1
EXHIBIT 2.6
STOCK PURCHASE AGREEMENT
by and among
INTERNATIONAL WIRE GROUP, INC.
CAMDEN WIRE CO., INC.
and
ONEIDA LTD.
January 2, 1997
2
TABLE OF CONTENTS
Page
ARTICLE I
PURCHASE AND SALE OF SHARES; PAYMENT OF COMPANY OBLIGATIONS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Purchase and Sale of the Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Determination and Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Payment of Inter-Company Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II
THE CLOSING
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1 The Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Deliveries at the Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND SELLER
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Corporate Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Corporate Authority; Absence of Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Outstanding Capital Stock; Title to Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.4 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.5 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6 Absence of Material Adverse Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.7 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.8 Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.9 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.10 Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.11 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.12 Backlog . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.13 Computer Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.14 Material and Affiliated Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.15 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(i)
3
3.16 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.17 Ability to Conduct the Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.18 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.19 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.20 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.21 Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.22 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.23 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.24 Minute Books; Stock Record Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.25 Brokers' or Finders' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.26 Material Customers and Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.27 Bank Accounts; Powers of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.28 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.29 Sales Representatives and Other Sales Agents/Sales Offices. . . . . . . . . . . . . . . . . . . 28
3.30 Transaction Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.31 Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.32 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.1 Organization and Corporate Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.2 Corporate Authority; Absence of Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.3 No Investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.4 Securities Act of 1933 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.5 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.6 Brokers' or Finders' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.7 Financing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE V
AGREEMENTS OF THE PARTIES RELATED TO TRANSACTIONS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.1 Full Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.2 Preservation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.3 Negative Covenants of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.4 Third Party Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.5 Schedules Update . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.6 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(ii)
4
5.7 Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.8 Best Efforts and Certain Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.9 Industrial Revenue Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.10 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.11 Workers' Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.12 Use of Seller's Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.13 Third-Party Offers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.14 Xxxxxxx Letter Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.1 Representations and Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.2 Closing Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.3 Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.4 Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.5 Lender's Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.6 HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.7 Company IRBs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.1 Representations and Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.2 Closing Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.3 Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.4 Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.5 Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.6 Directors Resignations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.7 FIRPTA Affidavit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.8 Bank Accounts/Powers of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.9 HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.10 Selected Material Contracts and Permits, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.11 Seller Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.1 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(iii)
5
8.2 Seller's Agreement to Indemnify . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.3 Buyer's Agreement to Indemnify . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.4 Notification of Claims and Definitive Resolutions . . . . . . . . . . . . . . . . . . . . . . . 41
8.5 Special Indemnification for Tax Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.6 Limitations on Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.7 Exclusive Remedy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE IX
CERTAIN COVENANTS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
9.1 Access by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
9.2 Maintenance of Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE X
MISCELLANEOUS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
10.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
10.2 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
10.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
10.4 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
10.5 Entire Agreement and Modification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
10.6 Section and Other Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
10.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
10.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
10.9 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
10.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
10.11 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
10.12 No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
10.13 Termination by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
10.14 Termination by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
(iv)
6
SCHEDULES
Schedule Description Ref. Page #
-------- ----------- -----------
3.1(a) Jurisdictions in which the Company is 6
Qualified to Transact Business as a
Foreign Corporation and is in Good
Standing
3.4 Financial Statements 8
3.5 Undisclosed Liabilities 9
3.6 Material Adverse Changes 9
3.7(a),(b),(d),(f) Real Property 11-12
3.8(a),(b) Tangible Personal Property Subject to Encumbrances 12-13
3.11 Inventory 14
3.14(a),(b),(c) Material and Affiliated Contracts 14-16
3.16 Litigation 16
3.18(b),(c),(e) Labor Matters 18-19
3.19(b),(c),(d),(e) Employee Benefit Plans 20-21
3.20,(g),(k) Environmental Matters 22-23
3.21 Products Liability Claims 24
3.22(b),(d),(f) Tax Matters 25-26
3.23 Insurance 26
3.26(a),(b) Material Customers and Suppliers 27
3.27 Bank Accounts; Powers of Attorney 28, 32
3.28 Books and Records 28
3.29 Sales Representatives 28
(v)
7
EXHIBITS
A Opinion of Weil, Gotshal & Xxxxxx LLP, Counsel to Buyer
B Opinion of Xxxxxxxxx X. Xxxxxxxxx, General Counsel to the Company
and Seller
C FIRPTA Affidavit
D Resolution Memorandum
E Xxxxxxx Letter Agreement
(vi)
8
LOCATION OF DEFINED TERMS
Defined Term Section Page
Affiliate 8.5(b) 42
Agreement Preamble 1
Bank Accounts 3.27 28
Benefit Plan 3.19(a) 19
Buyer Preamble 1
Buyer's Accountants 1.2(c) 3
Buyer Indemnity Claim 8.2 40
CAC 1.1 2
CAC Stock Purchase Agreement 1.1 2
Closing 2.1 5
Closing Balance Sheet 1.2(b) 3
Closing Date 2.1 5
Closing Date Payment 1.2(a) 2
Code 3.22(h) 26
Common Control Entity 3.19(d) 20
Company Preamble 1
Company IRBs 5.9 35
Competitive Proposal 5.13 36
Costs 8.5(d) 43
Definitively Resolved 8.4(c) 41
Dispute Notice 1.2(c)(i) 3
Employee 3.18(a) 17
Encumbrance 3.7(b) 11
Environmental Law 3.20(l) 23
ERISA 3.19(a) 19
Final Resolution 8.5(f) 44
Former Employee 3.18(a) 17
Hazardous Substance 3.20(l) 24
HSR Act 3.2(b) 7
INA 3.18(e) 19
Instrument 3.2(b) 7
Latest Balance Sheet 3.4(b) 8
Latest Financial Statements 3.4(b) 8
Leased Real Property 3.7(a) 11
(vii)
9
Material Adverse Effect 3.5 9
Material Contracts 3.14(b) 16
Material Customer 3.26(a) 27
Material Disputed Items 1.2(c)(i) 3
Material Permits 7.10 39
Material Supplier 3.26(b) 27
near relatives 3.27 16
Neutral Accountants 1.2(c)(ii) 4
Other Real Property Interests 3.7(a) 11
Owned Real Property 3.7(a) 11
Parties' Accountants 1.2(c)(ii) 4
PBGC 3.19(d) 20
Permitted Liens 3.6(d) 11
Person 3.1(b) 6
Purchase Price 1.1 1
Purchase Price Cap 1.1 2
Purchase Price Floor 1.1 2
Purchase Price Collar 1.1 2
RCRA 3.20(l) 24
Real Property 3.7(a) 11
Related Party 3.14(b) 16
Resolution Memorandum 8.4(b) 41
Selected Material Contracts 7.10 39
Seller Preamble 1
Seller's Accountants 1.2(b) 3
Seller Indemnity Claim 8.3 40
Shares Preamble 1
Tax 3.22(a) 24
Tax Claim Termination Date 8.1(a) 39
Tax/ERISA Claim 8.1(a) 39
Tax Liability 8.5(c) 43
Tax Recoupment 8.5(i) 45
Third-Party Claim 8.4(d) 42
Total Stockholders' Equity 1.1 2
1996 Balance Sheets 3.4(a) 8
1996 Financial Statements 3.4(a) 8
(viii)
10
STOCK PURCHASE AGREEMENT
THIS AGREEMENT (the "Agreement"), dated as of the 2nd day of January,
1997, by and among International Wire Group, Inc., a Delaware corporation
("Buyer"), Camden Wire Co., Inc., a New York corporation (the "Company"), and
Oneida Ltd., a New York corporation ("Seller"), recites as a preamble the
following:
I. Seller owns, beneficially and of record, all of the issued and
outstanding shares (the "Shares") of common stock, no par value, of the
Company.
II. Buyer desires to purchase the Shares from Seller, and Seller
desires to sell the Shares to Buyer, upon the terms and subject to the
conditions of this Agreement.
NOW, THEREFORE, in view of the premises and in consideration of the
agreements and mutual covenants contained in this Agreement, the parties
intending to be legally bound, agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES; PAYMENT OF COMPANY OBLIGATIONS
1.1 Purchase and Sale of the Shares. At the Closing (as hereinafter
defined), Seller shall assign, transfer and deliver to Buyer, and Buyer shall
purchase and accept from Seller, the Shares, for an aggregate purchase price
(the "Purchase Price") equal to the sum of (i) $9,000,000 and (ii) the Total
Stockholders' Equity of the Company on the Closing Date (as hereinafter
defined) as shown on the Closing Balance Sheet (as hereinafter defined);
provided, however, in the event that the sum of (i) the Purchase Price
(including any adjustment thereto pursuant to Section 1.2), (ii) the aggregate
amount of intercompany debt and intercompany payables Buyer is obligated to pay
pursuant to Section 1.3, (iii) all indebtedness for borrowed money of the
Company owing as of the Closing Date, including (A) the Company's liabilities
under the Company IRBs (as hereinafter defined), (B) obligations as lessee
under capitalized leases, (C) all obligations for borrowed money evidenced by
bonds, debentures, notes, letters of credit, or other similar arrangements, (D)
obligations to pay the deferred purchase price of property or services
(excluding trade payables), (E) all debt of others guaranteed by the Company
and (F) all interest, charges, fees, expenses and penalties, including
prepayment penalties on or which become due as a result of mandatory payments
(payments related to the Company IRBs shall not be deemed
11
mandatory to the extent such payments would have not been mandatory if Buyer
would have caused to be issued one or more letters of credit equal to the
outstanding balance of the Company IRBs) required to be made by the Company on
any indebtedness solely as a result of the consummation of the transaction
contemplated hereby, (iv) all fees and expenses paid or payable by the Company
to Camden Acquisition Company ("CAC") as a result of the termination of that
certain Stock Purchase Agreement (the "CAC Stock Purchase Agreement") dated
November 26, 1996 among CAC, the Company and Seller and (v) the gross amount of
all severance, parachute or similar payments to which any officer, director or
employee is entitled to receive from the Company as a result of the
consummation of the transaction contemplated hereby (without regard to taxes or
other withholdings), (I) exceeds $61 million (the "Purchase Price Cap"), then
the Purchase Price shall be reduced to an amount which when added to items
(ii), (iii), (iv) and (v) above would equal $61 million or (II) is less than
$59 million (the "Purchase Price Floor" and together with the Purchase Price
Cap the "Purchase Price Collar"), then the Purchase Price shall be increased to
an amount which when added to items (ii), (iii), (iv) and (v) above would equal
$59 million. For all purposes of this Agreement the term "Total Stockholders'
Equity," as of any date, shall mean an amount determined in accordance with
generally accepted accounting principles applied on a basis consistent with the
accounting principles and practices applied in the preparation of the 1996
Balance Sheet (as hereinafter defined) (provided, however, that Total
Stockholder Equity on the Closing Date shall be calculated before giving effect
to the repayment of the intercompany debt and intercompany payables pursuant to
Section 1.3, no liabilities or reserves reflected on the Latest Balance Sheet
shall be reduced prior to the Closing except in the ordinary course of business
consistent with past practices and no prepaid asset shall be included on the
Closing Date Balance Sheet unless the Company can utilize the benefit thereof
in the ordinary course of business after the Closing), and is intended to
correspond with the line on the 1996 Balance Sheet designated as Total
Stockholders' Equity.
1.2 Determination and Payment of Purchase Price. The Purchase Price
shall be determined and paid as follows:
(a) On the Closing Date, subject to the Purchase Price Collar,
Buyer shall pay to Seller an amount equal to the sum of (i) $9,000,000 and (ii)
the Total Stockholders' Equity of the Company reflected on the regularly
prepared financial statements of the Company as of the last day of the most
recent fiscal month of the Company, or if financial statements of the Company
are not available on the Closing Date for the most recent fiscal month of the
Company, for the next preceding fiscal month (the "Closing Date Payment").
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The Purchase Price shall be subject to adjustment after the Closing
Date as follows:
(b) As soon as practicable after the Closing Date, but in any
event not more than ninety (90) days after the Closing Date, Seller shall cause
Coopers & Xxxxxxx, independent public accountants to be retained by the Seller
for this purpose ("Seller's Accountants"), to audit and issue their report on
the balance sheet of the Company as at the Closing Date (the "Closing Balance
Sheet"). The Closing Balance Sheet shall be accompanied by a certificate of the
Seller's Accountants stating the Total Stockholders' Equity of the Company as
of the Closing Date as computed by them and certifying (i) that the Closing
Balance Sheet has been prepared in accordance with generally accepted
accounting principles applied in a manner consistent with the past practices of
the Company, and (ii) the Closing Balance Sheet fairly presents the financial
condition of the Company as of the Closing Date.
(c) Upon receipt of the Closing Balance Sheet and the
certificate of Seller's Accountants described in subsection (b), Buyer shall
have thirty (30) days within which to review the same and register any
objections, provided that Buyer may object to the Closing Balance Sheet only on
the basis that the Closing Balance Sheet (i) was not prepared in accordance
with generally accepted accounting principles applied on a basis consistent
with those principles used in preparing the 1996 Balance Sheet and the
principles set forth in the proviso in the last sentence of Section 1.1., or
(ii) was not based on the application of generally accepted auditing standards.
If Buyer does not object to any portion of the Closing Balance Sheet or such
certificate within 30 days, it shall countersign such certificate and the
Closing Balance Sheet shall be deemed to have been finally determined as the
amount set forth therein. In the event that Buyer or Buyer's accountants
("Buyer's Accountants") shall dispute any item contained in the Closing Balance
Sheet, or whether the computations set forth in the Closing Certificate have
been made in accordance with the requirements of this Section 1.2, the
following procedures will apply:
(i) Within thirty (30) days of receipt of the Closing
Balance Sheet, Buyer shall give written notice (the "Dispute
Notice") to Seller setting forth in reasonable detail the basis for
any such dispute or controversy and, to the extent practicable, the
specific items in dispute and a good faith estimate of the amount
thereof. Buyer shall not be entitled to dispute any single line
item (i.e., all disputes relating to accounts receivable shall be
treated as a single line item) unless such line item involves
$50,000 or more. If the aggregate amount of the items in dispute
(and with respect to line items, each of which involves at least
$50,000) is in excess of
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$500,000, all such items (the "Material Disputed Items") shall be
resolved in accordance with the remaining paragraphs of this
subsection (c).
(ii) Upon receipt of a Dispute Notice by Seller involving
Material Disputed Items, Buyer's Accountants, on behalf of Buyer,
and the Seller's Accountants, on behalf of the Seller (such
accountants being hereinafter collectively referred to as the
"Parties' Accountants"), shall promptly commence good faith
negotiations with a view to resolving the Material Disputed Items
and, in connection with such negotiations Seller's Accountants
shall provide access to its workpapers to Buyer's Accountants. If
such dispute or controversy shall not have been resolved by mutual
agreement of the parties or the Parties' Accountants within thirty
(30) days after Seller's receipt of the Dispute Notice, Buyer and
Seller shall jointly appoint, within ten (10) days thereafter, the
Rochester, New York office of Peat Marwick or such other firm of
accountants as the parties may agree (the "Neutral Accountants"),
to resolve such Material Disputed Items.
(iii) The Neutral Accountants shall make their
determination as to such Material Disputed Items within thirty (30)
days after their appointment. The Neutral Accountants shall act as
arbitrators, and shall proceed to resolve all Material Disputed
Items in accordance with generally accepted accounting principles
applied on a basis consistent with those used in preparing the 1996
Balance Sheet and the principles set forth in the proviso in the
last sentence in Section 1.1. In resolving such Material Disputed
Items, the Neutral Arbitrators may follow such procedures as the
Neutral Accountants deem appropriate, including requesting written
or oral explanations, submissions or information from the parties.
The determination of the Neutral Accountants shall be a final
determination of the Material Disputed Items, binding and
conclusive as between Buyer and the Seller absent fraud or manifest
error. The respective fees and disbursements of the Parties'
Accountants under this Section 1.2(c) shall be borne by the party
that retained such firm. The fees and disbursements of the Neutral
Accountants shall be apportioned between Buyer and the Seller as
part of the determination of the relevant dispute or controversy,
in such manner as the Neutral Accountants shall deem equitable in
light of the issues raised and the degree to which each party shall
have prevailed on each such issue, it being the parties' intention
that the prevailing party should not bear such costs.
(d) The Closing Balance Sheet shall be deemed finally settled
for purposes of this Section 1.2 upon the earlier of (i) Buyer's failure to
deliver a Dispute Notice within thirty (30) days after receipt of the Closing
Balance Sheet, (ii) resolution of all Material
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Disputed Items by agreement of the parties or the Parties' Accountants as
provided in Section 1.2(c)(ii) above, or (iii) resolution of all Material
Disputed Items by the Neutral Accountants as provided in Section 1.2(c)(iii)
above. Once the Closing Balance Sheet is deemed finally settled, the Closing
Balance Sheet shall be revised to reflect all Material Disputed Items agreed to
by the parties or resolved by the Neutral Arbitrators. The amount of the
Purchase Price shall be re-calculated based upon the Total Stockholders' Equity
as reflected on the revised Closing Balance Sheet. Subject to the Purchase
Price Collar, if the Closing Date Payment is less than the sum of (i)
$9,000,000 and (ii) the Total Stockholders' Equity as reflected on the revised
Closing Balance Sheet, Buyer shall pay such difference, without interest,
within ten (10) days after settlement of the revised Closing Balance Sheet.
Subject to the Purchase Price Collar, if the Closing Date Payment is greater
than the sum of (i) $9,000,000 and (ii) the Total Stockholders' Equity as
reflected on the revised Closing Balance Sheet, Seller shall refund such
excess, without interest, within ten (10) days after settlement of the revised
Closing Balance Sheet.
1.3 Payment of Inter-Company Debt. At the Closing, Buyer shall take all
action necessary to cause the Company to pay to Seller all inter-company debt
and inter-company payables owed by the Company to Seller as of the Closing
Date, which shall be paid simultaneously with the Purchase Price at the
Closing, subject to adjustments in accordance with the determination of the
Closing Balance Sheet.
ARTICLE II
THE CLOSING
2.1 The Closing. Subject to Articles VI and VII, the consummation of
the transactions contemplated at Article I (the "Closing") shall take place at
the offices of Bond, Xxxxxxxxx & Xxxx, LLP on January 17, 1997 or on such other
date or at such other place as the Buyer and Seller shall agree to in writing.
The day of closing is referred to herein as the "Closing Date."
2.2 Deliveries at the Closing. (a) At the Closing, Buyer shall pay to
Seller the amounts described in Sections 1.2(a) and 1.3 by wire or electronic
funds transfer in immediately available funds to accounts designated in written
instructions delivered by Seller to Buyer not less than three (3) business days
before the Closing Date.
(b) Simultaneously, Seller shall deliver to Buyer certificates
(i) evidencing the Shares, duly endorsed for transfer or accompanied by duly
executed stock powers assigning
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such Shares in blank, and with signature(s) guaranteed, in proper form for
transfer and with any applicable stock transfer stamps affixed, and (ii)
evidence satisfactory to Buyer that all inter-company debt of the Company to
Seller is discharged in full by the payment required by Section 1.3.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND SELLER
The Company and Seller hereby jointly and severally make the
representations and warranties set forth in this Article III, as of the date
hereof and as of the Closing Date:
3.1 Corporate Organization. (a) The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York, and has all requisite corporate power and authority to own, lease and
operate the properties and assets it now owns, leases or operates and to carry
on its business as presently conducted or proposed to be conducted pursuant to
existing plans. The Company is duly qualified to transact business as a foreign
corporation and is in good standing in each of the jurisdictions set forth in
Schedule 3.1(a), which are the only jurisdictions where such qualification is
required by reason of the nature or location of the properties and assets
owned, leased or operated by it or the business conducted by it. Prior to the
date hereof, the Company has delivered to Buyer complete and correct copies of
its Certificate of Incorporation, as amended to date (certified by the
competent authority of the state of incorporation of the Company within thirty
(30) days of the date hereof), and its By-Laws, as amended to date (certified
by the Secretary of the Company within thirty (30) days of the date hereof).
Neither the Certificate of Incorporation nor the By-Laws of the Company will
have been amended since the respective dates of certification thereof, nor will
any action have been taken for the purpose of effecting any amendment of such
instruments. The minute books and stock record books of the Company shall be
delivered to Buyer at the Closing.
(b) The Company has no subsidiaries and does not own, of record
or beneficially, directly or indirectly, any equity or other proprietary
interest, or right to acquire any such interest, contingent or otherwise, in
any other corporation, partnership, joint venture, limited liability company,
business enterprise or other entity of any nature whatsoever (a "Person").
3.2 Corporate Authority; Absence of Conflicts. (a) Each of Seller and
the Company has full corporate power and authority to execute, deliver and
perform this Agreement. The
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execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly approved by the Boards of
Directors of Seller and the Company, and no other corporate actions on the part
of Seller or the Company are necessary to authorize and approve the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
each of Seller and the Company and constitutes the valid and binding agreement
of each of Seller and the Company, enforceable against each of them in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization and similar laws of general applicability relating to or
affecting creditors' rights.
(b) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby, nor compliance with
the terms hereof, will (i) conflict with or result in a breach of the
Certificate of Incorporation or By-laws of Seller or the Company, nor (ii)
except as set forth on Schedule 3.14(c) attached hereto, violate, conflict with
or result in a breach of or default (or be any event which with the lapse of
time or the giving of notice or both would constitute an event of default)
under any of the terms, conditions or provisions of any material agreement,
understanding, arrangement, commitment, indenture, contract, lease, sublease,
loan agreement, note, or other document or instrument to which Seller or the
Company is a party or by which they are bound or to which they or their assets
are subject (individually, an "Instrument" and collectively, the
"Instruments"), nor (iii) accelerate or give to others any interests or rights,
including rights of acceleration, termination, modification or cancellation,
under any Instrument or in or with respect to the business or assets of Seller
or the Company, nor (iv) result in the creation of any Encumbrance (as
hereinafter defined) on the assets, capital stock or properties of Seller or
the Company, nor (v) conflict with, violate or result in a breach of or
constitute a default under any law, statute, rule, judgment, order, decree,
injunction, ruling or regulation of any government, governmental agency,
authority or instrumentality, court or arbitration tribunal to which Seller or
the Company or any of their assets or properties are subject, nor (vi) require
Seller or the Company to give notice to, or obtain an authorization, approval,
order, license, franchise, declaration or consent of, or make a filing with,
any third party, including, any foreign, federal, state, county, local or other
governmental or regulatory body, other than such filings as are required under
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Acts of 1976, as amended (the
"HSR Act").
3.3 Outstanding Capital Stock; Title to Shares. (a) The authorized
capital stock of the Company consists of 1,000 shares of common stock, no par
value, of which one (1.0) Share is issued and outstanding, which one (1) Share
is owned, beneficially and of record, by Seller. No other class of capital
stock of the Company is authorized or outstanding. All of the issued and
outstanding Shares are duly authorized and are validly issued, fully paid and
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nonassessable, and none of such Shares have been issued in violation of any
preemptive rights of shareholders. The Shares constitute all of the issued and
outstanding shares of capital stock of the Company.
(b) Seller is, and immediately following the Closing Buyer will
be, the beneficial and record owner of all of the Shares, free and clear of any
Encumbrances. There are no agreements, arrangements or understandings
(including, without limitation, options or rights of first refusal) to which
Seller is a party relating to the purchase, sale or other disposition of the
Shares or any interest therein.
(c) There is no outstanding right, subscription, warrant, call,
unsatisfied preemptive right, option or other agreement of any kind to purchase
or otherwise to receive from the Company or Seller any shares of the capital
stock or any other security of the Company, and there is no outstanding
security of any kind convertible into such capital stock.
3.4 Financial Statements. Attached hereto as Schedule 3.4 are the
following financial statements:
(a) The balance sheet of the Company as of January 27, 1996
(the "1996 Balance Sheet"), and the related statements of income, retained
earnings and cash flows for the year then ended (the "1996 Financial
Statements");
(b) The balance sheet of the Company as of November 23, 1996
(the "Latest Balance Sheet") and the related statements of income, retained
earnings and cash flows for the ten-month period then ended (the "Latest
Financial Statements");
(c) The statements of income, retained earnings and cash flows
for the quarterly periods ended October 26, 1996, July 27, 1996 and April 27,
1996; and
(d) The balance sheets of the Company as of January 28, 1995
and January 29, 1994, and the related statements of income, retained earnings
and cash flows for the years then ended.
Each of the said financial statements (i) fairly presents the financial
position, results of operations and cash flows of the Company for the
respective periods stated therein, (ii) has been prepared from and is
consistent with the books and records of the Company, (iii) is complete and
correct in all material respects, and (iv) has been prepared in accordance with
generally accepted accounting principles, consistently applied (in each case,
as part of a
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consolidated group) subject, in the case of the Latest Financial Statements and
the quarterly financial statements described in subsection (c), to normal year
end adjustments consistent with prior periods. No notes are included in the
financial statements.
3.5 Absence of Undisclosed Liabilities. Except as set forth in Schedule
3.5, the Company does not have any liabilities or obligations of any nature,
whether accrued, absolute, contingent, unliquidated or otherwise, whether due
or to become due and whether arising out of transactions entered into or any
condition or state of facts existing on or prior to the date hereof, which
would in accordance with generally accepted accounting principles be reflected
on, or disclosed in the notes to, a balance sheet, other than (a) liabilities
and obligations set forth on the Latest Balance Sheet, and (b) liabilities and
obligations which have arisen after the date of the Latest Balance Sheet in the
ordinary course of business, all of which are properly reflected in the books
and records of the Company and which will not, individually or in the
aggregate, have a material adverse effect on the business, assets, liabilities,
financial condition, results of operations or operations of the Company (a
"Material Adverse Effect").
3.6 Absence of Material Adverse Changes. Except as set forth in
Schedule 3.6 hereto, since the date of the Latest Balance Sheet, the Company
has carried on its business in the ordinary course and consistent with past
practice. Except as set forth in Schedule 3.6 hereto, since the date of the
Latest Balance Sheet (except as set forth in subsection (l) of this Section
3.6) the Company has not:
(a) incurred any obligation or liability (whether absolute,
accrued, contingent or otherwise), except in the ordinary course of business
and consistent with past practice;
(b) discharged or satisfied any Encumbrance, or paid any
obligation or liability, absolute, accrued, contingent, or otherwise, whether
due or to become due, other than obligations or liabilities incurred in the
ordinary course of the Company's business;
(c) suffered any damage, destruction or loss of physical
property or goods resulting in costs or expenses to the Company in excess of
$100,000, whether or not covered by insurance;
(d) mortgaged, pledged or subjected to any lien, charge or
other Encumbrance any of its assets, tangible or intangible, except for
"Permitted Liens" as that term is hereinafter defined or as set forth in one of
the Schedules hereto;
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(e) sold or transferred any of its assets or canceled or
compromised any of its debts, except, in each such case, in the ordinary course
of business and consistent with past practice, or waived any claims or rights
of a material nature;
(f) leased, licensed or granted to any person or entity any
rights in any of its assets or properties except in the ordinary course of
business;
(g) experienced any material adverse change in its financial
condition, results of operations, cash flows, assets, liabilities, businesses,
prospects, or operations;
(h) experienced any material adverse change in its relationship
with any of its employees, salesmen, distributors, or independent contractors;
(i) made any capital expenditures or capital additions or
betterments in excess of an aggregate of Five Hundred Thousand Dollars
($500,000);
(j) revalued any of its assets;
(k) entered into any material transaction, contract or
commitment of a kind required to be disclosed on one of the Schedules, except
as disclosed on one of the Schedules hereto;
(l) since the date of the 1996 Balance Sheet, made any change
in any accounting principle or practice or in its method of applying any such
principle or practice;
(m) made any distributions (however characterized and whether
payable in cash or additional shares of stock) in respect of any shares of its
capital stock or declared or paid any dividends in a manner inconsistent with
the Company's customary practices with respect to dividends;
(n) repurchased or redeemed any shares of its capital stock;
(o) entered into any agreement to do any of the foregoing; or
(p) issued any additional shares of its capital stock or
granted any options, warrants or other rights to purchase, or any securities
convertible into or exchangeable for, shares of its capital stock.
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3.7 Real Property. (a) Schedule 3.7(a) sets forth a complete list and
summary description of (i) all real property owned by the Company (the "Owned
Real Property"), (ii) all real property leased or subleased by the Company (the
"Leased Real Property"), and (iii) all other rights or interests of the Company
in real property (the "Other Real Property Interests") (the Owned Real
Property, the Leased Real Property and the Other Real Property Interests are
collectively referred to herein as the "Real Property"). Prior to the date
hereof, Seller has delivered to Buyer true and correct copies of all leases,
subleases, abstracts of title, surveys, title opinions and title insurance
policies in Seller's or the Company's possession relating to all of the Real
Property. None of the Real Property reflected in the 1996 Balance Sheet or the
Latest Balance Sheet has been disposed of, and no real property has been
acquired by the Company since the date of the Latest Balance Sheet.
(b) Except for (i) liens disclosed in Schedule 3.7(b), (ii)
liens for current taxes not yet delinquent, (iii) covenants, conditions and
restrictions of record, all of which are reflected in the title documents, and
none of which materially impair the use of such property in the manner
currently used or impair the ability of the Company to deliver good and
marketable title to such Real Property, and (iv) any mechanic's, workmen's,
repairmen's, materialmen's, contractor's, warehousemen's, carrier's, supplier's
or vendor's lien, if payment is not yet due (the "Permitted Liens"), the
Company has good and marketable title in fee simple to all Owned Real Property,
and a valid leasehold interest in all Leased Real Property, free and clear of
any mortgage, pledge, security interest, lien, claim, charge, conditional sales
contract, restriction, reservation, option, right of first refusal, or other
encumbrance of any nature whatsoever (collectively, "Encumbrances"). Except as
set forth on Schedule 3.7(b), the Company has good and marketable title to all
structures, plants, leasehold improvements, systems, fixtures and other
property located on or about any of the Leased Real Property which are owned by
the Company, as reflected in the Latest Balance Sheet, free of any
Encumbrances, except for Permitted Liens and none of such assets is subject to
any agreement, arrangement or understanding for their use by any person other
than the Company.
(c) Each of the leases and subleases relating to the Leased
Real Property is in full force and effect, there is no default by the Company
(or to the best knowledge of the Company or Seller, by the lessor) under any
such lease or sublease, and each such lease and sublease will remain in full
force and effect following the Closing without any modification in the rights
or obligations of the parties under any such lease or sublease.
(d) Except as set forth in Schedule 3.7(d), no work has been
performed on or with respect to or in connection with any of the Real Property
that would cause such Real
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Property to become subject to any mechanic's, materialmen's, workmen's,
repairmen's, carrier's or similar liens aggregating in excess of $100,000.
(e) To the best of Seller's and the Company's knowledge, the
structures, plants, improvements, systems and fixtures (including, without
limitation, storage tanks or other impoundment vessels, whether above or below
ground) located on each such parcel of Real Property comply in all material
respects with all Federal, state and local laws, ordinances, rules, regulations
and similar governmental and regulatory requirements, and are in good operating
condition and repair, ordinary wear and tear excepted. To the best of Seller's
and the Company's knowledge, each such parcel of Real property (in view of the
purposes for which it is currently used) conforms in all material respects with
all covenants or restrictions of record and conforms with all applicable
building codes and zoning requirements and, to the best knowledge of Seller and
the Company, there is no proposed change in any such governmental or regulatory
requirements or in any such zoning requirements. All existing electrical,
plumbing, fire sprinkler, lighting, air conditioning, heating, ventilation,
elevator and other mechanical systems located in or about the Real Property are
in good operating condition and repair ordinary wear and tear excepted), except
for defects or deficiencies which would not have a Material Adverse Effect.
(f) The Other Real property Interests include all easements,
rights-of-way and similar rights necessary to conduct the Company's business as
presently conducted and to use all of its Real Property as currently used,
including, without limitation, easements and licenses for pipelines, power
lines, water lines, roadways and other access. Schedule 3.7(f) correctly lists
and describes all such easements and rights and all agreements and other
instruments (including any amendments) relating thereto which are not recorded.
All material easements and rights are valid, binding in favor of the Company
and in full force and effect; any amounts due and payable thereon to date have
been paid or have been fully accrued for in the Latest Balance Sheet or in the
books and records of the Company for periods after the date of the Latest
Balance Sheet, as applicable; neither the Company nor (to the best knowledge of
the Company and the Seller) any other party thereto is in default thereunder;
and there exists no event or condition affecting the Company or (to the best
knowledge of the Company and Seller) any other party thereto, which, with the
passage of time or notice or both, would constitute a default thereunder. No
material easement or right will be breached by, nor will any party thereto be
given a right of termination as a result of, the transactions contemplated by
this Agreement.
3.8 Tangible Personal Property. (a) The Company has good and marketable
title to all of the equipment, machinery, motor vehicles, inventories,
supplies, furniture and fixtures and other tangible personal property owned by
the Company, free and clear of any Encumbrance
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of any kind or nature whatsoever except as set forth in Schedule 3.8(a) and
except for Permitted Liens. All items of equipment, machinery, vehicles,
furniture, fixtures and other tangible personal property currently owned or
used by the Company as of the date hereof are in good operating condition and
repair, ordinary wear and tear excepted (except for defects or deficiencies
which would not have a Material Adverse Effect), are physically located at or
about the Company's place of business and are owned outright by the Company or
validly leased under leases set forth in Schedule 3.8(b). None of such personal
property is subject to any agreement, arrangement or understanding for its use
by any person other than the Company. The maintenance and operation of such
personal property complies with all applicable laws, regulations, ordinances,
contractual commitments and obligations, except for such noncompliance as would
not have a Material Adverse Effect. Except as set forth in Schedule 3.8(a), no
item of tangible personal property owned or used by the Company as of the date
hereof is subject to any conditional sale agreement, installment sale agreement
or title retention or security agreement or arrangement of any kind. As to each
item of personal property subject to any such agreement or arrangement,
Schedule 3.8(a) sets forth a brief description of the property in question and
the amount and repayment terms of the underlying obligation. Schedule 3.8(a)
sets forth a complete and correct fixed asset list of the Company dated
December 10, 1996.
(b) Schedule 3.8(b) sets forth a complete and correct list and
summary description of all material tangible personal property leases to which
the Company is a party, together with a brief description of the property
leased. Prior to the date hereof, the Company has made available to Buyer
complete and correct copies of each lease (and any amendments thereto) listed
in Schedule 3.8(b). Except as set forth in Schedule 3.8(b): (i) each such lease
is in full force and effect; (ii) all lease payments due to date on any such
lease have been paid, and neither the Company nor (to the best knowledge of the
Company and Seller) any other party is in default under any such lease, and no
event has occurred which constitutes, or with the lapse of time or the giving
of notice or both would constitute, a default by the Company or (to the best
knowledge of the Company and Seller) any other party under such lease; and
(iii) there are no disputes or disagreements between the Company and any other
party with respect to any such lease.
3.9 Accounts Receivable. The accounts receivable reflected on the
Latest Balance Sheet are, and the accounts and notes receivable of the Company
created from and after the date of the Latest Balance Sheet to the Closing Date
will be, free and clear of any Encumbrance. All accounts receivable of the
Company (i) arose from bona fide sales of goods or services in the ordinary
course of business and consistent with past practice, (ii) are accurately and
fairly reflected on the Latest Balance Sheet or, with respect to accounts
receivable of the Company created after the date thereof and through the date
of this
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Agreement are accurately and fairly reflected in the books and records of the
Company, and (iii) are fully collectible, without offset or counterclaim, net
of reserves, within ninety (90) days.
3.10 Accounts Payable. All accounts payable to the Company (i) arose
from bona fide purchases in the ordinary course of business and consistent with
past practice, and (ii) are accurately and fairly reflected on the Latest
Balance Sheet or, with respect to accounts payable of the Company created after
the date thereof and through the date hereof, are accurately and fairly
reflected in the books and records of the Company.
3.11 Inventory. The inventory of the Company consists only of items of a
quality and quantity useful or saleable in the ordinary course of business of
the Company. The inventories as reflected on the 1996 Balance Sheet and the
Latest Balance Sheet are valued at the lower of cost (determined by the LIFO
method of accounting) or market value, subject, in the case of the inventories
reflected in the Latest Balance Sheet, to the computation of LIFO reserves at
year end. The inventory on hand on the date of this Agreement (and on the
Closing Date) was (or will be) purchased at prices and in quantities consistent
with the Company's custom in the ordinary course of business. Schedule 3.11
sets forth a list of each location of inventory of the Company, and a list and
summary description of any agreements, including processing agreements and
consignment agreements, applicable to such inventory.
3.12 Backlog. All outstanding customer purchase orders for products of
the Company have been entered at prices and upon terms and conditions
consistent with the normal practices of the Company, and, to the best knowledge
of Seller and the Company, the completion of such orders will not have a
Material Adverse Effect. The Company and Seller have not been informed by any
customer that any material order included in its backlog is likely to be
canceled or terminated prior to its completion.
3.13 Computer Software. All computer software programs (excluding
noncustomized computer software available to the Company on an over-the-counter
basis through normal commercial channels) used by the Company in the conduct of
its business are owned or licensed by the Company free and clear of
Encumbrances, except for Permitted Liens, and to the best of Seller's and the
Company's knowledge do not infringe any copyright, trade secret, or trademark
of any other person.
3.14 Material and Affiliated Contracts. (a) Except as set forth in
Schedule 3.14(a), the Company is not a party to, or subject to:
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(i) any contract, arrangement or understanding, or
series of related contracts, arrangements or understandings, which
involves annual expenditures or receipts by the Company of more
than $100,000 or which provides for performance, regardless of
amounts, over a period in excess of six months after the date of
such contract, arrangement or commitment;
(ii) any license agreement, whether as licensor or
licensee:
(iii) any agreement with suppliers or customers for
discounts or allowances:
(iv) any note, bond, indenture, credit facility,
mortgage, security agreement or other instrument or document
relating to or evidencing indebtedness for money borrowed or a
security interest in or mortgage on the assets of the Company;
(v) any warranty, indemnity or guaranty issued by the
Company (other than customary product warranties provided by the
Company in the ordinary course of business, which will be provided
to Buyer pursuant to Section 3.21);
(vi) any contract, arrangement or understanding granting
to any person the right to use any property or property right of
the Company, including any lease;
(vii) any contract, arrangement or understanding
restricting the right of the Company to engage in any business
activity or to compete with any business;
(viii) any joint venture contracts;
(ix) any agreement granting to others the right to
manufacture or distribute products of the Company;
(x) any other material contract, arrangement or
understanding not made in the ordinary course of business and
consistent with past practice; or
(xi) any outstanding offer or commitment to enter into
any contract or arrangement of the nature described in subsections
(i) through (x) of this Section 3.14(a).
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(b) Schedule 3.14(b) contains an accurate and complete list and
description of all agreements, arrangements and understandings (including
outstanding indebtedness) which are currently in effect between the Company or
the Seller and any of the following (each, a "Related Party") and which involve
a value of $10,000 or more: (i) each director and officer of the Company; (ii)
the spouses, children, grandchildren, siblings, parents, grandparents, uncles,
aunts, nieces, nephews or first cousins of any director or officer of the
Company or their spouses (collectively, "near relatives"); (iii) any trust for
the benefit of any director or officer of the Company or any of their
respective near relatives; and (iv) any corporation, partnership, joint venture
or other entity owned or controlled by any director or officer of the company
or any of their respective near relatives.
(The contracts, arrangements and understanding described in Schedule 3.14(a)
and Schedule 3.14(b) are collectively referred to herein as "Material
Contracts").
(c) Prior to the date hereof, Seller has delivered to Buyer
complete and correct copies of each written Material Contract (and any
amendments thereto), and Schedule 3.14(a) and Schedule 3.14(b) contain accurate
summary descriptions of all oral Material Contracts. Except as set forth in
Schedule 3.14(c): (i) each contract to which the Company is a party or by which
it is bound is in full force and effect; (ii) neither the Company nor, to the
best of Seller's and the Company's knowledge, any other party is in default
under any such contract, and no event has occurred which constitutes, or which
with the lapse of time or the giving of notice or both would constitute, a
default by the Company or, to the best of Seller's and the Company's knowledge,
by any other party under such contract; and (iii) there are no disputes or
disagreements between the Company and any other party with respect to any such
contract.
3.15 Compliance with Laws. To the best of Seller's and the Company's
knowledge, the Company is complying and has complied in all material respects
with all laws, statutes, rules, regulations, codes and, ordinances, and has
secured all necessary permits and authorizations and licenses issued by,
federal, state, local and foreign agencies and authorities, applicable to its
business, properties and operations, or to which the Company may be subject or
which are applicable to the operations, business or assets of the Company
except for such permits and authorizations, the absence of which would not have
a Material Adverse Effect. Neither the Company nor Seller has received any
notice alleging any such violation nor, to the best of Seller's and the
Company's knowledge is there any inquiry, investigation or proceedings relating
thereto.
3.16 Legal Proceedings. Except as set forth in Schedule 3.16 hereto,
there are no suits, actions, proceedings (including, without limitation,
arbitral and administrative proceedings),
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claims or governmental investigations or audits pending or, to the best of
Seller's and the Company's knowledge, threatened against the Company or its
properties, assets or business, or pending or, to the best of Seller's and the
Company's knowledge, threatened against, relating to or involving any of the
officers, directors, Employees or agents of the Company in connection with the
business of the Company. There are no such suits, actions, proceedings, claims,
or investigations pending or, to the best of Seller's and the Company's
knowledge, threatened, challenging the validity or propriety of, or otherwise
relating to or involving, this Agreement or the transactions contemplated
hereby. Except as set forth in Schedule 3.16, there is no judgment, order,
writ, injunction, decree or award (whether issued by a court, an arbitrator, a
governmental body or agency thereof or otherwise) to which the Company is a
party, or involving the property, assets or business of the Company, which is
unsatisfied or which requires continuing compliance therewith by the company.
3.17 Ability to Conduct the Business. There is no agreement, arrangement
or understanding to which the Company is a party, nor any judgment, order,
writ, injunction or decree of any court or any governmental body or agency
thereof directed at the Company or in which the Company is named nor, to the
best knowledge of the Company and Seller, any other judgment, order, writ,
injunction or decree, that could in any such case) prevent the use by the
Company of its properties and assets or the conduct by the Company of its
business as of the date hereof. To the best of Seller's and the Company's
knowledge, the Company has in force, and has complied in all material respects
with all of the conditions and requirements imposed by, all permits, licenses,
exemptions, consents, authorizations and approvals used in or required for the
conduct of its business as presently conducted. Neither the Company nor Seller
has received any notice of, and neither the Company nor Seller has any
knowledge of, any intention on the part of any appropriate authority to cancel,
revoke or modify, or any inquiries, proceedings or investigations the purpose
or possible outcome of which is the cancellation, revocation or modification of
any such permit, license, exemption, consent, authorization or approval.
3.18 Labor Matters. (a) No union is certified as collective bargaining
agent to represent any Employee of the Company, and Seller and the Company have
no knowledge of any representation campaign which is currently under way. The
Company is not (a) a party to, involved in or threatened by any labor dispute,
unfair labor practice charge, labor arbitration proceeding or grievance
proceeding, (b) currently negotiating any collective bargaining agreement or
(c) aware of any threatened strike or filing with the National Labor Relations
Board by any employee or employee group seeking recognition as a collective
bargaining representative or unit, work stoppage or slowdown, picketing or
controversy involving employees or former employees of the Company (hereafter
referred to as "Employees" and "Former Employees", respectively).
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(b) Schedule 3.18(b) also sets forth the names of all directors
and officers of the Company (whether or not such persons are Employees or
Former Employees), together with the respective term of office and titles for
each such person and all remuneration payable to any such officers and
directors who are not Employees. The Company has delivered to Buyer, prior to
the date hereof, a statement, certified by an appropriate officer of the
Company, setting forth: (i) with respect to each officer or director of the
Company, such person's date of birth, date of employment, the current salary
and commission terms of such person, the date and amount of such person's most
recent salary increase, the amount of any bonuses or other cash compensation
(other than regular salary or commissions) paid since February 1, 1993 to such
person and a description of all compensation arrangements currently applicable
to such person, and (ii) with respect to all other Employees, their date of
birth, date of employment, and compensation for fiscal years 1996 and 1995.
(c) Except as set forth on Schedule 3.18(c), subject to normal
year-end adjustments the Company has accrued or reflected on the Latest Balance
Sheet, and will accrue or reflect on its books and records, all obligations for
salaries, vacations, medical, severance and other benefits and other
compensation of any kind with respect to its Employees and any of its Former
Employees, to the extent required by generally accepted accounting principles,
including, but not limited to, vacation pay, sick pay, medical, death, and
disability benefits, severance, bonuses, incentive, and pension, retirement,
profit sharing or other types of deferred compensation, and all commissions and
other fees payable to salespeople, sales representatives and other agents.
Except as set forth in Schedule 3.18(c) there are no outstanding loans from the
Company to any Employee except normal Employee advances in the ordinary course
of business. Complete and correct copies of all written agreements with or
concerning Employees and all employment policies, and all amendments and
supplements thereto, will be delivered to Buyer, and a list of all such
agreements and policies, whether written or oral is set forth on Schedule
3.18(c).
(d) Since January 27, 1996, the Company has not (i) except in
the ordinary course of business and consistent with past practice, increased
the salary or other compensation payable or to become, payable to or for the
benefit of any of the Employees or Former Employees, (ii) provided any of the
Employees with any increased security or tenure of employment, (iii) increased
the amounts payable to any of the Employees upon the termination of any such
person's employment or (iv) adopted, amended, or revised the terms of any
Benefit Plan (as hereinafter defined) with respect to the benefits granted to
or for the benefit of any of the Employees or Former Employees thereunder.
(e) To the best of Seller's and the Company's knowledge, the
Company has complied in all material respects with all laws, statutes, rules,
and regulations applicable with
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respect to Employees in each of the jurisdictions in which it operates and/or
does business. In particular, to the best of Seller's and the Company's
knowledge, the Company has complied with all Federal and state laws, statutes,
rules and regulations applicable to discriminatory employment practices
(including, without limitation, discrimination based on race, age, handicap,
sex or sexual preference or sexual harassment, in particular with respect to
employment, equal pay and/or discharge), workplace safety, (including rules and
regulations of the Occupational Safety and Health Administration), workers'
compensation, payment of minimum wages and overtime rates, immigration, or
otherwise relating to the conduct of employers with respect to employees or
prospective employees, except where the failure to so comply will not have a
Material Adverse Effect. There have been no claims made or threatened
thereunder against the Company arising out of, relating to or alleging any
violation of any of the foregoing, except for claims which are no longer
pending or which are set forth on Schedule 3.18(e). The Company has complied in
all material respects with the employment eligibility verification form
requirements under the Immigration and Naturalization Act, as amended ("INA"),
in recruiting, hiring, reviewing and documenting prospective employees for
employment eligibility verification purposes and the Company has complied in
all material respects with the paperwork provisions and anti-discrimination
provisions of the INA. The Company has obtained and maintained the employee
records and I-9 forms in proper order as required by law. To the best of
Seller's and the Company's knowledge, the Company is not currently employing
any workers unauthorized to work in the United States.
3.19 Employee Benefit Plans. (a) For purposes of this Agreement,
"Benefit Plan" means and includes (i) any "employee benefit plan", within the
meaning of section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), without regard to any exemption or exclusion therefrom
under Department of Labor regulations, and (ii) any deferred compensation
agreement, defined benefit and defined contribution plan, stock ownership plan,
consulting or employment agreement, executive compensation plan, bonus plan,
incentive compensation plan or arrangement, supplemental retirement plan or
arrangement, agreement with respect to temporary employees, vacation pay,
sickness, disability or death benefit plan (whether provided through insurance,
on a funded or unfunded basis or otherwise), retiree medical or life insurance
plan, employee stock option or stock purchase plan, severance pay, termination
or salary continuation plan, arrangement or practice, and (iii) each other
employee benefit plan, program or arrangement, which at any time has been
maintained or contributed to by the Company for the benefit of or relating to
any of the Employees or Former Employees and which is or remains legally
binding on the Company or in respect of which the Company has any liability or
obligation, whether imposed by a government program or run by any Governmental
administration or agency, or whether written or oral.
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(b) Schedule 3.19(b) sets forth a complete and correct list of
each Benefit Plan.
(c) The Company will not incur any liability under any
severance agreement, deferred compensation agreement, employment agreement or
similar agreement solely as a result of the consummation of the transactions
contemplated by this Agreement (including liability occurring as a result of
the passage of time or events outside the control of the Company). Except as
set forth in Schedule 3.19(c), the Company is not sponsoring or contributing
to, and since January 1, 1991 has not sponsored or contributed to, any Benefit
Plan which is an "employee pension benefit plan," as defined in section 3(2) of
ERISA, or which is subject to Title IV of ERISA or to section 412 of the Code.
No Benefit Plan is a "voluntary employees beneficiary association" (within the
meaning of section 501(c)(9) of the Code) and there are no other "welfare
benefit funds" relating to Employees or Former Employees within the meaning of
section 419 of the Code. No event or condition exists with respect to any
Benefit Plan that could subject the Company to any tax under section 4980B of
the Code or, for plan years beginning before January 1, 1989, section 162(k) of
the Code. With respect to each Benefit Plan, prior to the date hereof, Seller
has delivered to Buyer complete and correct copies of the following documents,
where applicable: (i) the annual reports (Form 5500 series), together with
schedules, as required, filed with the IRS, and any financial statements and
opinions required by section 103(a)(3) of ERISA for the three (3) most recent
plan years, (ii) the most recent determination letter issued by the IRS, (iii)
the most recent summary plan description and all modifications, as well as all
other descriptions distributed to Employees or set forth in any manuals or
other documents, (iv) the text of the Benefit Plan and of any trust, insurance
or annuity contracts maintained in connection therewith, (v) the actuarial
reports, if any, relating to any Benefit Plan for the three (3) most recent
plan years, (vi) the most recent actuarial valuation, study or estimate of any
retiree medical plan or supplemental retirement benefit plan; and (vii) the
most recent statement of plan assets for each Benefit Plan that is intended to
meet the requirements of section 401(a) of the Code.
(d) Since January 1, 1990 neither the Company nor any
corporation or other trade or business under common control with the Company
(as determined pursuant to section 414(b), (c), (m) or (o) of the Code) (a
"Common Control Entity") has maintained or contributed to or in any way
directly or indirectly has any liability whether contingent or otherwise) with
respect to any "multi-employer plan", within the meaning of section 3(37) or
4001(a)(3) of ERISA, or, except as set forth in Schedule 3.19(d), any other
plan which is subject to Title IV of ERISA. No proceedings by the Pension
Benefit Guaranty Corporation (the "PBGC") to terminate any Benefit Plan have
been instituted or threatened; no event has occurred or condition exists which
constitutes grounds for the PBGC to so terminate any Benefit Plan; neither the
Company nor any Common Control Entity is a party to or has any
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liability under any agreement imposing secondary liability on it as a seller of
the assets of a business in accordance with section 4204 of ERISA or under any
other provision of Title IV of ERISA; no contingent or other liability with
respect to which the Company has, had or could have any liability under section
4063 or 4069 or other provision of Title IV of ERISA to the PBGC or to any
Benefit Plan; and no assets of the Company are subject to a lien under sections
4064 or 4068 of ERISA. All contributions required to be made to or with respect
to each Benefit Plan with respect to the service of Employees, Former Employees
or other individuals with the Company prior to the date hereof have been made
or have been accrued for in the Latest Balance Sheet or in the books and
records of the Company for periods after the date of the Latest Balance Sheet,
as applicable.
(e) Except as set forth on Schedule 3.19(e), none of the
Benefit Plans has been subject to a "reportable event," within the meaning of
section 4043 of ERISA (whether or not waived); to the best of Seller's and the
Company's knowledge, there have been no "prohibited transactions", within the
meaning of section 406 of ERISA or section 4975 of the Code; to the best of
Seller's and the Company's knowledge, each Benefit Plan has, in all material
respects been administered to date in accordance with the applicable provisions
of ERISA, the Code and applicable law and with the terms and provisions of all
documents, contracts or agreements pursuant to which such Benefit Plan is
maintained; all reports and information required to be filed with the
Department of Labor, the IRS, the PBGC or plan participants or beneficiaries
with respect to any Benefit Plan have been timely filed; there is no dispute,
arbitration, claim, suit, or grievance, pending or, to the best knowledge of
the Company and the Seller, threatened, involving a Benefit Plan (other than
routine claims for benefits), and, to the best knowledge of the Company and the
Seller, there is no basis for such a claim; none of the Benefit Plans nor, to
the best of Seller's and the Company's knowledge, any fiduciary thereof (in
such person's capacity as such) has been the direct or indirect subject of an
order or, to the knowledge of the Company and the Seller, an investigation by a
governmental or quasi-governmental agency, there are no matters pending as to
which the Company has received notice before the IRS, the Department of Labor,
the PBGC or any other domestic or foreign governmental agency with respect to a
Benefit Plan; there have been no claims, or notice of claims, filed under any
fiduciary liability insurance policy covering any Benefit Plan, and there has
not been and there will not be any "excess parachute payment" (as that term is
defined in section 280G of the Code) to any of the Employees prior to the
Closing or as the result of the transactions contemplated by this Agreement. To
the best of Seller's and the Company's knowledge, no event or set of conditions
exists which would subject the Company to any Tax under sections 4972, 4974-76,
4979, 4980, 4980B, 4999 or 5000 of the Code.
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3.20 Environmental Matters. (a) There are no actions, investigations,
inquiries (written or oral) or other proceedings, rulings, orders or citations
pending, or to the best knowledge of Seller and the Company, threatened by
government officials with respect to the Company as the result of any actual or
alleged failure of the Company to comply with any requirement of any
Environmental Laws (as that term is defined in subsection (l) below). Schedule
3.20 contains a complete list of all solid waste dumps and hazardous waste
disposal, treatment and storage facilities which are presently or formerly were
used by the Company for disposal of hazardous waste as that term is used in the
RCRA (as hereinafter defined) during the past seven years. Prior to the date
hereof, the Company has delivered to Buyer true and correct copies of all
hazardous waste manifests issued by it at any time since January 1, 1994.
Except as disclosed on Schedule 3.20:
(b) To the best of Seller's and the Company's knowledge, the
Company has received all permits and approvals, has kept all records, and has
made all filings required by applicable Federal, state, or local laws with
respect to emissions of Hazardous Substances into the environment (including
solids, liquids, and gases) at the Real Property and the proper disposal of
such materials (including solid waste materials).
(c) To the best of Seller's and the Company's knowledge, the
Company and all operations thereof are currently in compliance in all material
respects with all applicable Environmental Laws.
(d) To the best of Seller's and the Company's knowledge,
neither the Company nor its operations nor its property is the subject of any
Federal, state, or local investigation or inquiry evaluating whether any
remedial action is needed to respond to a release of any Hazardous Substances
into the environment, and there is no basis for any such investigation or
inquiry.
(e) Since January 1, 1994, the Company has not filed, nor has
it been required to file, any notice under Federal, state or local laws
indicating past or present treatment, storage, or disposal of hazardous waste
as defined under 40 C.F.R Parts 260-270 or any state equivalent or reporting a
spill or release of a contaminant at, on or under or about the Real Property.
(f) Prior to the date hereof, Seller has furnished Buyer with a
summary description of the Company's activities with respect to the generation,
transportation, treatment, storage or disposal of Hazardous Substances, as
defined in subsection 3.20(l), and
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Seller and the Company have made available to Buyer all reports, inventories
and plans in the possession of Seller or the Company relating to same.
(g) To the best of Seller's and the Company's knowledge, since
the effective date of any Environmental Law (if applicable), the Company has
not disposed of or released any Hazardous substance in or on the ground or into
the groundwaters of its Real Property, except the disposal of or release of
Hazardous Substances which (i) are permitted by law, (ii) have been remediated
in accordance with applicable law (provided that any remediation effected
pursuant to any judicial or administrative order or consent decree or as a
result of any governmental investigation, inquiry request, order or decree
since January 1, 1980 is summarily described in Schedule 3.20(g), hereto), or
(iii) would not have a Material Adverse Effect.
(h) No underground storage tanks or surface impoundments used
for the storage of Hazardous Substances are located at, on, or under the Real
Property.
(i) No lien in favor of any governmental authority for (i) any
liability under any Environmental Laws or (ii) damages arising from or costs
incurred by such governmental authority in response to a release of a
contaminant into the environment has been filed or attached to the real
property of the Company.
(j) Since January 1, 1994, the Company and its Real Properties
have been found to be in substantial compliance with applicable Environmental
Laws following all inspections conducted by applicable regulatory bodies in
connection with the matters described in this Section.
(k) To the best of Seller's and the Company's knowledge, except
as disclosed in Schedule 3.20(k), none of the Real Property is located in an
area identified by an agency or department of Federal, state or local
governments, or identified by the Company or the Seller, as having special
flood or mudslide hazards or wetlands.
(l) For purposes of this Agreement, the term "Environmental
Laws" shall mean all applicable Federal, state and local laws, regulations or
ordinances relative to air quality, water quality, solid waste management,
hazardous or toxic substances or the protection of health, safety or the
environment, including, but not limited to, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. 9601
et seq.), the Hazardous Material Transportation Act (49 U.S.C. 1801 et seq.),
the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.), the Resource
Conservation and Recovery Act of 1976, as amended (42 U.S.C. 6901 et seq.)
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("RCRA"), the Clean Air Act, as amended (42 U.S.C. 2601 et seq.), the Toxic
Substances Control Act, as amended (15 U.S.C. 2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C. 136 et seq.),
and the Clean Water Act of 1977, as amended (33 U.S.C. 1251 et seq.), as these
laws may have been amended or supplemented through the Closing Date, and any
analogous state or local statutes and the regulations promulgated pursuant
thereto. For purposes of this Agreement, the term "Hazardous Substance" shall
mean any product, substance, chemical, contaminant, pollutant, effluent, waste
or other material whose presence, nature, quantity and/or concentration, use,
manufacture, disposal, transportation, emission, discharge, spill, release or
effect, either by itself or in combination with other material located on any
of the Real Properties, is either (i) regulated or monitored by any
governmental authority, or (ii) defined or listed in, or otherwise classified
pursuant to, any statute, law, ordinance, rule or regulation (or any proposed
statute, law, ordinance, rule or regulation) as "hazardous substances,"
"hazardous materials," "hazardous wastes," "infectious wastes" or "toxic
substances". Hazardous Substances shall include, but not be limited to: (i)(A)
any "hazardous substance" as defined in the "Comprehensive Environmental
Response, Compensation and Liability Act, (B) any "regulated substance" as
defined in the Solid Waste Disposal Act or (C) any substance subject to
regulation pursuant to the Toxic Substances Control Act, as such laws are now
in effect or may be amended through the Closing Date and any rule, regulation
or administrative or judicial policy statement, guideline, order or decision
under such laws, (ii) petroleum and refined petroleum products, (iii) asbestos
and asbestos-containing products, (iv) flammable explosives, (v) radioactive
materials, (vi) radon and (vii) any other substance that is regulated or
classified as hazardous or toxic under any Federal, state or local law,
statute, ordinance, rule or regulation.
3.21 Products. Prior to the date hereof, the Company has delivered to
Buyer copies of all standard and other warranties which are currently extended
or which have previously been extended by the Company with respect to products
sold by the Company and for which the Company may have continuing liability or
obligations as of the date hereof. Except as disclosed on Schedule 3.21, there
are no pending claims, and Seller and the Company know of no basis for any
claims, based on defective products, violation of product warranties, violation
of product packaging or labeling requirements or similar claims with respect to
any products manufactured or sold by the Company or delivered to customers on
or prior to the date hereof, nor have the Company or Seller received any
notices from any person threatening any such claim, except for product returns
in the ordinary course of business which in the aggregate do not have a
Material Adverse Effect. All product warranties extended by the Company are in
compliance with applicable law.
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3.22 Tax Matters. (a) For purposes of this Agreement the terms "Tax" and
"Taxes" shall mean and include any and all Federal, state, local, foreign or
other taxes, assessments, Social Security obligations, deficiencies, fees,
export or import duties, or other governmental charges, including, without
limitation, income, gross receipts, ad valorem, value added, excise, real or
personal property, sales, use, license, and franchise taxes and any installment
payment for taxes and contributions or other amounts determined to be payable
in the nature of a Tax with respect to compensation paid to directors,
officers, employees or independent contractors, from time to time imposed by or
required to be paid by the Company to any governmental authority including
penalties and additions to tax thereon, penalties for failure to file a return
or report, and interest on any of the foregoing) and any amount payable by the
Company pursuant to any tax-sharing agreement or similar agreement with respect
to any of the foregoing.
(b) All returns and reports relating to Taxes or otherwise
required under applicable tax laws which were required to be filed by or with
respect to the Company on or before the date hereof (after giving effect to
applicable extensions) have been duly and timely filed and all such returns and
reports are complete and correct in all material respects. All Taxes imposed on
or with respect to the Company which have become due and payable on or before
the date hereof (including, but not limited to, estimated payments of Federal
income taxes) have been paid in a timely manner by the Company and there is no
liability (and no basis for any liability) for Taxes with respect to the
Company which has not (been in the case of Taxes which have become due and
payable) paid or (in the case of Taxes which are not yet due and payable)
accrued on the books of the Company. Except as set forth on Schedule 3.22(b)
hereto, there are no actions or proceedings which are currently pending or, to
the best of Seller's and the Company's knowledge, threatened against the
Company by any governmental authority for the assessment or collection of
Taxes; no claim for the assessment or collection of Taxes has been asserted or,
to the best of Seller's and the Company's knowledge, threatened against the
Company; and there are no matters under discussion by the Company or Seller
with any governmental authority regarding claims for the assessment or
collection of Taxes against the Company. There are no agreements, waivers or
applications by the Company for an extension of time for the assessment or
payment of any Taxes. There are no Tax liens on any of the assets of the
Company (other than any lien for current Taxes not yet due and payable). True
and complete copies of all Tax returns, reports and other Tax filings of the
Company which have been filed for any periods since January 31, 1989 will be
provided to Buyer upon request.
(c) All Federal, state and local income tax returns of the
Company with respect to the taxable period through the year ended January, 1987
have been examined and closed.
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(d) Except as set forth in Schedule 3.22(d), within the past
ten years, the Company has not been a member of any affiliated group of
corporations (as defined in section 1504(a) of the Code) which has filed
consolidated Tax returns. For purposes of this Section 3.22(d), the term
"Company" shall be deemed to include the Company, any subsidiaries of the
Company or any predecessors of the Company or any of its subsidiaries.
(e) The Company has not made, is not obligated to make, and is
not a party to any agreement that under any circumstances could obligate it to
make payments the deductibility of which would be prohibited under section 280G
of the Code.
(f) Except as set forth in Schedule 3.22(f), the Company has
not taken any action which would have the effect of deferring its tax liability
from any taxable period ending on or before the Closing Date to any taxable
period ending after the Closing Date, except for ordinary tax planning of the
Company consistent with its historical practices in the ordinary course of
business.
(g) The Company has at no time during the five (5) years
preceding the date of this Agreement been a "United States real property
holding corporation," within the meaning of section 897(c)(2) of the Code, and
the Shares do not constitute "United States real property interests," within
the meaning of section 897(c)(1) of the Code.
(h) The Company has not, with regard to any assets or property
held, acquired or to be acquired by the Company, filed a consent to the
application of section 341(f) of the Internal Revenue Code of 1986, as amended
(the "Code").
(i) The Company is not a party to any Tax sharing, Tax
allocation, Tax indemnity or other similar agreement.
3.23 Insurance. Schedule 3.23 hereto sets forth a complete and correct
list and brief summary description of all insurance policies carried by, or
covering, the Company with respect to its business. Complete and correct copies
of each such policy will be made available to Buyer upon request. All such
policies are in full force and effect, and no notice of cancellation has been
given with respect to any such policy. All premiums due thereon have been paid
in a timely manner. Except as set forth on Schedule 3.23, there are no pending
claims or to the best knowledge of Seller and the Company, threatened claims,
under any of the Company's insurance policies.
3.24 Minute Books; Stock Record Books. True and correct copies of the
Company's minute books and stock record book have been provided to Buyer prior
to the date hereof.
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The minute books of the Company contain true and complete originals or copies
of all minutes of meetings of and actions by the stockholders, Board of
Directors and all committees of the Board of Directors of the Company, and
accurately reflect in all material respects all corporate actions of the
Company which are required by law to be passed upon by the Board of Directors
or shareholders of the Company. The stock record book accurately reflects all
transactions in shares of the Company's stock.
3.25 Brokers' or Finders' Fees. No agent, broker, investment banker, or
other person or firm acting on behalf of Seller is or will be entitled to any
broker's or finder's fee or any other commission or similar fee directly or
indirectly from any of the parties in connection with any of the transactions
contemplated by this agreement.
3.26 Material Customers and Suppliers. (a) Schedule 3.26(a) sets forth a
complete and correct list of the ten (10) largest customers of the Company in
terms of amounts invoiced to such customers during the fiscal year of the
company ended January 27, 1996), and a similar list for the nine month period
ending October 26, 1996 (each, a "Material Customer") showing the total amount
invoiced to each such customer for the period in question. Except as set forth
and described in Schedule 3.26(a), no Material Customer has given the Company
any notice terminating, suspending or reducing in any material respect, or
specifying an intention to terminate, suspend or reduce in any respect in the
future, or otherwise reflecting an adverse change in, the business relationship
between such customer and the Company; and there has not been any adverse
change in the business relationship of the Company with any such customer since
the date of the 1996 Financial Statements. No customer other than a Material
Customer accounted for more than five percent (5%) of the Company's gross sales
during the past three fiscal years.
(b) Schedule 3.26(b) sets forth a complete and correct list of
the ten largest suppliers of the Company in terms of amounts purchased from
such suppliers during the fiscal year of the Company ended January 27, 1996),
and a similar list for the nine month period ending October 26, 1996 (each, a
"Material Supplier") showing the total amount purchased from each such Material
Supplier for the period in question. Schedule 3.26(b) also correctly identifies
all current outstanding purchase orders of the Company for goods or services
with an aggregate value of $100,000 or more. Except as set forth in Schedule
3.26(b), no supplier identified in Schedule 3.26(b) has given the Company any
notice terminating, suspending or reducing in any respect, or specifying an
intention to terminate, suspend or reduce in any respect in the future, or
otherwise reflecting an adverse change in, the business relationship between
such supplier and the Company and there has not been any adverse change in the
business relationship of the Company with any such supplier since the date of
the 1996 Financial Statements.
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3.27 Bank Accounts; Powers of Attorney. Schedule 3.27 sets forth a
complete and correct list showing: (i) all banks in which the Company maintains
a bank account or safe deposit box (collectively, "Bank Accounts"), together
with, as to each such Bank account, the account number, the names of all
signatories thereof and the authorized powers of each such signatory and, with
respect to each such safe deposit box, the number thereof and the names of all
persons having access thereto; and (ii) the names of all persons holding powers
of attorney from the Company. True and correct copies thereof have been
delivered to Buyer prior to the date hereof.
3.28 Books and Records. Except as set forth on Schedule 3.28, all of the
records, data, information, databases, systems and controls maintained,
operated or used by the Company or in connection with the conduct or
administration of its business (including all means of access thereto and
therefrom) are located on the premises of the Company and are under the
exclusive ownership or direct control of the Company.
3.29 Sales Representatives and Other Sales Agents/Sales Offices.
Schedule 3.29 hereto sets forth a complete and correct list of the names and
addresses of each sales representative or other sales agent currently engaged
by the Company who is not an Employee, and a summary description of the
territory assigned to each such person (noting whether such territory is
exclusive or non-exclusive). Schedule 3.29 also sets forth a list of all
agreements between the Company and any such person, complete and correct copies
of which agreements will be delivered to Buyer.
3.30 Transaction Expenses. The Company has not incurred or paid, and
will not prior to the Closing Date incur or pay, expenses relating to or
arising out of the sale of the Shares or the transactions contemplated by this
Agreement, including, without limitation, fees and expenses of counsel,
accountants, and investment bankers.
3.31 Schedules. Disclosures made in any Schedule apply to all of the
representations and warranties made in this Article III and shall not be
limited to any particular paragraphs in relation to which they may appear. No
schedule, certificate or certified information delivered or to be delivered by
the Company or Seller 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 any material fact necessary
to make the statements contained therein not misleading.
3.32 Reliance. The representations and warranties of the Company and the
Seller made in Article III of this Agreement are made by the Company and the
Seller with the knowledge and expectation that Buyer is relying thereon in
entering into, and performing its respective
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obligations under, this Agreement, and the same shall not be affected in any
respect whatsoever by any investigation heretofore or hereafter conducted by or
on behalf of Buyer, whether in contemplation of this Agreement or otherwise.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization and Corporate Power. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and is duly qualified to do business as a foreign corporation and is
in good standing in all jurisdictions where the failure so to qualify would
have a material adverse effect on Buyer. Buyer has full corporate power and
authority to own, lease and operate the properties and assets which it
currently owns, leases or operates and to carry on its business as presently
conducted or proposed to be conducted pursuant to existing plans. Buyer has
full corporate power and authority to execute, deliver and perform this
Agreement and to consummate the transactions contemplated hereby.
4.2 Corporate Authority; Absence of Conflicts. (a) The execution and
delivery of this Agreement, and the consummation of the transactions
contemplated hereby have been duly approved by the Board of Directors of Buyer,
and no other corporate actions on the part of Buyer are necessary to approve
and authorize the execution and delivery of this Agreement, or the consummation
of the transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by Buyer and constitutes a valid and legally
binding agreement of Buyer, enforceable in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
(b) The execution and delivery of this Agreement by Buyer,
consummation of the transactions herein contemplated and compliance with the
terms of this Agreement will not conflict with or violate any provision of the
Certificate of Incorporation or any By-Law of Buyer; nor do such actions
constitute a default of or require the consent or approval under any agreement
or instrument to which Buyer is a party or by which Buyer's assets are bound,
or require Buyer to obtain the approval or consent of any foreign, Federal,
state, county, local or other governmental or regulatory body, other than such
filings as are required under the HSR Act and except for the consent of Buyer's
lender(s), nor will such actions violate any applicable law, rule, regulation,
judgment, order or decree of any
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government, governmental instrumentality or court, domestic or foreign,
presently applicable to Buyer.
4.3 No Investigation. There exists no legal proceeding or investigation
by any governmental or regulatory authority, or any request for information or
action by any third party, known to Buyer which could result in the institution
of legal proceedings to prohibit or restrain the consummation or performance of
this Agreement or the transactions contemplated hereby.
4.4 Securities Act of 1933. Buyer is acquiring the Shares solely for
its own account and for the purpose of investment only and not with a view to
any distribution thereof. Buyer acknowledges that the Shares are not registered
under the Securities Act of 1933, as amended, and that such Shares may not be
transferred or sold except pursuant to the registration provisions of such Act
or pursuant to an applicable exemption therefrom and pursuant to applicable
state securities laws and regulations.
4.5 Reliance. The representations and warranties of Buyer made in this
Article IV are made by Buyer with the knowledge and expectation that the
Company and Seller are relying thereon in entering into, and performing their
obligations under, this Agreement, and the same shall not be affected in any
respect whatsoever by any investigation heretofore or hereafter conducted by or
on behalf of the Company or Seller, whether in contemplation of this Agreement
or otherwise.
4.6 Brokers' or Finders' Fees. No agent, broker, investment banker, or
other person or firm acting on behalf of Buyer is or will be entitled to any
broker's or finder's fee or any other commission or similar fee directly or
indirectly from any of the parties in connection with any of the transactions
contemplated by this Agreement.
4.7 Financing. Buyer has delivered to Seller prior to the date hereof
written commitment letters in respect of financing sufficient to pay at Closing
the amounts required to be paid under Sections 1.2 and 1.3 hereof and to cause
the issuance of one or more letters of credit equal to the outstanding balance
of the Company IRBs.
ARTICLE V
AGREEMENTS OF THE PARTIES RELATED TO TRANSACTIONS
5.1 Full Access. The Company shall afford to Buyer, its counsel,
accountants and other representatives reasonable access, during normal business
hours to, and the Company shall disclose and make reasonably available to them
(with the right to make copies), all of
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the books and records of the Company relating to the ownership of the
properties, operations, financial condition, assets, obligations and
liabilities of the Company, and the Company shall afford Buyer, its counsel,
accountants and other representatives with reasonable access to the facilities
and properties of the Company and to the officers and directors of the Company.
5.2 Preservation of Business. From the date hereof through the Closing
Date, the Company shall and the Seller shall cause the Company to conduct its
business consistent with past business practices, and use their best efforts to
preserve the Company's business organizations intact, keep available the
services of its present relationships with key employees, consultants and
agents, maintain its present material suppliers, customers, and others having
material business relationships with it and preserve their goodwill.
5.3 Negative Covenants of Seller. The Company and Seller covenant and
agree that from and after the date hereof through the Closing Date, the Company
shall not, except with the prior written consent of Buyer, or except as
directly related to the completion of the transactions contemplated by this
Agreement:
(a) Issue or sell any of its shares of capital stock or other
securities, or propose or effect a split or reclassification of its outstanding
capital stock or a recapitalization;
(b) Mortgage, pledge or otherwise encumber any properties or
assets, or dispose of, or make any agreement with respect to the mortgage,
pledge, sale, transfer or disposition of, any properties or assets except in
the ordinary course of business consistent with past practice;
(c) Make any capital commitment or expenditure of more than
$250,000, in the aggregate, or incur or become liable for any other obligation
or liability except obligations or liabilities in the ordinary course of
business consistent with past practice;
(d) Declare or pay any dividends, whether in cash, securities
or other property or distribute any assets to Seller or purchase, redeem or
acquire any shares of capital stock;
(e) Adjust in any way, either directly or indirectly, the
compensation or benefits paid or payable to (i) any officer, director, or
executive, or (ii) any other Employee of the Company if outside the ordinary
course of business consistent with past practice;
(f) Borrow or agree to borrow any funds or incur, or assume or
become subject to, whether directly or by way of guarantee or otherwise, any
obligation or liability
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(absolute or contingent) except (i) borrowings from Seller for working capital
purposes in the ordinary course of business consistent with past practices and
(ii) liabilities or obligations incurred in the ordinary course of business
consistent with past practices;
(g) Pay, discharge or satisfy any claim, liability or
obligation (absolute, accrued, contingent or otherwise), other than the
payment, discharge or satisfaction in the ordinary course of business and
consistent with past practice of liabilities or obligations reflected or
reserved against in the Latest Balance Sheet or incurred in the ordinary course
of business and consistent with past practice since the date of the Latest
Balance sheet;
(h) Prepay any obligation having a fixed maturity of more than
90 days from the date such obligation was issued or incurred except in the
ordinary course of business;
(i) Pay, loan or advance any amount to, or sell transfer or
lease any properties or assets to, or enter into any agreement or arrangement
with, any of its officers or directors or any affiliate, associate or near
relative of any of its officers or directors;
(j) Except in the ordinary course of business consistent with
past practice, write down (or write up) the value of any inventory or write off
as uncollectible any notes or accounts receivable;
(k) Cancel any debts or waive any claims or rights of
substantial value, other than in the ordinary course of business consistent
with past practice or cancel or terminate any Material Contract or other
material agreement;
(l) Dispose of or permit to lapse any rights to the use of any
patent, trademark, trade name, copyright or other intangible asset, or dispose
of or disclose to any person any trade secret, formula, process or know-how not
theretofore a matter of public knowledge;
(m) Change any of the banking or safe deposit arrangements
described in Schedule 3.27 hereto, except in the ordinary course of business;
(n) Grant or extend any power of attorney or act, as guarantor,
surety, co-signer, endorser, co-maker, indemnitor or otherwise, in respect of
the obligation of any person, corporation, partnership, joint venture,
association, organization or other entity;
(o) make any change in financial or tax accounting methods,
principles or practices or make or cause to be made any change in any elections
on Tax returns of the Company, unless required by generally accepted accounting
principles or applicable law;
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(p) extend credit in the sale of products, collection of
receivables or otherwise, other than in the ordinary course of business
consistent with past practices (provided that refraining from pursuing
collection of delinquent accounts shall not be deemed to be extending credit);
(q) fail to maintain its books, accounts and records in the
usual, regular and ordinary manner on a basis consistent with prior years;
(r) adopt or amend in any material respect any collective
bargaining agreement or Employee Benefit Plan other than as required by law;
(s) grant to any executive officer any increase in compensation
or in severance or termination pay, grant any severance or termination pay, or
enter into to any employment agreement with any executive officer, except as
may be required under employment or termination agreements in effect on the
date of this Agreement; or
(t) agree, whether in writing or otherwise, to do any of the
foregoing.
5.4 Third Party Consents. Seller and the Company shall use their best
efforts to obtain at the earliest practicable date all consents of third
parties necessary to the consummation of the transactions contemplated hereby,
the absence of which would have a Material Adverse Effect, and will provide to
Buyer copies of each such consent promptly after it is obtained.
5.5 Schedules Update. From time to time after the date hereof, but in
any event not later than the Closing Date, the Company will promptly supplement
or amend the Schedules hereto with respect to any matter which, if it existed
or occurred on or prior to the date hereof, would have been required to be set
forth or described in any such Schedule or which is necessary to correct any
information set forth in any such Schedule which has been rendered inaccurate
thereby; provided, however, that no supplement or amendment to any such
Schedule shall have any effect for the purpose of determining whether any
breach of this Agreement existed prior to such supplement or amendment or
whether the condition set forth in Section 7.1 of this Agreement has been
satisfied.
5.6 Tax Matters. (a) Seller shall prepare and file or cause to be
prepared and filed on or before the relevant due dates therefor (after giving
effect to all applicable extensions) all Federal, state, local and foreign Tax
returns and reports of the Company attributable to any taxable period ending on
or prior to the Closing Date, accompanied by the full and complete payment of
all Taxes due with respect to such periods. Any Tax refunds received by the
Company attributable to periods prior to the Closing shall belong to Seller and
shall be
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promptly remitted to Seller upon receipt, reduced by any increase in Taxes in a
period ending after the Closing Date which is directly attributable to Seller's
claim for a refund.
(b) Buyer shall prepare and file or cause to be prepared and
filed on or before the relevant due dates therefor (after giving effect to all
applicable extensions) all Federal, state, local and foreign Tax returns and
reports of the Company attributable to any taxable periods ending after the
Closing Date, accompanied by the full and complete payment of all Taxes due
with respect to such periods.
(c) During the period between the Closing Date and the Tax
Claim Termination Date (as hereinafter defined), Seller shall provide
reasonable access during normal business hours to the books and records of
Seller, including work papers, to the extent such access is reasonably
requested in writing in advance by the Buyer for purposes of responding to any
inquiry, audit or proceeding involving the Tax Returns of the Company for the
periods ending prior to the Closing Date. After the Closing, Seller shall make
available to Buyer all work papers, records of estimated tax payments and Tax
Returns as have been used or filed for the fiscal year of the Company
commencing prior to the Closing.
(d) Buyer shall not, and after the Closing shall not permit the
Company to, amend any Tax return, report or filing with respect to Tax periods
prior to the Closing without Seller's prior written consent or as required by
applicable law. To the extent permitted by applicable law, at Seller's request
and expense, Buyer shall, and shall cause the Company to (or in the case of
Seller's consolidated Tax Return, Seller shall), file an amendment to a Tax
Return, report or filing made with respect to Tax periods prior to the Closing,
provided that Seller shall pay any additional Taxes resulting from such amended
filing, and provided further that Seller shall be entitled to receive any
refund resulting from such amended filing, reduced by any increase in Taxes
paid by the Company which is directly attributable to Seller's claim for a
refund. Following the Closing, Buyer shall not, and shall not permit the
Company to, make any elections or changes in accounting methods if such
elections or changes will materially adversely affect the Tax liabilities of
the Company or the Seller for a Tax period ending on or prior to the Closing
Date, except as required by law after written notice to Seller.
(e) The parties agree not to make any election or deemed
election under Section 338(g) or 338(h)(10) of the Code or any similar
provision under state law with respect to the transactions contemplated by this
Agreement.
5.7 Transfer Taxes. Buyer shall be responsible for, and shall pay or
reimburse promptly when and if due, all applicable sales, transfer, excise,
use, documentary stamps or
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any other similar Taxes which may be imposed on or made payable in any
jurisdiction, or by any authority, in connection with or arising from the
consummation of the transactions contemplated by this Agreement. Buyer shall
prepare and file all appropriate sales, transfer, excise, use, documentary
stamps and other tax returns and other documents due in connection with the
transactions contemplated hereunder. For purposes of paying any New York real
property transfer tax resulting from the transactions contemplated hereby, the
parties agree that the amount of the Purchase Price allocable to the Company's
Real Property shall be the book value thereof at the Closing Date.
5.8 Best Efforts and Certain Filings. Subject to the terms and
conditions of this Agreement, Buyer and Seller will use their best efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary or desirable to consummate the transactions contemplated by
this Agreement and to maintain the accuracy of their representations and
warranties hereunder. Each of Seller and the Company will not take, agree to
take or knowingly permit to be taken any action to do or knowingly permit to be
done anything in the conduct of the business of the Company, or otherwise,
which would be contrary to or in breach of any of the terms or provisions of
this Agreement. Buyer and Seller agree to make their respective filings under
the HSR Act on or prior to January 9, 1997.
5.9 Industrial Revenue Bonds. Seller agrees to cooperate with Buyer in
Buyer's efforts to ensure that the 1985 City of Pine Bluff Industrial Revenue
Bonds and the 1996 City of El Paso Industrial Revenue Bonds issued on behalf of
the Company (collectively, the "Company IRBs") will remain in force and effect
following the Closing, upon the terms and conditions as presently are in effect
but without any liability of Seller subsequent to the Closing. The parties
shall use their best efforts to secure Seller's release from any liability
under the Company IRBs after the Closing.
5.10 Insurance. All insurance (other than group health and workers'
compensation programs) covering the property, and employees of the Company is
provided through Seller, and the Company is charged by Seller for its insurance
cost. All such insurance coverage provided through policies maintained by
Seller shall terminate at the Closing, and any return premiums received upon
termination shall be retained by or paid over to Seller upon receipt. Buyer
shall be responsible, at the cost of Buyer or the Company, for procuring
replacement insurance coverage following the Closing.
5.11 Workers' Compensation. Workers' compensation and disability
benefits for Employees of the Company are provided through a self-insured plan
sponsored by the Seller and administered by a third-party administrator.
Coverage for workers' compensation
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benefits for Employees of the Company under Seller's self-insured plan shall be
terminated as of the Closing. On or prior to the Closing, Buyer shall make all
necessary arrangements (including, but without limitation, posting one or more
surety bonds and/or letters of credit in amounts required by applicable
regulations) to implement its own self-insured workers' compensation program
for Employees of the Company or to procure an insurance policy providing
workers' compensation benefits for Employees of the Company. From and after the
Closing, neither Seller nor Seller's self-insured workers' compensation program
shall have any further obligations with respect to workers' compensation or
disability benefits or claims by Employees or Former Employees of the Company,
including, without limitation, claims or benefits arising out of injuries or
occurrences prior to or after the Closing.
5.12 Use of Seller's Name. Within 30 days after the Closing, Buyer shall
cause the Company to discontinue use of and destroy any signs, letterhead,
promotional materials, business forms and other documents bearing the name or
logo of Seller or which in any way indicate a continuing affiliation between
the Company and Seller.
5.13 Third-Party Offers. Seller and the Company shall not, nor shall
Seller or the Company authorize or permit any subsidiary or any of its or a
subsidiary's respective officers, directors, employees, investment bankers,
attorneys or other advisors or representatives to, (i) solicit or initiate any
Competitive Proposal (as defined below) or (ii) participate in any discussions
or negotiations regarding, or furnish to any person any information with
respect to, a Competitive Proposal. For purposes of this Agreement,
"Competitive Proposal" means a proposal from any person to acquire all or a
substantial part of the assets of the Company or more than 50% of the equity
securities of the Company or any merger, consolidation or business combination
involving the Company, other than the transactions contemplated by this
Agreement.
5.14 Xxxxxxx Letter Agreement. At the Closing, the parties shall execute
and deliver the Letter Agreement attached hereto as Exhibit E.
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
The obligations of Seller hereunder are subject to the fulfillment
of the following conditions, any one of which may be waived in writing by
Seller:
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6.1 Representations and Covenants. All representations and warranties
of Buyer contained herein shall be true and correct in all material respects on
and as of the Closing Date with the same force and effect as though made on and
as of the Closing Date. Buyer shall have performed and complied with all
covenants and agreements contained herein and required to be performed or
complied in all material respects with by it on or prior to the Closing Date.
6.2 Closing Certificate. Buyer shall have delivered to Seller a
certificate signed by its President or a Vice President, dated as of the
Closing Date, to the effect set forth in Section 6.1.
6.3 Legal Opinion. Seller shall have received the opinion of Weil,
Gotshal & Xxxxxx LLP, counsel for Buyer, dated as of the Closing Date, in
substantially the form attached hereto as Exhibit A.
6.4 Injunction. No order or decree prohibiting or restraining the
consummation of this Agreement shall have been issued by any court or
governmental or regulatory body.
6.5 Lender's Consent. Seller shall have received the consent of its
senior lenders to the consummation of the transactions contemplated hereby.
6.6 HSR Act. The waiting period under the HSR Act shall have expired or
been earlier terminated without objection of the U.S. Department of Justice.
6.7 Company IRBs. If the parties shall have been unable to secure
Seller's release from liability pursuant to Section 5.9, Buyer shall (or shall
have caused the Company to) have furnished one or more letters of credit or
otherwise have provided indemnification reasonably satisfactory to Seller to
protect Seller against any liability after the Closing Date in connection with
the Company IRBs.
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
The obligation of Buyer to enter into and complete the Closing is
subject to the fulfillment on or before the Closing Date of each of the
following conditions, any one of which may be waived in writing by Buyer:
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7.1 Representations and Covenants. All representations and warranties
of Seller contained herein shall be true and correct in all material respects
on and as of the Closing Date with the same force and effect as though made on
and as of the Closing Date. Seller shall have performed and complied in all
material respects with all covenants and agreements contained herein and
required to be performed or complied with by it on or prior to the Closing
Date.
7.2 Closing Certificate. Seller shall have delivered to Buyer a
certificate signed by it or on its behalf dated as of the Closing Date, to the
effect set forth in Section 7.1.
7.3 Legal Opinion. Buyer shall have received the favorable opinion of
Xxxxxxxxx X. Xxxxxxxxx, General Counsel for the Company and Seller dated as of
the Closing Date, in substantially the form attached hereto as Exhibit B.
7.4 Injunction. No order, decree, statute, rule or regulation
prohibiting or restraining the consummation of this Agreement shall have been
issued by any court or governmental or regulatory body.
7.5 Material Adverse Change. The Company shall not have suffered any
material adverse change in its business or financial condition since November
23, 1996, including, without limitation (i) any loss or notice of loss of any
Material Customer (other than to Buyer or one of its affiliates) or Material
Supplier as those terms are herein defined, or (ii) any loss on account of
fire, flood, accident, strike or other calamity which has or reasonably may
have a Material Adverse Effect.
7.6 Directors Resignations. Buyer shall have received the written
resignation of each of the directors of the Company effective as of the Closing
Date.
7.7 FIRPTA Affidavit. Buyer shall have received an affidavit from the
Seller in the form of Exhibit C attached hereto that the Company is not, and
has not been at any time during the five (5) year period preceding the date of
this Agreement been, a United States real property holding corporation under
the Foreign Investment in Real Property Tax Act of 1980.
7.8 Bank Accounts/Powers of Attorney. Any changes of signatories to
Company bank accounts or cancellation of powers of attorney requested by Buyer
shall have been made effective as of the Closing.
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7.9 HSR Act. The waiting period under the HSR Act shall have expired or
been earlier terminated without objection of the U.S. Department of Justice.
7.10 Selected Material Contracts and Permits, Etc. The completion of the
transactions contemplated at Article I of this Agreement shall not impair the
ability of the Company to enforce or continue to receive the benefits provided
to it under (i) any contract, agreement or arrangement described at paragraph
(i), (ii), (iv) or (viii) of subsection 3.14(a) ("Selected Material
Contracts"), or (ii) any material permits, licenses, exemptions, consents,
authorizations and approvals ("Material Permits"), upon the consummation of the
transactions contemplated by this Agreement, and all consents necessary to
preserve the Company's continuing ability to enforce or receive the benefits
pursuant to each Selected Material Contract and Material Permit shall have been
obtained by the Company or Seller.
7.11 Seller Indebtedness. Seller shall have caused the Company to be
released from any liability (as a guarantor, co-maker or otherwise) with
respect to the indebtedness of Seller.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
8.1 Survival of Representations and Warranties. All representations,
warranties, obligations, covenants and agreements of the parties contained
herein, or in any Schedule or Exhibit hereto, and the rights of the parties to
seek indemnification with respect thereto, shall survive the Closing and,
except in respect of any claims for indemnification as to which notice shall
have been duly given prior to the relevant expiration date set forth below (or
in the case of the representations set forth in Section 3.3, or claims for
indemnification arising therefrom, which shall have an indefinite duration),
shall expire on the following dates:
(a) in the case of Buyer Indemnity Claims as defined in Section
8.2 below based in whole or in part on a breach of the representations and
warranties set forth in Section 3.19 or 3.22 ("Tax/ERISA Claims"), the day (the
"Tax Claim Termination Date") which is the forty-fifth (45th) day following the
third (3rd) anniversary of the earliest date on which all of the Company's Tax
returns for its fiscal year ending on the Closing Date have been duly filed;
provided, however, that if any governmental entity shall commence an audit of
the Company on or before the Tax Claim Termination Date with respect to any
taxable periods of the Company ending on or before the Closing Date, Buyer
shall have the right to assert a Buyer Indemnity Claim hereunder at any time on
or before the Tax Claim Termination Date for the estimated amount of all Tax
Liabilities and Costs (as those terms are hereinafter defined) which could
potentially be assessed or otherwise be asserted by such
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governmental entity in connection with such audit and, provided further, that
in the case of Tax Liabilities described in Section 8.5(c)(ii), the Tax Claim
Expiration Date shall be the forty-fifth day following the expiration of the
applicable statute of limitations (including extensions) for the assessment of
Taxes for the respective consolidated, combined, affiliated Tax Returns;
(b) in the case of all other Buyer Indemnity Claims, the later
of May 31, 1998 or the end of the sixteenth calendar month after the Closing
Date; and
(c) in the case of any Seller Indemnity Claim, the later of May
31, 1998 or the end of the sixteenth calendar month after the Closing Date.
8.2 Seller's Agreement to Indemnify. Seller shall defend, indemnify and
hold harmless Buyer and the Company from and against any Buyer Indemnity Claims
arising under this Agreement. For purposes of this Agreement, the term "Buyer
Indemnity Claim" shall mean (i) any Tax Liability or Cost (as defined in
Section 8.5), or (ii) any loss, damage, deficiency, claim, liability,
obligation, suit, action, proceeding, demand, assessment, judgment, fee, cost
or expense of any nature whatsoever (including, without limitation, all
interest and penalties in connection with the foregoing and all out-of-pocket
costs and expenses incident to the investigation, settlement or disposal of any
of the foregoing, including, without limitation, reasonable fees and
disbursements of accountants and counsel) arising out of, based upon or
resulting from (A) any breach of any representation and warranty of the Company
or Seller which is contained in this Agreement or the certificate delivered
under Section 7.2 of this Agreement, (B) any breach or nonfulfillment of, or
any failure to perform, any of the covenants, agreements or undertakings of the
Company or the Seller which are contained in or made pursuant to this
Agreement, and (C) the termination of the CAC Stock Purchase Agreement;
provided, however, that Buyer shall be entitled to indemnification for Buyer
Indemnity Claims under subsection (ii)(A) (other than under Sections 3.3., 3.25
and 3.30) of this Section 8.2 only to the extent that the aggregate amount of
all Buyer Indemnity Claims which have been Definitively Resolved (as that term
is hereinafter defined) in favor of Buyer under the terms of this Agreement
shall exceed $1,000,000 and only to the extent of such excess. Any payments
made by Seller hereunder with respect to a Buyer Indemnity Claim shall be
deemed to be a reduction of the Purchase Price.
8.3 Buyer's Agreement to Indemnify. Buyer hereby agrees to indemnify
and hold the Seller harmless from, and to reimburse the Seller for any Seller
Indemnity Claims (as that term is hereinafter defined) arising under the terms
and conditions of this Agreement. For purposes of this Agreement, the term
"Seller Indemnity Claim" shall mean any loss, damage, deficiency, claim,
liability, obligation, suit, action, proceeding, demand, assessment,
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judgment, fee, cost or expense of any nature whatsoever (including, without
limitation, all interest and penalties in connection with the foregoing and all
out-of-pocket costs and expenses incident to the investigation, settlement or
other disposal of any of the foregoing, including, without limitation,
reasonable fees and disbursements of accountants and counsel) arising out of,
based upon or resulting from (i) any breach of any representation and warranty
of Buyer which is contained in this Agreement or any certificate or other
instrument or document delivered pursuant hereto, or (ii) any breach or
nonfulfillment of, or failure to perform, any of the covenants, agreements or
undertakings of Buyer contained in or made pursuant to the terms and conditions
of this Agreement.
8.4 Notification of Claims and Definitive Resolutions. (a) Subject to
the provisions of Section 8.5 below, upon the occurrence of an event which
constitutes or is claimed to constitute a Buyer Indemnity Claim or a Seller
Indemnity Claim, as applicable, such party shall provide the indemnifying party
or parties with prompt written notice of such event and shall otherwise make
available to the indemnifying party all relevant information which is material
to the claim and which is in the possession of the indemnified party but in no
event later than the time period set forth in Section 8.1. (For all purposes of
this Section 8.4, in the case of Seller "indemnified party" or "indemnifying
party" refers to Seller and not the Company.) Following receipt of a notice of
any such indemnity claim asserted under this Section 8.4(a), the indemnifying
party shall have sixty (60) days (or such longer period as may be agreed in
writing by the indemnified party) to make such initial investigation of the
claim as the indemnifying party deems necessary or desirable. For the purpose
of such investigation, the indemnified party shall make available to the
indemnifying party any books and records relied upon by it to substantiate the
claim. At or prior to the expiration of such sixty-day period (or any extension
thereof which shall have been agreed to by the indemnified party in writing),
the indemnifying party shall notify the indemnified party as to whether or not
it disputes the indemnified party's claim in whole or in part.
(b) If the indemnifying party does not dispute the indemnified
party's claim, the two shall execute a memorandum (hereinafter referred to as a
"Resolution Memorandum"), in the form of Exhibit D hereto, which shall recite
the amount of the Buyer Indemnity Claim or Seller Indemnity Claim. If the
indemnifying party notifies the indemnified party within 60 days that it
disputes such claim, then, for a period not to exceed 30 days following receipt
of such notice from the indemnifying party, the parties shall confer with one
another and endeavor in good faith to resolve any dispute regarding the claim.
If the parties reach an agreement regarding the existence and amount of the
Buyer Indemnity Claim or Seller Indemnity Claim, the parties shall execute a
Resolution Memorandum as aforesaid.
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(c) For purposes of this Agreement, a Buyer Indemnity Claim or
Seller Indemnity Claim shall be deemed to have been "Definitively Resolved"
when (i) a Resolution Memorandum has been signed by Buyer and Seller; or (ii)
there is a decision, judgment, decree or other order by any court of competent
jurisdiction, which disposes of all or part of a Buyer Indemnity Claim or
Seller Indemnity Claim, which decision, judgment, decree or other order is not
appealable or with respect to which the time for appeal has expired, or (iii) a
period of sixty (60) days has expired since notice of a Buyer Indemnity Claim
or Seller Indemnity Claim has been delivered to the indemnifying party and the
indemnifying party has not notified the indemnified party that it disputes such
claim. Upon the Definitive Resolution of a Buyer Indemnity Claim in favor of
Buyer, the amount of such claim shall be paid by Seller to Buyer within thirty
(30) days, subject to the provisions of Section 8.2(ii) hereinabove.
(d) If any indemnity claim asserted under Section 8.4(a)
involves the claim of any third party (a "Third-Party Claim"), the indemnifying
party shall have the right to elect to join in the defense, settlement,
adjustment or compromise of any such Third-Party Claim, and to employ counsel
to assist such indemnifying party in connection with the handling of such
claim, at the sole expense of the indemnifying party, and no such claim shall
be settled, adjusted or compromised, or the defense thereof terminated, without
the prior consent of the indemnifying party unless and until the indemnifying
party shall have failed, after the lapse of a reasonable period of time, but in
no event more than thirty (30) days after written notice to it of the
Third-Party Claim, to join in the defense, settlement, adjustment or compromise
of the same. An indemnified party's failure to give timely notice or to furnish
the indemnifying party with any relevant data and documents in connection with
any Third-Party Claim shall not constitute a defense in part or in whole) to
any claim for indemnification by such party, except and only to the extent that
such failure shall result in any material prejudice to the indemnifying party.
If so desired by any indemnifying party, such party may elect, at such party's
sole expense, to assume control of the defense, settlement, adjustment or
compromise of any Third-Party Claim, insofar as such claim relates to the
liability of the indemnifying party, provided that such indemnifying party
shall obtain the consent of all indemnified parties before entering into any
settlement, adjustment or compromise of such claim, or ceasing to defend
against such claim, if as a result thereof, or pursuant thereto, there would be
imposed on an indemnified party any liability or obligation not covered by the
indemnity obligations of the indemnifying parties under this Agreement
(including, without limitation, any injunctive relief or other remedy).
8.5 Special Indemnification for Tax Liabilities. (a) Seller shall
indemnify and hold harmless Buyer, the Company and each Affiliate (as that term
is hereinafter defined) of Buyer, from and against the payment of any and all
Tax Liabilities (as that term is
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hereinafter defined). Except as may otherwise be expressly provided for in this
Agreement, the term "Buyer Indemnity Claims" shall be deemed to include all
claims for Tax Liabilities.
(b) For purposes of this Section 8.5, the term "Affiliate"
shall mean any corporation or other entity which is, directly or indirectly,
controlled by Buyer, or any successor in interest to, or transferee of, Buyer,
as the case may be, as determined from time to time, including, without
limitation, the Company and any successor in interest to, the Company.
(c) For purposes of this Agreement, the term "Tax Liabilities"
shall mean and include (i) any and all liabilities for Taxes which are or shall
be incurred by the Company (or by Buyer with respect to the Company) with
respect to any taxable year or any other period prior to the Closing, other
than Taxes for which provision was made on the Closing Balance Sheet, and (ii)
any and all Taxes of any member of an affiliated, consolidated, combined or
unitary group (other than Taxes allocable to the Company) of which the Company
is or was a member on or prior to the Closing Date by reason of the liability
of the Company pursuant to Treas. Reg. Section 1.1502-6(a) or any similar
state, local or foreign law.
(d) In the event the indemnitee receives notice of a claim made
by any Federal, state, local, foreign or other governmental authority which, if
successful, would result in an obligation to indemnify pursuant to this Section
8.5 (hereinafter, referred to as a "claim"), the indemnitee shall give prompt
notice to Seller of the same in writing but in no event later than the time
period specified in Section 8.1(a)), specifying in reasonable detail the basis
of such claim, and the facts pertaining thereto, and shall not make payment of
the Taxes claimed for at least 30 days after the giving of such notice. Seller
shall have the right to control the defense of any such claim, subject in all
cases to its obligation to indemnify Buyer and the Company with respect to Tax
Liabilities. If Seller wishes the indemnitee to contest such claim, Seller
shall, within 30 days after notice by the indemnitee to Seller of such claim,
or, if earlier, the period required by law, request that such claim be
contested. If the indemnitee agrees to do so, it shall contest the claim;
provided, if the indemnitee so requests, Seller shall first furnish an opinion
of independent tax counsel selected by Seller and reasonably satisfactory to
the indemnitee, that there is a reasonable defense to the claim, and Seller
shall agree to pay the indemnitee from time to time on demand, an amount which
shall be equal to all costs and expenses which the indemnitee may incur in
connection with contesting such claim, including, without limitation, fees and
disbursements of attorneys, accountants and other experts (hereinafter referred
to as the "Costs"). If indemnitee chooses not to contest the claim, Seller
shall have the right to do so; provided, that Buyer shall (and shall cause the
Company to) cooperate with and assist Seller, at Seller's expense, in
contesting such claim. If any such claim shall be made by the IRS or other
governmental
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authority and Seller shall have requested the indemnitee to contest such claim,
as above provided, and shall have duly complied with all of the terms of this
Section 8.5, the indemnitee hereby agrees to consult with Seller in good faith
with respect to the actions to be taken by the indemnitee in connection with
contesting any such claim; provided, however, that in determining the actions
to be taken by the indemnitee, the overall tax and other interests of the
indemnitee and its Affiliates shall be taken into account; and provided further
that; (i) the indemnitee may either pay the Taxes claimed and xxx for a refund
in the appropriate court of proper jurisdiction, as the Seller shall elect, or
contest such claim without first paying the Taxes claimed, and (ii) if the
Seller requests the indemnitee to pay the taxes claimed and then seek a refund,
the indemnitee will be provided with sufficient funds by Seller, on an
interest-free basis, to pay the full amount of such Taxes. The indemnitee
agrees to notify Seller in a timely manner in writing of any action taken or
proposed to be taken from time to time by the governmental authority with
respect to such claim, and to make available to Seller any relevant information
relating to such claim which may be particularly within the knowledge of Buyer
or any Affiliate and to otherwise cooperate with Seller in good faith in order
to contest effectively any such claim. For the purpose of all dealings with
Buyer or other indemnitee hereunder, Seller shall act exclusively through one
designated counsel, and the indemnitee is hereby authorized by the Seller to
deal with such designated counsel.
(e) Any liability of the Seller under this Section 8.5 shall
become fixed upon a Final Resolution of the liability of the indemnitee and any
amounts due to Buyer or other indemnitee under this Section 8.5 shall be paid
within 30 days after such Final Resolution subject to the limitations in
Section 8.2. An indemnitee's failure to give timely notice or to provide copies
of documents or to furnish relevant data in connection with any such claim
shall not constitute a defense (in whole or in part) to such claim for
indemnification for such indemnitee, except to the extent such failure or delay
results in prejudice to Seller.
(f) For purposes of this Section 8.5, a "Final Resolution"
shall be deemed to occur with respect to a proposed or other adjustment when
(i) there is a decision, judgment, decree or other order by any court of
competent jurisdiction, which decision, judgment, decree or other order has
become final with respect to the indemnitee (i.e., all allowable appeals taken
pursuant to this Section 8.5 have been exhausted by either party to the
action), (ii) there is a closing agreement made under section 7121 of the Code
binding in respect of the indemnitee or other administrative settlement with
the IRS or other government authority, (iii) the time for instituting a claim
for refund in respect of the indemnitee has expired, or, if a claim was filed,
the time for instituting suit with respect thereto has expired or (iv) the
Taxes which are the subject of a proposed or other adjustment are paid, and,
pursuant to
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written agreement between Seller and Buyer or other indemnitee, no claim for
refund is filed, and no other contest of such proposed or other adjustment is
made.
(g) Upon a Final Resolution, the Seller shall become obligated
for any payment, as provided above (less any amounts already advanced to the
indemnitee as provided above), and the indemnitee shall become obligated to pay
to Seller any refund (including interest thereon, to the extent actually paid
by the relevant governmental authority) received or credited with respect to
such claim (plus any amounts advanced to the indemnitee, as provided above, not
depleted in satisfaction of the obligations of the Seller to the indemnitee).
The obligations of the indemnitee and the Seller shall first be set off against
each other and any difference owing by either party shall be paid within 30
days after such final determination.
(h) If any such claim referred to in subsection 8.5(d) hereof
shall be made by any Federal, state, local, foreign or other governmental
authority and Seller, after having received notice thereof, shall have failed
(i) to request the indemnitee to contest or not to contest such claim, as above
provided, or (ii) to comply with any of the other material terms of this
Section 8.3, Seller shall become obligated to pay the indemnitee upon a Final
Resolution, an amount which shall be equal to the Taxes which ultimately are
paid as a result of contesting such claim and, from time to time upon demand,
the costs which the indemnitee may incur in connection with contesting such
claim.
(i) In the event that Seller pays a Tax Liability pursuant to
this Section 8.5 which arises from the disallowance in one fiscal year of a
deduction or tax credit, which payment results in a reduction of the Federal or
state income tax liability of the Company (or the consolidated group of which
the Company is a member) for one of the first four (4) tax periods beginning
after the Closing Date ("a "Tax Recoupment"), Buyer or the Company shall pay to
the Seller an amount equal to the Tax Recoupment, within 30 days after Final
Resolution of all Buyer Indemnity Claims with respect to Tax Liabilities or,
with respect to Tax Recoupments arising during the fourth tax period beginning
after the Closing. within 30 days after the filing of the federal and state
income tax returns for such period.
8.6 Limitations on Indemnification. Notwithstanding anything in this
Agreement to the contrary, Seller shall have no obligation to indemnify the
Buyer or the Company for a Buyer Indemnity Claim to the extent the matter
giving rise to such claim (a) relates to any matter which is provided for,
reserved or otherwise taken into account in the Closing Balance Sheet, (b)
relates to any loss to the extent Buyer or the Company is covered by insurance,
(c) arises or is increased as a result of any change in the basis or method of
application or calculation of, or an increase in rates of, taxation after the
Closing Date or the passing of any legislation
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or any change in generally accepted accounting principles after the Closing
Date, or (d) arises or is increased as a result of a change in Environmental
Law after the Closing Date. The amount of any indemnification required to be
paid by Seller under this Article VIII shall be reduced by the amount by which
the Federal or state income tax of the Company (or the consolidated group of
which the Company is a member) is actually reduced due to a reduction of its
net income for the tax period in which the liability or obligation giving rise
to the indemnification is satisfied by the Company. In no event shall the
liability of Seller under this Article VIII exceed the Purchase Price (except
in the case of Tax Liabilities described in Section 8.5(c)(ii)).
8.7 Exclusive Remedy. After the Closing, the indemnification provisions
of this Agreement shall constitute the sole and exclusive remedy of Buyer for
any breach by Seller or Company of any representation or warranty or covenant
contained in this Agreement. Buyer shall not be entitled to assert against
Seller any claim for damages, indemnification or otherwise relating to the
transactions under this Agreement except pursuant and subject to the provisions
of this Article VIII or to the extent such claim is based on fraud. Without
limiting the generality of the foregoing, Buyer agrees that the rights accorded
to it by Section 8.2 are the sole and exclusive remedy against Seller with
respect to all liabilities under any Environmental Laws. Buyer (on its own
behalf and on behalf of the Company after the Closing) and its successors and
assigns hereby waive any right to seek contribution or other recovery from
Seller or any of its affiliates under any Environmental Law, and Buyer
unconditionally releases Seller from any and all claims, demands and causes of
actions that it may now have or in the future have against Seller for recovery
under any Environmental Law except pursuant to Section 8.2 hereof. After the
Closing, Seller and its successors and assigns hereby waive any right to seek
contribution or other recovery from the Company in connection with any
representation made jointly and severally hereunder by the Company and Seller
or any covenant made by the Company if Buyer is entitled to indemnification
under this Article for a breach or violation of any such representation or
covenant.
ARTICLE IX
CERTAIN COVENANTS
9.1 Access by Seller. The Company shall, from and after the Closing
Date, provide reasonable access to Seller (and to the Seller's Accountants for
purposes of preparation and audit of the Closing Balance Sheet and the
preparation or audit of the Tax returns of the Company for the period ending on
or prior to the Closing Date) during normal business hours, to the books and
records and personnel of the Company, to the extent that such access is
reasonably requested in writing in advance by Seller.
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9.2 Maintenance of Records. Buyer shall cause the Company to maintain
all books and records of the Company existing as of the Closing Date for a
period of ten years after the Closing and shall not destroy such books and
records during such period without giving Seller sixty (60) days prior written
notice.
ARTICLE X
MISCELLANEOUS
10.1 Expenses. Seller shall be responsible for the expenses which Seller
and the Company incur in connection with the transactions provided for herein
or contemplated hereby including, without limitation, the fees and expenses of
counsel, accountants and investment bankers, and Seller shall not cause or
permit the Company to pay or be liable for such costs. Buyer shall bear the
expenses which it incurs in connection with the transactions provided for
herein or contemplated hereby, including the fees and expenses of its counsel
and accountants. The fees for filing of pre-merger notification reports under
the HSR Act shall be paid by Buyer.
10.2 Brokers. Neither Buyer nor Seller nor the Company has employed a
finder or broker or other person entitled to a commission or fee in respect of
this Agreement and the transactions contemplated hereby.
10.3 Notices. Any notice, request, demand or other communication given
by any party under this Agreement (each a "notice") shall be in writing, may be
given by a party or its legal counsel, and shall be deemed to be duly given (i)
when personally delivered, or (ii) upon delivery by United States Express Mail
or similar overnight courier service which provides evidence of delivery, or
(iii) when five days have elapsed after its transmittal by registered or
certified mail, postage prepaid, return receipt requested, addressed to the
party to whom directed at that party's address as it appears below or another
address of which that party has given written notice to the other parties
hereto, or (iv) when transmitted by telex (or equivalent service), the sender
having received the answer back of the addressee, or (v) when delivered by
facsimile transmission if a copy thereof is also delivered in person or by
overnight courier. Notices of address change shall be effective only upon
receipt notwithstanding the provisions of the foregoing sentence.
(a) Notice to Buyer shall be sufficient if given to:
International Wire Group, Inc.
000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
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Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx
with copies to:
Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxx, Xx.
Xxxxx & Partners, Inc.
000 Xxxxx Xxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
(b) Notice to Seller or the Company (prior to Closing) shall be
sufficient if given to:
Oneida, Ltd.
Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxxxx X. Xxxxxxxxx, General Counsel
Facsimile: (000) 000-0000
10.4 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
assigns. This Agreement or any part thereof may not be assigned without the
prior written consent of the other party, which consent may be withheld in the
sole discretion of the other party; provided, however, this Agreement may be
assigned to any affiliate of Buyer but such assignment shall not relieve Buyer
of any of its obligations hereunder.
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10.5 Entire Agreement and Modification. This Agreement, the Schedules to
be provided hereunder, Exhibits hereto and agreements executed concurrently
herewith (all of which are incorporated by reference into and considered part
of this Agreement) supersede all prior agreements and understandings between
the parties or any of their respective affiliates (written or oral) relating to
the subject matter of this Agreement and are intended to be the entire and
complete statement of the terms of the agreement between the parties, and may
be amended or modified only by a written instrument executed by the parties.
The waiver by one party of any breach of this Agreement by any other party
shall not be considered to be a waiver of any succeeding breach (whether of a
similar or a dissimilar nature) of any such provision or other provision or a
waiver of any such provision itself. No representation, inducement, promise,
understanding, condition or warranty not set forth herein has been made or
relied upon by either party hereto.
10.6 Section and Other Headings. The section and other headings
contained in this Agreement are for reference purposes only and shall not in
any way affect the meaning or interpretation of this Agreement.
10.7 Governing Law. This Agreement and the respective rights, duties and
obligations of the parties hereunder, shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to the
conflicts of laws provisions thereof.
10.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, and such
counterparts shall together constitute one and the same instrument.
10.9 Further Assurances. Each of the parties shall, at any time and from
time-to-time after the Closing Date and at the expense of the other parties but
without further consideration, execute and deliver such further instruments,
assignments or documents and other papers and take such further actions as may
be reasonably required to carry out the provisions hereof and the transactions
contemplated hereby. Each party shall use its reasonable efforts to fulfill or
obtain the fulfillment of the conditions to the Closing.
10.10 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition and
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
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10.11 Confidentiality. Seller and Buyer agree to keep the terns of this
Agreement and any amendments to it or transactions arising from it confidential
except as required by applicable securities laws or to discharge the obligation
of each of the parties to file submissions and data with respect to the
proposed transaction pursuant to the HSR Act or as otherwise agreed by the
parties.
10.12 No Third Party Beneficiaries. Neither this Agreement nor any
provision hereof is intended to confer upon any person (other than the parties
hereto) any rights or remedies hereunder.
10.13 Termination by Buyer. If Seller fails to comply with Section 2.2(b)
or if any of the conditions to Closing specified in Article VII are not
satisfied in all material respects, at or prior to January 25, 1997 (unless
Seller is diligently undertaking to comply with Section 2.2(b) or to satisfy
the conditions to Closing specified in Article VII in which case such date will
be extended for 15 days), and such failure is not waived in writing by Buyer,
then Buyer may, without liability of Buyer to any party, terminate this
Agreement, provided Buyer has satisfied (or stood ready to satisfy) all of
Seller's conditions to Closing specified in Article VI, or such conditions have
otherwise been satisfied or waived, by written notice to Buyer.
10.14 Termination by Seller. If Buyer fails to comply with Section 2.2(a)
or if any of the conditions to Closing specified in Article VI are not
satisfied in all material respects at or prior to January 25, 1997(unless Buyer
is diligently undertaking to comply with Section 2.2(a) or to satisfy the
conditions to Closing specified in Article VI, in which case such date shall be
extended for 15 days), and such failure is not waived in writing by Seller,
then Seller may, without liability of Seller to any party, terminate this
Agreement, provided Seller has satisfied (or stood ready to satisfy) all of
Buyer's conditions to Closing specified in Article VII, or such conditions have
otherwise been satisfied or waived, by written notice to Seller.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the day and year first above written.
ONEIDA LTD.
By: /s/ XXXXXXX X. XXXXXXXX
----------------------------
Xxxxxxx X. Xxxxxxxx
Chairman
CAMDEN WIRE CO., INC.
By: /s/ XXXXXXX X. XXXXXXXX
----------------------------
Xxxxxxx X. Xxxxxxxx
Chairman
INTERNATIONAL WIRE GROUP, INC.
By: /s/ XXXXX XXXXXXX
----------------------------
Xxxxx Xxxxxxx
Vice President
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