Exhibit (c)(2)
ASSET PURCHASE AGREEMENT
among
XXXXXXX CORPORATION,
TRANSPRO GROUP, INC.,
XXXXX INDUSTRIAL CORPORATION,
and certain subsidiaries of
XXXXX INDUSTRIAL CORPORATION
dated as of
February 2, 1997
TABLE OF CONTENTS
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ARTICLE I
THE BASIC TRANSACTION................................................... 1
Section 1.1. Agreement to Purchase and Sell Assets..................... 1
Section 1.2. Purchase Price; Allocation................................ 3
Section 1.3. Closing................................................... 4
Section 1.4. Deliveries at Closing..................................... 4
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLERS............................... 5
Section 2.1. Organization.............................................. 5
Section 2.2. Authority................................................. 5
Section 2.3. No Violations; Consents and Approvals..................... 6
Section 2.4. Financial Statements...................................... 6
Section 2.5. SEC Documents............................................. 7
Section 2.6. Absence of Certain Changes................................ 7
Section 2.7. Litigation................................................ 7
Section 2.8. Compliance with Applicable Law............................ 7
Section 2.9. Taxes..................................................... 8
Section 2.10. Termination, Severance and Employment Agreements.......... 8
Section 2.11. Employee Benefit Plans; ERISA............................. 9
Section 2.12. Environmental Matters..................................... 10
Section 2.13. Labor Matters............................................. 10
Section 2.14. Title to and Condition of the Purchased Assets............ 11
Section 2.15. Real Property............................................. 11
Section 2.16. Intellectual Property..................................... 11
Section 2.17. Contracts................................................. 11
Section 2.18. Broker's Fees............................................. 12
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER.............. 12
Section 3.1. Organization.............................................. 12
Section 3.2. Authority................................................. 12
Section 3.3. No Violations; Consents and Approvals..................... 12
Section 3.4. Broker's Fees............................................. 13
Section 3.5. Acceptance of Purchased Assets............................ 13
Section 3.6. Financing................................................. 13
ARTICLE IV
COVENANTS............................................................... 13
Section 4.1. Conduct of Business....................................... 13
Section 4.2. Names..................................................... 14
Section 4.3. Access to Information..................................... 14
Section 4.4. Reasonable Best Efforts................................... 14
Section 4.5. Public Announcements...................................... 14
Section 4.6. Notification of Certain Matters........................... 15
Section 4.7. Expenses.................................................. 15
Section 4.8. HSR Filing................................................ 15
Section 4.9. Employees................................................. 15
Section 4.10. Preparation of Financial Statements....................... 15
Section 4.11. Post-Closing Access to Records............................ 15
Section 4.12. Bulk Transfer Laws........................................ 16
Section 4.13. Section 338 Election; Tax Returns......................... 16
Section 4.14. Consents.................................................. 16
Section 4.15. Litigation Matters........................................ 16
Section 4.16. Insurance Matters......................................... 17
Section 4.17. Collectively Bargained Qualified Plans.................... 18
Section 4.18. Other Qualified Plans..................................... 19
Section 4.19. Welfare Plans............................................. 20
Section 4.20. Further Assurances........................................ 21
Section 4.21. Restrictive Covenants..................................... 22
ARTICLE V
CONDITIONS TO THE OBLIGATIONS OF THE PARTIES............................ 22
Section 5.1. Conditions to Obligations of the Parties.................. 22
Section 5.2. Additional Conditions to Obligations of Parent
and the Purchaser......................................... 22
Section 5.3. Additional Conditions to Obligations of Sellers........... 23
ARTICLE VI
TERMINATION............................................................. 24
Section 6.1. Termination............................................... 24
Section 6.2. Termination by Parent..................................... 24
Section 6.3. Termination by Xxxxx...................................... 24
Section 6.4. Notice of Termination..................................... 25
Section 6.5. Effect of Termination..................................... 25
Section 6.6. Termination Fee........................................... 25
ARTICLE VII
INDEMNIFICATION AND RELATED MATTERS..................................... 25
Section 7.1. Survival of Representations, Warranties and Covenants..... 25
Section 7.2. Indemnity by Sellers...................................... 26
Section 7.3. Indemnity by Parent and the Purchaser..................... 26
Section 7.4. Limits on Indemnification................................. 26
Section 7.5. Third Party Claims.........................................27
ARTICLE VIII
MISCELLANEOUS............................................................28
Section 8.1. Modification and Waiver....................................28
Section 8.2. Notices....................................................28
Section 8.3. Assignment.................................................29
Section 8.4. Governing Law..............................................29
Section 8.5. Counterparts...............................................30
Section 8.6. Interpretation.............................................30
Section 8.7. Entire Agreement...........................................30
Section 8.8. Severability...............................................30
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is made as of February 2, 1997
by and among XXXXXXX CORPORATION, a Delaware corporation ("Parent"), TRANSPRO
GROUP, INC., a Delaware corporation and wholly owned subsidiary of Parent (the
"Purchaser"), XXXXX INDUSTRIAL CORPORATION, a Michigan corporation ("Xxxxx"),
and the corporations listed on Annex A, each a direct or indirect wholly owned
domestic subsidiary of Xxxxx (each individually a "Subsidiary" and collectively
the "Subsidiaries"). Xxxxx and the Subsidiaries are sometimes collectively
referred to as "Sellers" and individually as a "Seller." Sellers, Parent and
the Purchaser are sometimes collectively referred to as the "Parties" and
individually as a "Party."
Xxxxx, through the Subsidiaries, certain direct or indirect wholly owned
foreign subsidiaries listed on Annex B (the "Foreign Subsidiaries"), and certain
divisions of its own ("Divisions") (collectively, "TPG"), designs, manufactures
and markets engine-performance systems, engine-protection systems and components
and accessories for heavy-duty trucks, other commercial vehicles and marine
equipment (the "Business"). This Agreement sets forth the terms and conditions
under which Sellers are willing to sell to the Purchaser, and the Purchaser is
willing to purchase from Sellers, with respect to the Divisions and Subsidiaries
located in the United States, substantially all of the Divisions' and
Subsidiaries' respective assets relating to the Business, including all of the
capital stock of the Foreign Subsidiaries.
ACCORDINGLY, the Parties agree as follows:
ARTICLE I
THE BASIC TRANSACTION
Section 1.1. Agreement to Purchase and Sell Assets. On the terms and
subject to the conditions of this Agreement, at the Closing (defined below) the
Purchaser will purchase from Sellers, and Sellers will sell and transfer to the
Purchaser, all of the right, title and interest that Sellers possess and have
the right to transfer in all of the properties, assets, rights, claims and
goodwill relating exclusively to the Business (collectively, the "Purchased
Assets"), including without limitation the following:
(a) Current Assets. All accounts and notes receivable, prepaid
expenses, deposits, rights or claims to refunds or rebates of any kind and
all other current assets;
(b) Inventory. All inventories of raw materials, work-in-process,
finished goods (including all inventories consigned to dealers, sales
representatives and others) and supplies, wherever located;
(c) Equipment. All machinery, equipment, tooling, dies, molds, tools,
fixtures, furniture, office equipment, computer equipment and software,
showroom models and displays, automobiles, trucks, trailers, other
vehicles, fuel, spare parts and leasehold improvements, together with all
express and implied warranties by the manufacturers or sellers of those
items, and all maintenance records, brochures, catalogues and other
documents relating to those items or to the installation or functioning of
those items;
(d) Real Property. The real property owned by Sellers described on
attached Exhibit 1.1(d) (the "Real Property"), together with all related
land rights, easements, rights of way and other appurtenances to the
property, and all blueprints, building drawings, architectural
specifications and other documents relating to the property;
(e) Real Property Leases. The real property leases listed on attached
Exhibit 1.1(e), and any leasehold improvements and security or similar
deposits relating to those leases;
(f) Contracts. All customer and supplier purchase orders, personal
property leases and other contracts, agreements and commitments, and any
security or similar deposits relating to those contracts, agreements and
commitments;
(g) Intellectual Property. All registered and unregistered domestic
and foreign patents, patent applications, inventions upon which patent
applications have not yet been filed, service marks, trade names,
trademarks, trademark registrations and applications, logos, copyrighted
works, copyright registrations and applications, trade secrets, formulae,
technology, designs, processes, inventions, know-how and other intellectual
property rights (collectively, the "Intellectual Property Assets");
(h) Records. All records, customer and supplier lists, payroll and
personnel records, product information, product drawings, production
documentation, material specifications, equipment lists, formulae,
specifications, drawings, plans, reports, data, notes, correspondence,
contracts, labels, catalogues, brochures, art work, photographs,
advertising materials, marketing and production literature, files and other
records and documents, including books of account, ledgers, and other
financial records;
(i) Permits and Licenses. All permits, licenses, orders, franchises,
and approvals to the extent transferable;
(j) Intangible Property Rights. All suits, claims, actions,
proceedings or investigations and other intangible property rights;
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(k) Insurance Policies. The life insurance policies upon the life of
Xxxxxxx Xxxxxxxx, Xxxxxxx Xxxx and Xxxxxxx Xxxxxx and all insurance
policies solely relating to the Business or the Purchased Assets to the
extent assignable; and
(l) Foreign Subsidiaries. All of the issued and outstanding capital
stock of the Foreign Subsidiaries.
Notwithstanding the foregoing, the Purchased Assets do not include those
assets set forth on attached Exhibit 1.1(m) (the "Excluded Assets"). The
Purchased Assets will be transferred to the Purchaser free and clear of all
claims, liens, mortgages, security interests, encumbrances, charges,
obligations, rights of third parties and other restrictions ("Liens"), except
for those Liens described on attached Exhibit 1.1(n) (the "Permitted Liens").
Section 1.2 Purchase Price; Allocation.
(a) In consideration of the transfer of the Purchased Assets to the
Purchaser and Sellers' other undertakings set forth in this Agreement, the
Purchaser will, and Parent will cause the Purchaser to (including providing
sufficient funds), pay to Sellers an aggregate of Eighty-Six Million
Dollars ($86,000,000) (collectively, the "Purchase Payment"), payable at
Closing by wire transfer of immediately available funds to an account or
accounts designated by Sellers.
(b) As additional consideration for the transfer of the Purchased
Assets to the Purchaser and Sellers' other undertakings set forth in this
Agreement, at Closing the Purchaser will, and Parent will cause the
Purchaser to (including providing sufficient funds), assume and fully pay,
satisfy and discharge when due (other than in the case of any good faith
disputes) all of Sellers' respective liabilities and obligations to the
extent relating to the Business (whether due or to become due, known or
unknown, absolute or contingent, or liquidated or unliquidated), including
without limitation all liabilities for taxes (other than income taxes
imposed on any Seller relating to the Business and other than income taxes
imposed on any Foreign Subsidiary with respect to taxable periods ending
prior to the Closing and, with respect to any taxable periods beginning
before and ending after the Closing, the portion of such taxable periods
ending on and including the Closing, determined on the basis of a "closing
of the books" as of the time of Closing but with items determined on an
annual basis (such as depreciation) allocated pro rata on a daily basis and
with any net operating loss carryforwards allocated first to reduce income
allocable to the period prior to the Closing), all liabilities and
obligations in respect of any Litigation Claim (as defined below)
constituting an Assumed Liability, all employee benefit and welfare
obligations and other employment-related liabilities, including any
severance obligations to employees of the Divisions and the Subsidiaries
not hired
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by the Purchaser and obligations to Xxxxxxx Xxxxxxxx, Xxxxxxx Xxxx and
Xxxxxxx Xxxxxx under their respective Supplemental Executive Retirement
Plans with Xxxxx, as amended, all employee benefit-related obligations to
the extent provided in Sections 4.17, 4.18 and 4.19 below, all liabilities
and obligations arising under the contracts, agreements and other
commitments included in the Purchased Assets, obligations under that
certain Indemnity Agreement between Xxxxx and Xxxxxxx Xxxxxxxx with respect
to acts or omissions occurring at or prior to the Closing with respect to
the Business, and all environmental liabilities and all other liabilities
associated with the Business, in each case regardless of whether disclosed
to Parent or the Purchaser and regardless of whether consistent with the
representations and warranties of Sellers in this Agreement (collectively,
the "Assumed Liabilities"). Notwithstanding the foregoing, (i) the Assumed
Liabilities will not include those liabilities described in attached
Exhibit 1.2(b), and (ii) Xxxxx, on the one hand, will be liable for one-
half of all sales, use, excise, transfer, documentary, recording and other
taxes and fees associated with the transfer of the Purchased Assets to the
Purchaser (the "Transfer Taxes") and Parent and the Purchaser, on the other
hand, will be liable for one-half of all Transfer Taxes, and the Parties
will reimburse each other as appropriate to effect the foregoing allocation
of responsibility. The Parties acknowledge and agree that the Assumed
Liabilities include any environmental liabilities to the extent they relate
to properties owned, operated or utilized, or to which any materials or
substances were sent or disposed of, by or with respect to the Business, in
each case before or after Closing. The Purchase Payment and the Assumed
Liabilities are collectively referred to in this Agreement as the "Purchase
Price."
(c) The Purchase Price will be allocated among the Purchased Assets as
mutually determined by the Parties not later than the Closing in accordance
with Section 1060 of the Code (as defined below) and the regulations
thereunder, which allocation will be binding on the Parties for tax
purposes.
Section 1.3. Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") will take place in the office of Xxxxxxx & Xxxxx,
000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 at 10 a.m. local time on the
second business day after the satisfaction of the conditions set forth in
Article V below. The Closing will be effective as of the close of business on
the actual day of Closing, and possession of the Purchased Assets shall be
delivered to Purchaser immediately after the Closing on the Closing Date.
Section 1.4. Deliveries at Closing. At the Closing: (a) Sellers will (i)
deliver to Parent and the Purchaser the various certificates, instruments and
documents referred to in Section 5.2 below, (ii) execute, acknowledge (if
appropriate) and deliver to the Purchaser instruments of sale, transfer,
conveyance and assignment (in form and substance acceptable to the Purchaser)
sufficient to transfer the Purchased Assets to the Purchaser, provided that no
such instrument shall expand in any manner the representations and warranties
made by Sellers in this Agreement, (iii) deliver to the Purchaser resignations
of members of the respective Boards of
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Directors of each Foreign Subsidiary as requested by the Purchaser before
Closing, and (iv) deliver to Parent and the Purchaser any other documents
required under this Agreement or reasonably requested by Parent or the Purchaser
so long as they do not expand in any manner the representations and warranties
made by Sellers in this Agreement; and (b) Parent and/or the Purchaser, as
applicable, will (i) deliver to Sellers the Purchase Payment, (ii) execute,
acknowledge (if appropriate) and deliver to Sellers an instrument or instruments
(in form and substance acceptable to Sellers) effecting the assumption of the
Assumed Liabilities, provided, that no such instrument will expand in any manner
the assumption of obligations of Parent and Purchaser in this Agreement, (iii)
deliver to Sellers the various certificates, instruments and other documents
referred to in Section 5.3 below, and (iv) deliver to Sellers any other
documents required under this Agreement or reasonably requested by any Seller.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers (which for purposes of this Article II are deemed to include the
Foreign Subsidiaries) represent and warrant to Parent and the Purchaser, jointly
and severally, as follows, except as previously disclosed by Sellers in an SEC
Document (defined in Section 2.5 below) or in a disclosure letter dated of the
date of this Agreement and delivered to Parent and the Purchaser on the date
hereof, including the materials referenced in that letter (the "Disclosure
Letter"):
Section 2.1. Organization. Each Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each Seller has all requisite corporate power
and authority to own, lease and operate its properties relating to the Business
and to conduct its operations relating to the Business as now being conducted.
Each Seller is duly qualified or licensed and in good standing to do business in
each jurisdiction in which the property owned, leased or operated by it with
respect to the Business or the nature of its operations relating to the Business
makes such qualification necessary, except in those jurisdictions where the
failure to be duly qualified or licensed and in good standing would not,
individually or in the aggregate, have a material adverse effect on the
business, operations, assets or condition of Sellers taken as a whole with
respect to the Business (a "Seller Material Adverse Effect"). Complete copies
of each Seller's charter and bylaws, including all amendments, will be delivered
to the Purchaser before the Closing. Xxxxx owns directly or indirectly all of
the outstanding capital stock of each Subsidiary.
Section 2.2. Authority. Each Seller has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement and the consummation of the transactions contemplated by this
Agreement have been duly and validly authorized and approved by the Board of
Directors of each Seller and the shareholder of each Subsidiary and no other
corporate proceedings are necessary to authorize this Agreement or the
consummation of the transactions
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contemplated by this Agreement. This Agreement has been duly and validly
executed and delivered by each Seller and, assuming this Agreement constitutes a
legal, valid and binding agreement of Parent and the Purchaser, it constitutes a
legal, valid and binding agreement of each Seller, enforceable against it in
accordance with its terms.
Section 2.3. No Violations; Consents and Approvals.
(a) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated by this Agreement nor
compliance by any Seller with any of the provisions of this Agreement will
(i) violate any provision of any Seller's charter or bylaws, (ii) result in
a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default under, any of the terms, conditions or
provisions of any license, franchise, permit or agreement, or (iii) violate
any statute, rule, regulation, order or decree of any public body or
authority by which any Seller or any of the Purchased Assets are bound,
excluding from the foregoing clauses (ii) and (iii) any violations,
breaches, defaults or rights that either would not have a Seller Material
Adverse Effect or materially impair any Seller's ability to consummate the
transactions contemplated by this Agreement or for which any Seller has
received, or on or before Closing will have received, appropriate consents
or waivers.
(b) No filing or registration with, notification to, or authorization,
consent or approval of, any governmental entity is required in connection
with the execution and delivery of this Agreement by Sellers, or the
consummation by Sellers of the transactions contemplated by this Agreement,
except (i) expiration of the waiting period under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (ii) any
filings and consents that may be required under any environmental law
pertaining to any notification, disclosure or required approval triggered
by the transactions contemplated by this Agreement, (iii) any filings,
consents or approvals as may be required under the laws of any foreign
country in which Sellers, or any of them, conduct business or own any
property or assets and (iv) any other consents, approvals, orders,
authorizations, notifications, registrations, declarations and filings not
obtained or made before the Closing the failure of which to be obtained or
made would not have a Seller Material Adverse Effect.
Section 2.4. Financial Statements. Copies of unaudited consolidated
financial statements of Sellers with respect to the Business for the fiscal
years ending December 31, 1996 and 1995 (collectively, the "Financial
Statements") have been provided to Parent and the Purchaser. The Financial
Statements, including all notes and schedules to the Financial Statements, if
any, are in accordance with Sellers' books and records relating to the Business,
accurately and fairly reflect Sellers' transactions, assets and liabilities
relating to the Business, and present fairly Sellers' financial position with
respect to the Business as of the respective dates indicated and the results of
Sellers' operations and changes in cash flows with respect to
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the Business for the respective periods then ended, in conformity with generally
accepted accounting principles (except as may be indicated in the notes
accompanying the Financial Statements).
Section 2.5. SEC Documents. Xxxxx has made available to Parent and the
Purchaser accurate and complete copies of each registration statement, report,
proxy statement, information statement or schedule, together with all
amendments, that were required to be filed with the Securities and Exchange
Commission ("SEC") by Xxxxx since January 1, 1994 (the "SEC Documents"), each of
which was timely filed with the SEC. As of their respective dates, the SEC
Documents complied, or will comply, in all material respects with the applicable
requirements of the Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as amended, as the case may be, and none of the SEC
Documents contained, or will contain, any untrue statement of a material fact or
omitted, or will omit, to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were or are made, not misleading.
Section 2.6. Absence of Certain Changes. Since December 31, 1996, no
Seller has (a) incurred any liabilities or obligations of any nature, whether
accrued, contingent or otherwise, or suffered any event or occurrence that would
have a Seller Material Adverse Effect, or (b) made any changes in accounting
methods, principles or practices with respect to the Business. Since December
31, 1996, each Seller has operated the Business according to its ordinary course
of business consistent with past practice.
Section 2.7. Litigation. There is no suit, claim, action, proceeding or
investigation pending or, to the knowledge of Sellers, threatened against any
Seller, with respect to the Business, before any court or governmental entity
that would have a Seller Material Adverse Effect or prevent or delay the
consummation of the transactions contemplated by this Agreement. No Seller is
subject to any outstanding order, writ, injunction or decree that, to the extent
reasonably foreseen, in the future would have a Seller Material Adverse Effect
or would prevent or delay the consummation of the transactions contemplated by
this Agreement.
Section 2.8. Compliance with Applicable Law. With respect to the
Business:
(a) Sellers hold all permits, licenses, variances, exemptions, orders and
approvals of all governmental entities necessary for the lawful conduct of
the Business (the "Permits"), except for failures to hold any Permits that
would not have a Seller Material Adverse Effect;
(b) Each Seller is in compliance with the Permits applicable to it, except
where the failure to comply would not have a Seller Material Adverse
Effect;
(c) The operations of the Business have not been and are not being
conducted in violation of any law, ordinance, rule or regulation of any
governmental entity,
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except for violations or possible violations that do not and, insofar as
reasonably can be foreseen, in the future will not have a Seller Material
Adverse Effect; and
(d) No investigation or review by any governmental entity with respect to
any Seller is pending or, to the knowledge of Sellers, threatened nor, to
the knowledge of Sellers, has any governmental entity indicated an
intention to conduct the same, other than, in each case, those that would
not have a Seller Material Adverse Effect.
Section 2.9. Taxes. Each Seller, with respect to the Business, has filed
or caused to be filed all federal, state, local and foreign income and other
material tax returns required to be filed by them, and has paid or withheld or
caused to be paid or withheld all taxes of any nature whatsoever, with any
related penalties, interest and liabilities (any of the foregoing being referred
to in this Agreement as a "Tax") that are shown on those tax returns as due and
payable or otherwise required to be paid, other than Taxes being contested in
good faith and for which adequate reserves have been established, except where
the failure to file, pay or withhold would not have a Seller Material Adverse
Effect. There are no material claims, assessments or audits pending or, to
Sellers' knowledge, threatened against any Seller with respect to the Business
for any alleged deficiency in any Tax that, if upheld, would have a Seller
Material Adverse Effect, and no Seller knows of any threatened Tax claims or
assessments against any Seller that if upheld would have a Seller Material
Adverse Effect. There are no waivers or extensions of any applicable statute of
limitations to assess any Taxes relating to the Business. All returns filed
with respect to Taxes relating to the Business are true and correct, except
where any failure to be true and correct would not have a Seller Material
Adverse Effect. There are no outstanding requests for any extension of time
within which to file any return or within which to pay any Taxes shown to be due
on any return. There are no Liens for any Taxes upon the assets of the Business
(other than statutory Liens for Taxes not yet due and payable and Liens for real
estate taxes being contested in good faith) which would have a Seller Material
Adverse Effect.
Section 2.10. Termination, Severance and Employment Agreements. Sellers
have provided to Parent or the Purchaser a complete and accurate list of each of
the following as it relates to the Business: (a) employment or severance
agreement with any director, officer or other key employee that is not
terminable without material liability or obligation (either individually or
collectively) on 60 days' or less notice; (b) agreement with any director,
officer or other key employee that provides any term of employment or other
compensation guarantee or extending severance benefits or other benefits after
termination not comparable to benefits generally available to employees of the
Business; (c) agreement, plan or arrangement with any director, officer or other
key employee under which that person may receive payments that may be subject to
tax imposed by (Section) 4999 of the Internal Revenue Code of 1986, as amended
(the "Code"), or included in the determination of that person's "parachute
payment" under (Section) 280G of the Code; and (d) agreement, plan or
arrangement with or affecting any director, officer or other key employee any of
the benefits of which will be increased, or the vesting of the benefits of which
will be accelerated, by the occurrence of any of the transactions contemplated
by this Agreement or the value of any of the benefits of which will be
calculated on the basis of any of
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the transactions contemplated by this Agreement. Since December 31, 1996, no
Seller has entered into or amended, in any material respect, any employment or
severance agreement with, or granted any severance or termination pay to, any
director, officer or other key employee of the Business. For purposes of this
Agreement, "key employee" means an employee whose aggregate annual compensation
in 1996 or 1997 exceeded, or is expected to exceed, $100,000.
Section 2.11. Employee Benefit Plans; ERISA.
(a) With respect to the Business: (i) each "employee benefit plan" (as
defined in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")), and all other employee benefit, bonus,
incentive, stock option (or other equity-based), severance, change in
control, welfare (including post-retirement medical and life insurance) and
fringe benefit plans (whether or not subject to ERISA) maintained or
sponsored by any Seller or any trade or business, whether or not
incorporated, that would be deemed a "single employer" within the meaning
of Section 4001 of ERISA (an "ERISA Affiliate"), for the benefit of any
employee or former employee of a Division or Subsidiary or any of Sellers'
ERISA Affiliates (the "Plans") has been operated in accordance with its
terms and is in compliance (including the making of governmental filings)
with all applicable laws, including ERISA and the applicable provisions of
the Code, except for failures that would not have a Seller Material Adverse
Effect, (ii) each of the Plans intended to be "qualified" within the
meaning of Section 401(a) of the Code (the "Qualified Plans") has been
determined by the Internal Revenue Service to be so qualified, and, since
the date of such determination, no event has occurred that would adversely
effect a Plan's qualified status, (iii) no "reportable event," as that term
is defined in Section 4043(c) of ERISA (for which the 30-day notice
requirement to the Pension Benefit Guaranty Corporation ("PBGC") has not
been waived), has occurred with respect to any Plan that is subject to
Title IV of ERISA that presents a risk of liability to any governmental
entity or other person that would have a Seller Material Adverse Effect,
and (iv) there are no pending or, to Sellers' knowledge, threatened claims
(other than routine claims for benefits) audits, investigations or
litigation by, on behalf of, against or relating to, any of the Plans or
any trusts related thereto that would have a Seller Material Adverse
Effect. No Plan is a "multiemployer plan" (within the meaning of Sections
3(37) or 4001(a)(3) of ERISA) nor has any Seller or any ERISA Affiliate
ever contributed or been required to contribute to any multiemployer plan.
(b) (i) No Plan relating to the Business has incurred an "accumulated
fund deficiency" (as defined in Section 302 of ERISA or Section 412 of the
Code), whether or not waived and (ii) neither any Seller nor any ERISA
Affiliate has incurred any liability under Title IV of ERISA except for
required premium payments to the PBGC, which payments have been made when
due, and no events have occurred that are reasonably likely to give rise to
any liability of any
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Seller or an ERISA Affiliate under Title IV of ERISA or that could
reasonably be anticipated to result in any claims being made against the
Purchaser by the PBGC that present a risk of liability that would have a
Seller Material Adverse Effect.
(c) With respect to each Plan relating to the Business that is subject
to Title IV of ERISA, (i) Sellers have provided to Parent or the Purchaser
copies of the most recent actuarial valuation report prepared for the Plan
before the date of this Agreement, (ii) the assets and liabilities in
respect of the accrued benefits as set forth in the most recent actuarial
valuation report prepared by the Plan's actuary fairly presented the funded
status of the Plan in all material respects, and (iii) since the date of
the valuation report there has been no adverse change in the funded status
of any of those Plans that would have a Seller Material Adverse Effect.
(d) Neither any Seller nor any ERISA Affiliate has failed to make any
contribution or payment to any Plan relating to the Business that has
resulted or could result in the imposition of a lien or the posting of a
bond or other security under ERISA or the Code that would have a Seller
Material Adverse Effect.
Section 2.12. Environmental Matters. Each Seller, with respect to the
Business, has obtained and is in compliance with the terms and conditions of all
required permits, licenses, registrations and other authorizations required
under Environmental Laws (as defined below), except for failures that would not
have a Seller Material Adverse Effect. Each Seller, with respect to the
Business, is in compliance with all Environmental Laws, except for failures to
comply that would not have a Seller Material Adverse Effect. No Seller, with
respect to the Business, has received notice of any past or present events,
conditions, circumstances, activities, practices, incidents, actions or plans
that have resulted in or threaten to result in any liability, or otherwise form
the basis of any claim, action, suit, proceeding, hearing or investigation
under, any Environmental Laws that would have a Seller Material Adverse Effect.
For purposes of this Section 2.12, (a) "Environmental Laws" mean applicable
federal, state, local and foreign laws, regulations and codes relating in any
respect to human health and safety, pollution or protection or the environment
and (b) "Hazardous Substances" means any toxic, caustic or otherwise dangerous
substance (whether or not regulated under federal, state or local environmental
statutes, rules, ordinances, or orders), including (i) "hazardous substance" as
defined in 42 U.S.C. (Section) 9601, and (ii) petroleum products, derivatives,
byproducts and other hydrocarbons.
Section 2.13. Labor Matters. Since January 1, 1995, no Seller, with
respect to the Business, (a) has been subject to, or to Sellers' knowledge
threatened with, any strike, lockout or other labor dispute or engaged in any
unfair labor practice, the result of which had or constituted, or could
reasonably be expected to have or constitute, a Seller Material Adverse Effect,
or (b) has received notice of any pending petition for certification before the
National Labor Relations Board with respect to any material group of employees
of any Subsidiary or
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Division who are not currently organized. Sellers have provided to Parent or the
Purchaser true, correct and complete copies of each collective bargaining
agreement to which employees of any Subsidiary or Division are subject.
Section 2.14. Title to and Condition of the Purchased Assets. Each Seller
has or will have by Closing good, valid and marketable title to the Purchased
Assets (including the outstanding capital stock of the Foreign Subsidiaries)
purported to be owned by that Seller, free and clear of all Liens other than the
Permitted Liens. All of the capital stock of the Foreign Subsidiaries is owned
directly or indirectly by Xxxxx, and there are no outstanding options, warrants,
rights or agreements respecting the issuance, disposition or acquisition of any
such capital stock. With respect to the condition of the Purchased Assets, all
of the Purchased Assets will be transferred to the Purchaser on an "AS IS, WHERE
IS" basis, and SELLERS MAKE NO AND EXPRESSLY DISCLAIM ANY WARRANTY, EXPRESS OR
IMPLIED, WITH RESPECT TO THE PURCHASED ASSETS, INCLUDING ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Section 2.15. Real Property. No building or improvement on the Real
Property encroaches on any easement or property owned by another and no building
or improvement owned by another encroaches on the Real Property, other than any
encroachment that would not have a Seller Material Adverse Effect. The Real
Property, and the applicable Seller's use of the Real Property, comply in all
respects with all laws, regulations, rules, orders, zoning ordinances and
requirements applicable to the Real Property, other than any failure to comply
that would not have a Seller Material Adverse Effect. There are no pending or,
to Sellers' knowledge, threatened condemnation proceedings against any portion
of the Real Property which if adversely determined would have a Seller Material
Adverse Effect.
Section 2.16. Intellectual Property. To Sellers' knowledge, there is no
infringement or unlawful use by any person or entity of any of the Intellectual
Property Assets, other than any infringement or use that would not have a Seller
Material Adverse Effect. No Seller, with respect to the Business, has
manufactured or sold products that conflict with or infringe upon any
proprietary rights of others, except where the conflict or infringement would
not have a Seller Material Adverse Effect.
Section 2.17. Contracts. All material contracts, leases and other
agreements included in the Purchased Assets (the "Assigned Contracts") are
valid, binding and enforceable in all material respects in accordance with their
terms. Each Seller that is a party to an Assigned Contract and, to Sellers'
knowledge, each other party to that Assigned Contract, has complied and is
complying in all material respects with the terms of that Assigned Contract, and
to Sellers' knowledge no event has occurred or circumstances exist that (with or
without notice or lapse of time) may contravene, conflict with or result in a
violation or breach of, or give any Seller or any other person or entity the
right to declare a default under, any Assigned Contract that would have a Seller
Material Adverse Effect.
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Section 2.18. Broker's Fees. Neither Sellers nor anyone acting on any
Seller's behalf have incurred any liability for any broker's fees, commissions
or financial advisory or finder's fees in connection with any of the
transactions contemplated by this Agreement for which Parent or the Purchaser
would become liable.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
PARENT AND THE PURCHASER
Parent and the Purchaser represent and warrant, jointly and severally, to
each Seller as follows:
Section 3.1. Organization. Each of Parent and the Purchaser is a
corporation duly incorporated, validly existing and in good standing under the
laws of its state of incorporation and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted.
Section 3.2. Authority. Each of Parent and the Purchaser has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
by this Agreement have been duly and validly authorized and approved by the
respective Boards of Directors of Parent and the Purchaser and no other
corporate proceedings are necessary to authorize this Agreement or the
consummation of the transactions contemplated by this Agreement. This Agreement
has been duly and validly executed and delivered by Parent and the Purchaser
and, assuming this Agreement constitutes a legal, valid and binding agreement of
Sellers, it constitutes a legal, valid and binding agreement of Parent and the
Purchaser, enforceable against each of them in accordance with its terms.
Section 3.3. No Violations; Consents and Approvals.
(a) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated by this Agreement nor
compliance by Parent and the Purchaser with any of the provisions of this
Agreement will (i) violate any provision of its charter or bylaws, (ii)
result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default under, any of the terms,
conditions or provisions of any license, franchise, permit or agreement to
which Parent or the Purchaser is a party or by which Parent or the
Purchaser or any of its properties is bound, or (iii) violate any statute,
rule, regulation, order or decree of any public body or authority by which
Parent or the Purchaser or any of its properties is bound, excluding from
the foregoing clauses (ii) and (iii) violations, breaches, defaults or
rights that, either individually or in the aggregate, would not have a
material adverse effect on
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Parent's or the Purchaser's ability to perform its obligations pursuant to
this Agreement or consummate the transactions contemplated by this
Agreement (a "Parent Material Adverse Effect") or for which Parent or the
Purchaser has received or on or before Closing will have received
appropriate consents or waivers.
(b) No filing or registration with, notification to, or authorization,
consent or approval of, any governmental entity is required by Parent or
the Purchaser in connection with the execution and delivery of this
Agreement, or the consummation by Parent or the Purchaser of the
transactions contemplated by this Agreement, except (i) expiration of the
waiting period under the HSR Act and (ii) any other consents, orders,
authorizations, registrations, declarations and filings not obtained or
made before Closing the failure of which to be obtained or made would not
have a Parent Material Adverse Effect.
Section 3.4. Broker's Fees. Neither Parent, the Purchaser nor anyone
acting on their behalf has incurred any liability for any broker's fees,
commissions or financial advisory or finder's fees in connection with any of the
transactions contemplated by this Agreement for which any Seller could become
liable.
Section 3.5. Acceptance of Purchased Assets. Parent and the Purchaser
accept the Purchased Assets in their present condition on an "AS IS, WHERE IS"
basis.
Section 3.6. Financing. The Purchaser has available to it committed funds
sufficient to allow it to timely consummate the transactions contemplated by
this Agreement.
ARTICLE IV
COVENANTS
Section 4.1. Conduct of Business. Except as contemplated by this
Agreement or as expressly agreed to in writing by Parent, during the period from
the date of this Agreement to the Closing: (a) each Seller will conduct its
operations relating to the Business in the ordinary course of business
consistent with past practices; (b) each Seller will exercise its reasonable
best efforts to maintain and preserve its assets included in the Purchased
Assets, keep its insurance with respect to the Business in full force and
effect, preserve intact the present business organizations and personnel
relating to the Business, preserve the present goodwill of the Business with all
persons having business dealings with it and comply with all laws applicable to
the conduct of the Business; (c) Sellers will not take, or agree in writing or
otherwise to take, any action that would make any of the representations or
warranties of Sellers contained in this Agreement untrue or incorrect in any
material respect as of the date when made; and (d) the Foreign Subsidiaries will
not transfer any cash or cash equivalents to Xxxxx.
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Section 4.2. Names. Effective as of the Closing, Xxxxx hereby grants to
Parent and the Purchaser a royalty-free perpetual license to use in connection
with the Business the name "Xxxxx" (and any derivatives of that name) in the
form currently used by Sellers in connection with the Business. As soon as
practicable after the Closing, Xxxxx International Distribution Company will
amend its articles of incorporation to change its corporate name to a name that
does not include "Xxxxx."
Section 4.3. Access to Information. From the date of this Agreement to
the Closing, Sellers will give Parent, the Purchaser and their authorized
representatives (including legal counsel, environmental and other consultants,
financial advisors, accountants, banks, financial institutions and auditors)
full access during normal business hours to all facilities, personnel and books
and records of the Divisions and the Subsidiaries, will permit Parent and the
Purchaser to make any inspections that Parent and the Purchaser reasonably
require and will cause their respective officers to furnish Parent and the
Purchaser with any financial and operating data and other information (of which
Parent and the Purchaser will have the right to make copies at their own
expense) with respect to the Business that Parent and the Purchaser may from
time to time reasonably request; provided, however, that no invasive soil or
groundwater tests may be performed without the prior written consent of Xxxxx,
which consent will not be unreasonably withheld. All of the foregoing
information will be held in confidence in accordance with the terms of the
Confidentiality Agreement (the "Confidentiality Agreement") between Parent and
Xxxxx dated December 26, 1996, the terms of which are incorporated by reference
in this Agreement and which will survive the termination of this Agreement.
Section 4.4. Reasonable Best Efforts. Subject to the terms and conditions
in this Agreement and applicable law, each Party will use its reasonable best
efforts promptly to take, or cause to be taken, all actions and do, or cause to
be done, all things necessary, proper or appropriate under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement, including using reasonable best efforts to (i) obtain necessary
consents, approvals or waivers under its material contracts relating to the
Business, (ii) cooperate in making available information and personnel to the
lenders to the Purchaser with respect to any financing for the transactions
contemplated by this Agreement and (iii) lift any legal bar to the transactions
contemplated by this Agreement.
Section 4.5. Public Announcements. Before issuing any press release or
otherwise making any public statements with respect to this Agreement, the
Parties will consult with each other as to its form and substance and will not
issue the press release or make the public statement before such consultation,
except in either case as may be required by law or any obligations pursuant to
any listing agreement with any national securities exchange.
Section 4.6. Notification of Certain Matters. Prior to Closing, Xxxxx and
Parent will give prompt notice to the other of (a) the occurrence, or non-
occurrence, of any event the occurrence, or non-occurrence, of which would be
likely to cause either (i) any representation or warranty of any Party contained
in this Agreement to be untrue or inaccurate in any material respect at any time
from the date of this Agreement to the Closing, or (ii) any condition set forth
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in Article V to be unsatisfied at any time from the date of this Agreement to
the Closing, (b) any material failure of any Party to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement, and (c) any capital expenditure made by any Seller with respect
to the Business in excess of $500,000. The delivery of any notice pursuant to
this Section 4.6 will not limit or otherwise affect the remedies available prior
to Closing under this Agreement to the Party receiving the notice.
Section 4.7. Expenses. Except as expressly provided in this Agreement,
each Party will each bear its own expenses incurred in connection with the
preparation, execution and performance of this Agreement and the transactions
contemplated by this Agreement.
Section 4.8. HSR Filing. Each Party will use its reasonable best efforts
to file as promptly as practicable after the date of this Agreement its pre-
merger notification under the HSR Act and to respond as promptly as practicable
to all inquiries and requests resulting from the filing. Each Party will
furnish to the other a copy of its filing and will cooperate with each other and
keep each other informed concerning the status of its filing and communications
with any governmental authorities with respect to its filing.
Section 4.9. Employees. Effective as of the date of Closing, the
Purchaser will hire and continue the employment of such numbers of employees of
the Divisions and the Subsidiaries and on such terms, and will take all other
steps, that may be necessary to eliminate any obligation of Sellers under the
Worker Adjustment and Retraining Notification Act of 1988, including any
obligation to give notice of the transfer of operations or any loss of
employment or loss of pay or termination benefits. The Parties agree that the
provisions of this Section 4.9 are solely between and for the benefit of the
Parties and do not inure to the benefit of or confer rights upon any third
party, including any employees of the Parties.
Section 4.10. Preparation of Financial Statements. After Closing Sellers
will use their reasonable best efforts to cooperate with Parent and the
Purchaser to cause the preparation and delivery to the Purchaser of audited
consolidated financial statements of Sellers with respect to the Business for
the fiscal years ending December 31, 1996 and 1995 within 45 days after Closing.
The expenses associated with such preparation will be shared equally between
Xxxxx and the Parent, except that Parent's responsibility will not exceed
$75,000.
Section 4.11. Post-Closing Access to Records. The Parties will preserve
until December 31, 2002 all business records relating to the Purchased Assets,
the Assumed Liabilities and the transactions contemplated by this Agreement.
Each Party will afford the other Parties and their representatives and agents,
during normal business hours and upon reasonable advance notice, reasonable
access to (and the right to copy at the other's expense) those records for any
legitimate purpose, including a tax audit, governmental inquiry or litigation.
Section 4.12. Bulk Transfer Laws. Parent and the Purchaser waive
compliance with any bulk sale and transfer laws applicable to the transactions
contemplated by this Agreement.
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Section 4.13. Section 338 Election; Tax Returns. Without the prior
written consent of Xxxxx, neither Parent, the Purchaser nor any affiliate
thereof will make any election under Section 338 of the Code, or any similar
provision of state, local or foreign law, in connection with the transactions
contemplated by this Agreement. Parent and the Purchaser agree that no income
tax return of any Foreign Subsidiary with respect to any taxable period (or
portion thereof) prior to the Closing shall be filed or amended after the
Closing without the prior review and written approval of Xxxxx.
Section 4.14. Consents. The Parties will use their reasonable best
efforts to cooperate with each other to obtain any consents to assignment or
transfer of the Purchased Assets to the Purchaser. If consent to assignment is
not obtained or if such assignment is not permitted irrespective of consent,
Sellers will use their reasonable best efforts to cooperate with the Purchaser
in any reasonable arrangement designed to provide for the Purchaser all benefits
under such Purchased Assets, including enforcement for the benefit of the
Purchaser of any and all rights of the applicable Seller against any other
person with respect to the Purchased Assets; provided, however, that the
Purchaser will bear all costs and expenses relating to such enforcement.
Section 4.15. Litigation Matters. Following the Closing, the Purchaser
will assume the defense of or settle, to the extent permitted under applicable
Policies (as defined below) covering the Insured Claim (as defined below), each
Litigation Claim included among the Assumed Liabilities (the "Defendant Claims")
and will use its reasonable best efforts to cause Xxxxx and its affiliates
(other than the Foreign Subsidiaries) to be removed as named parties therefrom,
provided such removal would not prejudice any rights or any potential remedies
or recoveries. Following the Closing, the Purchaser shall, in its sole
discretion, prosecute, settle, compromise or cause to be dismissed each
Litigation Claim included among the Purchased Assets (the "Plaintiff Claims")
and will use its reasonable best efforts to cause Xxxxx and its affiliates
(other than the Foreign Subsidiaries) to be removed as named parties therefrom,
provided such removal would not prejudice any rights or any potential remedies
or recoveries. Whether or not Parent effects the removal of Xxxxx and its
affiliates (other than the Foreign Subsidiaries) from any such Defendant Claim
or Plaintiff Claim, and in furtherance and not limitation of the provisions of
Article VII, Parent and the Purchaser will defend, indemnify and hold harmless
each Seller and its directors, officers, employees, shareholders,
representatives and agents pursuant to Section 7.3 against any Indemnified Loss
(as defined below) in respect of any Defendant Claim or Plaintiff Claim.
Section 4.16. Insurance Matters.
(a) Xxxxx will use its reasonable best efforts, consistent with past
practice, to maintain in full force and effect after the Closing Date its
liability insurance policies, including without limitation product
liability, general liability, workers' compensation and environmental
liability policies (collectively, the "Policies" and, individually, a
"Policy") that relate to the Business in respect of acts, events or
conditions that occurred or existed prior to the Closing (the
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"Insured Claims") and will not, without the prior written consent of
Parent, waive any rights of Parent or Purchaser as insureds (or, if Parent
or the Purchaser is not permitted to be an insured under a Policy, any
rights or benefits that the Parent or the Purchaser would have under that
Policy if it were so permitted (an "Intended Insured Party")) under the
Policies. At Parent's or the Purchaser's request in its discretion, Xxxxx
will use its reasonable best efforts to cause Parent and the Purchaser to
be named as additional insureds under the Policies in respect of the
Insured Claims; provided, however, that Parent and the Purchaser will be
liable for any additional premiums or other charges and will be responsible
for any other obligations to the extent related to naming Parent and the
Purchaser as additional insureds. Parent and the Purchaser may elect to
discontinue coverage as an insured under any Policy upon written notice to
that effect to Xxxxx.
(b) To the extent that as of the Closing the aggregate deductible,
retention, reimbursement or similar liability (collectively, the "Aggregate
Retention") for any Policy described in the first sentence of Section
4.16(a) above with respect to any Policy year or other applicable period
has not been fully met, the remaining portion (the "Remaining Portion") of
such Aggregate Retention shall, to the extent of claims made thereafter in
respect of such Policy year or period, be borne one-half by Sellers, on the
one hand, and one-half by Parent and the Purchaser (as insured party or
Intended Insured Party), on the other hand (it being understood that in no
event shall Sellers, on the one hand, or Parent and the Purchaser (as
insured parties or Intended Insured Parties), on the other hand, bear a
portion of the Aggregate Retention in excess of its or their, as the case
may be, claims). Subject to the foregoing, each insured party (or Intended
Insured Party) will bear all individual per-claim deductibles, retentions,
reimbursement and similar liabilities in respect of each claim by such
insured party or Intended Insured Party in accordance with the terms of the
Policy. If by reason of the timing of claims made after the Closing with
respect to such Policy, the Remaining Portion of any Aggregate Retention is
borne other than in accordance with the principles reflected in the first
sentence of this Section 4.16(b), then the appropriate party will make such
arrangements to compensate the other party or parties that have borne the
disproportionate amount of such Remaining Portion as is reasonably
acceptable to such latter party or parties (it being understood that such
latter party or parties shall be placed in the same economic position as
intended by the first sentence of this Section 4.16(b)).
(c) The aggregate amount of insurance coverage available as of the
Closing under a Policy with respect to any year or other applicable period
thereunder shall be shared one-half by Sellers, on the one hand, and one-
half by Parent and the Purchaser (as insured party or Intended Insured
Party ), on the other hand. Any allocable portion of insurance coverage
available as of the Closing under any Policy with respect to any year or
other applicable period
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thereunder that is not used by Sellers, on the one hand, or Parent and the
Purchaser (as insured party or Intended Insured Party ), on the other hand,
may be used by the other party. If with respect to any year or other
applicable period under a Policy the aggregate amount of insurance coverage
available thereunder as of the Closing shall have been exhausted and
Sellers or Parent and the Purchaser, as the case may be, shall have
exhausted a portion of the aggregate amount of such insurance coverage
greater than its allocable share as determined in accordance with the
second preceding sentence, Sellers or Parent and the Purchaser, as the case
may be, shall promptly make such arrangements to compensate such party for
its loss of insurance coverage as are reasonably acceptable to such party
(it being understood that such party shall be put in the same economic
position as if the sharing of aggregate insurance coverage provided in this
Section 4.16(c) had initially occurred). Notwithstanding the foregoing, the
Parent and the Purchaser shall share in the aggregate insurance coverage
described above solely in respect of claims relating to the Business.
(d) Each Party agrees that it shall comply with the terms of each
Policy in respect of any Insured Claim, including the claims administration
procedures thereof.
(e) After Closing Sellers, on the one hand, and Parent and the
Purchaser, on the other hand, shall provide information reasonably
requested by the other regarding the status of claims, utilization of
coverage, exhaustion of all deductibles, retentions, reimbursement and
similar liabilities, and other matters regarding the Policies.
Section 4.17. Collectively Bargained Qualified Plans. This Section 4.17
applies to all Qualified Plans sponsored or maintained by a Seller solely
relating to employees in a collective bargaining agreement covering TPG.
Sellers have disclosed all such Qualified Plans covered by this Section 4.17 to
Purchaser and will furnish a list of such Qualified Plans prior to the Closing
Date. With respect to all such plans, effective as of the Closing Date: (a)
each Seller sponsoring such a plan shall take any and all action necessary under
the plan and applicable law to transfer the sponsorship of the plan to the
Purchaser; (b) all records relating to the operation and administration of such
a plan shall be delivered to the Purchaser; (c) Sellers shall secure the
resignation or removal of all trustees or fiduciaries of such a plan, unless
Purchaser specifically informs Sellers in writing that it desires to continue
the appointment of a trustee or other fiduciary; and (d) Sellers shall, or shall
cause any other applicable named fiduciary under such a plan to, direct the
trustee of the plan to transfer all assets to a successor trustee designated by
the Purchaser.
Section 4.18. Other Qualified Plans. This Section 4.18 applies to all
Qualified Plans sponsored or maintained by a Seller relating to TPG employees
which also cover employees of that Seller who are not related to TPG. The
Sellers have disclosed to Purchaser all such
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Qualified Plans covered by this Section 4.18 and will furnish a list of such
Qualified Plans prior to the Closing Date.
(a) Defined Benefit Pension Plans. With respect to all such defined
benefit pension plans, effective as of the Closing Date: (i) each Seller
sponsoring such a plan shall take necessary action to prepare a successor
plan document in contemplation of a spin-off of assets and liabilities for
current and former employees relating to TPG into a separate and successor
plan with terms that are substantially similar to the original plan; (ii) a
list of such current and former employees shall be furnished to Purchaser
prior to the Closing Date; (iii) each Seller shall take all other necessary
action to transfer assets and liabilities to each successor plan (including
the Applicable Percentage of any Excess Assets (both as defined in Code
section 414(1)(2)), and the calculation of the present value of the
liabilities transferred to a successor plan shall be based on the mortality
tables used by the original plans as of January 1, 1997 and the interest
rates used by the PBGC for terminations of defined benefit pension plans as
of the first day of the month that the transfer takes place; (iv) each
Seller sponsoring a successor plan shall take all action necessary under
the successor plan and applicable law to transfer the sponsorship of the
plan to the Purchaser; (v) all records corresponding to the original plans
relating to the operation and administration of the successor plans shall
be delivered to the Purchaser; (vi) Sellers shall secure the resignation or
removal of all trustees or fiduciaries of the successor plans, unless the
Purchaser specifically informs Sellers in writing that it desires to
continue the appointment of a trustee or other fiduciary; and (vii) Sellers
shall, or shall cause any other applicable named fiduciary under the plan
to, direct the trustee of a successor plan to transfer all assets to a
successor trustee designated by the Purchaser.
(b) Defined Contribution Plans. For each Qualified Plan covered by
this Section 4.18 that is a defined contribution plan, except an employee
stock ownership plan, effective as of the Closing Date: (i) each Seller
sponsoring such a plan shall take necessary action to prepare a successor
plan document in contemplation of a spin-off of assets and liabilities for
current and former employees relating to TPG into a separate and successor
plan with terms that are substantially similar to the original plan; (ii) a
list of such current and former employees shall be furnished to the
Purchaser prior to the Closing Date; (iii) each Seller shall take all other
necessary action to transfer assets and liabilities to each successor plan
attributable to current and former employees relating to TPG; (iv) each
Seller sponsoring a successor plan shall take all action necessary under
the successor plan and applicable law to transfer sponsorship of the plan
to the Purchaser; (v) all records corresponding to the original plans
relating to the operation and administration of the successor plans shall
be delivered to the Purchaser; (vi) Sellers shall secure the resignation or
removal of all trustees or fiduciaries of the successor plans, unless the
Purchaser specifically informs
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Sellers in writing that it desires to continue the appointment of a trustee
or other fiduciary; and (vii) Sellers shall, or shall cause any other
applicable named fiduciary under the plan to, direct the trustee of a
successor plan to transfer all assets to a successor trustee designated by
the Purchaser.
(c) Employee Stock Ownership Plan. Effective as of the Closing Date,
the Sellers shall: (i) take all action necessary to permanently discontinue
employer contributions to the employee stock ownership plan ("ESOP")
sponsored by a Seller and to fully vest the accounts of all participants;
(ii) take all action necessary to make final allocations of all unallocated
amounts, in accordance with terms of the ESOP document (which allocations
shall include all participants who are active TPG employees at the Closing
Date); (iii) submit the ESOP to the Internal Revenue Service for a
determination that the allocation of ESOP unallocated assets on the basis
of account balances does not adversely affect the ESOP's qualification
under Sections 401(a) and 4975(e)(7) of the Code; and (iv) after receipt of
the favorable determination letter, provide for the distribution of
benefits from the ESOP to the participants as soon as reasonable feasible.
Provided, however, if the Internal Revenue Service does not issue a
favorable determination letter with respect to allocation of ESOP
unallocated assets on the basis of account balances, or if all of the ESOP
unallocated assets cannot be allocated during 1997, if requested by
Purchaser, Sellers shall prepare a successor plan document for TPG
participants and take necessary action to transfer assets and liabilities
attributable to the TPG participants (including a percentage of the
unallocated assets that would be allocable to TPG participants under
Section 5.6(a) of the ESOP as in effect January 1, 1997) to the successor
plan, in accordance with clauses (i)-(vii) of Section 4.18(b), and such
successor plan shall be assumed by Purchaser.
Section 4.19. Welfare Plans.
(a) Medical Benefits Provided to Active Employees by the Purchaser.
Effective immediately after the Closing Date, the Purchaser shall make
available group medical plan coverage to all TPG active employees (and
their dependents and beneficiaries who had such coverage under a group
medical plan sponsored by Sellers on the Closing Date. The group medical
plan coverage provided by the Purchaser under this Section 4.19(a) shall,
to the extent permissible under applicable law, be based on such terms and
conditions as the Purchaser deems appropriate, in its sole discretion;
provided, however, that any such plan shall not preclude an employee from
receiving coverage for a preexisting illness or other medical condition to
the extent that the employee had coverage for that particular medical
condition under a group health plan maintained by a Seller on the Closing
Date.
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(b) Medical Benefits Provided to Retired Employees by the Purchaser.
Effective immediately after the Closing Date, the Purchaser shall assume
the obligation of Sellers to provide medical coverage to those TPG
employees (and their dependents and beneficiaries) who retired prior to the
Closing Date and as of the Closing Date were provided with retiree medical
benefits (other than COBRA coverage) by a Seller. A list of such employees
will be furnished to the Purchaser prior to the Closing Date.
(c) Benefits Provided by Sellers. Except with respect to a plan
described in Section 4.19(e) below, any claim incurred by a TPG employee
under any Welfare Plan (as defined below) sponsored or maintained by a
Seller on or prior to the Closing Date shall remain the sole liability and
responsibility of the Sellers and/or its particular Welfare Plan. A TPG
employee covered by a Welfare Plan maintained by a Seller on or before the
Closing Date shall have 180 days (or such longer or, in the case of a plan
not self-funded by such Seller, shorter period of time that applies under
the Seller's Welfare Plan) to submit a claim for benefits under the
Seller's Welfare Plan. "Welfare Plan" means an "employee welfare benefit
plan" as defined in Section 3(1) of ERISA maintained by a Seller for the
benefit of any TPG employee.
(d) COBRA Requirements. After the Closing Date: (i) Sellers shall be
responsible for providing the COBRA Coverage for all TPG employees (and
their dependents and beneficiaries) who incur a COBRA qualifying event on
or prior to the Closing Date; and (ii) the Purchaser shall be responsible
for providing COBRA Coverage for all TPG employees (and their dependents
and beneficiaries) who incur a COBRA qualifying event after the Closing
Date.
(e) Section 125 Plan. The provisions of this Section 4.19(e) shall
apply to any Plan maintained by a Seller under Code section 125 covering
TPG employees. Effective as of the Closing Date, Sellers shall take all
action necessary to: (i) spin-off that portion of such a plan covering TPG
employees into a separate plan with substantially similar terms and
conditions that are contained in the original plan; (ii) transfer an
appropriate amount of assets consisting of all unreimbursed salary
reduction contributions to the successor plan; and (iii) transfer
sponsorship of the successor plan to the Purchaser.
Section 4.20. Further Assurances. After Closing each Party will use its
reasonable best efforts to cooperate with each other to further effect the
transfer of the Purchased Assets to, and the assumption of the Assumed
Liabilities by, the Purchaser and the other transactions contemplated by this
Agreement, including (a) remitting to the Purchaser (i) payments received by
Sellers with respect to accounts receivables included in the Purchased Assets
and (ii) invoices and other bills received by Sellers with respect to
liabilities included in the Assumed Liabilities, and (b) providing each other
notice of any claim, obligation or liability for which the Party to be notified
is responsible under this Agreement. Within three business days after Closing,
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Parent will cause the Foreign Subsidiaries to pay and satisfy all inter-company
accounts or liabilities to Xxxxx and any other Seller.
Section 4.21. Restrictive Covenants. After Closing the Parties agree to
abide by the provisions set forth in Exhibit 4.21.
ARTICLE V
CONDITIONS TO THE OBLIGATIONS OF THE PARTIES
Section 5.1. Conditions to Obligations of the Parties. The obligations of
each Party to consummate the transactions contemplated by this Agreement will be
subject to the satisfaction at or before Closing of each of the following
conditions unless waived in writing by that Party:
(a) No statute, rule or regulation will have been promulgated,
enacted, entered or enforced, and no other legally binding, final and
nonappealable action will have been taken, by any domestic, foreign or
supranational government or governmental, administrative or regulatory
authority or agency of competent jurisdiction or by any court or tribunal
of competent jurisdiction, domestic, foreign or supranational, that in any
of the foregoing cases has the effect of (i) making illegal or directly or
indirectly prohibiting or significantly restricting the consummation of the
transactions contemplated by this Agreement, or (ii) that otherwise would
materially adversely affect Sellers or the Business taken as a whole;
provided, however, that Parent, the Purchaser and each Seller must have
complied with Section 4.4 of this Agreement;
(b) Any waiting period applicable to the transactions contemplated by
this Agreement under the HSR Act must have terminated or expired and all
other material consents and approvals of, and filings with any other
governmental entities or other third parties must have been received or
made, as applicable; and
(c) This Agreement must not have been terminated by any Party in
accordance with its terms.
Section 5.2. Additional Conditions to Obligations of Parent and the
Purchaser. The obligations of Parent and the Purchaser to consummate the
transactions contemplated by this Agreement will be subject to the satisfaction
at or before Closing of each of the following additional conditions unless
otherwise waived in writing by the Purchaser:
(a) the representations or warranties of Sellers contained in this
Agreement that are qualified by materiality must be true and correct in all
respects, and those that are not so qualified must be true and correct in
all material respects, when made and at the Closing as if made again at
that time,
-22-
except in each case for failures to comply that are capable of being and
are cured (other than by mere disclosure of the breach) within 10 days
after written notice from Parent to Xxxxx of the failure but in any event
before Closing;
(b) Sellers must have complied in all material respects with their
obligations under this Agreement, except for failures to comply that are
capable of being and are cured within 10 days after written notice from
Parent to Xxxxx of the failure but in any event before Closing;
(c) there must not have occurred on or after the date of this
Agreement any development or developments with respect to the Business that
have had or may reasonably be expected to have a Seller Material Adverse
Effect; and
(d) Xxxxx must have delivered to Parent and the Purchaser an officer's
certificate certifying that as of the Closing all the conditions set forth
in Sections 5.1 and Sections 5.2(a), (b) and (c) have been complied with.
Section 5.3. Additional Conditions to Obligations of Sellers. The
obligations of each Seller to consummate the transactions contemplated by this
Agreement will be subject to the satisfaction at or before the Closing of each
of the additional following conditions unless otherwise waived in writing by
Sellers:
(a) the representations or warranties of Parent and the Purchaser
contained in this Agreement that are qualified by materiality must be true
and correct in all respects, and those that are not so qualified must be
true and correct in all material respects, when made and at the Closing as
if made again at that time, except in each case for failures to comply that
are capable of being and are cured (other than by mere disclosure of the
breach) within 10 days after written notice from Xxxxx to Parent of the
failure but in any event before Closing;
(b) Parent and the Purchaser must have complied with their obligations
under this Agreement, except for failures to comply that are capable of
being and are cured within 10 days after written notice from Xxxxx to
Parent but in any event before Closing;
(c) Parent and the Purchaser must have delivered to each Seller an
officer's certificate certifying that as of the Closing all the conditions
set forth in Section 5.1 and Section 5.3(a) and (b) have been complied
with; and
(d) The cash tender offer for all of the outstanding capital stock of
Xxxxx by Scotsman Industries, Inc. ("Scotsman") or a subsidiary thereof
must have been consummated.
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ARTICLE VI
TERMINATION
Section 6.1. Termination. This Agreement may be terminated at any time
before the Closing:
(a) by mutual written consent of Xxxxx and Parent;
(b) by either Xxxxx or Parent if any court of competent jurisdiction
in the United States or other governmental body in the United States has
issued an order (other than a temporary restraining order), decree or
ruling or taken any other action restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement and the order,
decree, ruling or other action has become final and nonappealable; provided
that the party seeking to terminate this Agreement will have used its
reasonable best efforts to remove or lift the order, decree or ruling; or
(c) by either Xxxxx or Parent if the Closing has not occurred by June
30, 1997.
Section 6.2. Termination by Parent. This Agreement may be terminated by
Parent at any time before Closing if (a) the representations or warranties of
Sellers contained in this Agreement are not true and correct as if made at and
as of that time, except for (i) failures to be true and correct that could not
reasonably be expected to result in a Seller Material Adverse Effect and (ii)
failures to comply that are capable of being and are cured (other than by mere
disclosure of the breach) within 10 days after written notice from Parent to
Xxxxx of the failure; or (b) Sellers have failed to comply with their
obligations under this Agreement, except for (i) failures to comply that could
not reasonably be expected to result in a Seller Material Adverse Effect and
(ii) failures to comply that are capable of being and are cured within 10 days
after written notice from Parent to Xxxxx of the failure.
Section 6.3. Termination by Xxxxx. This Agreement may be terminated by
Xxxxx (a) if the Agreement and Plan of Merger dated as of February 2, 1997
among Xxxxx, Scotsman and K Acquisition Corp. is terminated for any reason; or
(b) at any time before the Closing if (i) the representations and warranties of
Parent and the Purchaser contained in this Agreement are not true and correct as
if made at and as of that time, except for (A) failures to be true and correct
that could not reasonably be expected to result in a Parent Material Adverse
Effect and (B) failures to comply that are capable of being and are cured (other
than by mere disclosure of the breach) within 10 days after written notice from
Xxxxx to Parent of the failure; or (ii) Parent or the Purchaser has failed to
comply with its obligations under this Agreement, except for (A) failures to
comply that could not reasonably be expected to result in a Parent Material
Adverse Effect and (B) failures to comply that are capable of being and are
cured within 10 days after written notice from Xxxxx to Parent of the failure.
-24-
Section 6.4. Notice of Termination. If Parent or Xxxxx terminates this
Agreement pursuant to this Article VI, that Party will promptly give written
notice to that effect to the other Party.
Section 6.5. Effect of Termination. In the event of termination of this
Agreement pursuant to this Article VI, this Agreement will become void, except
as provided in the last sentence of Section 4.3 and in Sections 4.7 and 6.6
(which provisions will survive any termination of this Agreement), without
liability on the part of any Party or its affiliates, directors, officers,
employees, stockholders, representatives or agents; provided, however, that the
foregoing will not release a party for liability for any willful or bad faith
breach of any obligation or undertaking under this Agreement. Each of the
Parties by this Agreement waives and releases any other claim that may otherwise
exist upon the termination.
Section 6.6. Termination Fee. If this Agreement is terminated by Xxxxx
(a) due to the failure of the condition set forth in Section 5.3(d) or (b) under
Section 6.3(a), Xxxxx will promptly pay to Parent (but in any event within three
business days after termination) the sum of $100,000, provided that the fee will
not be payable if Parent or the Purchaser is in material breach of any of its
material representations, warranties or obligations under this Agreement as of
the date of termination.
ARTICLE VII
INDEMNIFICATION AND RELATED MATTERS
Section 7.1. Survival of Representations, Warranties and Covenants. The
representations and warranties contained in this Agreement and any agreement,
document, instrument or certificate delivered under this Agreement will
terminate and expire at the Closing, except for the representations and
warranties set forth in Section 2.2, Section 2.14 and Section 2.18, all of which
will survive the Closing forever. The post-Closing covenants and agreements of
the Parties, including the indemnification covenants set forth in this Article
VII, will survive the Closing without limitation (except for those that, by
their terms, contemplate a shorter survival period). Except for the covenants
and agreements of Sellers in Section 4.1, which will survive for two years after
the Closing, all pre-Closing covenants and agreements of the Parties will not
survive the Closing. This Article VII constitutes the sole and exclusive remedy
of the Parties with respect to any subject matters addressed in this Agreement,
and each Party hereby waives and releases the other Parties from any and all
claims and other causes of action, including claims for contribution, relating
to those subject matters, other than claims for intentional fraud and for
injunctive relief. The making of a claim for indemnification under this Article
VII (a "Claim") will toll the running of the limitation period with respect to
that Claim. For purposes of the preceding sentence, a Claim will be deemed made
upon the commencement of an independent judicial proceeding with respect to a
matter or receipt by the indemnifying Party of a written notice of a Claim
setting forth in detail the factual and contractual bases for the Claim.
-25-
Section 7.2. Indemnity by Sellers. Sellers, jointly and severally, will
defend, indemnify and hold harmless Parent, the Purchaser and their respective
directors, officers, employees, shareholders, representatives and agents against
any loss, cost, damage, liability, obligation, claim or expense (including
reasonable attorney fees and court costs but excluding any consequential,
incidental, exemplary or similar damages) (collectively the "Indemnified
Losses") resulting from or relating to (a) any breach of any representation,
warranty, covenant or agreement made by Sellers in this Agreement that under
Section 7.1 survives the Closing or any breach or nonperformance of any
agreement entered into by any Seller at Closing, (b) any liabilities of Sellers
not assumed by the Purchaser pursuant to this Agreement, and (c) the successful
enforcement of Sellers' indemnification obligations under the Agreement.
Section 7.3. Indemnity by Parent and the Purchaser. Parent and the
Purchaser, jointly and severally, will defend, indemnify and hold harmless each
Seller and its directors, officers, employees, shareholders, representatives and
agents against any Indemnified Losses resulting from or relating to (a) any
breach or nonperformance of any covenant or agreement made by Parent or the
Purchaser in this Agreement that under Section 7.1 survives the Closing or any
agreement entered into by Parent or the Purchaser at Closing, (b) the Assumed
Liabilities, (c) the conduct of the Business and the use of the Purchased Assets
after Closing, and (d) the successful enforcement of Parent's and the
Purchaser's indemnification obligations under this Agreement.
Section 7.4. Limits on Indemnification. The indemnification obligations
of the Parties will be limited as follows:
(a) Sellers will not be liable to Parent or Purchaser for Claims until
the aggregate amount of Claims exceeds Five Hundred Thousand Dollars
($500,000) (the "Basket Amount"). Upon reaching the Basket Amount Sellers
will be liable to Parent and the Purchaser for all Claims in excess of the
Basket Amount up to an aggregate amount of Eight Million Dollars
($8,000,000) (the "Maximum Amount"). Under no circumstances will the
aggregate amount of Sellers' indemnification obligations exceed the Maximum
Amount. Notwithstanding the foregoing, nothing in this Section 7.4(a) will
limit Seller's obligations under Section 4.1(d) or with respect to any
post-Closing covenants and agreements of Sellers, including the
indemnification covenants set forth in this Article VII, or with respect to
any claims for intentional fraud.
(b) Any amounts recoverable by an Indemnitee will be net of any tax
benefits, insurance proceeds or other recoveries or reimbursements obtained
by the Indemnitee. To the extent the tax benefits, insurance proceeds or
other recoveries or reimbursements are incurred or received after any
recovery pursuant to this Article VII, there will be a corresponding
adjustment among the Parties without regard to the time limitations imposed
under this Article VII. The Parties agree that all indemnification payments
will be treated for tax purposes as an adjustment to the Purchase Price.
-26-
Section 7.5. Third Party Claims. If any action, suit, investigation or
proceeding (including negotiations with federal, state, local or foreign tax
authorities) (the "Action") is threatened or commenced by a third party in
respect of which a Party or other person described in Section 7.2 and Section
7.3 (an "Indemnitee") may make a Claim under this Agreement, the Indemnitee will
notify the Party obligated to indemnify that Party (the "Indemnitor") to that
effect with reasonable promptness (so as to not prejudice the Indemnitor's
rights) after the commencement or threatened commencement of the Action, and the
Indemnitor will have the opportunity to defend against the Action (or, if the
Action involves to a significant extent matters beyond the scope of the
indemnity agreement contained in this Article VII, those claims that are covered
hereby) subject to the limitations set forth below. If the Indemnitor elects to
defend against any Action (or, as described in the preceding parenthetical, one
or more claims relating thereto), the Indemnitor will notify the Indemnitee to
that effect with reasonable promptness. In that case, the Indemnitee will have
the right to employ its own counsel and participate in the defense of the
Action, but the fees and expenses of such counsel will be at the expense of the
Indemnitee unless the employment of such counsel at the expense of the
Indemnitor is authorized in writing by the Indemnitor. Any Party granted the
right to direct the defense of a threatened or actual Action under this Section
7.5 will: (a) keep the other Parties fully informed of material developments in
the Action at all stages of the Action; (b) promptly submit to the other Parties
copies of all pleadings, responsive pleadings, motions and other similar legal
documents and papers received in connection with the Action; (c) permit the
other Parties and their counsel, to the extent practicable, to confer on the
conduct of the defense of the Action; and (d) to the extent practicable, permit
the other Parties and their counsel an opportunity to review all legal papers to
be submitted prior to their submission. The Parties will make available to each
other and each other's counsel and accountants all of their books and records
relating to the Action, and each Party will render to the other Parties any
assistance that may be reasonably required in order to insure the proper and
adequate defense of the Action. The Parties will use their respective good
faith efforts to avoid the waiver of any privilege of any Party. The assumption
of the defense of any matter by an Indemnitor will not constitute an admission
of responsibility to indemnify or in any manner impair or restrict that party's
rights to later seek to be reimbursed its costs and expenses if indemnification
with respect to the matter was not required. An Indemnitor may elect to assume
the defense of a matter at any time during the pendency of the matter, even if
initially the Party did not elect to assume the defense, so long as the
assumption at the later time would not prejudice the rights of the Indemnitee.
No settlement of a matter by the Indemnitee will be binding on an Indemnitor for
purposes of the Indemnitor's indemnification obligations. No settlement of a
matter by the Indemnitor will be binding on an Indemnitee without the prior
written consent of the Indemnitee (which consent will not be unreasonably
withheld) unless the settlement involves only the payment of money that
Indemnitor pays simultaneously with such settlement. Notwithstanding the
foregoing, with respect to any Action for which a claim has been or may be made
under any insurance policy, the Parties will comply with any procedures in such
policy for filing, maintaining or prosecuting such claim, and to the extent the
procedures in such policy are inconsistent with this Section 7.5, the procedures
in such policy will control.
-27-
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Modification and Waiver. At any time before the Closing,
subject to applicable law, this Agreement may be amended, modified or
supplemented only by the written agreement (referring specifically to this
Agreement) of the Parties. At any time before the Closing, Parent and the
Purchaser, on the one hand, and Sellers, on the other hand, may (a) extend the
time for the performance of any of the obligations or other acts of the other,
(b) waive any inaccuracies in the representations and warranties of the other
contained in this Agreement or in any documents delivered pursuant to this
Agreement and (c) waive compliance by the other with any of the agreements or
conditions contained in this Agreement that may legally be waived. Any
extension or waiver will be valid only if set forth in an instrument in writing
specifically referring to this Agreement and signed on behalf of the extending
or waiving Party.
Section 8.2. Notices. All notices and other communications under this
Agreement will be in writing and will be delivered personally or by next-day
courier or telecopied with confirmation of receipt, to the Parties at the
addresses specified below (or at any other address for a Party that will be
specified by like notice; provided that any notice of a change of address will
be effective only upon actual receipt of the notice). Any notice will be
effective upon receipt, if personally delivered or telecopied, or one day after
delivery to a courier for next day delivery.
(a) if to any Seller:
Xxxxx Industrial Corporation
Xxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
Attention: General Counsel
with a copy to:
Xxxxx X. Xxxxxx, Esq.
Warner, Norcross & Xxxx LLP
000 Xxx Xxxx Xxxxxxxx
000 Xxxx Xxxxxx, XX
Xxxxx Xxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
(b) if to Parent or the Purchaser:
-00-
Xxxxxxx Xxxxxxxxxxx
Three Xxxxxxxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
with a copy to:
Xxxxxxx X. Xxxxxxxx, Esq.
Xxxxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
(000) 000-0000
Section 8.3. Assignment. This Agreement and all of the provisions of
this Agreement will be binding upon and inure to the benefit of the Parties and
their respective successors and permitted assigns. In addition, this Agreement
will inure to the benefit of and be enforceable by any person or entity
acquiring beneficial ownership of 50% or more of Xxxxx'x outstanding capital
stock, whether by tender offer, merger or otherwise, and such person's or
entity's successors or assigns; provided that such person or entity assumes and
agrees to perform the obligations of Xxxxx under Article VII. Neither this
Agreement nor any of the rights, interests or obligations under this Agreement
will be assigned by any of the Parties without the prior written consent of the
other Parties. No assignment will relieve any Party of its obligations under
this Agreement. Except for the individuals identified in Article VII as
entitled to indemnification under the terms of that Article, this Agreement is
not intended to confer any rights or remedies upon any other person or entity
except the Parties.
Section 8.4. Governing Law. This Agreement will be governed by the laws
of the State of Michigan as to all matters, including matters of validity,
construction, effect, performance and remedies, without regard to conflict of
law principles.
Section 8.5. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
Section 8.6. Interpretation. The Article and Section headings contained
in this Agreement are solely for convenience of reference, are not part of the
agreement of the Parties and will not in any way affect the meaning or
interpretation of this Agreement. As used in this Agreement, the term"including"
and words of similar import will mean "including, without limitation," unless
the context otherwise requires or unless otherwise specified, the term "to the
knowledge of Sellers" (or words of similar import) will mean to the knowledge of
any executive officer of any Seller, and the term "Litigation Claim" means any
pending or threatened suit, action, proceeding or investigation, whether as a
plaintiff or as a defendant, and whether existing on or after the date of this
Agreement.
-29-
Section 8.7. Entire Agreement. This Agreement, the Disclosure Letter and
the Confidentiality Agreement (collectively, the "Transaction Documents")
embody the entire agreement and understanding of the Parties in respect of the
subject matter contained in the Transaction Documents and supersede all prior
agreements and understandings among the Parties with respect to that subject
matter. There are no representations, promises, warranties, covenants or
undertakings in respect of that subject matter, other than those expressly set
forth or referred to in the Transaction Documents.
Section 8.8. Severability. The invalidity or unenforceability of any
particular provision of this Agreement will be construed in all respects as if
the invalid or unenforceable provision were omitted. All provisions of this
Agreement will be enforced to the fullest extent permitted by law.
* * * * * * *
-30-
The Parties have caused this Agreement to be signed by their respective
duly authorized officers as of the date first written above.
XXXXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-----------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Chairman and Chief
Executive Officer
"Parent"
TRANSPRO GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-----------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Chairman and Chief
Executive Officer
"Purchaser"
XXXXX INDUSTRIAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman & CEO
"Xxxxx"
XXXXX INTERNATIONAL DISTRIBUTION
COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
"Subsidiary"
AUSTIN TRAILER EQUIPMENT COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
"Subsidiary"
WESTRAN CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
"Subsidiary"
-31-
ANNEX A
SUBSIDIARIES
------------
Xxxxx International Distribution Company, a Michigan corporation
Austin Trailer Equipment Company, a Michigan corporation
Westran Corporation, a Michigan corporation
-32-
ANNEX B
FOREIGN SUBSIDIARIES
------- ------------
Xxxxx Europe Ltd., a United Kingdom corporation
Xxxxx/Asia Ltd., a Korean corporation
Dynair, Ltd., a United Kingdom corporation
Xxxxx Industries, S.A., a Belgium corporation
Xxxxx Do Brasil LTDA, a Brazilian corporation
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EXHIBIT 1.1(d)
OWNED REAL PROPERTY
----- ---- --------
1. Plant, warehouse and office located in Xxxxx, Illinois
2. Plant and office located in Scottsburg, Indiana
3. The following Michigan properties:
(a) Cadillac: Plant, warehouse and office
(b) Spring Lake: Plant and office
(c) Rothbury: Plant, warehouse and office
(d) Xxxxxx: Plant and office
(e) White Pigeon: Plant and office
4. Plant and office in Charlotte, North Carolina
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EXHIBIT 1.1(e)
REAL PROPERTY LEASES
---- -------- ------
Leases respecting the following facilities:
(a) Plant and office located in Hengoed, South Wales
(b) Plant and office located in Nailsworth, England
(c) Plant and office located in Changwon, South Korea
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EXHIBIT 1.1(m)
EXCLUDED ASSETS
-------- ------
The Purchased Assets do not include the following assets of Sellers:
(a) except for that which exists within the Foreign Subsidiaries, any cash,
investments and other cash equivalents, (b) inter-company accounts (except with
respect to the Foreign Subsidiaries, which will be settled within three business
days after Closing), (c) the corporate charter, corporate records, seals, stock
transfer books, blank stock certificates, minute books and other documents
relating to the organization, maintenance and existence of each Seller as a
corporation, (d) all qualifications to transact business as a foreign
corporation, arrangements with registered agents relating to foreign
qualifications, taxpayer and other identification numbers, (e) any assets of
Sellers relating to their respective operations exclusive of the Business, (f)
the equity interest of any Seller in the cogeneration facility located in
Cadillac, Michigan, or any proceeds from the sale thereof, (g) the name "Xxxxx"
and any derivatives of that name, and (h) the following amounts received or to
be received in connection with the settlement of insurance claims with respect
to environmental matters: (i) approximately $500,000 received from Wausau in
1996 (global settlement), (ii) approximately $1,350,000 received from Royal
Globe Insurance in January, 1997 (global settlement), and (iii) amounts to be
received from Firemen's Fund (global settlement except with respect to Cadillac,
MI superfund site (settlement for past costs only)).
-36-
EXHIBIT 1.1(n)
PERMITTED LIENS
--------- -----
"Permitted Liens" means (a) Liens for water, sewage and similar
charges and current taxes and assessments not yet due and payable or being
contested in good faith, (b) mechanics', carriers', workers', repairers',
materialmen's, warehousemen's and other similar Liens arising or incurred in the
ordinary course of business, (c) Liens arising or resulting from any action
taken by Parent or the Purchaser, (d) easements, rights of way, restrictions and
other similar Liens that do not materially interfere with the ordinary conduct
of the operations of any Division or any Subsidiary, (e) any Liens set forth in
any leases, agreements or other documents included in the Purchased Assets that
evidence the applicable Seller's rights in or to title to a particular Purchased
Asset, (f) any Liens associated with the Assumed Liabilities, (g) minor
imperfections or defects in title which do not effect the value or use of the
Purchased Assets and (h) any other Liens to which Parent or the Purchaser
consents in writing.
-37-
EXHIBIT 1.2(b)
EXCLUDED LIABILITIES
-------- -----------
The following liabilities are Excluded Liabilities: (a) except as
provided in Section 1.2(b), any severance or benefit obligations respecting
central staff (headquarters) employees of Xxxxx, (b) liabilities arising under
the Termination Agreement between Xxxxx and Xxxxxxx Xxxxxxxx, (c) liabilities
associated with Xxxxx'x equity interest in the cogeneration facility located in
Cadillac, Michigan, (d) Sellers' expenses associated with the transactions
contemplated by this Agreement to the extent not specifically allocated to
Parent or the Purchaser, (e) Sellers' post-Closing contractual obligations under
this Agreement, and (f) inter-company accounts (except with respect to the
Foreign Subsidiaries, which will be settled within three business days after
Closing).
-38-
EXHIBIT 4.21
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RESTRICTIVE COVENANTS
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Section 1. From and after the Closing, each Seller and each of their
respective subsidiaries (each, a "Restricted Party" and, collectively, the
"Restricted Parties") shall not, except on behalf of the Purchaser, either
directly or indirectly, on its own account, or as an independent contractor,
consultant, agent, partner, joint venture or owner of any other person, firm,
partnership, corporation or other entity, or in any other capacity, in any way:
(a) Throughout the period of five (5) years from and after the date
of this Agreement (the "Term") within the United States of America,
including its possessions and territories, or within any foreign country or
foreign jurisdiction in which TPG operates or sells any of its products,
conduct, engage in or aid or assist anyone in the conduct of a business (or
any portion thereof) which is substantially similar or directly competitive
with the Business (or any portion thereof), as currently conducted or as
currently planned to be conducted during the Term; or
(b) Throughout the Term solicit, divert, take away or accept orders
from, or attempt to solicit, divert, take away or accept orders from, any
person, firm, partnership, corporation or other entity, wherever located,
for whom any member of TPG performed any services or to whom any member of
TPG sold any product within the eighteen (18) month period immediately
preceding the date of this Agreement with respect to any product or service
which is the same or substantially similar (in either function or use) to
the products or services sold or provided during said eighteen (18) month
period by any member of TPG in respect of the Business; or
(c) Throughout the three (3) year period after the date of this
Agreement, solicit for employment any person who was employed by or engaged
by any Restricted Party with respect to the Business within the twelve (12)
month period immediately preceding the date of this Agreement (other than
in the course of a general hiring solicitation program which is not
specifically targeted, in whole or in part, to employees of the Business or
Purchaser); or
(d) Use for itself or for any other person, firm, corporation,
partnership, association or other entity, or divulge or disclose in any
manner to any person, firm, corporation, partnership, association or other
entity, the methods of operation, financial data, sources of supply, know-
how, pricing information, records, books, agreements, techniques,
procedures, systems or other trade secrets or confidential or proprietary
information included with the Purchased Assets (hereinafter referred to as
the "Confidential Information"). Notwithstanding anything to the contrary
contained in this Exhibit 4.21, the restrictions on disclosure and use of
the Confidential Information shall not apply to (i) information or
techniques which are or become available to the public other than through
disclosure (whether deliberate or inadvertent) by any Restricted Party
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in violation of this Section 1 (d); (ii) disclosure of Confidential
Information in judicial or administrative proceedings or other
requirements of the law to the extent any Restricted Party is legally
compelled to disclose such information in the opinion of such Restricted
Party's counsel, provided that such Restricted Party shall have used its
reasonable efforts to obtain an appropriate protective order or other
assurance of confidential treatment for the information required to be so
disclosed; (iii) such Confidential Information becomes available to a
Restricted Party from a third party who is under no confidential or
fiduciary obligation to Purchaser with respect to such Confidential
Information or (iv) the disclosure of Confidential information in
connection with submitting proof or evidence in any legal or
administrative proceeding to enforce any rights or remedies of Sellers
under this Agreement or any of the documents contemplated hereby.
Notwithstanding the foregoing, nothing set forth in this Exhibit 4.21 shall
prohibit a Restricted Party from: (i) owning for investment purposes not in
excess of 5% in the aggregate of any class of capital stock of any corporation
if such capital stock is publicly traded and listed on any national or regional
stock exchange or quoted on the Nasdaq National Market; and (ii) purchasing, and
following such purchase, actively engaging in, any business that has a
subsidiary, division, group, franchise or segment that is engaged in any
activity that, without taking into account this sentence, cannot be engaged in
by a Restricted Party under this Exhibit 4.21, so long as (x) on the date of
such purchase not more than 15% of the consolidated revenues of such business
are derived from such activity and (y) such business divests itself of such
subsidiary, division, group, franchise or segment as soon as practicable after
the date of such purchase (but in any event within one year after the date of
such purchase).
Section 2. Each Restricted Party hereby agrees that the periods of
time, geographical scope and other limitations provided for in Section 1 above
are the minimum such terms necessary to protect the Purchaser and each of its
affiliates, successors and assigns in the use and employment of the goodwill
respecting the Business. Each Restricted Party further agrees that damages
cannot adequately compensate Purchaser in the event of its breach of any of the
covenants contained in Section 1 above. Accordingly, each Restricted Party
agrees that in the event of a breach of any of such covenants, Purchaser shall
be entitled to obtain injunctive relief against such Restricted Party, without
bond but upon due notice, in addition to such other relief as may appertain at
law or in equity. Obtainment of any such injunction by Purchaser shall not be
deemed an election of remedies or a waiver of any right to assert any other
remedies Purchaser may have at law or in equity. The existence of any claim or
cause of action of any Restricted Party against Purchaser, of whatever nature,
shall not constitute a defense of Purchaser's enforcement of the covenants
contained in Section 1 above. To the extent any of the covenants contained in
Section 1 above are deemed unenforceable by virtue of their scope, in terms of
geographical area or length of time or otherwise, but may be made enforceable by
limitations thereon, each Restricted Party agrees that the same shall be
enforceable to the fullest extent permissable under the laws and public policies
of the jurisdiction in which enforcement is sought. The parties hereto hereby
authorize any court of competent jurisdiction to modify or reduce the scope of
the covenants contained in Section 1 above to the extent necessary to make such
covenants enforceable.
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