ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is entered into as of
February 10, 1998 by and among Autocraft Industries, Inc., an Oklahoma
corporation ("Seller"), Xxxx Xxxxx Industries A Limited Partnership, a Texas
limited partnership ("Stockholder"), and Aftermarket Technology Corp., a
Delaware corporation ("Buyer").
R E C I T A L S
A. Seller's OEM Division is engaged in, among other thing, (i) the
remanufacture of transmissions and related drivetrain components for Ford Motor
Company and General Motors Corporation, (ii) the remanufacture of electronic
control modules, instrument display clusters, telephones and radios for certain
original equipment manufacturers, (iii) the remanufacture of engines for certain
original equipment manufacturers in Europe, (iv) the distribution of cellular
telephones for AT&T Wireless, and (v) material recovery services for Ford Motor
Company (the "OEM Business," which term excludes Seller's operations that
(x) participate in Ford's "FAR" program, (y) remanufacture non-GM transmissions
for AC-Delco, or (z) are not part of the OEM Division);
B. Stockholder, together with the Principals (as defined below),
owns a majority of the issued and outstanding shares of the voting capital stock
of Seller; and
C. Buyer desires to purchase the OEM Business but not the other
businesses conducted by Seller and its subsidiaries, and Stockholder and Seller
desire to sell the OEM Business to Buyer on the terms and conditions set forth
herein.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual representations, warranties, covenants and agreements set forth below,
the parties hereto agree as follows.
ARTICLE I
DEFINITIONS
1.01 DEFINITIONS. The following terms, as used herein, have the
following meanings:
"ADL" means Automotive Developments Limited.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Act of 1934, as amended.
"APPLICABLE LAW" means, with respect to any Person, any domestic or
foreign, federal, state, provincial, territorial, county or local statute, law,
ordinance, rule, administrative interpretation, regulation, policy, guidance,
order, writ, injunction, directive, judgment, decree or
other requirement of any Governmental Authority (including any Environmental
Law) applicable to such Person or any of its properties, assets, officers,
directors, employees, consultants or agents (in connection with such officer's,
director's, employee's, consultant's or agent's activities on behalf of such
Person).
"ASSOCIATE" or "ASSOCIATED WITH" means, when used to indicate a
relationship with any Person, (i) any other Person of which such Person is an
officer or partner or is, directly or indirectly, the beneficial owner of 10% or
more of any class of equity securities issued by such other Person, (ii) any
trust or other estate in which such Person has a beneficial interest of more
than 50% or as to which such Person serves as trustee or in a similar fiduciary
capacity, and (iii) any parent, grandparent, aunt, uncle, sibling, child,
grandchild or spouse of such Person, or any relative of such spouse who has the
same home as such Person or who is a director or officer of such Person or any
Affiliate thereof.
"BENEFIT ARRANGEMENT" means any material benefit arrangement, other
than an Employee Benefit Plan, maintained by the Company or any ERISA Affiliate
of the Company covering present or former OEM Employees and the beneficiaries of
any of them, including, without limitation, the following to the extent that
they relate to present or former OEM Employees: (i) each material employment or
consulting agreement; (ii) each arrangement providing for material insurance
coverage for employees or workers' compensation benefits; (iii) each material
incentive bonus or deferred bonus arrangement; (iv) each arrangement providing
material termination allowance, severance or similar benefits; (v) each material
equity compensation plan; (vi) each material deferred compensation plan; and
(vii) each material compensation policy and practice.
"BENEFIT PLAN" means an Employee Benefit Plan or Benefit Arrangement.
"BUSINESS DAY" means a day other than a Saturday, Sunday or other day
on which commercial banks in Chicago, Illinois are authorized or required by law
to close.
"BUYER ENVIRONMENTAL LIABILITY" means Environmental Liabilities
arising as a result of the actions of Buyer, the U.K. Subsidiaries or the
Mexican Joint Venture after the Closing Date.
"COMPANY" for purposes of Article III means Seller and the Mexican
Joint Venture, individually and collectively. For all other purposes, the
"Company" means Seller, the U.K. Subsidiaries and the Mexican Joint Venture,
individually and collectively.
"CODE" means the Internal Revenue Code of 1986, as amended.
"DAMAGES" means, with respect to any Person, all assessments, losses,
damages, costs, expenses, liabilities, judgments, awards, fines, sanctions,
penalties, charges and amounts paid in settlement, net of insurance proceeds and
indemnification proceeds actually received, including without limitation,
(i) interest on cash disbursements made by such Person in respect of any of the
foregoing, at the Reference Rate in effect from time to time, from the date each
such cash disbursement is made until such Person shall have been indemnified in
respect thereof and
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(ii) reasonable costs, fees and expenses of attorneys, accountants and other
agents of such Person, but excluding any consequential, incidental or special
damages.
"EBITDA" has the meaning set forth in the Share Purchase Agreement.
"EMPLOYEE BENEFIT PLAN" means any employee benefit plan, as defined in
Section 3(3) of ERISA, that is sponsored or contributed to by the Company or any
ERISA Affiliate thereof covering present or former OEM Employees.
"EMPLOYEE PENSION BENEFIT PLAN" means any employee pension benefit
plan, as defined in Section 3(2) of ERISA, that is subject to Title IV of ERISA,
including a Multiemployer Plan.
"ENVIRONMENTAL LAWS" means all Applicable Laws relating to Hazardous
Substances, occupational health and safety, or the environment including,
without limitation, (i) all Applicable Laws pertaining to reporting, licensing,
permitting, controlling, investigating or remediating emissions, discharges,
releases or threatened releases of Hazardous Substances, chemical substances,
pollutants, contaminants or toxic substances, materials or wastes, whether
solid, liquid or gaseous in nature, into the air, surface water, groundwater or
land, (ii) all Applicable Laws relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Substances, chemical substances, pollutants, contaminants or toxic
substances, materials or wastes, whether solid, liquid or gaseous in nature; and
(iii) the Resource Conservation and Recovery Act (RCRA), the Comprehensive
Environmental Response, Compensation and Liability Act (CERCLA), the Clean Air
Act, the Water Pollution Control Act, the Safe Drinking Water Act, the Toxic
Substance Control Act (TSCA), the Environmental Act of 1995 of England and Wales
and all requirements promulgated pursuant to any of these or analogous domestic
or foreign, federal, state, provincial, territorial, county or local statutes.
"ENVIRONMENTAL LIABILITIES" means Liabilities of a Person that arise
under any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" of any Person means any other Person that, together
with such Person as of the relevant measuring date under ERISA, was or is
required to be treated as a single employer under Section 414(b), (c), (m) or
(o) of the Code.
"GAAP" means generally accepted accounting principles in the
United States as in effect at the time the relevant financial statement is
prepared, applied on a consistent basis.
"GOVERNMENTAL AUTHORITY" means any foreign or domestic, federal,
territorial, state, provincial, county or local governmental authority,
quasi-governmental authority, instrumentality, court, government or
self-regulatory organization, commission, tribunal or
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organization or any regulatory, administrative or other agency, or any
political or other subdivision, department or branch of any of the foregoing.
"GROUP HEALTH PLAN" means any group health plan, as defined in
Section 5000(b)(1) of the Code.
"HAZARDOUS SUBSTANCE" means any substance or material (i) the presence
of which requires investigation or remediation under any Applicable Law,
(ii) the generation, storage, treatment, transportation, disposal, remediation,
removal, handling or management of which is regulated by any Environmental Law,
(iii) that is defined as a "hazardous waste" or "hazardous substance" under any
Applicable Law, (iv) that is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic or mutagenic or otherwise hazardous and is regulated
by any Governmental Authority having or asserting jurisdiction over the OEM
Business or the Company, (v) the presence of which constitutes a nuisance,
trespass or other tortious condition, or (vi) without limitation, that contains
gasoline, diesel fuel or other petroleum hydrocarbons, polychlorinated biphenols
(PCBs) or asbestos.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"INDEBTEDNESS" means all liabilities and obligations, contingent or
otherwise, of Seller (i) in respect of borrowed money, (ii) evidenced by bonds,
notes, debentures or similar instruments, (iii) representing the balance
deferred and unpaid of the purchase price of any property or services, other
than those incurred in the ordinary course of its business that constitute trade
payables to trade creditors but only to the extent that such trade payables
relate to the OEM Business, (iv) evidenced by a bankers' acceptance or similar
instrument issued or accepted by banks, (v) for the capitalized amount of a
lease that is required to be capitalized for financial reporting purposes in
accordance with GAAP, (vi) evidenced by a letter of credit or a reimbursement
obligation of Seller with respect to any letter of credit, and (vii) any of the
foregoing of another Person as to which Seller is a guarantor or otherwise
liable (except endorsements of customer checks in the ordinary course of
business). "Indebtedness" shall also include any interest on, or prepayment
penalty or redemption premium with respect to, any Indebtedness.
"INDEMNIFYING PARTY" means (i) Stockholder or Seller when any Buyer
Indemnitee is asserting a claim under Sections 9.01(a), or (ii) Buyer when any
Seller Indemnitee is asserting a claim under Sections 9.01(b).
"INDEMNITEE" means (i) each of Buyer and its Affiliates with respect
to any claim for which Stockholder and Seller are Indemnifying Parties under
Sections 9.01(a), or (ii) Seller and its Affiliates (including, without
limitation, Stockholder) with respect to claims for which Buyer is an
Indemnifying Party under Sections 9.01(b).
"IRS" means the Internal Revenue Service.
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"KNOWLEDGE" means, with respect to any Person that is a legal entity,
all things actually known, after due inquiry, by any director, executive
officer, trustee or general partner, as the case may be, of such Person. Due
inquiry with respect to a particular matter shall be satisfied if inquiry has
been made to those members of such Person's management whose job
responsibilities are such that they reasonably would be expected to have
information regarding such matter.
"LIABILITY" means, 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, liquidated or
unliquidated, secured or unsecured, joint or several, due or to become due,
vested or unvested, executory, determined, determinable or otherwise, whether or
not the same is required to be accrued on the financial statements of such
Person and whether or not the same is disclosed on any schedule to this
Agreement.
"LIEN" means, with respect to any asset, any mortgage, title defect or
objection, lien, pledge, charge, security interest, hypothecation, restriction,
encumbrance or charge of any kind in respect of such asset, but excluding liens
for taxes not yet due and payable.
"MATERIAL ADVERSE EFFECT" means a change in, or effect on, the
operations, affairs, prospects, financial condition, results of operations,
assets, Liabilities, reserves or any other aspect of the Company or the OEM
Business that results in a material adverse effect on, or a material adverse
change in, the Transferred Assets or the OEM Business taken as a whole.
"MATERIAL TITLE DEFECT" means any condition of title that will
materially interfere with Buyer's operation of a Transferred Asset in the manner
in which Seller has historically operated such asset. Without limiting the
generality of the foregoing, "Material Title Defect" shall include any of the
following to the extent that it will materially interfere with Buyer's operation
of a Transferred Asset in the manner in which Seller has historically operated
such asset: (i) lack of access to any Real Property for the benefit of Buyer,
(ii) material violations of zoning laws or regulations, (iii) zoning or building
restrictions, and (iv) easements, rights of way and servitudes for the benefit
of third Persons.
"MEXICAN JOINT VENTURE" means Xxxx Xxxxx de Mexico, S.R.L. de C.V.
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in
Section 3(37) and 4001(a)(3) of ERISA.
"OEM EMPLOYEE" means any employee of the Company or any of its
Affiliates or ERISA Affiliates who devotes substantially all of his or her
working time to the OEM Business.
"OUTSIDE DATE" means April 30, 1998; PROVIDED, HOWEVER, that the
"Outside Date" shall mean May 31, 1998 if by April 30, 1998 the parties have not
received clearance under the HSR Act (whether by termination or expiration of
the waiting period under the HSR Act or otherwise) to complete the transactions
contemplated by this Agreement.
"PERMITTED LIENS" means those Liens listed on SCHEDULE 1.01 hereto.
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"PERSON" means an individual, corporation, limited liability company,
partnership, association, trust, estate or other entity or organization,
including a Governmental Authority.
"PLAN AFFILIATE" means, with respect to any Person, any Benefit Plan
sponsored by, maintained by or contributed to by such Person, and with respect
to any Benefit Plan, any Person sponsoring, maintaining or contributing to such
Benefit Plan.
"PRINCIPALS" means Messrs. Xxxx X. Xxxx, Xxxxxx Xxxx, Jr. and Xxxxxxxx
Xxxx.
"PROHIBITED TRANSACTION" means a transaction that is prohibited under
Section 4975 of the Code or Section 406 of ERISA and not exempt under
Section 4975 of the Code or Section 408 of ERISA, respectively.
"PRORATION FACTOR" means the quotient of (i) EBITDA for the 12 months
ending December 31, 1998 minus L1,000,000 divided by (ii) L1,000,000, PROVIDED
that in no event shall the Proration Factor be less than 0.0 nor greater than
1.0.
"REFERENCE RATE" means the per annum rate of interest publicly
announced from time to time by The Chase Manhattan Bank as its prime rate (or
reference rate). Any change in the Reference Rate shall take effect at the
opening of business on the day specified in the public announcement of such
change.
"SHARE PURCHASE AGREEMENT" means that certain Share Purchase Agreement
dated 10 October 1997 among Seller and certain other parties, including the
former shareholders of ADL, pursuant to which Seller and U.K. Seller acquired
all the outstanding shares of the share capital of ADL.
"TAX" means all taxes imposed of any nature including foreign or
domestic, federal, state, provincial, territorial, county or local net income
tax, alternative or add-on minimum tax, profits or excess profits tax, franchise
tax, gross income, adjusted gross income or gross receipts tax, employment
related tax (including employee withholding or employer payroll tax, FICA or
FUTA), real or personal property tax or ad valorem tax, sales or use tax, excise
tax, stamp tax or duty, any withholding or back up withholding tax, value added
tax, severance tax, prohibited transaction tax, premiums tax, occupation tax,
together with any interest or any penalty, addition to tax or additional amount
imposed by any Governmental Authority responsible for the imposition of any such
tax.
"TAX RETURN" means all returns, reports, forms or other information
required to be filed with respect to any Tax.
"U.K. SELLER" means Autocraft Developments Limited, a wholly owned
subsidiary of Seller and the owner of a portion of the outstanding shares of the
share capital of ADL.
"U.K. SUBSIDIARIES" means ADL, Elbar Industrial Limited (a wholly
owned subsidiary of ADL), Elbar Industrial (Trading) Limited (a wholly owned
subsidiary of Elbar Industrial Limited), S.E.L.E. Europe Limited (a dormant
wholly owned subsidiary of Elbar
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Industrial Limited), and South East Lincs Engineering Limited (a dormant wholly
owned subsidiary of Elbar Industrial (Trading) Limited).
"VENDORS" has the meaning set forth in the Share Purchase Agreement.
"WARRANTORS" has the meaning set forth in the Share Purchase
Agreement.
1.02 ADDITIONAL DEFINED TERMS. The following terms are defined in the
Sections referred to below:
"1997 Balance Sheet" . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.08
"AAA Rules". . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 11.11(a)
"Absent OEM Employees. . . . . . . . . . . . . . . . . . . . . . . Section 7.08(a)(i)
"Accounts" . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 7.08(a)(ii)
"Agreement". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
"Assumed Liabilities". . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.03
"Buyer". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
"Buyer Indemnitees". . . . . . . . . . . . . . . . . . . . . . . . . .Section 9.01(a)
"Buyer's 401(k) Plan . . . . . . . . . . . . . . . . . . . . . . .Section 7.08(a)(ii)
Buyer's Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . Section 7.08(a)(i)
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 2.06(a)
"Closing". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 2.06(a)
"Contracts". . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 2.01(d)
"Covered Employees". . . . . . . . . . . . . . . . . . . . . . . .Section 7.08(a)(ii)
"Equipment". . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 2.01(b)
"Excluded Assets". . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.02
"Excluded Liabilities" . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.04
"Hired OEM Employees . . . . . . . . . . . . . . . . . . . . . . . Section 7.08(a)(i)
"Insurance Policies" . . . . . . . . . . . . . . . . . . . . . . . . .Section 3.20(a)
"Intellectual Property Rights" . . . . . . . . . . . . . . . . . . . .Section 3.18(a)
"Inventory". . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 2.01(c)
"Leased Real Property" . . . . . . . . . . . . . . . . . . . . . . . .Section 3.09(a)
"Leases" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 3.09(b)
"OEM Business" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Recital A
"Owned Real Property". . . . . . . . . . . . . . . . . . . . . . . . .Section 3.09(a)
"Permits". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.14
"Personal Property Leases" . . . . . . . . . . . . . . . . . . . . . .Section 3.09(b)
"Proceedings". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.12
"Real Property". . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 3.09(a)
"Required Approvals and Consent" . . . . . . . . . . . . . . . . . . . . Section 3.04
"Scheduled Contracts". . . . . . . . . . . . . . . . . . . . . . . . .Section 3.13(a)
"Seller" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
"Seller Indemnitees" . . . . . . . . . . . . . . . . . . . . . . . . .Section 9.01(b)
"Seller's 401(k) Plan" . . . . . . . . . . . . . . . . . . . . . .Section 7.08(a)(ii)
"Stockholder". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
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"Subsequent Material Contract" . . . . . . . . . . . . . . . . . .Section 5.01(b)(iv)
"Transferred Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.01
ARTICLE II
TRANSFER OF ASSETS
2.01. TRANSFER OF ASSETS BY SELLER. Upon the terms and subject to
the conditions of this Agreement and in reliance upon the representations,
warranties and agreements herein set forth, Buyer agrees to purchase from Seller
and Seller agrees to sell or cause to be sold to Buyer at the Closing, free and
clear of all Liens other than Permitted Liens, all the assets, properties,
rights, licenses, permits, contracts, causes of action and claims, of every kind
and description as the same shall exist on the Closing Date (other than the
Excluded Assets), wherever located, whether tangible or intangible, real,
personal or mixed, that are used by, owned by, leased by or in the possession of
Seller in connection with the OEM Business, whether or not reflected on the
books and records of Seller, including all assets shown on the 1997 Balance
Sheet and not disposed of in the ordinary course of business or as permitted by
this Agreement prior to the Closing Date (the collective assets, properties,
rights, licenses, permits, contracts, causes of action and claims to be
transferred to Buyer by Seller pursuant hereto are referred to collectively
herein as the "Transferred Assets") and including without limitation all right,
title and interest of Seller in, to and under the following, to the extent owned
or leased by Seller at the time of Closing to the extent that such assets are
used in or relate to the OEM Business:
(a) all real property, including, without limitation, leases
(whether capitalized or operating), all buildings, fixtures and improvements on
and appurtenances to real property, and all leasehold improvements relating to
any leased real property, including the foregoing listed on SCHEDULE 3.09(a)(i);
(b) all machinery, equipment, furniture, office equipment,
computer equipment (including all hardware and software), communications
equipment, vehicles, storage tanks, spare and replacement parts, fuel and other
tangible property (and interests in any of the foregoing) of Seller
("Equipment") including any of the foregoing listed on SCHEDULE 2.01(b);
(c) all items of inventory notwithstanding how classified in the
financial records of Seller, including all raw materials, purchased parts,
work-in-process, finished goods, supplies, spare parts and samples
("Inventory");
(d) all contracts, agreements, options, licenses, sales and
purchase orders, commitments and other instruments of any kind, whether written
or oral, to which Seller is a party, including the Scheduled Contracts and the
Subsequent Material Contracts (the "Contracts"), (i) including, without
limitation, all rights of Seller and U.K. Seller under the Share Purchase
Agreement except as otherwise provided in Section 2.02(c), but (ii) excluding
any documents executed in connection with the Share Purchase Agreement except as
otherwise expressly provided herein;
(e) all books, records, files and papers of Seller, whether in
hard copy or computer format, including books of account, invoices, engineering
information, sales and
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promotional literature, manuals and data, sales and purchase correspondence,
lists of present and former suppliers, personnel and employment records of
present and former employees, and documentation developed or used for
accounting, marketing, engineering, manufacturing or any other purpose;
(f) all prepaid charges and expenses of Seller other than
prepaid insurance, including any such charges and expenses with respect to ad
valorem taxes, leases and rentals and utilities;
(g) cash;
(h) all of Seller's rights, claims, credits, causes of action or
rights of set-off against third parties, whether liquidated or unliquidated,
fixed or contingent, including claims pursuant to all warranties,
representations and guarantees made by suppliers, manufacturers, contractors and
other third parties in connection with products or services purchased by or
furnished to Seller affecting any of the Transferred Assets;
(i) except as otherwise provided in Section 5.06, all of
Seller's patents, copyrights, trademarks, trade names, service marks, service
names, designs, know-how, processes, trade secrets, inventions, and other
proprietary data, including any of the foregoing listed on SCHEDULE 3.18;
(j) all transferable franchises, licenses, permits or other
authorizations issued or granted by any Governmental Authority that are owned
by, granted to or held or used by Seller, whether or not actually utilized by
Seller;
(k) all lists of present customers and lists of former
customers;
(l) all goodwill associated with the OEM Business or the
Transferred Assets;
(m) all product designations used in Seller's catalogs;
(n) all accounts receivable and notes receivable (including,
without limitation, any gainsharing payments from customers and rebates from
suppliers), together with any unpaid interest or fees accrued thereon or other
amounts due with respect thereto, and any security or collateral therefor;
(o) all of the outstanding shares of the share capital of ADL
and Seller's interest in the Mexican Joint Venture; and
(p) all assets of any kind or nature at the locations listed on
SCHEDULE 2.01(p).
2.02. EXCLUDED ASSETS. Buyer expressly understands and agrees
that the following assets and properties of Seller (the "Excluded Assets") shall
be excluded from the Transferred Assets and shall be retained by Seller:
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(a) those assets listed on SCHEDULE 2.02;
(b) those assets of Seller that are completely unrelated to the
OEM Business;
(c) all rights of Seller and U.K. Seller under paragraphs 2, 3
(except for paragraph 3.2), 4, 5, 6, 8, 12 and 13 of the Share Purchase
Agreement;
(d) the outstanding shares of the share capital of U.K. Seller;
and
(e) the originals of Seller's books and records to the extent
that Seller provides copies thereof to Buyer.
2.03. ASSUMPTION OF LIABILITIES. Upon the terms and subject to
the conditions of this Agreement and in reliance upon the representations,
warranties and agreements herein set forth, Buyer agrees, effective at the time
of Closing, to assume and in due course perform, pay and discharge each of the
following (the "Assumed Liabilities"):
(a) all Liabilities and obligations of Seller arising after the
Closing under Contracts and Leases included in the Transferred Assets;
(b) all trade payables of the OEM Business arising in the
ordinary course of business as of the Closing Date;
(c) all obligations to OEM Employees hired by Buyer for accrued
vacation and personal days as of the Closing Date;
(d) except as otherwise provided in Section 2.04(j), all
obligations of Seller under the Share Purchase Agreement; and
(e) all Liability arising out of warranty claims relating to the
products of the OEM Business pursuant to any of the warranties contained in the
Scheduled Contracts and the Subsequent Material Contracts.
2.04. EXCLUDED LIABILITIES. Buyer does not hereby assume, and
shall not at any time hereafter (including on or after the Closing Date) become
liable for, any of the Liabilities of Seller or any of its Affiliates or any
ERISA Affiliate of any of the foregoing other than the Assumed Liabilities (the
"Excluded Liabilities"). The Excluded Liabilities shall include, without
limitation, the following Liabilities:
(a) any Liability of any of Seller or any of its Affiliates or
any ERISA Affiliate of any of the foregoing whether currently in existence or
arising hereafter that is not attributable to, or that does not arise out of the
conduct of, the OEM Business;
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(b) any Liability whether presently in existence or arising
hereafter relating to an Excluded Asset;
(c) except as otherwise provided in Section 6.03, any
Environmental Liability (including any Environmental Liability of any U.K.
Subsidiary or the Mexican Joint Venture), whether presently in existence or
arising hereafter, other than Buyer Environmental Liabilities;
(d) any Liability whether currently in existence or arising
hereafter relating to fees, commissions or expenses owed to any broker, finder,
investment banker, attorney, accountant or other intermediary or advisor
employed by Stockholder, Seller or any of their Affiliates in connection with
the transactions contemplated hereby or otherwise;
(e) any Liability the existence of which constitutes a breach of
any representation or warranty of Stockholder and Seller hereunder;
(f) any contingent Liabilities of Seller related to any
transactions by Seller prior to the date hereof except Liabilities that Buyer
has expressly agreed to assume pursuant to the terms of this Agreement;
(g) any Liability related to Indebtedness;
(h) except as set forth on SCHEDULE 7.05, any Liability for
Taxes, including, without limitation, any Taxes relating to Seller's operations
on or prior to the Closing Date that may be imposed upon Buyer after the Closing
Date as the successor to Seller;
(i) except as otherwise provided in Section 2.03(c), any
Liability arising under any of Seller's Benefit Plans;
(j) any Liability of Seller or U.K. Seller under any of
paragraphs 2, 3 (except for paragraph 3.2), 4, 5, 6, 8, 12 and 13 of the Share
Purchase Agreement, or any liability of Seller or U.K. Seller under any other
paragraph of the Share Purchase Agreement to the extent that such liability
constitutes an accrued payment obligation as of the Closing Date;
(k) any Liability of Seller for accrued payroll for its
employees, including accrued payroll as of the Closing Date for OEM Employees;
and
(l) any Liability of Seller arising under this Agreement.
Any Liability that is listed in both Section 2.03 and Section 2.04 shall be
deemed an Excluded Liability.
2.05. ASSIGNMENT OF CONTRACTS AND RIGHTS.
(a) With respect to any material Contract and any claim, right
or benefit arising thereunder or resulting therefrom that constitute Transferred
Assets, promptly after the date hereof, to the extent requested by Buyer, Seller
will use reasonable efforts to obtain
11
the written consent of the other parties to any such Contract to the
assignment thereof to Buyer or written confirmation from such parties
reasonably satisfactory in form and substance to Buyer confirming that such
consent is not required. In this regard, Seller's reasonable efforts will
not include the payment of money.
(b) If such consent, waiver or confirmation is not obtained
with respect to any such Contract and notwithstanding the provisions of
Section 8.01(b) Buyer elects to consummate the Closing, Seller and Buyer
shall cooperate in an arrangement reasonably satisfactory to Buyer and Seller
under which Buyer will obtain, to the extent practicable, the claims, rights
and benefits and assume the corresponding obligations thereunder in
accordance with this Agreement, including subcontracting, sub-licensing or
sub-leasing to Buyer, or under which Seller will enforce for the benefit of
Buyer, with Buyer assuming Seller's obligations to be performed after the
Closing Date, any and all claims, rights and benefits of Seller against a
third party thereto. Seller will promptly pay to Buyer when received all
monies received by Seller under or with regard to any Transferred Asset or
any claim, right or benefit arising thereunder not transferred to Buyer
pursuant to this Section 2.05(b).
(c) Buyer understands that Seller and Stockholder will not
attempt to obtain the consent of the Vendors to the assignment of the Share
Purchase Agreement rights listed in Section 2.01(d). If at any time after
the Closing Date any Vendor fails or refuses to provide to Buyer the benefit
of any such rights, Seller shall, at the request and expense of Buyer, take
all action reasonably necessary to enforce such rights on behalf of Buyer.
2.06. CLOSING.
(a) The closing (the "Closing") of the transactions
contemplated by this Agreement shall take place at the offices of McAfee &
Xxxx, Two Leadership Square, 10th Floor, Oklahoma City, Oklahoma on March 2,
1998 or such other date as to which Buyer and Seller may agree (the "Closing
Date"), unless this Agreement is terminated pursuant to Section 10.01.
(b) At the Closing, Buyer shall pay (i) $101,500,000 to
Seller, $9,750,000 to U.K. Seller, and (iii) subject to approval by Seller's
shareholders pursuant to Section 280G(b)(5) of the Code, $1,250,000 to
Stockholder, in cash by wire transfer of immediately available funds to a
bank account or bank accounts designated in writing by the recipients prior
to the Closing. If approval of Seller's shareholders as described in Section
280G(b)(5) of the Code is not obtained for the payment described in clause
(iii) above, such payment shall be paid to Seller instead of Stockholder.
(c) Seller shall deliver or cause to be delivered to Buyer
such bills of sale, certificates of title, endorsements, consents,
assignments and other good and sufficient instruments of conveyance and
assignment (which in the case of Intellectual Property Rights, shall be
documents immediately recordable in the respective countries of origin) of
such rights as the parties and their respective counsel shall deem reasonably
necessary or appropriate to vest in Buyer all of Seller's right, title and
interest in, to and under the Transferred Assets.
12
2.07. POST CLOSING PAYMENTS.
(a) If the audited consolidated profit and loss accounts for
the U.K. Subsidiaries for the 12 months ending December 31, 1998 show that
EBITDA for such period was greater than L1,000,000, then Buyer shall pay to
Seller an amount equal to (i) $12,500,000 multiplied by the Proration Factor
minus (ii) the aggregate amount, if any, that Buyer pays to the Vendors
pursuant to paragraph 3.2 of the Share Purchase Agreement. EBITDA for such
period will be determined in accordance with the terms of the Share Purchase
Agreement and with respect to such determination Buyer shall have the rights
and obligations of "Purchaser" under the Share Purchase Agreement and Seller
shall have the rights and obligations of the Vendors under the Share Purchase
Agreement.
(b) If Buyer is required to pay an aggregate amount to the
Vendors pursuant to paragraph 3.2 of the Share Purchase Agreement that
exceeds the amount, if any, that Buyer is required to pay to Seller pursuant
to Section 2.07(a), Seller shall pay to Buyer an amount equal to such excess.
(c) Any payment required by to be made to Buyer or Seller
pursuant to this Section 2.07 shall be paid within three Business Days after
the final determination of the amount of such payment and shall be made in
cash by wire transfer of immediately available funds to a bank account or
bank accounts designated in writing by the recipient.
2.08. PURCHASE PRICE ALLOCATION. Prior to the Closing Date,
Buyer and Seller shall agree upon the final allocation of the payment to be
made to Seller at Closing among the Transferred Assets for purposes of
complying with Section 1060 of the Code and making any required filings under
state or local law and shall set forth such allocation on a statement. Buyer
and Seller shall report the tax consequences of the transactions contemplated
by this Agreement in a manner consistent with such allocation statement and
shall not take any position inconsistent therewith. The payment made at
Closing to U.K. Seller and the payment, if any, to be made pursuant to
Section 2.07 shall be allocated to the shares of ADL.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
STOCKHOLDER AND SELLER
As an inducement to Buyer to enter into this Agreement and to
consummate the transactions contemplated herein, Stockholder and Seller
represent and warrant to Buyer as follows:
3.01 EXISTENCE, GOOD STANDING AND POWER.
(a) Seller is a corporation duly organized and validly
existing and in good standing under the laws of the State of Oklahoma and has
all corporate power and all governmental licenses, authorizations, consents,
approvals and qualifications required to carry on its business as now
conducted and to own and operate its assets as now owned and operated except
where, in the aggregate, the failure to have such licenses, authorizations,
consents,
13
approvals and qualifications would not have a Material Adverse Effect.
Seller is duly qualified to do business as a foreign corporation in each
jurisdiction where the character of the property owned or leased by it or the
nature of its activities makes such qualification necessary to carry on its
business as now conducted, except for those jurisdictions where the failure
to be so qualified has not been, and may not reasonably be expected to be,
material. SCHEDULE 3.01, sets forth those states in which Seller is duly
qualified to do business and in good standing.
(b) Stockholder is a limited partnership duly organized and
validly existing and in good standing under the laws of the State of Texas
and has all partnership power and all governmental licenses, authorizations,
consents, approvals and qualifications required to carry on its business as
now conducted and to own and operate its assets as now owned and operated
except where, in the aggregate, the failure to have such licenses,
authorizations, consents, approvals and qualifications would not have a
Material Adverse Effect.
(c) The general partner of Stockholder is a corporation duly
organized and validly existing and in good standing under the laws of the
State of Texas and has all corporate power and all governmental licenses,
authorizations, consents, approvals and qualifications required to carry on
its business as now conducted and to own and operate its assets as now owned
and operated except where, in the aggregate, the failure to have such
licenses, authorizations, consents, approvals and qualifications would not
have a Material Adverse Effect.
(d) Each of the U.K. Subsidiaries is in good standing under
the laws of England and Wales.
(e) The Mexican Joint Venture is a Sociedad de
Responsabilidad Limitada Con Capital Variable duly formed and validly
existing and in good standing under the laws of the United Mexican States,
and has all corporate power and all governmental licenses, authorizations,
consents, approvals and qualifications required to carry on its business as
now conducted and to own and operate its assets as now owned and operated
except where, in the aggregate, the failure to have such licenses,
authorizations, consents, approvals and qualifications would not have a
Material Adverse Effect.
3.02 AUTHORIZATION AND ENFORCEABILITY. Stockholder and Seller
have the full right, power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby, including, in the case of
Seller, the transfer, conveyance and sale of the Transferred Assets to Buyer.
This Agreement has been duly and validly executed and delivered by
Stockholder and Seller and constitutes the legal, valid and binding agreement
of each of them, enforceable against each of them in accordance with the
terms of this Agreement, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and subject to general principles of equity.
3.03 NON-CONTRAVENTION. The execution, delivery and
performance by Seller and Stockholder of this Agreement do not and will not
(i) contravene or conflict with the charter or bylaws of Seller, true and
correct copies of which have been delivered to Buyer, (ii) contravene or
conflict with the partnership agreement of Stockholder, (iii) assuming
receipt
14
of the Required Approvals and Consents, contravene or conflict with or
constitute a violation of any provision of any Applicable Law binding upon or
applicable to the Company, Stockholder, the OEM Business or the Transferred
Assets, (iv) assuming receipt of the Required Approvals and Consents,
constitute a default under or give rise to any right of termination,
cancellation or acceleration of, or to a loss of any benefit to which the
Company is entitled under, any material Contract or any Permit or similar
authorization relating to the Company, the OEM Business or the Transferred
Assets by which the Company, the OEM Business or the Transferred Assets may
be bound, or (v) result in the creation or imposition of any Lien on any
Transferred Assets.
3.04 REQUIRED APPROVALS AND CONSENTS. SCHEDULE 3.04 lists (i)
each governmental or other registration, filing, application, notice,
transfer, consent, approval, order, qualification and waiver required under
Applicable Law to be obtained or made by Stockholder or the Company by virtue
of the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby in order to comply with Applicable Law or
avoid the loss of any material Permit, and (ii) each Scheduled Contract with
respect to which the consent of the other party or parties thereto must be
obtained by the Company by virtue of the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby to
avoid the invalidity of such Contract, the termination thereof, a breach or
default thereunder or any other change or modification to the terms thereof
(the "Required Approvals and Consents"). To the Knowledge of Seller or
Stockholder, there are no facts relating to the identity or circumstances of
the Company, Stockholder or the Transferred Assets that would prevent or
materially delay obtaining any of the Required Approvals and Consents. This
Agreement and the transactions contemplated hereby have been approved by the
Board of Directors of Seller and the necessary vote of the stockholders of
Seller.
3.05 CAPITAL STOCK OF SELLER. Stockholder owns of record and
beneficially shares of the outstanding capital stock of Seller constituting
approximately 40% of the aggregate voting power of such outstanding capital
stock. The Principals collectively own of record and beneficially shares of
the outstanding capital stock of Seller constituting approximately 16% of the
aggregate voting power of such outstanding capital stock.
3.06 SUBSIDIARIES AND OTHER INTERESTS.
(a) The outstanding shares of the share capital of U.K.
Seller and each of the U.K. Subsidiaries are owned, either directly or
indirectly, of record and beneficially by Seller. There are not outstanding
(i) any options, warrants or other rights to purchase from any Person any
shares of U.K. Seller or any U.K. Subsidiary, (ii) any securities convertible
into or exchangeable for shares of U.K. Seller or any U.K. Subsidiary, or
(iii) any other commitments of any kind for the issuance of additional shares
or options, warrants or other securities of U.K. Seller or any U.K.
Subsidiary.
(b) The corporate capital of the Mexican Joint Venture
consists of 2,309,420 votes, which are issued and outstanding on the date
hereof. Seller owns of record and beneficially 1,247,086.8 votes of such
corporate capital. Seller has not granted to any person any option, warrant,
or other right to purchase any of Seller's interest in the Mexican Joint
Venture
15
other than contractual rights granted to other members of the Mexican Joint
Venture (such as rights of first refusal) as set forth in Article X11 of the
Operating Agreement of the Mexican Joint Venture, a true and correct copy of
which has been furnished to Buyer.
(c) The OEM Business does not include, either directly or
indirectly, any interest in any Person other than the U.K. Subsidiaries and
the Mexican Joint Venture.
3.07 FINANCIAL STATEMENTS; UNDISCLOSED LIABILITIES.
(a) Attached hereto as EXHIBIT A are true and complete copies
of the consolidated balance sheets and related consolidated statements of
operations, cash flows and change in net assets for the OEM Business as of
and for the 12 months ended June 30, 1997 and the six months ended December
31, 1997 and the consolidated balance sheet and related consolidated
statement of operations for the OEM Business as of and for the 12 months
ended June 30, 1996. The December 31, 1997 balance sheet is referred to
herein as the "1997 Balance Sheet." Each of the financial statements has
been prepared based on the books and records of Seller in accordance with
GAAP (except for the omission of footnotes and adjustments, consisting only
of normal recurring adjustments, in the case of the quarterly statements) and
Seller's normal accounting practices, consistent with past practice and with
each other, and present fairly the financial condition and results of
operations of the OEM Business as of the dates indicated or for the periods
indicated. The financial statements as of and for the 12 months ended June
30, 1997 have been audited by the accounting firm of Xxxxx Xxxxxxxx L.L.P.
(b) There are no material Liabilities relating to the OEM
Business or the Transferred Assets except for those Liabilities set forth on
the 1997 Balance Sheet or set forth on SCHEDULE 3.07, except for those
arising since the date of the 1997 Balance Sheet in the ordinary course of
business consistent with past practices.
3.08 ABSENCE OF CERTAIN CHANGES. Except as set forth on
SCHEDULE 3.08, since the date of the 1997 Balance Sheet, the OEM Business has
been conducted in the ordinary course, and with respect to the OEM Business
there has not been:
(a) any event, occurrence, development or state of
circumstances or facts or change in the Company or the OEM Business
(including any damage, destruction or other casualty loss, but excluding
changes in general economic conditions) affecting the Company or the OEM
Business that has had or that may be reasonably expected to have, either
alone or together with all such events, occurrences, developments, states of
circumstances or facts or changes, a Material Adverse Effect;
(b) any incurrence of, or change in, any material Liability
relating to the OEM Business other than in the ordinary course of business;
(c) any creation, assumption or sufferance of the existence
of any Lien on any of the Transferred Assets;
16
(d) to the extent related to the OEM Business, any material
transaction or commitment made, or any material Contract entered into, by the
Company, or any waiver, amendment, termination or cancellation of any
material Contract by the Company, or any relinquishment of any rights
thereunder by the Company, or of any other material right or debt owed to the
Company, other than in each such case actions taken in the ordinary course of
business consistent with past practice;
(e) except for actions taken in the ordinary course of
business consistent with past practice that are not, in the aggregate,
material, (i) any grant of any severance, continuation or termination pay to
any OEM Employee, (ii) any entering into of any employment, deferred
compensation or other similar agreement (or any amendment to any such
existing agreement) with any OEM Employee, (iii) any increase in benefits
payable or potentially payable under any severance, continuation or
termination pay policies or employment agreements with any OEM Employee, (iv)
any except as required by Applicable Law, increase in compensation, bonus or
other benefits payable or potentially payable to OEM Employee, (v) any except
as required by Applicable Law, change in the terms of any bonus, pension,
insurance, health or other Benefit Plan of the Company, or (vi) any
representation of the Company to any employee or former employee of the
Company that Buyer would assume, continue to maintain or implement any
Benefit Plan after the Closing Date (except to the extent that any such
representation is consistent with the terms hereof);
(f) any material change by the Company in its accounting
principles, methods or practices or in the manner it keeps its books and
records or any material change by the Company of its current practices with
regard to sales, receivables, payables or accrued expenses that would affect
the timing of recognition of income, collection of receivables or payment of
payables; or
(g) the entering into of any Contract or other arrangement
between the Company and any OEM Employee or any of their respective
Affiliates or Associates.
3.09 TANGIBLE ASSETS.
(a) SCHEDULE 3.09 (a)(i) sets forth a true and complete list of
all (i) real property owned by Seller and used in the conduct of the OEM
Business, other than property included in the Excluded Assets (the "Owned Real
Property") and (ii) real property leased by Seller and used in the conduct of
the OEM Business, other than that included in the Excluded Assets (the "Leased
Real Property" and together with the Owned Real Property, the "Real Property").
SCHEDULE 3.09(a)(ii) sets forth a true and complete list of all personal
property leases or licenses relating to the OEM Business (A) to which the
Company is a party or by which the Company is bound and (B) that provide for
annual payments by the Company in excess of $100,000 and that cannot be
terminated without charge by the Company within 30 days (the "Personal Property
Leases").
(b) With respect to the Personal Property Leases and the
leases relating to the Leased Real Property (collectively, the "Leases"),
except as set forth on SCHEDULE 3.09(b), there exist no defaults by the
Company, or, to the Knowledge of Seller or Stockholder, any
17
default or threatened default by any lessor or third party thereunder, that
has materially affected or could reasonably be expected to materially affect
the rights and privileges thereunder of the Company. Assuming the Required
Approvals and Consents are obtained, the consummation of the transactions
contemplated hereby will not result in a breach of, or give any Person the
right to terminate, any Lease or result in any material adverse change in the
terms of any Lease.
(c) The Company has (i) a good and valid leasehold interest
in each piece of Leased Real Property, (ii) a good and valid leasehold
interest in the personal property subject to the Personal Property Leases,
(iii) good and valid fee simple title to each piece of Owned Real Property,
and (iv) good and valid title to its other tangible assets used in the OEM
Business. Except as set forth on SCHEDULE 3.09(c), the Company holds title
to each Transferred Asset free and clear of all Liens. All of the
Transferred Assets are free of Material Title Defects. To the Knowledge of
Seller and Stockholder, there are no encroachments, overlaps, boundary
disputes or other matters affecting the Owned Real Estate that would be
disclosed by an accurate survey of the Owned Real Estate. Seller and
Stockholder make no representation or warranty regarding the status of the
title of any landlord to any Leased Real Property or the title of any lessor
to any property subject to a Personal Property Lease.
(d) Except as disclosed in SCHEDULE 3.09(d), the Company has
not received notice of any pending zoning or other land-use regulation
proceedings or any proposed change in any Applicable Laws that could
reasonably be expected to detrimentally affect the use or operation of any
Real Property, nor has the Company received notice of any special assessment
proceedings affecting any Real Property, or applied for any change to the
zoning or land use status of any Real Property.
(e) Since January 1, 1996, the Company has not experienced
any material interruption in the delivery to any of the Real Property of
adequate quantities of any utilities (including without limitation
electricity, natural gas, potable water, water for cooling or similar
purposes and fuel oil) or other public services (including without limitation
foul and surface water drainage) required by the Company during such period.
(f) SCHEDULE 3.09(f) sets forth the description and location
of each item of tangible personal property (other than Inventory) that
constitutes a Transferred Asset and on the date hereof has a depreciated book
value per unit in excess of $100,000.
(g) All of the buildings, fixtures and other improvements
located on the Real Property and all the tangible personal property listed on
SCHEDULE 3.09(f) are in good operating condition and repair.
(h) Except for the real property that will be the subject of
the leases referred to in Section 7.06, the Transferred Assets constitute all
the assets necessary to operate the OEM Business as a going concern
substantially in the same manner as conducted prior to the date hereof.
3.10 AFFILIATES. Except as set forth in SCHEDULE 3.10, neither
Seller nor Stockholder nor any officers or directors or other stockholder of
Seller (or any immediate family
18
member of any such officer or director or other stockholder) now has or at
any time since January 1, 1996, had, either directly or indirectly, an equity
or debt interest in any Person that furnishes or sells or during such period
furnished or sold services or products to the Company with respect to the OEM
Business or purchases or during such period purchased from the Company with
respect to the OEM Business any goods or services, or otherwise does or
during such period did business with the Company with respect to the OEM
Business of a material nature or amount; PROVIDED, HOWEVER, that neither
Seller, nor Stockholder nor any of Seller's officers or directors or other
stockholders (or any immediate family member thereof) shall be deemed to have
such an interest solely by virtue of the ownership of less than 5.0% of the
outstanding voting stock or debt securities of any publicly held company, the
stock or debt securities of which are traded on a national stock exchange or
quoted on the National Association of Securities Dealers Automated Quotation
System.
3.11 INVENTORIES. Subject to any reserve therefor that is included
in the 1997 Balance Sheet and except as disclosed in SCHEDULE 3.11, all
Inventories of the OEM Business (i) have been acquired or manufactured in the
ordinary course of business, in accordance with the Company's normal
inventory practices, (ii) are of a usable quality (including processing into
merchantable finished inventories for sale in the ordinary course of
business), free of any material defect or deficiency, (iii) are in
merchantable and undamaged condition and meet customer specifications, and
(iv) are carried on the books of the Company at the lower of cost or market.
3.12 LITIGATION. Except as disclosed on SCHEDULE 3.12, (i) to the
Knowledge of Seller and Stockholder there are no actions, suits, hearings,
arbitrations, proceedings (public or private) or governmental investigations
that have been brought by or against any Governmental Authority or any other
Person (collectively, "Proceedings") pending or, to the Knowledge of Seller
or Stockholder, threatened, against or affecting the Company with respect to
the OEM Business, the OEM Business or the Transferred Assets or which seek to
enjoin or rescind the transactions contemplated by this Agreement or
otherwise prevent Seller or Stockholder from complying with the terms and
provisions of this Agreement, and (ii) there are no existing orders,
judgments or decrees of any Governmental Authority affecting any of the
Company with respect to the OEM Business, the OEM Business or the Transferred
Assets.
3.13 CONTRACTS.
(a) SCHEDULE 3.13(a) sets forth a complete list of the
following Contracts of the Company (collectively with the Leases, the
"Scheduled Contracts"):
(i) each Contract between the Company and (A) any
present or former OEM Employee, (B) any supplier of services or products
whose dollar volume of sales to the OEM Business exceeded $100,000 during the
12 months ended June 30, 1997 or is expected to exceed $100,000 during the 12
months ending June 30, 1998, and (C) any Person in which the aggregate
payments made to the OEM Business under such Contract exceeded $100,000
during the 12 months ended June 30, 1997 or is expected to exceed $100,000
during the 12 months ending June 30, 1998;
19
(ii) each other agreement or arrangement of the Company
that relates to the OEM Business and (A) requires the payment or incurrence
of Liabilities or the rendering of services by the Company, subsequent to the
date of this Agreement, of more than $100,000 and (B) cannot be terminated
without charge by the Company within 30 days;
(iii) all Contracts relating to, and evidences of or
guarantees of, or providing security for, the deferred purchase price of any
Transferred Asset (whether incurred, assumed, guaranteed or secured by any
asset);
(iv) to the extent that any of the following cannot be
terminated without charge by the Company within 30 days, all license,
distribution, commission, marketing, agent, franchise, technical assistance
or similar agreements relating to or providing for the marketing and/or sale
of the products or services of the OEM Business to which the Company is a
party or by which the Company is otherwise bound;
(v) each agreement or covenant not to compete by which
the OEM Business is bound and each joint venture agreement to which the
Company is a party with respect to the OEM Business; and
(vi) all other material contracts, commitments and
obligations relating to the OEM Business that are not in the ordinary course
of business.
(b) Except as disclosed in SCHEDULE 3.13(b), each Scheduled
Contract is a legal, valid and binding obligation of the Company and, to the
Knowledge of Seller and Stockholder, enforceable (except to the extent such
enforceability may be limited by bankruptcy, equity and creditors' rights
generally) against the Company and, to the Knowledge of Seller and
Stockholder, each such other party in accordance with its terms, and neither
the Company nor, to the Knowledge of Seller and Stockholder, any other party
thereto is in material default or has failed to perform any material
obligation thereunder. Complete and correct copies of each written Scheduled
Contract have been delivered to Buyer.
(c) SCHEDULE 3.13(c) sets forth a list (by name and address)
of the customers to whom the Company made sales of more than $5,000,000 and
vendors providing more than $5,000,000 of services or products to the Company
during the 12 months ended June 30, 1997 together with the approximate dollar
amount of sales by or services or products provided to the Company during
said period.
3.14 PERMITS. SCHEDULE 3.14 sets forth all material approvals,
authorizations, certificates, consents, licenses, orders, permits,
qualifications or other similar authorizations of all Governmental
Authorities (and all other Persons) necessary for the operation of the OEM
Business or the Transferred Assets in substantially the same manner as
currently operated or affecting or relating in any way to the OEM Business or
the Transferred Assets (the "Permits"). Except as set forth on SCHEDULE
3.14, each Permit is valid and in full force and effect in all material
respects and, assuming the related Required Approvals and Consents are
obtained prior to the Closing Date, none of the Permits will be terminated or
become terminable or impaired or
20
have the terms thereof changed in any material respect as a result of the
transactions contemplated hereby.
3.15 COMPLIANCE WITH APPLICABLE LAWS. Except as set forth in
SCHEDULE 3.15, the operation of the OEM Business has not violated or infringed,
and does not violate or infringe, any material Applicable Law.
3.16 EMPLOYMENT AGREEMENTS; CHANGE IN CONTROL; AND EMPLOYEE
BENEFITS.
(a) SCHEDULE 3.16 sets forth a list of all Benefit Plans.
Seller has made true and correct copies of all governing instruments and related
agreements pertaining to such Benefit Plans available to Buyer. Seller has made
available to Buyer a copy of the three most recently filed Federal Form 5500
series and accountant's opinion, if applicable, for each Employee Benefit Plan.
(b) Neither Seller nor any ERISA Affiliates of Seller sponsors,
maintains or contributes to, or, within the last five years, has sponsored,
maintained, contributed to, or incurred an obligation to contribute to, any
Employee Pension Benefit Plan.
(c) Except as set forth in SCHEDULE 3.16, no individual shall
accrue or receive additional benefits, service or accelerated rights to payments
of benefits under any Benefit Plan, including the right to receive any parachute
payment, as defined in Section 280G of the Code, or become entitled to
severance, termination allowance or similar payments as a result of the
transactions contemplated by this Agreement.
(d) No Employee Benefit Plan has participated in, engaged in or
been a party to any non-exempt Prohibited Transaction, and neither Seller nor
any ERISA Affiliates of Seller has had asserted against it any claim for taxes
under Chapter 43 of Subtitle D of the Code and Sections 5000 of the Code, or for
penalties under ERISA Section 502(c), (i) or (l), with respect to any Employee
Benefit Plan nor, to the Knowledge of Seller or Stockholder, is there a basis
for any such claim. No officer, director or employee of Seller has committed a
material breach of any responsibility or obligation imposed upon fiduciaries by
Title I of ERISA with respect to any Employee Benefit Plan.
(e) Other than routine claims for benefits, there is no claim
pending or to the Knowledge of Seller or Stockholder threatened, involving any
Benefit Plan by any Person against such plan or Seller or any ERISA Affiliate.
There is no pending or, to the Knowledge of Seller or Stockholder, threatened
proceeding involving any Employee Benefit Plan before the IRS, the United States
Department of Labor or any other Governmental Authority.
(f) Each Benefit Plan has at all times prior hereto been
maintained in all material respects, by its terms and in operation, in
accordance with ERISA and the Code, including, but not limited to, all
applicable reporting and disclosure requirements. Seller and each ERISA
Affiliate have made full and timely payment of all amounts required to be
contributed under the terms of each Benefit Plan and Applicable Law or required
to be paid as
21
expenses under such Benefit Plan, and Seller and each ERISA Affiliate shall
continue to do so through the Closing.
(g) With respect to any Group Health Plans maintained by Seller
or its ERISA Affiliate, whether or not for the benefit of Seller and its ERISA
Affiliate, Seller and its ERISA Affiliates have complied in all material
respects with the provisions of Part 6 of Title I of ERISA and Section 4980B of
the Code. Except as set forth on SCHEDULE 3.16, Seller is not obligated to
provide health care benefits of any kind to its retired employees pursuant to
any Employee Benefit Plan, including, without limitation, any Group Health Plan,
or pursuant to any agreement or understanding, other than as required by Code
Section 4980B.
3.17 LABOR AND EMPLOYMENT MATTERS.
(a) Except as set forth on SCHEDULE 3.17, no collective
bargaining agreement exists with respect to any OEM Employees that is binding on
the Company and, except as described on SCHEDULE 3.17, no petition has been
filed or proceedings instituted by any OEM Employee or group of OEM Employees
with any labor relations board seeking recognition of a bargaining
representative which petition or proceeding is still pending. SCHEDULE 3.17
describes any organizational effort currently being made or, to the Knowledge of
Seller or Stockholder, threatened by or on behalf of any labor union to organize
any OEM Employees.
(b) Except as set forth on SCHEDULE 3.17, (i) there is no labor
strike, dispute, slow down or stoppage pending or, to the Knowledge of Seller or
Stockholder, threatened against or directly affecting the OEM Business, (ii) no
grievance or arbitration proceeding arising out of or under any collective
bargaining agreement relating to the OEM Business is pending, and no claims
therefor exist; and (iii) neither Seller nor Stockholder has received any notice
or has any Knowledge of any threatened labor or civil rights dispute,
controversy or grievance or any other unfair labor practice proceeding or breach
of contract claim or action with respect to claims of, or obligations to, any
OEM Employee or group of OEM Employees.
(c) The Company has complied and is currently complying, in all
material respects, in respect of all OEM Employees, with all Applicable Laws
respecting employment and employment practices and the protection of the health
and safety of employees, from whatever source such law may be derived,
including, without limitation, statutes, ordinances, laws, rules, regulations,
policies, standards, judicial or administrative precedents, judgments, orders,
decrees, awards, citations, licenses, official interpretations and guidelines.
Except as set forth on SCHEDULE 3.17, since January 1, 1996 the Company has not
received any citation or other notification for the violation of occupational
and health safety laws or regulations with respect to the OEM Business.
3.18 INTELLECTUAL PROPERTY.
(a) SCHEDULE 3.18 sets forth a complete and correct list of each
patent, patent application and docketed invention, trademark, trade name,
trademark or tradename registration or application, copyright or copyright
registration or application for copyright
22
registration, and each license or licensing agreement for any of the foregoing
relating to the OEM Business (the "Intellectual Property Rights").
(b) Except as disclosed in SCHEDULE 3.18, since January 1, 1996
the Company has not been a party to any Proceeding nor, to the Knowledge of
Seller or Stockholder, is any Proceeding threatened as to which there is a
reasonable possibility of a determination adverse to the Company that involved
or may involve a claim of infringement by any Person (including any Governmental
Authority) of any Intellectual Property Right. Except as disclosed in
SCHEDULE 3.18, no Intellectual Property Right is subject to any outstanding
order, judgment, decree, stipulation or agreement restricting the use thereof by
the Company, or restricting the licensing thereof by the Company to any Person.
The use of the Intellectual Property Rights and the conduct of the OEM Business
do not conflict with, infringe upon or violate any patent, patent license,
patent application, trademark, tradename, trademark or tradename registration,
copyright, copyright registration, service xxxx, brand xxxx or brand name or any
pending application relating thereto, or any trade secret, know-how, programs or
processes, or any similar rights, of any Person.
(c) Except as set forth in SCHEDULE 3.18, the Company either
owns the entire right, title and interest in, to and under, or has acquired in
connection with the acquisition of Equipment or Inventory an implied or express
license to use, any and all inventions, processes, computer programs, know-how,
formulae, trade secrets, patents, chip designs, mask works, trademarks,
tradenames, brand names and copyrights that are necessary for the conduct of the
OEM Business in the manner that the OEM Business has heretofore been conducted.
No other inventions, processes, computer programs, know-how, formulae, trade
secrets, patents, chip designs, mask works, trademarks, tradenames, brand names,
copyrights, licenses or applications for any of the foregoing are necessary for
the unimpaired continued operation of the OEM Business in the manner that the
OEM Business has heretofore been conducted.
(d) Except as set forth in SCHEDULE 3.18, to the Knowledge of
Seller and Stockholder all of the material computer software, computer firmware,
computer hardware (whether general or special purpose), and other similar or
related items of automated, computerized, and/or software system(s) that are
used or relied on in the conduct of the OEM Business will not malfunction, will
not cease to function, will not generate incorrect data, and will not produce
incorrect results when processing, providing, and/or receiving (i) date-related
data into and between the 20th and 21st centuries and (ii) date-related data in
connection with any valid date in the 20th and 21st centuries.
3.19 ENVIRONMENTAL COMPLIANCE.
(a) Except as disclosed in SCHEDULE 3.19, the Company has
obtained all material approvals, authorizations, certificates, consents,
licenses, orders and permits or other similar authorizations of all Governmental
Authorities, or from any other Person, that are required under any Environmental
Law in connection with the OEM Business. SCHEDULE 3.19 sets forth all material
permits, licenses and other authorizations issued under any Environmental Law to
the Company relating to the OEM Business.
23
(b) Except as disclosed in SCHEDULE 3.19, the Company is in
compliance in all material respects with all terms and conditions of all
approvals, authorizations, certificates, consents, licenses, orders and permits
or other similar authorizations of all Governmental Authorities (and all other
Persons) required under all Environmental Laws in connection with the OEM
Business and is also in compliance in all respects with all other material
limitations, restrictions, conditions, standards, requirements, schedules and
timetables required or imposed under all Environmental Laws in connection with
the OEM Business.
(c) Except as disclosed in SCHEDULE 3.19, there are no past or
present events, conditions, circumstances, activities, practices, incidents,
actions, omissions or plans relating to or in any way affecting the Company or
the OEM Business as now conducted or previously conducted that could reasonably
be expected to prevent, or make more expensive, continued compliance with any
Environmental Law by Buyer or any of its Affiliates after the Closing, or that
may give rise to any Environmental Liability for which Buyer or any of its
Affiliates could be responsible, or otherwise form the basis of any claim,
action, demand, suit, Proceeding, hearing, study or investigation affecting
Buyer or any of its Affiliates (i) under any Environmental Law, (ii) based on or
related to the manufacture, processing, distribution, use, treatment, storage
(including without limitation underground storage tanks), disposal, transport or
handling, or the emission, discharge, release or threatened release of any
Hazardous Substance, or (iii) resulting from exposure to workplace hazards.
(d) Seller and Stockholder have delivered to Buyer copies of all
environmental documents, studies and reports under the control of or in the
possession of Seller or Stockholder relating to (i) any facilities or real
property ever owned, operated or leased by the OEM Business, or (ii) any
Environmental Liability relating to the OEM Business.
3.20 INSURANCE.
(a) SCHEDULE 3.20 sets forth a complete and correct list of all
material insurance policies of any kind currently in force with respect to the
OEM Business (the "Insurance Policies"), including all "occurrence based"
liability policies regardless of the periods to which they relate.
SCHEDULE 3.20 sets forth for each Insurance Policy the type of coverage, the
name of the insureds, the insurer, the premium, the expiration date, the period
to which it relates, the deductibles and loss retention amounts and the amounts
of coverage. No cancellation or material amendment or increase of premiums is
pending or, to the Knowledge of Seller or Stockholder, threatened with respect
to any of the Insurance Policies.
(b) No insurance company that issued any Insurance Policy, Board
of Fire Underwriters or similar body, or Governmental Authority has issued a
recommendation or requirement for any material changes in the conduct of the OEM
Business or any repairs or other work to be done on or with respect to any
material amount of Transferred Assets.
3.21 TAX MATTERS. Except as set forth on SCHEDULE 3.21:
(a) There are no Taxes of Seller or deficiencies in Taxes or
claims for Taxes against Seller for any taxable period that could become a
liability of, or which could be
24
assessed against or collected from, Buyer as a result of or after the transfer
of assets contemplated by this Agreement.
(b) There are no Liens against any of the Transferred Assets for
Taxes other than Liens for current Taxes not yet due and payable or which are
being contested in good faith; all of such Liens shall be discharged by Seller
on or before the Closing Date such that Buyer acquires the Transferred Assets
free and clear of any such Liens.
(c) All amounts that are required to be collected or withheld by
Seller, or with respect to Taxes of Seller, have been (or prior to the Closing
will have been) duly collected or withheld and all such amounts that are
required to be remitted to any taxing authority have been (or prior to the
Closing will have been) duly remitted.
(d) None of the Transferred Assets is property that is required
to be treated as owned by any other person pursuant to the "safe harbor lease"
provisions of former Section 168(f)(8) of the Internal Revenue Code of 1954 as
amended and in effect immediately prior to the enactment of the Tax Reform Act
of 1986 and none of the Transferred Assets is "tax exempt use property" within
the meaning of Section 168(h) of the Code.
(e) None of the Transferred Assets secures any debt the interest
on which is tax exempt under Section 103 of the Code.
3.22 ACCOUNTS RECEIVABLE. Except as set forth in SCHEDULE 3.22, the
accounts, accounts receivable, notes and notes receivable of the OEM Business
existing on the date hereof arose out of the sales of inventory or services in
the ordinary course of business and are collectible in full, net of the reserve
set forth on the 1997 Balance Sheet, which reserves are reasonable and were
calculated consistent with past practices.
3.23 ADVISORY FEES. Except for Bear Xxxxxxx & Co., Inc. (whose fees
and expenses will be paid by Seller), there is no investment banker, broker,
finder or other intermediary or advisor that has been retained by or is
authorized to act on behalf of Seller, Stockholder or their Affiliates who might
be entitled to any fee, commission or reimbursement of expenses from Buyer or
any of its Affiliates or any of their respective Associates upon consummation of
the transactions contemplated by this Agreement.
3.24 MATERIAL DISCLOSURES. No statement, representation or warranty
made by Seller or Stockholder in this Agreement or in any certificate,
statement, list, schedule or other document furnished or to be furnished to
Buyer hereunder contains, or when so furnished will contain, any untrue
statement of a material fact, or fails to state, or when so furnished will fail
to state, a material fact necessary to make the statements contained herein or
therein, in light of the circumstances in which they are made, not misleading.
3.25 U.K. SUBSIDIARIES. The representations and warranties of the
Vendors and Warrantors contained in the Share Purchase Agreement were true and
correct in all material respects on and as of October 10, 1997, and since
October 10, 1997 there have been no changes in the operations, affairs,
prospects, financial condition, results of operations, assets, Liabilities
25
or any other aspects of the U.K. Subsidiaries, except for those occurring in
the ordinary course of business that would not have a Material Adverse Effect.
The Share Purchase Agreement has not been amended from the form delivered to
Buyer prior to the date hereof and Seller and U.K. Seller have not waived any
rights to which they are entitled thereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to Stockholder and Seller to enter into this
Agreement and to consummate the transactions contemplated herein, Buyer hereby
represents and warrants to Stockholder and Seller that:
4.01 ORGANIZATION AND EXISTENCE. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and has all corporate power and all governmental licenses,
authorizations, consents, approvals and qualifications required to carry on its
business as now conducted and to own and operate its assets as now owned and
operated except where, in the aggregate, the failure to have such licenses,
authorizations, consents, approvals and qualifications would not have a material
adverse effect on Buyer. Buyer is duly qualified to do business as a foreign
corporation in each jurisdiction where the character of the property owned or
leased by it or the nature of its activities makes such qualification necessary
to carry on its business as now conducted, except for those jurisdictions where
the failure to be so qualified has not been, and may not reasonably be expected
to be, material
4.02 AUTHORIZATION AND ENFORCEABILITY. Buyer has full corporate
right, power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Buyer and constitutes the legal, valid and binding
agreement of Buyer, enforceable against it in accordance with the terms of this
Agreement, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and subject to general principles of equity.
4.03 REQUIRED APPROVALS AND CONSENTS. There are no governmental or
other registrations, filings, applications, notices, transfers, consents,
approvals, orders, qualifications or waivers required to be obtained or made by
Buyer by virtue of its execution and delivery of this Agreement or its
consummation of the transactions contemplated hereby, except for (i) those
required under the HSR Act, (ii) those required under the Revolving Credit
Agreement between Buyer and The Chase Manhattan Bank, as agent, and (iii) those
that have already been obtained. To the Knowledge of Buyer, there are no facts
relating to the identity or circumstances of Buyer that would prevent or
materially delay obtaining any of the foregoing.
4.04 NON-CONTRAVENTION. The execution, delivery and performance by
Buyer of this Agreement does not (i) contravene or conflict with the Certificate
of Incorporation or Bylaws of Buyer, or (ii) assuming compliance with the
matters referred to in Section 4.03, contravene or conflict with or constitute a
violation of any provision of any Applicable Law binding upon or applicable to
Buyer.
26
4.05 ADVISORY FEES. There is no investment banker, broker, finder or
other intermediary or advisor that has been retained by or is authorized to act
on behalf of Buyer who might be entitled to any fee, commission or reimbursement
of expenses from Seller or Stockholder or any of their Affiliates upon
consummation of the transactions contemplated by this Agreement.
4.06 LITIGATION. There is no Proceeding pending against, or to the
Knowledge of Buyer, threatened against or affecting, Buyer before any court or
arbitrators or any governmental body, agency or official that in any matter
challenges or seeks to prevent, enjoin, alter or materially delay the
transactions contemplated by this Agreement.
4.07 PRESENT INTENTION REGARDING MISREPRESENTATIONS. Buyer has no
present intention to assert any claim against Seller or Stockholder relating to
any inaccuracy or misrepresentation in or breach of any representation or
warranty of Seller or Stockholder contained herein.
ARTICLE V
COVENANTS OF STOCKHOLDER AND SELLER
5.01 CONDUCT OF THE OEM BUSINESS. From the date hereof until the
Closing Date, Seller shall, and Stockholder shall cause the Company to, conduct
the OEM Business in the ordinary course and in substantially the same manner as
it has prior to the date of this Agreement and agrees, other than in the
ordinary course of business, not to enter into any material agreements or take
any other significant actions without the prior written consent of Buyer, which
shall not be unreasonably withheld. Seller shall use its reasonable efforts to
preserve intact the OEM Business and the OEM Business organizations and
relationships and goodwill of Seller with third parties and keep available the
services of the present OEM Employees. Without limiting the generality of the
foregoing and except as otherwise expressly provided in this Agreement, from the
date hereof until the Closing Date:
(a) Seller will, and Stockholder will cause the Company to:
(i) (A) maintain the assets of the OEM Business in the
ordinary course of business consistent with past practice in operating order and
condition, reasonable wear and tear excepted, (B) promptly repair, restore or
replace any assets of the OEM Business in the ordinary course of business
consistent with past practice, (C) upon any damage, destruction or loss to any
of the assets of the OEM Business, apply any and all insurance proceeds received
with respect thereto to the repair, replacement and restoration thereof prior to
the Closing Date to the condition of the assets of the OEM Business before such
event (or in lieu of such repair, replacement and restoration, pay such
insurance proceeds to Buyer upon the Closing), (D) use its best efforts to
obtain, prior to the Closing Date, all Required Approvals and Consents, and (E)
take all actions reasonably necessary to be in compliance with, and to maintain
the effectiveness of, all material Permits;
(ii) comply with all material Applicable Laws relating to
the OEM Business;
27
(iii) promptly notify Buyer in writing of (A) any action,
event, condition or circumstance, or group of actions, events, conditions or
circumstances, that results in, or could reasonably be expected to result in, a
Material Adverse Effect, other than changes in general economic conditions, (B)
the commencement of any material Proceeding by or against the Company or
Stockholder relating to the OEM Business, or Seller or Stockholder becoming
aware of any threat, claim, action, suit, inquiry, proceeding, notice of
violation, demand letter, subpoena, government audit or disallowance that could
reasonably be expected to result in a material Proceeding relating to the OEM
Business, and (C) the occurrence of any breach by Seller or Stockholder of any
representation or warranty, or any covenant or agreement, contained in this
Agreement;
(b) without Buyer's prior consent, which shall not be
unreasonably withheld, Seller will not, and Stockholder shall not permit the
Company to, do any of the following and will not agree to:
(i) purchase or otherwise acquire assets for the OEM
Business from any other Person other than in the ordinary course of business;
(ii) sell, assign, lease, license, transfer or otherwise
dispose of, or mortgage, pledge or encumber, any of the assets of the OEM
Business except in the ordinary course of business consistent with past
practices;
(iii) enter any agreement or arrangement with respect to
the OEM Business that requires or allows payment, acceleration of payment or
incurrence of Liabilities, or the rendering of services by Seller outside the
ordinary course of business;
(iv) amend or modify in any material respect or terminate
any Scheduled Contract or any other Contract entered into by Seller after the
date hereof which, if in existence on the date hereof, would be required to be
set forth in SCHEDULE 3.13(a) as a Scheduled Contract (each, a "Subsequent
Material Contract");
(v) make or commit to make any capital expenditure or group
of related capital expenditures in connection with the OEM Business in excess of
$100,000, other than capital expenditures expressly required under any Scheduled
Contract;
(vi) enter into or commit or propose to enter into any
Subsequent Material Contract;
(vii) except as set forth on SCHEDULE 5.01, (A) increase
the rate or terms of compensation payable or to become payable to any OEM
Employee except in the ordinary course of business, (B) pay or agree to pay to
any OEM Employee any pension, retirement allowance or other employee benefit not
provided for by any Employee Plan, Benefit Arrangement or Employment Agreement
set forth in the Schedules hereto, (C) commit itself to any additional pension,
profit sharing, bonus, incentive, deferred compensation, stock purchase, stock
option, stock appreciation right, group insurance, severance pay, continuation
pay, termination pay, retirement or other employee benefit plan, agreement or
arrangement for the
28
benefit of OEM Employees, or increase the rate or terms of any Employee Plan or
Benefit Arrangement for the benefit of OEM Employees, (D) enter into any
employment agreement with or for the benefit of any OEM Employee, (E) increase
the rate of compensation under or otherwise change the terms of any employment
agreement set forth in SCHEDULE 3.13(a), or (F) hire or agree to hire any
management personnel for the OEM Business;
(viii) make any material change in its accounting
principles, methods or practices relating to the OEM Business or in the manner
it keeps its books and records relating to the OEM Business or any material
change of its current practices with regard to sales, receivables, payables or
accrued expenses that would affect the timing of recognition of income,
collection of receivables or payment of payables relating to the OEM Business;
(ix) amend the Share Purchase Agreement or waive any rights
of Seller or U.K. Seller thereunder; and
(x) enter into any agreements to do any of the foregoing.
5.02 ACCESS TO INFORMATION. Subject to compliance with Applicable
Laws, from the date hereof until the Closing Date, Seller will, and Stockholder
will cause the Company to, and Stockholder will, promptly (a) give Buyer and its
counsel, financial advisors, auditors and other authorized representatives
reasonable access to the offices, properties, books and records relating to the
OEM Business upon reasonable prior notice, (b) furnish to Buyer and its counsel,
financial advisors, auditors and other authorized representatives such
information relating to the OEM Business as Buyer may reasonably request, and
(c) instruct the directors, officers, employees, counsel, auditors and financial
advisors of the Company and Stockholder to cooperate with Buyer and its counsel,
financial advisors, auditors and other authorized representatives in their
investigation of the Company and the OEM Business.
5.03 COMPLIANCE WITH TERMS OF REQUIRED APPROVALS AND CONSENTS. On and
after the Closing Date, Stockholder and Seller shall comply at their own expense
with all conditions and requirements affecting Stockholder or Seller set forth
in all Required Approvals and Consents as necessary to keep the same in full
force and effect assuming continued compliance with the terms thereof by Buyer
5.04 MAINTENANCE OF INSURANCE POLICIES. Between the date hereof and
the Closing Date, Seller shall not, and Stockholder shall cause the Company to
not, take or fail to take any action if such action or inaction, as the case may
be, would adversely affect the applicability of any Insurance Policies with
respect to the period of time ending on the Closing Date.
5.05 ADMINISTRATION OF ACCOUNTS. All payments and reimbursements
received by Seller after the Closing Date from any third party with respect to
the Transferred Assets shall be held by Seller in trust for the benefit of Buyer
and, immediately upon receipt by Seller of any such payment or reimbursement,
Seller shall pay, or cause to be paid, over to Buyer the amount of such payment
or reimbursement without right of set off.
29
5.06. CHANGE OF NAME. Within three Business Days after the Closing
Date, Seller shall amend its Articles of Incorporation so as to change its
corporate name to a name dissimilar to its current name and thereafter will not
use such name or any "DBA" name used by the OEM Business prior to the Closing,
other than any DBA name that includes the name "Xxxx Xxxxx," all of which "Xxxx
Xxxxx" DBA names will be retained by Seller. As promptly as practicable after
the Closing Date, but in no event more than 30 days thereafter, Seller shall
file in all jurisdictions in which it is qualified to do business any documents
necessary to reflect such change in its corporate name and to abandon any DBA
name that was used by the OEM Business prior to the Closing other than the
"Xxxx Xxxxx" DBA names.
5.09 SATISFACTION OF EXCLUDED LIABILITIES. Seller shall satisfy and
discharge or cause to be satisfied and discharged all of the Excluded
Liabilities in the ordinary course of business consistent with past practices,
except for any Excluded Liability that Seller is contesting in good faith.
5.10 SECURITIES EXCHANGE ACT FINANCIAL STATEMENTS. Seller understands
that following the Closing Date Buyer will be required to file with the
Securities and Exchange Commission a periodic report on Form 8 K (i) disclosing
the purchase of the Transferred Assets in response to Item 2 of Form 8-K and
(ii) setting forth certain financial statements regarding the Transferred Assets
pursuant to Item 7 of Form 8-K. At or prior to the Closing, Seller shall
deliver to Buyer such financial statements as are called by Form 8-K and
Regulation S-X under the Securities Exchange Act of 1934, as amended, in order
for Buyer to file such periodic report.
ARTICLE VI
COVENANTS OF BUYER
6.01 ACCESS TO INFORMATION. Subject to compliance with Applicable
Laws, from the Closing Date until December 31, 2003, Buyer will promptly
(i) furnish to Seller and its counsel, financial advisors, auditors and other
authorized representatives such information relating to the OEM Business as
Seller may reasonably request in connection with the preparation of Tax Returns,
and (ii) instruct the directors, officers, employees, counsel, auditors and
financial advisors of Buyer to cooperate in all reasonable respects with Seller
and its counsel, financial advisors, auditors and other authorized
representatives in connection with the preparation of Tax Returns. After the
Closing Date, in the event that Buyer intends to destroy any documents that
contain or otherwise reflect information in connection with the OEM Business for
any period prior to the Closing Date, Buyer will provide written notice to
Seller of its intention to destroy such documents and provide Seller with the
opportunity to request that such documents instead be delivered to Seller. Any
information or documents provided to Seller pursuant to this Section 6.01 shall
be held by Seller pursuant to Section 7.04.
6.02 USE OF NAMES. Within three Business Days after the Closing Date,
Buyer shall cause the Mexican Joint Venture to take all steps necessary to
remove the words "Xxxx Xxxxx" from its name and thereafter Buyer and its
Affiliates will not use the name "Xxxx Xxxxx" in any form or fashion.
30
6.03 U.K. ENVIRONMENTAL MATTER. Buyer shall be responsible,
without right of reimbursement from Seller, for 50% of the first L100,000 of
Environmental Liability claims of the type covered by paragraph 2.1.3 of that
certain Environmental Deed of Indemnity dated 10 October 1997 among Seller,
U.K. Seller, ADL and the Vendors, as such Deed existed on the date of its
execution, a true and correct copy of which has been delivered to Buyer.
6.04 SALES TAX PERMITS. Prior to Closing, Buyer will use its
reasonable best efforts to obtain and furnish to Seller (i) an appropriate
"sales tax permit" from the Oklahoma Tax Commission and similar permits or
qualifications from the relevant taxing authority of each other jurisdiction
where the sale of property pursuant to this Agreement is deemed to take
place, and (ii) such other documents, affidavits and instruments, as may be
necessary to authorize Seller to not collect sales, use or other transfer
taxes pursuant to the applicable jurisdiction's statutes on the basis that
certain of the property being sold to Buyer by Seller pursuant to this
Agreement is a sale for resale or is eligible for some other exemption.
ARTICLE VII
COVENANTS OF ALL PARTIES
7.01 FURTHER ASSURANCES. Subject to the terms and conditions of
this Agreement, each party will use all reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary
or desirable under Applicable Law to consummate the transactions contemplated
by this Agreement. Buyer, Seller and Stockholder agree to execute and
deliver such other documents, certificates, agreements and other writings and
to take such other actions as may be reasonably necessary or desirable in
order to consummate or implement expeditiously the transactions contemplated
by this Agreement.
7.02 CERTAIN FILINGS. The parties hereto shall cooperate with one
another in determining whether any action by or in respect of, or filing
with, any Governmental Authority is required or reasonably appropriate, or
any action, consent, approval or waiver from any party to any Contract is
required or reasonably appropriate, in connection with the consummation of
the transactions contemplated by this Agreement. Subject to the terms and
conditions of this Agreement, in taking such actions or making any such
filings, the parties hereto shall furnish information required in connection
therewith and seek timely to obtain any such actions, consents, approvals or
waivers. Without limiting the foregoing, the parties hereto shall each
promptly complete and file all reports and forms, and respond to all requests
or further requests for additional information, if any, as may be required or
authorized under the HSR Act.
7.03 PUBLIC ANNOUNCEMENTS. Up to (and including) the Closing Date,
the parties agree that they will not make any disclosure with respect to this
Agreement or the transactions contemplated hereby or cause to be publicized
in any manner whatsoever by way of interviews, responses to questions or
inquiries, press releases or otherwise any aspect of this Agreement or the
transactions contemplated hereby without prior written notice to and approval
of the other parties hereto, unless such party reasonably concludes that such
release of information is required by Applicable Law or Nasdaq regulations,
and the parties hereto cannot reach agreement upon a mutually acceptable form
of release. Notwithstanding the foregoing, the parties hereto may, on a
confidential basis, advise their respective agents, accountants, attorneys,
31
investment advisors and financing sources with respect to the contents of
this Agreement and the transactions contemplated hereby.
7.04 CONFIDENTIALITY.
(a) Stockholder and Seller will, and will cause their
Affiliates and representatives to, treat any data and information regarding
the OEM Business or Buyer or any of their Affiliates confidentially and with
commercially reasonable care and discretion, and will not disclose any such
information to third parties; PROVIDED, HOWEVER, that the foregoing shall not
apply to (i) information in the public domain or that becomes public through
disclosure by any party other than Stockholder, Seller or their Affiliates or
representatives, so long as such other party is not in breach of a
confidentiality obligation, (ii) information that is required to be disclosed
by Applicable Law, (iii) information required to be disclosed to obtain any
Required Approvals and Consents, or (iv) any disclosure of such information
in litigation between the parties hereto; PROVIDED, HOWEVER, that disclosure
pursuant to clause (ii), (iii) or (iv) may be made only to the extent
necessary to satisfy the permitted purpose.
(b) Buyer will, and will cause its Affiliates and
representatives to, treat any data and information obtained with respect to
Stockholder and the Company confidentially and with commercially reasonable
care and discretion, and will not disclose any such information to third
parties; PROVIDED, HOWEVER, that the foregoing shall not apply to (i)
information in the public domain or that becomes public through disclosure by
any party other than Buyer or its Affiliates or representatives, so long as
such other party is not in breach of a confidentiality obligation, (ii)
information available to Buyer or its Affiliates or representatives on a
non-confidential basis prior to its disclosure pursuant to this Agreement,
(iii) information that is required to be disclosed by Applicable Law or
Nasdaq regulations, (iv) information required to be disclosed to obtain any
Required Approvals and Consents, (v) any disclosure of such information in
litigation between the parties hereto, (vi) information regarding the OEM
Business disclosed after the Closing Date, or (vii) information disclosed to
prospective lenders in connection with Buyer's financing of the Purchase
Price; PROVIDED, HOWEVER, that disclosure pursuant to clause (iii), (iv), (v)
or (vii) may be made only to the extent necessary to satisfy the permitted
purpose.
(c) In the event that the Closing fails to take place and
this Agreement is terminated, each party, upon the written request of another
party, will, and will cause its representatives to, promptly deliver to the
requesting party any and all documents or other materials furnished by the
requesting party or any of its Affiliates in connection with this Agreement
without retaining any copies thereof. In the event of such request, all
other documents, whether analyses, compilations or studies, that contain or
otherwise reflect the information furnished by the requesting party shall be
destroyed by the other party or shall be turned over to the requesting party,
and the other party shall confirm to the requesting party in writing that all
such materials have been turned over or destroyed. No failure or delay by
the requesting party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
right, power or privilege hereunder.
32
(d) The parties hereto recognize and agree that in the event
of a breach of this Section 7.04, money damages would not be an adequate
remedy for such breach and, even if money damages were adequate, it would be
impossible to ascertain with any degree of accuracy the amount of damages
sustained therefrom. Accordingly, if there should be a breach or threatened
breach of this Section 7.04, the nonbreaching party and its Affiliates shall
be entitled to an injunction restraining the breaching party from any breach
without showing or proving actual damage sustained by the nonbreaching party
or its Affiliates. Nothing in the preceding sentence shall limit or otherwise
affect any remedies that the nonbreaching party and its Affiliates may
otherwise have under Applicable Law.
7.05 TAXES.
(a) All Taxes imposed in connection with the sale of the
Transferred Assets shall be borne by Seller except for those Taxes set forth
on Schedule 7.05, which shall be borne by Buyer.
(b) Seller agrees that no new elections with respect to Taxes
affecting the Transferred Assets or any changes in current elections with
respect to Taxes affecting the Transferred Assets shall be made after the
date of this Agreement without the prior written consent of Buyer.
(c) Buyer and Seller shall (i) provide to each other such
assistance as may reasonably be requested in connection with the preparation
of any Tax Return relating to the OEM Business and the conduct of any audit
or other examination by any taxing authority or in connection with judicial
or administrative proceedings relating to any liability for Taxes relating to
the OEM Business, (ii) retain all records or other information that may be
relevant to the preparation of any Tax Returns relating to the OEM Business,
or the conduct of any audit or examination, or other tax proceeding relating
to the OEM Business, and (iii) retain all relevant documents, including prior
year's Tax Returns relating to the OEM Business, supporting work schedules
and other records or information that may be relevant to such returns and
shall not destroy or otherwise dispose of any such records without the prior
written consent of the other party.
(d) Seller shall provide Buyer with all tax clearance
certificates or similar documents that may be required by any state or local
taxing authority in order to relieve Buyer of any obligations to withhold any
portion of the Purchase Price.
(e) Seller shall keep Buyer fully and timely informed with
respect to the commencement, status and nature of any administrative or
judicial proceedings that could reasonably be expected to affect the Tax
Liability of Buyer with respect to the OEM Business.
(f) Buyer shall keep Seller fully and timely informed with
respect to the commencement, status and nature of any administrative or
judicial proceedings that could reasonably be expected to affect the Tax
Liability of Buyer with respect to the OEM Business.
33
(g) If Buyer, in Buyer's sole discretion, shall request,
Seller shall (i) assist Buyer in transferring the unemployment tax experience
rating of Seller, (ii) cooperate with Buyer to take all actions reasonably
necessary to effect and preserve such transfer, and (iii) take no position
inconsistent with such transfer. Seller shall provide Buyer with all
relevant information necessary to determine whether such transfer is in
Buyer's best interest.
7.06 LEASES. At the Closing Seller, as lessor, and Buyer, as
lessee, shall enter into leases in the forms of EXHIBITS B and C hereto. The
monthly rental rate to be paid under each such lease shall be equal to the
"market rate" as established prior to the Closing by a MAI appraiser selected
by the mutual agreement of Seller and Buyer and having experience in
appraising properties in the area of the location in question. The appraiser
may not be Associated With Buyer, Seller, Stockholder of any of the
Principals. The fee of the appraiser shall be shared equally by Buyer and
Seller.
7.07 ASSISTANCE, NONCOMPETION AND GUARANTY AGREEMENT. At the
Closing, Buyer, Seller, Stockholder and the Principals shall enter into an
Assistance, Noncompetition and Guaranty Agreement substantially in the form
of EXHIBIT D hereto. Failure of any of the Principals to enter into such
agreement shall constitute a breach of this Agreement by Seller and
Stockholder.
7.08. EMPLOYEES AND EMPLOYEE BENEFIT MATTERS.
(a) OFFERS OF EMPLOYMENT AND BENEFITS FOR OEM EMPLOYEES.
(i) Buyer agrees that it will offer employment to all of
the OEM Employees and shall hire all such OEM Employees who accept such offer
of employment (the "Hired OEM Employees") on the same terms and conditions
that are applicable to such employees as of the Closing Date. The offer of
employment shall also extend to any OEM Employees who are not currently
performing services for Seller because of absence due to injuries covered by
workers' compensation or who are otherwise on any authorized leave of absence
(the "Absent OEM Employees"). Prior to Closing, Seller will provide to Buyer
a list of OEM Employees, including the Absent OEM Employees. Through July
31, 1998, Buyer shall continue to pay to all of the Hired OEM Employees wages
and salaries and other forms of compensation at the same rates as were being
paid by Seller as of the Closing Date, and Buyer will provide to the Hired
OEM Employees the same level and value of employee benefit plans, programs
and arrangements that Seller had been providing to the Hired OEM Employees as
of the Closing Date, other than Seller's bonus plans and retiree medical
plans, as described on SCHEDULE 7.08 attached hereto ("Buyer's Benefit
Plans"), PROVIDED, HOWEVER, that Buyer will provide a bonus plan comparable
to Seller's bonus plan from the Closing Date through December 31, 1998.
After July 31, 1998, Buyer may (A) amend, terminate or otherwise modify
Buyer's Benefit Plans in accordance with the terms and provisions thereof and
(B) modify the terms of employment of the Hired OEM Employees.
(ii) Seller currently sponsors a 401(k)/Profit Sharing Plan
("Seller's 401(k) Plan"). In order to facilitate the obligation of Buyer to
provide Buyer's Benefit Plans as provided under this Section 7.08(a), as of the
Closing Date, Seller will allow Buyer to
34
adopt Seller's 401(k) Plan as a participating employer and to permit the
Hired OEM Employees to continue to participate in or begin participation in
Seller's 401(k) Plan through at least July 31, 1998, but in no event longer
than through December 31, 1998. During the period that Buyer is a
participating employer in Seller's 401(k) Plan, Seller's 401(k) Plan shall be
considered a "multiple employer plan" and Seller will administer Seller's
401(k) Plan on behalf of Buyer and the Hired OEM Employees until such time as
the accounts (including loan accounts) (the "Accounts") of the Hired OEM
Employees or any other employees of Buyer who are covered under Seller's
401(k) Plan (such employees of Buyer and the Hired OEM Employees being the
"Covered Employees") are directly transferred to Buyer's 401(k) Plan which
meets the requirements of Sections 401(a), 401(k) and 501(a) of the Code at
the time of such transfer ("Buyer's 401(k) Plan"). The direct transfer of
the Accounts from Seller's 401(k) Plan to Buyer's 401(k) Plan shall occur
within a reasonable time after July 31, 1998, but in no event later than
December 31, 1998. The Accounts and all future contributions made by or on
behalf of the Covered Employees will be held in a separate trust for the
benefit of the Covered Employees which is part of Seller's 401(k) Plan.
Further, due solely to the consummation of the transaction described in this
Agreement, there shall be no distribution made to the Hired OEM Employees
from Seller's 401(k) Plan. Buyer agrees to pay to Seller and the
administrator of Seller's 401(k) Plan a reasonable fee for the administration
of Seller's 401(k) Plan as adopted by the Buyer with respect to the Covered
Employees. Until the Accounts are transferred from Seller's 401(k) Plan to
Buyer's 401(k) Plan, as provided herein, Buyer will allow the Hired OEM
Employees who have outstanding loans in Seller's 401(k) Plan to continue to
remit to Seller's 401(k) Plan the required payments under such loans by
payroll deduction from wages and salary paid by Buyer to the Hired OEM
Employees. As of the Closing Date and the consummation of the transaction
provided for in this Agreement, all Hired OEM Employees, if not sooner
vested, will be 100% vested and nonforfeitable in their respective Accounts.
After the transfer of the Accounts, they shall be held, administered and
distributed in accordance with Buyer's 401(k) Plan. Buyer's 401(k) Plan
shall provide or will be amended to provide with respect to the Accounts of
the OEM Hired Employees the same payment options, optional forms of benefits
and other significant provisions that are contained in Seller's 401(k) Plan
and would be classified as "protected benefits" under Section 411 of the Code
and regulations issued thereunder. The transfer of the Accounts from
Seller's 401(k) Plan to Buyer's 401(k) Plan will be made in a manner that
will continue the qualified status of each such plan under the applicable
provisions of the Code.
(iii) Buyer will recognize and credit the prior
employment service of the Hired OEM Employees with Seller for purposes of
eligibility and vesting with respect to Buyer's Benefit Plans. Further,
Buyer shall cause to be waived any pre-existing condition clause that would
preclude any of the Hired OEM Employees from being eligible to participate in
Buyer's medical plan. It is the intent of Seller and Buyer that the Hired
OEM Employees should have no interruption in their participation in Buyer's
Benefit Plans in connection with commencement of employment with Buyer.
(iv) Notwithstanding the foregoing, the Hired OEM
Employees will be employed at the will of Buyer and after the Closing Date
Buyer will be free to terminate
35
the employment of any Hired OEM Employee in Buyer's sole discretion, subject
to Applicable Law and the terms of any written employment agreement between
Buyer and such employee.
(b) LIABILITY FOR WAGES AND BENEFITS. Seller will be
responsible for all liabilities for vested accrued benefits and claims
incurred but not yet paid as of the Closing Date under any employee welfare
plan (as defined in Section 3(1) of ERISA), any Employee Pension Benefit Plan
or any other employee benefit plans, programs or arrangement of Seller that
provide benefits for OEM Employees, their eligible dependents or their
beneficiaries, and for the payment of any wages accrued as of Closing Date,
severance or other termination-related obligations to OEM Employees as may be
required by Applicable Law or otherwise. Buyer will be responsible with
respect to all liabilities arising after the Closing Date with respect to any
of the Hired OEM Employees that relate to or arise from the employment of the
Hired OEM Employees by Buyer, including any obligation that Buyer may have
with respect to (i) payment of any benefits that become payable under Buyer's
Benefit Plans, (ii) payment of any wages accrued after the Closing Date, and
(iii) severance or other termination-related obligation to Hired OEM
Employees as may be required by Applicable Law or otherwise.
(c) OEM EMPLOYEE INFORMATION. Buyer acknowledges that prior
to Closing it may have access to personnel, benefit or other confidential
information pertaining to the OEM Employee pursuant to Section 5.02 or
otherwise. Buyer agrees that it has maintained and used and at all times in
the future shall maintain and use such information only in accordance with
Applicable Law.
(d) WORKERS' COMPENSATION. Seller will bear the entire cost
and expense of all workers' compensation claims arising out of injuries
identifiably sustained by Hired OEM Employees on or before the Closing Date.
Buyer will bear the entire cost and expense of all workers' compensation
claims arising out of injuries identifiably sustained by Hired OEM Employees
after the Closing Date. Buyer shall bear the entire cost and expense of all
workers' compensation claims arising out of injuries without an identifiable
date of occurrence and that are alleged to have arisen either before or after
the Closing Date. After the Closing Date, Buyer will use its reasonable best
efforts to facilitate the return to work of any Hired OEM Employees who were
on disability leave on the Closing Date as a result of a work-related injury
or illness.
ARTICLE VIII
CONDITIONS TO CLOSING
8.01 CONDITIONS TO OBLIGATION OF BUYER. The obligation of Buyer
to consummate the transactions contemplated hereby is subject to the
satisfaction of each of the following conditions:
(a) (i) Seller and Stockholder shall each have performed and
satisfied in all material respects each of their material obligations
hereunder required to be performed and satisfied by any of them on or prior
to the Closing Date, (ii) each of the representations and warranties of
Seller and Stockholder contained in this Agreement shall be true and correct
in all material respects, and shall not contain any misstatement or omission
that would make any such
36
representation or warranty materially misleading, at and as of the Closing
Date with the same force and effect as if made as of the Closing Date, and
(iii) Buyer shall have received certificates signed by Stockholder and a duly
authorized executive officer of Seller to the foregoing effect and to the
effect that the conditions specified in this Section 8.01 have been satisfied.
(b) All Required Approvals and Consents (including such
consents as are required under Subsequent Material Contracts) shall have been
obtained without the imposition of any conditions that are or would become
applicable to the OEM Business, the Transferred Assets, Buyer or any of its
Affiliates after the Closing that Buyer in good faith reasonably determines
would be materially burdensome upon the OEM Business, the Transferred Assets,
Buyer or any of its Affiliates or their respective businesses substantially
as such businesses have been conducted prior to the Closing Date. All such
Required Approvals and Consents shall be in effect; no Proceedings or other
action shall have been instituted or threatened by any Person with respect
thereto as to which, in Buyer's good faith opinion, there is a material risk
of termination or revocation of, or material adverse (as to the OEM Business,
the Transferred Assets or Buyer) modification of, any such Required Approval
or Consent; all applicable waiting periods with respect to such Required
Approvals and Consents shall have expired; and all conditions and
requirements prescribed by Applicable Law or by such Required Approvals and
Consents to be satisfied on or prior to the Closing Date shall have been
satisfied to the extent necessary such that all such Required Approvals and
Consents are, and will remain, in full force and effect assuming continued
compliance with the terms thereof after the Closing.
(c) The consummation of the transactions contemplated by this
Agreement shall not violate any Applicable Law. No temporary restraining
order, preliminary or permanent injunction, cease and desist order or other
order issued by any court of competent jurisdiction or any competent
Governmental Authority or any other legal restraint or prohibition preventing
the consummation of the transactions contemplated hereby, or imposing Damages
on Buyer in respect thereto, shall be in effect, and there shall be no
pending or threatened actions or proceedings by any Governmental Authority
(or determinations by any Governmental Authority) or by any other Person
(i) challenging or in any manner seeking to restrict or prohibit the
consummation of the transactions contemplated hereby, or to impose conditions
that Buyer in good faith determines would be materially burdensome upon the OEM
Business, the Transferred Assets, Buyer or any of its Affiliates or their
respective businesses substantially as such businesses have been conducted
prior to the Closing Date or as such businesses, as of the date hereof, would
be reasonably expected to be conducted after the Closing Date.
(d) Since the date hereof, there shall not have been any
event, occurrence, development or state of circumstances or facts (including
any damage, destruction or other casualty loss, but excluding any event,
occurrence, development or state of circumstances or facts or change
resulting from changes in general economic conditions) affecting the Company
or the OEM Business that has had or that may be reasonably expected to have,
either alone or together with all such events, occurrences, developments,
states of circumstances or facts or changes, a Material Adverse Effect.
37
(e) Seller, as lessor, shall have executed and delivered to
Buyer the real property leases called for by Section 7.06.
(f) Seller, Stockholder and each of the Principals shall have
executed and delivered to Buyer the Assistance, Noncompetition and Guaranty
Agreement called for by Section 7.07.
(g) Buyer shall have received an opinion of McAfee & Xxxx in
a form reasonably acceptable to Buyer.
(h) As of the Closing Date, there shall exist no Liens on any
Transferred Assets.
(i) Seller shall have executed and delivered a xxxx of sale
and such other documents of assignment, transfer and conveyance (including
duly endorsed share certificates representing the outstanding shares of the
U.K. Subsidiaries and Seller's interest in the Mexican Joint Venture) as
Buyer shall reasonably request to transfer to Buyer all right, title and
interest of Seller in and to the Transferred Assets.
(j) Buyer shall have received financing on terms reasonably
acceptable to Buyer and in an amount sufficient to pay the Purchase Price and
Buyer's expenses related to the negotiation of this Agreement and the
consummation of the transactions contemplated hereby.
(k) Buyer shall have received the financial statements called
for by Section 5.10.
(l) Buyer shall have satisfied itself, in its reasonable
judgment, that both Ford Motor Company and General Motors Corporation are
willing to purchase remanufactured transmissions and related components from
Buyer after the Closing on terms and in quantities at least comparable to
those on and in which they purchased such items from Seller prior to the
Closing, PROVIDED that this condition shall be deemed to have been satisfied
as of and following February 24, 1998 unless prior to such date Buyer has
notified Seller in writing that this condition will not be satisfied.
(m) each of Xxx Xxxxxxxx, Xxxxx Xxxxx, Xxx Xxxxxx and Xxxx
Xxxxxxx shall have executed and delivered to Buyer an employment agreement in
substantially the form of EXHIBIT E hereto with such additions thereto as
Buyer and the respective employee may agree upon.
8.02 CONDITIONS TO OBLIGATION OF STOCKHOLDER AND SELLER. The
obligation of Stockholder and Seller to consummate the transactions
contemplated hereby is subject to the satisfaction of each of the following
conditions:
(a) (i) Buyer shall have performed and satisfied in all
material respects each of its material obligations hereunder required to be
performed and satisfied by it on
38
or prior to the Closing Date, (ii) each of the representations and warranties
of Buyer contained in this Agreement shall be true and correct in all
material respects, and shall not contain any misstatement or omission that
would make any such representation or warranty materially misleading, at and
as of the Closing Date with the same force and effect as if made as of the
Closing Date, and (iii) Seller shall have received certificates signed by a
duly authorized executive officer of Buyer to the foregoing effect and to the
effect that the conditions specified in this Section 8.02 have been satisfied.
(b) All Required Approvals and Consents (including such
consents as are required under Subsequent Material Contracts) shall have been
obtained without the imposition of any conditions that are or would become
applicable to Stockholder or Seller or any of their Affiliates after the
Closing that Seller in good faith reasonably determines would be materially
burdensome upon Stockholder or Seller or any of their Affiliates or their
respective businesses substantially as such businesses have been conducted
prior to the Closing Date. All such Required Approvals and Consents shall be
in effect; no Proceedings or other action shall have been instituted or
threatened by any Person with respect thereto as to which, in Seller's good
faith opinion, there is a substantial risk of termination or revocation of,
or material adverse (as to Stockholder or Seller) modification of, any such
Required Approval or Consent; all applicable waiting periods with respect to
such Required Approvals and Consents shall have expired; and all conditions
and requirements prescribed by Applicable Law or by such Required Approvals
and Consents to be satisfied on or prior to the Closing Date shall have been
satisfied to the extent necessary such that all such Required Approvals and
Consents are, and will remain, in full force and effect assuming continued
compliance with the terms thereof after the Closing.
(c) The consummation of the transactions contemplated by this
Agreement shall not violate any Applicable Law. No temporary restraining
order, preliminary or permanent injunction, cease and desist order or other
order issued by any court of competent jurisdiction or any competent
Governmental Authority or any other legal restraint or prohibition preventing
the consummation of the transactions contemplated hereby, or imposing Damages
against Stockholder or Seller in respect thereto, shall be in effect, and
there shall be no pending or threatened actions or proceedings by any
Governmental Authority (or determinations by any Governmental Authority) or
by any other Person (i) challenging or in any manner seeking to restrict or
prohibit the consummation of the transactions contemplated hereby, or to
impose conditions that Seller in good faith determines would be materially
burdensome upon Stockholder or Seller or any of their Affiliates or their
respective businesses substantially as such businesses have been conducted
prior to the Closing Date or as such businesses, as of the date hereof, would
be reasonably expected to be conducted after the Closing Date.
(e) Buyer, as lessee, shall have executed and delivered to
Seller the real property leases called for by Section 7.06.
(f) Stockholder and Seller shall have received an opinion of
Xxxxxx Xxxxxxxxxxxx, Buyer's General Counsel, in a form reasonably acceptable
to Stockholder and Seller.
39
(g) Buyer shall have executed and delivered to Seller a
Computer Services Agreement substantially in the form of EXHIBIT F hereto.
(h) Seller, U.K. Seller and Stockholder shall have received
the payments called for by Section 2.06(b).
(i) Buyer shall have executed and delivered to Seller a Lease
Assignment and Assumption Agreement for each of the Leases included in the
Transferred Assets in a form reasonably acceptable to Seller.
(j) Buyer shall have executed and delivered to Seller an
Assignment and Assumption Agreement for all Contracts included in the
Transferred Assets in a form reasonably acceptable to Seller.
(k) Buyer shall have executed and delivered to Seller,
Stockholder and the Principals the Assistance, Noncompetition and Guaranty
Agreement called for by Section 7.07.
(l) Buyer shall have obtained the permits and qualifications
called for by Section 6.04
(m) Buyer shall have executed and delivered to each of Xxx
Xxxxxxxx, Xxxxx Xxxxx, Xxx Xxxxxx and Xxxx Xxxxxxx an employment agreement in
substantially the form of EXHIBIT E hereto with such additions thereto as
Buyer and the respective employee may agree upon.
ARTICLE IX
INDEMNIFICATION
9.01 AGREEMENT TO INDEMNIFY.
(a) Subject to the limitations provided herein Buyer and its
Affiliates (collectively, the "Buyer Indemnitees") shall each be indemnified
and held harmless on a joint and several basis by Stockholder and Seller in
respect of any Damages reasonably and proximately incurred by any Buyer
Indemnitee (i) as a result of any inaccuracy or misrepresentation in or
breach of or failure to perform any representation, warranty, covenant,
agreement or obligation of Stockholder or Seller in this Agreement, or
(ii) in connection with any Excluded Liabilities. The aggregate Liability of
Stockholder and Seller under Section 9.01(a)(i) shall not exceed $43,750,000,
except in the case of Damages due to the fraud or willful misconduct of
Stockholder or Seller.
(b) Subject to the limitations provided herein, Stockholder,
Seller and their Affiliates (collectively the "Seller Indemnitees") shall each
be indemnified and held harmless by Buyer in respect of any and all Damages
reasonably and proximately incurred by any of the Seller Indemnitee as a result
of (i) any inaccuracy or misrepresentation in or breach of or failure to perform
any representation, warranty, covenant, agreement or obligation of Buyer in
40
this Agreement, (ii) Assumed Liabilities or (iii) the conduct of the OEM
Business after the Closing Date.
(c) Notwithstanding the foregoing, Buyer Indemnitees may not
seek indemnification under Section 9.01(a) for any particular claim that does
not exceed $25,000, such claim being treated as if it did not exist for
purposes of this Agreement.
(d) Notwithstanding the foregoing, Buyer Indemnitees may not
seek indemnification under Section 9.01(a) unless and until the claims in the
aggregate exceed $750,000, provided that if such threshold is exceeded, the
Buyer Indemnitees may seek indemnification hereunder only for such excess.
The foregoing limitation shall not apply to Damages relating to Excluded
Liabilities or Damages due to the fraud or willful misconduct of Stockholder
or Seller.
9.02 SURVIVAL OF REPRESENTATION, WARRANTIES AND COVENANTS.
(a) The representations and warranties contained in this
Agreement shall survive as follows:
(i) Except as otherwise provided in Section 9.02(a)(ii)
or (iii), all representations and warranties shall expire on March 31,
2000.
(ii) Notwithstanding Section 9.02(a)(i), the representations
and warranties of any party contained herein shall survive until 60 days
after the expiration of any applicable statute of limitations, including
extensions thereof, with respect to any inaccuracy or misrepresentation
arising out of fraud or willful misconduct.
(iii) Notwithstanding Section 9.02(a)(i), the
representations and warranties contained in Sections 3.15, 3.19, 3.21 and
3.23 shall survive until 60 days after the expiration of any applicable
statute of limitations, including extensions thereof.
Any cause of action for breach of a representation or warranty contained
herein shall expire and terminate on the date on which such representation or
warranty expires pursuant to this Section 9.02(a) unless the party seeking
indemnification with respect to such breach delivers to the appropriate
Indemnifying Parties written notice and a reasonably detailed explanation of
the alleged breach on or before 5:00 p.m., Central Time, on such expiration
date.
(b) The covenants contained in this Agreement to be performed
after the Closing Date shall survive without expiration unless otherwise
expressly provided in such covenant.
9.03 CLAIMS FOR INDEMNIFICATION. If any Indemnitee shall believe that
such Indemnitee is entitled to indemnification pursuant to this Article IX in
respect of any Damages, such Indemnitee shall give the appropriate Indemnifying
Party prompt written notice thereof. Any such notice shall set forth in
reasonable detail and to the extent then known the basis for such claim for
indemnification. The failure of such Indemnitee to give prompt notice of any
41
claim for indemnification shall not adversely affect such Indemnitee's right
to indemnity hereunder except to the extent that such failure materially
adversely affects the right of the Indemnifying Party to assert any
reasonable defense to such claim. The Indemnifying Party shall have 30 days
following its receipt of such notice to either acquiesce in or object to the
claim in writing. If the Indemnifying Party does not object thereto within
such 30-day period, such Indemnitee shall be entitled to be indemnified for
all Damages reasonably and proximately incurred by such Indemnitee in respect
of such claim.
9.04 DEFENSE OF CLAIMS.
(a) In connection with any claim that may give rise to
indemnity under this Article IX resulting from or arising out of any claim or
Proceeding against an Indemnitee by a Person that is not a party hereto, any
Indemnifying Party may, subject to Section 9.04(c), assume the defense of
such claim or Proceeding (unless such Indemnitee elects not to seek indemnity
hereunder for such claim) upon written notice to the relevant Indemnitee, if
all Indemnifying Parties with respect to such claim or Proceeding (i) jointly
acknowledge to the Indemnitee its right to indemnity pursuant hereto in
respect of the entirety of such claim and (ii) provide assurances, reasonably
satisfactory to such Indemnitee, that the Indemnifying Parties will be
financially able to satisfy such claim in full. Prior to the assumption by
an Indemnifying Party of the defense of any claim or Proceeding, the
Indemnitee may make such appearances and filings with respect thereto as the
Indemnitee reasonably determines to be necessary or appropriate. If the
Indemnifying Parties do not assume the defense of any claim or Proceeding
resulting therefrom in accordance with the terms of this Section 9.04(a), the
Indemnitee may defend against such claim or Proceeding, subject to Section
9.04(d), PROVIDED that the Indemnifying Parties may subsequently elect to
assume the defense of such claim or Proceeding if they provide the notice
called for by the first sentence of this Section 9.04.
(b) If the Indemnifying Parties assume the defense of any
such claim or Proceeding, the Indemnifying Parties shall select counsel
reasonably acceptable to the Indemnitee to conduct the defense of such claim
or Proceeding, shall take all steps necessary in the defense or settlement
thereof and shall at all times diligently and promptly pursue the resolution
thereof. If the Indemnifying Parties shall have assumed the defense of any
claim or Proceeding in accordance with this Section 9.04, the Indemnifying
Parties shall be authorized to consent to a settlement of, or the entry of
any judgment relating to, such claim or Proceeding, without the prior written
consent of such Indemnitee, PROVIDED that (i) the Indemnifying Parties shall
pay or cause to be paid all amounts arising out of such settlement or
judgment in accordance with the terms thereof, (ii) the Indemnifying Parties
shall not be authorized to encumber any of the assets of any Indemnitee or to
agree to any restriction that would apply to any Indemnitee or to its conduct
of business, and (iii) a condition to any such settlement shall be a complete
release of such Indemnitee and its Affiliates, officers, employees,
consultants and agents with respect to such claim. Subject to Section
9.04(c), the Indemnitee shall be entitled to participate in (but not control)
the defense of any such action, with its own counsel and at its own expense.
Each Indemnitee shall, and shall cause each of its Affiliates, officers,
employees, consultants and agents to, cooperate fully with the Indemnifying
Parties in the defense of any claim or Proceeding being defended by the
Indemnifying Parties pursuant to this Section 9.04.
42
(c) Notwithstanding Section 9.04(a), the Indemnifying Parties
may not assume the defense of any claim or Proceeding and the Indemnitee may
assume such defense if, in the reasonable opinion of the Indemnitee, there
are one or more legal defenses available to the Indemnitee that conflict with
those available to an Indemnifying Party. If the Indemnitee assumes defense
of any such claim or Proceeding pursuant to the last sentence of Section
9.04(a) or pursuant to this Section 9.04(c), (i) the Indemnifying Parties may
participate in, but not control, the defense of such claim or Proceeding, and
(ii) if the Indemnitee receives a settlement proposal from the Person
asserting such claim or instituting such Proceeding and is notified by an
Indemnifying Party that such Indemnifying Party wants to accept such
settlement proposal, the Liability of the Indemnifying Parties with respect
to such claim or Proceeding shall equal the lesser of (A) the amount offered
in such settlement proposal, (B) the amount of actual Damages of the
Indemnitee with respect to such claim or Proceeding or (C) the maximum
Liability of the Indemnifying Parties pursuant to Section 9.01(a) and any
such settlement shall expressly release the Indemnifying Parties from any
further Liability with respect to the claim.
(d) If the Indemnitee assumes the defense of any claim or
Proceeding pursuant to the last sentence of Section 9.04(a) or pursuant to
Section 9.04(c), the Indemnitee shall conduct such defense in such manner as
it shall deem appropriate, PROVIDED that the Indemnitee may not settle or
compromise any claim or Proceeding or consent to the entry of any judgment
with respect thereto without the prior written consent of the Indemnifying
Parties, which consent shall not be unreasonably withheld.
9.05 TAX EFFECT. If the payment of any Damages for the benefit of
an Indemnitee results in a reduction of Tax due and payable by such
Indemnitee (a "Tax Benefit"), then the amount of Damages payable shall be
reduced by, or, if Damages have already been paid, then the Indemnitee shall
refund to the Indemnifying Parties, an amount equal to the difference between
the actual amount of Tax due and payable by such Indemnitee with respect to
such year and the amount of Tax that would have paid by such Indemnitee
solely but for such Tax Benefit.
ARTICLE X
TERMINATION
10.01 GROUNDS FOR TERMINATION. This Agreement may be
terminated at any time prior to the Closing:
(a) by mutual written agreement of all of the parties hereto;
(b) by a party at any time following the expiration of 30
days from the date that such party has given notice to another party of any
one or more inaccuracies or misrepresentations in or breaches of the
representations or warranties made by the recipient of such notice contained
in this Agreement that, if not cured prior to the Closing Date, would give
the notifying party grounds not to close under Section 8.01 or 8.02, as the
case may be, when taken into account with all other uncured inaccuracies or
misrepresentations in or breaches of such representations or warranties as to
which the notifying party shall have given notice to previously pursuant to
this clause (b); PROVIDED, HOWEVER, that no termination under this clause
43
(b) shall take effect if such inaccuracies, misrepresentations or breaches
shall have been cured in all material respects within such 30-day period;
(c) by a party at any time following the expiration of 30
days from the date that such party has given written notice to another party
of the failure by the recipient of such notice to perform and satisfy in any
material respect any of its material obligations under this Agreement
required to be performed and satisfied by it on or prior to the Closing Date,
or the failure to perform and satisfy any other obligations of the recipient
of such notice under this Agreement if the aggregate of all such other
failures shall be material; PROVIDED, HOWEVER, that no termination under this
clause (c) shall take effect if such breaches or failures shall have been
cured in all material respects within such 30-day period;
(d) by any party hereto, if the Closing shall not have been
consummated by the Outside Date; PROVIDED, HOWEVER, that a party may not
terminate this Agreement pursuant to this clause (d) if the Closing shall not
have been consummated by reason of any inaccuracy or misrepresentation in the
representations or warranties made in this Agreement by such party or any
failure of such party or any of his or its Affiliates to perform and satisfy
in all material respects any of his or its respective covenants or
obligations contained in this Agreement; or
(e) by any party hereto if any Applicable Law shall hereafter
be enacted or become applicable that makes the transactions contemplated
hereby illegal or otherwise prohibited, or if any judgment, injunction, order
or decree enjoining any party hereto from consummating the transactions
contemplated hereby is entered, and such judgment, injunction, order or
decree shall become final and nonappealable.
10.02 EFFECT OF TERMINATION. If this Agreement is terminated as
permitted by Section 10.01, such termination shall be without liability of
any party to any other party to this Agreement; PROVIDED, HOWEVER, that if
such termination shall result from the breach by any party of its
representations, warranties or covenants contained in this Agreement, such
party shall be fully liable for any and all Damages incurred or suffered by
the other parties as a result of such failure or breach notwithstanding such
termination. The provisions of Sections 7.04, 10.02, 11.01, 11.03, 11.05
11.07, 11.08, 11.10, 11.11 and 11.12 shall survive any termination of this
Agreement pursuant to Section 10.1.
ARTICLE XI
MISCELLANEOUS
11.01 NOTICES. All notices, requests, demands, claims and other
communications hereunder shall be in writing and shall be deemed duly given
(i) when delivered by personal delivery, (ii) five Business Days after having
been sent by registered or certified mail, return receipt requested, postage
prepaid and addressed to the intended recipient as set forth below, (iii) the
day following being sent through an overnight delivery service in
circumstances in which such service guarantees next day delivery, or
(iv) once such notice or other communication is transmitted to the telecopier
number specified below and the appropriate answer back or
44
telephonic confirmation is received, PROVIDED that such notice or other
communication is promptly thereafter mailed in accordance with the provisions
of clause (ii) above:
If to Seller or Stockholder:
Xxxx Xxxxx Industries
000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attn.: Xxxx X. Xxxx
with a copy to:
McAfee & Xxxx
Two Leadership Square, 10th Floor
000 Xxxxx Xxxxxxxx
Xxxxxxxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attn.: Xxxx X. Xxxxxx, Esq.
If to Buyer:
Aftermarket Technology Corp.
000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attn.: General Counsel
Any party may give any notice, request, demand, claim or other communication
hereunder using any other means (including ordinary mail or electronic mail),
but no such notice, request, demand, claim or other communication shall be
deemed to have been duly given unless and until it actually is received by
the individual for whom it is intended. Any party may change the address to
which notices, requests, demands, claims and other communications hereunder
are to be delivered by giving the other parties notice in the manner herein
set forth.
11.02 AMENDMENTS; NO WAIVERS.
(a) Any provision of this Agreement may be amended or waived
if, and only if, such amendment or waiver is in writing and signed, in the
case of an amendment, by all parties hereto, or in the case of a waiver, by
the party against whom the waiver is to be effective.
(b) No waiver by a party of any default, misrepresentation or
breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default, misrepresentation or
breach of warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent occurrence. No failure
45
or delay by a party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by
law.
11.03 EXPENSES. Except as otherwise provided herein, all costs and
expenses incurred in connection with this Agreement shall be paid by the
party incurring such cost or expense.
11.04 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. No party hereto may assign either this
Agreement or any of its rights, interests or obligations hereunder without
the prior written approval of each other party, which approval shall not be
unreasonably withheld. Notwithstanding the foregoing, Buyer may assign its
right to purchase some or all of the Transferred Assets to one or more wholly
owned subsidiaries of Buyer, PROVIDED that such assignment shall not relieve
Buyer of any of its obligations hereunder.
11.05 GOVERNING LAW. Except as otherwise provided in Section 11.11
with respect to arbitration under the Federal Arbitration Act, this Agreement
shall be construed in accordance with and governed by the internal laws
(without reference to choice or conflict of laws) of the State of Oklahoma.
11.06 COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have
received a counterpart hereof signed by the other parties hereto.
11.07 ENTIRE AGREEMENT. This Agreement (including the Schedules
and Exhibits referred to herein, which are hereby incorporated by reference)
constitutes the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior oral and written and all
contemporaneous oral agreements, understandings and negotiations between the
parties with respect to the subject matter of this Agreement. Neither this
Agreement nor any provision hereof is intended to confer upon any Person
other than the parties hereto any rights or remedies hereunder.
11.08 CONSTRUCTION. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof. All references to an Article or Section include all
subparts thereof. Neither party hereto, nor its respective counsel, shall be
deemed the drafter of this Agreement, and all provisions of this Agreement
shall be construed in accordance with their fair meaning, and not strictly
for or against either party hereto. Matters disclosed on one or more
schedules attached hereto and made a part hereof shall be deemed to have been
disclosed on each and every relevant schedule to the extent necessary to make
any other statement, representation or warranty contained herein not
misleading.
46
11.09 SEVERABILITY. If any provision of this Agreement, or the
application thereof to any Person, place or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other Persons,
places and circumstances shall remain in full force and effect only if, after
excluding the portion deemed to be unenforceable, the remaining terms shall
provide for the consummation of the transactions contemplated hereby in
substantially the same manner as originally set forth at the later of the
date this Agreement was executed or last amended.
11.10 THIRD PARTY BENEFICIARIES. No provision of this Agreement
shall create any third party beneficiary rights in any Person, including any
employee of Buyer or employee or former employee of Seller or any Affiliate
thereof (including any beneficiary or dependent thereof).
11.11 ARBITRATION OF CLAIMS.
(a) Except as otherwise specifically provided elsewhere in
this Agreement, any dispute or difference between or among the parties
arising out of this Agreement or the transactions contemplated hereby,
including, without limitation, any dispute between any Indemnitee and any
Indemnifying Party under Article IX which the parties are unable to resolve
themselves, shall be submitted to and resolved by arbitration pursuant to and
in accordance with the Federal Arbitration Act and the Commercial Arbitration
Rules of the American Arbitration Association in effect on the date of the
initial request that gave rise to the dispute to be arbitrated (the "AAA
Rules").
(b) Such arbitration shall be conducted by a panel of three
arbitrators, which shall be selected from a list of arbitrators pursuant to
and in accordance with the AAA Rules. Such arbitration proceeding shall be
conducted in Oklahoma. The arbitrators shall not have the authority to
modify any term or provision of this Agreement. The arbitration proceeding
shall include an opportunity for the parties to conduct discovery in advance
of the proceeding, which discovery may be limited by rules established by the
arbitrators. Notwithstanding the foregoing, the parties agree that they will
attempt, and they intend that they and the arbitrators should use their best
efforts in that attempt, to conclude such arbitration proceeding and have a
final decision from the arbitrators within 90 days from the date of selection
of the arbitrators; PROVIDED, HOWEVER, that the arbitrators shall be entitled
to extend such 90-day period one or more times to the extent necessary for
such arbitrators to place a dollar value on any claim that may be
unliquidated. The arbitrator shall not have the power or authority to award
consequential, incidental or punitive damages. The arbitrators shall
promptly deliver a written decision with respect to the dispute to each of
the parties, which shall promptly act in accordance therewith. Each party
agrees that any decision of the arbitrators shall be final, conclusive and
binding, absent fraud or manifest error, and that it will not contest any
action by any other party hereto in accordance with a decision of the
arbitrators, except on a basis of fraud or manifest error. It is
specifically understood and agreed that any party may enforce any award
rendered pursuant to the arbitration provisions of this Section 11.11 by
bringing suit in any court of competent jurisdiction.
47
(c) All fees, costs and expenses (including attorneys' fees
and expenses) incurred by the party that prevails in any such arbitration
commenced pursuant to this Section 11.11 or any judicial action or proceeding
seeking to enforce the agreement to arbitrate disputes as set forth in this
Section 11.11 or seeking to enforce any order or award of any arbitration
commenced pursuant to this Section 11.11 may be assessed against the party or
parties that do not prevail in such arbitration in such manner as the
arbitrators or the court in such judicial action, as the case may be, may
determine to be appropriate under the circumstances. All costs and expenses
attributable to the arbitrators shall be allocated among the parties to the
arbitration in such manner as the arbitrators shall determine to be
appropriate under the circumstances.
11.12 CUMULATIVE REMEDIES. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
48
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
XXXX XXXXX INDUSTRIES A LIMITED
PARTNERSHIP, a Texas limited partnership
By: The Xxxx Xxxxx Companies, Inc., General
Partner
By: /s/ Xxxx X. Xxxx
------------------------------------
Name: Xxxx X. Xxxx
Title: Treasurer
AUTOCRAFT INDUSTRIES, INC., an Oklahoma
corporation
By: /s/ Xxxx X. Xxxx
----------------------------------------
Name: Xxxx X. Xxxx
Title: Chairman and CEO
AFTERMARKET TECHNOLOGY CORP., a Delaware
corporation
By: /s/ Xxxxxx Xxxxxxxxxxxx
----------------------------------------
Xxxxxx Xxxxxxxxxxxx
Vice President
49
ACKNOWLEDGEMENTS
STATE OF OKLAHOMA )
)
COUNTY OF Oklahoma )
This instrument was acknowledged before me on February 10, 1998, by
_______ Xxxx X. Xxxx, as Treasurer of The Xxxx Xxxxx Companies, Inc., a Texas
corporation, as general partner of Xxxx Xxxxx Industries A Limited Partnership,
a Texas limited partnership.
[SEAL]
/s/ Xxxx Xxx Xxxxx
------------------------------------
Notary Public
My Commission Expires: 4-26-2000
STATE OF OKLAHOMA )
)
COUNTY OF Oklahoma )
This instrument was acknowledged before me on February 10, 1998, by
_______ Xxxx X. Xxxx, as Chairman and CEO of Autocraft Industries, Inc., an
Oklahoma corporation.
[SEAL]
/s/ Xxxx Xxx Xxxxx
------------------------------------
Notary Public
My Commission Expires: 4-26-2000
STATE OF ILLINOIS )
)
COUNTY OF DU PAGE )
This instrument was acknowledged before me on February 10, 1998, by
Xxxxxx Xxxxxxxxxxxx, as Vice President of Aftermarket Technology Corp., a
Delaware corporation.
[SEAL]
/s/ Xxxxx Xxxxx
------------------------------------
Notary Public
My Commission Expires: 12/1/2001
50
EXHIBITS
Exhibit A. . . . . . . . . . . . . . . . . . . . . . . . . Financial Statements
Exhibit B. . . . . . . . . . . . . . .Form of Real Property Lease (GM Facility)
Exhibit C. . . . . . . . . . . . .Forms of Real Property Lease (Computer Space)
Exhibit D. . . . . . Form of Cooperation, Noncompetition and Guaranty Agreement
Exhibit E. . . . . . . . . . . . . . . . . . . . . Form of Employment Agreement
Exhibit F. . . . . . . . . . . . . . . . . .Form of Computer Services Agreement
SCHEDULES
Schedule 1.01. . . . . . . . . . . . . . . . . . . . . . . . . .Permitted Liens
Schedule 2.01(b) . . . . . . . . . . . . . . . . . . . . . . . . . . .Equipment
Schedule 2.01(p) . . . . . . . . . . . . . . . . . . . . OEM Business Locations
Schedule 2.02. . . . . . . . . . . . . . . . . . . . . . . . . .Excluded Assets
Schedule 3.01. . . . . . . . . . . . . . . . . . . . . . Foreign Qualifications
Schedule 3.04. . . . . . . . . . . . . . . . . .Required Approvals and Consents
Schedule 3.07. . . . . . . . . . . . . . . . . . . . . . . .Certain Liabilities
Schedule 3.08. . . . . . . . . . . . . . . . . . . . Absence of Certain Changes
Schedule 3.09(a)(i). . . . . . . . . . . . . . . . . . . . . . . .Real Property
Schedule 3.09(a)(ii) . . . . . . . . . . . . . . . . . Personal Property Leases
Schedule 3.09(b) . . . . . . . . . . . . . . . . . . . . . . Non-Binding Leases
Schedule 3.09(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Liens
Schedule 3.09(d) . . . . . . . . . . . . . . . . . . . . . .Land-Use Regulation
Schedule 3.09(f) . . . . . . . . . . . . . . . . . . . . . . .Personal Property
Schedule 3.10. . . . . . . . . . . . . . . . . . . . . . Affiliate Transactions
Schedule 3.11. . . . . . . . . . . . . . . . . . . . . . . . . . . .Inventories
Schedule 3.12. . . . . . . . . . . . . . . . . . . . . . . . . . . . Litigation
Schedule 3.13(a) . . . . . . . . . . . . . . . . . . . . . .Scheduled Contracts
Schedule 3.13(b) . . . . . . . . . . . . . . . .Non-Binding Scheduled Contracts
Schedule 3.13(c) . . . . . . . . . . . . . . . .Primary Customers and Suppliers
Schedule 3.14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Permits
Schedule 3.15. . . . . . . . . . . . . . . . Noncompliance with Applicable Laws
Schedule 3.16. . . . . . . . . . . . . . . . . Employee Agreements and Benefits
Schedule 3.17. . . . . . . . . . . . . . . . . . . Labor and Employment Matters
Schedule 3.18. . . . . . . . . . . . . . . . . . . . . . .Intellectual Property
Schedule 3.19. . . . . . . . . . . . . . . . . . . . . . .Environmental Matters
Schedule 3.20. . . . . . . . . . . . . . . . . . . . . . . . Insurance Policies
Schedule 3.21. . . . . . . . . . . . . . . . . . . . . . . . . . . .Tax Matters
Schedule 3.22. . . . . . . . . . . . . . . . . . . . . . . .Accounts Receivable
Schedule 5.01. . . . . . . . . . . . . . . . . . . Certain Compensation Matters
Schedule 7.05. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Taxes
Schedule 7.08. . . . . . . . . . . . . . . . . . . . . . .Buyer's Benefit Plans
