes
resulting solely from the Company, Group or the Subsidiaries having been
included in any consolidated, combined, or unitary Tax Return that included the
Company, Group or the Subsidiaries for any taxable period (or portion thereof)
ending on or before the Closing Date pursuant to Treasury Regulation Section
1.1502-6(a) or any analogous or similar state, local or foreign law or
regulations (other than any
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liability arising under such Treasury Regulation or analogous law by reason of
the Company, Group and the Subsidiaries becoming a member of the consolidated,
combined or unitary group of which the Purchaser is a member); and (c) any and
all Taxes allocated to the Seller pursuant to Section 7(c)(iii) hereof and not
previously paid thereunder.
(ii) Purchaser, the Company, Group and the Subsidiaries jointly and
severally shall be liable for, shall pay or cause to be paid and shall indemnify
and hold Seller and each of its Affiliates and all of their officers, directors
and agents harmless from and against any and all losses, claims, damages,
liabilities, costs, expenses (including reasonable attorneys' fees and the cost
and expenses of enforcing such indemnification against Purchaser, the Company,
Group and the Subsidiaries), interest and penalties, if any, arising out of or
based upon or for or in respect of, except as otherwise set forth in Section
7(c)(iii), any and all Taxes with respect to the Company, Group or the
Subsidiaries for any taxable period ending after the Closing Date; and any
Transfer Taxes (excluding Transfer Taxes solely attributable to the Section 338
(h)(10) Election).
(c) Preparation of Tax Returns; Payment of Taxes.
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(i) Seller (A) shall include, or cause to be included, the Company,
Group and the Subsidiaries in, and shall file, (1) the United States
consolidated federal income Tax Returns of Seller or its Affiliated Group for
the taxable periods of the Company, Group and the Subsidiaries ending on or
prior to the Closing Date and (2) all other consolidated, combined or unitary
Tax Returns of Seller or its Affiliated Group for the taxable periods of the
Company, Group and the Subsidiaries ending on or prior to the Closing Date and
(B) also shall or shall cause the Company, Group and the Subsidiaries to file
all other Tax Returns of or which include the Company, Group or the Subsidiaries
required to be filed (taking into account any extensions) on or prior to the
Closing Date. Following the Closing, Seller shall be responsible for preparing
or causing to be prepared all foreign, state and local Tax Returns required to
be filed by the Company, Group and the Subsidiaries on a separate return basis
after the Closing Date with respect to taxable periods that end on or prior to
the Closing Date. Seller shall prepare and deliver such Tax Returns, along with
the amount of any Taxes shown due thereon, to Purchaser for Purchaser's
reasonable review and approval which approval shall not be unreasonably withheld
and for filing at least 15 days prior to their due date. Purchaser shall
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file such Tax Returns on a timely basis and provide Seller with adequate proof
of such timely filing.
(ii) For federal income Tax purposes, the taxable year of the Company,
Group and the Subsidiaries shall end as of the close of the Closing Date and,
with respect to all other Taxes, Seller and Purchaser will, unless prohibited by
applicable law, close the taxable period of the Company, Group and the
Subsidiaries as of the close of the Closing Date. Neither Seller nor Purchaser
shall take any position inconsistent with the preceding sentence on any Tax
Return. To the extent permitted by law, the principles of this Subsection also
shall be applied to all state, local and foreign Tax Returns.
(iii) In any case in which a Tax is assessed with respect to a taxable
period which begins before the Closing Date and ends after the Closing Date, the
resulting Tax obligation shall be allocated (i) to Seller for the period up to
and including the Closing Date, and (ii) except to the extent attributable to
the Section 338(h)(10) Election, to Purchaser for the period subsequent to the
Closing Date. Any allocation of income or deductions required to determine any
Taxes attributable to any period beginning before and ending after the Closing
Date shall be made by means of a closing of the books and records of each of the
Company, Group and the Subsidiaries as of the close
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of the Closing Date, provided that exemptions, allowances, deductions
(including, but not limited to, depreciation and amortization deductions) or any
Taxes (such as property or similar Taxes) that are calculated on an annual basis
shall be allocated between the period ending on the Closing Date and the period
after the Closing Date in proportion to the number of days in each such period.
Any disagreements regarding the allocations shall be promptly resolved in an
arbitration conducted by the Selected Accounting Firm whose decision shall be
binding on the parties.
(iv) Purchaser shall prepare and provide Seller with copies of each Tax
Return (or the relevant portions thereof) reflecting any obligations with
respect to any taxable period of the Company, Group or the Subsidiaries which
begins before and ends after the Closing Date at least 30 days prior to the due
date for filing such return, and Seller shall have the right to review on a
timely basis and approve (which approval shall not be unreasonably withheld)
such Tax Returns. Purchaser and Seller shall attempt in good faith mutually to
resolve any disagreements regarding such Tax Returns prior to the due date for
filing thereof. Purchaser shall file or cause to be filed all such Tax Returns
and subject to receiving the payments from Seller with respect to the portion of
the Taxes allocable to Seller under Section 7(c)(iii) hereof,
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pay the Taxes shown due thereon. Seller shall remit such Taxes allocable to
Seller under Section 7(c)(iii) hereof to Purchaser at least 5 days prior to the
due date of any such return.
(d) Cooperation with Respect to Tax Returns. Purchaser and Seller agree
to furnish or cause to be furnished to each other, upon written request, and
each at their own expense, as promptly as practicable, such information
(including access to books and records) and assistance relating to the Company,
Group and the Subsidiaries as is reasonably necessary for the filing of any Tax
Return, for the preparation for any audit, and for the prosecution or defense of
any claim, suit or proceeding relating to any adjustment or proposed adjustment
with respect to Taxes, including making employees available on a mutually
convenient basis to provide additional information and explanations of any
material provided hereunder. Seller shall retain in its possession and shall
provide Purchaser reasonable access to (including the right to make copies of)
all Tax Returns and tax records or the relevant portions thereof relating to the
Company, Group and the Subsidiaries that might be relevant to computations or
payments required after the Closing Date with respect to Tax matters relating to
any taxable period ending on or prior the Closing Date until the relevant
statute of limitations has expired.
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After such time, Seller may dispose of such materials, provided that prior to
such disposition Seller shall give Purchaser a reasonable opportunity to take
possession of such materials. Purchaser or the Company, Group or the
Subsidiaries shall retain in their possession, and shall provide Seller
reasonable access to (including the right to make copies of), such supporting
books and records and any other materials that Seller may specify with respect
to Tax matters relating to any taxable period ending on or prior to the Closing
Date until the relevant statute of limitations has expired. After such time,
Purchaser may dispose of such materials, provided that prior to such disposition
Purchaser shall give Seller a reasonable opportunity to take possession of such
materials.
(e) Tax Audits.
(i) Whenever any taxing authority asserts a claim, makes an
assessment or otherwise disputes or affects the Tax reporting position of the
Company, Group or the Subsidiaries for taxable periods ending on or prior to or
including the Closing Date, Purchaser, promptly upon receipt by Purchaser, the
Company, Group or the Subsidiaries of notice thereof, shall inform Seller
thereof in writing.
(ii) Seller shall have the sole right to represent the interests of the
Company, Group and the Subsidiaries in any Tax audit or administrative or court
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proceeding relating to (A) taxable periods of the Company, Group and the
Subsidiaries which end on or prior to the Closing Date and (B) the Section
338(h)(10) Election.
(iii) Seller and Purchaser jointly shall represent the interests of the
Company, Group and the Subsidiaries in any Tax audit or administrative or court
proceeding relating to any taxable period of the Company, Group or the
Subsidiaries which includes (but does not begin or end on) the Closing Date. Any
disputes regarding the conduct or resolution of any such audit or proceeding
shall be resolved in an arbitration to be conducted by the Selected Accounting
Firm. Each of the parties shall be bound by the decision of the Selected
Accounting Firm rendered in such arbitration. All costs, fees and expenses paid
to third parties in the course of such audit or proceeding (including the fees
of the Selected Accounting Firm) shall be borne by Seller and Purchaser in the
same ratio as the ratio in which, pursuant to the terms of this Agreement
(including Section 7(c) hereof), Seller and Purchaser would share the
responsibility for payment of the Taxes asserted by the taxing authority in such
claim or assessment if such claim or assessment were sustained in its entirety.
(iv) Purchaser shall have the sole right to represent the interests of
the Company, Group and
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the Subsidiaries in all other Tax audits or administrative or court proceedings.
(f) Refund Claims. To the extent any determination of Tax liability of
the Company, Group or the Subsidiaries, whether as the result of an audit or
examination, a claim for refund, the filing of an amended return or otherwise,
results in any refund of Taxes paid attributable to (i) any period which ends on
or before the Closing Date, (ii) any sale, exchange or other disposition of
property which occurred on or prior to the Closing Date, or (iii) any period
which includes the Closing Date but does not begin or end on that day, any such
refund shall belong to Seller; provided that in the case of any Tax refund
described in clause (iii) of this Section 7(f), the portion of such Tax refund
which shall belong to Seller shall be that portion that is attributable to the
portion of that period which ends on the Closing Date (determined on the basis
of an interim closing of the books as of the Closing Date), and Purchaser shall
promptly pay any such portion, and the interest actually received thereon, to
Seller upon receipt thereof by Purchaser. Any and all other refunds shall belong
to Purchaser. Any payments made under this Section 7(f) shall be net of any
Taxes payable with respect to such refund, credit or interest thereon (taking
into
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account any reduction in tax liability actually realized upon the payment
pursuant to this Section 7(f)).
(g) Tax Sharing Agreements. All tax sharing and similar agreements
(other than the provisions of this Agreement) between (i) the Company, Group or
the Subsidiaries on the one hand and (ii) Seller or any other corporation or
corporations on the other hand shall be terminated as to the Company, Group and
the Subsidiaries as of the Closing Date, and neither the Seller, Company, Group
nor the Subsidiaries shall have liability from and after the Closing Date under
any such agreement.
(h) Transfer Taxes. Purchaser shall be liable for and shall pay all
excise, sales, use, transfer (including real property transfer taxes and state
or local transfer gains taxes), stamp, documentary, filing, recordation and
other similar taxes which may be imposed in connection with the transactions
contemplated by this Agreement, together with any interest, additions or
penalties with respect thereto (the "Transfer Taxes"). Each party hereto hereby
agrees to file all necessary documentation (including, but not limited to, all
Tax Returns) with respect to all such amounts in a timely manner.
(i) Timing of Tax Indemnity Claim. Any claim for indemnity hereunder
may be made at any time prior
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to 60 days after the expiration of the applicable Tax statute of limitations
with respect to the relevant taxable period (including all periods of extension,
whether automatic or permissive).
8. Conditions Precedent to Purchaser's Obligation. The obligation of
Purchaser to consummate the purchase of the Shares on the Closing Date is, at
the option of Purchaser, subject to the satisfaction of the following
conditions:
(a) Each of the representations and warranties of Seller contained in
Section 3 hereof shall be true and correct in all material respects as of the
Closing Date with the same force and effect as though the same had been made on
and as of the Closing Date, except for those given as of a particular date,
which shall be true and correct in all material respects as of such date, and
except for changes therein permitted or contemplated hereby.
(b) Seller shall have performed and complied in all material respects
with the covenants and provisions in this Agreement required herein to be
performed or complied with by Seller between the date hereof and the Closing
Date, and Purchaser shall have received evidence reasonably satisfactory to it
that (i) all of the Indebtedness of Group owing to Seller and guarantees thereof
shall have been discharged and released in the manner
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described in Section 5(f) hereof, and (ii) Seller's liens on the stock of Group
and the Subsidiaries shall have been released.
(c) No action or proceeding shall have been instituted against
Purchaser, Seller, the Company, Group or the Subsidiaries before any court or
other governmental body, seeking to restrain or prohibit the consummation of the
transactions contemplated hereby, which in the reasonable opinion of Purchaser
makes it inadvisable to consummate such transactions. No governmental action or
proceeding shall have been instituted or threatened against Purchaser, Seller,
the Company, Group or the Subsidiaries seeking to restrain or prohibit the
consummation of the transactions contemplated hereby, which in the reasonable
opinion of Purchaser makes it inadvisable to consummate such transactions.
(d) Purchaser shall have received opinions of an associate general
counsel for Seller and Weil, Gotshal & Xxxxxx, counsel for Seller, each dated
the Closing Date and each in form and substance reasonably satisfactory to
Purchaser and its counsel, to the effect set forth in Exhibits A-1 and A-2
hereto, respectively.
(e) Purchaser shall have received a certificate to the effect set forth
in subsections (a) and
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(b) above, dated the Closing Date, signed by a duly authorized officer of
Seller.
(f) Purchaser shall have received a certificate of a duly authorized
officer of Seller, dated the Closing Date, setting forth resolutions of the
Board of Directors of Seller generally authorizing the signing of agreements and
certifying that such resolutions were duly adopted and have not been rescinded
or amended as of the Closing Date.
(g) The consents of all persons who are parties to the agreements with
Seller, the Company, Group or the Subsidiaries identified on Schedule 8(g) shall
have been obtained, and signed copies thereof shall have been delivered to
Purchaser.
(h) The waiting periods under the Xxxx-Xxxxx-Xxxxxx Act shall have
expired.
(i) Seller shall have made all deliveries required by Section 10(c)
hereof.
9. Conditions Precedent to Seller's Obligation. The obligation of Seller
to consummate the sale, transfer and assignment to Purchaser of the Shares on
the Closing Date is, at the option of Seller, subject to the satisfaction of the
following conditions:
(a) Each of the representations and warranties of Purchaser contained
in Section 4 hereof shall
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be true and correct in all material respects as of the Closing Date with the
same force and effect as though the same had been made on and as of the Closing
Date, except for changes therein permitted or contemplated hereby.
(b) Purchaser shall have performed and complied in all material
respects with the covenants and provisions in this Agreement required herein to
be performed or complied with by Purchaser between the date hereof and the
Closing Date.
(c) No action or proceeding, shall have been instituted against
Purchaser, Seller, the Company, Group or the Subsidiaries before any court or
other governmental body, seeking to restrain or prohibit the consummation of the
transactions contemplated hereby, which in the reasonable opinion of Seller
makes it inadvisable to consummate such transactions. No governmental action or
proceeding shall have been instituted or threatened against Purchaser, Seller,
the Company, Group or the Subsidiaries seeking to restrain or prohibit the
consummation of the transactions contemplated hereby, which in the reasonable
opinion of Seller makes it inadvisable to consummate such transactions.
(d) Seller shall have received an opinion of Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxxx & Xxxxxx, P.L.C., counsel for Purchaser, dated the Closing Date, in form
and substance
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reasonably satisfactory to Seller and its counsel, to the effect set forth in
Exhibit B hereto.
(e) Seller shall have received a certificate to the effect set forth in
subsections (a) and (b) above, dated the Closing Date, signed by a duly
authorized officer of Purchaser.
(f) Seller shall have received a certificate of a duly authorized
officer of Purchaser, dated the Closing Date, setting forth the resolutions of
the Board of Directors of Purchaser authorizing the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby, and
certifying that such resolutions were duly adopted and have not been rescinded
or amended as of the Closing Date.
(g) The waiting periods under the Xxxx-Xxxxx-Xxxxxx Act shall have
expired.
(h) Purchaser shall have arranged for the release of Seller from its
letter of credit guarantees or for the issuance of back-up letters of credit as
contemplated by Section 6(e) hereof.
(i) Purchaser shall have made all deliveries required by Section 10(d)
hereof.
10. Closing Date: Closing.
(a) Except as hereinafter provided, the closing hereunder (herein
called the "Closing") shall take
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place at the offices of Weil, Gotshal & Xxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, X.X.
00000 at 10:00 A.M. on August 31, 1995 or, if later, the date that is five (5)
Business Days after each of the conditions precedent to the Closing shall have
been satisfied or waived, but not later than September 30, 1995, unless
otherwise mutually agreed to in writing by Purchaser and Seller. The date of the
Closing is referred to in this Agreement as the "Closing Date*.
(b) All proceedings to be taken and all documents to be executed and
delivered by Seller in connection with the consummation of the transactions
contemplated hereby shall be reasonably satisfactory in form and substance to
Purchaser and its counsel. All proceedings to be taken and all documents to be
executed and delivered by Purchaser in connection with the consummation of the
transactions contemplated hereby shall be reasonably satisfactory in form and
substance to Seller and its counsel. All proceedings to be taken and all
documents to be executed and delivered by all parties at the Closing shall be
deemed to have been taken and executed simultaneously and no proceedings shall
be deemed taken nor any documents executed or delivered until all have been
taken, executed and delivered.
(c) At the Closing, Seller shall deliver, or shall cause to be
delivered, to Purchaser the following:
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(i) Certificates representing the Shares, which certificates shall
be duly endorsed in blank or, in lieu thereof, shall have affixed thereto stock
powers executed in blank, and in proper form for transfer.
(ii) Opinions of counsel for Seller, each dated the Closing Date,
setting forth the matters required pursuant to Section 8(d) hereof.
(iii) The certificate signed by Seller as referred to in Section 8(e)
hereof.
(iv) The certified resolutions of the Board of Directors of Seller
referred to in Section 8(f) hereof.
(v) An incumbency certificate setting forth the names of officers of
Seller who are authorized to execute this Agreement and all documents executed
by Seller pursuant hereto, together with their respective signatures, signed by
a duly authorized officer of Seller.
(d) At the Closing, Purchaser shall deliver to Seller the following:
(i) A wire transfer of funds, in the aggregate amount of the
Purchase Price, as provided in Section 2 hereof.
(ii) An opinion of counsel for Purchaser, dated the Closing Date,
setting forth the matters required pursuant to Section 9(d) hereof.
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(iii) The certificate signed by a duly authorized officer of Purchaser
referred to in Section 9(e) hereof.
(iv) The certified resolutions of the Board of Directors of Purchaser
referred to in Section 9(f) hereof.
(v) An incumbency certificate setting forth the names of officers of
Purchaser who are authorized to execute this Agreement and all documents
executed by Purchaser pursuant hereto, together with their respective
signatures, signed by a duly authorized officer of Purchaser.
11. No Brokers. Seller represents to Purchaser, and Purchaser
represents to Seller, that they respectively have had no dealings with any
broker or finder in connection with the transactions contemplated by this
Agreement, other than, with respect to Seller, Xxxxxx Xxxx Incorporated. Seller
agrees to indemnify and hold Purchaser harmless from and against any and all
liability to which Purchaser may be subjected by reason of any broker's,
finder's or similar fee with respect to the transactions contemplated by this
Agreement to the extent such fee is attributable to any action undertaken by or
on behalf of Seller. Purchaser agrees to indemnify and hold Seller harmless from
and against any and all liability to which Seller may be
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subjected by reason of any broker's, finder's or similar fee with respect to the
transactions contemplated by this Agreement to the extent such fee is
attributable to any action undertaken by or on behalf of Purchaser.
12. Survival of Representations and Warranties. The parties hereto agree
that the representations and warranties contained in this Agreement or in any
certificate, document or instrument delivered in connection herewith, shall
survive the execution and delivery of this Agreement, and the Closing hereunder,
regardless of any investigation made by the parties hereto; provided, however,
that, except for claims or actions with respect to Sections 3(b), 3(c) (as to
title only), 3(d) (as to title only) and 3(h) (until the applicable statute of
limitations has expired), any claims or actions with respect thereto shall
terminate unless by March 31, 1997 written notice of such claims is given to
Seller or such actions are commenced.
13. Indemnification of and by Purchaser and Limitation of Liability.
(a) Seller agrees to indemnify and hold Purchaser harmless from and
against:
(i) Any and all liabilities, obligations, damages, deficiencies and
expenses resulting from (A) any misrepresentation or breach of warranty
contained in this Agreement or any certificate delivered
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pursuant hereto or non-fulfillment of any agreement on the part of Seller under
the terms of this Agreement and (B) the Wazaney Litigation; and
(ii) All actions, suits, proceedings, demands, assessments,
judgments, costs and expenses, including reasonable attorneys' fees, incident to
the foregoing and to all other indemnity obligations created by this Section 13.
(b) (i) Seller agrees to indemnify and hold Purchaser harmless from and
against any and all liabilities, obligations, damages, deficiencies and expenses
arising out of any "employee benefit plan" as defined in Section 3(2) of ERISA
or any "group health plan" as defined in Section 607(l) of ERISA in respect of
which the Company, Group and the Subsidiaries have any liability solely as a
result of being a member of a "controlled group" within the meaning of Section
4001(b)(1) of ERISA prior to the Closing Date which includes Seller.
(ii) Purchaser agrees to indemnify and hold Seller harmless from and
against any and all liabilities, obligations, damages, deficiencies and expenses
arising out of (i) any Company Plan (except for matters arising prior to the
Closing Date which arise as a result of a breach of the representations
contained in Sections 3(r) or 3(s) hereof or caused solely by the actions of
Seller)
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and (ii) the severance of any employee of the Company, Group or the Subsidiaries
on or after the Closing Date (including without limitation any liabilities under
or with respect to WARN).
(c) Purchaser agrees to indemnify and hold Seller harmless
from and against any and all claims, liabilities, damages, fines, deficiencies
or expenses (including, without limitation, fees, disbursements and expenses of
legal counsel, experts, engineers and consultants and the costs of investigation
and feasibility studies and remedial or corrective action) arising under
Environmental Laws now or hereafter in effect and relating to, resulting from or
based upon anything related to the property presently or formerly owned, leased
or operated by the Company, Group or their Subsidiaries or any of their
predecessors or the facilities or operations thereof, except for items
constituting a breach of the representation contained in Section 3(q) hereof or
caused solely by the actions of Seller (collectively "Environmental Losses").
Except for any indemnity right under this Section 13, Purchaser waives any right
(including, without limitation, any statutory right to recovery or contribution)
it has or may have in the future against Seller in connection with any and all
Environmental Losses.
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(d) The indemnifications by Seller contained in subsections
(a) and (b) above and Sections 7 and 11 hereof and any and all liabilities and
obligations of and causes of action against Seller, and any recovery in respect
thereof, arising out of or relating to this Agreement and the transactions
contemplated hereby (i) shall be effective only if, and to the extent that, the
aggregate of such losses, liabilities, damages, deficiencies or expenses
(including reasonable attorneys' fees) indemnified against shall exceed
$10,000,000 in which event such indemnification shall be effective with respect
to all such losses, liabilities, damages deficiencies or expenses in excess of
such amount, and shall be limited to an aggregate payment of no more than
$50,000,000. For purposes of determining Seller's indemnification obligations
pursuant to this Section 13, each representation and warranty stated in Section
3 or Section 4 hereof shall be deemed to exclude any materiality standard,
exception or qualification stated therein, including without limitation, any
exceptions therein for matters that would not or are not reasonably likely to
have a Material Adverse Effect. Notwithstanding the foregoing, the provisions of
this Section 13(d) shall not apply to (i) the Seller's indemnification
obligation contained in Section 7(b)(i)(b) hereof (ii) the Seller's
indemnification obligation for the Wazaney Litigation, (iii)
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Seller's representations and warranties set forth in Sections 3(b), 3(c) (as to
title only) and 3(d) (as to title only) hereof and (iv) the Taxes of the
Company, Group and the Subsidiaries which are based on or measured by net
income.
(e) Except in the case of Taxes which shall be governed by
Section 7 hereof, in the event that any legal proceedings shall be instituted or
that any claim or demand shall be asserted by any person in respect of which
payment may be sought by Purchaser from Seller or by Seller from Purchaser under
the provisions of this Section 13, regardless of the $10,000,000 minimum
referred to in subsection (d) above, Purchaser or Seller, as the case may be,
shall promptly cause written notice of the assertion of any claim of which it
has knowledge which is covered by this indemnity to be forwarded to the
indemnifying party, and the indemnifying party shall have the right, at its
option and at its own expense, to be represented by counsel of its choice and to
defend against, negotiate, settle or otherwise deal with any proceeding, claim
or demand which relates to any loss, liability, damage or deficiency indemnified
against hereunder; provided, however, that no settlement shall be made without
the prior written consent of the indemnified party, which consent shall not be
unreasonably withheld or delayed; and provided further, that the
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indemnified party may participate in any such proceeding with counsel of its
choice and at its expense. The parties hereto agree to cooperate fully with each
other in connection with the defense, negotiation or settlement of any such
legal proceeding, claim or demand. Purchaser further agrees to retain and cause
the Company and Group to retain any and all records and documents it or they may
have or obtain in connection with the Wazaney Litigation for a period of six
years following the Closing Date and allow Seller, upon reasonable notice on any
Business Day, access to such records and documents, including the right to make
copies thereof. After such time, Purchaser may dispose of such materials,
provided that prior to such disposition Purchaser shall give Seller a reasonable
opportunity to take possession of such materials. In addition, Purchaser agrees
to make reasonable efforts to cause the Company and Group to make its or their
employees available to Seller upon reasonable notice on any Business Day in
connection with Seller's defense of the Wazaney Litigation.
After any final judgment or award shall have been rendered by
a court, arbitration board or administrative agency of competent jurisdiction
and the expiration of the time in which to appeal therefrom, or a settlement
shall have been consummated, or Purchaser and Seller shall have arrived at a
mutually binding agreement with respect to each
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separate matter indemnified by Seller or Purchaser hereunder, as the case may
be, the indemnified party forward to the indemnifying party notice of any sums
due and owing by it pursuant to this Agreement with respect to such matter, and
the indemnifying party shall be required to pay all of the sums so owing to the
indemnified party within ten (10) days after the date of such notice.
Notwithstanding anything contained herein to the contrary, the
indemnity provided for in Section 13(a) hereof, other than with respect to the
Wazaney Litigation, shall exist with respect to any loss, liability, damage or
deficiency whether or not the actual amount of which shall have been ascertained
prior to the conclusion of the one (1) year period following the Closing Date
referred to in Section 12 hereof, so long as written notice shall have been
given to Seller by Purchaser prior to the conclusion of said applicable period
of the matter as to which indemnification has been asserted.
(f) Any indemnity payments otherwise due and payable under
Sections 7, 11 and 13 shall be (i) decreased to the extent of any reduction of
Tax liability that is realizable by the indemnified party upon payment of an
indemnifiable loss and (ii) increased to the extent of any increase in Tax
liability that is imposed on the indemnified party upon the receipt of an
indemnity payment pursuant to
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this Agreement, including, in each case, any decrease or increase thereof
pursuant to payments under this Section 13.
(g) Any payments under this Sections 7, 11 and 13 shall be
treated by the parties hereto for federal, state, local and foreign income Tax
purposes either as a non-taxable reimbursement or capital contribution or as a
purchase price adjustment, as the case maybe, except to the extent that another
treatment is required by law.
14. Specific-Performance. The parties hereto acknowledge that
irreparable damage would result if this Agreement is not specifically enforced.
Therefore, the rights and obligations of the parties under the Agreement,
including, without limitation, their respective rights and obligations to sell
and to purchase the Shares, shall be enforceable by a decree of specific
performance issued by any court of competent jurisdiction, and appropriate
injunctive relief may be applied for and granted in connection therewith. Such
remedies shall, however, be cumulative and not exclusive and shall be in
addition to any other remedies which any party may have under this Agreement or
otherwise.
15. Termination. Anything contained in this Agreement to the
contrary notwithstanding, this Agreement may be terminated:
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(a) At any time on or prior to the Closing Date, by the mutual
consent in writing of Purchaser and Seller; or
(b) By either Purchaser or Seller if the Closing shall not
have occurred on or before September 30, 1995 (or such later date as may be
agreed upon in writing by the parties hereto).
In the event that this Agreement shall be terminated pursuant
to this Section 15, all further obligations of the parties under this Agreement
(other than Sections 11, 17 and 23) shall terminate without further liability of
either party to the other, provided that nothing herein shall relieve any party
from liability for its breach of this Agreement.
16. Further Assurances. The parties hereto each agree to
execute such other documents or agreements and to take such other actions as may
be reasonably necessary or desirable for the implementation of this Agreement
and the consummation of the transactions contemplated hereby, including, but not
limited to, executing such documents or agreements and taking such other actions
as may be reasonably necessary or desirable to obtain the consent or other
approval of all relevant governmental authorities with respect to any
governmental, license, permit, franchises, or
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other right of the Company, Group or any of their Subsidiaries.
17. Confidentiality: Press Releases. (a) As more specifically
set forth in the Confidentiality Agreement, Purchaser agrees to keep proprietary
information regarding Seller and, prior to the Closing, the Company, Group and
the Subsidiaries confidential and agrees that it will only use such information
in connection with the transactions contemplated by this Agreement and not
disclose any of such information other than (i) to Purchaser's directors,
officers, employees, representatives, and agents who are or may be involved with
the transactions contemplated by this Agreement, (ii) to the extent such
information presently is or hereafter becomes available, on a non-confidential
basis, from a source other than Seller, the Company or Group, and (iii) to the
extent disclosure is required by law, regulation or judicial order by any
governmental authority.
(b) Seller agrees to keep proprietary information regarding
Purchaser confidential and agrees that it will only use such information in
connection with the transactions contemplated by this Agreement and not disclose
any of such information other than (i) to Seller's, the Company's and Group's
directors, officers, employees, representatives, and agents who are involved
with the transactions contemplated by this Agreement, (ii) to the
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extent such information presently is or hereafter becomes available, on a
non-confidential basis, from a source other than Purchaser, and (iii) to the
extent disclosure is required by law, regulation or judicial order by any
governmental authority.
(c) Prior to any disclosure required by law, regulation or
judicial order Purchaser or Seller, as the case may be, shall advise the other
of such requirement so that it may seek a protective order.
(d) Prior to Closing or thereafter, neither Purchaser nor
Seller shall make any press release or public announcement in connection with
the transactions contemplated hereby without the prior written consent of the
other party or, if required by law, without prior consultation with the other
party.
18. Notices. Any notices or other communications required or
permitted hereunder, shall be sufficiently given if in writing and personally
delivered or sent by registered or certified mail, postage prepaid, return
receipt requested, or sent by facsimile, addressed as follows or to such other
address as the parties shall have given notice of pursuant hereto:
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In the case of Purchaser:
Xxxxx Investment Company, Inc.
0000 X. Xxxxxxxx Xxx. - Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxx
Telecopy: 000-000-0000
With a copy to:
Xxxxx Xxxxxxxxx Xxxxxx Xxxxxxx
& Xxxxxx, P.L.C.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Telecopy: 602-263-5333
H & F Investors III, Inc.
Xxx Xxxxxxxx Xxxxx, 00xx Xx.
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx, Xx.
Telecopy: 000-000-0000
Xxxxxx Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Mundies, Esq.
Telecopy: 000-000-0000
In the case of Seller:
General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Nigel X.X. Xxxxxxx
Telecopy: 000-000-0000
With copies to:
General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxxx, Esq.
Telecopy: 000-000-0000
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Weil, Gotshal & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxxxx, Esq.
Telecopy: 000-000-0000
19. Entire Agreement. This Agreement and the Confidentiality
Agreement represent the entire understanding and agreement between the parties
hereto with respect to the subject matter hereof and can be amended,
supplemented or changed, and any provision hereof can be waived, only by written
instrument making specific reference to this Agreement signed by the party
against whom enforcement of any such amendment, supplement, modification or
waiver is sought.
20. Successors. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that this Agreement and all rights and obligations
hereunder may not be assigned or transferred without the prior written consent
of the other party hereto, except that Purchaser may collaterally assign all of
its interest under this Agreement to Purchaser's lenders who provide financing
to facilitate Purchaser's acquisition of the Shares pursuant hereto and that
Purchaser may assign its rights and obligations to purchase the Shares pursuant
hereto to an affiliate under the control of Purchaser and/or H&F
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Investors III, Inc., provided that Purchaser shall not be released from its
obligations hereunder.
21. Section Headings. The section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
22. Applicable Law. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of New York,
without regard to the principles thereof relating to conflict of laws.
23. Expenses. Whether or not the transactions contemplated
hereby are consummated, the parties hereto shall pay their own respective
expenses, except that Purchaser shall pay the applicable filing fee in
connection with the filings referred to in Sections 5(e) and 6(c) hereof.
24. Severability. If at any time subsequent to the date
hereof, any provision of this Agreement shall be held by any court of competent
jurisdiction to be illegal, void or unenforceable, such provision shall be of no
force and effect, but the illegality or unenforceability of such provision shall
have no effect upon and shall not impair the enforceability of any other
provision of this Agreement.
25. Note. Purchaser confirms that it has received a demand
note (the "Note") from Xxxxxxx & Xxxxxxxx
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Capital Partners III, L.P. in the principal amount of $10 million and that
Purchaser hereby pledges to Seller, and grants to Seller a security interest in,
the Note as security for the performance of Purchaser's obligations to
consummate the purchase of the Shares hereunder. In the event Purchaser fails to
perform such obligations hereunder, Seller shall be entitled to exercise in
respect of the Note all rights and remedies of a secured party after default
under the Uniform Commercial Code in effect in the State of New York. Upon the
consummation of the purchase of the Shares hereunder, Purchaser shall be
entitled to the return of the Note.
26. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
XXXXX INVESTMENT COMPANY, INC.
By /s/ Xxxx Xxxxx
------------------------------
Name: Xxxx Xxxxx
Title: Chairman
GENERAL ELECTRIC CAPITAL CORPORATION
By /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: VP Finance
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