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ASSET PURCHASE AGREEMENT
by and between
PLAYTEX PRODUCTS, INC.
and
MONDIAL INDUSTRIES LIMITED PARTNERSHIP
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January 6, 1999
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TABLE OF CONTENTS
Page
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1. Transfer of Assets and Liabilities....................................1
1.1. Assets to be Sold............................................1
1.2. Excluded Assets..............................................1
1.3. Liabilities to be Assumed....................................1
1.4. Liabilities Not Assumed......................................1
2. Consideration and Payment.............................................2
2.1. Consideration................................................2
2.2. Payment of Cash Portion Purchase Price.......................2
2.3. Delivery of the Note.........................................3
2.4. Pay-Off of Assumed Funded Debt...............................3
2.5. Allocation of Purchase Price.................................3
3. Closing; Closing Date.................................................3
4. Representations and Warranties of the Seller..........................4
4.1. Due Organization and Authority of the Seller;
Qualification of the Seller..................................4
4.2. Subsidiaries.................................................4
4.3. Authority to Execute and Perform Agreement...................4
4.4. Organizational Documents and Corporate Records...............4
4.5. Financial Statements; Liabilities............................4
4.6. No Material Adverse Change...................................5
4.7. Accounts Receivable..........................................5
4.8. Taxes........................................................5
4.9. Compliance with Laws.........................................6
4.10. Permits......................................................6
4.11. No Breach....................................................6
4.12. Reserved.....................................................7
4.13. Environmental Matters........................................7
4.14. Claims and Proceedings.......................................7
4.15. Contracts....................................................7
4.16. Inventory....................................................8
4.17. Real Estate..................................................8
4.18. Product Warranty.............................................9
4.19. Tangible Property............................................9
4.20. Intellectual Property. ....................................10
4.21. Title to the Assets.........................................11
4.22. Suppliers and Customers.....................................11
4.23. Employee Benefit Plans......................................12
4.24. Labor Matters...............................................13
4.25. Insurance...................................................13
4.26. Officers, Directors and Employees...........................14
4.27. Operations of the Seller....................................14
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4.28. Potential Conflicts of Interest.............................15
4.29. Full Disclosure.............................................15
4.30. Securities Act Compliance...................................15
4.31. Pre-Closing Payments and Other Actions......................16
4.32. Year 2000 Compliance........................................17
5. Representations and Warranties of the Buyer..........................17
5.1. Due Incorporation and Qualification.........................17
5.2. Authority to Execute and Perform Agreements.................17
5.3. No Breach...................................................17
5.4. SEC Documents; Financial Statements.........................18
5.5. No Material Adverse Change..................................18
5.7. Financing Commitments.......................................19
6. Covenants and Agreements.............................................19
6.1. Conduct of Business.........................................19
6.2. Corporate Examinations and Investigations...................19
6.3. Publicity...................................................19
6.4. Indemnification of Brokerage................................20
6.5. Required Consents...........................................20
6.6. Further Assurances..........................................20
6.7. Employees...................................................21
6.8. License Agreement Research..................................21
6.9. 401(k) Plan.................................................21
6.10. Partners of the Seller......................................21
7. Conditions Precedent to the Obligations of the Buyer.................21
7.1. Representations and Covenants...............................21
7.2. Consents and Approvals......................................22
7.3. Opinion of Counsel to the Seller............................22
7.4. Additional Closing Documents of the Seller..................22
7.5. Escrow Agreement............................................22
7.6. Non-Compete Agreements......................................22
7.7. Xxxx-Xxxxx-Xxxxxx...........................................22
7.8. Release of Prior Indebtedness...............................23
7.9. License Agreement...........................................23
7.10. Approval of the Seller's Limited Partners...................23
7.11. Title Insurance.............................................23
7.12. Survey......................................................23
7.13. Tax Returns.................................................23
7.14. FIRPTA Affidavit............................................24
8. Conditions Precedent to the Obligation of the Seller.................24
8.1. Representations and Covenants...............................24
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8.2. Additional Closing Documents of the Buyer...................24
8.3. Xxxx-Xxxxx-Xxxxxx...........................................24
8.4. License Agreement...........................................24
8.5. Approval of the Seller's Limited Partners...................24
8.6. Opinion of Counsel to the Buyer.............................25
9. Post-Closing Covenants and Agreements................................25
9.1. Prorations..................................................25
9.2. Bulk Sales Laws.............................................25
9.3. Collection of Receivables...................................25
9.4. Further Assurances..........................................25
10. Survival of Representations and Warranties of the Seller.............25
11. Indemnification......................................................26
11.1. Obligation of the Seller to Indemnify.......................26
11.2. Obligation of the Buyer to Indemnify........................26
11.3. Notice and Opportunity to Defend............................26
11.3.1 Notice of Asserted Liability.......................27
11.3.2 Opportunity to Defend..............................27
11.4. Limitations on Indemnification..............................28
12. Termination of Agreement.............................................28
12.1. Termination.................................................28
12.2. Survival After Termination..................................29
13. Miscellaneous........................................................29
13.1. Certain Definitions.........................................29
13.2. Consent to Jurisdiction and Service of Process..............32
13.3. Notices.....................................................33
13.4. Entire Agreement............................................34
13.5. Waivers and Amendments; Non-Contractual Remedies............34
13.6. Governing Law...............................................34
13.7. Binding Effect; Assignment..................................34
13.8. Counterparts................................................35
13.9. Exhibits and Schedules......................................35
13.10. Headings....................................................35
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EXHIBITS
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A. Form of Note
B. Form of Escrow Agreement
C. Form of Opinion of Reinhart, Boerner, Van Deuren, Xxxxxx &
Rieselbach, S.C.
D. Form of Xxxx of Sale and Assignment
E. Form of Trademark Assignment
F. Form of Patent Assignment
G. Form of Deed
H-1. Form of Consulting and Non-Compete Agreement
H-2. Form of Non-Compete Agreement
I. Form of Consent and Estoppel Certificate
J. Form of Assumption of Liabilities
K. Form of Registration Rights Agreement
L. Form of Opinion of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
SCHEDULES
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1.1 Assets
1.2 Excluded Assets
4.1 Qualification of the Seller
4.5(b) Liabilities
4.10 Permits
4.11 Required Consents
4.14 Claims and Proceedings
4.15(a) Assumed Contracts
4.15(b) Other Material Contracts
4.17(a) Owned Property
4.17(b) Leased Property
4.18 Product Warranty
4.19 Tangible Property
4.20(b) Patents
4.20(c) Intellectual Property Licenses
4.21 Title to the Assets
4.22 Suppliers and Customers
4.23 Benefit Plans
4.25 Insurance
4.26 Officers, Directors and Employees
4.27 Operations of the Seller
4.28 Potential Conflicts of Interest
4.31 Pre-Closing Payments
4.32 Year 2000 Disclosure
5.3 Authority of the Buyer
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5.4 Buyer SEC Documents
6.4 Brokers Fees
13.1 Assumed Funded Debt
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ASSET PURCHASE AGREEMENT
AGREEMENT, dated January 6, 1999, by and between Playtex Products,
Inc., a Delaware corporation (the "Buyer"), and Mondial Industries Limited
Partnership, a Wisconsin limited partnership (the "Seller").
The Buyer wishes to purchase from the Seller, and the Seller wishes to
sell to the Buyer, substantially all of the assets, properties, rights and
business of the Seller, subject to the Assumed Liabilities (as defined below),
upon the terms and subject to the conditions of this Agreement (the
"Contemplated Transactions").
Certain terms used in this Agreement are defined in Section 13.1.
Accordingly, the parties agree as follows:
1. Transfer of Assets and Liabilities.
1.1. Assets to be Sold. At the Closing the Seller shall sell
to the Buyer, and the Buyer shall purchase from the Seller, all of the assets,
properties, rights and business of the Seller, including, without limitation,
all of the Seller's right, title and interest in and to the assets set forth on
Schedule 1.1 (all of such assets, properties and rights being sometimes
collectively referred to herein as the "Assets").
1.2. Excluded Assets. There shall be excluded from the Assets
those assets, properties and rights of the Seller set forth on Schedule 1.2.
(collectively, the "Excluded Assets").
1.3. Liabilities to be Assumed. Subject to the terms and
conditions of this Agreement, in partial consideration of the transfer to the
Buyer of the Assets, on the Closing Date the Buyer will assume all liabilities
and obligations of the Seller (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due) including,
without limitation, the liabilities and obligations set forth on Schedule 1.3,
other than the Excluded Liabilities as set forth in Section 1.4 below
(collectively, the "Assumed Liabilities").
1.4. Liabilities Not Assumed. The Buyer shall not assume or in
any way be liable for the payment, performance and discharge of the following
liabilities and obligations of the Seller (collectively, the "Excluded
Liabilities"):
(a) except as set forth in Section 9.1, all
liabilities, obligations and expenses of any kind or nature relating to Taxes of
the Seller and,
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with respect to the Assets, for any period ending on or before the Closing Date
(including, without limitation, any liabilities, obligations and expenses
pursuant to any tax sharing agreement, tax indemnification or similar
arrangement) and any Taxes payable in connection with the transactions
contemplated by this Agreement;
(b) all legal fees and the fees of any broker,
finder, agent or similar intermediary (a"Broker") acting on behalf of the
Seller, including any brokerage commissions, finder's fees or similar fees or
commissions payable in connection with this Agreement (collectively, the
"Transaction Expenses");
(c) all liabilities, obligations and expenses arising
under Environmental Laws; and
(d) all liabilities, obligations and expenses arising
under the employment agreements or relating to the employment of Xxxx Xxxx,
Xxxxxxx X. Xxxxxx, Xxxxxx X'Xxxx or Xxxxx X. Xxx, including, without limitation,
those in connection with change of control or severance arrangements.
2. Consideration and Payment.
2.1. Consideration. At the closing provided for in Article 3
(the "Closing"), upon the terms and subject to the conditions of this Agreement,
and in consideration of the sale of the Assets referred to in Section 1.1, the
Buyer will deliver to the Seller an aggregate purchase price (the "Purchase
Price") equal to (a) $70,000,000 in cash, less an amount equal to the sum of (i)
50% of the Assumed Funded Debt to the extent such Assumed Funded Debt does not
exceed $3.8 million, plus (ii) 100% of the Assumed Funded Debt above $3.8
million (the "Adjusted Cash Purchase Price"), and (b) the $50,000,000 principal
amount of the Convertible Subordinated Note of the Buyer, dated as of the
Closing Date, in the form of Exhibit A (the "Note").
2.2. Payment of Cash Portion Purchase Price. At the Closing,
the Adjusted Cash Purchase Price shall be paid by the Buyer as follows:
(a) the Buyer shall deliver to the Seller cash by
wire transfer of immediately available funds, in an amount equal to the Adjusted
Cash Purchase Price less amounts paid by the Buyer into the Escrow Account
pursuant to Section 2.2(b); and
(b) the Buyer shall deliver to US Trust Company of
New York (the "Escrow Agent") cash by wire transfer of immediately available
funds, in the amount of $5,000,000, such amount to be held in an escrow account
(the "Escrow Account") in accordance with the terms of an escrow agreement in
the form of Exhibit B among the Buyer, the Escrow Agent and the Seller (the
"Escrow Agreement").
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2.3. Delivery of the Note. At the Closing, the Buyer shall
deliver to the Seller the Note.
2.4. Pay-Off of Assumed Funded Debt. At the Closing, the Buyer
shall cause the Assumed Funded Debt to be paid in full.
2.5. Allocation of Purchase Price.
(a) Within a reasonable period following the signing
of this Agreement, but in no event less than ten (10) days prior to the Closing,
the Buyer shall prepare and deliver to the Seller a schedule (an "Allocation
Schedule") allocating the sum of the Purchase Price and the Assumed Liabilities
among the Assets, in such amounts reasonably determined by the Buyer to be
consistent with Section 1060 of the Code, and the regulations thereunder
("Section 1060").
(b) The Seller shall have a period of five (5)
business days after the delivery of the Allocation Schedule to present in
writing to the Buyer notice of any objections the Seller may have to the
allocations set forth therein (an "Objections Notice"). Unless the Seller timely
objects, such Allocation Schedule shall be binding on the parties without
further adjustment, absent manifest error.
(c) If the Seller shall raise any objections within
the five- business day period, the Buyer and the Seller shall negotiate in good
faith and use their reasonable best efforts to resolve such dispute. If the
parties fail to agree within fifteen days after the delivery of the Objections
Notice, then the disputed items shall be resolved by PricewaterhouseCoopers LLP,
or if such firm declines to act in such capacity, by such other firm of
independent nationally recognized accountants chosen and mutually accepted by
both parties (the "Accounting Referee"), whose determination shall be final and
binding on the parties. The Accounting Referee shall resolve the dispute within
thirty days after the item has been referred to it. The costs, fees and expenses
of the Accounting Referee shall be borne equally by the Seller and the Buyer.
(d) For all Tax (as defined in Section 4.8) purposes,
the Buyer and the Seller agree to report the transactions contemplated by this
Agreement in a manner consistent with the terms of this Agreement, and that none
of them will take any position inconsistent therewith in any Tax Return.
3. Closing; Closing Date. The Closing of the sale and purchase of the
Assets contemplated hereby shall take place at the offices of Xxxx, Weiss,
Rifkind, Xxxxxxx & Xxxxxxxx at January 29, 1999, or at such other place or such
other time or date as the parties may mutually agree in writing, provided that
all of the conditions to the Closing set forth in Articles 7 and 8 have been
satisfied or waived by the party entitled to waive the same. The time and date
upon which the Closing occurs is herein called the "Closing Date."
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4. Representations and Warranties of the Seller. The Seller represents
and warrants to the Buyer as of the date of this Agreement as follows:
4.1. Due Organization and Authority of the Seller;
Qualification of the Seller. The Seller is a limited partnership duly organized
and validly existing under the laws of the State of Wisconsin and has all
requisite partnership power and lawful authority to own, lease and operate its
properties and to carry on its business as now being and heretofore conducted.
The Seller is duly qualified or otherwise authorized as a foreign limited
partnership to transact business and is in good standing in each jurisdiction
set forth on Schedule 4.1, which are the only jurisdictions in which such
qualification or authorization is required by law and in which the failure so to
qualify or be authorized could reasonably be expected to have a material adverse
effect on the Assets taken as a whole or the business, results of operations or
financial condition of the business of the Seller (the "Condition of the
Business").
4.2. Subsidiaries. The Seller does not own any interest in any
Subsidiary.
4.3. Authority to Execute and Perform Agreement. The Seller
(a) has obtained all the necessary approvals of the Contemplated Transactions
from its general partner and its oversight committee and (b) has the requisite
partnership power and authority to enter into, execute and deliver this
Agreement and each and every agreement and instrument contemplated hereby to
which the Seller is or will be a party, and upon receipt of the requisite
consents or approvals from the limited partners of the Seller, to perform fully
the Seller's obligations hereunder and thereunder. This Agreement has been duly
executed and delivered by the Seller, and each and every other agreement and
instrument contemplated by this Agreement to which the Seller is a party, will
be duly executed and delivered by the Seller and (assuming due execution and
delivery hereof and thereof by the other parties hereto and thereto) this
Agreement and each such other agreement and instrument will be valid and binding
obligations of the Seller enforceable against the Seller in accordance with
their respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and by general equitable principles.
4.4. Organizational Documents and Corporate Records. The
Seller has heretofore delivered to the Buyer true and complete copies of the
Certificate of Limited Partnership (certified by the Department of Financial
Institutions of State of Wisconsin) and the Limited Partnership Agreement
(certified by an authorized and appropriate representative of the Seller) of the
Seller as in effect on the date hereof.
4.5. Financial Statements; Liabilities.
(a) The Seller has previously furnished to the Buyer
a copy of the following financial statements of the Seller (collectively the
"Financial Statements"): (i) audited balance sheets and the related statements
of income and partners'
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capital and cash flows as of and for the years ended December 31, 1995, December
31, 1996 and December 31, 1997; and (ii) an unaudited balance sheet, statements
of income and cash flow as of and for the nine months ended September 30, 1998
(the "Interim Financial Statements"). The Financial Statements (including the
notes thereto) have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby and present fairly in
all material respects the financial position of the Seller as of such dates and
the results of operations of the Seller for such periods; provided, however,
that the Interim Financial Statements are subject to normal year-end adjustments
and lack footnotes and other presentation items.
(b) Except as set forth on Schedule 4.5(b), the
Seller does not have any material indebtedness, liability or obligation,
absolute or contingent, other than (i) liabilities fully and adequately
reflected or reserved against in the Interim Financial Statements, (ii)
liabilities incurred after September 30, 1998 in the ordinary course of business
consistent with the past practices of the Seller, (iii) liabilities disclosed in
any Schedule to this Agreement and (iv) liabilities which individually or in the
aggregate would not reasonably be expected to have a material adverse effect on
the Condition of the Business.
4.6. No Material Adverse Change. Since December 31, 1997 (the
"Balance Sheet Date"), there has been no material adverse change in the
Condition of the Business, nor has there been any damage, destruction, loss, or
events or other circumstances which, to the knowledge of the Seller would
reasonably be expected to have or has had a material adverse effect on the
Condition of the Business, whether or not covered by insurance.
4.7. Accounts Receivable. The accounts receivable of the
Seller have arisen from bona fide transactions in the ordinary course of
business and are properly reflected on the financial statements thereof (net of
the reserves for bad debts set forth on the Interim Financial Statements).
4.8. Taxes. No state of facts exists or has existed that would
constitute grounds for the assessment against the Buyer, whether by reason of
transferee liability or otherwise, of any liability for any federal, state,
county, local, foreign or other tax (including, without limitation, income,
profits, premium, estimated, excise, sales, use, occupancy, gross receipts,
franchise, ad valorem, severance, capital levy, production, transfer,
withholding, employment, unemployment compensation, payroll related and property
taxes, import duties and other governmental charges and assessments), whether or
not measured in whole or in part by net income, and including deficiencies,
interest, additions to tax or interest, and penalties with respect thereto and
obligations under any tax sharing, tax allocation or similar agreement to which
the Seller is a party, and including expenses associated with contesting any
proposed adjustment related to any of the foregoing (hereinafter "Taxes")
attributable to any period ending on or before the Closing Date relating to the
Seller's income, assets and operations, including the Assets, or arising out of
the Contemplated Transactions, except where the failure to file any required tax
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return or pay Taxes would not have a material adverse effect on the Condition of
the Business. There is no pending or, to the knowledge of the Seller, threatened
Tax audit of any Tax return filed by or on behalf of the Seller or with respect
to the Seller's income, assets and operations, including the Assets.
4.9. Compliance with Laws. The Seller is not in material
violation of any applicable order, judgment, injunction, award, decree or writ
(collectively, "Orders"), or to the knowledge of the Seller, any applicable law,
statute, code, ordinance, regulation or other requirement (collectively,
"Laws"), of any government or political sub division thereof, or any agency or
instrumentality of any such government or political subdivision, or any
insurance company or fire rating and any other similar board or organization or
other non-governmental regulating body (to the extent that the rules,
regulations or orders of such body have the force of law), or any court or
arbitrator (collectively, "Governmental Bodies"), and the Seller has not
received notice that any such material violation is being or may be alleged.
4.10. Permits. The Seller has all licenses, permits,
exemptions, consents, waivers, authorizations, rights, certificates of
occupancy, franchises, orders or approvals of, and has made all required
registrations with, any Governmental Body that are material to the conduct of
the business of, or the intended use of any properties of, the Seller
(collectively,"Permits"). All Permits are listed on Schedule 4.10 and are in
full force and effect; no material violations are or have been recorded in
respect of any Permit; and no proceeding is pending or, to the knowledge of the
Seller, threatened to revoke or limit any Permit.
4.11. No Breach. None of the execution and delivery by the
Seller of this Agreement or any other agreement or instrument contemplated
hereby or the per formance by the Seller of this Agreement or any other
agreement or instrument contemplated hereby in accordance with their respective
terms and conditions (a) violates any provision of the Certificate of Limited
Partnership or the Limited Partnership Agreement of the Seller; (b) requires the
Seller to obtain any consent, approval or action of, or make any filing with or
give any notice to, any Governmental Body or any other person, except as set
forth on Schedule 4.11 (the "Required Consents"); (c) if the Required Consents
are obtained, violates, conflicts with or results in the breach of any of the
terms of, results in a material modification of the effect of, otherwise causes
the termination of or gives any other contracting party the right to terminate,
or constitutes (or with notice or lapse of time or both constitutes) a default
(by way of substitution, novation or otherwise) under, any material contract,
agreement, indenture, note, bond, loan, instrument, lease, conditional sale
contract, mortgage, license, franchise, commitment or other binding arrangement
(collectively, the "Contracts") to which the Seller is a party or by or to which
it or any of its properties are bound or subject, or results in the creation of
any Lien upon any of the Assets; (d) if the Required Consents are obtained,
violates any Order of any Governmental Body against, or binding upon, the Seller
or upon the Assets or its securities (or other ownership interests), properties
or business; (e) to the knowledge of the Seller, if the Required Consents are
obtained, violates in any material respect any Law of any
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Governmental Body; or (f) if the Required Consents are obtained, to the
knowledge of the Seller, violates in any material respect or results in the
revocation or suspension of any Permit.
4.12. Reserved.
4.13. Environmental Matters.
(a) The Seller has complied and is in compliance in
all material respects with all Safety and Environmental Laws.
(b) The Seller has not received any written notice,
report or other information regarding any material liabilities (whether accrued,
absolute, contingent, unliquidated or otherwise) including any investigatory,
remedial or corrective obligations relating to the Seller or the facilities of
the Seller and arising under Safety and Environmental Laws.
(c) The Seller has not treated, stored, disposed of,
arranged for or permitted the disposal of, transported, handled or released any
substance, including without limitation, any hazardous material, or owned or
operated any facility or property, so as to give rise to material liabilities of
the Seller for response costs, natural resource damages or attorneys' fees
pursuant to applicable Safety and Environmental Laws.
4.14. Claims and Proceedings. There are no outstanding Orders
of any Governmental Body against or involving the Seller. Except as set forth on
Schedule 4.14, there are no material actions, suits, claims or legal,
administrative or arbitral proceedings or investigations (collectively,"Claims")
(whether or not the defense thereof or liabilities in respect thereof are
covered by insurance) pending, or, to the knowledge of the Seller, threatened,
against or involving the Seller. All notices required to have been given to any
insurance company listed as insuring against any Claim set forth on Schedule
4.14 have been timely and duly given and, except as set forth on Schedule 4.14,
no insurance company has asserted, orally or in writing, that such Claim is not
covered by the applicable policy relating to such Claim. Except as set forth on
Schedule 4.14, there are no product liability Claims pending or, to the
knowledge of the Seller, threatened against the Seller or any product
manufactured, marketed or distributed at any time by the Seller ("Seller
Products") and no such Claims have been settled, adjudicated or otherwise
disposed of since January 1, 1994.
4.15. Contracts.
(a) Schedule 4.15(a) sets forth all of the Contracts
and other agreements, whether or not in writing, to which the Seller is a party
the performance of which will involve consideration in the excess of $50,000.
Except as set forth on
8
Schedule 4.15(b), there are no other Contracts that are material to the Seller's
business or by which the Assets are bound in any material respect.
(b) To the extent such Contracts are written, the
Seller has delivered to the Buyer true and complete copies of all of the
Contracts set forth on Schedule 4.15(a), Schedule 4.15(b) or on any other
Schedule. To the extent such Contracts are not written, Schedule 4.15(a) or
4.15(b) sets forth the material terms of such Contracts. All of such Contracts
are valid, binding and in full force and effect. The Seller is not in default
under any of such Contracts, and no condition exists that with notice or lapse
of time or both would constitute such a default thereunder, except where such
default would not have a material adverse effect on the Condition of the
Business. To the knowledge of the Seller, no other party to any such Contract is
in default thereunder in any material respect nor does any condition exist that
with notice or lapse of time or both would constitute such a material default
thereunder.
4.16. Inventory. The inventory of the Seller consists of raw
materials, work in process, finished goods, all of which is merchantable and fit
for the purpose for which it was procured or manufactured, and none of which is
slow-moving, obsolete, damaged or defective, subject only to the reserve for
inventory writedown set forth on the Interim Financial Statements.
4.17. Real Estate.
(a) Ownership of the Premises. The Seller is the
owner of good and marketable title to the land described on Schedule 4.17(a) and
to all of the buildings, structures and other improvements located thereon
(collectively, the "Owned Real Property") free and clear of all Title Defects
(as defined in this Section) except as listed on Schedule 4.17(a). The Owned
Real Property constitutes all of the real property owned by the Seller on the
date hereof. For purposes of this Agreement, "Title Defects" shall mean and
include any mortgage, deed of trust, Lien, pledge, security interest, lease,
charge, option, right of first refusal, easement, restrictive covenant,
encroachment or other survey defect or encumbrance other than Permitted Liens
(as defined below).
(b) Leased Properties. Schedule 4.17(b) sets forth a
true, correct and complete schedule of all leases and other agreements,
including all modifica tions, amendments and supplements thereto (collectively,
the "Real Property Leases"), under which the Seller uses or occupies or has the
right to use or occupy, now or in the future, any real property, which Schedule
sets forth the date of and parties to each Real Property Lease, the date of and
parties to each amendment, modification and supplement thereto, the term and
renewal terms (whether or not exercised) thereof, the annual rent payable
thereunder and a brief description of the Real Property (as defined below)
covered thereby. All rent and other sums and charges payable by the Seller as
tenant under each Real Property Lease are current. No event has occurred and no
condition exists that would materially interfere with the Seller's quiet
enjoyment and use of the Real Property. The
9
Real Property Leases are in full force and effect and the Seller has not
received any notice of default thereunder.
(c) Entire Premises. All of the land, buildings,
structures and other improvements used by the Seller in the conduct of its
businesses are included in the Owned Real Property and the Leased Real Property.
The Leased Real Property and the Owned Real Property are hereinafter
collectively referred to as the "Real Property."
(d) Condemnation. The Seller has not received notice,
and the Seller has no knowledge of, any pending, threatened or contemplated
condemnation proceeding affecting the Real Property or any part thereof, or of
any sale or other disposi tion of the Real Property or any part thereof, in lieu
of condemnation.
(e) Condition and Operation of Improvements. All
components of all buildings, structures, fixtures and other improvements in, on
or within the Owned Real Property (the "Improvements"), are taken as a whole in
good operating condition and repair, subject to continued repair and replacement
in accordance with past practice.
(f) Real Property Taxes. Each of the parcels included
in the Owned Real Property is assessed for real estate tax purposes as a wholly
independent tax lot, separate from any adjoining land or improvements not
constituting a part of such parcel.
(g) Survey. There are no encroachments or other facts
or conditions affecting any parcel of Owned Real Property that would be revealed
by an accurate survey which would, individually or in the aggregate, (i)
interfere in any material respect with, or materially increase the cost of, the
use, occupancy or operation thereof as currently used, occupied and operated or
(ii) materially reduce the fair market value thereof below the fair market value
such parcel would have had but for such encroachment or other fact or condition.
No portion of any Improvement encroaches upon any property not included within
the Owned Real Property or upon the area of any easement affecting the Owned
Real Property.
4.18. Product Warranty. Schedule 4.18 sets forth a description
of all express warranties provided by the Seller with respect to products sold
by it and includes a copy of the standard terms and conditions of sale for the
Seller.
4.19. Tangible Property. Except as set forth on Schedule 4.19,
the facilities, machinery, equipment, furniture, buildings and other
improvements, fixtures, vehicles, structures, any related capitalized items and
other tangible property material to the business of the Seller (the "Tangible
Property") are in all material respects in good operating condition and repair,
subject to continued repair and replacement in accordance with past practice.
During the past three years there has not been any significant
10
interruption of the operations of the Seller due to inadequate maintenance of
the Tangible Property.
4.20. Intellectual Property.
(a) The Seller is not infringing any Intellectual
Property rights of others in the operation of its businesses, as currently
conducted, nor to the knowledge of the Seller is any other person infringing the
Intellectual Property rights of the Seller. Except as set forth on Schedule
4.20(a), the Seller has not received any claim or notice alleging any such
infringement during the past 12 months (including any claim that the Seller must
license or refrain from using any Intellectual Property rights of any third
party).
(b) Schedule 4.20(b) identifies each patent or
registration which has been issued to the Seller with respect to any of its
Intellectual Property, identifies each pending patent application or application
for registration which the Seller has made with respect to any of its
Intellectual Property, and identifies each license, agreement or other
permission which the Seller has granted to any third party with respect to any
of its Intellectual Property (together with any exceptions). The Seller has
delivered or made available to the Buyer correct and complete copies of all such
patents, registrations, applications, licenses, agreements and permissions (as
amended to date). Schedule 4.20(b) also identifies each trade name or
unregistered trademark used by the Seller in connection with its business. With
respect to each item of Intellectual Property required to be identified in
Schedule 4.20(b), except as set forth therein:
(i) the Seller possesses all right, title
and interest in and to the item, free and clear of any Lien other than Permitted
Liens;
(ii) the item is not subject to any
outstanding Order;
(iii) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand is pending or, to the
knowledge of the Seller is threatened which challenges the legality, validity,
enforceability, use or ownership of the item; and
(iv) the Seller has never agreed to
indemnify any person for or against any interference, infringement,
misappropriation or other conflict with respect to the item.
(c) Schedule 4.20(c) identifies each material item of
Intellectual Property that any third party owns and that the Seller uses
pursuant to license, sublicense, agreement or permission. The Seller has
delivered or made available to the Buyer correct and complete copies of all such
licenses, sublicenses, agreements and permissions (as amended to date). Except
as set forth on Schedule 4.20(c), with respect to each item of Intellectual
Property required to be identified in Schedule 4.20(c):
11
(i) the license, sublicense, agreement or
permission covering the item is legal, valid, binding, enforceable and in full
force and effect;
(ii) the Seller is not, and to the knowledge
of the Seller, the other parties to such license, sublicense, agreement or
permission are not, in material breach or default thereunder;
(iii) to the knowledge of the Seller, the
underlying item of Intellectual Property is not subject to any outstanding
Order;
(iv) no action, suit, proceeding, hearing,
investigation, claim or demand is pending or, to the knowledge of the Seller, is
threatened which challenges the legality, validity or enforceability of the
underlying item of Intellectual Property; and
(v) the Seller has not granted any
sublicense or similar right with respect to the license, sublicense, agreement
or permission.
4.21. Title to the Assets. Except as set forth on Schedule
4.21, the Seller has good title to, or a valid leasehold interest in, all of the
Assets, free and clear of any Liens, except (a) for liens for taxes not yet due
and payable, (b) such imperfections of title and encumbrances, if any, which are
not material in character or amount and which do not materially detract from the
value or use of the assets subject thereto or affected thereby, (c) Liens
specifically described in the Financial Statements, (d) properties disposed of,
or subject to purchase and sales orders, in the ordinary course of business
since December 31, 1997 and (e) subject to revision as described below, Liens
set forth on Schedule 4.21 (collectively, the "Permitted Liens"). Schedule 4.21
is subject to revision upon receipt of an updated title insurance commitment,
copies of all documents referenced in the updated title insurance commitment and
a survey of the Owned Real Property. If the updated titled insurance commitment,
the survey, or the documents creating the encumbrances set forth on Schedule
4.21 disclose that an encumbrance or title imperfection exists and it does not
fall within Section 4.21(a), 4.21(b) or 4.21(c), the Buyer may give the Seller
written notice of such encumbrance or title imperfection and, if the Seller
fails to cure such defect within five (5) days after receipt of such notice, the
Buyer may elect to proceed with the Contemplated Transactions or, as the Buyer's
sole remedy, to terminate the Agreement by giving the Seller notice of such
election within five (5) business days after expiration of the five (5) day cure
period. The Seller shall use reasonable efforts to cure any such encumbrance or
title defect, provided such cure does not require a payment of more than
$25,000. Upon completion of the Contemplated Transactions, the Buyer will
acquire good title to all of the Assets, free and clear of any Liens, except for
Permitted Liens or Liens, if any, imposed by the Buyer.
4.22. Suppliers and Customers. Schedule 4.22 lists for the 10
largest (in terms of dollar amount) suppliers and the 10 largest (in terms of
dollar amount) customers of the Seller, in each case, paid for the nine months
ended on the Balance Sheet
12
Date. Except as set forth on Schedule 4.22, (i) no person listed on Schedule
4.22 within the last twelve months has threatened in writing to cancel or
otherwise terminate, or to the knowledge of the Seller, intends to cancel or
otherwise terminate, the relationship of such person with the Seller and (ii) no
such person has during the last twelve months decreased materially or threatened
to decrease or limit materially, or to the knowledge of the Seller intends to
modify materially its relationship with the Seller or intends to decrease or
limit materially its services or supplies to the Seller or its usage or purchase
of the services or products of the Seller.
4.23. Employee Benefit Plans.
(a) Schedule 4.23 lists each Benefit Plan that Seller
maintains or to which the Seller contributes (the "Seller Benefit Plans"). The
Seller has no liability under any Benefit Plans other than the Seller Benefit
Plans. The Seller does not maintain or contribute to any Pension Benefit Plan or
any multiemployer plan (within the meaning of Section 3(37) of ERISA). To the
knowledge of the Seller, each such Benefit Plan (and related trust, insurance
contract or fund) complies in form and in operation in all material respects
with the applicable requirements of ERISA and the Code, except where the failure
to comply would not have a material adverse effect on the financial condition of
the Seller taken as a whole. All contributions (including all employer
contributions and employee salary reduction contributions) which are due have
been paid to each such Benefit Plan. The Seller has delivered to the Buyer
correct and complete copies of the plan documents and summary plan descriptions,
the most recent Form 5500 Annual Report, the most recent determination letter
and all related trust agreements, insurance contracts and other funding
agreements which implement each such Benefit Plan.
(b) No Claim with respect to the administration or
the investment of the assets of any such Benefit Plan (other than routine claims
for benefits) is pending, except where the Claim would not have a material
adverse effect on the Condition of the Business.
(c) With respect to each Benefit Plan, no event has
occurred, and there exists no condition or set of circumstances in connection
with which the Buyer could, directly or indirectly, be subject to any material
liability under ERISA, the Code or any other applicable law.
(d) Each Benefit Plan that is intended to be
qualified under Section 401(a) of the Code is so qualified and has been so
qualified during the period since its adoption; each trust created under any
such Plan is exempt from tax under Section 501(a) of the Code and has been so
exempt since its creation.
(e) No other trade or business is or at any time
within the past six years, has been treated, together with the Company, as a
single employer under Section 414 of the Code or Section 401 of ERISA.
13
(f) No Benefit Plan is a Retiree Welfare Plan.
(g) The consummation of the transactions contemplated
by this Agreement will not entitle any current or former employee to severance
pay, unemployment compensation or any similar payment under any Benefit Plan or
accelerate the time of payment or vesting, or increase the amount of any
compensation due to, or in respect of, any current or former employee under any
Benefit Plan.
(h) As of the Closing, the Seller has not incurred
any liability or obligation under the Worker Adjustment and Retraining
Notification Act, as it may be amended from time to time, and within the 90-day
period immediately following the Closing, Buyer will not incur any such
liability or obligation if, during such 90-day period, only terminations of
employment in the normal course of operations occur.
(i) There are no unfunded obligations under any
Benefit Plan which are not fully reflected on Financial Statements.
(j) Each Benefit Plan may be amended or terminated at
any time and there is nothing preventing the assignment of any of the Benefit
Plans and all required consents , if any, in connection with the assignment of
the Benefit Plans in accordance with this Agreement have been obtained.
4.24. Labor Matters. The Seller is not a party to or bound by
any union or collective bargaining agreement. The Seller is not a party to any
pending arbitration or grievance proceeding or other claim relating to any labor
contract nor, to the knowledge of the Seller, is any such action threatened.
Within the previous 12 months, the Seller has not experienced any labor
disputes, union organization attempts or any work stoppage due to labor
disagreements in connection with its business, and there is currently no labor
strike, request for representation, slowdown or stoppage actually pending, or to
the knowledge of the Seller, threatened against the Seller. The Seller has
provided to Buyer all written employment agreements with the employees of the
Seller which are presently in effect.
4.25. Insurance. Schedule 4.25 sets forth a list (specifying
the insurer, describing each pending Claim thereunder of more than $50,000 and
setting forth the aggregate amounts paid out under each such policy through the
date hereof and the aggregate limit, if any, of the insurer's liability
thereunder) of all policies or binders of fire, liability, product liability,
worker's compensation, vehicular and other insurance held by or on behalf of the
Seller. Such policies and binders are valid and binding in accordance with their
terms, are in full force and effect, and insure against risks and liabilities to
an extent and in a manner customary in the industries in which the Seller
operates. The Seller is not in default with respect to any provision contained
in any such policy or binder or has failed to give any notice or present any
Claim under any such policy or binder in due and timely fashion. Except for
Claims set forth on Schedule 4.25,
14
there are no outstanding unpaid Claims under any such policy or binder, and the
Seller has not received any notice of cancellation or non-renewal of any such
policy or binder.
4.26. Officers, Directors and Employees. Schedule 4.26 sets
forth (a) the name, title and total pre-Closing compensation of each officer,
director or comparable person of the Seller, (b) the name, title, and total
compensation of each other employee, consultant, agent or other representative
of the Seller whose current or com mitted annual rate of compensation (including
bonuses and commissions) exceeds $100,000, (c) all pre-Closing wage and salary
increases, bonuses and increases in any other direct or indirect compensation
received by such persons since the Balance Sheet Date, (d) any pre-Closing
payments or commitments to pay any severance or termination pay to any such
persons, and (e) any pre-Closing accrual for, or any commitment or agreement by
the Seller to pay, such increases, bonuses or pay. Except as set forth on
Schedule 4.26, none of such persons has indicated that he or she will cancel or
otherwise terminate such person's relationship with the Seller.
4.27. Operations of the Seller. Except as set forth on
Schedule 4.27 or on any other Schedule, since the Balance Sheet Date the Seller
has not: (a) except for short-term bank borrowings in the ordinary course of
business, incurred any indebtedness for borrowed money; (b) reduced its cash or
short-term investments or their equivalent, other than to meet cash needs
arising in the ordinary course of business, consistent with past practices; (c)
waived any material right under any Contract or other agreement of the type
required to be set forth on any Schedule; (d) made any change in its accounting
methods or practices or made any change in depreciation or amortization policies
or rates adopted by it, except insofar as may have been required by a change in
GAAP; (e) materially changed any of its business policies, including, without
limitation, advertising, investment, marketing, pricing, purchasing, production,
personnel, sales, returns, budget or product acquisition policies; (f) made any
loan or advance to any of its shareholders, officers, directors, employees,
consultants, agents, comparable persons or other representatives, as applicable
(other than travel advances made in the ordinary course of business), or made
any other loan or advance otherwise than in the ordinary course of business; (g)
made any material acquisition of all or any part of the properties, capital
stock or business of any other person; (h) terminated or failed to renew, or
received any written threat (that was not subsequently withdrawn) to terminate
or fail to renew, any Contract or other agreement that is or was material to the
Condition of the Business; (i) amended its Certificate of Limited Partnership or
its Limited Partnership Agreement, or merged with or into or consolidated with
any other person, subdivided or in any way reclassified any of its ownership
interests or any shares of its capital stock or changed or agreed to change in
any manner the rights of its ownership interests or the character of its
business; (j) made any material capital expenditures (or series of related
capital expenditures) outside the ordinary course of business; or (k) granted
any license or sublicense of any rights under or with respect to any
Intellectual Property outside the ordinary course of business.
15
4.28. Potential Conflicts of Interest. Except as set forth on
Schedule 4.28, (a) the Seller does not, (b) no officer, director or affiliate of
the Seller, (c) no relative or spouse (or relative of such spouse) of any such
officer, director or affiliate and (d) no entity controlled by one or more of
the foregoing:
(i) own(s), directly or indirectly, any
interest in (excepting less than 1% stock holdings for investment purposes in
securities of publicly held and traded companies), or is an officer, director,
employee or consultant of, any person which is, or is engaged in business as, a
competitor, lessor, lessee, supplier, distributor, sales agent or customer of
the Seller;
(ii) own(s), directly or indirectly, in
whole or in part, any property that the Seller uses in the conduct of its
business; or
(iii) has any cause of action or other
material claim whatsoever against, or owes any material amount to, the Seller,
except for claims in the ordinary course of business such as for accrued
vacation pay, accrued benefits under Benefit Plans, and similar matters and
agreements existing on the date hereof.
4.29. Full Disclosure. All documents or other papers
identified herein or listed in the Schedules attached hereto and delivered by or
on behalf of the Seller to the Buyer in connection with this Agreement and the
transactions contemplated hereby are true, complete and authentic copies
thereof. The representations and warranties of the Seller in this Agreement
taken together with the attached Schedules and with all of the documents and
other papers expressly identified herein or listed in such Schedules, taken as a
whole, do not, to the knowledge of the Seller, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements made not false or misleading.
4.30. Securities Act Compliance.
(a) Each of the Seller and its partners is either (i)
an accredited investor as defined in Rule 501(a)(3), (5) or (6) of Regulation D
under the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the "Securities Act"), or (ii) has such knowledge and
experience in financial and business matters that he is capable of evaluating
the merits and risks of the prospective investment, and there are less than 35
partners which are not described by clause (i).
(b) The Seller is not subscribing for the Note as a
result of or subsequent to:
(i) any advertisement, article, notice or
other communication published in any newspaper, magazine or similar media or
broadcast over television or radio;
16
(ii) any seminar or meeting; or
(iii) any solicitation of a subscription by
a person not associated with the Buyer.
(c) The Seller has received copies of the Buyer's
Annual Report on Form 10-K for the year ended December 29, 1997 as filed with
the Securities and Exchange Commission (the "SEC") and of all other reports
filed by the Seller under Section 13(a) of the Securities and Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder (the
"Exchange Act"), subsequent thereto.
(d) The Seller has had full opportunity to ask
questions of and to receive answers from the Buyer, or persons acting on the
Buyer's behalf, concerning the terms and conditions of an investment in the
Buyer.
(e) On or before the Closing Date, (i) the Seller
shall cause each of its limited partners to make representations concerning
itself to the Buyer substantially to the effect set forth in paragraphs (a)
through (d) above, (ii) such representations shall be true and correct in all
material respects as of the Closing date as if made on and as of such date and
(iii) the Buyer shall have received such other information about the Seller and
its partners as it may reasonably request for purposes of satisfying itself that
the offer and sale of the Note to the Seller is exempt under the Securities Act.
4.31. Pre-Closing Payments and Other Actions.
(a) Prior to the Closing, the Seller has not paid any
and will not pay any Transaction Expenses until after the Closing and such
Transaction Expenses shall be paid from the cash delivered to the Seller
pursuant to Section 2.2.
(b) During the period from the signing of this
Agreement to the Closing, the Seller has not declared or paid any distributions
or declared or made any other payments of any kind to its partners other than
distributions in the aggregate amount not more than $1,500,000 to the partners
of the Seller to pay taxes based on the allocation of the Seller's income and
$2.5 million which heretofore has been paid on December 18, 1998, or made any
direct or indirect redemption, retirement, purchase or other acquisition of any
of its ownership interests.
(c) During the period from the date of the Interim
Financial Statements to the Closing, the Seller has not delayed or postponed the
payment of accounts payable and other liabilities outside the ordinary course of
business.
(d) During the period from the date of the Interim
Financial Statements to the Closing, the Seller has not, except for inventory or
asset retirements in the ordinary course of business, sold, transferred or made
any other disposition of any of its properties.
17
(e) During the period from the date of the Interim
Financial Statements to the Closing, the Seller has not taken any actions
outside the ordinary course of business to accelerate the collection of any
receivables.
(f) The application of cash by the Seller to repay
Assumed Funded Debt shall not be deemed a breach of any representation or
warranty in this Agreement; provided such cash was not obtained by the Seller in
breach as any such representation or warranty contained in Section 4.27 or 4.31.
4.32. Year 2000 Compliance. Except as noted on Schedule 4.32,
to the knowledge of the Seller, all software, hardware, databases, and embedded
control systems used by the Seller (collectively, the "Systems") and each of the
products of the Seller (the "Products") are Year 2000 Compliant. As used herein,
the term "Year 2000 Compliant" means that the Systems and Products (i)
accurately process date and time data (including, without limitation,
calculating, comparing, and sequencing) from, into, and between the twentieth
and twenty-first centuries, the years 1999 and 2000, and leap year calculations
and (ii) operate accurately with other software and hardware that use standard
date format (4 digits) for representation of the year.
5. Representations and Warranties of the Buyer. The Buyer represents
and warrants to the Seller as follows:
5.1. Due Incorporation and Qualification. The Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the state of Delaware and has the corporate power and lawful authority to
own, lease and operate its assets, properties and business and to carry on its
business as now conducted.
5.2. Authority to Execute and Perform Agreements. The Buyer
has the requisite corporate power and authority to enter into, execute and
deliver this Agreement and each and every other agreement and instrument
contemplated hereby to which the Buyer is or will be a party, and to perform
fully the Buyer's obligations hereunder and thereunder. This Agreement has been
duly executed and delivered by the Buyer, and each and every other agreement and
instrument contemplated by this Agreement to which the Buyer is a party will be
duly executed and delivered by the Buyer and (assuming due execution and
delivery hereof and thereof by the other parties hereto and thereto) this
Agreement and each such other agreement and instrument will be valid and binding
obligations of the Buyer enforceable against the Buyer in accordance with their
respective terms.
5.3. No Breach. Except as disclosed on Schedule 5.3, none of
the execution and delivery by the Buyer of this Agreement or any other agreement
or instrument contemplated hereby, the consummation of the transactions
contemplated hereby or thereby nor the performance by the Buyer of this
Agreement or any other agreement or instrument contemplated hereby in accordance
with their respective terms and conditions (a) violates any provision of the
Certificate of Incorporation or By-laws (or comparable
18
instruments) of the Buyer; (b) requires the Buyer to obtain any consent,
approval or action of, or make any filing with or give any notice to, any
Governmental Body or any other person; or (c) violates, conflicts with or
results in the breach of any of the terms of, results in a material modification
of the effect of, otherwise causes the termination of or gives any other
contracting party the right to terminate, or constitutes (or with notice or
lapse of time or both constitutes) a default (by way of substitution, novation
or otherwise) under, any Contract to which the Buyer is a party or by or to
which the Buyer or any of its properties may be bound or subject.
5.4. SEC Documents; Financial Statements. Schedule 5.4 lists
each report, schedule, registration statement and definitive proxy statement
filed by the Buyer with the SEC since December 31, 1996 (as such documents have
since the time of their filing been amended, the "Buyer SEC Documents"), which
include all the documents (other than preliminary material) that the Buyer was
required to file with the SEC since such date. The Buyer has made available to
Seller a true and complete copy of each of such Buyer SEC Documents. As of their
respective dates, the Buyer SEC Documents and any forms, reports and other
documents filed with the SEC by the Buyer after the date of this Agreement
complied or will comply in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, applicable to such Buyer
SEC Documents, and none of the Buyer SEC Documents contained, or will contain at
the time they are filed or amended, any untrue statement of a material fact or
omitted, or will omit at the time they are filed or amended, to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. The
financial statements of the Buyer included in the Buyer SEC Documents comply as
to form in all material respects with applicable accounting requirements and
with the published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with GAAP applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto or, in the
case of the unaudited statements, as permitted by Form 10-Q of the SEC) and
fairly present (subject, in the case of the unaudited statements, to normal
audit adjustments) in all material respects the financial position of the Buyer
as at the dates thereof and the results of its operations and cash flows for the
periods then ended.
5.5. No Material Adverse Change. Since September 30, 1998,
there has been no material adverse change in the business, result of operations
or financial condition of the business of the Buyer (the "Condition of the
Buyer"), and the Buyer does not know of any such change which is threatened, nor
has there been any damage, destruction or loss which could have or has had a
material adverse effect on the Condition of the Buyer, whether or not covered by
insurance.
5.6. Capital Structure. As of the date hereof, the authorized
capital stock of the Buyer consists of 100,000,000 shares of common stock (the
"Common Stock"). As of the close of business on December 15, 1998 (i) 60,401,822
of the Common Stock were outstanding, 4,783,001 shares of the Common Stock were
reserved for issuance pursuant to the 1994 Stock Option Plan (the "Stock Plan")
and (ii) no shares
19
of the Common Stock were held by the Buyer in its treasury. All outstanding
shares of the Common Stock are, and the shares of the Buyer's common stock to be
issued pursuant to or as specifically contemplated by this Agreement will be,
validly issued, fully paid and nonassessable and not subject to preemptive
rights. As of the date of this Agreement, except for this Agreement and shares
of the Common Stock available for issuance under the Stock Plan, there are no
options, warrants, calls, rights, commitments or agreements of any character to
which the Buyer is a party or by which it is bound obligating the Buyer to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or obligating the Buyer to grant, extend or enter into
any such option, warrant, call, right, commitment or agreement. Except as
disclosed in the Buyer SEC Documents, as of the date hereof, the Buyer is not
party to any agreement relating to the Common Stock, to any voting trust with
respect to the Common Stock or to any agreement granting any other party
registration rights with respect to shares of the Common Stock.
5.7. Financing Commitments. The Buyer has sources of financing
in an amount sufficient to effectuate the Contemplated Transactions.
6. Covenants and Agreements. Each party shall use its best efforts to
fulfill or obtain the fulfillment of the conditions to the Closing set forth in
Articles 7 and 8, and, in addition, the parties covenant and agree as follows:
6.1. Conduct of Business. From the date hereof through the
Closing Date, the Seller agrees that it shall conduct its business in the
ordinary course and, in a manner such that the representations and warranties
contained in Article 4 shall continue to be true and correct on and as of the
Closing Date as if made on and as of the Closing Date. The Seller shall give the
Buyer prompt notice of any event, condition or circumstance occurring from the
date hereof through the Closing Date that would constitute a violation or breach
of any representation or warranty, whether made as of the date hereof or as of
the Closing Date, or that would constitute a violation or breach of any covenant
of the Seller contained in this Agreement.
6.2. Corporate Examinations and Investigations. Prior to the
Closing Date, the Seller agrees that the Buyer shall be entitled, through its
employees and representatives, to make such investigation of the properties,
businesses and operations of the Seller, and such examination of the books,
records and financial condition of the Seller, upon reasonable written request.
Any such investigation and examination shall be conducted at reasonable times
and under reasonable circumstances, and the Seller shall cooperate fully
therein. No investigation by the Buyer shall diminish or obviate any of the
representations, warranties, covenants or agreements of the Seller contained in
this Agreement.
6.3. Publicity. The parties agree that, except to the extent
required by Law or the rules or regulations of any applicable stock exchange, no
publicity release or announcement concerning this Agreement or the Contemplated
Transactions shall be made without advance approval thereof by the Seller and
the Buyer.
20
6.4. Indemnification of Brokerage. The Seller represents and
warrants to the Buyer that except as set forth on Schedule 6.4 no Broker has
acted on behalf of the Seller in connection with this Agreement or the
Contemplated Transactions, and that there are no brokerage commissions, finder's
fees or similar fees or commissions payable in connection therewith based on any
agreement, arrangement or understanding with the Seller, or any action taken by
the Seller. The Seller agrees to indemnify and hold harmless the Buyer from any
claim or demand for commission or other compensation by any Broker claiming to
have been employed by or on behalf of the Seller, and to bear the cost of legal
expenses incurred in defending against any such claim. The Buyer represents and
warrants to the Seller that no Broker has acted on behalf of the Buyer in
connection with this Agreement or the Contemplated Transactions, and that there
are no brokerage commissions, finders' fees or similar fees or commissions
payable in connection therewith based on any agreement, arrangement or
understanding with the Buyer, or any action taken by the Buyer. The Buyer agrees
to indemnify and hold harmless the Seller from any claim or demand for
commission or other compensation by any Broker claiming to have been employed by
or on behalf of the Buyer, and to bear the cost of legal expenses incurred in
defending against any such claim.
6.5. Required Consents. Prior to the Closing, the Seller and
its oversight committee shall use reasonable efforts to obtain the necessary
consents to the Contemplated Transactions from its limited partners in
accordance with the terms and conditions of the Mondial Industries Limited
Partnership Amended and Restated Limited Partnership Agreement (the "Limited
Partnership Agreement"), giving them ten (10) business days to consider the
proposal and recommending their approval of such proposal; and the Seller shall
notify the Buyer of the status of such consents immediately thereafter. The
Seller shall use reasonable efforts to obtain (i) all the necessary consents to
the assignment to the Buyer of the patent licenses under the License Agreement,
dated as of June 30, 1994, between ITB Licensing Urheberrechts-Und
Markenverwertungsgmbh, and Mondial Industries Limited Partnership (the "License
Agreement"), in the form of Exhibit I, and (ii) all other Required Consents. If
the Seller fails to receive any of the Required Consents specified on Schedule
4.11 and notifies the Buyer of such failure prior to the Closing, the Buyer's
remedy for such failure is to terminate this Agreement; provided if the Buyer
chooses not to terminate this Agreement and proceeds with the Contemplated
Transactions, the Buyer's sole rights with respect to such failure to obtain
such specified Required Consents prior to the Closing are as set forth in
Section 6.6 and such breach on the part of the Seller shall be deemed waived by
the Buyer.
6.6. Further Assurances. At any time and from time to time
during the one (1) year period following the Closing, at the Buyer's or the
Sellers' request and without further consideration, the Seller or the Buyer, as
the case may be, shall execute and deliver such further documents, perform such
further acts, and fully cooperate with each other, as may be reasonably
necessary in order to effectively transfer and convey the Assets to the Buyer,
on the terms herein contained, and to otherwise comply with the terms of this
Agreement and consummate the Contemplated Transactions (the "Efforts") ,
including, without limitation, (i) in the event any of the Required Consents are
21
not obtained and the Buyer proceeds with the Closing without such Required
Consents, the Seller shall assist the Buyer in obtaining any such Required
Consent after the Closing Date until such time as such Required Consent has been
obtained and (ii) the Seller shall use reasonable efforts to obtain an estoppel
certificate from Tri-Tech Plastics, LLC in a form reasonably acceptable to the
Buyer; provided such Efforts by the Seller or the Buyer does not require a
payment of more than $25,000.
6.7. Employees. The Buyer shall offer employment to all
current full time employees of the Seller other than Xxxx Xxxx, Xxxxxxx X.
Xxxxxx, Xxxxxx X'Xxxx and Xxxxx X. Xxx ("Transferred Employees") as of the
Closing; provided, however, that nothing shall be construed to require the Buyer
to limit or restrict the ability of the Buyer to terminate the employment of the
Transferred Employees following the Closing or to maintain the terms of such
employment, including any particular level of benefits.
6.8. License Agreement Research. Upon the request of the Buyer
after the Closing, the Seller shall deliver to the Buyer all the legal research
and memoranda in connection with the License Agreement and any disputes
thereunder.
6.9. 401(k) Plan. The Seller will use all reasonable efforts
to file a determination letter for the 401(k) Plan prior to the Closing and to
the extent not filed before the Closing, the Seller will provide any necessary
information and shall assist the Buyer to the extent the Buyer reasonably deems
necessary to complete the filing and receive a favorable determination letter
for the 401(k) Plan.
6.10. Partners of the Seller. On the Closing Date, the Seller
shall provide to the Buyer a list of the names and address of its limited
partners and general partners and, at any time and from time to time during the
one (1) year period after the Closing Date, the Seller shall update the
information as necessary to make the list accurate and the Seller shall provide
such updated list to the Buyer as soon as practicable.
7. Conditions Precedent to the Obligations of the Buyer. The obligation
of the Buyer to enter into and complete the Closing is subject, to the
fulfillment on or prior to the Closing Date of the following conditions, any one
or more of which may be waived by it:
7.1. Representations and Covenants. The representations and
warranties of the Seller contained in this Agreement shall be true on and as of
the Closing Date with the same force and effect as though made on and as of the
Closing Date. The Seller shall have performed and complied in all material
respects with all covenants and agreements required by this Agreement to be
performed or complied with by the Seller on or prior to the Closing Date. The
Seller shall have delivered to the Buyer a certificate, dated the date of the
Closing and signed by an authorized and appropriate representative of the
Seller, to the foregoing effect.
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7.2. Consents and Approvals. Certain Required Consents as
specified in Schedule 4.11 shall have been obtained and be in full force and
effect, and the Buyer shall have been furnished with evidence reasonably
satisfactory to it that such specified Required Consents have been obtained.
7.3. Opinion of Counsel to the Seller. The Buyer shall have
received the opinion of Reinhart, Boerner, Van Deuren, Xxxxxx & Rieselbach,
S.C., counsel to the Seller, dated the date of the Closing, addressed to the
Buyer, covering the matters set forth on Exhibit C.
7.4. Additional Closing Documents of the Seller. The Seller
shall have executed and delivered to the Buyer the following documents, each
dated the Closing Date: (a) a xxxx of sale and assignment in the form of Exhibit
D; (b) a trademark assignment in the form of Exhibit E;
(c) a patent assignment in the form of Exhibit F;
(d) such other assignments in recordable form
appropriate for each jursdiction where trademark or service xxxx registrations
or applications may be issued or pending;
(e) a general warranty deed in the form of Exhibit G
(a "Deed") for each piece of Owned Real Property; and
(f) such further instruments of sale, transfer,
conveyance, assignment or delivery covering the Assets or any part thereof as
the Buyer may reasonably require to assure the full and effective sale,
transfer, conveyance, assignment or delivery to it of the Assets (including the
Permits).
7.5. Escrow Agreement. The Seller and the Escrow Agent shall
have entered into the Escrow Agreement, in the form of Exhibit B.
7.6. Non-Compete Agreements. Each of the Consulting and
Non-Compete Agreement and Non-Compete Agreement, which have been entered into on
the date hereof, between each of Xxxx Xxxx and Xxxxxxx X. Xxxxxx and the Buyer,
in the form of Exhibits H-1 and H-2, respectively, remain in full force and
effect.
7.7. Xxxx-Xxxxx-Xxxxxx. The waiting period specified in the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, and the rules and
regulations promulgated thereunder (the "HSR Act"), including any extensions
thereof, shall have expired.
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7.8. Release of Prior Indebtedness. The Buyer shall have
received evidence satisfactory to it that upon payment of the Assumed Funded
Debt by the Buyer as set forth in Section 2.4, the Seller shall be released from
any and all liability with respect to and will have no further obligations in
connection with the Assumed Funded Debt, including, without limitation,
appropriate termination agreements and releases from any Liens.
7.9. License Agreement. The Seller has obtained all the
necessary consents to the assignment to the Buyer of the patent licenses under
the License Agreement in the form of Exhibit I.
7.10. Approval of the Seller's Limited Partners. The Seller
has obtained the necessary consents to the Contemplated Transactions from its
limited partners.
7.11. Title Insurance. The Buyer shall have received an
owner's extended coverage policy of title insurance with respect to each parcel
of Owned Real Property, issued on the date of Closing by Chicago Title Insurance
Company or another title insurance company acceptable to counsel for the Buyer
(the "Title Company"). Each such title insurance policy shall be in an amount
designated by the Buyer and shall insure the Buyer's ownership of fee title
without any of the Schedule B standard preprinted exceptions (other than taxes
not yet due and payable) and free and clear of Title Defects and other
exceptions to or exclusions from coverage other than Permitted Liens. Each such
title insurance policy shall otherwise be in form reasonably satisfactory to
counsel to the Buyer.
7.12. Survey. The Buyer shall have received a current survey
of each parcel of Owned Real Property prepared in insurable form in accordance
with standards applicable to registered and licensed land surveyors making
surveys in the States in which such parcels are located and in accordance with
the further provisions of this Section 7.12. Each such survey shall be certified
to the Buyer and the Title Company and shall show (i) the courses and distances
of all boundary lines of such parcel (including, appurtenant easements), (ii)
the location of all Improvements situated on or above such parcel and on or
above any easements or rights of way affecting said parcel, (iii) all
encroachments of adjoining properties or improvements onto such parcel, (iv) all
encroachments of Improvements onto any adjoining property, (v) the location of
all easements and other rights burdening such parcel and all encroachments of
Improvements onto the areas of such easements, (vi) the location of all
roadways, alleys, rights of way and the like affecting such parcel, (vii) all
accessways from such parcel to public streets and (viii) such other facts and
conditions affecting such parcel as are appropriate, or as may have been
reasonably requested by the Buyer, to be shown on such survey. Each such survey
shall otherwise be in form reasonably satisfactory to counsel for the Buyer.
7.13. Tax Returns. The Buyer shall have received any and all
real property transfer tax returns and other similar filings required by law in
connection with the transactions contemplated hereby and relating to the Owned
Real Property, any part
24
thereof or ownership interest therein, all duly and properly executed and
acknowledged by the Seller. The Seller shall also have executed such affidavits
in connection with such filings as shall have been required by law or reasonably
requested by the Buyer.
7.14. FIRPTA Affidavit. The Buyer shall have received an
affidavit of an officer of the Seller sworn to under penalty of perjury, setting
forth the Seller's address and Federal tax identification number and stating
that the Seller is not a "foreign person" within the meaning of Section 1445 of
the Code.
8. Conditions Precedent to the Obligation of the Seller. The obligation
of the Seller to enter into and complete the Closing is subject, to the
fulfillment on or prior to the Closing Date of the following conditions, any one
or more of which may be waived by the Seller:
8.1. Representations and Covenants. The representations and
warranties of the Buyer contained in this Agreement shall be true on and as of
the Closing Date with the same force and effect as though made on and as of the
Closing Date. The Buyer shall have performed and complied in all material
respects with all covenants and agreements required by this Agreement to be
performed or complied with by it on or prior to the Closing Date. The Buyer
shall have delivered to the Seller a certificate, dated the date of the Closing
and signed by an officer of the Buyer, to the foregoing effect.
8.2. Additional Closing Documents of the Buyer. The Buyer
shall have executed and delivered to the Seller the following documents, each
dated the Closing Date:
(a) an assumption of liabilities in the form of
Exhibit J (the "Assumption of Liabilities"); and
(b) a Real Property Lease Assignment and Assumption
Agreement for each Real Property Lease; and
(c) the Registration Rights Agreement in the form of
Exhibit K.
8.3. Xxxx-Xxxxx-Xxxxxx. The waiting period specified in the
HSR Act, including any extensions thereof, shall have expired.
8.4. License Agreement. The Seller has obtained all the
necessary consents to the assignment to the Buyer of the patent licenses under
the License Agreement.
8.5. Approval of the Seller's Limited Partners. The Seller has
obtained the necessary consents to the Contemplated Transactions from its
limited partners and in accordance with the terms and conditions of the Limited
Partnership Agreement.
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8.6. Opinion of Counsel to the Buyer. The Seller shall have
received the opinion of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, counsel to the
Buyer, dated the date of the Closing, addressed to the Seller, covering the
matters set forth on Exhibit L.
9. Post-Closing Covenants and Agreements.
9.1. Prorations. All real estate and personal property Taxes
and all rents, utilities and other charges against, or payable by the owner of,
any of the Assets (including the Real Property) relating to a time period
beginning prior to, and ending after, the Closing shall be prorated (based on
the most recent available tax statement, latest tax valuation and latest bills)
as of the Closing. If the Closing occurs before the tax rate is fixed for the
then current fiscal or calendar year, whichever is applicable, the proration of
the corresponding Taxes shall be on the basis of the tax rate for the last
preceding year applied to the latest assessed valuation. The Seller's estimated
accrued liability (to the Closing) for any of the above-described Taxes and
charges that are due and payable after the Closing shall be a credit against the
amount payable at the Closing by the Buyer.
9.2. Bulk Sales Laws. The Buyer hereby waives compliance with
the provisions of any bulk transfer laws applicable to the transactions
contemplated by this Agreement. The Seller agrees promptly and diligently to pay
and discharge when due or to contest or litigate all Excluded Liabilities that
are asserted against the Buyer by reason of any non-compliance with such laws.
9.3. Collection of Receivables. The Seller agrees that the
Buyer shall have the right and authority to collect for its own account or the
account of its affiliates all receivables of the Seller that are transferred and
assigned to the Buyer as provided herein and the Buyer and its affiliates have
the right to endorse with the name of the Seller any checks received on account
of any such receivable. The Seller agrees that it will promptly transfer and
deliver to the Buyer any cash or other property that the Seller may receive in
respect of such receivables.
9.4. Further Assurances. At any time and from time to time
after the Closing, at the Buyer's request and without further consideration, the
Seller shall execute and deliver such further documents, and perform such
further acts, as may be necessary in order to effectively transfer and convey
the Assets to the Buyer, on the terms herein contained, and to otherwise comply
with the terms of this Agreement and consummate the Contemplated Transactions.
10. Survival of Representations and Warranties of the Seller. All
representations, warranties, covenants and agreements in this Agreement shall
survive the execution and delivery hereof and the Closing hereunder. All
representations and warranties of the Seller contained in this Agreement shall
terminate and expire six (6) months after the Closing Date, and no claim or
demand for indemnification pursuant to Article 11 or otherwise (except for fraud
by or on behalf of the Seller for which a claim
26
may be made against the Seller and not the other Seller Related Parties except
pursuant to Sections 179.57, 179.58 and 179.74(1) of the Uniform Limited
Partnership Act of the State of Wisconsin (the "WULPA")) shall be made after
such date, except for those claims or demands for indemnification pursuant to
Article 11, of which the Buyer has notified the Seller in writing prior to such
date in accordance with the terms of this Agreement.
11. Indemnification.
11.1. Obligation of the Seller to Indemnify. Subject to the
limitations contained in Article 10 and Section 11.4, the Seller agrees to
indemnify, defend and hold harmless the Buyer (and its directors, officers,
employees, affiliates, successors and assigns) from and against all losses,
liabilities, damages, deficiencies, demands, claims, actions, judgments or
causes of action, assessments, costs or expenses (including, without limitation,
interest, penalties and reasonable fees, expenses and disbursements of
attorneys, experts, personnel and consultants incurred by the indemnified party
in any action or proceeding between the indemnifying party and the indemnified
party or between the indemnified party and any third party, or otherwise)
("Losses") based upon, or arising out of (a) any inaccuracy in or any breach of
any representation, warranty, covenant or agreement of the Seller contained in
this Agreement or in any Documents delivered by the Seller pursuant to this
Agreement or (b) any Excluded Liability. It is understood and agreed by the
Buyer that, except as expressly provided in this Article 11 and in respect of
fraud by or on behalf of the Seller for which a claim may be made against the
Seller and not the other Seller Related Parties except pursuant to Sections
179.57, 179.58 and 179.74(1) of the WULPA, after the Closing Date, the Seller,
its general partner, limited partners, and their shareholders, directors,
officers, affiliates, employees, successors and assigns (collectively, the
"Seller Related Parties") will not have any obligation or liability to the
Buyer, and the Buyer will have no claim or recourse against the Seller Related
Parties, as a result of the events or of circumstances set forth in this Article
11 or otherwise arising out of or incurred in connection with the Contemplated
Transactions, it being understood and agreed that the remedy provided for in
this Article 11 will be the sole and exclusive remedy for any such claim by the
Buyer for any such matters, whether such claims are framed in contract, tort or
otherwise, except for fraud by or on behalf of the Seller for which a claim may
be made against the Seller and not the other Seller Related Parties except
pursuant to Sections 179.57, 179.58 and 179.74(1) of the WULPA.
11.2. Obligation of the Buyer to Indemnify. The Buyer shall
indemnify, defend and hold harmless the Seller from and against any Losses based
upon, arising out of or otherwise in respect of (a) any inaccuracy in or any
breach of any representation, warranty, covenant or agreement of the Buyer
contained in this Agreement or in any Documents delivered by the Buyer pursuant
to this Agreement or (b) any Assumed Liability.
11.3. Notice and Opportunity to Defend.
27
11.3.1 Notice of Asserted Liability. The party making a claim
under this Article 11 is referred to as the "Indemnitee," and the party against
whom such claims are asserted under this Article 11 is referred to as the
"Indemnifying Party." All claims by any Indemnitee under this Article 11 shall
be asserted and resolved as follows: Promptly after receipt by an Indemnitee of
notice of any demand, claim or circumstances which, with the lapse of time,
would or might give rise to a claim or the commencement (or threatened
commencement) of any action, proceeding or investigation (an "Asserted
Liability") that may result in a Loss, an Environmental Claim or Environ mental
Compliance Costs, the Indemnitee shall give notice thereof (the "Claims Notice")
to the Indemnifying Party. The Claims Notice shall describe the Asserted
Liability in reasonable detail, and shall indicate the amount (estimated, if
necessary and to the extent feasible) of the Loss that has been or may be
suffered by the Indemnitee.
11.3.2 Opportunity to Defend. (a) The Indemnifying Party may
elect to compromise or defend, at its own expense and by its own counsel, any
Asserted Liability, except any Asserted Liability which is likely to result in
Environmental Compliance Costs, which shall be subject to Section 11.3.2(b). If
the Indemnifying Party elects to compromise or defend such Asserted Liability,
it shall within 30 days (or sooner, if the nature of the Asserted Liability so
requires) notify the Indemnitee of its intent to do so, and the Indemnitee shall
cooperate, at the expense of the Indemnifying Party, in the compromise of, or
defense against, such Asserted Liability. If the Indemnifying Party elects not
to compromise or defend the Asserted Liability, fails to notify the Indemnitee
of its election as herein provided or contests its obligation to indemnify under
this Agreement, the Indemnitee may pay, compromise or defend such Asserted
Liability. Notwithstanding the foregoing, neither the Indemnifying Party nor the
Indemnitee may settle or compromise any claim over the objection of the other;
provided, however, that if the settlement or compromise does not result in any
liability to the Indemnifying Party, consent to settlement or compromise shall
not be unreasonably withheld. In any event, the Indemnitee and the Indemnifying
Party may participate, at their own expense, in the defense of such Asserted
Liability. If the Indemnifying Party chooses to defend any claim, the Indemnitee
shall make available to the Indemnifying Party any books, records or other
documents within its control that are necessary or appropriate for such defense.
(b) Notwithstanding anything to the contrary in
Section 11.3.2(a), the Indemnitee shall have the exclusive right at its option
to manage and control all actions resulting in Environmental Compliance Costs
with respect to which the Indemnitee has made a claim for indemnification
pursuant to Section 11.1 hereof. The Indemnitee shall keep the Indemnifying
Party fully informed of the progress of such actions. The Indemnifying Party
shall be obligated to indemnify the Indemnitee for all Environmental Compliance
Costs resulting from such actions; provided, however, that the Indemnifying
Party shall not be obligated to indemnify the Indemnitee pursuant to Section
11.1 hereof to the extent that any Environmental Compliance Costs for which the
Indemnitee seeks indemnification are not incurred or undertaken in a manner in
which a prudent business person acting in a commercially reasonable manner,
seeking to mitigate such Environmental Compliance Costs to the extent reasonably
possible, would do so.
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11.4. Limitations on Indemnification. The indemnification
provided for in Section 11.1(a) for breaches of representations or warranties
and Section 11.1(b) shall be subject to the following limitations:
(a) The Seller shall not be obligated to pay any
amounts for such indemnification except those based upon, arising out of or
otherwise in respect of Section 4.21, 4.28(ii), 4.31(a) or 4.31(b) (the "Basket
Exclusions"), until the aggregate of such amounts, exclusive of those in respect
of the Basket Exclusions, equals $500,000 (the "Basket Amount"), whereupon the
Seller shall be obligated to pay in full all such amounts for such
indemnification in excess of the Basket Amount.
(b) The Seller shall be obligated to pay any amounts
for indemnification based on the Basket Exclusions without regard to the
individual or aggre gate amounts thereof and without regard to whether all other
indemnification payments shall have exceeded, in the aggregate, the Basket
Amount.
(c) The Seller shall not be obligated to pay any
amounts for indemnification (except those based upon, arising out of the Basket
Exclusions) in excess of the Escrow Account in the aggregate. The Escrow Account
shall be the only source of payment for indemnification or otherwise (except for
fraud by or on behalf of the Seller) to the Buyer and the Buyer shall not be
entitled to make any claim against the Seller Related Parties (other than the
Seller as provided in Article 11) or set-off against the Note; provided, however
that the Buyer may make a claim of fraud by or on behalf of the Seller against
the Seller and, if the Buyer has made such a claim of fraud by or on behalf of
the Seller against the Seller and if the Seller distributed its assets in
violation of Section 179.57, 179.58 or 179.74(1) of the WULPA, then the Buyer
may seek to collect amounts owing from the Seller for such claims from any
Seller Related Party to the extent and in proportion to funds distributed to
such Seller Related Party in violation of those sections of the WULPA.
12. Termination of Agreement.
12.1. Termination. This Agreement may be terminated prior to
the Closing as follows:
(a) by the Seller, if the Buyer has breached in any
material respect any representation, warranty, covenant or agreement contained
in this Agreement, which breach cannot reasonably be, or is not, cured by the
Closing Date;
(b) by the Buyer, if the Seller has breached in any
material respect any representation, warranty, covenant or agreement contained
in this Agreement which breach cannot reasonably be, or is not, cured by the
Closing Date;
29
(c) by the Seller, if the Closing Date shall not have
occurred before March 31, 1999, for any reason other than the failure of the
Seller to perform its obligations hereunder;
(d) by the Buyer, if the Closing Date shall not have
occurred before March 31, 1999, for any reason other than the failure of the
Buyer to perform its obligations hereunder;
(e) by the Buyer, if within ten (10) business days
from the date hereof, the Seller has not received the necessary consents to the
Contemplated Transactions from its limited partners and in accordance with the
Limited Partnership Agreement; provided, however, that the Buyer must exercise
such right within 15 business days as of the date hereof;
(f) by the Buyer or the Seller, if within ten (10)
business days from the date hereof, the Seller has not obtained all the
necessary consents to the assignment to the Buyer of the patent licenses under
the License Agreement in the form of Exhibit I; provided, however, that such
party must exercise such right within 15 business days as of the date hereof; or
(g) at any time on or prior to the Closing Date, by
mutual written consent of the Seller and the Buyer.
If this Agreement so terminates, it shall become null and void
and have no further force or effect, except as provided in Section 12.2.
12.2. Survival After Termination. If this Agreement terminates
pursuant to Section 12.1, it shall subject to the limitations set forth in
Article 11, become null and void and have no further force or effect, except
that any such termination shall be without prejudice to the rights of any party
on account of the nonsatisfaction of the condi tions set forth in Articles 7 and
8 resulting from the intentional or willful breach or violation of the
representations, warranties, covenants or agreements of another party under this
Agreement. Notwithstanding anything in this Agreement to the contrary, Sec tions
6.4, 6.5, 13.2 and 13.6 shall survive any termination of this Agreement.
13. Miscellaneous.
13.1. Certain Definitions. As used in this Agreement, the
following terms have the following meanings:
"affiliate" means, with respect to any person, any other person
controlling, controlled by or under common control with, such person.
"Assumed Funded Debt" means the funded debt of the Seller listed on
Schedule 13.1.
30
"Benefit Plan" means any employee benefit plan, arrangement, policy or
commitment (whether or not an employee benefit plan within the meaning of
section 3(3) of ERISA), including, without limitation, any employment,
consulting or deferred compensation agreement, executive compensation, bonus,
incentive, pension, profit-sharing, savings, retirement, stock option, stock
purchase or severance pay plan, any life, health, disability or accident
insurance plan or any holiday or vacation practice, as to which the Seller or
any Commonly Controlled Entity has or in the future could have any direct or
indirect, actual or contingent liability.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commonly Controlled Entity" means any entity which is under common
control with the Seller within the meaning of Code section 414(b), (c), (m), (o)
or (t).
"Documents" means documents, Contracts, instruments, certificates,
notices, consents, affidavits, letters, telegrams, telexes, statements,
schedules (including Schedules to this Agreement), exhibits (including Exhibits
to this Agreement) and any other papers whatsoever.
"Employee" means any individual employed at any time by the Seller.
"Environment" means navigable waters, waters of the contiguous zone,
ocean waters, natural resources, surface waters, ground water, drinking water
supply, land surface, subsurface strata, ambient air, both inside and outside of
buildings and structures, man-made buildings and structures, and plant and
animal life on earth.
"Environmental Compliance Costs" means any expenditures, costs,
assessments or expenses (including, without limitation, any expenditures, costs,
assessments or expenses in connection with the conduct of any Remedial Action,
as well as reasonable fees, disbursements and expenses of attorneys, experts,
personnel and consultants), whether direct or indirect, necessary to cause the
operations, real property, assets, equipment or facilities owned, leased,
operated or used by the Seller to be in compliance with any and all
requirements, as in effect at the Closing Date, of Safety and Environmental
Laws, principles of common law concerning pollution, protection of the
Environment or health and safety, or Permits issued pursuant to Safety and
Environmental Laws; provided, however, that Environmental Compliance Costs do
not include expenditures, costs, assessments or expenses necessary in connection
with normal maintenance of such real property, assets, equipment or facilities
or the replacement of equipment in the normal course of events due to ordinary
wear and tear.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
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"Hazardous Substance" means any toxic waste, pollutant, hazardous
substance, toxic substance, hazardous waste, special waste, industrial substance
or waste, petroleum or petroleum-derived substance or waste, radioactive
substance or waste, or any constituent of any such substance or waste, or any
other substance regulated under or defined by any Safety and Environmental Law.
"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto
and all patents, patent applications and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions and
reexaminations thereof; (b) all trademarks, service marks, trade dress, logos,
trade names and corporate names, together with all translations, adaptations,
derivations and combinations thereof and including all goodwill associated
therewith and all applications, registrations and renewals in connection
therewith; (c) all copyrightable works, all copyrights and all applications,
registrations and renewals in connection therewith; (d) all mask works and all
applications, registrations and renewals in connection therewith; (e) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information and business and
marketing plans and proposals); (f) all computer software (including data and
related documentation); (g) all other proprietary rights; and (h) all copies and
tangible embodiments in any of the foregoing (in whatever form or medium).
"IRS" means the Internal Revenue Service.
"knowledge of the Seller" means the actual knowledge of any of Xxxx
Xxxx, Xxxxxxx X. Xxxxxx, Xxx Xxxxx, Xxxxxx X'Xxxx, Xxxxxx X. Xxxxx, Xx. or Xxxx
Xxxx after due inquiry.
"Liability" means any direct or indirect indebtedness, liability,
claim, loss, damage, deficiency, obligation or responsibility, known or unknown,
fixed or unfixed, xxxxxx or inchoate, liquidated or unliquidated, secured or
unsecured, accrued, absolute, contingent or otherwise, of a kind required by
generally accepted accounting principles to be set forth on a financial
statement or in the notes thereto.
"Lien" means any lien, pledge, mortgage, security interest, claim,
lease, license, charge, option, right of first refusal, easement, servitude,
transfer restriction, encumbrance or any other restriction or limitation
whatsoever.
"Pension Plan" means any Benefit Plan which is a pension plan within
the meaning of ERISA section 3(2) (regardless of whether the plan is covered by
ERISA).
"person" means any individual, corporation, partnership, firm, joint
venture, limited liability company, association, joint-stock company, trust,
unincorporated organization, Governmental Body or other entity.
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"property" or "properties" means real, personal or mixed property,
tangible or intangible.
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
or through the indoor or outdoor Environment or into, through or out of any
property, including the movement of Hazardous Substances through or in the air,
soil, surface water, ground water or property.
Remedial Action" means all actions, whether voluntary or involuntary,
reasonably necessary to comply with, or discharge any obligation under, Safety
and Environmental Laws to (A) clean up, remove, treat, cover or in any other way
adjust Hazardous Substances in the indoor or outdoor Environment; (B) prevent or
control the Release of Hazardous Substances so that they do not migrate or
endanger or threaten to endanger public health or welfare or the Environment; or
(C) perform remedial studies, investigations, restoration and post-remedial
studies, investigations and monitoring on, about or in any real property.
"Retiree Welfare Plan" means any welfare plan (as defined in Section
3(1) of ERISA) that provides benefits to current or former employees beyond
their retirement or other termination of service (other than coverage mandated
by COBRA, the cost of which is fully paid by the current or former employee or
his or her dependents).
"Safety and Environmental Laws" means all Laws and Orders relating to
pollution, protection of the Environment, public or worker health and safety, or
the emission, discharge, release or threatened release of pollutants,
contaminants or industrial, toxic or hazardous substances or wastes into the
Environment or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of pollutants,
contaminants or industrial, toxic or hazardous substances or wastes, including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. ss. 9601 et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. ss. 6901 et seq., the Toxic Substances Control Act, 15
U.S.C. ss. 2601 et seq., the Federal Water Pollution Control Act, 33 U.S.C. ss.
1251 et seq., the Clean Air Act, 42 U.S.C. ss. 7401 et seq., the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. ss. 121 et seq., the
Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq., the Asbestos
Hazard Emergency Response Act, 15 U.S.C. ss.2601 et seq., the Safe Drinking
Water Act, 42 U.S.C. ss. 300f et seq., the Oil Pollution Act of 1990y and
analogous state acts.
"Subsidiary" means as to any person, any corporation 50% or more of the
outstanding voting power of which, or any partnership, joint venture or other
entity 50% or more of the total equity interest or which, is directly or
indirectly owned by such person.
"Tax Return" means all tax returns, reports, forms, and other such
documents.
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13.2. Consent to Jurisdiction and Service of Process. Any
legal action, suit or proceeding arising out of or relating to this Agreement,
each and every agreement and instrument contemplated hereby or the Contemplated
Transactions may be instituted in any federal court of the Southern District of
New York or any state court located in New York County, State of New York, and
each party agrees not to assert, by way of motion, as a defense or otherwise, in
any such action, suit or proceeding, any claim that it is not subject personally
to the jurisdiction of such court, that the action, suit or proceeding is
brought in an inconvenient forum, that the venue of the action, suit or
proceeding is improper or that this Agreement, or each such other agreement and
instrument or the subject matter hereof or thereof may not be enforced in or by
such court. Each party further irrevocably submits to the jurisdiction of such
court in any such action, suit or proceeding. Any and all service of process and
any other notice in any such action, suit or proceeding shall be effective
against any party if given personally or by registered or certified mail, return
receipt requested, or by any other means of mail that requires a signed receipt,
postage prepaid, mailed to such party as herein provided. Nothing herein
contained shall be deemed to affect the right of any party to serve process in
any manner permitted by law or to commence legal proceedings or otherwise
proceed against any other party in any other jurisdiction.
13.3. Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally, sent
by facsimile transmission or sent by certified, registered or express mail,
postage prepaid. Any such notice shall be deemed given when so delivered
personally or sent by facsimile transmission or, if mailed, five days after the
date of deposit in the United States mails, as follows:
(i) if to the Buyer, to:
Playtex Products, Inc.
000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
34
(ii) if to the Seller, to:
Mondial Industries Limited Partnership
000 Xxxxxxx Xxxxxxx
Xxxxxxxxxxx, Xxxx 00000
Attention: Xxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Reinhart, Boerner, Van Deuren, Xxxxxx &
Rieselbach, S.C.
0000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may by notice given in accordance with this Section to the other
parties designate another address or person for receipt of notices hereunder.
13.4. Entire Agreement. This Agreement (including the Exhibits
and Schedules) and any collateral agreements executed in connection with the
consummation of the Contemplated Transactions contain the entire agreement among
the parties with respect to the transactions contemplated hereby and supersede
all prior agreements, written or oral, with respect thereto.
13.5. Waivers and Amendments; Non-Contractual Remedies. This
Agreement may be amended, superseded, canceled, renewed or extended, and the
terms hereof may be waived, only by a written instrument signed by the Buyer and
the Seller or, in the case of a waiver, by the party waiving compliance. No
delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part of
any party of any such right, power or privilege, nor any single or partial
exercise of any such right, power or privilege, preclude any further exercise
thereof or the exercise of any other such right, power or privilege.
13.6. Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such State.
35
13.7. Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and legal repre sentatives. This Agreement is not assignable except
by operation of law, except that the Buyer may assign its rights hereunder to
any of its affiliates, to any successor to all or substantially all of its
business or assets or to any bank or other financial institution that may
provide financing for the Contemplated Transactions.
13.8. Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a number
of copies hereof each signed by less than all, but together signed by all of the
parties hereto.
13.9. Exhibits and Schedules. The Exhibits and Schedules are a
part of this Agreement as if fully set forth herein. All references herein to
Sections, Exhibits and Schedules shall be deemed references to such parts of
this Agreement, unless the context shall otherwise require.
13.10. Headings. The headings in this Agreement are for
reference only, and shall not affect the interpretation of this Agreement.
36
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
BUYER:
PLAYTEX PRODUCTS, INC.
By: ____________________________
Name: Xxxxxxx X. Xxxx
Title: Executive Vice President and
Chief Financial Officer
SELLER:
MONDIAL INDUSTRIES LIMITED
PARTNERSHIP
By: Hazelbank, Inc., its general partner
By: _________________________
Name:
Title:
