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EXHIBIT 2.(ii)
STOCK PURCHASE AGREEMENT
AMONG
XXXXXX PARK INDUSTRIES, INC.,
HCHC, INC.
AND
SI TECHNOLOGIES, INC.
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STOCK PURCHASE AGREEMENT
AGREEMENT entered into as of July ___, 1998, by and among SI
Technologies, Inc., a Delaware corporation ("Buyer"), XXXXXX PARK INDUSTRIES,
INC., a Delaware corporation ("DPI") and HCHC, INC., a Delaware corporation
("HCHC") (DPI and HCHC are referred to herein collectively as the "Sellers" and
sometimes individually referred to as "Seller"). Buyer and Sellers are referred
to herein collectively as the "Parties." Capitalized terms not defined in these
Recitals are defined in Section 1.
WHEREAS, Buyer wishes to acquire the load cell and sensor
business of Harnischfeger Industries, Inc., a Delaware corporation ("HII");
WHEREAS, the load cell and sensor business is conducted by Revere
Transducers, Inc., a Delaware corporation ("RTI"), Revere Corporation of Europe
GmbH, a corporation organized under the laws of Germany ("RCE") and Revere
Transducers Europe BV, a corporation organized under the laws of the Netherlands
("RTE"). RTI, RCE and RTE are referred to herein collectively as the "Companies"
and sometimes individually as "Company";
WHEREAS, DPI owns all of the outstanding capital stock of RTI;
RTI owns all of the outstanding capital stock of RCE; HCHC owns all of the
outstanding capital stock of Meadowgrip Limited, a corporation organized under
the laws of England ("Meadowgrip"); Meadowgrip owns all of the outstanding
capital stock of Selectaid Limited, a corporation organized under the laws of
England ("Selectaid"); and Selectaid owns all of the outstanding capital stock
of RTE;
WHEREAS, subject to the terms and conditions set forth in this
Agreement, Buyer desires to purchase from Sellers, and Sellers desire to sell to
Buyer, the Revere Shares;
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows.
Section 1. Definitions.
"ABN" shall mean ABN Amro Bank NV.
"Adjusted Closing Balance Sheet" has the meaning set forth in
Section 2(d)(iv) below.
"Adverse Consequences" means all actions, suits, proceedings,
investigations, charges, complaints, claims, injunctions, judgments, orders,
decrees, rulings, damages, dues,
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penalties, fines, costs, reasonable amounts paid in settlement, liabilities,
obligations, taxes, liens, losses, expenses, and fees, including court costs and
reasonable attorneys' fees and expenses.
"Affiliate" means, with respect to any Person, any other Person
that, directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, the first mentioned Person
within the meaning of the Securities Exchange Act.
"Applicable Rate" means the prime or equivalent rate of interest
announced from time to time by Chase Manhattan Bank of New York.
"Books and Records" means all lists, files and documents relating
to the Business and all general ledgers and underlying books of original entry
and other financial records of the Business, including all of such records and
materials maintained at the offices of RTI, RCE and RTE, and including
advertising matter, catalogues, price lists, correspondence, mailing lists,
customer lists, distribution lists, photographs, production data, sales and
promotional materials and records, purchasing materials and records, personnel
records, manufacturing and quality control records, and procedures, blueprints,
research and development files, records, data and laboratory books, intellectual
property disclosures, media materials, and plates, sales order files and
litigation files, personnel records, accounting records, correspondence,
manuals, engineering data, designs, drawings, blueprints, plans, specifications,
computer media, software and software documentation, sales literature,
catalogues and promotional items.
"Business" means the design, manufacture and sale of load cells
and sensors for industrial scales and weighing systems.
"Buyer's Welfare Plans" have the meaning set forth in Section
6(c)(ii) below.
"Buyer's Savings Plan" has the meaning set forth in Section
6(c)(vii) below.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. Section 9600 et seq.), as
amended.
"Cerritos Plant" means the facilities owned or operated by DPI or
its Affiliates located at 00000 Xxxxx Xxxx and 00000 Xxxxxxx Xxx, Xxxxxxxx,
Xxxxxxxxxx.
"Cash" means cash and cash equivalents (including marketable
securities and short term investments).
"Closing" has the meaning set forth in Section 2(c) below.
"Closing Balance Sheet" has the meaning set forth in Section
2(d)(i) below.
"Closing Date" has the meaning set forth in Section 2(c) below.
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"Closing Financial Data" has the meaning set forth in Section
2(d)(i) below.
"COBRA" has the meaning set forth in Section 6(c)(iii) below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Companies' Welfare Plans" has the meaning set forth in Section
6(c)(i) below.
"Composite Xxxx" shall mean any trademark, service xxxx, brand
name, certification xxxx, trade name, corporate name or other indication of
origin, registered or nonregistered that includes, in addition to other terms or
symbols, a Seller Xxxx.
"Confidentiality Agreement" has the meaning set forth in Section
10(d) below.
"Deere Litigation" has the meaning set forth in Section 2(e)(ii)
below.
"Disclosure Schedule" has the meaning set forth in Section 4
below.
"Dollars" or "$" shall mean United States dollars.
"DPI Savings Plan" has the meaning set forth in Section 6(c)(vi)
below.
"DPI Welfare Plans" have the meaning set forth in Section
6(c)(ii) below.
"Environmental Laws" shall mean the applicable common law and all
applicable federal, state, local, and foreign statutes or regulations, codes,
codes of practice, orders, decrees, guidance notes, judgments, or injunctions,
to the extent the foregoing have the force and effect of law, issued,
promulgated, approved, or entered thereunder, enacted and in effect on or prior
to the date hereof imposing liability or standards of conduct relating to
pollution or protection of the environment, including, but not limited to, laws
relating to (i) the emission, discharge, release, threatened release, spillage,
entry or deposit of Hazardous Materials into the environment (including, but not
limited to, ambient air, surface water, ground water, land surface, or
subsurface strata), (ii) the production, manufacture, processing, distribution,
use, generation, treatment, storage, disposal, transport, recycling or handling
of Hazardous Materials, and (iii) underground storage tanks, and related piping,
and emissions, discharges, releases, or threatened releases therefrom.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Hazardous Materials" shall mean any natural or artificial
substance (whether in solid or liquid form or in the form of a gas or vapor and
whether alone or in combination with any other substance) capable of causing
harm to man or any other living organism supported by the environment or
damaging the environment or public health, including without limitation any
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pollutants, contaminants, chemicals, controlled, special, hazardous, toxic or
dangerous wastes, or industrial toxic or hazardous materials or substances,
asbestos, asbestos containing materials, polychlorinated byphenyls, petroleum,
including crude oil or any fraction thereof, or any petroleum product, or any
other wastes, chemicals, or substances regulated by an Environmental Law.
"HIL" means Harnischfeger Industries Limited, a corporation
organized under the laws of England.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"Indemnified Party" has the meaning set forth in Section 8(d)
below.
"Indemnifying Party" has the meaning set forth in Section 8(d)
below.
"Information" has the meaning set forth in Section 6(b)(i)(A)
below.
"Intercompany Debt" means any and all debts owed between (A) any
of the Companies on the one hand, and (B) HII and its respective Affiliates
(excluding the Companies) on the other hand , but excluding Intercompany Trade
Debt.
"Intercompany Trade Debt" means any and all debts owed between
(A) any of the Companies on the one hand, and (B) HII and its Affiliates
(excluding the Companies) on the other hand arising in connection with goods or
services provided in the Ordinary Course of Business by the Person to whom such
debt is owed.
"Knowledge" means actual knowledge without independent
investigation.
"Latest Balance Sheet" means the combined and consolidating
balance sheet of the Companies as of May 23, 1998.
"Neutral Auditors" has the meaning set forth in Section 2(d)(iv).
"Offering Memorandum" has the meaning set forth in Section 10(a)
below.
"Ordinary Course of Business" means the ordinary course of
business consistent with past custom and practice.
"Party" has the meaning set forth in the preface above.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, a limited liability company, or a governmental entity (or any
department, agency, or political subdivision thereof).
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"Pounds" or "pound sterling" shall mean British pounds sterling.
"Presentations" has the meaning set forth in Section 10(a) below.
"Resolution Period" has the meaning set forth in Section
2(d)(iii) below.
"Revere Shares" means all of the issued and outstanding shares of
capital stock of RTI and Meadowgrip.
"RTI Employees" shall have the meaning set forth in Section
6(c)(ii) below.
"RTI ESA Plan" shall have the meaning set forth in Section
6(c)(i) below.
"RTI Severance Plan" shall have the meaning set forth in Section
6(c)(i) below.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Interest" means any mortgage, pledge, lien,
encumbrance, charge, or other security interest, other than (a) mechanic's,
materialmen's, and similar liens, (b) liens for taxes not yet due and payable or
for taxes that the taxpayer is contesting in good faith through appropriate
proceedings, (c) purchase money liens and liens securing rental payments under
capital lease arrangements, and (d) other liens arising in the Ordinary Course
of Business and not incurred in connection with the borrowing of money.
"Seller Xxxx" shall mean any trademark, service xxxx, brand name,
certification xxxx, trade name, corporate name, or other indication of origin,
whether or not registered, incorporating or based on the term "Joy," "Xxxxxx
Park" or "Harnischfeger" or the "Joy World" or "P&H" logo, or any other similar
term or symbol, or any other trademark, service xxxx, brand name, certification
xxxx, trade name or other indication of origin used by Seller or Sellers'
Affiliates.
"Specified Employees" means the persons listed on Exhibit 1(A)
hereto.
"Subsidiary" means any corporation with respect to which a
specified Person (or a Subsidiary thereof) owns a majority of the common stock
or has the power to vote or direct the voting of sufficient securities to elect
a majority of the directors.
"Termination Date" has the meaning set forth in Section
6(b)(i)(A) below.
"Third Party Claim" has the meaning set forth in Section 8(d)
below.
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"Total Working Capital" means total current assets (but not
including Cash and Intercompany Debt) of the Companies less total current
liabilities of the Companies. The total current liabilities of the Companies
shall include RTE's overdraft balance to ABN.
"Transducers" means Transducers, Inc., formerly a California
corporation which has been merged into RTI.
"Transfer Date" has the meaning set forth in Section 6(c)(vii)
below.
"Tustin Lease" means the lease dated August 26, 1993 between RTI
and the Trustees of Xxxxxxx Tustin Group Trust, an Illinois common law group
trust, and relating to certain real property located at 00000 Xxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxx 00000
"Unresolved Changes" has the meaning set forth in Section
2(d)(iv) below.
"Valuation Date" has the meaning set forth in Section 6(c)(vi)
below.
"Wallingford Plant" means the facility owned or operated by DPI
or its Affiliates located at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxxxx.
Section 2. Purchase and Sale of Revere Shares.
(a) Basic Transaction. On and subject to the terms and conditions of
this Agreement, Buyer agrees to purchase from Sellers, and Sellers agree to sell
to Buyer, the Revere Shares for the consideration specified in Section 2(b) and
subject to adjustment under Section 2(d) below.
(b) Purchase Price. At the Closing, Buyer shall pay to Sellers by wire
transfer of immediately available funds as the purchase price for all of the
issued and outstanding shares of capital stock of Meadowgrip and RTI,
respectively, the following amounts:
(i) to HCHC, the amount of $1; and
(ii) to DPI, the amount of $8,278,188, less:
(A) the amount paid to HCHC set forth in subsection (i)
directly above; and
(B) pound sterling 656,843 translated into U.S. dollars at
the exchange rate for the business day immediately preceding the
Closing Date as reported in the Wall Street Journal.
(c) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Harnischfeger
Industries, Inc. in St. Xxxxxxx, Wisconsin, commencing at 9:00 a.m. local time
on the latest to occur of (i) July 15, 1998 and (ii) the second
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business day following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions contemplated hereby
(other than conditions with respect to actions the respective Parties will take
at the Closing itself) (the "Closing Date").
(d) Purchase Price Adjustment.
(i) As soon as practicable, but in no event later than 60 days
following the Closing Date, Buyer shall prepare a combined and
consolidating balance sheet of the Companies as of the Closing Date (the
"Closing Balance Sheet") and a calculation of Total Working Capital as
of the Closing based on the Closing Balance Sheet (collectively, the
"Closing Financial Data"). The Closing Balance Sheet and calculation of
Total Working Capital shall be prepared on a basis consistent with the
methods, principles, practices and policies (A) employed in the
preparation and presentation of the Latest Balance Sheet; and (B) as set
forth in Schedule 2(d)(i) (the provisions of such Schedule to control in
the event of any inconsistency with the principles described in
subsection (A) immediately above).
(ii) During the preparation of the Closing Balance Sheet and the
calculation of Total Working Capital as of the Closing Date, and the
period of any review or dispute within the contemplation of this Section
2(d), Buyer shall (A) provide Sellers or Sellers' authorized
representatives with full access to all relevant books, records,
workpapers and employees of the Companies; and (B) cooperate fully with
Sellers or Sellers' authorized representatives, including the provision
on a timely basis of all information deemed necessary or useful in the
sole discretion of Sellers or their authorized representatives.
(iii) Buyer shall deliver a copy of the Closing Financial Data to
Sellers promptly after it has been prepared. After receipt of the
Closing Financial Data, Sellers shall have 30 days to review the Closing
Financial Data, together with the workpapers used in the preparation
thereof. Within such 30-day period Sellers shall deliver written notice
to Buyer stating that (i) Sellers have objections to the Closing
Financial Data, or (ii) Sellers have accepted and agreed to the Closing
Financial Data. If Sellers so notify Buyer of their objections to the
Closing Financial Data, the Parties shall, within 30 days (or such
longer period as the Parties may agree) following such notice (the
"Resolution Period"), attempt to resolve their differences and any
resolution by them as to any disputed amounts shall be final, binding
and conclusive.
(iv) Any amounts remaining in dispute at the conclusion of the
Resolution Period ("Unresolved Changes") shall be submitted to Ernst &
Young (such firm being referred to as the "Neutral Auditors") within 10
days after the expiration of the Resolution Period. Each Party agrees to
execute, if requested by the Neutral Auditors, a reasonable engagement
letter. All fees and expenses relating to the work, if any, to be
performed by the Neutral Auditors shall be borne pro rata by Sellers and
Buyer in proportion to the allocation of the dollar amount of the
Unresolved Changes between Sellers and Buyer made by the Neutral
Auditors such that the prevailing Party or Parties pays a lesser
proportion of the fees and expenses.
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The Neutral Auditors shall act as an arbitrator to determine, based on
the provisions of this Section 2(d), only the Unresolved Changes. The
Neutral Auditors' determination of the Unresolved Changes shall be made
within 45 days of the submission of the Unresolved Changes thereto,
shall be set forth in a written statement delivered to Sellers and Buyer
and shall be final, binding and conclusive on the parties. The term
"Adjusted Closing Balance Sheet," as used in this Agreement, shall mean
the definitive Closing Balance Sheet agreed to by Sellers and Buyer
under Section 2(d)(iii) or, if submitted to the Neutral Auditors, the
determination of the Neutral Arbitrators under this Section 2(d)(iv).
(v) The purchase price paid by Buyer at the Closing shall be (A)
increased dollar for dollar to the extent Total Working Capital as of
the Closing, as shown on the Adjusted Closing Balance Sheet, exceeds
$5,419,119 or (B) decreased dollar for dollar to the extent Total
Working Capital as of the Closing, as shown on the Adjusted Closing
Balance Sheet, is less than $5,419,119. Any adjustments to the purchase
price made pursuant to this Section 2(d)(v) shall be paid by wire
transfer of immediately available funds to the account of the specified
Party to which such payment is owed. If the amount of Total Working
Capital as of the Closing is agreed to by Buyer and Sellers before or
during the Resolution Period, then such payment shall be made within
five business days after the date such agreement is reached. If there
are Unresolved Changes at the end of the Resolution Period, then (A) the
minimum amount which the Buyer and the Sellers agree is owed to such
Party shall be paid within five business days after the end of the
Resolution Period and any additional amounts owing to such Party with
respect to the Unresolved Changes shall be paid within five business
days after the resolution thereof by the Neutral Auditors or (B) in all
other cases, any and all payments shall be made within five business
days after the resolution of the Unresolved Changes by the Neutral
Auditors.
(vi) Buyer and Sellers shall make good faith efforts to comply
with the timing and response requirements set forth in this Section
2(d), but in the absence of bad faith, neither Party shall be deemed to
have waived its rights under the purchase price adjustment provisions as
contemplated herein on the basis of technical violations of timing and
response requirements.
(vii) All payments constituting an adjustment to the purchase
price made pursuant to this Section 2(d) shall be (i) accompanied by
interest at the Applicable Rate from the Closing Date through the date
of payment; and (ii) allocated to Meadowgrip in an amount equal to the
change in Total Working Capital described in Section 2(d)(v), above,
attributable to RTE and to RTI in an amount equal to the change in Total
Working Capital described in 2(d)(v), above, attributable to RTI.
(e) Actions in Connection with the Closing.
(i) Notwithstanding anything to the contrary contained in this
Agreement, prior to the Closing, Sellers may, at their option, remove
any or all Cash held by the Companies.
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(ii) Notwithstanding anything to the contrary contained in this
Agreement, prior to the Closing, RTI shall distribute, assign, transfer,
convey and deliver to DPI, its successors and assigns, in the form of a
dividend, subject to any related obligations or liabilities, RTI's
entire right, title and interest relating to or arising from that
certain litigation captioned as Revere Transducers, Inc. v. Deere &
Company, Iowa District Court in and for Black Hawk County, No. 73919,
currently on appeal to the Supreme Court of Iowa, No. 97-1009,
including, without limitation, any subsequent proceedings relating
thereto, any order and/or judgment, contingent or otherwise, relating
thereto or any proceeds thereof (collectively, the "Deere Litigation").
Prior to the Closing, DPI shall accept the foregoing distribution,
assignment, transfer, conveyance and delivery and assume any and all
liabilities relating to the Deere Litigation. From the date of such
acceptance and assumption by DPI, RTI shall be required to cooperate and
assist DPI with the Deere Litigation to the same extent required of
Buyer as set forth in Section 6(a).
(iii) At the Closing, (A) Sellers shall deliver to Buyer the
various instruments and documents referred to in Section 7(a) below, (B)
Buyer shall deliver to Sellers the various instruments and documents
referred to in Section 7(b) below, (C) Sellers shall deliver to Buyer
stock certificates representing all of the outstanding shares of RTI,
endorsed in blank or accompanied by duly executed assignment documents
and stock transfer forms in the form agreed to by Buyer transferring the
entire issued share capital of Meadowgrip duly executed by the
registered holder of such shares, and (D) Buyer shall deliver to Sellers
the consideration specified in Section 2(b) above for the Revere Shares.
(iv) Within one business day following the Closing, Buyer shall
cause Selectaid to pay HIL Six Hundred Fifty-Six Thousand Eight Hundred
Forty-Three Pounds (pound sterling 656,843) in satisfaction of the
remaining intercompany debt described in the January 27, 1996 letter
agreement between Selectaid and HIL (f/k/a "Xxxxxx Park Industries PLC")
attached as Exhibit 2(e)(iv). Such payment shall be made by wire
transfer of immediately available funds to a bank account designated by
HIL.
(f) Treatment of Intercompany Debt. Prior to the Closing, Sellers shall
make a capital contribution in the amount of and consisting of any and all
non-trade loans or payables owed to Sellers or its Affiliates by the Companies
as of the date of such capital contribution (other than the obligation described
in Section 2(e)(iv)). There shall be no further liability with respect to any
such loans and payables after such capital contribution.
(g) RTE shall retain liability at Closing for RTE's overdraft balance to
ABN.
Section 3. Representations and Warranties Concerning the Transaction.
(a) Representations and Warranties of Sellers. Each Seller, individually
and severally, represents and warrants to Buyer that the statements contained in
this Section 3(a) are true and
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correct with respect to such Seller as of the date of this Agreement, except as
set forth in the disclosure schedule delivered by Sellers to Buyer on the date
hereof (the "Disclosure Schedule"). For purposes of this Agreement, each matter
disclosed on the Disclosure Schedule with respect to a specific Section of this
Agreement shall be deemed to be disclosed for each Section to which such matter
relates, without the necessity of multiple disclosure or cross-reference.
(i) Organization. Sellers are corporations, duly organized and
validly existing under the laws of their jurisdictions of organization.
(ii) Authorization of Transaction. Sellers have the corporate
power and authority to execute and deliver this Agreement and to perform
their obligations hereunder. This Agreement constitutes the valid and
legally binding obligation of Sellers, enforceable in accordance with
its respective terms and conditions. Sellers need not give notice to,
make any filing with, or obtain any authorization, consent, or approval
of any government or governmental agency in order to consummate the
transactions herein, except as required pursuant to the HSR Act and any
applicable European or national merger regulations.
(iii) Brokers' Fees. Sellers have no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect
to the transactions contemplated herein for which Buyer could become
liable or obligated.
(iv) Revere Shares. Sellers hold of record and beneficially own
all of the issued and outstanding Revere Shares set forth on Disclosure
Schedule free and clear of any restrictions on transfer (other than
restrictions under the Securities Act and state and foreign securities
laws) and Security Interests. Sellers are not parties to any option,
warrant, purchase right, or other contract or commitment that could
require either or both of them to sell, transfer, or otherwise dispose
of any capital stock of the Companies (other than this Agreement).
Sellers are not parties to any voting trust, proxy, or other agreement
or understanding with respect to the voting of any capital stock of the
Companies.
(b) Representations and Warranties of Buyer. Buyer represents and
warrants to Sellers that the statements contained in this Section 3(b) are true
and correct as of the date of this Agreement.
(i) Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation.
(ii) Authorization of Transaction. Buyer has the corporate power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement constitutes the valid and legally
binding obligation of Buyer, enforceable in accordance with its
respective terms and conditions. Buyer need not give any notice to, make
any filing with, or obtain any authorization, consent, or approval of
any government or governmental agency in order to consummate the
transactions contemplated herein, except
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as required pursuant to the HSR Act and any applicable European or
national merger regulations.
(iii) Sufficient Funds. Buyer has cash available in amounts
sufficient to pay at the Closing the purchase price for the Revere
Shares as provided in Section 2(b) above.
(iv) Brokers' Fees. Buyer has no liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated herein for which the Sellers or any of its
Affiliates could become liable or obligated.
(v) Investment. Buyer is not acquiring the Revere Shares with a
view to or for sale in connection with any distribution thereof within
the meaning of the Securities Act.
(vi) No Fraudulent Conveyance. Neither the execution and delivery
of this Agreement nor the consummation of any transaction contemplated
hereunder will result in a violation of any fraudulent transfer,
fraudulent conveyance, bankruptcy or insolvency statute, rule,
regulation or law that is applicable to the Companies or Buyer or other
similar statute, rule, regulation or law protecting the rights of
creditors of the Companies or Buyer. Each Company will, after giving
effect to the transactions contemplated hereby, be solvent and capable
of meeting its obligations as they become due, have assets exceeding its
liabilities and have a reasonable amount of capital for the conduct of
its business.
Section 4. Representations and Warranties Concerning the Companies.
Sellers, jointly and severally, represent and warrant to Buyer that the
statements contained in this Section 4 are true and correct as of the date of
this Agreement, except as set forth in the Disclosure Schedule.
(a) Organization, Qualification, and Corporate Power. Each Company is
duly organized, validly existing, and in good standing under the laws of its
jurisdiction of organization. Each Company is duly authorized to conduct
business and is in good standing under the laws of each jurisdiction where such
qualification is required, except where the lack of such qualification would not
have a material adverse effect on the Business taken as a whole. Each Company
has full power and authority to carry on the businesses in which it is engaged
and to own and use the properties owned and used by it.
(b) Capitalization. The entire authorized capital stock of RTI consists
of 100 shares of common stock, par value $0.01 per share, of which 50 shares are
issued and outstanding and all of which are owned by DPI. The entire authorized
capital stock of Meadowgrip consists of 1,343,155 shares of common stock, par
value pound sterling 1 per share, of which 1,343,155 shares are issued and
outstanding and all of which are owned by HCHC. All of the issued and
outstanding Revere Shares have been duly authorized, are validly issued, fully
paid, and nonassessable, and are held of record by Sellers. There are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
that could require any Company to issue, sell, or otherwise cause to become
outstanding any of its respective capital stock.
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There are no outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to any Company.
(c) Noncontravention. To the Knowledge of the Specified Employees,
neither the execution and the delivery of this Agreement, nor the consummation
of the transactions contemplated thereby, will (i) violate any statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which any
Company is subject or any provision of the bylaws of any Company or (ii) result
in a breach of, constitute a default under, result in the acceleration or
termination of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice or consent under any agreement, contract,
lease, license, instrument, or other arrangement to which any Company is a party
or by which it is bound or to which any of its assets is subject (or result in
the imposition of any Security Interest upon any of its assets), except where
the violation, conflict, breach, default, acceleration, termination,
modification, cancellation, failure to give notice or consent, or Security
Interest would not have a material adverse effect on the Business taken as a
whole or on the ability of the Parties to consummate the transactions
contemplated by this Agreement. To the Knowledge of the Specified Employees, no
Company needs to give any notice to, make any filing with, and obtain any
authorization, consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated by this
Agreement, except (i) under any applicable European or national merger
regulations and (ii) where the failure to give notice, to file, or to obtain any
authorization, consent, or approval would not have a material adverse effect on
the Business taken as a whole or on the ability of the Parties to consummate the
transactions contemplated herein.
(d) Brokers' Fees. The Companies have no liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated herein.
(e) Title to Assets. As of the Closing, the Companies in the aggregate
will own, or have a valid leasehold interest in or other valid right to use, all
material assets regularly used in the conduct of the Business.
(f) Subsidiaries. Except for the ownership of RCE by RTI, the Companies
hold no capital stock and have no Subsidiaries.
(g) Tax Matters. To the Knowledge of the Specified Employees, except as
set forth on Schedule 4(g) attached hereto, within the times and in the manner
prescribed by law, each Company, Meadowgrip, Selectaid and Transducers have
filed all federal, state and local income, franchise, excise, sales, use, real
and personal property and other tax returns and reports which are required to be
filed in connection with such company and has paid all taxes, interest,
penalties, assessments and deficiencies which have become due or which have been
claimed to be due. Except as set forth on Schedule 4(g), the Companies,
Meadowgrip and Selectaid, have not received any notice that any examination of
the federal, state, local or foreign tax returns of any Company are currently in
progress nor, to the Knowledge of the Specified Employees, are any such
examinations threatened in connection with any such company.
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(h) Bonds. Section 4(h) of the Disclosure Schedule identifies all bonds,
guarantees, letters of credit and similar instruments maintained by or on behalf
of the Business.
Section 5. Pre-Closing Covenants. The Parties agree as follows with
respect to the period between the execution of this Agreement and the Closing
(or the earlier termination of this Agreement under Section 9).
(a) General. Each of the Parties will use commercially reasonable
efforts to take all action and to do all things necessary, proper, or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the closing conditions set
forth in Section 7 below).
(b) Notices and Consents. Each of the Parties will (and Sellers will
cause the Companies to) give any notices to third parties, and each of the
Parties will (and Sellers will cause the Companies to) use commercially
reasonable efforts to obtain any third party consents that the other Party
reasonably may request in connection with the matters referred to in Section
4(c) above. Each of the Parties will (and Sellers will cause the Companies to)
give any notices to, make any filings with, and use commercially reasonable
efforts to obtain any authorizations, consents, and approvals of governments and
governmental agencies in connection with the matters referred to in Section
3(a)(ii), Section 3(b)(ii), and Section 4(c) above.
(c) Operation of Business. With respect to the Business, neither Seller
nor their Affiliates will engage in any material practice, take any material
action, or enter into any material transaction outside the Ordinary Course of
Business.
(d) Notice of Developments.
(i) Sellers may elect at any time to notify Buyer in writing of
any fact, circumstance or development causing a breach of any of their
representations and warranties in Section 4. Unless Buyer has the right
to terminate this Agreement pursuant to Section 9(a)(ii) below by reason
of such fact, circumstance or development and exercises that right
within the period of 5 business days referred to in Section 9(a)(ii)
below, the written notice pursuant to this Section 5(d) will be deemed
to have amended the Disclosure Schedule and to have qualified the
representations and warranties contained in Section 4 above, in their
entirety such that no misrepresentation or breach of warranty that
otherwise might have existed hereunder by reason of such fact,
circumstance or development shall be deemed to have occurred as a result
thereof.
(ii) Each Party will give prompt written notice to the other of
any material adverse development causing a breach of any of its own
representations or warranties in Section 3, hereof. No disclosure by any
Party pursuant to this Section 5(d)(ii), however,
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shall be deemed to amend or to prevent or cure any misrepresentation or
breach of warranty in Section 3.
Section 6. Post-Closing Covenants. The Parties agree as follows with
respect to the period following the Closing.
(a) General. In case at any time after the Closing any further
reasonable action is necessary to carry out the purposes of this Agreement, each
of the Parties will take such further action (including the execution and
delivery of such further instruments and documents) as any other Party may
reasonably request, all at the sole cost and expense of the requesting Party
(unless the requesting Party is entitled to indemnification therefor under
Section 8 below). Consistent therewith, Buyer additionally agrees that at any
time after the Closing, without further consideration, Buyer shall cooperate and
assist (including requiring the cooperation and assistance of Buyer's employees,
RTI, and RTI's employees), to the extent requested by DPI, with any and all of
DPI's efforts to: (i) obtain a favorable, final and non-appealable order and/or
judgment in the Deere Litigation; and (ii) collect upon or otherwise enforce any
such order and/or judgment. In the event of such a request by DPI, DPI shall pay
all reasonable out-of-pocket costs, fees or expenses incurred by Buyer or RTI in
providing the requested cooperation or assistance, but in no event shall DPI be
responsible or liable for any costs, fees or expenses related to or associated
with the use of Buyer's or RTI's employees for such purpose(s), including,
without limitation, employment costs, wages, services charges, taxes or lost
profits.
(b) Records; Employees.
(i) Definitions. As used in this Section 6(b), the following
terms shall have the meanings specified:
(A) "Termination Date" shall mean the last to occur of (i)
December 31, 2007, or (ii) sixty (60) days after the expiration of the
statute of limitations period (including extensions) relating to the
records or matter in question.
(B) "Information" shall mean any and all information that
either Party (directly or through their employees, agents or
representatives) furnishes to the other pursuant to the provisions of
this Section 6(b), whether orally or in writing or gathered by
inspection and regardless of whether specifically identified as
"confidential", together with analyses, compilations, studies or other
documents prepared by the Party receiving the information or its agents,
representatives (including attorneys, accountants, consultants, bankers
and financial advisors) or employees which contain or otherwise reflect
such information.
(ii) Records in Buyer's Possession. Until the Termination Date,
the Buyer agrees to permit the Sellers or HII, and its officers,
employees, attorneys, accountants, agents and designees, such access to,
and right to copy, the Books and Records in the possession of the
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Buyer as the Sellers or HII may deem reasonably necessary or reasonably
desirable. Any such examination and copying shall be at the expense of
Sellers or HII, shall be performed at the place where the Books and
Records are regularly maintained by the Buyer and shall not unreasonably
interfere with the normal business activities of the Buyer or the
Business. The Buyer shall notify the Sellers or HII, at any time prior
to the Termination Date, that it intends to destroy any or all of the
Books and Records in its possession, and Sellers shall have the right to
review and remove at the Sellers' expense any of such records the Buyer
intends to destroy.
(iii) Records in the Sellers' Possession. Until the Termination
date the Sellers agree to permit the Buyer, and its officers, employees,
attorneys, accountants, agents and designees, such access to, and right
to copy, the Books and Records in the possession of the Sellers or HII
as the Buyer may deem reasonably necessary or reasonably desirable. Any
such examination and copying shall be at the expense of the Buyer, shall
be performed at the place where the Books and Records are regularly
maintained by the Sellers or HII and shall not unreasonably interfere
with the normal business activities of the Sellers or HII. The Sellers
or HII shall notify the Buyer, at any time prior to the Termination
Date, that either or them intends to destroy any or all of the Books and
Records in its possession, and the Buyer shall have the right to review
and remove at the Buyer's expense any of such records Sellers or HII
intend to destroy.
(iv) Buyer's Employees. Until the Termination Date, the Buyer
shall afford the Sellers or HII access to those employees of the Buyer
or any Affiliate of the Buyer who are familiar with the Business. Any
such access shall be: (i) at the request of the Sellers or HII; (ii)
scheduled and provided on a reasonable basis taking into account the
business requirements of the Buyer; and (iii) for any proper business
purpose of the Sellers or HII including the defense of any legal
proceedings and the preparation, filing and execution of any tax
returns. The Sellers shall pay all reasonable out-of-pocket expenses,
excluding wages, salaries, overhead or burden, incurred by the Buyer or
its Affiliates, in connection with this Subsection (iv).
(v) The Sellers' Employees. Until the Termination Date, the
Sellers and HII shall afford the Buyer access to those employees of the
Sellers and HII who are familiar with the Business. Any such access
shall be: (i) at the request of the Buyer; (ii) scheduled and provided
on a reasonable basis taking into account the business requirements of
the Sellers and HII; and (iii) for any proper business purpose of the
Buyer including the defense of any legal proceedings and the
preparation, filing and execution of any tax returns. The Buyer shall
pay all reasonable out-of-pocket expenses, excluding wages, salaries,
overhead or burden, incurred by the Sellers and HII in connection with
this Subsection (v).
(vi) Confidentiality. The Parties agree that any Information
disclosed pursuant to this Section will not be used in any way
detrimental to the Party disclosing the Information and that the
Information shall be kept confidential and not disclosed without the
prior written consent of the disclosing Party unless otherwise required
by law. The directors,
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officers, employees, agents and representatives of each Party shall be
informed of the confidential nature of such Information and shall be
directed to treat such Information confidentially in accordance with
this Agreement. Each Party shall, at its sole expense, take all
reasonable measures, including court proceeding, to restrain its
directors, officers, representatives, agents, employees and former
employees from unauthorized disclosure or use of the Information.
(c) Employee Benefit Plans.
(i) The DPI Pension Plan. RTI Employees are eligible to
participate in the Xxxxxx Park Industries, Inc. and Affiliates Cash
Balance Pension Plan (the "DPI Pension Plan") which is qualified under
Section 401(a) of the Code. DPI shall retain sponsorship of the DPI
Pension Plan after the Closing and Buyer shall not be entitled to any
assets of the DPI Pension Plan. Buyer shall not assume any
responsibility or liability for the DPI Pension Plan, including but not
limited to any underfunding of the DPI Pension Plan, and DPI shall
remain solely and entirely responsible for satisfying any and all
obligations and liabilities arising before or after the Closing with
respect to the DPI Pension Plan. On and after the Closing Date, no
further benefits of any kind shall accrue on behalf of RTI Employees
under the DPI Pension Plan. The accrued benefits under the DPI Pension
Plan, to the extent vested as of the Closing Date, of any employees of
RTI, shall be distributed to such employees in accordance with the terms
and provisions of the DPI Pension Plan.
(ii) DPI Savings Plan. RTI Employees are eligible to participate
in the Xxxxxx Park Industries, Inc. and Affiliates Savings Plan (the
"DPI Savings Plan") which is qualified under Section 401(a) of the Code.
Except as otherwise expressly provided in Section 6(c)(vii) below, DPI
shall retain sponsorship of the DPI Savings Plan after the Closing and
Buyer shall not be entitled to any assets of the DPI Savings Plan.
Except as otherwise expressly provided in Section 6(c)(vii) below, Buyer
shall not assume any responsibility or liability for the DPI Savings
Plan and DPI shall remain solely and entirely responsible for satisfying
any and all obligations and liabilities arising before or after the
Closing with respect to the DPI Savings Plan. On and after the Closing
Date, no further contributions of any kind shall be made on behalf of
RTI Employees under the DPI Savings Plan, except for deferral
contributions that are attributable to service completed before the
Closing Date. Except as provided in Section 6(c)(vii) below, the accrued
benefits under the DPI Savings Plan of any RTI employees shall be
distributed to such employees in accordance with the terms and
provisions of the Plan.
(iii) Buyer's Savings Plan. As soon as practicable after the
Closing Date, Buyer shall permit all RTI Employees who were eligible to
participate in the DPI Savings Plan to participate in Buyer's defined
contribution plan ("Buyer's Savings Plan") which plan shall qualify
under Sections 401(a) and 401(k) of the Code. Buyer's Savings Plan shall
credit RTI Employees with their service with the Companies for purposes
of eligibility and vesting under Buyer's Savings Plan but not for
benefit accrual purposes. As soon as administratively
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practicable after the Closing Date, DPI shall cause to be transferred,
from the DPI Savings Plan to Buyer's Savings Plan, in conformance with
Section 414(1) of the Code and the applicable provisions of Treasury
Regulations Section 1.414(1)-1, assets (including but not limited to any
outstanding participant loans) comprising the aggregate account balances
for each participant under the DPI Savings Plan who was an RTI Employee
and is eligible to participate in Buyer's Savings Plan as of the date of
the transfer (the "Transfer Date"). The Transfer Date shall be
determined by mutual agreement between the Buyer and DPI except that the
Transfer Date shall not be earlier than the date Buyer receives a copy
of a favorable determination letter from the Internal Revenue Service
with respect to the qualification of Buyer's Savings Plan under Section
401(a) of the Code. The value (including any and all earnings thereon)
of the aggregate account balances to be transferred as of the Transfer
Date shall be determined as of the last day of the calendar month
immediately preceding the Transfer Date (the "Valuation Date"), except
that within thirty (30) days after the Transfer Date, the earnings on
such transferred accounts for the period running from the Valuation Date
to but not including the Transfer Date shall be transferred to Buyer's
Savings Plan. In order to satisfy the requirements of Sections 411(d)(6)
and 414(l) of the Code and the regulations issued thereunder with
respect to plan mergers, spinoffs and transfers, the accrued benefit
under Buyer's Savings Plan immediately after the transfer of each RTI
Employee whose account balance is transferred to Buyer's Savings Plan,
shall be at least equal to the accrued benefit of the Employee under the
DPI Savings Plan immediately preceding the transfer, and the accounts
transferred to Buyer's Savings Plan shall be entitled to benefits that
constitute "Section 411(d)(6) protected benefits" (within the meaning of
Section 411(d)(6) of the Code and the regulations thereunder) under
Buyer's Savings Plan that are at least equal to the Section 411(d)(6)
protected benefits to which such accounts are entitled under the DPI
Savings Plan immediately prior to the transfer. Upon the transfer of
assets from the DPI Savings Plan to Buyer's Savings Plan as provided
herein, Buyer's Savings Plan shall assume and Buyer shall indemnify and
hold harmless DPI and the DPI Savings Plan from and against, any and all
liabilities for the payment of any and all account balances and related
accrued benefits transferred from the DPI Savings Plan to Buyer's
Savings Plan.
(iv) Xxxxxxxx Xxxxxxxxxx. RTE employee, Xxxxxxxx Xxxxxxxxxx,
shall cease to participate in the Harnischfeger Industries Pension
Scheme after the Closing Date and assets attributable to his benefits
shall be transferred to his personal pension in a manner and in an
amount as is appropriate under applicable law.
(d) Tax Matters.
(i) Buyer and each Company, jointly and severally, shall cause to
be paid and shall indemnify and hold harmless Sellers and their
respective Affiliates (excluding the Companies) from and against all
debts, liabilities, obligations and commitments arising out of,
resulting from or relating to:
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(A) any taxes of any kind of any Company relating to
periods ending after the Closing Date; and
(B) any taxes (other than U.S. federal income taxes) of
any Company relating to periods ending on or prior to the Closing
Date.
(ii) Sellers shall file all tax returns and cause to be paid and
shall indemnify and hold harmless Buyer, the Companies and their
Affiliates from and against all debts, liabilities, obligations and
commitments arising out of, resulting from or relating to:
(A) any U.S. federal taxes based on the income of any
Company and relating to periods ending on or prior to the Closing
Date; and
(B) any taxes of any kind relating to the operations of
the Sellers outside of the Companies.
(C) All UK stamp duty on the transfer of the Meadowgrip
shares from Sellers to Buyer.
(iii) Any claim for indemnification under this Section 6(d) shall
be made in accordance with Section 8 below, provided, however, that any
such indemnification shall be dollar-for-dollar and shall not be subject
to the aggregate deductible or aggregate ceiling set forth in Section
8(b)(i) or the survival period set forth in Section 8(a).
(iv) None of the Companies, the Buyer or the Sellers shall take a
position for income tax purposes which is inconsistent with this
Agreement. With respect to all other tax matters no Party shall, without
the prior written consent of the other Party, take any position with
respect to preparing and filing tax returns or the handling, disposition
or settlement of any governmental inquiry or examination with respect to
taxes due or payable, which is inconsistent with past practices of such
Party.
(v) Power of Attorney. The Companies and the Buyer shall grant to
the Sellers a limited Power of Attorney for purposes of the Sellers
preparing, signing, executing and filing any and all tax returns for tax
obligations which are assumed by Sellers under this Section 6(d). The
Sellers agrees to provide to the Buyer at the Buyer's request copies of
all such tax returns.
(vi) Each of the Sellers, on the one hand, and the Buyer, on the
other, shall exercise at its expense complete control over the handling,
disposition, and settlement of any governmental inquiry, examination, or
proceeding that could result in a determination with respect to taxes
due or payable for which such party has agreed that it is liable
pursuant to this Agreement. The Indemnified Party shall notify the
Indemnifying Party in writing promptly upon the receipt or upon actual
knowledge of any such inquiry, examination or
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proceeding. The Indemnified Party shall cooperate with the Indemnifying
Party, as the Indemnifying Party may reasonably request, in any such
inquiry, examination, or proceeding including executing powers of
attorney, consents, waivers or statutes of limitations, closing
agreements or any other documents which the Indemnifying Party shall
reasonably request. The Indemnified Party shall upon receipt thereof
promptly provide the Indemnifying Party with copies of any final
determination of any such inquiry, examination or proceeding received by
the Indemnified Party.
(vii) Buyer shall be solely responsible for all nominal fees and
for all sales, use and transfer taxes, if any, arising out of the
transfer of the Revere Shares to Buyer.
(e) Use of Corporate Name and Symbol; Transition License.
(i) Except as set forth in Section 6(e)(ii), after the Closing,
Buyer and the Companies shall not use the Seller Marks or the Composite
Marks.
(ii) As promptly as practicable, but in no event later than 60
days following the Closing Date, Buyer shall (and shall cause the
Companies to) remove, strike over or otherwise obliterate all Seller
Marks and Composite Marks from all materials constituting Buyer's or the
Companies' properties and assets, including, without limitation, any
business cards, schedules, stationery, displays, signs, promotional
materials, manuals, forms and other materials, if such materials are
distributed or made available or proposed to be distributed or made
available to third parties; provided that Buyer and the Companies shall
immediately cease using invoice forms and purchase and sale contract
forms, and no later than 30 days after the Closing Date cease using
stationery and business cards, containing Seller Marks and Composite
Marks. Buyer agrees that neither Buyer nor any of its Affiliates
(including the Companies) shall make any use of the Seller Marks or the
Composite Marks from and after the Closing Date other than the
transition license set forth in this Section 6(e)(ii).
(f) Tustin Lease. Buyer shall cause RTI (i) to use its best efforts to
cause the Landlord (as such term is defined in the Tustin Lease) of the Tustin
Lease, its successors and assigns to release HIL as soon as is reasonably
possible from its "Guaranty" to Landlord dated September 29, 1993; and (ii) not
to renew the initial term of the Tustin Lease nor to amend, add to, assign,
sublease, transfer or otherwise modify the Tustin Lease without the prior
written approval of HII.
Section 7. Conditions to Obligation to Close.
(a) Conditions to Obligation of Buyer. The obligation of Buyer to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 3(a)
and Section 4 shall be true and correct in all material respects at and
as of the Closing Date;
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(ii) from the date of this Agreement through the Closing Date, no
material adverse change in the Business taken as a whole shall occur,
other than material adverse changes arising from or relating to general
economic changes in the United States or the world, changes in the load
cell and sensor industry in general or developments arising from or
associated with the announcement or consummation of the transactions
contemplated by this Agreement (all of which risks are being assumed by
Buyer hereunder);
(iii) Sellers shall have performed and complied with all of their
covenants hereunder in all material respects through the Closing;
(iv) there shall not be any injunction, judgment, order, decree,
ruling, litigation or charge in effect or threatened preventing or
attempting to prevent consummation of any of the transactions
contemplated by this Agreement or seeking damages in connection with
such consummation;
(v) all applicable waiting periods (and any extensions thereof)
under the HSR Act and any applicable European or national merger
regulations shall have expired or otherwise been terminated;
(vi) Buyer shall have received from counsel to Sellers an opinion
in form and substance as set forth in Exhibit 7 (A)(vi) attached hereto,
addressed to Buyer, and dated as of the Closing Date; and
(vii) Buyer shall have received from the Sellers stock
certificates representing the shares of RTI issued in the name of Buyer
and stock transfer forms in the form agreed to by Buyer transferring the
entire issued share capital of Meadowgrip duly executed by the
registered holder of such shares.
(b) Conditions to Obligation of Sellers. The obligation of Sellers to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 3(b)
above shall be true and correct in all material respects at and as of
the date of this Agreement and the Closing Date;
(ii) Buyer shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) there shall not be any injunction, judgment, order, decree,
ruling, litigation or charge in effect or threatened preventing or
attempting to prevent consummation of any
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of the transactions contemplated by this Agreement or seeking damages in
connection with such consummation;
(iv) all applicable waiting periods (and any extensions thereof)
under the HSR Act and any applicable European or national merger
regulations shall have expired or otherwise been terminated;
(v) Sellers shall have received from counsel to Buyer an opinion
in form and substance as set forth in Exhibit 7(b)(v) attached hereto,
addressed to Sellers, and dated as of the Closing Date; and
(vi) Sellers shall have received from Buyer the purchase price
described in Section 2(b) hereof.
(vii) HII shall have received from ABN a release in form and
substance acceptable to HII of HII's guarantee to ABN of certain
obligations of RTE dated November 1, 1996 and a release from ABN's
affiliate in form and substance acceptable to HII of HIL's guarantee of
certain lease obligations of RTE dated February 4, 1992.
(viii) RTI shall have executed and delivered to Sellers the
"Distribution, Assignment and Assumption Agreement" attached as Exhibit
7(b)(viii).
(ix) Buyer shall have executed and delivered to Sellers the
"Guaranty" attached as Exhibit 7(b)(ix).
Section 8. Remedies for Breaches of this Agreement.
(a) Survival of Representations and Warranties. All of the
representations and warranties of the Parties contained in Section 3, and all of
the representations and warranties of Sellers contained in Section 4, taking
into account the Disclosure Schedule, shall survive the Closing hereunder and
shall continue in full force and effect for a period of one year after the
Closing Date.
(b) Indemnification Provisions for Benefit of Buyer.
(i) In the event that (A) Sellers breach any of their
representations, warranties, and covenants contained herein (other than
the representations and warranties in Section 3(a)) and (B) Buyer makes
a written claim for indemnification against Sellers with respect thereto
within one year after the Closing (which written claim shall state the
specific basis and underlying facts of the breach being asserted and, to
the extent then determinable, a calculation of any Adverse Consequences
which Buyer claims to suffer as a result thereof), then Sellers agrees
to indemnify Buyer from and against any Adverse Consequences Buyer
suffers which are proximately caused by the breach; provided, however,
that Sellers shall not have any obligation to indemnify Buyer from and
against any Adverse Consequences caused by the breach of any
representation or warranty of Sellers contained in Section 4: (A) unless
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and until Buyer has suffered Adverse Consequences by reason of all such
breaches in excess of a $250,000 aggregate deductible (after which point
Sellers will be obligated only to indemnify Buyer from and against
further such Adverse Consequences) or thereafter (B) to the extent the
Adverse Consequences Buyer has suffered by reason of all such breaches
exceeds a $1,000,000 aggregate ceiling (after which point Sellers will
have no obligation to indemnify Buyer from and against further such
Adverse Consequences).
(ii) In the event Sellers breach any of their representations and
warranties in Section 3(a) above, then Sellers agree to indemnify Buyer
from and against any Adverse Consequences Buyer suffers through and
after the date of the claim for indemnification caused proximately by
the breach.
(iii) Buyer shall not be entitled to indemnification based upon
the breach of any representation or warranty if, as of the Closing Date,
the Chief Executive Officer or Chief Financial Officer of Buyer had
actual knowledge that such representation or warranty was inaccurate or
untrue.
(iv) Sellers agree to indemnify Buyer (without reference to the
limitation on indemnification set forth in subsection (iii) immediately
above) from and against any Adverse Consequences Buyer suffers through
and after the date of the claim for indemnification as a result of (i)
any violations of, or liabilities arising under, Environmental Laws with
respect to the ownership or operation of the Wallingford Plant and the
Cerritos Plant; and (ii) any liabilities arising from that certain
litigation captioned as Revere Transducers, Inc. v. Deere & Company,
Iowa District Court in and for Black Hawk County, No. 73919, currently
on appeal to the Supreme Court of Iowa, No. 97-1009 and any subsequent
proceedings relating thereto.
(c) Indemnification Provisions for Benefit of Sellers. (i) In the event
Buyer (and from and after the Closing, any Company) breaches any of its
representations, warranties, and covenants contained herein, then Buyer and the
Companies, jointly and severally, agree to indemnify Sellers from and against
any Adverse Consequences Sellers suffer through and after the date of the claim
for indemnification proximately caused by the breach. (ii) DPI shall not be
entitled to indemnification based upon the breach of any representation or
warranty if, as of the Closing Date, the Chief Executive Officer or Chief
Financial Officer of DPI had actual knowledge that such representation or
warranty was inaccurate or untrue.
(d) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the "Indemnified
Party") with respect to any matter (a "Third Party Claim") which may
give rise to a claim for indemnification against any other Party (the
"Indemnifying Party") under this Section 8, then the Indemnified Party
shall promptly (and in any event within 5 business days after receiving
notice of the Third Party Claim) notify each Indemnifying Party thereof
in writing; provided, however,
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that failure to provide such notice on a timely basis shall not release
the Indemnifying Party from any of its obligations under this Section 8
except to the extent the Indemnifying Party is prejudiced by such
failure.
(ii) The Indemnifying Party will have the right at any time to
assume and thereafter conduct the defense of the Third Party Claim with
counsel of its choice; provided, however, that the Indemnifying Party
will not consent to the entry of any judgment or enter into any
settlement with respect to the Third Party Claim without the prior
written consent of the Indemnified Party (not to be unreasonably
withheld or delayed) unless the judgment or proposed settlement involves
only the payment of money damages and does not impose an injunction or
other equitable relief upon the Indemnified Party.
(iii) Unless and until the Indemnifying Party assumes the defense
of the Third Party Claim as provided in Section 8(d)(ii) above, the
Indemnified Party may defend against the Third Party Claim in any manner
it reasonably may deem appropriate.
(iv) In no event will the Indemnified Party consent to the entry
of any judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of each of the
Indemnifying Parties (not to be unreasonably withheld or delayed).
(v) In the event that any Party suffers damage or loss in respect
of which it has or makes a valid claim against another Party for
indemnification, it must take reasonable steps to mitigate its loss or
damage.
(e) Adjustment of Adverse Consequences. In computing the amount of
Adverse Consequences, there shall be deducted therefrom an amount equal to the
insurance proceeds to which Indemnified Party becomes entitled as a result of
suffering Adverse Consequences, regardless of whether the Indemnified Party
avails itself of such insurance proceeds. All indemnification pay ments under
this Section 8 shall be deemed adjustments to the Purchase Price.
(f) Exclusive Remedy. Each of the parties hereby acknowledges and agrees
that its sole and exclusive remedy with respect to any and all claims (except
for fraud) against any other Party and its Affiliates relating to the
acquisition of the Business or any other issue relating to the subject matter of
this Agreement or the transactions contemplated hereby shall be pursuant to the
indemnification provisions contained in this Section 8. Without limiting the
generality of the foregoing, Buyer (and, on and after the Closing, the
Companies) acknowledge and agree that they shall have no right or remedy against
Sellers or their Affiliates with respect to any environmental, health or safety
matters (except for those matters described in Section 8(b)(iv) (including any
such matters arising pursuant to CERCLA) (collectively "Environmental Matters")
and hereby waive, release, and agree to jointly and severally indemnify Sellers
and their Affiliates from and against any claim, demand or action with respect
to any Environmental Matters, whether arising prior to, on or after the Closing.
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Section 9. [INTENTIONALLY DELETED].
Section 10. Miscellaneous.
(a) Certain Understandings of Buyer. Buyer acknowledges that it has had
sufficient opportunity to make whatever investigation it has deemed necessary
and advisable for purposes of determining whether or not to enter into this
Agreement and acknowledges and agrees that, EXCEPT TO THE EXTENT OF THE EXPRESS
REPRESENTATIONS, WARRANTIES, AGREEMENTS AND COVENANTS CONTAINED IN THIS
AGREEMENT, AND SUBJECT TO THE DISCLOSURE SCHEDULE, BUYER IS ACQUIRING THE
BUSINESS IN RELIANCE UPON ITS OWN INVESTIGATION AND WITHOUT ANY OTHER
REPRESENTATION OR WARRANTY, WHETHER EXPRESS OR IMPLIED, BY SELLERS, INCLUDING
WITHOUT LIMITATION ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE OR ANY OTHER IMPLIED WARRANTIES WHATSOEVER. Buyer
acknowledges (i) that in the course of its independent investigation of the
Business, it examined the information contained in the Descriptive Memorandum
(the "Offering Memorandum") and attended presentations conducted by management
of the Business (the "Presentations"), (ii) that because of its investigation,
Buyer is not relying on the information contained in the Offering Memorandum or
the statements made and information furnished in connection with the
Presentations in its decision to enter into this Agreement, and (iii) that
Sellers make no representation or warranty concerning the information contained
in the Offering Memorandum or the statements made and information furnished in
connection with the Presentations.
(b) Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Closing without the prior written approval of the
other Party; provided, however, that any Party may make any public disclosure it
is advised by legal counsel is required by applicable law, the regulations of
the New York Stock Exchange, Inc. or any listing or trading agreement concerning
its publicly-traded securities (in which case the disclosing Party will use its
reasonable efforts to consult the other Party prior to making the disclosure).
(c) No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
(d) Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement among the Parties and supersedes any
prior understandings, agreements, or representations by or among the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof; provided, however, that the letter agreement between Buyer and Joy
Technologies Inc. concerning confidentiality dated May 6, 1998 (the
"Confidentiality Agreement") shall continue in effect between the date of this
Agreement and the Closing Date.
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(e) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party or Parties; provided, however, that any Party may (i) assign
any or all of its rights and interests hereunder to one or more of its
Affiliates and (ii) designate one or more of its Affiliates to perform its
obligations hereunder (in any or all of which cases the assigning Party
nonetheless shall remain responsible for the performance of all of its
obligations hereunder).
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(g) Headings. The Section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(h) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
IF TO SELLERS:
Xxx X. Xxxxxxxx, Esq.
Associate General Counsel and
Assistant Secretary
Harnischfeger Industries, Inc.
0000 Xxxxx Xxxx Xxxxx
Xx. Xxxxxxx, XX 00000
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IF TO BUYER:
Xxxx Xxxxxxxxx
Chief Financial Officer
SI Technologies, Inc.
0000 X. 000xx Xxxxx
Xxxxxxx, XX 00000
WITH COPY TO:
Xxxxxxxx X. Xxxxxxxx
Xxxxxx & Xxxxx LLP/ Xxxxxxx Xxxxxxxx, X.X.
0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
(i) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of New York without giving effect
to any choice or conflict of law provision or rule (whether of the State of New
York or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of New York.
(j) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by duly
authorized representatives of Buyer and Sellers. No waiver by any Party of any
default, misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(k) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(l) Expenses. Each of Buyer and Sellers will bear its own costs and
expenses (including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby.
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(m) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
(n) Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
(o) Specific Performance. Each of the Parties recognize and affirm that
in the event of breach by any of them of any of the provisions of this
Agreement, money damages would be inadequate and no adequate remedy at law would
exist. Accordingly, each of the Parties agree that any party shall have the
right, in addition to any other rights and remedies existing in its favor, to
enforce its rights and the obligations of any other Party under this Agreement
not only by an action or actions for damages, but also by an action or action
for specific performance, injunction and/or other equitable relief in order to
enforce or prevent any violations of the provision of this Agreement.
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(p) Return of Information. If for any reason the transactions
contemplated by this Agreement are not consummated, Buyer shall promptly return
to Sellers all Books and Records furnished by Sellers or any of their respective
agents, employees or representatives (including all copies, if any, thereof).
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
BUYER SELLERS
SI TECHNOLOGIES, INC. XXXXXX PARK INDUSTRIES, INC.
By:___________________________ By:___________________________
Name: Name:
Title: Title:
HCHC, INC.
By:___________________________
Name:
Title:
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EXHIBIT 1(b)
Specified Employees:
Xx Xxxxxxx
Xxxx Xxxxxxx
Xxxx Xxxxx
