ASSET PURCHASE AGREEMENT
BY AND AMONG
HON INDUSTRIES INC.,
AHC INC.,
XXXX MANUFACTURING CO.
AND
XXXXX CUSTOM FURNITURE, INC.
DATED AS OF OCTOBER 6, 1997
TABLE OF CONTENTS
ARTICLE 1 - PURCHASE AND SALE.......................................................................... 1
1.1 Purchased Assets..................................................................... 1
1.2 Excluded Assets...................................................................... 3
1.3 Purchase Price....................................................................... 4
1.4 Purchase Price Adjustment............................................................ 4
1.5 Assumption of Liabilities............................................................ 6
1.6 Excluded Liabilities................................................................. 6
1.7 Assignability and Consents........................................................... 8
ARTICLE 2 - CLOSING.................................................................................... 8
2.1 Closing.............................................................................. 8
2.2 Deliveries at Closing................................................................ 9
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF THE SELLERS.............................................. 11
3.1 Corporate Existence.................................................................. 11
3.2 Corporate Power and Authorization.................................................... 11
3.3 No Conflict.......................................................................... 12
3.4 Financial Statements................................................................. 12
3.5 Books of Account..................................................................... 12
3.6 Sufficiency of the Assets............................................................ 12
3.7 Title to Assets...................................................................... 13
3.8 Condition of Assets.................................................................. 13
3.9 Compliance with Law.................................................................. 13
3.10 Litigation........................................................................... 13
3.11 Employee Benefit Plans and Arrangements.............................................. 13
3.12 Labor Matters........................................................................ 14
3.13 Contracts............................................................................ 14
3.14 Intellectual Property................................................................ 15
3.15 Taxes................................................................................ 16
3.16 Material Adverse Change.............................................................. 17
3.17 Brokers.............................................................................. 17
3.18 Affiliate Agreements................................................................. 17
3.19 Availability of Documents............................................................ 17
3.20 Liabilities.......................................................................... 17
3.21 Environmental and Safety Compliance.................................................. 17
3.22 Product Warranties................................................................... 19
3.23 No Other Warranties.................................................................. 19
3.24 Insurance............................................................................ 19
3.25 Intentionally Omitted................................................................ 19
3.26 Sellers' Knowledge................................................................... 20
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS........................................... 20
4.1 Corporate Existence.................................................................. 20
4.2 Corporate Power and Authorization.................................................... 20
4.3 No Conflict.......................................................................... 20
4.4 Financial Condition.................................................................. 21
4.5 Litigation........................................................................... 21
4.6 Brokers.............................................................................. 21
4.7 Investigation and Evaluation......................................................... 21
4.8 Forecasts and Projections............................................................ 21
ARTICLE 5 - AGREEMENTS PENDING CLOSING................................................................. 22
5.1 Agreements of the Sellers Pending the Closing........................................ 22
5.2 Agreements of the Purchasers Pending the Closing..................................... 23
5.3 Supplemental Disclosure.............................................................. 23
5.4 Access............................................................................... 24
5.5 Press Releases....................................................................... 24
5.6 Tax Returns.......................................................................... 24
ARTICLE 6 - CONDITIONS PRECEDENT TO THE CLOSING........................................................ 24
6.1 Conditions Precedent to the Purchasers' Obligations.................................. 24
6.2 Conditions Precedent to the Sellers' Obligations..................................... 25
ARTICLE 7 - POST CLOSING MATTERS....................................................................... 26
7.1 Employee Arrangements................................................................ 26
7.2 Maintenance of Books and Records..................................................... 30
7.3 Mutual Assistance Regarding Taxes.................................................... 30
7.4 Payments Received.................................................................... 31
7.5 Non-Competition...................................................................... 31
7.6 Name Change Filings.................................................................. 32
7.7 Defective Products................................................................... 32
ARTICLE 8 - INDEMNIFICATION............................................................................ 33
8.1 Indemnification by the Sellers....................................................... 33
8.2 Indemnification by the Purchasers.................................................... 34
8.3 Procedure For Indemnification - Third Party Claims................................... 34
8.4 Procedure for Indemnification -- Investigation
or Remediation of Xxxxxxxx Property............................................... 35
8.5 Procedure for Indemnification - Other Claims......................................... 36
8.6 Limitations on Sellers' Indemnification.............................................. 36
8.7 Limitations on Purchasers' Indemnification........................................... 37
8.8 Effect of Tax Recovery............................................................... 37
8.9 Exclusive Remedy..................................................................... 37
8.10 Adjustment to the Purchase Price..................................................... 37
ARTICLE 9 - MISCELLANEOUS.............................................................................. 37
9.1 Termination.......................................................................... 37
9.2 Survival............................................................................. 38
9.3 Compliance with Bulk Sales Laws...................................................... 38
9.4 Expenses............................................................................. 38
9.5 Waivers.............................................................................. 38
9.6 Assignment; Binding Effect; Benefits................................................. 39
9.7 Guarantees........................................................................... 39
9.8 Confidentiality...................................................................... 39
9.9 Entire Agreement..................................................................... 39
9.10 Notices.............................................................................. 40
9.11 Governing Law........................................................................ 41
9.12 Headings, Gender and "Person"........................................................ 41
9.13 Severability......................................................................... 41
9.14 Counterparts......................................................................... 41
LIST OF SCHEDULES
Schedule 1.1(c) - Machinery, Equipment, Vehicles and Furniture
Schedule 1.1(d) - Real Estate
Schedule 1.1(h) - Patents, Trademarks, Tradenames and Copyrights
Schedule 1.2(k) - Excluded Assets
Schedule 1.3(b) - Allocation of Purchase Price
Schedule 2.2(c) - Transition Services Agreement
Schedule 3.9 - Permits
Schedule 3.11 - Employee Benefits
Schedule 3.13(a) - Contracts
Schedule 3.26 - Sellers' Knowledge
Schedule 6.1(c) - Seller Required Consents
Schedule 6.1(d) - Purchaser Required Consents and Permits
Schedule 7.1(a) - Xxxxx Employees
Schedule 7.1(b) - Purchaser Employee Benefits
Schedule 7.1(c) - Sellers' Severance Policy
Schedule 7.1(g) - Terminated Xxxxx Employees
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is entered into as of October 6, 1997,
by and among HON INDUSTRIES INC., an Iowa corporation ("HON"), AHC INC., an
Alabama corporation and a wholly-owned subsidiary of HON ("Acquisition Sub,"
and together with HON, the "Purchasers"), XXXX MANUFACTURING CO., a
Pennsylvania corporation ("Xxxx"), and XXXXX CUSTOM FURNITURE, INC., an
Alabama corporation and an indirect wholly-owned subsidiary of Xxxx ("Xxxxx,"
and together with Xxxx, the "Sellers").
BACKGROUND
This Agreement sets forth the terms and conditions upon which
Acquisition Sub is purchasing substantially all of the assets used by Xxxxx in
the conduct of its office furniture business (the "Business") in exchange for
the payment by Acquisition Sub of the Purchase Price hereinafter described and
the assumption by Acquisition Sub of certain specified liabilities of Xxxxx.
NOW, THEREFORE, in consideration of the respective covenants,
representations, warranties and agreements herein contained, the parties
hereto, intending to be legally bound, hereby agree as follows:
ARTICLE 1 - PURCHASE AND SALE
1.1 Purchased Assets. Subject to the terms and conditions set forth
in this Agreement, at the Closing (as defined herein), Xxxxx shall sell,
convey, assign and transfer to Acquisition Sub, and Acquisition Sub shall
purchase from Xxxxx, all right, title and interest of Xxxxx in and to the
Business as a going concern and all assets, properties and rights (except as
otherwise expressly provided in Section 1.2) of Xxxxx, which shall include,
without limitation, the following (collectively, the "Assets"):
(a) all prepaid expenses, advance payments, deposits, surety
accounts and other similar assets, including, without limitation, prepaid
deposits with suppliers and utilities;
(b) all raw material, work-in-process and finished goods
inventory of products, supplies and parts;
(c) all tangible personal property, including the machinery,
equipment, vehicles and furniture set forth on Schedule 1.1(c) and the
supplies and spare parts related thereto, subject to any changes in such items
as shall occur in the ordinary course of business between the date hereof and
the Closing;
(d) the real property located at 0000 Xxxxxx Xxxx #000,
Xxxxxxxx, Xxxxxxx which is more particularly described on Schedule 1.1(d) (the
"Florence Property") and (i) all buildings, structures and leasehold
improvements located thereon and all appurtenances relating thereto, and (ii)
all fixtures, machinery, apparatus and equipment affixed thereto;
(e) all accounts receivable and, subject to Sections 1.4(e)
and 7.4 hereof, any payments received with respect thereto after the Closing
Date (as defined herein), unpaid interest accrued on any such accounts
receivable and any security or collateral relating thereto (except for
receivables due from Xxxx or any affiliate of Xxxx) (the "Accounts
Receivable");
(f) all contracts, agreements, commitments, licenses,
leases, undertakings, arrangements and other legally binding contractual
rights or obligations to which Xxxxx is a party or by which Xxxxx or any of
the Assets are bound (collectively, the "Contracts");
(g) all existing records, books, ledgers, files, documents,
correspondence, advertising, promotional and marketing materials, studies and
reports (collectively, "Records") related primarily to the Business, provided,
however, that all Records located at the Xxxxxxxx Property shall be
conclusively presumed to be related primarily to the Business; and provided,
further, that the Sellers shall be entitled to retain a copy of all such
Records that do not relate exclusively to the Business;
(h) all patents, trademarks, tradenames and copyrights owned
by Xxxx Holdings, Inc. that are used in the Business, including all patents,
trademarks, tradenames and copyrights set forth on Schedule 1.1(h)
(collectively, the "Intellectual Property");
(i) all inventions, discoveries, software, shop rights,
licenses, developments, research data, designs, technology, trade secrets,
test procedures, processes, research data, formulas and other confidential
information used primarily in the Business; provided that, to the extent such
items have also within the one-year period ending on the Closing Date been
used by the Sellers other than in the Business, the Sellers shall retain an
interest in, and be permitted to use, such items, subject only to the
limitations of Section 7.5 hereof;
(j) all rights, claims and benefits of Xxxxx in, to or under
any (i)(A) employee confidentiality agreements entered into by Xxxxx and (B)
confidentiality or secrecy agreements entered into by Xxxxx with third parties
that relate to the use or disclosure of information, and (ii) express or
implied warranties from the suppliers of goods or services (including any
coverage rights under product liability or other insurance maintained by any
of such suppliers for the benefit of Xxxxx);
(k) all unfilled purchase and sale orders;
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(l) all licenses, permits, approvals, variances, waivers or
consents issued by any foreign, United States, state or local governmental
entity or subdivision thereof or any authority, department, commission, board,
bureau, agency, court or instrumentality (collectively, "Governmental
Authorities") used in or necessary to the operation of the Business
(collectively, the "Permits"), to the extent transferable;
(m) the goodwill of the Business as a going concern; and
(n) all other assets, properties and rights of Xxxxx, of
every kind, nature and description, whether tangible or intangible, real,
personal or mixed, and wherever situated, including, without limitation, those
assets, properties and rights set forth on the Financial Statements (as
defined herein).
1.2 Excluded Assets. Expressly excluded from the assets, properties
and rights being sold by Xxxxx to Acquisition Sub pursuant to Section 1.1
hereof are the following (collectively, the "Excluded Assets"):
(a) all cash, investment securities, bank accounts and safe
deposit boxes;
(b) all accounts receivable due from Xxxx or any affiliate
of Xxxx and all unpaid interest accrued on any such accounts receivable and
any security or collateral relating thereto;
(c) all claims for Tax refunds to the extent such refunds
relate to periods ending on or prior to the Closing;
(d) all computer hardware and software located at Xxxx'x
offices in Philadelphia, Pennsylvania that may be used from time to time by
Xxxxx;
(e) all corporate seals, articles of incorporation, minute
books, stock books, Tax Returns (as defined herein) and other records having
to do with the corporate organization and capitalization of Xxxxx and any
predecessor organization;
(f) all assets and rights with respect to the defined
benefit pension plan and savings plan sponsored by Xxxx which cover the
employees of Xxxxx;
(g) all existing Records not related primarily to the
Business and, to the extent provided in Section 1.1(g) hereof, copies of all
other existing Records related primarily to the Business that do not relate
exclusively to the Business;
(h) all inventions, discoveries, software, shop rights,
licenses, developments, research data, designs, technology, trade secrets,
test procedures, processes, research data, formulas and other confidential
information not used primarily in the Business and, to the extent provided in
Section 1.1(i) hereof, an interest in and the right to use all
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such items that are used primarily in the Business and that have been used by
the Sellers within one year prior to the Closing Date other than in the
Business;
(i) all rights that accrue or will accrue to the Sellers
under this Agreement;
(j) all Permits that are not transferable; and
(k) all assets, properties and rights, if any, listed on
Schedule 1.2(k).
1.3 Purchase Price.
(a) Subject to any adjustment pursuant to Section 1.4
hereof, the purchase price for the Assets (the "Purchase Price") shall be
$46,000,000 (the "Closing Payment") plus the assumption by Acquisition Sub of
the Assumed Liabilities (as defined herein).
(b) The Purchase Price shall be allocated among the Assets
acquired hereunder as described on Schedule 1.3(b) hereto. Any adjustment to
the Purchase Price made pursuant to Section 1.4 and any indemnification
payment treated as an adjustment to the Purchase Price pursuant to Section
8.10 shall be reflected as an adjustment to the amount set forth on Schedule
1.3(b) that is allocated to the specific asset, if any, giving rise to the
adjustment, and if any such adjustment does not relate to a specific asset,
such adjustment shall be allocated among the Assets acquired hereunder in
accordance with Section 1060 of the Internal Revenue Code of 1986, as amended
(the "Code") and the regulations thereunder. The Purchasers and the Sellers
shall each prepare and file their respective Tax Returns, including, without
limitation, Asset Acquisition Statements on IRS Form 8594, employing the
allocation made pursuant to this Section 1.3(b) and shall not take a position
in any Tax proceeding or audit or otherwise that is inconsistent with such
allocation; provided, however, that nothing contained herein shall require the
Purchasers or the Sellers to contest beyond, or otherwise than by, the
exhaustion of its administrative remedies before any taxing authority or
agency, and the Purchasers and the Sellers shall not be required to litigate
before any court, including, without limitation, the United States Tax Court,
any proposed deficiency or adjustment by any taxing authority or agency which
challenges such allocation. The Purchasers, on the one hand, and the Sellers,
on the other hand, shall give prompt notice to the other of the commencement
of any Tax audit or the assertion of any proposed deficiency or adjustment by
any taxing authority or agency that challenges such allocation.
1.4 Purchase Price Adjustment.
(a) Promptly following the Closing, the Purchasers and the
Sellers shall use their best efforts to enable the Sellers to prepare or cause
to be prepared in accordance with Xxxxx' past accounting practices and
generally accepted accounting principles ("GAAP") consistently applied, a
consolidated statement of the Assets and Assumed Liabilities (except for the
Assumed Liabilities set forth in Section 1.5(c), (d) and (f)) as of the
opening of business on the Closing Date (as defined herein), which shall set
forth those assets and
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liabilities of Xxxxx transferred to or assumed by Acquisition Sub at the
Closing. Such statement of Assets and Assumed Liabilities prepared and finally
determined as provided in this Section 1.4 is referred to herein as the
"Closing Statement." Within 30 days following the Closing Date, the Sellers
shall deliver to the Purchasers a final draft of the Closing Statement,
together with the Sellers' calculation of Net Worth (as defined herein) as of
the opening of business on the Closing Date. For purposes of this Section 1.4,
"Net Worth" shall equal the book value of the Assets minus the amount of the
Assumed Liabilities, each as set forth on the Closing Statement.
(b) Notwithstanding the provisions of Section 1.4(a) hereof,
(i) the reserves included in the Closing Statement for excess and obsolete
inventory, warranty obligations and rebate obligations shall not exceed the
respective amounts of such reserves on Xxxxx' books as of July 27, 1997, and
(ii) all tooling and production equipment not used in production during the
six-month period ending on the Closing Date or designated for new products
shall be valued at zero on the Closing Statement.
(c) Following the delivery of the Closing Statement to the
Purchasers, the Purchasers shall have 60 days to review the Closing Statement
and provide notice to the Sellers of any errors or objections. If the
Purchasers do not raise any objections to the Closing Statement within such
60-day period, the Closing Statement shall be final, binding and conclusive on
the parties hereto and shall control the calculation of Net Worth. If the
Purchasers do raise an objection to the Closing Statement, the Purchasers and
the Sellers promptly shall negotiate in good faith to resolve the disputed
matter. If the Purchasers and the Sellers fail to resolve such disputed matter
within ten business days after receipt by the Sellers of notice of such
objection, then any such disputed matter may, at the election of the
Purchasers or the Sellers, be submitted to and resolved by Ernst & Young LLP.
The fees and expenses of such accounting firm incurred in resolving the
disputed matter shall be equitably apportioned by such accounting firm based
upon the extent to which the Purchasers, on the one hand, or the Sellers, on
the other hand, are determined by such accounting firm to be the prevailing
party. The Closing Statement and calculation of Net Worth shall, after
resolution of any disputes pursuant to this Section 1.4, be final, binding and
conclusive on all parties hereto.
(d) If the Net Worth as of the Closing Date as conclusively
determined pursuant to paragraph (c) above (such conclusive determination is
referred to herein as "Certified Net Worth"), is less than $19.183 million,
the Sellers shall pay the amount of such deficiency to the Purchasers. If the
Certified Net Worth is greater than $19.583 million, the Purchasers shall pay
the amount of such excess to the Sellers. Any payment pursuant to this Section
shall be made within five business days following receipt by the parties of
the Certified Net Worth calculation.
(e) All Accounts Receivable outstanding as of the Closing
Date which are not collected by Acquisition Sub within 120 days of the Closing
Date shall be transferred by Acquisition Sub to Xxxx upon Xxxx'x payment to
Acquisition Sub of an amount equal to the
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amount by which such uncollected Accounts Receivable exceed the recorded
allowances for doubtful accounts on the Closing Statement. For purposes of
this Section 1.4(e), (i) all undesignated payments made in satisfaction of an
Account Receivable by a particular person or entity shall be credited first
against the oldest Account Receivable owed by such person or entity, and (ii)
all Accounts Receivable settled by the Purchasers without the consent of Xxxx
for less than the full amount owed shall be deemed to have been paid in full.
Xxxx'x obligations under this Section 1.4(e) shall terminate with respect to
any uncollected Account Receivable which is not transferred to Xxxx within 165
days following the Closing.
(f) Payments made pursuant to this Section 1.4 shall be made
by certified check or wire transfer of same day funds to an account designated
by the party receiving such payment.
1.5 Assumption of Liabilities. At the Closing, Acquisition Sub shall
assume and agree to pay, discharge or perform, as appropriate, the following
and only the following liabilities and obligations of Xxxxx (collectively, the
"Assumed Liabilities"):
(a) all accounts payable existing as of the Closing Date
(except for payables owed to Xxxx or any affiliate of Xxxx) to the extent
reflected on the Closing Statement;
(b) all accrued salaries and wages with respect to employees
of Xxxxx existing as of the Closing Date to the extent reflected on the
Closing Statement and all other liabilities and obligations with respect to
such employees to the extent expressly provided in Section 7.1 hereof;
(c) all liabilities and obligations of Xxxxx arising under
the Contracts, including unfilled purchase and sale orders, assigned to
Acquisition Sub pursuant to Section 1.1 hereof, provided, however, that
Acquisition Sub shall not assume or be responsible for any liabilities or
obligations which arise from breaches of such Contracts or defaults thereunder
by Xxxxx prior to the Closing;
(d) all warranty obligations to the extent expressly
provided in Section 7.7 hereof;
(e) all other liabilities and obligations to the extent
accrued on the Closing Statement; and
(f) all other liabilities and obligations incurred by Xxxxx
in the ordinary course of business, but only to the extent such liabilities
and obligations do not exceed $15,000 in the aggregate.
1.6 Excluded Liabilities. Except as expressly provided in Section 1.5
hereof, Acquisition Sub shall not assume or become responsible for any
liability or obligation of
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Xxxxx, whether accrued, absolute or contingent, known or unknown, including,
without limitation, the following:
(a) all liabilities and obligations for Taxes to the extent
not accrued on the Closing Statement;
(b) all liabilities and obligations with respect to the
defined benefit pension plan and savings plan sponsored by Xxxx which cover
the employees of Xxxxx;
(c) all liabilities and obligations to any persons at any
time employed by Xxxxx at any time or to any such person's spouses, children,
other dependents or beneficiaries, with respect to incidents, events,
exposures or circumstances occurring at any time during the period or periods
of any such person's employment by Xxxxx, whenever such claims mature or are
asserted, including, without limitation, all liabilities and obligations
arising (i) under any employee plans (except to the extent provided in Section
7.1 hereof), (ii) under any employment, wage and hour restriction, equal
opportunity, discrimination or immigration and naturalization laws, (iii)
under any collective bargaining laws, agreements or arrangements, or (iv) in
connection with any workers' compensation or any other employee health,
accident, disability or safety claims, including claims for injury, sickness,
disease or death of any person;
(d) all liabilities and obligations of the Sellers or their
respective directors, officers, shareholders or agents, arising out of, or
relating to, this Agreement, or the transactions contemplated hereby, whether
incurred prior to, at, or subsequent to the Closing Date, including, without
limitation, all finder's or broker's fees and expenses, and any and all fees
and expenses of any attorneys, accountants or other professionals retained by
or on behalf of the Sellers;
(e) all liabilities and obligations relating to the
Business, based on events or conditions occurring or existing prior to the
Closing Date and connected with, arising out of or relating to any
Environmental Requirement applicable to the Business (as defined herein);
(f) all liabilities and obligations arising from Xxxxx'
guarantee of any indebtedness of Xxxx;
(g) all liabilities and obligations relating to, based on,
or arising out of, any and all assets, properties and rights which are not
being acquired by Acquisition Sub hereunder, including, without limitation,
the Excluded Assets; and
(h) all other liabilities and obligations relating to the
Assets or the Business not specifically provided for on the Financial
Statements.
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1.7 Assignability and Consents.
(a) Required Consents. Schedule 6.1(c) sets forth a list of
all Assets, except Permits, which are non-assignable or non-transferable or
cannot be subleased to Acquisition Sub without the consent of some other
individual, partnership, corporation, association, joint stock company, trust,
joint venture, limited liability company or Governmental Authority
(collectively, "Person"). The Sellers have commenced and shall continue to
take, or cause to be taken by others, all necessary actions required to obtain
or satisfy, at the earliest practicable date, all consents, novations,
approvals, authorizations, requirements (including filing and registration
requirements), waivers and agreements ("Consents") from any Persons necessary
to authorize, approve or permit the full and complete sale, conveyance,
assignment, sublease or transfer of the Assets listed on Schedule 6.1(c), and
shall continue such efforts as may be required after the Closing Date to
facilitate the full and expeditious transfer of legal title, or the sublease,
as the case may be, of the Assets listed on Schedule 6.1(c).
(b) Nonassignable Items. Anything in this Agreement to the
contrary notwithstanding, this Agreement shall not constitute an Agreement to
sell, convey, assign, sublease or transfer any Assets, if an attempted sale,
conveyance, assignment, sublease or transfer thereof, without the Consent of
another party thereto or a Governmental Authority would constitute a breach
of, or in any way affect the rights of the Sellers or the Purchasers with
respect to such Asset ("Nonassignable Items"). The Sellers shall use their
best efforts and the Purchasers shall cooperate in all reasonable respects
with the Sellers to obtain and satisfy all Consents and to resolve all
impracticalities of sale, conveyance, assignment, sublease or transfer
necessary to convey to Acquisition Sub all Nonassignable Items listed on
Schedule 6.1(c). If any such Consents are not obtained and satisfied or if an
attempted sale, conveyance, assignment, sublease or transfer would be
ineffective, the Sellers shall at the Closing enter into such arrangements
(including related written agreements) as the Purchasers may reasonably
request in order to fairly compensate Acquisition Sub for the loss of, or to
provide to Acquisition Sub the benefit of, any such Nonassignable Items (it
being acknowledged that such arrangement may include obligations imposed on
the Sellers promptly to pay to the Purchasers when received all monies and
other items of value received by the Sellers under any such Nonassignable
Item).
ARTICLE 2 - CLOSING
2.1 Closing. Subject to the conditions contained herein, the closing
(the "Closing") of the sale and purchase of the Assets shall take place at
10:00 A.M., local time, on November 21, 1997, unless regulatory approval of
the Closing shall be the only condition precedent set forth in Article 6
hereof left to be fulfilled on that date (other than the delivery of
certificates or other instruments at the Closing), whereupon the Closing shall
take place on the fifth business day following the receipt of regulatory
approval, at the offices of Drinker Xxxxxx & Xxxxx LLP, Philadelphia National
Bank Building, 0000 Xxxxxxxx Xxxxxx,
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Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, or on such other date or time and/or at such
other place as may be mutually agreed upon in writing by the Purchasers and
the Sellers. The date of the Closing is sometimes herein referred to as the
"Closing Date." The Closing shall be effective as of the opening of business
on the Closing Date.
2.2 Deliveries at Closing. At the Closing, in addition to the other
actions contemplated elsewhere herein:
(a) The Sellers shall deliver to the Purchasers the
following:
(i) a xxxx of sale and assignment, duly
executed by Xxxxx, conveying to Acquisition Sub all of Xxxxx'x right, title
and interest in and to all of the Assets free and clear of any and all liens,
equities, claims, prior assignments, mortgages, charges, security interests,
pledges, conditional sales contracts, collateral security arrangements and
other title retention arrangements, restrictions (including, in the case of
real property, rights of way and other reservations) or encumbrances
whatsoever (collectively, "Liens") except for Permitted Liens (as defined
herein);
(ii) a warranty deed in recordable form under
Alabama law for conveying the Xxxxxxxx Property, free and clear of Liens
except for Permitted Liens;
(iii) certified copies of the resolutions
duly adopted by the Sellers' Boards of Directors authorizing the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby;
(iv) a certificate, dated the Closing Date
and signed by the President or a Senior or Executive Vice President of Xxxx,
the Chief Financial Officer of Xxxx and the President or a Vice President of
Xxxxx, to the effect set forth in Section 6.1(a) hereof;
(v) copies of all consents listed on Schedule
6.1(c) obtained by the Sellers;
(vi) instruments of assignment to Acquisition
Sub of all Intellectual Property (and all applications for, and extensions and
reissuances of, any of the foregoing and rights therein);
(vii) good standing certificates for Xxxxx
from the Alabama Secretary of State and for Xxxx from the Pennsylvania
Secretary of State, dated not more than ten days prior to the Closing Date;
(viii) releases, including, without
limitation, termination statements under the Uniform Commercial Code of any
financing statements filed against any Assets, evidencing discharge, removal
and termination of all Liens, except for Permitted Liens, to which the Assets
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are subject which releases shall be effective at or prior to the Closing;
(ix) an updated Schedule 7.1(a) in accordance
with Section 7.1(a) hereof;
(x) a list of all of the persons or entities
to whom or to which Xxxxx has directly sold any office furniture products at
any time during the twenty-four (24) month period ending on September 30,
1997, including information as to the unit and dollar volume of such sales,
and the type of products so sold;
(xi) such other instruments of sale,
transfer, assignment and conveyance, in form and substance reasonably
satisfactory to counsel for the Purchasers, as are required in order to
transfer to Acquisition Sub title to the Assets;
(xii) certificates signed by an authorized
officer of each of the Sellers under Section 1445(b)(2) of the Code, and the
rules and regulations thereunder, in a form reasonably acceptable to the
Purchasers, setting forth each Seller's respective taxpayer identification
number and stating that such Seller is not a foreign person within the meaning
of Section 1445(f)(3) of the Code; and
(xiii) such other documents or instruments as
the Purchasers reasonably requests to effect the transactions contemplated
hereby.
(b) The Purchasers shall deliver to the Sellers the
following:
(i) a wire transfer in the amount of the
Closing Payment in same day funds pursuant to instructions given by the
Sellers to the Purchasers for that purpose;
(ii) an assumption agreement, duly executed
by Acquisition Sub, in form and substance reasonably satisfactory to the
Sellers, pursuant to which Acquisition Sub will assume all of the Assumed
Liabilities;
(iii) certified copies of the resolutions
duly adopted by the Purchasers' Boards of Directors authorizing the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby;
(iv) a certificate, dated the Closing Date
and signed by the President or a Senior or Executive Vice President of HON,
the Chief Financial Officer of HON and the President or a Vice President of
Acquisition Sub, to the effect set forth in Section 6.2(a) hereof;
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(v) copies of all consents listed on Schedule
6.1(d) obtained by the Purchasers;
(vi) good standing certificates for
Acquisition Sub from the Alabama Secretary of State and for HON from the Iowa
Secretary of State, dated not more than ten days prior to the Closing Date;
and
(vii) such other documents or instruments as
the Sellers reasonably request to effect the transactions contemplated hereby.
(c) The Purchasers and Xxxx shall execute and deliver a
transition services agreement, substantially in the form attached hereto as
Schedule 2.2(c), concerning the provision of computer services by Xxxx to the
Purchasers following the Closing Date.
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers hereby represent and warrant to the Purchasers that,
except as set forth on the Disclosure Letter delivered to the Purchasers by
the Sellers:
3.1 Corporate Existence. Each Seller is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and Xxxxx has the requisite corporate power and authority to
own, lease and operate its properties and assets and to carry on the Business
as now being conducted. Xxxxx is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction where the conduct of
the Business by it requires it to be so qualified except where the failure to
be so qualified would not have a Material Adverse Effect on Xxxxx. For
purposes of this Agreement, the term "Material Adverse Effect" when used in
respect to any party means a material adverse effect on (i) the assets,
business, financial condition or results of operations of that party and/or
its subsidiaries, taken as a whole, excluding the effect of general economic
or market conditions or other conditions generally affecting the industries in
which such party operates, or (ii) the ability of such party to enter into
this Agreement or consummate the transactions contemplated hereby. Xxxx
indirectly owns all of the outstanding capital stock of Xxxxx. Xxxxx does not
directly or indirectly own, control or have any investment or other interest
in any corporation, partnership or other entity.
3.2 Corporate Power and Authorization. Each Seller has the corporate
power and authority to execute, deliver and perform its obligations under this
Agreement. The execution, delivery and performance of this Agreement by each
Seller have been duly and validly authorized by all necessary corporate
action. This Agreement has been, and the other agreements, documents and
instruments required to be delivered by the Sellers in accordance with the
provisions hereof (collectively, the "Seller Transaction Documents") will be,
duly executed and delivered by each Seller, and this Agreement constitutes,
and the Seller Transaction Documents when executed and delivered by each
Seller will constitute, the legal,
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valid and binding obligation of the Sellers, enforceable against each Seller
in accordance with their respective terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency, moratorium or other
similar laws presently or hereafter in effect relating to or affecting the
enforcement of creditors' rights generally and by general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or
at law).
3.3 No Conflict. The execution, delivery and performance of this
Agreement by the Sellers do not and will not violate or result in the breach
of any term, condition or provision of, or require the consent of any other
person which has not been obtained under: (a) any law, ordinance or
governmental rule or regulation to which either Seller is subject, (b) any
judgment, order, writ, injunction, decree or award of any court, arbitrator or
governmental or regulatory official, body or authority which is applicable to
either Seller, (c) the charter documents of either Seller, or (d) any Contract
listed on Schedule 3.13(a), except for the filing of pre-merger notification
and the expiration or early termination of the waiting period required by the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX Xxx").
3.4 Financial Statements.
(a) The Sellers have delivered to the Purchasers copies of
the unaudited financial statements for the Business for its 1994, 1995 and
1996 fiscal years and for the period ended July 27, 1997 (collectively, the
"Financial Statements"), all of which have been prepared in accordance with
GAAP applied on a consistent basis throughout the period indicated. Such
Financial Statements are true and correct in all material respects and fairly
present the financial position, assets and liabilities of the Business at the
dates indicated, and such statements of income and cash flows fairly present
the results of operations of the Business for the periods indicated.
(b) Since July 27, 1997, Xxxxx has conducted the Business
only in the ordinary course, consistent with past practice and has not: (i)
incurred any material liabilities or entered into any transaction, contract or
arrangement except in the ordinary course of business, consistent with past
practice; or (ii) changed any of the accounting principles followed by it or
the methods of applying such principles, except in each case as required by
GAAP.
3.5 Books of Account. The books, records and accounts of Xxxxx
maintained with respect to the Business reflect the material transactions and
the material assets and material liabilities of Xxxxx with respect to the
Business.
3.6 Sufficiency of the Assets. Except for the Excluded Assets
described in Section 1.2 hereof, the Assets to be conveyed to Acquisition Sub
under this Agreement are sufficient to conduct the Business after the Closing
in the same manner as conducted by Xxxxx prior to the date of this Agreement
in all material respects.
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3.7 Title to Assets. Xxxxx has good and marketable title to the real
property and either good and valid title to, or a valid, subsisting and
unchallenged leasehold interest in or unqualified right to use and transfer to
Acquisition Sub, all of the other tangible assets included in the Assets, free
and clear of all Liens, except for (a) minor imperfections of title, if any,
that do not materially detract from the value or impair the use of the Asset
subject thereto or the operation of the Business, (b) Liens for Taxes which
are not due and payable as of the Closing Date, and (c) Liens that are set
forth in the Disclosure Letter (collectively, "Permitted Liens").
3.8 Condition of Assets. All structures, facilities and other
material items of tangible property and assets included in the Assets are in
good operating condition and repair, subject to normal wear and maintenance,
and are usable in the regular and ordinary course of business.
3.9 Compliance with Law. Xxxxx is in compliance in all respects with
all laws, ordinances or governmental or regulatory rules or regulations
(including, without limitation, environmental laws), whether federal, state or
local, applicable to the conduct of the Business except where the lack of such
compliance would not have a Material Adverse Effect on Xxxxx. Xxxxx owns,
holds, possesses or lawfully uses in the operation of its business all
material Permits which are necessary for it to conduct the Business except
where the lack of any such Permit would not have a Material Adverse Effect on
Xxxxx. Each such Permit is listed on Schedule 3.9 hereto. Xxxxx is not in
default in any material respect, nor has it received any notice of any claim
of an existing default, with respect to any such Permit.
3.10 Litigation. No action, suit, claim, investigation,
administrative proceeding, arbitration or other proceeding of or before any
court, arbitrator or governmental or regulatory official, body or authority is
pending or, to the best of the Sellers' knowledge, threatened against either
Seller, or which relates to the Assets, which (a) if adversely determined,
could, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on Xxxxx, or (b) challenges or seeks to prevent,
enjoin, alter or delay the transactions contemplated hereby.
3.11 Employee Benefit Plans and Arrangements. Schedule 3.11 contains
a complete list of all employee benefit plans, sponsored or maintained by the
Sellers with respect to the employees of Xxxxx. Without limitation, the term
"employee benefit plan" includes all employee welfare benefit plans within the
meaning of section 3(1) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA") and all employee pension benefit plans within the
meaning of section 3(2) of ERISA. Each employee benefit plan of Xxxxx which is
a "group health plan" has been operated in compliance with Section 4980B of
the Code. Xxxxx neither contributes to nor has any obligation under or with
respect to any multiemployer pension plan as defined in Section 3(37) of
ERISA, and Xxxxx has incurred no liability under Title IV of ERISA with
respect to any multiemployer pension plan. Xxxxx is in compliance in all
respects with all applicable law respecting employment, employment practices,
terms and conditions of employment and wages and hours, except
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where such lack of compliance would not have a Material Adverse Effect on
Xxxxx. The consummation of the transactions contemplated by this Agreement
will not (i) increase the amount of compensation due to any Transferred
Employee (as defined herein) or (ii) entitle any Transferred Employee to an
"excess parachute payment" within the meaning of Section 280G of the Code.
3.12 Labor Matters. The Sellers have no collective bargaining
agreements with any union representing any of the employees of Xxxxx, and
there is not pending by any union any formal demand for recognition or
election as the collective bargaining agent of any such employees. To the best
of the Sellers' knowledge, there has been no attempt during the last two years
by any union to organize any such employees, nor has there been any strike,
slowdown or work stoppage by any such employees during such period.
3.13 Contracts.
(a) Schedule 3.13(a) contains a complete list of the
following types of Contracts to which Xxxxx is a party or by which Xxxxx or
any of the Assets are bound as of the date hereof:
(i) any employment or severance contract with
any employee of Xxxxx which requires the payment of more than $75,000
annually;
(ii) any Contract with any sales agent or
distributor of Xxxxx' products;
(iii) any Contract containing covenants
limiting the freedom of Xxxxx to compete in any line of business or with any
person or entity;
(iv) any Contract relating to the borrowing
of money or to mortgaging, pledging or otherwise placing a Lien on any portion
of any Assets or on the Business;
(v) any guaranty of any obligation for
borrowed money;
(vi) any lease or agreement under which Xxxxx
is lessee of, or holds or operates any personal property owned by any other
party, for which the annual rental exceeds $25,000;
(vii) any lease or agreement under which
Xxxxx is lessor of, or permits any third party to hold or operate any
property, real or personal, for which the annual rental exceeds $25,000;
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(viii) any Contract or group of related
Contracts with the same party for the purchase of goods or services, under
which the undelivered balance of such goods or services has a purchase price
in excess of $50,000;
(ix) any Contract or group of related
Contracts with the same party for the sale of goods or services, under which
the undelivered balance of such goods or services has a sales price in excess
of $50,000;
(x) any Contract (other than an employment
Contract) presently in effect with any current or former officer, director,
consultant or other employee (or group of employees) of the Sellers;
(xi) any Contract involving the payment by
Xxxxx of royalties;
(xii) any power of attorney given by Xxxxx to
any person, firm or corporation;
(xiii) any bonus, pension, profit sharing,
retirement or other form of deferred compensation plan;
(xiv) any conditional sale or other title
retention agreement, equipment obligation, or lease purchase agreement;
(xv) any Contract relating to the
Intellectual Property;
(xvi) any other Contract which involves
aggregate further payments in excess of $75,000 and which may not be
terminated within one year from the date hereof without penalty; and
(xvii) any other Contract material to the
assets, liabilities, financial condition or results of operations of the
Business.
(b) Xxxxx has performed in all material respects all
obligations required to be performed by it under each Contract set forth on
Schedule 3.13(a), and to the best of the Sellers' knowledge, no condition
exists or event has occurred which with notice or lapse of time would
constitute a default or a basis for delay or non-performance by Xxxxx or by
any other party thereto.
3.14 Intellectual Property.
(a) Schedule 1.1(h) sets forth a complete and correct list
of all of the Intellectual Property used by Xxxxx in the conduct of the
Business.
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(b) Xxxxx is the sole owner of or has the right to use all
Intellectual Property set forth on Schedule 1.1(h) free and clear of any
payment except maintenance fees. No Intellectual Property which is or within
the last five years has been used in the conduct of the Business is owned
otherwise than by the Sellers or Xxxx Holdings, Inc. The Sellers have not
granted any right in the Intellectual Property to any other Person and, to the
best of the Sellers' knowledge, no other Person, except Xxxx Holdings, Inc.,
has any right in the Intellectual Property.
(c) None of the Intellectual Property set forth on Schedule
1.1(h) nor any products manufactured or sold by Xxxxx infringe or are alleged
to infringe any patent, trademark, tradename or other proprietary right of any
person except where such infringement could not reasonably be expected to have
a Material Adverse Effect on Xxxxx. The Sellers have received no notice of,
and to the best of the Sellers' knowledge there is no basis for, any claim or
demand of any person or entity, or any proceeding which is pending or
threatened, which challenge the exclusive rights of Xxxxx in respect of any of
the Intellectual Property. The Business does not involve employment of any
person in a manner which violates any non-competition or non-disclosure
agreement which such person entered into in connection with any former
employment.
3.15 Taxes.
(a) The Sellers have duly and timely filed, or caused to be
duly and timely filed, all Tax Returns relating to the Business or the Assets
required to be filed by them with the appropriate Governmental Authorities, or
requests for extensions to file such Tax Returns have been timely filed and
granted and have not expired. All such Tax Returns were at the time of filing
and are as of the date hereof true, correct and complete in all respects
relating to the Business or the Assets. All Taxes (as defined herein)
currently due and payable by the Sellers relating to the Business or the
Assets (whether or not shown on any Tax Return) have been paid within the time
and in the manner prescribed by law. The Financial Statements reflect adequate
reserves for all Taxes payable by Xxxxx for all Taxable periods and portions
thereof accrued through the respective dates of such Financial Statements. All
deficiencies for any Taxes relating to the Business or the Assets that have
been proposed, asserted or assessed against the Sellers have been fully paid.
The Sellers are not parties to any pending audit, action or proceeding, nor,
to the best of the Sellers' knowledge, is any such audit, action or proceeding
contemplated or threatened, by any Governmental Authority for the assessment
or collection of any Taxes relating to the Business or the Assets. The Sellers
are not subject to any agreements, waivers or other arrangements extending the
period for assessment, levy or collection of any such Taxes. All Taxes
relating to the Business or the Assets which the Sellers are required by law
to withhold or to collect have been withheld or collected and paid over to the
proper Governmental Authorities or segregated and set aside for such payment.
(b) For purposes of this Agreement, the term "Tax"
(including, with correlative meaning, the terms "Taxes" and "Taxable") means
all federal, state, local, and
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foreign income, profits, franchise, gross receipts, payroll, sales,
employment, use, property, withholding, excise, alternative minimum, gains,
transfer, documentary, stamp and other taxes, duties or assessments of any
nature whatsoever, together with all interest, penalties and additions imposed
with respect to such amounts, and the term "Tax Returns" means all returns,
reports, declarations, statements, elections, forms or other documents or
information required to be filed with a taxing authority with respect to any
Taxes.
3.16 Material Adverse Change. Since July 27, 1997, the Business has
been conducted in the ordinary course, consistent with past practice, and
there has not occurred any event, condition or contingency which has or could
reasonably be expected to have a Material Adverse Effect on Xxxxx nor, to the
best of the Sellers' knowledge, any event, condition or contingency that is
likely to result in such a Material Adverse Effect. Without limiting the
generality of the foregoing, since July 27, 1997, Xxxxx has not: (a) failed to
pay or discharge when due any liability, the failure of which to pay or
discharge has caused or may reasonably be expected to cause any material
damage or risk of loss to the Assets or the Business, (b) created, incurred,
assumed or guaranteed any material indebtedness for money borrowed, (c)
incurred any damage, destruction or loss (whether or not covered by insurance)
to the Assets involving an amount in excess of $200,000, or (d) taken any
action which would have constituted a violation of Section 3.16.
3.17 Brokers. Except for The Beacon Group (whose compensation shall
be the responsibility of the Sellers), no person acting on behalf of the
Sellers or any of their affiliates or under the authority of any of the
foregoing is or will be entitled to any brokers' or finders' fee or any other
commission or similar fee, directly or indirectly, from any of such parties in
connection with any of the transactions contemplated by this Agreement.
3.18 Affiliate Agreements. There are no material Contracts between
Xxxxx on the one hand and Xxxx or any entity controlled by Xxxx on the other
hand.
3.19 Availability of Documents. The Sellers have delivered to, or
made available for, the Purchasers copies of documents referred to in the
Disclosure Letter which copies are true and complete in all material respects
and include all material amendments, supplements and modifications thereto or
waivers currently in effect thereunder.
3.20 Liabilities. Xxxxx has no liabilities or obligations of any
nature whatsoever, whether absolute, accrued, contingent or otherwise, related
to or connected with the Business or the Assets, including, without
limitation, liabilities for Taxes, except for those (a) reflected or reserved
on the Financial Statements, or (b) incurred or accrued since July 27, 1997 in
the ordinary and normal course of the Business.
3.21 Environmental and Safety Compliance.
(a) General. Neither Xxxxx nor any other previous owner,
tenant, occupant or user of the Xxxxxxxx Property has engaged in or permitted
operations or activities upon, or
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any use or occupancy of the Xxxxxxxx Property, or any portion thereof, which
has resulted in the emission, release, discharge, dumping or disposal of any
Hazardous Materials (as defined herein) on, under, in or about the Xxxxxxxx
Property requiring remediation under any Environmental Requirements (as
defined herein), nor have any Hazardous Materials migrated from the Xxxxxxxx
Property to, upon, about or beneath other properties requiring remediation
under any Environmental Requirement, nor have any Hazardous Materials migrated
from other properties to, upon, about or beneath the Xxxxxxxx Property
requiring remediation under any Environmental Requirements.
(b) Specific Environmental Representations and Warranties.
(i) There is not, nor has there been,
constructed, placed, deposited, stored, disposed of or located on the Xxxxxxxx
Property any asbestos in any form which has become friable;
(ii) No underground treatment or storage
tanks or water, gas or oil xxxxx are or have been located on the Xxxxxxxx
Property;
(iii) There are no polychlorinated biphenyls
(PCBs) or transformers, capacitors, ballasts, or other equipment which
contains dielectric fluid containing PCBs at levels in excess of fifty parts
per million (50ppm) constructed, placed, deposited, stored, disposed of or
located on the Xxxxxxxx Property;
(iv) The Xxxxxxxx Property, its current uses
and activities and its uses and activities conducted prior to those of Xxxxx,
comply and have at all times complied in all material respects with all
Environmental Requirements, and Xxxxx has with respect to the Business,
obtained all Permits necessary under applicable Environmental Requirements and
is in compliance in all material respects with all such Permits; and
(v) Neither Xxxxx nor any prior owner or
occupant of the Xxxxxxxx Property, has received any notice or other
communication concerning any alleged violation of Environmental Requirements,
whether or not corrected to the satisfaction of the party providing such
notice, nor any notice or other communication concerning alleged liability for
Environmental Damages (as defined herein) in connection with the Business, or
the Xxxxxxxx Property or any operations conducted thereon, and there is no
judgment, decree, order, writ or injunction outstanding, nor any litigation,
action, suit, claim (including citation or directive) or proceeding pending or
threatened, relating to the ownership, use, maintenance or operation of the
Xxxxxxxx Property by Xxxxx, or the alleged violation of Environmental
Requirements by Xxxxx, alleged liability for Environmental Damages, or the
suspected presence of Hazardous Material on the Xxxxxxxx Property or potential
migration thereto.
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(c) Definitions.
(i) The term "Hazardous Material" means any
substance which is itself or contains "hazardous waste," "hazardous
substance," pollutant or contaminant under any federal, applicable state or
local statute, regulation, rule or ordinance or amendments thereto including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. xx.xx. 9601 et seq.) and/or the Resource Conservation
and Recovery Act (42 U.S.C. xx.xx. 6901 et. seq.).
(ii) The term "Environmental Requirements"
means all applicable laws, Permits and similar items of all Governmental
Authorities and all applicable judicial, administrative, and regulatory
judgments, decrees, orders, writs or injunctions relating to the protection of
human health or the environment in each case as in effect on the Closing Date.
(iii) The term "Environmental Damages" means
any and all liabilities, losses, costs, expenses or damages of any kind
whatsoever (including, without limitation, reasonable attorneys' fees) which
are incurred at any time as a result of the presence at or prior to the
Closing of any Hazardous Material generated on the Xxxxxxxx Property on, under
or about any other real property, or the existence at or prior to Closing of
Hazardous Material upon, about or beneath the Xxxxxxxx Property or migrating
to or from the Xxxxxxxx Property, or the existence at or prior to the Closing
of a violation of Environmental Requirements pertaining to the Business,
regardless of whether the presence at or prior to the Closing of such
Hazardous Material or violation of Environmental Requirements arose prior to
the present ownership or operation of the Xxxxxxxx Property or the Business.
3.22 Product Warranties. Except for written product warranties made
by Xxxxx on its sales order forms, packages and product catalogues, true,
accurate and complete copies of which have been provided to the Purchasers,
Xxxxx has made no express product warranties in connection with the sale of
its products during the last five years.
3.23 No Other Warranties. In connection with the transactions
contemplated hereby, except as expressly set forth in this Article 3, THE
SELLERS MAKE NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, WHETHER EXPRESS OR
IMPLIED OR STATUTORY, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR OTHERWISE.
3.24 Insurance. Xxxxx maintains no insurance policies covering the
Assets. Xxxx currently maintains all of the insurance policies covering the
Assets.
3.25 Intentionally Omitted.
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3.26 Sellers' Knowledge. For purposes of this Article 3, "best of the
Sellers' knowledge" or words of similar import shall be conclusively deemed to
include all information that is actually known or in the exercise of
reasonable diligence in the normal course of their employment should be known
by those persons identified in Schedule 3.26. The Sellers shall not be deemed
to have actual or constructive knowledge of any fact, circumstance or
occurrence known to any person other than as set forth in the preceding
sentence.
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
The Purchasers hereby represent and warrant to the Sellers that:
4.1 Corporate Existence. Each Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation.
4.2 Corporate Power and Authorization. Each Purchaser has the
corporate power and authority to execute, deliver and perform its obligations
under this Agreement. The execution, delivery and performance of this
Agreement by each Purchaser have been duly and validly authorized by all
necessary corporate action. This Agreement has been, and the other agreements,
documents and instruments required to be delivered by the Purchasers in
accordance with the provisions hereof (collectively, the "Purchaser
Transaction Documents") will be, duly executed and delivered by each
Purchaser, and this Agreement constitutes, and the Purchaser Transaction
Documents when executed and delivered by each Purchaser will constitute, the
legal, valid and binding obligation of the Purchasers, enforceable against
each Purchaser in accordance with their respective terms, except to the extent
that enforceability may be limited by bankruptcy, insolvency, moratorium or
other similar laws presently or hereafter in effect relating to or affecting
the enforcement of creditors' rights generally and by general principles of
equity (regardless of whether enforcement is considered in a proceeding in
equity or at law).
4.3 No Conflict. The execution, delivery and performance of this
Agreement by the Purchasers does not and will not violate or result in the
breach of any material term, condition or provision of, or require the consent
of any other person which has not been obtained under: (a) any material law,
ordinance or governmental rule or regulation to which either Purchaser is
subject, (b) any judgment, order, writ, injunction, decree or award of any
court, arbitrator or governmental or regulatory official, body or authority
which is applicable to either Purchaser, (c) the charter documents of either
Purchaser, or (d) any material, contract, agreement or commitment to which
either Purchaser is a party or by which either Purchaser is otherwise bound,
except for the filing of pre-merger notification and the expiration or early
termination of the waiting period required by the HSR Act.
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4.4 Financial Condition. The Purchasers have on hand or ready access
to the funds necessary to enable them to consummate the transactions
contemplated by this Agreement.
4.5 Litigation. No action, suit, claim, investigation, administrative
proceeding, arbitration or other proceeding of or before any court, arbitrator
or governmental or regulatory official, body or authority is pending or, to
the best of the Purchasers' knowledge, threatened against either Purchaser
which (a) if adversely determined, could individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Purchasers, or
(b) challenges or seeks to prevent, enjoin, alter or delay the transactions
contemplated hereby.
4.6 Brokers. No Person acting on behalf of the Purchasers or any of
their affiliates or under the authority of any of the foregoing is or will be
entitled to any brokers' or finders' fee or any other commission or similar
fee, directly or indirectly, from any of such parties in connection with any
of the transactions contemplated by this Agreement.
4.7 Investigation and Evaluation. The Purchasers acknowledge that:
(a) the Purchasers are experienced in the operation of the type of business
conducted by Xxxxx, (b) the Purchasers and their directors, officers,
employees, attorneys, accountants and advisors have been given the opportunity
to examine to the full extent deemed necessary and desirable by the Purchasers
all books, records and other information with respect to the Business, the
Assets and the Assumed Liabilities, (c) the Purchasers have taken full
responsibility for determining the scope of their investigations of the
Business, the Assets and the Assumed Liabilities, and for the manner in which
such investigations have been conducted, and have examined the Business, the
Assets and the Assumed Liabilities to the Purchasers' full satisfaction, (d)
the Purchasers are fully capable of evaluating the adequacy and accuracy of
the information and material obtained by the Purchasers in the course of such
investigations, (e) the Purchasers have not relied on the Sellers with respect
to any matter in connection with the Purchasers' evaluation of the Business,
the Assets and the Assumed Liabilities, other than the representations and
warranties of the Sellers specifically set forth in Article 3 hereof, and (f)
the Sellers are making no representations or warranties, express or implied,
of any nature whatever with respect to the Business, the Assets or the Assumed
Liabilities, other than the representations and warranties of the Sellers
specifically set forth in Article 3 hereof.
4.8 Forecasts and Projections. The Purchasers acknowledge that there
are uncertainties inherent in attempting to make projections and forecasts and
render opinions, the Purchasers are familiar with such uncertainties, and the
Purchasers recognize that any projections, forecasts or opinions furnished to
them by the Sellers, their affiliates or any of their representatives are
subject to such uncertainties and that the actual results of the Business
could differ materially from any results anticipated in such projections,
forecasts and opinions.
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ARTICLE 5 - AGREEMENTS PENDING CLOSING
5.1 Agreements of the Sellers Pending the Closing. Except as
expressly provided herein, between the date hereof and the Closing, unless
otherwise consented to in writing by the Purchasers (which consent shall not
unreasonably be withheld or delayed):
(a) Xxxxx shall use its best efforts to conduct the Business
only in the ordinary course, consistent with past practice;
(b) Except in the ordinary course of business, consistent
with past practice, Xxxxx shall not directly or indirectly sell, pledge,
dispose of or encumber any Assets including any Intellectual Property;
(c) Except in the ordinary course of business, consistent
with past practice, Xxxxx shall not enter into, terminate, modify, assign,
waive, release or relinquish any material contract, agreement or commitment;
(d) Except in the ordinary course of business, consistent
with past practice and except for retention and bonus arrangements for certain
key employees (which shall be the responsibility of the Sellers), Xxxxx shall
not: (i) grant any increase in the salary or other compensation of its
employees, (ii) grant any bonus to any such employee, (iii) enter into any
employment agreement, (iv) make any loan to or enter into any material
transaction of any other nature with any such employee, (v) enter into any
additional employee benefits plans or amend any such employee benefits plans,
or (vi) enter into or modify any collective bargaining agreement related to
the Business;
(e) Xxxxx shall use reasonable efforts, to the extent not
prohibited by the foregoing provisions of this Section 5.1, to maintain all
material relationships with its distributors, agents, lessors, suppliers and
customers;
(f) The Sellers shall use reasonable efforts not to take any
action which would result in a breach of any of their representations and
warranties contained in this Agreement, and the Sellers shall cooperate with
the Purchasers and use reasonable efforts to cause all of the conditions to
the obligations of the Purchasers and the Sellers under this Agreement to be
satisfied on or prior to the Closing Date and shall make such filings and take
such actions as shall be reasonably necessary to try to obtain expiration or
early termination of the waiting period required by the HSR Act as promptly as
practicable;
(g) The Sellers shall cause Xxxx Holdings, Inc. to deliver
at the Closing all instruments of assignment to Acquisition Sub of all
Intellectual Property (and all applications for, and extensions and
reissuances of, any of the foregoing and rights therein);
(h) Except in the ordinary course of business, consistent
with past practice and the representations and warranties of the Sellers
contained in this Agreement, Xxxxx shall
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not enter into any other agreements, commitments, contracts or undertakings
relating to the Assets; and
(i) The Sellers shall not enter into any compromise or
settlement of any litigation, action, suit, claim, proceeding or investigation
relating to the Assets, except settlements made in the ordinary course of
business involving amounts not in excess of $50,000 in the aggregate.
5.2 Agreements of the Purchasers Pending the Closing. Except as
expressly provided herein, between the date hereof and the Closing, unless
otherwise consented to in writing by the Sellers (which consent shall not
unreasonably be withheld or delayed), the Purchasers shall use reasonable
efforts not to take any action which would result in a breach of any of their
representations and warranties contained in this Agreement, and the Purchasers
shall cooperate with the Sellers and use reasonable efforts to cause all of
the conditions to the obligations of the Purchasers and the Sellers under this
Agreement to be satisfied on or prior to the Closing Date and shall make such
filings and take such actions as shall be reasonably necessary to try to
obtain expiration or early termination of the waiting period required by the
HSR Act as promptly as practicable.
5.3 Supplemental Disclosure. Between the date of this Agreement and
the Closing Date, the Sellers shall promptly notify the Purchasers in writing
if the Sellers become aware of any fact or condition that makes any
representation or warranty of the Sellers set forth in this Agreement untrue
in any material respect as of the date of this Agreement or if the Sellers
become aware of the occurrence after the date of this Agreement of any fact or
condition that would make any representation or warranty of the Sellers untrue
in any material respect had such representation or warranty been made as of
the time of occurrence or discovery of such fact or condition. Should any fact
or condition require any material change in the Disclosure Letter if the
Disclosure Letter had been prepared as of the date of the occurrence or
discovery of any such fact or condition, the Sellers shall promptly deliver to
the Purchasers a supplement or amendment to the Disclosure Letter specifying
such change. If within ten days of the Purchasers' receipt of any such
supplement or amendment to the Disclosure Letter which relates to the
occurrence of any fact or condition after the date of this Agreement the
Purchasers do not terminate this Agreement pursuant to Section 9.1(a)(ii)
hereof (to the extent the Purchasers are entitled to terminate this Agreement
pursuant to such section) or proceed with the Closing hereunder, such
supplement or amendment shall be deemed to have been accepted by the
Purchasers. Any such supplement or amendment to the Disclosure Letter which
relates to any fact or condition occurring prior to or existing on the date of
this Agreement shall not be deemed to have been accepted by the Purchasers
unless the Purchasers expressly indicate such acceptance in writing to the
Sellers.
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5.4 Access.
(a) Upon reasonable prior notice, the Sellers shall give to
the Purchasers' officers, employees, counsel, accountants and other
representatives access to and the right to inspect, during normal business
hours, the premises, properties, assets, records, contracts and other
documents of Xxxxx to be acquired by Acquisition Sub hereunder and shall
permit them to consult with the officers, employees, counsel, accountants and
other representatives of the Sellers for the purpose of making such
investigation of the Business, the Assets and the Assumed Liabilities as the
Purchasers shall reasonably desire to make, provided that such investigation
shall not unreasonably interfere with the Sellers' business operations or the
right of quiet enjoyment of any lessee or other user of such premises,
properties and assets. Furthermore, the Sellers shall furnish to the
Purchasers copies of documents, records and information with respect to the
affairs of Xxxxx as the Purchasers shall from time to time reasonably request
and shall permit the Purchasers and their agents to make such physical
inventories and inspections of the Assets as the Purchasers may reasonably
request from time to time.
(b) The Purchasers acknowledge that certain of the
information which has been and may be made available to them by the Sellers is
proprietary and includes confidential information and such information is and
shall be subject to the terms of the Confidentiality Agreement between HON and
The Xxxxxxxxxx Group on behalf of Xxxx dated February 24, 1997.
5.5 Press Releases. The initial press release relating to this
Agreement shall be a joint press release and thereafter the Purchasers and the
Sellers shall, subject to their respective legal obligations and the
requirements of any applicable securities exchange rule, consult with each
other, and use reasonable efforts to agree upon the text of any press release,
before issuing any such press release or otherwise making public statements
with respect to the transactions contemplated hereby and in making any filings
with any federal or state governmental or regulatory agency or with any
national securities exchange with respect to the transactions contemplated
hereby.
5.6 Tax Returns. The Sellers shall be responsible for preparing and
filing on a timely basis any and all Tax Returns in respect of the Business or
any of the Assets that are required to be filed with respect to all periods
ending on or prior to the Closing Date. The Purchasers shall be responsible
for preparing and filing on a timely basis any and all Tax Returns in respect
of the Business or the Assets that are required to be filed with respect to
all periods ending after the Closing Date.
ARTICLE 6 - CONDITIONS PRECEDENT TO THE CLOSING
6.1 Conditions Precedent to the Purchasers' Obligations. All
obligations of the Purchasers under this Agreement are subject to the
fulfillment or satisfaction, prior to or at
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the Closing, of each of the following conditions precedent, any or all of
which may be waived by the Purchasers in their sole discretion:
(a) The representations and warranties of the Sellers herein
contained, except for the representations and warranties contained in Section
3.21 hereof, shall have been true and correct in all material respects at the
date of execution of this Agreement and as of the Closing Date as though made
on and as of the Closing Date, and the representations and warranties
contained in Section 3.21 hereof shall have been true and correct in all
respects at the date of execution of this Agreement and as of the Closing Date
as though made on and as of the Closing Date except where the failure to be so
true and correct would not have a Material Adverse Effect on Xxxxx (in each
case after giving effect to any supplement or amendment to the Disclosure
Letter accepted or deemed to have been accepted by the Purchasers as if all
such supplements and amendments were included in the Disclosure Letter
delivered by the Sellers on the date hereof); the Sellers shall have performed
in all material respects all obligations and complied in all material respects
with all agreements, undertakings and covenants required by this Agreement to
be performed or complied with by the Sellers at or prior to the Closing Date;
and the Sellers shall have delivered to the Purchasers a certificate dated the
Closing Date and signed by the President or a Senior or Executive Vice
President of Xxxx, the Chief Financial Officer of Xxxx and the President or a
Vice President of Xxxxx to such effect.
(b) There shall not be any judgment, decree, injunction,
ruling or order of any court, governmental department, commission, agency or
instrumentality outstanding against the Sellers or the Purchasers which
prohibits or materially restricts or delays consummation of the Closing or
which seeks material damages from the Purchasers in connection with the
transactions contemplated by this Agreement.
(c) Intentionally Omitted.
(d) The Purchasers shall have obtained all of the consents
and Permits listed on Schedule 6.1(d).
(e) The Purchasers shall have obtained good and valid title
insurance policies or, in final form, irrevocable title insurance commitments
dated as of the Closing Date, insuring Acquisition Sub's title as fee owner in
each parcel of real property included in the Xxxxxxxx Property and access
rights to such property, if any, free and clear of all Liens, except Permitted
Liens.
(f) The required statutory waiting period under the HSR Act
shall have terminated.
6.2 Conditions Precedent to the Sellers' Obligations. All obligations
of the Sellers under this Agreement are subject to the fulfillment or
satisfaction, prior to or at the Closing,
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of each of the following conditions precedent, any or all of which may be
waived by the Sellers in their sole discretion:
(a) The representations and warranties of the Purchasers
herein contained shall have been true and correct in all material respects at
the date of execution of this Agreement and as of the Closing Date as though
made on and as of the Closing Date; the Purchasers shall have performed in all
material respects all obligations and complied in all material respects with
all agreements, undertakings and covenants required by this Agreement to be
performed or complied with by the Purchasers at or prior to the Closing Date;
and the Purchasers shall have delivered to the Sellers a certificate dated the
Closing Date and signed by the President or a Senior or Executive Vice
President of HON, the Chief Financial Officer of HON and the President or any
Vice President of Acquisition Sub to such effect.
(b) There shall not be any judgment, decree, injunction,
ruling or order of any court, governmental department, commission, agency or
instrumentality outstanding against the Sellers or the Purchasers which
prohibits or materially restricts or delays consummation of the Closing or
which seeks material damages from the Sellers in connection with the
transactions contemplated by this Agreement.
(c) Intentionally Omitted.
(d) Xxxxx shall have acquired fee simple title to Parcel 2
(as defined on Schedule 1.1(d)).
(e) The required statutory waiting period under the HSR Act
shall have terminated.
ARTICLE 7 - POST CLOSING MATTERS
7.1 Employee Arrangements.
(a) Purchasers' Undertaking.
(i) Effective as of the Closing Date,
Acquisition Sub shall offer employment with Acquisition Sub to all of the
employees of Xxxxx except for as many as eight such employees selected by the
Purchasers. A list of all of the employees of Xxxxx and their titles as of the
date hereof is set forth on Schedule 7.1(a). The Sellers shall provide the
Purchasers with an updated Schedule 7.1(a) at the Closing which shall reflect
all changes in such employees that occur between the date hereof and the
Closing. Any offer of employment to such employees by Acquisition Sub shall be
for employment at will and shall not be construed to limit the ability of
Acquisition Sub to terminate any such employee at any time for any reason.
Subject to Sections 7.1(b), (d), (e) and (f), each offer of employment
pursuant to this Section 7.1(a) shall be for employment at a base rate of pay
(including any
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shift differential) that is not less than the base rate of pay (including any
shift differential) earned immediately prior to the Closing by the individual
receiving such offer. Each such employee who accepts, as of the Closing Date,
such offer of employment shall hereinafter be referred to as a "Transferred
Employee."
(ii) With respect to any employees of Xxxxx
not offered employment by Acquisition Sub pursuant to Section 7.1(a)(i), the
Sellers shall provide such employees with the maximum benefits provided for
under the Seller Severance Program (as defined herein) and the Purchasers
shall promptly reimburse the Sellers for the cost of all such benefits. The
Purchasers shall not be responsible for the cost of any outplacement services
or residual automobile expenses, if any, voluntarily incurred by the Sellers.
Furthermore, the Purchasers shall provide such employees with health insurance
coverage consistent with any obligation of the Sellers or the Purchasers under
Title V of the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended ("COBRA").
(iii) With respect to any eligible employees
terminated by Xxxxx after January 1, 1997 and prior to the Closing Date and
any employees of Xxxxx offered employment by Acquisition Sub, but who decline
such offers, the Purchasers shall provide such employees with health insurance
coverage consistent with any obligation of the Sellers or the Purchasers under
COBRA.
(b) Employee Benefits.
(i) In General. Subject to (c), (d) and (e)
below regarding severance, bonus, and vacation benefits payable to certain
Transferred Employees, on and after the Closing Date, Acquisition Sub shall
provide the Transferred Employees with the employee benefits set forth on
Schedule 7.1(b) (the "Purchaser Employee Benefits"), and shall credit the
Transferred Employees for service with Xxxxx for purposes of eligibility and
vesting under all of the Purchasers' welfare benefit plans and qualified
pension and profit sharing plans to the extent that such service credit would
be relevant. No exclusions for pre-existing conditions shall apply to any
disability or medical benefit plan of the Purchasers for which Transferred
Employees may be eligible.
(ii) Notice. Prior to the Closing, the
Sellers and Purchasers shall communicate with all Transferred Employees with
respect to the benefits to be provided to them pursuant to this Section 7.1
following the consummation of the transactions contemplated by this Agreement.
(c) Severance Benefits. Notwithstanding anything to the
contrary in this Section 7.1, the Purchasers shall provide each Transferred
Employee who, within the 24-month period commencing on the Closing Date: (i)
is either actually or constructively terminated (as defined herein) by
Acquisition Sub for any reason not attributable to the Transferred Employee's
conduct or job performance; or (ii) is terminated by Acquisition Sub for
declining an offer to relocate to a location or facility of the Purchasers
more than 40
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miles from Florence, Alabama, with the cash severance pay which would have
been provided to any Transferred Employee under the Sellers' severance policy
described in Schedule 7.1(c) (the "Seller Severance Program") plus those
Purchaser Employee Benefits (other than cash severance pay) comparable to the
employee benefits which would have been provided under the Sellers' Severance
Program had the Transferred Employee been terminated by Xxxxx. No such
Transferred Employee shall be entitled to receive any cash payment or other
benefit under any severance program maintained by the Purchasers that is
duplicative of the cash payments and other benefits provided for in this
Section 7.1(c). For purposes of this Section 7.1(c), it shall be presumed that
any Transferred Employee so terminated by the Purchasers shall be entitled to
benefits under the Seller Severance Program, notwithstanding any discretion
granted to the Sellers under the terms of such program. Furthermore, for
purposes of this Section 7.1(c), any plant closure or sale of business segment
by the Purchasers that results in the termination of any Transferred Employee
shall be treated as a termination due to reduction in workforce or job
elimination under the Seller Severance Program. Notwithstanding the foregoing,
the termination of employment by Acquisition Sub of any Transferred Employee
who declines an offer to be transferred to a position that is comparable to
such Transferred Employee's position at the time that the offer is made and
that is 40 miles or less from Florence, Alabama, shall be treated as though
such Transferred Employee had resigned and such Transferred Employee shall not
be entitled to severance benefits under this Section 7.1(c).
For purposes of this Section 7.1(c), "constructive
termination" shall mean a material decrease in a Transferred Employee's base
pay or salary, exclusive of pension, welfare and fringe benefits, determined
as of the Closing Date.
(d) Bonus. Notwithstanding anything to the contrary in this
Section 7.1, the Purchasers shall provide each Transferred Employee with the
bonus payments, if any, attributable to any period prior to the Closing Date,
in accordance with the terms of the bonus program applicable to such
Transferred Employees as described on Schedule 3.11 to the extent that such
bonus payments are adequately provided for on the Closing Statement. In
addition, if the Closing occurs prior to November 30, 1997, the Purchasers
shall continue such bonus program through such date.
(e) Vacation Benefits. Notwithstanding anything to the
contrary in this Section 7.1, the Purchasers shall provide the Transferred
Employees with the weeks of vacation to which they were entitled from Xxxxx on
the day before the Closing as described on Schedule 3.11.
(f) Medical Plan. To the extent permitted thereunder, the
Purchasers shall assume Policy No. 44533 as in effect between Xxxxx and Blue
Cross Blue Shield of Alabama as of the Closing, providing medical and dental
benefits to eligible current and eligible former employees of Xxxxx (and their
eligible spouses and dependents), which was issued pursuant to the application
executed on December 19, 1996, by Xxxxx in connection with such policy.
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(g) WARN Act Compliance. Schedule 7.1(g) lists all of the
employees of Xxxxx that were terminated and the grounds for their termination
during the six-month period prior to the date of this Agreement. Following the
Closing Date, the Purchasers shall comply in all respects with the Worker's
Adjustment and Retraining Notification Act, as amended (the "WARN Act") and
shall not take any action which would subject the Sellers to any disclosure,
announcement or other obligation under the WARN Act. As of the date hereof,
the Purchasers do not contemplate any "plant closing" or "employee layoff," as
such terms are used in the WARN Act, with respect to the Transferred Employees
on or before June 30, 1998. If prior to the Closing Date, Xxxxx takes any
action which, in and of itself, constitutes a "plant closing" or "mass
layoff," or which, in and of itself, results in any employee of Xxxxx
suffering or deeming to have suffered any "employment loss," as those terms
are defined in the WARN Act, Xxxxx shall be solely responsible for providing
any notice required by the WARN Act and for making payments, if any, which may
be required under the WARN Act for failure to provide appropriate notice.
(h) Employee Benefit Liabilities Retained by the Sellers.
Except as provided in this Section 7.1, the Sellers shall retain and be
responsible for the welfare benefits of all present and former employees,
other than Transferred Employees, and for retirees of Xxxxx as of the Closing
Date. The Sellers shall continue their employee benefit programs applicable to
the Transferred Employees as benefit programs for the Transferred Employees
until the Closing Date, but without increase in benefits. The Sellers shall
not have any obligation to pay any severance compensation or separation pay to
the Transferred Employees. The Sellers shall assume no past, present or future
responsibility or liability of any kind, contingent or otherwise, arising out
of the operation or termination of any employee benefit plan of the Purchasers
existing at any time whether prior or subsequent to the Closing Date.
(i) Pension and Savings Plans. The Sellers shall retain and
be responsible for all liabilities and obligations arising under the defined
benefit pension plan and savings plan sponsored by Xxxx which cover the
employees of Xxxxx.
(j) Cooperation.
(i) With respect to all benefits for which
the Sellers are liable under this Section 7.1, the Purchasers shall cooperate
with the Sellers by promptly providing the information reasonably requested by
the Sellers to enable the Sellers to perform their obligations. The Purchasers
shall direct all claimants and claims for such benefits to the Sellers.
(ii) With respect to any benefits which the
Purchasers provide to Transferred Employees, the Sellers shall cooperate with
the Purchasers by promptly providing the information reasonably requested by
the Purchasers to enable the Purchasers to perform their obligations. The
Sellers shall provide the Purchasers with such reasonable access prior to the
Closing Date as may be necessary or appropriate to enable the
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Purchasers to enroll potential Transferred Employees into Purchaser Employee
Benefits and otherwise fulfill their obligations under this Section 7.1.
(iii) After the Closing Date, except as
restricted by applicable law, the Sellers and the Purchasers each will
cooperate with the other in providing reasonable access to all information
required for the operation of, or the preparation and submission of reports or
notices required in connection with the operation of the employee benefit
programs maintained by the Sellers or the Purchasers or their affiliates which
cover any of the Transferred Employees, including, without limitation, the
preparation and submission of reports or notices to the Retirement Benefit
Guaranty Corporation, the Department of Labor, the Internal Revenue Service or
any other agency of the U.S. Government.
(iv) The provisions of any employee benefit
plan or program of the Sellers relating to the amendment or termination by any
employer sponsor or other party to such plan or program shall not be abridged
by this Agreement.
7.2 Maintenance of Books and Records. Each of the Sellers and the
Purchasers shall preserve until at least the fifth anniversary of the Closing
Date all records possessed or to be possessed by such party relating to any of
the assets, liabilities or business of Xxxxx prior to the Closing Date. After
the Closing Date, where there is a legitimate purpose, such party shall
provide the other parties with access, upon prior reasonable written request
specifying the need therefor, during regular business hours, to: (a) the
officers, employees and representatives of such party, and (b) the books of
account and records of such party, but, in each case, only to the extent
relating to the assets, liabilities or business of Xxxxx prior to the Closing
Date, and the other parties and their representatives shall have the right to
make copies of such books and records; provided, however, that the foregoing
right of access shall not be exercisable in such a manner as to interfere
unreasonably with the normal operations and business of such party; and
provided further, that, as to so much of such information as constitutes trade
secrets or confidential business information of such party, the requesting
party and its officers, employees and representatives will use due care to not
disclose such information except: (i) as required by law or applicable stock
exchange rule, (ii) with the prior written consent of such party, which
consent shall not be unreasonably withheld or delayed, or (iii) where such
information becomes available to the public generally, or becomes generally
known to competitors of such party, through sources other than the requesting
party, its affiliates or its officers, employees or representatives. Such
records may nevertheless be earlier destroyed by a party if such party sends
to the other parties written notice of its intent to destroy the records,
specifying with particularity the contents of the records to be destroyed.
Such records may then be destroyed after the 30th day after such notice is
given unless another party object to the destruction in which case the party
seeking to destroy the records shall deliver such records to the objecting
party.
7.3 Mutual Assistance Regarding Taxes. The Purchasers and the Sellers
will provide each other such assistance as may reasonably be required by any
of them in connection with the preparation of any Tax Return, any audit or
other examination by any
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taxing authority or any judicial or administrative proceedings related to
liability for Taxes (including refunds) and will each provide the other with
any records or information relevant to such return, audit or examination,
proceedings or determination as are in its possession or subject to its
control. Such assistance shall include making employees available on a
mutually convenient basis to provide additional information and explanation of
any material provided pursuant hereto and shall include providing copies of
any relevant Tax Returns.
7.4 Payments Received. After the Closing, each of the Sellers and the
Purchasers shall hold and promptly transfer and deliver to the others, from
time to time as and when received by them, any cash, checks with appropriate
endorsements (using their reasonable efforts not to convert such checks into
cash), or other property that they may receive on or after the Closing which
properly belongs to another party and will account to the other for all such
receipts.
7.5 Non-Competition.
(a) For a period of five years from and after the Closing
Date, the Sellers shall not, directly or indirectly, engage in the
manufacture, assembly, design, distribution or marketing of any product
substantially similar to any product (other than a product associated with the
Excluded Assets) which at any time during the five years immediately preceding
the Closing Date was manufactured, assembled, designed, distributed or
marketed by Xxxxx; provided, however, that nothing herein shall prohibit: (i)
the Sellers from acquiring any entity so engaged (a "Competing Entity") if
such entity's revenues from such activity represented less than 15% of such
entity's total revenues for the 12-month period prior to such acquisition, or
(ii) Xxxx from being acquired by any entity to any degree so engaged. In the
event that the Sellers acquire any Competing Entity pursuant to the exception
provided above and the Sellers desire to sell the competing product line of
such entity to a third party pursuant to a bona fide written offer, the
Sellers shall give written notice of their intention to sell to the
Purchasers. The Purchasers shall have the right to purchase such competing
product line on the terms set forth in the bona fide offer, provided that the
Purchasers exercise such right within 30 days of receiving the written notice
of the Sellers' intention to sell.
(b) The Sellers acknowledge that damages alone shall not be
an adequate remedy for any breach by the Sellers of their covenants contained
in this Section 7.5; accordingly, in addition to any other remedies which the
Purchasers may have, the Purchasers shall be entitled to injunctive relief in
any court of competent jurisdiction for any breach or threatened breach of any
such covenants by the Sellers. The Purchasers shall, in addition to the
remedies herein provided, be entitled to avail themselves of all such other
remedies as may now or hereafter exist at law or in equity for compensation,
and for the specific enforcement of the covenants contained in this Section
7.5. Resort to any remedy provided for hereunder or provided for by law for
any breach by the Sellers of this Section 7.5 shall not preclude or bar the
concurrent or subsequent employment of any other
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appropriate remedy or remedies, or preclude the recovery by the Purchasers of
monetary damages and compensation.
(c) The Sellers acknowledge that the covenants contained in
this Section 7.5 are fair and reasonable in light of the consideration paid
hereunder by the Purchasers. If any provision hereof is determined to be
invalid or unenforceable by a court of competent jurisdiction, the Sellers
shall negotiate in good faith to provide the Purchasers with protection as
nearly equivalent to that found to be invalid or unenforceable and if any such
provision shall be so determined to be invalid or unenforceable by reason of
the duration or geographical scope of the covenants contained therein, such
duration or geographical scope, or both, shall be considered to be reduced to
a duration or geographical scope to the extent necessary to cure such
invalidity.
7.6 Name Change Filings. Xxxxx shall, within 10 days following the
Closing, deliver to the Purchasers evidence of filing with the Secretary of
State of Alabama of an Amendment to its Articles of Incorporation to change
its name from "Xxxxx Custom Furniture, Inc." to a name which is not
deceptively similar to "Xxxxx" or "Xxxxx Custom Furniture." Xxxxx shall,
within 30 days after the Closing, take such actions and file such documents
with the Secretary of State of Alabama as shall be necessary to change any
assumed names, including, without limitation, "Contemporary Tables, Inc.," to
names which are not deceptively similar to such assumed names, and shall
deliver to the Purchasers copies of such documents evidencing such name change
filings. Xxxxx shall, within 30 days after the Closing, take such actions and
file such documents as shall be necessary to reflect such name changes in all
States in which Xxxxx is qualified to do business as a foreign corporation,
and shall deliver to the Purchasers copies of such documents evidencing such
name change filings. The Sellers shall, within 30 days after the Closing, take
such actions and file such documents as shall be necessary to (a) change the
trademarks and tradenames associated with any products available through the
Sellers to discontinue the use of the trademark and tradenames "Xxxxx,"
"Contemporary Tables, Inc." and all related tradenames and trademarks and (b)
otherwise discontinue the use of such trademarks and tradenames in connection
with the business operations of the Sellers.
7.7 Defective Products. Except as otherwise provided in this Section
7.7, after the Closing Date, Acquisition Sub shall assume and perform all
liabilities and obligations of Xxxxx under any warranty to repair or replace
defective products shipped by Xxxxx on or prior to the Closing Date
(collectively, "Warranty Obligations"). For purposes of this Section 7.7,
Warranty Obligations for products that are defective or missing parts upon
receipt by a distributor, retailer or end-user are referred to as "Short-Term
Warranty Obligations" and Warranty Obligations for products that become
defective after use by an end-user are referred to as "Long-Term Warranty
Obligations." Acquisition Sub shall set off all Short-Term Warranty
Obligations arising within the three-month period following the Closing Date
against a reserve of $275,000 (the "Warranty Basket"), which shall not be
reflected on the Closing Statement. All Short-Term Warranty Obligations in
excess of the Warranty Basket and/or arising after the expiration of such
three-month period shall be the
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sole responsibility of Acquisition Sub. In the event that Long-Term Warranty
Obligations arising within the seven-year period following the Closing Date
exceed any amount remaining in the Warranty Basket at the end of the
three-month period following the Closing Date, the Sellers shall reimburse
Acquisition Sub for such excess. All Long-Term Warranty Obligations arising
more than seven years after the Closing Date shall be the sole responsibility
of Acquisition Sub. Acquisition Sub shall establish appropriate procedures and
maintain accurate records to ensure that the Warranty Obligations include only
liabilities and obligations for defective products shipped by Xxxxx on or
prior to the Closing Date ("Xxxxx Defective Products"). If Acquisition Sub is
unable to demonstrate that a particular defective product is in fact a Xxxxx
Defective Product, such product shall be deemed to have been manufactured
and/or sold by Acquisition Sub and the liabilities and obligations associated
with the repair or replacement of such product shall not constitute a Warranty
Obligation and shall be the sole responsibility of Acquisition Sub.
Furthermore, if Acquisition Sub is unable to demonstrate that a defective
product suffers from a manufacturing defect covered by a warranty offered by
Xxxxx, such as Xxxxx' current five-year warranty, the liabilities and
obligations associated with the repair or replacement of such product shall
not constitute a Warranty Obligation and shall be the sole responsibility of
Acquisition Sub. The liabilities and obligations associated with the repair or
replacement of products by Acquisition Sub for customer service reasons (such
as returns of overstocked products or products discontinued by the Purchasers
or a customer) shall not constitute Warranty Obligations and shall be the sole
responsibility of Acquisition Sub. Acquisition Sub's Warranty Obligations with
respect to a particular defective product shall be calculated based on the
standard cost of such defective product plus freight charges. During the term
of the Sellers' obligations under this Section 7.7, Acquisition Sub shall
provide Xxxx with a report, certified by an appropriate officer of Acquisition
Sub, within 30 days of the end of each calendar quarter setting forth the
amount of Warranty Obligations incurred by Acquisition Sub during such quarter
and the total amount of such Warranty Obligations incurred by Acquisition Sub
since the Closing Date which Acquisition Sub believes should be set off
against the Warranty Basket or reimbursed by the Sellers. The Sellers shall
pay the Purchasers the amount of any Long-Term Warranty Obligations
reimbursable to the Purchasers pursuant to this Section 7.7 during any
calendar quarter within 30 days of the date on which Acquisition Sub sent the
certified report for such quarter to Xxxx.
ARTICLE 8 - INDEMNIFICATION
8.1 Indemnification by the Sellers.
(a) Subject to Section 8.6 and 8.8, the Sellers shall
indemnify, defend and hold harmless the Purchasers against and in respect of
any and all losses, costs, expenses, claims, damages, obligations or
liabilities (collectively, "Damages"), arising out of, based upon or otherwise
in respect of:
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(i) any inaccuracy in or breach of any
representation or warranty of the Sellers made in this Agreement (other than
the representations and warranties set forth in Section 3.21 hereof), after
giving effect to any supplement or amendment to the Disclosure Letter accepted
or deemed to be accepted by the Purchasers as if all such supplements and
amendments were included in the Disclosure Letter delivered by the Sellers on
the date hereof;
(ii) any breach or nonfulfillment of any
covenant or obligation of the Sellers contained in this Agreement; or
(iii) any liability of the Sellers that is
not an Assumed Liability.
(b) The Sellers jointly and severally agree to indemnify,
defend, reimburse and hold harmless the Purchasers and their respective
directors, officers, representatives, employees and agents from and against
any and all Environmental Damages arising out of any conditions or events
existing or occurring on or prior to the Closing. This obligation to indemnify
shall include, but not be limited to, reasonable expenses of defending all
claims, suits and administrative proceedings, even if such claims, suits or
proceedings are groundless, false or fraudulent, and paying and discharging,
when and as the same become due, any and all judgments, penalties or other
sums due against such indemnified persons, in each such case in accordance
with Sections 8.3 and 8.4.
8.2 Indemnification by the Purchasers. Subject to Section 8.7 and
8.8, the Purchasers shall indemnify, defend and hold harmless the Sellers
against and in respect of any and all Damages arising out of, based upon or
otherwise in respect of: (a) any inaccuracy in or breach of any representation
or warranty of the Purchasers made in this Agreement; (b) any breach or
nonfulfillment of any covenant or obligation of the Purchasers contained in
this Agreement; (c) the Assumed Liabilities; or (d) any liabilities and
obligations (including, without limitation, environmental liabilities) arising
out of, based upon or related to the operation of the Business or the use of
the Assets by the Purchasers after the Closing Date.
8.3 Procedure For Indemnification - Third Party Claims.
(a) Within 30 days after receipt by an indemnified party of
notice of the commencement of any proceeding against it to which the
indemnification in this Article 8 relates, such indemnified party shall, if a
claim is to be made against an indemnifying party under this Article 8, give
notice to the indemnifying party of the commencement of such proceeding, but
the failure to so notify the indemnifying party will not relieve the
indemnifying party of any liability that it may have to the indemnified party,
except to the extent that the indemnifying party demonstrates that the defense
of such proceeding is materially prejudiced by the indemnified party's failure
to give such notice.
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(b) If any proceeding referred to in paragraph (a) above is
brought against an indemnified party and it gives notice to the indemnifying
party of the commencement of such proceeding, the indemnifying party will be
entitled to participate in such proceeding and, to the extent that it wishes
(unless the indemnifying party is also a party to such proceeding and the
indemnified party determines in good faith that joint representation would be
inappropriate), to assume the defense of such proceeding with counsel
reasonably satisfactory to the indemnified party. If the indemnifying party
elects to assume the defense of a proceeding, the indemnifying party shall not
be liable to the indemnified party for any fees of other counsel or any other
expenses in each case subsequently incurred by such indemnified party in
connection with the defense thereof, except as provided below. If the
indemnifying party elects not to exercise its rights to assume the settlement
or defense of such claims, the indemnified party may, but shall have no
obligation to, defend against such claims or legal proceeding in such manner
as it may deem appropriate at the expense of the indemnifying party. If the
indemnifying party assumes such defense, the indemnified party will have the
right to participate in the defense thereof and to employ counsel, separate
from the counsel employed by the indemnifying party, at its own expenses,
provided, however, that if the indemnified party is, in the judgment of its
counsel, entitled to assert a defense which conflicts with a defense of the
indemnifying party or which the indemnifying part is not entitled to assert
for any reason, the indemnifying party shall be liable for the fees and
expenses of counsel employed by the indemnified party for such purpose. The
indemnifying party shall be liable for the fees and expenses of counsel
employed by the indemnified party for any period during which the indemnifying
party has not assumed the defense of such claim whether or not the
indemnifying party ultimately chooses to defend any such claim. In connection
with any claim, the defense of which has been assumed by the indemnifying
party hereby, the indemnifying party agrees to keep the indemnified party
reasonably informed of the status thereof at all stages including providing to
the indemnified party copies of all pleadings and other material papers and
correspondence in connection with such claim.
(c) Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that a
proceeding may adversely affect it or its affiliates other than as a result of
monetary damages for which it would be entitled to indemnification under this
Agreement, the indemnified party may, with respect to those issues, by notice
to the indemnifying party, participate in the defense, compromise, or
settlement of such proceeding, but the indemnifying party will not be bound by
any determination of a proceeding so defended or any compromise or settlement
effected without its consent.
8.4 Procedure for Indemnification -- Investigation
or Remediation of Xxxxxxxx Property.
(a) Within a reasonable time after learning of facts
indicating that environmental investigation or remediation of the Xxxxxxxx
Property is required, the Purchasers shall notify the Sellers of such facts.
With respect to any such investigation or remediation matter at the Xxxxxxxx
Property for which the Sellers are indemnifying the
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Purchasers, the Purchasers shall have the right to control such investigation
and/or remediation; provided, however, that the Purchasers shall not be
entitled to any indemnification under Section 8.1(a)(iii) or Section 8.1(b)
for any investigation or remediation activities unless the Sellers shall have
been notified of, and approved, such activities, such approval not to be
unreasonably withheld or delayed. The Sellers shall have the right, at their
sole expense, to observe and discuss with the Purchasers any such activities
with respect to the Xxxxxxxx Property, including, without limitation,
participation in any meetings with regulatory authorities with respect to the
investigation or remediation. The Purchasers shall promptly provide copies to
the Sellers of all notices, correspondence, draft reports and final reports
related to such matter.
(b) The Sellers' duty to indemnify the Purchasers for
Environmental Damages related to the investigation or remediation of Hazardous
Materials that have been released to the environment at or from the Xxxxxxxx
Property shall be as follows:
(i) The Sellers shall only be required to
indemnify, defend, reimburse and hold harmless the Purchasers and their
respective directors, officers, representatives, employees and agents with
respect to the investigation or remediation of the Xxxxxxxx Property if said
investigation or remediation is required by any applicable Environmental
Requirement.
(ii) For the purposes of this Section 8.4,
Environmental Damages shall not include: (A) any losses, liabilities, damages,
costs or expenses related to remediating the Xxxxxxxx Property to any standard
more stringent than the minimum requirements of any regulatory agency
asserting jurisdiction (which may include risk based standards) as long as
such remediation does not result in a material interference with the
Purchasers' office furniture manufacturing operations on the Xxxxxxxx
Property, in which case Environmental Damages shall include costs of
remediating the Xxxxxxxx Property using the most cost effective alternative
permitted by the regulatory agency that does not result in such an
interference; or (B) any losses, liabilities, damages, costs or expenses
related to diminution of value of the Xxxxxxxx Property.
8.5 Procedure for Indemnification - Other Claims. A claim for any
matter not involving a third party claim may be asserted by notice to the
party from whom indemnification is sought.
8.6 Limitations on Sellers' Indemnification.
(a) In the absence of fraud or intentional misrepresentation
by the Sellers, no claim for indemnification pursuant to Section 8.1(a)(i)
shall be made unless a claim arises and written notice pursuant to Section 8.3
or 8.5 is delivered to the Sellers within 18 months of the Closing Date (the
"Claims Close Date"), provided that a claim for indemnification related to
Sellers' breach of Section 3.7 may be made at any time and a claim for
indemnification related to the Sellers' breach of Section 3.15 may be made at
any time prior
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to the date that is 90 days after the expiration of the relevant statute of
limitations (and any waiver or extensions thereof).
(b) In the absence of fraud or intentional misrepresentation
by the Sellers, the Sellers shall have no indemnification obligation to the
Purchasers pursuant to Section 8.1(a)(i) unless and until the total amount of
all of the Purchasers' Damages covered by Section 8.1(a)(i) exceeds $550,000,
at which point the Sellers' indemnification obligations will cover all such
Damages of the Purchasers. The aggregate indemnification liability of the
Sellers under Section 8.1(a)(i) shall not exceed $9,200,000.
8.7 Limitations on Purchasers' Indemnification. In the absence of
fraud or intentional misrepresentation by the Purchasers, no claim for
indemnification pursuant to Section 8.2(a) shall be made unless a claim arises
and written notice pursuant to Section 8.3 or 8.5 is delivered to the
Purchasers on or before the Claims Close Date.
8.8 Effect of Tax Recovery. The amount of Damages subject to
indemnification under this Article 8 shall be reduced by the amount, if any,
of the present value of any Tax benefit (net of reasonable expenses and other
costs incurred in obtaining said benefit and the present value of any Tax
detriment that is, or is reasonably expected to be, incurred by the
indemnified party as a consequence of the receipt of any indemnity payment
pursuant to Article 8 hereof) which the indemnified party under this Agreement
shall receive or otherwise enjoy with respect to the event that triggered the
Damages.
8.9 Exclusive Remedy. Except as provided in Section 7.5 hereof, in
the absence of fraud or intentional misrepresentation, following the Closing
each party's indemnification obligations under this Article 8 shall be the
other parties' sole and exclusive remedy with respect to any claim for Damages
or Environmental Damages arising from any breach or non-compliance with any
term of this Agreement or the transactions contemplated hereby.
8.10 Adjustment to the Purchase Price. Any payments made pursuant to
Sections 8.1 and 8.2 will be treated by the Sellers and the Purchasers as an
adjustment to the Purchase Price unless a determination (as defined in Section
1313 of the Code) with respect to the indemnified party causes any such
payment not to constitute an adjustment to the Purchase Price for United
States federal income tax purposes.
ARTICLE 9 - MISCELLANEOUS
9.1 Termination.
(a) Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated by written notice of
termination at any time before the Closing Date only as follows:
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(i) by mutual consent of the Sellers and the
Purchasers;
(ii) by the Purchasers at any time if any
representation or warranty of the Sellers contained in Article 3 hereof is
incorrect in any material respect, or if the Sellers breach any material
covenant contained in this Agreement;
(iii) by the Sellers at any time if any
representation and warranty of the Purchasers contained in Article 4 hereof is
incorrect in any material respect or if the Purchasers breach any material
covenant contained in this Agreement; or
(iv) by either the Purchasers or the Sellers
if the transactions contemplated hereby have not been consummated by January
15, 1998; provided that neither the Purchasers nor the Sellers shall be
entitled to terminate this Agreement pursuant to this Section 9.1(a)(iv) if
such person's breach of this Agreement has prevented the consummation of the
transactions contemplated hereby.
(b) In the event of the termination of this Agreement
pursuant to the provisions of this Section, this Agreement shall become void
and have no effect, without any liability on the part of any of the parties or
their directors or officers or stockholders in respect of this Agreement,
except that the termination shall not relieve a breaching party from liability
incurred for the willful breach of this Agreement.
9.2 Survival. All representations and warranties of the parties
contained in this Agreement shall survive until the Claims Close Date.
9.3 Compliance with Bulk Sales Laws. The Purchasers and the Sellers
hereby waive compliance by the Purchasers and the Sellers with the bulk sales
law and any other similar laws in any applicable jurisdiction in respect of
the transactions contemplated by this Agreement.
9.4 Expenses.
(a) Except as otherwise expressly provided herein, each
party hereto shall pay its own expenses, including, without limitation, the
fees and expenses of its counsel, incurred in connection with this Agreement
and the transactions contemplated hereby.
(b) The Purchasers shall pay all federal, state and local
sales, documentary and other transfer taxes, if any, due as a result of the
purchase, sale or transfer of the Assets in accordance herewith whether
imposed by law on the Sellers or the Purchasers.
9.5 Waivers. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach.
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9.6 Assignment; Binding Effect; Benefits. No party hereto shall
assign this Agreement or any rights hereunder, or delegate any obligations
hereunder, without the prior written consent of the other parties hereto. This
Agreement shall inure to the benefit of the parties hereto, and shall be
binding upon the parties hereto and their respective permitted successors and
assigns. Nothing in this Agreement, express or implied, is intended to confer
on any person other than the parties hereto, or their respective permitted
successors and assigns, any rights, remedies, obligations or liabilities under
or by reason of this Agreement.
9.7 Guarantees.
(a) In order to induce the Purchasers to enter into this
Agreement, Xxxx guarantees, as a primary obligor and not merely as a surety,
the performance of all of the obligations of Xxxxx hereunder in accordance
with the terms hereof.
(b) In order to induce the Sellers to enter into this
Agreement, HON guarantees, as a primary obligor and not merely as a surety,
the performance of all of the obligations of Acquisition Sub hereunder in
accordance with the terms hereof.
9.8 Confidentiality. Subject to Section 1.2(g) and (h) and Section
7.5, the Sellers shall, and shall cause their affiliates, officers, employees,
representatives, consultants and advisors to, hold in confidence any
confidential information which remains after Closing in the possession of the
Sellers or their affiliates relating primarily to the Business and the Assets.
The Sellers shall not release or disclose any such information to any person
or entity other than the Purchasers and their authorized representatives.
Notwithstanding the foregoing, the confidentiality obligations of this Section
9.8 shall not apply to information:
(a) which the Sellers are compelled to disclose by judicial
or administrative process, or, in the opinion of counsel, by other mandatory
requirements of law or applicable securities exchange rule;
(b) which can be shown to have been generally available to
the public other than as a result of a breach of this Section 9.8; or
(c) which can be shown to have been provided to the Sellers
by a third party who obtained such information other than from the Sellers or
other than as a result of a breach of this Section 9.8.
9.9 Entire Agreement. This Agreement (including the Schedules hereto)
and the documents delivered pursuant hereto constitute the entire agreement
and understanding between the parties hereto as to the matters set forth
herein and supersede and revoke all prior agreements and understandings, oral
and written, between the parties hereto or otherwise with respect to the
subject matter hereof except the Confidentiality Agreement between HON and The
Xxxxxxxxxx Group on behalf of Xxxx dated February 24, 1997. No change,
amendment, termination or attempted waiver of any of the provisions hereof
shall be
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binding upon any party unless set forth in an instrument in writing signed by
the party to be bound or their respective successors in interest.
9.10 Notices. All notices, consents or other communications required
or permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally, delivery charges
prepaid, or three business days after being sent by registered or certified
mail (return receipt requested), postage prepaid, or one business day after
being sent by a nationally recognized express courier service, postage or
delivery charges prepaid, to the parties at their respective addresses stated
below. Notices may also be given by prepaid telegram or facsimile and shall be
effective on the date transmitted if confirmed within 24 hours thereafter by a
signed original sent in the manner provided in the preceding sentence. Any
party may change its address for notice and the address to which copies must
be sent by giving notice of the new address to the other parties in accordance
with this Section 9.10, except that any such change of address notice shall
not be effective unless and until received.
If to the Purchasers, to:
HON Industries, Inc.
000 Xxxx Xxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxx, Vice President and CFO
000-000-0000
000-000-0000 (facsimile)
With a required copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
00 Xxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxxxx X. Xxxxxxxx
000-000-0000
000-000-0000 (facsimile)
If to the Sellers, to:
Xxxx Manufacturing Co.
One Commerce Square
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Senior Vice President, Finance
000-000-0000
000-000-0000 (facsimile)
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With a required copy to:
Drinker Xxxxxx & Xxxxx LLP
Philadelphia National Bank Building
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxxx, Xx.
000-000-0000
000-000-0000 (facsimile)
9.11 Governing Law. This Agreement shall be governed by and
interpreted and enforced in accordance with the laws of the Commonwealth of
Pennsylvania without giving effect to otherwise applicable principles of
conflicts of law.
9.12 Headings, Gender and "Person". All section headings contained in
this Agreement are for convenience of reference only, do not form a part of
this Agreement and shall not affect in any way the meaning or interpretation
of this Agreement. Words used herein, regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine, or neuter, as
the context requires. Any reference to a "person" herein shall include an
individual, firm, corporation, partnership, trust, governmental authority or
body, association, unincorporated organization or any other entity.
9.13 Severability. Any provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall be ineffective to the extent of
such invalidity or unenforceability without invalidating or rendering
unenforceable the remaining provisions hereof and, with respect to Section 7.5
only, shall be automatically amended to effect the original purpose and intent
of the invalid or unenforceable provision. Any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.14 Counterparts. This Agreement may be executed in any number of
counterparts and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument. This Agreement shall become binding when one or more counterparts
taken together shall have been executed and delivered by the parties. It shall
not be necessary in making proof of this Agreement or any counterpart hereof
to produce or account for any of the other counterparts.
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized representatives to execute this Agreement on the date first
written.
ATTEST: HON INDUSTRIES INC.
By: By:
------------------------------------ ---------------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President, General Title: Vice President and CFO
Counsel and Secretary
ATTEST: AHC INC.
By: By:
------------------------------------ ---------------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxx
Title: Secretary Title: Vice President
ATTEST: XXXX MANUFACTURING CO.
By: By:
------------------------------------ ---------------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxxxx X. X'Xxxxx
Title: Secretary Title: Executive Vice President
ATTEST: XXXXX CUSTOM FURNITURE, INC.
By: By:
------------------------------------ ---------------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxxxx X. X'Xxxxx
Title: Assistant Secretary Title: President
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INDEX OF DEFINED TERMS
Accounts Receivable..................................................2
Acquisition Sub ...................................................1
Assets ...................................................1
Assumed Liabilities..................................................6
Xxxxx ...................................................1
Xxxxx Defective Products............................................33
Business ...................................................1
Certified Net Worth..................................................5
Claims Close Date ..................................................36
Closing ...................................................8
Closing Date ...................................................9
Closing Payment ...................................................4
Closing Statement ...................................................5
COBRA ..................................................27
Code ...................................................4
Competing Entity ..................................................31
Consents ...................................................8
Contracts ...................................................2
Damages ..................................................33
Environmental Damages...............................................19
Environmental Requirements..........................................19
ERISA ..................................................13
Excluded Assets ...................................................3
Financial Statements................................................12
Xxxxxxxx Property ...................................................2
GAAP ...................................................4
Governmental Authorities.............................................3
Hazardous Material..................................................19
HON ...................................................1
HSR Act ..................................................12
Xxxx ...................................................1
Intellectual Property................................................2
Liens ...................................................9
Long-Term Warranty Obligations......................................32
Material Adverse Effect.............................................11
Net Worth ...................................................5
Nonassignable Items..................................................8
Permits ...................................................3
Permitted Liens ..................................................13
Person ...................................................8
Purchase Price ...................................................4
Purchaser Employee Benefits.........................................27
Purchaser Transaction Documents.....................................20
Purchasers ...................................................1
Records ...................................................2
Seller Severance Program............................................28
Seller Transaction Documents........................................11
Sellers ...................................................1
Short-Term Warranty Obligations.....................................32
Tax ..................................................16
Tax Returns ..................................................17
Transferred Employee................................................27
WARN Act ..................................................29
Warranty Basket ..................................................32
Warranty Obligations................................................32
