Exhibit 10.7
AGREEMENT OF SALE
BY AND BETWEEN
UNITED STATES STEEL CORPORATION
AND
ASSOCIATED MATERIALS INCORPORATED
DATED
AS OF
JANUARY 30, 1984
TABLE OF CONTENTS
1. Certain Definitions 1
2. Assets to be Acquired 1
3. Liabilities to be Assumed 2
4. Purchase Price 2
5. Closing Date 4
6. Representations and Warranties of USS 4
7. Representations and Warranties of AMI 16
8. Covenants of the Parties Pending Closing 19
9. Conditions to Closing of AMI 22
10. Conditions to Closing of USS 25
11. Further Assurances 26
12. Indemnification of AMI 26
13. Indemnification of USS 31
14. Risk of Loss 35
15. Post-Closing Covenants 35
16. Termination 40
17. Names, Trademarks, Patents, Technology, and Use Thereof 40
18. Personnel and Benefits 42
19. Expenses 47
20. Notices 47
21. Assignment of Rights 48
22. Press Releases 48
23. Brokers 49
24. Invalid Provisions 49
25. Entirety and Amendments 49
26. Headings 49
27. Paragraphs; Exhibits 50
28. Number and Gender of Words 50
29. Applicable Law; Counterparts 50
30. No Other Negotiations 50
31. Parties Bound 50
32. Confidentiality 50
33. Responsibility for Certain Taxes 52
34. Survival of Representations and Warranties 52
35. Proration of Certain Taxes and Other Expenses 52
36. Certain Definitions 53
SCHEDULES
A Organization, Qualification, and Capitalization of Subsidiaries
B-1 Alside, Inc. 1982 Financial Statements
B-2 Alside, Inc. 1983 Financial Statements
(i)
B-3 Electric Cable Operations
Constructed 1982 Balance Sheet
B-4 Tire Cord Operations
Constructed 1982 Balance Sheet
B-5 Electric Cable Operations
Constructed 1983 Balance Sheet
B-6 Tire Cord Operations
Constructed 1983 Balance Sheet
C Certain Changes
D Litigation
E Warranty Claims
F Claims with Respect to or Infringements
of any Names, Trademarks, Patents and
Patent Applications, and Use Thereof
G Trademarks
H Patents and Patent Applications
I Indebtedness
J Material Contracts
K Real Estate
L Inventory Locations
M Liens on Assets - USS
N Liens on Assets - AMI
O Directors & Officers of Alside, Inc. and
Subsidiaries
P Unpaid Notes and Accounts Receivable
Q Consents
R Multi-Employer Pension Plans
S Pension Contributions
T Balance Sheet of AMI
U Stockholders' Equity of AMI
V [Intentionally Omitted]
W Pre-Closing Financial Statements
X [Intentionally Omitted]
Y Financing of AMI
Z [Intentionally Omitted]
AA [Intentionally Omitted]
BB-1 Operation Asset Accounts to be Retained
by USS
BB-2 Alside, Inc.
Distribution of Detailed Liabilities
CC Trademarks Not Transferred
DD Material Items Under Lease or Operating Service Contracts
(ii)
ATTENTION: CERTAIN PROVISIONS OF THIS AGREEMENT ARE SUBJECT TO ARBITRATION UNDER
THE TEXAS GENERAL ARBITRATION ACT.
AGREEMENT OF SALE
This Agreement of Sale (the "Agreement") is made and entered into as
of January 30, 1984, by and between Untied States Steel Corporation, a Delaware
corporation ("USS"), and Associated Materials Incorporated, a Delaware
corporation ("AMI").
R E C I T A L S
A. USS operates as its Alside Division ("Alside") the business
formerly conducted by Alside, Inc., a Delaware corporation ("Alside, Inc.")
which was merged into USS effective the close of business on December 31, 1983
(the "Merger"), and also operates the Tire Cord Operation and the Electric Cable
Operation (the Tire Cord Operation and the Electric Cable Operation being
collectively called herein the "Operations").
B. USS wishes to sell and assign to AMI, and AMI wishes to purchase
and assume from USS, substantially all of the properties and assets and certain
of the liabilities of USS arising out of or in connection with Alside and the
Operations.
THEREFORE, in consideration of the premises and covenants herein, and
subject to the terms and conditions hereof, the parties hereto agree as follows:
A G R E E M E N T S
1. CERTAIN DEFINITIONS. Reference is made to Paragraph 36 for
definitions of certain terms used herein.
2. ASSETS TO BE ACQUIRED. On the Closing Date, USS will sell to AMI,
and AMI will purchase from USS, at the price and on the terms and conditions set
forth in this Agreement, all of USS's right, title, and interest in, to, and
under the Operation Assets and the Alside Assets except for the asset accounts
listed on Schedule BB-1. All equipment, vehicles,
furniture, fixtures, inventories, replacement parts, and other tangible personal
property shall be transferred "as is" and "where is." EXCEPT AS CONTEMPLATED IN
SUBPARARAPH 6.K(iii) HEREOF, NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THOSE
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, EXTEND TO SUCH
EQUIPMENT, VEHICLES, FURNITURE, FIXTURES, INVENTORIES, REPLACEMENT PARTS, AND
OTHER TANGIBLE PERSONAL PROPERTY.
3. LIABILITIES TO BE ASSUMED. In addition to its undertakings pursuant
to Paragraph 18, on the Closing Date, AMI will assume and agree with USS to pay,
perform, and discharge all of the Liabilities other than (a) the liabilities of
the Subsidiaries, which the parties acknowledge will remain the obligation of
the Subsidiaries unless otherwise expressly agreed herein, and (b) the liability
accounts listed on Schedule BB-2 under the caption "USS." Except as expressly
set forth in this Agreement, AMI does not hereby agree to assume any other
liabilities or obligations of USS of any nature whatsoever.
4. PURCHASE PRICE.
A. Calculation and Payment. In addition to the assumption of the
Liabilities under the provisions of Paragraph 3 above, AMI agrees to apply to
USS for the Assets an amount equal to the sum of the Net Worth determined as of
the date specified in Paragraph 5 plus $3,800,000 (the "Purchase Price"). In
order to facilitate the Closing, USS shall prepare and deliver to AMI, at least
five days prior to the Closing Date, a statement showing the amount reasonably
estimated by USS, in good faith, to be such Net Worth (the "Estimated Net
Worth"), accompanied by any information requested by AMI to verify the
reasonable nature thereof.
AMI shall pay the Purchase Price to USS as follows:
(i) On the Closing Date, AMI shall pay to USS, in
immediately available funds, an amount equal to $20,000,000 less than the
sum of the Estimated Net Worth plus $3,800,000;
(ii) On the Closing Date, AMI shall deliver to USS (a) its
promissory note in the principal amount of $5,000,000, which note shall be
unsecured and payable 60 days after the Closing Date and shall bear
interest at the Designated Rate and shall contain such other terms and
conditions as may be agreed to by the parties (the "First Note"); and (b)
its promissory note in the principal amount of $15,000,000 (the "Second
Note") (the First Note
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and the Second Note being collectively called herein the "Notes"). The Second
Note shall (i) bear interest at a rate of 13% per annum, (ii) require interest
only to be paid semi-annually in arrears during the first year after the Closing
Date, (iii) require equal payments of blended principal and interest to be paid
quarterly in arrears during the second to eighth year after the Closing Date,
(iv) be accelerated only if there is a default in the payment of principal and
interest thereunder or the repayment of any other obligation to repay money
borrowed by AMI to finance the acquisition of the Assets is accelerated, (v) be
secured by a mortgage on or a security interest in all of the collateral that
secures any other obligation of AMI to repay money borrowed by it to finance the
acquisition of the Assets, which mortgage on or security interest will be
inferior only to the security for such other acquisition financing, all of which
shall be evidenced by the Security Agreements, and (vi) shall contain such other
terms and conditions as the parties shall agree.
(iii) Not later than five Business Days following final
resolution of the Net Worth determined as of the date specified in
Paragraph 5 pursuant to Subparagraph 15.G, AMI shall pay to USS, in
immediately available funds, the amount, if any, by which the Purchase
Price exceeds the sum of the Estimated Net Worth plus $3,800,000 or USS
shall pay to AMI, in immediately available funds, the amount, if any, by
which the sum of the Estimated Net Worth plus $3,800,000 exceeds the
Purchase Price, together with, in either case, interest on such amount at
the Designated Rate from the Closing Date to the date paid.
B. Down Payment. Simultaneously with the execution of this Agreement,
AMI has delivered to USS a cash down payment of $1,000,000. In the event the
Closing occurs as contemplated hereby, such cash down payment, together with
interest accrued thereon at the Designated Rate from the date hereof to the
Closing Date, shall be credited towards the cash portion of the Purchase Price
payable to USS pursuant to Subparagraph 4.A(i). If the Closing does not occur
for any reason other than AMI's refusal to proceed with the Closing despite the
fulfillment of the conditions to its obligation to proceed with the Closing set
forth herein, such cash down payment, together with interest accrued thereon at
the Designated Rate from the date hereof to the date of repayment, shall
promptly be returned to AMI. In the event the Closing does not occur because of
AMI's refusal to proceed with the Closing despite the fulfillment of the
conditions to its obligation to proceed with the Closing set
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forth herein, USS may either (i) terminate this Agreement and retain the cash
down payment, together with any interest accrued thereon, as liquidated damages
for AMI's breach or (ii) return such cash down payment, together with interest
accrued thereon at the Designated Rate from the date hereof to the date of
repayment, and bring suit against AMI for the full amount of its damages and
pursue such other legal or equitable remedies as may be available to it.
5. CLOSING DATE. The Closing of the transactions contemplated hereby
will take place at the offices of Xxxxxxx & Xxxxxxx, 4700 InterFirst Two,
Xxxxxx, Xxxxx 00000, on February 21, 1984, or at such other place or on such
other date as AMI and USS shall mutually agree. The parties hereto agree that if
the Closing occurs on or before February 21, 1984, the Net Worth shall be
calculated as of January 31, 1984. If the Net Worth is calculated as of January
31, 1984, all results of the operations of Alside, the Operations, and the
Subsidiaries between January 31 and the Closing Date shall be for the benefit of
AMI, and the parties shall mutually agree to procedures to give effect to this
provision. If the Closing occurs after February 21, 1984, the Net Worth shall be
calculated as of such date as the parties mutually agree.
6. REPRESENTATIONS AND WARRANTIES OF USS. USS warrants that the
following statements and representations are true and correct as of the date
hereof.
A. Execution and Binding Effect. The Board of Directors of USS
has duly authorized the sale of the Operation Assets and the Alside Assets and
the other transactions contemplated hereby and the execution, delivery, and
performance of this Agreement by USS. All stockholder approval necessary for USS
to perform the transactions contemplated hereby has been obtained. USS has full
power and authority to enter into and perform its obligations under this
Agreement and is not subject to any charter, bylaw, Lien, agreement, indenture,
or judgment which would prevent, conflict with, or be breached as a result of,
the consummation of the transactions contemplated by this Agreement. This
Agreement constitutes a valid and legally binding agreement of USS, enforceable
in accordance with its terms, except as such may be affected by Debtor Relief
Laws and subject to any equitable principles limiting the right to obtain
specific performance of the obligations of USS hereunder.
B. Organization and Standing. Each of USS and the Subsidiaries is
a corporation duly organized and validly existing and in good standing under the
laws of the state of its
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incorporation shown on Schedule A and each has full corporate power and
authority to own or lease its property and carry on its business as now
conducted. Complete and correct copies of the Certificates of Incorporation and
Bylaws of USS and each of the Subsidiaries as in effect on the date hereof have
been delivered to AMI and certified by either the Secretary or an Assistant
Secretary of USS. USS and the Subsidiaries are each duly qualified and in good
standing as a foreign corporation in each domestic jurisdiction in which the
failure to be so qualified and in good standing could have a material adverse
effect on the Assets or the assets of the Subsidiaries or USS's ability to
transfer the Assets to AMI. The Subsidiaries are each duly qualified and in good
standing as a foreign corporation in the states indicated on Schedule A and, to
the knowledge of USS, no other jurisdiction has asserted a claim that any of the
Subsidiaries is required to qualify to do business as a foreign corporation in
such jurisdiction. Immediately prior to the Merger, Alside, Inc. held, and as of
the date hereof, USS holds exclusively in connection with Alside or either of
the Operations, and the Subsidiaries hold, (a) no capital stock (other than
capital stock of the Subsidiaries, preferred stock of USS Portfolio, Inc, and
one share of the common stock of each of Aluminum Company of America, American
Metal Climax, Inc., Modern Materials, Xxxxxx Aluminum & Chemical Corporation,
Xxxxxx Xxxxxxxx Corporation, and Mastic Corporation) and (b) no interest as a
partner or joint venturer in any partnership or joint venture.
C. Capitalization. The total number of shares of authorized
capital stock, issued and outstanding shares, and treasury shares of each of the
Subsidiaries are listed on Schedule A. All outstanding shares of each of the
Subsidiaries are duly and validly authorized and issued, fully paid, and
nonassessable, have not been issued in violation of any preemptive right of
stockholders, are owned beneficially by USS, at the Closing Date will also be
owned of record by USS, and are free of all Liens.
D. Financial Statements. (i) The Consolidated Balance Sheets and
Consolidated Profit Reports of Alside, Inc., as of and for the years ended
December 31, 1982, and 1983 (such statements as of and for the latter date being
called the "Alside 1983 Statements"), complete and correct copies of which are
attached hereto as Schedules B-1 and B-2, respectively, were prepared in
accordance with the system and principles of accounting employed by Alside, Inc.
in the preparation of year-end 1982 internal Alside, Inc. financial reports,
applied on a consistent basis, with inventories valued on a current
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cost basis and on a before income and franchise tax basis, and (ii) the
constructed balance sheets for each of the Operations as of December 31, 1982
(such statements as of and for the latter date being called the "Operation 1983
Statements"), complete and correct copies of which are attached hereto as
Schedules X-0, X-0, X-0, and B-6, respectively, were prepared in accordance with
the system and principles of accounting employed by USS in the preparation of
year-end 1982 internal financial reports for or with respect to each of the
Operations, applied on a consistent basis, with inventories valued on a current
cost basis and on a before income and franchise tax basis. All such financial
statements are unaudited.
E. Absence of Certain Changes. Since December 31, 1983, except as
expressly disclosed in Schedule C, there has not been: (i) any material adverse
change in the collective financial condition, earnings, businesses, or
properties of the Operations, Alside, Inc., Alside, and the Subsidiaries; (ii)
any strike, material slowdown, or demand for recognition by a labor organization
by or with respect to any of the Employees, (iii) any shutdown, material
slowdown, or cessation of any material operations conducted by any of the
Subsidiaries or constituting part of Alside or the Operations except in the
ordinary course of business, consistent with past practices; (iv) any material
violation of any contract with any labor union or other labor organization
concerning the terms and conditions of employment of any of the Employees; (v)
any material increase in the collective wages, salaries, bonuses, and other
compensation payable to or to become payable to the Employees except as required
under the provisions of any collective bargaining agreement entered into prior
to December 31, 1983, or for increases in the ordinary course of business,
consistent with past practices; (vi) any contract, commitment, or transaction
involving an amount more than $50,000 entered into by or on behalf of, or any
creation of any Obligation or liability or indebtedness, direct or indirect,
absolute or contingent, involving an amount more than $50,000 by or on behalf
of, either of the Operations, Alside, or any of the Subsidiaries, except for
contracts, commitments, or transactions entered into, or Obligations or
liabilities or indebtedness created, in the ordinary course of business,
consistent with past practices, that involve less than $500,000 each ; (vii) any
sale, assignment, lease, transfer, or other disposition of any asset included
within the Assets or any asset of the Subsidiaries having either a net book
value or disposition price in excess of $50,000 in any one case, except, in any
such case, as may have occurred in the ordinary course of business, consistent
with past practices; (viii) any sale, assignment, lease,
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transfer, or other disposition to an affiliate of USS of any asset included
within the Assets or any asset of any of the Subsidiaries, except in the
ordinary course of business, consistent with past practices; (ix) any direct or
indirect issuance, sale, purchase, or redemption or agreement to issue, sell,
purchase, or redeem any capital stock of any of the Subsidiaries; (x) any change
in the Certificates of Incorporation or Bylaws of any of the Subsidiaries; (xi)
any Tax return, report, election, or declaration filed containing any election
with respect to any material asset included within the Assets or any material
asset of any of the Subsidiaries not consistent with prior elections, except to
the extent such election is required by law to be inconsistent with prior
elections; (xii) any execution or creation of any loan agreement or evidence of
indebtedness for money borrowed exclusively by or on behalf of either of the
Operations, Alside, or any of the Subsidiaries; (xiii) any payment by or on
behalf of either of the Operations, Alside, or any of the Subsidiaries of any
liabilities included within the Liabilities or liabilities of any of the
Subsidiaries other than those paid as they mature or become due pursuant to
their terms; (xiv) any assumption, guarantee, endorsement, or incurrence of any
responsibility by or on behalf of either of the Operations, Alside, or any of
the Subsidiaries for the obligations of any other person or entity; (xv) any
investment by or on behalf of either of the Operations, Alside, or any of the
Subsidiaries of a capital nature in excess in any one case of $50,000, either by
purchase of capital stock or securities, contributions to capital, property
transfers, or otherwise or by purchase of any property or assets of any other
person or entity other than in the ordinary course of business, consistent with
past practices or reasonably necessary to complete capital projects commenced
prior to the date hereof (xvi) any new warehouse opened; or (xvii) any
destruction of assets having a net book value of $2,500,000 or more as indicated
in the internal accounting records of USS or the Subsidiaries, whether or not
covered by insurance.
F. Litigation. Except for actions commenced by USS, Alside, Inc.,
or any of the Subsidiaries to collect accounts receivable (and counterclaims or
cross-claims arising in connection therewith) or actions described in Schedule
D, there are no actions, suits, or proceedings pending or, to the knowledge of
USS threatened nor are there, to the knowledge of USS, any investigations or
inquiries pending or threatened, (i) against USS or any of the Subsidiaries, at
law or in equity, with respect to either of the Operations, Alside, Alside,
Inc., or any of the Subsidiaries or involving any assets
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included within the Assets or assets of any of the Subsidiaries (including but
not limited to those alleging the violation of any employment, health and
safety, anti-competitive practices, discrimination, environmental, or other Law)
which, if adversely resolved, could have a material adverse effect upon the
collective financial condition, earnings, businesses, or properties of the
Operations, Alside, and the Subsidiaries or (ii) that relate to or involve this
Agreement or the transactions contemplated hereby.
G. Warranty Claims. Schedule E sets forth a correct and complete
statement of (i) the cost to Alside, Inc. of warranty and product liability
claims made against Alside, Inc. and the Subsidiaries with respect to aluminum,
steel, and vinyl siding for the last six calendar years; (ii) the aggregate
amount of allowances provided by Alside, Inc. to its warehouses for warranty and
product liability claims made against Alside, Inc. and the Subsidiaries with
respect to windows and doors for the last six calendar years; (iii) the total
revenues associated with products returned to the Electric Cable Operation and
alleged to be defective for the last three calendar years; and (iv) the total
amount credited to customers' accounts with respect to products returned to the
Tire Cord Operation and alleged to be defective for the last four calendar years
involving claims over $250. This information is the Best historical financial
information readily available with respect to warranty and product liability
claims.
H. Names, Trademarks, Patents and Patent Applications. USS owns
the Names, Trademarks, and Patents and Patent Applications to be transferred and
assigned pursuant to Paragraph 17 and has not assigned, granted, licensed, or
otherwise transferred any rights therein except as set forth in Schedule F. USS
has no knowledge of claims adverse to, or infringement of, USS's or any
Subsidiary's current use of the Names, Trademarks, and Patents and Patent
Applications which are included within the Assets, except those listed in
Schedule F and those that may affect their industry class generally, and no
Name, Trademark, Patent or Patent Application has been abandoned by USS. The
Trademarks are duly registered for the benefit of USS with the governmental
agency or agencies indicated on Schedule G, each such registration is in full
force and effect, no rights therein or thereunder have been assigned or granted,
and the Trademarks constitute the only trademarks, other than the trademarks
"USS," "UNITED STATES STEEL," "U.S. STEEL," and variations thereof and the AISI
logo, used by either of the Operations, Alside, or any of the Subsidiaries. The
Patents and Patent Applications have been
8
either duly issued by or filed with, as appropriate, the governmental agency or
agencies indicated on Schedule H for the benefit of USS, each such Patent is in
full force and effect except as set forth in Schedule H, and the Patents and
Patent Applications constitute the only patents and patent applications which
USS or any of its affiliates own covering products produced by either of the
Operations, Alside, or any of the Subsidiaries.
I. Indebtedness. Schedule I is a correct and complete list of all
executory instruments, agreements, or arrangements pursuant to which USS
(exclusively on behalf of or for use in connection with either of the Operations
or Alside Inc., or any of the Subsidiaries has borrowed any money, incurred,
guaranteed, or become liable (either primarily or secondarily) for or with
respect to any indebtedness for borrowed money, or established a line of credit
for borrowed money. True and complete copies of all such instruments,
agreements, or arrangements (or written descriptions thereof, if they are not in
written form) have heretofore been delivered to AMI.
J. Contracts. USS has delivered to AMI complete and correct
copies of all material contracts (a) to which USS (as successor to Alside, Inc.
or exclusively on behalf of or for use in connection with either of the
Operations or Alside), or any of the Subsidiaries is a party and (b) to which
AMI or any Subsidiary will be a party or to which any of the Assets or any of
the assets of any Subsidiary will be subject after the Closing Date or for which
AMI will have any obligation after the Closing Date pursuant to the terms
hereof, all of which contracts are listed in Schedule J. As used in this
Subparagraph 6.J, a material contract is any: (i) executory contract for the
purchase or sale of goods, materials, supplies, equipment, or services that
requires payment after December 31, 1983, of more than $500,000; (ii)
representation, management, consulting, distribution, dealer, sales agency, or
advertising contract not terminable without cost to USS or any Subsidiary upon
notice of 30 days or less; (iii) contract with any labor union or other labor
organization concerning terms and conditions of employment; (iv) bonus, pension,
profit-sharing, retirement, stock purchase, hospitalization, life, accident, or
medical insurance, or other written plan or agreement providing employee
benefits of any kind for the Employees; (v) guaranty, take-out agreement,
assurance, or similar arrangement with respect to any instrument, agreement, or
other arrangement of the type that would have to be disclosed
9
hereunder if USS or a Subsidiary were primarily liable therefore; (vi) license
or franchise related to the business of either of the Operations, Alside, or any
of the Subsidiaries, other than operating licenses or permits issued by any
governmental body or agency; (vii) lease of a material item of personal property
or any real property; (viii) contract or commitment for charitable
contributions; (ix) agreement which restricts USS from doing business of the
type conducted by either of the Operations, Alside, or any of the Subsidiaries
anywhere in the world; (x) safe harbor lease with respect to which USS, Alside,
Inc., Alside, or any Subsidiary has sold certain tax benefits to third parties
with respect to any of the Assets or any of the assets of any Subsidiary; (xi)
agreement with respect to the license, assignment, or other transfer by or to
USS, Alside Inc., or any Subsidiary of any name, patent, patent application,
trademark, technology, or confidential information; (xii) agreement between USS
or any Subsidiary and affiliates or divisions of USS; (xiii) employment
agreement that confers special employment privileges and benefits on selected
employees; and (xiv) other agreement, instrument, contract, or document pursuant
to which AMI or any Subsidiary will be obligated, on or after the Closing Date,
to pay more than $50,000 or to sell or transfer Assets or assets of any of the
Subsidiaries having a net book value of more than $50,000 which is not otherwise
specifically included or excluded in this Subparagraph 6.J. USS, Alside, Inc.,
and the Subsidiaries have each complied in all material respects with all
provisions of such agreements required to be complied with and none of them is
in default under any such material contract if such default would permit any
other party thereto to terminate such contract, to accelerate the obligations of
USS or any of the Subsidiaries thereunder, or to exercise any other remedy that
could materially adversely affect the benefits to be received thereunder. No
event has occurred which, but for the passage of time or giving of notice or
both, would constitute such default by USS, Alside, Inc., or any of the
Subsidiaries. Neither USS, Alside, Inc., nor any of the Subsidiaries has
received any notice of default or termination under any such material contract
to which USS, Alside, Inc., or any of the Subsidiaries is a party. USS has
knowledge that the other parties to such contracts believe that such contracts
are not legally valid, binding, and enforceable in accordance with their terms,
except as such may be affected by Debtor Relief Laws and equitable remedies.
None of USS's or any of the Subsidiaries' rights under any such material
contract have been assigned nor has any such material contract been terminated
or cancelled. To the knowledge of USS, the consummation of the transactions
contemplated herein will in no way have a material
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adverse effect on the validity, enforceability, or continuity of any such
material contract except to the extent consents required by Subparagraph 8.01.E
are not obtained.
K. Real and Personal Property, Title, Etc.
(i) Schedule K contains a correct and complete list of all
real property owned by USS that is used exclusively in connection with the
Operations or Alside or by any of the Subsidiaries. Neither USS, Alside,
Inc., any of the Subsidiaries, nor any of their affiliates has materially
prejudiced title to any such real property except for (a) encumbrances of
record, (b) leases terminable by USS or a Subsidiary without cost on one
year's notice or less or terminating by their terms no later than December
31, 1984, all of which are listed on Schedule K, (c) easements or other
encumbrances for public utilities or easements or encumbrances providing or
granted to provide service to the facility thereon, which easements or
other encumbrances do not materially adversely affect the current use of
such property and will not materially adversely affect the use thereof by
AMI or the Subsidiaries after the Closing Date, assuming they continue
using the property in the manner it is currently used by USS or the
Subsidiaries, (d) Permitted Liens, and (e) any conditions which a survey
would show. Encumbrances will be considered as materially prejudicing title
only if they have a material adverse affect on the fair market value of the
property involved for the use made thereof by USS or the Subsidiaries.
Neither USS nor any Subsidiary has received any notice to the effect that
the current use of the real property listed on Schedule K violates any
zoning or other Laws. None of such real property is currently the subject
of any eminent domain or condemnation proceeding.
(ii) Schedule L contains a correct and complete list of the
locations of all inventory of the Operations, Alside, and the Subsidiaries
except inventory which is in transit.
(iii) Except as otherwise provided herein, USS and each of
the Subsidiaries, as the case may be, have good and marketable title to all
equipment, vehicles, furniture, fixtures, inventory, and all other tangible
and intangible personal property included within the Assets or assets of
any of the Subsidiaries (except that this representation is not made with
respect to equipment, vehicles, furniture, fixtures, inventory, and other
tangible and
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intangible personal property in which USS or any of the Subsidiaries claims
only a leasehold interest), in each case free and clear of Liens except for
Permitted Liens. USS has no reason to believe that AMI will not acquire
good and marketable title, in each case free and clear of Liens except for
Permitted Liens and the Liens described on Schedule M, to such Assets at
the Closing, except as such good and marketable title may be affected by
any actions of AMI or the failure to comply with the bulk sales or similar
Laws of any jurisdiction.
(iv) The lease of real property used in the Electric Cable
Operation at El Dorado, Arkansas, is a valid, binding, and enforceable
agreement, USS enjoys quiet enjoyment and nondisturbance of the premises
leased thereunder, and USS has no reason to believe that, upon consummation
of the Closing, AMI will not succeed to all of USS's rights in such lease
or will not enjoy quiet enjoyment and nondisturbance of such premises other
than by reason of the failure of the other parties thereto to consent to
such transfer.
L. No Defaults. Except to the extent the consents of third parties
(other than governmental bodies) are required, neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby by USS are events which, of themselves or with the giving of notice or
the passage of time or both, will:
(i) constitute a violation of, conflict with, or result in
any breach of, the terms, conditions, or provisions of any Law by which USS
or any Subsidiary is bound (except that no representation is made with
respect to bulk sales or similar Laws or concerning compliance with the
Xxxx-Xxxxx-Xxxxxx Anti-trust Improvements Act of 1976 and applicable
regulations thereunder) or the charter or bylaws of USS or any of the
Subsidiaries;
(ii) result in the creation or imposition of any Lien (other
than Permitted Liens) on any of the Assets to the extent USS or any
Subsidiary has control over such creation or imposition other than those
described in Schedule M; or
(iii) violate, conflict with, create a default under, or
possibly result in the acceleration of the due date under, any indenture,
agreement, or other instrument or any restriction by which either USS or
any of the Subsidiaries is bound or to which any of them is subject.
12
M. Employees. USS has delivered to AMI all employee manuals with
respect to the current terms of employment that have been furnished to
Employees. Set forth in a letter of even date herewith addressed to AMI from USS
is a complete and correct list of the names, titles, and present annual salaries
(12 times the salary paid for December 1983) of the Employees who are to be
employed pursuant to Subparagraph 18.A for whom such present annual salary and
bonus paid in 1983 with respect to services rendered in 1982, if any, is in
excess of $50,000. The names of all directors and/or officers of each of the
Subsidiaries and a description of any agreement with respect to the election or
tenure of any of them as such is set forth in Schedule O.
N. Tax Returns. The Subsidiaries have each filed, with respect to all
Tax periods (or portions thereof) ending before the date hereof, all Tax
returns, reports, and declarations of estimated Tax required to have been filed.
Neither USS, Alside, Inc., nor any of the Subsidiaries has received a notice of
deficiency or adjustment with respect to any such return or report, except as
disclosed in Schedule D. The Subsidiaries have each paid all Taxes properly
attributable to all Tax periods (or portions thereof) ending before the date
hereof or reserved on their books and records pending payment amounts reasonably
believed adequate therefor. Federal income tax waivers providing for the
extension of time for assessment with respect to Alside, Inc. and the
Subsidiaries are outstanding for the years subsequent to 1972.
O. Books and Records. The books of account of Alside and the
Operations are complete and current in all material respects in accordance with
the system and principles of accounting regularly employed by USS in its
internal accounting. The books of account of each of the Subsidiaries are
complete and current in all material respects in accordance with the system and
principles of accounting regularly employed by Alside with respect to each of
the Subsidiaries. The minute books of the Subsidiaries contain a complete and
accurate record in all material respects of any and all meetings of their
respective Boards of Directors and stockholders.
P. Investment Intent. USS intends to acquire and hold the Notes in
accordance with the terms of the Investment Letter.
Q. Assets. All of the Material fixed assets located as of May 23,
1983, on any of the real property set forth in Schedule K or on any of the
premises leased pursuant
13
to a lease set forth in Schedule J are, as of the date hereof, owned by USS or
the Subsidiaries except for (i) material items of personal property under lease
or operating service contracts, all of which items are listed on Schedule ID
(ii) items of material personal property disposed of having in any single case
neither a net book value nor a disposition price of more than $50,000; (iii)
material items of personal property disposed of having an aggregate value of
less than $1,000,000 (using, for purposes of this valuation, the greater of net
book value and disposition price of each such item); (iv) material items of
construction, maintenance, and mobile equipment belonging to contractors and
suppliers; and (v) personal belongings of employees of USS, Alside, Inc., or the
Subsidiaries or third parties.
R. Governmental Matters. No consent, approval, or authorization of, or
designation, declaration, or filing with, any governmental authority or other
governmental person or entity on the part of USS or any Subsidiary is required
in connection with the execution or delivery of this Agreement or the
consummation of the transactions contemplated hereby, except that such
representation is not made with respect to governmentally-issued licenses or
permits or concerning compliance with the Xxxx-Xxxxx-Xxxxxx Anti-trust
Improvements Act of 1976 and applicable regulations thereunder.
S. Notes and Accounts Receivable. USS believes that there is an
adequate allowance for the uncollectible notes and unreserved accounts
receivable which are included within the Alside Assets. Attached as Schedule P
is a complete and correct record for the last six calendar years of unpaid notes
and accounts receivable arising out of the Operations.
T. Consents. Schedule Q is a complete and correct list of all those
agreements, leases, licenses, contracts, instruments, and rights of USS, Alside,
Inc., Alside, or any of the Subsidiaries described on either Schedule I or J
which by their terms expressly require the consent of, or prohibit the
assignment to, a third party or parties by reason of the transactions provided
for and contemplated herein.
U. Multi-Employer Pension Plans. Schedule R contains a true copy of
the statements, if any, supplied by any multi-employer pension plan of the
withdrawal liabilities that USS (with respect to employees employed exclusively
in connection with the Operations or Alside), Alside, Inc., or any Subsidiary
would incur if any of them were to effect or incur a complete withdrawal (within
the meaning of section 4203(a) of
14
ERISA) from such plans and USS hereby undertakes to provide AMI with any
additional statements received by it prior to the Closing. Attached hereto as
Schedule S is a complete and correct list of the Contribution Base Units (within
the meaning of section 4001(a)(11) of ERISA) for each plan year ending within or
after 1979 and prior to the Closing for all multi-employer pension plans (within
the meaning of section 4001(a)(3) of ERISA) to which USS (with respect to
employees employed exclusively in connection with the Operations or Alside),
Alside, Inc., or any of the Subsidiaries contributed during such years.
V. Technology. The Technology, together with the Patents and Patent
Applications and all technology embodied in the machinery and equipment
contained within the Assets or assets of the Subsidiaries, constitutes all of
the proprietary (whether proprietary to USS or some other third party)
technology which USS is using in connection with Alside and the Operations and
which the Subsidiaries are using.
W. Bulk Sales. The net book value (valued at current cost) of the
materials, supplies, merchandise, and other inventory within the Assets
constitutes less than 2% of the net book value (valued at current cost) of the
total materials, supplies, merchandise, and other inventory of USS (on an
unconsolidated basis), and USS shall certify to AMI such information on a
state-by-state basis, if so requested.
X. Merger. Alside, Inc. was merged into USS as of the close of
business on December 31, 1983, and USS, as the surviving corporation, succeeded
to all of Alside, Inc.'s assets and liabilities, of whatever nature.
Y. Alside Pension Plan.
(i) The Plan constitutes a qualified pension plan within the
meaning of section 401(a) of the Code and is the subject of a favorable
determination letter with respect thereto, a copy of which has been
furnished to AMI.
(ii) The Plan satisfies all applicable requirements of ERISA in
all material respects.
(iii) The unfunded past service liability under the Plan, as of
the date of the last actuarial valuation (December 31, 1982), did not
exceed $1,200,000.
15
(iv) No accumulated funding deficiency within the meaning of
section 412 of the Code exists with respect to the Plan and no waiver of
any minimum funding requirement with respect to the Plan has been requested
from or issued by the Internal Revenue Service under section 412 of the
Code.
(v) Neither USS nor any entity that is a party in interest under
section 3(14) of ERISA by virtue of being affiliated with USS has been
involved in any prohibited transaction within the meaning of section 406 of
ERISA or section 4975 of the Code with respect to the Plan.
7. REPRESENTATIONS AND WARRANTIES OF AMI. AMI warrants that the
following statements and representations are true and correct as of the date
hereof.
A. Organization and Standing of AMI. AMI is a corporation duly
organized and validly existing and in good standing under the laws of Delaware.
B. Execution and Binding Effect. AMI has full power and authority to
enter into and perform its obligations under this Agreement and is not subject
to any charter, bylaw, Lien, agreement, indenture, or judgment which would
prevent, conflict with, or be breached as a result of, the consummation of the
transactions contemplated by this Agreement. Complete and correct copies of the
Certificate of Incorporation and By laws of AMI as in effect on the date hereof
have been delivered to USS, certified by the Secretary or Assistant Secretary of
AMI. The Board of Directors of AMI has duly authorized the purchase of the
Assets, assumption of the Liabilities, and the other transactions contemplated
hereby and the execution, delivery, and performance of this Agreement by AMI.
All stockholder approval necessary for AMI to perform the transactions
contemplated hereby has been obtained. This Agreement constitutes a valid and
binding agreement of AMI, enforceable in accordance with its terms, except as
such may be affected by Debtor Relief Laws and subject to any equitable
principles limiting the right to obtain specific performance of the obligations
of AMI hereunder.
C. Litigation. There is no action, suit, or proceeding pending or, to
the knowledge of AMI, threatened, nor is there, to the knowledge of AMI, any
investigation or inquiry pending or threatened, at law or in equity, against AMI
or involving the possibility of any judgment, order, or other
16
decision, which action, suit, proceeding, investigation, or inquiry might
materially impair the ability of AMI to duly perform its obligations under this
Agreement, including payment of the Notes.
D. Notes and Security Agreements. The Notes and the Security
Agreements have been duly authorized and, when executed, issued (in the case of
Notes), and delivered (in the case of the Security Agreements), will be valid
and binding agreements of AMI, enforceable in accordance with their respective
terms, except as such may be affected by Debtor Relief Laws and subject to any
equitable principles limiting the right to obtain specific performance of the
obligations of AMI. Assuming the veracity of the information contained in the
Investment Letter, the Notes will not required the approval of any governmental
authority for their issuance.
E. Governmental Matters. No consent, approval, or authorization of, or
designation, declaration, or filing with, any governmental authority or other
governmental person or entity on the part of AMI is required in connection with
the execution or delivery of this Agreement or the consummation of the
transactions contemplated hereby. The foregoing representation, to the extent it
relates to the absence of any registration requirement under federal, or state
securities or "blue sky" Laws, assumes the veracity of the information contained
in the Investment Letter. No filing is required in connection with the
transactions contemplated hereby under the Xxxx-Xxxxx-Xxxxxx Anti-trust
Improvements Act of 1976.
F. No Defaults. Except to the extent the consents of third parties
(other than governmental bodies) are required, neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby by AMI are events which, of themselves or with the giving of notice or
the passage of time or both, will:
(i) constitute a violation of, conflict with, or result in any
breach of, the terms, conditions, or provisions of any Law by which AMI is
bound or the charter or bylaws of AMI (provided that no representation is
made with respect to bulk sales or similar Laws and that such
representation made with respect to any registration requirements under
federal or state securities or "blue sky" Laws assumes the veracity of the
information contained in the Investment Letter;
17
(ii) result in the creation or imposition of any Lien (other than
Permitted Liens) on any of the Assets to the extent AMI has control over
such creation or imposition, other than those described in Schedule N and
the mortgage and security interest of USS created pursuant to the Security
Agreements; or
(iii) violate, conflict with, create a default under, or possibly
result in the acceleration of the due date under, any indenture, agreement,
or other instrument or any restriction by which AMI is bound or to which it
is subject.
G. Investment Intent. AMI is not acquiring the Assets with a view
towards the sale or distribution of any security which constitutes a part or may
be issued in respect thereof. In acquiring the Assets, AMI is acting solely on
its own behalf and not as an agent, broker, finder, or otherwise on behalf of
any third party or parties.
H. Liens and Encumbrances. Other than as set forth in the Security
Agreements or in Schedule N and except for Permitted Liens, AMI has created no
Liens.
I. ERISA. The funds used to acquire the Assets shall not be out of any
"Separate Account" as defined in ERISA if the result would be a prohibited
transaction.
J. Information Supplied. AMI and its authorized representatives have
been supplied to their satisfaction with answers to all questions they have
asked concerning information contained in the accounting records of USS and
Alside, Inc.
K. Financial Statements. The balance sheet of AMI attached hereto as
Schedule T fairly reflects the financial position of AMI as of December 31,
1983.
L. Ownership of AMI. All of the shares of capital stock of AMI are
owned, of record and beneficially, as set forth in Schedule U as of January 30,
1984.
M. Financing Status. AMI has delivered to USS all final documents with
respect to its financing of the transactions contemplated hereunder as such
documents have become available.
18
8. COVENANTS OF THE PARTIES PENDING CLOSING.
8.01 Affirmative Covenants of USS.
Pending the Closing, USS will or will cause each of the Operations,
Alside, and each of the Subsidiaries to:
A. Access. At the reasonable request of AMI from time to time,
give or cause to be given to AMI and its officers, employees, accountants,
counsel, and accredited representatives: (i) upon 24 hours' notice (which notice
need not be in writing), full access during normal business hours to all of the
property, accounts, books, minute books, deeds, papers, insurance policies,
licenses, agreements, contracts, commitments, Tax returns applicable to the
Operations, Alside, Alside, Inc., or the Subsidiaries or the Assets and the
assets of any of the Subsidiaries (but not to any portion of any Tax return of
USS other than those portions applicable exclusively to the Operations, Alside,
Alside, Inc., or any of the Subsidiaries or the Assets), records, and files of
every character, equipment, machinery, fixtures, furniture, vehicles, notes and
accounts payable and receivable, and inventories of either of the Operations,
Alside, Alside, Inc., or any of the Subsidiaries; and (ii) all information
concerning the affairs of either of the Operations, Alside, Alside, Inc., or any
of the Subsidiaries, including unaudited balance sheets, profit and loss
statements, and any other information concerning the financial condition of
either of the Operations, Alside, Alside, Inc., or any of the Subsidiaries,
provided that each such person first enter into an agreement with USS to
maintain in confidence any information obtained as a result thereof
substantially in the form of the agreement entered into by Xxxxxxx X. Xxxxxxxx
on January 18, 1983.
B. Conduct of Business. Conduct the business and operations of
the Operations, Alside, and the Subsidiaries in the ordinary course and, in so
doing, use its diligent efforts to preserve the business and organization of the
Operations, Alside, and the Subsidiaries and preserve their respective
relationships with employees, suppliers, customers, lessors, and others having
business relationships with each of them.
C. Notice of Developments. Notify AMI of any material problems or
developments with respect to the business or operations of either the
Operations, Alside, or any of the Subsidiaries.
19
D. Notice of Breach. Promptly upon becoming aware thereof, give
detailed written notice to AMI of the occurrence of, or the impending or
threatened occurrence of, any event which would cause or constitute a breach, or
would have caused or constituted a breach had such event occurred or been known
to USS prior to the date of this Agreement, of any of its representations and
warranties contained or referred to in this Agreement or in any document
delivered in accordance with the terms hereof.
E. Obtaining Consents. Pursuant to AMI's request, use diligent
efforts to obtain or cause to be obtained all consents requested by AMI.
Pursuant to AMI's request with respect to any such agreements, leases, licenses,
contracts, instruments, and rights listed on Schedule I or J, USS will use
diligent efforts to obtain or cause to be obtained all certificates of the other
parties thereto (i) to the effect that neither of the Operations, Alside, nor
any of the Subsidiaries is in default thereunder nor has any event occurred
that, with notice and/or lapse of time, would be a default thereunder and (ii)
as to all other matters reasonably requested by AMI; provided that USS shall not
be required to offer or pay any consideration to the person from whom such
consent or certificate is to be obtained unless AMI agrees to reimburse USS for
such consideration.
F. Notice of Litigation. Upon becoming aware thereof, immediately
notify AMI of any order or decree or any complaint praying for an order or
decree restraining or enjoining the consummation of this Agreement or the
transactions contemplated hereunder or of any notice from any Tribunal of its
intention to institute an investigation into, or institute a suit or proceeding
to restrain or enjoin the consummation of, this Agreement or such transactions
or to nullify or render ineffective this Agreement or such transactions if
consummated.
G. Permits, Licenses, and Bonds. As soon as practicable, prepare
and deliver to AMI a list of all bonds and governmentally-issued licenses and
permits currently in effect for the Operations, Alside, and the Subsidiaries to
carry on their current activities and operations or with respect to which USS or
any Subsidiary has received notice that it should obtain such bond, license, or
permit, and take all action reasonably requested by AMI in order for AMI and the
Subsidiaries to obtain (by assignment or otherwise) or retain, as appropriate,
no later than the Closing Date, all bonds and governmentally-issued licenses and
permits necessary for AMI and the Subsidiaries to carry on the same activities
and
20
operations as are carried on by the Operations, Alside, and the Subsidiaries at
the Closing Date; provided that USS shall not be required to offer or pay any
consideration to the person from whom such bond, license, or permit is to be
obtained unless AMI agrees to reimburse USS for such consideration.
H. Multi-Employer Pension Plans. As soon as practicable, USS will
request each multi-employer pension plan (within the meaning of section
4001(a)(3) of ERISA) to which USS, Alside, Inc., or any of the Subsidiaries were
obligated to contribute with respect to the Operations, Alside, Alside, Inc., or
any of the Subsidiaries to provide (i) a statement of the withdrawal liabilities
USS, Alside, or any Subsidiary would incur if any of them were to effect or
incur a complete with-drawal (within the meaning of section 4203(a) of ERISA)
from such plans, (2) the date and calculations upon which such statement is
based, (3) the total unfunded vested benefits under such plan for each plan year
ending between 1978 and prior to the Closing, and (4) the Contribution Base
Units for all employers under such plans for each of such plan years.
8.02 Negative Covenants of USS.
Between the date of this Agreement and the Closing Date, without the
written consent of AMI, USS covenants that it will not take, and it will cause
the Operations, Alside, and each of the Subsidiaries not to take, any action
which will cause the representations and warranties that are to be made on the
Closing Date by USS not to be true and correct as of such date.
8.03 Affirmative Covenants of AMI
Pending the Closing, AMI will:
A. Notice of Developments. Notify USS of any material problems or
developments with respect to the business or operations of AMI or with respect
to its financing of the transactions contemplated hereunder and promptly furnish
USS with copies of any final documents with respect to such financing as they
become available.
B. Notice of Breach. Promptly upon becoming aware thereof, give
detailed written notice to USS of the occurrence of, or the impending or
threatened occurrence of, any event which would cause or constitute a breach, or
would have caused or constituted a breach had such event occurred or been known
to AMI prior to the date of this Agreement, of any of its rep-representations
and warranties contained or referred to in this
21
Agreement or in any document delivered in accordance with the terms hereof.
C. Notice of Litigation. Upon becoming aware thereof, immediately
notify USS of any order or decree or any complaint praying for an order or
decree restraining or en-joining the consummation of this Agreement or the
transactions contemplated hereunder or of any notice from any Tribunal of its
intention to institute an investigation into, or institute a suit or proceeding
to restrain or enjoin the consummation of, this Agreement or such transactions
or to nullify or render ineffective this Agreement or such transactions if
consummated.
9. CONDITIONS TO THE CLOSING OF AMI. The obligation of AMI to proceed
with the Closing shall be subject to the fulfillment of the following
conditions (unless expressly waived in writing by AMI) on or prior to the
Closing Date:
A. Compliance with Agreement. USS shall have performed all of the
covenants and agreements as set forth in this Agreement to be performed by it at
or prior to the Closing, and USS shall have so certified to AMI.
B. Representations True. The representations and warranties of
USS shall be true on the Closing Date, as if made on such date, and there shall
be no breach of any representation or warranty of USS herein contained, except,
in either case, for changes provided for or contemplated by this Agreement, and
USS shall have so certified to AMI.
C. Consents. AMI shall have received all consents and
certificates requested by it pursuant to Subparagraph 8.01.E.
D. Noncompetition and Confidentiality Agreement. USS shall have
entered into a Noncompetition and Confidentiality Agreement in form and
substance satisfactory to AMI.
E. Investment Intent. USS shall have executed and delivered to
AMI the Investment Letter with respect to the Notes.
F. No Litigation. No action or proceeding shall be pending or
threatened that is challenging or investigating the validity of this Agreement
or seeking to delay, or demanding damages in the case of, the consummation of
the transactions for which this Agreement provides which, in the reasonable
opinion of counsel for AMI, is material to the transactions herein contemplated.
22
G. Certificates, Etc. USS shall have delivered to AMI, in
substance and form satisfactory to AMI's counsel, such certificates, documents,
and instruments as AMI's counsel may reasonably request in order to give
evidence of the authority of USS to enter into and to perform this Agreement and
to give effect to the transactions contemplated hereby.
H. Opinion. AMI shall have received an opinion, dated as of the
Closing Date, from the General Counsel or Assistant General Counsel-Corporate of
USS, in form and substance satisfactory to AMI's counsel.
I. Transfer of Assets. USS shall have executed and delivered all
such conveyances, deeds of special warranty, assignments, bills of sale, stock
powers, and other documents or instruments of transfer and all such other papers
necessary to vest in AMI all of its respective right, title, and interest in,
to, and under the Assets to be acquired as specified in Paragraph 2 in the
manner contemplated herein, in form and substance satisfactory to AMI's counsel.
J. Resignation of Present Officers and Directors. USS shall have
delivered or caused to be delivered to AMI the written resignations of such
officers and directors of each of the Subsidiaries as may be requested by AMI.
K. Employee Contracts and Covenants. USS shall have assigned to
AMI by appropriate instrument delivered at the Closing all its right, title, and
interest in, to, and under employment contracts, covenants not to compete, and
similar agreements, if any, with any of the Employees employed by AMI pursuant
to Subparagraph 18.A.
L. Collection of Receivables. USS shall have constituted and
appointed AMI and its successors and assigns, effective from and after the
Closing Date, the true and lawful attorneys for USS, solely with respect to each
of the Operations and Alside, pursuant to a power of attorney that is mutually
agreed upon by the parties hereto, so that AMI shall have the right and
authority to collect for its own account all accounts receivable and similar
items which are a part of the Assets and to endorse (but only for deposit in the
accounts of AMI) with the name of USS or Alside, Inc., as the case may be, any
checks or drafts received in payment of any such items; provided AMI shall
submit monthly to USS summaries of such action and copies of, or access to, all
relevant documentation.
23
M. Title Insurance. AMI shall have obtained at its own expense,
title insurance policies issued by title insurance companies satisfactory to
AMI, insuring title to all real property and the leasehold interest in all real
property included in the Assets or assets of the Subsidiaries in amounts and
containing terms and provisions satisfactory to AMI.
X. Xxxxx and Xxxxxx of Attorney. USS shall have delivered to AMI
a correct and complete list, as of the Closing Date, setting forth the name of
each bank in which USS (with respect to either of the Operations or Alside) or
any of the Subsidiaries has an account or safe deposit box, the names of the
persons authorized to draw thereon or to have access thereto, and the name of
each person holding a power of attorney from USS (with respect to either of the
Operations or Alside) or any of the Subsidiaries. To the extent requested by AMI
with respect to any such bank account or safe deposit box that AMI acquires or
that belongs to any Subsidiary, the names of the persons authorized to draw
thereon or to have access thereto shall have been modified. To the extent
requested by AMI, any such power of attorney shall have been revoked.
O. Increase in Fixed Assets. The aggregate net book value of the
fixed assets of the Operations, Alside, and the Subsidiaries, as reflected in
the Net Worth as of the Closing Date, shall be no more than $500,000 greater
than the aggregate net book value of the fixed assets of the Operations, Alside,
Inc., and the Subsidiaries as of December 31, 1983.
P. Pre-Closing Financial Statements. USS shall have delivered to
AMI a detailed statement of accounts receivable and inventory of Alside and the
Operations as of the end of the last month prior to the Closing Date for which
USS internal financial reports shall be available in the form attached hereto as
Schedule W.
Q. Financing. AMI shall have obtained satisfactory financing for
the transactions contemplated hereby.
R. Amercable. AMI shall have obtained satisfactory evidence that
C. Xxxx Xxxxxxx owns, of record and beneficially, all of the outstanding capital
stock of Amercable Corp.
S. Permits, Licenses, and Bonds. AMI and the Subsidiaries shall
have obtained (by legally effective assignment or otherwise) or retained, as
appropriate, such bonds and such governmentally-issued licenses and permits as
may be necessary for AMI and the Subsidiaries to carry on the same
24
activities and operations that the Operations, Alside, and the Subsidiaries are
carrying on immediately prior to the Closing.
T. Research Contract. USS and AMI shall have entered into an
agreement, in form and substance satisfactory to AMI, for USS to provide to AMI
the same research services for the Tire Cord Operation as are budgeted for the
Tire Cord Operation in the authorized USS 1984 Research Budget. AMI shall pay
USS for such services fees equal to USS's then prevailing fees to third parties.
Such agreement shall be effective through December 31, 1984, with provision for
a one-year renewal on mutually acceptable terms and conditions.
U. Pension Liability. AMI shall have obtained USS's good faith
estimate of the amounts that would be payable by AMI pursuant to Subparagraph
18.G if the events giving rise to AMI's liability thereunder were to occur on
the Closing Date.
10. CONDITIONS TO CLOSING OF USS.
The obligation of USS to proceed with the Closing under the Agreement
shall be subject to the fulfillment of the following conditions (unless
expressly waived in writing by USS) on or prior to the Closing Date:
A. Compliance with Agreement. AMI shall have performed all of the
covenants and agreements as set forth in this Agreement to be performed by it at
or prior to the Closing Date and AMI shall have so certified to USS.
B. Representations True. The representations and warranties of
AMI shall be true on the Closing Date, as if made on such date, and there shall
be no breach of any representations or warranties of AMI herein contained,
except, in either case, for changes provided for or contemplated by this
Agreement, and AMI shall have so certified to USS.
C. Opinion. USS shall have received an opinion, dated as of the
Closing Date, from counsel for AMI, in form and substance satisfactory to USS.
D. No Litigation. No action or proceeding shall be pending or
threatened that is challenging or investigating the validity of this Agreement
or seeking to delay, or demanding damages in case of, the consummation of the
transactions for which this Agreement provides which, in the reasonable opinion
of counsel for USS, is material to the transactions herein contemplated.
25
E. Certificates, Etc. AMI shall have delivered to USS, in
substance and form satisfactory to counsel to USS, such certificates, documents
and instruments as counsel to USS may reasonably request in order to give
evidence of the authority of AMI to enter into and perform this Agreement and to
give effect to the transactions contemplated hereby.
F. Condition of No Default. No event shall have occurred and be
continuing on the Closing Date which, with notice or lapse of time or both,
would constitute a default or an event of default with respect to any of the
Notes or under the Security Agreements.
G. Financing. AMI shall have obtained financing on terms and
conditions at least as favorable to it as the terms set forth on Schedule Y.
H. Assumption of Liabilities. AMI shall have executed and
delivered all such assignments, assumption agreements, and other documents or
instruments necessary for AMI to assume, or to evidence the assumption by AMI
of, or AMI's agreement to perform, the Liabilities to be assumed pursuant to
Paragraph 3 in the manner contemplated herein, in form and substance
satisfactory to counsel to USS.
11. FURTHER ASSURANCES. From and after the Closing Date, upon the
reasonable request of the other party hereto, AMI and USS shall cooperate with
each other and perform all such further acts and shall execute, acknowledge, and
deliver all such further deeds, assignments, transfers, conveyances, powers of
attorney, instruments, documents, agreements, and assurances as may be required
to convey and transfer to, and vest in, AMI all the Assets to be acquired as
specified in Paragraph 2, to protect AMI's right, title, and interest in and
enjoyment of all such Assets, to provide for the assumption of the Liabilities
to be assumed pursuant to Paragraph 3, and as may be appropriate otherwise to
carry out the transactions contemplated by this Agreement.
12. INDEMNIFICATION OF AMI.
A. General. From and after the Closing, subject to the conditions
hereinafter set forth, USS shall indemnify and hold harmless each AMI Indemnitee
against any Losses caused by or arising out of (i) any claim made against the
AMI Indemnitee in respect of any liabilities or obligations of USS or any
Subsidiary (whether absolute or contingent) other than the Liabilities to be
assumed pursuant to Paragraph 3; (ii) any breach or
26
default in the performance by USS of any covenant or agreement of USS contained
in this Agreement or any agreement, certificate, document, or instrument
delivered in connection with the transactions contemplated hereby, (iii) any
breach of warranty or inaccurate or erroneous representation made as of the date
hereof or as of the Closing Date by USS herein or in any agreement, certificate,
document, or instrument delivered by or on behalf of USS in connection with the
transactions contemplated hereby; and (iv) the failure of USS or AMI to comply
with bulk sales, fraudulent conveyance, or similar Laws of any jurisdiction in
connection with the sale of the Assets; provided, however, that such
indemnification shall not apply to (a) any Losses suffered by any AMI Indemnitee
which arise pursuant to (ii) or (iii) above if the existence and the extent of
such breach, default, breach of warranty, inaccurate or erroneous representation
is made known in writing to AMI or the holder of any obligation incurred by AMI
in connection with its financing of the acquisition of the Assets prior to or as
of the Closing Date and AMI nevertheless proceeds with the Closing or (b) any
Losses suffered by any AMI Indemnitee which arise pursuant to (iv) above to the
extent they relate to claims of a creditor asserting a bulk sales violation
arising with respect to a Liability to be assumed pursuant to Paragraph 3 if AMI
or the holder of any obligation incurred by AMI in connection with its financing
of the acquisition of the Assets fails to notify USS of such claim within 15
Business Days after receiving notice there of or to the extent a claim therefor
is asserted more than 18 months after the Closing Date. In the event that USS is
required to make a payment to an AMI Indemnitee by reason of this Paragraph 12,
USS shall pay the AMI Indemnitee an additional amount which, after deduction of
all Taxes required to be paid by the AMI Indemnitee with respect to the receipt
of such amount (after giving credit for any savings in respect of any such Taxes
by reason of deductions, credits, or allowances in respect of the payment of the
Losses indemnified against and any other such Taxes), shall be equal to the
amount of such payment.
B. Requirements for Indemnification or Reimbursement.
(i) The AMI Indemnitee shall, as promptly as reasonably
possible (and in no event more than 60 days) after the AMI Indemnitee
(which in the case of AMI, shall mean an officer of AMI) (a) receives
notice or demand from a third party, if indemnification is sought for a
claim by a third party, including any taxing authority, provided, however,
that if such claim is the subject of a judicial
27
or administrative proceeding, the AMI Indemnitee shall give notice to USS,
which may be verbal, within 15 Business Days after the AMI Indemnitee's
receipt of such notice or demand (or such shorter period of time that ends
two Business Days prior to the Date on which the failure to respond to such
proceeding would materially prejudice USS's or the AMI Indemnitee's
position in such proceeding), and the failure to so notify USS shall
relieve USS of any duty to indemnify which otherwise might exist with
regard to such claim, or (b) becomes aware of an alleged breach of any
warranty, representation, agreement, or covenant made by USS in this
Agreement or in any agreement, certificate, document, or instrument
delivered in connection with the transactions contemplated hereby (in the
case of any other claim for indemnification), notify USS of the facts and
circumstances with respect to any claim by the AMI Indemnitee pursuant to
the terms hereof and of the fact that the AMI Indemnitee is seeking
indemnification hereunder.
(ii) USS shall not be liable to the AMI Indemnitee for any
Losses, except to the extent that the AMI Indemnitee has made a claim
therefor by notifying USS that a specific state of facts giving rise to
such Losses exists and that the AMI Indemnitee intends to seek
indemnification hereunder with respect thereto within the time limits set
forth in this Subparagraph 12.B(ii) as well as those set forth in
Subparagraph 12.B(i). Subject to compliance with Subparagraph 12.B(i),
with respect to any Loss arising from any Proceeding related to a
Tax, such claim must be asserted by the AMI Indemnitee prior to the
expiration of 60 days following the date on which the running of the
statute of limitations with respect to the Tax involved shall bar the
assessment and collection of such Tax. With respect to any other Loss, such
claim must be asserted within three years from the Closing Date, unless
such claim relates to any agreement or covenant to be performed after the
Closing Date, in which case such claim must be asserted within three years
from the date such agreement or covenant is alleged to have been breached.
C. Contest Rights.
(i) Right to Contest and Defend.
(a) By USS. Following notice by the AMI Indemnitee to
USS of a Proceeding, in accordance with Subparagraph 12.B(i), USS
shall have 30 days to
28
notify the AMI Indemnitee that it intends to contest and defend by all
appropriate legal proceedings such Proceeding (which notice shall
include an acknowledgement by USS of its liability under this
Agreement for all Losses occasioned by such Proceeding and the facts
giving rise thereto), in which case USS shall be entitled thereafter
to conduct such defense. Any such contest may be conducted by USS in
the name of and on behalf of USS, Alside, Inc., any of the
Subsidiaries, the AMI Indemnitee, or any or all of them, as may be
appropriate. The costs and expenses of any such contest conducted by
USS shall be borne by USS. So long as USS is conducting the defense in
accordance with this Agreement, the AMI Indemnitee shall have the
right to participate in the Proceeding and to be represented by
attorneys of its own shoosing, provided that if the AMI Indemnitee
chooses to be represented by attorneys of its own choosing while USS
is conducting the defense in accordance with the terms hereof, the AMI
Indemnitee shall bear the costs and expenses of such representation
and, except to the extent limited herein, USS shall have full
authority to determine all action to be taken with respect to such
contest, after consultation with the attorneys of the AMI Indemnitee.
If USS elects either to participate in the defense of such Proceeding
or to assume the defense thereof, the AMI Indemnitee agrees to
cooperate and make available to USS and USS's representatives (without
charge) all employees, information, books, and records reasonably
necessary or useful in connection with the defense. If USS assumes the
defense of a Proceeding, USS also agrees to afford the AMI Indemnitee
and its counsel the opportunity to be present at, and participate in,
conferences with all persons, including governmental authorities,
related to a Proceeding and conferences with representatives of or
counsel for such persons.
(b) By the AMI Indemnitee. If USS fails to give timely
notice of assumption of the defense, USS shall no longer be entitled
to conduct such defense and the AMI Indemnitee shall have no
obligation to contest such Proceeding. The costs and expenses of any
such content conducted by the AMI Indemnitee shall be treated as a
Loss hereunder; provided, however, that no charge shall be made for
the services of employees of AMI or any AMI Indemnitee. So long as the
AMI Indemnitee is conducting the defense of
29
such Proceeding in accordance with this Agreement, USS shall have the
right to participate in such Proceeding and to be represented by
attorneys of its own choosing, provided that if USS chooses to be
represented by attorneys of its own choosing while the AMI Indemnitee
is conducting the defense in accordance with the terms hereof, it
shall bear the costs and expenses of such representation and the AMI
Indemnitee shall have full authority to determine all action to be
taken with respect to such contest, after consultation with the
attorneys of USS. So long as the AMI Indemnitee is conducting the
defense of such Proceeding, the AMI Indemnitee agrees to afford USS
and its counsel the opportunity to be present at, and to participate
in, conferences with all persons, including governmental authorities,
related to such Proceeding and conferences with representatives of or
counsel for such persons.
(c) Settlement by USS. USS may not agree to the
settlement or compromise of any Proceeding that is subject to this
Paragraph 12 unless (1) the AMI Indemnitee gives its prior written
consent or (2) the terms of the compromise or settlement of such
Proceeding provide that the AMI Indemnitee shall have no
responsibility for discharge of the amount agreed upon and that such
compromise or settlement discharges all rights against the AMI
Indemnitee with respect to such Proceeding and the AMI Indemnitee has
not, within 15 Business Days after having received notice from USS of
the proposed settlement or compromise, given USS notice that it in
good faith reasonably believes that such settlement or compromise will
jeopardize its ability to prevail on issues similar to the issues that
are the subject of such Proceeding.
(ii) Cooperation. The parties hereto agree to cooperate with
each other and their counsel in contesting any Proceeding that is subject
to this Paragraph 12 which the other would like to contest or; if
appropriate, making any conterclaim against the third parties involved in
the Proceeding or in a cross-complaint against any person.
D. Offset Rights. If and to the extent that AMI owes money to USS
that is due at the time USS owes money to AMI (but not any other AMI Indemnitee)
pursuant to this Paragraph 12, AMI may offset such amounts owed; provided USS,
30
has acknowledged in writing its obligation to pay such money to AMI or been
finally adjudged by a court of competent jurisdiction to be liable therefor.
13. INDEMNIFICATION OF USS.
A. General. From and after the Closing, subject to the conditions
hereinafter set forth, AMI shall indemnify and hold harmless each USS Indemnitee
against any Losses caused by or arising out of (i) any claim made against the
USS Indemnitee in respect of any of the Liabilities to be assumed pursuant to
Xxxxxxxxx 0, (xx) any breach or default in the performance by AMI of any
covenant or agreement of AMI contained in this Agreement or any agreement,
certificate, document, or instrument delivered in connection with the
transactions contemplated herby, (iii) any breach of warranty or inaccurate or
erroneous representation made as of the date hereof or as of the Closing Date by
AMI herein or in any agreement, certificate, document, or instrument delivered
by or on behalf of AMI in connection with the transactions contemplated hereby,
or (iv) any Act of AMI; provided, however, that such indemnification shall not
apply to any Losses suffered by any USS Indemnitee which arise pursuant to (ii)
or (iii) above if the existence and extent of such breach, default, breach of
warranty, inaccurate or erroneous representation is made known in writing to USS
prior to or as of the Closing Date and USS nevertheless proceeds with the
Closing. In the event that AMI is required to make a payment to a USS Indemnitee
by reason of this Paragraph 13, AMI shall pay the USS Indemnitee an additional
amount which, after deduction of all Taxes required to be paid by the USS
Indemnitee with respect to the receipt of such amount (after giving credit for
any savings in respect of any such Taxes by reason of deductions, credits, or
allowances in respect of the payment of the Losses indemnified against and any
other such Taxes), shall be equal to the amount of such payment.
B. Requirements for Indemnification or Reimbursement.
(i) The USS Indemnitee shall, as promptly as reasonably
possible (and in no event more than 60 days) after the USS Indemnitee
(which in the case of USS or Alside, shall mean an officer of USS) (a)
receives notice or demand from a third party, if indemnification is sought
for a claim by a third party, including any taxing authority; provided,
however, that if such claim is the subject of a judicial or administrative
proceeding, the USS Indemnitee shall give notice to AMI, which may be
verbal,
31
within 15 Business Days after the USS Indemnitee's receipt of such notice
or demand (or such shorter period of time that ends two Business Days prior
to the date on which the failure to respond to such proceeding would
materially prejudice AMI's or the USS Indemnitee's position in such
proceeding), and the failure to so notify AMI shall relieve AMI of any duty
to indemnify which otherwise might exist with regard to such claim, or (b)
becomes aware of an alleged breach of any warranty, representation,
agreement, or covenant contained in this Agreement or in any agreement,
certificate, document, or instrument delivered in connection with the
transactions contemplated hereby (in the case of any other claim for
indemnification), notify AMI of the facts and circumstances with respect to
any claim by the USS Indemnitee pursuant to the terms hereof and the fact
that the USS Indemnitee is seeking indemnification hereunder.
(ii) AMI shall not be liable to the USS Indemnitee for any
Losses, except to the extent that the USS Indemnitee has made a claim
therefor by notifying AMI that a specific state of facts giving rise to
such Losses exists and that the USS Indemnitee intends to seek
indemnification hereunder with respect thereto within the time limits set
forth in this Subparagraph 13.B(ii) as well as those set forth in
Subparagraph 13.B(i). Subject to compliance with Subparagraph 13.B(i), with
respect to any Loss arising from any Proceeding related to a Tax, such
claim must be asserted by the USS Indemnitee prior to the expiration of 60
days following the date on which the running of the statute of limitations
with respect to the Tax involved shall bar the assessment and collection of
such Tax. With respect to any other Loss, such claim must be asserted
within three years from the Closing Date, unless such claim relates to any
agreement or covenant to be performed after the Closing Date, in which case
such claim must be asserted within three years from the date such agreement
or covenant is alleged to have been breached.
C. Contest Rights.
(i) Right to Contest and Defend.
(a) By AMI. Following notice by the USS Indemnitee to
AMI of a Proceeding, in accordance with Subparagraph 13.B(i), AMI
shall have 30 days to notify the USS Indemnitee that it intends to
contest and defend by all appropriate legal proceedings such
32
Proceeding (which notice shall include an acknowledgement by AMI of
its liability under this Agreement for all Losses occasioned by such
Proceeding and the facts giving rise thereto), in which case AMI shall
be entitled thereafter to conduct such defense. Any such contest may
be conducted by AMI in the name of and on behalf of the USS
Indemnitee, Alside, any of the Subsidiaries, AMI, or any or all of
them, as may be appropriate. The costs and expenses of any such
contest conducted by AMI shall be borne by AMI. So long as AMI is
conducting the defense in accordance with this Agreement, the USS
Indemnitee shall have the right to participate in the Proceeding and
to be represented by attorneys of its own choosing, provided that if
the USS Indemnitee chooses to be represented by attorneys of its own
choosing while AMI is conducting the defense in accordance with the
terms hereof, the USS Indemnitee shall bear the costs and expenses of
such representation and, except to the extent limited herein, AMI
shall have full authority to determine all action to be taken with
respect to such contest, after consultation with the attorneys of the
USS Indemnitee. If AMI elects to either participate in the defense of
such Proceeding or to assume the defense thereof, the USS Indemnitee
agrees to cooperate and make available to AMI and its representatives
(without charge) all employees, information, books, and records
reasonably necessary or useful in connection with the defense. If AMI
assumes the defense of a Proceeding, AMI also agrees to afford the USS
Indemnitee and its counsel the opportunity to be present at, and to
participate in, conferences with all persons, including governmental
authorities, related to a Proceeding and conferences with
reprsentatives of counsel for such persons.
(b) By the USS Indemnitee. If AMI fails to give timely
notice of assumption of the defense, AMI shall no longer be entitled
to conduct such defense and the USS Indemnitee shall have no
obligation to contest such Proceeding. The costs and expenses of any
such contest conducted by the USS Indemnitee shall be treated as a
Loss hereunder; provided, however, that no charge shall be made for
the services of employees of USS or the USS Indemnitee. So long as USS
is conducting the defense of such Proceeding in accordance with this
Agreement, AMI shall have the
33
right to participate in such Proceeding and to be represented by
attorneys of its own choosing, provided that if AMI chooses to be
represented by attorneys of its own choosing while USS is conducting
the defense in accordance with the terms hereof, it shall bear the
costs and expenses of such representation and USS shall have full
authority to determine all action to be taken with respect to such
contest, after consultation with the attorneys of AMI. So long as USS
is conducting the defense of such Proceeding, the USS Indemnitee
agrees to afford AMI and its counsel the opportunity to be present at,
and to participate in, conferences with all persons, including
governmental authorities, related to such Proceeding and conferences
with representatives of or counsel for such persons.
(c) Settlement by AMI. AMI may not agree to the
settlement or compromise of a Proceeding that is subject to this
Paragraph 13 unless (i) the USS Indemnitee gives its prior written
consent or (ii) the terms of the compromise or settlement of such
Proceeding provide that the USS Indemnitee shall have no
responsibility for discharge of the amount agreed upon and that such
compromise or settlement discharges all rights against the USS
Indemnitee with respect to such Proceeding and the USS Indemnitee has
not, within 15 Business Days after having received notice from AMI of
the proposed settlement or compromise, given AMI notice that it in
good faith reasonably believes that such settlement or compromise will
jeopardize its ability to prevail on issues similar to the issues that
are the subject of such Proceeding.
(ii) Cooperation. The parties hereto agree to cooperate with
each other and their counsel in contesting any Proceeding that is subject
to this Paragraph 13, which the other would like to contest or, if
appropriate, making any counterclaim against the third parties involved in
the Proceeding or in a cross-complaint against any person.
D. Offset Rights. If and to the extent that USS owes money to AMI
that is due at the time AMI owes money to USS (but not any other USS Indemnitee)
pursuant to this Paragraph 13, USS may offset such amounts owed; provided AMI
has acknowledged in writing its obligation to pay such money to USS or been
finally adjudged by a court of competent jurisdiction to be liable therefor.
34
14. RISK OF LOSS. If any part of the Assets to be acquired as
specified in Paragraph 2 or assets of the Subsidiaries having a net book value
in excess of $2,500,000 (as indicated in the internal accounting records of USS
or the Subsidiaries) is hereafter lost or destroyed by fire or other casualty
prior to the Closing Date, USS shall give prompt notice thereof to AMI and, in
such event, AMI shall be limited to the exercise of the following rights, all at
its option:
A. Postpone Agreement. AMI may elect to postpone the Closing Date
to a date no more than 45 days following the date on which notice of such loss
or destruction is given to AMI, during which period AMI shall retain the right
to terminate pursuant to Subparagraph B of this Paragraph or proceed pursuant to
Subparagraph C of this Paragraph; or
B. Terminate Agreement. AMI may terminate this Agreement provided
it gives notice of such election to USS at any time prior to a date 30 days
following the date on which such notice of such loss or destruction is given to
AMI; or
C. Proceed with Agreement. If AMI does not terminate this
Agreement in accordance with Subparagraph 14.3, it shall proceed with the
Closing (assuming all conditions to its obligation to proceed with the Closing
are fulfilled, except to the extent prevented by such loss or destruction) in
which event, at its option, AMI may either reduce the Purchase Price by an
amount equal to such net book value of the Assets or assets or the Subsidiaries
lost or destroyed or accept in lieu of such a reduction the proceeds of any
policies of insurance which covered the Asset(s) or asset(s) lost or destroyed.
15. POST-CLOSING COVENANTS. USS and AMI agree that:
A. Telephone Network. For a period of 60 days after the Closing
Date, AMI shall be permitted to continue to utilize at the Electric Cable
Operation, to the extent utilized at the Closing Date, at the cost then being
charged by USS to the Electric Cable Operation, the "steelcom" telephone
network.
B. Access to Records. AMI and USS agree to the following with
respect to the books and records related to the Assets, the assets of the
Subsidiaries, and the Operations and activities of the Operations, Alside,
Alside, Inc., and the Subsidiaries prior to the Closing Date (the "Old Records")
and with respect to the books and records related to the operations and
activities of AMI and the Subsidiaries after the Closing Date (the "New
Records"): (i) USS will provide access to the
35
Old Records to AMI and its representatives, free of charge; (ii) USS will not
destroy, transfer, or dispose of any Old Records without giving AMI at least 45
days notice of its intention to do so, during which time AMI may retrieve and
thereafter exclusively control such Old Records, free of charge; (iii) USS will
store any Old Records AMI sends to it, free of charge; (iv) USS will store and
provide access to AMI and its representatives any New Records AMI sends to it,
free of charge, for so long as USS desires the right to inspect New Records set
forth below; (v) AMI will provide USS and its representatives access to the New
Records to the extent such New Records are reasonably related to the assertion
or defense of a claim under Paragraph 12 or 13, free of charge; (vi) AMI will
not destroy, transfer, or dispose of any Old Records but will send them to USS
for storage (unless AMI has obtained exclusive control over such records
pursuant to (ii) above); and (vii) AMI will provide USS and its representatives
access to the Old Records, free of charge.
[C. Intentionally Omitted.]
D. USS Services. USS shall, for a period not to extend beyond
June 30, 1984, make available to AMI (i) the services of personnel knowledgeable
in the manner in which USS has accounted for the Operations, to the extent such
personnel are employed by USS; (ii) accounting data processing services as
currently used in respect of the Operations; and (iii) the services of
engineering personnel knowledgeable in the operations historically conducted by
USS in respect of the Operations, to the extent such personnel are currently
employed, in each case
36
to assist AMI and act at AMI's direction so that AMI may continue the businesses
of the Operations uninterrupted. Such services shall be provided upon such terms
and conditions as the parties may agree upon prior to the Closing, and AMI shall
pay USS for such services fees equal to USS's prevailing fees from time to time,
if such services are regularly offered by USS to third parties, or, if not so
offered, at fees equal to 106% of USS's standard charging rates therefor, as
determined in accordance with USS's standard practices; provided, however, that
AMI shall not make significant use of such accounting personnel beyond 60 days
after Closing Date.
E. Purchase Price Allocation. USS shall not take a position
contrary to that of AMI with respect to the allocation of the Purchase Price
among the Assets and the useful lives selected for such Assets; provided such
allocation is, in the opinion of USS, reasonable and provided further, that this
provision shall not limit or restrict the right of USS to file tax returns for
periods prior to the Closing Date using such useful lives for the Assets as USS,
in its sole discretion, determines.
F. Collection of Receivables. USS will deliver to AMI any cash or
other property that it may receive from and after the Closing Date in respect of
the Assets to be acquired as specified in Paragraph 2 or assets of any
Subsidiary or the Liabilities to be assumed pursuant to Paragraph 3 or
liabilities of any Subsidiary and AMI will deliver to USS as appropriate, any
cash or other property that it may receive from and after the Closing Date to
which USS is entitled.
G. Net Worth Statement. Not later than 30 days after the Closing
Date, USS, after consultation with AMI, shall deliver to AMI a statement of the
Net Worth determined as of the date specified in Paragraph 5. Such statement
shall be conclusive and binding on the parties, unless objected to by AMI within
60 days after delivery thereof, in which case, if the parties hereto, acting in
good faith, are unable to resolve their disputes about such Net Worth, such
disputes shall be finally settled by arbitration which shall be held in Dallas,
Texas, or any other location mutually agreed upon by the parties with the
accounting firm of Ernst & Whinney. The final determination of the Net Worth
determined as of the date specified in Paragraph 5 shall be made by Ernst &
Whinney and shall not be less than the amount proposed by AMI nor more than the
amount proposed by USS. AMI and USS shall each have the opportunity to present
its views on any disputed matter to Ernst & Whinney. Each party shall bear its
own expenses and
37
each party shall also pay that portion of Ernst & Whinney's fee and expenses
equal to the total of such fee and expenses multiplied by a fraction, the
denominator of which shall be the difference between Net Worth determined as of
the date specified in Paragraph 5 as proposed by USS and Net Worth determined as
of the date specified in Paragraph 5 as proposed by AMI and the numerator of
which shall be the difference between Net Worth determined as of the date
specified in Paragraph 5 as determined by Ernst & Whinney and Net Worth as
proposed by such party.
H. Employees. USS will refrain, for a period of five years after
the Closing Date, from hiring any of the Employees (other than hourly employees)
and refrain, during such five-year period, from inducing such employees to leave
the employ of AMI.
I. Use of Names, Etc. USS shall cease to use any of the Names,
Trademarks, Patents, and Patent Applications immediately after the Closing Date.
J. Safe Harbor Leases. AMI hereby agrees (i) to execute and
deliver to each Tax Lessor the written consent described in section
5c.168(f)(8)-2(a)(5) of the Regulations, (ii) to file the statement required by
section 5c.168(f)(8)-2(a)(5) of the Regulations with AMI's timely filed federal
income tax return (or the federal income tax return of the consolidated group of
which AMI is a member) for its taxable year next ending after the Closing Date,
(iii) to provide each Tax Lessor with the information concerning AMI that is set
forth in section 5c.168(f)(8)-2(a)(5) of the Regulations, and (iv) to report the
acquisition of the Assets subject to the Tax Lease Agreements for federal income
tax purposes in the manner prescribed by section 5c.168(f)(8)-2(a)(7) of the
Regulations or any successor Regulation.
K. AMI Personnel. AMI hereby agrees (i) to make available to USS
the services of personnel knowledgeable in the manner in which Alside and
Alside, Inc. conducted operations, including, but not limited to, the
maintenance of their accounting, treasury, and tax books and records, for a
period of up to six months after the Closing to permit the affairs of Alside and
Alside, Inc. to be wound up; provided, however, that USS shall not make any
significant use of such personnel beyond 90 days after the Closing; and (ii) to
make available to USS the services of personnel knowledgeable in the defense of
the litigation pending against Alside and Alside, Inc. as of the Closing for a
period of up to five years after the Closing in
38
order that USS may continue the prosecution or defense thereof uninterrupted by
utilizing such services; provided, however, that USS's use of such personnel
does not unreasonably interfere with such personnel fulfilling their other
duties as employees of AMI; and provided, further, that AMI will not terminate
such services for any reason without three months advance notice in writing to
USS. Such services shall be provided at no cost to USS, except that USS shall
reimburse AMI for all out-of-pocket expenses incurred by AMI in providing such
services, including, but not limited to, travel and lodging expenses, fees and
expenses of outside counsel, and the costs of settlements and judgments entered
against USS or Alside, Inc. in connection with any such litigation to the extent
liability therefor is not expressly assumed by AMI pursuant to this Agreement
and USS shall have authorized AMI to enter into such settlement. AMI will not be
liable to USS for any actions of any personnel being used by USS pursuant to
this Subparagraph 15.K.
L. Benefits. USS shall, to the extent Assets to be acquired
pursuant to Paragraph 3 are not legally assignable or transferable to AMI
pursuant to this Agreement, take any and all actions reasonably requested by AMI
to provide to AMI the rights and benefits conferred on USS by such Assets;
provided, that USS shall not be obligated hereby to expend any moneys other than
those USS would be required to pay with respect to such Assets had this
Agreement not been consummated, except to the extent that AMI is willing to
reimburse USS therefor.
M. Multi-Employer Pension Plans. USS will request each
multi-employer pension plan (within the meaning of section 4001(a)(3) of ERISA)
to which USS, Alside, Inc., or any of the Subsidiaries were obligated to
contribute with respect to the Operations, Alside, Alside, Inc., or any of the
Subsidiaries to provide a letter stating whether the consummation of the
transactions contemplated herein would cause a complete or partial withdrawal
(within the meaning of sections 4203 and 4205 of ERISA) by USS unless the bond
or escrow account required by Subparagraph 18.K(b) is provided by AMI or
appropriate waivers are obtained.
N. USS Pension Plan. USS agrees to deliver within 240 days after
the Closing a complete and correct list of the benefit accruals under the
noncontributory pension rules of the USS Pension Plan for the Employees employed
by AMI pursuant to Subparagraph 18.A. Further, USS agrees to deliver to AMI,
within ten Business Days after AMI's request therefor, a statement of the
benefit accruals under the noncontributory pension
39
rules of the USS Pension Plan for any such Employee who is expected to retire
prior to the end of such 240-day period.
16. TERMINATION. In addition to the termination provided for in
Paragraph 14, USS and AMI agree that this Agreement may be terminated in the
following situations.
A. Mutual Termination. On or prior to the Closing Date, USS and
AMI may mutually agree in writing to terminate.
B. Unilateral Termination. If any condition precedent to the
performance of either AMI or USS contained in Paragraph 9 or 10, respectively,
has not been satisfied on the Closing Date or as of the date of the required
performance, the party(ies) to be benefitted by such condition precedent may
elect to terminate this Agreement by giving the other party(ies) written notice
of such intent.
C. Automatic. This Agreement shall automatically terminate if the
Closing has not occurred by February 29, 1984, unless extended by mutual
agreement or pursuant to Paragraph 14.
17. NAMES, TRADEMARKS, PATENTS, TECHNOLOGY, AND USE THEREOF.
A. Names. On the Closing Date, USS will assign and transfer to
AMI all of its right, title, and interest in and to the Names.
B. Trademarks. On the Closing Date, USS will transfer and assign
to AMI all right, title, and interest in and to the Trademarks.
C. Technology. On the Closing Date, USS will grant to AMI an
irrevocable, indivisible, non-exclusive license and paid up right to use all the
Technology.
D. Patents and Patent Applications. On the Closing Date, USS will
transfer and assign to AMI all of its right, title, and interest in and to the
Patents and Patent Applications.
E. Use of Names and Trademarks. USS and AMI agree with respect to
the trademarks and tradenames "USS," "UNITED STATES STEEL," "U.S. STEEL," and
variations thereof (the "USS Marks"):
40
(i) AMI, promptly after Closing but in no event later than
30 days after the Closing, shall remove or obliterate all references to the
USS Marks from: (i) its signs on buildings, warehouses, and the like; (ii)
its vehicles and the like; and (iii) all business forms, stationery, and
the like,
(ii) After Closing, AMI shall make no further references to
the USS Marks as a tradename in its media advertising, except that until
December 31, 1984, AMI may include statements in its advertising to the
effect that Alside was formerly a wholly-owned subsidiary or a division of
USS.
(iii) AMI, as soon as practical but in any event after April
1, 1984, shall cease using all printed brochures, posters, display racks
and kits, or similar materials which are on hand or previously ordered at
the time of Closing and which contain any reference to the USS Marks. After
Closing, any such materials which are ordered by AMI shall contain no
reference to the USS Marks, except that until December 31, 1984, AMI may
include a statement in such materials to the effect that Alside was
formerly a wholly-owned subsidiary or a division of USS.
(iv) AMI, as soon as practical but in any event after April
1, 1984, shall cease using any audio-visual aids, such as tapes, slides,
movies, and the like, which contain any reference to the USS Marks. In any
use of such aids prior to the above date, AMI shall first advise the
viewer(s) or listener(s) that Alside is no longer owned or controlled by
USS.
(v) AMI shall be permitted to sell all inventory of products
as packaged if the products were manufactured prior to the Closing Date and
to use all inventory of packaging materials on hand at the Closing Date. If
any such inventory remains beyond December 31, 1984, prior to the sale or
use thereof, USS may require that all references to "USS Marks" be removed
or obliterated from all packaging of the products and USS may require that
such notations be removed or obliterated from the products themselves,
except in the case of products such as windows if it is impractical to
remove such notations from the products due to embossing or the like.
41
(vi) AMI shall take such action as its reasonably required
to insure that its distributors, dealers, agents, and representatives
comply with the obligations imposed on AMI in this Subparagraph 17.E.
(vii) AMI shall advise USS of all instances of which it
becomes aware of customer complaints regarding the misuse or abuse of the
USS Marks. AMI will cooperate with USS in resolving such complaints as well
as those complaints which come directly to the attention of USS.
(viii) AMI will obtain product liability insurance covering
all claims for damage or breach of warranty arising out of the sale of such
products through the time period during which the USS Marks are used by
AMI, in amounts and with an insurer acceptable to USS, which insurance will
name USS as an insured party and will not be cancellable without 30 days'
notice by the insurer to USS. AMI agrees that it shall immediately
discontinue any and all use of the "USS Marks" in the event such insurance
coverage ceases.
F. Recording Expenses. AMI shall bear the expense of recording
the assignment of Trademarks and Patents and Patent Applications in the U.S.
Patent and Trademark Office and in foreign patent and trademark Offices.
18. PERSONNEL AND BENEFITS.
A. Employment Status. All hourly and salaried employees of USS
employed exclusively in connection with either of the Operations or Alside
(other than X.X. Xxxxxxxx and X.X. Xxxxxx) who are so employed immediately prior
to the Closing shall become employees of AMI as of the Closing unless they
choose not to. All hourly and salaried employees of the Subsidiaries shall
continue their employment with the Subsidiaries unless they choose not to. All
such nonunion employees shall be initially employed at their then current salary
or wage rate, except to the extent any such person waives compliance with such
obligation.
B. Pension Status. All nonunion employees who are employed by AMI
as of the Closing pursuant to Subparagraph 18.A above will, pursuant to
amendments to the USS Pension Plan to be adopted effective as of the Closing,
continue to accrue pension continuous service for eligibility and vesting
purposes only under the rules of the USS Pension Plan applicable to such
employees immediately prior to the Closing; provided, however,
42
none of such employees will continue to be covered by the provisions relating to
70/80 retirement (as defined in the USS Pension Plan) after the Closing other
than those employees (i) whose age and service as of the Closing meet the age
and service criteria for 70/80 retirement or (ii) whose age and service will,
not later than the second anniversary of the date of Closing, meet the age and
service criteria for 70/80 retirement, and none of such employees will continue
to be covered by the provisions relating to Rule of 65 retirement, as defined in
the USS Pension Plan) after the Closing other than those employees (i) who have
at least 20 years of continuous service as of the Closing, and (ii) whose age
and service will not later than the second anniversary of the Closing, meet the
age and service criteria for Rule of 65 retirement. Upon any such employee's
becoming eligible for benefits under the USS Pension Plan, the USS Pension Plan
will pay such benefit to such employee upon proper notice to the USS Pension
Plan; provided, however, that such employee's service and earnings with AMI
after the Closing will not be used to calculate the amount of any benefit
payable to such employee under the USS Pension Plan. Notwithstanding the above,
USS agrees it shall supplement any pension calculated pursuant to the percent
formula of the noncontributory pension rules of the USS Pension Plan, to the
extent necessary, to provide a noncontributory pension equal to the
noncontributory pension that would have been provided under the USS Pension Plan
if the participant's average monthly earnings took into account monthly earnings
with AMI; provided, however, that in no event shall the participant's average
monthly earnings calculated taking into account earnings with AMI exceed his
average monthly earnings with USS or Alside during the twelve calendar months
immediately preceding the Closing (exclusive of any bonus paid after the Closing
even though attributable to 1983). USS will have no liability with respect to
the payment of pension benefits to any such employee except as stated in the
foregoing sentence and except as otherwise provided under the terms of the USS
Pension Plan. Effective as of the Closing and for two years thereafter, AMI will
establish a pension plan which will provide to such employees pension benefits
which are not less than the same general level of pension benefits provided
immediately prior to the Closing to such employees under the USS Pension Plan as
amended effective as of the Closing. AMI will credit employees who are employed
by it as of the Closing with all service credited to them under the USS Pension
Plan as of the Closing for the purposes of eligibility, vesting, and accrual of
benefits under the pension plan of AMI; provided, however, that any benefit
payable under the noncontributory pension rules of the USS Pension Plan will be
offset against any benefit payable under the noncontributory pension plan of
AMI.
43
C. Notification of Change in Employment. AMI will notify USS of
the termination of employment or the reemployment of any nonunion employee of
AMI who was employed as of the Closing pursuant to Subparagraph 18.A. Such
notification shall be made within 30 days of the date of termination of
employment or reemployment; provided, however, that failure to give any such
notice will not affect the rights of any such employee to receive benefits as
provided herein. Notices pursuant to this paragraph shall be sent to the
Assistant Secretary, United States Steel and Carnegie Pension Fund, Room 2618,
000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000, or such other address as USS
may hereafter specify.
X. Xxxxxx Plans. Pursuant to the amendments to the USS Pension
Plan referred to in Subparagraph 18.B, all nonunion employees who are employed
by AMI as of the Closing pursuant to Subparagraph 18.A above will continue to
accrue pension continuous service for eligibility and vesting purposes. Such
service shall also be used for vesting purposes under the United States Steel
Corporation Savings Fund Plan for Salaried Employees. Employees of AMI will be
permitted to withdraw their contributions and the employer contributions to such
Savings Plan only in accordance with the terms of such Savings Plan. No employee
contributions will be permitted after the Closing.
Within six months following the Closing Date, AMI will design and
install a stock purchase, thrift, or an incentive plant which will provide in
the aggregate the same general level of contributions for the benefit of the
nonunion employees who are employed by AMI pursuant to Subparagraph 18.A as have
been provided heretofore in the aggregate by the USS Savings Fund Plan for
Salaried Employees - Article I-III. Contributions will be deemed in the
aggregate to be at the same level of contributions if, viewed ___ percentage of
participants' compensation (such participants being only those who were employed
exclusively in connection with the Operations or Alside), they are at least
equal to the average percentage of compensation contributed by USS under the USS
Savings Fund Plan for Salaried Employees - Article I-III for the three plan
years ending immediately prior to the Closing and allocated to the accounts of
employees employed exclusively in connection with the Operations or Alside or
Alside, Inc. This rate will be contributed for the account of each participant
entitled to participate in such plan. In the alternative, AMI will make salary
and/or benefit improvements which as an expenditure by or cost to AMI will equal
in the aggregate the average for the three plan years immediately prior to
Closing of such contributions for the benefit of such employees. In the event
such
44
plan or salary and/or benefit improvements is or are not installed retroactively
so as to pay benefits effective as of the Closing Date, AMI will provide the
covered employees with the equivalent increase in compensation (without regard
to the impact, if any, of Taxes) for the period that such plan or salary and/or
benefit improvements have not been in effect. USS will furnish AMI with
information reasonably requested by AMI to determine the contributions required
to be made under this Subparagraph 18.D.
E. Insurance. AMI will initially provide to all nonunion
employees who are employed by AMI as of the Closing pursuant to Subparagraph
18.A insurance coverage (including retiree life insurance and health-care
coverage) which is not less than the same general level of insurance coverage
(including retiree life insurance and health-care coverage) provided immediately
prior to the Closing to such employees under the United States Steel Corporation
Plan for Employee Insurance Benefits (Revision of 1950), as amended. AMI will
recognize as creditable toward the 1984 major medical deductible under its plan
any medical expense credited toward the 1984 deductible under the USS Plan.
F. Compensation. AMI will provide from and after the Closing the
same level of salary and sundry compensation practices with respect to regular
vacation, salary continuance, relocation benefits and other matters which were
in effect immediately prior to the Closing for the employees who are employed by
AMI pursuant to Subparagraph 18.A.
G. Pension Liability by Reason of Subsequent Event. In the event
that the active employment of any nonunion employee who is employed by AMI as of
the Closing pursuant to Subparagraph 18.A is terminated by reason of the
shutdown of all or part of a facility of AMI or as a direct or indirect result
of a job elimination and such employee is entitled to and granted an immediate
noncontributory and/or contributory pension under the USS Pension Plan, or in
the event any nonunion employee so employed becomes entitled to and is granted
an immediate pension due to the failure of AMI to provide a benefit package that
is generally equivalent to that which was applicable to the employee immediately
prior to the Closing, AMI shall reimburse USS on a monthly basis for the cost of
funding the pension payable under the USS Pension Plan for the period between
the date the pension commences and the month following the month in which the
employee attains age 62.
45
H. Letter Agreements. AMI will assume, as of the Closing Date,
the letter agreements listed in Schedule J between USS and C.R. Xxxx, X.X.
Xxxxxxx, X.X. Xxxxxxxxxx, and X.X. Xxxxxxxx to the extent such persons are
employed by Amercable Corp. at such date, except that USS will pay such
employees in question any amounts required to be paid under such letter
agreements with respect to service prior to the Closing Date, assuming for
purposes of such calculation that such persons would be treated in the same
manner as nonunion employees pursuant to Subparagraphs 18.B and 18.G.
I. Enforcement. Subparagraph 18.A through 18.H constitute an
agreement solely between the parties to this Agreement. It is specifically
intended that such Subparagraphs shall not establish any enforceable rights,
legal or equitable, in any employee of AMI or any beneficiary of such employee.
Any claim, including claims for benefits, asserted by or on behalf of such
employee with respect to his or her being employed by AMI shall be governed
solely by applicable employment policies and employee benefit plans, construed
in accordance with applicable federal and state law. Nothing in this
Subparagraph 18.I shall limit the rights of the parties hereto to enforce the
terms and conditions of Subparagraphs 18.A through 18.H.
J. Collective Bargaining Agreements. In accordance with
Subparagraph 10.H, AMI shall assume as of the Closing Date the collective
bargaining agreements listed in Schedule J and discharge USS's obligations
thereunder with respect to the Operations and Alside, including any obligations
with respect to employee benefit funds. USS represents and warrants that all
such employee benefit funds are multi-employer pension plans subject to
Subparagraph 18.K, except for the Plan.
K. Multi-Employer Pension Plans Amendments Act of 1980.
(a) AMI further agrees, as may be necessary to meet the
requirements of section 4204(a)(1)(A) of ERISA, to contribute to
multi-employer pension benefit plans in connection with the agreements
listed in Schedule J for substantially the same number of contribution base
units for which Alside had an obligation to contribute immediately prior to
the Closing Date.
(b) With respect to each such plan AMI agrees (unless
exempted) to provide for a period of five years commencing with the first
plan year beginning after the
46
Closing Date any bond or escrow account as may be necessary to meet the
requirements of section 4204(a)(1)(B) of ERISA and/or the requirements of
such plan, but only to the extent USS delivers a representation to AMI on
or before October 1, 1984, that the consummation of the transactions
contemplated herein would cause a complete or partial withdrawal (within
the meaning of sections 4203 and 4205 of ERISA) by USS with respect to such
plans absent such bond or escrow being provided or appropriate waivers
being obtained.
(c) USS agrees, in accordance with the requirements of
ERISA, that if AMI withdraws during such first five plan years from any
such plan in a complete withdrawal or a partial withdrawal with respect to
any Alside operation, it shall remain secondarily liable for any withdrawal
liability AMI would have had to such plan and with respect to which such
plan is not paid. Not in limitation of the above, USS agrees to remain
secondarily liable for any withdrawal liability with respect to each such
plan following the Closing Date as may be required to meet the obligations
imposed by section 4204(a)(1)(C) of ERISA.
L. Alside Pension Plan. AMI hereby agrees to sponsor, maintain,
administer, and fund (including unfunded past service liability) the Plan to the
extent required by the collective bargaining agreement dated June 2, 1983,
between the United Steelworkers of America and Alside, Inc. to apply to Alside,
Inc. employees represented by Local 5144 of the United Steelworkers of America
at the Alside plant located at 0000 Xxxxx-Xxxxxxxxx Xxxx, Xxxxxxxxxxx Xxxxxxxx,
Xxxx. Further, in conjunction with said Pension Plan, subject to the consent of
Xxxx Xxxxxxx Mutual Life Insurance Company, USS assigns and AMI accepts all
rights and obligations under the group annuity insurance contract with Xxxx
Xxxxxxx Mutual Life Insurance Company, known as GAC 1305.
19. EXPENSES. Each party shall pay its own expenses incurred in
connection with the negotiation and consummation of this Agreement, including
legal and accounting fees and expenses of their representatives and agents,
whether or not the transaction is consummated for whatever reason.
20. NOTICES. Any notice or other communication required by or
permitted to be given in connection with this Agreement shall be in writing,
except as expressly otherwise permitted herein, and shall be delivered in person
or sent by first class mail, certified or registered mail, return receipt
requested, postage prepaid, to the respective parties as follows:
47
A. If to AMI:
Associated Materials Incorporated
0000 Xxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
With a copy to:
Xxxxxxx & Xxxxxxx
0000 XxxxxXxxxx Xxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
B. If to USS:
United States Steel Corporation
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx,
Senior Vice President
Corporate Strategic Planning
With a copy to:
Xxxxxx X. Xxxxxx, Law Department
United States Steel Corporation
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Each of the parties hereto may change the address to which it desires notices to
be sent if it notifies the other parties hereto of such change in accordance
with the provisions of this Paragraph 20. Any such notice shall be deemed
effective when received, if personally delivered and, if mailed, on the fifth
day after it is deposited in the United States mail, properly addressed, with
proper postage affixed.
21. ASSIGNMENT OF RIGHTS. Neither USS nor AMI shall assign all or any
part of their rights, privileges, and obligations hereunder.
22. PRESS RELEASES. The parties shall cooperate in releasing any
information concerning this Agreement and the transactions contemplated herein.
Where possible, each of the parties shall furnish to the others drafts of all
releases prior to publication. The parties hereby agree that, to the
48
extent legally possible, this Agreement shall be treated with the utmost
discretion and no publicity concerning the same will be given prior to the time
releases are deemed necessary. Nothing contained herein shall prevent any party
at any time from furnishing any information to any governmental agency to the
extent required by Law. AMI shall publicize the transfer of the Assets to it as
USS shall reasonably request.
23. BROKERS. USS and AMI represent and warrant that they are not
parties to or in any way obligated under any contract or other agreement, and
that there are no outstanding claims against any of them, for the payment of any
broker's or finder's fee in connection with the origin, negotiation, execution,
or performance of this Agreement, except that AMI has agreed to pay a fee to The
Sterling Group and Xxxxxx, Xxxxxx & Xxxxxx Inc. and to hold USS harmless against
any such fees.
24. INVALID PROVISIONS. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under present or future Laws effective
during the term hereof, such provision shall be fully severable; the Agreement
shall be construed and enforced as if such illegal, invalid, or unenforceable
provision had never comprised a part hereof; and the remaining provisions hereof
shall remain in full force and effect and shall not be affected by the illegal,
invalid, or unenforceable provision or by its severance herefrom. Furthermore,
in lieu of such illegal, invalid, or unenforceable provision, there shall be
added automatically as a part of this Agreement a provision as similar in terms
to such illegal, invalid, or unenforceable provision as may be possible and be
legal, valid, and enforceable.
25. ENTIRETY AND AMENDMENTS. This instrument embodies the entire
agreement between the parties, and supersedes all prior agreements and
understandings, if any, relating to the subject matter hereof, except for that
certain confidentiality agreement executed by Xxxxxxx X. Xxxxxxxx on January 18,
1983, and may be amended only by an instrument in writing executed by USS and
AMI, and supplemented only by documents delivered or to be delivered in
accordance with the express terms hereof.
26. HEADINGS. The headings, captions, and arrangements used in the
Agreement are, unless specified otherwise, for convenience only and shall not be
deemed to limit, amplify, or modify the terms of the Agreement nor affect the
meaning thereof.
49
27. PARAGRAPHS; EXHIBITS. All references to "Paragraphs" or
"Subparagraphs" contained herein are, unless specifically indicated otherwise,
references to paragraphs and subparagraphs of this Agreement. All references to
"Schedules" and "Exhibits" contained herein are references to schedules and
exhibits attached hereto, all of which are made a part hereof for all purposes,
the same as if set forth herein verbatim, it being understood that if any
exhibit attached hereto which is to be executed and delivered contains blanks,
the same shall be completed correctly and in accordance with the terms and
provisions contained and as contemplated herein prior to or at the time of the
execution and delivery thereof.
28. NUMBER AND GENDER OF WORDS. Whenever herein the singular number is
used, the same shall include the plural where appropriate, and words of any
gender shall include each other gender where appropriate.
29. APPLICABLE LAW; COUNTERPARTS. The terms and conditions of this
Agreement shall be construed in accordance with the Laws of Texas except insofar
as it shall be mandatory by statute to apply the Laws of another jurisdiction.
This Agreement may be executed simultaneously in two or more counterparts, each
of which shall be deemed an original but all of which together shall constitute
but one and the same instruments.
30. NO OTHER NEGOTIATIONS. USS agrees that upon execution of this
Agreement by the parties hereto, it will not contact or negotiate with any other
person or entity with respect to the sale of all or any part of the Assets to be
acquired as specified in Paragraph 2 or assets of the Subsidiaries except in the
ordinary course of business, unless and until this Agreement is terminated in
accordance herewith.
31. PARTIES BOUND. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective representatives,
successors, and assigns.
32. CONFIDENTIALITY. Whether or not the transactions herein
contemplated are consummated:
A. Nondisclosure. The parties agree each shall use Confidential
Information received from another party in the course of investigating,
negotiating, and performing the transactions contemplated by this Agreement
solely in connection with the transactions contemplated by this Agreement and
shall not disclose the same to any third party (including, but not
50
limited to, its investment bankers, attorneys, or other advisors) except as may
be authorized by the party from whom such Confidential Information was received
or expressly permitted herein.
As used herein, "Confidential Information" shall mean all information
whether set forth in writing or orally disclosed, except that which (a) prior to
the date hereof: (i) was generally publicly available; or (ii) was rightfully in
the possession of the receiving party from a third party; or (b) after receipt
thereof: (i) becomes publicly available without fault of the receiving party; or
(ii) is acquired by the receiving party from a third party, free of any
restrictions as to its disclosure. The disclosure of any Confidential
Information within the internal organization of AMI and within the organization
of any third party to which disclosure may be authorized shall be limited to key
personnel whose duties justify their need to review and know such Confidential
Information and then only provided (a) such party require such personnel to
agree, for the benefit of the other parties hereto, to maintain the
confidentiality of such Confidential Information in accordance herewith and to
restrict their use thereof solely to the above purpose; and (b) such party shall
be liable for any breach of such agreement by such personnel.
It is further agreed that in the event the Closing does not occur, (i)
each party shall promptly return all Confidential Information to the party from
which it was received, together with any copies, notes, or extracts thereof;
(ii) any analyses, compilations, studies, or other documents which may be
prepared for internal use by it or third parties to which disclosure may be
authorized and which reflect any of the Confidential Information will be kept
confidential by it and such third parties in accordance with the above
provisions and shall not be used by it or such third parties in any way
detrimental to other parties; and (iii) without the prior written consent of the
parties, each party will not disclose, and will direct its personnel and any
third parties acting on its behalf not to disclose, to any person either the
fact that discussions or negotiations were taking place concerning a possible
transaction or any of the terms, conditions, or other facts with respect to any
such possible transaction or the reasons why such transaction was not
consummated.
Nothing herein shall be deemed to limit AMI's ability to use or
disclose Confidential Information after the Closing to the extent it relates
exclusively to Alside, Inc., Alside, either of the Operations, any Subsidiary,
or any of the Assets or Liabilities.
51
B. Survival. The provisions of this Paragraph 32 relating to
confidentiality shall survive the termination of this Agreement.
33. RESPONSIBILITY FOR CERTAIN TAXES. AMI agrees to pay all state,
county, and local transfer, documentary, recording, sales, and use taxes
applicable to the sale of the Assets directly to the applicable governmental
offices and to furnish USS evidence of any such payment; provided, however, that
AMI will in no event be liable for any tax based on income arising out of the
transactions contemplated hereby.
34. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the parties contained in this Agreement shall survive the
Closing and any investigation of the parties with respect thereto.
35. PRORATION OF CERTAIN TAXES AND OTHER EXPENSES.
A. Taxes. General Taxes (as hereinafter defined) relating to the
Assets to be acquired as specified in Paragraph 2 and assets of the Subsidiaries
shall be prorated between USS on the one hand and AMI on the other on the basis
of ownership during the relevant tax periods. USS shall be responsible for all
such General Taxes to the extent they relate to periods prior to the Closing
Date and AMI shall be responsible for such General Taxes to the extent they
relate to periods from and after the Closing Date, regardless of when or by whom
actually paid or payable or whether or when such taxes may give rise to Liens on
any of such Assets or assets of the Subsidiaries. General Taxes for such tax
periods not yet known at the, Closing Date shall be reasonably estimated in good
faith based on prior periods' General Taxes by USS and such estimate shall be
delivered to AMI contemporaneously with the delivery of the statement of
Estimated Net Worth to AMI. At the Closing, the parties hereto shall make
whatever payments are necessary to effect to the purpose of this Subparagraph
35.A., based upon such estimate. Not later than 30 days after the Closing Date,
USS shall deliver to AMI a final determination of the proration of the General
Taxes. To the extent that General Taxes for the current tax periods are still
not known, such final determination shall be based on a reasonable estimate made
in good faith by USS based on prior periods General Taxes. At the time of the
settlement payment made pursuant to Subparagraph 4.A(iii), the parties hereto
shall make whatever payments are necessary to effect the purpose of this
Subparagraph 35.A, based upon such final determination. Except as otherwise
provided in Subparagraph C below, any of such
52
General Taxes levied or assessed against or with respect to the Assets to be
acquired as specified in Paragraph 2 or assets of the Subsidiaries for or with
respect to any period ending prior to the Closing Date shall be charged to USS
and any such taxes Levied or assessed against or with respect to such Assets or
assets of the Subsidiaries for or with respect to any period commencing on or
after the Closing Date shall be borne by AMI. For purposes of this Agreement,
the term "General Taxes" shall be defined as:
(i) all annual or periodic ad valorem fees and other taxes
and assessments, both general and special, and payments made in lieu
thereof, on real or personal property, and
(ii) all other annual or periodic fees, Taxes, and similar
charges imposed by any governmental unit upon or with respect to the Assets
to be acquired as specified in Paragraph 2 or assets of the Subsidiaries,
including without limiting the foregoing, taxes, fees, or similar charges
for the privilege of doing business imposed on or with respect to any of
the Subsidiaries.
B. Rents, Prepaid Expenses, and Utility Charges. Rents, prepaid
expenses, utility charges, and the like directly related to the Assets to be
acquired as specified in Paragraph 2 or assets of the Subsidiaries shall be
prorated between USS on the one hand and AMI on the other as of the Closing
Date, with USS assuming responsibility with respect to all rents, prepaid
expenses, utility charges, and the like attributable to the periods prior to the
Closing Date and AMI assuming responsibility with respect to all rents, prepaid
expenses, utility charges, and the like attributable to the periods after the
Closing Date, except as otherwise provided in Subparagraph C below. The parties
shall promptly pay any amounts due to one another upon receipt of a request
therefor accompanied by reasonable data.
C. No Proration. No General Taxes, rents, prepaid expenses, or
utility charges shall be charged to AMI or USS to the extent reflected in the
Net Worth of Alside and the Operations determined as of the date specified in
Paragraph 5.
36. CERTAIN DEFINITIONS. As used herein, the following terms have the
following meanings.
"Act of AMI" means the occurrence of any of the following listed acts,
omissions, events, or conditions:
53
(a) AMI fails to timely deliver the consent described in clause (i) of
Subparagraph 15.J;
(b) AMI fails to timely file the statement described in clause (ii) of
Subparagraph 15.J;
(c) AMI sells or assigns its interest in any Asset and AMI's
transferee fails to assume the obligations expressly set forth in
Subparagraph 15.J concerning the Asset so transferred; provided,
however, that sale or transfer by AMI of its interest in any Asset
shall not constitute an Act of AMI for purposes of this definition if
USS refuses, for any reason, to enter into an agreement to indemnify
AMI's transferee that embodies terms and provisions that are at least
as favorable to AMI's transferee as the provisions of Xxxxxxxxx 00
xxxxxx.
(x) Any Asset ceases to be "section 38 property" as defined in section
48(a) of the Code solely because (i) the Asset is deemed to be used by
a governmental unit for purposes of section 48(a)(5) of the Code, (ii)
the Asset is deemed to be used by a tax exempt entity for purposes of
section 48(a)(4) of the Code, or (iii) the Asset is deemed to be used
predominantly outside the United States for purposes of section
48(a)(2) of the Code; and
(e) Any Asset ceases to be "qualified leased property" for purposes of
section 168(f)(8)(D) of the Code solely because the Asset ceases to be
used in a trade or business or held for production of income or is
leased to a foreign person and the requirements of section
5c.168(f)(8)-6(b)(4) of the Regulations are not satisfied.
"Alside" means the Alside Division of USS.
"Alside Assets" means all assets owned by USS and used exclusively in
Alside of whatever nature, including, without limitation, all property, tangible
or intangible, real, personal, or mixed, cash, accounts receivable, any
securities, choses in action, permits, licenses, leases, prepayments, work in
process, claims and rights of any kind (whether by contract or otherwise),
rights in patents, trade names, trademarks, service marks, copyrights, and all
of the issued and outstanding stock of the Subsidiaries, all as the same shall
exist as of December 31, 1983 (except as they may change, be added to, or
54
be reduced without causing a breach of a representation or obligation of USS
hereunder, unless waived by AMI in accordance with this Agreement, between
December 31, 1983, and the Closing Date); provided, however, that such
definition shall not include any rights, securities, or interests in USS
Portfolio, Inc.; in any claims which may be raised as counterclaims or third
party claims in connection with pending or threatened litigation other than
litigation involving product liability, breach of warranty, or collection of
accounts receivable; in any cash that AMI does not, at least ten days prior to
the Closing Date, notify USS it agrees to acquire, or in all trademark rights to
"USS," "UNITED STATES STEEL," "U.S. Steel," or variations thereof, except as
contemplated by Paragraph 17.
"Alside Liabilities" means (a) all liabilities of USS arising
exclusively through Alside, of Alside, Inc., or of the Subsidiaries reflected in
the Alside 1983 Statements, as the same may change, be added to, or be reduced
without causing a breach of a representation or obligation of USS hereunder,
unless waived by AMI in accordance with this Agreement, between December 31,
1983, and the Closing Date; (b) all obligations of Alside, Inc., the
Subsidiaries, or USS arising exclusively through Alside which are to be
performed after the Closing Date pursuant to any and all permits, licenses,
leases, mortgages, contracts, invoices, and other commitments and engagements of
whatever nature, but only to the extent they relate to goods or services
delivered or performed by the other party(ies) thereto after the Closing Date,
including, but not limited to, those permits, licenses, leases, mortgages,
contracts, invoices and other commitments and engagements described herein and
in the Schedules hereto; (c) all obligations of Alside, Inc., the Subsidiaries,
or USS arising exclusively through Alside which are to be performed after the
Closing Date pursuant to any and all contracts, invoices, commitments,
engagements pursuant to which USS supplied goods or services to Alside, but only
to the extent they relate to goods or services delivered or performed by USS
after the Closing Date; (d) all liabilities arising out of claims of product
liability or breach of warranty arising out of products or services sold,
delivered, or provided exclusively by Alside or Alside, Inc. at any time prior
to the Closing Date; and (e) all costs and expenses for advertising services
incurred by Alside, Inc. or USS exclusively on behalf of Alside that are
represented by invoices received after January 31, 1984, and for all such
advertising services to be performed after January 31, 1984, regardless of when
the invoice is received; provided, however, that such definition does not
include (1) any claims for xxxxxxx'x compensation related to an event occurring
prior to the Closing Date; (22) any Taxes
55
based on income earned or arising on or before the losing Date; (3) any
liability for any account payable of Alside except those provided for in
Subparagraphs (a), (b), and (c) above; (4) any liability for any payable due to
USS or an affiliate of USS, except those provided for in (a), (b) and (c) above;
(5) any liability for any violation of any Laws, breach of contract, or
negligence or misconduct by USS or any of the Subsidiaries or any of their
agents, servants, or employees, prior to the Closing Date, except those provided
for in Subparagraphs (a) and (d) above; (6) any liability arising under any Tax
Lease Agreements except as provided in Subparagraph 13.A(iv); (7) any liability
of USS arising out of or pursuant to this Agreement; (8) any liability of USS
with respect to insurance policies; (9) any liability related to any litigation
except that included in (d) above; (10) any liability arising out of a barter
pool arrangement; (11) any liability of USS for any amount to be paid by USS
pursuant to Paragraph 35 hereof; (12) any liability of USS or any Subsidiary
relating to employee benefit plans maintained by USS or, with respect to service
rendered prior to the Closing Date, any Subsidiary; or (13) any liability of USS
or any Subsidiary relative to any employee benefit plan to which USS or, with
respect to services rendered prior to the Closing Date, any Subsidiary is
required to make contributions except as set forth in Paragraph 18.
Notwithstanding anything contained herein (or in the Tax Lease Agreements) to
the contrary, AMI shall not, by reason of its acquisition of the Assets or by
reason of its assumption of the Alside Liabilities or the obligations set forth
in Subparagraph 13.A(iv) or 15.J above, be or become a party to any Tax Lease
Agreement or assume any obligation, duty, term, covenant, condition, warranty,
or agreement of USS or any other party under any Tax Lease Agreement other than
AMI's obligations expressly set forth in Subparagraph 13.A(iv) or 15.J, and no
such obligations, duties, terms, covenants, conditions, warranties, or
agreements shall be included in the Liabilities.
"Alside 1983 Statements" shall have the meaning given it in
Subparagraph 6.D.
"AMI" means Associated Materials Incorporated, a Delaware corporation.
"AMI Indemnitee" means AMI, Xxxxxxx X. Xxxxxxxx, or any of the
officers, directors, shareholders, employees, affiliates, agents, or
representatives of AMI or Xxxxxxx X. Xxxxxxxx to the extent any of them seeks
indemnification hereunder in respect of a particular Loss incurred in a capacity
set forth above. If more than one such person seeks indemnification hereunder,
the term shall refer to each of them separately.
56
"Assets" means the Alside Assets and the Operation Assets.
"Business Days" means each day other than a day upon which commercial
banks in the State of Texas and the State of New York are authorized by law to
remain closed.
"Closing" means the consummation of the transactions contemplated
hereby.
"Closing Date" means the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1954, as amended to the
Closing Date.
"Debtor Relief Laws" means the Bankruptcy Code and all other
applicable liquidation, conservatorship, bankruptcy, moratorium, management,
receivership, insolvency, reorganization, or similar debtor relief laws from
time to time in effect affecting the rights of creditors generally.
"Designated Rate" means the rate announced from time to time by
RepublicBank Dallas, N.A. as its prime rate for loans to commercial borrowers of
substantial size and high credit rating, with respect to the period for which
interest is being computed.
"Electric Cable Operation" means the electrical cable manufacturing
operation of USS located at El Dorado, Arkansas.
"Employees" means all hourly and salaried employees of USS, employed
exclusively with respect to Alside and the Operations (other than X.X. Xxxxxxxx
and X.X. Xxxxxx), and the Subsidiaries.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended by the Multi-Employer Pension Plan Amendments Act of 1980.
"Investment Letter" means a letter, in form and substance to be agreed
to by the parties, in which, among other things, USS represents that USS is
acquiring the Notes for investment for its own account and is not acquiring the
Notes with a view towards the sale or distribution thereof.
"Laws" means all applicable statutes, laws, regulations, ordinances,
orders, franchises, writs, injunctions, or
57
decrees of any state, commonwealth, nation, territory, possession, county,
parish, municipality, or Tribunal.
"Liabilities" means the Alside Liabilities and the Operation
Liabilities.
"Lien" means any lien, mortgage, security interest, charge, or
encumbrance of any kind, including but not limited to the rights of a vendor,
lessor, or similar party under any conditional sales agreement or other title
retention agreement or lease substantially equivalent thereto.
"Losses" means any and all losses, damages, and reasonable costs and
expenses (including reasonable attorneys' fees).
"Names" means Amercable, Amercord, Amergraph, Alside, and all
derivations thereof.
"Net Worth" means the constructed net worth of Alside, the Tire Cord
Operation, and the Electrical Cable Operation as determined by USS on a
consolidated basis in accordance with the system and principles of accounting
employed by Alside, Inc. or USS, as the case may be, in the preparation of the
Alside 1983 Statements and Operation 1983 Statements, applied on a consistent
basis, with inventories valued on a current cost basis and on a before income
and franchise tax basis. The constructed net worth of Alside is the total net
book value (on a consolidated basis) of the Alside Assets, less the total net
book value (on a consolidated basis) of the Alside Liabilities, calculated by
USS as set forth above. The constructed net worth of the Tire Cord Operation is
the total net book value of cash balances, receivables, inventories, and fixed
assets of the Tire Cord Operation, to the extent they are included within
Operation Assets, calculated by USS as set forth above. The constructed net
worth of the Electrical Cable Operation is the total net book value of cash
balances, receivables, inventories, and fixed assets of the Electrical Cable
Operation, to the extent they are included within Operation Assets, less the net
book value of liabilities owing to the City of El Dorado, Arkansas, in
connection with the June 13, 1973, financing, calculated by USS as set forth
above. The sum of such constructed net worth of Alside and of each of the
Operations shall then be adjusted as follows: (i) the amount of prepayments with
respect to any Asset being acquired as specified in Paragraph 2, the enjoyment
of which cannot be transferred to AMI, shall be subtracted from the calculation
made above; (ii) the aggregate amount, as of the date for which
58
the statement of Net Worth is calculated, of the liability accounts listed on
Schedule BB-2 under the caption "USS," which are to be retained and discharged
by USS, shall be added to the calculation made above to the extent such amount
was originally included in the net book value of the Liabilities and the
aggregate amount, as of the date for which the statement of Net Worth is
calculated, of the asset accounts listed on Schedule BB-1, which are to be
retained by USS, shall be deducted from the calculation made above to the extent
such amount was originally included in the net book value of the Assets; (iii)
an amount based on an allowance for warranty claims of $250,000 is to be
subtracted from the calculation made above to the extent warranty claims were
originally not included in the net book value of the Liabilities.
Notwithstanding the foregoing, the parties agree that for purposes of the
determination of Net Worth, the amount of the liability accounts with respect to
Alside entitled "Accrued Commissions and Profit Sharing" and "Accrued Customer
Incentives" are to be valued at $3,800,000 and $2,600,000, respectively, subject
to change by mutual agreement.
"Notes" has the meaning given to it in Subparagraph 4.A hereof.
"Obligations" means liabilities or obligations of any nature (whether
accrued, absolute, contingent, or otherwise) including, without limitation,
unfunded obligations under employee benefit plans or arrangements or liabilities
for Taxes or assessments that are due, whether incurred in respect of or
measured by the income of either of USS or any of the Subsidiaries.
"Operation 1983 Statements" shall have the meaning given it in
Subparagraph 6.D.
"Operation Assets" means all assets owned by USS and used exclusively
in the Tire Cord Operation or the Electric Cable Operation including, without
limitation, all property, tangible or intangible, real, personal, or mixed,
cash, accounts receivable, any securities, choses in action, permits, licenses,
leases, prepayments, work in process, claims and rights of any kind (whether by
contract or otherwise), and all rights in patents, trade names, trademarks,
service marks, copyrights, all as the same shall exist as of December 31, 1983
(except as they may change, be added to, or be reduced without causing a breach
of a representation or obligation of USS hereunder, unless waived by AMI in
accordance with this Agreement, between December 31, 1983, and the Closing
Date);
59
provided, however, that such definition shall not include any rights,
securities, or interests in USS Portfolio Inc., in any claims which may be
raised as counterclaims or third party claims in connection with pending or
threatened litigation other than litigation involving product liability, breach
of warranty, or collection of accounts receivable, in any cash that AMI does
not, at least ten days prior to the Closing Date, notify USS it agrees to
acquire, or in the trademarks listed on Schedule CC relating to "TIGER" and
associated marks in other classes of goods and all trademark rights to "USS,"
"UNITED STATES STEEL," "U.S. STEEL," or any variations thereof except as
contemplated by Paragraph 17, or in any insurance policies.
"Operation Liabilities" means (a) all of the liabilities of USS
arising exclusively out of the Operations as reflected in the Operation 1983
Statements, as the same may change, be added to, or be reduced without causing a
breach of a representation or obligation of USS hereunder, unless waived by AMI
in accordance with this Agreement, between December 31, 1983, and the Closing
Date; (b) all obligations of USS arising exclusively through the Operations
which are to be performed after the Closing Date pursuant to any and all
permits, licenses, leases, mortgages, contracts, invoices, and other commitments
and engagements of whatever nature, but only to the extent they relate to goods
or services delivered or performed by the other party(ies) thereto after the
Closing Date, including, but not limited to, those permits, licenses, leases,
mortgages, contracts, invoices, and other commitments and engagements described
herein and in the Schedules hereto; and (c) all obligations of USS arising
exclusively through the Operations which are to be performed after the Closing
Date pursuant to any and all contracts, invoices, commitments and engagements
pursuant to which USS supplies goods or services to the Operations, but only to
the extent they relate to goods or services delivered or performed after the
Closing Date by USS; (d) the industrial development authority financing of the
Electric Cable Operation's plant; and (e) all liabilities arising out of claims
for product liability or breach of warranty arising out of products or services
sold, delivered, or provided exclusively by the Operations at any time prior to
the Closing Date; provided, however, that such definition does not include (1)
any claims for xxxxxxx'x compensation related to an event occurring prior to the
Closing Date; (2) any Taxes based on income earned or arising on or before the
Closing Date; (3) any liability for any account payable of either of the
Operations except those provided for in (a), (b), (c), and (d) above; (4) any
liability for any payables due to USS or an affiliate of USS except those
provided for in (a), (b), and (c)
60
above; (5) any liability for any violation of any Laws, breach of contract, or
negligence or misconduct by USS or any of its agents, servants, or employees,
prior to the Closing Date, except those provided in (a) and (e) above; (6) any
liability arising under any Tax Lease Agreement except as provided in
Subparagraph 13.A(iv); (7) any liability of USS arising out of or pursuant to
this Agreement; (8) any liability of USS with respect to insurance policies; (9)
any liability arising under Paragraph 23 of that certain Production Agreement
between USS and Xxxx and Company effective January 1, 1980; (10) any liability
related to litigation except that included in (e) above; (12) any liability of
USS for any amount to be paid by USS pursuant to Paragraph 35 hereof; (13) any
liability of USS relating to employee benefit plans maintained by USS; (14) any
liability of USS relative to employee benefit plans to which USS is required to
make contributions except as set forth in Paragraph 18; or (15) any liability
arising out of a claim of patent infringement based upon the information set
forth in Schedule F. Notwithstanding anything contained herein (or in the Tax
Lease Agreements) to the contrary, AMI shall not, by reason of its acquisition
of the Assets or by reason of its assumption of the Operation Liabilities or the
obligations set forth in Subparagraphs 13.A(iv) or 15.J above, be or become a
party to any Tax Lease Agreement or assume any obligation, duty, term, covenant,
condition, warranty, or agreement of USS or any other party under any Tax Lease
Agreement other than AMI's obligations expressly set forth in Subparagraph
13.A(iv) or 15.J and no such obligations, duties, terms, covenants, conditions,
warranties, or agreements shall be included in the Liabilities.
"Patents and Patent Applications" means all rights in the patents and
patent applications listed on Schedule H hereto.
"Plan" means the Alside, Inc. Factory Employee's Pension Plan
described in Subparagraph 18.L.
"Permitted Liens" means (a) liens for Taxes not delinquent, (b) liens
in connection with worker's compensation, unemployment insurance, or social
security obligations that arise in the ordinary course of business and that have
arisen notwithstanding compliance with, and fulfillment of, its obligations with
respect to the matters or transactions giving rise to the liens, (c) mechanic's,
workmen's, materialmen's, landlord's, carrier's and vendor's liens, liens
arising under conditional sale or other title retention agreements, and other
like liens arising in the ordinary course of business that have
61
arisen notwithstanding compliance with, and fulfillment of, obligations with
respect to the matters or transactions giving rise to the liens.
"Proceeding" means any demand, assertion, claim, action, proceeding,
judicial or otherwise, by any third party.
"Regulations" means the Income Tax Regulations under the Code
promulgated by the United States Treasury Department, including Part
5c-Temporary Income tax Regulations under the Economic Recovery Tax Act of 1981
and Part 5f-Temporary Income Tax Regulations under the Tax Equity and Fiscal
Responsibility Act of 1982, as in effect on the Closing Date.
"Security Agreements" means the agreements granting a mortgage or
security interest to USS that is inferior only to the mortgages and security
interest created pursuant to the terms of the financings described on Schedule
Y, as security for payment of the Second Note, in form and substance
satisfactory to AMI and USS.
"Subsidiaries' means Alside Molded Products, Inc., a Delaware
corporation, Guard-All Building Materials Company, Inc., a Delaware corporation,
Aluminum Credit Corporation, a California corporation, Aluminum Credit
Corporation, a Washington corporation, and Alside, Inc., a Delaware corporation
incorporated on January 3, 1984.
"Tax Lease Agreements" means that certain Safe Harbor Lease dated
April 23, 1982, between X.X. Xxxxx Company and USS, that certain Safe Harbor
Lease dated December 22, 1982, between CSW Financial, Inc. and USS, and that
certain Safe Harbor Lease dated June 13, 1982, between Xxxx-Xxxxx Stores, Inc.
and Alside, Inc.
"Tax Lessor" means the party designated as "lessor" under each Tax
Lease Agreement.
"Taxes" means all net income, gross income, gross receipts, sales and
use, ad valorem, franchise, license, withholding, payroll, excise, or other
taxes imposed by a foreign, federal, state, county, or local taxing authority,
together with any interest or penalty thereon.
"Technology" means and includes all useful unpatented technical data
and know-how, proprietary information, and trade secrets which (a) are possessed
by USS and used in connection with either of the Operations or Alside or are
possessed by any
62
of the Subsidiaries, (b) USS has the right to disclose and license to AMI as of
the effective date of this Agreement, and (c) relate to or are used in
connection with the current operations of the Operations, Alside, or any of the
Subsidiaries.
"Tire Cord Operation" means the tire cord manufacturing operation of
USS located at Lumber City, Georgia.
"Trademarks" means all rights in the trademarks and trademark
registrations listed on Schedule G hereto and the good will related thereto.
Expressly excluded from Trademarks being transferred are the trademarks and
trademark registrations listed in Schedule CC relating to "TIGER" and associated
marks in other classes of goods, and all trademark rights to "USS", "UNITED
STATES STEEL," "U.S. STEEL," or other variations thereof.
"Tribunal" means any court or governmental department, commission,
board, bureau, agency, or instrumentality of the United States of America or of
any state, commonwealth, nation, territory, possession, county, parish, or
municipality, domestic or foreign.
"USS" means United States Steel Corporation, a Delaware corporation.
"USS Indemnitee" means USS, Alside, or any of their officers,
directors, employees, affiliates, agents, or representatives to the extent any
of them seeks indemnification hereunder in respect of a particular Loss to the
extent incurred in a capacity set forth above. If more than one of them seeks
indemnification hereunder, the term shall refer to each of them separately.
"USS Pension Plan" means the USS Plan for Employee Pension Benefits
(Revision of 1950), as amended.
[INTENTIONALLY LEFT BLANK]
63
EXECUTED as of the day and year first herein set forth.
ASSOCIATED MATERIALS INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
President
UNITED STATES STEEL CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Senior Vice President
Corporate Strategic Planning
