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EXHIBIT - 10.34
STOCK PURCHASE AGREEMENT
BETWEEN
XXXXXX YALE INDUSTRIES, INC.
("BUYER")
AND
XXXXX XXXXX INTERNATIONAL B.V.
("SELLER")
REGARDING PURCHASE OF
MASTER PRODUCTS MANUFACTURING COMPANY, INC.
JUNE 16, 1997
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STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into as of June 16, 1997, by and
between Xxxxxx Yale Industries, Inc., an Indiana corporation (the "BUYER"), and
Xxxxx Xxxxx International B.V., a corporation organized under the laws of the
Netherlands (the "Seller"). The Buyer and the Seller are referred to
collectively herein as the "PARTIES."
The Seller owns all of the issued and outstanding shares of capital
stock of Master Products Manufacturing Company, Inc., a Delaware corporation
("MASTER PRODUCTS").
This Agreement contemplates a transaction in which the Buyer will
purchase from the Seller, and the Seller will sell and transfer to the Buyer,
all of the issued and outstanding shares of capital stock of Master Products for
cash.
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties agree
as follows:
1. DEFINITIONS.
"ACCREDITED INVESTOR" has the meaning set forth in Regulation D
promulgated under the Securities Act.
"ACTUAL VALUE" has the meaning set forth in Section 2(e) below.
"ADVERSE CONSEQUENCES" means all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs,
amounts paid in settlement, Liabilities, obligations, Taxes, liens, losses,
expenses, and fees, including court costs and reasonable attorneys' fees and
expenses.
"AFFILIATE" of any Person is a Person that directly or indirectly
controls, is controlled by, or is under common control with, the Person
specified.
"AFFILIATED GROUP" means any affiliated group within the meaning of
Code section 1504 or any similar group defined under a similar provision of
state, local or foreign law.
"APPLICABLE RATE" means the prime rate of interest published from
time to time in the "Money Rates" section of THE WALL STREET JOURNAL, or if such
rate is no longer published, the applicable long-term federal rate.
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"BASIS" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction.
"BUYER" has the meaning set forth in the preface above.
"CLOSING" and "CLOSING DATE" have the meanings set forth in 2(c)
below.
"CLOSING DATE BALANCE SHEET" has the meaning set forth in 2(e)
below.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONFIDENTIAL INFORMATION" means any information concerning the
business and affairs of Master Products and its Subsidiaries that is not already
generally available to the public (except any such information that becomes
generally available to the public after the date of this Agreement other than by
reason of a breach of this Agreement).
"CONTROLLED GROUP OF CORPORATIONS" has the meaning set forth in Code
section 1563.
"CUSTOMER" has the meaning set forth in 6(e) below.
"DEFERRED INTERCOMPANY TRANSACTION" has the meaning set forth in
Reg. section 1.1502-13.
"DISCLOSED LIABILITIES" means: (a) the Liabilities of Master
Products reflected, accrued or reserved on the Most Recent Audited Balance Sheet
(or disclosed in the notes thereto), subject only to (i) increases, decreases
and changes which shall arise or have arisen in the Ordinary Course of Business
and (ii) such other changes as shall be agreed to by the Buyer in this
Agreement; (b) the Liabilities disclosed in the Disclosure Schedule; (c) such
contractual obligations of Master Products which are to be performed in the
Ordinary Course of Business under the agreements, contracts, leases, licenses
and other arrangements which are disclosed to the Buyer in Section 4(p) of the
Disclosure Schedule (none of which obligations results from, arises out of,
relates to, is in the nature of or was caused by any breach of contract, breach
of warranty, tort, infringement, or violation of law); and (d) any Liability for
state or federal income taxes in the United States which may arise by reason of
the repatriation or deemed repatriation of income from the operations of
Productos Maestros de Oficina, S.A. de C.V. in Mexico for any period ending on
or before the Closing Date (EXCEPT any Liability for state or federal income
taxes which may arise to the extent the intercompany account between Master
Products and Productos Maestros de Oficina, S.A. de C.V. shall be determined (on
a basis consistent with the Most Recent Unaudited Balance Sheet) to have
exceeded $2,475,000 as of the Closing Date).
"DISCLOSURE SCHEDULE" means the set of written disclosures attached
to and made a part
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of this Agreement which sets forth certain exceptions to the representations and
warranties made herein (which written disclosures shall be initialed by the
Parties). The Disclosure Schedule shall identify any such exceptions with
reasonable particularity and shall be arranged in paragraphs corresponding to
the numbered paragraphs of this Agreement.
"DRAFT CLOSING DATE BALANCE SHEET" has the meaning set forth in 2(e)
below.
"EMPLOYEE BENEFIT PLAN" means any (a) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan, (b) qualified defined contribution retirement plan or arrangement
which is an Employee Pension Benefit Plan, (c) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan
(including any Multiemployer Plan), or (d) Employee Welfare Benefit Plan or
material fringe benefit plan or program.
"EMPLOYEE PENSION BENEFIT PLAN" has the meaning set forth in ERISA
section 3(2).
"EMPLOYEE WELFARE BENEFIT PLAN" has the meaning set forth in ERISA
section 3(1).
"ENVIRONMENTAL, HEALTH, AND SAFETY LAWS" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, and the Occupational Safety and Health
Act of 1976, each as amended, together with all other laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of federal, state, local, and foreign governments (and all
agencies thereof) concerning pollution or protection of the environment, public
health and safety, or employee health and safety, including laws relating to
emissions, discharges, releases, or threatened releases of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or wastes
into ambient air, surface water, ground water, or lands or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"ESCROW AGENT" means the Person identified as such in the Escrow
Agreement (or such Person's successor, as the case may be).
"ESCROW AGREEMENT" means the agreement between Buyer, Seller and the
Escrow Agent in the form of EXHIBIT A, attached hereto, which shall be executed
by the Parties and the Escrow Agent on or before the Closing Date.
"ESCROW AMOUNT" has the meaning set forth in 2(b) below.
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"ESCROW FUND" has the meaning ascribed to that term in the Escrow
Agreement.
"ESTIMATED WORKING CAPITAL" means $2,878,000.
"EXCESS CASH" means the amount (if any) by which the Working Capital
is reasonably expected to exceed the Estimated Working Capital. Such amount
shall be calculated by the Seller not more than 2 business days prior to the
anticipated Closing Date and shall be subject to the review and approval of the
Buyer.
"EXTREMELY HAZARDOUS SUBSTANCE" has the meaning set forth in section
302 of the Emergency Planning and Community Right-to-Know Act of 1986, as
amended.
"FIDUCIARY" has the meaning set forth in ERISA section 3(21).
"FINANCIAL STATEMENTS" has the meaning set forth in 4(g) below.
"GAAP" means United States generally accepted accounting principles
as in effect from time to time.
"XXXX-XXXXX-XXXXXX ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
"HIGH VALUE" has the meaning set forth in 2(e) below.
"INDEMNIFIABLE LOSS" has the meaning set forth in 8(e) below.
"INDEMNIFIED PARTY" and "INDEMNIFYING PARTY" have the meanings set
forth in 8(d) below.
"INDEMNITY PAYMENT" has the meaning set forth in 8(e) below.
"INTELLECTUAL PROPERTY" means (a) all inventions (whether patentable
or unpatentable and whether or not reduced to practice), all improvements
thereto, and all patents, patent applications, and patent disclosures, together
with all reissuances, continuations, continuations-in-part, revisions,
extensions, and reexaminations thereof, (b) all trademarks, service marks, trade
dress, logos, trade names, and corporate names, together with all translations,
adaptations, derivations, and combinations thereof and including all goodwill
associated therewith, and all applications, registrations, and renewals in
connection therewith, (c) all copyrightable works, all copyrights, and all
applications, registrations, and renewals in connection therewith, (d) all mask
works and all applications, registrations, and renewals in connection therewith,
(e) all trade secrets and Confidential Information (including ideas, research
and development, know-how, formulas, compositions, manufacturing and production
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processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (f) all computer software (including data and
related documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments of any of the foregoing (in whatever form or medium).
"INTERCOMPANY DEBT" means the outstanding indebtedness of Master
Products owed to Mespil, Inc. pursuant to the Loan Agreement between Master
Products and Mespil, Inc. dated as of December 19, 1994 (and the related
promissory note, if any, evidencing such indebtedness).
"KNOWLEDGE" means actual knowledge after reasonable investigation.
"LIABILITY" means any liability of any of Master Products and its
Subsidiaries (whether known or unknown, asserted or unasserted, absolute or
contingent, accrued or unaccrued, liquidated or unliquidated, and whether due or
to become due), including any liability for Taxes.
"LOW VALUE" has the meaning set forth in 2(e) below.
"MASTER PRODUCTS" has the meaning set forth in the preface above.
"MASTER PRODUCTS SHARES" means all of the issued and outstanding
shares of capital stock of Master Products, including all voting and non-voting
stock and all common and preferred stock of all classes and designations.
"MOST RECENT AUDITED BALANCE SHEET" means the balance sheet
contained within the Most Recent Audited Financial Statement.
"MOST RECENT AUDITED FINANCIAL STATEMENT" has the meaning set forth
in 4(g) below.
"MOST RECENT UNAUDITED BALANCE SHEET" means the balance sheet
contained within the Most Recent Unaudited Financial Statement.
"MOST RECENT UNAUDITED FINANCIAL STATEMENT" has the meaning set
forth in 4(g) below.
"MOST RECENT FISCAL MONTH END" has the meaning set forth in 4(g)
below.
"MOST RECENT FISCAL YEAR END" has the meaning set forth in 4(g)
below.
"MULTIEMPLOYER PLAN" has the meaning set forth in ERISA section
3(37).
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"OBJECTION NOTICE" has the meaning set forth in 2(e) below.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"PARTY(IES)" has the meaning set forth in the preface above.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"PRELIMINARY PURCHASE PRICE" has the meaning set forth in 2(b)
below.
"PROHIBITED TRANSACTION" has the meaning set forth in ERISA section
406 and Code section 4975.
"PURCHASE PRICE" has the meaning set forth in 2(f) below.
"REAL PROPERTY" means the real property, with all buildings,
structures, improvements, and all easements and rights appurtenant thereto,
described on Disclosure Schedules 4(l)(i) and 4(l)(ii).
"REPORTABLE EVENT" has the meaning set forth in ERISA section 4043.
"RETAINED LIABILITIES" means and includes (a) any indebtedness or
other Liability of any kind or nature of any of Master Products or its
Subsidiaries to Seller, or to any of Seller's Affiliates, or to any of their
officers, directors or shareholders, as of the Closing, including but not
limited to the management services agreement (with Xxxxx Xxxxx U.S.A., Inc.) and
the Intercompany Debt, (b) any Liability resulting from, arising out of,
relating to or caused by any litigation against any of Master Products and its
Subsidiaries which is pending as of the Closing, or which is filed after the
Closing but relates to or arises out of events which occurred prior to the
Closing, including the expense and obligation of defending against the same
(except to the extent such Liability is covered by insurance, in which case the
matter shall be submitted to the insurance carrier for handling), (c) any
Liability resulting from, arising out of, relating to or caused by the
employment or termination of employment of any of Xxxx Xxxxxx, Mimma Del Xxxxxxx
and Xxx Xxxxx, (d) any other Liability which is not a Disclosed Liability and
(e) any Liability for state or federal income taxes which may arise to the
extent the intercompany account between Master Products and Productos Maestros
de Oficina, S.A. de C.V. shall be determined to have exceeded $2,475,000 as of
the Closing Date.
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"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITY INTEREST" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than liens for Taxes not yet due and
payable.
"SELLER" has the meaning set forth in the preface above.
"SELLER'S PARENT" means Xxxxx Xxxxx plc, a corporation formed under
the laws of Ireland.
"SUBSIDIARY" means any corporation, limited liability company,
partnership or other business entity with respect to which a specified Person
(or a Subsidiary thereof) owns a majority of the common stock or ownership
interests, or has the power to vote or direct the voting of sufficient
securities or voting interests to elect a majority of the directors or managers
of the entity.
"SURVIVAL PERIOD" has the meaning set forth in 8(a) below.
"TAX" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code section
59A), customs, duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value-added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not.
"TAX RETURN" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"THIRD PARTY CLAIM" has the meaning set forth in 8(d) below.
"WORKING CAPITAL" means the excess of Master Products' and its
Subsidiaries' current assets over current liabilities (excluding the current
portion of long-term debt and capital lease obligations) as shown on the Closing
Date Balance Sheet.
2. PURCHASE AND SALE OF THE MASTER PRODUCTS SHARES.
(a) BASIC TRANSACTION. On and subject to the terms and conditions
of this Agreement, the Buyer agrees to purchase from the Seller, and the Seller
agrees to sell to the Buyer, all of the Master Products Shares for the
consideration specified below in this Section
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2.
(b) PRELIMINARY PURCHASE PRICE. For the purchase of the Master
Products Shares, the Buyer agrees to pay to the Seller the sum of Nine Million
One Hundred Eighteen Thousand and No/100ths Dollars ($9,118,000) (the
"PRELIMINARY PURCHASE PRICE"), subject to the post-closing adjustments provided
below in this Section 2. The Buyer shall pay the Preliminary Purchase Price to
the Seller at the Closing by delivery of (i) cash in the amount of Eight Million
Five Hundred Forty-Three Thousand and No/100 Dollars ($8,543,000) payable by
wire transfer or delivery of other immediately available funds, and (ii) cash in
the amount of Five Hundred Seventy-Five Thousand and No/100 Dollars ($575,000)
(the "ESCROW AMOUNT") payable to the Escrow Agent. The Parties agree that the
Escrow Amount shall be held and disbursed by the Escrow Agent in accordance with
the terms of the Escrow Agreement.
(c) THE CLOSING. The exchange of executed agreements and
instruments and the payment of the Preliminary Purchase Price contemplated by
this Agreement (the "CLOSING") shall take place at the offices of Xxxx & Xxxxx
Professional Corporation, Los Angeles, California commencing at 8:00 a.m. local
time on June 16, 1997 or such other date and time as the Buyer and the Seller
may mutually determine (the "CLOSING DATE"); PROVIDED, HOWEVER, that the Closing
Date shall be no later than June 30, 1997.
(d) DELIVERIES AT THE CLOSING. At the Closing, (i) the Seller will
deliver to the Buyer the various certificates, instruments, and documents
referred to in Section 7(a) below, (ii) the Buyer will deliver to the Seller the
various certificates, instruments, and documents referred to in Section 7(b)
below, (iii) the Seller will deliver to the Buyer stock certificates
representing all of the Master Products Shares, endorsed in blank or accompanied
by duly executed assignment documents, and (iv) the Buyer will deliver to the
Seller the consideration specified in Section 2(b) above.
(e) PREPARATION OF CLOSING DATE BALANCE SHEET.
(i) Within 60 days after the Closing Date, the Buyer will
prepare and deliver to the Seller a draft consolidated balance sheet
(including the notes thereto, the "DRAFT CLOSING DATE BALANCE
SHEET") for Master Products and its Subsidiaries as of the close of
business on the Closing Date (determined on a pro forma basis as
though the Parties had not consummated the transactions contemplated
by this Agreement). The Buyer will prepare the Draft Closing Date
Balance Sheet in accordance with GAAP applied on a basis consistent
with the preparation of the Financial Statements; PROVIDED, HOWEVER,
that assets, liabilities, gains, losses, revenues, and expenses in
interim periods or as of dates other than year-end will be
determined for purposes of the Draft Closing Date Balance Sheet,
through full application of the procedures used in preparing the
Most Recent Audited Balance Sheet.
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(ii) If the Seller has any objections to the Working Capital
as reflected on the Draft Closing Date Balance Sheet, it will
deliver a statement describing in reasonable detail its objections
(an "OBJECTION NOTICE") to the Buyer within 30 days after receiving
the Draft Closing Date Balance Sheet. The Buyer and the Seller will
use reasonable efforts to resolve any such objections themselves. If
the Parties do not obtain a final resolution within 30 days after
the Buyer has received the Objection Notice, however, the Buyer and
the Seller will engage Coopers & Xxxxxxx to resolve any remaining
objections. If Coopers & Xxxxxxx is not willing or available to
perform such services, and the Buyer and the Seller are unable to
agree on the choice of a substitute accounting firm, they will
select a national accounting firm by lot (after excluding their
respective regular outside accounting firms). The determination of
Coopers & Xxxxxxx (or such substitute accounting firm) will be set
forth in writing and will be conclusive and binding upon the
Parties. The Buyer will revise the Draft Closing Date Balance Sheet
as appropriate to reflect the resolution of any objections thereto
pursuant to this Section 2(e)(ii). The "CLOSING DATE BALANCE SHEET"
shall mean the Draft Closing Date Balance Sheet together with any
revisions thereto pursuant to this Section 2(e)(ii).
(iii) In the event the Parties submit any unresolved
objections to an accounting firm for resolution as provided in
Section 2(e)(ii) above, the Buyer and the Seller will share
responsibility for the fees and expenses of the accounting firm as
follows:
(A) if the accounting firm agrees with the Buyer as to
all of the remaining objections (the Working Capital so determined
is referred to herein as the "LOW VALUE"), the Seller will be
responsible for all of the fees and expenses of the accounting firm;
(B) if the accounting firm agrees with the Seller as to
all of the remaining objections (the Working Capital so determined
is referred to herein as the "HIGH VALUE"), the Buyer will be
responsible for all of the fees and expenses of the accounting firm;
and
(C) if the accounting firm agrees with the Buyer as to
some of the remaining objections and agrees with the Seller as to
the rest of the remaining objections, or if the accounting firm
reaches its own determination as to the resolution of some or all of
the remaining objections (the Working Capital so determined is
referred to herein as the "ACTUAL VALUE"), the Seller will be
responsible for that fraction of the fees and expenses of the
accounting firm equal to (a) the difference between the High Value
and the Actual Value over (b) the difference between the High Value
and the Low Value, and the Buyer will be responsible for the
remainder of the fees and expenses.
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(iv) The Buyer will make the work papers and back-up
materials used in preparing the Draft Closing Date Balance Sheet and
the books and records of Master Products and its Subsidiaries
available to the Seller and its accountants and other
representatives at reasonable times and upon reasonable notice at
any time during (A) the preparation by the Buyer of the Draft
Closing Date Balance Sheet, (B) the review by the Seller of the
Draft Closing Date Balance Sheet, and (C) the resolution by the
Parties of any objections thereto.
(f) ADJUSTMENT TO PRELIMINARY PURCHASE PRICE. The Preliminary
Purchase Price will be adjusted as follows:
(i) If the Working Capital exceeds the Estimated Working
Capital, the Buyer shall pay to the Seller an amount equal to such
excess by wire transfer or delivery of other immediately available
funds within three business days after the date on which the Working
Capital is finally determined pursuant to Section 2(e) above.
(ii) If the Working Capital is less than the Estimated Working
Capital, the Seller shall pay to the Buyer an amount equal to such
deficiency by wire transfer or delivery of other immediately
available funds within three business days after the date on which
the Working Capital finally is determined pursuant to Section 2(e)
above.
(iii) The Parties understand, acknowledge and agree that the
Escrow Fund is being established not for the purpose of funding any
purchase price adjustment owing by the Seller, but rather to provide
security to the Buyer for the purpose of securing the Seller's
performance of its indemnification obligations hereunder. Each of
the Parties understands, acknowledges and agrees that its failure or
refusal to pay promptly any amount due to the other Party under this
Section 2(f) shall be a breach of this Agreement. Further, Seller
understands, acknowledges and agrees that the Seller's obligation to
pay any amount due under Section 2(f)(ii) shall not be subject to
the minimum threshold set forth in Section 8(b)(i) below.
Notwithstanding the foregoing, the Parties shall be entitled to
assert a claim for any amount due under this Section 2(f) (along
with any related attorneys' fees, costs and expenses) pursuant to
the terms of the Escrow Agreement.
The Preliminary Purchase Price as so adjusted is referred to herein as the
"PURCHASE PRICE."
(g) RETAINED LIABILITIES. At the Closing, the Seller shall
execute and deliver to the Buyer an Assumption Agreement in the form of
EXHIBIT B, attached hereto, whereby the Seller assumes and unconditionally
undertakes to pay, perform and discharge all of the Retained Liabilities.
Immediately prior to the Closing (and after Seller has applied any Excess
Cash towards the repayment of the Intercompany Debt), the Seller shall
make a contribution to the
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capital of Master Products in an amount equal to the then outstanding balance of
the Intercompany Debt for the purpose of retiring all such Intercompany Debt so
that it is no longer a Liability of Master Products or any of its Subsidiaries
at the time of the Closing.
3. REPRESENTATIONS AND WARRANTIES CONCERNING THE TRANSACTION.
(a) REPRESENTATIONS AND WARRANTIES OF THE SELLER. Except as set forth in
the Disclosure Schedule, the Seller represents and warrants to the Buyer that
the following statements are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date as though made
then and as though the Closing Date were substituted for the date of this
Agreement throughout this Section 3(a):
(i) ORGANIZATION OF SELLER. The Seller is duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation.
(ii) AUTHORIZATION OF TRANSACTION. The Seller has full power and
authority (including full corporate power and authority) to execute and
deliver this Agreement and to perform its obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of the
Seller, enforceable in accordance with its terms and conditions. The
Seller need not give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental
agency in order to consummate the transactions contemplated by this
Agreement.
(iii) NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated
hereby, will (A) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which the Seller is
subject, (B) violate any provision of Seller's charter or bylaws or (C)
conflict with, result in a breach of, constitute a default under, result
in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which the
Seller is a party or by which it is bound or to which any of its assets is
subject.
(iv) BROKERS' FEES. Neither the Seller nor Master Products has any
Liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this
Agreement for which the Buyer or Master Products could become liable or
obligated, including but not limited to any broker's or finder's fee which
will become due as a result of this transaction to Xxxxxxx Xxxxxx. Seller
shall bear the entire cost, expense, liability and responsibility of and
for any such fee (and any related costs).
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(v) MASTER PRODUCTS SHARES. The Seller holds of record and owns
beneficially 100% of the issued and outstanding Master Products Shares,
free and clear of any restrictions on transfer (other than any
restrictions under the Securities Act and state securities laws), Taxes,
Security Interests, options, warrants, purchase rights, contracts,
commitments, equities, claims, and demands. The Seller is not a party to
any option, warrant, purchase right, or other contract or commitment
(other than this Agreement) that could require the Seller to sell,
transfer, or otherwise dispose of any capital stock of Master Products.
The Seller is not a party to any voting trust, proxy, or other agreement
or understanding, with respect to the voting of any of the Master Products
Shares.
(b) REPRESENTATIONS AND WARRANTIES OF THE BUYER. Except as set forth in
the Disclosure Schedule, the Buyer represents and warrants to the Seller that
the following statements are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date as though made
then and as though the Closing Date were substituted for the date of this
Agreement throughout this Section 3(b):
(i) ORGANIZATION OF THE BUYER. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(ii) AUTHORIZATION OF TRANSACTION. The Buyer has full power and
authority (including full corporate power and authority) to execute and
deliver this Agreement and to perform its obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of the
Buyer, enforceable in accordance with its terms and conditions. The Buyer
need not give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental
agency in order to consummate the transactions contemplated by this
Agreement.
(iii) NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated
hereby, will (A) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which the Buyer is
subject, (B) violate any provision of Buyer's charter or bylaws or (C)
conflict with, result in a breach of, constitute a default under, result
in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which the
Buyer is a party or by which it is bound or to which any of its assets is
subject.
(iv) BROKERS' FEES. The Buyer has no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to
the transactions
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contemplated by this Agreement for which Seller could become liable or
obligated.
(v) INVESTMENT. The Buyer is acquiring the Master Products Shares
for its own account, for investment only, and not with a view to or for
resale in connection with any distribution thereof within the meaning of
the Securities Act. The Buyer is an Accredited Investor.
(vi) FINANCING. The Buyer presently has, and as of the Closing Date
will have, sufficient financial resources to enable it to consummate the
transactions contemplated by this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF SELLER CONCERNING MASTER PRODUCTS
AND ITS SUBSIDIARIES. Except as set forth in the Disclosure Schedule, the Seller
represents and warrants to the Buyer that the following statements are correct
and complete as of the date of this Agreement and will be correct and complete
as of the Closing Date as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section 4:
(a) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. Each of Master
Products and its Subsidiaries (i) is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly authorized to conduct business and is in good
standing under the laws of California, Mexico, and each other jurisdiction where
such qualification is required, except where the failure to be so qualified
would not have a material adverse effect on Master Products and its
Subsidiaries, and (iii) has full corporate power and authority and all licenses,
permits, and authorizations necessary to carry on the businesses in which it is
engaged and in which it presently proposes to engage and to own and use the
properties owned and used by it. Section 4(a) of the Disclosure Schedule lists
the directors and officers of Master Products and its Subsidiaries (as of the
date of this Agreement). The Seller has delivered to the Buyer correct and
complete copies of the charter and bylaws of each of Master Products and its
Subsidiaries (as amended to date). The minute books (containing the records of
meetings of the stockholders, the board of directors, and any committees of the
board of directors), the stock certificate books, and the stock record books of
each of Master Products and its Subsidiaries are correct and complete. None of
Master Products and its Subsidiaries is in default under or in violation of any
provision of its charter or bylaws.
(b) CAPITALIZATION. The entire authorized capital stock of Master
Products consists of 3,000 shares of common stock (no par value) of which all
3,000 shares are issued and outstanding, and 6,000 shares of preferred stock
($1.00 par value), none of which are issued and outstanding. All of the issued
and outstanding Master Products Shares have been duly authorized, are validly
issued, fully paid, and nonassessable, and are held of record by the Seller.
There are no outstanding or authorized options, warrants, purchase rights,
subscription
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rights, conversion rights, exchange rights, or other contracts or commitments
that could require Master Products to issue, sell, or otherwise cause to become
outstanding any of its capital stock. There are no outstanding or authorized
stock appreciation, phantom stock, profit participation, or similar rights with
respect to Master Products. There are no voting trusts, proxies, or other
agreements or understandings with respect to the voting of the capital stock of
Master Products.
(c) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which any of Master Products and its
Subsidiaries is subject, (ii) violate any provision of the charter or bylaws of
any of Master Products and its Subsidiaries or (iii) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which any of Master Products and its Subsidiaries is a party or
by which any of them is bound or to which any of their assets is subject (or
result in the imposition of any Security Interest upon any of their assets).
None of Master Products and its Subsidiaries needs to give any notice to, make
any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for it to consummate the transactions
contemplated by this Agreement.
(d) BROKERS' FEES. None of Master Products and its Subsidiaries has any
Liability or obligation to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by this Agreement.
(e) TITLE TO ASSETS. Master Products and its Subsidiaries own, or have
valid leasehold interests in, all properties and assets of any kind or nature
used in the conduct of the business of Master Products and its Subsidiaries,
including but not limited to the properties and assets described, listed or
included on the Most Recent Audited Balance Sheet. Without limiting the
generality of the foregoing, the properties and assets owned or leased by Master
Products at and as of the Closing will include: the real estate described in the
title policy referred to in Section 5(h) below (including all improvements
thereon); the corporate name "Master Products Manufacturing Company, Inc.", the
corporate name "Productos Maestros de Oficina, S.A. de C.V." and all other
material names, tradenames, trademarks, service marks, etc. now used in
connection with Master Products' and its Subsidiaries' business; all patents,
copyrights, designs, drawings, plans, specifications, archives and other
intellectual property of Master Products; all of Master Products' machinery,
equipment, tools, patterns, jigs and dies; all vehicles; all office equipment
and furnishings; all computer hardware and software; all inventory (including
raw materials, work in process and finished goods) and supplies; all leases,
licenses and contracts, including but not limited to the lease with respect to
the facilities of Productos Maestros de Oficina, S.A. de C.V. in Tijuana,
Mexico; cash then on hand; all
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securities and investments, if any; the capital stock of Master Products'
Subsidiary, Productos Maestros de Oficina, S.A. de C.V., and any other
Subsidiaries of Master Products; all accounts receivable and notes receivable of
Master Products and its Subsidiaries; and all orders of Master Products and its
Subsidiaries. As for the properties and assets owned by Master Products and its
Subsidiaries (other than goods sold in the Ordinary Course of Business since the
date of the Most Recent Audited Balance Sheet) Master Products and its
Subsidiaries have good and valid title to such assets and properties free and
clear of all Security Interests, except for: (i) exceptions to title as set
forth in Section 4(e) of the Disclosure Schedule; (ii) mortgages and
encumbrances which secure indebtedness or obligations which are properly
reflected in the Financial Statements; (iii) liens for Taxes not yet payable or
any Taxes being contested in good faith; and (iv) liens arising as a matter of
law in the Ordinary Course of Business, provided that the obligations secured by
such liens are not delinquent or are being contested in good faith. To the
extent that there are any liens of the nature described in subparagraphs (iii)
and (iv) above which are being contested, the same have been disclosed in
Section 4(e) of the Disclosure Schedule.
(f) SUBSIDIARIES. Section 4(f) of the Disclosure Schedule sets forth for
Productos Maestros de Oficina, S.A. de C.V., the only Subsidiary of Master
Products: (i) its name and jurisdiction of incorporation; (ii) the number of
shares of authorized capital stock of each class of its capital stock; (iii) the
number of issued and outstanding shares of each class of its capital stock, the
names of the holders thereof, and the number of shares held by each such holder;
and (iv) the number of shares of its capital stock held in treasury. All of the
issued and outstanding shares of capital stock of each Subsidiary of Master
Products have been duly authorized and are validly issued, fully paid, and
nonassessable. One of Master Products and its Subsidiaries holds of record and
owns beneficially all of the outstanding shares of each Subsidiary of Master
Products, free and clear of any restrictions on transfer (other than
restrictions under the Securities Act and state securities laws and
corresponding laws of Mexico), Taxes, Security Interests, options, warrants,
purchase rights, contracts, commitments, equities, claims, and demands. There
are no outstanding or authorized options, warrants, purchase rights, conversion
rights, exchange rights, or other contracts or commitments that could require
any of Master Products and its Subsidiaries to sell, transfer, or otherwise
dispose of any capital stock of any of its Subsidiaries or that could require
any Subsidiary of Master Products to issue, sell, or otherwise cause to become
outstanding any of its own capital stock. There are no outstanding stock
appreciation, phantom stock, profit participation, or similar rights with
respect to any Subsidiary of Master Products. There are no voting trusts,
proxies, or other agreements or understandings with respect to the voting of any
capital stock of any Subsidiary of Master Products. None of Master Products and
its Subsidiaries controls directly or indirectly or has any direct or indirect
equity participation in any corporation, partnership, trust, or other business
association which is not a Subsidiary of Master Products.
(g) FINANCIAL STATEMENTS. Attached hereto as EXHIBIT C are the following
financial
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statements (collectively the "FINANCIAL STATEMENTS"): (i) audited consolidated
balance sheets and statements of income, changes in stockholders' equity, and
cash flow as of and for the fiscal years ended December 31, 1992, December 31,
1993, December 31, 1994, December 31, 1995, and December 31, 1996 (the "MOST
RECENT FISCAL YEAR END") for Master Products and its Subsidiaries (the Financial
Statement for the Most Recent Fiscal Year End is referred to herein as the "MOST
RECENT AUDITED FINANCIAL STATEMENT"); and (ii) unaudited consolidated balance
sheets and statements of income, changes in stockholders' equity, and cash flow
(the "MOST RECENT UNAUDITED FINANCIAL STATEMENT") as of and for the three months
ended March 31, 1997 (the "MOST RECENT FISCAL MONTH END") for Master Products
and its Subsidiaries. The Financial Statements (including the notes thereto)
have been prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered thereby, present fairly the financial condition
of Master Products and its Subsidiaries as of such dates and the results of
operations of Master Products and its Subsidiaries for such periods, and are
consistent with the books and records of Master Products and its Subsidiaries
(which books and records are correct and complete in all material respects). All
Liabilities will be appropriately reserved and accrued through the Closing Date
in accordance with GAAP applied on a basis consistent with past practices.
(h) EVENTS SUBSEQUENT TO MOST RECENT FISCAL YEAR END. Since the Most
Recent Fiscal Year End, there has not been any material adverse change in the
business, financial condition, operations or results of operations of Master
Products and its Subsidiaries, taken as a whole. Without limiting the generality
of the foregoing, since that date:
(i) none of Master Products and its Subsidiaries has sold, leased,
transferred, or assigned any of its assets, tangible or intangible, other
than in the Ordinary Course of Business;
(ii) none of Master Products and its Subsidiaries has entered into
any agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) outside the Ordinary Course
of Business;
(iii) no Person has accelerated, terminated, modified, or cancelled
any agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) involving more than $10,000
to which any of Master Products and its Subsidiaries is a party or by
which any of them is bound;
(iv) none of Master Products and its Subsidiaries has imposed (or
allowed any other Person to impose) any Security Interest (except for the
exceptions permitted or allowed in Section 4(e) above) upon any of its
assets, tangible or intangible;
(v) none of Master Products and its Subsidiaries has made any
capital expenditure (or series of related capital expenditures) involving
more than $10,000 or
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outside the Ordinary Course of Business;
(vi) none of Master Products and its Subsidiaries has made any
capital investment in, any loan to, or any acquisition of the securities
or assets of, any other Person (or series of related capital investments,
loans, and acquisitions) involving more than $10,000;
(vii) none of Master Products and its Subsidiaries has issued any
note, bond, or other debt security or created, incurred, assumed, or
guaranteed any indebtedness for borrowed money or capitalized lease
obligation either involving more than $10,000 singly or $25,000 in the
aggregate other than in the Ordinary Course of Business;
(viii) none of Master Products and its Subsidiaries has delayed or
postponed the payment of accounts payable and other Liabilities outside
the Ordinary Course of Business;
(ix) none of Master Products and its Subsidiaries has cancelled, or
knowingly compromised, waived, or released any right or claim (or series
of related rights and claims) outside the Ordinary Course of Business;
(x) there has been no change made or authorized in the charter or
bylaws of any of Master Products and its Subsidiaries;
(xi) none of Master Products and its Subsidiaries has changed its
accounting methods or practices or any depreciation or amortization
policies or rates theretofore adopted;
(xii) except as expressly permitted by this Agreement, none of
Master Products and its Subsidiaries has transferred any of its material
assets to any of its Affiliates or any third party, nor declared, set
aside, or paid any dividend or made any distribution with respect to its
capital stock (whether in cash or in kind) or redeemed, purchased, or
otherwise acquired any of its capital stock;
(xiii) none of Master Products and its Subsidiaries has experienced
any material damage, destruction, or loss (whether or not covered by
insurance) to its property;
(xiv) none of Master Products and its Subsidiaries has made any loan
to, or entered into any other transaction with, any of its directors,
officers, or employees other than payments or advances for expenses in the
Ordinary Course of Business;
(xv) none of Master Products and its Subsidiaries has entered into
any
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employment contract outside of the Ordinary Course of Business or entered
into any collective bargaining agreement, written or oral, or modified the
terms of any existing such contract or agreement;
(xvi) none of Master Products and its Subsidiaries has granted any
increase in the base compensation of any of its directors, officers, and
employees outside the Ordinary Course of Business;
(xvii) none of Master Products and its Subsidiaries has adopted,
amended, modified, or terminated any bonus, profit-sharing, incentive,
severance, or other plan, contract, or commitment for the benefit of any
of its directors, officers, and employees (or taken any such action with
respect to any other Employee Benefit Plan);
(xviii) none of Master Products and its Subsidiaries has made any
other change in employment terms for any of its directors, officers, and
employees outside the Ordinary Course of Business;
(xix) no material and beneficial customer, supplier, distributor or
sales representative relationship of any of Master Products and its
Subsidiaries has been terminated or, to the Knowledge of Seller, adversely
affected;
(xx) none of Master Products and its Subsidiaries has made or
pledged to make any charitable or capital contribution;
(xxi) there has not been any transaction by Master Products or its
Subsidiaries outside the Ordinary Course of Business, or to the Knowledge
of Seller, any other material occurrence, event, incident, action or
failure to act, adversely affecting any of Master Products and its
Subsidiaries; and
(xxii) none of Master Products and its Subsidiaries has committed to
any of the foregoing.
(i) UNDISCLOSED LIABILITIES. None of Master Products and its
Subsidiaries has any Liability (and, to the Knowledge of Seller, there is no
Basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against any of them giving
rise to any Liability), except for (i) the Disclosed Liabilities, (ii)
Liabilities which have arisen after the Most Recent Fiscal Year End in the
Ordinary Course of Business (none of which results from, arises out of, relates
to, is in the nature of, or was caused by any breach of contract, breach of
warranty, tort, infringement, or violation of law), and (iii) the Retained
Liabilities.
(j) LEGAL COMPLIANCE. Each of Master Products, its Subsidiaries and
their respective predecessors and Affiliates has complied with all material laws
(including rules,
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regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of federal, state, local, and foreign governments (and all
agencies thereof), and no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand, or notice has been filed or, to the Knowledge
of Seller, commenced or threatened against any of them alleging any failure so
to comply.
(k) TAX MATTERS.
(i) TAX RETURNS. Each of Master Products and its Subsidiaries has
filed all Tax Returns that it was required to file. All such Tax Returns
were correct and complete in all material respects. All Taxes owed by any
of Master Products and its Subsidiaries (whether or not shown on any Tax
Return) have been paid. None of Master Products and its Subsidiaries
currently is the beneficiary of any extension of time within which to file
any Tax Return. Neither Seller nor Master Products (or any of its
Subsidiaries) has received notice of any claim from an authority in a
jurisdiction where any of Master Products and its Subsidiaries does not
file Tax Returns that it is subject to taxation by that jurisdiction.
There are no Security Interests on any of the assets of any of Master
Products and its Subsidiaries that arose in connection with any failure
(or alleged failure) to pay any Tax, except liens for current Taxes not
yet due or Taxes being contested in good faith by appropriate proceedings.
(ii) WITHHOLDING. Each of Master Products and its Subsidiaries has
withheld and paid all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party.
(iii) ADDITIONAL TAXES; AUDITS. Neither Seller nor any director or
officer (or employee responsible for Tax matters) of any of Master
Products and its Subsidiaries expects any authority to assess any
additional Taxes for any period for which Tax Returns have been filed.
There is no dispute or claim concerning any Tax Liability of any of Master
Products and its Subsidiaries either (A) claimed or raised by any
authority in writing or (B) as to which any of the Seller and the
directors and officers (and employees responsible for Tax matters) of
Master Products and its Subsidiaries has Knowledge based upon personal
contact with any agent of such authority. Section 4(k) of the Disclosure
Schedule lists all federal, state, local, and foreign income Tax Returns
filed with respect to any of Master Products and its Subsidiaries for
taxable periods ended on or after December 31, 1992, indicates those Tax
Returns that have been audited, and indicates those Tax Returns that
currently are the subject of audit. The Seller has delivered to the Buyer
correct and complete copies of all federal income Tax Returns, examination
reports, and statements of deficiencies assessed against or agreed to by
Master Products and its Subsidiaries since December 31, 1992.
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(iv) STATUTES OF LIMITATIONS. None of Master Products and its
Subsidiaries has waived any statute of limitations in respect of Taxes or
agreed to any extension of time with respect to a Tax assessment or
deficiency.
(v) MISCELLANEOUS. None of Master Products and its Subsidiaries has:
(A) filed a consent under Code section 341(f) concerning collapsible
corporations; (B) made any payments, is not obligated to make any
payments, nor is a party to any agreement that under certain circumstances
could obligate it to make any payments that will not be deductible under
Code section 280G; (C) been or currently is a party to any Tax allocation
or sharing agreement; (D) been a member of an Affiliated Group filing a
consolidated federal income Tax Return (other than a group the common
parent of which was Master Products); (E) any Liability for the Taxes of
any Person (other than Master Products) under Treas. Reg. section 1.1502-6
(or any similar provision of state, local, or foreign law), as a
transferee or successor, by contract, or otherwise; or (F) any liability
for the Taxes attributable or allocable to any of Seller's current or
former Affiliates (except for Master Products and Productos Maestros de
Oficina, S.A. de C.V.). Master Products has disclosed on its federal
income Tax Returns all positions taken therein that could give rise to a
substantial understatement of federal income Tax within the meaning of
Code section 6662.
(vi) BASIS IN ASSETS AND STOCK; GAINS AND LOSSES; ETC. Section 4(k)
of the Disclosure Schedule sets forth the following information with
respect to each of Master Products and its Subsidiaries as of the most
recent practicable date: (A) the basis of Master Products and its
Subsidiaries in their assets; (B) the amount of any net operating loss,
net capital loss, unused investment or other credit, unused foreign tax,
or excess charitable contribution allocable to Master Products or the
Subsidiary; and (C) the amount of any deferred gain or loss allocable to
Master Products or the Subsidiary arising out of any Deferred Intercompany
Transaction.
(vii) RESERVES. The unpaid Taxes of Master Products and its
Subsidiaries (A) did not, as of the Most Recent Fiscal Month End, exceed
the reserve for Tax Liability (rather than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) set
forth on the face of the Most Recent Unaudited Balance Sheet (rather than
in any notes thereto) and (B) do not exceed that reserve as adjusted for
the passage of time through the Closing Date in accordance with the past
custom and practice of Master Products and its Subsidiaries in filing
their Tax Return(s).
(viii) FIRPTA. None of Master Products and its Subsidiaries is now
or has been (during the applicable period specified in Code Section
897(c)(1)(A)(ii)) a United States real property holding corporation under
the Code. Additionally, the Seller represents and warrants that Code
Section 897 does not require any withholding with
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respect to this transaction.
(l) REAL PROPERTY.
(i) OWNED REAL PROPERTY. Section 4(1) of the Disclosure Schedule
lists all real property that any of Master Products and its Subsidiaries
owns. With respect to each such parcel of owned real property:
(A) Master Products has good and marketable title to the parcel
of real property, free and clear of any Security Interest, easement,
covenant, or other restriction, except for installments of special
assessments not yet delinquent and recorded easements, covenants, and
other restrictions which do not impair the current use, occupancy, or
value, or the marketability of title, of the property subject thereto;
(B) there are no pending or, to the Knowledge of any of the
Seller and the directors and officers (and employees with responsibility
for real estate matters) of Master Products and its Subsidiaries,
threatened condemnation proceedings, lawsuits, or administrative actions
against Master Products and its Subsidiaries relating to the property and
affecting adversely the current use, occupancy, or value thereof;
(C) the legal description for the parcel contained in the deed
thereof describes such parcel fully and adequately, the buildings and
improvements are located within the boundary lines of the described
parcels of land, are not in violation of applicable setback requirements,
zoning laws, and ordinances (and none of the properties or buildings or
improvements thereon are subject to "permitted non-conforming use" or
"permitted non-conforming structure" classifications), and except as
disclosed to Buyer in the Disclosure Schedule, do not encroach on any
easement which may burden the land, and the land does not serve any
adjoining property for any purpose inconsistent with the use of the land,
and the property is not located within any flood plain or subject to any
similar type of restriction for which any permits or licenses necessary to
the use thereof have not been obtained;
(D) to the Knowledge of the Seller, all facilities have received
all approvals of governmental authorities (including licenses and permits)
required in connection with the ownership or operation thereof and have
been operated and maintained in accordance with applicable laws, rules,
and regulations in all material respects;
(E) other than with respect to easements and similar matters
disclosed of record or otherwise disclosed to Buyer in the Disclosure
Schedule, there are no leases, subleases, licenses, concessions, or other
agreements, written or oral, granting to any party or parties the right of
use or occupancy of any portion of the parcel of real
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property;
(F) there are no outstanding options or rights of first refusal
(or similar rights) to purchase the parcel of real property, or any
portion thereof or interest therein;
(G) there are no parties (other than Master Products and its
Subsidiaries) in possession of the parcel of real property, other than
tenants under any leases disclosed in Section 4(1) of the Disclosure
Schedule who are in possession of space to which they are entitled;
(H) to the Knowledge of the Seller, all facilities located on the
parcel of real property are supplied with utilities and other services
necessary for the operation of such facilities, including gas,
electricity, water, telephone, sanitary sewer, and storm sewer, all of
which services are adequate for the business needs of Master Products and
its Subsidiaries; and
(I) to the Knowledge of the Seller, each parcel of real property
abuts on and has direct vehicular access to a public road, or has access
to a public road via a permanent, irrevocable, appurtenant easement
benefitting the parcel of real property.
(ii) LEASED REAL PROPERTY. Section 4(1) of the Disclosure Schedule
lists all real property currently leased or subleased to any of Master
Products and its Subsidiaries, including the leased facility located in
Tijuana, Mexico. The Seller has delivered to the Buyer correct and
complete copies of the leases and subleases listed in Section 4(1) of the
Disclosure Schedule. With respect to each lease and sublease listed in
Section 4(1) of the Disclosure Schedule:
(A) the lease or sublease has not been terminated and is binding
and in full force and effect;
(B) the lease or sublease will continue to be binding and in full
force and effect on identical terms following the consummation of the
transactions contemplated hereby;
(C) to the Knowledge of the Seller, Master Products and its
Subsidiaries are not in breach or default under such lease or sublease,
and no event has occurred which, with notice or lapse of time, would
constitute a material breach or default by Master Products or any of its
Subsidiaries or permit termination, modification, or acceleration by the
lessor thereunder;
(D) there are no disputes or forbearance programs in effect as to
the lease or sublease;
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(E) none of Master Products and its Subsidiaries has assigned,
transferred, conveyed, mortgaged, deeded in trust, or encumbered any
interest in the leasehold or subleasehold;
(F) to the Knowledge of the Seller, all facilities leased or
subleased thereunder have received all approvals of governmental
authorities (including licenses and permits) required in connection with
the operation thereof and have been operated and to the Knowledge of
Seller maintained in accordance with applicable laws, rules, and
regulations;
(G) to the Knowledge of the Seller, all facilities leased or
subleased thereunder are currently supplied with utilities and other
services necessary for the operation of said facilities as currently
conducted; and
(H) None of Master Products and its Subsidiaries has received
notice of any breach or default under any such lease or sublease which has
not been fully cured.
(m) INTELLECTUAL PROPERTY.
(i) OWNERSHIP AND RIGHTS. Master Products and its Subsidiaries own
or have the right to use pursuant to license, sublicense, agreement, or
permission all material Intellectual Property used in the operation of the
businesses of Master Products and its Subsidiaries as presently conducted.
To the Knowledge of Seller and the directors and officers (and employees
with responsibility for Intellectual Property matters) of Master Products
and its Subsidiaries, each item of material Intellectual Property owned or
used by any of Master Products and its Subsidiaries immediately prior to
the Closing hereunder will be owned or available for use by Master
Products or the Subsidiary on identical terms and conditions immediately
subsequent to the Closing hereunder.
(ii) INTERFERENCE, INFRINGEMENT AND MISAPPROPRIATION. To the
Knowledge of Seller, none of Master Products and its Subsidiaries has
interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any Intellectual Property rights of third parties, and none
of the Seller and the directors and officers (and employees with
responsibility for Intellectual Property matters) of Master Products and
its Subsidiaries has ever received any charge, complaint, claim, demand,
or notice alleging any such interference, infringement, misappropriation,
or violation (including any claim that Master Products and its
Subsidiaries must license or refrain from using any Intellectual Property
rights of any third party). To the Knowledge of any of the Seller and the
directors and officers (and employees with responsibility for Intellectual
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Property matters) of Master Products and its Subsidiaries, no third party
has interfered with, infringed upon, misappropriated, or otherwise come
into conflict with any material Intellectual Property rights of any of
Master Products and its Subsidiaries.
(iii) OWNED INTELLECTUAL PROPERTY. Section 4(m) of the Disclosure
Schedule identifies each patent or registration which has been issued to
any of Master Products and its Subsidiaries with respect to any of its
Intellectual Property, identifies each pending patent application or
application for registration which any of Master Products and its
Subsidiaries has made with respect to any of its Intellectual Property,
and identifies each material license, agreement, or other permission which
any of Master Products and its Subsidiaries has granted to any third party
with respect to any of its Intellectual Property (together with any
exceptions). The Seller has delivered to the Buyer correct and complete
copies of all such patents, registrations, applications, licenses,
agreements, and permissions (as amended to date) and have made available
to the Buyer correct and complete copies of all other written
documentation evidencing ownership and prosecution (if applicable) of each
such item. Section 4(m) of the Disclosure Schedule also identifies each
trade name or unregistered trademark used by any of Master Products and
its Subsidiaries in connection with any of its businesses. With respect to
each item of owned Intellectual Property required to be identified in
Section 4(m) of the Disclosure Schedule:
(A) to Seller's Knowledge, Master Products and its Subsidiaries
possess all right, title, and interest in and to the item, free and clear
of any Security Interest, license, or other restriction;
(B) the item is not subject to any outstanding injunction,
judgment, order, decree, ruling, or charge;
(C) no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or, to the Knowledge of any of the
Seller and the directors and officers (and employees with responsibility
for Intellectual Property matters) of Master Products and its
Subsidiaries, is threatened which challenges the legality, validity,
enforceability, use, or ownership of the item; and
(D) none of Master Products and its Subsidiaries have ever
agreed to indemnify any Person for or against any interference,
infringement, misappropriation, or other conflict with respect to the
item.
(iv) LICENSED INTELLECTUAL PROPERTY. Section 4(m) of the Disclosure
Schedule identifies each item of Intellectual Property that any third
party owns and that any of Master Products and its Subsidiaries uses
pursuant to license, sublicense, agreement, or permission. The Seller has
delivered to the Buyer correct and complete copies of all
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such licenses, sublicenses, agreements, and permissions (as amended to
date). With respect to each item of leased or licensed Intellectual
Property required to be identified in Section 4(m) of the Disclosure
Schedule:
(A) the license, sublicense, agreement, or permission covering
the item is in full force and effect, and to Seller's Knowledge, legal,
valid, binding and enforceable;
(B) to Seller's Knowledge, the license, sublicense, agreement,
or permission will continue to be legal, valid, binding, enforceable, and
in full force and effect on identical terms following the Closing;
(C) Master Products is not in breach or default and, to Seller's
Knowledge, no other party to the license, sublicense, agreement, or
permission is in breach or default, and no event has occurred which with
notice or lapse of time would constitute a breach or default or permit
termination, modification, or acceleration thereunder;
(D) to Seller's Knowledge, the underlying item of Intellectual
Property is not subject to any outstanding injunction, judgment, order,
decree, ruling, or charge;
(E) to the Knowledge of any of the Seller and the directors and
officers (and employees with responsibility for Intellectual Property
matters) of Master Products and its Subsidiaries, no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand is
pending or threatened which challenges the legality, validity, or
enforceability of the underlying item of Intellectual Property; and
(F) none of Master Products and its Subsidiaries has granted any
sublicense or similar right with respect to the license, sublicense,
agreement, or permission.
(n) TANGIBLE ASSETS. Master Products and its Subsidiaries own or lease
all buildings, machinery, equipment, and other tangible assets necessary for the
conduct of their businesses as presently conducted. To the Knowledge of Seller,
each such tangible asset is free from defects (patent and latent), is in
satisfactory operating condition and repair (subject to normal wear and tear),
and is suitable for the purposes for which it presently is used.
(o) INVENTORY. The inventory of Master Products and its Subsidiaries
consists of raw materials and supplies, manufactured and purchased parts, goods
in process, and finished goods, all of which is merchantable and fit for the
purpose for which it was procured or manufactured, and none of which is
obsolete, damaged, or defective, subject only to the
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reserve for inventory write down set forth on the face of the Most Recent
Audited Balance Sheet (rather than in any notes thereto) as adjusted for the
passage of time through the Closing Date in accordance with the past custom and
practice of Master Products and its Subsidiaries.
(p) CONTRACTS. Section 4(p) of the Disclosure Schedule lists the
following contracts and other agreements to which any of Master Products and its
Subsidiaries is a party:
(i) any agreement (or group of related agreements) for the lease of
personal property to or from any Person providing for lease payments in
excess of $10,000 per annum;
(ii) any agreement (or group of related agreements) for the purchase
or sale of raw materials, commodities, supplies, products, or other
personal property, or for the furnishing or receipt of services, the
performance of which will extend over a period of more than one year,
result in a material loss to any of Master Products and its Subsidiaries,
or involve consideration in excess of $10,000;
(iii) any partnership or joint venture agreement;
(iv) any agreement (or group of related agreements) under which it
has created, incurred, assumed, or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligation, in excess of $10,000
or under which it has imposed a Security Interest on any material assets,
tangible or intangible, or securing such indebtedness or obligation;
(v) any agreement concerning confidentiality or noncompetition;
(vi) any agreement with any of the Seller and its Affiliates;
(vii) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or
arrangement for the benefit of its current or former directors, officers,
and employees;
(viii) any collective bargaining agreement;
(ix) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis providing (or which is
reasonably expected to result in) annual compensation or severance
benefits in excess of $50,000;
(x) any agreement under which it has an outstanding loan(s) to any
of its directors, officers, and employees;
(xi) any agreement (or group of related agreements) under which the
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consequences of a default or termination could have a material adverse
effect on the business, financial condition, operations, results of
operations, or future prospects of any of Master Products and its
Subsidiaries; or
(xii) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $10,000, other
than agreements which are cancelable by Master Products and its
Subsidiaries without premium or penalty on not more than 30 days notice.
The Seller has delivered to the Buyer a correct and complete copy of each
written agreement listed in Section 4(p) of the Disclosure Schedule (as
amended to date) and a written summary setting forth the terms and
conditions of each oral agreement referred to in Section 4(p) of the
Disclosure Schedule. With respect to each such agreement: (A) to the
Knowledge of the Seller, the agreement is legal, valid, binding,
enforceable, and in full force and effect; (B) to the Knowledge of Seller
the agreement will continue to be legal, valid, binding, enforceable, and
in full force and effect on identical terms following the consummation of
the transactions contemplated hereby; (C) Master Products and its
Subsidiaries are not in breach or default and, to the Knowledge of Seller,
no other party is in breach or default, and no event has occurred which
with notice or lapse of time would constitute a breach or default, or
permit termination, modification, or acceleration, under the agreement;
and (D) Master Products and its Subsidiaries have not repudiated and, to
the Knowledge of Seller, no other party has repudiated any provision of
the agreement.
(q) NOTES AND ACCOUNTS RECEIVABLE. All notes and accounts receivable of
Master Products and its Subsidiaries are reflected properly on their books and
records, are valid receivables subject to no setoffs or counterclaims are
current and collectible in accordance with their terms at their recorded
amounts, subject only to the reserve for bad debts set forth on the face of the
Most Recent Audited Balance Sheet (rather than in any notes thereto) as adjusted
for the passage of time through the Closing Date in accordance with the past
custom and practice of Master Products and its Subsidiaries.
(r) POWERS OF ATTORNEY. There are no outstanding powers of attorney
executed on behalf of any of Master Products and its Subsidiaries.
(s) INSURANCE. Section 4(s) of the Disclosure Schedule identifies each
insurance policy (including policies providing property, casualty, liability,
and workers' compensation coverage and bond and surety arrangements) to which
any of Master Products and its Subsidiaries has been a party, a named insured,
or otherwise the beneficiary of coverage at any time within the past 5 years.
The Seller has delivered to the Buyer correct and complete copies of each of the
policies listed in Section 4(s) of the Disclosure Schedule. Neither Master
Products and its Subsidiaries nor, to Seller's Knowledge, any other party to the
policy is in breach or default (including with respect to the payment of
premiums or the giving of notices),
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and, to Seller's Knowledge, no event has occurred which, with notice or the
lapse of time, would constitute such a breach or default, or permit termination,
modification, or acceleration, under the policy. Neither Master Products and its
Subsidiaries nor, to Seller's Knowledge, any other party to the policy, has
repudiated any provision thereof. To Seller's Knowledge, each of Master Products
and its Subsidiaries has been covered during the past 10 years by insurance in
scope and amount customary and reasonable for the businesses in which it has
engaged during the aforementioned period. Section 4(s) of the Disclosure
Schedule describes any self-insurance arrangements affecting any of Master
Products and its Subsidiaries.
(t) LITIGATION. Section 4(t) of the Disclosure Schedule sets forth each
action, suit, proceeding, hearing and investigation, and any outstanding
injunction, judgment, order, decree, ruling, or charge to which Master Products
or any of its Subsidiaries is a party. To the Knowledge of any of the Seller and
the directors and officers (and employees with responsibility for litigation
matters) of Master Products and its Subsidiaries, neither Master Products nor
any of its Subsidiaries is currently threatened to be made a party to any
action, suit, proceeding, hearing, or investigation of, in, or before any court
or quasi-judicial or administrative agency of any federal, state, local, or
foreign jurisdiction or before any arbitrator.
(u) PRODUCT WARRANTY. Each product marketed, manufactured, sold, leased,
distributed or delivered by any of Master Products and its Subsidiaries has been
in conformity with all applicable contractual commitments and all express and
implied warranties, and none of Master Products and its Subsidiaries has any
Liability (and there is no Basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand against
any of them giving rise to any Liability) for replacement or repair thereof or
other damages in connection therewith, subject only to Master Products'
historical product warranty claims experience as set forth in Section 4(u) of
the Disclosure Schedule. No product marketed, manufactured, sold, leased,
distributed or delivered by any of Master Products and its Subsidiaries is
subject to any guaranty, warranty, or other indemnity of Master Products or its
Subsidiaries beyond the applicable standard terms and conditions of sale.
Section 4(u) of the Disclosure Schedule includes copies of the standard terms
and conditions of sale for each of Master Products and its Subsidiaries
(containing applicable guaranty, warranty, and indemnity provisions).
(v) PRODUCT LIABILITY. To the Knowledge of the Seller, none of Master
Products and its Subsidiaries has any Liability (and, to the Knowledge of
Seller, there is no Basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand against any of them
giving rise to any Liability) arising out of any injury to individuals or
property as a result of the ownership, possession, storage or use of any product
marketed, manufactured, sold, leased, distributed or delivered by any of Master
Products and its Subsidiaries. Neither Seller nor Master Products nor any of its
Subsidiaries has received notice of any such Liability or alleged Liability.
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(w) EMPLOYEES. To the Knowledge of any of the Seller and the directors
and officers (and employees with responsibility for employment matters) of
Master Products and its Subsidiaries, no executive, key employee, or group of
employees has any plans to terminate employment with any of Master Products and
its Subsidiaries. None of Master Products and its Subsidiaries is a party to or
bound by any collective bargaining agreement, nor has any of them experienced
any strikes, grievances, claims of unfair labor practices, or other collective
bargaining disputes. None of Master Products and its Subsidiaries has committed
any unfair labor practice. None of the Seller and the directors and officers
(and employees with responsibility for employment matters) of Master Products
and its Subsidiaries has any Knowledge of any organizational effort presently
being made or threatened against any of Master Products and its Subsidiaries by
or on behalf of any labor union with respect to employees of any of Master
Products and its Subsidiaries. There are no employment agreements, oral or
written, which are binding upon Master Products or any of its Subsidiaries and
there are no unpaid employee claims of any kind or nature against Master
Products or any of its Subsidiaries (except for rights of employees to receive
accrued salary, wages, commissions or other compensation due to such employees
for services previously rendered or reasonable business expenses incurred in the
Ordinary Course of Business). Without limiting the generality of the foregoing,
neither Master Products nor any of its Subsidiaries is a party to or otherwise
bound by any agreement, arrangement, understanding or undertaking which would
(i) preclude Master Products or any of its Subsidiaries from terminating the
employment of any person on thirty (30) days or less notice (without any
premium, penalty, severance payment or additional compensation or remuneration),
(ii) require Master Products or any of its Subsidiaries to pay any benefits,
compensation, remuneration, salary, fee, bonus, severance or other payment to
any employee following the Closing, except for such amounts which Master
Products (under the Buyer's ownership) agrees to pay those employees who are
retained by Master Products (under the Buyer's ownership) following the Closing.
The foregoing representation is not meant to cover any obligations that Master
Products may have under applicable law to pay compensation or benefits to any
such employees following the Closing.
(x) EMPLOYEE BENEFITS.
(i) Section 4(x) of the Disclosure Schedule lists each Employee
Benefit Plan that any of Master Products and its Subsidiaries maintains or
to which any of them contributes.
(A) Each such Employee Benefit Plan (and each related trust,
insurance contract, or fund) complies in form and in operation in all
material respects with the applicable requirements of ERISA, the Code, and
other applicable laws.
(B) All required reports and descriptions (including Form 5500
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Annual Reports, Summary Annual Reports, PBGC-1's, and Summary Plan
Descriptions) have been filed or distributed appropriately with respect to
each such Employee Benefit Plan. The requirements of Part 6 of Subtitle B
of Title 1 of ERISA and of Code section 4980B have been met with respect
to each such Employee Benefit Plan which is an Employee Welfare Benefit
Plan.
(C) All contributions (including all employer contributions and
employee salary reduction contributions) which are due have been paid to
each such Employee Benefit Plan which is an Employee Pension Benefit Plan
and all contributions for any period ending on or before the Closing Date
which are not yet due have been paid to each such Employee Pension Benefit
Plan or accrued in accordance with the past custom and practice of Master
Products and its Subsidiaries. All premiums or other payments for all
periods ending on or before the Closing Date have been paid with respect
to each such Employee Benefit Plan which is an Employee Welfare Benefit
Plan.
(D) Each such Employee Benefit Plan which is an Employee Pension
Benefit Plan meets the requirements of a "qualified plan" under Code
section 401(a) and has received, within the last two years, a favorable
determination letter from the Internal Revenue Service.
(E) The market value of assets under each such Employee Benefit
Plan which is a defined benefit Employee Pension Benefit Plan (other than
any Multiemployer Plan) equals or exceeds the present value of all vested
and nonvested Liabilities thereunder determined in accordance with PBGC
methods, factors, and assumptions applicable to an Employee Pension
Benefit Plan terminating on the date for determination.
(F) The Seller has delivered to the Buyer correct and complete
copies of the plan documents and summary plan descriptions, the most
recent determination letter received from the Internal Revenue Service,
the three most recent Form 5500 Annual Reports, and all related trust
agreements, insurance contracts, and other funding agreements which
implement each such Employee Benefit Plan.
(ii) With respect to each Employee Benefit Plan that any of Master
Products and its Subsidiaries (and any Controlled Group of Corporations
which includes Master Products and its Subsidiaries) maintains or ever has
maintained or to which any of them contributes, ever has contributed, or
ever has been required to contribute:
(A) No such Employee Benefit Plan which is an Employee Pension
Benefit Plan (other than any Multiemployer Plan) has been completely or
partially terminated or been the subject of a Reportable Event as to which
notices would be
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required to be filed with the PBGC. Neither Seller nor Master Products
(nor any of its Subsidiaries) has received notice of any actual or
threatened proceeding by the PBGC to terminate any such Employee Pension
Benefit Plan (other than any Multiemployer Plan).
(B) There have been no Prohibited Transactions with respect to
any such Employee Benefit Plan. No Fiduciary has any Liability for breach
of fiduciary duty or any other failure to act or comply in connection with
the administration or investment of the assets of any such Employee
Benefit Plan. No action, suit, proceeding, hearing, or (to the Knowledge
of the Seller) investigation with respect to the administration or the
investment of the assets of any such Employee Benefit Plan (other than
routine claims for benefits) is pending or, to the Knowledge of any of the
Seller and the directors and officers (and employees with responsibility
for employee benefits matters) of Master Products and its Subsidiaries,
threatened. None of the Seller and the directors and officers (and
employees with responsibility for employee benefits matters) of Master
Products and its Subsidiaries has any Knowledge of any Basis for any such
action, suit, proceeding, hearing, or investigation.
(C) None of Master Products and its Subsidiaries has incurred,
and none of the Seller and the directors and officers (and employees with
responsibility for employee benefits matters) of Master Products and its
Subsidiaries has Knowledge of any Basis of any Liability to the PBGC
(other than PBGC premium payments) or otherwise under Title IV of ERISA
(including any withdrawal Liability) or under the Code with respect to any
such Employee Benefit Plan which is an Employee Pension Benefit Plan.
(iii) None of Master Products and its Subsidiaries has any Liability
under any Multiemployer Plan under which Master Products and/or any of its
Subsidiaries (and/or the other members of the Controlled Group of
Corporations that includes Master Products and its Subsidiaries)
contributes to, ever has contributed to, or ever has been required to
contribute to (including withdrawal Liability), nor will Master Products
or any of its Subsidiaries incur any Liability by withdrawing from any
existing Multi-employer Plan after the Closing.
(iv) None of Master Products and its Subsidiaries maintains (and
never has maintained) or contributes (and never has contributed) and never
has been required to contribute to any Employee Welfare Benefit Plan
providing medical, health, or life insurance or other welfare-type
benefits for retired or terminated employees, their spouses, or their
dependents (other than in accordance with Code section 4980B).
(y) GUARANTIES. None of Master Products and its Subsidiaries is a
guarantor of, or has otherwise undertaken responsibility for, any Liability or
obligation (including
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indebtedness) of any other Person.
(z) ENVIRONMENT, HEALTH, AND SAFETY.
(i) Each of Master Products and its Subsidiaries has complied with
(and Master Products' existing facilities in Los Angeles, California and
Tijuana, Mexico are in compliance with) all Environmental, Health, and
Safety Laws, and no action, suit, proceeding, hearing, investigation,
charge, complaint, order, directive, citation, request for information,
claim, demand, or notice has been received by any of Master Products and
its Subsidiaries, commenced or given against or to any of them alleging
any failure so to comply, including but not limited to any alleged air
emission, spill, release, discharge, noise emission, improper solid or
liquid waste disposal, or any improper use, generation, storage,
transportation, or disposal of toxic or hazardous substances or wastes.
Without limiting the generality of the preceding sentence, each of Master
Products and its Subsidiaries has obtained and been in compliance with all
of the material terms and conditions of all permits, licenses, and other
authorizations which are required under, and has complied with all other
limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules, and timetables which are contained
in, all Environmental, Health, and Safety Laws.
(ii) None of Master Products and its Subsidiaries has any Liability
(and none of Master Products, its Subsidiaries, and their respective
predecessors and Affiliates has handled, disposed of or released into the
environment any substance, arranged for the disposal of any substance,
exposed any employee or other individual to any substance or condition, or
owned or operated any property or facility in any manner that could form
the Basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against any of Master
Products and its Subsidiaries giving rise to any Liability) for damage to
any site, location, or body of water (surface or subsurface), for any
illness of or personal injury to any employee or other individual, or for
any reason under any Environmental, Health, and Safety Law.
(iii) Neither Seller nor Master Products (nor any of its
Subsidiaries) has caused and, to Seller's Knowledge, no other Person has
caused or permitted any emission, spill, dumping, storage, impoundment,
release, or discharge into or upon (i) the air, (ii) soils or any
improvements located thereon, (iii) surface water or groundwater, or (iv)
the sewer, septic system or solid or liquid waste treatment, storage, or
disposal system servicing any property now or heretofore owned or leased
by any of Master Products and its Subsidiaries, of any toxic or hazardous
waste or "hazardous substances" (as such term is defined at 42 U.S.C.
section 9601(14), but shall include petroleum, crude oil, and any fraction
thereof) at or from such property, and all such property, including the
groundwater under the property, is free of all toxic hazardous substances
or wastes whether discharged from the property or from any other
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property.
(iv) All properties and equipment used in the business of Master
Products and its Subsidiaries have been free of asbestos, PCB's, methylene
chloride, trichloroethylene, 1,2-trans-dichloroethylene, dioxins,
dibenzofurans, and Extremely Hazardous Substances.
(v) The Parties have provided each other with true, accurate, and
complete copies of all sampling and test results obtained by any of them
from all environmental and/or health samples and tests taken at and around
the Real Property.
(vi) Master Products and its Subsidiaries have been issued, and
shall maintain until the Closing Date, all required federal, state, and
local permits, licenses, certificates, and approvals relating to (i) air
emission, (ii) discharges to surface water or groundwater, (iii) noise
emissions, (iv) solid or liquid waste disposal of "special," toxic, or
hazardous substances or waste, and (vi) other environmental, health, or
safety matters, except where failure to do so would not have a material
adverse effect upon the business of Master Products and its Subsidiaries,
taken as a whole. A list of all material environmental permits, licenses,
certificates, or approvals is attached hereto in Section 4(z) of the
Disclosure Schedule.
(aa) CERTAIN BUSINESS RELATIONSHIPS WITH MASTER PRODUCTS AND ITS
SUBSIDIARIES. None of the Seller and its Affiliates has been involved in any
transaction or business arrangement with any of Master Products and its
Subsidiaries within the past 12 months, and none of the Seller and its
Affiliates owns any asset, tangible or intangible, which is used in the business
of any of Master Products and its Subsidiaries.
(bb) ACCOUNTS. Section 4(ab) of the Disclosure Schedule correctly
identifies each bank account, securities account, commodities account or other
brokerage or similar account and safe deposit box or other depository maintained
by, or on behalf of, or for the benefit of, Master Products, and lists the name
of each person with power or authority to act on behalf of Master Products with
respect thereto.
(cc) DISCLOSURE. The representations and warranties contained in this
Section 4 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Section 4 not misleading.
5. PRE-CLOSING COVENANTS. The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing:
(a) GENERAL. Each of the Parties will use reasonable efforts to take all
actions and to do all things necessary, proper, or advisable in order to
consummate and make effective the
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transactions contemplated by this Agreement (including satisfaction, but not
waiver, of the closing conditions set forth in Section 7 below).
(b) NOTICES AND CONSENTS. The Seller will cause each of Master Products
and its Subsidiaries to give any notices to third parties, and will cause each
of Master Products and its Subsidiaries to use reasonable efforts to obtain any
third party consents that the Buyer may reasonably request in connection with
the matters referred to in Section 4(c) above. Each of the Parties will (and the
Seller will cause each of Master Products and its Subsidiaries to) give any
notices to, make any filings with, and use reasonable efforts to obtain any
authorizations, consents, and approvals of governments and governmental agencies
in connection with the matters referred to in Sections 3(a)(ii), 3(b)(ii) and
4(c) above. Without limiting the generality of the foregoing, each of the
Parties will file (and the Seller will cause each of Master Products and its
Subsidiaries to file) any Notification and Report Forms and related material
that it may be required to file with the Federal Trade Commission and the
Antitrust Division of the United States Department of Justice under the
Xxxx-Xxxxx-Xxxxxx Act, will use its reasonable efforts to obtain (and the Seller
will cause each of Master Products and its Subsidiaries to use its reasonable
best efforts to obtain) an early termination of the applicable waiting period,
and will make (and the Seller will cause Master Products to make) any further
filings pursuant thereto that may be necessary, proper, or advisable in
connection therewith.
(c) OPERATION OF BUSINESS. Except as contemplated by this Agreement, the
Seller will not cause or permit any of Master Products and its Subsidiaries to
engage in any practice, take any action, or enter into any transaction outside
the Ordinary Course of Business. Without limiting the generality of the
foregoing, the Seller will not cause or permit any of Master Products and its
Subsidiaries to (i) declare, set aside, or pay any dividend or make any
distribution with respect to its capital stock or redeem, purchase, or otherwise
acquire any of its capital stock, or (ii) otherwise engage in any practice, take
any action, or enter into any transaction of the sort described in 4(h) above;
provided, however, nothing contained in this Agreement shall preclude Seller
from permitting or causing Master Products to (A) pay a management fee to Xxxxx
Xxxxx U.S.A., Inc., or make loan payments to Mespil, Inc. with respect to the
Intercompany Debt, provided that, in making any such payments to Xxxxx Xxxxx
U.S.A., Inc. or Mespil, Inc., Seller shall not cause the Working Capital to be
less than the Estimated Working Capital, and (B) determine the amount of Excess
Cash (subject to the Buyer's review and approval) and distribute such amount to
Seller immediately prior to the Closing, or use such amounts prior to the
Closing to pay or discharge the Intercompany Debt.
(d) PRESERVATION OF BUSINESS. The Seller will cause each of Master
Products and its Subsidiaries to keep the business and properties of Master
Products and its Subsidiaries substantially intact, including its present
operations, physical facilities, working conditions, and relationships with
lessors, licensors, suppliers, customers, and employees.
(e) FULL ACCESS. The Seller will permit and cause each of Master Products
and its
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Subsidiaries to permit, representatives of the Buyer (including but not limited
to the Buyer's attorneys, accountants, and financial advisors) to have full
access at all reasonable times, and in a manner so as not to interfere with the
normal business operations of Master Products and its Subsidiaries, to all
premises, assets, properties, personnel, books, financial and corporate records
(including Tax records), contracts, and documents of or pertaining to each of
Master Products and its Subsidiaries. Seller shall cause each of Master Products
and its Subsidiaries and their respective officers and employees to cooperate
with the Buyer's inspection, investigation and audit of the business of Master
Products. The Buyer will treat and hold as such all Confidential Information it
receives from Seller or Master Products in the course of the due diligence
contemplated by this Section 5(e), will not use any of the Confidential
Information except in connection with this Agreement, and, if this Agreement is
terminated for any reason whatsoever, will return to the Seller and Master
Products all tangible embodiments (and all copies) of the Confidential
Information which are in its possession (unless and except to the extent such
materials are needed by the Buyer to prosecute or defend against any claims
which may arise out of a breach or alleged breach of this Agreement).
(f) NOTICE OF FACTS AND DEVELOPMENTS. The Seller will give prompt written
notice to the Buyer of any facts or of any material adverse development causing
a breach of any of the representations and warranties in Sections 3 and 4 above.
The Buyer will give prompt written notice to the Seller of any facts or of any
material adverse development causing a breach of any of the Buyer's
representations and warranties in Section 3 above. From time to time prior to
the Closing, the Seller and the Buyer will promptly supplement or amend the
sections of the Disclosure Schedule relating to their respective representations
and warranties in this Agreement with respect to any matter, event, condition or
occurrence hereafter arising which, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described in their
respective sections of the Disclosure Schedule. Except with respect to a
supplement or amendment not objected to in writing by the other Party within ten
days after receipt thereof, no supplement or amendment by either Party shall be
deemed to cure any misrepresentation or breach of any warranty or covenant made
in this Agreement by such Party or have any effect for any other purpose.
(g) EXCLUSIVE DEALING. The Seller will not (and the Seller will not cause
or permit any of Master Products and its Subsidiaries to) (i) solicit, initiate,
directly or indirectly, or encourage the submission of any inquiry, proposal or
offer from any Person relating to the acquisition of any capital stock or other
voting securities, or any portion of the assets of any of Master Products and
its Subsidiaries outside of the Ordinary Course of Business (including any
acquisition structured as a merger, consolidation, or share exchange) or (ii)
subject to fiduciary obligations under applicable law as advised in writing by
counsel, participate in any discussions or negotiations regarding, furnish any
information with respect to, assist or participate in, or facilitate in any
other manner any effort or attempt by any Person to do or seek any of the
foregoing. Subject to fiduciary obligations under applicable law, the Seller
will not vote its Master Products Shares in favor of any such acquisition
(whether structured as
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a merger, consolidation, or share exchange or otherwise). The Seller will notify
the Buyer immediately if any Person makes any proposal offer, inquiry, or
contact with respect to any of the foregoing.
(h) TITLE INSURANCE. With respect to each parcel of real estate that any
of Master Products and its Subsidiaries owns, the Seller will cause Master
Products to obtain an ALTA Owner's Policy of Title Insurance Form B-1987 (or
equivalent policy acceptable to the Buyer if the real property is located in a
state in which an ALTA Owner's Policy of Title Insurance Form B-1987 is not
available) issued by Chicago Title Insurance Company or another title insurer
reasonably satisfactory to the Buyer (and, if requested by the Buyer, reinsured
in whole or in part by one or more insurance companies and pursuant to a direct
access agreement acceptable to the Buyer), in such amount as the Buyer
reasonably may determine to be the fair market value of such real property
(including all improvements located thereon), insuring title to such real
property to be in Master Products as of the Closing (subject only to the title
exceptions described above in Section 4(1)(i) and in Section 4(1)(i) of the
Disclosure Schedule). Each title insurance policy delivered under this Section
5(h) shall insure title to the real property and all recorded easements
benefitting such real property.
6. POST-CLOSING COVENANTS. The Parties agree as follows with respect to
the period following the Closing:
(a) GENERAL. In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, each of the
Parties will take such further action (including the execution and delivery of
such further instruments and documents) as any other Party reasonably may
request, all at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under Section 8 below).
The Seller acknowledges and agrees that from and after the Closing the Buyer
will be entitled to possession of all documents, books, records (including Tax
records), agreements, and financial data relating to Master Products and its
Subsidiaries.
(b) LITIGATION SUPPORT. In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving any of Master Products and its Subsidiaries, each
of the other Parties will cooperate with it and its counsel in the contest or
defense, make available its personnel, and provide such testimony and access to
its books and records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending Party
(unless the contesting or defending Party is entitled to indemnification
therefor under Section 8 below).
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(c) TRANSITION. The Seller will not take any action that is designed or
intended to have the effect of discouraging any lessor, licensor, customer,
supplier, or other business associate of any of Master Products and its
Subsidiaries from maintaining the same business relationships with Master
Products after the Closing as it maintained with Master Products and its
Subsidiaries prior to the Closing. The Seller will refer all customer inquiries
relating to the businesses of Master Products and its Subsidiaries to the Buyer
from and after the Closing.
(d) CONFIDENTIALITY. The Seller will treat and hold as such all of the
Confidential Information, refrain from using any of the Confidential Information
except in connection with this Agreement, and deliver promptly to the Buyer or
destroy, at the request and option of the Buyer, all tangible embodiments
(including all copies) of the Confidential information which are in its
possession or under its control. In the event that the Seller is requested or
required (by oral question or request for information or documents in any legal
proceeding, interrogatory, subpoena, civil investigative demand, or similar
process) to disclose any Confidential Information, the Seller will notify the
Buyer promptly of the request or requirement so that the Buyer may seek an
appropriate protective order or waive compliance with the provisions of this
Section 6(d). If, in the absence of a protective order or the receipt of a
waiver hereunder, the Seller is, on the advice of counsel, compelled to disclose
any Confidential Information to any tribunal or else stand liable for contempt,
the Seller may disclose the Confidential Information to the tribunal; provided,
however, that the Seller shall use its reasonable best efforts to obtain, at the
reasonable request of the Buyer, an order or other assurance that confidential
treatment will be accorded to such portion of the Confidential Information
required to be disclosed as the Buyer shall designate.
(e) COVENANT NOT TO COMPETE; NON-SOLICITATION OF CUSTOMERS. As a
paramount inducement to the Buyer in executing this Agreement and in closing the
transaction contemplated hereby, and in order to protect the good will of Master
Products, the Seller hereby expressly agrees to and covenants with the Buyer as
follows:
(i) For a period of five years from and after the Closing Date, the
Seller will not engage, directly or indirectly, whether as owner, partner,
shareholder, member, joint venturer, consultant, participant, agent or
otherwise, in any business that any of Master Products and its
Subsidiaries conducts as of the Closing Date in any geographic area in
which any of Master Products and its Subsidiaries conducts that business
as of the Closing Date; provided, however, the ownership of less than 5%
of the outstanding stock of any publicly traded corporation shall not be
deemed to be a violation of the above restriction.
(ii) For a period of five years from and after the Closing Date, the
Seller will not directly or indirectly, either on its own account, through
any Affiliate, or jointly with or as manager, agent, consultant, partner,
joint venturer, owner, shareholder, or otherwise, or on behalf of any
Person, contact, engage or solicit any of Master
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Products' Customers for the purpose of marketing, selling, delivering or
supplying any products or services which are similar to, identical to, or
could be used as a substitute for any products or services offered by
Master Products as of the Closing Date. The term "CUSTOMER" as used above
shall mean and include all Persons who purchased any products or services
from Master Products within the two year period preceding the Closing
Date.
The Seller understands that but for Seller's covenant, promise and agreement to
honor and observe the foregoing restrictive covenants, the Buyer would not have
agreed to consummate the transactions contemplated herein. Although no
additional monetary consideration shall be allocated to the foregoing
restrictions, the Seller expressly acknowledges that the Buyer's consummation of
the transactions contemplated hereunder at the Closing shall constitute
sufficient consideration for the above restrictions. If the final judgment of a
court of competent jurisdiction declares that any term or provision of this
Section 6(e) is invalid or unenforceable, the Parties agree that the court
making the determination of invalidity or unenforceability shall have the power
to reduce the scope, duration, or area of the term or provision, to delete
specific words or phrases, or to replace any invalid or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified after the
expiration of the time within which the judgment may be appealed. The Seller
also shall deliver to the Buyer at the Closing a confidentiality, noncompetition
and nonsolicitation agreement (substantially in the form of Exhibit D, attached
hereto) executed by Seller's Parent on behalf of itself and each and every one
of its Affiliates.
(f) WARN ACT. The Buyer and the Seller agree that for purposes of the
United States Worker Adjustment and Retraining Notification Act (the "WARN
ACT"), the Closing Date shall be the "effective date" as such term is used in
the WARN Act. The Buyer acknowledges and represents that it has no present
intent to engage in a "mass layoff" or "plant closing" with respect to Master
Products as defined in the WARN Act. The Buyer agrees that from and after the
Closing Date it shall be responsible for any notification required under the
WARN Act with respect to Master Products and shall indemnify the Seller and hold
the Seller harmless from and against all fines and other payments which may
become due under the WARN Act with respect to Master Products.
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7. CONDITIONS TO OBLIGATION TO CLOSE.
(a) CONDITIONS TO OBLIGATION OF THE BUYER. The obligation of the Buyer
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Sections 3(a)
and 4 above shall be true and correct in all material respects at and as
of the Closing Date;
(ii) the Seller shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) Master Products and its Subsidiaries shall have procured all
of the third party consents specified in 5(b) above, all of the title
insurance commitments, policies, and riders specified in 5(h) above;
(iv) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling, or
charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement, (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation, (C)
affect adversely the right of the Buyer to own the Master Products Shares
and to control Master Products and its Subsidiaries, (D) materially and
adversely affect the right of any of Master Products and its Subsidiaries
to own its assets and to operate its businesses (and no such injunction,
judgment, order, decree, ruling, or
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charge shall be in effect), (E) materially and adversely affect any of the
assets or liabilities of Master Products; or (F) cause any material
adverse Liability (other than the Disclosed Liabilities) that is not
reflected on the Most Recent Audited Balance Sheet;
(v) the Seller shall have delivered to the Buyer a certificate to
the effect that each of the conditions specified above in Sections
7(a)(i)-(iv) is satisfied in all respects;
(vi) the Parties' shall have complied with all applicable laws,
including the Xxxx-Xxxxx-Xxxxxx Act, and all applicable waiting periods
(and any extensions thereof) under the Xxxx-Xxxxx-Xxxxxx Act shall have
expired or otherwise been terminated and the Parties and Master Products
and its Subsidiaries shall have received all other authorizations,
consents, and approvals of governments and governmental agencies referred
to in Sections 3(a)(ii), 3(b)(ii) and 4(c) above;
(vii) the Buyer shall have completed its due diligence investigation
of the legal and business affairs of Master Products and Seller, including
a business audit of Master Products and an environmental audit of all Real
Property, the results of which must be reasonably satisfactory to Buyer;
(viii) the Board of Directors of the Buyer's sole shareholder,
Escalade, Inc., shall have approved Buyer's purchase of the Master
Products Shares;
(ix) the Seller and the Escrow Agent shall have executed and
delivered to the Buyer the Escrow Agreement in the form of Exhibit A,
attached hereto;
(x) the Buyer shall have entered into satisfactory employment
arrangements with Xxxxxxx Xxxxxx, Vice President-Sales, and Xxxx
Xxxxxxxxx, Plant Manager;
(xi) the Seller shall have terminated the employment of Xxxx Xxxxxx,
Mimma Del Xxxxxxx and Xxx Xxxxx and the Seller shall have procured on
executed non-solicitation and confidentiality agreement between Xxxx
Xxxxxx and Master Products in a form reasonably acceptable to the Buyer;
(xii) the Seller shall have delivered the Non-Compete Agreement in
the form of Exhibit D, attached hereto, executed by Seller's Parent;
(xiii) the Buyer shall have received an Affidavit in the form of
Exhibit E, attached hereto, regarding matters related to FIRPTA;
(xiv) the Buyer shall have received from counsel to the Seller an
opinion in form and substance as set forth in Exhibit F, attached hereto,
addressed to the Buyer, and dated as of the Closing Date;
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(xv) the Seller shall have delivered the Indemnification Agreement
in the form of Exhibit G, attached hereto, executed by Seller's Parent;
(xvi) the Buyer shall have received from the Seller the original
promissory note evidencing the Intercompany Debt, and the same shall be
marked "Paid" (or Seller shall provide other satisfactory evidence that
the Intercompany Debt shall have been paid in full);
(xvii) the Buyer shall have received the resignations, effective as
of the Closing, of each director of Master Products and its Subsidiaries;
(xviii) the Seller shall have delivered to the Buyer evidence of the
termination of all agreements (including but not limited to management or
similar agreements) between Master Products and/or any of its
Subsidiaries, on the one hand, and Seller, Seller's Parent and/or any of
their Affiliates, on the other hand (except for such agreements as may be
entered into as part of the transaction contemplated hereunder); and
(xix) all actions to be taken by the Seller in connection with
consummation of the transactions contemplated hereby and all closing
certificates, legal opinions, instruments, assignments, transfer
documents, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance
to the Buyer.
The Buyer may waive any condition specified in this 7(a) if it executes a
writing so stating at or prior to the Closing.
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(b) CONDITIONS TO OBLIGATION OF THE SELLER. The obligation of the Seller
to consummate the transactions to be performed by them in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in 3(b) above shall
be true and correct in all material respects at and as of the Closing
Date;
(ii) the Buyer shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any
federal, state, local or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling, or
charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement or (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation (and
no such injunction, judgment, order, decree, ruling, or charge shall be in
effect);
(iv) the Buyer shall have delivered to the Seller a certificate to
the effect that each of the conditions specified above in Section
7(b)(i)-(iii) is satisfied in all respects;
(v) the Parties shall have complied with all applicable laws,
including the Xxxx-Xxxxx-Xxxxxx Act, and all applicable waiting periods
(and any extensions thereof) under the Xxxx-Xxxxx-Xxxxxx Act shall have
expired or otherwise been terminated and the Parties and Master Products
and its Subsidiaries shall have received all other authorizations,
consents, and approvals of governments and governmental agencies referred
to in Sections 3(a)(ii), 3(b)(ii) and 4(c) above;
(vi) the Buyer and the Escrow Agent shall have executed and
delivered to the Seller the Escrow Agreement in the form of Exhibit A,
attached hereto;
(vii) the Seller shall have received from counsel to the Buyer an
opinion in form and substance as set forth in Exhibit H, attached hereto,
addressed to the Seller, and dated as of the Closing Date; and
(viii) all actions to be taken by the Buyer in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form
and substance to the Seller.
The Seller may waive any condition specified in this Section 7(b) if it
executes a writing so stating at or prior to the Closing.
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8. REMEDIES FOR BREACHES OF THIS AGREEMENT.
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of the Parties contained in Section 3, Sections
4(a) through (d) and Section 4(f) of this Agreement shall survive the Closing
(even if the damaged Party knew or had reason to know of any misrepresentation
or breach of warranty at the time of the Closing), and continue in full force
and effect forever thereafter (subject to any applicable statutes of
limitation). All of the representations and warranties of the Seller contained
in Section 4(e) and Sections 4(g) through 4(ac) of this Agreement shall survive
the Closing (even if the Buyer knew or had reason to know of any
misrepresentation or breach of warranty at the time of Closing) and continue in
full force and effect for a period of one year thereafter, except: (i) the
representations and warranties of the Seller which relate to Employee Benefit
Plans, which shall continue for a period of four years after the Closing; and
(ii) the representations and warranties of the Seller which relate to Taxes and
Tax Returns, and the representations and warranties of the Seller which relate
to environmental, health and safety matters (including but not limited to the
representations and warranties set forth in Section 4(z) above), which shall
survive without limitation, subject to any applicable statutes of limitation
with respect thereto (collectively, the "SURVIVAL PERIOD"). If notice of any
claim for breach of any representation or warranty made by either Party is
delivered to the other Party prior to the expiration of the applicable Survival
Period, the Survival Period with respect to such claim shall be extended until
such claim has been finally and completely resolved. No claim for breach of any
representation or warranty may be made after the expiration of the applicable
Survival Period. The obligations and Liability of Seller for the Retained
Liabilities shall survive without limitation.
(b) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE BUYER.
(i) In the event the Seller breaches (or in the event any third
party alleges facts that, if true, would mean the Seller has breached) any
of its representations, warranties, promises and covenants contained
herein (other than the covenants contained in Section 2(a) above and the
representations and warranties contained in Sections 3(a), 4(b) and 4(f)
above), then the Seller agrees to indemnify the Buyer from and against the
entirety of any Adverse Consequences the Buyer may suffer through and
after the date of the claim for indemnification resulting from, arising
out of, relating to, in the nature of, or caused by the breach (or the
alleged breach); provided, however, that the Seller shall not have any
obligation to indemnify the Buyer from and against any such Adverse
Consequences until the Buyer has suffered Adverse Consequences by reason
of all such breaches (and alleged breaches) in excess of a $100,000
aggregate threshold (at which point the Seller will be obligated to
indemnify the Buyer from and against all such Adverse Consequences
relating back to the first dollar).
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(ii) In the event that the Seller breaches (or, in the event any
third party alleges facts that, if true, would mean that the Seller has
breached) any of its covenants in Section 2(a) above or any of its
representations and warranties in Sections 3(a), 4(b) and 4(f) above, then
the Seller agrees to indemnify the Buyer from and against the entirety of
any Adverse Consequences the Buyer may suffer resulting from, arising out
of, relating to, in the nature of, or caused by the breach (or alleged
breach).
(iii) Notwithstanding anything to the contrary contained herein, the
Seller agrees to indemnify the Buyer from and against the entirety of any
Adverse Consequences the Buyer may suffer resulting from, arising out of,
relating to, in the nature of, or caused by any Liability of any of Master
Products and its Subsidiaries (x) for any Taxes of Master Products and its
Subsidiaries (except any Liability for taxes referred to in clause (d) of
the definition of "Disclosed Liabilities") with respect to any Tax year or
portion thereof ending on or before the Closing Date (or for any Tax year
beginning before and ending after the Closing Date to the extent allocable
(determined in a manner consistent with Section 9) to the portion of such
period beginning before and ending on the Closing Date), to the extent
such Taxes are not reflected in the reserve for Tax Liability (rather than
any reserve for deferred Taxes established to reflect timing differences
between book and Tax income) shown on the face of the Closing Date Balance
Sheet, and (y) for the unpaid Taxes of any Person (other than any of
Master Products and its Subsidiaries) under Treas. Reg. section 1.1502-6
(or any similar provision of state, local, or foreign law), as a
transferee or successor, by contract, or otherwise.
(iv) Notwithstanding anything to the contrary set forth herein, the
Seller agrees to indemnify the Buyer from and against the entirety of any
Adverse Consequences the Buyer may suffer resulting from, arising out of,
relating to, in the nature of, or caused by the Retained Liabilities and
the Seller's failure or refusal to pay, perform or otherwise discharge the
Retained Liabilities shall not be subject to the threshold set forth in
subsection (i) above.
The foregoing indemnification of Buyer by Seller shall expressly extend to and
include any Adverse Consequences suffered by Master Products after the Closing
since Buyer, by virtue of its ownership of the Master Products Shares, will be
injured as a result of any Adverse Consequences suffered by Master Products
after the Closing.
(c) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE SELLER. In the event
the Buyer breaches (or in the event any third party alleges facts that, if true,
would mean the Buyer has breached) any of its representations, warranties, and
covenants contained herein, then the Buyer agrees to indemnify the Seller from
and against the entirety of any Adverse Consequences the Seller may suffer
through and after the date of the claim for indemnification
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resulting from, arising out of, relating to, in the nature of, or caused by the
breach (or the alleged breach). Without limiting the generality of the
foregoing, the Buyer specifically agrees to indemnify the Seller and its
Affiliates from and against the entirety of any Adverse Consequences the Seller
and its Affiliates may suffer resulting from, arising out of, relating to, in
the nature of, or caused by any Liability of Master Products or any of its
Subsidiaries for any Taxes of Master Products and its Subsidiaries with respect
to any Tax year or period ending after the Closing Date to the extent such Taxes
are allocable to the portion of such period beginning on or after the Closing
Date and any Liability for Taxes for any period ending on or before the Closing
Date to the extent such Taxes are reflected or reserved for in the Closing Date
Balance Sheet. In addition, Buyer shall indemnify, defend and hold harmless the
Seller and its Affiliates for any Liability for state or federal income taxes in
the United States which may arise by reason of the repatriation or deemed
repatriation of income from the operations of Productos Maestros de Oficina,
S.A. de C.V. in Mexico (except any Liability for state or federal income taxes
which may arise to the extent the intercompany account between Master Products
and Productos Maestros de Oficina, S.A. de C.V. shall be determined (on a basis
consistent with the Most Recent Unaudited Balance Sheet) to have exceeded
$2,475,000 as of the Closing Date). The Buyer shall further indemnify, defend
and hold harmless the Seller and its Affiliates from and against the entirety of
any Adverse Consequences resulting from, arising out of, relating to, or caused
by the termination or change in employment of any employee of Master Products or
its Subsidiaries on or after the Closing Date, except that the Seller shall be
responsible for and shall indemnify the Buyer and its Affiliates from and
against the entirety of any Adverse Consequences resulting from, arising out of,
relating to or caused by the termination of Xxxx Xxxxxx, Xxxxx Del Xxxxxxx and
Xxx Xxxxx, it being understood and agreed that any Liability associated
therewith shall be a Retained Liability.
(d) MATTERS INVOLVING THIRD PARTIES.
(i) If any third party shall notify any Party (the "INDEMNIFIED
PARTY") with respect to any matter (a "THIRD PARTY CLAIM") which may give
rise to a claim for indemnification against any other Party (the
"INDEMNIFYING PARTY") under this Section 8, then the Indemnified Party
shall promptly notify each Indemnifying Party thereof in writing;
provided, however, that no delay on the part of the Indemnified Party in
notifying any Indemnifying Party shall relieve the Indemnifying Party from
any obligation hereunder unless (and then solely to the extent) the
Indemnifying Party thereby is prejudiced.
(ii) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party so long as (A) the
Indemnifying Party notifies the Indemnified Party in writing within 15
days after the Indemnified Party has given notice of the Third Party Claim
that the Indemnifying Party will indemnify the Indemnified Party
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from and against the entirety of any Adverse Consequences the Indemnified
Party may suffer resulting from, arising out of, relating to, in the
nature of, or caused by the Third Party Claim, (B) the Indemnifying Party
provides the Indemnified Party with evidence reasonably acceptable to the
Indemnified Party that the Indemnifying Party will have the financial
resources to defend against the Third Party Claim and fulfill its
indemnification obligations hereunder, (C) the Third Party Claim involves
only money damages and does not seek an injunction or other equitable
relief, (D) settlement of, or an adverse judgment with respect to, the
Third Party Claim is not, in the good faith judgment of the Indemnified
Party, likely to establish a precedential custom or practice materially
adverse to the continuing business interests of the Indemnified Party, and
(E) the Indemnifying Party conducts the defense of the Third Party Claim
actively and diligently.
(iii) So long as the Indemnifying Party is conducting the defense of
the Third Party Claim in accordance with Section 8(d)(ii) above, (A) the
Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Third Party Claim, (B) the
Indemnified Party will not consent to the entry of any judgment or enter
into any settlement with respect to the Third Party Claim without the
prior written consent of the Indemnifying Party (which consent will not be
withheld unreasonably), and (C) the Indemnifying Party will not consent to
the entry of any judgment or enter into any settlement with respect to the
Third Party Claim without the prior written consent of the Indemnified
Party (which consent will not be withheld unreasonably).
(iv) In the event any of the conditions in Section 8(d)(ii) above is
or becomes unsatisfied, however, (A) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any
settlement with respect to, the Third Party Claim in any manner it
reasonably may deem appropriate (and the Indemnified Party need not
consult with, or obtain any consent from, any Indemnifying Party in
connection therewith), (B) the Indemnifying Parties will reimburse the
Indemnified Party promptly and periodically for the costs of defending
against the Third Party Claim (including reasonable attorneys' fees and
expenses), and (C) the Indemnifying Parties will remain responsible for
any Adverse Consequences the Indemnified Party may suffer resulting from,
arising out of, relating to, in the nature of, or caused by the Third
Party Claim to the fullest extent provided in this Section 8.
(e) DETERMINATION OF ADVERSE CONSEQUENCES. The Parties shall take into
account the time cost of money (using the Applicable Rate as the discount rate)
in determining Adverse Consequences for purposes of this Section 8. The amount
which an Indemnifying Party is required to pay to, for or on behalf of any
Indemnified Party pursuant to this Section 8 shall be adjusted (including,
without limitation, retroactively) (i) by any insurance proceeds actually
recovered by or on behalf of such Indemnified Party in reduction of the related
indemnifiable
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loss (the "INDEMNIFIABLE LOSS") and (ii) to take account of any tax benefit
realized by the Indemnified Party as a result of any Indemnifiable Loss. Amounts
required to be paid, as so reduced, are hereafter sometimes called an "INDEMNITY
PAYMENT". If an Indemnified Party shall have received or shall have had paid on
its behalf an Indemnity Payment in respect of an Indemnifiable Loss and shall
subsequently receive insurance proceeds in respect of such Indemnifiable Loss,
or realized any tax benefit as a result of such Indemnifiable Loss, then the
Indemnified Party shall pay to the Indemnifying Party the amount of such
insurance proceeds or tax benefit or, if less, the amount of the Indemnity
Payment. All indemnification payments under this Section 8 shall be deemed
adjustments to the Purchase Price.
(f) RECOUPMENT FROM ESCROW. In the event that the Buyer suffers any
Adverse Consequences as a result of any breach by the Seller of any
representation, warranty, covenant or agreement made by Seller herein (or as a
result of any breach by Seller's Parent or any of its Affiliates of any of the
terms or provisions of the Non-Compete Agreement between Buyer and Seller's
Parent), or as a result of any other matter upon which Buyer is entitled to
indemnification hereunder, Buyer shall be entitled to assert a claim for full or
partial reimbursement from the Escrow Fund established in accordance with the
terms of the Escrow Agreement. Additionally, to the extent Seller suffers any
Adverse Consequences as a result of any breach by the Buyer of any
representation, warranty, covenant or agreement made by the Buyer herein, or as
a result of any other matter upon which Seller is entitled to indemnification
hereunder, the Seller shall be entitled to assert a claim for a full or partial
set-off against any claim asserted by Buyer in accordance herewith.
Notwithstanding anything to the contrary contained herein, Buyer's
indemnification rights hereunder shall not be limited to the Escrow Amount (or
the balance of the Escrow Fund), and the payment of all or part of the Escrow
Amount (or the balance of the Escrow Fund) to Seller by the Escrow Agent shall
not be deemed to be a waiver or release of any of Seller's indemnification
obligations hereunder.
(g) OTHER INDEMNIFICATION PROVISIONS. The foregoing indemnification
provisions are in lieu of any statutory or common law remedy for money damages
any Party may have for breach of representation, warranty, or covenant;
provided, however, nothing contained herein shall be construed as a limitation
or restriction upon either Party's right to seek equitable relief in connection
with the breach of any representation, warranty or covenant hereunder. The
Seller hereby agrees that it will not make any claim for indemnification against
any of Master Products and its Subsidiaries by reason of the fact that it was
agent of any such entity or was serving at the request of any such entity as a
partner, trustee, or agent of another entity (whether such claim is for
judgments, damages, penalties, fines, costs, amounts paid in settlement, losses,
expenses, or otherwise and whether such claim is pursuant to any statute,
charter document, bylaw, agreement, or otherwise) with respect to any action,
suit, proceeding, complaint, claim, or demand brought by the Buyer against the
Seller (whether such action, suit, proceeding, complaint, claim, or demand is
pursuant to this Agreement, applicable law, or otherwise).
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9. TAX MATTERS. The following provisions shall govern the allocation of
responsibility as between the Buyer and the Seller for certain tax matters
following the Closing Date:
(a) TAX PERIODS ENDING ON OR BEFORE THE CLOSING DATE. The Buyer shall
prepare or cause to be prepared and file or cause to be filed all Tax Returns
for Master Products and its Subsidiaries for the period commencing January 1,
1997 and ending on the Closing Date which are filed after the Closing Date other
than income Tax Returns with respect to periods for which a consolidated,
unitary or combined income Tax Return of the Seller will include the operations
of Master Products. The Seller shall file the state and federal income Tax
Returns for Master Products and its Subsidiaries for the period ending December
31, 1996. Each Party shall permit the other Party to review and comment on each
such Tax Return described in the preceding sentences prior to filing. The Seller
shall reimburse the Buyer for Taxes of Master Products and its Subsidiaries with
respect to such periods within fifteen (15) days after payment by Buyer or
Master Products and its Subsidiaries of such Taxes to the extent such Taxes are
not reflected in the reserve for Tax Liability (rather than any reserve for
deferred Taxes established to reflect timing differences between book and Tax
income) shown on the face of the Closing Balance Sheet.
(b) TAX PERIODS BEGINNING BEFORE AND ENDING AFTER THE CLOSING DATE. The
Buyer shall prepare or cause to be prepared and file or cause to be filed any
Tax Returns of Master Products and its Subsidiaries for Tax periods which begin
before the Closing Date and end after the Closing Date. The Seller shall pay to
Buyer within fifteen (15) days after the date on which Taxes are paid with
respect to such periods an amount equal to the portion of such Taxes which
relates to the portion of such Taxable period ending on the Closing Date to the
extent such Taxes are not reflected in the reserve for Tax Liability (rather
than any reserve for deferred Taxes established to reflect timing differences
between book and Tax income) shown on the face of the Closing Date Balance
Sheet. For purposes of this Section, in the case of any Taxes that are imposed
on a periodic basis and are payable for a Taxable period that includes (but does
not end on) the Closing Date, the portion of such Tax which relates to the
portion of such Taxable period ending on the Closing Date shall (x) in the case
of any Taxes other than Taxes based upon or related to income, wages or
receipts, be deemed to be the amount of such Tax for the entire Taxable period
multiplied by a fraction the numerator of which is the number of days in the
Taxable period ending on the Closing Date and the denominator of which is the
number of days in the entire Taxable period, and (y) in the case of any Tax
based upon or related to income, wages or receipts be deemed equal to the amount
which would be payable if the relevant Taxable period ended on the Closing Date.
Any credits relating to a Taxable period that begins before and ends after the
Closing Date shall be taken into account as though the relevant Taxable period
ended on the Closing Date. All determinations necessary to give effect to the
foregoing allocations shall be made in a manner consistent with prior practice
of Master Products and its Subsidiaries.
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(c) COOPERATION ON TAX MATTERS.
(i) Buyer, Master Products, its Subsidiaries and Seller shall
cooperate fully, as and to the extent reasonably requested by the other
party, in connection with the filing of Tax Returns pursuant to this
Section and any audit, litigation or other proceeding with respect to
Taxes. Such cooperation shall include the retention and (upon the other
party's request) the provision of records and information which are
reasonably relevant to any such audit, litigation or other proceeding and
making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder.
Master Products, its Subsidiaries and Seller agree (A) to retain all books
and records with respect to Tax matters pertinent to Master Products and
its Subsidiaries relating to any taxable period beginning before the
Closing Date until the expiration of the statute of limitations (and, to
the extent notified by the Buyer or the Seller, any extensions thereof) of
the respective taxable periods, and to abide by all record retention
agreements entered into with any taxing authority, and (B) to give the
other party reasonable written notice prior to transferring, destroying or
discarding any such books and records and, if the other party so requests,
Master Products and its Subsidiaries or Seller, as the case may be, shall
allow the other party to take possession of such books and records.
(ii) the Buyer and the Seller further agree, upon request, to use
their best efforts to obtain any certificate or other document from any
governmental authority or any other Person as may be necessary to
mitigate, reduce or eliminate any Tax that could be imposed (including,
but not limited to, with respect to the transactions contemplated hereby).
(iii) the Buyer and the Seller further agree, upon request, to
provide the other party with all information in their possession, under
their control or which can be obtained without unreasonable effort or
expense, that either party may be required to report pursuant to Sections
6038B, 6043, or any other relevant provisions of the Code and all Treasury
Department Regulations promulgated thereunder.
(d) TAX SHARING AGREEMENTS. There are no tax sharing agreements or
similar agreements with respect to or involving Master Products or any of its
Subsidiaries.
(e) CERTAIN TAXES. All transfer, documentary, sales, use, stamp,
registration and other such Taxes and fees (including any penalties and
interest) incurred in connection with this Agreement (including any gains tax,
transfer tax and any similar Tax imposed in other states or subdivisions), shall
be paid by the Seller when due, and Seller will, at its own expense, file all
necessary Tax Returns and other documentation with respect to all such transfer,
documentary, sales, use, stamp, registration and other Taxes and fees, and, if
required by applicable law, the Buyer will, and will cause its affiliates to,
join in the execution of any such Tax Returns and other documentation.
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10. TERMINATION.
(a) TERMINATION OF AGREEMENT. The Parties may terminate this Agreement
as provided below:
(i) the Buyer and the Seller may terminate this Agreement by mutual
written consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement by giving written notice
to the Seller at any time prior to the consummation of the transactions
contemplated hereby if the Buyer is not reasonably satisfied with the
results of its continuing business, legal, accounting and environmental
due diligence regarding Master Products and its Subsidiaries;
(iii) the Buyer may terminate this Agreement by giving written
notice to the Seller at any time prior to the Closing (A) in the event the
Seller has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, the Buyer has
notified the Seller of the breach, and the breach has continued without
cure for a period of 20 days after the notice of breach or (B) if the
Closing shall not have occurred on or before June 30, 1997, by reason of
the failure of any condition precedent under Section 7(a) hereof (unless
the failure results primarily from the Buyer itself breaching any
representation, warranty, or covenant contained in this Agreement); and
(iv) the Seller may terminate this Agreement by giving written
notice to the Buyer at any time prior to the Closing (A) in the event the
Buyer has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, the Seller has
notified the Buyer of the breach, and the breach has continued without
cure for a period of 20 days after the notice of breach or (B) if the
Closing shall not have occurred on or before June 30, 1997, by reason of
the failure of any condition precedent under Section 7(b) hereof (unless
the failure results primarily from the Seller itself breaching any
representation, warranty, or covenant contained in this Agreement).
(b) EFFECT OF TERMINATION. If any Party terminates this Agreement
pursuant to Section 10(a) above, all rights and obligations of the Parties
hereunder shall terminate without any Liability of any Party to any other Party
(except for any Liability of any Party then in breach).
11. MISCELLANEOUS.
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(a) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Closing without the prior written approval of the
Buyer and the Seller; provided, however, that any Party may make any public
disclosure it believes in good faith is required by applicable law or any
listing or regulation or any trading agreement concerning its publicly-traded
securities (in which case the disclosing Party will use its reasonable best
efforts to advise the other Parties prior to making the disclosure).
Notwithstanding the foregoing, the Parties may each continue such communications
with their employees, customers. suppliers, lenders, lessors, shareholders, and
other particular groups as may be legally required or necessary or appropriate
and not inconsistent with the best interests of the other Party or the
consummation of the transaction contemplated by this Agreement.
(b) NO THIRD PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
(c) ENTIRE AGREEMENT. This Agreement (including the documents referred
to herein) constitutes the entire agreement among the Parties and supersedes the
letter of intent between the Parties dated March 25, 1997 and any other prior
understandings, agreements, or representations by or among the Parties, written
or oral, to the extent they related in any way to the subject matter hereof.
(d) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the Buyer and the Seller; provided, however, that the Buyer may (i) assign
any or all of its rights and interests hereunder to one or more of its
Affiliates and (ii) designate one or more of its Affiliates to perform its
obligations hereunder (in any or all of which cases the Buyer nonetheless shall
remain responsible for the performance of all of its obligations hereunder).
(e) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) NOTICES. All notices, requests, demands, claims, and other
communications hereunder ("NOTICES") will be in writing. Any Notices shall be
deemed duly given if (and then three business days after) sent by registered or
certified mail, return receipt requested, postage
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prepaid, and addressed to the intended recipient as set forth below:
If to the Seller: Xxxxx Xxxxx International B.V.
000 Xxxxxxxx Xxxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attn: Xx. Xxxx Xxxxxx
Fax: 716/000-0000
Copy to: Xxxx X. Short, Esq.
Xxxx & Xxxxx Professional Corporation
0000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Fax: 310/000-0000
If to the Buyer: Xxxxxx Yale Industries, Inc.
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Attn: X.X. Xxxx, President
Fax: 219/000-0000
Copy to: Xxxxx Xxxxx, Esq.
Xxxxxxxx & Xxxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Fax: 312/000-0000
Any Party may send any Notice hereunder to the intended recipient at the address
set forth above using any other means (including personal delivery, expedited
courier, messenger service, telecopy, telex, ordinary mail, or electronic mail),
but no such Notice shall be deemed to have been duly given unless and until it
actually is received by the intended recipient. Any Party may change the address
to which Notices hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
(h) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Illinois without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Illinois or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Illinois.
(i) AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement
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shall be valid unless the same shall be in writing and signed by the Buyer and
the Seller. No waiver by any Party of any default, misrepresentation, or breach
of warranty or covenant hereunder, whether intentional or not, shall be deemed
to extend to any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
(j) SEVERABILITY. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) EXPENSES. Except as otherwise expressly provided herein, each of the
Parties will bear his or its own costs and expenses (including the expenses of
legal counsel, accountants and other advisors) incurred in connection with this
Agreement and the transactions contemplated hereby. The Seller agrees that none
of Master Products and its Subsidiaries has borne or will bear any of the
Seller's costs and expenses (including any of its legal or accounting fees and
expenses) in connection with this Agreement or any of the transactions
contemplated hereby. Additionally, the Seller agrees that it shall bear all of
the costs and expenses of Master Products and its Subsidiaries incurred in
connection with this Agreement and the transactions contemplated hereby.
(l) CONSTRUCTION. The Parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. The Parties intend
that each representation, warranty, and covenant contained herein shall have
independent significance. If any Party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty, or covenant.
(m) INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
(n) SPECIFIC PERFORMANCE. Each of the Parties acknowledges and agrees that
the other Parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Party shall be entitled to an
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injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any action instituted in any court of the United States or
any state thereof having jurisdiction over the Parties and the matter (subject
to the provisions set forth in 11(o) below), in addition to any other remedy to
which they may be entitled, at law or in equity.
(o) SUBMISSION TO JURISDICTION. Each of the Parties submits to the
non-exclusive jurisdiction of any state or federal court sitting in Chicago,
Illinois, in any action or proceeding arising out of or relating to this
Agreement and agrees that all claims in respect of the action or proceeding may
be heard and determined in any such court. Each of the Parties waives any
defense of inconvenient forum to the maintenance of any action or proceeding so
brought and waives any bond, surety, or other security that might be required of
any other Party with respect thereto. Any Party may make service on any other
Party by sending or delivering a copy of the process (i) to the Party to be
served at the address and in the manner provided for the giving of notices in
Section 11(g) above. Nothing in this 11(o), however, shall affect the right of
any Party to serve legal process in any other manner permitted by law or at
equity. Each Party agrees that a final judgment in any action or proceeding so
brought shall be conclusive and may be enforced by suit on the judgment or in
any other manner provided by law or at equity.
(p) USE OF FACSIMILE. The Parties agree that (i) executed copies of this
Agreement and the related instruments and agreements contemplated herein may be
exchanged at the Closing by exchanging copies transmitted by facsimile, (ii) all
facsimile copies so exchanged shall be deemed to be originals for any and all
purposes and (iii) the Parties will, as soon as practicable following the
Closing, deliver signed originals of all agreements and instruments for which
facsimile copies were exchanged at the Closing.
* * * * *
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IN WITNESS WHEREOF, the Parties hereto have executed this Stock Purchase
Agreement as of the date first above written.
BUYER:
XXXXXX YALE INDUSTRIES, INC.
By: _______________________________
Its: _______________________________
-
SELLER:
XXXXX XXXXX INTERNATIONAL
B.V.
By: _______________________________
Its: _______________________________
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