PURCHASE AND SALE AGREEMENT
By and Between
ProQuest Company
(a Delaware corporation)
and
BH Acquisition, Inc.
(a Delaware corporation)
Dated as of September 20, 2001
TABLE OF CONTENTS
PAGE
Article I PURCHASE AND SALE OF STOCK AND ASSETS.........................2
1.1 Purchase and Sale Transactions................................2
1.2 Purchase Price................................................2
1.3 Payments of the Purchase Price................................2
1.4 Purchase Price Allocation.....................................2
1.5 Contemporaneous Delivery......................................3
Article II CLOSING.......................................................3
2.1 Time and Place of Closing.....................................3
2.2 Deliveries by Seller..........................................3
2.3 Deliveries by Buyer...........................................4
2.4 Deliveries by both Buyer and Seller...........................4
2.5 Inability to Obtain Consents and Approvals....................5
2.6 Name Change...................................................6
Article III WORKING CAPITAL ADJUSTMENT....................................6
3.1 Closing Payment...............................................6
3.2 Working Capital Closing Adjustment Payment....................6
3.3 Intercompany Account..........................................7
Article IV REPRESENTATIONS AND WARRANTIES OF SELLER......................8
4.1 Organization and Qualification................................8
4.2 Authority Relative to this Agreement..........................9
4.3 Consents and Approvals; No Violations........................10
4.4 Financial Statements.........................................10
4.5 No Default...................................................11
4.6 Title to and Condition of Tangible Assets....................12
4.7 Intellectual Property........................................12
4.8 Material Commitments.........................................15
4.9 Arrangements with Affiliates.................................16
4.10 Litigation and Claims........................................16
4.11 Non-Income Tax Matters.......................................17
TABLE OF CONTENTS
(continued)
PAGE
4.12 Employee Benefit Plans.......................................18
4.13 Environmental Matters........................................20
4.14 Labor Matters................................................21
4.15 Absence of Certain Developments..............................22
4.16 Certain Interests............................................24
4.17 Insurance Policies...........................................24
4.18 Banks........................................................24
4.19 No Violation of Law..........................................24
4.20 Books and Records............................................25
4.21 No Misrepresentation.........................................25
4.22 Brokers and Finders..........................................25
4.23 Acquisition Intent...........................................25
4.24 Disclaimer...................................................26
Article V REPRESENTATIONS AND WARRANTIES OF BUYER......................26
5.1 Corporate Organization; Etc..................................26
5.2 Authority Relative to this Agreement.........................26
5.3 Consents and Approvals; No Violations........................27
5.4 Brokers and Finders..........................................28
5.5 Interim Operations...........................................28
5.6 Acquisition Intent...........................................28
5.7 Financing....................................................29
Article VI COVENANTS OF THE PARTIES.....................................29
6.1 Conduct of the Acquired Business.............................29
6.2 Access to Information........................................30
6.3 Requisite Consents...........................................31
6.4 Reasonable Efforts...........................................31
6.5 Public Announcements.........................................32
6.6 Employee Matters.............................................32
6.7 Competition Filings..........................................38
6.8 Exclusivity..................................................38
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TABLE OF CONTENTS
(continued)
PAGE
6.9 License of Certain Intellectual Property.....................38
6.10 Financing....................................................39
6.11 Continuing Performance Obligations...........................39
6.12 Trademark License............................................40
6.13 Covenant not to License......................................40
6.14 Preclosing Transfer of Assets................................41
Article VII CONDITIONS TO CONSUMMATION OF THE TRANSACTION................41
7.1 Conditions to Each Party's Obligations.......................41
7.2 Further Conditions to Seller's Obligations...................42
7.3 Further Conditions to Buyer's Obligations....................42
Article VIII TERMINATION AND ABANDONMENT..................................42
8.1 Termination..................................................42
8.2 Procedure and Effect of Termination..........................43
Article IX SURVIVAL AND INDEMNIFICATION.................................43
9.1 Survival Periods and Indemnification.........................43
9.2 Indemnification..............................................45
9.3 Indemnification Amounts......................................45
9.4 Claims.......................................................46
9.5 Exclusive Remedy.............................................48
9.6 Miscellaneous................................................48
Article X MISCELLANEOUS PROVISIONS.....................................49
10.1 Amendment and Modification...................................49
10.2 Extension; Waiver............................................49
10.3 No Waivers...................................................49
10.4 Entire Agreement; Assignment.................................49
10.5 Validity.....................................................50
10.6 Notices......................................................50
10.7 Schedules; Due Diligence.....................................51
10.8 Governing Law................................................51
10.9 Descriptive Headings.........................................52
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10.10 Counterparts.................................................52
10.11 Expenses.....................................................52
10.12 Other Rules of Construction..................................52
10.13 Authorship...................................................52
10.14 Parties in Interest..........................................53
10.15 Specific Performance.........................................53
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ANNEXES
A Glossary
B Computation of Working Capital Value
C Disclosure Annex
ATTACHMENTS
I Subordinated Note
II Income Tax Disaffiliation Agreement
III Trademark License Agreement
IV Transition Services Agreement
V Warrant
VI Form of Assignment of Foreign Assets and Assumption of Liabilities
VII Form of KPMG Letter
SCHEDULES OF THE DISCLOSURE ANNEX
1.1(b) Other Seller Transferred Assets
4.1(e) Authority
4.1(g) Qualifications
4.1(h) Subsidiaries
4.1(i) Directors and Officers
4.3(b) Consents and Approvals
4.4(a) Financial Statements
4.4(b) Financial Statements: Exceptions
4.4(c) Liabilities Not on Reference Balance Sheets
4.5 No Default
4.6(a) Certain Tangible Assets
4.6(b) Condition of Tangible Assets
4.7(a)(i) Intellectual Property: Patents, Etc.
4.7(a)(ii) Intellectual Property: Trademarks, Etc.
4.7(a)(iii) Intellectual Property: Copyrights, Etc.
4.7(b)(i) Licensed-In Intellectual Property
4.7(b)(ii) Licensed-Out Intellectual Property
4.7(d) Intellectual Property Ownership Exceptions
4.7(i) Intellectual Property
4.8(a) Material Commitments
4.8(b) Validity of Material Commitments
4.9 Arrangements with Affiliates
4.10(a) Pending or Threatened Litigation and Claims (Acquired Group)
4.10(b) Pending or Threatened Litigation and Claims (Seller)
4.11 Non-Income Tax Matters
4.12 Employee Benefit Plans
4.12(a)-(o) Employee Benefit Plan Exceptions
4.13 Environmental Matters
4.14(a) Labor Matters
4.15 Absence of Certain Developments
4.16 Certain Interests
4.17 Insurance Policies
4.18 Banks
6.1 Conduct of Acquired Business
6.6(c) Employee Matters: Medical, Dental and Vision Plans
6.6(d) Employee Matters: Cafeteria Plans
6.6(e) Employee Matters: Disability Plans
6.6(f) Employee Matters: Insurance
6.6(g) Employee Matters: Retiree Medical Benefits
6.6(l) Employee Matters: MIB and Other Bonuses
6.6(m) Employee Matters: Retention Bonuses
6.6(r) Employee Matters: Non-US Plans
6.14 Foreign Assets
7.1 Consents
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PURCHASE AND SALE AGREEMENT
---------------------------
This PURCHASE AND SALE AGREEMENT is dated as of September 20, 2001
("Agreement"), by and between ProQuest Company, a Delaware corporation
("Seller"), and BH Acquisition, Inc., a Delaware corporation ("Buyer").
Capitalized terms used in this Agreement shall, unless otherwise defined herein,
have the meanings ascribed to them in the Glossary attached as Annex A hereto.
WHEREAS, Seller owns all right, title and Beneficial Interest in and to the
stock of the Acquired Companies;
WHEREAS, Seller or its Subsidiaries owns the Xxxx & Xxxxxx Trademark
Registrations and is party to certain licensing agreements relating thereto;
WHEREAS, Seller, through the Acquired Companies, is engaged in:
(i) designing, manufacturing, marketing, selling, distributing
and servicing high volume mail processing and document processing
systems, and proprietary software used in conjunction with mail
and document processing applications, whether in physical or
electronic format, including the processes of data collection,
data collection process control and execution systems (the "MMT
Business"),
(ii) designing, manufacturing, marketing, selling and
distributing production scanners (the "Scanner Business"),
(iii) providing financing arrangements to third parties (the
"BHFS Business"),
(iv) licensing the "Xxxx & Xxxxxx" trademark to third parties
(the "Licensing Business"),
(v) manufacturing, distributing and selling mail recognition
equipment and transport systems for high volume mail processors (
the "Postal System Business"), and
(vi) manufacturing, distributing and selling automated mail
delivery systems (the "Mailmobile Business" and clauses (i)
through (vi) collectively, the "Acquired Business");
WHEREAS, Seller desires to assign, sell, transfer and convey to Buyer, and Buyer
desires to purchase and accept from Seller, the stock of each of the Acquired
Companies; and
WHEREAS, Seller and its Subsidiaries desire to assign, transfer and convey to
Buyer the Xxxx & Xxxxxx Trademark Registrations and related licenses and certain
other assets of Seller used exclusively in the Acquired Business or that are
listed on Schedule 1.1(b), and Buyer desires to purchase such assets
(collectively, the "Seller Asset Transfer"), all upon the terms and subject to
the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements contained herein, the parties hereto
mutually agree as follows:
ARTICLE I
---------
PURCHASE AND SALE OF STOCK AND ASSETS
1.1 Purchase and Sale Transactions.
------------------------------
a. At the Closing, Seller agrees to sell, transfer, assign, convey and
deliver to Buyer, and Buyer agrees to purchase and accept, all right,
title and interest in and to the Stock, free and clear of any Liens.
b. At the Closing, Seller shall sell, transfer, assign, convey and
deliver to Buyer, and Buyer agrees to purchase and accept, all right,
title and interest in and to the assets described on Schedule 1.1(b),
the Xxxx & Xxxxxx Trademark Registrations and other Intellectual
Property used in the Acquired Business or which contains the name
"Xxxx & Xxxxxx," "B&H" or any derivative thereof, and all other assets
of Seller used exclusively in the Acquired Business (the "Seller
Transferred Assets").
1.2 Purchase Price.
--------------
The Purchase Price for the Stock and the Seller Transferred Assets shall consist
of an aggregate of the following:
a. the Warrant, plus
b. an amount equal to One Hundred Forty-Five Million Dollars
($145,000,000) (such amount as adjusted below being the "Monetary
Portion") adjusted:
(i) by subtracting the amount of any Debt; and
(ii) by adjustment for the Adjustment Amount.
1.3 Payments of the Purchase Price.
------------------------------
The Monetary Portion of the Purchase Price shall be payable as follows:
a. $21,750,000 adjusted by the Note Working Capital Adjustment, if
any, shall be payable pursuant to a Subordinated Note in form and
substance attached hereto as Attachment I (the "Subordinated Note
Amount"); and
b. the balance, adjusted by the Cash Working Capital Adjustment, shall
be payable by wire transfer of immediately available funds (the "Cash
Payment").
1.4 Purchase Price Allocation.
-------------------------
Within ninety days after the Closing Date, Buyer and Seller shall agree upon an
allocation of the consideration for the Stock and the Seller Transferred Assets.
Such allocation shall be based
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upon the fair market value of the Stock and the Seller Transferred Assets. Buyer
and Seller agree that no party will take a position on any report, return, or
other documents filed with any Governmental Authority in any judicial or
administrative proceeding, that is in any manner inconsistent with the agreed
upon purchase price allocation.
1.5 Contemporaneous Delivery.
------------------------
Contemporaneously with the execution and delivery of this Agreement, the parties
have executed and delivered the Income Tax Disaffiliation Agreement, in the form
of Attachment II hereto.
ARTICLE II
----------
CLOSING
2.1 Time and Place of Closing.
-------------------------
Subject to the satisfaction or waiver of the conditions set forth in Article VII
of this Agreement, the Closing (i.e., the consummation of the Purchase and Sale
Transaction contemplated by Section 1.1 of this Agreement) will take place at
the offices of XxXxxxxxx, Will & Xxxxx, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000-0000, at 9:30 a.m. on September 28, 2001 (effective as of the
close of business on September 29, 2001), or at such other place or time as the
parties may mutually agree.
2.2 Deliveries by Seller.
--------------------
At the Closing, Seller will deliver the following to Buyer:
a. certificates evidencing the Stock properly endorsed or with stock
powers executed in blank or otherwise in form suitable for transfer;
b. By-laws, minute book, stock or ownership record books and corporate
seal for each Acquired Company and each Acquired Company Subsidiary;
c. Certificate of Incorporation, including all amendments thereto, of
each Acquired Company and each Acquired Company Subsidiary, certified
as of a recent date by the Secretary of State of the applicable state
of incorporation;
d. certificates of Good Standing as of a recent date with respect to
each Acquired Company and each Acquired Company Subsidiary from the
Secretaries of State (or other appropriate governmental official) for
each jurisdiction listed in Schedule 4.1(g);
e. duly executed resignations of all officers and directors of each
Acquired Company and each Acquired Company Subsidiary;
f. stock or limited liability company interests certificates, as
applicable, of each Acquired Company Subsidiary;
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g. the items designated as "Deliveries by Seller" in the Seller Asset
Transfer Documents, taking into account all applicable registration,
notice and other provisions of applicable law;
h. the Trademark Assignment (on an "as is" basis, without
representation or warranty except as to the ownership of the
registration and absence of any Liens);
i. evidence of termination of any Tax Sharing Agreements to which any
of the Acquired Companies is a party;
j. evidence of the release of all Liens relating to the Stock and any
assets of the Acquired Business (other than Permitted Liens);
k. release of guaranties of Seller debt provided by any Acquired
Company or Acquired Company Subsidiary;
l. The Subordination Agreement, as such term is defined in the
Subordinated Note;
m. Assignment of the promissory notes described in Section 6.14.
n. such other instruments or documents, in form and substance
reasonably acceptable to Buyer, as may be necessary to effect Closing
or reasonably requested by Buyer.
2.3 Deliveries by Buyer.
-------------------
At the Closing, Buyer will deliver the following to Seller:
a. by wire transfer, immediately available funds in the full amount of
$108,250,000, to the following account:
Bankers Trust New York
New York, New York
ABA 021 001 033
A/C ProQuest Company General Account
A/C # 00-000-000
b. the Subordinated Note in the initial principal amount of
$21,750,000;
c. the Warrant;
d. Certificate of Incorporation, including all amendments thereto, of
Buyer, certified as of a recent date by the Secretary of State of
Delaware; and
e. such other instruments or documents, in form and substance
reasonably acceptable to Seller, as may be necessary to effect Closing
or reasonably requested by Seller.
2.4 Deliveries by both Buyer and Seller.
-----------------------------------
At the Closing, Seller and Buyer will execute and deliver the following
agreements:
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a. the Seller Asset Transfer Documents, taking into account all
applicable registration, notice and other provisions of applicable
law;
b. the Income Tax Disaffiliation Agreement;
c. Trademark License Agreement, in the form of Attachment III hereto;
d. Transition Services Agreement, in the form of Attachment IV hereto;
and
e. Stockholders and Registration Rights Agreements, in form and
substance reasonably satisfactory to Buyer and Seller.
2.5 Inability to Obtain Consents and Approvals.
------------------------------------------
a. Both prior and subsequent to Closing, the parties will use their
commercially reasonable efforts, and cooperate with each other, to
obtain promptly all Requisite Consents and all other consents,
approvals, waivers, authorizations, novations, notices and filings
which are necessary for the effectiveness after Closing of any
Material Commitment or the effective transfer to Buyer of any Seller
Transferred Asset. All filing, recordation and similar fees and taxes
payable to Governmental Authorities will be paid by the party
obligated by law to pay such amounts.
b. To the extent that:
(i) any Requisite Consent or other consent, approval, waiver,
authorization, novation, notice or filing which is necessary for
the effectiveness after Closing of any Material Commitment or the
effective transfer to Buyer of any Seller Transferred Asset
cannot be obtained or made and, as a result thereof, the full
benefits of such Material Commitment or Seller Transferred Asset
cannot be provided to Buyer following Closing; and
(ii) Buyer and Seller elect to close the Purchase and Sale
Transaction notwithstanding the failure to receive the same;
then, if Buyer so requests in writing, Buyer and Seller, through their
respective Affiliates, as appropriate, will cooperate with each other
and enter into such mutually agreeable, reasonable and lawful
arrangements (including subcontracting, subleasing or sublicensing, if
permitted) to provide to the parties the economic (taking into account
all burdens and benefits, including tax costs and benefits) and
operational equivalent, to the extent permitted, of providing for
Buyer the full benefit of such Material Commitment or Seller
Transferred Asset, and the performance by Buyer of all obligations
under such Material Commitment; provided, however, that Buyer and
Seller will not enter into such an arrangement with respect to any
Material Commitment which is no longer in full force and effect; and
provided further that such economic and operational equivalent does
not include the provision of lost revenues or profits in the event
that any Person terminates a Material Commitment or other prior
relationship with Seller by reason of the consummation of the
transactions contemplated hereby. Seller will, or will cause its
Affiliates to, pay to Buyer, when received, all income, proceeds and
other monies
-5-
received by Seller from third parties, including insurance proceeds
received from third party insurers, to the extent related to the
intended rights of Buyer and its Affiliates (including any Acquired
Company) in any such Material Commitment or Seller Transferred Asset,
as contemplated by this Section 2.5.
2.6 Name Change.
-----------
Seller shall file an amendment to the Certificate of Incorporation of each
Subsidiary (other than the Acquired Companies, the Acquired Company Subsidiaries
and Xxxx & Xxxxxx Publishing Services Company (subject to the terms of the
Trademark License Agreement)), as applicable, as soon as reasonably practicable
but no later than 90 days after Closing, deleting the words "Xxxx & Xxxxxx" from
such Subsidiary's corporate name.
ARTICLE III
-----------
WORKING CAPITAL ADJUSTMENT
3.1 Closing Payment.
---------------
At Closing, Buyer shall make the following payments in respect of the
Monetary Portion:
(i) $108,250,000, payable by wire transfer of immediately
available funds; and
(ii) a Subordinated Note with an aggregate principal amount of
$21,750,000 (the "Initial Note Amount").
3.2 Working Capital Closing Adjustment Payment.
------------------------------------------
a. Within 120 days following Closing, Seller shall prepare and deliver
to Buyer an audited combined balance sheet, certified by KPMG in the
form of the KPMG Letter, of the Acquired Business as of the Closing
Date (the "Closing Balance Sheet"), prepared in accordance with
generally accepted accounting principles consistently applied together
with:
(i) a computation of the Working Capital Value as of the Closing
Date based on such Closing Balance Sheet prepared in the format
provided in Item 5 of Annex B and adjusted on the basis as
provided in Annex B hereto; and
(ii) the resulting calculation of the Cash Payment and the
Subordinated Note Amount.
Each party shall provide the other party and its representatives with
reasonable access to their books, records, employees and systems, and
to the audit work papers, as is necessary to prepare and review the
Closing Balance Sheet. Buyer and Seller shall each pay 50% of the fees
and expenses payable to KPMG to perform the audit of the Closing Date
Balance Sheet.
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b. Buyer shall have the right within 30 days following the delivery of
the Closing Balance Sheet to object to the:
(i) the computation of Working Capital Value; and
(ii) the resulting calculation of the Cash Payment and the
Subordinated Note Amount based thereon.
If Buyer does so object, Seller and Buyer shall cooperate with each
other to reach a mutual agreement thereon or, failing such agreement
within 30 days, the determination shall be made by the Accountant, the
cost of which shall be shared equally by Seller and Buyer. Seller and
Buyer shall deliver to the Accountant copies of any schedules or
documentation which may be reasonably required by the Accountant to
make its determination. Seller and Buyer shall use their best efforts
to cause the Accountant to promptly complete such determination. The
determination of the Accountant shall be final and binding on the
parties.
c. In the event that the actual Working Capital Value as of the
Closing Date as so determined is greater or less than $102,871,000
then:
(i) if greater, Buyer shall:
(y) pay to Seller the amount by which the Cash Payment
exceeds $108,250,000, and
(z) if necessary, Buyer and Seller shall amend and restate
the Subordinated Note to provide for a principal amount
equal to the Subordinated Note Amount;
(ii) if less, Seller shall pay to Buyer the amount by which
$108,250,000 exceeds the Cash Payment.
d. Upon determination of the Working Capital Value in accordance with
Subsection 3.2(b), such Working Capital Closing Adjustment Payment
shall be made by check or wire transfer and, if applicable, the
Subordinated Note shall be amended to reflect the change in the
principal amount, within ten (10) days.
3.3 Intercompany Account.
--------------------
a. The Intercompany Account-Nontrade and any accrued taxes payable
pursuant to any intercompany tax sharing agreements or other
arrangements shall be extinguished by Seller and the Acquired
Companies at the Closing without payment or other transfer of assets.
b. The Intercompany Account-Trade shall be paid in the ordinary course
in accordance with customary terms.
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ARTICLE IV
----------
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as of the date hereof:
4.1 Organization and Qualification.
------------------------------
a. Seller is a corporation validly existing and in good standing under
the laws of the State of Delaware and has all requisite power and
authority to own the Stock. Seller is the sole stockholder or member,
as applicable, of each Acquired Company.
b. The total authorized capital stock of each Acquired Company, except
Scanner LLC and Name Holding, consists of 1,000 shares of common
stock, par value $0.01 per share, all of which shares are issued and
outstanding. The total authorized capital stock of Name Holding
consists of 100 shares of common stock, $0.01 par value per share, 100
shares of which are issued and outstanding. All of the shares of the
Stock have been duly authorized and validly issued and are fully paid
and non-assessable. Seller owns all of the issued and outstanding
shares of the Stock, free and clear of all Liens (except for Liens in
favor of creditors which will be released at Closing). There are no
preemptive or other outstanding rights, options, warrants, conversion
rights or other Commitments (other than this Agreement) to issue or
sell any shares of capital stock of any Acquired Company or any
securities or obligations convertible into or exchangeable for, or
giving any Person a right to subscribe for or acquire, any shares of
capital stock or other equity interests in any Acquired Company.
c. each Acquired Company, except Scanner LLC, is a corporation validly
existing and in good standing under the laws of the State of Delaware
and, prior to Closing, had all requisite power and authority to own,
lease and operate its properties and to carry on its business as
conducted.
d. Scanner LLC is a limited liability company validly existing and in
good standing under the laws of the State of Delaware and, prior to
Closing, had all requisite power and authority to own, lease and
operate its properties and to carry on its business as conducted.
e. except as set forth on Schedule 4.1(e) each Acquired Company
Subsidiary, other than Postal Systems GmbH, is a corporation validly
existing and in good standing under the laws of the State of Delaware
and, prior to Closing, had all requisite power and authority to own,
lease and operate its properties and to carry on its business as
conducted.
f. Postal Systems GmbH is a corporation duly formed under the laws of
Germany and, prior to Closing, had all requisite power and authority
to own, lease and operate its properties and to carry on its business
as conducted.
g. each Acquired Company and each Acquired Company Subsidiary is duly
qualified or licensed and in good standing to do business in each
jurisdiction where such qualification is required and as listed on
Schedule 4.1(g).
-8-
h. the Acquired Companies have no Subsidiaries, except for the
Acquired Company Subsidiaries. All of the capital stock of each
Acquired Company Subsidiary is owned by an Acquired Company, free and
clear of all Liens (except for Liens in favor of creditors which will
be released at Closing). There are no preemptive or other outstanding
rights, options, warrants, conversion rights or other Commitments
(other than this Agreement) to issue or sell any shares of capital
stock of any Acquired Company Subsidiary or any securities or
obligations convertible into or exchangeable for, or giving any Person
a right to subscribe for or acquire, any shares of capital stock or
other equity interests in any Acquired Company Subsidiary.
i. Schedule 4.1(i) contains an accurate list of the current officers
and directors of each of the Acquired Companies and each of the
Acquired Company Subsidiaries.
4.2 Authority Relative to this Agreement.
------------------------------------
a. Seller has full power and authority to execute and deliver this
Agreement, the Income Tax Disaffiliation Agreement and the Seller
Asset Transfer Documents, and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this
Agreement, the Income Tax Disaffiliation Agreement and the Seller
Asset Transfer Documents, and the consummation of the transactions
contemplated hereby and thereby, have been duly and validly authorized
by all requisite corporate action (including, if requisite,
shareholder or similar action) on the part of Seller, and no other
proceedings on its part are necessary to authorize this Agreement, the
Income Tax Disaffiliation Agreement and the Seller Asset Transfer
Documents or to consummate the transactions contemplated hereby or
thereby. This Agreement, the Income Tax Disaffiliation Agreement and
the Seller Asset Transfer Documents have been duly and validly
executed and delivered by Seller and, assuming this Agreement, the
Income Tax Disaffiliation Agreement and the Seller Asset Transfer
Documents have been duly authorized, executed and delivered by Buyer,
constitute valid and binding agreements of Seller, enforceable against
Seller in accordance with their respective terms.
b. At Closing, Seller and each of Seller's Affiliates party thereto
will have full power and authority to execute and deliver each
Ancillary Agreement and to consummate the transactions contemplated
thereby. At Closing, the execution and delivery of each Ancillary
Agreement and the consummation of the transactions contemplated
thereby will have been duly and validly authorized by all requisite
corporate action (including, if requisite, shareholder or similar
action) on the part of Seller and each of Seller's Affiliates party
thereto, and no other proceedings on their part will be necessary to
authorize each Ancillary Agreement or to consummate the transactions
contemplated thereby. At Closing, each Ancillary Agreement will have
been duly and validly executed and delivered by and Seller and each of
Seller's Affiliates party thereto, assuming it has been duly
authorized, executed and delivered by Buyer or Buyer's Affiliates,
will constitute a valid and binding agreement of Seller and each of
Seller's Affiliates party thereto, enforceable against them in
accordance with its terms.
-9-
4.3 Consents and Approvals; No Violations.
-------------------------------------
a. Except for applicable requirements of the HSR Act, and applicable
foreign requirements, no filing with, and no permit, authorization,
consent or approval of, any public body or authority, domestic or
foreign, is necessary for the consummation by Seller of the
transactions contemplated by this Agreement. b. Neither the execution
and delivery of this Agreement by Seller nor the consummation by
Seller of the transactions contemplated hereby or by any Seller Asset
Transfer Document, nor compliance by Seller with any of the provisions
hereof or thereof will:
(i) conflict with or result in any breach of any provision of the
certificate of incorporation (or other organizational document)
or by-laws of such Person;
(ii) except as set forth in Schedule 4.3(b), conflict with, or
result in the breach of, or constitute a default under, or result
in the termination, cancellation, or acceleration (whether after
the filing of notice or the lapse of time or both) of any right
or obligation of the Acquired Business under, or a loss of any
benefit to which the Acquired Business is entitled under, to the
Knowledge of Seller, any Material Commitment, or result in the
creation of any Lien (other than a Permitted Lien) upon any asset
of the Acquired Business; or
(iii) assuming that the filings referred to in Subsection 4.3(a)
are duly and timely made, and assuming that all applicable
waiting periods under competition laws have expired and all
applicable approvals under competition laws have been received to
the Knowledge of Seller violate any order, writ, injunction,
decree, statute, treaty, rule or regulation applicable to the
Acquired Business;
except in the case of (ii) or (iii) for violations, breaches or
defaults which, individually or in the aggregate, do not have a
Material Adverse Effect or prevent or delay the consummation of the
transactions contemplated hereby.
4.4 Financial Statements.
--------------------
a. Seller has heretofore delivered to Buyer the following financial
statements (collectively, the "Financial Statements") and copies
thereof are attached hereto as Schedule 4.4(a):
(i) audited combined balance sheets of the MMT Business, the
Mailmobile Business and the BHFS Business as of December 30, 2000
and January 1, 2000, together with the related statements of
operations and cash flows for each of the fiscal years then
ended;
(ii) interim unaudited combined balance sheet of the MMT
Business, the Mailmobile Business, the Scanner Business and the
BHFS Business as of March 31, 2001 and the related statement of
operations for the three (3) month period then ended;
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(iii) interim unaudited combined balance sheet of the MMT
Business, the Mailmobile Business, the Scanner Business and the
BHFS Business as of June 30, 2001 and related statements of
operations for the six (6) month period then ended; and
(iv) the Reference Balance Sheet.
b. The audited balance sheets referred to in Section 4.4(a)(i) and, to
the Knowledge of Seller, except as set forth on Schedule 4.4(b), each
of the other balance sheets included in the Financial Statements
fairly presents the combined financial position of the MMT Business,
the Mailmobile Business, BHFS Business and, except for the Financial
Statements referred to in Section 4.4(a)(i), the Scanner Business as
of the respective dates thereof and each of the related audited
statements included in the Financial Statements and to Knowledge of
Seller, except as set forth in Schedules 4.4(b), each of the related
unaudited statements fairly present the results of operations of the
MMT Business, the Mailmobile Business, the BHFS Business and, except
for the Financial Statements referred to in Section 4.4(a)(i), the
Scanner Business, for the respective periods indicated therein, in
accordance with GAAP consistently applied.
c. Except as provided in Schedule 4.4(c), the Acquired Group does not
have any liability or obligation of any nature that is not reflected
or reserved against on the Reference Balance Sheets, except for:
(i) liabilities and obligations that were incurred in the
ordinary course since March 31, 2001 and are of a nature similar
to those reflected or reserved against on the Reference Balance
Sheets or which individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect;
(ii) liabilities and obligations of any nature (other than those
required by this Agreement to be disclosed on any Schedule) that
are neither required by GAAP nor by Seller's ordinary course
accounting policies to be so reflected or reserved against;
(iii) liabilities and obligations disclosed on the Balance Sheets
referred to in Section 4.4(a)(iii) or on any Schedule; and
(iv) the Indemnified Damages and reserves therefor.
4.5 No Default.
----------
Except as set forth in Schedule 4.5, no member of the Acquired Group, nor Seller
or any of its Affiliates with respect to the Acquired Business, is in default or
violation (and no event has occurred which with notice or the lapse of time or
both would constitute such a default or violation) of any material term,
condition or provision of:
a. its respective certificate of incorporation (or other
organizational documents) or by-laws;
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b. to the Knowledge of Seller, any Material Commitment; or
c. any Order, rule or regulation applicable to it.
4.6 Title to and Condition of Tangible Assets.
-----------------------------------------
a. Each Acquired Company has, and at the Closing will have, good title
to its tangible assets, free and clear of any Liens, and Seller has,
and at the Closing will have, good title to the Seller Transferred
Assets (excluding the "Xxxx & Xxxxxx" trademark and trade name), free
and clear of any Liens, except in each case for Permitted Liens. To
the Knowledge of Seller, the current tangible assets of each Acquired
Company, together with the tangible Seller Transferred Assets, are all
of the tangible assets used to carry on the Acquired Business as
presently conducted, except for those tangible assets that:
(i) are not material to or primarily related to the conduct of
the Acquired Business;
(ii) will be provided to Buyer pursuant to the Transition
Services Agreement; or
(iii) are listed on Schedule 4.6(a).
b. To the Knowledge of Seller, except as disclosed on such Schedule
4.6(b), all tangible assets of Seller which are material to the
conduct of the Acquired Business are:
(i) maintained in the ordinary course;
(ii) in normal operating condition;
(iii) structurally sound; and
(iv) suitable for the purposes for which they are now being used,
in each case subject to normal wear and tear consistent with
their age and prior use.
4.7 Intellectual Property.
---------------------
a. For purposes hereof, "Intellectual Property" means any and all of
the following:
(i) U.S. and foreign patents, patent applications and statutory
invention registrations,
(ii) registered trademarks and service marks and applications for
registration thereof, material unregistered trademarks, trade
names, trade dress, slogans, logos, and Internet domain names),
(iii) registered copyrights and applications for registration
thereof and material unregistered copyrights, and
(iv) material confidential and proprietary information, including
material trade secrets and know-how.
-12-
Schedules 4.7(a)(i) through 4.7(a)(iii) set forth, respectively, true
and complete lists of all such Intellectual Property listed in
subsections (i) through (iii) above, in each case listing all
jurisdictions in which such Intellectual Property is registered,
which, if registered, are either (x) registered in the name of any
Acquired Company, or (y) registered in the name of Seller or Seller's
Affiliates and primarily related to the Acquired Business, or (z)
included in the Seller Transferred Assets. For purposes hereof, "Owned
Intellectual Property" shall mean all of the Intellectual Property
required to be listed on such three Schedules.
b. Schedule 4.7(b)(i) sets forth a true and complete list of all
Licensed-In Intellectual Property. Schedule 4.7(b)(ii) sets forth a
true and complete list of all Licensed-Out Intellectual Property,
except for licenses granted in the ordinary course in connection with
the sale of products.
c. To the Knowledge of Seller, the use by the Acquired Business in the
ordinary course of the Owned Intellectual Property, the Business
Software, and the Licensed-In Intellectual Property, does not infringe
upon or misappropriate the valid Intellectual Property rights, privacy
rights, or right of publicity of any third party. No written
communication has been received by Seller within the last twelve (12)
months that the use in the ordinary course of the Owned Intellectual
Property, the Business Software, the Licensed-In Intellectual Property
or the Licensed-Out Intellectual Property does or may infringe upon or
misappropriate the Intellectual Property rights, right of privacy or
right of publicity of any third party. To the Knowledge of Seller, the
Acquired Business's use of the Licensed-In Intellectual Property
materially complies with the terms of each license or sublicense
thereof.
d. Except as set forth in Schedule 4.7(d), an Acquired Company is, and
at Closing will be, the owner of the entire and unencumbered right,
title and interest in and to each item of the Owned Intellectual
Property (except for Liens in favor of creditors which will be
released at Closing and except for rights in the Licensed-Out
Intellectual Property created by Material Commitments), and the
Acquired Companies, Buyer or any of Buyer's Affiliates are, and at
Closing will be, entitled to use the Owned Intellectual Property, the
Business Software, and the Licensed-In Intellectual Property in the
ordinary course. Except as set forth in Schedule 4.7(d), the Owned
Intellectual Property, the Business Software and the Licensed-In
Intellectual Property immediately upon Closing will be owned or
available for use by an Acquired Company, Buyer or any of Buyer's
Affiliates which is a transferee thereof, without the payment of any
additional amounts to any third party (except as may be required
subsequent to Closing by the express terms of any license covering
Licensed-In Intellectual Property).
e. Except for Seller's tradename and the Software to be used by Seller
in the performance of services under the Transition Services
Agreement, to the Knowledge of Seller, the Owned Intellectual
Property, the Business Software, and the Licensed-In Intellectual
Property include all of the Intellectual Property and material
Software used in the ordinary day-to-day conduct of the Acquired
Business other than off-the-shelf mass market software, and to the
Knowledge of Seller, there are no other items of Intellectual Property
or Software that are necessary for such ordinary day-to-day conduct of
the
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Acquired Business. To the Knowledge of Seller, the Owned Intellectual
Property, the Business Software, and the Licensed-In Intellectual
Property, is subsisting, valid and enforceable, and has not been
adjudged invalid or unenforceable in whole or part.
f. To the Knowledge of Seller, no third party is engaging in any
activity that infringes upon the Owned Intellectual Property or the
Business Software. The consummation of the transactions contemplated
by this Agreement will not result in the termination or impairment of
title of any of the Owned Intellectual Property.
g. Seller has delivered or made available to Buyer correct and
complete copies of all the licenses and sublicenses of the Licensed-In
Intellectual Property and the Licensed-Out Intellectual Property.
h. Except for such problems that do not materially disrupt its
operation or have a material adverse impact on the operation of other
Software programs or operating systems, to the Knowledge of Seller,
the Business Software is free of all viruses, worms, trojan horses and
other material known contaminants. To the Knowledge of Seller, no
rights in the Business Software have been transferred to any third
party except to the customers of the Acquired Business in the ordinary
course.
i. Except as listed on Schedule 4.7(i), to the Knowledge of Seller, an
Acquired Company, Seller or Seller's Affiliates have the right to use
all material Software development tools, image processing tools,
library functions, compilers, and other material third party Software
that is necessary for the Acquired Business or that is required to
operate or modify the Business Software, and have the right to assign
or sublicense such right to Buyer.
j. Seller and Seller's Affiliates have taken commercially reasonable
steps in accordance with normal industry practice to maintain the
confidentiality of the material trade secrets and other material
confidential information contained in the Owned Intellectual Property.
To the Knowledge of Seller:
(i) there has been no misappropriation of any material trade
secrets or other material confidential information contained in
the Owned Intellectual Property by any Person,
(ii) no employee, independent contractor or agent of an Acquired
Company has misappropriated any material trade secrets of any
other Person in the course of such performance as an employee,
independent contractor or agent of the Acquired Business, and
(iii) no employee, independent contractor or agent of an Acquired
Company is in default or breach of any term of any employment
agreement, non-disclosure agreement, non-compete obligation,
assignment of invention agreement or similar Commitment relating
in any way to the protection, ownership, development, use or
transfer of Owned Intellectual Property.
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k. Notwithstanding anything in this Agreement to the contrary, except
with respect to the ownership of the registration thereof, no
representation or warranty is made with respect to the "Xxxx & Xxxxxx"
trademark or the ownership thereof. Seller or its Subsidiaries owns
the Xxxx & Xxxxxx Trademark Registrations free and clear of any Liens.
4.8 Material Commitments.
--------------------
a. To the Knowledge of Seller, Schedule 4.8(a) contains a true and
complete list, as of the date stated in Schedule 4.8(a), of each of
the following Commitments (whether written or oral) of the Acquired
Business to which Seller or its Affiliates or any Acquired Company is
a party or bound, including all Commitments included in the Seller
Transferred Assets (collectively, "Material Commitments"):
(i) each Commitment having a value or consideration of $100,000
or more for the purchase or lease of personal property, with any
supplier, or for the furnishing of services to a member of the
Acquired Group;
(ii) any Commitment that compensates any Person, other than
employees, based on any sales by a member of the Acquired Group;
(iii) each Commitment for the sale of products or services having
a value or consideration of $250,000 or more (hard copy of which
has heretofore been provided to Buyer);
(iv) each lease and sublease of real property to which an
Acquired Company is a party or by which the Acquired Business is
obligated;
(v) each Commitment relating to indebtedness, other than trade
indebtedness, of the Acquired Group;
(vi) each Commitment with any Government Authority other than
end-user licenses, purchase orders, agreements and service
arrangements, each in standard form and entered into the ordinary
course of business;
(vii) each Commitment that materially limits or purports to limit
the ability of a member of the Acquired Group to compete in any
line of business or with any Person or in any geographic area or
during any period of time;
(viii) each Commitment containing confidentiality requirements
(including all nondisclosure Commitments, but excluding all
Commitments containing confidentiality restrictions entered into
in the ordinary course which do not restrict the conduct of the
Acquired Business as currently conducted);
(ix) each Commitment having an annual value or consideration
exceeding $50,000 to which the Acquired Business will be bound
after Closing relating to employment, consulting, severance or
similar issues with any current or former employee, consultant or
agent of a member of the Acquired Group; and
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(x) each other Commitment, not made in the ordinary course, which
is material to the Acquired Group.
b. Except as set forth on Schedule 4.8(b), each Material Commitment:
(i) is valid and binding on a member of the Acquired Group and,
to the Knowledge of Seller, on the other parties thereto, and is
in full force and effect, subject to bankruptcy and equitable
remedies and qualifications (and except for those Material
Commitments that have expired by their terms or been performed in
full); and
(ii) upon consummation of the transactions contemplated by this
Agreement, shall, subject to bankruptcy and equitable remedies
and qualifications, continue in full force and effect for the
benefit of a member of the Acquired Group, Buyer or Buyer's
Affiliates without penalty or other adverse consequence.
No rights or benefits of any Person party to a Material Commitment
have been (or will be) accelerated or increased, nor will any party to
a Material Commitment be entitled to cancel, suspend or terminate or
diminish the rights of the Acquired Group (or its successor) under any
Material Commitment, as a result of the consummation of the
transactions contemplated by this Agreement. Neither Seller nor its
Affiliates nor any member of the Acquired Group is in material breach
of, or material default under, any Material Commitment and, to the
Knowledge of Seller, no other party to any Material Commitment is in
material breach thereof or material default thereunder.
4.9 Arrangements with Affiliates.
----------------------------
Except as set forth in Schedule 4.9, and except for the Ancillary Agreements and
the services to be provided thereunder:
a. there are no Commitments having a value or consideration in excess
of $100,000 and which is material to the Acquired Business between
members of the Acquired Group, on one hand, and Seller or any of
Seller's other Affiliates, on the other hand; and
b. all of the assets having a value or consideration in excess of
$100,000 and which is material to the Acquired Business used by Seller
or its Affiliates or by any member of the Acquired Group in the
conduct of the Acquired Business are:
(i) in the case of assets other than Seller Transferred Assets,
owned by the Acquired Companies, and
(ii) in the case of Seller Transferred Assets, will be
transferred to Buyer at Closing.
4.10 Litigation and Claims.
---------------------
a. Except as set forth on Schedule 4.10(a):
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(i) there is no Proceeding pending for which written notice has
been served on or received by Seller or, to the Knowledge of
Seller, threatened, and no written (or, to the Knowledge of
Seller, unwritten) material Claim has been asserted, against an
Acquired Company, any properties of an Acquired Company or any
Seller Transferred Asset; and
(ii) neither any Acquired Company nor any properties of an
Acquired Company, nor to the Knowledge of Seller any Seller
Transferred Asset is subject to any Order.
b. Except as set forth on Schedule 4.10(b), there is no Proceeding
pending or, to the Knowledge of Seller, threatened, and no written
(or, to the Knowledge of Seller, unwritten) Claim has been asserted,
against Seller that would prevent consummation of the Purchase and
Sale Transaction or materially impair the ability of Seller to perform
its obligations hereunder. Seller is not subject to any order, writ,
judgment, award, injunction or decree of any Government Authority of
competent jurisdiction or any arbitrator, except for those that would
neither prevent consummation of the Purchase and Sale Transaction nor
materially impair the ability of Seller to perform its obligations
hereunder.
4.11 Non-Income Tax Matters.
----------------------
Except as set forth in Schedule 4.11:
a. The Acquired Companies and Acquired Company Subsidiaries (and each
affiliated, unitary or combined group of which the Acquired Companies
and Acquired Company Subsidiaries are or have been a member) have each
timely filed, or have timely filed for an extension for the filing of,
all material Tax returns that are required to be filed by it on or
before the date hereof, and all Taxes owed by the Acquired Companies
and Acquired Company Subsidiaries (whether or not shown on any Tax
return) and due on or before the date hereof have been paid.
b. There are no deficiencies for any Taxes proposed, asserted or
assessed against the Acquired Companies or the Acquired Company
Subsidiaries, no requests for waivers of the time to assess any Taxes
are pending, and no power of attorney with respect to any Taxes has
been executed or filed with any taxing authority.
c. The Acquired Companies and Acquired Company Subsidiaries have
complied with all material laws relating to the payment and
withholding of employment Taxes and have withheld and paid all Taxes
required to have been withheld and paid in connection with amounts
paid or owing to any employee, independent contractor or other Person.
d. There are no Liens for Taxes (other than for current Taxes not yet
due and payable) on the assets of the Acquired Companies or the
Acquired Company Subsidiaries or any Seller Transferred Assets.
e. The Acquired Companies and Acquired Company Subsidiaries are not
bound by any Commitment (either with any Person or with any taxing
authority) with respect to Taxes
-17-
that will be binding on the Acquired Companies or the Acquired Company
Subsidiaries, Buyer or any of Buyer's Affiliates after Closing.
f. No audit or other Tax Proceedings are pending with respect to Taxes
of the Acquired Companies or the Acquired Company Subsidiaries and no
notice thereof has been received. No issue has been raised in writing
by any taxing authority in any presently pending or prior audit that
could be material and adverse to the Acquired Companies or the
Acquired Company Subsidiaries for any period after the Closing.
g. Seller's representations and warranties with respect to taxes
measured by or with respect to income are set forth in the Income Tax
Disaffiliation Agreement.
4.12 Employee Benefit Plans.
----------------------
Schedule 4.12 lists each Employee Benefit Plan covering Affected Employees in
the United States. Except as set forth in Schedule 4.12:
a. Each such Employee Benefit Plan covering Affected Employees (and
each related trust, insurance contract, or fund), to the Knowledge of
Seller, has been administered in all material respects in accordance
with:
(i) the terms of all applicable governing documents, and
(ii) the terms of all applicable employment and collective
bargaining agreements and other Commitments.
b. All required reports and descriptions (including Form 5500 annual
reports, summary annual reports, and summary plan descriptions) have
been timely filed or distributed with respect to each such Employee
Benefit Plan covering Affected Employees.
c. The requirements of Part 6 of Subtitle B of Title I of ERISA and of
Code Sec. 4980B have been substantially satisfied with respect to each
such Employee Benefit Plan covering Affected Employees which is an
Employee Welfare Benefit Plan.
d. All contributions (including all employer contributions and
employee salary reduction contributions) which are due for any period
ending on or before the Closing Date have been paid to each such
Employee Benefit Plan covering Affected Employees which is an Employee
Pension Benefit Plan and all contributions for any period ending on or
before the Closing Date which are not yet due have been paid to each
such Employee Pension Benefit Plan covering Affected Employees or
accrued in accordance with the past custom and practice of Seller.
e. All premiums or other payments for all periods ending on or before
the Closing Date have been paid or accrued or will be paid or accrued
in accordance with past custom and practice of Seller with respect to
each such Employee Benefit Plan covering Affected Employees which is
an Employee Welfare Benefit Plan.
-18-
f. Each such Employee Benefit Plan covering Affected Employees which
is an Employee Pension Benefit Plan and which is described on Schedule
4.12(f) as meeting the requirements of Code Sec. 401(a) meets the
requirements of a "qualified plan" under Code Sec. 401(a) and has
either received a favorable determination letter from the Internal
Revenue Service or has requested such a letter within the remedial
amendment period of Code Sec. 401(b).
g. Seller has delivered or will prior to Closing deliver to Buyer true
and complete copies of the plan documents and summary plan
descriptions that are in effect as of the Closing Date, the most
recent determination letter received from the Internal Revenue Service
(if applicable), the most recently filed Form 5500 annual report (if
applicable), and all related trust agreements, insurance contracts,
and other funding Commitments (if applicable) which implement each
such Employee Benefit Plan covering Affected Employees and which are
currently in effect as of the Closing Date, to the extent such
documents exist.
h. With respect to each Employee Benefit Plan that is an Employee
Pension Benefit Plan or an Employee Welfare Benefit Plan that Seller,
and the Controlled Group of Corporations which includes Seller,
maintains or has maintained since 1995 on behalf of Affected Employees
or to which any of them contributes, has contributed, or has been
required to contribute since 1995 on behalf of Affected Employees:
(i) Except as set forth on Schedule 4.12(h):
(a) no such Employee Benefit Plan which is an Employee
Pension Benefit Plan (other than any Multiemployer
Plan) has been completely or partially terminated for
which liability has not been satisfied in full; and
(b) no Reportable Event notice has been filed with the
PBGC with respect to an Employee Pension Benefit
Plan. No Proceeding by the PBGC to terminate any such
Employee Pension Benefit Plan (other than any
Multiemployer Plan) has been instituted or to the
Knowledge of Seller threatened.
(ii) To the Knowledge of Seller, there have been no Prohibited
Transactions (as defined under ERISA) with respect to any such
Employee Pension Benefit Plan or Employee Welfare Benefit Plan,
and, to the Knowledge of Seller, no fiduciary has incurred any
liability for breach of fiduciary duty or any other failure to
act or comply in connection with the administration or investment
of the assets of any such Employee Pension Benefit Plan or
Employee Welfare Benefit Plan.
(iii) To the Knowledge of Seller, no action, suit, Proceeding,
hearing, or investigation with respect to the administration or
the investment of the assets of any such Employee Pension Benefit
Plan or Employee Welfare Benefit Plan (other than routine claims
for benefits) is pending or which could result in a material
liability to the Acquired Companies.
-19-
(iv) To the Knowledge of Seller, the Acquired Companies have not
incurred any liability to the PBGC (other than PBGC premium
payments) or otherwise under Title IV of ERISA (including any
withdrawal liability) or under the Code with respect to any such
Employee Benefit Plan which is an Employee Pension Benefit Plan.
i. Except as set forth on Schedule 4.12(i), since 1995, the Acquired
Companies have not contributed to or been required to contribute to
any Multiemployer Plan or to the Knowledge of Seller, have any
liability (including withdrawal liability) as of the Closing Date
under any Multiemployer Plan.
j. To the Knowledge of Seller, except as set forth on Schedule
4.12(j), there have been no statements or communications made or
materials provided to any current Affected Employees, or former U.S.
employees of the Acquired Companies by any Person which constitute a
Commitment or other binding obligation of the Acquired Companies to
provide for any pension or welfare benefits to any such employee or
former employee, whether before or after retirement, other than
benefits under the Employee Benefit Plans.
k. Except as set forth on Schedule 4.12(k), the Acquired Companies do
not (as of the Closing Date) maintain or contribute to any Employee
Welfare Benefit Plan providing medical, health, or life insurance
benefits to current Affected Employees, former U.S. employees of the
Acquired Companies, or their spouses or dependents beyond their
retirement or other termination of employment (other than in
accordance with Code Sec. 4980B).
l. To the Knowledge of Seller, Schedule 4.12(l) sets forth those
persons who have been approved to receive tuition reimbursement
expense payments under the Xxxx & Xxxxxx Company Tuition Reimbursement
Plan and the tuition reimbursement expense payment amounts with
respect to courses in progress on the date hereof.
m. Except as set forth on Schedule 4.12(m), no Affected Employee will
become entitled to any bonus, severance, job security or similar
benefit or any enhanced benefit (including acceleration of vesting or
exercise of an incentive award) solely as a result of the transactions
contemplated hereby.
n. Effective as of April 1, 2001, MMT has purchased and maintained the
workers compensation insurance described on Schedule 4.12(n) that
covers workers compensation claims made by U. S. employees of the
Acquired Companies and the Acquired Companies Subsidiaries on or after
April 1, 2001.
o. Schedule 4.12(o) lists the Employee Benefit Plans covering
employees of the Acquired Companies outside of the United States.
4.13 Environmental Matters.
---------------------
Except as set forth in Schedule 4.13:
-20-
a. Acquired Companies hold, and are in compliance with, all permits,
licenses and government authorizations required for the Acquired
Companies to hold their assets and to conduct the Acquired Business
under all applicable Environmental Laws where any failure to do so
would be reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect;
b. neither Seller nor any of its Affiliates has, with respect to the
Acquired Business, received any written request for information, or
been notified that it is a potentially responsible party, under the
federal Comprehensive Environmental Response, Compensation, and
Liability Act or any similar local, state or foreign law with respect
to any on-site or off-site location where the subject matter of any
such request or notification would be reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect;
c. neither Seller nor any of its Affiliates has, with respect to the
Acquired Business, entered into or agreed to any consent decree or
order, and is not subject to any judgment, decree or judicial order
relating to compliance with, or the cleanup of regulated substances
under, any applicable Environmental Laws where any such consent decree
or order would be reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect; and
d. to the Knowledge of Seller, there are no Environmental Conditions
existing on any of the real property of or used by the Acquired
Business, the liability associated with which would be reasonably
likely to have, individually or in the aggregate, a Material Adverse
Effect.
4.14 Labor Matters.
-------------
a. Except as set forth on Schedule 4.14(a):
(i) neither Seller nor any of its Affiliates is, with respect to
the Acquired Business, a party to any collective bargaining
agreement;
(ii) to the Knowledge of Seller, there is no unfair labor
practice complaint or other Proceeding against Seller or any of
its Affiliates with respect to the Acquired Business pending
before the National Labor Relations Board;
(iii) there is no labor strike, work stoppage or arbitration
Proceeding pending or involving or, to the Knowledge of Seller,
threatened against Seller or any of its Affiliates with respect
to the Acquired Business; and
(iv) to the Knowledge of Seller, there are no organizing efforts
by any union or other group seeking to represent the employees of
Seller or any of its Affiliates with respect to the Acquired
Business.
b. To the Knowledge of Seller:
-21-
(i) the Acquired Companies and the Acquired Business are and have
been in compliance in all respects with all applicable laws
respecting employment and employment practices, terms and
conditions of employment and wages and hours, including, without
limitation, the Americans with Disabilities Act, the Immigration
Reform and Control Act, the Worker Adjustment and Retraining
Notification Act, any such laws respecting employment
discrimination, disability rights or benefits, equal opportunity,
plant closure issues, affirmative action, workers' compensation,
employee benefits, severance payments, data protection, labor
relations, employee leave issues, wage and hour standards,
occupational safety and health requirements and unemployment
insurance and related matters, and is not engaged in and has not
engaged in any unfair labor practice; and
(ii) no investigation or review by or before any Government
Authority concerning any possible conflicts with or violations of
any such applicable laws is pending, nor is any such
investigation threatened, nor has any such investigation occurred
during the last three years, and no Governmental Authority has
provided any notice to Seller or the Acquired Companies or
otherwise asserted an intention to conduct any such investigation
or review.
4.15 Absence of Certain Developments.
-------------------------------
Except as expressly contemplated by this Agreement, or except as set forth in
Schedule 4.15, since March 31, 2001:
a. to the Knowledge of Seller, there has been no adverse change in the
Acquired Business, or in the operation or financial condition thereof,
except such changes which, in the aggregate, have not had a Material
Adverse Effect;
b. to the Knowledge of Seller, neither Seller nor any of its
Affiliates has, with respect to the Acquired Business, taken any
actions which would, if taken after the date hereof, violate Section
6.1 hereof;
c. to the Knowledge of Seller, there has not been any damage,
destruction or loss, whether or not covered by insurance, with respect
to the property and assets of an Acquired Company, the Seller
Transferred Assets or the Acquired Business having a replacement cost
of more than $25,000 for any single loss or $50,000 for all such
losses;
d. there has not been any grant of any stock option or right to
purchase the shares of the stock of any Acquired Company;
e. there has not been any declaration, setting aside or payment of any
non-cash dividend or other distribution in respect of any shares of
capital stock of the Acquired Companies or (other than for cash) any
repurchase, redemption or other acquisition of any outstanding shares
of capital stock or other securities of, or other ownership interest
in, any Acquired Company;
f. to the Knowledge of Seller, no Acquired Company has awarded or paid
any bonuses to any of its employees, or entered into any employment,
deferred compensation, severance
-22-
or similar Commitment (nor amended any such Commitment) or agreed to
increase the compensation payable or to become payable by it to any of
its directors, officers, employees, agents or representatives, or
agreed to increase the coverage or benefits available under any
severance pay, termination pay, vacation pay, company awards, salary
continuation for disability, sick leave, deferred compensation, bonus
or other incentive compensation, insurance, pension or other employee
benefit plan, payment or arrangement made to, for or with such
directors, officers, employees, agents or representatives (other than
(i) normal increases in the ordinary course of business, (ii)
increases which constitute Indemnified Damages, or (iii) increases
which would not materially reduce the Working Capital Value);
g. there has not been any change by any Acquired Company in accounting
or tax reporting principles, methods or policies;
h. to the Knowledge of Seller, no Acquired Company has entered into
any transaction or Commitment or conducted the Acquired Business other
than in the ordinary course;
i. to the Knowledge of Seller, no Acquired Company has failed to pay
and discharge promptly current liabilities except where disputed in
good faith by appropriate proceedings;
j. to the Knowledge of Seller, no Acquired Company has made any loans,
advances or capital contributions to, or investments in, any Person or
paid any fees or expenses to Seller or to any Affiliate of Seller
(other than the payment of trade payables in the ordinary course) and
routine transfers of cash;
k. to the Knowledge of Seller, no Acquired Company has mortgaged,
pledged or subjected to any Lien any of its assets, or acquired any
assets or sold, assigned, transferred, conveyed, leased or otherwise
disposed of any of its assets, except for assets acquired or sold,
assigned, transferred, conveyed, leased or otherwise disposed of in
the ordinary course;
l. to the Knowledge of Seller, no Acquired Company has discharged or
satisfied any Lien, or paid any obligation or liability (fixed or
contingent), except in the ordinary course of business or those which
are Indemnified Damages;
m. to the Knowledge of Seller, no Acquired Company has cancelled or
compromised any indebtedness or claim or amended, canceled,
terminated, relinquished, waived or released any Commitment or right
except in the ordinary course and which, in the aggregate, would not
be material to the Acquired Companies;
n. to the Knowledge of Seller, no Acquired Company has made or
committed to make any capital expenditures or capital additions or
betterments in excess of $100,000 individually;
o. no Acquired Company has instituted or settled any material
litigation, suit, claim, action, Proceeding or investigation of any
kind; and
-23-
p. to the Knowledge of Seller, no Acquired Company has agreed to do
anything set forth in this Section 4.15(d) through (o).
4.16 Certain Interests.
-----------------
Except as set forth on Schedule 4.16, to the Knowledge of Seller neither Seller
nor, any Affiliate of Seller, officer or director of any member of the Acquired
Group or any immediate relative or spouse who resides with, or is a dependent
of, any such officer or director:
a. owns, directly or indirectly, in whole or in part, or has any other
interest in, any tangible or intangible property which the Acquired
Group uses or has used in the conduct of the Acquired Business or
otherwise (except for any such ownership or interest resulting from
the ownership of securities in a public company);
b. has outstanding any indebtedness to any member of the Acquired
Group; or
c. is a party to any Commitment with any member of the Acquired Group,
or is owed by any member of the Acquired Group any obligation of any
nature whatsoever, except for the payment of employee compensation,
the advancement of expenses or indemnification obligations, and the
payment of trade payables, in each case in the ordinary course.
4.17 Insurance Policies.
------------------
Schedule 4.17 sets forth a true and complete list and description (including
face amount of policy, name of insured, carrier, premium, expiration date and
whether it is a "claims made" or an "occurrence" policy) of all insurance
policies held by an Acquired Company or covering the Acquired Business. All
premiums due to the date hereof on such policies have been paid. Except as set
forth on Schedule 4.17, there are no pending claims related to the Acquired
Business that are covered by insurance. Requisite notice (or presentment) of any
claims under such policies has been given (or made), except where such failure
would neither prejudice the ability to make a claim thereunder nor result in a
Material Adverse Effect. Such insurance to the date hereof has (i) been
maintained in full force and effect and (ii) not been canceled or changed,
except to extend the maturity dates thereof.
4.18 Banks.
-----
To the Knowledge of Seller, Schedule 4.18 sets forth the name of each bank in
which an Acquired Company has an account, lockbox or safe deposit box, and the
names of all Persons authorized to draw thereon or have access thereto.
4.19 No Violation of Law.
-------------------
For all periods prior to and through December 31, 2000, the business of the
Acquired Companies has been conducted in compliance with all applicable Laws
(including, without limitation, ERISA and Environmental Laws but excluding
zoning laws) except where any failure to do so would not be reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect; and, neither
Seller nor any of the Acquired Companies has prior to January 1, 2001, violated
any such laws in connection with the ownership or use by the Acquired Companies
of
-24-
any property rights or other assets or in connection with the conduct of the
Acquired Business or the administration of any Employee Benefit Plan except
where any violation would not reasonably be likely to have, individually or in
the aggregate, a Material Adverse Effect.
4.20 Books and Records.
-----------------
The minute books and other similar records of the Acquired Companies contain
true and complete registers of the shareholders and records of all actions taken
at any meetings of shareholders, boards of directors or any committee thereof
and all written consents executed in lieu of the holding of any such meetings.
To the Knowledge of Seller, the accounting books and records of the Acquired
Companies accurately reflect in all material respects the assets, liabilities,
business, financial condition and results of operations of the Acquired
Companies.
4.21 No Misrepresentation.
--------------------
To the Knowledge of Seller, the representations and warranties of Seller
contained in this Agreement and in the Ancillary Agreements and the documents to
be delivered by Seller at Closing taken together do not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements contained herein or therein not misleading.
4.22 Brokers and Finders.
-------------------
Other than Credit Suisse First Boston Corporation, whose fees will be paid by
Seller and not by an Acquired Company, Buyer or any of Buyer's Affiliates,
neither Seller nor any of its Affiliates has employed any broker or finder or
incurred any liability for any investment banking fees, brokerage fees,
commissions or finders' fees in connection with the transactions contemplated by
this Agreement.
4.23 Acquisition Intent.
------------------
Seller represents and warrants that:
a. Seller will be acquiring the Warrant and the Subordinated Note to
be issued pursuant to Section 1.3 solely for its account, for
investment purposes only and with no current intention or plan to
distribute, sell or otherwise dispose of the Warrant or the
Subordinated Note in connection with any distribution;
b. Seller is not a party to any agreement or other arrangement for the
disposition of the Warrant or the Subordinated Note;
c. Seller is an "accredited investor" as defined in Rule 501(a) of the
Securities Act of 1933;
d. Seller:
(i) is able to bear the economic risk of an investment in the
Warrant and Subordinated Note acquired pursuant to this
Agreement;
-25-
(ii) can afford to sustain a total loss of that investment;
(iii) has such knowledge and experience in financial and business
matters that Seller is capable of evaluating the merits and risks
of the proposed investment in the Warrant and Subordinated Note;
and
(iv) has had an adequate opportunity to ask questions and receive
answers from the officers of Buyer concerning any and all matters
relating to the transactions contemplated hereby, including the
background and experience of the current and proposed officers
and directors of Buyer, the plans for the operations of the
business of Buyer and any plans of Buyer for additional
acquisitions.
4.24 Disclaimer.
----------
The representations and warranties set forth in this Article IV are the only
express or implied representations and warranties made by Seller or any other
Person on behalf of Seller with respect to the Acquired Business, the Stock and
the Seller Transferred Assets.
ARTICLE V
---------
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as of the date hereof:
5.1 Corporate Organization; Etc.
---------------------------
Buyer is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation and has all requisite
power and authority to own, lease and operate its properties and to carry on its
business as now being conducted, except where the failure to have such power or
authority is not, in the aggregate, reasonably likely to have a Material Adverse
Effect.
5.2 Authority Relative to this Agreement.
------------------------------------
a. Buyer has full power and authority to execute and deliver this
Agreement and the Income Tax Disaffiliation Agreement and to
consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the Income Tax
Disaffiliation Agreement and the consummation of the transactions
contemplated hereby and thereby by Buyer have been duly and validly
authorized by all required corporate action on the part of Buyer and
no other corporate proceedings on the part of Buyer are necessary to
authorize this Agreement and the Income Tax Disaffiliation Agreement
or to consummate the transactions contemplated hereby or thereby. This
Agreement and the Income Tax Disaffiliation Agreement have been duly
and validly executed and delivered by Buyer and, assuming this
Agreement and the Income Tax Disaffiliation Agreement have been duly
authorized, executed and delivered by Seller, constitute valid and
binding agreements of Buyer, enforceable against Buyer in accordance
with their respective terms.
-26-
b. At Closing, Buyer and each of Buyer's Affiliates party thereto will
have full power and authority to execute and deliver each Ancillary
Agreement and to consummate the transactions contemplated thereby. At
Closing, the execution and delivery of each Ancillary Agreement and
the consummation of the transactions contemplated thereby will have
been duly and validly authorized by all requisite corporate action
(including, if requisite, shareholder or similar action) on the part
of Buyer and each of Buyer's Affiliates party thereto, and no other
proceedings on their part will be necessary to authorize each
Ancillary Agreement or to consummate the transactions contemplated
thereby. At Closing, each Ancillary Agreement will have been duly and
validly executed and delivered by and Buyer and each of Buyer's
Affiliates party thereto, assuming it has been duly authorized,
executed and delivered by Seller or Seller's Affiliates, will
constitute a valid and binding agreement of Buyer and each of Buyer's
Affiliates party thereto, enforceable against them in accordance with
its terms.
5.3 Consents and Approvals; No Violations.
-------------------------------------
a. Except for applicable requirements of the HSR Act, and applicable
foreign requirements, no filing with, and no permit, authorization,
consent or approval of, any public body or authority is necessary for
the consummation by Buyer of the transactions contemplated by this
Agreement.
b. Neither the execution and delivery of this Agreement by Buyer nor
the consummation by Buyer of the transactions contemplated hereby nor
compliance by Buyer with any of the provisions hereof will:
(i) conflict with or result in any breach of any provision of the
charter or by-laws of Buyer;
(ii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both), a default (or give
rise to any right of termination, cancellation or acceleration)
under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, Commitment or other
instrument or obligation to which Buyer or any of its
subsidiaries is a party or by which any of them or any of their
properties or assets may be bound, or
(iii) assuming that the filings referred to in Subsection 5.3(a)
are duly and timely made, and assuming that all applicable
waiting periods under competition laws have expired and all
applicable approvals under competition laws have been received,
violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Buyer, any of its subsidiaries or any of
their properties or assets;
except, in the case of (ii) and (iii) for violations, breaches or
defaults which are not in the aggregate reasonably likely to have a
Material Adverse Effect or prevent or delay the consummation of the
transactions contemplated hereby.
-27-
5.4 Brokers and Finders.
-------------------
Neither Buyer nor any of its subsidiaries has employed any investment banker,
broker or finder or incurred any liability for any investment banking fees,
brokerage fees, commissions or finders, fees in connection with the transactions
contemplated by this Agreement.
5.5 Interim Operations.
------------------
Buyer was formed for the purpose of engaging in the transactions contemplated
herein and has engaged in no other business activities.
5.6 Acquisition Intent.
------------------
Buyer represents and warrants that:
a. Buyer will be acquiring the Stock solely for its account, for
investment purposes only and with no current intention or plan to
distribute, sell or otherwise dispose of the Stock in connection with
any distribution;
b. Buyer is not a party to any agreement or other arrangement for the
disposition of the Stock;
c. at Closing, Buyer will be an "accredited investor" as defined in
Rule 501(a) of the Securities Act of 1933;
d. Buyer:
(i) is able to bear the economic risk of an investment in the
Stock acquired pursuant to this Agreement;
(ii) can afford to sustain a total loss of that investment;
(iii) has such knowledge and experience in financial and business
matters that Buyer is capable of evaluating the merits and risks
of the proposed investment in the Stock; and
(iv) has had an adequate opportunity to ask questions and receive
answers from the officers of the Acquired Companies concerning
any and all matters relating to the transactions contemplated
hereby, including the background and experience of the current
and proposed officers and directors of Seller and the Acquired
Companies, the plans for the operations of the business of the
Acquired Companies and any plans of Seller or the Acquired
Companies for additional acquisitions.
e. the representations and warranties set forth herein are the only
representations and warranties that Buyer is entitled to rely upon
with respect to its purchase of the Stock and the Seller Transferred
Assets.
-28-
5.7 Financing.
---------
Buyer believes that there is no fact or circumstance that will prevent it from
obtaining financing sufficient to consummate the Purchase and Sale Transaction.
ARTICLE VI
----------
COVENANTS OF THE PARTIES
6.1 Conduct of the Acquired Business.
--------------------------------
a. Except as contemplated by this Agreement, or done consistent with
the restructuring charges already taken by the Acquired Group and
reflected on the Financial Statements, or as set forth in Schedule
6.1, or done with the prior express consent of Buyer, during the
period from the date of this Agreement to the Closing Date, Seller
will use all commercially reasonable efforts to cause the Acquired
Group:
(i) to conduct the Acquired Business in the ordinary course
consistent with past practice, except in connection with the
transactions contemplated hereby;
(ii) to preserve intact the present organization of the Acquired
Business and preserve its relationships with customers,
suppliers, employees and others having significant business
dealings with it, in each case in the ordinary course consistent
with past practice; and
(iii) to maintain coverage under all Seller's Insurance.
b. Without limiting the generality of the foregoing, and except as
otherwise provided in this Agreement or with Buyer's prior approval,
Seller will not permit any of the following in connection with or on
behalf of the Acquired Business:
(i) incurring any indebtedness for borrowed money or issue any
long-term debt securities or assume, guarantee or endorse the
obligations of any other Persons, to the extent that such would
be a liability, except for indebtedness incurred in the ordinary
course consistent with past practice; or
(ii) except in the ordinary course consistent with past practice,
(a) acquiring or disposing of any real property or other
material assets;
(b) mortgaging or encumbering any real property or other
material assets;
(c) changing the strategy or current business plan for the
Acquired Business;
(d) materially increase the salary or any other form of
compensation of any employee of the Acquired Business;
-29-
(e) entering into any Commitments that would constitute
Material Commitments;
(f) engaging in any transactions with, or enter into any
Material Commitments with, Seller or its Affiliates, except
as required by this Agreement;
(g) entering into, adopting, amending or terminating any
Commitment relating to the compensation or severance of any
employee of the Acquired Business, except to the extent
required by law or any existing Commitments which have been
disclosed to Buyer; or
(h) agreeing to take any of the foregoing actions.
c. Between the date of this Agreement and Closing, Seller shall:
(i) neither transfer, nor permit any of Seller's Affiliates to
transfer, any employee of the Acquired Business into any other
business of Seller, or any employee of another business of Seller
into the Acquired Business, except in each case as otherwise
expressly agreed to by the parties; and
(ii) take, or cause any of Seller's Affiliates to take, the
actions necessary to discharge or to release the Acquired
Companies from (and, therefore, to remove from the Closing
Balance Sheet) any and all liabilities related to any employees
who are not Affected Employees.
6.2 Access to Information.
---------------------
a. From the date of this Agreement to the Closing, Seller will, or
cause its Subsidiaries to:
(i) give Buyer and its authorized representatives reasonable
access during business hours to the documents in the Data Room
and to the books, records, offices and other facilities and
properties of the Acquired Business;
(ii) permit Buyer in the company of Seller's representative to
make reasonable inspections during business hours of the books,
records and facilities of the Acquired Business, including but
not limited to:
(a) facilitating Buyer's access to and review of all known
environmental documentation in Seller's possession or
control, concerning the Lincolnwood, Allentown and Durham
facilities;
(b) all known OSHA documentation in Seller's possession or
control, concerning any or all Acquired Group sites;
-30-
(c) any and all documentation in Seller's possession or
control, concerning any removal of underground storage tanks
at the Lincolnwood, Allentown and Durham facilities from
1989 to the date hereof; and
(iii) cause its officers and other key employees to meet with
Buyer and its authorized representatives and to furnish to them,
either verbally or in documented format, such financial and
operating data and other information with respect to the Acquired
Business as Buyer may from time to time reasonably request;
provided, however, that any such access shall be conducted at a
reasonable time during business hours and in such a manner as not
to interfere with the operation of the Acquired Business and in
all cases shall be coordinated with Xxxxxx Mater or Xxxx
Xxxxxxxx, and no information shall be furnished to or requested
by Buyer except through them, or either of them; and provided
further that all such information and access shall be subject to
the terms and conditions of the Confidentiality Agreement between
Buyer and Seller.
b. Following the Closing Date, and for a period not to exceed seven
years, each party shall grant to the other party and its
representatives, at the latter party's reasonable request, reasonable
access to and the right to make copies at its expense of those records
and documents, including insurance records and documents, covering any
period prior to the Closing related to the Acquired Group, the
Acquired Business or the Seller Transferred Assets as may be
reasonably necessary for litigation, disputes surrounding the Closing
Balance Sheet, preparation of financial statements, tax returns and
audits or other valid business purposes. For this same time period and
for these same purposes, Buyer shall grant to Seller reasonable access
to the accountants and employees of the Acquired Business who are
involved in the preparation of financial statements for the Acquired
Business, for which accommodation Seller shall reimburse Buyer its
related costs actually incurred.
6.3 Requisite Consents.
------------------
Prior to the Closing and thereafter, Buyer and Seller shall fully cooperate with
each other to obtain all Requisite Consents. All costs and expenses incurred in
connection with obtaining all Consents of Government Authorities shall initially
be split by Buyer and Seller; provided, however, an adjustment will be made to
reallocate such costs to the party obligated by law to pay them (i.e., Buyer
under the HSR Act) and to reimburse the paying party as appropriate.
6.4 Reasonable Efforts.
------------------
a. Subject to the terms and conditions herein provided, each of the
parties hereto agrees to use all reasonable efforts to take, or cause
to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the transactions contemplated by this
Agreement, including, without limitation, making all required filings
and applications and complying with or responding to any requests by
Government Authorities.
-31-
b. If at any time after the Closing Date any further action is
necessary or desirable to carry out the provisions of this Agreement
(including transferring any assets and rights which should have been
owned by the members of the Acquired Group, but were not, or which
should not have been owned by the members of the Acquired Group, but
were, or transferring any mail or payments on accounts receivable
which should have been delivered to the other party hereunder), the
parties hereto shall take or cause to be taken all such necessary
action, including, without limitation, the execution and delivery of
such further instruments and documents as may be reasonably requested
by the other party for such purposes or otherwise to consummate and
make effective the transactions contemplated hereby.
c. After Closing, Seller shall retain, and provide Buyer with
reasonable access to, copies of all insurance policies and other
insurance information reflecting Seller's Insurance, and shall make,
and diligently pursue, claims under Seller's Insurance for all
liabilities incurred prior to Closing. After Closing, Seller shall
maintain, and shall not take any steps to cancel or materially change,
buy-out or remove the Acquired Companies, as applicable, or Seller as
a named insured or as an additional insured, from any of Seller's
Insurance with respect to any events, occurrences or matters covered
by such policies that occur prior to Closing. Nothing in this
Agreement shall be construed to eliminate Seller's rights to coverage
and to make claims under Seller's Insurance for any events,
occurrences or matters which, except for this Agreement, would have
been covered by Seller's Insurance.
6.5 Public Announcements.
--------------------
Seller and Buyer will consult with each other before issuing any press release
or otherwise making any public statements with respect to the transactions
contemplated by this Agreement, and shall not issue any such press release or
make any such public statement prior to such consultation, except as may be
required by law or by obligations pursuant to any listing agreement with any
national securities exchange. Seller and Buyer shall make reasonable efforts to
make all press releases jointly and to cooperate in the making of any other
public announcements contemplated hereunder. Notwithstanding the foregoing,
nothing herein shall limit Buyer's right to issue customary "tombstone" type
announcements with respect to the transactions contemplated by the Agreement
after the Closing Date, subject to Seller's prior approval of the text and
graphics of the tombstone, which shall not be unreasonably withheld.
6.6 Employee Matters.
----------------
a. Defined Contribution Plans.
--------------------------
(i) In General. Effective September 1, 2001, participants
employed by MMT and active union employees of MMT employed in
Allentown, Pennsylvania ("PSRP Participants") ceased to actively
participate in the ProQuest Profit Sharing Retirement Plan.
Effective that same date, a profit sharing plan was established
with a Section 401(k) feature that is qualified under Sections
401(a) and 401(k) of the Code ("New 401(k) Plan") and a trust to
hold the assets under the New 401(k) Plan, which trust is a tax
exempt trust under Section 501(a) of the Code. PSRP
-32-
Participants who are Affected Employees have been eligible to
participate in the New 401(k) Plan, effective September 1, 2001.
Buyer will obtain a favorable determination letter from the
Internal Revenue Service that the New 401(k) Plan is qualified
under Sections 401(a) and 401(k) of the Code. The New 401(k) Plan
provides for the receipt of the amounts to be transferred
pursuant to paragraph (ii) of this Section and provides for the
continuation of each Code Section 411(d)(6) protected benefit for
all account balances transferred to the New 401(k) Plan. The New
401(k) Plan provides that the amounts transferred pursuant to
this Section from the PSRP are 100% vested upon transfer to the
New 401(k) Plan. The New 401(k) Plan provides credit for
participation, eligibility and vesting purposes, and for the
purpose of determining the entitlement of a Transferred
Individual to any allocation of employer contributions, for any
period of employment that is creditable under the terms of the
PSRP.
(ii) Transfer of Assets. Effective as soon as practicable after
September 1, 2001, Seller shall cause to be transferred to the
New 401(k) Plan the account balances under the PSRP (if any) of
each Transferred Individual, and each active union employee of
MMT employed in Allentown, Pennsylvania. Such transfer shall
occur in accordance with the requirement set forth in Section
414(l) of the Code. The New 401(k) Plan shall assume and be
solely responsible for all liabilities to or relating to
Transferred Individuals under the PSRP. The assets to be
transferred to the New 401(k) Plan shall be in the form of cash
and promissory notes or other evidence of indebtedness with
respect to outstanding loans made to PSRP Participants.
b. Defined Benefit Pension Plans. The following Employee Pension
Benefit Plans, which are maintained solely for the benefit of
employees of MMT, will be in effect on the Closing Date, subject to
Buyer's right to amend or terminate such plans in its sole discretion
after Closing: the Salaried Pension Plan and the Hourly Pension Plan.
Accordingly, coverage and modifications under the Salaried Pension
Plan and the Hourly Pension Plan for employees of MMT for periods
after the Closing Date will be as determined by Buyer. Seller will
make no employer contributions to the Salaried Pension Plan or the
Hourly Pension Plan for any period beginning after the Closing Date.
c. Medical, Dental and Vision Plans.
--------------------------------
(i) On the Closing Date, the Xxxx & Xxxxxx Mail & Messaging
Technologies Company Blue Cross Health Insurance Plan, which
includes medical, dental, prescription drug, and vision benefits
and covers certain active salaried employees of MMT employed in
Allentown, Pennsylvania and active union employees of MMT
employed in Allentown, Pennsylvania will be in effect, subject to
Buyer's right to amend or terminate such plan in its sole
discretion after Closing. Coverage under such plan(s) for periods
after the Closing Date will be solely the responsibility and
liability of Buyer and future benefits shall be determined by
Buyer in accordance with applicable law.
-33-
(ii) On Buyer's written request, from the Closing Date until such
date on or before December 31, 2001 as Buyer may determine upon
reasonable prior written notice ("Medical Plan Cut-off Date"),
Regular Employees will continue to participate in the Xxxx &
Xxxxxx Company Medical Plan, the Xxxx & Xxxxxx Company Dental
Plan and the Xxxx & Xxxxxx Company Vision Plan; provided that, in
the case of Affected Employees, such employees had participated
in such plans prior to the Closing Date. For that period, Buyer
will fully reimburse Seller for the costs of benefits paid on
account of benefits incurred from the Closing Date until the
Medical Plan Cut-Off Date and for third party administration
expenses for the benefit of Regular Employees. Such costs and
expenses shall be determined in accordance with the methodology
set forth in Schedule 6.6(c). Effective as of the Medical Plan
Cut-off Date, all coverage and benefits for Regular Employees
(and former employees) and their dependents under the Xxxx &
Xxxxxx Medical Plan, the Xxxx & Xxxxxx Company Dental Plan and
the Xxxx & Xxxxxx Company Vision Plan will be discontinued,
including coverage for any qualified beneficiaries under COBRA.
On and after the Medical Plan Cut-off Date, medical, dental and
vision coverage for Regular Employees (and former employees) and
their dependents will be solely the responsibility and liability
of Buyer and future benefits shall be determined by Buyer in
accordance with applicable law. Notwithstanding the immediately
preceding sentence, Buyer shall provide COBRA continuation
coverage for those current and former Regular Employees (and
their beneficiaries) who are qualified COBRA beneficiaries and
who are receiving COBRA continuation coverage as of the Medical
Plan Cut-off Date for so long as such individuals are eligible
for COBRA coverage.
d. Cafeteria Plans. On Buyer's written request, from the Closing Date
until such date on or before December 31, 2001 as Buyer may determine
upon reasonable prior written notice ("Cafeteria Plan Cut-off Date"),
Regular Employees will continue to participate in the Group Benefits
Program (consisting of a premium conversion feature and medical and
dental flexible spending accounts); provided that, in the case of
Affected Employees, such employees had participated in the Group
Benefits Program prior to the Closing Date. During that period, the
responsibilities of Buyer and Seller shall be determined in accordance
with the methodology set forth in Schedule 6.6(d). Effective on the
Cafeteria Plan Cut-off Date, all coverage and benefits for Regular
Employees (and former employees) and their dependents under the Group
Benefits Program will be discontinued, including coverage for any
qualified beneficiaries under COBRA. Notwithstanding the immediately
preceding sentence, Buyer shall provide COBRA continuation coverage
for those current and former Regular Employees (and their
beneficiaries) who are qualified COBRA beneficiaries and who are
receiving COBRA continuation coverage as of the Cafeteria Plan Cut-off
Date for so long as such individuals are eligible for COBRA coverage.
On and after the Cafeteria Plan Cut-off Date, cafeteria plan coverage
for Regular Employees (and former employees) and their dependents will
be solely the responsibility and liability of Buyer and future
benefits shall be determined by Buyer in accordance with applicable
law.
e. Disability Plans.
-----------------
-34-
(i) On the Closing Date, the short term disability plans covering
employees of MMT employed in Allentown, Pennsylvania will be in
effect, subject to Buyer's right to amend or terminate such plans
in its sole discretion. On the Closing Date, the long term
disability plan covering active salaried employees of MMT
employed in Allentown, Pennsylvania will be in effect, subject to
Buyer's right to amend or terminate such plan in its sole
discretion. Coverage for employees of MMT employed in Allentown,
Pennsylvania under such plans for periods after the Closing Date
will be solely the responsibility and liability of Buyer and
future benefits shall be determined by Buyer in accordance with
applicable law.
(ii) Affected Employee participants in the STD or LTD Plan who
are disabled on the Closing Date will continue to be eligible to
receive benefits under the STD or LTD Plan. Buyer will fully
reimburse Seller for the cost of STD or self-insured LTD coverage
for any Affected Employee who has been disabled for less than
seven months on the Closing Date and who receives benefits under
the STD or self-insured LTD Plan on and after the Closing Date.
Buyer shall not reimburse Seller for the cost of LTD coverage for
Affected Employees covered by the LTD Plan on the Closing Date.
Except as described above, STD and LTD Plan coverage on and after
the Closing Date will be solely the responsibility and liability
of Buyer and future benefits shall be as determined by Buyer.
f. Life Insurance, AD&D and Business Travel Accident Plans.
--------------------------------------------------------
(i) On the Closing Date, the AD&D Plans will be in effect,
subject to Buyer's right to amend or terminate such plans in its
sole discretion after the Closing. Coverage for employees of MMT
employed in Allentown, Pennsylvania under such plans for periods
after the Closing Date will be solely the responsibility and
liability of Buyer and future benefits shall be determined by
Buyer in accordance with applicable law.
(ii) On Buyer's written request, from the Closing Date until such
date on or before December 31, 2001, as Buyer may determine upon
reasonable prior written notice (the "Life Insurance Plan Cut-off
Date"), Regular Employees will continue to participate in the
Xxxx & Xxxxxx Company Group Term Life Insurance Plan, the Xxxx &
Xxxxxx Company Accidental Death and Dismemberment Plan and the
Xxxx & Xxxxxx Company Business Travel Accident Insurance Plan;
provided that, in the case of Affected Employees, such employees
had participated in such plans prior to the Closing Date. During
that period, Buyer's costs and expenses shall be determined in
accordance with the methodology set forth in Schedule 6.6(f).
Effective as of the Life Insurance Plan Cut-off Date, all
coverage and benefits for Regular Employees under such plans will
be discontinued. On and after the Life Insurance Plan Cut-off
Date, life insurance, AD&D and business travel accident coverage
will be solely the responsibility and liability of Buyer and
future benefits shall be determined by Buyer in accordance with
applicable law.
g. Retiree Medical Benefits.
------------------------
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(i) Allentown Employees. On the Closing Date, the retiree medical
benefits plans for employees of MMT who were employed in
Allentown, Pennsylvania will be in effect, subject to Buyer's
right to amend or terminate such plans in its sole discretion.
Subject to the indemnity in Section 9.1(d), coverage under such
plan for periods after the Closing Date will be solely the
responsibility and liability of Buyer and future benefits shall
be determined by Buyer in accordance with applicable law.
(ii) Non-Allentown Employees. On Buyer's written request, from
the Closing Date until such date on or before December 31, 2001,
as Buyer may determine upon reasonable prior written notice (the
"Retiree Medical Plan Cut-off Date"), Affected Employees of the
Acquired Companies who retire after the Closing Date (other than
retired employees of MMT who were employed in Allentown,
Pennsylvania) will continue to participate in the retiree medical
benefits portion of the Xxxx & Xxxxxx Medical Plan, pursuant to
the terms of such plan. During that period, Buyer will reimburse
Seller for the costs of benefits (and related expenses) paid as
determined in accordance with the methodology set forth in
Schedule 6.6(g). Effective as of the Retiree Medical Plan Cut-off
Date, all coverage and benefits under the Xxxx & Xxxxxx Medical
Plan for the employees of the Acquired Companies who retire after
the Closing Date will be discontinued, subject to the indemnity
in Section 9.1(d).
(iii) Seller will retain responsibility and liability (including
without limitation costs and expenses) with respect to any
retiree medical benefits for the employees of the Acquired
Companies (other than employees of MMT who were employed in
Allentown, Pennsylvania, as described in subparagraph 6.6(g)(i)
above) who retire on or prior to the Closing Date.
h. Service. The service of Affected Employees with Seller, any of the
Acquired Companies or their respective Subsidiaries shall be
recognized for purposes of eligibility, participation, vesting and
entitlement under all Employee Benefit Plans maintained by Buyer or a
member of Buyer's Controlled Group, as applicable.
i. Vacation. Buyer agrees to assume and be solely responsible for all
liabilities for or relating to the unused accrued vacation pay of
Affected Employees under Seller's vacation policy immediately prior to
the Closing Date, the liability for which shall be accrued as a
current liability on the Closing Balance Sheet. Buyer also agrees that
Affected Employees shall retain all of their rights with respect to
unused vacation pay accrued under Seller's vacation policy immediately
prior to the Closing Date the liability for which shall be accrued as
a current liability on the Closing Balance Sheet.
j. Other Arrangements. Certain of the Affected Employees are owners of
shares of stock of Seller and are subject, with respect thereto, to
the provisions of a certain Shareholders Agreement between Seller and
such Affected Employees (referred to herein as the "Equity
Employees"). All matters related thereto shall be settled between
Seller and such Equity Employees without cost or charge to any
Acquired Company. Certain of the Affected Employees are parties to
contracts with Seller providing certain compensation
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and other benefits to them from Seller in the event the Purchase and
Sale Transaction is closed. All amounts due under such arrangements
shall be the obligation of Seller.
k. Employer Matching Contribution. For the period beginning January 1,
2001 and ending on the Closing Date, Buyer shall make a matching
contribution to the trust under the New 401(k) Plan on behalf of
Affected Employees who were participants in the PSRP for all or a
portion of such period at the same rate as under the PSRP (as in
effect on the date hereof), the liability for which shall be accrued
as a current liability on the Closing Balance Sheet. Buyer shall make
such contribution as soon as practicable after December 31, 2001, but
in no event later than the date set forth under Code Section
404(a)(6). The New 401(k) Plan shall provide for such contributions on
behalf of Affected Employees.
l. MIB and Other Bonuses. Buyer and the Acquired Companies shall be
responsible for bonuses under the Management Incentive Plan ("MIB"),
the Short-Term Incentive Plan ("SIP"), and other management, sales and
employee plans that relate to periods commencing in 2001, the
liability for which shall be accrued as a current liability on the
Closing Balance Sheet. Schedule 6.6(l) describes these plans in
summary fashion.
m. Retention Bonuses. Buyer will pay all sales and retention bonuses,
if any, established with Buyer's written approval after the date of
the Letter of Understanding dated May 19, 2001. Schedule 6.6(m)
reports retention bonuses granted from the date of the Letter of
Understanding (5/19/01).
n. Tuition Reimbursement. Buyer will pay all tuition reimbursement
expenses of Affected Employees with respect to courses that have been
approved under the Xxxx & Xxxxxx Company Tuition Reimbursement Plan as
of the date hereof the liability for which shall be accrued as a
current liability on the Closing Balance Sheet.
o. RBP and SRP. Affected Employees shall cease participation in RBP
effective as of the Closing Date. Seller shall be responsible for all
liabilities and obligations that exist under the Xxxx & Xxxxxx Company
Replacement Benefit Plan ("RBP") prior to the Closing Date, including
the assumption of all liabilities thereunder which relate to the
Acquired Companies. Seller may amend RBP to provide for an additional
contribution for the period through the Closing Date, with such
contribution to be credited to participants after December 31, 2001,
and thereafter RBP distributions will be made to Affected Employees.
Affected Employees shall cease participation in SRP effective as of
the Closing Date. Buyer shall be responsible for all costs associated
with any and all Affected Employees who are participants in the Xxxx &
Xxxxxx Company Supplemental Retirement Plan ("SRP").
p. Workers Compensation. Responsibility for workers' compensation
claims in respect of the Acquired Business arising out of conditions
having an injury, or, in the case of a claim relating to occupational
illness or disease, the last significant exposure on or prior to March
31, 2001 shall remain with Seller. Buyer shall have responsibility for
workers' compensation claims in respect of the Acquired Business
arising out of conditions having
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a date of injury (or in the case of a claim relating to occupational
illness or disease, the last significant exposure) on or after April
1, 2001.
q. Assoc. Stock Purchase Plan. Affected Employees and active union
employees of MMT employed in Allentown, Pennsylvania, who are
participating in Seller's current ASPP offering period will cease
payroll deductions for the purchase of Seller's stock beginning with
the first pay period following the Closing Date. Deductions made prior
to the Closing Date which have been properly remitted to Seller will
be used to purchase shares in accordance with the provisions of the
plan.
r. Non-U.S. Plans. See Schedule 6.6(r).
s. No Obligation to Maintain Plans. Subject to the indemnification
provisions set forth in Section 9.1(d), nothing contained in this
Section 6.6 shall be construed to require Buyer to continue or
maintain after Closing any Employee Benefit Plan maintained by any
member of the Acquired Group as of the Closing Date.
t. Enhanced Severance Obligations. Buyer agrees to pay the enhanced
severance obligations listed on Schedule 4.12(m), but not including
any amounts payable as a sales completion bonus.
6.7 Competition Filings.
-------------------
As promptly as possible (but in any event not later than 10 Business Days after
the execution hereof in the case of the HSR filing required in the U.S.), Buyer
and Seller shall each file or cause to be filed by their respective Affiliates,
notification of the Purchase and Sale Transaction proposed hereunder as required
by all applicable competition laws. In connection therewith, Buyer and Seller
shall, and shall cause their respective Affiliates to, furnish promptly to each
appropriate Government Authority any additional information requested by such
Government Authority in connection with such filings and shall diligently take,
or cooperate in the taking of, all steps that are necessary or desirable and
proper to expedite the termination of any waiting period under such competition
law. Notwithstanding the foregoing, nothing contained in this Agreement will
obligate any party to agree to any disposition of assets, separate management
Commitment or any other restriction or limitation on its current or future
business or activity.
6.8 Exclusivity.
-----------
Unless this Agreement is terminated as provided by Section 8.1, and unless
Seller determines in good faith, after consulting with Xxxxxxxx & Xxxxx or other
reputable outside legal counsel that it has a legal or fiduciary obligation to
do so, and pays to Buyer $750,000 as reimbursement of its out of pocket due
diligence and other expenses, Seller will not, directly or indirectly, solicit,
initiate, negotiate or assist any proposal or offer from any Person to acquire
all or any substantial part of the Stock, the Seller Transferred Assets or the
Acquired Business.
6.9 License of Certain Intellectual Property.
----------------------------------------
a. Subject to licenses previously granted by Seller, or Seller's
Affiliates, to the extent not otherwise covered hereunder, and to the
extent Seller, or Seller's Affiliates have the
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necessary rights, as of the Closing, Seller, or Seller's Affiliates
grant to Buyer and the Acquired Companies a fully-paid worldwide,
non-exclusive license and/or sublicense, without the right to
sublicense to third parties, except to Affiliates and to Persons
licensed as users or distributors of products of the Acquired
Business, under any issued U.S. and foreign patents not included in
the Owned Intellectual Property that were filed on or before the
Closing, and other Intellectual Property rights, owned or
sublicensable by Seller, or Seller's Affiliates, to make, have made,
copy, use, make derivative works, sell, import, export and/or
distribute current and future derivative products of the Acquired
Business to the extent such patents contain claims that cover, and to
the extent such other Intellectual Property covers, the current
products and future derivative products of the Acquired Business.
b. Subject to licenses previously granted by any of the Acquired
Companies, Acquired Company Subsidiaries, the Canadian Subsidiary or
the UK Subsidiary to Seller or Seller's Affiliates, to the extent not
otherwise covered hereunder, the Acquired Companies or the Acquired
Company Subsidiaries or Buyer grant to Seller and Seller's Affiliates
a fully-paid worldwide, non-exclusive license and/or sublicense,
without the right to sublicense to third parties, except to Affiliates
and to Persons licensed as users or distributors of products of Seller
and Seller's Affiliates, under any issued U.S. and foreign patents
included in the Owned Intellectual Property, and other Intellectual
Property rights (except with respect to items covered by the Trademark
License Agreement), owned or sublicensable by the Acquired Companies
or the Acquired Company Subsidiaries, as of the Closing Date, to make,
have made, copy, use, make derivative works, sell, import, export
and/or distribute current and future derivative products of Seller and
Seller's Affiliates (other than the Acquired Companies) to the extent
such patents contain claims that cover, and to the extent such other
Intellectual Property covers, the current products and future
derivative products of Seller and Seller's Affiliates (other than the
Acquired Companies).
6.10 Financing.
---------
Buyer and Glencoe shall use their commercially reasonable efforts to obtain debt
and equity financing sufficient to consummate the Purchase and Sale Transaction.
Seller shall cooperate with Buyer and Glencoe in this matter and use its
commercially reasonable efforts to accommodate any reasonable request in
connection therewith.
6.11 Continuing Performance Obligations.
----------------------------------
Each of the Acquired Companies and the Acquired Company Subsidiaries agrees to
perform the noncompetition, transition services and supply obligations of such
entity under the provisions of the Business Sale Agreements. Buyer agrees to
satisfy any obligations to license the Xxxx & Xxxxxx Trademark Registrations
that are contained in the Business Sale Agreements. Seller agrees to assign to
Buyer any licenses granted by Seller to the Xxxx & Xxxxxx Trademark
Registrations that are contained in the Business Sale Agreements, to the extent
possible. To the extent that any such licenses may not be assigned by Seller,
Seller agrees to use reasonable commercial efforts to enforce the terms and
conditions under which such licenses were granted under the Business Sale
Agreements.
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6.12 Trademark License.
-----------------
a. Buyer hereby grants to Seller and its Affiliates, for a period no
longer than two (2) years from the Closing Date, a royalty-free right
and license to use and exploit the Xxxx & Xxxxxx Trademark
Registrations in connection with the packaging, marketing, sale,
distribution and use of the Associated Materials that use or contain
the Xxxx & Xxxxxx Trademark Registrations with respect to Associated
Materials that are in use or provided by, in inventory of, or on order
by, Seller or any of its Affiliates as of the Closing Date.
b. Seller agrees, for itself and on behalf of its Affiliates, not to
challenge or to make any claim or take any action adverse to Buyer's
ownership of the Xxxx & Xxxxxx Trademark Registrations.
6.13 Covenant not to License.
-----------------------
a. In order to obtain the benefits hereof, Buyer covenants and agrees
that, for a period equal to five years after the Closing Date, Buyer,
the Acquired Companies and the Acquired Company Subsidiaries and each
of their Affiliates shall not, directly or indirectly, anywhere in the
world use in connection with the ProQuest Information and Learning
Business or any portion thereof, or license or sublicense to any
entity for use in the ProQuest Information and Learning Business or
any portion thereof, the Xxxx & Xxxxxx Trademark Registrations and
other trademarks purchased under this Agreement. This covenant and
agreement shall in no way impact or affect any outstanding licenses or
sublicenses of the Xxxx & Xxxxxx Trademark Registrations that were
granted by an Acquiring Company or Acquired Company Subsidiary or that
otherwise constitute part of the Acquired Business and such licenses
and sublicenses shall be specifically excluded from the covenant and
agreement set forth in this Section 6.13.
b. Buyer agrees that any breach of this Section 6.13 will result in
irreparable damage to Seller for which Seller will have no adequate
remedy at law, and, therefore if such a breach should occur, Buyer
consents to any temporary or permanent injunction or decree of
specific performance by any court of competent jurisdiction in favor
of Seller enjoining any such breach, without prejudice to any other
right or remedy to which Seller shall be entitled. In the event that
any portion of this Agreement shall be determined by any court of
competent jurisdiction to be unenforceable by reason of its being
extended over too great a period of time or too large a geographic
area or over too great a range of activities, it shall be interpreted
to extend only over the maximum period of time, geographic area, or
range of activities as to which it may be enforceable. Each of the
covenants herein shall be deemed a separate and severable covenant. In
the event Buyer breaches any provision of this Agreement, Seller shall
be entitled to recover all costs of enforcement, including reasonable
attorneys' fees. It is the desire and intent of the parties that the
provisions of this Section 6.13 shall be enforced to the fullest
extent permissible under the laws and public policies applied in each
jurisdiction in which such enforcement is sought. Accordingly, a court
of competent jurisdiction is directed to modify any provision to the
extent necessary to render such provision enforceable.
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6.14 Preclosing Transfer of Assets.
-----------------------------
a. Prior to the Closing Date, Seller shall sell or cause to be sold
all of the Foreign Assets to MMT as follows:
(i) Seller shall sell the Canadian Foreign Assets to a
wholly-owned subsidiary of MMT that is formed under the laws of
Canada;
(ii) Seller shall sell the UK Foreign Assets to a wholly-owned
subsidiary of MMT that is formed under the laws of the United
Kingdom; and
(iii) the aggregate purchase price for the sales described in
clauses (i) and (ii) above shall be equal to the fair market
value of the Foreign Assets less the assumption of the Foreign
Liabilities, which amount shall be agreed upon by Buyer and
Seller prior to the Closing. Payment for this sale shall be made
in the form of a promissory note made by MMT, which shall be
assigned to Buyer on the Closing Date.
b. Prior to the Closing Date, Seller shall sell all of its interests
in Scanner LLC to MMT for a purchase price equal to the fair market
value of such interests, which amount shall be agreed upon by Buyer
and Seller prior to the Closing. Payment for this sale shall be made
in the form of a promissory note, which shall be assigned to Buyer on
the Closing Date pursuant to this Agreement.
c. Any costs incurred by Seller in connection with the transactions
contemplated in subsections (a) and (b) above, shall be reimbursed by
Buyer, including without limitation any additional tax obligation.
d. The documentation effecting the sales referenced in this Section
6.14 are attached hereto as Attachment VI.
ARTICLE VII
-----------
CONDITIONS TO CONSUMMATION OF THE TRANSACTION
7.1 Conditions to Each Party's Obligations.
--------------------------------------
The respective obligations of each party to consummate the Purchase and Sale
Transaction is subject to the satisfaction of the following conditions:
a. No statute, rule, regulation, executive order, decree, or
injunction shall have been enacted, entered, promulgated or enforced
by any court or Government Authority which prohibits or restricts the
consummation of the Purchase and Sale Transaction;
b. All waiting periods or approvals applicable to the Closing of the
Purchase and Sale Transaction under the any law contemplated by
Section 6.7 hereof, shall have terminated or expired or been obtained,
as the case may be;
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c. All Requisite Consents listed on Schedule 7.1 shall have been
obtained; and
d. No event shall have occurred which shall have resulted in a
Material Adverse Effect.
7.2 Further Conditions to Seller's Obligations.
------------------------------------------
The obligations of Seller to consummate the Purchase and Sale Transaction are
further subject to satisfaction or waiver of the following conditions:
a. The representations and warranties of Buyer contained herein shall
be true and correct in all material respects as of the date made; and
b. Buyer shall have performed and complied in all material respects
with all agreements, obligations and covenants required by this
Agreement to be performed or complied with by it on or prior to the
Closing.
7.3 Further Conditions to Buyer's Obligations.
-----------------------------------------
The obligations of Buyer to consummate the Purchase and Sale Transaction are
further subject to the satisfaction or waiver of the following conditions:
a. The representations and warranties of Seller contained herein shall
be true and correct in all material respects as of the date made;
b. Seller shall have performed and complied in all material respects
with all agreements, obligations and covenants required by this
Agreement to be performed or complied with by it on or prior to the
Closing; and
c. Buyer shall have obtained debt financing on terms reasonably
satisfactory to Buyer sufficient to consummate the Purchase and Sale
Transaction.
ARTICLE VIII
------------
TERMINATION AND ABANDONMENT
8.1 Termination.
-----------
This Agreement may be terminated at any time prior to the Closing Date:
a. by mutual written consent of Seller and Buyer;
b. by Seller at any time after October 8, 2001 if the Closing shall
not have occurred by such date;
c. by Buyer at any time after December 31, 2001 if the Closing shall
not have occurred by such date; or
d. by Seller or by Buyer, if any Government Authority of competent
jurisdiction shall have issued an order, decree or ruling or taken
other action restraining, enjoining or
-42-
otherwise prohibiting the transactions contemplated hereby and such
order, decree, ruling or other action shall have become final and
nonappealable.
8.2 Procedure and Effect of Termination.
-----------------------------------
In the event of termination of this Agreement and abandonment of the
transactions contemplated hereby by the parties, this Agreement shall forthwith
become null and void and of no further effect, without any liability on the part
of any party or its directors, officers, employees, agents or stockholders,
other than the provisions of Section 6.2 concerning confidentiality and the
provisions of the Confidentiality Agreement. Nothing in this Section 8.2 shall
relieve any party from any liability for any willful breach of this Agreement.
ARTICLE IX
----------
SURVIVAL AND INDEMNIFICATION
9.1 Survival Periods and Indemnification.
------------------------------------
a. All representations and warranties of the parties contained in this
Agreement shall survive the Closing until 12 months after the Closing
Date; provided, however, that
(i) the representations and warranties contained in Sections
4.1(a), 4.1(b), 4.1(c), 4.1(d), 4.2, 4.6(a), 4.7(d), 4.11, 4.12,
, 5.1 and 5.2, shall survive for the period of the applicable
statute of limitations,
(ii) the representations and warranties contained in Section 4.13
shall survive for a period of five years, and
(iii) the representations and warranties contained in Section
4.19 shall survive for the lesser of the applicable statute of
limitations period or five years.
b. The covenants and agreements of the parties hereto shall survive
the Closing in accordance with their terms.
c. From and after the Closing, Seller hereby agrees to indemnify and
hold harmless Buyer, the Acquired Companies and Buyer's Affiliates
(each a "Buyer Indemnified Party"), in accordance with the terms of
this Article IX, against any Damages incurred by Buyer, any Acquired
Company or Buyer's Affiliates, as a result of:
(i) any breach of any representation or warranty of Seller made
herein;
(ii) any breach of any covenant or agreement of Seller made
herein; or
(iii) any Indemnified Damages;
For the purposes of this Section 9.1(c), Damages incurred shall
include, without limitation, Damages incurred by any Buyer Indemnified
Party resulting from its representations made in writing to lenders
of, or equity investors in, Buyer if and to the
-43-
extent such Damages result from the specific subject matter and
magnitude of a breach of a representation and warranty made by Seller
herein.
d. From and after the Closing, Buyer hereby agrees to indemnify and
hold harmless Seller and Seller's Affiliates, in accordance with the
terms of this Article IX, against any Damages incurred by Seller or
Seller's Affiliates as a result of:
(i) any breach of any representation or warranty of Buyer made
herein;
(ii) any breach of any covenant or agreement of Buyer made
herein;
(iii) any obligation or liability of any Acquired Company or with
respect to the operation of the Acquired Business, except for:
(a) any Indemnified Damages; and
(b) any obligation or liability with respect to which, and
only to the extent that, such obligation or liability was
caused by a failure or breach of any representation or
warranty, or a breach or nonfulfillment of any covenant or
agreement, of Seller contained herein;
(iv) the use of the trademark and trade name "Xxxx & Xxxxxx"
after Closing by Buyer, Buyer's Affiliates, the Acquired Group,
and any licensees or sublicensees (whether direct or indirect)
thereof (other than licensees or sublicensees pursuant to the
Trademark License), and any entity that received, directly or
indirectly, any right, title or interest in the trademark and
trade name from Seller, Seller's Affiliates, or the Acquired
Group; provided, however, the indemnification obligation shall
not apply to the extent of Damages caused by Seller's and its
Affiliates', licensees' and sublicensees' use of the trademark
and trade name subsequent to Closing or any Person's use of the
trademark and trade name prior to Closing;
(v) any sales and retention bonuses established with Buyer's
written approval, the enhanced severance arrangements listed on
Schedule 4.12(m) (but not including any amounts attributable to a
sales completion bonus) and all management incentive bonuses,
long-term incentive bonuses or similar bonuses that relate to the
period commencing in 2001;
(vi) any termination, amendment, change or supplement of the
Hourly Pension, Salaried Pension and welfare benefits for
Allentown union and non-union employees, made after the Closing;
(vii) any change, modification or termination by Buyer or, after
the Closing Date, any of the Acquired Companies of any retiree
medical benefits, commitments or retiree contributions toward the
cost of retiree medical benefits for active or retired employees
or other retire medical benefit plans identified in Section
6.6(g); or
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(viii) arising from Buyer's fraud in connection with the Purchase
and Sale Transaction.
e. No Indemnifying Party shall be obligated to provide such
indemnification with respect to representations and warranties to the
Indemnified Party unless the Indemnifying Party shall have received
written notice specifying any breach in reasonable detail within the
applicable survival period set forth in Subsections 9.1(a) and 9.1(b)
with respect to the matter for which indemnification is sought;
provided, however, that claims first asserted within the applicable
survival period shall survive until finally resolved without
possibility of appeal.
9.2 Indemnification.
---------------
Subject to the other provisions of this Article IX, from and after the Closing,
the Indemnifying Party shall indemnify and hold harmless the Indemnified Party
from and against any and all Damages, whether incurred directly by the
Indemnified Party or owed by the Indemnified Party to a third party, to the
extent they are the result of any of the matters set forth in Section 9.1.
Notwithstanding anything to the contrary in this Agreement, to the extent that
any managing director of Glencoe, any employee of Glencoe, Xxxx Xxxxxxxxx or
Xxxxxxxxx Xxxxx (the "Buyer Knowledge Group") has actual knowledge on or prior
to the Closing of a breach of a representation or warranty made by Seller in
this Agreement, then neither Buyer nor any Buyer Indemnified Party shall be
entitled to indemnification pursuant to Section 9.1(c)(i) for Damages arising
from such breach of representation and warranty if and to the extent such
Damages result from the specific subject matter and magnitude of the breach that
is within the actual knowledge of the Buyer Knowledge Group; provided, however
that:
(i) this Section 9.2 shall in no way affect the calculation of
the Adjustment Amount or any indemnification claims based upon
the Indemnified Damages; and
(ii) Seller shall have the burden of proving the actual knowledge
of the Buyer Knowledge Group.
For purposes of this Section 9.2, the Buyer Knowledge Group shall be deemed to
have actual knowledge of any breach of a representation or warranty that is
reflected in any Third Party Reports.
9.3 Indemnification Amounts.
-----------------------
Notwithstanding any provision to the contrary contained in this Agreement, with
respect to Seller's obligations set forth in Section 9.1(c)(i) and Buyer's
obligations with respect to Section 9.1(d)(i), the Indemnifying Party shall not
be obligated to indemnify the Indemnified Party for any Damages with respect to
a breach of any representation or warranty unless and until the amount of all
such Damages shall equal in the aggregate $2,400,000 and then the Indemnified
Party will be entitled to indemnification for all such Damages in an aggregate
amount in excess of $1,800,000 provided, however, that in no event will Seller's
aggregate liability for Damages referred to in Sections 9.1(c)(i) or Buyer's
aggregate liability for Damage referred to in Section 9.1(d)(i), exceed
$50,000,000.
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9.4 Claims.
------
a. If an Indemnified Party intends to seek indemnification pursuant to
this Article IX, such Indemnified Party shall promptly notify the
Indemnifying Party in writing of such claim describing such claim in
reasonable detail; provided, that the failure to provide such notice
shall not affect the obligations of the Indemnifying Party except to
the extent that it is actually prejudiced thereby, subject, however,
to the time periods specified in Section 9.1 hereof. In the event that
such claim involves a claim by a third party against the Indemnified
Party, the Indemnifying Party shall have 30 days after receipt of such
notice to decide whether it will undertake, conduct and control,
through counsel of its own choosing and at its own expense, the
settlement or defense thereof, and if it so decides, the Indemnified
Party shall cooperate with it in connection therewith; provided, that
the Indemnified Party may participate in such settlement or defense
through counsel chosen by it; and provided further, that the fees and
expenses of such counsel shall be borne by the Indemnified Party.
b. The Indemnifying Party shall not, without the written consent of
the Indemnified Party, settle or compromise any action in any manner,
other than a settlement consisting solely of monetary damages.
c. If the Indemnifying Party does not notify the Indemnified Party
within 30 days after the receipt of the Indemnified Party's notice of
a claim of indemnity hereunder that it elects to undertake the defense
thereof, the Indemnified Party shall have the right to conduct and
control, through counsel of its own choosing and at the Indemnifying
Party's expense, the contest, settlement or compromise of the claim,
but the Indemnified Party shall not thereby waive any right to
indemnity therefor pursuant to this Agreement.
d. As long as the Indemnifying Party is contesting any such claim in
good faith, the Indemnified Party shall not pay or settle any such
claim. Notwithstanding the foregoing, the Indemnified Party shall have
the right to pay or settle any such claim, provided that:
(i) as long as the Indemnifying Party is contesting such claim in
good faith, any such settlement shall include as an unconditional
term thereof the delivery by the claimant or plaintiff to the
Indemnifying Party of a duly executed written release of the
Indemnifying Party from all liability and obligation in respect
of such action;
(ii) in such event Indemnified Party shall waive any right to
indemnity therefor by the Indemnifying Party; and
(iii) the Indemnified Party shall provide the Indemnifying Party
reasonable advance notice of any proposed settlement or payment
and shall not pay or settle any claim if the Indemnifying Party
shall reasonably object.
e. The Indemnified Party shall cooperate fully in all aspects of any
investigation, defense, pretrial activities, trial, compromise,
settlement or discharge of any claim in respect of which indemnity is
sought pursuant to Article IX, including, but not limited to,
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by providing the other party with reasonable access to employees and
officers (including as witnesses) and other information.
f. As to any Tax, for Tax periods that include (but do not end on) the
Closing Date the amount of Seller's indemnification obligation
pursuant to this Section 9 for that Tax shall equal the full amount of
such Tax for the entire Tax period multiplied by a fraction, the
numerator of which is the number of days from January 1, 2001 and
ending on the Closing Date and the denominator of which is 365;
provided, however, that the parties' indemnification obligations
hereunder shall be adjusted appropriately to reflect the actual
proportionate period of property ownership during the applicable Tax
period for any such Taxes imposed with respect to the ownership of
specific items of property held by an Affiliate of Seller during any
Tax period which includes the Closing Date.
g. Notwithstanding any other provision of this Section 9.4 to the
contrary, in the case of any tax audit, the Indemnifying Party shall
have the right to conduct and control, through counsel of its own
choosing and at its own expense, the contest, settlement or compromise
of the claim, but the Indemnifying Party shall not settle any such
claim without prior consultation with the Indemnified Party.
h. In addition to provisions relating to defense of claims by third
parties set forth in Section 9.4(a) above, any claim for
indemnification under this Article IX which involves environmental
investigatory, corrective or remedial action ("Remedial Action") shall
additionally be governed by the procedures set forth in this
subsection. Upon receipt of any such claim, the Indemnifying Party
shall have the right, at its option, to undertake control over such
Remedial Action (including, without limitation, retention of
consultants, selection of remedial measures and negotiations and
agreements with interested government agencies and third parties).
Where Seller is the Indemnifying Party and undertakes such control,
the Buyer and the Acquired Companies agree to provide Seller and its
agents with reasonable access to the subject facility (and to relevant
documents and personnel) for purposes of conducting Remedial Action.
Irrespective of which party undertakes such control, the parties shall
keep one another apprised of major developments relating to the
Remedial Action and shall, subject to applicable legal privileges,
make all final reports, filings, and other documents relating to the
Remedial Action available for inspection by one another upon request.
Any costs incurred after Closing by an Indemnified Party relating to
oversight of activities undertaken hereunder by an Indemnifying Party
hereunder shall not be subject to indemnification hereunder. An
Indemnifying Party shall have no obligation to undertake any Remedial
Action, or provide indemnification with respect to any matter governed
hereunder, unless, and then only to the extent that, Remedial Action
is required by Environmental Laws. Any obligation of an Indemnifying
Party to conduct or fund any Remedial Action shall be deemed satisfied
upon completion of a Remedial Action in a manner which satisfies
Environmental Laws or is otherwise acceptable to applicable
governmental authorities. The parties agree to reasonably cooperate
with one another in connection with any matter governed hereunder and
to generally conduct themselves in a cost effective manner with
respect thereto.
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i. The Indemnified Party shall take reasonable steps to mitigate
indemnifiable liabilities and Damages upon and after becoming aware of
any event which could reasonably be expected to give rise to any
liabilities and Damages that are indemnifiable hereunder. If any claim
is covered by insurance, the Indemnified Party shall use all
reasonable efforts to recover the amount of such claim from the issuer
of such insurance; provided, however, this provision shall not prevent
an Indemnified Party from making a claim against the Indemnifying
Party to preserve its rights hereunder.
j. No party shall be entitled to indemnification to the extent of any
net tax or other benefits actually received by such party as a result
of facts and circumstances relating to any indemnifiable claim or to
the extent the Closing Balance Sheet contains an accrual covering such
claim or the Working Capital for purposes of calculating the
Adjustment Amount is otherwise reduced in contemplation or as a result
of such claim
9.5 Exclusive Remedy.
----------------
a. The indemnification provisions of this Article IX shall be the sole
and exclusive remedy following the Closing for any breaches or alleged
breaches of any representation, warranty or other provision of this
Agreement or the transactions contemplated hereby; (including without
limitation any matters arising under CERCLA, any other Environmental
Laws and Taxes) provided, however, that equitable relief, including
the remedies of specific performance and injunction, will be available
with respect to any actual or attempted breach of this Agreement
occurring before Closing or with respect to the breach of any covenant
or agreement to be performed after Closing insofar as and to the
extent that such relief would be available under any law.
Notwithstanding the foregoing, the remedies and means of recourse
between the parties with respect to the subject matter of each
Ancillary Agreement is provided by such Ancillary Agreement and not by
this Agreement. Buyer shall have no right to set-off against any
payments to be made by Buyer pursuant to this Agreement or otherwise.
b. Each of the parties hereto, on behalf of itself and its officers,
directors, employees, shareholders, partners, affiliates, agents or
representatives (collectively, such party's "Representatives") agrees
not to bring any actions or Proceedings, at law, equity or otherwise,
against any other party or its Representatives, in respect of any
breaches or alleged breaches of any representation, warranty or other
provision of this Agreement, or otherwise in respect of the
transactions contemplated hereby, in a manner inconsistent with the
provisions of Section 9.5(a).
c. The parties hereby agree that no party has made any representations
and warranties, express or implied, with respect to this Agreement or
the matters contemplated hereby, except as explicitly set forth in
this Agreement.
9.6 Miscellaneous.
-------------
The Indemnifying Party shall have no liability to the extent arising from
actions taken or not taken by the Indemnified Party or its Affiliates after the
Closing Date. To the extent that the
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Indemnifying Party discharges any claim for indemnification hereunder, the
Indemnified Party shall be subrogated to all rights of the Indemnifying Party
against third parties.
ARTICLE X
---------
MISCELLANEOUS PROVISIONS
10.1 Amendment and Modification.
--------------------------
This Agreement may be amended or modified at any time by the parties hereto
pursuant to an instrument in writing signed by both parties.
10.2 Extension; Waiver.
-----------------
a. At any time, the party entitled to the benefit of any respective
term or provision hereof may:
(i) extend the time for the performance of any of the obligations
or other acts of the other party hereto;
(ii) waive any inaccuracies in the representations and warranties
contained herein or in any document, certificate or writing
delivered pursuant hereto, or
(iii) waive compliance with any obligation, covenant, agreement
or condition contained herein.
b. Any agreement on the part of either party to any such extension or
waiver shall be valid only if set forth in an instrument in writing
signed by the party entitled to the benefits of such extended or
waived term or provision.
10.3 No Waivers.
----------
Except as otherwise expressly provided herein, no failure to exercise, delay in
exercising, or single or partial exercise of any right, power or remedy by any
party, and no course of dealing between the parties, shall constitute a waiver
of any such right, power or remedy. No waiver by either party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence. No waiver shall be valid unless in writing and signed by the party
against whom such waiver is sought to be enforced.
10.4 Entire Agreement; Assignment.
----------------------------
This Agreement and the Ancillary Agreements constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all other prior Commitments and understandings, both written and
oral, between the parties hereto with respect to the subject matter hereof
(other than the Confidentiality Agreement), and shall not be assigned, by
operation of law or otherwise by either party hereto, without the prior written
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consent of the other party, and any attempted assignment in contravention hereof
shall be null and void. Notwithstanding the foregoing, Buyer may assign any and
all of its rights or obligations under this Agreement to one or more Affiliates
of Buyer (including, after the Closing, the Acquired Companies) and may
collaterally assign any and all rights, remedies, indemnities and other
privileges of Buyer under this Agreement to one or more lenders in connection
with the financing of the purchase hereunder; provided, however, that such
assignment shall not relieve Buyer of any liability or obligation to Seller or
its Affiliates hereunder.
10.5 Validity.
--------
The invalidity or unenforceability of any term or provision of this Agreement in
any situation or jurisdiction shall not affect the validity or enforceability of
the other terms or provisions hereof or the validity or enforceability of the
offending term or provision in any other situation or in any other jurisdiction.
10.6 Notices.
-------
Unless otherwise provided herein, all notices and other communications hereunder
shall be in writing and shall be deemed given, if given by hand delivery upon
personal receipt, by the intended recipient or, if given otherwise, upon
delivery to the intended recipient by confirmed facsimile transmission and
overnight carrier delivery with return receipt, at the following addresses or
facsimile numbers:
if to Seller, to
ProQuest Company
000 Xxxxx Xxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
Fax: 000-000-0000
Attention: Chief Financial Officer
with a copy to:
ProQuest Company
000 Xxxxx Xxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
Fax: 000-000-0000
Attention: General Counsel
if to Buyer, to
BH Acquisition, Inc.
x/x Xxxxxxx Xxxxxxx, X.X.X.
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Fax: 000-000-0000
Attention: Xxxxx X. Xxxxx
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with copies to:
Glencoe Capital, L.L.C.
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Fax: 000-000-0000
Attention: Chief Operating Officer
and prior to Closing to:
Xxxx & Xxxxxx Mail and Messaging Technologies Company
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000-0000
Fax: 000-000-0000
Attention: Chief Executive Officer
and after Closing to:
Xxxx & Xxxxxx Company
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000-0000
Fax: 000-000-0000
Attention: Chief Executive Officer
10.7 Schedules; Due Diligence.
------------------------
Each Schedule and certificate provided hereunder is incorporated by
reference into this Agreement and will be considered a part hereof as
if set forth herein in full; provided, however, that information set
forth on any Schedule, certification or written disclosure constitutes
a representation and warranty of the party providing the same, and not
the mutual agreement of the parties as to the facts therein stated.
The contents of the Schedules will not vary, change or alter the
language or substance of the representations and warranties contained
in this Agreement. Each Schedule is annexed hereto on the date hereof
and, if Buyer consents, will be updated as necessary or amended on or
before the Closing Date. All matters disclosed on any Schedule or an
updated Schedule shall be deemed disclosed on all other Schedules
hereto to the extent it is readily apparent from the face of such
disclosure that such disclosure applies to another schedule.
Disclosure of items not required to be disclosed shall not create any
inference of materiality.
10.8 Governing Law.
-------------
This Agreement shall be governed by, enforced under and construed in accordance
with the laws of the State of Illinois, without giving effect to any choice or
conflict of law provision or rule thereof.
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10.9 Descriptive Headings.
--------------------
The descriptive headings herein are inserted for convenience of reference only
and shall in no way be construed to define, limit, describe, explain, modify,
amplify, or add to the interpretation, construction or meaning of any provision
of, or scope or intent of, this Agreement nor in any way affect this Agreement.
10.10 Counterparts.
------------
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
10.11 Expenses.
--------
Whether or not this Agreement and the transactions contemplated hereby are
consummated, and except as otherwise expressly set forth herein, all costs and
expenses (including legal fees and expenses) incurred in connection this
Agreement and the transaction contemplated hereby shall be paid by the party
incurring such expenses, except as otherwise expressly provided herein or
mutually agreed by the Parties.
10.12 Other Rules of Construction.
---------------------------
a. References in this Agreement to sections, schedules, attachments
and exhibits are to sections of, and schedules, attachments and
exhibits to, this Agreement unless otherwise indicated.
b. Words in the singular include the plural and in the plural include
the singular.
c. The words "herein," "hereof" and "hereunder" and words of similar
import refer to this Agreement as a whole and not to any particular
provision of this Agreement.
d. References to a "party" means a party to this Agreement and include
references to such party's successors and permitted assigns.
e. References to a "third party" means a Person not party to this
Agreement.
f. The terms "dollars" and "$"means U.S. dollars.
g. The masculine pronoun includes the feminine and the neuter, and
vice versa, as appropriate in the context.
h. Wherever the word "include," "includes" or "including" is used in
this Agreement, it will be deemed to be followed by the words "without
limitation."
10.13 Authorship.
----------
The parties hereto agree that the terms and language of this Agreement were the
result of negotiations between the parties and, as a result, there shall be no
presumption that any ambiguities in this Agreement shall be resolved against
either party. Any controversy over
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construction of this Agreement shall be decided without regard to
events of authorship or negotiation.
10.14 Parties in Interest.
-------------------
This Agreement shall be binding upon and inure solely to the benefit of each
party hereto and their respective successors and permitted assigns, including
any successor, whether by way of merger, acquisition, reorganization or
otherwise, to its business operations, and nothing in this Agreement, express or
implied, is intended by or shall confer upon any other Person any rights,
benefits or remedies of any nature whatsoever under or by reason of this
Agreement. Nothing herein shall affect Seller's rights to enforce the provisions
of Section 6.6 hereof on behalf of all or any of the Affected Employees.
10.15 Specific Performance.
--------------------
The parties hereto agree that if any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached, irreparable damage would occur, no adequate remedy at law would exist
and damages would be difficult to determine, and that the parties shall be
entitled to specific performance of the terms hereof and immediate injunctive
relief, in addition to any other remedy at law or equity.
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IN WITNESS WHEREOF, each of the undersigned has caused this Purchase and Sale
Agreement to be signed by its duly authorized officer as of the date first above
written.
PROQUEST COMPANY
By: /s/ Xxxx Xxxxxxxx
--------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
General Counsel
BH ACQUISITION, INC.
By: /s/ Xxxxxxx X. XxXxxxx
--------------------------------
Name: Xxxxxxx X. XxXxxxx
Title: Assistant Secretary
This Agreement is executed by the undersigned for the sole purpose of making the
covenants set forth in Section 6.10 hereof, and for no other purpose
Glencoe Capital, LLC
By: /s/ Xxxxxxx X. XxXxxxx
--------------------------------
Name: Xxxxxxx X. XxXxxxx
Title: Managing Director
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ANNEX A
GLOSSARY OF TERMS
-----------------
Accountant: PriceWaterhouseCoopers LLP, unless
at the time of such dispute
PriceWaterhouseCoopers has a
material relationship with any party
or its Affiliates or such other
accounting firm as Buyer and Seller
may mutually agree.
Acquired Companies: Collectively, MMT, Mailmobile,
Postal Systems, Name Holding, BHFS
and Xxxx & Xxxxxx Company, a Nevada
corporation.
Acquired Company Subsidiaries: The entities listed on Schedule
4.1(h), and, at Closing, Scanner
LLC, the Canadian and UK
subsidiaries formed pursuant to
Section 6.14.
Acquired Business: As defined in the preambles.
Acquired Group: The Acquired Companies and the
Acquired Company Subsidiaries. As
appropriate to the context, the term
"Acquired Group" may mean any one
or more of the members thereof.
Adjustment Amount: The positive or negative amount by
which the Working Capital Value as
of the Closing Date differs from
$117,871,000.
AD&D Plans: The life insurance and
accidental death and dismemberment
plans covering salaried employees of
MMT employed in Allentown,
Pennsylvania.
Affected Employees: Active employees of the Acquired
Companies and the Acquired Company
Subsidiaries immediately prior to
the Closing Date (including any such
employee who is on leave of absence
or disability) but excluding:
(i) Xxxx Xxxxxxxxx;
(ii) Xxxx X'Xxxxxxxx; and
(iii) all employees employed by MMT
at the Allentown plant who are paid
on an hourly basis or covered by the
Allentown Union Contract.
Affiliate: Any Person which, directly or
indirectly, controls, is controlled
by or is under common control with
such Person
-1-
(excluding any trustee under, or any
commitment with responsibility for
administering, any ERISA Plan). A
Person shall be deemed to be
"controlled by" such other Person if
such other Person possesses,
directly or indirectly, power:
(i) to vote 20% or more of
the securities (on a fully diluted
basis) having ordinary voting power
for the election of directors or
managing general partners; or
(ii) to direct or cause the
direction of the management and
policies of such Person whether by
Commitment or otherwise.
Agreement: As defined in the preambles,
including the Annexes, Attachments
and Schedules hereto.
Allentown Union Contract: Agreement between MMT and IMMCO
Employees Association (1997-2001)
dated January 1, 1997.
Ancillary Agreements: The Income Tax Disaffiliation
Agreement, the Seller Transfer
Documents, the Trademark License
Agreement, the Trademark Assignment,
the Warrant, the Subordinated Note,
the Transition Services Agreement
and the Shareholder and Registration
Rights Agreements.
Associated Materials: Any packaging, advertising,
promotion and other materials or
documents (including but not limited
to all labels and packages, signage,
point of sale material, table cards,
bags, wrappers, cartons and other
wrapping and display materials,
coupons, promotional materials,
product manuals, stationery,
business cards, uniforms,
advertising copy and commercials),
and any paper stock and other
supplies and the like, used in
connection with the business, sales,
service, training, promotional and
other activities of Seller or its
Affiliates.
Beneficial Interest: The right to vote, receive
the dividends and distributions on
or sell or cause the sale, transfer
or any other disposition whatsoever
of, and all other rights incident to
legal and beneficial ownership of,
the securities subject to such
interest.
Xxxx & Xxxxxx Trademark
Registrations: All of the trademarks, service marks
and related registrations of "Xxxx &
Xxxxxx" identified on Schedule
1.1(b).
-2-
BHFS: Xxxx & Xxxxxx Financial Services
Company, a Delaware corporation.
Business Day: Any day excluding Saturday, Sunday
and any other day which banks in
Chicago are permitted or authorized
to close.
Business Sale Agreements: That certain Purchase and Sale
Agreement, dated October 27, 2000,
by and between Xxxx & Xxxxxx Company
and Xxxxxxx Kodak Company and that
certain Share Purchase Agreement,
dated April 18, 2001, by and among
Seller, Xxxx & Xxxxxx UK Holdings
Limited, MMT, Pitney Xxxxx, Inc. and
Pitney Xxxxx International Holdings,
Inc.
Business Software: All computer Software and
Software Documentation in any and
all forms (object code, source code,
computer manuals, and all other
forms) developed by or on behalf of
the Acquired Group, or the Acquired
Business or licensed from a
third-party provider, that is used
in the Acquired Business.
Buyer: BH Acquisition, Inc., a Delaware
corporation.
Buyer Indemnified Party: Buyer, the Acquired Companies and
Buyer's Affiliates.
Buyer Services Agreement: The agreement set forth as Annex V
attached hereto.
Cafeteria Plan Cut-off Date: As defined in Section 6.6(d).
Canadian Foreign Assets: The assets set forth on Schedule
6.14 that are owned by the Canadian
Subsidiary.
Canadian Subsidiary: Xxxx & Xxxxxx Ltd., a partnership
organized and existing under the
laws of Canada.
Cash Payment: As defined in Section 1.3(b).
Cash Working Capital Adjustment: The positive, up to a maximum
positive amount of $2,000,000, or
negative Adjustment Amount.
CERCLA: The Comprehensive Environmental
Response, Compensation and Liability
Act of 1980, as amended.
Claim: An asserted claim, demand, action,
suit, charge, Proceeding or Tax
Proceeding for Damages or equitable
relief.
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Closing: The deliveries and performances
required by Sections 2.2 and 2.3 of
the Agreement in connection with the
Purchase and Sale Transaction.
Closing Balance Sheet: As defined in Section 3.2(a).
Closing Date: The date in the U.S. on which the
Closing actually occurs and the
Purchase and Sale Transaction
becomes effective with respect to
the Acquired Business.
COBRA: Consolidated Omnibus Budget
Reconciliation Act of 1985, as
amended.
Code: The Internal Revenue Code of 1986,
as amended.
Commitments: Contracts, agreements, instruments,
plans, licenses, options,
guarantees, leases and purchase or
sale orders, indentures and
mortgages, in each case whether
written or oral.
Confidentiality Agreement: Agreement by and between Seller
(or its investment banker) and
Glencoe.
Consents: Any approvals, consents,
acknowledgements, assignments or
novations required by any third
party or Government Authority.
Controlled Group of Corporations: Each "controlled group of
corporations" within the meaning of
Section 414(b) of the Code.
Damages: Actual, out-of-pocket costs, fines
and other similar direct damages
(excluding lost profits and other
incidental, consequential, special
or indirect damages) together with
related court costs, reasonable
attorneys' fees and other costs and
expenses (including those related to
investigation, audits and expert
assistance and amounts paid in
settlement), but excluding, to the
extent thereof:
(i) any insurance proceeds
actually paid to the Indemnified
Party with respect to the
indemnification claim in question;
and
(ii) any Damages to the
extent already compensated.
Data Room: The room at Seller premises in Ann
Arbor, Michigan containing documents
and material relating to the
Acquired Companies and the Acquired
Business.
-4-
Debt: Debt (including principal, interest,
breakage fees, and prepayment
premiums and penalties, if any) of
any of the Acquired Companies and
the Acquired Company Subsidiaries
for borrowed money (excluding
capitalized leases) outstanding as
of the Closing Date and excluding
any Debt incurred by BHFS in its
receivables financings that is
treated as a liability for purposes
of calculating the Adjustment
Amount.
Disclosure Annex: Annex C to the Agreement, which is
comprised of Schedules which set
forth certain exceptions and
modifications to the representations
and warranties set forth in Article
IV of the Agreement.
Documentation: Audio, visual, image, graphic,
digital, alpha-numeric, multimedia
and other formats for capturing,
displaying and utilizing
information.
Employee Benefit Plan: Any plan, Commitment, program or
arrangement involving direct or
indirect compensation or benefits,
whether written or oral, or provided
under an employment, collective
bargaining, or other similar
agreement, or in any other manner,
including without limitation:
"employee benefit plans" within the
meaning of Section 3(3) of ERISA;
insurance coverage (including
self-insured arrangements); pension,
retirement, profit sharing,
severance, vacation, sick leave,
disability, leave of absence,
educational assistance, change in
control, workers' compensation,
supplemental unemployment, and
employee fringe benefits; deferred
compensation; bonuses; commissions;
savings plans; stock options; stock
purchase, phantom stock, stock
appreciation and any other form of
equity-related compensation or
benefits; incentive compensation and
benefits of any kind; and
post-retirement compensation and
benefits.
Employee Pension Benefit Plan: Each "employee pension benefit plan"
within the meaning of Section 3(2)
of ERISA.
Employee Welfare Benefit Plan: Each "employee welfare benefit plan"
within the meaning of Section 3(1)
of ERISA.
Environmental Condition: (i) any noncompliance with any
Environmental Laws;
(ii) any release or threatened
release of any Hazardous Materials
or petroleum, including crude oil or
any fraction
-5-
thereof which is or was in violation
of Environmental Laws;
(iii) any application or disposal
of any Hazardous Materials or
petroleum in any manner which is or
was in violation of Environmental
Laws;
(iv) any disposal or treatment,
arrangement for transport for
disposal or treatment, transport, or
accepted for transport of any
Hazardous Materials to a facility,
site or location, which, pursuant to
any applicable Environmental Laws:
(a) has been placed or
is proposed to be placed,
on the National Priorities
List or its national,
European or state
equivalent; or
(b) is subject to a
Claim, Order or other
request to take removal or
remedial action pursuant to
Environmental Laws.
(v) any storage, generation or
production of any Hazardous
Materials which is in violation of
Environmental Laws;
(vi) any contamination of
groundwaters, surface waters, soils
or sediments, as a result of the
manufacture, storage, processing,
loss, leak, escape, spillage,
disposal or other handling or
disposition by or on behalf of the
Acquired Group of any product or
substance on or prior to the Closing
as to which remedial action is
required pursuant to Environmental
Laws; or
(vii) any Hazardous Materials,
tanks, containers, cylinders, drums
or cans buried, stored or deposited
in or on any property which is in
violation of Environmental Laws.
Environmental Law: Any and all local, state, federal
and foreign laws and regulations
relating to pollution and the
discharge of materials into the
environment as enacted and in effect
on or prior to Closing.
Equity Employees: As defined in Section 6.6(j).
ERISA: Employee Retirement Income Security
Act of 1974, as amended.
-6-
Excluded Foreign Assets: Cash and the assets set forth on
Schedule 4.6(a).
Excluded Foreign Liabilities: The following liabilities and
obligations of the Foreign
Subsidiaries:
(i) any Debt of the Foreign
Subsidiaries; and
(ii) any liabilities or
obligations of the Foreign
Subsidiaries for federal, national,
foreign, provincial or local taxes
on income accruing prior to Closing;
and
(iii) other liabilities or
obligations not incurred in the
ordinary course of business, except
those reflected in the Closing
Balance Sheet.
Financial Statements: As defined in Section 4.4(a).
Foreign Assets: The assets identified on Schedule
6.14 hereto.
Foreign Liabilities: The liabilities and
obligations of the Foreign
Subsidiaries other than the Excluded
Foreign Liabilities to the extent
relating exclusively to an Acquired
Business or the Foreign Assets or as
otherwise scheduled.
Foreign Subsidiaries: Collectively, the Canadian
Subsidiary and the UK Subsidiary.
GAAP: Generally accepted accounting
principles, methods and practices
set forth in the opinions and
pronouncements of the Accounting
Principles Board and the American
Institute of Certified Public
Accountants, and statements and
pronouncements of the Financial
Accounting Standards Board.
Glencoe: Glencoe Capital, LLC, a Delaware
limited liability company.
Glossary: This Glossary of Terms incorporated
by reference as Annex A to the
Agreement.
Government Authority: Any foreign, federal, state or local
governmental commission, board,
bureau, agency or similar regulatory
or administrative body.
Group Benefits Program: Xxxx & Xxxxxx Company Group Benefits
Program.
Hazardous Materials: Any pollutant,
contaminant or hazardous substance
or material that has been so
designated or regulated or
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controlled by any Government
Authority under or by any
Environmental Laws, including PCBs,
asbestos, petroleum and
urea-formaldehyde.
Holdings Filemaster Holdings, Inc.
Hourly Pension Plan: Xxxx & Xxxxxx Mail & Messaging
Technologies Company Hourly Pension
Plan.
HSR Act: The Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as
amended.
Income Tax Disaffiliation..
Agreement: The agreement set forth as
Attachment II hereto.
Indemnified Damages: Any Damages:
(i) arising as a result of
Seller's failure to own and convey
free of any Liens all of the Stock,
Seller's or its Affiliates (other
than the Acquired Companies) failure
to own and convey free of any Liens
all of the Seller Transferred
Assets, or an Acquired Company's
failure to own and convey free of
any Liens (except Permitted Liens)
all of the assets contemplated by
this Agreement to be owned by it at
Closing;
(ii) arising as a result of
any occurrence prior to Closing of a
type for which Seller maintains
insurance, regardless of the amount
of any deductibles or retentions and
regardless of whether or not
insurance proceeds are actually
received, including occurrences the
nature covered by the following
types of insurance:
a. casualty, workers' compensation,
products liability, automobile
casualty and liability, general
commercial liability, foreign
commercial/employee general
liability, premises casualty and
liability, operations casualty and
liability, employer's liability,
property (including inland marine,
boiler, machinery, inventory,
business personal property and
business interruption) Damages,
b. catastrophic (umbrella) or excess
liability, cargo, directors and
officers, employment practices,
crime (including employee theft and
fraud), pension trust and fiduciary
liability, kidnap (including xxxxxx
and extortion), professional
liability, and errors and omissions
liability;
-8-
provided, however, that any
liability or obligation of the type
described in paragraph (a) of this
definition for which an Acquired
Company obtained its own insurance
directly pursuant to policies issued
by Zurich American Insurance Company
or it affiliates (Zurich Canada,
Zurich North America) or USA &
Canadian Automobile Physical Damage
or American International Group for
the period commencing on April 1,
2001 shall not be deemed to be an
Indemnified Damage;
and, provided, further, that
Indemnified Damages shall not
include Claims covered by Seller's
medical, dental, vision, disability
(other than long term disability) or
life insurance programs;
(iii) relating to or
arising from or in connection with
the sale of 0000 Xxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxx or the sale of
Seller's property located in
Allentown, PA;
(iv) with respect to all
sales completion bonuses to be paid
to the Chairman, CEO and management
of the Acquired Companies in
connection with the Purchase and
Sale Transaction including those
listed on Schedule 4.12(m);
provided, however, that Indemnified
Damages shall not include any of the
items listed in Section 9.1(d)(v);
(v) related to lease
obligations of 0000 Xxxxx Xxxxx,
Xxxxxxxxx Xxxxxxx, Xxxxxxxx;
(vi) all costs related
solely to the PUD commitments in
connection with the sale of the
facility at 0000 Xxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxx by Seller in
1999;
(vii) which is an Excluded
Foreign Liability; or
(viii) arising from
Seller's fraud in connection with
the Purchase and Sale Transaction;
(ix) arising under the
Income Tax Disaffiliation Agreement,
including the breach of any
representation, warranty or covenant
contained therein;
(x) arising as a result of
the use of the trademark and
tradename "Xxxx & Xxxxxx" prior to
Closing;
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(xi) pursuant to any
Business Sale Agreement except to
the extent of performance
obligations that an Acquired Company
or an Acquired Company Subsidiary
has agreed to perform pursuant to
Section 6.11;
(xii) arising from the
agreements between BHFS and Bank One
made prior to the Closing with
respect to the refinancing of BHFS
(the "Bank One Liability"); or
(xiii) arising from the
matters listed on Part A of Schedule
4.10(a) that are specifically marked
as post-Closing obligations of
Seller.
Indemnified Party: Either Seller or Buyer, as the case
may be, and their respective
Affiliates, as provided in Section
9.2.
Indemnifying Party: Either Seller or Buyer, as the case
may be, as provided in Section 9.2.
Initial Note Amount: As defined in Section 3.1.
Intellectual Property: As defined in Section 4.7(a).
Intercompany Account: The balance owing between the
Acquired Group and Seller and
Seller's other Subsidiaries
resulting from accrual of expenses
and cash transfers.
Intercompany Account-Nontrade: As used by Seller in its preparation
of its audited Financial Statements.
Intercompany Account-Trade: As used by Seller in its preparation
of its audited Financial Statements.
KPMG Letter: The letter to be delivered
by KPMG in connection with the
Closing Balance Sheet, which is
addressed to Buyer, and the form of
which is attached hereto as
Attachment VII.
Knowledge of Seller: The actual knowledge
(limited to the specific subject
matter and magnitude of which there
is actual knowledge) of any of the
following Persons: Xxxx Xxxxxxxx,
Xxxx Xxxxxxxx, Xxxxxx Mater, Xxxxx
Xxxxx, Xxxxx Xxxxxx, Xxxxxxx Xxxxxx,
Xxxxxx Xxxxxx, Xxxxxxx Xxxxx, Xxxx
Xxxxxxx, Xxxxxx Xxxxxxxxx, Xxxxx
XxXxxxxxx and Xxxx Xxxxxx.
Laws: Any federal, state, local or foreign
law, rule, regulation, judgment,
code, ruling, statute, writ, order
or ordinance or other requirement
created or imposed by any
administrative, regulatory, or other
governmental action.
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Licensed-In Intellectual Property: All material
licenses, sublicenses, and other
Commitments pertaining to
Intellectual Property or Software
owned by third parties and used in
the Acquired Business, whether
entered into on behalf of the
Acquired Business by a member of the
Acquired Group or by Seller or
Seller's Affiliates other than
off-the-shelf mass market software.
Licensed-Out Intellectual Property: All licenses,
sublicenses, and other Commitments
pertaining to Owned Intellectual
Property, Licensed-In Intellectual
Property or Software licensed to
third parties by the Acquired Group
or by Seller or Seller's Affiliates.
Liens: Liens, security interests, mortgages
or other title encumbrances.
Life Insurance Plan Cut-off Date: As defined in Section 6.6(f)(ii).
LTD Plan: Xxxx & Xxxxxx Company Long Term
Disability Plan.
Mailmobile: Xxxx & Xxxxxx Mailmobile Company, a
Delaware corporation.
Material Adverse Effect: A material adverse effect on the
Acquired Business as conducted at
Closing by the Acquired Group, taken
as a whole.
Material Commitments: As defined in Section 4.8(a).
Medical Plan Cut-off Date: As defined in Section 6.6(c)(ii).
MMT: Xxxx & Xxxxxx Mail and Messaging
Technologies Company, a Delaware
corporation.
Monetary Portion: As defined in Section 1.2(c).
Multiemployer Plan: Any multiemployer pension plan, as
defined in Section 3(37) of ERISA.
Name Holding: Xxxx & Xxxxxx Company, a Delaware
corporation.
New 401(k) Plan: As defined in Section 6.6(a).
Note Working Capital Adjustment: The amount, if any, by which the
Working Capital Value exceeds
$119,871,000.
Order: Writ, judgment, award, injunction or
decree of any Government Authority
of competent jurisdiction or any
arbitrator.
-11-
Owned Intellectual Property: As defined in Section 4.7(a).
Permitted Liens: Any of the following:
(i) Liens for current
taxes not yet due and payable;
(ii) mechanics', carriers',
workers', repairers', materialmen's,
warehousemen's and other similar
Liens arising or incurred in the
ordinary course consistent with past
practice;
(iii) in the case of
properties or assets acquired after
July 1, 2000, Liens securing all or
a part of the purchase price
thereof;
(iv) Liens in favor of
creditors which will be released at
Closing;
(v) in the case of BHFS,
Liens incurred due to BHFS's
financing arrangements,
(vi) Liens identified in
the Schedules or reflected or
referred to in the Financial
Statements (including the notes
thereto),
(vii) leases, subleases
and similar agreements,
(viii) easements,
covenants, rights-of-way and other
similar restrictions or record; and
(ix) such other Liens which
would not reasonably be expected to
materially impair the current use of
the property subject thereto.
Person: Any individual, group, partnership,
corporation, limited liability
company, association, firm, trust or
any other entity or organization.
Postal Systems: Xxxx & Xxxxxx Postal Systems, Inc.,
a Delaware corporation.
Proceeding: Any civil or criminal suit or other
action, proceeding, hearing,
disclosed investigation or legal,
administrative, arbitration or other
method of settling disputes or
disagreements or governmental
investigation, other than a Tax
Proceeding, by or before any
foreign, federal, state or local
governmental or xxx-xxxxxxxxxxxx
xxxxx, xxxxxxxxxx,
-00-
commission, board, bureau,
arbitrator, agency or
instrumentality.
ProQuest Information and
Learning Business: Seller's information and learning
republishing business as it exists
as of the Closing Date, of
marketing, selling and distributing
products and services that
incorporate proprietary third-party
information in the form of
periodicals, newspapers,
dissertations, out-of-print books
and other informational and
educational materials through
various mediums, including paper,
microfiche, electronic transmission,
CD-ROM and the Internet, but
specifically excluding the Acquired
Business.
PSC: Xxxx & Xxxxxx Publishing Services
Company.
PSRP: Xxxx & Xxxxxx Profit Sharing
Retirement Plan.
Purchase and Sale Transaction: The purchase and sale transaction
contemplated by Section 1.1 of the
Agreement.
Purchase Price: The amount to be paid by
Buyer to Seller for the Stock and
the Seller Transferred Assets,
determined in accordance with the
provisions of Section 1.2 of the
Agreement, subject to the provisions
of Article III.
Reference Balance Sheet: The unaudited
combined balance sheet of the
Acquired Group as of March 31, 2001,
excluding all Excluded Foreign
Assets and Excluded Foreign
Liabilities, all Indemnified Damages
and all reserves for any of the
foregoing.
Regular Employees: Affected Employees and eligible
employees hired by Buyer after the
Closing Date (other than employees
of MMT employed in Allentown,
Pennsylvania).
Reportable Event: As defined in Section 4043 of ERISA.
Representatives: As defined in Section 9.5(b).
Requisite Consents: All Consents required under any
Commitments with respect to the
Acquired Business, or any
Commitments included in the Seller
Transferred Assets, which are
required for the transfer, directly
or indirectly, thereof or of any
part of the Acquired Business, and
all Consents of Government
Authorities that are necessary for
the consummation of the transactions
contemplated hereby.
-13-
Retiree Medical Plan Cut-off Date: As defined in Section 6.6(g)(ii).
Salaried Pension Plan: Xxxx & Xxxxxx Mail & Messaging
Technologies Company Salaried
Pension Plan.
Scanner Business: The business of Scanner LLC.
Scanner LLC: Xxxx & Xxxxxx Imaging
Components LLC, a Delaware limited
liability company.
Schedules: The various Schedules to the
Agreement comprising the Disclosure
Annex.
Seller Asset Transfer: As defined in the preambles.
Seller Asset Transfer Documents:
Collectively, such bills of sale,
assignments, transfer documents and
assumption of obligations
agreements, agreed to by the parties
required to transfer the Seller
Transferred Assets.
Seller Transferred Assets: As defined in Section 1.1(d).
Seller's Insurance: All insurance policies
covering current and prior periods,
including insurance policies
covering Persons divested or
acquired for which Buyer may, by
virtue of this Agreement, assume
liabilities.
Software: Any information in an electronically
readable format commonly known as
software including source code,
object code, machine readable code
and, in addition thereto,
Documentation thereof and manuals
and instructions with respect
thereto.
STD Plan: Xxxx & Xxxxxx Company Short Term
Disability Plan.
Stock: The outstanding capital stock or
limited liability interests, as
applicable, of each Acquired
Company.
Subordinated Note: The Unsecured Subordinated
Promissory Note in form of
Attachment I.
Subordinated Note Amount: As defined in Section 1.3(a).
Subsidiary: A Person of which another Person
and/or their respective
Subsidiaries, as the case may be,
own directly or indirectly, such
number of shares as have more than
50% of the ordinary voting power for
the election of directors or
managers.
-14-
Tax or Taxes: Taxes of any nature excluding all
taxes measured by or with respect to
net income, but including franchise,
alternative, minimum, sales, use,
payroll, withholding, occupation,
property or excise taxes imposed by
any Government Authority (whether
federal, state, local or foreign) or
other levies and assessments imposed
by any federal, state, local or
foreign taxing authority, including
but not limited to all sales, use,
ad valorem, value added, franchise,
net or gross proceeds, withholding,
payroll, employment, excise,
property, single business, business
license, and business occupation
taxes, together with any interest
thereon, any penalties, additions to
taxes or traditional amounts
applicable thereto, and any
contractual or other obligation to
indemnify or reimburse any Person
with respect to any such taxes.
Tax Proceeding: Any civil or criminal suit or other
action, proceeding, hearing,
disclosed investigation or legal,
administrative, arbitration or other
method of settling disputes or
disagreements or governmental
investigation, in each case with
respect to Taxes, by or before any
foreign, federal, state or local
governmental or non-governmental
court, department, commission,
board, bureau, arbitrator, agency or
instrumentality.
Third Party Reports: Each of the following:
(i) Report titled "Project
File Master Financial and Accounting
Due Diligence Report," dated July
2001, prepared by Ernst & Young;
(ii) Report titled "Market
Research Report," dated September
17, 2001, prepared by The Globe
Group;
(iii) Report titled
"Strategic Technology Review Glencoe
Capital LLC Subject: Project Due
Diligence," dated August 2001,
prepared by DaVinci;
(iv) Report titled "Project
File Master Risk Management Due
Diligence," dated August 2001,
prepared by Xxxxx Private Equity and
M&A Services;
(v) Report titled "Project
File Master Due Diligence," dated
August 7, 2001, and
"Overview/Summary of Findings,"
dated August 2001, each prepared by
Xxxxxxx X. Xxxxxx, Incorporated;
-15-
(vi) Report titled "Re:
Summary of Research on Xxxxxx X.
Xxxxx, Xxxxxxxxx Xxxxx and Xxxx
Xxxxxxxxx," dated June 18, 2001,
prepared by ArmorGroup North
America;
(vii) Report titled "Re:
Summary of Additional Research on
Xxxxxx X. Xxxxx, Xxxxxxxxx Xxxxx and
Xxxx Xxxxxxxxx," dated June 29,
2001, prepared by ArmorGroup North
America;
(viii) Report titled "Re:
Summary of Research on Xxxxxxx X.
Xxxxxxx," dated July 13, 2001,
prepared by ArmorGroup North
America;
(ix) Report titled "Re:
Summary of Additional Research on
Xxxxxxx X. Xxxxxxx," dated July 24,
2001, prepared by ArmorGroup North
America;
(x) Report titled "Phase I
Environmental Site Assessment, Xxxx
& Xxxxxx Facility, Allentown,
Pennsylvania," dated July 2001,
prepared by Conestoga-Rovers &
Associates;
(xi) Report titled "Phase I
Environmental Site Assessment, Xxxx
& Xxxxxx Facility, Durham, North
Carolina," dated August 2001,
prepared by Conestoga-Rovers &
Associates;
(xii) Report titled "Phase
I Environmental Site Assessment,
Xxxx & Xxxxxx Facility, Lincolnwood,
Illinois," dated August 2001,
prepared by Conestoga-Rovers &
Associates;
(xiii) Report titled
"Amended Phase I Environmental Site
Assessments, Xxxx & Xxxxxx Facility,
Lincolnwood, Illinois," dated August
1, 2001, prepared by
Conestoga-Rovers & Associates; and
(xiv) Memorandum titled "IP
Due Diligence Report -- Executive
Summary," dated July 19, 2001,
prepared by XxXxxxxxx, Will & Xxxxx.
Trademark Assignment: That certain Assignment of Trademark
(on an "as is" basis, without
representation or warranty),
relating to the transfer of the
"Xxxx & Xxxxxx" trademark in all
jurisdictions.
Trademark License Agreement: The agreement set forth as Annex III
hereto.
-16-
Transferred Individual: Any individual who, as of the
Establishment Date for the
applicable Employee Benefit Plan
maintained by Xxxx & Xxxxxx Company
and/or its controlled group members:
(i) is an Affected
Employee; or
(ii) is neither then
actively employed by, nor then on a
leave of absence from, the Acquired
Companies and their respective
Subsidiaries, but who:
(A) was an
employee of the Acquired
Companies and their
respective Subsidiaries, or
(B) whose most
recent active employment
with Seller was with any of
the Acquired Companies or
one of their respective
Subsidiaries, or
(C) otherwise is
identified pursuant to a
methodology approved by
Seller and Buyer, which
methodology shall be
consistent with the intent
of the parties that former
employees of the Acquired
Companies and their
respective Subsidiaries
will be aligned with the
entity for which they most
recently worked; or
(iii) is an alternate payee
under a qualified domestic relations
order, a beneficiary or a surviving
spouse of an employee or former
employee described in subparagraphs
(i) or (ii).
Transition Services Agreement: The agreement set forth as
Attachment IV hereto.
UK Foreign Assets: The assets listed on Schedule 6.13
that are owned by the UK Subsidiary.
UK Subsidiary: Xxxx & Xxxxxx UK Holdings, Ltd.
U.S.: The United States of America.
VAT: A value added tax, that being a tax
imposed upon the transfer of goods
or services.
Warrant: The certain Warrant to purchase
shares of common stock of Holdings
in form of Annex V hereto, issued to
Seller by Holdings as of the Closing
Date.
-17-
Working Capital: The sum of those current
assets less the sum of those current
liabilities of the Acquired
Business, excluding all Excluded
Foreign Assets and Excluded Foreign
Liabilities, all Indemnified Damages
and all reserves for Indemnified
Damages, determined in the manner
provided in Annex B.
Working Capital Closing
Adjustment Payment: The payment required by Section 3.2
of the Agreement.
Working Capital Value: Value of the combined Working
Capital of the Acquired Group as of
the Closing Date computed on a basis
consistent with Annex B.
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