STOCK PURCHASE AGREEMENT
dated as of
May 17, 2002
among
HEARTLAND INDUSTRIAL PARTNERS, L.P.,
TRIMAS CORPORATION
and
METALDYNE CORPORATION
relating to the issuance and purchase
of Common Stock
of
TRIMAS CORPORATION
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions....................................................1
ARTICLE 2
ISSUANCE AND PURCHASE
SECTION 2.01. Issuance and Purchase.........................................11
SECTION 2.02. Closing.......................................................11
SECTION 2.03. Closing Obligations...........................................12
SECTION 2.04. Treatment of Parent Options and Restricted Stock
Awards Held by Employees of the Company....................12
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01. Corporate Existence and Power.................................13
SECTION 3.02. Corporate Authorization.......................................13
SECTION 3.03. Governmental Authorization....................................14
SECTION 3.04. Non-Contravention.............................................14
SECTION 3.05. Capitalization................................................14
SECTION 3.06. Company Subsidiaries..........................................15
SECTION 3.07. Financial Statements..........................................15
SECTION 3.08. Absence of Certain Changes....................................16
SECTION 3.09. No Undisclosed Material Liabilities...........................16
SECTION 3.10. Compliance with Laws and Court Orders.........................16
SECTION 3.11. Litigation....................................................16
SECTION 3.12. Finders' Fee..................................................17
SECTION 3.13. Taxes.........................................................17
SECTION 3.14. Employee Benefit Plans........................................17
SECTION 3.15. Financing.....................................................19
SECTION 3.16. Disclaimer of Other Representations and Warranties............19
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT
SECTION 4.01. Corporate Existence and Power.................................20
SECTION 4.02. Corporate Authorization.......................................20
SECTION 4.03. Governmental Authorization....................................20
SECTION 4.04. Non-Contravention.............................................21
SECTION 4.05. SEC Filings...................................................21
SECTION 4.06. Preemptive Rights.............................................21
SECTION 4.07. Disclaimer of Other Representations and Warranties............21
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
SECTION 5.01. Partnership Existence and Power...............................22
SECTION 5.02. Partnership Authorization.....................................22
SECTION 5.03. Governmental Authorization....................................22
SECTION 5.04. Non-Contravention.............................................22
SECTION 5.05. Fees..........................................................23
SECTION 5.06. Other Buyer Representation and Warranties.....................23
ARTICLE 6
COVENANTS OF PARENT AND THE COMPANY
SECTION 6.01. Amendment and Restatement of Articles of Incorporation
and By-laws................................................24
SECTION 6.02. Contribution of Capital Stock of Subsidiaries.................24
SECTION 6.03. Declaration and Payment of Dividend...........................24
SECTION 6.04. Repayment of Debt.............................................24
SECTION 6.05. Financing Arrangements........................................24
SECTION 6.06. Conduct of the Company........................................25
SECTION 6.07. Access to Information.........................................26
SECTION 6.08. Reports.......................................................27
SECTION 6.09. Other Agreements..............................................27
SECTION 6.10. Debt Repayment................................................27
SECTION 6.11. Expenses Indemnification......................................27
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ARTICLE 7
COVENANTS OF BUYER, PARENT AND THE COMPANY
SECTION 7.01. Commercially Reasonable Efforts...............................27
SECTION 7.02. Certain Filings...............................................28
SECTION 7.03. Public Announcements..........................................29
SECTION 7.04. Notices of Certain Events.....................................29
SECTION 7.05. Confidentiality...............................................29
SECTION 7.06. Intercompany Accounts.........................................30
SECTION 7.07. Intercompany Agreements; Guarantees...........................30
SECTION 7.08. Tax Matters...................................................31
SECTION 7.09. Plans.........................................................34
ARTICLE 8
CONDITIONS TO CLOSING
SECTION 8.01. Conditions to Obligations of Each Party.......................40
SECTION 8.02. Conditions to the Obligations of Buyer........................41
SECTION 8.03. Conditions to the Obligations of Parent.......................41
ARTICLE 9
OBLIGATIONS AFTER CLOSING
SECTION 9.01. Indemnification...............................................42
SECTION 9.02. Treatment of Shared Contracts.................................43
SECTION 9.03. Procedures....................................................43
SECTION 9.04. Limitations on Indemnification................................43
ARTICLE 10
TERMINATION
SECTION 10.01. Termination...................................................44
SECTION 10.02. Effect of Termination.........................................45
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ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Notices.......................................................45
SECTION 11.02. Survival of Representations and Warranties....................46
SECTION 11.03. Amendments; No Waivers........................................46
SECTION 11.04. Expenses......................................................47
SECTION 11.05. Successors and Assigns........................................47
SECTION 11.06. Governing Law.................................................47
SECTION 11.07. WAIVER OF JURY TRIAL..........................................47
SECTION 11.08. Counterparts; Effectiveness...................................47
SECTION 11.09. Entire Agreement..............................................47
SECTION 11.10. Captions......................................................47
SECTION 11.11. Severability..................................................48
EXHIBITS
Exhibit A - Form of Corporate Services Agreement
Exhibit B - Form of Shareholders Agreement
Exhibit C - Form of Warrant
Exhibit D - Form of Monitoring Agreement
Exhibit E - Form of Amended and Restated TriMas Articles of Incorporation
Exhibit F - Form of Amended and Restated TriMas By-laws
SCHEDULES
Schedule 1.01(a) - Liabilities
Schedule 1.01(b) - Other Liabilities
Schedule 1.01(c) - Employees
Schedule 1.01(d) - Knowledge of Officers
Schedule 3.03 - Filings, Notices and Reports
Schedule 3.04 - Non-Contravention
Schedule 3.06(b) - Company Subsidiaries
Schedule 3.11 - Litigation
Schedule 3.13 - Taxes
Schedule 4.04 - Non-Contravention
Schedule 7.07(a) - Internal Indemnities
Schedule 7.07(b) - Shared Contracts
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Schedule 7.07(c) - Guarantees
Schedule 7.09(c)(iii) - Actuarial Assumptions
Schedule 7.09(d)(i) - Parent's Savings Plans
Schedule 7.09(d)(ii) - Stand-Alone Plans
Schedule 7.09(e) - Collective Bargaining Agreements
Schedule 7.09(f)(i) - Employment Agreements
Schedule 7.09(f)(iii) - Foreign Plans
Schedule 8.01 - Parent Credit Agreement Modifications Summary
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STOCK PURCHASE AGREEMENT
AGREEMENT dated as of May 17, 2002 among Heartland Industrial Partners,
L.P. ("Buyer"), TriMas Corporation ("TriMas" or the "Company"), a Delaware
corporation and an indirect wholly-owned subsidiary of Metaldyne Corporation, a
Delaware corporation ("Parent"), and Parent.
W I T N E S S E T H :
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WHEREAS, TriMas is engaged itself and through its subsidiaries, in the
manufacture, sale and distribution of commercial, industrial and consumer
products; and
WHEREAS, the Company desires to issue and Buyer desires to purchase
13,250,000 authorized but unissued shares of common stock, par value $0.01 per
share (the "Common Stock"), of the Company for the consideration and on the
terms set forth in this Agreement; and
WHEREAS, the respective Boards of Directors of Parent and the Company and
the General Partner of Buyer have each approved, as applicable, the issuance and
sale of the Shares to Buyer pursuant to the terms of this Agreement, the
Financing Agreements, the declaration and payment of the dividend described
herein, the payment by the Company and the Company Subsidiaries of the Pay Down
Amount, the Subsidiary Drop Down and the other transactions contemplated hereby
(all as described or defined herein and collectively, the "Transactions");
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
herein made, and in consideration of the representations, warranties and
covenants herein contained, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) The following terms, as used herein, have
the following meanings:
"Action" means any action, claim, suit, arbitration, subpoena, discovery
request, proceeding or investigation by or before any court or grand jury, any
Governmental Authority or arbitration tribunal.
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such Person
including by management contract or similar instrument.
"Antitrust Laws" means the Xxxxxxx Act, as amended, the Xxxxxxx Act, as
amended, the HSR Act, the Federal Trade Commission Act, as amended, and all
other federal, state and foreign statutes, rules, regulations, orders, decrees,
administrative and judicial doctrines and other laws that are designed or
intended to prohibit, restrict or regulate actions having the purpose or effect
of monopolization or restraint of trade or lessening of competition through
merger or acquisition.
"Benefit Plan" means any Plan, other than a Multiemployer Plan or a Foreign
Plan, existing on the Closing Date established or to which contributions have at
any time been made by the Company or any Company Subsidiary, or any predecessor
of the Company or any Company Subsidiary, or with respect to which the Company
or any Company Subsidiary is a party, under which any employee, former employee
or director of the Company or any Company Subsidiary, or any beneficiary
thereof, is covered, is eligible for coverage or has benefit rights in respect
of service to the Company or any Company Subsidiary and any other Plan with
respect to which the Company or any Company Subsidiary currently has liability.
"Board of Directors" means the Board of Directors of Parent or the Company,
as the case may be.
"Business Day" means a day other than Saturday, Sunday or any other day on
which commercial banks in New York, New York are authorized or required by law
to close.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the common stock, par value $0.01 per share, of the
Company.
"Commonwealth Business" means an unincorporated division of the Company
formerly engaged in an automotive related business whose operations have been
discontinued.
"Company Balance Sheet" means the unaudited consolidated balance sheet of
the Company and the Company Subsidiaries as of March 31, 2002 and the footnotes
thereto.
"Company Balance Sheet Date" means March 31, 2002.
"Company Liabilities" means any and all Liabilities of Parent or any of its
Subsidiaries of any kind or nature to the extent resulting from or arising out
of the present,
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past or future operation or conduct of the business, operations and assets of
the Company or of any Company Subsidiary, and shall mean:
(i) all environmental, health or other Liabilities of any kind and
nature to the extent arising from the businesses, operations and assets of
the Company or the Company Subsidiaries whenever such businesses,
operations or assets shall have been conducted or owned by the Company or
any Company Subsidiary and regardless of whether such Liabilities shall
arise prior to, on or after the date hereof, including without limitation,
those Company Liabilities set forth on Schedule 1.01(a);
(ii) 42.01% of any Liabilities described in Schedule 1.01(b);
(iii) the Company's portion, determined pursuant to Section 9.02
hereof, of Shared Contractual Liabilities;
(iv) all Liabilities arising from acquisitions by the Company or any
Company Subsidiary of any business or former business of the Company or any
Company Subsidiary or from the acquisition agreements and other related
documents entered into in connection with such acquisitions whether such
Losses shall arise prior to, on or after the date hereof;
(v) all Liabilities arising from acquisitions by Parent or any of
Parent's Subsidiaries of any business or assets or former business or
former assets of the Company or any of the Company Subsidiaries or from the
acquisition agreements and other related documents entered into in
connection with such acquisitions whether such Liabilities shall arise
prior to, on or after the date hereof;
(vi) all Liabilities arising from or under the MascoTech, Inc. Key
Employee Retention Plan to the extent such Liabilities relate to
Transferred Employees who participate in such plan;
(vii) all Losses incurred by Parent arising from the failure of the
Company to perform any of its obligations set forth in Section 7.08 and
Section 7.09;
(viii) all Liabilities arising from actions taken by employees of
Parent or its Subsidiaries for or on behalf of the Company or any Company
Subsidiary arising from the provision of services under the Corporate
Services Agreement or services otherwise provided by Parent or its
Subsidiaries for or on behalf of the Company and the Company Subsidiaries
after the Closing;
(ix) all Liabilities arising from the financing by the Company of the
Transactions (including, without limitation, any representation of the
Company in connec-
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tion with the Facilities or the Senior Subordinated Notes and any
registration of securities in connection therewith); and
(x) all Liabilities not otherwise covered in the preceding clauses (i)
through (ix) or in Section 9.01(c) or Section 9.02 that the chief executive
officer of Parent determines to be Liabilities of the Company or any
Company Subsidiary such determination being conclusively binding on the
Company and the Company Subsidiaries and 42.01% of all other Liabilities
not so covered and not so determined to be Liabilities of the Company or
the Company Subsidiaries, including without limitation any Liabilities
arising from events occurring prior to the Closing not associated or
attributable to either the present or former business of the Company or the
Company Subsidiaries, on the one hand, or the present or former business of
Parent or any of its Subsidiaries, on the other.
For purposes of this definition, "former business" of the Company, or any
Company Subsidiary shall not include any such former business which was
conducted by Parent or any of its Subsidiaries for the sole benefit of Parent or
any of its Subsidiaries (other than the Company or any Company Subsidiary) after
such former business was conducted by the Company or any Company Subsidiary.
"Company Subsidiary" means any Subsidiary of the Company.
"Corporate Employees" means the corporate level employees or former
employees of Parent who are listed or referred to in Part I of Schedule 1.01(c)
and, therefore, allocated to the Company and the Company Subsidiaries for
purposes of responsibility for any retiree health obligations, severance
obligations and restricted stock redemption expenses, as set forth in this
Agreement.
"Corporate Services Agreement" means the Corporate Services Agreement
between Parent and the Company to be dated as of the Closing Date and containing
substantially the terms set forth in Exhibit A attached hereto.
"Employees" means employees employed by the Company or one of the Company
Subsidiaries on the Closing Date.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" of any Person means any other Person that, together with
such Person, would be treated as a single employer under Section 414 of the
Code.
"Fairness Opinion" means the Fairness Opinion of Valuation Research
Corporation, as to the fairness, from a financial point of view, of the
consideration received by
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Parent and the financial terms of the documents entered into in connection with
the Transactions.
"Former Employee" means (a) any person whose employment by the Company or
one of the Company Subsidiaries was terminated on or before the Closing Date
(whether by retirement or otherwise), excluding persons who were employed by
Parent or one of its Subsidiaries (other than the Company or any Company
Subsidiary) subsequent to such termination prior to the Closing Date, and (b) an
Employee who is on short-term medical disability as of the Closing Date and who
thereafter becomes eligible for long-term medical disability.
"General Partner of Buyer" means Heartland Industrial Associates L.L.C.
"Governmental Authority" means any federal, state or local government or
any court, administrative agency or commission or other governmental or
regulatory agency, authority or official, whether domestic, foreign or
supranational.
"Guarantee" means a direct or indirect guarantee (other than by endorsement
of negotiable instruments for collection) by any Person of any indebtedness of
any other Person and includes any obligation, direct or indirect, contingent or
otherwise, of such Person: (1) to purchase or pay (or advance or supply funds
for the purchase or payment of) indebtedness of such other Person (whether
arising by virtue of partnership arrangements, or by agreements to keep-well, to
purchase assets, goods, securities or services (unless such purchase
arrangements are on arm's-length terms and are entered into in the ordinary
course of business), to take-or-pay, or to maintain financial statement
conditions or otherwise); or (2) entered into for purposes of assuring in any
other manner the obligee of such indebtedness of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part). The
amount of any Guarantee of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations in respect of which such
Guarantee is made and the maximum liability of such other Person for any such
contingent obligations in respect of which such Guarantee is made at such date.
"Guarantee," when used as a verb, and "Guaranteed" have correlative meanings.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.
"knowledge" of the Company means the actual knowledge of the senior
officers of the Company listed on Schedule 1.01(d) attached hereto.
"Liabilities" means any and all indebtedness, liabilities or obligations,
whether accrued, fixed or contingent, mature or inchoate, known or unknown,
reflected on a balance sheet or otherwise, including, but not limited to, those
arising under any law, rule, regulation,
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Action, order, injunction or consent decree of any Governmental Authority or any
judgment of any court of any kind or any award of any arbitrator of any kind,
and those arising under any contract, commitment or undertaking.
"Lien" means, with respect to any property or asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
property or asset.
"Losses" means any and all damages, losses, deficiencies, Liabilities,
obligations, penalties, judgments, settlements, claims, payments, fines,
interest, costs and expenses (including, without limitation, the costs and
expenses of any and all Actions and demands, assessments, judgments, settlements
and compromises relating thereto and the reasonable costs and expenses of
attorneys', accountants', consultants' and other professionals' fees and
expenses incurred in the investigation or defense thereof or the enforcement of
rights hereunder), including direct and consequential damages, but excluding
punitive damages (other than punitive damages awarded to any third party against
an Indemnified Party).
"Material Adverse Effect" means either (i) a material adverse effect on the
condition (financial or otherwise), business or results of operations of the
Company and the Company Subsidiaries, taken as a whole, or (ii) an effect which
is materially adverse to the ability of the Company to consummate the
Transactions; provided that with respect to subclause (i) of this definition,
any such effect resulting or arising from (w) this Agreement or the Transactions
contemplated hereby or the announcement thereof, (x) changes in circumstances or
conditions affecting industrial manufacturing companies in general, and not
specifically relating to the Company and the Company Subsidiaries, (y) changes
in general economic, regulatory or political conditions or in financial markets
in the United States or Europe or (z) changes in generally accepted accounting
principles shall not be considered a Material Adverse Effect, and with respect
to subclause (ii) of this definition, any such effect resulting or arising from
subclause (x), (y) or (z) above shall not be considered a Material Adverse
Effect.
"Material Subsidiary" means, with respect to any Person, a Subsidiary that
would constitute a "significant subsidiary" of such Person within the meaning of
Rule 1-02 of Regulation S-X under the 1934 Act.
"Monitoring Agreement" means the Monitoring Agreement between Heartland
Industrial Group LLC and the Company to be dated as of the Closing Date and
containing substantially the terms set forth in Exhibit D attached hereto.
"Multiemployer Plan" means a multiemployer plan within the meaning of
Section 4001(a)(3) of ERISA with respect to which the Company has an obligation
to contribute or has or could have withdrawal liability under Section 4201 of
ERISA.
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"1933 Act" means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
"Officer's Certificate" means a certificate signed by an officer of Parent
or the Company, as the case may be and, in the case of Buyer, the managing
member of the General Partner of Buyer.
"Parent Credit Agreement" means the Metaldyne Credit Agreement dated as of
November 28, 2000, among Metaldyne Corporation (f/k/a MascoTech, Inc.), the
subsidiary term borrowers party thereto and Chase Manhattan Bank, as
Administrative Agent.
"Parent Liabilities" means any and all Liabilities of the Company or any
Company Subsidiary of any kind or nature to the extent resulting from or arising
out of the present, past or future operation or conduct of the business,
operations and assets of Parent or any of Parent's Subsidiaries (other than the
Company and any Company Subsidiary), and shall mean:
(i) all environmental, health or other Liabilities of any kind and
nature to the extent arising from the businesses, operations and assets of
Parent or any of Parent's Subsidiaries (other than the Company and any
Company Subsidiary) whenever such businesses, operations or assets shall
have been conducted or owned and regardless of whether such Liabilities
shall arise prior to, on or after the date hereof, including without
limitation, those Parent Liabilities set forth on Schedule 1.01(a);
(ii) 57.99% of any Liabilities described in Schedule 1.01(b);
(iii) Parent's portion, determined pursuant to Section 9.02 hereof, of
Shared Contractual Liabilities;
(iv) all Liabilities arising from acquisitions by Parent or any of
Parent's Subsidiaries (other than the Company and any Company Subsidiary)
of any business or former business of Parent or any of Parent's
Subsidiaries (other than the business of the Company and any Company
Subsidiary) or from the acquisition agreements and other related documents
entered into in connection with such acquisitions whether such Liabilities
shall arise prior to, on or after the date hereof;
(v) all Losses incurred by the Company arising from the failure of
Parent to perform any of its obligations set forth in Section 7.08 and
Section 7.09; and
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(vi) all Liabilities not otherwise covered in the preceding clauses
(i) through (v) or in Section 9.01(c) or Section 9.02 that the chief
executive officer of Parent determines to be Liabilities of Parent or any
of its Subsidiaries (other than the Company or the Company Subsidiaries)
such determination being conclusively binding on Parent and its
Subsidiaries and 57.99% of all other Liabilities not so covered and not so
determined to be Liabilities of Parent or any of its Subsidiaries (other
than the Company or the Company Subsidiaries), including, without
limitation, any Liabilities arising from events occurring prior to the
Closing not associated or attributable to either the present or former
business of the Company or the Company Subsidiaries, on the one hand, or
the present or former business of Parent or any of its Subsidiaries (other
than the Company or the Company Subsidiaries), on the other.
For purposes of this definition, "former business" of Parent or any of its
Subsidiaries (other than the Company or the Company Subsidiaries) shall not
include any such former business which was conducted by the Company or any
Company Subsidiary for the sole benefit of the Company or any Company Subsidiary
after such former business was conducted by Parent or any of its Subsidiaries
(other than the Company or the Company Subsidiaries).
"Parent Receivables Purchase Agreement" means the Receivables Purchase
Agreement as amended and supplemented, dated as of November 28, 2000 by and
among Metaldyne Corporation (f/k/a MascoTech, Inc.), the Sellers party thereto
and MTSPC, Inc.
"Parent Shareholders Agreement" means the Shareholders Agreement by and
among Metaldyne Corporation (f/k/a MascoTech, Inc.), Masco Corporation, Xxxxxxx
Xxxxxxxxx, the Xxxxxxx and Xxxx Xxxxxxxxx Foundation, the Heartland entities
listed on the signature pages thereto and the HIP Co-Investors listed on the
signature pages thereto, dated as of November 28, 2000, as amended.
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to Section 4002 of ERISA, or any successor thereto.
"Person" means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
Governmental Authority.
"Plan" means any bonus, incentive compensation, deferred compensation,
pension, profit sharing, retirement, stock purchase, stock option, stock
ownership, stock appreciation rights, phantom stock, leave of absence, layoff,
vacation, day or dependent care, legal services, cafeteria, life, health,
accident, disability, workmen's compensation or other insurance, severance,
separation, other employee benefit, employment, consulting or change of control
agreement, plan, practice, policy or arrangement of any kind, whether written or
oral, or whether for the benefit of a single individual or more than one
individual, including,
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without limitation, any "employee benefit plan" within the meaning of Section
3(3) of ERISA (whether or not subject thereto).
"Preemptive Rights Notice" means the Preemptive Rights Notice dated May 14,
2002 mailed by Parent pursuant to Section 4.05 of the Parent Shareholders
Agreement.
"SEC" means the Securities and Exchange Commission.
"Senior Subordinated Notes" means $250 million aggregate principal amount
of Senior Subordinated Notes to be issued on the Closing Date to finance the
Transactions.
"Shared Contracts" shall mean contracts with third parties (including,
without limitation, those contracts with third parties set forth on Schedule
7.07(b)) which directly benefit both Parent or one of its Subsidiaries or the
Company or one of the Company Subsidiaries or which directly benefit the Company
or one of the Company Subsidiaries.
"Shared Contractual Liabilities" shall mean Liabilities in respect of
Shared Contracts.
"Shareholders Agreement" means the TriMas Corporation Shareholders
Agreement among the shareholders named therein to be dated as of the Closing
Date and containing substantially the terms set forth in Exhibit B attached
hereto.
"Shares" means 13,250,000 shares of Common Stock of the Company,
representing approximately 66% of the outstanding capital stock of the Company
immediately after the Closing.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, association, limited liability company or other organization,
whether incorporated or unincorporated, of which the securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions with respect to
such corporation, partnership, association, limited liability company or other
organization are at any time directly or indirectly owned or controlled by such
Person or by any one or more of its Subsidiaries, or by such Person and one or
more of its Subsidiaries.
"Tax Benefit" means the amount of any refund, credit or reduction in
otherwise required Tax payments, including any interest receivable thereon,
actually realized, provided that, for these purposes, Tax items shall be taken
into account in accordance with the ordering principles of the Code or other
applicable law.
"TMS Holdings LLC" means TMS Holdings LLC, a Delaware limited liability
company and a direct wholly-owned Subsidiary of the Company.
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"Warrant" means the Warrant to purchase 750,000 shares of Common Stock
between the Company and Parent to be dated as of the Closing Date and containing
substantially the terms set forth in Exhibit C attached hereto.
Any reference in this Agreement to a statute shall be to such statute as
amended from time to time and to the rules and regulations promulgated
thereunder.
(b) Each of the following terms is defined herein in the Section set forth
opposite such term:
Term Section
Actuary Firm............................................... 7.09
Bank....................................................... 3.15
Buyer...................................................... Recitals
Buyer Representatives...................................... 6.07
Closing.................................................... 2.02
Closing Date............................................... 2.02
Commitment Letter.......................................... 3.15
Common Stock............................................... Recitals
Company.................................................... Recitals
Company ABO................................................ 7.07
Company Indemnified Parties................................ 9.01
Company Representatives.................................... 6.07
Company Securities......................................... 3.05
Company Subsidiary Securities.............................. 3.06
Company's Pension Plan..................................... 7.09
Company's Trustee.......................................... 7.09
DOJ........................................................ 7.01
End Date................................................... 10.01
Facilities................................................. 3.15
Financing Agreements....................................... 6.05
Foreign Plan............................................... 3.14
FTC........................................................ 7.01
GAAP....................................................... 3.07
IAM Plan................................................... 7.09
Indemnified Party.......................................... 9.02
Indemnifying Party......................................... 9.02
IRS........................................................ 3.13
Parent..................................................... Recitals
Parent Indemnified Party.................................. 9.01
Parent SEC Documents....................................... 4.05
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Term Section
Parent Stock Options....................................... 2.04
Parent's Savings Plans..................................... 7.09
Parent's Trustee........................................... 7.09
Pay Down Amount............................................ 6.04
Purchase Price............................................. 2.01
Required Amount............................................ 3.15
Required Consent........................................... 8.01
Restricted Stock Awards.................................... 2.04
Subsidiary Drop Down....................................... 6.02
Tax........................................................ 3.13
Tax Return................................................. 3.13
Taxes...................................................... 3.13
Taxing Authority........................................... 3.13
Transactions............................................... Recitals
Transferred Employee....................................... 7.09
TriMas..................................................... Recitals
Union Plan................................................. 7.09
ARTICLE 2
ISSUANCE AND PURCHASE
SECTION 2.01. Issuance and Purchase. Upon the terms and subject to the
conditions of this Agreement, the Company agrees to issue free and clear of any
Lien and any other limitation or restriction (including any restriction on the
right to vote, sell or otherwise dispose of the Shares other than the
restrictions and limitations imposed by law and the Shareholders Agreement), and
Buyer agrees to purchase from the Company, the Shares on the Closing Date. The
purchase price for the Shares (the "Purchase Price") is $265 million in cash.
The Purchase Price shall be paid as provided in Section 2.02 hereof.
SECTION 2.02. Closing. The closing (the "Closing") of the issuance and
purchase of the Shares hereunder shall take place at the offices of Cravath,
Swaine & Xxxxx, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other place
as Parent, Buyer and the Company may agree, as soon as possible, but in no event
later than 10 Business Days after satisfaction of the conditions set forth in
Article 8 hereof, or at such other time as Parent, Buyer and the Company may
agree (the "Closing Date"). At the Closing:
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(a) Buyer shall deliver to the Company $265 million in immediately
available funds by wire transfer to an account of the Company with a bank
in New York City designated by the Company, by notice to Buyer, which
notice shall be delivered not later than two Business Days prior to the
Closing Date (or if not so designated, then by certified or official bank
check payable in immediately available funds to the order of the Company in
such amount); and
(b) The Company shall deliver to Buyer certificates for the Shares
duly endorsed or accompanied by stock powers duly endorsed in blank, with
any required transfer stamps affixed thereto.
SECTION 2.03. Closing Obligations. (a) At the Closing, Parent and the
Company shall deliver to Buyer:
(i) the Officer's Certificates described in Section 8.02(a)(iii)
hereof; and
(ii) the Shareholders Agreement duly executed by Parent and the
Company.
(b) At the Closing, Buyer shall deliver to Parent or a designated
Subsidiary or Subsidiaries of Parent and the Company:
(i) the Officer's Certificate described in Section 8.03(a)(iii)
hereof; and
(ii) the Shareholders Agreement duly executed by Buyer and all Persons
to whom Buyer may assign the right to purchase Shares hereunder.
SECTION 2.04. Treatment of Parent Options and Restricted Stock Awards Held
by Employees of the Company. (a) Options to purchase common stock of Parent
("Parent Stock Options") which have not vested prior to the Closing Date and
which are held by Transferred Employees shall terminate and be forfeited on the
Closing Date and new options to purchase Common Stock will be substituted
therefor. Subject to receipt of consent from each applicable holder of Parent
Stock Options, Parent Stock Options held by Transferred Employees or Former
Employees which vested on or prior to the Closing Date shall be assumed by the
Company and converted into options to purchase Common Stock, with appropriate
adjustments.
(b) The Company shall promptly reimburse Parent upon its written demand
(accompanied by appropriate documentation) for (i) cash actually paid to
Transferred Employees by Parent in redemption, after the Closing Date, of
restricted shares of stock of Parent held by such Transferred Employees under
Restricted Stock Awards dated November 17, 2000 (the "Restricted Stock Awards"),
and (ii) 42.01% of the amount of cash actually paid to Corporate Employees by
Parent in redemption, after the Closing Date, of Restricted Stock Awards held by
Corporate Employees. Buyer and Parent undertake following the Closing
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Date to use reasonable efforts to explore the legal issues, the associated costs
and the overall feasibility of substituting shares of Common Stock for Parent
shares under the Restricted Stock Awards held by Transferred Employees and
Corporate Employees. Part II of Schedule 1.01(c) sets forth the responsibilities
of the Company for Transferred Employees and of Parent for employees retained by
Parent and its Subsidiaries (other than the Company and the Company
Subsidiaries) with respect to the payment pursuant to Restricted Stock Awards
under this Section 2.04(b). For purposes of the continued vesting of Restricted
Stock Awards, Parent will treat employment with the Company and the Company
Subsidiaries as employment of the Transferred Employees with Parent.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Buyer that, except as set forth in
any disclosure schedule delivered by the Company to Buyer immediately prior to
execution of this Agreement:
SECTION 3.01. Corporate Existence and Power. (a) The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has all corporate powers and all governmental
licenses, authorizations, permits, consents and approvals required to carry on
its business as now conducted, except for those licenses, authorizations,
permits, consents and approvals the absence of which would not be reasonably
expected to have, individually or in the aggregate, a Material Adverse Effect.
The Company is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction where such qualification is necessary, except
for those jurisdictions where failure to be so qualified would not be reasonably
expected to have, individually or in the aggregate, a Material Adverse Effect.
(b) The Company has heretofore delivered to Buyer true and complete copies
of the certificate of incorporation and by-laws of the Company as currently in
effect.
SECTION 3.02. Corporate Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the Transactions are within the Company's corporate powers and have been duly
authorized by all necessary corporate action on the part of the Company. This
Agreement constitutes a valid and binding agreement of the Company enforceable
against the Company in accordance with its terms except (i) to the extent
enforceability may be limited by bankruptcy laws, insolvency laws,
reorganization laws, moratorium laws or other laws affecting creditors rights
generally and (ii) to the extent enforceability may be limited by general equity
principles.
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SECTION 3.03. Governmental Authorization. The execution, delivery and
performance by Company of this Agreement and the consummation by Company of the
Transactions require no action by or in respect of, or filing with, or
notification or reporting to, any Governmental Authority, other than (i)
compliance with any applicable requirements of the HSR Act and of the Antitrust
Laws of Germany, (ii) the filings, notices or reports identified on Schedule
3.03 and (iii) any actions or filings the absence of which would not be
reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect.
SECTION 3.04. Non-Contravention. The execution, delivery and performance by
the Company of this Agreement and the consummation of the Transactions do not
and will not (i) contravene, conflict with or result in any violation or breach
of any provision of the certificate of incorporation or by-laws of the Company
or any Company Subsidiary, (ii) contravene, conflict with or result in a
violation or breach of any provision of any applicable law, statute, ordinance,
rule, regulation, judgment, injunction, order or decree, (iii) require any
consent or other action by any Person under, constitute a default under or cause
or permit the termination, cancellation, acceleration or other change of any
right or obligation or the loss of any benefit to which the Company or any
Company Subsidiary is entitled under any provision of any agreement or other
instrument binding upon the Company or any Company Subsidiary or any license,
franchise, permit, certificate, approval or other similar authorization
affecting, or relating in any way to, the assets or business of the Company or
any Company Subsidiary or (iv) result in the creation or imposition of any Lien
on any asset of the Company or any Company Subsidiary, except for such
contraventions, conflicts and violations referred to in clause (ii) and except
for such failures to obtain any such consent or other action, defaults,
terminations, cancellations, accelerations, changes, losses or Liens referred to
in clauses (iii) and (iv) that would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
SECTION 3.05. Capitalization. (a) The authorized capital stock of the
Company consists of 100,000,000 shares of Common Stock and 5,000,000 shares of
preferred stock, par value $1.00 per share. As of the date hereof, there are
outstanding 1,000 shares of Common Stock and no shares of preferred stock. As of
the Closing Date upon the issuance of the Shares pursuant to Section 2.01
hereof, (i) the authorized capital stock of the Company will consist of
400,000,000 shares of Common Stock and 100,000,000 shares of preferred stock,
par value $.01 per share, and (ii) there will be outstanding 20,000,000 shares
of Common Stock, including shares of Common Stock underlying the Warrant.
(b) All outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable. Except as
set forth in this Section 3.05, there are no outstanding (i) shares of capital
stock or voting securities of the Company, (ii) securities of the Company
convertible into or exchangeable for shares of capital stock or voting
securities of the Company or (iii) options or other rights to acquire from the
Company, or other obligation of the Company to issue, any capital stock, voting
securities or
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securities convertible into or exchangeable for capital stock or voting
securities of the Company (the items in clauses (i), (ii) and (iii) above being
referred to collectively as the "Company Securities"). There are no outstanding
obligations of the Company to repurchase, redeem or otherwise acquire any
Company Securities.
SECTION 3.06. Company Subsidiaries. (a) Each Company Subsidiary is a
corporation, partnership or limited liability company, duly incorporated, formed
or organized, as the case may be, validly existing and in good standing under
the laws of its jurisdiction of incorporation, formation or organization, as the
case may be, and has all corporate or other similar powers and all governmental
licenses, authorizations, permits, consents and approvals required to carry on
its business as now conducted, except for those licenses, authorizations,
permits, consents and approvals the absence of which would not be reasonably
expected to have, individually or in the aggregate, a Material Adverse Effect.
Each such Company Subsidiary is duly qualified to do business as a foreign
corporation, partnership or limited liability company and is in good standing in
each jurisdiction where such qualification is necessary, except for those
jurisdictions where the failure to be so qualified would not be reasonably
expected to have, individually or in the aggregate, a Material Adverse Effect.
(b) All of the outstanding capital stock of, or other voting securities or
ownership interests in, each Company Subsidiary are owned by the Company,
directly or indirectly, free and clear of any Lien (except for any Liens under
the Parent Credit Agreement) and free of any other limitation or restriction
(including any restriction on the right to vote, sell or otherwise dispose of
such capital stock or other voting securities or ownership interests other than
restrictions imposed by law or by the Shareholders Agreement). All of the
outstanding shares of capital stock of each Company Subsidiary have been validly
issued and are fully paid and non-assessable. There are no outstanding (i)
securities of any Company Subsidiary convertible into or exchangeable for shares
of capital stock or other voting securities or ownership interests in any
Company Subsidiary or (ii) options or other rights to acquire from any Company
Subsidiary, or other obligation of any Company Subsidiary to issue, any capital
stock or other voting securities or ownership interests in, or any securities
convertible into or exchangeable for any capital stock or other voting
securities or ownership interests in, any Company Subsidiary (the items in
clauses (i) and (ii) above being referred to collectively as the "Company
Subsidiary Securities"). There are no outstanding obligations of the Company or
any Company Subsidiary to repurchase, redeem or otherwise acquire any of the
Company Subsidiary Securities.
SECTION 3.07. Financial Statements. The audited consolidated financial
statements for the year ended December 31, 2001 and unaudited consolidated
interim financial statements for the three months ended March 31, 2002 of the
Company and the Company Subsidiaries heretofore delivered to Buyer fairly
present in all material respects, in conformity with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis (except as
may be indicated in the notes thereto), the consolidated financial
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position of the Company and the Company Subsidiaries as of the dates thereof and
their consolidated results of operations and cash flows for the periods then
ended (subject to normal year-end adjustments and the absence of notes in the
case of any unaudited interim financial statements).
SECTION 3.08. Absence of Certain Changes. Since the Company Balance Sheet
Date, except in connection with this Agreement or the Transactions, the business
of the Company and the Company Subsidiaries has been conducted in the ordinary
course consistent with past practices and there has not been:
(a) any creation or other incurrence by the Company or any Company
Subsidiary of any Lien on any asset that is material to the Company and the
Company Subsidiaries, taken as a whole, other than in the ordinary course
of business consistent with past practices;
(b) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or assets of the Company or
any Company Subsidiary that has or could be reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect; or
(c) any change in any method of financial accounting, method of tax
accounting or financial accounting principles or practice by the Company or
any Company Subsidiary, except for any such change required by reason of a
concurrent change in GAAP, Regulation S-X under the 1934 Act, the Code or
other applicable law or regulations.
SECTION 3.09. No Undisclosed Material Liabilities. There are no liabilities
or obligations of the Company or any Company Subsidiary of the type required to
be disclosed or provided for on the Company Balance Sheet or the notes thereto
that have not been disclosed in the Company Balance Sheet or any Parent SEC
Documents.
SECTION 3.10. Compliance with Laws and Court Orders. The Company and each
Company Subsidiary are, and since January 1, 2002 have been, in compliance with
any applicable law, statute, ordinance, rule, regulation, judgment, injunction,
order or decree, except for failures to comply or violations that have not and
would not be reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect.
SECTION 3.11. Litigation. There is no Action, suit, investigation or
proceeding pending against, or, to the knowledge of the Company, threatened
against, the Company or any Company Subsidiary or any of their respective
properties before any court or arbitrator, or before or by any Governmental
Authority, that would reasonably be expected to have, individually or in the
aggregate, together with all other such Actions, suits, investiga-
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tions or proceedings, a Material Adverse Effect except as disclosed in any
Parent SEC Document.
SECTION 3.12. Finders' Fee. Except for an Affiliate of Buyer, whose fees
will be paid by the Company, there is no investment banker, broker, finder or
other intermediary that has been retained by or is authorized to act on behalf
of the Company or any Company Subsidiary that might be entitled to any fee or
commission from the Company or any of its Affiliates in connection with the
Transactions.
SECTION 3.13. Taxes. (a) Each of the Company and the Company Subsidiaries
has timely filed (or has had timely filed on its behalf), taking into account
any extension of time within which to file, all material Tax Returns required to
be filed by it.
(b) Each of the Company and the Company Subsidiaries has paid (or has had
paid on its behalf) all Taxes shown on such Tax Returns.
"Tax" or "Taxes" shall mean any and all taxes, charges, fees, levies or
other assessments, including income, gross receipts, excise, real or personal
property, sales, withholding, social security, retirement, unemployment,
occupation, use, goods and services, service use, license, value added, capital,
net worth, payroll, profits, franchise, transfer and recording taxes, fees and
charges, and any other taxes, assessments or similar charges imposed by the
Internal Revenue Service (the "IRS") or any taxing authority (whether domestic
or foreign including any state, county, local or foreign government or any
subdivision or taxing agency thereof (including a United States possession)) (a
"Taxing Authority"), whether computed on a separate, consolidated, unitary,
combined or any other basis; and such term shall include any interest whether
paid or received, fines, penalties or additional amounts attributable to, or
imposed upon, or with respect to, any such taxes, charges, fees, levies or other
assessments. "Tax Return" shall mean any report, return, document, declaration
or other information or filing required to be supplied to any Taxing Authority
or jurisdiction (foreign or domestic) with respect to Taxes, including
information returns, any documents with respect to or accompanying payments of
estimated Taxes, or with respect to or accompanying requests for the extension
of time in which to file any such report, return, document, declaration or other
information.
SECTION 3.14. Employee Benefit Plans. (a) Copies of all written Benefit
Plans and Foreign Plans, summary plan descriptions, trust agreements, actuarial
valuation reports and the most recent annual return and IRS determination
letters have been made available to Buyer.
(b) Except as would not be reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect:
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(i) each Benefit Plan has at all times been maintained and
administered in all respects in accordance with its terms and with the
requirements of all applicable law, including ERISA and the Code. Each
Benefit Plan intended to qualify under Section 401(a) of the Code has been
determined by the IRS to be qualified under Section 401(a) of the Code, and
the Company knows of no fact or circumstance giving rise to a material
likelihood that the plan would not be treated as so qualified by the IRS;
(ii) all required contributions to any Benefit Plans and Multiemployer
Plans that are "defined benefit pension plans" required to be made by the
Company or any Company Subsidiary in accordance with Section 302 of ERISA
or Section 412 of the Code have been timely made; there has been no
application for or waiver of the minimum funding standards imposed by
Section 412 of the Code with respect to any Benefit Plan; and no Benefit
Plan has incurred any "accumulated funding deficiency" within the meaning
of Section 302 of ERISA or Section 412 of the Code;
(iii) no "reportable event" (within the meaning of Section 4043 of
ERISA) has occurred with respect to any Benefit Plan or any Plan maintained
by an ERISA Affiliate since the effective date of said Section 4043;
(iv) no liability has been incurred or is expected to be incurred by
the Company or any Company Subsidiary under Title IV of ERISA with respect
to any Benefit Plan or Multiemployer Plan, or with respect to any other
Plan presently or heretofore maintained or contributed to during the 5 year
period prior to the Closing Date by any ERISA Affiliate;
(v) with respect to each Multiemployer Plan, (i) no withdrawal
liability (within the meaning of Section 4201(b) of ERISA) has been
incurred by the Company or any ERISA Affiliate, (ii) no such Multiemployer
Plan is in "reorganization" (within the meaning of Section 4241 of ERISA),
(iii) no notice has been received that increased contributions may be
required to avoid a reduction in plan benefits or the imposition of an
excise tax, or that such Multiemployer Plan is or may become "insolvent"
(within the meaning of Section 4241 of ERISA), (iv) to the knowledge of the
Company or any Company Subsidiary, no proceedings have been instituted by
the PBGC against such Multiemployer Plan and (v) neither the Company nor
any Company Subsidiary has sold assets in a transaction intended to satisfy
the requirements of Section 4204 of ERISA;
(vi) neither the Company nor any ERISA Affiliate has incurred any
liability for any tax imposed under Sections 4971 through 4980E of the Code
or civil liability under Section 502(i) or (l) of ERISA; and
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(vii) no action (excluding claims for benefits incurred in the
ordinary course of Plan activities) has been brought or, to the knowledge
of the Company, threatened against or with respect to any Benefit Plan or
Foreign Plan.
(c) Except as would not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect, (i) all contributions required to be
made by the Company or any Company Subsidiary with respect to a Foreign Plan
have been timely made, (ii) each Foreign Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws and has been maintained, where required, in good standing with the
applicable Governmental Authority, and (iii) neither the Company nor any Company
Subsidiary has incurred any obligation in connection with the termination of or
withdrawal from any Foreign Plan. For purposes hereof, the term "Foreign Plan"
shall mean any plan, program, policy, arrangement or agreement maintained or
contributed to by, or entered into with the Company or any Company Subsidiary
with respect to employees (or former employees) employed outside the United
States.
SECTION 3.15. Financing. (a) The Company has received and furnished copies
to Buyer and Parent of a commitment letter to provide financing (the
"Facilities") to the Company (including the Summary of Terms and Conditions
annexed thereto, the "Commitment Letter") with XX Xxxxxx Xxxxx Bank, CSFB Cayman
Islands Branch, Comerica Bank, National City Bank and Wachovia Bank, National
Association (the "Bank") dated as of May 14, 2002. The funds which the Bank has
agreed to provide, subject to the terms and conditions of the Commitment Letter,
will be sufficient, when taken together with other funds available to the
Company (assuming the sale by the Company of the Senior Subordinated Notes and
the issuance and purchase of the Shares pursuant to the terms of this
Agreement), to enable it to make payment of the Pay Down Amount and other
amounts owing as a result of the Transactions, as contemplated by the Commitment
Letter, and to pay all related fees and expenses (the proceeds of the sale of
the Senior Subordinated Notes and the funding provided for by the Facilities
being collectively referred to as the "Required Amount").
(b) As of the date hereof (i) the Commitment Letter has not been withdrawn
and is in full force and effect and (ii) the Company has no reason to believe
that any of the conditions set forth in the Commitment Letter will not be
satisfied.
(c) Immediately after the consummation of the Transactions, the Company (i)
will not be insolvent, (ii) will not be left with unreasonably small capital,
and (iii) will not have debts beyond its ability to pay such debts as they
mature.
SECTION 3.16. Disclaimer of Other Representations and Warranties. The
Company does not make, and has not made, any representations or warranties in
connection with the Transactions other than those expressly set forth herein. It
is understood that any
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data, any financial information or any memoranda or offering materials or
presentations are not and shall not be deemed to be or to include
representations or warranties of the Company. Except as expressly set forth
herein, no Person has been authorized by the Company to make any representation
or warranty relating to the Company or any Company Subsidiary or their
respective businesses or otherwise in connection with the Transactions and, if
made, such representation or warranty may not be relied upon as having been
authorized by the Company.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to Buyer that, except as set forth in any
disclosure schedule delivered by Parent to Buyer immediately prior to execution
of this Agreement:
SECTION 4.01. Corporate Existence and Power. (a) Parent is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware and has all corporate powers and all governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted, except for those licenses, authorizations, permits,
consents and approvals the absence of which would not reasonably be expected to,
individually or in the aggregate, materially impair the ability of Parent to
consummate the Transactions.
(b) Parent has heretofore delivered or made available to Buyer true and
complete copies of the certificate of incorporation and by-laws of Parent as
currently in effect.
SECTION 4.02. Corporate Authorization. The execution, delivery and
performance by Parent of this Agreement and the consummation by Parent of the
Transactions and the actions by Parent contemplated thereby are within Parent's
corporate powers and have been duly authorized by all necessary corporate action
on the part of Parent. This Agreement constitutes a valid and binding agreement
of Parent enforceable against Parent in accordance with its terms, except (i) to
the extent enforceability may be limited by bankruptcy laws, insolvency laws,
reorganization laws, moratorium laws or other laws affecting creditors rights
generally and (ii) to the extent enforceability may be limited by general equity
principles.
SECTION 4.03. Governmental Authorization. The execution, delivery and
performance by Parent of this Agreement and the consummation by Parent of the
Transactions and the actions by Parent contemplated thereby require no action by
or in respect of, or filing with, or notification or reporting to, any
Governmental Authority, other than (i) compliance with any applicable
requirements of the HSR Act and of the Antitrust Laws of Germany and (ii) any
actions or filings the absence of which would not reasonably be ex-
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pected to, individually or in the aggregate, materially impair the ability of
Parent to consummate the Transactions.
SECTION 4.04. Non-Contravention. The execution, delivery and performance by
Parent of this Agreement and the consummation of the Transactions do not and
will not (i) contravene, conflict with or result in any violation or breach of
any provision of the certificate of incorporation or by-laws of Parent, (ii)
contravene, conflict with or result in a violation or breach of any provision of
any applicable law, statute, ordinance, rule, regulation, judgment, injunction,
order or decree, (iii) require any consent or other action by any Person under,
constitute a default under or cause or permit the termination, cancellation,
acceleration or other change of any right or obligation or the loss of any
benefit to which Parent or any of its Subsidiaries is entitled under any
provision of any agreement or other instrument binding upon Parent or any of its
Subsidiaries or any license, franchise, permit, certificate, approval or other
similar authorization affecting, or relating in any way to, the assets or
business of Parent or any of its Subsidiaries, (iv) result in the creation or
imposition of any Lien on any asset of Parent or any of its Subsidiaries, except
for such contraventions, conflicts and violations referred to in clause (ii) and
except for such failures to obtain any such consent or other action, defaults,
terminations, cancellations, accelerations, changes, losses or Liens referred to
in clauses (iii) and (iv) that would not reasonably be expected to, individually
or in the aggregate, materially impair the ability of Parent to consummate the
Transactions.
SECTION 4.05. SEC Filings. (a) Parent has delivered to Buyer (i) Parent's
annual report on Form 10-K for its fiscal year ended December 31, 2001 and (ii)
all of its other reports, statements, schedules and registration statements
filed with the SEC since December 31, 2001 (the documents referred to in this
Section 4.05(a), collectively, the "Parent SEC Documents").
(b) As of its filing date, no Parent SEC Document contained any untrue
statement of a material fact or omitted to state any material fact necessary in
order to make the statements made therein with respect to the Company or any
Company Subsidiary, in the light of the circumstances under which they were
made, not misleading.
SECTION 4.06. Preemptive Rights. Parent has taken all necessary action
required by Section 4.05 of the Parent Shareholders Agreement, including the
mailing of the Preemptive Rights Notice.
SECTION 4.07. Disclaimer of Other Representations and Warranties. Parent
does not make, and has not made, any representations or warranties in connection
with the Transactions other than those expressly set forth herein. It is
understood that any data, any financial information or any memoranda or offering
materials or presentations given or made by or to the Company or Buyer or any of
their respective financing sources are not and shall not be deemed to be or to
include representations or warranties by or on behalf of or with re-
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spect to Parent. Except as expressly set forth herein, no Person has been
authorized by Parent to make any representation or warranty relating to Parent
or any of its Subsidiaries including the Company or any Company Subsidiary or
their respective businesses or otherwise in connection with the Transactions
and, if made, such representation or warranty may not be relied upon as having
been authorized by Parent.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Parent and the Company that:
SECTION 5.01. Partnership Existence and Power. Buyer is a limited
partnership duly formed, validly existing and in good standing under the laws of
the State of Delaware and has all partnership powers and all material
governmental licenses, authorizations, permits, consents and approvals required
to carry on its business as now conducted.
SECTION 5.02. Partnership Authorization. The execution, delivery and
performance by Buyer of this Agreement and the consummation of the Transactions
are within the partnership powers of Buyer and have been duly authorized by all
necessary partnership action. This Agreement constitutes a valid and binding
agreement of Buyer enforceable against Buyer in accordance with its terms except
(i) to the extent enforceability may be limited by bankruptcy laws, insolvency
laws, reorganization laws, moratorium laws or other laws affecting creditors
rights generally and (ii) to the extent enforceability may be limited by general
equity principles.
SECTION 5.03. Governmental Authorization. The execution, delivery and
performance by Buyer of this Agreement and the consummation by Buyer of the
Transactions require no action by or in respect of, or filing with, or
notification or reporting to, any Governmental Authority other than (i)
compliance with any applicable requirements of the HSR Act and of the Antitrust
Laws of Germany, and (ii) any actions or filings the absence of which would not
be reasonably expected to have, individually or in the aggregate, an effect
which is materially adverse to the ability of Buyer to consummate the
Transactions.
SECTION 5.04. Non-Contravention. The execution, delivery and performance by
Buyer of this Agreement and the consummation by Buyer of the Transactions do not
and will not (i) contravene, conflict with or result in any violation or breach
of any provision of the certificate of incorporation or by-laws of Buyer, (ii)
assuming compliance with the matters referred to in Section 5.03 hereof,
contravene, conflict with or result in a violation or breach of any provision of
any law, rule, regulation, judgment, injunction, order or decree, (iii) require
any consent or other action by any Person under, constitute a default under or
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cause or permit the termination, cancellation, acceleration or other change of
any right or obligation or the loss of any benefit to which Buyer is entitled
under any provision of any agreement or other instrument binding upon Buyer or
any license, franchise, permit, certificate, approval or other similar
authorization affecting, or relating in any way to, the assets or business of
Buyer or (iv) result in the creation or imposition of any Lien on any asset of
Buyer, except for such contraventions, conflicts and violations referred to in
clause (ii) and for such failures to obtain any such consent or other action,
defaults, terminations, cancellations, accelerations, changes, losses or Liens
referred to in clauses (iii) and (iv) that would not be reasonably expected to
materially impair the ability of Buyer to consummate the Transactions.
SECTION 5.05. Fees. Except as otherwise provided in this Agreement and
except for fees due to Buyer from Parent pursuant to the Metaldyne Monitoring
Agreement between Buyer and Parent dated November 28, 2000, Buyer has not taken
any action that would cause Parent or the Company to be liable for any fee or
commission in connection with the Transactions.
SECTION 5.06. Other Buyer Representations and Warranties. (a) The Shares
being acquired by Buyer hereunder are being acquired for Buyer's own account and
not with the view to, or for resale in connection with, any distribution.
(b) Buyer acknowledges that it is an accredited investor within the meaning
of Rule 501 of Regulation D under the 1933 Act. Buyer has such knowledge, skill
and experience in business, financial and investment matters that it is capable
of evaluating the merits, risks and consequences of an investment in the Shares
and Buyer is able to bear the economic risk of loss of this investment. Buyer
has made such independent investigation of the Company and the transactions
contemplated by this Agreement as it deems necessary or advisable in connection
with its purchase of the Shares.
(c) Buyer has been advised by the Company that: (A) neither the offer nor
sale of any Shares has been registered under the 1933 Act or any state or
foreign securities or "blue sky" laws; (B) the Shares are characterized as
"restricted securities" under the 1933 Act as they are being acquired from the
Company in a transaction not involving a public offering; and (C) any transfer
of the Shares will be subject to the provisions and the covenants of the
Shareholders Agreement.
ARTICLE 6
COVENANTS OF PARENT AND THE COMPANY
Parent and the Company agree that:
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SECTION 6.01. Amendment and Restatement of Articles of Incorporation and
By-laws. Prior to the Closing Date, Parent shall cause the Company to amend and
restate its Articles of Incorporation and By-laws to be in the form attached
hereto as Exhibits E and F, respectively.
SECTION 6.02. Contribution of Capital Stock of Subsidiaries. As soon as
practicable after the date hereof, but in no case later than the date of pricing
of the Senior Subordinated Notes, the Company shall contribute all of the
capital stock of each of its direct Subsidiaries to TMS Holdings LLC in exchange
for or in respect of all of the issued and outstanding equity interests of TMS
Holdings LLC (the "Subsidiary Drop Down").
SECTION 6.03. Declaration and Payment of Dividend. Prior to the Closing
Date, the Company shall declare a dividend to Parent, payable to shareholders of
record as of the date prior to the Closing Date, of (i) cash equal to the
difference between $840 million and the Pay Down Amount and (ii) a Warrant to
purchase 750,000 shares of Common Stock, representing approximately 3.8% of the
fully diluted Common Stock of the Company immediately following the Closing.
SECTION 6.04. Repayment of Debt. On the Closing Date, the Company shall,
and shall cause the Company Subsidiaries to, repay or satisfy all indebtedness
or obligations of the Company and the Company Subsidiaries under the Parent
Credit Agreement and the Parent Receivables Purchase Agreement and the Company
and the Company Subsidiaries shall repay all indebtedness owed to Parent and its
Subsidiaries (the total of such indebtedness repaid or satisfied, together with
accrued interest and premium, if any, being the "Pay Down Amount").
SECTION 6.05. Financing Arrangements. (a) The Company shall use its
commercially reasonable efforts to obtain financing in an amount at least equal
to the Required Amount, including by executing definitive agreements for the
Facilities and pursuing the issuance and sale of the Senior Subordinated Notes
on or prior to the Closing Date. The Commitment Letter and the definitive
agreements for the Facilities (along with any other document pursuant to which
the Company intends to obtain financing of all or a portion of the Required
Amount (including any documents relating to the issuance and sale by the Company
of the Senior Subordinated Notes)) are referred to herein collectively as the
"Financing Agreements."
(b) Without limiting the generality of the foregoing, in the event that at
any time funds are not or have not been made available under the Financing
Agreements so as to enable the Company to proceed with the Closing in a timely
manner, the Company shall (i) use its commercially reasonable efforts to obtain
alternative funding in an amount at least equal to the Required Amount on terms
and conditions comparable to those provided in such Financing Agreements, in the
case of the Facilities, or otherwise on terms reasonably accept-
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able to the Company, in the case of the issuance and sale of the Senior
Subordinated Notes, and (ii) shall continue to use its commercially reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate the Transactions contemplated by this Agreement.
(c) Parent shall use its commercially reasonable efforts to cooperate with
the Company to obtain the financings referred to in Sections 6.05(a) and (b)
above, as applicable.
SECTION 6.06. Conduct of the Company. Except as contemplated by this
Agreement or as expressly agreed to in writing by Buyer, during the period from
the date of this Agreement to the Closing Date, Parent shall cause the Company
and each Company Subsidiary to conduct its operations according to its ordinary
and usual course of business and consistent with past practice and use all
commercially reasonable efforts to preserve intact its current business
organizations, keep available the services of its current officers and employees
and preserve its relationships with customers, suppliers, licensors, licensees,
advertisers, distributors and others having business dealings with it and
preserve goodwill. Without limiting the generality of the foregoing, and except
as (x) otherwise expressly provided in this Agreement or (y) required by law,
prior to the Closing Date, Parent shall cause the Company and the Company
Subsidiaries not to, without the consent of Buyer:
(a) expend funds for capital expenditures that in the aggregate would
cause total capital expenditures for the period from January 1, 2002 to the
Closing Date to exceed 110% of the amounts set forth in the most recent
version of the business plan previously provided to Buyer;
(b) sell, lease, license or otherwise dispose of any Material
Subsidiary or any material amount of assets, securities or property of the
Company and the Company Subsidiaries, taken as a whole, except pursuant to
existing contracts or commitments or otherwise in the ordinary course
consistent with past practice, it being understood that title to the
tangible personal property formerly used in the Commonwealth Business shall
be retained by Parent or one of its Subsidiaries;
(c) amend its certificate of incorporation, by-laws or equivalent
organizational documents or alter through merger, liquidation,
reorganization, restructuring or in any other fashion the corporate
structure or ownership of any Material Subsidiary of the Company or split,
combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock;
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(d) authorize for issuance, issue, deliver, sell or agree or commit to
issue, sell or deliver (whether through the issuance or granting of
options, warrants, commitments, subscriptions, rights to purchase or
otherwise), pledge (except as required by the Parent Credit Agreement) or
otherwise encumber any shares of its capital stock or the capital stock of
any of the Company Subsidiaries, any other voting securities or any
securities convertible into, or any rights, warrants or options to acquire,
any such shares, voting securities or convertible securities or any other
securities or equity equivalents (including without limitation stock
appreciation rights);
(e) make or agree to make any acquisition of any equity interest
(whether through a purchase of stock, establishment of a joint venture or
otherwise) or assets which is material to the Company and the Company
Subsidiaries, taken as a whole, except for: (i) purchases of inventory and
supplies in the ordinary course of business or (ii) pursuant to purchase
orders and other contracts entered into in the ordinary course of business;
(f) settle or compromise any material litigation (whether or not
commenced prior to the date of this Agreement) or settle, pay or compromise
any material claims not required to be paid, other than, in each case, (i)
relating to Taxes or (ii) in consultation and cooperation with Buyer and,
with respect to any such settlement, with the prior written consent of
Buyer;
(g) (i) take any action that would make any representation and
warranty of Parent and the Company hereunder inaccurate in any material
respect at, or as of any time prior to, the Closing Date or (ii) omit to
take any action necessary to prevent any such representation or warranty
from being materially inaccurate in any respect at any such time; or
(h) authorize, or commit or agree to take, any of the foregoing
actions.
SECTION 6.07. Access to Information. From the date of this Agreement until
the Closing Date, Parent shall cause the Company, the Company Subsidiaries and
each of their respective officers, directors, employees, counsel, advisors and
representatives (collectively, the "Company Representatives") to give Buyer and
its members, managers, employees, counsel, advisors and representatives
(collectively, the "Buyer Representatives") and representatives of financing
sources identified by Buyer reasonable access, upon reasonable notice and during
normal business hours, to the offices and other facilities and to the books and
records of the Company and the Company Subsidiaries and shall cause the Company
Representatives and the Company Subsidiaries to furnish Buyer and the Buyer
Representatives and representatives of financing sources identified by Buyer
with such financial and operating data and such other information with respect
to the business and operations of the
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Company and the Company Subsidiaries as Buyer and representatives of financing
sources identified by Buyer may from time to time reasonably request.
SECTION 6.08. Reports. During the period from the date of this Agreement to
the Closing Date, Parent shall cause the Company to provide Buyer with monthly
financial statements of the Company and the Company Subsidiaries in the existing
reporting format (balance sheet, cash flow statement, income statement and, if
available, notes thereto), broken out by operating unit (except as to the cash
flow statement, which shall be a consolidated statement), no later than the
fifteenth Business Day following the end of each calendar month following the
date of this Agreement; provided that for calendar months that are also the end
of a calendar quarter, the Company may provide such financial information to
Buyer on the same date such information is publicly released in accordance with
the past practice of Parent.
SECTION 6.09. Other Agreements. Prior to the Closing Date, the Company
shall deliver to the General Partner of Buyer duly executed copies of the
Monitoring Agreement and (ii) Parent and the Company shall execute and deliver
the Corporate Services Agreement.
SECTION 6.10. Debt Repayment. Parent shall cooperate with the Company in
connection with the repayment of the Pay Down Amount and shall use commercially
reasonable efforts to obtain the release of the Company and the Company
Subsidiaries of their respective obligations under the Parent Credit Agreement
and under the Parent Receivables Purchase Agreement including the return to the
Company and Company Subsidiaries of the trade accounts receivable they
originated and sold pursuant to the Parent Receiveables Purchase Agreement
(whether such obligation is repaid or satisfied by the repurchase of such
receivables or otherwise).
SECTION 6.11. Expenses; Indemnification. Except as otherwise provided in
this Agreement, if the Transactions are consummated, the Company shall reimburse
Buyer for all reasonable out-of-pocket expenses of Buyer incurred in conjunction
with the preparation, negotiation, documentation and closing of the
Transactions.
ARTICLE 7
COVENANTS OF BUYER, PARENT AND THE COMPANY
The parties hereto agree that:
SECTION 7.01. Commercially Reasonable Efforts. (a) Subject to the terms and
conditions of this Agreement, Buyer, Parent and the Company will use all
commer-
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cially reasonable efforts to take, or cause to be taken, all necessary or
appropriate actions and to do, or cause to be done, all things necessary or
appropriate to satisfy the conditions to closing set forth in Article 8 hereof
and to consummate the Transactions on the terms and conditions set forth in this
Agreement including, without limitation, to use commercially reasonable efforts
to cooperate with the Company in pursuing the sale of the Senior Subordinated
Notes, obtaining funding under the Facilities, obtaining the Required Consent
and any other consents necessary to be obtained prior to and after the Closing
Date. Parent shall assist Buyer and the Company and cooperate with Buyer and the
Company, the Bank and the other lenders under the Facilities in order for Buyer
to establish its contemplated debt financing arrangements and obtain the
Required Amount thereunder. In furtherance and not in limitation of the
foregoing, Buyer agrees to make, if required, an appropriate filing of a
Notification and Report Form pursuant to the HSR Act with respect to the
Transactions as promptly as practicable and in any event within 15 Business Days
of the date hereof and to supply as promptly as practicable any additional
information and documentary material that may be requested pursuant to the HSR
Act and to take all other actions necessary to cause the expiration or
termination of the applicable waiting periods under the HSR Act as soon as
practicable.
(b) In connection with the efforts referenced in Section 7.01(a) to obtain
all requisite approvals and authorizations for the Transactions under any other
Antitrust Law, each of Buyer, Parent and the Company shall use all commercially
reasonable efforts to (i) cooperate in all respects with each other in
connection with any filing or submission and in connection with any
investigation or other inquiry, including any proceeding initiated by a private
party, (ii) keep the other parties informed in all material respects of any
material communication received by such party from, or given by such party to,
the Federal Trade Commission (the "FTC"), the Antitrust Division of the
Department of Justice (the "DOJ") or any other Governmental Authority and of any
material communication received or given in connection with any proceeding by a
private party, in each case regarding any of the Transactions, and (iii) permit
the other parties to review any material communication given by it to, and
consult with each other in advance of any meeting or conference with, the FTC,
the DOJ or any such other Governmental Authority or, in connection with any
proceeding by a private party, with any other Person.
SECTION 7.02. Certain Filings. Prior to and after the Closing Date, Buyer,
Parent and the Company shall use their commercially reasonable efforts to
cooperate with one another in (i) determining whether any action by or in
respect of, or filing with, any Governmental Authority is required, or any
actions, consents, approvals or waivers are required to be obtained from parties
to any material contracts, in connection with the consummation of the
Transactions, and (ii) taking such actions or making any such filings,
furnishing information required in connection therewith and seeking timely to
obtain any such actions, consents, approvals or waivers.
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SECTION 7.03. Public Announcements. Buyer, Parent and the Company shall
consult with each other before issuing any press release or making any public
statement with respect to this Agreement or the Transactions and shall not issue
any such press release or make any such public statement without the consent of
the other parties hereto.
SECTION 7.04. Notices of Certain Events. Each of Buyer, Parent and the
Company shall promptly notify the others of:
(a) any written notice or other written communication from any Person
alleging that the consent of such Person is or may be required in
connection with the Transactions;
(b) any written notice or other written communication from any
Governmental Authority in connection with the Transactions;
(c) any Actions, suits, claims, investigations or proceedings
commenced or, to its knowledge, threatened against, relating to or
involving or otherwise affecting the Company or any of the Company
Subsidiaries that, if pending on the date of this Agreement, would have
been required to have been disclosed pursuant to Section 3.11 hereof, or
that relate to the consummation of the Transactions;
(d) the occurrence or non-occurrence of any fact or event which would
be reasonably likely:
(i) to cause any representation or warranty contained in this
Agreement to be untrue or inaccurate in any material respect at any
time from the date hereof to the Closing Date, or
(ii) to cause any covenant, condition or agreement under this
Agreement not to be complied with or satisfied; and
(e) any failure of Buyer, Parent or the Company, as the case may be,
to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, however, that no such
notification shall affect the representations or warranties of any party or
the conditions to the obligations of any party hereunder.
SECTION 7.05. Confidentiality. Prior to the Closing Date and after any
termination of this Agreement, each of Buyer, Parent and the Company will hold,
and will use all commercially reasonable efforts to cause its officers,
directors, employees, accountants, counsel, consultants, advisors and agents to
hold, in confidence all confidential documents and information concerning the
other party furnished to it or its Affiliates in connection with the
Transactions.
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SECTION 7.06. Intercompany Accounts. Except as provided in Section 6.04 and
except for indebtedness owed by the Company and the Company Subsidiaries to
Parent or any of its Subsidiaries, all intercompany accounts between Parent or
its Subsidiaries, on the one hand, and the Company or any Company Subsidiary, on
the other hand, remaining unpaid as of the Closing Date shall be forgiven and
canceled (irrespective of the terms of payment of such intercompany accounts) in
a manner designed to minimize any tax consequences associated with such
forgiveness or cancellation. At least five Business Days prior to the Closing,
Parent shall prepare and deliver to the Company a statement setting out, in
reasonable detail, the calculation of all such intercompany account balances
based upon the latest available financial information as of such date and, to
the extent requested by the Company, provide the Company with reasonable
supporting documentation to verify the underlying intercompany charges and
transactions.
SECTION 7.07. Intercompany Agreements; Guarantees. (a) All agreements
between Parent or its Subsidiaries, on the one hand, and the Company or any
Company Subsidiary, on the other hand, including but not limited to all
intercompany loans and the internal indemnities set forth on Schedule 7.07(a)
hereto (other than supply arrangements entered into in the ordinary course of
business, including without limitation, the contracts relating to the subject
matter listed under the heading "Internal Purchase Agreements" on Schedule
7.07(b) and other than those entered into in connection with the Transactions),
remaining in place as of the Closing Date shall be canceled or terminated on the
Closing Date.
(b) With respect to any contract relating to the subject matter listed
under the heading "External Purchase Agreements" on Schedule 7.07(b), Parent and
the Company will use all commercially reasonable efforts in cooperation with
each other to (i) provide or cause to be provided to the Company the benefits of
such contract not materially inconsistent with the benefits received by the
Company or the Company Subsidiaries prior to the Closing, (ii) cooperate in any
arrangement that is reasonable and lawful as to Parent and the Company, designed
to provide such benefits to the Company or those entities specified by the
Company, (iii) investigate the feasibility of assigning to the Company or such
Company Subsidiary any rights under such contracts with respect to goods or
services previously received by the Company or such Company Subsidiary and (iv)
enforce for the account of the Company or any Company Subsidiary any rights of
Parent arising from any contract, including the right to elect to terminate such
contract in accordance with the terms thereof at the request and sole expense of
the Company.
(c) Except as otherwise provided in this Agreement, (i) prior to the
Closing Date, Parent and the Company shall use commercially reasonable efforts
to terminate (x) all Guarantees by Parent or any of its Subsidiaries of any
obligations of the Company and the Company Subsidiaries (including, but not
limited to, any Guarantees in connection with any sale-leaseback transactions)
and (y) all Guarantees by the Company and the Company Subsidiaries of any
obligations of Parent or any of its Subsidiaries, and arrange for the Company
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(in the case of clause (x) above) or Parent (in the case of clause (y) above) to
assume the obligations of the Guaranteeing party under such Guarantees as soon
as possible after the Closing Date and (ii) after the Closing Date, Parent and
the Company shall continue to use commercially reasonable efforts to terminate
such Guarantees to the extent not terminated prior to the Closing Date. Schedule
7.07(c) sets forth all Guarantees by (A) Parent and its Subsidiaries of
obligations of the Company and the Company Subsidiaries and (B) the Company and
the Company Subsidiaries of obligations of Parent and its Subsidiaries.
SECTION 7.08. Tax Matters.
(a) Tax Returns. Parent shall file or cause to be filed when due all Tax
Returns that are required to be filed by or with respect to each consolidated,
combined or unitary group that includes the Company (or any Company Subsidiary)
and any Affiliate of Parent (other than the Company and the Company
Subsidiaries) for taxable years or periods beginning on or before the Closing
Date, and Parent shall pay (or cause to be paid) any Taxes due in respect of
such Tax Returns.
(b) Tax Indemnification.
(i) Parent Covered Taxes. Parent shall indemnify the Company and the
Company Subsidiaries and hold them harmless from and against any Liability
for: (A) income Taxes of the Company and the Company Subsidiaries for
taxable periods beginning on or before the Closing Date payable with
respect to any Tax Return for which the Company or any of the Company
Subsidiaries was included as a member of a consolidated, combined or
unitary group that includes Parent or any of its Affiliates (other than the
Company or any of the Company Subsidiaries) (other than Taxes which are the
Liability of the Company pursuant to Section 7.08(b)(ii)(A) or (C)) and (B)
income Taxes attributable to any member of the "affiliated group" (within
the meaning of Section 1504(a) of the Code) of which Parent (or any
predecessor or successor) is the common parent (other than Taxes related to
income of the Company or any Company Subsidiary) that arise under the
provisions of Treasury Regulation Section 1.1502-6(a). Parent shall pay to
the Company amounts due to the Company under this Section 7.08(b)(i) within
five Business Days before payment is required by law to be made by the
Company or any of its Affiliates to the relevant Taxing Authority. The
Company shall send to Parent written notice of the amount of each payment
that Parent is required to make under the prior sentence at least 10
Business Days before Parent is required to make such payments.
(ii) Company Covered Taxes. The Company shall indemnify Parent and its
Affiliates and hold them harmless from and against any Liability for: (A)
the Company Share of income Taxes of the Company and the Company
Subsidiaries for any taxable period including the Closing Date payable with
respect to any Tax Return (or exten-
-31-
sion thereof) for which the Company or any of the Company Subsidiaries was
included as a member of a consolidated, combined or unitary group that
includes Parent or any of its Affiliates (other than the Company or any of
the Company Subsidiaries), (B) all Taxes of the Company and the Company
Subsidiaries payable with any Tax Return (or extension thereof) other than
any Tax Return for which the Company or any of the Company Subsidiaries was
included as a member of a consolidated, combined or unitary group that
includes Parent or any of its Affiliates (other than the Company or any of
the Company Subsidiaries) and (C) any income Taxes of Parent or any of its
Affiliates attributable to any income or gain resulting from any excess
loss accounts relating to the Company or any of the Company Subsidiaries
ceasing to be a member of a consolidated, combined or unitary group that
includes Parent or any of its Affiliates (other than the Company or any of
the Company Subsidiaries). The "Company Share" of income Taxes shall be the
product of any income Taxes payable by Parent or its Affiliates (other than
income Taxes described in (C)) with respect to any Tax Return for which the
Company or any of the Company Subsidiaries was included as a member of a
consolidated, combined or unitary group that includes Parent or any of its
Affiliates (other than the Company or any of the Company Subsidiaries) to
the extent that such Taxes are paid with the filing of such Tax Return (or
any extension thereof) or as a result of the application of any refund,
overpayment or other amount payable to Parent or its Affiliates by the
relevant Taxing Authority and a fraction, (x) the numerator of which shall
be the product of the aggregate net taxable income (if positive) of the
Company and any of the Company Subsidiaries for the periods for which they
are included in such Tax Return multiplied by a fraction of which the
numerator is the number of days after March 31, 2002 on which the Company
or such Company Subsidiary is included in such group and the denominator is
the total number of days of inclusion of the Company or such Company
Subsidiary in such group in such taxable period, and (y) the denominator of
which shall be the taxable income (if positive) of all members for the
periods for which they are included in such Tax Return (determined without
including any income or gain giving rise to the income Taxes described in
(C)). The Company shall pay to Parent amounts due to Parent under clauses
(A) and (C) of this Section 7.08(b)(ii) within five Business Days before
payment is required by law to be made by Parent or any of its Affiliates to
the relevant Taxing Authority. Parent shall send to the Company written
notice of the amount of each payment that the Company is required to make
under the prior sentence at least 10 Business Days before the Company is
required to make such payment.
(iii) Allocable Taxes. To the extent that any income Taxes to which a
Tax Return described in Section 7.08(a) relates are attributable to any
income or gain resulting from any deferred intercompany transactions or
pursuant to Treas. Reg. 1.1502-13 (and any predecessor, successor or
similar provision) or any corresponding provision(s) of state law and to
the Company or any of the Company Subsidiaries ceasing to be a member of a
consolidated, combined or unitary group that includes Parent or any
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of its Affiliates (other than the Company or any of the Company
Subsidiaries), the Chief Executive Officer of Parent shall determine
whether those income Taxes shall be borne (i) by Parent, (ii) by the
Company, or (iii) 57.99% by Parent and 42.01% by the Company, any such
determination to be conclusively binding on Parent and the Company. The
procedures for payment by one party to the other provided in this Section
7.08(b) shall govern the payments of amounts determined under this Section
7.08(b)(iii).
(c) Refunds.
(i) Except as provided in paragraph (ii), Parent shall be entitled to
any Tax refund or credit received with respect to Taxes to which a Tax
Return described in Section 7.08(a) relates for a taxable year or period
beginning on or before the Closing Date, and to any other Tax refund or
credit received with respect to Taxes for a taxable year or period
beginning on or before the Closing Date to the extent that such Tax refund
results from losses or credits carried back from a Tax Return described in
Section 7.08(a) to a taxable year or period beginning on or before the
Closing Date. The Company shall, and shall cause the Company Subsidiaries
to, pay to Parent the amount of any Tax refunds or credits referred to in
the prior sentence upon receipt of such Tax refunds or credits by any of
the Company or the Company Subsidiaries. To the extent not otherwise paid
to Parent, Parent shall be entitled to transfer from any account of the
Company or any of the Company Subsidiaries managed or otherwise controlled
by Parent the amount of any such refund or credit after receipt by the
Company or any of the Company Subsidiaries of such refund or credit from
the relevant Taxing Authority.
(ii) The Company shall be entitled to any Tax refund or credit
received with respect to Taxes to which a Tax Return described in Section
7.08(a) relates for a taxable year or period beginning on or before the
Closing Date to the extent that such Tax refund results from losses or
credits carried back from a Tax Return of the Company or any of the Company
Subsidiaries for a taxable year or period beginning after the Closing Date.
(iii) At the request of the other, Parent and the Company shall, and
shall cause their respective Affiliates to, cooperate in the filing of any
claim for refund or credit and in obtaining any refund or credit for any
taxable period beginning on or before the Closing Date; provided, however,
that the Company shall not, and shall cause the Company Subsidiaries not
to, file any claim for such Tax refund or credit with respect to any
taxable year or period beginning before the Closing Date without the prior
written consent of Parent (which consent shall not be unreasonably
withheld).
(d) Assistance and Cooperation. After the Closing Date, each of Parent and
the Company shall, and shall cause their respective Affiliates to, provide to
the other party
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information and cooperation requested by the other party in connection with (i)
preparing any Tax Returns, and (ii) preparing for any audits of, or disputes
with any Taxing Authority regarding, any Tax Returns. Each of Parent and the
Company shall use reasonable efforts to minimize the amounts for which the
Company is liable under Section 7.08(b)(ii) and the amounts for which Parent is
liable under Section 7.08(b)(i).
(e) Contests.
(i) Notices. After the Closing Date, Parent and the Company each shall
notify the other party in writing within 15 days of the commencement of any
Tax audit or administrative or judicial proceeding, or any claim of any
Taxing Authority, affecting Taxes for which the other party may be liable.
Such notice shall include copies of any notice or other document received
from any Taxing Authority in respect of any such asserted Tax liability.
(ii) Control of Contests Involving Pre-Closing Periods. In the case of
an audit or administrative or judicial proceeding involving any asserted
liability for Taxes relating to any Tax Return described in Section
7.08(a), Parent shall have the right, at its expense, to control the
conduct of such audit or proceeding, but shall consult with the Company
with respect thereto.
(f) Tax Sharing Agreements. As of the Closing Date, Parent shall cause all
Tax sharing, Tax allocation or Tax indemnity agreements between the Company and
any Company Subsidiary, on the one hand, and any Affiliate of Parent other than
the Company and the Company Subsidiaries, on the other hand, to be terminated.
(g) Closing of the Books. Except as otherwise specifically provided in this
Agreement, for purposes of determining the liability of Parent or the Company
pursuant to this Section 7.08, in the case of income Taxes that are payable for
a period (or portion thereof) that includes (but does not end on) the Closing
Date, the tax items shall be allocated between the portion ending on the Closing
Date and the portion beginning after the Closing Date on an interim closing of
the books method.
(h) Overlap. To the extent that an indemnification obligation pursuant to
this Section 7.08 is duplicative of an indemnification obligation pursuant to
Article 9 of this Agreement, the provisions of this Section 7.08 shall govern
such indemnification, and indemnification shall not also be paid under Article 9
to such extent.
SECTION 7.09. Plans.
(a) Employment Status. The Company or one of the Company Subsidiaries shall
continue to employ all of the Employees who are actively employed by the Company
and the Company Subsidiaries on the Closing Date (each such employee being
hereafter referred
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to as a "Transferred Employee"), it being agreed that persons who are on layoff
or leave and who have a right to return to work at the Company or one of the
Company Subsidiaries or who are on short-term (not more than six months) medical
disability (including pregnancy leave) who do not thereafter become eligible for
long-term medical disability or other authorized leave (such as military, family
or other leaves where return to work is subject to statutory requirements) are
to be considered Employees who are actively employed, and it is also agreed that
persons on long-term medical disability or whose short-term medical disability
thereafter becomes a long-term medical disability and persons whose employment
has terminated or will terminate prior to the Closing Date without any right to
return to work are not to be considered Employees who are actively employed;
provided, however, that the provisions of this Section 7.09(a) shall not be
construed to limit the ability of the Company or the Company Subsidiaries to
terminate any such Employee at any time for any reason. For purposes of this
Agreement the terms "layoff," "right to return to work," "short-term
disability," "long-term disability" and "pregnancy leave" shall be construed in
accordance with the personnel policies of the Company and the Company
Subsidiaries and the collective bargaining agreements covering Employees, if
applicable, both as in effect as of the date hereof.
(b) Benefits and Compensation. The Company shall assume responsibility for
providing all Former Employees (including all Former Employees and Employees who
are on long-term disability as of the Closing Date) with all retiree medical
(including Medicare Part B), dental and life insurance coverage for which they
are or may become eligible under any retiree medical, dental or life insurance
program of Parent or any Subsidiary of Parent for Former Employees in effect as
of the date hereof. The Company shall assume responsibility for providing any
retiree medical (including Medicare Part B), dental and life insurance benefits
to the Employees, and the Company shall reimburse Parent for 42.01% of its
actual out-of-pocket cost attributable to retiree medical (including Medicare
Part B), dental and life insurance benefits for which the Corporate Employees
are or may become entitled after the Closing Date under any retiree medical,
dental or life insurance program of Parent or any Subsidiary of Parent as in
effect as of the date hereof.
(c) Pension Plans.
(i) Effective as of the Closing Date, except for Employees who
participate in the MascoTech, Inc. Union Employees Pension Plan (the "Union
Plan") or the IAM National Pension fund (the "IAM Plan"), the Transferred
Employees shall cease to participate in, or accrue any further benefits
under, any tax-qualified defined benefit plan of Parent or its
Subsidiaries; provided, however, that, to the extent permitted by
applicable law, the benefits of the Transferred Employees under any
tax-qualified defined benefit plan maintained by Parent or its Subsidiaries
(other than the Union Plan) shall be increased by crediting the service and
compensation of such Transferred Employees with Buyer and its Subsidiaries
through December 31, 2002. Effective on the Closing Date, neither the
Company nor any of the Company Subsidiaries shall have
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any responsibility for contributing to or under any tax-qualified defined
benefit plan maintained by Parent or its Subsidiaries. Except as set forth
below in the case of the Union Plan, all assets and liabilities of any
tax-qualified defined benefit plan maintained by Parent or any of its
Subsidiaries attributable to any Employee or Former Employee of the Company
or any of the Company Subsidiaries shall be retained by Parent.
(ii) The Company shall establish, as of the Closing Date, a
tax-qualified defined benefit plan (the "Company's Pension Plan") for
Employees and Former Employees participating in the Union Plan. Subject to
the transfer of assets described in Section 7.09(c)(iii), the Company's
Pension Plan shall assume the liabilities as of the Closing Date for the
benefits of all Employees and Former Employees participating in the Union
Plan.
(iii) On a day which is within 60 days after the later of (i) the date
upon which the Company delivers to Parent notice that the Company's
actuaries, pursuant to Section 7.09(c)(v) hereof, have reviewed the
calculations of Parent's actuaries and are satisfied that such calculations
are in accordance with this Agreement (or have failed to do so within the
60 day period provided for in Section 7.09(c)(v)), or (ii) the day upon
which the Company delivers to Parent a favorable IRS determination letter
or an opinion of the Company's counsel, reasonably satisfactory to Parent's
counsel, to the effect that the terms of the Company's Pension Plan and its
related trust qualify, as to form, under Section 401(a) and Section 501(a)
of the Code, Parent shall cause the trustee under the Union Plan ("Parent's
Trustee") to transfer to the trustee of the Company's Pension Plan (the
"Company's Trustee") cash assets or such other assets agreeable to the
Company's Trustee and Parent's Trustee in an amount equal to the amount
necessary to satisfy the applicable requirements of Sections 414(1) and
401(a)(12) of the Code, computed based on the actuarial assumptions set
forth on Schedule 7.09(c)(iii) hereof.
(iv) The amount transferred pursuant to Section 7.09(c)(iii) shall be
adjusted for investment earnings or losses of the trust in which the Union
Plan assets are held for the period between the Closing Date and the actual
date of transfer and reduced by the amount of any benefit payments actually
paid from such plan to Employees and Former Employees during such period
and a proportionate share of administrative expenses for such period if
such administrative expenses are properly chargeable (and are actually
charged) to the Union Plan. Parent shall estimate such earnings as of the
actual date of transfer and then within 90 days of the actual date of
transfer, Parent shall cause Parent's Trustee to remit to the Company's
Trustee or the Company shall cause the Company's Trustee to remit to
Parent's Trustee, as appropriate, an amount equal to the difference between
the actual rate of earnings for such period and the estimated amount
transferred as of the actual date of transfer (such difference to be
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adjusted for investment earnings at the State Street Bank short-term rate
for the period between the actual date of transfer and the date such
difference is paid to Parent or the Company). Notwithstanding anything in
this Section 7.09(c) to the contrary, following the Closing Date and until
the date of the respective transfers of assets to trusts under the
Company's Pension Plan, Parent shall cause Parent's Trustee to continue to
provide benefits to plan participants in accordance with the terms of the
Union Plan to the extent that such benefits have accrued on or before the
Closing Date. To the extent that benefits have accrued after the Closing
Date, following the transfer of assets pursuant to Section 7.09(c)(iii),
the Company shall pay such benefits to plan participants (retroactively, if
applicable) in accordance with the terms of the Company's Pension Plan.
(v) The assets caused to be transferred pursuant to Section
7.09(c)(iii) shall be calculated by Parent's actuary, and shall be subject
to review by the Company's actuary for the purpose of confirming that the
calculation was made in accordance with (i) the actuarial assumptions and
methods set forth in this Section 7.09(c) and (ii) generally accepted
actuarial practice. As soon as practicable after the Closing Date, Parent
shall provide the Company with a detailed summary of the calculations
described in this Section 7.09(c) and any back-up data reasonably requested
by the Company. If the Company or the Company's actuary do not notify
Parent to the contrary within 60 days after the delivery to the Company of
such detailed summary and data, the calculations of Parent's actuary
pursuant to this Section 7.09(c) shall be deemed to be final, conclusive
and binding on the parties. If, however, the Company notifies Parent in
writing within such period that it and its actuary believe that the
calculations were not prepared in accordance with the requirements of this
Section 7.09(c) and such notice specifies (i) the precise items of the
calculations challenged, (ii) the basis of the challenge and (iii) the
amount of the adjustment they propose with respect to each such item, the
parties will then attempt to resolve their differences with respect
thereto. If the parties are unable to resolve their dispute within 30 days
after the date the Company notifies Parent of the disputed items, the
disputed items shall be referred to an international benefits consulting
firm (the "Actuary Firm") mutually acceptable to the Company and Parent.
Parent and the Company shall request that the Actuary Firm resolve such
disputes and report to Parent and the Company upon such remaining disputed
items within 45 days after such referral. The decision of the Actuary Firm
shall be final, conclusive and binding on the parties hereto. The fees and
expenses of the Actuary Firm in conducting this assignment shall be borne
equally by Parent and the Company.
(d) Defined Contribution Plan.
(i) As soon as practical after the Closing Date, Parent shall cause
the trustee of Parent's defined contribution plans listed on Schedule
7.09(d)(i) hereof
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("Parent's Savings Plans") to transfer all of the assets and liabilities
thereof attributable to Employees and Former Employees of the Company and
the Company Subsidiaries to one or more defined contribution plans
maintained by the Company. Unless otherwise agreed by Parent and the
Company, the assets to be transferred shall be cash and promissory notes
for loans made to Employees and Former Employees of the Company and the
Company Subsidiaries under the terms of the Parent's Savings Plans.
(ii) As of the Closing Date, the Company shall assume the stand-alone
defined contribution plans listed on Schedule 7.09(d)(ii) and all
liabilities, and shall receive all assets held, thereunder as of the
Closing Date.
(e) Collective Bargaining Agreements. Effective as of the Closing Date, the
Company or a Company Subsidiary shall assume the collective bargaining
agreements listed on Schedule 7.09(e), including any obligation to contribute to
the IAM Plan. The Company acknowledges that on the Closing Date, the Company or
such Company Subsidiary will become a successor employer under such collective
bargaining agreements and agree to assume all obligations of Parent and its
Subsidiaries under such agreements.
(f) Severance and Other Liability.
(i) Except as otherwise expressly set forth in this Section 7.09, the
Company or one of the Company Subsidiaries shall assume, discharge, pay and
be solely liable for and shall indemnify and hold Parent and its
Subsidiaries harmless from and against all Losses relating to any claim or
liability arising out of the employment of the Employees and Former
Employees (including any liability for severance benefits and supplemental
executive retirement plans) which is payable on or after the Closing Date,
including claims or liability under any Plan; provided, however, that the
Company and the Company Subsidiaries shall not be liable for any claim
arising from an event occurring prior to the Closing Date to the extent
that it is covered by insurance (not including any amount reasonably
allocable to self-insured retention) carried by Parent or a Subsidiary of
Parent. The Company shall assume liability under the MascoTech, Inc. Key
Employee Retention Plan and the MascoTech Retirement Benefit Restoration
Plan for the Transferred Employees who participate in such plans, and the
Company shall either assume the NI Industries, Inc. Supplemental Executive
Retirement Plan for Key Employees and the Employment Agreements and Change
of Control Agreements listed on Schedule 7.09(f)(i) hereto or enter into
substitute agreements in replacement thereof. The Company shall reimburse
Parent upon its written demand (accompanied by appropriate documentation)
for 42.01% of its actual out-of-pocket costs paid on or after the Closing
Date to Corporate Employees as severance benefits, supplemental executive
retirement benefits and pursuant to the March 2001 Cash Grants, in each
case as such benefits exist on the date hereof.
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(ii) The Company shall pay an amount to Parent equal to the excess of
(A) the sum of (i) the excess of the "accumulated benefit obligation" of
each of the MascoTech, Inc. Pension Plan and MascoTech, Inc. Master Hourly
Employees Pension Plan attributable to Employees and Former Employees, over
the amount of assets of each such plan attributable to Employees and Former
Employees, all calculated as of the Closing Date, and (ii) the FAS 87
service cost resulting from Parent's agreement to credit additional service
and compensation set forth in Section 7.09(c)(i) hereof (determined using
the actuarial assumptions and methods utilized by Parent in determining the
service cost for such plans) over (B) $8,000,000. Such "accumulated benefit
obligation" for each such plan shall be computed using a discount rate of
7.25%, compounded annually and the other actuarial assumptions and methods
utilized by Parent in determining the "accumulated benefit obligation" of
such plans for FAS 87 purposes as of the Closing Date. The amount of plan
assets allocable to the Employees and Former Employees shall be determined
by multiplying the actual fair market value of the assets of each plan on
the Closing Date by a fraction, the numerator of which is the "accumulated
benefit obligation" (determined as set forth above) of the applicable plan
attributable to the Employees and Former Employees (the "Company ABO"), and
the denominator of which is the sum of the Company ABO and the "projected
benefit obligation" (computed using a discount rate of 7.25%, compounded
annually and the other actuarial assumptions and methods utilized by Parent
in determining the "projected benefit obligation" of such plans for FAS 87
purposes as of the Closing Date) attributable to participants and former
participants in the plan other than the Employees and Former Employees. The
computations shall be made by Parent's actuary, and they shall be subject
to review in accordance with the procedure set forth in Section 7.09(c)(v)
above. An estimate of the amount payable under this Section 7.09(f)(ii)
shall be paid as a dividend declared by the Company payable to shareholders
of record as of the date prior to the Closing Date by the Company to Parent
on the Closing Date. Following final agreement on the calculations
described herein, Parent shall remit to the Company or the Company shall
remit to Parent, as appropriate, an amount equal to the difference between
the actual amount owed and the estimated amount transferred as of Closing
Date (such difference to be adjusted for investment earnings at the State
Street Bank short-term rate for the period between the Closing Date and the
date such difference is paid to Parent or the Company).
(iii) As of the Closing Date, the Company or one of the Company
Subsidiaries shall assume the Foreign Plans listed on Schedule 7.09(f)(iii)
and all Liabilities thereunder, and shall receive all assets held
thereunder, as of the Closing Date.
(g) Worker's Compensation Claims. The Company shall assume liability for
all suits, claims, proceedings and actions pending as of or commenced after the
Closing Date resulting from actual or alleged harm or injury to Employees or
Former Employees regardless of when the incident or accident giving rise to such
liability occurred or occurs. The
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Company shall make all necessary arrangements to assume all worker's
compensation claim files, whether open or closed, as of the Closing Date, and
the Company shall make the necessary arrangements for assuming the continued
management of such liabilities.
ARTICLE 8
CONDITIONS TO CLOSING
SECTION 8.01. Conditions to Obligations of Each Party. The obligations of
Buyer, Parent and the Company to consummate the Transactions are subject to the
satisfaction of the following conditions:
(a) any applicable waiting period under the HSR Act or any other
Antitrust Laws relating to the Transactions shall have expired or been
terminated;
(b) no provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the consummation of the Closing;
(c) no court, arbitrator or Governmental Authority shall have issued
any order, and there shall not be any statute, rule or regulation,
restraining or prohibiting the consummation of the Closing or the effective
operation of any material portion of the business of the Company and the
Company Subsidiaries after the Closing Date;
(d) all actions by or in respect of, or filings with, any Governmental
Authority required to permit the consummation of the Closing shall have
been taken, made or obtained;
(e) all licenses, permits, qualifications, consents, waivers,
approvals, authorizations or orders shall have been obtained and made by
Parent, except where the failure to receive such licenses, permits,
qualifications, consents, waivers, approvals, authorizations or orders,
individually or in the aggregate with all other such failures, would not be
reasonably expected to have a Material Adverse Effect (either before or
after giving effect to the Transactions); and
(f) Parent shall have received the consent (the "Required Consent") of
the Required Lenders (as defined in the Parent Credit Agreement) pursuant
to Section 10.02 of the Parent Credit Agreement to the Transactions and the
modifications to the Parent Credit Agreement summarized on Schedule 8.01
hereto.
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SECTION 8.02. Conditions to the Obligations of Buyer. The obligations of
Buyer to consummate the Closing are subject to the satisfaction of the following
further conditions:
(a) (i) each of Parent and the Company shall have performed in all
material respects all of its obligations hereunder required to be performed
by it at or prior to the Closing Date, (ii) the representations and
warranties of Parent and the Company contained in this Agreement and in any
certificate or other writing delivered by Parent or the Company pursuant
hereto that are qualified by materiality or Material Adverse Effect shall
be true, and all other such representations and warranties of Parent or the
Company shall be true in all material respects, in each case at and as of
the Closing Date as if made at and as of the Closing Date (except to the
extent that a representation or warranty expressly speaks as of a specified
date or period of time) and (iii) Buyer shall have received a certificate
signed by a duly authorized officer of Parent and the Company to the
foregoing effect;
(b) the Senior Subordinated Notes shall have been issued and sold by
the Company on such terms and conditions as are reasonably acceptable to
Buyer and the financing contemplated by the Commitment Letter to be
provided by the Bank shall have been completed on substantially the terms
and conditions identified in such Commitment Letter or on such other terms
and conditions or involving such other financing sources as are reasonably
acceptable to Buyer and are not more onerous to the Company; and
(c) all actions shall have been taken, or consents obtained, with
respect to sale-leasebacks of the Company's and the Company Subsidiaries'
properties and other material contracts to which the Company or any Company
Subsidiary is a party such that the Closing of the Transactions will not
constitute a default under or cause or permit the termination,
cancellation, acceleration or other change of any right or obligation or
the loss of any benefit to which the Company or any Company Subsidiary is
entitled under any provision of any agreement or other instrument binding
upon the Company or any Company Subsidiary except for such failures to
obtain any such consent or other action, defaults, terminations,
cancellations, accelerations, changes or losses that would not be
reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect.
SECTION 8.03. Conditions to the Obligations of Parent. The obligations of
Parent to consummate the Closing are subject to the satisfaction of the
following further conditions:
(a) (i) Buyer shall have performed in all material respects all of its
obligations hereunder required to be performed by it at or prior to the
Closing Date, (ii) the
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representations and warranties of Buyer contained in this Agreement and in
any certificate or other writing delivered by Buyer pursuant hereto that
are qualified by materiality shall be true, and all other such
representations or warranties of Buyer shall be true in all material
respects, in each case at and as of the Closing Date as if made at and as
of the Closing Date (except to the extent that a representation or warranty
expressly speaks as of a specified date or period of time) and (iii) Parent
shall have received a certificate signed by a duly authorized officer of
Buyer to the foregoing effect; and
(b) the Board of Directors of Parent shall have received the Fairness
Opinion.
ARTICLE 9
OBLIGATIONS AFTER CLOSING
SECTION 9.01. Indemnification.
(a) Indemnification by Parent. Subject to the other provisions of this
Article 9, Parent shall indemnify Buyer, the Company, the Company Subsidiaries
and their directors, officers, managers, members, employees and agents
(collectively, the "Company Indemnified Parties") from and against and shall
reimburse such Company Indemnified Parties in respect of any and all Losses
resulting from or arising out of (i) any Parent Liabilities (whether arising
prior to or after the Closing), (ii) the failure of Parent to perform any of its
obligations under this Agreement in any material respect, and (iii) all
Liabilities arising out of the business, operations and assets of Parent and
Parent's Subsidiaries after the Closing.
(b) Indemnification by the Company. Except as otherwise provided in
Sections 7.08 and 7.09 and subject to the other provisions of this Article 9,
the Company shall indemnify Parent, its Subsidiaries and their present and
former directors, officers, managers, members, employees and agents
(collectively, the "Parent Indemnified Parties") from and against and shall
reimburse such Parent Indemnified Parties in respect of any and all Losses
resulting from or arising out of (i) any of the Company Liabilities (whether
arising prior to or after the Closing), (ii) the failure of the Company to
perform any of its obligations under this Agreement in any material respect, and
(iii) all Liabilities arising out of the business, operations and assets of the
Company and any Company Subsidiary after the Closing.
(c) Indemnification for Guarantees. If any Guarantee shall be in effect
after the Closing Date, the Company shall pay (in the case of clause (x) of
Section 7.07(c)) or Parent shall pay (in the case of clause (y) of Section
7.07(c)) all debt covered by such Guarantee as the same shall become due and
payable, and shall indemnify and hold harmless the
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Guaranteeing party thereunder with respect to any payments made and Losses
incurred by such Guaranteeing party pursuant to any Guarantee, provided that
such payments have been made in good faith.
SECTION 9.02. Treatment of Shared Contracts. With respect to any Shared
Contractual Liabilities pursuant to, under or relating to a given Shared
Contract, such Shared Contractual Liabilities shall be allocated between the
parties as follows: (i) first, if a Liability is incurred exclusively in respect
of a benefit received by Parent and any of its Subsidiaries (other than the
Company and the Company Subsidiaries) or by the Company or any Company
Subsidiary, the party receiving such benefit shall be responsible for such
Liability; and (ii) second, if a Liability cannot be so allocated under clause
(i), such Liability shall be allocated to the parties based on the relative
proportions of total benefit received (over the term of the Shared Contract,
measured as of the date of the allocation) under the relevant Shared Contract.
Notwithstanding the foregoing, each party shall be responsible for any or all
Liabilities arising out of or resulting from its breach of the relevant Shared
Contract.
SECTION 9.03. Procedures. The party seeking indemnification under Section
9.01 (the "Indemnified Party") agrees to give prompt notice to the party against
whom indemnity is sought (the "Indemnifying Party") of the assertion of any
claim or the commencement of any suit, action or proceeding in respect of which
indemnity may be sought under such Section. The Indemnifying Party may at the
request of the Indemnified Party participate in and control the defense of any
such suit, action or proceeding at its own expense. The Indemnifying Party shall
not be liable under Section 9.01 for any settlement effected without its consent
of any claim, litigation or proceeding in respect of which indemnity may be
sought hereunder.
SECTION 9.04. Limitations on Indemnification. (a) Except as otherwise
provided in Section 9.01(c), Parent shall have no obligation to indemnify any
Company Indemnified Party from and against any Losses until the aggregate Losses
suffered by all Company Indemnified Parties exceed $50,000, at which time Parent
shall be liable to the Company Indemnified Parties for the entire amount of all
aggregate Losses suffered by all Company Indemnified Parties. The foregoing
limitation shall not apply to any Losses suffered by the Company Indemnified
Parties with respect to Taxes.
(b) Except as otherwise provided in Section 9.01(c), the Company shall have
no obligation to indemnify any Parent Indemnified Party from and against any
Losses until the aggregate Losses suffered by all Parent Indemnified Parties
exceed $50,000, at which time the Company shall be liable to the Parent
Indemnified Parties for the entire amount of all aggregate Losses suffered by
all Parent Indemnified Parties. The foregoing limitation shall not apply to any
Losses suffered by the Parent Indemnified Parties with respect to Taxes.
(c) There shall be no time limit on claims under this Agreement.
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(d) The liability of Parent or the Company under this Article 9 shall be
reduced by an amount equal to (i) any net Tax Benefit realized by the
Indemnified Party (resulting from any Loss suffered by the Indemnified Party
that forms the basis of the Indemnifying Party's obligation hereunder), giving
effect to any Tax liabilities of the Indemnified Party arising as a result of
any payments made by an Indemnifying Party with respect to such claim for
indemnification; and (ii) the value of any insurance benefit realized by the
Indemnified Party in connection with any Loss suffered by such Person that forms
the basis of the Indemnifying Party's obligation hereunder. Each of the Company
and Parent shall use its commercially reasonable efforts to pursue any insurance
benefits covering any Loss suffered by any Indemnified Party that forms the
basis of such Indemnified Party's claim against such Indemnifying Party.
(e) Each party agrees that from and after the Closing, its sole remedy with
respect to any claims for money damages relating to the Transactions or the
subject matter of this Agreement shall be pursuant to the express
indemnification provisions set forth in this Agreement.
ARTICLE 10
TERMINATION
SECTION 10.01. Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) by mutual written agreement of Buyer and Parent; or
(b) by either Buyer or Parent, if:
(i) the Closing has not been consummated on or before September
30, 2002 (the "End Date"), provided that the right to terminate this
Agreement pursuant to this Section 10.01(b)(i) shall not be available
to any party whose breach of any provision of this Agreement results
in the failure of the Transactions to be consummated by such time;
(ii) there shall be any law or regulation that makes consummation
of the Transactions illegal or otherwise prohibited or any judgment,
injunction, order or decree of any Governmental Authority having
competent jurisdiction enjoining Buyer or Parent from consummating the
Transactions is entered and such judgment, injunction, order or decree
shall have become final and nonappealable; or
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(c) by Buyer, if a breach of or failure to perform any representation,
warranty, covenant or agreement set forth in this Agreement shall have
occurred that would cause the condition set forth in Section 8.02(a) hereof
not to be satisfied, and such condition is incapable of being satisfied by
the End Date; or
(d) by Parent, if a breach of or failure to perform any
representation, warranty, covenant or agreement on the part of Buyer set
forth in this Agreement shall have occurred that would cause the condition
set forth in Section 8.03(a) hereof not to be satisfied, and such condition
is incapable of being satisfied by the End Date.
The party desiring to terminate this Agreement pursuant to this Section
10.01 (other than pursuant to Section 10.01(a)) shall give notice of such
termination to the other parties.
SECTION 10.02. Effect of Termination. If this Agreement is terminated
pursuant to Section 10.01 hereof, this Agreement shall become void and of no
effect without liability of any party (or any stockholder, member, manager,
director, officer, employee, agent, consultant or representative of such party)
to the other parties hereto. The provisions of Sections 7.05, 11.06 and 11.07
shall survive any termination hereof pursuant to Section 10.01.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile transmission) and
shall be given,
if to Buyer, to:
Heartland Industrial Partners, L.P.
00 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxxxxxx
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if to Parent, to:
Metaldyne Corporation
00000 Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: General Counsel
if to the Company:
TriMas Corporation
00000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxx Xxxxx
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5:00 p.m., and such day is
a Business Day in the place of receipt. Otherwise, any such notice, request or
communication shall be deemed not to have been received until the next
succeeding Business Day in the place of receipt.
SECTION 11.02. Survival of Representations and Warranties. The
representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto shall not survive the
Closing Date of this Agreement, except for the agreements set forth in Sections
2.04, 7.05, 7.06, 7.07, 7.08, 7.09, Article 9 and Article 11.
SECTION 11.03. Amendments; No Waivers. (a) Any provision of this Agreement
may be amended or waived prior to the Closing Date if, but only if, such
amendment or waiver is in writing and is signed, in the case of an amendment, by
each party to this Agreement or, in the case of a waiver, by each party against
whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
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SECTION 11.04. Expenses. Except as otherwise provided for in this
Agreement, all costs and expenses incurred in connection with this Agreement
shall be paid by the party incurring such cost or expense.
SECTION 11.05. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto, except that Buyer may transfer
or assign, from time to time in whole or in part, to one or more Persons, the
right to purchase Shares hereunder, but any such transfer or assignment will not
relieve Buyer of its obligations hereunder and provided, further, that Buyer
shall be obligated to assign its right to purchase the Shares hereunder to those
Parent shareholders properly exercising their rights of preemption under the
Parent Shareholders Agreement. Any such assignee shall, by virtue of purchasing
Shares hereunder, be deemed to have made severally, with respect to itself, the
representations and warranties set forth in Article 5 hereof.
SECTION 11.06. Governing Law. The validity, construction and effect of this
Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of Delaware, without giving effect to the principles of
conflicts of law of such state.
SECTION 11.07. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS.
SECTION 11.08. Counterparts; Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto. No provision of
this Agreement is intended to confer any rights, benefits, remedies, obligations
or liabilities hereunder upon any Person other than the parties hereto and their
respective successors and assigns.
SECTION 11.09. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes agreements and understandings, both oral and written,
between the parties with respect to the subject matter of this Agreement.
Exhibits referred to herein are incorporated by reference herein and shall
constitute a part of this Agreement.
SECTION 11.10. Captions. The captions herein are included for convenience
of reference only and shall be ignored in the construction or interpretation
hereof.
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SECTION 11.11. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Upon such a determination, the parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner so that the Transactions be consummated as
originally contemplated to the fullest extent possible.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
HEARTLAND INDUSTRIAL PARTNERS, L.P.
By: Heartland Industrial Associates L.L.C., its General
Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Managing Member
TRIMAS CORPORATION
By: /s/ Xxxxx Xxxxx
---------------------------------------------------
Name: Xxxxx Xxxxx
Title: President
METALDYNE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Chairman & Chief Executive Officer
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