Exhibit 2.3
Execution Copy 11/5/99
ASSET PURCHASE AGREEMENT
BETWEEN
GOLDEN ALUMINUM COMPANY, AS SELLER
AND
ALCOA INC., AS BUYER
Dated as of November 5, 1999
Table of Contents
Page
Article I Certain Definitions 1
Article II The Transaction 4
Section 2.1 Covenant of Purchase and Sale; Assets 4
Section 2.2 Excluded Assets 5
Section 2.3 Assumed Obligations and Liabilities 5
Section 2.4 Excluded Liabilities 6
Section 2.5 Consideration for Purchased Assets 7
Section 2.6 Accounts Receivable and Inventory Adjustment 7
Section 2.7 Closing 8
Article III Deliveries at Closing 8
Section 3.1 Items to be Delivered at Closing by Seller 8
Section 3.2 Items to be Delivered at Closing by Buyer 8
Section 3.3 Cooperation and Assignments 8
Article IV Representations and Warranties of Seller 9
Section 4.1 Organization 9
Section 4.2 Capitalization and Ownership; Power and
Authority 9
Section 4.3 Subsidiaries 9
Section 4.4 Qualification; Location of Business 9
Section 4.5 Corporate Power; Authorization;
Enforceability 10
Section 4.6 No Conflicts 10
Section 4.7 Consents 10
Section 4.8 Brokers' and Finders' Fees 10
Section 4.9 No Liabilities 11
Section 4.10 No Material Adverse Change 11
Section 4.11 Compliance with Law: Authorizations 11
Section 4.12 Transactions with Related Parties 12
Section 4.13 Litigation 12
Section 4.14 Title: Condition of Assets 12
Section 4.15 Insurance 12
Section 4.16 Contracts: Compliance 13
Section 4.17 Labor Matters 13
Section 4.18 Employee Benefit Plans and Arrangements 13
Section 4.19 Patents and Intellectual Property Rights 13
Section 4.20 Real Property 14
Section 4.21 Disclosure 14
Section 4.22 Year 2000 Compliance 14
Section 4.23 Customers and Suppliers of Colorado Mill 15
Article V Representations And Warranties Of Buyer 15
Section 5.1 Corporate Existence 15
Section 5.2 Corporate Power; Authorization;
Enforceability 15
Section 5.3 No Conflicts 15
Section 5.4 Consents 16
Section 5.5 Ability to Purchase 16
Section 5.6 Brokers' and Finders' Fees 16
Article VI Certain Obligations of The Parties 16
Section 6.1 Agreements of Seller Pending the Closing 16
Section 6.2 Employee Matters 17
Section 6.3 License of Block Caster Technology 19
Section 6.4 Non-Solicitation 19
Section 6.5 Non-Compete 19
Section 6.6 Real Estate Matters 19
Section 6.7 Transfer Taxes 20
Section 6.8 Section 338(h)(10) Election 20
Section 6.9 Colorado Mill Baghouse 20
Article VII Environmental Indemnification 20
Section 7.1 Definitions 20
Section 7.2 Environmental Indemnification and Remediation
Activities 21
Article VIII Survival of Representations and Warranties 22
Article IX Indemnification 22
Section 9.1 Indemnification By Seller 22
Section 9.2 Indemnification by Buyer 23
Section 9.3 Indemnification Procedures 24
Article X Conditions Precedent to the Closing 25
Section 10.1 Conditions Precedent to the Obligations of
Buyer 25
Section 10.2 Conditions Precedent to the Obligations of
Seller 26
Article XX Xxxxxxxxxxx 00
Section 11.1 Termination 27
Section 11.2 Effect of Termination 27
Article XII Miscellaneous 27
Section 12.1 Expenses 27
Section 12.2 Contents of Agreement; Parties in Interest 28
Section 12.3 Assignment and Binding Effect 28
Section 12.4 Notices 28
Section 12.5 Governing Law 29
Section 12.6 No Benefit to Others 29
Section 12.7 Headings, Gender and "Person." 29
Section 12.8 Publicity 30
Section 12.9 Severability 30
Section 12.10 Counterparts 30
Schedules and exhibits
Schedule Title
1.1(a) Colorado Employees
1.1(b) Texas Employees
2.1 Fixed Asset Listing
2.2 Excluded Assets
2.3 Assumed Liabilities
4.3 Organizational Regulations of Golden Engineering AG
4.4 Qualifications
4.9 Liabilities
4.10 Material Adverse Changes
4.11 Authorizations
4.12 Related Party Transactions
4.13 Litigation
4.15 Insurance
4.16 Contracts
4.17 Labor Matters
4.19 Intellectual Property Rights
4.20 Real Property
4.22 Year 2000 Compliance
4.23 Customers and Suppliers of Colorado Mill
6.2 Texas Employees for Reimbursement
6.10 Colorado Mill Baghouse Repairs
Exhibits
Exhibit A Xxxx of Sale, Assignment, Assumption Agreement
Exhibit B Form of Owner's Affidavit
Exhibit C Guaranty
Exhibit D Consent Decree
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is dated as of November 5,
1999, between Golden Aluminum Company, a Colorado corporation
("Seller") and Alcoa Inc., a Pennsylvania corporation ("Buyer").
Recitals
A. Seller is in the business of manufacturing and selling
aluminum rigid container sheet and flat rolled aluminum products
produced through a continuous cast mini-mill process (the
"Business"). Seller operates the Business primarily at two
aluminum rolling xxxxx located at Fort Xxxxxx, Colorado (the
"Colorado Mill") and San Antonio, Texas (the "Texas Mill"). As
of August 23, 1999, Seller has substantially ceased operation of
the Texas Mill. The Business also includes the following wholly-
owned subsidiaries of Seller: GAC Technology Company, a Colorado
corporation, and Golden Engineering AG, a Swiss corporation (the
"Subsidiaries"). Seller and the Subsidiaries are collectively
referred to as the "Company."
B. Seller desires to sell to Buyer, and Buyer desires to
purchase from Seller, the business, assets and properties of the
Company, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained
herein, and for other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties
agree as follows:
Article I
Certain Definitions
As used in this Agreement, the following terms (whether
used in singular or plural forms) shall have the following
meanings:
"Affiliate" means any person, directly or indirectly,
controlling, controlled by, or under common control with a party
(excluding, with respect to Seller, Coors Brewing Company and
Xxxxxx Xxxxx Company). Without limiting the generality of the
foregoing, a person is considered to be in control of or to be
controlled by another person if such person holds 50% or more of
the outstanding voting equity interest in such other person or
such other person holds 50% or more of its outstanding voting
equity interest.
"Assets" is defined in Section 2.1.
"Assumed Liabilities" is defined in Section 2.3.
"Buyer" is defined in the introductory paragraph of this
Agreement.
"Closing" is defined in Section 2.6.
"Closing Date" is defined in Section 2.6.
"Code" means the Internal Revenue Code of 1986, as amended.
"Colorado Employees" means all of the salaried and hourly
employees of the Colorado Mill who are actively employed
(including those employees currently on an authorized leave of
absence, but excluding any employee on layoff status) by Seller
as of the day before the Closing identified on Schedule 1.1(a).
"Crown Cork Ownership Period" means the period of time from
March 1, 1997 through August 22, 1999, during which period Seller
was owned by Crown Cork & Seal Company, Inc.
"Damages" means losses, liabilities, claims, obligations,
damages, deficiencies, costs, expenses and fees, including
without limitation, legal fees, reasonable expert witness fees
and reasonable costs of investigation incurred in defending
against any assertion of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" means (i) any corporation included with a
person in a controlled group of corporations within the meaning
of Section 414(b) of the Code; (ii) any trade or business
(whether or not incorporated) which is under common control with
a person within the meaning of Section 414(c) of the Code;
(iii) any member of an affiliated service group of which a person
is a member within the meaning of Section 414(m) of the Code; or
(iv) any other person or entity treated as an affiliate of a
person under Section 414(o) of the Code; provided that with
respect to Seller, Coors Brewing Company and Xxxxxx Xxxxx Company
shall not be deemed an ERISA Affiliate.
"Excluded Assets" is defined in Section 2.2.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"Indemnified Party" is defined in Section 9.3(a).
"Indemnifying Party" is defined in Section 9.3(a).
"Intellectual Property Rights" means all patents, license
and sublicenses, intellectual property, trademarks, trade names,
services marks, service names, logos, copyrights, inventions,
technology, formulae, technical information, know-how, trade
secrets, drawings, blueprints, designs, design protocols,
specifications for materials, specifications for parts and
devices, safety procedures for the handling of materials and
substances, quality assurance and control procedures, design
tools and simulation capability, and all manuals and technical
data Seller provides to its own employees, customers, suppliers,
agents or licensees used in the Business.
"Inventory" means all inventories of raw materials, work in
process and finished goods of the Business.
"Liens" means liens, claims, security interests, pledges,
charges, equities, options, restrictions and encumbrances.
"Litigation Conditions" is defined in Section 9.3(b).
"Material Adverse Effect" means any change in, or effect on,
the Business, as currently conducted by Seller that is materially
adverse to the assets, liabilities, results of operations or the
financial condition of the Business.
"Permitted Liens" means (i) liens for current real or
personal property taxes not yet due and payable; (ii) liens
disclosed in Schedule 4.20; (iii) statutory liens arising by
mandatory provisions of law securing obligations in the ordinary
course of business which are not yet due or which are being
contested in good faith; and (iv) liens, encumbrances and
restrictions such as easements, licenses and rights-of-way that
do not materially detract from the value of the Real Property
used in the Business or materially interfere with the present use
of the Real Property by the Business.
"Related Party" means ACX Technologies, Inc., any of the
officers or directors of the Company, any Affiliate of the
Company (excluding Coors Brewing Company and Xxxxxx Xxxxx
Company), or any business or entity in which the Company, or any
Affiliate of any such person, has any direct or material indirect
interest.
"Seller" is defined in the introductory paragraph of this
Agreement.
"Seller Benefit Plans" means each (i) "employee benefit
plan," as defined in Section 3(3) of ERISA (including any
"multiemployer plan" as defined in Section 3(37) of ERISA);
(ii) all other pension, retirement, supplemental retirement,
deferred compensation, excess benefit, profit sharing, bonus,
incentive, stock purchase, stock ownership, stock option, stock
appreciation right, employment, severance, salary continuation,
termination, change-of-control, health, life, disability, group
insurance, vacation, holiday and fringe benefit plan, program,
contract, or arrangement (whether written or unwritten, qualified
or nonqualified, funded or unfunded and including any that have
been frozen or terminated) maintained, contributed to, or
required to be contributed to, by Seller or any ERISA Affiliate
of Seller for the benefit of any employee or former employee of
Seller, director, officer or independent contractor of Seller or
under which Seller or any ERISA Affiliate of Seller has any
liability with respect to any employee, former employee,
director, officer or independent contractor of Seller.
"Subsidiaries" is defined in Recital A.
"Texas Employees" means all of the salaried and hourly
employees of the Texas Mill who are actively employed (including
those employees currently on an authorized leave of absence, but
excluding any employee on layoff status) by Seller as of the day
before the Closing identified on Schedule 1.1(b).
"Third Party Claim" is defined in Section 9.3(a).
"Working Capital Value" means the value of the Inventory,
calculated in accordance with Section 2.5(b), plus the value of
the accounts receivable of the Business as of the Closing Date,
minus the accounts payable of the Business as of the Closing
Date.
Article II
The Transaction
Section 2.1 Covenant of Purchase and Sale; Assets. Subject
to the terms and conditions set forth in this Agreement, and
except as otherwise provided in Section 2.2, at the Closing,
Seller shall sell, convey, assign, transfer and deliver to Buyer,
all of Seller's title and interest in all of the properties,
assets, and rights of any kind, where ever located, whether
tangible or intangible, real or personal, used by Seller in its
operation of the Business (the "Assets"), including without
limitation the following:
(a) all of the issued and outstanding capital stock of
each of the Subsidiaries;
(b) all cash on hand as of the Closing Date, all
accounts receivable and all prepaid expenses and security
deposits of the Company;
(c) all of the Intellectual Property Rights;
(d) the Real Property, as set forth in Schedule 4.20;
(e) the leases, contracts and commitments set forth in
Schedule 4.16 including without limitation the Nitrogen Lease and
Ground Lease described therein;
(f) all of the Authorizations, as defined in Section
4.11.
(g) all of Seller's technical information and data,
customer lists, machinery and equipment warranties, maps, com-
puter disks and tapes, plans, diagrams, blueprints and schematics
relating to the Colorado Mill and the Texas Mill;
(h) all machinery, equipment (including all trans-
portation and office equipment), fixtures, trade fixtures, and
furniture located at the Colorado Mill or the Texas Mill or in
any other space owned, leased or occupied by Seller;
(i) the Inventory;
(j) the fixed assets, in the listing attached as
Schedule 2.1 and the stores inventory, in the listing previously
provided by Seller to Buyer;
(k) all claims (but not tax refund claims), causes of
action, choses in action, right of recovery and rights of set-off
of any kind, except those retained by Seller as excluded assets;
(l) the right to receive mail, accounts receivable
payments and other communications addressed to the Company;
(m) all books and records relating to the Business or
the operations of the Company, provided that Seller shall have
the right to have such records made available to it for a reason-
able period after the Closing Date for reasonable tax reporting
purposes;
(n) all goodwill and going concern value generated by
Seller with respect to the Business; and
(o) all intangible assets of the Company relating to
the Business not specifically described above.
Section 2.2 Excluded Assets. Notwithstanding the provisions
of Section 2.1, the Assets shall not include the following, which
shall be retained by Seller (the "Excluded Assets"):
(a) Seller's minute books and stockholder and stock
transfer records;
(b) bonds, letters of credit, surety instruments, and
other similar items;
(c) All employee benefit plans of the Company, includ-
ing without limitation, employee pension, profit sharing, 401(k),
medical benefit or health plans and trusts and related trust
accounts, funds, investments or other assets.
(d) all claims, rights and interests in and to any
refunds for Taxes or fees for periods prior to the Closing Date;
(e) all rights under judgment and rights of recovery
related to operation of the Business prior to the Closing Date;
and
(f) all rights, assets, and properties described in
Schedule 2.2.
Section 2.3 Assumed Obligations and Liabilities. After the
Closing Date, Buyer shall assume, pay, discharge, and perform the
following (the "Assumed Liabilities"):
(a) those obligations and liabilities attributable to
periods after the Closing Date under the contracts, licenses
and commitments transferred to Buyer at closing, including with-
out limitation Seller's obligations under the material agreements
listed on Schedule 4.16, and further including all contingent
liabilities under the Tax Abatement Agreement between Seller and
the City of San Antonio, dated July 27, 1989 ("Abatement
Agreement"), with respect to refund of tax abatements for failure
to operate the Texas Mill for one year.;
(b) those liabilities and obligations set forth on
Schedule 2.3; and
(c) all obligations and liabilities arising out of
Buyer's ownership of the Assets or operation of the Business
after the Closing Date.
Section 2.4 Excluded Liabilities. Other than the Assumed
Liabilities, Buyer does not assume and will not be responsible
for, and Seller will retain and remain responsible for, any and
all obligations and liabilities of the Company and the Business
of any nature whatsoever, whether past, current or future,
whether accrued, contingent, known or unknown, including without
limitation third party claims for personal injury filed after the
Closing Date to the extent such claims relate to actions or
inactions of the Company prior to the Closing Date. Without
limiting the foregoing and by way of example only, Buyer may not
be deemed to assume any liabilities relating to or arising out
of:
(a) all accrued liabilities, and accrued expenses,
including accrued wages, performance pay, incentive compensation,
salary, and sick pay in respect of employees of the Company;
(b) contributions to or other obligations arising
under the employee benefit plans of the Company;
(c) any short or long-term debt of the Company;
(d) all amounts payable (fixed, contingent or other-
wise) by the Company to an Affiliate of the Company;
(e) all warranty claims and all claims for injury or
damage attributable to the design, manufacture or sale of any
product produced by the Company prior to the Closing Date;
(f) all taxes assessed, accrued or attributable to the
Company for periods prior to the Closing Date and related
penalties and interest, if any, excluding all liabilities under
the Abatement Agreement assumed by Buyer under Section 2.3(a);
(g) any complaint, suit, action, arbitration or regu-
latory, administrative or governmental proceeding or investiga-
tion which relates to the Business conducted on or prior to the
Closing Date including, without limitation, the items of
litigation set forth on Schedule 4.13; and
(h) all amounts due as of the Closing Date under the
accounts payable between Seller and ACX Technologies, Inc. cover-
ing advances by ACX Technologies, Inc. to Seller for product
included in the Inventory and being acquired by Buyer, which as
of October 29, 1999, was $14,300,000.
Section 2.5 Consideration for Purchased Assets.
(a) As consideration for the Assets, Buyer will pay
Seller $41,000,000 ("Asset Value"), plus the Working Capital
Value (the Asset Value and the Working Capital Value collec-
tively the "Purchase Price"). Buyer will pay the Asset Value to
Seller by wire transfer of immediately available funds to an
account designated in writing by Seller no later than 1:00 p.m.
EST on the Closing Date. Within five business days after the
Closing, Seller and Buyer will jointly determine the value
of the Inventory in accordance with Section 2.5(b) and will value
the accounts receivable and accounts payable based on the book
value as of the Closing Date, which values will be used to cal-
culate the Working Capital Value as of the Closing Date (the
"Final WC Value"). If the accounts receivable included within
the Final WC Value ("Receivables") and the value of the Inventory
exceed the accounts payable included within the Final WC Value
("Payables"), then Buyer will pay Seller within five business
days following determination of the Final WC Value, by wire
transfer in immediately available funds, the amount of such
excess. If the Receivables and the value of the Inventory are
less than the Payables, then Seller will pay Buyer within five
business days following determination of the Final WC Value, by
wire transfer in immediately available funds, the amount of such
deficiency.
(b) For purposes of calculating the Purchase Price,
the value of the Inventory will be determined as follows:
(i) Raw materials inventory will be valued at
market price;
(ii) Work in process inventory will be valued at
raw material costs plus standard cost build-up; and
(iii) Finished goods inventory will be valued at
the price established under the customer contracts covering the
inventory, less freight to the extent freight is already included
in the customer contract price.
Section 2.6 Accounts Receivable and Inventory Adjustment.
If, within 90 days of the Closing Date, any of the Receivables
has not been collected in full, or any of the finished goods
inventory has been returned by the customer to Buyer, Seller will
repurchase such uncollected Receivables and inventory from Buyer.
Seller also will reimburse Buyer for new back-up rolls to be
purchased by Buyer for the cold xxxxx of the Business in the
amount of $275,000. Buyer and Seller will cooperate to finalize
the amount for reimbursement so that Seller may pay Buyer for
such repurchased Receivables and inventory, as well as the back-
up rolls, within 100 days of the Closing Date by wire transfer of
immediately available funds.
Section 2.7 Closing. The closing of the sale of the Assets
(the "Closing") shall be held at 11:00 a.m. at the offices of
Holland & Xxxx, LLP, 000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxxxxx, xx November 5, 1999, or on another date mutually agreed
upon in writing by the parties (the "Closing Date"), and shall be
effective as of 11:59 p.m. EST on the Closing Date.
Article III
Deliveries at Closing
Section 3.1 Items to be Delivered at Closing by Seller. At
the Closing, subject to the terms and conditions of this
Agreement, Seller shall deliver to Buyer:
(a) a fully executed Xxxx of Sale, Assignment and
Assumption Agreement in substantially the form of Exhibit A (the
"Xxxx of Sale"), and any general warranty deeds, assignments of
leases and all other instruments of conveyance which are
necessary or reasonably requested by Buyer to effect the transfer
of the Assets to Buyer; and
(b) the agreements, documents and instruments required
by Section 10.1.
Section 3.2 Items to be Delivered at Closing by Buyer. At
the Closing, subject to the terms and conditions of this Agree-
ment, Buyer shall deliver to Seller:
(a) the Asset Value in accordance with Section 2.5;
(b) an executed counterpart of the Xxxx of Sale;
(c) any agreements, documents and instruments required
by Section 10.2; and
(d) any assumption or other documents which are
necessary or reasonably requested by Seller to effect the assump-
tion of the Assumed Liabilities by Buyer.
Section 3.3 Cooperation and Assignments. After the Closing
Date, Seller and Buyer will cooperate so that Buyer may secure
all necessary consents, approvals, authorizations, exemptions and
waivers from third parties, including all permits, licenses and
other authorizations from governmental agencies, required to
enable Buyer to obtain the benefit of the transactions
contemplated hereby.
Article IV
Representations and Warranties of Seller
Seller represents and warrants to Buyer the following:
Section 4.1 Organization. Seller is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Colorado. Seller has all requisite power and
authority to own or lease its properties and assets as now owned
or leased and to carry on its business as and where now being
conducted.
Section 4.2 Capitalization and Ownership; Power and
Authority. Seller's authorized capital stock consists solely of
100 shares of common stock, par value $1.00 per share, 100 shares
of which are issued and outstanding and owned by ACX Technologies,
Inc. The authorized capital stock of each of the Subsidiaries
consists of the following: with respect to GAC Technology
Company, 1,000 shares of common stock, par value $0.01, all of
which are issued and outstanding and owned by Seller, and, with
respect to Golden Engineering AG, 100 shares of common stock, par
value $0.01, all of which are issued and outstanding, 97 of which
are owned by Seller and three of which are held of record by
directors of such Subsidiary. There are no other outstanding
voting securities of the Subsidiaries except for the above
described capital stock. There are no outstanding options,
warrants, rights, agreements, calls, commitments or demands of
any character relating to the capital stock of the Subsidiaries
and no securities convertible into or exchangeable for any
of such capital stock of the Subsidiaries. All of the capital
stock of the Subsidiaries is owned free of Liens.
Section 4.3 Subsidiaries. Except for the Subsidiaries,
Seller does not, directly or indirectly, own any stock of, or any
other interest in, any other corporation, joint venture, partner-
ship, trust or other business entity. Each of the Subsidiaries
is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation
and has full corporate power and authority to carry on its busi-
ness as it is now being conducted and to own, operate and
lease its properties and assets. The Organizational Regulations
attached as Schedule 4.3 are a true and correct copy of the
Organizational Regulations of Golden Engineering AG and are in
full force and effect.
Section 4.4 Qualification; Location of Business. Seller
and the Subsidiaries are duly authorized to do business in the
jurisdictions set forth on Schedule 4.4. The jurisdictions set
forth on Schedule 4.4 are the only jurisdictions where the
character of the properties owned or leased or the nature of
activities conducted by Seller or the Subsidiaries make such
qualification necessary.
Section 4.5 Corporate Power; Authorization; Enforceability.
Seller has the corporate power, authority and legal right to
execute, deliver and perform this Agreement. The execution,
delivery and performance of this Agreement by Seller have been
duly authorized by all necessary corporate action and shareholder
action. This Agreement and all the other agreements and
instruments required to be executed and delivered by Seller in
connection with this Agreement have been duly executed and
delivered by Seller and constitute the legal, valid and binding
obligation of the Company, enforceable in accordance with its
terms, except as such enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization and similar
laws affecting creditors' rights generally and general principles
of equity.
Section 4.6 No Conflicts. The execution and delivery of this
Agreement by Seller does not, and the consummation of the
transactions contemplated by this Agreement and the compliance
with the terms, conditions, and provisions of this Agreement by
Seller will not: (a) contravene any provision of the Company's
articles of incorporation, bylaws or other governing instruments;
or (b) conflict with or result in a breach of or constitute a
default (or an event which, with the passage of time or the
giving of notice or both, constitute a default) under any of the
terms, conditions or provisions of any material indenture,
mortgage, loan or credit agreement or any other material
authorization agreement or instrument to which the Company or
Seller is a party or by which any of them or any of their assets
may be bound or affected, or any judgment or order of any court
or governmental department, commission, board, agency or
instrumentality, domestic or foreign, affecting the Company, or
any applicable Regulation; (c) result in the creation or
imposition of any Liens of any nature whatsoever upon any of the
Assets or the stock of the Subsidiaries or give to others any
interests or rights in the Assets or such stock; (d) result in
the maturation or acceleration of any of the Assumed Liabilities
(or give others the right to cause such a maturation or
acceleration); (e) result in the termination of or loss of any
material right (or give others the right to cause such a ter
mination or loss) under any agreement or contract to which the
Company is a party or under which the Company may be a
beneficiary.
Section 4.7 Consents. Except as required under the HSR Act,
no material consent, approval or authorization of, or
registration or filing with any governmental authority or other
regulatory agency, is required in connection with the execution,
delivery and performance of this Agreement by Seller.
Section 4.8 Brokers' and Finders' Fees. Seller represents
and warrants to Buyer that all negotiations relative to this
Agreement have been carried on by it directly without the
intervention of any person who may be entitled to any brokerage
or finder's fee or other commission in respect of this Agreement
or the consummation of the transactions contemplated hereby.
Section 4.9 No Liabilities. To Seller's knowledge, except as
disclosed on Schedule 4.9, the Company has no liability or
obligation of any nature whatsoever, secured or unsecured, known
or unknown, whether due or to become due, absolute, accrued,
contingent or otherwise.
Section 4.10 No Material Adverse Change. Except as set forth
on Schedule 4.10 and the fact that the Business has been held for
sale, and operations at the Texas Mill have substantially ceased,
since August 23, 1999, the Business has been conducted in the
ordinary course consistent with past practice (including with
respect to the collection of receivables, payment of payables and
other liabilities, sales practices, capital expenditures and
inventory levels) and there has not occurred with respect to the
Business:
(a) any event, occurrence or development which,
individually or in the aggregate, has had a Material Adverse
Effect;
(b) any damage, destruction or loss to the Company
not covered by insurance that would have a Material Adverse
Effect;
(c) Any sale or other disposition of any capital
asset or Intellectual Property Right having a book value in
excess of $25,000 used in the Business;
(d) Any increase in the wage, salary, commission or
other compensation (other than routine increases granted in the
ordinary course of business and consistent with past practice)
payable or to become payable by the Company to any of its
employees, or any change in any existing, or creation of any new,
insurance or other plan under which the Company provides benefits
to such employees; or
(e) Any release or waiver by Seller or the Company of
any material claim or right of the Company.
Section 4.11 Compliance with Law: Authorizations. The
Company has complied in all material respects with and is in
compliance in all material respects with each law, ordinance,
or governmental or regulatory rule or regulation, whether federal,
state, cantonal, local or foreign ("Regulation"), to which the
Company's business, operations, assets or properties is subject.
The Company owns, holds, possesses or lawfully uses in the
operation of its business all material franchises, licenses,
permits, approvals, filings, registrations and other
authorizations from any governmental or regulatory official body
or authority ("Authorizations") that are required to conduct the
Business and such Authorizations are in full force and effect.
The Company is in compliance in all material respects with the
terms of the Authorizations and Regulations. To Seller's
knowledge, no notice, citation, summons or order has been issued,
no complaint has been filed, no penalty has been assessed and no
investigation or review is pending or threatened by any
governmental entity with respect to any alleged violation by the
Company of any Regulation or with respect to any alleged failure
by the Company to have any Authorization required in connection
with the Business. All Authorizations are listed in
Schedule 4.11.
Section 4.12 Transactions with Related Parties. Except as
disclosed on Schedule 4.12 and below, no Related Party:
(a) has borrowed money from or loaned money to the
Company that has not been repaid;
(b) has any contractual or other claim of any kind
whatsoever against the Company;
(c) has had, since March 1, 1997, any interest in any
Intellectual Property Rights used in the Business; or
(d) has been engaged, since March 1, 1997, in any other
transaction (or series of transactions) involving in excess of
$50,000 in any fiscal year with the Company.
Section 4.13 Litigation. Except as set forth on Schedule
4.13, no litigation, including any arbitration, investigation or
other proceeding of or before any court, arbitrator or govern-
mental or regulatory official, body or authority is pending or,
to Seller's knowledge, threatened against the Company which
relates to the assets of the Company, the stock of the Sub-
sidiaries or the transactions contemplated by this Agreement.
The Company is not a party to or subject to, and the assets of
the Company and the stock of the Subsidiaries, are not subject to,
the provisions of any judgment, order, writ, injunction, decree
or award of any court, arbitrator or governmental or regulatory
official, body or authority.
Section 4.14 Title: Condition of Assets. The Company has
good and valid title to the Assets, free and clear of all Liens
of whatsoever nature except Permitted Liens, and subject only to
minor imperfections of title, none of which, individually or in
the aggregate, materially impairs the use of the affected
property or materially impairs any operations of the Business.
All of the Assets are in the Company's possession and control,
are in good working order and operating condition and repair
(ordinary wear and tear and routine maintenance excepted), are
suitable for the purposes for which they are used in the
Business, and are structurally sound and free from material
defects. Since August 23, 1999, Seller has not removed any of
the Assets from the Business.
Section 4.15 Insurance. All policies of general liability
and property insurance under which the Company is listed as an
additional insured or a beneficiary are listed on Schedule 4.15.
All such policies are in full force and effect in accordance with
their terms, no notice of cancellation or non-renewal has been
received, and there is no existing default or event which, with
the giving of notice or lapse of time or both, would constitute a
default under such policies. All premiums to date have been paid
in full.
Section 4.16 Contracts: Compliance. Schedule 4.16 contains
a complete and accurate list of all material written leases,
licenses, contracts or commitments of any kind, formal or
informal, to which the Company is a party to or bound by. All
material leases, contracts and other commitments to which the
Company is a party or by which it is bound are in full force and
effect. For purposes of this Section 4.16, "material" means any
lease, license, contract or commitment involving a payment in
excess of $100,000 in any 12-month period or having a term of 12
months or greater. To Seller's knowledge, (a) all parties to
such leases, licenses, contracts and other commitments have
complied with the provisions thereof; (b) no such party is in
default under any of the terms thereof; and (c) no event has
occurred that with the passage of time or the giving of notice or
both would constitute a default by any party under any provision
thereof.
Section 4.17 Labor Matters. Except as disclosed on
Schedule 4.17: (a) no employee of the Company is represented by
any union or other labor organization; (b) there is no unfair
labor practice complaint against the Company pending or, to
Seller's knowledge, threatened before the National Labor
Relations Board; (c) there is no labor strike, dispute, slow down
or stoppage pending or, to Seller's knowledge, threatened against
the Company; and (d) no grievance against the Company which might
have a Material Adverse Effect on the Company or the conduct of
its business is pending; (e) no private agreement restricts the
Company from relocating, closing or terminating any of its
operations or facilities; (f) to Seller's knowledge, the Company
in the past three years has not experienced any work stoppage or
other labor difficulty or committed any unfair labor practice;
and (g) there are no efforts in progress by any union or other
labor organization to organize any employees of the Company. For
purposes of this Section 4.17 only, "Seller's knowledge" is
defined as the personal knowledge of Xxx Xxxxxxx, the plant
manager of the Colorado Mill.
Section 4.18 Employee Benefit Plans and Arrangements.
Seller's execution of, and performance of the transactions con-
templated by this Agreement will not constitute an event under
any Seller Benefit Plan that will result in any payment (whether
as severance pay or otherwise), acceleration, vesting or increase
in benefits with respect to any employee for which Buyer would
be responsible. No Seller Benefit Plan provides for "parachute
payments" within the meaning of Section 280G of the Code.
Section 4.19 Patents and Intellectual Property Rights.
Schedule 4.19 contains a complete and accurate list and
description (including the name and owner thereof) of the
Intellectual Property Rights. Seller is the registered and
beneficial owner of all of the Intellectual Property Rights free
and clear of any royalty claims or other Liens except as stated
on Schedule 4.19. To Seller's knowledge, the operation of the
Business as currently conducted or conducted in the past does not
conflict with or infringe on the rights of any other person, and
Seller has not received any claim or notice from any person to
such effect. To Seller's knowledge, no other person is
infringing the Intellectual Property Rights. Except as set forth
on Schedule 4.19, the Company owns or is licensed or otherwise
has the exclusive use of all Intellectual Property Rights
necessary for the operation of the Business as it is currently
conducted.
Section 4.20 Real Property.
(a) For purposes of this Agreement, "Real Property"
will mean all interests in and rights to the real property and
the related improvements which are owned, leased or otherwise
subject to a right of use, occupancy or license by the Company
and are used in connection with the Business. All such Real
Property is listed on Schedule 4.20.
(b) With respect to the Real Property owned by the
Company, the Company has good and marketable title, including all
legal, equitable and beneficial interests, to the lots and
parcels of land listed on Schedule 4.20 together with the
buildings, structures and other improvements, with all easements,
rights and other privileges appurtenant thereto, free and clear
of all mortgages, liens, encumbrances, ground rents, leases,
tenancies, licenses, reservations or other rights of occupancy or
use for all or any portion of the Real Property, options,
security interests, covenants, conditions, restrictions, rights-
of-way, easements, encroachments and any other matter affecting
title except Permitted Liens.
(c) With respect to the Real Property leased by the
Company, each lease is in full force and effect and has not been
assigned, modified, supplemented or amended and neither the
Company nor, to the Company's knowledge, the landlord or subland-
lord under any lease is in default under any of the leases, and
no circumstance presently exists which, with the giving of notice
or passage of time, or both, would permit the landlord or sub-
landlord under any lease to terminate any lease.
Section 4.21 Disclosure. No representation or warranty by
Seller in this Agreement, and no exhibit, document, statement,
certificate or schedule furnished or to be furnished to Buyer
pursuant to this Agreement, or in connection with the
transactions contemplated hereby, contains or will contain any
untrue statement of a material fact, or omits or will omit to
state a material fact necessary to make the statements or facts
contained herein or therein not misleading, taken as a whole, and
in light of the circumstances under which they were made.
Section 4.22 Year 2000 Compliance. To Seller's knowledge,
except as disclosed on Schedule 4.22, the Business is in all
material respects Year 2000 Compliant in that no products,
facilities, machinery, equipment, business systems and
operational infrastructure are or will be affected in performance
or functionality by dates prior to, during and after the year
2000.
Section 4.23 Customers and Suppliers of Colorado Mill.
Seller is not required to provide bonding or any other
security arrangements in connection with any transactions
with any customers or suppliers for the Colorado Mill. Schedule
4.23 contains, with respect to the nine-month period ending Sep-
tember 30, 1999, a true and complete list of the (i) ten
largest customers (in dollar volume of purchases) of the Colorado
Mill of Seller and (ii) the five largest suppliers (in dollar
volume of sales) to the Colorado Mill of Seller. Except as
disclosed on Schedule 4.23, to the knowledge of Seller, no such
supplier or customer intends or has threatened to terminate or
modify its respective relationships with Seller.
Article V
Representations And Warranties Of Buyer
Section 5.1 Corporate Existence. Buyer is a corporation
duly organized, validly existing and in good standing under the
laws of the Commonwealth of Pennsylvania.
Section 5.2 Corporate Power; Authorization; Enforceability.
Buyer has the corporate power, authority and legal right to
execute, deliver and perform this Agreement. The execution,
delivery and performance of this Agreement by Buyer have been
duly authorized by all necessary corporate and shareholder
action. This Agreement and all the other agreements and
instruments required to be executed and delivered by Buyer in
connection with or pursuant hereto have been duly executed and
delivered by Buyer and constitute the legal, valid and binding
obligation of Buyer, enforceable in accordance with its terms
except as such enforceability may be limited by bankruptcy, insol
vency, moratorium, reorganization and similar laws affecting
creditors' rights generally and general principles of equity.
Section 5.3 No Conflicts. The execution and delivery of
this Agreement by Buyer do not, and the consummation of
the transactions contemplated by this Agreement and the compli-
ance with the terms, conditions and provisions of this Agreement
by Buyer will not (a) contravene any provision of Buyer's
articles of incorporation or bylaws; or (b) conflict with or
result in a breach of or constitute a default (or an event which
might, with the passage of time or the giving of notice or both,
constitute a default) under any of the terms, conditions or
provisions of any material indenture, mortgage, loan or credit
agreement or any other material agreement or instrument to which
Buyer is a party or by which it or any of its assets may be bound
or affected, or any judgment or order of any court or governmen-
tal department, commission, board, agency or instrumentality,
domestic or foreign, or any applicable regulation.
Section 5.4 Consents. Except as required under the HSR Act,
no consent, approval or authorization of, or registration or
filing with any governmental authority or other regulatory
agency, is required in connection with the execution, delivery
and performance of this Agreement by Buyer.
Section 5.5 Ability to Purchase. Buyer has the requisite
financial ability to purchase the Assets and to consummate the
transactions hereunder.
Section 5.6 Brokers' and Finders' Fees. Buyer represents
and warrants that all negotiations relative to this Agreement
have been carried on by it directly without the intervention of
any person who may be entitled to any brokerage or finder's fee
or other commission in respect of this Agreement or the consum-
mation of the transactions contemplated hereby.
Article VI
Certain Obligations of The Parties
Section 6.1 Agreements of Seller Pending the Closing.
Seller agrees that, pending the Closing and except as otherwise
agreed to in writing by Buyer:
(a) Maintenance of Insurance. The Company shall main-
tain in full force adequate insurance policies.
(b) Maintenance of Authorizations and Permits. The
Company will maintain in full force and effect all Authorizations
necessary for the conduct of the Business.
(c) Compliance with Laws. The Company will comply in
all material respects with all laws, ordinances, rules, regula-
tions and orders applicable to the Business.
(d) Fulfillment of Agreements. Seller will use its
best efforts to cause all of the conditions to the obligations of
Buyer under Section 6.1 of this Agreement to be satisfied on or
prior to the Closing.
(e) Access. Seller will give to Buyer's officers,
employees, counsel, accountants and other representatives access
to and the right to inspect, upon reasonable notice and during
normal business hours, all of the premises, properties, assets,
records, contracts and other documents relating to the Business
and will permit them to consult with the officers of the Company,
Seller and accountants, counsel and agents of the Company for the
purpose of making such investigation of the Business as Buyer
shall reasonably desire to make; provided, however, that such
investigation shall not unreasonably interfere with the operation
of the Business.
(f) Assets. The Company will not remove any of the
Assets from the Business except in the ordinary course of busi-
ness.
(g) Supplier/Customer Relations. The Company will use
its best efforts to maintain the existing relationships of the
Business with the Company's suppliers and customers so that they
will be preserved after the Closing.
(h) Confidentiality. If the transactions contemplated
by this Agreement are not consummated, Buyer will, at its option,
return to Seller or destroy all written materials and all copies
thereof that were supplied to Buyer by Seller and that contain
any confidential data or information and Buyer will and will
cause its agents to hold in confidence any confidential data or
information made available to Buyer in connection with this
Agreement with respect to the Business.
(i) Employee Relations. The Company will use its
reasonable best efforts to retain its present employees of the
Business so that they will be available to provide service to the
Business after the Closing, but not grant any compensation or
benefits increases outside the ordinary course (except for reten-
tion bonuses, if any, granted by Seller to be paid by Seller for
employment prior to the Closing Date).
Section 6.2 Employee Matters. Buyer agrees to give each
Transferred Texas Employee of Seller credit for time worked at
Seller (including during the Crown Cork Ownership Period) for
purposes of eligibility and vesting, but not benefit accrual,
with respect to all applicable employee benefit plans to be
provided by Buyer to the Transferred Texas Employees, and to
treat each such employee the same as similarly situated employees
of Buyer pursuant to each of its employee benefits plans.
(a) Comparable Employment. Buyer will offer employment
to all of the Colorado Employees and Texas Employees actively at
work at the Business on the date of the Closing on comparable
terms and conditions to those terms and conditions at which
they were employed at the Closing. Nothing contained herein
prohibits Buyer from terminating, discharging or laying off any
Colorado Employees or Texas Employees after the Closing Date.
Those Colorado Employees and Texas Employees accepting such offer
prior to the Closing Date will become employees of Buyer as of
the Closing Date (individually respectively the "Transferred
Colorado Employees" and the "Transferred Texas Employees" and
collectively the "Transferred Employees"). In the event that
any Colorado Employees or Texas Employees decline or do not
respond prior to the Closing Date to such offer of employment of
Buyer, Buyer will have no obligation of any kind to such
employees. Seller will be responsible for all liabilities, obli-
gations and claims of the Transferred Employees who are employed
by Buyer which (i) arise, within the meaning of any existing
Seller Benefit Plan for the employees of the Business, prior
to the date of the Closing (including without limitation claims
for benefits filed after the Closing Date that Buyer can
reasonably demonstrate relate to incidents that occurred prior
to the Closing Date) and (ii) are payable under the terms and
conditions of such Seller Benefit Plan on or prior to the Closing
Date.
(b) Texas Mill Benefits. Effective on the Closing Date,
each Transferred Texas Employee who is an active participant in
the Seller Benefit Plans will cease to be an active participant
in such plans. Buyer will provide to the Transferred Texas
Employees, effective on the Closing Date, employee benefit plans,
programs and arrangements, which are comparable in the aggregate
to those Seller had provided immediately prior to the Closing
Date. Buyer may choose to pay COBRA premiums on behalf of Trans-
ferred Texas Employees, while it establishes a health care plan.
(c) Colorado Mill Benefits. Effective on the Closing
Date, each Transferred Colorado Employee who is an active parti-
cipant in the Seller Benefit Plans will cease to be an active
participant in such plans, except as provided below. Buyer will
provide to the Transferred Colorado Employees, effective on the
Closing Date, employee benefit plans, programs and arrangements,
which are comparable in the aggregate to those Seller had pro-
vided immediately prior to the Closing Date. After the
Closing Date and for a period not to exceed 180 days, Seller will
provide health care coverage (including health, prescription
drug, dental and life insurance) under COBRA for all Transferred
Colorado Employees. In providing such health care coverage,
Seller will comply with all applicable laws, including ERISA.
Buyer will reimburse Seller for all costs incurred by Seller for
such coverage. Buyer will notify Seller when the Transferred
Colorado Employees will cease to be active participants in
Seller's health care plan. Seller will invoice Buyer by the 10th
day of each month for costs incurred during the prior month by
Buyer for the Transferred Colorado Employees. Buyer will pay
such invoices within 30 days of receipt.
(d) No Liability for Seller Benefit Plans. Except as
expressly provided in this Section 6.2, Buyer will not assume or
be responsible for any liability under any of Seller's Benefit
Plans, which are payable at any time to, or in respect of, any
former or present employee of the Business after the Closing.
(e) Workers' Compensation and Short-Term Disability.
Seller retains all obligations for workers' compensation claims
which may be made by a Transferred Employee on or after the
Closing Date with respect to events occurring prior to the
Closing Date that give rise to such claims. Seller will satisfy
all obligations and make all payments with respect to such claims
in accordance with Seller's policies in effect as of the Closing
Date. Seller also retains all obligations for short-term dis-
ability benefits due to Transferred Employees for all events
occurring prior to the Closing Date that give rise to such
benefits, including, without limitation, all medical and related
payments, in accordance with Seller's policies in effect as of
the Closing Date.
(f) Reimbursement for Employment of Texas Employees.
Buyer will reimburse Seller for all reasonable compensation and
benefits costs incurred by Seller since August 23, 1999, in
employing the Texas Employees identified on Schedule 6.2.
Section 6.3 Cooperation and Access. After the Closing Date
as either party may from time to time reasonably request, the
other party will provide the requesting party with such
information regarding the Company and the Business as such party
reasonably requires. But, neither party will be obligated to
provide the other party with any information of a commercially
sensitive nature, relating to trade secrets or in violation
of the applicable law, rule or regulation or any contractual
provision prohibiting disclosure.
Section 6.4 License of Block Caster Technology. Buyer
agrees that, if within two years of the date of this Agreement,
Buyer elects to remove the block caster equipment, which includes
the blocks and the frames but does not include any of the xxxxx-
xxxx equipment, such as the block heaters or the water
system ("Caster") from the Texas Mill, Buyer will (i) offer to
sell the Caster to ACX Technologies, Inc. or a designated affil-
iate of ACX Technologies, Inc. for $1.00 on an "as is, where is"
basis; and (ii) if Seller elects to buy the Caster, which
election must be made within 30 days of Buyer's offer to sell
the Caster, convey to ACX Technologies, Inc. or its designated
affiliate purchaser a non-exclusive, non-transferable, fully
paid-up, perpetual license without right of sublicense under
the terms of a license agreement to be negotiated to the
mutual satisfaction of the parties within 60 days of the Closing
Date to use the Caster in the United States, to make use and
sell can sheet body stock under all Intellectual Property
Rights that have been used to operate the Caster at the Texas
Mill. ACX Technologies, Inc. or its affiliate will have 60 days
from the date it elects to buy the Caster to remove the Caster
from Buyer's facility and will be responsible for all costs of
removing the Caster from Buyer's facility. In removing the
Caster from Buyer's facility, ACX Technologies Inc. will not,
or will ensure that its designated affiliate will not, unreason-
ably interfere with Buyer's operation of the facility.
Section 6.5 Non-Solicitation. Seller covenants and agrees
that for a period of two years from the Closing Date, Seller will
not solicit, hire or otherwise engage as an employee, any person
who continues to be employed by the Company or the Business,
except when the employee responds, unsolicited, to a public
advertisement or with the prior written consent of Buyer.
Section 6.6 Non-Compete. Seller covenants and agrees that
for a period of two years from the Closing Date Seller will
not directly or indirectly engage in or become associated as an
employee, consultant, partner, owner, agent, stockholder, member,
officer or director of, any person or entity engaged in, or about
to become engaged in, the design, development, operation,
marketing or selling of aluminum can sheet in competition with
the Business, except as expressly permitted under any license
agreement entered into by the parties in accordance with
Section 6.4.
Section 6.7 Real Estate Matters. Seller will arrange, pay
for and deliver to Buyer an as-built survey of all of the owned
Real Property within 30 days after the Closing Date. At
Closing, Seller will provide an Owner's Affidavit in the form of
Exhibit B related to such owned Real Property.
Section 6.8 Transfer Taxes. All Taxes, fees, and assess-
ments arising from or payable in connection with the transfer of
the Assets shall be paid by Buyer, except Colorado real estate
documentary and transfer taxes, which will be split equally by
Buyer and Seller.
Section 6.9 Section 338(h)(10) Election. It is understood
by the parties that, in connection with the acquisition of the
shares of Seller by ACX Technologies, Inc. from Crown Cork & Seal
on August 23, 1999, ACX Technologies, Inc. and Crown Cork & Seal
agreed that one Section 338(h)(10) election would occur with
respect to those shares. Under that agreement, ACX Technologies,
Inc. and Crown Cork & Seal will agree upon an allocation of the
purchase price to the assets acquired. As that allocation will
have a direct bearing on the allocation to be agreed upon as
between Buyer and Seller, Seller will cause ACX Technologies,
Inc. to include Buyer's representatives as a party to the
allocation negotiations with Crown Cork & Seal. Seller and Buyer
will each report all transactions pursuant to this Agreement in a
manner that is consistent with such election and will take no
position contrary thereto unless required to do so pursuant to a
"determination" within the meaning of Section 1313 of the Code.
Section 6.10 Colorado Mill Baghouse. Seller will make the
repair described in Schedule 6.10 to correct damage at the
Colorado Mill baghouse.
Article VII
Environmental Indemnification
Section 7.1 Definitions.
(a) Hazardous Substance. For purposes of this Article,
"Hazardous Substance" means any substance, chemical or waste that
is listed or defined as hazardous, toxic, or dangerous under
Applicable Law (defined below).
(b) Applicable Law. For purposes of this Article,
"Applicable Law" means any and all federal, state and local laws
concerning the protection of human health and the environment,
including but not limited to the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
9601 et seq; the Resource Conservation and Recovery Act ("RCRA"),
42 U.S.C. 6901, et seq.; the Federal Water Pollution Control Act,
33 U.S.C. 1251 et seq.; the Clean Air Act, 42 U.S.C. 7401, et
seq.; the Hazardous Materials Transportation Act, 49 U.S.C. 1471,
et seq.; the Toxic Substances Control Act, 15 U.S.C. 2601 through
2629; and the Safe Drinking Water Act, 42 U.S.C. 300f through
300j; each, as amended from time to time, or any successor laws
thereto, together with the rules and regulations promulgated
thereunder, together with any and all environmental or land use
laws, rules, ordinances, or regulations.
(c) Cleanup. For purposes of this Article, "Cleanup"
means all actions required to: (i) clean up, remove, treat or
remediate any Hazardous Substance in the indoor or outdoor
environment; (ii) prevent the Release of Hazardous Substances so
that they do not migrate, endanger or threaten to endanger public
health or welfare or the indoor or outdoor environment; (iii)
perform pre-remedial studies and investigations and post-remedial
monitoring and care; or (v) respond to any government requests
for information or documents in any way relating to cleanup,
removal, treatment or remediation of the indoor or outdoor
environment.
(d) Release. For purposes of this Article, "Release"
means any release, spill, emission, discharge, leaking, pumping,
injection, deposit, disposal, dispersal, leaching or migration
into the indoor or outdoor environment (including, without
limitation, ambient air, surface water, groundwater and surface
or subsurface strata) or into or out of any property, including
the movement of any Hazardous Substance through or in the air,
soil, surface water, groundwater or property.
(e) Environmental Liabilities. For purposes of this
Article, "Environmental Liabilities" means all losses, liabil-
ities, claims, obligations, damages, deficiencies, costs,
expenses and fees, including costs of Cleanup (excluding all
employment and benefit costs of Buyer's employees), incurred or
required to be paid as a result of or arising out of:
(i) Hazardous Substances that are or were at,
upon, in or under the Real Property prior to the Closing,
(ii) Hazardous Substances Released at anytime at
any location other than the Real Property (including Hazardous
Substances emanating from the Real Property) if such Hazardous
Substances were generated, stored, disposed of, recycled,
Released, used or transported, by or on behalf of Seller or the
Subsidiaries prior to the Closing; or
(iii) acts, omissions or any noncompliance with
any Applicable Law prior to the Closing.
Section 7.2 Environmental Indemnification and Remediation
Activities.
(a) Environmental Indemnification. Seller will indem-
nify, defend and hold Buyer and Affiliates of Buyer harmless from
and against any and all Environmental Liabilities, except for
Environmental Liabilities arising due to a post-closing change in
Applicable Law. The express indemnification set forth in this
Section 7.2(a) will remain in full force and effect for a period
of 15 years from the Closing Date. After ten years, Seller's
liability under this express indemnification will decrease by 20%
each year for the remaining five years. The limitations to
Seller's indemnification set forth in Section 9.1(b) will not
apply to this Article 7.
(b) Remediation Activities. Seller agrees to assume
monetary responsibility for the remediation activities described
below to the extent Buyer undertakes these activities after the
Closing Date and provided such remediation activities are com-
pleted in accordance with the remediation plans established by
Buyer and agreed to by Seller as set forth below. Seller will
reimburse Buyer for the costs and expenses incurred by Buyer (ex-
cluding all compensation and benefit costs of Buyer's employees)
in completing the following remedial actions:
(i) 50% of the anticipated total cost of $275,000
of obtaining new operating permits and associated testing, up to
a maximum of $137,500.
(ii) 80% of the anticipated total cost of $400,000
of (i) removal of beryllium from interior wall areas and from
overhead steel rafters and certain horizontal surfaces existing
on the Closing Date at the Colorado Mill, and (ii) final closure
of a disposal trench at the Colorado Mill, up to a maximum of
$320,000 for the remediation activities set forth in this Section
7.2(b)(2).
Article VIII
Survival of Representations and Warranties
All of the representations and warranties set forth in this
Agreement or in any exhibit, schedule, document or other
instrument delivered under this Agreement will (unless waived in
writing by the party for whose benefit such representation or
warranty was made) remain in full force and effect regardless of
any investigation, verification or approval by or on behalf of
any party hereto, and will survive the Closing Date for a period
of two years, except that all representations made related to
title of the Assets or the stock of the Subsidiaries will survive
for the applicable statute of limitations.
Article IX
Indemnification
Section 9.1 Indemnification By Seller.
(a) Extent of Indemnity. Seller agrees to indemnify,
defend and hold harmless Buyer from and against:
(i) any Damages of Buyer resulting from any mis-
representation or breach of representation or warranty of Seller
in this Agreement or in any agreement or statement or certificate
furnished by Seller to Buyer pursuant hereto or in connec-
tion with the transactions contemplated hereby;
(ii) any Damages of Buyer arising out of or
resulting from any breach of any covenant or agreement of Seller
in this Agreement or in any agreement or statement or certificate
furnished by Seller to Buyer pursuant hereto or in connection
with the transactions contemplated hereby;
(iii) the failure of Seller to discharge in full
any liability or obligation of Seller or Company related to the
Business that existed or occurred prior to the Closing Date,
which was not expressly assumed as an Assumed Liability by the
Buyer under this Agreement; and
(iv) any actions, judgments, costs and expenses
(including reasonable attorneys' fees and all other expenses
incurred in investigating, preparing or defending any liti-
gation or proceeding, commenced or threatened) incident to any
of the foregoing or the enforcement of this Section by Seller.
(b) Limitations on Liability. Seller shall not be
liable to Buyer under Section 9.1(a)(i) unless the cumulative
total of Damages indemnified under this Section exceeds
$1,000,000 (the "Basket"), in which event Buyer shall be
entitled to indemnification only to the extent that such
Damages exceed the Basket. Seller's aggregate liability under
Section 9.1(a)(i) shall in no event exceed $7,500,000 (the
"Cap"). No Basket or Cap will apply to indemnification by Seller
under Sections 9.1(a)(ii) through 9.1(a)(iv). The right to
indemnification provided under Section 9.1(a)(i) shall be the
exclusive remedy of Buyer against Seller for breach of a
representation or warranty.
Section 9.2 Indemnification by Buyer.
(a) Extent of Indemnity. Buyer agrees to indemnify,
defend and hold harmless Seller from and against:
(i) any Damages of Seller arising out of or
resulting from any material misrepresentation or breach of
representation or warranty of Buyer in this Agreement or in any
agreement or statement or certificate furnished by Buyer to
Seller in connection with the transactions contemplated hereby;
(ii) any Damages of Seller arising out of or
resulting from any breach or nonfulfillment of any covenant or
agreement of Buyer in this Agreement or in any agreement or
statement or certificate furnished by Buyer to Seller in con-
nection with the transactions contemplated hereby;
(iii) any Damages of Seller arising out of or
resulting from any assertion against Seller of any liability or
obligation included in the Assumed Liabilities; and
(iv) any actions, judgments, costs and expenses
(including reasonable attorneys' fees and all other expenses
incurred in investigating, preparing or defending any litigation
or proceeding, commenced or threatened) incident to any of the
foregoing or the enforcement of this Section by Buyer.
Section 9.3 Indemnification Procedures.
(a) A party seeking indemnification pursuant to this
Agreement (an "Indemnified Party") shall give prompt notice to
the party from whom such indemnification is sought (the "Indemni-
fying Party") of the assertion of any claim, or the commencement
of any action, suit or proceeding by a third party which is
not an Affiliate of any party hereto in respect of which indem-
nity may be sought hereunder (a "Third Party Claim"), and will
give the Indemnifying Party such information with respect thereto
as the Indemnifying Party may reasonably request, but failure to
give such notice shall not relieve the Indemnifying Party of
any liability except to the extent that the Indemnifying Part
is actually prejudiced thereby.
(b) The Indemnifying Party shall have the right,
exercisable by written notice to the Indemnified Party within 30
days of receipt of notice from the Indemnified Party of the
commencement or assertion of any Third Party Claim, to assume and
conduct the defense of such Third Party Claim with counsel
selected by the Indemnifying Party and reasonably acceptable to
the Indemnified Party; provided that (i) the defense of such
Third Party Claim by the Indemnifying Party will not, in the
reasonable judgment of the Indemnified Party, have a Material
Adverse Effect on the Indemnified Party; and (ii) the Indemnify-
ing Party has sufficient financial resources, in the reasonable
judgment of the Indemnified Party, to satisfy the amount of any
adverse monetary judgment that is reasonably likely to result;
and (iii) the Third Party Claim solely seeks (and continues to
seek) monetary damages (the conditions set forth in clauses (i)
through (iii) are collectively referred to as the "Litigation
Conditions"). If the Indemnifying Party does not assume the
defense of such Third Party Claim in accordance with this Section
9.3, the Indemnified Party may continue to defend the Third Party
Claim. If the Indemnifying Party has assumed the defense of a
Third Party Claim as provided in this Section 9.3, the Indemnify-
ing Party will not be liable for any legal expenses subsequently
incurred by the Indemnified Party in connection with the defense
thereof; provided, however, that if (i) the Litigation Conditions
cease to be met, or (ii) the Indemnifying Party fails to take
reasonable steps necessary to defend diligently such Third Party
Claim, the Indemnified Party may assume its own defense, and the
Indemnifying Party will be liable for all reasonable costs or
expenses paid or incurred in connection therewith.
(c) The Indemnifying Party or the Indemnified Party,
as the case may be, shall have the right to participate in (but
not control), at its own expense, the defense of any Third Party
Claim which the other is defending as provided in this Agreement.
(d) No settlement of a Third Party Claim may be made
without the prior written consent of the Indemnifying Party and
the Indemnified Party, which consents may not be unreasonably
withheld, conditioned or delayed. Consent is presumed in the
case of settlement of $50,000 or less where the other party has
not responded to the proposal to settle within 10 business days
of notice of a proposed settlement.
(e) Amounts payable in respect of indemnification
obligations of the parties shall be treated as an adjustment to
the Purchase Price. Whether or not the Indemnifying Party
chooses to defend or prosecute any Third Party Claim, all the
parties hereto shall cooperate in the defense or prosecution
thereof and shall furnish such records, information and testimony,
and attend such conferences, discovery proceedings, hearings,
trials and appeals, as may be reasonably requested in connection
therewith.
Article X
Conditions Precedent to the Closing
Section 10.1 Conditions Precedent to the Obligations of
Buyer. All obligations of Buyer under this Agreement are, at its
sole option, subject to the fulfillment or satisfaction, prior to
or at the Closing, of each of the following conditions precedent:
(a) Representations and Warranties. The representations
and warranties of Seller contained in this Agreement (i) quali-
fied as to materiality must have been true and correct in all
respects when made and must be true and correct in all respects
at and as of the Closing Date, and (ii) not qualified as to
materiality must have been true and correct in all material
respects when made and must be true and correct in all material
respects at and as of the Closing Date.
(b) Compliance with this Agreement. Seller shall have
performed and complied in all respects with all agreements and
conditions required by this Agreement to be performed or complied
with by it prior to or at the Closing.
(c) No Pending Litigation. On the Closing Date, no
suit, action or other proceeding, or injunction or final judgment
relating thereto, shall be pending before any court or governmen-
tal or regulatory official, body or authority in which it is
sought to restrain or prohibit or to obtain damages or other
relief in connection with this Agreement or the consummation of
the transactions contemplated hereby.
(d) HSR Act. The waiting period under the HSR Act
shall have expired or been terminated.
(e) Satisfactory Instruments. All instruments and
documents required on Seller's part to effectuate and consummate
the transactions contemplated hereby shall be delivered to Buyer
and shall be in form and substance reasonably satisfactory to
Buyer and its counsel.
(f) Consents. Seller shall have delivered to Buyer at
Closing copies of all consents to assignment of all material
contracts, agreements and arrangements.
(g) Guaranty. Seller shall have caused ACX
Technologies, Inc. its parent corporation, to deliver to Buyer at
Closing a Guaranty of all of Seller's indemnity obligations here-
under, in substantially the form of Exhibit C.
(h) Owner's Affidavit. Seller shall have delivered to
Buyer the Owner's Affidavit described in Section 6.7.
(i) Consent Decree. The Final Judgment, Hold Separate
Stipulation and Order in the matter United States of America v.
Alcoa Inc., ACX Technologies, Inc., and Golden Aluminum Company
shall have been filed in the United States District Court for the
District of Columbia in the form attached hereto as Exhibit D, or
as modified with the prior written consent of Buyer and ACX
Technologies, Inc.
Section 10.2 Conditions Precedent to the Obligations of
Seller. All obligations of Seller under this Agreement are, at
its sole option, subject to the fulfillment or satisfaction,
prior to or at the Closing, of each of the following conditions
precedent:
(a) Representations and Warranties. The representations
and warranties of Buyer contained in this Agreement shall be
true and correct in all material respects on the Closing Date,
with the same force and effect as though such representations
and warranties had been made on the Closing Date.
(b) Compliance with this Agreement. Buyer shall have
performed and complied in all material respects with all agree-
ments and conditions required by this Agreement to be performed
or complied with by it prior to or at the Closing.
(c) No Pending Litigation. On the Closing Date, no
suit, action or other proceeding, or injunction or final judgment
relating thereto, shall be pending before any court or governmen-
tal or regulatory official, body or authority in which it is
sought to restrain or prohibit or to obtain damages or other
relief in connection with this Agreement or the consummation of
the transactions contemplated hereby.
(d) HSR Act. The waiting period under the HSR Act
shall have expired or been terminated.
(e) Satisfactory Instruments. All instruments and
documents required on the part of Buyer to effectuate and consum-
mate the transactions contemplated hereby shall be delivered to
Seller and shall be in form and substance reasonably satisfactory
to Seller and its counsel.
(f) Consent Decree. The Final Judgment, Hold Separate
Stipulation and Order in the matter United States of America v.
Alcoa Inc., ACX Technologies, Inc., and Golden Aluminum Company
shall have been filed in the United States District Court for the
District of Columbia in the form attached hereto as Exhibit D, or
as modified with the prior written consent of Buyer and ACX
Technologies, Inc.
Article XI
Termination
Section 11.1 Termination. This Agreement may be terminated
by either Seller or Buyer at any time prior to the Closing:
(a) by mutual written consent of Seller and Buyer;
(b) by either Seller or Buyer (by written notice to
the other) if the Closing shall not have occurred on or before
November 15, 1999, provided that no termination right under this
Section shall be available to any party whose failure to fulfill
any obligation under this Agreement has been the cause of the
failure of the Closing to occur on or prior to such date; or
(c) by either Seller or Buyer (by written notice to
the other) if any court of competent jurisdiction in the United
States or federal or state governmental or regulatory body in the
United States shall have issued an order, decree or ruling or
taken such other action that permanently restrains, enjoins or
otherwise prohibits the transactions contemplated hereby and such
order, decree, ruling or other action shall have become final and
non-appealable;
Section 11.2 Effect of Termination. Upon of the termination
of this Agreement in accordance with the provisions of Section
11.1, this Agreement shall become null and void and have
no further effect without any liability on the part of any of the
parties, except as follows:
(a) if the termination results from the willful failure
to perform its obligations under this Agreement, such nonperform-
ing party shall be fully liable for any and all damages, cost
and expenses (including, without limitation, reasonable
attorney's fees) sustained or incurred by such other party; or
(b) if the termination results, not as a result of
willful failure of any party to perform its obligations here-
under, but as the result of the material breach by such party of
a representation, warranty, or covenant hereunder, such breaching
party shall be liable to the other party for all costs and
expenses of the other party in connection with the preparation,
negotiation, execution and performance of this Agreement.
Article XII
Miscellaneous
Section 12.1 Expenses. Each of the parties to this Agree-
ment will bear all the expenses incurred by it in connection with
the negotiation and preparation of this Agreement and the
consummation of the transactions contemplated by this Agreement
regardless of whether this Agreement is terminated. Except as
otherwise provided in this Agreement, the following taxes,
charges and payments ("Charges") will be prorated on a per diem
basis as indicated and apportioned between Seller and Buyer as of
the date of the Closing: real property (daily), use (monthly),
intangible taxes (monthly), utility charges (monthly), rental or
lease charges (term of lease), license fees (term of lease),
general assessments (taxable year), and franchise, national or
cantonal or other income taxes (daily) imposed with respect to
the Assets and employee payrolls (monthly). Seller will be
liable for that portion of the Charges relating to, or arising in
respect of, the period on or prior to the date of the Closing and
Buyer will be liable for that portion of the Charges relating to,
or arising in respect of, any periods after the date of the
Closing.
Section 12.2 Contents of Agreement; Parties in Interest.
This Agreement sets forth the entire understanding of Buyer and
Seller with respect to the transactions contemplated hereby.
This Agreement shall not be amended or modified except by
written instrument duly executed by Buyer and Seller. Any and
all previous agreements and understandings between Buyer and
Seller regarding the subject matter hereof, whether written or
oral, are superseded by this Agreement.
Section 12.3 Assignment and Binding Effect. Except as
provided below, this Agreement may not be assigned by Buyer or
Seller without the prior written consent of the other party,
which consent may not be unreasonably withheld. Buyer may assign
its rights and may delegate its duties under Sections 6.5 and 6.6
of this Agreement, in whole or in part as Buyer deems appropriate,
to a buyer of the Colorado Mill. Subject to the foregoing, all
of the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the
successors and permitted assigns of Seller and Buyer.
Section 12.4 Notices. Any notice, request, demand, waiver,
consent, approval or other communication which is required or
permitted hereunder shall be in writing and shall be deemed given
only if delivered personally or sent by facsimile or by
registered or certified mail, postage prepaid, as follows:
If to Buyer, to:
Alcoa Inc.
Alcoa Corporate Center
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxxx X. Xxxxxxx, General Counsel
Facsimile: (000) 000-0000
If to Seller, to:
Golden Aluminum Company
00000 Xxxxx Xxxxxxxx Xxxxxxx
Xxxxxx, XX 00000
Attention: Xxx X. Xxxxxxx
Facsimile: (000) 000-0000
With a required copy to:
Golden Aluminum Company
00000 Xxxxx Xxxxxxxx Xxxxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. X. Xxxxxx, General Counsel
Facsimile: (000) 000-0000
With an additional required copy to:
Holland & Xxxx LLP
Suite 3200
000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address as the addressee may have specified in a
notice duly given to the sender as provided herein. Such notice,
request, demand, waiver, consent, approval or other communication
will be deemed to have been given as of the date so delivered,
sent by facsimile (with confirmation of receipt) or three days
after deposited with the United States Post Office.
Section 12.5 Governing Law. This Agreement shall be
governed by and interpreted and enforced in accordance with the
laws of the State of Colorado without regard to conflicts
of law principles.
Section 12.6 No Benefit to Others. The representations,
warranties, covenants and agreements contained in this Agreement
are for the sole benefit of the parties hereto and their
successors and assigns, and they shall not be construed as
conferring any rights on any other persons.
Section 12.7 Headings, Gender and "Person." All section
headings contained in this Agreement are for convenience of
reference only, do not form a part of this Agreement and shall
not affect in any way the meaning or interpretation of this Agree
ment. Words used herein, regardless of the number and gender
specifically used, shall be deemed and construed to include any
other number, singular or plural, and any other gender,
masculine, feminine, or neuter, as the context requires. Any
reference to a "person" herein shall include an individual, firm,
corporation, partnership, trust, governmental authority or body,
association, unincorporated organization or any other entity.
Section 12.8 Publicity. No press release, notice, disclo-
sure or other publicity concerning the transactions contemplated
by this Agreement shall be issued, given, made or other-
wise disseminated by Buyer or Seller without the prior approval
of the other party, unless required by law.
Section 12.9 Severability. Any provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall be
ineffective to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable the remaining
provisions hereof, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.
Section 12.10 Counterparts. This Agreement may be executed
in any number of counterparts, and Buyer and Seller may execute
any such counterpart, each of which when executed and delivered
shall be deemed to be an original and all of which counterparts
taken together shall constitute one and the same instrument.
This Agreement shall become binding when one or more counter-
parts taken together shall have been executed and delivered by
Buyer and Seller.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement on the date first written.
BUYER:
ALCOA INC.
By:_____________________________
Name:___________________________
Title:__________________________
SELLER:
GOLDEN ALUMINUM COMPANY
By:_____________________________
Name:___________________________
Title:__________________________
