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Exhibit 10.2
ASSET PURCHASE AGREEMENT
dated as of
March 3, 1997
among
PROCESS TECHNOLOGY HOLDINGS, INC.,
X.X. XXXXX, INCORPORATED
and
CONTINENTAL CONVEYOR & EQUIPMENT COMPANY
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TABLE OF CONTENTS
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SECTION PAGE
R E C I T A L S.......................... 1
ARTICLE 1
DEFINITIONS......................... 1
1.1 Definitions...................................................... 1
ARTICLE 2
SALE OF ASSETS, ASSUMPTION OF LIABILITIES
AND RELATED TRANSACTIONS................... 10
2.1 Purchase and Sale of Assets. ................................... 10
2.2 Assumption of Certain Liabilities. ............................. 13
2.3 Purchase Price and Allocation.................................... 15
2.4 Payment of Purchase Price; Working Capital
Adjustment....................................................... 15
ARTICLE 3
CLOSING............................... 16
3.1 Closing Date..................................................... 16
3.2 Items to be Delivered at the Closing By Seller................... 17
3.3 Items to be Delivered at the Closing by Buyer.................... 18
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER............... 18
4.1 Organization and Related Matters................................. 18
4.2 Financial Statements; Changes; Contingencies..................... 19
4.3 Material Contracts............................................... 20
4.4 Condition of Property............................................ 21
4.5 Intellectual Property............................................ 21
4.6 Authorization; No Conflicts...................................... 22
4.7 Legal Proceedings................................................ 22
4.8 Minute Books..................................................... 22
4.9 Accounting Records............................................... 23
4.10 Insurance........................................................ 23
4.11 Permits.......................................................... 23
4.12 Compliance with Law.............................................. 23
4.13 Employee Benefits................................................ 23
4.14 Certain Interests................................................ 25
4.15 No Brokers or Finders............................................ 25
4.16 Inventory........................................................ 25
4.17 Environmental Compliance......................................... 26
4.18 Labor Contracts.................................................. 26
4.19 Overtime, Back Wages, Vacation and Minimum Wages................. 26
4.20 Discrimination, Occupational Safety and Other
Statutes and Regulations......................................... 26
4.21 Suppliers and Customers.......................................... 27
4.22 Disclosure....................................................... 27
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4.23 Warranty and Product Liability Claims............................ 27
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER............... 27
5.1 Organization and Related Matters................................. 27
5.2 Authorization.................................................... 27
5.3 No Conflicts..................................................... 28
5.4 No Brokers or Finders............................................ 28
5.5 Legal Proceedings................................................ 28
5.6 WARN Act......................................................... 28
ARTICLE 6
PRE-CLOSING COVENANTS .................................................... 29
6.1 Access........................................................... 29
6.2 Conduct of Business.............................................. 29
6.3 Notification of Certain Matters.................................. 30
6.4 Permits and Approvals; Third Party Consents...................... 31
6.5 Preservation of Business Prior to Closing Date................... 31
6.6 Bulk Transfer Laws............................................... 31
6.7 Benefit Plans.................................................... 31
6.8 Backlog.......................................................... 32
ARTICLE 7
POST-CLOSING COVENANTS...................... 32
7.1 Noncompetition................................................... 32
7.2 Nondisclosure of Proprietary Data................................ 32
7.3 Tax Cooperation.................................................. 33
7.4 Employment Matters............................................... 33
7.5 Retention and Access to Records.................................. 36
7.6 Trademark License................................................ 36
7.7 Liability for Failure to Close................................... 36
7.8 Accounts Receivable.............................................. 37
7.9 Product Warranty................................................. 38
ARTICLE 8
CONDITIONS OF PURCHASE.................... 38
8.1 General Conditions............................................... 38
8.2 Conditions to Obligations of Buyer............................... 39
8.3 Conditions to Obligations of Seller.............................. 40
ARTICLE 9
TERMINATION OF OBLIGATIONS; SURVIVAL................. 41
9.1 Termination of Agreement......................................... 41
9.2 Effect of Termination............................................ 42
9.3 Survival of Representations and Warranties....................... 42
ARTICLE 10
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INDEMNIFICATION...................... 42
10.1 Obligations of Seller............................................ 42
10.2 Obligations of Buyer............................................. 43
10.3 Procedure........................................................ 43
10.4 Limitations on Indemnification................................... 45
10.5 Survival......................................................... 45
10.6 Not Exclusive Remedy............................................. 46
10.7 Offset........................................................... 46
ARTICLE 11
GENERAL............................... 47
11.1 Amendments; Waivers.............................................. 47
11.2 Schedules; Exhibits; Integration................................. 47
11.3 Best Efforts; Further Assurances................................. 47
11.4 Governing Law.................................................... 48
11.5 No Assignment.................................................... 48
11.6 Headings......................................................... 48
11.7 Counterparts..................................................... 48
11.8 Publicity and Reports............................................ 48
11.9 Confidentiality.................................................. 48
11.10 Parties in Interest......................................... 49
11.11 Notices..................................................... 49
11.12 Expenses.................................................... 51
11.13 Remedies; Waiver............................................ 51
11.14 Knowledge Convention........................................ 51
11.15 Representation By Counsel; Interpretation................... 52
11.16 No Consequential Damages.................................... 52
11.17 Submission to Jurisdiction.................................. 52
11.18 Waiver of Jury Trial........................................ 52
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Exhibits
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EXHIBIT A Xxxx of Sale and Assignment
EXHIBIT B [Intentionally Omitted]
EXHIBIT C Trademark License
EXHIBIT D Assumption Agreement
EXHIBIT E Form of Lease Assignment
EXHIBIT F Form of Use Agreement
Schedules
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SCHEDULE 1.1B Business Employees; Non-Retained
Employees; Media Employees
SCHEDULE 1.1Bf Buyer's Signing Financials
SCHEDULE 1.1Le Leased Real Property
SCHEDULE 1.1Li Licensed Trademarks
SCHEDULE 1.10 Owned Real Property
SCHEDULE 1.1P Pueblo Facility Lease Terms
SCHEDULE 2.1(a) Certain Purchased Assets
SCHEDULE 2.1(b) Certain Excluded Assets
SCHEDULE 2.2(a) Certain Assumed Liabilities
SCHEDULE 2.3 Allocation of Purchase Price
SCHEDULE 4.1 Certain States
SCHEDULE 4.2 Certain Financial Statements
SCHEDULE 4.2(c) Certain Other Liabilities
SCHEDULE 4.3 Material Contracts
SCHEDULE 4.3A Contracts Modified or Terminated
List
SCHEDULE 4.4 Condition of Property
SCHEDULE 4.5 Intellectual Property
SCHEDULE 4.6 Authorization
SCHEDULE 4.10 Insurance
SCHEDULE 4.11 Certain Permits
SCHEDULE 4.13 Employee Benefits
SCHEDULE 4.17 Environmental
SCHEDULE 4.21 Certain Suppliers and Customers
SCHEDULE 4.23 Warranty and Product Liability Claims
SCHEDULE 7.4(b)(ii) Seller's Medical Coverage Costs
SCHEDULE 7.4(c) Business Employee Severance
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ASSET PURCHASE AGREEMENT
Asset Purchase Agreement ("Agreement") dated as of March
3, 1997, among PROCESS TECHNOLOGY HOLDINGS, INC. (as to the provisions in
Section 10.1 and Section 7.7 only) ("Holdings"), X.X. XXXXX, INCORPORATED, an
Ohio corporation ("Seller" and, collectively with Holdings, the "Selling
Parties"), and CONTINENTAL CONVEYOR & EQUIPMENT COMPANY, a Delaware corporation
("Buyer").
R E C I T A L S
WHEREAS, except to the extent otherwise set forth in this
Agreement, Seller owns all of the assets used or held for use by its
Xxxxxx-Xxxxxx Conveyor Components Division (the "Division") in connection with
the conveyor component manufacturing business currently conducted by the
Division at the Pueblo Facility and at the West Xxxxxxxx Facility (the
"Business").
WHEREAS, Seller has invited Buyer to perform and Buyer has
performed certain due diligence and business investigations with respect to the
Business, with the intention that Buyer form its own conclusions regarding the
condition and value of the business, property, liabilities, contracts and
related matters of the Business pursuant to the parties' express intention that
the sale of the Business be without representation or warranty by Seller,
express or implied, except as specifically set forth herein.
WHEREAS, Seller desires to sell, and Buyer desires to purchase
such assets on the terms and conditions set forth in this Agreement.
A G R E E M E N T
In consideration of the mutual promises contained herein and
intending to be legally bound, the parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS.
For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires,
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(a) the terms defined in this Article 1 have the meanings
assigned to them in this Article 1 and include the plural as well as the
singular,
(b) all accounting terms not otherwise defined herein have the
meanings assigned under GAAP,
(c) all references in this Agreement to designated
"Articles," "Sections" and other subdivisions are to the designated Articles,
Sections and other subdivisions of the body of this Agreement,
(d) pronouns of either gender or neuter shall include, as
appropriate, the other pronoun forms, and
(e) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision.
As used in this Agreement and the Exhibits and Schedules
delivered pursuant to this Agreement, the following definitions shall apply:
"Action" means any action, complaint, investigation, petition,
suit or other proceeding, whether civil or criminal, in law or in equity, or
before any arbitrator or Governmental Entity.
"Affiliate" means a Person that directly or indirectly,
through one or more intermediaries, controls, or is controlled by, or is under
common control with, a specified Person.
"Agreement" means this Agreement as amended or supplemented
together with all Exhibits and Schedules attached or incorporated by reference.
"Approval" means any approval, authorization, consent,
qualification or registration, or any waiver of any of the foregoing, required
to be obtained from, or any notice, statement or other communication required to
be filed with or delivered to, any Governmental Entity or any other Person.
"Assumed Liabilities" has the meaning specified in
Section 2.2(a).
"Assumption Agreement" means the Assumption Agreement dated as
of the Closing Date executed and delivered by Buyer and Seller, in substantially
the form of Exhibit D.
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"Benefit Arrangements" means all life and health insurance,
hospitalization, savings, bonus, incentive compensation, individual employment
contract, consulting contracts, termination, severance pay, holiday, vacation,
termination, severance pay, sick pay, sick leave, disability, tuition refund,
relocation, fringe benefit, collective bargaining agreements and other policies
or practices of the Division providing employee or executive compensation or
benefits to Business Employees.
"Business" has the meaning specified in the
Recitals to this Agreement.
"Business Employees" means those persons employed by Seller in
connection with the Business as set forth on Schedule 1.1B, and any additional
persons hired by Seller in the ordinary course in connection with the Business
between the date hereof and the Closing Date.
"Buyer's Signing Financials" means the audited Balance Sheet
of the Business for calendar year 1996 and the audited Income Statement for
calendar year 1996 prepared by E & Y at Buyer's sole cost and expense and
annexed hereto as Schedule 1.1Bf
"Buyer Terminated West Xxxxxxxx Employee" has the meaning
specified in Section 7.4(b).
"Closing" means the consummation of the transaction
contemplated by this Agreement.
"Closing Balance Sheet" has the meaning specified in Section
2.4(c).
"Closing Date" means the date of the Closing.
"Closing Date Working Capital" means, as at the Closing Date,
the excess of Current Assets over Current Liabilities.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collective Bargaining Agreement" has the meaning specified
in Section 4.18.
"Contract" means any agreement, arrangement, bond, commitment,
franchise, indemnity, indenture, instrument, lease or license.
"Current Assets" means, as at any date of determination, the
total assets of the Division which may
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properly be classified as current assets in conformity with GAAP, excluding (i)
accounts receivable and (ii) cash.
"Current Liabilities" means, as at any date of determination,
the total liabilities of the Division which may properly be classified as
current liabilities in conformity with GAAP.
"Deductible" has the meaning specified in Section 10.4.
"Division" has the meaning specified in the Recitals to this
Agreement.
"Encumbrance" means any claim, charge, lease, covenant,
easement, encumbrance, security interest, lien, option, pledge, rights of
others, or restriction (whether on voting, sale, transfer, disposition or
otherwise), whether imposed by agreement, law, equity or otherwise, except for
any restrictions on transfer generally arising under any applicable federal or
state securities law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the regulations and published interpretations promulgated
thereunder.
"ERISA Affiliate" means an entity that would be treated as a
single employer with the Seller under Section 414 of the Code.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Excluded Assets" has the meaning specified in Section 2.1(a).
"Excluded Liabilities" has the meaning specified in Section
2.2(b).
"E & Y" has the meaning specified in Section 2.4(b).
"GAAP" means generally accepted accounting principles in the
United States of America, as in effect from time to time.
"Governmental Entity" means any government or any agency,
bureau, board, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government, whether federal, state or
local, domestic or foreign.
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"Hazardous Substance" means (but shall not be limited to)
substances that are defined or listed in, or otherwise classified pursuant to,
any applicable Laws as "hazardous substances," "hazardous materials," "hazardous
wastes" or "toxic substances," or any other formulation intended to define, list
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, radioactivity, carcinogenicity, reproductive toxicity
or "EP toxicity," and petroleum and drilling fluids, produced waters and other
wastes associated with the exploration, development, or production of crude oil,
natural gas or geothermal energy.
"High Yield Offering" means Buyer's public offering of its
high yield debt securities underwritten by Xxxxxxxxx Xxxxxx & Xxxxxxxx
Securities Corporation.
"Holdings" has the meaning assigned that term in the
introduction to this Agreement.
"Income Tax" means a tax imposed on or measured by net income,
net worth or net capital, together with any interest or any penalty, addition to
tax or additional amount imposed with respect thereto.
"Indemnifiable Claim" means any Loss for or against which any
party is entitled to indemnification under this Agreement; "INDEMNIFIED PARTY"
means the party entitled to indemnity hereunder; and "INDEMNIFYING PARTY" means
the party obligated to provide indemnification hereunder.
"Intellectual Property" means any trade secret, secret
process, inventions, invention rights, processes (including, without limitation,
all formulae and processes for the production of the goods manufactured by the
Business), and all know-how, drawings, blue prints, computer software (to the
extent transferable without consent), specifications, designs, technology, data,
product development information and rights, lab notebooks, trade secrets, and
other proprietary information, and any and all Marks.
"Inventory" has the meaning specified in Section 2.1(a).
"IRS" means the Internal Revenue Service or any successor
entity.
"ISRA" has the meaning specified in Section 8.1.
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"Law" means any constitutional provision, statute or other
law, rule, regulation, or interpretation of any Governmental Entity and any
Order.
"Lease Assignment" means the Lease Assignment dated as of the
Closing Date executed and delivered by Seller and Buyer, substantially in the
form of Exhibit E annexed hereto.
"Lease" means the Lease Agreement between Dowel Associates, a
New Jersey partnership, and Seller (as successor in interest to Xxxxxx-Xxxxxx
Corporation), dated as of July 23, 1990, as amended by that certain Amendment to
Lease dated as of March 31, 1995.
"Leased Real Property" means the real property set forth on
Schedule 1.1Le.
"Licensed Trademarks" means those Marks set forth on Schedule
1.1Li.
"Loss" means any action, cost, damage, disbursement, expense,
liability, loss, deficiency, diminution in value, obligation, penalty or
settlement of any kind or nature, whether foreseeable or unforeseeable,
including but not limited to, interest or other carrying costs, penalties,
legal, accounting and other professional fees and expenses incurred in the
investigation, collection, prosecution and defense of claims and amounts paid in
settlement, that may be imposed on or otherwise incurred or suffered by the
specified person.
"Xxxx" means any brand name, copyright, patent, service xxxx,
trademark, tradename, and all registrations or application for registration of
any of the foregoing.
"Material Adverse Effect" means a material adverse effect on
(i) the business, operations, properties, assets, prospects or condition
(financial or otherwise) of the Business or (ii) on Seller's ability to perform
its obligations under this Agreement.
"Material Contract" means any Contract that Seller is a party
to that is material to the Business as of the date hereof; PROVIDED that (i) a
Contract shall be deemed to not be material to the Business unless such Contract
(A) provides that the aggregate amount of consideration paid by or to the Seller
pursuant to the terms of such Contract is in an amount in excess of $50,000 or
(B) is a supply contract, distributorship agreement, manufacturer representation
agreement, employment contract, consulting agreement, union contract, license of
Intellectual Property,
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confidentiality agreement, noncompete agreement or any other Contract, in each
case that was entered into outside of the ordinary course of business of the
Business and (ii) notwithstanding anything to the contrary contained in this
definition, the Lease shall be deemed to be a Material Contract.
"Media Division Assets" means the assets, rights, privileges,
claims and Contracts owned by Seller and used in connection with the business
conducted by the X.X. Xxxxx, Incorporated Media Division including, without
limitation, any of Seller's Intellectual Property related to such business and
any tangible property related to such business.
"Media Employees" means those Business Employees set forth on
Part (iii) of Schedule 1.1B.
"Multiemployer Plan" means a Pension Plan which is a
multiemployer plan as defined in Section 3(37)(A) of ERISA.
"Neutral Auditors" has the meaning specified in Section
2.4(c).
"NJDEP" has the meaning specified in Section 8.1.
"Order" means any decree, injunction, judgment, order,
ruling, assessment or writ.
"OSHA" has the meaning specified in Section 4.21.
"Other Businesses" means Seller's businesses other than the
Business.
"Owned Real Property" means the real property set forth on
Schedule 1.10.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Pension Plan" means any Plan that is an "employee benefit
pension plan" as such term is defined in Section 3(2) of ERISA.
"Permit" means any license, permit, franchise, certificate of
authority, or order, or any waiver of the foregoing, required to be issued by
any Governmental Entity.
"Permitted Exception" means any Encumbrance that (i) is
reflected in the financial statements referred to herein that have been
delivered to Buyer, (ii) is not material in amount, (iii) constitutes a
statutory lien
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arising in the ordinary course of business of the Business, (iv) does not in the
aggregate materially detract from the value of the encumbered Purchased Asset or
materially interfere with the use of the encumbered Purchased Asset in the
ordinary course of business of the Business as conducted as of the date hereof,
(v) is a lien for Taxes (A) not yet delinquent or (B) the validity of which are
being contested in good faith by appropriate actions or (vi) does not materially
impair or adversely affect the Business, taken as a whole.
"Person" means an association, a corporation, an individual, a
partnership, a trust or any other entity or organization, including a
Governmental Entity.
"Plan" means any bonus, incentive compensation, deferred
compensation, pension, profit sharing, retirement, stock purchase, stock option,
stock ownership, stock appreciation rights, phantom stock, leave of absence,
layoff, vacation, day or dependent care, legal services, educational assistance,
relocation assistance, cafeteria, life, health, accident, disability, workers
compensation or other insurance, severance, separation or other employee benefit
plan, practice, policy or arrangement of any kind, whether written or oral,
including but not limited to any "employee benefit plan" within the meaning of
Section 3(3) of ERISA, which provides compensation or benefits to Business
Employees.
"Prepaid Expenses" has the meaning specified in
Section 2.1(a).
"Pueblo Facility" means the manufacturing facility of Seller
located at 000 Xxxxxxxxxx Xxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000.
"Pueblo Lease" means the Lease Agreement dated as of the
Closing Date executed and delivered by Seller and Buyer, which shall (i)
incorporate each of the terms and conditions set forth on Schedule 1.1P, (ii) be
in the form of a triple net lease for a manufacturing facility located in
Colorado and (iii) otherwise be in form and substance reasonably satisfactory to
Buyer and Seller.
"Pueblo Non-Retained Employee" means (x) each Business
Employee listed in Part (i) of Schedule 1.1B and (y) any additional persons
hired by Seller in connection with the Pueblo Facility between the date hereof
and the Closing Date who are necessary or advisable (in the reasonable
discretion of Seller) to conduct the Business in accordance with Section 6.2.
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"Purchase Price" has the meaning specified in Section 2.3.
"Purchased Assets" has the meaning specified in Section
2.1(a).
"Resolution Period" has the meaning specified in Section
2.4(b).
"Seller's Accounts" has the meaning specified in Section 7.8.
"Severance Plan" means those of Seller's Benefit Arrangements,
Plans and collective bargaining agreements (other than any Pension Plan) that
provide for payment(s) on or following an employee's termination of employment
or separation from service, without regard to whether such payment is a flat
dollar amount, is based on the employee's years of service, or is deemed to be
payment in lieu of notice.
"Side Letter" means that certain letter agreement dated as of
the date hereof by and between Seller and Buyer.
"Tax" means any foreign, federal, state, county or local
income, sales and use, excise, franchise, real and personal property, transfer,
gross receipt, capital stock, production, business and occupation, disability,
employment, payroll, severance or withholding tax or charge imposed by any
Governmental Entity, any interest and penalties (civil or criminal) related
thereto or to the nonpayment thereof, and any Loss in connection with the
determination, settlement or litigation of any Tax liability.
"Tax Return" means a report, return or other information
required to be supplied to a Governmental Entity with respect to Taxes.
"Trademark License" means the Trademark License dated as of
the Closing Date executed and delivered by Seller and Buyer, substantially in
the form of Exhibit C, pursuant to which Seller shall license the Licensed
Trademarks for certain limited uses for a period that shall terminate on the
second anniversary of the Closing Date.
"Use Agreement" means the Use Agreement dated as of the
Closing Date executed and delivered by Seller and Buyer, which is substantially
in the form of Exhibit F annexed hereto and shall otherwise be in form and
substance reasonably satisfactory to Seller and Buyer.
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"XXXX Xxx" has the meaning specified in Section 5.6.
"West Xxxxxxxx Facility" means the warehouse and
administrative facility of Seller located at 00 Xxxxxxxxx Xxxxx, Xxxx Xxxxxxxx,
Xxx Xxxxxx 00000.
"West Xxxxxxxx Non-Retained Employee" means each Business
Employee listed in Part (ii) of Schedule 1.1B and (y) any additional persons
hired by Seller in connection with the West Xxxxxxxx Facility between the date
hereof and the Closing Date who are necessary or advisable (in the reasonable
discretion of Seller) to conduct the Business in accordance with Section 6.2.
"Year-End Working Capital" means, as at December 31, 1996, the
excess of Current Assets over Current Liabilities, as determined by reference to
the Financial Statements set forth in Schedule 4.2.
"Welfare Plans" mean all Plans which are employee welfare
benefit plans as defined in Section 3(1) of ERISA.
ARTICLE 2
SALE OF ASSETS, ASSUMPTION OF LIABILITIES
AND RELATED TRANSACTIONS
2.1 PURCHASE AND SALE OF ASSETS.
(a) PURCHASED ASSETS. Subject to the terms and conditions of
this Agreement, on the Closing Date Seller shall sell, convey, assign, transfer
and deliver to Buyer, and Buyer shall purchase, acquire and accept from Seller,
all of the assets, properties, rights, privileges, claims and contracts owned or
leased by Seller and used or held for use by the Division in connection with the
Business (the "Purchased Assets"), except the assets identified in Section
2.1(b) (the "Excluded Assets"). The Purchased Assets shall include the items set
forth on Schedule 2.1(a), except as changed by assets acquired or disposed of in
the ordinary course of business of the Business in compliance with Section 6.2
hereof after the date thereof, and also shall include the following:
(i) Seller's leasehold interest in the Leased Real
Property.
(ii) All fixtures and improvements attached to the
Leased Real Property.
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(iii) All machinery, apparatus, furniture and
fixtures, materials, supplies, motor vehicles, and other equipment of
every type which is (A) owned or leased by Seller and (B) used by the
Division in connection with the Business.
(iv) All inventory of usable goods, including all
merchandise, raw materials, work in progress, finished products and
other tangible personal property used or held for sale by the Division
in connection with the Business as of the date hereof (the
"Inventory"), together with any additions thereto and subject to any
reductions therefrom received or incurred by the Division in connection
with the Business in the ordinary course in compliance with Section 6.2
hereof after the date hereof through the Closing Date.
(v) All of Seller's rights and interests arising
under or in connection with the Contracts to which Seller is a party
which are directly related to the Business and other documents of the
Division which are directly related to the Business, together with all
advance payments thereon.
(vi) Seller's prepaid expenses directly related to
the Business as of the date hereof set forth on Schedule 2.1(a)
("Prepaid Expenses"), together with any additions thereto and subject
to any reductions therefrom made or accrued by Seller which are
directly related to the Business in the ordinary course and in
compliance with Section 6.2 hereof after the date hereof through the
Closing Date.
(vii) Any cash owned by the Seller which is
physically located at the Pueblo Facility.
(viii) Except as identified in Section 2.1(b), sales
data, customer lists, information relating to customers, suppliers'
names, mailing lists, and, if any, advertising matter, in each case to
the extent directly related to the Business.
(ix) Except as identified in subsection 2.1(b)
hereof, goodwill associated with the Business; all of the Division's
books and records directly related to the Business and the Non-Retained
Employees; and transferable Permits directly related to the Business.
(x) The payroll accounts set forth on Schedule
2.1(a).
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(b) EXCLUDED ASSETS. The assets that constitute Excluded
Assets shall include only:
(i) The consideration delivered to Seller pursuant to
this Agreement.
(ii) The right of Seller to enforce the
representations, warranties, covenants and indemnities of Buyer under
this Agreement, the Assumption Agreement, the Pueblo Lease, the
Trademark License, the Lease Assignment, the Side Letter, the Use
Agreement (if any) and any related agreements and the obligations of
Buyer to pay, perform or discharge the liabilities and obligations of
Seller assumed by Buyer under this Agreement, the Assumption Agreement,
the Pueblo Lease, the Trademark License, the Lease Assignment, the Side
Letter, the Use Agreement (if any) and any related agreements, and all
other rights, including rights of indemnification, of Seller under this
Agreement, the Assumption Agreement, the Pueblo Lease, the Trademark
License, the Lease Assignment, the Side Letter, the Use Agreement (if
any) and any related agreements.
(iii) All assets, rights, privileges, claims and
Contracts owned by Seller and used in connection with the Other
Businesses, including, without limitation, the Media Division Assets.
(iv) All credits, reserves and deposits with
applicable Governmental Entities including, without limitation, those
related to unemployment compensation and workers' compensation.
(v) All of Seller's insurance policies and any right,
title and interest of Seller in and to any proceeds thereof or any
claims thereunder or with respect thereto, in each case whenever
arising.
(vi) All of Seller's deposit accounts other than the
payroll accounts specified in Section 2.1(a)(xi).
(vii) All of Seller's Plans, any assets thereof, and
the books and records related to such Plans.
(viii) The Marks set forth on Schedule 2.1(b).
(ix) Seller's articles of incorporation,
non-transferable franchises, corporate seals, minute books, stock books
and other corporate records having to do
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with the corporate organization and capitalization of Seller and all
income tax records and nontransferable Permits.
(x) Seller's books of account related to the Other
Businesses.
(xi) All refunds with respect to (A) Income Taxes
attributable to periods of time that Seller was the owner of the
Purchased Assets and (B) sales Taxes and property Taxes due and payable
on or before the Closing Date.
(xii) All amounts owed, or reflected on the books of
account of Seller as being owed, by Seller to the Business.
(xiii) Cash other than the cash referenced in Section
2.1(a)(vii).
(xiv) Seller's fee interest in the Owned Real
Property.
(xv) All fixtures and improvements attached to the
Owned Real Property.
(xvi) All of Seller's accounts receivable as of the
date hereof arising from the Business, together with any additions
thereto received or incurred by Seller after the date hereof through
and including the Closing Date, the trade accounts receivable ledger
dated as of the Closing Date, and any other documents or instruments
related to such accounts receivable or useful in the collection
thereof, including, without limitation, bills of lading, invoices,
shipping documents, purchase orders, etc.
(xvii) The assets set forth on Schedule 2.1(b).
(c) To the extent that the assignment of any Contract, Permit
or Approval issued or to be issued by any Governmental Entity relating to the
Business or the Purchased Assets to be assigned to Buyer pursuant to this
Agreement shall require the Approval of any party other than Seller, this
Agreement shall not constitute a contract to assign the same if an attempted
assignment would constitute a breach thereof. Seller shall use its reasonable
commercial efforts, and shall cooperate where appropriate, to obtain any such
Approval necessary to any such assignment. If any such Approval is not obtained,
then Seller shall cooperate with Buyer in any reasonable
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arrangement requested by Buyer designed to provide to Buyer the benefits under
any such Contract, Permit or Approval including enforcement of any and all
rights of Seller against the other party thereto arising out of breach or
cancellation thereof by such other party or otherwise. Notwithstanding anything
to the contrary contained herein, in no event shall Seller's failure to assign
any Contract, Permit or Approval result in an adjustment of the Purchase Price.
2.2 ASSUMPTION OF CERTAIN LIABILITIES.
(a) ASSUMED LIABILITIES. Buyer shall assume, shall take
subject to and shall be liable for the following (collectively, the "Assumed
Liabilities"):
(i) All Current Liabilities of the type listed on
Part (i) of Schedule 2.2(a).
(ii) Any and all liabilities or obligations incurred,
arising from or out of or in connection with the operation of
the Business and the Purchased Assets after the Closing Date
and whether or not incurred in the ordinary course of
business.
(iii) The liabilities and obligations set forth on
Part (ii) of Schedule 2.2(a) annexed hereto.
(iv) Any other liabilities or obligations expressly
assumed by Buyer hereunder, or pursuant to (a) the Pueblo
Lease, (b) the Lease Assignment, (c) the Assumption Agreement
or (d) the Side Letter.
(b) LIABILITIES NOT ASSUMED. Buyer shall not assume, shall not
take subject to and shall NOT be liable for any liabilities other than the
Assumed Liabilities (all such liabilities other than the Assumed Liabilities,
the "Excluded Liabilities"). Excluded Liabilities shall include but not be
limited to:
(i) Any liabilities or obligations incurred, arising
from or out of or in connection with the issuance, sale, repayment or
repurchase of any of Seller's securities.
(ii) Any liabilities or obligations incurred, arising
from or out of, in connection with or as a result of claims made by or
against Seller whether
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before or after the Closing Date that arise out of the
Other Businesses.
(iii) Any liabilities or obligations (whether
assessed or unassessed) of Seller for (A) any Taxes arising by reason
of the transactions contemplated herein, (B) Seller's Income Taxes and
(C) sales Taxes and property Taxes due and payable on or before the
Closing Date.
(iv) All fees and expenses of Seller in connection
with the transactions contemplated herein.
(v) Any liabilities or obligations to stockholders or
former stockholders of Seller.
(vi) Any liabilities or obligations of Seller
incurred, arising from or out of or in connection with this Agreement
or the events or negotiations leading up to this Agreement.
(vii) Any liabilities or obligations arising from or
out of or in connection with any use, transportation, treatment,
disposal or release of any Hazardous Substance(s) in connection with
the Business at any location other than the Owned Real Property or the
Leased Real Property prior to the Closing Date.
(viii) Any fines or penalties under any environmental
Laws arising from or out of or in connection with the operation of the
Business prior to the Closing Date.
(ix) Except as specifically referred to in Section
2.2(a), any liabilities or obligations arising before the Closing Date
from or out of or in connection with (A) any pending or completed
Action relating to the Business including, without limitation, Actions
cited by current and former employees of the Business under OSHA or
based upon any other theory of recovery, (B) the conduct of the
Business or ownership of the Purchased Assets prior to the Closing
Date, (C) products sold or services rendered by the Business prior to
the Closing Date, whether in the nature of warranty or product
liability claims.
2.3 PURCHASE PRICE AND ALLOCATION.
(a) The total purchase price (the "Purchase Price") to be paid
to Seller by Buyer at the Closing for the Purchased Assets shall be (i) the
assumption of the Assumed
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Liabilities, PLUS (ii) $13,075,000 in cash, subject to certain adjustments as
set forth in Section 2.4(b).
(b) The Purchase Price shall be allocated among the Purchased
Assets and the Assumed Liabilities as set forth in Schedule 2.3. Seller and
Buyer agree that their agreed upon allocation shall be used, reported and
implemented for all federal, state, local and other tax purposes.
2.4 PAYMENT OF PURCHASE PRICE; WORKING CAPITAL
ADJUSTMENT.
(a) On the Closing Date, Buyer shall pay to Seller, by wire
transfer or other immediately available funds, the Purchase Price.
(b) After the Closing Date, the Purchase Price shall be
adjusted as follows:
(i) Within 30 days of the Closing Date, Buyer shall
cause Ernst & Young LLP ("E & Y") to prepare and deliver to
Seller an unaudited balance sheet of the Business as at the
Closing Date (the "Closing Balance Sheet"), prepared in
accordance with GAAP consistently applied (including, without
limitation, with respect to the Business as conducted by
Seller), which sets forth the Closing Date Working Capital.
Any fees and expenses incurred by Buyer in preparing the
Closing Balance Sheet shall be paid by Buyer.
(ii) After receipt of the Closing Balance Sheet,
Seller and its accountants and attorneys shall have 30 days to
review the Closing Balance Sheet. In addition, Seller and its
accountants and attorneys shall be given reasonable access to
the premises of Buyer, to its books, records and work papers,
and to the appropriate personnel at Buyer for purposes of
confirming the Closing Balance Sheet. Unless Seller notifies
Buyer to the contrary in writing within such 30-day period
pursuant to clause (iii) below, Seller shall be deemed to have
accepted the Closing Balance Sheet and such Closing Balance
Sheet shall be conclusive and binding on Seller and Buyer. Any
fees and expenses incurred by Seller in undertaking such
review shall be paid by Seller.
(iii) If Seller takes exception to any aspect of the
Closing Balance Sheet or the
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preparation thereof, Seller shall notify Buyer of such
exception in writing on or prior to the 30th day after
Seller's receipt of the Closing Balance Sheet. Unless resolved
by the parties within 10 days (the "Resolution Period"), such
exception or exceptions shall be submitted to a firm of
nationally recognized independent public accountants (the
"Neutral Auditors') selected by mutual agreement of Seller and
Buyer within five days after the expiration of the Resolution
Period or, in the absence of such mutual agreement, by a firm
of nationally recognized independent public accountants
selected by lot after eliminating Seller's principal outside
accountants, E & Y, Buyer's principal outside accountants, if
different from E & Y, and one additional firm designated as
objectionable by each of Seller and Buyer. Each party agrees
to execute a reasonable engagement letter, if requested to do
so by the Neutral Auditors. The Neutral Auditors, within 45
days after their selection shall make a determination of all
issues in dispute, which determination shall be set forth in a
written statement delivered to Seller and Buyer and shall be
binding and conclusive as among the parties hereto absent
fraud or manifest effort. All fees and expenses relating to
the work performed by the Neutral Auditors shall be borne
equally by Seller and Buyer.
(iv) The Purchase Price shall be adjusted upon the
happening of (A) the acceptance of the Closing Balance Sheet
by Seller, as evidenced by written notice thereof to Buyer,
(B) the deemed acceptance of the Closing Balance Sheet by
Seller pursuant to clause (ii) hereof, or (C) the resolution
of the parties or the delivery of the statement of the Neutral
Auditors pursuant to clause (iii) above. If the Closing Date
Working Capital (after taking into account any changes
resulting from the mutual agreement of the parties or the
statement of the Neutral Auditors, if any) is less than the
Year-End Working Capital, then Seller shall pay to Buyer, by
wire transfer or other immediately available funds, the
difference between the Year-End Working Capital and the
Closing Date Working Capital. Any payment made pursuant to
this clause (iv) shall be deemed to be an adjustment in
Purchase Price.
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ARTICLE 3
CLOSING
3.1 CLOSING DATE.
Upon the terms and subject to the conditions set forth in this
Agreement, the Closing of the transaction shall take place at the offices of
O'Melveny & Xxxxx LLP, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on March
31, 1997, or at such other location or time as Seller and Buyer may agree in
writing, but in no event later than the earlier of (i) three days after Buyer's
receipt of the proceeds (net of fees, commissions and underwriting discounts) of
the High Yield Offering and (ii) April 7, 1997.
3.2 ITEMS TO BE DELIVERED AT THE CLOSING BY
SELLER.
At the Closing, Seller shall deliver or cause to be delivered
to Buyer:
(a) A Xxxx of Sale and Assignment, in substantially the form
of Exhibit A.
(b) The Lease Assignment.
(c) The Pueblo Lease.
(d) The Trademark License.
(e) Such other instruments of transfer necessary or
appropriate to transfer to and vest in Buyer all of Seller's right, title and
interest in and to the Purchased Assets.
(f) All documentation required to exempt Seller from the
withholding requirement of Section 1445 of the Code, consisting of (a) an
affidavit from Seller to Buyer stating under penalty of perjury that Seller is
not a foreign person and providing Seller's U.S. taxpayer identification number,
or (b) a sworn affidavit of Seller that it is not a "U.S. real property holding
corporation," as defined in Section 897 of the Code or (c) a "qualifying
statement" obtained by Seller from the Internal Revenue Service.
(g) The certificates, consents and other documents referred to
herein as then deliverable by Seller.
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'
(h) The keys to all locks located on or in the Purchased
Assets (and any and all cards, devices or things necessary to access any
Purchased Assets).
In addition, in the event that Seller elects (in its sole
discretion) on or before the Closing Date to enter into the Use Agreement,
Seller shall deliver the Use Agreement.
3.3 ITEMS TO BE DELIVERED AT THE CLOSING BY
BUYER.
At the Closing, Buyer shall deliver to Seller:
(a) The Purchase Price.
(b) The Assumption Agreement.
(c) The Pueblo Lease.
(d) The Lease Assignment.
(e) Such instruments as requested by any creditor, lessor or
any other person whose consent is required to consummate the transactions
contemplated by this Agreement to evidence the assumption by Buyer of the
Assumed Liabilities.
(f) The certificates, consents and other documents referred to
herein as then deliverable to Buyer.
In addition, in the event that Seller elects (in its sole
discretion) on or before the Closing Date to enter into the Use Agreement, Buyer
shall deliver the Use Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents, warrants and agrees as follows:
4.1 ORGANIZATION AND RELATED MATTERS.
Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Ohio. Seller has all necessary
corporate power and authority to execute, deliver and perform this Agreement and
any related agreements to which it is a party. Seller has all necessary
corporate power and authority to own the Purchased Assets and to carry on the
Business as now
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conducted and is qualified to do business as a foreign corporation and is in
good standing in the States of New Jersey and Colorado, and neither the conduct
of the Business nor the ownership of the Purchased Assets requires the
qualification of Seller as a foreign corporation in any other jurisdiction,
except where the failure to be so qualified or licensed would not have a
Material Adverse Effect. Schedule 4.1 sets forth each State in which any
employees or material assets of the Business are located, other than States in
which assets or employees are located solely because such assets or employees
are in transit.
4.2 FINANCIAL STATEMENTS; CHANGES; CONTINGENCIES.
(a) UNAUDITED FINANCIAL STATEMENTS. Seller has delivered to
Buyer (i) the unaudited balance sheet for the Business at December 31, 1996, and
(ii) the related unaudited statements of operations for the twelve months then
ended, each of which is set forth on Schedule 4.2. All such financial statements
have been prepared in conformity with GAAP applied on a consistent basis (except
for changes, if any, required by GAAP and disclosed therein). Such statement of
operations presents fairly in all material respects the results of operations of
the Business for the respective periods covered, and the balance sheet presents
fairly in all material respects the financial condition of Seller as of December
31, 1996. Since December 31, 1996, there has been no change in any of the
significant accounting policies, practices or procedures of Seller.
(b) ABSENCE OF CERTAIN CHANGES. Since December 31, 1996, there
has not been, occurred or arisen:
(i) any change in the Purchased Assets or the Assumed
Liabilities or the financial condition of the Business, other than in
the ordinary course of business, none of which would have a Material
Adverse Effect, or
(ii) any strike or other material labor dispute, or
(iii) any casualty, loss, damage or destruction
(whether or not covered by insurance) which involves a loss of more
than $100,000,
(iv) any material transaction other than in the
ordinary course of business,
(v) any material cancellation, termination, amendment
or grant of waiver of any Material Contract
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or of any material rights or claims arising thereunder,
or
(vi) any purchase commitments in excess of the normal
business requirement of the Business or a reduction in the aggregate
dollar volume of backlog of sales or orders of the Business in excess
of $150,000.
except, in each case, for changes affecting generally the material handling
industry as a whole, including but not limited to changes in or affecting
interest rates, securities markets, accounting principles, practices or
conventions or applicable laws and regulations (it being understood that Buyer
assumes the risks associated with changes of such type from and as of the date
of this Agreement).
(c) NO OTHER LIABILITIES OR CONTINGENCIES. Seller does not
have any liabilities of any material nature, whether accrued, absolute,
contingent or otherwise, and whether due or to become due, probable of assertion
or not, arising from or incurred in connection with the Business except such
liabilities that (i) are reflected or disclosed in the financial statements
referred to in subsection (a) above, (ii) were incurred after December 31, 1996
in the ordinary course of business or (iii) are set forth in Schedule 4.2(c).
(d) BUYER'S SIGNING FINANCIALS. Notwithstanding anything to
the contrary contained herein, the parties hereto hereby expressly agree that
(i) Seller shall not be deemed to have breached any representations, warranties,
covenants or agreements contained in this Agreement (including, without
limitation, in this Section 4.2 or Section 4.22) or any related agreement due to
any difference or discrepancy between the financial statements set forth in
Schedule 4.2 and Buyer's Signing Financials and (ii) any difference or
discrepancy between the financial statements set forth in Section 4.2 and
Buyer's Signing Financials, if any, has already been reflected in the Purchase
Price as determined on the date hereof.
4.3 MATERIAL CONTRACTS.
Schedule 4.3 lists each contract directly related to the
Business to which Seller is a party that is deemed a Material Contract under
this Agreement. Unless otherwise so noted in Schedule 4.3, each such Contract
was entered into in the ordinary course of business. True, correct and complete
copies of the agreements appearing on Schedule 4.3, including all amendments and
supplements, have been delivered to Buyer. Except as set forth in Schedule 4.3,
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each Material Contract is valid and binding. Seller has duly performed all its
material obligations thereunder to the extent that such obligations to perform
have accrued. No material breach or default, alleged material breach or default,
or event which would (with the passage of time, notice or both) constitute a
material breach or default thereunder by Seller (or, to the best knowledge of
Seller, any other party or obligor with respect thereto), has occurred or as a
result of this Agreement or its performance will occur. Except as set forth in
Schedule 4.3A, consummation of the transactions contemplated by this Agreement
will not (and will not give any person a right to) terminate or modify any
material rights of, or accelerate or augment any material obligation of, Seller.
Except as set forth on Schedule 4.3, there are no material offsets, credits or
defenses against or to any material rights of Seller under the Lease.
4.4 CONDITION OF PROPERTY.
(a) Except as set forth on Schedule 4.4, Seller has good and
marketable title to each of the Purchased Assets, free and clear of any
Encumbrances other than Permitted Exceptions. Except as set forth in the
Schedules, Seller has all rights, power and authority to sell, convey, assign,
transfer and deliver the Purchased Assets to Buyer in accordance with the terms
of this Agreement. At the Closing, Seller shall deliver the Purchased Assets to
Buyer, free and clear of any Encumbrances except for (i) Permitted Exceptions
and (ii) monetary liens which will be removed of record at or prior to the
Closing. The Purchased Assets are in a good state of maintenance and repair,
have been regularly and appropriately maintained, repaired and replaced, are not
materially defective except for ordinary wear and tear and are adequate for use
in the Business. Except as set forth in Schedule 4.17, the Leased Real Property
is, in all material respects, in appropriate condition for surrender to Dowel
Associates, as landlord under the Lease, pursuant to the terms of the Lease.
(b) Except as set forth on Schedule 4.4, the Purchased Assets,
the Owned Real Property and the Leased Real Property comprise all material
property and interests used or held for use by Seller in the conduct of the
Business. Seller has received no written notice of any proposed special
assessments, nor any proposed material changes in property tax or land use laws
affecting the Leased Real Property. Except as set forth on Schedule 4.4 annexed
hereto, the Purchased Assets, the Owned Real Property and the Leased Real
Property constitute substantially all of the assets necessary to conduct the
Business consistent with past practices of Seller. Seller
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has made no material disposition of assets used or held for use in connection
with the Business (other than inventory) during the twelve months preceding the
date hereof.
4.5 INTELLECTUAL PROPERTY.
----------------------
Schedule 4.5 lists any and all Marks and patents which are
used in the Business. Except as set forth on Schedule 4.5, Seller has complete
rights to and ownership of all material Intellectual Property required for use
in connection with the Business. Seller does not use any material Intellectual
Property in connection with the Business by consent of any other person and is
not required to and does not make any material payments to others with respect
thereto. Except as set forth on Schedule 4.5, the Intellectual Property of
Seller used by Seller in connection with the Business is fully assignable free
and clear of any Encumbrances other than Permitted Exceptions. Seller has in all
material respects performed all obligations required to be performed by it, and
is not in default in any material respect under any Material Contract relating
to any of the foregoing.
None of the past or present employees, officers, directors,
shareholders or affiliates of Seller has any rights in any material Intellectual
Property of Seller. Except as set forth in Schedule 4.5, Seller has not granted
any outstanding license or other rights to any material Intellectual Property
owned by it, and Seller is not liable, and has not made any contract or
arrangement whereby it may become liable, to any person for any royalty or other
compensation for the use of any material Intellectual Property in connection
with the Business. The Business, as presently conducted, does not materially
infringe any Intellectual Property rights of others, and Seller has not been
charged or, to the best of Seller's knowledge, threatened to be charged with any
such infringement.
4.6 AUTHORIZATION; NO CONFLICTS.
----------------------------
The execution, delivery and performance of this Agreement and
any related agreements by Seller has been duly and validly authorized by the
Board of Directors of Seller and by all other necessary corporate action on the
part of Seller. This Agreement and any related agreements constitutes the
legally valid and binding obligation of Seller, enforceable against Seller in
accordance with its terms except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws and
equitable principles relating to or limiting creditors rights generally. Except
as set forth in Schedule 4.6 annexed hereto, the execution, delivery and
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performance of this Agreement by Seller and the execution, delivery and
performance of any related agreements or contemplated transactions by Seller
will not materially violate, or constitute a material breach or default (whether
upon lapse of time and/or the occurrence of any act or event or otherwise)
under, the charter documents or by-laws of Seller or any Material Contract of
Seller, result in the imposition of any Encumbrance (other than Permitted
Exceptions) against any of the Purchased Assets or violate any Law in a material
respect. Schedule 4.6 lists all material Permits and Approvals required to be
obtained by Seller to consummate the transactions contemplated by this
Agreement.
4.7 LEGAL PROCEEDINGS.
There is no Order or Action pending, or, to the best knowledge
of Seller, overtly threatened, against or affecting Seller in connection with
the Business or any of the Purchased Assets, that individually or when
aggregated with one or more other Orders or Actions if determined adversely
would reasonably be expected to result in a liability in excess of $100,000. As
of the date hereof, there is no Order or Action pending against, or, to the best
knowledge of Seller, affecting Seller in connection with the Business or any of
the Purchased Assets.
4.8 MINUTE BOOKS.
The minute books of Seller accurately reflect all material
actions and proceedings taken since the date Seller acquired the Business by the
respective shareholders, boards of directors and committees of Seller, and such
minute books contain true and complete copies of the charter documents of Seller
and all related amendments.
4.9 ACCOUNTING RECORDS.
Seller's records to be transferred hereunder accurately and
validly reflect its material transactions directly related to the Business.
4.10 INSURANCE.
Schedule 4.10 lists all material insurance policies owned or
held by the Seller which cover risk to the Purchased Assets, the Business,
employees of the Seller directly related to the Business or potential
liabilities to third parties arising from or in connection with the Business.
Such insurance polices are in full force and effect. Seller has received no
written notice from any
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insurer or agent of any intent to cancel such insurance policies.
4.11 PERMITS.
Schedule 4.11 annexed hereto lists all material Permits that
are required by any Governmental Entity to permit Seller to conduct the
Business. Seller is not in material default under or in material violation of
any such Permit. To the best knowledge of Seller, no suspension, cancellation or
termination of any of such material Permits is overtly threatened or imminent.
4.12 COMPLIANCE WITH LAW.
(a) Seller has conducted the Business in accordance with
applicable Laws in all material respects, and the forms, procedures and
practices of Seller are in material compliance with all such Laws.
(b) Seller is not in violation of any material ordinance, law
or regulation of any Governmental Entity resulting from the current uses of, or
the buildings or improvements on, the Owned Real Property or the Leased Real
Property. No proceedings are pending or, to the best knowledge of Seller,
overtly threatened for condemnation of all or any material part of the Owned
Real Property of the Leased Real Property. All material structures located on
the Owned Real Property and the Leased Real Property and used in connection with
the Business are in good condition and repair, ordinary wear and tear excepted.
4.13 EMPLOYEE BENEFITS.
(a) Schedule 4.13 lists all Plans currently maintained by
Seller (or any ERISA Affiliate) which provides or has provided benefits to or
for any Business Employee within the most recent five years. Seller has
delivered or made available to Buyer copies of each Plan, all amendments
thereto, all related funding arrangements, all actuarial valuation reports for
the most recent five years, all Forms 5500 with schedules thereto for the most
recent five years; a copy of the most recent determination letter issued by the
Internal Revenue Service for each Pension Plan; and a copy of the most recent
summary plan description.
(b) Except as indicated on Schedule 4.13, each Plan and
related funding arrangements (i) are in form and have been administered in
material compliance with all applicable laws, including, without limitation,
ERISA and the Code; (ii) each Pension Plan intended to qualify under Section
401(a) of the Code has received a favorable
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determination letter from the Internal Revenue Service with respect to such
qualification or has been submitted timely to the Internal Revenue Service for
such a favorable determination; (iii) each trust maintained in conjunction with
a Pension Plan intended to qualify under Section 401(a) of the Code has received
a favorable determination letter from the Internal Revenue Service with respect
to the exemption thereof under Section 501(a) of the Code; (iv) none of the
Pension Plans or related trusts, or any administrator or trustee thereof, or
party-in-interest or disqualified person thereto has engaged in a transaction
that could cause any of them to be liable for a material civil penalty under
Section 409 or 502(i) or any other section of ERISA or result in a material tax
under Section 4975 or 4976 or any other section of Chapter 43 of Subtitle D of
the Code; (v) all material amounts required to be paid by Seller to or pursuant
to each of the Plans on or before the Closing Date have been paid within the
time periods required by the Plans or by law; (vi) no Pension Plan has incurred
any "accumulated funding deficiency," as defined in Section 412 of the Code; and
(vii) no "reportable event" within the meaning of Title IV of ERISA has occurred
with respect to any Pension Plan subject thereto.
(c) Except as listed in Schedule 4.13, no Business Employees
currently participate, or have participated within the last five years, in any
Multiemployer Plan. Seller represents that the sale of the Business to Buyer
shall not cause a withdrawal to occur with respect to any Multiemployer Plan.
Seller represents that there are no unpaid withdrawal liability claims with
respect to Seller or any ERISA Affiliate. No liability under Title IV of ERISA
has been incurred by Seller that has not been satisfied in full, and no
condition exists that presents a risk to Seller of incurring a material
liability under Title IV other than liability for premiums due the Pension
Benefit Guaranty Corporation. The PBGC has not instituted proceedings to
terminate any Pension Plan in which Seller participates, and no condition exists
that presents a risk that such proceedings will be instituted.
(d) Each Welfare Plan that provides medical benefits to
Business Employees has been operated in compliance in all material respects with
the requirements of Sections 601 through 608 of ERISA and Section 4980B of the
Code ("COBRA"), relating to the continuation of coverage under certain
circumstances in which coverage would otherwise cease. Seller represents that it
will provide appropriate COBRA notices to each Business Employee whose medical
coverage under Seller's Welfare Plans would cease as a result of the sale of the
Business.
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(e) Any Plan designed to satisfy the requirements of Section
125, Section 401(k), Section 409, Section 501(c)(9), Section 4975(e)(7), and/or
Section 4980B of the Code, satisfies such section in all material respects.
(f) Except as indicated on Section 4.13, there is no audit
which in process by, or for which notification has been received from, the
Internal Revenue Service, the Department of Labor or the PBGC, with respect to
any Plan.
(g) Buyer shall have no liability with respect to any Plan
except as assumed pursuant to Section 2.2(a), and shall have no obligation with
respect to any Business Employee except as assumed pursuant to Section 2.2(a) or
as set forth in Section 7.4.
4.14 CERTAIN INTERESTS.
No Affiliate of Seller nor any officer or director of any
thereof has any material interest in any of the Purchased Assets or the Assumed
Liabilities.
4.15 NO BROKERS OR FINDERS.
No agent, broker, finder, or investment or commercial banker,
or other Person or firm engaged by or acting on behalf of Seller or any of its
Affiliates in connection with the negotiation, execution or performance of this
Agreement or the transactions contemplated by this Agreement, is or will be
entitled to any brokerage or finder's or similar fee or other commission as a
result of this Agreement or such transactions except Xxxxxxxxx Xxxxxx &
Xxxxxxxx, as to which Seller shall have full responsibility and Buyer shall have
no liability; PROVIDED that Seller shall have no responsibility or liability
with respect to any fees or commissions payable to Xxxxxxxxx Lufkin & Xxxxxxxx
or any of its Affiliates with respect to the High Yield Offering.
4.16 INVENTORY.
All items of Inventory are of a quantity and quality salable
or useable in the ordinary course of the Business. All such Inventory is valued
on the Seller's books at the lower of cost (calculated using the first-in,
first-out valuation method) or market and have net realizable market values in
the ordinary course of business of not less than their book value (less any
reserve for obsolete inventory).
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4.17 ENVIRONMENTAL COMPLIANCE.
Except as set forth in Schedule 4.17, (i) Seller has not, in
connection with the Business, generated, used, transported, treated, stored,
released or disposed of, or suffered or permitted anyone else to generate, use,
transport, treat, store, release or dispose of any Hazardous Substance in
material violation of any Law; (ii) there has not been any generation, use,
transportation, treatment, storage, release or disposal of any Hazardous
Substance in connection with the conduct of the Business which has created or
would reasonably be expected to create any liability under any Law or which
would require reporting to or notification of any Governmental Entity; (iii) no
asbestos, polychlorinated biphenyl or underground storage tank is contained in
or located at the Pueblo Facility or the West Xxxxxxxx Facility; and (iv) any
Hazardous Substance handled or dealt with in any way in connection with the
Business during Seller's ownership, has been and is being handled or dealt with
in all respects in material compliance with all applicable Laws.
4.18 LABOR CONTRACTS. Except for the 1992-1995 Agreement
Between Xxxxxx-Xxxxxx Corp., Division of X.X. Xxxxx, and International
Association of Machinists and Aerospace Workers, X.X.X.-X.X.X., Xxxxxxxx 00
(as amended and extended by Appendix "A" to such agreement) (the "Collective
Bargaining Agreement"), Seller is not a party to any collective bargaining
agreement relating to the Business and there is no election or proceeding
pending to recognize a union for any of Seller's employees relating to the
Business, in each case as of the date hereof. There are no unfair labor
practice or other administrative or court proceedings pending between Seller
and its employees and there has not occurred within the past two years any
material work stoppage or strike or any significant labor troubles at Seller's
facilities, in each case as of the date hereof.
4.19 OVERTIME, BACK WAGES, VACATION AND MINIMUM WAGES. No present or
former employee of the Business has a pending claim against Seller (whether
under federal or state law) under any employment agreement, or otherwise, on
account of or for (i) overtime pay, other than overtime pay for the current
payroll period, (ii) wages or salary for any period other than the current
payroll period, (iii) vacation or time off (or pay in lieu thereof), other
than that earned in respect of the previous twelve months, or (iv) any
violation of any statute, ordinance or regulation relating to minimum wages or
maximum hours of work.
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4.20 DISCRIMINATION, OCCUPATIONAL SAFETY AND OTHER
STATUTES AND REGULATIONS. As of the date hereof, no person has a pending
claim against Seller with respect to the Business arising out of any material
breach or violation of any statute, ordinance or regulation relating to
discrimination in employment or employment practices or occupational safety
and health standards (including without limitation, The Occupational Safety
and Health Act ("OSHA"), The Fair Labor Standards Act, Title VII of the Civil
Rights Act of 1964, or the Age Discrimination in Employment Act of 1967).
4.21 SUPPLIERS AND CUSTOMERS. Except as set forth on
Schedule 4.21, no supplier or customer which accounted for more than five
percent (5%) of the sales or purchases of the Business in both the fiscal
year ended March 31, 1996 and the nine months ended December 31, 1996, and no
other supplier or customer material to the Business (including, but not limited
to, any supplier who is the sole source of supply of any product or service to
the Business) has terminated or threatened to terminate its relationship with
Seller since April 1, 1995.
4.22 DISCLOSURE. Neither this Agreement (including the
Exhibits hereto) nor the financial statements set forth on Schedule 4.2 nor
any certificate or information furnished by Seller under this Agreement
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary in order to make the statements
contained herein or therein not misleading, in each case as of the date thereof.
4.23 WARRANTY AND PRODUCT LIABILITY CLAIMS. Except as
set forth on Schedule 4.23, now or at any time since February 12, 1992, Seller
has not received notice of, nor has any person asserted against it, any material
product liability or warranty claim relating to the Business or products or
services offered or sold by the Business.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents, warrants and agrees as follows:
5.1 ORGANIZATION AND RELATED MATTERS.
Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Buyer has all necessary
corporate power and
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authority to carry on its business as now being conducted. Buyer has the
necessary corporate power and authority to execute, deliver and perform this
Agreement and any related agreements to which it is a party.
5.2 AUTHORIZATION.
The execution, delivery and performance of this Agreement and
any related agreements by Buyer has been duly and validly authorized by the
Board of Directors of Buyer and by all other necessary corporate action on the
part of Buyer. This Agreement constitutes the legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws and equitable principles
relating to or limiting creditors' rights generally.
5.3 NO CONFLICTS.
The execution, delivery and performance of this Agreement and
any related agreements by Buyer will not violate the provisions of, or
constitute a breach or default whether upon lapse of time and/or the occurrence
of any act or event or otherwise under (a) the charter documents or bylaws of
Buyer, (b) any Law to which Buyer is subject or (c) any Contract to which Buyer
is a party that is material to the financial condition, results of operations or
conduct of the business of Buyer.
5.4 NO BROKERS OR FINDERS.
No agent, broker, finder or investment or commercial banker,
or other Person or firms engaged by or acting on behalf of Buyer or its
Affiliates in connection with the negotiation, execution or performance of this
Agreement or the transactions contemplated by this Agreement, is or will be
entitled to any broker's or finder's or similar fees or other commissions as a
result of this Agreement or such transactions.
5.5 LEGAL PROCEEDINGS.
There is no Order or Action pending or to the best knowledge
of Buyer, threatened against or affecting Buyer that individually or when
aggregated with one or more other Actions has or might reasonably be expected to
have a material adverse effect on Buyer's ability to perform this Agreement or
any other aspect of the transactions contemplated by this Agreement.
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5.6 WARN ACT.
Buyer is not planning or contemplating, and has not made or
taken, any decisions or actions concerning the Non-Retained Employees after the
Closing that would require the service of notice under the Worker Adjustment and
Retraining Act of 0000 (xxx "XXXX Xxx").
ARTICLE 6
PRE-CLOSING COVENANTS
6.1 ACCESS.
Subject to applicable Laws and fiduciary and privacy
obligations, Seller shall authorize and permit Buyer and its representatives to
have reasonable access during normal business hours, upon reasonable notice and
in such manner as will not unreasonably interfere with the conduct of its
businesses, to all of its properties, books, records, operating instructions and
procedures, Tax Returns and all other information, in each case to the extent
directly related to the Business, as Buyer may from time to time reasonably
request, and to make copies of such books, records and other documents at
Buyer's expense and to discuss the Business with the Division's officers,
employees, accountants and counsel as Buyer considers reasonably necessary for
the purposes of familiarizing itself with the Business, the Purchased Assets or
the Assumed Liabilities, obtaining any necessary Approvals of or Permits for the
transactions contemplated by this Agreement.
6.2 CONDUCT OF BUSINESS.
Seller shall not, without the prior consent in writing of
Buyer (which may not be unreasonably withheld):
(a) conduct the Business except in the ordinary course
consistent with past practices; or
(b) except as required by its terms, amend in any material
respect, terminate or renegotiate any Material Contract or default (or
take or omit to take any action that with or without the giving of
notice or passage of time or both, would constitute a default) in any
of its material obligations under any Material Contract; or
(c) terminate or fail to renew any existing material insurance
coverage; or
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(d) terminate, amend or fail to renew or preserve any material
Permits; or
(e) incur or agree to incur any obligation or liability
(absolute or contingent) directly related to the Business that
individually calls for payment by Seller of more than $50,000 in any
specific case or $250,000 in the aggregate; PROVIDED that
notwithstanding anything to the contrary contained herein, the parties
hereto expressly acknowledge and agree that Seller may purchase or
otherwise establish a fully insured medical plan (or take such other
action that, in Seller's sole discretion, will reduce and/or eliminate
Seller's exposure on and after the Closing Date with respect to medical
payments to persons who were Seller's employees on or before the
Closing Date) with respect to any of Seller's employees, in each case
and to the extent necessary or advisable in Seller's sole discretion;
or
(f) sell, transfer, mortgage, encumber or otherwise dispose of
any of the Purchased Assets and Assumed Liabilities, except (i) for
dispositions of property not in excess of $100,000, (ii) in the
ordinary course of business or (iii) as contemplated by this Agreement;
or
(g) dispose of or permit to lapse any material Intellectual
Property included in the Purchased Assets or the Licensed Trademarks or
any rights to such Intellectual Property's use, except to the extent
such disposal or lapse would be permitted by the terms of the Trademark
License if it were then in effect; or
(h) fail to maintain or repair any material Purchased Asset in
accordance with good and prudent maintenance and repair procedures; or
(i) agree to or make any binding commitment to take any action
that is or would be prohibited by this Section 6.2; or
(j) terminate or enter into any customer orders, purchase
agreements or distribution agreements that are or would be Material
Contracts.
6.3 NOTIFICATION OF CERTAIN MATTERS.
Seller shall give prompt notice to Buyer, and Buyer shall give
prompt notice to Seller, of (i) the occurrence, or failure to occur, of any
event that would be likely to cause any of its representations or warranties
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contained in this Agreement to be untrue or inaccurate in any material respect
at any time from the date of this Agreement to the Closing Date, (ii) any
failure on its part to comply with or satisfy, in any material respect, any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement and (iii) any event of which Seller obtains knowledge which has
had or might reasonably be expected to have a Material Adverse Effect, except
for changes affecting generally the material handling industry as a whole,
including but not limited to changes in or affecting interest rates, securities
markets, accounting principles, practices or conventions or applicable laws and
regulations (it being understood that Buyer assumes the risks associated with
changes of such type from and as of the date of this Agreement).
6.4 PERMITS AND APPROVALS; THIRD PARTY CONSENTS.
(a) Seller and Buyer shall cooperate and use their best
efforts through and including the Closing Date to obtain (and will immediately
prepare all registrations, filings and applications, requests and notices
preliminary to obtaining all) Approvals and Permits that may be necessary or
that may be reasonably requested by Buyer or Seller, as the case may be, to
consummate the transactions contemplated by this Agreement. Seller shall
cooperate with Buyer through and including the Closing Date in connection with
Buyer obtaining any requisite Permits that Buyer needs in order to conduct the
Business in the manner conducted by Seller as of the date hereof. Seller and
Buyer shall furnish each other such necessary information and reasonable
assistance as the other may request in connection with its preparation of
necessary filings or submissions under the provisions of such laws.
(b) To the extent that the Approval of a third party with
respect to any Material Contract or material Permit is required in connection
with the transactions contemplated by this Agreement, Seller shall use its best
efforts to obtain such Approval prior to the Closing Date and in the event that
any such Approval is not obtained, Seller shall cooperate with Buyer to ensure
that Buyer obtains the benefits of each such Material Contract or material
Permit.
6.5 PRESERVATION OF BUSINESS PRIOR TO CLOSING DATE.
During the period beginning on the date hereof and ending on
the Closing Date, Seller shall use its best efforts to preserve the Business and
to preserve the good-
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will of customers, suppliers and others having business relations with Seller
directly related to the Business.
6.6 BULK TRANSFER LAWS.
Prior to the Closing, Seller shall take all action necessary
to comply with the bulk sales laws of any applicable jurisdiction, including but
not limited to the timely publication, recordation, mailing and delivery of any
and all statements, notices and other documents required by such bulk sales laws
as are applicable.
6.7 BENEFIT PLANS.
Except as may be required by law or as may be necessary to
continue the qualified status of any Benefit Arrangement or Plan under Section
401 of the Code, Seller shall not adopt, terminate, amend, extend or otherwise
change any Benefit Arrangement or Plan affecting the Business Employees without
the prior consent in writing of Buyer, which consent may not be unreasonably
withheld or delayed, and Seller shall give Buyer prior written notice of
Seller's intention to take any such action required by law or necessary to
continue the qualified status of any Plans.
6.8 BACKLOG.
On the Closing Date, Seller shall deliver to Buyer a schedule
setting forth the backlog of sales or orders of the Business as of the Friday
that is at least 2 business days prior to the Closing Date. Seller has
previously delivered to Buyer a schedule setting forth the backlog of sales or
orders of the Business as of December 31, 1996.
ARTICLE 7
POST-CLOSING COVENANTS
7.1 NONCOMPETITION.
(a) RESTRICTIONS ON COMPETITIVE ACTIVITIES. Seller agrees
that, after the Closing, Buyer shall be entitled to the goodwill and going
concern value of the Business and to protect and preserve the same to the
maximum extent permitted by law. For these and other reasons and as an
inducement to Buyer to enter into this Agreement, Seller agrees that for a
period of five years after the Closing Date Seller will not, directly or
indirectly, for its own benefit or as agent for another, carry on or participate
in the ownership, management or control of, or be employed by, or consult for or
otherwise render services to, any other present or future business enterprise
that competes with
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Buyer in the conveyor idler manufacturing, sales and distribution business
anywhere in the world.
(b) EXCEPTIONS. Nothing contained herein shall limit the right
of Seller as an investor to hold and make investments in securities of any
corporation, limited partnership, business trust or other entity that is
registered on a national securities exchange or admitted to trading privileges
thereon or actively traded in a generally recognized over-the-counter market,
provided Seller's equity interest therein does not exceed 5% of the outstanding
voting shares or interests in such entity. Notwithstanding anything to the
contrary contained in this Section 7.1, Seller may engage in the field of, and
may be employed by, or consult for or otherwise render services to, any present
or future business enterprise that competes with Buyer in the conveyor idler
manufacturing, sales and distribution business anywhere in the world so long as
Seller's services are insubstantial with respect to such conveyor idler
manufacturing, sales and distribution business.
7.2 NONDISCLOSURE OF PROPRIETARY DATA.
After the Closing, neither Seller nor any of its
representatives shall, at any time, make use of, divulge or otherwise disclose,
directly or indirectly, any trade secret or other proprietary data directly
related to the Business that Seller or any representative of Seller may have
learned as an owner or a shareholder, employee, officer or director of the
Division or the Business. In addition, neither Seller nor any of its
representatives shall make use of, divulge or otherwise disclose, directly or
indirectly, to persons other than Buyer, any confidential information directly
related to the Business that may have been learned in any such capacity.
7.3 TAX COOPERATION.
(a) After the Closing, Seller shall, and shall cause its
Affiliates to, cooperate fully with Buyer in the preparation of all Tax Returns
and shall provide, or cause to be provided at Seller's sole cost and expense, to
Buyer any records and other information reasonably requested by Buyer in
connection therewith as well as access to, and the cooperation of, Seller's
accountants. After the Closing, Seller shall, and shall cause its Affiliates to,
cooperate fully with Buyer in connection with any Tax investigation, audit or
other proceeding relating to the Business. Any information obtained pursuant to
this Section 7.3(a) or pursuant to any other Section hereof providing for the
sharing of information or the review of any Tax Return or
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other Schedule relating to Taxes shall be subject to Section 11.9.
(b) After the Closing, Buyer shall, and shall cause its
Affiliates to, cooperate fully with Seller in the preparation of all Tax Returns
and shall provide, or cause to be provided at Buyer's sole cost and expense, to
Seller any records and other information reasonably requested by Seller in
connection therewith as well as access to, and the cooperation of, Buyer's
accountants. After the Closing, Buyer shall, and shall cause its Affiliates to,
cooperate fully with Seller in connection with any Tax investigation, audit or
other proceeding relating to the Business. Any information obtained pursuant to
this Section 7.3(b) or pursuant to any other Section hereof providing for the
sharing of information or the review of any Tax Return or other Schedule
relating to Taxes shall be subject to Section 11.9.
7.4 EMPLOYMENT MATTERS.
(a) PUEBLO NON-RETAINED EMPLOYEES; MEDIA EMPLOYEES. As of the
Closing Date, Buyer shall offer employment to each Pueblo Non-Retained Employee
and shall hold such offers open for no less than 5 business days after such
offers are made. Such offers shall provide each Pueblo Non-Retained Employee
with (A) employment at the Pueblo Facility, (B) compensation that is the same as
the compensation provided to such Pueblo Non-Retained Employee by Seller as of
the day before the Closing Date and (C) benefits substantially similar to those
provided as of the date hereof by Buyer to those of its employees who are
similarly situated. Seller shall assume, pay, discharge and be responsible for
(i) any and all liabilities (including, without limitation, any severance
payments but excluding those liabilities assumed by Buyer pursuant to Section
2.2(a) and Section 7.4(h)) with respect to each Pueblo Non-Retained Employee
who (x) Buyer offers employment to in accordance with the preceding two
sentences of this Section 7.4(a) and (y) expressly declines such offer of
employment and (ii) any and all liabilities (including any severance payments)
with respect to the Media Employees. Notwithstanding anything to the contrary
contained herein, in the event that Buyer offers employment to any of the Media
Employees before, on or within one year after the Closing Date, Buyer shall
promptly reimburse Seller for any and all costs, liabilities and expenses Seller
incurred or will incur in connection with the termination of such Media
Employees from and after the date hereof, including, without limitation, any and
all severance payments, medical coverage, any other compensation or benefits and
any other liabilities.
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(b) West Xxxxxxxx Non-Retained Employees. As of the Closing
Date, Buyer shall offer employment to each West Xxxxxxxx Non-Retained Employee
and shall hold such offer open for no less than 5 business days after such
offers are made. Such offers shall provide each West Xxxxxxxx Non-Retained
Employee with compensation that is the same as the compensation provided to such
West Xxxxxxxx Non-Retained Employee by Seller as of the day before the Closing
Date. Buyer shall assume, pay, discharge and be responsible for severance
payments under the Severance Plans and Seller's cost of providing medical
coverage for the 60 day period following the termination of employment by Seller
pursuant to the Welfare Plans arising on or after the Closing Date (in addition
to any liabilities assumed by Buyer pursuant to Section 2.2(a) and Section
7.4(h)) with respect to the West Xxxxxxxx Non-Retained Employees, regardless of
whether or not any of such West Xxxxxxxx Non-Retained Employees accept Buyer's
offer of employment; PROVIDED that Buyer shall assume, pay, discharge and be
responsible for Seller's cost of providing medical coverage to Xxxx Xxxxxx for
the 12 month period following the Closing Date.
Within 60 days after the Closing Date, Buyer shall elect
either to continue to employ or to terminate each West Xxxxxxxx Non-Retained
Employee. Each West Xxxxxxxx Non- Retained Employee who continues in Buyer's
employment more than 60 days after the Closing Date shall thereafter receive
benefits substantially similar to those provided by Buyer to those of its
employees who are similarly situated. Buyer shall assume, pay, discharge and be
responsible for Seller's cost of providing medical coverage to each West
Xxxxxxxx Non-Retained Employee who Buyer terminates within 60 days after the
Closing Date or who does not continue in Buyer's employment more than 60 days
after the Closing Date (each a "Buyer Terminated West Xxxxxxxx Employee") for
the 60 day period following Buyer's termination of such Buyer Terminated West
Xxxxxxxx Employee. Each such Buyer Terminated West Xxxxxxxx Employee shall
thereafter be eligible for continued medical coverage under Seller's group
medical plan pursuant to the provisions (and subject to the limitations) of
COBRA; provided that to the extent Buyer provides to any Buyer Terminated West
Xxxxxxxx Employee medical coverage substantially similar to that provided by
Buyer to those of its employees who are similarly situated, such Buyer
Terminated West Xxxxxxxx Employee shall, after termination, be eligible for
continuation of such medical coverage (and shall not be eligible for continued
medical coverage under Seller's group medical plan) pursuant to the provisions
(and subject to the limitations) of COBRA.
Schedule 7.4(b)(ii) sets forth Seller's monthly cost of
providing medical coverage to the West Xxxxxxxx Non-
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Retained Employees following the termination of employment by Seller on the
Closing Date of the West Xxxxxxxx Non-Retained Employees.
(c) Schedule 7.4(c) sets forth the severance payments and
related obligations arising under the Severance Plans as of March 31, 1997 with
respect to each Business Employee deemed located at the West Xxxxxxxx Facility
as of the date hereof.
(d) BUYER RESPONSIBILITY FOR POST-CLOSING COMPENSATION AND
BENEFITS. Except as otherwise provided in this Section 7.4, on and after the
Closing Date, Buyer shall be responsible for any and all compensation and
benefits of Pueblo Non-Retained Employees and West Xxxxxxxx Non-Retained
Employees arising from employment by Buyer on or after the Closing Date.
(e) WORKER ADJUSTMENT AND RETRAINING NOTIFICATION (WARN).
Buyer shall not, at any time prior to 90 days after the Closing Date, effectuate
a "plant closing" or "mass layoff" as those terms are defined in the WARN Act
affecting in whole or in part any facility, site of employment, operating unit
or employee of Seller without complying fully with the requirements of the WARN
Act.
(f) EMPLOYEE BENEFIT PLANS. On and after the Closing Date,
Buyer shall not assume, continue or maintain any Pension Plan or Benefit
Arrangement maintained by Seller prior to the Closing Date for Business
Employees. Subject to Section 7.4(a), Buyer shall establish or extend such
employee benefit plans and programs with respect to Pueblo Non-Retained
Employees and West Xxxxxxxx Non-Retained Employees hired by Buyer as it may deem
appropriate, but shall credit service with respect to eligibility and vesting
purposes under any such plan for employment of such a Pueblo Non-Retained
Employee or West Xxxxxxxx Non-Retained Employee, as the case may be, with
Seller.
(g) SAVINGS PLAN. In the event Buyer establishes or extends a
tax-qualified defined contribution plan with a 401(k) feature to any Pueblo
Non-Retained Employee or any West Xxxxxxxx Non-Retained Employee, Buyer shall
allow eligible rollover distributions from the X.X. Xxxxx Incorporated Profit
Sharing and Savings Plan with respect to such Pueblo Non-Retained Employee and
such West Xxxxxxxx Non-Retained Employee.
(h) BUYER LIABILITY FOR PRE-CLOSING EMPLOYMENT DECISIONS.
Notwithstanding anything to the contrary contained herein, Buyer shall be
responsible and liable for any claims, actions, payments or other liabilities
arising
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from or out of or in connection with any employment decisions made or actions
taken before, on or after the Closing Date by Buyer or any of its agents
respecting the Business Employees.
(i) COOPERATION. Without limiting the generality of Article 7
or any other provisions of this Agreement, Seller and Buyer agree to furnish
each other promptly with such information concerning employees and employee
benefit plans, arrangements and policies as is reasonably necessary and
appropriate to effect the transactions contemplated by this Article 7.
(j) NO THIRD PARTY BENEFICIARIES. Notwithstanding any possible
inference to the contrary, neither Seller nor Buyer intends for this Section 7.4
to create any rights or obligations except as between Seller and Buyer, and no
past, present or future employees of Seller or Buyer shall be treated as
third-party beneficiaries of this Section 7.4.
7.5 RETENTION AND ACCESS TO RECORDS.
After the Closing, Seller shall be permitted, upon reasonable
notice and during normal business hours, access to inspect and copy, at its
expense, the books and records relating to the Business prior to the Closing
Date and that, notwithstanding the sale of such books and records to Buyer,
Seller shall be permitted to retain copies of all such books and records if and
to the extent required by law. Buyer further agrees that, during the 7 years
following the Closing Date, it shall not destroy or abandon any of the material
books and records relating to the Business without the prior written consent of
Seller, such consent not to be unreasonably withheld or delayed.
7.6 TRADEMARK LICENSE.
Buyer shall only use the Licensed Trademarks in accordance
with the terms and provisions of the Trademark License.
7.7 LIABILITY FOR FAILURE TO CLOSE. Holdings shall
guarantee any monetary obligation incurred by Seller and due and owing to Buyer
pursuant to this Agreement that arises solely from Seller's failure to effect
the Closing in accordance with the terms of this Agreement.
7.8 ACCOUNTS RECEIVABLE.
(a) Buyer shall use its reasonable best efforts to collect all
of Seller's accounts receivable arising from
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or in connection with the Business on or before the Closing Date ("SELLER'S
ACCOUNTS"); PROVIDED that nothing herein shall obligate Buyer to take or
threaten to take legal action in order to collect any of Seller's Accounts. If
Buyer receives a payment from an account debtor for which there is (i) an
outstanding Seller's Account and (ii) an account receivable arising after the
Closing Date from Buyer's operation of the Business after the Closing Date, such
payment shall be applied to the invoice to which it relates. If it cannot
reasonably be determined to which invoice such payment relates, such payment
shall be applied to the oldest outstanding invoice of such account debtor not
disputed by such account debtor; provided that each invoice shall be deemed to
not be in dispute until such time as such account debtor shall have expressly
stated to Buyer that such invoice is in dispute. Buyer shall promptly deliver to
Seller written notification of any such dispute.
(b) Buyer hereby covenants and agrees that Buyer shall not
indicate to any account debtor that any payment with respect to any of Seller's
Accounts should be sent anywhere except where such payments were being sent
immediately prior the Closing Date. Buyer hereby covenants and agrees to remit
to Seller by wire transfer within three days of its receipt of same any and all
payments which Buyer receives in respect of any of Seller's Accounts.
(c) At any time on or after the date that is 45 days after the
Closing Date, Seller may request that Buyer deliver to Seller any and all
documents, instruments, bills of lading, invoices or other documents relating to
any of Seller's Accounts that remain outstanding at the time of such request.
Buyer hereby covenants and agrees that it will promptly deliver all such
documents, instruments, bills of lading, invoices and other documents upon its
receipt of such request. On and after the date which is 60 days after the
Closing Date, Seller may undertake any and all collection efforts with respect
to any of Seller's Accounts; PROVIDED that Seller shall give Buyer 10 days prior
written notice of its intent to institute an Action with respect to any Seller's
Account; PROVIDED FURTHER that such written notice may be delivered prior to the
date which is 60 days after the Closing Date. Upon Buyer's delivery to Seller of
all documents, instruments, bills of lading, invoices and other documents
relating to any of Seller's Accounts pursuant to Seller's request therefore,
Buyer shall not thereafter be required to pursue any additional collection
action with respect to such Seller's Account. Notwithstanding anything to the
contrary contained herein, any and all expenses and liabilities incurred by
Buyer pursuant to this Section 7.8 shall be for the account of Buyer.
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(d) Notwithstanding anything to the contrary contained herein,
Seller may take any and all action at any time with respect to any account
debtor that Seller reasonably believes will commence or be subject to any
voluntary or involuntarily bankruptcy proceedings or otherwise be subject to any
applicable insolvency or creditors' rights laws.
7.9 PRODUCT WARRANTY. Notwithstanding anything to the contrary
contained herein, (i) Buyer shall settle product warranty claims with respect to
products shipped on or before the Closing Date consistent with the practice of
Seller immediately prior to the Closing Date, (ii) Buyer shall not settle any
product warranty claims with respect to products shipped on or before the
Closing Date in an aggregate amount in excess of the amount reserved for product
warranty claims on the Closing Balance Sheet without Seller's prior written
approval of each such settlement over such aggregate amount and (iii) subject to
Buyer's compliance with this Section 7.9, Seller shall be responsible for
payment of all product warranty claims for products shipped before the Closing
Date in excess of the amount reserved for product warranty claims on the Closing
Balance Sheet.
ARTICLE 8
CONDITIONS OF PURCHASE
8.1 GENERAL CONDITIONS.
The obligations of the parties to effect the Closing shall be
subject to the following conditions unless waived in writing by Seller and
Buyer:
(a) NO ORDERS; LEGAL PROCEEDINGS. No Law or Order shall have
been enacted, entered, issued, promulgated or enforced by any Governmental
Entity, nor shall any Action have been instituted and remain pending by any
Governmental Entity at what would otherwise be the Closing Date, that prohibits
or restricts or would (if successful) prohibit or restrict the transactions
contemplated by this Agreement.
(b) APPROVALS. To the extent required by applicable Law, all
Permits and Approvals required to be obtained from any Governmental Entity
(other than any such Permits or Approvals specifically referred to in Section
8.1(c)), shall have been received or obtained on or prior to the Closing Date,
except for such Permits and Approvals which the failure to obtain would not have
a Material Adverse Effect.
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(c) COMPLIANCE WITH ISRA. Seller shall have received from the
New Jersey Department of Environmental Protection ("NJDEP") pursuant to the
Industrial Site Recovery Act, N.J.S.A. 13:1K-6 ET SEQ., the regulations
promulgated thereunder and any amending of successor legislation and regulations
("ISRA"), on or before the Closing Date, any of: (i) a Letter of
Non-Applicability based upon an accurate and complete application for the same;
(ii) a De Minimis Quantity Exemption approval based upon an accurate and
complete application for the same; (iii) a Negative Declaration approval or No
Further Action approval (as such terms are defined under ISRA) or other
comparable written determination of the NJDEP that Seller has satisfied the
requirements of ISRA with respect to the Leased Real Property and the
transactions contemplated by this Agreement; or (iv) a Remediation Agreement (as
such term is defined under ISRA) permitting the consummation of the transactions
contemplated by this Agreement and committing Seller to conduct and complete to
the satisfaction of the NJDEP Seller's obligations under ISRA with respect to
the Leased Real Property, including the establishment of a Remediation Funding
Source if required by the NJDEP pursuant to ISRA (as such term is defined under
ISRA). Seller shall have the sole authority to select the remedial actions
necessary for Seller to comply with ISRA with respect to the Leased Real
Property, provided that the NJDEP consents to such remedial actions. Anything in
the preceding sentence to the contrary notwithstanding, Seller shall not
implement at the Leased Real Property any remedial actions or any institutional
or engineering controls (as such terms are defined under ISRA) associated with
such remedial actions that would materially interfere with Buyer conducting the
Business as the Business is conducted immediately prior to the Closing Date.
(d) CONSENT OF LANDLORD WITH RESPECT TO LEASE. Seller shall
have received the consent of Dowel Associates, as landlord under the Lease, in
connection with the assignment of the Lease by Seller to Buyer pursuant to the
Lease Assignment.
8.2 CONDITIONS TO OBLIGATIONS OF BUYER.
The obligations of Buyer to effect the Closing shall be
subject to the satisfaction of the following conditions, except to the extent
waived in writing by Buyer:
(a) REPRESENTATIONS AND WARRANTIES AND COVENANTS OF SELLER.
The representations and warranties of Seller herein contained shall be true in
all material respects at the Closing Date with the same effect as though made at
such
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time; Seller shall have in all material respects performed all obligations and
complied with all covenants and conditions required by this Agreement to be
performed or complied with by it at or prior to the Closing Date; and Seller
shall have delivered to Buyer certificates of Seller in form and substance
satisfactory to Buyer, dated the Closing Date and signed by the President of
Seller to such effect.
(b) NO MATERIAL ADVERSE EFFECT. There shall not have been any
material adverse change in or affecting the Business subsequent to December 31,
1996 which constitutes a Material Adverse Effect, except for changes affecting
generally the material handling industry as a whole, including but not limited
to changes in or affecting interest rates, securities markets, accounting
principles, practices or conventions or applicable laws and regulations (it
being understood that Buyer assumes the risks associated with changes of such
type from and as of the date of this Agreement).
(c) CONSENTS. Seller shall have obtained and provided to Buyer
evidence of the receipt of all Approvals and Permits listed on Schedule 4.6 and
Schedule 4.11.
(d) BUYER'S FINANCING. Buyer shall have completed the High
Yield Offering.
(e) ENVIRONMENTAL REPORTS AND CLEARANCES. Buyer shall have
received Phase I environmental site assessment reports dated October 30, 1991
with respect to the Owned Real Property from McLaren/Xxxx Environmental
Engineering Corporation. Buyer and its consultants shall have received access to
the Owned Real Property, the Leased Real Property and Seller's employees during
normal business hours upon 2 days prior written notice to Seller to take samples
of soil and groundwater, and to otherwise reasonably investigate potential
environmental liabilities relating to the Owned Real Property and the Business.
Seller shall have obtained and furnished to Buyer any and all environmental
approvals or clearances, if any, required in connection with Seller's
disposition of the Purchased Assets other than with respect to Seller's
disposition of the Lease and the Leased Real Property.
8.3 CONDITIONS TO OBLIGATIONS OF SELLER.
The obligations of Seller to effect the Closing shall be
subject to the satisfaction of the following conditions, except to the extent
waived in writing by Seller:
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(a) REPRESENTATIONS AND WARRANTIES AND COVENANTS OF BUYER. The
representations and warranties of Buyer herein contained shall be true in all
material respects at the Closing Date with the same effect as though made at
such time; Buyer shall have in all material respects performed all obligations
and complied with all covenants and conditions required by this Agreement to be
performed or complied with by it at or prior to the Closing Date, and Buyer
shall have delivered to Seller certificates of Buyer in form and substance
satisfactory to Seller, dated the Closing Date and signed by the chief executive
officer and chief financial officer of Buyer, to such effect.
(b) CONSENTS. Seller shall have obtained the Approvals set
forth on Schedule 4.11.
ARTICLE 9
TERMINATION OF OBLIGATIONS; SURVIVAL
9.1 TERMINATION OF AGREEMENT.
Anything herein to the contrary notwithstanding, this
Agreement and the transactions contemplated by this Agreement shall terminate at
the close of business on the earlier to occur of (i) three days after Buyer's
receipt of the proceeds (net of fees, commissions and underwriting discounts) of
the High Yield Offering and (ii) April 7, 1997, unless extended by mutual
consent in writing of Seller and Buyer and may otherwise be terminated at any
time before the Closing as follows and in no other manner:
(a) MUTUAL CONSENT. By mutual consent in writing of Seller and
Buyer.
(b) CONDITIONS TO BUYER'S PERFORMANCE NOT MET. By Buyer upon
written notice to Seller if any event occurs which would render impossible the
satisfaction of one or more conditions to the obligations of Buyer to consummate
the transactions contemplated by this Agreement as set forth in Section 8.1 or
Section 8.2.
(c) CONDITIONS TO SELLER'S PERFORMANCE NOT MET. By Seller upon
written notice to Buyer if any event occurs which would render impossible the
satisfaction of one or more conditions to the obligation of Seller to consummate
the transactions contemplated by this Agreement as set forth in Section 8.1 or
Section 8.3.
(d) MATERIAL BREACH. By Buyer or Seller if there has been a
material misrepresentation or material breach on
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the part of the other party in its representations, warranties or covenants
set forth herein; PROVIDED, HOWEVER, that if such breach or misrepresentation is
susceptible to cure, Seller or Buyer, as the case may be, shall have 10 business
days after receipt of notice from the other party of its intention to terminate
this Agreement pursuant to this Section 9.1(e) if such misrepresentation or
breach continues in which to cure such breach or misrepresentation before the
other party may so terminate this Agreement.
9.2 EFFECT OF TERMINATION.
In the event that this Agreement shall be terminated pursuant
to Section 9.1, all further obligations of the parties under this Agreement
shall terminate without further liability of any party to another; provided that
the obligations of the parties contained in Section 11.9 and Section 11.12 shall
survive any such termination. A termination under Section 9.1 shall not relieve
any party of any liability for a breach of, or for any misrepresentation under
this Agreement, or be deemed to constitute a waiver of any available remedy
(including specific performance if available) for any such breach or
misrepresentation.
9.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties contained in or made
pursuant to this Agreement shall expire on the second anniversary of the Closing
except that if a claim or notice is given under Article 10 with respect to any
representation or warranty prior to the applicable expiration date, such
representation or warranty shall continue indefinitely until the applicable
claim is finally resolved; PROVIDED that Seller's representations and warranties
contained in Sections 4.13, 4.17, 4.18, 4.19 and 4.20 shall survive
indefinitely.
ARTICLE 10
INDEMNIFICATION
10.1 OBLIGATIONS OF SELLER.
As of the Closing, the Selling Parties agree to indemnify and
hold harmless Buyer, and its directors, officers, employees, affiliates, agents
and assigns from and against any and all Losses of Buyer, directly or
indirectly, as a result of, or based upon or arising from:
(a) any material breach or nonperformance of any of the
representations, warranties, covenants or agreements
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made by Seller in or pursuant to this Agreement, the Pueblo Lease, the Trademark
License, the Lease Assignment, the Side Letter, the Use Agreement (if any) or
the Assumption Agreement; or
(b) any other matter as to which Seller in other provisions of
this Agreement, the Pueblo Lease, the Trademark License, the Lease Assignment,
the Side Letter, the Use Agreement (if any) or the Assumption Agreement has
agreed to indemnify Buyer; or
(c) any Excluded Liability or other obligation of Seller or
any of its Affiliates not assumed by Buyer pursuant to (i) Section 2.2(a) or
(ii) the Side Letter; or
(d) the second item set forth in Schedule 4.17.
10.2 OBLIGATIONS OF BUYER.
As of the Closing, Buyer agrees to indemnify and hold harmless
Seller and its respective directors, officers, employees, affiliates, agents and
assigns from and against any Losses of Seller, directly or indirectly, as a
result of, or based upon or arising from:
(a) any material breach or nonperformance of any of the
representations, warranties, covenants or agreements made by Buyer in or
pursuant to this Agreement, the Pueblo Lease, the Trademark License, the Lease
Assignment, the Use Agreement (if any), the Side Letter or the Assumption
Agreement; or
(b) any other matter as to which Buyer in other provisions of
this Agreement, the Pueblo Lease, the Trademark License, the Lease Assignment,
the Use Agreement (if any), the Side Letter or the Assumption Agreement has
agreed to indemnify Seller; or
(c) any liability or obligation assumed by Buyer pursuant to
Section 2.2(a), including, without limitation, obligations assumed or incurred
pursuant to the Assumption Agreement or the Side Letter.
10.3 PROCEDURE.
(a) NOTICE OF THIRD PARTY CLAIMS. Any party seeking
indemnification of any Loss or potential Loss arising from a claim asserted by a
third party (including but not limited to a notice of Tax audit or request to
waive or extend a statute of limitations applicable to any Tax) shall give
written notice to the party from whom indemnification is sought. Written notice
to the Indemnifying Party
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of the existence of a third-party claim shall be given by the Indemnified Party
within 20 days after its receipt of a written assertion of liability from the
third party, including in the case of tax matters, written notice of any tax
audit that might result in such a claim. The Indemnified Party shall have no
obligation to provide written notice of the existence of an Indemnifiable Claim
to the Indemnifying Party where the third party does not clearly and
unambiguously assert liability in writing and the Indemnified Party shall not be
foreclosed by any failure to provide timely notice of the existence of a third
party claim to the Indemnifying Party except to the extent that the Indemnifying
Party incurs an out-of-pocket expense or otherwise has been materially
prejudiced as a direct result of such delay.
(b) DEFENSE. At the request of the Indemnified Party, the
Indemnifying Party shall promptly assume the costs of defense of an
Indemnifiable Claim. The Indemnifying Party shall retain experienced counsel
reasonably satisfactory to the Indemnified Party and thereafter shall control
defense of the claim. Notwithstanding the foregoing, the Indemnified Party shall
have the right to retain counsel of its choice and control the defense of the
Indemnifiable Claim under any of the following circumstances:
(i) The Indemnifying Party fails to assume the
defense of an Indemnifiable Claim within five days after receiving
written notice of the existence of the claim; or
(ii) The Indemnifying Party agrees to assume the
defense of an Indemnifiable Claim but either reserves its rights to
challenge, or does not upon request acknowledge in writing, its
obligation to indemnify the party seeking indemnity with respect to the
Indemnifiable Claim; or
(iii) The persons against whom the Indemnifiable
Claim shall have been brought, asserted or threatened (including any
impleaded parties) include both the Indemnified Party and the
Indemnifying Party and the Indemnified Party is advised by counsel that
there may be one or more legal defenses available to the Indemnified
Party that are different from or additional to those available to the
Indemnifying Party.
If the Indemnifying Party does not assume such defense or the Indemnified Party
has the right to control the defense of the Indemnifiable Claim, the Indemnified
Party may compromise or settle the Indemnifiable Claim on behalf of
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and for the account and risk of the Indemnifying Party, who shall be bound by
the result. In all cases, the party without the right to control the defense of
the Indemnifiable Claim may participate in the defense at its own expense. The
parties shall cooperate in the defense of all third party claims which may give
rise to Indemnifiable Claims hereunder. In connection with the defense of any
claim, each party shall make available to the party controlling such defense,
any books, records or other documents within its control that are reasonably
requested in the course of such defense.
(c) SETTLEMENT LIMITATIONS. Notwithstanding anything in this
Section 10.3 to the contrary, the Indemnifying Party shall not, without the
written consent of the Indemnified Party, settle or compromise any Indemni-
fiable Claim or permit a default or consent to entry of any judgment unless the
claimant provides to the Indemnified Party an unqualified release from all
liability in respect of the Claim. Notwithstanding the foregoing, if a
settlement offer solely for money damages is made by the applicable third party
claimant, and the Indemnifying Party notifies the Indemnified Party in writing
of the Indemnifying Party's willingness to accept the settlement offer and pay
the amount called for by such offer, and the Indemnified Party declines to
accept such offer, the Indemnified Party may continue to contest such Claim,
free of any participation by the Indemnifying Party, and the amount of any
ultimate liability with respect to such Indemnifiable Claim that the
Indemnifying Party has an obligation to pay hereunder shall be limited to the
lesser of (A) the amount of the settlement offer that the Indemnified Party
declined to accept plus the Losses of the Indemnified Party relating to such
Indemnifiable Claim through the date of its rejection of the settlement offer or
(B) the aggregate Losses of the Indemnified Party with respect to such
Indemnifiable Claim. If the Indemnifying Party makes any payment on any
Indemnifiable Claim, the Indemnifying Party shall be subrogated, to the extent
of such payment, to all rights and remedies of the Indemnified Party to any
insurance benefits or other claims of the Indemnified Party with respect to such
Indemnifiable Claim.
10.4 LIMITATIONS ON INDEMNIFICATION.
No party shall be required to indemnify any other Person under
this Article 10 unless and until all such claims for which damages are
recoverable hereunder by Buyer or Seller, as the case may be, exceed $100,000 in
the aggregate (the "Deductible"); PROVIDED, HOWEVER, that Buyer or Seller, as
the case may be, shall be liable only for the amount by which all such
recoverable damages exceed the
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Deductible. Any Indemnifiable Claim with respect to any breach or nonperformance
by either party of a representation, warranty, covenant or agreement shall be
limited to the amount of actual damages sustained by the Indemnified Party by
reason of such breach or nonperformance, less (i) the dollar amount of any
permanent tax benefit on a present value basis (with any tax benefit in future
taxable years to be discounted based on a rate of 10% per annum) to Buyer's
consolidated tax group (based on an assumed ordinary composite tax rate of 40%)
by reason of such Losses and (ii) the dollar amount of any insurance proceeds
receivable by Buyer with respect to such Losses.
10.5 SURVIVAL.
This indemnification shall survive the Closing and shall
remain in effect for a period of two years after the date of Closing; PROVIDED
that Seller's obligation to indemnify Buyer pursuant to Section 10.1(a) (i) with
respect to the representations and warranties contained in Sections 4.13, 4.17,
4.18, 4.19 and 4.20 shall survive indefinitely, (ii) with respect to Seller
retaining liability (a) for Taxes payable with respect to the Business for any
period ending on or before the Closing Date pursuant to Section 2.2(b)(iii)
shall survive until the end of the applicable statutes of limitations (including
applicable extensions) and (b) pursuant to Section 2.2(b)(vii) and Section
2.2(b)(viii) shall survive indefinitely; PROVIDED FURTHER that Buyer's
obligation to indemnify Seller pursuant to Section 10.2 with respect to the
liabilities which Buyer has assumed and/or agreed to pay, discharge and be
responsible for pursuant to Section 7.4 and any other agreement of Buyer
pursuant to Section 7.4 shall survive indefinitely. Any matter as to which a
claim has been asserted by notice to the other party that is pending or
unresolved at the end of any limitation period shall continue to be covered by
this Article 10 until such matter is finally terminated or otherwise resolved
subject to applicable statutes of limitations by the parties and settled under
this Agreement or by a court of competent jurisdiction and any amounts payable
hereunder are finally determined and paid.
10.6 NOT EXCLUSIVE REMEDY.
This Article 10 shall not be deemed to preclude or otherwise
limit in any way the exercise of any other rights or pursuit of other remedies
for the breach of this Agreement or with respect to any misrepresentation.
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10.7 OFFSET.
(a) If any matter as to which Seller may be able to assert a
claim hereunder is pending or unresolved at the time any payment is due from
Seller to Buyer under this Agreement, Seller shall have the right, in addition
to other rights and remedies (whether under this Agreement or applicable Law),
to withhold from such payment an amount equal to the amount of the claim
(provided it has been or is then asserted in writing against Buyer in accordance
with the provisions hereof) until such matters are resolved. If it is finally
determined that such claims are covered by this Article, the amount of such
claims may be offset against the retained payments and the remainder, if any,
shall be delivered to Buyer pursuant to this Agreement together with interest on
such remainder payable from the date such remainder was withheld until paid at
the rate of 10% per annum.
(b) If any matter as to which Buyer may be able to assert a
claim hereunder is pending or unresolved at the time any payment is due from
Buyer to Seller under this Agreement, Buyer shall have the right, in addition to
other rights and remedies (whether under this Agreement or applicable Law), to
withhold from such payment an amount equal to the amount of the claim (provided
it has been or is then asserted in writing against Seller in accordance with the
provisions hereof) until such matters are resolved. If it is finally determined
that such claims are covered by this Article, the amount of such claims may be
offset against the retained payments and the remainder, if any, shall be
delivered to Seller pursuant to this Agreement together with interest on such
remainder payable from the date such remainder was withheld until paid at the
rate of 10% per annum.
ARTICLE 11
GENERAL
11.1 AMENDMENTS; WAIVERS.
This Agreement and any schedule or exhibit attached hereto may
be amended only by agreement in writing of Seller, Holdings and Buyer. No waiver
of any provision nor consent to any exception to the terms of this Agreement or
any agreement contemplated hereby shall be effective unless in writing and
signed by the party to be bound and then only to the specific purpose, extent
and instance so provided.
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11.2 SCHEDULES; EXHIBITS; INTEGRATION.
Each schedule and exhibit delivered pursuant to the terms of
this Agreement shall be in writing and shall constitute a part of this
Agreement, although schedules need not be attached to each copy of this
Agreement. This Agreement, together with such schedules and exhibits,
constitutes the entire agreement among the parties pertaining to the subject
matter hereof and supersedes all prior agreements and understandings of the
parties in connection therewith. Without limiting the effect of the foregoing
provisions of this Section 11.2, except as expressly set forth in Article 4 and
Article 5, neither of the parties is making or shall be deemed to have made any
representation or warranty of any kind, either express or implied, including,
without limitation, any representation or warranty with respect to any
information provided to Buyer by Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation.
11.3 BEST EFFORTS; FURTHER ASSURANCES.
(a) COMMITMENT TO BEST EFFORTS. Subject to the rights of
Seller or Buyer, as the case may be, under Section 9.1, (i) such party shall use
its best efforts to cause all conditions to its obligations hereunder to be
timely satisfied and to perform and fulfill all obligations on its part to be
performed and fulfilled under this Agreement, to the end that the transactions
contemplated by this Agreement shall be effected substantially in accordance
with its terms as soon as reasonably practicable, (ii) such party shall
cooperate with the other party in such actions and in securing requisite
Approvals and (iii) such party shall execute and deliver such further documents
and take such other actions as may be necessary or appropriate to consummate or
implement the transactions contemplated hereby or to evidence such events or
matters.
(b) LIMITATION. As used in this Agreement, the term "best
efforts" shall not mean efforts which require the performing party to do any act
that is unreasonable under the circumstances, to make any capital contribution
or to expend any funds other than in payment of reasonable out-of-pocket
expenses incurred in satisfying obligations hereunder, including but not limited
to the fees, expenses and disbursements of its accountants, actuaries, counsel
and other professional advisers.
11.4 GOVERNING LAW.
This Agreement and the legal relations between the parties
shall be governed by and construed in accordance with the laws of the State of
New York without regard to
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conflicts of law doctrines, except to the extent that certain matters are
preempted by federal law or are governed by the law of the jurisdiction of
incorporation of the respective parties.
11.5 NO ASSIGNMENT.
Neither this Agreement (nor related agreements pursuant to
this Agreement) nor any rights or obligations under any of them are assignable.
11.6 HEADINGS.
The descriptive headings of the articles, sections and
subsections of this Agreement are for convenience only and do not constitute a
part of this Agreement.
11.7 COUNTERPARTS.
This Agreement and any amendment hereto or any other agreement
(or document) delivered pursuant hereto may be executed in one or more
counterparts and by different parties in separate counterparts. All of such
counterparts shall constitute one and the same agreement (or other document) and
shall become effective (unless otherwise therein provided) when one or more
counterparts have been signed by each party and delivered to the other party.
11.8 PUBLICITY AND REPORTS.
Seller and Buyer shall coordinate all publicity relating to
the transactions contemplated by this Agreement, and no party shall issue any
press release, publicity statement or other public notice relating to this
Agreement, or the transactions contemplated by this Agreement, without
consulting with the other party except to the extent that a particular action is
required by applicable Law.
11.9 CONFIDENTIALITY.
All information disclosed by any party (or its
representatives) whether before or after the date hereof, in connection with the
transactions contemplated by, or the discussions and negotiations preceding,
this Agreement to any other party (or its representatives) shall be kept
confidential by such other party and its representatives and shall not be used
by any such Persons other than as contemplated by this Agreement, except to the
extent that such information (i) was known by the recipient when received, (ii)
it is or hereafter becomes lawfully obtainable from other sources, (iii) is
necessary or appropriate to disclose to a Governmental Entity having
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jurisdiction over the parties, (iv) as may otherwise be required by Law or (v)
to the extent such duty as to confidentiality is waived in writing by the other
party. If this Agreement is terminated in accordance with its terms, each party
shall use all reasonable efforts to return upon written request from the other
party all documents (and reproductions thereof) received by it or its
representatives from such other party (and, in the case of reproductions, all
such reproductions made by the receiving party) that include information not
within the exceptions contained in the first sentence of this Section 11.9,
unless the recipients provide assurances reasonably satisfactory to the
requesting party that such documents have been destroyed.
11.10 PARTIES IN INTEREST.
This Agreement shall be binding upon and inure to the benefit
of each party, and nothing in this Agreement, express or implied, is intended to
confer upon any other person any rights or remedies of any nature whatsoever
under or by reason of this Agreement. Nothing in this Agreement is intended to
relieve or discharge the obligation of any third person to, or to confer any
right of subrogation or action over or against, any party to this Agreement.
11.11 NOTICES.
Any notice or other communication hereunder must be given in
writing and either (i) delivered in person, (ii) transmitted by facsimile or
(iii) mailed by certified or registered mail, postage prepaid, as follows:
IF TO SELLER, ADDRESSED TO:
X.X. Xxxxx, Incorporated
c/o Process Technology Holdings, Inc.
Xxxx Xxxxxx Xxx 0000
0000 Xxxxxxxx Xxxx Xxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
WITH A COPY TO:
O'Melveny & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Drake S. Tempest, Esq.
Facsimile: (000) 000-0000
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IF TO HOLDINGS, ADDRESSED TO:
Process Technology Holdings, Inc.
Xxxx Xxxxxx Xxx 0000
0000 Xxxxxxxx Xxxx Xxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
WITH A COPY TO:
O'Melveny & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Drake S. Tempest, Esq.
Facsimile: (000) 000-0000
IF TO BUYER, ADDRESSED TO:
Continental Conveyor & Equipment Company
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxx Xxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
WITH A COPY TO:
Squire, Xxxxxxx & Xxxxxxx L.L.P.
0000 Xxx Xxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address or to such other person as such party shall have last
designated by such notice to the other parties. Each such notice or other
communication shall be effective (i) if given by facsimile, when transmitted to
the applicable number so specified in (or pursuant to) this Section 11.11 and an
appropriate answerback is received, (ii) if given by mail, three days after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iii) if given by any other means, when actually
delivered at such address.
11.12 EXPENSES.
--------
(a) Except as expressly provided to the contrary in this
Section 11.12 or elsewhere in this Agreement, each of Seller and Buyer shall pay
its own expenses incident to the negotiation, preparation and performance of
this
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Agreement and the transactions contemplated hereby, including but not limited to
the fees, expenses and disbursements of its investment bankers, accountants and
counsel and of securing third party consents and approvals required to be
obtained by it except as otherwise expressly provided in this Section 11.12.
(b) Seller shall pay (i) any documentary transfer tax, real
property transfer or gains tax, and any income, franchise or revenue tax or
excise tax (and any surtax thereon) due in connection with the consummation of
the transactions contemplated by this Agreement and (ii) 50% percent of all
other closing costs with respect to transfers of specified types of properties.
(c) Buyer shall pay (i) all document recording fees and
charges, (ii) 50% percent of the aggregate closing costs referred to in Section
11.12(b)(ii) and (iii) all costs, fees and expenses of Buyer and E & Y in
connection with the preparation of Buyer's Signing Financials.
11.13 REMEDIES; WAIVER.
Except to the extent this Section 11.13 is inconsistent with
any other provision in this Agreement or applicable law, all rights and remedies
existing under this Agreement and any related agreements or documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available
under applicable Law. No failure on the part of any party to exercise or delay
in exercising any right hereunder shall be deemed a waiver thereof, nor shall
any single or partial exercise preclude any further or other exercise of such or
any other right.
11.14 KNOWLEDGE CONVENTION.
Whenever any statement herein or in any schedule, exhibit,
certificate or other documents delivered to any party pursuant to this Agreement
is made "to the knowledge" or "to the best knowledge" or words of similar intent
or effect of any party or its representative, such person shall make such
statement only after conducting a diligent investigation of the subject matter
thereof, and each statement shall be deemed to include a representation that
such investigation has been conducted.
11.15 REPRESENTATION BY COUNSEL; INTERPRETATION.
Each party acknowledges that such party has been represented
by counsel in connection with this Agreement and the transactions contemplated
by this Agreement.
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Accordingly, any rule of Law, or any legal decision that would require
interpretation of any claimed ambiguities in this Agreement against the party
that drafted it has no application and is expressly waived. The provisions of
this Agreement shall be interpreted in a reasonable manner to effect the intent
of the parties.
11.16 NO CONSEQUENTIAL DAMAGES.
Notwithstanding anything to the contrary elsewhere in this
Agreement, no party (or its Affiliates) shall, in any event, be liable to the
other party (or its Affiliates) for any consequential damages, including, but
not limited to, loss of revenue or income, cost of capital, or loss of business
reputation or opportunity relating to the breach or alleged breach of this
Agreement.
11.17 SUBMISSION TO JURISDICTION.
Any Action with respect to this Agreement or any related
agreement may be brought in the courts of the State of New York, the State of
Ohio or of the United States of America for the Southern District of New York or
the Northern District of Ohio, and each party hereby accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of
those courts. Each party hereby irrevocably waives any objection, including,
without limitation, any objection to the laying of venue or based on the grounds
of FORUM NON CONVENIENS, which it may now or hereafter have to the bringing of
any Action in those jurisdictions.
11.18 WAIVER OF JURY TRIAL.
EACH PARTY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION
TO ENFORCE OR DEFEND ANY RIGHT UNDER THIS AGREEMENT, ANY RELATED AGREEMENT OR
ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED, OR WHICH IN THE
FUTURE MAY BE DELIVERED IN CONNECTION WITH THIS AGREEMENT OR ANY RELATED
AGREEMENT AND AGREES THAT ANY ACTION SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
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[Intentionally Left Blank]
56
62
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officers as of the day and year
first above written.
X.X. XXXXX, INCORPORATED
By: /s/ [ILLEGIBLE]
----------------------------
Its:
----------------------------
PROCESS TECHNOLOGY HOLDINGS, INC.
By: /s/ [ILLEGIBLE]
----------------------------
Its:
----------------------------
CONTINENTAL CONVEYOR &
EQUIPMENT COMPANY
By: /s/ X. X. Xxxxxx
----------------------------
Its: Vice President
----------------------------
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