STOCK PURCHASE AGREEMENT BY AND BETWEEN TECUMSEH PRODUCTS COMPANY AND FRANKLIN ELECTRIC CO., INC. Dated as of March 17, 2006
Exhibit
2.1
STOCK
PURCHASE AGREEMENT
BY
AND
BETWEEN
TECUMSEH
PRODUCTS COMPANY
AND
FRANKLIN
ELECTRIC CO., INC.
Dated
as
of March 17, 2006
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5
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TABLE
OF CONTENTS
|
PAGE
|
|
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|
SALE
AND PURCHASE OF SHARES
|
1
|
|
1.1
|
Sale
and Purchase of Shares
|
1
|
|
ARTICLE
2
|
PURCHASE
PRICE AND PAYMENT
|
1
|
|
2.1
|
Purchase
Price
|
1
|
|
2.2
|
Adjustment
of Initial Purchase Price
|
2
|
|
2.3
|
Payment
of Initial Purchase Price and the Adjustment Amount
|
4
|
|
2.4
|
Allocation
of Final Purchase Price
|
4
|
|
ARTICLE
3
|
CLOSING
AND TERMINATION
|
4
|
|
3.1
|
Closing
Date
|
4
|
|
3.2
|
Closing
Deliveries
|
4
|
|
3.3
|
Termination
of Agreement
|
4
|
|
3.4
|
Procedure
Upon Termination
|
5
|
|
3.5
|
Effect
of Termination
|
5
|
|
ARTICLE
4
|
REPRESENTATIONS
AND WARRANTIES OF THE SELLER
|
5
|
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4.1
|
Organization
and Good Standing
|
5
|
|
4.2
|
Authorization
of Agreement
|
6
|
|
4.3
|
Capitalization
|
6
|
|
4.4
|
Corporate
Records
|
7
|
|
4.5
|
Conflicts;
Consents of Third Parties
|
7
|
|
4.6
|
Ownership
and Transfer of Shares
|
7
|
|
4.7
|
Financial
Statements; Inventory; Trade Receivables
|
8
|
|
4.8
|
No
Undisclosed Liabilities
|
8
|
|
4.9
|
Absence
of Certain Developments
|
9
|
|
4.10
|
Certain
Tax Matters
|
9
|
|
4.11
|
Real
Property
|
11
|
|
4.12
|
Title,
Sufficiency and Condition of Assets
|
12
|
|
4.13
|
Technology
and Intellectual Property
|
13
|
|
4.14
|
Material
Contracts
|
15
|
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6
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TABLE
OF CONTENTS
(continued)
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PAGE
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|
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4.15
|
Employee
Benefits
|
18
|
|
4.16
|
Labor
|
19
|
|
4.17
|
Litigation
|
19
|
|
4.18
|
Compliance
with Laws; Permits
|
20
|
|
4.19
|
Environmental
Matters and Safety Matters
|
20
|
|
4.20
|
Financial
Advisors
|
22
|
|
4.21
|
Insurance
|
22
|
|
4.22
|
Product
Liability
|
22
|
|
4.23
|
Arrangements
with Related Parties
|
23
|
|
4.24
|
Customers
and Suppliers
|
23
|
|
4.25
|
No
Other Representations or Warranties
|
24
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|
ARTICLE
5
|
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
|
24
|
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5.1
|
Organization
and Good Standing
|
24
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|
5.2
|
Authorization
of Agreement
|
24
|
|
5.3
|
Conflicts;
Consents of Third Parties
|
24
|
|
5.4
|
Litigation
|
25
|
|
5.5
|
Investment
Intention
|
25
|
|
5.6
|
Financial
Advisors
|
25
|
|
5.7
|
Sufficiency
of Funds
|
25
|
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5.8
|
Acknowledgment
|
25
|
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ARTICLE
6
|
COVENANTS
|
26
|
|
6.1
|
Access
to Management
|
26
|
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6.2
|
Conduct
of Business Pending the Closing
|
26
|
|
6.3
|
Employee
Matters
|
29
|
|
6.4
|
Preservation
of Records
|
32
|
|
6.5
|
Confidentiality;
Publicity
|
32
|
|
6.6
|
Use
of Name
|
33
|
|
6.7
|
Insurance
|
33
|
|
6.8
|
Reasonable
Commercial Efforts
|
35
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TABLE
OF CONTENTS
(continued)
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PAGE
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6.10
|
Contacts
with Suppliers, Employees and Customers
|
35
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6.11
|
Seller
Financial Commitments
|
36
|
|
6.12
|
Intellectual
Property Covenants
|
36
|
|
6.13
|
No
Breaches
|
36
|
|
6.14
|
Noncompetition
and Nonsolicitation
|
36
|
|
6.15
|
No
Solicitation
|
38
|
|
6.16
|
Additional
Financial Statements
|
38
|
|
6.17
|
Termination
of Related Party Arrangements
|
38
|
|
6.18
|
Section
338 Elections and Forms
|
38
|
|
6.19
|
Releases
|
39
|
|
6.20
|
Interon
Award
|
39
|
|
ARTICLE
7
|
CONDITIONS
TO CLOSING
|
40
|
|
7.1
|
Condition
Precedent to Obligations of the Purchaser
|
40
|
|
7.2
|
Condition
Precedent to Obligations of the Seller
|
40
|
|
7.3
|
Conditions
to Each Party’s Obligations
|
41
|
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ARTICLE
8
|
DOCUMENTS
TO BE DELIVERED
|
41
|
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8.1
|
Documents
to be Delivered by the Seller
|
41
|
|
8.2
|
Documents
to be Delivered by the Purchaser
|
42
|
|
ARTICLE
9
|
INDEMNIFICATION
|
43
|
|
9.1
|
General
Indemnification
|
43
|
|
9.2
|
Limitations
on Seller’s Indemnification for Breaches of Representations and
Warranties
|
|
|
9.3
|
Limitations
on Purchaser’s Indemnification for Breaches of Representations and
Warranties
|
45
|
|
9.4
|
Limitations
on Indemnification for Breaches of Section 4.19
|
45
|
|
9.5
|
Survival
of Representations and Warranties and Covenants
|
46
|
|
9.6
|
General
Indemnification Procedures
|
47
|
|
9.7
|
Tax
Matters
|
48
|
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8
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TABLE
OF CONTENTS
(continued)
|
PAGE
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9.8
|
Exclusive
Remedies
|
52
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|
ARTICLE
10
|
MISCELLANEOUS
|
53
|
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10.1
|
Certain
Definitions
|
53
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10.2
|
Payment
of Transfer Taxes
|
61
|
|
10.3
|
Expenses
|
61
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|
10.4
|
Further
Assurances
|
62
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10.5
|
Governing
Law
|
62
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10.6
|
Submission
to Jurisdiction; Consent to Service of Process
|
62
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10.7
|
Recovery
of Fees by Prevailing Party
|
62
|
|
10.8
|
Entire
Agreement; Amendments and Waivers
|
62
|
|
10.9
|
Table
of Contents and Headings
|
63
|
|
10.10
|
Notices
|
63
|
|
10.11
|
Severability
|
63
|
|
10.12
|
Binding
Effect; No Third Party Beneficiaries; Assignment
|
64
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10.13
|
Disclosure
Schedules
|
64
|
|
10.14
|
Rules
of Construction
|
64
|
|
10.15
|
Counterparts
|
64
|
|
10.16
|
Schedules,
Annexes, and Exhibits
|
64
|
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TABLE
OF SCHEDULES, ANNEXES AND EXHIBITS
Schedules
|
SCHEDULE
|
NAME
|
|
2.3.1
|
Seller
Accounts
|
|
2.3.3
|
Purchaser
Accounts
|
|
4.3.5
|
Contractual
Obligations to Provide Funds
|
|
4.5.1
|
Conflicts
|
|
4.5.2
|
Consents
|
|
4.7
|
Historical
Financial Statements
|
|
4.7.2
|
Interim
Financial Statements
|
|
4.8
|
No
Undisclosed Liabilities
|
|
4.9
|
Absence
of Certain Developments
|
|
4.10
|
Tax
Matters
|
|
4.11
|
Real
Property
|
|
4.11.10
|
Leased
Warehouse Property
|
|
4.12.1
|
Personal
Liens and Title Defects
|
|
4.13.1
|
Company
Intellectual Property
|
|
4.13.2
|
Ownership
of Company Intellectual Property
|
|
4.13.3
|
Assignments
of Encumbrances on Company Intellectual Property
|
|
4.13.4
|
Intellectual
Property or Technology Contracts
|
|
4.13.5
|
Intellectual
Property or Technology Royalty Obligations
|
|
4.13.6
|
Intellectual
Property Conflicts/Infringement
|
|
4.13.7
|
Contracts
Regarding Company Intellectual Property Rights
|
|
4.13.8
|
Intellectual
Property Claims
|
|
4.13.9
|
Company
Intellectual Property Access
|
|
4.13.10
|
Material
Computer Software
|
|
4.13.12
|
Intellectual
Property Subject of Assignment or Work for Hire
Agreement
|
|
4.14.1
|
Material
Contracts
|
|
4.14.3
|
Consents
to Material Contracts
|
|
4.14.4
|
Proportionality
of Consideration Under Material Contracts
|
|
4.15.1
|
Company
Plans
|
|
4.16.3
|
Work
Actions
|
|
4.16.4
|
Labor
Charges
|
|
4.17
|
Litigation
|
|
4.19
|
Environmental
Matters
|
|
4.21
|
Insurance
|
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4.22
|
Product
Liability
|
|
4.23.1
|
Related
Party Contracts
|
|
4.23.2
|
Related
Party Relationships
|
|
4.24
|
Customers
and Suppliers
|
|
5.3.2
|
Purchaser
Consents
|
|
6.2
|
Conduct
of Business Pending the Closing
|
|
6.2.2.11
|
Tax
Returns to be Filed
|
|
6.3.9
|
Company
Change in Control/Severance Agreements
|
|
6.14.1
|
Little
Giant Pump Company Product Functions
|
|
6.14.1A
|
Company
Pumps
|
|
6.14.1B
|
M.P.
Pumps & Vairex Pumps
|
|
6.14.1C
|
Pumps
produced by M. P. Pumps and the Company
|
|
6.17
|
Surviving
Related Party Contracts
|
Annexes
Annex 1 List
of
individuals to be included in the definition of “Knowledge of the
Seller”
Exhibits
Exhibit
A Form
of
Section 1445(b)(2) Tax Certificate
Exhibit
B Accounting
Principles
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STOCK
PURCHASE AGREEMENT, dated as of March 17, 2006 (this “Agreement”),
by
and between Franklin
Electric Co., Inc.,
a
corporation incorporated and existing under the laws of Indiana (the
“Purchaser”),
and
Tecumseh
Products Company,
a
corporation incorporated and existing under the laws of Michigan (the
“Seller”).
The
Purchaser and the Seller are each sometimes referred to herein individually
as a
“Party”
and
together as the “Parties”.
W
I T N E S S E T H:
WHEREAS,
the Seller owns all of the issued and outstanding shares (the “Shares”)
of
Capital Stock of Little Giant Pump Company, a corporation organized under the
laws of the State of Oklahoma (the “Company”);
and
WHEREAS,
the Seller desires to sell to the Purchaser, and the Purchaser desires to
purchase from the Seller, the Shares for the Final Purchase Price and upon
the
terms and conditions hereinafter set forth; and
WHEREAS,
certain terms used in this Agreement are defined in Section 10.1;
NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter contained, the Parties hereby agree as
follows:
ARTICLE
1
SALE
AND
PURCHASE OF SHARES
1.1 Sale
and Purchase of Shares.
Upon
the terms and subject to the conditions contained herein, at the Closing as
provided in Section 3.1,
the
Seller shall sell, assign, transfer, convey and deliver the Shares to the
Purchaser, and the Purchaser shall purchase, for the Final Purchase Price,
the
Shares free and clear of all Liens from the Seller. The purchase and sale of
the
Shares pursuant to this Agreement shall be effective as of 11:59 p.m. on the
Closing Date (the “Effective
Time”).
ARTICLE
2
PURCHASE
PRICE AND PAYMENT
2.1 Purchase
Price.
2.1.1 The
unadjusted purchase price for the Shares shall be an amount equal to the sum
of
One Hundred Twenty-One Million Dollars ($121,000,000)
(the “Initial
Purchase Price”).
The
Initial Purchase Price is subject to adjustment by the Adjustment Amount
pursuant
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12
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to
Section 2.2.
The
Initial Purchase Price and the Adjustment Amount shall be payable as provided
in
Section 2.3.
2.2 Adjustment
of Initial Purchase Price.
2.2.1 Within
sixty (60) calendar days following the Closing Date (the “Adjustment
Period”),
the
Purchaser shall prepare, or cause to be prepared, and deliver to the Seller
a
statement of Working Capital of the Company as of the close of business on
the
Closing Date (the “Closing
Date Working Capital”).
The
Closing Date Working Capital shall be calculated in accordance with GAAP and
the
Accounting Principles.
The
Seller shall have the right to be present for any physical inventory of the
Company’s assets undertaken by the Purchaser in connection with preparation of
the statement of Closing Date Working Capital.
2.2.2 The
statement of Closing Date Working Capital shall be final and binding on the
Parties unless the Seller shall, within thirty (30) days following the delivery
of the statement of Closing Date Working Capital, deliver to the Purchaser
written notice of objection (the “Objection
Notice”)
with
respect to the statement of Closing Date Working Capital. The Objection Notice
shall (a) set forth in reasonable detail any proposed adjustment to the
statement of Closing Date Working Capital and the basis for such adjustment
(including a specific dollar amount together with a reasonably detailed
explanation), and (b) only include disagreements based on mathematical errors
or
based on the statement of Closing Date Working Capital not being calculated
in
accordance with Section 2.2.1.
During
the 30-day period following the Purchaser’s delivery of the statement of Closing
Date Working Capital to the Seller, the Purchaser shall grant the Seller
reasonable access during normal business hours to the books and records of
the
Company relevant to the preparation of such statement.
2.2.3 If
the
Objection Notice is delivered, the Parties shall meet with each other as soon
as
reasonably practical with respect to the disputed items and attempt in good
faith to resolve the dispute. If the Parties are unable to reach agreement
on
all disputed items within thirty (30) days after delivery of the Objection
Notice, either the Purchaser or the Seller may refer any unresolved disputed
items to an accounting firm of national reputation selected by mutual agreement
of the Purchaser and the Seller, or if the Purchaser and the Seller are unable
to so agree, KPMG LLP (the “Unrelated
Accounting Firm”).
None
of the Purchaser, the Seller or the Company (a) has, in the three-year period
prior to the date of this Agreement, engaged the Unrelated Accounting Firm
to
perform any services in excess of One Hundred Thousand Dollars ($100,000) in
any
12-month period for any such Person (other than acting as an independent
arbitrator in a similar capacity as the Unrelated Accounting Firm) or (b) will
engage the Unrelated Accounting Firm to perform any service for such Person
(other than acting as an independent arbitrator in a similar capacity as the
Unrelated Accounting Firm) prior to the final determination of the Closing
Date
Working Capital and the adjustment of the Initial Purchase Price under this
Section 2.2.
The
Purchaser and the Seller shall give the Unrelated Accounting Firm:
(i) a
copy of
this Agreement, the Financial Statements, the Purchaser’s statement of the
Closing Date Working Capital, the Objection
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13
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Notice,
and any other relevant correspondence between the Purchaser and the
Seller;
(ii) position
papers outlining each Party’s respective arguments and supporting documentation
for each Party’s position, provided,
however,
that the
Purchaser’s positions, arguments and computations must match those set forth in
the statement of the Closing Date Working Capital or agreed to with the Seller
pursuant to Section 2.2.3
above,
and the Seller’s positions, arguments and computations must match those set
forth in the Objection Notice or agreed to with Purchaser pursuant to
Section 2.2.3
above;
and
(iii) access
to
the books and records of the Company, including any work papers or other
schedules prepared by each Party’s accountants (subject to compliance with such
Party’s accountants’ customary procedures for release) relating to the
preparation of the statement of the Closing Date Working Capital and the
Objection Notice.
The
Unrelated Accounting Firm shall be directed to render a written report as
promptly as practicable and, in any event, within thirty (30) days of the
receipt of the deliveries required by this Section 2.2.3, on the unresolved
disputed items and to resolve only those issues of dispute set forth in the
Objection Notice. The Unrelated Accounting Firm shall resolve such issues of
dispute in accordance with GAAP and the Accounting Principles. The resolution
of
the dispute by the Unrelated Accounting Firm shall be final and binding on
the
Parties and may be entered and enforced in any court of competent jurisdiction.
The fees and expenses of the Unrelated Accounting Firm shall be borne equally
by
the Seller and the Purchaser.
2.2.4 Upon
final determination of the Closing Date Working Capital, the Initial Purchase
Price shall be (a) increased dollar for dollar to the extent the Closing Date
Working Capital exceeds the sum of (1) the Target Working Capital
plus
(2) One Million Seven Hundred Fifty Thousand Dollars ($1,750,000), or
(b) decreased dollar for dollar to the extent the Closing Date Working
Capital is less than the sum of (1) the Target Working Capital less
(2) One Million Seven Hundred Fifty Thousand Dollars ($1,750,000) (the
result being, the “Final
Purchase Price”);
provided,
however,
that to
the extent that the Seller has not paid its agreed portion of Transfer Taxes
in
accordance with Section 10.2 then, notwithstanding anything to the contrary
in
this Agreement, the Final Purchase Price shall be reduced dollar-for-dollar
by
an amount equal to such portion of the subject Transfer Taxes.
2.2.5 The
difference between the Initial Purchase Price and the Final Purchase Price
(the
“Adjustment
Amount”)
shall
be paid by the Purchaser to the Seller, or by the Seller to the Purchaser,
as
the case may be. In the event the Final Purchase Price is (a) greater than
the
Initial Purchase Price, the Purchaser shall pay to the Seller the Adjustment
Amount, or (b) less than the Initial Purchase Price, the Seller shall pay to
the
Purchaser the Adjustment Amount. Payment of the Adjustment Amount shall be
made
in accordance with Section 2.3.3.
Until
paid, the Adjustment Amount shall bear interest determined by computing simple
interest on the Adjustment Amount from the Closing Date to the date of payment
at the rate of interest
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14
-
announced
publicly by Citibank, N.A. from
time
to time as its “reference rate” (on the basis of a 365-day year).
2.3 Payment
of Initial Purchase Price and the Adjustment Amount.
2.3.1 At
the
Closing, the Purchaser shall pay to the Seller an amount equal to the Initial
Purchase Price by wire transfer of immediately available funds to an account
or
accounts designated by the Seller on Schedule
2.3.1.
2.3.2 Within
five (5) Business Days after the Parties agree on the Closing Date Working
Capital in accordance with Section 2.2,
the
Adjustment Amount as determined in accordance with Section 2.2.4
shall be
paid by the applicable Party to the other Party.
2.3.3 Payment
of the Adjustment Amount shall be made by wire transfer of immediately available
funds, if to the Seller by the Purchaser to the account or accounts designated
by the Seller on Schedule
2.3.1,
and if
to the Purchaser by the Seller to the account or accounts designated by the
Purchaser on Schedule
2.3.3.
2.4 Allocation
of Final Purchase Price.
The
Final Purchase Price shall be allocated in accordance with Section
6.18.2.
ARTICLE
3
CLOSING
AND TERMINATION
3.1 Closing
Date.
The
closing of the sale and purchase of the Shares (the “Closing”)
shall
take place at the offices of Miller, Canfield, Paddock and Stone, P.L.C.,
located at 000 Xxxx Xxxx Xxxx Xxxx, Xxxxx 000, Xxxx, Xxxxxxxx, 00000 at 10:00
a.m., local time, on the 3rd Business Day after the conditions to Closing set
forth in Section 7.1,
Section
7.2
and
Section 7.3
(other
than those to be satisfied at the Closing, which shall be satisfied or waived
at
the Closing) have been satisfied or waived by the Party entitled to waive such
condition, or on such other date after such satisfaction or waiver and at such
other time and place upon which the Seller and the Purchaser shall agree (which
time and place are designated as the “Closing
Date”).
3.2 Closing
Deliveries.
3.2.1 At
the
Closing, the Purchaser shall make the payment to the Seller specified in
Section 2.3.1
and
deliver to the Seller, the documents, instruments and writings specified in
Section 8.2.
3.2.2 At
the
Closing, the Seller shall deliver to the Purchaser the documents, instruments
and writings specified in Section 8.1.
3.3 Termination
of Agreement.
This
Agreement may be terminated prior to the Closing as follows:
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15
-
3.3.1 at
the
election of either the Seller or the Purchaser on or after April 30, 2006,
if
the Closing shall not have occurred by the close of business on such date;
provided
that
such date shall be extended to June 1, 2006, in the event that all
conditions to Closing set forth in 7.1,
Section
7.2
and
Section 7.3,
other
than those set forth in Section 7.3.1,
have
been or are capable of being satisfied at the time of such
extension;
3.3.2 by
mutual
written consent of the Seller and the Purchaser; or
3.3.3 at
the
election of either the Seller or the Purchaser if there shall be in effect
a
final nonappealable Order of a Governmental Body of competent jurisdiction
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby;
provided, however,
that
the Party seeking termination pursuant to Section 3.3.3 is not in breach in
any
material respect of any of its material representations, warranties, covenants
or agreements contained in this Agreement.
3.4 Procedure
Upon Termination.
In the
event the Purchaser or the Seller, or both, elect to terminate this Agreement
pursuant to Section 3.3,
written
notice thereof shall promptly be given to the other Party, and this Agreement
shall terminate, and the purchase and sale of the Shares hereunder shall be
abandoned, without further action by the Purchaser or the Seller. If this
Agreement is terminated as provided herein, each Party shall redeliver all
documents, work papers and other material of the other Party relating to the
transactions contemplated hereby, whether obtained before or after the execution
hereof, and all confidential information received by any Party with respect
to
the business of any other Party or its Subsidiaries or Affiliates shall be
treated in accordance with the provisions of the Confidentiality Agreement,
which shall survive the termination of this Agreement in accordance with the
terms of the Confidentiality Agreement.
3.5 Effect
of Termination.
In the
event this Agreement is validly terminated as provided herein, then each of
the
Parties shall be relieved of their duties and obligations arising under this
Agreement after the date of such termination and such termination shall be
without liability to the Purchaser, the Company, or the Seller; provided,
however,
that
the obligations of the Parties set forth in this Section 3.5,
Section
6.5
and
ARTICLE
10
shall
survive any such termination and shall be enforceable hereunder notwithstanding
such termination; provided,
further,
that
nothing in this Section 3.5
shall
relieve the Purchaser or the Seller of any liability for a breach of this
Agreement.
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16
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ARTICLE
4
REPRESENTATIONS
AND WARRANTIES OF THE SELLER
The
Seller hereby represents and warrants to the Purchaser, as of the date hereof
and as of the Closing Date, that:
4.1 Organization
and Good Standing.
Each of
the Company and the Seller is a corporation organized, validly existing and
in
good standing under the laws of the jurisdiction of its organization as set
forth above and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as now conducted. The
Company is duly qualified or licensed to do business and is in good standing
as
a foreign corporation under the laws of each jurisdiction in which it owns
or
leases real property and each other jurisdiction in which the conduct of its
business or the ownership of its assets requires such qualification, except
where the failure to be so qualified or in good standing would not, individually
or in the aggregate, have a Company Material Adverse Effect. The Company has
no
Subsidiaries.
4.2 Authorization
of Agreement.
The
Seller has all requisite power, authority and legal capacity to execute and
deliver this Agreement and each other agreement, document, instrument or
certificate contemplated by this Agreement or to be executed by the Seller
in
connection with the consummation of the transactions contemplated by this
Agreement (together with this Agreement, the “Seller
Documents”),
and
to consummate the transactions contemplated hereby and thereby. This Agreement
has been, and each of the other Seller Documents will be at or prior to the
Closing, duly and validly executed and delivered by the Seller and (assuming
the
due authorization, execution and delivery by the other Parties hereto and the
parties thereto) this Agreement constitutes, and each of the other Seller
Documents when so executed and delivered will constitute, legal, valid and
binding obligations of the Seller, enforceable against the Seller in accordance
with their respective terms, subject to (a) applicable bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium and similar laws
affecting creditors’ rights and (b) the remedy of specific performance and
injunctive and other forms of equitable relief, (regardless of whether
enforcement is sought in a proceeding at law or in equity) and to the discretion
of the court before which any proceeding therefor may be brought.
4.3 Capitalization.
4.3.1 The
authorized Capital Stock of the Company consists of 10,000 shares of common
stock, $1.00 par value per share, of which 500 shares are issued and outstanding
and constitute the Shares. No shares of Capital Stock of the Company are held
by
the Company as treasury stock.
4.3.2 All
of
the Shares were duly authorized for issuance and are validly issued, fully
paid
and non-assessable.
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4.3.3 There
is
no existing option, warrant, call, right, commitment, subscription, or other
agreement or arrangement of any character to which the Seller or the Company
is
a party requiring, and there are no securities of the Company outstanding which
upon conversion or exchange would require, the issuance, sale or transfer of
any
additional shares of Capital Stock of the Company or other securities
convertible into, exchangeable for or evidencing the right to subscribe for
or
purchase shares of Capital Stock of the Company. Neither the Seller nor the
Company is a party to any voting trust or other voting agreement or arrangement
with respect to any of the Shares or (except as contemplated by this Agreement)
to any agreement relating to the issuance, sale, redemption, transfer, or other
disposition of the Capital Stock of the Company.
4.3.4 The
Shares have not been issued in violation of, and the Shares are not subject
to,
any purchase option, call, right of first refusal, preemptive, subscription
or
similar rights under any Applicable Law, the certificate of incorporation or
by-laws of the Company, any Contract to which the Company is subject, bound
or a
party, or otherwise. There are no voting trusts or other Contracts to which
the
Company is a party with respect to the voting of the Capital Stock of the
Company.
4.3.5 There
is
no Capital Stock of the Company reserved for issuance for any purpose. Except
as
set forth on Schedule
4.3.5,
there
are no outstanding contractual obligations of the Company to provide funds
or to
make any investment (in the form of a loan, capital contribution or otherwise)
in any other Person.
4.3.6 The
Company (a) does not own or hold the right to acquire any Capital Stock of
any Person (b) does not have any direct or indirect equity or ownership interest
in any business, or (c) is not a member of or participant in any partnership,
joint venture or similar Person.
4.4 Corporate
Records.
The
Seller has delivered to the Purchaser true, correct and complete copies of
the
certificate of incorporation and by-laws of the Company.
4.5 Conflicts;
Consents of Third Parties.
4.5.1 Except
as
set forth in Schedule
4.5.1,
none of
the execution and delivery by the Seller of this Agreement and the other Seller
Documents, the consummation of the transactions contemplated hereby, or
compliance by the Seller with any of the provisions hereof or thereof will:
(a) conflict with, or result in the breach of, any provision of the
certificate of incorporation or by-laws of the Company; (b) conflict with,
violate, result in the breach or termination of, or constitute a default under
any note, bond, mortgage, indenture, license, agreement or other instrument
or
obligation to which the Company is a party or by which it or any of its
properties or assets is bound; (c) violate any statute, rule, regulation,
Order, warrant, judgment, injunction, law (including common law), or decree
of
any Governmental Body or authority by which the Company is bound or applicable
to any of its properties or assets (each, an “Applicable
Law”);
or
(d) result in the creation of any Lien upon the properties or assets of
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18
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the
Company except, in the case of clause (b), for such violations, breaches,
terminations or defaults as would not, individually or in the aggregate, have
a
Company Material Adverse Effect.
4.5.2 Except
as
set forth on Schedule
4.5.2,
no
Consent, waiver, approval, Order, authorization of, or declaration or filing
with, or notification to, any Person or Governmental Body is required on
the part of the Seller or the Company in connection with the execution and
delivery of this Agreement or the other Seller Documents, or the compliance
by
the Seller or the Company as the case may be, with any of the provisions hereof
or thereof.
4.6 Ownership
and Transfer of Shares.
The
Seller is the record and beneficial owner of, and has good and valid title
to,
the Shares, which ownership as of the Effective Time shall be free and clear
of
any and all Liens.
The
Seller has the corporate power and authority to sell, transfer, assign and
deliver such Shares as provided in this Agreement, and such delivery will convey
to the Purchaser good and valid title to such Shares, free
and
clear of any and all Liens as of the Effective Time.
4.7 Financial
Statements; Inventory; Trade Receivables.
4.7.1 Schedule
4.7.1
contains the unaudited balance sheet of the Company as of December 31, 2005
and
2004 and the unaudited statements of income of the Company for the years ended
December 31, 2005 and 2004 (the unaudited balance sheet of the Company as of
December 31, 2005 is referred to herein as the “Balance
Sheet,”
the
financial statements described in this Section 4.7.1, are collectively referred
to herein as the “Historical
Financial Statements,”
and
December 31, 2005, is referred to herein as the “Balance
Sheet Date”).
4.7.2 Schedule
4.7.2
contains
the unaudited balance sheet of the Company as of February 28, 2006 and the
unaudited statements of income of the Company for the two-month period ended
February 28, 2006 (the financial statements described in this
Section 4.7.2
are
collectively referred to herein as the “Interim
Financial Statements,”
and
all of the financial statements described in Sections 4.7.1 and 4.7.2 are
collectively referred to herein as the “Financial
Statements”).
4.7.3 Each
balance sheet included in the Financial Statements presents fairly in all
material respects the financial position of the Company as of the date thereof,
and each income statement included in the Financial Statements presents fairly
the results of operations of the Company for the period set forth therein,
subject, in the case of the Interim Financial Statements, to normal year-end
adjustments (which adjustments will not be, individually or in the aggregate,
material). Each of the Financial Statements has been prepared in accordance
with
the Accounting Principles. The books, records and accounts of the Company
accurately and fairly reflect, in reasonable detail, all transactions and all
items of income and expense, assets and liabilities and accruals relating to
the
Company.
4.7.4 All
Inventory of the Company was acquired or manufactured in the Ordinary Course
of
Business and is generally of a quality and quantity consistent in all material
respects with past practice in the Ordinary Course of Business.
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19
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4.7.5 All
Trade
Receivables represent arm’s length sales in the Ordinary Course of Business,
constitute valid claims of the Company, free and clear of all Liens other than
Permitted Encumbrances, and are not and will not be subject to any valid claims
or set off or other defense or counterclaims other than returns in the Ordinary
Course of Business. Since the Balance Sheet Date, (a) there have not been any
write-offs as uncollectible of any Trade Receivables, except for write-offs
in
the Ordinary Course of Business, and (b) there has not been a material change
in
the aggregate amount of Trade Receivables and amounts owing to the Company
or
the aging thereof.
4.8 No
Undisclosed Liabilities.
Except
as set forth on Schedule
4.8
and for
liabilities and obligations (a) incurred in the Ordinary Course of Business
after the Balance Sheet Date that, in any event do not exceed Fifty Thousand
Dollars ($50,000) individually or in the aggregate, and (b) disclosed, reflected
or reserved for in the Financial Statements, since the Balance Sheet Date,
the
Company has not incurred any liability or obligation that would be required
to
be reflected or reserved against in the Balance Sheet in accordance with the
Accounting Principles.
4.9 Absence
of Certain Developments.
Except
(a) as disclosed in the Financial Statements, (b) as expressly permitted by
this
Agreement, or (c) set forth on Schedule
4.9,
since
the Balance Sheet Date, the Company has conducted its business only in the
Ordinary Course of Business, and the Company has not experienced any change
that, individually or in the aggregate, has had or could reasonably be expected
to have a Company Material Adverse Effect. Except as set forth on Schedule
4.9,
since
the Balance Sheet Date, the Company has not taken any of the actions or
permitted to occur any of the events specified in Section 6.2
or
committed to do any of the foregoing.
4.10 Certain
Tax Matters.
Except
as set forth on Schedule
4.10:
4.10.1 (a)
All
income or franchise Tax Returns required to be filed by or on behalf of the
Company have been filed in a timely manner (within any applicable extension
periods) and all Tax Returns reflect accurately all liability for Taxes of
the
Company and are true, correct and complete in all material respects, (b) the
Company has timely paid or accrued for all Taxes shown to be due on such Tax
Returns, (c) no Liens for Taxes have been filed with respect to the assets
of
the Company and no claims are being asserted in writing with respect to any
Taxes of the Company, and (d) with respect to any such Taxes so accrued
for, the Company has established adequate reserves on the Financial Statements
for payment for such Taxes by the Company relating to the applicable periods
(or
portions thereof) for which a Tax Return was required to be filed for Taxes
that
are not then due or payable, and has or will establish adequate reserves for
Taxes relating to subsequent periods through the Closing;
4.10.2 (a)
The
Company has not filed a consent under Section 341(f) of the Code concerning
collapsible corporations, (b) no property of the Company is “tax exempt use
property” within the meaning of Section 168(h) of the Code or “tax exempt bond
financed
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20
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property”
within the meaning of Section 168(g) of the Code and (iii) Company is not a
party to any lease made pursuant to Section 168(f)(8) of the Internal Revenue
Code of 1954;
4.10.3 The
Company has complied in all material respects with all Applicable Laws, relating
to the payment and withholding of Taxes and has duly and timely withheld from
employee salaries, wages and other income or compensation and has paid over
to
the appropriate taxing authorities all amounts required to be so withheld and
paid over for all periods under all Applicable Laws;
4.10.4 The
Seller has made available to the Purchaser complete copies of (a) all income
or
franchise Tax Returns of the Company (or, in the case of Tax Returns filed
for
an affiliated group, the portion of such consolidated Tax Returns relating
to
the Company) relating to the taxable periods ending after December 31, 2002
and
(b) the portions of any audit report issued within the last three years relating
to any Taxes due from the Company;
4.10.5 There
are
no ongoing federal, state, local or foreign audits, examinations, or other
administrative proceedings or court proceedings by any taxing authority with
regard to any Tax Return of the Company;
4.10.6 The
Company is not a party to any tax sharing or similar agreement or arrangement
(whether or not written) pursuant to which it will have any obligation to make
any payments after the Closing;
4.10.7 The
Company has not, within the past twelve months, been contacted by, nor is the
Company currently corresponding with, any state or local government with respect
to its requirement to file Tax Returns or to pay any Taxes. Without limiting
the
foregoing, no claim has ever been made by a Governmental Authority or other
taxing authority in a jurisdiction where the Company does not file reports
and
Tax Returns that the Company is or may be subject to taxation by that
jurisdiction;
4.10.8 There
are
no outstanding written requests, Contracts, Consents or waivers to extend the
statutory period of limitations applicable to the assessment of any Taxes or
deficiencies against the Company;
4.10.9 The
Company is not, or, within the past five years, has not been, a party to any
Contract under which the Company has agreed to share Tax liability of any
Person;
4.10.10 There
are
no Liens for Taxes upon the assets of the Company which are not provided for
in
the Financial Statements, except Liens for Taxes (a) not yet due and payable,
and (b) that are being contested in good faith by the Company and described
in
Schedule 4.10,
for
which, in the case of clauses (a) and (b), appropriate reserves have been
established in the Financial Statements;
4.10.11 The
Company has not been a member of any Affiliated Group (as such term is defined
in section 1504 of the Code or any similar state statute, “Affiliated
Group”);
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21
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4.10.12 The
Company, either separately or as part of any Affiliated Group, has not filed
a
disclosure statement pursuant to Section 6662 of the Code or was required to
file any such disclosure statement to avoid the imposition of any penalty,
fine
or addition to Tax;
4.10.13 The
Company is not bound, separately or as a group, by any Contract that has
resulted in or would result in, separately or in the aggregate, in connection
with this Agreement or the consummation of the transactions contemplated hereby,
the payment of any “excess parachute payment” within the meaning of Section 280G
of the Code; and
4.10.14 The
Company, either separately or as part of any Affiliated Group, has not
participated in any way in any “tax shelter” within the meaning of Section 6111
of the Code (as in effect prior to the enactment of P.L. 108-357) or any
comparable Applicable Law of jurisdictions other than the United States, or
in
any “reportable transaction” within the meaning of Treasury Regulation Section
1.6011-4 (as in effect at the relevant time) or any comparable Applicable Law
of
jurisdictions other than the United States.
4.11 Real
Property.
4.11.1 Schedule
4.11
sets
forth a complete list of (a) all real property and interests in real
property owned by the Company (individually, an “Owned
Property”
and
collectively, the “Owned
Properties”),
and
(b) except for the Leased Warehouse Property, all real property and
interests in real property leased by the Company (individually, a “Leased
Real Property”
and
collectively the “Leased
Real Properties”
and,
together with the Owned Properties, being referred to herein individually as
a
“Company
Property”
and
collectively as the “Company
Properties”).
Notwithstanding anything herein to the contrary, neither the Leased Real
Properties nor the Company Properties shall include Leased Warehouse Property.
The Company has good and marketable fee title to all Owned Property, free and
clear of all Liens and Title Defects of any nature whatsoever, except Liens
and
Title Defects set forth on Schedule
4.11
and
there are no Persons other than the Company in possession of any portion of
the
Owned Property. As used in this Agreement, “Title
Defects”
means
any restrictive covenant, encroachment, survey defect or other encumbrance
on
title to the Owned Property.
4.11.2 The
Company has a valid and enforceable leasehold interest under each of the leases
for the Leased Real Properties, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally and subject, as to enforceability, to general principles
of
equity (regardless of whether enforcement is sought in a proceeding at law
or in
equity) and, to the Knowledge of the Seller, the Company has not received any
written notice of any default or event that with notice or lapse of time, or
both, would constitute a default by the Company under any lease for the Leased
Real Properties.
4.11.3 The
Owned
Property includes any properties leased by the Company pursuant to industrial
revenue bonds, under purchase pursuant to any installment sales contracts,
or
any other similar financing arrangement. The Owned Property has direct and
unimpeded
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22
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access
in
all material respects to and from a physically open and publicly dedicated
street or road for ingress and egress of vehicular and pedestrian
traffic.
4.11.4
There
are no leases, subleases, licenses or other agreements under which the Company
uses or occupies or has the right to use or occupy, now or in the future, any
real property that is not either Owned Real Property or Leased Real
Property.
4.11.5 All
of
the land, buildings, structures and other improvements used by the Company
in
the conduct of its business are included in the Company Properties. The Company
is not a lessor or sublessor of, or makes available for use to any Person (other
than the Company), (a) any Owned Property or Leased Real Property or (b) any
portion of any premises otherwise occupied by the Company.
4.11.6 The
Company has obtained all appropriate certificates of occupancy, licenses,
easements and rights of way, including proofs of dedication, required to use
and
operate the Owned Property in the manner in which the Owned Property is
currently being used and operated.
4.11.7 The
Company has obtained all appropriate certificates of occupancy, licenses,
easements and rights of way, including proofs of dedication, required to operate
the Leased Real Property in the manner in which the Leased Real Property is
currently being used and operated, other than any such instruments that are
normally obtained by the lessor of property.
4.11.8 The
Company has not received notice of, and there is not any pending, or to the
Knowledge of the Seller, threatened or contemplated, condemnation proceeding
affecting the Company Properties or any part thereof, or any sale or other
disposition of the Company Properties or any part thereof in lieu of
condemnation. None of the Company Properties have suffered any material damage
by fire or other casualty which has not heretofore been completely repaired
and
restored. No portion of the Company Properties is located in a special flood
hazard area as designated by a Governmental Body.
4.11.9
The
buildings, structures, fixtures, equipment, building mechanical systems
(including electrical, heating and air conditioning systems), and other
improvements in, on or within the Company Properties, are in satisfactory
operating condition and repair, subject to reasonable wear and tear and
continued repair and replacement in accordance with reasonable and customary
business practice.
4.11.10 “Leased
Warehouse Property”
means
the leases for real property set forth on Schedule
4.11.10
pursuant
to which the Company leases only a portion of the premises.
4.12 Title,
Sufficiency and Condition of Assets.
4.12.1 The
Company has good, valid and insurable title to, or a valid leasehold interest
in, all tangible and intangible assets of the Company, including all assets
reflected on the Balance Sheet, free and clear of all Liens, except (a) such
Liens as are set forth in Schedule
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23
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4.12.1
or such
Title Defects as are set forth in Schedule
4.12.1,
(b)
mechanics’, carriers’, workmen’s, repairmen’s or other like liens arising or
incurred in the Ordinary Course of Business, Liens arising under (and only
with
respect to the equipment leased under) equipment leases with third parties
entered into in the Ordinary Course of Business, and (c) Liens for Taxes
that are described in Schedule
4.10
(the
items described in Subsections (a) and (b) of this Section 4.12.1 are
hereinafter referred to collectively as “Permitted
Encumbrances”).
No
improvements located on the Owned Property violate any Lien or Title Defect.
No
Lien or Title Defect prohibits the use and occupation of the Owned Properties
as
currently used or occupied.
4.12.2 The
assets of the Company that the Purchaser will acquire as a result of the
Purchaser’s acquisition of the Shares on the Closing Date represent all of the
assets necessary to conduct the business of the Company as presently conducted
and represent all of the assets used or intended for use in the conduct of
the
business of the Company as presently conducted.
4.12.3 The
material machinery and equipment used regularly in the conduct of the business
of the Company are in satisfactory operating condition and repair, normal wear
and tear excepted.
4.13 Technology
and Intellectual Property.
4.13.1 Schedule
4.13.1
lists
all letters patent, utility models, design registrations, copyrights,
trademarks, trade names, brand names, logos, service marks (registered or
unregistered), and domain names, in all cases both domestic and foreign, and
applications for any and all of the foregoing included in the Company
Intellectual Property.
With
respect to registered Company Intellectual Property or applications therefore,
Schedule
4.13.1
sets
forth a list of all jurisdictions in which such items are registered or applied
for and all registration and application numbers and indicates any due dates
for
filings or payments concerning such Company Intellectual Property (including
office action responses, affidavits of use, affidavits of continuing use,
renewals, requests for extension of time, maintenance fees, application fees
and
foreign convention priority filings) that fall due within 90 days of the Closing
Date, whether or not such due dates are extendable. The Company is the owner
of
record of any application, registration or grant for each item of Intellectual
Property listed in Schedule
4.13.1,
and has
properly executed and recorded all documents necessary to perfect its title
to
all such Company Intellectual Property. The Company has filed all documents
and
paid all Taxes, fees, and other financial obligations required to maintain
in
force and effect all Company Intellectual Property listed in Schedule
4.13.1
until
the Closing.
4.13.2 Except
as
shown in Schedule
4.13.2,
the
Company is the sole and exclusive owner of the Company Intellectual Property.
No
Person has served and, to the Knowledge of the Seller, threatened to serve
the
Company with any written notice of a claim of ownership with respect to the
Company Intellectual Property.
4.13.3 Except
as
shown in Schedule
4.13.3,
the
Company has not previously assigned, transferred, conveyed or otherwise
encumbered its right, title and interest in the Company Intellectual
Property.
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24
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4.13.4 The
Company owns or otherwise possesses (or at the time of Closing will possess)
valid and enforceable rights to use all Intellectual Property and Technology
currently used in the business as presently conducted and as conducted up to
and
through the Closing Date. Schedule 4.13.4
lists
all Contracts with respect to any Intellectual Property or Technology other
than
Company Intellectual Property and software licenses for Desktop Software, and
except pursuant to the Contracts listed on Schedule
4.13.7
the
Company is not bound by or a party to any options, licenses or agreements of
any
kinds relating to the intellectual property of any other Person (other than
software licenses for Desktop Software).
With
respect to Intellectual Property and Technology set forth in Schedule 4.13.4,
the
Company has, or prior to the Closing will be granted, licenses sufficient for
the conduct of its business as conducted up to and through the Closing
Date.
4.13.5 Except
as
shown in Schedule
4.13.5,
the
Company is not under any obligation to pay any royalties or similar payments
in
connection with any Intellectual Property or Technology.
4.13.6 Except
as
shown in Schedule
4.13.6,
the
conduct of the business of the Company as it is currently conducted and any
of
the products sold or services provided by the Company in connection therewith
does not violate, conflict with or infringe the intellectual property rights
of
any Person.
To the
Knowledge of the Seller, neither the conduct of any other Person’s business, nor
the nature of any of the product it sells or services it provides, infringes
upon or is inconsistent with any Company Intellectual Property or Technology
owned by the Company. No other Person has notified the Company or the Seller
in
writing of a claim of the right to use in connection with similar or closely
related goods and in the same geographic area any xxxx which is identical or
confusingly similar to any of the trademarks owned by the Company.
4.13.7 Except
pursuant to the Contracts listed on Schedule
4.13.7
the
Company has not granted any options, licenses or agreements of any kind relating
to the Company Intellectual Property or the marketing or distribution thereof,
except nonexclusive licenses to distributors and end-users in the Ordinary
Course of Business. Subject to the rights of third parties set forth in
Schedule
4.13.7
all
Company Intellectual Property is free and clear of all Liens.
4.13.8 Except
as
set forth on Schedule
4.13.8,
(a) no
claims are pending, or to the Knowledge of the Seller, threatened, against
the
Company by any Person with respect to the ownership, validity, enforceability,
effectiveness or use of any Intellectual Property, and (b) since January 1,
2001, the Company has not received any communication alleging that the Company
has violated any rights relating to the Intellectual Property of any
Person.
4.13.9 The
Company has taken all steps required in accordance with sound business practice
to establish policies and procedures requiring employees and Representatives
to
maintain the confidentiality of non-public information relating to the
Intellectual Property and
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25
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Technology,
including the inventions, trade secrets, know how and other proprietary rights
of the Company, and to appropriately restrict the use thereof. The Company
has
not made any such confidential information available to any Person other than
employees of the Company, the Seller, and Affiliates of Seller, except pursuant
to the written agreements set forth on Schedule
4.13.9.
To the
Knowledge of the Seller, the Company is not making unauthorized use of any
confidential information or trade secrets of any Person, including any former
employer of any past or present employee of the Company. To the Knowledge of
the
Seller, there has been no misappropriation of any material trade secrets or
other material confidential or proprietary Company Intellectual Property of
the
Company by any Person.
4.13.10 The
Company owns, or has sufficient license to use, all computer software and
related Technology, including source code (to the extent the Company possesses
any right to such source code) operating systems, data, databases, files,
documentation and other materials related thereto, that is used in or necessary
for the conduct of the Company’s business as currently conducted (“Computer
Software”),
and
the consummation of the transactions contemplated hereby will not conflict
with,
alter or impair any such rights or require the payment of any additional fees
or
amounts. Schedule
4.13.10
sets
forth a list of all material Computer Software (excluding Desktop Software).
The
Company has delivered to the Purchaser true and complete copies of all Contracts
under which the Company has the right to use Computer Software (other than
Desktop Software).
4.13.11 The
execution, delivery and performance of this Agreement by the Seller, and the
consummation of the transactions contemplated hereby, will not impair in any
material respect any right, or cause the Company to be in violation or default
under any policy, Contract or Applicable Law applicable to any private, personal
or proprietary information acquired by the Company or used by the Company in
the
conduct of its business in substantially the manner and to the extent presently
conducted or contemplated.
4.13.12 Any
Intellectual Property which has been created by an independent contractor or
other third party for the Company, other than Intellectual Property owned by
third parties and licensed to the Company pursuant to the Contracts described
in
Schedule
4.13.12
is the
subject of a proper written assignment and/or work made for hire agreement
prescribing that such Intellectual Property is Company Intellectual Property.
The Company has written agreements with past and/or present employees requiring
such employees to assign all patents, inventions and other Intellectual Property
rights to the Company, as necessary to protect the Company’s ownership interest
in the Intellectual Property developed using the resources of or on the time
of
the Company.
4.13.13 “Desktop
Software”
means
any third party office productivity Computer Software that is licensed for
use
on desktop or laptop “PC-class” computers or related local area network servers
other than by a written agreement executed by the licensee. Desktop Software
includes software licensed by shrink wrap or click wrap licenses, the Microsoft
Windows class of operating system software and Microsoft Office or similar
office productivity software (including individual programs contained
therein).
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4.14 Material
Contracts.
4.14.1 Schedule
4.14.1
sets
forth all of the following Contracts to which the Company is a party or by
which
it is bound
(collectively, the “Material
Contracts”):
4.14.1.1 consulting
or employment agreement;
4.14.1.2 covenant
of the Company not to compete or other covenant restricting the development,
manufacture, marketing or distribution of the products and services of the
Company;
4.14.1.3 lease
or
similar Contract with any Person (other than the Company) under which (A) the
Company is lessee of, or holds or uses, any machinery, equipment, vehicle or
other tangible personal property owned by any Person or (B) the Company is
a
lessor or sublessor of, or makes available for use by any Person, any tangible
personal property owned or leased by the Company and is not terminable by the
Company by notice of not more than 60 days without payment or
penalty;
4.14.1.4 under
which the Company has borrowed any money from, established a line of credit
with, or issued any note, bond, debenture or other evidence of indebtedness
to,
any Person (other than the Company) or any other note, bond, debenture or other
evidence of indebtedness issued to any Person (other than the
Company);
4.14.1.5 under
which (A) any Person (including the Company) has directly or indirectly
guaranteed indebtedness, liabilities or obligations of the Company or (B) the
Company has directly or indirectly guaranteed indebtedness, liabilities or
obligations of any Person (in each case other than endorsements for the purpose
of collection in the Ordinary Course of Business);
4.14.1.6 for
any
joint venture, partnership or similar agreement;
4.14.1.7 granting
a Lien upon any assets or properties of the Company;
4.14.1.8 providing
for indemnification of any Person (other than the Company) with respect to
liabilities relating to any current or former business of the Company or any
predecessor Person;
4.14.1.9 power
of
attorney;
4.14.1.10 confidentiality
agreement (other than (A) Contracts that do not relate primarily to
confidentiality or non-disclosure obligations, but contain customary provisions
incidental to such Contracts and (B) customary Contracts entered into in the
Ordinary Course of Business that impose confidentiality and non-disclosure
obligations on parties to any such Contract other than the
Company);
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4.14.1.11 involving
payment by the Company of more than Fifty Thousand Dollars ($50,000) or
extending for a term of more than 180 days from the date of this Agreement
(unless terminable without payment or penalty upon no more than 60 days’
notice), other than purchase orders entered into in the Ordinary Course of
Business and not in violation of this Agreement;
4.14.1.12 involving
the obligation of the Company to deliver products or services for payment of
more than Fifty Thousand Dollars ($50,000) or extending for a term of more
than
180 days from the date of this Agreement (unless terminable without payment
or
penalty upon no more than 60 days’ notice), other than sales orders entered into
in the Ordinary Course of Business and not in violation of this
Agreement;
4.14.1.13 unperformed
Contract for the sale of any asset or property of the Company (other than
Inventory sales in the Ordinary Course of Business) or the grant of any
preferential rights to purchase any assets or property of the Company or
requiring the Consent of any party to the transfer thereof;
4.14.1.14 with
any
Governmental Entity;
4.14.1.15 currency
exchange, interest rate exchange, commodity exchange or similar
Contract;
4.14.1.16 providing
for the services of any dealer, distributor, sales representative, franchisee
or
similar representative;
4.14.1.17 any
other
Contract to which the Company is a party or by or to which the Company or any
of
its property or assets or business is bound or subject to that has an aggregate
future liability to any Person in excess of Fifty Thousand Dollars ($50,000)
and
is not terminable by the Company by notice of not more than 60 days
without payment or penalty; or
4.14.1.18 any
Contract other than as set forth above to which the Company is a party or by
which the Company’s property or assets or business is bound or subject to that
is material to the Company.
4.14.2 All
Material Contracts are valid, binding and in full force and effect and are
enforceable by the Company in accordance with their respective terms. The
Company has performed in all material respects all obligations required to
be
performed by it under all Material Contracts and the Company is not (with or
without the lapse of time or the giving of notice, or both) in breach or default
in any material respect thereunder and, to the Knowledge of the
Seller, no
other
party to any of Material Contract is (with or without the lapse of time or
the
giving of notice, or both) in breach or default in any material respect
thereunder. The Company has not received any notice of the intention of any
party to terminate any Material Contract.
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Complete
and correct copies of all Material Contracts, together with all modifications
and amendments thereto, have been delivered to the Purchaser.
4.14.3 Schedule 4.14.3
sets
forth each Material Contract with respect to which Consent of the other party
or
parties thereto must be obtained by virtue of the execution and delivery of
this
Agreement or the consummation of the transactions contemplated hereby to avoid
the termination of any Material Contract, a breach, violation, default or
penalty payment thereunder or any other change or modification to the terms
thereof.
4.14.4 Except
as
set forth on Schedule
4.14.4,
all
material invoices and bills issued by the Company for or under any Material
Contracts to which the Company is a party or bound by, and all payments received
by the Company under such Material Contracts, are fairly proportionate in all
material respects to the work or services performed or other consideration
provided by the Company thereunder in comparison to the work or services
remaining to be performed or other consideration remaining to be provided by
the
Company under such Material Contracts, taking into account the total amounts
payable for all work, services or consideration to be performed or provided
under each for the entire term thereof, and such invoices, bills and payments
are not “front-end loaded” and do not otherwise have the effect of causing the
remaining amounts payable under each such Material Contract to be materially
insufficient to fairly compensate for the cost of the remaining work, services
or consideration to be performed or provided thereunder.
4.15 Employee
Benefits.
4.15.1 Schedule
4.15.1
sets
forth a list of all employee benefit plans and arrangements maintained or
contributed to by the Sellers, the Company or an ERISA Affiliate that cover
current or former employees of the Company, including employee pension benefit
plans, as defined in Section 3(2) of ERISA, employee welfare benefit plans,
as
defined in Section 3(1) of ERISA, deferred compensation plans, supplemental
retirement plans, stock option plans, bonus or profit sharing plans, stock
appreciation rights plans, stock purchase plans, medical, hospitalization,
life,
disability and other insurance plans, severance or termination pay plans and
policies, vacation policies, life insurance arrangements, employment agreements,
retention agreements, severance agreements and change in control agreements,
whether or not described in Section 3(3) of ERISA (collectively, the
“Company
Plans”).
Neither the Seller nor the Company or any of its ERISA Affiliates maintains
or
contributes to any employee benefit plans or arrangements on behalf of any
current or former employee of the Company other than the Company Plans An
“ERISA
Affiliate”
means
any entity under “common control” with the Company within the meaning of
Section 4001(14) of ERISA. Except for the Company Plans identified as
maintained or sponsored by the Company on Schedule
4.15.1,
the
Seller maintains or sponsors each Company Plan.
4.15.2 True,
correct and complete copies of the following documents, with respect to each
of
the Company Plans, if applicable, have been made available or delivered to
the
Purchaser: (a) all plans and related trust documents, and amendments
thereto, or written descriptions of any Company Plans not reduced to writing;
(b) the most recent Forms 5500;
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(c) the
last IRS determination letter; (d) the most recent actuarial report and
(e) summary plan descriptions.
4.15.3 The
Company Plans intended to qualify under Section 401 of the Code are so qualified
and the trusts maintained pursuant thereto are exempt from federal income
taxation under Section 501 of the Code, and nothing has occurred with respect
to
the operation of the Company Plans which is reasonably likely to cause the
loss
of such qualification or exemption or would cause the imposition on the Company
of any material liability, penalty or tax under ERISA or the Code.
4.15.4 The
Company Plans have been maintained in accordance with their terms and with
all
provisions of the Code and ERISA (including rules and regulations thereunder)
and other applicable federal and state laws and regulations, except where the
failure to do so would result in liability to the Company. No actions, suit,
claims or disputes (other than routine claims for benefits) are pending, or,
to
the Knowledge of Seller, threatened, that could give rise to liability on the
part of the Company or any of the Company’s ERISA Affiliates. No audits,
inquiries, reviews, proceedings, claims or demands involving any Company Plan
are pending with any Governmental Body.
4.15.5 No
Company Plan is a “multiemployer pension plan” as defined in Section 3(37)
of ERISA.
4.15.6 All
contributions to any Company Plan required to be made by the Company and any
payment under any Company Plan (except those to be made from a trust qualified
under Section 401(a) of the Code) required to be made by the Company for any
period ending before the Closing Date have been paid, and to the extent unpaid,
are reflected on the Balance Sheet.
4.16 Labor.
4.16.1 The
Company is not party to any labor or collective bargaining agreement and there
are no labor or collective bargaining agreements which pertain to employees
of
the Company.
4.16.2 No
labor
organization or group of employees of the Company has made, in writing, a
pending demand for recognition, and there are no representation proceedings
or
petitions seeking a representation proceeding presently pending or, to the
Knowledge of the Seller, threatened to be brought or filed with the National
Labor Relations Board or other labor relations tribunal.
4.16.3 Except
as
set forth on Schedule
4.16.3,
there
are no strikes, work stoppages, unfair labor practice charges, slowdowns,
lockouts, arbitrations, grievances or other labor disputes pending or, to the
Knowledge of the Seller, threatened against or involving the
Company.
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4.16.4 Except
as
set forth on Schedule
4.16.4,
there
is no charge or complaint against the Seller or the Company pending or, to
the
Knowledge of the Seller, threatened, before the United States Department of
Labor, any state department of labor, the Equal Employment Opportunity
Commission or any comparable federal, state, local or foreign human/civil rights
organization or other Governmental Body, relating to the employment or
termination of employment of any current, prospective or former employee of
the
Company.
4.16.5 The
Company and the Seller have discharged their respective obligations in full,
and
have complied with all Applicable Laws, with respect to salary, wages,
commissions, bonuses, overtime pay, holiday pay, sick pay, vacation pay and
all
other benefits for the current and former employees of the Company for all
periods through the Closing Date, except such obligations not due or required
to
be discharged on or before the Closing Date.
4.17 Litigation.
Schedule
4.17
sets
forth each instance in which the Company or any of its directors or officers
(in
their capacities as such) is, or within the past five years, has been, (a)
subject to any Order or (b) a party to, or to the Knowledge of the Seller,
threatened to be made a party to, any action, suit, claim, proceeding, hearing
or investigation before any Governmental Body or arbitration panel, or by any
third party, that, in the case of this clause (b), (i) seeks or sought, as
applicable, equitable relief, or a payment in excess of One Hundred Thousand
Dollars ($100,000), or (ii) questions or challenges the validity of this
Agreement or any action taken or to be taken by the Company pursuant to this
Agreement or in connection with the transactions contemplated hereby. The items
listed on Schedule
4.17
are not
reasonably expected, either individually or in the aggregate, to have a Company
Material Adverse Effect. Except as set forth on Schedule
4.17,
there
is no Legal Proceeding pending or, to the Knowledge of the Seller, threatened
against the Company, that, individually or in the aggregate, would have a
Company Material Adverse Effect
if
adversely determined.
4.18 Compliance
with Laws; Permits.
4.18.1 The
Company is in compliance with all Applicable Laws in all material respects.
The
Company has all Permits which are material for the conduct of the Company’s
business as presently conducted, or the use of any Company Property as presently
used.
4.18.2 All
of
the Permits are valid and in full force and effect in all material respects
and
will not be invalidated or otherwise affected by consummation of the
transactions contemplated by this Agreement. No violations are or have been
recorded in respect of any Permit, no event has occurred that would allow
revocation or termination or that would result in the impairment of the
Company’s rights with respect to any such Permit, and no proceeding is pending
or, to the Knowledge of the Seller, threatened, to revoke, limit or enforce
any
Permit.
4.18.3 The
Company has not received any written communication since January 1, 2001
from a Governmental Body that alleges that the Company is not in compliance
in
any material respect with any Applicable Law. This Section 4.18.3
does not
relate to Benefit Plans, which are the subject of Section 4.15;
Taxes,
which are the subject of Section 4.10;
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environmental
matters, which are the subject of Section 4.19;
and
employee and labor matters, which are the subject of Section 4.16.
4.19 Environmental
Matters and Safety Matters.
Except
as disclosed on Schedule
4.19:
4.19.1 The
Company is in compliance with all Environmental Laws.
4.19.2 None
of
the Company or any predecessor in interest of the Company has received any
claim, notice, complaint, Order or request for information from any Governmental
Body or Person (i) alleging violation of, or asserting any exceedance or
non-compliance with any Environmental Law or Permit, (ii) asserting potential
liability, (iii) requesting information or (iv) requesting investigation or
clean-up of any site under any Environmental Law.
4.19.3 The
Company possesses and is in compliance with all government authorizations and
Permits required under the Environmental Laws that are applicable and necessary
to the ownership and to the conduct of the Company’s business, and to the
Knowledge of Seller, there are no regulatory or legislative initiatives under
Environmental Laws that would require the Company to obtain additional
authorizations or Permits for the conduct of the Company’s
business.
4.19.4 No
Hazardous Materials have been used, generated, stored or disposed of by the
Company at or from any Company Properties or Former Properties in a manner
that
has or may lead to claims for penalties, fines, damages, cleanup costs,
corrective action, response action, remedial work or injunctive relief.
“Former
Properties”
mean
all plants, offices, manufacturing facilities, stores, warehouses, buildings,
fixtures, and all real property and related facilities owned, leased or operated
by the Company or any of its respective predecessors prior to the date hereof,
but excluding the Company Properties.
4.19.5 None
of
the Company or any predecessor in interest thereof has transported Hazardous
Materials or arranged for the transportation of such Hazardous Materials to
any
site that is the subject of federal, state or local enforcement actions, or
other governmental or private investigations that may lead to claims for
penalties, damages, cleanup costs, response action or remedial
work.
4.19.6 There
has
been no release, as defined in CERCLA or any other Environmental Law, of
Hazardous Materials at or from any of the Company Properties or the Former
Properties,
or any
migration of Hazardous Materials from any of the Company Properties or the
Former Properties, for which the Company would be liable.
4.19.7 There
are
no “Underground Storage Tanks,” as defined in RCRA, comparable state law or
other Environmental Law at any of the Company Properties nor, prior to or during
the period of the Company’s ownership, have there been on the Former Properties,
and none have ever been located on any of the Company Properties or the Former
Properties during the period of the Company’s ownership.
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4.19.8 There
are
no asbestos-containing building materials, lead-based paint or capacitors,
transformers or other equipment or fixtures containing regulated levels of
PCBs
located at any of the Company Properties or Former Properties that have resulted
in a release of either asbestos, lead based paint or PCBs into the environment
or inside any building or structure. There are no capacitors, transformers,
or
other equipment or fixtures containing PCBs at any of the Company Properties,
nor, have there been prior to or during the period of the Company’s ownership,
at any of the Former Properties.
4.19.9 The
Company is in compliance in all material respects with state packaging laws
that
apply to products containing Hazardous Materials.
4.19.10 The
Company is in compliance in all material respects with the California Safe
Drinking Water and Toxic Enforcement Act of 1986, California Health and Safety
Code §§25249.5 et seq.
and the
rules and regulations promulgated thereunder.
4.19.11 No
Company Property or any Former Property, prior to or during the period of the
Company’s ownership, is or has been enrolled or listed in any federal or state
program relating to the ranking, scoring, investigation or remediation of sites,
facilities, or properties.
4.19.12 None
of
the buildings, fixtures, or equipment located on the Company Properties or
Former Properties or otherwise used or operated by the Company are or have
been
used to generate, manage, store, treat, or dispose of hazardous wastes (as
defined by RCRA or comparable state Environmental Law), except in compliance
with Environmental Laws.
4.19.13 No
environmental investigation, assessment or remediation, including phase 1 or
phase 2 assessments, are being or have been conducted with respect to any
Company Property, during the Company’s ownership or operation, or Former
Property,
during
the Company’s ownership.
4.19.14 The
Company has made available for review to the Purchaser all environmental
reports, audits, assessments or studies conducted by or on behalf of the Seller
or the Company with respect to (i) any of the Company Properties or Former
Properties, and (ii) the results of sampling and analysis of any asbestos,
equipment containing PCBs, air, soil, or water (including ground and surface
water), and buildings, fixtures, or equipment undertaken with respect to such
Company Properties or Former Properties.
4.19.15 The
drains, pipes, trenches, pits, floors, sumps, sewers, manholes, and containment
areas at the Company Properties or the Former Properties have not leaked so
as
to have caused, allowed, or enabled the release, as that term is defined in
CERCLA and other Environmental Laws, of Hazardous Materials.
4.19.16 The
presence of Hazardous Materials, if any, in the soil, groundwater and air at
the
Company Properties are not such that the Company is obligated to take any
actions
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or
expend
any sums i) to protect the health and safety of persons on the Company
Property in connection with industrial use of the Company Properties or
ii) to protect persons off the Company Properties from such Hazardous
Materials or iii) to mitigate (before or after the Closing Date) such
Hazardous Materials.
4.20 Financial
Advisors.
Except
for Rothschild, Inc., no Person has acted, directly or indirectly, as a broker,
finder or financial advisor for the Seller in connection with the transactions
contemplated by this Agreement and no Person is entitled to any fee or
commission or like payment in respect thereof.
The
Seller shall be solely responsible for the fees of Rothschild, Inc.
4.21 Insurance.
Schedule
4.21
lists
all insurance policies covering the material properties, assets, employees
and
operations of the Company (including policies providing property, casualty,
liability, and workers’ compensation coverage). All of such policies are the
type and in the amounts customarily carried by Persons conducting businesses
similar to that of the Company. All premiums due and payable in respect of
such
policies have been paid in full, and no default or other circumstance exists
which would create the substantial likelihood of the cancellation or non-renewal
of any such policy prior to the Closing Date.
4.22 Product
Liability.
In
connection with the conduct of the Company’s business prior to the Closing:
(a) except as disclosed in Schedule 4.22,
there
are no events, conditions, circumstances, activities, practices, incidents,
actions, omissions or plans which might reasonably be expected to give rise
to
any material liability or obligation or otherwise form the basis of any material
claim based on or related to any product that is or was designed, formulated,
manufactured, processed, serviced, distributed or sold by the Company or any
service provided or allegedly provided by or on behalf of the Company, and
(b) except as disclosed in Schedule 4.22,
all
products, including the packaging and advertising related thereto, which were
designed, formulated, manufactured, processed, sold or placed in the stream
of
commerce by the Company or any services provided by the Company materially
complied with Applicable Laws, and there have not been, and there are no,
material defects or deficiencies in such services or products.
4.23 Arrangements
with Related Parties.
4.23.1 The
Company is not a party to any Contract with (a) the Seller or any Affiliate
of
Seller (other than the Company), or (b) any current or former officer or
director or family member thereof, or to the Knowledge of the Seller, any
employee of the Company, of the Seller or of any Affiliate of the Seller (other
than, in each case, employment agreements disclosed in Schedule
4.23.1,
agreements described in the second sentence of Section 4.13.12, agreement on
Schedule
4.14
captioned Little Giant Pump Company Consigned Stock Agreement with Tecumseh
Products Company of Canada Ltd., and benefit arrangements disclosed in
Schedule
4.15.1).
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4.23.2 Except
as
set forth on Schedule
4.23.2,
no
director or officer of the Company, or any family member thereof, or, to the
Knowledge of the Seller, any employee of the Seller, of Seller’s Affiliates, or
of the Company:
4.23.2.1 is
a
director, officer or employee of, or consultant to or owns, directly or
indirectly, any interest in, any competitor, franchisee, supplier or customer
of
the Company or is in any way associated with or involved in the business of
the
Company (except in their capacity as a shareholder, director, officer or
employee of the Company, as the case may be), other than ownership of not more
than 5% of the outstanding Capital Stock of any such Person if such stock is
listed on a national securities exchange or listed with the Nasdaq Stock Market,
or is regularly traded in the over-the-counter market by a member of a national
securities exchange;
4.23.2.2 owns,
directly or indirectly, in whole or in part, any property, asset or right,
tangible or intangible, which is associated with any property, asset or right
owned by the Company or the use of which is contemplated for the business of
the
Company; or
4.23.2.3 has
filed
any patent application which arises out of any of the operations of the Company
or is capable of being used or availed of in connection therewith.
4.24 Customers
and Suppliers.
Schedule
4.24
sets
forth a list of the ten largest customers and a list of the ten largest
suppliers (measured by dollar volume) of the Company during each of the last
two
calendar years. Except as set forth on Schedule
4.24,
since
January 1, 2005, (a) none of such customers or suppliers has terminated or
reduced materially, or to the Knowledge of the Seller is threatening to
terminate or reduce materially, its business with the Company, and to the
Knowledge of the Seller no facts or circumstances exist or have occurred that
would indicate that there has been, or that would be reasonably likely to result
in, a termination or material reduction by such customer or supplier of its
business with the Company, and (b) none of such customers has (i) materially
altered its pattern of payments to the Company, or (ii) made any material
complaint regarding pricing, product quality or service, or demanded any price
adjustment material to the business done with such customer.
4.25 No
Other Representations or Warranties.
Except
for the representations and warranties contained in this Article 4, neither
Seller nor the Company makes any representations or warranties, and the Seller
and the Company hereby disclaim any other representations or warranties, whether
made by the Seller, the Company, or any of their respective officers, directors,
employees, agents or representatives, with respect to the execution and delivery
of this Agreement or any Seller Document, or the transactions contemplated
hereby.
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ARTICLE
5
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
The
Purchaser hereby represents and warrants to the Seller, as of the date hereof
and as of the Closing Date, that:
5.1 Organization
and Good Standing.
The
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the State of Indiana.
5.2 Authorization
of Agreement.
The
Purchaser has all requisite power and authority to execute and deliver this
Agreement and each other agreement, document, instrument or certificate
contemplated by this Agreement or to be executed by the Purchaser in connection
with the consummation of the transactions contemplated hereby and thereby
(together with this Agreement, the “Purchaser
Documents”),
and
to consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance by the Purchaser of this Agreement and each Purchaser
Document have been duly authorized by all necessary corporate action on behalf
of the Purchaser. This Agreement has been, and each Purchaser Document will
be
at or prior to the Closing, duly executed and delivered by the Purchaser and
(assuming the due authorization, execution and delivery by the other Parties
hereto and the parties thereto) this Agreement constitutes, and each Purchaser
Document when so executed and delivered will constitute, legal, valid and
binding obligations of the Purchaser, enforceable against the Purchaser in
accordance with their respective terms, subject to (a) applicable
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and
similar laws affecting creditors’ rights, and (b) the remedy of specific
performance and injunctive and other forms of equitable relief, (regardless
of
whether enforcement is sought in a proceeding at law or in equity) and to the
discretion of the court before which any proceeding therefor may be
brought.
5.3 Conflicts;
Consents of Third Parties.
5.3.1 None
of
the execution and delivery by the Purchaser of this Agreement and the other
Purchaser Documents, the consummation of the transactions contemplated hereby,
or the compliance by the Purchaser with any of the provisions hereof or thereof
will (a) conflict with, or result in the breach of, any provision of the
articles of incorporation or by-laws of the Purchaser, (b) conflict with,
violate, result in the breach of, or constitute a default under any note, bond,
mortgage, indenture, license, agreement or other obligation to which the
Purchaser is a party or by which the Purchaser or its properties or assets
are
bound, or (c) violate any statute, rule, regulation, order or decree of any
Governmental Body or authority by which the Purchaser is bound, except, in
the
case of clauses (b), for such conflicts, violations, breaches or defaults as
would not, individually or in the aggregate, have a material adverse effect
on
the ability of the Purchaser to consummate the transactions contemplated by
this
Agreement.
5.3.2 Except
as
set forth on Schedule
5.3.2,
no
Consent, waiver, approval, Order, Permit, or declaration or filing with, or
notification to, any Person or Governmental Body
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is
required on the part of the Purchaser in connection with the execution and
delivery of this Agreement or the Purchaser Documents or the compliance by
the
Purchaser with any of the provisions hereof or thereof.
5.4 Litigation.
There
are no Legal Proceedings pending or, to the Knowledge of the Purchaser,
threatened, that are reasonably likely to prohibit or adversely affect the
ability of the Purchaser to enter into this Agreement or consummate the
transactions contemplated hereby.
5.5 Investment
Intention.
The
Purchaser is acquiring the Shares for its own account, for investment purposes
only and not with a view to the distribution (as such term is used in Section
2(11) of the Securities Act of 1933, as amended (the “Securities
Act”))
thereof. The Purchaser understands that the Shares have not been registered
under the Securities Act and cannot be sold unless subsequently registered
under
the Securities Act or an exemption from such registration is
available.
5.6 Financial
Advisors.
Except
Xxxxxx Brothers Inc., no Person has acted, directly or indirectly, as a broker,
finder or financial advisor for the Purchaser in connection with the
transactions contemplated by this Agreement and no Person is entitled to any
fee
or commission or like payment in respect thereof.
The
Purchaser shall be responsible for the fees or commissions of Xxxxxx Brothers
Inc.
5.7 Sufficiency
of Funds.
The
Purchaser (a) has, and at the Closing will have, sufficient funds available
to pay the Final Purchase Price and any expenses incurred by the Purchaser
in
connection with the transactions contemplated by this Agreement; (b) has,
and at the Closing will have, the resources and capabilities (financial or
otherwise) to perform its obligations hereunder and under the other Purchaser
Documents; and (iii) has not incurred any obligation, commitment,
restriction or liability of any kind, absolute or contingent, present or future,
which would impair or adversely affect such resources and
capabilities.
5.8 Acknowledgment.
The
Purchaser acknowledges and agrees that the only representations, warranties,
covenants and agreements made by the Seller are the representations, warranties,
covenants, and agreements made in this Agreement.
ARTICLE
6
COVENANTS
6.1 Access
to Management.
The
Seller agrees that, prior to the Closing Date, the Purchaser shall be
permitted access, during normal business hours, for the purpose of confirming
information reviewed by the Purchaser during the due diligence it has conducted
prior hereto, to such officers, employees and Representatives of the Company
as
the Seller may determine in its reasonable discretion. It is understood that,
as
a general rule, such access will be limited to discussions with or presentations
by senior management personnel of the Company.
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6.2 Conduct
of Business Pending the Closing.
6.2.1 Prior
to
the Closing, except: (a) as set forth on Schedule 6.2,
(b) as contemplated by this Agreement, (c) as required by Applicable
Law or (d) with the prior written consent of the Purchaser, the Seller
shall, and shall cause the Company to:
6.2.1.1 conduct
the business of the Company only in the Ordinary Course of Business;
and
6.2.1.2 use
commercially reasonable efforts to (a) preserve the present business
operations, organization (including management and the sales force) and goodwill
of the Company and (b) preserve the present relationship with Persons
having business dealings with the Company.
6.2.2 After
the
date of this Agreement and prior to the Closing, except (a) as set forth on
Schedule 6.2,
(b) as contemplated by this Agreement, (c) as required by Applicable
Law, or (d) with the prior written consent of the Purchaser, the Seller shall
not, and shall cause the Company not to:
6.2.2.1 declare,
set aside, make or pay any dividend or other distribution in respect of the
Capital Stock of the Company or repurchase, redeem or otherwise acquire any
outstanding shares of the Capital Stock, or other ownership interests in, the
Company, other than cash dividends paid prior to the Closing from the Company
to
the Seller;
6.2.2.2 transfer,
issue, sell or dispose of any shares of Capital Stock of the Company or grant
options, warrants, calls or other rights to purchase or otherwise acquire shares
of the Capital Stock of the Company;
6.2.2.3 effect
any recapitalization, reclassification, stock split or like change in the
capitalization of the Company;
6.2.2.4 adopt
any
amendment to the certificate of incorporation or by-laws or similar governing
instruments of the Company;
6.2.2.5 with
respect to the Company (a) increase the compensation of any of the Company’s
directors, officers, employees or independent contractors, except in the
Ordinary Course of Business or pursuant to the terms of agreements or plans
currently in effect and listed in the Schedule, (b) pay or agree to pay any
pension, retirement allowance, severance or other employee benefit not already
required or provided for under any existing plan, agreement or arrangement
listed in the Schedule to any of the Company’s director, officer, employee or
independent contractor, (c) commit the Company (other than pursuant to any
already existing requirement in any collective bargaining agreement listed
in
the Schedule) to any additional pension, profit-sharing,
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bonus,
extra compensation, incentive, deferred compensation, stock option, stock
appreciation right, group insurance, severance, retirement or other employee
benefit plan, agreement or arrangement, or to any employment, retention or
consulting agreement with or for the benefit of any of the Company’s director,
officer, employee or independent contractor, (d) except as required by
Applicable Law or as contemplated by this Agreement, amend in any respect any
such plan, agreement or arrangement of the Company, (e) assume, enter into,
amend, alter or terminate any labor or collective bargaining agreement to which
the Company is a party or is affected thereby, or (f) hire any officer,
director, employee, agent or other similar representative for or on behalf
of
the Company except non-management level employees hired “at will” in the
Ordinary Course of Business;
6.2.2.6 (a)
incur
any additional Outstanding Indebtedness, except in the Ordinary Course of
Business under the current terms of the Financial Commitments for Outstanding
Indebtedness disclosed in Schedule 4.8,
(b)
issue any debt securities or assume, guarantee or endorse the obligations of
any
other Person, (c) pledge or otherwise encumber Capital Stock of the Company,
(d)
make any loans, advances or capital contributions to, or investments in, any
other Person, (e) mortgage or pledge any of its assets, tangible or intangible,
or create or suffer to exist any Lien thereupon, or (f) incur or assume any
other liabilities or obligations except in the Ordinary Course of
Business;
6.2.2.7 subject
to any Lien (except for Liens that do not materially impair the use of the
property subject thereto in the business as presently conducted and Permitted
Encumbrances) any of the properties or assets (whether tangible or intangible)
of the Company;
6.2.2.8 acquire
any properties or assets or sell, assign, transfer, convey, lease, mortgage
or
otherwise dispose of any of the properties or assets of the Company, except
for
fair consideration in the Ordinary Course of Business;
6.2.2.9 (a)
acquire (by merger, consolidation or acquisition of stock or assets) any
corporation, partnership or other business organization or division thereof
or
any equity interest therein, or (b) otherwise acquire any assets other than
in
the Ordinary Course of Business, other than (in the case of this clause (b)
only) any (1) acquisition of Inventory in the Ordinary Course of Business and
(2) capital expenditures consistent with Section 6.2.2.22;
6.2.2.10 adopt
a
plan of complete or partial liquidation or authorize or undertake a dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization;
6.2.2.11 (a)
make
or change any Tax election, adopt or change any Tax accounting method, enter
into any closing agreement, settle any Tax claim or assessment, surrender any
right to claim a Tax refund or credit or take or fail to take any other action
if such action or failure to take such action would increase in any material
respect the Tax
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39
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liability
of the Company, or (b) file any income Tax Return other than those listed on
Schedule 6.2.2.11,
including any amended Tax Returns;
6.2.2.12 change
any of the accounting methods or accounting practices unless required by GAAP
or
Applicable Law;
6.2.2.13 accelerate
the delivery or sale of products or the incurrence of capital expenditures,
or
offer discounts on sale of products or premiums on purchases of raw materials,
except in the Ordinary Course of Business;
6.2.2.14 account
for, manage or treat Trade Receivables or Inventory in any manner other than
in
the Ordinary Course of Business, or (without limiting the generality of the
foregoing) write off as uncollectible any Trade Receivable or write down the
value of any Inventory other than in immaterial amounts or in the Ordinary
Course of Business;
6.2.2.15 account
for, manage, treat or make payments of or relating to cash, cash equivalents,
certificates of deposit, commercial paper, treasury bills, treasury notes or
other marketable securities held by the Company other than in the Ordinary
Course of Business;
6.2.2.16 neglect
to make any expenditures to the extent budgeted in the most recent capital
budget for the Company, with regard to the condition of the properties, plants
and equipment of the Company;
6.2.2.17 (a)
enter
into new Contracts or modify, amend, terminate or renew any Contract to which
the Company is a party, in each case, which is material to the Company, except
in the Ordinary Course of Business and provided
that the
term of any new Contract or any such modification, amendment or renewal does
not
exceed twelve months, and provided,
further,
that no
loans or advances shall be made or extended to any customers in connection
with
any such Contract, modification, amendment or renewal, or waive, release or
assign any material rights or claims therein, or (b) enter into, modify, amend,
or renew any Contract to which the Company is a party outside the Ordinary
Course of Business or on a basis not consistent with past practice if the dollar
value of such new Contract or existing Contract to be so amended, modified
or
renewed is or would be in excess of Fifty Thousand Dollars ($50,000) (not to
exceed Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate) or the
Contract would have an initial term, or renewal or extension of terms, of
greater than twelve months;
6.2.2.18 settle
any claims, actions, arbitrations, disputes or other proceedings of the Company
(a) that would result in the Company being enjoined in any respect or (b) for
an
amount which, in the aggregate, is in excess of Fifty Thousand Dollars
($50,000);
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6.2.2.19 waive
any
right of substantial value owned by the Company, cancel any material debt or
claim owned by the Company or voluntarily suffer any extraordinary
loss;
6.2.2.20 sell,
assign, transfer, license, convey or permit to lapse any rights in any of the
Intellectual Property set forth in Schedule 4.13.1
or
disclose to any Person (other than in the Ordinary Course of Business) or
otherwise dispose of any of the Company’s trade secret, process or know-how not
heretofore a matter of public knowledge, except pursuant to judicial Order
or
process;
6.2.2.21 permit
any of the insurance policies of the Company to be canceled or terminated or
any
of the coverage thereunder to lapse, without simultaneously securing replacement
insurance policies which are in full force and effect and provide coverage
substantially similar to or greater than under the prior insurance
policies;
6.2.2.22 take
any
action that (a) would make any representation or warranty of the Seller
contained herein inaccurate in any respect at, or as of any time prior to,
the
Closing, (b) would result in any of the conditions to this Agreement set forth
in Section 7.1
not
being satisfied, or (c) would materially impair the ability of the Company,
the
Seller or the Purchaser to consummate the transactions contemplated hereby
in
accordance with the terms hereof or materially delay such consummation;
or
6.2.2.23 agree
to
take any action prohibited by this Section 6.2
with
regard to the Company.
6.2.3 Notwithstanding
anything herein to the contrary in this Section 6.2, under no circumstances
shall the Seller be prohibited or restricted from conducting its business with
respect to Seller and Seller’s Affiliates other than the Company, and engaging
in or agreeing to, with respect to Seller and Seller’s Affiliates other than the
Company, any of the matters restricted with regard to the Company in Sections
6.2.2.6 (b), (d), (e), (f), 6.2.2.9, 6.2.2.10, 6.2.2.11, 6.2.2.12, 6.2.2.13,
and
6.2.2.14 of this Agreement.
6.3 Employee
Matters.
6.3.1 The
Purchaser acknowledges that by purchasing the Shares, the Company will continue
to employ all of the individuals employed by the Company (including those
individuals on vacation and on any Approved Absence, as defined below) as of
the
Closing Date (“Employees”);
provided,
however,
that
subject to Applicable Law, this Section 6.3.1 shall not require the Purchaser
or
the Company to continue the employment of any Employee for any specified period
of time after the Closing Date. “Approved
Absence”
means
an approved leave of absence (including active military service), short term
and
long term disability (including employees on workers’
compensation).
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6.3.2 For
a
period of 24 months following the Closing Date, the Purchaser shall provide,
or
shall cause the Company to provide, each Employee, while employed by the
Company, with: (a) a base salary or wage rate that is not less than his or
her
base salary or wage rate in effect immediately prior to the Closing Date; and
(b) a cash incentive opportunity that is not less than the cash incentive
opportunity (including gainsharing, sales incentives and merit bonuses) if
any,
in effect immediately prior to the Closing Date. The Purchaser shall provide
or
cause the Company to provide, each Employee with employee benefits (other than
defined benefit pension and retiree medical benefits) that are substantially
equivalent in the aggregate to the benefits provided by the Purchaser to its
similarly situated employees.
6.3.3 With
respect to the Purchaser’s employee benefit plans, programs and arrangements
covering or otherwise benefiting any Employees on or after the Closing Date
(other than any non-qualified retirement or deferred compensation plans or
equity-based compensation plans), service with the Company shall be counted
for
purposes of eligibility to participate and vesting, and in determining the
level
of benefits with respect to vacation and severance benefits, to the same extent
such service was counted under the corresponding Company Plans prior to the
Closing Date. Such service shall not be counted for purposes of determining
any
other benefit accruals under any plan, program or arrangement of the
Purchaser.
6.3.4 With
respect to any benefit plans of the Purchaser providing welfare benefits
described in Section 3(1) of ERISA to Employees on or after the Closing Date,
such plans shall credit such Employees with the deductibles, copays, annual
out-of-pocket limits or similar costs paid by the Employees under corresponding
Company Plans during the portion of the applicable plan year preceding the
Closing Date (or preceding the end of the benefit transition period described
in
the Transition Services Agreement, if later) and shall waive any pre-existing
condition exclusions, evidence of insurability provisions, waiting period
requirements or any similar provisions, to the extent they were waived under
corresponding Company Plans. On the Closing Date (or, if later, the end of
the
benefit transition period described in the Transition Services Agreement),
and
each month thereafter for the remainder of the plan year, the Seller shall
provide the Purchaser with information regarding the amount of deductibles,
copays, out-of-pocket limits or similar costs incurred by each Employee during
the portion of the plan year preceding such date.
6.3.5 Effective
as of the Closing Date, the Purchaser shall cover, or cause the Company to
cover, Employees under a defined contribution plan and trust (the “Purchaser
DC Plan”)
and a
defined benefit plan and trust, each intended to qualify under Sections 401(a)
and (k) and Section 501(a) of the Code. The Purchaser shall cause the Purchaser
DC Plan to permit Employees to make a direct rollover of their account balances
under the Tecumseh Products Company Salaried Retirement Savings Plan to the
Purchaser DC Plan. The Seller and the Purchaser shall reasonably cooperate
in
good faith to effect such direct rollovers as soon as practicable after the
Closing Date.
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6.3.6 Subject
to the limitations described herein, on and after the Closing Date, the Seller
shall continue to provide retiree medical coverage under the Tecumseh Products
Company Little Giant Pump Company Group Insurance Plan (the “Retiree
Plan”)
to
individuals and their eligible spouses and dependents who as of the Closing
Date
(a) are former employees of the Company receiving retiree medical benefits
or
(b) are Employees who as of the Closing Date, or within three years following
the Closing Date, satisfy the eligibility requirements of the Retiree Plan
(assuming that service with the Company and/or the Purchaser after the Closing
Date is treated as service with the Seller) and are thus entitled to receive
retiree medical benefits upon their subsequent retirement (“Company Retirees”).
For the first four (4) years following the Closing Date, the Seller shall
continue to provide the benefits available to similarly situated Seller
retirees, former employees and employees (“Seller Retirees”), provided,
however, any
amendments to the Retiree Plan shall be applicable to such Company Retirees
to
the same extent and in the same manner as such amendments are applicable to
Seller’s Retirees, provided that during such four (4) year period the Seller
shall not terminate the Retiree Plan as it applies to the Company’s Retirees who
are covered by the Retiree Plan during such period. Following the end of the
above four (4) year period, Seller may make any further amendments to the
Retiree Plan, including termination of the Retiree Plan, provided that (i)
the
benefits provided to salaried Company Retirees shall be equivalent to the
benefits provided to salaried Seller Retirees, (ii) the benefits provided to
hourly Company Retirees shall not be less than those provided to salaried Seller
Retirees, and (iii) the Seller may terminate the Retiree Plan for Company
Retirees only if it terminates the Retiree Plan for salaried Seller Retirees.
All other Employees who do not meet the eligibility criteria describe above
for
coverage under the Retiree Plan, but who meet the eligibility criteria under
the
Purchaser’s retiree medical benefits plan, taking into account service with the
Company prior to the Closing Date, shall be covered under the Purchaser’s
retiree medical plan on the same basis as similarly situated employees of the
Purchaser, except that such Employees shall only be eligible for such coverage
if they retire from the Company after having attained age 65 and will not be
eligible for such retiree benefits if they retire from the Company prior to
age
65, regardless of years of service.
6.3.7 Subject
to the terms of the applicable Company Plan, the Seller shall retain all of
the
duties and obligations under all Company Plans that are sponsored and maintained
by Seller or an ERISA Affiliate, including liability for all claims incurred
under any Company Plans that provide health or welfare benefits to retirees,
former employees, and current employees of the Company, and the Purchaser shall
assume no liability or obligations under such plans (other than as described
in
the Transition Services Agreement; provided,
however,
that
the Seller shall have no liability with respect to claims incurred by Employees
under any Company Plan, other than the Retiree Plan, on and after the Closing
Date (other than as required by law or as described in the Transition Services
Agreement). All Company Plans that are sponsored or maintained by the Company
shall remain the responsibility of the Company on and after the Closing
Date.
6.3.8 Purchaser
agrees to honor, or assume where applicable, and shall cause the Company to
honor, or assume where applicable, the obligations of the Seller and Company
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under
the
provisions of each change in control and severance agreement as set forth on
Schedule
6.3.8.
The
aggregate amount of the obligations (including, any payments by the Company
in
connection with health and life benefits) under these change in control
agreements will not exceed Five Hundred Thousand Dollars ($500,000), and Seller
will be responsible for any obligations under such agreements in excess of
Five
Hundred Thousand Dollars ($500,000).
6.4 Preservation
of Records.
Subject
to Section 9.7.4.2
(relating to the preservation of Tax records), the Seller and the Purchaser
agree that each of them shall preserve and keep the records held by it relating
to the business of the Company for a period of five (5) years from the Closing
Date and shall make such records and personnel available to the other as may
be
reasonably required by such party in connection with, among other things, any
insurance claims by, Legal Proceedings against or governmental investigations
of
the Seller or the Purchaser or any of their Affiliates or in order to enable
the
Seller or the Purchaser to comply with their respective obligations under this
Agreement and each other agreement, document or instrument contemplated hereby
or thereby. In the event the Seller or the Purchaser wishes to destroy such
records within five (5) years of the Closing Date, such Party shall first give
ninety (90) days prior written notice to the other and such other Party shall
have the right at its option and expense, upon prior written notice given to
such Party within that ninety (90) day period, to take possession of the
records.
6.5 Confidentiality;
Publicity.
6.5.1 Prior
to
the Closing, the Purchaser agrees that any information provided to the Purchaser
pursuant to this Agreement shall be held by the Purchaser as confidential
information in accordance with, and shall be subject to the terms of, the
Confidentiality Agreement. Effective upon the Closing, the Confidentiality
Agreement shall terminate with respect to information relating solely to the
Company; provided,
however,
that
the Purchaser acknowledges that any and all other information provided to it
by
the Company or the Seller concerning the Seller shall remain subject to the
terms and conditions of the Confidentiality Agreement after the Closing
Date.
6.5.2 For
a
period of three (3) years after the Closing Date, the Seller will not, and
will
not permit any accountants, counsel, consultants, advisors, agents and
representatives (collectively, “Representatives”)
of the
Seller or the Seller’s Affiliates to, directly or indirectly, disclose or use or
authorize, license or otherwise permit other Persons to use in any way that
is
detrimental to the Purchaser or the Company any trade secrets or other
information which is confidential, proprietary or otherwise not publicly
available, including any confidential data, know-how or information relating
to
the business practices, products, customers, prospects, suppliers, research
and
development, ideas, designs, discoveries, inventions, techniques, equipment,
marketing, sales, methods, manuals, strategies or financial affairs
(collectively, the “Confidential
Information”)
about
(a) the Company, and (b) the Purchaser and its Affiliates obtained in the
performance of this Agreement. The obligation of the Seller, its Affiliates
and
their respective Representatives to hold any such information in confidence
will
be satisfied if each exercises the same degree of care with respect to such
information as it would take to preserve the confidentiality of its own similar
information. In the event of a breach of the
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obligations
hereunder by the Seller or its Affiliates or Representatives, the Parties agree
that, in addition to all other available remedies, the Purchaser will be
entitled to injunctive relief to enforce such obligations in any court of
competent jurisdiction. Notwithstanding the foregoing, Confidential Information
will not include such information which: (x) at the time of disclosure is
publicly available or becomes publicly available through no act or omission
of
the Seller or its Affiliates or Representatives; (y) is disclosed or furnished
to the Seller after the Closing by a third Person that did not acquire the
information under an obligation of confidentiality; or (z) is disclosed by
the
Seller under compulsion of Applicable Law.
6.5.3 The
Parties acknowledge that this Agreement and the transactions contemplated hereby
are of a confidential nature and shall not be disclosed prior to the Closing
except to key employees and Representatives or as required by Applicable Law.
Neither the Seller nor the Purchaser shall issue any press release or public
announcement concerning this Agreement or the transactions contemplated hereby
without obtaining the prior written approval of the other Party hereto, which
approval will not be unreasonably withheld or delayed, unless, based upon advice
of their respective legal counsel, disclosure is otherwise required by
Applicable Law or by the applicable rules of any stock exchange or national
quotation system on which the Purchaser or the Seller list securities,
provided,
however,
that, to
the extent required by Applicable Law, the Party intending to make such release
shall use its commercially reasonable efforts consistent with such Applicable
Law to consult with the other Parties with respect to the text
thereof.
6.6 Use
of Name.
The
Purchaser agrees that it shall cause the Company to (a) as soon as
practicable after the Closing Date and in any event within nine (9) months
following the Closing Date, cease to make any use of the name Tecumseh Products
Company or
Tecumseh, or any service marks, trademarks, trade names, identifying symbols,
logos, emblems, signs or insignia containing or comprising the foregoing,
including any name or xxxx confusingly similar thereto (collectively, the
“Seller
Marks”),
and
(b) immediately after the Closing, cease to hold itself out as having any
affiliation with the Seller or any of its Affiliates. In furtherance thereof,
as
promptly as practicable but in no event later than nine (9) months following
the
Closing Date, the Purchaser shall cause the Company to remove, strike over
or
otherwise obliterate all the Seller Marks from all materials owned by the
Company, including any vehicles, business cards, schedules, stationery,
packaging materials, displays, signs, promotional materials, manuals, forms,
computer software, the Company’s website, and other materials in any form or
media; provided,
however,
that
the Company may during such nine (9) month period continue to use any such
material containing a Seller Xxxx to the extent that it is not practicable
to
remove or obliterate such Seller Xxxx.
Notwithstanding anything herein to the contrary, following the Closing Date,
the
Company may sell or otherwise dispose of any finished product inventory in
existence as of the Closing Date.
6.7 Insurance.
6.7.1 The Purchaser
acknowledges and agrees that, upon Closing, all insurance coverage provided
in
relation to the Company pursuant to the policies identified on Schedule 4.21
as being
maintained by the Seller or its Affiliates (other than the Company)
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45
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(whether
such policies are maintained with third party insurers or with the Seller or
its
Affiliates (other than the Company)) shall cease and no further coverage shall
be available to the Company as an Affiliate of the Seller under any such
policies that are “claims made” basis policies but (subject to the terms of any
relevant policy) without prejudice to any accrued claims which the Company,
the
Seller or any Affiliate (in the latter case in relation to the Company) may
have
at Closing; provided,
however,
that,
subject to the provisions of this Section 6.7, the Seller will add the Company
and the Purchaser as additional insureds (if not already so listed) and Company
shall retain the benefit of the policies identified on Schedule
4.21
that are
“occurrence” based policies of insurance in relation to events occurring prior
to Closing but in respect of which no claim has yet arisen at the time of
Closing.
6.7.2 The
Purchaser and the Seller agree that any claims made under the “occurrence based”
insurance policies referred to in Section 6.7.1 in respect of the Company shall
be administered and collected by the Seller (or by a claims handler appointed
by
the Seller) on behalf of the Company. The Purchaser shall, and shall cause
the
Company to, provide reasonable cooperation to the Seller to enable the Seller
to
comply with the requirements of the relevant insurer, and the Purchaser shall,
and shall cause the Company to, provide such information and assistance as
the
Seller may reasonably request in connection with any such claim. Any monies
received by the Seller as a result of such claims shall be paid over to the
Company, net of all reasonable costs and expenses of recovery (including all
reasonable handling and collection charges by any claims handler appointed
by
the Seller).
6.7.3 In
respect of all claims under the insurance policies referred to in Section 6.7.1
notified to insurers at the date of this Agreement and all claims subsequently
brought under such insurance policies and relating to the Company, the Purchaser
acknowledges that any claims made against the insurance policies referred to
in
Section 6.7.1 will be subject to the deductible on and any self retention
provisions of each relevant insurance policy and neither the Company nor the
Purchaser will be entitled to seek reimbursement of such deductible from the
Seller.
6.7.4 Notwithstanding
anything to the contrary contained in the Agreement, including the provisions
of
ARTICLE 9:
6.7.4.1 Purchaser
acknowledges and agrees that nothing herein shall provide the Company with
any
rights or privileges of any sort whatsoever, and the Purchaser hereby waives
any
claim of right or privilege it may have, to make or pursue any claim on or
receive any proceeds from or with respect to any claim on the “occurrence based”
insurance policies with respect to any liability of the Company retained and
paid by the Seller, including but not limited to any and all claims based upon,
attributable to or resulting from asbestos containing products produced,
manufactured or sold by the Company prior to the Closing Date; and
6.7.4.2 Any
Loss
payable in accordance with Article 9 for which the Purchaser or the Company
has
pursued a claim under the “occurrence based” insurance policies shall be reduced
dollar for dollar to the extent of any amounts actually recovered (after
deducting
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directly
related costs and expenses) by the Company for the Losses for which such claim
was submitted.
6.8 Reasonable
Commercial Efforts.
Upon
the terms and subject to the conditions set forth in this Agreement, each of
the
Parties agrees to use its reasonable commercial efforts to take, or cause to
be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with the other Parties in doing, all things necessary, proper or advisable
to
consummate and make effective, in the most expeditious manner practicable,
the
transactions contemplated by this Agreement, including the following: (a) the
taking of all acts necessary to cause the conditions to Closing to be satisfied
as promptly as practicable, (b) the obtaining of all necessary actions or
nonactions, Consents, approvals and waivers from Governmental Bodies and the
making of all necessary registrations and filings (if any, including filings
with Governmental Bodies) and the taking of all steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by any
Governmental Body, (c) the obtaining of all necessary Consents, approvals or
waivers from third parties, (d) the defending of any lawsuits or other Legal
Proceedings, whether judicial or administrative, challenging this Agreement
or
the consummation of the transactions contemplated hereby, including seeking
to
have any stay or temporary restraining order entered by any court or other
Governmental Body vacated or reversed, and (e) the execution and delivery of
any
additional instruments necessary to consummate the transactions contemplated
by,
and to fully carry out the purposes of, this Agreement.
6.9 HSR
Act Compliance; Foreign Governmental Approvals.
Each of
the Purchaser and the Seller will promptly, and in any event within three (3)
Business Days after execution of this Agreement, make all filings or submissions
as are required under the HSR Act or any other Antitrust Law and to obtain
all
Foreign Governmental Approvals. For the purposes of this Agreement, the term
“Foreign
Governmental Approval”
shall
mean any Consent or Order of, with or to any foreign Governmental Body set
forth
on Schedule
4.5.2
or
Schedule 5.3.2. Each
of
the Purchaser and the Seller will promptly furnish to the other such necessary
information and reasonable assistance as the other may request in connection
with its preparation of any filing or submission which is necessary under the
HSR Act or any other Antitrust Law or to obtain any Foreign Governmental
Approval. Each of the Purchaser and the Seller will promptly provide the other
with copies of all written communications (and memoranda setting forth the
substance of all oral communications) between each of them or their
representatives, on the one hand, and any Governmental Body, on the other hand,
with respect to this Agreement or the transactions contemplated hereby. Without
limiting the generality of the foregoing, each of the Purchaser and the Seller
will promptly notify the other of the receipt and content of any inquiries
or
requests for additional information made by any Governmental Body in connection
therewith and shall promptly (a) comply with any such inquiry or request and
(b)
provide the other with a description of the information provided to any
Governmental Body with respect to any such inquiry or request. In addition,
each
of the Purchaser and the Seller will keep the other apprised of the status
of
any such inquiry or request. The Purchaser and the Seller shall each be
responsible for and pay 50% of all filing fees related to the matters described
in this Section 6.9.
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6.10 Contacts
with Suppliers, Employees and Customers.
After
the date of this Agreement and prior to the Closing, the Seller shall permit
the
Purchaser to have, upon reasonable advance notice to the Seller, discussions
with any suppliers to, employees of, or customers of, the Company.
6.11 Seller
Financial Commitments.
The
Purchaser acknowledges and agrees that, on or before the date that is thirty
(30) days following the Closing Date, it shall cause any Financial Commitment
made by the Seller and its Affiliates (other than the Company) with respect
to
the activities (financial or otherwise) of the Company to be terminated or
settled or replaced by an alternate Financial Commitment from a party other
than
the Seller or its Affiliates (excluding the Company). For purposes of the
foregoing, “Financial
Commitment”
shall
mean any financial commitment or support, including performance bonds, parent
company guarantees, bid bonds, bank guarantees or similar
instruments.
6.12 Intellectual
Property Covenants.
To the
extent that Seller transfers any Intellectual Property or Technology that does
not relate to the Company, or is necessary to the conduct of the business of
Seller or its Affiliates (other than the Company) as conducted up to and through
the Closing Date, after written notice by Seller to Purchaser, Purchaser agrees
to transfer that Intellectual Property or Technology back to Seller and/or
its
Affiliates or, if that Intellectual Property or Technology is used by the
Company, to grant Seller and/or its Affiliates a perpetual, nonexclusive,
sublicensable, fully paid-up license to use that Intellectual Property or
Technology to the extent that Purchaser has the right to make such grant at
the
Seller’s sole cost and expense.
6.13 No
Breaches.
Each of
the Parties agrees that it or they will not take or cause to be taken any action
which would cause or constitute a material breach of any of the representations
and warranties in this Agreement made by such Party. Each of the Parties shall,
in the event of, or promptly after the occurrence of, or promptly after
obtaining knowledge of the occurrence of or the impending or threatened
occurrence of, any fact or event, or a breach of any of the representations
and
warranties in this Agreement made by the Seller or the Purchaser, which would
cause or constitute a material adverse affect with respect to such Party, as
of
the Closing Date, give detailed notice thereof to the other Party hereto; and
such breaching Party shall use its commercially reasonable efforts to prevent
or
promptly to remedy such breach. No disclosure by any Party pursuant to this
Section 6.13 shall be deemed to amend or supplement the Schedule or cure or
waive any misrepresentation or breach of warranty.
6.14 Noncompetition
and Nonsolicitation.
6.14.1 During
the period beginning on the Closing Date and ending on the fifth anniversary
of
the Closing Date, the Seller shall not, and shall not permit its Affiliates
to,
either alone or in conjunction with any other Person, directly or indirectly
(including as a member, agent, shareholder or investor of any Person or in
any
other capacity), engage in, or own, manage, operate, join, control, or
participate in the ownership, management, operation, or control
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of,
or
provide products or services to or for, or provide financial or other assistance
to, any Person in, the design, development, manufacture, distribution,
servicing, selling or marketing of any products that are described on
Schedule
6.14.1A
that
were designed, developed (or under development), manufactured, distributed,
serviced, sold or marketed by the Company at any time prior to the Closing
Date;
provided,
however,
that
nothing in this Section 6.14 shall preclude (a) M. P. Pumps, Inc. or Vairex
Corporation from manufacturing, developing, improving or selling the products
described on Schedule
6.14.1B,
(b) the Seller from owning not more than 1% of the outstanding Capital
Stock of any Person if such stock is listed on a national securities exchange
or
listed with the Nasdaq Stock Market, or is regularly traded in the
over-the-counter market by a member of a national securities exchange, and
(c)
manufacturing, selling, or otherwise distributing products produced by Fasco
Motors (Thailand) Limited and Fasco Australia Pty. Limited in Thailand and
Australia, respectively, and distributed in Australia and New Zealand. The
geographic territory to which this Section 6.14 extends is any country in which
the Company has conducted business within the past three (3) years.
Notwithstanding anything herein to the contrary, while this covenant is in
effect, with regard to the categories of products described on Schedule
6.14.1C
(which
categories of products are manufactured and sold by each of M. P. Pumps and
the
Company as of the Closing Date), M. P. Pumps, Inc. shall not manufacture, sell,
or otherwise distribute any products intended to be used in applications that
would compete with the products manufactured by the Company as of the Closing
Date, including those items in the Company’s product catalog as of the Closing
Date.
6.14.2 The
Seller agrees that, from the date hereof through the third anniversary of the
Closing Date, the Seller shall not, and shall not permit its Affiliates to,
directly or indirectly employ or solicit, receive or accept the performance
of
services by, any current employee of the Company (excluding secretarial and
clerical employees), if employed by the Company or the Purchaser or any of
its
Affiliates at the time of the solicitation. The placing of an advertisement
of a
position of employment by either party or its Representatives to members of
the
public generally shall not constitute a breach of this Section 6.14.2.
6.14.3 If
any
provision contained in this Section 6.14
will for
any reason be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability will not affect any other provisions
of this Section 6.14,
but
this Section 6.14
will be
construed as if such invalid, illegal or unenforceable provision had never
been
contained herein. It is the intention of the Parties that if any of the
restrictions or covenants contained in this Section 6.14
is held
to cover a geographic area or to be of a length of time which is not permitted
by Applicable Law, or in any way construed to be too broad or to any extent
invalid, such provision will not be construed to be null, void and of no effect.
Instead, the Parties agree that a court of competent jurisdiction will construe,
interpret, reform or judicially modify this Section 6.14
to
provide for a covenant having the maximum enforceable geographic area, time
period and other provisions (not greater than those contained herein) as will
be
valid and enforceable under such Applicable Law.
6.14.4 The
Seller agrees that a violation of this Section 6.14
will
cause irreparable injury to the Purchaser, and the Purchaser will be entitled,
in addition to any other rights and remedies it may have at law or in equity,
to
apply for an injunction enjoining and
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restraining
the Seller from doing or continuing to do any such act and any other violations
or threatened violations of this Section 6.14,
and the
Seller consents to the entry thereof. In the event that the Seller is found
to
have breached any covenant in this Section 6.14
the time
period provided for in that covenant shall be tolled (i.e.,
it
shall
not run) for so long as the Seller was in violation of that
covenant.
6.15 No
Solicitation.
From
the date hereof through the Closing, neither the Company nor the Seller will,
nor will the Seller authorize or permit the Company or any Affiliate of the
Seller or any officer, director or employee of the Company, or any investment
banker or other Representative retained by the Seller or the Company or any
of
their respective Affiliates, to (a) directly or indirectly, solicit, initiate,
encourage or participate in any way (including by way of furnishing information)
in any discussion or negotiations with any Person or other entity or group
(other than the Purchaser or an Affiliate of the Purchaser) concerning any
merger, consolidation, sale of assets, sale of Capital Stock or similar
transactions relating to the Company (each, an “Acquisition
Proposal”),
(b)
disclose, directly or indirectly, to any Person considering an Acquisition
Proposal any information concerning the Company, or (c) enter into any
understanding, agreement or commitment with any third party concerning any
merger, consolidation, sale of assets, sale of Capital Stock or similar
transaction relating to the Company. The Company will promptly notify the
Purchaser of any Acquisition Proposal and will promptly provide the Purchaser
with such information regarding the Acquisition Proposal as the Purchaser may
request.
6.16 Additional
Financial Statements.
The
Company will furnish the Purchaser with an unaudited balance sheet and an
unaudited income statement for the Company for each full monthly and quarterly
period prior to the Closing Date as soon as they become available, and in any
event, not later than fifteen (15) days after the end of each month for each
such monthly period financial statement and fifteen (15) days after the end
of
each quarter for each such quarterly period financial statement. The Company
will prepare each of the additional unaudited consolidated financial statements
(a) on a basis consistent with the Interim Financial Statements and (b) in
compliance with the representations and warranties set forth in
Section 4.7.2
with
respect to the Interim Financial Statements.
6.17 Termination
of Related Party Arrangements.
The
Seller and the Company shall cause all Contracts described in Schedule
4.23
, other
than those listed in Schedule
6.17,
to be
terminated immediately prior to the Closing with no further liability or
obligation on the part of any party thereto.
6.18 Section
338 Elections and Forms.
6.18.1 With
respect to the Purchaser’s acquisition of the Shares hereunder, the Seller and
the Purchaser hereby covenant and agree with each other that they will join
in
making an election under Section 338(h)(10) of the Code, and the Treasury
Regulations promulgated thereunder (the “Section
338(h)(10) Election”)
within
one (1) Business Day after the Seller and the Purchaser have agreed upon the
allocation referred to in Section 6.18.2; provided,
however,
that in
the event (a) any legislation shall have been enacted into law which (1) amends
Section
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338
of
the Code and (2) has an effective date applicable to transactions occurring
on
the Closing Date, and (b) the Purchaser’s independent accountants have certified
that such legislation will cause the Section 338(h)(10) Election to produce
a
material net Tax detriment to the Purchaser or, after the Closing Date, the
Company, then the Purchaser may elect not to join in making the Section
338(h)(10) Election and the provisions of this Section 6.18.1 shall be null
and
void. The Purchaser shall be responsible for the preparation and timely filing
of Form 8023 (or any successor form) in connection with the Section 338(h)(10)
Election and the Seller shall cooperate with the Purchaser to enable the
Purchaser to prepare and file such form and to complete the Section 338(h)(10)
Election.
6.18.2 The
Final
Purchase Price, liabilities of the Company, and other relevant items shall
be
allocated among the assets of the Company acquired by the Purchaser as a result
of the Purchaser’s acquisition of the Shares pursuant hereto in accordance with
the rules of Section 338(h)(10) of the Code and the Treasury Regulations
promulgated thereunder. Such allocation will be based on an appraisal obtained
by the Purchaser, at the Purchaser’s expense, to determine the allocation for
the deemed assets sale treatment resulting from the Section 338(h)(10) Election.
Such allocation shall be set forth on a schedule which shall be prepared by
the
Purchaser and provided to the Seller within 120 days following the Closing
Date
for the Seller’s review and approval, which approval shall not be unreasonably
withheld or delayed. The Section 338(h)(10) Election shall be made on Form
8023
(or any successor form), and shall be prepared by the Purchaser and delivered
by
the Purchaser to the Seller as promptly as practicable, but in any event, no
later than 150 days after the Closing Date. A copy of such Form 8023 (or any
successor form), reviewed and signed by the Seller, shall be provided to the
Purchaser by the Seller no later than 180 days after the Closing
Date.
6.19 Releases.
6.19.1 Effective
at the time of the Closing, the Seller hereby, without any further action,
releases and forever discharges the Company and its officers, directors,
employees and Affiliates (other than the Purchaser and Seller), from any and
all
liabilities, claims, obligations, actions, causes of action, suits at law or
in
equity of whatever kind or nature, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, Contracts, controversies,
promises, variances, trespasses, judgments, verdicts, extents, executions,
encumbrances, payments, damages, costs, attorneys fees, expenses, and demands
of
any kind or nature, which the Seller may have or may have had, known or unknown,
from the beginning of the world through and including the Closing Date, against
the Company or any of its officers, directors, employees or Affiliates (other
than the Purchaser and Seller).
6.19.2 Notwithstanding
the foregoing, nothing contained in Section 6.19.1 shall constitute a release
by
the Seller for claims: (a) against the Purchaser arising out of the Purchaser’s
obligations under this Agreement or the Transition Services Agreement referred
to in Section 7.1.4; or (b) against those officers, directors, and employees
of
the Company included in the definition of “Knowledge of the Seller” for reliance
by Seller on such individuals in connection with the representations,
warranties, covenants, and agreements of Seller contained or referenced in
this
Agreement.
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6.20 Interon
Award.
All
payments received as a result of that certain arbitration award in favor of
the
Company from the case captioned Little
Giant Pump Company v. Interon Corporation, m/k/a Noretni Corporation, Environ
Products, Inc., and Kiva Corporation,
Case
No. 54-181-00894-03, shall be apportioned between the Parties as follows: 80%
of
each payment shall be retained by the Company and 20% of each payment shall
be
remitted to the Seller, until such time as the Seller has received Three Hundred
Nineteen Thousand Six Hundred Forty-One and 08/100 Dollars ($319,641.08),
representing the legal fees and costs paid by the Seller in connection with
the
subject arbitration. Purchaser shall, or shall cause the Company to remit to
the
Seller, the monies due hereunder within two (2) Business Days of receipt of
same.
ARTICLE
7
CONDITIONS
TO CLOSING
7.1 Condition
Precedent to Obligations of the Purchaser.
The
obligation of the Purchaser to consummate the transactions contemplated by
this
Agreement is subject to the fulfillment, on or prior to the Closing Date, of
the
following condition (which may be waived by the Purchaser in whole or in part
to
the extent permitted by Applicable Law):
7.1.1 the
representations and warranties made by the Seller in this Agreement qualified
as
to materiality or a Company Material Adverse Effect shall be true and correct,
and those not so qualified shall be true and correct in all material respects,
as of the date hereof and as of the time of Closing as though made as of such
time, except to the extent that any representation or warranty relates to an
earlier date (in which case such representation or warranty qualified by a
Company Material Adverse Effect shall be true and correct, and those not so
qualified shall be true and correct in all material respects, on and as of
such
earlier date);
7.1.2 the
Seller and the Company shall have performed or complied in all material respects
with all obligations and covenants hereunder required to be performed or
complied with by the Seller or the Company at or prior to the Closing
Date;
7.1.3 all
of
the Outstanding Indebtedness of the Company shall have been repaid in full
and
all of the obligations of the Company in connection therewith shall have been
fully satisfied, released and discharged;
and
7.1.4 receipt
of each of the items listed in Section 8.1.
7.2 Condition
Precedent to Obligations of the Seller.
The
obligation of the Seller to consummate the transactions contemplated by this
Agreement is subject to the fulfillment, on or prior to the Closing Date, of
the
following condition (which may be waived by the Seller in whole or in part
to
the extent permitted by Applicable Law):
7.2.1 the
representations and warranties made by the Purchaser in this Agreement qualified
as to materiality shall be true and correct, and those not so qualified shall
be
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true
and
correct in all material respects, as of the date hereof and as of the time
of
the Closing as though made as of such time, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties qualified as to materiality shall
be
true and correct, and those not so qualified shall be true and correct in all
material respects, on and as of such earlier date);
7.2.2 the
Purchaser shall have performed or complied in all material respects with all
obligations and covenants hereunder required to be performed or complied with
by
the Purchaser at or prior to the Closing Date;
and
7.2.3 receipt
of each of the items listed in Section 8.2.
7.3 Conditions
to Each Party’s Obligations.
The
respective obligations of each Party to effect the transactions contemplated
by
this Agreement are subject to the fulfillment, on or prior to the Closing Date,
of each of the following conditions (any or all of which may be waived by a
Party in whole or in part to the extent permitted by Applicable
Law):
7.3.1 the
waiting period under the HSR Act shall have expired or been terminated and
any
other approvals of Governmental Bodies required to consummate the transactions
contemplated hereby shall have been obtained and shall remain in full force
and
effect and all statutory waiting periods in respect thereof shall have
expired;
7.3.2 no
Applicable Law or Order shall have been enacted, entered, promulgated, enforced
or issued by any Governmental Body, and no litigation, proceeding or other
legal
restraint or prohibition shall be pending, threatened or in effect, that could
reasonably be expected to (a) prevent consummation of any of the transactions
contemplated by this Agreement, (b) cause any of the transactions contemplated
by this Agreement to be rescinded following consummation or (c) affect adversely
the right of the Purchaser to own the Shares or to operate the business of
the
Company;
7.3.3 a
Transition Services Agreement by and between the Purchaser and the Seller (to
be
in a form mutually acceptable to the Parties, the “Transition
Services Agreement”)
with
respect to certain transition services reasonably requested by (a) the Seller
from the Purchaser in order to allow a certain Employee to complete tasks “in
process” as of the Closing Date; and (b) the Purchaser from the Seller in order
for the Purchaser to operate the Company’s business in the Ordinary Course of
Business following the Closing, with such transition services as it relates
to
this subsection (b) to include services relating to payroll, information
technology, and accounts receivable and accounts payable services from the
Seller’s Shared Services Center (SSC) in Ann Arbor, Michigan; and
7.3.4 a
license
agreement by and between the Company and the Seller (to be in a form mutually
acceptable to the parties) with respect to the Seller’s grant to the Company of
a license to use United States Patents No. 5,145,323 and No. 5,238,369 entitled
“Liquid Level Control With Capacitive Sensors.”
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ARTICLE
8
DOCUMENTS
TO BE DELIVERED
8.1 Documents
to be Delivered by the Seller.
At the
Closing, the Seller shall have delivered, or cause to be delivered, to the
Purchaser each of the following:
8.1.1 a
stock
certificate representing all of the Shares, duly endorsed in blank or
accompanied by stock transfer powers duly endorsed in blank in proper form
for
transfer;
8.1.2 discharges,
releases and UCC-3 termination statements adequate to discharge all Liens on
the
Shares and the property and assets of the Company on which Liens have been
placed;
8.1.3 a
certificate of the Secretary, Assistant Secretary or other officer of the
Seller, certifying as of the Closing Date, (A) a true and complete copy of
the resolutions duly and validly adopted by its board of directors evidencing
its authorization of the execution, delivery and performance of this Agreement,
(B) a true and complete copy of the certificate of incorporation or other
similar governing instrument of the Company, (C) a true and complete copy
of the bylaws or other similar governing instrument of the Company, and
(D) incumbency matters;
8.1.4 a
certificate executed by the Seller dated as of the Closing Date, to the effect
that the conditions set forth in Section 7.1.1
and
Section 7.1.2
have
been satisfied;
8.1.5 a
certificate of the Secretary of State or other applicable Governmental Authority
certifying the good standing of each of the Seller and the Company in its
jurisdiction of organization as of a date within seven days of the Closing
Date;
8.1.6 all
minute books, ledgers and registers, corporate seals and other corporate records
relating to the organization, ownership and maintenance of the
Company;
8.1.7 written
resignations, effective as of the Closing Date, of each of the directors and
officers of the Company from all directorships and offices with the
Company;
8.1.8 copies
reasonably acceptable to the Purchaser of each of the Consents set forth in
Schedule 4.5.2;
8.1.9 a
duly
executed certification in the form attached hereto as Exhibit A
from the
Seller that the Seller is not a foreign person under the meaning of Treasury
Regulation Section 1.1445-2(b)(2)(iii)(A). Notwithstanding anything to the
contrary contained herein, if the Seller fails to provide the Purchaser with
such certification, the Purchaser shall be entitled to withhold the requisite
amount from the Closing Payment in accordance with Section 1445 of the Code
and
the Treasury Regulations promulgated thereunder;
and
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8.1.10 such
other documents as the Purchaser shall reasonably request.
8.2 Documents
to be Delivered by the Purchaser.
At the
Closing, the Purchaser shall deliver to the Seller the following:
8.2.1 the
Initial Purchase Price in accordance with Section 2.1.1;
8.2.2 evidence
of the wire transfers of the Initial Purchase Price referred to in Section
2.3.1;
8.2.3 a
certificate of the Secretary, Assistant Secretary or other officer of the
Purchaser, certifying as of the Closing Date, (A) a true and complete copy
of the resolutions duly and validly adopted by the board of directors of the
Purchaser evidencing its authorization of the execution, delivery and
performance by the Purchaser of this Agreement, (B) a true and complete
copy of the articles of incorporation of Purchaser, (C) a true and complete
copy of the bylaws of the Purchaser, and (D) incumbency
matters;
8.2.4 a
certificate executed by the Purchaser, dated as of the Closing Date, to the
effect that the conditions set forth in Section 7.2.1
and
Section 7.2.2
have
been satisfied; and
8.2.5 such
other documents as the Seller shall reasonably request.
ARTICLE
9
INDEMNIFICATION
9.1 General
Indemnification.
9.1.1 Subject
to Sections 9.2, 9.4, and 9.5, the Seller hereby agrees to indemnify and hold
the Purchaser, the Company, and their respective directors, officers, employees,
Affiliates, agents, successors and assigns (collectively, the “Purchaser
Indemnified Parties”)
harmless from and against:
9.1.1.1 any
and
all Losses based upon, attributable to or resulting from any inaccuracy or
breach of any representation or warranty of the Seller set forth in ARTICLE
4,
or any
representation or warranty contained in any certificate delivered by or on
behalf of the Seller pursuant to this Agreement;
9.1.1.2 any
and
all Losses based upon, attributable to or resulting from any inaccuracy or
breach of any covenant or other agreement on the part of the Seller under this
Agreement;
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9.1.1.3 any
and
all Losses resulting from the failure to obtain any Consent with respect to
any
Contract of the Company which provides for or requires the Consent of the other
party thereto to be obtained in connection with, or as a result of, the
consummation of any of the transactions contemplated by this
Agreement;
9.1.1.4 any
of
the litigation matters set forth on Schedule
4.17,
except
for claims based upon, attributable to or resulting from any (i) Interon or
Interon based products, or (ii) unpurchased inventory and rebate dispute
involving Xxxx’x Companies, Inc.;
9.1.1.5 any
claim
based upon, attributable to or resulting from asbestos-containing products
manufactured or sold by the Company prior to the Closing; and
9.1.1.6 any
claim
for indemnification against the Company by any Person who was a director or
an
officer of the Company prior to the Closing Date (whether such claim is for
judgments, damages, penalties, fines, costs, amounts paid in settlement, losses,
expenses, or otherwise and whether such claim is pursuant to any statute,
charter document, bylaw, agreement, or otherwise), for any claims made against
such Person in his role as a director or officer of the Company and brought
by
Seller (whether such action, suit, proceeding, complaint, claim or demand is
pursuant to this Agreement, Applicable Law, or otherwise), if such Person is
entitled to indemnification from the Company.
9.1.2 Subject
to Sections 9.3 and 9.5, the Purchaser hereby agrees to indemnify and hold
the
Seller, and its Affiliates, and their respective directors, officers, employees,
agents, successors and assigns harmless from and against:
9.1.2.1 any
and
all Losses based upon, attributable to or resulting from any inaccuracy or
breach of any representation or warranty of the Purchaser set forth in
ARTICLE
5,
or any
representation or warranty contained in any certificate delivered by or on
behalf of the Purchaser pursuant to this Agreement;
9.1.2.2 any
and
all Losses based upon, attributable to or resulting from any inaccuracy or
breach of any covenant or other agreement on the part of the Purchaser under
this Agreement; and
9.1.2.3 claims
based upon, attributable to or resulting from any Interon or Interon based
products.
9.2 Limitations
on Seller’s Indemnification for Breaches of Representations and
Warranties.
Except
for Losses attributable to a breach of a representation and warranty contained
in Section 4.19, which is subject to the limitations on indemnification set
forth in Section 9.4:
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9.2.1 Seller
shall not have any liability under Section 9.1.1.1 with respect to any
individual claim for the breach of a representation and warranty, unless and
until the Losses claimed exceed Sixty-Five Thousand Dollars ($65,000) (the
“De
Minimis Amount”);
9.2.2 Seller
shall not have any liability under Section 9.1.1.1 unless and until the total
amount of Losses to the indemnified parties exceeds, in the aggregate, One
Million Dollars ($1,000,000) (the “Deductible”),
and
then only to the extent that such Losses exceed One Million Dollars
($1,000,000), disregarding any individual claim that does not exceed the De
Minimis Amount and then only to the extent that such Losses exceed the
Deductible;
9.2.3 Seller
shall not have any liability under Section 9.1.1.1 for
any
Losses in excess of an amount equal to 10% in the aggregate of the Final
Purchase Price, subject to the aggregation limitation set forth in Section
9.2.5;
9.2.4 The
limitations on indemnification in Sections 9.2.1, 9.2.2, and 9.2.3 shall not
apply to any indemnification obligations arising from the representations and
warranties set forth in Sections 4.1, 4.2, 4.3, 4.6, 4.10, 4.12.1, and 4.19
(which indemnification with regard to Section 4.19 is subject to the limitations
set forth in Section 9.4); and
9.2.5 Notwithstanding
anything herein to the contrary, Seller shall not have any liability under
Sections 9.1.1.1 and 9.4 for any Losses in excess of an aggregate amount equal
to 15% of the Final Purchase Price (inclusive of any indemnification obligations
under Section 9.4).
9.3 Limitations
on Purchaser’s Indemnification for Breaches of Representations and
Warranties:
9.3.1 Purchaser
shall not have any liability under Section 9.1.2.1 with respect to any
individual claim for the breach of a representation and warranty, unless and
until the Losses claimed exceed the De Minimis Amount;
9.3.2 Purchaser
shall not have any liability under Section 9.1.2.1 unless and until the total
amount of Losses to the indemnified parties exceeds the Deductible, and then
only to the extent that such Losses exceed the Deductible, disregarding any
individual claim that does not exceed the De Minimis Amount, and then only
to
the extent that such Losses exceed the Deductible;
9.3.3 Purchaser
shall not have any liability under Section 9.1.2.1 for any Losses in excess
of
an amount equal to 10% in the aggregate of the Final Purchase Price;
and
9.3.4 The
limitations on indemnification in Sections 9.3.1, 9.3.2, 9.3.3 shall not apply
to any indemnification obligations arising from the representations and
warranties set forth in Sections 5.1 and 5.2.
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9.4 Limitations
on Indemnification for Breaches of Section 4.19.
9.4.1 The
Seller shall have no obligation under Section 9.1.1.1 to indemnify, defend
and
hold harmless the Purchaser Indemnified Parties from and against any Losses
arising in connection with a breach of the representation and warranty set
forth
in Section 4.19 (“Environmental
Liabilities”)
to the
extent that such Environmental Liabilities:
9.4.1.1 (a)
result from, or (b) with respect to clause (y) below only, would not have arisen
but for: (x) the Company, the Purchaser or any Purchaser Indemnified Party
or
third party at the direction of the Purchaser or any Purchaser Indemnified
Party
undertaking any drilling or sampling of soil or groundwater, or conducting
investigations, including, sampling (regardless of whether purposeful or
ancillary to other work) of drains, pipes, trenches, pits, floors, sumps,
sewers, manholes, and containment areas, other than (1) as affirmatively
required by an Order of a Governmental Body with jurisdiction over the property
and the environment or by Environmental Law, (2) resulting from health and
safety concerns so long as the Purchaser or the Company have conducted a
reasonable investigation of the source of the concerns by means other than
drilling or sampling of soil or groundwater, or sampling (regardless of whether
purposeful or ancillary to other work) of drains, pipes, trenches, pits, floors,
sumps, sewers, manholes, and containment areas, and receives consent from the
Seller, which consent will not be unreasonably denied, or (3) as agreed to
in
writing by the Seller in its sole discretion; and (y) any change in the use
of
the real property to non-industrial purposes; or
9.4.1.2 relate
to
remedial action that (a) was not undertaken in a reasonable and cost-effective
manner, which would include, where appropriate, natural attenuation; or exceeded
cleanup standards applicable to industrial properties, including, where
available, risk-based cleanup standards; and (b) was not affirmatively required
by a Governmental Body with jurisdiction over the property and the environment,
or Environmental Law.
9.4.2 The
Seller shall have no obligations to the Purchaser or Purchaser Indemnified
Parties for Environmental Liabilities that relate to remedial action to the
extent such Environmental Liabilities arise out of or result from works
undertaken as part of the remedial action that exceed the standards necessary
to: (a) bring a condition into compliance with Environmental Laws; or (b)
satisfy the requirements of an applicable Governmental Body. In the event a
Loss
occurs in connection with an alleged release (as defined in CERCLA or any other
Environmental Law), or alleged releases of Hazardous Materials at or from a
Company Property or a Former Property, it shall be presumed that such release
and the presence of Hazardous Materials constitutes a breach of a representation
or warranty under Section 4.19,
unless
Seller proves that no breach of any representation or warranty occurred or
exists.
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9.4.3 The
Seller shall not have any liability for Environmental Liabilities unless and
until the total amount of Losses to the indemnified parties exceeds, in the
aggregate, Two Hundred Thousand Dollars ($200,000) (the “Environmental
Deductible”),
and
then only to the extent that such Losses exceed the Environmental Deductible;
and
9.4.4 Subject
to the aggregation limitation set forth in Section 9.2.5, the Seller shall
not
have any liability for Environmental Liabilities for any Losses in excess of
an
amount equal to 7.5% in the aggregate of the Final Purchase Price.
9.5 Survival
of Representations and Warranties and Covenants.
9.5.1 The
representations and warranties of the Purchaser and the Seller contained in
this
Agreement or in any instrument delivered pursuant hereto shall survive the
Closing solely for the purposes of Article 9 and such representations and
warranties shall terminate at 11:59 p.m. on the date that is eighteen (18)
months after the Closing Date; except that (a) the representations and
warranties contained in Sections 4.1, 4.2, 4.3, 4.6, and 4.12.1, with respect
to
Seller, and Sections 5.1 and 5.2 with respect to Purchaser shall survive the
Closing and remain in effect indefinitely; (b) the representations and
warranties contained in Section 4.10 shall survive the Closing until 30 days
after the expiration of the applicable statute of limitations with respect
to
the matter to which the claim relates, as such limitation period may be extended
from time to time; and (c) the representations and warranties contained in
Section 4.19 shall survive the Closing and such representations and warranties
shall terminate at 11:59 p.m. on the date that is six (6) years after the
Closing Date. Any claim for indemnification with respect to any of such matters
which is not asserted by notice given as herein provided relating thereto within
such specified period of survival may not be pursued and is hereby irrevocably
waived after such time. Any claim for indemnification of a Loss asserted within
such period of survival as herein provided will be timely made for purposes
hereof.
9.5.2 Unless
a
specified period is set forth in this Agreement (in which event such specified
period will control), the covenants in this Agreement shall survive the Closing
and remain in effect indefinitely.
9.6 General
Indemnification Procedures.
9.6.1 In
the
event that any Legal Proceedings shall be instituted or any claim or demand
(“Claim”)
shall
be asserted by any Person in respect of which payment may be sought under
Section 9.1
(regardless of the De Minimis Amount, the Deductible, or the Environmental
Deductible referred to above), the indemnified party shall reasonably and
promptly cause written notice of the assertion of any Claim of which it has
knowledge which is covered by this indemnity to be forwarded to the indemnifying
party. Such notice shall identify specifically the basis under which
indemnification is sought pursuant to Section 9.1
and
enclose true and correct copies of any and all written documents furnished
to
the indemnified party by the Person that instituted the Claim. The indemnifying
party shall have the right, at its sole option and expense, to be represented
by
counsel of its choice, which must be reasonably satisfactory to the
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indemnified
party, and to defend against, negotiate, settle or otherwise deal with any
Claim
which relates to any Losses indemnified against hereunder. If the indemnifying
party elects to defend against, negotiate, settle or otherwise deal with any
Claim which relates to any Losses indemnified against hereunder, it shall within
ten (10) days (or sooner, if the nature of the Claim so requires) notify the
indemnified party of its intent to do so. If the indemnifying party elects
not
to defend against, negotiate, settle or otherwise deal with any Claim which
relates to any Losses indemnified against hereunder, fails to notify the
indemnified party of its election as herein provided or contests its obligation
to indemnify the indemnified party for such Losses under this Agreement, the
indemnified party may defend against, negotiate, settle or otherwise deal with
such Claim. If the indemnified party defends any Claim, then the indemnifying
party shall reimburse the indemnified party for the reasonable expenses of
defending such Claim upon submission of periodic bills. If the indemnifying
party shall assume the defense of any Claim, the indemnified party may
participate, at his or its own expense, in the defense of such Claim;
provided,
however,
that
such indemnified party shall be entitled to participate in any such defense
with
separate counsel at the expense of the indemnifying party (a) if so
requested by the indemnifying party to participate or (b) if, in the
reasonable opinion of counsel to the indemnified party, a conflict or potential
conflict exists between the indemnified party and the indemnifying party that
would make such separate representation necessary to adequately protect the
interest of the indemnified party; and provided,
further,
that
the indemnifying party shall not be required to pay for more than one such
counsel for all indemnified parties in connection with any Claim. The Parties
agree to cooperate fully with each other in connection with the defense,
negotiation or settlement of any such Claim.
The
indemnified party shall promptly supply to the indemnifying party copies of
all
correspondence and documents relating to or in connection with such Claim and
keep the indemnifying party fully informed of all developments relating to
or in
connection with such Claim (including providing to the indemnifying party on
request updates and summaries as to the status thereof).
9.6.2 After
any
final judgment or award shall have been rendered by a court, arbitration board
or administrative agency of competent jurisdiction and the expiration of the
time in which to appeal therefrom, or a settlement shall have been consummated,
or the indemnified party and the indemnifying party shall have arrived at a
mutually binding agreement with respect to a Claim hereunder, the indemnified
party shall forward to the indemnifying party notice of any sums due and owing
by the indemnifying party pursuant to this Agreement with respect to such matter
and the indemnifying party shall be required to pay all of the sums so due
and
owing to the indemnified party by wire transfer of immediately available funds
within ten (10) Business Days after the date of such notice.
9.6.3 The
failure of the indemnified party to give reasonably prompt notice of any Claim
shall not release, waive or otherwise affect the indemnifying party’s
obligations with respect thereto except to the extent that the indemnifying
party can demonstrate actual loss and prejudice as a result of such
failure.
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9.7 Tax
Matters
9.7.1 Tax
Indemnification.
9.7.1.1 The
Seller shall indemnify the Purchaser and its Affiliates (including the Company)
and each of their respective officers, directors, employees, stockholders,
and
Representatives and hold them harmless from all liability for Excluded Taxes.
Notwithstanding the foregoing, the Seller shall not indemnify and hold harmless
the Purchaser and its Affiliates (including the Company) or any of their
respective officers, directors, employees or Representatives, from any liability
for Taxes attributable to any action taken on or after the Closing Date by
the
Purchaser, any of its Affiliates (including the Company) or any transferee
of
the Purchaser or any of its Affiliates (other than any such action consented
to
by the Seller, expressly required by Applicable Law or by this Agreement) (a
“Purchaser
Tax Act”)
or
attributable to a breach by the Purchaser of its obligations under this
Agreement.
9.7.1.2 The
Purchaser shall, and shall cause the Company to, indemnify the Seller and its
Affiliates and each of their respective officers, directors, employees,
stockholders and Representatives and hold them harmless from (a) all liability
for Taxes of the Company for any taxable period ending after the Closing Date
(except to the extent such taxable period began before the Closing Date, in
which case the Purchaser’s indemnity will cover only that portion of any such
Taxes that are not for the Pre-Closing Tax Period), (b) all liability for
Transfer Taxes and (c) all liability for Taxes attributable to a Purchaser
Tax
Act or to a breach by the Purchaser of its obligations under this
Agreement.
9.7.1.3 In
the
case of any taxable period that includes (but does not end on) the Closing
Date
(a “Straddle
Period”):
9.7.1.3.1 real
property Taxes (“Property
Taxes”)
of the
Company allocable to the Pre-Closing Tax Period shall be equal to the amount
of
such Property Taxes for the entire Straddle Period multiplied by a fraction,
the
numerator of which is the number of days during the Straddle Period that are
in
the Pre-Closing Tax Period and the denominator of which is the number of days
in
the Straddle Period; and
9.7.1.3.2 the
Taxes
(other than Property Taxes) of the Company allocable to the Pre-Closing Tax
Period shall be computed as if such taxable period ended as of the Effective
Time on the Closing Date, applying all exemptions, allowances or deductions
(including depreciation and amortization deductions) applicable to such
Pre-Closing Tax Period.
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9.7.2 Procedures
Relating to Indemnification of Tax Claims.
9.7.2.1 If
one
Party is responsible for the payment of Taxes pursuant to Section 9.7.1
(the
“Tax
Indemnifying Party”),
and
the other Party (the “Tax
Indemnified Party”)
receives notice of any deficiency, proposed adjustment, assessment, audit,
examination, suit, dispute or other claim (a “Tax
Claim”)
with
respect to such Taxes, the Tax Indemnified Party shall promptly notify the
Tax
Indemnifying Party in writing of such Tax Claim. If notice of a Tax Claim is
not
given to the Tax Indemnifying Party within a sufficient period of time to allow
such Party effectively to contest such Tax Claim, or in reasonable detail to
apprise such Party of the nature of the Tax Claim, the Tax Indemnifying Party
shall not be liable to the Tax Indemnified Party (or any of its Affiliates
or
any of their respective officers, directors, employees, stockholders or
Representatives) to the extent that the Tax Indemnifying Party position is
actually prejudiced as a result thereof.
9.7.2.2 With
respect to any Tax Claim, the Tax Indemnifying Party shall assume and control
all proceedings taken in connection with such Tax Claim (including selection
of
counsel) and, without limiting the foregoing, may in its sole discretion pursue
or forego any and all administrative proceedings with any taxing authority
with
respect thereto, and may, in its sole discretion, either pay the Tax claimed
and
xxx for a refund or contest the Tax Claim in any permissible manner;
provided,
however,
that in
the case of a Tax Claim relating solely to Taxes of the Company for a Straddle
Period, the Seller and the Purchaser shall jointly control all proceedings
taken
in connection with any such Tax Claim.
9.7.2.3 The
Tax
Indemnified Party and each of its respective Affiliates shall cooperate with
the
Tax Indemnifying Party in contesting any Tax Claim, which cooperation shall
include the retention and (upon the Tax Indemnifying Party’s request) the
provision to the Tax Indemnifying Party of records and information which are
reasonably relevant to such Tax Claim, and making employees available on a
mutually convenient basis to provide additional information or explanation
of
any material provided hereunder or to testify at proceedings relating to such
Tax Claim.
9.7.2.4 In
no
case shall the Tax Indemnified Party, the Company or any of their respective
officers, directors, employees, stockholders or Representatives settle or
otherwise compromise any Tax Claim without the Tax Indemnifying Party’s prior
written consent. Neither Party shall settle a Tax Claim relating solely to
Taxes
of the Company for a Straddle Period without the other Party’s prior written
consent.
9.7.3 Responsibility
for Preparation and Filing of Tax Returns and Amendments.
9.7.3.1 For
any
taxable period of the Company that includes (but does not end on) the Closing
Date, the Purchaser shall timely prepare and file with the
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appropriate
authorities all Tax Returns required to be filed and shall pay all Taxes due
with respect to such returns, reports and forms; provided
that the
Seller shall reimburse the Purchaser for any amount owed by the Seller pursuant
to Section 9.7.1.1
with
respect to the taxable periods covered by such Tax Returns. All such Tax Returns
shall be prepared on a basis consistent with past practice. The Purchaser shall
furnish such Tax Returns to the Seller for its approval (which approval shall
not be unreasonably delayed or withheld) at least twenty (20) days prior to
the
due date for filing such Tax Returns.
9.7.3.2 For
any
taxable period of the Company that ends on or before the Closing Date, the
Seller shall timely prepare and the Purchaser or the Seller, as appropriate,
shall timely file with the appropriate authorities all Tax Returns required
to
be filed. The Purchaser shall timely furnish tax work papers to the Seller
upon
request in accordance with the Seller’s past custom and practice. The Seller
shall pay all Taxes due with respect to such Tax Returns. Any Tax Returns to
be
filed by the Purchaser or the Company shall be furnished by the Seller to the
Purchaser or Company, as the case may be, for signature and filing at least
five
(5) days prior to the due date for filing such Tax Returns and the Purchaser
or
Company, as the case may be, shall promptly sign and timely file any such Tax
Return. The Purchaser and the Seller agree to cause the Company to file all
Tax
Returns for the period including the Closing Date on the basis that the relevant
taxable period ended as of the Effective Time on the Closing Date, unless the
relevant taxing authority will not accept a Tax Return filed on that
basis.
9.7.3.3 The
Seller shall be responsible for filing any amended, consolidated, combined
or
unitary Tax Returns for taxable years ending on or prior to the Closing Date.
For those jurisdictions in which separate Tax Returns are filed by the Company,
any required amended Tax Returns shall be prepared by the Seller and furnished
to the Purchaser or the Company, as the case may be, for signature and filing
at
least twenty (20) days prior to the due date for filing such Tax Returns, and
the Purchaser or Company, as the case may be, shall promptly sign and timely
file any such amended Tax Return.
9.7.4 Cooperation.
9.7.4.1 Each
of
the Seller, the Company, and the Purchaser shall reasonably cooperate, and
shall
cause their respective Affiliates, officers, employees and Representatives
reasonably to cooperate, in preparing and filing all Tax Returns, including
maintaining and making available to each other all records necessary in
connection with Taxes and in resolving all disputes and audits with respect
to
all taxable periods.
9.7.4.2 Such
cooperation shall include the retention and (upon the other Party’s request, at
the other Party’s cost and expense, and at the time and place mutually agreed
upon by the Parties) the provision of records and information that are
reasonably relevant to any such audit, litigation or other proceeding and making
employees available on a mutually convenient basis to provide additional
information and explanation of any
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material
provided hereunder, to the extent such information and/or explanation is readily
available and within the control of the Party to which such request is made.
The
responsibility to retain records and information shall include the
responsibility to (a) retain such records and information as are required
to be retained by any applicable taxing authority and (b) retain such records
and information in machine-readable format where appropriate (to the extent
such
records and information are in such format as of the Closing Date) such that
the
requesting Party shall be able to readily access such records and information.
The Purchaser and the Seller shall (1) retain all books and records with respect
to Tax matters pertinent to the Company relating to any taxable period beginning
before the Closing Date until the expiration of the statute of limitations
(and,
to the extent notified by the Purchaser or the Seller, any extensions thereof)
of the respective taxable periods, and to abide by all record retention
arrangements entered into with any taxing authority, and (2) give the other
Party reasonable written notice prior to transferring, destroying or discarding
any such books and records and, if the other Party so requests, the Purchaser,
or the Seller, as the case may be, shall allow the other Party to take
possession of such books and records at its sole cost and expense. The
requesting Party shall reimburse the other Party for any reasonable
out-of-pocket expenses, or costs of making employees available, upon receipt
of
reasonable documentation of such expenses or costs. Any information or
explanation obtained pursuant to this Section 9.7.4.2
shall be
maintained in confidence, except (x) as may be legally required in connection
with claims for refund or in conducting or defending any Tax audit or other
proceeding or (y) to the extent the disclosing Party provides written permission
for such disclosure.
9.7.5 Refunds
and Credits.
9.7.5.1 Any
refunds or credits of Taxes of the Company for any Pre-Closing Tax Period or
that are Excluded Taxes shall be for the account of the Seller, and shall be
paid over to such Party within fifteen (15) calendar days. Any refunds or
credits of the Company for any taxable period beginning after the Closing Date
shall be for the account of the Purchaser, and shall be paid over to such Party
within fifteen (15) calendar days. Any refunds or credits of Taxes of the
Company for any Straddle Period shall be equitably apportioned between the
Seller and the Purchaser. The Purchaser shall, if the Seller so requests and
at
the Seller’s expense, file for and obtain any refunds or credits, or cause the
Company to file for and obtain any refunds or credits, to which the Seller
is
entitled under this Section 9.7.5
the
Purchaser shall permit the Seller to control the prosecution of any such refund
claim.
9.7.5.2 The
Purchaser shall cause the Company to elect, where permitted by Applicable Law,
to carry forward any Tax asset arising in a taxable period beginning after
the
Closing Date that would, absent such election, be carried back to a Pre-Closing
Tax Period in which the Company was included in a consolidated, combined or
unitary return with the Seller or its Affiliates.
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9.8 Exclusive
Remedies.
9.8.1 The
parties hereto agree that their respective remedies under Article 9 of this
Agreement are their sole and exclusive remedies under this Agreement or with
respect to the transactions contemplated hereby, including without limitation,
any matter based on the inaccuracy, untruth, incompleteness or breach of any
representation or warranty of any party hereto contained herein or based on
the
failure of any covenant, agreement or undertaking herein, and the parties hereto
hereby waive any claims with respect to any other right of contribution or
indemnity available against any indemnifying party hereunder in such capacity
on
the basis of common law, statute or otherwise beyond the express terms of this
Agreement; provided,
however,
that
this exclusive remedy for damages does not preclude a party from bringing an
action (i) for specific performance or other equitable remedy to require a
party
to perform its obligations under this Agreement or any Seller Document or
Purchaser Document; or (ii) for damages or an equitable remedy based on a
knowing and intentional (a) breach of a representation and warranty under this
Agreement or (b) a misrepresentation, either such made with the intent to
defraud or deceive;
9.8.2 Notwithstanding
any other provision of this Agreement, the liability for indemnification of
any
indemnifying party under this Agreement shall not exceed the actual damages
of
the party entitled to indemnification and shall not include incidental,
consequential, indirect, special, punitive, exemplary or other similar damages
(unless such damages are obtained against an indemnified Party by a third
party), other than compensatory damages; and
9.8.3 Each
of
the Seller and Purchaser hereby acknowledge and agree that the provisions of
this ARTICLE
9,
including those of this Section 9.8,
were
specifically bargained for and reflected in the amounts payable to Seller
pursuant to ARTICLE
2.
ARTICLE
10
MISCELLANEOUS
10.1 Certain
Definitions.
For
purposes of this Agreement, the following terms shall have the meanings
specified in this Section 10.1:
“Accounting
Principles”
means
GAAP, and where a specific method, principle or calculation with GAAP is
specified in the accounting principles set forth in Exhibit
B,
means a
calculation made in a consistent manner (to the extent applicable) in accordance
with such specific method, principle or calculation. For purposes of any
application of the Accounting Principles hereunder, GAAP is to be applied on
a
basis consistent with those principles reflected by the Company in the
preparation of the Historical Financial Statements, as modified or supplemented
by Exhibit
B.
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“Acquisition
Proposal”
shall
have the meaning set forth in Section 6.15.
“Adjustment
Amount”
shall
have the meaning set forth in Section 2.2.4.
“Adjustment
Period”
shall
have the meaning set forth in Section 2.1.1.
“Affiliate”
means,
with respect to any Person, any other Person controlling, controlled by or
under
common control with such Person.
“Affiliated
Group”
shall
have the meaning set forth in Section 4.10.11.
“Agreement”
shall
have the meaning set forth in the preamble to this Agreement.
“Antitrust
Laws”
means
the Xxxxxxx Act, the Xxxxxxx Act, the HSR Act, the Federal Trade Commission
Act
and all other federal, state and foreign statutes, rules, regulations, Orders,
administrative and judicial doctrines, and other Applicable Laws that are
designed or intended to prohibit, restrict or regulate actions having the
purpose or effect of monopolization or restraint of trade.
“Applicable
Law”
shall
have the meaning set forth in Section 4.5.1.
“Approved
Absence”
shall
have the meaning set forth in Section 6.3.1.
“Balance
Sheet”
shall
have the meaning set forth in Section 4.7.1.
“Balance
Sheet Date”
shall
have the meaning set forth in Section 4.7.1..
“Business
Day”
means
any day of the year not a Saturday or a Sunday on which national banking
institutions in Detroit, Michigan are open to the public for conducting business
and are not required or authorized to close.
“Capital
Stock”
means
any capital stock, partnership, membership, joint venture or other ownership
or
equity interest, participation or securities (whether voting or non-voting,
whether preferred, common or otherwise, and including stock appreciation,
contingent interest or similar rights) of a Person.
“CERCLA”
means
the Comprehensive Environmental Response, Compensation and Liability Act (42
U.S.C. § 9601 et
seq.).
“Claim”
shall
have the meaning set forth in Section 9.6.1.
“Closing”
shall
have the meaning set forth in Section 3.1.
“Closing
Date”
shall
have the meaning set forth in Section 3.1.
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“Closing
Date Working Capital”
shall
have the meaning set forth in Section 2.2.1.
“Code”
shall
mean the Internal Revenue Code of 1986, as amended.
“Company”
shall
have the meaning set forth in the recitals of this Agreement.
“Company
Intellectual Property”
shall
mean all Intellectual Property owned by the Company.
“Company
Material Adverse Effect”
means
any change, effect, event, occurrence or state of facts that could reasonably
be
expected to (a) be materially adverse to the business, condition (financial
or
otherwise), assets, liabilities, or results of operations of the Company taken
as a whole, or (b) materially adversely affect the ability of the Seller and
the
Company to consummate the transactions contemplated by this Agreement in a
timely manner; provided,
however,
that
the effects of changes (1) that are generally applicable to general economic,
political or market conditions in any country in which the Company operates,
or
(2) from any action that is specifically required to be taken by, or from the
failure to take any action that is specifically prohibited by, this Agreement,
will, in each case, be excluded from the determination of Company Material
Adverse Effect.
“Company
Plans”
shall
have the meaning set forth in Section 4.15.1.
“Company
Property”
or
“Company
Properties”
shall
have the meaning set forth in Section 4.11.1.
“Company
Retirees”
shall
have the meaning set forth in Section 6.3.6.
“Computer
Software”
shall
have the meaning set forth in Section 4.13.10.
“Confidential
Information”
shall
have the meaning set forth in Section 6.5.2.
“Confidentiality
Agreement”
means
that certain confidentiality and non-disclosure agreement dated as of September
13, 2005 between the Seller and the Purchaser.
“Consent”
means
any consent, permit, or authorization
“Contract”
means
any contract, agreement, plan, understanding, indenture, note, bond, loan,
instrument, lease, commitment or other arrangement or agreement, whether written
or oral.
“Deductible”
shall
have the meaning set forth in Section 9.2.2.
“De
Minimis Amount”
shall
have the meaning set forth in Section 9.2.1.
“Desktop
Software”
shall
have the meaning set forth in Section 4.13.13.
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“Effective
Time”
shall
have the meaning set forth in Section 1.1.
“Employees”
shall
have the meaning set forth in Section 6.3.1.
“Environmental
Deductible”
shall
have the meaning set forth in Section 9.4.3.
“Environmental
Law”
means
any applicable federal, state or local statute, regulation, official policy
issued by a Governmental Body, ordinance, or rule of common law in effect as
of
the Closing Date relating to (i) the protection of the environment including,
and/or natural resources and/or the protection of persons and property from
Hazardous Materials, including any applicable provisions of CERCLA, RCRA, the
Clean Water Act (33 U.S.C. § 1251 et
seq.),
the
Clean Air Act (42 U.S.C. § 7401 et
seq.)
the
Toxic Substances Control Act (15 U.S.C. § 2601 et
seq.),
and
the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. § 136
et
seq.),
and
the regulations promulgated pursuant thereto, any comparable state or foreign
law, regulations, rules, or official policy issued by a Governmental Body,
all
as amended, and (ii) any Order of a Governmental Body relating to the
environment, natural resources, or the protection of the environment or relating
to property damage or personal injury in connection with Hazardous Materials
released into or migrating in the environment.
“Environmental
Liabilities”
shall
have the meaning set forth in Section 9.4.1.
“ERISA”
means
the Employee Retirement Income Security Act of 1974, as amended.
“ERISA
Affiliate”
shall
have the meaning set forth in Section 4.15.1.
“Excluded
Taxes”
means
any liability, obligation or commitment, whether or not accrued, assessed or
currently due and payable, (i) for any Taxes of the Company for any Pre-Closing
Tax Period and (ii) as a result of Treasury Regulation §1.1502-6(a) for Taxes of
the Seller or any other corporation which has been affiliated with the Seller
(other than the Company).
“Final
Purchase Price”
shall
have the meaning set forth in Section 2.1.1.
“Financial
Commitment”
shall
have the meaning set forth in Section 6.11.
“Financial
Statements”
shall
have the meaning set forth in Section 4.7.2.
“Foreign
Governmental Approval”
shall
have the meaning set forth in Section 6.9.
“GAAP”
means
generally accepted United States accounting principles.
“Governmental
Body”
means
any government or governmental or regulatory body thereof, or political
subdivision thereof, whether federal, state, local or foreign, or any agency,
instrumentality or authority thereof, or any court or arbitrator (public or
private).
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“Hazardous
Material”
means
any substance, material or waste that is characterized, classified or designated
under any Environmental Law as a hazardous substance, toxic substance,
pollutant, contaminant or words of similar meaning or effect, including,
petroleum and its by-products, PCBs, crude oil or any fraction thereof, natural
gas, natural gas liquids or synthetic gas usable for fuel, or isomers of
dioxin.
“Historical
Financial Statements”
shall
have the meaning set forth in Section 4.7.1.
“HSR
Act”
shall
mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 as
amended.
“Initial
Purchase Price”
shall
have the meaning set forth in Section 2.1.1.
“Intellectual
Property” means
all
inventions, improvements, patents, utility models, designs, trade names, trade
dress, trade secrets, trademarks, service marks, d/b/a’s, domain names,
copyrights, know-how, software, databases and other proprietary rights
(including all grants, registrations or applications therefor), and all goodwill
associated therewith and applications or registrations therefor, currently
used
in the business as presently conducted and as conducted up to and through the
Closing Date.
“Interim
Financial Statements”
shall
have the meaning set forth in Section 4.7.2.
“Inventory”
shall
have the meaning set forth in the Accounting Principles.
“IRS”
means
the Internal Revenue Service of the United States.
“Knowledge
of the Purchaser”
means
the actual knowledge, after due inquiry, of the senior officers of the Purchaser
or other employees of the Purchaser actively involved in the transactions
contemplated hereby.
“Knowledge
of the Seller”
means
the actual knowledge, after due inquiry, of the individuals identified on
Annex 1.
“Law”
means
any federal, state, local or foreign law (including common law), statute, code,
ordinance, rule, regulation or other requirement.
“Leased
Real Property”
or
“Leased
Real Properties”
shall
have the meaning set forth in Section 4.11.1.
“Leased
Warehouse Property”
shall
have the meaning set forth in Section 4.11.10.
“Legal
Proceeding”
means
any judicial, administrative or arbitral actions, suits, proceedings (public
or
private), claims or governmental proceedings.
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“Lien”
means
any lien, pledge, mortgage, deed of trust, security interest, claim, lease,
charge, option, right of first refusal, easement, servitude, transfer
restriction under any shareholder or similar agreement, encumbrance or any
other
restriction or limitation whatsoever.
“Losses”
means
any and all losses, claims, expenses, damages, Orders, judgments, settlements,
debts, liabilities, penalties, fines, obligations, interest (including
prejudgment interest), costs and expenses (including court costs and reasonable
attorneys’ fees and expenses and all costs of defense and investigation), and
shall include any payments made by the Purchaser or the Company to any
transferee to whom the Purchaser or the Company transfers any of the Company
Properties, where such payments result from any breach of any representation
or
warranty of the Seller set forth in Section 4.19.
“Material
Contracts”
shall
have the meaning set forth in Section 4.14.1.
“Objection
Notice”
shall
have the meaning set forth in Section 2.2.2.
“Order”
means
any order, injunction, temporary restraining order, judgment, decree, ruling,
charge, writ, assessment or arbitration award.
“Ordinary
Course of Business”
means
the ordinary course of business of the Company, consistent with past
practice.
“Outstanding
Indebtedness”
means,
with respect to the Company, without duplication:
| (A) |
all
liabilities of the Company for borrowed money, whether current or
funded,
secured or unsecured, all obligations of the Company evidenced by
bonds,
debentures, notes or similar instruments;
|
| (B) |
all
liabilities of the Company for the deferred purchase price of property
(including all liabilities created or arising under any conditional
sale
or other title retention Contract with respect to any such property),
and
all liabilities of the Company for “earn-out”, contingent or similar type
payments;
|
| (C) |
all
liabilities in respect of any lease of (or other arrangement conveying
the
right to use) real or personal property, or a combination thereof,
which
obligations are required to be classified and accounted for as finance
or
capital leases on a balance sheet of the Company under the Accounting
Principles, and the amount of such obligations shall be the capitalized
amount thereof determined in accordance with the Accounting Principles;
|
| (D) |
(1)
all liabilities of the Company for the reimbursement of any obligor
on any
letter of credit, banker’s acceptance or similar credit
|
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transaction
securing obligations of a Person of a type described in clauses (A), (B) or
(C)
above only to the extent of the obligation secured and only to the extent
actually drawn down or borrowed, and (2) all such liabilities for which the
Company is responsible or liable as obligor, guarantor or otherwise, only to
the
extent of the obligation secured and only to the extent actually drawn down
or
borrowed;
| (E) |
all
liabilities of the Company in respect of uncashed checks issued by
the
Company, and all cash or bank overdrafts of the Company, in each
case, to
the extent not already netted out in the calculation of cash;
|
| (F) |
all
other liabilities required to be reported as short-term or long-term
indebtedness on a balance sheet of the Company prepared in accordance
with
the Accounting Principles;
|
| (G) |
all
penalty payments, premiums, charges, yield maintenance amounts and
other
expenses (1) payable as a result of or in connection with the prepayment
of any obligations of the types referred to in clauses (A) through
(F)
(assuming for purposes of calculating such amounts that such prepayment
occurs immediately prior to or at the time of the Closing on the
Closing
Date), or (2) in respect of obligations of the types referred to
in
clauses (A) through (F) above that are triggered or accelerated solely
as
a result of the transactions contemplated hereby;
and
|
| (H) |
all
liabilities of the type described in any of clauses (A) through (G)
above
of any partnership or joint venture as to which the Company is or
may
become liable.
|
in
all
cases (other than clause (G)) as measured immediately prior to the Closing
and
in the case of clause (G), assuming such prepayment occurs, or obligation is
triggered or accelerated, immediately prior to or at the time of the Closing
on
the Closing Date.
“Owned
Property”
or
“Owned
Properties”
shall
have the meaning set forth in Section 4.11.1.
“Parties”
and
“Party”
shall
have the meaning set forth in the recitals of this Agreement.
“PBGC”
means
the Pension Benefit Guaranty Corporation.
“PCBs”
means
polychlorinated biphenyls.
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71
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“Permits”
means
any authorizations, consents, licenses, permits, exemptions, certificates,
waivers, rights, franchises, orders on approvals of, and registration with,
any
Governmental Body.
“Permitted
Encumbrances”
shall
have the meaning set forth in Section 4.12.1.
“Person”
means
any individual, partnership, joint venture, trust, corporation, limited
liability entity, unincorporated organization or other entity (including a
Governmental Body).
“Pre-Closing
Tax Period”
means,
with respect to the Company, any Tax period (or portion thereof) ending on
or
before the Closing Date.
“Property
Taxes”
shall
have the meaning set forth in Section 9.7.1.3.1.
“Purchaser”
shall
have the meaning set forth in the preamble of this Agreement.
“Purchaser
DC Plan”
shall
have the meaning set forth in Section 6.3.5.
“Purchaser
Documents”
shall
have the meaning set forth in Section 5.2.
“Purchaser
Indemnified Parties”
shall
have the meaning set forth in Section 9.1.
“Purchaser
Tax Act”
shall
have the meaning set forth in Section 9.7.1.1.
“RCRA”
means
the
Resource Conservation and Recovery Act (42 U.S.C. § 6901 et
seq.).
“Representatives”
shall
have the meaning set forth in Section 6.5.2.
“Retiree
Plan”
shall
have the meaning set forth in Section 6.3.6.
“Schedule”
shall
mean the Schedule attached to this Agreement.
“Section
338(h)(10) Election”
shall
have the meaning set forth in Section 6.18.1.
“Securities
Act”
shall
have the meaning set forth in Section 5.5.
“Seller”
shall
have the meaning set forth in the preamble of this Agreement.
“Seller
Documents”
shall
have the meaning set forth in Section 4.2.
“Seller
Marks”
shall
have the meaning set forth in Section 6.6.
“Seller
Retirees”
shall
have the meaning set forth in Section 6.3.6.
“Shares”
shall
have the meaning set forth in the recitals of this Agreement.
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72
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“Straddle
Period”
shall
have the meaning set forth in Section 9.7.1.3.
“Subsidiaries”
means
any corporations or other entities (including partnerships and other business
associations and joint ventures) with respect to which a Person (or a subsidiary
thereof) directly or indirectly owns at least a majority of the voting power
represented by the outstanding Capital Stock or other voting securities or
interest having voting power under ordinary circumstances to elect a majority
of
the directors or similar members of the governing body, or otherwise to direct
the management and policies, of such corporations or entities.
“Target
Working Capital”
shall
mean Thirty-Four Million Five Hundred Thousand Dollars
($34,500,000).
“Tax
Claim”
shall
have the meaning set forth in Section 9.7.2.1.
“Tax
Indemnified Party”
shall
have the meaning set forth in Section 9.7.2.1.
“Tax
Indemnifying Party”
shall
have the meaning set forth in Section 9.7.2.1.
“Tax
Return”
means
all returns, declarations, documents, reports, estimates, information returns,
statements or other information or filing required to be supplied to any taxing
authority or jurisdiction (foreign or domestic) with respect to any
Taxes.
“Taxes”
means
(i) all federal, state, local or foreign or other subdivision or taxing agency
thereof (including a United States possession), whether computed on a separate,
consolidated, unitary, combined or any other basis, taxes, charges, fees,
imposts, levies or other assessments, including all net income, gross income,
gross receipts, capital, sales, use, ad valorem, value added, alternative or
add-on minimum, transfer, franchise, profits, inventory, Capital Stock, license,
withholding, payroll, employment, social security, unemployment, excise,
severance, stamp, occupation, property, real or personal and estimated taxes,
customs duties, fees, assessments environmental, goods and services, profits,
single business, and charges of any kind whatsoever, (ii) all interest,
penalties, fines, additions to tax or additional amounts imposed by any taxing
authority in connection with any item described in clause (i), and (iii) “Tax”
shall have the correlative meaning any transferee liability in respect of any
items described in clauses (i) and/or (ii).
“Technology”
means,
collectively, all designs, formulas, algorithms, procedures, techniques, ideas,
know-how, software, tools, inventions, creations, improvements, works of
authorship other similar materials relating to the Company’s products, and all
recordings, graphs, drawings, reports, analyses, other writings, and any other
embodiment of the above, in any form, whether or not specifically listed herein,
and all related technology used in, incorporated in, embodied in or displayed
by
any of the foregoing, or used or useful in the design, development,
reproduction, maintenance or modification of any of the foregoing.
“Title
Defects”
shall
have the meaning set forth in Section 4.11.1.
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“Trade
Accounts Payable”
shall
have the meaning set forth in the Accounting Principles.
“Trade
Receivables”
shall
have the meaning set forth in the Accounting Principles.
“Transfer
Taxes”
means
all sales, use, transfer, intangible, recordation, documentary stamp or similar
Taxes or charges, of any nature whatsoever.
“Transition
Services Agreement”
shall
have the meaning set forth in Section 7.3.3.
“Unrelated
Accounting Firm”
shall
have the meaning set forth in Section 2.2.3.
“U.S.
Dollars”
or
“Dollars”
means
the legal currency of the United States.
“Working
Capital”
means
as of the applicable date, Inventory, Trade Receivables, and Trade Accounts
Payable prepared on a basis consistent with the Accounting
Principles.
10.2 Payment
of Transfer Taxes.
10.2.1 The
Purchaser and the Seller shall each be liable for and shall pay 50% of all
Transfer Taxes applicable to, or resulting from, the transactions contemplated
by this Agreement, and the Purchaser and the Seller shall cooperate in timely
making all filings, returns, reports and forms as may be required to comply
with
the provisions of such Tax Laws.
10.2.2 The
Purchaser and the Seller shall cooperate with each other in attempting to
minimize Transfer Taxes, if any.
10.2.3 The
Purchaser shall provide to the Seller, and the Seller shall provide to the
Purchaser, all exemption certificates with respect to Transfer Taxes that may
be
provided for under Applicable Law. Such certificates shall be in the form,
and
shall be signed by the proper Party, as provided under Applicable
Law.
10.3 Expenses.
Except
as otherwise provided in this Agreement, the Seller and the Purchaser shall
each
bear their own expenses incurred in connection with the negotiation and
execution of this Agreement and each other agreement, document and instrument
contemplated by this Agreement and the consummation of the transactions
contemplated hereby and thereby, it being understood that in no event shall
the
Company bear any of such costs and expenses.
10.4 Further
Assurances.
The
Seller and the Purchaser each agrees to execute and deliver such other documents
or agreements and to take such other action as may be reasonably necessary
or
desirable for the implementation of this Agreement and the consummation of
the
transactions contemplated hereby.
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10.5 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Michigan regardless of the laws that might otherwise govern under
applicable principles of conflict of laws thereof.
10.6 Submission
to Jurisdiction; Consent to Service of Process.
10.6.1 The
Parties hereby irrevocably submit to the exclusive jurisdiction of any federal
or state court located within the State of Michigan over any dispute arising
out
of or relating to this Agreement or any of the transactions contemplated hereby
and each Party hereby irrevocably agrees that all claims in respect of such
dispute or any suit, action, or proceeding related thereto may be heard and
determined in such courts. The Parties hereby irrevocably waive, to the fullest
extent permitted by Applicable Law, any objection which they may now or
hereafter have to the laying of venue of any such dispute brought in such court
or any defense of inconvenient forum for the maintenance of such dispute. Each
of the Parties agrees that a judgment in any such dispute may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided
by
Law.
10.6.2 Each
of
the Parties hereby consents to process being served by any Party to this
Agreement in any suit, action or proceeding by the mailing of a copy thereof
in
accordance with the provisions of Section 10.10.
10.7 Recovery
of Fees by Prevailing Party.
In any
action at law or in equity to enforce any of the provisions or rights under
this
Agreement, the Party which does not prevail in such litigation, as determined
by
the court in a final judgment or decree, shall pay to the prevailing Party
all
costs, expenses and reasonable attorneys’ fees incurred by the prevailing Party,
including such costs, expenses and fees of any appeals. If the prevailing Party
shall recover judgment in any action or proceeding, its costs, expenses and
attorneys’ fees shall be included as part of such judgment.
10.8 Entire
Agreement; Amendments and Waivers.
This
Agreement (including the schedules hereto) represents the entire understanding
and agreement between the Parties with respect to the subject matter hereof
and
can be amended, supplemented or changed, and any provision hereof can be waived,
only by written instrument making specific reference to this Agreement signed
by
the Party against whom enforcement of any such amendment, supplement,
modification or waiver is sought. No action taken pursuant to this Agreement,
including any investigation by or on behalf of any Party, shall be deemed to
constitute a waiver by the Party taking such action of compliance with any
representation, warranty, covenant or agreement contained herein. The waiver
by
any Party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a further or continuing waiver of such breach or
as a
waiver of any other or subsequent breach. No failure on the part of any Party
to
exercise, and no delay in exercising, any right, power or remedy hereunder
shall
operate as a waiver thereof, nor shall any single or partial exercise of such
right, power or remedy by such Party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.
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75
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10.9 Table
of Contents and Headings.
The
table of contents and section headings of this Agreement are for reference
purposes only and are to be given no effect in the construction or
interpretation of this Agreement.
10.10 Notices.
All
notices and other communications under this Agreement shall be in writing and
shall be deemed given when (i) delivered personally or (ii) mailed by
certified or registered mail, return receipt requested, or (iii) sent by FedEx
or other nationally recognized express carrier, fee prepaid to the Parties
(and
shall also be transmitted by facsimile to the Persons receiving copies thereof)
at the following addresses (or to such other address as a Party may have
specified by notice given to the other Parties pursuant to this
provision):
If
to the
Seller: Tecumseh
Products Company
000
X.
Xxxxxxxxx Xxxxxx
Xxxxxxxx,
Xxxxxxxx 00000
Attn:
Xxxxx X. Xxxxxxxxx
Facsimile:
(000) 000-0000
With
a
copy to: Miller,
Canfield, Paddock and Stone, P.L.C.
000
Xxxx
Xxxx Xxxx Xxxx, Xxxxx 000
Xxxx,
Xxxxxxxx 00000
Attn:
Xxxxx X. Xxxxxxx, Esq.
Facsimile:
(000) 000-0000
If
to the
Purchaser, to: Franklin
Electric Co., Inc.
000
X.
Xxxxxx Xxxxxx
Xxxxxxxx,
Xxxxxxx 00000
Attn:
Xxxxxx X. Xxxxxx
Facsimile:
(000) 000-0000
With
a
copy to: Xxxxxx
Xxxxxx LLP
0000
Xxxxx Xxxxx
Xxxxxxx,
Xxxxxxxx 00000
Attn:
Xxxxxx X. Xxxxx and Xxxxx X. XxXxxx
Facsimile:
(000) 000-0000
10.11 Severability.
If
any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced under any Law or as a matter of public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated by this Agreement is not affected in any manner materially adverse
to any Party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the Parties shall negotiate
in
good faith to modify this Agreement so as to effect the original intent of
the
Parties as closely as
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76
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possible
in a mutually acceptable manner in order that the transactions contemplated
by
this Agreement be consummated as originally contemplated to the greatest extent
possible.
10.12 Binding
Effect; No Third Party Beneficiaries; Assignment.
This
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective successors and permitted assigns. Nothing in this Agreement
shall create or be deemed to create any third party beneficiary rights in any
Person not a Party to this Agreement. No assignment of this Agreement or of
any
rights or obligations hereunder may be made by either the Seller or the
Purchaser (by operation of law or otherwise) without the prior written consent
of the other Parties hereto and any attempted assignment without the required
consents shall be void.
10.13 Disclosure
Schedules.
No
reference to or disclosure of any item or other matter in any Section or
Schedule of this Agreement shall be construed as an admission or indication
that
such item or other matter is material or that such item or other matter is
required to be referred to or disclosed in this Agreement.
10.14 Rules
of Construction.
Interpretation of the Seller Documents and the Purchaser Documents (except
as
specifically provided in any such agreement, in which case such specified rules
of construction shall govern with respect to such agreement) shall be governed
by the following rules of construction: (a) words in the singular shall be
held to include the plural and vice versa, and words of one gender shall be
held
to include the other gender as the context requires; (b) references to the
terms Article, Section, paragraph, Annex, Exhibit and Schedule are references
to
the Articles, Sections, paragraphs, Annexes, Exhibits and Schedules to this
Agreement unless otherwise specified; (c) the word “including” and words of
similar import when used in the this Agreement shall mean “including without
limitation,” unless otherwise specified; (d) the word “or” shall not be
exclusive; (e) provisions shall apply, when appropriate, to successive
events and transactions; (f) the headings contained in this Agreement or
the Seller Documents or the Purchaser Documents are for reference purposes
only
and shall not affect in any way the meaning or interpretation of this Agreement;
and (g) this Agreement and each of the Seller Documents and the Purchaser
Documents shall be construed without regard to any presumption or rule requiring
construction or interpretation against the Party drafting or causing any
instrument to be drafted.
10.15 Counterparts.
This
Agreement and each of the Seller Documents and the Purchaser Documents may
be
executed in one or more counterparts, and by the different Parties to each
such
agreement in separate counterparts, each of which when executed shall be deemed
to be an original but all of which taken together shall constitute one and
the
same agreement. Delivery of an executed counterpart of a signature page to
this
Agreement or a Seller Document or a Purchaser Document by facsimile shall be
as
effective as delivery of a manually executed counterpart of any such
agreement.
10.16 Schedules,
Annexes, and Exhibits.
The
Schedule and all Annexes and Exhibits attached hereto are hereby incorporated
by
reference into, and made a part of, this Agreement.
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IN
WITNESS WHEREOF,
the
Parties have caused this Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first written above.
PURCHASER:
FRANKLIN
ELECTRIC CO., INC.
By:
/s/ R. Xxxxx Xxxxxxxx
Name:
R.
Xxxxx Xxxxxxxx
Title:
Chairman & CEO
SELLER:
TECUMSEH
PRODUCTS COMPANY
By:/s/
Xxxxx X. Xxxxxxxxx
Name:
Xxxxx X. Xxxxxxxxx
Title:
Vice President, Treasurer and Chief Financial Officer
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