Exhibit 10.1
ASSET PURCHASE AND SALE AGREEMENT
Dated as of April 2, 2001
By and Between
Xxxxxxx Fleet (Chambly) Inc.
as purchaser
and
LYDALL FILTRATION/SEPARATION, INC.
as seller
ASSET PURCHASE AND SALE AGREEMENT
This ASSET PURCHASE AND SALE AGREEMENT ("Agreement") dated April 2, 2001 is by
and between XXXXXXX FLEET (Chambly), INC., a corporation organized under the
laws of Canada ("Xxxxxxx Fleet"), and LYDALL FILTRATION/SEPARATION, INC. a
corporation organized under the laws of the State of Connecticut ("Lydall").
WITNESSETH:
WHEREAS, Lydall, through its Composite Materials Division is engaged in
the business of producing and selling specialized products at a facility located
in Covington, Tennessee; and
WHEREAS, Lydall desires to sell to Xxxxxxx Fleet, and Xxxxxxx Fleet
desires to purchase from Lydall, certain assets relating to its Xxxxxxxxx
facility, subject to certain liabilities, all upon the terms and subject to the
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants set forth below, the parties agree as follows:
ARTICLE I
THE TRANSACTION
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1.1 Purchase and Sale of Assets. Subject to the terms and
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conditions of this Agreement, Xxxxxxx Fleet agrees to purchase from Lydall, and
Lydall agrees to sell, convey, transfer, assign and deliver to Xxxxxxx Fleet (or
its designee), on the Closing Date, against the receipt by Lydall of the
consideration specified in Section 2.1, the Assets, free and clear of any
encumbrances of any kind whatsoever except Permitted Encumbrances (as defined in
Section 3.5). The term "Assets" shall mean all of the right, title and interests
of Lydall in and to the following particular assets:
(a) those items of machinery and equipment, owned by Lydall
and used or held for use at the Xxxxxxxxx facility, specifically listed on
Schedule 1.1(a), all of which fixed assets will be purchased on an "as is, where
is" basis, without warranty by Lydall;
(b) all inventories, (excluding bulk stored raw materials,
paperstock, and pencil slat work in process) wherever located, including non-
bulk stored raw materials, work in process and finished goods and products,
owned by Lydall and used or held for use by the Xxxxxxxxx facility (the
"Inventory"), which are set forth on Schedule 1.1(b) attached;
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(c) the specific contracts, commitments, leases, purchase
orders, contracts to purchase raw materials, contracts for services and
supplies, contracts to sell products and all the other agreements (whether
written or oral) solely relating to the Xxxxxxxxx facility and set forth in
Schedule 1.1(c) attached (collectively, the "Assigned Contracts");
(d) all of the intellectual property used exclusively at the
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Xxxxxxxxx facility, which is set forth on Schedule 1.1 (d), and includes patents
and trademarks used exclusively by the Xxxxxxxxx facility ("Intellectual
Property");
(e) any rights of Lydall pertaining to any counterclaims,
set-offs or defenses it may have with respect to any Assumed Obligations set
forth in Section 1.3;
(f) all lists of customers of the Xxxxxxxxx facility, which
is set forth in Schedule 1.1 (f) and includes all customers of the Xxxxxxxxx
facility; and
(g) the goodwill of the business of Lydall conducted at the
Xxxxxxxxx facility specifically related to the Assets described above.
1.2 Excluded Assets. Notwithstanding anything stated in this
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Agreement to the contrary, the Assets shall not include, and Xxxxxxx Fleet shall
not purchase, any assets not specifically described in paragraph 1.1(a) through
1.1 (f) above, or on the Schedules listed in those sections. All assets of
Lydall of any nature that are not specifically described in paragraphs 1.1(a)
through 1.1(f) or in the referenced Schedules shall not be sold hereunder, shall
be retained by Lydall and shall sometimes be referred to (the "Excluded
Assets").
1.3 Assumption of Obligations. Upon the sale of the Assets by
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Lydall, Xxxxxxx Fleet shall assume and agree to pay, perform and discharge, in a
timely manner and in accordance with the terms of this Agreement, the following
liabilities and obligations of Lydall relating to the Xxxxxxxxx facility (the
"Assumed Obligations"):
(a) all liabilities and obligations of Lydall which arise on
or after the Closing Date under any of the Assigned Contracts;
(b) all liabilities and obligations resulting from product
liability claims for damage or injury to persons or property arising from
ownership, possession or use of any product manufactured by Xxxxxxx Fleet after
the Closing Date; and
(c) all liabilities and obligations resulting from product
warranty claims with respect to any product sold by Xxxxxxx Fleet after the
Closing Date.
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1.4 Excluded Obligations and Liabilities. Notwithstanding anything
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stated in this Agreement to the contrary, Xxxxxxx Fleet does not and shall not
assume, pay, perform or discharge any liabilities and obligations not described
in Section 1.3 above (the "Excluded Liabilities").
1.5 Nonassignable Contracts and Leases. In the case of any Assigned
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Contracts which are not by their terms assignable, Lydall agrees to use its
reasonable efforts to obtain, or cause to be obtained, prior to the Closing
Date, any written consents necessary to convey to Xxxxxxx Fleet the benefit of
those Contracts. Xxxxxxx Fleet shall cooperate with Lydall in such manner as may
be reasonably requested. Nothing in this Agreement shall be construed as an
attempt or an agreement to assign or cause the assignment of any Assigned
Contract included in the Assets (i) which is by law nonassignable without the
consent of the other party or parties, unless such consent shall have been
given, or (ii) as to which all the remedies for the enforcement of the Contract
enjoyed by Lydall would not, as a matter of law, pass to Xxxxxxx Fleet as an
incident of the assignments provided by this Agreement; provided, however, that
in such case Lydall shall use its reasonable efforts to make the use and benefit
of such Asset or a comparable asset available to Xxxxxxx Fleet to the same
extent, as nearly as may be possible, as if such impediment to assignment did
not exist. On and after the Closing Date, Xxxxxxx Fleet shall, at the request of
the Lydall, use its reasonable efforts to enter into agreements to remove Lydall
from all obligations and liabilities (whether primary or secondary) under all
Assigned Contracts, it being understood that such reasonable efforts shall not
include any requirement to offer or grant financial accommodations, including
without limitation, any given by any affiliate of Xxxxxxx Fleet.
1.6 Instruments of Transfer, Conveyance and Assumption. The sale,
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conveyance, transfer, assignment and delivery of the Assets shall be effected by
delivery on the Closing Date by Lydall to Xxxxxxx Fleet (or its designees) of
such transfers in registrable form, bills of sale in registrable form,
endorsements, conveyances, assignments, or other instruments of transfer and
conveyance, duly executed by Lydall, as Xxxxxxx Fleet shall reasonably deem
necessary to vest in Xxxxxxx Fleet good and marketable title to such Assets free
and clear of all Encumbrances except Permitted Encumbrances, and such other
documents as Xxxxxxx Fleet may reasonably request to demonstrate satisfaction of
the conditions of and compliance with this Agreement by Lydall, including,
without limitation, (i) Xxxx of Sale in substantially the form of Exhibit A
attached (the "Xxxx of Sale") and (ii) patent and trademark assignments in
substantially the form of Exhibits B-1 and B-2 attached (the "Patent
Assignment"). Xxxxxxx Fleet shall evidence its assumption of the Assumed
Liabilities and its commitment to pay the Assumed Liabilities when due in
accordance with their respective terms by the execution and delivery on the
Closing Date to Lydall of an Assumption Agreement in substantially the form of
Exhibit C attached (the "Assumption Agreement"), and such other documents as
Lydall may reasonably request in order for Xxxxxxx Fleet to assume and become
fully liable for the Assumed
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Liabilities.
1.7 Closing. The closing of the transactions contemplated by this
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Agreement (the "Closing") shall take place via facsimile at the offices of
Lydall, Inc., One Colonial Road, Manchester, Connecticut at 10:00 a.m., on March
31, 2001 or at such other location or time as agreed upon by the parties. Such
time and date of delivery are referred to as the "Closing Date".
ARTICLE II
PAYMENT OF PURCHASE PRICE
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2.1 Amount. The aggregate consideration to be paid by Xxxxxxx Fleet
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to Lydall for the Assets shall be: a) one million five hundred thousand United
States dollars ($1,500,000), b) up to three hundred thousand dollars ($300,000)
for the Inventory the final amount of which will be determined as set forth
below, and c) the assumption of the Assumed Liabilities (the "Purchase Price").
The Purchase Price shall be paid by Xxxxxxx Fleet to Lydall at the Closing as
follows:
(a) Xxxxxxx Fleet shall pay to Lydall on the Closing Date,
the equivalent in Canadian Dollars of Five Hundred Thousand United States
Dollars (US$500,000) (which is agreed to be Canadian Dollars 788,500), by wire
transfer to the account or accounts designated in writing by Lydall;
(b) Xxxxxxx Fleet shall deliver to Lydall on the Closing
Date, a Promissory Note, in the form of Exhibit D-1 attached to this Agreement,
in the amount of One Million United States Dollars (US$1,000,000) to be paid in
four equal installments of US$250,000 annually and a Guaranty of its obligations
under the Promissory Note executed by all Xxxxxxx Fleet corporate affiliates in
the form of Exhibit D-2 attached to this Agreement, with both the Promissory
Note and Guaranty having the other terms and conditions set forth in Exhibit D-1
and D-2 respectively;
(c) Xxxxxxx Fleet shall pay to Lydall not later than thirty
(30) days after the Closing Date, by wire transfer to the account or accounts
designated in writing by Lydall, the amount which is the cost of the Inventory
(such cost determined in accordance with US GAAP consistently applied, on a
first-in, first-out basis) following a physical inventory on or immediately
before the Closing Date up to a maximum of $300,000. The cost of the inventory
will be tested by the Hartford, CT office of PricewaterhouseCoopers, LLP in
accordance with the procedures set forth in Exhibit E attached to this
Agreement. Any inventory as of the Closing Date which exceeds a value of
$300,000 shall be an Excluded Asset and shall not transfer to Xxxxxxx Fleet.
Xxxxxxx Fleet expressly acknowledges Lydall's right to dispose of such inventory
in
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excess of the $300,000. Such disposition by Lydall will not be a violation of
the Non-Competition and Non-Solicitation Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF LYDALL
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Representations and Warranties of Lydall. Lydall represents, warrants
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and agrees as follows, to the best of its knowledge:
3.1 Existence and Good Standing. Lydall is a corporation duly
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organized, validly existing and in good standing under the laws of the state of
Connecticut and has all necessary power and authority to own, lease and operate
its property, to carry on its business as now being conducted and to own or
lease the Assets.
3.2 Authorization and Validity of Agreement. Lydall has full power
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and authority to execute and deliver, to perform its obligations under, and to
consummate the transactions contemplated by this Agreement and the other
documents required to be executed and delivered by Lydall under this Agreement
(the "Lydall Ancillary Agreements"). The execution, delivery and performance of
this Agreement and the Lydall Ancillary Agreements by Lydall, and the
consummation by it of the transactions contemplated by this Agreement and the
Lydall Ancillary Agreements, have been duly and validly authorized and approved
by all necessary corporate action of Lydall. Each of this Agreement and the
Lydall Ancillary Agreements has been duly and validly executed and delivered by
Lydall and is a valid and binding obligation of Lydall enforceable against
Lydall in accordance with its terms, except to the extent that its
enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors rights generally and to general equitable principles.
3.3 Consents and Approvals; No Violations. Except as set forth in
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Schedule 3.3 attached, the execution, delivery and performance of this Agreement
and the Lydall Ancillary Agreements by Lydall and the consummation by Lydall of
the transactions contemplated will not, with or without the giving of notice or
the lapse of time or both: (a) violate, conflict with, or result in a breach or
default under any provision of the organizational documents of Lydall; (b)
violate any statute, ordinance, rule, regulation, order, judgment or decree of
any court or of any governmental or regulatory body, agency or authority
applicable to Lydall or by which its properties or assets or the Assets or the
Xxxxxxxxx facility may be bound; (c) require any filing by Lydall with, or
require Lydall to obtain any permit, consent or approval of, or require Lydall
to give any notice to, any governmental or regulatory body, agency or authority
or any other person; or (d) result in a violation or breach by Lydall of,
conflict with, constitute (with or without due notice or lapse of time or both)
a default by Lydall (or give rise to any right
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of termination, cancellation, payment or acceleration) under, or result in the
creation of any encumbrance, other than Permitted Encumbrances, upon any of the
properties or assets of Lydall or the Assets under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, license, franchise,
permit, agreement, lease, franchise agreement or other instrument or obligation
to which Lydall is a party, or by which it or any of the Assets may be bound.
3.4 Warranties; Warranty Claims.
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(a) Except as set forth in Schedule 3.4(a) attached and
except for warranties implied by law, in the operation of the Xxxxxxxxx facility
Lydall does not make and has not made any representation or warranty to its
customers with respect to products sold or services delivered by it.
(b) Except as set forth in Schedule 3.4(b) attached, there
are no warranty claims, relating to products sold by Lydall, pending or to
Lydall's knowledge threatened, which assert liability in excess of $5,000
individually or $15,000 in the aggregate.
3.5 Title to Assets; Encumbrances; Condition. Except as set forth
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in Schedule 3.5 (a) attached Lydall has good, valid and marketable title to each
of the Assets free and clear of all encumbrances of any kind except for (i)
encumbrances consisting of easements, permits and other restrictions or
limitations on the use of real property or other irregularities in title which
do not materially detract from the value of, or impair the use of, such property
by Lydall in the operation of the Xxxxxxxxx facility and (ii) encumbrances for
current Taxes, and other assessments or governmental charges or levies on
property not yet due and delinquent (encumbrances of the type described in
clauses (i) and (ii) above are sometimes referred to as "Permitted Encumbrances.
All of the Assets are located at Lydall's place of business in Covington,
Tennessee. XXXXXXX FLEET ACKNOLEDGES THAT THE ASSETS ARE BEING SOLD ON AN "AS
IS, WHERE IS" BASIS. OTHER THAN THE WARRANTY OF TITLE, ALL OTHER WARRANTIES OF
ANY NATURE, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY DISCLAIMED AND
EXCLUDED
3.6 Assigned Contracts. Each of the Assigned Contracts is in full
force and effect and there exists no default or event of default or event,
occurrence, condition or act (including this sale of the Assets) which, with the
giving of notice, the lapse of time or the happening of any other event or
condition, would become a default or event of default on the part of Lydall
under any of the Assigned Contracts. Lydall has not violated any of the terms or
conditions of the Assigned Contracts and, to the best knowledge of Lydall, all
of the covenants to be performed by any other party to each of the Assigned
Contracts have been fully performed. Except as set forth in Schedule 3.3
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attached, each of the Assigned Contracts is assignable by Lydall to Xxxxxxx
Fleet without the consent of any other Person.
3.7 Litigation. There is no action, suit, proceeding at law or in
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equity, arbitration or administrative or other proceeding by or before (or to
the best knowledge of Lydall, any investigation by) any governmental or other
instrumentality or agency, pending, or, to the best knowledge of Lydall,
threatened, against or affecting the Assets, Assumed Obligations or the
Xxxxxxxxx facility; and Lydall does not know of any valid basis for any such
action, proceeding or investigation. There are no such suits, actions, claims,
proceedings or investigations pending or, to the best knowledge of Lydall,
threatened, seeking to prevent or challenging the transactions contemplated by
this Agreement. Lydall is not subject to any judgment, order or decree entered
in any lawsuit or proceeding which may have a material adverse effect on the
business conducted at the Xxxxxxxxx facility.
3.8 Taxes.
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(a) All tax returns required to be filed on or prior to the
Closing Date have been properly completed and filed on a timely basis. As of the
time of filing, the foregoing tax returns correctly reflected in all material
respects the facts regarding the income, business, assets, operations,
activities, status or other matters of Lydall or any other information required
to be shown thereon.
(b) With regard to all amounts in respect of taxes imposed upon
Lydall or for which Lydall is or could be liable, whether to taxing authorities
(as, for example, under law) or to other persons or entities (as, for example,
under tax allocation agreements), with respect to all taxable periods or portion
of periods ending on or before the Closing Date, all applicable tax laws and
agreements have been fully complied with, and all such amounts required to be
paid by Lydall to taxing authorities or others on or before the date of this
Agreement have been paid in full or adequately disclosed and fully provided for
in the books and financial statements of Lydall.
(c) The representations and warranties set forth in subsections
(a) and (b) of this Section 3.8 are not applicable to the extent neither the
Assets nor the Xxxxxxxxx facility can be made subject to tax liens and the Buyer
cannot be made liable for taxes relating to the matters constituting breaches of
such representations and warranties.
(d) Except as set forth in Schedule 3.8 attached, no examination
of any tax return is currently in progress. There are no liens for Taxes on the
Assets and no tax authority or other governmental body or agency has or will
have the right to proceed against, attach or in any other manner encumber or
diminish Xxxxxxx Fleet's use of the Assets for taxes.
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3.9 Intellectual Properties. To the best of Lydall's knowledge,
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Schedule 1.1(d) attached sets forth all Intellectual Property being used
exclusively by the Xxxxxxxxx facility. Except as otherwise set forth in Schedule
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1.1(d), Lydall owns all right, title and interest in and to the Intellectual
Property. Schedule 1.1(d) also sets forth all licenses, agreements and other
rights granted by Lydall to any third party with respect to Intellectual
Property and all licenses, agreements and other rights with respect to
Intellectual Property granted by any third party to Lydall, in each case
together with a description of the subject matter licensed. Except as set forth
in Schedule 1.1(d), (a) Lydall owns and possesses all right, title and interest
in and to, or has a written, enforceable license to use, all of the Intellectual
Property free and clear of all encumbrances except Permitted Encumbrances; (b)
no claim by any third party contesting the validity, enforceability, use or
ownership of any Intellectual Property has been made or to Lydall's knowledge is
threatened; and (c) Lydall has not received any notice of any infringement or
misappropriation of, or other conflict with any third party with respect to, any
Intellectual Property, nor has Lydall received any claims of infringement or
misappropriation of, or conflict with, any intellectual property of any third
party in connection with the Xxxxxxxxx facility, nor is Lydall aware of any such
infringement, misappropriation or conflict.
3.10 Inventories. Set forth in Schedule 1.1(b) attached is a complete
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list and description (including book value, determined in accordance with GAAP
on a first in first out basis) of all Inventory, including, without limitation,
raw materials (excluding bulk stored raw materials and paperstock), work in
process (excluding pencil slat work in process) and finished goods and products,
as of the date of this Agreement. Except for items which are in the possession
or control of suppliers, the Inventory is in the physical possession of Lydall
at its facility in Covington, Tennessee, or are in transit from suppliers of
Lydall. Except as set forth in Schedule 1.1(b) attached, the inventories of the
Xxxxxxxxx facility were purchased in the ordinary course of business.
3.11. Brokers. Except for Xxxxxxx Associates, Inc., there has been no
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broker or finder involved in any manner in the negotiations leading up to the
execution of this Agreement, or the consummation of any transaction contemplated
hereby. Lydall will be solely responsible for payment of any fees to Xxxxxxx
Associates, Inc.
ARTICLE lV
REPRESENTATIONS AND WARRANTIES OF XXXXXXX FLEET
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Representations and Warranties of Xxxxxxx Fleet. Xxxxxxx Fleet
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represents, warrants and agrees as follows:
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4.1 Existence and Good Standing. Xxxxxxx Fleet is a corporation duly
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organized, validly existing and in good standing under the laws of the province
of Quebec, Canada and has all necessary power and authority to own, lease and
operate its property, to carry on its business as now being conducted and to own
or lease the Assets.
4.2 Authorization and Validity of the Agreement. Xxxxxxx fleet has full
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power and authority to execute and deliver, to perform its obligations under,
and to consummate the transactions contemplated by the Agreement and the other
documents required to be executed and delivered by Xxxxxxx Fleet under this
Agreement (the " Xxxxxxx Fleet Ancillary Agreements"). The execution, delivery
and performance of this Agreement and the Xxxxxxx Fleet Ancillary Agreements by
Xxxxxxx Fleet, and the consummation by it of the transactions contemplated, have
been duly and validly authorized and approved by all necessary corporate action
of Xxxxxxx Fleet. Each of this Agreement and the Xxxxxxx Fleet Ancillary
Agreements has been duly and validly executed and delivered by Xxxxxxx Fleet and
is a valid and binding obligation of Xxxxxxx Fleet enforceable against Xxxxxxx
Fleet in accordance with its terms, except to the extent that its enforceability
may be subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting the enforcement of creditors' rights generally and to
general equitable principles.
4.3 Consents and Approvals; No Violations. Except as set forth in
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Schedule 4.3 attached, the execution, delivery and performance of this Agreement
and the Xxxxxxx Fleet Ancillary Agreements by Xxxxxxx Fleet and the consummation
by Xxxxxxx Fleet of the transactions contemplated will not, with or without the
giving of notice or the lapse of time or both: (a) violate, conflict with, or
result in a breach of default under any provision of the certificate of
incorporation or by-laws of Xxxxxxx Fleet; (b) violate any statute, ordinance,
rule, regulation, order, judgment or decree of any court or of any governmental
or regulatory body, agency or authority applicable to Xxxxxxx Fleet or by which
any of its properties or assets may be bound; (c) require any filing by Xxxxxxx
Fleet with, or require Xxxxxxx Fleet to obtain any permit, consent or approval
of, or require Xxxxxxx Fleet to give any notice to, any governmental or
regulatory body, agency or authority or any other person; or (d) result in a
violation or breach by Xxxxxxx Fleet of, conflict with, constitute (with or
without due notice or lapse of time or both) a default by Xxxxxxx Fleet (or give
rise to any right of termination, cancellation, payment or acceleration)under,
or result in the creation of any Encumbrance upon any of the properties or
assets of Xxxxxxx Fleet under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, license, franchise, permit, agreement, lease,
franchise agreement or other instrument or obligation to which Xxxxxxx Fleet is
a party, or by which it or any of its properties or assets may be bound; except,
in the case of clauses (b) and (d), for such violations, breaches, conflicts,
defaults or Encumbrances which would not have a material adverse effect on
Xxxxxxx Fleet or on its ability to consummate the transactions contemplated.
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4.4 Financial Statements. Attached as Schedule 4.4 are the audited
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financial statements of Xxxxxxx Fleet for the fiscal years ended October 1, 1999
and September 30, 2000, which have been prepared in accordance with U.S.
generally accepted accounting principles ("GAAP") consistently applied
throughout the period indicated and fairly present in all respects the financial
position of Xxxxxxx Fleet at and as of October 1, 1999 and September 30, 2000
respectively, and the results of operations for the fiscal years then ended. The
net equity of Xxxxxxx Fleet is at least equal to the net equity as of September
30, 2000 and there have been no material changes in the financial condition of
Xxxxxxx Fleet since that date.
4.5 No Litigation Threatened. No action or proceedings have been
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instituted before a court or other governmental body or by any public authority
to restrain or prohibit any of the transactions contemplated by this Agreement.
Xxxxxxx Fleet shall have delivered to Lydall an officer's certificate, dated the
Closing Date, to the effect that no such action or proceeding has been
instituted against Xxxxxxx Fleet.
ARTICLE V
COVENANTS OF LYDALL
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Lydall covenants and agrees with Xxxxxxx Fleet as follows:
5.1 Cooperation by Lydall. Lydall shall use its best efforts, and shall
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cooperate with Xxxxxxx Fleet, to secure all necessary consents, approvals,
authorizations, exemptions and waivers from third parties as shall be required
in order to enable Lydall to effect the transactions contemplated on its part,
and Lydall shall otherwise use its best efforts to cause the consummation of
such transactions in accordance with the terms and conditions and to cause all
conditions contained in this Agreement over which it has control to be
satisfied. Lydall further agrees to deliver to Xxxxxxx Fleet prompt written
notice of any event or condition known to Lydall, which if it existed on the
date of this Agreement, would result in any of the representations and
warranties of Lydall contained in this Agreement being untrue in any material
respect.
ARTICLE VI
COVENANTS OF XXXXXXX FLEET
--------------------------
Xxxxxxx Fleet covenants and agrees with Lydall as follows:
6.1 Cooperation by Xxxxxxx Fleet. Xxxxxxx Fleet shall use its best
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efforts,
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and shall cooperate with Lydall, to secure all necessary consents, approvals,
authorizations, exemptions and waivers from third parties as shall be required
in order to enable Xxxxxxx Fleet to effect the transactions contemplated on its
part, and Xxxxxxx Fleet shall otherwise use its best efforts to cause the
consummation of such transactions in accordance with the terms and conditions
and to cause all conditions contained in this Agreement over which it has
control to be satisfied. Xxxxxxx Fleet further agrees to deliver to Lydall
prompt written notice of any event or condition known to Xxxxxxx Fleet, which if
it existed on the date of this Agreement, would result in any of the
representations and warranties of Xxxxxxx Fleet contained in this Agreement
being untrue in any material respect.
ARTICLE VII
OTHER AGREEMENTS
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7.1 Further Assurances.
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(a) Each party shall, at the request of the other, at any time and
from time to time following the Closing Date, execute and deliver to the
requesting party all such further instruments as may be reasonably necessary or
appropriate in order more effectively (a) to assign, transfer and convey to
Xxxxxxx Fleet, or to perfect or record Xxxxxxx Fleet's title to or interest in
the Assets, (b) to evidence and confirm the assumption by Xxxxxxx Fleet of the
liabilities of Lydall to be assumed by Xxxxxxx Fleet pursuant to this Agreement,
or (c) otherwise to confirm or carry out the provisions of this Agreement.
(b) Lydall and Xxxxxxx Fleet shall (i) each provide the other with
such assistance as may reasonably be requested by any of them in connection with
the preparation of any Return, audit or other examination by a taxing authority
or judicial or administrative proceedings relating to liability for taxes, (ii)
each retain and provide the other with any records or other information which
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, Xxxxxxx Fleet shall retain and
Lydall shall retain, until the applicable statutes of limitations (including any
extensions) have expired, copies of all Returns, supporting work schedules and
other records or information which are relevant to such returns for all tax
periods or portions of tax periods ending before or including the Closing Date.
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(c) Without limiting the generality of subsection (a) or (b) of
this Section 7.1, for a period of seven (7) years, Xxxxxxx Fleet shall not
destroy or give up possession of any item referred to in subsection (a) or (b)
or any other records relating to the Assets without first offering to Lydall the
opportunity to obtain the same. Lydall shall promptly notify Xxxxxxx Fleet when
it shall have no further need for it to maintain any of the items referred to in
subsection (a), (b) or (c) and thereafter Xxxxxxx Fleet shall be free to dispose
of the same as it deems fit.
(d) Lydall and Xxxxxxx Fleet shall use their best efforts to afford
the other access to (i) in the case of Lydall, employees of Lydall who remain
employees of Lydall following the Closing Date but are familiar with the Assets
or the Xxxxxxxxx facility and (ii) in the case of Xxxxxxx Fleet, employees who
were previously employees of Lydall, in each case as such other shall reasonably
request for its proper corporate purposes, including, without limitation, the
defense of legal proceedings or the preparation and audit of tax returns. Such
access may include interviews or attendance at depositions or legal proceedings;
provided, however, that in any event all out-of-pocket expenses reasonably
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incurred by any party in connection with this Section 7.1(d) shall be paid or
promptly reimbursed by the party requesting such services.
(e) Each of Xxxxxxx Fleet and Lydall shall maintain in confidence
all documents and other information not otherwise public which they may
respectively acquire as a consequence of the exercise of their respective rights
pursuant to this Section 7.1.
(f) Lydall shall prepare all items on Schedule 1.1(a), except the
first item, for shipment. Xxxxxxx Fleet will dismantle and prepare for shipment
the first item on Schedule 1.1(a). Xxxxxxx Fleet will be solely responsible for
all costs of shipping the items on Schedule 1.1(a).
7.2 Use of Name. Xxxxxxx Fleet agrees that it will not use the name
-----------
"Lydall" in any way, including on letterhead, packaging or invoices after the
Closing Date.
7.3 Personnel Available. Lydall shall make its personnel available for
-------------------
a period of three (3) months after the Closing Date, in order to facilitate the
transition contemplated by this Agreement.
7.4 Non-competition and Non-solicitation Agreement. Lydall shall sign
----------------------------------------------
a Non-Competition and Non-solicitation Agreement covering the products produced
by the Xxxxxxxxx facility, in the form attached as Exhibit F.
12
ARTICLE VIII
SURVIVAL AND INDEMNIFICATION
----------------------------
8.1 Survival of Representations, Covenants and Certain
--------------------------------------------------
Indemnifications. The respective representations and warranties of Lydall and
----------------
Xxxxxxx Fleet contained in this Agreement, in any of the Lydall Ancillary
Agreements or the Xxxxxxx Fleet Ancillary Agreements, or in any Exhibit or
Schedule delivered pursuant to any such documents and the respective
indemnification obligations set forth in Sections 8.2 (a)(i) and 8.2(b)(i) shall
survive the Closing Date, but shall expire on the first anniversary of the
Closing Date except with respect to, and to the extent of, any claim of which
written notice specifying, in reasonable detail, the nature and amount of the
claim has been given by one party to the other prior to such expiration. The
respective covenants and agreements of Lydall and Xxxxxxx Fleet as of the
Closing Date contained in this Agreement or in any Exhibit attached shall
survive the consummation of the transactions contemplated by this Agreement
including, without limitation, the respective indemnification obligations of
Lydall and Xxxxxxx Fleet set forth in Sections 8.2(a)(ii) and (b)(ii).
8.2 Indemnification.
---------------
(a) Lydall shall indemnify, defend and hold harmless Xxxxxxx Fleet
and its officers, directors, shareholders, employees and parent company from and
against any and all expenses, costs, losses, damages or liabilities, including
claims by third parties, (and including, without limitation, reasonable
attorneys' fees, interest and any penalties relating there to) (collectively,
"Losses" and individually, a "Loss") incurred or suffered by Xxxxxxx Fleet or
any of its affiliates with respect to or in connection with or arising out of:
(i) the failure of any representation or warranty made by
Lydall in or pursuant to this Agreement, the Lydall Ancillary Agreements or in
the Schedules or Exhibits by Lydall to be true and correct in all respects as of
the date of this Agreement and as of the Closing Date or any breach or
nonfulfillment of any covenant or obligation of Lydall under this Agreement, the
Lydall Ancillary Agreements or in the Schedules or Exhibits attached hereto,
other than any Loss which is asserted as a claim under subparagraph (ii) of this
Section 8.2(a); and
(ii) any claim which is made against Xxxxxxx Fleet or any of
its affiliates with respect to any Excluded Assets or Excluded Liabilities and
any suits, actions, proceedings and assessments against Xxxxxxx Fleet or any of
its Affiliates and costs and expenses incurred by Xxxxxxx Fleet and any of its
Affiliates in the defense,
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including reasonable attorneys' fees, incident to the matters referred to in
this subparagraph (ii); and
(iii) Xxxxxxx Fleet reserves the right to participate in the
defense of any such claims falling within this Section 8.2(a) at Xxxxxxx Fleet's
expense, without relieving Lydall of any of its obligations.
(b) Xxxxxxx Fleet shall indemnify, defend and hold harmless Lydall and
its officers, directors, shareholders, employees and parent company from and
against any and all expenses, costs, losses, damages or liabilities, including
claims by third parties, (and including, without limitation, reasonable
'attorneys' fees, interest and any penalties relating thereto) (collectively,
"Losses" and individually, a "Loss") incurred or suffered by Lydall or any of
its Affiliates with respect to or in connection with or arising out of:
(i) the failure of any representation or warranty made by
Xxxxxxx Fleet in or pursuant to this Agreement, the Xxxxxxx Fleet Ancillary
Agreements or in the Schedules and Exhibits to be true and correct in all
respects as of the date of this Agreement and as of the Closing Date or any
breach of nonfulfillment of any covenant or obligation of Xxxxxxx Fleet under
this Agreement the Xxxxxxx Fleet Ancillary Agreements or in the Schedules or
exhibits attached hereto, other than any Loss which is asserted as a claim under
subparagraph (ii) of this Section 8.2(b);
(ii) any claim which is made against Lydall or any of its
affiliates with respect to the Assumed Obligations and any suits, actions,
proceedings and assessments against Lydall or any of its affiliates and costs
and expenses incurred by Lydall and any of its affiliates in the defense,
including reasonable attorneys' fees, incident to the matters referred to in
this subparagraph (ii); and
(iii) any claim which is made against Lydall or any of its
affiliates with respect to product warranty matters related to products sold by
Xxxxxxx after the Closing Date.
(iv) any claim which is made against Lydall or any of its
affiliates with respect to product liability matters related to products
manufactured by Xxxxxxx with the Assets after the Closing Date.
(v) Lydall reserves the right to participate in the defense
of any such claims falling within this Section 8.2(b) at Lydall's expense,
without relieving Xxxxxxx Fleet of any of its obligations.
14
ARTICLE IX
MISCELLANEOUS
-------------
9.1 Entire Agreement. This Agreement (including the Lydall Ancillary
----------------
Agreements, the Xxxxxxx Fleet Ancillary Agreements, Exhibits and Schedules) set
forth the entire understanding of the parties with respect to the subject matter
of this Agreement. Any previous agreements or understandings between the parties
regarding the subject matter are superseded by this Agreement, the Lydall
Ancillary Agreements, the Xxxxxxx Fleet Ancillary Agreements and the Schedules
and Exhibits hereto and thereto.
9.2 Successors and Assigns. The terms and conditions of this Agreement
----------------------
shall inure to the benefit of and be binding upon the respective successors of
the parties; provided however, that this Agreement, including the
-------- -------
representations and warranties, may not be assigned by either of the parties
except that Lydall may assign this Agreement to its affiliates.
9.3 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument.
9.4 Headings. The headings of the Articles, Sections and paragraphs of
--------
this Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction.
9.5 Modification and Waiver. No amendment, modification or alteration
-----------------------
of the terms of provisions of this Agreement shall be binding unless the same
shall be in writing and duly executed by the parties, except that any of the
terms or provisions of this Agreement may be waived in writing at any time by
the party which is entitled to the benefits of such waived terms or provisions.
No waiver of any of the provisions of this Agreement shall be deemed to or shall
constitute a waiver of any other provision (whether or not similar). No delay on
the part of either party in exercising any right, power or privilege shall
operate as a waiver.
9.6 No Third Party Beneficiary Rights. This Agreement is not intended
---------------------------------
to and shall not be construed to give any person other than the parties
signatory any interest or rights (including, without limitation, any third party
beneficiary rights) with respect to or in connection with any agreement or
provision contained or contemplated.
15
9.7 Expenses. Except as otherwise provided in this Agreement, Lydall
--------
and Xxxxxxx Fleet shall each pay all costs and expenses incurred by it or on its
behalf in connection with this Agreement and the transactions contemplated,
including, without limiting the generality of the foregoing, fees and expenses
of its own financial consultants, accountants and legal counsel.
9.8 Notices. Any notice, request, instruction or other document to be
-------
given by any party to any other party shall be in writing and delivered in
person, sent by facsimile, or sent by registered or certified mail, postage
prepaid, as follows:
if to Xxxxxxx Fleet: Xxxxxxx Fleet (Chambly) Inc.
0000 xxx Xxxxxxxxx Xxxxxxx
Xxxxxx, Xxxxxx X0X 0X0
if to Lydall: Lydall Filtration/Separation, Inc.
Xxx Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx
or at such other address for a party as shall be specified by like notice. Any
notice which is delivered personally in the manner provided shall be deemed to
have been duly given to the party to whom it is directed upon actual receipt by
such party. Any notice which is faxed in the manner provided shall be
conclusively presumed to have been given to the party to whom it is given upon
confirmation of such facsimile.
9.9 Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Connecticut.
9.10 Publicity. Except as otherwise required by applicable laws
---------
or regulations, Xxxxxxx Fleet shall not issue any press release or make any
other public statement, in each case relating to or connected with or arising
out of this Agreement or the matters contained, without obtaining the prior
approval of Lydall of the contents and the manner of presentation and
publication.
9.11 Consent to Jurisdiction. Any judicial proceeding brought
-----------------------
against any of the parties to this Agreement on any dispute arising out of this
Agreement or any matter related may be brought in any federal or state court
located in the State of Connecticut and, by execution and delivery of this
Agreement, each of the parties to this Agreement accepts for itself the
exclusive jurisdiction of the aforesaid courts, and irrevocably agrees to be
bound by any final judgment rendered in connection with this Agreement.
16
9.12 Severability. If any provision of this Agreement is invalid,
------------
illegal or incapable of being enforced by any rule of law or public policy, all
other provisions of this Agreement shall nevertheless remain in full force and
effect so long as the economic or legal substance of the transaction
contemplated is not affected in any manner adverse to any party. Upon such
determination that any provision is invalid, illegal or incapable of being
enforced, the parties shall negotiate in good faith to modify this Agreement so
as to effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated are fulfilled.
9.13 Enforcement. The parties agree that the remedy at law for
-----------
any breach of this Agreement is inadequate and that should any dispute arise
concerning the sale of the Assets, the Xxxxxxxxx facility or any other matter,
this Agreement shall be enforceable in a court of equity by an injunction or a
decree of specific performance. Such remedies shall, however, be cumulative and
nonexclusive, and shall be in addition to any other remedies which the parties
may have.
9.14 Confidentiality. Except as otherwise required by applicable
---------------
laws or regulations or otherwise provided by the terms of this Agreement, each
of Xxxxxxx Fleet and Lydall agrees to keep confidential all non-public
information relating to the other and the Assets and the Xxxxxxxxx facility
except information which (a) becomes known to the other from a source which is
not obligated to keep such information confidential or (b) becomes generally
available to the public. Xxxxxxx Fleet agrees not to make any public release of
the sale without Lydall's prior, written consent.
17
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed on its behalf as a sealed instrument as of the date first written
above.
LYDALL FILTRATION/
SEPARATION, INC. XXXXXXX FLEET (CHAMBLY) INC.
By: By:
------------------------ -----------------------
Xxxxxx X. Xxxxxxxxxx Xxxxxx Xxxxxxx
Executive Vice President - Vice President and Chief Executive Officer
Finance & Administration,
Chief Financial Officer
Witness: Witness:
------------------- ------------------
Xxxx X. Xxxxxxxx
Name:
---------------------
18
List of Exhibits
----------------
Exhibit A Xxxx of Sale (1.6)
Exhibit B-1 Trademark Assignment (1.6)
Exhibit B-2 Patent Assignment (1.6)
Exhibit C Assumption Agreement (1.6)
Exhibit D-1 Promissory Note (2.1)
Exhibit D-2 Guaranty (2.1)
Exhibit E PWC Agreed Upon Procedures (2.1)
Exhibit F Lydall Non-Competition and Non-Solicitation Agreement (7.4)
19
Schedules
---------
Schedule 1.1(a) Machinery and Equipment
Schedule 1.1(b) Inventory
Schedule 1.1(c) Assigned Contracts
Schedule 1.1(d) Intellectual Property
Schedule 1.1(f) Customer List
Schedule 3.3 Consents and Approvals--Lydall
Schedule 3.4(a) Warranties
Schedule 3.4(b) Warranty Claims
Schedule 3.5(a) Title to Assets
Schedule 3.8 Tax Audit
Schedule 4.3 Consents and Approvals - Xxxxxxx Fleet
Schedule 4.4 Xxxxxxx Fleet Financial Statements
20
