EXHIBIT 4.26
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ASSET PURCHASE AGREEMENT
BY AND BETWEEN
XXXXX XXXXXX BUILDING PRODUCTS, INC.
AND
CEMPLANK, INC.
DATED AS OF DECEMBER 12, 2001
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS........................................................... 1
1.1 Definitions.............................................................. 1
1.2 Interpretation........................................................... 7
ARTICLE II SALE AND PURCHASE OF ASSETS; ASSUMPTION OF ASSUMED OBLIGATIONS........ 8
2.1 Purchased Assets......................................................... 8
2.2 Assignment of Contracts.................................................. 9
2.3 Excluded Assets.......................................................... 10
2.4 Assumed Obligations...................................................... 12
2.5 Excluded Obligations..................................................... 12
ARTICLE III PURCHASE PRICE AND PAYMENT............................................ 13
3.1 Payment of Purchase Price................................................ 13
3.2 Closing Date Balance Sheet............................................... 14
3.3 Allocation of Consideration.............................................. 15
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER.............................. 15
4.1 Due Incorporation; Subsidiaries.......................................... 16
4.2 Due Authorization........................................................ 16
4.3 Consents and Approvals; Authority Relative to this Agreement............. 16
4.4 Financial Statements; Undisclosed Liabilities............................ 17
4.5 No Adverse Effects or Changes............................................ 17
4.6 Title to Properties...................................................... 18
4.7 Condition of Assets...................................................... 18
4.8 Real Property............................................................ 18
4.9 Equipment................................................................ 19
4.10 Inventories.............................................................. 19
4.11 Accounts Receivable; Advances............................................ 20
4.12 Intellectual Property.................................................... 20
4.13 Contracts................................................................ 20
4.14 Permits.................................................................. 21
4.15 Insurance................................................................ 21
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TABLE OF CONTENTS
(continued)
PAGE
4.16 Employment and Labor Matters............................................. 21
4.17 Capital Improvements..................................................... 22
4.18 Taxes.................................................................... 22
4.19 No Defaults or Violations................................................ 22
4.20 Environmental Matters.................................................... 23
4.21 Litigation............................................................... 24
4.22 Customers and Suppliers.................................................. 24
4.23 Sufficiency of Assets.................................................... 24
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER........................... 24
5.1 Due Incorporation........................................................ 24
5.2 Due Authorization........................................................ 25
5.3 Consents and Approvals; Authority Relative to this Agreement............. 25
5.4 Litigation............................................................... 25
5.5 Independent Investigation................................................ 26
5.6 Fair Market Value........................................................ 26
5.7 Transaction Structure.................................................... 26
ARTICLE VI COVENANTS............................................................. 26
6.1 Implementing Agreement................................................... 26
6.2 Consents and Approvals................................................... 26
6.3 Trademarks............................................................... 26
6.4 Brokers.................................................................. 27
6.5 Preservation of Books and Records; Access................................ 27
6.6 Employees; Employee Benefit Plans........................................ 28
6.7 Purchaser's Access to Information........................................ 28
6.8 Trademark "Cemplank"..................................................... 28
6.9 Interim Services......................................................... 28
6.10 Confidentiality.......................................................... 28
6.11 Software................................................................. 29
6.12 Access Easement.......................................................... 29
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TABLE OF CONTENTS
(continued)
PAGE
ARTICLE VII CLOSING............................................................... 30
7.1 Closing.................................................................. 30
7.2 Deliveries by Seller..................................................... 30
7.3 Deliveries by Purchaser.................................................. 31
ARTICLE VIII INDEMNIFICATION....................................................... 32
8.1 Survival................................................................. 32
8.2 Indemnification by Seller................................................ 33
8.3 Indemnification by Purchaser............................................. 33
8.4 Limitations on Liability................................................. 33
8.5 Claims .................................................................. 34
8.6 Notice of Third Party Claims; Assumption of Defense...................... 36
8.7 Settlement or Compromise................................................. 37
8.8 Time Limits.............................................................. 37
8.9 Knowledge................................................................ 37
8.10 Net Losses and Subrogation............................................... 37
8.11 Purchase Price Adjustments............................................... 38
ARTICLE IX MISCELLANEOUS......................................................... 38
9.1 Expenses................................................................. 38
9.2 Amendment................................................................ 38
9.3 Notices.................................................................. 38
9.4 Payments in Dollars...................................................... 39
9.5 Waivers.................................................................. 39
9.6 Assignment............................................................... 39
9.7 Third Party Beneficiaries................................................ 40
9.8 Publicity................................................................ 40
9.9 Further Assurances....................................................... 40
9.10 Severability............................................................. .40
9.11 Entire Understanding..................................................... 40
9.12 Language................................................................. 41
9.13 Applicable Law........................................................... 41
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TABLE OF CONTENTS
(continued)
PAGE
9.14 Remittances.............................................................. 41
9.15 Bulk Sales............................................................... 41
9.16 Jurisdiction of Disputes; Waiver of Jury Trial........................... 42
9.17 Schedules................................................................ 42
9.18 Disclaimer of Warranties................................................. 42
9.19 Counterparts............................................................. 42
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EXHIBITS
Exhibit A Assignment and Assumption Agreement
Exhibit B Form of Xxxx of Sale
Exhibit C Form of Guarantee Agreement
Exhibit D Form of Know-How License and Technical Support Agreement
Exhibit E Intentionally Omitted
Exhibit F-1 Form of Opinion of Xxxxx, Xxxxx & Xxxxx
Exhibit F-2 Form of Opinion of Xxxxxxx & Xxx
Exhibit F-3 Form of Opinion of Xxxxxx Xxxxxx
Exhibit G Form of Opinion of Xxxxxx Xxxxx LLP and the form of Opinion
of XxXxxxxx Carano Xxxxxx XxXxxx Xxxxxx Xxxxxxxxxx &
Xxxxx LLP
Exhibit H Form of Special Warranty Deed
Exhibit I Form of Trademark and Patent Assignment
Exhibit J Form of Side Letter
SCHEDULES
Schedule 1.1A Financial Statements
Schedule 1.1B Seller's Knowledge
Schedule 2.1(a) Non-Commercial Real Property
Schedule 2.1(b) Purchased Equipment
Schedule 2.1(f) Owned Intellectual Property
Schedule 2.1(h) Deposits, Rebates, Warranties
Schedule 2.1(i) Vehicles
Schedule 2.2(a) Personal Property Leases
Schedule 2.2(b) Customer Contracts
Schedule 2.2(c) Supply Contracts
Schedule 2.2(d) Intellectual Property Licenses
Schedule 2.2(e) Other Contracts
Schedule 2.3(o) Other Excluded Assets
Schedule 2.4(e) Other Assumed Liabilities
Schedule 3.2 Closing Date Balance Sheet Principles
Schedule 4.1 Foreign Qualifications; Subsidiaries
Schedule 4.3 Consents and Approvals; Authority
Schedule 4.4 Financial Statements; Undisclosed Liabilities
Schedule 4.5 Adverse Effects or Changes
Schedule 4.6 Title to Properties
Schedule 4.7 Condition of Assets
Schedule 4.8(a) Excluded Real Property
Schedule 4.8(b) Non-Commercial Real Property
Schedule 4.9 Equipment
Schedule 4.10 Inventories
Schedule 4.11 Accounts Receivable
Schedule 4.12 Intellectual Property
Schedule 4.13 Contracts
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Schedule 4.14 Permits
Schedule 4.15 Insurance
Schedule 4.16 Employment and Labor Matters
Schedule 4.17 Capital Improvements
Schedule 4.19 No Defaults or Violations
Schedule 4.20 Environmental Matters
Schedule 4.20(b) Environmental Permits
Schedule 4.21 Litigation
Schedule 4.22 Customers and Suppliers
Schedule 5.3 Consents and Approvals; Authority
Schedule 5.7 Transaction Structure
Schedule 8.2 Severance Agreements
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made as of the 12th day of December,
2001, by and between XXXXX XXXXXX BUILDING PRODUCTS, INC., a corporation
organized under the laws of the State of Nevada ("Purchaser"), and Cemplank,
Inc., a corporation formed under the laws of the Commonwealth of Pennsylvania
("Seller"). Certain capitalized terms used herein are defined in Article I.
W I T N E S S E T H:
WHEREAS, Purchaser wishes to purchase from Seller, and Seller wishes to
sell to Purchaser, all of the Purchased Assets, and Purchaser desires to assume
from Seller, and Seller desires to assign to Purchaser, all of the Assumed
Obligations, all upon the terms and subject to the conditions contained herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained,
Purchaser and Seller agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. The following terms shall have the following meanings for
the purposes of this Agreement:
"Accounting Firm" shall have the meaning set forth in Section 3.2(b).
"Accounts Receivable" shall have the meaning set forth in Section 2.1(d).
"Affiliate" shall mean, with respect to any specified Person, any other
Person which, directly or indirectly, controls, is under common control with, or
is controlled by, such specified Person. The term "control" as used in the
preceding sentence means, with respect to a corporation, the right to exercise,
directly or indirectly, 50% or more of the voting rights attributable to the
shares of such corporation, or with respect to any Person other than a
corporation, the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person.
"Agreement" shall mean this Asset Purchase Agreement, including all
Exhibits and Schedules hereto, as it may be amended, modified or supplemented
from time to time in accordance with its terms.
"Asset Acquisition Statement" shall have the meaning set forth in Section
3.3(a).
"Assets" shall mean the Purchased Assets and the Leased Assets.
"Assignment and Assumption Agreement" shall mean an assignment and
assumption agreement between Purchaser and Seller to be executed and delivered
at the Closing and in the form attached hereto as Exhibit A.
"Assumed Obligations" shall have the meaning set forth in Section 2.4,
except that any reference to "Assumed Obligations as of June 30, 2001" shall
mean all liabilities of Seller that would fall within the definition of Assumed
Obligations had the Closing occurred on June 30, 2001.
"Xxxx of Sale" shall mean a xxxx of sale of Seller to be executed and
delivered at the Closing and in the form attached hereto as Exhibit B.
"Business" means all of the business and operations of Seller in Blandon,
Pennsylvania and Summerville, South Carolina, which relate to the manufacture,
sale, distribution and export of Products (as defined in the Know-How License
and Technical Support Agreement) by Seller.
"Business Day" shall mean any day of the year other than (i) any Saturday
or Sunday or (ii) any other day on which banks located in London, England or New
York, New York generally are closed for business.
"Closing" shall mean the consummation of the transactions contemplated
herein in accordance with Article VII.
"Closing Date" shall mean the date hereof.
"Closing Date Balance Sheet" shall have the meaning set forth in Section
3.2(a).
"Code" shall mean the United States Internal Revenue Code of 1986, as
amended.
"Contract" shall mean any contract, lease, sales order, purchase order,
agreement, indenture, mortgage, note, bond, warrant or instrument.
"Conversion Agreement" shall mean the Agreement as to Conversion of FILOT
Lease to FILOT Contracts and Assignment and Assumption of FILOT Contract entered
into as of December 11, 2001 by and among Purchaser, Seller and Dorchester
County, a body politic and corporate and subdivision of the State of South
Carolina.
"Customer Contract" shall have the meaning set forth in Section 2.2(b).
"Dollars" or numbers preceded by the symbol "$" shall mean amounts in
United States Dollars.
"Enforceability Limitations" shall have the meaning set forth in Section
4.2.
"Environmental Claim" shall mean any claim, demand, cause of action,
judgment or litigation made or brought against Seller relating to the violation
of any Environmental Law or Environmental Permit relating to the ownership or
use of the Purchased Assets (including the Non-Commercial Real Property) or the
Excluded Real Property based on facts or events occurring prior to the Closing
Date.
"Environmental Law" shall mean any Law, each as in effect on the date
hereof, that imposes liability or standards of conduct concerning discharges,
emissions, releases or
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threatened releases of noises, odors or any Hazardous Substances, whether as
matter or energy, into ambient air, water or land (including into surface water,
ground water, wetlands, landfills, drinking water, storage tanks, underground
storage tanks, solid waste, waste water, storm water runoff, waste emissions or
xxxxx or open dumps), as well as, any Law governing pollution and protection of
the environment, or otherwise relating to the presence, manufacture, labeling,
testing, processing, discharge, release, threatened release, control or
processing, generation, distribution, use, treatment, storage, disposal,
investigation, cleanup, transport or handling of Hazardous Substances, or any
other wastes, chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls or radiation, including the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, the
Superfund Amendments and Reauthorization Act of 1986, as amended, the Resource
Conservation and Recovery Act of 1976, as amended, the Toxic Substances Control
Act of 1976, as amended, the Federal Water Pollution Control Act Amendments of
1972, as amended, the Clean Water Act of 1977, as amended, and any so-called
"Superfund" or "Superlien" Law (including those already referenced in this
definition).
"Environmental Permit" shall mean any Permit required by or pursuant to
any applicable Environmental Law.
"Environmental Warranty" shall mean a representation or warranty in
Section 4.20.
"Equipment" shall have the meaning set forth in Section 2.1(b).
"Eureka Agreement" shall mean that certain Trademark License Agreement
dated May 21, 1997 by and between Seller (formerly known as F.C.P., Inc.) and
Eureka S.A. de C.V.
"Excluded Assets" shall have the meaning set forth in Section 2.3.
"Excluded Obligations" shall have the meaning set forth in Section 2.5.
"Excluded Real Property" shall mean the parcels of land set forth on
Schedule 4.8 (other than the Non-Commercial Real Property) together with any and
all privileges and easements appurtenant thereto and all buildings and other
structures and improvements (other than the Equipment) situated or located
thereon or attached thereto which were owned and used by Seller prior to the
Closing Date in the operation of the Business and are being leased to Purchaser
concurrently with the Closing.
"Excluded Technology" shall have the meaning set forth in the Know-How
License and Technical Support Agreement.
"FILOT Lease" shall mean that certain Lease Purchase Agreement dated
December 31, 2000 between Dorchester County, South Carolina and Seller, as the
same may be amended or modified from time to time.
"Financial Statements" shall mean the audited financial statements of
Seller as of December 31, 2000 and the unaudited financial statements of Seller
as of June 30, 2001, all of which are included in Schedule 1.1 A, consisting of
the balance sheets at such dates and the
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related statements of earnings and retained earnings and cash flows for the
periods ended on such dates.
"Governmental Authority" shall mean the government of the United States or
any foreign country or any state or political subdivision thereof or any entity,
body or authority exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guarantee Agreement" shall mean a guarantee agreement between
International Building Materials, S.A. and Purchaser to be executed and
delivered at the Closing and in the form attached as Exhibit C.
"Hazardous Substances" shall mean all toxic, explosive or radioactive
substances or wastes, petroleum or petroleum distillates, asbestos or
asbestos-containing materials, polychlorinated biphenyls, and any of the
following: (i) any 'hazardous substances,' as defined under the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Sections 9601
et seq.; (ii) any 'extremely hazardous substance,' 'hazardous chemical' or
'toxic chemical,' each as defined under the Emergency Planning and Community
Right-to-Know Act, 42 U.S.C. Sections 11001 et seq.; (iii) any 'hazardous
waste,' as defined under the Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901 et seq.; (iv)
any 'pollutant,' as defined under the Clean Water Act, 33 U.S.C. Sections 1251
et seq.; (v) any 'hazardous materials' as defined in the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801 et seq., as amended, and regulations
promulgated thereunder; (vi) any 'chemical substance or mixture' as defined in
the Toxic Substances Control Act, 15 U.S.C. Section 2061 et seq., as amended,
and regulations promulgated thereunder and (vii) any regulated substance or
waste under any Environmental Law.
"Indemnified Person" shall mean the Person or Persons entitled to, or
claiming a right to, indemnification under Article VIII.
"Indemnifying Person" shall mean the Person or Persons claimed by the
Indemnified Person to be obligated to provide indemnification under Article
VIII.
"Information and Records" shall have the meaning set forth in Section
2.1(e).
"Intellectual Property" shall mean all United States and foreign patents
(including continuations, continuations-in-part, reissues and re-examinations
thereof) and patent applications; registered and unregistered trade names,
trademarks, service names and service marks (and applications for registration
of the same); copyrights and copyright registrations (and applications for the
same); and domain names and all applications therefor.
"Intellectual Property Licenses" shall have the meaning set forth in
Section 2.2(d).
"Inventory" shall have the meaning set forth in Section 2.1(c).
"June 30 Balance Sheet" shall have the meaning set forth in Section
3.2(a).
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"Know-How" shall have the meaning set forth in the Know-How License and
Technical Support Agreement.
"Know-How License and Technical Support Agreement" shall mean the know-how
license and technical support agreement among Seller, Redco S.A., Xxxxxxx X.X.
and Purchaser to be executed and delivered at the Closing and in the form
attached hereto as Exhibit D.
"Know-How Warranties" shall mean the representations and warranties made
by Redco S.A., Xxxxxxx X.X. and/or Seller in the Know-How License and Technical
Support Agreement.
"Law" shall mean any law, statute, regulation, ordinance, rule, order,
decree, judgment, decision or governmental requirement enacted, promulgated or
imposed by any Governmental Authority.
"Leased Assets" shall mean all assets leased to Seller pursuant to any of
the Personal Property Leases.
"Liability" shall mean any debt, claim, obligation or liability (whether
known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due).
"Licensed Intellectual Property" shall have the meaning set forth in
Section 4.12.
"Lien" shall mean any lien (except for any lien for Taxes not yet due and
payable), mortgage, pledge, security interest or other encumbrance.
"Loss" or "Losses" shall mean any and all losses, liabilities, costs,
claims, damages and expenses, and shall also include Losses actually suffered by
Purchaser as a result of the successful prosecution of a claim by the purchaser
of all or substantially all of the assets of Purchaser arising from a breach of
or inaccuracy in any of the representations or warranties set forth herein or in
any Related Agreement.
"Major Customer" shall have the meaning set forth in Section 4.22(a)(i).
"Major Supplier" shall have the meaning set forth in Section 4.22(a)(ii).
"Net Book Value Deficiency" shall mean (a) the amount (if any) by which
the Purchased Assets less the Assumed Obligations (the "Net Acquired Assets"),
as shown on the Closing Date Balance Sheet, is less than (b) the Net Acquired
Assets as shown in the June 30 Balance Sheet.
"Net Book Value Excess" shall mean (a) the amount (if any) by which the
Net Acquired Assets, as shown on the Closing Date Balance Sheet, is greater than
(b) the Net Acquired Assets as shown in the June 30 Balance Sheet.
"Non-Commercial Real Property" shall mean those parcels of land set forth
and identified as such on Schedule 2.1(a) together with any and all
privileges and easements appurtenant thereto and all buildings, facilities,
installations and other structures, improvements, and fixtures situated or
located thereon or attached thereto.
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"Ordinary Course of Business" shall mean the conduct of the Business by
Seller in the ordinary course and as established over the two years prior to the
Closing Date.
"Owned Intellectual Property" shall have the meaning set forth in Section
2.1(f).
"Parties" shall mean Seller and Purchaser, each individually referred to
herein as a "Party."
"Permit" shall mean any permit, license, approval or other authorization
required or granted by any Governmental Authority for any and all aspects of the
operations of the Business.
"Permitted Liens" shall mean (i) Liens for Taxes that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
for which adequate reserves have been established in accordance with U.S. GAAP;
(ii) workers', mechanics', materialmen's, repairmen's, suppliers', carriers' or
similar Liens (a) arising in the Ordinary Course of Business with respect to
obligations that are not yet delinquent or (b) that are being contested in good
faith by appropriate proceedings and, in the case of clause (b), for which
adequate reserves have been established in accordance with U.S. GAAP; and (iii)
those Liens set forth in Schedule 4.6 and designated as "Permitted Liens".
"Person" shall mean any individual, corporation, proprietorship, firm,
partnership, limited partnership, limited liability company, trust, association
or other entity.
"Personal Property Lease" shall have the meaning set forth in Section
2.2(a).
"Product Support" shall have the meaning set forth in Section 2.4(c).
"Purchase Price" shall mean (i) the amount payable by Purchaser under
Section 3.1(b), less (ii) any amount payable by Seller under Section 3.1(c)(i).
plus (iii) any amount payable by Purchaser under Section 3.1(c)(ii).
"Purchased Assets" shall have the meaning set forth in Section 2.1, except
that any reference to the "Purchased Assets as of June 30, 2001" shall mean all
assets of Seller that would fall within the definition Purchased Assets had the
Closing occurred on June 30, 2001.
"Purchased Contracts" shall have the meaning set forth in Section 2.2.
"Purchaser" shall have the meaning set forth in the preamble to this
Agreement.
"Purchaser's Employees" shall have the meaning set forth in Section 6.6.
"Real Property" means the Excluded Real Property and the Non-Commercial
Real Property.
"Related Agreements" shall mean the Assignment and Assumption Agreement,
Xxxx of Sale, Guarantee Agreement, Know-How License and Technical Support
Agreement, Side Letter and all exhibits, schedules, instruments and other
documents attached thereto or contemplated
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thereby. The Related Agreements executed by a specified Person shall be referred
to as "such Person's Related Agreements," "its Related Agreements" or another
similar expression.
"Seller" shall have the meaning set forth in the preamble to this
Agreement.
"Seller's knowledge", or any similar expression with regard to the
knowledge or awareness of or receipt of notice by Seller, means the actual,
direct and personal knowledge, which was or would have been obtained after
reasonable inquiry, of any of the Persons listed in Schedule 1.1B.
"Side Letter" shall mean a side letter agreement between Purchaser and
International Building Materials, S.A. to be executed and delivered at the
Closing and in the form attached hereto as Exhibit J.
"Supply Contract" shall have the meaning set forth in Section 2.2(c).
"Tax Return" shall mean any report, return or other information required
to be supplied to a Governmental Authority in connection with any Taxes.
"Tax Statute of Limitations Date" shall mean the close of business on the
45th day after the expiration of the applicable statute of limitations with
respect to Taxes, including any extensions thereof (or if such date is not a
Business Day, the next Business Day).
"Tax Warranty" shall mean a representation or warranty in Section 4.18.
"Taxes" shall mean all taxes, charges, fees, duties, levies or other
assessments (including income, gross receipts, net proceeds, ad valorem,
turnover, real and personal property (tangible and intangible), sales, use,
franchise, excise, goods and services, value added, stamp, user, transfer, fuel,
excess profits, occupational, interest equalization, windfall profits,
severance, payroll, unemployment and Social Security taxes) which are imposed by
any Governmental Authority, and such term shall include any interest, penalties
or additions to tax attributable thereto.
"Title and Authorization Warranty" shall mean a representation or warranty
contained in Section 4.1(a), 4.2, 5.1, 5.2 or 5.5 or the first sentence of
Section 4.6 hereof.
"Transferable Permit" shall have the meaning provided in Section 2.2.
"U.S. GAAP" shall mean United States generally accepted accounting
principles at the time in effect.
1.2 Interpretation. The headings preceding the text of Articles and
Sections included in this Agreement and the headings to Schedules attached to
this Agreement are for convenience only and shall not be deemed part of this
Agreement or be given any effect in interpreting this Agreement. The use of the
masculine, feminine or neuter gender or the singular or plural form of words
herein shall not limit any provision of this Agreement. The use of the terms
"including" or "include" shall in all cases herein mean "including, without
limitation" or "include, without limitation," respectively. Reference to any
Person includes such Person's
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successors and assigns to the extent such successors and assigns are permitted
by the terms of any applicable agreement, and reference to a Person in a
particular capacity excludes such Person in any other capacity or individually.
Reference to any agreement (including this Agreement), document or instrument
means such agreement, document or instrument as amended or modified and in
effect from time to time in accordance with the terms thereof and, if
applicable, the terms hereof. Underscored references to Articles, Sections,
paragraphs, clauses, Exhibits or Schedules shall refer to those portions of this
Agreement. The use of the terms "hereunder," "hereof," "hereto" and words of
similar import shall refer to this Agreement as a whole and not to any
particular Article, Section, paragraph or clause of, or Exhibit or Schedule to,
this Agreement. In the event of a direct conflict in the terms of this Agreement
and any of the Related Agreements, the terms of this Agreement shall control.
ARTICLE II
SALE AND PURCHASE OF ASSETS; ASSUMPTION OF ASSUMED OBLIGATIONS
2.1 Purchased Assets. Except as provided in Section 2.3 and subject to the
other terms and conditions of this Agreement and the Related Agreements, at the
Closing, Seller shall sell, assign, convey, transfer and deliver to Purchaser,
and Purchaser shall purchase and acquire from Seller and take assignment and
delivery from Seller of, all of Seller's right, title and interest in and to all
of the assets, rights and Business of Seller as a going concern as of the
Closing Date, of whatever kind or nature and wherever situated or located and
whether reflected on Seller's books and records or previously written-off or
otherwise not reflected on such books and records, in each case, that are owned
by Seller, including the following:
(a) Non-Commercial Real Property. All Non-Commercial Real Property;
(b) Equipment. All equipment, machinery, appliances, furniture,
draperies and curtains, computer hardware, tools, spare parts and other
items of tangible personal property (including any of the foregoing which
has been fully depreciated), other than the Inventory (collectively, the
"Equipment"), including the Equipment listed on Schedule 2.1(b);
(c) Inventory. All inventory, including materials and raw materials,
work in progress, finished goods, service parts and supplies and parts
which have historically been expensed or have not been valued on Seller's
books and records, supplies, and other inventories as of the Closing Date
(collectively, the "Inventory");
(d) Accounts Receivable. All accounts receivable, trade receivables,
notes receivable and other receivables which are payable as a result of
goods sold or services provided (or which will be sold or provided) by
Seller prior to the Closing ("Accounts Receivable");
(e) Information and Records. All books, records, files, databases,
plans, specifications, blueprints, repair and operating manuals, warranty
and maintenance records, information regarding assessments, copies of
information regarding insurance, marketing and promotional material,
technical information, price lists, sales records,
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copies of plans and designs of buildings and structures, plans and designs
of fixtures and equipment, copies of Real Property records and
environmental control and monitoring records, customer and prospective
customer lists, customer records and information, drawings, accounts
receivable and payable records, maintenance and asset history records,
ledgers, registers, books of original entry, OSHA and EPA files and
records of Seller pertaining to the Business, and copies of any and all
non-confidential documents, correspondence or materials relating to the
Excluded Obligations and Excluded Assets (collectively, the "Information
and Records"); provided that Seller shall be entitled to retain copies of
the Information and Records delivered to Purchaser hereunder; provided
further that Seller shall retain the original information regarding
insurance and shall provide copies to Purchaser;
(f) Intellectual Property. All Intellectual Property, including the
Intellectual Property listed on Schedule 2.1(f) (collectively, the "Owned
Intellectual Property"), and all goodwill associated with such Owned
Intellectual Property.
(g) Goodwill. All customer relationships of Seller and related
goodwill as a going concern and other intangible personal property
relating to the Business, to the extent transferable;
(h) Deposits, Rebates and Warranties. Deposits, rebates, warranties
and rights with respect thereto, including all of Seller's prepaid
expenses, credit memoranda, warranties and deposits relating to the
Business, including those listed on Schedule 2.1(h), except as described
in Section 2.3(a);
(i) Orders. All records of sale orders, quotations and bids;
(j) Vehicles. All vehicles used in the Business, including those
vehicles described on Schedule 2.1(j); and
(k) Other Assets. All other assets pertaining to the Business.
All of the foregoing assets described in this Section 2.1, together with the
Transferable Permits and the Purchased Contracts, but excluding the Excluded
Assets, are referred to herein collectively as the "Purchased Assets."
2.2 Assignment of Contracts. Except as provided in Section 2.3 and subject
to the other terms and conditions of this Agreement and the terms of the
Assignment and Assumption Agreement, at the Closing, Seller shall assign and
transfer to Purchaser, and Purchaser shall take assignment of, all of Seller's
title, right and interest in and to the Permits held by Seller, to the extent
such Permits are transferable (collectively, the "Transferable Permits"), and
the Contracts to which Seller is a party, which are listed below:
(a) Personal Property Leases. The leases to or by Seller of personal
property listed on Schedule 2.2(a) (collectively, the "Personal Property
Leases");
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(b) Customer Contracts. The sale orders and other Contracts for the
provision by Seller of goods or services to customers listed on Schedule
2.2(b) (collectively, the "Customer Contracts");
(c) Supply Contracts. The purchase orders and other Contracts for
the purchase by Seller of goods or services listed on Schedule 2.2(c)
(collectively, the "Supply Contracts");
(d) Intellectual Property Licenses. The agreements for the license
to or by Seller of any Intellectual Property or software listed on
Schedule 2.2(d) (collectively, the "Intellectual Property Licenses"); and
(e) Other Contracts. The other Contracts to which Seller is a party
listed on Schedule 2.2(e).
All of the foregoing Contracts, excluding Excluded Assets, are referred to
herein collectively as the "Purchased Contracts." Anything in this Agreement to
the contrary notwithstanding, this Agreement shall not constitute an agreement
to assign or transfer any Contract or any claim or right or any benefit or
obligation thereunder or resulting therefrom if an assignment or transfer
thereof, without the consent of a third party thereto, would constitute a breach
or violation thereof or impose any obligation or liability on Seller and if such
a consent is not obtained at or prior to the Closing, in which case Section 6.2
shall apply.
2.3 Excluded Assets. Notwithstanding the provisions of Sections 2.1 and
2.2, Seller shall not sell, assign, convey, transfer or deliver to Purchaser,
and Purchaser shall not purchase, acquire or take assignment or delivery of, any
of the following assets or rights, or any right, title or interest of Seller
therein (collectively, the "Excluded Assets"):
(a) Cash. All cash, certificates of deposit, bank deposits,
negotiable instruments, marketable securities and other cash equivalents,
together with all accrued but unpaid interest thereon;
(b) Etex Name. Any Internet domain names, logos, trade names, trade
marks, service names or service marks containing the name "Etex" and any
variations or derivations thereof, and all goodwill associated therewith;
(c) Tax Refunds. All claims for and rights to receive Tax refunds,
all Tax Returns, and all notes, worksheets, files or documents relating
thereto;
(d) Claims. All claims, causes of action rights of recovery, defense
or counterclaim and rights of set-off of any kind (including rights under
and pursuant to all warranties, representations and guarantees made by
suppliers of products, materials or equipment or components thereof)
relating to any Excluded Obligations;
(e) Corporate Records. The minute books from the meetings (or
consents in lieu thereof) of the board of directors and stockholders of
Seller and the stock ownership records of Seller;
10
(f) Employee Records. All personnel, employee compensation and
benefits and labor relations records relating to employees of Seller;
provided, however, that Seller shall deliver to Purchaser all such records
that relate to Purchaser's Employees, and may retain copies of such
records as it deems appropriate;
(g) Excluded Books and Records. All books and records that relate
primarily to Excluded Assets or Excluded Obligations;
(h) Sale Documents. All books and records prepared in connection
with the sale of Seller and/or its business and assets, including offers
received from prospective purchasers and any information relating to such
offers;
(i) Debt Agreements and Guarantees. All rights of Seller under the
following Contracts, and all Contracts and other documents executed and
delivered in connection therewith:
(i) Revolving Credit Facility dated March 12, 1997 between
International Building Materials, S.A. and Seller (formerly known as
F.C.P., Inc.); and
(ii) Accession Letter and Accession Deed each dated April 11,
2001 from Seller and Etex Group S.A. to Deutsche Bank AG London as Agent
for certain lenders under a Facility Agreement dated 21 January 2001, as
amended by a Syndication Agreement dated 14 March 2001, and the related
Letter of Support dated March 5, 2001 from Eterco S.A. to Seller and
certain other subsidiaries of Etex Group S.A.;
(j) This Agreement. All rights of Seller under this Agreement and
the Related Agreements;
(k) Insurance. All rights of Seller under insurance policies;
provided that Purchaser shall be entitled to the proceeds received by
Seller under insurance policies to the extent that such proceeds relate to
losses that arise with respect to Purchased Assets or Assumed Obligations,
due to events occurring before the Closing Date;
(l) Non-Transferable Permits. All Permits that are held by Seller to
the extent such Permits are not transferable;
(m) Real Property. All right, title and interest in and to the
Excluded Real Property;
(n) Know-How. All Know-How and all right, title and interest in and
to the Excluded Technology; and
(o) Other Excluded Assets. All right, title and interest in and to
the FILOT Lease and all Personal Property Leases, Customer Contracts,
Supply Contracts, Intellectual Property Licenses and other Contracts other
than those listed in Section 2.2, and all assets of Seller listed on
Schedule 2.3(o).
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None of the Excluded Assets shall be included in the term "Purchased Assets" or
"Purchased Contracts" or any other term defined in Section 2.1 or 2.2.
2.4 Assumed Obligations. Except as provided in Section 2.5, at the Closing
Purchaser shall assume, and agree to pay, perform, fulfill and discharge when
due the following (collectively, excluding the Excluded Obligations, the
"Assumed Obligations"):
(a) Closing Date Balance Sheet. The Liabilities set forth, and to
the extent provided for, in the Closing Date Balance Sheet;
(b) Purchased Contracts. The Liabilities of Seller under the
Purchased Contracts (but not any Liabilities of Seller in respect of a
breach of or default under such Purchased Contracts arising prior to
Closing);
(c) Product Support. The obligations and commitments under
warranties with respect to products and services of the Business
manufactured, performed, sold, distributed or rented prior to the Closing
by Seller, to the extent provided for in the Closing Date Balance Sheet
(collectively "Product Support");
(d) Environmental Claims. The Liabilities relating to any
Environmental Claims up to an aggregate amount of $550,000; and
(e) Scheduled Liabilities. The other Liabilities set forth on
Schedule 2.4(e).
2.5 Excluded Obligations. Notwithstanding anything in this Agreement or
any of the Related Agreements to the contrary, except as specifically set forth
in Section 2.4, neither Purchaser nor any of its Affiliates, agents,
representatives, independent contractors or employees shall assume or otherwise
be liable in respect of, or be deemed to have assumed or otherwise be liable in
respect of, any Liability of Seller or any of its Affiliates whatsoever that
arose, arises, or will manifest itself at any time (collectively, the "Excluded
Obligations"), including:
(a) Taxes. Except as provided in Section 9.1, all obligations for
Taxes of, or pertaining or attributable to, (i) Seller or its Affiliates
for any period that ends on or before, and includes, the Closing Date, or
(ii) the Purchased Assets for any period or portion of a period that ends
on or before the Closing Date. Such obligations include all Taxes
described in clauses (i) and (ii) of this Section 2.5(a) for which
liability is or may be sought to be imposed on Purchaser under any
successor liability, transferee liability or similar provision of any
applicable federal, foreign, state or local law;
(b) Liability Under Agreement. Any Liability of Seller or Seller's
Affiliates under this Agreement or any of the Related Agreements, and any
Liability of Seller or Seller's Affiliates arising out of the breach of
this Agreement or the Related Agreements;
(c) Fees. All fees unrelated to the Business owing to Governmental
Authorities that are attributable to Seller or Seller's business
activities after the Closing Date and Seller's Affiliates;
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(d) Fees and Expenses Related to Agreement. Any Liabilities for
legal, accounting, audit and investment banking fees, brokerage
commissions and any other expenses incurred by Seller in connection with
the negotiation and preparation of this Agreement, the Related Agreements
and the acquisition of the assets by Purchaser contemplated hereby;
(e) Insurance Policies. Any Liabilities under those insurance
policies which are not assigned to Purchaser pursuant to the provisions of
this Agreement, together with any Liabilities for retroactive or similar
insurance premium adjustments under those policies;
(f) Employees. (i) Liabilities relating to, or involving, any of
Seller's employees, independent individual contractors, individual agents
or individual representatives for any matter, claim, dispute, allegation
or action arising prior to the Closing Date; (ii) Liabilities under
collective bargaining agreements pertaining to Seller's employees; (iii)
Liabilities to pay severance benefits (including the severance agreements
entered into between Seller and the individuals listed on Schedule
8.2(c)), salaries, wages, bonuses, vacation pay and other compensation
which are owed by Seller to Seller's employees as of the Closing Date or
any such Liabilities owing to Seller's employees for their services prior
to the Closing Date and (iv) Liabilities arising out of or in connection
with Seller's employee welfare, pension and profit sharing plans; and
(g) Any Liabilities under or related to the Contracts referenced in
Section 2.3(i).
ARTICLE III
PURCHASE PRICE AND PAYMENT
3.1 Payment of Purchase Price.
(a) The total consideration for the Purchased Assets shall consist
of (i) the assumption by Purchaser of the Assumed Obligations, and (ii)
the payment of the Purchase Price in accordance with this Section 3.1.
(b) At the Closing, Purchaser shall pay to Seller $39 million.
(c) Within three (3) Business Days after the date that the Closing
Date Balance Sheet and June 30 Balance Sheet become final and binding in
accordance with Section 3.2, (i) if there is a Net Book Value Deficiency,
Seller shall pay to Purchaser the amount of the Net Book Value Deficiency,
and (ii) if there is a Net Book Value Excess, Purchaser shall pay to
Seller the amount of the Net Book Value Excess, which amount in either
case shall be payable together with interest thereon from the Closing Date
until the date paid calculated using simple interest and the 10-year bond
rate as of the date hereof from Bloomberg U.S. Treasury Reports.
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(d) All payments made hereunder shall be made in accordance with
Section 9.4 and to such account or accounts as the receiving party shall
designate in writing to the paying party.
3.2 Closing Date Balance Sheet.
(a) Within sixty (60) days after the Closing Date, Purchaser shall
(i) prepare (x) a balance sheet for the Purchased Assets and Assumed
Obligations as of the Closing Date (the "Closing Date Balance Sheet"), and
(y) a balance sheet for the Purchased Assets and Assumed Obligations as of
June 30, 2001, which shall be derived from the Purchased Assets and
Assumed Obligations set forth in the unaudited balance sheet of Seller,
dated as of June 30, 2001, a copy of which is included in the Financial
Statements (the "June 30 Balance Sheet"), (ii) cause KPMG LLP to audit the
Closing Date Balance Sheet and the June 30 Balance Sheet and (iii) deliver
a copy of each of the Closing Date Balance Sheet and the June 30 Balance
Sheet to Seller. Each of the Closing Date Balance Sheet and the June 30
Balance Sheet shall be prepared in accordance with U.S. GAAP on a basis
consistent with accounting principles, practices and procedures used by
Seller in the preparation of the balance sheets included in the Financial
Statements as more fully set forth in Schedule 3.2, as modified by the
exceptions to the accounting principles, practices and procedures set
forth on Schedule 3.2. The audited Closing Date Balance Sheet and the
audited June 30 Balance Sheet delivered pursuant to this Section 3.2(a)
shall be accompanied by a statement setting forth Purchaser's
determination of any Net Book Value Excess or any Net Book Value
Deficiency. Promptly upon Seller's request, Purchaser shall make available
to Seller copies of the work papers and back-up materials used by
Purchaser in preparing the Closing Date Balance Sheet and such other
documents as Seller may reasonably request in connection with its review
of the Closing Date Balance Sheet and June 30 Balance Sheet. Purchaser and
Seller shall each pay one-half of the fees and expenses of KPMG LLP to
audit the Closing Date Balance Sheet and the June 30 Balance Sheet.
(b) Within thirty (30) days after receipt of the audited Closing
Date Balance Sheet and audited June 30 Balance Sheet, Seller shall deliver
to Purchaser a written statement describing its objections (if any) to the
Closing Date Balance Sheet and June 30 Balance Sheet and Purchaser's
determination of the Net Book Value Excess or Net Book Value Deficiency.
If Seller does not so raise any objections in a written statement to
Purchaser within such thirty-day period, the Closing Date Balance Sheet
and June 30 Balance Sheet shall become final and binding upon all parties.
If Seller does so raise objections in a written statement to Purchaser
within such thirty-day period, and the parties cannot resolve such
objections within ten (10) Business Days after the receipt by Purchaser of
such written statement, any remaining disputes shall be resolved by Xxxxxx
Xxxxxxxx LLP or another nationally recognized independent accounting firm
mutually agreeable to Purchaser and Seller (the "Accounting Firm"). The
Accounting Firm shall be instructed to resolve such disputes within thirty
(30) days after its appointment. The resolution of disputes by the
Accounting Firm shall be set forth in writing and shall be conclusive and
binding upon all parties and the Closing Date Balance Sheet and June 30
Balance Sheet, as modified by such resolution, shall become final and
binding upon the date of such resolution and shall be used to determine
the final amount of any Net Book
14
Value Excess or Net Book Value Deficiency. The fees and expenses of the
Accounting Firm shall be apportioned between the parties by the Accounting
Firm based on the degree to which each party's claims were unsuccessful
and shall be paid by the parties in accordance with such determination.
For example, if pursuant to this Section 3.2(b) Seller submitted an
objection affecting the Purchase Price in the amount of $100,000 and
prevailed as to $45,000 of such amount, then Seller would bear fifty-five
percent (55%) of the fees and expenses of the Accounting Firm.
3.3 Allocation of Consideration.
(a) Within 60 days after the Closing Date, Purchaser will provide to
Seller copies of Internal Revenue Service Form 8594 and all other related
documents the Code and applicable United States Treasury regulations
require (the "Asset Acquisition Statement") with Purchaser's proposed
allocation of the Purchase Price (together with any Assumed Obligations),
such allocation to be made in accordance with the Code and applicable
United States Treasury regulations. Within 15 days after the receipt of
such Asset Acquisition Statement, Seller will propose to Purchaser any
changes to such Asset Acquisition Statement. If Seller proposes no such
changes in writing to Purchaser within that 15-day period, Seller will
have agreed to, and accepted, the Asset Acquisition Statement. Purchaser
and Seller will try to resolve any differences with respect to the Asset
Acquisition Statement within 15 days after Purchaser's receipt of written
notice of objection from Seller.
(b) If Seller withholds its consent to the allocation shown in the
Asset Acquisition Statement, and Purchaser and Seller have acted in good
faith to resolve any differences with respect to items on the Asset
Acquisition Statement and are unable to resolve any differences, then the
Accounting Firm will conclusively resolve any remaining disputed matters.
The Accounting Firm shall be instructed to resolve such disputes within
thirty (30) days after its receipt of the information necessary to make
such a determination. No later than 30 days after its receipt of the
information necessary to make such a determination, the Accounting Firm
shall determine (based solely on presentations by Seller and Purchaser and
not by independent review) only those matters in dispute and will issue a
written report about the disputed matters and the resulting allocation of
Purchase Price (together with any Assumed Obligations). The report shall
be conclusive and binding upon the Purchaser and Seller. Subject to the
requirements of any applicable tax law or election, Purchaser and Seller
shall file all Tax Returns and reports consistently with the allocation
provided in the Asset Acquisition Statement or, if applicable, the
determination of the Accounting Firm. Seller and Purchaser shall share
equally the fees charged by and expenses of the Accounting Firm. Any
adjustment to the Purchase Price (together with Assumed Obligations) shall
be allocated in accordance with the Code and applicable United States
Treasury regulations.
ARTICLE TV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser as follows:
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4.1 Due Incorporation; Subsidiaries.
(a) Seller is a corporation duly incorporated under the laws of the
Commonwealth of Pennsylvania. Seller is validly existing and in good
standing under the laws of the Commonwealth of Pennsylvania, with all
requisite corporate power and authority to own the Purchased Assets, lease
the Leased Assets and operate the Assets and to conduct its business as
they are now being owned, leased, operated and conducted.
(b) Seller is licensed or qualified to do business and is in good
standing as a foreign corporation in each jurisdiction where the nature of
the Assets or Seller's conduct of its business requires such licensing or
qualification and in which the failure to be so licensed or qualified
would be material. Such jurisdictions are listed in Schedule 4.1.
(c) Except as set forth in Schedule 4.1, Seller does not directly or
indirectly own any shares of capital stock or any other equity interest in
any Person.
4.2 Due Authorization. Seller has all requisite corporate power and
authority to enter into this Agreement and its Related Agreements and to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance by Seller of this Agreement and its Related Agreements,
and the consummation by Seller of the transactions contemplated hereby and
thereby, have been duly and validly approved by Seller and no other corporate
actions or proceedings on the part of Seller are necessary to authorize this
Agreement, its Related Agreements and the transactions contemplated hereby and
thereby. Seller has duly and validly executed and delivered this Agreement and
has duly and validly executed and delivered (or prior to or at the Closing will
duly and validly execute and deliver) its Related Agreements. Assuming due
authorization, execution and delivery of this Agreement and its Related
Agreements by the other parties hereto and thereto, this Agreement constitutes a
legal, valid and binding obligation of Seller, and each of its Related
Agreements constitute (or upon execution and delivery by Seller will constitute)
legal, valid and binding obligations of Seller, in each case, enforceable in
accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws in effect that affect the enforcement of creditors' rights
generally and by equitable limitations on the availability of specific remedies
and by principles of equity (collectively, "Enforceability Limitations").
4.3 Consents and Approvals; Authority Relative to this Agreement.
(a) Except as set forth in Schedule 4.3, no consent, authorization
or approval of, or filing or registration with, any Governmental Authority
or any other Person not a party to this Agreement has not been obtained
which is necessary in connection with the execution, delivery or
performance by Seller of this Agreement or any of its Related Agreements
or the consummation by Seller of the transactions contemplated hereby or
thereby.
(b) Except as set forth in Schedule 4.3, the execution, delivery and
performance by Seller of this Agreement and its Related Agreements, and
the consummation by Seller of the transactions contemplated hereby and
thereby, do not and
16
will not (i) violate any material Law applicable to or binding on Seller
or the Assets; (ii) violate or conflict with, result in a breach or
termination of, constitute a default or give any third party any
additional right (including a termination right) under, permit
cancellation of, result in the creation of any Lien upon any of the
Purchased Assets under, or result in or constitute a circumstance which,
with or without notice or lapse of time or both, would constitute any of
the foregoing under, any Contract to which Seller is a party or by which
Seller or any of the Purchased Assets are bound, except where such
violation, conflict, breach, termination, default, right, cancellation or
Lien would be immaterial and would not materially affect the ability of
Seller to consummate the transactions contemplated by this Agreement,
(iii) permit the acceleration of the maturity of any indebtedness of
Seller or indebtedness secured by any of the Purchased Assets; or (iv)
violate or conflict with any provision of the certificate of incorporation
or by-laws of Seller.
4.4 Financial Statements; Undisclosed Liabilities.
(a) Except as set forth in Schedule 4.4, the Financial Statements
have been prepared in accordance with U.S. GAAP and the accounting
principles, practices and procedures set forth on Schedule 3.2
consistently applied (except that the financial statements as of and for
the period ended June 30, 2001 have not been prepared in accordance with
U.S. GAAP) and present fairly the financial position of Seller as of the
date thereof and the results of operations and cash flows of Seller for
the period covered thereby. The Financial Statements are in accordance
with the books and records of Seller.
(b) Except as set forth in Schedule 4.4 or in the Financial
Statements, Seller has no liabilities, debts or obligations which were
required to be reported in a balance sheet as of June 30, 2001 prepared in
accordance with U.S. GAAP.
(c) Except as set forth in Schedule 4.4 and other than liabilities,
debts and obligations which were incurred in the Ordinary Course of
Business or which are not material, since June 30, 2001, Seller has
incurred no liabilities, debts or obligations which would be required to
be reported in accordance with U.S. GAAP in a balance sheet dated and
effective as of the date hereof.
4.5 No Adverse Effects or Changes. Except as listed in Schedule 4.5 and
for the Excluded Obligations, since June 30, 2001, Seller has not:
(a) suffered any event (or series of related events) having an
effect on the business, operations, results of operations or financial
condition of Seller as a whole which involves an aggregate amount in
excess of $550,000 and is adverse to Seller, excluding matters that are
general industry wide developments;
(b) suffered any damage, destruction or loss in excess of $75,000 in
the aggregate to any of its material assets that was not covered by
insurance;
(c) sold, transferred, conveyed or otherwise disposed of, or
encumbered with any Lien (other than Permitted Liens), any asset having an
individual book value in
17
excess of $20,000, except in the Ordinary Course of Business and consistent with
past practice;
(d) made any material changes in its accounting principles or
practices;
(e) entered into any material transaction with any of its
Affiliates;
(f) made any borrowings or incurred any material debt (other than
borrowings made and debt incurred in the Ordinary Course of Business and
consistent with past practice), or assumed, guaranteed, endorsed (except
for the negotiation or collection of negotiable instruments in
transactions in the Ordinary Course of Business and consistent with past
practice) or otherwise become liable (whether directly, contingently or
otherwise) for any material obligations of any other Person;
(g) made any loans or capital contributions to, or investments in,
any other Person;
(h) acquired or leased any assets having an individual book value in
excess of $20,000 except in the Ordinary Course of Business and consistent
with past practice;
(i) paid any amount, performed any obligation or agreed to pay any
amount or perform any obligation, in settlement or compromise of any suits
or claims of liability against Seller or any of its directors, officers or
employees, except in the Ordinary Course of Business and consistent with
past practice; or
(j) entered into any other material Contract other than in the
Ordinary Course of Business and consistent with past practice.
4.6 Title to Properties. Except as disclosed in Schedule 4.6, Seller has
good title to, and is the lawful owner of, all of the Purchased Assets, free and
clear of any Lien other than Permitted Liens. Except as set forth in Schedule
4.6 and subject to obtaining all consents, authorizations and approvals set
forth in Schedule 4.3, Seller has the full right to sell, convey, transfer,
assign and deliver the Purchased Assets to Purchaser. Except as set forth in
Schedule 4.6 and subject to obtaining all consents, authorizations and approvals
set forth in Schedule 4.3, at the Closing Seller shall convey to Purchaser good
title to all of the Purchased Assets, free and clear of any Lien except for
Permitted Liens.
4.7 Condition of Assets. Except as disclosed in Schedule 4.7, to Seller's
knowledge, all of the tangible Assets, whether real or personal, owned or
leased, are in reasonable operating condition and repair (with the exception of
normal wear and tear) for the purposes of Seller's business as currently
operated.
4.8 Real Property.
(a) Schedule 4.8 includes a true, accurate and complete list of each
parcel of land that is owned or leased by Seller and the street address of
such parcel. Except as disclosed in Schedule 4.8, Seller does not hold any
real estate under any real property lease. Except as disclosed in Schedule
4.8, the activities carried on by Seller in all
18
buildings, plants and other structures located on or at the Real Property,
and the buildings, plants and other structures themselves in which Seller
carries on such activities, are not in material violation of, or in
material conflict with, any applicable zoning regulation or ordinance or
any other similar Law applicable to or binding on Seller or any of the
Real Property. Seller has made available to Purchaser true and complete
copies of all reports (if any) of any environmental consultants in its
possession relating to any of the Real Property.
(b) Except as set forth on Schedule 4.8, none of the Real Property
is subject to any Lien, easement, right-of-way, or building or use
restriction, other than Permitted Liens.
(c) Except as disclosed in Schedule 4.8, there is no pending, or, to
Seller's knowledge, threatened, proceeding or action by any Governmental
Authority to condemn or take by the power of eminent domain (or to
purchase in lieu thereof) all or any part of the Real Property.
(d) Except as set forth on Schedule 4.8, Seller is not a party to,
and none of the Real Property is subject to, any leases, license
agreements, occupancy agreements or amendments thereto which will be
binding on the Real Property or Purchaser on or after the date of Closing,
and Seller is not a party to, and none of the Real Property is subject to,
any other contractual agreements or instruments which would be binding
upon the Real Property or Purchaser on or after the date of Closing,
except the Purchased Contracts.
(e) To Seller's knowledge, there are no lease brokerage agreements,
leasing commission agreements or other agreements providing for payments
of any amounts for leasing activities or procuring tenants with respect to
the Real Property.
(f) True and complete copies of the most recent real estate tax
bills for the Real Property received by Seller have been delivered to
Purchaser. Except as disclosed, Seller has not filed, and has not retained
anyone to file, notices of protests against, or to commence action to
review, real property tax assessments against the Real Property. There
are no pending real estate tax assessment protests or proceedings with
respect to the Real Property.
(g) To Seller's knowledge, Seller has not received any written
notice from any insurance company or board of fire underwriters of any
defects or inadequacies in or on the Real Property or any part or
component thereof that would materially and adversely affect the
insurability of the Real Property or cause any material increase in the
premiums for insurance for the Real Property that have not been cured or
repaired.
4.9 Equipment. Schedule 4.9 includes an accurate and complete list as of
June 30, 2001 of all material equipment owned by Seller. Schedule 4.9 also sets
forth an accurate and complete list of each Personal Property Lease having
aggregate minimum lease payments in excess of $10,000. Seller has made available
to Purchaser true and complete copies of all such Personal Property Leases.
19
4.10 Inventories. Schedule 4.10 contains a list of all inventories of
Seller as of June 30, 2001, which list is accurate and complete in all material
respects.
4.11 Accounts Receivable; Advances. Schedule 4.11 contains an accurate and
complete aging schedule as of June 30, 2001 of all accounts receivable due to
Seller resulting from goods sold or services provided by Seller and a list of
all loans and advances by Seller to third parties. Except as disclosed in
Schedule 4.11, each Account Receivable in excess of $10,000 represents a sale
made or service provided in the Ordinary Course of Business.
4.12 Intellectual Property. Schedule 4.12 is an accurate and complete list
of all material Owned Intellectual Property that is registered with a
governmental agency, all material unregistered trademarks included in the Owned
Intellectual Property and all material Intellectual Property Licenses. Except as
disclosed in Schedule 4.12:
(a) all of the Owned Intellectual Property is owned by Seller free
and clear of all Liens, and is not subject to any license, royalty or
other agreement to which Seller is party, and Seller has not granted any
license or agreed to pay or receive any royalty in respect of any Owned
Intellectual Property; and
(b) none of the Owned Intellectual Property or any Intellectual
Property licensed to Seller under an Intellectual Property License
("Licensed Intellectual Property") is (i) the subject of any, to Seller's
knowledge (with respect to Licensed Intellectual Property only), pending,
or, to Seller's knowledge (with respect to Owned Intellectual Property and
Licensed Intellectual Property), threatened, litigation or claim of
infringement against Seller or (ii) to Seller's knowledge (with respect to
Licensed Intellectual Property only), claimed to be invalid or, to
Seller's knowledge (with respect to Owned Intellectual Property and
Licensed Intellectual Property), invalid.
4.13 Contracts. Schedule 4.13 is an accurate and complete list of all the
executory Contracts of the following types to which Seller is a party or by
which it is bound, or to which any of the Purchased Assets is subject:
(a) any Contract which requires a payment by any party in excess of,
or a series of payments which in the aggregate exceed, $20,000 or provides
for the delivery of goods or performance of services, or any combination
thereof, having a value in excess of $20,000, and which, in any case, has
not been entered into in the Ordinary Course of Business;
(b) any collective bargaining agreement;
(c) any Contract with a sales representative, manufacturer's
representative, distributor, dealer, broker, sales agency, advertising
agency or other Person engaged in sales, distributing or promotional
activities, or any Contract to act as one of the foregoing on behalf of
any Person;
(d) any Contract pursuant to which Seller has made or will make
loans or advances, or has or will have incurred indebtedness for borrowed
money or become a guarantor or surety or pledged its credit for or
otherwise become responsible with respect
20
to any undertaking of another Person (except for the negotiation or
collection of negotiable instruments in transactions in the Ordinary
Course of Business);
(e) any Contract involving a partnership, joint venture or other
cooperative undertaking;
(f) any Contract involving any restrictions with respect to the
geographical area of operations or scope or type of business of Seller; or
(g) any power of attorney or Contract with any Person pursuant to
which such Person is granted the authority to act for or on behalf of
Seller or Seller is granted the authority to act for or on behalf of any
Person.
Seller has made available to Purchaser accurate and complete copies of each
Contract listed in Schedules 4.12 and 4.13. Except as disclosed in Schedule
4.13, each such Contract is in full force and effect and constitutes a legal,
valid and binding obligation of Seller and, to Seller's knowledge, the other
parties thereto, enforceable against the Seller and, to Seller's knowledge, the
other parties thereto in accordance with its terms, subject to Enforceability
Limitations.
4.14 Permits. Schedule 4.14 is an accurate and complete list of all
material Permits (other than Environmental Permits) held by Seller. Except as
set forth in Schedule 4.14, all the Permits so listed are in full force and
effect and Seller has not received any notice that any such Permit will be
revoked or canceled. Except for the Permits listed on Schedule 4.14 and except
for such Permits the failure to have which would be immaterial, there are no
Permits (other than Environmental Permits) which are necessary for Seller to
operate its business as currently conducted.
4.15 Insurance.
(a) Schedule 4.15 contains an accurate and complete list of all
material policies of fire, liability, workers' compensation, title and
other forms of insurance owned or held by Seller, and Seller has made
available to Purchaser accurate and complete copies of all such policies,
other than policies relating to Seller's employee benefit plans.
(b) Schedule 4.15 contains an accurate and complete list of all
claims in excess of $10,000 which have been made by Seller since January
1, 1999 under any workers' compensation, general liability, property or
other insurance policy.
4.16 Employment and Labor Matters.
(a) Seller has made available to Purchaser an accurate and complete
list of the names, titles or job descriptions and annual compensation for
the preceding fiscal year, of all the employees and officers of Seller.
Except as described in Schedule 4.16, (i) Seller is not a party to any
collective bargaining agreement; (ii) since January 1, 1999, to Seller's
knowledge, none of Seller's employees have been subject to any organizing
campaign by any union or local chapter of any union; (iii) since January
1, 1999, Seller has not been subject to any claim, lawsuit or cause of
action with respect to, or to Seller's
21
knowledge any threatened claim of, an unfair labor practice or a
discrimination, wrongful discharge, constructive discharge or wage and
hour matter relating to employees of Seller; and (iv) there is, and since
January 1, 1999 there has been, no labor strike, material labor dispute,
material labor slow-down, material work stoppage or other material labor
difficulty pending or, to Seller's knowledge, threatened, against Seller.
(b) Seller is in compliance with all applicable laws, rules and
regulations concerning employment, employment practices, leave, safety,
discrimination, harassment, immigration, labor relations, wages, hours and
the payment of withholding Taxes, except in each case, where such
non-compliance has been remedied or would be immaterial. Seller has
withheld and paid to the appropriate Governmental Authority, or is holding
for the payment not yet due to any such authority, all amounts required by
law or agreement to be withheld from the salaries or wages of the
employees of Seller. Schedule 4.16 sets forth as of the Closing Date a
list of independent contractors and consultants retained by Seller at any
time during the twelve (12) months prior to the Closing Date for each of
Seller's plants in Blandon, Pennsylvania and Summerville, South Carolina.
4.17 Capital Improvements. Schedule 4.17 describes each capital
improvement and capital expenditure in excess of $20,000 individually which
Seller has committed to or contracted for and which has not been completed prior
to the date hereof and the cost and expense reasonably estimated to complete
such work.
4.18 Taxes. Seller has filed on a timely basis all material Tax Returns,
as required by applicable Law, and paid all Taxes shown as due and payable on
such Tax Returns, except for any failure to file or pay that could not result in
a liability of Purchaser for Taxes of Seller or result in a Lien on the
Purchased Assets.
4.19 No Defaults or Violations. Except as disclosed in Schedule 4.19:
(a) Seller has not breached the provisions of, and is not in default
under the terms of, any Purchased Contract, and, to Seller's knowledge, no
other party to any Purchased Contract has breached the provisions of, or
is in default under the terms of, any Purchased Contract, except in each
case, where such breach or default has been remedied or would be
immaterial;
(b) excluding (i) Laws relating to Taxes (as matters relating to Tax
Laws are set forth in Section 4.18) and (ii) Environmental Laws (as
matters relating to Environmental Laws are set forth in Section 4.20),
Seller is in compliance with all Laws applicable to or binding on it or
any of the Assets and Real Property, except where the failure to so comply
would be immaterial; and
(c) excluding (i) Laws relating to Taxes (as matters relating to Tax
Laws are set forth in Section 4.18) and (ii) Environmental Laws (as
matters relating to Environmental Laws are set forth in Section 4.20),
since January 1, 1999 no notice from any Governmental Authority has been
received by Seller claiming any violation by Seller
22
of any Law applicable to or binding on it or any of the Assets or Real
Property, except where such violation would be immaterial.
4.20 Environmental Matters. Except as disclosed in Schedule 4.20:
(a) Seller, the Business and the Real Property are in compliance
with all Environmental Laws, except where the failure to so comply would
be immaterial;
(b) Schedule 4.20(b) is an accurate and complete list of all
material Environmental Permits held by Seller;
(c) Seller is in possession of all Environmental Permits, if any,
required for the conduct or operation of its business, and is in
compliance with all of the requirements and limitations included in such
Environmental Permits except where the failure to possess such
Environmental Permits or to so comply would be immaterial;
(d) during the period of Seller's ownership of the Real Property,
there have been no Hazardous Substances in, on, or at any of the Real
Property, and there have been no releases of Hazardous Substances in, on
or at any of the Real Property, except for Hazardous Substances which were
used or are used in the Ordinary Course of Business and which have been
stored and used in accordance with all applicable Environmental Laws and
Environmental Permits, including all so-called "Right To Know Laws", and
except for such Hazardous Substances, usage or storage that would be
immaterial;
(e) there are no landfills, surface impoundments, disposal areas, or
underground storage tanks on the Real Property, except for such landfills,
surface impoundments, disposal areas, or underground storage tanks that
would be immaterial.
(f) since January 1, 1996 no notice from any Governmental Authority
has been received by Seller claiming that Seller is in violation of any
Environmental Law or Environmental Permit, or that Seller is responsible
(or potentially responsible) for the cleanup or remediation of any
substances at any location, except, in each case, for violations, cleanups
or remediations that would be immaterial;
(g) Seller is not the subject of any pending, or, to Seller's
knowledge, threatened, litigation or proceedings in any forum, judicial or
administrative, involving a demand for damages, injunctive relief,
penalties or other potential liability with respect to violations of any
Environmental Law, except for such violations that would be immaterial;
and
(h) Seller has timely filed all reports and notifications required
to be filed by it, and has generated and maintained all required records
and data, under all applicable Environmental Laws, except where the
failure to so file, generate or maintain would be immaterial.
23
4.21 Litigation.
(a) Except as disclosed in Schedule 4.21, there are no material
actions, suits, arbitrations, proceedings or other litigation pending, or,
to Seller's knowledge, threatened, against Seller or any of its officers,
directors, employees or stockholders in their capacity as such before any
court or any other Governmental Authority. Except as disclosed in Schedule
4.21, Seller is not subject to any material order, judgment, decree,
injunction, stipulation or consent order of or with any court or other
Governmental Authority, other than orders having application to the
business in which Seller is engaged as a whole or other industry-wide
matters.
(b) There are no actions, suits, proceedings or other litigation
pending, or, to Seller's knowledge, threatened, by or against Seller or
any of its Affiliates with respect to this Agreement or the Related
Agreements, or in connection with the transactions contemplated hereby or
thereby.
4.22 Customers and Suppliers.
(a) Schedule 4.22 sets forth:
(i) an accurate and complete list of the twenty (20) largest
customers of Seller in terms of revenue during each of the 1999 and 2000
fiscal years and the period of January 1 through September 30, 2001
(collectively, the "Major Customers"), showing the total revenue received
by Seller in each such period from each such customer; and
(ii) an accurate and complete list of the ten (10) largest
suppliers to Seller in terms of purchases during each of the 1999 and 2000
fiscal years and the period of January 1 through September 30, 2001
(collectively, the "Major Suppliers"), showing the total purchases made by
Seller in each such period from each such supplier.
(b) Except as set forth in Schedule 4.22, since June 30, 2000 there
has been no material dispute between Seller and any Major Customer or any
Major Supplier.
4.23 Sufficiency of Assets. The Purchased Assets, the Real Property, any
personal property leased to Seller under the Personal Property Leases, any
intellectual property licensed to Seller under the Intellectual Property
Licenses and any Know-How to be licensed to Purchaser pursuant to the Know-How
License and Technical Support Agreement together constitute all of the assets,
properties and rights (except for the Excluded Assets) that are currently used
by Seller in the Ordinary Course of Business.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
5.1 Due Incorporation. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of Nevada, with all requisite
corporate power and authority
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to own, lease and operate its assets and to conduct its business as they are now
being owned, leased, operated and conducted.
5.2 Due Authorization. Purchaser has all requisite corporate power and
authority to enter into this Agreement and its Related Agreements and to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance by Purchaser of this Agreement and its Related
Agreements, and the consummation by Purchaser of the transactions contemplated
hereby and thereby, have been duly and validly approved by its board of
directors and no other corporate actions or proceedings on the part of Purchaser
are necessary to authorize this Agreement, its Related Agreements and the
transactions contemplated hereby and thereby. Purchaser has duly and validly
executed and delivered this Agreement and has duly and validly executed and
delivered (or prior to or at the Closing will duly and validly execute and
deliver) its Related Agreements. Assuming due authorization, execution and
delivery of this Agreement and its Related Agreements by the other parties
hereto and thereto, this Agreement constitutes a legal, valid and binding
obligation of Purchaser and its Related Agreements constitute (or upon execution
and delivery by Purchaser will constitute) legal, valid and binding obligations
of Purchaser, in each case, enforceable in accordance with their respective
terms, except as such enforceability may be limited by Enforceability
Limitations.
5.3 Consents and Approvals; Authority Relative to this Agreement.
(a) Except as set forth in Schedule 5.3, no consent, authorization
or approval of, or filing or registration with, any Governmental Authority
or any other Person not a party to this Agreement is necessary in
connection with the execution, delivery or performance by Purchaser of
this Agreement or any of its Related Agreements or the consummation by
Purchaser of the transactions contemplated hereby or thereby.
(b) Except as set forth in Schedule 5.3, the execution, delivery and
performance by Purchaser of this Agreement and its Related Agreements, and
the consummation by Purchaser of the transactions contemplated hereby and
thereby, do not and will not (i) violate any material Law applicable to or
binding on Purchaser or any of its assets; (ii) violate or conflict with,
result in a breach or termination of, constitute a default or give any
third party any additional right (including a termination right) under,
permit cancellation of, result in the creation of any Lien upon any of the
assets of Purchaser under, or result in or constitute a circumstance
which, with or without notice or lapse of time or both, would constitute
any of the foregoing under, any Contract to which Purchaser is a party or
by which Purchaser or any of its assets are bound; (iii) permit the
acceleration of the maturity of any indebtedness of Purchaser or
indebtedness secured by its assets; or (iv) violate or conflict with any
provision of Purchaser's certificate of incorporation or by-laws.
5.4 Litigation. There are no actions, suits, proceedings or other
litigation pending, or, to Purchaser's knowledge, threatened, by or against
Purchaser or any of its Affiliates with respect to this Agreement or the Related
Agreements, or in connection with the transactions contemplated hereby or
thereby.
25
5.5 Independent Investigation. In making the decision to enter into this
Agreement and the Related Agreements and to consummate the transactions
contemplated hereby and thereby, other than reliance on the representations,
warranties, covenants and obligations of Seller set forth in this Agreement and
in Seller's Related Agreements, Purchaser has relied solely on its own
independent investigation, analysis and evaluation of Seller, its business and
the Assets (including Purchaser's own estimate and appraisal of the value of the
business, financial condition, operations and prospects of Seller and the
Assets). Purchaser confirms to Seller that Purchaser is sophisticated and
knowledgeable in the business of Seller and is capable of evaluating the matters
set forth above.
5.6 Fair Market Value. Purchaser has determined that the fair market value
of the Purchased Assets, in the aggregate, is no greater than the Purchase Price
and the Assumed Obligations and is, in any event, less than $50,000,000.
5.7 Transaction Structure. All statements contained in the letter attached
hereto as Schedule 5.7 are true and correct in all material respects and do not
omit to state a material fact necessary to make the statements contained therein
not misleading.
ARTICLE VI
COVENANTS
6.1 Implementing Agreement. Subject to the terms and conditions hereof,
each Party shall take all action required of it to fulfill its obligations under
the terms of this Agreement, including taking all commercially reasonable action
necessary to obtain any required regulatory approval, and shall otherwise use
all commercially reasonable efforts to facilitate the consummation of the
transactions contemplated hereby. After Closing, (i) Seller shall promptly pay
to Purchaser any amounts it receives which are Purchased Assets or which arise
after Closing from Purchased Assets and (ii) Purchaser shall promptly pay to
Seller any amounts its receives which are Excluded Assets or which arise after
Closing from Excluded Assets.
6.2 Consents and Approvals. If a consent or approval is required by any
third party to any of the Purchased Contracts and is not obtained at or before
the Closing or if an attempted transfer, conveyance or assignment is
ineffective, Seller shall cooperate with Purchaser in any commercially
reasonable arrangement requested by Purchaser that provides to Purchaser the
benefits under any such Purchased Contract and imposes on Purchaser the
obligations and liabilities under such Purchased Contract.
6.3 Trademarks.
(a) Seller is not granting Purchaser a license to use, Seller is not
transferring to Purchaser, and Purchaser shall not have any right, title
or interest in or to, the "Etex" logo or the name "Etex" or any variation
or derivation thereof, or any Internet domain name, logo, name, xxxx,
variation or derivation incorporating any such logo, name, variation or
derivation. Purchaser agrees, from and after 30 days after the Closing, to
cease to use, directly or indirectly, and in any manner or form (including
as a corporate or fictitious name, Internet domain name, trade name,
trademark, service name or service
26
xxxx), and to remove from the Assets, the "Etex" logo, the name "Etex" and
any variations and derivations thereof, and any Internet domain name,
logo, name, variation and derivation incorporating any such logo, name,
variation or derivation, provided, that Purchaser may sell any finished
goods inventory, and use any product brochures, packaging and price lists,
which are in existence on the Closing Date and bear any "Etex" name or
logo, for a period of six (6) months after the Closing Date; provided,
further, that Purchaser shall not replenish any finished goods inventory,
product brochures, packaging or price lists or any other Assets bearing
the "Etex" name or logo during such 30-day or 6-month periods described
above.
(b) Purchaser acknowledges that Seller and its Affiliates would be
irreparably harmed by any breach of this Section 6.3 and that any relief
under Article VIII will be inadequate to compensate Seller or such
Affiliates for any such breach. Accordingly, Purchaser (on behalf of
itself and its Affiliates) agrees that, in addition to any relief
available under Article VIII, Seller and its Affiliates shall be entitled,
without the necessity of proving actual damages or posting any bond, to
injunctive relief against Purchaser (or its Affiliates) in the event of
any breach or threatened breach by Purchaser (or its Affiliates) of its
covenants and agreements in this Section 6.3 and Purchaser (on behalf of
itself and its Affiliates) consents to the entry thereof.
6.4 Brokers. Regardless of whether the Closing shall occur, (i) Seller
shall indemnify Purchaser and its Affiliates against, and hold Purchaser and its
Affiliates harmless from, any and all liability for any brokers' or finders'
fees or other commissions arising with respect to brokers or finders retained or
engaged by Seller or any of its Affiliates in respect of the transactions
contemplated by this Agreement, and (ii) Purchaser shall indemnify Seller and
its Affiliates against, and hold Seller and its Affiliates harmless from, any
and all liability for any brokers' or finders' fees or other commissions arising
with respect to brokers or finders retained or engaged by Purchaser or any of
its Affiliates in respect of the transactions contemplated by this Agreement.
6.5 Preservation of Books and Records; Access.
(a) For a period of seven years after the Closing Date, Purchaser
shall preserve and retain all Information and Records and other
accounting, legal, auditing, employee and other books and records
(including any documents relating to any governmental or non-governmental
claims, actions, suits, proceedings or investigations) relating to the
conduct of the business of Seller and the ownership of assets of Seller on
or prior to the Closing Date. Notwithstanding the foregoing, during such
seven-year period, Purchaser may dispose of any such books and records
which are offered to, but not accepted by, Seller. If at any time after
such seven-year period Purchaser intends to dispose of any such books and
records, Purchaser shall not do so without first offering such books and
records to Seller.
(b) After the Closing Date, Purchaser shall permit Seller and its
authorized representatives to have reasonable access to, and to inspect
and copy, all Information and Records and books and records referred to in
Section 6.5(a) and to meet with officers and employees of Purchaser on a
mutually convenient basis in order to obtain explanations
27
with respect to such Information and Records and books and records and to
obtain additional information and to call such officers and employees as
witnesses.
6.6 Employees; Employee Benefit Plans. Purchaser shall prior to the
Closing Date, using its own unfettered discretion, extend written offers of
employment to be effective one (1) day following the Closing Date to certain of
Seller's employees that Purchaser desires to employ on the day following the
Closing Date. Upon the acceptance of such employees of the offers of employment
made to them by Purchaser, such employees shall be deemed to be Purchaser's
employees ("Purchaser's Employees"). The employment of Purchaser's employees
shall be governed by such terms and conditions of employment as determined in
Purchaser's sole discretion.
6.7 Purchaser's Access to Information. For a period of seven years after
the Closing Date, Seller shall preserve and retain corporate, records, employee
records and other books and records relating to the Excluded Assets or Excluded
Obligations which were included in the Excluded Assets. After the Closing Date,
Seller shall permit Purchaser and its authorized representatives to have
reasonable access to, and to inspect and copy, such information as is then in
the possession of Seller and as Purchaser shall reasonably request.
6.8 Trademark "Cemplank". After the Closing Date, Seller shall not seek to
register the trademark "Cemplank" with any Governmental Authority. Seller shall
change its corporate name from "Cemplank" to some name not using the word
"Cemplank" in Pennsylvania and South Carolina on or before the day which is ten
(10) days after the Closing Date.
6.9 Interim Services.
(a) For one (1) month following the Closing Date, Seller shall use
its commercially reasonable efforts to retain Xx. Xxxxxxxxx Dolmans as an
employee and make Mr. Dolmans available to perform such services as
Purchaser shall reasonably request which are consistent with those
services Mr. Dolmans performed for Seller in the Ordinary Course of
Business. Mr. Dolmans shall not be required to perform more than forty
(40) hours of such services per week in such capacity. After such month,
Mr. Dolmans shall be made available on a more limited basis for consulting
purposes to the extent he is reasonably available and Purchaser reasonably
requests.
(b) For three (3) months following the Closing Date, Purchaser shall
make employees of the Business reasonably available to Seller at the
Blandon, Pennsylvania and Summerville, South Carolina facilities to assist
Seller in the orderly wind-up of its affairs including the preparation of
financial statements, tax returns, Forms W-2 and similar administrative
documentation. Purchaser shall during the same period also grant Seller
reasonable access to its facilities and assistance for the purpose of
allowing it to assemble any Excluded Assets and arrange for their
relocation.
(c) For the services of Mr. Dolmans performed pursuant to this
Section, Purchaser shall pay to Seller any reasonable out-of-pocket
expenses actually incurred by Seller or Mr. Dolmans in connection with the
performance of such services.Such out-of-pocket expenses shall be
reimbursed promptly following submission to Xxxxxxxxx.
00
(x) Mr. Dolmans shall not be deemed to be an employee of Purchaser,
and none of Purchaser's employees providing services pursuant to this
Section 6.9 shall be deemed to be an employee of Seller. Each of Mr.
Dolmans and Purchaser's employees shall take direction solely from their
respective employers.
6.10 Confidentiality. Seller shall keep confidential, and cause its
Affiliates and instruct its and their officers, directors, employees and
advisors to keep confidential, all information relating to the Purchased Assets
and the Business, except (i) as required by law, administrative process or other
public disclosure requirements, (ii) as required in the orderly wind-up of
Seller's affairs, including the preparation of financial statements, tax
returns, Forms W-2 and similar administrative matters, (iii) as may be required
to enforce Seller's or its Affiliates' rights under this Agreement or the
Related Agreements and (iv) for information which is available to the public on
the Closing Date, or thereafter becomes available to the public other than as a
result of a breach of this Section 6.10.
6.11 Software. If Purchaser does not obtain software or rights in software
under this Agreement or the Related Agreements which are necessary for Purchaser
to operate the plants located in Blandon, Pennsylvania or Summerville, South
Carolina as of the Closing Date in exactly the same manner as operated by Seller
in the Ordinary Course of Business, then Seller shall provide or cause to be
provided at Seller's expense such software or rights in such software necessary
to so operate such plants; provided, however, that this section shall not apply
to any of the software licensed to Seller pursuant to or in connection with the
agreements listed on Schedule 4.3. Any expenses incurred by Seller in complying
with this Section 6.11 shall be subject to the limitation on liability
provisions set forth in Section 8.4 as though such expenses were indemnifiable
Losses and/or payments dealt with under Article VIII, and such amounts shall be
aggregated with all other payments under Article VIII for purposes thereof.
6.12 Access Easement. Seller will use its commercially reasonable efforts
to acquire from (a) F & P Holdings, Inc. (formerly known as Can Corporation of
America, Inc.) (referred herein as "F & P") and Greater Berks Development Fund
an access easement to use Xxxxxx Street and Xxxxxxxx Street, which are private
streets owned by F&P and Greater Berks Development Fund, in order to gain access
to that portion of the Property known as Tract "B" identified on the survey
dated November 6, 2001 and prepared by SSM Group as Work No. 20279-00 ("Survey")
by way of that portion of June Avenue dedicated to the public, (b) the owner of
June Avenue (not dedicated to the public) an access easement to Tract B directly
from June Avenue (not dedicated to the Public), or (c) the owner of Xxxx Street
an access easement from Tract "B" to Tract "A" identified on the Survey. Seller
will commence its efforts by January 15, 2002. Seller will use commercially
reasonable efforts to keep Purchaser timely informed as to the status of its
efforts and the parties shall cooperate regarding such efforts. In the event
Seller transfers the Property to a third party, Seller shall nevertheless be
required to continue its effort hereunder and shall use commercially reasonable
efforts to require its transferee to reasonably cooperate with such efforts. For
purposes of this Section, commercially reasonable efforts shall include the
payment of any costs and fees in connection therewith, but in no event shall
such costs and fees exceed $60,000 including, without limitation, any attorneys
fees.
29
ARTICLE VII
CLOSING
7.1 Closing. The Closing, and all transactions to occur at the Closing,
shall be deemed to have taken place at, and shall be effective as of, 11:59 p.m.
on the Closing Date.
7.2 Deliveries by Seller. At the Closing, Seller shall deliver to
Purchaser the following:
(a) the Assignment and Assumption Agreement in the form set forth in
Exhibit A duly executed by Seller;
(b) a Xxxx of Sale in the form set forth in Exhibit B duly executed
by Seller;
(c) an affidavit stating, under penalties of perjury, Seller's
taxpayer identification number and that Seller is not a "foreign person"
as defined in section 1445 of the Code;
(d) certificates of title to any motor vehicles included in the
Purchased Assets duly executed by Seller;
(e) assignments with respect to any Owned Intellectual Property in
the form of Exhibit I, title to which is registered, recorded or filed
with any U.S. federal or state Governmental Authority, in form suitable
for registration, recordation or filing with such Governmental Authority,
in each case duly executed by Seller;
(f) a certificate of the secretary or an assistant secretary of
Seller certifying resolutions of the board of directors and stockholders
of Seller approving and authorizing the execution, delivery and
performance by Seller of this Agreement and its Related Agreements and the
consummation by Seller of the transactions contemplated hereby and thereby
(together with an incumbency and signature certificate regarding the
officer(s) signing on behalf of Seller);
(g) the certificate of incorporation of Seller, certified by the
Secretary of State of Pennsylvania as of a recent date, and the by-laws of
Seller, certified by the secretary or an assistant secretary of Seller;
(h) a certificate of good standing for Seller from the Commonwealth
of Pennsylvania and State of South Carolina as of a recent date;
(i) the Guarantee Agreement in the form set forth in Exhibit C duly
executed by International Building Materials, S.A.;
(j) an opinion, dated the Closing Date, of Xxxxx, Xxxxx & Xxxxx,
counsel to Seller, to the effect set forth in Exhibit F-1;
30
(k) an opinion, dated the Closing Date, of Xxxxxxx & Xxx,
Pennsylvania counsel to Seller, to the effect set forth in Exhibit F-2;
(l) an opinion, dated the Closing Date, of Xxxxxx Xxxxxx, to the
effect set forth in Exhibit F-3;
(m) the Know-How License and Technical Support Agreement in the form
set forth in Exhibit D duly executed by Redco S.A., Xxxxxxx X.X. and
Seller;
(n) Special Warranty Deeds, in the form of Exhibit H with respect to
the transfer of the Non-Commercial Real Property, duly executed by Seller;
(o) a certificate of a Director of International Building Materials,
S.A. certifying resolutions of the board of directors of International
Building Materials, S.A. approving and authorizing the execution, delivery
and performance by it of the Guarantee Agreement and the consummation of
the transactions contemplated thereby (together with an incumbency and
signature certificate regarding the authorized signatories);
(p) a certificate of a Director of each of Redco, S.A. and Xxxxxxx
X.X. certifying resolutions of the board of directors of each such company
approving and authorizing the execution, delivery and performance by each
of them of the Know-How License and Technical Support Agreement and the
consummation of the transactions contemplated thereby (together with
incumbency and signature certificates regarding the authorized
signatories);
(q) the Side Letter in the form set forth in Exhibit J duly executed
by International Building Materials, S.A.;
(r) evidence of termination of the Eureka Agreement;
(s) the Conversion Agreement duly executed by Seller; and
(t) such other documents and instruments as may be required by any
other provision of this Agreement or any Related Agreement or as may
reasonably be required to consummate the transactions contemplated by this
Agreement and the Related Agreements.
7.3 Deliveries by Purchaser. At the Closing, Purchaser shall deliver to
Seller the following:
(a) the Assignment and Assumption Agreement duly executed by
Purchaser;
(b) the amount payable to Seller at the Closing pursuant to Section
3.1(b);
(c) a certificate of the secretary or an assistant secretary of
Purchaser certifying resolutions of the board of directors of Purchaser
approving and authorizing the execution, delivery and performance by
Purchaser of this Agreement and its Related Agreements and the
consummation by Purchaser of the transactions contemplated hereby
31
and thereby (together with an incumbency and signature certificate
regarding the officer(s) signing on behalf of Purchaser);
(d) the certificate of incorporation of Purchaser, certified by the
Secretary of State of the State of Nevada as of a recent date, and the
by-laws of Purchaser, certified by the secretary or an assistant secretary
of Purchaser;
(e) a certificate of good standing for Purchaser from the State of
Nevada as of a recent date;
(f) tax resale certificates with respect to the Inventory duly
executed by Purchaser;
(g) the Guarantee Agreement in the form set forth in Exhibit C duly
executed by Purchaser;
(h) the Know-How License and Technical Support Agreement in the form
set forth in Exhibit D duly executed by Purchaser;
(i) the Side Letter in the form set forth in Exhibit J duly executed
by Purchaser;
(j) an opinion, dated the Closing Date, of Xxxxxx Xxxxx LLP, counsel
to Purchaser and an opinion, dated the Closing Date, of XxXxxxxx Carano
Xxxxxx XxXxxx Xxxxxx Xxxxxxxxxx & Xxxxx LLP, Nevada counsel to Purchaser,
to the effect set forth in Exhibit G;
(k) the Conversion Agreement duly executed by Purchaser; and
(l) such other documents and instruments as may be required by any
other provision of this Agreement or any Related Agreement or as may
reasonably be required to consummate the transactions contemplated by this
Agreement and the Related Agreements.
ARTICLE VIII
INDEMNIFICATION
8.1 Survival. The representations and warranties of the Parties and of
Redco S.A. and Xxxxxxx X.X. contained herein and in the Related Agreements shall
survive the Closing for a period of two (2) years after the Closing, except that
(i) Environmental Warranties and Know-How Warranties shall survive the Closing
for a period of five (5) years after the Closing, (ii) Tax Warranties shall
survive until the Tax Statute of Limitations Date, (iii) the representations and
warranties contained in Sections 5.6 and 5.7 and Title and Authorization
Warranties shall survive forever. Neither Purchaser, Seller, Redco S.A. nor
Xxxxxxx X.X. shall have any liability with respect to claims first asserted in
connection with any representation or warranty after the survival period
specified therefor in this Section 8.1.
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8.2 Indemnification by Seller. Subject to Section 8.4, Seller agrees to
indemnify Purchaser and its Affiliates against, and agrees to hold Purchaser and
its Affiliates harmless from, any and all Losses incurred or suffered by
Purchaser and its Affiliates arising out of any of the following:
(a) any breach of or any inaccuracy in any representation or
warranty (x) made by Seller in this Agreement or any Related Agreement or
any document delivered by Seller at the Closing and specifically listed in
Article VII and (y) made by Redco S.A. or Xxxxxxx X.X. in the Know-How
License and Technical Support Agreement; provided, that neither Seller,
Redco S.A. nor Xxxxxxx X.X. shall have any liability under this Section
8.2(a) for any breach of or inaccuracy in any representation or warranty
unless (i) in the case of all representations and warranties, except for
Environmental Warranties, Know-How Warranties, Tax Warranties and Title
and Authorization Warranties, a notice of Purchaser's claim is given to
Seller not later than the close of business on the second anniversary of
the Closing Date, (ii) in the case of Environmental Warranties and Know-
How Warranties, a notice of Purchaser's claim is given to Seller not later
than the close of business on the fifth anniversary of the Closing Date,
and (iii) in the case of Tax Warranties, a notice of Purchaser's claim is
given to Seller not later than the close of business on the Tax Statute of
Limitations Date;
(b) any breach of or failure (x) by Seller to perform any covenant
or obligation of Seller set out in this Agreement or any Related Agreement
or any document delivered by Seller at the Closing and specifically listed
in Article VII and (y) by Redco S.A. or Xxxxxxx X.X. to perform any
covenant or obligation of Redco S.A. or Xxxxxxx X.X. in the Know-How
License and Technical Support Agreement; provided, that neither Seller,
Redco S.A. nor Xxxxxxx X.X. shall have any liability under this Section
8.2(b) for any breach or failure occurring on or prior to the Closing Date
unless a notice of Purchaser's claim is given to Seller not later than the
close of business on the second anniversary of the Closing Date; and
provided, further, that neither Seller, Redco S.A. nor Xxxxxxx X.X. shall
have any liability under this Section 8.2(b) with respect to any breach of
the covenants contained in Article IV of the Know-How License and
Technical Support Agreement; or
(c) severance agreements entered into between Seller and the
individuals listed on Schedule 8.2(c).
8.3 Indemnification by Purchaser. Purchaser agrees to indemnify Seller and
its Affiliates against, and agrees to hold Seller and its Affiliates harmless
from, any and all Losses incurred or suffered by Seller and its Affiliates
arising out of any of the following:
(a) any breach of or any inaccuracy in any representation or
warranty made by Purchaser in this Agreement or any Related Agreement or
any document delivered by Purchaser at the Closing and specifically listed
in Article VII; provided, that Purchaser shall have no liability under
this Section 8.3(a) for any breach of or inaccuracy in any representation
or warranty unless in the case of all representations and warranties,
except for Title and Authorization Warranties and the representations and
warranties contained
33
in Sections 5.6 and 5.7, a notice of Seller's claim is given to Purchaser
not later than the close of business on the second anniversary of the
Closing Date;
(b) any breach of or failure by Purchaser to perform any covenant or
obligation of Purchaser set out in this Agreement or any Related Agreement
or any document delivered by Purchaser at the Closing and specifically
listed in Article VII; provided, that Purchaser shall have no liability
under this Section 8.3(b) for any breach or failure occurring on or prior
to the Closing Date unless a notice of Seller's claim is given to
Purchaser not later than the close of business on the second anniversary
of the Closing Date;
(c) (i) any act or failure to act, any transaction, or any facts or
circumstances undertaken or caused by Purchaser with respect to the
termination by Purchaser of any Purchaser's Employee subsequent to the
Closing, (ii) any and all Liability arising under the Age Discrimination
in Employment Act, Title VII of the Civil Rights Act of 1964 and the
Americans with Disabilities Act from Purchaser's failure to offer
employment to any of Seller's employees prior to or subsequent to, or at
Closing, (iii) any and all Liability under the Worker Adjustment and
Retraining Notification Act (including any Liabilities of Seller resulting
from any failure to give advance notice to employees of employee
terminations contemplated hereby) and any state or local Laws that are
similar to any of the foregoing, and (iv) with respect to any Purchaser's
Employee and events occurring after the Closing, any and all Liability
under the Age Discrimination in Employment Act, Title VII of the Civil
Rights Act of 1964, the National Labor Relations Act, the Fair Labor
Standards Act, any state or local Laws that are similar to any of the
foregoing and any and all common law causes of action including for breach
of contract, defamation or retaliatory discharge, and any alleged right to
workers' compensation benefits, unemployment compensation or statutory or
contractual severance; or
(d) the Assumed Obligations or, other than the Excluded Obligations,
any debts, claims, obligations or other liabilities relating to or arising
out of the ownership or operation after the Closing of the Assets or the
business previously conducted by Seller prior to the Closing, including
any changes to production processes by Purchaser.
8.4 Limitations on Liability. Notwithstanding any other provision of this
Agreement:
(a) Purchaser shall have the right to payment by Seller under
Section 8.2(a) only if, and only to the extent that, Purchaser shall have
incurred (i) as to any particular inaccuracy or breach, indemnifiable
Losses in excess of $20,000 and (ii) as to all inaccuracies and breaches,
indemnifiable Losses (other than as excluded in clause (i)) in excess of
$550,000.
(b) Neither Seller, Redco S.A. nor Xxxxxxx X.X. shall have any
liability under or in connection with this Agreement or the Related
Agreements or the transactions contemplated hereby or thereby (including
under Section 6.11, Section 8.2 or otherwise for any breach of or
inaccuracy in any representation or warranty or for any breach of any
covenant or obligation or for any other reason) in excess of (i) as to all
representations, warranties, covenants, obligations and other reasons,
other than Title and Authorization
34
Warranties, $13,500,000 in the aggregate, and (ii) as to Title and
Authorization Warranties, the Purchase Price in the aggregate; provided,
that in no event shall Seller's, Redco S.A.'s and Xxxxxxx X.X.'s aggregate
liability for any and all matters referred to in clauses (i) and (ii)
exceed the Purchase Price in the aggregate.
(c) Seller shall have the right to payment by Purchaser under
Section 8.3(a) only if, and only to the extent that, Seller shall have
incurred (i) as to any particular inaccuracy or breach, indemnified Losses
in excess of $20,000 and (ii) as to all inaccuracies and breaches,
indemnifiable Losses (other than as excluded in clause (i)) in excess of
$550,000; provided, however, that the foregoing limitations shall not
apply to any breach of or inaccuracy in the representations and warranties
set forth in Section 5.6 or 5.7.
(d) Purchaser shall have no liability under or in connection with
this Agreement or the Related Agreements or the transactions contemplated
hereby or thereby (including under Section 8.3 or otherwise for any breach
of or inaccuracy in any representation or warranty or for any breach of
any covenant or obligation or for any other reason) in excess of (i) as to
all representations, warranties, covenants, obligations and other reasons,
other than Title and Authorization Warranties and the representations and
warranties set forth in Section 5.6 or 5.7, $13,500,000 in the aggregate,
and (ii) as to Title and Authorization Warranties, the Purchase Price in
the aggregate; provided, that in no event shall Purchaser's aggregate
liability for any and all matters referred to in clause (i) and (ii)
exceed the Purchase Price in the aggregate. The obligation of Purchaser to
indemnify Seller for a breach of representation or warranty set forth in
Section 5.6 or 5.7 shall have no limit.
(e) No party to this Agreement or the Related Agreements shall have
any liability hereunder or thereunder or arising in connection herewith or
therewith for special, speculative, punitive, indirect or consequential
damages or for lost profits.
(f) The sole and exclusive liability and responsibility of Seller
and its Affiliates to Purchaser and its Affiliates and of Purchaser and
its Affiliates to Seller and its Affiliates under or in connection with
the Assets or this Agreement or the Related Agreements or the transactions
contemplated hereby or thereby (including for any breach of or inaccuracy
in any representation or warranty or for any breach of any covenant or
obligation or for any other reason), and the sole and exclusive remedy of
either Party and their Affiliates with respect to any of the foregoing,
shall be as set forth in this Article VIII and in Section 6.4; provided,
however, that the foregoing is not intended to limit any party's ability
to obtain injunctive relief to the extent specifically permitted in the
Know-How License and Technical Support Agreement; and provided, further,
that this Article VIII shall not apply to Article IV of the Know-How
License and Technical Support Agreement and that the Parties' acknowledge
and agree that Purchaser shall not be precluded from enforcing its rights
against Cemplank, Redco S.A. or Xxxxxxx X.X. under the Know-How License
And Technical Support Agreement but that the limitations on liability set
forth in Section 8.4 hereof shall apply thereto (except to Article IV of
the Know-How License and Technical Support Agreement).
35
(g) To the extent that Purchaser or any of its Affiliates has any
Losses for which it may assert any other right to indemnification,
contribution or recovery from Seller or any of its Affiliates (except as
provided in Section 8.4(f), whether under this Agreement or under any
common law or any statute, including any Environmental Law, or otherwise),
Purchaser hereby waives, releases and agrees not to assert such right, and
Purchaser agrees to cause each of its Affiliates to waive, release and
agree not to assert such right. Notwithstanding the foregoing, nothing in
this Section 8.4 shall limit or restrict either Party's right to maintain
or recover on any action based upon common law fraud.
(h) For the avoidance of doubt, all payments made by Seller under
Section 6.11 hereof and this Article VIII shall be aggregated with all
payments made under the Guarantee Agreement for purposes of determining
whether the limitations on liability set forth in the Guarantee Agreement
(and under this Agreement) have been satisfied.
8.5 Claims. As promptly as is reasonably practicable after becoming aware
of a claim for indemnification under this Agreement not involving a claim, or
the commencement of any suit, action or proceeding, of the type described in
Section 8.6, but in any event no later than ten (10) Business Days after first
becoming aware of such claim, the Indemnified Person shall give notice to the
Indemnifying Person of such claim, which notice shall specify the facts alleged
to constitute the basis for such claim, the representations, warranties,
covenants and obligations alleged to have been breached and the amount that the
Indemnified Person seeks hereunder from the Indemnifying Person, together with
such information as may be necessary for the Indemnifying Person to determine
that the limitations in Section 8.4 have been satisfied or do not apply;
provided, that the failure of the Indemnified Person to give such notice shall
not relieve the Indemnifying Person of its obligations under this Article VIII
except to the extent (if any) that the Indemnifying Person shall have been
prejudiced thereby.
8.6 Notice of Third Party Claims: Assumption of Defense. The Indemnified
Person shall give notice as promptly as is reasonably practicable, but in any
event no later than five (5) Business Days after receiving notice thereof, to
the Indemnifying Person of the assertion of any claim, or the commencement of
any suit, action or proceeding, by any Person not a party hereto in respect of
which indemnity may be sought under this Agreement (which notice shall specify
in reasonable detail the nature and amount of such claim together with such
information as may be necessary for the Indemnifying Person to determine that
the limitations in Section 8.4 have been satisfied or do not apply); provided,
that the failure of the Indemnified Person to give such notice shall not relieve
the Indemnifying Person of its obligations under this Article VIII except to the
extent (if any) that the Indemnifying Person shall have been prejudiced thereby.
The Indemnifying Person may, at its own expense, (a) participate in the defense
of any such claim, suit, action or proceeding and (b) upon notice to the
Indemnified Person, at any time during the course of any such claim, suit,
action or proceeding, assume the defense thereof with counsel of its own choice
and in the event of such assumption, shall have the exclusive right, subject to
clause (i) of Section 8.7, to settle or compromise such claim, suit, action or
proceeding. If the Indemnifying Person assumes such defense, the Indemnified
Person shall have the right (but not the duty) to participate in the defense
thereof and to employ counsel, at its own expense, separate from the counsel
employed by the Indemnifying Person. Whether or not the Indemnifying
36
Person chooses to defend or prosecute any such claim, suit, action or
proceeding, all of the parties hereto shall cooperate in the defense or
prosecution thereof.
8.7 Settlement or Compromise. Any settlement or compromise made or caused
to be made by the Indemnified Person (unless the Indemnifying Person has the
exclusive right to settle or compromise under clause (b) of Section 8.(6)) or
the Indemnifying Person, as the case may be, of any such claim, suit, action or
proceeding of the kind referred to in Section 8.6 shall also be binding upon the
Indemnifying Person or the Indemnified Person, as the case may be, in the same
manner as if a final judgment or decree had been entered by a court of competent
jurisdiction in the amount of such settlement or compromise; provided, that (i)
no obligation, restriction or Loss shall be imposed on the Indemnified Person as
a result of such settlement or compromise without its prior written consent,
which consent shall not be unreasonably withheld, and (ii) the Indemnified
Person will not compromise or settle any claim, suit, action or proceeding
without the prior written consent of the Indemnifying Person, which consent
shall not be unreasonably withheld.
8.8 Time Limits. Any right to indemnification or other recovery under this
Article VIII shall only apply to Losses with respect to which the Indemnified
Person shall have notified the Indemnifying Person within the applicable time
period set forth in Section 8.2 or 8.3, as the case may be. If any claim for
indemnification or other recovery is timely asserted under this Article VIII,
the Indemnified Person shall have the right to bring an action, suit or
proceeding with respect to such claim within one year after first giving the
Indemnifying Person notice thereof, but may not bring any such action, suit or
proceeding thereafter.
8.9 Knowledge. Notwithstanding anything contained herein to the contrary,
no party shall have (a) any liability for any breach of or inaccuracy in any
representation or warranty by such party, if the other party or any of its
officers, employees, counsel or other representatives (i) had knowledge at or
before the Closing of the facts as a result of which such representation or
warranty was breached or inaccurate or (ii) received at or before the Closing a
document disclosing such facts or (b) any liability after the Closing for any
breach of or failure to perform any covenant or obligation of such party if the
other party or any of its officers, employees, counsel or other representatives
(i) had knowledge at or before the Closing of such breach or failure or (ii)
received at or before the Closing a document disclosing such breach or failure.
8.10 Net Losses and Subrogation.
(a) Notwithstanding anything contained herein to the contrary, the
amount of any Losses incurred or suffered by any Indemnified Person shall
be calculated after giving effect to (i) any insurance proceeds received
by the Indemnified Person (or any of its Affiliates) with respect to such
Losses, (ii) any Tax benefit realized by the Indemnified Person (or any of
its Affiliates) arising from the facts or circumstances giving rise to
such Losses and (iii) any recoveries obtained by the Indemnified Person
(or any of its Affiliates) from any other third party. Each Indemnified
Person shall exercise commercially reasonable efforts to obtain such
proceeds, benefits and recoveries. If any such proceeds, benefits or
recoveries are received by an Indemnified Person (or any of its
Affiliates) with respect to any Losses after an Indemnifying Person has
made a payment to the Indemnified Person with respect thereto, the
Indemnified Person (or such Affiliate)
37
shall pay to the Indemnifying Person the amount of such proceeds, benefits
or recoveries (up to the amount of the Indemnifying Person's payment).
(b) Upon making any payment to an Indemnified Person in respect of
any Losses, the Indemnifying Person will, to the extent of such payment,
be subrogated to all rights of the Indemnified Person (and its Affiliates)
against any third party in respect of the Losses to which such payment
relates. Such Indemnified Person (and its Affiliates) and Indemnifying
Person will execute upon request all instruments reasonably necessary to
evidence or further perfect such subrogation rights.
8.11 Purchase Price Adjustments. To the extent permitted by Law, any
amounts payable under Section 8.2 or Section 8.3 shall be treated by Purchaser
and Seller as an adjustment to the Purchase Price.
ARTICLE IX
MISCELLANEOUS
9.1 Expenses. Each party hereto shall bear its own fees and expenses with
respect to the transactions contemplated hereby, provided, that Purchaser shall
pay (a) all sales, use, value added, stamp, transfer, service, recording and
like taxes and fees imposed by any Governmental Authority in connection with the
transfer and assignment of the Purchased Assets and (b) all costs of obtaining
surveys and title commitments and insurance and all applicable recording fees
with respect to the Non-Commercial Real Property.
9.2 Amendment. This Agreement may be amended, modified or supplemented but
only in writing signed by Purchaser and Seller.
9.3 Notices. Any notice, request, instruction or other document to be
given hereunder by a party hereto shall be in writing and shall be deemed to
have been given, (a) when received if given in person or by courier or a courier
service, or (b) on the date of transmission if sent by facsimile transmission
(receipt confirmed) on a Business Day during or before the normal business hours
of the intended recipient, and if not so sent on such a day and at such a time,
on the following Business Day:
(i) If to Purchaser, addressed as follows:
Xxxxx Xxxxxx Building Products, Inc.
00000 Xx Xxxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
38
with a copy to:
Xxxxxx Xxxxx LLP
0000 Xxxxxxxx Xxxxx, 0xx Xxxxx
XxXxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(ii) If to Seller, addressed as follows:
Cemplank, Inc.
c/o Maiden Creek, Inc.
X.X. Xxx 0000
Xxxxxxx Xxxxxx, XX 00000-0000
Attention: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.
9.4 Payments in Dollars. Except as otherwise provided herein or in a
Related Agreement, all payments pursuant hereto shall be made by wire transfer
in Dollars in same day or immediately available funds without any set-off,
deduction or counterclaim whatsoever.
9.5 Waivers. The failure of a party hereto at any time or times to
require performance of any provision hereof shall in no manner affect its right
at a later time to enforce the same. No waiver by a party of any condition or of
any breach of any term, covenant, representation or warranty contained in this
Agreement shall be effective unless in writing, and no waiver in any one or more
instances shall be deemed to be a further or continuing waiver of any such
condition or breach in other instances or a waiver of any other condition or
breach of any other term, covenant, representation or warranty.
9.6 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns; provided, that no assignment
39
of any rights or obligations hereunder, by operation of law or otherwise, shall
be made by either party without the written consent of the other party.
9.7 Third Party Beneficiaries. International Building Materials, S.A.
shall be a third party beneficiary of this Agreement and shall be entitled to
enforce the rights granted to Seller to the full extent enforceable by Seller.
Redco S.A. and Xxxxxxx X.X. shall be third party beneficiaries with respect to
Article VIII of this Agreement and shall be entitled to enforce the rights
granted thereunder to the full extent enforceable by Seller. Other than as
specifically described in this Section 9.7, this Agreement is solely for the
benefit of the parties hereto and, to the extent provided herein, their
respective Affiliates, and no provision of this Agreement shall be deemed to
confer upon other third parties any remedy, claim, liability, reimbursement,
cause of action or other right.
9.8 Publicity. Prior to the Closing Date, no public announcement or other
publicity regarding the existence of this Agreement or its contents or the
transactions contemplated hereby shall be made by Purchaser, Seller or any of
their respective Affiliates, officers, directors, employees, representatives or
agents, without the prior written agreement of Purchaser and Seller, in any
case, as to form, content, timing and manner of distribution or publication. On
and after the Closing Date, each of Seller and Purchaser agree to hold
confidential the terms and provisions of this Agreement and the terms of the
transactions contemplated hereby. Notwithstanding the foregoing, nothing in this
Section 9.8 shall prevent either party or its Affiliates from (a) making any
public announcement or disclosure required by Law or the rules of any stock
exchange, (b) discussing this Agreement or its contents or the transactions
contemplated hereby with officers, directors, employees, representatives and
agents of such party and its Affiliates and with those Persons whose approval,
agreement or opinion, as the case may be, is required for consummation of such
particular transaction or transactions, or (c) enforcing its rights hereunder.
9.9 Further Assurances. Upon the reasonable request of Purchaser, Seller
shall on and after the Closing Date execute and deliver to Purchaser such deeds,
assignments and other instruments as may be reasonably requested by Purchaser
and are required to effectuate completely the transfer and assignment to
Purchaser of Seller's right, title and interest in and to each of the Purchased
Assets, and to otherwise carry out the purposes of this Agreement.
9.10 Severability. If any provision of this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality or enforceability of
the other provisions hereof shall not be affected thereby, and there shall be
deemed substituted for the provision at issue a valid, legal and enforceable
provision as similar as possible to the provision at issue.
9.11 Entire Understanding. This Agreement, the Related Agreements and the
documents specifically listed in Article VII set forth the entire agreement and
understanding of the parties hereto with respect to the transactions
contemplated hereby and supersede any and all prior agreements, arrangements and
understandings among the parties relating to the subject matter hereof.
40
9.12 Language. Seller and Purchaser agree that the language used in this
Agreement is the language chosen by the parties to express their mutual intent,
and that no rule of strict construction is to be applied against Seller or
Purchaser.
9.13 Applicable Law. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York without
giving effect to the principles of conflicts of law thereof, except that South
Carolina law shall govern with respect to the transfer of title by Seller to
Purchaser of the Non-Commercial Real Property.
9.14 Remittances. All remittances, payments, mail and other communications
relating to the Purchased Assets or the Assumed Obligations received by Seller
at any time after the Closing Date shall be promptly turned over to Purchaser by
Seller. All remittances, payments, mail and other communications relating to the
Excluded Assets or the Excluded Obligations received by Purchaser at any time
after the Closing Date shall be promptly turned over to Seller by Purchaser.
9.15 Bulk Sales. Purchaser hereby waives compliance by Seller with the
provisions of the Laws of any jurisdiction relating to the bulk sale or transfer
of assets that may be applicable to the transfer of the Purchased Assets.
9.16 Jurisdiction of Disputes; Waiver of Jury Trial. In the event either
party to this Agreement commences any litigation, proceeding or other legal
action in connection with or relating to this Agreement, any Related Agreement
or any matters contemplated hereby or thereby, each party to this Agreement
hereby (a) agrees that any such litigation, proceeding or other legal action may
be brought in a court of competent jurisdiction located within the County of New
York, in the State of New York, whether a state or federal court; (b) agrees
that in connection with any such litigation, proceeding or action, such party
will consent and submit to personal jurisdiction in any such court described in
clause (a) of this Section 9.16 and to service of process upon it in accordance
with the rules and statutes governing service of process; (c) agrees to waive to
the full extent permitted by law any objection that it may now or hereafter have
to the venue of any such litigation, proceeding or action in any such court or
that any such litigation, proceeding or action was brought in an inconvenient
forum; (d) designates, appoints and directs CT Corporation System as its
authorized agent to receive on its behalf service of any and all process and
documents in any such litigation, proceeding or action in the State of New York;
(e) agrees to notify the other party to this Agreement immediately if such agent
shall refuse to act, or be prevented from acting, as agent and, in such event,
promptly to designate another agent in the State of New York to serve in place
of such agent and deliver to the other party written evidence of such substitute
agent's acceptance of such designation; (f) agrees as an alternative method of
service to service of process in any such litigation, proceeding or action by
mailing of copies thereof to such party at its address set forth in Section 9.3;
(g) agrees that any service made as provided herein shall be effective and
binding service in every respect; and (h) agrees that nothing herein shall
affect the rights of either party to effect service of process in any other
manner permitted by Law. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY JURY
IN ANY DISPUTE IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, ANY RELATED
AGREEMENT OR ANY MATTERS CONTEMPLATED HEREBY OR THEREBY, AND AGREES TO TAKE ANY
AND ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH WAIVER.
41
9.17 Schedules. Any information disclosed pursuant to any Schedule hereto
or otherwise disclosed to Purchaser in writing shall be deemed to be disclosed
to Purchaser for all purposes of this Agreement. Neither the specification of
any Dollar amount or any item or matter in any provision of this Agreement nor
the inclusion of any specific item or matter in any Schedule hereto is intended
to imply that such amount, or higher or lower amounts, or the item or matter so
specified or included, or other items or matters, are or are not material, and
no party shall use the fact of the specification of any such amount or the
specification or inclusion of any such item or matter in any dispute or
controversy between the parties as to whether any item or matter not specified
herein or included in any Schedule hereto is or is not material for purposes of
this Agreement. Neither the specification of any item or matter in any provision
of this Agreement nor the inclusion of any specific item or matter in any
Schedule hereto is intended to imply that such item or matter, or other items or
matters, are or are not in the Ordinary Course of Business, and no party shall
use the fact of the specification or the inclusion of any such item or matter in
any dispute or controversy between the parties as to whether any item or matter
not specified herein or included in any Schedule hereto is or is not in the
Ordinary Course of Business for purposes of this Agreement.
9.18 Disclaimer of Warranties. Seller makes no representations or
warranties with respect to any projections, forecasts or forward-looking
statements provided to Purchaser. There is no assurance that any projected or
forecasted results will be achieved. EXCEPT TO THE EXTENT OF THE EXPRESS
REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE IV, SELLER IS SELLING THE
PURCHASED ASSETS ON AN "AS IS, WHERE IS" BASIS AND DISCLAIMS ALL OTHER
WARRANTIES, REPRESENTATIONS AND GUARANTEES, WHETHER EXPRESS OR IMPLIED. SELLER
MAKES NO REPRESENTATION OR WARRANTY AS TO MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE AND NO IMPLIED WARRANTIES WHATSOEVER. Purchaser acknowledges
and agrees that neither Seller, its Affiliates, any of their representatives nor
any other Person has made any representation or warranty, express or implied, as
to the accuracy or completeness of any memoranda, charts, summaries, schedules
or other information heretofore made available by Seller, its Affiliates or
their representatives to Purchaser, any of its Affiliates or their
representatives (including the Confidential Information Memorandum dated May
2001 prepared by Bear, Xxxxxxx & Co. Inc.) or any information that is not
included in this Agreement or the Schedules hereto, and neither Seller, its
Affiliates, any of their representatives nor any other Person will have or be
subject to any liability to Purchaser, any of its Affiliates or their
representatives resulting from the distribution of any suck information to, or
the use of any such information by, Purchaser, any of its Affiliates or any of
their agents, consultants, accountants, counsel or other representatives.
9.19 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase
Agreement to be executed and delivered as of the date first above written.
XXXXX XXXXXX BUILDING PRODUCTS, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Attorney-in-Fact
CEMPLANK, INC.
By: /s/ Toussaint P. Dolmans
--------------------------------
Name: Toussaint P. Dolmans
Title: President
43
