EX-10.4
5
ex10_4.htm
ASSET PURCHASE AGREEMENT
EXHIBIT 10.4
ASSET
PURCHASE AGREEMENT
BY
AND AMONG
THE
GOODYEAR TIRE & RUBBER COMPANY,
GOODYEAR
CANADA INC.,
GOODYEAR
SERVICIOS COMERCIALES, S. DE X.X. DE C.V.,
THE
KELLY-SPRINGFIELD TIRE CORPORATION
AND
TITAN
TIRE CORPORATION
_______________________________________________________
DATED
FEBRUARY 28, 2005
_______________________________________________________
TABLE
OF CONTENTS
|
Article
1
|
CERTAIN
DEFINITIONS; RELATED MATTERS
|
2
|
|
Section
1.1
|
Definitions
|
2
|
|
Section
1.2
|
Definitions
can be substantive
|
13
|
|
Section
1.3
|
Definitions
Not in Article I
|
13
|
|
Section
1.4
|
Non-Business
Day Performance
|
13
|
|
Section
1.5
|
Calculation
Of Day Periods
|
13
|
| | | |
|
ARTICLE
2
|
PURCHASE
AND SALE OF ASSETS
|
13
|
|
Section
2.1
|
Purchase
and Sale
|
13
|
|
Section
2.2
|
Excluded
Assets
|
16
|
|
Section
2.3
|
Consideration
to Be Paid by Purchaser
|
19
|
|
Section
2.4
|
Preliminary
Purchase price; Determination of Purchase Price
|
19
|
|
Section
2.5
|
Assumption
of Liabilities
|
21
|
|
Section
2.6
|
Excluded
Liabilities
|
22
|
|
Section
2.7
|
Assignment
and Transfer of Contracts and Permits
|
23
|
|
Section
2.8
|
Allocation
of the Purchase Price
|
24
|
| | | |
|
ARTICLE
3
|
THE
CLOSING
|
24
|
|
Section
3.1
|
The
Closing
|
24
|
|
Section
3.2
|
Closing
Deilveries
|
25
|
|
Section
3.3
|
Further
Assurances
|
28
|
|
Section
3.4
|
Administration
of Accounts
|
28
|
|
Section
3.5
|
Bulk
Sales Laws
|
29
|
| | | |
|
ARTICLE
4
|
REPRESENTATIONS
AND WARRANTIES OF SELLER
|
29
|
|
Section
4.1
|
Incorporation;
Authorization; Etc.
|
29
|
|
Section
4.2
|
No
Conflict
|
30
|
|
Section
4.3
|
Real
and Tangible Personal Property
|
30
|
|
Section
4.4
|
Financial
Reports
|
32
|
|
Section
4.5
|
Absence
of Certain Changes
|
32
|
|
Section
4.6
|
Inventories
|
33
|
|
Section
4.7
|
Litigation
|
33
|
|
Section
4.8
|
Intellectual
Property
|
33
|
|
Section
4.9
|
Employee
Benefits
|
34
|
|
Section
4.10
|
Employment
and Labor Matters
|
34
|
|
Section
4.11
|
Compliance
with Laws
|
34
|
|
Section
4.12
|
Contracts
|
34
|
|
Section
4.13
|
Licenses
and Permits
|
34
|
|
Section
4.14
|
Taxes
|
35
|
|
Section
4.15
|
Insurance
|
35
|
|
Section
4.16
|
Product
Warranty
|
35
|
i
|
Section
4.17
|
Customers
and Suppliers
|
35
|
|
Section
4.18
|
Environmental
Matters
|
36
|
|
Section
4.19
|
Brokers,
Finders, Etc.
|
37
|
|
Section
4.20
|
Accuracy
of Information; Full Disclosure
|
37
|
| | | |
|
ARTICLE
5
|
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
|
37
|
|
Section
5.1
|
Organization
and Good Standing
|
37
|
|
Section
5.2
|
Authorization;
Etc.
|
37
|
|
Section
5.3
|
No
Conflict
|
38
|
|
Section
5.4
|
Independent
Analysis
|
38
|
|
Section
5.5
|
Litigation
|
38
|
|
Section
5.6
|
Finders,
Brokers
|
38
|
| | | |
|
ARTICLE
6
|
COVENANTS
OF SELLER AND PURCHASER
|
38
|
|
Section
6.1
|
Access
to Information; Confidentiality
|
38
|
|
Section
6.2
|
Conduct
of the Business
|
39
|
|
Section
6.3
|
Notification
of Certain Matters
|
39
|
|
Section
6.4
|
Efforts
Concerning Closing Conditions;
| |
| |
Regulatory
and Other Authorizations; Notices and Consents
|
40
|
|
Section
6.5
|
Public
Statements
|
41
|
|
Section
6.6
|
Cooperation
|
41
|
|
Section
6.7
|
Transfer
Taxes and Fees
|
41
|
|
Section
6.8
|
Expenses
|
42
|
|
Section
6.9
|
Access
to Former Business Records; Cooperation Concerning Tax
Issues
|
42
|
|
Section
6.10
|
Corporate
Names and Trademarks
|
43
|
|
Section
6.11
|
Transfer
of Permits
|
43
|
|
Section
6.12
|
Restrictive
Covenants
|
43
|
|
Section
6.13
|
Real
Estate
|
47
|
|
Section
6.14
|
Unaudited
Financial Statements
|
49
|
|
Section
6.15
|
Certain
Government Contracts
|
49
|
|
Section
6.16
|
Transfer
of Inventories
|
50
|
| | | |
| ARTICLE
7
| EMPLOYMENT
MATTERS | 50
|
| Section
7.1 | Employment | 50 |
| Section
7.2 | Employee
Retirement benefits | 51 |
| Section
7.3 | Scope
of this Article | 51 |
| | | |
|
ARTICLE
8
|
ENVIRONMENTAL
MATTERS
|
52
|
|
Section
8.1
|
Environmental
matters
|
52
|
|
Section
8.2
|
Other
environmental Matters
|
54
|
| | | |
|
ARTICLE
9
|
CONDITIONS
TO CLOSING
|
54
|
|
Section
9.1
|
Conditions
to Obligations of all Parties
|
54
|
ii
|
Section
9.2
|
Conditions
to Obligations of Sellers
|
55
|
|
Section
9.3
|
Conditions
to Obligations of Purchaser
|
56
|
| | | |
|
ARTICLE
10
|
REMEDIES
|
57
|
|
Section
10.1
|
Survival
|
57
|
|
Section
10.2
|
Indemnification
By Seller
|
58
|
|
Section
10.3
|
Indemnification
by Purchaser
|
58
|
|
Section
10.4
|
Procedure
for Establishment of Claim
|
58
|
|
Section
10.5
|
Limitations
and Remedies
|
60
|
|
Section
10.6
|
Exclusive
Remedy
|
61
|
| | | |
|
ARTICLE
11
|
TERMINATION
|
61
|
|
Section
11.1
|
Termination
|
61
|
|
Section
11.2
|
Procedure
and Effect of Termination
|
62
|
| | | |
|
ARTICLE
12
|
MISCELLANEOUS
|
62
|
|
Section
12.1
|
Interpretation.
|
62
|
|
Section
12.2
|
Notices.
|
62
|
|
Section
12.3
|
Waiver
|
63
|
|
Section
12.4
|
Entire
Agreement
|
64
|
|
Section
12.5
|
Titan
International Guaranty
|
64
|
|
Section
12.6
|
Amendment
|
64
|
|
Section
12.7
|
Parties
in Interest; Assignment
|
64
|
|
Section
12.8
|
No
Partnership
|
64
|
|
Section
12.9
|
Governing
Law; Disputes
|
64
|
|
Section
12.10
|
Counterparts
|
65
|
|
Section
12.11
|
Severability
|
65
|
|
Section
12.12
|
Times
of the Essence
|
65
|
iii
LIST
OF SCHEDULES
|
Schedule
A
|
Knowledge
Officers of Sellers
|
|
Schedule
B
|
Knowledge
Officers of Buyer
|
|
Schedule
2.1(a)(i)
|
Tangible
Personal Property
|
|
Schedule
2.1(a)(iii)
|
Assumed
Contracts
|
|
Schedule
2.1(a)(iv)
|
IT/Personal
Property Leases
|
|
Schedule
2.1(a)(vi)
|
Utility
Contracts
|
|
Schedule
2.1(a)(vii)
|
Freeport
Permits
|
|
Schedule
2.1(a)(ix)
|
Leases
between Goodyear and Xxxxx Xxxx
|
|
Schedule
2.2(c)
|
Excluded
Tangible Assets and Equipment
|
|
Schedule
2.2(j)
|
Excluded
Contracts
|
|
Schedule
2.2(l)i
|
Excluded
Computer Hardware and Equipment
|
|
Schedule
2.2(l)(ii)
|
Excluded
Computer Software
|
|
Schedule
2.2(n)
|
Freeport
Auto Leases
|
|
Schedule
2.2(p)(i)
|
Farm
Tires Omitted from Sale
|
|
Schedule
2.2(p)(ii)
|
Contracts
for Tires
|
|
Schedule
2.2(p)(iii)
|
Molds
and Drums
|
|
Schedule
2.2(v)
|
Other
Excluded Assets
|
|
Schedule
2.3(a)
|
Wire
Transfer Instructions
|
|
Schedule
2.5(e)
|
Other
Assumed Liabilities
|
|
Schedule
2.8
|
Allocation
of Purchase Price
|
|
Schedule
3.3
|
Custom
Label Contract Assets
|
|
Schedule
4.2(a)
|
Defaults
Created by Sale
|
|
Schedule
4.2(b)
|
Seller
Required Approvals
|
|
Schedule
4.3(a)
|
Owned
Property; Liens
|
|
Schedule
4.3(b)
|
Exceptions
to Leased Real Property
|
|
Schedule
4.3(c)
|
Permit
Exceptions
|
|
Schedule
4.3(e)
|
Liens
on PPE
|
|
Schedule
4.3(f)
|
IT
Personal Property Leases
|
|
Schedule
4.3(g)
|
Permitted
Liens
|
|
Schedule
4.4
|
Income
and Loss Reports
|
|
Schedule
4.5
|
Absence
of Material Changes
|
|
Schedule
4.6
|
Inventories
|
|
Schedule
4.7
|
Litigation
and Orders
|
|
Schedule
4.9
|
Employee
Benefits
|
|
Schedule
4.10
|
Employment
& Labor
|
|
Schedule
4.12
|
Issues
Affecting Assumed Contracts
|
|
Schedule
4.13
|
Material
Permit Exceptions
|
|
Schedule
4.14
|
Taxes
|
|
Schedule
4.16
|
Product
Warranty
|
|
Schedule
4.17
|
Top
10 Customers/Top 10 Suppliers
|
|
Schedule
4.18
|
Environmental
|
|
Schedule
6.2
|
Exceptions
to Operating Covenants
|
|
Schedule
6.13(b)
|
Title
Objections
|
|
Schedule
6.15
|
Government
Contracts
|
|
Schedule
7.1(c)
|
Retained
Employees
|
|
Schedule
9.1(d)
|
Lien
Discharges
|
|
Schedule
9.3(d)
|
Consents
and Approvals
|
|
Schedule
9.3(h)
|
USWA
Agreement
|
LIST
OF EXHIBITS
|
Exhibit
A
|
Assignment
and Xxxx of Sale
|
|
Exhibit
B
|
Assumption
Agreement
|
|
Exhibit
C
|
Special
Warranty Deed
|
|
Exhibit
D
|
Sublease
|
|
Exhibit
E
|
Personal
Property Lease Assignments
|
|
Exhibit
F
|
Farm
Lease Assignments
|
|
Exhibit
G
|
Offtake
Agreement
|
|
Exhibit
H
|
Mixing
Agreement
|
|
Exhibit
I
|
Service
Agreement
|
|
Exhibit
J
|
Supply
Agreement
|
|
Exhibit
K
|
Raw
Materials Agreement
|
|
Exhibit
L
|
Trademark
License Agreement
|
|
Exhibit
M
|
Technology
Agreement
|
|
Exhibit
N
|
Employee
Leasing Contract
|
|
Exhibit
O
|
Bailment
Agreement
|
|
Exhibit
P
|
Software
License Agreement
|
|
Exhibit
Q
|
Estoppel
Certificate
|
|
Exhibit
R
|
Guaranty
- Titan International, Inc.
|
ASSET
PURCHASE AGREEMENT
THIS
ASSET PURCHASE AGREEMENT
(this
“Agreement”), dated as of February 28, 2005 is made by and among Titan Tire
Corporation, a corporation organized under the laws of the State of
Illinois
(“Purchaser”) and The Goodyear Tire & Rubber Company (“Goodyear”), a
corporation organized under the laws of the State of Ohio, Goodyear Canada
Inc.,
an Ontario corporation (“Goodyear Canada”), Goodyear
Servicios Comerciales, S. de X.X. de C.V.,
a
Mexican sociedad de responsabilidad limitada (“Goodyear Mexico”) and The
Kelly-Springfield Tire Corporation, a Delaware corporation (“Xxxxx,” and,
collectively with Goodyear, Goodyear Canada and Goodyear Mexico, “Sellers”, and
each individually, a “Seller”).
R
E C I T A L S:
A. Goodyear
is involved, as of the date hereof, in the manufacture of Farm Tires (as
herein
defined) using assets of Goodyear and Xxxxx located at Goodyear’s manufacturing
facility at Freeport,
Illinois. “Farm Tires” means the tires described in
Goodyear’s Farm
Tire Handbook 2003 (the
“Farm Tire Handbook”), excluding therefrom the tires described in Schedule
2.2(p)(i) hereto.
B. Goodyear,
Goodyear Canada and Goodyear Mexico are involved, as of the date hereof,
in the
manufacture, distribution and/or sale, in the United States, Canada and Mexico,
respectively, of Farm Tires (the business described in Recitals A and B hereto,
as currently conducted, including the goodwill associated therewith, and
except
in respect of (i) any assets that constitute Excluded Assets hereunder and
(ii)
retail sales to end users other than original equipment manufacturers, the
“Business”).
X. Xxxxx
is
the owner of the Owned Real Property (as defined herein) used in connection
with
the Business.
D. On
the
terms and subject to the conditions set forth herein, the parties hereto
wish to
effect the following transactions: (i) Goodyear desires to sell to Purchaser,
and Purchaser desires to purchase from Goodyear, Goodyear’s plant, property and
equipment located at the Freeport Facility (as defined herein) and used in
the
conduct of the Business and such other assets related to the Business at
the
Freeport Facility or elsewhere as are defined and described herein; (ii)
Xxxxx
desires to sell to Purchaser and Purchaser desires to purchase from Xxxxx
the
Owned Real Property; (iii) Goodyear, Goodyear Canada (subject to Section
6.16
below) and Goodyear Mexico desire to sell to Purchaser and Purchaser desires
to
purchase from Goodyear, Goodyear Canada and Goodyear Mexico, the Inventories
(as
defined herein) owned by such Sellers as of the Closing Date (as defined
herein); (iv) Sellers and Purchasers desire to effect certain related
assignments, transfers and other transactions, each as further described
herein
and (v) Purchaser has agreed to assume certain liabilities of Sellers related
to
the Business.
E. In
connection with the foregoing transactions, on the terms and subject to the
conditions set forth herein and in the Ancillary Agreements (as defined herein),
following the Closing (as defined herein), (i) Goodyear has agreed to grant
to
Purchaser licenses with respect to certain Intellectual Property (as defined
herein) related to the Business, (ii) Goodyear and Purchaser have agreed
to
enter into (a) offtake and reciprocal supply and warranty service obligations
and (b) raw materials arrangements, (iii) Purchaser has agreed to perform
certain contract mixing and manufacturing services for Goodyear, (iv) Goodyear
has agreed to provide the services of certain Goodyear personnel to Purchaser
for a limited period following the Closing and (v) Goodyear and, if necessary,
Goodyear Canada have agreed to provide certain warehousing services for a
limited period following the Closing.
NOW,
THEREFORE,
in
consideration of the premises, the respective covenants and commitments of
Goodyear, Goodyear Canada, Goodyear Mexico, Xxxxx and Purchaser set forth
in
this Agreement, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto, intending
to be
legally bound, hereby agree as follows:
ARTICLE
I
CERTAIN
DEFINITIONS;
RELATED MATTERS
Section
1.1 Definitions.
As used
in this Agreement, the following terms shall have the following respective
meanings:
“Accounts
Payable” shall mean all of Sellers’ trade accounts payable (including all trade
accounts payable with respect to goods and services received by Sellers but
for
which invoices have not yet been received by Sellers).
“Accounts
Receivable” shall mean all of Sellers’ trade accounts receivable and other
rights to payment from third parties, including, without limitation, customers
and employees, and all security interests or rights associated with such
accounts and rights, all notes payable to Sellers and all security interests
or
rights associated therewith and any claim, remedy or other right related
to any
of the foregoing, in each case whenever accrued, including those that arise
from
the conduct of the Business and relate to the period prior to the Closing
Date.
“Action”
shall mean any action, suit, arbitration or proceeding by or before any
Governmental Authority.
“Affiliate”
(and, with a correlative meaning, “Affiliated”) shall mean, with respect to any
Person, either (i) any other Person that directly, or indirectly through
one or
more intermediaries, controls, or is controlled by, or is under common control
with, such Person, or (ii) the ownership of 50% or more of the voting securities
or interest of or in a Person.
2
“Agreement”
shall have the meaning set forth in the Preamble.
“Ancillary
Agreements” shall mean, collectively, the Trademark License Agreement, the
Technology Agreement, the Software License Agreement, the Offtake Agreement,
the
Mixing Agreement, the Supply Agreement, the Raw Materials Agreement, the
Service
Agreement, the Employee Leasing Contract, the Sublease, the Xxxx of Sale,
the
Assumption Agreement, the Special Warranty Deed, the Personal Property Lease
Assignment, the Farm Lease Assignment, the Sublease, the Estoppel Certificate
(when and to the extent executed by the lessor of the Xxxx Road Lease), and
the
Bailment Agreement.
“Assumed
Contracts” shall have the meaning assigned to such term in Section 2.1(a)(iii)
hereof.
“Assumed
Leases” shall have the meaning assigned to such term in Section 2.1(a)(ix)
hereof.
“Assumed
Liabilities” shall have the meaning assigned to such term in Section 2.5
hereof.
“Assumption
Agreement” shall have the meaning assigned to such term in Section 3.2(a)(ii)
hereof.
“Bailment
Agreement” shall have the meaning assigned to such term in Section 3.2(a)(xv)
hereof.
“Base
Closing Inventory Value” shall mean the sum of the Finished Goods Amount, the
In-Process Amount and the Raw Materials Amount.
“Xxxx
of
Sale” shall have the meaning assigned to such term in Section 3.2(a)(i) hereof.
“Business”
shall have the meaning set forth in the Recitals.
“Business
Day” shall mean any day that is not a Saturday, Sunday or other day on which
banks are required or authorized by Law to be closed in Akron, Ohio or Chicago,
Illinois.
“Canadian
Inventory Transfer” shall have the meaning assigned to such term in Section 6.16
hereof.
“Cash”
shall mean all cash, time deposits, bank accounts (including, without
limitation, all collection accounts and any balances therein), certificates
of
deposit, marketable securities, short-term investments and other cash
equivalents of any Seller.
“CERCLA”
shall have the meaning assigned to such term in the definition of Environmental
Laws set forth in this Section 1.1.
3
“Closing”
shall have the meaning assigned to such term in Section 3.1 hereof.
“Closing
Date” shall have the meaning assigned to such term in Section 3.1
hereof.
“COBRA”
shall have the meaning assigned to such term in Section 7.1(g)
hereof.
“Code”
shall mean the Internal Revenue Code of 1986, as amended, and any successor,
including rules issued and regulations promulgated thereunder.
“Collateral
Agreements” shall mean, collectively (i) the Master Guarantee and Collateral
Agreement, dated as of March 31, 2003, as Amended and Restated as of February
19, 2004, among Goodyear, certain Affiliates of Goodyear, the Lenders party
thereto and XX Xxxxxx Xxxxx Bank, as Collateral Agent, (ii) the Guarantee
and
Collateral Agreement, dated as of August 17, 2004, among Goodyear, the
Subsidiaries of Goodyear identified as Grantors and Guarantors therein, the
Lenders party thereto and XX Xxxxxx Chase Bank, as Collateral Agent, (iii)
the
Collateral Agreement, dated as of March 12, 2004, among Goodyear, certain
subsidiary guarantors of Goodyear and Wilmington Trust Company, as Collateral
Agent, (iv) the Canadian Guarantee and Collateral Agreement, dated as of
March
31, 2003, between Goodyear Canada Inc., as Canadian Guarantor, and XX Xxxxxx
Xxxxx Bank, as Collateral Agent, (v) the Canadian Guarantee and Collateral
Agreement, dated as of March 12, 2004, between Goodyear Canada Inc., as a
Canadian Guarantor and Wilmington Trust Company, as Collateral Agent and
(vi)
Guarantee and Collateral Agreement [Canada], dated as of August 17, 2004,
between Goodyear Canada Inc. and XX Xxxxxx Chase Bank, in its capacity as
Collateral Agent under a Deposit-Funded Credit Agreement, dated as of August
17,
2004.
“Collective
Bargaining Agreement” shall mean Agreement between The Kelly-Springfield Tire
Company Freeport Plant and Local No. 745, United Steelworkers of America,
AFL-CIO, effective April 7, 2004, and all memoranda of agreement, letters
of
understanding and other documents appended thereto, executed in connection
therewith or incorporated or referred to therein.
“Confidentiality
Agreement” shall mean the Confidentiality Agreement, dated as of October 22,
2003, by and between Goodyear and Purchaser.
“Consent”
shall mean any consent, approval, authorization, waiver, Permit, grant,
franchise, concession, agreement, license, exemption or order of, registration,
certificate, declaration or filing with, or report or notice to any
Person.
“Contract”
shall mean any written contract, agreement, license, lease or other commitment,
in each case to the extent legally binding.
“Custom
Label Contracts” shall mean, collectively, the Assumed Contracts to which TBC
Corporation and Universal Cooperatives, Inc. are parties.
4
“Damages”
shall have the meaning assigned to such term in Section 10.2
hereof.
“Dollars”
or “$” shall mean United States Dollars.
“Employees”
shall have the meaning assigned to such term in Section 4.10
hereof.
“Employee
Benefit Plans” shall have the meaning assigned to such term in Section 4.9
hereof.
“Employee
Leasing Contract” shall have the meaning assigned to such term in Section
3.2(a)(xiv) hereof.
“Environmental
Law” or “Environmental Laws” shall
mean all applicable Laws (a) of the United States of America, and (b) the
State
of
Illinois relating to: (i) pollution, protection of the environment or
environmental contamination, (ii) the manufacture, use, storage, treatment,
generation, transportation, distribution, processing, handling, release or
disposal of Hazardous Substances, (iii) public health and safety, or (iv)
employee health and safety. Without limiting the generality of the foregoing,
such Environmental Laws include, but are not limited to, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), the
Resource Conservation and Recovery Act of 1976, and the Occupational Safety
and
Health Act of 1970, each as amended.
“Environmental
Permits” shall mean any and all Permits required under any and all applicable
Environmental Laws to operate the Freeport Facility and to use the Purchased
Assets located at the Freeport Facility in connection with the
Business.
“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended
as of
the date hereof.
“Estoppel
Certificate” shall have the meaning assigned to such term in Section 6.13(a)
hereof.
“Excluded
Assets” shall have the meaning assigned to such term in Section 2.2
hereof.
“Excluded
Contracts” shall have the meaning assigned to such term in Section 2.2(j)
hereof.
“Excluded
Design Defect Claim” shall have the meaning assigned to such term in Section
2.6(i) hereof.
“Excluded
Liabilities” shall have the meaning assigned to such term in Section 2.6
hereof.
5
“Farm
Lease Assignment” shall have the meaning assigned to such term in Section
3.2(a)(vi) hereof.
“Farm
Leases” shall mean, collectively, the leases by and between Goodyear and Xxxxx
Xxxx listed in Schedule 2.1(a)(ix) hereto, with respect to the unimproved
portions of Owned Real Property described therein.
“Farm
Tires” shall have the meaning assigned such term in the Recitals.
“Farm
Tire Handbook” shall have the meaning assigned such term in the
Recitals.
“Federal
WARN Act” shall mean the Worker Adjustment and Retraining Notification Act, 29
U.S.C. § 2101, et. seq.
“Finished
Goods Amount” shall mean the sum of (i) the sum of the Finished Goods Standard
Cost Amounts of all finished goods inventories of tires included in the
Inventories and (ii) valuation allowances, determined as of the Closing Date
in
accordance with the past practices of Goodyear, for variances, freight and
scrap
related thereto.
“Finished
Goods Standard Cost Amount” shall mean, as to any finished tire included in the
Inventories, the product of (A) the number of finished goods inventories
of such
tire included in the Inventories and (B) the Standard Cost assigned by Goodyear
to such tire as of the Closing Date.
“Freeport
Facility” shall mean, collectively, the Owned Real Property and the Leased Real
Property.
“GAAP”
shall mean United States generally accepted accounting principles.
“Goodyear
Names and Marks” shall mean, collectively, the corporate name of any Seller or
any of the Affiliates of any Seller in any jurisdiction, or any trademark,
trade
name, trade dress, logo, symbol, device, URL, service xxxx or copyright,
whether
or not registered, including all common law rights, and registrations and
applications for registration thereof, including, but not limited to, all
marks
registered in the United States Patent and Trademark Office, the Trademark
Offices of the States and Territories of the United States of America, and
the
trademark offices of other nations throughout the world, and all rights therein
provided by multinational treaties or conventions, or any application or
registration therefor, owned, licensed or used by any Seller or any of the
Affiliates of any Seller, which includes, without limitation and in any form,
the name “Xxxxx,” or “Kelly-Springfield”, the word “Powermark”, the word
“Goodyear” or the term “Goodyear (and winged foot design),” the winged foot
design, the blimp design or any other identification that suggests, simulates
or
is confusing by similarity to any of any Seller’s or its Affiliates’
identification.
6
“Governmental
Authority” shall mean any federal state or local, or any foreign, government,
governmental, regulatory or administrative authority, agency or commission
or
any court, tribunal or arbitral or judicial body.
“Hazardous
Substance” or “Hazardous Material” shall mean any substance, compound, mixture,
waste or material that is defined to be, or is listed as, hazardous or toxic
under any applicable Environmental Law, or any substance, compound, mixture,
waste or material that is regulated or requires reporting, investigation,
removal or remediation, under any applicable Environmental Law.
“HSR
Act”
shall mean the Xxxx Xxxxx Xxxxxx Antitrust Improvements Act of 1976, and
the
rules and regulations thereunder, in each case as amended.
“
Illinois
WARN Act” shall mean the
Illinois Worker Adjustment and Retraining Notification
Act, 820 ILCS 65/1.
“Indemnifiable
Claim” shall have the meaning assigned to such term in Section 10.4(a)
hereof.
“Indemnified
Party” shall have the meaning assigned to such term in Section 10.4(a)
hereof.
“Indemnifying
Party” shall have the meaning assigned to such term in Section 10.4(a)
hereof.
“Indemnity
Notice” shall have the meaning assigned to such term in Section 10.4(a)
hereof.
“Initial
Study” shall have the meaning assigned to such term in Section 8.1(b)(ii)(A)
hereof.
“In-Process
Amount” shall mean, as to all in process Inventories, (A) the product of (i) the
inventory item count of such Inventories and (ii) the Standard Cost assigned
by
Goodyear to each such item as of the Closing Date, plus (B) valuations,
determined as of the Closing Date in accordance with the past practices of
Goodyear, for variances related thereto.
“Intellectual
Property” shall mean, collectively, (i) the Know How and the Patents (as such
terms are defined in the Technology Agreement) and (ii) the Licensed Marks.
“Inventories”
shall mean, collectively, (i) all finished goods inventories with respect
to
Farm Tires, and any finished goods inventories of tires in such categories
comprised by Farm Tires and bearing any of the Goodyear Names and Marks,
including, without limitation, the name “Xxxxx” or the word “Powermark” (other
than in respect of any Farm Tires (A) that constitute Excluded Assets, (B)
that
are not located in the United States, Canada or Mexico or (C) that have been
transferred to or are located at any Seller’s, or any Seller’s Affiliate’s,
retail outlets), (ii) all work-in process inventories of Farm Tires and tires
covered by the Offtake Agreement and the Custom Label Contracts
located at the Freeport Facility, (iii) all packaging materials with respect
to
any Inventories and located at the Freeport Facility and (iv) all raw materials,
supplies and consumables located at the Freeport Facility.
7
“IRS”
shall mean the United States Internal Revenue Service.
“Knowledge”
shall mean, (i) as to Sellers, the actual knowledge of any of the officers
of
the respective Sellers set forth on Schedule A hereto and the current Human
Resource Manager and Plant Manager at the Freeport Facility and (ii) as to
Purchaser, the actual knowledge of any of the officers of Purchaser set forth
on
Schedule B hereto.
“Xxxx
Road Lease” shall mean the Lease, dated February 14, 1989 between Goodyear and
Ivy Corporation, relating to certain property situated at 000 Xxxx Xxxx Xxxx,
Xxxxxxxx, Xxxxxxxx.
“Law”
shall mean any statute, law, ordinance, regulation, rule, code, order or
requirement of or issued by any Governmental Authority, as in effect on the
date
hereof.
“Lease
Assignments” shall have the meaning assigned to such term in Section 3.2(a)(vi)
hereof.
“Leased
Real Property” shall mean the real property and improvements leased to Goodyear
under the Xxxx Road Lease.
“Leased
Salaried Employees” shall have the meaning assigned to such term in Section
7.1(a) hereof.
“License
Agreements” shall mean, collectively, the Trademark License Agreement, the
Technology Agreement and the Software License Agreement.
“Licensed
Marks” shall have the meaning assigned to such term in the Trademark License
Agreement.
“Licensed
Products” shall have the meaning assigned to such term in the Trademark License
Agreement.
“Lien”
shall mean any security interest, pledge, mortgage, lien, charge, restriction
or
other encumbrance, including any Tax lien, but other than any Permitted
Lien.
“Local
Union” shall have the meaning assigned to such term under Section 7.1(d)
hereof.
“Material
Adverse Effect” or “Material Adverse Change” shall mean any effect, change,
event, or development that is or would be materially adverse to the purchased
assets, operations, or business prospects of the Business or on the ability
of
Sellers to consummate timely the transactions contemplated
hereby other than any effect, change, event or development relating to the
announcement or performance of this Agreement or any of the Ancillary Agreements
including, in each case, the impact thereof on relationships with customers,
suppliers or competitors.
8
“Material
Permits” shall have the meaning assigned such term in Section 4.13
hereof.
“Mixing
Agreement” shall have the meaning assigned to such term in Section 3.2(a)(viii)
hereof.
“Nitrogen
Storage Tank” shall mean the machinery, fixtures, equipment and improvements
installed at the Owned Real Property pursuant to the Bulk Product Agreement,
dated as of May 7, 1999, by and between Goodyear and Air Liquide America
Corporation.
“Non-Competition
Covenants” shall mean, collectively, the covenants of Sellers set forth in
Section 6.12 hereof.
“Neutral
Auditor” shall have the meaning assigned to such term in Section 2.4(d)
hereof.
“Offtake
Agreement” shall have the meaning assigned to such term in Section 3.2(a)(vii)
hereof.
“Ordinary
Course of Business” shall mean, with respect to any Person, the ordinary course
of business consistent with such Person’s past custom and practice (including
with respect to quantity and frequency), taking into account all relevant
circumstances, including, without limitation, the season in which such action
is
taken, and shall include, without limitation, all actions of such Person
that do
not require approval from the board of directors, shareholders or Persons
exercising similar authority in respect of such Person.
“Owned
Real Property” shall mean those certain parcels of real estate owned by Xxxxx
and generally situated at 0000 Xxxxx 00 Xxxx, Xxxx of Freeport, Xxxxxxxxxx
County, State of
Illinois, containing approximately 260 acres of land, including
the existing building of approximately 1,201,890 square feet, together with
all
appurtenant easements, improvements, mineral rights and fixtures, as described
in Schedule 4.3
hereto and in the Title Commitment,
excluding the Nitrogen Storage Tank and any and all other fixtures owned
by any
third party, but including the land which is the subject of the Farm Leases.
“OSHA”
shall mean the Occupational Safety and Health Act of 1970.
“PCBs”
shall have the meaning assigned to such term in Section 6.13(d)
hereof.
“Permits”
shall mean permits, approvals, consents, variances and other similar
authorizations of Governmental Authorities.
“Permitted
Liens” shall mean all Liens that (a) arise out of Taxes or general or special
assessments not yet due and payable without penalty or interest or the validity
of which is being contested in good faith by appropriate proceedings, or
(b) of
carriers, warehousemen, mechanics, materialmen and other similar persons
or
otherwise imposed by law which are incurred in the Ordinary Course of Business
for sums not yet due and payable or are being contested in good faith and
(c) in
respect of the Freeport Facility that constitute any of the following (unless
Purchaser’s review of the Survey discloses a material issue): (A) building and
use restrictions and easements of record, (B) present or future zoning or
building codes, regulations or restrictions, (C) liens for real property
or ad
valorem taxes and assessments, which are not yet due and (d) in addition,
in
respect of the Freeport Facility matters that are disclosed by the Title
Commitment (other than, solely for the purposes of Section 9.3(i) for Title
Objections).
9
“Person”
shall mean any individual, firm, corporation, partnership, limited liability
company, joint venture, association, estate, trust, governmental agency or
body
or other entity.
“Personal
Property Lease Assignment” shall have the meaning assigned to such term in
Section 3.2(a)(v) hereof.
“Personal
Property Leases” shall have the meaning assigned to such term in Section
2.1(a)(iv) hereof.
“Phase
II
Report” shall have the meaning assigned to such term in Section 8.1(a)
hereof.
“Phase
II
Report Due Date” shall have the meaning assigned to such term in Section 8.1(a)
hereof.
“Prepaid
Royalty” shall have the meaning assigned to such term in Section 2.3
hereof.
“Purchase
Price” shall have the meaning assigned to such term in Section 2.3
hereof.
“Purchased
Assets” shall have the meaning assigned to such term in Section 2.1(a)
hereof.
“Purchaser”
shall have the meaning set forth in the Preamble.
“Purchaser’s
Representative” shall have the meaning assigned to such term in Section 2.4(d)
hereof.
“Purchaser
New Hires” shall have the meaning assigned to such term in Section 7.1(a)
hereof.
“Raw
Materials Agreement” shall have the meaning assigned to such term in Section
3.2(a)(xi) hereof.
10
“Raw
Materials Amount” shall mean, as to all Inventories other than finished goods
inventories of tires and in-process inventories, (A) the product of (i) the
inventory item (or, as applicable, volume) count of such Inventories and
(ii)
the Raw Materials Standard Cost assigned by Goodyear to each such item as
of the
Closing Date, plus (B) valuations, determined as of the Closing Date in
accordance with the past practices of Goodyear, for variances related
thereto.
“Raw
Material Standard Cost” shall mean, as to any Inventories other than in-process
and finished goods Inventories, the acquisition cost thereof, determined
in
accordance with the past practices of Goodyear.
“Remedial
Action” shall mean any action to investigate, evaluate, assess, including
without limitation, risk assessment of, test, monitor, remove, respond to,
treat, xxxxx, remedy, correct, clean-up or otherwise remediate the release
or
presence of any Hazardous Substance under this Agreement and includes any
period
of post-closure or remediation monitoring and any operation and maintenance
relating to such remedial activities.
“Remedial
Problems” shall have the meaning assigned to such term in Section
8.1(b)(iii).
“Reports”
shall have the meaning assigned to such term in Section 4.4 hereof.
“Resolution
Period” shall have the meaning assigned to such term in Section 2.4(c)
hereof.
“Seller”
and “Sellers” shall have the meanings set forth in the Preamble.
“Seller
Required Approvals” shall have the meaning assigned to such term in Section
4.2(b) hereof.
“Sellers’
Representative” shall have the meaning assigned to such term in Section 2.4(d)
hereof.
“Service
Agreement” shall have the meaning assigned to such term in Section 3.2(a)(ix)
hereof.
“Settlement
Date” shall have the meaning assigned to such term in Section 8.1(b)
hereof.
“Software
License Agreement” shall have the meaning assigned to such term in Section
3.2(a)(xvi) hereof.
“Special
Warranty Deed” shall have the meaning assigned to such term in Section
3.2(a)(iii) hereof.
“Standard
Cost” shall mean, as to any in process or finished goods inventories, the
standard cost assigned thereto by Goodyear in accordance with the past practices
of Goodyear, and shall include,
without limitation, estimates for direct labor, direct materials, and overhead
required to produce the product.
11
“Sublease”
shall have the meaning assigned to such term in Section 3.2(a)(iv) hereof.
“Supply
Agreement” shall have the meaning assigned to such term in Section 3.2(a)(x)
hereof.
“Survey”
shall have the meaning assigned to such term in Section 6.13(c)
hereof.
“Tax”
or
“Taxes” shall mean all taxes, levies, imposts, fees, duties and other like
charges of any nature whatsoever imposed by a Governmental Authority responsible
for the imposition of any such Tax (each a “Taxing Authority”), including,
without limiting the generality of the foregoing, all income, sales, use,
ad
valorem, stamp, transfer, payroll, franchise and intangible Taxes and fees
of
any nature upon properties or assets, whether tangible or intangible, or
upon
the income, receipts, payrolls, transactions, net worth, capital, investment
or
franchise of a Person (including all sales, use, withholding and other taxes
which a Person is required by Law to collect and pay over to, or to pay to,
any
Taxing Authority), together with any and all additions thereto and penalties
and
interest payable with respect thereto or to any assessment or collection
thereof.
“Tax
Return” means any return (including any information return), report, statement,
schedule, notice, form or other document or information filed with or submitted
to, or required to be filed with or submitted to, any Governmental Authority
in
connection with the determination, assessment, collection or payment of any
Tax
or in connection with the administration, implementation or enforcement of,
or
compliance with, any Law relating to any Tax.
“Taxing
Authority” shall have the meaning assigned to such term in the definition of
“Tax”.
“Technology
Agreement” shall have the meaning assigned to such term in Section 3.2(a)(xiii)
hereof.
“Third
Party Claim” shall have the meaning set forth in Section 10.4(b)
hereof.
“Titan
International Guaranty” shall mean the Guaranty of Titan International, Inc. as
set forth in Exhibit R.
“Title
Commitment” shall have the meaning assigned to such term in Section 6.13(b)
hereof.
“Title
Company” shall have the meaning assigned to such term in Section 6.13(b)
hereof.
12
“Trademark
License Agreement”
shall
have the meaning assigned to such term in Section 3.2(a)(xii)
hereof.
“Type
I
Remedial Problems” shall have the meaning assigned to such term in Section
8.1(b)(i) hereof.
“Type
II
Remedial Problems” shall have the meaning assigned to such term in Section
8.1(b)(ii) hereof.
“Warranty
Claim” shall have the meaning assigned to such term in Section 10.5(a)
hereof.
Section
1.2 Definitions
Can be Substantive.
If any
provision in a definition is a substantive provision conferring rights or
imposing obligations on any party hereto, notwithstanding that it appears
only
in Article I hereof, effect shall be given to it as if it were a substantive
provision of this Agreement.
Section
1.3 Definitions
Not in Article I.
Where
any
term is defined within the context of any particular Section or Clause in
this
Agreement, the term so defined, unless it is clear from the Section or Clause
in
question that the term so defined has limited application to the relevant
Section or Clause, shall bear the meaning ascribed to it for all purposes
in
terms of this Agreement, notwithstanding that that term has not been defined
in
this Article I.
Section
1.4 Non-Business
Day Performance.
Where
any
payment falls due or any other obligation is to be performed on a day, that
is
not a Business Day in the jurisdiction where such payment is to be made or
such
obligation is to be performed, then such payment shall be made or such
obligation performed on the next succeeding Business Day.
Section
1.5 Calculation
of Day Periods.
Except
as otherwise specifically provided in this Agreement, where in this Agreement
any number of days is prescribed in relation to the doing of a particular
thing
or in respect of a period of time, those days will be calculated exclusive
of
the first day and inclusive of the last day.
ARTICLE
II
PURCHASE
AND SALE OF ASSETS
Section
2.1 Purchase
and Sale.
(a)
On
the
terms and subject to the conditions set forth herein, at the Closing, Goodyear
shall sell, convey, transfer, assign and deliver to Purchaser and Purchaser
shall purchase and accept from Goodyear, all of Goodyear’s right, title and
interest in and to all of the following assets, except to the extent any
of the
following constitute Excluded Assets (the following assets, collectively
with
the assets described in Sections 2.1(b) and 2.1(c) hereof, the “Purchased
Assets”):
13
(i) all
vehicles and rolling stock, and all furniture, fixtures, molds, building
drums,
equipment, office supplies, tools, machinery and other tangible personal
property owned by
Goodyear on the Closing Date and used in the manufacture of Farm Tires,
including those
(A)
located at the Freeport Facility or in transit thereto or (B) described in
Schedule 2.1(a)(i) hereto;
(ii) all
Inventories owned by Goodyear on the Closing Date; provided, that, in the
event
either of the Custom Label Contracts cannot be assigned prior to the Closing
despite compliance with Section 6.4 hereof, the work-in-process and finished
goods Inventories manufactured thereunder shall constitute Excluded
Assets;
(iii) the
rights of Goodyear in respect of the period following the Closing under (A)
the
Contracts listed in Schedule 2.1(a)(iii) hereof and (B) any other Contract
that
(y) amends, supplements, restates or replaces any such Contract and that
is
entered into by Goodyear in the Ordinary Course of Business with respect
to the
Business between the date hereof and the Closing Date or (z) Goodyear and
Purchaser hereafter agree in writing shall be transferred hereunder
(collectively, the “Assumed Contracts”);
(iv) the
rights of Goodyear in respect of the period following the Closing under the
leases of tangible personal property listed in Schedule 2.1(a)(iv) hereof
(the
“Personal Property Leases”);
(v) all
books, records, files, plans, studies, reports, manuals, handbooks, catalogs,
brochures, correspondence and other materials, whether in hard copy, electronic
or any other form or media, including, without limitation, all books, records,
files, plans, studies, reports, manuals, handbooks, catalogs, brochures,
correspondence and other materials pertaining to accounting, real and personal
property taxes on the Purchased Assets, Assumed Leases, sales, farm tire
dealers, pricing, costs, financial performance, marketing, advertising,
promotions, suppliers, customers, human resources, inventory, engineering,
manufacturing, business plans and strategies and product development located
at
the Freeport Facility (except any of the above that constitute Intellectual
Property, software or the website URL “xxx.xxxxxxxxxx.xxx”) (collectively,
“Books and Records”) and owned by Goodyear at the Closing Date, to the extent
relating to the Business or the Purchased Assets;
(vi) the
rights of Goodyear in respect of the period following the Closing under the
utility service agreements listed on Schedule 2.1(a)(vi) hereto;
(vii)
the
rights of Goodyear in respect of the period following the Closing under all
Permits, and Environmental Permits if any, and all pending applications
therefor, if any, in each case to the extent (A) related exclusively to the
Purchased Assets or (B) related to the operation of the Freeport Facility,
and
held by Goodyear as of the Closing Date, a complete
14
list
of
which (and which identifies such of the foregoing Permits as are not, by
their
terms, transferable), as of the date hereof, is set forth on Schedule 2.1(a)
(vii) hereto;
(viii) molds
and, as to each mold, an associated building drum relating to the Skid Steer
and
Large Terra tires, and to the extent of unique building drums relating to
the
Skid Steer and Large Terra tires, the unique building drums; provided that,
as
to 32” Large Terra tires, the existing drum at Goodyear’s Topeka, Kansas
manufacturing facility shall be retained by Sellers and shall constitute
an
Excluded Asset hereunder; and
(ix) all
rights of Goodyear in respect of the period following the Closing under the
Farm
Leases listed in Schedule 2.1(a)(ix) hereof (collectively with the Personal
Property Leases, the “Assumed Leases”).
(b)
On
the
terms and subject to conditions set forth herein, at the Closing, Xxxxx shall
sell, convey, transfer, assign and deliver to Purchaser and Purchaser shall
purchase and accept from Xxxxx, all of Kelly’s right, title and interest in and
to all of the following assets, except to the extent any of the following
constitute Excluded Assets:
| (i) |
the
Owned Real Property; and
|
(ii) all
Books
and Records owned by Xxxxx at the Closing Date, to the extent relating to
the
Freeport Facility.
(c) On
the
terms and subject to conditions set forth herein, at the Closing, Goodyear
Canada and Goodyear Mexico shall sell, convey, transfer, assign and deliver
to
Purchaser and Purchaser shall purchase and accept from Goodyear Canada and
Goodyear Mexico, all of the right, title and interest of each of Goodyear
Canada
and Goodyear Mexico in and to the following assets, except to the extent
any of
the following constitute Excluded Assets:
(i) all
of
the Inventories owned by Goodyear Canada or Goodyear Mexico as of the Closing
Date; provided, however, that, in the event Goodyear Canada effects the Canadian
Inventory Transfer, Goodyear Canada shall, subject to Section 6.16 hereof,
transfer to Purchaser, in addition to the Inventories owned by Goodyear Canada
as of the Closing Date (or in lieu of such Inventories in the event Goodyear
Canada sells all such Inventories pursuant to the Canadian Inventory Transfer)
all Accounts Receivable of Goodyear Canada arising directly out of, and relating
exclusively to, the Canadian Inventory Transfer; and
(ii) all
Books
and Records owned by Goodyear Canada or Goodyear Mexico at the Closing Date,
to
the extent relating to the Inventories described in Clause (i) of this Section
2.1(c).
15
Section
2.2 Excluded
Assets.
Notwithstanding the provisions of Section 2.1 hereof, the following assets,
properties and rights, to the extent owned by or inuring to the benefit of
any
one or more Sellers (collectively, the “Excluded Assets”) are expressly excluded
from the purchase and sale contemplated hereby and from the definition of
the
term “Purchased Assets” hereunder, in each case whether or not related to or
used or held for use in connection with the Purchased Assets, the Freeport
Facility or the Business:
(b) all
Accounts Receivable, other than the Accounts Receivable, if any, to be
transferred by Goodyear Canada pursuant to Section 2.1(c) hereof, which will
not
constitute Excluded Assets, except for the portion thereof that constitute
Excluded Assets under Section 6.16. hereof;
(c) all
assets not owned by Sellers as of the Closing, including, without limitation,
all raw materials held under consignment agreements or arrangements with
third
parties, all property owned by any third party and leased or held by any
Seller
under any of the Assumed Leases or Assumed Contracts (including, without
limitation, the Nitrogen Storage Tank and all the equipment owned by TBC
Corporation or Universal Cooperatives, Inc. or held under either of the Custom
Label Contracts) in each case identified in Schedule 2.2(c) hereof;
(d) subject
to the Trademark License Agreement, all of the Goodyear Names and Marks,
including, without limitation, the Licensed Marks;
(e) all
rights and obligations under any and all employee benefit plans of each Seller,
including, without limitation, the Employee Benefit Plans, and all assets,
records and vendor arrangements associated with any such plan, whether held
by
one or more Sellers, in trust or otherwise;
(f) all
casualty, liability or other insurance policies owned by or obtained on behalf
of any Seller and all claims or rights under any such insurance
policies;
(g) any
federal, state or local, or any foreign, claim, cause of action, right of
recovery or refund with respect to any Tax including, without limitation,
income
Tax refunds, franchise Tax refunds, duty draw backs on export sales; sales
and
use Tax refunds; real property Tax refunds; and personal property Tax refunds
(except in respect of any refunds of Taxes, in respect of and relating to
periods following the Closing) and all other claims and rights in respect
of the
foregoing;
(h) other
than the Owned Real Property, all owned real property, all leased real property
and any other interest in real property along with all appurtenant rights,
easements and privileges appertaining or relating thereto;
16
(i) (A)
all
of each Seller’s finished goods, work-in process inventories, raw materials,
consumables and supplies that are not Inventories; and (B) any Inventories
that
constitute Excluded Assets under Section 2.1(a)(ii) hereof;
(j) all
rights under the Contracts pertaining to the Purchased Assets or the Business
listed on Schedule 2.2(j)
or
Schedule 6.15 hereto (collectively, the “Excluded Contracts”);
(k) subject
to the Technology Agreement, all Intellectual Property, and all (i) inventions,
whether or not patentable, whether or not reduced to practice or whether
or not
yet made the subject of a pending patent application or applications, (ii)
ideas
and conceptions of potentially patentable subject matter, including, without
limitation, any patent disclosures, whether or not reduced to practice and
whether or not yet made the subject of a pending patent application or
applications, (iii) national (including the United States) and multinational
statutory invention registrations, patents, patent registrations and patent
applications (including all reissues, divisions, continuations,
continuations-in-part, extensions and reexaminations) and all rights therein
provided by multinational treaties or conventions and all improvements to
the
inventions disclosed in each such registration, patent or application, (iv)
copyrights (registered or otherwise) and registrations and applications for
registration thereof, and all rights therein provided by multinational treaties
or conventions, (v) moral rights (including, without limitation, rights of
paternity and integrity), and waivers of such rights by others, (vi) trade
secrets and confidential, technical or business information (including ideas,
formulas, compositions, inventions, and conceptions of inventions whether
patentable or unpatentable and whether or not reduced to practice), (vii)
whether or not confidential, technology (including know-how and show-how),
manufacturing and production processes and techniques, research and development
information, drawings, specifications, designs, plans, proposals, technical
data, copyrightable works, financial, marketing and business data, pricing
and
cost information, business and marketing plans and customer and supplier
lists
and information, (viii) copies and tangible embodiments of all the foregoing,
in
whatever form or medium and (ix) rights to obtain and rights to apply for
patents, and to register trademarks and copyrights;
(l) except
in
respect of the Assumed Leases, all leases in respect of any computer hardware
or
equipment located at the Freeport Facility and listed on Schedule 2.2(l)(i),
all
computer hardware and leased equipment not located at the Freeport Facility,
and, subject to the Software License Agreement, all computer software (located
at or used on the computer equipment located at the Freeport Facility or
otherwise), including, without limitation, source code, operating systems
and
specifications, applications and configurations, data, data bases, files,
documentation and other materials related thereto, data and documentation,
including, without limitation, those described on Schedule 2.2(l)(ii), and
all
licenses and sublicenses in respect of any such computer software, data and
documentation as well as all Internet addresses, websites and URLs, including,
without limitation, “xxx.xxxxxxxxxx.xxx”;
17
(m) all
prepaid expenses, advances and deposits of each Seller, whether or not related
to the Business, and all rights of each Seller under or in respect thereof,
in
each case whether recorded or unrecorded;
(n) the
automobile leases listed in Schedule 2.2(n) hereto, and the automobiles leased
thereunder;
(o) all
inter-company receivables and inter-company prepaid expenses of any Seller
or
any Affiliate, division or business sector or unit thereof, including the
Business;
(p) all
Contracts identified on Schedule 2.2(p)(ii) and all molds and all unique
drums
identified in Schedule 2.2(p)(iii) (each as defined in the Offtake Agreement),
used or held for use by any Seller in connection with, the manufacture,
distribution or sale of the categories of tires listed in Schedule 2.2(p)(i)
hereto;
(q) all
of
the Books and Records (including all books of account and all supporting
vouchers, invoices and other records and materials) of each Seller, (i) relating
to any Taxes of such Seller (subject to the rights of Purchaser under Section
6.9 hereof), (ii) constituting personnel records, (subject to the rights
of
Purchaser under Article VII) corporate records, articles of incorporation,
by-laws, minute books, stock or stock transfer records or other organizational
documents or records of such Seller, (iii) which such Seller is required
by Law
to retain in its possession or (iv) which are subject to or protected by
any
privilege from disclosure under applicable Law;
(r) all
telephone, telecopy and e-mail addresses and listings of each
Seller;
(s) all
claims, causes of action, choses in action, rights of recovery and rights
to set
off or compensation of any kind (including rights under and pursuant to all
warranties, representations and guarantees made by suppliers) against third
parties, but excluding all such assets (including rights under and pursuant
to
all warranties, representations and guarantees made by suppliers) relating
to or
arising out of the Purchased Assets or the Business or related to any raw
materials or contracts in respect thereof;
(t) all
of
each Seller’s rights under this Agreement and each of the agreements, documents
and instruments contemplated to be executed or delivered hereunder or in
connection herewith, including, without limitation, each of the Ancillary
Agreements;
(u) all
of
each Seller’s assets not used in connection with the manufacture of Farm Tires
at the Freeport Facility and not located at the Freeport Facility;
(v) all
of
each Seller’s rights and assets under or related to any and all agreements,
contracts, instruments and/or arrangements between such Seller and any utility
service provider, including,
without limitation, any provider of electricity, gas, water, sewerage, telephone
or internet access services other than those that relate to the Freeport
Facility or that constitute Purchased Assets under Section 2.1(a)(vi) hereof;
and
18
(w) all
of
the other property and assets described on Schedule 2.2(w) hereto.
Section
2.3 Consideration
To Be Paid by Purchaser.
As
consideration for the sale, transfer and assignment of the Purchased Assets,
and
for the Non-Competition Covenants, Purchaser shall, (a) pay to Sellers the
purchase price as defined and determined pursuant to Section 2.4 hereof (the
“Purchase Price”) and (b) assume the Assumed Liabilities (as hereinafter
defined). At the Closing, Purchaser shall pay to Sellers One Hundred Million
and
No/100 ($100,000,000.00) Dollars (the “Preliminary Purchase Price”) by wire
transfer of immediately available U.S. denominated funds in accordance with
the
wire transfer instructions set forth on Schedule 2.3(a) hereto. The parties
acknowledge and agree that the Purchase Price payable hereunder includes
payment
in full by Purchaser for a non-refundable prepaid royalty, which prepaid
royalty
is payable in addition to all amounts due or to become due under the Technology
Agreement for the rights granted under the Technology Agreement, including,
without limitation, the rights granted to Purchaser in respect of the Licensed
Patents and the Know How (each as defined in the Technology Agreement) (the
“Prepaid Royalty”), in an amount equal to the amount allocated to such Prepaid
Royalty under Section 2.8 hereof.
Section
2.4 Preliminary
Purchase Price; Determination of Purchase Price
The
Preliminary Purchase Price is based on the net book value of property and
equipment of the Purchased Assets (other than Inventories) of Forty-four
Million
Six Hundred Thousand and No/100 ($44,600,000) Dollars (the “Property and
Equipment Value”) and an estimated Inventory value of Forty-six Million Three
Hundred Thousand and No/100 $46,300,000 Dollars (the “Estimated Inventory
Value”). The Purchase Price shall be determined as follows:
(a) As
soon
as practicable, but in no event later than sixty (60) days following the
Closing
Date, Purchaser shall prepare a calculation of the value of the Inventory
as of
the Closing Date (the “Closing Inventory Value”). The Closing Inventory Value
shall be (i) the Base Closing Inventory Value, (ii) plus the amount of the
Accounts Receivable of Goodyear Canada, if any, less the adjustment set forth
in
Section 6.16, if any, arising from the Canadian Inventory Transfer pursuant
to
Section 6.16 hereof.
(b) During
the calculation of the Closing Inventory Value and the period of any dispute
within the contemplation of this Section 2.4, Sellers shall (i) provide
Purchaser and Purchaser’s authorized representatives with reasonable access
during normal business hours to the books, records, facilities and employees
of
Sellers concerning the Inventories, and (ii) cooperate with Purchaser’s and
Purchaser’s authorized representatives’ reasonable requests with respect to the
19
calculation
of the Closing Inventory Value, including by providing on a timely basis
all
information necessary or useful in calculating the Closing Inventory
Value.
(c) Purchaser
shall deliver a written statement of the Closing Inventory Value (the “Closing
Inventory Value Statement”) to Sellers promptly after it has been prepared.
After receipt of the Closing Inventory Value Statement, Sellers shall have
sixty
(60) days to review the Closing Inventory Value Statement. Sellers and their
authorized representatives shall have reasonable access during normal business
hours to all relevant books and records, facilities and employees of Purchaser
and Purchaser shall cooperate with Sellers’ and Sellers’ representatives’
reasonable requests with respect to their review of the Closing Inventory
Value
Statement. Unless Sellers deliver written notice to Purchaser on or prior
to the
sixtieth (60th)
day
after Sellers’ receipt of the Closing Inventory Value Statement specifying in
reasonable detail the amount, nature and basis of all disputed items, Sellers
shall be deemed to have accepted and agreed to the calculation of the Closing
Inventory Value. If Sellers timely notify Purchaser of their objection to
the
calculation of the Closing Inventory Value, Purchaser and Sellers shall,
following such notice attempt to resolve their differences pursuant to Section
12.9(b) hereof within the period set forth in Section 12.9(b) (the “Resolution
Period”). Any resolution by them as to any disputed amounts shall be final,
binding and conclusive.
(d) If,
at
the conclusion of the Resolution Period, there are any amounts remaining
in
dispute, then such amounts remaining in dispute shall be resolved in the
following manner: (i) Sellers shall, at their expense, select as their
representative a person from Pricewaterhouse Coopers LLP (the “Sellers’
Representative”) and Purchaser, at its expense, shall select as its
representative a person from Pricewaterhouse Coopers LLP (the “Purchaser’s
Representative”) within ten (10) days after the expiration of the Resolution
Period. Within ten (10) days thereafter, the Sellers’ Representative and the
Purchaser’s Representative shall select one other person from Pricewaterhouse
Coopers LLP who shall act as a neutral arbitrator (the “Neutral Auditor”) who
shall resolve any and all amounts remaining in dispute. The fees and
disbursements of the Neutral Auditor shall be allocated between the Sellers
and
the Purchaser in the same proportion that the aggregate amount of such remaining
disputed items so submitted to the Neutral Auditor that is unsuccessfully
disputed by each party (as finally determined by the Neutral Auditor) bears
to
the total amount of such remaining disputed items so submitted. The Neutral
Auditor shall act as an arbitrator to determine, based solely on the provisions
of this Section 2.4 and the presentations by Sellers and Purchaser, and not
by
independent review, only those issues still in dispute. The Neutral Auditor’s
determination shall be made within thirty (30) days of his or her selection,
shall be set forth in a written statement delivered to Sellers and Purchaser
and
shall be deemed a final, binding and conclusive arbitration award. A judgment
of
a court of competent jurisdiction may be entered upon the Neutral Auditor’s
determination. The term “Final Closing Inventory Value” shall mean the
definitive Closing Inventory Value agreed to (or deemed to be agreed to)
by
Purchaser and Sellers in accordance with Section 2.4(c) or resulting from
the
determinations made by the Neutral Auditor in accordance with this Section
2.4(d) (in
addition to those items theretofore agreed to by Sellers and
Purchaser).
20
(e) If
the
aggregate amount of the Property and Equipment Value plus Final Closing
Inventory Value is not less than $92,000,000 nor more than $100,000,000,
there
shall be no adjustment to the Preliminary Purchase Price and the Preliminary
Purchase Price shall be the Purchase Price. The Preliminary Purchase Price
shall
be (i) increased dollar for dollar to the extent that the aggregate amount
of
the Property and Equipment Value plus the Final Closing Inventory Value exceeds
$100,000,000, or (ii) decreased dollar for dollar to the extent that the
aggregate amount of the Property and Equipment Value plus the Final Closing
Inventory Value is less than $92,000,000. Any adjustments to the Preliminary
Purchase Price made under this Section 2.4(e) shall bear interest from the
Closing Date through the date of payment at the rate of interest publicly
announced by Citibank, N.A., in New York, New York, from time to time as
its
prime rate, for the period from the Closing Date to the date of such payment.
Any adjustments to the Preliminary Purchase Price made pursuant to this Section
2.4(e) shall be paid by wire transfer of immediately available funds to the
account specified by Sellers, if Sellers are owed payment, or by Purchaser,
if
Purchaser is owed payment, within five (5) business days after the Final
Closing
Inventory Value is agreed to by Purchaser and Sellers or any remaining disputed
items are ultimately determined by the Neutral Auditor. The Preliminary Purchase
Price as adjusted pursuant to this Section 2.4 is referred to herein as the
“Purchase Price.”
Section
2.5 Assumption
of Liabilities.
On the
terms and subject to the conditions set forth in this Agreement, at the Closing,
Purchaser shall assume and, thereafter, shall pay, perform and discharge
when
due, all liabilities, other than any Excluded Liability, set forth below
(collectively, the “Assumed Liabilities”):
(a) all
obligations and liabilities related to or in respect of each of the Purchased
Assets, each of the Assumed Contracts and each of the Assumed Leases, and
that
arise, accrue or relate to the period following the Closing;
(b) all
obligations and liabilities in respect of (i) returns, recalls, retrofits
and
warranty and adjustment claims (other than any Action) and relating to any
products manufactured by Purchaser after the Closing Date (other than tires
manufactured under the Offtake Agreement) that constitute Farm Tires, Licensed
Products or other products in categories similar thereto or manufactured
using
any of the Purchased Assets or any rights granted under the Technology Agreement
and (ii) any Action relating to any such products manufactured by Purchaser
after the Closing Date other than any Excluded Design Defect Claim;
(c) obligations
and liabilities for Taxes, to the extent expressly set forth in Section 6.7
hereof;
(d) the
obligations and liabilities for environmental matters to the extent expressly
set forth in Section 8.1 hereof; and
21
(e) all
obligations and liabilities described on Schedule 2.5(e) hereto.
Section
2.6 Excluded
Liabilities.
Purchaser shall not be liable or obligated for any of Sellers’ past, present or
future liabilities and nothing in this Agreement shall be construed in any
manner to constitute an assumption by Purchaser of any such liability of
Sellers. Sellers shall retain and pay and perform when due all of their
liabilities, secured or unsecured, whether known or unknown, asserted or
unasserted, absolute, accrued, contingent or otherwise, and whether due to
or to
become due (collectively, the “Excluded Liabilities”). Other than as
specifically set forth in Section 2.5, the Excluded Liabilities shall include
the following liabilities:
(a) any
of
Sellers’ obligations and liabilities, to the extent accrued or arising prior to
the Closing including, without limitation, all Accounts Payable;
(b) any
of
Sellers’ liabilities and obligations under any Environmental Law or related to
the use, transportation, handling, discharge or release of any Hazardous
Material, except for the liabilities and obligations of Purchaser to the
extent
expressly set forth in Section 8.1 hereof;
(c) any
of
Sellers’ obligations and liabilities under or related to any Employee Benefit
Plan or related to or in favor of any employee, former employee, retiree
or job
applicant of any Seller;
(d) any
of
Sellers’ obligations and liabilities arising out of or relating to any Action to
which any Seller is a party pending as of the Closing;
(e) except
as
otherwise set forth herein or in any of the Ancillary Agreements, any of
Sellers’ obligations and liabilities under any contract, agreement, obligation
or commitment of any Seller not included in the Purchased Assets, or otherwise
in respect of any Excluded Asset.
(f) any
of
Sellers’ obligations and liabilities under this Agreement and the Ancillary
Agreements;
(g) any
of
Sellers’ obligations and liabilities in respect of the Excluded Contracts,
Permitted Liens (except with respect to matters falling within the description
set forth in Clauses (c) (A), (B) and (C) (subject to proration as described
in
Section 6.13(f)) and (d) (subject to proration as described in Section 6.13(f))
of the definition of Permitted Liens set forth in Section 1.1 of this
Agreement), the borrowing of money or issuance of any note, bond, indenture,
loan, credit agreement or other evidence of indebtedness, whether or not
disclosed in this Agreement;
22
(h) except
as
otherwise set forth herein, including, without limitation, as set forth in
Sections 2.7 and 6.4 hereof, any of Sellers’ liabilities and obligations
resulting from the acts or omissions of Sellers following the Closing Date;
and
(i) any
of
Sellers’ obligations and liabilities in respect of (i) returns, recalls,
retrofits and warranty and adjustment claims (other than any Action) and
relating to any products manufactured, sold or distributed by Sellers prior
to
the Closing Date that constitute Farm Tires, Licensed Products or other products
in categories similar thereto or manufactured using any of the Purchased
Assets
or any rights granted under the Technology Agreement, (ii) all Actions related
to any such products, and (iii) all Actions (each an “Excluded Design Defect
Claim”) constituting or including claims for injuries or damages, but only to
the extent of such damages, caused by a design defect in any Farm Tire if
and to
the extent that: (A) such claims allege that such design defect in such Farm
Tire proximately caused such damages or injuries, (B) Farm Tires of the same
size and type as such Farm Tire are in commercial production, but have been
in
commercial production for less than 24 months, as of the Closing Date, (C)
such
Farm Tire was manufactured by Purchaser at Freeport within 18 months after
the
Closing Date, and (D) with respect to, and measured using data available
as of
the expiration of, the 18 month period following the Closing Date, Farm Tires
of
the same size and type as such Farm Tire have an adjustment rate of 2% or
more
of units sold.
Section
2.7 Assignment
and Transfer of Contracts and Permits. Nothing
in this Agreement shall be construed as an assignment of, or an attempt or
commitment to assign to Purchaser, any Assumed Contract, Assumed Lease or
Permit
(including any Environmental Permit) which, as a matter of law or by its
terms,
is (i) not assignable, or (ii) not assignable without the approval or consent
of
the issuer thereof or the other party or parties thereto (A) without first
obtaining such approval or consent or (B) if, despite compliance with Sections
6.4 and 6.11 hereof, consent to assignment cannot be obtained, or (iii) not
assignable without continuing liability to any Seller following the Closing
(collectively, the “Nonassignable Rights”). Except in respect of any Permit or
Environmental Permit (in respect of which the parties shall comply with Section
6.11 hereof), in connection with the Nonassignable Rights, and, in particular,
should any consent or approval not be available on the Closing Date, Sellers
shall, for a reasonable period, to be agreed upon by the parties:
(a) as
to
consents and approvals described above in Clause (ii) of this Section 2.7,
use
reasonable efforts to obtain,
subject
to the limitations contemplated by Section 6.4 hereof, such consents or
approvals in a form reasonably satisfactory to Purchaser as promptly thereafter
as practicable; provided,
however, that no Seller shall have any obligation to give any guarantee or
other
consideration of any nature, or to consent to any material amendment of any
of
the Nonassignable Rights, in connection with performance of the foregoing
obligation.
(b) use
reasonable efforts to obtain
the
benefits accruing after, and in respect of the period after, the Closing,
of the
Nonassignable Rights to Purchaser; provided,
however, that no Seller shall have
any
obligation to give any guarantee or other consideration of any nature, or
to
consent to any material amendment of any of the Nonassignable Rights, in
connection with performance of the foregoing obligation and provided further
that, if a Seller provides the benefits of any Nonassignable Right held by
such
Seller to Purchaser pursuant to this Clause (b), Purchaser shall, and hereby
does, assume, indemnify Sellers against and hold Sellers harmless from, the
liabilities and obligations of Sellers (or any of them) thereunder arising
during, relating to or accruing in respect of the period of such compliance
(all
of which liabilities and obligations shall constitute, notwithstanding anything
to the contrary set forth herein, Assumed Liabilities) and, to the greatest
extent possible, pay, perform and discharge when due, as subcontractor for
Sellers (or any of them) or otherwise, all of the terms, covenants and
provisions thereof during such period.
23
(c) cooperate
with the Purchaser, at the expense of Purchaser, in taking such commercially
reasonable actions (not including the initiation of, or participation in,
any
Action) as Purchaser may from time to time request to enforce, and to preserve
for the benefit of Purchaser, the Nonassignable Rights; and
(d) pay
over
to the Purchaser, all monies collected by or paid to the Sellers in respect
of
the Nonassignable Rights due after the Closing, to the extent due in respect
of,
and in respect of obligations accruing during, the period after the
Closing.
Section
2.8 Allocation
of the Purchase Price.
The sum
of the Purchase Price and the value of the Assumed Liabilities shall be
allocated among the Sellers, and, as to each Seller, among the Purchased
Assets,
the Non-Competition Covenants and the Prepaid Royalty, for Tax purposes
(including, without limitation, U.S. federal income Tax purposes) as set
forth
on Schedule 2.8. Purchaser shall prepare Form 8594 under Section 1060
of the Code relating to this transaction based on this agreed allocation.
Purchaser and Sellers agree to file such Form, and such other documents as
may
be required in respect of such allocation by any Taxing Authority, with each
relevant Taxing Authority. Purchaser and Sellers each agree to file all income,
franchise and other Tax Returns, and execute such other documents as may
be
required by any Taxing Authority, in a manner consistent with the agreed
allocation and such Form and to refrain from taking any position inconsistent
with such Form or agreed allocation with any Taxing Authority unless otherwise
required by applicable Law; provided however, that the amounts set forth
on
Schedule 2.8 shall be ratably adjusted to reflect any differences between
the
Preliminary Purchase Price and the Purchase Price.
ARTICLE
III
THE
CLOSING
Section
3.1 The
Closing.
The
closing of the purchase and sale of the Purchased Assets and the assumption
of
the Assumed Liabilities pursuant to Sections 2.1 and 2.5 hereof (the “Closing”)
shall take place either at the offices of Goodyear at 0000 Xxxx Xxxxxx Xxxxxx,
Xxxxx, Xxxx,
00000 or the office of Bodman LLP, Detroit, Michigan (or at such location
to be
agreed upon by the parties) at 10:00 a.m. Eastern Standard Time on April
1,
2005, or, if later, on the fifth (5th)
Business Day following the satisfaction or waiver of the conditions set forth
in
Article IX hereof (other than those conditions intended to be satisfied
substantially simultaneously with the Closing), or at such other date, place
or
time as may be agreed upon by the parties (the “Closing Date”).
24
Section
3.2 Closing
Deliveries.
At the
Closing, the parties shall make the deliveries described below, provided
that
the obligation of Purchaser and Sellers to do so shall depend on the performance
by Purchaser and Sellers of their respective obligations under this Section
3.2.
(a) Sellers
shall deliver or cause to be delivered to Purchaser the following:
(i) an
Assignment and Xxxx of Sale substantially in the form attached as Exhibit
A
hereto (the “Xxxx of Sale”), duly executed on behalf of Goodyear, Goodyear
Canada and Goodyear Mexico;
(ii) an
Assumption Agreement substantially in the form attached as Exhibit B hereto
(the
“Assumption Agreement”), duly executed on behalf of each Seller;
(iii) a
Special
Warranty Deed, with respect to the Owned Real Property, substantially in
the
form attached as Exhibit C hereto (the “Special Warranty Deed”), duly executed
on behalf of Xxxxx;
(iv) a
Sublease Agreement, with respect to the Xxxx Road Lease, substantially in
the
form attached as Exhibit D hereto (the “Sublease”), duly executed on behalf of
Goodyear;
(v) one
or
more Leasehold Assignments substantially in the form attached as Exhibit
E
hereto (collectively, the “Personal Property Lease Assignments”), duly executed
on behalf of Goodyear and the lessors under the Personal Property
Leases;
(vi) one
or
more Leasehold Assignments substantially in the forms attached as Exhibit
F
hereto (collectively, the “Farm Lease Assignments,” and, together with the
Personal Property Lease Assignments, the “Lease Assignments”), duly executed on
behalf of Goodyear;
(vii) an
Offtake Agreement substantially in the form attached as Exhibit G hereto
(the
“Offtake Agreement”), duly executed on behalf of Goodyear;
(viii) a
Compound Mixing Agreement substantially in the form attached as Exhibit H
hereto
(the “Mixing Agreement”), duly executed on behalf of Goodyear;
25
(ix) a
Warranty Service Agreement substantially in the form attached as Exhibit
I
hereto (the “Service Agreement”), duly executed on behalf of
Goodyear;
(x) a
Bilateral Supply Agreement substantially in the form attached as Exhibit
J
hereto (the “Supply Agreement”), duly executed on behalf of
Goodyear;
(xi) a
Raw
Materials Agreement substantially in the form attached as Exhibit K hereto
(the
“Raw Materials Agreement”), duly executed on behalf of Goodyear;
(xii) a
Trademark License Agreement substantially in the form attached as Exhibit
L
hereto (the “Trademark License Agreement”), duly executed on behalf of
Goodyear;
(xiii) a
Patent
and Know How Transfer and License Agreement substantially in the form attached
as Exhibit M hereto (the “Technology Agreement”), duly executed on behalf of
Goodyear;
(xiv) an
Employee Leasing Contract substantially in the form attached as Exhibit N
hereto
(the “Employee Leasing Contract”), duly executed on behalf of
Goodyear;
(xv) a
Bailment Agreement substantially in the form attached as Exhibit O hereto
(the
“Bailment Agreement”), duly executed on behalf of Goodyear;
(xvi) a
Software License Agreement substantially in the form attached as Exhibit
P
hereto (the “Software License Agreement”), duly executed on behalf of
Goodyear;
(xvii) the
certificates and other documents required to be delivered by Sellers pursuant
to
Article IX hereof, including, without limitation, the certified copies of
resolutions described in Section 9.3(b) hereof;
(xviii) The
Estoppel Certificate if obtained pursuant to Section 6.13(a) hereof, (the
“Estoppel Certificate”), duly executed by the lessor of the Leased Real
Property;
(xix) a
certificate from Xxxxx (which complies with Section 1445 of the Code) of
non-foreign status executed in accordance with the provisions of the Foreign
Investment in Real Property Tax Act;
(xx) such
other documents as may be necessary to be delivered at the Closing in order
to
consummate the transactions contemplated hereby to be effected at the
Closing.
(b) Purchaser
shall deliver or cause to be delivered to Sellers the following:
26
(i) a
wire
transfer of immediately available U.S. denominated funds in the amount of
the
Purchase Price;
(ii) the
Xxxx
of Sale, duly accepted on behalf of Purchaser;
(iii) the
Assumption Agreement, duly executed on behalf of Purchaser;
(iv) the
Special Warranty Deed, duly accepted on behalf of Purchaser;
(v) the
Sublease Agreement, duly executed on behalf of Purchaser;
(vi) the
Lease
Assignments, duly executed on behalf of Purchaser;
(vii) the
Offtake Agreement, duly executed on behalf of Purchaser;
(viii) the
Mixing Agreement, duly executed on behalf of Purchaser;
(ix) the
Service Agreement, duly executed on behalf of Purchaser;
(x) the
Supply Agreement, duly executed on behalf of Purchaser;
(xi) the
Raw
Materials Agreement, duly executed on behalf of Purchaser;
(xii) the
Trademark License Agreement, duly executed on behalf of Purchaser;
(xiii) the
Technology Agreement, duly executed on behalf of Purchaser;
(xiv) the
Employee Leasing Contract, duly executed on behalf of Purchaser;
(xv) the
Bailment Agreement, duly executed on behalf of Purchaser;
(xvi) the
Software License Agreement, duly executed on behalf of Purchaser;
(xvii) the
certificates and other documents required to be delivered by Purchasers pursuant
to Article IX hereof, including, without limitation, the certified copies
of
resolutions described in Section 9.2(d) hereof; and
(xviii) such
other documents as may be necessary to be delivered at the Closing in order
to
consummate the transactions contemplated hereby to be affected at the
Closing.
27
Section
3.3 Further
Assurances.
From
time to time following the Closing, Purchaser, on the one hand, and Sellers,
on
the other, shall, at the reasonable request of the other party or parties,
execute, acknowledge and deliver, at the sole cost of the requesting party
or
parties, such assignments, conveyances, consents, assurances, instruments
of
transfer or assumption and other instruments, and shall take such other actions
consistent with the terms of this Agreement, as may be reasonably necessary
to
vest in Purchaser all right, title and interest of each Seller in and to
the
Purchased Assets transferred by such Seller hereunder and otherwise to
consummate the transactions contemplated hereby. Without limiting the generality
of the foregoing, in the event either of the Custom Label Contracts cannot
be
assigned prior to the Closing despite compliance with Section 6.4 hereof,
and
cannot be assigned following the Closing during the period referred to in,
and
despite compliance with, Section 2.7 hereof, Purchaser shall cooperate with
Sellers to remove and ship all Inventories manufactured thereunder and the
molds
and other property and assets located at, installed in or affixed to the
Freeport Facility set forth in Schedule 3.3 hereof, to or as directed by
Sellers. Between the Closing and the expiration of the period referred to
in
Section 2.7 hereof, or, if later, the date on which all such assets and
Inventories have been removed and shipped in accordance herewith, (i) Purchaser
shall hold such Inventories and assets for the account of Goodyear, and (ii)
Purchaser shall from time to time ship such Inventories to or as directed
by
Sellers.
Section
3.4
Administration
of Accounts (a) All
payments and reimbursements made by any third party in the name of or to
any
Seller that are received after the Closing, to the extent in connection with
or
arising out of the Purchased Assets or the Assumed Liabilities shall be held
by
such Seller in trust for the benefit of Purchaser and, immediately upon receipt
by such Seller of any such payment or reimbursement, such Seller shall pay
over
to Purchaser the amount of such payment or reimbursement without right of
set-off; provided, however, that nothing herein is intended to or shall confer
any right or interest to Purchaser in or to any Excluded Asset or any payment
or
reimbursement related thereto.
(b) All
payments and reimbursements made by any third party in the name of or to
Purchaser that are received after the Closing, to the extent in connection
with
or arising out of Excluded Assets or the Excluded Liabilities, shall be held
by
Purchaser in trust for the benefit of the relevant Seller and, immediately
upon
receipt by Purchaser of any such payment or reimbursement, Purchaser shall
pay
over to the relevant Seller the amount of such payment or reimbursement without
right of set-off provided, however, that nothing herein is intended to or
shall
confer any right or interest to Sellers in or to any Purchased Assets or
any
payment or reimbursement related thereto.
(c) Subject
to Article X and the limitations set forth therein, if Purchaser pays any
of the
Excluded Liabilities, then Goodyear shall reimburse the amount of such Payment
to Purchaser within thirty (30) days of receipt by Goodyear of a demand for
reimbursement, together with corresponding documentation of such
payment.
28
(d) Subject
to Article X and the limitations set forth therein, if Sellers pay any of
the
Assumed Liabilities, then Purchaser shall reimburse the amount of such Payment
to Sellers within thirty (30) days of receipt by Purchaser of a demand for
reimbursement, together with corresponding documentation of such
payment.
Section
3.5 Bulk
Sales Laws.
Notwithstanding any other provision of this Agreement, Purchaser hereby waives
compliance by Sellers with the provisions of any bulk transfer or bulk sales
Law
of any jurisdiction in connection with the transactions contemplated hereby.
Sellers hereby indemnifiy and agree to hold Purchaser harmless from and against
any and all liabilities, losses, damages, costs and expenses, including
reasonable attorneys’ fees, incurred or sustained by Purchaser due to such
non-compliance.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF SELLER
Sellers
hereby represent and warrant to Purchaser that the following representations
and
warranties are true and correct as of the date hereof:
Section
4.1 Incorporation;
Authorization; Etc.Each
of
Goodyear and Xxxxx is a corporation duly organized, validly existing and
in good
standing under the Laws of its state of incorporation. Goodyear Mexico is
a
sociedad de responsabilidad limitada, duly organized, validly existing and
in
good standing under the Laws of Mexico. Goodyear Canada is a corporation,
duly
organized, validly existing and in good standing under the Laws of Ontario.
Each
Seller is duly authorized to conduct business as a foreign corporation and
is in
good standing in each jurisdiction in which the ownership of the Purchased
Assets owned by it or the performance of the Assumed Contracts or the Assumed
Leases to which it is a party makes such qualification necessary. Each Seller
has all requisite corporate or organizational power and authority to own
Purchased Assets owned by it, to perform the Assumed Contracts and the Assumed
Leases to which it is a party. Each Seller has all requisite corporate or
organizational power and authority to execute and deliver this Agreement
and the
Ancillary Agreements to which it is a party and to perform its obligations
hereunder and thereunder. The execution, delivery and performance of this
Agreement and the Ancillary Agreements to which it is a party have been duly
and
validly authorized by all necessary corporate or organizational proceedings
on
the part of each Seller. This
Agreement has been and when executed and delivered the Ancillary Agreements
to
which each of them is a party, will be duly and validly executed and delivered
by each Seller and, assuming the due authorization, execution and delivery
hereof by Purchaser, constitutes a valid and binding obligation of each Seller,
enforceable against such Seller in accordance with its terms, except as such
enforcement may be limited by (i) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar Laws affecting or relating to
enforcement of creditors’ rights generally and (ii) general equitable principles
and
limitations on the availability of equitable relief (whether invoked in a
proceeding at law or in equity).
29
Section
4.2 No
Conflict. (a)
Except as set forth on Schedule 4.2(a), and subject to obtaining the Seller
Required Approvals, the execution and delivery by each Seller of this Agreement
do not, and, when executed and delivered, such execution and delivery of
the
Ancillary Agreements to which it is a party will not, and the consummation
by
such Seller of the transactions contemplated hereby and thereby will not,
violate, conflict with or result in a breach of any provision of, or constitute
a default under, or result in a right of notice, termination, or acceleration
under, or result in the creation of any Lien upon any of the Purchased Assets
under, any of the terms, conditions or provisions of (i) such Seller’s articles
of incorporation or by-laws, (ii) any Law applicable to such Seller, the
Assumed
Leases, the Assumed Contracts or any of the Purchased Assets or (iii) any
note,
bond, mortgage, indenture, deed of trust, license, franchise, permit,
concession, contract, lease or other instrument, obligation or agreement
of any
kind to which such Seller is a party and by which any of the Purchased Assets
is
bound.
(b) Except
for the Permits, filings, declarations, notices, Consents, registrations,
approvals and other matters described on Schedule 4.2(b) (the “Seller Required
Approvals”), no declaration, filing or registration with, or notice to, or
authorization, consent or approval of, any Governmental Authority or other
Person is necessary for the execution and delivery by any Seller of this
Agreement and the Ancillary Documents to which it is a party or the consummation
by any Seller of the transactions contemplated hereby or thereby.
Section
4.3 Real
and Tangible Personal Property.
(a)
Schedule 4.3(a) sets forth a legal description of the Owned Real Property.
Except as set forth on Schedule 4.3(a) hereto, Xxxxx has good and marketable
title to the Owned Real Property, free and clear of all Liens. Except as
set
forth on Schedule 4.3(a) hereto, (i) the buildings, structures, fixtures,
building systems and equipment included in the Owned Real Property
(collectively, the “Improvements”) are, taken as a whole, in good condition and
repair, normal wear and tear excepted, except to the extent the failure to
be in
such condition or repair does not materially impair the operation of the
Owned
Real Property as currently conducted and (ii) there are no material structural
deficiencies affecting the Improvements. For purposes of the preceding sentence,
“material” or “materially” means that the cost to repair or remedy any
deficiency or condition would exceed the sum of $10,000. The classification
of
each parcel of Owned Real Property under applicable zoning laws, ordinances
and
regulations expressly permits the use and occupancy of such parcel and the
operation of the Business as currently conducted thereon (and not merely
as a
prior non-conforming use or similar designation), and permits the Improvements
located thereon as currently constructed, used and occupied. There is no
condemnation, expropriation or other proceeding in eminent domain, pending
or,
to the Knowledge of Sellers, threatened, affecting any parcel of Owned Real
Property or any portion thereof or interest therein.
30
(b) Sellers
have previously provided or made available to Purchaser a true and correct
copy
of the Xxxx Road Lease and each of the Farm Leases, each as amended as of
the
date hereof. Except as set forth on Schedule 4.3(b) hereto, with respect
to each
of the Xxxx Road Lease and each of the Farm Leases: (i) such lease is valid
and
enforceable, subject only to bankruptcy, reorganization, receivership and
other
laws affecting creditors’ rights generally and to general principals of equity,
whether invoked in a proceeding in equity or at law; (ii) the transactions
contemplated by this Agreement (including the Sublease) do not require the
consent of any other party to such lease (other than the Seller Required
Approvals), will not result in a breach of or default under such lease, and
will
not otherwise cause such lease to cease to be so valid and enforceable on
terms
substantially identical in all material respects following the Closing; (iii)
Goodyear’s possession and quiet enjoyment of the Leased Real Property under the
Xxxx Road Lease is not presently disturbed and there are currently no disputes
with respect to such lease; (iv) neither Goodyear nor the other party to
the
Xxxx Road Lease, is in material breach or default under such lease; (v) Goodyear
has not subleased, licensed or otherwise granted any Person the right to
use or
occupy the Leased Real Property or any portion thereof; and (vi) Goodyear
has
not collaterally assigned or granted any Lien in the Xxxx Road Lease or any
interest therein.
(c) Except
as
set forth on Schedule 4.3(c) hereto, Xxxxx or Goodyear has obtained all Permits
(other than Environmental Permits that are addressed in Section 4.18) required
to be obtained by Xxxxx or Goodyear with respect to the Owned Real
Property.
(d) Except
as
otherwise set forth herein, the Purchased Assets constitute all of the assets,
rights and properties (other than any Excluded Assets) used or held for use
by
Sellers in connection with the manufacture of Farm Tires at and necessary
for
the operation of the Freeport Facility as presently operated.
(e) Schedule
2.1(a)(i) hereto sets forth a listing of all capital assets owned by Goodyear
included in the Purchased Assets, other than Inventories, as of December
31,
2004. Except as set forth on Schedule 4.3(e)(i) hereto, and except with respect
to such Purchased Assets as Goodyear has disposed of in the Ordinary Course
of
Business since December 31, 2004, Goodyear has good title to or an enforceable
right to use all such Purchased Assets, free and clear of all Liens. All
assets
listed on Schedule 2.1(a)(i) are in good operating condition and repair (subject
to normal wear and tear), are free from manufacturing flaws and have been
maintained in accordance with Goodyear’s normal practices.
(f) Goodyear
has previously provided or made available to Purchaser a true and correct
copy
of each of the Personal Property Leases, each as amended as of the date
hereof.
Except
as set forth in Schedule 4.3(f) hereto, each of the Personal Property Leases
are, assuming due execution and delivery by the counterparties thereto, legal,
valid and binding in all material respects, enforceable in all material respects
in accordance with their terms, subject only to bankruptcy, reorganization,
receivership and other laws affecting creditors’ rights generally and to general
principals of equity, whether
invoked in a proceeding in equity or at law. All such Personal Property Leases
are free of any material default or breach thereof by Goodyear.
31
(g) Schedule
4.3(g) lists all Permitted Liens as of January 31, 2005 to Sellers’
Knowledge.
Section
4.4 Financial
Reports. Attached
as Schedule 4.4 hereto are copies of certain management measurements of income
and losses with respect to the Business (collectively, the “Reports”). The
Reports (a) were prepared in all material respects in accordance with, and
reflect, in all material respects, the books of account and other financial
records of Goodyear and (b) were prepared in all material respects consistent
with the past practices of Goodyear for measuring income and loss for
unincorporated business units, except that (i) the Reports exclude information
relating to rubber track and (ii)
the
Reports disaggregate or eliminate certain items of expense deemed by Goodyear
not to be directly related to the Business.
Section
4.5 Absence
of Certain Changes.
Except
as set forth on Schedule 4.5 hereto, between December 31, 2004 and the date
hereof, there has not been:
(a) any
Material Adverse Change;
(b) any
material increase made or promised in the compensation or other remuneration
or
rate thereof payable or to become payable by Goodyear to its Employees
generally;
(c) except
as
set forth on Schedules 4.3(a), (b), (c) or (e)(i) any Lien with respect to
the
Business other than Liens that do not individually or in the aggregate, exceed
$25,000, imposed upon or attached to any of the Purchased Assets;
(d) except
as
set forth on Schedules 4.3(a), (b), (c) or (f) or Schedule 4.12, any material
amendment to, consent by any Seller to the termination of or material breach
by
any Seller of any Assumed Contract or Assumed Lease;
(e) any
material commitment to any labor organization by Goodyear with respect to
the
Employees;
(f) except
as
set forth on Schedule 4.5(f), any sale, transfer, lease, sublease, license
or
other disposal by any Seller of any of the Purchased Assets which individually
or in the aggregate have a value in excess of $10,000 other than Inventories
sold in the Ordinary Course of Business with respect to the
Business;
(g) any
material changes in the customary methods of operation of the Business,
including, without limitation, policies and practices relating to
Inventories;
32
(h) any
casualty or loss with respect to any of the tangible personal or real property
comprised by the Purchased Assets and that, in the aggregate, have a replacement
cost of more than $10,000; or
(i) any
agreement by any Seller to take any of the actions listed in this Section
4.5
except, in each case, as contemplated or permitted by this Agreement or any
of
the Ancillary Agreements.
Section
4.6 Inventories. Except
as
set forth on Schedule 4.6 hereto, and except to the extent reflected in the
Reports, the Inventories comprised by the Purchased Assets consist in all
material respects of products which are of a quality and quantity usable
and
saleable in the Ordinary Course of Business with respect to the Business
and
none of the Inventories is obsolete or damaged, except for obsolete items
which
have been written off or written down to net realized value. Subject to Section
6.16, the amount of Inventories presently on hand is consistent with historical
levels. The amounts at which the Inventories have been valued by Goodyear
have
been determined in accordance with Goodyear’s existing inventory practices in
respect of the Business. Goodyear has consistently used the first-in, first-out
method of accounting for the Inventories. Except as set forth on Schedule
4.6,
all of the Inventories are free and clear of all Liens.
Section
4.7 Litigation. Except
as
set forth on Schedule 4.7 hereto, there
is
no Action
pending,
nor, to Sellers’ Knowledge, threatened,
against
Sellers with respect to any of the Purchased Assets or the Business,
before
any Governmental Authority that would, if determined adversely to Sellers,
have
a Material Adverse Effect
on the
Purchased Assets or the Business. Except as disclosed on Schedule 4.7, and
except to the extent related to the Consent of any Governmental Authority
necessary in connection with the transactions contemplated hereby, there
are no
judgments or outstanding orders, injunctions, decrees, stipulations or awards
rendered by a Governmental Authority against Sellers that would interfere
with
the use of the Purchased Assets in connection with the Business as presently
conducted or prevent or delay the transactions contemplated in this
Agreement.
Section
4.8 Intellectual
Property.
The
Intellectual Property includes all of the patents, patent applications,
inventions, and registered and unregistered trademarks, and all Know How
(as
defined in the Technology Agreement) material to the conduct of the Business
on
the terms contemplated by this Agreement and the License Agreements. Sellers
represent and warrant that: (i) Goodyear owns or has a valid right to use
all
such Intellectual Property; (ii) to Sellers’ Knowledge, the conduct of the
Business does not infringe the rights of any Person in any of such Intellectual
Property; (iii) to Sellers’ Knowledge, no Person is currently infringing any of
Goodyear’s rights in the Intellectual Property; and (iv) where not restricted
otherwise, Goodyear has previously provided or made available to Purchaser
correct and complete copies of all patents, registrations, applications,
licenses and sublicenses, (as amended to date) with respect to each such
item of
Intellectual Property
33
that
constitutes a Licensed Xxxx (as defined in the Trademark License Agreement)
or a
Licensed Patent (as defined in the Technology Agreement).
Section
4.9 Employee
Benefits.
Schedule 4.9 hereto lists all benefit plans sponsored or participated in
by
Sellers or any of their Affiliates in connection with the Business and in
effect
as of the date hereof which are employee pension benefit plans, as defined
in
Section 3(2) of ERISA, medical and life insurance plans and employee welfare
benefit plans as defined in Section 3(1) of ERISA and, in each case, in which
any Employees participate (collectively, the “Employee Benefit Plans”). As to
the Employee Benefit Plans sponsored by Sellers or their Affiliates which
are
“employee pension benefit plans” as defined in Section 3(2) of ERISA, such plans
(i) if they are defined benefit plans, are subject to the minimum funding
standards of Code Section 412 and (ii) are in material compliance with and
have
been administered in accordance with their terms and in material compliance
with
all applicable requirements of Law. Neither Sellers nor their Affiliates
have
incurred any liability under Title IV of ERISA that has or would, after the
Closing Date, become a Lien upon any of the Purchased Assets pursuant to
ERISA
Section 4068.
Section
4.10 Employment
and Labor Matters.
Schedule 4.10 hereto sets forth a list of all employees of Goodyear employed
exclusively in connection with the Business as of February 17, 2005
(collectively, the “Employees”). Except for the Collective Bargaining Agreement,
there are no collective bargaining agreements or other similar labor union
contracts to which any Seller is a party in respect of the Employees paid
on an
hourly basis. Sellers have previously provided or made available to Purchaser
a
true and correct copy of the Collective Bargaining Agreement.
Section
4.11 Compliance
with Laws.
Each
Seller has, with respect to the Business and the Purchased Assets, complied
in
all material respects with all applicable Laws.
Section
4.12 Contracts.
Schedule 4.12 sets forth all Assumed Contracts that involve aggregate annual
consideration in excess of $50,000 and that are exclusively related to the
Business and/or the Purchased Assets. Except as set forth on Schedule 4.12,
and
assuming due execution and delivery by the counterparties thereto, each Assumed
Contract is in full force and effect and is, in all material respects, a
valid
and binding obligation, enforceable in all material respects in accordance
with
its terms, subject only to bankruptcy, reorganization, receivership and other
laws affecting creditors’ rights generally and to general principals of equity,
whether invoked in a proceeding in equity or at law. Except as set forth
on
Schedule 4.12, no Seller, and, to the Knowledge of Sellers, no other party
is in
material breach of, or material default under, any of the Assumed
Contracts.
Section
4.13 Licenses
and Permits.
Goodyear has obtained and is in all material respects in compliance with
all
Permits and, except to the extent covered by the provisions of Section 4.3
(with
respect to real estate permits) and Section 4.18 (with respect to certain
Environmental Permits), necessary to conduct and carry on the Business using
the
Purchased Assets, except for Permits, the absence of which would not have
a
Material Adverse Effect (collectively, the “Material Permits”).
34
All
such
Material Permits are listed on Schedule 2.1(a)(vii) and are assignable and
transferable except as set forth on Schedule 2.1(a)(vii). Except as set forth
on
Schedule 4.13, all such Material Permits are in full force and effect in
all
material respects and no Actions are pending or, to Sellers’ Knowledge,
threatened that seek the revocation, termination, suspension, non-renewal
or any
material limitation thereof.
Section
4.14 Taxes.
Each
Seller has timely filed all Tax Returns required to be filed by it on or
before
the date hereof with respect to Taxes relating to the Purchased Assets and
the
Employees for each period ending on or before the date hereof, other than
any
Tax returns the failure to file which would not have a Material Adverse Effect.
Except as set forth on Schedule 4.14 hereto, all Taxes shown as due on such
Tax
Returns have been or will be timely paid in all material respects, except
with
respect to any Taxes being contested by any Seller. There is no material
unassessed Tax deficiency proposed in a writing delivered to Sellers or,
to
Sellers’ Knowledge, threatened against any Seller relating to the Purchased
Assets and the Employees, nor is any Action pending or, to Sellers’ Knowledge,
threatened by any Governmental Authority for assessment, reassessment or
collection of any material Taxes relating to the Purchased Assets and the
Employees. Xxxxx is not a “foreign person” within the meaning of Code Section
1445(f)(3).
Section
4.15 Insurance.
Purchaser may access Goodyear’s insurance program via Goodyear’s website
(xxx.xxxxxxxxxxxxxxxxx.xxx).
Section
4.16 Product
Warranty.
Schedule
4.16 hereto includes true and complete copies of each Seller’s warranty
agreements with Farm Tire customers, if any, and each Seller’s standard terms
and conditions of sale, if any (containing standard guaranty, warranty, and
indemnity provisions) in respect of the finished goods Inventories included
in
the Purchased Assets. Such Inventories are not subject to any material guaranty,
warranty, or other indemnity (except any of the foregoing arising or implied
under applicable Law) beyond the applicable warranty agreement or the standard
terms and conditions of sale set forth or described in Schedule
4.16.
Section
4.17 Customers
and Suppliers.
Schedule 4.17 sets forth the names of the ten (10) most significant (i)
customers (by revenue, including percentages of total revenues) of the Business
and (ii) suppliers (by expense) exclusively to the Freeport Facility, in
each
case for the twelve (12) month period ended December 31, 2004. Sellers have
previously supplied to Purchaser a list of all customers of the Business
during
calendar year 2004. Except as disclosed in Schedule 4.17, Sellers have no
Knowledge that any customer of the Business listed on Schedule 4.17 will
cease
to use the products, goods or services of the Business, or will substantially
reduce the use of such products, goods or services, at any time after the
Closing Date.
Except
with respect to Sellers and their respective Affiliates and except as described
in Schedule 4.17, Sellers have no Knowledge that any supplier listed on Schedule
4.17 will cease, or materially decrease the rate of, supplying material,
products or services to the Freeport Facility at any time after the Closing
Date.
35
Section
4.18 Environmental
Matters.
Except
as
set forth in Schedule 4.18 hereto:
(a) The
Business has been conducted by Goodyear and the condition of the Purchased
Assets and the Freeport Facility is and at all times has been in material
compliance with all requirements of all applicable Environmental
Laws;
(b) Sellers
have obtained, currently possess and are and have been in material compliance
with, all terms and conditions of all Environmental Permits, which Environmental
Permits are (i) transferable as described in Schedule 2.1(a)(vii) and (ii)
are
listed on Schedule 2.1(a)(vii);
(c) Sellers
have not during the past three years, or, if unresolved, any previous years,
received any written or oral notice, report or other information suggesting
that
the operation of the Business or condition of the Purchased Assets or the
Freeport Facility is in actual or alleged violation of any of the Environmental
Laws, or that any of them have in connection with the Business any liabilities
or potential liabilities, including any investigatory, remedial or corrective
obligations, relating to any of them or their facilities arising under
Environmental Laws;
(d) Except
as
set forth in Schedule 4.18 or the Phase I Environmental Assessment identified
in
Section 6.13(d), none of the following exists at, on, in or under any portion
of
the Freeport Facility: (i) underground storage tanks, (ii) asbestos-containing
material in any form or condition, (iii) PCBs, (iv) naphtha or (v) landfills,
surface impoundments, or disposal areas;
(e) Goodyear
has not in connection with the operation of the Freeport Facility treated,
stored, disposed of, arranged for or permitted the disposal of, transported,
handled, or released any substance, including without limitation any Hazardous
Substance, exposed any employee or other individual to any substance or
condition, or owned or operated any property or facility (and no such property
or facility is contaminated by any such substance) in a manner that has given
or
would give rise to liabilities, including any liability for response costs,
corrective action costs, personal injury, property damage, natural resources
damages or attorney fees, pursuant to any Environmental Laws;
(f) Goodyear
has not, in connection with the operation of the Freeport Facility, either
expressly or by operation of law, assumed or undertaken any liability, including
without limitation any obligation for corrective or remedial action, of any
other Person relating to Environmental Laws; and
(g) No
facts,
events or conditions relating to the Freeport Facility will prevent, hinder
or
limit continued compliance with Environmental Laws, give rise to any
investigatory, remedial or corrective obligations pursuant to Environmental
Laws, or give rise to any other liabilities pursuant to Environmental Laws,
including without limitation any relating to onsite or offsite releases or
threatened releases of hazardous materials, substances or wastes, personal
injury, property damage or natural resources damage.
36
Section
4.19 Brokers,
Finders, Etc. Sellers
have not employed any broker or finder, or incurred any Liability for a
brokerage fee, commission or finder’s fee in connection with the transactions
contemplated by this Agreement.
Section
4.20 Accuracy
of Information; Full Disclosure.
All
documents delivered by or on behalf of Sellers in connection with this Agreement
are complete and accurate in all material respects. No representation or
warranty of Sellers contained in this Agreement or in any Schedule hereto
or in
any Ancillary Agreement delivered to Purchaser pursuant hereto or in connection
herewith and none of the written data or information furnished or made available
to Purchaser by Sellers contains an untrue statement of a material fact or
omits
to state a material fact required to be stated therein or necessary to make
the
statements made, in the context in which made, not false or misleading. To
the
Knowledge of Sellers, there is no fact that has not been disclosed to Purchaser
that has or could reasonably be expected to have a Material Adverse
Effect.
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
Purchaser
hereby represents and warrants to Sellers that the following representations
and
warranties are true and correct as of the date hereof.
Section
5.1 Organization
and Good Standing.
Purchaser
is a corporation duly organized, validly existing and in good standing under
the
laws of the State of
Illinois. Purchaser has all requisite power and authority
to own, lease and operate its property and otherwise conduct its business
as it
is now being conducted. Purchaser is duly qualified to do business and in
good
standing in each jurisdiction where failure to do so would have a Material
Adverse Effect.
Section
5.2 Authorization;
Etc.
Purchaser has full power and authority to execute and deliver this Agreement
and
the Ancillary Agreements to which it is a party, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated
hereby
and thereby. The execution and delivery of this Agreement and the Ancillary
Agreements to which it is a party, the performance of Purchaser’s obligations
hereunder and thereunder and the consummation of the transactions contemplated
hereby and thereby have been duly and validly authorized by all necessary
corporate proceedings on the part of Purchaser. This Agreement has been,
and
when executed and delivered the Ancillary Agreements to which it is a party
will
be, duly executed and delivered by Purchaser and constitute and will constitute
the legal, valid and binding obligations of Purchaser, enforceable against
Purchaser in accordance with their terms.
37
Section
5.3 No
Conflict.
(a)
The
execution and delivery by Purchaser of this Agreement and the Ancillary
Agreements to which Purchaser is a party do not, and the consummation of
the
transactions contemplated hereby and thereby will not, violate, conflict
with or
result in a breach of any provision of, constitute a default under, or result
in
a right of notice, termination or acceleration under, or result in the creation
of any Lien under, any of the terms, conditions or provisions of (i) any
note,
bond, mortgage, indenture, deed of trust, license, franchise, permit,
concession, lease, agreement, commitment, understanding, arrangement or
restriction of any kind to which Purchaser is a party or by which Purchaser
or
any of its property is bound; (ii) any Law to which Purchaser or any of its
property is subject; (iii) Purchaser’s articles
of incorporation or bylaws or any resolutions adopted by the board of directors
or shareholders of Purchaser.
(b)
No
declaration, filing or registration with, or notice to, or authorization,
consent or approval of, and Governmental Authority or other Person is necessary
for the execution by Purchaser of this Agreement and the Ancillary Agreements
to
which it is a party or the consummation by Purchaser of the transactions
contemplated hereby and thereby.
Section
5.4 Independent
Analysis.
Purchaser acknowledges and agrees that except as expressly set forth in this
Agreement, no Seller has made any representation or warranty upon which
Purchaser is relying with respect to the Purchased Assets, the Assumed
Liabilities or otherwise. Purchaser has performed, and will perform, and
is
purchasing the Purchased Assets and assuming the Assumed Liabilities based
only
(except in respect of the representations and warranties of Sellers expressly
set forth herein) upon, its own due diligence and investigations with respect
to
the Business, the Purchased Assets and the Assumed Liabilities and has formed
its own conclusions regarding the condition (financial and otherwise), value,
property, liabilities, contracts, contingencies, prospects, risks and other
incidents thereof.
Section
5.5 Litigation.
There
is no Action, at law or in equity, pending nor, to the Knowledge of Purchaser,
threatened against Purchaser which in any manner challenges or seeks to prevent,
enjoin, alter or delay the transactions contemplated by this Agreement or
any of
the Ancillary Agreements.
Section
5.6 Finders,
Brokers.
Purchaser is not a party to any agreement with any finder or broker, or in
any
way obligated to any finder or broker, for any commissions, fees or expenses
incurred in connection with the origin, negotiation, execution or performance
of
this Agreement.
ARTICLE
VI
COVENANTS
OF SELLER AND PURCHASER
Section
6.1 Access
to Information; Confidentiality.
(a) On
the terms and subject to the Conditions set forth in the Confidentiality
Agreement, between the date of this Agreement and the Closing
Date, each Seller will, on reasonable notice and during ordinary business
hours,
subject to the requirements of applicable Law, including, without limitation,
all applicable competition Laws, (i) give to Purchaser and its authorized
representatives reasonable access to all books, records (including, without
limitation, all work papers and other documents of such Seller and its
accountants who have knowledge of the Business), plants, offices and other
facilities and properties of such Seller to the extent related to the Purchased
Assets or the Assumed Liabilities, including, without limitation, such books
and
records of Sellers as Purchaser or such representatives may reasonably request
in connection with Purchaser’s compliance with applicable securities laws in
connection with the consummation of the transactions contemplated hereby,
(ii)
permit Purchaser to make such inspections thereof as Purchaser may reasonably
request and (iii) cause such Seller’s officers, employees and advisors with
knowledge of the Business and the Purchased Assets to furnish Purchaser with
such financial and operating data and other information with respect to the
Business and the Purchased Assets as Purchaser may from time to time reasonably
request. Any such inspection or investigation shall be conducted in such
a
manner as not to interfere unreasonably with the operation of the Business
or
the Purchased Assets.
38
(b) The
Confidentiality Agreement shall remain in full force and effect and shall
survive the execution and delivery of this Agreement and the termination
of this
Agreement for any reason whatsoever, subject to its stated expiration
date.
Section
6.2 Conduct
of the Business.
Except
as set forth on Schedule 6.2 hereto or as contemplated or permitted hereby
or
otherwise consented to by Purchaser (such consent not to be unreasonably
withheld or delayed by Purchaser), from the date hereof through the Closing,
Goodyear shall operate the Business and the Purchased Assets in the Ordinary
Course of Business and shall not take any action of the type represented
not to
have occurred in Section 4.5 hereof.
All
molds and drums relating to Skid Steer and Large Terra tires presently located
at Goodyear’s Topeka, Kansas manufacturing facility shall be moved to the Owned
Real Property, at Goodyear’s expense, prior to the Closing.
Section
6.3 Notification
of Certain Matters.
(a) Each
Seller may, from time to time prior to the Closing, deliver to Purchaser
a
supplement (each a “Supplemental Schedule”) to Sellers’ disclosure Schedules
attached hereto that may disclose any fact, circumstance or development that
has
occurred or been discovered after the date hereof and that would constitute
a
breach of the representations and warranties of Sellers (or any of them)
contained in this Agreement (as of the date of this Agreement or as of the
date
of such fact, circumstance or development, applying such representations
to such
date if made on and as of such date) if not disclosed. In the event (i) the
Closing occurs in accordance herewith, as to each item or items in the aggregate
set forth in any Supplemental Schedule or Schedules for which Purchaser would
have been entitled to refuse to consummate the Closing under Section 9.3(a)
hereof, or (ii) Purchaser would have the right to terminate this Agreement
pursuant to Section 11.1(d) hereof, by
39
reason
of
any item or items in the aggregate on any Supplemental Schedule or Schedules
and
does not or cannot exercise such right within the time permitted thereby,
as to
each item set forth in any such Supplemental Schedule, then, in such case,
the
Supplemental Schedule or Schedules shall be deemed to have amended such
disclosure Schedules, to have qualified the representations and warranties
of
Sellers (or any of them) contained in this Agreement and to have corrected
any
misrepresentation or breach of warranty that otherwise might have existed
hereunder by reason of the fact, circumstance or development (with the result
that no misrepresentation or breach shall be deemed to have occurred), in
each
case to the extent of the disclosure contained in such Supplemental Schedule
or
Schedules.
(b) If
prior
to the Closing, Purchaser discovers any fact, circumstance or development
that
would or would reasonably be expected to constitute a breach of the
representations or warranties of Sellers (or any of them) contained in this
Agreement (as of the date of this Agreement or as of the date of such fact,
circumstance or development, applying such representations to such date if
made
on and as of such date) and that could result in a right of claim against
Sellers in an amount in excess of $50,000, then in such case, Purchaser shall
forthwith notify Sellers of such discovery and shall provide Sellers with
the
details of such discovery.
Section
6.4 Efforts
Concerning Closing Conditions; Regulatory and Other Authorizations; Notices
and
Consents.
(a)
Subject to Sections 2.7 and 6.11 hereof, Purchaser and Sellers shall use
their
reasonable best efforts to cause the satisfaction of the conditions to the
obligations of each party at the Closing set forth in Section 9.1 hereof
and the
satisfaction of the conditions to the obligations of the other party at the
Closing set forth in Section 9.2 or Section 9.3 hereof, as the case may be,
to
the extent the satisfaction of such conditions is within such party’s control
except in respect of Section 9.3(g) hereof, as to which neither Sellers nor
Purchaser shall be subject to the foregoing obligations, and Sections 9.3(f)
and
(h) hereof, as to which Purchaser, rather than Seller, shall be subject to
foregoing obligations.
(b) Subject
to Sections 2.7 and 6.11 hereof, each party shall use its reasonable efforts
to
obtain all authorizations, Consents, orders and approvals of all Governmental
Authorities and third parties that may be or become necessary for its execution
and delivery of, and the performance of its obligations pursuant to, this
Agreement and the Ancillary Agreements, and will cooperate fully with the
other
parties in promptly seeking to obtain all such authorizations, Consents,
orders
and approvals; provided, however, that neither Sellers nor Purchaser shall
have
any obligation to give or agree to any guarantee or other consideration or
obligation of any nature, or to consent to any material amendment of any
of the
Assumed Leases or any of the Assumed Contracts, in connection therewith.
Each
party hereto agrees to make an appropriate filing, if necessary, pursuant
to the
HSR Act with respect to the transactions contemplated by this Agreement within
five (5) Business Days of the date hereof, and to supply, as promptly as
practicable to the appropriate Governmental Authorities any additional
information and documentary material that may be requested pursuant to the
HSR
Act.
40
Section
6.5 Public
Statements.
Subject
to the terms of, and in addition to the requirements imposed by, the
Confidentiality Agreement, the parties hereto shall (i) issue, on the date
hereof, a joint press release in the form previously agreed upon by the parties
hereto, to the exclusion of any other press release or written public statement
in respect of the execution hereof, (ii) consult with each other prior to
issuing any other press release or any written public statement with respect
to
this Agreement or any of the Ancillary Agreements or the transactions
contemplated hereby or thereby, and (iii) not issue any such press release
or
written public statement prior to review and approval by the other party
or
parties, as the case may be; provided, however, that prior review and approval
shall not be required if (a) in the reasonable judgment of the party seeking
to
issue such release or public statement, prior review and approval would prevent
the timely dissemination of such release or announcement in violation of
any
applicable Law or any rule, regulation or policy of any securities exchange
on
which the securities of such party are traded and (b) the party seeking to
issue
such press release or public statement provides notice of the content and
proposed timing thereof to the other party or parties, as applicable, as
promptly as practicable.
Section
6.6 Cooperation.
Except
in respect of any Indemnifiable Claim after the Closing, in the event and
for so
long as any party hereto is contesting or defending any Action, charge,
complaint, claim or demand described in this sentence, Sellers and Purchaser
will reasonably cooperate with each other and cause their respective directors,
officers and employees to cooperate with those of Purchaser or Sellers, as
applicable, in furnishing information, evidence, testimony and other assistance
as may be reasonably requested by Purchaser or Sellers, as applicable, in
connection with any pending or threatened Action resulting or arising from
the
transactions contemplated by this Agreement or any of the Ancillary Agreements,
or any fact, situation, circumstance, status, condition, activity, practice,
failure to act or transaction relating to the Business. Subject to the
indemnification provisions of Article X, the party requesting such
assistance will pay or reimburse the other party for (i) all reasonable
out-of-pocket expenses incurred by the party providing such assistance in
connection therewith including, without limitation, all travel, lodging and
meal
expenses and (ii) the reasonable value of the time of any such director,
officer or employee.
Section
6.7
Transfer
Taxes and Fees.
(a) Purchaser
and Sellers shall cooperate in preparing, executing and filing use, sales,
real
estate, transfer and similar Tax Returns relating to any and all federal,
state,
county or local, and any and all foreign, excise, stamp, transfer, registration
and other Taxes, fees and duties (including any interest, additions to Tax
and
penalties with respect thereto) and any and all transfer, registration,
recording or similar fees and charges imposed in connection with the
consummation of the transactions contemplated by this Agreement. At the Closing,
Purchaser and Sellers each shall pay one-half of any such Taxes other than
(i)
any such Taxes relating to the transfer of the Owned Real Property, all of
which
shall be borne by Sellers and shall be an Excluded Liability that Sellers
shall
pay at the time the Special Warranty Deed is recorded (or, if later, when
required under applicable Law) and (ii) any such Taxes relating to the transfer
(other than pursuant to the Canadian Inventory Transfer) of the Inventories
located in Canada
and Mexico as of the Closing and included in the Purchased Assets, all of
which
shall be borne one half by Purchaser and one half by Sellers. All such Tax
Returns shall be prepared in a manner that is consistent with the allocation
of
the Purchase Price and Assumed Liabilities contemplated by Section 2.8
hereof.
41
(b) Purchaser
and Sellers shall reimburse each other for payments of Taxes made for the
other
party’s benefit pursuant to the provisions of this Section 6.7 or Section
6.13 hereof. All such reimbursements shall be paid within fifteen (15) days
of receiving a written request from the other party.
Section
6.8
Expenses. Except
as
otherwise provided in this Agreement, each party shall pay the expenses incurred
by it incident to this Agreement, the Ancillary Agreements and the closing
of
the transactions contemplated hereby and thereby including, without limitation,
any legal, accounting, brokerage, investment banking, financial advisory,
finders or similar fees or commissions, and all related expenses of any such
Person who was engaged by it in connection with this Agreement or the
transactions contemplated hereby.
Section
6.9
Access
to Former Business Records;
Cooperation Concerning Tax Issues. (a)
As
soon as reasonably practicable following the Closing Date, each Seller shall
deliver to Purchaser all Books and Records that constitute Purchased Assets
hereunder. For a period of seven (7) years after the Closing, Sellers and
Purchaser will afford each other and their respective duly authorized
representatives reasonable access to financial, Tax and other books and records
of the Business or that relate to the Purchased Assets or the Assumed
Liabilities for any reasonable purpose, including, without limitation,
litigation, financial and Tax reporting purposes, and will permit such
representatives, at the expense of the reviewing party, to make abstracts
from,
or to take copies of, any of such books and records, or to obtain temporary
possession thereof as may be reasonably required. Each party shall preserve
and
keep such books and records for a period of seven (7) years following the
Closing or for any longer period that may be required by any Governmental
Authority or ongoing litigation; provided, however, that either party may
dispose of any such books and records retained by it at the end of such seven
(7) year period or at any earlier time if and to the extent that, prior to
any
such disposition, such party gives advance notice to Purchaser or Sellers,
as
the case may be, and affords Purchaser or Sellers, as applicable, the
opportunity to take possession or copy such books and records as it may select.
Notwithstanding anything to the contrary set forth herein, Sellers may retain
copies of any Books and Records transferred to Purchaser hereunder.
(b) In
addition to the foregoing, Sellers and Purchaser shall provide each other
with
such cooperation and information as any of them reasonably may request in
filing
any Tax Return, amended Tax Return or claim for refund, determining a liability
for Taxes or a right to a refund of Taxes, participating in or conducting
any
audit or other proceeding in respect of Taxes. Such cooperation and information
shall include providing copies of relevant Tax Returns or portions thereof,
together with accompanying schedules, related work papers and documents relating
to rulings or other determinations by Taxing Authorities. Sellers and Purchaser
shall make their respective employees available on a basis mutually convenient
to provide explanations of any documents or information provided hereunder.
Sellers and Purchaser shall retain all Tax Returns, schedules and work papers,
records and other documents in their possession relating to Tax matters of
the
Business, the Purchased Assets and the Assumed Liabilities for each taxable
period first ending after the Closing Date and for all prior taxable periods
until the later of (i) the expiration of the statute of limitations of the
taxable periods to which such Tax Returns and other documents relate, without
regard to extensions except to the extent notified by the other party in
writing
of such extensions for the respective Tax periods, or (ii) six years following
the due date (without extension) for such Tax Returns. Any information obtained
under this Section 6.9(b) shall be kept confidential except as may be otherwise
necessary in connection with the filing of Tax Returns or claims for refund
or
in conducting an audit or other proceeding.
42
Section
6.10
Corporate
Names and Trademarks. Except
as
expressly set forth in the Trademark License Agreement, notwithstanding any
inference or prior course of conduct to the contrary, and except as provided
in
the immediately following sentence, in no event shall Purchaser, any subsidiary
or other Affiliate of Purchaser or any other Person, acquire or have any
right
to use or any other right, title or interest in or to any of the Goodyear
Names
and Marks, all rights to which, and the goodwill represented thereby, shall
be
retained by Sellers. Notwithstanding the foregoing, in the event the Closing
occurs in accordance herewith, Goodyear shall execute, deliver and perform
in
accordance with the Trademark License Agreement. As to each mold included
in the
Purchased Assets and bearing any of the Goodyear Names and Marks, on the
earlier
of (i) the date immediately prior to which such mold (or, as applicable,
any
interest therein) is used, transferred, sold, encumbered or otherwise disposed
of by Purchaser following the Closing and (ii) 12 months after the Closing
Date,
Purchaser shall permanently remove or replate all portions of such mold bearing
any of the Goodyear Names and Marks, including, without limitation, the name
“Xxxxx,” and the word “Powermark” other than any of the Licensed Marks.
Section
6.11
Transfer
of Permits. Sellers
will cooperate to transfer or help Purchaser obtain any Permits, including,
without limitation, Environmental Permits, held by Sellers and necessary
for the
use of the Purchased Assets in connection with operation of the Business
by
Purchaser following the Closing Date. Sellers or Purchaser, as appropriate,
shall notify the appropriate Governmental Authorities in writing that Purchaser
has entered into an agreement with Sellers to purchase the Purchased Assets
and
Sellers or Purchaser, as appropriate, will request that all such Permits,
including, without limitation, any operational Environmental Permits relating
to
the Purchased Assets, be transferred to or issued, as the case may be, in
the
name of Purchaser with substantially the same terms and conditions as such
Permits following the Closing Date.
Section
6.12
Restrictive
Covenants.
(a) In
partial consideration of the payment of the Purchase Price, as set forth
in
Section 2.3, Sellers and Purchaser agree as follows:
43
(i) Except
as
contemplated or permitted under this Agreement or any of the Ancillary
Agreements, for a period of seven (7) years after (and subject to the occurrence
of) the Closing (the “Restricted Period”), Sellers
and their respective Affiliates shall not engage, directly or indirectly,
in any
business in Canada, the United States or Mexico (“Purchaser’s Territory”) that
designs, engineers, manufactures, distributes, sells, markets and/or services
any Farm Tires, or any tires substantially similar to Farm Tires (collectively,
“Competing Products”), or, without the prior written consent of the Purchaser,
directly or indirectly, own an interest in, manage, license, operate, join,
control, lend money or render financial or other assistance to or participate
in
or be connected with, as a partner, stockholder, consultant or otherwise,
any
Person that designs, engineers, manufactures, sells, markets and/or services
Competing Products in Purchaser’s Territory; provided, however, that Sellers and
their respective Affiliates may engage in such design and engineering activities
in Purchaser’s Territory necessary to support the production of Competing
Products manufactured outside Purchaser’s Territory, and provided
further that,
(A)
for the purposes of this Section 6.12(a), ownership of securities having
no more
than two percent of the outstanding voting power of any competitor which
are
listed on any national securities exchange or traded actively in the national
over-the-counter market shall not be deemed to be in violation of this Section
6.12(a) so long as the Person owning such securities has no other connection
or
relationship with such competitor and (B) nothing herein or in any of the
Ancillary Agreements shall be deemed to or shall prohibit Sellers or any
of
their respective Affiliates from (w) effecting any purchase or sale contemplated
by Section 6.15 hereof (or any related service), (x) purchasing, selling
or
servicing Competing Products to or for end users (other than original equipment
manufacturers) in Purchaser’s Territory, provided, in respect of purchases and
sales, of any Licensed Products that those Licensed Products were either
purchased from Purchaser or constituted finished goods transferred to, located
at, or owned by Sellers and/or their Affiliates retail outlets as of the
Closing
Date, (y) selling tires mounted on original equipment vehicles in any location
other than Purchaser’s Territory, even with the understanding that such tires
will be shipped to Purchaser’s Territory or (z) taking any of the foregoing
actions in respect of (including, without limitation, owning or acquiring
an
interest in, lending money to and rendering financial or other assistance
to)
dealers, distributors and other Persons that sell or service Competing Products
to or for dealers or end users, other than original equipment
manufacturers.
(ii) As
a
separate and independent covenant, Sellers agree with the Purchaser that,
for a
period of two (2) years following the Closing, Sellers and their respective
Affiliates will not, except as required or permitted under the Employee Leasing
Contract or the Consulting Agreement dated as of September 2, 2004, by and
between Goodyear and Xxxxxx Xxxxx, in any way, directly or indirectly, (A)
solicit or attempt to solicit for employment any employees of Purchaser with
whom Sellers came in contact during the negotiation, drafting or performance
hereof other than pursuant to one or more general advertisements not targeted
at
employees
of Purchaser, (B) initiate or maintain contact, or attempt to initiate or
maintain contact with any officer-level employee of Purchaser regarding
employment or (C) induce or attempt to induce any of them to violate the
terms
of their contracts, or any employment arrangements, with Purchaser; provided,
however, that nothing herein shall prohibit any Seller or any of Sellers’
respective Affiliates from soliciting or hiring any employee of Purchaser
after
the shorter of six (6) months from the date such employee’s employment with
Purchaser terminates for reasons not associated with a prohibited solicitation
or contact or eighteen (18) months from the date hereof.
44
(iii) The
Restricted Period shall be extended by the length of any period during which
any
one of the Sellers or any one of their Affiliates is in breach of the terms
of
this Section 6.12(a).
(iv) Sellers
acknowledge that the covenants of Sellers set forth in this Section 6.12(a)
are
an essential element of this Agreement and that, but for the agreement of
the
Sellers to comply with these covenants, Purchaser would not have entered
into
this Agreement. Sellers acknowledge that this Section 6.12(a) constitutes
an
independent covenant and shall not be affected by performance or nonperformance
of any other provision of this Agreement by Purchaser. Sellers have
independently consulted with their counsel and after such consultation agree
that the covenants set forth in this Section 6.12(a) are reasonable and
proper.
(v) The
non-compete provisions of Section 6.12(a) shall terminate if (i) Purchaser
commences a voluntary Chapter 7 petition in bankruptcy or has such a petition
filed against it, unless Purchaser contests such petition and obtains its
dismissal or conversion to Chapter 11, or (ii) Purchaser is the subject of
a
Chapter 11 case and said case is converted to Chapter 7, or (iii) Purchaser
discontinues all or substantially all of its tire business. If Purchaser
sells
all or substantially all of its tire business then the prohibition against
licensing shall terminate unless the purchaser is a Goodyear approved assignee
of the Trademark License Agreement.
(b) In
partial consideration of the transfer of the Purchased Assets, Sellers and
Purchaser agree as follows:
(i) Except
as
contemplated or permitted under this Agreement or any of the Ancillary
Agreements, during the Restricted Period, Purchaser
and its Affiliates shall not engage, directly or indirectly, in any business
anywhere other than in Purchaser’s Territory, that designs, engineers,
manufactures, sells, markets and/or services tires that from time to time
constitute Licensed Products, or, without the prior written consent of the
Sellers, directly or indirectly, own an interest in, manage, operate, join,
control, lend money or render financial or other assistance to or participate
in
or be connected with, as a partner, stockholder, consultant or otherwise,
any
Person that designs, engineers, manufactures, distributes,
sells, markets and/or services tires that from time to time constitute Licensed
Products other than in Purchaser’s Territory;
provided, however, that
(i) for
the purposes of this Section 6.12(b), ownership of securities having no more
than two percent of the outstanding voting power of any competitor which
are
listed on any national securities exchange or traded actively in the national
over-the-counter market shall not be deemed to be in violation of this Section
6.12(b) so long as the Person owning such securities has no other connection
or
relationship with such competitor and (ii) nothing herein or in the Ancillary
Agreements shall be deemed to or prohibit Purchaser or any of its Affiliates
from selling or servicing Competing Products which are not Licensed Products
to
or for end users outside of Purchaser’s Territory.
45
(ii) As
a
separate and independent covenant, Purchaser agrees with Sellers that, for
a
period of two (2) years following the Closing, Purchaser and its Affiliates
will
not, except as required or permitted under the Employee Leasing Contract,
or
Section 7.1 hereof, in any way, directly or indirectly (i) solicit or attempt
to
solicit for employment any employees of any Seller with whom it came in contact
during the negotiation, drafting or performance hereof other than pursuant
to
one or more general advertisements not targeted at employees of any Seller,
(ii)
initiate or maintain contact, or attempt to initiate or maintain contact
with
any officer-level employee of any Seller regarding employment or (iii) induce
or
attempt to induce any of them to violate the terms of their contracts, or
any
employment arrangements, with any Seller; provided, however, that nothing
herein
shall prohibit Purchaser or any of its Affiliates from soliciting or hiring
any
employee of any Seller after the shorter of six (6) months from the date
such
employee’s employment with such Seller terminates for reasons not associated
with a prohibited solicitation or contact or eighteen (18) months from the
date
hereof; provided, however, that Purchaser shall have the right to hire Xxxxxx
Xxxxx.
(iii) The
Restricted Period, as to Purchaser or any of its Affiliates, shall be extended
by the length of any period during which Purchaser or its Affiliates are
in
breach of the terms of this Section 6.12(b).
(iv) Purchaser
acknowledges that the covenants of Purchaser and its Affiliates set forth
in
this Section 6.12(b) are an essential element of this Agreement and that,
but
for the agreement of Purchaser to comply with these covenants, Sellers would
not
have entered into this Agreement. Purchaser acknowledges that this Section
6.12(b) constitutes an independent covenant and shall not be affected by
performance or nonperformance of any other provision of this Agreement by
any
Seller. Purchaser has independently consulted with its counsel and after
such
consultation agrees that the covenants set forth in this Section 6.12(b)
are
reasonable and proper.
46
(c) Sellers
and Purchaser agree that the remedy at law for any breach by Sellers or
Purchaser, as the case may be, of this Section 6.12 will be inadequate and,
notwithstanding any other provision herein, that Purchaser or any Seller,
as the
case may be, shall be entitled to injunctive relief. The parties intend that
the
unenforceability or invalidity of any term or provision of this Section 6.12
shall not render any other term or provision contained herein unenforceable
or
invalid. If the activities described in this Section 6.12 should be deemed
by a
court of competent jurisdiction to be too extensive, then the parties intend
that this Section 6.12 be construed to cover the maximum scope of business
activities, period of time and geographic area as may be permissible under
applicable Law.
Section
6.13 Real
Estate.
(a) Purchaser
understands and agrees that Goodyear will not extend the Xxxx Road Lease
beyond
its current termination date and that if Purchaser desires to continue in
occupation of the Leased Real Property thereafter, Purchaser will need to
acquire rights directly from the underlying owner of such property. Between
the
date hereof and the Closing, Goodyear will use reasonable efforts to obtain
the
execution, by the lessor of the Leased Real Property, of an estoppel certificate
in substantially the form attached as Exhibit Q hereto (the “Estoppel
Certificate”).
(b) Goodyear
has previously provided or made available to Purchaser a copy of the Title
Commitment (the “Title Commitment”), dated December 6, 2004, in respect of the
Owned Real Property prepared by Commonwealth Land Title Insurance Company
(the
“Title Company”), together with legible copies of all underlying documents
included in the Title Commitment for any exceptions to title referred to
in the
Title Commitment. Sellers will use reasonable efforts to (i) cure each of
the
exceptions to title as to the Owned Real Property appearing in the Title
Commitment and listed on Schedule 6.13(b) hereto (such exceptions, collectively,
the “Title Objections”) and (ii) cause the Title Company to remove from the
Title Commitment all exceptions to title with respect to the Owned Real Property
that constitute Title Objections, other than, in each case, any Title Objections
that the Title Company agrees to insure over (collectively, the “Insured
Exceptions”); provided, however, that in no event will Sellers be required to
incur or pay any fees, expenses or liabilities, in an aggregate amount, as
to
all Sellers, in excess of $10,000, or to agree to any material amendment
of, or
commitment in, any document, instrument or agreement to which any Seller
is, or
is or would be proposed to be, a party, in connection with such efforts.
In the
event that the Closing occurs hereunder, Sellers shall thereafter, within
thirty
(30) days after their receipt of a written request therefor from Purchaser,
together with supporting information in reasonable detail, pay to Purchaser
an
amount equal to 100% of the premium billed to Purchaser for a single policy
of
title insurance with respect to the Owned Real Property issued by the Title
Company and based upon the Title Commitment (in the form most recently issued
by
the Title Company as of the Closing), provided that Purchaser has ordered
such
policy on or before 30 Days after the Closing Date.
47
(c)
Sellers
have retained Xxxxxx & Associates, a licensed surveyor in the State of
Illinois acceptable to Purchaser, to complete a survey of the Owned Real
Property (the “Survey”), which Survey shall, when issued, (i) be provided to the
Title Company for review and be sufficient for the Title Company to remove
the
exception to title listed in Schedule B, Section II(a) of the Title Commitment,
as such exception currently appears in the Title Commitment (expressly
excluding, however, any additional exceptions, if any, included by the Title
Company in any reissuance of the Title Commitment following its review of
the
Survey), (ii) show the location of all easements, building lines and areas
affected by the underlying documents included in the Title Commitment and
(iii)
certify that such Survey was completed in accordance with “Minimum Standard
Detail Requirements for ALTA/ASCM Land Title Surveys” jointly issued by ALTA and
ASCM in 1992, and includes Items 1,2,3,4,6,7(a), 7(b)(1), 7(c), 8, 9, 10,
11(a)
and 13 of Table A thereof. Sellers shall use reasonable efforts to cause
the
Survey to be completed as promptly as practicable. Sellers and Purchaser
shall
each bear 50% of all fees and expenses paid or incurred by Sellers (or any
of
them) in connection with the Survey. Purchaser shall remit such expenses
to the
relevant Seller or Sellers from time to time within 10 Business Days of its
receipt of any written request therefor, together with supporting information
in
reasonable detail, from Sellers (or any of them).
(d) Pursuant
to Section 4.18 hereof and Schedule 4.18, Purchaser has been advised that
certain portions of the Owned Real Property are constructed with materials
containing asbestos and that underground storage tanks and a firing range
have
heretofore been located at the Owned Real Property. Purchaser has also been
advised that certain electric transformers and capacitors containing
polychlorinated biphenyl fluids (“PCBs”) are affixed to the Owned Real Property
or the manufacturing equipment in the Owned Real Property and are related
to the
lighting and other electric functions. Purchaser has heretofore been provided
with a true and correct copy of the Phase I Environmental Assessment, dated
September, 2004, prepared by Xxxx-Xxxxxx & Associates in respect of the
Owned Real Property.
(e) Purchaser
confirms that, except as expressly set forth herein, neither Xxxxx, nor any
other Seller, nor any Person purporting to act for Xxxxx or any other Seller,
has made or now makes any representations as to the physical condition of
the
Owned Real Property. Accordingly, except as otherwise set forth in this
Agreement, including without limitation Article VIII, Purchaser acknowledges
and
agrees that it is purchasing the Owned Real Property in its “As Is” “Where Is”
condition, with all faults accepted.
(f) The
liability for
Illinois real property taxes (other than transfer taxes) relating
to the Owned Real Property and the Leased Real Property shall be pro-rated
between Purchaser and Xxxxx or Goodyear, as applicable, based upon the number
of
days that each entity owns the Owned Real Property or is the lessee in respect
of the Leased Real Property, as applicable, during the calendar year in which
the Closing takes place. The parties acknowledge and agree that (i) Illinois
real property Taxes are paid in arrears, (ii) Illinois real property taxes
for
2004 are payable in equal installments in July and September, 2005 and (iii)
Illinois real property taxes for 2005 are payable in
48
equal
installments in July and September, 2006. Xxxxx and Goodyear shall bear and
pay
all such real property taxes for calendar year 2004 as and when the same
become
due and payable. Subject to Clause (b) of Section 6.7 hereof, Purchaser shall
pay all such real property taxes for calendar year 2005 when and as the same
become due and payable; provided, that the liability of Xxxxx and Goodyear,
on
the one hand, and Purchaser, on the other, for 2005 real property taxes shall
be
prorated as provided above.
Section
6.14 Unaudited
Financial Statements.
(a) As
soon
as reasonably practicable following the Closing Date, Sellers shall deliver
to
Purchaser (i) unaudited balance sheets of the Business as of the end of the
years ended December 31, 2002, 2003 and 2004, and (ii) unaudited statements
of
operations and cash flows for the Business for the years ended December 31,
2002, 2003 and 2004 (collectively, the “Unaudited Financial Statements”).
(b)
The
Unaudited Financial Statements will (i) be prepared in accordance with GAAP,
consistently applied, (ii) be prepared by Sellers with the assistance of
Deloitte & Touche LLP or such other independent public accounting firm as
shall be reasonably acceptable to Purchaser (the “Accounting Firm”) and (iii)
present fairly, in all material respects, the financial condition of the
Business at the dates thereof and the results of operations of the Business
for
the periods then ended, in each case in accordance with GAAP.
(c)
Purchaser
will provide Sellers with such assistance as may reasonably be requested
by
Sellers (or any of them) in connection with the preparation of the Unaudited
Financial Statements, including, without limitation, access at all reasonable
times to the personnel, properties, books and records of the Business. Purchaser
will reimburse Sellers for up to fifty percent (50%) of all cost and expense
incurred by Sellers (or any of them) in connection with the preparation of
the
Unaudited Financial Statements, including, without limitation, all cost and
expense of the Accounting Firm; provided, however, that in no event shall
Purchaser’s reimbursement obligation hereunder exceed one hundred thousand
dollars ($100,000). Purchaser will provide such reimbursement from time to
time
within thirty (30) days of receipt of any invoice from Sellers (or any of
them).
(d) Sellers
will provide Purchaser with such assistance as may reasonably be requested
by
Purchaser in connection with the first audit of the Unaudited Financial
Statements conducted by or on behalf of Purchaser, including, without
limitation, access at all reasonable times to the personnel, properties,
books
and records of or related to the Business and in the employ or possession,
as
applicable, of Sellers (or any of them).
Section
6.15 Certain
Government Contracts.
Purchaser acknowledges and agrees that (i) Goodyear is a party to the contracts
relating to the sale and distribution of Farm Tires to state and local
governments listed on Schedule 6.15 hereto, (ii) Goodyear effects distribution
of Farm Tires under
such contracts through deliveries by dealers and distributors of Goodyear,
or
Goodyear’s own or affiliated retail locations, (iii) such agreements are
Excluded Assets hereunder and (iv) Goodyear must assure an adequate supply
of
Farm Tires to such dealers, distributors and locations following the Closing
in
order to perform in accordance with such contracts. Accordingly, Purchaser
agrees, from time to time following the Closing, to provide an adequate supply
of Farm Tires to such dealers, distributors and locations to enable such
dealers, distributors and locations to meet the obligations of Goodyear under
such contracts, at the prices from time to time established by Purchaser
with
notice to such dealers, distributors and locations, and that, notwithstanding
anything in the Supply Agreement to the contrary (including, without limitation,
any volume limitations set forth therein) Goodyear may purchase such Farm
Tires
under the Supply Agreement.
49
Section
6.16 Transfer
of Inventories.
Between
the date hereof and the Closing Date, Goodyear Canada shall use reasonable
efforts to sell all or substantially all of the Inventories described in
Section
2.1(c)(i) hereof to Fountain Tire Ltd. and/or Coast Tire & Auto Service Ltd.
(such sale, the “Canadian Inventory Transfer”). Notwithstanding anything to the
contrary set forth herein, (i) in no event shall Goodyear Canada be required
to
sell such Inventories other than in the Ordinary Course of Business, (ii)
the
Canadian Inventory Transfer shall constitute a permitted transaction for
purposes of Section 6.2 hereof and (iii) in the event the Canadian Inventory
Transfer is consummated prior to the Closing, (A) the Accounts Receivable
of
Goodyear Canada arising exclusively therefrom and relating directly thereto
shall constitute a Purchased Asset and shall be transferred in accordance
with
Section 2.1(c) hereof, except in respect of an amount equal to the amount
of any
and all Taxes, duties or expenses incurred or paid by, or due from, Goodyear
Canada in respect of the Canadian Inventory Transfer (which amount shall
constitute an Excluded Asset) and (B) all liabilities and obligations of
Goodyear Canada (whether accrued or arising prior to, on or after the Closing)
relating to the Canadian Inventory Transfer (except in respect of amounts
that
constitute Excluded Assets under the foregoing clause (A)) shall constitute
Assumed Liabilities of, and shall be paid, performed and discharged when
due by,
Purchaser. Purchaser and Goodyear Mexico shall arrange for the Inventories
sold
by Goodyear Mexico hereunder and not transferred to any customer of Titan
during
the Bailment Period (as defined in the Bailment Agreement) with respect of
such
Inventories to be shipped to Purchaser at Purchaser’s expense on or promptly
following the Closing Date, FOB border at Brownsville, Texas.
ARTICLE
VII
EMPLOYMENT
MATTERS
Section
7.1 Employment
(a) Except
with respect to Xxxx Xxxxxxxx and those salaried Employees listed on Schedule
7.1(c) hereto (the “Leased Salaried Employees”) salaried Employees shall have
the opportunity to apply for employment with Purchaser prior to the Closing
including Employees not presently working and off work on leave. All of
Purchaser’s standard employment application procedures, including a medical exam
and drug test, will be applicable. With respect to any such Employee who
applies
for employment, Sellers agree to provide Purchaser access to such Employee
for
such purpose. Purchaser agrees employment will be “at will” to salaried
Employees (other than the Leased Salaried Employees and Xxxx Xxxxxxxx)
who meet
Purchaser’s employment standards. With respect to the Employees who are offered
and who accept Purchaser’s offer of employment at will (the “Purchaser New
Hires”), Sellers will terminate their employment effective as of the Closing
or,
if applicable, the date an Employee returns from leave and begins work
for
Purchaser. Purchaser does not contemplate reducing the salary of Purchaser
New
Hires below the salary as set forth on Schedule 4.10. Purchaser New Hires
will
participate in employee benefit plans substantially similar to those maintained
by Purchaser for its present salaried employees. Years of service with
Goodyear
will be counted only under Purchaser’s vacation benefit plan for all Purchaser
New Hires. Purchaser shall prepare and timely deliver to Sellers the following
information: (i) the names of all Employees to whom offers of employment
have
been made, (ii) the location of employment, (iii) the job title, and (iv)
whether such offer of employment was accepted or rejected. Purchaser represents
that it has no benefit plans that provide benefits based on seniority or
length
or service other than Purchaser’s vacation benefit plan and medical
plan.
(b) (i)
Goodyear shall, except in respect of the obligations and liabilities described
in clause (ii) of this sentence, be responsible for and shall assume all
liabilities and obligations for any severance or layoff benefits for any
Employee that is triggered as a result of the transactions contemplated
by this
Agreement, and (ii) Purchaser shall be responsible for and shall assume
all
liabilities and obligations for any layoff benefits triggered for any
Purchaser’s New Hires which Purchaser terminates after the Closing.
(c) The
Leased Salaried Employees listed on Schedule 7.1(c) are designated by
Sellers as employees who shall, subject to the Employee Leasing Contract,
remain
in the employ of Goodyear immediately following the Closing.
(d) Purchaser’s
only obligations with respect to hourly Employees will be as set forth
in
Purchaser’s collective bargaining agreement with Local Union No. 745L, United
Steelworkers of America, AFL-CIO/CLC (the “Local Union”) covering the hourly
Employees.
50
(e) Sellers
represent that (i) as of February 17, 2005, the total number of Employees
at the
Freeport Facility was 832 and (ii) no such Employees were terminated
by Sellers
in the ninety (90) day period prior to the date hereof. Purchaser agrees
that it
will offer employment to at least 682 such Employees at Closing. Purchaser
agrees to pay, and be responsible for, and to indemnify and hold the
Sellers
harmless from, any liability under the Illinois WARN Act and/or the Federal
WARN
Act if Purchaser fails to comply with the foregoing obligation or otherwise
causes any Seller to be subject to any liability thereunder as a result
of the
actions of Purchaser on or after the Closing Date.
(f) Purchaser
shall be solely responsible for all liability, costs and expenses (including
reasonable attorneys’ fees) for all employment claims filed by any Purchaser New
Hires with respect to events or circumstances occurring after the Closing
relating to arbitrations, unfair labor practice charges, employment
discrimination charges, wrongful termination claims, workers’ compensation
claims, any employment-related tort claim or other similar claims or charges
of
or by any Purchaser New Hires. Goodyear shall be solely responsible for
all
liability, costs and expenses (including reasonable attorneys’ fees) for all
employment claims relating to arbitrations, unfair labor practice charges,
employment discrimination charges, wrongful termination claims, workers’
compensation claims, any employment-related tort claim or other similar
claims
or charges filed by any Purchaser New Hires with respect to and to the
extent of
events or circumstances occurring before the Closing. Purchaser shall be
solely
responsible for all liability, costs and expenses (including reasonable
attorneys’ fees) for all employment claims arising from or relating to
Purchaser’s hiring practices and hiring decisions of salaried Employees under
Section 7.1.
(g) Goodyear
shall be solely responsible for (i) the payment of all salaries and wages
due to
the Employees prior to the Closing, (ii) claims made or incurred by any
Employee
under the Employee Benefit Plans prior to the Closing and (iii) compliance
with
the requirements of COBRA (as hereinafter defined), including, without
limitation, the provision of continuation coverage, with respect to all
Employees, other than any Purchaser New Hires, and their qualified beneficiaries
for whom a qualifying event occurs before the Closing Date. For purposes
of this
Section 7.1, “COBRA” means Section 4980B of the Internal Revenue Code of 1986,
as amended, and part 6 of subtitle B of Title I of the Employment Retirement
Income Security Act of 1974, 29 U.S.C. § 1001 et
seq.,
and
“qualified beneficiary” and “qualifying event” shall have the meanings given
such terms in COBRA. Purchaser shall be solely responsible for the payment
or
provision of all salaries, wages, benefits and other incidents of employment
due
to any of the Purchaser New Hires and, if applicable, for any of their
respective dependents following the Closing or, if later, the effective
date of
hire.
Section
7.2
Employee
Retirement Benefits.
All
Employees who are participants in the retirement plans comprised by the
Employee
Benefit Plans shall retain their accrued benefits thereunder and Goodyear
(or
such plans) shall retain sole responsibility for the payment of such benefits
as
and when such Employees become eligible to receive such benefits thereunder.
Section
7.3 Scope
of this Article.
No
provision of this Article VII is intended to or shall inure to the benefit
of,
be enforceable by or create any rights or remedies in favor of, any Employee
or
any dependent or beneficiary thereof, including, without limitation, in
respect
of employment, compensation or benefits with, provided by, or under any
plan,
policy, practice or arrangement of or sponsored by, Purchaser or any
Seller.
51
ARTICLE
VIII
ENVIRONMENTAL
MATTERS
Section
8.1 Environmental
Matters.
(a) Preparation
of Phase II Report.
Sellers
and Purchaser shall cause to be prepared a Phase II Environmental Assessment
in
respect of the Freeport Facility (the “Phase II Report”). The Phase II Report
shall be prepared by an expert selected by Purchaser from three (3) firms
previously identified by Sellers. The cost of the Phase II Report shall be
paid
one-half by Purchaser and one-half by Sellers. The Phase II Report shall
be
completed by October 15, 2005 (the “Phase II Report Due Date”).
(b) Classification
of Remedial Problems.
All
Hazardous Substances and other remedial problems related to the Freeport
Facility shall be classified as follows:
(i) “Type
I
Remedial Problems”, defined as any condition or circumstance that (A) requires
immediate removal, replacement or remediation or (B) does not require immediate
removal, replacement or remediation and does not constitute a Type II Remedial
Problem;
(ii) “Type
II
Remedial Problems”, defined as any condition or circumstance, that does not
require immediate removal, replacement or remediation and that:
| (A) |
include
all PCBs, asbestos, and asbestos-containing materials identified
in
reasonable detail in the Phase I Environmental Study described
in Section
6.13(d) hereof (the “Initial
Study”);
|
| (B) |
is
identified in the Phase II report and would not reasonably be expected
to
result in remediation costs in excess of $250,000; or
|
| (C) |
is
identified in the Phase II report and would reasonably be expected
to
result in remediation costs in excess of $250,000, and the parties
agree
that such condition or circumstance should constitute a Type II
Remedial
Problem hereunder; and
|
(iii) “Remedial
Problems” defined as, collectively, Type I Remedial Problems and Type II
Remedial Problems.
Within
sixty (60) days after the Phase II Report Due Date (the “Settlement Date”),
Purchaser and Sellers shall, acting reasonably and in good faith, (y) identify
any and all facts and circumstances that constitute Remedial Problems other
than
Type II Remedial Problems under Clause (ii)(C) of this Section
8.1(b) and (z) mutually agree on and identify all facts and circumstances
that
constitute Type II Remedial Problems under Clause (ii)(C) of this Section
8.1(b).
52
(c) Remediation
Action and Responsibility for Type I Remedial Problems.
As to
items identified as Type I Remedial Problems, by the Settlement Date, Purchaser
and Sellers shall, acting reasonably and in good faith, agree on a plan,
including the commencement date, to remove, replace or remediate such Type
I
Remedial Problems. Seller shall have responsibility for one hundred percent
(100%) of the direct costs, including Purchaser’s support facilities (e.g.,
utilities and manpower) at Purchaser’s actual costs, associated with remediation
of Type I Remedial Problems.
(d) Remediation
Action and Responsibility for Type II Remedial Problems.
As to
Type II Remedial Problems, removal, replacement or remediation will occur
as
needed or required, but not immediately, and will follow the procedures set
out
in this Section 8.1(d).
(i) During
the thirty (30) day period following the Settlement Date, Sellers and Purchaser
shall analyze the Phase II Report with respect to the Type II Remedial Problems
identified therein, and shall otherwise analyze the nature of the Type II
Remedial Problems theretofore identified. Not later than the date thirty
(30)
days after the Settlement Date, the parties shall, acting reasonably and
in good
faith, agree on a cap, reasonable under the circumstances, for all Type II
Remedial Problems that Sellers are responsible for hereunder.
(ii) Unless
the parties agree otherwise, Sellers will perform or direct performance of
all
Remedial Action with respect to Type II Remedial Problems beginning in the
three
(3) year period commencing with the Settlement Date. Thereafter, Purchaser
will
perform or direct performance of all Remedial Action in respect of such Type
II
Remedial Problems. Responsibility for costs for Type II Remedial Problems
will
be as set forth in Section 8.1(d)(iii).
(iii) Subject
to the cap set forth in Section 8.1(d)(i), (A) for the first two years after
the
Settlement Date, Sellers shall have responsibility for one hundred percent
(100%) of the direct costs, including Purchaser’s support facilities (e.g.,
utilities and manpower) at Purchaser’s actual costs, associated with remediation
of Type II Remedial Problems and (B) for the period commencing on the second
anniversary of the Settlement Date and ending on the sixth anniversary of
the
Settlement Date, Sellers’ responsibility for the direct costs, including
Purchaser’s support facilities (e.g., utilities and manpower) at Purchaser’s
actual costs, associated with remediation of Type II Remedial Problems shall
be
reduced by twenty-five (25%) annually, i.e., Seller’s share of eligible
remediation costs for Type II Remedial Problems after the Settlement Date
shall
be as set forth below:
53
| | |
Sellers
Share
|
Purchaser
Share
|
| | |
of
Responsibility
|
of
Responsibility
|
|
(A)
|
Years
1 and 2 after the
| | |
| |
Settlement
Date
|
100%
|
0%
|
|
(B)
|
Year
3
|
75%
|
25%
|
|
(C)
|
Year
4
|
50%
|
50%
|
|
(D)
|
Year
5
|
25%
|
75%
|
|
(E)
|
Year
6 and after
|
0%
|
100%
|
The
respective share of responsibility of Sellers or Purchaser shall be determined
as of the date that remedial work is first commenced, i.e., if remedial work
is
commenced in Year 3, Sellers will pay 75% and Purchaser 25% of all such costs
even though some of the work is not completed until Year 4. The party that
initially performs or directs the performance of Remedial Action in respect
of a
Type II Remedial Problem shall continue to direct such Remedial Action until
the
completion of the remediation of the Remedial Problem.
Section
8.2 Other
Environmental Matters.
Notwithstanding anything to the contrary set forth herein, and except as
set
forth in Section 8.1 hereof, Sellers shall have the sole responsibility and
obligation for the direct costs, including Purchaser’s support facilities (e.g.,
utilities and manpower) for all Remedial Action required for any violation
of
any Environmental Law existing on, at, or in respect of the Owned Real Property
prior to the Closing Date.
ARTICLE
IX
CONDITIONS
TO CLOSING
Section
9.1 Conditions
to Obligations of all Parties. The
obligations of all parties hereto to consummate the transactions contemplated
by
this Agreement shall be subject to the fulfillment, at or prior to the Closing,
of each of the following conditions:
(a) No
Legal Prohibition.
No Law
shall be enacted, promulgated, issued or enforced by any Governmental Authority
that would prohibit the consummation by either party of the transactions
contemplated by this Agreement and the Ancillary Agreements.
(b) Approvals
Under Competition Laws.
All
notices and filings to or with any Governmental Authority required under
the HSR
Act and any and all similar competition Laws of any jurisdiction applicable
to
the purchase of the Purchased Assets contemplated by this Agreement shall
have
been made, any and all waiting periods (and any extensions thereof) under
the
HSR Act and all such Laws shall have expired or shall have been terminated,
and
all consents and Permits, if any, required thereunder shall have been issued
by
the relevant Governmental Authorities.
54
(c) No
Injunction.
No
preliminary or permanent injunction or other order or decree by any Governmental
Authority that prevents the consummation of the transactions contemplated
by
this Agreement and the Ancillary Agreements shall have been issued and remain
in
effect.
(d) Lien
Discharges.
Such
UCC-3 lien termination statements and other instruments, (A) to be executed
by
XX Xxxxxx Xxxxx Bank and Wilmington Trust Company in their respective capacities
as Collateral Agents under the Collateral Agreements, as are necessary to
release and discharge all Liens subject to discharge by the Collateral Agents
thereunder with respect to the Purchased Assets and (B) to be executed by
the
Persons described in, and as are necessary to release and discharge all Liens
subject to discharge by such Persons described in, Schedule 9.1(d) hereto
with
respect to the Purchased Assets.
Section
9.2 Conditions
to Obligations of Sellers.
The
obligations of each Seller to consummate the transactions contemplated by
this
Agreement shall be subject to the fulfillment, at or prior to the Closing,
of
each of the following additional conditions:
(a)
Representations,
Warranties and Covenants.
The
representations and warranties of Purchaser contained in this Agreement shall
be
true and correct in all material respects as of the Closing, with the same
force
and effect as if made as of the Closing Date, other than such representations
and warranties as are made as of another date, the covenants and agreements
contained in this Agreement to be complied with by Purchaser on or before
the
Closing shall have been complied with in all material respects, and Sellers
shall have received a certificate from Purchaser to such effect signed by
a duly
authorized officer thereof;
(b) USWA
Agreement.
Purchaser shall have executed an agreement with the
Local
Union
in form
and substance reasonably satisfactory to Sellers;
(c) Certain
Approvals.
Sellers
shall have received the consent, in form and substance satisfactory to each,
and
without additional liability to or the need to modify any document, instrument
or agreement heretofore executed by any, Seller, the approval of TACOM of
the
Department of Defense to the manufacture of bias Hummer tires in the manner
contemplated by the Offtake Agreement;
(d) Resolutions.
Sellers
shall have received a true and complete copy, certified by the Secretary
or an
Assistant Secretary of Purchaser, of the resolutions duly and validly adopted
by
the Board of Directors of Purchaser evidencing its authorization of the
execution and delivery of this Agreement and the Ancillary Agreements to
which
it is a party and the consummation of the transactions contemplated hereby
and
thereby;
55
(e) Incumbency
Certificate.
Sellers
shall have received a certificate of the Secretary or an Assistant Secretary
of
Purchaser certifying the names and signatures of the officers of the Purchaser
authorized to sign this Agreement and the Ancillary Agreements to which it
is a
party and the other documents to be delivered hereunder and thereunder;
and
(f) Ancillary
Agreements.
Purchaser
shall have executed and delivered to Sellers each of the Ancillary Agreements
to
which it is a party.
Section
9.3 Conditions
to Obligations of Purchaser.
The
obligations of the Purchaser to consummate the transactions contemplated
by this
Agreement shall be subject to the fulfillment, at or prior to the Closing,
of
each of the following conditions:
(a)
Representations,
Warranties and Covenants.
The
representations and warranties of Sellers contained in this Agreement shall
be
true and correct in all material respects as of the Closing with the same
force
and effect as if made as of the Closing, other than such representations
and
warranties as are made as of another date, the covenants and agreements
contained in this Agreement to be complied with by Sellers on or before the
Closing shall have been complied with in all material respects, and Purchaser
shall have received a certificate of each Seller to such effect signed by
a duly
authorized officer thereof;
(b) Resolutions
of Sellers.
Purchaser
shall have received a true and complete copy, certified by the Secretary
or an
Assistant Secretary of each Seller (or, with respect to Goodyear Mexico,
Persons
exercising similar responsibilities), of the resolutions duly and validly
adopted by the Board of Directors of such Seller evidencing its authorization
of
the execution and delivery of this Agreement and the Ancillary Agreements
and
the consummation of the transactions contemplated hereby and
thereby;
(c) Incumbency
Certificate of Sellers.
The
Purchaser shall have received a certificate of the Secretary or an Assistant
Secretary of each Seller (or, with respect to Goodyear Mexico, Persons
exercising similar responsibilities), certifying the names and signatures
of the
officers of such Seller authorized to sign this Agreement and the Ancillary
Agreements and the other documents to be delivered hereunder and
thereunder;
(d) Consents
and Approvals.
Purchaser
and Sellers shall have received all material Permits and Consents of any
Governmental Authority or third party listed on Schedule 9.3(d)
hereto;
(e) Ancillary
Agreements.
Each Seller
shall have executed and delivered to the Purchaser each of the Ancillary
Agreements to which it is a party;
(f) Due
Diligence.
Purchaser shall have completed its due diligence investigation of the Purchased
Assets and shall not have discovered any fact, circumstance, transaction
or
event of which Purchaser
did not have notice as of the date hereof and that constitutes a material
breach
of the representations and warranties of Sellers set forth herein; provided,
however, that Purchaser shall not be entitled to rely on the condition set
forth
in this Section 9.3(f) at any time after the earlier of the date on which
Purchaser completes such investigation and April 1, 2005;
provided, however, that the foregoing limitations shall not apply to the
extent
that (i) Sellers have not complied with their obligations under Section 6.1
hereof and (ii) Purchaser has provided Sellers with prior written notice
of, and
a reasonable opportunity to cure, such non-compliance. For purposes of the
preceding sentence “material breach” shall mean facts, circumstances,
transactions or events which alone or in the aggregate would, or would
reasonably be expect to equal or exceed One Million and No/100 ($1,000,000)
Dollars. Sellers agree to fully cooperate with Purchaser and to provide,
in a
timely manner, all documents and information requested in respect of Purchaser’s
due diligence investigation of the Purchased Assets. If prior to Closing,
Purchaser delivers written notice to Sellers claiming that Sellers have failed
to cooperate with Purchaser, (which notice shall set forth in detail the
claimed
failure to cooperate), and if Sellers shall fail or refuse to cure such claim
within five (5) Business Days of receipt of such notice, then Purchaser may
deliver a second written notice to Sellers terminating this Agreement effective
upon delivery of said second notice, and thereupon, Purchaser shall have
no
obligation or liability under this Agreement for said termination;
56
(g) Material
Adverse Change.
There
shall not, at any time after the date hereof, have been any Material Adverse
Change affecting the Purchased Assets;
(h) USWA
Agreement.
Purchaser shall have executed an agreement with the Local Union substantially
on
the terms described in Schedule 9.3(h) hereto, and otherwise in form and
substance reasonably satisfactory to Purchaser;
(i) Title
Commitment.
The
Title Company shall have received the Survey and shall have reissued the
Title
Commitment, dated as of the Closing Date, in an aggregate insurable amount
equal
to $9,300,000, deleting, in such reissued Title Commitment, all of the Title
Objections other than the Insured Exceptions, and, except in respect of the
Title Objections and the Insured Exceptions, reflecting no Liens.
ARTICLE
X
REMEDIES
Section
10.1 Survival.
Unless
otherwise expressly provided herein, all of the representations and warranties
set forth in this Agreement shall survive a period of 24 months from the
Closing
Date and, upon such expiration, each party shall have no further right to
indemnification under this Article X except that in the case of representations
and warranties contained in Section 4.18 herein, survival of the representations
and warranties shall be limited to seven (7) years, or if longer, the term
of
any agreement, consent order or order entered into or binding upon Sellers
with
respect
to any matters which are the subject of any representations or warranties
contained in Section 4.18 herein. Following the termination of such periods,
neither Purchaser nor Sellers, as the case may be, shall have any other
indemnification obligations under this Article X relating to representations
or
warranties.
57
Section
10.2 Indemnification
by Seller.
Subject
to the limitations set forth in Article VIII and in this Article X and
unless otherwise provided herein, Sellers shall defend and hold harmless
Purchaser and its Affiliates from and against any and all actions, suits,
Actions, charges, complaints, claims, demands, injunctions, judgments, orders,
decrees, rulings, damages, dues, penalties, fines, deficiencies, costs, amounts
paid in settlement, liabilities, obligations, losses, expenses and fees,
including court costs and reasonable attorneys’ fees and expenses (collectively,
“Damages”), and shall indemnify and hold Purchaser and its Affiliates harmless
for, and will pay to Purchaser or such Affiliates the amount of, any Damages
incurred or suffered, directly or indirectly, by Purchaser related to or
as a
result of (a) any inaccuracy or misrepresentation in any
representation or warranty made by Sellers in this Agreement, or in any
certificate of Sellers delivered pursuant hereto, (b) any failure to perform
or
the breach of any covenant or agreement made by Sellers in this Agreement,
(c) any Excluded Liability or any Excluded Asset or (d) except in
respect of any Assumed Liability, any Tax liability of Sellers or any Tax
liability attributable to the Purchased Assets or the operation of the Business
with respect to any Tax year or portion thereof for any period ending on
or
prior to the Closing Date (or, for any Tax year beginning before and ending
after the Closing Date, to the extent allocable to the portion of such period
beginning before
and
ending immediately prior to the Closing Date).
Section
10.3
Indemnification
by Purchaser.
Subject
to the limitations set forth in this Article X, Purchaser shall defend and
hold harmless Sellers and their respective Affiliates from and against any
and
all Damages and
shall
indemnify and hold Sellers and their respective Affiliates harmless for,
and
will pay to the relevant Seller or such Affiliate the amount of, any Damages
incurred or suffered, directly or indirectly, by such Seller or Affiliate
related to or as a result of (a) any inaccuracy or misrepresentation
in any representation or warranty made by Purchaser in this Agreement, or
in any
certificate of Purchaser delivered pursuant hereto, (b) any failure to perform
or the breach of any covenant or agreement made by Purchaser in this Agreement
or any Ancillary Agreement, (c) any Assumed Liability or (d) except in
respect of any Excluded Liability, any Tax liability of Purchaser or any
Tax
liability attributable to the Purchased Assets or the operation of the Business
with respect to any Tax year or portion thereof for any period beginning
on or
after the Closing Date (or, for any Tax year beginning before and ending
after
the Closing Date, to the extent allocable to the portion of such period
beginning on the Closing Date).
Section
10.4
Procedure
for Establishment of Claim.
(a) If any claims are asserted by any party which is entitled to
indemnification hereunder (the “Indemnified Party”), which, if sustained, could
result in an indemnifiable claim by a party (an “Indemnifiable Claim”), the
Indemnified Party shall promptly provide written notice (an “Indemnity Notice”)
to the party responsible for such indemnification
hereunder (the “Indemnifying Party”) of such claim giving the particulars
thereof. The Indemnified Party shall give the Indemnity Notice to the
Indemnifying Party as promptly as practicable and before expiration of the
indemnification survival periods set forth in Section 10.1 hereof, as the
case
may be, so that the Indemnifying Party may investigate and respond to such
claim; provided, however, that the failure of the Indemnified Party to give
timely notice hereunder shall not relieve the Indemnifying Party of its
obligations hereunder unless and only to the extent that such failure caused
the
Damages for which the Indemnifying Party is obligated to be greater than
they
would have been had the Indemnified Party given timely notice.
58
(b) If
an
Indemnified Party receives notice of the assertion of a claim from a third
party
in respect of which the Indemnified Party may have a claim under
Section 10.2 or 10.3, as the case may be (a “Third Party Claim”), then the
following shall apply:
(i) The
Indemnified Party shall promptly (and in any event within ten (10) calendar
days
after the service of the citation or summons or similar legal process) provide
an Indemnity Notice of such Third Party Claim to the Indemnifying Party;
provided,
however,
that
the failure of the Indemnified Party to give timely notice hereunder shall
not
relieve the indemnifying party of its obligations hereunder unless and only
to
the extent that such failure caused the Damages for which the Indemnifying
Party
is obligated to be greater than they would have been had the Indemnified
Party
given timely notice. Such Indemnity Notice shall describe in reasonable detail
the nature of the Third Party Claim and the basis for the Indemnified Party’s
claim under Section 10.2 or 10.3, as the case may be.
(ii) Upon
receipt of an Indemnity Notice, the Indemnifying Party shall have the right,
but
not the obligation, to assume the defense of such Third Party Claim. If the
Indemnifying Party fails to assume the defense of such Third Party Claim
within
thirty (30) calendar days after receipt of the Indemnity Notice in respect
thereof, the Indemnified Party against which such Third Party Claim has been
asserted shall (upon delivering written notice to such effect to the
Indemnifying Party) have the right to undertake the defense, compromise or
settlement of such Third Party Claim (which undertaking shall, to the extent
the
Indemnified Party is entitled to indemnification under Section 10.2 or 10.3,
as
applicable, in respect of such Third Party Claim, be at the Indemnifying
Party’s
cost and expense, and on behalf of, and for the account and risk of, the
Indemnifying Party), subject to the right of the Indemnifying Party to assume
the defense of such Third Party Claim at any time prior to settlement,
compromise or final determination thereof; provided, however, that the
Indemnified Party shall not enter into any such compromise or settlement
without
the written consent of the Indemnifying Party, such consent not to be
unreasonably withheld or delayed. In the event the Indemnified Party assumes
the
defense of the Third Party Claim, the Indemnified Party will keep the
Indemnifying Party reasonably informed of the progress of any such defense,
compromise or settlement. The Indemnifying Party shall not be liable for
any
settlement of any action effected without its consent, but if settled with
the
consent of the Indemnifying
Party, or if there be a final judgment beyond review or appeal, for the claimant
in any such Third Party Claim, the Indemnifying Party agrees to indemnify
and
hold harmless the Indemnified Party from and against any loss or liability
by
reason of such settlement or judgment. Any party which does not undertake
the
defense of a Third Party Claim may, at its own expense, retain such additional
attorneys and other advisors as it shall deem necessary, which attorneys
and
advisors shall be permitted by the party undertaking such defense, and its
attorneys, to observe and participate in the defense of such Third Party
Claim.
59
Section
10.5
Limitations
and Remedies.
(a)
No
amount shall be payable in indemnification under this Article X in respect
of
any claim based on the representations and warranties of Sellers or Purchaser,
as the case may be, set forth herein (each a “Warranty Claim”), unless the
aggregate amount of Damages in respect of which Sellers or Purchaser,
respectively, would be liable under this Article X, in each case in respect
of
all Warranty Claims against Sellers or Purchaser, as the case may be, exceeds,
in the aggregate, One Million and No/100 ($1,000,000) Dollars, and then only
to
the extent such Damages exceed such amount. In addition, (i) no claim for
indemnification shall be asserted with respect to any single Warranty Claim
for
Damages in an amount less than Ten Thousand and No/100 ($10,000) Dollars
(it
being understood that all Damages arising from the same operative facts and
circumstances shall be deemed a single aggregate claim and that no such claim
shall be considered for the purpose of determining the amount set forth in
the
first sentence of this Section 10.5(a)); and (ii) no claim for indemnification
under this Article X in respect of any Warranty Claim shall first be asserted
after the expiration of the applicable survival period referred to in Section
10.1 hereof. Notwithstanding the foregoing, the limitations set forth in
this
Section 10.5(a) shall not apply to any claim based on the representations
and
warranties set forth in Sections 4.19 or 5.6 hereof or any claim based on
breaches of representations and warranties of which a party had Knowledge
or
claims based on any intentional breach of any covenant or warranty.
(b) The
maximum amount of Damages for which Sellers may be liable under this Article
X
shall be an amount equal to $30,000,000.
(c) In
any
case where an Indemnified Party recovers from third parties all or any part
of
any amount paid to it by an Indemnifying Party pursuant to this Article X,
such
Indemnified Party shall promptly pay over to the Indemnifying Party the amount
so recovered, but not in excess of any amount previously so paid by the
Indemnifying Party.
(d) The
Indemnified Party shall be obligated to use its reasonable best efforts to
mitigate its Damages prior to collecting an indemnification payment under
this
Article X.
(e) No
party
shall have any obligation to indemnify or hold harmless any Person for any
consequential Damages arising out of any interruption of business, loss of
profits, loss of use of facilities or loss of goodwill.
60
Section
10.6 Exclusive
Remedy.
Except
for (a) the equitable remedies contemplated under Section 6.12 and (b)
claims based on actual fraud of one of the parties hereto, this Article X
sets
forth the exclusive remedy owing from Purchaser or Sellers for claims that
arise
from or are related to this Agreement. Each of the parties hereby waives
any
other claim, cause of action, or remedy that it might assert against the
other,
with respect to the matters that arise from or are related to this Agreement,
whether under statutory or common Law, any Environmental Law, or securities,
trade regulation or other Law.
ARTICLE
XI
TERMINATION
Section
11.1 Termination.
This
Agreement may be terminated at any time prior to the Closing by:
(a) the
mutual written consent of Sellers and Purchaser;
(b) either
Sellers or Purchaser, by written notice to the other, if the Closing has
not
occurred by the close of business on June 30, 2005, and (i) the failure to
consummate the transactions contemplated hereby on or before such date did
not
result from the failure by the party seeking termination of this Agreement
to
fulfill any undertaking or commitment provided for herein that is required
to be
fulfilled prior to the Closing and (ii) the party seeking termination is
not
otherwise in material breach of its obligations hereunder;
(c) either
Sellers or Purchaser, by written notice to the other, if any Governmental
Authority shall have issued an order, decree or ruling or taken any other
action
restraining, enjoining or otherwise prohibiting the transactions contemplated
hereby and such order, decree, ruling or other action shall have become final
and non-appealable; provided, however, that the party seeking to terminate
this
Agreement pursuant to this Section 11.1(c) shall have complied with Sections
3.3
and 6.4(b) hereof, and with respect to other matters not covered thereby,
shall
have used commercially reasonable efforts to remove such injunction order
or
decree;
(d) Purchaser,
by written notice to Sellers, at any time on or before 10:00 a.m. Eastern
Standard Time on April 1, 2005, or if earlier, the date which Purchaser has
completed its due diligence investigation of the Purchased Assets, in the
event
that Purchaser in connection with such investigation, shall have discovered
any
fact, circumstance, transaction or occurrence of which Purchaser had no notice
as of the date hereof and as a result of which Purchaser would be entitled
(and
Purchaser would otherwise have the right) to decline to consummate the
transactions contemplated hereby based solely upon Section 9.3(f) hereof;
provided, however, that Purchaser may not terminate this Agreement pursuant
to
this Section 11.1(d) unless Purchaser shall have provided Sellers with written
notice of, and a reasonable opportunity to cure the breach (or deemed breach)
of
any
representation or warranty as a result of which Purchaser would be entitled
to
rely on such Section 9.3(f) in declining to consummate such transactions,
or is
not satisfied with its findings; or
61
(e)
Purchaser
or Sellers, by written notice to the other party (or parties, as applicable),
at
any time after June 30, 2005, in the event that Purchaser has not executed
an
agreement with the Local Union meeting the description set forth in Section
9.3(h) hereof on or before such date; provided, however, that Purchaser shall
not be entitled to terminate this Agreement pursuant to this Section 11.1(e)
if
Purchaser fails to use all reasonable efforts, acting as promptly as practicable
and in good faith, to enter into an agreement with the Local Union on the
terms
contemplated by Section 9.3(h) hereof.
Section
11.2 Procedure
and Effect of Termination.
In the
event of termination of this Agreement pursuant to Section 11.1 hereof, all
obligations of the parties under this Agreement shall thereupon terminate
and
become void and have no effect, and the transactions contemplated hereby
shall
be abandoned without further action by the parties, in each case without
liability to any party, except that (i) the obligations set forth in Section
6.1(b) hereof, this Section 11.2 and Article XII shall survive the termination
of this Agreement and (ii) nothing herein shall relieve any party from liability
for any breach occurring prior to termination.
ARTICLE
XII
MISCELLANEOUS
Section
12.1 Interpretation.
In
interpreting
this
Agreement, the following principles will apply: (a)
all
words that are singular include the plural, and a word in any one gender
includes the other genders, as the context may require; and (b) the headings
and
captions that appear in this Agreement have been inserted for the convenience
of
the reader and do not limit or in any other way affect the meaning of its
terms
and conditions.
Section
12.2 Notices.
All
notices, demands and other communications which may or are required to be
given
or made by any party to the others in connection with this Agreement shall
be in
writing (including telex, fax or other similar writing) and shall be deemed
to
have been duly given or made: (a) if sent by registered or certified mail,
three
(3) days after the posting thereof with first class postage attached; (b)
if
sent by hand or overnight delivery, upon the delivery thereof; and (c) if
sent
by telex or fax, upon confirmation of receipt of such telex or fax, in each
case
addressed to the respective parties as follows:
If
to
Sellers:
The
Goodyear Tire & Rubber Company
0000
Xxxx
Xxxxxx Xxxxxx
00
Xxxxx
XX
00000
Xxxxxx
Xxxxxx of America
Attention:
Corporate Secretary
Fax
Number: 0 (000) 000-0000
If
to
Purchaser:
Xxxxxxx
X. Xxxxxx, Xx.
Titan
Tire Corporation
0000
Xxxxxx Xxxxxx
Xxxxxx,
XX 00000
Fax:
000.000.0000
with
a
copy to:
Xxxxx
X.
Xxxxxx
General
Counsel
Titan
International, Inc.
0000
Xxxxxx Xxxxxx
Xxxxxx,
XX 00000
Fax:
000.000.0000
with
a
second copy to:
Xxxxxx
X.
Xxxxx, Xx.
Xxxxxx
LLP
000
Xxxxxxxxxxx Xxxxxx, 00xx
Xxxxx
Xxxxxxx,
XX 00000
Fax:
000.000.0000
or
to
such other address and to the attention of such other persons as may be
designated from time to time by such other party hereto by notice given in
the
manner provided in this Section 12.2.
Section
12.3 Waiver.
(a) The
failure of any party hereto to enforce, at any time, any provision of this
Agreement, or to exercise any option or privilege that is herein provided,
shall
not be construed to be a waiver of that provision, option or privilege, nor
in
any way to affect the validity of this Agreement or any party’s
right to enforce thereafter every provision strictly in accordance with its
terms, or to exercise any option or privilege given to it hereunder.
(b) No
waiver
by any party of any default by any other party of any term or provision
contained herein will be deemed valid unless the waiver is in writing and
signed
by the waiving party. No
such
waiver will in any event be deemed a waiver of any subsequent default under
the
same or any other term or provision contained herein.
63
Section
12.4
Entire
Agreement.
This
Agreement, and the Exhibits and Schedules hereto and the documents and
instruments referred to herein, contains the entire agreement made by the
parties hereto with respect to the subject matter hereof, superseding any
and
all prior or contemporaneous representations, warranties and agreements,
whether
oral or written, with respect thereto.
Section
12.5
Titan
International Guaranty.
On the
date hereof, Purchaser has caused to be delivered to Sellers the duly executed
Titan International Guaranty.
Section
12.6 Amendment.
This
Agreement may be amended or varied only by a written instrument signed by
duly
authorized representatives of all parties and expressly providing that this
Agreement is being amended thereby.
Section
12.7 Parties
in Interest; Assignment.
This
Agreement will be binding upon, and inure to the benefit of, the parties
hereto
and their permitted successors and assigns, and nothing herein is intended
to or
shall confer any right, benefit or remedy on any other person or entity under
or
by reason hereof. No party
may
assign its rights under this Agreement or delegate performance hereunder
to
another person or entity without the written consent of the other
party.
Section
12.8 No
Partnership.
Nothing
contained in this Agreement or any of the Ancillary Agreements will be deemed
or
construed by the parties hereto, or by any other person or entity, to create
the
relationship of principal and agent, or of partnership, strategic alliance
or
joint venture. Should the parties have any discussion regarding the formation
of
an alliance or joint venture, no such alliance or joint venture will come
to
exist unless all parties have signed a formal agreement approved by their
boards
of directors and any and all necessary consents of, filings with or waiting
or
notice periods imposed by, any and all Governmental Authorities have been
obtained or made, or have expired, as the case may be.
Section
12.9 Governing
Law; Disputes.
(a)
The
terms
and provisions of this Agreement shall be construed under and governed by
the
Laws of the State of Illinois without giving effect to the principles of
conflict of laws thereof. The
parties will comply with all applicable Laws in performing their obligations
under this Agreement.
(b) In
the
event of a dispute between or among the parties arising out of or in connection
with this Agreement, the parties to the dispute will make every effort to
resolve, promptly and in good faith, such dispute. In the event that the
dispute
cannot be resolved, any party may notify any other of the existence of a
possible deadlock by sending a letter signed by management responsible for
the
operation of this Agreement to management of the other party. Within 15 business
days after receipt of
64
that
notice, management of the parties shall arrange to meet at a mutually agreeable
time and place, and thereafter as often as they reasonably deem necessary
for a
period of 90 days from the date of that first meeting, to exchange relevant
information and to attempt to resolve the dispute. In the event that responsible
management have not been successful in resolving the dispute within 90 days
from
the date of the first meeting, any party may initiate an action or take such
other action as is permitted under this Agreement in accordance with the
time
periods set out elsewhere in this Agreement, or, in each case, under any
of the
Ancillary Agreements. Except as otherwise set forth herein or therein, each
party shall be responsible for its own legal fees and expenses.
(c) Notwithstanding
the requirement for mutual consultation,
any
party may at any time initiate an action in respect of any of the equitable
remedies to which such party is entitled hereunder.
Section
12.10 Counterparts.
This
Agreement may be executed in multiple counterparts, each of which shall be
deemed to be an original, but all of which, taken together, shall constitute
one
and the same agreement.
Section
12.11 Severability.
If any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced under any rule of law or public policy, all other conditions
and
provisions of this Agreement shall nevertheless remain in full force and
effect,
so long as the economic and legal substance of the transactions contemplated
hereby are not affected in a manner materially adverse to either party. Upon
any
determination that any such term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith
to
modify this Agreement so as to effect the original intent of the parties
as
closely as possible in a mutually acceptable manner in order that the
transactions contemplated hereby be consummated as originally contemplated
to
the fullest extent possible.
Section
12.12 Time
of the Essence.
Time
is
of the essence of this Agreement.
65
