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EXHIBIT 2.a
ACQUISITION AGREEMENT
by and among
MASCOTECH, INC.
MSX INTERNATIONAL, INC.
and
ASG HOLDINGS INC.
Dated as of November 12, 1996
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ACQUISITION AGREEMENT
ACQUISITION AGREEMENT, dated as of November 12, 1996, among MASCOTECH,
INC., a Delaware corporation ("MascoTech"), MSX INTERNATIONAL, INC., a Michigan
corporation and a wholly-owned subsidiary of MascoTech ("MSX"; MSX and
MascoTech, each a "Seller" and collectively, the "Sellers") and ASG HOLDINGS
INC., a Delaware corporation (the "Purchaser"). Capitalized terms not otherwise
defined herein have the meanings set forth in Section 17.01.
WHEREAS, MSX is engaged in the business of providing certain
engineering, design, marketing and training services, primarily to automobile
manufacturers and suppliers in the United States (the "North American
Operations");
WHEREAS, MascoTech Limited, a corporation organized under the laws of
England and a wholly-owned subsidiary of MascoTech ("Limited"), is engaged in,
together with its Subsidiaries, the business of providing certain engineering
services primarily to automobile manufacturers and suppliers in Europe (the
"European Operations"; the European Operations and the North American
Operations, without giving effect to the consummation of the APX Acquisition (as
defined below), being hereinafter collectively referred to as the "Business");
WHEREAS, MSX, pursuant to the terms of the APX Business Purchase
Agreement, dated as of November 6, 1996 (the "APX Purchase Agreement"), among,
inter alia, MSX, the TAD-Sellers, APX International (Europe), Ltd. and TAD
Resources International Inc., acquired substantially all the assets of the
TAD-Sellers (exclusive of those owned by TAD-Ltd.) pertaining to the APX
Business (as defined in the APX Purchase Agreement), and acquired the right to
acquire (i) certain assets of TAD-Ltd. used in the APX Business (the "APX
Limited Assets"), (ii) all the issued and outstanding shares of capital stock of
APX International GmbH, a German Company ("APX-Germany," and its shares of
capital stock being "APX-Germany Stock") and (iii) all the issued and
outstanding quotas of APX International do Brazil, Ltd., a Brazilian limited
company ("APX-Brazil", and its shares of quotas being "APX-Brazil Stock")
(collectively, the "APX Acquisition");
WHEREAS, the Sellers desire to sell, transfer and assign to Purchaser,
and Purchaser desires to purchase and acquire from the Sellers, directly or
indirectly through one or more Subsidiaries, all of the assets of MSX used in
the Business, except for the Excluded Assets, (and to assume certain liabilities
as hereinafter set forth);
WHEREAS, MascoTech desires to sell, transfer and assign to Purchaser,
and Purchaser desires to purchase and acquire from MascoTech, all of the right,
title and interest of MascoTech in and to one hundred (100) Ordinary Shares, par
value L.1.0 per share, of Limited (the "Limited Stock"), constituting all of the
issued and outstanding shares of capital stock of Limited;
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WHEREAS, MSX desires to sell, transfer and assign to Purchaser, and
Purchaser desires to purchase and acquire from MSX, all of the right, title and
interest of MSX in and to the APX Continuing Business and the APX-Brazil Stock;
WHEREAS, the parties hereto desire to make certain representations,
warranties and agreements in connection with the above-described transactions
and to prescribe certain conditions to the consummation thereof.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I
THE STOCK PURCHASES
1.01 Purchase and Sale. On the terms and subject to the conditions
set forth in this Agreement, (x) MascoTech shall sell to Purchaser, and
Purchaser shall purchase from MascoTech, either directly or indirectly through
one or more Subsidiaries of Purchaser, all of the right, title and interest of
MascoTech in and to the Limited Stock and (y) MSX shall sell to Purchaser, and
Purchaser shall purchase from MSX, either directly or indirectly through one or
more Subsidiaries of Purchaser, all of the right, title and interest of MSX in
and to the APX-Brazil Stock at the Closing for the consideration specified in
Section 3.01.
1.02 Closing. The Closing will take place as provided in Section
3.03. At the Closing, Purchaser shall pay the consideration specified in
Section 3.01 and, simultaneously, MascoTech and MSX, respectively, shall assign
and transfer to Purchaser good and valid title in and to the Limited Stock and
the APX-Brazil Stock.
1.03 APX Closing. The parties hereto acknowledge that, as of the
Effective Date, the Sellers, pursuant to the APX Purchase Agreement, have not
consummated the purchase of the APX Limited Assets, the APX-Germany Stock and
the APX-Brazil Stock. Accordingly, any transfer of any such assets or capital
stock contemplated pursuant to the terms of this Agreement shall be subject to
the consummation of their transfer to the Sellers pursuant to and in accordance
with the terms of the APX Purchase Agreement.
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ARTICLE II
ASSETS PURCHASED; LIABILITIES ASSUMED
2.01 Assets.
(a) MSX Assets Transferred. On the terms and subject to the conditions set
forth in this Agreement, at the Closing MSX shall sell, transfer, convey, assign
and deliver to Purchaser, and Purchaser shall purchase from MSX, either directly
or indirectly through one or more Subsidiaries of Purchaser, all of MSX's right,
title and interest in, to and under all MSX Assets, free and clear of all Liens
other than Permitted Liens, for the consideration specified in Section 3.01.
The term "MSX Assets" means, collectively, all the business, properties, assets
and rights of MSX of whatever kind or nature, real or personal, tangible or
intangible, other than the APX Assets and the Excluded Assets, owned by MSX on
the Closing Date and used in the Business including, without limitation:
(i) Real Property Leases. Each lease, sublease or license of real
property described in Section 2.01(a)(i) of the Disclosure Schedule as to which
MSX is the lessee, sublessee or sublessor, together with any options to purchase
the underlying property and leasehold improvements thereon, and in each case all
other rights, subleases, licenses, permits, deposits and profits appurtenant to
or related to such lease or sublease (the "Real Property Leases").
(ii) Improvements. To the extent not arising under the Real Property
Leases, all rights of MSX in and to all buildings, structures, facilities,
fixtures and other improvements located on the real property subject to the Real
Property Leases (the "Improvements").
(iii) Inventory. All inventories, notwithstanding how classified in
the financial records of MSX, of raw materials, work-in-process, finished goods,
products under research and development, demonstration equipment, office and
other supplies, parts, packaging materials and other accessories related thereto
which are held at, or are in transit from or to, the locations at which the
Business is conducted, or located at customers' premises on consignment, in each
case, which are used or held for use by MSX in the conduct of the Business,
including, without limitation, any of the foregoing purchased subject to any
conditional sales or title retention agreement in favor of any other Person,
together with all rights of MSX against suppliers of such inventories (the
"Inventory").
(iv) Accounts Receivable. All trade accounts receivable and all
notes, bonds and other evidences of rights to receive payments arising out of
sales occurring in the conduct of the Business, including any rights of MSX with
respect to any third party collection procedures or any other Actions or
Proceedings which have been commenced in connection therewith (the "Accounts
Receivable").
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(v) Tangible Personal Property. All furniture, fixtures, equipment,
machinery and other tangible personal property used or held for use in the
conduct of the Business (other than Inventory and Vehicles) at the locations at
which the Business is conducted or at customers' premises on consignment, or
otherwise used or held for use by MSX in the conduct of the Business (including
but not limited to the items listed in Section 2.01(a)(v) of the Disclosure
Schedule), including any of the foregoing purchased subject to any conditional
sales or title retention agreement in favor of any other Person (the "Tangible
Personal Property").
(vi) Personal Property Leases. (A) Each lease or sublease of
tangible personal property described in Section 2.01(a)(vi)(A) of the Disclosure
Schedule as to which MSX is the lessor or sublessor and (B) each lease or
sublease of tangible personal property described in Section 2.01(a)(vi)(B) of
the Disclosure Schedule as to which MSX is the lessee or sublessee, together
with any options to purchase the underlying property (the leases and subleases
described in subclauses (A) and (B) being hereinafter collectively referred to
as the "Personal Property Leases").
(vii) Business Contracts. All Contracts (other than the Real
Property Leases, the Personal Property Leases and the Accounts Receivable) to
which MSX is a party and which are utilized in the conduct of the Business,
including, without limitation, Contracts relating to suppliers, sales
representatives, distributors, purchase orders, marketing arrangements,
confidentiality agreements and manufacturing arrangements.
(viii) Prepaid Items; Deferred Charges. All prepaid items and
deferred charges relating to the Business.
(ix) Intangible Personal Property. All rights and interests in and
to the name "MSX International, Inc." and all Intellectual Property used or held
for use in the conduct of the Business (including, without limitation, MSX's
goodwill therein) and all rights, privileges, claims, causes of action and
options relating or pertaining to the Business or the MSX Assets, including,
without limitation, the items listed in Section 2.01(a)(ix) of the Disclosure
Schedule.
(x) Licenses. All Licenses utilized in the conduct of the Business,
including, without limitation, the Licenses listed in Section 2.01(a)(x) of the
Disclosure Schedule (the "Business Licenses").
(xi) Vehicles. All motor vehicles owned or leased by MSX and used or
held for use in the conduct of the Business, including but not limited to the
vehicles listed in Section 2.01(a)(xi) of the Disclosure Schedule (the
"Vehicles").
(xii) Books and Records. All Books and Records used or held for use
in the conduct of the Business or otherwise relating to the MSX Assets, other
than the minute books, stock transfer books and corporate seals of MSX (the
"Business Books and Records").
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(xiii) Insurance Proceeds. All insurance proceeds or the right to
receive proceeds (in each case net of any applicable deductible) in respect of
any casualty or other loss in respect of the Business or any of the MSX Assets
from (i) either of the Sellers (to the extent not paid as an Intercompany
Credit) or (ii) any third-party insurance policy existing for the benefit of MSX
or the MSX Assets, including, without limitation, those listed in Section
2.01(xiii) of the Disclosure Schedule.
(xiv) Cash and Cash Equivalents. All cash, commercial paper,
certificates of deposit and other bank deposits, treasury bills and other cash
equivalents.
(xv) Other Assets and Properties. All other assets, properties and
rights of MSX used or held for use in connection with the Business, except for
the Excluded Assets.
(b) APX Assets Transferred. On the terms and subject to the conditions set
forth in this Agreement, at the Closing MSX shall sell, transfer, convey, assign
and deliver to Purchaser, and Purchaser shall purchase from MSX, either directly
or indirectly through one or more Subsidiaries of Purchaser, all of MSX's right,
title and interest in, to and under all APX Assets, free and clear of all Liens,
other than Permitted Liens and Pre-Existing APX Liens, for the consideration
specified in Section 3.01. The term "APX Assets" means, collectively, (i) all
the business, properties, assets and rights of whatever kind or nature, real or
personal, tangible or intangible used in the APX Business prior to the Effective
Date and sold, transferred, assigned, conveyed and delivered to MSX on the
Effective Date pursuant to and in accordance with the APX Purchase Agreement,
together with all properties, assets and rights of whatever kind or nature, real
or personal, tangible or intangible, including, without limitation, cash and
cash equivalents acquired by MSX after the Effective Date with respect to the
APX Continuing Business, other than Conveyed Assets (the "Transferred APX
Assets"), and (ii) all rights of MSX created by or arising under or in
connection with the APX Purchase Agreement, or otherwise relating to the
Transferred APX Assets and/or the APX Continuing Business. The Sellers shall
confirm the sale of the MSX Assets and the APX Assets (collectively, the
"Assets") by the execution and delivery to Purchaser or one or more of its
Subsidiaries, on the Closing Date, of the Assignment and Assumption Agreement in
the Form of Exhibit 2.02 hereto.
(c) Excluded Assets. Notwithstanding anything in this Agreement to the
contrary, the following assets, properties and rights of MSX (the "Excluded
Assets") shall be excluded from and shall not constitute Assets, and Purchaser
shall have no rights, title or interest in or to or duties or obligations of any
nature whatsoever with respect thereto by virtue of the consummation of the
transactions contemplated by this Agreement:
(i) Insurance. All insurance policies relating to the operation of
the Business or the APX Continuing Business (except as otherwise provided in
Section 2.01(a)(xiii) or 2.01(b)).
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(ii) Tax Refunds. All refunds or credits, if any, of Taxes due to or
from MSX.
(iii) Corporate Records. The minute books, stock transfer books and
corporate seal of MSX.
(iv) Litigation Claims. Any rights (including indemnification) and
claims and recoveries under litigation of MSX relating solely to the Retained
Liabilities or the Excluded Assets described in clauses (i) through (iii) and
(v) through (x) of this paragraph (c).
(v) Excluded Obligations. The rights of either MSX in, to and under,
and the obligations of either MSX under, all Contracts and Licenses of any
nature which are retained by the Sellers pursuant to Section 2.02.
(vi) Non-Core Assets. All assets, properties and rights owned, used
or previously used by the Sellers in connection with all Non-Core Businesses
listed in Section 6.05 of the Disclosure Schedule other than the Intellectual
Property listed in Section 2.01(a)(ix) of the Disclosure Schedule.
(vii) Bank Accounts. All bank accounts.
(viii) Plan Assets. Except as expressly provided in Article XIII, any
assets (including assets held in trust) of or relating to any Employee Benefit
Plan.
(ix) MSX's interest in DR International, Inc. and the Brighton
Building.
(x) Other. MSX's rights under this Agreement and the Operative
Agreements.
2.02 Liabilities.
(a) Assumed Liabilities. In connection with the sale, transfer,
conveyance, assignment and delivery of Assets pursuant to this Agreement, on the
terms and subject to the conditions set forth in this Agreement, and except as
otherwise provided in Section 2.02(b), at the Closing Purchaser shall assume and
agree to pay, perform and discharge when due (i) all obligations, duties and
liabilities of MSX of whatever kind or nature (other than Liabilities which
arise as a result of a violation of the covenants of the Sellers under this
Agreement except to the extent of the benefits derived by the Purchaser with
respect thereto), and (ii) those ob1igations, duties and liabilities of the
Sellers of whatever kind or nature relating to the APX Assets or arising in
connection with the operation of the APX Business, which were assumed by the
Sellers in accordance with the terms of the APX Purchase Agreement or which
arise (without violation of the covenants of the Sellers under this Agreement
except to the extent of the benefits derived
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by the Purchaser with respect thereto) in connection with events occurring with
respect to the APX Assets or the APX Continuing Business after the Effective
Date, as the same shall exist on the Closing Date (the "Assumed Liabilities").
Purchaser shall confirm such assumption by the execution and delivery to the
Sellers, on the Closing Date, of the Assignment and Assumption Agreement in the
form of Exhibit 2.02.
(b) Retained Liabilities. Notwithstanding anything to the contrary
contained herein, Purchaser shall not assume by virtue of this Agreement or the
transactions contemplated hereby, and shall have no liability for, any
Liabilities of the Sellers of any kind, character, nature or description
whatsoever (the "Retained Liabilities"), with respect to the following: (i)
Liabilities for Taxes as set forth in Article XII hereof; (ii) any Liabilities
in any way relating to the Business or the APX Continuing Business and owed to
any of the Sellers or any of their Affiliates other than the Liabilities set
forth in Section 15.03 of the Disclosure Schedule and those reflected in the
Effective Date Balance Sheet; (iii) Liabilities relating to the Excluded Assets
and all Liabilities relating to or arising in connection with or as a result of
actions taken or omitted to be taken by the Sellers in connection with the
Non-Core Businesses listed in Section 6.05 of the Disclosure Schedule or the
Non-Core Assets, including, without limitation, all Liabilities arising out of
Body Systems and Assembly Cutlass Convertible Program, including, without
limitation, Liabilities arising out of any warranty obligations with respect
thereto; (iv) any Funded Indebtedness; (v) subject to the provisions of Section
18.18, Liabilities under any self-insurance maintained by the Sellers during the
Interim Period except to the extent of any applicable deductible; (vi) except to
the extent assumed under Article XIII, Liabilities arising in any way from the
employment, compensation, benefits, or coverage under any Employee Benefit Plan
or Employee Benefit Arrangement, of any employee, agent, contractor or
consultant engaged in the Business at any time prior to the Closing Date who is
not an Interim Employee or a Transferred Employee; (vii) except to the extent
assumed under Article XIII, Liabilities arising under any Employee Benefit Plan
or Employee Benefit Arrangement with respect to any Interim Employee or any
Transferred Employee; (viii) Liabilities resulting from or relating to claims
for indemnification by any past or present officers or directors of either
Seller; (ix) Liabilities for Permitted Payments, to the extent such Permitted
Payments are included in the determination of Interim Period Cash Flow; (x)
except to the extent assumed under Article XIII, Liabilities resulting from or
relating to the facts and circumstances giving rise to the case of Xxxxxx x.
Xxxxxxxxxxx, No. 91-CV-72595-DT; (xi) Liabilities resulting from or relating to
any activities of MSX after the Closing; (xii) Liabilities with respect to or
arising out of any claims relating to the Cars and Concepts T-Top program,
including, without limitation, Liabilities arising out of Xxxxxxx Xxxxxxxx v.
ASG, Cars and Concepts and C&C, Inc.; and (xiii) checks outstanding with respect
to the Business or the APX Continuing Business.
Each Seller shall discharge in a timely manner or shall make adequate provision
for all of the Retained Liabilities, provided that each Seller shall have the
ability to contest, in good faith, any claim of liability asserted in respect
thereof by any Person other than Purchaser and its Affiliates.
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2.03 Third-Party Consents. To the extent that any Asset is not
transferable or assignable without the consent of any third party or the
transfer or assignment of which would result in a violation of any Law or Order
(a "Non-Transferable Asset"), this Agreement shall not constitute an assignment
or an attempted assignment thereof. Each Seller shall use its reasonable best
efforts to obtain the required consent of any such third party to the transfer
or assignment of any such Non-Transferable Asset. If any such consent shall not
be obtained, each Seller shall cooperate with Purchaser in any reasonable
arrangement (including reimbursement of monies paid by the Sellers on account of
any such arrangement) designed to provide Purchaser with the benefits intended
to be assigned to it under the relevant Non-Transferable Asset. If and to the
extent that such an arrangement cannot be made, Purchaser shall have no
obligation pursuant to Section 2.02 or otherwise with respect to any such
Non-Transferable Asset.
ARTICLE III
PURCHASE PRICE; THE CLOSING
3.01 Purchase Price; Adjustment.
(a) Purchase Price. The "Purchase Price" shall consist of (i)
$114,628,080 in cash, less the amount of Effective Date Assumed Indebtedness,
(ii) one or more Subordinated Debentures due 2006 (the "Purchaser Notes") of
Purchaser in the aggregate principal amount of $30 million having the terms set
forth in the form of Subordinated Note Purchase Agreement among the Sellers and
Purchaser and dated the Closing Date (the "Purchaser Note Agreement"), in the
form attached as Exhibits 3.01(a)(A) and 3.01(a)(B) hereto, and (iii) the
assumption by Purchaser of the Assumed Liabilities. The cash portion of the
Purchase Price shall be paid by wire transfer of immediately available funds to
MascoTech (for MascoTech's own account or, as appropriate, for the account of
MSX). The Purchase Price shall be subject to certain adjustments described in
Section 3.01(b).
(b) Adjustments.
(i) Within 60 days after the Closing Date, the Sellers shall
cause to be prepared and delivered to Purchaser (x) the Effective Date Balance
Sheet, audited (unless such audit requirement is waived by the Institutional
Stockholder) by a national independent accounting firm selected by the Sellers
(the "Accounting Firm") (and shall be accompanied by a written report thereon by
the Accounting Firm) and (y) reports setting forth a computation of each of the
Effective Date Net Working Capital, the Interim Period Cash Flow, the Interim
Period Cash Flow Interest, the Interim Period Income Tax Amount and the Interim
Period Income Tax Benefit (collectively, the "Computations"). Each Computation
shall be prepared in accordance with the terms thereof. The Sellers shall, and
shall cause the Accounting Firm to, make available to Purchaser all work papers
and related data used in connection with the preparation and audit of the
Effective Date Balance Sheet and the Computations.
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(ii) Except as provided in Section 3.01(b)(iii) below, within
30 days after delivery to Purchaser of the Effective Date Balance Sheet and the
Computations, the Sellers shall pay to Purchaser in immediately available funds
an amount equal to the Adjustment (as defined below), if the Adjustment yields a
positive number, together with interest thereon from the Closing Date to the
date of payment at the rate of 10% per annum . If the Adjustment yields a
negative number, Purchaser shall pay to the Sellers in immediately available
funds an amount equal to the Adjustment, together with interest thereon from the
Closing Date to the date of payment at the rate of 10% per annum. As used
herein, the term "Adjustment" means (I) the sum of (x) the amount, if any, by
which the Required Working Capital exceeds the Effective Date Net Working
Capital and (y) the amount of the Interim Period Cash Flow, if a positive
number, together with a charge on such positive Interim Period Cash Flow
calculated at the rate of 8.5% per annum for a period of one-half of the total
number of days elapsed during the Interim Period, and (z) Interim Period Income
Tax Benefit minus (II) the sum of (x) the amount, if any, by which the Effective
Date Net Working Capital exceeds the Required Working Capital and (y) the
absolute amount of Interim Period Cash Flow, if a negative number, together with
a charge on such negative Interim Period Cash Flow calculated at the rate of
8.5% per annum for a period of one-half of the total number of days elapsed
during the Interim Period, and (z) the Interim Period Income Tax Amount. Any
such payments required by this Section 3.01(b)(ii) (as the same may be adjusted
pursuant to the procedures set forth in Section 3.01(b)(iii)) is herein referred
to as the "Sellers' Net Cash Adjustment," in the case of a payment due to the
Sellers, and the "Purchaser Net Cash Adjustment," in the case of a payment due
to Purchaser.
(iii) In the event that Purchaser has any objection that any of
the Effective Date Balance Sheet or the Computations have not been prepared in
accordance with this Agreement, Purchaser may give the Sellers a written
statement describing its objections in reasonable detail within 30 days
following their receipt of the Effective Date Balance Sheet and the
Computations. The Effective Date Balance Sheet and each of the Computations
shall become final and binding upon the parties hereto unless such statement is
given. Purchaser and the Sellers shall use reasonable efforts to resolve any
disputes themselves through the exchange of written proposals setting forth
their respective determinations of any of the disputed items in the Effective
Date Balance Sheet or the Computations. During this period (not to exceed 40
days after the Sellers have received the statement of objections, such period
being the "Discussion Period") in which the parties are attempting to resolve
any such disputes themselves, no party shall be constrained by any position it
has previously taken with respect to the determination of the items contained in
the Effective Date Balance Sheet or the Computations; provided that no party may
take any position that is inconsistent with the provisions of this Agreement.
If the parties are unable themselves to obtain a final resolution prior to the
termination of the Discussion Period, the parties shall select a nationally
recognized accounting firm (other than Ernst & Young LLP and Coopers & Xxxxxxx
LLP) reasonably acceptable to each of the parties (the "Independent Accounting
Firm") to which to submit the items remaining in dispute (the "Disputed
Matters"). Such selection shall occur no later than the tenth day following the
termination of the Discussion Period. Within 20 days after the selection of the
Independent Accounting Firm, each party shall submit to the Independent
Accounting Firm a written statement describing each Disputed Matter in
reasonable detail. The Independent Accounting
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Firm shall, within 60 days after such submission, resolve any remaining
disputes. Any such resolution by the Independent Accounting Firm shall be set
forth in writing and shall be conclusive and binding among the parties and the
Effective Date Balance Sheet and each of the Computations shall be appropriately
adjusted to reflect the final resolution of the Disputed Matters. The payment of
any Sellers' Net Cash Adjustment or Purchaser Net Cash Adjustment, as
applicable, shall be made within 5 days after delivery to the Sellers and
Purchaser of the decision of the Independent Accounting Firm.
(iv) All fees and expenses of the Independent Accounting Firm
selected in accordance with Section 3.01(b)(iii) shall be borne equally by
Purchaser and the Sellers.
(v) The Sellers shall be jointly and severally liable for the
payment and performance when due of all obligations of the Sellers under this
Section 3.01(b).
3.02 Allocation of Purchase Price.
(a) The parties hereto acknowledge and agree that the purchase and
sale of the of the Assets, the APX-Brazil Stock and the Limited Stock is an
"applicable asset acquisition" within the meaning of Section 1060(c) of the
Code. Purchaser shall in good faith prepare a schedule (the "Allocation
Schedule"), and deliver it to the Sellers prior to the Closing Date, setting
forth the allocation of the consideration to be paid by Purchaser for the Assets
among the Assets, including the covenant of the Sellers set forth in Section
8.07 of this Agreement, which shall be prepared in accordance with the
methodology contained in Section 1060 of the Code. Such Allocation Schedule
shall reflect an allocation of a portion of the Purchase Price (including for
this purpose the Assumed Liabilities) between the APX Assets and the APX-Brazil
Stock and the MSX Assets and the Limited Stock, such amount being allocated to
the MSX Assets and the Limited Stock to be allocated one-third to the Limited
Stock and two-thirds among the MSX Assets as set forth in the Allocation
Schedule. In connection with the preparation of the Allocation Schedule, the
parties shall cooperate with each other and provide such information as any of
them shall reasonably request.
(b) The parties agree to modify the Allocation Schedule promptly
following the Closing to reflect modifications in any information used in its
preparation. Each party hereto agrees to be bound by the allocations set forth
in the Allocation Schedule, to complete jointly and to file separately Form 8594
with its federal income tax return consistent with such allocation for the tax
year in which the Closing Date occurs, to file, or cause to be filed, all other
Tax Returns in a manner consistent with such allocation, and not to take any
actions inconsistent therewith.
3.03 Time and Place of Closing. Subject to satisfaction or waiver of
the conditions set forth in Articles X and XI, the closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Xxxxxx, Xxxxx & Bockius LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at
9:00 a.m., New York City time, on January 3, 1997, or at such other time and
date as the parties hereto mutually agree. The date on which the Closing occurs
is referred to herein as the "Closing Date".
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3.04 Deliveries at the Closing. Subject to Section 1.03, the Sellers
shall deliver to Purchaser (w) the various certificates, instruments and other
documents referred to in Sections 8.09, 10.03, 10.06, 10.07, 10.08, 10.09,
10.11, 10.12, 10.13 and 10.14, (x) stock certificates representing the
APX-Brazil Stock and the Limited Stock, duly endorsed in blank or accompanied by
duly executed stock powers endorsed in blank with requisite stock transfer tax
stamps, if any, attached, (y) the Assignment and Assumption Agreement and the
Purchaser Note Agreement, duly executed by each Seller and (z) such other
instruments of conveyance, assignments and transfers, in form and substance
reasonably acceptable to Purchaser and duly executed by MSX, as Purchaser shall
reasonably request to vest in Purchaser good title to the Assets, subject to
Permitted Liens and Pre-Existing APX Liens, (the "Other Assignment Instruments")
and Purchaser shall deliver or cause to be delivered to the Sellers (x) the
various certificates, instruments and other documents referred to in Sections
11.03, 11.06, 11.07 and 11.08, (y) the Assignment and Assumption Agreement, the
Purchaser Note Agreement and the Purchaser Notes, duly executed by Purchaser and
(z) the consideration specified in the first sentence of Section 3.01(a).
Immediately following the Closing, Purchaser shall, or shall cause the Limited
Companies to, repay that portion of the Assumed Indebtedness owed to the Sellers
or their Affiliates.
3.05 Further Assurances; Post-Closing Cooperation.
(a) Further Assurances. At any time or from time to time after the
Closing, at Purchaser's request and without further consideration, each Seller
shall execute and deliver to Purchaser such other instruments of sale, transfer,
conveyance, assignment and confirmation, provide such materials and information
and take such other actions, without material expense to the Sellers, as
Purchaser may deem necessary or desirable, including, without limitation, the
obtaining of all necessary consents of Governmental Authorities and other third
parties, in order to more effectively transfer, convey and assign to Purchaser
and to confirm Purchaser's title to, the Limited Stock, the APX-Brazil Stock and
all of the Assets, and, to the full extent permitted by Law, to put Purchaser in
actual possession and operating control of the Business, the APX Continuing
Business and the Assets and to assist Purchaser in exercising all rights with
respect thereto, and otherwise fulfill its obligations under this Agreement and
the Operative Agreements.
(b) Books and Records. Following the Closing, each Seller shall
afford to Purchaser, its counsel and its accountants, and Purchaser shall afford
to each Seller, its counsel and accountants, during normal business hours,
reasonable access to the books, records and other data relating to the Business,
APX Continuing Business, the Limited Stock, the APX-Brazil Stock and the Assets
in its possession or in the possession of any of its Affiliates with respect to
periods prior to the Closing and the right to make copies and extracts
therefrom, to the extent that such access may be reasonably required by the
requesting party in connection with (i) the preparation of Tax Returns, (ii) the
determination or enforcement of rights and obligations under this Agreement or
the APX Purchase Agreement, (iii) compliance with the requirements of any
Governmental Authority, (iv) the determination or enforcement of the rights and
obligations of any Indemnified Party or (v) in connection with any actual or
threatened Action or Proceeding. Each of the Sellers and Purchaser further
agrees that, for a period extending six years after the
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Closing Date, it shall not destroy or otherwise dispose of any such books,
records and other data unless (x) it shall first offer in writing to surrender
such books, records and other data to Purchaser or the Sellers, as the case may
be, and (y) Purchaser or the Sellers, as the case may be, shall not agree in
writing to take possession thereof during the 10-day period after such offer is
made.
(c) Limitation on Access. Notwithstanding anything to the contrary
contained in this Section 3.05, if Purchaser and one or both of the Sellers are
in an adversarial relationship in connection with any pending or threatened
litigation or arbitration arising under or related to this Agreement, the APX
Purchase Agreement or any of the Operative Agreements, the furnishing of books,
records and other documents and information in accordance with paragraph (b)
above shall be subject to applicable rules relating to discovery.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS
CONCERNING THE TRANSACTIONS
The Sellers hereby jointly and severally represent and warrant to
Purchaser that the statements contained in this Article IV are true and correct
as of the Effective Date, and will be true and correct as of the Closing Date
(as though made then and as though the Closing Date were substituted for the
date of this Agreement throughout this Article IV, except to the extent that
such statements expressly relate to an earlier time or date, in which case such
statement shall be true and correct as of such earlier time or date), except as
set forth in the Disclosure Schedule, which Disclosure Schedule shall be
construed in accordance with Section 18.11.
4.01 Organization and Qualification. Each of MascoTech and MSX is a
corporation duly organized, validly existing and in good standing under the Laws
of the State of Delaware and Michigan, respectively, and MSX has full corporate
power and authority to conduct its business as and to the extent now conducted
and to own, use and lease its assets and properties. MSX is duly qualified,
licensed or admitted to do business and is in good standing in each jurisdiction
in which the ownership, use or leasing of its assets and properties, or the
conduct or nature of its business, makes such qualification, licensing or
admission necessary, except for such failures to be so qualified, licensed or
admitted and in good standing which, individually or in the aggregate, (i) are
not having and could not be reasonably expected to have a Material Adverse
Effect and (ii) could not be reasonably expected to have a material adverse
effect on the validity or enforceability of this Agreement or the Operative
Agreements or on the ability of MSX to perform its obligations thereunder.
4.02 Authority Relative to Acquisition Agreement. Each Seller has
full corporate power and authority to enter into this Agreement and the
Operative Agreements to which it is a party, to perform its obligations
thereunder and to consummate the transactions contemplated by this Agreement and
the Operative Agreements to which it is a party. The execution, delivery and
performance of this Agreement and the Operative Agreements have been
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duly authorized by all requisite corporate action and no other corporate action
on the part of either Seller party thereto or its shareholders is necessary to
authorize the execution, delivery and performance by either Seller of this
Agreement or the Operative Agreements to which it is a party and the
consummation by each Seller of the transactions contemplated thereby. This
Agreement and the Operative Agreements have been duly and validly executed and
delivered by each Seller a party thereto, and constitute the legal, valid and
binding obligation of each Seller a party thereto, enforceable against each
Seller a party thereto in accordance with their respective terms.
4.03 No Conflicts. The execution and delivery by each Seller of this
Agreement and the Operative Agreements to which such Seller is a party do not,
and the performance by each Seller of its obligations under each Acquisition
Agreement and Operative Agreement to which it is a party and the consummation of
the transactions contemplated thereby will not: (i) conflict with or result in a
violation or breach of any of the terms, conditions or provisions of the
Articles of Incorporation or By-laws of either Seller, any Limited Company; (ii)
conflict with or result in a violation or breach of any term or provision of any
Law or Order applicable to either Seller or any Limited Company, or any of their
respective assets or properties; or (iii) (v) conflict with or result in a
violation or breach of, (w) constitute (with or without notice or lapse of time
or both) a default under, (x) result in or give to any Person any right of
payment or reimbursement (except pursuant to this Agreement), termination,
cancellation, modification or acceleration under, (y) result in the creation or
imposition of any Lien upon any assets or properties of either Seller or any
Limited Company under, or (z) otherwise require either Seller or any Limited
Company to obtain any consent, approval or action of, make any filing with or
give any notice to any Person as a result or under the terms of, any Contract or
License to which either Seller or any Limited Company is a party or by which any
of its assets or properties is bound, excluding from clauses (ii) and (iii) any
conflicts, violations, breaches, defaults, terminations, cancellations,
modifications, accelerations and creations and impositions of Liens which,
individually or in the aggregate, could not be reasonably expected to have a
Material Adverse Effect or a material adverse effect on the ability of either
Seller to consummate the transactions contemplated by this Agreement or the
Operative Agreements.
4.04 Governmental Approvals and Filings. Except as specified in
Section 4.04 of the Disclosure Schedule, no consent, approval or action of,
filing with or notice to any Governmental Authority on the part of either
Seller, or any Limited Company is required in connection with the execution,
delivery and performance of this Agreement or the Operative Agreements or the
consummation of the transactions contemplated by any such agreement.
4.05 Acquisition for Investment. Neither of the Sellers is acquiring
any part of the Purchaser Notes with a view to or for sale in connection with
any distribution thereof within the meaning of the Securities Act; provided that
the disposition of the Purchaser Notes will at all times remain within their
control.
4.06 Entire Business. Subject to Section 1.03, the sale and transfer
of the MSX Assets and the Limited Stock by the Sellers to Purchaser pursuant to
this Agreement will effectively convey to Purchaser, free and clear of all
Liens, other than Permitted Liens, all the
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assets and properties necessary to conduct the Business, and the sale of the
APX Assets and the APX-Brazil Stock by MSX to Purchaser pursuant to this
Agreement will convey to Purchaser, free and clear of all Liens, other than
Permitted Liens and Pre-Existing APX Liens, all of the assets, rights and
properties acquired by MSX pursuant to the APX Purchase Agreement and all of
the assets, rights and properties acquired by MSX with respect to the APX
Continuing Business after the Effective Date other than Conveyed Assets and any
assets destroyed due to casualty.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLERS AS TO APX ACQUISITION
The Sellers jointly and severally hereby represent and warrant to
Purchaser with respect to the APX Acquisition that the statements contained in
this Article V are true and correct as of the Effective Date, except as set
forth in the Disclosure Schedule, which Disclosure Schedule shall be construed
in accordance with Section 18.11.
5.01 Consummation of APX Acquisition.
(a) Subject to Section 1.03, the APX Acquisition has been consummated
on the Effective Date and the Sellers have acquired substantially all the assets
of the TAD-Sellers (exclusive of those owned by TAD-Ltd.) pertaining to the APX
Business in accordance with the terms and conditions of the APX Purchase
Agreement and have acquired the right to acquire (i) the APX Limited Assets and
(ii) the APX-Brazil Stock and the APX-Germany Stock.
(b) None of the terms of the APX Purchase Agreement or any obligation
of the XXX Xxxxxxx and the Shareholders (as defined in the APX Purchase
Agreement) thereunder, have been waived, terminated, amended, supplemented or
modified in any respect.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLERS
WITH RESPECT TO THE BUSINESS AND LIMITED
The Sellers jointly and severally represent and warrant to Purchaser
with respect to the Business and Limited and each of the Subsidiaries of Limited
(collectively, the "Limited Companies") that the statements contained in this
Article VI are true and correct as of the Effective Date, except for the
statements set forth in Sections 6.01, 6.02, 6.06(c) and 6.08(p) which shall be
true and correct as of the Effective Date and as of the Closing Date and except
as set forth in the Disclosure Schedule, which Disclosure Schedule shall be
construed in accordance with Section 18.11.
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6.01 Organization of Limited. Limited is a corporation duly
organized, validly existing and in good standing under the Laws of England, and
has full corporate power and authority to conduct the Business as and to the
extent now conducted by Limited and to own, use and lease its assets and
properties. Limited is duly qualified, licensed or admitted to do business and
is in good standing in all jurisdictions in which the ownership, use or leasing
of its assets and properties, or the conduct or nature of its business, makes
such qualification, licensing or admission necessary, except for such failures
to be so qualified, licensed or admitted and in good standing which,
individually or in the aggregate, (i) are not having and could not be reasonably
expected to have a Material Adverse Effect and (ii) could not be reasonably
expected to have a material adverse effect on the validity or enforceability of
this Agreement or any of the Operative Agreements. The Sellers have, prior to
the execution of this Agreement, delivered to Purchaser true and complete copies
of the corporate charter documents of Limited as in effect on the date hereof.
6.02 Limited Capital Stock. The authorized capital stock of Limited
consists solely of one hundred (100) Ordinary Shares, of which only the Limited
Stock has been issued. The Limited Stock is duly authorized, validly issued and
outstanding, fully paid and nonassessable. MascoTech owns the Limited Stock,
beneficially and of record, free and clear of all Liens. Except for this
Agreement, there are no outstanding Options with respect to the Limited Stock or
rights to require Limited to redeem, repurchase or otherwise acquire any of its
capital stock or any securities convertible, exchangeable or exercisable for or
into its capital stock. None of the issued and outstanding shares of capital
stock of Limited was issued in violation of any preemptive rights. The delivery
of a certificate or certificates at the Closing representing the Limited Stock
in the manner provided in Section 3.04 will transfer to Purchaser good and valid
title to the Limited Stock, free and clear of all Liens. Section 6.02 of the
Disclosure Schedule separately lists the name and jurisdiction of incorporation
of each Subsidiary of Limited. Each Subsidiary of Limited is a corporation duly
organized, validly existing and in good standing under the Laws of its
jurisdiction of incorporation identified in Section 6.02 of the Disclosure
Schedule, and has full corporate power and authority to conduct its business as
and to the extent now conducted and to own, use and lease its assets and
properties. Each such Subsidiary is duly qualified, licensed or admitted to do
business and is in good standing in those jurisdictions specified in Section
6.02 of the Disclosure Schedule, which are the only jurisdictions in which the
ownership, use or leasing of such Subsidiary's assets and properties, or the
conduct or nature of its business, makes such qualification, licensing or
admission necessary, except for those jurisdictions in which the failure by
Limited and its Subsidiaries to be qualified, licensed or admitted and in good
standing could not reasonably be expected to have a Material Adverse Effect.
Section 6.02 of the Disclosure Schedule separately lists for each Subsidiary of
Limited the amount of its authorized, issued and outstanding capital stock and
the record owners of such outstanding capital stock. All of the outstanding
shares of capital stock of each Subsidiary of Limited have been duly authorized
and validly issued, are fully paid and nonassessable, and are owned,
beneficially and of record, by Limited or Subsidiaries wholly owned by Limited,
free and clear of all Liens. There are no outstanding Options with respect to
the capital stock of any Subsidiary of Limited or rights to require any of such
Subsidiaries to redeem, repurchase or otherwise acquire any of its capital stock
or any
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securities convertible, exchangeable or exercisable for or into any of its
capital stock. None of the issued and outstanding shares of capital stock of
any Subsidiary of Limited was issued in violation of any preemptive rights. The
Sellers have, prior to the execution of this Agreement, delivered to Purchaser
true and complete copies of the certificate or articles of incorporation and
by-laws (or other comparable corporate charter documents) of each of the Limited
Companies as in effect on the date hereof.
6.03 Financial Statements. Section 6.03 of the Disclosure Schedule
contains true and correct copies of each of the unaudited condensed combined
balance sheets of the Business for the fiscal years ended December 31, 1995 (the
"December 31 Balance Sheet") and 1994 and for the nine months ended September
30, 1996 and the related unaudited condensed combined statements of income for
the respective periods then ended and cash flows for the fiscal year ended
December 31, 1995 and the nine month period ended September 30, 1996. Except as
set forth in Section 6.03 of the Disclosure Schedule or in the notes thereto,
all such financial statements were prepared in accordance with GAAP and fairly
present (subject, in the case of the unaudited financial statements, to normal
year-end audit adjustments which are not expected to be, individually or in the
aggregate, materially adverse to the Business) the financial condition, results
of operations or cash flow of the Business as of the respective dates thereof
and for the respective periods covered thereby. Except (x) as reflected or
reserved against in the December 31 Balance Sheet (including the notes thereto)
or (y) as reflected or reserved against in the Effective Date Balance Sheet or
(z) as reflected in any subsection of the Disclosure Schedule, there will be no
contingent liabilities against, relating to or affecting the Business, any of
the MSX Assets or the Limited Stock which are required by GAAP (applied on a
consistent basis with the methods, principles, practices and policies used in
preparing the December 31 Balance Sheet) to be reflected or reserved against in
a combined balance sheet of the Business as of that date, other than (i)
Liabilities which arise in the ordinary course of the Business and (ii) other
Liabilities which, individually and in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
6.04 Absence of Changes. Except for the execution and delivery of the
APX Purchase Agreement and the consummation of the transactions contemplated
thereby, since December 31, 1995 no events or circumstances have occurred or
arisen which, taken together, could reasonably be expected to result in a
Material Adverse Effect. Without limiting the foregoing, there has not
occurred, with respect to the Business or any of the Limited Companies, during
the period from and including December 31, 1995 to and including the date
hereof:
(a) any adoption, entering into, amendment, modification or
termination (partial or complete) of any Employee Benefit Plan, Employee Benefit
Arrangement or Foreign Benefit Plan or any material increase in compensation or
other material change in employment terms for any officer, director or
employees;
(b) incurrences of Indebtedness in an aggregate principal amount
exceeding $20 million (net of any amounts discharged during such period);
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(c) any acquisition, lease or disposition by the Sellers or any of the
Limited Companies of any assets or properties used or held for use in the
conduct of the Business, or any creation or incurrence of a Lien (other than a
Permitted Lien) on any assets or properties used or held for use by any of them
in the conduct of the Business, in each case other than in the ordinary course
of business consistent with past practice;
(d) any entering into of an agreement, arrangement, commitment or
understanding to do or engage in any of the foregoing after the date hereof; or
(e) any other transaction involving or development affecting the
Business, the Limited Stock or the MSX Assets outside the ordinary course of
business consistent with past practice.
6.05 Non-Core Businesses. Section 6.05 of the Disclosure Schedule
contains a true and correct list of and accurately describes each of the
Non-Core Businesses.
6.06 Legal Proceedings.
(a) There are no Actions or Proceedings pending or, to the knowledge
of either Seller, threatened against, relating to or affecting the Sellers, the
Business, any of the Limited Companies, APX-Brazil, the Limited Stock, the
APX-Brazil Stock or any of the Transferred Assets which (i) could reasonably be
expected to result in the issuance of an Order restraining, enjoining or
otherwise prohibiting or making illegal the consummation of any of the
transactions contemplated by this Agreement or otherwise result in a material
diminution of the benefits contemplated by this Agreement, or any of the
Operative Agreements to Purchaser, or (ii) if determined adversely, would have
(x) a material adverse effect on the ability of any party hereto to consummate
the transactions contemplated hereunder or under the Operative Agreements or (y)
a Material Adverse Effect.
(b) There are no Orders outstanding against the Sellers relating to
the Business or against any of the Limited Companies.
(c) There are no Orders outstanding against the Sellers, any of the
Limited Companies, APX-Brazil, the Limited Stock, the APX-Brazil Stock or any of
the Transferred Assets restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement or any of the Operative Agreements.
6.07 Compliance with Laws and Orders. None of the Sellers nor any of
the Limited Companies is, or has received any notice that it is, in violation of
or in default under any Law or Order applicable to the Business, the Limited
Stock or the MSX Assets, except for violations and defaults which, individually
or in the aggregate, are not having and could not be reasonably expected to have
a Material Adverse Effect or a material adverse effect on the ability of any
party hereto to consummate the transactions contemplated by this Agreement or
the Operative Agreements.
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6.08 Taxes. (a) Except as disclosed in Section 6.08 of the
Disclosure Schedule, all Tax Returns required to have been filed by or with
respect to the Sellers relating to the Business or any of the Limited Companies
have been duly filed, and each such Tax Return correctly and completely reflects
the income, franchise or other Tax liability and all other information required
to be reported thereon. All Taxes due and payable by the Sellers relating to
the Business or any of the Limited Companies, whether or not shown on any Tax
Return, have been paid.
(b) Except as disclosed in Section 6.08 of the Disclosure Schedule,
the provisions for Taxes due by the Sellers relating to the Business or any of
the Limited Companies (as opposed to any reserve for deferred Taxes established
to reflect timing differences between book and Tax income) in the December 31
Balance Sheet for the period ended December 31, 1995 are sufficient for all
unpaid Taxes, being current Taxes not yet due and payable, of the Sellers
relating to the Business and the Limited Companies.
(c) Neither the Sellers nor or any of the Limited Companies is a party
to any agreement extending the time within which to file any Tax Return. No
claim relating to the Business by any Taxing Authority in a jurisdiction in
which the Sellers and the Limited Companies do not file Tax Returns is currently
pending or, to the knowledge of the Sellers or the Limited Companies, threatened
to the effect that any of them is or may be subject to taxation by that
jurisdiction.
(d) All monies required to be withheld by the Sellers and each of the
Limited Companies from employees, independent contractors, creditors or other
third parties relating to the Business for Taxes (including without limitation
for income, foreign wages, Social Security or unemployment insurance Taxes or
any similar Tax under state, local or foreign law) have been collected or
withheld, and either duly or timely paid to the appropriate Taxing Authority or
set aside in accounts for such purpose.
(e) There is no pending dispute or claim concerning any Tax
Liabilities of the Sellers relating to the Business or of the Limited Companies
either (i) claimed or raised by any Taxing Authority or (ii) otherwise known to
the Sellers or any of the Limited Companies. Section 6.08 of the Disclosure
Schedule indicates those Tax Returns, if any, that have been audited, and
indicates those Tax Returns that currently are the subject of audit. The
Sellers have delivered to Purchaser complete and correct copies of all federal,
state, local and foreign income Tax Returns filed by, and all Tax examination
reports and statements of deficiencies assessed against or agreed to by, the
Sellers relating to the Business or any of the Limited Companies since January
1, 1991.
(f) Neither of the Sellers nor or any of the Limited Companies has
waived any statute of limitations in respect of Taxes or agreed to any extension
of time with respect to any Tax assessment or deficiency.
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(g) Except as disclosed in Section 6.08 of the Disclosure Schedule,
the Sellers and the Limited Companies have not received any written ruling
related to Taxes or entered into any written and legally binding agreement with
a Taxing Authority relating to Taxes.
(h) The Sellers and the Limited Companies have no liability for Taxes
of any Person other than the Subsidiaries of the Sellers listed in Section 6.08
of the Disclosure Schedule (i) under Section 1.1502-6 of the Treasury
regulations (or any similar provision of state, local or foreign law), (ii) as a
transferee or successor, (iii) by Contract or (iv) otherwise.
(i) None of the MSX Assets constitute tax-exempt bond financed
property or tax-exempt use property, within the meaning of Section 168 of the
Code.
(j) None of the Sellers or any of the Limited Companies is a
"consenting corporation" within the meaning of Section 341(f)(1) of the Code, or
comparable provisions of any state statutes, and none of the MSX Assets or the
Limited Stock is subject to an election under Section 341(f) of the Code or
comparable provisions of any state statutes.
(k) None of the Sellers or any of the Limited Companies has
participated in or cooperated with an international boycott within the meaning
of Section 999 of the Code.
(l) None of the Limited Companies is, and at no time has been, a
passive foreign investment company within the meaning of Section 1296 of the
Code.
(m) None of the Limited Companies is, or at any time has been, engaged
in the conduct of a trade or business within the United States within the
meaning of Section 864(b) and Section 882(a) of the Code, or treated as or
considered to be so engaged under Section 882(d) or Section 897 of the Code or
otherwise.
(n) None of the Limited Companies holds, and at no time has held, a
United States real property interest within the meaning of Section 897(c)(1) of
the Code.
(o) Except as disclosed in Section 6.08 of the Disclosure Schedule, no
Taxing Authority has proposed Tax adjustments with respect to the Sellers or any
of the Limited Companies directly or indirectly in respect of an intercompany
transaction or arrangement between or among the Sellers, the Limited Companies
or their Affiliates during any Pre-Closing Period, including, without limitation
(i) any Tax arising from an adjustment in respect of such transaction or
arrangement under Section 482 of the Code, the Treasury Regulations thereunder,
any related provision or any similar provision of state, local or foreign law
and (ii) any Tax arising from a failure to fully comply with applicable
documentation, recordkeeping and filing requirements in respect of such
transaction or arrangement.
(p) As of the Closing Date, the Limited Companies will have in the
aggregate at least U.S. $7 million of earnings and profits. All such earnings
and profits will, following the sale by the Sellers of the capital stock of the
Limited Companies pursuant to this Agreement, be
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treated as previously included in the Sellers' gross income under Section
951(a) of the Code and subject thereunder to U.S. Federal income tax.
6.09 Benefit Plans; ERISA.
(a) Section 6.09(a) of the Disclosure Schedule lists each Employee Benefit
Plan covered by or subject to ERISA that any of the Sellers or their respective
Affiliates maintains or administers, or to which any of them contributes, in
each such case covering any employee or former employee engaged in the Business.
(i) Each such Employee Benefit Plan (and each related trust, VEBA
trust, insurance contract, or fund) has at all times complied in form and in
operation in all material respects with the applicable requirements of ERISA,
the Code, and other applicable laws and has been administered in accordance with
its terms.
(ii) All required reports and descriptions (including Form 5500
Annual Reports, Summary Annual Reports, Forms PBGC-1, and Summary Plan
Descriptions) have, where required, been filed or distributed with respect to
each such Employee Benefit Plan and each Employee Benefit Arrangement listed in
Section 6.09(f) of the Disclosure Schedule. The requirements of Part 6 of
Subtitle B of Title I of ERISA and of Code Section 4980B have been met in all
material respects with respect to each such Employee Benefit Plan that is a
group health plan (within the meaning of ERISA Section 601 and Code Section
4980B).
(iii) All contributions (including all employer contributions and
employee salary reduction contributions) which are due and payable to any such
Employee Benefit Plan which is an employee pension benefit plan (as defined in
ERISA) on or prior to the date hereof have been paid to such employee pension
benefit plan. All premiums and other payments due on or before the date hereof
have been paid with respect to each such Employee Benefit Plan which is an
employee welfare benefit plan (as defined in ERISA).
(iv) Each such Employee Benefit Plan which is an employee pension
benefit plan and which is intended to meet the requirements of a qualified plan
under Code Section 401(a) is, and at all times has been, so qualified and has
either (1) received a favorable determination letter from the Internal Revenue
Service covering such Employee Benefit Plan for the Tax Reform Act of 1986, as
amended, the Unemployment Compensation Act of 1992, and the Omnibus Budget
Reconciliation Act of 1993 or (2) timely applied to the Internal Revenue Service
for a favorable determination letter so covering such plan.
(v) No Employee Benefit Plan other than a Multiemployer Plan is
subject to the minimum funding requirements of Code Section 412 or to Title IV
of ERISA.
(vi) The Sellers have delivered to Purchaser correct and complete
copies of the current plan document and summary plan description, the most
recent favorable determination letter received from the Internal Revenue
Service, the most recent Form 5500
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Annual Report filed with the Internal Revenue Service, and all related trust
agreements, insurance contracts and other funding agreements which implement
each such Employee Benefit Plan, in each case as applicable to such Employee
Benefit Plan.
(vii) There have been no Prohibited Transactions with respect to
any such Employee Benefit Plan and, to the knowledge of the Sellers, no plan
fiduciary has any liability for material breach of fiduciary duty or any other
material failure to act or comply in connection with the administration or
investment of the assets of any such Employee Benefit Plan. No action, suit,
proceeding, hearing or investigation with respect to the administration or the
investment of the assets of any such Employee Benefit Plan (other than routine
claims for benefits) is pending or, to the knowledge of the Sellers,
threatened.
(b) Section 6.09(b) of the Disclosure Schedule lists each Employee
Benefit Plan providing medical, health or life insurance and any other welfare
benefit plan providing significant welfare-type benefits for currently (or
future) retired or terminated United States employees engaged in the Business,
their spouses, or their dependents (other than in accordance with Section 4980B
of the Code).
(c) Section 6.09(c) of the Disclosure Schedule lists all Multiemployer
Plans contributed to by any of the Sellers or their respective Affiliates for
the benefit of any employee or former employee engaged in the Business, or with
respect to which the Sellers have any liability. With respect to each
Multiemployer Plan, to the Sellers' knowledge, (i) no withdrawal liability has
been incurred, and the Sellers have no reason to believe that any such liability
will be incurred prior to the Closing Date, (ii) no such plan is in
"reorganization" (within the meaning of Section 4241 of ERISA), (iii) no notice
has been received that increased contributions may be required to avoid a
reduction in plan benefits or the imposition of an excise tax, or that the plan
is or may become "insolvent" (within the meaning of Section 4241 of ERISA), (iv)
no proceedings have been instituted by the Pension Benefit Guaranty Corporation
against the plan, (v) there is no contingent liability for withdrawal liability
by reason of a sale of assets pursuant to Section 4204 of ERISA, and (vi) except
as disclosed on Section 6.09(c) of the Disclosure Schedule, if the Sellers or
any Affiliate thereof were to have a complete or partial withdrawal as of the
Closing, no obligation to pay withdrawal liability would exist on the part of
the Sellers or any Affiliate thereof.
(d) No significant liability (other than for PBGC premiums) has been
incurred or, to the knowledge of the Sellers, would reasonably be expected to be
incurred with respect to the period prior to the Effective Date under Title IV
of ERISA (including withdrawal liability) or under Sections 4971 through 4980B
of the Code with respect to any Employee Benefit Plan (including a Multiemployer
Plan) presently, or since January 1, 1988, maintained or contributed to by the
Sellers, their respective Affiliates or any entity that is, or at any time was,
an ERISA Affiliate.
(e) No benefit under any Employee Benefit Plan listed in Section
6.09(a) of the Disclosure Schedule or under any Employee Benefit Arrangement
listed in Section 6.09(f) of
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the Disclosure Schedule, including any retention agreement or severance or
parachute payment plan or agreement, will be established or become accelerated,
vested or payable by reason of any transaction contemplated by this Agreement
or any other Operative Agreement.
(f) Section 6.09(f) of the Disclosure Schedule lists each Employee
Benefit Arrangement, other than any Foreign Benefit Plan, that has been entered
into, maintained, or administered, as the case may be, by any of the Sellers or
their respective Affiliates and that currently covers any employee or former
employee engaged in the Business. Each such Employee Benefit Arrangement
complies in all material respects with its terms and with the requirements of
applicable statutes, laws, orders, rules and regulations.
(g) To the knowledge of the Sellers, Section 6.09(g) of the Disclosure
Schedule lists all significant Foreign Benefit Plans that any of the Sellers or
their respective Affiliates maintains or administers, or to which any of them
contributes, in each such case covering any employee or former employee engaged
in the Business (other than plans, programs, arrangements and agreements
required to be sponsored, maintained or contributed to by applicable laws).
Further, and in each case to the knowledge of the Sellers:
(i) Any employer and employee contributions required by law or
required by the terms of any such Foreign Benefit Plan to be made to or provided
for such Foreign Benefit Plan on or before the date hereof have been made, or
provided for in accordance with the past practices of the Sellers or their
respective Affiliates.
(ii) The fair market value of the assets of each such funded
Foreign Benefit Plan equals or exceeds the present value of the benefits accrued
to the Closing Date payable to all current and former participants, determined
on an ongoing basis according to the actuarial assumptions and valuations most
recently used to determine employer contributions to such Foreign Benefit Plan,
and the transactions contemplated by this Agreement and the other Operative
Agreements shall not cause the funded status of any such Foreign Benefit Plan to
be insufficient to procure or provide for the benefits accrued to the Closing
Date on an ongoing basis.
(iii) Each such Foreign Benefit Plan has been maintained and
administered in all material respects in compliance with the requirements of
applicable laws, and if required to be registered with applicable regulatory
authorities, such Foreign Benefit Plan has been so registered and has been
maintained in good standing with applicable regulatory authorities and is
operated in substantial compliance with such applicable authority.
6.10 Real Property. Section 6.10 of the Disclosure Schedule lists
and briefly describes all real property leased or subleased to or by MascoTech
(relating to the Business), MSX and any of the Limited Companies. The Sellers
have delivered to Purchaser correct and complete copies of the leases and
subleases listed in Section 6.10 of the Disclosure Schedule (except as
indicated). There are no amendments, consents for alterations, or other
documents recording variations to such leases which materially and adversely
affect the rental payments, the
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term or the current use of the properties subject thereto. With respect to
each lease and sublease listed in Section 6.10 of the Disclosure Schedule for
which the annual rental payments exceed $50,000, (A) the lease or sublease is
legal, valid, binding, enforceable, and in full force and effect, as to MSX and
the Limited Companies, as appropriate, except as (x) the enforceability may be
subject to bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, or other laws relating to creditors' rights generally, and (y) such
property may be subject to prior or superior leases, mortgages, deeds of trust,
or other liens against the lessor's interest in such property, (B) none of MSX
or the Limited Companies is in breach or default, no event has occurred which,
with notice or lapse of time, would constitute a breach or default by any of
MSX or the Limited Companies or permit termination, modification, or
acceleration by any third party thereunder and (C) to the knowledge of MSX, no
third party or landlord is in breach or default thereunder or has repudiated or
has the right to terminate or repudiate (except for the normal exercise of
remedies in connection with a default thereunder) any provision thereof, except
in each such case where the illegality, failure to be binding,
unenforceability, ineffectiveness, breach, default, termination, modification,
acceleration, or repudiation would not have a Material Adverse Effect.
6.11 Intellectual Property Rights. All Intellectual Property used in
or necessary for the conduct of the Business as now conducted (the "MSX
Intellectual Property") forms a part of the MSX Assets; provided, however, that
no patents or registered trademarks, including without limitation the patents
and trademarks disclosed in Section 2.01(a)(ix) of the Disclosure Schedule, are
necessary for the conduct of the Business as now conducted. Except as disclosed
in Section 6.11 of the Disclosure Schedule, (a) the Sellers and/or the Limited
Companies have all right, title and interests in, or the exclusive right to use,
the MSX Intellectual Property, with the exception of such MSX Intellectual
Property the absence of which is not likely to cause a Material Adverse Effect
(the "Material MSX Intellectual Property"), (b) all registrations with and
applications to Governmental Authorities in respect of such Intellectual
Property are in full force and effect, (c) there are no restrictions on the
direct or indirect transfer of any license, or any interest therein, in respect
of such Material MSX Intellectual Property, (d) the Sellers and/or the Limited
Companies have taken reasonable security measures to protect the secrecy,
confidentiality and value of their respective trade secrets in respect of the
Business, (e) neither the Sellers nor any Limited Company is, or has received
any notice that it is, in default (or with the giving of notice or lapse of time
or both, would be in default) under any license to use any such Material MSX
Intellectual Property, (f) to the knowledge of the Sellers, such Material MSX
Intellectual Property, with the exception of patents relating to convertibles
and convertible conversion, is not being infringed by any other Person and (g)
neither the Sellers nor any Limited Company has received notice that it is
infringing any Intellectual Property of any other Person in connection with the
conduct of the Business, no claim is pending or, to the knowledge of either
Seller, has been made to such effect that has not been resolved and, to the
knowledge of the Sellers, neither the Sellers nor any Limited Company is
infringing any Intellectual Property Rights of any other Person in connection
with the conduct of the Business.
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6.12 Contracts.
(a) Section 6.12(a) of the Disclosure Schedule (with subparagraph
references corresponding to those set forth below) contains a true and correct
list of each of the following Contracts or other arrangements ("Material
Contracts") (true and correct copies or, if no such copies are available,
reasonably complete and accurate written descriptions of which, together with
all amendments, modifications and supplements thereto and all waivers of any
terms thereof, have been delivered to Purchaser prior to the execution of this
Agreement), (x) with respect to the Business, (y) to which any of the Limited
Companies is a party or (z) to which any of the Sellers is a party and by which
any of the Transferred Assets, the Limited Stock or the APX-Brazil Stock is
bound, as applicable:
(i) (x) all Contracts (excluding Employee Benefit Plans)
involving, individually, any payment obligation on the part of any of the
Sellers or the Limited Companies of an amount exceeding $75,000 and providing
for a commitment of employment or consultation services for a specified or
unspecified term to any employee; and (y) any written or unwritten
representations, commitments, promises, communications or courses of conduct
(excluding Employee Benefit Arrangements, Employee Benefit Plans and Foreign
Benefit Plans and not embodied in a Contract) involving an obligation of the
Sellers relating to the Business or any of the Limited Companies to make
payments in any year, other than salary or incentive compensation payments in
the ordinary course of business, to any Employee exceeding $75,000;
(ii) all Contracts with any Person containing any provision or
covenant that directly or indirectly prohibits or limits (x) the ability of the
Sellers or any of the Limited Companies to engage in any business activity the
same as or similar to, or to compete with any Person engaged in any business
activity as are the same as or similar to those of, the Business or the APX
Continuing Business or (y) the ability of any Person to compete with the Sellers
or any of the Limited Companies or to engage in any business activity the same
as or similar to those of the Business or the APX Continuing Business;
(iii) all partnership, joint venture, shareholders' or other
similar Contracts with any Person in connection with the Business or the APX
Business;
(iv) the form of all Contracts with independent contractors,
distributors, dealers, manufacturer's representatives, sales agencies or
franchisees;
(v) all Contracts relating to (A) the future disposition or
acquisition of any Transferred Assets, the Limited Stock or the APX-Brazil
Stock, other than dispositions or acquisitions in the ordinary course of
business consistent with past practice and in accordance with the terms of this
Agreement, and (B) any Business Combination relating to the Assets, any of the
Limited Companies or APX-Brazil;
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(vi) all Contracts relating to Indebtedness in excess of
$250,000 or any guarantees of Indebtedness or other Liabilities of MSX or any
Limited Company to any third Person;
(vii) all material Contracts between or among any Limited
Company, on the one hand, and either Seller, any officer, director, Affiliate or
Associate of either Seller or any Associate of any such officer, director or
Affiliate, on the other hand;
(viii) all other Contracts with respect to the Business or the
Assets that involve the payment or potential payment, pursuant to the terms of
any such Contract, of more than $250,000;
(ix) all collective bargaining or similar labor contracts;
(x) a list of the names of all employees, independent
contractors or agents who are parties to MascoTech's Proprietary Confidential
Information and Invention Assignment Agreement with respect to the Business;
(xi) all Contracts relating to Intellectual Property; and
(xii) all Contracts relating to the APX Acquisition, the APX
Business or APX Brazil other than any Contracts or other arrangements assumed by
any of the Sellers pursuant to the APX Purchase Agreement.
(b) Each Contract required to be disclosed in Section 6.12(a) of the
Disclosure Schedule is in full force and effect and constitutes a legal, valid
and binding agreement, enforceable in accordance with its terms of the Sellers
or any of the Limited Companies, as the case may be, and (to the knowledge of
the Sellers) each other party thereto; and none of the Sellers or any of the
Limited Companies, nor, to the knowledge of either Seller, any other party to
such Contract is, or has received notice that it is, in violation or breach of
or default under any such Contract (or with notice or lapse of time or both,
would be in violation or breach of or default under any such Contract).
6.13 Licenses. Section 2.01(a)(x) of the Disclosure Schedule contains
a true and complete list of all material Licenses used or held for use in the
Business, setting forth the function and the expiration and renewal date of
each. Prior to the execution of this Agreement, the Sellers have delivered to
Purchaser true and complete copies of all such Licenses. Except as disclosed in
Section 6.13 of the Disclosure Schedule:
(i) The Sellers and each of the Limited Companies own or validly
hold all Licenses that are material to the Business;
(ii) each Business License is valid, binding and in full force
and effect; and
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(iii) none of the Sellers or any of the Limited Companies is, or
has received any notice that it is, in default (or with the giving of notice or
lapse of time or both, would be in default) under any Business License.
6.14 Insurance. To the knowledge of the Sellers, Section 6.14 of the
Disclosure Schedule lists and describes in reasonable detail the current
insurance policies of the Sellers under which any of MSX with respect to the
Business, the Limited Companies or any of their respective Subsidiaries may make
claims after the Closing Date of the types referred to in Section 18.19;
provided that the Sellers are not representing or warranting the actual
availability or extent of coverage under any such policies listed on Section
6.14 of the Disclosure Schedule. Each such insurance policy is valid and
binding and in full force and effect, no premiums due thereunder have not been
paid and none of the Sellers nor any of the Limited Companies has received any
notice of cancellation or termination in respect of any such policy or is in
default thereunder. None of the Sellers nor any of the Limited Companies has
received notice that any insurer under any insurance policy identified in
Section 6.14 of the Disclosure Schedule is denying liability with respect to a
claim thereunder or defending under a reservation of rights clause.
6.15 Affiliate Transactions. Section 6.15 of the Disclosure Schedule
describes those services provided by the Sellers or their Affiliates to the
Business or any of the Limited Companies.
6.16 Environmental Matters.
(a) Each of the Sellers and the Limited Companies has obtained and
holds all Environmental Permits with respect to the Business and the MSX Assets;
(b) Each of the Sellers and the Limited Companies is in compliance
with all the terms, conditions and provisions of all (i) Environmental Permits
and (ii) applicable Environmental Laws;
(c) During the past 10 years there have not been any and currently
there are no pending or, to the knowledge of the Seller, threatened
Environmental Claims against or affecting any Limited Company, the Business or
any of the MSX Assets, and none of the Sellers is aware of any facts or
circumstances which could reasonably be expected to form the basis for any
Environmental Claim against or affecting any of the Limited Companies, the
Business or any of the MSX Assets;
(d) Neither the Sellers nor any of the Limited Companies, nor, to the
knowledge of the Sellers, any prior owner or lessee of any Site, has handled any
Hazardous Material on any Site, except in compliance with applicable
Environmental Laws;
(e) No Releases of a Hazardous Material have occurred at, from, to,
in, under or on any Site and there are no Hazardous Materials present in, on,
about, at, under or migrating to any Site;
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(f) To the knowledge of the Sellers, there are no (i) underground
storage tanks, active or abandoned, (ii) polychlorinated biphenyl containing
equipment or (iii) asbestos containing material present at any Site;
(g) Neither the Sellers in connection with the Business, nor any of
the Limited Companies has any liability or has transported or arranged for the
treatment, storage, handling, disposal or transportation of any Hazardous
Material to or at any location (other than a Site) so as to give rise to any
liability or Environmental Claim against or affecting Purchaser, the Sellers,
any of the Limited Companies, the Business or any of the MSX Assets;
(h) No Site is listed or proposed for listing on the National
Priorities List promulgated pursuant to CERCLA or on any similar state list of
sites requiring investigation or clean-up;
(i) There are no Liens (other than Permitted Liens) arising under or
pursuant to any Environmental Law on any property owned or leased by any of the
Limited Companies or by either of the Sellers and used or held for use in the
Business, and to the knowledge of the Sellers there are no facts or
circumstances requiring the imposition of any Liens, restrictions or other
special conditions with respect to the ownership, occupancy, development, use or
transferability of any Site under any Environmental Law; and
(j) There have been no environmental investigations, studies, audits,
tests, reviews or other analyses conducted by or on behalf of, which are in the
possession of, either Seller or any of the Limited Companies in relation to any
Site which have not been delivered to Purchaser prior to the execution of this
Agreement.
6.17 Tangible Personal Property. As of the Effective Date, the
Sellers and the Limited Companies have and as of the Closing Date the Sellers
and the Limited Companies will have good and marketable title to, or have or
will have valid leasehold interests in or valid rights under Contract to use,
all Tangible Personal Property reflected on the December 31 Balance Sheet and,
subject to the last sentence of this Section 6.17, Tangible Personal Property
acquired since December 31, 1995 other than property disposed of since such date
in the ordinary course of business consistent with past practice and in
accordance with the terms of this Agreement. Subject to the last sentence of
this Section 6.17, all the Tangible Personal Property is free and clear of all
Liens, other than Permitted Liens and Pre-Existing APX Liens, and is in good
working order and condition, ordinary wear and tear excepted. The
representations and warranties contained in this Section 6.17 relate solely to
Tangible Personal Property comprising the Transferred Assets.
6.18 Labor and Employment Matters. Except as disclosed in Section
6.18 of the Disclosure Schedule, (i) no employee of the Business is represented
by a labor union or is presently a member of a collective bargaining unit, (ii)
no collective bargaining agreement is applicable to any employee of the
Business, (iii) neither of the Sellers has any obligation to recognize or deal
with any labor union or organization with respect to employees of the Business,
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(iv) there are no unresolved, pending or, to the knowledge of Sellers,
threatened labor union grievances, unfair labor practice or change labor
proceedings with respect to the Business (v) there is no action, suit,
investigation, proceeding or claim pending, or to the knowledge of the Sellers,
threatened against either of the Sellers with respect to the Business before any
Governmental Authority relating to employment rights, employee compensation,
employee benefits, the denial or termination of any of the foregoing, employment
discrimination, equal employment opportunity or employee health and safety.
There are no organizational efforts, representation campaigns, elections or
proceedings, demands for recognition or collective bargaining, strikes,
lock-outs, work stoppages or slow downs presently being made, undertaken or, to
the knowledge of the Sellers, threatened involving any employees of the
Business.
6.19 No Guarantees. None of the Liabilities of the Business or any of
the Limited Companies incurred in connection with the conduct of the Business is
guaranteed by or subject to a similar contingent obligation of any other Person
(other than MascoTech), nor has either of the Sellers or any of the Limited
Companies guaranteed or become subject to a similar contingent obligation in
respect of the Liabilities of any customer, supplier or other Person to whom any
of them sells goods or provides services in the conduct of the Business or with
whom any of them otherwise has significant business relationships in the conduct
of the Business.
6.20 Product Warranties. Section 6.20 of the Disclosure Schedule sets
forth (i) copies of all written warranties, guarantees and written warranty
policies of the Sellers with respect to the Business or the Limited Companies
which are currently in effect or may hereinafter become effective (the "Warranty
Obligations") and the duration of each such Warranty Obligation, (ii) each of
the Warranty Obligations which is subject to any dispute or, to the best of the
knowledge of the Sellers, threatened dispute and (iii) the experience of the
Sellers and the Limited Companies during the past five years with respect to
warranties, guarantees and warranty policies of or relating to the Business.
There have not been any material deviations from the Warranty Obligations, and
salesmen, employees and agents of the Sellers and the Limited Companies are not
authorized to undertake obligations to any customer or other third parties in
excess of such Warranty Obligations. Except as set forth on Section 6.20 of the
Disclosure Schedule, to the Knowledge of the Sellers, all products manufactured,
designed, licensed, leased, or sold by the Sellers or the Limited Companies or
any predecessor (i) are and were free from defects in construction and design
and (ii) satisfy any and all contract or other specifications related thereto,
in each case, in all material respects.
6.21 Brokers. Each Seller represents and warrants to Purchaser that
the services of a broker, finder or agent have not been used by it in connection
with any of the transactions contemplated by the APX Purchase Agreement or this
Agreement and that no broker's, finder's or financial advisor's fee will become
payable by Purchaser or the Business or the APX Continuing Business by reason of
acts or omissions of the Sellers as a result of the execution of this Agreement
and the APX Purchase Agreement or the consummation of the transactions
contemplated hereby or thereby. Each Seller, jointly and severally, will hold
harmless and indemnify Purchaser and its Affiliates and the officers, directors,
employees and shareholders of the foregoing, excluding MascoTech and MSX, from
and against any claim for
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broker's, finder's or financial advisor's fees, including costs or expenses
incurred in connection with the defense of any suit claiming such fees, or in
any other manner pertaining to claims for such fees, which may become payable
by reason of the acts or omissions of either Seller.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to each Seller that the
statements contained in this Article VII are and will be true and correct as of
the Effective Date and will be true and correct as of the Closing Date (as
though made then and as though the closing date were substituted for the date of
this Agreement throughout this Article VII, except to the extent that those
statements expressly relate to an earlier time or date, in which case such
statements shall be true and correct as of such earlier time or date), except as
set forth in the Purchaser Disclosure Schedule, which Purchaser Disclosure
Schedule shall be construed in accordance with Section 18.11.
7.01 Organization. Purchaser is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Delaware. Purchaser
has full corporate power and authority to enter into this Agreement and each of
the Operative Agreements, to perform its obligations under each such agreement
and to consummate the transactions contemplated by each such agreement.
7.02 Authority. The execution, delivery and performance by Purchaser
of this Agreement and each of the Operative Agreements have been duly and
validly authorized by the Board of Directors of Purchaser, and no other
corporate action on the part of Purchaser or its stockholders is necessary to
authorize the execution, delivery and performance by Purchaser of this Agreement
and each of the Operative Agreements and the consummation by it of the
transactions contemplated by each such agreement. This Agreement and each of
the Operative Agreements has been duly and validly executed and delivered by
Purchaser and constitutes the legal, valid and binding obligation of Purchaser,
enforceable against it in accordance with its terms.
7.03 No Conflicts. The execution and delivery by Purchaser of this
Agreement and each of the Operative Agreements do not, and the performance by
Purchaser of its obligations under each such agreement and the consummation of
the transactions contemplated by each such agreement will not: (i) conflict with
or result in a violation or breach of any of the terms, conditions or provisions
of the charter documents or by-laws of Purchaser; (ii) conflict with or result
in a violation or breach of any term or provision of any Law or Order applicable
to Purchaser or any of its assets or properties; or (iii) (v) conflict with or
result in a violation or breach of, (w) constitute (with or without notice or
lapse of time or both) a default under, (x) result in or give to any Person any
right of payment or reimbursement (except pursuant to this Agreement),
termination, cancellation, modification or acceleration under, (y) result in the
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creation or imposition of any Lien upon any assets or properties of Purchaser
under, or (z) otherwise require Purchaser to obtain any consent, approval or
action of, make any filing with or give any notice to any Person as a result or
under the terms of, any Contract or License to which Purchaser is a party or by
which any of its assets and properties is bound.
7.04 Governmental Approvals and Filings. Except as set forth in
Section 7.04 of the Purchaser Disclosure Schedule, no consent, approval or
action of, filing with or notice to any Governmental Authority on the part of
Purchaser is required in connection with the execution, delivery and performance
of this Agreement or any of the Operative Agreements or the consummation of the
transactions contemplated by each such agreement.
7.05 Legal Proceedings. There are no Actions or Proceedings pending
or, to the knowledge of Purchaser, threatened against, relating to or affecting
Purchaser which could reasonably be expected to result in the issuance of an
Order restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement or any of
the Operative Agreements.
7.06 Brokers. Purchaser represents and warrants to the Sellers that
the services of a broker, finder or agent have not been used by it in connection
with any of the transactions contemplated by the APX Purchase Agreement or this
Agreement and that no broker's, finder's or financial advisor's fee will become
payable by the Sellers by reason of acts or omissions of the Purchaser as a
result of the execution of this Agreement or the APX Purchase Agreement or the
consummation of the transactions contemplated hereby or thereby. Purchaser will
hold harmless and indemnify the Sellers and their Affiliates and the officers,
directors, employees and shareholders of the foregoing from and against any
claim for broker's, finder's or financial advisor's fees, including costs or
expenses incurred in connection with the defense of any suit claiming such fees,
or in any other manner pertaining to claims for such fees, which may become
payable by reason of the acts or omissions of Purchaser.
ARTICLE VIII
COVENANTS OF SELLERS
Each Seller hereby covenants with Purchaser that, at all times from
and after the Effective Date until the Closing Date and, with respect to any
covenant by its terms to be performed in whole or in part after the Closing, for
the period specified herein or, if no period is so specified herein,
indefinitely, each Seller shall comply with all the covenants and provisions of
this Article VIII.
8.01 Governmental and Other Approvals. Each Seller will (a) take all
reasonable steps necessary or desirable, and proceed diligently and in good
faith and use its best efforts, as promptly as practicable to obtain all
consents, approvals or actions of, to make all filings with and to give all
notices to Governmental Authorities or any other Person required on
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the part of any Seller to consummate the transactions contemplated hereby and by
the Operative Agreements, including without limitation those described in
Sections 4.03 and 4.04 of the Disclosure Schedule, (b) provide such other
information and communications to such Governmental Authorities or other Persons
as Purchaser or such Governmental Authorities or other Persons may reasonably
request and (c) cooperate with Purchaser as promptly as practicable in obtaining
all consents, approvals or actions of, making all filings with and giving all
notices to Governmental Authorities or other Persons required on the part of
Purchaser to consummate the transactions contemplated hereby and by the
Operative Agreements. The Sellers will provide prompt notification to Purchaser
when any such consent, approval, action, filing or notice referred to in clause
(a) above is obtained, taken, made or given, as applicable, and will advise
Purchaser of any communications (and, unless precluded by Law, provide copies of
any such communications that are in writing) with any Governmental Authority or
other Person regarding any of the transactions contemplated by this Agreement or
any of the Operative Agreements.
8.02 Access to Information. Each Seller shall (a) provide Purchaser,
any Person who is considering, at the request of Purchaser, providing financing
to Purchaser to finance all or any portion of the Purchase Price or the payments
contemplated by Section 3.01(a) (a "Financing Source"), and their respective
Representatives with full access, upon reasonable prior notice and during normal
business hours, to the Sellers' Representatives and to the assets and properties
and Books and Records of Sellers relating to the Business, the APX Continuing
Business and the Transferred Assets, (b) furnish Purchaser, any Financing Source
and their respective Representatives with all such information and data
(including without limitation copies of Contracts, Licenses, Employee Benefit
Plans and Books and Records) concerning the business and the operations of the
Sellers relating to the Business, the APX Continuing Business and the
Transferred Assets as Purchaser or any such Person or Representative reasonably
may request in connection with such investigation, (c) allow Purchaser to engage
an environmental engineer to conduct an environmental investigation of any
property owned, operated or leased by any Seller relating to the Business or the
Limited Companies, including but not limited to, subsurface soil, groundwater,
surface water or air sampling and analysis.
8.03 No Solicitations. Neither Seller shall take (or authorize or
permit any investment banker, financial advisor, attorney, accountant or other
Person retained by or acting for or on behalf of either Seller to take),
directly or indirectly, any action to initiate, assist, solicit, negotiate,
encourage, accept or respond to (other than to reject any such offer) any offer
or inquiry from any Person (a) to engage in any Business Combination with any
Seller relating to the Business, (b) to reach any agreement or understanding
(whether or not such agreement or understanding is absolute, revocable,
contingent or conditional) for, or otherwise attempt to consummate, any Business
Combination with Purchaser or (c) to furnish or cause to be furnished any
information with respect to either Seller, the Business or the APX Continuing
Business to any Person (other than as contemplated by Section 8.02) who either
Seller (or any such Person acting for or on
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behalf of any of them) knows or has reason to believe is in the process of
considering any Business Combination with either Seller, in each case as it
relates to the Business or the APX Continuing Business. If either Seller (or
any such Person acting for or on behalf of any of them) receives from any
Person (other than Purchaser or any other Person referred to in Section 8.02)
any offer, inquiry or informational request referred to above, the Sellers, as
the case may be, will promptly advise such Person, by written notice, of the
terms of this Section 8.03 and will promptly, orally and in writing, advise
Purchaser of such offer, inquiry or request and deliver a copy of such notice
to Purchaser.
8.04 Conduct of Business. Each Seller shall, and shall cause each of
the Limited Companies and APX-Brazil (following its acquisition by MSX) to,
conduct its Business (including the APX Continuing Business acquired by MSX
contemporaneously herewith pursuant to the APX Purchase Agreement) only in the
ordinary course consistent with past practice, subject to such consolidations
and combinations between the Business and the APX Continuing Business as the
Sellers shall determine are reasonably necessary, practicable, efficient and
economic. Without limiting the generality of the foregoing, and subject to the
foregoing proviso, each Seller shall:
(a) use its best efforts (in the ordinary course of business
consistent with past practice) to (i) preserve intact the Business and the APX
Continuing Business and their respective organizations and reputations, (ii)
keep available (subject to dismissals and retirements in the ordinary course of
business consistent with past practice) the services of the present officers,
employees and consultants of the Business and the APX Continuing Business, (iii)
maintain the assets and properties of the Business and the APX Continuing
Business in good working order and condition, ordinary wear and tear excepted,
and (iv) maintain the good will of customers, suppliers, lenders and other
Persons with whom the Sellers or its Subsidiaries have significant business
relationships with respect to the Business and with whom the XXX Xxxxxxx had
significant business relationships with respect to the APX Business;
(b) except to the extent required by applicable Law or, with respect
to the APX Continuing Business, such changes as are reasonably necessary and
practicable so as to enable the Sellers to conduct such business in a manner
consistent with the current practices of the Business, (i) cause the Books and
Records of the Sellers relating to the Business and of the Limited Companies and
the Books and Records relating to the APX Continuing Business (including
APX-Brazil) to be maintained in the usual, regular and ordinary manner and (ii)
not permit any material change in (x) any pricing, investment, accounting,
financial reporting, inventory, credit, allowance or Tax practice or policy with
respect to the Business or the APX Continuing Business or (y) any method of
calculating any bad debt, contingency or other reserve of the Sellers, any of
the Limited Companies, APX-Brazil, the Business or APX Continuing Business for
accounting, financial reporting or Tax purposes or (z) the fiscal year of the
Sellers, any of the Limited Companies or APX-Brazil; and
(c) comply, in all material respects, with all Laws and Orders
applicable to the Business and the APX Continuing Business and, promptly
following receipt thereof, furnish Purchaser with copies of any notice received
from any Governmental Authority or other Person alleging any material violation
of any such Law or Order.
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8.05 Certain Restrictions. Each Seller, solely with respect to the
Business and the APX Continuing Business, will refrain from, without the consent
of the Institutional Stockholder:
(a) permitting any Limited Company or APX-Brazil to amend, modify or
repeal any provision of its charter, articles of incorporation, by-laws and
similar organizational documents;
(b) authorizing, granting, issuing, selling or otherwise disposing of
any shares of the capital stock of any Limited Company or APX-Brazil or any
Option with respect to their respective capital stock, or modifying or amending
any right of any holder of outstanding shares of their respective capital stock;
(c) declaring, setting aside or paying any dividend or other
distribution in respect of the Limited Stock or the APX-Brazil Stock, or
directly or indirectly redeeming, purchasing or otherwise acquiring any of the
Limited Stock or the APX-Brazil Stock;
(d) permitting any Limited Company or APX-Brazil to enter into any
transaction of merger or consolidation or any sale of all or substantially all
of the assets of any Limited Company or APX-Brazil or causing or permitting (i)
the liquidation, dissolution or reorganization of MSX, any Limited Company or
APX-Brazil or (ii) the liquidation, dissolution or reorganization of MascoTech
which would affect its ability to consummate the transactions contemplated
hereunder;
(e) conveying, selling, transferring or otherwise disposing of any
assets of the Sellers relating to the Business, any of the assets of the APX
Continuing Business or of any Limited Company or APX-Brazil, in each case having
a book value in excess of $350,000, in a single transaction or in a series of
related transactions, to or with any Person; provided, however, that the
foregoing will not prohibit the sale of inventory in the ordinary course of
business;
(f) pledging, mortgaging or otherwise encumbering any of the APX
Assets, the assets of the Sellers relating to the Business or the APX Continuing
Business or of any Limited Company or APX-Brazil, other than purchase money
liens on items the purchase of which is permitted hereunder;
(g) incurring, issuing, assuming or guarantying, or permitting any of
the Limited Companies or APX-Brazil to incur, issue, assume or guaranty, any
material Funded Indebtedness;
(h) entering into, or terminating, or permitting any of the Limited
Companies or APX-Brazil to enter into or terminate, any Material Contract, or
amending, waiving or terminating, or permitting any of the Limited Companies or
APX-Brazil to amend, waive or terminate, any material provision of any Material
Contract other than any such entering into, amendment, waiver or termination
effected in the ordinary course of business;
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(i) any acquisition by a Seller relating to the Business or the APX
Continuing Business or by any Limited Company or APX-Brazil of securities or
assets, in a single transaction or a series of related transactions, for
consideration in excess of $150,000;
(j) waiving, terminating, amending, supplementing or modifying in any
respect any of the terms of the APX Purchase Agreement, or any of the
obligations of any Seller, Shareholder or Guarantor thereunder provided that,
after January 31, 1997, no consent of the Institutional Stockholder shall be
required with respect to, and the Sellers shall be permitted to, negotiate and
finalize, the purchase price adjustment described in Sections 2.3 and 2.4 of the
APX Purchase Agreement so long as such actions by the Sellers are undertaken in
good faith and after consultation with the Institutional Stockholder;
(k) except to the extent contemplated under, and pursuant to, the
terms of this Agreement, adopting, or permitting any Limited Company or
APX-Brazil to adopt, pension plans, profit sharing plans or other benefit plans
for employees and/or officers of the Sellers, in connection with the Business
and the APX Continuing Business, the Limited Companies or APX-Brazil, other than
the adoption or documentation of such plans as are necessary or desirable (i) to
permit MSX to comply with its covenants made in connection with the APX
Acquisition respecting replacement of Employee Benefit Plans in the APX
Continuing Business and (ii) to permit MSX to document its severance practices
with respect to the Business and the APX Continuing Business;
(l) engaging in any practice, taking any action, or entering into any
transaction outside the ordinary course of business consistent with past
practice that would have a Material Adverse Effect or a material adverse effect
on the ability of the Sellers to consummate the transactions contemplated by
this Agreement and the Operative Agreements; and
(m) entering into any agreement, arrangement, commitment or
understanding to do or engage in any of the foregoing.
8.06 Delivery of Books and Records, Removal of Property, Etc.
(a) On the Closing Date, the Sellers shall deliver or make available
to Purchaser at the locations at which the Business and the APX Continuing
Business are conducted all of the Business Books and Records and such other
Assets as are in the possession of any Seller at other locations, and if at any
time after the Closing any Seller discovers in its possession or under its
control any other Business Books and Records or other Assets, it will forthwith
deliver such Business Books and Records or other Assets to Purchaser.
(b) Within 60 days after the Closing Date, the Sellers shall remove
all assets and properties not being sold to Purchaser hereunder from the real
property purchased by Purchaser or subject to the Real Property Leases and the
Improvements. Such removal shall be at the sole cost and risk of the Sellers,
including risk of loss and damage to such assets and properties. Purchaser
shall have no liability to either Seller with respect to such removal. The
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Sellers shall be responsible for all repairs to such real property and
Improvements due to damage caused in connection with the removal of such assets
and properties.
8.07 Noncompetition. (a) Each Seller will, for a period of five years
from the Closing Date, refrain from, either alone or in conjunction with any
other Person, or directly or indirectly through its present or future
Subsidiaries:
(i) employing, engaging or seeking to employ or engage any
Person who within the prior twelve months had been an employee of Purchaser or
any of its Affiliates, unless such employee (A) resigns voluntarily (without any
solicitation from any Seller or any of its Affiliates) or (B) is terminated by
Purchaser or any of its Affiliates after the Closing Date;
(ii) causing or attempting to cause (x) any client, customer or
supplier of the Business or Purchaser to terminate or materially reduce its
business with Purchaser or any of its Affiliates or to resign or sever a
relationship with Purchaser or any of its Affiliates;
(iii) disclosing (unless compelled by judicial or administrative
process) or using any confidential or secret information relating to the
Business or Purchaser or any client, customer or supplier of the Business or
Purchaser; or
(iv) participating or engaging in or otherwise lending
assistance (financial or otherwise) to any Person participating or engaged in,
on a contract services basis to third parties in the ordinary course of
business, any of the lines of business which comprised the Business on the
Closing Date worldwide, except the foregoing shall not prevent Sellers from
participating or engaging or otherwise lending assistance (financial or
otherwise) to any Person participating or engaged in (A) any such activities
which are incidental to Sellers' manufacture of product for its customers, or
(B) that portion of the Business which involves working with OEM or other
supplier customers to plan, design, engineer, procure, manufacture, distribute
and/or install accessory related products (with all of the foregoing
collectively referred to as "Full Service Accessories Supply") so long as
Sellers' involvement for nine months after the Closing Date is as an investor
in, or supplier to, other companies (including Purchaser) who are engaged in
Full Service Accessories Supply to OEM customers, and provided further, that the
foregoing restriction shall not prevent Sellers from acquiring or otherwise
investing in a company or companies in which the gross annual sales of any such
company attributable to activities competitive to the Business does not exceed
the lesser of (i) 30% of such company's gross annual sales, and (ii)
$30,000,000. In the event that Sellers or any of their Subsidiaries acquire a
business where such 30% or $30,000,000 threshold is exceeded, not later than one
year from the date of acquisition, such Person shall divest itself of that
portion of such acquired business in excess of such threshold percentage or
amount.
(b) The parties hereto recognize that the Laws and public policies of
the various states of the United States may differ as to the validity and
enforceability of covenants similar to those set forth in this Section 8.07. It
is the intention of the parties that the provisions of this Section be enforced
to the fullest extent permissible under the Laws and policies of each
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jurisdiction in which enforcement may be sought, and that the unenforceability
(or the modification to conform to such Laws or policies) of any provisions of
this Section 8.07 shall not render unenforceable, or impair, the remainder of
the provisions of this Section. Accordingly, if any provision of this Section
8.07 shall be determined to be invalid or unenforceable, such invalidity or
unenforceability shall be deemed to apply only with respect to the operation of
such provision in the particular jurisdiction in which such determination is
made and not with respect to any other provision or jurisdiction.
(c) The parties hereto acknowledge and agree that any remedy at Law
for any breach of the provisions of this Section 8.07 would be inadequate, and
each Seller hereby consents to the granting by any court of an injunction or
other equitable relief, without the necessity of actual monetary loss being
proved, in order that the breach or threatened breach of such provisions may be
effectively restrained.
8.08 Notice and Cure. (a) Each Seller will notify Purchaser promptly
in writing of, and contemporaneously will provide Purchaser with true and
correct copies of any and all information or documents relating to, and will use
all commercially reasonable efforts to cure before the Closing Date, any event,
transaction or circumstance occurring on or after the date of this Agreement
that causes or will cause any covenant or agreement to be breached or that
renders or will render untrue any representation or warranty contained in
Article IV as if the same were made on or as of the date of such event,
transaction or circumstance which such breach of covenant or representation
would have a material adverse effect on (i) the ability of any of the Sellers,
the Limited Companies or Purchaser to consummate the transactions contemplated
by this Agreement or the Operative Agreements or (ii) the ability to conduct the
Business or the APX Continuing Business or would have a Material Adverse Effect.
(b) Notwithstanding the foregoing, each Seller will notify Purchaser promptly in
writing of, and will use all commercially reasonable efforts to cure, before the
Closing Date, any violation or breach of any representation, warranty, covenant
or agreement contained in Sections 4.01, 4.02, 5.01, 6.01 or 6.02, as the case
may be, whether occurring or arising before, on or after the date of this
Agreement. No notice given pursuant to this Section 8.08 shall have any effect
on the representations, warranties, covenants or agreements contained in this
Agreement for purposes of determining satisfaction of any condition contained
herein or shall in any way limit Purchaser's or any Person's rights to
indemnification under Article XV.
8.09 FIRPTA Certificate. MSX shall provide to Purchaser at the
Closing a duly executed certificate substantially in the form and to the effect
of Exhibit 8.09 hereto.
8.10 Tax Covenants with Respect to the Interim Period. During the
Interim Period, each Seller shall (a) prepare and file all Tax Returns including
information returns required to be filed by or with respect to the Limited
Companies, the APX Continuing Business, APX-Brazil and the Business which are
required to be filed during the Interim Period, with the appropriate Taxing
Authority, and will correctly and completely reflect any income, franchise or
other Tax liability and all other information required to be reported thereon
for such period, (b) pay all Taxes including any estimated Taxes and withholding
Taxes owed by the Limited
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Companies, the APX Continuing Business, APX-Brazil and the Business during the
Interim Period (whether or not shown on any Tax Return) so that no unpaid Tax
liability arises or exists with respect to the Limited Companies, the APX
Continuing Business, APX-Brazil or the Business that may become chargeable as a
lien upon the Limited Companies, the APX Continuing Business, APX-Brazil, the
Business, the Assets or any of the assets of any of the Limited Companies, the
APX Continuing Business, APX-Brazil or the Business, (c) comply, in good faith,
with all Tax laws applicable to the Limited Companies, the APX Continuing
Business, APX-Brazil and the Business during the Interim Period, (d) not make
any election, accounting method change, enter into any agreement or settlement,
or waive any of its rights with respect to the Taxes of the Limited Companies,
the APX Continuing Business, APX-Brazil or the Business during the Interim
Period without first obtaining the written the consent of the Institutional
Stockholder, (e) not take any position with respect to the Limited Companies,
the APX Continuing Business, APX-Brazil or the Business during the Interim
Period that is not in accordance with the past custom and practice of the
Sellers, the Limited Companies, the APX Continuing Business, APX-Brazil or the
Business, and (f) provide written notice to the Institutional Stockholder if any
Taxing Authority or other person asserts a Tax Claim against the Limited
Companies, the APX Continuing Business, APX-Brazil or the Business during the
Interim Period and shall diligently defend or prosecute such Tax Claim by all
appropriate proceedings while consulting with the Institutional Stockholder
regarding such Tax Claim.
8.11 Efforts to Consummate Transaction. Each Seller shall, and shall
cause each of the Limited Companies and APX-Brazil to take all reasonable
action, and do all things reasonably necessary or advisable in order to
consummate the transactions contemplated by this Agreement, the APX Purchase
Agreement and the Operative Agreements.
8.12 Use of MSX International, Inc. Name. MSX shall cause its name
to be changed effective no later than the first Business Day after the Closing.
8.13 Interim Period. Each Seller shall take all action necessary to
ensure the prompt (i) payment of each Permitted Payment, when due and payable,
(ii) collection and appropriate crediting of each Intercompany Credit and (iii)
processing of any claims, and collection of any proceeds, in respect of any
casualty or other loss of any of the MSX Assets under any third-party insurance
policy existing for the benefit of MSX or the MSX Assets. MSX shall also use
its reasonable best efforts to complete the consummation of the transactions
contemplated pursuant to the APX Purchase Agreement.
8.14 Audited Financial Statements. The Sellers shall use
commercially reasonable efforts to cause to be delivered to Purchaser condensed
combined balance sheets and related combined statements of income and cash flows
showing the combined financial condition of the Business (the "Financial
Statements") as of the close of the fiscal years 1994, 1995 and 1996, all
audited by Coopers & Xxxxxxx or other independent public accountants of
recognized national standing acceptable to Purchaser and accompanied by an
opinion of such accountants (which shall not be qualified in any material
respect) to the effect that such Financial Statements fairly present in all
material respects the financial condition and results of operations of the
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Business on a combined basis in accordance with GAAP consistently applied.
Sellers shall deliver the Financial Statements to Purchaser no later than (i)
December 31, 1996, in the case of the Financial Statements for the fiscal years
ended December 31, 1994 and 1995, and (ii) February 28, 1997, in the case of
the Financial Statements for the fiscal year ended December 31, 1996.
8.15 Rent. (a) MSX shall pay to Purchaser a fee with respect to the
property located at 000 Xxx Xxxxxxxxx as follows: (i) for the period from the
Closing Date through December 31, 1997, the sum of $27,083 per month, (ii) for
the period from January 1, 1998 through December 31, 1998, the sum of $22,333
per month and (iii) for the period from January 1, 1999 through July 31, 1999,
the sum of $20,750 per month. Such payments shall be made quarterly in arrears.
(b) Prior to January 1, 1997, MSX shall notify Purchaser of the total
square footage that it wishes to utilize at 000 Xxx Xxxxxxxxx, not to exceed
10,000 square feet, during the calendar year 1997, for which it will pay rent at
the rate of $18.50 per square foot. All such rent payments shall be made
monthly in advance.
8.16 APX Purchases. Sellers covenant that any acquisition of the APX
Limited Assets or of the APX-Germany Stock shall be made by one of the Limited
Companies.
ARTICLE IX
COVENANTS OF PURCHASER
Purchaser hereby covenants with the Sellers that, at all times from
and after the Effective Date until the Closing, Purchaser shall comply with all
covenants and provisions of this Article IX, except to the extent that the
Sellers may otherwise consent in writing.
9.01 Governmental and Other Approvals. Purchaser shall (a) take all
reasonable steps necessary or desirable, and proceed diligently and in good
faith, as promptly as practicable to obtain all consents, approvals or actions
of, to make or cause to be made all filings with and to give all notices to
Governmental Authorities or any other Person required on its part to consummate
the transactions contemplated hereby, including without limitation those
described in Section 7.04 the Purchaser Disclosure Schedule, (b) provide such
other information and communications to such Governmental Authorities or other
Persons as the Sellers or such Governmental Authorities or other Persons may
reasonably request and (c) cooperate with the Sellers as promptly as practicable
in obtaining all consents, approvals or actions of, making all filings with and
giving all notices to Governmental Authorities or other Persons required on the
part of Purchaser or the Sellers to consummate the transactions contemplated
hereby. Purchaser will provide prompt notification to the Sellers when any such
consent, approval, action, filing or notice referred to in clause (a) above is
obtained, taken, made or given, as applicable, and will advise the Sellers of
any communications (and, unless precluded by Law, provide copies of any
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such communications that are in writing) with any Governmental Authority or
other Person regarding any of the transactions contemplated by this Agreement.
9.02 Notice and Cure. (a) Purchaser shall notify the Sellers
promptly in writing of, and contemporaneously shall provide the Sellers with
true and correct copies of any and all information or documents relating to, and
shall use all commercially reasonable efforts to cure before the Closing, any
event, transaction or circumstance occurring on or after the date of this
Agreement that causes or will cause any covenant or agreement of Purchaser under
this Agreement to be breached or that renders or will render untrue any
representation or warranty of Purchaser contained in this Agreement as if the
same were made on or as of the date of such event, transaction or circumstance
which such breach of covenant or representation would have a material adverse
effect on (i) the ability of any of the Sellers, the Limited Companies or
Purchaser to consummate the transactions contemplated by this Agreement or the
Operative Agreements or (ii) the ability to conduct the Business or the APX
Continuing Business or would have a Material Adverse Effect. (b)
Notwithstanding the foregoing, Purchaser also shall notify the Sellers promptly
in writing of, and will use all commercially reasonable efforts to cure, before
the Closing, any violation or breach of any representation, warranty, covenant
or agreement made by Purchaser in Sections 7.01 or 7.02 of this Agreement,
whether occurring or arising before, on or after the date of this Agreement. No
notice given pursuant to this Section 9.02 shall have any effect on the
representations, warranties, covenants or agreements contained in this Agreement
for purposes of determining satisfaction of any condition contained herein or
shall in any way limit the Sellers' or any other Person's right to seek
indemnity under Article XV.
9.03 Efforts to Consummate Transactions. Purchaser shall take all
reasonable action and do all things reasonably necessary or advisable in order
to consummate the transactions contemplated by this Agreement and the Operative
Agreements.
ARTICLE X
CONDITIONS TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser hereunder are subject to the fulfillment,
at or before the Closing, of each of the following conditions (all or any of
which may be waived in whole or in part by Purchaser in its sole discretion):
10.01 Representations and Warranties. Each of the representations
and warranties made by either Seller in Article IV and Sections 6.01, 6.02,
6.06(c) and 6.08(p) of this Agreement shall be true and correct in all material
respects (if not qualified by materiality) and in all respects (if qualified by
materiality) on and as of the Closing Date as though such representation or
warranty was made on and as of the Closing Date, and each other representation
or warranty made as of the Effective Date shall have been true and correct in
all material respects on and as of such Effective Date; provided, however, that
the condition set forth in this Section 10.01 shall be deemed to be satisfied to
the extent that the aggregate amount of all Losses which
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could reasonably be expected to result from the failure of all such
representations and warranties to be true and correct in all aspects and the
breach of any agreements, covenants and obligations referred to in Section 10.02
would not exceed $15 million.
10.02 Performance. Each Seller shall have performed and complied
with, in all material respects, each agreement, covenant and obligation required
by this Agreement to be so performed or complied with by such Seller, as the
case may be, at or before the Closing; provided, however, that the condition set
forth in this Section 10.02 shall be deemed to be satisfied to the extent that
the aggregate amount of all Losses which could reasonably be expected to result
from the failure to perform all such agreements, covenants and obligations and
the failure of any representations and warranties to be true and correct as
referred to in Section 10.01 would not exceed $15 million.
10.03 Officers' Certificates. Each Seller shall have delivered to
Purchaser a certificate, dated the Closing Date and executed by the Chairman of
the Board, the President or any Vice President of such Seller, substantially in
the form and to the effect of Exhibit 10.03(A) hereto, and a certificate, dated
the Closing Date and executed by the Secretary or any Assistant Secretary of
such Seller, substantially in the form and to the effect of Exhibit 10.03(B)
hereto.
10.04 Orders and Laws. There shall not be in effect on the Closing
Date any Order or Law restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement or any of the Operative Agreements or which could reasonably be
expected to otherwise result in a material diminution of the benefits of the
transactions contemplated by this Agreement or any of the Operative Agreements
to Purchaser, and there shall not be pending or threatened on the Closing Date
any Action or Proceeding or any other action in, before or by any Governmental
Authority which could reasonably be expected to result in the issuance of any
such Order.
10.05 Governmental Consents and Approvals. All consents, approvals
and actions of, filings with and notices to any Governmental Authority necessary
to permit the parties hereto to perform their respective obligations under this
Agreement and the Operative Agreements and to consummate the transactions
contemplated hereby and thereby (a) shall have been duly obtained, made or
given, (b) shall be in form and substance reasonably satisfactory to Purchaser,
(c) shall not be subject to the satisfaction of any condition that has not been
satisfied or waived or otherwise impose any liabilities or restrictions on
Purchaser and (d) shall be in full force and effect, and all terminations or
expirations of waiting periods imposed by any Governmental Authority necessary
for the consummation of the transactions contemplated by this Agreement and the
Operative Agreements shall have occurred.
10.06 Third Party Consents. The consents (or in lieu thereof
waivers) listed in Section 10.06 of the Disclosure Schedule (a) shall have been
obtained, (b) shall be in form and substance reasonably satisfactory to
Purchaser, (c) shall not be subject to the satisfaction of any condition that
has not been satisfied or waived or otherwise impose any limitations or
restrictions on Purchaser and (d) shall be in full force and effect.
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10.07 Opinion of Counsel. Purchaser shall have received the opinions
of the General Counsel or Associate Corporate Counsel of the Sellers and the
Limited Companies, dated the Closing Date, substantially in the form and to the
effect of Exhibit 10.07 hereto.
10.08 Operative Agreements. All Operative Agreements shall have been
duly executed and delivered by the respective parties thereto other than
Purchaser and shall be in full force and effect. MascoTech shall have assigned
all of its right, title and interest in and to the contracts described in
Section 6.12(x) of the Disclosure Schedule to Purchaser, such assignment to be
in form reasonably satisfactory to Purchaser.
10.09 Resignations. The Sellers shall have delivered to Purchaser
duly signed resignations, effective at the Closing, of each of the officers and
directors of the Limited Companies and APX-Brazil listed in Section 10.09 of the
Disclosure Schedule.
10.10 Capitalization of Purchaser. MascoTech and certain officers of
Purchaser and its Subsidiaries shall have purchased newly issued capital stock
of Purchaser in the amounts described in Exhibit 10.10 hereto.
10.11 Financing. Each of MascoTech, the Institutional Stockholder
and Purchaser shall have entered into the Bridge Credit Agreement substantially
in the form attached hereto as Exhibit 10.08(A).
10.12 Release. MascoTech shall have executed and delivered a Release
in the form of Exhibit 10.12 hereto.
10.13 Discharge of Third Party Indebtedness. The Sellers shall
deliver to Purchaser evidence, reasonably satisfactory to Purchaser, of the
complete and absolute discharge and extinguishment of all Third Party
Indebtedness, exclusive of Assumed Indebtedness.
10.14 Assumed Indebtedness. The Sellers shall have delivered to
Purchaser, in form reasonably satisfactory to it, evidence of the amount of
Assumed Indebtedness.
10.15 Proceedings. All proceedings to be taken on the part of either
Seller in connection with the transactions contemplated by this Agreement and
the Operative Agreements and all documents incident thereto shall be reasonably
satisfactory in form and substance to Purchaser, and Purchaser shall have
received copies of all such documents and other evidences as Purchaser may
reasonably request in order to establish the consummation of such transactions
and the taking of all proceedings in connection therewith.
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ARTICLE XI
CONDITIONS TO OBLIGATIONS OF SELLERS
The obligations hereunder of the Sellers are subject to the
fulfillment, at or before the Closing, of each of the following conditions (all
or any of which may be waived in whole or in part by the Sellers, on the other
hand, in their sole discretion):
11.01 Representations and Warranties. Each of the representations
and warranties made by Purchaser in this Agreement shall be true and correct in
all material respects on and as of the Closing Date as though such
representation or warranty was made on and as of the Closing Date.
11.02 Performance. Purchaser shall have performed and complied with,
in all material respects, each agreement, covenant and obligation required by
this Agreement to be so performed or complied with by it at or before the
Closing.
11.03 Officers' Certificates. Purchaser shall have delivered to each
Seller a certificate, dated the Closing Date and executed by the President or
any Vice President of Purchaser, substantially in the form and to the effect of
Exhibit 11.03(A) hereto, and a certificate, dated the Closing Date and executed
by the Secretary or Assistant Secretary of Purchaser, substantially in the form
and to the effect of Exhibit 11.03(B) hereto.
11.04 Orders and Laws. There shall not be in effect on the Closing
Date any Order or Law restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement or any of the Operative Agreements.
11.05 Governmental Consents and Approvals. All consents, approvals
and actions of, filings with and notices to any Governmental Authority necessary
to permit the parties hereto to perform their respective obligations under this
Agreement and the Operative Agreements and to consummate the transactions
contemplated hereby and thereby (a) shall have been duly obtained, made or
given, (b) shall not be subject to the satisfaction of any condition that has
not been satisfied or waived and (c) shall be in full force and effect, and all
terminations or expirations of waiting periods imposed by any Governmental
Authority necessary for the consummation of the transactions contemplated by
this Agreement and the Operative Agreements shall have occurred.
11.06 Opinion of Counsel. The Sellers shall have received the
opinion of Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel to Purchaser, dated the Closing
Date, substantially in the form and to the effect of Exhibit 11.06 hereto.
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11.07 Capitalization of Purchaser. The Institutional Stockholder
shall have purchased newly issued capital stock of Purchaser in the amounts
described in Exhibit 10.10 hereto.
11.08 Operative Agreements. All Operative Agreements shall have been
duly executed by their respective parties other than the Sellers and their
Subsidiaries and shall be in full force and effect.
11.09 Proceedings. All proceedings to be taken on the part of
Purchaser in connection with the transactions contemplated by this Agreement and
the Operative Documents and all documents incident thereto shall be reasonably
satisfactory in form and substance to the Sellers, and the Sellers shall have
received copies of all such documents and other evidences as the Sellers may
reasonably request in order to establish the consummation of such transactions
and the taking of all proceedings in connection therewith.
ARTICLE XII
TAX MATTERS AND POST-CLOSING TAXES
12.01 Preparation and Filing of Tax Returns. (a) The Sellers shall
file, or cause to be filed, (i) all Tax Returns that include the Limited
Companies or relate to the Business in the Sellers' or their Affiliates' Tax
Returns for all Pre-Closing Periods, (ii) all consolidated or combined Tax
Returns that include the Limited Companies, APX-Brazil, the APX Continuing
Business and the Business for the Interim Period, and (iii) all Tax Returns that
include the Limited Companies, APX-Brazil, or that relate to the APX Continuing
Business or the Business that are required to be filed before the Closing Date.
Purchaser will furnish Tax information to the Sellers, as necessary, for
inclusion in such Tax Returns in accordance with the past custom and practice of
each of the Seller, the Limited Companies, APX-Brazil and the APX Continuing
Business. The Sellers will allow Purchaser and the Institutional Stockholder an
opportunity to review and comment upon such Tax Returns (including any amended
Tax Returns) to the extent that they relate to any of the Limited Companies,
APX-Brazil, the APX Continuing Business or the Business, but the Sellers shall
have ultimate control with respect to all Tax Returns that they are required to
file. Each of the Limited Companies, APX-Brazil and the APX Continuing Business
shall retain all books and records related to Taxes for the period up to and
including the Closing Date until the expiration of all applicable statutes of
limitations. Prior to discarding any such books and records they shall give the
Sellers the opportunity to obtain such records. Purchaser shall provide the
Sellers with access to all books and records of, the Limited Companies,
APX-Brazil and the APX Continuing Business as the Sellers may reasonably request
in connection with their filing of any Tax Returns or in connection with any
audit, dispute or controversies with any Taxing Authority. Purchaser, the
Limited Companies, APX-Brazil and the APX Continuing Business shall furnish such
information to the Sellers on a timely basis so as to permit the Sellers to file
such Tax Returns on a timely basis in accordance with the past
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custom and practice of the Sellers, each of the Limited Companies, APX-Brazil
and the APX Continuing Business.
(b) Purchaser shall file or cause to be filed all Tax Returns of, or
that include, any of the Limited Companies, APX-Brazil and the APX Continuing
Business for all taxable periods ending after the Effective Date to the extent
that any of the Limited Companies, APX-Brazil or the APX Continuing Business are
not part of a consolidated or combined Tax Return group that are required to be
filed after the Closing Date. Purchaser shall file or cause to be filed all Tax
Returns that include the Business for all taxable periods ending after the
Effective Date that are required to be filed after the Closing Date.
(c) With respect to any Straddle Period Return of any of the Limited
Companies, APX-Brazil, the APX Continuing Business or the Business which is
required to be filed after the Closing Date, Purchaser shall deliver a copy of
such Tax Return to the Sellers at least 45 calendar days prior to the due date
therefor (giving effect to any extension thereof) or within five (5) days after
the Closing Date (if later), accompanied by an allocation between the
Pre-Closing Period and the Post-Closing Period for any Taxes with respect to the
Business, or any of the Limited Companies, APX-Brazil or the APX Continuing
Business shown to be due on such Straddle Period Returns. Such Tax Returns and
allocation shall be final and binding on the Sellers, unless, within 20 calendar
days after the date of receipt by the Sellers of such Tax Return and allocation,
the Sellers delivers to Purchaser a written request for changes to such Tax
Return or allocation.
(d) In the case of each Straddle Period Return, not later than (i)
seven calendar days before the due date (including any extension thereof) for
payment of Taxes with respect to such Tax Return or (ii) in the event of a
dispute, seven calendar days after the resolution thereof either by mutual
agreement of the parties or by a determination of an independent accounting firm
reasonably satisfactory to the Sellers and Purchaser, the Sellers shall pay to
Purchaser the portion of the Taxes set forth on such Tax Return with respect to
the Business, any of the Limited Companies, APX-Brazil and the APX Continuing
Business that are allocable to the Pre-Closing Period, after giving effect to
any agreement of the parties or any determination by an independent accounting
firm, net of any payments of estimated taxes that are due and actually paid
prior to the Effective Date in respect of such Taxes or, with respect to the
Limited Companies, to the extent that it is reflected as an accrual on the
Effective Date Balance Sheet.
12.02 Allocation of Tax Liability. (a) From and after the Closing
Date, the Sellers shall pay or cause to be paid, and shall jointly and severally
indemnify Purchaser, each of the Limited Companies, APX-Brazil, the APX
Continuing Business and each of their Affiliates (each a "Tax Indemnitee") and
agree to protect, save and hold each Tax Indemnitee harmless from and against,
on a Grossed-Up Basis, the following liabilities suffered by any of the Tax
Indemnitees:
(i) any liability of a Tax Indemnitee for any Tax imposed upon
(1) any Seller Party for any period or (2) any Third Party for any Pre-Closing
Period, in each case for
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which any of the Tax Indemnitees may be liable, (x) under Section 1.1502-6 of
the Treasury regulations (or any similar provision of state, local or foreign
law), (y) as a transferee or successor or (z) by contract;
(ii) any Income Tax, Sales Tax or, with respect to the Limited
Companies, Employment Tax of a Tax Indemnitee (other than those Taxes described
in (i) above) imposed upon or relating to the Business, the MSX Assets or any of
the Limited Companies for a Pre-Closing Period;
(iii) any Income Tax or Sales Tax of a Tax Indemnitee imposed
upon or relating to the Business or the APX Continuing Business (other than the
Limited Companies or APX-Brazil) for the Interim Period; and
(iv) any Income Tax, Sales Tax or, with respect to the Limited
Companies, Employment Tax of a Tax Indemnitee arising from a breach of a
representation or warranty set out in Section 6.08 (g), (j), (l), (m), (o) and
(p) of this Agreement or a breach of a covenant set forth in Section 8.10 of
this Agreement regardless of whether a notice disclosing such breach was
delivered pursuant to Section 8.08 or set forth in Section 6.08 of the
Disclosure Schedule except for the disclosures in Sections 6.08(m) and (o) of
the Disclosure Schedule);
Notwithstanding the foregoing, the Sellers shall not be obligated to
indemnify for any Tax (A) imposed on any Third Party unless any of the Limited
Companies is liable for such Tax as a result of its entering into an arrangement
or agreement with the Third Party during any Pre-Closing Period and (B) with
respect to the Limited Companies to the extent that it is reflected as an
accrual on the Effective Date Balance Sheet.
(b) Subject to Section 12.01 above, the income of the Limited
Companies, APX-Brazil, the APX Continuing Business or the Business in a taxable
period of Purchaser will be apportioned (i) between the Pre-Closing Period and
the Post-Closing Period by closing the books as of the Effective Date and (ii)
between the period prior to the Closing Date and the period after the Closing by
closing the books as of the Closing Date.
(c) In the case of (i) franchise Taxes based on capitalization, debt
or shares of stock authorized, issued or outstanding and (ii) ad valorem Taxes,
in either case attributable to any taxable period that includes but does not end
on the Effective Date or the Closing Date, as the case may be, the portion of
such Taxes attributable to the Pre-Closing Period or the period ending on or
prior to the Closing Date, shall be the amount of such Taxes for the entire
taxable period, multiplied by a fraction the numerator of which is the number of
days in such taxable period ending on and including the Effective Date or the
Closing Date, as the case may be, and denominator of which is the entire number
of days in such taxable period; provided, however, that if any property, asset
or other right of the Sellers, any of the Limited Companies, APX-Brazil or the
APX Continuing Business is sold or otherwise transferred prior to the Closing
Date, then ad valorem Taxes pertaining to such property, asset or other right
shall be attributable entirely to the Pre-Closing Period; provided, further,
that if any property, asset or other right is
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acquired by any of the Sellers, any of the Limited Companies, APX-Brazil or the
APX Continuing Business after the Closing, then ad valorem Taxes pertaining to
such property, asset or other right shall be attributable entirely to the
Post-Closing Period.
Except as otherwise provided in Section 12.04 below, payment in full
of any amount due from any party under this Section 12.02 shall be made in
immediately available funds the later of (x) five Business Days before the date
payment of the Taxes to which such payment relates is due or (y) fifteen
Business Days after the date on which demand for payment has been delivered to
the Sellers.
12.03 Indemnity for Loss of Section 197 Deductions. Notwithstanding
anything in this Article XII to the contrary, from and after the Closing Date,
Sellers shall be obligated to make payments to each Tax Indemnitee for any Tax,
including penalties thereon arising as a result of Purchaser's inability to
claim amortization deductions with respect to any or all of the intangible MSX
Assets other than the Limited Stock to be acquired by Purchaser hereunder (the
"Amortization Deductions") in an amount at least equal to the excess of (A)
two-thirds of the Purchase Price allocable to the Business and the Limited
Stock, taking into account any adjustments made pursuant to Section 3.01(b)
which relate to the Business or the Limited Stock over (B) the book value of the
MSX Assets (other than the Limited Companies or any asset classified as an
intangible asset for federal Income Tax purposes) over the Assumed Liabilities
relating to the MSX Assets (other than the Limited Companies). With regard to
an indemnification payment for a Tax resulting from a loss of an Amortization
Deduction where such Amortization Deduction has not resulted in a tax deduction
(regardless of whether such deduction resulted in a tax benefit) to the Tax
Indemnitee (either because such Amortization Deduction has not been claimed for
a past, current or future period or because of the availability of other losses
or deductions for the period in which it was claimed), the amount of any payment
pursuant to this Section 12.03 shall be calculated by (A) multiplying the
Amortization Deduction by the maximum federal and state tax rate net of federal
tax benefit in effect on the Closing Date and (B) taking the present value of
such amount to the Closing Date using a discount rate equal to 9%, and adding to
such product interest at the rate of 9% per annum to the date of payment (such
interest being referred to as "Section 12.03 Interest"). Notwithstanding the
foregoing, Sellers shall not be obligated to indemnify for any Tax, interest,
penalties or Section 12.03 Interest resulting from a loss of Amortization
Deductions as set forth under this Section 12.03 unless and until Purchaser is
not able to or reasonably believes that it is not able to claim the Amortization
Deductions by reason of (x) the promulgation of Treasury regulations (whether
temporary, proposed or final) under Section 197 of the Code or a published or
private ruling or other administrative pronouncement after the date of this
Agreement, (y) the determination, whether proposed or final, by the Internal
Revenue Service that all or a portion of the Amortization Deductions are
disallowed, or (z) a judicial determination that all or a portion of the
Amortization Deductions are disallowed, and provided further that the amount of
such indemnification payment attributable to Taxes (other than penalties and
Section 12.03 Interest) shall not exceed $3,500,000. If a payment has been made
by Sellers to a Tax Indemnitee under this Section 12.03 and the Tax Indemnitee
becomes able to claim all or any portion of such
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Amortization Deduction, the Tax Indemnitee shall return the portion of such
payment attributable to such Amortization Deduction, with interest at the rate
of 9% per annum, to Sellers.
12.04 Tax Contests. (a) If any Taxing Authority asserts a Tax Claim
relating to any Pre-Closing Period, then the party (including any Subsidiary of
such party) receiving any notice related to such Tax Claim shall promptly
provide written notice thereof to the other party or parties hereto.
(b) The Sellers shall have the sole right to diligently defend or
prosecute, at their sole expense, such Tax Claim; provided that (i) the Sellers
are obligated (either by the Sellers' written acknowledgment or by determination
as described below) to indemnify Purchaser for such Tax Claim under this Article
XII, (ii) the Sellers shall not, without the prior written consent of Purchaser
(which consent shall not be unreasonably withheld), enter into any compromise or
settlement of such Tax Claim that would result in any Tax detriment to any Tax
Indemnitee for any Post-Closing Period unless such position is consistent with
positions previously taken by the Limited Companies, APX-Brazil or the APX
Continuing Business, and (iii) if a Tax Indemnitee is requested by the Sellers
to pay or cause to be paid the Tax claimed and to xxx for a refund, then the
Sellers shall advance to the Tax Indemnitee, on an interest-free basis and a
Grossed-Up Basis, the amount of the Tax claimed. The Sellers shall keep
Purchaser, the Limited Companies, APX-Brazil and the APX Continuing Business
informed of any developments and events relating to such Tax Claim (including
providing Purchaser, the Limited Companies, APX-Brazil and the APX Continuing
Business with copies of all written materials relating to such Tax Claim), and
Purchaser, the Limited Companies, APX-Brazil and the APX Continuing Business
shall be entitled, at its own expense, to attend, but not participate in or
control, all conferences, meetings and proceedings relating to such Tax Claim.
Purchaser, the Limited Companies, APX-Brazil or the APX Continuing Business
agrees that it will cooperate with the Sellers and their counsel in the defense
or prosecution of any such Tax Claim to the extent reasonably requested by the
Sellers in writing. If the Sellers contest their indemnification obligations
with respect to any Tax Claim under this Article XII, the Sellers and Purchaser
shall undertake in good faith to resolve this issue. If the Sellers and
Purchaser are unable to resolve the issue within 10 days, the Sellers and
Purchaser shall engage jointly an independent nationally recognized law firm to
determine whether the Sellers' indemnification obligations under this Article
XII encompass such Tax Claim. The determination of such law firm shall be final
and binding on the parties solely for purposes of determining whether the
Sellers shall have the right to defend or prosecute a Tax Claim; provided,
however, that if the party against whom the determination is made does not offer
the other party the opportunity to control the defense or prosecution of such
Tax Claim, the determination shall be final and binding on such party. The fees
and other costs charged by such law firm in making such determination shall be
paid by the party against whom the determination is made.
(c) The Sellers and Purchaser jointly shall defend or prosecute any
Tax Claim relating to any taxable period which includes (but does not end on)
the Effective Date, with control of the defense or prosecution being undertaken
by the party with the greatest amount in interest based upon the amount of Taxes
asserted in such Tax Claim. All costs, fees and
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expenses paid to Third Parties in the course of the defense or prosecution of
such Tax Claim shall be borne by the Sellers and Purchaser in the same ratio as
the ratio in which, pursuant to the terms of this Agreement, the Sellers and
Purchaser would share the responsibility for payment of such Taxes.
12.05 Cooperation. Each party hereto shall, and shall
cause its Subsidiaries and Affiliates (determined assuming that the Sellers are
not Affiliates of Purchaser following the Closing) to, provide to each of the
other parties such cooperation and information as any such party reasonably may
request in filing any Tax Return, amended Tax Return or claim for refund,
determining a liability for Taxes or a right to refund of Taxes or conducting
any audit or other proceeding in respect of Taxes. Such cooperation and
information shall include providing copies of all relevant portions of relevant
Tax Returns (together with relevant accompanying schedules and relevant
workpapers, relevant documents relating to rulings or other determinations by
Taxing Authorities and relevant records concerning the ownership and Tax basis
of property, in each case which any such party, Subsidiary or Affiliate may
possess). Each party shall, and shall cause its Subsidiaries and Affiliates
(determined as provided above) to, make its employees reasonably available on a
mutually convenient basis at its cost to provide explanation of any documents
or information so provided. Subject to the preceding sentence, each party
required to file (or cause the filing of) Tax Returns pursuant to this Article
XII shall bear all costs of filing such Tax Returns.
12.06 Payments of Transfer Taxes and Fees. The Sellers
shall pay all Transfer Taxes arising out of or payable in connection with the
transactions contemplated by this Agreement and the APX Acquisition, and shall
file all necessary documentation and Tax Returns with respect to such Transfer
Taxes. The Purchaser shall promptly, upon receipt of written request therefor,
reimburse the Sellers for (a) 50% of all amounts paid pursuant to the preceding
sentence that are attributable to payments under this Agreement with respect to
the transfers relating to the Business contemplated by this Agreement and (b)
100% of all amounts paid pursuant to the preceding sentence that are
attributable to transfers relating to the APX Continuing Business contemplated
by this Agreement.
12.07 Miscellaneous. If a party to this Agreement takes
any action which constitutes a breach of this Article XII, such party shall
indemnify the other party, on a Grossed-Up Basis, for any incremental liability
for Tax suffered by such other party (which (i) in the case of the Sellers,
shall include its Affiliates (determined assuming that none of Purchaser, the
Limited Companies, APX-Brazil or the APX Continuing Business is an Affiliate of
the Sellers following the Closing) and (ii) in the case of Purchaser, shall
include Tax Indemnitees) arising from such action.
12.08 Conflict. In the event of a conflict between the
provisions of this Article XII and any other provision of this Agreement, the
provisions of this Article XII shall control. Without limiting the generality
of the foregoing, the indemnification obligations of the parties under this
Article XII shall not be subject to (i) the limitations (including time and
amount limitations) set forth in Section 14.01, Section 15.01 (other than with
respect to an indemnity for
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Sales Taxes or, with respect to the Limited Companies, Employment Taxes that
are subject to the basket limitation of Section 15.01(a)(i)) and Section 15.02
below or (ii) the procedures relating to Third Party Claims set forth in
Section 15.02 below.
12.09 Survival. All rights, obligations and covenants
under this Article XII, and the representations and warranties contained in
Section 6.08(g), (j), (l), (m), (o), and (p) and Section 8.10 above (but in
each case only to the extent such representations and warranties relate to
Income Tax, Sales Tax and, with respect to the Limited Companies, Employment
Tax), shall survive the Closing and continue indefinitely (subject to any
applicable statutes of limitations, but without regard to any extension or
waiver if the applicable statutory period of limitations granted without the
consent of the Sellers, which consent shall not be unreasonably withheld, by
Purchaser, any of the Limited Companies, APX-Brazil or the APX Continuing
Business after the Closing; provided that the Sellers' consent shall not be
required for a valid extension or waiver if the Sellers had an opportunity to
contest but did not contest).
ARTICLE XIII
EMPLOYEE BENEFITS MATTERS
13.01 Hiring of Employees.
(a) Purchaser shall offer employment to United States
employees of the Sellers actively engaged in the Business and the APX
Continuing Business as of the Closing, and, subject to the provisions of this
Article XIII, may hire such employees on such terms and conditions as shall be
mutually agreeable to Purchaser and such employees. All such employees who
accept employment with Purchaser are hereinafter referred to as the
"Transferred Employees."
(b) The Sellers shall comply with the Worker Adjustment
and Retraining Notification Act, 29 U.S.C. Section 2101, et seq., ("WARN") and
any applicable similar plant closing law of any state including the provision
of notices required thereunder, and, jointly and severally, shall indemnify,
hold harmless and, at the option of Purchaser, defend Purchaser from and
against any and all liabilities, obligations and costs, including reasonable
attorneys' fees, arising out of or resulting from any failure by the Sellers to
serve notice or to otherwise comply with WARN or such applicable state law.
13.02 Cessation of Participation; Compliance. Except as
otherwise provided in this Article XIII, effective as of the Closing, the
Sellers shall take all such actions as may be necessary to cause all
Transferred Employees to cease to participate in all Employee Benefit Plans and
Employee Benefit Arrangements maintained or contributed to by the Sellers, and
Purchaser shall have no obligations, and shall be indemnified by Sellers for
any liability, thereunder or with respect thereto. The Sellers shall at all
times during the Interim Period operate and administer each Employee Benefit
Plan disclosed on Section 6.09(a) of the Disclosure Schedule and each Employee
Benefit Arrangement disclosed on Section 6.09(f) of the
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Disclosure Schedule and each Foreign Benefit Plan disclosed on Section 6.09(g)
of the Disclosure Schedule in compliance with all its terms all applicable law,
including ERISA and the Code.
13.03 401(k) Plans.
(a) Effective as of the Closing Date, the Sellers' Boards
of Directors shall vote to terminate the Sellers' sponsorship of the MSX
International, Inc. 401(K) Plan (the "Assumed 401(k) Plan"), and Purchaser's
Board of Directors shall vote to have the Purchaser assume sponsorship of, and
all liabilities pertaining to, the Assumed 401(k) Plan. Effective as of the
Closing Date, the Sellers shall assign to Purchaser their rights under the
trust agreement for the Assumed 401(k) Plan.
(b) The Sellers shall direct the trustee(s) of each of
the MascoTech, Inc. Salaried Savings Plan and the MascoTech, Inc. Hourly
Savings Plan (the "Seller 401(k) Plans") to segregate the portion of each
investment fund thereunder attributable to the aggregate individual account
balances (including outstanding participant loans) of Interim Employees (to the
extent not distributed prior to the Closing) Transferred Employees (whether or
not vested), and to transfer in cash or in kind, as determined by Purchaser,
such segregated portion of each investment fund to the Assumed 401(k) Plan.
The transfer shall be effected as soon as is practicable after the Closing
Date, and individual account balances shall be determined as of the valuation
date coincident with the date of such transfer.
(c) The Sellers shall at all times during the Interim
Period operate and administer the Assumed 401(k) Plan in compliance with all
applicable law, including ERISA and the Code.
13.04 Defined Benefit Plan. Effective as of the Closing
Date, the MSX Board of Directors shall vote to terminate the Seller's
sponsorship of the Autodynamics Corporation of America Employees' Pension Plan
(the "Assumed Pension Plan"), and Purchaser's Board of Directors shall vote to
have the Purchaser assume sponsorship of, and all liabilities pertaining to,
the Assumed Pension Plan. Effective as of the Closing Date, the Sellers shall
assign to Purchaser their rights under the trust agreement for the Assumed
Pension Plan. The Sellers shall at all times during the Interim Period operate
and administer the Assumed Pension Plan in compliance with all applicable law,
including ERISA and the Code.
13.05 Multiemployer Plan. This Section 13.05 applies to
the IAM and Aerospace Workers, Xxxxxx Local Lodge PM 2848 Multiemployer Pension
Plan, which shall be referred to in this Section 13.05 as the "Plan." It is
intended that the purchase of the Business and the APX Continuing Business
under this Agreement will not result in a complete or partial withdrawal from
the Plan. This Section 13.05 is intended to meet the applicable requirements
of Section 4204 of ERISA, and shall be construed accordingly. Accordingly,
Purchaser and the Sellers agree as follows:
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(a) Purchaser shall assume an obligation to contribute to
the Plan with respect to the Business and the APX Continuing Business for
substantially the same number of contribution base units (as defined by the
Plan) for which the Sellers had an obligation to contribute to the Plan with
respect to the Business and the APX Continuing Business as of the day before
the Closing Date.
(b) Prior to the first day of the first Plan year
commencing after the Closing Date, Purchaser and the Sellers shall jointly
apply to the Plan for a variance from the requirement of Section 4204(a)(1)(B)
of ERISA, that a bond be obtained or an amount be held in escrow as provided in
said Section. In the event that the Plan determines that the request does not
qualify for such variance, Sellers shall arrange for, and Purchaser shall pay
for and obtain any required bond or establish any required escrow within 30
days after the date on which the Sellers or Purchaser receive notice of the
Plan's decision, and shall maintain such bond or escrow through the earliest
of:
(i) the date a variance is obtained from the
Plan;
(ii) the date a variance or exemption is obtained
from the Pension Benefit Guaranty
Corporation; or
(iii) the last day of the fifth Plan year
immediately following the Closing Date;
which bond or escrow shall be paid to the Plan if Purchaser withdraws therefrom
or fails to make a contribution to the Plan when due, at any time during the
first five Plan years immediately following the Closing Date. Sellers agree to
prepare any required application for variance and Purchaser agrees to pay the
cost of any required bond or escrow under the foregoing provisions (unless such
bond or escrow is required because of the failure of the Sellers to cooperate
with the joint application for a variance).
(c) If Purchaser withdraws from the Plan in a complete
withdrawal, or a partial withdrawal with respect to the Business or the APX
Continuing Business, on or before the last day of the fifth Plan year
immediately following the Closing Date, the Sellers shall be secondarily liable
for any withdrawal liability they would have had to the Plan with respect to
the Business or the APX Continuing Business (but for the provisions of Section
4204 of ERISA) if the liability of Purchaser with respect to the Plan is not
paid.
(d) In the event of any withdrawal by Purchaser during
the five Plan years immediately following the Closing Date, or in the event of
any breach by Purchaser of its commitments under paragraphs 13.05(a) or (b)
above, Purchaser shall indemnify the Sellers for any withdrawal liability,
whether complete or partial (including all reasonable accounting, actuarial,
and legal expenses incident thereto), assessed against the Sellers on account
of the Business or the APX Continuing Business, including without limitation
any withdrawal liability assessed against the Sellers pursuant to Section
13.05(c) above. The Sellers shall indemnify
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Purchaser for any withdrawal liability, whether complete or partial (including
all reasonable accounting, actuarial, and legal expenses incident thereto),
assessed against Purchaser as a result of any failure by the Sellers to comply
with the obligations imposed on the Sellers by Section 4204(a) of ERISA.
(e) Purchaser shall assume Sellers' obligation, if any,
to make any payment in respect of any liability assessed against Xxxxxx Xxxxx
in the matter of Xxxxxx x. Xxxxxxxxxxx, No. 91-CV-72595-DT attributable to his
service as a trustee of the Plan.
(f) Purchaser shall assume Sellers' liability, if any, to
make any unreimbursed or unindemnified payment of withdrawal liability to the
Plan arising out of the APX Acquisition.
13.06 Other Benefits. Purchaser shall assume the Sellers'
obligations, if any, with respect to the following:
(a) claims by Interim Employees (to the extent not
reflected as a Permitted Payment in the determination of Interim Period Cash
Flow) and Transferred Employees that are reported after the Closing Date but
incurred prior to the Closing Date and properly payable under the Sellers'
group medical plans;
(b) the provision of continuation health coverage as
required under Part 6 of Subtitle B of Title I of ERISA or Section 4980B of the
Code with respect to any former employee of the Business or the APX Continuing
Business (or any of their dependents);
(c) the provision of health benefits to 17 employees
(and their eligible dependents) who retired prior to the Closing Date as
described in Coopers & Xxxxxxx'x actuarial report dated June 19, 1996;
(d) to pay or provide accrued but unused vacation to
Interim Employees (to the extent not reflected as a Permitted Payment in the
determination of Interim Period Cash Flow) and Transferred Employees;
(e) the provision of severance benefits to Interim
Employees (to the extent not reflected as a Permitted Payment in the
determination of Interim Period Cash Flow) and Transferred Employees (other
than such benefits, if any, that become payable solely by reason of
consummation of the transactions contemplated by this Agreement); and
(f) the payment of compensation deferred or credited
prior to the Closing Date with respect to Interim Employees (to the extent not
reflected as a Permitted Payment in the determination of Interim Period Cash
Flow) and Transferred Employees pursuant to the First Amended and Restated
Creative Industries Group, Inc. Deferred Compensation Plan, provided, however,
that effective as of the Closing Date, the Sellers shall assign to Purchaser
their rights under the "rabbi" trust agreement for such plan with respect to
such employees.
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(g) Service Credit, etc. Periods of service prior to
the Closing shall be credited for purposes of determining eligibility, vesting
and benefit entitlement under all benefit plans, programs and policies
maintained by Purchaser after the Closing, and amounts credited prior to the
Closing under flexible spending accounts and for purposes of determining health
plan deductibles and copayments under provisions of Sellers' plans, programs
and policies shall be credited after the Closing under corresponding provisions
of the Purchaser's plans, programs and policies.
13.07 No Employee Rights. Nothing in this Article XIII
express or implied shall confer upon any Interim Employee, Transferred
Employee, dependent or beneficiary or other employee or legal representative
thereof any rights or remedies, including any right to employment, continued
employment for any specified period, or compensation or benefits of any nature
or kind whatsoever under or by reason of this Agreement.
13.08 Right to Terminate or Modify Plans. Nothing in this
Article XIII express or implied shall be construed to prevent Purchaser from
terminating or modifying to any extent or in any respect any benefit plan that
Purchaser may assume, establish or maintain pursuant to this Agreement or
otherwise.
ARTICLE XIV
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS
14.01 Survival of Representations and Warranties.
All of the representations and warranties of the Sellers
contained in Article IV and Sections 5.01(a), 6.01 and 6.02 and the
representations and warranties contained in Section 6.09 (but only to the
extent that they relate to liabilities due to the PBGC, the U.S. Internal
Revenue Service or the U.S. Department of Labor) shall survive the Closing and
continue in full force and effect forever thereafter (subject to any applicable
statutes of limitations). The representations and warranties of the Sellers
contained in Section 6.08 and Section 6.09 (except to the extent that the
survival of such representations and warranties in Section 6.09 is governed by
the first sentence of this Section 14.01) shall survive the Closing and
continue in full force and effect until the third anniversary of the Closing
Date. The representations and warranties of the Sellers contained in Sections
6.05 and 6.16 shall survive the Closing and continue in full force and effect
until the seventh anniversary of the Closing Date and the sixth anniversary of
the Closing Date, respectively. Subject to Section 12.09, the representations
and warranties of the Sellers contained in Section 6.08, to the extent that
such representations and warranties relate to Income Taxes, Sales Taxes, and,
with respect to the Limited Companies, Employment Taxes, shall not survive the
Closing and, from and after the Closing, shall be of no further force or
effect. All of the other representations and warranties of the Sellers
contained in Article VI shall survive the Closing and continue in full force
and effect until the second anniversary of the Closing Date.
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Notwithstanding the foregoing, if Purchaser sells a majority of the capital
stock of any of the Limited Companies or APX-Brazil, or if Purchaser or any of
the Limited Companies or APX-Brazil sells substantially all of its assets
during any applicable survival period to any third party (other than any
Affiliate of Purchaser), regardless of how such sale is structured (including
any such sale structured as a merger, consolidation, reorganization, exchange,
or issuance of capital stock), then all of the representations and warranties
of the Sellers contained in Article VI, insofar as such representations and
warranties relate to the entity or assets sold, shall expire on the earlier of
(i) the date such representations and warranties would otherwise expire in
accordance with the preceding sentences of this Section 14.01 or (ii) the third
anniversary of the Closing Date, it being understood that if such sale or
transaction takes place after the third anniversary of the Closing Date, such
representations and warranties which have not theretofore expired shall expire
immediately prior to the consummation of such sale or other transaction;
provided that this sentence shall not apply to any claim (x) resulting from a
breach of the representations and warranties of the Sellers contained in
Sections 6.01, 6.02 and 6.09 (but, in the case of the representations and
warranties contained in Section 6.09, only to the extent that they relate to
liabilities due to the PBGC, the U.S. Internal Revenue Service or the U.S.
Department of Labor) or (y) by a third party (other than a third party
purchasing all or a portion of such stock or assets or any Affiliate of such
third party) against any of the Indemnified Purchaser Parties, except to the
extent such claim relates to or arises from the offering or sale of such stock
or assets.
All of the representations and warranties of Purchaser
contained in Article VII shall survive the Closing and continue in full force
and effect forever thereafter (subject to any applicable statutes of
limitations).
Notwithstanding the foregoing, any representation or warranty
shall survive the time at which it would otherwise expire in accordance with
this Section 14.01 to the extent that Purchaser or the Sellers, as the case may
be, makes a written claim for indemnification for breach of that representation
or warranty (setting forth in reasonable detail the factual and contractual
bases upon which such Party is entitled to indemnification under this
Agreement) prior to the time at which that representation or warranty would
otherwise expire.
Except as set forth in this Section 14.01 or in Article XVI,
the provisions of this Agreement shall survive the Closing and shall continue
indefinitely.
ARTICLE XV
INDEMNIFICATION
15.01 Indemnification Provisions for Benefit of Purchaser.
(a) The Sellers jointly and severally shall indemnify and
hold harmless, on a Grossed-up Basis, Purchaser and its Affiliates from and
against any Adverse Consequences that
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any of Purchaser and its Affiliates (determined, in each case, assuming that
neither of the Sellers is an Affiliate of Purchaser following the Closing, but
including the Limited Companies and APX-Brazil) and their respective officers,
employees, directors, stockholders, agents and representatives (collectively,
the "Indemnified Purchaser Parties") shall suffer or incur to the extent
resulting from, arising out of or relating to: (x) any breach by the Sellers
of any of their representations, warranties or covenants contained herein,
other than any representations and warranties contained in Section 6.08 to the
extent related to Income Taxes, Sales Taxes, and, with respect to the Limited
Companies, Employment Taxes (which are governed by Article XII) or to the
extent any breach thereof results in any liability related to any other Tax
arising in the Post-Closing Period, (y) any Retained Liability, (z) any of the
Non-Core Businesses described in Section 6.05 of the Disclosure Schedule, and
(zz) one-half of the Losses incurred by Purchaser relating to claims arising
out of the facts and circumstances giving rise to the litigation captioned
Auto/Video, Inc. v. Chrysler Motors Corporation and Creative Industries Group,
Inc.; provided, however, that with respect to breaches of the representations
and warranties contained in Article VI or the indemnification obligations of
the Sellers pursuant to Section 12.02 to the extent such indemnification
relates to Sales Taxes and, with respect to the Limited Companies, Employment
Taxes:
(i) The Sellers shall not be obligated to make payments
to the Indemnified Purchaser Parties for the first $1 million of Adverse
Consequences resulting from such breaches of representations and warranties or
from their obligations to indemnify Purchaser pursuant to Section 12.02 to the
extent such indemnity relates to Sales Taxes and, with respect to the Limited
Companies, Employment Taxes, it being understood that the $1 million limitation
will not apply to breaches of the representations and warranties in Sections
6.01, 6.02, 6.05, 6.09 and 6.21 (but, with respect to Section 6.09, only to the
extent that such breaches relate to the liabilities due to the PBGC, the U.S.
Internal Revenue Service or the U.S. Department of Labor); provided that for
purposes of this paragraph (i) only individual claims (or groups of related
claims or claims of the same Person having substantially similar factual and
legal bases) resulting in Adverse Consequences in excess of $30,000 will be
considered in determining whether the $1 million amount is exceeded; provided
further that all amounts paid by Purchaser pursuant to Section 18.18 shall be
considered in determining whether the $1 million amount is exceeded; and
(ii) The Sellers shall not be obligated to make payments
to the Indemnified Purchaser Parties of more than $20 million (the "Cap") in
respect of Adverse Consequences resulting from such breaches of representations
and warranties, it being understood, however, that (A) the Cap shall not apply
to any Adverse Consequences resulting from breaches of the representations and
warranties contained in Sections 6.01, 6.02, 6.05, 6.08 (but, with respect to
Section 6.08, only to the extent that such breaches relate to Employment Taxes
other than with respect to the Limited Companies), 6.09 and 6.21, and (B) any
payments made by the Sellers in respect of Adverse Consequences for breaches of
the representations and warranties referred to in clause (A) above other than
any payments made by the Sellers in respect of Adverse Consequences resulting
from breaches of representations and warranties contained in Sections 6.02 and
6.09 (but, in the case of Section 6.09, only to the extent that such breaches
relate to the
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liabilities due to the PBGC, the U.S. Internal Revenue Service or the U.S.
Department of Labor)) shall nonetheless be taken into account in determining
whether the Cap is exceeded.
To the extent necessary in order to avoid double counting, all qualifications
in Article VI (other than the first sentence of Section 6.04 and the last
sentence of 6.03) requiring a Material Adverse Effect in order for a particular
representation or warranty to have been breached shall be disregarded for
purposes of this Article XV.
(b) Indemnification Provisions for Benefit of the
Sellers. Purchaser shall indemnify and hold harmless, on a Grossed-Up Basis,
each of the Sellers and its Affiliates from and against any Adverse
Consequences that any of the Sellers and their respective Affiliates
(determined, in each case, assuming that Purchaser, the Limited Companies,
APX-Brazil and their respective Subsidiaries are not Affiliates of the Sellers)
and their respective officers, employees, directors, agents and representatives
(collectively, the "Indemnified Seller Parties" and, together with the
Indemnified Purchaser Parties, the "Indemnified Parties") shall suffer
resulting from, arising out of or relating to: (i) any breach by Purchaser of
any of its representations, warranties or covenants contained herein or (ii)
any Assumed Liabilities, other than any Assumed Liabilities to the extent that
either Seller has an obligation to indemnify Purchaser with respect to such
Assumed Liabilities pursuant to Section 15.01(a).
15.02 Method of Asserting Claims. All claims for
indemnification by any Indemnified Party under Section 15.01 will be asserted
and resolved as follows:
(a) In order for an Indemnified Party to be entitled to
any indemnification provided for under Section 15.01 in respect of, arising out
of or involving a claim or demand made by any Person not a party to this
Agreement against the Indemnified Party (a "Third Party Claim"), the
Indemnified Party must deliver a Claim Notice to the Indemnifying Party within
30 Business Days after receipt by such Indemnified Party of written notice of
the Third Party Claim; provided, however, that failure to give such Claim
Notice shall not affect the indemnification provided hereunder except to the
extent the Indemnifying Party shall have been actually prejudiced as a result
of such failure. The Indemnifying Party shall promptly mitigate any such
prejudice to the extent possible.
(b) If a Third Party Claim is made against an Indemnified
Party, the Indemnifying Party shall be entitled to participate in the defense
thereof and, if it so chooses, to assume the defense thereof with counsel
selected by the Indemnifying Party, which counsel must be reasonably
satisfactory to the Indemnified Party. Should the Indemnifying Party so elect
to assume the defense of a Third Party Claim, the Indemnifying Party shall not
be liable to the Indemnified Party for legal expenses subsequently incurred by
the Indemnified Party in connection with the defense thereof, but shall
continue to pay for any expenses of investigation or any Loss suffered. If the
Indemnifying Party assumes such defense, the Indemnified Party shall have the
right to participate in the defense thereof and to employ counsel, at its own
expense, separate from the counsel employed by the Indemnifying Party. If (i)
the Indemnifying Party shall not assume the defense of a Third Party Claim with
counsel satisfactory to the
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Indemnified Party within five Business Days after delivery of any Claim Notice,
or (ii) legal counsel for the Indemnified Party notifies the Indemnifying Party
that there are or may be legal defenses available to the Indemnified Party or
to other Indemnified Parties which are different from or additional to those
available to the Indemnifying Party, which, if the Indemnified Party and the
Indemnifying Party were to be represented by the same counsel, would constitute
a conflict of interest for such counsel or prejudice prosecution of the
defenses available to such Indemnified Party, or (iii) if the Indemnifying
Party shall assume the defense of a Third Party Claim and fail to diligently
prosecute such defense, then in each such case the Indemnified Party, by notice
to the Indemnifying Party, may employ its own counsel and control the defense
of the Third Party Claim and the Indemnifying Party shall be liable for the
reasonable fees, charges and disbursements of counsel employed by the
Indemnified Party; and the Indemnified Party shall be promptly reimbursed for
any such fees, charges and disbursements, as and when incurred. Whether the
Indemnifying Party or the Indemnified Party controls the defense of any Third
Party Claim, the parties hereto shall cooperate in the defense thereof. Such
cooperation shall include the retention and provision to the counsel of the
controlling party of records and information which are reasonably relevant to
such Third Party Claim, and making employees available on a mutually convenient
basis to provide additional information and explanation of any material
provided hereunder. The Indemnifying Party shall have the right to settle,
compromise or discharge a Third Party Claim (other than any such Third Party
Claim in which criminal conduct is alleged) without the Indemnified Party's
consent if such settlement, compromise or discharge (i) constitutes a complete
and unconditional discharge and release of the Indemnified Party, and (ii)
provides for no relief other than the payment of monetary damages and such
monetary damages are paid in full by the Indemnifying Party.
(c) In the event any Indemnified Party should have a
claim under Section 15.01 against any Indemnifying Party that does not involve
a Third Party Claim, the Indemnified Party shall deliver an Indemnity Notice
with reasonable promptness to the Indemnifying Party. The failure by any
Indemnified Party to give the Indemnity Notice shall not impair such party's
rights hereunder except to the extent that an Indemnifying Party demonstrates
that it has been irreparably prejudiced thereby. The Indemnifying Party shall
promptly mitigate any such prejudice to the extent practicable. If the
Indemnifying Party notifies the Indemnified Party that it does not dispute the
claim described in such Indemnity Notice or fails to notify the Indemnified
Party within the Dispute Period whether the Indemnifying Party disputes the
claim described in such Indemnity Notice, the Loss in the amount specified in
the Indemnity Notice will be conclusively deemed a liability of the
Indemnifying Party under Section 15.01 and the Indemnifying Party shall pay the
amount of such Loss to the Indemnified Party on demand. If the Indemnifying
Party has delivered notice disputing its liability to the Indemnified Party (a
"Dispute Notice") within the Dispute Period, the Indemnifying Party and the
Indemnified Party will proceed in good faith to negotiate a resolution of such
dispute, and if not resolved through negotiations within the Resolution Period,
such dispute shall be resolved by litigation in a court of competent
jurisdiction.
(d) The rights accorded to Indemnified Parties hereunder
shall be in addition to any rights that any Indemnified Party may have at law
or in equity, under federal and state
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securities laws, by separate agreement (including, without limitation, under
the Operative Agreements) or otherwise.
15.03 Certain Intercompany Relationships. Except for
Assumed Indebtedness, the Liabilities set forth in Section 15.03 of the
Disclosure Schedule and the obligations of Purchaser under this Agreement or
the Operative Agreements, all Contracts, Licenses and other agreements,
undertakings, representations, obligations and transactions to which any of the
Limited Companies and their Subsidiaries on the one hand and any of the
Sellers, their remaining Subsidiaries and Affiliates on the other hand, or to
which any of the Sellers, their remaining Subsidiaries and Affiliates are a
party thereto and which relate to the Business or the APX Continuing Business
shall be deemed terminated as of the Closing, will have no further force or
effect and will result in no further obligations or liabilities.
15.04 Environmental Matters.
(a) In no event will the provisions of this Section
15.04, or any exercise by Sellers of their rights under this Section 15.04,
increase the obligations of Sellers with respect to environmental matters
involving the Limited Companies, the Business or any of the MSX Assets beyond
what is provided in Section 15.01.
(b) Reporting, Remediation, and Compliance. After the
Closing, and with respect to any environmental matters involving any Site for
which the Sellers are responsible under Section 15.01(a) above (ignoring, for
this purpose, the limitations in the proviso to Section 15.01(a) above), the
Sellers shall have the exclusive right (provided that the Sellers exercise such
right in a timely and diligent manner) to undertake the following activities,
with the prior written consent of Purchaser, such consent not to be
unreasonably withheld: (i) obtain any tests, reports, and surveys necessary to
define and delineate the extent of any contamination or noncompliance, (ii)
contact Governmental Authorities, make any reports to such Authorities, submit
any remediation or compliance plans to such Authorities, negotiate with such
Authorities, and otherwise deal with such Authorities, (iii) prepare the work
plan for any remediation or correction of noncompliance, and (iv) conduct or
direct any such remediation or correction of noncompliance. Notwithstanding
the foregoing, the Sellers shall provide Purchaser with (i) copies of all
workplans for, and test results, surveys and other data generated by, the
investigations performed by the Sellers or their consultants promptly upon the
availability thereof, (ii) final and any prior drafts of all reports, plans and
other documents to be filed with any Governmental Authority upon the
availability thereof and in any event prior to any such filing being made,
(iii) an opportunity to meet with the Sellers and their representatives prior
to and following any substantive communications with Governmental Authorities,
and (iv) a timely opportunity to discuss and comment upon the foregoing and any
other proposed determinations or actions relating to the investigation, testing
and remediation of any Site and the reporting thereon with Governmental
Authorities. In order to carry out its obligations under this Agreement, the
Sellers shall have continuing reasonable access to the affected Sites;
provided, however, that the Sellers shall provide Purchaser with reasonable
notice prior to the Sellers or any of their agents, representatives, employees,
consultants or contractors entering the relevant
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Site. The Sellers shall have the right to perform at the relevant Sites any
remediation or actions necessary to achieve compliance by any commonly accepted
or reasonable means, with the prior written consent of Purchaser (such consent
not to be unreasonably withheld), including the right to construct and maintain
wells, dikes, "caps", covers and other impoundments, barriers, pump and treat
systems, soil vapor extraction systems, other testing and treatment equipment
and systems, related buildings and structures, and supporting utility services
on such Sites, the right to perform excavations and exhumations of soils and
subsurface materials and withdrawals and reinjections of groundwater on such
Sites, and the right to impose deed and land use restrictions and institutional
controls on such Sites; provided, however, that the Sellers will not
unreasonably interfere with the normal business operations of Purchaser or its
Subsidiaries at such Sites. Any investigation, remediation, correction of
noncompliance or other activities to be conducted, directed or performed by the
Sellers pursuant to this Section 15.04 shall be performed by an independent
third party environmental professional mutually agreed (or other Person
mutually agreed) upon by Purchaser and the Sellers (subject to the dispute
resolution proceedings set forth in Section 15.04(e) below). Any such
remediation or actions necessary to achieve compliance shall be deemed
sufficient to satisfy Sellers' corresponding obligations under this Agreement
so long as the result (x) meets or exceeds the least stringent standards
(including any lesser standards resulting from any site-specific risk
assessment) acceptable under (A) all applicable Environmental Laws as in effect
on the Closing Date based on the use of the property on the Closing Date and
(B) all applicable Environmental Permits and (y) is consistent with any
third-party settlements entered into with the prior written consent of Sellers.
Notwithstanding anything to the contrary in the immediately preceding sentence,
Purchaser may direct Sellers, at Purchaser's sole discretion, to undertake
remedial action or such other action that (1) exceeds the requirements set
forth in clauses (x) and (y) of such sentence, or (2) meets but does not exceed
such requirements; provided, however, that in the event Purchaser so directs
Sellers to undertake any action that exceeds such requirements, Purchaser shall
bear the incremental costs, if any, incurred in implementing the more stringent
remedy. To the extent the Sellers fail to exercise their rights or perform
their obligations under this Section 15.04(a) in a diligent and timely manner,
Purchaser, upon written notice to the Sellers, shall have the right to control,
direct and perform the relevant investigation or remediation or correct the
relevant noncompliance, provided the procedures in this Section 15.04(b) and in
Section 15.04(c) below shall be complied with, substituting in each case
Purchaser for the Sellers and vice versa.
(c) Certain Responsibilities of Purchaser. Purchaser
will cooperate with the Sellers (including by making relevant personnel and
records available to the Sellers at all reasonable times, without charge for
any internal costs) in connection with this Section 15.04. Until Purchaser has
suffered $1 million in Adverse Consequences under clause (i) of the proviso in
Section 15.01(a) with respect to claims under this Section 15.04 and all other
matters referred to in such clause (i), Purchaser shall reimburse the Sellers
within 30 days of receipt of an invoice, for any reasonable out-of-pocket
costs, expenses, fees or other amounts incurred by the Sellers relating to
services provided or activities performed with respect to the matters referred
to in this Section 15.04. Once Purchaser has suffered the applicable amount of
Adverse Consequences specified in the immediately preceding sentence, then the
Sellers shall reimburse any Indemnified Purchaser Party for any reasonable
out-of-pocket costs, expenses, fees or other amounts incurred
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by such Indemnified Purchaser Party pursuant to this Section 15.04. Each of
Purchaser and the Sellers shall use its reasonable efforts to minimize the
costs associated with Adverse Consequences relating to environmental matters
for which the Sellers are responsible under Section 15.01(a) above (ignoring,
for this purpose, the limitations in the proviso to Section 15.01(a) above).
In order to better delineate the respective obligations of the Sellers and
Purchaser with respect to environmental matters at the relevant properties,
Purchaser shall take reasonable steps to conduct its operations so as not to
take affirmative action that unreasonably compounds or aggravates any
environmental condition or noncompliance for which the Sellers are responsible
(ignoring, for this purpose, the limitations in the proviso to Section 15.01(a)
above) under this Agreement.
(d) Third Party Actions. Neither Purchaser nor Sellers
will initiate or encourage any action by any third party, including any
governmental agency or authority, which could reasonably be expected to lead to
a claim by such third party with respect to any environmental matter of
Sellers, the Limited Companies, the MSX Assets, or the Business for which
Sellers are responsible under Section 15.01 (ignoring, for this purpose, the
limitations in the proviso in Section 15.01(a) above), except to the extent
required (i) by Environmental Law, (ii) by any Environmental Permit, (iii) by
any settlement agreement, or (iv) in the relevant Party's good faith judgment,
in order to protect human health or safety; provided, however, that nothing in
this Agreement shall be construed to limit (i) Purchaser's right to conduct and
submit a baseline environmental assessment to the Michigan Department of
Environmental Quality pursuant to Part 201 of the Michigan Natural Resources
and Environmental Protection Act with respect to any Site, or (ii) Purchaser's
right (or the right of Sellers) to investigate any suspected environmental
condition or noncompliance. If Purchaser or Sellers determine that it is so
required to initiate or encourage any such action, such Party will promptly
notify the other party of such requirement.
(e) Resolution of Certain Disputes.
(i) With respect to any matter which requires action by
the Sellers and the consent of Purchaser or the agreement of the Sellers and
Purchaser pursuant to this Section 15.04, the Sellers shall notify Purchaser in
writing of the action they propose to take, setting forth with particularity
the nature of such action, the identity of the individual or firm proposed to
perform such action (if applicable), the proposed time frame for commencing and
completing such action, and the estimated cost associated with such action
(each such action, a "Recommended Action"). The Sellers shall provide
Purchaser with copies of all sampling data, environmental reports, proposals
and correspondence (drafts and final) relating to the subject matter of the
Recommended Action. If Purchaser disagrees with the Recommended Action, in
whole or in part, Purchaser shall notify the Sellers in writing of its specific
disagreement regarding such Recommended Action (a "Dispute Notification")
within 15 days of its receipt of notice of the Recommended Action in
accordance with this paragraph (e)(i) (the "Dispute Notification Period").
Purchaser and the Sellers shall thereafter negotiate in good faith in an
attempt to reach agreement as to the disputed Recommended Action. If Purchaser
and the Sellers are unable to resolve the dispute within 10 days after the
Sellers' receipt of a Dispute
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Notification, either Purchaser or the Sellers may provide written notice to the
other of its intent to submit the matter to arbitration, and such dispute shall
be resolved by arbitration.
(ii) If the Recommended Action (or portion thereof subject
to dispute) is submitted to arbitration, each of Purchaser and the Sellers,
collectively, shall select an arbitrator, and a third arbitrator shall be
chosen by the other two arbitrators, provided that if the two arbitrators fail
to agree upon the third arbitrator within 30 days after receipt of notice to
submit the matter to arbitration, the additional arbitrator shall be appointed
by the American Arbitration Association, in the state in which the relevant
Site is located. The provisions of the Federal Arbitration Act (9 U.S.C.
Section Section 1-14) and commercial arbitration rules of the American
Arbitration Association shall be followed in any arbitration, unless modified
pursuant to mutual agreement of Purchaser and the Sellers with the concurrence
of the arbitration panel.
(iii) Any arbitration conducted pursuant to this Section
15.04(e) shall be limited to resolution of the dispute set forth in the Dispute
Notification, and the arbitrators shall have no jurisdiction or authority to
resolve any claims not related to such dispute, whether arising by way of
asserted rights, offsets or otherwise. The arbitrators' decision shall be
final and binding on Purchaser and the Sellers. Any arbitration award shall be
enforceable in any court of competent jurisdiction. Each of Purchaser and the
Sellers hereby consents to such jurisdiction and to entry of judgment thereon.
The costs of arbitration shall be borne by Purchaser.
(f) Certain Recoveries. The Sellers and Purchaser shall
cooperate with each other with respect to making claims under any
occurrence-based policies written by third party insurance companies, to the
extent such policies were applicable to the Sites prior to the Closing Date,
under any acquisition agreements with third parties, to the extent such
agreements are in effect as of the Closing Date and afford indemnification
rights for the benefit of such entities and under any underground storage tank
or similar environmental reimbursement program, to the extent such programs are
available to such entities at any time after the Closing Date, for
reimbursement or contribution in connection with environmental matters for
which the Sellers may be responsible pursuant to Section 15.01(a) above
(ignoring, for this purpose, the limitations in the proviso in Section 15.01(a)
above). Such cooperation shall include making all reasonable claims and
demands against such third parties with respect to such environmental matters
and pursuing such claims and demands in a commercially reasonable manner.
ARTICLE XVI
TERMINATION
16.01 Termination. This Agreement may be terminated, and
the transactions contemplated hereby may be abandoned:
(a) at any time before the Closing, by mutual written
agreement of each of the Sellers and Purchaser;
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(b) at any time before the Closing, by Purchaser if (i)
it has received from the Sellers notice of a breach described in Section
8.08(a) or of a material breach described in Section 8.08(b) and such breach
has not been cured, (ii) it notifies the Sellers of the occurrence of any of
the events described in Section 8.08 and the Sellers shall not have cured such
breach or (iii) the satisfaction of any of its obligations under this Agreement
becomes impossible with the use of commercially reasonable efforts, if the
failure of such condition to be satisfied is not caused by a breach hereof by
it; provided, however, that Purchaser shall not have any right to terminate
this Agreement pursuant to this Section 16.01(b) unless and until such time as
the aggregate amount of Losses which could reasonably be expected to result
from the breaches referred to in this Section 16.01(b) would exceed $15
million;
(c) at any time before the Closing, by the Sellers if (i)
they have received notice from Purchaser of a breach described in Section
9.02(a) or of a material breach described in Section 9.02(b) and such breach
has not been cured, (ii) they notify Purchaser of the occurrence of any of the
events described in Section 9.02 and Purchaser shall not have cured such breach
or (iii) the satisfaction of any of the Sellers' obligations under this
Agreement becomes impossible with the use of commercially reasonable efforts,
if the failure of such condition to be satisfied is not caused by a breach
hereof by either of the Sellers;
(d) at any time after February 2, 1997, by Purchaser or
the Sellers upon notification of the non-terminating party by the terminating
party if the Closing shall not have occurred on or before such date and such
failure to consummate is not caused by a breach of this Agreement by the
terminating party.
16.02 Effect of Termination. If this Agreement is validly
terminated pursuant to Section 16.01, this Agreement will forthwith become null
and void, and there will be no liability or obligation on the part of any party
hereto (or any of its officers, directors, employees, agents or other
Representatives or Affiliates), except as provided in the next succeeding
sentence and except that the provisions in Sections 18.03, 18.04, 18.05, 18.08,
18.10, 18.12 and 18.15 will continue to apply following any such termination.
Notwithstanding any other provision in this Agreement to the contrary, upon
termination of this Agreement pursuant to Section 16.01(b) or 16.01(c), the
Sellers will remain jointly and severally liable to Purchaser for any
misrepresentation or breach of warranty or nonfulfillment of or failure to
perform any covenant or agreement by either Seller existing at the time of such
termination, and Purchaser will remain liable to the Sellers for any
misrepresentation or breach of warranty or nonfulfillment of or failure to
perform any covenant or agreement by Purchaser existing at the time of such
termination, and Purchaser and the Sellers may seek such remedies, including
damages and fees of attorneys, against the other with respect to any such
breach as are provided in this Agreement or as are otherwise available at Law
or in equity.
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ARTICLE XVII
DEFINITIONS
17.01 Definitions. (a) As used in this Agreement, the
following defined terms shall have the meanings indicated below:
"Accounting Firm" has the meaning ascribed to it in Section
3.01(b)(i).
"Accounts Receivable" has the meaning ascribed to it in
Section 2.01(a)(iv).
"Actions or Proceedings" means any action, suit, proceeding,
arbitration or Governmental Authority investigation or audit.
"Adverse Consequences" means all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, rulings, decrees, damages, dues, Taxes (other than Income
Taxes), penalties, fines, costs, reasonable accounts paid in settlement,
liabilities, obligations, liens, losses, expenses, and fees, including court
costs and reasonable attorneys' fees and expenses; provided, however, that (i)
Adverse Consequences shall not include any lost profits or any exemplary,
punitive, consequential or other similar damages (other than exemplary,
punitive, consequential or other similar damages awarded to any third party);
(ii) Adverse Consequences shall not be determined through any multiple of
earnings approach or variant thereof (except with respect to any breach of the
representations or warranties contained in Section 6.03 and the first sentence
of Section 6.04, in each case to the extent that such breach relates to any
matter that has resulted in a recurring loss of earnings, and then only to the
extent that at the time of assessing the Adverse Consequences caused by that
breach, there are no developments or areas of earnings growth (whether or not
related to the matters giving rise to the breach) not specifically included in
Purchaser's business plan as of the date hereof for the segment exhibiting such
growth which are then reasonably anticipated to offset or compensate, in whole
or in part, for the Adverse Consequences caused by such breach); and (iii) the
Indemnified Purchaser Parties shall not be deemed to have suffered any Adverse
Consequences which result from their continuation after the Closing Date of any
of the practices, policies and procedures of the Sellers and the Limited
Companies, or which result from their institution of new such practices,
policies and procedures, in either case in detrimental reliance upon the
representations and warranties of the Sellers under this Agreement; and
provided further that Adverse Consequences shall not include (i) the loss of
any Tax attribute or (ii) any Tax liability resulting from the receipt of any
indemnification payment made under this Agreement.
"Affiliate" means, with respect to any Person, any other
Person that directly, or indirectly through one of more intermediaries,
controls or is controlled by or is under common control with such Person. For
purposes of this definition, control of a Person means the power, direct or
indirect, to direct or cause the direction of the management and policies of
such Person whether by Contract or otherwise and, in any event and without
limitation of the previous
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sentence, any Person owning 10% or more of the voting securities of a second
Person shall be deemed to control that second Person.
"Agreement" means this Acquisition Agreement, the exhibits
hereto, the Disclosure Schedule, the Purchaser Disclosure Schedule and the
certificates delivered in connection herewith, as the same shall be amended,
modified or restated from time to time.
"Allocation Schedule" has the meaning ascribed to it in
Section 3.02(a).
"Amortized Deductions" has the meaning ascribed to it in
Section 12.03.
"APX Acquisition" has the meaning ascribed to it in the
forepart of this Agreement.
"APX Assets" has the meaning ascribed to it in Section
2.01(b).
"APX-Brazil" has the meaning ascribed to it in the forepart of
this Agreement.
"APX-Brazil Stock" has the meaning ascribed to it in the
forepart of this Agreement.
"APX Business" has the meaning ascribed to it in the forepart
of this Agreement.
"APX Continuing Business" means that portion of the APX
Business and APX Assets acquired by Sellers on the Effective Date pursuant to
the APX Purchase Agreement together with all operations, properties, assets and
rights of whatever kind or nature acquired after the Effective Date with
respect to the APX Business and APX Assets, other than Conveyed Assets.
"APX-Germany" has the meaning ascribed to it in the forepart
of this Agreement.
"APX-Germany Stock" has the meaning ascribed to it in the
forepart of this Agreement.
"APX Limited Assets" has the meaning ascribed to it in the
forepart of this Agreement.
"APX Purchase Agreement" has the meaning ascribed to it in the
forepart of this Agreement.
"Assets" has the meaning ascribed thereto in Section 2.01.
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"Assignment and Assumption Agreement" means a xxxx of sale and
assignment and assumption agreement among the Sellers and Purchaser,
substantially in the form of Exhibit 2.02.
"Associate" means, with respect to any Person, any corporation
or other business organization of which such Person is an officer or partner or
is the beneficial owner, directly or indirectly, of 10% or more of any class of
equity securities, any trust or estate in which such Person has a substantial
beneficial interest or as to which such Person serves as a trustee or in a
similar capacity and any relative or spouse of such Person, or any relative of
such spouse, who has the same home as such Person.
"Assumed Indebtedness" means all Funded Indebtedness of the
Limited Companies outstanding on the Closing Date, together with all interest
accrued thereon through the Closing Date.
"Assumed 401(K) Plan" has the meaning ascribed to it in
Section 13.03(a).
"Assumed Pension Plan" has the meaning ascribed to it in
Section 13.04.
"Assumed Liabilities" has the meaning ascribed to it in
Section 2.02(a).
"Body Systems and Assembly" means the businesses originally
acquired and operated in or under the corporation known as Cars and Concepts or
which subsequently have been operated as a division of MSX under the name "Body
Systems and Assembly."
"Books and Records" of any Person means all files, documents,
instruments, papers, books and records relating to the business, operations,
condition of (financial or other), results of operations and assets and
properties of such Person, including without limitation financial statements,
Tax Returns and related work papers and letters from accountants, budgets,
pricing guidelines, ledgers, journals, deeds, title policies, minute books,
stock certificates and books, stock transfer ledgers, Contracts, Licenses,
customer lists, computer files and programs, retrieval programs, operating data
and plans and environmental studies and plans.
"Bridge Credit Agreement" means the Bridge Credit Agreement
dated as of the Closing Date among Purchaser, the Subsidiaries of Purchaser
named therein, MascoTech and the Institutional Stockholder, including all
schedules and exhibits thereto, substantially in the form attached hereto as
Exhibit 10.08(A).
"Brighton Building" means a facility formerly used by Body
Systems and Assembly located at 00000 X. Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx,
including its contents.
"Business" has the meaning ascribed to it in the forepart of
this Agreement.
"Business Books and Records" has the meaning ascribed to it in
Section 2.01(a)(xii).
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"Business Combination" means, with respect to any Person, (i)
any merger, consolidation or combination to which such Person is a party, (ii)
any sale, dividend, split or other disposition of capital stock or other equity
interests of such Person, (iii) any tender offer (including, without
limitation, a self tender), exchange offer, recapitalization, liquidation,
dissolution or similar transaction, (iv) any sale, dividend or other
disposition of a significant portion of the assets and properties of such
Person, or (v) the entering into of any agreement or understanding, or granting
of any rights or options, with respect to any of the foregoing.
"Business Day" means a day other than Saturday, Sunday or any
day on which banks located in the States of Michigan and New York are
authorized or obligated by Law to close.
"Business Licenses" has the meaning ascribed to it in Section
2.01(a)(x).
"Cap" has the meaning ascribed to it in Section 15.01(a)(ii).
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, and the rules and
regulations promulgated thereunder.
"Claim Notice" means written notification pursuant to Section
15.02(a) of a Third Party Claim as to which indemnity under Section 15.01 is
sought by an Indemnified Party, enclosing a copy of all papers served, if any,
on the Indemnifying Party.
"Closing" has the meaning ascribed to it in Section 3.03.
"Closing Date" has the meaning ascribed to it in Section 3.03.
"Code" means the Internal Revenue Code of 1986, as amended,
and the rules and regulations promulgated thereunder.
"Computations" has the meaning ascribed to it in Section
3.01(b)(i).
"Confidential Information" has the meaning ascribed to it in
Section 18.21.
"Contract" means any agreement, lease, evidence of
Indebtedness, mortgage, indenture, security agreement or other contract
(whether written or oral).
"Conveyed Assets" means any Assets disposed of by the Sellers
after the Effective Date in the ordinary course of business in accordance with
the terms of this Agreement including, without limitation, Sections 8.04 and
8.05.
"December 31 Balance Sheet" has the meaning ascribed to it in
Section 6.03.
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"Disclosure Schedule" means the schedules delivered to
Purchaser by the Sellers herewith and dated as of the date hereof, containing
all lists, descriptions, exceptions and other information and materials as are
required to be included therein by the Sellers pursuant to this Agreement.
"Discussion Period" has the meaning ascribed to it in Section
3.01(b)(iii).
"Dispute Notice" has the meaning ascribed to it in Section
15.02(c).
"Dispute Notification" has the meaning ascribed to it in
Section 15.04(e)(i).
"Dispute Notification Period" has the meaning ascribed to it
in Section 15.04(e)(i).
"Dispute Period" means the period ending 30 calendar days
following receipt by an Indemnifying Party of an Indemnity Notice.
"Disputed Matters" has the meaning ascribed to it in Section
3.01(b)(iii).
"Effective Date" means November 7, 1996.
"Effective Date Assumed Indebtedness" means all Funded
Indebtedness of the Limited Companies outstanding on the Effective Date,
together with all interest accrued thereon through the Effective Date.
"Effective Date Balance Sheet" means a combined balance sheet
of the Business (excluding the Excluded Assets and the Retained Liabilities) as
of the Effective Date immediately prior to giving effect to the Closing (as
defined in the APX Purchase Agreement), prepared in accordance with GAAP,
subject to the exceptions set forth in Section 6.03 of the Disclosure Schedule,
applied (including with respect to such exceptions) on a basis consistent with
the methods, principles, practices and policies employed in the preparation of
the December 31 Balance Sheet.
"Effective Date Net Working Capital" means the combined
current assets of the Business less the combined current liabilities of the
Business, in each case as set forth on the Effective Date Balance Sheet
(adjusted consistently with the sample reconciliation calculation (which
assumes an Effective Date of September 30, 1996) set forth in Exhibit 3.01(b)
to reflect the exclusion of (i) indebtedness for borrowed money, (ii) accrued
interest, (iii) any asset, deferred credit or liability for deferred income
taxes and (iv) intercompany payables and/or receivables between the Business
and the Sellers or any of their Affiliates.)
"Election Notice" has the meaning ascribed to it in Section
12.03(b).
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"Employment Tax" means any payroll or employee Tax (including
Taxes of any kind required to be withheld from payments to employees,
independent contractors or other providers for services).
"Employee Benefit Arrangement" means, with respect to any
person, any employment, consulting, independent contractor, retainer, severance
or similar contract, arrangement or policy (exclusive of any such contract
which is terminable within 30 days without liability), or any plan or
arrangement providing for severance benefits, insurance coverage (including
pursuant to any self-insured plan or arrangement), workers' compensation,
disability benefits, supplemental unemployment benefits, vacation benefits,
retirement benefits, deferred compensation, profit-sharing, bonuses, stock
options, stock appreciation rights or other forms of incentive compensation or
post-retirement insurance, compensation, or benefits, in each case for the
benefit of any current or former employee or independent contractor of such
Person; provided, however, that the term "Employee Benefit Arrangement" shall
not include any Employee Benefit Plan covered by or subject to ERISA or any
other contract, arrangement, policy, plan or arrangement required to be
sponsored, maintained or contributed to by applicable law (other than any
domestic workers' compensation statute).
"Employee Benefit Plan" has the meaning set forth in ERISA
Section 3(3).
"Environment" means all air, surface water, groundwater, or
land, including land surface or subsurface, including all fish, wildlife, biota
and all other natural resources.
"Environmental Claim" means any and all administrative or
judicial actions, suits, orders, claims, liens, notices, notices of violations,
investigations, complaints, requests for information, proceedings, or other
communication (written or oral), whether criminal or civil, (collectively,
"Claims") pursuant to or relating to any applicable Environmental Law by any
person (including but not limited to any Governmental Authority, private person
and citizens' group) based upon, alleging, asserting, or claiming any actual or
potential (i) violation of or liability under any Environmental Law, (ii)
violation of any Environmental Permit, or (iii) liability for investigatory
costs, cleanup costs, removal costs, remedial costs, response costs, natural
resource damages, property damage, personal injury, fines, or penalties arising
out of, based on, resulting from, or related to the presence, Release, or
threatened Release into the Environment, of any Hazardous Materials at any
location, including but not limited to any off-Site location to which Hazardous
Materials or materials containing Hazardous Materials were sent for handling,
storage, treatment, or disposal.
"Environmental Law" means any and all federal, state, local,
provincial and foreign, civil and criminal laws, statutes, ordinances, orders,
codes, rules, regulations, Environmental Permits, policies, guidance documents,
judgments, decrees, injunctions, or agreements with any Governmental Authority,
relating to the protection of health and the Environment, worker health and
safety, and/or governing the handling, use, generation, treatment, storage,
transportation, disposal, manufacture, distribution, formulation, packaging,
labeling, or Release of Hazardous Materials, whether now existing or
subsequently amended or
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enacted (except to the extent that any additional requirements, financial or
other obligations or liabilities of any kind or character are more burdensome
than those that would have been imposed by Environmental Laws in effect as of
the Closing Date), including but not limited to: the Clean Air Act, 42 U.S.C.
Section 7401 et seq.; the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. Section 9601 et seq.; the Federal Water
Pollution Control Act, 33 U.S.C. Section 1251 et seq.; the Hazardous Material
Transportation Act 49 U.S.C. Section 1801 et seq.; the Federal Insecticide,
Fungicide and Rodenticide Act 7 U.S.C. Section 136 et seq.; the Resource
Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. Section 6901 et
seq.; the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the
Occupational Safety & Health Act of 1970, 29 U.S.C. Section 651 et seq.; the
Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.; and the state
analogies thereto; and any common law doctrine, including but not limited to,
negligence, nuisance, trespass, personal injury, or property damage related to
or arising out of the presence, Release, or exposure to a Hazardous Material.
"Environmental Permit" means any federal, state, local,
provincial, or foreign permits, licenses, approvals, consents or authorizations
required by any Governmental Authority under or in connection with any
Environmental Law and includes any and all orders, consent orders or binding
agreements issued or entered into by a Governmental Authority under any
applicable Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder.
"ERISA Affiliate" means any Person which would be treated as a
single employer together with any of the Sellers and their Subsidiaries under
Code Section 414.
"European Operations" has the meaning ascribed to it in the
forepart of this Agreement.
"Excluded Assets" has the meaning ascribed to it in Section
2.01(c).
"Financial Statements" has the meaning ascribed to it in
Section 8.14.
"Financing Source" has the meaning ascribed to it in Section
8.02.
"Foreign Benefit Plan" means each employee benefit plan,
program, arrangement or agreement sponsored, maintained, or contributed to by
any of the Sellers and their respective Affiliates, that is subject to laws of
a country, state, or sovereignty other than the United States or a state,
territory, or district of the United States.
"Full Service Accessories Supply" has the meaning ascribed to
it in Section 8.07(iv).
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"Funded Indebtedness" means, without duplication, with respect
to any Person (i) all indebtedness for borrowed money or for the deferred
purchase price of property, (ii) the face amount of all letters of credit,
banker's acceptances and other credit facilities issued for the account of such
Person and, without duplication, all drafts drawn thereunder, (iii) all
indebtedness secured by any lien on any property owned by such Person, to the
extent attributable to such Person's interest in such property, even though
such Person has not assumed or become liable for the payment thereof, (iv)
lease obligations of such Person which, in accordance with generally accepted
accounting principles, should be capitalized, (v) obligations with respect to
any conditional sale agreement or title retention agreement and (vi) guarantees
by such Person of the Funded Indebtedness of another Person; but excluding in
each case trade and other accounts payable in the ordinary course of business.
"GAAP" means generally accepted accounting principles,
consistently applied throughout the specified period and in the immediately
prior comparable period.
"Governmental Authority" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state,
county, city or other political subdivision.
"Grossed-Up Basis" means, when used to describe the basis on
which the payment of a specified sum is to be made, a basis such that the
amount of such payment after being reduced by the amount of all Taxes imposed
on the recipient of such payment, will equal the specified sum.
"Guarantee Parties" has the meaning ascribed to it in Section
18.17.
"Guaranteed Obligations" has the meaning ascribed to it in
Section 18.17.
"Hazardous Material" means petroleum, petroleum hydrocarbons
or petroleum products, petroleum by-products, radioactive materials, asbestos
or asbestos-containing materials, gasoline, diesel fuel, pesticides, radon,
urea formaldehyde, lead or lead-containing materials, polychlorinated
biphenyls; and any other chemicals, materials, substances or wastes in any
amount or concentration which are now or hereafter become defined as or
included in the definition of "hazardous substances," "hazardous materials,"
"hazardous wastes," "extremely hazardous wastes," "restricted hazardous
wastes," "toxic substances," "toxic pollutants," "pollutants," "regulated
substances," "solid wastes," or "contaminants" or words of similar import,
under any Environmental Law.
"Improvements" has the meaning ascribed to it in Section
2.01(a)(ii).
"Income Taxes" means any tax imposed on a Person (other than
tax imposed as a result of such Person's being a withholding agent under the
laws) by Subtitle A of the Code or any similar tax imposed by any state, local
or foreign jurisdiction, together with any interest,
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penalties, additions to tax or additional amounts imposed by the applicable
Taxing Authorities with respect thereto.
"Indebtedness" of any Person means all obligations of such
Person (a) for borrowed money, (b) evidenced by notes, bonds, debentures or
similar instruments, (c) for the deferred purchase price of goods or services
(other than trade payables or accruals incurred in the ordinary course of
business), (d) under capital leases and (e) in the nature of guarantees of the
obligations described in clauses (a) through (d) above of any other Person.
"Indemnified Purchaser Parties" has the meaning ascribed to it
in Section 15.01.
"Indemnified Parties" has the meaning ascribed to it in
Section 15.01(b).
"Indemnified Party" has the meaning ascribed to it in Section
15.01.
"Indemnified Seller Parties" has the meaning ascribed to it in
Section 15.01.
"Indemnifying Party" means any Person against whom a claim for
indemnification is being asserted under any provision of Article XV.
"Indemnity Notice" means written notification pursuant to
Section 15.02(c) of a claim for indemnity under Article XV by an Indemnified
Party, specifying the nature of and basis for such claim, together with the
amount or, if not then reasonably ascertainable, the estimated amount,
determined in good faith, of such claim.
"Independent Accounting Firm" has the meaning ascribed to it
in Section 3.01(b)(iii).
"Institutional Stockholder" means Citicorp Venture Capital,
Ltd., a New York corporation.
"Intellectual Property" means all patents and patent rights,
trademarks and trademark rights, trade names and trade name rights, service
marks and service xxxx rights, service names and service name rights, brand
names, inventions, processes, formulae, copyrights and copyright rights, trade
dress, business and product names, logos, slogans, trade secrets, industrial
models, processes, designs, specifications, data, technology, methodologies,
computer programs (including all source codes for computer programs)
confidential and proprietary information, whether or not subject to statutory
registration, and all related documentation, technical information,
manufacturing, engineering and technical drawings, know-how and all pending
applications for and registrations of patents, trademarks, service marks and
copyrights, and the right to xxx for past infringement, if any, in connection
with any of the foregoing, and all documents, disks and other media on which
any of the foregoing is stored.
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"Intercompany Credits" means payments due and payable during
the Interim Period to the Business or the APX Continuing Business on account of
(i) space occupied by MSX, and not used in the Business, at 000 Xxx Xxxxxxxxx
in the amount of $6,570 per month, or the pro rata portion thereof, if
applicable, (ii) a credit in the amount of $27,083 per month, or the pro rata
portion thereof, as applicable, with respect to the rent subsidy for 255 Xxx,
(iii) occurrences described in subsections (iii) and (v) of the definition of
"Permitted Payments", and (iv) a rebate of American Express travel expenses.
"Interim Cash Flow Interest" means a charge equal to (i) the
sum of (a) a charge calculated at a rate of 8.5% per annum for the Interim
Period on the sum of $114,628,000, as decreased or increased, as the case may
be, by the amount by which Effective Date Net Working Capital is less than or
greater than Required Working Capital, plus (b) a charge calculated at the rate
of 12.5% per annum for the Interim Period on the sum of $30 million, less (ii)
all interest accrued during the Interim Period on Funded Indebtedness of the
Business or the APX Continuing Business.
"Interim Employee" means any United States employee actively
engaged in the Business, and, solely for the purposes of Section 13.06, the APX
Continuing Business during the Interim Period, who is not a Transferred
Employee.
"Interim Period" means the period commencing on the Effective
Date and terminating as of the close of business on the Closing Date.
"Interim Period Cash Flow" means (in each case for the Interim
Period): (i) the sum of (x) the aggregate of cash and cash equivalents received
in any manner (excluding the proceeds of any Funded Indebtedness incurred
during the Interim Period) by any of the Sellers or any of their Affiliates
relating to the Business (excluding Excluded Assets and Retained Liabilities)
or the APX Continuing Business, plus (y) the aggregate amount of all
Intercompany Credits, plus (z) the aggregate amount of cash and cash
equivalents reflected on the Effective Date Balance Sheet, plus (zz) the
aggregate amount of Assumed Indebtedness, less (ii) the sum of (x) the
aggregate amount of all Permitted Payments, plus (y) the Interim Cash Flow
Interest, plus (z) the aggregate amount of cash and cash equivalents either in
the possession of any of the Limited Companies or delivered by MSX to
Purchaser, in each case on the Closing Date, plus (zz) the aggregate amount of
Effective Date Assumed Indebtedness.
"Interim Period Income Tax Amount" means an amount equal to
the book income tax accrual (including deferred taxes and the Michigan Single
Business Tax) of the Business (excluding the Limited Companies) and the APX
Continuing Business (excluding APX-Brazil) for the Interim Period, as
determined in accordance with GAAP in a manner consistent with past practice,
except that Permitted Payments and Interim Cash Flow Interest shall be
considered as expenses in determining book income.
"Interim Period Income Tax Benefit" means an amount equal to
the book loss tax credit (including deferred tax benefit and the Michigan
Single Business Tax) of the Business
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(excluding the Limited Companies) and the APX Continuing Business (excluding
APX-Brazil) for the Interim Period, as determined in accordance with GAAP in a
manner consistent with past practice, except that Permitted Payments and
Interim Cash Flow Interest shall be considered as expenses in determining book
loss.
"Internal Revenue Service" means the United States Internal
Revenue Service.
"Inventory" has the meaning ascribed to it in Section
2.01(a)(iii).
"Knowledge of the Sellers" means the actual knowledge of any
of Xxxxx Xxxxxxxx, Xxx Xxxxxxx, Xxxx Xxxxxxx, Xxxxx Liner, Xxxxx Xxxxxxx,
Xxxxxx Xxxxxxxxxx, Xxxxxx Xxxxx Xxxxxxxxx, Xxxxx Xxxxxx, Xxxxxxx Xxxxxx, Xxxxxx
Macztakowski, Xxxxx X. Xxxxxxx, Xxxxxxx Xxxxx, Xxx Xxxxxxx, Xxxxxxx Bay, Xxxxx
Xxxxxxxx, Xxxxx Xxxxxxx and Xxxxx Xxxxx in each case without the necessity of
any independent investigation.
"Laws" means all laws, statutes, rules, regulations,
ordinances and other pronouncements having the effect of law of the United
States, any foreign country or any domestic or foreign state, county, city or
other political subdivision of any Governmental Authority.
"Liabilities" means all Indebtedness, obligations and other
liabilities (or contingencies that have not yet become liabilities) of a Person
(whether absolute, accrued, contingent, known or unknown, fixed or otherwise,
or whether due or to become due).
"Licenses" means all licenses, permits, certificates of
authority, authorizations, approvals, registrations, franchises and similar
consents granted or issued by any Governmental Authority.
"Liens" means any mortgage, pledge, assessment, security
interest, lease, lien, adverse claim, levy, charge or other encumbrance of any
kind, or any conditional sale Contract, title retention Contract or other
Contract to give any of the foregoing.
"Limited" has the meaning ascribed to it in the forepart of
this Agreement.
"Limited Companies" has the meaning ascribed to it in the
introductory paragraph of Article VI.
"Limited Stock" has the meaning ascribed to it in the forepart
of this Agreement.
"Loss" means any and all damages, fines, fees, penalties,
deficiencies, losses and expenses (including without limitation interest,
reasonable expenses of investigation, court costs, reasonable fees and expenses
of attorneys, accountants and other experts or other expenses of litigation or
other proceedings or of any claim, default or assessment).
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"MascoTech" has the meaning ascribed to it in the forepart of
this Agreement.
"Material Adverse Effect" means any circumstance relating to,
change in, or effect on any of MSX, and/or the Limited Companies that,
individually or in the aggregate, is materially adverse to the business,
assets, financial condition or results of operations of the Business
(considered on a combined basis).
"Material Contracts" has the meaning ascribed to it in Section
6.12.
"Material MSX Intellectual Property" has the meaning ascribed
to it in Section 6.11.
"MSX" has the meaning ascribed to it in the forepart of this
Agreement.
"MSX Assets" has the meaning ascribed to it in Section
2.01(a).
"MSX Intellectual Property" has the meaning ascribed to it in
Section 6.11.
"Multiemployer Plan" has the meaning set forth in ERISA
Section 3(37) or ERISA Section 4001(a)(3).
"Non-Core Assets" has the meaning ascribed to it in Section
2.01.
"Non-Core Business" means (i) the current business operations
or activities of MSX or the Limited Companies not comprising a part of, or
directly related to, the Business, and (ii) any business operations or
activities previously engaged in by MSX or the Limited Companies or any of
their predecessors within the 8-year period immediately prior to the Closing
Date which were of a type that would not be directly related to the business
operations or activities of the Business if currently engaged in on the date
hereof.
"Non-Transferable Asset" has the meaning ascribed thereto in
Section 2.03.
"North American Operations" has the meaning ascribed to it in
the forepart of this Agreement.
"Operative Agreements" means, collectively, the Assignment and
Assumption Agreement, the Other Assignment Instruments, the Stockholders'
Agreement, the Registration Rights Agreement, the Purchaser Note Agreement, the
Purchaser Notes, the Bridge Credit Agreement and the Subscription Agreements.
"Options" with respect to any Person means any security,
right, subscription, warrant, option, "phantom" stock right or other Contract
that gives the right to (i) purchase or otherwise receive or be issued any
shares of capital stock of such Person or any security of any kind convertible
into or exchangeable or exercisable for any shares of capital stock of such
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Person or (ii) receive any benefits or rights similar to any rights enjoyed by
or accruing to the holder of shares of capital stock of such Person, including
without limitation any rights to participate in the equity, income or election
of directors or officers of such Person.
"Order" means any writ, judgment, decree, injunction or
similar order of any Governmental Authority (in each such case whether
preliminary or final).
"Other Assignment Instruments" has the meaning ascribed to it
in Section 3.04.
"PBGC" means the Pension Benefit Guaranty Corporation
established under ERISA.
"Permitted Lien" means (a) any Lien for Taxes not yet due or
delinquent or being contested in good faith by appropriate proceedings for
which adequate reserves have been established in accordance with GAAP, (b) any
statutory Lien arising in the ordinary course of business by operation of Law
with respect to a Liability that is not yet due or delinquent, (c) any minor
imperfection of title or similar Lien which individually or in the aggregate
with other such Liens does not materially impair the value of the property
subject to such Lien or the use of such property in the conduct of the Business
or the business of Purchaser, as the case may be, and which does not secure
obligations for money borrowed and (d) the Liens described in Section 6.17 of
the Disclosure Schedule.
"Permitted Payments" means, without duplication, each of the
following specified expenditures relating to the Business or the APX Continuing
Business which are reflected on the Effective Date Balance Sheet or accrue and,
in each case, which are paid during the Interim Period:
(i) a general management fee in the amount of $125,000
per month, or pro rata portion thereof, as applicable, payable monthly
to MascoTech, for the portion of the salaries, 1996 bonuses and
related fringe benefit costs allocable to the Business for each of
Xxxx Xxxxxxx, Xxxx Xxxxxxx, Xxxxxx XxXxxxxx, Xxxx Xxxxxx and Xxxx
Xxxxxxx;
(ii) a fee in the amount of $32,000 per month, or pro rata
portion thereof, as applicable, payable monthly to MascoTech, for the
portion of the salaries, 1996 bonuses and related fringe benefit costs
allocable to the Business of each of Xxxxxx Xxxxxxxxxx and Xxx
Xxxxxxx;
(iii) a fee in the amount of $30,000 per month, or pro rata
portion thereof, as applicable, payable monthly to MascoTech, for
group life and ordinary and optional long-term disability insurance
(it being expressly understood and agreed that any payments made on
account of claims under such insurance coverage made by employees of
the Business shall be the sole responsibility of MascoTech or its
insurers and shall not be deemed Permitted Payments hereunder);
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(iv) payments to MascoTech as reimbursement for monies
paid out on account of group health insurance claims made by employees
of the Business, plus an administrative fee of $46,400 per month, or
pro rata portion thereof, as applicable;
(v) a fee in the amount of $68,700 per month, or pro rata
portion thereof, as applicable, payable monthly to MascoTech, for
casualty, general liability and product liability insurance relating
to the Business and the APX Continuing Business (it being expressly
understood and agreed that, if any claim relating to the Business or
the APX Continuing Business and covered thereunder arises due to an
occurrence during the Interim Period, only the payment of any
deductible (not exceeding $100,000) related to such claim shall be a
Permitted Payment hereunder and the payment of the insured amount with
respect to such claim shall be the sole responsibility of MascoTech or
its insurers and shall not be deemed a Permitted Payment hereunder);
(vi) payments as reimbursement for monies paid out on
account of workers' compensation claims made by employees of the
Business or the APX Continuing Business, plus a fee of $31,000 per
month, or pro rata portion thereof, as applicable;
(vii) reimbursement to MascoTech on account of payments to
the 401K Plan on account of monies withheld during the Interim Period
from participants under such Plan who are employees engaged in either
the Business or the APX Continuing Business;
(viii) payments to MascoTech or its Affiliates not in excess
of $5,000 (except as approved by Xxxxx Xxxxxx or Xxxx Xxxxxxx) for
each use in connection with the Business during the Interim Period of
planes and entertainment facilities owned by such Persons, calculated
consistent with the past practice of the Business;
(ix) payments to MascoTech as reimbursement for monies
paid to the appropriate Taxing Authority after the Effective Date in
connection with employment related taxes accrued and payable during
the Interim Period with respect to employees of the Business or the
APX Continuing Business;
(x) payment of Income Taxes which are reflected on the
Effective Date Balance Sheet or accrue with respect to the taxable
income of any of the Limited Companies or APX-Brazil during the
Interim Period and which are paid to the appropriate Taxing Authority
by any of such entities during the Interim Period, respectively;
(xi) payments to Persons (other than the Sellers or any of
their Affiliates) with respect to the operations of the Business or
the APX Continuing Business other than payments with respect to (x)
Sales Taxes arising as a result of a delinquency or error on the part
of any Seller to properly comply with the applicable state or local
Sales Tax law, (y) Income Taxes and (z) Michigan Single Business Tax;
and
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(xii) payments to Persons (other than the Sellers or any of
their Affiliates) pursuant to, and in accordance with the terms of,
the APX Purchase Agreement;
provided, that notwithstanding anything to the contrary contained herein,
"Permitted Payments" shall not include any repayment of Funded Indebtedness.
"Person" means any natural person, corporation, partnership,
proprietorship, other business organization, trust, union, association or
Governmental Authority.
"Personal Property Leases" has the meaning ascribed to it in
Section 2.01(a)(vi).
"Plan" has the meaning ascribed to it in Section 13.05.
"Post-Closing Period" means any taxable period or portion
thereof beginning after the Effective Date. If a taxable period begins on or
before the Effective Date and ends after the Effective Date, then the portion
of the taxable period that begins on the day following the Effective Date shall
constitute a Post-Closing Period.
"Pre-Closing Period" means any taxable period or portion
thereof ending on or before the Effective Date. If a taxable period begins on
or before the Effective Date and ends after the Effective Date, then the
portion of the taxable period to the end of the Effective Date shall constitute
a Pre-Closing Period.
"Pre-Existing APX Liens" means those Liens existing with
respect to the APX Assets prior to the Effective Date.
"Purchaser" has the meaning ascribed to it in the forepart of
this Agreement.
"Purchaser Disclosure Schedule" means the schedules delivered
to the Sellers by Purchaser herewith and dated the date hereof containing all
lists, descriptions, exceptions and other information and materials as are
required to be included therein by Purchaser pursuant to this Agreement.
"Purchaser Note Agreement" has the meaning ascribed to it in
Section 3.01(a).
"Purchase Price" has the meaning ascribed to it in Section
3.01(a).
"Purchaser Notes" has the meaning ascribed to it in Section
3.01(a).
"Real Property Leases" has the meaning ascribed to it in
Section 2.01(a)(i).
"Recommended Action" has the meaning ascribed to it in Section
15.04(e)(i).
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"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Closing Date, among Purchaser, MascoTech, the
Institutional Stockholder, and each of the individuals named therein, including
all schedules and exhibits thereto, substantially in the form attached hereto
as Exhibit 10.08(B).
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping, or
disposing of a Hazardous Material into the Environment.
"Representatives" means, with respect to a Person, its
officers, directors, employees, agents, counsel, accountants, financial
advisors, consultants and other representatives.
"Required Working Capital" is $50,805,000.
"Resolution Period" means the period ending 30 calendar days
following receipt by an Indemnified Party of a Dispute Notice.
"Retained Liabilities" has the meaning ascribed to it in
Section 2.02(b).
"Sales Taxes" means any sales, use or value added Tax.
"Section 12.03 Interest" has the meaning ascribed to it in
Section 12.03.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Seller" or "Sellers" has the meaning ascribed to it in the
forepart of this Agreement.
"Seller 401(K) Plans" has the meaning ascribed to it in
Section 13.03(b).
"Seller Party" means MascoTech, MSX and any Subsidiary or
Affiliate of MascoTech and MSX, other than any of the Limited Companies,
APX-Brazil, the Business or the APX Continuing Business.
"Series A Preferred Stock" has the meaning ascribed to it in
the Subscription Agreements.
"Site" means any of the real properties currently or
previously owned, leased or operated by either Seller relating to the Business
or the Limited Companies, or any predecessors of either Seller or the Limited
Companies, or any entities previously owned by either Seller relating to the
Business or the Limited Companies, including all soil, subsoil, surface waters
and groundwater thereat (excluding any real properties owned, leased or
operated by any predecessor
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of, or any entity previously owned by, the Sellers or any of the Limited
Companies for which neither of the Sellers nor any of the Limited Companies has
any liability under applicable Environmental Laws).
"Stockholders Agreement" means the Stockholders Agreement
dated as of the Closing Date, among Purchaser and its stockholders named
therein, including all schedules and exhibits thereto, substantially in the
form attached hereto as Exhibit 10.08(C).
"Straddle Period Return" means any Tax Return of a Limited
Company, APX-Brazil, the APX Continuing Business or the Business, for a taxable
period that begins on or before and ends after the Effective Date.
"Subscription Agreements" means each of (i) the Management
Subscription Agreements, dated as of the Closing Date, including all schedules
and exhibits thereto, substantially in the form of Exhibit 10.08(D)(1) hereto,
(ii) the MascoTech Subscription Agreement, dated as of the Closing Date,
including all schedules and exhibits thereto, substantially in the form of
Exhibit 10.08(D)(2) hereto, and (iii) the Institutional Stockholder
Subscription Agreement, dated as of the Closing Date, including all schedules
and exhibits thereto, substantially in the form of Exhibit 10.08(D)(3) hereto.
"Subsidiary" means, with respect to any Person, any other
Person in which such Person, directly or indirectly through Subsidiaries or
otherwise, beneficially owns more than 50% of either the equity interests in,
or the voting control of, such other Person, whether or not existing on the
date hereof.
"TAD Seller" means individually or collectively any of Pioneer
Acquisition Corporation, Landmark Holdings, Inc., Aero-Detroit, Inc. and TAD
Technical Services Ltd. ("TAD-Ltd").
"Tangible Personal Property" has the meaning ascribed to it in
Section 2.01(a)(v).
"Tax" or "Taxes" means all federal, state, local or foreign
net or gross income, gross receipts, net proceeds, sales, use, ad valorem,
value added, franchise, bank shares, withholding, payroll, employment, excise,
sales, use, property, alternative or add-on minimum, environmental or other
taxes, assessments, duties, fees, levies or other governmental charges of any
nature whatever, whether disputed or not, together with any interest,
penalties, additions to tax or additional amounts with respect thereto.
"Tax Claim" means any written claim with respect to Taxes
attributable to a Pre-Closing Period made by any Taxing Authority or other
person which, if pursued successfully, could serve as the basis for a claim for
indemnification of a Tax Indemnitee under this Agreement.
"Tax Indemnitee" has the meaning ascribed to it in Section
12.02(a).
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"Taxing Authority" means any governmental agency, board,
bureau, body, department or authority of any United States federal, state or
local jurisdiction, or any foreign jurisdiction, having or purporting to
exercise jurisdiction with respect to any Tax.
"Tax Returns" means any returns, reports or statements
(including any information returns) required to be filed for purposes of a
particular Tax.
"Third Party" means any Person other than (i) a Seller Party,
(ii) Purchaser, its Subsidiaries and Affiliates as of the date of this
Agreement and (iii) any of the Limited Companies, APX-Brazil or the APX
Continuing Business.
"Third Party Claim" has the meaning ascribed to it in Section
15.02(a).
"Third Party Indebtedness" means (i) all obligations of any
of the Limited Companies or APX-Brazil or relating to the Business for borrowed
money, (ii) all obligations of any of the Limited Companies or APX-Brazil or
relating to the Business in respect of bankers' acceptances or other similar
instruments or reimbursement obligations with respect thereto, (iii) all
obligations of any of the Limited Companies or APX-Brazil or relating to the
Business to pay the deferred purchase price of property and services (excluding
any trade payables in the ordinary course of business), (iv) all obligations of
any of the Limited Companies or APX-Brazil or relating to the Business under
capitalized leases and (v) all obligations of other Persons of the types
described in clauses (i) through (iv) above guaranteed by any of the Limited
Companies or APX-Brazil or relating to the Business, in each case to any Person
(other than the Sellers and its Affiliates).
"Transferred Assets" means the MSX Assets, the Limited Stock
and, from and after the Effective Date, the APX Assets and the APX-Brazil
Stock; provided, however, that in no event shall "Transferred Assets" be deemed
to refer to the APX Assets or any condition, event or set of circumstances
relating thereto prior to the Effective Date.
"Transferred Employee" has the meaning ascribed to it in
Section 13.01.
"Transfer Taxes" means sales, use, transfer, real property
transfer, recording, gains, stock transfer and other similar taxes and fees.
"Vehicles" has the meaning ascribed to it in Section
2.01(a)(xi).
"WARN" has the meaning ascribed to it in Section 13.01(b).
"Warranty Obligations" has the meaning ascribed to it in
Section 6.20.
(b) Unless the context of this Agreement otherwise
requires, (i) words of any gender include each other gender; (ii) words using
the singular or plural number also include the plural or singular number,
respectively; (iii) the terms "hereof", "herein", "hereby" and derivative
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or similar words refer to this entire Agreement; and (iv) the terms "Article"
or "Section" refer to the specified Article or Section of this Agreement. All
accounting terms used herein and not expressly defined herein shall have the
meanings given to them under GAAP.
ARTICLE XVIII
MISCELLANEOUS
18.01 Notices. All notices, requests and other
communications hereunder must be in writing and will be deemed to have been
duly given only if delivered personally against written receipt or by facsimile
transmission or mailed by prepaid first class certified mail, return receipt
requested, or mailed by overnight courier prepaid, to the parties at the
following addresses or facsimile numbers:
If to Purchaser:
ASG Holdings Inc.
000 Xxx Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx
Facsimile No.: 000-000-0000
Attn: President
with a copy to:
ASG Holdings Inc.
000 Xxx Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx
Facsimile No.: 000-000-0000
Attn: General Counsel
with a copy to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
If to either the Seller, to:
MascoTech, Inc.
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00000 Xxx Xxxx Xxxx
Xxxxxx, XX 00000
Facsimile No.: 000-000-0000
Attn: President
with a copy to:
MascoTech, Inc.
00000 Xxx Xxxx Xxxx
Xxxxxx, XX 00000
Facsimile No.: 000-000-0000
Attn: General Counsel
All such notices, requests and other communications will (a) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (b) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, (c) if delivered by
mail in the manner described above to the address as provided in this Section,
be deemed given on the earlier of the third Business Day following mailing, or
upon receipt, and (d) if delivered by overnight courier to the address provided
in this Section, be deemed given on the earlier of the first Business Day
following the date sent by such overnight courier, or upon receipt (in each
case regardless of whether such notice, request or other communication is
received by any other Person to whom a copy of such notice is to be delivered
pursuant to this Section). Any party from time to time may change its address,
facsimile number or other information for the purpose of notices to that party
by giving notice specifying such change to the other parties hereto.
18.02 Entire Agreement. This Agreement and the Operative
Agreements supersede all prior discussions and agreements between the parties
with respect to the subject matter hereof and thereof and contain the sole and
entire agreement between the parties hereto with respect to the subject matter
hereof and thereof.
18.03 Expenses. Except as otherwise expressly provided in
this Agreement (including without limitation as provided in Section 16.02),
whether or not the transactions contemplated hereby are consummated, each party
will pay its own costs and expenses incurred in connection with the negotiation
and execution of this Agreement and the Operative Agreements and the
transactions contemplated hereby and thereby. If the Closing occurs, Purchaser
shall reimburse the Sellers for the reasonable fees and disbursements of Xxxxx
Xxxx & Xxxxxxxx incurred in connection with the negotiation and execution of
the Operative Agreements. To the extent not taken into account as a Permitted
Payment, Purchaser shall reimburse the Sellers for the reasonable fees and
disbursements of Pepper, Xxxxxxxx & Xxxxxxx incurred in connection with the
negotiation and execution of the APX Purchase Agreement. In addition, all fees
and expenses incurred by Coopers & Xxxxxxx in connection with the
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preparation of the Effective Date Balance Sheet, the Computations and the
Financial Statements shall be borne by Purchaser. Any payment due hereunder
shall be made within five (5) Business Days after receipt by Purchaser from the
Sellers of documentation reasonably satisfactory to Purchaser specifying the
nature of the services rendered and the total amount due therefor.
18.04 Public Announcements. At all times at or before the
Closing, none of the parties hereto will issue or make any statements or
releases to the public with respect to this Agreement or the transactions
contemplated hereby without the consent of the other parties hereto, which
consent in each case shall not be unreasonably withheld. If any party hereto
is unable to obtain the approval of its public statement or release from the
other parties hereto and such statement or release is, in the opinion of legal
counsel to such party, required by Law in order to discharge such party's
disclosure obligations, then such party may make or issue the legally required
statement or release and promptly furnish the other parties hereto with a copy
thereof. Each of the Sellers and Purchaser will also obtain the other's prior
approval of any press release to be issued immediately following the Closing
announcing the consummation of the transactions contemplated by this Agreement.
18.05 Confidentiality. Each party hereto will hold, and
will use its best efforts to cause its Affiliates and their respective
Representatives to hold, in strict confidence from any Person (other than any
such Affiliate or Representative), unless (a) compelled to disclose by judicial
or administrative process (including without limitation in connection with
obtaining the necessary approvals of this Agreement and the transactions
contemplated hereby of Governmental Authorities) or by other requirements of
Law or (b) disclosed in an Action or Proceeding brought by a party hereto in
pursuit of its rights or in the exercise of its remedies hereunder, all
documents and information concerning any other party or any of its Affiliates
furnished to it by such other party or such other party's Representatives in
connection with this Agreement or the transactions contemplated hereby, except
to the extent that such documents or information can be shown to have been (i)
previously known by the party receiving such documents or information, (ii) in
the public domain (either prior to or after the furnishing of such documents or
information hereunder) through no fault of such receiving party or (iii) later
acquired by the receiving party from another source if the receiving party is
not aware that such source is under an obligation to another party hereto to
keep such documents and information confidential; provided that following the
Closing the foregoing restrictions will not apply to Purchaser's use of
documents and information concerning the Sellers, as relating to the Business,
the Business, the APX Continuing Business, the APX-Brazil Stock, the Limited
Stock, the Assets or the Assumed Liabilities furnished by any party hereto. In
the event the transactions contemplated hereby are not consummated, upon the
request of any other party, each party hereto will, and will cause its
Affiliates and their respective Representatives to, promptly (and in no event
later than five days after such request) redeliver or cause to be redelivered
all copies of documents and information furnished by such other party in
connection with this Agreement or the transactions contemplated hereby and
destroy or cause to be destroyed all notes, memoranda, summaries, analyses,
compilations and other writings related thereto or based thereon prepared by
the party furnished such documents and information or its Representatives.
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18.06 Waiver. Any term or condition of this Agreement may
be waived at any time by any party that is entitled to the benefit thereof, but
no such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party against whom the enforcement of such
waiver is sought. No waiver by any party of any term or condition of this
Agreement, in any one or more instances, shall be deemed to be or construed as
a waiver of the same or any other term or condition of this Agreement by any
other party or by the same party on any future occasion. All remedies, either
under this Agreement or by Law or otherwise afforded, will be cumulative and
not alternative.
18.07 Amendment. This Agreement may be amended,
supplemented or modified only by a written instrument duly executed by or on
behalf of each party hereto.
18.08 No Third Party Beneficiary. The terms and provisions
of this Agreement are intended solely for the benefit of each party hereto and
their respective successors or permitted assigns, and it is not the intention
of the parties to confer third-party beneficiary rights upon any other Person
other than the Institutional Stockholder to the extent provided herein and any
Person entitled to indemnity under Article XV.
18.09 No Assignment; Binding Effect. Neither this
Agreement nor any right, interest or obligation hereunder may be assigned by
any party hereto without the prior written consent of each other party hereto
and any attempt to do so will be void, except (a) for assignments and transfers
by operation of Law and (b) that Purchaser may assign any or all of its rights,
interests and obligations hereunder (including without limitation its rights
under Article XV) to (i) any wholly-owned Subsidiary of Purchaser, (ii) any
post-Closing purchaser of the Business or the APX Continuing Business or a
substantial part of the Assets of Purchaser or (iii) any financial institution
providing purchase money or other financing to Purchaser from time to time as
collateral security for such financing, but no such assignment referred to in
clause (i) or (ii) above shall relieve the assigning party of its obligations
hereunder. Subject to the preceding sentence, this Agreement is binding upon,
inures to the benefit of and is enforceable by the parties hereto and their
respective successors and assigns.
18.10 Limited Recourse. Notwithstanding anything in this
Agreement to the contrary, (i) the obligations and liabilities of the parties
hereunder shall be without recourse to any stockholder (other than with respect
to MSX or MascoTech) of such party or any of such stockholder's Affiliates,
directors, employees, officers or agents and shall be limited to the assets of
such party and (ii) the stockholders of Purchaser (other than MascoTech) have
made no (and shall not be deemed to have made any) representations, warranties
or covenants (express or implied) under or in connection with this Agreement.
18.11 Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties, and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement. The word "including"
shall mean
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"including without limitation". Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
fact that a party has disclosed any particular matter in the Disclosure
Schedule or Purchaser Disclosure Schedule, or in the certificates referred to
in Section 10.03 or Section 11.03 above, shall have no bearing on the issue of
whether the disclosed matter is "material" for any purpose under this
Agreement. Any matter that the Sellers disclose in any section or subsection
of the Disclosure Schedule shall be deemed to have been disclosed by the
Sellers only for the purposes of the corresponding section or subsection of
this Agreement unless this Agreement or the Disclosure Schedule expressly
states otherwise. Any matter that Purchaser discloses in any section or
subsection of the Purchaser Disclosure Schedule shall be deemed to have been
disclosed by Purchaser only for purposes of the corresponding section or
subsection of this Agreement unless this Agreement or the Purchaser Disclosure
Schedule expressly states otherwise.
18.12 No Offset. Notwithstanding anything to the contrary
in this Agreement, the Sellers shall not be entitled to satisfy any of their
payment obligations under this Agreement by means of an offset against the
Purchaser Notes or any security evidencing indebtedness of Purchaser issued in
exchange for shares of Series A Preferred Stock of Purchaser or against the
obligations of the Purchaser or its Subsidiaries arising under the Bridge
Credit Agreement.
18.13 Headings. The headings used in this Agreement have
been inserted for convenience of reference only and do not define or limit the
provisions hereof.
18.14 Invalid Provisions. If any provision of this
Agreement is held to be illegal, invalid or unenforceable under any present or
future Law, and if the rights or obligations of any party hereto under this
Agreement will not be materially and adversely affected thereby, (a) such
provision will be fully severable, (b) this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof, (c) the remaining provisions of this Agreement will
remain in full force and effect and will not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom and (d) in lieu
of such illegal, invalid or unenforceable provision, there will be added
automatically as a part of this Agreement a legal, valid and enforceable
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible.
18.15 Governing Law. This Agreement shall be governed by
and construed in accordance with the Laws of the State of New York without
giving effect to any conflict of law provision or rule that would cause the
application of the laws of any jurisdiction other than the State of New York.
18.16 Counterparts. This Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
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18.17 Certain Releases. As soon as practicable after the
January 1, 1999, Purchaser shall use its commercially reasonable efforts to
obtain the release of the Sellers and their remaining Subsidiaries, as
applicable, (collectively, the "Guarantee Parties"), from all obligations and
liabilities under all Real Property Leases and Personal Property Leases
relating to the Business guaranteed by any of the Sellers or their remaining
Subsidiaries (collectively, the "Guaranteed Obligations"). Commencing January
1, 1999, Purchaser shall pay MascoTech a fee equal to the lesser of (i)
one-half of one percent (1/2%) per annum, payable annually in arrears, on the
discounted present value (using a 12% discount rate) of the aggregate amount of
Guaranteed Obligations that remain guaranteed from time to time by the
Guarantee Parties measured as of the first day of July in each such year, and
(ii) the sum of $50,000. In no event, however, will Purchaser and its
Subsidiaries expand upon or prolong any of the Guarantee Parties' obligations
and liabilities by extending, renewing, or failing to exercise early
termination rights which are unilaterally exercisable without the payment of
significant penalties, with respect to any Guaranteed Obligation.
18.18 Risk Management and Litigation Support.
(a) Notwithstanding any other provision of this Agreement
to the contrary, Purchaser shall not have any liability or responsibility for,
and MascoTech shall be solely responsible for, and indemnify and hold harmless
Purchaser from and against, all claims under, and Liabilities and Adverse
Consequences resulting from, all "insurance-type" liabilities covered (whether
collectible or not) under MascoTech's comprehensive general, product and
automobile liability policies (including retrospectively rated insurance
policies and insurance programs that are an economic equivalent of
self-insurance), in each case as in effect as of the date hereof, arising from
any occurrence prior to the Effective Date or during the Interim Period
relating to the Business, the APX Business or involving any of the Limited
Companies, APX- Brazil or any of their Subsidiaries (whether known or unknown
at the Closing Date), in each case net of any applicable deductible; provided,
that, with respect to any such occurrence prior to the Effective Date and
subject to the provisions of Article XV, Purchaser shall be responsible for the
amount of any claim under such Masco Tech policies to the extent of the amount
by which (i) the aggregate amount of claims taken into account in determining
the $1 million limitation under Section 15.01(a)(i), taken together with claims
for which Purchaser shall have responsibility under this proviso, is less than
(ii) $1,000,000. After the Closing Date, Purchaser and its Subsidiaries shall
cooperate as reasonably requested by MascoTech in administering such claims,
and MascoTech shall administer such claims, in a manner consistent with the
past practices of MascoTech. Such cooperation will include (x) assigning to
MascoTech any pertinent contracts and insurance policies, providing claim
files, financial, underwriting and other information and assisting MascoTech,
all as reasonably requested by MascoTech, and (y) providing the other support
contemplated by clause (ii) below.
(b) If, and for so long as, any party hereto is actively
contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand brought by any third party in
connection with any transaction contemplated under this Agreement or any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event,
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incident, action, failure to act or transaction on or prior to the Closing Date
relating to the Business or the APX Continuing Business or involving any of the
Limited Companies or APX-Brazil, the other parties hereto shall (i) cooperate
with the contesting or defending party and its counsel in the contest or
defense, (ii) make available its personnel, and (iii) provide such testimony
and access to its books and records, in each case as the contesting or
defending party may reasonably request, but all at the sole cost and expense of
the contesting or defending party (except to the extent that the contesting or
defending party is entitled to indemnification therefor under Article XV
above).
18.19 Certain Recoveries. After the Closing Purchaser
shall have the right to make, and the Sellers and Purchaser shall cooperate
with each other with respect to making claims, under (i) any occurrence-based
policies that provide coverage to the Business or the APX Continuing Business,
or under which any of the Limited Companies or APX-Brazil is insured, as of the
Closing Date and under which coverage may be afforded for occurrences prior to
the Closing Date, and (ii) any acquisition agreements with third parties, to
the extent such agreements are in effect as of the Closing Date and afford
indemnification rights for the benefit of Purchaser and any of its
Subsidiaries.
18.20 Bulk Sales Compliance. The Sellers, jointly and
severally, shall indemnify and hold harmless Purchaser and its Subsidiaries
from any failure to comply with applicable Bulk Sales Laws and Orders.
18.21 Business Related Confidentiality. Notwithstanding
Section 18.05, during the three year period immediately following the Closing
Date, each of the Sellers shall, and shall cause each of its Subsidiaries, its
Representatives and the Representatives of its Subsidiaries, to (i) maintain in
confidence all confidential and proprietary information and data of the
Business, the APX Continuing Business, any of the Limited Companies or
APX-Brazil known to either of the Sellers as a result of its acquisition or
ownership of the Business, the APX Continuing Business, any of the Limited
Companies or APX-Brazil prior to the Closing Date except any information
currently used by either of the Sellers and their remaining Subsidiaries in
their remaining businesses (the "Confidential Information") and (ii) disclose
the Confidential Information only to its Subsidiaries, its Representatives and
the Representatives of its Subsidiaries, that need to know such Confidential
Information, (iii) use the Confidential Information only for the purpose of
monitoring and evaluating its investment in Purchaser and determining and
performing its obligations and exercising its rights under this Agreement and
the other Operative Agreements. The obligation to hold information in
confidence shall be satisfied if the Sellers and their Subsidiaries exercise
the same care with respect to such information as it would take to preserve the
confidentiality of its own similar information. Nothing herein shall prevent
either of the Sellers or its Subsidiaries, its Representatives or the
Representatives of its Subsidiaries from using, disclosing or authorizing the
disclosure of Confidential Information such Person receives which (i) has been
published in the public domain through no fault of either of the Sellers or any
such other Person; (ii) is lawfully received from a third party having rights
therein without notice of any restriction against its further disclosure or its
disclosure to such Person; (iii) is independently developed by either of the
Sellers through parties who have not had,
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either directly or indirectly, access to or knowledge of such Confidential
Information; (iv) is required to be produced under Order; provided that such
Confidential Information to the extent covered by a protective Order or its
equivalent shall otherwise continue to be Confidential Information; or (v) is
required to be disclosed by applicable Law or a stock exchange or a securities
trading association on which such Person's securities (or those of its
Affiliate) are listed.
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by a duly authorized officer of each party as of the date first
above written.
MASCOTECH, INC.
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President, Controller and
Treasurer
MSX INTERNATIONAL, INC.
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
ASG HOLDINGS INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: President
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TABLE OF CONTENTS
Page
ARTICLE I
THE STOCK PURCHASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.01 Purchase and Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.02 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.03 APX Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
ASSETS PURCHASED; LIABILITIES ASSUMED . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.01 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.02 Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.03 Third-Party Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE III
PURCHASE PRICE; THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.01 Purchase Price; Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.02 Allocation of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.03 Time and Place of Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.04 Deliveries at the Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.05 Further Assurances; Post-Closing Cooperation . . . . . . . . . . . . . . . . . . . . 11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS CONCERNING THE TRANSACTIONS . . . . . . . . . . . 12
4.01 Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.02 Authority Relative to Acquisition Agreement . . . . . . . . . . . . . . . . . . . . 12
4.03 No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.04 Governmental Approvals and Filings . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.05 Acquisition for Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.06 Entire Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLERS AS TO APX ACQUISITION . . . . . . . . . . . . . . 14
5.01 Consummation of APX Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLERS WITH RESPECT TO THE BUSINESS AND LIMITED . . . . . 14
6.01 Organization of Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.02 Limited Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.03 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.04 Absence of Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.05 Non-Core Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.06 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.07 Compliance with Laws and Orders . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.08 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.09 Benefit Plans; ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.10 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.11 Intellectual Property Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.12 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.13 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.14 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.15 Affiliate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.16 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.17 Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.18 Labor and Employment Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.19 No Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.20 Product Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.21 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER . . . . . . . . . . . . . . . . . . . . . . . . 29
7.01 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.02 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.03 No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.04 Governmental Approvals and Filings . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.05 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.06 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VIII
COVENANTS OF SELLERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.01 Governmental and Other Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.02 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.03 No Solicitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.04 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.05 Certain Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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8.06 Delivery of Books and Records, Removal of Property, Etc. . . . . . . . . . . . . . . 34
8.07 Noncompetition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.08 Notice and Cure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
8.09 FIRPTA Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8.10 Tax Covenants with Respect to the Interim Period . . . . . . . . . . . . . . . . . . 37
8.11 Efforts to Consummate Transaction . . . . . . . . . . . . . . . . . . . . . . . . . 37
8.12 Use of MSX International, Inc. Name . . . . . . . . . . . . . . . . . . . . . . . . 37
8.13 Interim Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8.14 Audited Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.15 Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.16 APX Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE IX
COVENANTS OF PURCHASER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.01 Governmental and Other Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.02 Notice and Cure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.03 Efforts to Consummate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE X
CONDITIONS TO OBLIGATIONS OF PURCHASER . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10.01 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10.02 Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10.03 Officers' Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10.04 Orders and Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10.05 Governmental Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . 41
10.06 Third Party Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.07 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.08 Operative Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.09 Resignations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.10 Capitalization of Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.11 Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.12 Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.13 Discharge of Third Party Indebtedness . . . . . . . . . . . . . . . . . . . . . . . 42
10.14 Assumed Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
10.15 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE XI
CONDITIONS TO OBLIGATIONS OF SELLERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.01 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.02 Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.03 Officers' Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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11.04 Orders and Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.05 Governmental Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . 42
11.06 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
11.07 Capitalization of Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
11.08 Operative Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
11.09 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE XII
TAX MATTERS AND POST-CLOSING TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
12.01 Preparation and Filing of Tax Returns . . . . . . . . . . . . . . . . . . . . . . . 43
12.02 Allocation of Tax Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
12.03 Indemnity for Loss of Section 197 Deductions . . . . . . . . . . . . . . . . . . . 46
12.04 Tax Contests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
12.05 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
12.06 Payments of Transfer Taxes and Fees . . . . . . . . . . . . . . . . . . . . . . . . 48
12.07 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
12.08 Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
12.09 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE XIII
EMPLOYEE BENEFITS MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
13.01 Hiring of Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
13.02 Cessation of Participation; Compliance . . . . . . . . . . . . . . . . . . . . . . . 50
13.03 401(k) Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
13.04 Defined Benefit Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
13.05 Multiemployer Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
13.06 Other Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
13.07 No Employee Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
13.08 Right to Terminate or Modify Plans . . . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE XIV
SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS . . . . . . . . . . . . . 53
14.01 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE XV
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
15.01 Indemnification Provisions for Benefit of Purchaser . . . . . . . . . . . . . . . . 55
15.02 Method of Asserting Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
15.03 Certain Intercompany Relationships . . . . . . . . . . . . . . . . . . . . . . . . . 58
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15.04 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE XVI
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
16.01 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
16.02 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE XVII
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
17.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE XVIII
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
18.01 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
18.02 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
18.03 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
18.04 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
18.05 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
18.06 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
18.07 Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
18.08 No Third Party Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
18.09 No Assignment; Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
18.10 Limited Recourse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
18.11 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
18.12 No Offset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
18.13 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
18.14 Invalid Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
18.15 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
18.16 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
18.17 Certain Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
18.18 Risk Management and Litigation Support . . . . . . . . . . . . . . . . . . . . . . . 86
18.19 Certain Recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
18.20 Bulk Sales Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
18.21 Business Related Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . 87
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