Exhibit 2.1
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is dated December 18, 2001,
by and between Construction Equipment Direct, Inc., a Tennessee corporation
("Buyer"), and Eagle-Picher Industries, Inc., an Ohio corporation ("Seller").
RECITALS
Seller is engaged in the business of manufacturing and selling wheel
tractor scrapers, other earth scrapers and rough terrain lift trucks through its
Construction Equipment Division (as more fully described in Section 1.1, the
"Division"); and
Seller beneficially owns all of the issued and outstanding capital
stock of Equipos xx Xxxxx, X.X. de C.V., a Mexican corporation ("Xxxxx"); and
Seller desires to sell to Buyer, and Buyer desires to purchase from
Seller, all of the Assets (as defined herein) and all of the capital stock of
Xxxxx, all upon the terms and conditions of this Agreement.
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS AND USAGE
1.1 DEFINITIONS
For purposes of this Agreement, the following terms and variations
thereof have the meanings specified or referred to in this Section 1.1:
"Accounts Payable"--amounts owing by Seller to vendors and suppliers in
respect of goods shipped or products sold or services rendered to Seller in the
Ordinary Course of Business of the Division.
"Accounts Receivable"--(a) all trade accounts receivable and other
rights to payment from customers of the Division and the full benefit of all
security for such accounts or rights to payment, including all trade accounts
receivable representing amounts receivable in respect of goods shipped or
products sold or services rendered by Seller to customers of the Division, (b)
all other accounts or notes receivable of Seller relating to the business of the
Division and the full benefit of all security for such accounts or notes, and
(c) any claim, remedy or other right related to any of the foregoing.
"Accrued Closing Payroll"--Liabilities for salary and wages due to
employees of the Division and Xxxxx, together with all related employment taxes
and withholding amounts, attributable to the payroll period ended December 14,
2001, but only to the extent included in Accrued Liabilities.
"Accrued Liabilities"--Liabilities of Seller (other than Accounts
Payable) in respect of payroll, taxes, insurance, utilities, rent, vacation and
other business expenses or the provision of
goods or services incurred by Seller in the Ordinary Course of Business of the
Division that are generally required under GAAP to be reflected as current
liabilities on the balance sheet of Seller.
"Accrued Shutdown Payroll"--Liabilities for vacation and holiday pay
due to employees of the Division and Xxxxx, together with all related employment
taxes and withholding amounts, attributable to the December 2001 shutdown
period, but only to the extent included in Accrued Liabilities.
"Xxxxx"--as defined in the Recitals to this Agreement.
"Xxxxx Accounts Payable"--amounts owing by Xxxxx to vendors and
suppliers in respect of goods shipped or products sold or services rendered to
Xxxxx in the Ordinary Course of Business.
"Xxxxx Accounts Receivable"--(a) all trade accounts receivable and
other rights to payment from customers of Xxxxx and the full benefit of all
security for such accounts or rights to payment, including all trade accounts
receivable representing amounts receivable in respect of goods shipped or
products sold or services rendered by Xxxxx to customers, (b) all other accounts
or notes receivable of Xxxxx and the full benefit of all security for such
accounts or notes and (c) any claim, remedy or other right related to any of the
foregoing.
"Xxxxx Accrued Liabilities"--Liabilities of Xxxxx (other than Xxxxx
Accounts Payable) in respect of payroll, taxes, insurance, utilities, rent,
vacation and other business expenses or the provision of goods or services
incurred by Xxxxx in the Ordinary Course of Business that are generally required
under GAAP to be reflected as current liabilities on the balance sheet of Xxxxx.
"Xxxxx Interim Balance Sheet"--the July 31, 2001 balance sheet of Xxxxx
attached hereto as Exhibit A.
"Xxxxx Inventories"--all inventories of Xxxxx, wherever located,
including all finished goods, work in process, raw materials, spare parts and
all other materials and supplies to be used or consumed by Xxxxx in the
production of finished goods.
"Adjusted Closing Working Capital"--as defined in Section 2.7(b).
"Adjustment Amount"--as defined in Section 2.6(a).
"Assets"--as defined in Section 2.1.
"Assumed Liabilities"--as defined in Section 2.4(a).
"Best Efforts"--the efforts that a prudent Person desirous of achieving
a result would use in similar circumstances to achieve that result as
expeditiously as possible, provided, however, that a Person required to use Best
Efforts under this Agreement will not be thereby required to take actions that
would result in a material adverse change in the benefits to such Person of this
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Agreement and the Contemplated Transactions or to dispose of or make any change
to its business, expend any material funds or incur any other material burden.
"Breach"--any breach of, or any inaccuracy in, any representation or
warranty or any breach of, or failure to perform or comply with, any covenant or
obligation, in or of this Agreement or any other Contract, or any event which
with the passing of time or the giving of notice, or both, would constitute such
a breach, inaccuracy or failure.
"Business Day"--any day other than (a) Saturday or Sunday or (b) any
other day on which national banks are permitted or required to be closed.
"Buyer"--as defined in the first paragraph of this Agreement.
"Buyer Indemnified Persons"--as defined in Section 6.2.
"Closing"--the closing of the Contemplated Transactions.
"Closing Date"--the date on which the Closing actually takes place.
"Closing Financial Statements"--as defined in Section 2.7(e).
"COBRA"--all continuation requirements applicable to Seller for its
welfare benefit plans, including (a) Section 4980B of the Code (as well as its
predecessor provision, Section 162(k) of the Code) and Sections 601 through 608,
inclusive, of ERISA, and (2) any applicable state statutes mandating health
insurance continuation coverage for employees.
"Code"--the Internal Revenue Code of 1986.
"Consent"--any approval, consent, ratification, waiver or other
authorization.
"Contemplated Transactions"--all of the transactions contemplated by
this Agreement.
"Contract"--any agreement, contract, Lease, consensual obligation,
promise or undertaking (whether written or oral and whether express or implied),
whether or not legally binding.
"Damages"--as defined in Section 6.2.
"Division"--the Construction Equipment Division of Seller, including
the operations and businesses of Seller relating to the design, manufacture,
assembly, distribution and sale of wheel tractor scrapers, other earth scrapers
and rough terrain lift trucks and all repair, replacement and service parts
related thereto, and the performance of all services in connection therewith,
wherever conducted or located.
"Effective Time"--the close of business on December 14, 2001.
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"Employee Plans" --all employee benefit plans as defined by Section
3(3) of ERISA, all specified fringe benefit plans as defined in Section 6039D of
the Code, and all other bonus, incentive compensation, deferred compensation,
profit sharing, stock option, stock appreciation right, stock bonus, stock
purchase, employee stock ownership, savings, severance, change in control,
supplemental unemployment, layoff, salary continuation, retirement, pension,
health, life insurance, disability, accident, group insurance, vacation,
holiday, sick leave, fringe benefit or welfare plan, including any multiemployer
plan (within the meaning of Section 3(37) of ERISA), and any other employee
compensation or benefit plan, agreement, policy, practice, commitment, contract
or understanding (whether qualified or nonqualified, currently effective or
terminated, written or unwritten) and any trust, escrow or other agreement
related thereto that (i) is maintained or contributed to by Seller or any other
corporation or trade or business controlled by, controlling or under common
control with Seller (within the meaning of Section 414 of the Code or Section
4001(a)(14) or 4001(b) of ERISA) ("ERISA Affiliate") or has been maintained or
contributed to in the last six (6) years by Seller or any ERISA Affiliate, or
with respect to which Seller or any ERISA Affiliate has or may have any
liability, and (ii) provides benefits, or describes policies or procedures
applicable to any current or former director, officer, employee or service
provider of Seller or any ERISA Affiliate, or the dependents of any thereof,
regardless of how (or whether) liabilities for the provision of benefits are
accrued or assets are acquired or dedicated with respect to the funding thereof.
"Encumbrance"--any charge, claim, community or other marital property
interest, equitable interest, lien, option, pledge, security interest, mortgage,
right of way, easement, encroachment, servitude, right of first option, right of
first refusal or similar restriction, including any restriction on voting (in
the case of any security or equity interest), transfer, receipt of income or
exercise of any other attribute of ownership.
"Environment"--soil, land surface or subsurface strata, surface waters,
groundwaters, drinking water supply, stream sediments, ambient air (including
indoor air), plant and animal life and any other environmental medium or natural
resource.
"Environmental, Health and Safety Liabilities"--any cost, damages,
expense, liability, obligation, fines, penalties or other responsibility arising
from or under any Environmental Law or Occupational Safety and Health Law,
including those consisting of, relating to, or arising out of:
(a) any environmental, health or safety matter or condition (including
on-site or off-site contamination, occupational safety and health, and
regulation of any substance or product);
(b) any fine, penalty, judgment, award, settlement, legal or
administrative proceeding, damages, loss, claim, demand or response, or remedial
or inspection cost or expense arising under any Environmental Law or
Occupational Safety and Health Law;
(c) financial responsibility under any Environmental Law or
Occupational Safety and Health Law for cleanup costs or corrective action,
including any investigation, cleanup, removal, containment or other remediation
or response actions ("Cleanup") required by any Environmental Law or
Occupational Safety and Health Law (whether or not such Cleanup has been
required or
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requested by any Governmental Body or any other Person) and for any natural
resource damages; or
(d) any other compliance, corrective or remedial measure required under
any Environmental Law or Occupational Safety and Health Law.
The terms "removal," "remedial" and "response action" include the types
of activities covered by the United States Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (CERCLA).
"Environmental Law"--any Legal Requirement that requires or relates to
the protection of public health and welfare or the environment, now existing or
hereinafter adopted, including any Legal Requirement that requires or relates
to:
(a) advising appropriate authorities, employees or the public of
intended or actual Releases of pollutants or hazardous substances or materials,
violations of discharge limits or other prohibitions and the commencement of
activities, such as resource extraction or construction, that could have
significant impact on the Environment;
(b) preventing or reducing to acceptable levels the Release of
pollutants or hazardous substances or materials into the Environment;
(c) reducing the quantities, preventing the Release or minimizing the
hazardous characteristics of wastes that are generated;
(d) assuring that products are designed, formulated, packaged and used
so that they do not present unreasonable risks to human health or the
Environment when used or disposed of;
(e) protecting resources, species or ecological amenities;
(f) reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil or other potentially
harmful substances;
(g) cleaning up pollutants that have been Released, preventing the
Threat of Release or paying the costs of such clean up or prevention;
(h) making responsible parties pay private parties, or groups of them,
for damages done to their health or the Environment or permitting self-appointed
representatives of the public interest to recover for injuries done to public
assets; or
(i) the generation, processing, treatment, investigation, remediation,
storage, transport, disposal, management, handling, and use of Hazardous
Substances.
"ERISA"--the Employee Retirement Income Security Act of 1974.
"Exchange Act"--the Securities Exchange Act of 1934.
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"Excluded Accounts Receivable"--those Accounts Receivable listed on
Exhibit B hereto.
"Excluded Assets"--as defined in Section 2.2.
"Excluded Inventories"--those items and quantities of the Inventories
listed on Exhibit C hereto.
"Facilities"--any real property, leasehold or other interest in real
property currently owned or operated by Seller and used in the operation of or
otherwise relating to the business of the Division. Notwithstanding the
foregoing, for purposes of the definitions of "Hazardous Activity" and "Remedial
Action" and Section 6.3, "Facilities" shall mean any real property, leasehold or
other interest in real property currently or formerly owned or operated by
Seller.
"Final Adjustment Amount"--as defined in Section 2.6(c).
"GAAP"--generally accepted accounting principles for financial
reporting in the United States.
"Governing Documents"--with respect to any particular entity, (a) if a
corporation, the articles or certificate of incorporation and the bylaws; (b) if
a general partnership, the partnership agreement and any statement of
partnership; (c) if a limited partnership, the limited partnership agreement and
the certificate of limited partnership; (d) if a limited liability company, the
articles of organization and operating agreement; (e) if another type of Person,
any other charter or similar document adopted or filed in connection with the
creation, formation or organization of the Person; (f) all equityholders'
agreements, voting agreements, voting trust agreements, joint venture
agreements, registration rights agreements or other agreements or documents
relating to the organization, management or operation of any Person or relating
to the rights, duties and obligations of the equityholders of any Person; and
(g) any amendment or supplement to any of the foregoing.
"Governmental Authorization"--any Consent, license, registration or
permit issued, granted, given or otherwise made available by or under the
authority of any Governmental Body or pursuant to any Legal Requirement.
"Governmental Body"--any:
(a) nation, state, county, city, town, borough, village, district or
other jurisdiction;
(b) federal, state, local, municipal, foreign or other government;
(c) governmental or quasi-governmental authority of any nature
(including any agency, branch, department, board, commission, court, tribunal or
other entity exercising governmental or quasi-governmental powers);
(d) multinational organization or body;
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(e) body exercising, or entitled or purporting to exercise, any
administrative, executive, judicial, legislative, police, regulatory or taxing
authority or power; or
(f) official of any of the foregoing.
"Hazardous Activity"--the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
Release, storage, transfer, transportation, treatment or use (including any
withdrawal or other use of groundwater) of Hazardous Material in, on, under,
about or from any of the Facilities or any part thereof into the Environment and
any other act, business, operation or thing that increases the danger, or risk
of danger, or poses an unreasonable risk of harm, to persons or property on or
off the Facilities.
"Hazardous Material"--any substance, material or waste that is
regulated by any Governmental Body, including any material, substance or waste
which is defined as a "hazardous waste," "hazardous material," "hazardous
substance," "extremely hazardous waste," "restricted hazardous waste,"
"contaminant," "toxic waste," "pollutant," "contaminant" or "toxic substance"
under any provision of Environmental Law, and including petroleum, petroleum
products, asbestos, presumed asbestos-containing material or asbestos-containing
material, urea formaldehyde, radioactive material, infectious materials, toxic
microorganisms and polychlorinated biphenyls.
"Indemnified Person"--as defined in Section 6.8(a).
"Indemnifying Person"--as defined in Section 6.8(a).
"Initial Working Capital"--as defined in Section 2.7(a).
"Intellectual Property Assets"--all intellectual property owned or
licensed (as licensor or licensee) by Seller in connection with the business of
the Division and in which Seller has a proprietary interest, including:
(a) all assumed fictional business names, trade names, registered and
unregistered trademarks, service marks and applications ;
(b) all patents, patent applications and inventions and discoveries
that may be patentable;
(c) all registered and unregistered copyrights in both published works
and unpublished works;
(d) all rights in mask works; and
(e) all know-how, trade secrets, confidential or proprietary
information, customer lists, Software, technical information, data, process
technology, plans, drawings and blue prints.
"Interim Balance Sheet"--the July 31, 2001 balance sheet of the
Division attached hereto as Exhibit D.
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"Inventories"--all inventories of Seller, wherever located, used in or
otherwise relating to the business of the Division, including all finished
goods, work in process, raw materials, spare parts and all other materials and
supplies to be used or consumed by the Division in the production of finished
goods.
"IRS"--the United States Internal Revenue Service and, to the extent
relevant, the United States Department of the Treasury.
"Knowledge"--an individual will be deemed to have Knowledge of a
particular fact or other matter if that individual is aware, without any duty of
inquiry, or has been made aware of that fact or matter. A Person (other than an
individual) will be deemed to have Knowledge of a particular fact or other
matter if any individual who is serving, or who has at any time served, as a
director, officer, partner, executor or trustee of that Person (or in any
similar capacity) has, or at any time had, Knowledge of that fact or other
matter.
"Lease"--any lease or rental agreement, license, right to use or
installment and conditional sale agreement to which Seller is a party and which
relates to the business of the Division, and any other Seller Contract
pertaining to the leasing or use of any Tangible Personal Property.
"Legal Requirement"--any requirement arising under any federal, state,
local, municipal, foreign, international, multinational or other constitution,
law, ordinance, principle of common law, code, regulation, statute, order,
directives or treaty.
"Liability"--with respect to any Person, any liability or obligation of
such Person of any kind, character or description, whether known or unknown,
absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated
or unliquidated, secured or unsecured, joint or several, due or to become due,
vested or unvested, executory, determined, determinable or otherwise, and
whether or not the same is required to be accrued on the financial statements of
such Person.
"Occupational Safety and Health Law"--any Legal Requirement designed to
provide safe and healthful working conditions and to reduce occupational safety
and health hazards, including the Occupational Safety and Health Act, and any
program, whether governmental or private (such as those promulgated or sponsored
by industry associations and insurance companies), designed to provide safe and
healthful working conditions.
"Order"--any order, injunction, judgment, decree, ruling, assessment or
arbitration award of any Governmental Body or arbitrator.
"Ordinary Course of Business"--an action taken by a Person will be
deemed to have been taken in the Ordinary Course of Business only if that
action:
(a) is consistent in nature, scope and magnitude with the past
practices of such Person and is taken in the ordinary course of the normal,
day-to-day operations of such Person;
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(b) does not require authorization by the board of directors or
shareholders of such Person (or by any Person or group of Persons exercising
similar authority) and does not require any other separate or special
authorization of any nature; and
(c) is similar in nature, scope and magnitude to actions customarily
taken, without any separate or special authorization, in the ordinary course of
the normal, day-to-day operations of other Persons that are in the same line of
business as such Person.
"Permitted Encumbrances"--(a) liens for ad valorem taxes, assessments,
materials or labor not yet due and payable; (b) in the case of Xxxxx, any item
reflected in the legal title opinion of Xxxxx, Xxxxxxxx Xxxxxx y Xxxxxxxx Xxx,
S.C., dated May 10, 2001, and applicable zoning ordinances; and (c) rights of
Caterpillar, Inc. in and to the Intellectual Property as described in those
agreements listed and described in the letter agreement dated November __, 2001
between Seller and Caterpillar, Inc.
"Person"--an individual, partnership, corporation, business trust,
limited liability company, limited liability partnership, joint stock company,
trust, unincorporated association, joint venture or other entity or a
Governmental Body.
"Proceeding"--any action, arbitration, audit, hearing, investigation,
litigation or suit (whether civil, criminal, administrative, judicial or
investigative, whether formal or informal, whether public or private) commenced,
brought, conducted or heard by or before any Governmental Body or arbitrator.
"Purchase Price"--as defined in Section 2.3.
"Record"--information that is inscribed on a tangible medium or that is
stored in an electronic or other medium and is retrievable in perceivable form.
"Related Person"--
With respect to a particular individual:
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled by any one or
more members of such individual's Family;
(c) any Person in which members of such individual's Family hold
(individually or in the aggregate) a Material Interest; and
(d) any Person with respect to which one or more members of such
individual's Family serves as a director, officer, partner, executor or trustee
(or in a similar capacity).
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With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is directly or
indirectly controlled by or is directly or indirectly under common control with
such specified Person;
(b) any Person that holds a Material Interest in such specified Person;
(c) each Person that serves as a director, officer, partner, executor
or trustee of such specified Person (or in a similar capacity);
(d) any Person in which such specified Person holds a Material
Interest; and
(e) any Person with respect to which such specified Person serves as a
general partner or a trustee (or in a similar capacity).
For purposes of this definition, (a) "control" (including
"controlling," "controlled by," and "under common control with") means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise, and shall be construed as such term is
used in the rules promulgated under the Securities Act; (b) the "Family" of an
individual includes (i) the individual, (ii) the individual's spouse, (iii) any
other natural person who is related to the individual or the individual's spouse
within the second degree and (iv) any other natural person who resides with such
individual; and (c) "Material Interest" means direct or indirect beneficial
ownership (as defined in Rule 13d-3 under the Exchange Act) of voting securities
or other voting interests representing at least ten percent (10%) of the
outstanding voting power of a Person or equity securities or other equity
interests representing at least ten percent (10%) of the outstanding equity
securities or equity interests in a Person.
"Release"--any release, spill, emission, leaking, pumping, pouring,
dumping, emptying, injection, deposit, disposal, discharge, dispersal, leaching,
escaping or migration on or into the Environment or on, into or out of any
property.
"Remedial Action"--all actions, including any capital expenditures,
required or voluntarily undertaken (a) to clean up, remove, treat or in any
other way address any Hazardous Material or other substance; (b) to prevent the
Release or Threat of Release or to minimize the further Release of any Hazardous
Material or other substance so it does not migrate or endanger or threaten to
endanger public health or welfare or the Environment; (c) to perform
pre-remedial studies and investigations or post-remedial monitoring and care; or
(d) to bring all Facilities and the operations conducted thereon into compliance
with Environmental Laws, including the securing of all required environmental
Governmental Authorizations.
"Representative"--with respect to a particular Person, any director,
officer, manager, employee, agent, consultant, advisor, accountant, financial
advisor, legal counsel or other representative of that Person.
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"Retained Liabilities"--as defined in Section 2.4(b).
"Securities Act"--the Securities Act of 1933.
"Seller"--as defined in the first paragraph of this Agreement.
"Seller Contracts"--the Contracts described in Exhibit E hereto.
"Software"--all computer software and subsequent versions thereof,
including source code, object, executable or binary code, objects, comments,
screens, user interfaces, report formats, templates, menus, buttons and icons
and all files, data, materials, manuals, design notes and other items and
documentation related thereto or associated therewith.
"Stock"--all of the issued and outstanding capital stock of Xxxxx, as
more fully describe in Section 3.3.
"Subsidiary"--with respect to any Person (the "Owner"), any corporation
or other Person of which securities or other interests having the power to elect
a majority of that corporation's or other Person's board of directors or similar
governing body, or otherwise having the power to direct the business and
policies of that corporation or other Person (other than securities or other
interests having such power only upon the happening of a contingency that has
not occurred), are held by the Owner or one or more of its Subsidiaries.
"Tangible Personal Property"--all machinery, equipment, tools,
furniture, office equipment, computer hardware, supplies, materials, vehicles
and other items of tangible personal property (other than Inventories) of every
kind owned or leased by Seller that is (a) located at any of the Facilities and
used in connection with or otherwise relating to the business of the Division,
and (b) used solely in connection with the business of the Division (wherever
located and whether or not carried on Seller's books), together with any express
or implied warranty by the manufacturers or sellers or lessors of any item or
component part thereof and all maintenance records and other documents relating
thereto.
"Tax"--any income, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium, property, environmental, windfall
profit, customs, vehicle, airplane, boat, vessel or other title or registration,
capital stock, franchise, employees' income withholding, foreign or domestic
withholding, social security, unemployment, disability, real property, personal
property, sales, use, transfer, value added, alternative, add-on minimum and
other tax, fee, assessment, levy, tariff, charge or duty of any kind whatsoever
and any interest, penalty, addition or additional amount thereon imposed,
assessed or collected by or under the authority of any Governmental Body or
payable under any tax-sharing agreement or any other Contract.
"Tax Return"--any return (including any information return), report,
statement, schedule, notice, form, declaration, claim for refund or other
document or information filed with or submitted to, or required to be filed with
or submitted to, any Governmental Body in connection with the determination,
assessment, collection or payment of any Tax or in connection with the
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administration, implementation or enforcement of or compliance with any Legal
Requirement relating to any Tax.
"Tentative Adjustment Amount"--as defined in Section 2.6(b).
"Third Party"--a Person that is not a party to this Agreement.
"Third-Party Claim"--any claim against any Indemnified Person by a
Third Party, whether or not involving a Proceeding.
"Threat of Release"--a reasonable likelihood of a Release that may
require action in order to prevent or mitigate damage to the Environment that
may result from such Release.
"WARN Act"--the Worker Adjustment and Retraining Notification Act or
any similar state or local Legal Requirement.
"Workers' Compensation Liabilities"--Liabilities of Seller for workers'
compensation benefits and other obligations arising under Legal Requirements
relating to injuries or disabilities suffered by workers employed in the
business of the Division prior to the Effective Time.
1.2 USAGE
(a) INTERPRETATION. In this Agreement, unless a clear contrary
intention appears:
(i) the singular number includes the plural number and vice
versa;
(ii) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are not
prohibited by this Agreement, and reference to a Person in a particular capacity
excludes such Person in any other capacity or individually;
(iii) reference to any gender includes each other gender;
(iv) reference to any agreement, document or instrument means such
agreement, document or instrument as amended or modified and in effect from time
to time in accordance with the terms thereof;
(v) reference to any Legal Requirement means such Legal
Requirement as amended, modified, codified, replaced or reenacted, in whole or
in part, and in effect from time to time, including rules and regulations
promulgated thereunder, and reference to any section or other provision of any
Legal Requirement means that provision of such Legal Requirement from time to
time in effect and constituting the substantive amendment, modification,
codification, replacement or reenactment of such section or other provision;
(vi) "hereunder," "hereof," "hereto," and words of similar import
shall be deemed references to this Agreement as a whole and not to any
particular Article, Section or other provision hereof;
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(vii) "including" (and with correlative meaning "include") means
including without limiting the generality of any description preceding such
term;
(viii) "or" is used in the inclusive sense of "and/or";
(ix) with respect to the determination of any period of time,
"from" means "from and including" and "to" means "to but excluding"; and
(x) references to documents, instruments or agreements shall be
deemed to refer as well to all addenda, exhibits, schedules or amendments
thereto.
(b) ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP.
(c) LEGAL REPRESENTATION OF THE PARTIES. This Agreement was negotiated
by the parties with the benefit of legal representation, and any rule of
construction or interpretation otherwise requiring this Agreement to be
construed or interpreted against any party shall not apply to any construction
or interpretation hereof.
2. SALE AND TRANSFER OF ASSETS; CLOSING
2.1 ASSETS TO BE SOLD
Upon the terms and subject to the conditions set forth in this
Agreement, at the Closing, but effective as of the Effective Time, Seller shall
sell, convey, assign, transfer and deliver to Buyer, and Buyer shall purchase
and acquire from Seller, free and clear of any Encumbrances other than Permitted
Encumbrances, all of Seller's right, title and interest in and to (i) all
personal property and assets located at any of the Facilities and used in
connection with or otherwise relating to the business of the Division, and (ii)
all other personal property and assets, tangible and intangible, of every kind
and description, wherever located, used solely in connection with the business
of the Division, including in each case the following (but excluding the
Excluded Assets):
(a) all Tangible Personal Property;
(b) all Inventories;
(c) all Accounts Receivable;
(d) all Seller Contracts, and all outstanding offers or solicitations
made by or to Seller to enter into any Contract relating solely to the business
of the Division;
(e) all Governmental Authorizations relating to the business of the
Division and all pending applications therefor or renewals thereof, in each case
to the extent transferable to Buyer;
(f) all data and Records related to the business of the Division,
including client and customer lists and Records, referral sources, research and
development reports and Records, production reports and Records, service and
warranty Records, equipment logs, operating guides
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and manuals, financial and accounting Records, creative materials, advertising
materials, promotional materials, studies, reports, correspondence and other
similar documents and Records and, subject to Legal Requirements, copies of all
personnel Records and other Records described in Section 2.2(f);
(g) all of the intangible rights and property of Seller used in
connection with or otherwise relating to the Division, including Intellectual
Property Assets, going concern value, goodwill and telephone and telecopy
addresses and listings;
(h) all rights of Seller relating to deposits and prepaid expenses of
the Division, claims for refunds and rights to offset in respect thereof that
are not excluded under Section 2.2(g); and
(i) all of the Stock.
All of the property and assets to be transferred to Buyer hereunder are
herein referred to collectively as the "Assets."
Notwithstanding the foregoing, the transfer of the Assets pursuant to
this Agreement shall not include the assumption of any Liability unless Buyer
expressly assumes that Liability pursuant to Section 2.4(a).
2.2 EXCLUDED ASSETS
Notwithstanding anything to the contrary contained in Section 2.1 or
elsewhere in this Agreement, the following assets of Seller (collectively, the
"Excluded Assets") are not part of the sale and purchase contemplated hereunder,
are excluded from the Assets and shall remain the property of Seller after the
Closing:
(a) all cash and cash equivalents;
(b) the Excluded Accounts Receivable;
(c) the Excluded Inventories;
(d) subject to the provisions of Section 5.6(a), Seller's rights to the
name "Eagle-Picher," including any stylized presentation of such name;
(e) all insurance policies and rights thereunder;
(f) all personnel Records and other Records that Seller is required by
law to retain in its possession;
(g) all claims for refund of Taxes and other governmental charges of
whatever nature;
(h) all rights in connection with and assets of the Employee Plans;
(i) all rights of Seller under this Agreement and any instruments of
conveyance or assumption executed and delivered in connection herewith;
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(j) claims and causes of action against Third Parties, other than, to
the extent assignable, claims or causes of action that are included in or relate
to the Assets described in subparts (a) through (i) of Section 2.1;
(k) the Lease Agreement dated January 10, 2001 between Seller and
Xxxxxx Xxxxxxxx regarding Seller's warehouse facility in Del Rio, Texas; and
(l) all real property of Seller and any buildings, structures, fixtures
and improvements located thereon.
2.3 CONSIDERATION
The consideration for the Assets (the "Purchase Price") will be (a) Ten
Million Six Hundred Thousand Dollars ($10,600,000.00) plus or minus the
Adjustment Amount and (b) the assumption of the Assumed Liabilities. At the
Closing, the Purchase Price, as adjusted by the Tentative Adjustment Amount,
shall be delivered by Buyer to Seller as follows: (a) $10,600,000.00 plus or
minus the Tentative Adjustment Amount by wire transfer of immediately available
funds; and (b) the balance of the Purchase Price by assumption of the Assumed
Liabilities through the execution and delivery of an appropriate instrument of
assumption. The Final Adjustment Amount shall be paid in accordance with Section
2.6(c).
2.4 LIABILITIES
(a) ASSUMED LIABILITIES. On the Closing Date, but effective as of the
Effective Time, Buyer shall assume and agree to timely pay, perform and
discharge only the following Liabilities of Seller (the "Assumed Liabilities"):
(i) all Account Payable and all Accrued Liabilities incurred by Seller
that remain unpaid as of the Effective Time; provided, that Buyer shall not
assume any Workers' Compensation Liabilities, Accrued Closing Payroll or Accrued
Shutdown Payroll; and, provided, further, that Buyer shall assume Accounts
Payable and Accrued Liabilities to any Related Person of Seller only to the
extent the same are included in the computation of Adjusted Closing Working
Capital for purposes of Sections 2.6 and 2.7;
(ii) any Liability to customers or suppliers of the Division incurred
by Seller in the Ordinary Course of Business for orders outstanding as of the
Effective Time (other than any Liability arising out of or relating to a Breach
that occurred prior to the Effective Time);
(iii) any Liability to customers of the Division under warranties in
the forms disclosed in Exhibit F given by Seller to customers of the Division in
the Ordinary Course of Business prior to the Effective Time, but excluding any
Liability for injury to person or property arising out of any defect in any
product sold by Seller;
(iv) any Liability arising after the Effective Time under the Seller
Contracts (other than any Liability arising out of or relating to a Breach that
occurred prior to the Effective Time); and
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(v) any Liability of Seller arising under the WARN Act relating to the
failure of Buyer to offer employment to employees of the Division after the
Closing Date.
(b) RETAINED LIABILITIES. The Retained Liabilities shall remain the
sole responsibility of and shall be retained and timely paid, performed and
discharged solely by Seller. "Retained Liabilities" shall mean every Liability
of Seller other than the Assumed Liabilities.
2.5 ALLOCATION
The Purchase Price shall be allocated in a manner to be mutually
determined by Seller and Buyer no later than sixty (60) days following the
Closing Date; provided, that no more than $5,000,000.00 shall be allocated to
the Stock and such allocation shall be made within ten (10) days following the
Closing Date. After the Closing, the parties shall make consistent use of the
agreed upon allocation, fair market value and useful lives as determined for all
Tax purposes and in all filings, declarations and reports with the IRS in
respect thereof, including the reports required to be filed under Section 1060
of the Code. In any Proceeding related to the determination of any Tax, neither
Buyer nor Seller shall contend or represent that such allocation is not a
correct allocation.
2.6 ADJUSTMENT AMOUNT AND PAYMENT
(a) The "Adjustment Amount" (which may be a positive or negative
number) will be equal to the amount determined by subtracting the Adjusted
Closing Working Capital from the Initial Working Capital.
(b) At the Closing, Buyer and Seller have estimated the Adjustment
Amount to be $_______, as set forth in Exhibit G hereto (the "Tentative
Adjustment Amount"). The cash portion of the Purchase Price shall be adjusted at
the Closing by the Tentative Adjustment Amount.
(c) After the Closing, Buyer and Seller shall determine the Adjustment
Amount in the manner provided in Section 2.7. The "Final Adjustment Amount" will
be equal to the amount determined by subtracting the Tentative Adjustment Amount
from the Adjustment Amount. If the Final Adjustment Amount is positive, the
Final Adjustment Amount shall be paid by wire transfer by Seller to an account
specified by Buyer. If the Final Adjustment Amount is negative, the Final
Adjustment Amount shall be paid by wire transfer of immediately available funds
by Buyer to an account specified by Seller. Within three (3) business days after
the calculation of the Closing Working Capital becomes binding and conclusive on
the parties pursuant to Section 2.7, Seller or Buyer, as the case may be, shall
make the wire transfer payment provided for in this Section 2.6(c).
2.7 ADJUSTMENT PROCEDURE
(a) "Initial Working Capital" shall mean the aggregate amount of the
Accounts Receivable, the Inventories, the Xxxxx Accounts Receivable and the
Xxxxx Inventories, minus the aggregate amount of the Accounts Payable, the
Accrued Liabilities, the Xxxxx Accounts Payable and the Xxxxx Accrued
Liabilities, all as shown on the Interim Balance Sheet or the Xxxxx Interim
Balance Sheet, as the case may be. Taking into account the provisions of Section
2.7(d), the Initial Working Capital is stipulated and agreed by the parties to
be $20,040,000.00.
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(b) "Adjusted Closing Working Capital" shall mean the aggregate amount
of the Accounts Receivable, the Inventories, the Xxxxx Accounts Receivable and
the Xxxxx Inventories, minus the aggregate amount of the Excluded Accounts
Receivable (in the amount shown on Exhibit B hereto), the Excluded Inventories
(in the amount shown on Exhibit C hereto), the Accounts Payable, the Accrued
Liabilities (other than the Workers' Compensation Liabilities, Accrued Closing
Payroll and Accrued Shutdown Payroll, to the extent otherwise included therein),
the Xxxxx Accounts Payable and the Xxxxx Accrued Liabilities, all as of the
Effective Time as determined in accordance Seller's Accounting Practices.
(c) "Seller's Accounting Practices" means Seller's historical
accounting principles, practices and policies for the Division consistently
applied. It is the intent of the parties that the Adjustment Amount represent
actual changes in the assets and liabilities of the Division between July 31,
2001 and the Effective Time, and not differences in accounting practices or
judgment. To the extent that an item is included in the determination of Initial
Working Capital, such item shall be treated consistently in the determination of
Adjusted Closing Working Capital. To the extent an item is to be included in the
determination of Adjusted Closing Working Capital that was not included in the
determination of Initial Working Capital, such item shall be treated, to the
maximum extent possible, in a manner consistent with the treatment of similar or
related items that have been included in the determination of Initial Working
Capital.
(d) Notwithstanding any of the provisions of this Section 2.7 to the
contrary, the determination of Initial Working Capital and Adjusted Closing
Working Capital shall be made by eliminating amounts due from Seller to Xxxxx
and amounts due from Xxxxx to Seller to the extent that such intercompany
amounts relate to the business of the Division.
(e) Buyer shall prepare financial statements ("Closing Financial
Statements") of the Division and Xxxxx as of the Effective Time and for the
period from the date of the Interim Balance Sheet and the Xxxxx Interim Balance
Sheet through the Effective Time in accordance with Seller's Accounting
Practices. Buyer shall then determine the Adjusted Closing Working Capital.
Buyer shall deliver the Closing Financial Statements and its determination of
the Adjusted Closing Working Capital to Seller within one hundred twenty (120)
days following the Closing Date.
(f) If within thirty (30) days following delivery of the Closing
Financial Statements and the Adjusted Closing Working Capital calculation Seller
has not given Buyer written notice of its objection as to the Adjusted Closing
Working Capital calculation (which notice shall state the basis of Seller's
objection), then the Adjusted Closing Working Capital calculated by Buyer shall
be binding and conclusive on the parties and be used in computing the Adjustment
Amount.
(g) If Seller duly gives Buyer notice of objection pursuant to Section
2.7(f), Seller and Buyer shall work together in good faith to resolve all
differences. In connection with such efforts, Seller and Buyer shall
periodically present to one another their respective calculations of the
Adjusted Closing Working Capital (together with supporting computations) as
frequently as either of them may request. If Seller and Buyer fail to resolve
the calculation of the Adjusted Closing Working Capital within sixty (60) days
of Buyer's receipt of Seller's objection notice, Seller and Buyer shall submit
the determination of the Adjusted Closing Working Capital to arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. Such arbitration shall take place in Louisville, Kentucky and shall
be conducted by a single arbitrator
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who shall have demonstrated knowledge and expertise in financial and accounting
matters. Buyer and Seller shall each be entitled to submit to the arbitrator
only the calculation of the Adjusted Closing Working Capital last submitted to
the other in accordance with the procedure described in the second sentence of
this Section 2.7(g). In making a final determination, the arbitrator shall be
required to select either the position of the Buyer in its entirety or the
position of the Seller in its entirety. The arbitrator shall not be authorized
by this Agreement or otherwise to make any other decision or determination. The
decision of the arbitrator shall be final, binding and conclusive on the
parties. Seller and Buyer shall each bear fifty percent (50%) of the fees and
costs of the arbitrator for such determination.
2.8 CONSENTS
This Agreement shall not cause the assignment or assumption of any
Contract which requires Consent to be assigned unless such Consent has been
obtained. Seller shall use its reasonable commercial efforts to obtain (provided
Seller shall not be obligated to make any payments or incur any Liabilities in
connection therewith), and Buyer agrees to cooperate with Seller in its efforts
to obtain (including, without limitation, the submission of reasonable financial
and other information concerning Buyer and the execution and delivery of any
assumption agreements or similar documents reasonably requested by a third
party), all required Consents. The Purchase Price shall not be reduced or
increased by reason of the inability to obtain any Consent. To the extent that
any Consent is not obtained by Seller, Seller shall use reasonable commercial
efforts to provide to Buyer the benefits of any affected Contract intended to be
included in the Assets and to cooperate in any arrangement, reasonable and
lawful as to Seller and Buyer, designed to provide such benefits to Buyer, and,
after the Closing, Buyer shall use reasonable commercial efforts to perform the
obligations of Seller arising under the Contracts or reimburse Seller for the
performance thereof, to the extent Buyer receives the benefits thereof. Seller
and Buyer shall cooperate with each other to take such actions, including
entering into services agreements or similar arrangements, as are reasonably
calculated to effectuate the intent of the preceding sentence.
2.9 STOCK PURCHASE AGREEMENTS
For regulatory purposes only, Seller, Xxxxx X. Xxxxx and Buyer shall
enter into the Stock Purchase Agreements attached as Exhibit H hereto regarding
the sale of the Stock; provided, that the provisions of this Agreement shall
control in determining the respective rights and obligations of Seller and
Buyer.
2.10 INTERIM OPERATIONS
It is the intention of the parties that the results of operations of
the Division be for the account of Buyer from and after the Effective Time.
Within ten (10) days after the Closing Date, Seller shall deliver to Buyer a
report on (a) any cash received by Seller from and after the Effective Time to
the Closing Date with respect to operations of the Division, and (b) the amount
of cash disbursements of Seller with respect to the Division from and after the
Effective Time to the Closing Date. Concurrently with the delivery of such
report, Seller shall pay to Buyer the amount of any cash received by Seller from
and after the Effective Time to the Closing Date with respect to operations of
the Division in excess of the amount of cash disbursements of Seller with
respect to
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the Division from and after the Effective Time to the Closing Date, if any, or,
within five (5) days after receipt of such report, Buyer shall pay to Seller the
amount of cash disbursements of Seller with respect to the Division from and
after the Effective Time to the Closing Date in excess of any cash received by
Seller from and after the Effective Time to the Closing Date with respect to
operations of the Division, as applicable.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 ORGANIZATION AND GOOD STANDING
Seller is a corporation duly organized, validly existing and in good
standing under the laws of Ohio, with full corporate power and authority to
perform all its obligations under this Agreement. Seller is duly qualified to do
business as a foreign corporation and is in good standing under the laws of the
State of Texas.
3.2 ENFORCEABILITY; AUTHORITY; NO CONFLICT
(a) This Agreement constitutes the legal, valid and binding obligation
of Seller, enforceable in accordance with its terms. Upon the execution and
delivery by Seller of each other agreement to be executed or delivered by Seller
at the Closing (collectively, the "Seller's Closing Documents"), each of
Seller's Closing Documents will constitute the legal, valid and binding
obligation of Seller, enforceable in accordance with its terms. Seller has the
absolute and unrestricted right, power and authority to execute and deliver this
Agreement and the Seller's Closing Documents and to perform its obligations
under this Agreement and the Seller's Closing Documents, and such action has
been duly authorized by all necessary action by Seller's shareholders and board
of directors.
(b) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated Transactions will,
directly or indirectly (with or without notice or lapse of time):
(i) Breach (A) any provision of any of the Governing Documents of
Seller or (B) any resolution adopted by the board of directors or the
shareholders of Seller;
(ii) Breach or give any Governmental Body or other Person the right
to challenge any of the Contemplated Transactions or to exercise any remedy or
obtain any relief under any Legal Requirement or any Order to which Seller or
any of the Assets may be subject; or
(iii) result in the imposition or creation of any Encumbrance upon
or with respect to any of the Assets.
3.3 CAPITALIZATION OF XXXXX
The issued and outstanding equity securities of Xxxxx consist of (a)
1,000 shares of 1,000 Mexican pesos par value Series A common stock (999 of
which are owned by Seller and one of which is owed by Xxxxx X. Xxxxx), (b)
19,794,801 shares of 1,000 Mexican pesos par value Series
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B common stock (all of which is owned by Seller), and (c) 1,508,248 shares of
1,000 Mexican pesos par value Series C common stock (all of which is owned by
Seller). The Stock is held beneficially by Seller and will be conveyed by Seller
and Xxxxx X. Xxxxx to Buyer free and clear of all Encumbrances. No Person other
than Seller and Xxxxx X. Xxxxx has or claims any interest in any equity
securities or other securities of Xxxxx. There are no Contracts relating to the
issuance, sale or transfer of any equity securities or other securities of
Xxxxx. None of the Stock was issued in violation of the Securities Act, or any
other Legal Requirement.
3.4 CONDITION OF ASSETS
All Tangible Personal Property is in good operating condition, ordinary
wear and tear excepted.
3.5 TITLE TO ASSETS; ENCUMBRANCES
Seller owns good and transferable title to all of the Assets free and
clear of any Encumbrances other than Permitted Encumbrances.
3.6 ACCOUNTS RECEIVABLE
Exhibit I contains a complete and accurate list of all Accounts
Receivable as of November, 2001, which list sets forth the aging of each such
Account Receivable. All Accounts Receivable that are reflected on Exhibit I or
on the accounting Records of Seller as of November 30, 2001 represent or will
represent valid obligations arising from sales actually made or services
actually performed by Seller in the Ordinary Course of Business.
3.7 REPRESENTATIONS AND WARRANTIES REGARDING XXXXX
(a) Xxxxx is a corporation duly organized, validly existing and in good
standing under the laws of Mexico, with full corporate power and authority to
conduct its business as it is now being conducted, to own or use the properties
and assets that it purports to own or use, and to perform all its obligations.
Xxxxx is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction to which it is subject.
(b) Complete and accurate copies of the Governing Documents of Xxxxx
have been delivered to Buyer.
(c) Xxxxx has paid all Taxes required to be paid and has filed all Tax
Returns required to be filed.
(d) Xxxxx is in full compliance with each Legal Requirement that is
applicable to it or to the conduct or operation of its business or the ownership
or use of its assets.
(e) Xxxxx owns good and marketable title to its assets free of any
Encumbrances other than Permitted Encumbrances.
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(f) There is no pending or, to Seller's Knowledge, threatened
Proceeding to which Xxxxx is a party or which otherwise affects or relates to
the business or assets of Xxxxx.
3.8 BROKERS OR FINDERS
Other than to Xxxxx & Associates, LLC, Seller has not incurred any
obligation or liability, contingent or otherwise, for brokerage or finders' fees
or agents' commissions or other similar payments in connection with the sale of
the Division or the Assets or the Contemplated Transactions.
4. Representations and Warranties of Buyer
Buyer represents and warrants to Seller as follows:
4.1 ORGANIZATION AND GOOD STANDING
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Tennessee, with full corporate power and
authority to conduct its business as it is now conducted.
4.2 AUTHORITY; NO CONFLICT
(a) This Agreement constitutes the legal, valid and binding obligation
of Buyer, enforceable against Buyer in accordance with its terms. Upon the
execution and delivery by Buyer of each other agreement to be executed or
delivered by Buyer at Closing (collectively, the "Buyer's Closing Documents"),
each of the Buyer's Closing Documents will constitute the legal, valid and
binding obligation of Buyer, enforceable against Buyer in accordance with its
respective terms. Buyer has the absolute and unrestricted right, power and
authority to execute and deliver this Agreement and the Buyer's Closing
Documents and to perform its obligations under this Agreement and the Buyer's
Closing Documents, and such action has been duly authorized by all necessary
corporate action.
(b) Neither the execution and delivery of this Agreement by Buyer nor
the consummation or performance of any of the Contemplated Transactions by Buyer
will give any Person the right to prevent, delay or otherwise interfere with any
of the Contemplated Transactions pursuant to:
(i) any provision of Buyer's Governing Documents;
(ii) any resolution adopted by the board of directors or the
shareholders of Buyer;
(iii) any Legal Requirement or Order to which Buyer may be subject;
or
(iv) any Contract to which Buyer is a party or by which Buyer may
be bound.
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Buyer is not and will not be required to obtain any Consent from any
Person in connection with the execution and delivery of this Agreement or the
consummation or performance of any of the Contemplated Transactions.
4.3 CERTAIN PROCEEDINGS
There is no pending Proceeding that has been commenced against Buyer
and that challenges, or may have the effect of preventing, delaying, making
illegal or otherwise interfering with, any of the Contemplated Transactions. To
Buyer's Knowledge, no such Proceeding has been threatened.
4.4 BROKERS OR FINDERS
Neither Buyer nor any of its Representatives have incurred any
obligation or liability, contingent or otherwise, for brokerage or finders' fees
or agents' commissions or other similar payment in connection with the
Contemplated Transactions.
5. Additional Covenants
5.1 EMPLOYEES AND EMPLOYEE BENEFITS
(a) Information on Active Employees. For the purpose of this Agreement,
the term "Active Employees" shall mean all employees of the Division employed on
the Closing Date by Seller who are:
(i) currently covered by that certain Agreement dated December
11, 2000 (the "Union Agreement") between Seller and the International Union of
Operating Engineers, Local Union No. 351 (the "Bargaining Unit Employees"); or
(ii) employed exclusively in the business of the Division as
currently conducted, including employees on temporary leave of absence,
including family medical leave, military leave, temporary disability or sick
leave, but excluding employees on long-term disability leave.
(b) Employment of Active Employees by Buyer.
(i) Effective as of the day following the Closing Date, Buyer
shall extend an offer of employment, based on current wages and benefits as
provided under the Union Agreement, to all Bargaining Unit Employees. Other than
the foregoing, Buyer is not obligated to hire any Active Employee but may
interview all Active Employees. At or before the Closing, Buyer will provide
Seller with a list of Active Employees that Buyer intends to hire (the "Hired
Active Employees").
(ii) Neither Seller nor its Related Persons shall solicit (other
than through public media) the employment of any Hired Active Employee actually
hired by Buyer after the Closing.
(iii) It is understood and agreed that (A) Buyer's expressed
intention to extend offers of employment as set forth in this section shall not
constitute any commitment, Contract or understanding (expressed or implied) of
any obligation on the part of Buyer to a post-Closing
22
employment relationship of any fixed term or duration or upon any terms or
conditions other than those that Buyer may establish pursuant to individual
offers of employment, and (B) employment offered by Buyer is "at will" and may
be terminated by Buyer or by an employee at any time for any reason (subject to
the terms of the Union Agreement or any other written commitments to the
contrary made by Buyer or an employee and Legal Requirements). Nothing in this
Agreement shall be deemed to prevent or restrict in any way the right of Buyer
to terminate, reassign, promote or demote any of the Hired Active Employees
after the Closing or to change adversely or favorably the title, powers, duties,
responsibilities, functions, locations, salaries, other compensation or terms or
conditions of employment of such employees.
(c) Salaries and Benefits.
(i) Seller shall be responsible for (A) the payment of all wages
and other remuneration due to Active Employees with respect to their services as
employees of Seller through the close of business on the Closing Date, including
pro rata bonus payments and all vacation pay earned prior to the Closing Date
(other than to the extent such amounts are assumed by Buyer as provided in
Section 2.4(a)(i)); (B) the payment of any termination or severance payments and
the provision of health plan continuation coverage in accordance with the
requirements of COBRA and Sections 601 through 608 of ERISA; and (C) any and all
payments to employees required under the WARN Act (other than to the extent such
amounts are assumed by Buyer as provided in Section 2.4(a)(v)).
(ii) Seller shall be liable for any claims made or incurred by
Active Employees and their beneficiaries through the Closing Date under the
Employee Plans (other than to the extent such amounts are assumed by Buyer as
provided in Section 2.4(a)(i)). For purposes of the immediately preceding
sentence, a charge will be deemed incurred, in the case of hospital, medical or
dental benefits, when the services that are the subject of the charge are
performed and, in the case of other benefits (such as disability or life
insurance), when an event has occurred or when a condition has been diagnosed
that entitles the employee to the benefit.
(d) No Transfer of Assets. Neither Seller nor its respective Related
Persons will make any transfer of pension or other employee benefit plan assets
to Buyer.
(e) Collective Bargaining Matters. Subject to the provisions of the
following sentence, Buyer will set its own initial terms and conditions of
employment for the Hired Active Employees and others it may hire, including work
rules, benefits and salary and wage structure, all as permitted by law. Subject
to the delivery of any required Consents, Seller shall assign to Buyer and Buyer
shall assume and perform the obligations of Seller under the terms of the Union
Agreement. Any bargaining obligations of Buyer under the terms of the Union
Agreement or with any other union with respect to bargaining unit employees
subsequent to the Closing, whether such obligations arise before or after the
Closing, shall be the sole responsibility of Buyer.
(f) General Employee Provisions.
(i) Seller and Buyer shall give any notices required by Legal
Requirements and take whatever other actions with respect to the plans, programs
and policies described in this Section 5.1 as may be necessary to carry out the
arrangements described in this Section 5.1.
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(ii) If any of the arrangements described in this Section 5.1 are
determined by the IRS or other Governmental Body to be prohibited by law, Seller
and Buyer shall modify such arrangements to as closely as possible reflect their
expressed intent and retain the allocation of economic benefits and burdens to
the parties contemplated herein in a manner that is not prohibited by law.
(iii) Seller shall provide Buyer with completed I-9 forms and
attachments with respect to all Hired Active Employees, except for such
employees as Seller certifies in writing to Buyer are exempt from such
requirement.
(iv) Buyer shall not have any responsibility, liability or
obligation, whether to Active Employees, former employees, their beneficiaries
or to any other Person, with respect to any Employee Plans, practices, programs
or arrangements (including the establishment, operation or termination thereof
and the notification and provision of COBRA coverage extension) maintained by
Seller (other than to the extent such amounts are assumed by Buyer as provided
in Section 2.4(a)(i)).
5.2 PAYMENT OF RETAINED LIABILITIES
Seller shall pay, or make adequate provision for the payment, in full
all of the Retained Liabilities and other Liabilities of Seller under this
Agreement. If any claims for allegedly defective products sold prior to the
Effective Time arise which are not Assumed Liabilities ("Retained Warranty
Claims"), then Buyer shall promptly notify Seller. Seller shall be entitled to
control the response to any such Retained Warranty Claims. Buyer agrees to sell
to Seller from time to time as requested by Seller such parts or components as
Seller may require in connection with any Retained Warranty Claims at a price
equal to Buyer's actual direct costs for labor, materials and freight incurred
in supplying such parts or components.
5.3 ASSISTANCE IN PROCEEDINGS
Each of Seller and Buyer will cooperate with one another and their
respective counsel in the contest or defense of, and make available its
personnel and provide any testimony and access to its books and Records in
connection with, any Proceeding involving or relating to (a) any Contemplated
Transaction or (b) any action, activity, circumstance, condition, conduct,
event, fact, failure to act, incident, occurrence, plan, practice, situation,
status or transaction on or before the Closing Date involving Seller or the
business of the Division.
5.4 NONCOMPETITION AND NONSOLICITATION
(a) Noncompetition. For a period of five (5) years after the Closing
Date, Seller shall not, anywhere in the world, directly or indirectly through a
Related Person, sell, market or distribute (i) wheel tractor scrapers, other
earth scrapers or rough terrain lift trucks (collectively, "Competitive
Products") or (ii) repair or replacement parts for Competitive Products ("Spare
Parts")(collectively, "Competing Business"); provided, however, that Seller may
manufacture and sell parts that are incorporated by others into assemblies or
components that are Spare Parts. Seller shall be deemed not to be in violation
of this Section 5.4(a) in the event that it (1) is acquired by a
24
Person that is engaged directly or through a Related Person in a Competing
Business, or (2) acquires a Person engaged directly or through a Related Person
in a Competing Business.
(b) Nonsolicitation. For a period of five (5) years after the Closing
Date, Seller shall not intentionally cause, induce or attempt to cause or induce
any customer or supplier of the Division to cease doing business with Buyer with
respect to Competitive Products or Spare Parts.
(c) Modification of Covenant. If a final judgment of a court or
tribunal of competent jurisdiction determines that any term or provision
contained in Section 5.4(a) and (b) is invalid or unenforceable, then the
parties agree that the court or tribunal will have the power to reduce the
scope, duration or geographic area of the term or provision, to delete specific
words or phrases or to replace any invalid or unenforceable term or provision
with a term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision. This
Section 5.4 is reasonable and necessary to protect and preserve Buyer's
legitimate business interests and the value of the Assets and to prevent any
unfair advantage conferred on Seller.
5.5 RETENTION OF AND ACCESS TO RECORDS
After the Closing Date, Buyer shall retain for a period of five years
those Records of Seller delivered to Buyer. Buyer also shall provide Seller and
its Representatives reasonable access thereto, during normal business hours and
on at least three days' prior written notice, to enable them to prepare
financial statements or tax returns or deal with tax audits or other reasonable
business purposes. After the Closing Date, Seller shall provide Buyer and its
Representatives reasonable access to Records that are Excluded Assets, during
normal business hours and on at least three days' prior written notice, for any
reasonable business purpose specified by Buyer in such notice. Seller will
retain those Records that are Excludable Assets for a period of five years or
the period of time required by law as if Seller were still the owner of the
Assets, whichever is greater.
5.6 POST CLOSING USE OF NAME; WEB LINKS; EMAIL
(a) After the Closing Date, Buyer may, notwithstanding the provisions
of Section 2.2(d), market and sell any item of Inventory marked with or
displaying in any manner the name "Eagle-Picher." In addition, Buyer may, for a
period of one year following the Closing Date, indicate in correspondence and
communications with customers and the general public that its business was
formerly operated under the name "Eagle-Picher."
(b) For a period of one year following the Closing Date, Seller shall
insert and maintain on any Internet web site that it sponsors or maintains
appropriate hyperlinks providing users of such web sites direct access to the
Internet web site of Buyer in the event that information concerning the business
or products of the Division is desired by any such user.
(c) Seller will reasonably cooperate with Buyer to allow the Division
to send and receive email and access the internet through Seller's internal
computer network for a period of six months following the Closing Date;
provided, however, that Seller shall not be liable for any failure to provide
such transitional services.
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5.7 COLLECTION OF EXCLUDED ACCOUNTS RECEIVABLE
After the Closing Date, Buyer shall use its Best Efforts to assist
Seller in the collection of the Excluded Accounts Receivable. Buyer shall
provide access to Seller during normal business hours to any Records of Buyer
that relate to the Excluded Accounts Receivable, and Seller may, at its expense,
make copies of such Records. Buyer shall have no obligation to initiate or
maintain any Proceeding to collect any of the Excluded Accounts Receivable or
otherwise incur any out-of-pocket costs, but Buyer shall cooperate with Seller
regarding any Proceeding Seller may initiate. Buyer shall promptly remit to
Seller the proceeds of any Excluded Accounts Receivable actually received by
Buyer. Collections received by Buyer from an account debtor shall be applied to
a specific invoice if indicated by the account debtor, after inquiry from Buyer
if no such indication is initially provided, or otherwise to the oldest account
receivable of such account debtor (other than any account receivable expressly
disputed by such account debtor).
5.8 PAYROLL PAYMENT PROCEDURES
(a) Seller will process and deliver checks to Buyer on December 21,
2001 for Buyer's payroll per instructions from Buyer no later than 2:00 pm
December 20, 2001, provided that Buyer shall have wire transferred an amount of
immediately available funds equal to the "Buyer Payment" (as defined below) to a
bank account designated by Seller no later than December 20, 2001. As used
herein, the term "Buyer Payment" shall mean the total amount of the payroll
referenced above, including all payroll taxes, less the amount of the Accrued
Shutdown Payroll.
(b) Seller shall be an independent contractor for Buyer in performing
the payroll processing services referred to in subsection (a) above. Buyer
acknowledges and agrees that all persons receiving payroll checks pursuant to
subsection (a) above are employees of Buyer. Buyer shall indemnify and hold
Seller harmless from any and all claims, liabilities, obligations, damages or
expenses (including attorney's fees) of any kind whatsoever arising out of or
relating to any claim by any employee of Buyer in connection with the foregoing.
5.9 FURTHER ASSURANCES
The parties shall cooperate reasonably with each other and with their
respective Representatives in connection with any steps required to be taken as
part of their respective obligations under this Agreement, and shall (a) furnish
upon request to each other such further information; (b) execute and deliver to
each other such other documents; and (c) do such other acts and things, all as
the other party may reasonably request for the purpose of carrying out the
intent of this Agreement and the Contemplated Transactions.
6. Indemnification; Remedies
6.1 SURVIVAL
All representations, warranties, covenants and obligations in Agreement
shall survive the Closing and the consummation of the Contemplated Transactions,
subject to Section 6.7. Except as provided in Section 6.5, the right to
indemnification, reimbursement or other remedy based upon
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such representations, warranties, covenants and obligations shall not be
affected by any investigation (including any environmental investigation or
assessment) conducted with respect to, or any Knowledge acquired (or capable of
being acquired) at any time, whether before or after the execution and delivery
of this Agreement or the Closing Date, with respect to the accuracy or
inaccuracy of or compliance with any such representation, warranty, covenant or
obligation. The waiver of any condition based upon the accuracy of any
representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification,
reimbursement or other remedy based upon such representations, warranties,
covenants and obligations.
6.2 INDEMNIFICATION AND REIMBURSEMENT BY SELLER
Seller will indemnify and hold harmless Buyer, and its Representatives,
shareholders, subsidiaries and Related Persons (collectively, the "Buyer
Indemnified Persons"), and will reimburse the Buyer Indemnified Persons for any
actual, direct, out-of-pocket loss, liability, claim, damage, expense, fines and
penalties (including costs of investigation and defense and reasonable
attorneys' fees and expenses), whether or not involving a Third-Party Claim
(collectively, "Damages"), arising from or in connection with:
(a) any Breach of any representation or warranty made by Seller in this
Agreement or in any transfer instrument delivered by Seller pursuant to this
Agreement;
(b) any Breach of any covenant or obligation of Seller in this
Agreement or in any transfer instrument delivered by Seller pursuant to this
Agreement;
(c) any brokerage or finder's fees or commissions or similar payments
based upon any agreement or understanding made, or alleged to have been made, by
any Person with Seller (or any Person acting on its behalf) in connection with
any of the Contemplated Transactions;
(d) any noncompliance with any bulk sales laws or fraudulent transfer
law in respect of the Contemplated Transactions;
(e) any Employee Plan established or maintained by Seller;
(f) any Retained Liabilities; or
(g) any Liabilities of Xxxxx arising or accruing prior to the Closing
Date, other than (i) Xxxxx Accounts Payable, (ii) Xxxxx Accrued Liabilities,
(iii) any Liability to customers or suppliers of Xxxxx incurred by Xxxxx in the
Ordinary Course of Business for orders outstanding as of the Effective Time
reflected on the books of Xxxxx (other than any Liability arising out of or
relating to a Breach that occurred prior to the Effective Time); and (iv) any
Liability to customers of the Division under warranties in the forms disclosed
in Exhibit F given by Xxxxx to customers in the Ordinary Course of Business
prior to the Effective Time (other than any Liability arising out of or relating
to a Breach that occurred prior to the Effective Time).
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6.3 INDEMNIFICATION AND REIMBURSEMENT BY SELLER--ENVIRONMENTAL MATTERS
(a) In addition to the other indemnification provisions in this Article
6, Seller will indemnify and hold harmless Buyer and the other Buyer Indemnified
Persons, and will reimburse Buyer and the other Buyer Indemnified Persons, for
any Damages (including costs of investigation, cleanup, containment or other
remediation, including those recoverable under the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. ss.9601 et seq.) and the
Texas Solid Waste Disposal Act (Tex. Health & Safety Code ss.361 et seq.) and
those based on strict liability and negligence arising from or in connection
with:
(i) any Environmental, Health and Safety Liabilities arising out
of or relating to: (i) the ownership or operation of any of the Facilities,
Assets or the business of Seller, or any of the facilities, assets or the
business of Xxxxx by any Person at any time on or prior to the Closing Date, or
(ii) any Hazardous Materials or other contaminants that were present on the
Facilities or Assets or the facilities of Xxxxx at any time on or prior to the
Closing Date;
(ii) any bodily injury (including illness, disability and death,
regardless of when any such bodily injury occurred, was incurred or manifested
itself), personal injury, property damage (including trespass, nuisance,
wrongful eviction and deprivation of the use of real property) or other damage
of or to any Person, property, or any Assets in any way arising from or
allegedly arising from any Hazardous Activity conducted by any Person with
respect to the business of Seller or the Assets or the business of Xxxxx prior
to the Closing Date or from any Hazardous Material that was (1) present or
suspected to be present on or before the Closing Date on or at the Facilities or
the facilities of Xxxxx (or present or suspected to be present on any other
property, if such Hazardous Material emanated or allegedly emanated from any
Facility or any facility of Xxxxx and was present or suspected to be present on
any Facility or any facility of Xxxxx, on or prior to the Closing Date), or (2)
Released or allegedly Released by any Person on or at any Facilities or Assets
or any facility of Xxxxx at any time on or prior to the Closing Date; and
(iii) the failure of Seller to have had prior to the Closing Date
all applicable permits required to conduct its business (including but not
limited to a Title V air permit and any permit relating to any underground
storage tank).
(b) Notwithstanding anything in this Section 6.3 to the contrary,
Seller shall be required to indemnify Buyer and other Buyer Indemnified Persons
with respect to any Remedial Action covered under this Section 6.3 only if such
Remedial Action is required by a non-appealable Proceeding initiated by a Person
other than Buyer or its Related Persons.
(c) Seller is responsible for any contamination at any of the
Facilities or any of the facilities of Xxxxx existing as of the Closing Date,
and, in particular, in dealing with the contamination identified by VERTEX
Engineering Services, Inc. in its report dated November 29, 2001 ("Known
Contamination"). Seller will be entitled to control any Remedial Action for
which Buyer is entitled to indemnification. For any Remedial Action conducted by
Seller, Seller will use commercially reasonable efforts to conduct its
activities in such a manner as to not unreasonably interfere with the business
operations of Buyer. Seller will not be responsible to Buyer for any
consequential damages caused by Seller's unreasonable interference with Buyer's
business,
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provided that Seller acts in accordance with the foregoing standard or
in accordance with procedures agreed upon with Buyer. Seller will keep Buyer
informed of the progress of any such Remedial Action and allow Buyer to attend
any meetings with regulatory agencies regarding the Remedial Action.
(d) Seller's indemnification and reimbursement obligations under this
Section 6.3 shall terminate and be of no further force and effect with respect
to any Facility upon the purchase by Buyer or any of Buyer's Related Persons of
such Facility.
(e) With respect to any Remedial Action that is covered by this
indemnification, clean up standards shall be no more stringent than: (i) one of
the following, as selected by Seller (1) the least stringent risk based, health
based, numeric or generic cleanup standards contained in 30 T.A.C., Chapter 350
(Risk Reduction Program) (or similar program enacted to replace or supplement
the Risk Reduction Program) applicable to either "nonresidential property," as
defined therein, or industrial use of the Facilities, or (2) the least stringent
cleanup standards permitted by other applicable Environmental Laws; or (ii)
those required by a non-appealable Proceeding or subsequent agreement reached
with the appropriate Governmental Body. Compliance with the applicable cleanup
standards shall be determined without the imposition of institutional controls
or other activity and use limitations other than (A) a restriction prohibiting
the use of groundwater for drinking water, (B) a restriction limiting the future
use of property to commercial/industrial land use, and/or (C) institutional
controls that require no more than a de minimis annual out-of-pocket expense and
do not unreasonably interfere with the use of the property for
commercial/industrial uses.
(f) Buyer covenants and agrees with Seller that, except as required in
accordance with any Legal Requirement or as compelled by any Proceeding, Buyer
will not voluntarily undertake any Remedial Action without the prior written
consent of Seller. To the extent that Buyer voluntarily undertakes any Remedial
Action for which Seller's consent is required hereunder without first obtaining
such consent from Seller, Seller shall not be required to reimburse Buyer for
the cost of such Remedial Action. Buyer agrees that it will not initiate,
directly or indirectly, contact with a Governmental Body or other parties with
potential claims against Seller regarding Environmental Health and Safety
Liabilities of Seller or the pre-Closing presence of Hazardous Materials on or
at the Facilities, unless Buyer believes, in good faith and after consultation
with counsel and discussion with Seller, that such contact is required by
Environmental Laws.
6.4 INDEMNIFICATION AND REIMBURSEMENT BY BUYER
Buyer will indemnify and hold harmless Seller, and will reimburse
Seller, for any Damages arising from or in connection with:
(a) any Breach of any representation or warranty made by Buyer in this
Agreement or in any transfer instrument delivered by Buyer pursuant to this
Agreement;
(b) any Breach of any covenant or obligation of Buyer in this Agreement
or in any transfer instrument delivered by Buyer pursuant to this Agreement;
29
(c) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by such Person with Buyer (or any Person acting on
Buyer's behalf) in connection with any of the Contemplated Transactions;
(d) any obligations of Buyer with respect to bargaining with the
collective bargaining representatives of Active Hired Employees subsequent to
the Closing; or
(e) any Assumed Liabilities.
6.5 LIMITATIONS ON AMOUNT--SELLER
Seller shall have no liability (for indemnification or otherwise) with
respect to claims under Section 6.2(a) until the total of all Damages with
respect to such matters exceeds $130,000.00 and then only for the amount by
which such Damages exceed $130,000.00. However, this Section 6.5 will not apply
to claims under Section 6.2(b) through (g) or to any Breach of any of Seller's
representations and warranties of which the Seller had Knowledge at any time
prior to the date on which such representation and warranty is made or any
intentional Breach by Seller of any covenant or obligation, and Seller will be
liable for all Damages with respect to such Breaches. Seller shall have no
liability (for indemnification or otherwise) with respect to (a) any claim of
Buyer for incidental or consequential damages incurred by it (other than
incidental or consequential damages asserted against Buyer by a Third Party) or
(b) any claim under Section 6.2 or 6.3 after the amount of Damages actually paid
by Seller is equal to the Purchase Price. Seller shall have no liability (for
indemnification or otherwise) with respect to any claim arising under Section
6.2(a) the subject matter of which Buyer had Knowledge prior to the Closing
Date. The limitations of this Section 6.5 do not apply to (i) any Remedial
Action conducted by Seller, (ii) any Remedial Action with respect to Known
Contamination, and (iii) any Liabilities or Damages associated with the failure
of Seller to have all permits required to conduct its business.
6.6 LIMITATIONS ON AMOUNT--BUYER
Buyer will have no liability (for indemnification or otherwise) with
respect to claims under Section 6.4(a) until the total of all Damages with
respect to such matters exceeds $25,000.00 and then only for the amount by which
such Damages exceed $25,000.00. However, this Section 6.6 will not apply to
claims under Section 6.4(b) through (e) or to any Breach of any of Buyer's
representations and warranties of which Buyer had Knowledge at any time prior to
the date on which such representation and warranty is made or any intentional
Breach by Buyer of any covenant or obligation, and Buyer will be liable for all
Damages with respect to such Breaches.
6.7 TIME LIMITATIONS
(a) Seller will have liability (for indemnification or otherwise) with
respect to any claim of Buyer under this Article 6 (except for a claim under
Section 6.3, which may be asserted at any time) only if on or before December 1,
2004, Buyer notifies Seller of such claim specifying the factual basis of the
claim in reasonable detail to the extent then known by Buyer.
30
(b) Buyer will have liability (for indemnification or otherwise) with
respect to any claim of Seller under this Article 6 only if on or before
December 1, 2004, Seller notifies Buyer of a claim specifying the factual basis
of the claim in reasonable detail to the extent then known by Seller.
6.8 THIRD-PARTY CLAIMS
(a) Promptly after receipt by a Person entitled to indemnity under
Section 6.2, 6.3 or 6.4 (an "Indemnified Person") of notice of the assertion of
a Third-Party Claim against it, such Indemnified Person shall give notice to the
Person obligated to indemnify under such Section (an "Indemnifying Person") of
the assertion of such Third-Party Claim, provided that the failure to notify the
Indemnifying Person will not relieve the Indemnifying Person of any liability
that it may have to any Indemnified Person, except to the extent that the
Indemnifying Person demonstrates that the defense of such Third-Party Claim is
prejudiced by the Indemnified Person's failure to give such notice.
(b) If an Indemnified Person gives notice to the Indemnifying Person
pursuant to Section 6.8(a) of the assertion of a Third-Party Claim, the
Indemnifying Person shall be entitled to participate in the defense of such
Third-Party Claim and, to the extent that it wishes (unless (i) the Indemnifying
Person is also a Person against whom the Third-Party Claim is made and the
Indemnified Person determines in good faith that joint representation would be
inappropriate or (ii) the Indemnifying Person fails to provide reasonable
assurance to the Indemnified Person of its financial capacity to defend such
Third-Party Claim and provide indemnification with respect to such Third-Party
Claim), to assume the defense of such Third-Party Claim with counsel of its
choice. After notice from the Indemnifying Person to the Indemnified Person of
its election to assume the defense of such Third-Party Claim, the Indemnifying
Person shall not, so long as it diligently conducts such defense, be liable to
the Indemnified Person under this Article 6 for any fees of other counsel or any
other expenses with respect to the defense of such Third-Party Claim. If the
Indemnifying Person assumes the defense of a Third-Party Claim, no compromise or
settlement of such Third-Party Claim may be effected by the Indemnifying Person
without the Indemnified Person's Consent unless (A) there is no finding or
admission of any violation of Legal Requirement or any violation of the rights
of any Person; (B) the sole relief provided is monetary damages that are paid in
full by the Indemnifying Person; and (C) the Indemnified Person shall have no
liability with respect to any compromise or settlement of such Third-Party Claim
effected without its Consent. If the Indemnifying Person assumes the defense of
a Third-Party Claim and the Indemnified Party thereafter settles or compromises
such Third Party claim without the Consent of the Indemnifying Party, or if the
Indemnified Party fails to reasonably cooperate with the Indemnifying Party in
good faith or takes actions that materially prejudice the Indemnifying Party's
ability to defend such Third-Party Claim, then the Indemnifying Party shall be
released from any and all liability or obligation with respect to such
Third-Party Claim. If notice is given to an Indemnifying Person of the assertion
of any Third-Party Claim and the Indemnifying Person does not, within ten (10)
days after the Indemnified Person's notice is given, give notice to the
Indemnified Person of its election to assume the defense of such Third-Party
Claim, the Indemnifying Person will be bound by any determination made in such
Third-Party Claim or any compromise or settlement effected by the Indemnified
Person.
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(c) With respect to any Third-Party Claim subject to indemnification
under this Article 6: (i) both the Indemnified Person and the Indemnifying
Person, as the case may be, shall keep the other Person fully informed of the
status of such Third-Party Claim and any related Proceedings at all stages
thereof where such Person is not represented by its own counsel, and (ii) the
parties agree (each at its own expense) to render to each other such assistance
as they may reasonably require of each other and to reasonably cooperate in good
faith with each other in order to ensure the proper and adequate defense of any
Third-Party Claim.
(d) With respect to any Third-Party Claim subject to indemnification
under this Article 6, the parties agree to cooperate in such a manner as to
preserve in full (to the extent possible) the confidentiality of all
Confidential Information and the attorney-client and work-product privileges. In
connection therewith, each party agrees that: (i) it will use its Best Efforts,
in respect of any Third-Party Claim in which it has assumed or participated in
the defense, to avoid production of Confidential Information (consistent with
applicable law and rules of procedure), and (ii) all communications between any
party hereto and counsel responsible for or participating in the defense of any
Third-Party Claim shall, to the extent possible, be made so as to preserve any
applicable attorney-client or work-product privilege.
6.9 OTHER CLAIMS
A claim for indemnification for any matter not involving a Third-Party
Claim may be asserted by notice from the Indemnified Person to the Indemnifying
Person, and such notice shall describe in reasonable particularity the basis
upon which indemnification is then being sought. For a period of ninety (90)
days following such notice, the Indemnified Party and the Indemnifying Party
shall work together in good faith to resolve such claim. Thereafter, either
party may exercise any right or remedy available at law or in equity.
6.10 TAX MATTERS
(a) Whenever any taxing authority sends a notice of an audit, initiates
an examination of Seller with regard to the Division or Xxxxx, or otherwise
asserts a claim, makes an assessment or disputes the amount of Taxes with regard
to the Division or Xxxxx for any taxable period for which Seller is or may be
liable, Buyer, when informed thereof, shall promptly inform Seller, and Seller
shall have the right to control any resulting proceedings and to determine
whether and when to settle any such claim, assessment or dispute. Buyer shall be
liable, and shall indemnify Seller, for any Tax imposed on Seller with respect
to the Assets or the Division or Xxxxx for any period after the Effective Time.
(b) Buyer and Seller will provide the other with such assistance as may
reasonably be requested by either of them in connection with the preparation of
any tax return, any audit or other examination by any taxing authority,
Proceedings relating to Taxes in connection with the Division or Xxxxx, and each
will retain and provide the other with any records or information which may be
relevant to such return, audit or examination, Proceedings or determination.
Such assistance shall include making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder, and shall include providing copies of any relevant
Tax Return and supporting work schedules. The party requesting assistance
hereunder shall reimburse the other for reasonable expenses incurred in
providing such assistance.
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(c) Without limiting in any way the foregoing provisions of this
Section 6.10, Buyer hereby agrees that it will retain copies of all Records or
information which may be relevant to the Tax Returns or obligations of Seller
with regard to the Division or Xxxxx for all taxable periods which include the
Effective Time, and that such Records and information shall be maintained for a
period of seven years. During said seven year period, Buyer will not destroy or
otherwise dispose of such Records or information without first providing Seller
with a reasonable opportunity to review and copy the same.
(d) Buyer shall provide Seller with a copy of the Tax Return to be
filed with Mexican taxing authorities for Xxxxx for the year ending December 31,
2001 at least ten (10) business days prior to filing such return. Seller shall
reimburse Buyer for 11/12ths of any Tax Liability actually paid by Xxxxx for the
year ending December 31, 2001, but only to the extent such Tax Liability has not
been taken into account in determining the Adjustment Amount.
6.11 EXCLUSIVE REMEDY
The right of the parties hereto to demand and receive indemnification
pursuant to this Section 6 shall be the sole and exclusive remedy exercisable by
a party with respect to any claim arising out of or relating to this Agreement
or the Contemplated Transactions. As of the Effective Time, Buyer waives and
forever releases Seller and each of Seller's affiliates from any and all claims
or causes of action, known or unknown, now existing or hereafter arising, other
than claims or causes of action available under this Article 6.
7. General Provisions
7.1 EXPENSES
Except as otherwise provided in this Agreement, each party to this
Agreement will bear its respective fees and expenses incurred in connection with
the preparation, negotiation, execution and performance of this Agreement and
the Contemplated Transactions, including all fees and expense of its
Representatives. Seller will pay all amounts payable to the Title Insurer in
respect of the Title Commitments, copies of exceptions and the Title Policy,
including premiums (including premiums for endorsements) and search fees. If
this Agreement is terminated, the obligation of each party to pay its own fees
and expenses will be subject to any rights of such party arising from a Breach
of this Agreement by another party.
7.2 PUBLIC ANNOUNCEMENTS
Any public announcement, press release or similar publicity with
respect to this Agreement or the Contemplated Transactions will be issued, if at
all, at such time and in such manner as Buyer and Seller mutually determine.
Except with the prior consent of Buyer or as permitted by this Agreement,
neither Seller nor any of its Representatives shall disclose to any Person (a)
the fact that any Confidential Information of Seller has been disclosed to Buyer
or its Representatives, that Buyer or its Representatives have inspected any
portion of the Confidential Information of Seller, that any Confidential
Information of Buyer has been disclosed to Seller or its Representatives or that
Seller or its Representatives have inspected any portion of the Confidential
Information of Buyer or (b) any information about the Contemplated Transactions,
including the status of such
33
discussions or negotiations, the execution of any documents (including this
Agreement) or any of the terms of the Contemplated Transactions or the related
documents (including this Agreement). Seller and Buyer will consult with each
other concerning the means by which Seller's employees, customers, suppliers and
others having dealings with Seller will be informed of the Contemplated
Transactions, and Buyer will have the right to be present for any such
communication.
7.3 NOTICES
All notices, Consents, waivers and other communications required or
permitted by this Agreement shall be in writing and shall be deemed given to a
party when (a) delivered to the appropriate address by hand or by nationally
recognized overnight courier service (costs prepaid); (b) sent by facsimile or
e-mail with confirmation of transmission by the transmitting equipment; or (c)
received or rejected by the addressee, if sent by certified mail, return receipt
requested, in each case to the following addresses, facsimile numbers or e-mail
addresses and marked to the attention of the person (by name or title)
designated below (or to such other address, facsimile number, e-mail address or
person as a party may designate by notice to the other parties):
Seller:
Eagle-Picher Industries, Inc.
000 Xxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: General Counsel
Fax no.: 000-000-0000
E-mail address: xxxxx.xxxxx@xxxxxx.xxx
with a mandatory copy to:
Squire, Xxxxxxx & Xxxxxxx, LLP
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Fax no.: 000-000-0000
E-mail address: xxxxxx@xxx.xxx
Buyer:
Construction Equipment Direct, Inc.
000 Xxxx Xxx
Xxxxx Xxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Fax no.: _____________________
E-mail address: xxxxxxx@xxxxx.xxx and xxxxxxx000@xxx.xxx
---
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with a mandatory copy to:
Xxxxxx & Xxxxxxxx, PLLC
1800 SunTrust Center
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx, Esq.
Fax no.: 000-000-0000
E-mail address: xxxxxxx.xxxxxxxx@xxxxxx.xxx
7.4 WAIVER; REMEDIES CUMULATIVE
The rights and remedies of the parties to this Agreement are cumulative
and not alternative. Neither any failure nor any delay by any party in
exercising any right, power or privilege under this Agreement or any of the
documents referred to in this Agreement will operate as a waiver of such right,
power or privilege, and no single or partial exercise of any such right, power
or privilege will preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege. To the maximum
extent permitted by applicable law, (a) no claim or right arising out of this
Agreement or any of the documents referred to in this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (b) no waiver that
may be given by a party will be applicable except in the specific instance for
which it is given; and (c) no notice to or demand on one party will be deemed to
be a waiver of any obligation of that party or of the right of the party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this Agreement.
7.5 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements, whether written or
oral, between the parties with respect to its subject matter (including any
letter of intent and any confidentiality agreement between Buyer and Seller) and
constitutes (along with the Exhibits and other documents delivered pursuant to
this Agreement) a complete and exclusive statement of the terms of the agreement
between the parties with respect to its subject matter. This Agreement may not
be amended, supplemented, or otherwise modified except by a written agreement
executed by the party to be charged with the amendment.
7.6 ASSIGNMENTS, SUCCESSORS AND NO THIRD-PARTY RIGHTS
No party may assign any of its rights or delegate any of its
obligations under this Agreement without the prior written consent of the other
parties, except that Buyer may collaterally assign its rights hereunder to any
financial institution providing financing in connection with the Contemplated
Transactions. Subject to the preceding sentence, this Agreement will apply to,
be binding in all respects upon and inure to the benefit of the successors and
permitted assigns of the parties. Nothing expressed or referred to in this
Agreement will be construed to give any Person other than the parties to this
Agreement any legal or equitable right, remedy or claim under or with respect to
this Agreement or any provision of this Agreement, except such rights as shall
inure to a successor or permitted assignee pursuant to this Section 7.6.
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7.7 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
7.8 CONSTRUCTION
The headings of Articles and Sections in this Agreement are provided
for convenience only and will not affect its construction or interpretation. All
references to "Articles," "Sections" and "Parts" refer to the corresponding
Articles, Sections and Parts of this Agreement.
7.9 TIME OF ESSENCE
With regard to all dates and time periods set forth or referred to in
this Agreement, time is of the essence.
7.10 GOVERNING LAW
This Agreement will be governed by and construed under the laws of the
State of Ohio without regard to conflicts-of-laws principles that would require
the application of any other law.
7.11 EXECUTION OF AGREEMENT
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.
The exchange of copies of this Agreement and of signature pages by facsimile
transmission shall constitute effective execution and delivery of this Agreement
as to the parties and may be used in lieu of the original Agreement for all
purposes. Signatures of the parties transmitted by facsimile shall be deemed to
be their original signatures for all purposes.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
CONSTRUCTION EQUIPMENT DIRECT, INC.
By:
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Title:
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EAGLE-PICHER INDUSTRIES, INC.
By:
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Title:
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Exhibits and schedules will be provided supplementally to the Commission upon
request.
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