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PURCHASE AGREEMENT
By and Between
TREASURE CHEST ADVERTISING COMPANY, INC.,
as Purchaser,
AND
Xxxx X. Xxxxxxxx Living Trust u/a dated December 7, 1983, as amended,
Xxxxx X. Xxxxxxxx Living Trust u/a dated December 7, 1983, as amended, JBS-MDS
Irrevocable Trust u/a dated December 29, 1976, JBS-XXX
Irrevocable Trust u/a dated December 29, 1976, JBS-RJS
Irrevocable Trust u/a dated December 29, 1976, JBS-MDS
Irrevocable Trust Xx. 0 x/x xxxxx Xxxxxxxx 00, 0000, XXX-XXX
Irrevocable Trust No. 2 u/a dated December 31, 1980, JBS-RJS
Irrevocable Trust No. 2 u/a dated December 31, 1980,
Xxxxx Xxxxxxxxx,
Xxxxxxx Xxxxxxxxx, Xxx Xxxxxxxx,
and Xxxxxxx Xxxxxxxx, as Sellers,
AND
PARK PROPERTIES
AND
Xxxx X. Xxxxxxxx, Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxxx, Xxx
Xxxxxxxx and Xxxxxxx Xxxxxxxx, as Partners
Dated as of October 1, 1996
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Page
ARTICLE I - SALE AND PURCHASE OF THE SHARES AND THE
PARTNERSHIP ASSETS . . . . . . . . . . . . . . . . . . . . 2
Section 1.1 The Shares . . . . . . . . . . . . . . . . . 2
Section 1.2 The Partnership Assets . . . . . . . . . . . 2
Section 1.3 Purchase Price . . . . . . . . . . . . . . . 2
Section 1.4 Consideration . . . . . . . . . . . . . . . . 3
Section 1.5 Closing . . . . . . . . . . . . . . . . . . . 3
Section 1.6 Deliveries by Seller . . . . . . . . . . . . 3
Section 1.7 Deliveries by the Partnership . . . . . . . . 5
Section 1.8 Deliveries by Purchaser . . . . . . . . . . . 6
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . 8
Section 2.1 Organization, Standing and Qualification . . 8
Section 2.2 Authority Relative to this Agreement . . . . 8
Section 2.3 Capitalization . . . . . . . . . . . . . . . 8
Section 2.4 Consents and Approvals; No Violation . . . . 9
Section 2.5 Books and Records. . . . . . . . . . . . . 10
Section 2.6 Financial Statements . . . . . . . . . . . 11
Section 2.7 Absence of Undisclosed Liabilities . . . . 11
Section 2.8 Accounts Receivable . . . . . . . . . . . . 12
Section 2.9 Inventory . . . . . . . . . . . . . . . . . 12
Section 2.10 Absence of Certain Changes or Events . . . 12
Section 2.11 Real Property . . . . . . . . . . . . . . 14
Section 2.12 Leases . . . . . . . . . . . . . . . . . . 14
Section 2.13 Title to Assets . . . . . . . . . . . . . 15
Section 2.14 Intellectual Property; Business KnowHow . 15
Section 2.15 Contracts . . . . . . . . . . . . . . . . 16
Section 2.16 Litigation . . . . . . . . . . . . . . . . 17
Section 2.17 Plants, Buildings, Structures, Facilities and
Equipment . . . . . . . . . . . . . . . . 18
Section 2.18 Insurance . . . . . . . . . . . . . . . . 19
Section 2.19 Employee Benefit Plans. . . . . . . . . . 20
Section 2.20 Tax Matters . . . . . . . . . . . . . . . 22
Section 2.21 Environmental Matters. . . . . . . . . . . 23
Section 2.22 Labor Relations and Employment . . . . . . 27
Section 2.23 Compliance with Applicable Law . . . . . . 28
Section 2.24 Brokers or Finders . . . . . . . . . . . . 28
Section 2.25 Disclosure . . . . . . . . . . . . . . . . 28
Section 2.26 Customers and Suppliers . . . . . . . . . 29
Section 2.27 Transactions with Affiliates . . . . . . . 29
Section 2.28 Government Permits . . . . . . . . . . . . 30
Section 2.29 Guarantees . . . . . . . . . . . . . . . . 30
Section 2.30 Comon Activities . . . . . . . . . . . . . 31
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF
THE PARTNERSHIP . . . . . . . . . . . . . . . 31
Section 3.1 Organization . . . . . . . . . . . . . . . 31
Section 3.2 Authority Relative to this Agreement . . . 31
Section 3.3 Partnership Interests . . . . . . . . . . . 31
Section 3.4 Consent and Approvals; No Violation . . . . 32
Section 3.5 Title to Partnership Assets . . . . . . . . 32
Section 3.6 Environmental Matters . . . . . . . . . . . 33
Section 3.7 Litigation. . . . . . . . . . . . . . . . . 35
Section 3.8 Insurance. . . . . . . . . . . . . . . . . 35
Section 3.9 Compliance with Applicable Law. . . . . . . 35
Section 3.10 Governmental Permits . . . . . . . . . . . 36
Section 3.11 Entire Business. . . . . . . . . . . . . . 36
Section 3.12 Contracts . . . . . . . . . . . . . . . . 37
Section 3.13 Plants, Buildings, Structures, Facilities
and Equipment . . . . . . . . . . . . . . 37
Section 3.14 Brokers or Finders . . . . . . . . . . . . 38
Section 3.15 Disclosure. . . . . . . . . . . . . . . . 38
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF PURCHASER . . 39
Section 4.1 Organization, Standing and Qualification . 39
Section 4.2 Authority Relative to this Agreement . . . 39
Section 4.3 Consents and Approvals; No Violation . . . 39
ARTICLE V - COVENANTS . . . . . . . . . . . . . . . . . . . 40
Section 5.1 Conduct of Business . . . . . . . . . . . . 40
Section 5.2 Conduct of Partnership. . . . . . . . . . . 43
Section 5.3 Access to Company Information;
Confidentiality . . . . . . . . . . . . . 43
Section 5.4 Access to Partnership Information;
Confidentiality. . . . . . . . . . . . . . 44
Section 5.5 Disclosure Supplements . . . . . . . . . . 45
Section 5.6 Reasonable Best Efforts . . . . . . . . . . 45
Section 5.7 Further Assurances . . . . . . . . . . . . 46
Section 5.8 No Solicitation by Seller . . . . . . . . . 46
Section 5.9 No Solicitation by the Partnership. . . . . 47
Section 5.10 Fees and Expenses . . . . . . . . . . . . 47
Section 5.11 Repayment of Loans, Advances, Notes, etc . 47
Section 5.12 Dividends, Distributions, Etc. . . . . . . 48
Section 5.13 Public Announcements . . . . . . . . . . . 48
Section 5.14 Financial Statements . . . . . . . . . . . 48
Section 5.15 Environmental Due Diligence . . . . . . . 49
Section 5.16 NonCompetition Agreement . . . . . . . . . 49
Section 5.17 Employment Agreement . . . . . . . . . . . 49
Section 5.18 Escrow Agreement . . . . . . . . . . . . . 49
Section 5.19 Books and Records . . . . . . . . . . . . 49
Section 5.20 General Release . . . . . . . . . . . . . 49
Section 5.21 Tax Matters . . . . . . . . . . . . . . . 50
Section 5.22 Subchapter S Election . . . . . . . . . . 53
Section 5.23 Plans . . . . . . . . . . . . . . . . . . 53
Section 5.24 Compliance with Laws and Contracts. . . . 53
Section 5.25 Certificate Related to Partnership
Mortgage . . . . . . . . . . . . . . . . 54
Section 5.26 Transactions with Affiliates . . . . . . . 54
ARTICLE VI - CONDITIONS . . . . . . . . . . . . . . . . . . 54
Section 6.1 Conditions to Obligations of Purchaser . . 54
Section 6.2 Conditions to Obligations of Seller and
the Partnership . . . . . . . . . . . . . 57
ARTICLE VII - TERMINATION . . . . . . . . . . . . . . . . . 58
Section 7.1 Termination. . . . . . . . . . . . . . . . 58
Section 7.2 Effect of Termination. . . . . . . . . . . 59
ARTICLE VIII - SURVIVAL; INDEMNIFICATION . . . . . . . . . . 59
Section 8.1 Survival Periods . . . . . . . . . . . . . 59
Section 8.2 Indemnification . . . . . . . . . . . . . . 60
Section 8.3 Method of Asserting Claims . . . . . . . . 61
Section 8.4 Seller's Environmental Indemnity . . . . . 64
Section 8.5 The Partnership's Environmental Indemnity . 65
ARTICLE IX - MISCELLANEOUS . . . . . . . . . . . . . . . . . 66
Section 9.1 Notices . . . . . . . . . . . . . . . . . . 66
Section 9.2 Descriptive Headings . . . . . . . . . . . 67
Section 9.3 Counterparts . . . . . . . . . . . . . . . 67
Section 9.4 Entire Agreement; Assignment . . . . . . . 67
Section 9.5 Amendment . . . . . . . . . . . . . . . . . 68
Section 9.6 Extensions; Waiver . . . . . . . . . . . . 68
Section 9.7 Governing Law . . . . . . . . . . . . . . . 68
Section 9.8 Specific Performance . . . . . . . . . . . 68
Section 9.9 Parties in Interest . . . . . . . . . . . . 68
Section 9.10 Severability . . . . . . . . . . . . . . . 68
Section 9.11 Consent to Service of Process . . . . . . 68
EXHIBITS
Exhibit 1.1 Shares and Options of Company
Exhibit A Definitions
Exhibit B Escrow Agreement
Exhibit C Secretary's Certificate of Company
Exhibit D Seller's Certificate
Exhibit E Opinion of Counsel to the Seller and Company
Exhibit F Form of Stock Option Agreement
Exhibit G Certificate of Purchaser
Exhibit H Non-Competition Agreement
Exhibit I Certificate of Partnership
Exhibit J Opinion of Counsel to the Partnership
Exhibit K Allocation among Sellers
Exhibit L Installment Note
DISCLOSURE SCHEDULE
Section 2.1 Business of Company
Directors and Officers of Company
Section 2.3 Record Holders of Common Stock of Company
Section 2.4 Consents and Approvals
Section 2.5 Books and Records
Section 2.8 Accounts Receivable
Section 2.9 Inventory
Section 2.10 Absence of Certain Changes or Events
Section 2.11 Owned Real Property
Section 2.12 Leases
Section 2.13 Encumbrances
Section 2.14 Intellectual Property and Business Know-How
Section 2.15 Contracts
Section 2.16 Litigation
Section 2.17 Equipment
Section 2.18 Insurance
Section 2.19 Employee Benefit Plans
Section 2.20 Tax Matters
Section 2.21 Environmental Matters
Section 2.22 Labor Relations and Employment
Section 2.26 List of Customers and Suppliers
Section 2.27 Transactions with Affiliates
Section 2.28 Governmental Permits
Section 5.1 Conduct of Business
PARTNERSHIP DISCLOSURE SCHEDULE
Section 1 Partnership Assets
Section 3.1 Business of Partnership
Section 3.3 Interests in Partnership
Section 3.4 Consents and Approvals
Section 3.5 Encumbrances
Section 3.6 Environmental Matters
Section 3.7 Litigation
Section 3.8 Insurance
Section 3.10 Governmental Permits
Section 3.11 Excluded Assets
Section 3.12 Contracts
Section 5.2 Conduct of Partnership
PURCHASER DISCLOSURE SCHEDULE
Section 4.3 Consents and Approvals
PURCHASE AGREEMENT (the "Agreement"), dated as of
October 1, 1996, by and between Treasure Chest Advertising
Company, Inc., a Delaware corporation ("TCA"), or its permitted
assigns (TCA, or such assigns, "Purchaser"), and Xxxx X. Xxxxxxxx
Living Trust u/a dated December 7, 1983, as amended, Xxxxx X.
Xxxxxxxx Living Trust u/a dated December 7, 1983, as amended,
JBS-MDS Irrevocable Trust u/a dated December 29, 1976, JBS-XXX
Irrevocable Trust u/a dated December 29, 1976, JBS-RJS
Irrevocable Trust u/a dated December 29, 1976, JBS-MDS
Irrevocable Trust Xx. 0 x/x xxxxx Xxxxxxxx 00, 0000, XXX-XXX
Irrevocable Trust No. 2 u/a dated December 31, 1980, JBS-RJS
Irrevocable Trust No. 2 u/a dated December 31, 1980, Xxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxxx, Xxx Xxxxxxxx and Xxxxxxx Xxxxxxxx
(collectively, "Seller" or "Sellers") and Park Properties, a
Michigan general partnership ("Partnership") and Xxxx X.
Xxxxxxxx, Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxxx, Xxx Xxxxxxxx and
Xxxxxxx Xxxxxxxx (the Partners ).
W I T N E S S E T H
WHEREAS, immediately prior to the date of this
Agreement there were outstanding 2,403 shares of common stock, no
par value (the "Common Stock"), of PrintCo., Inc., a Michigan
corporation (the "Company"), all of which are owned beneficially
and of record by Sellers (as more fully described in Exhibit 1.1
hereto), and certain of the Sellers own (as more fully described
in Exhibit 1.1 hereto) options to purchase, in the aggregate, 35
shares of Common Stock (the "Options"), which Options will be
exercised or canceled prior to the Closing (as defined herein)
or, with the agreement of Big Flower (as defined herein),
exchanged at the Closing for options to purchase shares of common
stock of Big Flower, resulting in up to 2,438 shares of Common
Stock being outstanding at the Closing;
WHEREAS, upon the terms and subject to the conditions
of this Agreement, Purchaser has agreed to acquire from Sellers,
and Sellers have agreed to sell to Purchaser, all the shares of
Common Stock that are outstanding as of the Closing (the
"Shares"); and Purchaser has agreed to cause Options to purchase
35 shares of Common Stock to be exchanged for options to purchase
17,196 shares of common stock of Big Flower at an exercise price
of $2.50 per share and Sellers have agreed to exchange such
Options on such terms;
WHEREAS, certain assets of the Partnership, which are
set forth in Section 1 of the Partnership Disclosure Schedule,
are to be sold to Purchaser (the "Partnership Assets");
WHEREAS, upon the terms and subject to the conditions
of this Agreement, Purchaser has agreed to acquire from the
Partnership, and the Partnership has agreed to sell to Purchaser,
the Partnership Assets;
NOW, THEREFORE, in consideration of the foregoing and
the respective representations, warranties, covenants,
agreements, and conditions contained herein, and intending to be
legally bound hereby, the parties agree as follows:
For the purposes hereof, capitalized terms used herein
shall have the meaning assigned to such terms in Exhibit A.
ARTICLE I
SALE AND PURCHASE OF THE SHARES AND THE PARTNERSHIP ASSETS
Section 1.1 The Shares. Upon the terms and subject to
the conditions of this Agreement, at the Closing, each Seller
shall sell, convey, assign, transfer and deliver to Purchaser,
and Purchaser shall purchase, acquire and accept from each
Seller, all of the Shares owned by such Seller (which Shares and
the Options that will either be exercised prior to Closing or,
with the agreement of Big Flower, exchanged at the Closing for
options to purchase shares of common stock of Big Flower are set
forth on Exhibit 1.1 hereto), free and clear of any Encumbrances.
Section 1.2 The Partnership Assets. Upon the terms
and subject to the conditions of this Agreement, at the Closing
the Partnership shall sell, convey, assign, transfer and deliver
to Purchaser, and Purchaser shall purchase, acquire and accept
from the Partnership, all of the Partnership Assets, free and
clear of any Encumbrances other than Permitted Encumbrances.
Section 1.3 Purchase Price.
(a) Upon the terms and subject to the conditions
contained in this Agreement, in consideration of the aforesaid
sale, conveyance, assignment, transfer and delivery of the
Shares, Purchaser agrees to pay to NBD Bank, as agent (the
"Seller's Agent") for the Sellers, at the Closing an amount equal
to (i) $20,263,650 for all Shares owned by such Sellers as set
forth on Exhibit 1.1 hereto less (ii) $172,821, which the parties
hereby agree represents the aggregate intrinsic value of any
Options that are exchanged pursuant to the last sentence of this
Section 1.3(a) (the price paid to all Sellers for all the Shares
being referred to herein as the "Shares Purchase Price") less an
amount equal to $200,000 (the amount so withheld being referred
to herein as the "Escrow Amount"), which will be paid by the
Purchaser to the Escrow Agent as required by Section 1.3(c)
hereof. The Seller's Agent shall allocate and distribute the
Shares Purchase Price received at Closing to the Sellers in the
amounts and in the manner authorized by the Sellers. With the
agreement of Big Flower, Sellers may exchange Options to purchase
an aggregate of 35 shares of Common Stock of the Company for
options to purchase an aggregate of 17,196 shares of common stock
of Big Flower at an exercise price of $2.50 per share, as
evidenced by the execution and delivery at the Closing by Big
Flower and any holder of Options desiring to exchange such
Options of a stock option agreement substantially in the form of
Exhibit F hereto (a "Stock Option Agreement").
(b) Upon the terms and subject to the conditions
contained in this Agreement, in consideration of the aforesaid
sale, conveyance, assignment, transfer and delivery of the
Partnership Assets, Purchaser agrees to pay to NBD Bank, as agent
for the Partnership (the "Partnership's Agent"), at the Closing
an amount equal to $2.325 million, of which $325,000 will be in
cash and $2.0 million will be paid under an installment note
substantially in the form of Exhibit L hereto (the "Installment
Note"), plus the amount (which amount shall not exceed $3.1
million in principal, interest and prepayment penalties) of the
outstanding principal and interest owed at the Closing Date on
the Partnership Mortgage as set forth in the payoff letter
required by Section 1.7(g) hereto (the "Assets Purchase Price").
The amount of the Installment Note shall be subject to reductions
with respect to all claims for indemnification pursuant to
Section 5.21 and Article VIII of this Agreement regardless of
whether such claims are against the Sellers, the Partnership or
the Partners. The Partnership's Agent shall allocate and
distribute the Assets Purchase Price received at Closing and paid
under the Installment Note to the Partners in the amounts and in
the manner authorized by the Partners.
(c) At the Closing, Purchaser shall deliver to the
Escrow Agent pursuant to the Escrow Agreement the Escrow Amount
to be held and distributed in connection with Taxes of the
Sellers as provided in Section 5.21(f).
Section 1.4 Consideration. The Purchase Price to be
paid at the Closing will be comprised of cash and the Installment
Note.
Section 1.5 Closing. Upon the terms and subject to
the conditions contained in this Agreement, the consummation of
the transactions contemplated in this Agreement (the "Closing")
will take place on the date all conditions to Closing have been
satisfied or waived, at 10:00 a.m., at the offices of Sidley &
Austin, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, or at such other
time or at such other place as shall be agreed upon by the
parties. The date on which the Closing occurs is referred to
herein as the "Closing Date."
Section 1.6 Deliveries by Seller. At the Closing,
Seller shall deliver or cause to be delivered (unless previously
delivered) to Purchaser, the following:
(a) (i) stock certificates representing all of the
Shares, in genuine and unaltered form accompanied by stock powers
duly executed in blank or duly executed instruments of transfer
and (ii) any other documents that are necessary to transfer to
Purchaser good and valid title in and to the Shares, with any
necessary transfer tax stamps affixed or accompanied by evidence
satisfactory to Purchaser that all requisite stock transfer taxes
have been paid;
(b) Evidence of the exercise or cancellation of the
Options and the receipt by the Company in cash of the
consideration payable upon exercise of the Options with respect
to any Options that have been exercised;
(c) The Books and Records of the Company, including
without limitation the stock books, stock ledgers, minute books
and corporate seals of the Company (to be held at the principal
executive offices of the Company unless otherwise directed by
Purchaser);
(d) A counterpart or counterparts of the Escrow
Agreement, duly executed by the Company, the Seller's Agent and
each Seller;
(e) A counterpart of the Non-Competition Agreement
duly executed by Xxxx X. Xxxxxxxx;
(f) Counterparts of the employment agreements referred
to in Section 5.17 hereof, duly executed by each Seller who is a
party thereto;
(g) The General Releases duly executed by the Persons
designated by Purchaser pursuant to Section 5.20 hereof;
(h) Resignations of such of the directors and officers
of the Company as may be requested by Purchaser;
(i) The certificates regarding repayment of loans
referenced in Section 5.11 hereof;
(j) The Elections and the Section 338 Forms referenced
in Section 5.21, duly executed by the Company and each Seller;
(k) An opinion of Xxxxx & Xxxxx, counsel to the Seller
and the Company, in the form attached as Exhibit E hereto and
otherwise in form and substance satisfactory to the Purchaser;
(l) A certificate, dated the Closing Date and executed
by the Secretary or an Assistant Secretary of the Company,
substantially in the form and to the effect of Exhibit C hereto;
(m) (i) A copy of the articles of incorporation,
including all amendments thereto, of the Company certified by the
Secretary of State of the State of Michigan, (ii) certificates
from the Secretary of State of the State of Michigan to the
effect that the Company is in good standing or subsisting in such
jurisdiction, listing all charter documents of the Company on
file and attesting to its payment of all franchise or similar
Taxes, and (iii) a certificate from the Secretary of State or
other appropriate official in each jurisdiction in which the
Company is qualified or admitted to do business to the effect
that the Company is duly qualified or admitted and in good
standing in such jurisdiction;
(n) A certificate of the Seller, dated the Closing
Date, regarding the truth and correctness of the representations
and warranties and compliance with covenants referenced in
Section 6.1(d), duly executed by each Seller, substantially in
the form and to the effect of Exhibit D hereto;
(o) (i) A current ALTA Form B Title Insurance Policy
issued by one or more title companies satisfactory to Purchaser
dated the Closing Date and insuring the title of the Company to
the real property listed in Section 2.11 of the Disclosure
Schedule with extended coverage over the general exceptions
showing title to the property vested in the Company, subject only
to such exceptions as are set forth in the title insurance policy
commitment heretofore delivered to Purchaser, and in form, amount
and substance satisfactory to Purchaser, and Seller shall have
paid to such title companies, or reimbursed the Company for, all
expenses and premiums of such title companies in connection with
the issuance of such policies and (ii) Estoppel Certificates with
respect to the real property leases listed in Section 2.12 of the
Disclosure Schedule;
(p) The interim financial statements of the Company
required to be provided by Section 5.14 of this Agreement;
(q) (i) for Indebtedness, a payoff letter from the
lender as to the satisfaction in full of such Indebtedness, in
form and in substance satisfactory to Purchaser and confirming
that such Indebtedness may be prepaid in accordance with its
terms without any prepayment penalties or other consideration
except as set forth in such letter and in amounts consistent with
those set forth in Section 2.15 of the Disclosure Schedule;
(r) A letter from the broker or insurance company
confirming the cash surrender value at the date of transfer or
assignment of each insurance policy transferred pursuant to
Section 5.1(d) of this Agreement and evidence of the receipt by
the Company in cash of such cash surrender values;
(s) A counterpart or counterparts of a Stock Option
Agreement by each Seller who chooses to exchange Options in
accordance with Section 1.3(a), duly executed by such Seller; and
(t) Such other documents and certificates duly
executed as may be required to be delivered by Seller or the
Company pursuant to the terms of this Agreement (including,
without limitation, Section 6.1 below) or as may be reasonably
requested by Purchaser prior to the Closing Date.
Section 1.7 Deliveries by the Partnership. At the
Closing, the Partnership shall deliver or cause to be delivered
(unless previously delivered) to Purchaser, the following:
(a) (i) a Warranty Deed transferring to Purchaser good
and marketable title to all of the real property that is included
in the Partnership Assets, subject to Permitted Encumbrances;
(ii) a Xxxx of Sale and Assignment related to all other
Partnership Assets, including without limitation all personal
property that is included in the Partnership Assets; (iii) an
instrument duly executed by the Partnership and the Company
acknowledging termination of the Company Lease effective upon the
Closing; and (iv) any other documents that are necessary or
desirable to transfer to Purchaser good and valid title to the
Partnership Assets, each in form and substance satisfactory to
Purchaser and free and clear of all Encumbrances other than
Permitted Encumbrances;
(b) A current ALTA Form B Title Insurance Policy
issued by one or more title companies satisfactory to Purchaser,
dated the Closing Date and insuring the title of the Partnership
to the real property listed in Section 1 of the Partnership
Disclosure Schedule with extended coverage over the general
exceptions showing title to the property vested in the
Partnership, subject only to such exceptions as are set forth in
the title insurance policy commitment heretofore delivered to
Purchaser, and in form, amount and substance satisfactory to
Purchaser, and the Partnership shall have paid to such title
companies all expenses and premiums of such title companies in
connection with the issuance of such policies;
(c) A counterpart of the Installment Note duly
executed by the Partnership's Agent, the Partnership and the
Partners;
(d) A certificate executed by each partner in the
Partnership (i) attaching a true, complete and correct copy of
the Partnership Agreement that governs the Partnership as of the
date hereof and as of the Closing Date, (ii) certifying the
current partners in the Partnership, (iii) certifying the
authority of the Partnership and each partner in the Partnership
to enter into this Agreement and the Escrow Agreement and to
carry out the transactions contemplated in this Agreement, such
certificate substantially in the form and to the effect of
Exhibit I hereto;
(e) The certificate from the Partnership regarding the
truth and correctness of the representations and warranties and
compliance with covenants referenced in Section 6.1(d), duly
executed by each Partner (which may be included in Exhibit I);
(f) An opinion of Xxxxx & Xxxxx, counsel to the
Partnership, in the form attached hereto as Exhibit J and
otherwise in form and substance satisfactory to Purchaser;
(g) A payoff letter from Michigan National Bank as to
the satisfaction in full of the Partnership Mortgage, in form and
substance satisfactory to the Purchaser;
(h) The General Releases duly executed by the
Partnership and each partner therein pursuant to Section 5.20
hereof; and
(i) Such other documents and certificates duly
executed as may be required to be delivered by the Partnership
pursuant to the terms of this Agreement (including, without
limitation, Section 6.1 below) or as may be reasonably requested
by Purchaser prior to the Closing Date.
Section 1.8 Deliveries by Purchaser. At the Closing,
Purchaser shall deliver (unless previously delivered) to Seller
and the Partnership (or the Escrow Agent, as indicated), the
following:
(a) The Purchase Price as follows: (i) the Assets
Purchase Price (less the principal amount of the Installment
Note) by wire transfer of immediately available funds to such
account as the Partnership may reasonably direct by written
notice delivered to Purchaser by the Partnership at least two
business days prior to the Closing Date; (ii) the Shares Purchase
Price, less the Escrow Amount, by wire transfer of immediately
available funds to such account as Seller's Agent may reasonably
direct by written notice delivered to Purchaser by Seller's Agent
at least two business days prior to the Closing Date; and (iii)
the Escrow Amount by wire transfer of immediately available funds
to such account as the Escrow Agent may reasonably request by
written notice delivered to Purchaser by the Escrow Agent at
least two business days prior to the Closing Date;
(b) A counterpart of the Escrow Agreement, duly
executed by Purchaser;
(c) A counterpart of each of the employment agreements
referred to in Section 5.17, duly executed by the Company;
(d) A counterpart of the Non-Competition Agreement,
duly executed by the Company;
(e) An Installment Note, duly executed by Purchaser
together with the letter of credit provided for therein in form
reasonably acceptable to the Partnership;
(f) A counterpart or counterparts of a Stock Option
Agreement, duly executed by Big Flower, in connection with each
Seller who chooses to exchange Options in accordance with Section
1.3(a);
(g) Certificates from the Secretary of State or other
appropriate official of the State of Delaware, to the effect that
Purchaser is in good standing or subsisting in such jurisdiction,
listing all charter documents of Purchaser on file and attesting
to its payment of all franchise or similar Taxes;
(h) The certificate from Purchaser regarding the truth
and correctness of the representations and warranties and
performance of obligations referenced in Section 6.2(c), duly
executed by an authorized officer of Purchaser, such certificate
substantially in the form and to the effect of Exhibit G hereto;
(i) An opinion of Sidley & Austin, special counsel to
the Purchaser, as to the Installment Note being the legal, valid
and binding obligation of the Purchaser, enforceable against the
Purchaser in accordance with its terms, and such opinion
otherwise in form and substance satisfactory to the Partnership;
and
(j) Such other documents and certificates duly
executed as may be required to be delivered by Purchaser pursuant
to the terms of this Agreement or as may be reasonably requested
by Seller or the Partnership prior to the Closing Date.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Sellers hereby jointly and severally represent and
warrant to Purchaser as follows:
Section 2.1 Organization, Standing and Qualification.
The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Michigan and
has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being
conducted. Section 2.1 of the Disclosure Schedule lists all
lines of business in which the Company is participating or
engaged and each other line of business in which the Company has
participated or engaged during the past five years (the
"Business"). The Company has engaged in no other lines of
business in the past. The Company is duly qualified, licensed or
admitted and in good standing to do business in each jurisdiction
in which its property is owned, leased or operated or the nature
of the Business makes such qualification necessary, except for
those jurisdictions in which the adverse effects of all such
failures by the Company to be qualified, licensed or admitted and
in good standing can in the aggregate be eliminated without
material cost or expense by the Company becoming qualified,
licensed or admitted and in good standing. The name of each
director and officer of the Company on the date hereof, and the
position with the Company held by each, are set forth in Section
2.1 of the Disclosure Schedule. Seller has heretofore delivered
to Purchaser complete and correct copies of the certificate of
incorporation and bylaws, as currently in effect, of the Company.
The Company has no subsidiaries and owns no stock or equity
interest in any corporation, limited liability company,
partnership, limited liability partnership, joint venture or
other entity or Person.
Section 2.2 Authority Relative to this Agreement.
Each Seller has the capacity to execute, deliver and perform this
Agreement and to consummate the transactions contemplated herein,
including without limitation to own, hold, sell and transfer
(pursuant to this Agreement) the Shares set forth opposite such
Seller's name in Exhibit 1.1 to this Agreement (including the
Shares to be acquired prior to Closing through the exercise of
the Options). This Agreement has been duly and validly executed
and delivered by Seller and constitutes, and each agreement that
is to be executed and delivered by Seller in connection with the
transactions contemplated in this Agreement when executed and
delivered by Seller will constitute, a legal, valid and binding
obligation of Seller, enforceable against Seller in accordance
with its terms. Seller, as all of the stockholders of the
Company, has approved this Agreement and the transactions
contemplated herein, and no further stockholder action on the
part of Seller or corporate action on the part of the Company is
or will be required in connection with the transactions
contemplated herein.
Section 2.3 Capitalization. The authorized capital
stock of the Company consists of 50,000 shares of common stock,
no par value, of which (i) as of the date of this Agreement,
2,378 shares of common stock were issued and outstanding and (ii)
no shares were held in treasury by the Company. There are no
other shares of capital stock of the Company authorized, issued
or outstanding. As of the date of this Agreement, 60 shares of
Common Stock were reserved for issuance upon the exercise of the
Options and no shares of Common Stock were reserved for future
grants of options. Except as set forth above or in Section 2.3
of the Disclosure Schedule, the Company does not have (a) issued
or outstanding (i) shares of capital stock or issued share
capital of the Company, or (ii) securities convertible into or
exchangeable or exercisable for, or any options, warrants, calls,
puts, subscriptions or other rights (preemptive or otherwise) to
acquire, any shares of capital stock or issued share capital of
the Company, (b) agreements or contractual commitments, whether
written or oral (other than this Agreement) relating to the
Shares or obligating the Company or any Seller to issue or sell
any shares of its capital stock or any such securities, options,
warrants, calls, puts, subscriptions or other rights, (c)
pledges, security interests, liens, charges, Encumbrances,
equities, claims or options of whatever nature relating to any of
the Shares, or (d) rights or contractual commitments (whether
written or oral) that give any Person other than Seller any right
to reserve or exercise any benefits or rights similar to any
rights enjoyed by or accruing to the holder of shares of capital
stock of the Company, including without limitation any right to
participate in the equity or income of the Company or to
participate in or direct the election of any directors or
officers of the Company or the manner in which any shares of
capital stock of the Company are listed. The Shares are duly
authorized, validly issued, fully paid and non-assessable and are
not subject to any preemptive rights. Set forth on Section 2.3
of the Disclosure Schedule is a list of all record holders of the
Common Stock of the Company, with the number of shares of Common
Stock held of record by each Person, and a list of all holders of
outstanding Options, with the number of Options granted to each
Person, whether the Options listed are incentive stock options or
non-statutory options, the number of Shares of Common Stock that
will be issued upon exercise of the Options, the dates on which
such Options were granted and became vested and the related
exercise prices as of the date hereof. Each Seller beneficially
owns the Shares and Options set forth opposite his name in
Section 2.3 of the Disclosure Schedule free and clear of all
Encumbrances. At the Closing, the delivery in the manner
provided in Section 1.6 above of the certificates representing
the Shares will transfer to Purchaser good and valid title in and
to the Shares, free and clear of all Encumbrances.
Section 2.4 Consents and Approvals; No Violation.
Except as set forth in Section 2.4 of the Disclosure Schedule and
except for applicable requirements of the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, and the rules and
regulations thereunder (the "HSR Act"), there is no requirement
applicable to Seller or the Company to make any filing with, or
to obtain any permit, authorization, consent or approval of, any
court of competent jurisdiction, regulatory authority or other
public body, federal, state or local, domestic or foreign (a
"Governmental Entity") or any other Person in connection with the
execution, delivery, or performance of this Agreement or any
Operative Agreement or as a condition to the lawful consummation
by Seller or the Company of the transactions contemplated in this
Agreement or any Operative Agreement to which Seller or the
Company is a party. For purposes of this Agreement, the
"Operative Agreements" shall consist of the Escrow Agreement, the
Installment Note, the Stock Option Agreements, the Non-
Competition Agreement provided for in Section 5.16 hereof, the
employment agreements provided for in Section 5.17 hereof, the
General Releases provided for in Section 5.20 hereof, the
Warranty Deed provided for in Section 1.7 hereof, and any other
agreement entered into in connection with the foregoing or this
Agreement. Except as set forth in Section 2.4 of the Disclosure
Schedule and except for applicable requirements of the HSR Act,
neither the execution and delivery of this Agreement, or any
Operative Agreement to which Seller or the Company is a party, by
Seller or the Company, nor the consummation by Seller or the
Company of the transactions contemplated herein or therein, nor
compliance by Seller or the Company with any of the provisions
hereof or thereof will (i) conflict with or result in any breach
of any provision of the articles of incorporation or bylaws of
the Company, (ii) (A) conflict with or result in a violation or
breach of, (B) constitute (with or without the giving of notice
or passage of time or both) a default under, (C) require any
Seller or the Company to obtain any consent, approval or action
of, make any filing with or give any notice to any Person as a
result or under the terms of, (D) result in or give to any Person
any right of termination, cancellation, acceleration or
modification in or with respect to, (E) result in or give to any
Person any additional rights or entitlement to increased,
additional, accelerated or guaranteed payments under, or (F)
result in the creation or imposition of any Encumbrance upon
Seller, the Company or any of their respective assets and
properties, under or in respect of any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, other
evidence of Indebtedness, license, agreement (whether written or
oral), lease, commitment (whether written or oral), Contract or
other instrument or obligation to which Seller or the Company is
a party, or by which any of their respective businesses,
properties or assets may be bound; or (iii) conflict with or
violate any Law or Order of any Governmental Entity applicable to
Seller, the Company or their respective assets or properties.
Except as set forth and described in Section 2.4 or 2.15 of the
Disclosure Schedule, no consent is required to be obtained or
notice provided under any Contract listed on Schedule 2.15 of the
Disclosure Schedule. There is no Proceeding pending or, to the
Knowledge of Seller, threatened against the Company, Seller or
any of their respective assets and properties that seeks to
prevent the consummation of the transactions contemplated herein
or in any Operative Agreement.
Section 2.5 Books and Records. The minute books and
other similar records of the Company made available to Purchaser
prior to the execution of this Agreement contain a true, correct
and complete record of all action taken at all meetings and by
all written consents in lieu of meetings of the stockholders, the
board of directors and committees of the board of directors of
the Company. The stock transfer ledger and other similar records
of the Company made available to Purchaser prior to the execution
of this Agreement accurately reflect all record transfers prior
to the execution of this Agreement in the capital stock of the
Company. Except as set forth in Section 2.5 of the Disclosure
Schedule, no Books and Records of the Company have been recorded,
stored, maintained, operated or are otherwise wholly or partly
dependent upon or held by any means (including any electronic,
mechanical or photographic process, whether computerized or not)
which (including all means or access thereto and therefrom) are
not under the exclusive ownership and direct control of the
Company. "Books and Records" means all files, documents,
instruments, papers, books and records relating to the Business
or the condition of the Company which are owned, produced or
maintained by the Company, including without limitation financial
statements, Tax Returns and related work papers and letters from
accountants, budgets, pricing guidelines, ledgers, journals,
deeds, title policies, minute books, stock certificates and
books, corporate seals, stock transfer ledgers, Contracts,
licenses, customer lists, computer files and programs, retrieval
programs, operating data and plans and environmental studies and
plans.
Section 2.6 Financial Statements. Seller has
previously furnished to Purchaser true and complete copies of the
following financial statements: (a) audited balance sheets of the
Company as of December 31, 1994 and December 31, 1995 and the
related statements of income, retained earnings and cash flows of
the Company for the periods then ended, together with the notes
thereto and a true and correct copy of the report of Xxxxxx
Xxxxxxxx LLP thereon (the audited balance sheet of the Company
for the period ending December 31, 1995 is referred to herein as
the "Balance Sheet"), and all letters from such accountants with
respect to the result of such audits; and (b) the unaudited
balance sheet of the Company as of June 30, 1996 (the "Interim
Balance Sheet") and the related unaudited statements of income
and cash flow of the Company for the period then ended (such
financial statements described in clauses (a) and (b)
collectively, the "Financial Statements"). Each balance sheet
included in the Financial Statements is a true, complete and
correct copy thereof and presents fairly, in all material
respects, the financial position of the Company as of the
respective date of such balance sheet (including, without
limitation, accurate LIFO reserves in sufficient detail to
calculate inventory on a FIFO basis) and each of the statements
of income and retained earnings, and cash flows included in the
Financial Statements is a true, complete and correct copy and
includes, without limitation, accurate LIFO adjustments in
sufficient detail to calculate EBITDA on a FIFO basis and
presents fairly in all material respects the results of
operations and cash flows of the Company for the periods set
forth therein, in each case in accordance with GAAP, except for
the absence of footnote disclosures on the financial statements
referenced in clause (b) of this Section 2.6, and in each case
were compiled from the Books and Records of the Company regularly
maintained by management and used to prepare financial statements
of the Company in accordance with the principles stated therein.
Such Financial Statements for June 30, 1996 include comparative
amounts at June 30, 1995 and for the six-month period then ended.
The Company has maintained its Books and Records in a manner
sufficient to permit the preparation of financial statements in
accordance with GAAP. Such Books and Records fairly reflect, in
all material respects, the income, expenses, assets and
liabilities of the Company and provide a fair and accurate basis
for the preparation of the Financial Statements.
Section 2.7 Absence of Undisclosed Liabilities. The
Company does not have, and as a result of the transactions
contemplated herein will not have, any Indebtedness, liabilities
or obligations of any nature (whether known or unknown, absolute,
accrued, fixed, contingent, liquidated, unliquidated or
otherwise), except for the Indebtedness, liabilities and
obligations (i) reflected in the Interim Balance Sheet, (ii)
other than with respect to Indebtedness, liabilities and
obligations, incurred in the ordinary course of business
consistent with past practice since June 30, 1996, (iii)
pertaining to Taxes as defined in Section 2.20(d) (which shall be
subject solely to Section 2.20 hereof), or (iv) pursuant to any
Contract set forth in Section 2.15 of the Disclosure Schedule or
not required to be set forth therein due to dollar threshold or
other parameter and not required to be set forth on a balance
sheet in accordance with GAAP.
Section 2.8 Accounts Receivable. Except as set forth
in Section 2.8 of the Disclosure Schedule, the accounts and notes
receivable and all other receivables shown on the Balance Sheet
(subject to reserves for non-collectibility as reflected
therein), and all receivables acquired or generated by the
Company since December 31, 1995, are bona fide receivables and
represent amounts due with respect to actual, arm's length
transactions entered into in the ordinary course of business
consistent with past practice and are collectible at their
recorded amounts. Such reserves for non-collectibility have been
reflected on the Balance Sheet and Interim Balance Sheet in
accordance with GAAP and the Company's historical practice and
are adequate. Except as set forth in Section 2.8 of the
Disclosure Schedule, no such account has been assigned or pledged
to any other Person and no defense or set-off or similar right to
any such account has been asserted by the account obligor.
Except as set forth in Section 2.8 of the Disclosure Schedule, no
receivables or payables between the Company and any Seller or
its, his or their Affiliates, Associates or family members have
been, since the date of the Balance Sheet, or will be prior to
the Closing Date, acquired or generated by the Company.
Section 2.9 Inventory. The inventories on the Balance
Sheet and Interim Balance Sheet are stated at the lower of cost
(last in, first out) or market in accordance with GAAP.
Substantially all of the inventories used in or relating to the
conduct of the Business of the Company are usable or saleable in
the ordinary course of business consistent with past practice
(subject to reserves as reflected on the Balance Sheet and
Interim Balance Sheet) and, except as set forth in Section 2.9 of
the Disclosure Schedule, are owned by the Company free and clear
of any Encumbrance. Such reserves have been reflected on the
Balance Sheet and Interim Balance Sheet in accordance with GAAP
and the Company's historical practice and are adequate. For
purposes of this Agreement, "Encumbrance" means any mortgage,
pledge, lien, encumbrance, assessment charge or adverse claim
affecting title or resulting in an encumbrance against real or
personal property, or a security interest of any kind (including
any conditional sale or other title retention agreement), any
lease in the nature thereof, any option or other agreement to
sell and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent
statutes of any jurisdiction).
Section 2.10 Absence of Certain Changes or Events.
Except as expressly provided for in this Agreement or set forth
in Section 2.10 of the Disclosure Schedule, since December 31,
1995, the Company has not:
(a) Made any change in its Business or operations or
in the manner of conducting its Business;
(b) Suffered any Material Adverse Effect and no fact
or condition exists or, to the Knowledge of Seller, is
contemplated or threatened that might reasonably be expected to
cause a Material Adverse Effect in the future, nor has the
Company suffered any material casualty loss (whether or not
insured) or condemnation or other taking adversely affecting the
Business;
(c) Entered into any employment Contract or commitment
(whether oral or written) or compensation arrangement or employee
benefit plan, or changed or committed to change (including,
without limitation, any change pursuant to any bonus, pension,
profit-sharing or other plan, commitment, policy or arrangement)
the compensation payable or to become payable to any of its
officers, directors, employees, agents or consultants, or made
any pension, retirement, profit-sharing, bonus or other employee
welfare or benefit payment or contribution;
(d) Except dividends and distributions for the payment
of Taxes as set forth in Section 2.20 of the Disclosure Schedule,
declared, paid or made, or set aside for payment or making, any
dividend or other distribution in respect of its Common Stock or
other capital stock or securities, or directly or indirectly
redeemed, purchased or otherwise acquired any of its Common Stock
or other capital stock or securities or subdivided or in any way
reclassified or changed any of the terms or provisions of its
Common Stock or other capital stock or securities;
(e) Paid, loaned or advanced any amount to or in
respect of, or sold, transferred or leased any property or assets
(real, personal or mixed, tangible or intangible) to, or entered
into or amended any transaction, agreements or arrangements with
or for the benefit of the Partnership, any Seller, Xxxx X.
Xxxxxxxx or any of their respective Affiliates, Associates or
family members or any of the Company's officers or directors or
any Affiliate or Associate of its officers or directors, except
for the reimbursement of business expenses of a usual and
customary nature and not exceeding, in the aggregate, $10,000 and
except for transfers or assignments of life insurance policies
permitted to be made by Section 5.1(d) of this Agreement;
(f) Made or proposed any change in any accounting or
tax principles, practices or methods, including, without
limitation, its accounts payable or accounts receivable practices
and terms, except for such changes which are both required by
GAAP or Law and set forth in Section 2.10 of the Disclosure
Schedule;
(g) Incurred any liability (whether absolute, accrued,
contingent or otherwise and whether due or to become due), except
for current liabilities reflected on the Interim Balance Sheet
or, thereafter, incurred in the ordinary course of business
consistent with past practice;
(h) Canceled or waived rights with respect to any
debts owed to or claims held by the Company (including the
settlement of any claims or litigation or other Proceeding);
(i) Accelerated or delayed collection of notes or
accounts receivable generated by the Business in advance of or
beyond their regular due dates or the dates when the same
otherwise would have been collected;
(j) Allowed the levels of raw materials, supplies,
work-in-process or other materials included in the inventory of
the Company to vary in any material respect from the levels
customarily maintained;
(k) Terminated or amended or suffered the termination
or amendment of any Contract pursuant to which the Company would
receive from any Person or pay to any Person more than $50,000 in
any calendar year or disposed of or permitted to lapse any item
of Intellectual Property;
(l) Made any capital expenditures or commitments for
additions to property, plant or equipment constituting capital
assets except as reflected on the Interim Balance Sheet and,
thereafter, in accordance with the Budget;
(m) Incurred Indebtedness except as reflected on the
Interim Balance Sheet; or
(n) Agreed, whether in writing or otherwise, to take
any action described in this Section 2.10 or any action which, if
taken after the date of this Agreement without Purchaser's
consent, would constitute a breach under Section 5.1 hereof.
Section 2.11 Real Property. Section 2.11 of the
Disclosure Schedule contains a brief description of (i) each
parcel of real property owned by the Company (the "Owned Real
Property") showing the record title holder, legal description,
permanent index number, location, improvements, the uses being
made thereof and any Indebtedness secured by a mortgage or other
Encumbrance thereon and (ii) each option held by the Company to
acquire any real property. Complete and correct copies of any
title opinions, surveys and appraisals in the Company's
possession or any policies of title insurance currently in force
and in the possession of the Company with respect to each such
parcel have heretofore been delivered by the Company to
Purchaser.
Section 2.12 Leases.
(a) All leases of real or personal property as to
which the Company is the lessee or sublessee, and all amendments
and modifications thereof, are listed in Section 2.12(a) of the
Disclosure Schedule (true, correct and complete copies of which
have been made available to Purchaser). All such leases are in
full force and effect, are enforceable against the Company and
the other parties thereto (subject to the effect of bankruptcy,
insolvency, reorganization or other similar Laws and to general
principles of equity, whether considered in proceedings at law or
in equity) and have not been modified or amended, except as set
forth in Section 2.12(a) of the Disclosure Schedule. The Company
is a month-to-month tenant under that lease with Markham
Properties listed as item 5 in Section 2.12 of the Disclosure
Schedule and that lease with ORE-XXX Foods, Inc. listed as item 7
in Section 2.12 of the Disclosure Schedule. There exists no
default by the Company under any such leases or, to the Knowledge
of Seller, by any other party thereto, nor any event which, with
the giving of notice or the passage of time or both, would
constitute an event of default by the Company or any other party
thereunder.
(b) All leases of real or personal property leased or
subleased for the use or benefit of any Person other than Company
to which the Company is a party, and any and all amendments
thereto and modifications thereof, are listed on Section 2.12(b)
of the Disclosure Schedule (true, correct and complete copies of
which have been made available to Purchaser). All such leases
are in full force and effect and have not been modified or
amended, except as set forth in Section 2.12(b) of the Disclosure
Schedule. No such lease, nor any other agreement relating to
such property, contains any option or right (conditional or
otherwise) to extend the term thereof or to purchase all or any
part of the property or any rights therein. There exists no
default by the Company under such leases or, to the Knowledge of
Seller, by any third party thereto, nor any event which, with the
giving of notice or the passage of time or both, would constitute
an event of default by the Company or any other party thereunder.
Section 2.13 Title to Assets. The Company has good,
valid and marketable title to all its assets shown on the Balance
Sheet or acquired since the date of the Balance Sheet, other than
the assets shown on the Balance Sheet and disposed of either as
obsolete or as a sale of inventory since the date thereof, in
each case in the ordinary course of business and consistent with
past practice, and all such assets are free and clear of
Encumbrances other than those set forth on Section 2.13 of the
Disclosure Schedule and Permitted Encumbrances. "Permitted
Encumbrances" means (i) liens for current taxes or assessments
not yet due, (ii) pledges or deposits to secure payment of
workers' compensation obligations and deposits or indemnities to
secure public or statutory obligations or for similar purposes,
(iii) minor defects that in the aggregate do not materially
affect the title to the property or the value of such property to
the Company or Purchaser, (iv) easements and restrictions of
record set forth in the title insurance commitments heretofore
delivered to Purchaser, and (v) mechanics', workmen's,
repairmen's, warehousemen's, vendors' or carriers' liens or other
similar liens attaching by operation of law, incurred in the
ordinary course of business consistent with past practice and
securing payments not past due or deposits or pledges to obtain
the release of any such liens, provided that the amounts at issue
in subsections (iii) and (v) shall not, in the aggregate, exceed
$50,000.
Section 2.14 Intellectual Property; Business Know-How.
Section 2.14 of the Disclosure Schedule lists: (a) the federal
registration number and the date of registration concerning
registrations of patents, trademarks and service marks and of
other marks, trade names or other trade rights currently or
presently intended to be used by the Company in the conduct of
its Business, all of the copyrights and all applications for any
of the foregoing; and (b) all intellectual property rights owned
by any Person other than the Company which are not generally
commercially available on a "shrink-wrap" basis and are currently
or presently intended to be used by the Company in the conduct of
its Business, whether such use is or will be pursuant to license,
sublicense, agreement, other Contract, or permission, including
the expiration date of any such license, sublicense, agreement,
other Contract or permission. Seller has delivered to Purchaser
complete and accurate copies of each agreement, other Contract,
registration and other documents relating to the intellectual
property set forth on Section 2.14 of the Disclosure Schedule.
The Company owns or possesses adequate and enforceable licenses
or other rights to use (i) all intellectual property rights
listed or required to be listed on Section 2.14 of the Disclosure
Schedule, (ii) all computer software used by the Company in the
conduct of its Business and (iii) all other patents, trademarks,
service marks, other marks, trade names and assumed names, all
applications for any of the foregoing, all trade secrets,
designs, plans, specifications and other intellectual property
rights of every kind of the Company (whether or not registered)
that are possessed by the Company or used in its Business (all of
the items referred to in clauses (a) and (b) of the first
sentence and clauses (i), (ii) and (iii) of this sentence being
the "Intellectual Property"). Except as set forth in Section
2.14 of the Disclosure Schedule, no Person has a right to receive
a royalty or similar payment in respect of any item of
Intellectual Property pursuant to any Contract entered into by
the Company or Seller or otherwise. The Company's business know-
how includes, but is not limited to, all technologies, product
developments, lists and records pertaining to customers,
suppliers, distributors, personnel, agents and inventory, and all
the other books, ledgers, files, documents, correspondence,
specifications, computer programs, records and storage media and
business records, product registrations, marketing and sales
records, plans and data, promotional material, label and shipping
carton dyes, designs, artwork, photography, mechanical art and
graphic materials possessed by the Company or used in its
Business (collectively, the "Business Know-How"). Neither the
Company nor Seller has granted or committed to grant any license,
sublicense or other similar agreement or Contract relating in
whole or in part to any Intellectual Property or Business Know-
How. The Company's use of any item of Intellectual Property or
Business Know-How is not interfering with, infringing upon or
otherwise violating the rights of any Person in or to such
Intellectual Property or Business Know-How and has not interfered
with, infringed upon or otherwise violated the rights of any
Person in or to such Intellectual Property or Business Know-How,
notwithstanding any allegations asserted in the letters dated
March 22, 1994 and July 8, 1994 from Xxxxx X. Xxxxx on behalf of
XxXxxxxxx & Co. or described in Section 2.14 of the Disclosure
Schedule in response to the next sentence of this Section 2.14.
Since March 22, 1994, the Company has not produced any products
described in U.S. Patent No. 5,320,334 issued on June 14, 1994 to
Xxxxxx X. XxXxxxxxx. Except as set forth in Section 2.14 of the
Disclosure Schedule, no Proceedings have been instituted or, to
the Knowledge of Seller, threatened against Seller or the Company
alleging that the use or proposed use of any item of the
Intellectual Property or Business Know-How by the Company
infringes upon or otherwise violates any rights of a Person in or
to such Intellectual Property or Business Know-How. To the
Knowledge of Seller, no other Person is infringing,
misappropriating or making any unlawful use of the Intellectual
Property or Business Know-How that the Company has the exclusive
right to use.
Section 2.15 Contracts. Except as set forth in
Section 2.15 of the Disclosure Schedule, the Company is not a
party to, or bound by, any written or oral: (a) contract,
agreement, understanding, commitment, or other arrangement (each
a "Contract") with (i) any present or former director, officer,
employee, or Affiliate or Associate of the Company pursuant to
which payments may be required to be made at any time following
the date hereof to any such Person, (ii) any agent, consultant,
advisor, salesperson, or sales representative who is not an
Affiliate of the Company pursuant to which payments may be
required to be made at any time following the date hereof to any
such Person in excess of $50,000 during any consecutive twelve
month period, or (iii) the Partnership, any Seller or any of
their respective Affiliates, Associates or family members; (b)
Contract, including, but not limited to, any mortgage, indenture,
debenture, bond, note, installment obligation or other
instrument, constituting Indebtedness (and Section 2.15 of the
Disclosure Schedule shall include with respect to any such items,
the principal amounts and all prepayment or other penalties or
consideration which would be payable if such principal amounts
were prepaid and the Indebtedness terminated on the Closing Date
thereof as of October 1, 1996); (c) guaranty of any obligation
for borrowings or performances, or guaranty or warranty of
products or services; (d) Contract for the sale or lease of any
asset or property owned or used by the Company exceeding $10,000
in value or annual payments, other than the sale of inventory in
the ordinary course of business and consistent with past
practice; (e) Contract for the purchase of any real estate,
machinery, equipment or other capital assets with a purchase
price exceeding $10,000; (f) Contract pursuant to which the
Company is or may be obligated to make payments, contingent or
otherwise, on account of or arising out of prior acquisitions or
sales of businesses, assets, or stock of other companies; (g)
Contract which is not terminable on ninety or fewer days' notice
at any time without premium or penalty or payment of other
consideration in excess of $10,000; (h) employee collective
bargaining agreement or Contract with any labor organization;
(i) Contract to which the Company, any Seller, or any of the
Company's employees is a party which will restrict such Person's
ability to do business in any geographic area or grants to any
Person exclusive or similar rights in any line of business or in
any geographic area; (j) Contract pursuant to which the Company
has a right to receive from any Person or an obligation to pay to
any Person more than $50,000 during any consecutive twelve month
period; or (k) any other Contract of any nature not otherwise
described in this Section 2.15 which is material (without
reference to dollar amounts set forth herein) to the Business,
properties, assets, operations or prospects of the Company.
Except as set forth in Section 2.15 of the Disclosure Schedule,
with respect to each Contract listed in Section 2.15 of the
Disclosure Schedule, there is no default by the Company or event
that with the giving of notice or the passage of time, or both,
would constitute such a default nor, to the Knowledge of Seller,
any default, or event that with the giving of notice, the passage
of time or both, would constitute such a default, by any other
party thereto, existing with respect to any such Contract, except
for such defaults which, in the aggregate, result in loss or
liability to the Company of no more than $5,000. Neither the
Company nor Seller intend, and neither has received notice that
any party to any such Contract intends, to terminate, amend or
cancel any such Contract. Each of the Contracts listed in
Section 2.15 of the Disclosure Schedule is in full force and
effect and constitutes a legal, valid and binding obligation of
the Company and the other parties thereto enforceable in
accordance with its terms (subject to the effect of bankruptcy,
insolvency, reorganization or other similar Laws and to general
principles of equity, whether considered in proceedings at law or
in equity). Seller has made available to Purchaser complete and
accurate copies of each Contract or other written evidence of the
obligations, and all amendments thereto, listed in Section 2.15
of the Disclosure Schedule. Except as set forth and described in
Section 2.15 or 2.4 of the Disclosure Schedule, (i) no consent is
required to be obtained or notice provided under any Contract
listed in Section 2.15 of the Disclosure Schedule in order to
enter into this Agreement or to consummate the transactions
contemplated herein, and (ii) each Contract constituting
Indebtedness is redeemable at the option of the Company or may be
prepaid without penalty.
Section 2.16 Litigation. Except as set forth in
Section 2.16 of the Disclosure Schedule, there are (i) to the
Knowledge of Seller, no investigations pending or threatened,
(ii) no actions, causes of action, claims, suits, proceedings,
arbitrations, mediations or other alternative dispute resolution
procedures, orders, writs, injunctions or decrees, in each case,
whether at law or in equity, or before or by any Governmental
Entity or any other Person (each, a "Proceeding") pending or, to
the Knowledge of Seller, threatened against the Company or Seller
affecting or which could reasonably be expected to affect the
operations of the Company, its Business, assets, properties or
prospects, and (iii) to the Knowledge of Seller, there are no
existing or prior facts, circumstances or conditions that could
reasonably be expected to form the basis for a Proceeding against
the Company or Seller that would affect or which could reasonably
be expected to affect the operations of the Company, its
Business, assets, properties or prospects. The Company is not in
default with respect to any Order of any Governmental Entity.
Seller or the Company has made available to Purchaser accurate
and complete copies of all documentation related to each
Proceeding, including, without limitation, complaints, answers,
motions, responses, court orders, interrogatories and answers
thereto, discovery requests and responses, any other discovery
documentation, transcripts of all discovery and other
proceedings, and correspondence among counsel for the parties
and/or the relevant tribunal, arbitrator or mediator.
Section 2.17 Plants, Buildings, Structures, Facilities
and Equipment.
(a) All plants, buildings, structures and facilities
located on the Owned Real Property or the leased real property or
used by the Company in the conduct of its Business are
structurally sound with no defects, damages or repairs that would
require in excess of $50,000 in the aggregate to correct or
repair and are in good operating condition and repair (subject to
normal wear and tear) so as to permit the operation by the
Company of its Business as presently conducted;
(b) Except as set forth in Section 2.17 of the
Disclosure Schedule, all equipment owned or leased by the Company
or used in the conduct of the Business is in good operating
condition and repair (subject to normal wear and tear) so as to
permit its operation in the Business as presently conducted, with
no defects, damages or repairs that would require in excess of
$50,000 in the aggregate to correct or repair.
(c) No such plant, building, structure, facility or
equipment is in need of maintenance or repairs except for
ordinary, routine maintenance and repairs which are not
reasonably likely to exceed, in the aggregate, $50,000; no notice
from any Governmental Entity has been received by Seller or the
Company requiring or calling attention to the need for any work,
repair, construction, alteration or installation on, or in
connection with, any real property or any of the plants,
buildings, structures, facilities or equipment located thereon;
and, to the Knowledge of Seller, there are no existing or prior
facts, circumstances or conditions that could reasonably be
expected to form the basis for such a notice;
(d) All Owned Real Property and real property leased
by the Company and each plant, building, structure, facility or
equipment located thereon, is in compliance with any applicable
deed restrictions or covenants and all building, zoning,
subdivision, health, safety or other Laws, ordinances and
regulations, including without limitation the Americans with
Disabilities Act and the Occupational Safety and Health Act, and
neither the Company nor Seller has received notification that any
alleged violation exists and, to the Knowledge of Seller, there
are no existing or prior facts, circumstances or conditions that
could reasonably be expected to form the basis of such an
allegation;
(e) There is no pending or, to the Knowledge of
Seller, threatened condemnation of the Owned Real Property or any
leased real property or any part thereof or of any general or
special assessment relating thereto;
(f) All roads bounding each parcel of the Owned Real
Property and the leased real property are public roads and the
Company has full access to and the right of ingress and egress
over, to and from such roads and the right to use such roads
freely as well as all rights in such roads appurtenant to each
parcel of such property; and
(g) Each parcel of the Owned Real Property and the
leased real property has connection to sanitary sewer, storm
sewer, water, electricity, gas, telephone and all other necessary
utility services and, to the Knowledge of Seller there are no
existing or prior facts, circumstances or conditions which are
reasonably likely to result in termination of such connections
for any significant period of time.
Section 2.18 Insurance. Set forth in Section 2.18 of
the Disclosure Schedule is a complete and accurate list of all
primary, excess and umbrella policies, bonds and other forms of
insurance currently owned or held by or on behalf of and/or
providing insurance coverage to the Company, its Business,
properties and assets and its directors, officers, salespersons,
agents or employees, including the following information for each
such policy: type(s) of insurance coverage provided; name of
insurer; effective and expiration date; policy number; per
occurrence and annual aggregate deductibles or self-insured
retention; annual premium and any other fees for the procurement
of such insurance; per occurrence and annual aggregate limits of
liability and the extent, if any, to which the limits of
liability have been exhausted. Except as set forth in Section
2.18 of the Disclosure Schedule, all policies set forth in
Section 2.18 of the Disclosure Schedule are in full force and
effect and shall remain in full force and effect through the
Closing Date and thereafter shall remain in full force and effect
without assignment by the Company, consent of the insurer or
other action by the Company, Seller, Purchaser or the insurer,
until its expiration date or the date of cancellation or
termination by Purchaser or the Company. With respect to all
policies, all premiums currently payable or previously due have
been paid, and no notice of cancellation or termination has been
received by the Company or Seller with respect to any such
policy. All such policies are sufficient for compliance with all
requirements of Law and of all Contracts to which the Company is
a party or otherwise bound and are valid, outstanding,
collectible and enforceable policies and provide insurance
coverage which is adequate and customary for a business of the
Company's size and type. Complete and accurate copies of all
such policies and related documentation have previously been
provided to Purchaser.
Section 2.19 Employee Benefit Plans.
(a) Set forth in Section 2.19(a) of the Disclosure
Schedule is a true and complete list of each "employee pension
benefit plan" (as such term is defined in section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended, and
the regulations promulgated thereunder ("ERISA")) maintained by
the Company, the Partnership or an ERISA Affiliate, or with
respect to which the Company, the Partnership or an ERISA
Affiliate is or will be required to make any payment, or which
provides or will provide benefits to present or former employees
of the Company, the Partnership or an ERISA Affiliate due to such
employment (the "Pension Plans"). Set forth in Section 2.19(a)
of the Disclosure Schedule is a true and complete list of each
"employee welfare benefit plan" (as such term is defined in
section 3(1) of ERISA) maintained by the Company, the Partnership
or an ERISA Affiliate, or with respect to which the Company, the
Partnership or an ERISA Affiliate is or will be required to make
any payment, or which provides or will provide benefits to
present or former employees of the Company, the Partnership or an
ERISA Affiliate due to such employment (the "Welfare Plans," and
together with the Pension Plans, the "ERISA Benefit Plans").
With respect to each ERISA Benefit Plan, Section 2.19(a) of the
Disclosure Schedule identifies each Person whose employees or
prior employees are or will be provided benefits under such ERISA
Benefit Plan due to employment with such Person. Neither the
Company, the Partnership nor any ERISA Affiliate has ever, prior
to the Closing Date, maintained or been required to make any
payment at any time with respect to any "employee pension benefit
plan" (as such term is defined in section 3(2) of ERISA) ever
subject to section 302 of ERISA or any "multiemployer plan" (as
such term is defined in section 3(37) of ERISA).
(b) Other than those listed in Section 2.19(a) of the
Disclosure Schedule, set forth in Section 2.19(b) of the
Disclosure Schedule is a true and complete list of each of the
following to which the Company, the Partnership or an ERISA
Affiliate is a party or with respect to which it is or will be
required to make any payment (the "Non-ERISA Commitments," and
together with the ERISA Benefit Plans, the "Plans"):
(i) each pension, retirement, savings, profit
sharing, deferred compensation, severance or
termination pay, stock ownership, stock purchase, stock
option, performance, bonus, incentive, vacation or
holiday pay, supplemental unemployment, hospitalization
or other medical, disability, life or other insurance,
or other welfare, benefit or fringe benefit plan,
policy, trust, understanding or arrangement of any
kind, whether written or oral; and
(ii) each employee collective bargaining agreement
and each agreement, understanding or arrangement of any
kind, whether written or oral, with or for the benefit
of any present or prior officer, director, employee or
consultant (including, without limitation, each
employment, compensation, deferred compensation,
severance or consulting agreement or arrangement and
any agreement or arrangement associated with a change
in ownership of the Company, the Partnership or an
ERISA Affiliate).
Section 2.19(b) of the Disclosure Schedule contains a complete
and accurate description of all oral Non-ERISA Commitments. With
respect to each Non-ERISA Commitment, Section 2.19(b) of the
Disclosure Schedule identifies each Person whose employees or
prior employees are or will be provided benefits under such Non-
ERISA Commitments due to employment with such Person.
(c) Sellers have delivered to Purchaser with respect
to each Plan, true, correct and complete copies of (A) all plan
documents and amendments thereto, trust agreements and amendments
thereto and insurance and annuity contracts and policies, (B) the
current summary plan description, (C) the Annual Reports (IRS
Form 5500 series) and accompanying schedules, as filed, for the
most recently completed three plan years for which such reports
have been filed, (D) the financial statements for the most
recently completed three plan years for which such statements
have been prepared, (E) the actuarial reports for the most
recently begun three plan years for which such reports exist and
the report prepared in accordance with Statement of Financial
Accounting Standards No. 87, Employer's Accounting for Pensions,
for the most recently completed three plan years for which such
reports has been prepared, (F) the most recent determination
letter issued by the Internal Revenue Service and the application
submitted with respect to such letter, and (G) all correspondence
with the Internal Revenue Service and Department of Labor
concerning any audit, investigation or controversy. Each report
described in clause (E) of the preceding sentence accurately
describes the funded status of the Plan to which it relates and
subsequent to the date of such report there has been no adverse
change in the funding status or financial condition of such Plan.
(d) Each Pension Plan which is intended to qualify
under section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Code") is so qualified under the Code and has been
determined by the Internal Revenue Service to be so qualified and
no circumstance exists which might cause such plan to cease being
so qualified.
(e) With respect to each Plan, (i) there is no pending
or, to the Knowledge of Seller, threatened claim (other than any
routine claim for benefits), (ii) all contributions and premiums
due have been made on a timely basis and all contributions and
premiums paid by the Company are deductible by the Company, (iii)
the Company has no potential liability under ERISA or the Code,
and (iv) the Company has and shall have no liability with respect
to any benefits to be provided to any Person other than with
respect to periods of employment solely with the Company. Each
of the Plans (i) has been administered in accordance with its
terms and (ii) complies in all respects as to form, and has been
administered in accordance, with all Laws, including, where
applicable, the requirements of ERISA and the Code, so that no
failure to be so administered or to be in such compliance will
result in any liability to the Company. Except as set forth in
Section 2.19(e) of the Disclosure Schedule, there are no
reserves, assets, surplus or prepaid premiums with respect to any
Plan other than a Pension Plan. No "prohibited transaction"
described in section 406 of ERISA or section 4975 of the Code has
occurred with respect to any ERISA Benefit Plan. The Company and
each ERISA Affiliate has complied in all respects with the health
care requirements of Part 6 of Title I of ERISA so that no
failure to be in such compliance will result in any liability to
the Company. The Company has no obligation to provide medical,
health or death or other benefits to its prior employees or any
other person other than while an employee of the Company, except
as specifically required by Part 6 of Title I of ERISA or with
respect to retirement benefits under any Pension Plan. The
consummation of the transactions contemplated in this Agreement
will not (i) entitle any individual to severance pay, (ii)
accelerate the time of payment, vesting or increase the amount of
compensation due to any such individual or (iii) result in a
payment, or payments, constituting an "excess parachute payment"
(as defined in section 280G(b)(1) of the Code). No amounts
previously paid by the Company under any Plan will fail to be
deductible by the Company for federal income tax purposes. All
employees of the Company are employed at will.
(f) For purposes of this Agreement, "ERISA Affiliate"
means (i) any corporation which at any time on or before the
Closing Date is or was a member of the same controlled group of
corporations (within the meaning of section 414(b) of the Code)
as the Company; (ii) any partnership, trade or business (whether
or not incorporated) which at any time on or before the Closing
Date is or was under common control (within the meaning of
section 414(c) of the Code) with the Company or the Partnership;
and (iii) any entity which at any time on or before the Closing
Date is or was a member of the same affiliated service group
(within the meaning of section 414(m) of the Code) as either the
Company, the Partnership, any corporation described in clause (i)
or any partnership, trade or business described in clause (ii).
Section 2.19(f) of the Disclosure Schedule identifies all ERISA
Affiliates.
Section 2.20 Tax Matters.
(a) The Company has filed, or as of the Closing Date
will have filed, with the appropriate federal, state, local and
foreign taxing authorities all Tax Returns required to be filed
by or with respect to the Company whose due dates (taking into
account any timely filed extensions) fall on or before the
Closing Date, and such Tax Returns are or will be true, correct
and complete and disclose all Taxes required to be paid by the
Company. The Company has paid in full or has made adequate
provision for in the Interim Balance Sheet all Taxes which are or
will be due or claimed to be due from it by any authority for all
periods or portions thereof up to and including the Closing Date.
Section 2.20(a) of the Disclosure Schedule sets forth all of the
Tax reserves of the Company as of the end of the month
immediately preceding the date of this Agreement. There are no
liens for Taxes upon the assets of the Company except for
statutory liens for current Taxes not yet due.
(b) The Company is registered to do business in the
states and localities set forth in Section 2.20(b) of the
Disclosure Schedule, and the Company files Tax Returns in the
states and localities set forth in Section 2.20(b) of the
Disclosure Schedule. The Company has not requested any extension
of time within which to file any Tax Return, which Tax Return has
not since been filed, and the Company has not waived any statute
of limitations for, or agreed to any extension of time with
respect to, the assessment of Taxes of the Company.
(c) Neither the Company nor Seller has received any
notice of deficiency or assessment from any federal, state, local
or foreign taxing authority with respect to liabilities for Taxes
of the Company which has not been fully paid or finally settled
and, to the Knowledge of Seller, there are no existing or prior
facts, circumstances or conditions that could reasonably be
expected to form the basis for such a notice of deficiency or
assessment. No power of attorney has been executed by, or on
behalf of, the Company with respect to any matter relating to
Taxes which is currently in force. The Company is not a party to
any Contract that would result, separately or in the aggregate,
in the requirement to pay any "excess parachute payments" within
the meaning of Section 280G of the Code. Except as set forth in
Section 2.20(c) of the Disclosure Schedule, the Company is not a
party to a tax sharing or tax indemnity agreement or any other
agreement of a similar nature that remains in effect.
(d) For purposes of this Agreement, "Taxes" shall mean
all taxes, charges, fees, levies, penalties or other assessments
imposed by any United States federal, state, local or foreign
taxing authority, including, but not limited to, income, gross
receipts, excise, property, ad valorem, sales, use (or any
similar taxes), transfer, franchise, payroll, withholding, social
security, business license fees, or other taxes including any
interest, penalties or additions thereto. For purposes of this
Agreement, "Tax Return" shall mean any return, report,
information return, schedule or other document (including any
related or supporting information) required to be supplied to a
taxing authority or other Governmental Entity with respect to
Taxes.
(e) The Company has made a timely and valid election
under Section 1362 of the Code to be treated as an "S
corporation" for its taxable year beginning January 1, 1987 and
has at all times since January 1, 1987 qualified as an "S
corporation" for purposes of Subchapter S of the Code; with
respect to all states which for state tax purposes allow a
corporation to be treated as an "S corporation" or similar entity
entitled to special tax treatment, all elections for such
treatment have been timely, properly and validly made in such
states, and the Company has maintained compliance at all times
with all applicable qualifications and filing procedures for such
treatment, and the Company will not be subject to tax under
Section 1374 of the Code with respect to the transactions
contemplated in this Agreement. The Company, Purchaser and
Seller will be able to make valid Elections.
(f) Set forth in Section 2.20 of the Disclosure
Schedule is a description of all amounts and methods of payment
of dividends and distributions paid to each Seller by the Company
to enable each Seller to make payments of Taxes due with respect
to the income of the Company for periods after December 31, 1995,
with supporting detail establishing that the amounts so
distributed were appropriate in relation to the Taxes reasonably
estimated to be due.
Section 2.21 Environmental Matters. Except as set
forth in Section 2.21 of the Disclosure Schedule:
(a) The operations of the Company comply with all
applicable Environmental Laws;
(b) The Company has obtained all environmental,
health and safety Governmental Permits necessary for the
operation of its Business, and all such Governmental Permits are
in full force and effect and the Company is in compliance with
all terms and conditions of such Governmental Permits;
(c) None of the Company, nor any of the present
Company Property or operations, or the past Company Property or
operations, is or was within the last five years subject to any
on-going investigation by, Order from or Contract with any
Governmental Entity or other Person (including without limitation
any prior owner or operator of Company Property) respecting (i)
any Environmental Law, (ii) any Remedial Action or (iii) any
claim of Loss arising from the Release or threatened Release of a
Contaminant into the Environment; and to the Knowledge of Seller,
there are no existing or prior facts, circumstances or conditions
that could reasonably be expected to form the basis of any such
investigation, Order or Contract;
(d) The Company is not subject to any judicial,
administrative or other Proceeding, Order, judgment, decree or
settlement alleging or addressing a violation of or liability or
Indebtedness under any Environmental Law;
(e) The Company has not:
(i) reported a Release of a hazardous substance
pursuant to Section 103(a) of CERCLA, or any state
equivalent Law;
(ii) filed a notice pursuant to Section 103(c) of
CERCLA;
(iii) filed notice pursuant to Section 3010 of
RCRA, indicating the generation of any hazardous waste,
as that term is defined under 40 CFR Part 261 or any
state equivalent Law;
(iv) filed any notice under any applicable
Environmental Law reporting a violation of any
applicable Environmental Law; or
(v) previously conducted operations at any real
property other than the Owned Real Property and any
leased property currently occupied by the Company;
(f) there is not now, nor has there ever been, on or
in any Company Property:
(i) any treatment, recycling, storage or disposal
of any hazardous waste, as that term is defined under
40 CFR Part 261 or any state equivalent Law, that
requires or required a Governmental Permit pursuant to
Section 3005 of RCRA; or
(ii) any underground storage tank or surface
impoundment or landfill or waste pile;
(g) There is not now on or in any Company Property any
polychlorinated biphenyls ("PCB") used in pigments, hydraulic
oils, electrical transformers or other equipment;
(h) The Company has not received any notice or claim
to the effect that it is or may be liable to any Governmental
Entity or any other Person as a result of the Release or
threatened Release of a Contaminant into the Environment, and to
the Knowledge of Seller, there are no existing or prior facts,
circumstances or conditions that could reasonably be expected to
form the basis for such a notice or claim; and the Company has
not sent or arranged for the disposal of any Contaminant
generated by the Company or its operations to any disposal site
that (i) is undergoing Remedial Action, or for which, to the
Knowledge of Seller, facts and circumstances exist that could
reasonably be expected to require or cause the disposal site to
undergo Remedial Action; (ii) is listed or proposed for listing
on the National Priorities List pursuant to CERCLA; or (iii)
could give rise to any Loss on the part of the Company;
(i) No Environmental Encumbrance has attached to any
Company Property or assets;
(j) Any asbestos-containing material which is on or
part of any Company Property is in good repair according to the
current standards and practices governing such material, and its
presence or condition does not violate any Environmental Law;
(k) None of the products the Company manufactures,
distributes or sells now, or manufactured, distributed or sold in
the past, contains asbestos or asbestos-containing material;
(l) There have been no environmental investigations,
studies, audits, tests, reviews or other analyses conducted by or
for, or that are in the possession of, the Company or any Seller
in relation to any site or facility now or previously owned,
operated or leased by the Company which have not been delivered
to Purchaser prior to the execution of this Agreement;
(m) To the Knowledge of Seller, there is no facility,
site or real property located within five (5) miles of any Owned
Real Property or leased real property of the Company (other than
property leased solely as office space identified as office lease
5, 6 and 13 in Section 2.12 of the Disclosure Schedule) that is
listed on or proposed for listing on the National Priorities List
pursuant to CERCLA; and
(n) For purposes of this Agreement:
(i) "CERCLA" shall mean the Comprehensive
Environmental Response, Compensation and Liability Act,
42 U.S.C. SECTIONS 9601 et seq., any amendments thereto,
any successor statutes, and any regulations or guidance
promulgated thereunder.
(ii) "Company Property" shall mean any real or
personal property, plant, building, facility,
structure, underground storage tank, equipment or unit,
or other asset owned, leased or operated by the Company
(including any surface water thereon or adjacent
thereto, and soil or groundwater thereunder).
(iii) "Contaminant" means any pollutant,
contaminant, chemical, or industrial, hazardous or
toxic material or waste for which liability or
standards of conduct are imposed under Environmental
Laws, and includes, without limitation, asbestos or
asbestos-containing materials, PCBs, and petroleum, oil
or petroleum or oil products or derivatives.
(iv) "Environment" means any surface water, ground
water, drinking water supply, land surface or
subsurface strata, ambient air and includes, without
limitation, any indoor location.
(v) "Environmental Encumbrance" shall mean an
Encumbrance in favor of any Governmental Entity for any
(1) liabilities or other Indebtedness under any
Environmental Law or (2) Losses incurred by such
Governmental Entity in response to a Release or
threatened Release of a Contaminant into the
Environment.
(vi) "Environmental Laws" means all federal state,
local and foreign laws, codes, regulations,
requirements, directives, orders, common law, and
administrative or judicial interpretations thereof that
may be enforced by any Governmental Entity, other
Person or court, relating to pollution, the protection
of human health, the protection of the Environment, or
the emission, discharge, disposal, transportation,
Release or threatened Release of Materials in or into
the Environment, including without limitation the
Occupational Safety and Health Act.
(vii) "RCRA" shall mean the Resource
Conservation and Recovery Act, 42 U.S.C. SECTIONS 6901 et
seq., and any successor statute, and any regulations or
guidance promulgated thereunder.
(viii) "Release" shall mean release, spill,
emission, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, leaching or migration
into the Environment or into or out of any Company
Property or other property, including the movement of
Contaminants through or in the air, soil, surface
water, groundwater or Company Property or other
property.
(ix) "Remedial Action" shall mean actions required
to (1) clean up, remove, treat or in any other way
address Contaminants in the Environment; (2) prevent
the Release or threat of Release or minimize the
further Release of Contaminants; or (3) perform pre-
remedial studies and investigations and post remedial
care.
Section 2.22 Labor Relations and Employment
(a) (i) Except as set forth in Section 2.22 of the
Disclosure Schedule, there is no labor strike, dispute, slowdown,
stoppage or lockout pending, affecting, or, to the Knowledge of
Seller, threatened against the Company, and during the past five
years there has not been any such action and, to the Knowledge of
Seller, there are no existing or prior facts, circumstances or
conditions that could reasonably be expected to lead to such an
action; (ii) there are no union claims to represent the
employees of the Company nor have there been any such claims
within the last five years; (iii) there is no Contract with any
labor organization, nor work rules or practices agreed to with
any labor organization or employee association, applicable to
employees of the Company nor is the Company a party to or bound
by any collective bargaining or similar agreement; (iv) to the
Knowledge of Seller, (A) there is, and within the last five years
has been, no representation of the employees of the Company by
any labor organization, (B) there are no union organizing
activities among the employees of the Company, and (C) no
question concerning representation exist concerning such
employees; (v) Section 2.22(a) of the Disclosure Schedule sets
forth all personnel policies, rules or procedures (whether
written or oral) applicable to employees of the Company, and the
Company has delivered to Purchaser complete and accurate copies
of all such written policies, rules or procedures plus summaries
of all oral policies, rules or procedures; (vi) the Company has
not engaged in any unfair labor practices as defined in the
National Labor Relations Act or other applicable law, ordinance
or regulation and the Company is, and has for the past three
years been, in compliance in all material respects with all
applicable Laws respecting employment and employment practices,
terms and conditions of employment, wages, hours of work and
occupational safety and health; (vii) there is no unfair labor
practice charge or complaint against the Company (or Seller with
respect to the Company) pending or, to the Knowledge of Seller,
threatened before the National Labor Relations Board or any
similar state or foreign agency and to the Knowledge of Seller
there are no existing or prior facts, circumstances or conditions
that could reasonably be expected to form the basis therefor;
(viii) there is no grievance pending or, to the Knowledge of
Seller, threatened against the Company arising out of any
collective bargaining agreement or other grievance procedure and,
to the Knowledge of Seller, there are no existing or prior facts,
circumstances or conditions that could reasonably be expected to
form the basis therefor; (ix) there are no charges with respect
to or relating to the Company pending or, to the Knowledge of
Seller, threatened before the Equal Employment Opportunity
Commission or any other Governmental Entity responsible for the
prevention of unlawful employment practices and, to the Knowledge
of Seller, there are no existing or prior facts, circumstances or
conditions that could reasonably be expected to form the basis
therefor; (x) neither the Company nor Seller has received notice
of the intent of any Governmental Entity responsible for the
enforcement of labor or employment laws to conduct an
investigation with respect to or relating to the Company and, to
the Knowledge of Seller, no such investigation is in progress;
and (xi) no complaints, lawsuits or other proceedings are
pending or, to the Knowledge of Seller, threatened in any forum
by or on behalf of any present or former employee of the Company,
any applicant for employment or classes of the foregoing alleging
breach of any express or implied Contract for employment, any Law
governing employment or the termination thereof or other
discriminatory, wrongful or tortious conduct in connection with
any employment relationship.
(b) Since the enactment of the Worker Adjustment and
Retraining Notification Act of 1988 (the "WARN Act"), the Company
has not effectuated or experienced (i) a "plant closing" (as
defined in the WARN Act) affecting any site of employment or one
or more facilities or operating units within any site of
employment or facility used by the Company; or (ii) a "mass
layoff" (as defined in the WARN Act) affecting any site of
employment or facility used by the Company, nor has the Company
been affected by any transaction or engaged in layoffs or
employment terminations sufficient in number to trigger
application of any similar state or local law. None of the
Company's employees has suffered an "employment loss" (as defined
in the WARN Act) at any time prior to the Closing Date.
Section 2.23 Compliance with Applicable Law. The
Company has for the past five years complied in all material
respects and is presently complying in all material respects with
all applicable laws (whether statutory or otherwise), rules,
regulations, orders, ordinances, judgments, decrees or other
pronouncements having the effect of any of the foregoing, of all
Governmental Entities having jurisdiction (collectively, "Laws"),
including, but not limited to, the Federal Occupational Safety
and Health Act and all Laws relating to the safe conduct of
business and environmental protection and conservation, the Civil
Rights Act of 1964 and Executive Order 11246 concerning equal
employment opportunity obligations of federal contractors and any
applicable health, sanitation, fire, safety, labor, zoning and
building laws and ordinances. Neither the Company nor Seller has
received written notification of any asserted present or past
failure by the Company to so comply with the Laws and, to the
Knowledge of Seller, there are no existing or prior facts,
circumstances or conditions that could reasonably be expected to
form the basis for such notification or assertion. The
representations of this Section 2.23 are intended to be in
addition to and not as a qualification of Section 2.21 or any
other Section in this Article II.
Section 2.24 Brokers or Finders. Each of the Company
and Purchaser does not have nor will have any obligation to pay
any broker's, finder's, investment banker's, intermediary's,
financial advisor's or similar fee in connection with this
Agreement, or the transactions contemplated herein (other than
any bank financing fees Purchaser may incur), by reason of any
action taken by or on behalf of Seller or the Company or any of
their respective Affiliates. The Sellers shall be responsible
for the payment of all fees and expenses owing to Compass Capital
Advisors, Inc. ("Compass") pursuant to any agreement between the
Company and Compass.
Section 2.25 Disclosure. The representations and
warranties by Seller in this Agreement and the statements
contained in the Disclosure Schedule or any other schedules,
certificates, documents, exhibits and agreements referred to
herein or otherwise furnished or to be furnished by Seller to
Purchaser pursuant to this Agreement, the Operative Agreements to
which any Seller is a party, and the transactions contemplated
herein and therein (collectively, the "Seller's Documents") do
not and will not contain any untrue statement of a material fact
and do not and will not omit to state any material fact necessary
to make the statements herein or therein not misleading.
Section 2.26 Customers and Suppliers. Section 2.26 of
the Disclosure Schedule sets forth a true and complete list of
the names and addresses of the ten largest suppliers (and for
each such supplier the approximate dollar volume and percentage
of total purchases of similar items from all suppliers of such
item) of products and services to the Company and the ten largest
customers (and for each such customer the approximate dollar
volume and percentage of total sales of the Company to all
customers) of products and services of the Company during the
twelve months ended December 31, 1995, indicating any existing
contractual arrangements for continued supply from or to each
such firm. Except as set forth in Section 2.26 of the Disclosure
Schedule, there exists no actual or, to the Knowledge of Seller,
threatened termination, cancellation or limitation of, or any
modification or change in, the business relationship of the
Company or any Seller on behalf of the Company with any customer
or group of customers which are listed in Section 2.26 of the
Disclosure Schedule or which are otherwise material to the
operations of the Business, or with any supplier or group of
suppliers which are listed in Section 2.26 of the Disclosure
Schedule or which are otherwise material to the operations of the
Business, and, to the Knowledge of Seller, there exists no
present or future condition or state of facts or circumstances
involving customers, suppliers or sales representatives
(including the consummation of the transactions contemplated in
this Agreement), other than those which affect the economy in
general or the industry that the Business is part of, which
could reasonably be expected to (i) materially adversely affect
the Business or the prospects of the Company or prevent the
conduct of the Business after the consummation of the
transactions contemplated in this Agreement on substantially the
same terms as the Business has heretofore been conducted or
(ii) impair, interfere with or terminate the Company's business
relationship with the customers listed in Section 2.26 of the
Disclosure Schedule. Seller has delivered to Purchaser copies of
all written Contracts or other arrangements and written
summaries of any oral arrangements with the customers and
suppliers listed in Section 2.26 of the Disclosure Schedule.
Section 2.27 Transactions with Affiliates.
(a) Except as set forth in Section 2.27(a) of the
Disclosure Schedule, the Company has no outstanding Indebtedness,
liabilities or obligations for amounts owing to, or notes or
accounts receivable from, or leases, Contracts or other
commitments or arrangements with or for the benefit of, the
Partnership, any Seller, or their respective Affiliates,
Associates or family members, or the Company's directors,
officers or employees or Affiliates of any of the foregoing.
(b) Since December 31, 1995, except as set forth in
Sections 2.27(b) and 2.20 of the Disclosure Schedule, the Company
has not made any payments, loans or advances of any kind to the
Partnership, any Seller or their respective Affiliates,
Associates or family members or paid any dividends or
distributions of any kind to or for the benefit of any Seller or
their respective Affiliates, Associates or family members.
Section 2.27(b) of the Disclosure Schedule sets forth all amounts
which the Company has expensed during the twelve months ended
December 31, 1995 and the six months ended June 30, 1996 for
payments to the Partnership for use of or otherwise relating to
each of the Partnership Assets.
Section 2.28 Government Permits. The Company owns,
holds or possesses all licenses, franchises, permits, privileges,
immunities, approvals and other authorizations from all
Governmental Entities which are necessary to entitle it to own or
lease, operate and use its assets and to carry on and conduct the
Business substantially as currently conducted (herein
collectively called "Governmental Permits"), except for such
Governmental Permits as to which the failure to so own, hold or
possess would not have a Material Adverse Effect. Section 2.28 of
the Disclosure Schedule sets forth a list and brief description
of each Governmental Permit. Complete and correct copies of all
of the Governmental Permits have heretofore been delivered to
Purchaser. Except as set forth in Section 2.28 of the Disclosure
Schedule, (i) the Company has fulfilled and performed its
obligations under each of the Governmental Permits, and no event
has occurred or condition or state of facts exists which
constitutes or, after the giving of notice or the passage of time
or both, would constitute a breach or default under any such
Governmental Permit or which permits or, after the giving of
notice or the passage of time or both, would permit revocation,
termination or modification of any such Governmental Permit, or
which might adversely affect the rights of the Company under any
such Governmental Permit; (ii) no notice of cancellation, of
default or of any dispute concerning any Governmental Permit, or
of any event, condition or state of facts described in the
preceding clause, has been received by, or is Known to Seller;
and (iii) each of the Governmental Permits is valid, subsisting
and in full force and effect and may be assigned and transferred
to Purchaser, if required in accordance with this Agreement, and
will continue in full force and effect thereafter on behalf of
the Company or the Purchaser, as the case may be, in each case
without (x) the occurrence of any breach, default or forfeiture
of rights thereunder, (y) the consent, approval, or act of, or
the making of any filing with, any Governmental Entity, or (z)
the payment of any additional fees by the Company or Purchaser,
or the posting of any bonds or surety or other incurrence of cost
by the Company or Purchaser.
Section 2.29 Guarantees.
(a) None of the Company's Indebtedness, liabilities or
obligations are guaranteed by any Seller, the Partnership, their
respective Affiliates, or Associates or family members (the
"Guarantees").
(b) The Company is not a guarantor or co-obligor of
any Indebtedness, liability or obligation of any Seller, the
Partnership or their respective Affiliates, Associates or family
members.
Section 2.30 Common Activities. In the conduct of
its Business, neither the Company nor any Seller on behalf of
the Company has commingled its assets with those of any Affiliate
or Associate of the Company or of any Seller, engaged in any
joint activities with regard to purchase or sale of products or
services, failed to maintain appropriate distinction between the
Business and assets and property of the Company and those of any
other Person or engaged in any other acts or omitted to take any
other action which could reasonably be expected to form the basis
for any claim or assertion that the Company or its property or
assets were responsible or liable for any Indebtedness, liability
or obligation of any other Person.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP
The Partnership and the Partners, in their capacity as
partners in the Partnership, hereby jointly and severally
represent and warrant to Purchaser as follows:
Section 3.1 Organization. The Partnership is a
general partnership duly organized and operating in accordance
with the Amended and Restated Park Properties Partnership
Agreement dated August 31, 1993, as amended by an Amendment dated
April 1, 1995, among the Partners (the "Partnership Agreement")
and has all requisite partnership and other power and authority
to own, operate and lease the Partnership Assets.
The Partnership has heretofore delivered to Purchaser a
complete and correct copy of the Partnership Agreement. Section
3.1 of the disclosure schedule provided to Purchaser by the
Partnership (the "Partnership Disclosure Schedule") lists all
lines of Business in which the Partnership is participating or
engaged and in which it has participated or engaged in the past.
Section 3.2 Authority Relative to this Agreement. The
Partnership has the capacity to execute, deliver and perform this
Agreement and to consummate the transactions contemplated hereby,
including without limitation to own, hold, sell and transfer
(pursuant to this Agreement) the Partnership Assets. This
Agreement has been duly and validly executed and delivered by the
Partnership and each Partner and constitutes, and each agreement
that is to be executed and delivered by the Partnership and each
Partner in connection with the transactions contemplated in this
Agreement when executed and delivered by the Partnership or such
Partner, as the case may be, will constitute, a legal, valid and
binding obligation of the Partnership and such Partner, as the
case may be, enforceable against the Partnership and such
Partner, as the case may be, in accordance with its terms. Each
Partner has approved this Agreement and the transactions
contemplated herein, and no further action on the part of the
Partners or the Partnership is or will be required, whether
pursuant to the Partnership Agreement, applicable Law or
otherwise, in connection with the transactions contemplated
herein.
Section 3.3 Partnership Interests. The Partners and
the interest of each Partner in the Partnership are set forth in
Section 3.3 of the Partnership Disclosure Schedule. No other
persons, corporations, limited liability companies, limited
liability partnerships, partnerships, joint ventures, Associates
or other entities (a "Person") has any ownership or similar
interest in the Partnership or the Partnership Assets.
Section 3.4 Consent and Approvals; No Violation.
Except as set forth in Section 3.4 of the Partnership Disclosure
Schedule and except for applicable requirements of the HSR Act,
there is no requirement applicable to the Partnership or any
Partner to make any filing with, or to obtain any permit,
authorization, consent or approval of any Governmental Entity or
any other Person in connection with the execution, delivery, or
performance of this Agreement, or any Operative Agreement to
which the Partnership or any Partner therein is a party, or as a
condition to the lawful consummation by the Partnership of the
transactions contemplated in this Agreement or any Operative
Agreement to which the Partnership or any Partner is a party.
Except as set forth in Section 3.4 of the Partnership Disclosure
Schedule, neither the execution and delivery of this Agreement,
or any Operative Agreement to which the Partnership or any
Partner is a party, by the Partnership or such Partner, as the
case may be, nor the consummation by the Partnership or any
Partner of the transactions contemplated herein or therein, nor
compliance by the Partnership or any Partner with any of the
provisions hereof or thereof will (i) conflict with the
Partnership Agreement; (ii) (A) conflict with or result in a
violation or breach of, (B) constitute (with or without the
giving of notice or the passage of time or both) a default under,
(C) require any Partner or the Partnership to obtain any consent,
approval or action of, make any filing with or give any notice to
any Person as a result or under the terms of, (D) result in or
give to any Person any right of termination, cancellation,
acceleration or modification in or with respect to, (E) result in
or give to any Person any additional rights or entitlement to
increased, additional, accelerated or guaranteed payments under,
or (F) result in the creation or imposition of any Encumbrance
upon the Partnership, any Partner or any of their respective
assets and properties, under or in respect of any of the terms,
conditions or provisions of any note, bond, mortgage, indenture,
other evidence of Indebtedness, license, agreement (whether
written or oral), lease, commitment (whether written or oral),
Contract or other instrument or obligation to which the
Partnership or any Partner is a party or the Partnership Assets
are bound, or (iii) conflict with or violate any Law or Order of
any Governmental Entity applicable to the Partnership or any
Partner or the Partnership Assets. Except as set forth in
Section 3.4 or 3.12 of the Partnership Disclosure Schedule, no
consent is required to be obtained or notice provided under any
Contract to which the Partnership or any Partner is a party or by
which the Partnership Assets are bound which has not been
obtained. Any such Contract by which the Partnership Assets is
bound shall be terminated at or prior to the Closing Date. There
is no Proceeding pending or, to the Knowledge of the Partnership,
threatened against the Partnership or any of the Partnership
Assets and properties that seeks to prevent the consummation of
the transactions contemplated herein.
Section 3.5 Title to Partnership Assets. Section 1 of
the Partnership Disclosure Schedule sets forth the Partnership
Assets being sold by the Partnership to Purchaser. The
Partnership has good, valid and marketable title to the
Partnership Assets, free and clear of any and all Encumbrances
other than those set forth on Section 3.5 of the Partnership
Disclosure Schedule and Permitted Encumbrances.
Section 3.6 Environmental Matters. Except as set
forth in Section 3.6 of the Partnership Disclosure Schedule:
(a) The operations of the Partnership comply with all
applicable Environmental Laws;
(b) The Partnership has obtained all environmental,
health and safety Governmental Permits necessary for the
operation of its business, and all such Governmental Permits are
in full force and effect and the Partnership is in compliance
with all terms and conditions of such Governmental Permits;
(c) None of the Partnership, the Partners in their
capacities as such, the Partnership Assets, nor any of the
present Partnership property or operations, or the past
Partnership property or operations, is or was within the last
five years subject to any on-going investigation by, Order from
or Contract with any Governmental Entity or other Person
(including without limitation any prior owner or operator of the
Partnership Assets or other Partnership property) respecting (i)
any Environmental Law, (ii) any Remedial Action or (iii) any
claim of Loss arising from the Release or threatened Release of a
Contaminant into the Environment; and, to the Knowledge of the
Partnership, there are no existing or prior facts, circumstances
or conditions that could reasonably be expected to form the basis
of any such investigation, Order or Contract;
(d) Neither the Partnership nor any Partner in his
capacity as such is subject to any judicial, administrative or
other Proceeding, Order, judgment, decree or settlement alleging
or addressing a violation of or liability or Indebtedness under
any Environmental Law;
(e) Neither the Partnership nor any Partner in his
capacity as such has:
(i) reported a Release of a hazardous substance
pursuant to Section 103(a) of CERCLA, or any state
equivalent Law;
(ii) filed a notice pursuant to Section 103(c) of
CERCLA;
(iii) filed notice pursuant to Section 3010 of
RCRA, indicating the generation of any hazardous waste,
as that term is defined under 40 CFR Part 261 or any
state equivalent Law;
(iv) filed any notice under any applicable
Environmental Law reporting a violation of any
applicable Environmental Law; or
(v) previously conducted operations at any real
property other than the property currently owned by the
Partnership;
(f) There is not now, nor has there ever been, on or
in the Partnership Assets or any other current or former
Partnership property:
(i) any treatment, recycling, storage or disposal
of any hazardous waste, as that term is defined under
40 CFR Part 261 or any state equivalent Law, that
requires or required a Governmental Permit pursuant to
Section 3005 of RCRA; or
(ii) any underground storage tank or surface
impoundment or landfill or waste pile;
(g) There is not now on or in any Partnership Assets
or any other Partnership property any PCBs used in pigments,
hydraulic oils, electrical transformers or other equipment;
(h) Neither the Partnership nor any Partner in his
capacity as such has received any notice or claim to the effect
that it is or may be liable to any Person as a result of the
Release or threatened Release of a Contaminant into the
Environment, and to the Knowledge of the Partnership, there are
no existing or prior facts, circumstances or conditions that
could reasonably be expected to form the basis for such a notice
or claim; and neither the Partnership nor any Partner in his
capacity as such has sent or arranged for the disposal of any
Contaminant generated by the Partnership or its operations to any
disposal site that (i) is undergoing Remedial Action, or for
which, to the Knowledge of the Partnership, facts and
circumstances exist that could reasonably be expected to require
or cause the disposal site to undergo Remedial Action; (ii) is
listed or proposed for listing on the National Priorities List
pursuant to CERCLA; or (iii) could give rise to any Loss on the
part of the Partnership or Purchaser as the owner of the
Partnership Assets.
(i) No Environmental Encumbrance has attached to any
of the Partnership Assets;
(j) Any asbestos-containing material which is on or
part of any Partnership Assets is in good repair according to the
current standards and practices governing such material, and its
presence or condition does not violate any Environmental Law;
(k) There have been no environmental investigations,
studies, audits, tests, reviews or other analyses conducted by or
for, or that are in the possession of, the Partnership or any
Partner in relation to any site or facility now or previously
owned, operated or leased by the Partnership which have not been
delivered to Purchaser prior to the execution of this Agreement;
and
(l) To the Knowledge of the Partnership, there is no
facility, site or real property located within five (5) miles of
the Partnership Assets that is listed or proposed for listing on
the National Priorities List pursuant to CERCLA.
Section 3.7 Litigation. Except as set forth in
Section 3.7 of the Partnership Disclosure Schedule, there are (i)
to the Knowledge of the Partnership, no investigations pending or
threatened, (ii) no Proceedings pending or, to the Knowledge of
the Partnership, threatened against the Partnership, the Partners
in their capacities as such or the Partnership Assets affecting
or which could reasonably be expected to affect in any manner the
Partnership Assets, and (iii) to the Knowledge of the
Partnership, there are no existing or prior facts, circumstances
or conditions that could reasonably be expected to form the basis
for a Proceeding against the Partnership, the Partners in their
capacities as such or the Partnership Assets that would affect or
which could reasonably be expected to affect in any manner the
Partnership Assets. Neither the Partnership nor any Partner in
his capacity as such is in default with respect to any Order of
any Governmental Entity. The Partnership has made available to
Purchaser accurate and complete copies of all documentation
related to each Proceeding, including, without limitation,
complaints, answers, motions, responses, court orders,
interrogatories and answers thereto, discovery requests and
responses, any other discovery documentation, transcripts of all
discovery and other proceedings, correspondence among counsel for
the parties and/or the relevant tribunal, arbitrator or mediator.
Section 3.8 Insurance. Set forth in Section 3.8 of
the Partnership Disclosure Schedule is a complete and accurate
list of all primary, excess and umbrella policies, bonds and
other forms of insurance currently owned or held by or on behalf
of and/or providing insurance coverage to the Partnership, its
business, properties and assets and its partners, agents or
employees, including the following information for each such
policy: type (s) of insurance coverage provided; name of
insurer; effective and expiration date; policy number; per
occurrence and annual aggregate deductibles or self-insured
retention; annual premiums and any other fees for the procurement
of such insurance; per occurrence and annual aggregate limits of
liability and the extent, if any, to which the limits of
liability have been exhausted. Except as set forth in Section
3.8 of the Disclosure Schedule, all policies set forth in Section
3.8 of the Partnership Disclosure Schedule are in full force and
effect and shall remain in full force and effect through the
Closing Date, and thereafter shall remain in full force and
effect, by assignment, consent of the insurer or otherwise,
naming the Company as an additional insured until the expiration
date of such insurance policy or its cancellation or termination
by the Company or Purchaser. With respect to all policies, all
premiums currently payable or previously due have been paid, and
no notice of cancellation or termination has been received by the
Partnership or any partner therein with respect to any such
policy. All such policies are sufficient for compliance with all
requirements of Law and of all Contracts to which the Partnership
is a party or otherwise bound and are valid, outstanding,
collectible and enforceable policies and provide insurance
coverage which is adequate and customary for a business of the
Partnership's size and type. Complete and accurate copies of all
such policies and related documentation have previously been
provided to Purchaser.
Section 3.9 Compliance with Applicable Law. The
Partnership has for the past five years complied in all material
respects and is presently complying in all material respects with
all applicable Laws, including, but not limited to, the Federal
Occupational Safety and Health Act and all Laws relating to the
safe conduct of business and environmental protection and
conservation, the Civil Rights Act of 1964 and Executive Order
11246 concerning equal employment opportunity obligations of
federal contractors and any applicable health, sanitation, fire,
safety, labor, zoning and building laws and ordinances. Neither
the Partnership nor any Partner has received written notification
of any asserted present or past failure to so comply with all
applicable Laws and, to the Knowledge of the Partnership, there
are no existing or prior facts, circumstances or conditions that
could reasonably be expected to form the basis for such
notification or assertion. The representations of this Section
3.9 are intended to be in addition to and not as a qualification
to any other Section in this Article III.
Section 3.10 Governmental Permits. The Partnership
owns, holds or possesses all Governmental Permits relating to or
affecting in any manner the use of the Partnership Assets, except
for such Governmental Permits as to which the failure to so own,
hold or possess would not have a Material Adverse Effect.
Section 3.10 of the Partnership Disclosure Schedule sets forth a
list and brief description of each such Governmental Permit.
Complete and correct copies of all such Governmental Permits have
heretofore been delivered to Purchaser. Except as set forth in
Section 3.10 of the Partnership Disclosure Schedule, (i) the
Partnership has fulfilled and performed its obligations under
each such Governmental Permit, and no event has occurred or
condition or state of facts exists which constitutes or, after
the giving of notice or the passage of time or both, would
constitute a breach or default under any such Governmental Permit
or which permits or, after the giving of notice or the passage of
time or both, would permit revocation or termination of any such
Governmental Permit, or which might adversely affect the rights
of the Partnership under any such Governmental Permit; (ii) no
notice of cancellation, of default or of any dispute concerning
any such Governmental Permit, or of any event, condition or state
of facts described in the preceding clause, has been received by
the Partnership or any partner therein, or is Known to the
Partnership; and (iii) each such Governmental Permit is valid,
subsisting and in full force and effect and may be assigned and
transferred to Purchaser if required in accordance with this
Agreement and will continue in full force and effect thereafter,
in each case without (x) the occurrence of any breach, default or
forfeiture of rights thereunder, (y) the consent, approval, or
act of, or the making of any filing with, any Governmental Entity
or (z) the payment of any additional fee by Purchaser, the
posting of any bonds or surety or other incurrence of cost by
Purchaser.
Section 3.11 Entire Business. The sale of the
Partnership Assets by the Partnership to Purchaser pursuant to
this Agreement will effectively convey to Purchaser the entire
business and all of the tangible and intangible property used by
the Partnership (whether owned, leased or held under license by
the Partnership) in connection with the conduct of the business
as heretofore conducted by the Partnership (except for the
Excluded Assets, which are set forth in Section 3.11 of the
Partnership Disclosure Schedule). Except as disclosed in Section
3.11 of the Partnership Disclosure Schedule, there are no shared
facilities or services which are used in connection with any
business or other operations of the Partnership or any of the
Partnership's Affiliates other than the Business. The
Partnership Assets constitute the only assets and properties of
the Partnership used or held for use in the Business of the
Company, and all of the Partnership Assets are used in the
Business of the Company.
Section 3.12 Contracts. Except as set forth in
Section 3.12 of the Partnership Disclosure Schedule, the
Partnership Assets are not bound by any written or oral: (a)
Contract with (i) any present or former partner, employee, or
Affiliate or Associate of the Partnership pursuant to which
payments may be required to be made at any time following the
date hereof to any such Person, (ii) any agent, consultant, or
advisor pursuant to which payments may be required to be made at
any time following the date hereof to any such Person in excess
of $50,000 during any consecutive twelve month period, or
(iii) the Company, any Seller or any of their respective
Affiliates, Associates or family members; (b) Contract,
including, but not limited to, any mortgage, indenture,
debenture, bond, note, installment obligation or other instrument
constituting Indebtedness that is secured by the Partnership
Assets (and Section 3.12 of the Partnership Disclosure Schedule
shall include with respect to any such items, the principal
amounts thereof as of August 31, 1996, and information sufficient
to determine all prepayment or other penalties or consideration
which would be payable if such principal amounts were prepaid and
the Indebtedness terminated on the Closing Date); (c) guaranty of
any obligation for borrowings or performances, or guaranty or
warranty of products or services; (d) Contract for the sale or
lease of any Partnership Asset; (e) Contract affecting or secured
by the Partnership Assets which is not terminable on the giving
of notice at any time without premium or penalty or other
consideration; or (f) any other Contract of any nature not
otherwise described in this Section 3.12 without reference to
dollar amounts which is material to the Partnership Assets.
Except as set forth in Section 3.12 of the Partnership Disclosure
Schedule, with respect to each Contract listed in Section 3.12 of
the Partnership Disclosure Schedule, there is no default by the
Partnership or event that with the giving of notice or the
passage of time, or both, would constitute such a default nor, to
the Knowledge of the Partnership, any default, or event that with
the giving of notice, the passage of time or both, would
constitute such a default, by any other party thereto, except for
such defaults which, in the aggregate, result in loss or
liability to the Partnership of no more than $5,000. Neither the
Partnership nor any Partner intends (and neither has received
notice that any other party intends) to terminate (except as set
forth in Section 3.4) or amend such Contracts. Each of the
Contracts listed in Section 3.12 of the Disclosure Schedule is in
full force and effect and constitutes a legal, valid and binding
obligation of the Partnership and the other parties thereto
enforceable in accordance with its terms (subject to the effect
of bankruptcy, insolvency, reorganization or other similar Laws
and to general principles of equity, whether considered in
proceedings at law or in equity). The Partnership has made
available to Purchaser complete and accurate copies of each
Contract or other written evidence of the obligations, and all
amendments thereto, listed in Section 3.12 of the Disclosure
Schedule.
Section 3.13 Plants, Buildings, Structures, Facilities
and Equipment.
(a) All plants, buildings, structures, facilities and
equipment included in the Partnership Assets are structurally
sound with no defects, damages or repairs that would require in
excess of $50,000 in the aggregate to correct or repair and are
in good operating condition and repair (subject to normal wear
and tear) so as to permit the operation by the Partnership of the
Partnership Assets as presently conducted;
(b) No such plant, building, structure, facility or
equipment included in the Partnership Assets is in need of
maintenance or repairs except for ordinary, routine maintenance
and repairs which are not reasonably likely to exceed, in the
aggregate, $50,000, no written notice from any Governmental
Entity has been received by the Partnership or any partner
therein requiring or calling attention to the need for any work,
repair, construction, alteration or installation on, or in
connection with, any real property or any of the plants,
buildings, structures, facilities or equipment located thereon
included in the Partnership Assets and, to the Knowledge of the
Partnership, there are no existing or prior facts, circumstances
or conditions that could reasonably be expected to form the basis
for such a written notice;
(c) All real property and each plant, building,
structure, facility or equipment located thereon included in the
Partnership Assets, is in compliance with any applicable deed
restrictions or covenants and all building, zoning, subdivision,
health, safety or other Laws, ordinances and regulations,
including without limitation the Americans with Disabilities Act
and the Occupational Safety and Health Act, and neither the
Partnership nor any partner therein has received notification
that any alleged violation exists and, to the Knowledge of the
Partnership, there are no existing or prior facts, circumstances
or conditions that could reasonably be expected to form the basis
of such an allegation;
(d) There is no pending or, to the Knowledge of
Partnership, threatened condemnation of the real property
included in the Partnership Assets or any part thereof or of any
general or special assessment relating thereto;
(e) All roads bounding each parcel of real property
included in the Partnership Assets are public roads and the
Partnership has full access to and the right of ingress and
egress over, to and from such roads and the right to use such
roads freely as well as all rights in such roads appurtenant to
each parcel of such property; and
(f) Each parcel of real property included in the
Partnership Assets has connection to sanitary sewer, storm sewer,
water, electricity, gas, telephone and all other necessary
utility services and, to the Knowledge of the Partnership, there
are no existing or prior facts, circumstances or conditions which
are reasonably likely to result in termination of such
connections for any significant period of time.
Section 3.14 Brokers or Finders. Each of the Company
and Purchaser does not have nor will have any obligation to pay
any broker's, finder's, investment banker's, intermediary's,
financial advisor's or similar fee in connection with this
Agreement, or the transactions contemplated herein (other than
any bank financing fees Purchaser may incur), by reason of any
action taken by or on behalf of the Partnership or any Partner or
any of their respective Affiliates.
Section 3.15 Disclosure. The representations and
warranties by the Partnership and the Partners in this Agreement
and the statements contained in the Partnership Disclosure
Schedule or any other schedules, certificates, documents,
exhibits and agreements referred to herein or otherwise furnished
or to be furnished by the Partnership or any Partner in his
capacity as such to Purchaser pursuant to this Agreement, the
Operative Agreements to which the Partnership or any Partner in
his capacity at such is a party and the transactions contemplated
herein and therein (collectively, the "Partnership Documents") do
not and will not contain any untrue statement of a material fact
and do not and will not omit to state any material fact necessary
to make the statements herein or therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
Section 4.1 Organization, Standing and Qualification.
Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of
incorporation and has all requisite corporate power and authority
to own, lease and operate its properties and to carry on its
business as now being conducted.
Section 4.2 Authority Relative to this Agreement.
Purchaser has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions
contemplated herein. The execution and delivery of this
Agreement and the consummation of the transactions contemplated
herein have been duly and validly authorized by Purchaser's Board
of Directors and no other corporate proceedings on the part of
Purchaser is necessary to authorize this Agreement or to
consummate the transactions contemplated herein. This Agreement
has been duly and validly executed and delivered by Purchaser and
constitutes, and each other agreement that is to be executed and
delivered by Purchaser in connection with the transactions
contemplated by this Agreement when executed and delivered by
Purchaser, as the case may be, will constitute, a valid and
binding agreement of Purchaser, enforceable against Purchaser in
accordance with its terms, except (i) as such enforceability may
be limited by bankruptcy, insolvency, moratorium, reorganization
and other similar laws affecting creditors' rights generally, and
(ii) as such enforceability may be limited by general principles
of equity, regardless of whether asserted in a proceeding in
equity or law.
Section 4.3 Consents and Approvals; No Violation.
Except for applicable requirements of the HSR Act, there is no
requirement applicable to Purchaser to make any filing with, or
to obtain any permit, authorization, consent or approval of, any
Governmental Entity as a condition to the lawful consummation by
Purchaser of the transactions contemplated herein. Except as set
forth in Section 4.3 of Purchaser's disclosure schedule delivered
concurrently herewith (the "Purchaser Disclosure Schedule") and
except for applicable requirements of the HSR Act, neither the
execution and delivery of this Agreement by Purchaser, nor the
consummation by Purchaser of the transactions contemplated
herein, nor compliance by Purchaser with any of the provisions
hereof will (i) conflict with or result in a breach of any
provision of its certificate of incorporation or bylaws, (ii)
provided that an amendment to the Purchaser Credit Agreement has
been made prior to Closing, result in a breach of, or default
under (or give rise to any right of termination, cancellation or
acceleration under), any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, license, agreement,
Contract, lease or other instrument or obligation to which it is
a party or by which any of its properties or assets may be bound,
except for such breaches or defaults (or rights of termination,
cancellation or acceleration) as to which requisite waivers or
consents have been obtained or will be obtained prior to the
Closing Date, or (iii) violate any Order or Laws applicable to it
or its properties or assets except for such violations which
would not have a material adverse effect on (x) the business,
properties, results of operations or financial or other
conditions of Purchaser, taken as a whole, or (y) on the ability
of Purchaser to consummate the transactions contemplated herein.
There is no Proceeding pending or, to the knowledge of Purchaser,
threatened against Purchaser that seeks to prevent the
consummation of the transactions contemplated herein.
Section 4.4 Brokers or Finders. Neither Seller, the
Partnership nor any Partner will have any obligation to pay any
broker's, finder's, investment banker's, intermediary's,
financial advisor's or similar fee in connection with this
Agreement, or the transactions contemplated herein by reason of
any action taken by or on behalf of Purchaser.
ARTICLE V
COVENANTS
Section 5.1 Conduct of Business. During the period
from the date hereof to the Closing, except as otherwise
contemplated in this Agreement, Seller shall cause the Company to
be operated only in the ordinary course of business consistent
with past practice. Seller will use his, its or their best
efforts to cause the Company, at the Company s sole cost and
expense, to preserve intact the present organization of the
Company; keep available the services of the present officers and
employees of the Company; preserve the Company's goodwill and
relationships with customers, suppliers, licensors, licensees,
contractors, distributors, lenders and other Persons having
significant business dealings with the Company; continue all
current sales, marketing and other promotional policies, programs
and activities; maintain the assets of the Company in good
repair, order and condition; and maintain the Company s insurance
policies and risk management programs and in the event of
casualty, loss or damage to any assets of the Company, repair or
replace such assets with assets of comparable quality, as the
case may be. Without limiting the generality of the foregoing,
and except as otherwise provided in this Agreement or Section 5.1
of the Disclosure Schedule, from the date of this Agreement to
the Closing, without the prior written consent of Purchaser,
Seller shall take no action which would permit the Company to and
shall cause the Company, and in the case of Paragraph (h) hereof
shall cause each ERISA Affiliate, not to:
(a) (i) authorize for issuance, issue, sell, deliver
or agree or commit to issue, sell or deliver (whether through the
issuance or granting of options, warrants, commitments,
subscriptions, rights to purchase or otherwise) any shares of its
capital stock or any other securities or equity equivalents,
except in connection with the exercise of the Options, (ii)
split, combine or reclassify any shares of its capital stock or
(iii) amend the terms of any such securities or agreements
outstanding on the date hereof;
(b) amend its articles of incorporation or bylaws;
(c) except as specifically provided in Section 5.12
hereof, declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any
combination thereof) in respect of the Common Stock or any other
of its capital stock, or redeem, repurchase or otherwise acquire
any of the Common Stock or any other of its securities;
(d) (i) sell, lease, transfer or dispose of any assets
(other than (x) the assignment of insurance policies on the lives
of Xxxx X. Xxxxxxxx, Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxxxxxx and Xxx
Xxxxxxxx to one or more of such individuals upon payment of the
cash surrender value thereof (or if none, $.00), provided such
payments aggregated approximately $59,428 at June 30, 1996 or (y)
the disposition of assets as obsolete or as a sale of inventory,
in each case in the ordinary course of business and consistent
with past practice) or rights, (ii) permit any asset to suffer
any Encumbrance thereupon, except for such Encumbrances existing
on the date hereof and Permitted Encumbrances, (iii) acquire any
assets or rights, unless in the case of (i), (ii) and (iii),
pursuant to obligations in effect on the date hereof and set
forth in Section 5.1(d) of the Disclosure Schedule, pursuant to a
reasonably detailed capital expenditure budget as set forth in
Section 5.1(d) of the Disclosure Schedule (the "Budget"), or in
connection with the acquisition of inventory in the ordinary
course of business and consistent with past practice, or (iv)
enter into any commitment or transaction binding on the Company
or its assets with respect to (i), (ii) or (iii) above;
(e) (i) incur or assume any Indebtedness, (ii) issue
or sell any debt securities or warrants or rights to acquire any
debt securities, (iii) assume, guarantee, endorse or otherwise
become liable (whether directly, contingently or otherwise) for
the obligations of any other Person, or (iv) except for travel
advances to employees consistent with past practice and in an
amount in the aggregate not exceeding $50,000, make any loans,
advances or capital contributions to, or investments in, any
other Person;
(f) pay, discharge or satisfy any liability,
obligation, or Encumbrance (absolute, accrued, asserted or
unasserted, contingent or otherwise) of the Company, other than
the payment, discharge or satisfaction in the ordinary course of
business consistent with past practice or in accordance with
their terms, of claims, liabilities or obligations of the Company
reflected on or reserved against in the Interim Balance Sheet;
(g) change or propose to change any of the financial
reporting, accounting or tax principles, practices or methods
used by the Company (except as required by GAAP or Law);
change the fiscal year of the Company; write down the value of
any assets of the Company; or change any policies or practices
with respect to the pricing of products and services, investments
by the Company, maintenance of inventory levels or other
practices related to inventory, credit, allowance or other
material policy;
(h) enter into, adopt, amend or terminate any Plan,
increase in any manner the compensation or fringe benefits of any
director, officer or employee of the Company or pay any benefit
not required by any existing Plan, or enter into any Contract,
agreement, commitment or arrangement to do any of the foregoing,
except to the extent required by applicable law;
(i) enter into or offer to enter into any employment
arrangement or consulting arrangement with any Person;
(j) make or authorize any capital expenditures except
in accordance with the Budget described in Section 5.1(d) hereof;
(k) settle or compromise any Tax liability;
(l) (i) enter into, amend or terminate any Contract or
Governmental Permit, unless the aggregate amount involved in all
such Contracts and Governmental Permits is no more than $50,000,
(ii) take any action or fail to take any action that, with or
without either the giving of notice or the passage of time, would
constitute a default under any such Contract or Governmental
Permit, or (iii) grant waivers or consents to other parties to
Contracts or powers of attorney to other Persons with respect to
Contracts;
(m) except as specifically provided in Sections 5.11
or 5.12 hereof and except for travel advances to employees
consistent with past practice and in an amount in the aggregate
not exceeding $50,000, make any payments, loans, advances or
other distributions to or enter into or amend any transaction,
Contract or arrangement with or for the benefit of, the
Partnership, any Seller, or any of their respective Affiliates,
Associates or family members;
(n) make or propose to make any change in its accounts
payable practices;
(o) terminate or amend or fail to perform any of its
obligations or permit any default to exist or cause any breach
under any of the Company policies of insurance set forth in
Section 2.18 of the Disclosure Schedule;
(p) dispose of or permit to lapse any item of
Intellectual Property; or
(q) take, or agree in writing, orally or otherwise to
take, any of the foregoing actions or any action which would make
any representation or warranty of Seller contained in this
Agreement untrue or incorrect as of the date when made or as of
any future date or which could prevent the satisfaction of any
condition to closing set forth in Article VI hereof.
Section 5.2 Conduct of Partnership. During the period
from the date hereof to the Closing, except as otherwise
contemplated by this Agreement, the Partnership shall operate
only in the ordinary course of business consistent with past
practice and shall maintain or cause to be maintained the
Partnership Assets in good repair, order and condition, and shall
take all actions necessary to deliver to Purchaser the
Partnership Assets at the Closing free and clear of any
Encumbrances other than Permitted Encumbrances. Without limiting
the generality of the foregoing, and except as otherwise provided
in this Agreement or Section 5.2 of the Partnership Disclosure
Schedule, from the date of this Agreement to the Closing, without
the prior written consent of Purchaser, the Partnership shall
not:
(a) amend the Partnership Agreement;
(b) (i) sell, lease, transfer or dispose of any of the
Partnership Assets, (ii) permit any Partnership Asset to suffer
any Encumbrance thereupon, except for such Encumbrances existing
on the date hereof and Permitted Encumbrances, or (iii) enter
into any commitment or transaction binding on the Partnership
with respect to the Partnership Assets;
(c) terminate or amend or fail to perform any of its
obligations or permit any default to exist or cause any breach
under any of the Partnership policies of insurance set forth in
Section 3.8 of the Partnership Disclosure Schedule;
(d) (i) enter into, amend or terminate any Contract or
Governmental Permit, unless the aggregate amount involved in all
such Contracts and Governmental Permits is no more than $50,000,
(ii) take any action or fail to take any action that, with or
without either the giving of notice or the passage of time, or
both, would constitute a default under any such Contract or
Governmental Permit, or (iii) grant waivers or consents to other
parties to Contracts or powers of attorney to other Persons with
respect to Contracts;
(e) make any payments, loans, advances or other
distributions to or enter into any transaction, Contract or
arrangement with or for the benefit of the Company, any Seller or
any of their respective Affiliates, Associates or family members
or other Affiliates of the Partnership;
(f) make or propose to make any changes in its
accounts payable practices with respect to the Partnership
Assets; or
(g) take, or agree in writing or otherwise to take,
any of the foregoing actions or any action which would make any
representation or warranty of the Partnership or the Partners
contained in this Agreement untrue or incorrect as of the date
when made or as of any future date or which could prevent the
satisfaction of any condition to closing set forth in Article VI
hereof.
Section 5.3 Access to Company Information;
Confidentiality. (a) Seller shall, and shall cause the Company,
upon reasonable notice, to, (i) give Purchaser and its authorized
representatives full access during normal business hours to all
Books and Records, plants, offices, warehouses and other
facilities and properties utilized by the Company in connection
with its Business and all information relating to the Company,
its Business, properties, assets, financial condition, results of
operations and prospects, (ii) permit Purchaser and its
authorized representatives to make such inspections thereof and
interview personnel of the Company during normal business hours
as Purchaser may reasonably request, but only with the consent of
one of the Sellers, which consent shall not be unreasonably
withheld, and, at the written request of the Seller, in the
presence of a Seller; and (iii) cause the Company's officers and
auditors to furnish Purchaser and its authorized representatives
with such financial operating data and other information with
respect to the items set forth in clause (i) of this paragraph
(a) as Purchaser may from time to time reasonably request
(including, but not limited to, monthly management reports and
monthly financial statements delivered within ten (10) days
following the end of each month), and cause the auditors to
deliver their workpapers related to such information if Purchaser
shall so request, and (iv) at Purchaser's reasonable request,
cause the Company's officers to compile information that has not
been compiled for another purpose.
(b) All information about the Company obtained by
Purchaser from Seller, the Company or any of their directors,
officers, employees, agents or representatives in connection with
the transactions contemplated herein (other than publicly
available information or information which becomes available to
Purchaser on a non-confidential basis from another source) shall
be held in confidence by Purchaser and such information shall not
be disclosed to any Person (other than Purchaser and its
Affiliates and their respective directors, officers, employees,
agents, and representatives) except as may be required by
judicial process, administrative or other Order, or any Law, rule
or regulation, including without limitation the rules and
regulations of any national securities exchange. After the
Closing, this covenant shall have no application to information
disclosed by Purchaser about the Company in the ordinary course
of conduct of its business or the Business of the Company.
(c) Notwithstanding the provisions of paragraph (b) of
this Section 5.3, Purchaser may disclose information concerning
the Company, its Business, assets and properties, and the
transactions contemplated by this Agreement in any disclosure
document prepared by Purchaser or any of its Affiliates in order
to obtain financing for such transactions, provided that such
disclosure document indicates the confidential nature of such
information and that it is being furnished, and may be used by
the recipient, solely in connection with such financing and for
no other purpose. Each Seller will cooperate with Purchaser in
the preparation of any such disclosure document and other
reasonable requests with respect to obtaining such financing, and
each Seller shall use his best efforts to cause his accountants,
lawyers, agents and other representatives to so cooperate.
Section 5.4 Access to Partnership Information;
Confidentiality. (a) The Partnership, upon reasonable notice,
shall (i) give Purchaser and its authorized representatives full
access during normal business hours to all Books and Records,
plants, offices, warehouses and other facilities and properties
utilized by the Partnership in connection with its business and
all information relating to the Partnership, its business,
properties, assets, financial condition, results or operations
and prospects, (ii) permit Purchaser and its authorized
representatives to make such inspections thereof and interview
partners and other personnel of the Partnership during normal
business hours as Purchaser may reasonably request and (iii)
furnish or cause the Partnership's auditors to furnish Purchaser
and its authorized representatives with such financial operating
data and other information with respect to the items set forth in
clause (i) of this paragraph (a) as Purchaser may from time to
time reasonably request, and cause the auditors to deliver their
workpapers related to such information if Purchaser shall so
request, and (iv) at Purchaser's reasonable request compile
information that has not been compiled for another purpose.
(b) All information about the Partnership obtained by
Purchaser from the Partnership or its partners, agents or
representatives in connection with the transactions contemplated
herein (other than publicly available information or information
which becomes available to Purchaser on a non-confidential basis
from another source) shall be held in confidence by Purchaser and
such information shall not be disclosed to any Person (other than
Purchaser and its Affiliates and their respective directors,
officers, employees, agents, and representatives, provided that
each such Person to whom disclosure is made has been advised of
the confidential nature of such information and has agreed not to
disclose it to any other Person) except as may be required by
judicial process, administrative or other Order, or any Law, rule
or regulation, including without limitation the rules and
regulations of any national securities exchange. After the
Closing, this covenant shall have no application to information
disclosed by Purchaser about the Partnership or Partnership
Assets in the ordinary course of conduct of its business or the
Business of the Company.
Section 5.5 Disclosure Supplements. From time to time
prior to the Closing, Seller, the Partnership and Purchaser shall
supplement or amend the Disclosure Schedule, the Partnership
Disclosure Schedule and the Purchaser Disclosure Schedule,
respectively, with respect to any matter hereafter arising or any
information obtained after the date hereof which, if existing,
occurring or known at or prior to the date of this Agreement,
would have been required to be set forth or described in the
Disclosure Schedule, the Partnership Disclosure Schedule or the
Purchaser Disclosure Schedule, as the case may be, or which is
necessary to complete or correct any information in such schedule
or in any representation and warranty of Seller, the Partnership
or Purchaser, as the case may be, which has been rendered
inaccurate thereby. For purposes of Articles VI, VII and VIII
hereof, any such supplement or amendment shall be disregarded and
given no effect. Seller has delivered or made available to
Purchaser copies of all documents set forth in the Disclosure
Schedule. The Partnership has delivered or made available to
Purchaser copies of all documents set forth in the Partnership
Disclosure Schedule.
Section 5.6 Reasonable Best Efforts.
(a) Upon the terms and subject to the conditions of
this Agreement, each of the parties hereto agrees to use its
reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary,
proper or advisable under applicable Laws and regulations to
consummate and make effective the transactions contemplated in
this Agreement as promptly as practicable, including, but not
limited to, (i) the preparation and filing of all applicable
forms under the HSR Act, (ii) the preparation and filing of all
other forms, registrations and notices required to be filed to
consummate the transactions contemplated in this Agreement and
the taking of such actions as are necessary to obtain any
requisite approvals, consents, orders, exemptions or waivers by
any third party or Governmental Entity and (iii) the satisfaction
of all conditions to Closing. Each party shall promptly consult
with the other with respect to, provide any necessary information
not subject to legal privilege with respect to and provide the
other (or its counsel) copies of, all filings made by such party
with any Governmental Entity or any other information supplied by
such party to a Governmental Entity in connection with this
Agreement and the transactions contemplated in this Agreement.
(b) Each party hereto shall promptly inform the other
of any communication from any Governmental Entity regarding any
of the transactions contemplated in this Agreement. If any party
or Affiliate thereof receives a request for additional
information or documentary material from any such Governmental
Entity with respect to the transactions contemplated in this
Agreement, then such party will endeavor in good faith to make,
or cause to be made, as soon as reasonably practicable and after
consultation with the other party, an appropriate response in
compliance with such request.
(c) Notwithstanding the foregoing, nothing in this
Agreement shall be deemed to require Purchaser to enter into any
agreement with any Governmental Entity or to consent to any Order
requiring Purchaser to hold separate or divest, or to restrict
the dominion or control of Purchaser or any of its Affiliates
over any of the assets, properties or businesses of Purchaser,
its Affiliates, the Company or the Partnership Assets.
Section 5.7 Further Assurances. Each Seller, the
Partnership and each Partner in his capacity as such agree that,
from time to time after the Closing, without additional
consideration, each of them will execute and deliver such further
instruments, provide such materials and information and take such
other action as Purchaser may reasonably request to make
effective the transactions contemplated in this Agreement and
otherwise to fulfill the obligations of Seller and the
Partnership under this Agreement and the Operative Agreements.
Section 5.8 No Solicitation by Seller. Each Seller
shall, and shall cause the Company to, immediately cease any
existing discussions or negotiations with any third parties
conducted prior to the date hereof with respect to any merger,
business combination, sale of assets (other than sales permitted
by this Agreement), sale of shares of capital stock or other
securities or similar transaction involving any third party and
Seller or the Company (an "Acquisition Transaction"). Seller
shall, and Seller shall ensure that the Company and its directors
and officers shall, and shall use their best efforts to cause the
Company's employees or other Affiliates not to, directly or
indirectly, encourage, solicit, participate in, facilitate or
initiate discussions or negotiations with, or provide any
information to, any Person or group (other than Purchaser or its
directors, officers, employees or other Affiliates or
representatives) concerning any Acquisition Transaction or any
discussions or negotiations with respect thereto. Seller shall
immediately communicate to Purchaser any such inquiries or
proposals regarding an Acquisition Transaction and the terms
thereof.
Section 5.9 No Solicitation by the Partnership. The
Partnership and each Partner shall immediately cease any existing
discussions or negotiations with any third parties conducted
prior to the date hereof with respect to any sale of assets of or
interests in the Partnership or similar transaction involving any
third party (a "Partnership Acquisition Transaction"). The
Partnership and each Partner and their respective Affiliates
shall not, directly or indirectly, encourage, solicit,
participate in, facilitate or initiate discussions or
negotiations with, or provide any information to, any Person or
group (other than Purchaser or its directors, officers, employees
or other Affiliates or representatives) concerning any
Partnership Acquisition Transaction or any discussions or
negotiations with respect thereto. The Partnership and each
Partner will immediately communicate to Purchaser any such
inquiries or proposals regarding a Partnership Acquisition
Transaction and the terms thereof.
Section 5.10 Fees and Expenses. Except as otherwise
set forth in this Agreement, each party hereto shall pay the fees
and expenses incurred by it in connection with the transactions
contemplated herein including performance of such party's
obligations hereunder and no such fees and expenses of any Seller
or the Partnership shall be paid or reimbursed or otherwise
incurred by the Company. The Partnership shall pay all fees and
expenses with respect to compliance with its obligations
hereunder and the Partnership s sale and conveyance by the
Partnership of the Partnership Assets.
Section 5.11 Repayment of Loans, Advances, Notes, etc.
Prior to the Closing, each Seller and the Partnership shall, and
shall cause their respective Affiliates, Associates and family
members to, repay to the Company in cash all amounts owed by such
Persons to the Company. All such amounts as of the date hereof
are set forth in Section 2.27(a) of the Disclosure Schedule.
Prior to the Closing, the Partnership, each Partner and each
Seller which has amounts set forth on Section 2.27(a) of the
Disclosure Schedule shall deliver to Purchaser a certificate
executed by the Partnership, such Partner and/or such Seller and
the Chief Financial Officer of the Company, as the case may be,
certifying that all such amounts have been repaid in full in cash
to the Company. Such certificate shall set forth each such
amount so repaid and the date of such repayments. Prior to the
Closing, the Company shall repay to the Partnership, each Seller
and their respective Affiliates, Associates and family members
all amounts owed to such Persons by the Company. All such
amounts as of the date hereof are set forth in Section 2.27(a) of
the Disclosure Schedule. Prior to the Closing, the Company shall
deliver to Purchaser a certificate with respect to each such
amount owed by the Company, executed by the Chief Financial
Officer of the Company and the Partnership or such Seller, as the
case may be, certifying that all such amounts have been repaid in
full by the Company, the amount repaid, the method of repayment
and the date of such repayments.
Section 5.12 Dividends, Distributions, Etc. Prior to
the Closing, Seller shall cause the Company not to declare and
pay dividends or distributions to Seller except for dividends or
distributions in amounts necessary to enable Seller to make
payments of income taxes owed by such Seller in connection with
earnings of the Company (other than attributable to the
transactions contemplated in this Agreement) earned subsequent to
September 15, 1996 and up to the Closing Date (taking into
account all prior dividends and distributions to Seller from the
Company on account of earnings and Tax liability through
September 15, 1996); provided that Seller or the Company has
provided Purchaser written notice of the amounts of such
distributions and the method and basis for determining such
amounts and the permissibility to make such distribution under
applicable Laws and, provided further, that Purchaser consents in
writing to such distribution prior to the distribution. Such
consent shall not be withheld unreasonably.
Section 5.13 Public Announcements. Subject to
Sections 5.3 and 5.4 hereof, none of Seller, the Company, the
Partnership or Purchaser will issue or cause the publication of
any press release or otherwise make any public statement with
respect to the transactions contemplated herein without the prior
written consent of the parties hereto, provided, that any party
hereto may make a public announcement to the extent required by
Law, judicial process or the rules, regulations or
interpretations of the Securities and Exchange Commission or any
national securities exchange, but whenever it is reasonably
feasible to do so, shall give prior written notice to, and confer
with, the other parties prior to making such public announcement.
Section 5.14 Financial Statements. (a) No later than
ten (10) days after the end of each month ending after the date
hereof and before the Closing Date, Seller shall deliver to
Purchaser true and complete copies of the unaudited balance
sheet, and the related unaudited statements of income,
stockholders' equity and cash flows, of the Company for the month
then ended and the portion of the fiscal year then ended,
together with notes relating thereto, which financial statements
shall be prepared on a basis consistent with the Financial
Statements; (b) prior to the Closing Date, Seller shall cause the
Company to prepare and deliver to Purchaser an unaudited balance
sheet of the Company as of the end of the most recent calendar
month ending at least ten (10) days prior to the Closing Date
(the "Closing Date Balance Sheet"), and unaudited statements of
income, stockholders' equity and cash flow of the Company for the
twelve months then ended, accompanied by a certificate signed by
Seller and the Company's chief financial officer (i) stating that
such financial statements are a true and correct copy thereof and
fairly present, in all material respects, the financial position
of the Company as of such date, and the results of its operations
for the twelve months then ended in accordance with GAAP, except
for the absence of footnote disclosures on such financial
statements; (ii) stating that GAAP was applied in the preparation
of such financial statements on a basis consistent with the
application of GAAP in the preparation of the Company's audited
financial statements for the year ended December 31, 1995; and
(iii) setting forth EBITDA for the twelve months then ended
(including the calculation thereof), the Indebtedness then
outstanding (including premiums and penalties upon prepayment of
such Indebtedness and any negative cash balance), the Net Working
Capital (including the calculation thereof) and the Net Worth as
of the date of the financial statements.
Section 5.15 Environmental Due Diligence.
Seller shall cooperate with, and provide reasonable access to,
Purchaser and its representatives for environmental assessments
and other environmental due diligence of each of the facilities
owned, operated or leased by the Company which Purchaser, in its
sole discretion, deems necessary. The Partnership shall
cooperate with, and provide reasonable access to, Purchaser and
its representatives for environmental assessments and other
environmental due diligence of the Partnership Assets which
Purchaser, in its sole discretion, deems necessary. If
Purchaser's environmental assessment indicates a potential
material environmental liability, Purchaser may conduct
additional assessments, including, but not limited to, soil and
ground water sampling and testing. Purchaser shall conduct all
environmental assessments and other environmental due diligence
in a commercially reasonable manner and shall use reasonable
efforts to minimize any interference with or impairment of the
regular conduct of the Company s Business.
Section 5.16 Non-Competition Agreement.
Immediately prior to the Closing, Xxxx X. Xxxxxxxx shall enter
into a Non-Competition Agreement substantially in the form and
substance of Exhibit H hereto and otherwise satisfactory to
Purchaser (the "Non-Competition Agreement") with the Company,
pursuant to which Xxxx X. Xxxxxxxx will agree not to compete with
Purchaser or its Affiliates (including the Company) for a period
of five years from the Closing Date.
Section 5.17 Employment Agreement. Immediately prior
to the Closing, the Company, as directed by Purchaser, or TCA
will enter into an employment agreement with each of Xxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxxx, Xxx Xxxxxxxx and Xxxxxxx Xxxxxxxx
in form and substance satisfactory to Purchaser and including
non-competition provisions.
Section 5.18 Escrow Agreement. At the Closing,
Purchaser, the Seller's Agent, each Seller and the Escrow Agent
shall enter into an escrow agreement, substantially in the form
of Exhibit B hereto (the "Escrow Agreement").
Section 5.19 Books and Records. Seller shall and
shall cause the Company to maintain all Books and Records in the
regular and customary manner as such Books and Records have been
maintained. At the Closing, each Seller shall deliver to the
Company all Books and Records in his possession relating to the
Company, including, but not limited to, Business Know-How.
Section 5.20 General Release. Immediately prior to
the Closing, each Seller and the Partnership shall deliver to
Purchaser one or more general releases (the "General Releases"),
executed by such Seller and those of Seller's Affiliates,
associates and family members designated by Purchaser or, as
applicable, the Partnership and each partner therein, releasing
the Company and its directors, officers and employees as such,
from any and all claims such Seller and such Affiliates,
associates and family members of such Seller and the Partnership
and such partners might have against such persons and all
liabilities owed to such Seller and such Affiliates, associates
and family members of Seller or to the Partnership or to such
partners by such Persons. The General Releases shall be in form
and substance satisfactory to Purchaser.
Section 5.21 Tax Matters.
(a) (i) At the election of Purchaser, each of
the Sellers and Purchaser shall jointly make
timely and irrevocable elections under Section
338(h)(10) of the Code and, if permissible,
similar elections under any applicable state or
local income tax laws. Each of the Sellers, the
Company and the Purchaser shall report the
transaction consistent with such elections under
Section 338(h)(10) of the Code or any similar
state or local tax provision (the "Elections") and
shall take no position contrary thereto unless and
to the extent required to do so pursuant to a
determination (as defined in Section 1313(a) of
the Code or any similar state or local tax
provision).
(ii) Each of the Sellers, the Company and the
Purchaser shall execute at the Closing any and all
forms necessary to effectuate the Elections (including,
without limitation, Internal Revenue Service Form 8023-
A and any similar forms under applicable state and
local income tax laws (the "Section 338 Forms")). Each
of the Sellers, the Company and the Purchaser shall
cause the Section 338 Forms to be duly executed by an
authorized person and shall duly and timely file the
Section 338 Forms in accordance with applicable Tax
laws and the terms of this Agreement.
(iii) Each of the Sellers and the Purchaser
agree to allocate the Aggregate Deemed Sale Price (as
defined under applicable Treasury Regulations) of the
assets of the Company as follows: Each of the Sellers
and the Purchaser agree that the fair market value of
the Class I and Class II assets (each as defined in the
Treasury Regulations under Code Section 1060) of the
Company shall equal the book value of such assets on
the Closing Date. Any remaining Aggregate Deemed Sale
Price will be allocated first to the Class III Assets
in accordance with relative fair market values (any
such allocation shall reflect the parties agreement
that the fair market value of the depreciable assets is
equal to their adjusted basis at the Closing Date plus
$2,500,000) and then to the Class IV Assets. Each of
the Sellers and the Purchaser will accept such
allocation and will reflect such allocation in all
applicable tax returns filed by any of them, including
but not limited to the Section 338 Forms. Each of the
Sellers and the Purchaser shall not take a position
before any taxing authority or otherwise (including in
any Tax Return) inconsistent with such allocation
unless and to the extent required to do so pursuant to
a determination (as defined in Section 1313(a) of the
Code or any similar state or local law).
(b) (i) Except to the extent limited by
Section 8.2(c), each Seller shall be jointly and
severally liable for and indemnify Purchaser and the
Company for Taxes of the Company for any taxable year
or period that ends on or before the Closing and, with
respect to any taxable year or period beginning before
and ending after the Closing, the portion of such
taxable year ending on and including the Closing Date,
including any Taxes imposed as a result of the
Elections, except for Taxes of the Company paid prior
to the Closing, adequately reserved against in the
Closing Date Balance Sheet or incurred in the ordinary
course of business after the date of the Closing Date
Balance Sheet; provided that the Company has not prior
to the date of this Agreement paid or reserved and
shall not from the date hereof through the Closing Date
pay or reserve for any federal income taxes, including
any Taxes imposed as a result of the Elections, for any
period ending on or prior to the Closing Date.
(ii) Purchaser and the Company shall be liable for
and indemnify Seller for the Taxes of the Company for
any taxable year or period that begins after the
Closing and, with respect to any taxable year or period
beginning before and ending after the Closing, the
portion of the taxable year beginning on the day after
the Closing Date.
(iii) For purposes of paragraphs (b)(i) and
(b)(ii), whenever it is necessary to determine the
liability for Taxes of the Company for a portion of a
taxable year or period that begins before and ends
after the Closing, the determination of such Taxes for
the portion of the year or period ending on, and the
portion of the year or period beginning after, the
Closing shall be determined by assuming that the
Company had a taxable year or period which ended at the
close of the Closing Date, except that exemptions,
allowances or deductions that are calculated on an
annual basis, such as the deduction for depreciation,
shall be apportioned based on the number of days in the
year elapsed to and including the Closing Date.
(iv) Any payment by Seller or the Purchaser under
this Section 5.21 will be treated for tax purposes as
an adjustment to the Purchase Price.
(c) Seller shall file or cause to be filed (including
by causing the Company to file) when due all Tax Returns that are
required to be filed by the Company for taxable years or periods
ending on or before the Closing Date, and Purchaser shall file or
cause to be filed when due all other Tax Returns that are
required to be filed by or with respect to the Company.
(d) After the Closing Date, each of Seller and
Purchaser shall:
(i) assist in all reasonable respects (and cause
their respective Affiliates to assist) the other party
in preparing any Tax Returns or reports which such
other party is responsible for preparing and filing in
accordance with this Section 5.21.
(ii) cooperate in all reasonable respects in
preparing for any audits of, or disputes with taxing
authorities regarding, any Tax Returns of the Company;
(iii) make available to the other and to any
taxing authority as reasonably requested all
information, records, and documents relating to Taxes
of the Company;
(iv) provide timely notice to the other in writing
of any pending or threatened Tax audits or assessments
of the Company for taxable period for which the other
may have a liability under this Section 5.21; and
(v) furnish the other with copies of all
correspondence received from any taxing authority in
connection with any Tax audit or information request
with respect to any such taxable period.
(e) Purchaser shall notify Seller in writing upon
receipt by Purchaser or the Company of notice of any pending or
threatened federal, state, local or foreign Tax audits or
assessments which may materially affect the Tax liabilities of
the Company for which Seller would be required to indemnify
Purchaser and the Company, provided that failure to comply with
this provision shall not affect Purchaser's right to
indemnification hereunder except to the extent such failure
materially impairs Seller's ability to contest any such Tax
liabilities.
Seller shall have the sole right to represent the
Company's interests in any Tax audit or administrative or court
proceeding relating to taxable period ending on or before the
Closing, and to employ counsel of its choice at its expense,
provided, however, that Purchaser and its representatives shall
be permitted, at Purchaser's expense, to be present at, and
participate in, any such audit or proceeding. Notwithstanding
the foregoing, Seller shall not be entitled to settle, either
administratively or after the commencement of litigation, any
claim for Taxes (i) unless Seller shall promptly pay any amount
owed in connection with such settlement, or (ii) which could
adversely affect the liability for Taxes of the Company for any
period after the Closing to any extent (including, but not
limited to, the imposition of income Tax deficiencies, the
reduction of asset basis or cost adjustments, the lengthening of
any amortization or depreciation periods, the denial of
amortization or depreciation deductions, or the reduction of loss
or credit carryforwards) without the prior written consent of
Purchaser, which consent may be withheld in the sole discretion
of Purchaser unless Seller has indemnified the Purchaser in a
manner acceptable to Purchaser against the effects of any such
settlement.
(f) The Escrow Agreement shall provide that the Escrow
Amount shall be distributed to the Seller's Agent on behalf of
the Seller or distributed to the Purchaser, as described below,
within five (5) business days after the Company shall file its
federal income Tax Return for the period beginning January 1,
1996 and ending on the Closing Date (but in no event later than
60 days after the Closing Date). The Escrow Agreement shall
provide that the Escrow Amount shall be distributed to the
Purchaser to the extent that all prior dividends and
distributions to Seller from the Company for payment of Taxes
with respect to the period beginning January 1, 1996 and ending
on the Closing Date (including any distributions made pursuant to
Section 5.12 of the Agreement) are greater than (i) the Company's
taxable income for such period (other than taxable income
attributable to the transactions contemplated in this Agreement
and without regard to any deductions arising as a result of the
exercise of stock options), as mutually agreed upon by Deloitte &
Touche LLP and Xxxxxx Xxxxxxxx & Co. LLP, multiplied by (ii)
42.3% (such product, the Agreed Seller Taxes ). That portion of
the Escrow Amount in excess of the amount distributable to the
Purchaser in accordance with the immediately preceding sentence
will be paid by the Escrow Agent to the Seller's Agent on behalf
of the Seller. If the amount of all prior dividends and
distributions to Seller from the Company for payment of Taxes
with respect to the period beginning January 1, 1996 and ending
on the Closing Date (including any distributions made pursuant to
Section 5.12 of the Agreement) are less than the Agreed Seller
Taxes, Purchaser shall cause the Company to pay to the Seller s
Agent on behalf of the Seller no later than the date the Escrow
Amount is paid to the Seller s Agent an amount equal to the
difference between the Agreed Seller Taxes and such prior
dividends and distributions.
Section 5.22 Subchapter S Election. Seller shall not,
and shall not cause or permit the Company to, take any action or
make any election for tax purposes that would cause the Company
not to be treated as an "S corporation" or fail to comply with
any qualification or filing procedures for treatment as an S"
corporation".
Section 5.23 Plans. Seller shall cause the Company to
take such actions, if any, as may be required and as are
reasonably satisfactory to Purchaser so that each Plan maintained
by the Company or with respect to which the Company may have any
liability or other Indebtedness provides benefits to any Person
only with respect to periods of employment of such Person solely
with the Company.
Section 5.24 Compliance with Laws and Contracts.
(a) Seller shall, and shall cause the Company to,
comply, in all material respects, with all Laws, Orders and
Contracts applicable to the Business or the operations of the
Company, and promptly following receipt thereof give Purchaser
copies of any notice received from any Governmental Entity or
other Person alleging any violation of any such Law or Order or
any Contract.
(b) The Partnership shall comply, in all material
respects, with all Laws, Orders and Contracts applicable to the
business or the operations of the Partnership, and promptly
following receipt thereof give Purchaser copies of any notice
received from any Governmental Entity or other Person alleging
any violation of any such Law or Order or any Contract affecting
or relating to the Partnership Assets.
Section 5.25 Certificate Related to Partnership
Mortgage. After the date of this Agreement and prior to the
Closing Date, within ten (10) days following the end of each
month, the Partnership shall provide to Purchaser a certificate
executed by the Partnership and each partner therein stating the
aggregate outstanding principal balance under the Partnership
Mortgage as of the end of such month, certifying that all
interest payments then due and payable have been timely paid, and
setting forth any other Indebtedness related to the Partnership
Assets (including the aggregate outstanding principal amount, and
all prepayment or other penalties or other consideration which
would be payable if such principal amounts were prepaid and the
Indebtedness terminated on the Closing Date) or certifying that
no other Indebtedness related to the Partnership Assets exists.
Section 5.26 Transactions with Affiliates. After the
date of this Agreement and prior to the Closing Date, the Seller
shall not, and shall cause the Company not to, enter into any
transaction, whether through Contract or otherwise, with any
Affiliate of the Company or any Seller, Xxxx X. Xxxxxxxx, the
Partnership or their respective Affiliates, Associates and family
members, except for performance under or pursuant to Contracts in
existence on the date hereof and set forth in Section 2.27 of the
Disclosure Schedule; and the Partnership shall not enter into any
transaction related to or affecting the Partnership Assets,
whether through Contract or otherwise, with the Company, any
Seller, Xxxx X. Xxxxxxxx or their respective Affiliates,
Associates and family members or other Affiliates of the
Partnership, except for performance under or pursuant to
Contracts in existence on the date hereof and set forth in
Section 3.12 of the Partnership Disclosure Schedule. At or prior
to the Closing, the Company shall terminate its oral agreement
with Greenville News, Inc. for management services of Xxxx X.
Xxxxxxxx.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Obligations of Purchaser.
The obligations of Purchaser to effect the transactions
contemplated by this Agreement are further subject to the
satisfaction or waiver at or prior to the Closing of the
following conditions:
(a) Each of the representations and warranties of
Seller and the Partnership in this Agreement shall be true and
correct in all respects as of the date hereof and at and as of
the Closing with the same effect as though such representations
and warranties had been made at and as of such time, other than
representations and warranties that speak as of a specific date
or time (which need only be true and correct in all respects as
of such date or time);
(b) Seller, the Partnership and the Company shall have
performed and complied with each agreement, covenant and
obligation required to be performed or complied with by them
under this Agreement at or prior to the Closing;
(c) From December 31, 1995, neither the Company nor
the Partnership Assets shall have suffered a Material Adverse
Effect;
(d) Purchaser shall have received certificates, dated
the Closing Date, from (i) the Company, as required by Section
1.6(l) and (ii) Seller, duly executed by each Seller, and the
Partnership, duly executed by each Partner, each satisfactory in
form to Purchaser, to the effect of (a), (b) and (c) above;
(e) All authorizations, Permits, consents, orders or
approvals of, or declarations or filings with, or expirations or
terminations of waiting periods (including the waiting period
under the HSR Act) imposed by any Governmental Entity, and all
third party consents (collectively, the "Authorizations")
necessary to effect the transactions contemplated by this
Agreement, shall have occurred, been filed or been obtained and
all other Authorizations ("Other Authorizations") shall have
occurred, been filed or been obtained;
(f) Notwithstanding the satisfaction of paragraph (a)
of this Section 6.1, and disregarding all materiality, dollar
limit or similar qualifications with respect to all
representations and warranties for purposes of this condition,
the aggregate breaches of the representations and warranties of
Seller or the Partnership shall not have a Material Adverse
Effect on the Company or the Partnership Assets or a Material
Adverse Effect on Purchaser's ability to own and operate the
Company's assets and properties and the Partnership Assets or
materially detract from the value of the Company's assets and
properties or the Partnership Assets;
(g) The distributions, loans and accounts receivable
referred to in Section 2.27 shall have been repaid to the Company
in accordance with Section 5.11;
(h) Purchaser shall have obtained all Governmental
Permits (whether by transfer, reissuance, modification or
otherwise) required to be obtained by it in connection with the
Partnership Assets or for the operation of the Business of the
Company as presently conducted and contemplated in this
Agreement;
(i) Seller shall have delivered or caused to be
delivered to Purchaser each of the items specified in Section 1.6
hereof and a survey of the real property listed in Section 2.11
of the Disclosure Schedule prepared to ALTA standards by a
licensed land surveyor and dated no earlier than June 1, 1996,
showing improvements on the property and showing no encroachments
or evidence that third parties have interests in or claims to the
property other than Permitted Encumbrances, and otherwise in form
and substance satisfactory to Purchaser;
(j) The Partnership shall have delivered or caused to
be delivered to Purchaser each of the items specified in Section
1.7 hereof and a survey of the real property listed in Section 1
of the Partnership Disclosure Schedule prepared to ALTA standards
by a licensed land surveyor and dated no earlier than June 1,
1996, showing the improvements on the property and showing no
encroachments or evidence that third parties have interest in or
claims to the property other than Permitted Encumbrances and each
survey otherwise in form and substance satisfactory to Purchaser;
(k) There shall not be in effect on the Closing Date
any Order or Law restraining, enjoining or otherwise prohibiting
or making illegal the consummation of any of the transactions
contemplated in this Agreement or any of the Operative Agreements
or which could reasonably be expected to otherwise result in a
material diminution of the benefits to Purchaser of the
transactions contemplated in this Agreement or any of the
Operative Agreements, and there shall not be pending or
threatened on the Closing Date any Proceeding or any other action
in, before or by any Governmental Entity which could reasonably
be expected to result in the issuance of any such Order or the
enactment, promulgation or deemed applicability to Purchaser, the
Company, the Partnership Assets or any transaction contemplated
in this Agreement or any of the Operative Agreements of any such
Law;
(l) The Company shall have delivered to Purchaser the
Closing Date Balance Sheet, the financial statements and the
certificate of the Company's chief financial officer referred to
in Section 5.14 hereof, and such certificate shall state that:
(i) the Net Working Capital is at least $7.35 million (which
amount shall include any amounts paid upon exercise of the
Options and the payment of cash surrender values for insurance
policies, as described in Section 5.1(d) above) less any amount
by which Indebtedness then outstanding is less than $29.4
million, (ii) the Indebtedness then outstanding (plus premiums
and penalties upon prepayment of such Indebtedness and any
negative cash balance) is not greater than $29.4 million, (iii)
the Net Worth is at least $14.0 million, and (iv) EBITDA for the
twelve months then ended is at least $8.4 million;
(m) Purchaser shall have received from the Company
projections of EBITDA for the twelve months ended December 31,
1996 based on actual financial results through June 30, 1996 and
as forecasted for the remainder of the period, together with a
statement of assumptions on which such forecast was based, and
such projected EBITDA shall be greater than $8.4 million, and
Purchaser shall be satisfied that the assumptions used in
preparing the forecast were reasonable and proper and took into
account all relevant factors and considerations;
(n) The Partnership shall have delivered to Purchaser
the certificates referred to in Section 5.25 hereof, and the most
recent such certificate shall state that the Partnership Mortgage
has an aggregate outstanding principal balance plus all
prepayment penalties and accrued interest of no more than $3.1
million;
(o) Purchaser shall be satisfied that neither
consummation of the purchase of the Shares or the Partnership
Assets nor the other transactions contemplated in this Agreement
or any of the Operative Agreements nor Purchaser's ownership of
the Company or the Partnership Assets shall (i) prevent, impede
or restrict Purchaser or the Company from fully and freely
providing continued and uninterrupted performance under and
otherwise fulfilling all obligations under, and receiving the
benefits of, any Contracts to which the Company is a party, (ii)
impair, interfere with or terminate the Company's business
relationship with the customers listed in Section 2.26 of the
Disclosure Schedule or suppliers listed in Section 2.26 of the
Disclosure Schedule; and
(p) Purchaser shall have completed its due diligence
with respect to environmental matters and shall be satisfied with
the results of such environmental assessments and other
environmental due diligence;
(q) Purchaser shall be satisfied that the customer
listed as number 1 in Section 2.26 of the Disclosure Schedule
will continue as a customer following the Closing Date on the
same or better terms as exist on the date hereof;
(r) Purchaser shall have received satisfactory
assurances that the Contract with the customer listed as number 3
in Section 2.26 of the Disclosure Schedule will continue in place
with no change in terms following the Closing Date and such
Contract will not be terminated, canceled or modified in any
respect by such customer;
(s) Purchaser shall have received satisfactory
assurance that the existing business relationship between the
Company and other business ventures of Xxxx X. Xxxxxxxx shall
continue after the Closing Date on terms at least as favorable to
the Company as exist on the date of this Agreement, other than
the oral contract with Greenville News, Inc. for management
services of Xxxx X. Xxxxxxxx, which shall be terminated effective
at or prior to the Closing; and
(t) Purchaser shall have received satisfactory
evidence of the exercise of the Options, and the receipt by the
Company in cash of the consideration payable upon exercise of the
Options, with respect to any Options that have been exercised,
and Purchaser shall have received satisfactory evidence that the
remaining Options either have been canceled or, with respect to
Options to purchase up to an aggregate of 35 shares of Common
Stock, that such Options will be exchanged for options to
purchase shares of Big Flower common stock.
Section 6.2 Conditions to Obligations of Seller and
the Partnership. The obligations of Seller and the Partnership
to effect the transactions contemplated by this Agreement are
further subject to the satisfaction or waiver at or prior to the
Closing of the following conditions:
(a) The representations and warranties of Purchaser in
this Agreement shall be true and correct in all respects as of
the date hereof and at and as of the Closing with the same effect
as though such representations and warranties had been made at
and as of such time, other than representations and warranties
that speak as of a specific date or time (which need only be true
and correct in all respects as of such date or time);
(b) Purchaser shall have performed all obligations
required to be performed by it under this Agreement at or prior
to the Closing;
(c) Seller and the Partnership shall have received
from Purchaser a certificate, dated the Closing Date, fully
executed by a duly authorized officer of Purchaser, satisfactory
in form to Seller, to the effect of (a) and (b) above;
(d) There shall not be in effect on the Closing Date
any Order or Law that became effective after the date of this
Agreement restraining, enjoining or otherwise prohibiting or
making illegal the consummation of any of the transactions
contemplated in this Agreement or any of the Operative Documents;
(e) All Authorizations necessary for Purchaser to
effect the transactions contemplated in this Agreement shall have
occurred, been filed or been obtained by it; and
(f) Purchaser shall have delivered or caused to be
delivered to Seller or the Partnership, as applicable, each of
the items specified in Section 1.8 hereof.
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Agreement may be
terminated, and the transactions contemplated herein may be
abandoned:
(a) at any time before the Closing, by mutual written
agreement of Seller, the Partnership and Purchaser;
(b) at any time before the Closing, by Seller or the
Partnership, on the one hand, or Purchaser, on the other hand, in
the event (i) of a material breach hereof by the non-terminating
party if such non-terminating party fails to cure such breach
within five (5) business days following notification thereof by
the terminating party or (ii) upon notification to the non-
terminating party by the terminating party that the satisfaction
of any condition to the terminating party's obligations under
this Agreement becomes impossible or impracticable with the use
of commercially reasonable efforts if the failure of such
condition to be satisfied is not caused by a breach hereof by the
terminating party; or
(c) at any time after the third-month anniversary of
the date of this Agreement, by Seller, the Partnership or
Purchaser upon notification of the non-terminating parties by the
terminating party if the Closing shall not have occurred on or
before such date and such failure to consummate is not caused by
a breach of this Agreement by the terminating party.
Section 7.2 Effect of Termination. If this Agreement
is validly terminated pursuant to Section 7.1, this Agreement
will forthwith become null and void, and there will be no
liability or obligation on the part of Seller, the Partnership or
Purchaser (or any of their respective officers, directors,
employees, partners, agents or other representatives or
Affiliates), except as provided in the next succeeding sentence
and except that the provisions with respect to expenses in
Section 5.10 and confidentiality in Section 5.3 and 5.4 will
continue to apply following any such termination.
Notwithstanding any other provision in this Agreement to the
contrary, upon termination of this Agreement pursuant to Section
7.1(b) or (c), Seller and the Partnership, as applicable, will
remain liable to Purchaser for any breach of this Agreement by
Seller or the Partnership, as applicable, existing at the time of
such termination, and Purchaser will remain liable to Seller for
any breach of this Agreement by Purchaser existing at the time of
such termination, and Seller and the Partnership, as applicable
or Purchaser may seek such remedies, including damages and fees
of attorneys, against the other with respect to any such breach
as are provided in this Agreement or as are otherwise available
at law or in equity; provided, however, that no party shall have
any liability to another party if the Agreement is terminated
pursuant to such Sections 7.1(b) or (c) as a result of the
unintentional breach of the Agreement by a party.
ARTICLE VIII
SURVIVAL; INDEMNIFICATION
Section 8.1 Survival Periods. All representations and
warranties of the Seller or Partnership contained in this
Agreement, the Disclosure Schedule, the Partnership Disclosure
Schedule, or any certificate or document delivered in connection
herewith shall survive the Closing and shall apply with respect
to claims asserted in writing within three years from the Closing
Date, provided that the representations and warranties set forth
in Sections 2.1, 2.2, 2.3, 2.4, 2.13, 2.24, 3.1, 3.2, 3.3, 3.4,
3.5 and 3.14 shall survive the Closing indefinitely and those set
forth in Sections 2.19, 2.20, 2.21, and 3.6 shall survive the
Closing and shall apply to claims asserted in writing prior to
the expiration of any applicable statutes of limitations. The
covenants and agreements of the parties hereto shall survive the
Closing. For purposes of this Agreement, the representations and
warranties of Seller contained herein shall be deemed to include
the Disclosure Schedule and the representations and warranties of
the Partnership contained herein shall be deemed to include the
Partnership Disclosure Schedule. Rights of an Indemnified Party
to indemnification shall not be limited or affected in any way by
any pre-Closing investigation by Purchaser or such Indemnified
Party or actual knowledge of any inaccuracy of the
representations and warranties of Seller or the Partnership.
Section 8.2 Indemnification.
(a) Subject to paragraph (c) of this Section, Sellers
shall jointly and severally indemnify Purchaser and its officers,
directors, employees, agents and Affiliates in respect of, and
hold each of them harmless from and against, any Loss suffered,
incurred or sustained by any of them or to which any of them
becomes subject, resulting from, arising out of or relating to
any (x) inaccuracy in or breach of any representation or
warranty, (y) nonfulfillment of or failure to perform any
covenant or agreement on the part of Seller contained in this
Agreement (determined without giving effect to any "Material
Adverse Effect" qualification or any other materiality, dollar
limit or similar qualification contained in the representation,
warranty, covenant or agreement) or (z) (1) failure of the
Company to take all reasonable measures and precautions necessary
or appropriate to protect and maintain the confidentiality and
secrecy of any material Intellectual Property or Business Know-
How, except with respect to Intellectual Property and Business
Know-How that is known by or available to the public generally or
to a competitor of the Company, as of the date of this Agreement
or thereafter, other than as a result of the Company s failure to
take such reasonable measures or precautions to protect and
maintain its confidentiality and secrecy, (2) costs in excess of
those set forth in connection with items 14 through 19 in Section
2.12 of the Disclosure Schedule unless with respect to any such
item the costs thereof in excess of that set forth in the
Disclosure Schedule have been properly reflected in the Financial
Statements, (3) failure to obtain consents or provide notices
that may be required under items 14 through 19 in Section 2.12 of
the Disclosure Schedule in connection with the purchase of the
Shares or the transactions contemplated in this Agreement or (4)
encroachment by the Company existing at the Closing Date into
easements held by third parties and encroachments by others
existing at the Closing Date, in each case as reflected on the
surveys delivered pursuant to Sections 6.1(i) and (j) of this
Agreement. Sellers acknowledge that the Financial Statements
have and will be included in filings by Big Flower Press
Holdings, Inc. ("Big Flower") pursuant to the Securities Act of
1933, as amended, and pursuant to the Securities Exchange Act of
1934, as amended. Accordingly, the indemnity with respect to any
breach of the representation set forth in Section 2.6 shall
include any Loss suffered by Big Flower, and its directors,
officers, employees and Affiliates resulting from, arising out of
or relating to inclusion of such Financial Statements in such
filings.
(b) Subject to paragraph (c) of this Section, the
Partnership and the Partners shall jointly and severally
indemnify Purchaser and its officers, directors, employees,
agents and Affiliates in respect of, and hold each of them
harmless from and against, any Loss suffered, incurred or
sustained by any of them or to which any of them becomes subject,
resulting from, arising out of or relating to any (x) inaccuracy
in or breach of any representation or warranty or (y)
nonfulfillment of or failure to perform any covenant or agreement
on the part of the Partnership or any partner therein contained
in this Agreement (determined without giving effect to any
"Material Adverse Effect" qualification or any other materiality,
dollar limit or similar qualification contained in the
representation, warranty, covenant or agreement).
(c) The indemnification obligations contained in
Section 5.21(b) as to Taxes other than federal income Taxes and
Sections 8.2(a)(x), 8.2(a)(z), 8.2(b)(x), 8.4 and 8.5 shall be
subject to the following limitations: (i) no Indemnified Party
shall have any right to indemnification for any single claim for
Losses arising under Section 5.21(b) as to Taxes other than
federal income Taxes or Sections 8.2(a)(x), 8.2(a)(z), 8.2(b)(x),
8.4 or 8.5 of less than $5,000 ("De Minimis Claims"); (ii) no
Indemnified Party shall have any right to indemnification unless
the aggregate of all claims for Losses of all Indemnified Parties
(excluding De Minimis Claims) arising under Section 5.21(b) as to
Taxes other than federal income Taxes or Sections 8.2(a)(x),
8.2(a)(z), 8.2(b)(x), 8.4 or 8.5 exceeds $150,000, in which case
the Indemnified Parties will be entitled to indemnification with
respect to all of such claims (other than the De Minimis Claims),
including claims with respect to the first $150,000; and (iii)
the maximum liability of Sellers, the Partnership and the
Partners for indemnification pursuant to Section 5.21(b) as to
Taxes other than federal income Taxes or Sections 8.2(a)(x),
8.2(a)(z), 8.2(b)(x), 8.4 and 8.5 shall be limited as follows:
(x) the maximum liability for such indemnification of each of
Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxxx, Xxx Xxxxxxxx and Xxxxxxx
Xxxxxxxx (collectively Group A ) as Seller or as Partner shall
not exceed 50% of the amounts as set forth opposite their names,
respectively, on Exhibit K. hereof, and (y) the maximum joint and
several aggregate liability for such indemnification of the
Sellers and the Partners other than Group A shall not exceed the
greater of $15.7 million and the amount of the Shares Purchase
Price and the Assets Purchase Price received by the Sellers and
Partners other than Group A. The limitations contained in clause
(iii) of the immediately preceding sentence shall not limit or
affect in any manner any right or obligation which any Seller,
the Partnership or any Partner may have with respect to seeking
contribution from any other Seller, the Partnership and any other
Partner with respect to the indemnification obligations in this
Agreement.
Section 8.3 Method of Asserting Claims. All claims
for indemnification by any Indemnified Party under Sections 5.21,
8.2, 8.4 and 8.5, subject to the provisions of Section 5.21 with
respect to claims for indemnification related to Taxes, will be
asserted and resolved as follows:
(a) In the event any claim or demand in respect of
which an Indemnified Party might seek indemnity under Sections
5.21, 8.2, 8.4 and 8.5, is asserted against or sought to be
collected from such Indemnified Party by a Person other than
Purchaser or any Affiliate of Purchaser (a "Third Party Claim"),
the Indemnified Party shall deliver a Claim Notice with
reasonable promptness to the Indemnifying Party. If the
Indemnified Party fails to provide the Claim Notice with
reasonable promptness after the Indemnified Party receives notice
of such Third Party Claim, the Indemnifying Party shall not be
obligated to indemnify the Indemnified Party with respect to such
Third Party Claim to the extent that the Indemnifying Party
demonstrates that its ability to defend such Third Party Claim
has been irreparably prejudiced by such failure of the
Indemnified Party. The Indemnifying Party shall notify the
Indemnified Party as soon as practicable within the Dispute
Period whether the Indemnifying Party disputes its liability to
the Indemnified Party under Sections 5.21, 8.2, 8.4 or 8.5, and
whether the Indemnifying Party desires, at its sole cost and
expense, to defend the Indemnified Party against such Third Party
Claim.
(i) If the Indemnifying Party notifies the
Indemnified Party within the Dispute Period that the
Indemnifying Party desires to defend the Indemnified
Party with respect to the Third Party Claim pursuant to
this Section 8.3(a), then the Indemnifying Party shall
have the right to defend, with counsel reasonably
satisfactory to the Indemnified Party, at the sole cost
and expense of the Indemnifying Party, such Third Party
Claim by all appropriate Proceedings, which Proceedings
will be vigorously and diligently prosecuted by the
Indemnifying Party to a final conclusion or may be
settled at the discretion of the Indemnifying Party;
provided, however, that the Indemnifying Party shall
not be permitted to effect any settlement without the
written consent of the Indemnified Party unless (i) the
sole relief provided in connection with such settlement
is monetary damages that are paid in full by the
Indemnifying Party, (ii) such settlement involves no
finding or admission of any violation or breach by any
Indemnified Party of any right of any other Person or
any Laws, Contracts, or Governmental Permits, and
(iii) such settlement has no effect on any other claims
that may be made against any Indemnified Party. The
Indemnifying Party shall have full control of such
defense and Proceedings, including any compromise or
settlement thereof (except as provided in the preceding
sentence); provided, however, that the Indemnified
Party may, at the sole cost and expense of the
Indemnified Party, at any time prior to the
Indemnifying Party's delivery of the notice referred to
in the first sentence of this clause (i), file any
motion, answer or other pleadings or take any other
action that the Indemnified Party reasonably believes
to be necessary or appropriate to protect its
interests; and provided further, that if requested by
the Indemnifying Party, the Indemnified Party will, at
the sole cost and expense of the Indemnifying Party,
provide reasonable cooperation to the Indemnifying
Party in contesting any Third Party Claim that the
Indemnifying Party elects to contest. The Indemnified
Party may participate in, but not control, any defense
or settlement of any Third Party Claim controlled by
the Indemnifying Party pursuant to this clause (i) and
except as provided in the preceding sentence, the
Indemnified Party will bear its own costs and expenses
with respect to such participation. Notwithstanding
the foregoing, the Indemnified Party may take over the
control of the defense or settlement of a Third Party
Claim at any time if it irrevocably waives its right to
indemnity under Sections 5.21, 8.2, 8.4 or 8.5, as the
case may be, with respect to such Third Party Claim.
(ii) If the Indemnifying Party fails to notify the
Indemnified Party within the Dispute Period that the
Indemnifying Party desires to defend the Third Party
Claim pursuant to Section 8.3(a), or if the
Indemnifying Party gives such notice but fails to
prosecute vigorously and diligently or settle the Third
Party Claim, or if the Indemnifying Party fails to give
any notice whatsoever within the Dispute Period, then
the Indemnified Party will have the right to defend, at
the sole cost and expense of the Indemnifying Party,
the Third Party Claim by all appropriate Proceedings,
which Proceedings will be prosecuted by the Indemnified
Party in a reasonable manner and in good faith or will
be settled at the discretion of the Indemnified Party
(with the consent of the Indemnifying Party, which
consent will not be unreasonably withheld). Subject to
the immediately preceding sentence, the Indemnified
Party will have full control of such defense and
Proceedings, including any compromise or settlement
thereof; provided, however, that if requested by the
Indemnified Party, the Indemnifying Party will, at the
sole cost and expense of the Indemnifying Party,
provide reasonable cooperation to the Indemnified Party
and its counsel in contesting any Third Party Claim
which the Indemnified Party is contesting.
Notwithstanding the foregoing provisions of this clause
(ii), if the Indemnifying Party has notified the
Indemnified Party within the Dispute Period that the
Indemnifying Party disputes its liability hereunder to
the Indemnified Party with respect to such Third Party
Claim and if such dispute is resolved in favor of the
Indemnifying Party in the manner provided in clause
(iii) below, the Indemnifying Party will not be
required to bear the costs and expenses of the
Indemnified Party's defense pursuant to this clause
(ii) or of the Indemnifying Party's participation
therein at the Indemnified Party's request, and the
Indemnified Party will reimburse the Indemnifying Party
in full for all reasonable costs and expenses incurred
by the Indemnifying Party in connection with such
litigation. The Indemnifying Party may participate in,
but not control, any defense or settlement controlled
by the Indemnified Party pursuant to this clause (ii),
and the Indemnifying Party will bear its own costs and
expenses with respect to such participation.
(iii) If the Indemnifying Party notifies the
Indemnified Party that it does not dispute its
liability to the Indemnified party with respect to a
Third Party Claim under Sections 5.21, 8.2, 8.4 or 8.5,
as the case may be, or fails to notify the Indemnified
Party within the Dispute Period whether the
Indemnifying Party disputes its liability to the
Indemnified Party with respect to such Third Party
Claim, the Loss in the amount specified in the Claim
Notice will be conclusively deemed a liability of the
Indemnifying Party under Sections 5.21, 8.2, 8.4 or
8.5, as the case may be, and the Indemnifying Party
shall pay the amount of such Loss to the Indemnified
Party on demand. If the Indemnifying Party has timely
disputed its liability with respect to such claim, the
Indemnifying Party and Indemnified Party will dispute,
and if not resolved through negotiations within the
Resolution Period, such dispute shall be resolved by
litigation in a court of competent jurisdiction.
(b) In the event any Indemnified Party should have a
claim under Sections 5.21, 8.2, 8.4 or 8.5 against any
Indemnifying Party that does not involve a Third Party Claim, the
Indemnified Party shall deliver an Indemnity Notice with
reasonable promptness to the Indemnifying Party. The failure by
any Indemnified Party to give the Indemnity Notice shall not
impair such party's rights hereunder except to the extent that an
Indemnifying Party demonstrates that it has been irreparably
prejudiced thereby. If the Indemnifying Party notifies the
Indemnified Party that it does not dispute the claim described in
such Indemnity Notice or fails to notify the Indemnified Party
within the Dispute Period whether the Indemnifying Party disputes
the claim described in such Indemnity Notice, the Loss in the
amount specified in the Indemnity Notice will be conclusively
deemed a liability of the Indemnifying Party under Sections 5.21,
8.2, 8.4 or 8.5 and the Indemnifying Party shall pay the amount
of such Loss to the Indemnified Party on demand. If the
Indemnifying Party has timely disputed its liability with respect
to such claim, the Indemnifying Party and the Indemnified Party
will proceed in good faith to negotiate a resolution of such
dispute, and if not resolved through negotiations within the
Resolution Period, such dispute shall be resolved by litigation
in a court of competent jurisdiction.
(c) In the event of any Loss resulting from a
misrepresentation or breach of warranty contained in this
Agreement as to which an Indemnified Party would be entitled to
claim indemnity under Sections 5.21, 8.2(a), 8.2(b), 8.4 or 8.5
but for the provisions of Section 8.2(c)(ii), such Indemnified
Party may nevertheless deliver a written notice to the
Indemnifying Party containing the information that would be
required in a Claim Notice or an Indemnity Notice, as applicable,
with respect to such Loss. If the Indemnifying Party notifies the
Indemnified Party that it does not dispute the claim described
therein or fails to notify the Indemnified Party within the
Dispute Period whether the Indemnifying Party disputes the claim
described in such Claim Notice or Indemnity Notice, as the case
may be, the Loss specified in the notice will be conclusively
deemed to have been incurred by the Indemnified Party for
purposes of making the determination set forth in Section
8.2(c)(ii). If the Indemnifying Party has timely disputed the
claim described in such Claim Notice or Indemnity Notice, as the
case may be, the Indemnifying Party and the Indemnified Party
will proceed in good faith to negotiate a resolution of such
dispute, and if not resolved through negotiations within the
Resolution Period, such dispute shall be resolved by litigation
in a court of competent jurisdiction or such other methods as the
parties may agree to in writing.
Section 8.4 Seller's Environmental Indemnity.
Notwithstanding any other provision of this Agreement (other than
Section 8.2(c)), including the general indemnity provisions and
limitations set forth elsewhere in this Article VIII, Sellers
jointly and severally shall indemnify Purchaser and its officers,
directors, employees, agents and Affiliates in respect of, and
hold each of them harmless from and against, any Loss suffered,
incurred or sustained by any of them or to which any of them
become subject, resulting from, arising out of or relating to any
Environmental Claim resulting from, arising out of or relating
to:
(i) any inaccuracy in or breach of any
representation or warranty contained in Section 2.21;
(ii) the failure of the Company to have complied
prior to the Closing Date with applicable Environmental
Laws, whether or not such failure is disclosed in or
pursuant to this Agreement or is known or unknown on
the Closing Date;
(iii) the Release, threatened Release or
presence of any Contaminant at, on or beneath any
current or former Company Property (whether or not
owned or leased by the Company), or at any other
property to which wastes or substances generated by the
Company were sent for treatment or disposal, or were
otherwise Released, in each case prior to the Closing
Date, whether or not such Release, threatened Release
or presence is disclosed in or pursuant to this
Agreement or is known or unknown on the Closing Date;
or
(iv) the ownership, operation or condition at any
time on or before the Closing Date of any Company
Property or the conduct of the Business by the Company
at any time before the Closing Date.
Section 8.5 The Partnership's Environmental Indemnity.
Notwithstanding any other provision of this Agreement (other than
Section 8.2(c)), including the general indemnity provisions and
limitations set forth elsewhere in this Article VIII, the
Partnership and the partners therein jointly and severally shall
indemnify Purchaser and its officers, directors, employees,
agents and Affiliates in respect of, and hold each of them
harmless from and against, any Loss suffered, incurred or
sustained by any of them or to which any of them become subject,
resulting from, arising out of or relating to any Environmental
Claim resulting from, arising out of or relating to:
(i) any inaccuracy in or breach of any
representation or warranty contained in Section 3.6;
(ii) the failure of the Partnership to have
complied prior to the Closing Date with applicable
Environmental Laws, whether or not such failure is
disclosed in or pursuant to this Agreement or is known
or unknown on the Closing Date;
(iii) the Release, threatened Release or
presence of any Contaminant at, on or beneath any
current or former Partnership property (whether or not
owned or leased by the Partnership), or at any other
property to which wastes or substances generated by the
Partnership were sent for treatment or disposal, or
were otherwise Released, in each case prior to the
Closing Date, whether or not such Release, threatened
Release or presence is disclosed in or pursuant to this
Agreement or is known or unknown on the Closing Date;
or
(iv) the ownership, operation or condition at any
time on or before the Closing Date of any Partnership
Asset or any real or personal property, plant,
building, facility, structure, underground storage
tank, equipment or unit, or other asset owned, leased
or operated by the Partnership (including any surface
water thereon or adjacent thereto, and soil or
groundwater thereunder).
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices. All notices and other
communications hereunder shall be in writing and shall be deemed
given upon receipt if delivered personally, telecopied (which
telecopy is confirmed) or mailed by registered or certified mail
(return receipt requested) or the next day if by overnight
delivery service to the parties at the following addresses (or at
such other address for a party as shall be specified by like
notice):
(a) if to Purchaser, to:
Treasure Chest Advertising Company, Inc.
000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Senior Vice President - Legal
Affairs
With a copy to
Big Flower Press Holdings, Inc.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Associate General Counsel
with a copy to:
Sidley & Austin
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
and:
(b) if to Seller to:
Xxxx X. Xxxxxxxx
The Greenville News
000 Xxxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Xxxxx Xxxxxxxxx
Xxx Xxxxxxxx
Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxxx
c/o Xxxxx Xxxxxxxxx
PrintCo., Inc.
0000 Xxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
with a copy to:
Xxxxx & Xxxxx
000 Xxxxxx Xx., X.X., Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxx, Esq.
Section 9.2 Descriptive Headings. The descriptive
headings herein are inserted for convenience only and are not
intended to be part of or to affect the meaning or interpretation
of this Agreement.
Section 9.3 Counterparts. This Agreement may be
executed in two or more counterparts, all of which shall be
considered one and the same agreement.
Section 9.4 Entire Agreement; Assignment. This
Agreement, including the appendices, annexes and exhibits hereto
and the, documents, schedules (including, without limitation, the
Disclosure Schedule, the Partnership Disclosure Schedule and the
Purchaser Disclosure Schedule), certificates and instruments
referred to herein, constitute the entire agreement, and
supersede all prior agreements and understandings, both written
and oral, including without limitation the letter dated June 6,
1996 from Big Flower Press Holdings, Inc. to the Company, among
the parties with respect to the subject matter hereof. This
Agreement shall not be assigned by operation of Law or otherwise,
provided that (a) TCA may assign all its rights and obligations
under this Agreement to any direct or indirect wholly owned
subsidiary of TCA, (b) Purchaser may assign or pledge its rights
under this Agreement, and (c) Purchaser's rights under Article
VIII may be assigned after the Closing in connection with a sale
of substantially all the assets of the Company or Purchaser.
Section 9.5 Amendment. This Agreement may be amended
at any time by the parties hereto, but only by an instrument in
writing signed by each of the parties hereto.
Section 9.6 Extensions; Waiver. At any time prior to
the Closing, the parties hereto may (i) extend the time for the
performance of any of the obligations or other acts of the
parties hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein or in any
document delivered pursuant hereto and (iii) waive compliance
with any of the covenants, agreements or conditions contained
herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in a written
instrument signed by such party.
Section 9.7 Governing Law. This Agreement shall be
governed and construed in accordance with the laws of the State
of New York, without regard to any applicable principles of
conflicts of law except that Section 9.11 shall be governed and
construed in accordance with the laws of the State of Michigan
without regard to any applicable principles of the conflicts of
law.
Section 9.8 Specific Performance. The parties hereto
agree that if any of the provisions of this Agreement were not
performed in accordance with their specific terms or were
otherwise breached, irreparable damage would occur, no adequate
remedy at law would exist and damages would be difficult to
determine, and that the parties shall be entitled to specific
performance of the terms hereof, in addition to any other remedy
at law or equity.
Section 9.9 Parties in Interest. This Agreement shall
be binding upon and inure solely to the benefit of each party
hereto, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other Person or Persons any
rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement
Section 9.10 Severability. This Agreement shall be
deemed severable; the invalidity or unenforceability of any term
or provision of this Agreement shall not affect the validity or
enforceability of this Agreement or of any other term hereof,
which shall remain in full force and effect.
Section 9.11 Consent to Service of Process. Seller,
the Partnership and Purchaser each hereby irrevocably submit to
the jurisdiction of the Federal District Court for the Western
District of Michigan in respect of any suit, action or proceeding
arising out of or relating to this Agreement, and irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, jurisdiction of the aforesaid courts. Seller,
the Partnership and Purchaser each irrevocably waives, to the
fullest extent such party may effectively do so under applicable
law, trial by jury and any objection that such party may now or
hereafter have to the laying of venue of any such suit, action or
proceeding brought in any such court and any claim that any such
suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. Nothing herein shall affect
the right of any party hereto to serve process in any manner
permitted by law or to commence legal proceedings or otherwise
proceed against the other party in any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by their respective officers thereunto
duly authorized as of the date first written above.
PURCHASER
TREASURE CHEST ADVERTISING
COMPANY, INC.
By:-----------------------------
Name: Xxxx X. Xxxxxxxx
Title: General Counsel
and Secretary
SELLERS
XXXX X. XXXXXXXX LIVING TRUST
u/a dated December 7, 1983, as
amended
By:-----------------------------
Xxxx X. Xxxxxxxx, co-Trustee
By:-----------------------------
Xxxxx X. Xxxxxxxx, co-Trustee
XXXXX X. XXXXXXXX LIVING TRUST
u/a dated December 7, 1983, as amended
By:-----------------------------
Xxxxx X. Xxxxxxxx, co-Trustee
By:-----------------------------
Xxxx X. Xxxxxxxx, co-Trustee
JBS-MDS IRREVOCABLE TRUST
u/a dated December 29, 1976
By:-----------------------------
Xxx X. Xxxxxxx, Trustee
JBS-XXX IRREVOCABLE TRUST
u/a dated December 29, 1976
By:-----------------------------
Xxx X. Xxxxxxx, Trustee
JBS-RJS IRREVOCABLE TRUST
u/a dated December 29, 1976
By:-----------------------------
Xxx X. Xxxxxxx, Trustee
JBS-MDS IRREVOCABLE TRUST NO. 2
u/a dated December 31, 1980
By:-----------------------------
Xxx X. Xxxxxxx, Trustee
JBS-XXX IRREVOCABLE TRUST NO. 2
u/a dated December 31, 1980
By:-----------------------------
Xxx X. Xxxxxxx, Trustee
JBS-RJS IRREVOCABLE TRUST NO. 2
u/a dated December 31, 1980
By:-----------------------------
Xxx X. Xxxxxxx, Trustee
--------------------------------
Xxxxx Xxxxxxxxx
--------------------------------
Xxxxxxx Xxxxxxxxx
--------------------------------
Xxx Xxxxxxxx
--------------------------------
Xxxxxxx Xxxxxxxx
PARTNERSHIP
PARK PROPERTIES
By:-----------------------------
, a
Partner
PARTNERS IN PARTNERSHIP
--------------------------------
Xxxx X. Xxxxxxxx
--------------------------------
Xxxxx Xxxxxxxxx
--------------------------------
Xxxxxxx Xxxxxxxxx
--------------------------------
Xxx Xxxxxxxx
--------------------------------
Xxxxxxx Xxxxxxxx
BCK96A03.WPN (10/11/96 10:44am)
EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
"Acquisition Transaction" has the meaning set forth in
Section 5.8.
"Affiliate" means any Person that directly, or
indirectly through one or more intermediaries, controls or is
controlled by or is under common control with the Person
specified. For purposes of this definition, control of a Person
means the power, direct or indirect, to direct or cause the
direction of management and policies of such Person whether by
Contract or otherwise and, in any event and without limitation of
the previous sentence, any Person owning ten percent (10%) or
more of the voting securities of another Person shall be deemed
to control that Person. For purposes of this Agreement, prior to
the Closing, the Partnership shall be considered an Affiliate of
the Company and each Seller.
"Aggregate Deemed Sale Price" has the meaning set forth
in Section 5.21(a)(iii).
Agreed Seller Taxes has the meaning set forth in
Section 5.21(f).
"Agreement" means this Purchase Agreement and the
exhibits, the Disclosure Schedule, the Partnership Disclosure
Schedule, the Purchaser Disclosure Schedule and any other
schedules hereto and the certificates delivered in accordance
this Purchase Agreement, as the same shall be amended from time
to time.
"Assets Purchase Price" has the meaning set forth in
Section 1.3(c).
"Associates" means with respect to any Person (i) a
corporation, partnership or other organization of which such
Person is an officer or partner or is, directly or indirectly,
the beneficial owner of 10 percent or more of any class of equity
securities, (ii) any trust or other estate in which such Person
has a beneficial interest or as to which such Person serves as
trustee or in a similar fiduciary capacity or is the settlor (or,
if such Person is a trust or other estate, any beneficiary,
trustee or similar fiduciary or settlor of such trust or estate),
and (iii) any relative or spouse of such Person, or any relative
of such spouse, who has the same home as such Person or who is a
director or officer of the Person or any of its parents or
subsidiaries.
"Authorizations" has the meaning set forth in Section
6.1(e).
"Balance Sheet" has the meaning set forth in Section
2.6.
"Big Flower" has the meaning set forth in Section
8.2(a).
"Xxxx of Sale and Assignment" shall mean the xxxx of
sale and assignment executed by the Partnership to transfer,
convey and sell to Purchaser good, valid and marketable title in
and those Partnership Assets that do not constitute real property
or improvements thereon transferred by the Warranty Deed.
"Books and Records" has the meaning set forth in
Section 2.5.
"Budget" has the meaning set forth in Section 5.1(d).
"Business" has the meaning set forth in Section 2.1.
"Business Know-How" has the meaning set forth in
Section 2.14.
"Cash Equivalents" mean (i) securities issued or
directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having
maturities of not more than six months from the date of
determination, (ii) certificates of deposit and Eurodollar time
deposits with maturities of six months or less from the date of
determination, bankers' acceptances with maturities not exceeding
six months and overnight bank deposits, (iii) repurchase
obligations with a term of not more than seven days for
underlying securities of the types described in clauses (i) and
(ii) above, and (iv) commercial paper having the highest rating
obtainable from Xxxxx'x Investors Service or Standard & Poor's
and in each case maturing within six months from the date of
determination.
"CERCLA" has the meaning set forth in Section 2.21(n).
"Claim Notice" means written notification by an
Indemnified Party to an Indemnifying Party, pursuant to Section
8.3(a), of a Third Party Claim as to which indemnity under
Sections 5.21, 8.2, 8.4 or 8.5 is sought by such Indemnified
Party, enclosing a copy of all papers served, if any, and
specifying the nature of and basis for such Third Party Claim and
for such Indemnified Party's claim against such Indemnifying
Party under Sections 5.21, 8.2, 8.4 or 8.5, as the case may be,
together with the amount or, if not then reasonably
ascertainable, the estimated amount, determined in good faith, of
such Third Party Claim.
"Closing" has the meaning set forth in Section 1.5.
"Closing Date" has the meaning set forth in Section
1.5.
"Closing Date Balance Sheet" has the meaning set forth
in Section 5.14.
"Code" has the meaning set forth in Section 2.19(d).
"Common Stock" has the meaning set forth in the
forepart of this Agreement.
"Company" has the meaning set forth in the forepart of
this Agreement.
"Company Lease" shall mean the Lease dated September 1,
1993 by which the Company leases that certain real estate located
at 0000 Xxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx, which
constitutes a Partnership Asset.
"Company Property" has the meaning set forth in Section
2.21(n).
"Contaminant" has the meaning set forth in Section
2.21(n).
"Contract" has the meaning set forth in Section 2.15.
"De Minimis Claims" has the meaning set forth in
Section 8.2(c).
"Disclosure Schedule" shall mean the schedule (dated as
of the date of the Agreement) delivered to Purchaser by Sellers.
"Dispute Period" means the period ending thirty (30)
days following receipt by an Indemnifying Party of either a Claim
Notice or an Indemnity Notice.
"EBITDA" shall mean, with respect to any fiscal
period, the net earnings (or loss) before net interest expense,
provision for income taxes, depreciation and amortization expense
for such fiscal period, as determined in accordance with GAAP and
as reflected on the financial statements and certificates of the
Company supplied to Purchaser pursuant to this Agreement, but for
purposes of this Agreement, before (i) any LIFO adjustment and
(ii) to the extent such costs and expenses are eliminated as a
result of the transactions contemplated herein (A) net management
fees payable to any Affiliate of the Company and (B) annual
rental expenses incurred related to the Partnership Assets.
"Elections" has the meaning set forth in Section
5.21(a).
"Encumbrance" has the meaning set forth in Section 2.9.
"Environment" has the meaning set forth in Section
2.21(n).
"Environmental Claim" shall mean any inquiry, request
for information, threat, demand, order (whether judicial or
administrative), report of observations, notice of violation,
claim, action, cause of action, investigation or notice (written
or oral) by any Governmental Entity or other Person alleging
liability or potential liability under any Environmental Law,
including, without limitation, potential liability for
investigatory costs, Remedial Action, natural resources damages,
property damages, personal injuries or penalties, or any other
costs or expenses, including reasonable attorney's fees.
"Environmental Encumbrance" has the meaning set forth
in Section 2.21(n).
"Environmental Laws" has the meaning set forth in
Section 2.21(n).
"ERISA" has the meaning set forth in Section 2.19(a).
"ERISA Affiliate" has the meaning set forth in Section
2.19(f).
"ERISA Benefit Plans" has the meaning set forth in
Section 2.19(a).
"Escrow Agent" shall mean Bankers Trust Company.
"Escrow Agreement" has the meaning set forth in Section
5.18.
"Escrow Amount" has the meaning set forth in Section
1.3(a).
"Estoppel Certificates" shall mean the written
certificate, issued not more than thirty (30) days prior to the
Closing Date by a lessor, sublessor or other party to a lease or
occupancy agreement, stating (a) that such lease or occupancy
agreement is (i) in full force and effect and (ii) has not been
modified or amended except as described therein, (b) the date to
which rental has been paid, (c) that no default or event of
default exists thereunder and (d) that to the knowledge of the
issuer thereof after due investigation, no event has occurred
that, with the giving of notice or lapse of time or both, would
be a default or event of default thereunder.
"Excluded Assets" shall mean the assets of the
Partnership that are not being sold, conveyed or transferred to
Purchaser pursuant to this Agreement, as set forth in Section
3.11 of the Partnership Disclosure Schedule.
"FIFO" represents the method of valuing inventory at
the lower of market or cost (first in, first out).
"Financial Statements" has the meaning set forth in
Section 2.6.
"GAAP" means generally accepted accounting principles
set forth in the opinions and pronouncements of the American
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of
the accounting profession, which are in effect on the date of
this Agreement, consistently applied throughout the specified
period and in the immediately prior comparable period.
"General Releases" has the meaning set forth in Section
5.20.
"Governmental Entity" has the meaning set forth in
Section 2.4.
"Governmental Permit" has the meaning set forth in
Section 2.28.
"Group A" has the meaning set forth in Section 8.2(c).
"Guarantee" has the meaning set forth in Section 2.29.
"HSR Act" has the meaning set forth in Section 2.4.
"Indebtedness" of any Person means all obligations of
such Person (i) for borrowed money, (ii) evidenced by notes,
bonds, debentures or similar instruments, (iii) for which
interest charges are customarily paid, (iv) under conditional
sale or other title retention agreements relating to property or
assets purchased by such Person, (v) issued or assumed as the
deferred purchase price of property or services (other than trade
accounts payable and accrued obligations incurred in the ordinary
course of business), (vi) under capital leases, (vii) in respect
of interest rate protection agreements, foreign currency exchange
agreements or other interest or exchange rate hedging
arrangements, (viii) as an account party in respect of letters of
credit and bankers' acceptances, (ix) with respect to
Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on property owned or acquired by such
Person and (x) in the nature of guarantees of Indebtedness of
others. The Indebtedness of any Person shall include the
Indebtedness of any partnership in which such person is a general
partner.
"Indemnified Party" means any Person claiming
indemnification under any provision of Article VIII or Section
5.21.
"Indemnifying Party" means any Party against whom a
claim for indemnification is being asserted under any provision
of Article VIII or Section 5.21.
"Indemnity Notice" shall mean written notification by
an Indemnified Party to an Indemnifying Party pursuant to Section
8.3(b) of a claim for indemnity under Section 5.21 or Article
VIII by such Indemnified Party, specifying the nature of and
basis for such claim, together with the amount or, if not then
reasonably ascertainable, the estimated amount, determined in
good faith, of such claim.
"Installment Note" has the meaning set forth in Section
1.3(b).
"Intellectual Property" has the meaning set forth in
Section 2.14.
"Interim Balance Sheet" has the meaning set forth in
Section 2.6.
"Knowledge of Seller" or "Known to Seller" means the
actual knowledge after due investigation of any Seller or of any
officer, director or any employee in charge of environmental
matters, human resources or Taxes of the Company.
"Knowledge of the Partnership" or "Known to the
Partnership" means the actual knowledge after due investigation
of any Partner.
"Laws" has the meaning set forth in Section 2.23.
"LIFO" represents the method of valuing inventory at
the lower of market or cost (last in, first out).
"Loss" means any and all damages, fines, fees,
penalties, deficiencies, losses and related expenses (including
without limitation interest, court costs, fees of attorneys,
accountants and other experts or other expenses of litigation or
other Proceedings or of any claim, default or assessment without
regard to any reserves therefor which may be reflected on the
Books and Records or Financial Statements of the Company or the
books, records and financial statements of any Indemnified
Party).
"Material Adverse Effect" shall mean an event,
violation or other matter that, considered together with all
other matters that would constitute exceptions to the
representations and warranties set forth in the Agreement but for
the presence of "Material Adverse Effect" or other materiality or
similar qualifications in such representations and warranties,
would have a material adverse effect on the Business, condition
assets, liabilities, operations, financial condition, or
prospects of the Company or the Partnership Assets, as the case
may be.
"Net Working Capital" means the current assets of the
Company, including cash and Cash Equivalents, less (i) all
amounts with respect to current liabilities (excluding the
current portion of long-term debt and capitalized lease
obligations), (ii) any costs and expenses related to the
transactions contemplated in the Agreement not yet paid as of the
date of the Closing Date Balance Sheet, and (iii) the aggregate
amounts of any dividends or distributions permitted to be made to
Seller by Section 5.12 hereof which have not yet been made.
"Net Worth" means the net worth of the Company as
derived from the Closing Date Balance Sheet plus $2.325 million
(which represents the expected net equity of the Partnership
Assets).
"Non-Competition Agreement" has the meaning set forth
in Section 5.16.
"Non-ERISA Commitments" has the meaning set forth in
Section 2.19(b).
"Operative Agreement" has the meaning set forth in
Section 2.4.
"Options" has the meaning set forth in the forepart of
this Agreement.
"Order" means any writ, judgment, decree, injunction or
similar order or pronouncement of any Governmental Entity (in
each such case whether preliminary or final).
"Other Authorizations" has the meaning set forth in
Section 6.1(e).
"Owned Real Property" has the meaning set forth in
Section 2.11.
"Partners" has the meaning set forth in the forepart of
the Agreement.
"Partnership" has the meaning set forth in the forepart
of the Agreement.
"Partnership Acquisition Transaction" has the meaning
set forth in Section 5.9.
"Partnership's Agent" has the meaning set forth in
Section 1.3(b).
"Partnership Agreement" has the meaning set forth in
Section 3.1.
"Partnership Assets" has the meaning set forth in the
forepart of this Agreement.
"Partnership Disclosure Schedule" has the meaning set
forth in Section 3.1.
"Partnership Documents" has the meaning set forth in
Section 3.15.
"Partnership Mortgage" means the loan in the original
principal amount of $4,000,000 from Michigan National Bank to the
Partnership and secured by the Partnership Assets.
"PCB" has the meaning set forth in 2.21(g).
"Pension Plans" has the meaning set forth in Section
2.19(a).
"Permitted Encumbrance" has the meaning set forth in
Section 2.13.
"Person" has the meaning set forth in Section 3.3.
"Plans" has the meaning set forth in Section 2.19(b).
"Proceeding" has the meaning set forth in Section 2.16.
"Purchaser" has the meaning set forth in the forepart
of the Agreement.
"Purchaser Credit Agreement" means the Credit Agreement
among Big Flower Press Holdings, Inc., TCA, Various Banks
therein, Bank of America NT & SA, The Industrial Bank of Japan,
Limited and NationsBank, N.A., as Co-Agents, Credit Suisse, as
Documentation Agent, and Bankers Trust Company, as Administrative
Agent, dated as of November 28, 1995 and amended and restated as
of March 19, 1996.
"Purchaser Disclosure Schedule" has the meaning set
forth in Section 4.3.
"RCRA" has the meaning set forth in Section 2.21(n).
"Release" has the meaning set forth in Section 2.21(n).
"Remedial Action" has the meaning set forth in Section
2.21(n).
"Resolution Period" means the period ending thirty (30)
days following receipt by an Indemnified Party of a Dispute
Notice.
"Section 338 Forms" has the meaning set forth in
Section 5.21(a).
"Seller" or "Sellers" has the meaning set forth in the
forepart of the Agreement.
"Seller's Agent" has the meaning set forth in Section
1.3(a).
"Seller's Documents" has the meaning set forth in
Section 2.25.
"Shares" has the meaning set forth in the forepart of
the Agreement.
"Shares Purchase Price" has the meaning set forth in
Section 1.3(a).
"Subsidiary" means any Person in which the Company,
directly or indirectly through Subsidiaries or otherwise,
beneficially owns more than fifty percent (50%) of either the
equity interests in, or the voting control of, such Person.
"Taxes" has the meaning defined in Section 2.20(d).
"Tax Returns" has the meaning set forth in Section
2.20(d).
"TCA" has the meaning set forth in the forepart of this
Agreement.
"Third Party Claim" has the meaning set forth in
Section 8.3(a).
"WARN Act" has the meaning set forth in Section
2.22(b).
"Warranty Deed" means the Warranty Deed from the
Partnership to the Purchaser to transfer, convey and sell to
Purchaser the real estate which constitutes a Partnership Asset.
"Welfare Plans" has the meaning set forth in Section
2.19(a).