STOCK PURCHASE AGREEMENT
DATED AS OF SEPTEMBER 19, 1997
BY AND AMONG
THE STOCKHOLDERS OF APPLIED INDUSTRIAL MATERIALS CORPORATION,
CERTAIN STOCKHOLDERS OF AIMCOR ENTERPRISES INTERNATIONAL, INC.,
AIMCOR (GERMANY) LIMITED PARTNERSHIP, AND
AIMCOR (LUXEMBOURG) LIMITED PARTNERSHIP,
AS FIRST PARTIES,
AND
XXXXXX INDUSTRIES, INC.,
AS SECOND PARTY
TABLE OF CONTENTS
Page
----
ARTICLE 1
Purchases and Sales of Shares; Closing and Manner of Payment
1.1 Purchases and Sales of Shares...............................2
1.2 Purchase Price..............................................3
1.3 Adjustments to the Base Purchase Price......................4
1.4 Manner of Payment of the Purchase Price.....................5
1.5 Determination of Adjustments to Base Purchase
Price. .....................................................7
1.6 Disputes Regarding the Closing Balance Sheet and
Adjusted Earnings Computation. ............................11
1.7 Manner of Delivery of Shares...............................12
1.8 Time and Place of Closing..................................13
ARTICLE 2
Representations and Warranties........................................13
2.1 General Statement..........................................13
2.2 Representations and Warranties of Purchaser................14
2.3 Joint and Several Representations and Warranties of
the Stockholders...........................................16
2.4 Individual Representations and Warranties of the
Stockholders...............................................36
2.5 Limitation on Warranties...................................37
2.6 Definition of Knowledge....................................37
ARTICLE 3
Conduct Prior to the Closing..........................................38
3.1 General....................................................38
3.2 Obligations of the Stockholders, Germany LP and
Luxembourg LP..............................................38
3.3 Purchaser's Obligations....................................45
3.4 Joint Obligations..........................................46
ARTICLE 4
Conditions to Closing.................................................47
4.1 Conditions to Obligations of the Stockholders,
Germany LP and Luxembourg LP...............................47
4.2 Conditions to Purchaser's Obligations......................48
ii
ARTICLE 5
Closing...............................................................50
5.1 Form of Documents..........................................50
5.2 Purchaser's Deliveries.....................................50
5.3 Stockholders', Germany LP's and Luxembourg LP's
Deliveries.................................................51
5.4 Other Transactions Occurring at the Closing.......................54
ARTICLE 6
Post-Closing Agreements...............................................55
6.1 Post-Closing Agreements....................................55
6.2 Inspection of Records......................................55
6.3 Confidentiality............................................56
6.4 Use of Trademarks..........................................57
6.5 Third Party Claims.........................................57
6.6 Further Assurances.........................................57
6.7 Agreement to Defend and Indemnify..........................58
6.8 No Solicitation............................................60
6.9 Non-Competition............................................62
6.10 Section 338(h) (10) Election; Tax Returns..................63
6.11 Pension Plans..............................................66
6.12 Certain Collections........................................67
ARTICLE 7
Indemnification.......................................................67
7.1 General....................................................67
7.2 Certain Definitions........................................67
7.3 Stockholders' Indemnification Obligations..................68
7.4 Limitation on Stockholders' Indemnification
Obligations................................................70
7.5 Purchaser's Indemnification Covenants......................74
7.6 Cooperation................................................74
7.7 Third Party Claims.........................................75
7.8 Environmental Indemnities..................................78
7.9 Indemnification Exclusive Remedy...........................79
ARTICLE 8
Effect of Termination/Proceeding......................................79
8.1 General....................................................79
8.2 Right to Terminate.........................................79
8.3 Certain Effects of Termination.............................80
8.4 Remedies...................................................80
8.5 Right to Damages...........................................81
iii
ARTICLE 9
Stockholders' Committee...............................................81
9.1 Appointment of Stockholders' Committee.....................81
9.2 Authority..................................................81
9.3 Reliance...................................................83
9.4 Actions by Stockholders....................................83
9.5 Indemnification of Purchaser and Its Affiliates............84
9.6 Indemnification of Stockholders' Committee.................84
ARTICLE 10
Miscellaneous.........................................................85
10.1 Fees.......................................................85
10.2 Publicity. ...............................................85
10.3 Notices....................................................85
10.4 Expenses; Transfer Taxes...................................86
10.5 Entire Agreement...........................................87
10.6 Non-Waiver.................................................88
10.7 Counterparts...............................................88
10.8 Severability...............................................89
10.9 Applicable Law.............................................89
10.10 Binding Effect; Benefit....................................89
10.11 Assignability..............................................89
10.12 Governmental Reporting.....................................89
10.13 Waiver of Trial by Jury....................................90
10.14 Consent to Jurisdiction....................................90
10.15 Definitions................................................90
10.16 Amendments.................................................93
10.17 Headings...................................................93
10.18 Trustee Exculpation........................................93
iv
TABLE OF EXHIBITS
Exhibit A - Stockholder List
Exhibit B - Chart depicting the members and
ownership of the AIMCOR Group
Exhibit C - Allocation of Purchase Price
Exhibit D - Form of Escrow Agreement
Exhibit E - Commitment Letter
Exhibit F - Material Consents
Exhibit G - Form of Legal Opinion of
Purchaser's Counsel
Exhibit H - Form of Legal Opinion of
Stockholders' Counsel
Exhibit I - Form of License Agreement
Exhibit J - Form of Services Agreement
v
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made as of September 19, 1997 by and
among the individuals and trusts (the "Stockholders") executing copies of this
Agreement as stockholders of Applied Industrial Materials Corporation, a
Delaware corporation ("AIMCOR"), and as stockholders of Aimcor Enterprises
International, Inc., a Nevada corporation ("Enterprises"), Aimcor (Germany)
Limited Partnership, a Delaware Limited Partnership ("Germany LP"), and Aimcor
(Luxembourg) Limited Partnership, a Delaware limited partnership ("Luxembourg
LP"), as first parties, and Xxxxxx Industries, Inc., a Delaware corporation, as
second party ("Purchaser").
R E C I T A L S
A. The Stockholders own all of the outstanding shares of stock of AIMCOR.
AIMCOR owns approximately 79% of the outstanding shares of stock of all classes
of Enterprises, and the Stockholders own the balance of the outstanding shares
of stock of Enterprises. The Stockholders also own all of the Limited
Partnership Units of Germany LP and Luxembourg LP, and certain of the
Stockholders own all of the outstanding shares of stock of the general partners
of Germany LP and Luxembourg LP.
B. Germany LP and its general partners own all of the outstanding
participation interests of AIMCOR Mannheim GmbH, a German entity ("AIMCOR
Germany"). Luxembourg LP owns all of the outstanding shares of stock of AIMCOR
Luxembourg S.A., a Luxembourg corporation ("AIMCOR Luxembourg").
1
C. Purchaser desires to purchase all of the outstanding shares of stock of
AIMCOR and AIMCOR Luxembourg, all of the outstanding shares of stock of
Enterprises which are not owned by AIMCOR, and all of the participation
interests of AIMCOR Germany.
D. The Stockholders, Germany LP and Luxembourg LP desire to sell all of
such shares and participation interests, on the terms and subject to the
conditions herein contained.
A G R E E M E N T S
Therefore, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE 1
Purchases and Sales of Shares; Closing and Manner of Payment
1.1 Purchases and Sales of Shares. On the terms and subject to the
conditions contained in this Agreement, at the Closing (as herein defined):
(a) the Stockholders shall sell and transfer to Purchaser, and
Purchaser shall purchase, all of the outstanding shares of stock of
AIMCOR;
(b) the Stockholders shall sell and transfer to Purchaser, and
Purchaser shall purchase, all of the outstanding shares of stock of
Enterprises which are not owned by AIMCOR;
(c) Germany LP shall sell and transfer to Purchaser, Xxxxxxx X.
Xxxxxxxxx ("Xxxxxxxxx") shall cause CPG FRG, Inc. (a corporation wholly
owned by Xxxxxxxxx) to sell and transfer to Purchaser, and Xxxxx X.
Xxxxxxxx ("Xxxxxxxx") shall cause WCK FRG, Inc. (a corporation wholly
owned by Xxxxxxxx) to sell and transfer to Purchaser, and Purchaser shall
purchase, all of the outstanding participation interests of AIMCOR
Germany; and
2
(d) Luxembourg LP shall sell and transfer to Purchaser, and
Purchaser shall purchase, all of the outstanding shares of stock of AIMCOR
Luxembourg.
The shares of stock of AIMCOR, Enterprises and AIMCOR Luxembourg, and the
participation interests in AIMCOR Germany to be purchased and sold pursuant to
this Agreement are referred to herein collectively as the "Purchased Shares".
The number of Purchased Shares of each of the AIMCOR Entities (as defined below)
to be sold by the Stockholders, Germany LP and Luxembourg LP are set forth in
Exhibit A, attached hereto. AIMCOR, Enterprises, AIMCOR Germany and AIMCOR
Luxembourg are referred to herein collectively as the "AIMCOR Entities" and
individually as an "AIMCOR Entity", and AIMCOR, its Subsidiaries (as herein
defined), AIMCOR Germany and AIMCOR Luxembourg are referred to herein
collectively as the "AIMCOR Group". Attached hereto as Exhibit B is a chart
depicting the members of the AIMCOR Group and the ownership of such members.
1.2 Purchase Price. Subject to Section 1.3, the aggregate purchase price
("Purchase Price") of the Purchased Shares shall be equal to (a) plus (b) plus
(c) plus (d) plus (e) minus (f), where (a), (b), (c), (d), (e) and (f) are the
following:
(a) Four Hundred Three Million dollars ($403,000,000)(the "Base
Purchase Price"); provided, however, that if the Closing shall occur after
the date which is 30 days after the date hereof notwithstanding the
fulfillment of all conditions of Closing set forth in Section 3.4(d) and
Article IV other than Section 4.2(h), the Base Purchase Price shall be
increased by an amount determined by multiplying $403,000,000 by a
percentage equal to the per annum interest rate which would be payable by
Purchaser pursuant to the Commitment Letter (as herein defined) if the
Closing occurred on said date, and multiplying the resulting amount by a
fraction the numerator of which is the number of days in the period
commencing 31 days after the date hereof and ending on
3
the Closing Date, both dates inclusive, and the denominator of which is
365;
(b) the aggregate amount of cash on hand and in banks,
cash-equivalents and marketable securities of the AIMCOR Group as
reflected on the Closing Balance Sheet (as herein defined);
(c) the aggregate principal amount of, and accrued interest with
respect to, all notes receivable and loans receivable from any of the
Stockholders to AIMCOR ("Stockholder Notes and Loans") as of the Closing
Date;
(d) the amount of the deposit made by AIMCOR with the Internal
Revenue Service pursuant to sections 444 and 7519 of the Code (as herein
defined), as reflected on the Closing Balance Sheet;
(e) the amount of interest accrued as of the Closing Date under
loans made by AIMCOR to Germany LP and Luxembourg LP which is not
reflected on the Closing Balance Sheet; and
(f) the aggregate principal amount of the indebtedness of the AIMCOR
Group for borrowed money (including all industrial revenue bonds and
pollution control bonds) as of September 30, 1997 (excluding 25% of the
principal amount of the indebtedness for borrowed money of TAC, as herein
defined), as reflected on the Closing Balance Sheet ("Indebtedness").
The items described in paragraphs (b), (c) and (d) above are referred to herein
as "Cash Equivalents". The Purchase Price shall be allocated among the
Stockholders, Germany LP and Luxembourg LP as set forth in Exhibit C attached
hereto.
1.3 Adjustments to the Base Purchase Price. There shall be the following
adjustments to the Base Purchase Price:
(a) if the Adjusted Carbon Products Group Earnings from Operations
(as herein defined), computed in accordance with Section 1.5, shall be
less than $37.9 million, then the Base Purchase Price shall be reduced for
all purposes hereof by an amount equal to eight times the amount by which
$37.9 million exceeds the Adjusted Carbon Products Group Earnings From
Operations; and
(b) the Base Purchase Price shall be:
4
(i) increased by the amount by which the Adjusted Net Book
Value (as herein defined) exceeds $90,900,000; and
(ii) reduced by the amount by which $90,900,000 exceeds the
Adjusted Net Book Value.
The Adjusted Net Book Value shall be (w) the combined Stockholders' Equity
of the AIMCOR Group, as determined in accordance with Section 1.5, plus
(x) Indebtedness, minus (y) Cash Equivalents, all as reflected on the
Closing Balance Sheet.
1.4 Manner of Payment of the Purchase Price. The Purchase Price shall be
paid as follows:
(a) For the purposes of the Closing, the Stockholders' Committee (as
herein defined) shall make a good-faith estimate of the Purchase Price
(the "Estimated Cash Payment"), based upon the most recent ascertainable
financial information of the AIMCOR Group. The Stockholders' Committee
shall notify the Purchaser of the amount of the Estimated Cash Payment by
written notice (which shall be itemized to show the amounts estimated for
each of the paragraphs of Sections 1.2 and 1.3) delivered to Purchaser not
later than three (3) business days prior to the Closing Date. At the
Closing, Purchaser shall pay the Estimated Cash Payment, less amounts
(subject to the last sentence of this Section 1.4) sufficient to fund the
Escrows (as defined herein) to the Stockholders, Germany LP and Luxembourg
LP, by wire transfer to such account as the Stockholders' Committee shall
designate by written notice delivered to Purchaser not later than three
(3) business days prior to the Closing Date.
(b) At the Closing, the Stockholders' Committee, Germany LP and
Luxembourg LP, Purchaser and an escrow agent to be designated by Purchaser
and the Stockholders' Committee (the "Escrow Agent") shall execute and
deliver an Escrow Agreement (the "Escrow Agreement") dated the Closing
Date in substantially the form of Exhibit D hereto. Pursuant to the Escrow
Agreement, at the Closing, Purchaser shall deposit with the Escrow Agent,
in immediately available funds, (i) a portion of the Estimated Purchase
Price equal to $10,000,000 (the "Hold Back Fund") to secure the obligation
of the Stockholders' Committee under Section 1.4(c)(ii) and (ii) a portion
of the Estimated Purchase Price equal to $8,750,000, representing the
estimated amount for which the Stockholders shall indemnify Purchaser
pursuant to Sections 7.3(a)(vi) and (vii) (the "Tax Indemnity Escrow") and
(iii) a portion of the Estimated Purchase Price equal to $15,000,000 (the
"Indemnity Escrow", and together with the Hold Back Fund and the Tax
5
Indemnity Escrow, the "Escrows") to secure the obligations of the
Stockholders, Germany LP and Luxembourg LP to indemnify Purchaser pursuant
to Section 7.3(a) (other than subparagraphs (vi) and (vii) thereof). As
provided in the Escrow Agreement:
(i) the Hold Back Fund shall terminate on the later of (x) 45
days from the date that the Closing Balance Sheet and the Adjusted
Earnings Computation are received by Purchaser and (y) the
resolution of all outstanding claims made against the Hold Back
Fund;
(ii) the Tax Indemnity Escrow shall terminate on the date on
which all Tax (as herein defined) returns with respect to the
matters for which the Stockholders shall be obligated to indemnify
Purchaser pursuant to Sections 7.3(a)(vi) and (vii) shall have been
filed; and
(iii) the Indemnity Escrow shall terminate on the later of (x)
the sixth anniversary of the Closing Date and (y) the resolution of
all outstanding claims made against the Indemnity Escrow, except
that 50% of the Indemnity Escrow shall be released 456 days after
the Closing Date; provided, however, that the amount to be released
on such 456th day shall be reduced by the amount of all claims
against the Indemnity Escrow which have theretofore been paid from
the Indemnity Escrow or are outstanding at that time; provided,
further, that if after the third anniversary of the Closing Date,
(w) there shall be no outstanding claims against the Indemnity
Escrow, (x) all contamination (if any) with respect to AIMCOR
Germany's former facility in Mannheim, Germany shall be remediated
in accordance with Environmental Laws (as herein defined), and (y)
all ponds for the disposal by TAC of silica breeze which are located
in Bridgeport, Alabama have been closed in accordance with
Environmental Laws, the Indemnity Escrow shall terminate on the date
on which all three of such events shall have occurred.
The Escrows will be governed by the terms and conditions of the Escrow
Agreement. The parties agree to make such changes in the Escrow Agreement
as may reasonably be required by the Escrow Agent. In lieu of Purchaser
depositing $15,000,000 of the Estimated Purchase Price in cash in the
Indemnity Escrow, by written notice to Purchaser, delivered not later than
three business days prior to the Closing Date, the Stockholders' Committee
may elect to deposit a letter of credit of a bank reasonably satisfactory
to Purchaser in the stated amount of $15,000,000 (the "Letter of Credit"),
which the Escrow Agent may draw upon in the event Purchaser shall make a
claim
6
against the Indemnity Escrow. The Letter of Credit shall meet the
requirements set forth in the Escrow Agreement. If the Stockholders'
Committee does not elect to deposit the Letter of Credit in the Indemnity
Escrow, the form of Escrow Agreement attached hereto as Exhibit D shall be
appropriately modified to reflect a $15,000,000 cash deposit.
(c) Following the Closing, the parties shall determine the final
Purchase Price, taking into account the adjustments to the Base Purchase
Price required pursuant to Section 1.3 and the final determinations of the
amounts of Cash Equivalents and Indebtedness and employing the procedures
and criteria set forth in Sections 1.5 and 1.6. If, based on the Purchase
Price as finally determined:
(i) the Purchase Price exceeds the Estimated Cash Payment,
Purchaser shall forthwith pay the excess to the Stockholders,
Germany LP and Luxembourg LP;
(ii) the Estimated Cash Payment exceeds the Purchase Price,
the Stockholders' Committee (on behalf of the Stockholders, Germany
LP and Luxembourg LP) shall forthwith pay the excess to Purchaser;
together with interest on such excess from the Closing Date to the date of
payment, at a rate equal to the weighted average of the "prime rate" in
effect from time to time as reported in the Wall Street Journal.
(d) To the extent that the Stockholders' Committee is obligated to
make any payment to the Purchaser pursuant to Section 1.4(c), the amount
of such payment shall be paid by the Stockholders' Committee to Purchaser,
in the first instance, from the Hold Back Fund and the remainder of the
Hold Back Fund, if any, shall be distributed to the Stockholders'
Committee. If the amount payable to the Purchaser by the Stockholders'
Committee exceeds the amount in the Hold Back Fund, the amount of such
excess will be paid by the Stockholders' Committee within five business
days of the final determination of such amount by wire transfer of
immediately available funds to an account designated by Purchaser.
1.5 Determination of Adjustments to Base Purchase Price. The amounts of
Adjusted Carbon Products Group Earnings From Operations and Adjusted Net Book
Value shall be determined as follows:
7
(a) Such amounts shall initially be derived from the audited
financial statements of (w) AIMCOR and its subsidiaries (including,
without limitation, Enterprises and Tennessee Alloys Company, an Alabama
general partnership ("TAC"), net of the minority interest of Allegheny
Xxxxxx Steel Co. in TAC) on a consolidated basis, (x) AIMCOR Germany, and
(y) AIMCOR Luxembourg, as of and for the fiscal year ended September 30,
1997 (the "1997 Financial Statements"). The 1997 Financial Statements
shall be prepared by the Stockholders' Committee and examined by AIMCOR's
accountants, Xxxxxx Xxxxxxxx & Co., LLP (the "Accountants"), at AIMCOR's
expense. The 1997 Financial Statements shall be prepared in accordance
with generally accepted accounting principles applicable in the United
States, Germany and Luxembourg, respectively, applied in a manner
consistent with the accounting principles applied in the preparation of
the Financial Statements (as herein defined) for the fiscal year ended
September 30, 1996. In connection with the preparation of the 1997
Financial Statements, inventories shall be determined pursuant to physical
counts taken not earlier than August 25, 1997 (which shall include, with
respect to all inventory in stockpiles, quantities as determined by those
independent licensed surveyors which AIMCOR has used in the past, unless
otherwise agreed by the Stockholders' Committee and Purchaser) and rolled
forward to September 30, 1997. To the extent such inventories have not
heretofore been taken, Purchaser and its representatives shall have the
right to observe the taking of the inventories.
(b) From the 1997 Financial Statements, the Accountants shall
prepare a combined balance sheet for (w) AIMCOR and its subsidiaries on a
consolidated basis, (x) AIMCOR Germany, and (y) AIMCOR Luxembourg (the
"Closing Balance Sheet"). The Closing Balance Sheet shall be prepared on
the following basis:
(i) the Closing Balance Sheet shall be prepared in accordance
with generally accepted accounting principles applicable in the
United States ("U.S. GAAP"), applied on a basis consistent with the
Financial Statements of AIMCOR and its subsidiaries (on a
consolidated basis) for the fiscal year ended September 30, 1996,
except for the method of valuation of inventories and the omission
of footnote disclosures required by U.S. GAAP, and shall include all
normal year-end adjustments;
(ii) inventories shall be valued at the lower of cost or
market value, with cost being determined on a first in-first out
basis;
8
(iii) the minority interest of the Stockholders in Enterprises
shall be reflected in the combined stockholders' equity of the
AIMCOR Group;
(iv) notes receivable from Stockholders which represented a
portion of the purchase price of their Purchased Shares shall be
treated as an asset rather than as a reduction of stockholders'
equity to the extent contained in the Adjusted Net Book Value target
of $90,900,000;
(v) any Excluded Assets (as herein defined) shall be
disregarded;
(vi) if in restating the financial statements of AIMCOR
Germany and AIMCOR Luxembourg on a U.S. GAAP basis, the U.S. dollar
amount of stockholders' equity of those companies changes from what
it would be if such financial statements were stated on the basis of
German GAAP and Luxembourg GAAP, respectively, then the effect of
such changes on the Closing Balance Sheet shall be disregarded; and
(vii) without implication that the contrary would otherwise be
true, the principal of and accrued interest under loans receivable
due to AIMCOR from Germany LP and Luxembourg LP shall be reflected
as assets of AIMCOR.
The 1997 Financial Statements and the Closing Balance Sheet shall each
contain an audit opinion of the Accountants, addressed to the
Stockholders' Committee. The audit opinions with respect to the 1997
Financial Statements shall be identical in form to the opinions which the
Accountants rendered with respect to the Financial Statements for the
fiscal year ended September 30, 1996; and the opinion with regard to the
Closing Balance Sheet shall be substantially similar, except that it shall
contain a qualification to reflect the adjustments described in
subparagraphs (i) through (vii) above.
(c) Concurrently with the delivery of the 1997 Financial Statements
and the Closing Balance Sheet, the Accountants shall also deliver to the
Stockholders' Committee and Purchaser (i) a statement (the "Carbon
Products Group Statement of Earnings") setting forth the income from
operations of the carbon products segment of the AIMCOR Group (the "Carbon
Products Group") and (ii) an opinion stating that the Carbon Products
Group Statement of Earnings has been derived from the 1997 Financial
Statements and fairly reflects the operating earnings of the Carbon
Products Group. As promptly as possible after the date of delivery of the
Carbon
9
Products Group Statement of Earnings, the Stockholders' Committee shall
prepare and deliver to Purchaser a computation of the Adjusted Carbon
Products Group Earnings from Operations (the "Adjusted Earnings
Computation"). The Adjusted Carbon Products Group Earnings from Operations
shall be the income from operations of the Carbon Products Group as set
forth in the Carbon Products Group Statement of Earnings, adjusted as
follows:
(i) the proceeds of the KHD arbitration settlement, in the
approximate amount of $4,452,000, shall be excluded;
(ii) all non-recurring items, other than the following, shall
be excluded:
(A) physical inventory adjustments made during or with
respect to the 1997 fiscal year;
(B) the gross margin from a certain sale in the
approximate amount of $5,943,000 which was recorded for
financial reporting purposes in the 1997 fiscal year but for
management reporting purposes in the 1996 fiscal year, which
gross margin is in the approximate amount of $731,000;
(C) the proceeds of business interruption insurance
resulting from a fire at the Torrance, California refinery of
Mobil Corporation in the amount of $1,000,000; and
(D) excise tax refunds in the approximate amount of
$505,000;
(iii) there shall be no charge or credit to earnings resulting
from the valuation for the fiscal year ended September 30, 1997 of
assets or liabilities of the Carbon Products Group which existed at
September 30, 1996, where such assets or liabilities did not create
earnings or expense from operations for the 1997 fiscal year;
(iv) no adjustments shall be made for LIFO valuation or gains
or losses on foreign currency exchange or earnings or losses from
formed products; and
(v) any expenses related to Excluded Assets shall be
disregarded.
(d) The Stockholders' Committee and Purchaser shall use their
respective reasonable efforts to cause the 1997
10
Financial Statements, the Closing Balance Sheet and the Carbon Products
Group Statement of Earnings to be delivered by the Accountants, and the
Adjusted Earnings Computation to be delivered by the Stockholders'
Committee, not later than December 31, 1997 and to cause copies thereof to
be delivered to Purchaser and the Stockholders' Committee promptly upon
their availability. Purchaser and the Stockholders' Committee shall cause
the AIMCOR Group to make available to the Accountants the books, records
and personnel of the AIMCOR Group which the Stockholders' Committee and
the Accountants require in order to prepare and audit, respectively, the
1997 Financial Statements and prepare the Carbon Products Group Statement
of Earnings. The Stockholders' Committee and Purchaser shall cause the
Accountants to make available to Purchaser and the Stockholders' Committee
and their respective accountants the Accountants' work papers. The
Stockholders' Committee shall provide Purchaser and its accountants
reasonable access to all information reasonably requested by Purchaser or
its accountants regarding the Stockholders' Committee's preparation of the
Adjusted Earnings Computation.
1.6 Disputes Regarding the Closing Balance Sheet and Adjusted Earnings
Computation. Provided that it was prepared in accordance with Section 1.5,
Purchaser shall not have the right (either directly or indirectly by disputing
the Adjusted Earnings Computation) to dispute the Carbon Products Group
Statement of Earnings, which, if so prepared, shall be deemed to be final when
delivered by the Accountants and binding upon both Purchaser and the
Stockholders. Disputes with respect to the Closing Balance Sheet or the Adjusted
Earnings Computation shall be dealt with as follows:
(a) Purchaser shall have forty five (45) days after receipt of the
Closing Balance Sheet and the Adjusted Earnings Computation (the "Dispute
Period") to dispute any of the elements of or amounts reflected on the
Closing Balance Sheet or any of the adjustments set forth on the Adjusted
Earnings Computation (a "Dispute"). If Purchaser does not give written
notice of a Dispute within the Dispute Period to the Stockholders'
Committee (a "Dispute Notice"), the Closing Balance Sheet and the Adjusted
Earnings Computation shall be deemed to have been accepted and agreed to
by Purchaser in the form in which they were delivered by the Stockholders'
11
Committee, and shall be final and binding upon the parties hereto. If
Purchaser has a Dispute, Purchaser shall give the Stockholders' Committee
a Dispute Notice within the Dispute Period, setting forth in reasonable
detail the elements and amounts with which it disagrees. Within thirty
(30) days after delivery of such Dispute Notice, the parties hereto shall
attempt to resolve such Dispute and agree in writing upon the final
content of the Closing Balance Sheet or Adjusted Earnings Computation (as
the case may be).
(b) If Purchaser and the Stockholders' Committee are unable to
resolve any Dispute within the thirty (30) day period after the
Stockholders' Committee's receipt of a Dispute Notice, the Stockholders'
Committee and Purchaser shall jointly engage a nationally recognized
certified public accounting firm (or, if they cannot agree on a mutually
acceptable firm, they shall cause their respective accounting firms to
select such firm) (the "Arbitrating Accountant") as arbitrator. In
connection with the resolution of any Dispute, the Arbitrating Accountant
shall have access to all documents, records, work papers, facilities and
personnel necessary to perform its function as arbitrator. The Arbitrating
Accountant's function shall be to review the Disputes and determine, based
on the requirements of Section 1.5 and, only with respect to the Disputes,
whether and to what extent the Closing Balance Sheet or the Adjusted
Earnings Computation (as the case may be) requires adjustment. The
arbitration before the Arbitrating Accountant shall be conducted in
accordance with the commercial arbitration rules of the American
Arbitration Association. The Arbitrating Accountant's award with respect
to any Dispute shall be final and binding upon the parties hereto, and
judgment may be entered on the award. The Stockholders' Committee shall
pay a portion of the fees and expenses of the Arbitrating Accountant in an
amount determined by multiplying the total amount of such fees and
expenses by a fraction the numerator of which is the amount awarded to
Purchaser by the Arbitrating Accountant and the denominator of which is
aggregate amount which is the subject matter of the Dispute, and Purchaser
shall pay the balance of such fees and expenses. Upon the resolution of
all Disputes, the Closing Balance Sheet or the Adjusted Earnings
Computation (as the case may be) shall be revised to reflect such
resolution.
1.7 Manner of Delivery of Shares. At the Closing, the Stockholders,
Germany LP and Luxembourg LP, respectively, shall deliver to Purchaser
certificates evidencing the Purchased Shares of AIMCOR, Enterprises and AIMCOR
Luxembourg, duly endorsed in
12
blank, or accompanied by valid stock powers duly executed in blank, in proper
form for transfer, with all necessary stock transfer stamps affixed, and duly
executed instruments of transfer of all participation interests of AIMCOR
Germany.
1.8 Time and Place of Closing. The transaction contemplated by this
Agreement shall be consummated (the "Closing") at the offices of Altheimer &
Xxxx, 00 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000 at 10:00 a.m., on
October 14, 1997 or on such other date, or at such other time or place, as shall
be mutually agreed upon by the Stockholders' Committee and Purchaser; provided,
however, that the date of the Closing shall be automatically extended from time
to time for so long as any of the conditions set forth in Sections 3.4(d), 4.1
and 4.2 hereof shall not be satisfied or waived, subject, however, to the
provisions of Section 8.2. The date on which the Closing occurs in accordance
with the preceding sentence is referred to in this Agreement as the "Closing
Date".
ARTICLE 2
Representations and Warranties
2.1 General Statement. The parties make the representations and warranties
to each other which are set forth in this Article 2. All such representations
and warranties shall survive the Closing (and none shall merge into any
instrument of conveyance). The representations and warranties of the
Stockholders made in a particular paragraph of Section 2.3 are made subject to
the exceptions noted in the portion of the schedule
13
referred to in such paragraph delivered by the Stockholders' Committee to
Purchaser concurrently herewith and identified by the parties as the "Disclosure
Schedule". Information provided in one Schedule of the Disclosure Schedule shall
suffice, without repetition or cross-reference, as a disclosure of such
information in any other relevant Schedule of the Disclosure Schedule, if the
disclosure in respect of such one Schedule is sufficient on its face without
further inquiry reasonably to inform Purchaser of the information required to be
disclosed in respect of such other relevant Schedule in order to avoid a breach
of the representation or warranty corresponding thereto. Notwithstanding the
foregoing, the Stockholders shall use their best efforts to identify or
cross-reference in the Disclosure Schedule all applicable representations and
warranties to which a particular disclosure relates.
2.2 Representations and Warranties of Purchaser. Purchaser represents and
warrants to the Stockholders as follows:
(a) Purchaser is a corporation duly organized, existing and in good
standing, under the laws of its state of incorporation.
(b) Purchaser has full corporate power and authority to enter into
and perform this Agreement. This Agreement constitutes a valid and legally
binding obligation of Purchaser, enforceable against Purchaser in
accordance with its terms (except to the extent that enforcement may be
affected by laws relating to bankruptcy, reorganization, insolvency and
creditors' rights and by the availability of injunctive relief, specific
performance and other equitable remedies).
(c) Except for filings under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended ("HSR Act"), no consent,
authorization, order or approval of, or filing or registration with, any
governmental authority is required for or in connection with the
consummation by Purchaser of the transaction contemplated hereby.
14
(d) Neither the execution and delivery of this Agreement by
Purchaser, nor the consummation by Purchaser of the transaction
contemplated hereby, will conflict with or result in a breach of any of
the terms, conditions or provisions of its Certificate of Incorporation or
by-laws, or of any statute or administrative regulation, or of any order,
writ, injunction, judgment or decree of any court or governmental
authority or of any arbitration award.
(e) Other than Purchaser's $550,000,000 Credit Agreement dated
January 22, 1996 with NationsBank, National Association (South) and other
lenders party thereto, Purchaser is not a party to any unexpired,
undischarged or unsatisfied written or oral contract, agreement,
indenture, mortgage, debenture, note or other instrument under the terms
of which performance by Purchaser according to the terms of this Agreement
will be a default or an event of acceleration, or grounds for termination,
or whereby timely performance by Purchaser according to the terms of this
Agreement may be prohibited, prevented or delayed.
(f) Except for Kohlberg Kravis Xxxxxxx & Co., L.P. or its Affiliates
(as herein defined), neither Purchaser nor any of its Affiliates has dealt
with any person or entity who is entitled to a broker's commission,
finder's fee, investment banker's fee or similar payment for arranging the
transaction contemplated hereby or introducing the parties to each other.
As used herein, an "Affiliate" is any person or entity which controls
Purchaser or any member of the AIMCOR Group, which Purchaser or a member
of the AIMCOR Group controls, or which is under common control with
Purchaser or a member of the AIMCOR Group, but the term "Affiliate" does
not include the members of the AIMCOR Group themselves. For purposes of
the preceding sentence, the term "control" means the power, direct or
indirect, to direct or cause the direction of the management and policies
of a person or entity through voting securities, contract or otherwise. In
the case of the AIMCOR Group, the term Affiliate shall include Xxxxxxxxx
and Xxxxxxxx.
(g) In connection with the consummation of the transaction
contemplated hereby and the incurrence of any indebtedness therewith,
Purchaser does not intend that the AIMCOR Group would incur, and does not
believe that the AIMCOR Group will incur, debts that would be beyond the
AIMCOR Group's ability to pay as such debts mature.
(h) Purchaser is an "accredited investor" within the meaning of Rule
501(a) of Regulation D under the Securities Act of 1933, as amended (the
"Securities Act") and is acquiring the Purchased Shares for its own
account for investment and with no present intention of distributing or
15
reselling such shares or any part thereof in any transaction which would
constitute a "distribution" within the meaning of the Securities Act.
Purchaser understands that the Purchased Shares have not been registered
under the Securities Act or any state securities laws and are being
transferred to Purchaser, in part, in reliance on the foregoing
representation.
(i) Attached as Exhibit E hereof is a true and complete copy of the
letter addressed to Purchaser, dated August 11, 1997, issued by
NationsBank National Association (South) in connection with the financing
of the transactions contemplated by this Agreement (the "Commitment
Letter").
2.3 Joint and Several Representations and Warranties of the Stockholders.
The Stockholders jointly and severally represent and warrant to Purchaser that,
except as set forth in the Disclosure Schedule:
CORPORATE
(a) Each of the AIMCOR Entities is a corporation duly existing and
in good standing under the laws of its jurisdiction of incorporation.
(b) Each of the AIMCOR Entities has qualified as a foreign
corporation, and is in good standing, under the laws of all jurisdictions
where the nature of its business or the nature or location of its assets
requires such qualification, except in such jurisdictions where the
failure to so qualify would not, individually or in the aggregate, have a
Material Adverse Effect (as herein defined). For the purposes of this
Agreement, "Material Adverse Effect" means a material adverse effect on
the business, assets, results of operations or financial condition of the
AIMCOR Group, taken as a whole.
(c) Each of the AIMCOR Entities has all necessary corporate power
and authority to carry on its respective business as such business is now
being conducted.
(d) Except for filings under the HSR Act, no consent, authorization,
order or approval of, or filing or registration with, any U.S. or foreign
court, administrative agency or governmental authority is required for or
in connection with the consummation by the Stockholders, Germany LP and
Luxembourg LP of the transaction contemplated hereby and the continuation
of the business of the AIMCOR Group thereafter.
16
(e) Neither the execution and delivery of this Agreement by the
Stockholders, Germany LP and Luxembourg LP, nor the consummation by the
Stockholders, Germany LP and Luxembourg LP of the transactions
contemplated hereby, will conflict with or result in a breach of any of
the terms, conditions or provisions of the Certificate of Incorporation or
by-laws (or similar organizational documents) of any of the AIMCOR
Entities, or of any statute or administrative regulation, or of any order,
writ, injunction, judgment or decree of any U.S. or foreign court,
administrative agency or governmental authority or of any arbitration
award to which any member of the AIMCOR Group is a party or by which any
member of the AIMCOR Group is bound.
(f) True and complete copies of the Certificate of Incorporation and
all amendments thereto, the by-laws as amended and currently in force,
similar organizational documents (in the case of AIMCOR Germany and AIMCOR
Luxembourg), all stock records, and corporate minute books and records, of
the AIMCOR Entities, have been furnished for inspection by Purchaser.
(g) Neither AIMCOR Germany nor AIMCOR Luxembourg has any
subsidiaries. Schedule 2.3(g) of the Disclosure Schedule contains a
complete list of the direct and indirect subsidiaries of AIMCOR, including
Enterprises(collectively, the "Subsidiaries"). For the purposes of the
preceding sentence, a Subsidiary shall be an entity a majority of whose
voting securities are owned, directly or indirectly, by AIMCOR. Other than
the Subsidiaries, no member of the AIMCOR Group owns, whether beneficially
or of record, any equity interest in any other person. Each of the
Subsidiaries is duly organized, existing and in good standing under the
laws of its jurisdiction of incorporation or organization (as the case may
be), has full power to carry on its business as it is now conducted, and
is qualified as a foreign corporation or other foreign entity in all
jurisdictions where the nature of its respective businesses or the nature
and location of its respective assets requires such qualification, except
in such jurisdictions where the failure to so qualify would not,
individually or in the aggregate, have a Material Adverse Effect.
(h) The authorized capital of:
(i) AIMCOR consists of 11,000 shares of voting common stock,
$.01 par value, of which 9,325.8 shares are issued and outstanding
and 1,089,000 shares of non-voting common stock, $.01 par value, of
which 923,254.2 shares are issued and outstanding. There are no
shares of capital stock of AIMCOR of any other class authorized,
issued or outstanding. All of the issued
17
and outstanding shares of stock of AIMCOR have been validly issued,
are fully paid and nonassessable, and are owned beneficially and of
record by the Stockholders. There are no outstanding subscriptions,
options, warrants, rights (including preemptive rights), calls,
convertible securities or agreements or commitments of any character
relating to the issued or unissued capital stock or other securities
of AIMCOR obligating AIMCOR to issue or sell any securities of any
kind;
(ii) Enterprises consists of 1,000,000 shares of Class A
common stock, $.01 par value, of which 461,202.3809 shares are
issued and outstanding, and 1,000,000 shares of Class B common
stock, $.01 par value, of which 461,202.3809 shares are issued and
outstanding. There are no shares of capital stock of Enterprises of
any other class authorized, issued or outstanding. All of the issued
and outstanding shares of stock of Enterprises have been validly
issued, are fully paid and nonassessable, and are owned beneficially
and of record by AIMCOR and the Stockholders. AIMCOR owns
367,944.3809 shares of Class A common stock, and 367,944.3809 shares
of Class B common stock, of Enterprises, free and clear of all
claims, equities, security interests, liens, proxies, restrictions
on transfer, voting trusts and voting agreements. There are no
outstanding subscriptions, options, warrants, rights (including
preemptive rights), calls, convertible securities or agreements or
commitments of any character relating to the issued or unissued
capital stock or other securities of Enterprises obligating
Enterprises to issue or sell any securities of any kind;
(iii) AIMCOR Germany consists of a single class of
participation interests, all of which are issued and outstanding.
There are no participation interests of AIMCOR Germany of any other
class authorized, issued or outstanding. All of the issued and
outstanding participation interests of AIMCOR Germany have been
validly issued, are fully paid and nonassessable. Germany LP is the
beneficial and of record owner of 98.8468% of the participation
interests of AIMCOR Germany, free and clear of all claims, equities,
security interests, liens, proxies, restrictions on transfer, voting
trusts and voting agreements. CPG Mannheim Inc. (a Delaware
corporation wholly owned by Xxxxxxxxx) and WCK Mannheim Inc. (a
Delaware corporation wholly owned by Xxxxxxxx) are the beneficial
and of record owners of a combined total of 1.1532% of the
participation interests of AIMCOR
18
Germany, free and clear of all claims, equities, security interests,
liens, proxies, restrictions on transfer, voting trusts and voting
agreements. There are no outstanding subscriptions, options,
warrants, rights (including preemptive rights), calls, convertible
securities or agreements or commitments of any character relating to
the issued or unissued securities of AIMCOR Germany obligating
AIMCOR Germany to issue or sell any securities of any kind;
(iv) AIMCOR Luxembourg consists of a class of ordinary stock,
without par value, of which 24,420 shares are issued and
outstanding, and a class of preferred stock, without par value, of
which 91,023 shares are issued and outstanding. There are no shares
of capital stock of AIMCOR Luxembourg of any other class authorized,
issued or outstanding. All of the issued and outstanding shares of
stock of AIMCOR Luxembourg have been validly issued, are fully paid
and nonassessable, and are owned beneficially and of record by
Luxembourg LP, free and clear of all claims, equities, security
interests, liens, proxies, restrictions on transfer, voting trusts
and voting agreements. There are no outstanding subscriptions,
options, warrants, rights (including preemptive rights), calls,
convertible securities or agreements or commitments of any character
relating to the issued or unissued capital stock or other securities
of AIMCOR Luxembourg obligating AIMCOR Luxembourg to issue or sell
any securities of any kind.
(v) Other than borrowings under the instruments set forth on
Schedule 2.3(h)(v) of the Disclosure Schedule, no member of the
AIMCOR Group has any outstanding indebtedness for borrowed money.
The loans and other extensions of credit under the instruments set
forth on Schedule 2.3(h)(v) of the Disclosure Schedule are each
prepayable in full in accordance with their respective terms.
FINANCIAL
(i) Copies of (a) the consolidated balance sheet, statement of
earnings, statement of shareholders' equity, statement of cash flows and
notes to financial statements (together with any supplementary information
thereto) of AIMCOR and the Subsidiaries, (b) the balance sheet, income
statement and notes to financial statements of AIMCOR Germany, and (c) the
balance sheet, statement of profit and loss, statement of cash flows and
notes to the annual accounts (together with any supplementary information
thereto)of AIMCOR Luxembourg, each as of and for the fiscal years ended
19
September 30, 1996 and September 30, 1995 and each as audited by the
Accountants, are contained in Schedule 2.3(i) of the Disclosure Schedule.
The financial statements described in the preceding sentence are referred
to herein as the "Financial Statements". Copies of the respective
unaudited balance sheets and statements of income of AIMCOR and the
Subsidiaries (on a consolidated basis), AIMCOR Germany and AIMCOR
Luxembourg, each as of and for the nine month periods ended June 30, 1997
and June 30, 1996, are also contained in Schedule 2.3(i) of the Disclosure
Schedule. The financial statements described in the preceding sentence are
referred to herein as the "Interim Financial Statements". The Financial
Statements and the Interim Financial Statements present fairly, in all
material respects, the respective financial position of AIMCOR (on a
consolidated basis), AIMCOR Luxembourg and AIMCOR Germany as of the dates
thereof and the results of operations and (in the case of the Financial
Statements) cash flows of AIMCOR (on a consolidated basis), AIMCOR
Luxembourg and AIMCOR Germany for the periods covered by said statements,
in conformity with U.S. GAAP, consistently applied, except (w) as
disclosed therein, (x) in the case of the Interim Financial Statements,
for normal year-end adjustments, and (y) in the case of the Interim
Financial Statements, for the omission of footnote disclosures required by
U.S. GAAP. Schedule 2.3(i) of the Disclosure Schedule also contains pro
forma versions of the Financial Statements and the Interim Financial
Statements, which present fairly, in all material respects, the combined
financial condition of the AIMCOR Group as of the dates and for the
periods then ended, subject to the adjustments described in such pro forma
statements (including, without limitation, elimination from the Financial
Statements and the Interim Financial Statements the Excluded Assets and
the effects of the disposition of the Excluded Assets on the financial
position, results of operations and cash flows of AIMCOR for the periods
covered by the Financial Statements and the Interim Financial Statements).
As of September 30, 1996, there was no liability or obligation of any kind
required to be disclosed under U.S. GAAP, whether accrued, absolute, fixed
or contingent, of any member of the AIMCOR Group that is not disclosed,
reflected or reserved against in the Financial Statements as of that date.
No member of the AIMCOR Group has any obligation to make any "earn out" or
similar payments.
(j) The members of the AIMCOR Group (including TAC) have good title
to their respective assets (including, without limitation, the
Intellectual Property (as herein defined)), free and clear of any liens,
claims, encumbrances and security interests, except for the following: (i)
statutory liens for Taxes (as defined herein) not yet due, (ii) statutory
liens of landlords, carriers, warehousemen, mechanics and materialmen
incurred in the ordinary course of business for sums not yet
20
due; (iii) liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, performance and return of money bonds and similar
obligations; and (iv) minor irregularities of title, none of which
individually or in the aggregate materially detract from the value or use
of the assets of the AIMCOR Group. The foregoing representation and
warranty shall not apply to the Real Estate (as defined herein), which is
dealt with exclusively in paragraph (u), or the Leased Premises (as
defined herein), which is dealt with exclusively in paragraph (v).
(k)
(i) As used in this Agreement, the following terms shall have
the following meanings:
(A) the term "Taxes" means all federal, state,
provincial, local, foreign and other income, sales, use, ad
valorem, value added, transfer or other taxes, fees,
assessments or charges of any kind, together with any interest
and any penalties, with respect thereto, and the term "Tax"
means any one of the foregoing Taxes;
(B) the term "Tax Return" means any return, declaration,
report, claim for refund or information return or statement
relating to Taxes, including any schedule or attachment
thereto and including any amendment thereof; and
(C) the term "Code" means the Internal Revenue Code of
1986, as amended.
(ii) All Tax Returns required to be filed by or with respect
to each member of the AIMCOR Group have been timely filed, except
where the failure to so file such Tax Returns would not,
individually or in the aggregate, have a Material Adverse Effect,
and all such Tax Returns are complete and correct in all material
respects. Each member of the AIMCOR Group has timely paid all Taxes
that are due, or that have been asserted in writing by any taxing
authority to be due, from or with respect to it for the periods
ending prior to the date hereof (including Taxes attributable to the
period ending on the Closing Date).
(iii) There are no outstanding agreements, waivers or
arrangements extending the statutory period of limitation applicable
to any claim for, or the period
21
for the collection or assessment of, Taxes due from or with respect
to any member of the AIMCOR Group for any taxable period, and no
power of attorney granted by or with respect to any member of the
AIMCOR Group relating to Taxes is currently in force.
(iv) No audit or other proceeding by any governmental entity
has formally commenced and no written notification, and, to the
Stockholders' knowledge, no oral notification has been given to any
member of the AIMCOR Group that such an audit or other proceeding is
pending or threatened with respect to any Taxes due from or with
respect to any member of the AIMCOR Group or any Tax Return filed by
or with respect to any member of the AIMCOR Group. No assessment of
Tax has been proposed in writing to any member of the AIMCOR Group
against any member of the AIMCOR Group or any of its assets or
properties.
(v) As of the Closing Date, no member of the AIMCOR Group
shall be a party to, be bound by or have any obligation under, any
Tax sharing agreement, indemnification arrangement, or similar
contract or arrangement. During the ten year period ending on the
date hereof, none of members of the AIMCOR Group (A) has been a
member of an affiliated group filing a consolidated federal income
tax return (other than Enterprises and its Subsidiaries), or (B) has
any liability for the Taxes of any person under Treas. Reg. ss.
1.1502-6 (or any similar provision of state, local or foreign law),
or as a transferee or successor, by contract, or otherwise.
(vi) There is no contract or agreement, plan or arrangement by
any member of the AIMCOR Group covering any person that,
individually or collectively, would give rise to the payment of any
amount that would not be deductible by any such member of the AIMCOR
Group by reason of section 280G of the Code. No member of the AIMCOR
Group has filed a consent under section 341(f) of the Code.
(vii) Each member of the AIMCOR Group has duly and timely
withheld from employee salaries, wages and other compensation and
paid over to the appropriate taxing authorities all amounts required
to be so withheld and paid over for all periods under all applicable
laws and regulations.
(viii) Each member of the AIMCOR Group has collected
substantially all sales and use Taxes required to be collected, and
have remitted, or will
22
remit on a timely basis, such amounts to the appropriate
governmental authorities, or has been furnished properly completed
exemption certificates. Each member of the AIMCOR Group (A) has in
its possession all records and supporting documents required by all
applicable sales and use Tax statutes and regulations regarding the
collection and payment of all sales and use Taxes required to be
collected and paid over and regarding all exempt transactions for
all periods open under the applicable statute of limitations as of
the Closing Date, and (B) has maintained all such records and
supporting documents, in all material respects in the manner
required by all applicable sales and use Tax statutes and
regulations.
(ix) No member of the AIMCOR Group has, for less than fair
market value, acquired property from, disposed of property to,
performed services for, or otherwise transacted business with, any
person with whom it does not deal at arm's length; provided,
however, that this subparagraph (ix) shall not apply to any of the
transactions described in subparagraphs (a)-(l) of Section
3.2(d)(v);
(x) At all times since July 1, 1989, AIMCOR has been both a
validly electing S corporation within the meaning of Code xx.xx.
1361 and 1362 and a validly electing S corporation within the
meaning of the applicable state law statutes in the states listed on
Schedule 2.3(k)(x) of the Disclosure Schedule.
(xi) Except as set forth on Schedule 2.3(k)(xi) of the
Disclosure Schedule, no member of the AIMCOR Group will be liable
for any Tax under Code ss. 1374 in connection with the deemed sale
of AIMCOR's assets (including the assets of any qualified subchapter
S subsidiary) caused by any election under Code ss. 338(h)(10) (and
any corresponding election under state, local and foreign law) with
respect to the purchase and sale of AIMCOR's stock hereunder (the
"Section 338(h)(10) Election"). Except as set forth on Schedule
2.3(k)(xi) of the Disclosure Schedule, neither AIMCOR nor any
qualified subchapter S subsidiary of AIMCOR has, in the past 10
years, (A) acquired assets from another corporation in a transaction
in which AIMCOR's Tax basis for the acquired assets was determined,
in whole or in part, by reference to the Tax basis of the acquired
assets (or any other property) in the hands of the transferor, or
(B) acquired the stock of any corporation which became a qualified
subchapter S subsidiary.
23
CONDUCT OF BUSINESS
(l) Since June 30, 1997 (September 30, 1996 in the case of
subparagraph (iv)), no member of the AIMCOR Group has:
(i) sold, leased, mortgaged, pledged, encumbered or
transferred or otherwise disposed of any assets or properties which
would be material to the AIMCOR Group, taken as a whole, except for
sales of its inventory and transfers of cash in payment of trade
payables and cash dividends to the Stockholders, all in the usual
and ordinary course of business, and except as permitted by this
Agreement;
(ii) suffered any loss, or any interruption in use, of any
assets or property (whether or not covered by insurance), which
would be material to the AIMCOR Group, taken as a whole, on account
of fire, flood, riot, strike or other hazard or Act of God;
(iii) suffered any change to its business, either individually
or together with other changes to its business, which would have a
Material Adverse Effect;
(iv) incurred any liabilities or obligations (whether
absolute, accrued, contingent or otherwise) material to the AIMCOR
Group, taken as a whole (collectively, "Liabilities"), except (i)
Liabilities incurred in the ordinary course of business and (ii)
Liabilities incurred in connection with or as a result of this
Agreement and the transaction contemplated hereby;
(v) waived any right which would be material to the AIMCOR
Group, taken as a whole, other than in the ordinary course of
business;
(vi) without limitation by the enumeration of any of the
foregoing, entered into any material transaction other than in the
usual and ordinary course of business, except as permitted by this
Agreement (the foregoing representation and warranty shall not be
deemed to be breached by virtue of the entry by the Stockholders,
Germany LP and Luxembourg LP into this Agreement or their
consummation of the transaction contemplated hereby); or
(vii) taken any action which, if it had been taken after the
date hereof, would have required the consent of Purchaser under
Section 3.2(d) hereof.
24
CONTRACTS
(m) Schedule 2.3(m) of the Disclosure Schedule contains a
description of the following undischarged written contracts, agreements,
leases and other instruments to which any member of the AIMCOR Group is a
party:
(i) agreements for the employment for any period of time
whatsoever, or in regard to the employment, or restricting the
employment, of any employee of any member of the AIMCOR Group;
(ii) consulting agreements;
(iii) collective bargaining agreements;
(iv) contracts or arrangements providing for bonuses, options,
deferred compensation or stock appreciation rights;
(v) leases or subleases, either as lessee or sublessee, lessor
or sublessor, of personal property, where the lease or sublease
provides for an annual rent in excess of $50,000 and has an
unexpired term as of the Closing Date in excess of one (1) year, and
leases or subleases of personal property where the lease or sublease
provides for an annual rent in excess of $100,000 and has an
unexpired term as of the Closing Date of less than one year;
(vi) agreements restricting in any manner the right of any
member of the AIMCOR Group to compete with any other person or
entity, restricting the right of any member of the AIMCOR Group to
sell to or purchase from any other person or entity, or restricting
the right of any other party to compete with any member of the
AIMCOR Group or the ability of such person or entity to employ any
of the employees of any member of the AIMCOR Group;
(vii) agreements between any member of the AIMCOR Group and
any of their respective Affiliates with respect to the purchase of
goods or the performance of services (other than employment-related
agreements in the ordinary course of business);
(viii) agreements of agency, representation, distri bution, or
franchise which cannot be canceled by the member of the AIMCOR Group
which is a party thereto without payment or penalty upon notice of
sixty (60) days or less;
25
(ix) service agreements affecting any of the assets of any
member of the AIMCOR Group where the annual service charge is in
excess of $50,000 or has an unexpired term as of the Closing Date in
excess of one (1) year;
(x) guaranties, performance, bid or completion bonds, and
surety or indemnification agreements;
(xi) loan agreements, promissory notes, indentures, bonds,
security agreements or other instruments involving the borrowing of
money in an amount in excess of $50,000;
(xii) agreements, commitments or understandings to make any
gifts or sponsor any events;
(xiii) all agreements or arrangements between any member of
the AIMCOR Group, on the one hand, and any Stockholder, Germany LP
or Luxembourg LP or any of their respective Affiliates (other than
any member of the AIMCOR Group) on the other hand (such agreements
and arrangements are hereinafter referred to as "Affiliate
Transactions"); and
(xiv) any other agreements which provide for the receipt or
expenditure of more than $50,000, except agreements for the purchase
or sale of goods or rendering of services in the ordinary course of
business.
All agreements, leases, subleases and other instruments referred to in
this subsection 2.3(m) are binding upon the AIMCOR Group and, to the
Stockholders' knowledge, the other parties thereto. No default by any
member of the AIMCOR Group has occurred thereunder and, to the
Stockholders' knowledge, no default by the other contracting parties has
occurred thereunder, which default would, individually or in the
aggregate, have a Material Adverse Effect.
(n) Neither any member of the AIMCOR Group nor any of the
Stockholders is a party to, or bound by, any unexpired, undischarged or
unsatisfied written contract, agreement, indenture, mortgage, debenture,
note or other instrument under the terms of which performance by the
Stockholders, Germany LP and Luxembourg LP according to the terms of this
Agreement (i) will be a default (or an event which with notice or lapse of
time or both could become a default) or an event of acceleration, or
result in the loss of a material benefit under, or grounds for
termination, except such defaults, accelerations, losses or terminations
which would not individually or in the aggregate, have a Material Adverse
26
Effect, or (ii) would be prohibited, prevented or delayed. Other than the
Material Consents (as herein defined), the execution, delivery and
performance by the Stockholders, Germany LP and Luxembourg LP of this
Agreement and the consummation by the Stockholders, Germany LP and
Luxembourg LP of the transactions contemplated hereby will not require any
consent, approval or authorization of, or notice to, any third party,
except such consents, approvals, authorizations, and notices the failure
of which to obtain or make would not, individually or in the aggregate,
have a Material Adverse Effect.
(o) The AIMCOR Group possesses all licenses, permits, registrations
and government approvals (the "Permits") (other than Environmental Permits
(as defined herein), which are exclusively provided for in Section 2.3(t))
which are required in order for them to conduct their respective
businesses as presently conducted, except where the failure to possess
such Permits would not, individually or in the aggregate, have a Material
Adverse Effect.
EMPLOYEES
(p) With respect to the AIMCOR Group and its employees:
(i) AIMCOR maintains, administers, contributes to or has any
liability with respect to only those employee pension benefit plans
(as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), whether or not excluded
from coverage under specific Titles or Subtitles of ERISA) for the
benefit of employees of AIMCOR which are listed in Schedule
2.3(p)(i) of the Disclosure Schedule (the "Pension Plans");
(ii) AIMCOR maintains, administers, contributes to or has any
liability with respect to only those employee welfare benefit plans
(as defined in Section 3(1) of ERISA, whether or not excluded from
coverage under specific Titles or Subtitles of ERISA) for the
benefit of employees of AIMCOR which are listed in Schedule
2.3(p)(ii) of the Disclosure Schedule (the "Welfare Plans");
(iii) AIMCOR maintains, administers, contributes to or has any
liability with respect to only those stock purchase, stock option,
severance, employment, change-in-control, bonus, incentive and
deferred compensation plans, agreements, programs, or policies
(whether formal or informal, written or (to the Stockholders'
knowledge) oral, and whether or not subject to ERISA)
27
under which any employee or former employee of AIMCOR has any
present or future right to benefits or under which AIMCOR has any
present or future material liability, which are listed in Schedule
2.3(p)(iii) of the Disclosure Schedule. All such plans, agreements,
programs, policies and arrangements, together with the Pension Plans
and Welfare Plans, shall be collectively referred to as the "Company
Plans";
(iv) with respect to each Company Plan, AIMCOR has delivered
or made available to the Purchaser a current, accurate and complete
copy (or, to the extent no such copy exists, an accurate
description) thereof and, to the extent applicable, (a) any related
trust agreement, annuity contract or other funding instrument; (b)
the most recent determination letter; (c) any summary plan
description by AIMCOR to its employees concerning the extent of the
benefits provided under a Company Plan; and (d) for the three most
recent years (1) the Form 5500 and attached schedules; (2) audited
financial statements; (3) actuarial valuation reports; and (4)
attorney's responses to an auditor's request for information;
(v) all Company Plans and any related trust agreements or
annuity contracts (or any related trust instruments) comply in all
material respects with and are and have been operated in all
material respects in accordance with their terms and each applicable
provision of ERISA, the Code (including, without limitation, the
requirements of Code section 401(a) to the extent any Pension Plan
is intended to conform to that section) and other applicable laws,
rules and regulations (including, without limitation, state
insurance law), except where non-compliance with such terms and
laws, rules and regulations, would not, individually or in the
aggregate, have a Material Adverse Effect. AIMCOR has not received
any written notice, and none of the Stockholders has any knowledge,
of any violation of any of the foregoing by any Company Plan, which
violation has not heretofore been corrected. A favorable
determination as to the qualification under the Code of each of the
Pension Plans has been made by the Internal Revenue Service ("IRS");
(vi) there has been no "reportable event" (as defined in
Section 4043(c) of ERISA) for which the 30 day reporting requirement
is applicable and has not been waived with respect to any Company
Plan. Neither AIMCOR nor any affiliate of AIMCOR as determined under
Code Section 414(b), (c), (m) or (o) ("ERISA
28
Affiliate") has incurred or permitted to exist any "accumulated
funding deficiency" (as defined in Section 302 of ERISA) whether or
not waived by the IRS, involving any Pension Plan subject to section
412 of the Code or Part 3 of Title I(B) of ERISA. No withdrawals
have occurred so as to cause any Pension Plan to become subject to
the provisions of Section 4063 of ERISA, nor has AIMCOR or any ERISA
Affiliate ceased making contributions to any employee benefit plan
subject to Section 4064(a) of ERISA to which either AIMCOR or any
ERISA Affiliate made contributions during the six (6) years prior to
the date hereof;
(vii) with respect to each Company Plan, no actions, suits or
claims (other than routine claims for benefits in the ordinary
course) are pending or, to the Stockholders' knowledge, threatened.
To the Stockholders' knowledge, no event has occurred and no
condition exists that would be reasonably expected to subject AIMCOR
or its Subsidiaries, either directly or through their ERISA
Affiliates, to any Tax, fine, lien, penalty or other liability
imposed by ERISA, the Code or other applicable laws, rules and
regulations, whether by indemnity or otherwise, which Tax, fine,
lien, penalty or liability would have a material adverse effect on
any of the Company Plans. Neither AIMCOR nor, to the Stockholders'
knowledge, any other party has engaged in a prohibited transaction
(as defined in Section 406 of ERISA and Section 4975 of the Code)
which would subject AIMCOR or the Purchaser to any Taxes, penalties
or other liabilities under ERISA or the Code with respect to any of
the Company Plans, which Taxes, penalties or liabilities would have
a material adverse effect on any of the Company Plans;
(viii) neither AIMCOR nor any ERISA Affiliate has incurred any
liability to the Pension Benefit Guaranty Corporation ("PBGC") as a
result of the voluntary or involuntary termination of any Pension
Plan subject to Title IV of ERISA; there is currently no active
filing by AIMCOR or any ERISA Affiliate with the PBGC (and no
proceeding has been commenced by the PBGC) to terminate any Pension
Plan subject to Title IV of ERISA maintained or funded, in whole or
in part, by AIMCOR or any ERISA Affiliate. None of the Company Plans
is a multiemployer plan as defined in Section 3(37) of ERISA.
Neither AIMCOR nor any ERISA affiliate sponsors, maintains,
contributes to or has any liability with respect to a multiemployer
plan;
29
(ix) with respect to any plan maintained outside the United
States for the purpose of providing or otherwise making available
retirement or other benefits to employees of the members of the
AIMCOR Group other than AIMCOR (collectively, "Non-U.S. Plans"),
each Non-U.S. Plan is in compliance in all material respects with
its terms and the provisions of all material laws applicable to each
such Non-U.S. Plan, except where noncompliance with such terms or
laws would not have a Material Adverse Effect. All required employer
contributions under any such plans have been made and the applicable
pension funds have been funded in accordance with the terms of the
plan and in compliance with all laws applicable thereto except where
noncompliance with such laws would not have a Material Adverse
Effect;
(x) there are no strikes, work stoppages or disputes pending,
or, to the Stockholders' knowledge, threatened between any member of
the AIMCOR Group and any current or former employees, and there is
no request for union representation or organizational effort by any
labor union or other collective bargaining unit pending, or, to the
Stockholders' knowledge, threatened against the business of any
member of the AIMCOR Group;
(xi) there are no pending, or, to the Stockholders' knowledge,
threatened unfair labor practice charges or employee grievance
charges with respect to the business of any member of the AIMCOR
Group;
(xii) the Disclosure Schedule contains a list of all employees
of the members of the AIMCOR Group as of July 1, 1997, whose annual
salaries exceed $50,000 and said list correctly reflects their
employer, base salaries, dates of employment and positions;
(xiii) with the exception of the agreements referred to in
Section 3.2(e), no Company Plan exists that could result in the
payment to any present or former employee of the AIMCOR Group or its
Subsidiaries of any money or other property or accelerate or provide
any other rights or benefits to any present or former employee of
the AIMCOR Group or its Subsidiaries as a result of the transaction
contemplated by this Agreement, whether or not such payment would
constitute a parachute payment as defined in Section 280G of the
Code, or whether or not some other further event or condition is
required for payment or entitlement on or after the transaction.
30
LITIGATION AND CLAIMS
(q) There is no litigation or proceeding, in law or in equity, and
there are no proceedings or governmental investigations before any
commission or other administrative authority, pending or, to the
Stockholders' knowledge, threatened against any member of the AIMCOR
Group, or any of their respective officers, directors or Affiliates, with
respect to or affecting the operations, assets, business, products, sales
practices or financial condition of any member of the AIMCOR Group, which
has a reasonable probability of being decided adversely to the applicable
member of the AIMCOR Group and which, if decided adversely to such member,
would have a Material Adverse Effect, or prohibit, present or delay the
consummation of the transaction contemplated hereby. No present or former
director, officer, employee or agent of the members of the AIMCOR Group is
a defendant in any litigation commenced by stockholders of any member of
the AIMCOR Group with respect to the performance of his or her duties as a
director, officer, employee or agent of a member of the AIMCOR Group under
any federal or state law (including litigation under federal and state
securities laws). With the exception of the provisions of AIMCOR's
Certificate of Incorporation, here exist no indemnification agreements
with any of the present or former directors, officers, employees or agents
of any member of the AIMCOR Group.
(r) No member of the AIMCOR Group is a party to, or bound by, any
decree, order or arbitration award (or agreement entered into in any
administrative, judicial or arbitration proceeding with any governmental
authority) with respect to or affecting the properties, assets, personnel
or business activities of any member of the AIMCOR Group, the enforcement
of which or compliance with which would have a Material Adverse Effect.
(s) Except for laws, rules and regulations relating to the
environment (which are exclusively provided for in Section 2.3(t) hereof)
each member of the AIMCOR Group is in compliance with all decrees, orders
or arbitration awards or laws, statutes, or regulations of or agreements
with, or any Permits from, any federal, foreign, state, provincial or
local governmental authority to which the property, assets, personnel or
business activities of the AIMCOR Group are subject, including, without
limitation, federal, foreign, state, provincial or local laws, statutes
and regulations relating to equal employment opportunities, fair
employment practices, occupational health and safety, wages and hours, and
discrimination, except such failures to be in compliance which would not,
individually or in the aggregate, have a Material Adverse Effect.
31
ENVIRONMENTAL MATTERS
(t) Each member of the AIMCOR Group is, and has been, in compliance
with all Environmental Laws (as herein defined), except where the failure
to be in compliance would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect, and, to the
Stockholders' knowledge, there is no condition that would reasonably be
expected to prevent or materially interfere with such compliance. The
AIMCOR Group possesses all Environmental Permits which are required for
the operation of their respective businesses, where the failure to possess
such Environmental Permits would reasonably be expected to result in a
Material Adverse Effect, and is in compliance with the provisions of all
such Environmental Permits, except where the failure to so comply would
not reasonably be expected to result in a Material Adverse Effect. No
modification, revocation, reissuance, alteration, transfer or amendment of
any material Environmental Permit, or any review by, or approval of, any
third party of any material Environmental Permit is required in connection
with the execution or delivery of this Agreement or the consummation of
the transactions contemplated hereby or the continuation of the business
of the AIMCOR Group. All material Environmental Permits possessed by the
AIMCOR Group are listed in Schedule 2.3(t) of the Disclosure Schedule.
Except as would not reasonably be expected to result in a Material Adverse
Effect, none of the AIMCOR Group has received any Environmental Action (as
herein defined) which has not been fully remediated and none of the
Stockholders is aware of any threatened Environmental Action. None of the
AIMCOR Group has entered into, has agreed to, or is subject to any
judgment, decree, order or other similar requirement of any governmental
authority under any Environmental Laws. Except as would not reasonably be
expected to result in a Material Adverse Effect, Hazardous Materials (as
herein defined) have not been generated, transported, treated, stored,
disposed of, released or threatened to be released at, on, from or under
any of the properties or facilities currently or formerly owned, leased or
otherwise used by any of the AIMCOR Group, in violation of, or in a manner
or to a location that could give rise to liability to any of the AIMCOR
Group under, any Environmental Laws. Except as would not reasonably be
expected to result in a Material Adverse Effect, none of the AIMCOR Group
has contractually assumed any liabilities or obligations under any
Environmental Laws. For the purposes of this Agreement:
(i) "Environmental Laws" means all applicable federal,
foreign, state, provincial and local statutes, regulations,
ordinances, rules, regulations and policies having the force of law,
and all court orders and decrees and arbitration awards, which
pertain to environmental or
32
safety matters or radiation or contamination of any type
whatsoever and are in effect as of the date hereof;
(ii) "Environmental Permits" means licenses, permits,
registrations, governmental approvals, agreements and consents which
are required under or are issued pursuant to Environmental Laws;
(iii) "Environmental Action" means any written notice, claim,
demand, action, suit, complaint, proceeding or other communication
by any person alleging liability or potential liability (including
without limitation liability or potential liability for
investigatory costs, cleanup costs, governmental response costs,
natural resource damages, property damage, personal injury, fines or
penalties) arising out of, relating to, based on or resulting from
(w) the presence, discharge, emission, release or threatened release
of any Hazardous Materials at any location, (x) circumstances
forming the basis of any violation or alleged violation of any
Environmental Laws or Environmental Permits, or (y) otherwise
relating to obligations or liabilities under any Environmental Laws;
and
(iv) "Hazardous Materials" means all hazardous, dangerous or
toxic substances, wastes, materials or chemicals, petroleum
(including crude oil or any fraction thereof) and petroleum
products, asbestos and asbestos-containing materials, pollutants,
contaminants and all other materials or substances regulated
pursuant to any Environmental Laws or that could reasonably be
expected to result in liability under any Environmental Laws.
REAL ESTATE AND LEASED PREMISES
(u) All real property owned by any member of the AIMCOR Group is
identified in Section 2.3(u) of the Disclosure Schedule, which shall for
the purposes of this Agreement include TAC's Bridgeport, Alabama facility
(together with all buildings, structures and other improvements located
thereon, the "Real Estate"). The member of the AIMCOR Group identified in
Section 2.3(u) of the Disclosure Schedule as owning particular parcels of
Real Estate holds good and marketable fee simple title to such Real
Estate, subject only to real estate taxes not delinquent and easements,
covenants, conditions and restrictions which do not materially and
adversely affect the marketability of title or the uses to which the Real
Estate is put. The Real Estate is not subject to any leases or tenancies.
(v) All real estate leased or subleased by, or subject to any other
occupancy agreement in favor of, any member of
33
the AIMCOR Group is identified in the Disclosure Schedule (together with
all buildings, structures and other improvements located thereon, the
"Leased Premises"). The Leased Premises are leased to the member of the
AIMCOR Group identified in the Disclosure Schedule as leasing parcels of
the Leased Premises pursuant to written leases, true and complete copies
of which have been made available to Purchaser and such party has good
title to the leasehold estate to such Leased Premises. Each lease and
sublease which permits any member of the AIMCOR Group to occupy a Leased
Premises is in full force and effect and constitutes a legal, valid and
binding obligation of, and is legally enforceable against, the member of
the AIMCOR Group which is the lessee and, to the Stockholders' knowledge,
the lessors thereof, and grants the leasehold interest it purports to
grant free and clear of all covenants, conditions, restrictions,
easements, mortgages, liens, security interests, encumbrances, rights of
way and other similar restrictions created by or imposed upon any member
of the AIMCOR Group, or, to the Stockholders' knowledge, any other party.
Neither the member of the AIMCOR Group which is the lessee of particular
Leased Premises is in default under any agreement relating to such Leased
Premises nor, to the Stockholders' knowledge, is any other party thereto
in default thereunder, which default would have a Material Adverse Effect.
(w) To the Stockholders' knowledge, there are no violations of any
restriction, condition or agreement contained in any instrument of record
against the Real Estate or the Leased Premises. To the Stockholders'
knowledge, all buildings, structures and other improvements included
within the Real Estate and the Leased Premises, including but not limited
to the roofs and structural elements thereof, are in good working order in
all material respects and free of material structural defects. None of the
AIMCOR Group nor the Stockholders has received notice or otherwise has
knowledge of any pending, threatened or contemplated condemnation
proceeding affecting the Real Estate or the Leased Premises or any part
thereof or of any sale or other disposition of any Real Estate or Leased
Premises or any part thereof in lieu of condemnation.
INTELLECTUAL PROPERTY
(x) All material U.S. or foreign intellectual property of the AIMCOR
Group, including, without limitation, each material (i) trademark, service
xxxx, slogan, trade name, trade dress and the like (collectively, and
together with the associated goodwill of each, "Trademarks"), including
information regarding each registration and pending application to
register any such Trademarks; (ii) common law Trademark; (iii) patent
application; (iv) registration of and
34
application to register any copyright; and (v) license of rights in
Trademarks, patents, copyrights, unpatented formulations, and know-how,
whether to or by any member of the AIMCOR Group, is listed in the
Disclosure Schedule. The scheduled rights, together with all other
intellectual property of the AIMCOR Group, including trade secrets,
technology, inventions and know-how, are referred to herein collectively
as the "Intellectual Property."
(y) The members of the AIMCOR Group own or have the right to use all
material Intellectual Property necessary for the AIMCOR Group to conduct
its business as it is currently being conducted and consistent with past
practice. Such Intellectual Property is valid, unexpired and has not been
abandoned. The members of the AIMCOR Group have taken reasonable steps to
protect, maintain and safeguard their Intellectual Property, including any
material Intellectual Property for which improper or unauthorized
disclosure would impair its value or validity, and have caused their
employees and third parties who are reasonably likely to have access
thereto to execute agreements in connection with the foregoing.
(z) The Stockholders have no knowledge: (i) that any other firm,
corporation, association or person claims the right to use in connection
with similar or closely related goods and in the same geographic area, any
xxxx which is identical or confusingly similar to any of the Trademarks;
(ii) of any claim that any third party (other than a licensor of
Intellectual Property to a member of the AIMCOR Group) asserts ownership
rights in any of the Intellectual Property; (iii) of any claim that the
use by any member of the AIMCOR Group of any Intellectual Property
infringes any right of any third party; and (iv) that any third party is
infringing any of the rights of any member of the AIMCOR Group in any of
the Intellectual Property.
GENERAL
(aa) With the exception of Xxxxxxx, Xxxxx & Co., neither the
Stockholders, nor any of their Affiliates, nor any member of the AIMCOR
Group, have dealt with any person, firm or corporation who is entitled to
a broker's commission, finder's fee, investment banker's fee or similar
payment for arranging the transaction contemplated hereby or introducing
the parties to each other.
(bb) Schedule 2.3(bb) of the Disclosure Schedule lists all insurance
policies of the members of the AIMCOR Group covering the assets, products,
employees and current and historical operations of the AIMCOR Group as of
the date hereof. All such policies are in full force and effect, all
35
premiums due thereon have been paid by the AIMCOR Group and the members of
the AIMCOR Group have complied in all material respects with the
provisions of such policies and have not received any notice from any of
its insurance brokers or carriers that such broker or carrier will not be
willing or able to renew their existing coverage.
(cc) The assets of the AIMCOR Group comprise all of the assets
necessary to conduct the businesses of the AIMCOR Group in the same manner
as such businesses were being conducted on September 30, 1996; provided,
however, that no representation or warranty is made with respect to
corporate services rendered to the AIMCOR Group from AIMCOR's Denver,
Colorado headquarters.
2.4 Individual Representations and Warranties of the Stockholders. Each of
the Stockholders, individually, and each of Germany LP and Luxembourg LP,
individually, represents and warrants to Purchaser as follows:
(a) Such Stockholder, Germany LP or Luxembourg LP (as the case may
be) has full power and authority to execute and perform this Agreement.
This Agreement constitutes a valid and legally binding of such
Stockholder, Germany LP or Luxembourg LP, enforceable against such
Stockholder, Germany LP or Luxembourg LP (as the case may be) in
accordance with its terms (except to the extent that enforcement may be
affected by laws relating to bankruptcy, reorganization, insolvency and
creditors' rights and by the availability of injunctive relief, specific
performance and other equitable remedies).
(b) If such Stockholder, Germany LP or Luxembourg LP (as the case
may be) is a limited partnership, trust or entity (a "Stockholder
Entity"), such Stockholder Entity is duly organized, existing and in good
standing under the laws of its jurisdiction of formation. The execution
and delivery of this Agreement by it and the performance by it of all of
its obligations under this Agreement have been duly approved prior to the
date of this Agreement by all requisite action of its general partners,
trustees or the like, as the case may be. No other approval is required
for it to execute this Agreement or consummate the transaction
contemplated hereby. This Agreement has been duly executed and delivered
by it. Neither the execution and delivery of this Agreement by such
Stockholder Entity, nor the consummation by it of the transaction
contemplated hereby will conflict with or constitute a breach of any of
the terms, conditions or provisions of its Agreement of Limited
Partnership, trust
36
agreement or declaration of trust, or other organizational
documents, as the case may be.
(c) Such Stockholder owns the numbers of Purchased Shares listed
opposite such Stockholder's name on Exhibit A, free and clear of all
claims, equities, security interests, liens, proxies, restrictions on
transfer, voting trusts and voting agreements, other than agreements
between AIMCOR and/or Enterprises and such Stockholder which will be
terminated as of the Closing.
2.5 Limitation on Warranties. Except as expressly set forth in Sections
2.3 and 2.4, the Stockholders, Germany LP and Luxembourg LP make no express or
implied warranty of any kind whatsoever, including, without limitation, any
representation as to physical condition or value of any of the assets of the
AIMCOR Group or the future profitability or future earnings performance of the
AIMCOR Group. ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE ARE EXPRESSLY EXCLUDED.
2.6 Definition of Knowledge. For the purposes of this Agreement, the
knowledge of the Stockholders shall be deemed to be limited to the actual
knowledge as of the Closing Date of Gallagher, Kocourek, Xxxxxxx Xxxxx
("Xxxxx"), Xxx Xxxxx ("Xxxxx"), Xxxxx Xxxxx-Xxxxxx, Xxxxxxx Xxxxx, Xxxxx Xxxxxx
and Xxxx Xxxxxx, without giving effect to imputed knowledge.
37
ARTICLE 3
Conduct Prior to the Closing
3.1 General. The Stockholders, Germany LP, Luxembourg LP and Purchaser
shall have the rights and obligations with respect to the period between the
date hereof and the Closing Date which are set forth in the remainder of this
Article 3.
3.2 Obligations of the Stockholders, Germany LP and Luxembourg LP. The
following are the obligations of the Stockholders, Germany LP and Luxembourg LP:
(a) the Stockholders, Germany LP and Luxembourg LP shall and shall
use their best efforts to cause the AIMCOR Group to give to Purchaser's
officers, employees, agents, attorneys, consultants, accountants and
lenders reasonable access during normal business hours to all of the
properties, books, contracts, documents, insurance policies, records,
attorneys, consultants, accountants, advisors and personnel of or with
respect to the AIMCOR Group and shall furnish to Purchaser and such
persons as Purchaser shall designate to the Stockholders' Committee such
information as Purchaser or such persons may at any time and from time to
time reasonably request (including without limitation, all work papers and
supporting information of the Accountants). The right of inspection
granted to Purchaser under this Section 3.2(a) includes the right to make
reasonable extracts or copies. No investigation pursuant to this Section
3.2(a) shall affect any representations or warranties of the parties
herein or the conditions to the obligations of the parties hereto.
(b) The Stockholders, Germany LP and Luxembourg LP shall (and
Purchaser shall cooperate with the Stockholders, Germany LP and Luxembourg
LP to) cause the members of AIMCOR Group to use their reasonable best
efforts to obtain the consents to the consummation of the transaction
contemplated hereby under or with respect to, each contract, lease,
agreement, Permit, Environmental Permit, and other instrument, which is
enumerated in Exhibit F attached hereto (the "Material Consents") and, in
addition to the Material Consents, any consents with respect to any other
Environmental Permit for which a consent with regard to the consummation
of the transaction contemplated hereby would be required under
Environmental Laws.
38
(c) The Stockholders, Germany LP and Luxembourg LP shall each use
its best efforts to (i) maintain the present business organization of the
AIMCOR Group, (ii) purchase and sell inventory, pay payables and other
accrued liabilities and collect receivables in the usual and ordinary
course of business, consistent with past practices and otherwise operate
the AIMCOR Group in the ordinary and regular course of business consistent
with past practice; (iii) maintain the AIMCOR Group's books and records in
accordance with past practices; (iv) keep available the services of the
AIMCOR Group's officers and employees (other than Xxxxxxxxx, Xxxxxxxx and
employees of Consumer Products (as herein defined) and employees located
at its Denver, Colorado headquarters); (v) comply in all material respects
with all applicable laws, including, without limitation, applicable
Environmental Laws; and (vi) maintain reasonably satisfactory
relationships with licensors, suppliers, employees, creditors,
distributors, customers and others transacting business with the Company,
except as permitted by this Agreement.
(d) Without the prior written consent of Purchaser, and without
limiting the generality of any other provision of this Agreement, the
Stockholders, Germany LP and Luxembourg LP shall use their best efforts to
cause the members of the AIMCOR Group not to:
(i) amend their respective certificates or articles of
incorporation or by-laws, partnership agreements, or other
organizational documents;
(ii) make any change in the authorized capital stock of any
member of the AIMCOR Group, or issue or sell any shares of stock of
any class of stock of any member of the AIMCOR Group, or issue,
grant or become a party to any subscriptions, warrants, rights,
options, calls, convertible securities or agreements or commitments
of any character relating to the issued or unissued capital stock of
the members of the AIMCOR Group, or to other equity securities or
interest of any member of the AIMCOR Group, or grant any stock
appreciation, phantom stock or similar rights;
(iii) (x) increase the compensation or fringe benefits of any
present or former director, officer or employee of the AIMCOR Group
or its Subsidiaries (except for increases in salary or wages in the
ordinary course of business consistent with past practice), (y)
grant any severance or termination pay to any present or former
director, officer or employee of the AIMCOR Group or its
Subsidiaries or (z) establish, adopt, enter into, amend or terminate
any Company Plan or any plan, agreement, program, policy, trust,
fund or other arrangement that
39
would be a Company Plan if it were in existence as of the date of
this Agreement; provided, however, that in connection with the
formation and sale of Consumer Products, AIMCOR may cause Company
Plans applicable only to Consumer Products to be established,
provided that no cost to the AIMCOR Group (other than Consumer
Products) results therefrom;
(iv) incur or commit to incur any investment or capital
expenditures not set forth in Schedule 3.2(d)(iv) of the Disclosure
Schedule in excess of $100,000 in the aggregate;
(v) subject any of the assets of the AIMCOR Group to any lien,
mortgage, security interest or encumbrance or otherwise permit or
allow the members of the AIMCOR Group to sell, transfer or otherwise
dispose of any asset or property (including sales, leases or
transfers to Affiliates), except for sales of inventory and for
transfers of cash in payment of the trade payables of the members of
the AIMCOR Group all in the usual and ordinary course of business in
accordance with past practices and payment of cash dividends to the
Stockholders to the extent permitted in Section 3.2(d)(ix), and
except for the following transactions with all or certain
Stockholders or their designees which are out of the ordinary course
of business:
a. the sale of AIMCOR Consumer Products LLC ("Consumer
Products");
b. the sale of the outstanding shares of Panoramica,
Inc. which are owned by AIMCOR;
c. the sale of the outstanding shares of Servicios
AIMCOR, A.C. which are owned by AIMCOR Inversiones S.A. de
C.V., a subsidiary of Enterprises;
d. the sale of one general aviation aircraft known as a
Westwind 1124, Serial Number 310, F.A.A. Registration Number
N78GJ, together with hangar deposits, prepaid insurance and
spare parts relating to such aircraft, and the assumption by
the purchaser of AIMCOR's obligations under that certain
Aircraft Administrative Agreement dated June 12, 1997 between
AIMCOR and Pal-Waukee Aviation, Inc.;
e. the novation of that certain lease, dated July 16,
1996 between AIMCOR and The CIT Group, Inc., relating to one
Falcon 900B aircraft, and the
40
concurrent (i) sale to the person to whom such lease is
novated of all spare parts for such aircraft, all hangar
deposits, and all prepaid insurance relating thereto and (ii)
assumption by such person of all obligations of AIMCOR under
that certain Hangar Occupancy Agreement dated August 26, 1996
by and between Anschutz Corporation and AIMCOR;
f. the assignments to Gallagher, Kocourek, Xxxxx and
Xxxxx of the leases of automobiles leased by AIMCOR for their
respective benefit and the assumption by Gallagher, Kocourek,
Xxxxx and Xxxxx, respectively, of AIMCOR's obligations under
such leases;
g. the assignment of AIMCOR's rights as lessee under
that certain lease, dated March 3, 0000, xxxxxxx Xxxxxxxxxx
Xxxxxxxx, Inc. as lessor, and AIMCOR, as lessee, relating to
premises commonly known as Suite 5600, 000 Xxxxxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxx, and the assumption by the assignee of all
obligations of AIMCOR thereunder;
h. the sale to Xxxxxxxxx and Xxxxxxxx, respectively, or
their respective designees, of AIMCOR's rights in split dollar
insurance policies owned by AIMCOR on their respective lives;
i. the sale to Xxxxxxxxx of all tangible personal
property located at Suite 5600, 000 Xxxxxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxx;
j. the sale to Xxxxxxxx of all office furniture located
in the office which he occupies at 000 Xxxx Xxxx Xxxx, Xxxxxxx
Xxxxx, Xxxxxxxx;
k. the sale to Xxxxxxxx of all rights of AIMCOR in
sporting event tickets at the United Center; and
l. the sale to Xxxxxxxxx of all rights of AIMCOR in
sporting event tickets at Mile High Stadium, XxXxxxxxx Arena,
the Pepsi Center, the FlatIrons Club at the University of
Colorado and Coors Field.
The assets to be sold pursuant to this subparagraph (v) are referred
to herein as the "Excluded Assets". The purchase prices of the
Excluded Assets shall be represented by promissory notes of said
Stockholders or their designees, which notes shall be payable on
demand
41
and bear interest, due upon demand, at the rate of 6% per annum and,
shall be included among the Stockholder Notes and Loans;
(vi) prepay any of its material obligations other than in the
ordinary course of business consistent with past practice (except
that AIMCOR may make contributions to the Pension Plans in advance
of their due dates, to the extent such contributions are reflected
on the 1997 Financial Statements and AIMCOR may repay any amounts
owed by it to any member of the AIMCOR Group and the members of the
AIMCOR Group may repay any amounts owed to them by AIMCOR);
(vii) borrow any money or incur, whether directly or by way of
guarantee or similar arrangement, any obligation for borrowed money,
other than borrowings under lines of credit described in Section
2.3(m)(xi) of the Disclosure Schedule in the ordinary course of
business and consistent with past practice;
(viii) except as permitted pursuant to subparagraph (d)(v),
directly or indirectly cause to be purchased, redeemed or otherwise
acquired or disposed of any equity securities of or interest in any
member of the AIMCOR Group;
(ix) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock or property, with respect to
any capital stock of any of the members of the AIMCOR Group (except
that cash dividends (i) may be declared and paid on or prior to
September 30, 1997 and (ii) with a payment date after September 30,
1997 and prior to the Closing Date may be declared and paid prior to
the Closing Date in order to pay Tax liabilities (other than Tax
liabilities resulting from the transactions contemplated by this
Agreement) of the Stockholders relating to AIMCOR which arose after
September 15, 1997 and are required to be paid prior to the Closing
Date), or make any other payment to any Stockholder, Germany LP or
Luxembourg LP or any of their Affiliates (in their capacities as
stockholders, directors, employees or otherwise) other than (i)
salaries and bonuses paid prior to the Closing Date in the ordinary
course of business and consistent with past practice, (ii) incentive
bonuses (including bonuses to Xxxxxxxxx and Xxxxxxxx in the
estimated amount of $2,200,000) payable under the Company Plans with
respect to the 1997 fiscal year of the AIMCOR Group, and (iii)
payments required to be made prior to the Closing pursuant to the
terms of any Affiliate Transaction with such person;
42
(x) assume, guarantee, or otherwise become responsible for the
obligations of, or make any loans or advances to, any other
individual, firm or corporation (other than the endorsement of
checks in the ordinary course of business);
(xi) waive or release any rights of material value, or cancel,
compromise, release or assign any material indebtedness owed to it
or any material claims held by it;
(xii) cancel or terminate any insurance policy naming it as a
beneficiary or a loss payable payee;
(xiii) enter into or amend any collective bargaining
agreements;
(xiv) except as may be required as a result of a change in law
or in U.S. GAAP, change any of the accounting practices or
principles used by any member of the AIMCOR Group;
(xv) make any material Tax election or settle or compromise
any material federal, state, local or foreign Tax liability;
(xvi) except as permitted by subparagraph (ix) or Section
3.2(d)(v), enter into any Affiliate Transactions or alter or amend
the terms of any Affiliate Transaction in existence on the date
hereof;
(xvii) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization
or other reorganization of any member of the AIMCOR Group;
(xviii) purchase the assets (other than purchases of inventory
in the ordinary course of business) or equity securities of any
entity, or merge or consolidate with any entity;
(xix) agree to take, in writing or otherwise, any of the
actions described in Sections 3.2(d)(i) through 3.2(d)(xviii) (other
than those permitted pursuant to Section 3.2(d)(v) or (ix)); or
(xx) cause or permit AIMCOR to revoke AIMCOR's election to be
taxed as an S corporation within the meaning of Code ss.ss.1361 and
1362, or take or allow to be taken any action that would result in
the termination of AIMCOR's status as a validly electing S
corporation within the meaning of Code ss.ss.1361 and 1362.
43
(e) On or prior to the Closing Date, the Stockholders shall cause
AIMCOR to make payments to Xxxxxx De Demo and Xxxxxx Xxxxxx in
consideration of the termination of phantom stock agreements between
AIMCOR, on the one hand, and those individuals, on the other hand. If such
payments are made after September 30, 1997, the effects thereof shall be
reflected on the Closing Balance Sheet;
(f) On or before the Closing Date, each Stockholder shall furnish
Purchaser with a certification of non-foreign status that satisfies the
requirements of Code ss. 1445(b) (2) and Treas. Reg. ss. 1.1445-2.
(g) Prior to the earlier of the termination of this Agreement or the
Closing, each of the Stockholders, Germany LP and Luxembourg LP will not,
and will cause the members of the AIMCOR Group and their respective
officers, directors, employees and agents not to, initiate, solicit or
encourage, directly or indirectly, any inquiries or the making of any
proposal with respect to, or engage in any negotiations concerning,
provide any confidential information or data to, have any discussions with
or enter into any agreements with, any person relating to any acquisition,
business combination, reorganization or purchase of all or any portion of
the capital stock or assets of the AIMCOR Group other than in the ordinary
course of business and in compliance with the other provisions of this
Agreement. Each of the Stockholders, Germany LP and Luxembourg LP will,
and will cause the members of the AIMCOR Group to, immediately cease and
cause to be terminated any existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any
such potential transactions involving the AIMCOR Group. Each of the
Stockholders, Germany LP and Luxembourg LP will, and will cause the
members of the AIMCOR Group to, immediately notify the Purchaser if any
inquiries are received in respect of any member of the AIMCOR Group, and
shall provide details with respect thereto. Each of the Stockholders,
Germany LP and Luxembourg LP will not pledge, encumber or dispose of the
Purchased Shares or any other securities of any member of the AIMCOR Group
beneficially owned by them prior to the Closing.
(h) Each of the Stockholders, Germany LP and Luxembourg LP agrees
that, at the request of the Purchaser, it will, and will cause the AIMCOR
Group to, call for prepayment or redemption, or to prepay, redeem and/or
renegotiate, as the case may be, any then existing indebtedness for
borrowed money of the AIMCOR Group (other than the industrial revenue
bonds and pollution control bonds owed by TAC), conditional upon the
occurrence of the Closing; provided that no such prepayment or
44
redemption shall actually be made until contemporaneously with or after
the Closing Date.
(i) Each of the Stockholders, Germany LP and Luxembourg LP agrees
that it will, and will cause the AIMCOR Group to, promptly (but in no
event later than 5 business days) notify Purchaser in the event that they
or any member of the AIMCOR Group receive any written or oral
communication from the PBGC in respect of any Pension Plan subject to
Title IV of ERISA concerning the funded status of any such plan or any
transfer of assets and liabilities from any such plan in connection with
the transactions contemplated herein.
(j) The Stockholders shall cause Aimcor Formed Products Limited
Partnership, a Delaware limited partnership, to be liquidated and
dissolved or, in the alternative, for AIMCOR's interest therein to be
distributed to the Stockholders.
(k) As promptly as practicable and in any event no later than twenty
days after the end of each fiscal month ending after the date hereof and
before the Closing Date, the Stockholders will deliver to Purchaser true
and complete copies of the unaudited consolidated balance sheets and
statements of income of AIMCOR as of and for each such fiscal month and
the portion of the fiscal year then ended, together with the notes, if
any, relating thereto, which financial statements shall be prepared on a
basis consistent with the Interim Financial Statements.
(l) Notwithstanding anything to the contrary contained in this
Section 3.2, the written consent of Purchaser shall not be required in the
event any action otherwise prohibited by this Section 3.2 is taken by any
of the members of the AIMCOR Group if such action has no adverse effect on
the AIMCOR Group or Purchaser and does not result in a liability not
reflected on the Closing Balance Sheet and if such actions, taken as a
whole, involve assets the fair market value of which in the aggregate does
not exceed $100,000.00. Such assets may consist of such things as cash,
U.S. Treasury securities, equity securities, foreign currencies and
limited partnership interests, but shall not include real estate, tangible
personal property or general partnership interests.
3.3 Purchaser's Obligations. The following are Purchaser's obligations:
(a) Purchaser shall comply with its obligations under that certain
letter agreement, between AIMCOR and Kohlberg Kravis Xxxxxxx & Co., L.P.,
dated April 4, 1997 and that letter from Purchaser to AIMCOR, dated July
10, 1997 (collectively, the "Confidentiality Letter"); and
45
(b) Purchaser shall use its all commercially reasonable efforts to
obtain financing for the transaction contemplated hereby in accordance
with the Commitment Letter (it being understood that (x) Purchaser shall
not consent to the lender's syndicating the loans contemplated thereby if
it would result in a delay in the Closing, and (y) Purchaser shall not be
required to agree to any loan documentation which is commercially
unreasonable in the context of loan transactions of the type and size
contemplated by the Commitment Letter). If Purchaser is unable to obtain
the financing contemplated by the Commitment Letter, Purchaser shall use
commercially reasonable efforts to obtain replacement financing, on terms
substantially similar to those contained in the Commitment Letter.
3.4 Joint Obligations. The following shall apply with equal force to the
Stockholders, Germany LP and Luxembourg LP, on the one hand, and Purchaser, on
the other hand:
(a) Each of the parties hereto shall use all reasonable best efforts
to take, or cause to be taken, all actions and to do, or cause to be done,
all things necessary, proper or advisable to consummate the transaction
contemplated hereby as soon as practicable.
(b) Each party shall promptly give the other party written notice of
the existence or occurrence of any condition which would make any
representation or warranty herein contained of either party untrue or
which might reasonably be expected to prevent the consummation of the
transaction contemplated hereby.
(c) Except as permitted by Sections 3.2(d)(v), 3.2(d)(ix) and
3.2(e), no party shall perform any act which, if performed, or
intentionally omit to perform any act which, if omitted to be performed,
would prevent or excuse the performance of this Agreement by any party
hereto or which would result in any representation or warranty herein
contained of said party being untrue.
(d) The parties shall forthwith make all filings and perform all
acts required by them respectively under the HSR Act; and, in addition to
the conditions set forth in Article 4, the obligations of each of the
parties to this Agreement shall each be conditional upon the expiration or
early termination of the waiting period set forth in the HSR Act and the
rules promulgated thereunder.
46
ARTICLE 4
Conditions to Closing
4.1 Conditions to Obligations of the Stockholders, Germany LP and
Luxembourg LP. In addition to the condition set forth in Section 3.4(d), the
obligation of the Stockholders, Germany LP and Luxembourg LP to close the
transaction contemplated hereby is subject to the fulfillment of all of the
following conditions on or prior to the Closing Date, upon the non-fulfillment
of any of which this Agreement may, at the Stockholders' Committee's option, be
terminated pursuant to and with the effect set forth in Article 8:
(a) Each representation and warranty of Purchaser which is expressly
qualified by any materiality qualification shall be true and correct,
subject to such materiality qualification, and each of the remaining
representations and warranties of Purchaser shall be true and correct in
all material respects, in each case, on and as of the Closing Date as
though such representations and warranties were made on such date, except
that any representations and warranties that are made as of a specified
date shall be true as of such date; provided, however, that a breach of
any of the foregoing representations and warranties shall not constitute
the non-fulfillment of the foregoing condition unless such breach,
individually or in the aggregate with all other breaches, is material to
the AIMCOR Group as a whole.
47
(b) All obligations of Purchaser to be performed hereunder through,
and including on, the Closing Date (including, without limitation, all
obligations which Purchaser would be required to perform at the Closing if
the transaction contemplated hereby was consummated) shall have been fully
performed in all material respects.
(c) On the Closing Date there shall be no suit, proceeding or
investigation pending by any governmental authority on any grounds to
restrain, enjoin or hinder the consummation of the transaction
contemplated hereby.
(d) Purchaser shall have made the deliveries to the Stockholders'
Committee specified in Sections 5.2(b) through 5.2(f).
(e) Purchaser shall have delivered to the Stockholders' Committee
the written opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for Purchaser,
dated as of the Closing Date, in substantially the form of Exhibit G
attached hereto.
4.2 Conditions to Purchaser's Obligations. In addition to the condition
set forth in Section 3.4(d), the obligation of Purchaser to close the
transaction contemplated hereby is subject to the fulfillment of all of the
following conditions on or prior to the Closing Date, upon the non-fulfillment
of any of which this
48
Agreement may, at Purchaser's option, be terminated pursuant to and with the
effect set forth in Article 8:
(a) Each representation and warranty of the Stockholders, Germany LP
and Luxembourg LP which is expressly qualified by any materiality
qualification shall be true and correct, subject to such materiality
qualification, and each of the remaining representations and warranties of
the Stockholders, Germany LP and Luxembourg LP shall be true and correct
in all material respects, in each case, on and as of the Closing Date as
though such representations and warranties were made on such date, except
that any representations and warranties that are made as of a specified
date shall be true as of such date; provided, however, that a breach of
any of the foregoing representations and warranties shall not constitute
the nonfulfillment of the foregoing condition unless such breach is
material to the AIMCOR Group as a whole.
(b) All obligations of the Stockholders, Germany LP and Luxembourg
LP to be performed hereunder through, and including on, the Closing Date
(including, without limitation, all obligations which the Stockholders,
Germany LP and Luxembourg LP would be required to perform at the Closing
if the transaction contemplated hereby was consummated) shall have been
fully performed in all material respects.
(c) All of the Material Consents shall have been obtained.
(d) On the Closing Date there shall be no suit, proceeding or
investigation pending by any governmental authority on any grounds to
restrain, enjoin or hinder the consummation of the transaction
contemplated hereby.
(e) The Stockholders, Germany LP and Luxembourg LP shall have
delivered to Purchaser the written opinion of Altheimer & Xxxx, counsel to
Stockholders, Germany LP and Luxembourg LP, dated as of the Closing Date,
in substantially the form of Exhibit H attached hereto.
(f) The Stockholders' Committee shall have made the deliveries to
the Purchaser specified in Sections 5.3(a) through 5.3(q).
(g) Since June 30, 1997, no event shall have occurred which,
individually or together with all other events, has had or is reasonably
likely to have a Material Adverse Effect.
(h) Purchaser shall have received the proceeds of the financing
contemplated by the Commitment Letter, or the
49
proceeds of substitute financing as contemplated by Section 3.3(b).
ARTICLE 5
Closing
5.1 Form of Documents. At the Closing, the parties shall deliver the
documents, and shall perform the acts, which are set forth in this Article 5.
All documents which the Stockholders' Committee shall deliver shall be in form
and substance reasonably satisfactory to Purchaser and Purchaser's counsel. All
documents which Purchaser shall deliver shall be in form and substance
reasonably satisfactory to the Stockholders' Committee and the Stockholders'
counsel.
5.2 Purchaser's Deliveries. Subject to the fulfillment or waiver of the
conditions set forth in Sections 3.4(d) and 4.2, Purchaser shall duly execute
and/or deliver to the Stockholders' Committee all of the following:
(a) the Estimated Cash Payment less the amounts, subject to the last
sentence of Section 1.4, to be deposited with the Escrow Agent to fund the
Escrows;
(b) a certified copy of Purchaser's Certificate of Incorporation and
by-laws;
(c) a certificate of good standing of Purchaser, issued not earlier
than twenty (20) days prior to the Closing Date by the Secretary of State
of Delaware;
(d) an incumbency and specimen signature certificate with respect to
the officers of Purchaser executing this Agreement, and any other document
delivered hereunder, on behalf of Purchaser;
(e) a certified copy of resolutions of Purchaser's board of
directors, authorizing the execution, delivery and
50
performance of this Agreement, and any other document delivered by
Purchaser hereunder;
(f) a closing certificate executed by the President of Purchaser (or
any other officer of Purchaser specifically authorized by Purchaser's
board of directors to do so), on behalf of Purchaser, pursuant to which
Purchaser represents and warrants to the Stockholders that Purchaser's
representations and warranties to the Stockholders (i) in the case of any
thereof that are expressly qualified by any materiality qualification, are
true and correct, subject to such materiality qualification, and (ii) in
the case of each other representation and warranty, such representation
and warranty is true and correct in all material respects, in each case on
and as of the Closing Date as though such representations and warranties
were made on such date, except that any representations and warranties
that are made as of a specified date shall be true as of such date (or, if
any such representation or warranty shall fail to satisfy such standard in
any respect, specifying the respect in which the standard is failed), that
all covenants required by the terms hereof to be performed by Purchaser on
or before the Closing Date, to the extent not waived by the Stockholders'
Committee in writing, have been so performed in all material respects (or,
if any such covenant has not been so performed, indicating that such
covenant has not been performed), and that all documents to be executed
and delivered by Purchaser at the Closing have been executed and delivered
by duly authorized officers of Purchaser; and
(g) without limitation by specific enumeration of the foregoing, all
other documents reasonably required from Purchaser to consummate the
transaction contemplated hereby.
5.3 Stockholders', Germany LP's and Luxembourg LP's Deliveries. Subject to
the fulfillment or waiver of the conditions set forth in Sections 3.4(d) and
4.1, the Stockholders' Committee, Germany LP and Luxembourg LP shall duly
execute and/or deliver to Purchaser all of the following:
(a) certified copies of the Certificates of Incorporation and
by-laws of AIMCOR and Enterprises and certified copies of the limited
partnership agreements of Germany LP and Luxembourg LP;
(b) certificates of good standing of AIMCOR issued not earlier than
twenty (20) days prior to the Closing Date by the Secretaries of State of
Delaware, Illinois, Alabama,
51
California, Colorado, Connecticut, Indiana, Montana, Pennsylvania and
Texas;
(c) a certificate of good standing of Enterprises issued not earlier
than twenty (20) days prior to the Closing Date by the Secretary of State
of Nevada;
(d) a certificate of good standing of Germany LP and Luxembourg LP
issued not earlier than twenty (20) days prior to the Closing Date by the
Secretary of State of the State of Delaware;
(e) certificates representing:
(i) all outstanding shares of stock of AIMCOR;
(ii) all outstanding shares of stock of Enterprises not owned
by AIMCOR; and
(iii) all outstanding shares of stock of AIMCOR Luxembourg;
in each case duly endorsed in blank or with duly executed stock powers
attached with all necessary stock transfer stamps affixed;
(f) documents effecting the transfer of all the outstanding
participation interests in AIMCOR Germany, including, without limitation,
the participation interests held by CPG FRG Inc. and WCK FRG Inc.;
(g) instruments duly executed by AIMCOR and the Stockholders,
terminating all stockholder agreements between AIMCOR and any of the
Stockholders, effective as of the Closing;
(h) instruments duly executed by Enterprises and the Stockholders,
terminating all stockholder agreements between Enterprises and any of the
Stockholders, effective as of the Closing;
(i) a closing certificate duly executed by the Stockholders'
Committee, pursuant to which the Stockholders' Committee, on behalf of the
Stockholders, Germany LP and Luxembourg LP, represents and warrants to
Purchaser that: (i) the representations and warranties of the
Stockholders, Germany LP and Luxembourg LP to Purchaser (i) in the case of
any thereof that are expressly qualified by any materiality qualification,
are true and correct, subject to such materiality qualification, and (ii)
in the case of each other representation and warranty, each such
representation and
52
warranty is true and correct in all material respects, in each case on and
as of the Closing Date as though such representations and warranties were
made on such date, except that any representations and warranties that are
made as of a specified date shall be true as of such date (or if any such
representation or warranty fail to satisfy such standard in any respect,
specifying the respect in which the standard is failed) (it being
understood and agreed that with respect to the representations and
warranties of the individual Stockholders contained in Section 2.4, such
closing certificate shall be deemed to have been executed and delivered
separately by each individual Stockholder and to pertain only to the
representations and warranties in Section 2.4 made by such Stockholder);
(ii) all covenants required by the terms hereof to be performed by the
Stockholders, Germany LP or Luxembourg LP on or before the Closing Date,
to the extent not waived in writing by Purchaser, have been so performed
in all material respects (or if any such covenant has not been so
performed, indicating that such covenant has not been performed); and
(iii) all documents to be executed by the Stockholders, the Stockholders'
Committee, Germany LP, Luxembourg LP, Enterprises and AIMCOR and delivered
at the Closing have been executed and delivered by duly authorized
officers of AIMCOR;
(j) the written resignations, effective as of the Closing Date, of
Xxxxxxxxx and Xxxxxxxx as directors and officers of the members of the
AIMCOR Group and written resignations, effective as of the Closing Date,
of all other directors of AIMCOR, if any;
(k) physical possession of all books, records, tangible assets,
licenses, policies, contracts, plans, leases or other instruments owned by
or pertaining to the AIMCOR Group, which are in the possession of or under
the control of any Stockholder;
(l) copies of the Material Consents;
(m) the minute books and stock records of the members of the AIMCOR
Group;
(n) legally binding documentation evidencing the termination without
liability to the Purchaser or any member of the AIMCOR Group of all
Affiliate Transactions (other than agreements with respect to the
transactions contemplated by Section 3.2(d) (v));
(o) documentation evidencing that AIMCOR, effective as of the
Closing Date, has called for redemption all existing indebtedness for
borrowed money of the AIMCOR Group (other than industrial revenue bonds
and pollution control bonds owed
53
by TAC) and has terminated all other loan agreements to which any member
of the AIMCOR Group is a party;
(p) documentation evidencing that Germany LP and Luxembourg LP have
eliminated the use of the word "AIMCOR" as part of their company name;
(q) if the Stockholders' Committee shall have elected to deliver the
Letter of Credit, the Letter of Credit; and
(r) without limitation by specific enumeration of the foregoing, all
other documents reasonably required from the Stockholders, Germany LP and
Luxembourg LP to consummate the transaction contemplated hereby.
5.4 Other Transactions Occurring at the Closing. In addition to the
deliveries to be made at the Closing pursuant to Sections 5.2 and 5.3, on or
prior to the Closing Date;
(a) the Stockholders who are obligated under Stockholder Notes and
Loans shall pay, and the Stockholders whose designees are obligated under
Stockholder Loans and Notes shall cause such designees to pay, the entire
outstanding principal amount thereof and all accrued and unpaid interest
thereon in full;
(b) the Stockholders shall cause the principal and all accrued
interest under all loans made by AIMCOR to Germany LP and Luxembourg LP to
be paid in full;
(c) AIMCOR and Consumer Products shall enter into a Trademark
License Agreement in the form attached hereto as Exhibit J, pursuant to
which and subject to the terms thereof AIMCOR shall grant to Consumer
Products the perpetual, royalty-free license to use the AIMCOR(R) xxxx on
the terms and conditions set forth therein;
(d) AIMCOR, Consumer Products and the Stockholders Committee shall
enter into a Services Agreement in the form attached hereto as Exhibit K;
(e) the Stockholders, Germany LP and Luxembourg LP, Purchaser and
the Escrow Agent shall enter into the Escrow Agreement;
(f) Purchaser shall deposit with the Escrow Agent the monies
necessary to fund the Escrows; and
(g) the Stockholders' Committee shall cause the employment of all
employees located at AIMCOR's Denver,
54
Colorado corporate office to be transferred to one or more entities
controlled by Xxxxxxxxx and/or Xxxxxxxx and/or members of their respective
families, without cost to the AIMCOR Group.
ARTICLE 6
Post-Closing Agreements
6.1 Post-Closing Agreements. From and after the Closing, the parties shall
have the respective rights and obligations which are set forth in the remainder
of this Article 6.
6.2 Inspection of Records. The Stockholders, Germany LP and Luxembourg LP,
on the one hand, and Purchaser, on the other hand, shall each make their
respective books and records with respect to the AIMCOR Group (including, in the
case of Purchaser, the books and records of the members of the AIMCOR Group)
available for inspection by the other party, or by its duly accredited
representatives, for reasonable business purposes at all reasonable times during
normal business hours upon reasonable advance notice, for a five (5) year period
after the Closing Date, with respect to all transactions of the AIMCOR Group
occurring prior to and relating to the Closing, and the historical financial
condition, assets, liabilities, operations and cash flows of the AIMCOR Group.
As used in this Section 6.2, the right of inspection includes the right to make
reasonable extracts or copies, at the expense of the inspectors. The
representatives of a party inspecting the records of the other party shall be
reasonably satisfactory to the other party. During the period from the fifth
anniversary of the Closing Date to the seventh anniversary of the Closing Date,
Purchaser
55
agrees not to, and to cause the members of the AIMCOR Group not to, destroy at
any time any books or records which are subject to this Section 6.2 without
giving written notice to the Stockholders' Committee, and giving the
Stockholders' Committee 30 days following receipt of such notice to request in
writing that all or a portion of the records intended to be destroyed be
delivered to the Stockholders' Committee at the Stockholders' Committee's
expense. The Stockholders' Committee acknowledges that Purchaser shall not be
liable to the Stockholders' Committee in the event of any inadvertent
destruction of such books and records.
6.3 Confidentiality. Each of the Stockholders, Germany LP and Luxembourg
LP agrees that for a period of three years after the Closing Date, such
Stockholder, Germany LP or Luxembourg LP will not, without the prior written
consent of Purchaser, use, divulge, disclose or make accessible to any other
person, firm, partnership, corporation or other entity any Confidential
Information (as defined below) pertaining to the business of the AIMCOR Group,
except when required to do so by a court of competent jurisdiction, by any
governmental agency having supervisory authority over the business of the
members of the AIMCOR Group, or by any administrative body or legislative body
(including a committee thereof) with jurisdiction to order a Stockholder,
Germany LP or Luxembourg LP to divulge, disclose or make accessible such
information. For purposes of this Section 6.3, "Confidential Information" shall
mean non-public information concerning the financial data, strategic business
plans, product development (or
56
other proprietary product data), customer lists, marketing plans and other
non-public, proprietary and confidential information of the AIMCOR Group or
customers that, in any case, is not otherwise available to the public (other
than by a Stockholder's, Germany LP's, Luxembourg LP's or their respective
Affiliates' breach of the terms hereof).
6.4 Use of Trademarks. Except as provided in Section 5.4(b), the
Stockholders shall not use and shall not license or permit any third party to
use, any name, slogan, logo or trademark which is identical or confusingly
similar to any of the names, slogans, logos or trademarks used in connection
with the businesses of the AIMCOR Group.
6.5 Third Party Claims. The parties shall cooperate with each other with
respect to the defense of any Third Party Claims (as herein defined) subsequent
to the Closing Date which are not subject to the indemnification provisions
contained in Article 7, provided that the party requesting cooperation shall
reimburse the other party for the other party's reasonable out-of-pocket costs
and other expenses of furnishing such cooperation.
6.6 Further Assurances. The parties shall execute such further documents,
and perform such further acts, as may be necessary to transfer and convey the
Purchased Shares to Purchaser, on the terms herein contained, and to otherwise
comply with the terms of this Agreement and consummate the transaction
contemplated hereby. Without limiting the generality of the foregoing, (x) the
Stockholders' Committee shall cooperate with Purchaser in effecting
57
the transfer of any Environmental Permits the transfer of which is required by
virtue of the transaction contemplated hereby, and (y) the Stockholders'
Committee and Purchaser shall negotiate in good faith with respect to any
transition services which the AIMCOR Group may require from the former employees
of AIMCOR's Denver, Colorado headquarters or which the Stockholders' Committee
may require from AIMCOR.
6.7 Agreement to Defend and Indemnify. Purchaser shall cause AIMCOR to
indemnify and hold harmless each of the present and former directors, officers,
employees and agents of the members of the AIMCOR Group and each present and
former director, officer, employee, agent or trustee of any employee benefit
plan for employees of any member of the AIMCOR Group (individually, an
"Indemnified Employee", and collectively, the "Indemnified Employees") against
any losses, claims, damages, liabilities, costs, expenses (including, without
limitation, reasonable attorneys' fees), judgments, fines and amounts paid in
settlement in connection with any threatened, pending or completed claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative claim ("Indemnifiable Claim"), arising by reason
of the fact that the Indemnified Employee is or was a director, officer,
employee or agent of a member of the AIMCOR Group and arising out of or
pertaining to any action or omission occurring prior to the Closing Date
(including, without limitation, any which arise out of or relate to the
transaction contemplated by this Agreement), to the full extent permitted under
58
the Delaware General Corporation Law as in effect on the Closing Date (or as
such rights to indemnification may be expanded subsequent to the Closing Date
under said law). Purchaser acknowledges and accepts as contract rights (and
agrees to cause AIMCOR to honor in accordance with their terms) the provisions
of AIMCOR's Certificate of Incorporation and/or by-laws as in effect on the date
hereof with respect to indemnification of officers, directors, employees and
agents of AIMCOR (including provisions relating to contribution, advancement of
expenses and the like), and agrees that for a period of six years after the
Closing Date the Certificate of Incorporation and by-laws of AIMCOR shall not be
modified or amended in any manner that would adversely affect the rights
thereunder of individuals who on the Closing Date were the present or former
directors, officers, agents or employees of the AIMCOR Group, except as required
by law. Purchaser shall cause AIMCOR to advance reasonable expenses (including
reasonable attorneys' fees) to each such Indemnified Employee to the full extent
permitted by Delaware General Corporation Law. In the event of any Indemnifiable
Claim (whether asserted or commenced before or after the Closing Date), the
Indemnified Employees may retain counsel satisfactory to them and the Purchaser,
and Purchaser shall cause AIMCOR to pay all fees and reasonable expenses of such
counsel for the Indemnified Employees promptly as statements therefor are
received; provided that AIMCOR shall not be liable for any settlement effected
without its written consent, which consent, however, shall not unreasonably be
withheld. Any Indemnified
59
Employee wishing to claim indemnification under this Section 6.7, upon learning
of any Indemnifiable Claim, shall notify AIMCOR thereof; provided, however, that
the failure of an Indemnified Employee to give such notice shall only relieve
Purchaser and AIMCOR of their indemnification obligations to the extent of
actual prejudice resulting therefrom. The Indemnified Employees as a group may
retain only one law firm to represent them with respect to any such matter
unless there is, under applicable standards of professional conduct, a conflict
on any significant issue between the positions of any two or more Indemnified
Employees, in which case such Indemnified Employees may retain such number of
additional counsel as are necessary to eliminate all conflicts of the type
referred to above; provided that AIMCOR shall be responsible for the reasonable
expenses of only one additional counsel.
6.8 No Solicitation. Each Stockholder, Germany LP and Luxembourg LP agrees
that from the Closing Date until the third anniversary of the Closing (or, in
the case of each of Gallagher, Kocourek, Xxxxx and Xxxxx, the fifth anniversary
of the Closing Date), such Stockholder, Germany LP or Luxembourg LP (as the case
may be) shall not, and shall not permit any of their respective Affiliates to,
directly or indirectly, anywhere in the world, solicit to hire or hire any
employee of any member of the AIMCOR Group who is employed by any member of the
AIMCOR Group as of the Closing Date; provided, however, that Xxxxxxxxx and/or
Xxxxxxxx, or any of their respective Affiliates, may solicit to hire or hire any
60
employee of AIMCOR who is based in AIMCOR's corporate office in Denver, Colorado
or any employee who is related to Xxxxxxxxx, in each case without any cost or
expense (including, without limitation, severance costs) to Purchaser or the
AIMCOR Group, and Xxxxxxxxx and/or Xxxxxxxx, or any of their respective
Affiliates, may hire (but may not solicit to hire) any person (w) who is an
employee of the AIMCOR Group as of the Closing Date, (y) who is not a
Stockholder, and (z) whose employment is terminated after the Closing Date by a
member of the AIMCOR Group for reasons other than cause. The parties agree that
the remedy at law for any breach of any obligation under this Section 6.8 will
be inadequate and that in addition to any other rights and remedies to which
Purchaser may be entitled hereunder, at law or in equity, Purchaser shall be
entitled to injunctive relief and reimbursement from the Stockholder breaching
this Section 6.8 for all reasonable attorney's fees and other expenses incurred
in connection with the enforcement hereof, and each party further agrees to
waive any requirement for the securing or posting of any bond in connection with
such remedy. In the event this Section 6.8 is held to be in any respect an
unreasonable restriction upon the Stockholders, Germany LP or Luxembourg LP or
their respective Affiliates by any court having competent jurisdiction, the
court so holding may reduce the territory to which this Section 6.8 pertains
and/or the period of time for which it operates, or effect any other change to
the extent necessary to render this Section 6.8 enforceable by such court. As so
modified this Section 6.8 will continue in full force
61
and effect. Such decision by a court of competent jurisdiction shall not
invalidate this Agreement, but this Agreement shall be interpreted, construed
and enforced as not containing such invalidated provision.
6.9 Non-Competition. Each Stockholder, Germany LP and Luxembourg LP agrees
that:
(a) during the period ending five years from the Closing Date,
without the prior written consent of Purchaser, such Stockholder, Germany
LP or Luxembourg LP, as the case may be, will not, directly or indirectly,
either alone or in conjunction with any individual, partnership, firm,
association, syndicate, company or other entity, whether as principal,
manager, agent, consultant, officer, stockholder, partner, investor,
lender or employee or in any other capacity, carry on, be engaged in,
advise, invest, lend money to, guarantee the debts or obligations of, or
have any financial interest in, any business which is in competition with
the business of the AIMCOR Group (other than Consumer Products) anywhere
throughout the world;
(b) for the purposes of this Section 6.9, a business shall be deemed
to be in competition with the business of the AIMCOR Group if it is
involved in the purchase, sale, lease, management of or other dealing in
any property or the rendering of any service purchased, sold, leased,
managed, dealt in or rendered by Purchaser or the members of the AIMCOR
Group as a part of the business of the AIMCOR Group as conducted as of the
Closing Date (other than Consumer Products). Nothing in this Section 6.9
shall be construed so as to preclude a Stockholder, Germany LP or
Luxembourg LP from investing in any entity, provided such Stockholder's,
Germany LP's or Luxembourg LP's beneficial ownership of any class of such
entity's securities does not exceed 3% of the outstanding securities of
such class;
(c) this Section 6.9 is a reasonable covenant under the
circumstances, and if in the opinion of any court of competent
jurisdiction this Section 6.9 is not reasonable in any respect, such court
shall have the right, power and authority to modify such provision or
provisions of this covenant to the extent the court determines such
restraint is not reasonable and to enforce the covenant as so amended. Any
breach of this Section 6.9 would irreparably injure Purchaser and the
AIMCOR Group. Accordingly, Purchaser may, in addition to pursuing any
other remedies it may have in law or in equity, obtain an injunction
against such Stockholder, Germany LP or Luxembourg
62
LP from any court having jurisdiction over the matter restraining any
further violation of this Agreement by such person, without any
requirement for the securing or posting of any bond in connection with
such remedy.
6.10 Section 338(h) (10) Election; Tax Returns. The Stockholders and
Purchaser agree that:
(a) AIMCOR and each of the Stockholders will join with Purchaser in
making a Section 338(h) (10) Election with respect to the purchase and
sale of the Purchased Shares of AIMCOR. Purchaser shall prepare any and
all forms necessary to effectuate the Section 338(h) (10) Election
(including, without limitation, Internal Revenue Service Form 8023 and any
similar forms under applicable state and local income tax laws (the
"Section 338 Forms")) and, to the extent possible, the Stockholders and
the Purchaser shall execute as of the Closing Date, the Section 338 Forms.
In the event, however, any Section 338 Forms are not executed by the
Closing Date, the Stockholders and the Purchaser shall complete each such
Section 338 Form no later than 15 days prior to the date such Section 338
Form is required to be filed. Each of the Stockholders shall execute the
Section 338 Forms and the Purchaser shall cause the Section 338 Forms to
be duly executed by an authorized person for the Purchaser and shall duly
and timely file the Section 338 Forms in accordance with applicable Tax
laws and the terms of this Agreement. The Stockholders will include any
income, gain, loss, deduction or other Tax item resulting from the Section
338(h) (10) Election on their Tax returns to the extent permitted by
applicable law.
(b) Purchaser, AIMCOR and the Stockholders agree that the portion of
the Purchase Price attributable pursuant to Exhibit C to the shares of
stock of AIMCOR and the liabilities of AIMCOR and its qualified subchapter
S subsidiaries (plus other relevant items) will be allocated to the
classes of assets of AIMCOR and its qualified subchapter S subsidiaries,
as enumerated in section 1060 of the Code, for all Tax purposes as shown
on an Allocation Schedule to be prepared by the Stockholders' Committee as
soon as practicable after the Closing Date. The Stockholders' Committee
shall provide Purchaser with such Allocation Schedule and the
Stockholders' Committee shall make such revisions or changes to said
Schedule as shall be requested by Purchaser and approved by the
Stockholders' Committee, each acting in good faith. In the event the
Stockholders' Committee and Purchaser are unable to agree on the
allocation of said Purchase Price in such manner, such allocation shall be
determined by the Arbitrating Accountant, whose determination shall be
final and binding on the Stockholders, AIMCOR and Purchaser. The
Stockholders'
63
Committee and Purchaser shall each pay one-half of the fee charged by the
Arbitrating Accountant for determining such allocation (including any
appraisal fees). Purchaser, all members of the AIMCOR Group, and the
Stockholders will file all Tax Returns (including amended returns and
claims for refund) and information reports in a manner consistent with
such Allocation Schedule, as so revised.
(c) The Stockholders' Committee shall prepare or cause to be
prepared and signed (through a designee who shall be designated by AIMCOR
upon the recommendation of the Stockholders' Committee as an officer of
AIMCOR solely for the purpose of preparing, signing and filing income Tax
Returns for the AIMCOR Group for periods ending on or prior to the Closing
Date) all income Tax Returns for the AIMCOR Group for all periods ending
on or prior to the Closing Date (including such income Tax Returns which
amend previously filed income Tax Returns) (the "Pre-Closing Tax
Returns"). With respect to all Pre-Closing Tax Returns, Purchaser shall
have the right to review such Tax Returns and suggest changes thereto. In
the event the Stockholders' Committee and Purchaser are unable to agree as
to the necessity of any suggested changes to any Pre-Closing Tax Returns
which are Tax Returns for Enterprises, AIMCOR Germany, AIMCOR Luxembourg
and any state which does not recognize the S election of AIMCOR (the
"Specific Returns") to avoid an adverse effect on Purchaser or the AIMCOR
Group, such suggested changes shall be referred to the Arbitrating
Accountant, whose determination of the necessity of such changes shall be
final and binding. Upon the resolution of such suggested changes by the
Arbitrating Accountant, such Tax Returns shall be revised to reflect such
resolution. The Stockholders' Committee warrants that the filing of all
Pre-Closing Tax Returns will not have an adverse effect on Purchaser or
the AIMCOR Group; provided, however, that this paragraph (c) shall not
apply to the matters set forth in paragraph (b) hereof. To the extent
permitted by applicable law, the Stockholders shall include any income,
gain, loss, deduction or other tax items for such periods on their Tax
Returns in a manner consistent with the Schedule K-1s furnished by AIMCOR
to the Stockholders for such periods. Purchaser shall not amend or waive
the statute of limitations with respect to any such Pre-Closing Tax
Returns without the prior consent of the Stockholders' Committee. The
officer designee or other authorized representative designated by the
Stockholders' Committee shall be granted a general power of attorney to
deal with any taxing authority with respect to
64
Taxes reflected on the Pre-Closing Tax Returns other than Specific
Returns. The Stockholders' Committee shall not, and shall cause such
designee not to, seek indemnification from AIMCOR or Purchaser by reason
of the fact that such person is or was an officer of AIMCOR whether
arising by law, contract or otherwise.
(d) Purchaser shall and shall cause the AIMCOR Group to, and the
Stockholders shall, cooperate fully, as and to the extent reasonably
requested by the other party, in connection with the filing of Tax Returns
pursuant to this Section 6.10 and any audit, litigation or other
proceeding with respect to Taxes. Such cooperation shall include the
retention and (upon the other party's request) the provision of records
and information which are reasonably relevant to any such audit,
litigation or other proceeding and making employees available on a
mutually convenient basis to provide additional information and
explanation of any material provided hereunder. Such cooperation shall
also include, in connection with audits of any of the Pre-Closing Tax
Returns (other than Specific Returns), Purchaser's being advised of such
audits, Purchaser's being given the opportunity to comment on proposed
written submissions and oral arguments to be presented to Tax authorities
and being given the opportunity to discuss Tax audit issues with the
Stockholders' counsel or other representatives in such audits. The
Stockholders' Committee shall consider in good faith all such comments.
The Stockholders' Committee warrants that no audit of a Pre-Closing Tax
Return (other than Specific Returns) will have an adverse effect on
Purchaser or the AIMCOR Group. Purchaser, the Stockholders' Committee,
Germany LP and Luxembourg LP agree (A) to retain all books and records
with respect to Tax matters pertinent to the AIMCOR Group relating to any
taxable period beginning before the Closing Date until the expiration of
the applicable statutes of limitations (and, to the extent notified by
Purchaser or the Stockholders' Committee, any extensions thereof) of the
respective taxable periods, and to abide by all record retention
agreements entered into with any taxing authority, and (B) to give the
other party reasonable written notice prior to transferring, destroying or
discarding any such books and records and, if the other party so requests,
Purchaser or the Stockholders, as the case may be, shall allow the other
party to take possession of such books and records.
65
6.11 Pension Plans. With respect to each individual who after the Closing
Date is employed by Consumer Products or by an entity formed by or for the
benefit of the respective families of either Xxxxxxxxx or Xxxxxxxx and who is a
participant in the Applied Industrial Materials Corporation Salaried Employees'
Savings & Retirement Plan ("Salaried Plan"), Purchaser, within 60 days after the
later of (i) the Closing Date and (ii) the dates Consumer Products and such
entities provide written evidence reasonably satisfactory to Purchaser that
Consumer Products and/or such entities have each established a qualified plan
under Section 401(k) of the Code in order to receive a transfer of such assets
and liabilities, shall cause the Salaried Plan to transfer to a plan (or plans)
which is (are) intended to qualify under Section 401(a) of the Code and which is
(are) designated by Consumer Products and/or such entities as the transferee
plan (or plans), in-kind, the investment fund interests of the respective
participant on the date immediately preceding the date of transfer or such other
assets as Consumer Products or such entities (as the case may be) shall approve,
and which represent the entire account balance, including both the vested and
nonvested portions thereof, as determined on the date immediately preceding the
date of transfer, of each such individual. Upon such transfers of assets and
liabilities from the Salaried Plan, the transferee plan(s) shall be liable for
the benefits of each such participant for whom assets and liabilities have been
transferred. With respect to each individual who after the Closing Date is
employed by Consumer
66
Products and who is a participant in the Retirement Plan for Hourly Employees of
Applied Industrial Materials Corporation ("Hourly Plan"), Purchaser shall cause
all accrued benefits of each such individual under the Hourly Plan to be fully
vested and nonforfeitable. Purchaser agrees to cooperate with Consumer Products
and the entities referred to above in all respects to accomplish the intent of
the foregoing, including, without limitation, promptly providing such
information, records and other data reasonably requested.
6.12 Certain Collections. In the event a member of the AIMCOR Group shall
receive any payments or instruments of payment on account of the accounts
receivable of Consumer Products, Purchaser shall forthwith forward them to
Consumer Products. In the case of any checks, such checks shall be endorsed,
without recourse, to Consumer Products.
ARTICLE 7
Indemnification
7.1 General. From and after the Closing, the parties shall indemnify each
other as provided in this Article 7.
7.2 Certain Definitions. As used in this Agreement, the following terms
shall have the indicated meanings:
(a) "Damages" shall mean all assessments, levies, losses, fines,
penalties, damages, Taxes, costs and expenses, including, without
limitation, reasonable attorneys', accountants', investigators', and
experts' fees and expenses;
(b) "Indemnified Party" shall mean, with respect to a particular
matter, a party hereto who is entitled to indemnification from another
party hereto pursuant to this Article 7;
67
(c) "Indemnifying Party" shall mean, with respect to a particular
matter, a party hereto who is required to provide indemnification under
this Article 7 to another party hereto;
(d) "Claim" shall mean any action, suit, proceeding, investigation,
or like matter which is asserted or threatened by any person, their
successors and permitted assigns, against any Indemnified Party or to
which any Indemnified Party is subject.
7.3 Stockholders' Indemnification Obligations. Subject to the provisions
of Sections 7.4 and 7.8:
(a) the Stockholders, jointly and severally, shall indemnify, save
and keep Purchaser, the members of the AIMCOR Group and their respective
directors, officers, employees, representatives, agents and their
respective successors and permitted assigns and Affiliates (each a
"Purchaser Indemnitee" and collectively, the "Purchaser Indemnitees")
harmless against and from all Damages sustained or incurred by any
Purchaser Indemnitee, as a result of or arising out of or by virtue of:
(i) any inaccuracy in or breach of any representation and
warranty made by the Stockholders, Germany LP or Luxembourg LP to
Purchaser contained in Section 2.3 (other than representations and
warranties contained in Section 2.3(k), which are governed
exclusively by Section 7.3(a)(v)) or by Germany LP or Luxembourg LP
in Section 2.4 or in any closing document delivered to Purchaser in
connection herewith;
(ii) the breach by any Stockholder, Germany LP or Luxembourg
LP of, or failure of any Stockholder to comply with, any of the
covenants or obligations under this Agreement to be performed by the
Stockholders, Germany LP or Luxembourg LP (other than Sections 6.3,
6.8 and 6.9);
(iii) to the extent such Damages result or arise from (x)
violations of or obligations imposed under Environmental Laws, (y)
actions required under Environmental Laws, including, without
limitation, compliance with orders, decrees or similar directives
issued by any court or governmental authority pursuant to
Environmental Laws, or (z) contamination by Hazardous Materials in
condition, concentration or amount exceeding an applicable remedial
standard provided for under Environmental Laws: conditions existing,
or events occurring, on or prior to the Closing Date at or relating
to the properties located in Gloucester, Ontario, Bridgeport,
Alabama or Mannheim, Germany, including
68
without limitation the use of silica breeze disposal ponds by the
Bridgeport, Alabama facility and the presence of radioactive
materials at, and ground water contamination at or about, the
Gloucester, Ontario facility;
(iv) all Liabilities related to the Excluded Assets,
regardless of whether such Liabilities arose prior to, on the date
of or after the transfer of such Excluded Assets;
(v) (i) any Taxes of any member of the AIMCOR Group with
respect to any Tax year or portion thereof ending on or before the
Closing Date (or for any Tax year beginning before and ending after
the Closing Date to the extent allocable to the portion of such
period beginning before and ending on the Closing Date), (ii) the
unpaid Taxes of any person (other than members of the AIMCOR Group)
under Treas. Reg. section 1.1502-6 (or any similar provision of
state, local or foreign law), or as a transferee or successor, by
contract, or otherwise, and (iii) any inaccuracy in or a breach of
any representation and warranty contained in Section 2.3(k);
(vi) Taxes payable by the AIMCOR Group by virtue of the
Section 338(h)(10) Election;
(vii) Taxes payable by the AIMCOR Group resulting from the
sale or transfer of the Excluded Assets; or
(viii) the manufacture, production, sale or distribution of
any asbestos or any asbestos-containing product or any silica or any
silica-containing product prior to the Closing Date by any member of
the AIMCOR Group or any of their respective predecessors or by, from
or with respect to any facility or assets which any such member or
predecessor owns, leases or operates or in the past has owned,
leased or operated;
(b) any Stockholder with respect to which (x) any representation or
warranty contained in Section 2.4 is inaccurate or was breached, or (y)
any of Sections 6.3, 6.8 or 6.9 is breached or violated, shall indemnify,
save and keep the Purchaser Indemnitees harmless against and from all
Damages resulting therefrom;
(c) to the extent that the Stockholders are obligated to make any
payment to the Purchaser pursuant to Article 7, (other than pursuant to
Section 7.3(a)(vi) or (vii)) the amount of such payment shall be paid by
the Stockholders to Purchaser, in the first instance, from the Indemnity
Escrow. To the extent that the Stockholders are obligated to make any
69
payment to the Purchaser pursuant to Section 7.3(a)(vi) or (vii) the
amount of such payment shall be paid by the Stockholders to Purchaser, in
the first instance, from the Tax Indemnity Escrow. If the amount payable
to the Purchaser by the Stockholders exceeds the amount in the Indemnity
Escrow or the Tax Indemnity Escrow (as the case may be), the amount of
such excess will be paid by the Stockholders' as provided in this Article
7. Neither the existence of the Indemnity Escrow, the Tax Indemnity
Escrow, nor the amounts thereof, however, shall be deemed to limit
Purchaser's right to seek indemnification pursuant to this Article 7.
7.4 Limitation on Stockholders' Indemnification Obligations. The
Stockholders' obligations pursuant to the provisions of Section 7.3 are subject
to the following limitations:
(a) the Purchaser Indemnitees shall not be entitled to recover under
Section 7.3(a)(i) (other than for any inaccuracy in or breach of any
representation and warranty contained in Section 2.3(t)) until the total
amount which the Purchaser Indemnitees would recover under Section
7.3(a)(i), but for this Section 7.4(a), exceeds $4,000,000 (the "General
Deductible"), and then the Purchaser Indemnitees shall be entitled to
recover only for the excess over the General Deductible. The General
Deductible shall be reduced, dollar for dollar, by the amount of all
Damages suffered by the Purchaser Indemnitees which would be indemnifiable
pursuant to Section 7.3(a)(iii) but for the Environmental Deductible (as
herein defined) or pursuant to Section 7.3(a)(viii) but for the Product
Deductible (as herein defined). For sole purposes of this paragraph (a)
and paragraph (b) below, in determining whether the claims of the
Purchaser Indemnitees shall exceed the General Deductible, the
Environmental Deductible or the Product Deductible (as the case may be),
all references in Section 2.3 to materiality or Material Adverse Effect,
or words to that effect, shall be disregarded;
(b) the Purchaser Indemnitees shall not be entitled to recover under
(x) Section 7.3(a)(i) by virtue of any inaccuracy in or breach of Section
2.3(t), or (y) Section 7.3(a)(iii), until the total amount which the
Purchaser Indemnitees would recover under both Section 7.3(a)(i) by virtue
of any inaccuracy in or breach of Section 2.3(t) and Section 7.3(a)(iii),
but for this Section 7.4(b), exceeds $2,000,000 (the "Environmental
Deductible"), and then the Purchaser Indemnitees shall be entitled to
recover only for the excess over the Environmental Deductible. The
Environmental Deductible shall be reduced, dollar for dollar, by the
amount of Damages suffered by the Purchaser Indemnitees in excess of
$2,000,000 (in the aggregate) which would be
70
indemnifiable pursuant to Section 7.3(a)(i) but for the General Deductible
or pursuant to Section 7.3(a)(viii) but for the Product Deductible;
(c) the Purchaser Indemnitees shall not be entitled to recover under
Section 7.3(a)(viii) until the total amount which the Purchaser
Indemnitees would recover under Section 7.3(a)(viii), but for this Section
7.4(c), would exceed the Product Deductible, and then the Purchaser
Indemnitees shall be entitled to recover only for the excess over the
Product Deductible. As used herein, the term "Product Deductible" shall
mean the sum of (x) $2,000,000 (the "Base Product Deductible") plus (y)
the product of $100,000 multiplied by the number of whole years which have
elapsed since the Closing Date as of the time the Purchaser Indemnitees
shall assert (or would have had the right to assert, but for this
paragraph (c)) a claim for indemnification under Section 7.3(a)(viii). The
Base Product Deductible shall be reduced, dollar for dollar, by the
aggregate amount of Damages suffered by the Purchaser Indemnitees which
would be indemnifiable pursuant to (x) Section 7.3(a)(i) (other than by
virtue of an inaccuracy in or breach of Section 2.3(t)) but for the
General Deductible or (y) Section 7.3(a)(i) (by virtue of an inaccuracy in
or breach of Section 2.3(t)), or Section 7.3(a)(iii) but for the
Environmental Deductible.
(d) the Purchaser Indemnitees shall not be entitled to recover under
Section 7.3(a)(i) (other than with respect to the representations and
warranties set forth in Section 2.3(k) or 2.3(t)) unless a claim has been
asserted by written notice, specifying the details of the alleged
misrepresentation or breach of warranty, delivered to the Stockholders'
Committee on or prior to the 456th day next following the Closing Date;
(e) the Purchaser Indemnitees shall not be entitled to recover under
Section 7.3(a)(i) with respect to any inaccuracy in or breach of the
representations and warranties contained in Section 2.3(t), unless a claim
has been asserted by written notice, specifying the details of the claim
for indemnification, delivered to the Stockholders' Committee on or prior
to the third anniversary of the Closing Date;
(f) the Purchaser Indemnitees shall not be entitled to recover under
Section 7.3(a)(viii) unless a claim has been asserted by written notice,
specifying the details of the claim for indemnification, delivered to the
Stockholders' Committee on or prior to the twentieth anniversary of the
Closing Date;
(g) the Purchaser Indemnitees shall not be entitled to recover under
Section 7.3(a)(iii) unless a claim has been asserted by written notice,
specifying the details of the
71
claim for indemnification, delivered to the Stockholders' Committee on or
prior to the fifteenth anniversary (in the case of the property located in
Gloucester, Ontario), or the sixth anniversary (in the case of the
properties located in Bridgeport, Alabama and Mannheim, Germany), of the
Closing Date;
(h) the Purchaser Indemnitees shall not be entitled to recover under
Section 7.3:
(i) with respect to consequential damages of any kind, damages
consisting of business interruption or lost profits (regardless of
the characterization thereof), damages for lost value of the AIMCOR
Group, damages computed on a multiple of earnings or similar basis,
or, except in the case of recoveries under Section 7.3(a)(viii)
where punitive damages have been awarded against a Purchaser
Indemnitee, punitive damages;
(ii) to the extent the subject matter of the claim is covered
by insurance (including title insurance) held by any member of the
AIMCOR Group;
(iii) to the extent the matter in question, taken together
with all similar matters, does not exceed the amount of any reserves
with respect to such matters which are reflected in the Closing
Balance Sheet;
(iv) to the extent the matter in question was taken into
account in the computation of the Purchase Price pursuant to Section
1.3; or
(v) to the extent of any recovery by AIMCOR with respect to
such matter pursuant to the provisions of that certain Stock
Purchase Agreement dated October 31, 1986 (the "IMC Agreement")
between Industry Holdings, Inc., a Delaware corporation and
International Minerals & Chemical Corporation, a Delaware
corporation (now known as Mallinckrodt Group, Inc.
("Mallinckrodt")), IMC Industry Group Inc., a Delaware corporation,
and IMC Industry Group (Quartz) Inc., a Delaware corporation. Unless
Purchaser shall, in good faith, determine, on advice of counsel,
that under no reasonable circumstances would AIMCOR be entitled to
indemnification from Mallinckrodt under the terms of the IMC
Agreement with respect to the matter for which the Purchaser
Indemnitees would be entitled to indemnification from the
Stockholders pursuant to this Agreement, Purchaser shall use all
reasonable diligent efforts to recover indemnification from
Mallinckrodt under the IMC Agreement with respect to any matter
which is indemnifiable both
72
under the IMC Agreement and this Agreement, including the
commencement and diligent prosecution of litigation or arbitration
proceedings. In such event, Purchaser shall delay enforcement of any
claim for indemnification against the Stockholders under this
Agreement until the expiration of the earlier to occur of (i) a
judicial or arbitral determination that AIMCOR is not entitled to
indemnification from Mallinckrodt under the IMC Agreement and (ii)
the second anniversary of the date of commencement of proceedings
under, or with respect to, the IMC Agreement. In the event that
after such time the Stockholders shall make an indemnity payment to
Purchaser with respect to such matter, Purchaser shall cause the
Stockholders to be subrogated to AIMCOR's rights under the IMC
Agreement to the extent of such indemnity payment. In the event a
court or arbitral panel shall award damages to AIMCOR, or AIMCOR
shall reach a settlement, with respect to a matter as to which
Purchaser has a right to indemnification from the Stockholders under
this Agreement which is identical in all respects relevant to such
matter with AIMCOR's right to indemnification under the IMC
Agreement, Purchaser shall not be entitled to recover any additional
sum from the Stockholders with respect to such matter except to the
extent that recovery from Mallinckrodt under the IMC Agreement was
restricted or prevented by virtue of the application of Section
8.3(d) of the IMC Agreement;
(i) the Purchaser Indemnitees shall not be entitled to recover under
Section 7.3(a) (other than subparagraphs (ii), (iv), (v), (vi), (vii) and
(viii), to the extent the aggregate amount which they would be entitled to
recover pursuant to Section 7.3(a) (other than subparagraphs (ii), (iv),
(v), (vi), (vii) and (viii)), but for this paragraph (i), would exceed
$50,000,000;
(j) the Purchaser Indemnitees shall not be entitled to recover under
Section 7.3(a)(viii), to the extent the aggregate amount which they would
be entitled to recover under Section 7.3(a), but for this paragraph (i),
would exceed $125,000,000 (which sum shall be reduced by the amount of all
recoveries by the Purchaser Indemnitees pursuant to Sections 7.3(a)(i) and
7.3(a)(iii));
(k) the Purchaser Indemnitees shall not be entitled to recover under
Section 7.3(b) to the extent the aggregate amount they would be entitled
to recover under Section 7.3(b), but for this paragraph (k), would exceed
the Base Purchase Price of the Purchased Shares attributable to the
Stockholder having an obligation of indemnification pursuant to Section
7.3(b); and the Purchaser Indemnitees shall not be entitled to recover
from any Stockholder under Section 7.3(a) (other than
73
subparagraph 7.3(a)(iv)) in an aggregate amount in excess of the Base
Purchase Price of the Purchased Shares attributable to such Stockholder;
(l) the amount of any recovery by the Purchaser Indemnitees pursuant
to Section 7.3 shall be net of any foreign, federal, state and/or local
income tax benefits inuring to the Purchaser Indemnitees as a result of
the state of facts which entitled the Purchaser Indemnitees to recover
from the Stockholders pursuant to Section 7.3;
(m) the Purchaser Indemnitees shall not be entitled to recover under
Section 7.3(a)(v), to the extent the aggregate of the reserves (including
both specific reserves and general reserves) with respect to Tax matters
reflected on the Closing Balance Sheet shall not have been exceeded;
(n) if without regard to this paragraph (o) a state of facts could
allow a Purchaser Indemnitee to recover under both Section 7.3(a)(i) and
Section 7.3(a)(ii), the Purchaser Indemnitee may recover only under
Section 7.3(a)(i);
(o) if without regard to this paragraph (p) a state of facts could
allow a Purchaser Indemnitee to recover under both Section 7.3(a)(iv) and
7.3(a)(vii), the Purchaser Indemnitee may recover only under Section
7.3(a)(vii).
7.5 Purchaser's Indemnification Covenants. Purchaser shall indemnify, save
and keep the Stockholders and their respective successors and assigns (the
"Stockholder Indemnitees"), harmless against and from all Damages sustained or
incurred by any Stockholder Indemnitee, as a result of or arising out of or by
virtue of:
(a) any inaccuracy in or breach of any representation and warranty
made by Purchaser to the Stockholders herein or in any closing document
delivered to the Stockholders in connection herewith; or
(b) any breach by Purchaser of, or failure by Purchaser to comply
with, any of the covenants or obligations under this Agreement to be
performed by Purchaser.
7.6 Cooperation. Subject to the provisions of Section 7.7, the
Indemnifying Party shall have the right, at its own expense, to
74
participate in the defense of any Claim by a party other than the parties hereto
(a "Third Party Claim"), and if said right is exercised, the parties shall
cooperate in the investigation and defense of said Third Party Claim.
7.7 Third Party Claims. Except as otherwise provided in Section 7.8,
forthwith following the receipt of notice of a Third Party Claim, the party
receiving the notice of the Third Party Claim shall (i) notify the other party
of its existence, setting forth with reasonable specificity the facts and
circumstances of which such party has received notice, and (ii) if the party
giving such notice is an Indemnified Party, specifying the basis hereunder upon
which the Indemnified Party's claim for indemnification is asserted. The
Indemnified Party may, upon reasonable notice, tender the defense of a Third
Party Claim to the Indemnifying Party. If:
(a) the defense of a Third Party Claim is so tendered and within
thirty (30) days thereafter such tender is accepted without qualification
by the Indemnifying Party; or
(b) within thirty (30) days after the date on which written notice
of a Third Party Claim has been given pursuant to this Section 7.7, the
Indemnifying Party shall acknowledge without qualification its
indemnification obligations as provided in this Article 7 in writing to
the Indemnified Party and accept the defense thereof;
then, except as hereinafter provided, the Indemnified Party shall not, and the
Indemnifying Party shall, have the right to contest, defend, litigate or settle
such Third Party Claim. The Indemnified Party shall have the right to be
represented by counsel at its own expense in any such contest, defense,
litigation or settlement conducted by the Indemnifying Party, provided that the
Indemnified
75
Party shall be entitled to reimbursement therefor if the Indemnifying Party
shall lose its right to contest, defend, litigate and settle the Third Party
Claim as herein provided. The Indemnifying Party shall lose its right to
contest, defend, litigate and settle the Third Party Claim if it shall fail to
diligently contest the Third Party Claim. So long as the Indemnifying Party has
not lost its right and/or obligation to contest, defend, litigate and settle as
herein provided, the Indemnifying Party shall have the exclusive right to
contest, defend and litigate the Third Party Claim and shall have the exclusive
right, in its discretion exercised in good faith, and upon the advice of
counsel, to settle any such matter, either before or after the initiation of
litigation, at such time and upon such terms as it deems fair and reasonable,
provided that at least ten (10) days prior to any such settlement, written
notice of its intention to settle shall be given to the Indemnified Party;
provided that no such settlement shall be agreed to by the Indemnifying Party
without the Indemnified Parties' prior written consent if such settlement
provides for injunctive relief against the Indemnified Party or does not include
an unconditional release of such Indemnified Party from all liability on any
claims that are the subject matter of such action. All expenses (including
without limitation attorneys' fees) incurred by the Indemnifying Party in
connection with the foregoing shall be paid by the Indemnifying Party. No
failure by an Indemnifying Party to acknowledge in writing its indemnification
obligations under this Article 7 shall
76
relieve it of such obligations to the extent they exist. If an Indemnified Party
is entitled to indemnification against a Third Party Claim, and the Indemnifying
Party fails to accept a tender of, or assume, the defense of a Third Party Claim
pursuant to this Section 7.7, or if, in accordance with the foregoing, the
Indemnifying Party shall lose its right to contest, defend, litigate and settle
such a Third Party Claim, the Indemnified Party shall have the right, without
prejudice to its right of indemnification hereunder, in its discretion exercised
in good faith and upon the advice of counsel, to contest, defend and litigate
such Third Party Claim, and may settle such Third Party Claim, either before or
after the initiation of litigation, at such time and upon such terms as the
Indemnified Party deems fair and reasonable, provided that at least ten (10)
days prior to any such settlement, written notice of its intention to settle is
given to the Indemnifying Party. If, pursuant to this Section 7.7, the
Indemnified Party so contests, defends, litigates or settles a Third Party Claim
for which it is entitled to indemnification hereunder as hereinabove provided,
the Indemnified Party shall be reimbursed by the Indemnifying Party for the
reasonable attorneys' fees and other expenses of contesting, defending,
litigating and/or settling the Third Party Claim which are incurred from time to
time, forthwith following the presentation to the Indemnifying Party of itemized
bills for said attorneys' fees and other expenses.
77
7.8 Environmental Indemnities. Upon any Purchaser Indemnitee becoming
aware of the occurrence of any event or the existence of any state of facts in
respect of which the Purchaser Indemnitee will seek indemnification with respect
to a claim for inaccuracy in or breach of any of the representations and
warranties contained in Section 2.3(t) or a claim for indemnification pursuant
to Section 7.3(a)(iii) (an "Environmental Claim"), and thereafter:
(a) Purchaser will give to the Stockholders' Committee prompt notice
specifying in reasonable detail the basis for the Environmental Claim;
(b) Purchaser will promptly deliver to the Stockholders' Committee
copies of all final environmental reports, studies, surveys, test data and
reports, assessments, cost estimates and all other information available
to it or AIMCOR relating to or supporting the Environmental Claim;
(c) Purchaser will permit and will cause AIMCOR to permit
representatives of the Stockholders' Committee (including advisors and
consultants) to visit and inspect from time to time any of the properties
to which the Environmental Claim relates, and to enter on such properties
from time to time for the purpose of conducting such environmental tests
as the Stockholders' Committee may reasonably desire with respect to the
Environmental Claim, all during normal business hours and at the
Stockholders' expense; and
(d) When taking remedial action in connection with an Environmental
Claim in respect of which a Purchaser Indemnitee will seek indemnification
hereunder, the Purchaser Indemnitee will take such action as is
cost-effective and otherwise reasonable under the circumstances, in the
good faith business judgment of AIMCOR.
(e) With respect to Environmental Claims relating to breaches in or
inaccuracies of any representation or warranty contained in Section 2.3(t)
only, Purchaser shall disclose such Environmental Claims to a governmental
authority only to the extent required by Environmental Law or if such
disclosure would be consistent with Purchaser's reasonable business
practices.
Notwithstanding the foregoing, if in order for the AIMCOR Group to obtain
indemnification with respect to an Environmental Claim as to
78
which AIMCOR would be entitled to indemnity under the IMC Agreement AIMCOR would
be required to comply with Section 6.7 of the IMC Agreement, Purchaser shall
cause AIMCOR to comply with such provisions.
7.9 Indemnification Exclusive Remedy. Indemnification pursuant to the
provisions of this Article 7 shall be the exclusive remedy of the parties for
any misrepresentation or breach of any warranty or covenant contained herein or
in any closing document executed and delivered pursuant to the provisions
hereof; provided, however, that nothing contained herein shall relieve any party
hereto from liability for its fraudulent actions or misrepresentations. Without
limiting the generality of the preceding sentence, no legal action sounding in
strict liability or tort (other than fraudulent misrepresentation) may be
maintained by any party.
ARTICLE 8
Effect of Termination/Proceeding
8.1 General. The parties shall have the rights and remedies with respect
to the termination and/or enforcement of this Agreement which are set forth in
this Article 8.
8.2 Right to Terminate. Anything to the contrary herein notwithstanding,
this Agreement and the transaction contemplated hereby may be terminated at any
time prior to the Closing:
(a) by the mutual written consent of Purchaser and the Stockholders'
Committee; or
(b) by prompt notice given in accordance with Section 10.3, by
either of such parties if the Closing shall not have occurred at or before
11:59 p.m. on November 30,
79
1997; provided, however, that the right to terminate this Agreement under
this Section 8.2(b) shall not be available to any party whose failure to
fulfill any of its obligations under this Agreement has been the cause of
or resulted in the failure of the Closing to occur on or prior to the
aforesaid date.
8.3 Certain Effects of Termination. In the event of the termination of
this Agreement by either the Stockholders' Committee or Purchaser as provided in
Section 8.2:
(a) each party, if so requested by the other party, will return
promptly every document furnished to it by the other party (or any
subsidiary, division, associate or Affiliate of such other party) in
connection with the transaction contemplated hereby, whether so obtained
before or after the execution of this Agreement, and any copies thereof
(except for copies of documents publicly available) which may have been
made, and will use reasonable efforts to cause its representatives and any
representatives of financial institutions and investors and others to whom
such documents were furnished promptly to return such documents and any
copies thereof any of them may have made; and
(b) the Confidentiality Letter shall remain in effect.
This Section 8.3 shall survive any termination of this Agreement.
8.4 Remedies. Notwithstanding any termination right granted in Section
8.2, in the event of the nonfulfillment of any condition to a party's closing
obligations, in the alternative, such party may elect to do one of the
following:
(a) proceed to close despite the nonfulfillment of any closing
condition, it being understood that consummation of the Closing shall not
be deemed a waiver of a breach of any representation, warranty or covenant
and of such party's rights and remedies with respect thereto;
(b) decline to close, terminate this Agreement as provided in
Section 8.2, and thereafter seek damages to the extent permitted in
Section 8.5; or
(c) seek specific performance of the obligations of the other party.
Each party hereby agrees that in the event of any breach by such party of
this Agreement, the remedies available to the other party at law may be
inadequate and that
80
such party's obligations under this Agreement may be specifically
enforced.
8.5 Right to Damages. If this Agreement is terminated pursuant to Section
8.2, neither party hereto shall have any claim against the other except if the
circumstances giving rise to such termination were caused by the other party's
willful failure to comply with a material covenant set forth herein, in which
event termination shall not be deemed or construed as limiting or denying any
legal or equitable right or remedy of said party.
ARTICLE 9
Stockholders' Committee
9.1 Appointment of Stockholders' Committee. Each of the Stockholders
hereby irrevocably constitutes and appoints Xxxxxxxxx and Xxxxxxxx
(collectively, the "Stockholders' Committee"), as such Stockholder's
attorneys-in-fact and agents in connection with the execution and performance of
this Agreement. This power is irrevocable and coupled with an interest, and
shall not be affected by the death, incapacity, illness, dissolution or other
inability to act of any of Stockholders.
9.2 Authority. Each of the Stockholders hereby irrevocably grants the
Stockholders' Committee full power and authority:
(a) to execute and deliver, on behalf of such Stockholder, and to
accept delivery of, on behalf of such Stockholder, such documents as may
be deemed by the Stockholders' Committee, in their sole discretion, to be
appropriate to consummate this Agreement, including without limitation a
Contribution Agreement among the Stockholders;
(b) to endorse and to deliver on behalf of such Stockholder,
certificates representing the shares of stock of
81
AIMCOR or Enterprises to be sold by such Stockholder at the Closing;
(c) to acknowledge receipt at the Closing of the Estimated Purchase
Price, less the amounts required to fund the Escrows, for each share of
stock of AIMCOR or Enterprises sold by such Stockholder at the Closing, as
payment in full for such shares, to designate the manner of payment of
such amount, and to certify, on behalf of such Stockholder, as to the
accuracy of the representations and warranties of such Stockholder under,
or pursuant to the terms of, this Agreement;
(d) to make disbursements from time to time from the account to
which the Purchase Price has been paid pursuant to Section 1.4 (including
disbursements to the Stockholders on account of the Purchase Price payable
to them and disbursements in respect of expenses payable by the
Stockholders pursuant to Sections 10.1 and 10.4), and to retain in such
account such sum as the Stockholders' Committee shall deem appropriate to
cover contingencies for such period of time as the Stockholders' Committee
shall deem appropriate;
(e) to (x) dispute or refrain from disputing, on behalf of such
Stockholder, any claim made by any Purchaser Indemnitee under this
Agreement; (y) negotiate and compromise, on behalf of such Stockholder,
any dispute that may arise under, and to exercise or refrain from
exercising any remedies available under, this Agreement, and (z) execute,
on behalf of such Stockholder, any settlement agreement, release or other
document with respect to such dispute or remedy;
(f) to waive, on behalf of such Stockholder, any closing condition
contained in Article 4 of this Agreement and to give or agree to, on
behalf of such Stockholder, any and all consents, waivers, amendments or
modifications, deemed by the Stockholders' Committee, in their sole
discretion, to be necessary or appropriate, under this Agreement, and, in
each case, to execute and deliver any documents that may be necessary or
appropriate in connection therewith;
(g) to enforce, on behalf of such Stockholder, any claim against
Purchaser arising under this Agreement;
(h) to engage attorneys, accountants and agents, and to employ
personnel for the purpose of winding up the affairs of the Stockholders as
they pertain to AIMCOR, at the expense of the Stockholders;
(i) to amend this Agreement (other than this Article 9) or any of
the instruments to be delivered to Purchaser by such Stockholder pursuant
to this Agreement; and
82
(j) to give such instructions and to take such action or refrain
from taking such action, on behalf of such Stockholder, as the
Stockholders' Committee deems, in their sole discretion, necessary or
appropriate to carry out the provisions of this Agreement.
9.3 Reliance. Each Stockholder hereby agrees that:
(a) in all matters in which action by the Stockholders' Committee is
required or permitted, the members of the Stockholders' Committee, acting
jointly, are authorized to act on behalf of such Stockholder,
notwithstanding any dispute or disagreement among the Stockholders or
between any Stockholder and the Stockholders' Committee. The members of
the Stockholders' Committee may, as between them, agree as to particular
matters or actions which may be taken by either member, or by one
particular member, of the Stockholders' Committee without the necessity
for action by both members of the Stockholders' Committee. Purchaser shall
be entitled to rely on any and all action taken by the Stockholders'
Committee under this Agreement without any liability to, or obligation to
inquire of, any of the Stockholders or the other members of the
Stockholders' Committee, notwithstanding any knowledge on the part of the
Purchaser of any such dispute or disagreement;
(b) notice to either member of the Stockholders' Committee,
delivered in the manner provided in Section 10.3, shall be deemed to be
notice to both of the members of the Stockholders' Committee and to all
Stockholders for the purposes of this Agreement;
(c) the power and authority of the Stockholders' Committee, as
described in this Agreement, shall continue in force until all rights and
obligations of the Stockholders under this Agreement shall have
terminated, expired or been fully performed;
(d) if either member of the Stockholders' Committee resigns or
otherwise ceases to function in his capacity as such for any reason
whatsoever, the remaining member of the Stockholders' Committee shall act
on behalf of the Stockholders as provided in this Article 9.
9.4 Actions by Stockholders. Each Stockholder agrees that, notwithstanding
the foregoing, at the request of Purchaser, such Stockholder shall take all
actions necessary or appropriate to consummate the transaction contemplated
hereby (including, without
83
limitation, delivery of such Stockholder's Purchased Shares and acceptance of
the Purchase Price therefor) individually on such Stockholder's own behalf, and
delivery of any other documents required of the Stockholders pursuant to the
terms hereof.
9.5 Indemnification of Purchaser and Its Affiliates. The Stockholders,
jointly and severally, shall indemnify the Purchaser Indemnitees against, and
agree to hold the Purchaser Indemnitees harmless from, any and all Damages
incurred or suffered by any Purchaser Indemnitee arising out of, with respect to
or incident to the operation of, or any breach of any covenant or agreement
pursuant to, this Article 9, or the designation, appointment and actions of the
Stockholders' Committee pursuant to the provisions hereof, including without
limitation, with respect to (x) actions taken by the Stockholders' Committee or
any member thereof, and (y) reliance by any Purchaser Indemnitee on, and actions
taken by any Purchaser Indemnitee in response to or in reliance on, the
instructions of, notice given by or any other action taken by the Stockholders'
Committee.
9.6 Indemnification of Stockholders' Committee. Each Stockholder shall
severally indemnify each member of the Stockholders' Committee against any
Damages (except such Damages as result from such member's gross negligence or
willful misconduct) that such member may suffer or incur in connection with any
action or omission of such member as a member of the Stockholders' Committee.
Each Stockholder shall bear its pro-rata portion of such Damages. No member of
the Stockholders' Committee shall be
84
liable to any Stockholder with respect to any action or omission taken or
omitted to be taken by the Stockholders' Committee pursuant to this Article 9,
except for such member's gross negligence or willful misconduct.
ARTICLE 10
Miscellaneous
10.1 Fees. The Stockholders shall pay all fees and expenses charged by
Xxxxxxx, Xxxxx & Co.
10.2 Publicity. Except as otherwise required by law or applicable stock
exchange rules, press releases and other publicity concerning this transaction
shall be made only with the prior agreement of the Stockholders' Committee and
Purchaser (and in any event, the Stockholders' Committee shall use all
reasonable efforts to consult and agree with each other with respect to the
content of any such required press release or other publicity).
10.3 Notices. All notices required or permitted to be given hereunder
shall be in writing and may be delivered by hand, by facsimile, by nationally
recognized private courier, or by United States mail. Notices delivered by mail
shall be deemed given three (3) business days after being deposited in the
United States mail, postage prepaid, registered or certified mail, return
receipt requested. Notices delivered by hand, by facsimile, or by nationally
recognized private courier shall be deemed given on the first business day
following receipt; provided, however, that a notice delivered by facsimile shall
only be effective if such notice is also delivered by hand, or deposited in the
United States
85
mail, postage prepaid, registered or certified mail, on or before two (2)
business days after its delivery by facsimile. All notices shall be addressed as
follows:
If to Stockholders:
c/o Applied Industrial Materials Corporation
000 Xxxx Xxxx Xxxx
Xxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Fax: (000) 000-0000
with a copy to:
Altheimer & Xxxx
00 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
Fax: (000) 000-0000
If to Purchaser:
Xxxxxx Industries, Inc.
0000 X. Xxxx Xxxxx Xxxxxxx
Xxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
and/or to such other respective addresses and/or addressees as may be designated
by notice given in accordance with the provisions of this Section 10.3.
10.4 Expenses; Transfer Taxes. Except as provided in Section 8.5, each
party hereto shall bear all fees and expenses incurred by such party in
connection with, relating to or arising out of the
86
negotiation, preparation, execution, delivery and performance of this Agreement
and the consummation of the transaction contemplated hereby, including, without
limitation, financial advisors', attorneys', accountants' and other professional
fees and expenses. Purchaser and the Stockholders shall equally split the cost
of all sales, use, stamp, documentary, excise and transfer Taxes which may be
payable in connection with the transaction contemplated hereby, and the party
legally required to file them shall file all necessary Tax Returns and other
documentation with respect to all such sales, use, stamp, documentary, excise
and transfer Taxes.
10.5 Entire Agreement. This Agreement, the agreements and instruments to
be delivered by the parties pursuant to the provisions hereof, and the
Confidentiality Letter constitute the entire agreement between the parties and
shall be binding upon and inure to the benefit of the parties hereto and their
respective legal representatives, successors and permitted assigns. Each
Exhibit, schedule and the Disclosure Schedule, shall be considered incorporated
into this Agreement. Any amendments, or alternative or supplementary provisions,
to this Agreement, must be made in writing and duly executed by an authorized
representative or agent of each of the parties hereto. The inclusion of any item
in the Disclosure Schedule is not evidence of the materiality of such item for
the purposes of this Agreement. The parties make no representations or
warranties to each other, except as contained in this Agreement, and any and all
prior representations and warranties made by any party or its representatives,
whether
87
verbally or in writing, are deemed to have been merged into this Agreement, it
being intended that no such prior representations or warranties shall survive
the execution and delivery of this Agreement. Purchaser acknowledges that it has
conducted an independent investigation of the financial condition, assets,
liabilities, properties and projected operations of the AIMCOR Group in making
its determination as to the propriety of the transaction contemplated by this
Agreement, and in entering into this Agreement, has relied solely on the results
of said investigation and on the representations and warranties of the
Stockholders expressly contained in this Agreement.
10.6 Non-Waiver. The failure in any one or more instances of a party to
insist upon performance of any of the terms, covenants or conditions of this
Agreement, to exercise any right or privilege in this Agreement conferred, or
the waiver by said party of any breach of any of the terms, covenants or
conditions of this Agreement, shall not be construed as a subsequent waiver of
any such terms, covenants, conditions, rights or privileges, but the same shall
continue and remain in full force and effect as if no such forbearance or waiver
had occurred. No waiver shall be effective unless it is in writing and signed by
an authorized representative of the waiving party.
10.7 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, and all such
counterparts shall constitute but one instrument.
88
10.8 Severability. The invalidity of any provision of this Agreement or
portion of a provision shall not affect the validity of any other provision of
this Agreement or the remaining portion of the applicable provision.
10.9 Applicable Law. This Agreement shall be governed and controlled as to
validity, enforcement, interpretation, construction, effect and in all other
respects by the internal laws of the State of Illinois applicable to contracts
made in that State.
10.10 Binding Effect; Benefit. This Agreement shall inure to the benefit
of and be binding upon the parties hereto, and their successors and permitted
assigns. Nothing in this Agreement, express or implied, shall confer on any
person other than the parties hereto, and their respective successors and
permitted assigns, any rights, remedies, obligations or liabilities under or by
reason of this Agreement, including, without limitation, third party beneficiary
rights, except that Consumer Products shall be a third party beneficiary of
Section 6.12.
10.11 Assignability. This Agreement shall not be assignable by (x) any
Stockholder, Germany LP or Luxembourg LP without the prior written consent of
Purchaser, or (y) Purchaser without the prior written consent of the
Stockholders' Committee.
10.12 Governmental Reporting. Anything to the contrary in this Agreement
notwithstanding, nothing in this Agreement shall be construed to mean that a
party hereto or other person must make or file, or cooperate in the making or
filing of, any return or report
89
to any governmental authority in any manner that such person or such party
reasonably believes or reasonably is advised is not in accordance with law.
10.13 Waiver of Trial by Jury. Each of the parties hereto waives the right
to a jury trial in connection with any suit, action or proceeding seeking
enforcement of such party's rights under this Agreement.
10.14 Consent to Jurisdiction. This Agreement has been executed and
delivered in and shall be deemed to have been made in Chicago, Illinois. The
Stockholders, Germany LP, Luxembourg LP and Purchaser each agrees to the
exclusive jurisdiction of any state or Federal court within the City of Chicago,
with respect to any claim or cause of action arising under or relating to this
Agreement, and waives personal service of any and all process upon it, and
consents that all services of process be made by registered or certified mail,
return receipt requested, directed to it at its address as set forth in Section
10.3, and service so made shall be deemed to be completed when received. The
Stockholders Germany LP, Luxembourg LP and Purchaser each waive any objection
based on forum non conveniens and waive any objection to venue of any action
instituted hereunder. Nothing in this paragraph shall affect the right of the
Stockholders or Purchaser to serve legal process in any other manner permitted
by law.
10.15 Definitions. The following terms are defined in the following
sections of this Agreement:
90
Defined Term Where Found
------------ -----------
Accountants 1.5
Adjusted Book Value 1.3
Adjusted Earnings Computation 1.4(c)
Affiliate 2.2(f)
Affiliate Transactions 2.3(l)(xiii)
AIMCOR Preamble
AIMCOR Entity 1.1
AIMCOR Group 1.1
AIMCOR Germany Recital B
AIMCOR Luxembourg Recital B
Arbitrating Accountant 1.6(b)
Base Purchase Price 1.2(a)
Base Product Deductible 7.4(c)
Xxxxx 2.6
Carbon Products Group 1.4(c)
Carbon Products Group Statement of
Earnings 1.4(c)
Cash Equivalents 1.2
Closing 1.8
Closing Balance Sheet 1.5(b)
Closing Date 1.8
Code 2.3(k)(i)(C)
Commitment Letter 2.2(i)
Company Plans 2.3(p)(iii)
Confidential Information 6.3
Confidentiality Letter 3.3
Consumer Products 3.2(d)(v)a
Control 2.2(f)
Damages 7.2(a)
Disclosure Schedule 2.1
Dispute 1.6(a)
Dispute Notice 1.6(a)
Dispute Period 1.6(a)
Xxxxx 2.6
Enterprises Preamble
Environmental Claim 7.8
Environmental Action 2.3(t)(iii)
Environmental Deductible 7.4(b)
Environmental Laws 2.3(t)(i)
Environmental Permits 2.3(t)(ii)
ERISA 2.3(p)(i)
ERISA Affiliate 2.3(p)(iv)
Escrow Agent 1.4(b)
Escrow Agreement 1.4(b)
Escrows 1.4(b)
Estimated Cash Payment 1.4
Excluded Assets 3.2(d)(v)
Financial Statements 2.3(i)
GAAP 1.5
Xxxxxxxxx 1.1(c)
91
General Deductible 7.4(a)
Germany LP Preamble
Hazardous Materials 2.3(t)(iv)
HSR Act 2.2(c)
Holdback Fund 1.4(b)
Hourly Plan 6.11
IMC Agreement 7.4(g)(v)
Indebtedness 1.2(e)
Indemnifiable Claim 6.7
Indemnified Employee(s) 6.7
Indemnified Party 7.2(b)
Indemnifying Party 7.2(c)
Indemnity Escrow 1.4(b)
Intellectual Property 2.3(x)
Interim Financial Statements 2.3(i)
IRS 2.3(p)(iii)
Xxxxxxxx 1.1(c)
Leased Premises 2.3(v)
Liabilities 2.3(l)(iv)
Letter of Credit 1.4(b)
Luxembourg LP Preamble
Mallinckrodt 7.4(h)(v)
Material Adverse Effect 2.3(b)
Material Consents 3.2(b)
1997 Financial Statements 1.5(a)
Non-U.S. Plan 2.3(p)(vi)
PBGC 2.3(p)(v)
Pension Plans 2.3(p)(i)
Permits 2.3(o)
Pre-Closing Tax Returns 6.10(c)
Product Deductible 7.4(c)
Purchased Shares 1.1
Purchase Price 1.2
Purchaser Preamble
Purchaser Indemnitees 7.3
Real Estate 2.3(u)
Salaried Plan 6.11
Section 338(h)(10) Election 2.3(k)(xi)
Section 338 Forms 6.10(a)
Securities Act 2.2(h)
Specific Returns 6.10(c)
Stockholders Preamble
Stockholder Preamble
Stockholder Entity 2.4(b)
Stockholder Indemnitees 7.5
Stockholder Notes and Loans 1.2(c)
Stockholders' Committee 9.1
Subsidiaries 2.3(g)
TAC 1.5(a)
Tax 2.3(k)(i)(A)
Tax Indemnity Escrow 1.4(b)
Tax Return 2.3(k)(i)(B)
92
Taxes 2.3(k)(i)(A)
Third Party Claim 7.2(d)
Trademarks 2.3(x)
U.S. GAAP 1.5(b)(i)
Welfare Plans 2.3(p)(ii)
10.16 Amendments. This Agreement shall not be modified or amended except
pursuant to an instrument in writing executed and delivered on behalf of each of
the parties hereto.
10.17 Headings. The headings contained in this Agreement are for
convenience of reference only and shall not affect the meaning or interpretation
of this Agreement.
10.18 Trustee Exculpation. Anything to the contrary herein contained
notwithstanding, any individual identified on the signature page as signing "as
trustee" who signs this Agreement does so, not personally, but solely as
trustee, as aforesaid, in the exercise of the power and authority conferred upon
and vested in him, as such trustee. It is expressly understood and agreed that
nothing herein shall be construed as creating any liability in such trustee,
personally, to perform any covenant either express or implied, or by virtue of
any representation and warranty, or any other matter herein contained, all such
liability, if any, being expressly waived by all other parties to the Agreement,
and by every other person now or hereafter claiming any right hereunder. So far
as such trustee and his successor(s), personally, are concerned, every other
person now or hereafter claiming any right hereunder shall look to the trust
assets from time to time held by such trustee and not to the personal assets of
the trustee, for the performance of such covenants or with respect to any
inaccuracy in
93
or breach of any such representation and warranty or with respect to any such
other matter.
94
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first written above.
XXXXXX INDUSTRIES, INC., a Delaware
corporation
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Its: Chairman, President & CEO
----------------------------------
95
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
XXXXXXXXX 1994 FAMILY TRUST, DATED
DECEMBER 31, 1994
By: /s/ Xxxxx Xxxxxxxxx
--------------------------------------
XXXXX XXXXXXXXX, Trustee
/s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------------
XXXXXXX X. XXXXXXXXX
XXXXXXXX 1994 FAMILY TRUST, DATED
DECEMBER 31, 1994
By: /s/ Xxxxx X. Xxxxxxxxxx
--------------------------------------
XXXXX X. XXXXXXXXXX, Trustee
/s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
XXXXX X. XXXXXXXX
XXXXX X. XXXXXXXXX TRUST
By: /s/ Xxxxx Xxxxxxxxx
--------------------------------------
XXXXX XXXXXXXXX, Trustee
96
XXXXX X. XXXXXXXXX TRUST
By: /s/ Xxxxx Xxxxxxxxx
--------------------------------------
XXXXX XXXXXXXXX, Trustee
XXXXX X. XXXXXXXXX TRUST
By: /s/ Xxxxx Xxxxxxxxx
--------------------------------------
XXXXX XXXXXXXXX, Trustee
XXXXXXX X. XXXXXXXXX TRUST
By: /s/ Xxxxx Xxxxxxxxx
--------------------------------------
XXXXX XXXXXXXXX, Trustee
XXXXXX X. XXXXXXXX TRUST
By: /s/ Xxxxx X. Xxxxxxxxxx
--------------------------------------
XXXXX X. XXXXXXXXXX, Trustee
XXXXXXX X. XXXXXXXX TRUST
By: /s/ Xxxxx X. Xxxxxxxxxx
--------------------------------------
XXXXX X. XXXXXXXXXX, Trustee
CPG LUX, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------------
XXXXXXX X. XXXXXXXXX,President
97
WCK LUX, INC.
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------
XXXXX X. XXXXXXXX, President
CPG FRG, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------------
XXXXXXX X. XXXXXXXXX,President
WCK FRG, INC.
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------
XXXXX X. XXXXXXXX, President
/s/ Xxx X. Xxxxx
-----------------------------------------
XXX X. XXXXX
/s/ Xxxxxxx X. Xxxxx
-----------------------------------------
XXXXXXX X. XXXXX
XXXXXXX X. XXXX TRUST, DATED OCTOBER
15, 1996
By: /s/ Xxxxxxx X. Xxxx
--------------------------------------
XXXXXXX X. XXXX, Trustee
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
XXXXXXX X. XXXXXXX
/s/ Xxxxxxx X. Xxxxx
-----------------------------------------
XXXXXXX X. XXXXX
/s/ Xxxx X. Xxxxxxxxx
-----------------------------------------
XXXX X. XXXXXXXXX
98
/s/ Xxxxx X. Xxxxxxxxx
-----------------------------------------
XXXXX X. XXXXXXXXX
/s/ Xxxxx X. Xxxxxx
-----------------------------------------
XXXXX X. XXXXXX
/s/ J. Xxxxx Xxxxx-Xxxxxx
-----------------------------------------
J. XXXXX XXXXX-XXXXXX
/s/ Xxxxx X. Xxxxxxx
-----------------------------------------
XXXXX X. XXXXXXX
99
