CRAMERTON AUTOMOTIVE PRODUCTS L.P.
AND
CRAMERTON MANAGEMENT CORPORATION
EQUITY PURCHASE AGREEMENT
BY AND AMONG
SEIREN U.S.A. CORPORATION,
SEIREN AUTOMOTIVE TEXTILE CORPORATION,
AND
SEIREN CO., LTD.,
as SELLERS,
AND
XXXXXXX & XXXXXX PRODUCTS CO.,
as PURCHASER
Dated as of December 11, 1996
TABLE OF CONTENTS
Page
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I.
DEFINITIONS
Section 1.1. Definitions . . . . . . . . . . . . . . . . 1
Section 1.2. Accounting Terms and Determinations . . . . 5
ARTICLE II.
SALE AND PURCHASE
Section 2.1. Agreement to Sell and to Purchase . . . . . 6
Section 2.2. Purchase and Sale of Equity . . . . . . . . 6
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLERS
Section 3.1. Authority of Sellers . . . . . . . . . . . 6
Section 3.2. Title to the LP Interest and the GP Interest 7
Section 3.3. Title to the CMC Equity . . . . . . . . . . 7
Section 3.4. Valid Issuance; No Options . . . . . . . . 7
Section 3.5. No Conflict or Violation; Consents . . . . 7
Section 3.6. Reserved . . . . . . . . . . . . . . . . . 8
Section 3.7. Financial Statements of the Company . . . . 8
Section 3.8. Financial Statements of CMC . . . . . . . . 8
Section 3.9. Undisclosed Liabilities . . . . . . . . . . 9
Section 3.10. Material Adverse Effect . . . . . . . . . . 9
Section 3.11. Disclaimer of Additional Representations and
Warranties; Schedules . . . . . . . . . . 9
Section 3.12. Brokers . . . . . . . . . . . . . . . . . . 9
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Section 4.1. Authority of Purchaser . . . . . . . . . . 10
Section 4.2. No Conflict or Violation . . . . . . . . . 10
Section 4.3. Litigation . . . . . . . . . . . . . . . . 10
Section 4.4. Brokers . . . . . . . . . . . . . . . . . . 10
Section 4.5. Investment Intent; Status . . . . . . . . . 11
i
Section 4.6. Disclaimer of Additional Representations and
Warranties . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE V.
CERTAIN COVENANTS OF SELLERS
Section 5.1. Conduct of Business . . . . . . . . . . . . 11
Section 5.2. Information and Access . . . . . . . . . . 11
ARTICLE VI.
CERTAIN COVENANTS AND AGREEMENTS
Section 6.1. Filings . . . . . . . . . . . . . . . . . . 11
Section 6.2. Transfer Taxes . . . . . . . . . . . . . . 11
Section 6.3. Certain Provisions Relating to Consents . . 12
Section 6.4. Nondisclosure; Noncompetition . . . . . . . 12
Section 6.5. Efforts . . . . . . . . . . . . . . . . . . 13
Section 6.6. Tax Sharing Agreements and Arrangements . . 13
Section 6.7. Tax Returns . . . . . . . . . . . . . . . . 13
ARTICLE VII.
CONDITIONS TO SELLERS' OBLIGATIONS
Section 7.1. Representations and Warranties . . . . . . 14
Section 7.2. Compliance with Agreement . . . . . . . . . 14
Section 7.3. No Adverse Proceeding . . . . . . . . . . . 14
Section 7.4. Consents . . . . . . . . . . . . . . . . . 14
Section 7.5. Corporate Documents . . . . . . . . . . . . 14
Section 7.6. New Marketing Agreement . . . . . . . . . . 14
Section 7.7. Termination of Agreements . . . . . . . . . 14
Section 7.8. FIRPTA . . . . . . . . . . . . . . . . . . 15
Section 7.9. JPS Automotive Agreement Closing . . . . . 15
Section 7.10. Opinion of Counsel . . . . . . . . . . . . 15
Section 7.11. Company Tax Distribution . . . . . . . . . 15
ARTICLE VIII.
CONDITIONS TO PURCHASER'S OBLIGATIONS
Section 8.1. Representations and Warranties . . . . . . 15
Section 8.2. Compliance with Agreement . . . . . . . . . 16
Section 8.3. No Adverse Proceeding . . . . . . . . . . . 16
Section 8.4. Consents . . . . . . . . . . . . . . . . . 16
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Section 8.5. Corporate Documents . . . . . . . . . . . . 16
Section 8.6. FIRPTA . . . . . . . . . . . . . . . . . . 16
Section 8.7. JPS Automotive Agreement . . . . . . . . . 16
Section 8.8. Purchaser Bank Consent . . . . . . . . . . 16
Section 8.9. Material Adverse Effect . . . . . . . . . . 16
Section 8.10. Clearance Certificates . . . . . . . . . . 17
Section 8.11. Marketing and Consulting Agreements . . . . 17
Section 8.12. Waiver of Any Seiren Right of First Refusal 17
Section 8.13. Release of Claims Against the Company and CMC 17
Section 8.14. Opinions of Counsel . . . . . . . . . . . . 18
ARTICLE IX.
THE CLOSING; TERMINATION
Section 9.1. The Closing . . . . . . . . . . . . . . . . 18
Section 9.2. Deliveries by Sellers at the Closing . . . 18
Section 9.3. Deliveries by Purchaser at the Closing . . 19
Section 9.4. Termination . . . . . . . . . . . . . . . . 19
ARTICLE X.
INDEMNIFICATION
Section 10.1. Survival . . . . . . . . . . . . . . . . . 19
Section 10.2. Indemnification Provisions for Benefit of
Purchaser . . . . . . . . . . . . . . . 20
Section 10.3. Indemnification Provisions for Benefit of
Sellers . . . . . . . . . . . . . . . . 21
Section 10.4. Matters Involving Third Parties . . . . . 21
Section 10.5. Certain Additional Provisions Relating to
Indemnification . . . . . . . . . . . . 22
ARTICLE XI.
MISCELLANEOUS PROVISIONS
Section 11.1. Notices . . . . . . . . . . . . . . . . . 23
Section 11.2. Amendments . . . . . . . . . . . . . . . . 23
Section 11.3. Assignment and Parties in Interest . . . . 23
Section 11.4. Announcements . . . . . . . . . . . . . . 24
Section 11.5. Expenses . . . . . . . . . . . . . . . . . 24
Section 11.6. Entire Agreement . . . . . . . . . . . . . 24
Section 11.7. Descriptive Headings . . . . . . . . . . . 24
Section 11.8. Counterparts . . . . . . . . . . . . . . . 24
Section 11.9. Governing Law; Jurisdiction; Waiver of Jury
Trial . . . . . . . . . . . . . . . . . . 24
Section 11.10. Construction . . . . . . . . . . . . . . . 25
iii
Section 11.11. Severability . . . . . . . . . . . . . . . 25
Section 11.12. Specific Performance . . . . . . . . . . . 25
Signature Page . . . . . . . . . . . . . . . . . . . . . . 26
SCHEDULE
NUMBER SCHEDULE NAME
1.1 Certain Officers
3.5 Conflicts or Violations
3.7(a) Financial Statements of the Company
3.7(b) Interim Financial Statements of the Company
3.8 Financial Statements of CMC
3.9(a) Undisclosed Liabilities of the Company
3.9(b) Undisclosed Liabilities of CMC
3.10 Material Adverse Effect
8.4 Consents, Permits, Authorizations, Approvals, Waivers
and Amendments
EXHIBIT EXHIBIT NAME
A Form of New Marketing Agreement
B Form of FIRPTA Certificates
C Form of Purchaser's Opinion of Counsel
D Form of Sellers' Opinion of Counsel
The Registrant hereby undertakes to furnish supplementally a copy of
any schedule omitted herefrom as permitted by Item 601(b)(2) of Regulation
S-K to the Commission upon request.
iv
EQUITY PURCHASE AGREEMENT
THIS EQUITY PURCHASE AGREEMENT (this "Agreement") is made
and entered into as of December 11, 1996 by and among SEIREN U.S.A.
CORPORATION, a New York corporation ("Seiren Affiliate 1"), SEIREN
AUTOMOTIVE TEXTILE CORPORATION, a Delaware corporation ("Seiren
Affiliate 2"), SEIREN CO., LTD., a Japanese corporation ("Seiren
Shareholder" and together with Seiren Affiliate 1 and Seiren Affiliate
2, "Sellers"), and XXXXXXX & XXXXXX PRODUCTS CO., a Delaware
corporation ("Purchaser").
RECITALS
A. Seiren Affiliate 1 owns an 18.5% limited
partnership interest (the "LP Interest") in Cramerton Automotive
Products, L.P. (the "Company"); and
B. Seiren Affiliate 2 owns a 1% general partnership
interest in the Company (the "GP Interest"); and
C. Seiren Shareholder owns a 50% common stock interest in
Cramerton Management Corporation ("CMC") (the "CMC Equity" and
together with the LP Interest and the GP Interest, the "Equity"),
which owns a 1% general partnership interest in the Company; and
D. Purchaser desires to purchase the Equity from
Sellers, and Sellers desire to sell the Equity to Purchaser, in
each case upon the terms and subject to the conditions set forth
in this Agreement;
NOW, THEREFORE, in consideration of the premises, the mutual
covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1. Definitions. In addition to the terms defined
elsewhere herein, the terms defined in the introductory paragraph and
the recitals to this Agreement shall have the respective meanings
specified therein, and the following terms shall have the meanings
specified below when used herein with initial capital letters:
"Affiliate" means "affiliate" as defined in Rule 405
promulgated under the Securities Act of 1933, as amended.
"Agreement" has the meaning set forth in the preamble,
and shall include all Schedules and Exhibits hereto.
"Balance Sheet" has the meaning set forth in
Section 3.7(a).
"Business Day" means a day, other than a Saturday or a
Sunday, on which commercial banks are not required or authorized to
close in the City of New York and Tokyo, Japan.
"Cap" has the meaning set forth in Section 10.2(a).
"Closing" has the meaning set forth in Section 9.1.
"Closing Date" has the meaning set forth in
Section 9.1.
"CMC" has the meaning set forth in the third recital
hereto.
"CMC Balance Sheet" has the meaning set forth in
Section 3.8.
"CMC Balance Sheet Date" means October 26, 1996.
"CMC Equity" has the meaning set forth in the third
recital hereto.
"CMC Stockholders' Agreement" means the Stockholders'
Agreement dated as of December 2, 1991 among CMC, JPS Textile Group,
Inc. and Seiren Shareholder, as amended and supplemented.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Company" has the meaning set forth in the first recital
hereto and, in Sections 3.9, 3.10 and 3.11, includes the Company and
CMC.
"Consulting Agreement" means the consulting agreement
between the Company and Seiren Shareholder having commenced on January
1, 1996 and ending on December 31, 1996 establishing arrangements
regarding the employment of certain individuals by the Company, as
extended by the New Marketing Agreement.
"Cramerton Consulting Agreement" means the Consulting
Agreement dated as of December 2, 1991 between the Company and Seiren
Affiliate 1.
"Damages" means any losses, amounts paid in settlement,
claims, damages, Liabilities, obligations, judgments, settlements and
reasonable out-of-pocket costs (including, without limitation, costs
of investigation or enforcement), expenses and attorneys' fees,
including, without limitation, (i) any consequential damages or (ii)
any special or punitive damages which are assessed against any
Indemnified Party as a result of a third party action.
2
"Deductible" has the meaning set forth in Section 10.2.
"Equity" has the meaning set forth in the third recital
hereto.
"Former Marketing Agreement" means the marketing agreement
between the Company and Seiren Shareholder having commenced on January
1, 1995 and ending on December 31, 1997, as evidenced by the Unanimous
Written Consent of the Board of Directors of the Company dated as of
March 31, 1995.
"Governmental Agency" means (a) any international, foreign,
federal, state, county, local or municipal governmental or
administrative agency or political subdivision thereof, (b) any
governmental agency, authority, board, bureau, commission, department
or instrumentality, (c) any court or administrative tribunal, (d) any
non-governmental agency, tribunal or entity that is vested by a
governmental agency with applicable jurisdiction or (e) any
arbitration tribunal or other non-governmental authority with
applicable jurisdiction.
"GP Interest" has the meaning set forth in the second
recital hereto.
"Indemnified Party" has the meaning set forth in Section
10.4(a) and in the case of Purchaser shall also include the Company
and CMC.
"Indemnifying Party" has the meaning set forth in Section
10.4(a).
"Interim Balance Sheet" has the meaning set forth in Section
3.7(b).
"Interim Balance Sheet Date" means June 30, 1996.
"Interim Financial Statements" has the meaning set forth in
Section 3.7(b).
"IRS" means the Internal Revenue Service of the Department
of the Treasury.
"JPS Automotive" means JPS Automotive L.P., a Delaware
limited partnership.
"JPS Automotive Agreement" means the JPS Automotive L.P.
Equity Purchase Agreement dated as of August 28, 1996 by and among
JPSGP Inc., Foamex-JPS Automotive L.P. and Xxxxxxx & Xxxxxx Products
Co.
"JPS Automotive Closing" has the meaning set forth in
Section 6.7.
"JPS Automotive Marketing Agreement" means the Marketing
Agreement dated as of December 2, 1991 between JPS Automotive and
Seiren Shareholder.
"Knowledge" as applied to Sellers means the actual knowledge
of any person listed on Schedule 1.1 hereto; it being agreed and
understood that (i) no Seller has participated in the preparation of
any financial statements of the Company or CMC or the day to day
management or operations of the Company or CMC and (ii) no Seller has
undertaken any independent
3
investigation to determine the accuracy of any of the representations
and warranties herein that are qualified by the term "Knowledge."
"Liability" means any liability or obligation (whether known
or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or
unliquidated and whether due or to become due), including, without
limitation, any liability for Taxes.
"Lien" means any lien, mortgage, pledge or other security
interest.
"LP Interest" has the meaning set forth in the first recital
hereto.
"Material Adverse Effect" means a material adverse change in
or effect with respect to the business, results of operations,
properties or financial condition of either (i) the Company or (ii)
CMC.
"New Marketing Agreement" has the meaning set forth in
Section 7.6.
"Parent Entities" means Sellers and their Affiliates, other
than the Company and CMC and their respective officers and directors.
"Partner Interest Purchase Agreement" means the Partner
Interest Purchase Agreement dated as of December 2, 1991 by and among
JPS Automotive Products Corp., CMC, Seiren Affiliate 1 and Seiren
Affiliate 2, as amended and supplemented.
"Partnership Agreement" means the Company's Amended and
Restated Agreement of Limited Partnership dated as of December 2,
1991, as amended by the First Amendment to Amended and Restated
Agreement of Limited Partnership dated as of June 2, 1994, as amended
by the Second Amendment to Amended and Restated Agreement of Limited
Partnership dated as of October 3, 1994.
"Permit" means any permit, approval, consent, authorization,
license, variance or permission required by a Governmental Agency
under any applicable laws.
"Perpetual Representations" has the meaning set forth in
Section 10.1.
"Person" means any individual, partnership, corporation,
trust, association, limited liability company, Governmental Agency or
any other entity.
"Purchase Price" means $10,000,000.
"Purchaser" has the meaning set forth in the preamble
hereto.
"Purchaser's Opinion of Counsel" has the meaning set forth
in Section 7.10.
"Released Persons" has the meaning set forth in Section
8.13.
4
"Schedules" or "Disclosure Schedules" means the various
Schedules referred to in this Agreement and attached hereto.
"Second Short Tax Year" has the meaning set forth in
Section 6.7.
"Seiren Affiliate 1" has the meaning set forth in the
preamble hereto.
"Seiren Affiliate 2" has the meaning set forth in the
preamble hereto.
"Seiren Shareholder" has the meaning set forth in the
preamble hereto.
"Seller Entity" means any of the Company and CMC.
"Sellers" has the meaning set forth in the preamble hereto.
"Sellers' Opinion of Counsel" has the meaning set forth in
Section 8.14.
"Subsidiary" means "subsidiary" as defined in Rule 405
promulgated under the Securities Act of 1933, as amended.
"Tax Return" means any report, return, information return,
form, declaration, claim for refund, statement or other information
(including any amendment thereto and including any schedule or
statement thereto) required to be supplied to a Governmental Agency in
connection with Taxes.
"Taxes" means all federal, state, local, foreign and other
taxes, assessments and water and sewer charges and rents, including,
without limitation, income, gross receipts, excise, employment, sales,
use, transfer, license, payroll, franchise, severance, stamp,
withholding, Social Security, unemployment, real property, personal
property, registration, capital stock, value added, single business,
occupation, workers' compensation, alternative or add-on minimum,
estimated or other tax, including, without limitation, any interest,
penalties or additions thereto.
Section 1.2. Accounting Terms and Determinations. All
references in this Agreement to "generally accepted accounting
principles" or "GAAP" shall mean generally accepted accounting
principles in effect in the United States of America at the time of
application thereof, applied on a consistent basis. Unless otherwise
specified herein, all accounting terms used herein shall be
interpreted, all determinations with respect to accounting matters
hereunder shall be made, and all financial statements and certificates
and reports as to financial matters required to be furnished hereunder
shall be prepared, in accordance with generally accepted accounting
principles, applied on a consistent basis.
5
ARTICLE II.
SALE AND PURCHASE
Section 2.1. Agreement to Sell and to Purchase. On the terms
and subject to the conditions set forth in this Agreement, at the
Closing, Purchaser shall purchase from Sellers, and Sellers shall
sell, transfer, assign, convey and deliver to Purchaser, the Equity.
Section 2.2. Purchase and Sale of Equity. On the terms and
subject to the conditions set forth in this Agreement, at the Closing
(in addition to the transactions referred to in Article IX):
(a) Seiren Affiliate 1 shall deliver to Purchaser or its
designees certificates representing the LP Interest, duly endorsed in
blank for transfer or accompanied by appropriate powers duly executed
in blank. Seiren Affiliate 2 shall deliver to Purchaser or its
designees certificates representing the GP Interest, duly endorsed in
blank for transfer or accompanied by appropriate powers duly executed
in blank. Seiren Shareholder shall deliver to Purchaser or its
designees certificates representing the CMC Equity, duly endorsed in
blank for transfer or accompanied by appropriate powers duly executed
in blank.
(b) Purchaser shall deliver to Sellers by wire transfer of
immediately available funds the Purchase Price to such accounts
specified by Sellers, of which 92.5% shall be paid by Purchaser to
Seiren Affiliate 1, 5% shall be paid by the Affiliate described in
Section 2.2(a) hereof to Seiren Affiliate 2 and 2.5% shall be paid by
Purchaser to Seiren Shareholder.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLERS
Subject to Section 3.11, each of Sellers, jointly and
severally, represents and warrants to Purchaser as set forth in this
Article III:
Section 3.1. Authority of Sellers. (a) Each of Seiren
Affiliate 1 and Seiren Affiliate 2 is a corporation duly organized,
validly existing and in good standing under the laws of New York and
Delaware, respectively, and has full corporate power and authority to
execute and deliver this Agreement. The execution and delivery by each
of Seiren Affiliate 1 and Seiren Affiliate 2 of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by all necessary corporate action on the part
of each of Seiren Affiliate 1 and Seiren Affiliate 2, and this
Agreement constitutes the legal, valid and binding obligation of
Seiren Affiliate 1 and Seiren Affiliate 2 enforceable against each
such entity in accordance with its terms, except as such enforcement
may be limited by applicable bankruptcy, insolvency, moratorium or
similar laws from time to time in effect which affect creditors'
rights generally and by legal and equitable limitations on the
enforceability of specific remedies.
6
(b) Seiren Shareholder is a corporation duly organized,
validly existing and in good standing under the laws of Japan and has
full corporate power and authority to execute and deliver this
Agreement. The execution and delivery by Seiren Shareholder of this
Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate
action on the part of Seiren Shareholder, and this Agreement
constitutes the legal, valid and binding obligation of Seiren
Shareholder enforceable against Seiren Shareholder in accordance with
its terms, except as such enforcement may be limited by applicable
bankruptcy, insolvency, moratorium or similar laws from time to time
in effect which affect creditors' rights generally and by legal and
equitable limitations on the enforceability of specific remedies.
Section 3.2. Title to the LP Interest and the GP Interest.
Seiren Affiliate 1 will have at the Closing valid and marketable title
to the LP Interest, free and clear of any Liens, except those arising
under this Agreement and the Partnership Agreement. Seiren Affiliate 2
will have at the Closing valid and marketable title to the GP
Interest, free and clear of any Liens, except those arising under this
Agreement and the Partnership Agreement.
Section 3.3. Title to the CMC Equity. Seiren Shareholder
will have at the Closing valid and marketable title to the CMC Equity,
free and clear of any Liens, except those arising under this Agreement
and the CMC Stockholders' Agreement.
Section 3.4. Valid Issuance; No Options. To the Knowledge of
Sellers: (a) all of the outstanding limited or general partnership
interests or shares of capital stock, as the case may be, of the
Company and CMC are duly authorized, validly issued, fully paid and
non-assessable, and (b) except for rights of first refusal of the
Sellers being waived at Closing pursuant to Section 8.12 hereof, there
are no outstanding or authorized options, warrants, calls,
subscriptions, rights, commitments or any other agreements of any
character (i) evidencing the right to purchase or subscribe to any
limited or general partnership interests or shares of capital stock,
as the case may be, of the Company or CMC or (ii) obligating the
Company or CMC to issue any additional shares of its respective
limited or general partnership interests or capital stock, as the case
may be.
Section 3.5. No Conflict or Violation; Consents. Except as
set forth on Schedule 3.5, neither the execution and delivery of this
Agreement by Sellers, nor the consummation of the transactions
contemplated hereby, nor the fulfillment of the terms and compliance
with the provisions hereof, will (a) conflict with or result in a
breach of or a default (or in an occurrence which with the lapse of
time or action by a third party, or both, could result in a default)
with respect to any of the terms, conditions or provisions of, (b)
result in the termination of, accelerate the performance required by,
(c) result in the creation of any Lien upon the Equity, or to the
Knowledge of Sellers, the assets of the Company or CMC in connection
with, (d) impair Sellers' ability to consummate the transactions
contemplated hereby, (e) except for such that are required solely as a
result of the regulatory status of the Purchaser or, to the Knowledge
of Sellers, the regulatory status of the Company or CMC, require any
filing with or approval of any Person, including, without limitation,
any Governmental Agency, arising out of, or (f) except as set forth in
Section 3.4(b) above, give rise to any right of termination or
renegotiation, or purchase or offer right, under: (x) any statute,
rule, regulation, code, order,
7
writ or decree of any Governmental Agency applicable to Sellers or, to
the Knowledge of Sellers, to the Company or CMC, (y) the Partnership
Agreement, the Certificate of Incorporation or By-Laws of CMC or
Sellers' constituent documents, or (z) any contract, lease, Permit or
other instrument to which any of the Sellers is a party or subject or
by which any of Sellers' properties or assets are bound, or, to the
Knowledge of Sellers, to which the Company or CMC is a party or
subject or by which any of their property or assets are bound, except
in the cases of clauses (x) and (z) for those conflicts, breaches,
defaults, terminations or accelerations which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect or materially impair the ability of Sellers to consummate the
transactions contemplated by this Agreement; provided, however, that
no representation or warranty is made hereby by Sellers with respect
to the effect of antitrust laws or regulations. No consent, approval
or authorization of, or registration or filing with, any Governmental
Agency is required to be obtained or made by or with respect to
Sellers in connection with the execution and delivery of this
Agreement by Sellers or the performance by Sellers of the transactions
contemplated hereby to be performed by them, except for such of the
foregoing (i) as are listed or described in Schedule 3.5, (ii) which,
if not so obtained or made, individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect or (iii) that
are required solely as a result of the regulatory status of the
Purchaser, the Company or CMC (of which, to the Knowledge of Sellers,
none are required as a result of the regulatory status of the Company
or CMC).
Section 3.6. Reserved.
Section 3.7. Financial Statements of the Company. (a) To the
Knowledge of Sellers, the audited balance sheet of the Company at
December 31, 1995 (the "Balance Sheet") and related statement of
income, retained earnings and cash flow for the periods then ended and
the notes thereto, (i) are included as Schedule 3.7(a), (ii) were
prepared in accordance with GAAP, consistently applied, and (iii)
present fairly the financial condition and the results of operations
of the Company as of the dates and for the periods indicated thereon.
(b) To the Knowledge of Sellers, the unaudited balance sheet
as of the Interim Balance Sheet Date (the "Interim Balance Sheet") and
the related income statement for the period then ended (collectively,
the "Interim Financial Statements") (i) are included as Schedule
3.7(b), (ii) were prepared in accordance with GAAP, consistently
applied, and (iii) present fairly the financial condition and the
results of operations of the Company as of the dates and for the
periods indicated thereon, subject to normal year-end adjustments. To
the Knowledge of Sellers, the Interim Financial Statements included
all adjustments, consisting solely of normal recurring accruals,
necessary for a fair presentation of the Company's consolidated
financial position and results of operations.
Section 3.8. Financial Statements of CMC. To the Knowledge
of Sellers, the unaudited balance sheet of CMC at October 26, 1996
(the "CMC Balance Sheet") and related statement of income, retained
earnings and cash flow for the periods then ended and the notes
thereto, (i) are included as Schedule 3.8, (ii) were prepared in
accordance with GAAP, consistently applied, and (iii) present fairly
the financial condition and the results of operations of CMC as of the
dates and for the periods indicated thereon.
8
Section 3.9. Undisclosed Liabilities. (a) To the Knowledge
of Sellers, as of the Interim Balance Sheet Date, the Company has no
material Liabilities, except for Liabilities: (a) reflected or
reserved for on the Interim Balance Sheet, (b) relating to performance
obligations under leases and contracts in accordance with the terms
and conditions thereof which are not required by GAAP to be reflected
on the Interim Balance sheet, (c) consisting of obligations arising
under environmental laws, (d) arising out of or in connection with any
claim by the ultimate retail purchaser of any of the Company's
products resulting from an alleged defect in the design or manufacture
of any product, or any alleged failure to warn with respect to any
product, (e) constituting Taxes, or (f) as set forth on Schedule
3.9(a).
(b) To the Knowledge of Sellers, as of the CMC Balance Sheet
Date, CMC has no material Liabilities, except for Liabilities: (a)
reflected or reserved for on the CMC Balance Sheet, (b) relating to
performance obligations under leases and contracts in accordance with
the terms and conditions thereof which are not required by GAAP to be
reflected on the CMC Balance Sheet, (c) constituting Taxes or (d) as
set forth on Schedule 3.9(b).
Section 3.10. Material Adverse Effect. To the Knowledge of
Sellers, other than changes resulting from (a) general economic
conditions, (b) conditions affecting the automotive carpet and textile
industry generally, (c) changes in any applicable law, rule,
regulation, statute or interpretation thereof or (d) as set forth on
Schedule 3.10, since the Interim Balance Sheet Date, there has not
been any Material Adverse Effect, nor have any events occurred nor do
any circumstances exist which, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. To the
Knowledge of Sellers, since the Interim Balance Sheet Date, except as
set forth on Schedule 3.10, there has not occurred any material
deterioration in the Company's relationships with its employees,
unions, suppliers or customers, and the Company has not lost or been
threatened with the loss of any model or program in each case which,
individually or in the aggregate, has had or could reasonably be
expected to have a Material Adverse Effect.
Section 3.11. Disclaimer of Additional Representations and
Warranties; Schedules. (a) Except as expressly set forth in this
Agreement, the Schedules and Exhibits hereto, and any other
certificate or instrument delivered pursuant to the terms hereof or
thereof, Sellers make no representation or warranty, including with
respect to the Company, or its operations, assets, Liabilities or
conditions, including any representation or warranty of
merchantability, suitability or fitness for a particular purpose, or
quality as to the assets of the Company, or any part thereof, or as to
the condition or workmanship thereof, or the absence of any defects
therein, whether latent or patent.
(b) Notwithstanding anything to the contrary contained in
this Agreement, any item disclosed on any one Schedule shall be deemed
to be disclosed on each Schedule, where relevant, provided that a
specific cross-reference is made in the relevant Schedule. Disclosure
of an item in any Schedule shall not be deemed to be an admission that
such item is material.
Section 3.12. Brokers. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried
on by Sellers without the intervention of any other Person acting on
their behalf in such a manner as to give rise to any valid claim by
any such
9
Person against Purchaser or its Affiliates for a finder's fee,
brokerage commission or other similar payment based on an arrangement
with Sellers.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Subject to Section 4.6, Purchaser represents and warrants to
Sellers as follows:
Section 4.1. Authority of Purchaser. Purchaser is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Purchaser has full corporate
power and authority to execute and deliver this Agreement. The
execution and delivery by Purchaser of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by all necessary corporate action on the part
of Purchaser, and this Agreement constitutes the legal, valid and
binding obligation of Purchaser enforceable against Purchaser in
accordance with its terms, except as such enforcement may be limited
by applicable bankruptcy, insolvency, moratorium or similar laws from
time to time in effect which affect creditors' rights generally and by
legal and equitable limitations on the enforceability of specific
remedies. Purchaser has the requisite corporate power and authority to
own its properties and to carry on the business presently being
conducted by it.
Section 4.2. No Conflict or Violation. Except as referenced
in Section 8.8, neither the execution and delivery of this Agreement
by Purchaser, nor the consummation of the transactions contemplated
hereby, nor the fulfillment of the terms and compliance with the
provisions hereof, will conflict with or result in a material breach
of or a material default (or in an occurrence which with the lapse of
time or action by a third party, or both, could result in a material
default) with respect to any of the terms, conditions or provisions of
any applicable order, writ or decree of any court or of any
Governmental Agency applicable to Purchaser, or of the Certificate of
Incorporation or By-Laws of Purchaser, or of any indenture, contract,
agreement, lease or other instrument to which Purchaser is a party or
subject or by which Purchaser or any of its properties or assets are
bound, or of any applicable statute, rule or regulation to which
Purchaser or its businesses is subject, except for those conflicts,
breaches, defaults or accelerations which individually or in the
aggregate could not reasonably be expected to have a material adverse
effect on Purchaser or materially impair the ability of Purchaser to
consummate the transactions contemplated by this Agreement; provided,
however, that no representation or warranty is made hereby by
Purchaser with respect to the effect of antitrust laws or regulations.
Section 4.3. Litigation. There are no actions, causes of
action, claims, suits, proceedings, orders, writs, injunctions or
decrees pending or, to the actual knowledge, after reasonable inquiry,
of the executive officers of Purchaser, threatened against Purchaser
at law, in equity, in admiralty or otherwise, or before or by any
Governmental Agency, which restrains or enjoins the consummation of
the transactions contemplated hereby.
Section 4.4. Brokers. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried
on by Purchaser without the intervention of
10
any other Person acting on its behalf in such a manner as to give rise
to any valid claim by any such Person against Sellers or their
Affiliates for a finder's fee, brokerage commission or other similar
payment based on an arrangement with Purchaser.
Section 4.5. Investment Intent; Status. The Equity will be
acquired hereunder solely for the account of Purchaser or its
designees for investment, and not with a view to the resale or
distribution thereof in violation of the Securities Act of 1933, as
amended, subject to the right of Purchaser and any such designee to
sell, assign, transfer or distribute any or all of the Equity to any
corporation which is an Affiliate of Purchaser. Purchaser is an
"accredited investor" within the mean of Rule 501 of Regulation D
promulgated under the Securities Act of 1933, as amended.
Section 4.6. Disclaimer of Additional Representations and
Warranties. Except as expressly set forth in this Agreement and the
Exhibits hereto, and any other certificates or instruments delivered
pursuant to the terms hereof or thereof, Purchaser makes no
representation or warranty.
ARTICLE V.
CERTAIN COVENANTS OF SELLERS
Each of Sellers covenants with Purchaser that from and after
the date hereof through the Closing Date:
Section 5.1. Conduct of Business. Sellers shall not take any
action to cause the Company or CMC to operate outside the ordinary
course of its business in accordance with past practices.
Section 5.2. Information and Access. Sellers shall not take
any action to cause the Company or CMC to prevent representatives of
Purchaser from having reasonable access during normal business hours,
in a manner so as not to interfere with the normal operations of the
Company and CMC, to all premises, properties, personnel, accountants,
books, records, contracts and documents of the Company and CMC.
Purchaser and each of its representatives shall treat and hold as
confidential all such information until the Closing.
ARTICLE VI.
CERTAIN COVENANTS AND AGREEMENTS
Section 6.1. Filings. As promptly as practicable, Sellers
and Purchaser shall prepare and file any other application, report or
other filing required to be submitted to any Governmental Agency in
connection with the transactions contemplated hereby.
Section 6.2. Transfer Taxes. Any sales, recording, transfer,
stamp, conveyance, value added, use or other similar Taxes, duties,
excise, governmental charges or fees imposed as
11
a result of the sale of the Equity to Purchaser pursuant to this
Agreement shall be borne by Sellers. Purchaser shall promptly remit
any refunds of such items to Sellers. Sellers and Purchaser, to the
extent required by law, shall prepare and file all Tax Returns on a
timely basis with respect to any such Taxes or fees.
Section 6.3. Certain Provisions Relating to Consents.
Sellers and Purchaser shall each use commercially reasonable efforts
prior to and after the Closing Date to obtain all consents that are
required in connection with the transactions contemplated by this
Agreement. Sellers shall not obtain any consent that will affect
Purchaser or the Company, and Purchaser shall not obtain any consent
that will affect Sellers or the Company, to any of their economic
detriment, including any modification of any contract, lease or
Permit. Purchaser and Sellers shall cooperate as reasonably necessary
or desirable to secure the third party consents, including, without
limitation, providing to such third party information, including
financial information, provided, however, that none of Purchaser,
Sellers or the Company will be required to incur any Liability or
obligation in connection therewith, other than for the underlying
matter for which such consent was obtained as in effect immediately
prior to such consent.
Section 6.4. Nondisclosure; Noncompetition. (a) From and
after the Closing Date, Sellers shall not use, divulge, furnish or
make accessible to anyone any proprietary, material nonpublic,
confidential or secret information to the extent relating to the
Company or CMC (including, without limitation, customer lists,
supplier lists and pricing and marketing arrangements with customers
or suppliers), and Sellers shall cooperate reasonably with Purchaser
in preserving such proprietary, confidential or secret aspects of the
Company or CMC.
(b) For a period of three years after the Closing Date,
Sellers will not, and will cause each of their Affiliates not to,
directly or indirectly, manufacture or sell in North America any
automotive upholstery fabrics of the general type manufactured or sold
by the Company or CMC as of the Closing, or own stock or otherwise
have an equity interest in or be affiliated with any Person or entity
engaged in such business in North America (except as a stockholder
holding less than 5% of the stock of a publicly held corporation or
less than 5% of the stock of a private company if the investment is
completely passive). None of the Sellers will, for a period of two
years from the Closing Date, solicit for hire any employees of the
Company or CMC without the prior written consent of Purchaser, except
for any such employees that are also employees of any of the Sellers
or their Affiliates on the Closing Date. Sellers agree that a
violation of this Section 6.4 will cause irreparable injury to
Purchaser, and Purchaser will be entitled, in addition to any other
rights and remedies it may have at law or in equity, to an injunction
enjoining and restraining Sellers from doing or continuing to do any
such violation and any other violations or threatened violations of
this Section 6.4.
(c) Sellers acknowledge and agree that the covenants set
forth in this Section 6.4 are reasonable and valid in scope and in all
other respects. If any of such covenants is found to be invalid or
unenforceable by a final determination of a court of competent
jurisdiction, (i) the remaining terms and provisions hereof shall be
unimpaired and (ii) the invalid or unenforceable term or provision
shall be deemed replaced by a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision. In the event that,
notwithstanding the first sentence of this Section 6.4(c), any
12
of the provisions of this Section 6.4 relating to scope of the
covenants contained therein or the nature of the business restricted
thereby shall be declared by a court of competent jurisdiction to
exceed the maximum restrictiveness such court deems enforceable, such
provision shall be deemed to be replaced herein by the maximum
restriction deemed enforceable by such court.
Section 6.5. Efforts. Upon the terms and subject to the
conditions of this Agreement, each of the parties hereto shall use
commercially reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper
or advisable consistent with applicable law to consummate and make
effective in the most expeditious manner practicable the transactions
contemplated hereby; provided, however, that nothing in this covenant
or any other provision of this Agreement will require Purchaser to
agree to any divestiture, hold-separate or other agreement or
requirement.
Section 6.6. Tax Sharing Agreements and Arrangements.
Sellers will cause any tax sharing agreement or similar arrangement
with respect to Taxes involving the Seller Entities (other than
contracts solely among such Seller Entities) to be terminated, amended
or assigned effective as of the Closing Date, to the extent that any
such agreement or arrangement relates to any Seller Entity, on the one
hand, and any Parent Entity, on the other hand, and after the Closing
Date none of the parties shall have any obligation to a Parent Entity
under any such agreement or arrangement for any past, present or
future period. Notwithstanding the foregoing, the existing tax sharing
arrangement between Seiren Affiliate 1, Seiren Shareholder and the
Company with respect to the tax equalization of compensation paid to
Japanese secondees from Seiren Affiliate 1 and/or Seiren Shareholder
to the Company shall continue between Seiren Affiliate 1, Seiren
Shareholder and the Company after the Closing Date for so long as any
Seller provides the Company with Japanese secondees.
Section 6.7. Tax Returns. The parties acknowledge that the
taxable year of the Company will close as to all its partners as a
result of the closing of the acquisition of JPS Automotive by
Purchaser pursuant to the JPS Automotive Agreement (the "JPS
Automotive Closing") but will not close as to all its partners as a
result of the Closing under this Agreement (if such Closing occurs on
a day after the JPS Automotive Closing), so that Seiren Affiliate 1
and Seiren Affiliate 2 may be partners of the Company for all of the
taxable year closing with the JPS Automotive Closing and for part of
the next taxable year (the "Second Short Tax Year"). The parties agree
that the federal income tax return of the Company with respect to the
Second Short Tax Year (if any) shall be prepared by or at the
direction of Purchaser and its Affiliates, and that the allocation of
income for such taxable year between Seiren Affiliate 1 and Seiren
Affiliate 2 and the purchaser(s) of their interests shall be based on
a daily proration of all items for such taxable year; provided,
however, that in the event there is any material item of non-recurring
income, expense or deduction for such taxable year, prior to filing
the Company tax return for such year, Purchaser and its Affiliates
will consult in good faith with Sellers concerning the proper
treatment of such item in the proration of income.
13
ARTICLE VII.
CONDITIONS TO SELLERS' OBLIGATIONS
The obligation of Sellers to consummate the transactions
contemplated by this Agreement is subject to the satisfaction (unless
waived in writing by Sellers) of each of the following conditions on
or prior to the Closing Date:
Section 7.1. Representations and Warranties. The
representations and warranties of Purchaser contained in this
Agreement shall be true and correct in all material respects on and as
of the Closing Date, as though such representations and warranties
were made anew on and as of the Closing Date. Purchaser shall have
delivered to Sellers a certificate of its President or a Vice
President, dated the Closing Date, to the foregoing effect.
Section 7.2. Compliance with Agreement. Purchaser shall have
performed and complied in all material respects with the covenants set
forth in Sections 6.1, 6.3 and 6.5, and in all respects with all other
covenants to be performed or complied with by it on or prior to the
Closing Date. Purchaser shall have delivered to Sellers a certificate
of its President or a Vice President, dated the Closing Date, to the
foregoing effect.
Section 7.3. No Adverse Proceeding. As of the Closing Date,
there shall not have been instituted or be pending any suit, action or
other proceeding by any Governmental Agency or other Person in which
it is sought to restrain or prohibit or question the validity or
legality of the transactions contemplated by this Agreement, nor shall
any such suit, action or proceeding under any applicable antitrust
law, rule or regulation be threatened by any Governmental Agency.
Section 7.4. Consents. All consents, Permits,
authorizations, approvals, waivers and amendments which are listed on
Schedule 8.4 hereto shall have been obtained.
Section 7.5. Corporate Documents. Sellers shall have
received from Purchaser certified copies of the resolutions duly
adopted by the board of directors of Purchaser approving the execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby, and such resolutions shall be in
full force and effect as of the Closing Date.
Section 7.6. New Marketing Agreement. The Company and Seiren
Shareholder shall have entered into a new marketing agreement as of
the Closing Date covering North American bodycloth sales, in the form
of Exhibit A hereto (the "New Marketing Agreement").
Section 7.7. Termination of Agreements. (a) The Partner
Interest Purchase Agreement, the CMC Shareholders' Agreement and the
Amended and Restated Agreement of Limited Partnership of the Company
(including the license of the Seiren Technology (as defined in the
Amended and Restated Agreement of Limited Partnership of the Company)
provided for therein) shall have been terminated as of the Closing
Date on terms and conditions satisfactory to each Seller in its sole
discretion or amended to remove any Seller as a party thereto.
14
(b) The JPS Automotive Marketing Agreement (except as
provided in the New Marketing Agreement) and the Former Marketing
Agreement shall have been terminated as of the Closing Date on terms
and conditions satisfactory to Sellers in their sole discretion.
(c) The Cramerton Consulting Agreement and any other
agreement relating to the Company or CMC to which any of the Sellers
or their Affiliates is a party (other than (i) the New Marketing
Agreement and the agreements referred to in Section 7.7(a) hereof,
(ii) to the extent set forth in the New Marketing Agreement, the
Consulting Agreement and (iii) the tax arrangements set forth in
Section 6.6 hereof) are hereby terminated effective as of the Closing
Date.
Section 7.8. FIRPTA. Sellers shall have received
certificates from the Company and CMC, respectively, dated the Closing
Date, pursuant to Section 1445 of the Code (Foreign Investment in Real
Property Tax Act of 1980 Affidavit) in substantially the forms
attached hereto as Exhibit B.
Section 7.9. JPS Automotive Agreement Closing. The closing
contemplated by the JPS Automotive Agreement shall have occurred prior
to, or shall occur simultaneously with, the Closing.
Section 7.10. Opinion of Counsel. Sellers shall have
received an opinion of Xxxxx, Day, Xxxxxx & Xxxxx, counsel to
Purchaser, in the form of Exhibit C hereto ("Purchaser's Opinion of
Counsel").
Section 7.11. Company Tax Distribution. Prior to the
Closing, the Company shall have distributed to each of its partners
(including Seiren Affiliate 1 and Seiren Affiliate 2) an amount equal
to (a) all distributions declared but not paid to the date hereof, (b)
all distributions declared from the date hereof to the Closing Date,
and (c) to the extent not reflected in (a) or (b), the Company's
reasonable good faith estimate of the amount of taxes paid or to be
paid by such partner on account of the income of the Company through
the Closing Date, net of any prior overpayment of such amounts.
ARTICLE VIII.
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligation of Purchaser to consummate the transactions
contemplated by this Agreement is subject to the satisfaction (unless
waived in writing by Purchaser) of each of the following conditions on
or prior to the Closing Date:
Section 8.1. Representations and Warranties. The
representations and warranties of Sellers contained in this Agreement
shall be true and correct in all material respects on and as of the
Closing Date, as though such representations and warranties were made
anew on and as of the Closing Date. Sellers shall have delivered to
Purchaser certificates of the President
15
or a Vice President of Seiren Affiliate 1, Seiren Affiliate 2 and
Seiren Shareholder, dated the Closing Date, to the foregoing effect.
Section 8.2. Compliance with Agreement. Sellers shall have
performed and complied in all material respects with the covenants set
forth in Sections 5.1, 5.2, 6.1, 6.3 and 6.5, and in all respects with
all other covenants to be performed or complied with by them on or
prior to the Closing Date. Sellers shall have delivered to Purchaser
certificates of the President or a Vice President of Seiren Affiliate
1, Seiren Affiliate 2 and Seiren Shareholder, dated the Closing Date,
to the foregoing effect.
Section 8.3. No Adverse Proceeding. As of the Closing Date,
there shall not have been instituted or be pending any suit, action or
other proceeding by any Governmental Agency or other Person in which
it is sought to restrain, prohibit or question the validity or
legality of the transactions contemplated by this Agreement, nor shall
any such suit, action or proceeding under any applicable antitrust
law, rule or regulation be threatened by any Governmental Agency.
Section 8.4. Consents. All consents, Permits,
authorizations, approvals, waivers and amendments which are listed on
Schedule 8.4 hereto shall have been obtained.
Section 8.5. Corporate Documents. Purchaser shall have
received from Sellers certified copies of the resolutions duly adopted
by the board of directors of Seiren Affiliate 1, Seiren Affiliate 2
and Seiren Shareholder, approving the execution and delivery of this
Agreement by Seiren Affiliate 1, Seiren Affiliate 2 and Seiren
Shareholder, respectively, and the consummation of the transactions
contemplated hereby, and such resolutions shall be in full force and
effect as of the Closing Date.
Section 8.6. FIRPTA. Purchasers shall have received
certificates from the Company and CMC, respectively, dated the Closing
Date, pursuant to Section 1445 of the Code (Foreign Investment in Real
Property Tax Act of 1980 affidavit) in substantially the forms
attached hereto as Exhibit B.
Section 8.7. JPS Automotive Agreement. All of the conditions
to Purchaser's obligations under Article VIII of the JPS Automotive
Agreement (other than Section 8.8 thereof) shall have been satisfied
or waived by Purchaser in its sole discretion, and the closing
contemplated by the JPS Automotive Agreement shall have occurred prior
to, or shall occur simultaneously with, the Closing.
Section 8.8. Purchaser Bank Consent. Purchaser shall have
obtained, on terms and conditions satisfactory to Purchaser in its
sole discretion, the consent of the requisite lenders under its
existing bank credit facility to the extent necessary to consummate
the transactions contemplated by this Agreement.
Section 8.9. Material Adverse Effect. Since the date hereof,
there shall not have occurred (i) a Material Adverse Effect or (ii)
any event which could reasonably be expected to have a Material
Adverse Effect.
16
Section 8.10. Clearance Certificates. Sellers shall have
delivered any clearance certificates or similar documents that may be
required by any state Tax authority in order to relieve Purchaser of
any obligation to withhold any portion of the Purchase Price.
Section 8.11. Marketing and Consulting Agreements. (a) The
Company and Seiren Shareholder shall have entered into the New
Marketing Agreement as of the Closing Date.
(b) The Partner Interest Purchase Agreement, the CMC
Shareholders' Agreement and the Amended and Restated Agreement of
Limited Partnership of the Company (including the license of the
Seiren Technology (as defined in the Amended and Restated Agreement of
Limited Partnership of the Company) provided for therein) shall have
been terminated as of the Closing Date on terms and conditions
satisfactory to Purchaser in its sole discretion or amended to remove
any Seller as a party thereto.
(c) The JPS Automotive Marketing Agreement (except as
provided in the New Marketing Agreement) and the Former Marketing
Agreement shall have been terminated as of the Closing Date on terms
and conditions satisfactory to Purchaser in its sole discretion.
(d) The Cramerton Consulting Agreement and any other
agreement relating to the Company or CMC to which any of the Sellers
or their Affiliates is a party (other than (i) the New Marketing
Agreement and the agreements referred to in Section 8.11(b) hereof,
(ii) to the extent set forth in the New Marketing Agreement, the
Consulting Agreement, and (iii) the tax arrangements set forth in
Section 6.6 hereof) are hereby terminated effective as of the Closing
Date.
Section 8.12. Waiver of Any Seiren Right of First Refusal.
In connection with the consummation of the purchase and sale
contemplated by the JPS Automotive Agreement:
(a) Seiren Affiliate 1 hereby validly waives, conditioned on
the consummation of the closing of the transactions contemplated
by this Agreement and effective as of the date of the Closing,
any right of first refusal pursuant to Section 3.2 of the Partner
Interest Purchase Agreement; and
(b) Seiren Shareholder hereby validly waives, conditioned on
the consummation of the closing of the transactions contemplated
by this Agreement and effective as of the date of the Closing,
any right of first refusal pursuant to the CMC Stockholders'
Agreement.
Section 8.13. Release of Claims Against the Company and CMC.
Each of Sellers and their Affiliates hereby releases and discharges,
as of the date of Closing, the Company and CMC and their respective
Affiliates, successors and assigns and the directors, officers,
employees, stockholders, general partners and limited partners of each
of them (other than JPSGP Inc., Foamex-JPS Automotive L.P., Foamex
International Inc. and their respective Affiliates (excluding JPS
Automotive, the Company and CMC), successors and assigns, directors,
officers, employees, stockholders, general partners and limited
partners) (the "Released Persons") from any and all liabilities,
actions, causes of actions, suits, claims, obligations and demands, of
any
17
nature, that any of the Sellers or their Affiliates or their
respective successors or assigns ever had, now have or may hereafter
have, against any of the Released Persons for, upon or by reason of
any matter, cause or thing whatsoever from the beginning of the world
to the date of the Closing. Without limiting the generality of the
foregoing, such release hereby provides, effective as of the date of
the Closing, that each of Sellers and its Affiliates specifically
releases and discharges the Released Persons from any obligation under
the Partnership Agreement or otherwise to make, and hereby waives,
effective as of the date of the Closing, any right under the
Partnership Agreement or otherwise to receive, any distribution for
the payment of Taxes or other payments related to Taxes relating to
the Company or their interests therein.
Section 8.14. Opinions of Counsel. Purchaser shall have
received an opinion of O'Melveny & Xxxxx LLP, counsel to Seiren
Affiliate 1 and Seiren Affiliate 2, and Showa Law Office, counsel to
Seiren Shareholder, in the form of Exhibit D hereto ("Sellers' Opinion
of Counsel").
ARTICLE IX.
THE CLOSING; TERMINATION
Section 9.1. The Closing. The Closing of the transactions
contemplated hereby (the "Closing") shall be held two Business Days
after each of the conditions precedent set forth in Articles VII and
VIII have been satisfied or waived by the party entitled to the
benefit thereof, simultaneously with the closing under the JPS
Automotive Agreement (the "Closing Date"). The Closing shall be held
at the offices of Xxxxx, Day, Xxxxxx & Xxxxx at 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 or at such other place as the parties may
mutually agree. At the Closing, all of the transactions provided for
in Article II hereof shall be consummated on a substantially
concurrent basis.
Section 9.2. Deliveries by Sellers at the Closing. At the
Closing, Sellers shall deliver, or cause to be delivered, to
Purchaser, the following items:
(a) The duly executed officer's certificates and
certified resolutions referred to in Sections 8.1, 8.2 and
8.5;
(b) The consents required to be obtained by Sellers
listed on Schedule 8.4;
(c) Documents terminating the agreements listed in
Section 8.11(b), (c) and (d);
(d) New Marketing Agreement;
(e) Sellers' Opinion of Counsel; and
(f) All other previously undelivered documents that Sellers
are required to deliver to Purchaser pursuant to this Agreement.
18
Section 9.3. Deliveries by Purchaser at the Closing. At the
Closing, Purchaser shall deliver, or cause to be delivered, to
Sellers, the following items:
(a) The duly executed officer's certificates and
certified resolutions referred to in Sections 7.1, 7.2 and
7.5;
(b) Duly executed and acknowledged transfer tax and other
required Tax forms reasonably required by Sellers to consummate
the transactions contemplated hereby, all in the form required by
applicable law;
(c) The consents required to be obtained by Purchaser
listed on Schedule 8.4;
(d) New Marketing Agreement;
(e) Purchaser's Opinion of Counsel;
(f) All other previously undelivered documents that
Purchaser is required to deliver to Sellers pursuant to this
Agreement; and
(g) The Purchase Price.
Section 9.4. Termination. Anything in this Agreement to the
contrary notwithstanding, this Agreement and the transactions
contemplated hereby may be terminated in any of the following ways at
any time before the Closing and in no other manner:
(a) By mutual written consent of Purchaser and Sellers; or
(b) After December 19, 1996 by Purchaser or Sellers (if such
terminating party is not then in material default of any
obligation hereunder), if the Closing has not occurred on or
before such date, provided, however, that upon consultation
between Purchaser and Sellers, such date may, with the consent of
Sellers, such consent not to be unreasonably withheld, be
extended to any date on or prior to December 31, 1996.
In the event this Agreement is terminated pursuant to this Section
9.4, all further obligations of the parties hereunder shall terminate,
except for the obligations set forth in the last sentence of Section
5.2 and Sections 11.4, 11.5 and 11.9, and except that nothing in this
Section 9.4 shall relieve any party hereto of any liability for breach
of any of the covenants or willful or intentional breach of any of the
representations or warranties contained in this Agreement.
ARTICLE X.
INDEMNIFICATION
Section 10.1. Survival. All of the representations and
warranties of Sellers contained in Article III of this Agreement
(other than the representations and warranties of Sellers
19
contained in Sections 3.1, 3.2 and 3.3 (collectively, the "Perpetual
Representations")) or any certificate delivered by Sellers shall
survive the Closing and continue in fully force and effect until April
30, 1998. Notwithstanding the foregoing, any notice given in
accordance with Section 11.1 of this Agreement claiming an alleged
breach of any representation or warranty hereunder will without
further action extend the survival period for the representation or
warranty alleged to have been breached as applied to the circumstances
set forth in such notice until immediately after the final resolution
of the matter. The Perpetual Representations, all of the
representations and warranties of Purchaser, and all of the covenants
of Sellers and Purchaser contained in this Agreement shall survive the
Closing and continue in full force and effect forever thereafter.
Section 10.2. Indemnification Provisions for Benefit of
Purchaser. (a) In the event Sellers breach any of their
representations, warranties or covenants contained in this Agreement
or in any certificate delivered by Sellers pursuant to this Agreement
and provided that, as to any claim for breach of representations or
warranties, Purchaser makes a written claim for indemnification
against Sellers within the applicable survival period, if applicable,
then Sellers agree jointly and severally to indemnify Purchaser and
its Affiliates from and against all Damages Purchaser suffers
resulting from or arising out of such event; provided, however,
Sellers shall not have any obligation to indemnify Purchaser from and
against any Damages resulting from the breach of any representation or
warranty of Sellers (as opposed to any covenant of Sellers) contained
in Article III of this Agreement: (i) (other than Perpetual
Representations) until Purchaser has suffered aggregate Damages, by
reason of all such breaches (excluding breaches or series of related
breaches resulting in Damages of less than $5,000) in excess of
$45,454.50 (the "Deductible") (after which point Sellers will be
obligated only to indemnify the Purchaser from and against further
Damages in excess of the Deductible), or (ii) notwithstanding anything
to the contrary contained in this Agreement, to the extent the
aggregate amount that Sellers have actually indemnified Purchaser for
prior breaches of representations and warranties of Sellers contained
in Article III of this Agreement exceeds $10 million (the "Cap").
Notwithstanding anything to the contrary contained in this Agreement,
to the extent any Damages for which Purchaser may claim indemnity (or
satisfaction of the Deductible) pursuant to this Section 10.2 relate
to a breach of any of the representations or warranties contained in
Article III and are due to Damages suffered by the Company (which are
not directly suffered by Purchaser), Sellers shall only be obligated
to indemnify Purchaser and its Affiliates for (or reduce the remaining
portion of the Deductible by) 20% of the total Damages suffered by the
Company, which 20% shall be subject to the Cap. Notwithstanding
anything to the contrary contained in this Agreement, to the extent
any Damages for which Purchaser may claim indemnity (or satisfaction
of the Deductible) pursuant to this Section 10.2 relate to a breach of
any of the representations or warranties contained in Article III and
are due to Damages suffered by CMC (which are not directly suffered by
Purchaser), Sellers shall only be obligated to indemnify Purchaser and
its Affiliates for (or reduce the remaining portion of the Deductible
by) 50% of the total Damages suffered by CMC, which 50% shall be
subject to the Cap.
(b) The indemnification provided for in Section 10.2(a)
shall survive any investigation at any time made by or on behalf of
Purchaser or any knowledge or information that Purchaser may have.
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Section 10.3. Indemnification Provisions for Benefit of
Sellers. In the event Purchaser breaches any of its representations,
warranties or covenants contained in this Agreement or in any
certificate delivered by Purchaser pursuant to this Agreement and
provided that Sellers make a written claim for indemnification against
Purchaser, then Purchaser agrees to indemnify Sellers from and against
all Damages Sellers suffer resulting from or arising out of such
event.
Section 10.4. Matters Involving Third Parties. (a) If any
third party notifies any party hereto (the "Indemnified Party") with
respect to any matter which may give rise to a claim for
indemnification against the other party hereto (the "Indemnifying
Party") under this Article X, then the Indemnified Party shall use
reasonable efforts to notify the Indemnifying Party thereof promptly
and in any event within 10 calendar days after receiving any written
notice from a third party; provided, however, that no delay on the
part of the Indemnified Party in notifying the Indemnifying Party
after such 10-day period shall relieve the Indemnifying Party from any
obligation hereunder unless, and then solely to the extent that, the
Indemnifying Party is actually prejudiced thereby.
(b) Once the Indemnified Party has given notice of the
matter to the Indemnifying Party, the Indemnified Party may, subject
to the Indemnifying Party's rights to assume the defense of such
matter pursuant to paragraph (c) below, defend against the matter in
any manner it deems appropriate.
(c) The Indemnifying Party may at any point in time choose
to assume the defense of such matter, in which event:
(i) the Indemnifying Party shall defend the Indemnified
Party against the matter with counsel of its choice
reasonably satisfactory to the Indemnified Party,
(ii) the Indemnified Party may retain separate counsel
at its sole cost and expense (except that the Indemnifying
Party shall be responsible for the fees and expenses of one
separate co-counsel to the extent the Indemnified Party is
advised, in writing by its counsel, that either (x) the
counsel the Indemnifying Party has selected has a conflict
of interest or (y) there are legal defenses available to the
Indemnified Party that are different from or additional to
those available to the Indemnifying Party (but only to the
extent of such different or additional defenses)), and
(iii) the Indemnifying Party shall reimburse the
Indemnified Party for the reasonable costs of defense or
investigation for the period prior to the assumption of the
defense.
(d) Assumption of the defense of any matter by the
Indemnifying Party shall without further action constitute an
irrevocable waiver by the Indemnifying Party of its right to claim at
a later date that the portion of such third party action for which the
defense was assumed is not a proper matter for indemnification
pursuant to this Article X.
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(e) The Indemnified Party shall not consent to the entry of
a judgment or enter into any settlement with respect to any matter
which may give rise to a claim for indemnification without the written
consent of the Indemnifying Party, which consent shall not be
unreasonably withheld or delayed. The Indemnifying Party shall not
consent to the entry of a judgment with respect to any matter which
may give rise to a claim for indemnification, or enter into any
settlement which does not include a provision whereby the plaintiff or
claimant in the matter releases the Indemnified Party from all
liability with respect thereto, without the written consent of the
Indemnified Party (not to be unreasonably withheld or delayed).
Section 10.5. Certain Additional Provisions Relating to
Indemnification.
(a) Notwithstanding Section 11.12, after the Closing Date,
the indemnification provisions set forth in this Article X shall
constitute the sole and exclusive recourse and remedy available to the
parties hereto with respect to the breach of any representation or
warranty contained in this Agreement or in any certificate delivered
pursuant to this Agreement except for actual fraud.
(b) The Indemnifying Party shall have no obligation to
indemnify or hold harmless the Indemnified Party pursuant to this
Article X for any Damages to the extent that the Indemnified Party has
actually recovered such Damages (net of expenses or other costs
(including, without limitation, attorneys fees and expenses) of
recovery and any retroactive or retrospective premium increases
resulting from such recovery) from any Person other than the
Indemnifying Party or any Affiliate thereof.
(c) The Indemnified Party hereby assigns to the Indemnifying
Party any right the Indemnified Party may have against any Person
(other than the Indemnifying Party, the Indemnified Party or any
Affiliate of any of the foregoing), including, without limitation, any
insurance company, to recover any Damages or other amounts that the
Indemnifying Party has paid to the Indemnified Party pursuant to this
Article X. The Indemnified Party agrees to cooperate reasonably with
the Indemnifying Party, at the Indemnifying Party's sole cost and
expense, in connection with the Indemnifying Party's efforts to pursue
such rights, including, without limitation, providing reasonable
access to the Indemnified Party's personnel, books and records, making
its personnel and those of its Affiliates reasonably available for
deposition and testimony and executing such additional instruments of
assignment to evidence the assignment of such rights. In the event
such rights by their terms may not be assigned, the Indemnified Party
agrees to pursue its rights against such other Person, at the sole
cost and expense and direction of the Indemnifying Party, and to remit
to the Indemnifying Party any recovery.
(d) To the extent permitted by applicable law, any payments
by an Indemnifying Party under this Article X shall be treated as an
adjustment to the Purchase Price for all foreign, federal, state and
local income tax purposes.
22
ARTICLE XI.
MISCELLANEOUS PROVISIONS
Section 11.1. Notices. All notices, demands or other
communications to be given or delivered under or by reason of the
provisions of this Agreement shall be in writing and shall be deemed
to have been given (a) when delivered personally to the recipient, (b)
when sent to the recipient by telecopy (receipt electronically
confirmed by sender's telecopy machine) if during normal business
hours of the recipient, otherwise on the next Business Day, (c) three
Business Days after the date when sent to the recipient by reputable
express courier service (charges prepaid) or (d) seven Business Days
after the date when mailed to the recipient by certified or registered
mail, return receipt requested and postage prepaid. Such notices,
demands and other communications will be sent to Sellers and to
Purchaser at the addresses indicated below:
If to Purchaser: Xxxxxxx & Xxxxxx Products Co.
000 XxXxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Chief Financial Officer
Fax: (000) 000-0000
If to Sellers: Seiren Co., Ltd.
00-0, Xxxx 0-Xxxxx
Xxxxx, Xxxxx 910
Attention: Xx. Xxxxxx Xxxxxx, President
Fax: 000-00-000-00-0000
or to such other address as either party hereto may, from time to
time, designate in writing delivered pursuant to the terms of this
Section 11.1.
Section 11.2. Amendments. The terms, provisions and
conditions of this Agreement may not be changed, modified or amended
in any manner except by an instrument in writing duly executed by all
of the parties hereto.
Section 11.3. Assignment and Parties in Interest. (a)
Neither this Agreement nor any of the rights, duties or obligations of
any party hereunder may be assigned or delegated (by operation of law
or otherwise) by either party hereto except with the prior written
consent of the other party hereto, provided, however, that (i) prior
to or after the Closing, Purchaser may assign all of its rights
hereunder to any Affiliate of Purchaser, provided that no such
assignment will relieve Purchaser of its obligations hereunder unless
such assignment is made at Closing to Xxxxxxx & Xxxxxx Corporation,
and provided further that such assignment shall not hinder, delay or
prevent the Closing, and (ii) Purchaser has a one-time right to assign
all of its rights hereunder to any other Person which acquires all or
substantially all of the assets of, or equity interest in, the Company
and CMC.
23
(b) Except as provided in Article X, this Agreement shall
not confer any rights or remedies upon any person or entity other than
the parties hereto and their respective permitted successors and
assigns.
Section 11.4. Announcements. All press releases, notices to
customers and suppliers and similar public announcements prior to or
within five days after the Closing Date with respect to this Agreement
and the transactions contemplated by this Agreement shall be approved
by both Purchaser and Sellers prior to the issuance thereof; provided
that either party may make any public disclosure it believes in good
faith is required by law, regulation or rule of any stock exchange on
which its securities are traded (in which case the disclosing party
shall use reasonable efforts to advise the other party prior to making
such disclosure and to provide the other party a reasonable
opportunity to review the proposed disclosure).
Section 11.5. Expenses. Except as expressly set forth in
this Agreement, each party to this Agreement shall bear all of its
legal, accounting, investment banking and other expenses incurred by
it or on its behalf in connection with the transactions contemplated
by this Agreement, whether or not such transactions are consummated.
Section 11.6. Entire Agreement. This Agreement constitutes
the entire agreement among the parties hereto with respect to the
subject matter hereof, supersedes and is in full substitution for any
and all prior agreements and understandings among them relating to
such subject matter, and no party shall be liable or bound to the
other party hereto in any manner with respect to such subject matter
by any warranties, representations, indemnities, covenants or
agreements except as specifically set forth herein. The Exhibits and
Schedules to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
Section 11.7. Descriptive Headings. The descriptive headings
of the several sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of
any of the provisions hereof.
Section 11.8. Counterparts. For the convenience of the
parties, any number of counterparts of this Agreement may be executed
by any one or more parties hereto, and each such executed counterpart
shall be, and shall be deemed to be, an original, but all of which
shall constitute, and shall be deemed to constitute, in the aggregate
but one and the same instrument.
Section 11.9. Governing Law; Jurisdiction; Waiver of Jury
Trial. (a) This Agreement and the legal relations between the parties
hereto shall be governed by and construed in accordance with the laws
of the State of New York applicable to contracts made and performed
therein.
(b) The parties hereto irrevocably submit to the exclusive
in personam jurisdiction of any New York State or Federal court
sitting in the City of New York over any suit, action or proceeding
arising out of or relating to this Agreement. To the fullest extent it
may effectively do so under applicable law, each of the parties hereto
irrevocably waives and agrees not to assert, by way of motion, as a
defense or otherwise, (i) any claim that (A) any proceeding arising
out of or relating to this Agreement may be brought in another
24
jurisdiction (except a proceeding brought by a third party) or (B)
that it is not subject to the in personam jurisdiction of any court
referenced in the first sentence of this clause (b), (ii) any
objection that it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding brought in any such court and
(iii) any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum.
(c) Purchaser and Sellers each waive all rights to a trial
by jury in any action or proceeding relating to transactions arising
out of or relating to this Agreement.
Section 11.10. Construction. The language used in this
Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and no rule of strict construction will
be applied against any party. Any references to any federal, state,
local or foreign statute or law will also refer to all rules and
regulations promulgated thereunder, unless the context requires
otherwise. Unless the context otherwise requires: (a) a term has the
meaning assigned to it by this Agreement; (b) an accounting term not
otherwise defined has the meaning assigned to it by GAAP; (c) "or" is
disjunctive but not exclusive; (d) words in the singular include the
plural, and in the plural include the singular; (e) provisions apply
to successive events and transactions, and (f) "$" means the currency
of the United States of America.
Section 11.11. Severability. In the event that any one or
more of the provisions contained in this Agreement or in any other
instrument referred to herein shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, then to the maximum
extent permitted by law, such invalidity, illegality or
unenforceability shall not affect any other provision of this
Agreement or any other such instrument. Furthermore, in lieu of any
such invalid or unenforceable term or provision, the parties hereto
intend that there shall be added as a part of this Agreement a
provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.
Section 11.12. Specific Performance. Without limiting or
waiving in any respect any rights or remedies of Purchaser under this
Agreement now or hereinafter existing at law or in equity or by
statute, each of the parties hereto shall be entitled to seek
performance of the obligations to be performed by the other in
accordance with the provisions of this Agreement.
[The remainder of this page has been intentionally left blank.]
25
IN WITNESS WHEREOF, Sellers and Purchaser have executed and
delivered this Agreement as of the day and year first written above.
SELLERS: SEIREN U.S.A. CORPORATION
By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: President
SEIREN AUTOMOTIVE TEXTILE
CORPORATION
By: Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Chairman
SEIREN CO., LTD.
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: President
PURCHASER: XXXXXXX & XXXXXX PRODUCTS CO.
By: /s/ J. Xxxxxxx Xxxxx
Name: J. Xxxxxxx Xxxxx
Title: Executive Vice President & Chief
Financial Officer
26
