ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement"), is dated as of
November 15, 2000, by and among Imo Industries Inc., a Delaware corporation,
(the "Seller"), TFX Acquisition Incorporated, a Delaware corporation ("Buyer"),
and Teleflex Incorporated, a Delaware corporation ("Parent").
RECITALS
WHEREAS, Seller is engaged in the business of manufacturing and
distributing equipment and aftermarket parts for the marine, mobile equipment,
aviation and other industrial applications worldwide through its Xxxxx Controls
Division, which Division includes the Assets and related Liabilities and certain
wholly-owned foreign and domestic subsidiaries of Seller identified on Schedule
1 (the "Subsidiaries") and interests in certain affiliates identified on
Schedule 2 hereto (the "Affiliates")(the Xxxxx Controls Division Assets and
Liabilities, and the Subsidiaries and Affiliates are hereinafter collectively
referred to as the "Xxxxx Division"); and
WHEREAS, the Buyer desires to purchase and acquire from Seller
(directly or indirectly through subsidiaries), and Seller desires to sell,
assign and transfer to Buyer, the Assets, and the Buyer is willing to assume all
of the Liabilities other than the Excluded Liabilities (defined below), all for
the purchase price and subject to the terms, conditions and exclusions
hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, and intending to be legally
bound, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
See Appendix A for a list of definitions used in this Agreement.
ARTICLE II
SALE AND PURCHASE OF ASSETS
2.01 Asset Sale.
(a) On the basis of the representations, warranties and
agreements contained herein, and subject to the terms and conditions hereof,
Seller agrees to sell, assign, transfer, convey and deliver to Buyer, and Buyer
agrees to purchase from Seller, free and clear of all Liens, rights of first
refusal, preemptive or similar rights, or voting restrictions, all of Seller's
right, title and interest in and to the Assets at the Closing.
(b) If any particular Asset shall be incapable of being
conveyed, assigned or otherwise transferred hereunder, in whole or in part, or
if the conveyance, assignment or other transfer hereunder of any particular
Asset shall require the consent of another Person, which consent has not been
obtained as of the Closing Date, then notwithstanding any other provision
hereof, this Agreement shall not constitute a conveyance, assignment or transfer
of such particular Asset if an attempted conveyance, assignment or transfer of
such particular Asset would not be permitted by the terms thereof. In order,
however, to provide Buyer the material benefits of the Assets, Seller agrees
that on and after the Closing, it will, at the request and under the direction
of Buyer and at Buyer's expense, in the name of Seller or otherwise as Buyer
shall specify, take all reasonable actions to do or cause to be done all such
things as shall in the reasonable opinion of Buyer or its counsel be necessary
or proper (i) to assure that the rights of Seller with respect to such Assets
shall be preserved to the extent practicable in all material respects for the
benefit of Buyer and (ii) to facilitate the conveyance, assignment or transfer
of each such Asset as promptly as practicable following the Closing. Nothing in
this Section 2.01(b) shall in any way diminish Buyer's right to require
satisfaction of the conditions to its obligations set forth in Article VI
hereof.
2.02 Assumption of Liabilities. At the Closing, Buyer shall assume or
be deemed to assume any and all debts, liabilities and obligations of Seller or
its Subsidiaries or Affiliates of any nature whatsoever, (whether accrued,
unmatured, absolute, contingent, known or unknown, and whenever due or to become
due), other than the Excluded Liabilities, carried or incurred by, related to,
associated with or otherwise attributable to the Xxxxx Division and its Assets,
Subsidiaries and Affiliates.
2.03 Excluded Liabilities. The Buyer does not assume, and Parent
does not assume, and will not become responsible for any of the
following liabilities and obligations of the Seller or its Subsidiaries or
Affiliates (collectively, the "Excluded Liabilities"):
(a) all Taxes based on income relating to the Xxxxx Division
or the operation of the Xxxxx Division for periods prior to the Closing Date
other than Taxes relating to the Xxxxx Division and the Subsidiaries and
Affiliates as provided in Section 5.10;
(b) all liabilities and obligations of the Seller or the Xxxxx
Division under notes payable to banks or other non-intra-Xxxxx Division
indebtedness for monies borrowed (other than the capital lease to be assumed as
set forth on Schedule 2.03(b)).
(c) all liabilities and obligations of the Seller for any
division of the Seller other than the Xxxxx Division or for any discontinued
operations or former division or subsidiary of the Seller, except to the extent
such discontinued operation, former division or subsidiary was owned or operated
by the Xxxxx Division;
(d) all liabilities and obligations of the Seller relating to
Seller's corporate headquarters operations or any other business segment except
as primarily relates to the Continuing Employees;
(e) all liabilities and obligations with respect to any
employee of the Seller other than the Continuing Employees and former employees
of the Xxxxx Division;
(f) all liabilities and obligations of the Seller to any
current and former officers and directors of the Seller, other than those who
are Continuing Employees and former employees of the Seller who were employees
of the Xxxxx Division;
(g) all liabilities and obligations of Seller to any current
and former shareholders of the Seller in their capacities as shareholders;
(h) all liabilities and obligations of the Seller or any of
its subsidiaries or affiliates for any professional, financial advisory services
or consulting fees arising out of the negotiation, preparation and approval of
this Agreement and the transactions contemplated herein;
(i) all other liabilities, obligations and commitments, known
or unknown, of the Seller arising out of the ownership, operation or conduct of
the business of the Seller other than the Xxxxx Division, or the ownership, use
or operation of any assets of the Seller other than the Assets, but only if and
to the extent such liabilities, obligations and commitments relate to the
business of the Seller other than the business of the Xxxxx Division;
(j) any liability or obligation for Taxes (i) allocated to
Seller by Section 5.10, (ii) of any affiliate of Seller (other than the
Subsidiaries and Affiliates) or (iii) of any consolidated group or corporations
of which a Subsidiary or Affiliate was a member on or before the Closing Date
(excluding the respective groups of which Subsidiaries and Affiliates are
presently members) and in which such Subsidiary or Affiliate may be considered
liable pursuant to Treas. Reg. ss. 1.1502-6 or comparable provision under state,
local or foreign tax law;
(k) all liabilities and obligations of Seller or the Xxxxx
Division arising from any environmental condition or discharge or release into
the environment, existing or occurring at or generated by the Xxxxx Division's
present and former facilities in Hudson, Ohio but only to the extent such
liability or obligation arises from occurrences prior to the Closing Date.
(l) all liabilities and obligations of Seller or the Xxxxx
Division arising from any environmental condition or discharge or release into
the environment, existing or occurring at or generated by the Xxxxx Division's
present and former facilities in France and Porterville, California.
2.04 Purchase Price. For and in consideration of the conveyances and
assignments described herein, Buyer agrees to pay Seller the amount of One
Hundred and Thirty-Five Million U.S. Dollars ($135,000,000) (the "Purchase
Price") by wire transfer of funds to an account which will be identified by
Seller in writing prior to the Closing Date and to assume the Liabilities as
provided in Section 2.02.
2.05 Post-Closing Purchase Price Adjustment.
(a) Post-Closing Purchase Price Adjustment. The Purchase Price
shall be adjusted on the date that is 15 Business Days following the Closing
Date (the "Adjustment Date"), dollar for dollar, by the Post-Closing Adjustment
Amount, as defined in Section 2.05(b).
(b) Post-Closing Adjustment Amount. The Post-Closing
Adjustment Amount shall be the sum of the following: (i) all cash and cash
equivalents held by the Subsidiaries and all balances in all bank accounts and
short-term cash management accounts maintained by the Subsidiaries, as of the
Closing Date, as set forth on a closing cash balance schedule delivered by
Seller to Buyer on or before Adjustment Date and (ii) the difference between (x)
the total assets less total liabilities of the Xxxxx Division (excluding cash
and third-party debt (with the exception of the capital lease set forth on
Schedule 2.03(b))) (the "Net Worth") as set forth on a Closing Date Balance
Sheet delivered by Seller to Buyer on or before the Adjustment Date and prepared
on a basis consistent with the September 30, 2000 pro forma balance sheet
attached hereto as Schedule 2.05(b) and (y) the Net Worth of $68,746,000 as
shown on the September 30, 2000 pro forma balance sheet of the Xxxxx Division
attached hereto as Schedule 2.05(b).
(c) Payment of Post-Closing Adjustment Amount. If the
Post-Closing Adjustment Amount is a positive number, the Purchase Price shall be
increased by such amount and Buyer shall pay such additional amount to Seller.
If the Post-Closing Adjustment Amount is a negative number, the Purchase Price
shall be reduced by such amount and Seller shall remit such amount to Buyer.
Payment of the Post-Closing Adjustment Amount shall be made by Buyer or Seller,
as the case may be, together with interest thereon by wire transfer of
immediately available funds, in the case of payments to Seller, to the account
specified in Section 2.04 or, in the case of payments to Buyer, to an account
which will be identified by Buyer in writing prior to the Adjustment Date.
Interest will accrue at a rate of nine and one half percent (9.5%) from the
Closing Date through the date on which the Post-Closing Adjustment Amount is
finally determined. If payment is not made on or before the date on which the
Post-Closing Adjustment Amount is finally determined, applicable rate of
interest will be fourteen and one half percent (14.5%) per annum calculated from
the date on which the Post-Closing Adjustment Amount is finally determined
through the payment date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES BY SELLER
Seller represents and warrants to Buyer as of the date hereof as
follows:
3.01 Organization and Standing. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware. Seller has the corporate power and authority, to enter into and
perform the terms of this Agreement, the agreements and instruments referred to
herein, and the transactions contemplated hereby and thereby. Each of the
Subsidiaries and Affiliates is duly incorporated or organized, validly existing
and in good standing under the laws of the jurisdiction in which such Subsidiary
or Affiliate is organized and has the requisite power and authority, corporate
or otherwise, to carry on its business as now being conducted. Each Subsidiary
and Affiliate is qualified to do business in each jurisdiction in which the
character of its properties owned or leased or the nature of its activities
makes such qualification necessary, except where such failure to be so qualified
or licensed and in good standing would not have a material adverse effect on the
business, financial condition or results of operations of the Xxxxx Division.
3.02 Authorization. Seller has the power and authority to own, lease
and operate the Assets, to carry out the business of the Xxxxx Division, and to
enter into and perform the terms of this Agreement, the agreements, and
instruments referred to herein, and the transactions contemplated hereby and
thereby. The execution, delivery and performance of this Agreement and of the
agreements and instruments called for hereunder, and the consummation of the
transactions contemplated hereby and by such agreements and instruments have
been duly and validly authorized by all necessary actions of Seller. This
Agreement constitutes, and upon execution and delivery, each other agreement and
instrument will constitute, valid and binding agreements and obligations of
Seller, enforceable in accordance with their respective terms. The execution,
delivery and performance by Seller of this Agreement and the agreements and
instruments called for hereunder, and the performance by the Seller of the
transactions contemplated hereby and thereby, including the transfer of all of
the Seller's right, title and interest in the Assets, will not require the
consent, approval or authorization of any Person, entity or Governmental
Authority, other than under the HSR Act, any foreign antitrust filings and as
set forth in Schedule 3.02.
3.03 Litigation; Compliance with Law. Except as set forth on Schedule
3.03, there is no action, suit, investigation, claim, arbitration or litigation
pending or, to Seller's Knowledge, threatened against or involving the Xxxxx
Division, at law or in equity, or before or by any court, arbitrator or
governmental authority, and the Xxxxx Division is not operating under or subject
to any order, judgment, decree or injunction of any court, arbitrator or
Governmental Authority. Seller, its Subsidiaries and its Affiliates have
complied and are in compliance in all material respects with all material laws,
ordinances, regulations, awards, orders, judgments, decrees and injunctions
applicable to the Xxxxx Division, including all federal, state and local laws.
3.04 Shares to be Transferred.
(a) Except as set forth on Schedule 3.04, the Seller is the
record and beneficial owner of all of the Shares and has valid title to all of
the Shares, free and clear of all Liens, rights of first refusal, preemptive or
similar rights, or voting restrictions. Upon the consummation of the
transactions contemplated by this Agreement in accordance with the terms hereof,
Buyer will acquire title to the Shares, free and clear of all Liens, rights of
first refusal, preemptive or similar rights, or voting restrictions.
(b) The authorized capital stock of the Subsidiaries and
Affiliates is as set forth on Schedules 1 and 2, herein. To Seller's Knowledge,
Schedules 1 and 2 set forth all of the issued capital stock and any other
securities of the Subsidiaries and Affiliates, and the record holder of such
capital stock and securities, including treasury shares. All of the Shares are
duly and validly issued and outstanding and are fully paid and nonassessable. To
Seller's Knowledge, there are no authorized or outstanding options or other
agreements under which any Subsidiary or Affiliate may be obligated to issue or
sell any shares of capital stock or other securities. To Seller's Knowledge,
other than as set forth on Schedules 1 and 2, Seller does not hold primarily for
use in the Xxxxx Division any securities or equity interests issued by any other
entity, and the Subsidiaries and the Affiliates hold no other securities or
equity interests issued by any other entity.
3.05 Financial Statements and Condition. Attached as Schedule 3.05 are
(i) the consolidated pro forma balance sheets of the Xxxxx Division as of
December 31, 1997, 1998 and 1999 and September 30, 2000, (ii) the consolidated
pro forma statements of income for the three (3) years ending December 31, 1999
and the nine (9) months ended September 30, 2000 and (iii) the consolidated pro
forma statements of cash flow for the three (3) years ending December 31, 1999
and the nine (9) months ended September 30, 2000, all of which are unaudited.
All of the financial statements referred to in this Section present fairly, in
all material respects, the financial condition of the Xxxxx Division as of the
respective dates and the results of operations and cash flow for the respective
periods indicated and have been prepared in accordance with generally accepted
accounting principles (except as otherwise described in Schedule 3.05), and with
the books and records of Seller and on the basis described in Schedule 3.05.
3.06 Intellectual Property; Licenses. To Seller's Knowledge, Schedule
3.06, and Seller's direct and indirect right, title and interest in and to the
name "Teleflex" and "Xxxxx", constitutes a true and complete listing of all
material franchises, licenses, trademarks, trademark registrations and
applications, trade names, patents, patent applications, patent licenses,
software licenses, know-how, trade secrets, service marks, service xxxx
registrations and applications, copyright registrations and applications and all
other intangible property rights or technology primarily used or primarily held
for use in the operation of the Xxxxx Division or owned by the Subsidiaries or
Affiliates ("Intellectual Property"). Except as set forth on Schedule 3.06,
Seller does not have any Knowledge nor has Seller received any notice of
invalidity or misappropriation with respect to the Intellectual Property or to
the effect that the Intellectual Property or current activities of the Xxxxx
Division may infringe in any material respect on any Intellectual Property or
legally protectible right of another Person. Seller has made available to Buyer
copies of all material documents relating to the items listed in Schedule 3.06.
Schedule 3.06 also contains a complete and accurate list of all material
licenses and other material rights granted by Seller or any of the Affiliates or
Subsidiaries to any third party with respect to any Intellectual Property and
all material licenses and other material rights granted by any third party to
Seller or any of the Affiliates or Subsidiaries with respect to any Intellectual
Property, in each case identifying the subject Intellectual Property. To the
Sellers' Knowledge, no third party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual Property.
3.07 Property, Assets, and Leases.
(a) Except as disclosed on Schedule 3.07(a), Seller has good
and valid title to all of the Assets, free and clear of all Liens except for
such imperfections or irregularities of title, Liens, or defaults that do not
affect the use thereof in any material respect and statutory Liens securing
payments not yet due. To Seller's Knowledge, the Assets constitute all the
assets of the Xxxxx Division and are sufficient for the Xxxxx Division to
continue to operate its business as it is presently conducted in all material
respects.
(b) To Seller's Knowledge, Schedule 3.07(b) contains a
complete and accurate description in all material respects of all the Real
Property and the Seller's or its Subsidiaries' interest therein. The Real
Property listed on Schedule 3.07(b) comprises all real property interests used
in the conduct of the Xxxxx Division's business as conducted on the date hereof.
Seller has made available to Buyer true and complete copies of all leases
pertaining to the Real Property. Except as set forth on Schedule 3.07(b), to
Seller's Knowledge, all Real Property (including the improvements thereon)
complies in all material respects with all applicable building or zoning codes
and regulation of any Governmental Authority having jurisdiction.
(c) To Seller's Knowledge, Schedule 3.07(c) contains a
complete list of all vehicle leases and subleases used in the Xxxxx Division and
all leases and subleases pursuant to which the Seller or its Subsidiaries lease
personal property for the Xxxxx Division that require payment of $50,000 or more
per year. Except as set forth on Schedule 3.07(c), to Seller's Knowledge, (i)
all leases listed on Schedule 3.07(c) and (ii) all leases pertaining to Real
Property are valid, binding and enforceable in accordance with their terms,
except as limited by an applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and to general principles of equity (whether or not considered in a
court of law or equity) and are in full force and effect. To Seller's Knowledge
there are no existing material defaults by Seller or its Subsidiaries under such
leases. Seller has not received notice of the occurrence of, nor to Seller's
Knowledge has there occurred, any event which (whether with or without notice,
lapse of time or the happening or occurrence of any other event) would
constitute a material default under such leases by any party thereto.
(d) To Seller's Knowledge, Schedule 3.07(d) is an accurate
list of all machinery, equipment and other tangible personal property, including
motor vehicles, which are owned by Seller or its Subsidiaries, used in the
conduct of the business of the Xxxxx Division and having a net book value in
excess of $25,000 (collectively, the "Material Equipment"). Except as otherwise
specified in Schedule 3.07(d), to Seller's Knowledge, all Material Equipment is,
in all material respects, in good repair and working order. Except as set forth
on Schedule 3.07(d), no Person, other than Seller or its Subsidiaries, owns any
equipment or other tangible property or assets on the premises of Seller or its
Subsidiaries that is necessary to the operation of the Xxxxx Division.
3.08 Conflicts. Except as set forth in Schedule 3.08, to Seller's
Knowledge, the execution and delivery of this Agreement and the agreements and
instruments called for hereunder, the fulfillment of and the compliance with the
respective terms and provisions of each, and the consummation of the
transactions described in each, do not conflict with or violate any material
law, ordinance, regulation, order, judgment, injunction or decree applicable to
Seller, to the Assets or to the Xxxxx Division, or conflict with or result in a
material breach of or constitute a material default (or an event which, with the
giving of notice or the passage of time or both would constitute a material
default) under any of the terms, conditions or provisions of (i) Seller's
certificate of incorporation or bylaws, (ii) any provision of the comparable
charter or organizational documents of any of the Subsidiaries or the
Affiliates; (iii) any material judgment, order, injunction, decree, statute,
law, ordinance, rule or regulation applicable to the Xxxxx Division or the
Assets; or (iv) or any material contract, agreement, lease, commitment, or
understanding to which Seller is a party or by which Seller is bound or to which
any of the Assets or the Xxxxx Division is subject, or result in the
acceleration of any indebtedness included among the Liabilities or in the
creation of any encumbrance upon the Assets.
3.09 Taxes.
(a) To Seller's Knowledge, Seller (so far as its operations
relate to the Xxxxx Division) and each Subsidiary and Affiliate have filed all
Tax Returns and forms required to be filed or have filed timely requests for
extensions of time to file (and have filed or will file within the period set by
such extension), and have paid in full all Taxes, estimated Taxes, interest,
penalties, assessments and deficiencies which have become due pursuant to such
returns or pursuant to any assessments received by Seller, any Subsidiary or
Affiliate. To Seller's Knowledge, such returns and forms are true and correct in
all material respects and none of Seller (so far as its operations related to
the Xxxxx Division), any Subsidiary or Affiliate is required to pay any other
Taxes except as shown on such returns. No extension of time with respect to a
Tax assessment or deficiency has been agreed to by Seller (so far as its
operations relate to the Xxxxx Division), any Subsidiary or Affiliate. No claim
has ever been made any by an authority in a jurisdiction where Tax Returns are
not filed with respect to the Xxxxx Division that it may be subject to taxation
by that jurisdiction.
(b) None of Seller (so far as its operations relate to the
Xxxxx Division), any Subsidiary or Affiliate is a party to any pending action or
proceeding, and, to Seller's Knowledge, there is no action or proceeding
threatened by any government or authority against Seller (so far as its
operations relate to the Xxxxx Division), any Subsidiary or Affiliate for
assessment or collection of Taxes, and no unresolved claim for assessment or
collection of such Taxes has been asserted against Seller, any Subsidiary or
Affiliate unless otherwise disclosed on Schedule 3.09. No waivers of statutes of
limitation with respect to the Tax Returns have been given by or requested from
the Seller (so far as its operations relate to the Xxxxx Division), any
Subsidiary or Affiliate. There are no liens for Taxes (other than for current
Taxes not yet due and payable) upon the assets of the Xxxxx Division.
(c) Except as set forth on Schedule 3.09, none of Seller (so
far as its operations relate to the Xxxxx Division), any Subsidiary or Affiliate
is a party to any Tax allocation or sharing agreement. Except as set forth on
Schedule 3.09 and except for the respective groups of which Subsidiaries and
Affiliates are presently members, no Subsidiary or Affiliate has been a member
of an Affiliated Group filing a consolidated federal income Tax Return or has
any liability for the Taxes of any Person (other than any of the Subsidiaries
and the Affiliates) under Treasury Regulation ss. 1.1502-6 (or any similar
provision of state, local, or foreign law).
(d) The unpaid Taxes of the Subsidiaries and Affiliates do not
materially exceed the reserve for Tax liability (excluding any reserve for
deferred Taxes established to reflect timing differences between book and Tax
income) set forth or included in the Subsidiaries' and Affiliates' most recent
balance sheets as adjusted for the passage of time through the Closing Date in
accordance with the past custom and practice of the Seller, Subsidiaries and
Affiliates.
(e) The Seller (so far as its operations relate to the Xxxxx
Division), each Subsidiary and Affiliate has withheld and paid all Taxes
required to be withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder or third party.
(f) Except as disclosed on Schedule 3.09, none of the Seller,
Subsidiaries and Affiliates is a party to any agreement, contract, arrangement
or plan that would, as a result of this Agreement, obligate it to make any
payments that will not be deductible under Code ss. 280G.
3.10 Employee Benefit Plans.
(a) Each "employee benefit plan", as defined in Section 3(3)
of ERISA, maintained, contributed to or required to be contributed to by Seller
or its Subsidiaries or Affiliates for the benefit of current, former and retired
employees of the Xxxxx Division (collectively "Seller's ERISA Plans") and each
other material plan, contract or arrangement maintained, contributed to or
required to be contributed to by the Seller or its Subsidiaries or Affiliates
for the benefit of current, former and retired employees of the Xxxxx Division
(collectively, "Seller's Benefit Arrangements"), complies in all material
respects, to Seller's Knowledge, with its terms and all applicable Laws,
including ERISA, and no "reportable event" or "prohibited transaction" (as such
terms are defined in ERISA) or termination has occurred with respect to any
Seller ERISA Plan under circumstances that present a risk of material liability
to Seller. Seller's ERISA Plans and Seller's Benefit Arrangements are listed on
Schedule 3.10. Copies or descriptions of each Seller's ERISA Plan and Seller's
Benefit Arrangement have been made available to Buyer for review prior to the
date hereof. Seller and its Subsidiaries and the Affiliates have no obligation
to provide medical or life insurance coverage to retired employees of the Xxxxx
Division under Seller's ERISA Plans, Seller's Benefit Arrangements or any other
plan or agreement except as set forth on Schedule 3.10.
(b) The Seller's ERISA Plans which are intended to meet the
qualification requirements of Section 401(a) of the Code now meet, and, to
Seller's Knowledge, at all times since their inception have met the requirements
for such qualification, and the related trusts are now, and, to Seller's
Knowledge, at all times since their inception have been, exempt from taxation
under Section 501(a) of the Code.
(c) Except as disclosed in Schedule 3.10, there are no pending
audits or investigations by any Governmental Agency involving the Seller's ERISA
Plans or Benefit Arrangements, and no claims (except for individual claims for
benefits payable in the normal operation of such Plans and Arrangements), suits
or proceedings pending or, to Seller's Knowledge, threatened, involving any such
Plan or Arrangement, and fiduciary thereof or service provider thereto.
3.11 Seller and Subsidiary Contracts. Set forth in Schedule 3.11 is a
list, as of the date hereof, of the following agreements that relate to the
Xxxxx Division or affect in any material way the Assets or the Liabilities (the
"Seller's Contracts"):
(a) Each agreement to which Seller or its Subsidiaries is a
party requiring the payment in excess of $50,000 a year except those that are
terminable at the option of Seller or its Subsidiaries upon less than 60 days
notice;
(b) Each agreement covering the lease, purchase or service of
tangible personal property to which Seller or its Subsidiaries is a party
requiring payment in excess of $50,000 a year;
(c) Each agreement to which the Seller or its Subsidiaries is
a party with respect to indebtedness for money borrowed, including letters of
credit, guaranties, indentures, swaps and similar agreements with respect to
indebtedness in excess of $50,000 per year;
(d) Each collective bargaining agreement and material
management, consulting, employment, severance, or similar agreement, to which
Seller or its Subsidiaries is a party;
(e) Each material agreement between Seller and its
Subsidiaries;
(f) Each material agreement with any manufacturer's
representative, distributor or sales agent; and
(g) Each material agreement preventing Xxxxx Division from
competing in any line of business.
To Seller's Knowledge, each of the Seller's Contracts is valid, binding and
enforceable in accordance with its terms except as limited by any applicable
bankruptcy, reorganization, insolvency, moratorium or together similar laws
affecting the enforcement of creditors' rights generally and to general
principles of equity (whether or not considered in a court of law or equity),
and are in full force and effect. To Seller's Knowledge, there are no existing
material defaults by Seller or its Subsidiaries under any of Seller's Contracts
and no event has occurred (whether with or without notice, lapse of time or the
happening or occurrence of any other event) would constitute a material default
under any of Seller's Contracts by any other party thereto.
3.12. Material Changes. Except as otherwise set forth in this Agreement
(including Schedule 3.12 and the other Schedules hereto) since September 30,
2000, Seller, the Subsidiaries and the Affiliates have conducted the business of
the Xxxxx Division in the ordinary course and in accordance with past practices
and there has not been, with respect to the Xxxxx Division or the Assets
considered as a whole:
(a) any damage, destruction, or loss to any of the Assets,
whether or not covered by insurance, in excess of $250,000;
(b) any change or any threat of any change in any of its
relations with, or any loss or threat of loss of, any of the important
suppliers, distributors or customers of the Xxxxx Division that could reasonably
be expected to have a material adverse effect on the assets, business, or
operations of the Xxxxx Division;
(c) any cancellation or waiver of any right under any
contract, lease, agreement license or permit which right is or was, prior to
such cancellation or waiver, material to the Xxxxx Division;
(d) any sale, transfer or other disposition of, or subjection
to any encumbrance of, any Assets having an aggregate book value of $250,000 or
more, or any material properties or rights of the Xxxxx Division, except for
sales of obsolete or damaged equipment or retirement of equipment, in each case
in the ordinary course of business;
(e) any making or authorization of any capital expenditures
in excess of $250,000;
(f) any payment, discharge or satisfaction of any material
liability or obligation (whether accrued, absolute, contingent or otherwise) of
the Xxxxx Division, other than the payment, discharge or satisfaction, in the
ordinary course of business, of liabilities or obligations shown or reflected on
the September 30, 2000 balance sheet described in Section 3.05 or incurred in
the ordinary course of business since September 30, 2000;
(g) any write-off as uncollectible of any notes or accounts
receivable of the Xxxxx Division or write-downs of the value of any assets by
the Seller, the Subsidiaries or Affiliates with respect to the Xxxxx Division
other than in immaterial amounts or in the ordinary course of business
consistent with past practice;
(h) any change by Seller, the Subsidiaries or Affiliates in
any method of accounting or the keeping of books of account or accounting
practices with respect to the Assets or the Xxxxx Division; and
(i) any material transaction, agreement or event to which
Seller, the Subsidiaries or Affiliates is a party or a participant outside the
ordinary course of the Xxxxx Division's business or inconsistent with past
practice relating to the Xxxxx Division.
3.13 Inventory. To Seller's Knowledge, all inventory and raw materials
of the Xxxxx Division are in good condition and consist of a quality and
quantity useable and salable in the ordinary course of business, except for
obsolete items and items of below-standard quality, all of which have been
written off or written down to net realizable value in the Seller's or its
Subsidiaries' accounting records.
3.14 Environmental Matters. Except as set forth in Schedule 3.14:
---------------------
(a) To Seller's Knowledge, the Xxxxx Division is in compliance
in all material respects with all of the terms and conditions of all Permits
which are required under Environmental Laws, and is in compliance in all
material respects with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, schedules and timetables which are
contained in all federal, state and local laws relating to pollution or
protection of the environment, including laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants, or any other
materials or wastes including "hazardous substances" as defined in 42 U.S.C.
Section 9601, petroleum or any constituent thereof, asbestos, polychlorinated
biphenyls ("PCBs") and any hazardous or solid waste as defined in 40 C.F.R. Part
261 ("Hazardous Substances") into the indoor or outdoor environment (including
ambient air, surface water, ground water or lands) or otherwise regulating the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Substances ("Environmental Laws"). All such
Permits material to the operation of the Xxxxx Division are listed in Schedule
3.14(a).
(b) The Xxxxx Division has not received any written notice of
a charge, complaint, action, suit, proceeding, hearing, investigation, claim,
demand, request for information or notice, nor to Seller's Knowledge, are any of
the foregoing threatened, alleging any material liability of the Xxxxx Division
pursuant to any Environmental Law or any failure with respect to the Xxxxx
Division to comply in any material respect with any Environmental Law which have
not been resolved including, without limitation, any written request for
information, notice of claim, demand or notification related to the Xxxxx
Division that the Xxxxx Division is or may be potentially responsible with
respect to any investigation or cleanup of any threatened or actual Release (as
defined below) of any Hazardous Substance.
(c) Except as set forth on Schedule 3.14(c) and heretofore
made available to Parent and Buyer, since August 27, 1997, (except for Sierra
International Inc. ("Sierra"), as to which the date shall be December 1, 1999)
to Seller's Knowledge, there have been no environmental inspections,
investigations, studies, audits, tests, reviews or other analyses conducted by
governmental entities relating to Xxxxx Division or any property currently or
formerly owned, operated or leased by any Seller with respect to Xxxxx Division,
which are in Seller's possession or control.
3.15 Employees. Schedule 3.15 sets forth a complete list of all
non-hourly employees of the Xxxxx Division as of June 2000 and their annualized
rates of pay as of June 2000 and since that date there have been no changes in
the annual rates of pay of any Xxxxx Division employees, except for normal
adjustments. To Seller's Knowledge, there has not been since December 31, 1999,
any efforts by any labor organization to organize into a collective bargaining
unit any employees of the Xxxxx Division.
3.16 Bank Accounts. Schedule 3.16 is an accurate list of all material
non-United States bank accounts maintained by the Subsidiaries of the Xxxxx
Division that will be transferred to Buyer at Closing and the authorized
signatories therefor.
3.17 No Brokers. Except for the compensation payable to XX Xxxxxx in
connection with the transactions contemplated by this Agreement, which is to be
paid by Seller, no broker, finder or similar agent is entitled to any brokerage
commission, finder's fee or any similar compensation in connection with this
Agreement or the transactions contemplated hereby. Except for XX Xxxxxx, no
broker, finder or similar agent has been employed by or on behalf of Seller or
its Subsidiaries or Affiliates, and there is no person with which the Seller or
its Subsidiaries or Affiliates has had any dealings or communications of any
kind with respect to this Agreement and the transactions contemplated hereby.
Neither the Subsidiaries or the Affiliates will be liable to XX Xxxxxx or any
other broker, finder or similar agent for any fees, commissions, expenses,
indemnification or any other obligation as a results of this Agreement and the
transactions contemplated hereby.
3.18 No Warranties. Except to the extent expressly provided otherwise
in this Agreement, it is understood and agreed that Seller is not making and has
not at any time made any warranties or representations of any kind or character,
expressed or implied, with respect to the Assets or the Shares, including any
warranties or representations as to habitability, merchantability, fitness for a
particular purpose, title, tax consequences, operating history or projections,
valuation or any other matter or thing regarding the Assets and the Shares and,
except as otherwise expressly provided in this Agreement, the Assets are
provided "AS IS, WHERE IS, WITH ALL FAULTS."
ARTICLE IV
REPRESENTATIONS AND WARRANTIES BY BUYER AND PARENT
Buyer represents and warrants to Seller as of the date hereof as
follows:
4.01 Organization and Standing. Each of Buyer and Parent is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Buyer and Parent have the corporate power and
authority, to enter into and perform the terms of this Agreement, the agreements
and instruments referred to herein, and the transactions contemplated hereby and
thereby.
4.02 Authorization. The execution, delivery and performance of this
Agreement and of the agreements and instruments called for hereunder, and the
consummation of the transactions contemplated hereby and thereby, have been duly
and validly authorized by all necessary actions of Buyer and Parent. This
Agreement constitutes, and upon execution and delivery, each other agreement and
instrument will constitute, a valid and binding agreement and obligation of
Buyer and Parent, enforceable in accordance with their respective terms. The
execution, delivery and performance by Buyer and Parent of this Agreement and
the agreements and instruments called for hereunder will not require the
consent, approval or authorization of any person, entity or governmental
authority, other than under the HSR Act.
4.03 Absence of Litigation; Compliance With Laws. There is no action,
suit, investigation, claim, arbitration or litigation pending to which Buyer or
Parent is a party or, to the knowledge of Buyer or Parent, threatened, against,
affecting or involving the transactions contemplated by this Agreement, at law
or in equity, or before or by any court, arbitrator or governmental authority.
4.04 No Warranty. Buyer acknowledges and agrees that upon Closing,
Seller shall sell and convey to Buyer and Buyer shall accept the Assets "AS IS,
WHERE IS, WITH ALL FAULTS," except to the extent expressly provided otherwise in
this Agreement, and that no warranty, express or implied, including any warranty
of merchantability or fitness for a particular purpose, has been made by Seller.
4.05 Investment Intent. The Shares are being purchased for Buyer's own
account and not with the view to, or for resale in connection with, any
distribution or public offering thereof within the meaning of the Securities Act
of 1933, as amended (the "Act").
4.06 Experience. Buyer has specific knowledge and experience in
financial and business matters of Seller such that it is capable of evaluating
the merits and risks of its investment in the Shares being acquired hereunder.
Buyer is an "accredited investor" within the meaning of Rule 501 under the Act.
Buyer understands and is able to bear any economic risks associated with such
investment (including, without limitation, the necessity of holding the
securities for an indefinite period of time, inasmuch as the Shares have not
been registered under the Act or any state securities laws).
4.07 No Brokers. No broker, finder or similar agent has been employed
by or on behalf of Buyer or Parent, and no person with which the Buyer or Parent
has had any dealings or communications of any kind is entitled to any brokerage
commission, finder's fee or any similar compensation in connection with this
Agreement or the transactions contemplated hereby.
4.08 Financing. Buyer has sufficient funds available to consummate
the transactions contemplated hereby and pay all related fees and expenses.
ARTICLE V
COVENANTS AND AGREEMENTS
5.01 Interim Operations of the Xxxxx Division. From the date hereof
until the Closing Date, except as contemplated by any other provision of this
Agreement or as set forth in Schedule 5.01, unless Parent has previously
consented in writing thereto, Seller shall operate the Xxxxx Division in the
ordinary course of business and Seller shall not, with respect to the Xxxxx
Division:
(a) incur any indebtedness or issue any debt securities or
assume, guarantee or endorse the obligations of any other Persons, except for
obligations incurred in the ordinary course of business consistent with past
practice;
(b)acquire or dispose of any material Assets except in the
ordinary course of business;
(c) enter into or amend any agreements, commitments or
contracts, except amendments, agreements, commitments or contracts made in the
ordinary course of business and which involve amounts not more than $250,000
individually or $1,000,000 in the aggregate;
(d) engage in any transactions with, or enter into any
contracts or agreements with, any Affiliates except in the ordinary course of
business.
(e) issue, deliver, sell, pledge, dispose of or otherwise
encumber any shares of capital stock, any other voting securities or equity
equivalent or any securities convertible into, or any rights, warrants or
options to acquire any such shares, voting securities, equity equivalent or
convertible securities of any Subsidiary;
(f) sell, lease, transfer, pledge, mortgage, encumber or
otherwise dispose of, or agree to sell, lease or otherwise dispose of, any of
the Assets, including without limitation any such transactions between the Xxxxx
Division and the Seller, other than transactions that are in the ordinary course
of business consistent with past practice;
(g) (x) increase the compensation or benefits payable or to
become payable to officers, employees or consultants of the Xxxxx Division
(except for increases in the ordinary course of business consistent with past
practice), (y) grant any severance or termination pay to, or enter into any stay
put, termination or severance agreement or similar agreement or arrangement
with, any officer of the Xxxxx Division, or (z) enter into or amend any
employment or consulting agreement with any officer, employee or consultant of
the Xxxxx Division;
(h) violate or fail to perform any material obligation or duty
imposed upon the Xxxxx Division by any applicable federal, state or local law,
rule, regulation, guideline or ordinance;
(i) make any change to accounting methods, periods, policies
or procedures, including changing the annual accounting period of the Seller,
Subsidiaries or Affiliates;
(j) prepare or file any Tax Return inconsistent with past
practice or, on any such Tax Return, take any position make any election, or
adopt any method that is inconsistent with positions taken, elections made or
methods used in preparing or filing similar Tax Returns in prior periods without
providing Buyer with prior notification of such action.
(k) make any material Tax election or settle or compromise any
material federal, state, local or foreign income Tax liability without providing
Buyer with prior notification of such action.
(l) take any action or omit to take any required action,
including but not limited to those in connection with the determination of
inventory costs, that would materially adversely affect the Tax liability of the
Seller, Subsidiaries or Affiliates;
(m) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the ordinary
course of business or in accordance with their terms, of liabilities reflected
or reserved against in, the most recent financial statements described in
Section 3.05 or incurred in the ordinary course of business;
(n) take any action that would likely result in the
representations and warranties made by it herein becoming false or inaccurate
in any material respect; or
(o)enter into any agreement to do any of the foregoing.
5.02 Reasonable Access; Confidentiality.
(a) From the date hereof until the Closing, Seller shall
promptly give Parent and its representatives (including its attorneys, agents
and lenders or other sources of financing), upon reasonable notice to Seller,
reasonable access to the assets, properties, books, records, agreements,
employees and commitments of the Xxxxx Division and permit Parent to make such
inspections as it may reasonably require and to furnish Parent during such
period with all such information relating to the Xxxxx Division as Parent may
from time to time reasonably request. All requests for such access shall be
subject to prior approval of Xxxx Xxxxx, on behalf of Seller. Buyer's access
with respect to environmental matters shall be governed by Paragraph (b) of this
Section.
(b) Buyer acknowledges and agrees that Seller has provided it
with a copy of the Environmental Compendium prepared by Xxxxx & Xxxxxxxxxx, Inc.
which provides detailed information regarding environmental matters and that in
so doing, Seller has fulfilled its obligations to Seller pursuant to this
Section 5.02 with respect to environmental matters, provided that, with respect
to the Sierra facility, Section 5.02(a) will govern.
(c) Any information provided to or obtained by Parent pursuant
to paragraph (a) above is "Information" as defined under the Confidentiality
Agreement, dated May 23, 2000, between Seller and Parent (the "Confidentiality
Agreement"), and is to be held by Parent in accordance with and be subject to
the terms of the Confidentiality Agreement.
(d) Parent agrees to be bound and comply with the provisions
set forth in the Confidentiality Agreement as if such provisions were set forth
herein, and such provisions are hereby incorporated hereby by reference.
5.03 Negative Covenants of Buyer and Parent. Pending and prior to the
Closing, Buyer and Parent will not, without the prior written approval of
Seller, take any action or fail to take any action that would cause any of the
representations, warranties or covenants of Buyer and Parent contained herein to
be untrue, incorrect or incapable of being performed or satisfied in any
material respect.
5.04 Purchase Price Allocation. The parties shall use their best
efforts to agree to a preliminary allocation of the Purchase Price (the
"Preliminary Allocation") at or prior to the Closing, which shall allocate the
Purchase Price among (i) the shares of capital stock of each of the
Subsidiaries, (ii) the interests in the Affiliates and (iii) the other Assets.
The parties shall use their best efforts to enter into an agreement (the
"Allocation Agreement") simultaneously with the final determination of Purchase
Price. Buyer and Parent shall deliver to Seller a proposed allocation of the
Purchase Price among the Assets for purposes of financial and tax reporting,
which shall be consistent with the Preliminary Allocation, within sixty (60)
days of the Closing Date. Provided that such Allocation is acceptable to Seller,
Seller shall within forty-five (45) days after receipt of such proposed
allocation give written notice to Buyer and Parent of its agreement to such
allocation. If Seller objects to Buyer's and Parent's proposed allocation,
Seller shall give Buyer and Parent written notice of the objections and Seller
and Buyer shall use reasonable efforts to resolve the differences. If within
thirty (30) days after the date on which Seller has given Buyer notice of its
objections, the parties have not adopted the allocation, any dispute related
thereto shall be referred to an independent accounting firm selected by the
parties and resolved thirty (30) days after such referral. The independent
accounting firms' determination shall be conclusive and binding upon Buyer and
Seller. The costs, expenses, and fees of the independent accounting firm shall
be borne equally by the parties. Buyer and Seller agree that Buyer and Seller
will (i) be bound by the Allocation Agreement, (ii) act in accordance with the
Allocation Agreement in the preparation and filing of all Tax Returns, reports,
forms, declarations or questionnaires (including, without limitation, filing
Form 8594 with its federal income tax return for the taxable year that includes
the Closing Date) and in the course of any tax audit, refund, claim or
litigation relating thereto and (iii) not take any position inconsistent with
the Allocation Agreement.
5.05 Employment. Effective as of the Closing Date, Buyer shall employ,
on the terms required by Section 5.06, all individuals who are employed by the
Xxxxx Division immediately prior to the Closing Date, including those who are on
lay-off, leave of absence, or short-term disability as set forth on a schedule
to be delivered by Seller to Buyer at Closing (collectively, "Continuing
Employees").
5.06 Compensation and Employee Benefits.
(a) In General. Buyer shall offer employment to each
Continuing Employee on terms and conditions including compensation and employee
benefits which, in the aggregate, are substantially similar to those provided by
the Xxxxx Division immediately prior to the Closing Date, and such compensation
or benefits shall not be materially decreased for a period of at least 12 months
following the Closing Date. Effective as of the Closing Date, Buyer shall assume
all of Seller's obligations to the Continuing Employees, including, but not
limited to, assumption of Seller's obligations under the Transition Agreement
described on Schedule 5.06(a) (all of which shall be deemed part of the
Liabilities), provided, however, the obligation to pay retention benefits under
the Transition Agreement will remain the responsibility of Seller.
(b) Service Credit. For purposes of any employee benefit plan,
program or arrangement established for or made available to Continuing Employees
by the Buyer (the "Buyer Plans") Buyer shall credit such Continuing Employees
with service for all periods of service prior to the Closing Date with the
Seller, any Subsidiary or any Affiliate. Such service will be credited for
purposes of determining eligibility for, vesting in, and the amount of benefits
under all of the Buyer Plans and for all other purposes for which service is
either taken into account or recognized; provided, however, such service need
not be credited to the extent that it would result in duplication of coverage or
benefits.
(c) Welfare Benefit Plans. Until the Closing Date, Seller
shall take such steps as are reasonably required in order to provide coverage
for all Continuing Employees and their respective dependents under the Seller's
ERISA Plans and Seller's Benefit Arrangements which are welfare benefit plans
within the meaning of Section 3(1) of ERISA (the "Seller Welfare Plans").
Coverage for Continuing Employees and their respective dependents under the
Seller Welfare Plans will terminate as of the Closing Date. The Buyer Plans
which are welfare benefit plans within the meaning of Section 3(1) of ERISA (the
"Buyer's Welfare Plans") shall provide coverage and benefits to Continuing
Employees (and the eligible dependents of the Continuing Employees) beginning on
the Closing Date. In addition, no pre-existing condition, limitation, exclusion
or waiting period applicable with respect to any Buyer Welfare Plan will apply
to any Continuing Employee to the extent that such limitations, exclusions or
waiting periods exceed those in effect under the Seller Welfare Plans.
(d) Savings Plans. Effective as of the Closing Date, Seller
will cause all Continuing Employees to become fully vested in their account
balances under the Imo 401K Savings Plan and Imo 401K Savings Plan for Union
Employees of Xxxxx Controls Division (the "Savings Plans"). Following the
Closing Date, Seller will take such actions as are necessary and appropriate to
cause the transfer of the assets and liabilities associated with the account
balances of each Continuing Employee who is a Savings Plans participant to
trusts established by Buyer for such purpose in a "trustee to trustee" transfer.
(e) Hourly Employee Pension Plan. Effective as of the Closing
Date, Seller will cause the transfer of all of the assets and liabilities of the
Retirement Plan for Hourly Employees-Xxxxx Controls Division, Imo Industries
Inc. (the "Hourly Employees Plan") in a "trustee to trustee" transfer to a trust
established by Buyer for the purpose of accepting such transfer; provided that
the assets of the Hourly Employees Plan are sufficient on a plan termination
basis to be eligible on the Closing Date for standard termination pursuant to
Section 4041 of ERISA without the Seller or the ERISA Affiliates being required
to make any additional contributions, it being understood that if the assets of
the Hourly Employees Plan are not sufficient as described in this Section
5.06(e), then Buyer shall be under no obligation to accept any transfer of the
assets or liabilities of the Hourly Employees Plan.
(f) Cooperation. Buyer and Seller agree that they will
cooperate in effecting the transfers described in Sections 5.06(d) and 5.06(e)
above, such cooperation to include, but not be limited to, the exchange of all
information necessary to effect such transfer, and the taking of such actions
necessary to ensure that the transfers required by Sections 5.06(d) and 5.06(e)
above comply with Section 414(l) of the Code and the requirements of ERISA and
the regulations promulgated thereunder.
(g)2000 Bonus Plan. Buyer shall assume the Xxxxx Division's
2000 bonus arrangement, the terms of which are described on Schedule 5.06(g).
(h)W-2 Forms. Buyer and Seller agree to cooperate to provide
each Continuing Employee with one Form W-2 listing the employee's aggregate
wages and taxes pursuant to Rev. Proc. 96-60, Sec. 5 and comparable state and
local payroll laws.
5.07 Filings; Other Action. Subject to the terms and conditions
provided herein, Seller and Buyer shall (a) use their reasonable best efforts to
cooperate with each other in timely making all filings and registration and
timely seeking all consents, authorizations and approvals, and the transfer to
Buyer of all Assets and Permits applicable to the Xxxxx Division, and (b) use
their reasonable best efforts to cause the conditions to each of Seller's and
Buyer's obligations hereunder to be fulfilled. Subject to the preceding
sentence, Buyer shall be solely responsible for transferring any permits,
obtaining any authorization, consent or approval, making any recording or
filing, complying with any waiting period, or performing any remediation or
investigation required under any Environmental Law as a result of the
transaction contemplated hereby.
5.08 Publicity. No publicity, release or announcement concerning the
transactions contemplated hereby shall be issued by either party without the
advance written consent of such other party, except as required by applicable
Law. In the event that a party is required by applicable Law to make a release
or announcement, such party shall provide the other party with a reasonable
opportunity to review such release or announcement before such release or
announcement is made.
5.09 Records. With respect to the financial books and records of the
Xxxxx Division (other than Tax records which are provided for in Section 5.10
and minute books of Seller relating to matters on or prior to the Closing Date),
for a period of ten years after the Closing Date, neither Seller nor Buyer shall
cause or permit their destruction or disposal without first offering to
surrender them to Buyer or Seller as appropriate, and Seller and Buyer shall
allow Buyer and Seller and his representatives, as appropriate, access to such
books and records during regular business hours.
5.10 Tax Matters.
(a) Seller and Buyer shall (i) each provide the other and
shall cause their respective accountants to provide the other party's
accountant, with such assistance as may reasonably be requested by any of them
in connection with the preparation of any Tax Return, or the conduct of any
audit or other examination by any taxing authority or judicial or administrative
proceedings relating to liability for Taxes, including, but not limited to,
providing copies of foreign tax receipts, financial statements and providing
access to financial data needed to calculate earnings and profits of the
Subsidiaries and Affiliates for federal income tax purposes; (ii) each retain
and provide the other and shall cause their respective accountants to provide
the other party's accountant, any records or other information that may be
relevant to such Tax Return, audit or examination, proceeding or determination;
and (iii) each provide the other with any final determination of any such audit
or examination, proceeding or determination that affects any amount required to
be shown on any Tax Return of the other for any period. Without limiting the
generality of the foregoing, Buyer shall retain and Seller shall retain, until
the applicable statute of limitations (including any extensions) have expired,
copies of all Tax Returns, supporting work schedules, and other records or
information that may be relevant to such returns for all Tax periods or portions
thereof ending before or including the Closing and shall not destroy or
otherwise dispose of any such records without first providing the other party
with a reasonable opportunity to review and copy same at the cost of such other
party.
(b) (i) Except as provided in Section 5.10(b)(ii), below,
Seller shall prepare and timely file all required income Tax Returns with
respect to the Xxxxx Division for all periods commencing prior to and ending on
or before the Closing Date and shall pay all Taxes related thereto.
(ii) Buyer shall prepare and timely file, and
shall pay all Taxes related thereto,
all required income Tax Returns for periods ending on or before the Closing Date
and filed after the Closing Date with respect to any Subsidiary or Affiliate for
which an election is not made under Section 5.10(f) of this Agreement. Seller
shall pay the amount of such Taxes to Buyer within thirty (30) days after the
date on which such Taxes are paid to the extent such Taxes are not reflected in
any reserve for Taxes of the Xxxxx Division or previously prepaid by the Seller.
Buyer shall forward such Tax Returns and supporting calculations to Seller, for
Seller's review, no later than thirty (30) days prior to due date (including
extensions) of such Tax Returns. In preparation of such Tax Returns, Buyer shall
use accounting methods and elections consistent with those used previously by
Seller, unless Buyer obtains Seller's written consent to do otherwise. No
Affiliate or Subsidiary shall file, and Buyer shall prevent all Affiliates and
Subsidiaries from filing, an amended income tax return for any pre-Closing or
Straddle Period without Seller's written consent, which consent will not be
unreasonably withheld.
(iii) Buyer shall pay all Taxes of the Xxxxx
Division for all periods that begin
after the Closing Date, and shall prepare and file all Tax Returns with respect
to the Xxxxx Division for all periods commencing after the Closing Date and
ending thereafter. Buyer shall prepare or cause to be prepared and file or cause
to be filed any income Tax Returns with respect to the Xxxxx Division for Tax
periods which begin before the Closing Date and end after the Closing Date (the
"Straddle Period"). Seller shall pay to Buyer within thirty (30) days after the
date on which income Taxes with respect to the Xxxxx Division are paid
(determined on a basis consistent with prior practice of the Xxxxx Division)
with respect to such Straddle Period an amount equal to the portion of such
income Taxes which relates to the portion of such Taxable period ending on the
Closing Date (to the extent such Taxes are not reflected in any reserve for
Taxes of the Xxxxx Division or previously prepaid by the Seller) with such
portion determined by assuming that the pre-Closing Date period constitutes a
separate taxable period of the Subsidiaries and Affiliates and by taking into
account the actual activities and income, deductions or loss of the Subsidiaries
and Affiliates during such Straddle Period, except that exemptions, relief
and/or allowances for a taxable period beginning prior to and ending after the
Closing Date that are calculated on an annual or periodic basis shall be assumed
to be fully claimed and available for offset and shall be apportioned to that
pre-Closing Date period on a per diem basis. Buyer shall forward the Straddle
Period Tax Returns and supporting calculations to Seller, for Seller's review,
no later than thirty (30) days prior to due date (including extensions) of such
Tax Returns. In preparation of the Straddle Period Tax Returns, Buyer shall use
accounting methods and elections consistent with those used previously by
Seller, unless Buyer obtains Seller's written consent to do otherwise.
(c) Buyer shall pay all state and local sales and stock
transfer taxes and all recording costs and fees however styled or designated
that are required to be paid in connection with the transfer of the Assets
contemplated by this Agreement.
(d) Seller and Buyer shall provide to each other prompt notice
of, and as requested by the other party reasonable cooperation in respect of,
any audit or similar investigation or proceeding in which the Internal Revenue
Service or any other Governmental Authority makes or proposes to make a Tax
adjustment to any Tax period of Seller ending on or before the Closing Date.
(e) Buyer shall not make, or cause to be made, any Section
338(g) election or similar election pursuant to any Law in connection with the
transactions contemplated by this Agreement.
(f) At Buyer's option, and subject to Buyer's agreement to
indemnify Seller against any additional tax liability to Seller resulting
therefrom, Seller will join with Buyer in making an election under Section
338(h)(10) of the Code (and any corresponding elections under state, local, or
foreign tax law) (collectively a "Section 338(h)(10) Election") with respect to
the purchase and sale of the stock of Sierra or any other U.S. domestic
subsidiary (the "Shares") within the meaning of section 7701(a)(30) of the Code.
Buyer shall be solely responsible for preparing and filing all forms required to
make the Section 338(h)(10) Election and shall provide such forms for review by
Seller within 30 days of filing.
(g) Seller will remain liable for, and will indemnify Buyer
for, any and all Taxes that may be imposed upon Buyer or any of the Subsidiaries
and/or Affiliates due to the Subsidiaries and/or Affiliates having been members
of the consolidated, unitary or combined group which includes Seller or a
Subsidiary or Affiliate prior to the Closing Date (other than a group the common
parent of which is a Subsidiary or Affiliate) (the "Consolidated Group Tax
Liability").
(h) (i) Except as set forth below, Seller shall have the sole
right to represent the interests of Subsidiary or Affiliate in any Tax audit or
administrative or court proceeding relating to taxable periods of the Subsidiary
or Affiliate which end on or before the Closing Date, and to employ counsel of
its own choice and expense, to the extent Seller is liable for such Taxes as
indemnitor under Article IX of this Agreement. Seller agrees that it will not
settle any such audit in a manner which would adversely affect the Subsidiary or
Affiliate after the Closing Date without the prior written consent of Buyer,
which consent shall not be unreasonably withheld. Buyer agrees that it will
cooperate fully with Seller and its counsel in the defense against or compromise
of any claim in any such proceeding.
(ii) If any Governmental Authority asserts
a claim, makes an assessment or
otherwise disputes or affects the Tax reporting position of any Subsidiary or
Affiliate for taxable periods for which Seller has indemnified Buyer, Buyer
shall, promptly upon receipt by Buyer or any Subsidiary or Affiliate of notice
thereof, inform Seller thereof. Seller's indemnity obligation hereunder shall be
reduced or eliminated to the extent Buyer's failure to comply with the
proceeding sentence prejudices Seller's ability properly and fully to defend
against the underlying Tax.
(iii) Buyer shall have the sole right to
represent the interests of any Subsidiary
or Affiliate in all other Tax audits or administrative or court proceedings.
(iv) To the extent of any determination of Tax
liability of any Subsidiary or
Affiliate, whether as a result of an audit or examination, a claim for refund,
the filing of an amended return or otherwise, results in any refund of Taxes
paid attributable to any period which ends on or before the Closing Date, any
such refund shall belong to Seller, and Buyer shall promptly pay any such refund
in excess of the respective prepaid assets related to Taxes on each Subsidiary's
balance sheet included in the Closing Date Balance Sheet, and the interest
actually received thereon, to Seller upon receipt thereof by Buyer.
5.11 Xxxx-Xxxxx-Xxxxxx and Foreign Antitrust Filings. As promptly as
practicable and no later than five (5) Business Days following the execution of
this Agreement, Seller and Buyer shall complete any filing that may be required
pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, ("HSR Act") and, as promptly as practicable thereafter, complete any
filings that may be required under foreign antitrust laws or regulations, or
shall mutually agree that no such filings are required. Seller and Buyer shall
diligently take, or fully cooperate in the taking of, all necessary and proper
steps, and provide any additional information reasonably requested in order to
comply with, the requirements of the HSR Act or any order, rule, regulation or
decree of any applicable federal, state or foreign antitrust authority.
5.12 Insurance. Seller and its Subsidiaries shall maintain in full
force and effect all of its existing casualty, liability, and other insurance
through the day following the Closing Date in amounts not less than those in
effect on the date hereof.
5.13 Use of Business Names. The Buyer shall not use the trademarks,
service marks, brand names and corporate names of Seller and its subsidiaries
set forth on Schedule 5.13 or any contraction thereof (the "Names") in any
manner without prior written consent from the Seller except that the Buyer may,
to the extent that such Names are used by the Xxxxx Division on stationery,
signage, invoices, receipts, forms, packaging, advertising and promotional
materials, product, training and service literature and materials, computer
programs or like materials or appear on Inventory at the Closing, use such
materials or sell such Inventory after the Closing Date for a period of six (6)
months without altering or modifying such materials or Inventory, or removing
such Names.
5.14 Receipt of Cash. If, following the Closing Date, Seller receives
any cash payments properly relating to the Xxxxx Division and which would have
been included among the Assets, such payments will be promptly forwarded and
remitted to the Buyer.
ARTICLE VI
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
The obligations of Buyer to purchase the Assets and assume the
Liabilities and to proceed with the Closing are subject to the satisfaction (or
waiver by Buyer) at or prior to the Closing of each of the following conditions:
6.01 Representations and Covenants. The representations and warranties
of Seller made herein or in any agreement, instrument or document called for
hereunder shall have been true and correct in all material respects when made
and shall be true and correct in all material respects on the Closing Date as
though such representations and warranties were made on and as of the Closing
Date, except for those representations and warranties that are qualified by
materiality, in which case they shall be true and correct in all respects.
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 Seller prior to the Closing Date.
6.02 Delivery of Documents and Assets. Seller shall have executed and
delivered to Buyer all agreements and instruments and delivered all documents
required to be delivered by Seller to Buyer pursuant to Section 8.02. The Assets
conveyed at Closing shall include the Shares and the Seller's interests in the
Affiliates.
6.03 Legal Proceedings. No action or proceeding by or before any
governmental authority shall have been instituted or threatened (and not
subsequently dismissed, settled or otherwise terminated) which might restrain,
prohibit or invalidate the transactions contemplated by this Agreement (but not
including an action or proceeding instituted or threatened by Buyer).
ARTICLE VII
CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
The obligation of Seller to sell, transfer, convey and deliver the
Assets and to proceed with the Closing are subject to the satisfaction (or
waiver by Seller) at or prior to the Closing of each of the following
conditions:
7.01 Representations and Covenants. The representations and warranties
of Buyer and Parent made in this Agreement or in any agreement, instrument or
document called for hereunder shall have been true and correct in all material
respects when made and shall be true and correct in all material respects on the
Closing Date as though such representations and warranties were made on and as
of the Closing Date, and Buyer and Parent shall have performed and complied in
all material respects with all covenants and agreements required to be performed
or complied with by Buyer and Parent prior to the Closing Date.
7.02 Delivery of Documents. Buyer shall have delivered to Seller the
Purchase Price, assumed the Liabilities and delivered all agreements,
instruments and documents required to be delivered by Buyer to Seller pursuant
to Section 8.03.
7.03 Legal Proceedings. No action or proceeding by or before any
governmental authority shall have been instituted or threatened (and not
subsequently dismissed, settled, or otherwise terminated) that might restrain,
prohibit or invalidate the transactions contemplated by this Agreement, other
than an action or proceeding instituted or threatened by Seller.
ARTICLE VIII
THE CLOSING
8.01 Closing. Unless otherwise agreed by the parties hereto, the
Closing shall be held at 10:00 A.M. local time on the later of (i) the third
Business Day following notification of termination of the waiting period under
the HSR Act and (ii) the date the Seller's interests in the non-U.S.
Subsidiaries and Affiliates are transferable to Buyer under their terms (but in
no event more than 90 days after (i)) at the offices of Xxxxx & Xxxxxxx L.L.P.
in Baltimore, MD or at such other time and place as the parties may agree.
8.02 Delivery by Seller. At or before the Closing, Seller shall
deliver to Buyer the following agreements and instruments, dated as of
the Closing Date:
(a) the Assumption Agreement;
(b) the Assignment of Contracts;
(c) the Assignment of Leases;
(d) Intellectual Property Assignment;
(e) Certificates representing the Shares, accompanied by duly
executed stock powers in proper form for transfer; provided, however, if Closing
occurs prior to January 21, 2001, at Buyer's request, Seller will defer transfer
of certain of the Shares until January 21, 2001;
(f) the Xxxx of Sale;
(g) certificate of the Secretary of Seller certifying
as to the resolutions authorizing
this Agreement and the transactions contemplated hereby;
(h) articles of organization, corporate records and
minute books of each Subsidiary,
certified as of the most recent date practicable; and
(i) certificate of the Chief Executive Officer and Chief
Financial Officer of Seller as to
Seller's satisfaction of the conditions specified in Section 6.01 and 6.03;
(j) the consents, approvals or authorizations set forth
in Schedule 3.02;
(k) such other agreements, instruments or documents as Buyer
may reasonably request as are necessary to vest in Buyer all of Seller's title
to the Assets.
8.03 Delivery by Buyer. At or before the Closing, Buyer shall
deliver to Seller the following:
(a) Purchase Price. The Purchase Price in the amount and manner set
forth in Section 2.04.
(b) Agreements and Instruments. The following agreements and
instruments, dated as of the Closing Date:
(i) Assumption Agreement;
(ii) certificates of the Secretaries of Buyer
and Parent certifying as to the resolutions authorizing this Agreement and the
transactions contemplated hereby; and
(iii) such other instruments or documents as
Seller may reasonably request as arenecessary to assure the assumption by
Buyer of all of the Liabilities assumed by
Buyer pursuant to this Agreement and the transactions contemplated hereunder.
ARTICLE IX
SURVIVAL; INDEMNIFICATION
9.01 Survival Periods. Except for the representations and warranties
set forth in Section 3.01, 3.04(a), the first sentence of 3.07(a) and 3.09 which
shall survive for eighteen (18) months following the Closing Date, the
representations and warranties of the parties contained in this Agreement shall
not survive the Closing Date. The covenants contained herein shall survive the
Closing indefinitely (or such earlier period as is provided therein).
9.02 Indemnification by Seller. Subject to the limitations set forth
herein, Seller hereby agrees from and after the Closing Date to indemnify,
defend and hold harmless Buyer and Parent ("Buyer Indemnitees") from and against
all demands, claims, complaints, actions or causes of action, suits,
proceedings, investigations, arbitrations, assessments, losses, damages,
liabilities, costs and expenses, including, but not limited to, interest,
penalties and attorneys' fees and disbursements (collectively, "Losses"),
asserted against, imposed upon or incurred by the Buyer Indemnitees, directly or
indirectly, by reason of or resulting from (a) the Excluded Liabilities and (b)
any breach by the Seller of the covenants, representations, warranties made by
Seller in this Agreement. Notwithstanding any other provision of this Agreement,
(i) any claim for indemnity or reimbursement under this Section 9.02 or Section
9.05 (except for Losses from Excluded Liabilities) must be made in writing
within 18 months after Closing, and shall only be made after a Loss or Shared
Environmental Cost (as defined below) has been actually realized or incurred or
an event has occurred or a condition discovered that is reasonably likely to
result in a Shared Environmental Cost or Loss, (ii) the maximum aggregate
liability of the Seller under Sections 9.02, 9.05 and all other matters
hereunder (other than Excluded Liabilities and the covenants set forth in
Sections 2.01(a), 2.05, 5.04, 5.08, 5.10, 5.14 and 9.02 (the "Excluded
Covenants") shall not exceed $7.2 million, and (iii) Seller shall only be liable
for Losses, Shared Environmental Costs and all other matters hereunder (other
than Excluded Liabilities and the Excluded Covenants) to the extent that such
Losses, Shared Environmental Costs and other matters (other than Excluded
Liabilities and the Excluded Covenants), in the aggregate, exceed $1 million.
9.03 Indemnification by Buyer. Buyer hereby agrees from and after the
Closing Date to indemnify, defend and hold harmless Seller from and against all
Losses asserted against, imposed upon or incurred by Seller, directly or
indirectly, by reason of or resulting from (a) the Liabilities, (b) the business
and operations of the Xxxxx Division, including the litigation described on
Schedule 3.03, attached hereto, whether they are the result of events occurring
prior to or following Closing; and (c) any noncompliance by Buyer with any
covenants, agreements or undertakings of Buyer contained in or made pursuant to
this Agreement, or any agreements or instruments contemplated hereby.
9.04 Conditions of Indemnification. Except as otherwise provided in
Section 5.10 and Section 9.05, the obligations and liabilities of each party
hereunder with respect to its indemnity and reimbursement obligations pursuant
to this Article IX, resulting from any claim (hereinafter called collectively,
"Claims"), shall be subject to the following terms and conditions:
(a) The indemnifying party shall have the right to undertake
at its sole expense, by counsel of its own choosing, the defense of such Claim
and the indemnified party shall fully cooperate with and provide all requested
information to the indemnifying party in its defense of such Claim.
(b) In the event that the indemnifying party shall elect not
to undertake such defense, or within a reasonable time after notice of any such
Claim from the other party shall fail to defend, the indemnified party (upon
notice to the other party) shall have the right to undertake the defense,
compromise or settlement of such Claim, by counsel or other representatives of
its own choosing, on behalf of and for the account and risk of the other party.
(c) Anything in this Article IX to the contrary
notwithstanding, (i) if there is a reasonable probability in indemnified party's
judgment, that a Claim may materially and adversely affect the indemnified party
other than as a result of money damages or other money payments, the indemnified
party shall have the right, at its own cost and expense, to participate in the
defense, compromise or settlement of the Claim, (ii) the indemnifying party
shall not, without the indemnified party's written consent, settle or compromise
any Claim or consent to entry of any judgment which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
indemnified party of a release from all liability in respect of such Claim, and
(iii) in the event that the indemnifying party undertakes defense of any Claim,
the indemnified party, by counsel or other representative of its own choosing
and at its sole cost and expense, shall have the right to consult with, and be
provided reasonable access to all relevant information within the possession of,
the indemnifying party and its counsel or other representatives concerning such
Claim and the indemnifying party.
9.05 Reimbursement of Shared Environmental Costs.
(a) Subject to the limitations set forth in the second
sentence of Section 9.02, Seller hereby agrees, from and after the Closing Date,
to reimburse Buyer for 60% of (i) all reasonable costs and expenses incurred by
Buyer and paid to third parties in conducting any investigation, sampling,
analysis or monitoring ordered by any Governmental Authority or specifically
required by Environmental Law (other than investigation, sampling, analysis or
monitoring required by any environmental permit or in the ordinary course of the
Xxxxx Division's business as currently conducted) and any clean-up conducted as
a result thereof (collectively, "Clean-up") in response to the release of
Hazardous Substances at, on, or under the Real Property prior to the Closing
Date, and (ii) all fines assessed against Buyer to the extent arising from the
Xxxxx Division's violations of Environmental Law prior to the Closing Date, such
costs, expenses, and fines hereinafter referred to as "Shared Environmental
Costs."
(b) Shared Environmental Costs shall not include any costs and
expenses (i) incurred in performing any investigation, sampling, or monitoring
that is not required by a Governmental Authority in accordance with
Environmental Law, (ii) that are not paid to third parties, and (iii) incurred
when Buyer does not own at least a 50% interest in the Real Property or a lease
of the Real Property or Buyer does not own at least a 50% interest in an
Affiliate who owns at least a 50% interest in the Real Property or a lease of
the Real Property.
(c) Buyer and Seller agree to cooperate in connection with any
Shared Environmental Costs subject to reimbursement under this Section. Buyer
shall not agree to incur, and shall not incur, any Shared Environmental Costs
without consulting with Seller in good faith beforehand, unless time for such
consultation would cause Buyer to violate any Environmental Law or any
requirement of any Governmental Authority. Buyer shall minimize Shared
Environmental Costs to the maximum extent practicable without unreasonably
interfering with the operations of the Xxxxx Division as they are currently
conducted.
(d) Buyer shall promptly notify Seller upon discovering any
information relating to Hazardous Substances released at, on, or under the Real
Property or violations of Environmental Law committed by the Xxxxx Division
prior to the Closing Date, shall consult with Seller prior to disclosing such
information to any Governmental Authority, and shall promptly provide to Seller
copies of all reports, assessments, audits, technical data correspondence or
other documents relating to the foregoing. Buyer shall provide Seller and its
representatives with reasonable access to the Real Property, including the right
to take split samples in connection with any Clean-up. Buyer and Seller agree
that they each shall maintain in strict confidence any information concerning
Shared Environmental Costs, except to the extent that disclosure to third
parties is required by law or as both parties jointly agree in writing or to the
extent such information must be provided to either parties' insurers or
financial, legal or environmental advisors or financing sources. If any law
requires any party to disclose such information, such party will promptly notify
the other party and will give such party a reasonable opportunity to review and
comment in advance upon the content and timing of any such disclosure.
(e) Buyer and Seller agree that any Clean-up for which Buyer
seeks reimbursement under this section shall be (i) undertaken in the most
commercially reasonable manner under the circumstances that will not
unreasonably interfere with the operations of the Xxxxx Division as currently
conducted and based upon the understanding that the Real Property will continue
to be used for industrial purposes; (ii) shall not exceed the least stringent
requirements of Environmental Law or any clean-up standards set forth,
established, published, or promulgated under, pursuant to, or by an
Environmental Law or Governmental Authority having jurisdiction over such
Clean-up, as of the date of such Clean-up, (iii) shall be conducted in
compliance with all Environmental Laws, and (iv) shall be performed by qualified
professionals carrying commercially reasonable insurance naming Buyer and Seller
as additional insureds. To the extent necessary to achieve the purposes set
forth in (e)(i), Buyer shall agree to a deed restriction or other institutional
controls at the Real Property to the extent it has authority to do so, provided
that such restriction or controls shall not restrict or limit the industrial
activities currently being conducted at such Real Property. Buyer agrees that it
shall, in good faith, to the extent it has authority to do so, seek to enter,
when necessary, into an agreement with the Governmental Authority having
jurisdiction over the Clean-up, to allow the Buyer to use the most commercially
reasonable method that would not unreasonably interfere with the operations of
the Xxxxx Division as currently conducted and the least stringent standard in
connection with the Cleanup under such circumstance and use.
(f) Buyer shall submit any reimbursement requests hereunder to
Seller within 45 days of receiving any invoice for or other request for payment
of Shared Environmental Costs.
9.06 Exclusive Remedy. The parties acknowledge and agree that, except
in the case of fraud, their sole remedy after the Closing for any breach of any
covenant, representation or warranty contained in this Agreement or for any
matter arising under Environmental Laws or relating to Hazardous Substances
shall be the indemnification and reimbursement provisions set forth in this
Article IX. Buyer, on behalf of itself and its successors and assigns, hereby
agrees to waive any and all claims it now has or that it or its successors and
assigns may in the future have against Seller pursuant to Environmental Laws or
relating to Hazardous Substances, other than as provided in the preceding
sentence. Notwithstanding the foregoing, nothing herein shall be construed or
interpreted as limiting or impairing the rights or remedies the parties may have
as set forth in Article XI hereof.
ARTICLE X
TERMINATION
If the Closing has not occurred on or before March 31, 2001 either
party may, upon written notice to the other party hereto, terminate this
Agreement without any further obligation to the other hereunder, provided, that
such notice of termination is given prior to the date of the Closing; and
provided further, that the party seeking to terminate this Agreement under this
Article shall not be in default under this Agreement. Upon termination of this
Agreement pursuant to this Article X, this Agreement shall be deemed null, void,
and of no further force and effect (except for the provisions of Article XI,
which shall survive such termination).
ARTICLE XI
REMEDIES
11.01 Default by Buyer. If Buyer shall default in the performance of
its obligations under this Agreement in any material respect or if, as a result
of Buyer's action or failure to act, the conditions precedent to Seller's
obligation to close specified in Article VII are not satisfied, and for such
reason or reasons the transactions contemplated by this Agreement are not
consummated, and provided that Seller shall not then be in default in the
performance of Seller's obligations hereunder, Seller shall be entitled, at
Seller's sole option, by written notice to Buyer, (a) to require Buyer to
consummate and specifically perform the purchase in accordance with the terms of
this Agreement, if necessary through injunction or other court order or process;
or (b) to terminate this Agreement.
11.02 Default by Seller. If Seller shall default in the performance of
Seller's obligations under this Agreement in any material respect, or if, as a
result of Seller's action or failure to act, the conditions precedent to Buyer's
obligation to close specified in Article VI are not satisfied and for such
reason or reasons the transactions contemplated by this Agreement are not
consummated, and provided that Buyer shall not then be in default in any
material respect in the performance of Buyer's obligations hereunder, Buyer
shall be entitled, at Buyer's sole option, by written notice to Seller, (a) to
require Seller to consummate and specifically perform the sale in accordance
with the terms of this Agreement, if necessary through injunction or other court
order or process; or (b) to terminate this Agreement.
ARTICLE XII
MISCELLANEOUS
12.01 Additional Actions and Documents. Each of the parties hereto
agrees that it will, at any time, prior to, at or after the Closing Date, take
or cause to be taken such further actions, and execute, deliver and file or
cause to be executed, delivered and filed such further documents and
instruments, and obtain such consents and approvals, as may be necessary or
reasonably requested in connection with the consummation of the purchase and
sale contemplated by this Agreement or in order to fully effectuate the
purposes, terms and conditions of this Agreement.
12.02 Expenses. Each party hereto shall pay its own expenses incurred
in connection with this Agreement and in the preparation for and consummation of
the transactions provided for herein. Notwithstanding the foregoing, Buyer shall
pay all costs of conveyances, all notary fees, and all sales, stamp,
documentary, transfer, and recording taxes and fees applicable to the
transactions contemplated by this Agreement and the instruments and documents
called for hereunder.
12.03 Notices. All notices, demands, requests, or other communications
which may be or are required to be given or made by any party to any other party
pursuant to this Agreement shall be in writing and shall be hand delivered
(including delivery by overnight courier), or transmitted by facsimile addressed
as follows:
(i) If to Parent:
Teleflex Incorporated
000 Xxxx Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Attention: Xxxxxx X. Chance, Esquire
Fax: 000-000-0000
with copies (which shall not constitute notice) to:
Dechert
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxxx, Esquire
Fax: 000-000-0000
(ii) If to Buyer:
TFX Acquisition Incorporated
000 Xxxx Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Attention: Xxxxxx X. Chance, Esquire
Fax: 000-000-0000
with copies to:
Dechert
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxxx, Esquire
Fax: 000-000-0000
(iii) If to Seller:
Xxxx Xxxxx
Imo Industries Inc.
Colfax Corporation
0000 Xxxxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Fax: 000-000-0000
with copies (which shall not constitute notice) to:
Xxxxxx X'Xxxxx Colfax Corporation 000 Xxxxx Xxxxx
Xxxxx 000 Xxxxxxxxxxxxx, XX 00000 Fax: 000-000-0000
and
Xxxxx & Xxxxxxx L.L.P.
000 X. Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, XX 00000
Attn.: Xxxxxxx X. Silver, Esq.
Fax: 000-000-0000
or such other address as the addressee may indicate by written notice.
Each notice, demand, request, or communication which shall be given or
made in the manner described above shall be deemed sufficiently given or made
for all purposes at such time as it is delivered to the addressee (the affidavit
of messenger or (with respect to a fax) the confirmation sheet being deemed
conclusive but not exclusive evidence of such delivery) or at such time as
delivery is refused by the addressee upon presentation.
12.04 Waiver. No delay or failure on the part of any party hereto in
exercising any right, power or privilege under this Agreement or under any other
instrument or document given in connection with or pursuant to this Agreement
shall impair any such right, power or privilege or be construed as a waiver of
any default or any acquiescence therein. No single or partial exercise of any
such right, power or privilege shall preclude the further exercise of such
right, power or privilege, or the exercise of any other right, power or
privilege. No waiver shall be valid against any party hereto unless made in
writing and signed by the party against whom enforcement of such waiver is
sought and then only to the extent expressly specified therein.
12.05 Arbitration. If any dispute arises under or in connection with
this Agreement or the performance or enforcement hereof, it shall be decided
finally by an arbitrator in an arbitration proceeding conforming to the Rules of
the American Arbitration Association applicable to commercial arbitration. The
arbitrator shall be appointed by mutual agreement of the parties hereto. If they
cannot agree, then the arbitrator shall be appointed by the American Arbitration
Association. An arbitrator appointed by the American Arbitration Association
shall be impartial. The arbitration shall take place in the State of Virginia.
The decision of the arbitrator shall be conclusively binding upon the parties,
final and nonappealable, and such decision shall be enforceable as a judgment in
any court of competent jurisdiction. Each party shall pay the fees and expenses
of its counsel and its witnesses. The parties shall share equally the fees and
expenses of the arbitrator.
12.06 Benefit and Assignment. Except as hereinafter specifically
provided in this Article XII, Buyer shall not assign this Agreement, in whole or
in part, whether by operation of law or otherwise without the prior written
consent of Seller. Any purported assignment contrary to the terms hereof shall
be null, void and of no force and effect. Notwithstanding the foregoing, Buyer
or any permitted assignee of Buyer may assign this Agreement and any and all
rights hereunder, in whole or in part, to any subsidiary of Buyer so long as
Buyer unconditionally guarantees performance thereof by the assignee. Subject to
the foregoing, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
Except for the provisions of Sections 5.05 and 5.06 hereof, no person or entity
other than the parties hereto and their respective successors and assigns is or
shall be entitled to bring any action to enforce any provision of this Agreement
against any of the parties hereto, and the covenants and agreements set forth in
this Agreement shall be solely for the benefit of, and shall be enforceable only
by, the parties hereto or their respective successors and assigns as permitted
hereunder.
12.07 Entire Agreement; Amendment. This Agreement, together with all
Appendices and Schedules hereto, constitutes the entire agreement among the
parties pertaining to the subject matter hereof and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties. No supplement, modification or waiver of this Agreement
shall be binding unless executed in writing by the party to be bound thereby.
12.08 Severability. If any part of any provision of this Agreement or
any other agreement, document or writing given pursuant to or in connection with
this Agreement shall be invalid or unenforceable under applicable law, such part
shall be ineffective to the extent of such invalidity or unenforceability only,
without in any way affecting the remaining parts of such provisions or the
remaining provisions hereof or of said agreement, document or writing.
12.09 Governing Law. This Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto, shall be governed
by and construed under and in accordance with the laws of the State of Delaware,
excluding the choice of law rules thereof.
12.10 Signature in Counterparts. This Agreement may be executed in
separate counterparts, none of which need contain the signatures of all parties,
each of which shall be deemed to be an original, and all of which taken together
constitute one and the same instrument. It shall not be necessary in making
proof of this Agreement to produce or account for more than the number of
counterparts containing the respective signatures of, or on behalf of, all of
the parties hereto.
IN WITNESS WHEREOF, each of the parties hereto has executed this Asset
Purchase Agreement, or has caused this Agreement to be duly executed and
delivered in its name on its behalf, all as of the day and year first above
written.
SELLER
IMO INDUSTRIES INC.
By:
------------------
Name:
Title:
BUYER
TFX ACQUISITION INCORPORATED
By:
----------------
Name:
Title:
PARENT
TELEFLEX INCORPORATED
By:
--------------------
Name:
Title:
Appendix A
Definitions
"Act" shall have the meaning set forth in Section 4.05.
"Adjustment Date" shall have the meaning set forth in Section 2.05.
"Affiliates" means those affiliates of the Seller listed on Schedule 2
hereto.
"Allocation Agreement" shall have the meaning set forth in Section
5.04.
"Assets" means all real, personal and mixed assets,
rights, benefits and privileges,
both tangible and intangible (including the business of the Xxxxx Division as a
"going concern"), wherever located, owned or held by Seller and which are used
exclusively or held for use exclusively in the business and operation of the
Xxxxx Division. Assets shall include all such assets existing on the date of
this Agreement and all such assets acquired between that date and the Closing
Date as permitted by this Agreement and shall include, without limitation, all
of Seller's right, title and interest in and to the following:
(a) All furniture, fixtures, furnishings, machinery, equipment,
accounts receivable, inventory, supplies, and other property of the Xxxxx
Division, including, without limitation, those described in Schedules 3.07(a),
3.07(c) and 3.07(d).
(b) All leases and subleases, if any, of the Xxxxx Division and
any and all amendments, modifications, supplements, renewals, and extensions
thereof, together with rents and other benefits of the property, including,
without limitation, those described in Schedule 3.07(b).
(c) All engineering, business and other books, papers, files,
customer lists, supplier lists, and records of the Xxxxx Division.
(d) All of the issued and outstanding Shares of the
Subsidiaries held by Seller as described in Schedule 1.
(e) All of the Shares and other interests held by the
Seller in its Affiliates described in Schedule 2.
(f) All Intellectual Property of the Xxxxx Division, including
that described in Schedule 3.06 and all of Seller's direct and indirect right,
title and interest in the name "Teleflex."
(g) All permits of Seller applicable to the Xxxxx Division,
to the extent assignable.
(h) All of Seller's rights to indemnification as set forth in
Article VIII of the Stock Purchase Agreement by and between Echlin Inc. and the
Seller dated as of October 13, 1999, subject to all of the terms and limitations
provided in such agreement.
(i) All of Seller's cash lock-box accounts of the Xxxxx
Division (excluding the cash in those accounts.)
Notwithstanding the foregoing, there shall be excluded from the Assets and
retained by Seller, to the extent in existence at the Closing (i) all cash and
cash equivalents held directly by Imo Industries Inc. or in an escrow account
for the benefit of Imo Industries Inc. related to the sale of the Xxxxxx
facility, (ii) all balances in all bank accounts and short-term cash management
accounts maintained by Imo Industries, Inc. and (iii) all rights in and to
domestic bank accounts of or maintained by Imo Industries, Inc. (collectively,
the "Retained Assets").
"Assignment of Contracts" means that certain Assignment of
Contracts, dated as of the Closing Date and executed by Seller, substantially in
the form attached hereto as Appendix A.
"Assignment of Leases" means that certain Assignment of Leases, dated
as of the Closing Date and executed by Seller, substantially in the form
attached hereto as Appendix B.
"Assumption Agreement" means that certain Assumption Agreement dated the
Closing Date and executed by Buyer and Seller, substantially in the form
attached hereto as Appendix C.
"Xxxx of Sale" means that certain Xxxx of Sale and Assignment of Assets,
dated as of the Closing Date and executed by Seller, substantially in the
form attached hereto as Appendix D.
"Business Day" means any day other than a Saturday, Sunday or a day on which
the banks in New York City are authorized or obligated by law or executive
order to close.
"Buyer Indemnitees" shall have the meaning set forth in
Section 9.02.
"Buyer Plans" shall have the meaning set forth in
Section 5.06(b).
"Buyer's Welfare Plans" shall have the meaning set
forth in Section 5.06(c).
"Cash Adjustment Amount" shall have the meaning specified in Section 2.05.
"Claims" shall have the meaning specified in Section 9.04.
"Clean-up" shall have the meaning set forth in Section
9.05.
"Closing" means the closing of the purchase, assignment
and sale of the Assets contemplated hereunder.
"Closing Date" means the time and date on which the
Closing takes place, as established by Section 8.01.
"Closing Date Balance Sheet" means the consolidated
balance sheet of the Xxxxx Division delivered to Buyer by Seller on the Closing
Date prepared on a basis consistent with the September 30, 2000 pro forma
balance sheet.
"Code" shall mean the Internal Revenue Code of 1986,
as amended. All citations to the Code, or the Treasury Regulations
promulgated thereunder, shall include any
amendments or any substitute or successor provisions thereto.
"Confidentiality Agreement" shall have the meaning set forth in Section
5.02(c).
"Consolidated Group Tax Liability" shall have the meaning set forth in
Section 5.10(g).
"Continuing Employees" shall have the meaning set forth
in Section 5.05.
"Election Tax Cost" shall have the meaning set forth in
Section 5.10(f).
"Environmental Laws" shall have the meaning set forth
in Section 3.14(a).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means (a) any corporation included with Seller in a
controlled group of corporations within the meaning of Section 414(b) of the
Code; (b) any trade or business (whether or not incorporated) which is under
common control with Seller within the meaning of Section 414(c) of the Code; (c)
any member of an affiliated service group of which Seller is a member within the
meaning of Section 414(m) of the Code; or (d) any other person or entity treated
as an affiliate of Seller under Section 414(o) of the Code.
"Excluded Covenants" shall have the meaning set forth in Section 9.02.
"Excluded Liabilities" shall have the meaning set forth
in Section 2.03.
"Governmental Authority" means any government or
political subdivision, whether federal,
state, local or foreign, or any agency or instrumentality of any such government
or political subdivision, or any federal, state, local or foreign court or
arbitrator.
"Hazardous Substances" shall have the meaning specified
in Section 3.14(a).
"Hourly Employees Plan" shall have the meaning
specified in Section 5.06(e).
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended and the rules and regulations promulgated
thereunder.
"Intellectual Property" shall have the meaning
specified in Section 3.06.
"Knowledge" means the actual knowledge of
Xxxx Xxxxxxxx, President of Xxxxx Division and Xxxxx Xxxxxx,
Chief Financial Officer, Xxxxx Division.
"Laws" means any law, statute, code, ordinance,
regulation or other legally enforceable requirement of any Governmental
Authority.
"Liabilities" means the Liabilities to be assumed by
Buyer as described in Section 2.02 and does not include the Excluded
Liabilities set forth in Section 2.03.
"Liens" means any mortgage, lien, option, encumbrance,
restriction, pledge, adverse claim, interest, charge or other similar
encumbrance.
"Losses" shall have the meaning set forth in Section
9.02.
"Material Equipment" shall have the meaning set forth
in Section 3.07(d).
"Names" shall have the meaning set forth in Section
5.13.
"Net Worth" shall have the meaning set forth in Section
2.05(b)(ii).
"PCBs" shall have the meaning set forth in Section
3.14(a).
"Permits" means any license, permit, authorization,
grant, approval, franchise, waiver,
consent, qualification or similar document or authority issued or granted by
any Governmental Authority.
"Person" means any individual, sole proprietorship,
partnership, corporation, limited
liability company, joint venture, unincorporated society or association, trust
or other entity or Governmental Authority.
"Preliminary Allocation" shall have the meaning
specified in Section 5.04.
"Purchase Price" shall have the meaning specified in
Section 2.04.
"Real Property" means all of the Sellers' and
Subsidiaries' real property and interests
in real property, leaseholds and subleaseholds, purchase options, easements,
licenses, rights to access, rights of way, all buildings and other improvements
thereon, and other real property interests exclusively used in the business or
operations of the Xxxxx Division as of the date of this Agreement, together with
any additions thereto between the date of this Agreement and the Closing Date.
"Savings Plan" shall have the meaning set forth in
Section 5.06(d).
"Section 338(h)(10) Election" shall have the meaning
set forth in Section 5.10(f).
"Seller Welfare Plans" shall have the meaning set forth
in Section 5.06(c).
"Seller's Benefit Arrangements" shall have the meaning
set forth in Section 3.10(a).
"Seller's Contracts" shall have the meaning set forth
in Section 3.11.
"Seller's ERISA Plans" shall have the meaning set forth
in Section 3.10(a).
"Shared Environmental Costs" shall have the meaning set
forth in Section 9.05(a).
"Shares" means all of the securities owned, by Seller
whether or not certificated, and
all other rights and interest of Sellers, direct or indirect, in the
Subsidiaries set forth on Schedule 1 and all of the securities owned by Seller,
directly or indirectly, by Seller whether or not certificated, and all other
rights and interest of Seller, direct or indirect, in the Affiliates set forth
on Schedule 2, all of which are to be transferred pursuant to this Agreement.
"Sierra" shall have the meaning set forth in Section
3.14(c).
"Straddle Period" shall have the meaning set forth in
Section 5.10(b).
"Subsidiaries" means those wholly owned subsidiaries of
the Seller listed on Schedule 1.
"Tax or Taxes" means any domestic or foreign federal,
state or local income, franchise,
business, occupation, sales/use, manufacturer's excise, payroll, withholding,
Federal Insurance Contributions Act and employment and unemployment taxes, value
added taxes, personal and real property taxes and all other taxes or charges
(including all interest and penalties) measured, assessed, levied, imposed or
collected by any Governmental Authority.
"Tax Returns" means all tax returns (including
information returns) and reports that are
or were required to be filed by, or with respect to, the Xxxxx Division or its
income, properties or operations.
"Taxing Authority" shall mean the United States or
any state, county, local or foreign
government or subdivision or agency thereof.
"Transition Agreement" shall have the meaning set forth
on Schedule 5.06(a).
All references to Sections, Appendices and Schedules are to Sections of
and Appendices and Schedules to this Agreement.
LIST OF SCHEDULES
Schedule 1 Imo Industries Inc. Subsidiaries Included In Xxxxx
Controls Division
Schedule 2 Imo Industries Inc. Affiliates Included In Xxxxx
Controls Division
Schedule 2.03(b) Capital Lease to be Assumed
Schedule 2.05(b) Pro Forma Balance Sheet dated September 30, 2000
Schedule 3.02 Authorization
Schedule 3.03 Litigation; Compliance with Law
Schedule 3.04 Shares Subject to Right of First Refusal
Schedule 3.05 Financial Statements and Condition
Schedule 3.06 Intellectual Property; Licenses
Schedule 3.07(a) Assets
Schedule 3.07(b) Real Property
Schedule 3.07(c) Leases
Schedule 3.07(d) Material Equipment
Schedule 3.08 Conflicts
Schedule 3.09 Taxes
Schedule 3.10 Seller's ERISA Plans and Seller's Benefit Arrangements
Schedule 3.11 Seller and Subsidiary Contracts
Schedule 3.12 Material Changes
Schedule 3.14(a) Permits
Schedule 3.14(c) Environmental Matters
Schedule 3.15 Xxxxx Division Employees
Schedule 3.16 Bank Accounts
Schedule 5.01 Interim Operations of the Xxxxx Division
Schedule 5.06(a) Seller's Obligations Under Transition Agreements
Schedule 5.06(g) 2000 Bonus Plan
Schedule 5.13 Xxxxx Division Business Names
Schedule 1
IMO INDUSTRIES INC. SUBSIDIARIES
INCLUDED IN XXXXX CONTROLS DIVISION
Date: 12/31/99
State or Country of
Incorporation/
Name Organization
IMO INDUSTRIES (UK) LIMITED ENGLAND
XXXXX CONTROLS LIMITED ENGLAND
XXXXX CONTROLS AB SWEDEN
RMH CONTROLS LIMITED ENGLAND
XXXXX CONTROLS PTY. LTD. NEW SOUTH WALES
XXXXX CONTROLS (NZ) LIMITED NEW ZEALAND
TELEFLEX-XXXXX (N.Z.) LTD. NEW ZEALAND
IMO INDUSTRIES PENSION TRUSTEE LIMITED ENGLAND
TELEFLEX LIMITED ENGLAND
TELEFLEX XXXXX LTD. ENGLAND
IMO INDUSTRIES LIMITED ENGLAND
IMO INDUSTRIES GmbH GERMANY
XXXXX CONTROLS SARL FRANCE
XXXXX CONTROLS S.L. SPAIN
IMO INDUSTRIES PTE LTD SINGAPORE
SIERRA INTERNATIONAL INC. ILLINOIS
Schedule 2
IMO INDUSTRIES INC. AFFILIATES
INCLUDED IN XXXXX CONTROLS DIVISION
State or Country of
Incorporation/
Organization
Name
SHANGHAI DONG XXXX XXXXX CONTROL CABLE CO., LTD. CHINA (1)
NHK XXXXX CO., LTD. JAPAN (1)
NHK JABSCO CO., LTD. JAPAN (2)
-------------------------------
(1) 50% owned by Imo Industries Inc.
(2) 50% owned by NHK Xxxxx Co., Ltd.
