Exhibit 10.1
PURCHASE AGREEMENT
BY AND AMONG
X.X. XXXXXXXX, INC.,
MOUNTAIN CAPITAL CORPORATION
AND
THE SHAREHOLDERS OF MOUNTAIN CAPITAL CORPORATION
LISTED ON THE SIGNATURE PAGES HERETO
Dated as of February 28, 2002
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PURCHASE AGREEMENT
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THIS PURCHASE AGREEMENT is made as of the 28th day of February,
2002, by and among X.X. Xxxxxxxx, Inc., an Illinois corporation ("GWW"),
Mountain Capital Corporation, a Nevada corporation ("MCC"), and the
shareholders of MCC listed on the signature pages hereto (collectively, the
"MCC Shareholders").
W I T N E S S E T H:
- - - - - - - - - -
A. The sole assets of MCC consist of cash, 4,801,600 shares of GWW
Common Stock (as hereinafter defined) and certain Excluded Assets (as
hereinafter defined). The MCC Shareholders own all of the issued and
outstanding shares of capital stock of MCC.
B. MCC and the MCC Shareholders have proposed that GWW and MCC
effect a transaction whereby MCC shall transfer to GWW, free and clear of
all Liens (as hereinafter defined) and Liabilities (as hereinafter
defined), certain assets owned by MCC (not including the Excluded Assets)
at the Closing (as hereinafter defined), and GWW shall transfer to MCC, in
exchange for those certain assets owned by MCC, a number of shares of GWW
Common Stock to be determined in accordance with Section 2.3(a) (the
"Acquisition"), following which MCC shall distribute all of its assets to
the MCC Shareholders pursuant to a complete liquidation of MCC.
C. GWW and MCC have determined that the Acquisition is advisable and
in the best interests of GWW and MCC, respectively, and their respective
shareholders.
D. GWW, MCC and the MCC Shareholders desire to consummate the
Acquisition upon the terms and subject to the conditions set forth in this
Agreement.
E. MCC and the MCC Shareholders intend that the Acquisition and
the Liquidation (as hereinafter defined) shall constitute a reorganization
within the meaning of Section 368(a)(1)(C) and Section 368(a)(2)(G) of the
United States Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained and
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties to this Agreement agree as follows:
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ARTICLE I
DEFINITIONS
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1.1 Definitions. The following terms shall have the following
meanings for the purposes of this Agreement:
"Acquisition" shall have the meaning set forth in the recitals
hereto.
"Affiliate" shall mean, with respect to any specified Person, (i)
any other Person which, directly or indirectly, owns or controls, is under
common ownership or control with, or is owned or controlled by, such
specified Person, (ii) any other Person which is a director, officer or
partner, or is, directly or indirectly, the beneficial owner of ten percent
(10%) or more of any class of equity securities, of the specified Person or
a Person described in clause (i) of this paragraph, (iii) another Person of
which the specified Person is a director, officer or partner or is,
directly or indirectly, the beneficial owner of ten percent (10%) or more
of any class of equity securities, (iv) another Person in which the
specified Person has a substantial beneficial interest or as to which the
specified Person serves as trustee or in a similar capacity or (v) any
relative or spouse of the specified Person or any of the foregoing Persons,
any relative of such spouse or any spouse of any such relative. For
purposes of this Agreement, GWW shall not be deemed an Affiliate of MCC or
any MCC Shareholder.
"Agreement" shall mean this Purchase Agreement, including all
exhibits and schedules hereto, as it may be amended from time to time in
accordance with its terms.
"Arrangement" shall mean any retirement or deferred compensation,
incentive compensation, stock, unemployment compensation, vacation pay,
severance pay, change of control, bonus, benefit, insurance, medical,
health, life, death, hospitalization, or any other fringe benefit plan,
agreement or arrangement for any current or former employee, director,
consultant or agent, whether pursuant to a Contract, arrangement, custom or
informal understanding.
"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 Chicago,
Illinois are authorized or required to be closed for business.
"Closing" shall mean the consummation of the Acquisition in
accordance with Article VI.
"Closing Date" shall have the meaning set forth in Section 6.1.
"Closing Market Price" shall mean the closing per share sale price
for shares of GWW Common Stock on February 20, 2002 as reported in the
table of New York Stock Exchange composite transactions as published in The
Wall Street Journal.
"Code" shall have the meaning set forth in the recitals hereto.
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"Contract" shall mean any contract, arrangement, commitment,
understanding, lease, sales order, purchase order, agreement, warranty,
indenture, mortgage, note, bond, right, warrant or instrument, whether
written or verbal.
"Determined Expense Amount" shall have the meaning set forth in
Section 2.5(b).
"Environmental Law" shall mean any Law that imposes liability or
standards of conduct concerning, or otherwise relates to, discharges,
emissions, releases or threatened releases of noises, odors or any
pollutants, contaminants or hazardous or toxic wastes, substances or
materials, whether as matter or energy, into ambient air, water or land, or
otherwise relating to the manufacture, processing, generation,
distribution, use, treatment, storage, disposal, cleanup, transport or
handling of pollutants, contaminants or hazardous or toxic wastes,
substances or materials, 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,
any so-called "Superfund" or "Superlien" Law (including those already
referenced in this definition), the California Hazardous Waste Act, the
California Health & Safety Code, Section 25100, et seq. and Section 25300,
et seq., the California Hazardous Substance Account Act, and any other Law,
including any other California statute, regulation or ordinance, having a
similar subject matter.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" shall mean, with respect to any Person, any
corporation, trade or business which, together with such Person, is a
member of a controlled group of corporations or a group of trades or
businesses under common control within the meaning of sections 414(b) or
(c) of the Code.
"Escrow Agent" shall mean American National Bank and Trust Company
of Chicago, a national banking association.
"Escrow Agreement" shall mean the Escrow Agreement, dated as of
the date hereof, among GWW, MCC, the MCC Shareholders and the Escrow Agent.
"Escrow Liquidation Notice" shall have the meaning set forth in
Section 2.6(c).
"Escrow Shares" shall have the meaning set forth in Section
2.3(b).
"Excluded Assets" shall mean (i) all bank accounts of MCC
(including any cash held in such accounts other than the MCC Cash); (ii)
minute books, capital stock records, tax records, certificates of
incorporation, by-laws, the corporate seal, annual and other corporate
reports and other books and records of MCC; (iii) all capital stock to be
received by MCC from GWW and all other rights of MCC under this Agreement;
(iv) any federal, state or local income tax credits and refunds in favor of
MCC; (v) all claims, causes of action, choses in action, rights of recovery
and rights of set-off of every kind and nature to the extent related to
Liabilities retained by MCC; and (vi) all declared but unpaid dividends on
the Old GWW Shares.
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"Financial Statements" shall mean the unaudited financial
statements of MCC as of December 31, 2001, consisting of the balance sheet
at such date and the related profit and loss statement for the fiscal year
then ended.
"Governmental Authority" shall mean the government of the United
States or any foreign country or any state or political subdivision of the
United States or any foreign country and any other entity, body, agency or
authority exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including any
quasi-governmental entity established to perform such functions.
"GWW" shall have the meaning set forth in the preamble hereto.
"GWW Common Stock" shall mean the Common Stock, par value $.50 per
share, of GWW.
"GWW Expense Reimbursement Amount" shall have the meaning set
forth in Section 2.5(b).
"GWW Indemnified Parties" shall mean GWW, each of its Subsidiaries
and Affiliates and each of their respective officers, directors,
shareholders, employees, agents and representatives; provided, that in no
event shall MCC or any MCC Shareholder be deemed a GWW Indemnified Party.
"GWW Tax Certificate" shall have the meaning set forth in Section
6.3(c).
"Hazardous Substance" shall mean any material or substance which
(i) constitutes a hazardous substance, toxic substance or pollutant (as
such terms are defined by or pursuant to any Environmental Law) or (ii) is
regulated or controlled as a hazardous substance, toxic substance,
pollutant or other regulated or controlled material, substance or matter
pursuant to any Environmental Law.
"Indemnified Person" shall mean the Person or Persons entitled to,
or claiming a right to, indemnification under Article VII.
"Indemnifying Person" shall mean the Person or Persons claimed by
the Indemnified Person to be obligated to provide indemnification under
Article VII.
"IRS" shall mean the United States Internal Revenue Service.
"Latest Balance Sheet" shall mean the unaudited balance sheet of
MCC dated as of December 31, 2001.
"Law" shall mean any law (including the common law), statute,
regulation, ordinance, rule, order, decree, judgment, consent decree,
settlement agreement or governmental requirement enacted, promulgated,
entered into, agreed or imposed by any Governmental Authority.
"Liability" shall mean any past, present or future liability or
obligation (whether known or unknown, whether asserted or unasserted,
whether absolute, fixed, contingent or otherwise, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability or obligation for Taxes.
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"Lien" shall mean any lien, mortgage, charge, restriction, pledge,
security interest, option, lease, sublease or right of any third party,
other than any restriction arising under federal or state securities laws.
"Liquidation" shall have the meaning set forth in Section 2.6(a).
"Liquidation Notice" shall have the meaning set forth in Section
2.6(b).
"Loss" or "Losses" shall mean any and all losses, Liabilities,
costs, claims, damages, penalties and expenses (including reasonable
attorneys' fees and expenses and reasonable costs of investigation and
litigation). In the event any of the foregoing are indemnifiable hereunder,
the terms "Loss" and "Losses" shall include any and all reasonable
attorneys' fees and expenses and reasonable costs of investigation and
litigation incurred by the Indemnified Person in enforcing such indemnity.
The amount of any Loss or Losses incurred or suffered by the Indemnified
Person shall be calculated after giving effect to (i) any insurance
proceeds received by the Indemnified Person with respect to such Loss or
Losses and (ii) any net Tax benefit or detriment realized by the
Indemnified Person arising from the facts or circumstances giving rise to
such Loss or Losses or arising from indemnification for such Loss or
Losses.
"MCC" shall have the meaning set forth in the preamble hereto.
"MCC Cash" shall have the meaning set forth in Section 2.1.
"MCC Common Stock" shall have the meaning set forth in Section
3.4(a).
"MCC Escrow Certificates" shall have the meaning set forth in
Section 2.3(b).
"MCC Representative" shall have the meaning set forth in Section
8.13.
"MCC Shareholder" shall have the meaning set forth in the preamble
hereto.
"MCC Shareholder Escrow Certificate" shall have the meaning set
forth in Section 2.6(c).
"New GWW Shares" shall have the meaning set forth in Section
2.3(a).
"Old GWW Shares" shall have the meaning set forth in Section 2.1.
"Permit" shall mean any permit, license, approval, consent or
other authorization required or granted by any Governmental Authority.
"Person" shall mean any individual, corporation, proprietorship,
firm, partnership, limited partnership, limited liability company, trust,
association or other entity.
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"Plan" shall mean any "employee welfare benefit plan" or "employee
pension benefit plan" as those terms are respectively defined in sections
3(1) and 3(2) of ERISA, or any "multiemployer plan" (as defined in section
3(37) of ERISA).
"Plan of Liquidation" shall have the meaning set forth in Section
3.11.
"Pledge" shall mean the pledge of the Old GWW Shares by MCC to
Union Bank as collateral security for MCC's indebtedness to Union Bank
under the Union Bank Credit Facility pursuant to the Security Agreement
(Investment Securities), dated as of June 9, 2000, between MCC and Union
Bank.
"Purchased Assets" shall have the meaning set forth in Section
2.1.
"Related Agreement" shall have the meaning set forth in Section
7.1.
"SEC Filings" shall have the meaning set forth in Section 3.17.
"Securities Act" shall have the meaning set forth in Section 3.17.
"Securities Act Legend" shall mean the legend set forth in Section
2.10(i).
"Share Transfer Restriction Agreement" shall mean the Share
Transfer Restriction Agreement, dated as of the date hereof, among GWW, the
MCC Shareholders and the other signatories thereto.
"Share Transfer Restriction Agreement Legend" shall mean the
legend set forth in Section 2.10(ii).
"Subsidiary" shall mean, with respect to any Person, any
corporation or other entity, whether incorporated or unincorporated, of
which (i) such Person or any other Subsidiary of such Person is a general
partner or (ii) at least a majority of the securities or other interests
having by their terms ordinary voting power to elect a majority of the
board of directors or others performing similar functions with respect to
such corporation or other entity is, directly or indirectly, owned or
controlled by such Person or by any one or more of its Subsidiaries, or by
such Person and any one or more of its Subsidiaries.
"Taxes" shall mean all taxes, charges, fees, duties (including
customs 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, leasing, lease, user, transfer, fuel, excess
profits, occupational, interest equalization, windfall profits, severance,
license, payroll, environmental, capital stock, disability, employee's
income withholding, other withholding, 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.
"Tax Return" shall mean any report, return or other information
required to be supplied to a Governmental Authority in connection with any
Taxes.
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"Union Bank" shall mean Union Bank of California, N.A.
"Union Bank Closing Confirmation" shall have the meaning set forth
in Section 2.4.
"Union Bank Credit Facility" shall mean the Loan Agreement, dated
as of June 9, 2000, between MCC and Union Bank and the revolving promissory
note of MCC related thereto, dated as of June 9, 2000, in the original
principal amount of $3 million.
"Union Bank Debt Amount" shall have the meaning set forth in
Section 2.4.
"Union Bank Notice" shall have the meaning set forth in Section
2.4.
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 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. Reference to any Law
means such Law as amended, modified, codified, replaced or re-enacted, in
whole or in part, including rules, regulations, enforcement procedures and
any interpretations promulgated thereunder. Underscored references to
Articles, Sections, Subsections, 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 or clause of or Exhibit or
Schedule to this Agreement. No specific representation, warranty or
covenant contained herein shall limit the generality or applicability of a
more general representation, warranty or covenant contained herein. A
breach of or inaccuracy in any representation, warranty or covenant shall
not be affected by the fact that any more general or less general
representation, warranty or covenant was not also breached or inaccurate.
ARTICLE II
ACQUISITION; RELATED TRANSACTIONS
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2.1. Sale and Purchase of Purchased Assets. Subject to the terms and
conditions of this Agreement, at and as of the Closing, MCC shall sell,
assign, transfer and deliver to GWW, free and clear of all Liens and
Liabilities, 4,801,600 shares of GWW Common Stock (the "Old GWW Shares")
and cash in such amount as MCC shall specify to GWW in writing at least two
Business Days prior to the Closing Date (the "MCC Cash," and together with
the Old GWW Shares, the "Purchased Assets"), and GWW shall purchase, and
accept the assignment, transfer and delivery of, the Purchased Assets.
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2.2. Delivery of Purchased Assets by MCC. At the Closing, MCC shall
effect the sale of the Purchased Assets to GWW by delivering to GWW (i)
certificates registered in the name of MCC representing all of the Old GWW
Shares, which certificates shall be duly endorsed for transfer or
accompanied by duly executed stock powers and (ii) the MCC Cash, which
shall be delivered to GWW by electronic wire transfer to such account or
accounts as GWW shall specify to MCC in writing prior to the Closing Date.
2.3. Payment for Purchased Assets by GWW.
(a) At the Closing, as aggregate and complete consideration for the
sale of the Purchased Assets by MCC, GWW shall (i) pay to Union Bank the
Union Bank Debt Amount pursuant to Section 2.4 and (ii) transfer to MCC a
number of shares of GWW Common Stock, consisting entirely of shares held in
the treasury of GWW ( the "New GWW Shares"), equal to the number of Old GWW
Shares less the sum of (A) a number equal to one and one-half percent
(1.50%) of the number of the Old GWW Shares, (B) a number equal to the GWW
Expense Reimbursement Amount divided by the Closing Market Price and (C) a
number equal to the Union Bank Debt Amount divided by the Closing Market
Price.
(b) GWW shall effect the delivery of the New GWW Shares to MCC by
delivering (i) to MCC certificates registered in the name of MCC
representing ninety percent (90%) of the New GWW Shares and (ii) to the
Escrow Agent, on behalf of MCC, certificates registered in the name of MCC
(the "MCC Escrow Certificates") representing ten percent (10%) of the New
GWW Shares (the "Escrow Shares"), in each case containing the Securities
Act Legend and the Share Transfer Restriction Agreement Legend.
Contemporaneous with such deliveries, MCC shall deliver to the Escrow Agent
such reasonable number of duly executed stock powers (undated and in blank,
with Medallion guarantee) relating to the Escrow Shares as GWW shall
request.
2.4. Payment of Union Bank Loan by GWW. At or prior to the Closing,
MCC shall cause Union Bank to provide a written notice (the "Union Bank
Notice") to GWW and MCC that identifies the total amount necessary to pay
in full all outstanding indebtedness (including principal, interest and any
prepayment fee) of MCC to Union Bank under the Union Bank Credit Facility
as of the Closing Date (the "Union Bank Debt Amount") and sets forth wire
transfer instructions for payment of the Union Bank Debt Amount. At the
Closing, GWW shall pay to Union Bank, for the account of MCC, an amount
equal to the Union Bank Debt Amount by electronic wire transfer to such
account or accounts specified in the Union Bank Notice. Promptly upon Union
Bank's receipt of the Union Bank Debt Amount, MCC shall cause Union Bank to
deliver to MCC and GWW written confirmation that (i) all indebtedness of
MCC to Union Bank (including all Liabilities of MCC under the Union Bank
Credit Facility, including any prepayment fee) has been paid in full and
(ii) all Liens upon the Old GWW Shares (including the Pledge) under the
Union Bank Credit Facility and under any and all other Contracts to which
Union Bank is a party or of which Union Bank is a beneficiary, have been
satisfied and released (the "Union Bank Closing Confirmation").
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2.5. Payment of Transaction Expenses by MCC.
(a) MCC and the MCC Shareholders jointly and severally shall
reimburse GWW for all of GWW's reasonable out-of-pocket costs and expenses
(including legal, investment banking, accounting, auditing, transfer agent
and other advisory or professional fees and expenses) paid and to be paid
to third parties, and documented in summary form by GWW to the reasonable
satisfaction of MCC, in connection with this Agreement, the Escrow
Agreement and the Share Transfer Restriction Agreement and the transactions
contemplated hereby and thereby. MCC shall also pay all sales, use, stamp,
transfer, service, recording and like Taxes, if any, imposed by any
Governmental Authority in connection with the transfer and assignment of
the Old GWW Shares or the New GWW Shares.
(b) Not later than February 21, 2002, GWW and MCC shall make a joint
good faith determination of all known reimbursable costs and expenses incurred
and to be incurred by GWW in connection with the Acquisition (the
"Determined Expense Amount"). The MCC Cash to be received by GWW at Closing
shall be applied to MCC's obligation to reimburse GWW for the Determined
Expense Amount. In the event that the MCC Cash is less than the Determined
Expense Amount, GWW and MCC shall calculate the remainder of the Determined
Expense Amount less the MCC Cash, and such remainder (the "GWW Expense
Reimbursement Amount") shall be used to calculate the number of New GWW
Shares to be transferred by GWW to MCC as provided in Section 2.3(a) and
MCC's obligation to reimburse GWW for the GWW Expense Reimbursement Amount
shall be deemed thereby satisfied. Other than as provided in the next
sentence, nothing in this Section 2.5(b) shall limit or otherwise affect
the obligation of MCC and the MCC Shareholders to reimburse GWW for costs,
expenses and other amounts described in Section 2.5(a) in excess of the
Determined Expense Amount. MCC and the MCC Shareholders shall have no
obligation to reimburse GWW for any legal, investment banking, accounting,
auditing, transfer agent or other advisory or professional fees and
expenses beyond those included in the Determined Expense Amount; provided,
however, that nothing in this Section 2.5 shall limit or otherwise affect
(i) the obligations of MCC and the MCC Shareholders to indemnify the GWW
Indemnified Parties for any and all such fees and expenses that represent
Losses incurred or suffered on or after the date hereof by any or all of
the GWW Indemnified Parties pursuant to Section 7.2 or (ii) the obligations
of the MCC Shareholders to indemnify the GWW Indemnified Parties for any
and all such fees and expenses that represent Losses (as defined in the
Share Transfer Restriction Agreement) incurred or suffered on or after the
date hereof by any or all of the GWW Indemnified Parties pursuant to
Section 8.2 of the Share Transfer Restriction Agreement.
2.6. Liquidation; Replacement of Escrow Certificates.
(a) At the Closing, immediately following the consummation of the
Acquisition and MCC's and the Escrow Agent's receipt of the certificates
representing the New GWW Shares pursuant to Section 2.3(b), MCC may
transfer and distribute all of its assets, consisting of the New GWW Shares
and the Excluded Assets, to the MCC Shareholders pursuant to a complete
liquidation of MCC as provided in the Plan of Liquidation of MCC (the
"Liquidation").
(b) In consummation of the Liquidation, MCC shall deliver to GWW
(i) a written notice to GWW confirming that the Liquidation has become
effective and setting forth the number of New GWW Shares (other than the
Escrow Shares) that each MCC Shareholder is entitled to receive in
connection with the Liquidation (the "Liquidation Notice") and (ii)
certificates registered in the name of MCC representing all of the New GWW
Shares (other than the Escrow Shares), which certificates shall be duly
endorsed for transfer or accompanied by duly executed stock powers. As soon
as practicable following GWW's receipt of the Liquidation Notice and the
certificates representing the New GWW Shares (other than the Escrow
Shares), GWW shall deliver to each MCC Shareholder one or more certificates
registered in the name of each such MCC Shareholder, containing the
Securities Act Legend and the Share Transfer Restriction Agreement Legend,
representing the number of New GWW Shares (other than the Escrow Shares)
entitled to be received by such MCC Shareholder as designated by MCC
pursuant to the Liquidation Notice.
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(c) MCC shall effect the distribution of the Escrow Shares to the
MCC Shareholders in the Liquidation by (i) delivering to GWW and the Escrow
Agent a written notice confirming that the Plan of Liquidation has become
effective and setting forth the number of Escrow Shares that each MCC
Shareholder is entitled to receive in connection with the Liquidation (the
"Escrow Liquidation Notice") and (ii) delivering to GWW such reasonable
number of duly executed stock powers (undated and in blank, with Medallion
guarantee) from each MCC Shareholder as GWW shall request, which stock
powers shall relate to the Escrow Shares to be received by such MCC
Shareholder as designated by MCC pursuant to the Escrow Liquidation Notice.
As soon as practicable following GWW's receipt of the Escrow Liquidation
Notice and the stock powers from each MCC Shareholder relating to the
Escrow Shares, (i) GWW shall deliver to the Escrow Agent the certificates
evidencing the Escrow Shares to which the MCC Shareholders are entitled as
designated by MCC pursuant to the Escrow Liquidation Notice (each, an "MCC
Shareholder Escrow Certificate"), accompanied by each MCC Shareholder's
duly executed stock powers relating to the Escrow Shares, which
certificates shall replace the MCC Escrow Certificates held by the Escrow
Agent in the Escrow Fund (as defined in the Escrow Agreement) and (ii) GWW
and the Escrow Agent shall cause the MCC Escrow Certificates to be
cancelled.
2.7. Escrow Agreement. The Escrow Shares represented by the MCC
Escrow Certificates shall be pledged by MCC to GWW pursuant to the terms of
the Escrow Agreement to serve as security for the obligations and
liabilities of MCC and the MCC Shareholders set forth in Article VII. The
Escrow Shares represented by the MCC Shareholder Escrow Certificates shall
be pledged by each such MCC Shareholder to GWW pursuant to the terms of the
Escrow Agreement to serve as security for the obligations and liabilities
of MCC and the MCC Shareholders set forth in Article VII.
2.8. No Liabilities Assumed. Notwithstanding the terms of Section 2.4
and notwithstanding anything else in this Agreement, neither GWW nor any of
its Affiliates shall assume or otherwise be liable in respect of, or be
deemed to have assumed or otherwise be liable in respect of, any debt,
obligation or other Liability of, or claim against, MCC or any of its
Affiliates or shareholders whatsoever, including (i) any Liability of MCC
to Union Bank or to any other Person and (ii) any Liability for Taxes of
MCC or any of its Affiliates or shareholders.
2.9. No Fractional Shares.
(a) No certificates representing fractional shares of GWW Common
Stock shall be issued in connection with the Acquisition.
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(b) In lieu of the transfer by GWW to MCC of any fractional New GWW
Shares as payment for the Purchased Assets in the Acquisition, the number
of New GWW Shares resulting from the calculation set forth in Section
2.3(a) shall be rounded up to the nearest whole share.
(c) In lieu of the distribution by MCC to the MCC Shareholders of any
fractional New GWW Shares in connection with the Liquidation, MCC shall
specify the manner of distributing the New GWW Shares to the MCC
Shareholders such that each MCC Shareholder shall receive a whole number of
New GWW Shares.
(d) In lieu of the deposit by GWW, on behalf of MCC or the MCC
Shareholders, as the case may be, with the Escrow Agent of any fractional
New GWW Shares designated as Escrow Shares in connection with the Escrow
Agreement, the number of shares to be so deposited as Escrow Shares
thereunder shall be rounded up to the nearest whole share. The Escrow
Liquidation Notice provided by MCC to GWW and the Escrow Agent upon the
consummation of the Liquidation shall provide for each MCC Shareholder to
be entitled to receive a whole number of Escrow Shares.
2.10. Legends. For so long as the restrictions described below are
applicable to such shares as determined by GWW in GWW's reasonable
discretion, each certificate of GWW Common Stock representing New GWW
Shares (including the Escrow Shares) shall be stamped or otherwise
imprinted with legends in substantially the following forms:
(i) Securities Act Legend: "These securities have been
obtained from the issuer in a transaction not involving
a public offering and have not been registered under
and are subject to the restrictions on resale pursuant
to the Securities Act of 1933 and state securities laws."
(ii) Share Transfer Restriction Agreement Legend: "The
sale, transfer or other disposition of the shares
represented by this certificate prior to February 28,
2012 is subject to, and may not be made except in
compliance with, the conditions specified in a Share
Transfer Restriction Agreement with X.X. Xxxxxxxx, Inc.
(the "Company"). A copy of the Share Transfer
Restriction Agreement is on file and may be inspected
at the principal office of the Company and will be
furnished by the Company to the holder hereof upon
request and without charge."
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF MCC AND THE MCC SHAREHOLDERS
-------------------------------
MCC and the MCC Shareholders jointly and severally represent and
warrant to GWW, as of the date of this Agreement and as of the Closing Date
(as if such representations and warranties were remade on the Closing
Date), as set forth below. The information disclosed on any Schedule
attached hereto shall be deemed to relate solely to the section of this
Article III to which such Schedule relates and shall not be deemed to
relate to any other sections to which such disclosures may apply unless
such disclosure is cross-referenced in the Schedule(s) relating to such
other section(s), and only to the extent that the applicable information or
risk is described.
12
3.1. Due Incorporation; Subsidiaries.
(a) MCC is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada, with all requisite power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted. MCC is not, and never has been, required
to be licensed or qualified to do business as a foreign corporation in any
jurisdiction. Except as described in Schedule 3.1(a), MCC has no, and never
has had any, direct or indirect subsidiaries, either wholly or partially
owned. Except for the Old GWW Shares and except as described in Schedule
3.1(a), MCC does not hold, and never has held, any direct or indirect
economic, voting, equity or management interest in any Person and does not
own, and never has owned, directly or indirectly, any security issued by
any Person. True, correct and complete copies of the articles of
incorporation and by-laws, and, to the best of MCC's and the MCC
Shareholders' knowledge, all minutes of all meetings (or written consents
in lieu of meetings) of the board of directors (and all committees thereof)
and the shareholders of MCC have been delivered to GWW. To the best of
MCC's and the MCC Shareholders' knowledge, all action taken by the board of
directors (and all committees thereof) and the shareholders of MCC is
reflected in such minutes and written consents.
(b) Each MCC Shareholder that is not a natural person is an entity
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization.
3.2. Due Authorization.
(a) MCC has full power and authority to execute, deliver and perform
this Agreement and the Escrow Agreement and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by
MCC of this Agreement and the Escrow Agreement, and the consummation by MCC
of the transactions contemplated hereby and thereby, have been duly and
validly approved by its board of directors and its shareholders, and no
other actions or proceedings on the part of MCC are necessary to authorize
this Agreement or the Escrow Agreement or the transactions contemplated
hereby and thereby. MCC has duly and validly executed and delivered this
Agreement and the Escrow Agreement. This Agreement and the Escrow Agreement
constitute legal, valid and binding obligations of MCC, 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.
(b) Each MCC Shareholder that is not a natural person has full power
and authority to execute, deliver and perform this Agreement and the Escrow
Agreement and to consummate the transactions contemplated hereby and
thereby. Each MCC Shareholder that is a natural person has the legal
capacity, power and authority to execute, deliver and perform this
Agreement and the Escrow Agreement and to consummate the transactions
contemplated hereby and thereby. The trustee of each MCC Shareholder that
is a trust has the legal capacity, power and authority, on behalf of the
trust, to execute, deliver and perform this Agreement and the Escrow
Agreement and to consummate the transactions contemplated hereby and
thereby. Each MCC Shareholder has taken all action required by law, such
MCC Shareholder's organizational or governing documents (if applicable), or
otherwise to authorize the execution, delivery and performance of this
Agreement and the Escrow Agreement and the consummation by such MCC
13
Shareholder of the transactions contemplated hereby and thereby. Each MCC
Shareholder has duly and validly executed and delivered this Agreement and
the Escrow Agreement. This Agreement and the Escrow Agreement constitute
legal, valid and binding obligations of each MCC Shareholder, 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.
3.3. Consents and Approvals; Authority.
(a) Except as described in Schedule 3.3(a), no consent, authorization
or approval of, filing or registration with, waiver of any right of first
refusal or first offer from, or cooperation from, any Governmental
Authority or any other Person is necessary in connection with the
execution, delivery and performance by MCC and each MCC Shareholder of this
Agreement or the Escrow Agreement or the consummation by MCC and each MCC
Shareholder of the transactions contemplated hereby or thereby.
(b) The execution, delivery and performance by MCC and each MCC
Shareholder of this Agreement and the Escrow Agreement, and the
consummation by MCC and the MCC Shareholders of the transactions
contemplated hereby and thereby, do not and will not (i) violate any Law
applicable to or binding on MCC or any MCC Shareholder, or any of their
respective assets or properties; (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 or properties
of MCC or any MCC Shareholder 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 MCC or any MCC
Shareholder is a party or by which MCC or any MCC Shareholder or any of
their respective assets or properties are bound; (iii) permit the
acceleration of the maturity of any indebtedness of MCC or any MCC
Shareholder or indebtedness secured by any of their respective assets or
properties; or (iv) violate or conflict with any provision of the articles
of incorporation, by-laws or similar organizational instruments of MCC or
any MCC Shareholder.
14
3.4. Capitalization.
(a) The authorized capital stock of MCC consists of (i) 200,000 shares
of Common Stock, $1.00 par value per share (the "MCC Common Stock"), of which
100,000 are currently issued and outstanding and (ii) 300,000 shares of
preferred stock, $1.00 par value per share, none of which are currently
issued and outstanding. All of the shares of MCC Common Stock (i) are
validly issued, fully paid and nonassessable, (ii) are, and when issued
were, free of preemptive rights and (iii) are free and clear of any and all
Liens. Schedule 3.4(a) sets forth (i) the name, address and taxpayer
identification number of each legal and beneficial holder of MCC Common
Stock and (ii) the number and percentage of the outstanding shares of MCC
Common Stock held by each such holder. There are no shares of capital stock
of MCC held in the treasury of MCC and no shares of capital stock of MCC
are currently reserved for issuance for any purpose or upon the occurrence
of any event or condition.
(b) There are no shares of capital stock or other securities (whether
or not such securities have voting rights) of MCC issued and outstanding or
any subscriptions, options, warrants, calls, rights, convertible securities
or other Contracts of any character obligating MCC or any MCC Shareholder,
or obligating any MCC Shareholder or any of his, her or its Affiliates to
cause MCC, to issue, transfer or sell, or cause the issuance, transfer or
sale of, any shares of capital stock or other securities (whether or not
such securities have voting rights) of MCC. Except for this Agreement,
there are no outstanding obligations (contingent or otherwise) of MCC or
any MCC Shareholder that relate to the purchase, sale, issuance,
repurchase, redemption, acquisition, retirement, transfer, disposition,
holding or voting of any shares of capital stock or other securities of MCC
or the management or operation of MCC. No Person has any right to
participate in, or receive any payment based on any amount relating to, the
revenue, income, value or net worth of MCC or any component or portion
thereof, or any increase or decrease in any of the foregoing. There are no
stock appreciation, phantom stock or similar rights with respect to MCC.
There are no voting agreements, voting trust agreements, proxies or
shareholder or similar agreements relating to any capital stock of MCC.
3.5. Title to Purchased Assets. Except for the Pledge, MCC owns all
of the Old GWW Shares beneficially and of record, and has full power and
authority to convey, free and clear of all Liens and Liabilities, the
Purchased Assets. At the Closing, upon (i) the delivery and transfer by MCC
to GWW of the MCC Cash and the certificates representing the Old GWW
Shares, (ii) the delivery and transfer by GWW to MCC and the Escrow Agent,
as provided in Section 2.3(b), of certificates for the New GWW Shares,
(iii) the payment by GWW of the Union Bank Debt Amount and (iv) Union
Bank's release of the Old GWW Shares from the Pledge on the Closing Date as
provided in Section 2.4, MCC will convey to GWW, and GWW will receive,
good, valid and marketable title to the Purchased Assets, free and clear of
all Liens and Liabilities (other than those which arise out of actions
taken exclusively by GWW). The assignments, endorsements, stock powers and
other instruments of transfer delivered by MCC to GWW at the Closing will
be sufficient to transfer to GWW the entire interest, legal and beneficial,
in the Old GWW Shares. Except for this Agreement, there are no
subscriptions, options, warrants, calls, conversion or other rights,
commitments or Contracts of any nature obligating MCC or any MCC
Shareholder or any Affiliate of MCC or any MCC Shareholder to transfer or
sell, or cause the transfer or sale of, any Old GWW Shares or otherwise
relating to the sale or other disposition of any Purchased Assets. There
are no voting agreements, voting trust agreements, proxies or shareholder
or similar agreements relating to the Old GWW Shares.
3.6. Financial Statements; Undisclosed Liabilities.
(a) The Financial Statements are set forth in Schedule 3.6(a) and
present fairly the financial position, assets and liabilities of MCC as of
the date thereof and the revenues and expenses of MCC for the period
covered thereby. The Financial Statements are in accordance with the books
and records of MCC and do not reflect any transactions that are not bona
fide transactions.
15
(b) Except as set forth in the Latest Balance Sheet, which is set
forth in Schedule 3.6(a), or as described in Schedule 3.6(b), to the best
of MCC's and the MCC Shareholders' knowledge, (i) MCC has no material
debts, obligations or other Liabilities of any kind whatsoever, (ii) there
is no valid basis for the assertion against MCC of any material debt,
obligation or other Liability, (iii) there are no existing or foreseeable
events, conditions, situations or sets of circumstances which could
reasonably be expected to result in any debts, obligations or other
Liabilities of MCC in excess of $100,000 in the aggregate and (iv) during
the past five years, MCC has not had any debts, obligations or other
Liabilities in excess of $1 million in the aggregate.
3.7. Business; Assets; Property. Except as described in Schedule 3.7,
MCC does not conduct or engage in, and never has conducted or engaged in,
any business, activity, operation or transaction of any kind whatsoever.
MCC's assets consist solely of the Purchased Assets and the Excluded
Assets. Except as described in Schedule 3.7, MCC has never purchased,
owned, leased or sold any assets, products, services or property (including
any real property or tangible or intangible personal property) of any kind
whatsoever. MCC has never operated under any name other than Mountain
Capital Corporation.
3.8. Contracts. Schedule 3.8 is an accurate and complete list of all
the Contracts to which MCC is a party or to which MCC, the Purchased Assets
or any other assets or properties owned by MCC is subject. MCC has
delivered to GWW accurate and complete copies of each document listed on
Schedule 3.8 and a complete and accurate written description of each oral
arrangement so listed.
3.9. Labor Matters; Employee Benefit Plans.
(a) MCC does not have, and never has had, any employees. No Person is
or ever has been entitled to compensation from MCC for service as a director,
officer, employee, independent contractor or otherwise, or is or ever has
been entitled to any severance pay, lump sum or other payment, compensation
or other remuneration from MCC.
(b) Neither MCC nor any ERISA Affiliate of MCC maintains or
contributes to, has ever maintained or contributed to, or has or ever has
had any Liability with respect to, any Plan or Arrangement.
3.10. Taxes. All federal, state, provincial, territorial, municipal,
local and foreign income, corporation and other Tax Returns have been filed
for MCC (or will be filed or made on or prior to the due dates therefor) for
all periods through and including the Closing Date as required by
applicable Law. All Taxes shown as due on all such Tax Returns have been
paid (or will be paid on or prior to the due dates therefor). Each such Tax
Return is true, accurate and complete, and MCC has no, nor will MCC have
any, additional liability for Taxes with respect to any Tax Return
heretofore filed or which was required by Law to be filed. There are no Tax
Liens (other than Liens for current Taxes not yet due and payable) upon any
of the Purchased Assets. All Taxes that MCC is required by Law to withhold
or collect have been duly withheld or collected and, to the extent
required, have been paid over to the proper Governmental Authorities within
the prescribed times. No Tax Return of MCC is under audit or examination,
or has ever been audited or examined, by any taxing authority, and no
written notice of such an audit or examination has been received by MCC.
MCC is not a "foreign person" as defined in Section 1445(f)(3) of the Code.
Neither MCC nor any of the Purchased Assets is subject to any joint
venture, partnership or other arrangement or contract which is treated as a
partnership for federal income tax purposes. MCC is not a party to any tax
sharing agreement.
16
3.11. Plan of Liquidation. The board of directors and shareholders
of MCC have duly and validly approved and adopted a plan of liquidation, in
the form attached as Exhibit A to this Agreement (the "Plan of
Liquidation"), which provides for the consummation of the Liquidation
immediately following the Acquisition and which further provides that the
Acquisition and the Liquidation are intended to qualify as a reorganization
within the meaning of Section 368(a)(1)(C) and Section 368(a)(2)(G) of the
Code.
3.12. No Extraordinary Distributions. Within the past three years MCC
has made no distributions or dividends to its shareholders other than
ordinary dividends in the ordinary course of business (consisting of the
distribution to MCC Shareholders of funds representing dividends by GWW)
and has not authorized any such distribution or dividend, other than the
distribution of New GWW Shares to the MCC Shareholders as contemplated by
the Plan of Liquidation.
3.13. Reorganization. The Acquisition and Liquidation will qualify
as a reorganization under Section 368(a)(1)(C) and Section 368(a)(2)(G) of
the Code. MCC will deliver to XxXxxxxxx, Will & Xxxxx a representation
letter with respect to MCC in form and substance sufficient to enable such
counsel to render to GWW the legal opinion required by Section 6.2(x).
3.14. No Defaults or Violations. MCC has not breached any provision
of, and is not in default under the terms of, any Contract to which it is
or ever has been a party or under which it has or ever has had any rights
or by which it is or ever has been bound. No condition exists or event has
occurred which, with or without notice or the passage of time or both,
would constitute a breach of, or a default under, any such Contract by MCC
and no other party to any such Contract has breached any provision of, or
is in default under the terms of, any such Contract. MCC is, and has been,
in compliance with all Laws applicable to or binding on MCC or any of its
assets or properties, and no condition exists or event has occurred which,
with or without notice or the passage of time or both, would constitute a
violation under any such Law. No notice from any Governmental Authority has
been received by MCC or any MCC Shareholder claiming any violation of any
Law by MCC or requiring from MCC any work, construction or expenditure, or
asserting against MCC any Taxes, assessment or penalty. Except as set forth
in Schedule 3.14, no Permits, whether federal, state, local or foreign, are
necessary (i) for the use or ownership of the Purchased Assets, (ii) for
the lawful conduct or operation of the business of MCC or (iii) for MCC to
otherwise obtain or hold.
3.15. Environmental Matters. MCC is in compliance with all
Environmental Laws, including with respect to the Purchased Assets and the
business of MCC, and no condition exists or event has occurred which, with
or without notice or the passage of time or both, would constitute a
violation of or give rise to any liability, obligation or Lien under any
Environmental Law. No notice from any Governmental Authority or any other
Person has been received by MCC or any MCC Shareholder claiming that MCC,
or any aspect of the business, operations or facilities of MCC, is in
violation of any Environmental Law, or that MCC is responsible (or
potentially responsible) for the cleanup or remediation of any substances
at any location. MCC has not ever deposited or incorporated any Hazardous
17
Substances into, on, beneath or adjacent to any property. No condition has
existed or event has occurred with respect to any property owned or held
by, or used in the business of, MCC, any past or present direct or indirect
Subsidiary of MCC, any predecessor to MCC, or any Person that is or was an
Affiliate of MCC (including any property that has been sold, transferred or
disposed of or for which any lease has terminated) that in any case could,
with or without notice, passage of time or both, give rise to any present
or future liability or obligation of MCC pursuant to any Environmental Law.
3.16. Litigation. There is no, and never has been any, claim, action,
suit, arbitration, proceeding, governmental investigation or other
litigation pending or threatened against or affecting MCC or any of its
officers, directors, employees, agents or shareholders in their capacity as
such, or any of the Purchased Assets, and neither MCC nor any MCC
Shareholder is aware of any facts or circumstances which may give rise to
any of the foregoing. MCC is not and never has been subject to any order,
judgment, decree, injunction, stipulation or consent order of or with any
court or other Governmental Authority. MCC has not entered into any
agreement to settle or compromise any proceeding pending or threatened
against it.
3.17. Investment Representation. MCC is accepting, and upon the
consummation of the Liquidation, each MCC Shareholder is accepting, the New
GWW Shares for his, her or its own account and not for any other Person and
is acquiring the New GWW Shares for investment purposes only and without
any view to distribute, resell or otherwise transfer such New GWW Shares
(other than the distribution of the New GWW Shares by MCC to the MCC
Shareholders in the Liquidation as contemplated by the Plan of
Liquidation). MCC and each MCC Shareholder has such knowledge and
experience in business and financial matters as to be capable of evaluating
the merits and risks of the investment in New GWW Shares contemplated to be
made pursuant to this Agreement and has sufficient financial strength to
hold such New GWW Shares as an investment and to bear the economic risks of
such investment (including possible loss of such investment) for an
indefinite period of time. MCC and each MCC Shareholder is fully informed
that the New GWW Shares (i) are being issued and distributed pursuant to a
private offering exemption of the Securities Act of 1933, as amended (the
"Securities Act"), (ii) are not being registered under the Securities Act
or under the securities or blue sky laws of any state or foreign
jurisdiction, (iii) will constitute "restricted securities" within the
meaning of Rule 144 under the Securities Act and (iv) must be held
indefinitely unless they are subsequently registered under the Securities
Act and any applicable state securities or blue sky laws, or unless an
exemption from registration is available thereunder. MCC and each MCC
Shareholder is fully informed that GWW has no obligation to register such
securities under the Securities Act or any applicable state securities or
blue sky laws. All documents filed by GWW with the Securities and Exchange
Commission ("SEC Filings") pursuant to the Securities Act or the Securities
Exchange Act of 1934, as amended, since January 1, 1995 have been made
available or delivered to MCC and each MCC Shareholder and MCC and each MCC
Shareholder has had an opportunity to ask questions of and receive answers
from GWW concerning the Acquisition and the terms and conditions of this
Agreement, the Escrow Agreement and the Share Transfer Restriction
Agreement and to obtain additional information necessary to verify the
accuracy of the information contained in such SEC Filings. MCC and each MCC
Shareholder is an "accredited investor" as defined in Rule 501(a) under the
Securities Act.
18
3.18. Brokers. Neither MCC nor any MCC Shareholder has used any
broker or finder in connection with the Acquisition, and neither GWW nor
any Affiliate of GWW has or shall have any Liability or otherwise suffer or
incur any Loss as a result of or in connection with any brokerage or
finder's fee or other commission of any Person retained by MCC, any MCC
Shareholder or any of their respective Affiliates in connection with the
Acquisition.
3.19. Accuracy of Statements. To the knowledge of MCC and the MCC
Shareholders, neither this Agreement nor any schedule or certificate
furnished or to be furnished by or on behalf of MCC or any MCC Shareholder
to GWW or any representative or Affiliate of GWW in connection with this
Agreement, the Escrow Agreement or any of the transactions contemplated
hereby or thereby contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to
make the statements contained herein or therein, in light of the
circumstances in which they are made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF GWW
-------------------------------------
GWW represents and warrants to MCC, as of the date of this
Agreement and as of the Closing Date (as if such representations and
warranties were remade on the Closing Date), as follows:
4.1. Due Incorporation. GWW is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Illinois, with all requisite power and authority to own, lease and operate
its properties and to carry on its business as now being conducted.
4.2. Due Authorization. GWW has full power and authority to execute,
deliver and perform this Agreement and the Escrow Agreement and to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance by GWW of this Agreement and the Escrow Agreement,
and the consummation by GWW of the transactions contemplated hereby and
thereby, have been duly and validly approved by the board of directors of
GWW, and no other actions or proceedings on the part of GWW are necessary
to authorize this Agreement or the Escrow Agreement or the transactions
contemplated hereby and thereby. GWW has duly and validly executed and
delivered this Agreement and the Escrow Agreement. This Agreement and the
Escrow Agreement constitute legal, valid and binding obligations of GWW, 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.
4.3. Consents and Approvals; Authority.
(a) Except as described in Schedule 4.3(a), no consent, authorization
or approval of, filing or registration with, or cooperation from, any
Governmental Authority or any other Person not a party to this Agreement is
necessary in connection with the execution, delivery and performance by GWW
of this Agreement and the Escrow Agreement or the consummation by GWW of
the transactions contemplated hereby and thereby.
19
(b) The execution, delivery and performance by GWW of this Agreement
and the Escrow Agreement, and the consummation by GWW of the transactions
contemplated hereby and thereby, do not and will not (i) violate any Law
applicable to or binding on GWW or any of its assets or properties; (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 or properties of GWW 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
GWW is a party or by which GWW or any of its assets or properties are
bound; (iii) permit the acceleration of the maturity of any indebtedness of
GWW or indebtedness secured by its assets or properties; or (iv) violate or
conflict with any provision of GWW's articles of incorporation or by-laws.
4.4. New GWW Shares. The New GWW Shares, when issued and delivered
to MCC as consideration for the Purchased Assets pursuant to the terms of this
Agreement, will be (i) validly issued and outstanding, fully paid and
nonassessable, (ii) free of preemptive rights and (iii) free and clear of
any and all Liens (other than Liens, if any, which arise under any
securities Law or the terms of the Escrow Agreement or the Share Transfer
Restriction Agreement or which arise out of other actions taken by MCC or
the MCC Shareholders).
4.5. Litigation. There is no claim, action, suit, proceeding,
investigation or other litigation pending or, to the best knowledge of GWW,
threatened by or against GWW or any of its Affiliates with respect to the
Acquisition, and GWW is not aware of any facts or circumstances which may
give rise to any of the foregoing.
4.6. Brokers. Except as described in Schedule 4.6, GWW has used no
broker or finder in connection with the Acquisition. Except as provided in
Section 2.5, neither MCC nor any MCC Shareholder has or shall have any
liability or otherwise suffer or incur any Loss as a result of or in
connection with any brokerage or finder's fee or other commission of any
Person retained by GWW or any of its Affiliates in connection with the
Acquisition.
ARTICLE V
COVENANTS
---------
5.1. Implementing Agreement. Subject to the terms and conditions
hereof, each party hereto shall take all action required of it to fulfill
its obligations under the terms of this Agreement and the Escrow Agreement
and shall otherwise use all commercially reasonable efforts to facilitate
the consummation of the transactions contemplated hereby and thereby. Each
party hereto agrees that he, she or it will take no action that would have
the effect of preventing or impairing the performance by any party hereto
of its respective obligations under this Agreement or the Escrow Agreement.
5.2. Press Release. Promptly following the Closing, GWW shall issue
a press release to announce the Acquisition upon consultation with, and the
reasonable approval of, MCC. Xxxxx X. Xxxxxx will provide a quotation in a
form reasonably acceptable to GWW for inclusion in such press release,
which quotation shall indicate his intention to continue holding shares of
GWW Common Stock and underscore his long-term commitment to GWW. Neither
MCC nor the MCC Shareholders shall make any public announcement regarding
the Acquisition without obtaining GWW's prior written consent.
20
5.3. Tax Matters. After the Closing, MCC and the MCC Shareholders
shall make available to GWW such records as GWW may request for the
preparation of any Tax Returns or other similar reports or forms required
to be filed by GWW and such records as GWW may request in connection with
the defense of any audit, examination, administrative appeal or litigation
of any such Tax Return or other similar report or form, in each case
relating to MCC, the Acquisition or the Purchased Assets. MCC, the MCC
Shareholders and GWW shall cooperate with one another in any such audit,
examination, appeal or litigation. MCC, the MCC Shareholders and GWW agree
to file all Tax Returns consistent with the Acquisition and the Liquidation
qualifying as a reorganization under Section 368(a)(1)(C) and Section
368(a)(2)(G) of the Code.
ARTICLE VI
CLOSING
-------
6.1. Closing. The Closing shall take place concurrently with the
execution and delivery of this Agreement at the offices of Mayer, Brown,
Xxxx & Maw, at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, at 9:00
A.M., local time, on the date hereof (the "Closing Date").
6.2. Deliveries by MCC. At the Closing, in addition to any other
documents or agreements required under this Agreement, MCC and the MCC
Shareholders shall deliver to GWW the following:
(i) certificates registered in the name of MCC representing
all of the Old GWW Shares, which certificates shall be duly endorsed
for transfer or accompanied by duly executed stock powers;
(ii) the MCC Cash, which shall be delivered to GWW by electronic
wire transfer to such account or accounts as GWW shall specify to MCC
in writing prior to the Closing Date;
(iii) the Union Bank Notice and, following GWW's payment of the
Union Bank Debt Amount, the Union Bank Closing Confirmation;
(iv) the Escrow Agreement, duly executed by MCC, each MCC
Shareholder and the Escrow Agent;
(v) the Share Transfer Restriction Agreement, duly executed by
each MCC Shareholder and each of the other signatories thereto other
than GWW;
(vi) a certificate of the Secretary of MCC certifying
resolutions of the board of directors and shareholders of MCC
approving and authorizing the execution, delivery and performance
of this Agreement and the Escrow Agreement and the consummation of
the transactions contemplated hereby and thereby and approving and
adopting the Plan of Liquidation (together with an incumbency and
signature certificate regarding the officer(s) signing any
documents or agreements on behalf of MCC);
21
(vii) the articles of incorporation of MCC certified by the
Secretary of State or equivalent Person of the State of Nevada,
and the by-laws or similar instrument of MCC, certified by its
Secretary;
(viii) a certificate of good standing of MCC from the State of
Nevada;
(ix) an opinion, dated the Closing Date, of Xxxx Xxxx Peek
Xxxxxxxx Xxxxxx and Xxxxxxxx, counsel to MCC, in form and
substance satisfactory to GWW and to the effect set forth in
Exhibit B;
(x) an opinion, dated the Closing Date, of XxXxxxxxx,
Will & Xxxxx, counsel to MCC and the MCC Shareholders, in form
and substance satisfactory to GWW and to the effect set forth in
Exhibit C; and
(xi) an opinion, dated the Closing Date, of XxXxxxxxx, Will
& Xxxxx, counsel to MCC and the MCC Shareholders, in form and
substance satisfactory to GWW and to the effect set forth in Exhibit D;
(xii) such other documents and instruments as may be required
by any other provision of this Agreement, or any other agreement
related to the Acquisition or as may reasonably be required to
consummate the transactions contemplated by this Agreement.
6.3. Deliveries by GWW.
(a) At the Closing, GWW shall deliver to MCC and the MCC
Shareholders the following:
(i) certificates registered in the name of MCC representing
all of the New GWW Shares (other than the Escrow Shares) and
containing the Securities Act Legend;
(ii) the Escrow Agreement, duly executed by GWW;
(iii) the Share Transfer Restriction Agreement, duly executed
by GWW;
(iv) a certificate of the Secretary of GWW certifying
resolutions of the board of directors of GWW approving and
authorizing the execution, delivery and performance of this
Agreement, the Escrow Agreement and the Share Transfer Restriction
Agreement and the consummation of the transactions contemplated
hereby and thereby (together with an incumbency and signature
certificate regarding the officer(s) signing any documents or
agreements on behalf of GWW); and
(v) an opinion, dated the Closing Date, of Mayer, Brown, Xxxx
& Maw, counsel to GWW, in form and substance satisfactory to MCC
and to the effect set forth in Exhibit E.
(b) At the Closing, GWW shall deliver to the Escrow Agent certificates
registered in the name of MCC representing the Escrow Shares and containing
the Securities Act Legend.
22
(c) At the Closing, GWW will deliver to XxXxxxxxx, Will & Xxxxx a
certificate of GWW substantially in the form of Exhibit F (the "GWW Tax
Certificate") for the sole purpose of enabling such counsel to render the
legal opinion required by Section 6.2(x). Notwithstanding anything else in
this Agreement, under no circumstances shall MCC or any MCC Shareholder be
entitled to rely upon or to enforce any of the representations or
warranties of GWW contained in the GWW Tax Certificate.
ARTICLE VII
INDEMNIFICATION
---------------
7.1. Survival. All of the representations and warranties of the
parties hereto contained herein, in the Escrow Agreement and in any other
document or agreement delivered in connection herewith other than the Share
Transfer Restriction Agreement and the GWW Tax Certificate (each such other
document or agreement, other than the Share Transfer Restriction Agreement
and the GWW Tax Certificate, a "Related Agreement") shall survive forever.
7.2. Indemnification by MCC and the MCC Shareholders. MCC and the MCC
Shareholders jointly and severally agree to indemnify each of the GWW
Indemnified Parties against, and agree to hold each of the GWW Indemnified
Parties harmless from, any and all Losses incurred or suffered by any or
all of the GWW Indemnified Parties arising out of or in connection with any
of the following:
(i) any breach of or any inaccuracy in (or any third party
claim involving an alleged breach of or inaccuracy in) any
representation or warranty made by MCC or any MCC Shareholder in
this Agreement, the Escrow Agreement or any Related Agreement;
(ii) any breach (or any third party claim involving an alleged
breach) by MCC or any MCC Shareholder of or failure (or any
third party claim involving an alleged failure) by MCC or any MCC
Shareholder to perform any covenant, agreement or obligation of
MCC or any MCC Shareholder in this Agreement, the Escrow Agreement
or any Related Agreement;
(iii) any Liability of MCC or any of its past, present or
future Subsidiaries or Affiliates (other than for payment by GWW
to Union Bank of the Union Bank Debt Amount on the Closing Date as
provided in Section 2.4), including any Liability that relates to,
or that arises out of, any act, omission or event that occurred or
any condition, situation or set of circumstances that existed
prior to, on or following the Closing Date;
(iv) any act or omission of, or any event, condition, situation
or set of circumstances relating to or involving, MCC or any of
its past, present or future Subsidiaries or Affiliates or any of
their respective officers, directors, shareholders, employees,
agents or representatives in their capacities as such, except to
the extent GWW is required to indemnify MCC or the MCC
Shareholders therefor pursuant to Section 7.3;
(v) without limiting the generality of clause (iii) above, any
Liability for Taxes of, or attributable to, MCC or any of its
past, present or future Subsidiaries or Affiliates for taxable
periods ending prior to, on or following the Closing Date,
including any Taxes resulting from the consummation of the
Acquisition or the Liquidation;
23
(vi) any audit, examination or investigation of the Acquisition
or the Liquidation by any Governmental Authority, including the IRS
or any other tax authorities;
(vii) the bulk sales Laws of any jurisdiction applicable to the
Acquisition and any Laws of any jurisdiction imposing liability on
GWW for MCC's Taxes, including the failure to comply with any such
Laws; or
(viii) any assertion of appraisal or similar rights pursuant
to any Law or otherwise by any of the MCC Shareholders in their
capacities as such.
7.3. Indemnification by GWW. GWW agrees to indemnify MCC and the MCC
Shareholders against, and agrees to hold each of them harmless from, any
and all Losses incurred or suffered by any or all of them arising out of or
in connection with any of the following:
(i) any breach of or any inaccuracy in (or any third party
claim involving an alleged breach of or inaccuracy in) any
representation or warranty made by GWW in this Agreement, the
Escrow Agreement or any Related Agreement; or
(ii) any breach (or any third party claim involving an alleged
breach) by GWW of or failure (or any third party claim involving
an alleged failure) by GWW to perform any covenant, agreement or
obligation of GWW in this Agreement, the Escrow Agreement or any
Related Agreement.
7.4. Claims. As soon 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 7.5 or Section 7.6, the Indemnified Person shall give
notice to the Indemnifying Person of such claim; provided, that the failure
of the Indemnified Person to give notice shall not relieve the Indemnifying
Person of its obligations under this Article VII, except to the extent the
Indemnifying Person shall have been materially prejudiced thereby.
7.5. Notice of Third Party Claims; Assumption of Defense. The
Indemnified Person shall give notice as promptly as is reasonably
practicable 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 (other than by a Governmental Authority with respect to Taxes)
in respect of which indemnity may be sought under this Agreement; provided,
that the failure of the Indemnified Person to give notice shall not relieve
the Indemnifying Person of its obligations under this Article VII, except
to the extent the Indemnifying Person shall have been materially 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 and the Indemnifying Person's delivering
to the Indemnified Person a written agreement that the Indemnified Person
is entitled to indemnification pursuant to Section 7.2 or Section 7.3 for
all Losses arising out of such claim, suit, action or proceeding and that
the Indemnifying Person shall be liable for the entire amount of any Loss
24
resulting therefrom, at any time during the course of any such claim, suit,
action or proceeding, assume the defense thereof; provided, that (i) the
Indemnifying Person's counsel is reasonably satisfactory to the Indemnified
Person and (ii) the Indemnifying Person shall thereafter consult with the
Indemnified Person upon the Indemnified Person's reasonable request for
such consultation from time to time with respect to 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. If, however, the
Indemnified Person reasonably determines in its judgment that
representation by the Indemnifying Person's counsel of both the
Indemnifying Person and the Indemnified Person would present such counsel
with a conflict of interest, then such Indemnified Person may employ
separate counsel to represent or defend it in any such claim, action, suit
or proceeding and the Indemnifying Person shall pay the fees and
disbursements of such separate counsel. Whether or not the Indemnifying
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.
7.6. Disputes Related to Taxes. The Indemnified Person shall give
notice as promptly as is reasonably practicable to the Indemnifying Person
of the assertion of any claim, or the commencement of any suit, action or
proceeding, by any Governmental Authority with respect to Taxes for which
indemnity may be sought by any GWW Indemnified Party under this Agreement;
provided, that the failure of the Indemnified Person to give notice shall
not relieve the Indemnifying Person of its obligations under this Article
VII except to the extent the Indemnifying Person shall have been materially
prejudiced thereby. The Indemnifying Person may, upon notice to the GWW
Indemnified Party delivered within thirty (30) calendar days after delivery
of such notice from the Indemnified Person, and the Indemnifying Person
delivering to the GWW Indemnified Party, within such thirty (30) calendar
days, a written agreement that the GWW Indemnified Party is entitled to
indemnification pursuant to Section 7.2 for all Losses arising out of such
claim, suit, action or proceeding and that the Indemnifying Person shall be
liable for the entire amount of any Loss resulting therefrom, require GWW
to contest any such claim, suit, action or proceeding; provided that (i)
the Indemnifying Person shall have furnished to GWW an opinion of
independent tax counsel selected by the Indemnifying Person and approved by
GWW (which approval shall not be unreasonably withheld) to the effect that
substantial authority exists for such contest, (ii) GWW shall control all
proceedings taken in connection with such contest and, at its sole option,
may pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the Governmental Authority in respect of such
claim, suit, action or proceeding and may determine, at its sole option, to
either pay the Tax claims and xxx for a refund or contest the claim in any
appropriate forum, considering in good faith such requests as the
Indemnifying Person shall make concerning the most appropriate forum in
which to proceed and other related matters, provided that the Indemnifying
Person may, at its own expense, participate in all such proceedings and
provided further that GWW shall not settle or compromise any such claim,
suit, action or proceeding without the approval of the MCC Representative
(acting on behalf of the Indemnifying Person), which approval shall not be
unreasonably withheld, (iii) if GWW shall determine to pay the Tax claimed
and xxx for a refund, the Indemnifying Person shall advance to GWW all
Losses incurred or suffered by GWW in connection therewith. Nothing
contained in this Section 7.6 shall require GWW to contest a claim which it
would otherwise be required to contest if GWW releases the Indemnifying
Person from any liability under Section 7.2 for Losses incurred or suffered
in connection therewith. Whether or not GWW chooses to contest or pay (and
xxx for a refund with respect to) any such claim, suit, action or
proceeding, all of the parties hereto shall cooperate and consult with each
other with respect to the resolution of any such claim, suit, action or
proceeding.
25
7.7. Settlement or Compromise. Any settlement or compromise made or
caused to be made by the Indemnified Person or the Indemnifying Person, as
the case may be, of any such claim, suit, action or proceeding of the kind
referred to in Section 7.5 or Section 7.6 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 no obligation, restriction or Loss shall be imposed on the
Indemnified Person or the Indemnifying Person (other than obligations
arising under this Agreement) as a result of such settlement or compromise
without its prior written consent, which consent shall not be unreasonably
withheld. The Indemnified Person will give the Indemnifying Person at least
fifteen (15) days' notice of any proposed settlement or compromise of any
claim, suit, action or proceeding referred to in Section 7.5 that it is
defending, during which time the Indemnifying Person may, on reasonable
grounds, reject such proposed settlement or compromise; provided, that from
and after such rejection, the Indemnifying Person shall be obligated to
assume the defense of and full and complete liability and responsibility
for such claim, suit, action or proceeding and any and all Losses in
connection therewith. Likewise, the Indemnifying Person will give the
Indemnified Person at least fifteen (15) days' notice of any proposed
settlement or compromise of any claim, suit, action or proceeding referred
to in Section 7.5 that it is defending, during which time the Indemnified
Person may, on reasonable grounds, reject such proposed settlement or
compromise; provided, that from and after such rejection, the Indemnified
Person shall defend the claim at its expense and the Indemnifying Person's
liability shall be limited to the amount of the proposed settlement or
compromise.
7.8. Failure of Indemnifying Person to Act. In the event that the
Indemnifying Person does not elect to assume the defense of any claim,
suit, action or proceeding, then any failure of the Indemnified Person to
defend or to participate in the defense of any such claim, suit, action or
proceeding or to cause the same to be done, shall not relieve the
Indemnifying Person of its obligations hereunder.
7.9. Acknowledgment; No Obligation to Set-Off Against Escrow Fund.
MCC and each MCC Shareholder agrees and acknowledges that (i) it has
discussed with counsel and understands the joint and several nature of the
indemnification obligations hereunder, (ii) the right of indemnification of
the GWW Indemnified Parties hereunder is absolute, (iii) the
indemnification obligations of MCC and the MCC Shareholders shall not in
any manner be limited to the Escrow Shares or any other assets that may be
contained in the Escrow Fund (as defined in the Escrow Agreement) at any
time, and (iv) the GWW Indemnified Parties are not obligated to seek
satisfaction of a claim for indemnification pursuant to this Agreement from
the Escrow Fund established pursuant to the Escrow Agreement prior to
seeking satisfaction of such a claim from MCC or the MCC Shareholders.
26
7.10. Treatment of Indemnification Payments. Any amounts payable
under Section 7.2 or Section 7.3 shall be treated by GWW and MCC as an
adjustment to the purchase price for the Purchased Assets for tax purposes,
except as otherwise required by applicable Law. In the event that such
payment is not treated as an adjustment to the purchase price under
applicable Law, the Indemnifying Person shall further pay an amount that
reflects liabilities and costs for Taxes resulting from the receipt or
accrual of such payment, as, if and when incurred (including in a future
year).
ARTICLE VIII
MISCELLANEOUS
-------------
8.1. Amendment. This Agreement may be amended, modified or
supplemented but only in writing signed by GWW, MCC and each MCC Shareholder.
8.2. 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 received, (a) when delivered if given in person or by
courier or a courier service such as Federal Express, DHL or other similar
services, (b) on the date of transmission if sent by facsimile or other
wire transmission (receipt confirmed by return facsimile) or (c) five (5)
Business Days after being deposited in the U.S. mail, certified or
registered mail, postage prepaid:
(i) If to MCC, addressed as follows:
Xxxx XX Capital, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
with copies to:
Xxxx XX Capital, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxx
Facsimile No.: (000) 000-0000
and
XxXxxxxxx, Will & Xxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
27
(ii) If to any MCC Shareholder, addressed to the address
listed for such MCC Shareholder on Schedule 3.4(a), with
a copy to:
XxXxxxxxx, Will & Xxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
(iii) If to the MCC Representative, addressed as follows:
Xxxx XX Capital, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
(iv) If to GWW, addressed as follows:
X.X. Xxxxxxxx, Inc.
000 Xxxxxxxx Xxxxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
Attention: Corporate Secretary
Facsimile No.: (000) 000-0000
with a copy to:
X.X. Xxxxxxxx, Inc.
000 Xxxxxxxx Xxxxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
and
Mayer, Brown, Xxxx & Maw
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.
8.3. Effect of Investigation. Any due diligence review, audit or
other investigation or inquiry undertaken or performed by or on behalf of GWW
shall not limit, qualify, modify or amend the representations, warranties,
covenants or obligations of (including indemnities by) MCC or any MCC
Shareholder made or undertaken pursuant to this Agreement, the Escrow
Agreement or any Related Agreement, irrespective of the knowledge and
information received (or which should have been received) therefrom by GWW.
28
8.4. Payments in Dollars. Except as otherwise provided herein,
all payments pursuant hereto shall be made by electronic wire transfer in
United States Dollars in same day or immediately available funds.
8.5. 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.
8.6. 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. This Agreement may be executed by
facsimile signature and a facsimile signature shall constitute an original
signature for all purposes.
8.7. Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, assigns,
heirs and legal representatives; provided, that no assignment of any rights
or obligations hereunder shall be made by MCC or any MCC Shareholder to any
Person without the written consent of GWW and no assignment of any rights
or obligations hereunder shall be made by GWW to any Person without the
written consent of the MCC Representative.
8.8. No Third Party Beneficiaries. This Agreement is solely for the
benefit of the parties hereto and, to the extent provided herein, their
respective Affiliates, directors, officers, employees, agents and
representatives, 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.
8.9. Further Assurances. Upon the reasonable request of another party
to this Agreement, each party hereto shall on and after the Closing Date
execute and deliver to the requesting party such other documents,
assignments and other instruments as may be required to effectuate
completely the transfer and assignment to GWW of, and to vest fully in GWW
title to, the Purchased Assets, and to otherwise carry out the purposes of
this Agreement.
8.10. 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.
8.11. Remedies Cumulative. The remedies provided in this Agreement
shall be cumulative and shall not preclude the assertion or exercise of any
other rights or remedies available by Law, in equity or otherwise.
8.12. Entire Understanding. This Agreement, the Escrow Agreement and
the Share Transfer Restriction Agreement sets 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 (including the Mutual
Letter of Intent dated as of January 24, 2002 by and between GWW and MCC)
relating to the subject matter hereof.
29
8.13. MCC Representative. Each MCC Shareholder hereby irrevocably
authorizes and appoints Xxxxx X. Xxxxxx as his or its true and lawful
attorney and representative (the "MCC Representative") with full power and
authority to take any and all actions and execute any and all documents
specified in this Agreement as being within the authority of the MCC
Representative. Xxxxx X. Xxxxxx hereby accepts his appointment as the MCC
Representative and agrees to perform all of the duties of the MCC
Representative hereunder. If the MCC Representative shall die or become
incapacitated, the MCC Shareholders shall promptly appoint a successor
Person to act as the MCC Representative. Each of MCC and the MCC
Shareholders shall jointly and severally indemnify and hold harmless the
MCC Representative from any and all Losses arising from actions or inaction
of the MCC Representative taken or not taken in his capacity as such.
8.14. Applicable Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Illinois without giving effect to the principles of conflicts of law
thereof.
8.15. Jurisdiction of Disputes; Waiver of Jury Trial. The state
courts of the County of Xxxx, Illinois and the United States District Court
for the Northern District of Illinois shall have the exclusive jurisdiction
over any and all litigation, proceedings or other legal actions relating to
or arising out of this Agreement, the Escrow Agreement, the Share Transfer
Restriction Agreement, the subject matter hereof or thereof or the
transactions contemplated hereby or thereby. Each of the parties hereto
hereby irrevocably (a) submits to the personal jurisdiction of such courts
over such party in connection with any litigation, proceeding or other
legal action relating to or arising out of this Agreement, the Escrow
Agreement, the Share Transfer Restriction Agreement or the subject matter
hereof or thereof or the transactions contemplated hereby or thereby, (b)
waives to the fullest extent permitted by Law any objection to the venue of
any such litigation, proceeding or other legal action which is brought in
any such court and (c) agrees to the mailing of service of process to the
address specified above for such party as an alternative method of service
of process in any such litigation, proceeding or other legal action brought
in any such court. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY JURY IN
ANY LITIGATION, PROCEEDING OR OTHER LEGAL ACTION RELATING TO OR ARISING OUT
OF THIS AGREEMENT, THE ESCROW AGREEMENT, THE SHARE TRANSFER RESTRICTION
AGREEMENT, OR ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN OR THEREIN, AND
AGREES TO TAKE ANY AND ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH
WAIVER.
8.16. Acknowledgment of MCC and each MCC Shareholder. MCC and each
MCC Shareholder represents to GWW that he, she or it is knowledgeable and
sophisticated as to business matters, including the subject matter of this
Agreement, that MCC and each MCC Shareholder has read this Agreement and
that he, she or it understands its terms. MCC and each MCC Shareholder
acknowledges that, prior to assenting to the terms of this Agreement, he,
she or it has been given a reasonable time to review it, to consult with
counsel of his, her or its choice and to negotiate at arm's-length with GWW
as to its contents. MCC, each MCC Shareholder and GWW 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 MCC, any MCC Shareholder or GWW.
30
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and delivered as of the date first above written.
X.X. XXXXXXXX, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairman of the Board and
Chief Executive Officer
MOUNTAIN CAPITAL CORPORATION
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
The MCC Shareholders:
XXXXXXX XXXXXX TRUST
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: Trustee
EVAN XXXXXXX XXXXXX TRUST
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: Trustee
XXXXX XXXXXX INTER-VIVOS TRUST
By: /s/ Xxxxx Xxxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxx Xxxxxx Xxxxxxxx
Title: Trustee
00
XXXXX XXX XXXXXX XXXXXX 0000 XXXXXX
TRUST FBO XXXXXXX XXXXX XXXXXX
By: /s/ Xxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxx
Title: Trustee
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: Trustee
XXXXX AND XXXXXX XXXXXX 2000 EXEMPT TRUST
FBO EVAN XXXXXXX XXXXXX
By: /s/ Xxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxx
Title: Trustee
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: Trustee
XXXX AND XXXXXX XXXXXX 2000 EXEMPT
TRUST FBO XXXXXX X. XXXXXX
By: /s/ Xxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxx
Title: Trustee
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Trustee
33
XXXX AND XXXXXX XXXXXX 2000 EXEMPT
TRUST FBO XXXXXXX X. XXXXXX
By: /s/ Xxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxx
Title: Trustee
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Trustee
XXXXX XXXXXX XXXXXXXX & XXXXX XXXXXXXX
2000 TRUST
By: /s/ Xxxxx X. Xxxxxxxx, III
---------------------------------------
Name: Xxxxx X. Xxxxxxxx, III
Title: Trustee
By: /s/ Xxxxx Xxxxxxx
---------------------------------------
Name: Xxxxx Xxxxxxx
Title: Trustee
XXXX XXXXXX XXXXXX TRUST
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: Trustee
By: /s/ Xxxx Xxxx
---------------------------------------
Name: Xxxx Xxxx
Title: Trustee
LAUREN XXXXXXXX XXXXXX TRUST
ESTABLISHED DECEMBER 28, 1987
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Trustee
34
XXXXXXX XXXXXX TRUST ESTABLISHED
OCTOBER 1, 1989
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Trustee
THE XXXXX X. XXXXXX SEPARATE PROPERTY TRUST
ESTABLISHED FEBRUARY 27, 1974, AS AMENDED
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Trustee
THE XXXX X. XXXXXX TRUST ESTABLISHED
JANUARY 26, 1993
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: Trustee
/s/ Xxxx X. Xxxxxx
--------------------------------------------
Xxxx X. Xxxxxx, individually
Acknowledged, Consented to and Agreed:
/s/ Xxxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxxx X. Xxxxxx
/s/ Xxxx X. Xxxxxx
--------------------------------------------
Xxxx X. Xxxxxx, individually
/s/ Xxxxx X. Xxxxxx
--------------------------------------------
Xxxxx X. Xxxxxx, individually
Acknowledged, Consented to and Agreed:
/s/ Xxxxxxxx Xxxxxx
---------------------------------------
Xxxxxxxx Xxxxxx
35
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS...............................................................2
1.1. Definitions............................................................2
1.2. Interpretation.........................................................7
ARTICLE II ACQUISITION; RELATED TRANSACTIONS.........................................7
2.1. Sale and Purchase of Purchased Assets..................................7
2.2. Delivery of Purchased Assets by MCC....................................8
2.3. Payment for Purchased Assets by GWW....................................8
2.4. Payment of Union Bank Loan by GWW......................................8
2.5. Payment of Transaction Expenses by MCC.................................9
2.6. Liquidation; Replacement of Escrow Certificates........................9
2.7. Escrow Agreement......................................................10
2.8. No Liabilities Assumed................................................10
2.9. No Fractional Shares..................................................11
2.10. Legends...............................................................11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF MCC AND THE MCC SHAREHOLDERS..........12
3.1. Due Incorporation; Subsidiaries.......................................12
3.2. Due Authorization.....................................................12
3.3. Consents and Approvals; Authority.....................................13
3.4. Capitalization........................................................14
3.5. Title to Purchased Assets.............................................14
3.6. Financial Statements; Undisclosed Liabilities.........................15
3.7. Business; Assets; Property............................................15
3.8. Contracts.............................................................15
3.9. Labor Matters; Employee Benefit Plans.................................15
3.10. Taxes.................................................................16
3.11. Plan of Liquidation...................................................16
3.12. No Extraordinary Distributions........................................16
3.13. Reorganization........................................................16
3.14. No Defaults or Violations.............................................17
3.15. Environmental Matters.................................................17
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3.16. Litigation............................................................17
3.17. Investment Representation.............................................17
3.18. Brokers...............................................................18
3.19. Accuracy of Statements................................................18
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF GWW....................................18
4.1. Due Incorporation.....................................................19
4.2. Due Authorization.....................................................19
4.3. Consents and Approvals; Authority.....................................19
4.4. New GWW Shares........................................................20
4.5. Litigation............................................................20
4.6. Brokers...............................................................20
ARTICLE V COVENANTS................................................................20
5.1. Implementing Agreement................................................20
5.2. Press Release.........................................................20
5.3. Tax Matters...........................................................20
ARTICLE VI CLOSING..................................................................21
6.1. Closing...............................................................21
6.2. Deliveries by MCC.....................................................21
6.3. Deliveries by GWW.....................................................22
ARTICLE VII INDEMNIFICATION..........................................................23
7.1. Survival..............................................................23
7.2. Indemnification by MCC and the MCC Shareholders.......................23
7.3. Indemnification by GWW................................................24
7.4. Claims................................................................24
7.5. Notice of Third Party Claims; Assumption of Defense...................24
7.6. Disputes Related to Taxes.............................................25
7.7. Settlement or Compromise..............................................26
7.8. Failure of Indemnifying Person to Act.................................26
7.9. Acknowledgment; No Obligation to Set-Off Against Escrow Fund..........26
7.10. Treatment of Indemnification Payments.................................27
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ARTICLE VIII MISCELLANEOUS............................................................27
8.1. Amendment.............................................................27
8.2. Notices...............................................................27
8.3. Effect of Investigation...............................................29
8.4. Payments in Dollars...................................................29
8.5. Waivers...............................................................29
8.6. Counterparts..........................................................29
8.7. Assignment............................................................29
8.8. No Third Party Beneficiaries..........................................29
8.9. Further Assurances....................................................29
8.10. Severability..........................................................30
8.11. Remedies Cumulative...................................................30
8.12. Entire Understanding..................................................30
8.13. MCC Representative....................................................30
8.14. Applicable Law........................................................30
8.15. Jurisdiction of Disputes; Waiver of Jury Trial........................30
8.16. Acknowledgment of MCC and each MCC Shareholder........................31
EXHIBITS
Exhibit A Plan of Liquidation
Exhibit B Opinion of Xxxx Xxxx Peek Xxxxxxxx Xxxxxx and Xxxxxxxx
Exhibit C Opinion of XxXxxxxxx, Will & Xxxxx
Exhibit D Opinion of XxXxxxxxx, Will & Xxxxx
Exhibit E Opinion of Mayer, Brown, Xxxx & Maw
Exhibit F GWW Tax Certificate
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